HomeMy WebLinkAboutItem 15 - ATMOS Settlement ����'� �' --/�_._us_�.._...:,�
MEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
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FROM: BRUNO RUMBELOW, CITY MANAGER �
MEETING DATE: SEPTEMBER 9, 2008
SUBJECT: ATMOS RATE REVIEW MECHANISM SETTLEMENT
RECOMMENDATION:
City Council consider an ordinance approving a settlement with Atmos Energy on the
Rate Review Mechanism.
BACKGROUND
The City, along with 150 other cities served by Atmos Energy Mid-Tex Division ("Atmos"
or "Company"), is a member of the Atmos Cities Steering Committee ("ACSC"). On
April 14, 2008, Atmos filed with the City an application to increase natural gas rates
pursuant to the Rate Review Mechanism ("RRM") tariff approved by the City earlier this
year. The Company's April RRM filing seeks a $33.5 million rate increase. The City
worked with ACSC to analyze the schedules and evidence offered by Atmos to support
its request to increase rates. The Ordinance and attached tariff approving rates that will
increase the Company's revenues by $20 million effective October 1, 2008, are the
result of negotiation between ACSC and the Company to resolve issues raised by ACSC
during the review and evaluation of ACSC's RRM filing. The monthly bill impact for the
average residential customer is $0.81. The ACSC Executive Committee recommends
that al! ACSC cities adopt the ordinance impleme��ting the rate change.
RRM Backqround (Rate Review Mechanism):
The RRM tariff was approved by cities as part of the settlement agreement to resolve
Atmos' 2007 rate increase case. Atmos' rate request represents the first filing pursuant
to the three-year trial project known as the RRM process. The RRM process was
created collaboratively by the Steering Committee and Atmos as an alternative to the
GRIP (Gas Reliability Infrastructure Program) surcharge process. The RRM process
allows for a more comprehensive rate review and annual adjustment that will function as
a substitute for future GRIP filings during the three-year trial period specified by the tariff.
There are finro components to the RRM adjustment. The prospective component adjusts
rates for known and measurable changes in Operating and Maintenace and net plant
investment. Atmos and ACSC agreed to cap changes to expenses and invested capital
at no more than five percent. The true up component evaluates whether the Company
has over or underrecovered its earnings for the previous year. For purposes of the RRM
true up component, Atmos' rate of return on equity and its capital structure are frozen to
September 10, 2008 (1:27PM)
avoid the parent company from manipulating the overall rate of return. Costs expressly
prohibited from recovery through the RRM include first class air-fare, travel, meals or
`"" entertainment for employee's spouse, alcohol, sports events, entertainment, arts and
cultural events, sponsorship of sports, arts or cultural events, and social club
membership dues.
Purpose of the Ordinance:
The purpose of the Ordinance is to approve rate tariffs (Attachment A) that reflect the
negotiated rate change pursuant to the RRM process. The Ordinance also approves the
Company's proof of revenues (Attachment B), a required part of the RRM filing.
As a result of the negotiations, ACSC was able to reduce the Company's requested
$33.5 million RRM increase by more than 35 percent. Approval of the Ordinance will
result in rates that implement a $20 million increase in Atmos' revenues effective
October 1, 2008.
Reasons Justifvinq Approval of the Neqotiated Resolution:
During the time that the City has retained original jurisdiction in this case, consultants
working on behalf of ACSC cities have investigated the support for the Company's
requested rate increase. While the evidence does not support the $33.5 million increase
requested by the Company, ACSC consultants agree that the Company can justify an
increase in revenues of at least $19.8 million.
A contested case proceeding before the RRC on the Company's current application will
take several months and cost ratepayers millions of dollars in rate case expenses and
would not likely produce a request more favorable than that to be produced by the
settlement. The ACSC Executive Committee recommends that ACSC members take
action to approve the ordinance authorizing new rate tariffs.
The City Council Utility Committee has been briefed and concurs with Staff s
recommendation.
JCH
September 10, 2008 (1:27PM)
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ATTACHMENT A
ATMOS ENERG'(CORPORATIQN RRC TARtFF NO: 19843
M(D-TEX DIVISION REVISlON NO: 0
RATE SCHEDULE: 4 R—RESIDENTIAL SALES
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APPLICABLE TO: � Entire Division (except Environs areas and the City of Dailas}
EFFECTIVE DATE: ! 10/01/2008 PAGE: 23 �
Application
Applicabie to Residential Customers for all naturai gas provided at one Point of Delivery and measured ;
through one meter.
Type of Service
Where service of ihe type desired by Customer is not already available at the Point of Delivery, additional
charges and special contract arrangements between Company and Customer may be required prior to '
ser�ice being furnished. �
fitionth(y Rate
Customer's monthiy bili wili be calculated by adding the following Customer and Mcf charges to the
amounts due under the riders listed below:
Charge Amount
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Customer Charge per Bill $ 7.00 per month
Commodity Charge—All Mcf $2.2410 per Mcf ;
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Gas Cost Recovery: Plus an amount for gas costs and upstream transportation costs caiculated '
in aceordance with Part(a) and Part(b), respectively, of Rider GCR. ��
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Weather Normalization Adjustment: Plus or Minus an amount for weather normalization
caiculated in accordance with Rider WNA. �
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Rate Review Mechanism: Commodity Charge inciudes an amoun#calculated in accordance with �
Rider RRM.
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Franchise Fee Adjustment: Pius an amount for franchise fees caiculated in accordance with Rider
FF. Franchise Fees are to be assessed solely to customers within municipal limits. This does not
appfy to Environs Customers. ;
Tax Adjustment: Plus an amount for tax calculated in accordance with Rider TAX. '
Surcharges: Pius an amount for surcharges calculated in accordance with the appficable rider(s).
Agreement
An Agreement for Gas Service may be required.
Notice �
Service hereunder and the rates for services provided are subject to the orders of regulatory bodies
having jurisdiction and to the Company's Tariff for Gas Service.
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Issued By: David J. Park Vice President, Rates and Regulatory Affairs
Date Issued: 08/13l2008
ATTACHMENT A
ATMOS ENERGY CORPORATIOPV RRC TARIFF NO: 19844
MID-TEX QIVtSION REVIS(ON NO: Q
RATE SCHEDU�E: C—COMMERCIAL SALES '
APPLlCABLE TO: Entire Qivision(except Environs areas and the City of Dailas)
EFFECl'1VE DATE: 10/01/2008 PAGE: 24 !
Appficafion
Applicabie to Commerciai Customers for all natural gas provided at one Point of Delivery and measured
through one meter and to Industria!Customers with an average annual usage of less than 3,000 Mcf.
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Type of Service
Where service of the type desired by Customer is not already available at the Point of Delivery, additional
charges and special contract arrangements between Company and Customer may be required prior to '
service being furnished.
Monthly Rate
Customer's monthly bill will be calculafed by adding the following Customer and Mcf charges fo the ;
amounts due under the riders listed below:
Charge Amount '�!
Customer Charge per Bill $ 13.50 per month '
Commodity Charge-All Mcf $ 0.9809 per Mcf
Gas Cost Recovery: Plus an amount for gas costs and upstream transportation costs calculated
in accordance with Part(a) and Part(b), respectively, of Rider GCR.
Weather Normalization Adjustment: Plus or Minus an amount for weather normalization
calculated in accordance with Rider WNA.
Rate Review Mechanism: Commodity Charge includes an amount calculated in accordance with
Rider RRM. !
Franchise Fee Adjustment: Plus an amount far franchise fees calculated in accordance with Rider '
FF. Franchise Fees are to be assessed solely to customers within municipal limits. This does not
apply to Environs Customers.
Tax Adjustment: Plus an amount for tax calculated in accordance with Rider TAX.
Surcharges: Plus an amount for surcharges calculated in accordance with the applicable rider(s).
Agreement
An Agreement for Gas Service may be required.
Notice
Service hereunder and the rates for services provided are subject to the orders of regulatory bodies
having jurisdiction and to the Company's Tariff for Gas Service.
Issued By: David J. Park Vice President, Rates and Regulafory Affairs i
Date Issued: 08/13/2008
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ATTACHMENT A '
ATMOS ENERGY CORPOR,4TtON RRC TARIFF NO: 19842
MID-TEX QNtS10N REVISION NO: d
RATE SCHEDULE: I—lNDUSTRlAL SALES '
APPLICABLE TO: Entire Division (except Environs areas and the City of Dallas)
EFFECTNE DATE: 10/07/2008 I PAGE: 25
Application
Applicabie to Industrial Customers with a maximum daily usage (MDU)of less than 3,500 MMBtu per day
for all natural gas provided at one Point of Delivery and measured through one meter. Service for
Industriai Customers with an MDU equal to or greater than 3,500 MMBtu per day wili be provided at
Company's sole option and will require special contract arrangements between Company and Customer.
Type of Service
Where service of the type desired by Customer is not already available at the Point of Delivery, additiona!
charges and special contract arrangements between Company and Customer may be required prior to
service being furnished.
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Monfhly Rate
Customer's monthly bill wiil be calculated by adding the foliowing Customer and MMBtu charges to the
amounts due under the riders listed below:
Charge Amount
Customer Charge per Meter $425.00 per month �
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First 0 MMBtu to 1,500 MMBtu $0.2733 per MMBfu
Next 3,500 MMBtu $0.1993 per MMBtu
Ril MMBtu over 5,000 MMBtu �0.0427 per MMBtu
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Gas Cost Recovery: Plus an amount for gas costs and upstream transportation costs calculated ;
in accordance with Part(a) and Part(b), respectively, of Rider GCR. �
Rate Review Mechanism: Commodity Charge includes an amount caiculated in accordance with I
Rider RRM.
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Franchise Fee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider �
FF. Franchise Fees are to be assessed solely to customers within municipal limits. This does not �
apply to Environs Customers. i
Tax Adjustment: Plus an amount for tax calculated in accordance with Rider TAX. �
Surcharges: Pius an amount for surcharges calcufated in accordance with fhe applicable rider(s). ,
Curtailment OverpuN Fee
Upon notification by Company of an event of curtailment or interruption of Customer's deliveries,
Customer will, for each MMBtu delivered in excess of the stated level of curtaiiment or interruptian, pay
Company 200% of the midpoint price for the Katy point listed in Platts Gas Daily published for the
applicable Gas Day in the tabie entit�ed"Daily Price Survey."
Issued By: David J. Park Vice President, Rates and Regulatory Affairs
Date tssued: 08/13/2008
ATTACHMENT A
ATMOS ENERGY CORPORATION RRC TAR{FF NO: 19842
MIQ-7EX DtV1S10N REVtSlON NO: 0
� RATE SCHEDULE: I—lNDUSTRtAL SALES
APPLICABLE TO: Entire Division {except Environs areas and the City of Dailas) '
EFFECTIVE DATE: 10/01i2008 PAGE: 26
Replacement(ndex
In the event the "midpoinY' or "common" price for the Katy point {isted in PJatts Gas Daily in the table
entitled "Daily Price Survey" is no longer pubiished, Company will calculate the applicable imbalance fees
utilizing a daily price index recognized as authoritative by the natural gas industry and most closely
approximating the appiicable index.
Agreement f
An Agreement for Gas Service may be required.
Notice
Service hereunder and the rates for services provided are subject to the orders of regulatory bodies
having jurisdiction and to the Company's TarifF for Gas Service. '
Special Conditions
In order to receive service under Rate I, Customer must have the type of ineter required by Company.
Customer must pay Company all costs associated with the acquisition and instaliation of the meter.
Issued By: David J. Park Vice President, Rates and Regulatory Affairs
Date Issued: 08/13/2008 �
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ATTACHMENT A
ATMOS ENERGY C�RPORATIQPI RRC TARIFF NO: 19845
M1D-TEX DiVIS10N REVIS(ON NO: 0
RATE SCHEDULE: T—TRANSPORTATION
APPLiCABLE TO: Entire Division {except Environs areas and the City of Dallas)
EF�ECTIVE DATE: 10/09/2008 PAGE: 27 ;
Apptication
Applicable, in the event that Company has entered into a Transportation Agreement, to a customer '
directly connecfed to the Atmos Energy Corp., Mid-Tex Division Distribu#ion System (Customer) for the
transpa�tation of a11 naturai gas supplied by Customer or Customer's agent at one Point of Delivery for
use in Customer's facility.
Type of Service
Where service of the type desired by Customer is not already availa�le at the Point of Delivery, additional
charges and special contract arrangements between Company and Customer may be required prior to
service being furnished.
MonEhly Rate
Customer's bill will be calculated by adding the following Customer and MMBtu charges to the amounts '
and quantities due under the riders listed below:
Charge Amount
Customer Charge per Meter $425.00 per month
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First d MMBtu to 1,500 MMBtu $0.2733 per MMBtu '
Next 3,500 MMBtu �0.1993 per MMBtu
All MMBtu over 5,000 MMBtu $0.0427 per MMBtu
Upstream Transportation Cost Recovery: Plus an amount for upstream transportation costs in
accordance with Part(b) of Rider GCR. �
Rate Review Mechanism: Gommodity Charge includes an amount calculated in accordance with
Rider RRM. '
Retention Adjustment: Plus a quantity of gas as calculated in accordance with Rider RA. '
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Franchise Fee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider ,
FF. Franchise Fees are to be assessed solely to customers within municipal limits. This does not
apply fo Environs Customers.
Tax Adjustment: Plus an amount for tax calculated in accordance with Rider TAX.
Surcharges: Plus an amount for surcharges calculated in accordance with the applicable rider(s}.
Imbalance Fees
All fees charged to Customer under this Rate Schedule will be charged based on the quantities '
determined under the applicable Transportation Agreement and quantities will not be aggregated for any
Customer with multiple Transportation Agreements for the purposes af such fees.
(ssued By: David J. Park Vice President, Rates and Regulatory Affairs
Date Issued: 08/13/200$
ATTACHMENT A
ATMOS ENERGY CORPORATION RRG TARIFF NO: 19845
MtD-TEX DIV{StON REViSION NO: 0
RATE SCHEDULE: T—TRANSPORTATION
APPLICABLE TO: ` Entire Division (except Environs areas and the City of Dallas)
EFFECT(VE DATE: 10/01/2008 PAGE: 28
Mon#h1y fmbalance Fees
Customer shall pay Company the greater of(i)�0_10 per MMBtu,or(ii) 150%of the difference per MMBtu
between the highest and lowest "midpoinY' price for the Katy point listed in Platts Gas Daily in the table
entitled "Daily Price Survey" during such month, for the MMBtu of Customer's monthly Cumulative
Imbalance, as defined in fhe applicable Transportation Agreement, at the end of each month that exceeds
10%of Customer's receipt quantities for the month.
Curtailment OverpuH Fee
Upon notification by Company of an event of curtailment Qr interruption of Customer's deliveries,
Customer will, for each MMBtu delivered in excess of the sta#ed level of curtailment or interruption, pay
Company 200% of the midpoint price for the Katy point lisfed in Platts Gas Daily published for the
applicable Gas Day in the table entitled "Daily Price Survey."
Replacement Index
In the event the "midpoint" or "common" price for the Katy point listed in PIa(fs Gas Daily in the table
entitled"Daily Price Survey" is no longer published, Company will calculate the applicabie imbalance fees
utilizing a daily price index recognized as authoritative by the natural gas industry and most closely
approximating the applicable index.
Agreement
A transpo�tation agreement is required.
Notice
Service hereunder and the rates for services provided are subject to the orders of regulafory bodies
having jurisdiction and to the Company's Tariff for Gas Service.
Special Conditions
In order to receive service under Rate T, customer must have the type of ineter required by Company. '
Customer must pay Company all costs associated with the acquisition and installation of the meter.
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Issued By: David J. Park Vice President, Rates and Regulatory Affairs '
Date(ssued: 08l'f 3/2008 �
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ATTACHMENT A
ATMOS ENERGY CORPORATION
MID-TEX DIVISIOIV REVISlON NO: 0
RiDER: GCR—GAS COST RECQVERY
APPLlCASLE TO: Entire Division
EFFECTNE DATE: 10/01/2008 PAGE: 40
Applicabie to Rate R, Rate C, and Rate 1 for all gas sales made by Company, 2nd applicable to Rate R,
Rate C, Rate I, and Rate T for recovery of Pipeline System costs. The total gas cost recovery amount
due is determined by adding the gas cost calculated in Section (a) below and the pipeline cost calculated
in Section(b) below.
The amount due for gas cost(Section(a}) is determined by multiplying the Gas Cost Recovery Factor
(GCRF)by the Customer's monthly voiume. For Customers receiving service under Rate R and Rate C,
monthly volume will be calculated on a Mcf basis. For Customers receiving service under Rate I, ,
month(y volume wili be calculated on an MMBtu basis and the quaniities wiil be adjusted as necessary to
recover actua(gas costs.
The amount due for pipe(ine cost(Section(b)) is determined by multiplying the Pipe(ine Cost Factor
(PCF) by the Customer's monthly volume. For Customers receiving service under Rate R and Rate C,
monthly volume will be calculated on an Mcf basis. For Customers receiving service under Rate I and
Rate T, monthly volume wi(I be calculated on an MMBtu basis and the quantities will be adjusted as
necessary fo recover actual gas costs. '
{a)Gas Cost
Method of Calculation
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The monthly gas cost adjustment is calculated 6y the application of a Gas Cost Recovery Factor(GCRF},
as determined with the following formula:
GCRF= Estimated Gas Cost Factor{EGCF) + Reconciliation Factor(RF)+Taxes (TXS)
EGCF= Estimated cost of gas, including lost and unaccounted for gas attributed to residential,
commercial, and industrial sales, and any reconciliation balance of unrecovered gas costs, divided
by the estimated total residential, commercial, and industrial sales. Lost and unaccounted for gas is ;
limited to 5%. f
RF= Calculated by dividing the difference between the Actual Gas Cost Incurred, inc(usive of
interest over the preceding twelve-month period ended June 30 and the Actual Gas Cost Billed
over that same twelve-month period by the estimated total residential, commercial, and industrial
sales for the succeeding October through June billing months. The interest rate to be used is the
annual interest rate published by the PUC every December. The interest rate of 2008 is 4.69%.
Actual Gas Cost Incurred = The sum of the costs booked in Atmos Energy Corp., Mid-Tex
Division account numbers 800 through 813 and 858 of the FERC Uniform System of Accounts,
including the net impact of injecting and withdrawing gas from storage. Also includes a credit or �
debit for any out-of-period adjustments or unusual or nonrecurring costs typically considered gas
costs and a credit for amounts received as Imbalance Fees or Curtailment Overpull Fees.
Actual Gas Cost Billed = EGCF multiplied by the monthly volumes billed to Residential,
Commercial and Industrial Sales customers, less the total amount of gas cost determined to have
been uncollectib►e and written off which remain unpaid for each month of the reconciliation period.
Issued By: David J. Park Vice President, Rates and Regulatory Affairs �
Date {ssued: 08/13l2008 �
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ATTACHMENT A
ATMOS ENERGY CORPORATION
MtD-TEX DiViS10N REV(SiON N�: 0
RIDER: 4 GCR—GAS GOST RECOVERY '
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APPLICABLE TO: Entire Division
EFFECTtVE DATE: 10/01/2008 I PAGE:41 �
Any amount remaining in the reconciliation balance after the conclusion of the period of
amortization will be maintained in the reconciliation balance and included in the collection of the
ne�RF.
Atmos Energy shall file annual reports with the Commission, providing by monfh the following
amounts: Gas Cost Written Off. Margin Written Off, Tax and Other Writfen O{f, Totai Written Off,
Gas Cost Collected and Margin Collected.
TXS=Any statutorily imposed ass�ssments or taxes applicable to the purchase of gas divided by
the estimated total residential, commercial, and industria�sales.
ADJ =Any surcharge or refund ordered by a regulatory authority, inclusive of interest, divided by the
estimated tatal residentiai, commercial, and industrial sales is to be included as a separate line item ',
surcharge.
(6) Pipeline Cost
Method of Calculation
Each month, a Pipeline Cost Factor(PCF) is caiculated separately for each Pipeline Cost Rate Class
listed below. The formula for the PCF is:
PCF= PP/S, where:
PP = (P -A)x D,where:
P= Estimated month�y cost of pipeline service calculated pursuant to Rate CGS
D= Pipeline service allocation factor for the rate class as approved in the Company's most recent
rate case, as foliows:
Pi eline Cost Rafe Class � Allocation Factor D
Rate R -Residentiai Service � .634698
Rate C-Commercial Service .302824
Rate I -industrial Service and Rate T-Transportation Service .062478
A=Adjustment applied in the current month to correct for the difference between the actual and
estimated pipeline cost revenue of the second preceding month, calculated by the formuia:
A= R-(G-A2), where: �
R =Acfual revenue received from the application of the PP component in the second preceding
month.
C=Actual pipeline costs for the second preceding month.
A2=The adjustment(A) applied to the PP component in the second preceding month. �
issued By: David J. Park Vice President, Rates and Regulatory Affairs ;
Date Issued: 08/13/2008
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ATTACHMENT A ,
ATMOS ENERGY CC?RPC)RATIC)N
MfD-TEX DtVISION REVISiON NO: 0
R1DER: � GCR—GAS COST RECOVERY
k
APPLtCABLE TO: Entire Division (
EFFECTIVE DATE: 10/0112008 � PAGE:42
S= Estimated Mcf or MMBtu for the rate class for the current biiling month.
The PCF is ca(culated to the nearest 0.0001 cent.
The Pipeline Cost to be billed is determined by muftiplying the Mcf or MMBtu used by the appropriate
PCF. The Pipeline Cost is determined to the nearest whole cent.
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issued By: David J. Park Vice President, Rafes and Regulatory Affairs
Date tssued: 08/13/2008 '
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ATTACHMENT A
ATMOS ENERGY CORPORATION
MtD-TEX DIViSION REVISION NO: 0
R1DER: CEE—CONSERVATIQN& ENERGY EFFICIEM1lCY
APPLICABLE TO: Entire Division
EFFECTIVE DATE: 101Q1/2008 PAGE: 58
Purpose
Atmos Energy Mid-Tex is proposing to institute a complete Conservation & Energy Effciency program '
which wiil offer assistance to qualified customer segments in reducing energy consumption and lowering
energy utility bilis. The proposal is one where Atmos Energy shareholders will fund a percentage of the
a(Iowabls expenses incurred annually, with a customer rate componenf providing the remainder of the
funding. Following is a high-levei, concept summary of the proposal. Atmos Energy Mid-Tex Division
proposes to work with the communities it serves to develop the details of a new tariff and programs ;
addressing conservation and energy efficiency.
Synopsis:
Voucher system to provide free energy savings materials and supplies to qualifying customers of Atmos '
Mid-Tex. Qualified Customers wiil receive up to two hundred dollars ($200.00) worth of caulking,
weather-stripping, sheathing, sealing, wafer heafer blankets, and like materials, other energy saving
devices such as clock-thermostats, set-back devices("covered items")from approved suppliers/retailers.
Company will undertake efforts to enlist support from community groups, induding its own Employee
Action Program, to assist customers with installation. If it is determined that professional installation
capabilities are necessary, the parties will agree on labor assistance amounts.
Eliqibilitv
Low Income — Low-income rate-payers that qualify for heating bill assistance through LIHEAP
agencies and all agencies that distribute Atmos "Share the Warmth" funds. Agencies that allocate
assistance funds denote customer as Low Income, a status that lasts for one year.
Senior Citizen — Primary account holder can requesf eligibility through ATM call center or web-site.
Customer provides primary SSN which is verified through Social Security Administration. And account
holder that is or tums 65 years old in that year becomes eligible.
Fundinq
Initial program funding will be at two million dollars (�2,000,000). Atmos Energy shareholders will
contribute one million dollars (�1,000,000.00) to this initiative annually with ratepayers providing one '
million dollars($1,000,000.00) per year. It is proposed that the program operate on an October 1 through
September 30 year, with benefits being capped at the two miltion dollar level for the initial program period.
Administration:
A third-party administrator will coordinate qualification of customers, voucher distribution, subsequent
verification and reimbursement of eligible expenditures and general program administration. Program
administrafion expenses will be funded from the annual approved budget.
Audits wifl be provided all interested parties within 120 days of the end of each program year to determine
effectiveness.
Issued By: David J. Park Vice President, Rates and Regulatory Affairs
Date tssued: 08/13/2008
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ATTACHMENT A
ATMOS ENERGY CQRPORA710N
M1D-TEX DIViSlON REVIStON NO: 0
RIDER: CEE—CONSERVAT(ON � ENERGY EFFICIENCY
APPLICABLE TO: Entire Division
EFFECTIVE DATE: 10/0112008 PAGE: 59 ,
Report
Afmos shall fiie an annual repoc#detailing cost to administer the program with details of the amounfs paid �
out of program for energy conversation assistance. The report shall also detail number of applicants,
number rejected and accepted and reason rejected. The reporf shall be filed wi#h the Gas Service
Director.
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Issued By: David J. Park Vice President, Rates and Regulatory Affairs i
Date Issued: 08/13/2008
ATTACHMENT A
ATMOS ENERGY CORPORATlON
MiD-TEX DtVISION REVISION NO: 0
RIDER: FF—FRANCHISE FEE ADJUSTMENT
APPLICABLE TO: Entire Division
EFFECTIVE DATE: 10/01/2008 PAGE:43
Appfication
Applicable to Customers inside the corporate limits of an incorporated municipality that imposes a
municipal franchise fee upon Company for the Gas Service provided to Customer. Franchise Fees to be
assessed solely to cust�mers within the municipal limifs. This does not apply to Environs customers. ,
Monthly Adjus#ment ;
Company will adjust Customer's bi8 each month in an amount equal to the municipal franchise fees '
payable for the Gas Service provided to Cusfomer by Company. Municipal franchise fees are determined ;,
by each municipality's franchise ordinance. Each municipality's franchise ordinance will specify the
percentage and applicability of franchise fees.
From time to time, Company wiil make further adjustments to Customer's bill to account for any over- or
under-recovery of municipal franchise fees by Company.
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Issued By: David J. Park Vice President, Rates and Regulatory Affairs �
Date Issued: 08/13/2008
ATTACHMENT A
TARIFF FOR GAS SERV{CE ATMOS ENERGY CORP.,
MID-TEX DIV(StON
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RIDER: Rider WNA—Weather Normalization Adjustment
APPLtCABLE TO: Entire System {except Environs areas REVISION: ',
and the City of Dalias) DATE:
EFFECTiVE DATE: 11101/2008 PAGE: 1 OF 2
RIDER WNA—Weather NormaEization Adiustment
Provisions for Adiustment
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The base rate per Mcf(1,000,000 Btu) for gas service set forth in any Rate Schedules utilized by the
cities of fhe Mid-Tex Division service area for determining normalized winter period revenues shall be ;
adjusted by an amount hereinafter described,which amount is referred to as the "Weather Normalization ;
Adjustment." The Weather Normalization Adjustment shall apply to all temperature sensitive residential,
and commercial bills based on meters read during the revenue months of November through Aprii. The
five regional weather stations are Abilene, Austin, Dallas,Waco, and Wichita Falls. .,
Computafion of Weather Normalization Adjusfinent
The Weather Normalization Adjusfinent Factor shalt be computed to fhe nearest one-hundredth cent
per Mcf by the following formula:
(HSF x (NDD-ADD) ) �
WNAFi = R� ;
(BL� + (HSFi x ADD) ) � ;
Where
i = any particular Rate Schedule or billing classification within any such
particular Rate Schedule fhat eontains more than one billing classification
WNAF� = Weather Normalization Adjustment Factor for the i�h rate schedule or �
classification expressed in cents per Mcf j
R� = base rate of temperature sensitive sales for the ith schedule or �
classification approved by the entity exercising original jurisdiction. `
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HSFi = heat sensitive factor for the ith schedule or classification calculated as the
slope of the linear regression of average sales per b+ll (Mcfl and actual ;
heating degree days by month for the test year by schedule or classification
and weather station as part of the RRM filing.
NDD = billing cycle normal heating degree days calculated as the simple ten-year
average of actual heating degree days.
ADD = billing cycle actual heating degree days.
BI� = base load sa�es for the it�schedule or classification calcufated as the y- ;
intercept of the linear regression of average sales per bill (Mc� and actual
heating degree days by month for the test year by schedule or classification
and weather station as part of the RRM filing.
The Weather Normalization Adjustment for the jth customer in ifh rate schedule is computed as: � !
�
WNA;= WNAF; x q;�
i
ATTACHMENT A
TARtFF FOR GAS SERVECE ATMOS ENERGY CORP.,
MID-TEX DIVISION
RATE SCHEDULE: Rate WNA—Weather Normaliaation Ad}usfinent
APPLtCABLE TO: Entire System (excepf Environs areas REVISION: '
and the City af Daltas) DATE:
EFFECTIVE DATE: 11/01/2008 PAGE: 2 OF 2
Where q;�is the relevanf sales quantity for the jth customer in ith rate schedule.
Filinqs with Enti#ies Exercising Oriqinal Jurisdiction
As part of its annual RRM filing the Company will file (a)a copy of each computation of the Weather
Normalization Adjustment Factor, (b}a schedule showing the effective date of each such Weather
Normalization Adjusfinent, (c) a schedule showing the factors of values used in calculating such
Weather Normalization Adjustment and {d)a random sample and audit of thirty (30)actual customer
bilis, with customer information deieted, for each rate schedule or ciassification to which the WNA was
applied in the preceding 12 month pericd. To the extent that source data is needed to audit the WNA
application, such data will be provided by the Company as part of the annuai RRM filing.
If the RRM is discontinued, as provided in the Rider RRM tariff, the inforrnation required herein to be
filed with the entities exercising originai jurisdiction shall be filed on March 1 of each year.
Base Use/Heat Sensitivitv(HSF) Factors
Residential Commercial
Base use HSF Base use HSF i
Weather Station Mcf McflHDD Mcf Mcf/HDD '
Abilene 1.27 .0130 10.93 .0638 ,
Austin 1.29 .0133 18.47 .0641 '
Dallas 1.79 .0186 20.83 .0878
Waco 1.30 � .0141 11.41 .0617
Wichita 1.35 .0143 11.62 .0540 '
Falls
Sample WNRF�Calculation:
(.0131 x (30-17) ) �
.1533 per Mcf = 1.2267 x
(1.14 + (.0131 x 17) )
Where '
i = Residentiai Single Block Rate Schedule
R� = 1.2267 per MCF (Rate R-Final Order GUD No. 9670)
HSFi = .0131 (Residential-Abilene Area)
NDD = 30 HDD (Simple ten-year average of Actuai HDD for Abilene Area—9/15/06
—10/14/06}
ADD = 17 HDD (Actual HDD for Abilene Area—9/15106— 10/14/06)
BL� = 1.14 Mcf(Residential -Abilene Area) '
ATTACHMENT B
.���.;
ATMOS ENERGY CORP., �1D-TEX DiVIStON
SUMMARY PROOF OF REVENUE AT PROPOSED RATES
TEST YEAR ENDING DECEMBER 31, 20Q7 ,
Line Description Totai Reference
(a) (�) (�)
Rate R
1 Rate Characteristics:
RRM Settlement
Agreement,
2 Customer Charge $7.00 Pg 2, (tem 5
3 :
4 Consumption Charge ($/Mc� $2.160d Settlement Allocation
5 2007 RRM True-up ($/Mc� $0.0810 Seftiement Allocation
6 Rider GCR Part A $8.1244 scheduie H
7 Rider GCR Part B $0.6243 scneduie i
8
9 Billinq Units (1):
10 Biils 17,069,679 WP_J-1.1
11 Totai MCF 78,708,921 WP_J-1.1
12
13 Proposed Revenue: �
14 Customer Charge � 119,487,753
15 Consumption Charge 176,385,175
16 Base Revenue $ 295,872,928
17 Rider GCR Part A 639,460,135
18 Rider GCR Part B 49,140,231 '
19 Subtotal � 984,473,295
20 Revenue Re(ated Taxes 59,244,614 �
21 "
22 Total Proposed Revenue- Rate R $ 1,043,717,909 '
i
23 �
24 Note 1: See Billing Determinants Study for details.
t
�}�y' f
I
ATTACHMENT B
ATMOS ENERGY CORP., MtD-TEX DIVlSION
SUMMARY PROOF OF REVENUE AT PROPOSED R,4TES
TEST YEAR ENDlNG DECEMBER 31, 2007
;
Line Descrip#ion Total Reference "
(a) (b) (c) ;
Rate C �
;
1 Rate Charac#eristics:
RRM Settlement
Agreement, �
2 Customer Charge $13.50 Pg 2, {tEm 5
3 ;
4 Consumption Charge (�/Mcfl $0.9442 Settiement Allocation
5 2007 RRM True-up ($/Mcfi� $0.0367 Settlement Allocation ;
6 Rider GCR Part A $8.1244 Schedute H �
7 Rider GCR Part B $0.5228 Schedule I
8
9 Billing Units {1):
10 Bills 1,434,516 WP_J-1.2
11 Total MCF 50,233,642 WP_J-1.2 �
12 �
13 Proposed Revenue:
14 Customer Charge $ 19,365,966
15 Consumption Charge 49,273,373
16 Base Revenue $ 68,639,339
17 Rider GCR Part A 408,116,524
18 Rider GCR Pact 8 26,261,046
19 Subtotal $ 503,016,909
20 Revenue Re(ated Taxes 30,271,052
21
22 Tofal Proposed Revenue- Rate C $ 533,287,962
23
24 Note 1: See Billing Determinants Study for details.
;
!
i
i
i
{
f
i
�
j
i
i
ATTACHMENT B
ATMOS ENERGY CORP., MID-TEX DtViSION
SUMMARY PROOF OF REVENUE AT PROPOSED RATES
TEST YEAR ENDING DECEMBER 31, 2007
Line Description Totai Reference
(a) (b) (c)
Rate 1 &T
1 Rate Characteristics:
2 Customer Charge $ 425.00 Settiement Allocation ;
3
4 Block 1 ($IMMBTU) $0.2352 Settlement Ailocation
5 Biock 2 ($iMMBTU} $0.1715 Settlement Allocation
6 Block 3 ($/MMBTU) $0.0367 Settiement Allocation
7 2007 RRM True-up ($/MMBTU): Settlement Ailocatian
8 Biock 1 ($lMMBTU) $d.0381
9 Biock 2 ($/MMBTU) $0.0278
10 Block 3 ($/MMBTU) $0.0060 ;
11 Rider GCR Part A $8.1244 Schedule H
12 Rider GCR Part B $0.2938 schedu�e�
13
14 Consumption Characteristics:
15 Block 1 (First 1,500 MMBTU) 0.23502 (�)
16 Block 2 (Next 3,500 MMBTU ) 0.26655 (�)
17 Block 3 (Over 5,000 MMBTU ) 0.49843 (�} '
18 �
19 Billing Units (1): `
20 BIIIS 10,052 WP_J-1 `
21 Block 1 9,522,217 WP_J-1
22 Biock 2 10,799,921 WP_J-1
23 Block 3 20,195,218 WP_J-1
24 Totat MMBTU 40,517,356
25
26 Sales Volumes 2,331,063 WP_J-1
i
27 i
28 Proposed Revenue:
29 Customer Charge $ 4,272,100
30 Bloek 1 2,602,422 '
31 Block 2 2,152,424
32 Block 3 862,336
33 Base Revenue $ 9,889,282
34 Rider GCR Part A 18,494,542
35 Rider GCR Part B 11,902,411
36 Subtotal $ 40,286,235
37 Revenue Related Taxes 2,424,385
38
39 Totai Proposed Revenue- Rate I�T $ 42,710,620
40
41 Note 1: See Billing Determinants Study for details.
� � ��
� �
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF GRAPEVINE, TEXAS, ("CITY") APPROVING A
NEGOTIATED RESOLUTION BETWEEN THE ATMOS
CITIES STEERING COMMITTEE AND ATMOS ENERGY
CORP., MID-TEX DIVISION ("ATMOS MID-TEX" OR "THE
COMPANY") REGARDING THE COMPANY'S RATE
REVIEW MECHANISM FILING IN ALL CITIES
EXERCISING ORIGINAL JURISDICTION; DECLARING
EXISTING RATES TO BE UNREASONABLE; ADOPTING
TARIFFS THAT REFLECT RATE ADJUSTMENTS
CONSISTENT WITH THE NEGOTIATED SETTLEMENT
AND FINDING THE RATES TO BE SET BY THE
ATTACHED TARIFFS TO BE JUST AND REASONABLE;
APPROVING ATMOS' PROOF OF REVENUES;
ADOPTING A SAVINGS CLAUSE; DETERMINING THAT
THIS ORDINANCE WAS PASSED IN ACCORDANCE WITH
THE REQUIREMENTS OF THE TEXAS OPEN MEETINGS
ACT; REQUIRING DELIVERY OF THIS ORDINANCE TO
THE COMPANY AND LEGAL COUNSEL AND PROVIDING
AN EFFECITVE DATE
WHEREAS, the City of Grapevine, Texas ("City") is a gas utility customer of
Atmos Energy Corp., Mid-Tex Division ("Atmos Mid-Tex" or "the Company"), and a
regulatory authority with an interest in the rates and charges of Atmos Mid-Tex; and
WHEREAS, the City is a member of the Atmos Cities Steering Committee
("ACSC"), a coalition of more than 150 similarly situated cities served by Atmos Mid-Tex
that have joined together to facilitate the review and response to natural gas issues
affecting rates charged in the Atmos Mid-Tex service area (such participating cities are
referred to herein as "ACSC Cities"); and
WHEREAS, Atmos and ACSC Cities have been in continuing disagreement,
dispute, and litigation over the implementation of GRIP surcharges pursuant to Section
104.301 of the Texas Utilities Code; and
WHEREAS, as part of the negotiations to resolve Atmos' 2007 rate case, ACSC
Cities and the Company worked collaboratively to develop the Rate Review Mechanism
("RRM") tariff that allows for an expedited rate review process controlled by Cities as a
substitute to the current GRIP process instituted by the Legislature; and
WHEREAS, the City took action earlier this year to approve a Settlement
Agreement with Atmos Mid-Tex resolving the Company's 2007 rate case and
authorizing the RRM Tariff; and
WHEREAS, on or about April 14, 2008, Atmos Mid-Tex filed with the City its first
application pursuant to the RRM tariff to increase natural gas rates by approximately
$33.5 million, such increase to be effective in every municipality that has adopted the
RRM tariff within its Mid-Tex Division; and
WHEREAS, ACSC Cities coordinated its review of Atmos' RRM filing and
designated a Negotiation Committee made up of ACSC representatives and assisted by
ACSC attorneys and consultants to resolve issues identified by ACSC in the Company's
RRM filing; and
WHEREAS, the Company has filed evidence that existing rates are
unreasonable and shoutd be changed; and
WHEREAS, independent analysis by ACSC's rate expert concluded that Atmos
is able to justify a rate increase of$19.8 million; and
WHEREAS, the ACSC Executive Committee, as well as ACSC lawyers and
consultants, recommends ACSC members approve the attached rate tariffs (Attachment
"A" to this ordinance) that will increase the Company's revenue requirement by $20
million; and
WHEREAS, the attached tariffs implementing new rates and Atmos' Proof of ��
Revenues (Attachment "B" to this ordinance) are consistent with the negotiated
resolution reached by ACSC Cities (including but not limited to a reduction of the
residential customer monthly charge to $7.00 per month) and are just, reasonable, and
in the public interest; and
WHEREAS, it is the intention of the parties that ACSC Cities receive the benefit
of any Settlement Agreement that Atmos enters into with other entities arising out of its
RRM or any associated appeals of a decision entered by the Railroad Commission
regarding the Company's request to increase rates. The ACSC Cities' acknowledge
that the exercise of this right is conditioned upon the ACSC Cities' acceptance of all
rates, revenues, terms and conditions of any other Settlement Agreement or associated
appeals arising out of the Company's RRM filing in toto; and
WHEREAS, the negotiated resolution of the Company's RRM filing and the
resulting rates are, as a whole, is in the public interest.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF GRAPEVINE, TEXAS:
Section 1. That the findings set forth in this ordinance are hereby in all things
approved.
ORD. NO. 2
Section 2. That the City Council finds that the existing rates for natural gas
service provided by Atmos Mid-Tex are unreasonable and new tariffs and Atmos' proof
of revenues, which are attached hereto and incorporated herein as Attachments "A" and
"B", are just and reasonable and are hereby adopted.
Section 3. That to the extent any resolution or ordinance previously adopted by
the Council is inconsistent with this ordinance, it is hereby repealed.
Section 4. That the meeting at which this ordinance was approved was in all
things conducted in strict compliance with the Texas Open Meetings Act, Texas
Government Code, Chapter 551.
Section 5. That if any one or more sections or clauses of this ordinance is
adjudged to be unconstitutional or invalid, such judgment shall not affect, impair or
invalidate the remaining provisions of this ordinance and the remaining provisions of the
ordinance shall be interpreted as if the offending section or clause never existed.
Section 6. That if ACSC Cities determine any rates, revenues, terms and
conditions, or benefits resulting from a Final Order or subsequent negotiated settlement
approved in any proceeding addressing the issues raised in Atmos' RRM filing would be
more beneficial to the ACSC Cities than the terms of the attached tariff, then the more
favorable rates, revenues, terms and conditions, or benefits shall additionally accrue to
the ACSC Cities. Exercise of this right is conditioned upon ACSC Cities' acceptance of
all rates, revenues, terms and conditions of any other Settlement Agreement or
associated appeals arising out of the Company's RRM filing in toto.
Section 7. That this ordinance shall become effective from and after its passage
with rates authorized by attached Tariffs to be effective for customer bills delivered on or
after October 1, 2008.
Section 8. That a copy of this ordinance shall be sent to Atmos Mid-Tex, care of
David Park, Vice President Rates and Regulatory Affairs, at Atmos Energy Corporation,
5420 LBJ Freeway, Suite 1800, Dallas, Texas 75240, and to Geoffrey Gay, General
Counsel to ACSC, at Lloyd Gosselink Rochelle & Townsend, P.C., P.O. Box 1725,
Austin, Texas 78767-1725.
Section 9. That the fact that the present ordinances and regulations of the City
of Grapevine, Texas, are inadequate to properly safeguard the health, safety, morals,
peace and general welfare of the inhabitants of the City of Grapevine, Texas, creates an
emergency which requires that this ordinance become effective the 1 st day of October,
2008.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF
GRAPEVINE, TEXAS on this the 16th day of September, 2008.
ORD. NO. 3
APPROVED:
ATTEST:
APPROVED AS TO FORM:
ORD. NO. 4