A coalition of 150 North Texas cities served by Atmos Energy said it will request that the Texas Railroad Commission (TRC) reconsider its decision Thursday allowing Atmos Mid-Tex to increase residential gas rates by $10.6 million.

The coalition said it will urge railroad commissioners to affirm the TRC's Feb. 2 finding that Atmos should reduce gas rates by $23 million annually.

"North Texas ratepayers are shocked that the commissioners reversed the judges' findings and now effectively penalize residential ratepayers to reward a company's mismanagement," said Jay Doegey, chairman of the coalition. "Our decision to push the issue is rooted in our conviction that this monopoly gas utility needs to be more accountable for its questionable expensing practices."

The rate case started in 2005 when 90 North Texas cities began an inquiry into the rates charged by Atmos Mid-Tex after the company filed two surcharge requests in less than two years. Upon investigation, the cities said they uncovered questionable expensing and operating practices, including two years when there were no invoice data for expenses the company sought to pass on to consumers.

On Feb. 2, TRC judges concurred with the cities, issuing a 186-page decision calling for Atmos to lower rates by $23 million and to provide a $2.5 million refund of improper surcharges. The judges ruled that "the inclusion of such exorbitant expenses [limousine rides, first-class airfare, lavish meals, executives gifts, entertainment, expensive furniture and $75,000 worth of artwork] seriously undermined the credibility of the filing itself and of the [Atmos witnesses.]"

The commissioners' March 29 decision to overturn the judges' decision adds an estimated 70 cents/month to the average residential gas bill and is particularly troubling because the commission approved a $5.9 million rate cut to industrial customers at the same time, the coalition said.

For its part, Atmos said it understands and shares the frustration of cities in the coalition.

"We asked for a $56 million increase because the Mid-Tex Division's rates are among the lowest in the region and well below our actual cost of delivering service," the company said. "The Texas Railroad Commission did not sufficiently address the needs of the system and the company. Nonetheless, attorneys for the coalition should be ashamed for wasting time and money, since their legal fees are passed on directly to natural gas customers."

The commissioners' March 29 decision also places them at odds with the Business and Commerce Committee of the Texas Senate, which two weeks ago unanimously approved a bill to repeal surcharges allowed under the Gas Reliability Infrastructure Program (GRIP). Atmos' GRIP surcharges and expensing decisions were the basis for the cities' original rate investigation, Doegey said.

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