On Sept. 17, Colleyville City Council approved a negotiated settlement with gas distributor Atmos Energy Corp. that would increase gas utility rates effective Oct. 1.
Colleyville citizens will not be the only ones to see a rise in rates. Those in about 170 other Mid-Texas cities will experience similar upticks.
The settlement was between the Atmos Mid-Texas Division and a coalition of cities the gas distributor serves. This coalition is known as the Atmos Cities Steering Committee—of which Grapevine and Southlake are also members, according to the committee’s website.
The committee works with Atmos to evaluate the company’s annual rate increase request through a special review process called the rate review mechanism, or RRM, Colleyville Assistant City Manager Adrienne Lothery said.
“Using the RRM process is to the advantage of rate-payers, and the cities’ involvement ultimately helps…keep those rate increase requests to a minimum,” Lothery said at the Sept. 17 meeting.
Essentially, Lothery said, Atmos claimed it was justified in requesting additional systemwide revenues of $70 million based on its data from 2018.
That $70 million was reduced to $54 million through the RRM process. Of that $54 million, it was claimed that the steering committee cities were responsible for $39.3 million, Lothery said. After negotiations, that figure was dropped to $35.4 million.
“The financial impact on the average residential bill is an increase of $2.05 on a monthly basis, or about 3.7%,” Lothery said.
The average commercial consumer would see an increase of $6.18, according to meeting documents. The new rates would be consistent for all cities in the coalition, Lothery said in an email. Each city will have to vote whether to approve or deny the settlement.
Southlake City Council recently approved the settlement at its Sept. 3 meeting, and it will be an agenda item at Grapevine City Council’s Oct. 1 meeting, officials said.
“The settlement supports investment of over $519 million of total capital investment made in the Mid-[Texas] system with over $408 million spent on improving system safety and reliability,” Atmos Public Affairs Manager Kelly Biegler said in an email.
In 2018, Atmos replaced 290 miles of distribution pipes and more than 16,000 steel service lines, Biegler said in her email. The higher rates are needed, she said, to make these necessary investments.
If the coalition had rejected Atmos’s request and the two parties had not agreed to a settle, the rate increase may have been higher, Lothery said. Atmos could then have appealed to the Texas Railroad Commission—the regulatory authority of the gas industry—and received a much higher amount.
“In my opinion, it’s to the benefit of citizens and rate-payers that the cities are involved in this process because their annual rate increase would be far higher were we not involved,” Lothery said.