Item 6ACity of Southlake, Texas
MEMORANDUM
February 19, 2008
TO: Shana Yelverton, City Manager
FROM: Sharen Jackson, Director of Finance
SUBJECT: Ordinance No. 926,2` Reading, Approve a settlement agreement between
the Atmos Cities Steering Committee and Atmos Energy Corporation, Mid -
Tex Division. PUBLIC HEARING.
Action Requested: 1. Approve Ordinance 926
2. PUBLIC HEARING
Background
Information: On September 20, 2007, Atmos filed with the City the Company's
Statement of Intent to increase natural gas rates system -wide by
approximately $52 million. The City suspended the October 25`
effective date to work with other ACSC members to analyze the
schedules and evidence offered by Atmos to support its request to
increase rates.
The City, along with 150 other cities served by Atmos Energy,
Mid -Tex Division ( "Atmos "), is a member of the Atmos Cities
Steering Committee ( "ACSC "). Since October, ACSC members
have worked diligently with Atmos representatives to explore
options to address Atmos' latest request to increase rates by $52
million and to resolve other outstanding issues. The ordinance and
tariffs (Attachment B to the Ordinance) reflect the agreement
reached between ACSC and Atmos Mid -Tex to reduce Atmos'
requested increase by more than 80 percent and ensure that the
Company is able to provide safe and reliable natural gas service.
The Settlement Agreement (Attachment A to the Ordinance) also
provides rate certainty for customers by resolving outstanding
appeals, creates a new process for expedited rate review by the
cities, eliminates piecemeal ratemaking, reimburses ACSC for rate
case expenses associated with the GRIP surcharge cases, and
avoids the necessity of costly litigation. The ACSC Executive
Committee recommends that the ACSC members approve the
Settlement Agreement.
The purpose of the Ordinance is to endorse the Settlement
Agreement between ACSC and Atmos regarding the Company's
Statement of Intent to increase rates and to approve tariffs that
implement the terms of the Settlement Agreement.
Approval of the Ordinance will result in a $10 million increase in
Atmos' revenues. This is an 80 percent reduction of the $52
million increase requested by Atmos in its Statement of Intent. In
addition, the tariffs approved by the Ordinance will replace the
current piecemeal ratemaking GRIP surcharge system with an
expedited rate review process that ensures that cities can review all
components of future Company rate change requests. The
Settlement Agreement also resolves all outstanding issues between
ACSC and Atmos, including six appeals currently pending in
Texas courts.
Financial
Considerations: None
Citizen Input/
Board Review: None
Legal Review: The steering committee attorney prepared the ordinance. (Lloyd
Gosselink)
Alternatives: Approve or deny
Supporting
Documents: Ordinance 926
Staff
Recommendation: Approval of Ordinance 926
ORDINANCE NO. 926
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF SOUTHLAKE, TEXAS, ( "CITY ") APPROVING A
SETTLEMENT AGREEMENT BETWEEN THE ATMOS
CITIES STEERING COMMITTEE AND ATMOS ENERGY
CORP., MID -TEX DIVISION ( "ATMOS MID -TEX" OR
"THE COMPANY ") REGARDING THE COMPANY'S
STATEMENT OF INTENT TO CHANGE GAS RATES IN
ALL CITIES EXERCISING ORIGINAL JURISDICTION;
DECLARING EXISTING RATES TO BE
UNREASONABLE; ADOPTING TARIFFS THAT REFLECT
RATE ADJUSTMENTS CONSISTENT WITH THE
SETTLEMENT AGREEMENT AND FINDING THE RATES
TO BE SET BY THE ATTACHED TARIFFS TO BE JUST
AND REASONABLE; ADOPTING A SAVINGS CLAUSE;
DETERMINING THAT THIS ORDINANCE WAS PASSED
IN ACCORDANCE WITH THE REQUIREMENTS OF THE
TEXAS OPEN MEETINGS ACT; DECLARING AN
EFFECTIVE DATE; AND REQUIRING DELIVERY OF
THIS ORDINANCE TO THE COMPANY AND LEGAL
COUNSEL.
WHEREAS, the City of Southlake, 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, on or about September 20, 2007, Atmos Mid -Tex, pursuant to Gas Utility
Regulatory Act § 104.102 filed with the City a Statement of Intent to increase system -wide gas
rates by approximately $52 million, such increase to be effective in all municipalities exercising
original jurisdiction within its Mid -Tex Division service area effective on October 25, 2007; and
WHEREAS, the City took action to suspend the October 25, 2007 Effective Date and to
coordinate a response to Atmos' filing with more than 150 other similarly situated municipalities
through the Atmos Cities Steering Committee ( "ACSC ") (such participating cities are referred to
herein as "ACSC Cities "); and
Atmos Rate Ordinance 1
WHEREAS, Atmos has agreed to extend the October 25, 2007, Effective Date such that
the City's jurisdiction over this matter ends March 1, 2008; and
WHEREAS, the Railroad Commission of Texas ( "RRC" or the "Commission ") in GUD
No. 9670, issued an Order approving new system -wide rates for customers of Atmos Energy's
Mid -Tex Division in March 2007, which increased residential base rates by approximately $10
million annually; and
WHEREAS, ACSC and Atmos have each appealed the RRC's decision in Atmos' most
recent system -wide rate increase as well as the decision: rendered in GUD No. 9400 to the Travis
County District Court; and
WHEREAS, Atmos and ACSC have been in continuing disagreement, dispute, and
litigation over the application of Section 104.301 of the Texas Utilities Code and the resulting
rate increases ( "GRIP surcharges ") established by the RRC; and
WHEREAS, Atmos filed its application for its fourth GRIP surcharge in four years on
May 31, 2007, seeking to increase the rates of all customers by approximately $12 million
annually; and
WHEREAS, the ACSC Cities desire to avoid the litigation expense that would result
from another lengthy contested rate case proceeding before the RRC as well as the prosecution
of the appeals in various courts of the GRIP surcharges and the two previous system -wide rate
decisions; and
WHEREAS, ACSC desires to recoup certain costs it previously incurred in connection
with GRIP - related proceedings (costs which Atmos contends are not reimbursable rate case
expenses under the Texas Utilities Code), as well as costs incurred in connection with this
proceeding; and
Atmos Rate Ordinance 2
WHEREAS, on October 18, 2007, more than 60 ACSC members met in Arlington with
officers and executives of Atmos to discuss various issues, including rate making, resulting in a
mutual pledge to work toward settlement; and
WHEREAS, ACSC members designated a Settlement Committee made up of ACSC
representatives to work with ACSC attorneys and consultants to formulate and review reasonable
settlement positions to resolve outstanding matters with Atmos, including the pending rate
increase request; and
WHEREAS, the Settlement Committee and lawyers representing ACSC met several
times with the Company to negotiate a Settlement Agreement resolving the issues raised in the
Company's Statement of Intent filing as well as all outstanding appeals of the two prior rate cases
and various GRIP filings; and
WHEREAS, the Settlement Committee, as well as ACSC lawyers and consultants believe
existing rates are unreasonable and should be changed; and
WHEREAS, the ACSC Executive Committee recommends ACSC members approve the
negotiated Settlement Agreement and attached tariffs; and
WHEREAS, the attached tariffs provide for an expedited rate review process as a
substitute to the current GRIP process instituted by the Legislature; and
WHEREAS, the expedited rate review process as provided by the Rate Review
Mechanism Tariff eliminates piecemeal ratemaking, the ACSC's major objection to the current
GRIP process; and
WHEREAS, the attached tariffs implementing new rates are consistent with the
Settlement Agreement and are just, reasonable, and in the public interest; and
Atmos Rate Ordinance 3
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 Statement of
Intent or any associated appeals of a decision entered by the Railroad Commission regarding the
Company's request to increase rates; and
WHEREAS, the Settlement Agreement as a whole is in the public interest.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF SOUTHLAKE, TEXAS:
Section 1. That the findings set forth in this Ordinance are hereby in all things approved.
Section 2. That the City Council finds that the Settlement Agreement, which is attached
hereto and incorporated herein as Attachment A, is in the public interest and is hereby
endorsed in all respects.
Section 3. That existing rates for natural gas service provided by Atmos Mid -Tex are
unreasonable and new tariffs, which are attached hereto and incorporated herein as
Attachment B, are just and reasonable and are hereby adopted.
Section 4. That to the extent any resolution or ordinance previously adopted by the
Council is inconsistent with this Ordinance, it is hereby repealed.
Section 5. 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 6. 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.
Atmos Rate Ordinance 4
Section 7. That if ACSC Cities determine any rates, revenues, terms and conditions, or
benefits resulting from a Final Order or subsequent Settlement Agreement approved in any
proceeding addressing the issues raised in Atmos' Statement of Intent would be more beneficial
to the ACSC Cities than the terms of the attached Settlement Agreement, then the more favorable
rates, revenues, terms and conditions, or benefits shall additionally accrue to the ACSC Cities.
However, approval of the attached Rider RRM, Rider CEE, Rider GCR and the Rider WNA
shall not be affected by the application of the provisions contained in this section, it being the
understanding and the intent of the parties hereto that such tariffs shall continue according to
their terms.
Section 8. 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 March
1, 2008.
Section 9. That a copy of this Ordinance shall be sent to Atmos Mid -Tex, care of Joe T.
Christian, Director of Rates, at Atmos Energy Corporation, 5420 LBJ Freeway, Suite 1800,
Dallas, Texas 75240, and to Geoffrey Gay, General Counsel to ACSC, at Lloyd Gosselink
Blevins Rochelle & Townsend, P.C., P.O. Box 1725, Austin, Texas 78767 -1725.
PASSED AND APPROVED this day of 2008.
ATTEST;
City Secretary
Mayor
Atmos Rate Ordinance 5
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ATTACHMENT A
STATEMENT OF INTENT FILED BY ATMOS ENERGY, CORP., MID -TEX DIVISION
ON SEPTEMBER 20, 2007
SETTLEMENT AGREEMENT
This Settlement Agreement is entered into by and between Atmos Energy Corp.( "Atmos"
or "the Company ") and the Atmos Cities Steering Committee ( "ACSC "), whose members
include the Cities of Abilene, Addison, Allen, Alvarado, Angus, Anna, Argyle, Arlington,
Bedford, Bellmead, Benbrook, Beverly Hills, Blue Ridge, Bowie, Boyd, Bridgeport,
Brownwood, Buffalo, Burkburnett, Burleson, Caddo Mills, Carrollton, Cedar Hill, Celeste,
Celina, Cisco, Cleburne, Clyde, College Station, Colleyville, Colorado City, Comanche,
Coolidge, Coppell, Corinth, Corral City, Crandall, Crowley, Dalworthington Gardens, Denison,
DeSoto, Duncanville, Eastland, Edgecliff Village, Emory, Ennis, Euless, Everman, Fairview,
Farmers Branch, Farmersviile, Fate, Flower Mound, Forest Hill, Fort Worth, Frisco, Frost,
Gainesville, Garland, Garrett, Grand Prairie, Grapevine, Haltom City, Harker Heights, Haskell,
Haslet, Heath, Hewitt, Highland Park, Highland Village, Honey Grove, Hurst, Iowa Park, Irving,
Justin, Kaufman, Keene, Keller, Kemp, Kennedale, Kerrville, Killeen, Krum, Lakeside, Lake
Worth, Lancaster, Lewisville, Lincoln Park, Little Elm, Malakoff, Mansfield, McKinney,
Melissa, Mesquite, Midlothian, Murphy, Newark, Nocona, North Richland Hills, Northlake, Oak
Leaf, Ovilla, Palestine, Pantego, Paris, Parker, Pecan Hill, Plano, Ponder, Pottsboro, Prosper,
Putnam, Quitman, Red Oak, Reno (Parker County), Richardson, Richland Hills, Roanoke,
Robinson, Rockwall, Roscoe, Rowlett, Sachse, Saginaw, Seagoville, Sherman, Snyder,
Southlake, Springtown, Stamford, Stephenville, Sulphur Springs, Sweetwater, Temple, Terrell,
The Colony, Throckmorton, Tyler, University Park, Venus, Vernon, Waco, Watauga,
Waxahachie, Westlake, Westworth Village, Whitesboro, White Settlement, Wichita Falls,
Woodway, and Wylie (collectively "ACSC Cities ").
WHEREAS, the Settlement Agreement resolves all issues relating to the Atmos Energy
Corp., Mid -Tex Division Statement of Intent filed with the ACSC Cities on September 20, 2007,
in a manner that Atmos and ACSC ( "the Signatories ") believe is consistent with the public
interest, and the Signatories represent diverse interests;
WHEREAS, the Signatories believe that a fully contested hearing in the case would be
time - consuming and entail substantial additional expense for all parties and that the public
interest will be served by adoption of an ordinance consistent with the Settlement Agreement;
NOW, THEREFORE, in consideration of the mutual agreements and covenants
established herein, the Signatories, through their undersigned representatives, agree to and
recommend for approval by the ACSC Cities the following Settlement Terms as a means of fully
resolving all issues raised in the September 20, 2007 Statement of Intent filed by Atmos on
behalf of its Mid -Tex division:
Settlement Terms
Atmos and the ACSC Cities agree to the rates, terms and conditions reflected in the
tariffs attached to this Settlement Agreement as Exhibit A. Said tariffs should allow
Atmos an additional $10 million in annual revenue by implementation of rates shown in
SETTLEMENT AGREEMENT
STATEMENT OF INTENT FILED BY ATMOS ENERGY, CORP.,
MID -TEX DIVISION ON SEPTEMBER 20, 2007
the proof of revenues attached as Exhibit B. Atmos and the ACSC Cities further agree
that the rates, terms, and conditions reflected in Exhibit A to this Settlement Agreement
comply with the rate - setting requirements of Chapter 104 of the Texas Utilities Code.
The gas rates, terms and conditions established by this Settlement Agreement shall be
effective for bills rendered on or after March 1, 2008.
2. The net plant amounts shown in the attached Exhibit B are reasonable for the plant that is
used and useful in providing gas utility service.
Included as part of Exhibit A is a Rate Review Mechanism ( "Rider RRM ") that 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.
Atmos agrees that effective with the implementation of the first RRM rate adjustment,
Atmos shall file with the ACSC Cities a revised Rate R- Residential Sales Tariff to reduce
the customer charge per bill from $10.69 per month to $7,00 per month and to increase
the volumetric portion of the rate (shown as $1.271 in Exhibit A) to the appropriate level
to reflect reduction in customer charge from $10.69 to $7.00, as well as to reflect any
change resulting from the RRM implementation. The first RRM rate adjustment is
expected to occur October 1, 2008. Atmos and the ACSC Cities agree that following the
initial RRM adjustment any subsequent implementation of RRM adjustments shall be
supported as described in the Rider RRM, and shall limit changes to residential and
commercial customer charge to no more than 20 %. Further, the parties agree that any
approved adjustment in excess of the 20% limitation on the residential and commercial
customer charge shall be recovered through the volumetric portion of the rate.
4. With respect to the RRM, Atmos and the ACSC Cities agree that the rate increase
limitations set forth in Rider RRM under Calculation of Rate Adjustment, subpart (c)
shall not preclude Atmos from recovering any excluded costs during a subsequent
Evaluation Period in which the 5% limitation for O &M expenses or net plant investment,
respectively, is not reached or in a subsequent Statement of Intent case. To the extent
that Atmos seeks to recover any excluded costs during a subsequent Evaluation Period in
which the 5% limitation for O &M expenses or net plant investment, respectively, is not
reached or in a subsequent Statement of Intent case, Atmos shall identify these costs as a
specific line item in the schedule accompanying the RRM rate adjustment filing.
5. With respect to the RRM, Atmos further 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.
6. Notwithstanding paragraph 5 of this Settlement Agreement, Atmos and ACSC 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),
2
SETTLEMENT AGREEMENT
STATEMENT OF INTENT FILED BY ATMOS ENERGY, CORP,,
MID -TEX DIVISION ON SEPTEMBER 20, 2007
Atmos shall recover any reimbursement made to the original jurisdiction entity through a
surcharge to customer rates whether such reimbursements are made during the initial
review period or appeal period.
7. Atmos agrees that it will make no flings on behalf of its Mid -Tex division under the
provisions of TEX. UTIL. CODE ANN. § 104.301 while the Rider RRM is in place, and any
such filings pending at the time the RRM is approved will be trued -up for revenue and
rate base components prior to implementation of the annual RRM. 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 ACSC 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.
8. Atmos and the ACSC Cities commit that during the Initial Implementation Period, as
defined in the RRM tariff, Atmos and the ACSC Cities will not devote resources or
efforts to advocate statutory changes involving rate stabilization mechanisms or the Gas
Reliability Infrastructure Plan that is currently codified under TEX. UTIL, CODE §104.301.
9. Atmos and the ACSC Cities agree that the gas cost portion of uncollectible expense shall
be recovered through the Company's Rider GCR rather than through base rates. The
change in accounting for the gas cost portion of uncollectible expense (including both the
accrual of expense and write -off of accounts) shall become effective with the
implementation of the first RRM rate adjustment. The first RRM rate adjustment is
expected to occur October 1, 2008. In calculating the rate for the first Rate Effective
Period, the Company shall utilize the same methodology as used in the Company's
September 20, 2007 Statement of Intent with the only modification being to exclude the
effects of the gas cost portion of uncollectible expense from the base rate calculation.
10. Atmos and the ACSC Cities further agree that expense associated with lost and
unaccountable gas shall, based on an annual period, be recoverable through the
Company's Rider GCR up to a maximum of five (5) percent of the quantity of metered
gas, as provided under Commission Rule 7.5525, Lost and Unaccounted for Gas. Such
change shall be effective with the complete 12 month reporting period ending June 30,
2008.
11. Included as part of Exhibit A to this Settlement Agreement is a new gas conservation
program tariff (Rider CEE) that will be effective October 1, 2008. Atmos and the ACSC
Cities agree that Atmos will fund $1 million of the allowable expenses incurred annually,
with a customer rate component providing the remainder $1 million of funding. All
customer - supplied funds will, prior to the commencement of the program, be used toward
program implementation efforts and, upon implementation, be applied directly to the gas
conservation materials and supplies.
3
SETTLEMENT AGREEMENT
STATEMENT OF INTENT FILED BY ATMOS ENERGY, CORP.,
MID -TEX DIVISION ON SEPTEMBER 20, 2007
12. Atmos and the ACSC Cities agree that the Company's requested revision of its weather
normalization adjustment ( "WNA ") mechanism is appropriate, as modified by ACSC,
and should be approved as set forth in Exhibit A to this Settlement Agreement.
Specifically, the revision excludes non - weather sensitive commercial customers and
modifies the WNA mechanism to calculate the "A adjustment based on weather
stations at a regional level rather than under the current practice of associating all
customers with a single weather location for purposes of determining the WNA
adjustment.
13. Atmos and the ACSC Cities agree that the three -year gas cost review process that is
currently in effect for the Mid -Tex division should be eliminated. Atmos and the ACSC
Cities further agree to collaborate to establish an alternate process wherein the prudence
of gas costs recovered through the Rider GCR can be addressed. Until an agreed upon
replacement mechanism has been established, the current gas cost review process shall
remain in effect, unless changed by order of the Commission.
14. It is the intention of the Signatories that the ACSC Cities receive the benefit of any
settlement agreement that Atmos enters into with other entities arising out of GUD No.
9672 (consolidated cases) or any associated appeals of GUD No. 9672. Therefore, Atmos
agrees that if the rates, revenues, terms and conditions, or benefits accruing to the settling
entity would be more beneficial to the ACSC Cities than the terms of this Settlement
Agreement, as determined by the ACSC Cities, such more favorable rates, revenues, terms
and conditions, or benefits shall additionally accrue to the ACSC Cities. Similarly, if the
Final Order in GUD No. 9672 or orders resulting from any associated appeals are
determined by the ACSC Cities to result in rates, revenues, terms and conditions, or
benefits that are more beneficial than the terms or this Settlement Agreement, such more
favorable terms, revenues, terms and conditions shall additionally accrue to the ACSC
Cities. However, the Signatories agree that the approval of the Rider RRM, the Rider
WNA, the Rider CEE, and the Rider GCR, as shown in Exhibit A hereto, shall not be
affected by the application of the "most favored nations" provisions contained in this
paragraph, it being the understanding and the intent of the Signatories hereto that such
tariffs shall continue in effectiveness according to their terms. The Signatories fi - ther
agree that the agreement reflected in paragraph 10 of this Settlement Agreement shall not
be affected by the application of the "most favored nations" provisions contained in this
paragraph.
15. Atmos agrees to reimburse the ACSC Cities previously incurred rate case expenses
within 30 days of the date the last ACSC City ordinance approving this Settlement
Agreement is entered, and any additional rate case expenses incurred through the date of
the entry of the last ACSC City ordinance, within 30 days of receipt of invoices.
16. Atmos agrees to reimburse the ACSC Cities for expenses associated with all 2003, 2004,
2005, and 2006 GRIP filings and related court appeals up to $567,213 within 30 days of
the date the last ACSC City ordinance approving this Settlement Agreement is entered.
17. Atmos and the ACSC Cities further agree that all expenses reimbursed pursuant to
paragraphs 15 and 16 of this Settlement Agreement, as well as all reasonable rate case
4
SETTLEMENT AGREEMENT
STATEMENT OF INTENT FILED BY ATMOS ENERGY, CORD„
MID -TEX DIVISION ON SEPTEMBER 20, 2007
expenses directly incurred by Atmos in connection with the September 20, 2007
Statement of Intent filed on behalf of its Mid -Tex Division through February 29, 2008,
shall be recoverable through a surcharge to customer rates within the ACSC Cities. With
respect to the rate case expenses directly incurred by Atmos, the amount to be recovered
through the surcharge to customers within the ACSC Cities shall be determined on a pro
rata basis, consistent with the ACSC Cities' percentage of total Mid -Tex residential load
(52 %). The surcharge shall be recovered over a twelve month period beginning in April
of 2008.
18. Within 30 days of the date the last ACSC City ordinance approving this Settlement
Agreement is entered, Atmos and the ACSC Cities agree to file a Notice of Non -Suit or
Motion to Dismiss, whichever is applicable, in the following proceedings:
Cause No. D- 1- GN -06- 000337 (Consolidated), Atmos.Cities Steering Committee v. The
Railroad Commission of Texas, In the 345th District Court, Travis County, Texas. This
case includes the following cases:
a. Cause No. D- 1- GN -06- 000333; Atmos Cities Steering Committee v. The
Railroad Commission of Texas, In the 345th District Court, Travis County, Texas.
b. Cause No. D- 1- GN -06- 000334; Atmos Cities Steering Committee v. The
Railroad Commission of Texas, In the 345th District Court, Travis County, Texas.
C. Cause No. D- 1- GN -06- 000335; Atmos Cities Steering Committee v. The
Railroad Commission of Texas, In the 345th District Court, Travis County, Texas.
d. Cause No. D- 1- GN -06- 000336; Atmos Cities Steering Committee v. The
Railroad Commission of Texas, In the 345th District Court, Travis County, Texas.
e. Cause No. D- 1 -GN-06-0003 32; Atmos Cities Steering Committee v. The
Railroad Commission of Texas, In the 345th District Court, Travis County, Texas.
f. Cause No. D- 1- GN -05- 0021$2; Atmos Cities Steering Committee v. The
Railroad Commission of Texas, In the 345th District Court, Travis County, Texas.
g. Cause No. D- 1- GN -06- 004206; Atmos Cities Steering Committee v. The
Railroad Commission of Texas, In the 345th District Court, Travis County, Texas.
Cause No. D- 1- GN- 06- 001612; Atmos Cities Steering Committee v. The Railroad
Commission of Texas, In the 345th District Court, Travis County, Texas.
Cause No. D- 1- GN- 06- 001$52; Atmos Cities Steering Committee v. The Railroad
Commission of Texas, In the 345th District Court, Travis County, Texas.
Cause No. D- 1- GV- 06- 000603; Atmos Cities Steering Committee v, The Railroad
Commission of Texas, In the 345th District Court, Travis County, Texas.
Cause No. D- 1- GV- 06- 000605; Atmos Cities Steering Committee v. The Railroad
Commission of Texas, In the 345th District Court, Travis County, Texas.
SETTLEMENT AGREEMENT
STATEMENT OF INTENT FILED BY ATMOS ENERGY, CORP.,
MID -TEX DIVISION ON SEPTEMBER 20, 2007
Cause No. D- 1 -GN -06- 004518; Atmos Cities Steering Committee v. The Railroad
Commission of Texas, In the 345th District Court, Travis County, Texas.
Cause Number: 03 -06 -00580 -CV; Atmos Energy Corporation, as successor by merger to
TXU Gas Company, Allied Coalition of Cities, and City of Dallas v. Railroad
Commission of Texas; In the Third District Court of Appeals at Austin, Texas.
Cause No. D- 1- GN -07- 002871, Atmos Cities Steering Committee v. Railroad
Commission of Texas, In the 53rd District Court, Travis County, Texas.
Cause No. D- 1- GN -07- 002796, Atmos Energy Corporation v. Railroad Commission of
Texas, In the 250th District Court, Travis County, Texas.
Cause No. GV5- 00875; Allied Coalition of Cities v. The Railroad Commission of Texas,
In the 345th District Court, Travis County, Texas,
19. Atmos and the ACSC Cities agree that Atmos may make all future filings, including, but
not limited to, the annual RRM adjustment and any Statement of Intent filing with the
ACSC Cities on an electronic basis, rather than by paper copy. Electronic Filings shall
fulfill the requirements of TEX. UTIL. CODE §104.103, The appropriate ACSC Cities
representative shall provide a list of the ACSC Cities to Atmos by March 1, 2008, and
agrees to notify Atmos of any change in the ACSC Cities Coalition within 30 days of the
effective date of any such change in order for Atmos to maintain adequate service
records. Atmos further agrees. to make.paper copies.of filings available. to any. ACSC.
City that requests a copy.
20. Atmos and the ACSC Cities agree that the ACSC Cities should pass ordinances
approving the Settlement Agreement and establish rates and services for the ACSC Cities
consistent with those set forth in Exhibit A to this Settlement Agreement.
21. The Signatories agree that the terms of the Settlement Agreement are interdependent and
indivisible, and that if any ACSC 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.
22. 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 the September 20, 2007 Statement of Intent filed by Atmos on behalf of
its Mid -Tex Division pursuant to Texas law.
23. 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 ACSC Cities of an order
implementing this Settlement Agreement.
SETTLEMENT AGREEMENT
STATEMENT OF INTENT FILED BY ATMOS ENERGY, CORP.,
MID -TEX DIVISION ON SEPTEMBER 20, 2007
24. 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.
25. The Signatories agree that this Settlement Agreement may be executed in multiple
counterparts and may be filed with facsimile signatures.
7
ST i'LEMENT AGRELNM1zNT
STATEMENT OF INTENT FIL D BY ATIVIOS ]ENERGY, CORP.,
MID -TEX MVISION ON S2 PTE MDER 20, 2007 WITII "I'I-1 l ACSC COAI.ITION OF CI TIM
lla5
Agreed to this 9` } ' day of January, 2008,
ATIVIOS ENERGY COR.P., i1 ID- =DIVISION
Jnl A, Paris
President, Mid -Tex Division
8
SETTLEMENT AGREEMENT
STATEMENT OF INTENT FILED BY ATMOS ENERGY, CORP.,
MID -TEX DIVISION ON SEPTEMBER 20, 2007
Agreed to this 9`� day of January, 2008.
ATTORNEY FOR ATMOS CITIES STEERING COMMITTEE,
WHOSE MEMBERS INCLUDE THE CITIES OF ABILENE,
ADDISON, ALLEN, ALVARADO, ANGUS, ANNA, ARGYLE,
ARLINGTON, BEDFORD, BELLMEAD, BENBROOK,
BEVERLY HILLS, BLUE RIDGE, BOWIE, BOYD,
BRIDGEPORT, BROWNWOOD, BUFFALO, BURKBURNETT,
BURLESON, CADDO MILLS, CARROLLTON, CEDAR HILL,
CELESTE, CELINA, CISCO, CLEBURNE, CLYDE, COLLEGE
STATION, COLLEYVILLE, COLORADO CITY, COMANCHE,
COOLIDGE, COPPELL, CORINTH, CORRAL CITY,
CRANDALL, CROWLEY, DALWORTHINGTON GARDENS,
DENISON, DESOTO, DUNCANVILLE, EASTLAND,
EDGECLIFF VILLAGE, EMORY, ENNIS, EULESS,
EVERMAN, FAIRVIEW, FARMERS BRANCH,
FARMERSVILLE, FATE, FLOWER MOUND, FOREST HILL,
FORT WORTH, FRISCO, FROST, GAINESVILLE, GARLAND,
GARRETT, GRAND PRAIRIE, GRAPEVINE, HALTOM CITY,
HARKER HEIGHTS, HASKELL, HASLET, HEATH, HEWITT,
HIGHLAND PARK, HIGHLAND VILLAGE, HONEY GROVE,
HURST, IOWA PARK, IRV ING, JUSTIN, KAUFMAN, KEENE,
KELLER, KEMP, KENNEDALE, KERRVILLE, KILLEEN,
KRUM, LAKESIDE, LAKE WORTH, LANCASTER
LEWISVILLE, LINCOLN PARK, LITTLE ELM, MALAKOFF,
MANSFIELD, MCKINNEY, MELISSA, MESQUITE,
MIDLOTHIAN, MURPHY, NEWARK, NOCONA, NORTH
RICHLAND HILLS, NORTHLAKE, OAK LEAF, OVILLA,
PALESTINE, PANTEGO, PARIS, PARKER, PECAN HILL,
PLANO, PONDER, POTTSBORO, PROSPER, PUTNAM,
QUITMAN, RED OAK, RENO (PARKER COUNTY),
RICHARDSON, RICHLAND HILLS, ROANOKE, ROBINSON,
ROCKWALL, ROSCOE, ROWLETT, SACHSE, SAGINAW,
SEAGOVILLE, SHERMAN, SNYDER, SOUTHLAKE,
SPRINGTOWN, STAMFORD, STEPHENVILLE, SULPHUR
SPRINGS, SWEETWATER, TEMPLE, TERRELL, THE
COLONY, THROCKMORTON, TYLER, UNIVERSITY PARK,
VENUS, VERNON, WACO, WATAUGA, WAXAHACHIE,
WESTLAKE, WESTWORTH VILLAGE, WHITESBORO,
WHITE SETTLEMENT, WICHITA FALLS, WOODWAY, AND
WYLIE.
By:
Y
Geoffrey ay
EXHIBIT A
TARIFF FOR GAS SERVICE
ATMOS ENERGY CORP.,
MID -TEX DIVISION
RATE SCHEDULE:
TABLE OF CONTENTS
APPLICABLE TO:
Entire System
REVISION DATE:
February 1, 2008
EFFECTIVE DATE:
PAGE: 1 OF 'I
February 1, 2008
1. UTILITY OPERATIONS
II. CITIES AND COUNTIES SERVED
III. DEFINITIONS
IV. GAS SERVICE RATES & RIDERS
Rate R - Residential Sales
Rate C - Commercial Sales
Rate I - Industrial Sales
Rate T - Transportation
Rider CT — Competitive Transport
Rider GCR - Gas Cost Recovery
Rider FF - Franchise Fee Adjustment
Rider SUR — Surcharges
Rate LEP — Line Extension Policy
Rate M - Miscellaneous Charges
Rider RA - Retention Adjustment
Rider TAX - Tax Adjustment
Rider WNA —Weather Normalization Adjustment
Rider RRM — Rate Review Mechanism
Rider CEE — Conservation and Energy Efficiency
V. SERVICE RULES AND REGULATIONS
10
EXHIBIT A
TARIFF FOR GAS SERVICE ATMOS ENERGY CORP.,
MID -TEX DIVISION
RATE SCHEDULE:
Rate R - Residential Sales
APPLICABLE TO:
Entire System
REVISION:
$1.2710 per Mof
DATE:
EFFECTIVE DATE:
PAGE: 1 OF 1
February 1, 2008
RATE R - RESIDENTIAL SALES
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
Amount
Customer Charge per Bill
$ 10.69 per month
Commodity Charge — All Mcf
$1.2710 per Mof
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.
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.
11
EXHIBIT A
TARIFF FOR GAS SERVICE ATMOS ENERGY CORP.,
Min -rFx DIVISION
RATE SCHEDULE:
Rate C - Commercial Sales
APPLICABLE TO:
Entire System
REVISION:
$ 0.7104.per.Mcf
DATE:
EFFECTIVE DATE:
PAGE: 1 OF 1
February 1, 2008
RATE C - COMMERCIAL SALES
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:
Charge I
Amount
Customer Charge per Bill
$ 20.28 per month
Com modity Charge - All Mcf .. ... ..........
$ 0.7104.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 l=ee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider
FF.
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.
12
TARIFF FOR GAS SERVICE
EXHIBIT A
ATMOS ENERGY CORP.,
MID -TEX DIVISION
RATE SCHEDULE:
Rate I - Industrial Sales
APPLICABLE TO:
Entire System
REVISION:
$ 0.2200 per MMBtu
Next 3,500 MMBtu
DATE:
EFFECTIVE DATE:
$ 0.0493 per MMBtu
PAGE.: 1 OF 2
February 1, 2008
RATE I - INDUSTRIAL SALES
Application
Applicable 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
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 bill will be calculated by adding the following Customer and MMBtu charges to the
amounts due under the riders listed below:
Charge
Amount
Customer Charge per Meter
$ 344.75 per month
First 0 MMBtu to 1,500 MMBtu
$ 0.2200 per MMBtu
Next 3,500 MMBtu
$ 0.1600 per MMBtu
All MMBtu over 5,000 MMBtu
$ 0.0493 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.
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 Platts Gas Daily published for the
applicable Gas Day in the table entitled 'Daily Price Survey."
13
EXHIBIT A
TARIFF FOR GAS SERVICE ATMOS ENERGY CORP.,
MID -TFX DIVISION
RATE SCHEDULE:
Rate I - Industrial Sales
APPLICABLE TO:
Entire System
REVISION:
DATE:
EFFECTIVE DATE:
PAGE: 2 OF 2
February 1, 2008
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.
14
EXHIBIT A
TARIFF FOR GAS SERVICE ATMOS ENERGY CORP.,
MID -TEX DIVISION
RATE SCHEDULE:
Rate T — Transportation
APPLICABLE TO:
Entire System
REVISION:
$ 0.2200 per MMBtu
Next 3,500 MMBtu
DATE:
EFFECTIVE DATE:
$ 0.0493 per MMBtu
PAGE: 1 OF 2
February 1, 2008
RATE T -TRANSPORTATION
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:
Charge
Amount
Customer Charge per Meter
$ 344,75 per month
First 0 MMBtu to 1,500 MMBtu
$ 0.2200 per MMBtu
Next 3,500 MMBtu
$ 0.1600 per MMBtu
All MMBtu over 5,000 MMBtu
$ 0.0493 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.
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.
Monthly Imbalance Fees
Customer shall pay Company the greater of (i) $0.10 per MMBtu, or (ii) 150% of the difference per MM13tu
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
1S
EXHIBIT A
TARIFF FOR GAS SERVICE ATMOS ENERGY CORP.,
MID -TEX DIVISION
RATE SCHEDULE:
Rate T - Transportation
APPLICABLE TO:
Entire System
REVISION:
DATE:
EFFECTIVE DATE:
PAGE: 2 OF 2
February 1, 2008
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.
16
EXHIBIT A
TARIFF FOR GAS SERVICE ATMOS ENERGY CORP.,
MID -TEX DIVISION
RIDER:
Rider GCR - Gas Cost Recovery
APPLICABLE TO:
Entire System
REVISION:
DATE:
EFFECTIVE DATE:
PAGE: 1 OF 3
October 1, 2008
Rider GCR - Gas Cost Recove
Applicable to Rate R, Rate C, and Rate I for all gas sales made by Company, and 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 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,
monthly volume will be calculated on an MMBtu basis and the quantities will be adjusted as necessary to
recover actual costs.
The amount due for pipeline cost (Section (b)) is determined by multiplying the Pipeline 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 will be- on an MMBtu basis and the quantities will be adjusted as
necessary to recover actual costs.
(a) Gas Cost
Method of Calculation
The monthly gas cost adjustment is calculated by 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) + Adjustments
(ADJ)
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.
RF = Calculated by dividing the difference between the Actual Gas Cost Incurred, inclusive 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.
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 NARUC 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 uncollectible and written off which remain unpaid for each month of the reconciliation
period.
17
EXHIBIT A
TARIFF FOR GAS SERVICE ATMOS ENERGY CORP.,
MID TEX DIVISION
RIDER:
Rider GCR - Gas Cost Recovery
APPLICABLE TO:
Entire System
REVISION:
.302805
Rate I - Industrial Service and Rate T - Transportation. Service
DATE:
EFFECTIVE DATE:
PAGE: 2 OF 3
October 1, 2008
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
next RF.
Atmos Energy shall file annual reports with the Commission, providing by month the following
amounts: Gas Cost Written Off. Margin Written Off, Tax and Other Written Off, Total Written
Off, Gas Cost Collected and Margin Collected.
TXS = Any statutorily imposed assessments or taxes applicable to the purchase of gas divided by
the estimated total residential, commercial, and industrial sales.
ADJ = Any surcharge or refund ordered by a regulatory authority, inclusive of interest, divided by the
estimated total residential, commercial, and industrial sales.
(b) Pipeline Cost
Method of Calculation
Each month, a Pipeline Cost Factor (PCF) is calculated 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 monthly 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 follows:
PI ellne Cost Rate Class
Allocation Factor D
Rate R - Residential Service
.634783
Rate C - Commercial Service
.302805
Rate I - Industrial Service and Rate T - Transportation. Service
.062412
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 formula:
A= R - (C _ A2), where:
R = Actual 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.
S = Estimated Mcf or MMBtu for the rate class for the current billing month_
The PCF is calculated to the nearest 0.0001 cent.
18
EXHIBIT A
TARIFF FOR GAS SERVICE ATMOS ENERGY CORP.,
MID -TEX DIVISION
RIDER:
Rider GCR - Gas Cost Recovery
APPLICABLE TO:
Entire System
REVISION:
DATE:
EFFECTIVE DATE:
PAGE: 3 OF 3
October 1, 2008
The Pipeline Cost to be billed is determined by multiplying the Mcf or MMBtu used by the
appropriate PCF. The Pipeline Cost is determined to the nearest whole cent.
19
EXHIBIT A
TARIFF FOR GAS SERVICE ATMOS ENERGY CORP.,
MID -TEX DIVISION
RIDER:
Rider WNA —Weather Normalization Adjustment
APPLICABLE TO:
Entire System
REVISION:
heat sensitive factor for the ith schedule or classification calculated as the
DATE:
EFFECTIVE DATE:
heating degree days by month for the test year by schedule or classification
PAGE: 'I OF 3
November 1, 2008
NDD —
billing cycle normal heating degree days calculated as the simple ten -year
RIDER WNA — Weather Normalization Adjustment
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.
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:
(HSFi x (NDD -ADD) )
WNAFi = Ri
Where
(BLi + (HSFi x ADD) )
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.
HSFi =
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.
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 load sales for the ith schedule or classification calculated as the y-
intercept of the linear regression of average sales per biI l (Mcf) and actual
heating degree days by month for the test year by schedule or classification
20
TARIFF FOR GAS SERVICE
ATMOS ENERGY CORP.,
MID -TEX DIVISION
RIDER:
Rider WNA — Weather Normalization Adjustment
APPLICABLE TO:
Entire System
REVISION:
Austin
1.31
DATE:
EFFECTIVE DATE:
.0669
PAGE: 2 OF 3
November 1, 2008
.0185
18.08
and weather station as part of the RRM filing.
The Weather Normalization Adjustment for the jth customer in ith rate schedule is computed as:
WNA; = WNAF; x q;,
Where q 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.
Base Use/Heat Sensitivity (HSF} Factors
Residential Commercial
Base use HSF Base use HSF
Weather Station Mcf Mcf/HDD Mcf Mcf/HDD
Abilene
1.14
.0131
8.11
.0631
Austin
1.31
.0136
18.05
.0669
Dallas
1.57
.0185
18.08
.0925
Waco
1.20
.0138
10.97
.0606
Wichita
Falls
1.27
0147
11.58
.0581
21
EXHIBIT A
TARIFF FOR GAS SERVICE ATMOS ENERGY CORP.,
MID -TEX DIVISION
RIDER:
Rider WNA —Weather Normalization Adjustment
APPLICABLE TO:
Entire System
REVISION:
DATE:
EFFECTIVE DATE:
PAGE: 3 OF 3
Nov 3, 2008
Sample "AF Calculation:
(.0131 x (30 -17) )
.1533 per Mcf = 1.2267 x
(1.14 + (.0131 x 17) }
Where
i = Residential Single Block Rate Schedule
Ri = 1.2267 per MCF (Rate R - Final Order GUD No. 9670)
HSFi — .0131 (Residential - Abilene Area)
NDD — 30 HDD (Simple ten -year average of Actual HDD for Abilene Area — 9115106
— 10114106)
ADD = 17 HDD (Actual HDD for Abilene Area — 9/15/06 — 10/14/06)
Bli = 1.14 Mcf (Residential - Abilene Area)
22
EXHIBIT A
TARIFF FOR GAS SERVICE ATMOS ENERGY CORP.,
MID -TEX DIVISION
RIDER:
Rider RRM — Rate Review Mechanism
APPLICABLE TO:
Entire Mid -Tex Division
REVISION
DATE:
EFFECTIVE DATE:
PAGE: l of S
February I, 2008
RIDER RRM — RATE REVIEW MECHANISM
Purpose:
This mechanism is designed to provide annual earnings transparency. 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 adjustment
will be authorized for an Initial Implementation Period. With the conclusion of the final rate adjustment, if
any, for the Initial implementation Period, each entity having original jurisdiction may revoke, amend, or
approve Subsequent Implementation Period(s) for, the mechanism.
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 March 1, of each year, This filing shall be
effective in electronic form where practicable. The initial filing shall be made March 31, 2008.
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. The initial Evaluation Period shall be calendar year 2007.
d) The Rate Effective Period is defined as the earlier 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 average number of connections during the Evaluation Period.
f) Initial Implementation Period is defined as the three (3) year period commencing with the Company's
filing under this mechanism for the calendar year 2007, effective October 1, 2008, and shall conclude with
the implementation of rate adjustments, if any, for the third Rate Effective Period.
g) Subsequent Implementation Period is defined as any three (3) year period after the conclusion of the
Initial Implementation Period.
h) 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.
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
23
EXHIBIT A
TARIFF FOR GAS SERVICE ATMOS ENERGY CORP.,
MID -TEX DIVISION
RIDER:
Rider RRM — Rate Review Mechanism
APPLICABLE TO:
Entire Mid -Tex Division
REVISION
DATE:
EFFECTIVE DATE:
PAGE: 2 of S
February 1, 2008
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' rate Filing with
municipalities on September 20, 2007, will include the following:
a) Company's actual gross plant in service, accumulated depreciation, accumulated deferred income
taxes, inventory, working capital, and other rate base components. 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 where
applicable. Cash working capital will be calculated using the lead/lag days approved in the Final
Order,
b) The Company's depreciation expense, operating and maintenance expense, income taxes, and
taxes other than income taxes. Depreciation rates will be those approved in the Final Order, or the
rate most recently approved. All calculation methodologies will be those approved in the Final
Order, or in the most recent order addressing the methodology. In addition, the Company shall
exclude from operating and maintenance expense the type of expenses related to employee
expense accounts disallowed in the GUD No. 9670 Final Order.
c) Return on Equity (ROE) shall be maintained at 9.6 %.
.......................
d) Cost of debt will mflect actual cost: Capital structure will e the actiia va uation erio en . ing
ratio of long -term debt and equity, with percentage equity not to exceed the percentage established
in the Final Order in G.U.D. No. 9670 (48.1% equity).
e) All applicable accounting and pro forma adjustments along with all supporting workpapers.
f) Pro -forma adjustments to update and annualize costs and revenue billing determinants for the Rate
Effective Period.
g) Pro -forma or other adjustments required to properly account for atypical, unusual, or nonrecurring
events.
h) Shared Services allocation factors may be recalculated each year based on the latest component
factors, but the methodology used will be that approved in the Final Order.
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. These
schedules shall identify the rate adjustments necessary for both a true -up of revenue for the
Evaluation Period and the setting of prospective rates for the Rate Effective Period. The net result
of these rate adjustments 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,
24
EXHIBIT A
TARIFF FOR GAS SERVICE ATMOS ENERGY CORP.,
MID -TEX DIVISION
RIDER:
Rader RRM — Rate Review Mechanism
APPLICABLE TO:
Entire Mid -Tex Division
REVISION
DATE:
EFFECTIVE DATE:
PAGE: 3 of 5
February 1, 2008
however, that neither the Residential nor the Commercial customer charges may increase more
than 20% per year.
b) If Company's earnings during the Evaluation Period exceed 9.6 ° / O return on common equity, the
Company shall calculate an adjustment to rates to refund the revenue required to achieve a return
on equity of 9.6% for the Evaluation Period, if Company's earnings during the Evaluation Period
are below 9.6% return on common equity, the Company shall calculate an adjustment in rates to
collect the additional revenue required to increase its return on equity for the Evaluation Period to
9.6 %. The Company will calculate an adjustment for the Rate Effective Period to refund or collect
this difference.
c) The Company will 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, all payroll
and compensation expense, all benefit expense, all pension expense, insurance costs, materials and
supplies, bad debt costs, all medical expense, transportation and building and lease costs for the
Rate Effective Period. Additionally, utility plant for the Rate 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,
Operating and Maintenance expenses for the Rate Effective Period, cannot increase more
than 5% per connection per year without specific identification and justification. The
beginning Operation and Maintenance expense for the 2007 RRM filing (the initial filing)
will be $161 million.
Net plant investment for the Rate Effective Period cannot increase more than 5% per
connection per year without specific identification. However, in performing a cap test to
verify compliance, Company shall exclude any changes in net plant investment
associated with federal, state, or local mandates related to safety, compliance, or road
moves.
d) The Company also 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.
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.
25
EXHIBIT A
TARIFF FOR GAS SERVICE ATMOS ENERGY CORP.,
MID -TEX DIVISION
RIDER:
Rider RRM — Rate Review Mechanism
APPLICABLE TO:
Entire Mid -Tex Division
REVISION
DATE:
EFFECTIVE DATE:
PAGE: 4 of 5
Fe bruary I, 2008
Evaluation Procedures
The regulatory authority having original jurisdiction over the Company's rates shall have ninety (90) days
to review the Company's filed schedules. The Company will be prepared to provide 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 come to agreement on, the proposed adjustments
to the Company's schedule and proposed rates, Once 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 both the Evaluation Period and 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, subject to refund.
If approved by the entity exercising original jurisdiction, the rates established pursuant to the Rate Review
Mechanism for the first Rate Effective Period shall be effective on October 1, 2008. Thereafter, rates
established pursuant to the Rate Review Mechanism for subsequent Rate Effective Periods, if approved as
provided herein, shall be effective on July 15 of each year.
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).
Notice
Notice of the annual Rate Review Mechanism filing shall be provided to all affected customers of the
Atmos Mid -Tex Division in accordance with the provisions of this section no later than forty-five (45) days
after the Company makes its annual filing pursuant to this tariff. Company may provide notice either by
mailing or otherwise delivering the notice with its billing statements. Notice by mail shall be presumed to
be complete three days after the date of deposit of the paper upon which such notice is written, enclosed in
a post -paid, properly addressed wrapper, in a post office or official depository under the care of the United
States Postal Service. 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;
26
EXHIBIT A
TARIFF FOR GAS SERVICE ATMOS ENERGY CORP.,
MID -TEX DIVISION
RIDER:
Rider RRM — Rate Review Mechanism
APPLICABLE TO:
Entire Mid -Tex Division
REVISION
DATE:
EFFECTIVE DATE:
PAGE: 5 of 5
February 1, 2008
c) the service area or areas in which the proposed rate adjustment would apply;
d) the date the proposed rate adjustment was Fled with the regulatory authority; and
c) the Company's address, telephone number and website where information concerning the
proposed rate adjustment may be obtained.
27
EXHIBIT A
TARIFF FOR GAS SERVICE ATMOS ENERGY CORP.,
MID -TEX DIVISION
RIDER:
Rider CEE — Conservation & Energy Efficiency
APPLICABLE TO:
Entire System
REVISION:
DATE:
EFFECTIVE DATE:
PAGE: 1 OF 1
February 1, 2008
RIDER CEE —Conservation & Energy Efficiency
Purpose
Atmos Energy Mid -Tex is proposing to institute a complete Conservation & Energy Efficiency program
which will offer assistance to qualified customer segments in reducing energy consumption and lowering
energy utility bills. The proposal is one where Atmos Energy shareholders will fund a percentage of the
allowable expenses incurred annually, with a customer rate component providing the remainder of the
funding. Following is a high - level, 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 will receive up to two hundred dollars ($200.00) worth of caulking,
weather - stripping, sheathing, sealing, water heater blankets, and like materials, other energy saving
devices such as clock- thermostats, set -back devices ( "covered items") from approved suppliers 1 retailers_
Company will.und..ertake efforts . to support community groups, in ow . .. ...... .
..........
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.
Eligibility
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 request 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 turns 65 years old in that year becomes eligible.
Funding
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 million 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
administration expenses will be funded from the annual approved budget.
Program audits will be conducted and the results provided to any interested party within 120 days of the
end of each program year to determine effectiveness.
28
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30
WP J-4
Page 1 of 3
ATMOS ENERGY CORP., MID -TEX DIVISION
SUMMARY PROOF OF REVENUE AT PROPOSED RATES
TEST YEAR ENDING JUNE 30, 2407
Line
Description
Total
Reference
(a)
(b)
(c)
Rate R
1
Rate Characteristics:
2
Customer Charge
$10.69
CCs
3
4
Consumption Charge ($IMcf)
$1.2710
CCs
5
6
Rider GCR Part A
$7.5520
Schedule H
7
Rider GCR Part B
$0.5990
Schedule 1
8
9
Billing Units (1):
10
Bills
17,144,647
WP
11
Total MCF
76,798,906
WP - J -1.1
12
13
Present Revenue:
14
Customer Charge
$
183,276,276
15
Consumption Charge
97,611,410
1
Base Revenue
$
280,887,686
......................... ...............................
17
Rider GCR Part A
579,988,302
18
Rider GCR Part B
46,003,459
19
Subtotal
$
906,879,447
20
Revenue Related Taxes
52,686,332
21
22
Total Proposed Revenue- Rate R
$
959,565,779
23
24
Note 1: See Billing Determinants Study for details.
31
WP J -4
Page 2 of 3
ATMOS ENERGY CORP., Mil] -TEX DIVISION
SUMMARY PROOF OF REVENUE AT PROPOSED RATES
TEST YEAR ENDING JUNE 30, 2007
Line Description Total Reference
(a) (b) (c)
Rate C
1 Rate Characteristics:
2
Customer Charge
$20.28
CGS
3
4
Consumption Charge ($IMcf)
$0.7104
CCS
5
6
Rider GCR Part A
$7.5520
Schedule H
7
Rider GCR Part B
$0.5001
Schedule I
8
9
Billing Units (1):
10
Bills
1,471,279
WP
11
Total MCF
49,665,131
WP -1.2
12
13
Present Revenue:
14
Customer Charge
$
29,837,538
15
Consumption Charge
35,282,109
16 ........
Base Revenue
$
........................................
65,119,647
...............................
17
Rider GCR Part A
375,072,987
18
Rider GCR Part B
24,837,930
19
Subtotal
$
465,030,564
20
Revenue Related Taxes
27,016,551
21
22
Total Proposed Revenue- Rate C
$
492,047,115
23
24 Note 1: See Billing Determinants Study for details.
32
WP J -4
Page 3 of 3
ATMOS ENERGY CORP., MID -TEX DIVISION
SUMMARY PROOF OF REVENUE AT PROPOSED RATES
TEST YEAR ENDING JUNE 30, 2007
Line Description Total Reference
(a) (b) (c)
Rate 1 &T
1 Rate Characteristics:
2
Customer Charge
$344.75
CCs
3
4
Block 1 ($ /MMBTU)
$0.2200
CCs
5
Block 2 ($ /MMBTU)
$0.1600
CGS
6
Block 3 ($ /MMBTU)
$0.0493
Ccs
7
8
Rider GCR Part A
$7.5520
schedule H
9
Rider GCR Part B
$0.2804
schedule i
10
11
Consumption Characteristics:
12
Block 1 (First 1,500 MMBTU)
0.21691
(1l
13
Block 2 (Next 3,500 MMBTU )
0.24651
(1)
14
Block 3 (Over 5,000 MMBTU )
0.53657
(�)
15
.................................................................................................................................................................................
16
Billing Units (1):
...............................
17
Bills
11,542
WP
18
Block 1
9,694,939
WP
19
Block 2
11,018,084
WP
20
Block 3
23,982,442
WP - J -1.3
21
Total MMBTU
44,695,465
22
23
Sales Volumes
2,858,579
WP
24
25
Present Revenue:
26
Customer Charge
$
3,979,105
27
Block 1
2,132,887
28
Block 2
1,762,893
29
Block 3
1,182,334
30
Base Revenue
$
9,057,219
31
Rider GCR Part A
21,082,128
32
Rider GCR Part B
12,534,050
33
Subtotal
$
42,673,397
34
Revenue Related Taxes
2,479,166
35
36
Total Proposed Revenue- Rate I &T
$
45,152,563
37
38 Note 1: See Billing Determinants Study for details.
33
I
TARIFF FOR GAS SERVICE ATTACHMENT B ATMOS ENERGY CORP.,
MID -TEX DIVISION
RATE SCHEDULE:
TABLE OF CONTENTS
APPLICABLE TO:
Entire System
REVISION DATE:
February 1, 2008
EFFECTIVE DATE:
PAGE: 1 OF 1
February 1, 2008
I. UTILITY OPERATIONS
II. CITIES AND COUNTIES SERVED
III. DEFINITIONS
IV. GAS SERVICE RATES & RIDERS
Rate R - Residential Sales
Rate C - Commercial Sales
Rate 1 - Industrial Sales
Rate T - Transportation
Rider CT — Competitive Transport
Rider GCR - Gas Cost Recovery
Rider FF - Franchise Fee Adjustment
Rider SUR — Surcharges
Rate LEP — Line Extension Policy
Rate M - Miscellaneous Charges
............. .
Rider RA - Retention Adjustment
Rider TAX - Tax Adjustment
Rider WNA— Weather Normalization Adjustment
Rider RRM — Rate Review Mechanism
Rider CEE — Conservation and Energy Efficiency
V. SERVICE RULES AND REGULATIONS
TARIFF FOR GAS SERVICE
ATMOS ENERGY CORP.,
MID -TEX DIVISION
RATE SCHEDULE.
Rate R - Residential Sales
APPLICABLE TO:
Entire System
REVISION:
$1.2710 per Mcf
DATE:
EFFECTIVE DATE:
PAGE: 1 OF 1
February 1, 2068
RATE R - RESIDENTIAL SALES
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
Amount
Customer Charge per Sill
$ 10.69 per month
Commodity Charge — All Mcf ....
$1.2710 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.
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 riders).
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.
TARIFF FOR GAS SERVICE
ATMOS ENERGY CORP.,
MID -TEX DIVISION
RATE SCHEDULE:
Rate C - Commercial Sales
APPLICABLE TO:
Entire System
REVISION:
$ 0.71.04.p.er Mcf . .
DATE:
EFFECTIVE DATE:
PAGE: 1 OF 1
February 1, 2008
RATE C - COMMERCIAL SALES
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:
Charge
Amount
Customer Charge per Bill
$ 20.28 per month
Commodity Charge. _All Mcf .............
$ 0.71.04.p.er 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.
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,
TARIFF FOR GAS SERVICE
ATMOS ENERGY CORP.,
MID -TEX DIVISION
RATE SCHEDULE:
Rate I - Industrial Sales
APPLICABLE TO:
Entire System
REVISION:
$ 0.2200 per MMBtu
Next 3,500 MMBtu
DATE:
EFFECTIVE DATE:
$ 0.0493 per MMBtu
PAGE: 1 OF 2
February 1, 2008
RATE I _ INDUSTRIAL SALES
Application
Applicable 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
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 bill will be calculated by adding the following Customer and MMBtu charges to the
amounts due under the riders listed below:
.........................................................................................
Charge
...............................
Amount
Customer Charge per Meter
$ 344.75 per month
First 0 MMBtu to 1,500 MMBtu
$ 0.2200 per MMBtu
Next 3,500 MMBtu
$ 0.1600 per MMBtu
All MMBtu over 5,000 MMBtu
$ 0.0493 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.
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."
TARIFF FOR GAS SERVICE
ATMOS ENERGY CORP.,
MID -TEX DIVISION
RATE SCHEDULE
Rate I - Industrial Sales
APPLICABLE TO:
Entire System
REVISION:
DATE:
EFFECTIVE DATE:
PAGE: 2 OF 2
February 1, 2008
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 1, 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.
TARIFF FOR GAS SERVICE
ATMOS ENERGY CORP.,
MID -TEX DIVISION
RATE SCHEDULE:
Rate T — Transportation
APPLICABLE TO:
Entire System
REVISION;
$ 0.2200 per MMBtu
Next 3,500 MMBtu
DATE:
EFFECTIVE DATE:
$ 0.0493 per MMBtu
PAGE: 1 OF 2
February 1, 2008
RATE T - TRANSPORTATION
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 NIMBtu charges to the amounts
and quantities due under the riders listed below:
Charge
Amount
Customer Charge per Meter
$ 344.75 per month
First 0 MMBtu to 1,500 MMBtu
$ 0.2200 per MMBtu
Next 3,500 MMBtu
$ 0.9600 per MMBtu
All MMBtu over 5,000 MMBtu
$ 0.0493 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 l=ee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider
FF.
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.
Monthly Imbalance Fees
Customer shall pay Company the greater of (i) $0.10 per MMBtu, or (il) 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
TARIFF FOR GAS SERVICE ATMOS ENERGY CORP.,
IVIID -TEX DIVISION
RATE SCHEDULE:
Rate T - Transportation
APPLICABLE TO:
Entire System
REVISION:
DATE:
EFFECTIVE DATE:
PAGE: 2 OF 2
February 1, 2008
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 Plaits 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 Plaits 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 recluiired.
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.
TARIFF FOR GAS SERVICE
ATMOS ENERGY CORP.,
MID -TEX DIVISION
RIDER:
Rider GCR - Gas Cost Recovery
APPLICABLE TO:
Entire System
REVISION
DATE:
EFFECTIVE DATE:
PAGE: 1 OF 3
October 1, 2008
Rider GCR - Gas Cost Recove
Applicable to Rate R, Rate C, and Rate I for all gas sales made by Company, and 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 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,
monthly volume will be calculated on an MMBtu basis and the quantities will be adjusted as necessary to
recover actual costs.
The amount due for pipeline cost (Section (b)) is determined by multiplying the Pipeline Cost Factor
(PCF) by the Customer's monthly volume. For Customers receiving service under Rate R and Rate G
monthly volume will be calculated on an Mcf basis. For Customers receiving service under Rate I and
Rate T, monthly volume will be calculated on an MMBtu basis and the quantities will be adjusted as
necessary to recover actual costs.
(a).Gas Cost.
Method of Calculation
The monthly gas cost adjustment is calculated by 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) + Adjustments
(ADJ)
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.
RF = Calculated by dividing the difference between the Actual Gas Cost Incurred, inclusive 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.
Actual Gas Cost Incurred m The sum of the costs booked in Atmos Energy Corp., Mid -Tex Division
account numbers 800 through 813 and 858 of the NARUC 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 uncollectible and written off which remain unpaid for each month of the reconciliation
period.
TARIFF FOR GAS SERVICE
ATMOS ENERGY CORP.,
MID -TEX DIVISION
RIDER:
Rider GCR - Gas Cost Recovery
APPLICABLE TO:
Entire System
REVISION:
302805
Rate I - Industrial Service and Rate T - Transportation Service
DATE:
EFFECTIVE DATE:
PAGE: 2 OF 3
October 1, 2008
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
next RF.
Atmos Energy shall file annual reports with the Commission, providing by month the following
amounts: Gas Cost Written Off. Margin Written Off, Tax and Other Written Off, Total Written
Off, Gas Cost Collected and Margin Collected.
TXS = Any statutorily imposed assessments or taxes applicable to the purchase of gas divided by
the estimated total residential, commercial, and industrial sales.
ADJ = Any surcharge or refund ordered by a regulatory authority, inclusive of interest, divided by the
estimated total residential, commercial, and industrial sales.
(b) Pipeline Cost
Method of Calculation
Each month, a Pipeline Cost Factor (PCF) is calculated separately for each Pipeline Cost Rate Class
listed below. The formula for the PCF is:
PCF = PP 1 S, where:
PP = (P - A) x D, where:
P = Estimated monthly 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 follows:
Pi eline Cost Rate Class
Allocation Factor f D
Rate R - Residential Service
.634783
Rate C - Commercial Service
302805
Rate I - Industrial Service and Rate T - Transportation Service
.062412
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 formula:
A = R - (C - A2), where:
R = Actual 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.
S = Estimated Mcf or MMBtu for the rate class for the current billing month.
The PCF is calculated to the nearest 0.0001 cent.
TARIFF FOR GAS SERVICE
ATMOS ENERGY CORP.,
MID -TEX DIVISION
RIDER:
Rider GCR - Gas Cast Recovery
APPLICABLE TO:
Entire System
REVISION:
DATE:
EFFEC'T'IVE DATE:
PAGE: 3 OF 3
October 1, 2008
The Pipeline Cost to be billed is determined by multiplying the Mcf or IVIMBtu used by the
appropriate PCF. The Pipeline Cost is determined to the nearest whole cent.
TARIFF FOR GAS SERVICE
ATMOS ENERGY CORP.,
MID -TEX DIVISION
RIDER:
Rider WNA —Weather Normalization Adjustment
APPLICABLE TO:
Entire System
REVISION:
DATE:
EFFECTIVE DATE:
PAGE: 1 OF 3
November 1, 2008
RIDER WNA — Weather Normalization_Adiustment
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.
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:
(HSFi x (NDD -ADD) )
WNAFi = Ri
(BLi + (HSFi x ADD) }
Where
i —
WNAFi =
Ri =
any particular Rate Schedule or billing classification within any such
particular Rate Schedule that contains more than one billing classification
Weather Normalization Adjustment Factor for the ith rate schedule or
classification expressed in cents per Mcf
base rate of temperature sensitive sales for the A schedule or
classification approved by the entity exercising original jurisdiction.
HSFi = 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.
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 load 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
TARIFF FOR GAS SERVICE
ATMOS ENERGY CORP.,
MID TEX DIVISION
RIDER:
Rider WNA — Weather Normalization Adjustment
APPLICABLE TO:
Entire System
REVISION:
Austin
1.31
DATE:
EFFECTIVE DATE:
.0669
PAGE: 2 OF 3
November 1, 2008
.0185
18.08
and weather station as part of the RRM filing.
The Weather Normalization Adjustment for the jth customer in ith rate schedule is computed as:
WNA, = WNAFi x qij
Where qij 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.
Base Use/Heat Sensitivity HSF Factors
Residential Commercial
Base use HSF Base use HSF
Weather Station Mcf Mcf/HDD Mcf Mcf/HDD
Abilene
1.14
.0131
8.11
.0631
Austin
1.31
.0136
18.05
.0669
Dallas
1.57
.0185
18.08
.0925
Waco
1.20
0138
10.97
.0606
Wichita
Falls
1.27
.0147
11.58
.0581
TARIFF FOR GAS SERVICE
ATMOS ENERGY CORP.,
MID -TEX DIVISION
RIDER:
Rider WNA -- Weather Normalization Adjustment
APPLICABLE TO:
Entire System
REVISION:
DATE:
EFFECTIVE DATE:
PAGE: 3 OF 3
November 1, 2008
Sample WNAF Calculation:
(.0131 x (30 -17) )
1533 per Mcf = 1.2267 x
(1.14 + (.0131 x 17) }
Where
i = Residential Single Block Rate Schedule
Ri — 1.2267 per MCF (Rate R - Final Order GUD No. 9670)
HSFi = 0131 (Residential -Abilene Area)
NDD 30 HDD (Simple ten -year average of Actual HDD for Abilene Area — 9/15106
- .10114106)
ADD = 17 HDD (Actual HDD for Abilene Area --- 9115106 — 10114106)
Bli — 1.14 Mcf (Residential - Abilene Area)
TARIFF FOR GAS SERVICE ATMOS ENERGY CORP.,
MID -TEX DIVISION
RIDER:
Rider R -- Rat Review Mechanism
APPLICABLE TO:
Entire Mid -Tex Division
REVISION
DATE:
EFFECTIVE DATE:
PAGE: I of 5
February 1, 2008
RIDER RRM — RATE REVIEW MECHANISM
Pu ose:
This mechanism is designed to provide annual earnings transparency. 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 adjustment
will be authorized for an Initial Implementation Period. With the conclusion of the final rate adjustment, if
any, for the Initial Implementation Period, each entity having original jurisdiction may revoke, amend, or
approve Subsequent Implementation Period(s) for, the mechanism.
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 March 1, of each year. This filing shall be
effective in electronic form where practicable. The initial filing shall be made March 31, 2008.
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. The initial Evaluation Period shall be calendar year 2GOT
d) The Rate Effective Period is defined as the earlier 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 average number of connections during the Evaluation Period.
f) Initial Implementation Period is defined as the three (3) year period commencing with the Company's
filing under this mechanism for the calendar year 2007, effective October 1, 2008, and shall conclude with
the implementation of rate adjustments, if any, for the third Rate Effective Period.
g) Subsequent implementation Period is defined as any three (3) year period after the conclusion of the
Initial Implementation Period.
h) 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.
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
TARIFF FOR GAS SERVICE ATMOS ENERGY CORP.,
MID -TEX DIVISION
RIDER:
Rider RRM — Rate Review Mechanism
APPLICABLE TO:
Entire Mid -Tex Division
REVISION
DATE:
EFFECTIVE DATE:
PAGE: 2 of 5
February 1, 2008
_
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' rate ding with
municipalities on September 20, 2007, will include the following:
a) Company's actual gross plant in service, accumulated depreciation, accumulated deferred income
taxes, inventory, working capital, and other rate base components. 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 where
applicable. Cash working capital will be calculated using the lead/lag days approved in the Final
Order.
b) The Company's depreciation expense, operating and maintenance expense, income taxes, and
taxes other than income taxes. Depreciation rates will be those approved in the Final Order, or the
rate most recently approved. All calculation methodologies will be those approved in the Final
Order, or in the most recent order addressing the methodology. In addition, the Company shall
exclude from operating and maintenance expense the type of expenses related to employee
expense accounts disallowed in the GUD No. 9670 Final Order.
c) Return on Equity (ROE) shall be maintained at 9.6 %.
d) Cost of debt will reflect actual cost. Capital structure will be the actual Evaluation Period ending
ratio of long -term debt and equity, with percentage equity not to exceed the percentage established
in the Final Order in G.U.D. No. 9670 (48.1% equity).
e) All applicable accounting and pro forma adjustments along with all supporting workpapers.
fj Pro -forma adjustments to update and annualize costs and revenue billing determinants for the Rate
Effective Period.
g) Pro -forma or other adjustments required to properly account for atypical, unusual, or nonrecurring
events,
h) Shared Services allocation factors may be recalculated each year based on the latest component
factors, but the methodology used will be that approved in the Final Order.
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. These
schedules shall identify the rate adjustments necessary for both a true -up of revenue for the
Evaluation Period and the setting of prospective rates for the Rate Effective Period. The net result
of these rate adjustments 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 Weatber Normalization Adjustment (WNA) Rider. Provided,
TARIFF FOR GAS SERVICE ATMOS ENERGY CORP.,
MID -TEX DIVISION
RIDER:
Rider RRM -- Rate Review Mechanism
APPLICABLE TO:
Entire Mid -Tex Division
REVISION
DATE:
EFFECTIVE DATE:
PAGE: 3 of 5
February 1, 2008
however, that neither the Residential nor the Commercial customer charges may increase more
than 20% per year.
b) if Company's earnings during the Evaluation Period exceed 9.6% return on common equity, the
Company shall calculate an adjustment to rates to refund the revenue required to achieve a return
on equity of 9.6% for the Evaluation Period. If Company's earnings during the Evaluation Period
are below 9.6% return on common equity, the Company shall calculate an adjustment in rates to
collect the additional revenue required to increase its return on equity for the Evaluation Period to
9.6 %. The Company will calculate an adjustment for the Rate Effective Period to refund or collect
this difference.
c) The Company will 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, all payroll
and compensation expense, all benefit expense, all pension expense, insurance costs, materials and
supplies, bad debt costs, all medical expense, transportation and building and lease costs for the
Rate Effective Period. Additionally, utility plant for the Rate 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 for the Rate Effective Period, cannot increase more
than 5% per connection per year without specific identification and justification, The
beginning Operation and Maintenance expense for the 2007 RRM filing (the initial filing)
will be $161 million.
2. Net plant investment for the Rate Effective Period cannot increase more than 5% per
connection per year without specific identification. However, in performing a cap test to
verify compliance, Company shall exclude any changes in net plant investment
associated with federal, state, or local mandates related to safety, compliance, or road
moves,
d) The Company also 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.
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.
TARIFF FOR GAS SERVICE ATMOS ENERGY CORP.,
MID -TEX DIVISION
RIDER:
Rider RRM — Rate Review Mechanism
APPLICABLE TO:
Entire Mid -Tex Division
REVISION
DATE:
EFFECTIVE DATE:
PAGE: 4 of 5
February I, 2008
Evaluation Procedures
The regulatory authority having original jurisdiction over the Company's rates shall have ninety (90) days
to review the Company's filed schedules. The Company will be prepared to provide 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 come to agreement on, the proposed adjustments
to the Company's schedule and proposed rates. Once 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 both the Evaluation Period and 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, subject to refund.
......... ............... ................ ........................................................................................................................................................................................... ...............................
If approved by the entity exercising original jurisdiction, the rates established pursuant to the Rate Review
Mechanism for the first Rate Effective Period shall be effective on October 1, 2008, Thereafter, rates
established pursuant to the Rate Review Mechanism for subsequent Rate Effective Periods, if approved as
provided herein, shall be effective on July 15 of each year.
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).
Notice
Notice of the annual Rate Review Mechanism filing shall be provided to all affected customers of the
Atmos Mid -Tex Division in accordance with the provisions of this section no later than forty-five (45) days
after the Company makes its annual filing pursuant to this tariff. Company may provide notice either by
mailing or otherwise delivering the notice with its billing statements. Notice by mail shall be presumed to
be complete three days after the date of deposit of the paper upon which such notice is written, enclosed in
a post -paid, properly addressed wrapper, in a post office or official depository under the care of the United
States Postal Service. 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;
TARIFF FOR GAS SERVICE
ATMOS ENERGY CORP.,
MID -TEX DIVISION
RIDER:
Rider RRM — Rate Review Mechanism
APPLICABLE TO:
Entire Mid -Tex Division
REVISION
DATE:
EFFECTIVE DATE:
PAGE: 5 of 5
February 1, 2008
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.
TARIFF FOR GAS SERVICE
ATMOS ENERGY CORP.,
MID -TEX DIVISION
RIDER:
Rider CEE — Conservation & Energy Efficiency
APPLICABLE TO:
Entire System
REVISION:
DATE:
EFFECTIVE DATE:
PAGE: 1 OF 1
February 1, 2008
RIDER CEE — Conservation & Energy Efficiency
Purpose
Atmos Energy Mid -Tex is proposing to institute a complete Conservation & Energy Efficiency program
which will offer assistance to qualified customer segments in reducing energy consumption and lowering
energy utility bills. The proposal is one where Atmos Energy shareholders will fund a percentage of the
allowable expenses incurred annually, with a customer rate component providing the remainder of the
funding. Following is a high - level, 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 will receive up to two hundred dollars ($200.00) worth of caulking,
weather - stripping, sheathing, sealing, water heater blankets, and like materials, other energy saving
devices such as clock - thermostats, set -back devices ( "covered items ") from approved suppliers 1 retailers.
Company will undertake efforts to enlist support from community groups, including 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.
EiiaibilitK
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 request eligibility through ATM tali center or web -site.
Customer provides primary SSN which is verified through Social Security Administration. And account
holder that is or turns 65 years old in that year becomes eligible.
Funding
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 boing capped at the two million 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
administration expenses will be funded from the annual approved budget.
Program audits will be conducted and the results provided to any interested party within 120 days of the
end of each program year to determine effectiveness.