Coppell residents and businesses are expected to see a utility rate increase in December, but officials said it’s not as bad as it could have been.
Tuesday the Coppell City Council OK’d a resolution that approves a negotiated settlement between Atmos Energy Corporation, Mid-Tex Division, and the Atmos Cities Steering Committee, of which Coppell is a part.
Based on the settlement, the average residential rates will increase $5.15 per month, or 9.9 percent, according to a memo from the city. The average commercial usage will increase by $15.48 per month, or 6.6 percent.
Coppell is one of 172 cities in the state served by Atmos Energy Corporation, Mid-Tex Division that is a part of the Atmos Cities Steering Committee (ACSC).
In 2007 the committee and Atmos settled a rate application filed by Atmos for an interim rate adjustment known as a Gas Reliability Infrastructure Program (GRIP) filing. That created a rate revenue mechanism (RRM), a substitute for future GRIP statute filings.
The memo stated that the committee objected to using 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.”
It also stated that the process doesn’t allow for capital investment review and that cities can’t participate in the Railroad Commission’s GRIP filing reviews or allow for recovery of cities’ rate case expenses.
“In ACSC’s view, the GRIP process unfairly raises customers’ rates without any regulatory oversight,” the memo stated. “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.”
On March 31, Atmos filed a rate request pursuant to the RRM tariff, claiming that its cost-of-service in a test period that ended last year entitled the company to additional revenues of $141.2 million. That amount was later reduced to $136.3 million, with $98.7 million of that being applicable to committee member cities.
The committee’s consultants determined the deficiency under the RRM system was actually $111.5 million, with $80.8 million being applicable to committee member cities.
The two sides reached a settlement where Atmos would receive an increase of $90 million from the cities but not until Dec. 1.
“This should save ratepayers approximately $9 million such that the case is functionally equivalent to ACSC’s consultants’ recommendation of $80.8 million,” a memo from the city read.