Title
An ordinance, on first reading, approving a negotiated settlement between the Atmos Cities Steering Committee (“ACSC”) and Atmos Energy Corp., Mid-Tex Division regarding the Company’s 2025 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 attachment establishing a benchmark for pensions and retiree medical benefits; requiring the Company to reimburse ACSC’s reasonable ratemaking expenses; determining that this ordinance 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 ordinance to the Company and the ACSC’s legal counsel.
Body
On April 1, 2025, Atmos Energy filed a rate request pursuant the 2018 Rate Review Mechanism (RRM) adopted by ACSC members. Atmos claimed that its cost-of-service in a test year ending, December 31, 2024, entitled it to additional system-wide revenues of $245.2 million. Application of standards set forth in the RRM Tariff reduces the Company’s request to $225.6 million, of which $163.5 million would be applicable to ACSC members. After reviewing the filing and conduction discovery, ACSC consultants concluded that the system-wide deficiency under the RRM regime should be $185.6 million instead of the claimed $245.2 million. After several meetings the parties agreed to settle the case for $205.6 million, which is a reduction of $20 million to the Company’s initial request. This settlement includes the payment of ACSC expenses.
As shown in the attached Table, the impact of the proposed rates on the average monthly residential bill is an increase of $7.83, or 9.27 percent. The increase for average commercial usage will be $25.73, or 6.56 percent. If approved, the new rates would become effective on October 1, 2025.
The City Charter requires ordinances regulating rates for public utilities to be read and passed at two regular meetings of the City Council. This is the first of two readings of the proposed ordinance.
Recommended/Desired Action
Staff recommends approval of the ordinance.
Attachment(s)
Ordinance
Average Bill Comparison Table
Drafter
Ted Chinn
Head of Department
Ted Chinn