STRATEGIC PRIORITY: Government Performance and Financial Management
AGENDA DATE: August 12, 2020
COUNCIL DISTRICT(S): N/A
DEPARTMENT: Office of Budget
EXECUTIVE: Elizabeth Reich
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SUBJECT
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An ordinance denying rates as requested by Atmos Energy Corp. Mid-Tex Division (Atmos) provided pursuant to its January 15, 2020 Dallas Annual Rate Review (DARR) filing and setting rates as recommended by the City Manager - Financing: No cost consideration to the City
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BACKGROUND
Atmos provides natural gas utility service in Dallas in accordance with City franchise Ordinance No. 27793 and Title 3, Subtitle A Texas Utilities Code, Gas Utility Regulatory Act (GURA). On June 22, 2011, the City of Dallas approved Atmos’ tariff Dallas Annual Rate Review (DARR), which provides a mechanism by which Atmos shall file for an annual review of its rates.
On January 15, 2020, Atmos filed its rate increase request under the DARR tariff. In its filing, Atmos requested an increase in annual revenue of $18.3 million from within the City of Dallas. Atmos requested that the new rates become effective June 1, 2020. On May 13, 2020 the City Council adopted an ordinance amending the DARR tariff to allow for an extension of time due to the state of emergency currently in effect within the City of Dallas. As a result of the amendment the effective date for the DARR rates was deferred until September 1, 2020 and the deadline for the City to act was extended to August 28, 2020.
The City has a multiyear contract with Garrett Group LLC (Garrett) to assist City staff in reviewing the DARR filings and gas rate cases. Garrett has expertise in reviewing gas rate cases and is currently assisting the City with the Atmos Pipeline rate case at the Railroad Commission of Texas. After reviewing the January 15, 2020 rate filing and supplemental information received from Atmos, Garrett determined that the requested rate increase was not justified.
City staff, and outside legal counsel met with Atmos on numerous occasions, both in person and by conference call to negotiate a settlement of the pending rate request. The City Manager’s recommendation regarding rates to be charged by Atmos is scheduled to be presented on August 5, 2020 to the City Council.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
City Council will be briefed on the Dallas Annual Rate Review filing on August 5, 2020.
FISCAL INFORMATION
No cost consideration to the City.