Atmos Energy 2000 Annual Report Download - page 15

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increases, seeking weather normalization where
appropriate, implementing performance-based
regulation (PBR) and redesigning rate structures
to mitigate the effects of warm weather.
In fiscal 2000, Atmos concluded three rate
proceedings for its Western Kentucky Gas, Amarillo,
and Trans La operations and received approval for
more than $12 million in additional annual revenue
increases. In addition to approving a revenue
increase for Western Kentucky Gas, the
Kentucky
Public Service Commission also agreed to a five-
year pilot program for weather normalization
which
was implemented in November 2000. Atmos was
also successful in redesigning its rate structures in
Louisiana, Western Kentucky and Amarillo to mitigate
the impact of warm weather on future earnings.
In November 2000, the Railroad Commission
of Texas approved a settlement in our Energas
West Texas rate case which will result in an
increase in annual revenues
of approximately $3
million. In addition to the revenue increase, the
Railroad Commission
approved a new rate design
which provides more protection from warmer than
normal weather. The new rates went into effect
December 1, 2000 and affect approximately
217,000 Energas customers in West Texas.
Atmos also filed rate proceedings in Illinois
and Virginia during the 2000 fiscal year and filed a
rate case in Colorado in November 2000, shortly
after the close of the fiscal year. The Illinois rate
case was settled for $1.37 million in October 2000,
and $2 million in new rates were put into effect
in Virginia under bond effective December 2000
pending a final January 2001 hearing. Assuming
these new rates are approved for Virginia, Atmos’
2001 revenues will include more than $18 million
in additional annual revenue.
With the addition of weather normalized
rates in Western Kentucky, combined with existing
weather normalized customers in Tennessee and
Georgia, approximately 34 percent of Atmos’
customer base will be weather normalized in fiscal
2001, compared with 17 percent in 2000.
Performance-based regulation (PBR) is in effect
for our Kentucky,Tennessee and Georgia operations.
PBRs permit the Company and its customers to
share in purchased gas cost savings when Atmos can
obtain gas supplies below certain benchmark indices.
In addition to pursuing an aggressive regulatory
strategy, the Company has purchased weather
hedges for its Texas and Louisiana operations.The
hedges are effective for the 2000 - 2001 heating
season and provide protection against weather that
is at least seven percent warmer than normal in both
states, while preserving any upside opportunities.