The city of Wichita Falls is one of many planning to block a proposed rate increase by the Atmos Energy Company.
Texas state law permits the company to adjust its rates every year, but the latest proposal has city officials and consumers concerned.
More than 160 cities are being represented by the Atmos Cities Steering Committee (ACSC). Geoffrey Gay is the general counsel for the ACSC. He said, "Atmos' desire at the moment is to significantly increase that front end customer charge up to 18 dollars a month and the cities and officials who negotiate these matters are highly against that."
The proposed increase would bump the fixed monthly rate from $7.50 to $18.00.
In exchange, the gas consumption charge would drop from $0.25 to $0.07 per Cubic foot. No matter how much gas you use, the base rate would more than double. Gay said he believes dropping the consumption charge encourages over use.
Consultants for the ACSC also found that based on the current availability and price of natural gas rates should actually be going down. Gay said, "Consultants for the cities looked at this filing by Atmos and concluded that there were probably grounds for a rate reduction as opposed to an increase."
This finding had some residents upset One resident said, "I really am surprised that they want to do that. It's pretty disheartening, especially for people on fixed incomes like the elderly".
Gay said most natural gas companies make their money during only a few cold winter months. By charging more up front, the company can stabilize their revenue. While Atmos has put more capital into new pipes and expanded services, Gay said the growth does not constitute the rate increase.
"When you do rate making you don't just look at the capital investment, you also look at expenses and revenues. You balance everything out. We think that expenses are declining and revenues are going up which offsets the money that's needed for the new pipes," said Gay.
The Wichita Falls City Council will vote on the resolution to deny the proposed rate change on Tuesday, May 15. The cities and Atmos will have until June 11th to come to an agreement before the case goes before the Railroad Commission and potentially the courts.