Atmos Energy 2012 Annual Report Download - page 20

and betterment. Texas also continues to be the country’s
largest producer and consumer of natural gas—a situation
that poses unique and outsize growth prospects. Moreover,
the state’s balanced utility regulatory policies generally allow
recovery of most of our spending within 12 months.
We plan to invest signicant amounts to fortify, repair,
replace and replenish portions of our Texas intrastate
natural gas transmission and storage system.
Atmos Pipeline–Texas’ projects for line expansion,
compression and interconnection will add more delivery
capacity for utility customers in underserved areas, secure
long-term gas supplies, such as natural gas associated with
shale oil drilling in the Permian Basin of West Texas as
well as gas production from the Barnett Shale around Fort
Worth, and enhance the safety and reliability of our 5,700-
mile transmission system.
At the start of scal 2012, our rate base totaled about
$3.9 billion. By the end of scal 2016, we expect it to have
risen to between $5.7 billion and $5.9 billion, growing
during the ve-year period at a compound annual rate of
between 8.0 percent and 8.5 percent.
For scal 2013, we expect approval of between $90
million and $110 million in additional annual operating
income from rate actions.
The Natural Gas Opportunity
We believe this is an opportune time to invest in our
regulated assets. Investments that expand our rate base
have had minimal eects on our customers’ bills because
lower natural gas fuel costs have essentially oset the costs
of improving our infrastructure.
Natural gas stands today as the best fuel source to meet
the United States’ energy needs well into the 22nd century.
Just imagine what this means: natural gas is domestic,
clean, abundant, reliable, versatile and relatively low cost
energy that the country can rely on for at least a century.
Natural gas oers the ideal fuel choice for housing, industry,
electricity generation and many forms of transportation.
Atmos Energy intends to pursue this opportunity to benet
our investors, customers and communities.
Bret J. Eckert, who joined the company as a senior vice
president and a member of the Management Committee
in June 2012, became chief nancial ocer on October 1.
Bret’s 22 years of experience in the regulated natural gas
distribution industry includes extensive experience with
Securities and Exchange Commission reporting matters
and lings; regulatory accounting and reporting; equity
and debt oerings; mergers, acquisitions and divestitures;
and technical accounting and nancial matters. We feel
fortunate to have Bret’s leadership, experience, knowledge
and integrity on our management team.
Also on October 1, 2012, Gary L. Schlessman retired
as president of our Colorado-Kansas Division. Gary started
at Greeley Gas Company in 1979 in service and con-
struction. He worked as a regional manager, marketing
manager and marketing vice president before advancing
to division president in 1993. He has been a tireless leader
and contributor in the many cities and towns the division
serves. We thank him for his long service and many
contributions to our company and industry.
Gary W. Gregory, who had served as president of the
West Texas Division since 2004, became Colorado-Kansas
Division president on October 1, 2012, and David J. Park,
who had been vice president of rates and regulatory aairs
in the Mid-Tex Division, was promoted to president of the
West Texas Division at that time.
Future Growth
We expect to achieve predictable and stable earnings from
our regulated operations. We project investing between
$3.7 billion and $3.8 billion in capital projects during the
scal years 2012 through 2016.
Our capital expenditures in scal 2013 should range
between $770 million and $790 million. We expect again
to spend more than 70 percent of this total on projects to
modernize and improve the safety and reliability of our
regulated infrastructure.
We forecast that we will deploy about 70 percent of scal
2013 expenditures in Texas. Atmos Energy’s extensive Texas
distribution area—the largest in the state—and our major
intrastate pipeline oer many opportunities for expansion
18 ATMOS ENERGY 2012 SUMMARY ANNUAL REPORT
The compelling prospects to modernize our system,
expand our rate base and increase annual earnings make
for a very favorable outlook for Atmos Energy.