atmos energy rate increase 2022


Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. As a result of this seasonal nature, it makes the most sense to use the company's annual numbers for the dividend analysis. This is also a very affordable and viable near-term solution because renewable natural gas can be distributed using the existing infrastructure and utilizing existing natural gas appliances. In 2021, Europe imported 74% of Russias natural gas exports, supplying the European Union with 40% of its natural gas. Use this table to help make comparisons in your facility. Atmos Energy does possess most of the characteristics that other utilities do, such as generally stable cash flows over time. This is a sustainable way to produce natural gas, which was hinted at earlier in this paragraph. Natural gas prices vary by month, so we typically must secure a unique price for each individual month of the heating season. However, we also know that keeping our system up to date is incredibly important.. We should certainly not discount natural gas ones though and Atmos Energy certainly has a great deal to like.

As is always the case though, it is critical that we ensure that the company can actually afford the dividend that it pays out.

In February of this year, Atmos Energy added an Extraordinary Gas Cost Recovery Rider to offset the financial damages caused by Winter Storm Uri, which slammed Texas and other portions of the United States and Mexico from Feb. 1317, 2021. What's your bottom line? However, the current discussion about everything converting to electrification making gas utilities obsolete is quite premature. We saw this in a big way when the pandemic broke out and many renewable stocks surged in the capital markets. Environment improvement rider Fee applied for environmental improvement projects, based on peak demand. Atmos Energy Corporation, along with its subsidiaries, is engaged in regulated natural gas distribution and storage business.

Atmos Energy serves roughly 131,000 customers in Kansas. Atmos Energy Corporation is no exception to this as the company's 2.40% current yield is significantly higher than the 1.34% current yield of the S&P 500 index (SPY). News News |

The first reason is that some of the newly-purchased equipment will replace older equipment that the company will take out of service. The system access cost for small general service will go from $34.75 to $39.25, increasing by about 13%. (Jerry McBride/Durango Herald file), Bridge repair to cause significant delays Friday near DoubleTree intersection in Durango, Second suspect faces murder charge in death of uncle south of Cortez, Montezuma-Cortez High School gets new principal, With Rio Grande reduced to a trickle, river managers brace for more drying, Japan Cabinet sets Abe state funeral amid mixed public view, Monkeypox virus could become entrenched as new STD in the US, Report a paper delivery issue/suspend delivery. The Levelland City Council approved an Atmos hike of about 3.9 percent at its meeting Monday, March 10, according to City Secretary Beth Walls. To make decisions more complicated, varying billing structures and pricing options make it challenging to understand charges and effectively compare electricity costs to natural gas. applink.innerHTML = ' Open mobile app';

We do not believe in changing an investment based on short-term market swings. This tells us the degree to which the company is financing its operations with debt as opposed to wholly-owned funds. Uri was one of the storms that led to Texas winter power crisis. Natural gas futures were trading above $8 through February 2023 on the Chicago Mercantile Exchange on Friday afternoon, dipping below $5 in April 2023. Note: Taxes, city fees, basic service charges apply. applink.href = 'https://play.google.com/store/apps/details?id=com.steamboattoday.android&hl=en_US'; To put it simply, electricity is far less efficient at producing heat than natural gas. The example - (Table 4) below compares an electric and natural gas heating system. Approval was given to a 9.23% Return on Equity for Atmos Kentuckys base rates and a 9.13 percent ROE for its Pipeline Replacement Program. Inflations not mattering for natural gas prices. } Beginning in February, Atmos Energy also added 31 cents per ccf to gas rates in Southwest Colorado as a part of a extraordinary gas cost recovery rider meant to reimburse Atmos Energy for unexpectedly high natural gas prices created by winter storm Uri in February 2021 which brought freezing temperatures and snow to Southwest Colorado. This is relatively in line with management's projections so it does seem pretty solid.

The rate increases will be effective June 1.

As you will read, historically natural gas has been an excellent energy value and, for most applications, continues to be a better choice than electricity.

I have no business relationship with any company whose stock is mentioned in this article. Unfortunately, in this case, this does not improve the situation due to the $2 billion one-time cost that it took back in February 2021. The following table adjusts for the disparities, showing actual prices for natural gas and electricity for Minnesota commercial/industrial customers. However, the PSC denied the companys proposed Tax Adjustment Factor Rider and reduced several nonrecurring customer charges to ensure these charges only reflect the cost to conduct specific services. Cost of goods sold can be defined as the difference between beginning and ending inventories for tangible products resulting in an expense that reflects production and sales costs. Additionally, unlike the composition of customer costs for MidAmericans natural gas service, the variable fuel component (Energy Cost Adjustment) of a customers electric bill represents a much smaller portion of the total bill. We contract for interstate pipeline storage capacity and operate our own LNG storage facilities. We take proactive measures to help try to protect customers from extreme price spikes and seasonal price run-ups, which can occur during periods of high demand for natural gas, such as what occurred in February 2021 with the polar vortex. But even before the pandemic and the war in Ukraine, natural gas was set to rise in the U.S. Here they are: There may be some people that point out that the company's operating cash flow appears to fluctuate significantly from quarter to quarter but this is not abnormal for a natural gas utility. Summary: Rain on Sunday through next Thursday. Even the highest commercial/industrial natural gas firm rate on record is only $1.38 per therm.

Atmos Kentucky was also directed to discontinue the residential late payment fee and the charge it imposes on customers who request temporary service disconnection.

This is a defining characteristic of utilities as they tend to deliver slow but steady growth over the long term. In-depth Research on underfollowed dividend stocks with 7%+ yields.

It was the same word-for-word response Jennifer Altieri, vice president of public affairs for Atmos Energy, gave the Herald in an email in September about rising residential gas bills. Atmos Energy annual/quarterly cost of goods sold history and growth rate from 2010 to 2022.

In his email, Paradisa said, We closely monitor all the factors that affect natural gas prices. To reach Spencer Powell, call 970-871-4229 or email him at spowell@SteamboatPilot.com. |



However, there are very few stocks that have such a low ratio in today's market, which is doubly true in the slow-growing utility sector.

The rate for medium general service will go from $0.09055 to $0.09639, increasing by about 6%. The Commission conducted two public comment meetings on Dec. 6, 2021. "The city has had extensive negotiations with Atmos," Lubbock Assistant City Attorney Richard Casner said.

I have no business relationship with any company whose stock is mentioned in this article. By subscribing, you will get access to our best ideas earlier than they are released to the general public (and many of them are not released at all) as well as far more in-depth research than we make available to everybody.

The higher cost was the result of 2005's unusually active and destructive hurricane season. The good news is that as the weather gets warmer, you will likely use less natural gas and the gas supply portion of your bill will go down. Those costs will be passed along to the consumer and could even widen the gap between natural gas and electric costs. Use of this site constitutes agreement to our Online Terms & Conditions and Privacy Policy.

To determine how much you are paying per kWh: Taxes, city fees, basic service charges Additional charges for having natural gas service. Atmos Energy Corporation provides natural gas service to approximately three million households and businesses in eight states and has six gas utility operating divisions, including one that serves Kentucky.

We have provided a few examples below that you can copy and paste to your site: Your image export is now complete. We set the customer cost of electric generation fuel annually and it does not change with commodity prices as natural gas does. Atmos Energy estimates it will increase monthly bills by about 4% to 5%. This ratio is a modified form of the familiar price-to-earnings ratio that takes a company's earnings per share growth into account. At Energy Profits in Dividends, we seek to generate a 7%+ income yield by investing in a portfolio of energy stocks while minimizing our risk of principal loss.

Renewable natural gas is produced by collecting a gas that is emitted by decaying organic matter and then upgrading it to match the composition of dry natural gas. Average monthly commercial gas bills will rise from $238.86 to $322.50 as commercial rates increase from 64 cents to 89 cents per ccf, marking a 40% change. This amount fluctuates based on the monthly market price. A settlement agreement proposed in January reduced the request to $2.22 million. The first portion of your gas bill is for the cost of the gas itself, called the, The second portion of your natural gas bill is the. We can also see it in the fact that environmental, social, and governance funds now account for 10% of all worldwide mutual fund assets. Here is how that compares to some of the company's peers: As we can see here, Atmos Energy Corporation has by far the lowest proportion of its operations funded by debt of all of its peer group. The cost per therm varies, based on market prices.

I am not receiving compensation for it (other than from Seeking Alpha). We recognize the difficulties and hardships that a rate increase can bring to our members. One of the reasons that many investors purchase shares of utility companies is because of the relatively high dividend yields that they tend to possess. Atmos Energy Corporation is certainly no exception to this as the company's 2.40% dividend yield is certainly quite a bit higher than many other things in the market.

Please check your download folder. We have provided a few examples below that you can copy and paste to your site: Your data export is now complete. The company's finances are incredibly strong and its 2.40% dividend yield looks secure. Many investors would likely not consider a natural gas utility to be in this category because natural gas is a fossil fuel and as such it will always produce some carbon emissions and the utility cannot do something like deploying solar panels to produce it (although there are some ways to produce natural gas that are less carbon-intensive than drilling into the ground).

See Table 1 below for an electric versus natural gas price comparison.

Register today. Here are some contributing elements affecting natural gas prices: The amount of natural gas you use also has an impact on your bill and can be controlled by taking steps to keep your. A pass-through cost is the direct cost consumers pay for changes in natural gas prices. This is the money that is available to perform tasks such as paying a dividend, reducing debt, or buying back stock. However, we believe that, given the current structural problems in the United States, the best investment opportunities may lie elsewhere in the world. More natural gas purchases will be necessary to meet customer demand through the rest of the heating season; natural gas purchases that we have not secured in advance can fluctuate significantly on a monthly and daily basis over the course of the season. KY Tornadoes and Storms - How to Help Our Kentucky. In fact, it is likely that the future of natural gas utilities is quite long-term. The Commission's regulatory oversight of public utilities primarily pertains to rates and terms of service. This is certainly more than reasonable for relatively conservative utility investments. According to YVEA, inflation, higher costs of materials used for infrastructure, higher gas prices, higher shipping costs and higher payroll costs all factored into the decision to increase rates. In Illinois, any impact to electric bills would be minimal because MidAmericans generation portfolio consists of a diverse set of resources, and natural gas-fired generation only represents a small portion.

Volatility in energy markets created by pandemic and war in Ukraine are behind the rise, Atmos Energy Corp. announced that gas rates will increase in Southwest Colorado next month with residential bills rising 26% and commercial bills 35%. Then take a second look at

Commercial building with a 2 MM Btu heating load. But if you want natural gas a year from now (in) May 2023, thats $4.70, Lange said. As a result, an item that the company purchases this year will have a lower value in 2026. As of December 31, 2021, Atmos Energy Corporation had $7.6507 billion in net debt compared to $8.2895 billion in shareholders' equity. Topeka, KS - Today, the Kansas Corporation Commission (KCC) issued an order approving a $2.22 million annual revenue increase in energy rates for Atmos Energy Corp. customers. Sign in now to get access to your CenterPoint Energy online services to pay your bill, manage communication preferences and more! "The rate increase is based on our need for system reliability and improvement, infrastructure replacement requirements for safe and reliable service and growth of our system," she said. The rate base is the value of the company's assets upon which regulators allow it to earn a specified rate of return. It also tells us how well the company's equity will cover its debt obligations in the event of a bankruptcy or liquidation event, which is arguably more important. Mechanical Contractors & Commercial Distributors, Coal combustion to produce electricity is the biggest source of many pollutants in Minnesota*. To find out how much you are paying for your utilities, take a closer look at your bills and, using the sample bills below (see All of the costs to purchase and transport the natural gas that we supply to our customers are passed through dollar-for-dollar on customers' bills without any markup. Their regulated gas distribution operation in Kentucky serves about 176,000 residential, commercial, and industrial customers in central and western Kentucky.

One of the big things that it is doing is modernizing its infrastructure. To take it a step further, use the following equation to convert your actual kWh usage to therms: 1 kWh = 3,413 Btu = .0341 therms

The second reason is that depreciation reduces the value of a company's hard assets over time.

I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. Atmos Energy Corp. issued a notice earlier this month that gas rates will increase in Southwest Colorado next month with residential bills rising 26% and commercial bills 35%. Depending on the economic conditions at the time, this may not be possible to do at the same interest rate and could therefore result in an increased expense for the company. According to Zacks Investment Research, Atmos Energy Corporation will grow its earnings per share at a 7.28% rate over the next three to five years. Atmos Energy intends to do exactly this as the company currently plans to invest approximately $13 to $14 billion into improving its infrastructure over the 2022 to 2026 period. The Commission will open a separate proceeding to investigate Atmos Kentuckys imposition of some nonrecurring charges that are not included in the companys tariff, as required by PSC governing statutes and regulations. Main Content, 2. Your California Privacy Rights / Privacy Policy. This loss resulted in the company having a negative trailing twelve-month operating cash flow of $1.1795 billion.

This adds to the company's appeal since we can get access to its incredibly strong balance sheet at a bargain price. The G-DSMCA is a modification meant to recoup costs associated with demand side management (DSM) energy efficiency strategies, as required by the Public Utilities Commission.

Amid a volatile energy market, Paradisa encouraged Atmos Energys customers in Southwest Colorado to also look at their own consumption to help mitigate the effects of rising natural gas prices on their energy bills. Is this happening to you frequently? The usual way that a utility grows its rate base is by investing money into constructing, upgrading, modernizing, and even expanding its utility infrastructure.

Commercial consumers, however, will see their G-DSMCA modifier go down, as the base commercial rate will go from $0.81 to $0.47, with the volumetric rate per ccf going from $0.00316 to $0.00185.

Lange said those prices represented investors beliefs that the energy market will remain volatile for the next year before a return to normal. The company incurred these costs due to having to purchase natural gas at the incredibly high prices that were prevalent during that event, which is most likely a weather event that will not happen again during our lifetimes. As such then, it will make more sense to compare the company's valuation to some of its peers in order to see which offers the most attractive relative valuation. The one that Atmos Energy has proposed is clearly large enough to accomplish this. The company serves natural gas distribution customers from the Blue Ridge Mountains in the East to the Rocky Mountains in the West. If we back that out, we can see that the company's cash flows would have been very stable over the multi-year period. Looking for a helping hand in the market? This comes from the fact that natural gas is used primarily as a heating fuel so it is much more heavily consumed during the colder months of the year. In addition, all subscribers can read any of my work without a subscription to Seeking Alpha Premium!

In short, the company's rate base would decline every year in the absence of any new investment into it.

But, it's also important to consider price in the context of efficiency. At its core, electrification refers to the conversion of things that are traditionally powered by fossil fuels to the use of electricity instead. The biggest reason for this is that utilities, in general, tend to be relatively low growth companies so they deliver a larger proportion of their total return to investors through the dividends that they pay out than a company that can deliver much higher earnings growth, which would likely favor capital gains. The impact for customers inside Lubbock city limits totals $2.75 million.

Table 1, Click to view natural gas costsversus other fuels. All rights reserved. Historically and currently, natural gas costs are well below that price.

In the case of a utility like Atmos Energy Corporation, one metric that we can use to value it is the price-to-earnings growth ratio. That is much lower than the growth rate that we would see if wide swathes of the economy were to convert from fossil fuels to electricity so the agency appears to believe that natural gas will be with us for a very long time. } Atmos Energy is also adjusting its rates. This cost is passed through to the customer without mark-up.

Ian Lange, an associate professor of economics and business at the Colorado School of Mines who specializes in energy and natural resource economics, said a number of forces are working together to create volatile energy market. The value of this retired equipment is removed from the company's rate base at that time.

Main Menu, and 3. Backlinks from other websites are the lifeblood of our site and a primary source of new traffic. Your financial contribution supports our efforts to deliver quality, locally relevant journalism. Please update to the latest version or view our site in another browser. This is obviously not enough to pay any dividend, let alone the $90.4 million that the company actually paid out during the period. The pandemic depressed the supply of natural gas, but as countries have begun to emerge, demand has increased, sending prices upward, he said. In addition to this, the company must make regular payments on its debt if it is to remain solvent. Search. However, prices in the U.S. are still well below the more than $40 natural gas is trading for in Europe. The reason for the increase has to do with the volatility of the wholesale natural gas market due to supply and demand.. Delivery and other charges make it even more difficult to accurately assess cost differences. FRANKFORT, Ky. (KT) The Kentucky Public Service Commission issued a final order on Friday in the rate case filing of Atmos Energy Corporation, authorizing a $2.6 million, or 1.51% increase, in base rates for their natural gas customers. It is always critical that we do not overpay for any asset in our portfolios. It is always critical that we look at the way a company finances itself before making an investment into it. Interim rate adjustment After a utility has filed for a rate increase, this amount reflects potential cost increases. YVEA also says it is making significant investments in wildfire mitigation, including tree-trimming projects, installing more electronic reclosers and upgrades to their system so they can switch to fire protection mode as quickly as needed. The firm's strategy is primarily buy and hold, but will stray from that strategy on occasion.

This is because debt is a riskier way to finance a company than equity because debt must be repaid at maturity. 8, 2006.

applink.innerHTML = ' View in mobile app'; Each of us here at YVEA realizes that our dollar isnt going as far as it once was, read the newsletter. If natural gas futures are any indication, Southwest Colorados residents could continue to see higher gas bills into next year.

To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. As shown in the examples provided, historical and current natural gas prices are significantly lower than the average retail electricity price.

Unfortunately, there is no simple answer. According to a YVEA newsletter, a typical small general service member using 913 kWh will see a bill increase of $11.27 a month in 2022. Often, we use more electricity when running air conditioning, fans and other comfort systems during warmer weather. I am not receiving compensation for it (other than from Seeking Alpha). else { Winter weather can also greatly impact market prices. This is particularly true for those on limited incomes or living in colder climates. Its geopolitical uncertainty, he said. Members of Energy Profits in Dividends get exclusive ideas and guidance to navigate any climate. Multiple factors are affecting supply, demand and market conditions, causing both historically high prices and price fluctuations for natural gas.
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