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Home My WebLink AboutR21-528245 RESOLUTION NO. R21-528 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PLAINVIEW, TEXAS, APPROVING A NEGOTIATED SETTLEMENT BETWEEN THE EXECUTIVE COMMITTEE OF CITIES SERVED BY ATMOS WEST TEXAS ("CITIES") AND ATMOS ENERGY CORP., WEST TEXAS DIVISION REGARDING THE COMPANY'S 2021 RATE REVIEW MECHANISM FILING; DECLARING EXISTING RATES TO BE UNREASONABLE; ADOPTING TARIFFS THAT REFLECT RATE ADJUSTMENTS CONSISTENT WITH THE NEGOTIATED SETTLEMENT; FINDING THE RATES TO BE SET BY THE ATTACHED SETTLEMENT TARIFFS TO BE JUST AND REASONABLE AND IN THE PUBLIC INTEREST; APPROVING AN ATTACHED EXHIBIT ESTABLISHING A BENCHMARK FOR PENSIONS AND RETIREE MEDICAL BENEFITS; APPROVING AN ATTACHED EXHIBIT REGARDING AMORTIZATION OF REGULATORY LIABILITY; REQUIRING THE COMPANY TO REIMBURSE CITIES' REASONABLE RATEMAKING EXPENSES; DETERMINING THAT THIS RESOLUTION WAS PASSED IN ACCORDANCE WITH THE REQUIREMENTS OF THE TEXAS OPEN MEETINGS ACT; ADOPTING A SAVINGS CLAUSE; DECLARING AN EFFECTIVE DATE; AND REQUIRING DELIVERY OF THIS RESOLUTION TO THE COMPANY AND THE CITIES' LEGAL COUNSEL. WHEREAS, the City of Plainview, Texas ("City") is a gas utility customer of Atmos Energy Corp., West Texas Division ("Atmos West Texas" or "Company"), and a regulatory authority with an interest in the rates and charges of Atmos West Texas; and WHEREAS, the City is a member of Cities Served by Atmos West Texas ("Cities"), a coalition of similarly -situated cities served by Atmos West Texas that have joined together to facilitate the review of, and response to, natural gas issues affecting rates charged in the Atmos West Texas service area; and WHEREAS, Cities and the Company worked collaboratively to develop a new Rate Review Mechanism ("RRM") tariff that allows for an expedited rate review process by Cities as a substitute to the Gas Reliability Infrastructure Program ("GRIP") process Resolution R21-528 Page 1 of 5 246 instituted by the Legislature, and that will establish rates for Cities based on the system- wide cost of serving the Atmos West Texas service area; and and WHEREAS, the RRM tariff was adopted by the City in a rate ordinance in 2018; WHEREAS, on about April 1, 2021, Atmos West Texas filed its 2021 RRM rate request with Cities based on a test year ending December 31, 2020; and WHEREAS, Cities coordinated its review of the Atmos West Texas 2021 RRM filing through its Executive Committee, assisted by Cities' attorneys and consultants, to resolve issues identified in the Company's RRM filing; and WHEREAS, the Executive Committee, as well as Cities' counsel and consultants, recommends that Cities approve an increase in base rates for Atmos West Texas of $152,000 with an Effective Date of December 1, 2021; and WHEREAS, the attached tariffs (Exhibit A) implementing new rates are consistent with the recommendation of the Cities' Executive Committee, are agreed to by the Company, and are just, reasonable, and in the public interest; and WHEREAS, the settlement agreement sets a new benchmark for pensions and retiree medical benefits (Exhibit B) and WHEREAS, the settlement agreement establishes an amortization schedule for regulatory liability (Exhibit C); and WHEREAS, the RRM Tariff contemplates reimbursement of Cities' reasonable expenses associated with RRM applications; 1 Resolution R21-528 Page 2 of 5 247 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PLAINVIEW, TEXAS: Section 1. That the findings set forth in this Resolution are hereby in all things approved. Section 2. That, without prejudice to future litigation of any issue identified by Cities, the City Council finds that the settled amount of an increase in revenues of $152,000 for Cities represents a comprehensive settlement of gas utility rate issues affecting the rates, operations, and services offered by Atmos West Texas within the municipal limits arising from Atmos West Texas' 2021 RRM filing, is in the public interest, and is consistent with the City's authority under Section 103.001 of the Texas Utilities Code. Section 3. That the existing rates for natural gas service provided by Atmos West Texas are unreasonable. The new tariffs, attached hereto and incorporated herein as Exhibit A, are just and reasonable, and are designed to allow Atmos West Texas to recover annually an additional $152,000 in revenue from customers in Cities, over the amount allowed under currently approved rates. Such tariffs are hereby adopted. Section 4. That the ratemaking treatment for pensions and retiree medical benefits in Atmos West Texas' next RRM filing shall be as set forth on Exhibit B, attached hereto and incorporated herein. Section 5. That subject to any future settlement or decision regarding the balance of Excess Deferred Income Tax to be refunded to ratepayers, the amortization of regulatory liability shall be consistent with the schedule found in Exhibit C, attached hereto and incorporated herein. Resolution R21-528 Page 3 of 5 Section 6. That Atmos West Texas shall reimburse the reasonable ratemaking expenses of the Cities in processing the Company's 2021 RRM filing. Section 7. That to the extent any resolution or ordinance previously adopted by the Council is inconsistent with this Resolution, it is hereby repealed. Section 8. That the meeting at which this Resolution was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. Section 9. That if any one or more sections or clauses of this Resolution is adjudged to be unconstitutional or invalid, such judgment shall not affect, impair, or invalidate the remaining provisions of this Resolution, and the remaining provisions of the Resolution shall be interpreted as if the offending section or clause never existed. Section 10. That consistent with the City Ordinance that established the RRM process, this Resolution shall become effective from and after its passage with rates authorized by attached tariffs to be effective for bills rendered on or after December 1, 2021. Section 11. That a copy of this Resolution shall be sent to Atmos West Texas, care of Philip Littlejohn, Vice President of Rates and Regulatory Affairs, West Texas Division, 6606 66th Street, Lubbock, Texas 79424, and Thomas Brocato, General Counsel to Cities, at Lloyd Gosselink Rochelle & Townsend, P.C., 816 Congress Avenue, Suite 1900, Austin, Texas 78701. 1 Resolution R21-528 Page 4 of 5 249 1 0 PASSED AND APPROVED this 14th day of September, 2021. ATTEST: APPROVED AS TO FORM: City Secretary City Attorney Resolution R21-528 Page 5 of 5 250 Exhibit A to 2021 RRM Resolution or Ordinance Tariffs Effective December 1, 2021 1 H P-� ATTACHMENT 251 WEST TEXAS DIVISION ATMOS ENERGY CORPORATION RATE SCHEDULE: I RESIDENTIAL GAS SERVICE APPLICABLE TO: I WEST TEXAS CITIES SERVICE AREA — Inside City Limits (ICL) EFFECTIVE DATE: I Bills Rendered on and after 12/01/2021 Availability This schedule is applicable to general use by Residential customers for heating, cooking, refrigeration, water heating and other similar type uses. This schedule is not available for service to premises with an alternative supply of natural gas. Monthly Rate Charge Amount Customer Charge $ 17.52 Consumption Charge $ 0.27674 per Ccf The West Texas Division Gas Cost Adjustment Rider applies to this schedule. The West Texas Division Weather Normalization Adjustment Rider applies to this schedule. The West Texas Division Rider TAX applies to this schedule. The West Texas Division Rider FF applies to this schedule. The West Texas Division Rider RRM applies to this schedule. Miscellaneous Charges: Plus an amount for miscellaneous charges calculated in accordance with the applicable rider(s). 1 252 ATTACHMENT WEST TEXAS DIVISION ATMOS ENERGY CORPORATION RATE SCHEDULE: COMMERCIAL GAS SERVICE APPLICABLE TO: WEST TEXAS CITIES SERVICE AREA — Inside City Limits (ICL) EFFECTIVE DATE: Bills Rendered on and after 12/01/2021 Availability This schedule is applicable to Commercial customers, including hospitals and churches, for heating, cooking, refrigeration, water heating and other similar type uses. This schedule is not available for service to premises with an alternative supply of natural gas. Monthly Rate Charge Amount Customer Charge $ 51.61 Consumption Charge $ 0.16312 per Ccf The West Texas Division Gas Cost Adjustment Rider applies to this schedule. The West Texas Division Weather Normalization Adjustment Rider applies to this schedule. The West Texas Division Rider TAX applies to this schedule. The West Texas Division Rider FF applies to this schedule. The West Texas Division Rider RRM applies to this schedule. Miscellaneous Charges: Plus an amount for miscellaneous charges calculated in accordance with the applicable rider(s). 1 1 253 ATTACHMENT WEST TEXAS DIVISION ATMOS ENERGY CORPORATION RATE SCHEDULE: INDUSTRIAL GAS SERVICE APPLICABLE TO: WEST TEXAS CITIES SERVICE AREA — Inside City Limits (ICL) EFFECTIVE DATE: Bills Rendered on and after 12/01/2021 Availability This schedule is applicable to the sales to any industrial or commercial customer whose predominant use of natural gas is other than space heating, cooking, water heating or other similar type uses. Service under this schedule is available to eligible customers following execution of a contract specifying the maximum hourly load. This schedule is not available for service to premises with an alternative supply of natural gas. Monthly Rate Charge Amount Customer Charge $ 530.85 Consumption Charge $ 0.10081 per Ccf The West Texas Division Gas Cost Adjustment Rider applies to this schedule. The West Texas Division Rider TAX applies to this schedule. The West Texas Division Rider FF applies to this schedule. The West Texas Division Rider RRM applies to this schedule. Miscellaneous Charges: Plus an amount for miscellaneous charges calculated in accordance with the applicable rider(s). 254 ATTACHMENT WEST TEXAS DIVISION ATMOS ENERGY CORPORATION RATE SCHEDULE: PUBLIC AUTHORITY GAS SERVICE APPLICABLE TO: WEST TEXAS CITIES SERVICE AREA — Inside City Limits (ICL) EFFECTIVE DATE: Bills Rendered on and after 12/01/2021 Availability This schedule is applicable to general use by Public Authority type customers, including public schools, for heating, cooking, refrigeration, water heating and other similar type uses. This schedule is not available for service to premises with an alternative supply of natural gas. Monthly Rate Charge Amount Customer Charge $ 145.17 Consumption Charge $ 0.14227 per Ccf The West Texas Division Gas Cost Adjustment Rider applies to this schedule. The West Texas Division Weather Normalization Adjustment Rider applies to this schedule. The West Texas Division Rider TAX applies to this schedule. The West Texas Division Rider FF applies to this schedule. The West Texas Division Rider RRM applies to this schedule. Miscellaneous Charges: Plus an amount for miscellaneous charges calculated in accordance with the applicable rider(s). r-� 1 ATTACHMENT 255 1 1 WEST TEXAS DIVISION ATMOS ENERGY CORPORATION RATE SCHEDULE: I TRANSPORTATION SERVICE APPLICABLE TO: I WEST TEXAS CITIES SERVICE AREA — Inside City Limits (ICL) EFFECTIVE DATE: I Bills Rendered on and after 12/01/2021 Application Applicable, in the event that Company has entered into a Transportation Agreement, to a customer directly connected to the Atmos Energy Corp., West Texas Division Distribution System 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 with an estimated annual usage greater than 100,000 Ccf per 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 bill will be calculated by adding the following Customer and Ccf charges to the amounts and quantities due under the riders listed below: Charge Amount Customer Charge per Meter $ 530.85 per month Consumption Charge $ 0.10081 per Ccf Upstream Transportation Cost Recovery: The customer is responsible for all upstream transportation costs. Retention Adjustment: Plus a quantity of gas equal to the Company's most recently calculated financial L&U percentage for the twelve months ended September multiplied by the gas received into Atmos Energy Corporation's West Texas Division for transportation to the customer. Franchise Fee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider FF. Rider FF is only applicable to customers inside the corporate limits of any incorporated municipality. Tax Adjustment: Plus an amount for tax calculated in accordance with Rider TAX. Surcharges: Plus an amount for surcharges calculated in accordance with the applicable rider(s). Miscellaneous Charges: Plus an amount for miscellaneous charges calculated in accordance with the applicable rider(s). The West Texas Division Rider RRM applies to this schedule. Conversions: Units may be converted from Ccf to Mcf or Mmbtu as necessary to comply with the underlying transportation agreement. 256 ATTACHMENT WEST TEXAS DIVISION ATMOS ENERGY CORPORATION RATE SCHEDULE: TRANSPORTATION SERVICE APPLICABLE TO: WEST TEXAS CITIES SERVICE AREA — Inside City Limits (ICL) EFFECTIVE DATE: Bills Rendered on and after 12/01/2021 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 a monthly imbalance fee at the end of each month as defined in the applicable Transportation Agreement, 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 "Index" price reported for the month of delivery in Inside FERC's Gas Market Report under the heading "West Texas Waha". Replacement Index In the event the "Index" price reported for the month of delivery in Inside FERC's Gas Market Report under the heading "West Texas Waha" 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 transportation service under this tariff, customer must have the type of meter, instrumentation, and communication required by Company. Customer must pay Company all costs associated with the acquisition and installation of the required equipment. 1 1 257 1 Exhibit B to 2021 RRM Resolution or Ordinance Schedule for Pensions and Retiree Medical Benefits 1 1 Line (a) ATMOS ENERGY CORPORATION WEST TEXAS CITIES ("WTX CITIES") RATE REVIEW MECHANISM PENSIONS AND RETIREE MEDICAL BENEFITS FOR APPROVAL TEST YEAR ENDING DECEMBER 31, 2020 1 Proposed Benefits Benchmark - Fiscal Year 2021 Willis Towers Watson Report 2 Allocation Factor 3 Proposed Benefits Benchmark Costs (Excluding Removed Cost Centers) Allocated to West Texas (Ln 1 x Ln 2) 4 O&M and Capital Factor 5 Proposed Benefits Benchmark Costs To Approve (Excluding Removed Cost Centers) (Ln 3 x Ln 4) 6 7 8 Summary of Expense Costs to Approve: 9 10 O&M Expense Factor (WP_F-2.3, Ln 2) 11 12 Total Pension Account Plan 13 Total Post -Employment Benefit Plan 14 Total Supplemental Executive Benefit Plan 15 Total (Sum Ln 12 through Ln 14) Shared Services Post - Pension Employment Pension Account Plan Benefit Plan Account Plan (b) (c) (d) WTX Post- Supplemental Employment Executive Benefit Plan Benefit Plan $ 2,884,473 $ 4,852,048 $ 1,072,565 $ 1,678,463 $ 58,565 7.47% 7.47% 96.59% 96.59% 96.59% $ 215,394 $ 362,320 $ 1,035,991 $ 1,621,227 $ 56,568 100.00% 100.00% 100.00% 100.00% 100.00% Total $ 215,394 $ 362,320 $ 1,035,991 $ 1,621,227 $ 56,568 $ 3,291,500 69.20% 69.20% 51.03% 51.03% 100.00% $ 149,063 $ 528,658 $ 677,721 $ 250,743 $ 827,300 1,078,043 $ 56,568 56,568 $ 149,063 $ 250,743 $ 528,658 $ 827,300 $ 56,568 $ 1,812,332 N Cn 00 WP F-2.3.1 _ =ge 1 of 1 259 1 Exhibit C to 2021 RRM Resolution or Ordinance Schedule for Amortization of Regulatory Liability 1 1 ATMOS ENERGY CORPORATION WEST TEXAS CITIES ("WTX CITIES") RATE REVIEW MECHANISM AMORTIZATION OF REGULATORY LIABILITY TEST YEAR ENDING DECEMBER 31, 2020 N O O Line No. Year Ended Dec. 31 Beginning Protected Balance Protected Amortization Ending Protected Balance Beginning Unprotected Balance Unprotected Amortization Ending Unprotected Balance Total Protected & Unprotected Amortization Total Protected & Unprotected Balance (a) (b) (c) (d) (e) (f) (g) (h) (i) 1 2017 $ 4,520,509 $ 54,690,095 $ 59,210,604 2 2018 $ 4,520,509 $ 45,205 4,475,304 $ 54,690,095 $ 616,780 54,073,315 $ 661,985 58,548,619 3 2019 4,475,304 180,820 4,294,484 54,073,315 2,418,047 51,655,269 2,598,867 55,949,752 4 2020 4,294,484 180,820 4,113,663 51,655,269 2,262,557 49,392,712 2,443,377 53,506,375 5 2021 4,113,663 316,436 3,797,228 49,392,712 3,888,027 45,504,685 4,204,463 49,301,912 6 2022 3,797,228 180,820 3,616,407 45,504,685 9,579,934 35,924,751 9,760,754 39,541,158 7 2023 3,616,407 180,820 3,435,587 35,924,751 9,579,934 26,344,817 9,760,754 29,780,404 8 2024 3,435,587 180,820 3,254,766 26,344,817 9,579,934 16,764,884 9,760,754 20,019,650 9 2025 3,254,766 180,820 3,073,946 16,764,884 9,579,934 7,184,950 9,760,754 10,258,896 10 2026 3,073,946 180,820 2,893,126 7,184,950 7,184,950 0 7,365,771 2,893,126 11 2027 2,893,126 180,820 2,712,305 180,820 2,712,305 12 2028 2,712,305 180,820 2,531,485 180,820 2,531,485 13 2029 2,531,485 180,820 2,350,665 180,820 2,350,665 14 2030 2,350,665 180,820 2,169,844 180,820 2,169,844 15 2031 2,169,844 180,820 1,989,024 180,820 1,989,024 16 2032 1,989,024 180,820 1,808,204 180,820 1,808,204 17 2033 1,808,204 180,820 1,627,383 180,820 1,627,383 18 2034 1,627,383 180,820 1,446,563 180,820 1,446,563 19 2035 1,446,563 180,820 1,265,743 180,820 1,265,743 20 2036 1,265,743 180,820 1,084,922 180,820 1,084,922 21 2037 1,084,922 180,820 904,102 180,820 904,102 22 2038 904,102 180,820 723,281 180,820 723,281 23 2039 723,281 180,820 542,461 180,820 542,461 24 2040 542,461 180,820 361,641 180,820 361,641 25 2041 361,641 180,820 180,820 180,820 180,820 26 2042 180,820 180,820 - 180,820 - 27 28 Notes: 29 1. The annual amortization of the protected balance is a 25 year recovery period based on the Reverse South Georgia Method. The annual amortization of the unprotected balance is 5 years. 30 2. The Regulatory Liability is recorded to FERC Accounts 242 and 253, Sub Acct 27909. 31 3. This is the final WTX liability balance after the filing of Fiscal Year 2018 tax return. WP B-6.1 Iof1