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AI# 12416
Regular City Council Meeting
6.48.
04/09/2024:
Information
Agenda Item
Resolution - City Manager:
Consider a resolution suspending for 45 days, the effective date proposed by Atmos Energy-West Texas Division (Atmos-WTX) in its application filed on or about February 23, 2024, pursuant to Section 104.301 of the Gas Utility Regulatory Act.
Item Summary
“GRIP” RATE APPLICATIONS
Under section 104.301 of the Gas Utility Regulatory Act (GURA), a gas utility is allowed to request increases in its rates to recover a return on investments it makes between rate cases. This section of GURA is commonly referred to as the “GRIP” statute (the Gas Reliability Infrastructure Program).
Under a decision by the Supreme Court of Texas, the Court concluded that a filing made under the GRIP statute, permitted gas utilities the opportunity to recover a return on capital expenditures made during the interim period between rate cases, by applying for interim rate adjustment, and that proceedings under the GRIP statute did not contemplate either adjudicative hearings or substantive review of utilities' filings for interim rate adjustments.
Instead, the Court concluded, the GRIP statute provides for a ministerial review of the utility’s filings, to ensure compliance with the GRIP statute and the Railroad Commission’s rules, and that it is within the Railroad Commission’s authority to preclude cities from intervening and obtaining a hearing before the Railroad Commission.
Atmos-WTX’S “GRIP” APPLICATION
On or about February 23, 2024, Atmos-WTX filed for an increase in gas utility rates under the Gas Reliability Infrastructure Program ("GRIP”). Atmos-WTX’s application when approved by the Railroad Commission will result in an increase in the monthly customer charges as shown in the following table.
Rate Schedule
Current Customer Charge
Per Month
Proposed 2023 Interim Adjustment
Per Month
Adjusted Customer Charge
Per Month
Monthly Increase to Each Bill
Per Month
Residential Gas Service
$21.02 per customer
$3.34 per customer
$24.36 per customer
$3.34 per customer
Commercial Gas Service
$68.94 per customer
$10.67 per customer
$79.61 per customer
$10.67 per customer
Industrial/Transportation Gas Service
$847.10 per customer
$191.00 per customer
$1,038.10 per customer
$191.00 per customer
Public Authority Gas Service
$84.28 per customer
$19.55 per customer
$103.83 per customer
$19.55 per customer
Note that Atmos-WTX refers to its application as its “2023” interim adjustment because the increase in rates Atmos-WTX presents in its application is based on capital expenditures it made from January 1, 2023, through December 31, 2023.
REVIEW AND ACTION RECOMMENDED
Although the City’s ability to review and effectuate a change in Atmos-WTX requested increase is limited, the City should exercise due diligence with regard to rate increases by monopoly utilities who operate within its boundaries, including increases requested under the GRIP statute to ensure compliance with the requirements of that law. To exercise its due diligence, it is necessary to suspend Atmos-WTX proposed effective date of April 23, 2024, for forty-five days, so that the City can evaluate whether the data and calculations in Atmos-WTX’s rate application are correctly done, and whether Atmos-WTX’s application otherwise conforms to the requirements of the GRIP statute.
Therefore, the City recommends that the City adopt a resolution suspending Atmos-WTX’s proposed effective date for 45 days. Assuming a proposed effective date of April 23, 2024, Atmos-WTX’s proposed effective date is suspended until June 7, 2024. The City must take action to suspend Atmos-WTX’s proposed effective date by no later than April 23, 2024. A copy of Atmos-WTX's filing is available for review in the City Secretary's Office.
Fiscal Impact
The fiscal impact is based upon usage and customer class, as noted in the Item Summary.
Staff/Board Recommending
D. Blu Kostelich, Chief Financial Officer
Attachments
Resolution - Atmos ALDC GRIP
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