Company: ATO
Filing Date: 2025-11-14
Form Type: 10-K
Source: 0000731802-25-000056
Chunk: 3

Company: ATMOS ENERGY CORP
Filing Date: 2025-11-14
Form: 10-K
Item: Item 1
Chunk 3
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. GRIP allows us to include in our rate base annually approved capital costs incurred in the prior calendar year provided that we file a complete rate case at least once every five 

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Table of Contents

years; the most recent of which was completed in December 2023. APT’s existing regulatory mechanisms allow certain transportation and storage services to be provided under market-based rates.

Our natural gas transmission operations in Louisiana are comprised of a 21-mile pipeline located in the New Orleans, Louisiana area that is primarily used to aggregate gas supply for our distribution division in Louisiana under a long-term contract and, on a more limited basis, to third parties. The demand fee charged to our Louisiana distribution division for these services is subject to regulatory approval by the Louisiana Public Service Commission. We also manage two asset management plans that serve distribution affiliates of the Company, which have been approved by applicable state regulatory commissions. Generally, these asset management plans require us to share with our distribution customers a significant portion of the cost savings earned from these arrangements.

Ratemaking Activity

Overview

The method of determining regulated rates varies among the states in which our regulated businesses operate. The regulatory authorities have the responsibility of ensuring that utilities in their jurisdictions operate in the best interests of customers while providing utility companies the opportunity to earn a reasonable return on their investment. Generally, each regulatory authority reviews rate requests and establishes a rate structure intended to generate revenue sufficient to cover the costs of conducting business, including a reasonable return on invested capital.

Our rate strategy focuses on reducing or eliminating regulatory lag, obtaining adequate returns, and providing stable, predictable margins, which benefit both our customers and the Company. As a result of our ratemaking efforts and legislative actions in our jurisdictions in recent years, Atmos Energy has:

•Formula rate mechanisms in place in four states that provide for an annual rate review and adjustment to rates.

•Infrastructure programs in place in all of our states that provide for an annual adjustment to rates for qualifying capital expenditures. Through our annual formula rate mechanisms and infrastructure programs, we have the ability to begin recovering approximately 95 percent of our capital expenditures within six months and substantially all of our capital expenditures within twelve months.

•Authorization in tariffs, statute or commission rules that allows us to defer certain elements of our incurred cost of service such as depreciation, ad valorem taxes, pension costs, and certain safety related expenses, until they are included in rates.

•WNA mechanisms in seven states that serve to minimize the effects of weather on approximately 97 percent of our distribution residential and commercial revenues.

•The