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Dallas Officials Decide Not To Enter Atmos Rate Hike Fight

(credit: KTVT/KTXA) Bud Gillett
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DALLAS (CBS 11 NEWS) – Bucking the trend of other North Texas cities, on Wednesday the Dallas City Council agreed to a rate hike with Atmos Energy — the natural gas supplier. It would boost the average residential bill by $2.08 a month, businesses by roughly $6.

Dallas went along with the proposal because city staffers believe they negotiated a better deal than other cities. City officials also weren’t sure they liked odds of fighting an appeal down in Austin.

Mayor Pro Tem Tennell Atkins likened it to a bad bet. “But if we’re going to roll the dice and gamble our citizens’, our taxpayers’ money… we might as well go to Las Vegas and place a bet on the Mavericks to win the NBA (title) game. And the Mavericks are not there. So that goes to show you it’s a losing bet.”

Other council members worry the deck is indeed stacked against them at what they call the business-friendly Texas Railroad Commission — the agency that would rule on an appeal. “The chances of our prevailing at the railroad commission are ‘slim to none,’” Vonciel Jones Hill told her colleagues.

City staffers saw no upside in turning down Atmos’ request and appealing to Austin. “If we deny the rates they will implement the full requested rates, the higher amount on June 1st,” said Nick Fehrenbach, the manager of the city’s regulatory affairs department. “That rate will remain in effect while that appeal is pending before the Railroad Commission. Subject to refund,” he said, and suggested any legal expenses would ultimately be passed onto Dallas users.

The city had negotiated Atmos’ proposed rate hike down from an $8.7 million increase to $6.3 million.

Still it got pushback, since Atmos reported a $1.4 billion profit in Texas alone in the first quarter of this year. “But when I see Atmos making record profits and record net income, why do they need the extra money?” Bill Callahan asked.

Fort Worth, Cleburne, Carrollton, and 150 other cities want to fight Atmos in Austin.

Philip Kingston argued Dallas should, too. “I think if we join with our neighbors we stand a good chance of keeping the rate reduction at zero or lower than what we’ve negotiated with Atmos.”

Kingston went on to rally against Atmos’ perceived tactics. “If essentially they have us cowed into not testing them on rate increases, they’re causing us to tell our own taxpayers, ‘Hey, we’ll raise your gas rates even though your gas utility provider has record profits.’”

Like the council, residents surveyed by BS 11 News were also split. “I don’t see much value in it,” one resident who did not identify himself told us. Resident Dan Rodick said, “I suppose it’d be okay if they’re taking that money and putting it back in to make it a better service, that’s fine. But if they’re doing it to make more money, they’re a business, they’ve got to make money.”

For its part, Atmos Energy told the council it spent $260 million on infrastructure improvements last year, according to VP Chris Felan. “The money that was spent for the replacement of steel service lines, of different kinds of pipes in our neighborhoods.” And he says it plans to continue this year.

The measure passed on a voice vote with two dissenters. Dallas’ new rates go into effect June 1.

(©2014 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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