BEFORE THE MISSISSIPPI PUBLIC SERVICE COMMISSION
ATMOS ENERGY CORPORATION
UTILITY LD. NO. GC-123-0081-00
DOCKET NO.
RE:
TO CHANGE
OF INTENT OF ATMOS ENERGY CORPORATION
RATES BY IMPLEMENTING A REVENUE NEUTRAL CHANGE TO CERTAIN
RATE SCHEDULES
NOTICE
PREFILED
TESTIMONY
OF KATHRYN S. TAYLOR
1
Q.
Please state your name, job title, and business address.
2
A.
My name is Kathryn S. Taylor. I am a Rate Analyst for Atmos Energy Corporation
("Atmos" or "Company"). My business address is 790 Liberty Road, Flowood, MS 39232.
3
4
Q.
What is your educational
5
A.
I graduated from the University of Mississippi in 2003 with a Bachelor of Business
background and professional experience?
6
Administration. I graduated from Mississippi College School of Law in 2007 with a Juris
7
Doctorate. I am licensed to practice law in Mississippi and Texas. I completed my Certificate in
8
Accounting (equivalent ofa Bachelor's degree) in 2011 at Mississippi College. I anticipate
9
completing all the requirements
for my CPA license in the third quarter of 2013.
10
My professional experience
11
legal issues including commercial litigation, civil litigation, child support, and family law issues.
12
In 2010 l accepted
13
Q.
includes six years working for different law firms on a variety of
the position of Rate Analyst with Atmos.
What are your responsibilities
as a Rate Analyst?
1
* Electronic Copy * MS Public Service Commission * 10/1/2016 * MS Public Service Commission * Electron
1
A.
As a Rate Analyst, I provide technical analysis and support in the determination and
margin revenues. This includes
2
regulatory approval of rates that produce the company's
3
preparation and review of revenue deficiency studies, analytical exhibits in rate filings, and
4
responses
5
models
6
required compliance reports, and monitor and analyze financial data and rates of comparable
7
utilities.
to Mississippi Public Utility Staff data requests. I also develop financial and statistical
to improve departmental efficiency and accuracy in rate filings, prepare and/or file
8
Q.
What is the purpose of your testimony in
9
A.
My testimony sponsors a revenue neutral redesign of certain rates for the Company's
this proceeding?
operations in Mississippi.
10
11
Q.
Why is Atmos implementing
12
A.
The new rates are designed to reduce the volatility of the Weather Normalization Adjustment
a revenue neutral redesign of certain rates?
13
(WNA) on distribution charges to customers by shifting some revenue recovery to customer
14
charges. The recent winter (November 2011
15
temperatures resulting in large WNA adjustments to usage on customers' bills during the months
16
of March and April. By shifting revenue recovery from distribution charges to customer charges,
17
should such a warm winter occur again,
18
customers.
-
April 2012) experienced much warmer than normal
the WNA adjustment to bills will have a lesser impact on
19
Q.
How do the new rates differ from the existing rates?
20
A.
The new rates seek to increase certain customer charges and correspondingly decrease certain
21
distribution charges in a revenue neutral manner. The new rates would be effective for the
22
following residential and commercial rate schedules; 301 Year Round Residential, 304 Multi Unit
2
* Electronic Copy * MS Public Service Commission * 10/1/2016 * MS Public Service Commission * Electron
1
Housing, 305 Year Round General Gas, 306 Small Business Incentive Rider, 331 Heating Season
2
Only
-
Residential, and 335 Heating Season Only Commercial.
-
3
Q.
How did you determine
4
A.
I applied the current rates to the billing determinants for the twelve months ended April 30, 2012
that the change in rates is revenue neutral?
5
and calculated the total current margin using current rates. The total margin under the new rates
6
were set equal to the
7
customer
8
revenue neutral.
9
10
total current margin
using the current rates
in order to increase certain
charges and calculate the new distribution charges. Therefore,
the new changes are
See Exhibit KST-1 for these calculations.
Q.
What are the new monthly
A.
The new customer charges are listed by Rate Schedule in Exhibit KST-1. For the residential rates
customer charges?
11
the new monthly customer charges are increases of $2.00 over current rates. The new rates
12
increase in Schedule 301 from $6.95to $8.95,in Schedule 304 from $20.00to $22.00,and
13
Schedule 331 from $8.91 to $10.91.For the commercial rates the new monthly customer charges
14
are increases of
15
$16.27and in Schedule 335 from $19.24to $24.24.Rider Schedule 306 only increases $3.75
16
from $8.45to $12.20.Rider 306 is the Small Business incentive Rider, a temporary rate schedule,
17
designed as a 25% discount on the customer and distribution charges for eligible customers in
18
schedule 305. The new 306 customer charges provide a 25% reduction to the new 305 customer
19
charges.
$5.00over current rates. The
new rates
increase in Schedule 305 from $11.27to
20
Q.
How did you develop the new customer charges?
21
A.
The new customer charges were derived as being the minimal increases necessary to offset the
distribution charge decreases designed to benefit the customer during the WNA months.
22
23
Q.
How did you develop the new volumetric
distribution
charges?
3
* Electronic Copy * MS Public Service Commission * 10/1/2016 * MS Public Service Commission * Electron
1
A.
In Exhibit KST-l, I applied the current rates to the billing determinants; volumes billed and
2
number of bills, for the twelve months ended April 30, 2012 to calculate the customer charge
3
revenue, distribution revenue, and total current revenue. I then applied the new customer charge
4
to the number of bills to calculate the new customer charge revenue. Using the total current
5
revenue
6
into the new distribution charge using the volumes billed.
7
Q.
A.
Q.
to determine the revenue
neutral
revenues?
The billing determinants, bills counts, and volumes came directly from the Company's billing
What would have been the impact on customer bills if the new rates had been in effect
during the past winter?
12
13
used
system for the year ended April 30, 2012.
10
11
How do you know that the billing determinants
change in rates are consistent with the Company's
8
9
I was able to calculate the new distribution revenue. From this total I was able to back
A.
In Exhibit KST-2, I pulled the customer data for bills issued from March 11, 2012 through April
14
9, 2012 because this was the most extreme 30-day period during past winter of warmer-than-
15
normal weather.
16
these customer bills with the new rates. The Exhibit, separated between residential
17
commercial,
18
rates. The results show
19
more than
$2.00while 78% would experience
20
residential
customers
21
decrease in charges for commercial customers of $44,546.55even though 71% of customers
22
would experience
23
Overall there would have been a
24
customers had the new rates been in effect.
The intent was to determine an after effect of these rate changes by recalculating
and
shows the increase or decrease in the customers' bills after implementing the new
an
for residential customers that 22% would experience an increase of no
would
a
decrease. The net decrease in charges for
be $414,612.54.For commercial customers there would be a net
increase of no more than $5.00,while 29% would experience
a
decrease.
$459,159.09decrease for both residential and commercial
4
* Electronic Copy * MS Public Service Commission * 10/1/2016 * MS Public Service Commission * Electron
1
Q.
In the future will the new rates produce the same annual revenues as existing rates?
2
A.
That is the intent; however, actual revenues will depend on the number of customers and volumes
3
used during the future period. In some periods the current rates may produce more revenue than
4
the new rates, while in other periods less revenue may be produced. Overall, the revenues
5
produced should vary less as a result of changes in the amount of volumes used.
6
Q.
In summary what are the benefits of the new rates?
7
A.
The benefits of the new rates will be reduced volatility of bills for customers during the WNA
8
months. Because we are shifting some revenue recovery
9
customer charge, the amount of customers' bills will be less dependent on weather and will be
10
from the distribution charge to the
more stable.
11
Q.
Are you sponsoring
12
A.
Yes, I am sponsoring changes to the following Company tariffs; 301 Year Round Residential, 304
the new changes to the Company's tariffs?
13
Multi Unit Housing, 305 Year Round General Gas, 306 Small Business Incentive Rider, 331
14
Heating Season Only Residential, and 335 Heating Season Only
-
15
Q.
Does
16
A.
Yes.
17
-
Commercial.
this conclude your testimony?
WITNESS, THIS MY SIGNATURE on this the 31 day of August, 2012.
18
19
22
23
24
25
KATHR
S. TAYLO
Rate Analyst
Atmos Energy Corporation
5
* Electronic Copy * MS Public Service Commission * 10/1/2016 * MS Public Service Commission * Electron
1
STATE OF MISSISSIPPI
2
3
COUNTY OF RANKIN
4
AFFIDAVIT VERIFYING AND ADOPTING TESTIMONY
5
6
7
KATHRYN S. TAYLOR, being first duly sworn, on oath, says that she is the Rate Analyst for
8
Atmos Energy Corporation as identified in the foregoing testimony; that she caused to be prepared such
9
testimony; that the answers appearing therein are true to the best of her knowledge and belief; and that if
10
asked the questions appearing therein, her answers would, under oath, be the same.
KATHRYN
13
14
TAYLOR
SWORN TO AND SUBSCRIBED BEFORE ME, this the 31 day of August, 2012.
15
16
17
NOTARY PUBLIC
18
19
20
21
22
MY COMMISSION EXPIRES:
MISSi
·
..•
.
NOTARY PUBUC
',
6
* Electronic Copy * MS Public Service Commission * 10/1/2016 * MS Public Service Commission * Electron
* Electronic Copy * MS Public Service Commission * 10/1/2016 * MS Public Service Commission * Electron
6
s
4
3
2
1
No.
une
8.91
20.00
$
0.18394
$ 0.13205
32,173,527
$
$
$
5,891
103,123
109,015
$
$
219,085
16,009,225
7,137,540
8,871,685
$
$
$
$
207,245
11,840
14,344,219
$
$
17,829,3DS
$
48,182,752
$
328,100
310,369
17,731
21,481,760
$
$
$
$
26,700,993
$
$
$
8.99
10.91
$
$
$
Total
Distrib.Chargechange
96,755
7,606,172
$
19.24
8.45
0.12922
0.17229
5 0.15421
$
$
3,034,514
1,172,948
1,861,566
25,983
$
$
$
$
18,595
7,387
11,604,204
$
$
$
2,037,300
9,566,904
$
$
2,118,525
$
$
$
$
$
$
$
$
$
$
$
12,929
3,676
9,253
5,774,136
4,760,396
1,013,740
1,509,944
926,297
583,647
$
$
$
$
73,645,244
4,544,458
1,756,595
2,787,863
38,912
$
$
$
$
11,063
27,848
$
17,378,340
$
$
14,327,300
3,051,041
3,172,682
1,343,552
1,829,131
$
$
$
1,054,157 $
607,748
446,409
$
S
$
$
$
$
$
$
$
0.11398
24.24
12.20
$
$
(0.06360)
0.09061
73,645,244
4,544,458
$
$
1,032,098
$
$
3,512,360
38,912
15,972
22,940
17,378,340
12,973,688
4,404,652
3,172,682
$
2,239,710
328,100
932,972
$
$
$
(0.01221)
0,11701
19,505
308,595
$
$
(0.00105}
0.18289
48,182,752
13,798,021
34,384,732
(k)
SRrevenue
$2.00
(0.04723)
0.08482
New
Margin with
(0.05016)
5
Customercharge + $5.00
18.27
$
0.15601 $
$
$
(0.01628)
5
$
-
$
$ 11.27
897,142
1,221,383
$
$
335HeatingSeason Only
Commercial
143,907
55,527,912
$ 0.16414
S
874
180,772
5,465,715
Distrib.Chargechange
306SmallBusiness Incentive
Distrib.Chargechange
305YearRounclGeneralGOS
Distrib.Chargechange
137,080
beforeSRF
(j)
Customer charge+
22,00
(i)
$
before5RF
(h)
New
Distrib. Chg/CCf
$
$
$
6.95
New
Cust. Chg
Margin
Target
331HeatingSeason Only•
Residential
1,126,701
108,627,182
$
{g)
0.49759
StableRateRev
$
592
2,565,368
Total
Current Current
Customer Distribution CurrentBase
Actual
Volurnes/Ccf Charge Chg/Ccf
Revenue
{c)
(d)
{e)
(f)
is the current tariff minimum bill.
Chg is remainder of current margin, divided
Charge
SRF of 1.49759.
Distribution
Customer
Distrib.Chargechange
304MultiUnitHousing
(10+units)
Distrib.Chargechange
301 Year Round Residential
(a)
DeScription
Number
ofBills
(b)
Detail of Revenue at Current and New Rates
Twelve Months Ended April 30, 2012
MississippÏ
Atmos Energy Corporation
1,773
724,497
(724,497)
Page 1 of 2
ExhibitKST-1
$
$
4,908
(4,908)
$
(1,353,612}
1,353,612
(410,579}
410,579
(1,773)
$
$
$
$
$
$
$
$ 7,683,739
$ (7,683,739)
(k)-(h)
by volume.
* Electronic Copy * MS Public Service Commission * 10/1/2016 * MS Public Service Commission * Electroni
-
-
season
Total
General
Heating Season
Yr Round General
Gas
Rate 306
Small Business
Incentive Rlcler
Rate 335
Rate305
Rate 331
Heating Season Res
Rate 304
Multi Unit Housing
Rate 301
YRRoundRes
General
Total
Heating
Incentive Rider
Rate 335
Rate 306
Small Business
YrRoundGeneral
Gas
Intentive
306
100 mcf/day7653
-
-
$19.24Ind Seasonal
$19.24PASeasonal
-
-
(Oct May) 7852 (70)
(Oct May) 7853 (70)
-
Business Incentive 306 (70)
(Oct May) 7851 (7D)
$19.24 Com Seasonal
$8.45Com
$11.27Com<100meflday7651(70)
$11.27 Ind < 100 mcílday 7652 (70)
$11.27PublicAuthority<100mcílday7GS3(70)
-
$8.91Res Gas Hearth Seas (Oct May) 781H (70)
$8.91Res Seasonal (Oct May) Mu Iti 781M (70)
-
520.00 ComMultiUnitHousing 7641 (70)
$20.00 Public Auth Multi Unit Housing 7843 (70)
$8.91 Res Seasonal (Oct May) 7810 (70}
$6.95ResRateMulti-Unit761M(70)
-
Seasonal (Oct May) 7853
Rate Codes
$6.95 Res Rate 7610 (70)
Base
Charge
$1.5421Publie Auth
-
$1.5421 Com Seasonal (Oct May) 7851
$1.5421 Ind Seasonal (Oct May) 7852
$1.292175Com Business
<
$1.7229Ind<100meflday7652
51.7229 PublicAuthority
-
(Mcf}
Rate Codes
Rate 301
$1.3205 Res Rate 7610
YR Round Res
$1.3205 Res Rate Multi-Unit761M
Rate 304
$1,8394 Com Multi Unit Housing 7641
MultiUnitHousingS1.8394PublicAuthMultiUnitHousing7643
$1.6414 Res Seasonal (Oct May) 7810
Rate 331
$1.6414Res Gas Hearth Seas (Oct May}781H
$1.6414Res Seasonal (Oct May) Multi 781M
Heating Season Res
Rate 305
$1.7229 Com < 100 mcf/day7651
Charge
Distribution
O
3
228,888
257,913
-
10,889
54
851
132
0
0
227,153
5
78
209
1,887
215
1,897
1,914
293
3
3
12,844
420
2
2
13,091
16,325
106
38
13,151
212
20
30
211,391
390
Base
Charge
Count
584,611
1
(141)
39,215
(3)
195,876
24,782
21
30
212,687
388
213,926
399
0
0
0
319,178
345
2,220
3,152
(15)
19
30
Base
Charge
Count
Base
Charge
Count
{268)
.
(317)
652,459
0
0
46,747
205,725
28,691
(0)
365,806
397
2,708
3,266
(283)
(2)
861,527
0
12,314
493
2,410
88,974
466,296
611
2,898
4,135
12,320
34
24
239,194
31,822
0
0
0
0
0
0
227,373
1
3
58
217
1,903
13004
211,566
365
20
30
185
1
Base
Charge
Count
607,338
(172)
(58)
47,255
202,741
34,380
(217}
3,154
317,612
359
2,286
May
June
July
August
Fiscal 2011 Fiscal 2011 FIscal 2011 Fiscal 2011
Billed
Billed
Volume
Volume
Billed
Billed
Excl WNA Excl WNA Volume Excl Volume Excl
(MCF)
(MCF)
WNA (MCF) WNA (MCF)
623,896
0
(5)
(31)
37,935
50,329
200,579
226,769
11
290
217
1,896
12,846
210,852
388
20
31
213
5
Base
Charge
Count
0
0
0
0
0
(5)
2
329,308
388
2,289
3,106
254,406
845
55
18
10,834
213
1,899
96
36
12,837
15,797
211,337
391
19
29
Count
255,912
54
847
39
10,904
12,022
207
1,876
101
39
16,527
212,058
389
19
30
Base
Charge
Count
Base
1,494,656
6,730
4,666
38,712
777
107,670
35,257
61
302,953
939,451
1,131
4,089
6,364
46,690
107
Charge
797,814
3,014
4,354
36,408
184
31,547
59,335
99
218,937
414,656
488
2,508
3,858
22,359
68
258,820
57
848
11,002
82
1,899
218
108
40
12841
17,025
214,261
389
19
30
Charge
Count
Base
2,880,404
122,922
8,912
18,069
1,942
222,226
55,577
244
486,851
262,360
58
856
102
11,604
1,930
13,320
214
106
39
17,403
216,284
395
19
30
Charge
Count
Base
3,478,208
2,520
179,624
11,386
23,G75
228,517
60,074
282
584,678
2,222,732
1,837,195
2,519
2,225
6,705
7,429
9,31410,321
144,109
107,966
341
256
2G1,52G
58
850
11,304
172
12,979
211
1,906
261,713
58
848
11,294
225
12,898
218
1,909
37
17,408
106
216,273
390
19
30
Count
Count
216.080
395
19
30
17,381
105
36
Base
Charge
2,079,013
6,409
12,575
3,152
86,126
151,032
43,954
79,467
212
103
401,840
1,281,613
1,491
4,815
6,223
Base
Charge
2,887,070
9,170
18,947
3,543
137,967
208,240
117,999
280
294
490,851
51,833
1,831,086
2,056
6,344
8,459
Total
17,849,759
44,980
88,636
14,391
627,001
1,308,608
874
258,608
56
849
Page 2 of 2
ExhibitKST-1
2,981,441
451
6,816
89,488
236
11,098
166,393
2,567
22,812
135,938
836
306
97
36
12,760
216
1,896
16,961
Base
Charge
Count
Total
213,970
2,560,684
3854,684
19
233
29
359
902,764
930
2,319
2,274
13,475
77,067
13,721
544,110
37
1,335
1,127
24
3,781,519
251,294
28,812464,664
505 196
10,850,132
575
12,586
2 874
47,164
4,16865,508
September October
November
December
February
March
April
January
Fiscal 2011 Fiscal 2012 Fiscal 2012 Fiscal 2012 Fiscal 2012 Fiscal 2012 Fiscal 2012 Fiscal 2012
Billed
Billed
Billed
Billed
Billed
Billed
Volume
Billed
Billed
Volume Excl Volume Excl Volume Exci Volume Excl Volume Exci Excl WNA Volume Excl Volume Exc1
(MCF)
WNA (MCF) WNA (MCF)
WNA (MCF) WNA (MCF) WNA (MCF} WNA (MCF) WNA (MCF)
* Electronic Copy * MS Public Service Commission * 10/1/2016 * MS Public Service Commission * Electron
1
2
3
4
5
6
7
8
9
10
11
12
-
$ Totals
Net
OVER/UNDERTHRESHOLD WNA CONSUMPTION
$27,311.44
22%
($441,923.98)
($414,612.54)
78%
$42,060.77
71%
($459.159.09)
($86,607.32)
($44,546.55)
29%
212,523
TOTAL
-
Exhibit KST 2
Page 1 of 1
156,822
74%
$2Ï
55,701
26%
0.
DECREASF
0
41,624
36,167
26,989
17,438
10,981
17,168
4,422
972
374
210
TOTAL
NO.OFACCOUNTS
0
33,632
11,645
2,150
3,397
4,877
0
0
0
0
0
INCREASF
NO.OFACCOUNTS