Item 4I
Ordinance 1172, 1st Reading, Approving a negotiated settlement between Atmos Cities Steering Committee (“ACSC”) and Atmos Energy Corp. Mid-Tex Division
May 16, 2017
Hello Mayor and members of the City Council. This item requests City Council approval of Ordinance 1172, approving a negotiated settlement agreement with Atmos Energy
1
City of Southlake Strategy Map
The City of Southlake provides municipal services that support the highest quality of life for our residents, businesses, and visitors. We do this by being an exemplary model of balancing
efficiency, fiscal responsibility, transparency, and sustainability.
C1 Achieve the highest standards of safety & security
C2 Provide travel convenience within City & region
C3 Provide attractive & unique spaces for enjoyment of personal interests
C4 Attract & keep top-tier businesses to drive a dynamic & sustainable economic environment
C5 Promote opportunities for partnerships & volunteer involvement
Serve our Customers
Manage the Business
B1 Achieve best-in-class status in all City disciplines
B2 Collaborate with select partners to implement service solutions
B3 Enhance resident quality of life & business vitality through tourism
B4 Provide high quality services through sustainable business practices
B5 Enhance service delivery through continual process improvement
B6 Optimize use of technology
Provide Financial Stewardship
Promote Learning and Growth
F1 Adhere to financial management principles & budget
F2 Invest to provide & maintain high quality public assets
F3 Achieve fiscal wellness standards
F4 Establish & maintain effective internal controls
L1 Ensure our people understand the strategy & how they contribute to it
L2 Enhance leadership capabilities to deliver results
L3 Attract, develop & retain a skilled workforce
L4 Recognize & reward high performers
L5 Empower informed decision-making at all levels in the organization
C6 Enhance the sense of
community by providing excellent customer service and citizen engagement opportunities
L6 Foster positive employee engagement
Deliver on Our Focus Areas
This item supports the City’s strategy through the focus area of Performance Management & Service Delivery and through the corporate objective of B2 collaborate with select partners
to implement service solutions
2
Purpose
Seek City Council approval of the negotiated settlement between Atmos Cities Steering Committee (“ACSC”) and Atmos Energy Corp. Mid-Tex Division
The purpose of this item is to seek City Council approval of the negotiated settlement between Atmos Cities Steering Committee (“ACSC”) and Atmos Energy Corp regarding 2017 rate review
mechanism filings.
The Atmos Cities Steering Committee is a permanent standing coalition of more than 150 Texas cities that has been authorized, through council resolutions, to represent
the interests of municipal and residential consumers in gas utility regulatory matters. The ACSC supports safe service at fair prices.
3
Background
2017 Rate Review Filing
Filed March 1, 2017
Filing sought $57.4 million rate increase
In March 2017, Atmos filed with the City an application to increase natural gas rates pursuant to the Rate Review Mechanism (“RRM”) tariff.
The filing requested a $57.4 million rate
increase system-wide.
The City worked with ACSC to analyze the schedules and evidence offered by Atmos to support the request to increase rates.
Ordinance 1172 and the attachments
are the results of negotiation between the ACSC Executive Committee and Atmos officials to resolve issues identified during the review and evaluation of Atmos filing. The negotiated
settlement reduced Atmos’ request by $9.4 million therefore the system-wide rate increase will generate an increase of $48 million as opposed to the $57.4 million originally requested
by Atmos.
4
Ordinance 1172
Approves rate increase
$9.4 million less than original request
Monthly residential customer charge increase $0.50
Consumption charge increase .03049 per Ccf
$2.04 (3.87%) monthly increase
for residential customers
$6.27 (2.37%) monthly increase for commercial customers
Requires Atmos reimburse Cities for reasonable ratemaking cost
The approval of ordinance will:
approve rates that will increase Atmos’ revenues by $48 million which is $9.4 million less than original requested by Atmos;
monthly residential customer
charge will increase $.50 from current charge of $19.10 to $19.60
consumption charge will increase .03049 per Ccf.
typical residential customer consuming 47 Ccf will see a monthly
increase of $2.04 (about a 3.87% increase)
typical commercial customer will see an increase of $6.27 or 2.37%
The ordinance also requires Atmos to reimburse Cities for reasonable
ratemaking costs associated with reviewing and processing the rate filings and establishes the baseline for Atmos pensions and other post-employment benefits for future rate cases..and
require a rate reconciliation in the event that federal income tax rates change.
5
Requested Action
Approval of Ordinance 1172
ACSC Executive Committee
ACSC Legal Counsel
The ACSC Executive Committee, ACSC legal counsel and consultants recommend that all cities adopt the ordinance approving the negotiated Settlement Agreement resolving 2017 filings
and implementing the rate change.
The alternative to approval of the settlement agreement would a contested rate case hearing at the Railroad Commission with resulting rate case expenses
borne by ratepayers.
6
Questions? Sharen Jackson
817-748-8042
7
Thank you for your time and attention. If you have any questions, please feel free to contact me at the number shown on the screen.