KCC Allots Atmos Energy One-Third of Requested Rate Hike

On March 17, the Kansas Corporation Commission (KCC) issued an order (Docket No. 16-ATMG-079-RTS) approving a $2.22 million annual revenue increase in energy rates for Atmos Energy’s 131,000 natural gas customers in the Sunflower State – who will see a 39 cent uptick on their monthly bills.

The rates finally approved represented about one-third of the company’s original request. Citing revenue deficiencies based upon normalized operating expenses, Atmos Energy’s initial application had requested a revenue spike of $6.6 million. A settlement agreement proposed in January reduced the request to its current level and instituted a three-year moratorium on further base rate increases.

The commission denied approval for Atmos to implement a System Integrity Program (SIP) tariff for the advanced replacement of aging and obsolete pipeline infrastructure – preferring instead to defer consideration to another docket (No. 15-GIMG-343-GIG) that will be up for discussion at the end of March, which considers the replacement of aging infrastructure on an industry-wide level.

Commissioner Shari Feist Albrecht dissented on denying the SIP, citing her concerns that the decision would send an inappropriate message to the energy industry. Referring to an earlier case in which the commission had denied an SIP request, but had encouraged the company to re-file, Albrecht said, “I’m worried about the message that we send to the industry when we invite them to do certain things and then we don’t allow them to do so,” she said. “I don’t like the idea of changing the rules.”

She argued, “The SIP tariff provides an opportunity for Atmos Energy, the Citizens’ Utility Ratepayer Board (CURB), and [KCC] staff to collaborate on a long-term infrastructure replacement plan to ensure public safety and system reliability. The SIP provides revenue certainty for Atmos Energy and rate certainty for Atmos Energy’s customers at a time when natural gas prices are low; taking a phased-in approach that is open and transparent.”

“Atmos Energy honestly is disappointed that the commission chose not to approve our SIP request,” James Bartling, director of Public Affairs for the Colorado-Kansas Division of the company told Retail Energy Buyer on March 18. “We will be working diligently with the commission, its staff, and other utilities to arrive at a settlement that will meet the satisfaction of everyone concerned.”