RESOLUTION NO. 1533 – Approving a NEGOTIATED settlement between the atmos cities steering committee (“ACSC”) and ATMOS ENERGY CORP., mid-tex DIVISION regarding the company’s 2022 rate review mechanism filing;

Nov 13, 2023

RESOLUTION no. 1533

a RESOLUTION of the city council of the city of SEYMOUR, texas, approving a NEGOTIATED settlement between the atmos cities steering committee (“ACSC”) and ATMOS ENERGY CORP., mid-tex DIVISION regarding the company’s 2022 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 RESOLUTION 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 RESOLUTION TO the company and the ACSC’s legal counsel.

WHEREAS, the City of SEYMOUR, 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, 2022, Atmos Mid-Tex filed its 2022 RRM rate request with ACSC Cities based on a test year ending December 31, 2021; and

WHEREAS, ACSC coordinated its review of the Atmos Mid-Tex 2022 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 $115 million on a system-wide basis with an Effective Date of October 1, 2022; 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;

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEYMOUR, TEXAS:

Section 1.  That the findings set forth in this Resolution 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 $115 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 2022 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 $115 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 the ACSC in processing the Company’s 2022 RRM filing.

Section 7.  That to the extent any resolution or ordinance previously adopted by the Council is inconsistent with this Resolution, it is hereby repealed.

Section 8.  That the meeting at which this Resolution 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 Resolution is adjudged to be unconstitutional or invalid, such judgment shall not affect, impair, or invalidate the remaining provisions of this Resolution, and the remaining provisions of the Resolution 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 Resolution 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, 2022.

Section 11.  That a copy of this Resolution 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.

DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF                             SEYMOUR, , TEXAS, BY A VOTE OF ____ TO ____, ON THIS THE 15TH DAY OF SEPTEMBER, 2022.

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                      Mayor  

ATTEST:

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                            City Secretary                    

APPROVED AS TO FORM:

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                       City Attorney