If approved without changes, the proposed rate change will add $3.46 to average bills, according to estimates.
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Atmos Energy, the north Texas gas utility, will collect an additional $109.5 million annually from ratepayers under a proposed interim rate increase for its pipeline service.
Atmos filed for the rate increase on Feb. 13. When approved as expected, the new rates will add to a separate Atmos proposal to increase average bills inside the City of Dallas by $11.25. It’s also separate from a “Rate Review Mechanism” filing expected from Atmos in April to increase rates in other DFW areas.
THE DETAILS
Under this latest proposal, Atmos would assess new pipeline capacity charges of $24.17485 at the Mid-Tex “city gate,” as described below. This represents an increase of $2.78284. If approved without changes, this change will add $3.46 to average bills, according to estimates. The effective date for the increase is May 29.
It’s expected that the proposed charges will receive easy approval from the Texas Railroad Commission because Atmos filed for them under the state’s Gas Reliability Infrastructure Program that allows such increases to take effect without extensive prior review. Atmos has told its shareholders that it receives reimbursements for 85 percent of its expenditures through such interim rate “tracking” mechanisms.
CITY GATE SERVICE
In Texas, gas utility pipeline service charges typically are assessed at the “city gate,” which is where large capacity pipelines connect to smaller gas distribution lines that serve individual communities. As such, cost increases for city gate service will trickle down into rates paid by all end-use customers residing within communities indirectly served by the pipelines.
City gate capacity charges are measured based on million British thermal units of the maximum daily quantity of gas flowing over the pipeline system, or “MMBtu of MDQ”. Under Atmos’s latest proposal, the interim capacity charge would increase both for the Mid-Tex city gate (serving the Dallas and Fort Worth area), and for separate city gate service for other parts of the Atmos system. The cost of non-Mid-Tex city gate service would increase to $23.78534 per MDQ, up from the current charge of $21.00250, under the proposal.
You can read more on the Railroad Commission website, under Case No. 00030598.