Atmos Energy is asking the City of Dallas for a $10.1 million rate increase as it continues to replace aging metal pipelines across the city.
Concerns have been raised regarding the safety of the old lines following a series of gas leaks in Northwest Dallas last year, which led to a house explosion that killed a 12-year-old girl.
Atmos said it's since made "significant improvements to infrastructure and will continue to do so."
The proposed rate increase would cost the average residential customer an extra $3.05 per month, according to the city.
In a statement to NBC 5, a company spokesperson said:
"As you may be aware, Atmos Energy filed the Dallas Annual Rate Review (DARR) on January 15, 2019 for a $10.1M increase in rates driven by pipe replacement investment. This includes over $119 million in infrastructure improvements in the City of Dallas. Overall, the DARR filing package supports over $465 million of total capital investment made in the Mid-Tex system, with over $363 million spent to improve system safety and reliability."
After receiving Atmos' request for a rate increase, Dallas leaders hired a legal firm with expertise in gas rates to review the proposal.
Their conclusion -- Atmos was asking for too much money and a number closer to $8 million would be more appropriate.
Both the city and Atmos said they have been unable to reach a settlement.
The City Council must approve the rates by the end of May.
And for that reason, Dallas City Manager T.C. Broadnax has recommended they deny the increase.
Atmos would then be allowed to appeal the decision to the Texas Railroad Commission, which could then set the rates.
NBC 5's Courtney Gilmore contributed to this report.