Atmos Energy 2001 Annual Report Download - page 12

6
Some of this additional reserve could be recouped in 2002. As the weather turns
cooler, we believe many disconnected customers will seek to return to our system. They
will be required to pay any amounts they owe us as well as a reconnection fee and a
higher deposit. Collecting delinquent accounts will remain a top priority in 2002.
Because of the unusually large number of customers disconnected, we have been
working with regulatory commissions, social services and public assistance agencies to
assist customers in getting their gas service reconnected.
We don’t want any of our customers to go without gas for heat during the winter.
Therefore, we have increased promotion of our bill-payment options. We have sent
letters to all disconnected customers and we have contacted the news media to help
reach these customers. We have been doing all we can to encourage them to restore
their service before the winter heating season and to seek help if they need it.
Protecting earnings from the weather
In recent years, colder weather has not been our challenge; warmer weather has
been. Unseasonably warm winters in both fiscal 1999 and 2000 dampened gas demand
and our earnings.
To offset a similar effect in fiscal 2001, we purchased weather hedges for Atmos’
Texas and Louisiana operations. For most of fiscal 2001, about one-third of our cus-
tomer base was located in these two states, both of which lack weather-normalized
rates. By the end of fiscal 2001, the percentage had increased to 46 percent as a result
of completing the LGS acquisition.
For fiscal 2002 to 2004, we have purchased a three-year weather insurance policy
for Texas and Louisiana. We have an option to cancel the third year of coverage if we
are able to get weather protection through rates. The policy is designed to safeguard
our earnings from weather that’s warmer than normal by at least 7 percent or more in
both states, while preserving the upside.
Atmos’ goal is to limit its weather sensitivity primarily through rate design. Today,
just over a fourth of our customer accounts have weather-normalized rates. We have
obtained the provision in Tennessee and Georgia and a trial program in Kentucky
extending through 2005. To ensure stability of rates for our customers in the future, we
would like to achieve weather normalization in our other major states, particularly
Texas and Louisiana.
AAss aa rreessuulltt ooff tthhee eevveennttss ooff
SSeepptteemmbbeerr 1111,, 22000011,, AAttmmooss
ssuupppplleemmeenntteedd tthhee bbeenneeffiittss ffoorr
iittss eemmppllooyyeeeess wwhhoo sseerrvvee aass
mmiilliittaarryy rreesseerrvviissttss ttoo hheellpp
ssaaffeegguuaarrdd tthheeiirr lliivveelliihhoooodd
aanndd ffiinnaanncciiaall sseeccuurriittyy..AAttmmooss
aallssoo rreeddoouubblleedd iittss lloonngg--
ssttaannddiinngg ccoommmmiittmmeenntt ttoo
ssaaffeettyy aanndd sseeccuurriittyy pprraaccttiicceess
iinn oorrddeerr ttoo iinnccrreeaassee tthhee
pprrootteeccttiioonn ffoorr iittss ccuussttoommeerrss,,
eemmppllooyyeeeess aanndd aasssseettss..