The Carrollton City Council unanimously approved a negotiated settlement over gas tariffs between The Atmos Cities Steering Committee, ACSC, and Atmos Energy Corporation Mid Tex division at its meeting earlier this month.
The approved tariff rate increase was negotiated to be for 9.9-percent increase for residential use and a 6.5-percent increase for commercial use.
“It’s weird to see a 10-percent increase at a time like this when oil and gas are so low, but it is what it is,” Mayor Kevin Falconer said.
Councilmember Mike Hennefer questioned how much savings the ACSC negotiated if residents still had to pay a near 10-percent increase in gas and oil tariffs.
“That is significantly lower than what they asked for, which I think was around 15 percent or so,” Falconer said. “This is just so we can say that we agree on the rate, and we can move forward on this item.”
Atmos Energy requested a change in tariff rates to the cities that use their gas and oil in the Dallas- Fort Worth area. The requested rate was deemed too high by the cities who use them, so Atmos Energy negotiated with the ACSC for a more reasonable rate.
“Occasionally, and it seems to be every couple of years, our utilities such as Atmos will come forward with a rate change request,” Falconer said. “You might imagine that when they ask for a change, it’s usually to go up. In this case, because it’s just a regulated environment – there’s not competition, like what you would have with your electricity provider. We have a regulation, and all cities who are impacted by this come together and negotiate those rates and come to an agreement.”
Rather than each city negotiating with Atmos Energy, the ACSC negotiated on behalf of Atmos Energy’s cities for a lower rate.
“This is a cost-saving process,” Carrollton City Attorney Meredith Ladd said. “We use the ACSC process to save a bunch of money and allow cities to come together to negotiate these rate increases, rather than having to do them individually, which would cost us a ton more money. They wanted over $130 million as an increase, and this group was able to negotiate it down to the $80.8 million, which is what was recommended by the consultant.”
The new tariff rates are scheduled to take place on Oct. 1.