Atmos Energy 2013 Annual Report Download - page 16

building, this otherwise mandatory
process can help establish long-term
partnerships.
What is the state of Atmos Energy’s
infrastructure today?
We’ve invested more than $1.4 billion
during the past three years to improve
safety and reliability while not increasing
our customers’ bills. About 85 percent
of an average gas customer’s bill is the
cost of natural gas. Our customers have
seen average winter gas-heating bills at
or below what they experienced three
years ago. e dierence between today’s
lower cost of natural gas and our allowed
rate allows us to invest more in our com-
munities’ natural gas infrastructure.
Unlike other entities that haven’t paid
attention to the state of their infrastruc-
ture, natural gas utilities have done a
Does Atmos Energy view ratemaking
differently than other utilities do?
For a regulated utility, ratemaking is how
rates of compensation are set for serving
customers. A lot of technical know-how
goes into the process. But, ultimately, the
focus should be on win-win outcomes.
Ratemaking is all about balancing
the economic interests of the consumer
against the operational needs of the utility.
e utility’s needs are always to invest in
assets to enhance safety and reliability—
not necessarily to make money, but to
modernize assets and ensure that they’re
rehabilitated or replaced or repaired
suciently, so that you’re continuing to
serve customers safely and reliably.
You can never win a rate case at the
expense of the customers. If you do,
it’s going to be very, very short-lived.
at’s why we’ve sought out negotiated
solutions with our communities. We’ve
developed rate mechanisms with fair
compromises to avoid ling rate cases
every year. And, we have opted for settle-
ments whenever we can achieve them.
If you consider ratemaking not as an
adversarial exercise, but as relationship
2
14
ABOVE AND RIGHT: Atmos Energy’s
leaders have long advocated using
clean-burning and abundant natural
gas to fuel fleet vehicles efficiently. In
1991, Charlie Vaughan demonstrated
a compressed natural gas fueling sta-
tion at a press conference in Lubbock,
Texas. Today, a natural-gas-fueled
bus of the Lafayette, Louisiana, Transit
System reflects the growing public
approval of this idea to save money
and reduce air pollution.
“ Ratemaking is all about
balancing the eco-
nomic interests of the
consumer against the
operational needs of
the utility.” —KIM R. COCKLIN
$1,000
$800
$600
$400
$200
$0
2012 2013 2014E 2015–2018E
Average of
$850 million–$950 million
annually
Atmos Energy’s capital spending has grown
significantly as we invest more in our natural
gas distribution and regulated transmission
and storage infrastructure. These investments
will modernize and improve operations for
safety and reliability.
Growth Fueled by Increased Capital Spend
Financed with a Blend of Cash Flow, Debt and Equity
Capital Spending ($ millions)