Lloyd • t iJ

816 Congress Avenue,Suite 1900

Austin,Texas7870l

Gosselink Telephone: (512)322-5800

Facsimile: (512)472-0532
iiiSii) a t t o r n e y s a t l a w Pf 3: U !
www.lglawflnm.com

Ms. Crump's Direct Line: (512) 322-5832

Email: gcrumD@lglawfirm.com RAfi RGAD COH-HibSi0l^
' • OF TEXAS
February 7,2019

Mr. Alex Schoch

Director of General Counsel
Railroad Commission of Texas
Attn: Docket Services
1701 N. Congress Avenue
Austin, Texas 78701

Re: Petitionfor Rulemaking to Amend16 Texas Administrative Code§ 7.45(6)(C) in

Order to Reduce the Frequency ofEstimated Bills

Dear Mr. Schoch:

Enclosed is the original and ten (10) copies of the Petition for Rulemaking to Amend
16 Texas Administrative Code ("TAG") § 7.45(6)(C) in Order to Reduce the Frequency of
Estimated Bills. Thank you for your prompt attention to this matter.

Smcerely,

reorgia R Crump
Attorney for Atmos Cities Steering Corrmiission
GNC/jmc
2557\00\7795998

Enclosure

cc: Christi Craddick, Chairman

Ryan Sitton, Commissioner
Wayne Christian, Commissioner
Natalie Dubiel, General Counsel
Haley Cochran, General Counsel
Gas Services Division
Jason Clark, Assistant Director, Administrative Compliance

RECEIVED
RRC OF TEXAS

FEB 0 7 2019
O&Q
AUSTIN TX

Lloyd Gosselink Rochelle & Townsend, P.C.

 II
t- u

GUDNO.
2019 FEB-7 PM3:C
PETITION FORRULEMAKING § S
TO AMEND 16 TEXAS § «AIL RCiAD COMMiSSiOH
ADMINISTRATrVE CODE § RATT uni^Ti^^fefiynsSTON
§7.45(6)(C)INORDERTO §
REDUCE THE FREQUENCY §
OFTEXAS
OF ESTIMATED BILLS §

PETITION FOR RULEMAKING TO AMEND

16 TEXAS ADMINISTRATIVE CODE § 7.45(6)(C)

TO THE HONORABLE RAILROAD COMMISSION OF TEXAS:

Pursuant to 16 Tex. Admin. Code ("TAC") § 1301, Atmos Cities Steering Committee

("ACSC") hereby files this Petition for Rulemaking to modify gas utilities' ability to use
estimatedbills for up to six months, as currently allowed in 16 TAC § 7.45(6)(C). The proposed

change would amend that rule to: (1) require gas utilities to read meters each month; and (2)

allowgas utilities a good causeexception to use estimated bills for up to one month.

ACSC is comprised of municipalities served by Atmos Energy Corporation, Mid-Tex

Division ("Atmos Mid-Tex" or "Company") with original jurisdiction over the gas rates and

services of Atmos Mid-Tex within their municipal boimdaries, and are current customers of

Atmos Mid-Tex.^

I. JUSTIFICATION

In the winter months of 2018, Atmos Mid-Tex customers across North Texas reported

receiving significant spikes in their gas bills—in some cases several hundreds of dollars over

normal bills.^ These billing spikes resulted from Atmos Mid-Tex using estimated billing during

coldmonths. The Company stated that the practice of estimated billing was intended to cut costs

' A list of ACSC member cities is attached hereto as Attachment A.

^ Kelsy Mittauer, Consumer Justice Looks Into Skyrocketing Atmos Bills (Apr. 16, 2018, 10:15 PM),
https://d^.cbslocal.com/2018/04/16/consumer-justice-looks-into-skyrocketing-atmos-bills/.

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of meter readers,^ but the practice ultimately resulted in customers seeing steep increases in their
bills.
The current Railroad Commission of Texas ("Commission") rule only requires that

regulated gas utilities read meters once every six months.^ After the public outcry and

subsequent investigation into the practice of estimated billing by Dallas' local CBS news station,

the CEO of Atmos Energy publicly stated thatit will no longer estimate winter bills.^ However,

the existing rule allows Atmos Mid-Tex, and all other gas utilities regulated by the Commission,

to use estimated billings for up to six months at a time. Although the rule allowing estimated

billings is premised on there being good reason for doing so, "good reason" is not defined in the

rule. ACSC submits that cutting meter reader costs is not "good reason," especially in light of

the significant investments in technology and infrastructure by the utilities that are intended to

make meter readings easier for the utility.

Gas utilities should be required to read customer meters monthly. The practice of

consistently using estimates for bills, sometimes for as many as ten months a year, can lead to

significant overcharges. And, a "true-up" bill based on actual meter readings may be shockingly

high if estimates are consistently lower than actual use.

ACSC has been able to annually review Atmos Mid-Tex's investments in technology that

should relegate estimated billings to the dustbin of history. In 2007, ACSC and Atmos Mid-Tex

settled a rate application filed by the Company pursuant to Section 104.301 of the Texas Utilities

Code for an interim rate adjustment commonly referred to as a GRIP filing (arising out of the

^ More Atmos Customers Complain about Spike in Bills (Apr. 20, 2018, 5:39 PM),
http://www.fox4news.com/news/more-atmos-customers-complain-about-spike-in-bills.
" 16TAC§7.45(6)(C).
^ Cristin Severance, Atmos Energy Will No Longer Estimate Winter Bills After Consumer Justice
Investigation (Apr. 18, 2018, 5:56 PM), https://dfw.cbslocal.eom/2018/04/18/atmos-energy-will-no-longer-estimate-
winter-bills-after-consumer-justice-investigation/.

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Gas Reliability Infrastructure Program legislation). That settlement created a substitute rate

review process, referred to as Rate Review Mechanism ("RRM"), to be used in lieu of future
filings under the GRIP statute. Atmos Mid-Tex has made annual filings with the ACSC
members for new rates using this RRM mechanism each year since 2007. Atmos Energy

Corporation's West Texas Division ("Atmos West Texas") also agreed to use the RRM process
with the cities in its service territory. The information provided in these RRM filings is public

and provides accurate information on how much Atmos Mid-Tex and Atmos West Texas are
investing in advanced meter infrastructure and relatedtechnology.

The following information on such investment and expenses illustrates that there should

no longerbe "good reason" for consistently estimating bills

• By the end of 2017, Atmos Mid-Tex had placed in service $30.7 million of
advanced meter infrastructure ("AMI") (meters and associated equipment)."'
• In2017, Atmos Mid-Tex incurred $123,000 inAMI tower rent and fees.®
• Between 2011 and 2015, Atmos Mid-Tex spent over $200,000 per year on
average to purchase hand-held meter reading devices.^

® Copies of the cited materials willbe made available upon request to counsel for ACSC.
' Atmos Energy Corp., Mid-Tex Division's 2018 Rate Review Mechanism Filing Dated Apr. 3, 2018,
Atmos Mid-Tex Response to ACSC RFI No. 3-07, ACSC_3-07_Att2 - AMR_AMI Plant Balance.xlsx.
® Id. at ACSC_3-07_Attl - AMR_AMIExpenses.xlsx.
' Atmos Energy Corporation's Statement ofIntent toIncrease Gas Utility Rates within All Incorporated
Areas Served by the Mid-Tex Division, with the Exception ofthe City ofDallas, 2012 SOI FY 2011 MTX and SSU
Project Report.xls (rows 644,1329); Atmos Energy Corp., Mid-Tex Division Rate Review Mechanism (RRM) Filing-
July 15, 2013, 2013 RRM MFR_l-07_Att4 - Apr-Dec 2012 MTX & SSU Project Report.xlsx (row 797); Atmos
Energy Corp., Mid-Tex Division's 2014 Rate Review Mechanism Filing, 2014 RRM MFR_l-07_Att4 - CY 2013
MTX & SSU Project Report.xlsx (rows 229, 630, 694, 877, 886, 1000); Atmos Energy Corp., Mid-Tex Division
2015 Rate Review Mechanism Filing Dated Feb. 27, 2015, 2015 RRM MFR_l-07_Att4 - CY 2014 MTX & SSU
Project Report.xlsx (rows 278, 531, 546, 953, 962, 1095); Atmos Energy Corp., Mid-Tex Division 2016 Rate Review
Mechanism Filing Dated Mar. 1, 2016, 2016 RRM MFR_l-07_Att4 - CY 2015 MTX & SSU Project Report.xlsx
(row 573, 574, 871,1014,1264).

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 • In 2012 and 2013, Atmos Mid-Tex purchased thirty-one (31) meter reading
vehicles at a total cost of $719,000J®

• In 2013, Atmos West Texas put into service a new Customer Service System
("CSS") at a cost of $78.9 million.'' The new CSS was intended to provide
improved customer service quality, in part by better integrating the meter reading
andbilling process.'^

• In 2009, Atmos Mid-Tex purchased 17 Segways to facilitate its meter reading

activities at a cost of $73,000.'^

Atmos Mid-Tex and Atmos West Texas are not the only gas utilities investing significant

capital into AMI technology and related infrastructure; other gas utilities operating in Texas have

made similar investments over the last several years. Considering the amount of ratepayer

dollars spent on these investments, ratepayers should be protected fi-om overcharges and sharp

spikes in their bills resulting from estimated billings. Furthermore, while Atmos Energy has

stated that it will not use estimated billing in the summer months, the Company may legally

continue using estimated billing under the current rule. Therefore, ACSC petitions the

Commission to amend 16 TAC § 7.45(6)(C) to require gas utilities to read customers' meters

every month.

Atmos Energy Corp., Mid-TexDivision 2013 Rate Review Mechanism ("RRM") Filing Dated Jul. 15,
2013, MFR_l-07_Att4 - Apr-Dec 2012 MTX & SSU Project Report.xIsx (rows 638, 639, 640); Atmos Energy
Corporation's West Texas Division 2014 RRM Filing, MFR_l-07_Att4 - CY 2013 MTX & SSU Project
Report.xIsx (row 1068).
" Atmos Energy Corporation's West Texas Division 2014 RRM Filing, Atmos West Texas Response to
ATM RFI No. 10-12, ATM_10-12_Attl - Response to WTX SOI Ama_Lub_4-09_Attl.xlsx.
Atmos Energy Corporation's West Texas Division 2014 RRM Filing, Atmos West Texas Response to
ATM RFI No. 1-12, Attachment 2.

Atmos Energy Corp., Mid-Tex Division's 2010 Rate Review Mechanism Filing, Atmos Mid-Tex
Response to ACSC RFI No. 2-07,2-17_Attl- CY 2009 Mid-Tex Project Report_Revised.xls (rows 204,244).

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 II. EXPLANATION OF PROPOSED RULE

As discussed above, the proposed rule would require gas utilities to read customer meters

each month. The current rule allows utilities to use estimated billing for up to six consecutive

months.

ACSC petitions the Commission to change the rule and thereby require gas utilities to
read customermeters on a monthlybasis. Additionally, the proposedrule allows a utility a good

cause exception for severe weather or other events that would prevent a utility from physically
reading meters for one month. However, the rule would not allow a gas utility to use estimated
billing two months in a row.

in. STATUTORY AUTHORITY

Under the Gas Utilities Regulatory Act ("GURA"),'"^ the Commission has the authority to
adopt rules regulating the rates and services of a gas utility that distributes natural gas or
synthetic gas in the areas outside of a municipality and areas inside a municipality that has

surrendered its original jurisdiction to the Commission under GURA § 103.003.^^

GURA § 104.252 gives the Commission authority to adoptjust and reasonable standards,

classifications, regulations, or practices a gas utility must follow in furnishing a service.

The Commission has adopted rules regulating minimum service standards gas utilities

must meet in unincorporated areas. These rules also require that each gas distribution utility

must include these minimum service standards in its service rules applicable to residential and

small commercial customers within incorporated areas.

Gas Utility Regulatory Act, Tex. Util. Code Ann. §§ 101.001-124.002 ("GURA").
GURA § 102.001.
GURA § 104.252(1).
16 TAG §7.45.
'8 Id.

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 IV. PROPOSED TEXT OF THE RULE

§ 7.45 Quality of Service

(6) Billing

(A)-(B) (No change)

(C) All meters must be read each month. If good cause exists.
such as severe weather or other exceptional circumstances that prevents a utility
from reading a meter in a certain month, the utility may estimate the meter for that
month but the meter must be read in the next following month. In no event shall a
meter reading be estimated in two consecutive months, \^^ere there is good
reason for doing so, estimated billo may bo Gubmittod, provided that an actual
meter reading is tolcen at least ever)^ six months.—For the second conoocutive
month in which the meter reader is unable to gain access to the premisos to read
the motor on regular meter reading trips, or in months whore meters are not read
otherwise, the utility must provide the customer with a postcard and request that
the customer read the meter and return the card to the utilit>^ if the meter is of a
t>^e that can be read by the customer without significant incon\^enience or special
tools or equipment. If such a postcard is not received by the utilit>^ in time for
billing, the utilit}^ may estimate the meter reading and render the bill accordingly.
(D) (No change)

V. CONCLUSION

There is significant public interest in protecting ratepayers fi-om overcharges and fi-om the

shock of receiving imusually high bills that true-up multiple months of estimated bills. Gas

utilities in Texas have invested significant amount of ratepayer dollars into advanced meter

infrastructure and the associated equipment. The proposed rule change will protect ratepayers

fi-om receiving incorrect and exorbitantbills resulting firom a practice of estimatedbilling.

ACSC respectfiilly petitions the Commission to open a rulemaking project to amend the

rule as proposed herein.

Dated: February 7, 2019.

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 Respectfully submitted,

LLOYD GOSSELINK
ROCHELLE & TOWNSEND, P.C.
816 CongressAve., Suite 1900
Austin, Texas 78701
(512) 322-5800
(512) 472-0532 (Fax)

GEOFFREY M. GAY
gmg@lgla>\^firm.com
State Bar No. 07774300

(jEORGI^N. crump
gcmmp@felawfirni.com
State Bar No. 05185500

JAMIE L. MAULDIN
imauidin@J glawfirm.com
State Bar No. 24065694

ATTORNIEYS FORATMOS CITIES

STEERING COMMITTEE

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 ATTACHMENT A
ACSC Cities (178 Members)
Abilene Fairview Northlake
Addison Farmers Branch Oak Leaf
Albany Farmersville Ovilla
Allen Fate Palestine
Alvarado Flower Mound Pantego
Angus Forest Hill Paris
Anna Forney Parker
Argyle Fort Worth Pecan Hill
Arlington Frisco Petrolia
Aubrey Frost Piano
Azle Gainesville Ponder
Bedford Garland Pottsboro
Bellmead Garrett Prosper
Benbrook Georgetown Quitman
Beverly Hills Glenn Heights Red 0 ^
Blossom Grand Prairie Reno (Parker County)
Blue Ridge Grapevine Rhome
Bowie Groesbeck Richardson
Boyd Gunter Richland
Bridgeport Haltom City Richland Hills
Brownwood Harker Heights River Oaks
Buffalo Haskell Roanoke
Burkbumett Haslet Robinson
Burleson Hewitt Rockwall
Bryan Highland Park Roscoe
Caddo Mills Highland Village Rowlett
Canton Honey Grove Royse City
Carrollton Hurst Sachse
Cedar Hill Hutto Saginaw
Celeste Iowa Park Sansom Park
Celina Irving Seagoville
Centerville Justin Sherman
Cisco Kaufman Snyder
Clarksville Keene Southlake
Clebume Keller Springtown
Clyde Kemp Stamford
College Station Kennedale Stephenville
Colleyville Kerens Sulphur Springs
Colorado City Kerrville Sweetwater
Comanche Killeen Temple
Commerce Knim Terrell
Coolidge Lakeside The Colony
Coppell Lake Dallas Trophy Club
Copperas Cove Lake Worth Tyler
Corinth Lancaster University Park
Crandall Lavon Venus
Crowley Lewisville Vemon
Dalworthington Gardens Little Elm Waco
Denison Lorena Watauga
Denton Madisonville Waxahachie
DeSoto Malakoff Westlake
Draper Mansfield Westover Hills
Duncanville McKinney Westworth Village
Early Melissa Whitesboro
Eastland Mesquite White Settlement
Edgecliff Village Midlothian Wichita Falls
Emory Murphy Woodway
Ennis Newark Wylie
Euless Nocona
Everman North Richland Hills

2557/00/7796012