HomeMy WebLinkAboutOrdinance 3809 ORDINANCE NO. 3809
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
NORTH RICHLAND HILLS, TEXAS, APPROVING A
NEGOTIATED SETTLEMENT BETWEEN THE ATMOS CITIES
STEERING COMMITTEE ("ACSC") AND ATMOS ENERGY
CORP., MID-TEX DIVISION REGARDING THE COMPANY'S 2023
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.
WHEREAS, the City of North Richland Hills, Texas ("City") 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 City 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 City in a rate ordinance in
2018; and
Ordinance No.3809
Page 1 of 4
WHEREAS, on about March 31, 2023 Atmos Mid-Tex filed its 2023 RRM rate request
with ACSC Cities based on a test year ending December 31, 2022; and
WHEREAS, ACSC coordinated its review of the Atmos Mid-Tex 2023 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 $142 million on a system-wide basis with an Effective Date of
October 1, 2023; 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 attached tariffs (Attachment 1) 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 (Attachment 2); and
WHEREAS, the RRM Tariff contemplates reimbursement of ACSC's reasonable
expenses associated with RRM applications; and
WHEREAS, the RRM Tariff includes Securitization Interest Regulatory Asset amount of
$19.5 million;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
NORTH RICHLAND HILLS, TEXAS, THAT:
SECTION 1. That the findings set forth in this Ordinance are hereby in all things approved.
SECTION 2.That, without prejudice to future litigation of any issue identified by ACSC,
the City Council finds that the settled amount of an increase in revenues of
$142 million on a system-wide basis 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 2023 RRM filing, is in the public interest, and is consistent
with the City's authority under Section 103.001 of the Texas Utilities Code.
Ordinance No.3809
Page 2 of 4
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 Attachment 1, are just and reasonable, and are designed to allow Atmos
Mid-Tex to recover annually an additional $142 million on a system-wide
basis, over the amount allowed under currently approved rates. Such tariffs
are hereby adopted.
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 Attachment 2,
attached hereto and incorporated herein.
SECTION 6. That Atmos Mid-Tex shall reimburse the reasonable ratemaking expenses
of ACSC in processing the Company's 2023 RRM filing.
SECTION 7. That to the extent any resolution or ordinance previously adopted by the
Council is inconsistent with this Ordinance, it is hereby repealed.
SECTION 8. 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 9. 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.
SECTION 10. That consistent with the City Ordinance that established the RRM process,
this Ordinance shall become effective from and after its passage with rates
authorized by attached tariffs to be effective for bills rendered on or after
October 1, 2023.
SECTION 11. That a copy of this Ordinance 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.
Ordinance No.3809
Page 3 of 4
AND IT IS SO ORDAINED.
PASSED AND APPROVED on this 28th day of August, 2023.
CITY OF NORTH CHLAND HILLS
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Oscar Trevi , Mayor
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Alicia Richardson ..
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City Secretary/Chief Goveff100,prigV
APPROVED AS TO FORM:
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Maleshia B. Mc innis, City Attorney
APPROVED AS TO CONTENT:
Karen Manila, Assistant City Manager
Ordinance No.3809
Page 4 of 4
Ordinance No.3809
Attachment 1
Page 1 of 8
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 Ccf charges to the
amounts due under the riders listed below:
Charge Amount
Customer Charge per Bill $22.25 per month
Rider CEE Surcharge $ 0.05 per month'
Total Customer Charge $22.30 per month
Commodity Charge—All Ccf $0.48567 per Ccf 2
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.
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).
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.
'Reference Rider CEE-Conservation and Energy Efficiency as approved in GUD 10170. Surcharge billing effective July 1,2023.
2The commodity charge includes the base rate amount of$0.46724 per Ccf and Securitization Regulatory Asset amounts related to
financing costs in the amount of$0.01843 per Ccf until recovered.
Ordinance No.3809
Attachment 1
Page 2 of 8
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 30,000 Ccf.
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 Ccf charges to the
amounts due under the riders listed below:
Charge Amount
Customer Charge per Bill $72.00 per month
Rider CEE Surcharge ($ 0.02) per month'
Total Customer Charge $71.98 per month
Commodity Charge—All Ccf $0.18280 per Ccf 2
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.
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).
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.
Presumption of Plant Protection Level
For service under this Rate Schedule, plant protection volumes are presumed to be 10% of normal,
regular, historical usage as reasonably calculated by the Company in its sole discretion. If a customer
believes it needs to be modeled at an alternative plant protection volume, it should contact the company
at mdtx.plantprotection@atmosenergy.com.
1 Reference Rider CEE-Conservation and Energy Efficiency as approved in GUD 10170. Surcharge billing effective July 1,2023.
2The commodity charge includes the base rate amount of$0.16437 per Ccf and Securitization Regulatory Asset amounts related to
financing costs in the amount of$0.01843 per Ccf until recovered.
Ordinance No.3809
Attachment 1
Page 3 of 8
Application
Applicable to Industrial Customers with a maximum daily usage (MDU) of less than 200 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 200 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 $ 1,382.00 per month
First 0 MMBtu to 1,500 MMBtu $0.7484 per MMBtu'
Next 3,500 MMBtu $0.5963 per MMBtu'
All MMBtu over 5,000 MMBtu $0.2693 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.
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).
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
' The tiered commodity charges include the base rate amounts of$0.5684,$0.4163,and$0.0893 per MMBtu,
respectively,plus Securitization Regulatory Asset amounts related to financing costs in the amount of$0.1800 per
MMBtu until recovered.
Ordinance No.3809
Attachment 1
Page 4 of 8
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.
Presumption of Plant Protection Level
For service under this Rate Schedule, plant protection volumes are presumed to be 10% of normal,
regular, historical usage as reasonably calculated by the Company in its sole discretion. If a customer
believes it needs to be modeled at an alternative plant protection volume, it should contact the company
at mdtx.plantprotection@atmosenergy.com.
Ordinance No.3809
Attachment 1
Page 5 of 8
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 $ 1,382.00 per month
First 0 MMBtu to 1,500 MMBtu $0.5684 per MMBtu
Next 3,500 MMBtu $0.4163 per MMBtu
All MMBtu over 5,000 MMBtu $0.0893 per MMBtu
Upstream Transportation Cost Recovery: Plus an amount for upstream transportation costs in
accordance with Part(b)of Rider GCR.
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. 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).
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 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
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.
Ordinance No.3809
Attachment 1
Page 6 of 8
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.
Ordinance No.3809
Attachment 1
Page 7 of 8
Provisions for Adjustment
The Commodity Charge per Ccf(100 cubic feet) 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. The five regional weather stations are Abilene,Austin, Dallas, Waco, and Wichita Falls.
Computation of Weather Normalization Adjustment
The Weather Normalization Adjustment Factor shall be computed to the nearest one-hundredth cent
per Ccf by the following formula:
(HSFi x (NDD-ADD) )
WNAFi = Ri
(BLi + (HSFi x ADD) )
Where
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 Ccf
Ri = Commodity Charge rate of temperature sensitive sales for the ith schedule or
classification.
HSFi = heat sensitive factor for the ith schedule or classification divided by the
average bill count in that class
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 divided by the average
bill count in that class
The Weather Normalization Adjustment for the jth customer in ith rate schedule is computed as:
WNA, = WNAF, x
Where qi; is the relevant sales quantity for the jth customer in ith rate schedule.
Ordinance No.3809
Attachment 1
Page 8 of 8
Base Use/Heat Use Factors
Residential Commercial
Base use Heat use Base use Heat use
Weather Station Ccf Ccf/HDD Ccf Ccf/HDD
Abilene 9.51 0.1415 88.91 0.7010
Austin 8.87 0.1213 213.30 0.7986
Dallas 12.54 0.2007 185.00 0.9984
Waco 8.81 0.1325 125.26 0.7313
Wichita 10.36 0.1379 122.10 0.6083
Falls
Weather Normalization Adjustment(WNA) Report
On or before June 1 of each year, the company posts on its website at atmosenergy.com/mtx-wna, in
Excel format, a Weather Normalization Adjustment (WNA) Report to show how the company calculated
its WNAs factor during the preceding winter season. Additionally, on or before June 1 of each year, the
company files one hard copy and an Excel version of the WNA Report with the Railroad Commission of
Texas' Gas Services Division, addressed to the Director of that Division.
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