Railroad Commission Forces Move to Uniform Rates Across Panhandle for Atmos Energy Customers

Posted on Oct 10, 2012

Amarillo, TX – While the City of Amarillo was unable to prevent an increase in rates for Atmos Energy customers, negotiations did result in a reduction of an original request in February that would have resulted in $11 million in increased revenue for Atmos Energy. When Atmos Energy submitted its initial application to the City of Amarillo on Feb. 7, the Amarillo City Commission denied the request.

Atmos Energy appealed the City’s denial to the Railroad Commission of Texas and after months of discussions, the City’s staff and legal counsel was able to negotiate that amount down to $6.02 million – a rate increase approved Tuesday, Oct. 2 by the Railroad Commission of Texas. Of the $6.02 million that will be collected by Atmos Energy’s West Texas Division, the City expects $3.51 million of that to be recovered from ratepayers in the Amarillo area.

This represents an overall increase in revenue for Atmos Energy of about 7.3%. For the average residential customer in Amarillo using 61 Ccf of gas per month, a customer’s bill would increase by approximately $3.24 per month, starting this month.

As part of Atmos Energy’s request to increase rates, the company also proposed that rates in all cities it serves in the Panhandle be the same. This was one of the most contentious issues in the rate case because doing so would increase rates dramatically in Amarillo and Lubbock, while giving rate decreases to other cities in West Texas served by Atmos Energy. For well over 30 years, rates in Amarillo have been set based on what it costs Atmos Energy to provide service in Amarillo, not the cost of providing service in other west Texas cities.

“We don’t believe that the City of Amarillo’s rates should be set based on what it costs to provide service outside Amarillo,” says Mayor Paul Harpole. “But when the Railroad Commission did not allow us to present our evidence on what it actually costs Atmos to provide service in Amarillo, we directed our consultants and attorneys to minimize the increase as much as possible for Amarillo ratepayers by reaching the settlement.”

City Commissioner Jim Simms added that the City also instructed its attorneys to ensure that Amarillo is able to present its case to the courts so that the City can finally get a fair hearing on whether rates in Amarillo should be the same as rates in surrounding towns. 

“We are baffled by the actions of the Railroad Commission,” Simms says. “They’re acting very much like the federal government imposing costs on the local communities that our community had no part in causing. For more than 15 years, the Railroad Commission has not had to deal with regulating gas utility rates in Amarillo. Through local control, we have been able to maintain a healthy gas utility providing reliable service. Now, the State has come in and is trying to take that control away, and the results are not good for our citizens.”

The Mayor noted that the City of Amarillo will continue to protect its right to control and regulate utilities providing service in Amarillo and will consider challenging the Railroad Commissions’ order in court.

Gas customers with questions about the rate increase may contact Atmos Energy’s customer service center at 1-888-286-6700.

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