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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 2024 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 Rate-making 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; and Declaring an Emergency.
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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, 2024. The company sought $196.8 million in additional revenues based on a 2023 cost-of-service study. Applying ACSC’s RRM standards adjusted this to $182.5 million, with $132.6 million affecting ACSC members. After analysis, ACSC’s consultants determined a $149.6 million shortfall. The parties eventually settled on $164.7 million, a $32.1 million reduction from the initial request, which includes covering ACSC’s expenses. New rates will take effect on October 1, 2024.
RECOMMENDATION:
That the City Council approve the ordinance and authorize the City Manager, or her designee, to execute the ordinance as set forth in the caption above.