During an earnings call, the company reported $242.2 million in increased capital expenditures during the 12-month period ending Sept. 30, 2020.

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Atmos customers across its multi-state system may face bill increases of more than 40 percent by 2025, according to information provided by the Dallas-based gas distribution company.

Atmos Energy executives also reported that earnings-per-share had increased for the 18th consecutive year, and that the company’s revenues were up — ­largely because of rate increases and customer additions.

Atmos Energy serves more than 3 million distribution customers across eight states, including 2 million customers in Texas.  Its Mid-Tex division covers Dallas, Fort Worth and a large swath of central and north Texas. Atmos also operates a West Texas division and a Texas pipeline division.

Addressing customers during a fourth quarter earnings call on Nov. 12, Chief Executive Officer Kevin Akers and Chief Financial Officer Chris Forsythe delivered a generally sunny report regarding the gas company’s finances and projected revenues.  “We remain well positioned to continue delivering annual earnings per share growth in the six to eight percent range,” Akers said during the call.

Projected Bill Increases

However, materials provided by the company also project average monthly bills going from $48 in 2020 to $68 in 2025.  The projected increase applies to bills across the company’s multi-state system and assumes an approximately 22 percent increase in the commodity price of natural gas. Presumably, the average increase for Texas customers may be more or less than the system-wide projected increase.

Separately, the company reported during the 4Q call that it increased capital expenditures by $242.2 million to $1.9 billion during the 12-month period ending Sept. 30, 2020. The company reported that it applied 88 percent of the capital expenditures to safety and reliability projects, with $955 million going to transmission and distribution projects.

Atmos earlier committed to replace all leak-prone cast iron pipe from its Texas system by the end of next year. The company reported during its earnings call that those efforts remain on track, although 356 miles of the pipe remain in the ground.

Highlights

Other highlights of the Atmos earnings call include:

  • Atmos plans to replace 5,000 to 6,000 miles of distribution and transmission lines over the next five years. That amounts to between 6 and 8 percent of all the lines on its system.
  • Atmos noted that its investments typically begin earning returns within 6 months. This is because of “constructive regulatory mechanisms” in the states in which it operates.  One such mechanism is the Gas Reliability Infrastructure Program, which allows the company to increase rates with little regulatory oversight on an annual basis. You can read more about GRIP here.
  • Atmos reported $824.1 million in operating income during the 12 months ending September 30, 2020, as compared to $746.1 million during the same period in 2019. That year-to-year growth was driven in part by $86.8 million in additional revenue from rate increases and $13.7 million from customer growth.
  • Due to the timing of the fiscal year, the impacts of COVID-19 had limited impact on the company’s operating income reported during the earnings call.

You can listed to the company’s 4Q webcast and find accompanying material at this link. 

– R.A. Dyer