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Atmos customers in Denton to get rate hike next month

Denton residents who use Atmos Energy for their natural gas service can expect their monthly bill to increase by about $2 per month starting in June.

The measure also will impact commercial accounts, which will see monthly bills increase by an estimated $6 per month, on average. 

The rate increase passed 4-3 in Denton City Council last week and was reconsidered in an hourlong executive session Tuesday. After the session, no action was taken, and the rate increase for more than 20,000 gas meters across the city will go into effect Thursday. 

Mayor Chris Watts, who called for Tuesday's special meeting, said after the council passed the rate increase, he felt they needed further explanation and information. 

"I asked for this motion to be considered because I felt that I sort of knew intuitively what the facts were on the ground, but there were other questions I had and facts I wanted some clarity on before letting this go to a final acceptance of the resolution," Watts explained.

Denton is one of 56 cities in a coalition that negotiates with Atmos Energy over natural gas price increases every year. This year, Atmos requested the entire coalition pay $57.4 million more for gas than last year. The coalition's attorney countered with $32.1 million, and the two parties settled on a $48 million increase this year. 

Denton officials voiced concerned because they weren't brought in on the talks to reach a final settlement. The matter was placed on May 23 consent agenda for council, then pulled for discussion at the meeting. The measure passed 4-3, with Keely Briggs, Sara Bagheri and Gerard Hudspeth voting against the increase. Council members voting for the measure were Watts, Dalton Gregory, Kathleen Wazny and John Ryan.

Watts and other members of the council said they didn't love the process of getting to this rate increase, but they felt a bit trapped. If the council didn't approve this increase amount, Atmos most likely would appeal its decision to the Texas Railroad Commission. 

Dallas is teeing up for that fight after the city approved a smaller rate hike than Atmos requested. But Dallas isn't part of a coalition and bargains on its own. Plus, with Dallas having more than 10 times the number of customers Denton has, legal fees from an anticipated showdown would be less expensive for Atmos customers in Dallas than here.

Regardless of the outcome, customers in a municipality that fights the increase have to pay for legal fees for both the city and Atmos, which are estimated between $1.5 and $2.5 million. The fees would be between $5 and $8 a month for each customer in Denton, even though the lowest increase on the table would cut their monthly bills by less than a dollar. 

"That seems like a bad deal," Gregory said. "I would never spend $5 to $8 to save 70 cents. That's not a win. There's no way to calculate it other than losing."

Moving forward, Watts said these discussions have paved the way for staff and council to start to look at new ways to assess rate increases before another increase is presented next year. 

"I think that what this has shown me is that we have a process that needs to be fixed, moving forward from this place, to ensure we have the best opportunity to get the best rate we can, and use all negotiating tactics and ideas to achieve that," Watts said. 

JENNA DUNCAN can be reached at 940-566-6889.