Cedar Park City Council denies Atmos Energy rate increase

On May 8, Cedar Park City Council approved a resolution to deny Atmos Energy Corporation's requested rate increase that would raise average monthly bills for residents and businesses.

Despite the council's resolution, the gas company can still implement its 9.2 percent increase starting June 1. If Atmos raises its rates, average residents would see their monthly bills increase by $2.02. Businesses would see their monthly bills increase by $2.16, city staffers said.

Assistant City Manager Josh Selleck told City Council that in February, Atmos requested a total rate increase of 9.2 percent to gain $45.6 million more in revenue. But consultants with the Atmos Texas Municipalities coalition believe Atmos only needs an additional $26.6 million, he said.

The coalition has 57 member cities including Cedar Park, he said. It reviews Atmos' rates using a revised legal procedure that the energy company and the coalition jointly approved in 2013.

In July, Atmos requested raising rates 5 percent to collect $22.7 million more in revenue. Experts from Atmos and the coalition negotiated until Atmos agreed to a lower increase of 3.7 percent to total $16.6 million. That rate increase began last summer.

But Selleck said the cities' denial of the 9.2 percent increase will be the first time under the new rate-review system that Atmos and the municipalities have not reached an agreement.

"So it's a little bit uncharted territory," Selleck said.

Atmos will appeal coalition member cities' refusals to the Texas Railroad Commission, and in the meantime has the right to implement its original rate increase, city staffers said. Atmos would need to issue refunds only if the railroad commission approves a smaller rate increase.

Selleck said he believes the railroad commission will approve a smaller rate increase as it has done in the past.

City staffers said that in January 2012, before the current rate review mechanism, Atmos asked for an increase of about $49.1 million, but the coalition and Atmos could not negotiate an agreement. Atmos then appealed to the railroad commission, which approved the company's revenue increase of $24.1 million.



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