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Consideration of an Ordinance of the City Council of the City of Lewisville, Texas, Approving a Negotiated Settlement Between the Atmos Cities Steering Committee (“ACSC”) and Atmos Energy Corp., Mid-Tex Division Regarding the Company’s 2026 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.
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ADMINISTRATIVE COMMENTS:
In 2007, the Atmos Cities Steering Committee (ACSC) and Atmos Energy Corporation's Mid-Tex Division (Atmos Mid-Tex) settled a rate adjustment issue under the Gas Reliability Infrastructure Program (GRIP) by establishing a new Rate Review Mechanism (RRM). This mechanism replaced the GRIP filings for future rate reviews. The most recent RRM Tariff, adopted in 2018, was used when Atmos Mid-Tex filed a rate request on April 1, 2026. The company sought $291.1 million in additional revenues based on a 2024 cost-of-service study. After review and discovery, ACSC consultants recommended that the deficiency under RRM standards should be set at $253.4 million. Following negotiations, the parties agreed to settle at $260.5 million, reflecting a $30 million reduction from Atmos Mid-Tex’s original request. The new rates will take effect October 1, 2026, contingent on ACSC members’ approval of the Resolution/Ordinance prior to that date.
RECOMMENDATION:
That the City Council approve the resolution as set forth in the caption above.