Atmos Energy 1997 Annual Report Download - page 35

30 ATMOS ENERGY CORPORATION
Results of operations and net income for the previously separate companies for the periods
prior to the merger are as follows:
10 MONTHS ENDED YEAR ENDED
JULY 31, SEPTEMBER 30,
(In thousands) 1997 1996 1995
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Operating revenues: (Unaudited)
Atmos..................................................................... $ 474,069 $483,744 $435,820
UCGC ..................................................................... 356,325 402,947 313,735
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$ 830,394 $886,691 $749,555
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Net income:
Atmos..................................................................... $ 23,079 $ 23,949 $ 18,873
UCGC ..................................................................... 19,434 17,202 9,935
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$ 42,513 $ 41,151 $ 28,808
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Dividends per share:
Atmos..................................................................... $ .75 $ .96 $ .92
UCGC ..................................................................... $ .76 $ 1.02 $ 1.02
THREE Rates
As of September 30, 1997, the Company did not have any rate cases currently pending
except for a “show cause” hearing scheduled to review rates in Colorado before the
Colorado Public Utility Commission in December 1997. Rate cases completed during the
three years ended September 30, 1997 are summarized below.
In November 1996, UCGC filed to increase rates on an annual basis by $1,234,000 to
approximately 23,000 customers in the state of Illinois. Effective July 9, 1997, the Illinois
Commerce Commission granted a rate increase of $428,000 in annual revenues. The
increase will be followed by a rate moratorium until June 2000. Effective December 2,
1996, UCGC received an annual rate increase of $3,160,000 for approximately 70,000
customers in the state of Georgia. UCGC had filed in May 1996 to increase rates by
$5,003,000 on an annual basis. Effective May 17, 1996, UCGC received an annual rate
increase of $410,000 in the state of Iowa. UCGC had filed to increase rates by $750,000
on an annual basis. Included in the rate increase in Iowa was the recovery of $1,787,000
over a ten-year period related to UCGC’s agreement with Union Electric Company
(“Union Electric”) whereby Union Electric agreed to assume responsibility for UCGC’s
continuing investigation and environmental response action obligations as outlined in the
feasibility study pertaining to a manufactured gas plant site in Keokuk, Iowa.
Effective November 15, 1995, UCGC received an annual rate increase of $2,227,000 in the
state of Tennessee. UCGC had filed to increase rates by $3,951,000 on an annual basis.
Effective October 14, 1995, UCGC received an annual rate increase of $903,000 in the
state of Missouri. UCGC had filed to increase rates by $1,100,000 on an annual basis.
Effective September 1, 1995, UCGC received an annual rate increase of $2,700,000 in the
state of Kansas. UCGC had filed to increase rates by $4,230,000 on an annual basis.
Effective February 7, 1995, UCGC received an annual rate increase of $253,000 in the
state of South Carolina. UCGC had filed to increase rates by $341,000 on an annual basis.
The Georgia Public Service Commission and the Tennessee Regulatory Authority have
approved Weather Normalization Adjustments (“WNAs”). The WNAs, effective October
through May each year in Georgia and November through April each year in Tennessee,
allow the United Cities Division to increase the base rate portion of customers’ bills when
weather is warmer than normal and decrease the base rate when weather is colder than
normal. The net effect of the WNAs was an increase/(decrease) in revenues of $2,643,000,
($2,612,000) and $1,030,000 in 1997, 1996 and 1995, respectively.
In April 1995, UCGC filed to increase rates on an annual basis by $810,000 to approxi-
mately 18,000 customers in the state of Virginia. UCGC was granted permission by the
Virginia State Corporation Commission (“Virginia Commission”) to implement the pro-
posed 3% rate increase, subject to refund, effective September 29, 1995. In May 1997,
the Virginia Commission issued an order approving a rate increase of .4%, effective
September 29, 1995, which is expected to generate additional annual revenues of
$103,000. Money over-collected from customers under the interim rates was credited to
customer accounts with interest.
Effective April 1, 1995, and for an experimental two-year period, the PGA clause in
Tennessee was modified by an incentive rate program which compares UCGC purchased
gas prices to market prices. The gains or losses recognized by UCGC as a result of the
incentive program were limited to a maximum of $25,000 per month in the plan year
ended March 31, 1996, and limited to a maximum of $600,000 per year in the plan year
ended March 31, 1997. UCGC recognized gains related to the incentive programs in
Tennessee of $675,000 and $213,000 for fiscal 1996 and 1995, respectively. On March
5, 1997, the Tennessee Court of Appeals (the “Court”) issued a decision reversing and
remanding the Tennessee Regulatory Authority’s order which approved the incentive rate
program for the plan year ending March 31, 1997. UCGC has filed to make the program
permanent, effective April 1, 1997 and a hearing has not been held as of this date. An
experimental incentive rate program similar to the Tennessee program has also been
approved in Georgia for a two-year period that began April 1, 1997.
In May 1996, the Company filed to increase revenues by approximately $7.7 million for
a portion of its Energas Division service area, which includes approximately 200,000 cus-
tomers inside the city limits of 67 cities in West Texas. All cities either approved, or took
no action to reject, a settlement allowing a $5.3 million increase in annual revenues to be
effective for bills rendered on or after November 1, 1996. In October 1996, the Company
filed a rate request with the Railroad Commission of Texas to increase revenues by
approximately $.5 million for the remaining 22,000 rural customers in West Texas. The
rate request was approved and became effective in April 1997.
In February 1995, the Company filed with the Kentucky Public Service Commission (the
“Kentucky Commission”) for a rate increase for its Western Kentucky Division, which
includes approximately 171,000 customers. In October 1995, the Kentucky Commission
issued an order authorizing the Company to increase its rates by $2.3 million annually effec-
tive November 1, 1995, and by an additional $1.0 million annually beginning in March
1996. The settlement included a decrease in depreciation rates, recovery of expenses related
to adoption of Statement of Financial Accounting Standards No. 106 and included a provi-
sion for the Company to begin a three-year demand-side management pilot program for the
1996-97 heating season, which could cost up to $450,000 annually, resulting in a total annu-
al operating income increase of approximately $4.0 million. In fiscal 1997 the Company
incurred costs of approximately $218,000 on the demand-side management pilot program.