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Atmos, Accused of Overcharging, Seeks Texas Rate Hike

June 5, 2006
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Dallas-based Atmos Energy Corp.'s Mid-Tex Division filed with the Railroad Commission of Texas for a gas rate hike that would increase the typical residential bill $4 per month.

The division serves 440 incorporated cities and approximately 1.5 million customers, including the Dallas/Fort Worth Metroplex area. The filing is in response to customer pressure to cut rates.

North Texas municipalities have been trying to force rate reductions of about $2.59 per month for the average customer, reported the Star-Telegram of Fort Worth. The rate hike would boost annual revenue by about $60 million. Municipalities claim they are being overcharged $35 million a year.

Atmos, the state's largest gas utility, is requesting several rate design changes, including a weather normalization adjustment and a revenue stabilization adjustment, which should reduce fluctuations in customer bills and more closely align interests of customers and the company, Atmos said. The request would increase rates customers pay for transmission and delivery of gas to their homes and businesses. The filing, if approved, would authorize an overall return on investment of 8.86%.

"We are simply asking for a fair rate of return on our shareholders' investment and recovery of our operating and customer service costs," said Mid-Tex Division President Dick Erskine. If the rate increase is approved, it won't be the first taste Atmos customers have had of higher costs for natural gas service.

Last October Atmos was predicting substantially higher costs for the gas commodity in the 2005-2006 heating season. Assuming a normal winter, the average residential customer in North Central Texas could expect to pay $690 during the winter heating months of October 2005 through March 2006, the company said. That compares with an average cost during the last heating season of $367 (see NGI, Oct. 10, 2005).

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