R-10-09-23-10D1 - 9/23/2010RESOLUTION NO. R -10-09-23-10D1
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROUND
ROCK, TEXAS, ("CITY") APPROVING A CHANGE IN THE TARIFFS
OF ATMOS ENERGY CORPORATION, MID-TEX DIVISION
("ATMOS"), AS A RESULT OF A SETTLEMENT BETWEEN ATMOS
AND THE ATMOS TEXAS MUNICIPALITIES ("ATM"); FINDING THE
RATES SET BY THE ATTACHED TARIFFS TO BE JUST AND
REASONABLE; FINDING THAT THE ADDITIONAL COST FOR
REPLACING STEEL SERVICE LINES IS APPROPRIATE AND IS
APPROVED SUBJECT TO A PRUDENCE REVIEW: FINDING THAT
THE CONTINUATION OF THE RATE REVIEW MECHANISM
("RRM"), AS AMENDED, FOR TWO YEARS IS REASONABLE;
REQUIRING DELIVERY OF THE RESOLUTION TO THE COMPANY
AND LEGAL COUNSEL; DETERMINING THAT THE MEETING AT
WHICH THIS RESOLUTION WAS APPROVED COMPLIED WITH THE
OPEN MEETINGS ACT; MAKING OTHER FINDINGS AND
PROVISIONS RELATED TO THE SUBJECT; AND DECLARING AN
EFFECTIVE DATE.
WHEREAS, the City is a regulatory authority under the Gas Utility Regulatory Act
("GURA") and under § 103.001 of GURA has exclusive original jurisdiction over Atmos Energy
Corporation — Mid -Tex Division ("Atmos") rates, operations, and services as a gas utility within
the municipality; and,
WHEREAS, the City has participated in prior cases regarding Atmos as part of a
coalition of cities known as the Atmos Texas Municipalities ("ATM"), and,
WHEREAS, on or about April 15, 2010 Atmos filed for an increase in rates, pursuant to
the Rate Review Mechanism ("RRM"), of approximately $70 million; and,
WHEREAS, almost one-half of the increase for RRM this year is the result of the rate of
return true -up component of RRM; and
WHEREAS, the rate of return true -up component of RRM has been controversial and
difficult to apply; and
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WHEREAS, over the past few years there have been explosions of Atmos' steel service
lines in the Mid -Tex Division which have caused serious property damage and loss of life; and
WHEREAS, the most at -risk steel service lines need to be replaced over the next two
years; and
WHEREAS, after months of negotiations and after months of reviewing Atmos' books
and records by ATM's experts , a settlement was agreed to by Counsel for ATM, acting on
behalf of ATM's Executive Committee, with Atmos, which provides for: (1) the replacement of
the most at -risk steel service lines, to be paid for with a small increase in the customer charge for
residential and commercial customers; (2) a reduction of 61% of Atmos' requested increase in
rates for 2010; (3) the continuation of RRM for two more years but without the rate of return
true -up and (4) the filing of a general rate case by Atmos on or before June 1, 2013; and
WHEREAS, the Executive Committee of ATM and its lawyers recommend that Council
approve the attached settlement as set forth in Attachment A along with the attached tariffs
which are set forth as Attachment B.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF ROUND ROCK, TEXAS THAT:
Section 1. That the findings set out in the preamble to this resolution are hereby in all
things approved and adopted.
Section 2. That the settlement agreement, Attachment A, on balance is in the public
interest and is approved.
Section 3. The rates contained in the attached tariffs, Attachment B, are just and
reasonable and are hereby approved subject to a prudence review of the steel pipe replacement
expenditures in the next general rate proceeding.
2
Section 4. That a copy of this Resolution shall be sent to Mr. David Park, Vice President
for Rates and Regulation, Mid -Tex Division, Atmos Energy Corporation, 5420 LBJ Freeway,
Suite 1800, Dallas, Texas 75204, and to Jim Boyle, Counsel for ATM, at Herrera & Boyle,
PLLC, 816 Congress Avenue, Suite 1250, Austin, TX 78701.
Section 6. That the meeting at which this resolution was approved was in all things
conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code,
Chapter 551.
Section 7. That this resolution shall become effective immediately from and after its
passage.
The City Council hereby finds and declares that written notice of the date, hour, place
and subject of the meeting at which this Resolution was adopted was posted and that such
meeting was open to the public as required by law at all times during which this Resolution and
the subject matter hereof were discussed, considered and formally acted upon, all as required by
the Open Meetings Act, Chapter 551, Texas Government Code, as amended.
RESOLVED this 23rd day of September, 2010.
ATTEST:
SARA L. WHITE, City Secretary
3
ALAN MCGRAW, Mayor
City of Round Rock, Texas
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SETTLEMENT AGREEMENT BETWEEN ATMOS ENERGY CORP., MID-TEX
DIVISION AND ATMOS TEXAS MUNICIPALITIES
WHEREAS, this settlement agreement is entered into by Atmos Energy Corp's Mid -
Tex Division and Atmos Texas Municipalities ("ATM") whose members include the Cities of
Austin, Balch Springs, Bandera, Bartlett, Belton, Blooming Grove, Bryan, Cameron, Cedar Park,
Clifton, Commerce, Copperas Cove, Corsicana, Denton, Electra, Fredericksburg, Gatesville,
Georgetown, Goldthwaite, Granbury, Greenville, Groesbeck, Hamilton, Heath, Henrietta,
Hickory Creek, Hico, Hillsboro, Hutto, Kerens, Lampasas, Leander, Lometa, Longview, Mart,
Mexia, Olney, Pflugerville, Point, Ranger, Rice, Riesel, Rockdale, Rockport, Rogers, Round
Rock, San Angelo, Sanger, Somerville, Star Harbor, Trinidad, Trophy Club, and Whitney; and
WHEREAS, on March 15, 2010, Atmos filed with the ATM Cities an application,
hereafter referred to as the 2010 RRM filing, to adjust rates pursuant to Rider RRM - Rate
Review Mechanism; and
WHEREAS, ATM has hired experts and lawyers to analyze the rates proposed by Atmos
Energy Corp.'s, Mid -Tex Division ("Atmos" or "Company") in its 2010 RRM filing; and
WHEREAS, the Settlement Agreement resolves all issues between Atmos and ATM
("the Signatories") regarding the 2010 RRM filing, which is currently pending before the ATM
Cities, in a manner that the Signatories believe is consistent with the public interest, and the
Signatories represent diverse interests; and
WHEREAS, the Signatories believe that the resolution of the issues raised in the 2010
RRM filing can best be accomplished by each ATM City approving this Settlement Agreement
and the rates, terms and conditions reflected in the tariffs attached to this Settlement Agreement
as Exhibit A;
NOW, THEREFORE, in consideration of the mutual agreements and covenants
established herein, the Signatories, through their undersigned representatives, agree to the
following Settlement Terms as a means of fully resolving all issues between the ATM Cities and
Atmos involving the 2010 RRM fling:
Settlement Terms
1. Upon the execution of this Settlement Agreement, Atmos and the counsel for the ATM
cities will recommend that an ordinance or resolution be adopted to approve this
Settlement Agreement and implement the rates, terms and conditions reflected in the
tariffs attached to this Settlement Agreement as Exhibit A. (Attachment A to the
Ordinance ratifying this Agreement). Said tariffs should allow Atmos an additional,
prospective $27 million in annual revenue by implementation of rates shown in the
proof of revenues attached as Exhibit B. (Attachment B to the Ordinance ratifying this
Agreement). The uniform implementation of gas rates, terms and conditions
established by this Settlement Agreement shall be effective for bills rendered on or
after October 1, 2010.
1
2. In an effort to streamline the regulatory review process, Atmos and ATM have agreed
to renew the Rate Review Mechanism ("Rider RRM") for a period commencing with
the Company's April 1, 2011 filing under this mechanism for the calendar year 2010,
effective August 15, 2011, and concluding upon the implementation of new, final rates
established pursuant to the general rate case that Atmos will file on or before June 1,
2013. Rider RRM provides for an annual rate adjustment to reflect changes in billing
determinants, operating and maintenance expense, depreciation expense, other taxes
expense, and revenues as well as changes in capital investment and associated changes
in gross revenue related taxes. The revised RRM tariff is included in Exhibit A.
3. Notwithstanding the RRM rate adjustments that will occur pursuant to paragraph 2 of
this Settlement Agreement, Atmos and ATM agree that on or before June 1, 2013,
Atmos shall file a general, system -wide rate case for the Mid -Tex Division. During
the pendency of the general rate case, Atmos and ATM agree that rate adjustments
associated with the RRM filing for calendar year 2011 shall be implemented on
August 15, 2012, and shall remain in effect until the earlier of either the issuance of a
final order by the Railroad Commission of Texas in the general rate case to be filed on
or before June 1, 2013, or the entry of an agreed upon order resolving all issues
involved in the general rate case. The adjustments made or requested in the 5th year
RRM shall not be considered precedent during the general rate case.
4. Atmos and ATM further agree that for the period commencing March 1, 2010 through
September 30, 2012, Atmos will expand its existing steel service line replacement
program to complete the replacement of 100,000 steel service lines within its Mid -Tex
Division during this period. Atmos and ATM agree that a risk-based approach should
be adopted to allow replacement of the highest priority steel service lines within this
time period. Atmos agrees to provide the ATM cities with quarterly reports providing
the number and location of the lines replaced during the quarter. Atmos agrees to
coordinate with ATM member cities to minimize disruption to cities' rights of way
without compromising the safety of residents of the cities.
5. Atmos and ATM agree that costs incurred to replace steel service lines prior to
October 1, 2010 shall be included in the RRM rate adjustment calculation for the 2010
calendar year, and shall not be subject to or included in the rate cap limitations set
forth in subsection IV (a) -(b) of the Rider RRM tariff.
6. Atmos and ATM agree that the projected incremental direct costs incurred to replace
steel service lines on or after October 1, 2010 shall be separately identified and shall
not be subject to or included in the rate cap limitations set forth in subsection IV (a) -
(b) of the Rider RRM tariff. Atmos and ATM further agree that such projected direct
incremental costs incurred to replace steel service lines after October 1, 2010, shall be
separately calculated and recovered as a discrete component of customer charges in the
Company's annual RRM filings as set forth below:
a. Atmos and ATM agree that Atmos shall be entitled to separately adjust rates for
the Rate Effective Period as defined in the Rider RRM tariff to allow recovery of
the projected annual revenue requirement associated with direct incremental costs
to be incurred in connection with a steel service line replacement program, that
are not otherwise included within the RRM cost of service, including a return on
equity of 9.0% within the overall weighted cost of capital applied to net
2
investment (net plant additions, less accumulated depreciation and accumulated
deferred income taxes), depreciation expense and applicable taxes;
b. Atmos and ATM further agree that the capital structure used to calculate the steel
service line replacement rate adjustment will be the actual Evaluation Period (as
defined in the Rider RRM tariff) ratio of long-term debt and equity, with an
equity percentage not to exceed 50%;
c. Rate recovery associated with a steel service line replacement program shall occur
through an adjustment to the Residential and Commercial customer charges.
Current year recovery factors as of October 1, 2010 shall be $0.15 for residential
customers and $0.41 for commercial customers. The rates will be adjusted
annually, however, Atmos and ATM agree that in no case will the per customer
monthly cost recovery factors attributable to a steel service line replacement
program exceed $0.44 for residential customers or $1.22 for commercial
customers, either prior to or during the pendency of the general rate case Atmos
will file on or before June 1, 2013.
d. Atmos and ATM further agree that any per customer amount attributable to cost
recovery for a steel service line replacement program shall be subject to review by
the regulatory authority in a subsequent Evaluation Period as defined in the Rider
RRM tariff and all incremental costs associated with a steel service line
replacement program shall be subject to a prudence/reasonableness review in the
general rate case to be filed by Atmos on or before June 1, 2013.
7. With respect to the Company's annual RRM filings, Atmos agrees to pay all
reasonable and necessary expenses of each entity having original jurisdiction that are
incurred to review the Company's annual RRM filings. Atmos further agrees that in
calculating the proposed rate for any Rate Effective Period, the Company shall not
include: (1) any external legal, expert, or consultant costs to prepare and/or provide
supportive information related to its filing; or (2) reimbursements to original
jurisdiction entities.
8. Notwithstanding paragraph 7 of this Settlement Agreement, Atmos and ATM agree
that in the event of an appeal of an original jurisdiction entity's decision regarding a
proposed RRM adjustment, recovery of rate case expenses shall be determined
according to Chapters 103 and 104, TEx. UTIL. CODE ANN. Further, in the event of
such appeal(s), Atmos shall recover any reimbursement made to the original
jurisdiction entity through a surcharge to all customer rates that are subject to the
Commission's jurisdiction in that proceeding or proceedings that might be joined
therewith, regardless of whether such reimbursements are made during the initial
review period or appeal period.
9. The ATM Cities agree that they will not challenge the legal basis of the rates, terms,
and conditions reflected in Exhibit A, or any annual RRM adjustment that is
implemented pursuant to Rider RRM.
10. Atmos and the ATM Cities further agree that the express terms of the Rider RRM are
supplemental to the filing, notice, regulatory review, or appellate procedural process of
the ratemaking provisions of Chapter 104 of the Texas Utilities Code. If the statute
3
requires a mandatory action on behalf of the municipal regulatory authority or Atmos,
the parties will follow the provisions of such statute. If the statute allows discretion on
behalf of the municipal regulatory authority, the ATM Cities agree that they shall
exercise such discretion in such a way as to implement the provisions of the RRM
tariff. If Atmos appeals an action or inaction of an ATM City regarding an RRM
filing to the Railroad Commission, the ATM Cities agree that they will not oppose the
implementation of interim rates or advocate the imposition of a bond by Atmos
consistent with the RRM tariff. Atmos agrees that it will make no filings on behalf of
its Mid -Tex division under the provisions of TEX. UTIL. CODE ANN. § 104.301 while
the Rider RRM is in place. In the event that a regulatory authority fails to act or enters
an adverse decision regarding the proposed annual RRM adjustment, the Railroad
Commission of Texas shall, pursuant to the provisions of the Texas Utilities Code,
have exclusive appellate jurisdiction to review the action or inaction of the regulatory
authority exercising exclusive original jurisdiction over the RRM request. In addition,
the Signatories agree that this Settlement Agreement shall not be construed as a waiver
of the ATM Cities' right to initiate a show cause proceeding or the Company's right to
file a Statement of Intent under the provisions of the Texas Utilities Code.
11. Atmos and ATM further agree that the ordinance or resolution adopting this
Settlement Agreement shall include a provision authorizing Atmos to establish
regulatory asset account(s) for costs related to working gas in storage. Atmos and
ATM further agree that the language authorizing these regulatory asset account(s)
shall be the same as that set forth in the 4th Ordering Paragraph (Page 10 of 11) of the
Final Order Nunc Pro Tune issued by Railroad Commission of Texas in GUD No.
9869 on February 23, 2010. This language states as follows:
IT IS FURTHER ORDERED that Atmos shall be allowed to establish a
regulatory asset for the ad valorem taxes related to working gas in storage.
In addition, Atmos shall be allowed to establish a regulatory asset for (1)
the costs associated with Accumulated Deferred Income Tax for UNICAP
Section 263A, (2) the WACOG to FIFO change, and (3) an amount equal
to the rate of return approved in this RRM Proceeding for the
Accumulated Deferred Income Tax items related to working gas in
storage. Atmos shall record these amounts in Other Regulatory Assets
(Account 182.3). These deferred items shall be considered, along with the
investment in working gas, for consideration and possible inclusion in
rates for Atmos Pipeline -Texas in that entity's next filed rate case. If the
Commission determines that such deferred items are not properly included
in the rates of Atmos Pipeline — Texas, the items shall be further deferred
until the next Atmos Mid -Tex rate case filed after the final decision in the
Atmos Pipeline -Texas rate case for inclusion with the working gas
investment in the Atmos Mid -Tex rates.
12. Atmos and ATM agree that each ATM city should approve this Settlement Agreement
and adopt an ordinance or resolution to implement for the ATM Cities the rates, terms,
and conditions reflected in the tariffs attached to this Settlement Agreement as Exhibit
A, as well as the regulatory asset authorization language discussed in paragraph 12 of
this Settlement Agreement.
4
13. The Signatories agree that the terms of the Settlement Agreement are interdependent
and indivisible, and that if any ATM city enters an order that is inconsistent with this
Settlement Agreement, then any Signatory may withdraw without being deemed to
have waived any procedural right or to have taken any substantive position on any fact
or issue by virtue of that Signatory's entry into the Settlement Agreement or its
subsequent withdrawal. If any ATM city rejects this Settlement Agreement, then this
Settlement Agreement shall be void ab initio and counsel for the ATM Cities shall
thereafter only take such actions as are in accordance with the Texas Disciplinary
Rules of Professional Conduct.
14. The Signatories agree that all negotiations, discussions and conferences related to the
Settlement Agreement are privileged, inadmissible, and not relevant to prove any
issues associated with Atmos' 2010 RRM filing.
15. The Signatories agree that neither this Settlement Agreement nor any oral or written
statements made during the course of settlement negotiations may be used for any
purpose other than as necessary to support the entry by the ATM Cities of an
ordinance or resolution implementing this Settlement Agreement.
16. The Signatories agree that this Settlement Agreement is binding on each Signatory
only for the purpose of settling the issues set forth herein and for no other purposes,
and, except to the extent the Settlement Agreement governs a Signatory's rights and
obligations for future periods, this Settlement Agreement shall not be binding or
precedential upon a Signatory outside this proceeding.
17. The Signatories agree that this Settlement Agreement may be executed in multiple
counterparts and may be filed with facsimile signatures.
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Agreed to this1' day of August 2010.
ATTORNEY FOR ATMOS TEXAS MUNICIPALITIES, WHOSE
MEMBERS INCLUDE THE CITIES OF AUSTIN, BALCH
SPRINGS, BANDERA, BARTLETT, BELTON, BLOOMING
GROVE, BRYAN, CAMERON, CEDAR PARK, CLIFTON,
COMMERCE, COPPERAS COVE, CORSICANA, DENTON,
ELECTRA, FREDERICKSBURG, GATESVILLE, GEORGETOWN,
GOLDTHWAITE, GRANBURY, GREENVILLE, GROESBECK,
HAMILTON, HEATH, HENRIETTA, HICKORY CREEK, HICO,
HILLSBORO, HUTTO, KERENS, LAMPASAS, LEANDER,
LOMETA, LONGVIEW, MART, MEXIA, OLNEY,
PFLUGERVILLE, POINT, RANGER, RICE, RIESEL, ROCKDALE,
ROCKPORT, ROGERS, ROUND ROCK, SAN ANGELO, SANGER,
SOMERVILLE, STAR HARBOR, TRINIDAD, TROPHY CLUB,
AND WHITNEY
* Subject to approval by ATM City Councils
Agreed to this a 1 day of August, 2010.
ATMOS ENERGY CORP., MID-TEX DIVISION
4By: /I...
Jo A. Paris
President, Mid -Tex Division
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ATMOS ENERGY CORPORATION
MID-TEX DIVISION
RATE SCHEDULE:
R — RESIDENTIAL SALES
APPLICABLE TO:
All Cities except the City of Dallas and all unincorporated areas
EFFECTIVE DATE:
Bills Rendered on or after 10/01/2010
Application
Applicable to Residential Customers for all natural gas provided at one Point of Delivery and measured
through one meter.
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 calculated by adding the following Customer and Mcf charges to the
amounts due under the riders listed below:
Charge
Amdurwt
Customer Charge per Bill
$ 7.15 per month
Commodity Charge — All Mcf
$2.5246 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: Plus or Minus an amount for rates as calculated in accordance with
Rider RRM.
Franchise Fee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider
FF. Rider FF is only applicable to customers inside the corporate limits of any incorporated
municipality.
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.
ATMOS ENERGY CORPORATION
MID-TEX DIVISION
RATE SCHEDULE:
C — COMMERCIAL SALES
APPLICABLE TO:
All Cities except the City of Dallas and all unincorporated areas
EFFECTIVE DATE:
Bills Rendered on or after 10/01/2010
Application
Applicable to Commercial Customers for all natural gas provided at one Point of Delivery and measured
through one meter and to Industrial Customers with an average annual usage of less than 3,000 Mcf.
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 calculated by adding the following Customer and Mcf charges to the
amounts due under the riders listed below:
Cha rge
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Customer Charge per Bill
$ 13.91 per month
Commodity Charge - All Mcf
$ 1.0796 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: Plus or Minus an amount for rates as calculated in accordance with
Rider RRM.
Franchise Fee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider
FF. Rider FF is only applicable to customers inside the corporate limits of any incorporated
municipality.
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.
ATMOS ENERGY CORPORATION
MID-TEX DIVISION
RATE SCHEDULE:
I — INDUSTRIAL SALES
APPLICABLE TO:
AH Cities except the City of Dallas and all unincorporated areas
EFFECTIVE DATE:
Bills Rendered on or after 10/01/2010
Application
Applicable to Industrial Customers with a maximum daily usage (MDU) of Tess than 3,500 MMBtu per day
for all natural gas provided at one Point of Delivery and measured through one meter. Service for
Industrial Customers with an MDU equal to or greater than 3,500 MMBtu per day will 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, additional
charges and special contract arrangements between Company and Customer may be required prior to
service being furnished.
Monthly Rate
Customer's monthly bili will be calculated by adding the following Customer and MMBtu charges to the
amounts due under the riders listed below:
Customer Charge per Meter
$ 450.00 per month
First 0 MMBtu to 1,500 MMBtu
$ 0.2750 per MMBtu
Next 3,500 MMBtu
$ 0.2015 per MMBtu
All MMBtu over 5,000 MMBtu
$ 0.0433 per MMBtu
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: Plus or Minus an amount for rates as calculated in accordance with
Rider RRM.
Franchise Fee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider
FF. Rider FF is only applicable to customers inside the corporate limits of any incorporated
municipality.
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).
Curtailment Overpull 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 curtailment or interruption, pay
Company 200% of the midpoint price for the Katy point listed in Plaits Gas Daily published for the
applicable Gas Day in the table entitled "Daily Price Survey."
ATMOS ENERGY CORPORATION
MID-TEX DIVISION
RATE SCHEDULE:
I — INDUSTRIAL SALES
APPLICABLE TO:
All Cities except the City of Dallas and all unincorporated areas
EFFECTIVE DATE:
Bilis Rendered on or after 10!01/2010
Replacement Index
in the event the "midpoint" or "common" price for the Katy point listed in Platts Gas Daily in the table
entitled "Daily Price Survey" is no longer published, 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 applicable index.
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.
Special Conditions
In order to receive service under Rate I, Customer must have the type of meter required by Company.
Customer must pay Company all costs associated with the acquisition and installation of the meter.
ATMOS ENERGY CORPORATION
MID-TEX DIVISION
RATE SCHEDULE:
T — TRANSPORTATION
APPLICABLE TO:
All Cities except the City of Dallas and all unincorporated areas
EFFECTIVE DATE:
Bilis Rendered on or after 10/01/2010
Application
Applicable, in the event that Company has entered into a Transportation Agreement, to a customer
directly connected to the Atmos Energy Corp., Mid -Tex Division Distribution System (Customer) for the
transportation of all natural 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 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 bill will be calculated by adding the following Customer and MMBtu charges to the amounts
and quantities due under the riders listed below:
Customer Charge per Meter
$ 450.00 per month
First 0 MMBtu to 1,500 MMBtu
$ 0.2750 per MMBtu
Next 3,500 MMBtu
$ 0.2015 per MMBtu
All MMBtu over 5,000 MMBtu
$ 0.0433 per MMBtu
Upstream Transportation Cost Recovery: Plus an amount for upstream transportation costs in
accordance with Part (b) of Rider GCR.
Rate Review Mechanism: Plus or Minus an amount for rates as calculated in accordance with
Rider RRM.
Retention Adjustment Plus a quantity of gas as calculated in accordance with Rider RA.
Franchise Fee Adjustment Plus an amount for franchise fees calculated in accordance with Rider
FF. Rider FF is only applicable to customers inside the corporate limits of any incorporated
municipality.
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 of such fees.
ATMOS ENERGY CORPORATION
MID-TEX DIVISION
RATE SCHEDULE:
T — TRANSPORTATION
APPLICABLE TO:
All Cities except the City of Dallas and all unincorporated areas
EFFECTIVE DATE:
Bills Rendered on or after 10101/2010
Monthly Imbalance 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 "midpoint" 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 the applicable Transportation Agreement, at the end of each month that exceeds
10% of Customer's receipt quantities for the month.
Curtailment Overpull 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 curtailment or interruption, pay
Company 200% of the midpoint price for the Katy point listed 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 Platts Gas Daily in the table
entitled "Daily Price Survey" is no longer published, 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 applicable index.
Agreement
A transportation agreement is 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 T, customer must have the type of meter required by Company.
Customer must pay Company all costs associated with the acquisition and installation of the meter.
ATMOS ENERGY CORPORATION
MID-TEX DIVISION
RIDER:
WNA - WEATHER NORMALIZATION ADJUSTMENT
APPLICABLE TO:
All Cities except the City of Dallas and all unincorporated areas
EFFECTIVE DATE:
Bilis Rendered on or after 10/01/2010
Provisions for Adjustment
The base rate per Mcf (1,000,000 Btu) for gas service set forth in any Rate Schedules utilized by the
cities of the 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 April. The
five regional weather stations are Abilene, Austin, Dallas, Waco, and Wichita Falls.
Computation of Weather Normalization Adjustment
The Weather Normalization Adjustment Factor shall be computed to the nearest one-hundredth cent
per Mcf by the following formula:
WNAFi
Ri
(HSFi
x (NDD-ADD) )
(BLi
+ (HSFi x ADD) )
Where
i = any particular Rate Schedule or billing classification within any such
particular Rate Schedule that contains more than one billing classification
WNAFi = Weather Normalization Adjustment Factor for the ith rate schedule or
classification expressed in cents per Mcf
Ri = base rate of temperature sensitive sales for the ith schedule or
classification approved by the entity exercising original jurisdiction.
heat sensitive factor for the ith schedule or classification calculated as the
slope of the linear regression of average sales per bill (Mcf) and actual
heating degree days by month for the test year by schedule or classification
and weather station as part of the RRM filing.
HSFi =
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.
Bli - base Toad sales for the ith schedule or classification calculated as the y -
intercept of the linear regression of average sales per bill (Mcf) 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 ith rate schedule is computed as:
WNAi = WNAF; x q;i
ATMOS ENERGY CORPORATION
MID-TEX DIVISION
RIDER:
WNA - WEATHER NORMALIZATION ADJUSTMENT
APPLICABLE TO:
All Cities except the City of Dallas and all unincorporated areas
EFFECTIVE DATE:
Bilis Rendered on or after 10/0112010
1.17
Where q;jj is the relevant sales quantity for the jth customer in ith rate schedule.
Filings with Entities Exercising Original 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 Adjustment, (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
bills, with customer information deleted, for each rate schedule or classification to which the WNA was
applied in the preceding 12 month period. 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 annual RRM filing.
If the RRM is discontinued, as provided in the Rider RRM tariff, the information required herein to be
filed with the entities exercising original jurisdiction shall be filed on March 1 of each year.
Weather Station
Base Use/Heat Use Factors
Residential
Base use Heat use
Mcf Mcf/HDC
Commercial
Base use Heat use
Abilene
1.06
.0131
9.03
.0588
Austin
1.17
.0138
19.39
.0674
Dallas
1.49
.0191
20.37
.0872
Waco
1.13
.0137
11.81
.0610
Wichita
Falls
1.19
.0136
11.21
.0549
Sample WNAF1 Calculation:
.3352 per Mcf = 2.5246 x
Where
(.0131
x (30-17) )
(1.06
i = Residential Single Block Rate Schedule
Ri - 2.25246 per MCF
HSFi = .0131 (Residential - Abilene Area)
+ (.0131 x 17) )
NDD = 30 HDD (Simple ten-year average of Actual HDD for Abilene Area - 9/15106
-10/14/06)
ADD = 17 HDD (Actual HDD for Abilene Area - 9/15/06 -10/14/06)
Bli = 1.06 Mcf (Residential - Abilene Area)
ATMOS ENERGY CORPORATION
MID-TEX DIVISION
RIDER:
RRM — RATE REVIEW MECHANISM
APPLICABLE TO:
All Cities except the City of Dallas and all unincorporated areas
EFFECTIVE DATE:
Bills Rendered on or after 10/01/2010
1. Purpose:
This mechanism is designed to provide annual earnings transparency. All rate calculations under this
tariff shall be made on a system wide basis. If, through the implementation of the provisions of this
mechanism, it is determined that rates should be decreased or increased, then rates will be adjusted
accordingly in the manner set forth herein. The rate adjustments implemented under this mechanism will
reflect annual changes in the Company's cost of service and rate base. This Rider RRM will be effective
for the period commencing with the Company's RRM filing on April 1, 2011, and concluding with the
implementation of new, final rates established pursuant to the general rate case that Atmos will file on or
before June 1, 2013.
II. Definitions
a) The Annual Evaluation Date shall be the date the Company will make its annual filing under this
mechanism. The Annual Evaluation Date shall be no later than April 1, of each year. This filing shall be
effective in electronic form where practicable.
b) Audited Financial Data shall mean the Company's books and records related to the Company's Mid -
Tex operating area and shared services operations. Audited Financial Data shall not require the
schedules and information provided under this tariff to undergo a separate financial audit by an outside
auditing firm similar to the Company's annual financial audit.
c) The Evaluation Period is defined as the twelve month period ending December 31, of each calendar
year.
d) The Rate Effective Period is defined as the later of the twelve month period for which rates
determined under this mechanism will be in effect or subsequent rates are implemented.
e) Per Connection Basis is defined as the existing average number of Mid -Tex active meters to
customers during the Evaluation Period.
f) Final Order is defined as the most recent order establishing the Company's latest effective rates for
the area in which the mechanism is implemented, and shall include municipal rate ordinances and
resolutions.
III. Rate Review Mechanism
The Company shall file with each regulatory authority having original jurisdiction over the Company's
rates the schedules specified below for the Evaluation Period, with the filing to be made by the Annual
Evaluation Date following the end of the Evaluation Period. The schedules, which will be based upon the
Company's Audited Financial Data, as adjusted, and provided in the same format as Atmos' RRM filing
with municipalities on March 15, 2010, will exclude a true -up computation, but will include the following:
a) Evaluation Period ending balances for actual gross plant in service, accumulated depreciation,
accumulated deferred income taxes, inventory, working capital, and other rate base components
will be used for the calculation of rates for the Rate Effective Period. The ratemaking treatments,
principles, findings and adjustments included in the Final Order will apply. Regulatory
adjustments due to prior regulatory rate base adjustment disallowances will be maintained. Cash
working capital will be calculated using the lead/lag days approved in the Final Order.
Accumulated deferred income taxes (ADIT) will be calculated using the methodology used in the
Final Order. The RRM Schedules & Information section of this tariff identifies those ADIT
components to be included in the calculation of rate base for both the Evaluation Period and Rate
Effective Period calculations.
ATMOS ENERGY CORPORATION
MID-TEX DIVISION
RIDER:
RRM — RATE REVIEW MECHANISM
APPLICABLE TO:
All Cities except the City of Dallas and all unincorporated areas
EFFECTIVE DATE:
Bills Rendered on or after 10/0112010
b) Depreciation rates booked in the period will be those approved in the Final Order, or the rate
most recently approved. AD calculation methodologies will be those approved in the Final Order
except where noted or included in this tariff, or in the most recent order addressing the
methodology. In addition, the Company shall exclude from operating and maintenance expense
the discretionary costs to be disallowed from Rider RRM filings listed in the RRM Schedules and
Information section of this tariff.
c) Return on Equity (ROE) shall be maintained at 9.7%.
d) Cost. of debt will reflect actual cost for the Evaluation Period. Evaluation Period ending balances
for cost of debt and capital structure will be used for the calculation of rates for the Rate Effective
Period. Capital structure will be the actual Evaluation Period ratio of Tong -term debt and equity,
with percentage equity not to exceed 50%, based on the calculation methodology outcomes used
above.
e) All applicable accounting adjustments along with all supporting work papers. Such adjustments
may include:
1) Pro -forma adjustments to update and annualize costs and revenue billing determinants
for the Rate Effective Period.
2) Pro -forma or other adjustments required to properly account for atypical, unusual, or
nonrecurring events recorded during the Evaluation Period.
f) Shared Services allocation factors shall be recalculated each year based on the latest component
factors used during the Evaluation Period, but the methodology used will be that approved in the
Final Order.
g)
Any changes to corporate structure or allocation of common costs will include narrative
explanations with the filing.
IV. Calculation of Rate Adjustment
a) The Company shall provide additional schedules indicating the following revenue
deficiency/sufficiency calculations using the methodology accepted in the Final Order with the
exception of any allowance for a true -up component in the April 1, 2011 or the April 1, 2012 RRM
filings. Evaluation Period ending balances will be used for the calculation of rates for the Rate
Effective Period. These schedules shall identify the rate adjustments necessary for the setting of
prospective rates for the Rate Effective Period. The result shall be reflected in the proposed new
rates to be established for the Rate Effective Period. In calculating the required rate adjustments,
such adjustments will be made pro -ratably to the customer charge and usage charge based upon
actual revenue generated, as adjusted under the Company's approved Weather Normalization
Adjustment (WNA) Rider. Provided, however, that neither the Residential nor the Commercial
customer charges may increase more than 20% per year.
b) The Company may also adjust rates for the Rate Effective Period to include recovery of any
known and measurable changes to operating and maintenance costs including, but not limited to,
payroll and compensation expense, benefit expense, pension expense, insurance costs,
materials and supplies, bad debt costs, medical expense, transportation and building and lease
costs for the Rate Effective Period. Provided, however, that adjustments may only be made for
costs that are reasonable and necessary. Additionally, utility plant and rate base for the Rate
ATMOS ENERGY CORPORATION
MID-TEX DIVISION
RIDER:
RRM — RATE REVIEW MECHANISM
APPLICABLE TO:
All Cities except the City of Dallas and all unincorporated areas
EFFECTIVE DATE:
Bilis Rendered on or after 10/0112010
Effective Period will be established by using the Evaluation Period ending balances, including
associated changes in depreciation and amortization expense and taxes. In calculating the
Company's known and measurable changes for prospective RRM adjustment purposes, the
following limitations will apply, on a Per Connection Basis.
1. Operating and Maintenance expenses per connection for the Rate Effective Period
cannot increase more than 5% per year without specific identification and justification.
Any proposed adjustment above 5% per year, is subject to the provisions of the
Evaluation Procedures of this tariff. Such procedures provide that the regulatory
authority will review the proposed adjustment and that the Company and regulatory
authority will work collaboratively to seek agreement on the proposed adjustments to the
Company's schedules and proposed rates. Justification for such expenditures over the
cap shall include an event or combination of events beyond the control of the Company.
The beginning adjusted Operation and Maintenance expense per connection for the 2007
RRM Evaluation Period will be limited to not exceed $151 million divided by the
connections for the period. The increase in adjusted Operation and Maintenance
expenses per connection for the 2008 Rate Effective Period and the subsequent Rate
Effective periods cannot exceed 5% per year, without specific identification and
justification
2. Net plant investment per connection for the Rate Effective Period cannot increase more
than 5% per year without specific identification and justification. Any proposed
adjustment above 5% per year, is subject to the provisions of the Evaluation Procedures
of this tariff. Such procedures provide that the regulatory authority will review the
proposed adjustment and that the Company and regulatory authority will work
collaboratively to seek agreement on the proposed adjustments to the Company's
schedules and proposed rates. However, in performing a cap test to verify compliance,
the Company shall exclude any changes in net plant investment associated with federal,
state, or local mandates related to safety, compliance, or road moves, including steel
service line replacement program costs incurred prior to October 1, 2010. The initial
2008 rate will be set using net plant limited to not exceed [$1,243,607,206 divided by
average active meters for the 12 months ended June 30 2007] times 1.025 times the
average active meters for calendar year 2007. Subsequent filing calculations of net plant
investment will be made using the same method used in the Company's September 20,
2007 Statement of Intent except that Evaluation Period ending balances will be used for
net plant in the calculation of rates for the Rate Effective Period.
The rate increase limitations set forth in this tariff shall not preclude the Company from
recovering any excluded net plant costs during a subsequent Evaluation Period in which
the 5% limitation for net plant investment is not reached or in a subsequent Statement of
Intent case. To the extent that the Company seeks to recover any excluded net plant
costs during a subsequent Evaluation Period in which the 5% limitation for net plant
investment is not reached or in a subsequent Statement of Intent case, the Company
shall identify these costs as a specific line item in the schedule accompanying the RRM
rate adjustment filing.
The regulatory authority may disallow any net plant investment that is not shown to be
prudently incurred. Approval by the regulatory authority of net plant investment pursuant
to the provisions of this tariff shall constitute a finding that such net plant investment was
prudently incurred. Such finding of prudence shall not be subject to further review in a
subsequent Evaluation Period or Statement of Intent filing.
ATMOS ENERGY CORPORATION
MID-TEX DIVISION
RIDER:
RRM — RATE REVIEW MECHANISM
APPLICABLE TO:
All Cities except the City of Dallas and all unincorporated areas
EFFECTIVE DATE:
Bills Rendered on or after 10101/2010
c) Notwithstanding the limitations in subparts IV (a) through (b) of this tariff, the Company shall be
entitled to separately adjust rates for the Rate Effective Period to include recovery for direct
incremental costs associated with a steel service line replacement program incurred on and after
October 1, 2010, a return on equity of 9.0% for such incremental costs as capitalized,
depreciation, and applicable taxes. Capital structure will be the actual Evaluation Period ratio of
long-term debt and equity, with percentage equity not to exceed 50%, based on the calculation
methodology outcomes used above. Rate recovery associated with a steel service line
replacement program shall be recovered through the Residential and Commercial customer
charges and shall not be subject to or included in the rate increase limitations set forth in IV (a)
through (b) of this tariff. Current year recovery factors are presumed to be $0.15 for residential
customers and $0.41 for commercial customers. The rates will be adjusted annually, however, in
no case will the per customer monthly cost recovery factors attributable to a steel service line
replacement program exceed $0.44 for residential customers or $1.22 for commercial customers,
prior to or during the pendency of the Company's next Statement of Intent case. Moreover, the
per customer amount attributable to cost recovery for a steel service line replacement program
shall be subject to review by the regulatory authority in a subsequent Evaluation Period and all
costs associated with a steel service line replacement program will be subject to a
prudence/reasonableness review in the Company's next Statement of Intent rate case.
d) The Company shall provide a schedule demonstrating the "proof of revenues" relied upon to
calculate the proposed rate for the Rate Effective Period. The proposed rates shall conform as
closely as is practicable to the revenue allocation principles approved in the Final Order.
V. Attestation
A sworn statement shall be filed by the Company's Chief Officer in Charge of Mid -Tex Operations
affirming that the filed schedules are in compliance with the provisions of this mechanism and are true
and correct to the best of his/her knowledge, information and belief. No testimony shall be filed, but a
brief narrative explanation shall be provided of any changes to corporate structure or allocation of
common costs.
VI. Evaluation Procedures
The regulatory authority having original jurisdiction over the Company's rates shall have no less than
ninety (90) days to review the Company's filed schedules and work papers. The Company will be
prepared to provide all supplemental information as may be requested to ensure adequate review by the
relevant regulatory authority. The Company shall not unilaterally impose any limits upon the provision of
supplemental information and such information shall be provided within ten (10) working days of the
original request. The regulatory authority may propose any adjustments it determines to be required to
bring the schedules into compliance with the above provisions.
During and following the ninety (90) day review period and a thirty (30) day response period, the
Company and the regulatory authority will work collaboratively and seek agreement on, the proposed
adjustments to the Company's schedule and proposed rates. If agreement has been reached by the
Company and the regulatory authority, the regulatory authority shall authorize an increase or decrease to
the Company's rates so as to achieve the revenue levels indicated for the Rate Effective Period. If, at the
end of the thirty (30) day response period, the Company and the regulatory authority have not reached
agreement on the proposed adjustments, the Company shall have the right to appeal the regulatory
authority's action or inaction to the Railroad Commission of Texas. Upon the filing of any appeal, the
Company shall have the right to implement the proposed RRM rate adjustment, including the adjustment
attributable to steel service line replacement program costs, subject to refund.
ATMOS ENERGY CORPORATION
MID-TEX DIVISION
RIDER:
RRM — RATE REVIEW MECHANISM
APPLICABLE TO:
All Cities except the City of Dallas and all unincorporated areas
EFFECTIVE DATE:
Bills Rendered on or after 10/01/2010
Rates established pursuant to the Rate Review Mechanism, if approved as provided herein, shall be
effective on August 15 of each year,
VH. Reconsideration and Appeal
Orders issued pursuant to this mechanism are ratemaking orders and shall be subject to appeal under
Sections 102.001(b) and 103.021, et seq., of the Texas Utilities Code (Vernon 2007).
VIII. Notice
Notice of the annual Rate Review Mechanism filing shall be provided pursuant to Section 104.103, TEX.
UTIL. CODE ANN. no later than forty-five (45) days after the Company makes its annual filing pursuant to
this tariff. The notice to customers shall include the following information:
a) a description of the proposed revision of rates and schedules;
b) the effect the proposed revision of rates is expected to have on the rates applicable to each
customer class and on an average bill for each affected customer;
c) the service area or areas in which the proposed rate adjustment would apply;
d) the date the proposed rate adjustment was filed with the regulatory authority; and
e) the Company's address, telephone number and website where information concerning the
proposed rate adjustment may be obtained.
IX. RRM Schedules and Information
a. Accumulated Deferred Income Tax ("ADIT') Items To Be Recognized in Rate Base
The following list identifies those ADIT components to be included in the calculation of rate base
for both the Evaluation Period and Rate Effective Period calculations:
Mid -Tex:
Gas Plant in Service
Insurance Accruals
Benefit Accruals
Deferred Expense Projects
Allowance for Doubtful Accounts
Customer Advances
UNICAP Section 263A Costs (which shall be removed from Atmos Mid -Tex when these
costs are transferred to Atmos Pipeline Texas)
Regulatory Asset - Mid Tex
Regulatory Liability - Mid -Tex
Other Plant
SSU - Customer Support:
Gas Plant in Service
ATMOS ENERGY CORPORATION
MID-TEX DIVISION
RIDER:
RRM — RATE REVIEW MECHANISM
APPLICABLE TO:
All Cities except the City of Dallas and all unincorporated areas
EFFECTIVE DATE:
Bills Rendered on or after 10/01/2010
SSU - General Office:
Gas Plant in Service
Insurance Accruals
Benefits Accruals
Deferred Expense Projects
Prepaid Expenses
Regulatory Liability - Atmos 109
FAS 115 Adjustment
Treasury Lock Adjustment
Revenue Agent Report Carryforward Adjustments 1990-1985
Tax Net Operating Loss Credit Carryforwards
State Bonus Depreciation
R & D Credit Valuation Allowance
Other Plant
b. Discretionary Costs to Be Disallowed from Rider RRM filings
The following types of employee reimbursed expenses and directly incurred costs are to be
removed from all expense and rate base amounts included within Rider RRM filings for the
Evaluation Period and for the Rate Effective Period:
Amounts incurred for travel, meals or entertainment of employee spouses.
Amounts for air travel that exceed published commercial coach air fares.
Amounts incurred for hotel rooms exceeding $250 per night inclusive of taxes and fees
assessed on such rooms.
Amounts for alcoholic beverages.
Amounts paid for admission to entertainment, sports, art or cultural events, and all event
sponsorship costs.
Amounts for social club dues or fees.
IX
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ATMOS ENERGY CORP., MID-TEX DIVISION
AVERAGE BILL COMPARISON- OCTOBER 1, 2010
TEST YEAR ENDING DECEMBER 31, 2009
Line OCTOBER 1, 2010
1 Rate R (5D 4.6 Mkt CURRENT PROPOSED CHANGE
2 Customer charge $ 7,00
3 Consumption charge 4.5 MCF X 52.2707 = 10.31
4 Rider GCR Part A 4.5 MCF X $4.6303 = 21.03
5 Rider GCR Part B 4.5 MCF X 50.6611 = 3.00
6
7 Subtotal 5 41.34
8 Rider FF & Rider TAX $41.34 X 0.07477 = 3.09
9 Total 544.43
10
11 Customer charge 57.15
12 Consumption charge 4,5 MCF X 52.5246 = 11A6
13 Rider GCR Part A 4.5 MCF X $4,6303 = 21.03
14 Rider GCR Part B 4.5 MCF X 50.6611 = 3.00
15
16 Subtotal $42.64
17 Revenue -related Tax Reimbursement 542.64 X 0.07477 = 3.19
18 Total 545.83 51,40
19 W 3.15%
20
21 Rate C 49 342 MGT CURRENT PROPOSED CHANGE
22 Customer charge 513.50
23 Consumption charge 34.2 MCF X 50.9877 = 33.82
24 Rider GCR Part A 34.2 MCF X 54.6303 = 158.57
25 Rider GCR Part 8 34.2 MCF X 50.5542 = 16,98
26
27
28 Subtotal 5224.87
29 Revenue -related Tax Reimbursement $224.87 X 007477 = 16.81
30 Total $241.69
31
32 Customer charge
513.91
33 Consumption charge 34.2 MCF X 51.0796 = 3697
34 RiderGCRPartA 34.2 MCF X 54.6303 = 158.57
35 Rider GCR Part 8 342 MCF X $0.5542 = 18.98
36
37 Subtotal 522843
38 Revenue -related Tax Reimbursement 5228.43 X 0.07477 = 17.08
39 Total 5245.51 53.82
40
1,58%
41 Rotel ai 3467 MMBTU CURRENT PROPOSED CHANGE
42 Customer charge 5425.00
43 Consumption charge 1,500 MMBTU X 50.2583 = 387.45
44 Consumption charge 1.957 MMBTU X 50.1884 = 368.69
45 Consumption charge 0 MMBTU X$0.0404 = 0.00
46 Rider GCR Part A 3.457 MMBTU X 54.6303 = 16,006.67
47 Rider GCR Part 0 3,457 MMBTU X 50.3062 = 1058.42
48
49 Subtotal 518,246.23
50 Revenue -related Tax Reimbursement 518,246,23 X 0.07477 = 1,364.20
51 Total 519,610.43
52
53 Customer charge 5450.00
54 Consumption charge 1,500 MMBTU X 50,2750 = 412.51
55 Consumption charge 1,957 MMBTU X 50.2015 = 394.31
56 Consumption charge 0 MMBTU X 50.0433 = 0.00
57 Rider OCR Part A 3,457 MMBTU X 54.6303 = 16,006.67
58 Rider GCR Part B 3,457 MMBTU X 50.3062 = 1,058,42
59 Subtotal
518,321.91
60 Revenue -related Tax Reimbursement $18,321.91 X 0.07477 = 1,369.86
61 Total 519,691,77 $81.34
62
0.41%
63 Rate T iia 9467 MM6711 CURRENT PROPOSED CHANGE
64 Customer charge 542500
65 Consumption charge 1,500 MMBTU X50.2583 387.45
66 Consumption charge 1,957 MMBTU X $0.1864 = 368.69
67 Consumption charge 0 MMBTU X $0.0404 = 0.00
68 Rider GCR Part B 3,457 MMBTU X 50.3062 = 1,058.42
69
70 Subtotal $2,239.56
71 Revenue -related Tax Reimbursement 52,239,56 X 007477 = 167.44
72 Total 52,407.00
73
74 Customer charge 5450.00 $25.00
75 Consumption charge 1,50D MMBTU X 50,2750 = 412,51 625.06
76 Consumption charge 1,957 MMBTU X 50.2015 = 394.31 525.62
77 Consumption charge 0 MMBTU X 50.0433 = 0.00
78 Rider GCR Par B 3,457 MMBTU X 60.3092 = 1.058.42
79 Subtotal 52,315.24
80 Revenue -related Tax Reimbursement 52,31524 X 007477 173.10
81 Total 52.488.34 581,34
3.38%
ATMOS ENERGY CORP., MID-TEX DIVISION
SUMMARY OF CURRENT AND PROPOSED RATE STRUCTURE
TEST YEAR ENDING DECEMBER 31, 2009
(2010 RRM SETTLEMENT INCL ST SVCS RECOVERY)
Proposed
Line (Beginning
No. Description Current Oct 1) Billing Units
(a) (b) (d)
1 Rate R
2 Customer Charge per month $7.00 $7.15 17,287,740
3
4 Consumption Charge per MCF $2.2647 $2.5246
5 2008 RRM True -up per MCF $0.0000 $0.0000
6 2009 RRM True -up per MCF $0.0060 $0.0000
7 Total Consumption Charge per MCF $2.2707 $2.5246 78,500,000
8 Rate C
9 Customer Charge per month $13.50 $13.91 1,445,436
10
11 Consumption Charge per MCF $0.9825 $1.0796
12 2008 RRM True -up per MCF $0.0000 $0.0000
13 2009 RRM True -up per MCF $0.0052 $0.0000
14 Total Consumption Charge per MCF $0.9877 $1.0796 49,500,000
15 Rate I & T
16 Customer Charge per month $425.00 $450.00 10,985
17
18 Consumption Charge per MMBTU:
19 First 1,500 MMBTU $0.2496 $0.2750
20 Next 3,500 MMBTU $0.1820 $0.2015
21 Over 5,000 MMBTU $0.0390 $0.0433
22 2008 RRM True -up per MMBTU:
23 First 1,500 MMBTU $0.0087 $0.0000
24 Next 3,500 MMBTU $0.0064 $0.0000
25 Over 5,000 MMBTU $0.0014 $0.0000
26 2009 RRM True -up per MMBTU:
27 First 1,500 MMBTU $0.0000 $0.0000
28 Next 3,500 MMBTU $0.0000 $0.0000
29 Over 5,000 MMBTU $0.0000 $0.0000
30 Total Consumption Charge per MMBTU
31 First 1,500 MMBTU $0.2583 $0.2750 10,597,655
32 Next 3,500 MMBTU $0.1884 $0.2015 10,791,216
33 Over 5,000 MMBTU $0.0404 $0.0433 16,585,623
ATMOS ENERGY CORP., MID-TEX DIVISION
CUSTOMER IMPACT OF PROPOSED RATES COMPARED TO CURRENT RATES
TEST YEAR ENDING DECEMBER 31, 2009
(2010 RRM SETTLEMENT PROPOSAL)
Line Prospective
No. Description Rate Increase
(a) (b)
1 Rate R
2 Consumption Charge per MCF
3 Change from Current Rate $0.2539
4 Billing Units for Specified Period 78,500,000
5 Total Change in Base Revenue $19,934,212
6 Associated Revenue Taxes $1,490,401
7 Total Rate Impact $21,424,613
8 Number of Bills for Specified Period 17,287,740
9 Average Impact per Bill $1.24
10 Rate C
11 Consumption Charge per MCF
12 Change from Current Rate $0.0919
13 Billing Units for Specified Period 49,500,000
14 Total Change in Base Revenue $4,547,060
15 Associated Revenue Taxes $339,966
16 Total Rate Impact $4,887,026
17 Number of Bills for Specified Period 1,445,436
18 Average Impact per Bill $3.38
19 Rates I&T - Customer Charge
20 Customer Charge
21 Change from Current Rate $25.00
22 Billing Units for Specified Period 10,985
23 Total Change in Base Revenue $274,625
24 Associated Revenue Taxes $20.533
25 Total Rate Impact $295,157.61
26 Rates MT - 1st block
27 Consumption Charge per MCF
28 Change from Current Rate $0.0167
29 Billing Units for Specified Period 10,597,655
30 Total Change in Base Revenue $177,031
31 Associated Revenue Taxes $13,236
32 Total Rate Impact $190,266
33 Rates l&T - 2nd block
34 Consumption Charge per MCF
35 Change from Current Rate $0.0131
36 Billing Units for Specified Period 10,791,216
37 Total Change in Base Revenue $141,297
38 Associated Revenue Taxes $10,564
39 Total Rate Impact $151,862
40 Rates I&T - 3rd block
41 Consumption Charge per MCF
42 Change from Current Rate $0.0029
43 Billing Units for Specified Period 16,585,623
44 Total Change in Base Revenue $47,655
45 Associated Revenue Taxes $3.563
46 Total Rate Impact $51,218
47 Rates IV - Total
48 Total Rate Impact $688,504
49 Number of Bills for Specified Period 10,985
50 Average Impact per Bill $62.68
51
52 Total Change in Base Revenue 325,121,880
53 Total Rate Impact (Inc. Rev. Taxes) 327,000,142
ATMOS ENERGY CORP., MID-TEX DIVISION
CUSTOMER IMPACT OF PROPOSED RATES COMPARED TO CURRENT RATES
(STEEL SERVICE REPLACEMENT PROGRAM)
Line Prospective
No. Description Rate Increase
(a) (b)
1 Rate R
2 Monthly Customer Charge
3 Change from Current Rate $0.15
4 Billing Units for Specified Period 17,287,740
5 Total Change in Base Revenue $2,593,161
6 Associated Revenue Taxes $193,880
7 Total Rate Impact $2,787,041
8 Number of Bilis for Specified Period 17,287,740
9 Average Impact per Bill $0.16
10 Rate C
11 Monthly Customer Charge
12 Change from Current Rate $0.41
13 Billing Units for Specified Period 1,445,436
14 Total Change in Base Revenue $592,629
15 Associated Revenue Taxes $44,308
16 Total Rate Impact $636,937
17 Number of Bilis for Specified Period 1,445,436
18 Average Impact per Bill $0A4
19
20 Total Change in Base Revenue $3,185,790
21 Total Rate Impact (Inc. Rev. Taxes) $3,423,979
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ROUND ROCK, TEXAS
PURPOSE. PASSION. PROSPERITY:
Agenda Item No. 10D1.
City Council Agenda Summary Sheet
Agenda Caption:
Consider a resolution approving a change in the tariffs of Atmos Energy Corporation, Mid -
Tex Division, as a result, of a settlement between Atmos and the Atmos Texas
Municipalities (ATM).
Meeting Date: September 23, 2010
Department: Administration
Staff Person making presentation: Cheryl Delaney
Finance Director
Item Summary:
For the last three years ATM Cities have worked to resolve rate cases brought by Atmos Energy Corp. ("Atmos")
under a regime known as the Rate Review Mechanism ("RRM"). This mechanism operated under a February 2008
settlement agreement where a number of items that can be very contentious under traditional rate making, like the
rate of return on equity and the capital structure of the utility, were stipulated. The RRM was both forward looking
and backward looking. The forward looking component was based upon the books and records for the most recent
historic calendar year. Those books and records were used to set rates for the next year. The backward looking
component consisted of making up ("truing up") any shortfall in achieving the stipulated rate of return of 9.6% for
the recent calendar year. There were very significant disputes about how to calculate the achieved return. ATM has
always been concerned that truing up the return took away some of the incentive for the utility to operate
prudently and efficiently.
The RRM for this year was filed in mid-April. At about the same time the Railroad Commission was starting a
rulemaking aimed at requiring Atmos to replace steel service lines. Those are the lines which go from the main in the
street to the meter at the house or business. This issue was on the Commission's front -burner because of three
recent explosions involving steel service lines. At one point in time the Commission appeared to be considering
replacing all service lines on a very rapid schedule which would have resulted in very substantial rate increases. It
would also have necessitated the expenditure of substantial resources by cities to assist in the monitoring and
routing of these lines when many cities were experiencing downsizing and other belt -tightening measures.
Finally, the RRM was instituted as a three year experiment. Thus, also at issue during the three months of
negotiations with Atmos was whether the RRM experiment should continue.
Strategic Plan Relevance:
Cost: N/A
Source of Funds: N/A
Date of Public Hearing (if required): N/A
Recommended Action: Approval