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Committee endorses Atmos settlement reducing requested 2025 rate increase; rates to take effect June 1 if council adopts
Summary
After staff and outside consultants negotiated with Atmos Energy, the committee voted to adopt a settlement that lowers Atmos's Dallas-area requested increase from $31.4 million to $27.9 million annually. The settlement would raise the average residential bill about $7.83 per month and reimburse the city's rate-case expenses.
The Government Performance & Financial Management Committee voted May 27 to recommend adoption of a negotiated settlement with Atmos Energy on the utility's 2025 Dallas Annual Review (DAR) filing. Under the proposed agreement, Atmos would increase rates within the City of Dallas by $27.9 million annually; the company had requested $31.4 million.
Susan Harris, presenting for the city, summarized the case history and staff's work with the Garrett Group, an outside consultant retained to review Atmos's filing. Harris said Garrett identified adjustments totaling about $7 million and that staff and outside counsel met multiple times with Atmos before agreeing to the May 7 settlement.
City materials and Harris said the settlement, if adopted by council, would make rates effective June 1 and raise the average residential bill by $7.83 per month (7.93% including gas costs); the average commercial bill would rise about $12.19 per month (2.46%). Atmos also agreed to reimburse the city's rate-case expenses; Harris said those funds would not be passed on to consumers.
Atmos representatives joined the meeting. Chris Phelan, identified as Atmos's vice president of rates and regulatory affairs, said regulatory and federal requirements and continued investment in infrastructure are driving capital spending. "We need to have it's a 2 way thing. It's a balancing act. We need to continue to invest in our system... but also we need the rate activity to sort of offset that because we spent those funds," he said.
Committee members asked whether denial of the settlement would stop Atmos's infrastructure work; Atmos representatives said the company is required to maintain a safe system regardless of the rate decision, though future capital spending levels could be affected. The city manager's recommendation, as presented, was to adopt the settlement to avoid litigation and the uncertainty of an appeal to the Railroad Commission of Texas.
The committee passed a motion to adopt the negotiated settlement and will forward its recommendation to City Council; staff said the ordinance adopting the settlement is on the council agenda for the next day. Harris told members that if the council declined the settlement Atmos could implement the full requested increase and appeal the city's decision to the Railroad Commission, subject to refund while the appeal is pending.
