Kansas Corporation Commission approves Atmos Energy to recover $102M in winter storm costs
As a result of winter storm costs incurred by Atmos Energy last February, the Kansas Corporation Commission (KCC) last week approved a settlement agreement that will allow the company to recover $102 million through low interest, Securitized Utility Tariff Bonds.
At the time of the storm, Atmos was ordered to do everything it could to continue providing natural gas service to customers. It deferred charges during the storm but then had to develop a plan to allow customers to pay the unusually high costs from that period. Bonds appeared to be the most favorable financing method to reduce costs to its customers, given the more favorable terms they offer compared to traditional financing.
“A lesser response could have resulted in catastrophic property damage and serious public safety implications, including potential loss of life,” the KCC said. “When extraordinary costs are unavoidable and necessary to benefit the public, it is in the public interest to allow recovery of such costs.”
Some things remain up in the air, however. Until the securitization process concludes, it’s unknown exactly how much customers will see added to their monthly bills or for how long. Estimates go as low as $3.75 per month or as high as $5.19 per month for residential customers on either a 10- or 15-year term.
Comparatively, if customers had been asked to repay the costs over a single year, they would have had to pay an additional $47.70 per month.
As is, the KCC will review Atmos’ plan to guarantee customers get the lowest possible bond costs. That review process could take between six to eight months. If Atmos – which delivers gas to approximately 135,000 Kansas customers – is at any point found to gain proceeds from federal or state investigations into market manipulation, price gouging, or civil suits, these proceeds will be passed on to customers by Commission order.
