HomeMy WebLinkAboutResolution - 2004-R0095 - Resolution And Order - Suspension Of Atmos Energy Rate Hike - 02_19_2004Resolution No. 2004-R0095
February 19, 2004
Item No. 50
RESOLUTION AND ORDER
WHEREAS, a Statement of Intent to increase gas rates within the City of
Lubbock was filed by Atmos Energy October 21, 2003; and
WHEREAS, the City Council of the City of Lubbock, sitting as a regulatory
authority under provisions of law, heretofore suspended the implementation of such
proposed major change in order that such proposed change in rates might be studied and
staff comment received; and
WHEREAS, such study has been completed and a public hearing has been
conducted as required by law; NOW THEREFORE:
BE IT RESOLVED AND ORDERED BY THE CITY COUNCIL OF THE CITY OF
LUBBOCK:
THAT pursuant to the provisions of the Gas Utility Regulatory Act, Chapter 104,
Utilities Code, Resolution No. 2003-RO519 of the City of Lubbock, dated November 17,
2003, which suspended operation of the proposed rate increase of Atmos Energy, as filed
October 21, 2003, is hereby withdrawn; and
THAT by this action Atmos Company shall be entitled to place into effect such
rate tariffs as are attached hereto as Exhibit A at such time after final passage of this
Resolution and Order as shall be deemed appropriate by Atmos Energy; and
THAT selected revised schedules are attached hereto as Exhibit B and made a
part hereof for all purposes.
Passed by the City Council of the City of Lubbock this 1
AL, MAYOR
ATTEST:
QJA� e. 0)-� — -
Rebecca Garza, City Secretary
APPROVED AS TO CONTENT:
White,/Agiing City Manager
APPROVED AS TO CONTENT:
G. Vandiver, Attorney of
DDRes/A tmosRateOrder N
February 13, 2004
Resolution No. 2004-R0095
PTIVIOS
energy
February 12, 2004
Anita Burgess, Esq.
City Attorney
City of Lubbock
5110 80th Street
Lubbock, Texas 79424
Re: Pending Statement of Intent of Atmos Energy Corporation to Change Gas Rates
in the City of Lubbock
Dear Ms. Burgess:
Enclosed for inclusion in the record and consideration by the Mayor and City
Councilmembers in deciding the above -referenced rate request of Atmos Energy Corporation
("Atmos" or "the Company"), please find the following documentation relating to the proposed
agreement to a significantly reduced revenue increase and other changes to the Company's
original filing:
1. Attachment A: As you requested, this 9-page Attachment includes the Company's
proposed tariffs as revised to reflect the reduced revenue increase, changes to the rate
design originally proposed by the Company, revisions to the Gas Cost Adjustment Rider,
and approval of the proposed Weather Normalization Adjustment. Changes from the
existing tariffs are denoted in boldfaced type.
2. Attachment B: This 6-page Attachment contains several revised schedules summarizing
the components of the reduced revenue increase and indicating their derivation. These
particular schedules are provided for the limited purpose of booking and recovering, on
an interim basis, the cost of future Company investments in gas utility service provided in
the Lubbock service area, as provided in § 104.301 of the Texas Utilities Code. Under
that provision, and upon the filing of a tariff so providing, costs relating to new
investments in plant -in-service can be recovered by the gas utility on an interim basis,
subject to review and possible refund in the utility's next rate case.
A further explanation regarding the schedules in Attachment B may be helpful. These
schedules are provided in order to identify the factors, or the source of the factors, that must be
used in calculating any future interim adjustment under §104.301. These include, e.g., the
composite tax rate for revenue -related taxes shown on Schedule ADJ 5-1, the incremental
Federal Income Tax rate shown on Schedule B, the rate of return on investment or overall cost of
capital shown on Schedule 9, and the ad valorem tax levels shown on Schedule ADJ 5-3. The
depreciation rates reflected in the total amount of Depreciation & Amortization Expense shown
Atmos Energy Corporation
P.O. Box 1121, Lubbock, Texas 79408
F 806-798-4494 atmosenergy.com
Anita Burgess, Esq.
City Attorney
City of Lubbock
February 12, 2004
Page 2
on Schedule 1, and the class allocation factors on which the existing and attached tariffs are both
implicitly based, are those that were approved by the Railroad Commission of Texas in the
Company's last rate case in 2000. I will forward to you under separate cover the more detailed
back-up to these schedules for your files. I would request that this explanatory letter, along with
the enclosures, be included in the record for future reference.
Please let me know if you, the Mayor, or Council have any questions.
Very truly yours,
W "Ajr
C. W. (Bill) Guy
Attachments
cc:
05721:00002 : AUSTIN: 289906.1
Attachment A Page I of 9
Resolution No. 2004—R0095
Atmos Energy Company
Lubbock Distribution System
RESIDENTIAL GAS SERVICE
AVAILABILITY
This schedule is applicable to general use by Residential customers for heating, cooking, refrigeration,
water heating and other similar type uses. This schedule is not available for service to premises with an
alternative supply of natural gas.
MONTHLY RATE
Customer Charge: $ 9.45
Commodity Charge:
All Consumption $ 0.09668 per Ccf
The Lubbock System Gas Cost Adjustment Rider applies to this schedule.
The Lubbock System Weather Normalization Adjustment Rider applies to this schedule.
EFFECTIVE: Bills rendered on and after March 1, 2004 inside city limits.
ISSUED BY: C.W. Guy, Vice President - Rates & Regulatory Affairs
Attachment A Page 2 of 9
Atmos Energy Company
Lubbock Distribution System
COMMERCIAL GAS SERVICE
AVAILABILITY
This schedule is applicable to Commercial type customers, including hospitals and churches, for heating,
cooking, refrigeration, water heating and other similar type uses. This schedule is not available for
service to premises with alternative supply of natural gas.
MONTHLY RATE
Customer Charge: $ 14.50
Commodity Charge:
All Consumption $ 0.0950 per Ccf
The Lubbock System Gas Cost Adjustment Rider applies to this schedule.
The Lubbock System Weather Normalization Adjustment Rider applies to this schedule.
EFFECTIVE: Bills rendered on and after March 1, 2004 inside city limits.
ISSUED BY: C.W. Guy, Vice President - Rates & Regulatory Affairs
Attachment A Page 3 of 9
Corrected from Original page 3
3/8104 per CWG
Atmos Energy Company
Lubbock Distribution System
SMALL INDUSTRIAL GAS SERVICE
AVAILABILITY
This schedule is applicable to the sales of any industrial or commercial customer whose predominant use
of natural gas is other than space heating, cooking, water heating or other similar type uses. Service
under this schedule is available to eligible customers following execution of a contract specifying the
maximum hourly load. This schedule is not available for service to premises with an alternative supply
of natural gas.
MONTHLY RATE
Customer Charge: $ 55.00
Commodity Charge:
1st 1000 $ 0.0965 per Ccf
All over 1000 $ 0.0750 per Ccf
The Lubbock System Gas Cost Adjustment Rider applies to this schedule.
EFFECTIVE: Bills rendered on and after March 1, 2004 inside city limits.
ISSUED BY: C.W. Guy, Vice President - Rates & Regulatory Affairs
Attachment A Page 4 of 9
Atmos Energy Company
Lubbock Distribution System
PUBLIC AUTHORITY GAS SERVICE
AVAILABILITY
This schedule is applicable to general use by Public Authority type customers, including public schools,
for heating, cooking, refrigeration, water heating and other similar type uses. This schedule is not
available for service to premises with an alternative supply of natural gas.
MONTHLY RATE
Customer Charge: $ 41.00
Commodity Charge:
All Consumption $ 0.091 per Ccf
The Lubbock System Gas Cost Adjustment Rider applies to this schedule.
The Lubbock System Weather Normalization Adjustment Rider applies to this schedule.
EFFECTIVE: Bills rendered on and after March 1, 2004 inside city limits.
ISSUED BY: C.W. Guy, Vice President - Rates & Regulatory Affairs
Attachment A Page 5 of 9
Atmos Energy Company
Lubbock Distribution System
STATE INSTITUTION GAS SERVICE
AVAILABILITY
This schedule is applicable to gas service to state agencies (as provided in Texas Utilities Code, Section 104,20:
including, but not limited to, state college and universities, MHMR schools, agriculture, highway and
public safety departments, prisons, and other facilities owned or operated by the State of Texas for the purpose
of heating, cooking, refrigeration, water heating and other similar type uses.
MONTHLY RATE
Customer Charge: $ 38.95
Commodity Charge:
All Consumption $ 0.08645 per Ccf
The Lubbock System Gas Cost Adjustment Rider applies to this schedule.
The Lubbock System Weather Normalization Adjustment Rider applies to this schedule.
EFFECTIVE: Bills rendered on and after March 1, 2004 inside city limits.
ISSUED BY: C.W. Guy, Vice President - Rates & Regulatory Affairs
Attachment A Page 6 of 9
Atmos Energy Company
Lubbock Distribution System
GAS COST ADJUSTMENT RIDER
APPLICATION
Gas bills issued under rate schedules to which this rider applies will include adjustments to reflect
decreases or increases in purchased gas costs or taxes. Any such adjustments shall be filed with the
City's Secretary before the beginning of the month in which the adjustment will be applied to bills.
The amount of each adjustment shall be computed as follows:
GAS COST ADJUSTMENT (GCA)
The GCA to be applied to each Ccf billed shall be computed as follows and rounded to the nearest $0.01:
GCA = (G/S + CF) X TF
Where:
1. "G", in dollars, is the expected cost of gas for the expected sales billing units.
2. "S", in Ccf as measured at local atmospheric pressure, is the expected sales billing units to be billed to
customers in the Company's Lubbock Service area.
3. "CF", in $/Ccf as measured at local atmospheric pressure, is the correction factor charge per Ccf to
adjust for the cumulative monthly ditterence between the cost of gas purchased by the Company
and the amount of gas cost billed to the customer.
4. "TF", is a tax factor of 1.0752.
Service Area
For Service inside city limits.
EFFECTIVE: Bills rendered on and after March 1, 2004 inside city limits.
ISSUED BY: C.W. Guy, Vice President - Rates & Regulatory Affairs
Attachment A Page 7 of 9 Billing Rate Code
Tariff
Schedule ID
Atmas Energy Company
Lubbock Distribution System
WEATHER NORMALIZATION ADJUSTMENT (WNA) RIDER
PROVISIONS FOR ADJUSTMENT
The base rate per Ccf (100,000 Btu) for gas service set forth in any Rate Schedules utilized in the city of the
Lubbock Service Area for determining normalized winter period revenues shall be adjusted by an amount
hereinafter described, which amount is referred to as the "Weather Normalization Adjustment." The
Weather Normalization Adjustment shall apply to all temperature sensitive residential, commercial, public
authority, and state institution bills based on meters read during the revenue months of October through
May.
EFFECTIVE: Bills rendered on and after April 1, 2004 inside city limits.
ISSUED BY: C.W. Guy, Vice President- Rates & Regulatory Affairs
Attachment A Page 8 of 9 Billing Rate Code
Tariff
Schedule ID
Atmos Energy Company
Lubbock Distribution System
WEATHER NORMALIZATION ADJUSTMENT (WNA) RIDER (Continued)
Computation of Weather Normalization Adiustment
The Weather Normalization Adjustment Factor shall be computed to the nearest one -hundredth cent per
Ccf by the following formula:
I Where
(HSFi (NDD—ADD) )
WRAF i = R
(BL i + (HSF i x ADD) )
s any particular Rate Schedule or billing classification within
any such particular Rate Schedule that contains more than
one billing classification
WNW' Weather Normalization Adjustment Factor for the i th rate
schedule or classification expressed in cents per Ccf
R s base rate of temperature sensitive sales for the i m schedule
or classification utilized
HSF i heat sensitive factor for the i th schedule or classification divided
by the average bill count in that class
NDD a billing cycle normal heating degree days
ADD billing cycle actual heating degree days
BL i base load sales for the i th schedule or classification divided by the
average bill count in that class
The Weather Normalization Adjustment for the j th customer in i m rate schedule is computed as:
WNA i WNAF i x q ii
Where q ii is the relevant sales quantity for the j th customer in i th
rate schedule
EFFECTIVE: Bills rendered on and after April 1, 2004 inside city limits.
ISSUED BY: C.W. Guy, Vice President - Rates & Regulatory Affairs
Attachment A Page 9 of 9 Billing Rate Code
Tariff
Schedule ID
Atmos Energy Company
Lubbock Distribution System
WEATHER NORMALIZATION ADJUSTMENT
Filings with Regulatory Agencies
The Company will file (a) a copy of each computation of the Weather Normalization Adjustment Factor,
(b) a schedule showing the effective date of each such Weather Normalization Adjustment, and (c) a
schedule showing the factors of values used in calculating such Weather Normalization Adjustment.
N
e
w
T
a
r
i
f
f
EFFECTIVE: Bills rendered on and after April 1, 2004 inside city limits.
ISSUED BY: C.W. Guy, Vice President - Rates & Regulatory Affairs
Attachment B
Page I of 6
ATMOS ENERGY CORPORATION
TEXAS DIVISION -WEST TEXAS - LUBBOCK
COST OF SERVICE
TWELVE MONTHS ENDED March 31, 2003
Resolution No. 2004—R0095
SCHEDULEI
Line TOTAL LUBBOCK
No. Description Reference As Adjusted
(a) (b) (c)
1 Cost of Gas Schedule 3 $0
2
3 Operation & Maintenance Expense
Schedule 4
4
5 Depreciation & Amortization Expense
Schedule 6
6
7 Taxes Other Than Income Taxes
Schedule 5
8
9 Return
Schedule 7
10
11 Income Tax
Schedule 8
12
13 Interest on Customer Deposits
WP 1-1
14
15 Total Cost of Service
16
17
18 Revenue at Present Rates
Schedule 2
19
20 Net Revenue Deficiency
21
22 Total Revenue Increase Required to Recover Deficiency and
23 Applicable Revenue Taxes: Line 20l (100% - 6.997%)
7,258,557
2,450,256
1,773,568
3,961,847
1,312,620
65,605
$16,812,453
15,363,657
$1,448,796
$1,525,000
2/12/2004 Page 1 of 1
Attachment B
Page 2 of 6
ATMOS ENERGY CORPORATION
TEXAS DIVISION -WEST TEXAS - LUBBOCK
Revenue Tax Adjustment
Twelve Months Ended March 31, 2003
Total
Line Lubbock
No. Description City Plant
(a) (b)
1 Total Normalized Revenue
2
3 Times: Revenue Tax Percentage
4
5 Syncronized Revenue Taxes
6
7 Per Book Revenue Taxes
8
9 Adjustment
$15,363,657
6.997%
$1,074,995
2,192,474
($1,117,479)
ADJ 5-1
2/12/2004 Page 1 of 1
Attachment B
Page 3 of 6
ATMOS ENERGY CORPORATION
TEXAS DIVISION -WEST TEXAS - LUBBOCK
Ad Valorem Tax Adjustment
Twelve Months Ended March 31, 2003
ADJ 5-3
Line Division Division Total
No. Description 05 21 West Texas
(a) (b) (c) (d)
1 2002 Actual Tax
2
3 2003 Estimated Tax Accrued
5 Total Adjustment
1,992,376 144,835 2,137,211
2,050,743 3,192 2,053,935
(58,367) 141,643 83,276
2/12/2004 Page 1 of 1
Attachment B SCHEDULE 7
Page 4of6
ATMOS ENERGY CORPORATION
TEXAS DIVISION -WEST TEXAS - LUBBOCK
Rate Base & Return
As of March 31, 2003
Line
Net Original Cost
No. Description
Weighting
Amount
(a)
(b)
(c)
1 Net Original Cost of Plant per Books
WP 7-1
100%
$48,074,554
2
3 Net Replacement Cost New
0%
0
4
5 Projected Plant Additions
WP 7-2
100%
0
6
7 Frankford Road Move Project Cost
WP 7-9
100%
-
8
9 Storage Gas [1]
WP 7-3
100%
$121,609
10
11 Accumulated Deferred Federal Income Tax
WP 7-4
100%
(3,865,975)
12
13 Customer Advances for Construction [2]
WP 7-5
100%
(138,162)
14
15 Customer Deposits [2]
WP 7-5
100%
(926,754)
16
17 Investment Tax Credits
WP 7-6
100%
(91,012)
18
19 Working Capital:
20 Prepayments [2]
WP 7-7
100%
52,703
21 Materials & Supplies [1]
WP 7-8
100%
71,916
22
23 Total Rate Base
43,298,878
Return on Net Original Cost @
9.15%
3,961,847
[1] As of March 31, 2003
2/12/2004 Page 1 of 1
Lvu `-i - C111_OO9 e
Attachment B
Page 5 of 6
ATMOS ENERGY CORPORATION
TEXAS DIVISION -WEST TEXAS - LUBBOCK
Computation of Federal Income Taxes
Twelve Months Ended March 31, 2003, As Adjusted
Schedule 8
Line West Texas
No. Description Lubbock
(a) (b)
1 After Tax Return
2
3 Interest Deduction
4
5 Equity Portion of Return
6
7 Application of Tax Rate to Equity Return
8
9 Tax Expansion Factor
10
11 Total Income Tax Liability
$3,961,847
1,524,120
2,437,727
35% $853,204
1.53846
$1,312,620
2/12/2004 Page 1 of 1
2Coq_ y.c()`i5
Attachment B
Page 6 of 6
ATMOS ENERGY CORPORATION
TEXAS DIVISION -WEST TEXAS - LUBBOCK
Overall Cost of Capital
Twelve Months Ended March 31, 2003, As Adjusted
Schedule 9
Line
Capital
Overall Cost
No. Description
Percent
Cost Rate
of Capital
(a)
(b)
(c)
(d)
1 Long Term Debt Capital
50.00%
7.03%
3.52%
2 Equity Capital
50.00%
11.25%
5.63%
3
4
5 Total Capital
100.00%
9.15%
2/12/2004 Page 1 of 1