The Dallas City Council Wednesday rejected a $10 million rate hike request from Atmos Energy. The vote was 14-1. The increase would have raised the average Dallas home customer bill by $3 a month.
The company said it needed the extra money to continue replacing old iron and steel pipes.
City council members have trouble forgetting 12-year-old Linda "Michellita" Rogers, who died in February 2018 after a gas explosion at her Northwest Dallas home. Her family's lawsuit blames old Atmos pipes for gas leaks.
"This is a company that has increased its dividend to shareholders while not taking care of its infrastructure here in Dallas. We had a little girl die," Councilman Philip Kingston said.
Neighbors were injured in two other gas explosions that occurred in the same neighborhood days before the blast that killed Rogers.
Immediately after the fatal explosion, the company launched an emergency replacement of lines to other customers in the Northwest Dallas area.
"Atmos Energy has money. They proved it when they had to go into an emergency to replace pipes in this 3,200-home area," Councilman Omar Narvaez said. "To come back literally a year later to say, 'We need more money to continue this service,' I don't think it's fair or right."
Company representatives at Wednesday's city council meeting had no comment. At a city council committee meeting Monday, Atmos Vice President Chris Felan said the company needed to make customers pay higher rates, and also pay dividends to attract investors.
"The rates that we charge our customers only cover about 50% of the investment that we make in our system. So in order to attract capital, we have to have a dividend," Felan said. "Over the past eight years in the city of Dallas alone, we have spent over $500 million, with $120 million since 2018."
Councilman Lee Kleinman is typically a business supporter on the city council, but he said he could not support this request from Atmos.
"Their shareholders should pay the price for the pipe replacement, not the rate payers, because in my view, it's their responsibility as a regulated monopoly to provide safe delivery of gas all throughout Dallas," Kleinman said.
Atmos is free to appeal the Dallas decision to the Texas Railroad Commission, which has the final say on natural gas rates.
Council Member Carolyn Arnold was the only one to vote against denying the Atmos request.
"Whether they get it here or get it on another level, we're going to have to pay to get that infrastructure taken care of," Arnold said. "I just believe that we're going to have to live with that, even though we've experienced some negative situations."
While the Atmos appeal to the state is pending, Dallas residents will continue to pay the current gas rates.