1. 2017 Mid Year Meeting
Denver, CO
Natural Gas Infrastructure Improvements - PHMSA and Infrastructure Trackers
June 6, 2017

2. Atmos Energy Operations

3. National Awareness of Aging Infrastructure
San Bruno, CA
September 2010
Transmission
PG&E
Allentown, PA
February 2011
Distribution (Cast Iron)
UGI
Sissonville, WV
December 2012
Columbia Gas Pipeline
Kansas City, MO
February 2013
Distribution
Missouri Gas Energy
Ewing, NJ
March 2014
PSE&G
East Harlem, NY
Consolidated Edison

4. Safety Landscape Transformation by Federal & State regulators:
2013 NARUC Resolution encouraging:
State Commissions to consider adopting alternative rate recovery mechanisms to accelerate replacement of vulnerable pipelines.
State and local agencies understand the need to replace aging infrastructure
In 2011, 35% of the nations distribution mains were of pre-1970 vintage
Pipeline safety and storage regulations continue to evolve
Reactive Replacement
(Monitor, repair, maintain)
Proactive Replacement
(Risk-based Prioritization)

5. Development of Replacement Programs
Incumbent upon State Regulators to address proactive infrastructure renewal programs with utilities.
Infrastructure characteristics vary for each utility.
If any significant increase in capital investment is warranted, notable issues must be addressed:
Regulatory lag under traditional ratemaking poses a barrier to incremental capital investments
Seek alignment with stakeholders on:
Pace of progress
Reporting & regulatory review

6. Pipe Replacement Progress
annually
annually
105
103
470
470 96
374
346
295 50 50

7. Industry Identified Materials
7,500
6,400
1,100
5,000
miles replaced
1,500E
miles replaced
Bare Steel, Cast Iron and Vintage Plastics projected to be replaced within the next 20 years.

8. Remaining Miles of Cast Iron Mains
596
562
Cast Iron Mains to be Eliminated by 2023

9. US Monthly Utility Bills *
Value of Natural Gas
Provide safe and reliable natural gas to customers at a fair and reasonable price
US Monthly Utility Bills *
Natural Gas
$43
Cable TV
$82
Electricity
$114
Water & Sewer
$140
Mobile Phone
$144
Atmos Energy Monthly Residential Bills
Average Customer Bill Remains Affordable
$58
$58
$43
* - For natural gas, Atmos Energy average residential bill for For all other utilities, these are national averages (citations available).

10. 2017 Mid Year Meeting
Denver, CO
Natural Gas Infrastructure Improvements - PHMSA and Infrastructure Trackers
June 6, 2017

11. 2017 Mid Year Meeting
Denver, CO
Natural Gas Infrastructure Improvements - PHMSA and Infrastructure Trackers
APPENDIX

12. Financial Impact Installation of PE Main in jurisdiction with
These unrecovered costs
= “Regulatory Lag”
$1,000,000 Investment
Revenues
Return on rate base = $92K
Coverage of $44K expenses
Year 1 2 3 4
$32K
$44K
$44K
$44K
Expenses
Installation of PE Main in jurisdiction with
Next Rate Case Result in Year 4
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