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Atmos Has Dallas Over a Barrel, Is Raising Your Gas Bill Again

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It's a wonderful time to be an Atmos Energy shareholder. The gas distributor's profits -- and dividends -- keep going up.

It's much less wonderful to be an Atmos Energy customer, who is fueling those profits through increasingly large bills.

Despite its profitability and despite getting six rate hikes out of the city in seven years, Atmos is asking Dallas residents to pay a bit more: $8.7 million total per year (a 12.3 percent increase) or about $2.75 more more per customer per month.

Negotiators hired by the city have talked the gas distributor down to a mere 9.5 percent increase, but that's as low as Atmos would go.

The company argues that it needs the extra money to replace aging pipes and infrastructure. The Texas Railroad Commission in its wisdom has determined that gas distributors should be allowed to pass along to ratepayers the cost plus a 10 percent return on investment.

The probable rate increase was a bitter pill for Dallas Councilman Philip Kingston and his colleagues on the council's Budget, Finance, and Audit Committee to swallow at this afternoon's meeting. The problem is, there's basically nothing they can do about it.

Technically, the city does have a couple of other options. It can reject Atmos' request for a rate increase and keep rates flat. Or, it can set whatever rate it deems fair. In either case, however, Dallas would have to swallow the full 12.3-percent increase temporarily while the case was on appeal to the Texas Railroad Commission, then permanently when the notoriously industry-friendly agency approves the appeal.

Councilman Tennell Atkins has seen cities try this approach, and he's seen them fail.

"I've been there, and I've seen that we've got to negotiate what is best for the city right now rather than take a chance down in Austin," Atkins said.

The committee voted to approve the negotiated 9.5-percent rate hike, which will go before the full City Council next week. Kingston was the only no vote, even though he acknowledged that, given the politics, fighting Atmos' request is futile.

"We give a lot less money to Railroad Commission candidates than Atmos and its competitors do."

Send your story tips to the author, Eric Nicholson.

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