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Home My WebLink About09-09-19 TC Agenda Packet as Amended ' �'I I I / / / I /'I '/ . / / I I I I I I I I � � � Vision Statement An oasis of natura/beauty that maintains our open spaces in balance with distinctive deve%pment, trai/s, and qua/ity of/ife amenities amidst an ever ex,nanding urban/andscape. � • . � . � � � � � ' 1 ' 1 1 � . . : • . � : � . 11 • • • . � - . . . . 1 1 � Mission Statement West/ake is a unique communi b/ending preservation of our natura/environment and viewscapes, while ser�ing our residents and businesses with superior municipa/and academic services that are accessib/e, e�cient, cost-effective, and transparent. West/ake, Texas- "One-of-a-kind community; natura/oasis-,nro�iding an exceptional level of service." ..- . Regular Session 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. CITIZEN COMMENTS: This is an opportunity for citizens to address the Council on any matter whether or not it is posted on the agenda. Any person desiring to make a public comment must first be recognized by the presiding officer, and sign in at the podium with their name and address. Individual citizen comments are normally limited to three (3) minutes; however, time limits can be adjusted by the presiding officer. The presiding officer may ask the citizen to hold their comment on an agenda item if the item is posted as a Public Hearing. The Council cannot by law take action nor have any discussion or deliberations on any presentation made to the Council at this time concerning an item not listed on the agenda. The Council will receive the information, ask staff to review the matter, or an item may be noticed on a future agenda for deliberation or action. 4. CONDUCT A PUBLIC HEARING IN ACCORDANCE WITH STATE LAW. THIS ITEM IS THE SECOND OF TWO PUBLIC HEARINGS ON THE PROPOSED PROPERTY TAX INCREASE. AS THE PROPOSED TAX RATE ($0.16018 PER $100) EXCEEDS THE EFFECTIVE TAX RATE ($0.14483 PER $100). TOWN COUNCIL WILL VOTE ON THE TAX RATE DURING THE REGULAR MEETING ON SEPTEMBER 23, 2019. THE MEETING WILL TAKE PLACE AT TOWN HALL IN THE COUNCIL CHAMBERS AT 1500 SOLANA BLVD., BLDG. 7, STE., 7100, WESTLAKE, TEXAS. 5. CONSIDER APPROVAL OF RESOLUTION 19-26, ADDING A NEW ALTERNATE MEMBER TO THE PLANNING AND ZONING COMMISSION. 6. DISCUSSION AND CONSIDERATION OF ORDINANCE 891, APPROVING A NEGOTIATED SETTLEMENT BETWEEN THE ATMOS CITIES STEERING COMMITTEE (��ACSC") AND ATMOS ENERGY CORP., MID-TEX DIVISION REGARDING THE COMPANY'S 2019 RATE REVIEW MECHANISM FILING. AMENDED ADDING ITEMS 7, 8, AND 9 7. PRESENTATION AND DISCUSSION REGARDING THE ENTRADA DEVELOPMENT INCLUDING THE GAS WELL PAD SITE AND PLAZA MAYOR. 8. EXECUTIVE SESSION The Council will conduct a closed session pursuant to Texas Government Code, annotated, Chapter 551, Subchapter D for the following: a. Section 551.087 Deliberation Regarding Economic Development Negotiations (1) to discuss or deliberate regarding commercial or financial information that the governmental body has received from a business prospect that the governmental body seeks to have locate, stay, or expand in or near the territory of the governmental body and with which the governmental body is conducting economic development negotiations; or (2) to deliberate the offer of a financial Page 2 of 3 or other incentive to a business prospect described by Subdivision (1) for the following: - Front 44 - Entrada 9. RECONVENE MEETING 10. AD]OURNMENT ANY ITEM ON THIS POSTED AGENDA COULD BE DISCUSSED IN EXECUTIVE SESSION AS LONG AS IT IS WITHIN ONE OF THE PERMITTED CATEGORIES UNDER SECTIONS 551.071 THROUGH 551.076 AND SECTION 551.087 OF THE TEXAS GOVERNMENT CODE. CERTIFICATION I certify that the above notice was posted at the Town Hall of the Town of Westlake, 1500 Solana Blvd., Building 7, Suite 7100, Westlake, TX 76262, September 6, 2019, by 3:00 p.m. under the Open Meetings Act, Chapter 551 of the Texas Government Code. Kelly Edwards, Town Secretary If you plan to attend this public meeting and have a disability that requires special needs or translation services, please advise the Town Secretary 48 hours in advance at 817-490-5710 and reasonable accommodations will be made to assist you. Page 3 of 3 � i�I / / / / I I /'/ '/ . / I / / I / / / / / � � � Vision Statement An oasis of natura/beauty that maintains our open spaces in balance with distinctive deve%pment, trai/s, and qua/ity of/ife amenities amidst an ever ex,nanding urban/andscape. � • . � . � � ' 1 ' 11 • ' . . . • . � : � . 11 • • • . � - . . . . 1 1 � Mission Statement West/ake is a unique community b/ending preservation of our natura/environment and viewscapes, while ser�ing our residents and businesses with superior municipa/and academic services that are accessib/e, e�cient, cost-effective, and transparent. West/ake Texas- "One-of-a-kind community; natura/oasis-,nro�iding an exceptional level of service." ..- . Reqular Session 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. CITIZEN COMMENTS: This is an opportunity for citizens to address the Council on any matter whether or not it is posted on the agenda. Any person desiring to make a public comment must first be recognized by the presiding officer, and sign in at the podium with their name and address. Individual citizen comments are normally limited to three (3) minutes; however, time limits can be adjusted by the presiding officer. The presiding officer may ask the citizen to hold their comment on an agenda item if the item is posted as a Public Hearing. The Council cannot by law take action nor have any discussion or deliberations on any presentation made to the Council at this time concerning an item not listed on the agenda. The Council will receive the information, ask staff to review the matter, or an item may be noticed on a future agenda for deliberation or action. 4. CONDUCT A PUBLIC HEARING IN ACCORDANCE WITH STATE LAW. THIS ITEM IS THE SECOND OF TWO PUBLIC HEARINGS ON THE PROPOSED PROPERTY TAX INCREASE. AS THE PROPOSED TAX RATE ($0.16018 PER $100) EXCEEDS THE EFFECTIVE TAX RATE ($0.14483 PER $100). TOWN COUNCIL WILL VOTE ON THE TAX RATE DURING THE REGULAR MEETING ON SEPTEMBER 23, 2019. THE MEETING WILL TAKE PLACE AT TOWN HALL IN THE COUNCIL CHAMBERS AT 1500 SOLANA BLVD., BLDG. 7, STE., 7100, WESTLAKE, TEXAS. 5. CONSIDER APPROVAL OF RESOLUTION 19-26, ADDING A NEW ALTERNATE MEMBER TO THE PLANNING AND ZONING COMMISSION. 6. DISCUSSION AND CONSIDERATION OF ORDINANCE 891, APPROVING A NEGOTIATED SETTLEMENT BETWEEN THE ATMOS CITIES STEERING COMMITTEE ("ACSC") AND ATMOS ENERGY CORP., MID-TEX DIVISION REGARDING THE COMPANY'S 2019 RATE REVIEW MECHANISM FILING. Page 2 of 3 7. ADJOURNMENT ANY ITEM ON THIS POSTED AGENDA COULD BE DISCUSSED IN EXECUTIVE SESSION AS LONG AS IT IS WITHIN ONE OF THE PERMITTED CATEGORIES UNDER SECTIONS 551.071 THROUGH 551.076 AND SECTION 551.087 OF THE TEXAS GOVERNMENT CODE. CERTIFICATION I certify that the above notice was posted at the Town Hall of the Town of Westlake, 1500 Solana Blvd., Building 7, Suite 7100, Westlake, TX 76262, September 4, 2019, by 5:00 p.m. under the Open Meetings Act, Chapter 551 of the Texas Government Code. Kelly Edwards, Town Secretary If you plan to attend this public meeting and have a disability that requires special needs or translation services, please advise the Town Secretary 48 hours in advance at 817-490-5710 and reasonable accommodations will be made to assist you. Page 3 of 3 Town Cou nci I Item # 2 — Pledge of Allegiance Texas Pledge: "Honor the Texas flag; I pledge allegiance to thee, Texas, one state under God, one and indi�isible. " Town Cou nci I Item # 3 — Citizen Comments CITIZEN COMMENTS: This is an opportunity for citizens to address the Council on any matter whether or not it is posted on the agenda. Any person desiring to make a public comment must first be recognized by the presiding officer, and sign in at the podium with their name and address. Individual citizen comments are normally limited to three (3) minutes; however, time limits can be adjusted by the presiding ofFicer. The presiding officer may ask the citizen to hold their comment on an agenda item if the item is posted as a Public Hearing. The Council cannot by law take action nor have any discussion or deliberations on any presentation made to the Council at this time concerning an item not listed on the agenda. The Council will receive the information, ask staff to review the matter, or an item may be noticed on a future agenda for deliberation or action. Town Cou nci I Item # 4 No supporting documentation 4. CONDUCT A PUBLIC HEARING IN ACCORDANCE WITH STATE LAW. THIS ITEM IS THE SECOND OF TWO PUBLIC HEARINGS ON THE PROPOSED PROPERTY TAX INCREASE. AS THE PROPOSED TAX RATE ($0.16018 PER $100) EXCEEDS THE EFFECTIVE TAX RATE ($0.14483 PER $100). TOWN COUNCIL WILL VOTE ON THE TAX RATE DURING THE REGULAR MEETING ON SEPTEMBER 23, 2019. THE MEETING WILL TAKE PLACE AT TOWN HALL IN THE COUNCIL CHAMBERS AT 1500 SOLANA BLVD., BLDG. 7, STE., 7100, WESTLAKE, TEXAS. Westlake Town Council TYPE OF ACTION T x E i o w N o F WESTLAKE RegularMeeting - Consent oisriNorivE sv oEsicN Westlake Town Council Meeting Monday, September 09, 2019 ToPrc: Discussion and Consideration of a Resolution Appointing an Alternate Board Member to the Planning & Zoning Commission. STAFF CoNTAc'T: Kelly Edwards, Town Secretary and Tanya Morris, Administrative Assistant to the Town Secretary Strategic Alignment i i � . � . . , ; . . � � - � � High Quality Planning,Design& Informed&Engaged Development-We are a desirable Citizens/Sense of Municipal& Well planned,high-quality Encourage Westlake's Community Academic Operations community that is distinguished by Unique Sense of Place exemplary design standards. � Outsidc thc Scope of Identified Strategic Initiatives Time Line- Start Date: September 3, 2019 Completion Date: September 9, 2019 Funding Amount: 0.00 Status - � Not Funded Source - N/A EXECUTIVE SUMMARY(INCLUDING APPLICABLE ORGANIZATIONAL HISTORY) The Planning & Zoning Commission recommended Brad Swearingen as a new alternate board member. RECOMMENDATION To approve the Resolution. Page 1 of 2 ATTACHMENTS Application for Brad Swearingen Resolution Page 2 of 2 �_ ,��'��-1�� APPLICATI4N F�R APP�INTMENT r ti'�, ;� t; This app(ication and i[s confents is a Public Record �,� �'�� " Town of Westlake ' 1500 Bolana Btvd., Bldg. 7, Ste. 7200 ��i�� Wcstlake Tx 7b262 Tcl: {817} 430-0941 ` Fax (817j 430-1812 wv,tiv vresti��;e_tx,c:�,r E;naiL tcr��nf�all�2��+��stlake-a_orq ' • • . � . � • • ♦ • � ECor.^n1i�� L�'r-velnpment Corpora`ior � Hi�tcrif�: Prc;.,er�a[ion S�r_.ie�; � Piann;n�;Gnd Zanirp�:ommiss:an � Texas Studer�t Housing A,�thuri;y � T�ee �ih� USA F,du;sGr,�l:,ornmi'�Fe � Pu�l.c„ft S�ciety o`Wes`.iake � �nre:s`i3ke i+r..3cFmy F�:�r.da�i�n &�ar� ❑ C,[tle': _.__... .-- ' � 1 � � Appiicant's N�rrte:l7RA�p rj1�;�C-Gf�;1�CEt` --- H�Cress: Li State. Z: _ �es�. }(- �I,'(� �i _ tY, P � I Cd C - � �a� , � Hrnv l:�ng Have Yo,� Lived A:Tn:�s;-�ddress� �„�� P��S��'��+� —. Email Address: �; �. _ t IG:IIC;F�IlO"14'+�: F yX#: -- -_ __..__ _ _ _-- �lork Pho�e#: Ge i:.: , n , ' OG-;t��atior., Fxperieny,'i:+�rees:iele: jlr' l�:S.�:S3 �y�f✓'i�,t,'�'L.�-� �+y�- r,�d_�a r �, ' r, 7 r � ,-,, - � ,� - - -- �'}�'�' �'n``��'- --�a�t�,G�'�_..1�<_,;.�L� . ,��o:�r r-�s ----_.__ � _ ------ � _� r � i �J��'IY G�^v VOL\V2fit:O S'EfV9 Q(1 i}115 G::;�'li`.11�13�� -}=��l1.1��_:.. -•:�[� c�_ . [L �l.( <.�n.�.� {�L . l � I U � '�jGS',�" �,�Ip �'"I+,}� �L1G,t_ �tt"1--��` �.`'41�`_-.SS'LS�� e'•�- T-i i1;, .�_.!v (_'�i�-1�1^.f /� C f � ' - - '�CD I �I csi :xcLt:.t-�� ci :,U,L�S �%� -;�,:- �ir-ln. Ar..,i_ �'TS. l��`'��1{n�� - �yo� havo any pciitiwl c-0nFlEcls cf:n1erE:sl? 11(�� C}O YGIJ :'1aYP 3•lY �P_I�IE�P_X�Pf.�"1C��% �.� ��,? �,•1- �;r �� c nC�. ,�, hu� z5 � �T � � � I ,r.: r tl'Cts . G,IiJ4�';�. .r�.� fU �.+��il� ;_Je�� ,�f�,L �'��r-�5 ch_,�� C;.ifrC•1__�^:_1'"i�} �Lfts . _ U '.^l;�at dn !ou`eel yw;� have t�otfer this c�mm;ttee? � e'� �t; � C�it. ct�,r-�• -r-�.z�}-y .�.�t_:. �� , l � ' �/Ltr _}'r'l�t�- r.r� �'�Ont3'�' ir.� T-� �.C,/^.iC'.JF. k��.�- CCS�, C'if`�.f'�"`�, �-c�i- �'�-------- � � �. '� r�P�}i11Li - . !':�'� � ` - 5ignalu�eolH�p;ic;arl: � ��-.-�-� �� - -- --- ClatF�: � - ��1 - I� - - • • �4':��iv�:tl By: ;s;�te; :,�at^�;2�.M�ADDcI�z.'^.�+,K 0 i;27 Y6 TOWN OF WESTLAKE RESOLUTION NO. 19-26 A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS, APPOINTING AN ALTERNATE BOARD MEMBER TO THE PLANNING AND ZONING COMMISSION. WHEREAS, the Town Council conducts a board appointment at a September meeting; and, WHEREAS, the Town Council finds that the passage of this Resolution is in the best interest of the citizens of Westlake. BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS: SECTION 1: That, all matters stated in the Recitals hereinabove are found to be true and correct and are incorporated herein by reference as if copied in their entirety. SECTION 2: THAT the following individuals are hereby appointed to the Planning and Zoning Commission: As a result of the appointments heretofore stated, the Planning and Zoning Commission is represented by the following: Term Expiration Ken Kraska June 2021 Tim Brittan June 2021 Liz Garvin June 2020 Kim Morris June 2020 Michelle Lee June 2021 Sharon Sanden (Alternate member No. 1) June 2020 Brad Swearingen (Alternate member No. 2) June 2021 SECTION 3: If any portion of this Resolution shall, for any reason,be declared invalid by any court of competent jurisdiction, such invalidity shall not affect the remaining provisions hereof and the Council hereby determines that it would have adopted this Resolution without the invalid provision. Resolution 19-26 Page 1 of 2 SECTION 4: That this resolution shall become effective from and after its date of passage. PASSED AND APPROVED ON THIS 9th DAY OF SEPTEMBER 2019. ATTEST: Laura Wheat, Mayor Kelly Edwards, Town Secretary APPROVED AS TO FORM: L. Stanton Lowry, Town Attorney Resolution 19-26 Page 2 of 2 Westlake Town Council TYPE OF ACTION T x E i o w N o F WESTLAKE RegularMeeting - Consent oisriNorivE sv oEsicN Westlake Town Council Meeting Monday, September 09, 2019 ToPrc: Consideration of an Ordinance Approving a Negotiated Settlement Between the Atmos Cities Steering Committee ("ACSC") and Atmos Energy Corporation, Mid-Tex Division ("Company")regarding the Company's 2019 Rate Review Mechanism (RRM) Filings; and Approving a Settlement Agreement with Attached Rate Tariffs and Proof of Revenues and Other pocuments Connected to these Rate Proceedings. STAFF CoNTAc'T: Jarrod Greenwood, Assistant Town Manager Strategic Ali�nment i i � . � . . , ; . . � � - 1 � High Quality Planning,Design& Development-We are a desirable Increase Fiscal Responsibility Municipal& well planned,high-quality Transparency, Academic Operations Accessibility& community that is distinguished by exemplary design standards. Communications . , Outside the Scope of Identified Strategic Initiatives Time Line - Start Date: September 9, 2019 Completion Date: September 9, 2019 Funding Amount: N/A Status - � Not Funded Source -N/A EXECUTIVE SUMMARY (INCLUDING APPLICABLE ORGANIZATIONAL HISTORY) The Town, along with 171 other Mid-Texas cities served by Atmos Energy Corporation, Mid-Tex Division ("Atmos Mid-Tex" or "Company"), is a member of the Atmos Cities Steering Committee ("ACSC"). In 2007, ACSC and Atmos Mid-Tex settled a rate application filed by the Page 1 of 2 Company pursuant to Section 104.301 of the Texas Utilities Code for an interim rate adjustment commonly referred to as a GRIP filing (arising out of the Gas Reliability Infrastructure Program legislation). That settlement created a substitute rate review process, referred to as Rate Review Mechanism ("RRM"), as a substitute for future filings under the GRIP statute. Since 2007, there have been several modifications to the original RRM Tariff. The most recent iteration of an RRM Tariff was reflected in an ordinance adopted by ACSC members in 2018. On or about April 1, 2019, the Company �led a rate request pursuant to the RRM Tariff adopted by ACSC members. The Company claimed that its cost-of-service in a test year ending December 31, 2018, entitled it to additional system-wide revenues of$70 million. Application of the standards set forth in ACSC's RRM Tariffrequired Atmos to reduce its request to $54 million, $39.3 million of which would be applicable to ACSC members. ACSC's consultants concluded that the system-wide deficiency under the RRM regime should be $38.7 million instead of the claimed $54 million. The amount of the $38.7 million deficiency applicable to ACSC members would be $28.2 million. After the Company reviewed ACSC's consultants' report, ACSC's Executive Committee and the Company negotiated a settlement whereby the Company would receive an increase of $35.4 million from ACSC Cities. The Executive Committee recommends a settlement at this amount. The Effective Date for new rates is October 1, 2019. ACSC members should take action approving the Ordinance before the end of September. Most municipalities have retained original jurisdiction over gas utility rates and services within their corporate limits. The Atmos Cities Steering Committee ("ACSC") is composed of municipalities, including Westlake, in the service area of Atmos Energy Corporation, Mid-Tex Division regardless of whether original jurisdiction has been retained. Atmos is a monopoly public utility provider of natural gas. Because Atmos has no competitors, regulation of the rates it charges its customers in the only way that cities can insure that natural gas rates are equitable and competitive. Working as a coalition, via the Atmos Cities Steering Committee, to review the rates charged by Atmos allows cities to accomplish more collectively than each city could do acting alone. Cities have more than 100 years' experience in regulating natural gas rates in Texas. See attached Staff Report for background on this Atmos rate case. RECOMMENDATiON Recommend adoption of the proposed ordinance adopting a new RRM tariff for the Company. ATTACHMENTS 1. Staff Report. 2. Proposed rate ordinance. 3. Attachments to proposed rate ordinance. Page 2 of 2 August 16, 2019 STAFF REPORT BACKGROUND AND SUMMARY The City, along with 171 other Mid-Texas cities served by Atmos Energy Corporation, Mid- Tex Division ("Atmos Mid-TeX" or "Company"), is a member of the Atmos Cities Steering Committee ("ACSC"). In 2007, ACSC and Atmos Mid-Tex settled a rate application filed by the Company pursuant to Section 104.301 of the TeXas Utilities Code for an interim rate adjustment commonly referred to as a GRIP filing (arising out of the Gas Reliability Infrastructure Program legislation). That settlement created a substitute rate review process, referred to as Rate Review Mechanism ("RRM"), as a substitute for future filings under the GRIP statute. Since 2007, there have been several modifications to the original RRM Tariff. The most recent iteration of an RRM Tariff was reflected in an ordinance adopted by ACSC members in 2018. On or about April 1, 2019, the Company filed a rate request pursuant to the RRM Tariff adopted by ACSC members. The Company claimed that its cost-of-service in a test year ending December 31, 2018, entitled it to additional system-wide revenues of$70 million. Application of the standards set forth in ACSC's RRM Tariff required Atmos to reduce its request to $54 million, $39.3 million of which would be applicable to ACSC members. ACSC's consultants concluded that the system-wide deficiency under the RRM regime should be $38.7 million instead of the claimed $54 million. The amount of the $38.7 million deficiency applicable to ACSC members would be $28.2 million. After the Company reviewed ACSC's consultants' report, ACSC's Executive Committee and the Company negotiated a settlement whereby the Company would receive an increase of $35.4 million from ACSC Cities. 1 The Executive Committee recommends a settlement at this amount. The Effective Date for new rates is October 1, 2019. ACSC members should take action approving the Ordinance before the end of September. PROOF OF REVENUES Atmos generated proof that the rate tariffs attached to the Ordinance will generate $35.4 million in additional revenues from ACSC Cities. That proof is attached as Attachment 1 to this Staff Report. ACSC consultants have agreed that Atmos' Proof of Revenues is accurate. BILL IMPACT The impact of the settlement on average residential rates is an increase of$2.05 on a monthly basis, or 3.7 percent. The increase for average commercial usage will be $6.18 or 2.31 percent. A bill impact comparison is attached as Attachment 2. SUMMARY OF ACSC'S OBJECTION TO THE UTILITIES CODE SECTION 104.301 GRIP PROCESS ACSC strongly opposed the GRIP process because it constitutes piecemeal ratemaking by ignoring declining expenses and increasing revenues while rewarding the Company for increasing capital investment on an annual basis. The GRIP process does not allow any review of the reasonableness of capital investment and does not allow cities to participate in the Railroad Commission's review of annual GRIP filings or allow recovery of Cities' rate case expenses. The Railroad Commission undertakes a mere administrative review of GRIP filings (instead of a full hearing) and rate increases go into effect without any material adjustments. In ACSC's view, the GRIP process unfairly raises customers' rates without any regulatory oversight. In contrast,the RRM process has allowed for a more comprehensive rate review and annual evaluation of expenses and revenues, as well as capital investment. 2 RRM SAVINGS OVER GRIP While residents outside municipal limits must pay rates governed by GRIP, there are some cities served by Atmos Mid-Tex that chose to remain under GRIP rather than adopt RRM. Additionally, the City of Dallas adopted a variation of RRM which is referred to as DARR When new rates become effective on October 1,2019,ACSC residents will have a slight economic monthly advantage over comparable GRIP and comparable DARR rates (see Attachment 3). EXPLANATION OF "BE IT ORDAINED" PARAGRAPHS: L This section approves all findings in the Ordinance. 2. This section adopts the RRM rate tariffs and finds the adoption of the new rates to be just, reasonable, and in the public interest. 3. This section finds that eXisting rates are unreasonable. Such finding is a necessary predicate to establishment of new rates. The new tariffs will permit Atmos Mid-Tex to recover an additional $35.4 million from ACSC Cities. 4. This section approves an eXhibit that establishes a benchmark for pensions and retiree medical benefits to be used in future rate cases or RRM filings. 5. This section approves an exhibit to be used in future rate cases or RRM filings regarding recovery of regulatory liabilities, such as excess deferred income taxes. 6. This section requires the Company to reimburse the City for eXpenses associated with review of the RRM filing, settlement discussions, and adoption of the Ordinance approving new rate tariffs. 7. This section repeals any resolution or ordinance that is inconsistent with the Ordinance. 8. This section finds that the meeting was conducted in compliance with the TeXas Open Meetings Act, TeXas Government Code, Chapter 551. 3 9. This section is a savings clause, which provides that if any section is later found to be unconstitutional or invalid, that finding shall not affect, impair, or invalidate the remaining provisions of this Ordinance. This section further directs that the remaining provisions of the Ordinance are to be interpreted as if the offending section or clause never existed. 10. This section provides for an effective date upon passage. 11. This section directs that a copy of the signed Ordinance be sent to a representative of the Company and legal counsel for ACSC. CONCLUSION The Legislature's GRIP process allowed gas utilities to receive annual rate increases associated with capital investments. The RRM process has proven to result in a more efficient and less costly (both from a consumer rate impact perspective and from a ratemaking perspective) than the GRIP process. Given Atmos Mid-TeX's claim that its historic cost of service should entitle it to recover $70 million in additional system-wide revenues, or $54 million from ACSC Cities, the RRM settlement at$35.4 million for ACSC Cities reflects substantial savings to ACSC Cities in the amount of$18.6 million. ACSC's consultants produced a report indicating that Atmos had justified increased revenues for ACSC Cities of at least$32.7 million. Settlement at$35.4 million is fair and reasonable. The ACSC Executive Committee consisting of city employees of 18 ACSC members urges all ACSC members to pass the Ordinance before September 30, 2019. New rates become effective October 1, 2019. 2557/31/7897507 4 i Attachment 1 Proof of Revenues � �I i ATMOS ENERGY CORP., MID-TEX DIVISION RRM CITIES RATE REVIEW MECHANISM PROOF OF REVENUES-SYSTEMWIDE TEST YEAR ENDING DECEMBER 31,2018 Line No. Customer Class Current Proposed Bills Ccf/MmBtu (a) (b) (c) (d) (e) 1 Residential 2 Customer Charge $ 18.85 $ 19.55 18,572,400 3 Consumption Charge 0.14846 0.17423 876,575,629 4 Revenue Related Taxes 5 Total Class Revenue 6 7 Commercial 8 Customer Charge $ 43.50 $ 46.50 1,492,740 9 Consumption Charge 0.09165 0.09924 576,758,305 10 Revenue Related Taxes 11 Total Class Revenue 12 13 Industrial8�Transportation 14 Customer Charge $ 784.00 $ 845.50 9,804 15 Consumption Charge Tier 1 $ 0.3312 $ 0.3572 10,724,328 16 Consumption Charge Tier 2 $ 0.2425 $ 0.2616 12,346,302 17 Consumption Charge Tier 3 $ 0.0520 $ 0.0561 22,335,700 18 Revenue Related Taxes 19 Total Class Revenue 20 21 Total Excluding Other Revenue 22 23 24 Revenue Related Tax Factor 6.7078% Current Proposed Revenues Revenues Increase (fl (9) (h) $ 350,089,740 $ 363,090,420 130,136,418 152,725,772 32,212,790 34,600,111 $ 512,438,948 $ 550,416,303 $ 37,977,356 $ 64,934,190 $ 69,412,410 52,859,899 57,237,494 7,901,436 8,495,470 $ 125,695,525 $ 135,145,374 $ 9,449,849 $ 7,686,336 $ 8,289,282 3,551,897 3,830,730 2,993,978 3,229,793 1,161,456 1,253,033 1,032,582 1,113,691 $ 16,426,250 $ 17,716,529 $ 1,290,278 $ 654,560,722 $ 703,278,206 $ 48,717,483 Attachment 2 Bill Impact ATMOS ENERGY CORP.,MID-TEX DIVISION AVERAGE BILL COMPARISON-BASE RATES TEST YEAR ENDING DECEMBER 31,2018 Line 1 Rate R(c�47.5 Ccf CURRENT PROPOSED CHANGE 2 Customer charge $ 18.85 3 Consumption charge 47.5 CCF X $ 0.14846 = 7.05 4 Rider GCR Part A 47.5 CCF X $ 0.27375 = 13.00 5 Rider GCR Part B 47.5 CCF X $ 0.27485 = 13.06 6 Subtotal $ 51.96 7 Rider FF&Rider TAX $ 51.96 X 0.06708 = 3.49 8 Total $ 55.45 9 10 Customer charge $ 19.55 11 Consumption charge 47.5 CCF X $ 0.17423 = 8.28 12 Rider GCR Part A 47.5 CCF X $ 0.27375 = 13.00 13 Rider GCR Part B 47.5 CCF X $ 0.27485 = 13.06 14 Subtotal $ 53.89 15 Rider FF&Rider TAX $ 53.89 X 0.06708 = 3.61 16 Total $ 57.50 $ 2.05 17 3.70% 18 19 Rate C(a�367.6 Ccf CURRENT PROPOSEO CHANGE 20 Customer cha�ge $ 43.50 21 Consumption charge 367.6� CCF X $ 0.09165 = 33.69 22 Rider GCR Part A 367.6 CCF X $ 0.27375 � 100.62 23 Rider GCR Part B 367.6 CCF X $ 0.19927 = 73.25 24 Subtotai $ 251.06 25 Rider FF&Rider TAX $ 251.06 X 0.06708 = 16.84 26 Total $ 267.90 27 26 Customer charge $ 46.50 29 Consumption charge 367.6 CCF X $ 0.09924 = 3fi.48 30 Rider GCR Part A 367.6 CCF X $ 0.27375 = 100.62 31 Rider GCR Part B 367.6 CCF X $ 0.19927 = 73.25 32 Subtotal $ 256.85 33 Rider FF 8 Rider TAX $ 256.85 X 0.06708 = 17.23 34 Total $ 274.08 $ 6.18 35 2.31% WP J-3.1 Page 1 of 2 ATMOS ENERGY CORP.,MID-TEX DIVISION AVERAGE BILL COMPARISON-BASE RATES TEST YEAR ENDING DECEMBER 31,2018 Line 36 Rate I(c�4066 MMBTU CURRENT PROPOSED CHANGE 37 Custortier charge $ 784.00 38 Consumption charge 1,500 MMBTU X $ 0.3312 = 436.80 39 Consumption charge 2,566 MMBTU X $ 0.2425 = 622.14 40 Consumption charge 0 MMBTU X $ 0.0520 = - 41 Rider GCR Part A 4,066 MMBTU X $ 2.6733 = 10,868.51 42 Rider GCR Part B 4.066 MMBTU X $ 0.4491 = 1,825.85 43 Subtotal $ 14,597.30 44 Rider FF 8 Rider TAX $ 14,597.30 X 0.06708 = 979.16 45 Total $ 15,576.46 46 47 Customer charge $ 845.50 48 Consumption charge 1,500 MMBTU X $ 0.3572 = 535.80 49 Consumption charge 2,566 MMBTU X $ 0.2616 = 671.14 50 Consumption charge 0 MMBTU X $ 0.0561 = - 51 Rider GCR Part A 4,066 MMBTU X $ 2.6733 = 10,868.51 52 Rider GCR Part B 4,066 MMBTU X $ 0.4491 = 1,825.85 53 Subtotal $ 14,746.80 54 Rider FF&Rider TAX $ 14,746.80 X 0.06708 = 989.19 55 Total $ 15,735.99 $ 159.53 56 1.02% 57 Rate T C�4066 MMBTU CURRENT PROPOSED CHANGE 58 Customer charge $ 784.00 59 Consumption charge 1,500 MMBTU X $ 0.3312 = 496.80 60 Consumption charge 2,566 MMBTU X $ 0.2425 = 622.14 61 Consumption charge 0 MMBTU X $ 0.0520 = - 62 Rider GCR Part B 4,066 MMBTU X $ 0.4491 = 1,825.85 63 Subtotal $ 3,728.79 64 Rider FF&Rider TAX $ 3,728.79 X 0.06708 = 250.12 65 Total $ 3,978.91 66 67 Customer charge $ 845.50 68 Consumption charge 1,500 MMBTU X $ 0.3572 = 535.80 69 Consumption charge 2,566 MMBTU X $ 0.2616 = 671.14 70 Consumption charge 0 MMBTU X $ 0.0561 = - 71 Rider GCR Part B 4,066 MMBTU X $ 0.4491 = 1,825.85 72 Subtotal $ 3,878.29 73 Rider FF 8 Rider TAX $ 3,878.29 X 0.06708 = 260.15 74 Total $ 4,138.44 � 159.53 75 4.01% WP J-3.1 Page 2 of 2 � Attachment 3 RRM Monthly Savings Over GRIP and DARR Rates ACSC Margin Advantage Over GRIP and DARR Residential Customers Effective October 1, 2019 Average Monthly Customer Consumption Average Group Consum�tion Char�e Char�e Avera�e Bilt Monthlv Savin�s ACSC/RRM 47.5 CCF $19.55 $0.17423 $27.83 X Environs 47.5 CCF $19.84 $0.18653 $28.70 $0.87 GRIP ATM GRIP 47.5 CCF $21.69 $0.14846 $28.74 $0.92 DARR 47.5 CCF $21.25 $0.14924 $28.34 $0.51 ORDINANCE NO. 891 AN ORDINANCE OF THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS, APPROVING A NEGOTIATED SETTLEMENT BETWEEN THE ATMOS CITIES STEERING COMMITTEE ("ACSC") AND ATMOS ENERGY CORP., MID-TEX DIVISION REGARDING THE COMPANY'S 2019 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 ATTACHED EXHIBIT ESTABLISHING A BENCHMARK FOR PENSIONS AND RETIREE MEDICAL BENEFITS; APPROVING AN ATTACHED EXHIBIT REGARDING AMORTIZATION OF REGULATORY LIABILITY; 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. WHEREAS, the Town of Westlake, Texas ("Town") is a gas utility customer of Atmos Energy Corp., Mid-Tex Division ("Atmos Mid-Tex" or "Company"), and a regulatory authority with an interest in the rates and charges of Atmos Mid-Tex; and WHEREAS, the Town is a member of the Atmos Cities Steering Committee ("ACSC"), a coalition of similarly-situated cities served by Atmos Mid-TeX("ACSC Cities")that have joined together to facilitate the review of, and response to, natural gas issues affecting rates charged in the Atmos Mid-TeX service area; and WHEREAS, ACSC and the Company worked collaboratively to develop a new Rate Review Mechanism ("RRM") tariff that allows for an expedited rate review process by ACSC Cities as a substitute to the Gas Reliability Infrastructure Program ("GRIP")process instituted by the Legislature, and that will establish rates for the ACSC Cities based on the system-wide cost of serving the Atmos Mid-Tex Division; and WHEREAS, the current RRM tariff was adopted by the Town in a rate ordinance in 2018; and WHEREAS,on about April 1,2019,Atmos Mid-Tex filed its 2019 RRM rate request with ACSC Cities based on a test year ending December 31, 2018; and WHEREAS, ACSC coordinated its review of the Atmos Mid-TeX 2019 RRM filing through its Executive Committee, assisted by ACSC's attorneys and consultants, to resolve issues identified in the Company's RRM filing; and Ordinance 891 Page 1 of 3 WHEREAS, the Executive Committee, as well as ACSC's counsel and consultants, recommend that ACSC Cities approve an increase in base rates for Atmos Mid-Tex of $35.4 million applicable to ACSC Cities; and WHEREAS, the attached tariffs (Exhibit A) implementing new rates are consistent with the recommendation of the ACSC Executive Committee, are agreed to by the Company, and are just, reasonable, and in the public interest; and WHEREAS, the settlement agreement sets a new benchmark for pensions and retiree medical benefits (Exhibit B); and WHEREAS,the settlement agreement establishes an amortization schedule for regulatory liability(Exhibit C); and WHEREAS, the RRM Tariff contemplates reimbursement of ACSC's reasonable eXpenses associated with RRM applications; NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS: Section 1. That the findings set forth in this Ordinance are hereby in all things approved. Section 2. That, without prejudice to future litigation of any issue identified by ACSC, the Town Council finds that the settled amount of an increase in revenues of$35.4 million for ACSC Cities represents a comprehensive settlement of gas utility rate issues affecting the rates, operations, and services offered by Atmos Mid-Tex within the municipal limits arising from Atmos Mid-Tex's 2019 RRM filing, is in the public interest, and is consistent with the Town's authority under Section 103.001 of the TeXas Utilities Code. Section 3. That the eXisting rates for natural gas service provided by Atmos Mid-Tex are unreasonable. The new tariffs attached hereto and incorporated herein as Exhibit A, are just and reasonable, and are designed to allow Atmos Mid-Tex to recover annually an additional $35.4 million from customers in ACSC Cities, over the amount allowed under currently approved rates. Such tariffs are hereby adopted. Section 4. That the ratemaking treatment for pensions and retiree medical benefits in Atmos Mid-Tex's next RRM filing shall be as set forth on Exhibit B, attached hereto and incorporated herein. Section 5. That amortization of regulatory liability shall be consistent with the schedule found in attached Exhibit C attached hereto and incorporated herein. Section 6. That Atmos Mid-Tex shall reimburse the reasonable ratemaking expenses of the ACSC in processing the Company's 2019 RRM filing. Ordinance 891 Page 2 of 3 Section 7. That to the extent any resolution or ordinance previously adopted by the Council is inconsistent with this Ordinance, it is hereby repealed. Section 8. That the meeting at which this Ordinance was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. Section 9. That if any one or more sections or clauses of this Ordinance is adjudged to be unconstitutional or invalid, such judgment shall not affect, impair, or invalidate the remaining provisions of this Ordinance, and the remaining provisions of the Ordinance shall be interpreted as if the offending section or clause never existed. Section 10. That consistent with the Town Ordinance that established the RRM process, this Ordinance shall become effective from and after its passage with rates authorized by attached tariffs to be effective for bills rendered on or after October 1, 2019. Section 11. That a copy of this Ordinance shall be sent to Atmos Mid-Tex, care of Chris Felan, Vice President of Rates and Regulatory Affairs Mid-Tex Division, Atmos Energy Corporation, 5420 LJB Freeway, Suite 1862, Dallas, Texas 75240, and to Geoffrey Gay, General Counsel to ACSC, at Lloyd Gosselink Rochelle & Townsend, P.C., 816 Congress Avenue, Suite 1900, Austin, Texas 78701. PASSED AND APPROVED ON THIS 9TH DAY OF SEPTEMBER 2019. ATTEST: Laura L. Wheat, Mayor APPROVED AS TO FORM: Kelly Edwards, Town Secretary L. Stanton Lowry, Town Attorney Ordinance 891 Page 3 of 3 Exhibit A Rate Tariffs Effective �ctober 1, 2019 MID-TEX DIVISION RRC Tariff No: ATMOS ENERGY CORPORATION RATE SCHEDULE: R—RESIDENTIAL SALES APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 10101l2019 PAGE: Application Applicable to Residential Customers for all natural gas provided at one Point of Delivery and measured through one meter. Type of Service Where service of the type desired by Customer is nat already available at the Point of Delivery,additional charges and special contract arrangerrsents between Company and Customer may be required prior to service being furnished. Monthly Rate Custorrser's monthly bill will be calculated by adding the following Customer and Ccf charges to the amounts due under the riders listed below: Charge Amount Customer Charge per Bill $ 19.55 per month Rider CEE Surcharge $ 0.05 per month' Total Customer Charge $ 19.60 per month Commodity Charge—All Ccf $0.17423 per Ccf Gas Cost Recovery: Plus an ainount for gas costs and upstream transportation costs calculated in accordance with Part{a)and Part(b), respectively,of Rider GCR. Weather Normalization Adjustment: Plus or Minus an amount for weather normalization calculated in accordance with Rider WNA. Franchise Fee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider FF. Rider FF is only applicable to customers inside the corporate limits of any incorporated municipality. Tax Adjustment: Plus an amount for tax calculated in accordance with Rider TAX. Surcharges: Plus an amount for surcharges calculated in accordance with the applicable rider(s). Agreement An Agreement for Gas Service may be required. Notice Service hereunder and the rates for services provided are subject to the orders of regulatory bodies having jurisdiction and to the Company's Tariff for Gas Service. 'Reference Rider CEE-Conservation and Energy Efficiency as approved in GUD 10170. Surcharge billing effective July 1,2019. MID-TEX DIVISION RRC Tariff No: ATMOS ENERGY CORPORATION RATE SCHEDULE: C—COMMERCIAL SALES APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 10/01/2019 PAGE: Application Applicable to Commercial Customers for all natural gas provided at one Point of Delivery and measured through one meter and to Industrial Customers with an average annual usage of less than 30,000 Ccf. Type of Service Where service of the type desired by Custorrzer is not already available at the Point of Delivery, additional charges and special contract arrangements between Company and Customer may be required prior to service being furnished. Monthly Rate Customer's monthly bill will be calculated by adding the following Customer and Ccf charges to the amounts due under the riders listed below: Charge Amount Customer Charge per Bill $46.50 per month Rider CEE Surcharge $ 0.02 per monthz Total Customer Charge $46.52 per month Commodity Charge—All Ccf $0.09924 per Ccf Gas Cost Recovery: Plus an amount for gas costs and upstream transportation costs calculated in accordance with Part(a)and Part(b), respectively,of Rider GCR. Weather Normalization Adjustment: Plus or Minus an amount for weather normalization calculated in accordance with Rider WNA. Franchise Fee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider FF. Rider FF is only applicable to customers inside the corporate limits of any incorporated municipality. Tax Adjustment: Plus an amount for tax calculated in accordance with Rider TAX. Surcharges: Plus an amount for surcharges calculated in accordance with the applicable rider(s). Agreement An Agreement for Gas Service may be required. Notice Service hereunder and the rates for services provided are subject to the orders of regulatory bodies having jurisdiction and to the Company's Tariff for Gas Service. 'Reference Rider CEE-Conservation and Energy Efficiency as approved in GUD 10170. Surcharge billing effecGve July 1,2019. MID-TEX DIVISION RRC Tariff Wo: ATMOS ENERGY CORPORATION RATE SCHEDULE: I—INDUSTRIAL SALES APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 10/01/2019 PAGE: Application Applicable to Industrial Customers with a maximum daily usage(MDU)of less than 3,500 MMBtu per day for all natural gas provided at one Point of Delivery and measured through one meter. Service for Industrial Custamers with an MDU equal to or greater than 3,500 MMBtu per day will be provided at Company's sole option and will require special contract arrangements between Company and Customer. Type of Service Where service of the type desired by Customer is not already available at the Point of Delivery,additional charges and special contract arrangements between Company and Customer may be required prior to service being furnished. Monthly Rate Customer's monthly bill will be calculated by adding the following Customer and MMBtu charges to the amounts due under the riders listed below: Charge Amount Customer Charge per Meter $845.50 per month First 0 MMBtu to 1,500 MMBtu $0.3572 per MMBtu Next 3,500 MMBtu $0.2616 per MMBtu All MMBtu over 5,000 MMBtu $0.0561 per MMBtu Gas Cost Recovery: Plus an amount for gas costs and upstream transportation costs calculated in accordance with Part(a)and Part(b), respectively, of Rider GCR. Franchise Fee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider FF. Rider FF is only applicable to customers inside the corporate limits of any incorporated municipality. Tax Adjustment: Plus an amount for tax calculated in accordance with Rider TAX. Surcharges: Plus an amount for surcharges calculated in accordance with the applicable rider(s). Curtailment Overpull Fee Upon notification by Company of an event of curtailment or interruption of Customer's deliveries, Customer will, for each MMBtu delivered in excess of the stated level of curtailrrtent or interruption, pay Company 200% of the midpoint price for the Katy point listed in Plafts Gas Daily published for the applicable Gas Day in the table entitled"Daily Price Survey." Replacement Index In the event the "midpoint" or ucommon" price for the Katy point listed in Plaits Gas Daily in the table entitled"Daily Price Survey"is no longer published, Company will calculate the applicable imbalance fees utilizing a daily price index recognized as authoritative by the natural gas industry and most closely approximating the applicable index. MID-TEX DIVISION RRC Tariff No: ATMOS ENERGY CORPORATION RATE SCHEDULE: 1—INDUSTRIAL SALES APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 10/01/2019 PAGE: Agreement An Agreement for Gas Service may be required. Notice Service hereunder and the rates for services provided are subject to the orders of regulatory bodies having jurisdiction and to the Company's Tariff for Gas Service. Special Conditions In order to receive service under Rate I, Customer must have the type of ineter required by Company. Customer must pay Company all costs associated with the acquisition and installation of the rrzeter. MID-TEX DIVISION RRC Tariff No: ATMOS ENERGY CORPORATION RATE SCHEDULE: T—TRANSPORTATION APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 10/01/2019 PAGE: Application Applicable, in the event that Company has entered into a Transportation Agreement, to a custorrter directly connected to the Atmos Energy Corp., Mid-Tex Division Distribution System (Customer) for the transportation of all natural gas supplied by Customer or Customer's agent at one Point of Delivery for use in Customer's facility. Type of Service Where service of the type desired by Customer is not already available at the Point of Delivery, additional charges and special contract arrangements between Company and Customer may be required prior to service being furnished. Monthly Rate Customer's bill will be calculated by adding the following Customer and MMBtu charges to the amounts and quantities due under the riders listed below: Charge Amount Customer Charge per Meter $845.50 per month First 0 MMBtu to 1,500 MMBtu $0.3572 per MMBtu Next 3,500 MMBtu $0.2616 per MMBtu All MMBtu over 5,000 MMBtu $0.0561 per MMBtu Upstream Transportation Cost Recovery: Plus an amount for upstream transportation costs in accordance with Part(b)of Rider GCR. Retention Adjustment: Plus a quantity of gas as calculated in accordance with Rider RA. Franchise Fee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider FF. Rider FF is only applicable to customers inside the corporate limits of any incorporated municipality. Tax Adjustrrsent: Plus an amount for tax calculated in accordance with Rider TAX. Surcharges: Plus an amount for surcharges calculated in accordance with the applicable rider(s). Imbalance Fees All fees charged to Customer under this Rate Schedule will be charged based on the quantities determined under the applicable Transportation Agreement and quantities will not be aggregated for any Customer with multiple Transportation Agreements for the purposes of such fees. Monthly Imbalance Fees Customer shall pay Company the greater of(i)$0.10 per MMBtu, or(ii) 150%of the difference per MMBtu between the highest and lowest "midpoinY' price for the Katy point listed in Platts Gas Daily in the table entitled "Daily Price Survey" during such month, for the MMBtu of Customer's monthly Cumulative Imbalance,as defined in the applicable Transportation Agreement, at the end of each month that exceeds 10%of Customer's receipt quantities for the month. MID-TEX DIVISION RRC Tariff No: ATMOS ENERGY CORPORATION RATE SCHEDULE: T—TRANSPORTATION APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 10l01l2019 PAGE: Curtailment Overpull Fee Upon notification by Company of an event of curtailment or interruption of Custom�r's deliveries, Customer will, for each MMBtu delivered in excess of the stated level of curtailment or interruption, pay Campany 200% of the midpoint price for the Katy point listed in Platts Gas Daily published for the applicable Gas Day in the table entitled"Daily Price Survey." Replacement Index In the event the "midpoinY' or "common" price for the Katy point listed in Platts Gas Daily in the table entitled"Daily Price Survey"is no longer published, Company will calculate the applicable imbalance fees utilizing a daily price index recognized as authoritative by the natural gas industry and most closely approximating the applicable index. Agreement A transportation agreement is required. Notice Service hereunder and the rates for services provided are subject to the orders of regulatory bodies having jurisdiction and to the Company's Tariff for Gas Service. Special Conditions In order to receive service under Rate T, customer must have the type of ineter required by Company. Customer must pay Company all costs associated with the acquisitian and installation of the meter. MID-TEX DIVISION ATMOS ENERGY CORPORATION RIDER: WNA—WEATHER NORMALIZATION ADJUSTMENT APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 11/01l2019 PAGE: Provisions for Adiustment The Commodity Charge per Ccf{100 cubic feet) for gas service set forth in any Rate Schedules utilized by the cities of the Mid-Tex Division service area for determining normalized winter period revenues shall be adjusted by an amount hereinafter clescribed, which amount is referred to as the "Weather Normalization Adjustment." The Weather Normalization Adjustment shall apply to all temperature sensitive residential and commercial bills based on meters read during the revenue rrionths of November through April. The five regional weather stations are Abilene,Austin, Dallas,Waco, and Wichita Falls. Comoutation of Weather Normalization Adiustment The Weather Normalization Adjustment Factor shall be computed to the nearest one-hundredth cent per Ccf by the following formula: (HSFi x (NDD-ADD)) WNAF� = Ri (BLi + (HSFi x ADD) ) Where i = any particular Rate Schedule or billing classification within any such particular Rate Schedule that contains more than one billing classification WNAFi = Weather Normalization Adjustrrzent Factor for the ith rate schedule or classification expressed in cents per Ccf Ri = Commodity Charge rate of temperature sensitive sales for the ith schedule or classification. HSFi = heat sensitive factor for the ith schedule or classification divided by the average bill count in that class NDD = billing cycle normal heating degree days calculated as the simple ten-year average of actual heating degree days. ADD = billing cycle actual heating degree days. Bli = base load sales for the ith schedule or classification divided by the average bill count in that class The Weather Normalization Adjustment for the jth customer in ith rate schedule is computed as: WNA;= WNAF; x q;� Where q�;is the relevant sales quantity for the jth customer in ith rate schedule. MID-TEX DIVISION ATMOS ENERGY CORPORATION RIDER: WNA—WEATHER NORMALIZATION ADJUSTMENT APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 11/01/2019 PAGE: Base Use/Heat Use Factors Residential Commercial Base use Heat use Base use Heat use Weather Station Ccf Ccf/HDD Ccf Ccf/HDD Abilene 9.77 0.1487 88.49 0.7036 Austin 9.04 0.1537 201.48 1.0000 Dallas 13.07 0.2202 184.64 1.1385 Waco 8.77 0.1470 135.70 0.7744 Wichita 11.40 0.1468 117.90 0.5943 Falls Weather Normalization Adiustment(WNA)Report On or before June 1 of each year, the company posts on its website at atmosenergy.com/mtx-wna, in Excel format, a Weather Normalization Adjustment (WNA) Report to show how the company calculated its WNAs factor during the preceding winter season. Additionally, on or before June 1 of each year, the company files one hard copy and an Excel version of the WNA Reporf with the Railroad Commission of Texas'Gas Services Division,acldressed to the Directar of thatDivision. Exhibit B 2019 Benchmark for Pensions and Retiree Medical Benefits ATMOS ENERGY CORP.,MID-TEX DIVISION PENSIONS AND RETIREE MEDICAL BENEFITS FOR CITIES APPROVAL TEST YEAR ENDING DECEMBER 31,2018 Shared Services Mid-Tex Di�ect os- upp emen os- Li�e Pension Employment Pension Executive Benefit Employment Adjustment No. Description Account Plan Benefit Plan Account Plan Plan Benefit Plan Total fa) (b1 (�) Id) (e) (f1 {g) Proposed Benefits Benchmark-Fiscal Year 2019 Willis Towers 1 Watson Report as adjusted(1)(2)(3) $ 2,744,088 $ 2,267,927 $ 4,724,119 $ 193,211 $ 2,621,842 2 Allocation to Mid-Tex 43.48� 43.4896 73.88% 100.00% 73.88% Proposed Benefits Benchmark Costs Allocated to Mid-Tex(Ln 1 x Ln 2) 3 $ 1,193,029 $ 986,012 $ 3,490,241 $ 193,211 $ 1,937,051 4 0&M and Capital Allocation Factor 100.009� 100.00% 100.00% 100.00% 100.00% 5 Propased Benefits Benchmark Costs to Approve(Ln 3 x Ln 4)(3) $ 1,193,029 $ 986,012 $ 3,490,241 $ 193,211 $ 1,937,051 $ 7,799,544 6 7 g Summary of Costs to Approve(1): 9 10 0&M Expense Factor(WP_F-2.3,Ln 2) 81.35% 81.35% 38.28% 16.24% 38.28% 11 12 13 Total Pensian Account Plan $ 970,514 $ 1,336,038 $ 2,306,553 14 Total Post-Emplayment Benefit Plan $ 802,108 $ 741,489 1,543,597 15 Total Supplemental Executive Benefit Plan $ 31,377 31,377 16 Total(Ln 13+Ln 14+Ln 15) $ 970,514 $ 802,108 $ 1,336,038 $ 31,377 $ 741,489 $ 3,881,527 17 18 Notes: 19 1.Studies not applicable to Mid-Tex or Shared Services are omitted. 20 2.The Company is requssting that the benchmark amount approved by the RRM Cities for future periads include only the expense amaunt. 21 The amount attributable to capital would continue to be recorded to utility plant through the overhead process as described in the CAM. 22 3.SSU amounts exclude cost centers which da not allacate to Mid-Tex for rate making purpases. Exhibit C 2U19 Amortization Schedule for Regulatory Liability ATMOS ENERGY CORP., MID-TEX DIVISION RATE BASE ADJUSTMENTS TEST YEAR ENDING DECEMBER 31, 2018 AMORTIZATION OF REGULATORY LIABILITY Beginning of Year End of Year Rate Base Rate Base Line Year Ended Adjustment Annual Adjustment No. Dec.31 Amount(1) Amortization (2) Amount (a) (b) (c) (d) 1 2018 $ 290,043,948 $ - 290,043,948 2 2019 290,043,948 12,085,165 277,958,784 3 2020 277,958,784 12,085,165 265,873,619 4 2021 265,873,619 12,085,165 253,788,455 5 2022 253,788,455 12,085,165 241,703,290 6 2023 241,703,290 12,085,165 229,618,126 7 2024 229,618,126 12,085,165 217,532,961 8 2025 217,532,961 12,085,165 205,447,797 9 2026 205,447,797 12,085,165 193,362,632 10 2027 193,362,632 12,085,165 181,277,468 11 2028 181,277,468 12,085,165 169,192,303 12 2029 169,192,303 12,085,165 157,107,139 13 2030 157,107,139 12,085,165 145,021,974 14 2031 145,021,974 12,085,165 132,936,810 15 2032 132,936,810 12,085,165 120,851,645 16 2033 120,851,645 12,085,165 108,766,481 17 2034 108,766,481 12,085,165 96,681,316 18 2035 96,681,316 12,085,165 84,596,152 19 2036 84,596,152 12,085,165 72,510,987 20 2037 72,510,987 12,085,165 60,425,823 21 2038 60,425,823 12,085,165 48,340,658 22 2039 48,340,658 12,085,165 36,255,494 23 2040 36,255,494 12,085,165 24,170,329 24 2041 24,170,329 12,085,165 12,085,165 25 2042 12,085,165 12,085,165 (0) 27 28 29 Revenue Related Tax Factor 6.71% See WP F-5.1 Revenue Related Taxes on Annual Amortization *Tax 30 Amortization (see WP_B-6.3} $ 810,653 Factor 31 Related Taxes(see WP_B-6.3) $ 12,905,421 Amortization +Taxes 32 33 Notes: 34 1. The beginning 2018 balance is the September, 2018 balance. The regulatory 35 liability for excess deferred taxes is an estimate. This estimate will be 36 finalized when the Company files its federal tax return in July, 2019. To the 37 extent that this estimate changes with the filing of the Company's tax return, 38 the Company will'true-up'the amount in the 2020 RRM filing. 39 2. The annual amortization of a 24 year recovery period is based on the 40 Reverse South Georgia Method. 41 3.The Regulatory Liability is recorded to FERC Account 253,Sub Account 27909. Town Cou nci I Item # 7 — Adjournment Regular Session