Dallas city council members will introduce a resolution on Wednesday that will order Atmos Energy to show cause “demonstrating the reasonableness” of its natural gas distribution rates in the city.
“The city has reason to believe that Atmos is over earning and that its current rates are excessive,” the resolution reads, in part.
Atmos Energy is the largest natural gas provider in Texas.
Earlier this year, Atmos requested a rate hike in Dallas that would equate to $10.7 million in additional revenue and result in a $3.25 per month increase in the average residential customer’s bill. City staff negotiated a settlement with Atmos that would have resulted in $7.8 million in increased revenue for the natural gas provider at a cost of about $2.50 more per month from the average residential customer in Dallas. Dallas city council members later voted to reject that increase.
The rate hike is meant to cover costs incurred by Atmos in its ongoing process to upgrade and install new infrastructure in the city, according to a company spokesperson.
“Over the last three years, Atmos Energy has invested over $200 million dollars in Dallas with $80 million spent in FY 16 to maintain the safety and reliability of our system here,” said Jennifer Altieri, Director of Public Affairs for Atmos. “Atmos Energy continues to responsibly invest in modernizing and upgrading our system and replacing aging infrastructure. Annual incremental rate increases allows us to recover these necessary costs, which is crucial in maintaining a safe system.”
If the resolution is passed by Dallas city council members on Wednesday, it would authorize the city to obtain financial information from Atmos in an effort to “make a determination whether the existing rates of Atmos are unreasonable or unjust, including whether they are in any way in violation of any provision of law, and if such rates should be revised.”
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In 2014, more than 130 Texas cities fought the Dallas-based company on what they said was an effort to enrich the company’s executives and shareholders at the expense of local customers.
The fight centered on “whether Atmos [was] being allowed to earn a rate of return far beyond what it needs to upgrade its infrastructure,” according to the Dallas Morning News.
The Texas Railroad Commission ultimately sided with Atmos in that instance.
