O-3699-9-19 ORDINANCE NO.3699-9-19
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY,TEXAS,APPROVING A NEGOTIATED SETTLEMENT BETWEEN THE
ATMOS CITIES STEERING COMMITTEE ("ACSC") AND ATMOS ENERGY
CORP.,MID-TEX DIVISION REGARDING THE COMPANY'S 2019 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 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 and charges
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 new 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 1,2019,Atmos Mid-Tex filed its 2019 RRM rate request with ACSC Cities based
on a test year ending December 31,2018; and,
WHEREAS, ACSC coordinated its review of the Atmos Mid-Tex 2019 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$35.4 million applicable to ACSC Cities; 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(Exhibit C);
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. The findings set forth in this Ordinance are hereby in all things approved.
SECTION 2. 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 $35.4 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 2019 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. 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 $35.4 million from customers in ACSC Cities, over
the amount allowed under currently approved rates. Such tariffs are hereby adopted.
SECTION 4. 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 5. Amortization of regulatory liability shall be consistent with the schedule found in attached
Exhibit C attached hereto and incorporated herein.
SECTION 6. Atmos Mid-Tex shall reimburse the reasonable ratemaking expenses of the ACSC in
processing the Company's 2019 RRM filing.
SECTION 7. To the extent any resolution or ordinance previously adopted by the Council is inconsistent
with this Ordinance, it is hereby repealed.
SECTION 8. 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. 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. 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, 2019.
SECTION 11. 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 LJB Freeway,Suite 1862,
Dallas, Texas 75240, and to Geoffrey Gay, General Counsel to ACSC, at Lloyd Gosselink Rochelle &
Townsend,P.C., 816 Congress Avenue, Suite 1900,Austin,Texas 78701.
Ordinance No.3699-9-19,Page 2
DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY,TEXAS,ON THIS THE 10TH DAY OF SEPTEMBE 019.
111 APPR .
tephen errell,MAYOR
APPROVED AS TO FORM: ATTEST:
C2..4-t-1
Peter G.Smith'I ATTORNEY She ey B.Geor , ITY SECRETARY
2557/31/7897503
Ordinance No.3699-9-19,Page 3