Atmos Energy settlement would cut proposed Colorado gas-rate increase to $10.7 million

A settlement in Atmos Energy’s Colorado gas-rate case would cut the company’s proposed annual base-rate increase from about $17.56 million to $10.7 million, Colorado Public Utilities Commission staff told commissioners June 10.

Staff described the item as informational and said they had no recommendation for commissioners at the PUC’s June 10 weekly meeting. In that briefing, staff said an administrative law judge issued Decision No. R26-0317 on May 21 approving a unanimous comprehensive settlement. But the accessible public record reviewed for this story does not clearly show whether the full commission has since entered a final order adopting that settlement.

That distinction matters because Atmos originally asked for a net annual base-rate revenue increase of about $17.56 million. On the same case page, the commission said the filing would have raised average monthly residential bills by about $5.32 to $5.61, depending on territory. The public sources reviewed for this story do not provide updated class-by-class bill estimates under the settlement, but the lower revenue figure indicates a smaller increase than Atmos first proposed.

According to the June 10 staff summary, the settlement would:

• eliminate Atmos’ proposed facilities-charge increase;
• reduce requested rate-case expense recovery to $500,000 amortized over three years, down from the $675,000 amount staff summarized from the original request;
• reduce the stipulated weighted average cost of capital to 7%, with a return on equity range of 9.25% to 9.45% and an equity ratio of 53% to 55%;
• require proposed cloud-computing costs to be amortized rather than capitalized; and
• withdraw Atmos’ proposed tax rider, which staff said was intended to capture income-tax effects tied to the 2022 federal tax act and possible tax-law changes.

One cost-recovery mechanism would remain in a narrower form. Staff told commissioners that existing System Safety and Integrity Rider, or SSIR, rates would be set to zero, but uncollected 2024 SSIR true-up balances would be added to the 2025 SSIR true-up and recovered through an SSIR rate that would take effect Jan. 1, 2027. That rate would end once the 2024 and 2025 true-up amounts are recovered.

So the settlement would not erase all SSIR-related recovery. Instead, it would end the current SSIR rate going forward while still allowing Atmos to collect prior true-up balances, based on staff’s description to commissioners.

What remains less clear from the accessible public record is the bill impact on nonresidential customers. The public sources reviewed for this story do not provide settled monthly bill estimates for business classes, even though the original case materials discussed cost-allocation questions among customer groups.

The accessible record also does not identify any issues that remained contested after the settlement beyond earlier concerns raised by Energy Outreach Colorado about customer-income and service-territory data. In the June 10 briefing, staff said Atmos agreed to provide GIS shape files for its service territory and meter-by-county information in discovery during its next rate case in response to those concerns.

Atmos’ original filing covered natural-gas service in Colorado’s Black Hills, Greeley-Fort Morgan, Longmont, Pueblo and San Luis Valley divisions, according to the PUC’s gas-rate-case page.