Cost of Atmos service rising

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Denton customers to see higher bills despite cities’ denial of rate hike

This month’s natural gas bill will be a little higher for Atmos Energy customers, even though Denton and many other Texas cities have denied the company’s latest rate increase.

Atmos has appealed the denials to the Texas Railroad Commission, which is expected to hear the rate case in September, according to Austin-area attorney Alfred Herrera, whose firm Herrera & Boyle is representing Denton and 56 other cities in the dispute.

Last month, more than 130 cities refused the company’s request for another $45.6 million in revenue. The request translates into a nearly 10 percent rate increase for residential customers, or $2.02 per month for the average ratepayer. Commercial and industrial customers will likely see their bills increase a little more than 10 percent.

A consulting firm reviewed the data supporting the company’s rate increase and determined the amount wasn’t warranted, Herrera said.

“That’s what we’ll be debating at the railroad commission,” Herrera said.

“We believe the increase should be something less.”

Atmos’ media relations office did not return calls for comment Monday.

According to city documents, UtiliTech, a Pennsylvania company that specializes rate case analysis, determined that Atmos warranted an increase worth $26.6 million, at most. The firm noted at least nine items where Atmos, which has posted record profits in recent years, failed to prove that the additional money was needed from ratepayers. Among those items were unexplained cost overruns, uncollectable revenue lost in a new billing system, corporate image advertising, executive bonuses and other employee benefits.

The rate increase is the company’s third request since 2012 and the second in less than a year with Denton and the other member cities of Atmos Texas Municipalities. In January 2012, Atmos requested an increase of $49.1 million, about half of which was eventually granted by the railroad commission.

In July 2013, Atmos came back to the member cities asking for a system-wide increase of $22.7 million, which was negotiated down to $16.6 million by the cities that fought the increase.

Atmos Texas Municipalities is one of two coalition groups statewide that work together on rate cases, according to Denton Mayor Chris Watts. Member cities benefit from sharing costs with other cities in fighting a rate increase on behalf of residents.

“These are costs that would be born anyways, especially the expert analysis — that’s expensive,” Watts said.

Atmos’ latest request was filed in February. Should the railroad commission deny all or part of the increase on appeal, Atmos customers would likely see a refund of their over-payments this fall.

PEGGY HEINKEL-WOLFE can be reached at 940-566-6881 and via Twitter at @phwolfeDRC.


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