Title
Resolution - A Resolution of the City Council of the City of Mansfield, Texas, Denying the Rate Increase Requested by Atmos Energy Corp., Mid-Tex Division Under the Company’s 2014 Annual Rate Review Mechanism
Requested Action
Staff requests that council adopt the attached resolution, thus denying Atmos’s proposed rate increase.
Recommendation
Staff recommends that council adopt the attached resolution.
Description/History
The City, along with approximately 154 other cities served by Atmos Energy Mid-Tex Division (“Atmos Mid-Tex” or “Company”), is a member of the Atmos Cities Steering Committee (“ACSC” or “Steering Committee”).On or about February 28, 2014, Atmos Mid-Tex filed with the City an application to increase natural gas rates pursuant to the Rate Review Mechanism (“RRM”) tariff. The RRM tariff was originally approved by ACSC as part of the settlement agreement to resolve the Atmos Mid-Tex 2007 system-wide rate filing at the Railroad Commission. In early 2013, the City adopted a renewed RRM tariff for an additional five years. This is the second annual RRM filing under the renewed RRM tariff.
The Atmos Mid-Tex RRM filing sought a $45.7 million rate increase system-wide based on an alleged test-year cost of service revenue deficiency of $49 million. The City worked with ACSC to analyze the schedules and evidence offered by Atmos Mid-Tex to support its request to increase rates. While the evidence does not support the $45.7 million increase requested by the Company, ACSC’s consultants agree that the Company can justify an increase in revenues of a much lesser amount-namely, an increase of only $19 million.
Justification
Staff believes a good faith attempt was made by ACSC to reach a compromise with Atmos Mid-Tex, an agreement was not reached. In the absence of an agreement, staff along with the ACSC Executive Committee and ACSC’s legal counsel has recommended that ACSC members adopt the attached Resolution denying the rate increase request....
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