To approve a negotiated settlement between the Atmos Cities Steering Committee (“ACSC”) and Atmos Energy Corp., Mid-Tex Division (“Atmos Mid-Tex” or “Company”) regarding the Company’s 2023 Rate Review Mechanism (“RRM”) 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; 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; adopting a severability clause; declaring an effective date; and agreeing that the City will deliver this Ordinance to the Company and the ACSC’s legal counsel. Adopted Ordinance No. 2023-8-11

The City of Plano, along with 181 other Mid-Texas cities served by Atmos Energy Corporation, Mid-Tex Division (Atmos Mid-Tex) is a member of the Atmos Cities Steering Committee (ACSC). 

In 2007, ACSC and Atmos Mid-Tex settled a rate application filed by Atmos Mid-Tex pursuant to Section 104.301 of the Texas Utilities Code for an interim rate adjustment commonly referred to as a GRIP filing (arising out of the Gas Reliability Infrastructure Program legislation). The settlement created a substitute rate review process, referred to as Rate Review Mechanism (RRM), as a substitute for future filings under the GRIP statue. 

Since 2007, there have been several modifications to the original RRM Tariff. The most recent iteration of an RRM Tariff that implemented new procedures and criteria for the RRM process was reflected in an ordinance adopted by ACSC members in 2018. 

Around March 31, 2023, the Atmos Mid-Tex filed a rate request pursuant to the RRM Tariff adopted by ACSC members. Atmos Mid-Tex claimed that its cost-of-service in a test year ending December 31, 2022 entitled it to additional system-wide revenues of $165.9 million. In applying the standards set forth in ACSC's RRM Tariff, it reduced Atmos Mid-Tex's request to $142 million, which is a reduction of $23.9 million to Atmos Mid-Tex's initial request. 

The ACSC Executive Committee recommends a settlement of $142 million. The Effective Date for the new rates is October 1, 2023. In order for Plano and the other ACSC member cities to receive the settlement rate, they should take action approving the Ordinance before September 30, 2023. 

This item has no financial impact. 

Approval of this item supports the City's Strategic Plan Critical Success Factor of Excellent, Innovative, and Accountable City Government.