Dallas City Council members on Wednesday gave a resounding no to Atmos Energy's request for 10 percent rate hike.
Atmos actually supported the Dallas City Council’s no vote because it allows them to start the appeal process and take up their case with the Texas Railroad Commission. The commission is a state agency known to typically approve rate hikes like the one Atmos requested.
Dallas City Council members said Wednesday they were frustrated that a 12-year-old girl died as a result of natural gas explosion linked to an old leaky Atmos pipe and the company isn’t footing the costs of fixes.
“If we as a city can’t protect our residents from death, that’s pretty bad. It starts with putting attention of the people who deserve it which is the railroad commission and governor’s appointees,” said councilman Philip Kingston.
The natural gas company says it needs the money to help get hundreds of miles of old pipes out of the ground. Councilwoman Carolyn King Arnold believing the company, was the only council member who did not want to deny the rate increase.
The hike would amount to three dollars a month for the average rate payer.
“At the end of the day it still means this, we will have to pay for infrastructure to care for our community. I know we want our communities taken care of, in my opinion we have to just bite the bullet and support getting it done in increasing the rates,” Arnold said.
But Dallas City Council member Lee Kleinman believes the regulated monopoly has plenty of money to get the old pipes out of the ground without passing the costs onto citizens.
“They have a huge amount of cash flow, they can afford this stuff,” Kleinman said.
Kleinman pointed out that the company increased the profits paid out to shareholders by eight percent last year, a total of $100 million, despite the need for the costly repairs. The rate increase would generate $10 million.
“They should be telling shareholders they’re not paying dividends because upgrading infrastructure, not telling ratepayers the reason you are paying more is to upgrade infrastructure. It's just a matter of who is going to pay who will be held accountable,” Kleinman said.
The request for a rate increase will now go to the Texas Railroad Commission. There is still an opportunity for the city to negotiate the rate down, before the hearing before the Railroad Commission.