2021-39 - R - Atmos Energy ACSC Rate Review Mechanism 08.10.21 TOWN OF PROSPER, TEXAS RESOLUTION NO. 2021-39
A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF PROSPER,
TEXAS, APPROVING A NEGOTIATED SETTLEMENT BETWEEN THE ATMOS
CITIES STEERING COMMITTEE ("ACSC") AND ATMOS ENERGY CORP.,
MID-TEX 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 ACSC'S 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 ACSC'S LEGAL COUNSEL.
WHEREAS, the Town of Prosper, Texas ("Town") is a gas utility customer of Atmos
Energy Corp., Mid-Tex Division ("Atmos Mid-Tex" or "Company"), and a regulatory authority with
an interest in the rates, charges, and services of Atmos Mid-Tex; and
WHEREAS, the Town is a member of the Atmos Cities Steering Committee ("ACSC"), a
coalition of similarly-situated cities served by Atmos Mid-Tex ("ACSC Cities") that have joined
together to facilitate the review of, and response to, natural gas issues affecting rates charged in
the Atmos Mid-Tex service area; and
WHEREAS, ACSC and the Company worked collaboratively to develop a Rate Review
Mechanism ("RRM") tariff that allows for an expedited rate review process by ACSC Cities as a
substitute to the Gas Reliability Infrastructure Program ("GRIP") process instituted by the
Legislature, and that will establish rates for the ACSC Cities based on the system-wide cost of
serving the Atmos Mid-Tex Division; and
WHEREAS, the current RRM tariff was adopted by the Town in a rate ordinance in
2018; and
WHEREAS, on or about April 1, 2021, Atmos Mid-Tex filed its 2021 RRM rate request
with ACSC Cities based on a test year ending December 31, 2020; and
WHEREAS, ACSC coordinated its review of the Atmos Mid-Tex 2021 RRM filing through
its Executive Committee, assisted by ACSC's attorneys and consultants, to resolve issues
identified in the Company's RRM filing; and
WHEREAS, the Executive Committee, as well as ACSC's counsel and consultants,
recommend that ACSC Cities approve an increase in base rates for Atmos Mid-Tex of $22.78
million applicable to ACSC Cities with an Effective Date of December 1, 2021; and
WHEREAS, ACSC agrees that Atmos plant-in-service is reasonable; and
WHEREAS, with the exception of approved plant-in-service, ACSC is not foreclosed from
future reasonableness evaluation of costs associated with incidents related to gas leaks; and
WHEREAS, the two month delayed Effective Date from October 1 to December 1 will save
ACSC ratepayers approximately $3.8 million off new rates imposed by the attached tariffs (Exhibit
A); and
WHEREAS, the attached tariffs (Exhibit A) implementing new rates are consistent with the
recommendation of the ACSC 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 prepared by Atmos Mid-Tex (Exhibit C); and
WHEREAS, the RRM Tariff contemplates reimbursement of ACSC's reasonable
expenses associated with RRM applications;
NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF
PROSPER, 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 ACSC, the Town
Council finds that the settled amount of an increase in revenues of$22.78 million for ACSC Cities
represents a comprehensive settlement of gas utility rate issues affecting the rates, operations,
and services offered by Atmos Mid-Tex within the municipal limits arising from Atmos Mid-Tex's
2021 RRM filing, is in the public interest, and is consistent with the Town's authority under Section
103.001 of the Texas Utilities Code,
SECTION 3
That despite finding Atmos Mid-Tex's plant-in-service to be reasonable, ACSC is not
foreclosed in future cases from evaluating the reasonableness of costs associated with incidents
involving leaks of natural gas.
SECTION 4
That the existing rates for natural gas service provided by Atmos Mid-Tex are
unreasonable. The new tariffs attached hereto and incorporated herein as Exhibit A, are just and
reasonable, and are designed to allow Atmos Mid-Tex to recover annually an additional $22.78
million from customers in ACSC Cities, over the amount allowed under currently approved rates.
Such tariffs are hereby adopted.
Resolution No.2021-39, Page 2
SECTION 5
That the ratemaking treatment for pensions and retiree medical benefits in Atmos Mid-
Tex's next RRM filing shall be as set forth on Exhibit B, attached hereto and incorporated herein.
SECTION 6
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.
SECTION 7
That Atmos Mid-Tex shall reimburse the reasonable ratemaking expenses of the ACSC in
processing the Company's 2021 RRM filing.
SECTION 8
That to the extent any resolution or ordinance previously adopted by the Council is
inconsistent with this Resolution, it is hereby repealed.
SECTION 9
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 10
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 11
That consistent with the Town 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 12
That a copy of this Resolution shall be sent to Atmos Mid-Tex, care of Chris Felan, Vice
President of Rates and Regulatory Affairs Mid-Tex Division, Atmos Energy Corporation, 5420 LBJ
Freeway, Suite 1862, Dallas, Texas 75240, and to Thomas Brocato, General Counsel to ACSC,
at Lloyd Gosselink Rochelle &Townsend, P.C., 816 Congress Avenue, Suite 1900, Austin, Texas
78701.
Resolution No. 2021-39, Page 3
DULY PASSED AND . '.• 7.OVED BY THE TOWN COUNCIL OF THE TOWN OF
I PROSPER, TEXAS, BY ; ' dcriE ph.� TO a , ON THIS THE 10TH DAY OF AUGUST,
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* Ray Smith, Mayor
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Robyn = .ttle, Interim Tow, Secretary
APPR• ED AS TO FORM AND LEGALITY:
Terrence S. Welch, Town Attorney tto ey
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Resolution No.2021-39,Page 4