HomeMy WebLinkAboutO-4179-9-251
ORDINANCE NO. 4179-9-25
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ALLEN, TEXAS,
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.
WHEREAS, the City of Allen, 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,
WHEREAS, on about April 1, 2025, Atmos Mid-Tex filed its 2025 RRM rate request with ACSC Cities
based on a test year ending December 31, 2024; and,
WHEREAS, ACSC coordinated its review of the Atmos Mid-Tex 2025 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 $205.6 million on a system-wide basis with an
Effective Date of October 1, 2025; 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,
Ordinance No. 4179-9-25, Page 2
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.,
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ALLEN,
COLLIN COUNTY, 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 $205.6 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 2025 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 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 $205.6 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 2025 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, 2025.
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,