By Patty Montagno
Atmos customers in Sachse and surrounding cities will see a $1.14 increase on their monthly bill June 1 due to a lengthy review of reasons presented during the May 18 Sachse City Council meeting.
The rate increases will affect the total cost of natural gas for city use, as well as residential and commercial customers within the city.
Before e council voted on this important issue, Finance Director Teresa Savage explained that the request was to approve a negotiated settlement between the Atmos Cities Steering Committee and Atmos Energy Corp., Mid-Tex Division regarding the company’s 2014-’ 2015 Rate Review Mechanism filings.
“Rates cannot change without the adoption of a rate ordinance by cities,” she said.
The purpose of the ordinance is to approve a settlement agreement and the resulting rate change under the RRM tariff.
As a result of the negotiations, the committee was able to reduce the company’s requested $28.8 million rate increase to $21,962,784. When added to the settlement of the 2014 RRM filing and the adjustments the company will receive total additional annual revenues of $65.7 million.
According to Savage, in 2013, council approved an ordinance adopting rate and review mechanisms for Atmos Energy, then in 2014, the council approved a resolution denying the rate increase requested by Atmos Energy Corp.
“The analysis did not support the requested increase and negotiations to reduce the amount of the increase were unsuccessful. While awaiting the results of the appeal of the 2014 rate request, Atmos filed a request for another rate increase in February,” Savage said.
An organized committee analyzed schedules and evidence offered by Atmos used to support its 2015 request and the parties have reached a negotiated settlement.
“The recommended settlement agreement required Atmos to abate its appeal of the city’s rejection of the 2014 RRM rate increase pending approval by all ACSC cities of the Settlement Agreement,” she said.
“It also required Atmos to give the city the benefit of the adjustments to the 2014 rate increase.”
For bills rendered after June 1, the monthly residential customer charge will be $18.60, which is a 1.59 percent increase over current rates; the typical commercial customer will see an increase of $2.69 or 0.96 percent.
Atmos Representative Eva Hummell said the request was for capital improvement items.
“We want to insure safety and reliability,” she said. “The increase is also for enhanced customer service, and the ongoing replacement of gas lines.”
Some councilmen expressed bewilderment over the request.
“This is a record year of profit for the company,” Councilman Brett Franks said. “Why aren’t those profits being used for these expenditures? And specifically what improvements will be in Sachse?”
Hummell, being a new employee, did not know the answers to the questions but added she would get back to the city with those responses if required. The mayor said it was his understanding that if council didn’t adopt the resolution it would go through anyway and potentially the city would have to pay a lot of legal fees.
After the lengthy discussion, the increase was finally approved by a unanimous vote.
Councilman Paul Watkins recused himself.