Atmos Energy seeks natural gas rate hike in Dallas

Atmos Energy is seeking another rate hike for customers in Dallas.

Atmos says it's for safety-related pipe replacements. The city asked the company to speed up replacement of old pipes after a natural gas explosion killed a 12-year-old girl in February 2018.

Unlike previous years, the city and Atmos have not been able to come to a settlement about Atmos Energy’s proposed $10 million hike. It would amount to an extra $3 a month for the average bill.

Members of a Dallas City Council committee were in no mood to approve the hike on Monday, but the state will likely approve it anyway.

“In my opinion that cost of that repair should not be borne by the ratepayers, it should be borne by the shareholders for the fact their management made the decisions that ended up with the fairly catastrophic situation here in Dallas,” said councilman Lee Kleinman.

The natural gas explosion that killed a 12-year-old girl in February 2018 brought attention to the hundreds of miles of aging pipes in Dallas in need of replacement.

“It’s not up to the ratepayers to pay for their mistakes, it’s up to the shareholders, and shareholders to hold their management accountable,” Kleinman said.

In the two days before the Northwest Dallas home on Espanola Drive blew up, two other homes had gas related incidents: one a fire and one an explosion.

All three homes shared the same steel pipeline and Atmos later determined it was cracked. Days after the deadly explosion, Atmos shut off gas in the area and ordered evacuations in surrounding neighborhoods.

In 2018, the company replaced nearly 100 miles of pipe in Dallas and increased the number of crews in the city by 250 percent.

“We continue our commitment to accelerate our cast iron removal and replacement and steel service lines,” said Chris Felan, Atmos Energy Vice President of Rates and Regulatory Affairs.

Kleinman questioned Felan about why they increased profits to shareholders last year by 8 percent -- about $100 million.

“We are a public company, the rates we charge our customers only cover 50 percent of the investment we make in our system. To attract capital, we have to have dividends as folks loan money to us,” Felan said.

Kleinman didn’t buy it.

“We shouldn’t be allowing this kind of service level in the city while rewarding the shareholders. Shareholders need to feel it,” Kleinman said.

Felan declined to answer questions from reporters after the meeting.