A planned rate increase affecting Atmos Energy customers in Cedar Park won’t take effect, at least until October. The city council voted to postpone the increase and attempt to negotiate the specifics of the rate proposal at its June 28 meeting, and the city is taking action to minimize the impact to residential customers.
Still, council members worry there may be little the city can do to hold down rates.
“As a council, we don’t have a whole lot of authority on this issue. The laws tend to be more in the corporation’s favor,” said Council Member Anne Duffy. “To the average citizen, it doesn’t make a whole lot of sense… What we did was buy time for the challenge to be put forth if it comes to that, then we go to the next step. Energy costs money and there are always more residents moving to the area.”
Atmos proposed increasing rates by 11.15 percent for residential customers while decreasing rates on commercial customers by 4.22 percent and industrial customers by 12.39 percent.
According to city reports, the proposed increases would generate the equivalent of about $46.0 million, or a 7.3 percent increase across the entire network of 50 cities served under the Atmos Texas Municipalities contract.
The council’s vote to postpone the increase allows the city to hire legal counsel to negotiate the rate increases. Without that vote, the rate increase would have automatically become effective on July 7.
“This decision allows us to look more carefully at what’s being composed,” said Mayor Corbin Van Arsdale. “Nothing will be changing for citizens for at least three months. We want our citizens to know that their city government is going to be diligent in protecting their rights and making sure they are getting a good deal. We are going to dot every ‘i’ and cross every ‘t’ before agreeing to something.”
Council Member Heather Jefts said the resolution also allows the public to see the council working to combat the proposed increase.
“It was very important for us to pass the resolution, as staff needs time to review Atmos’s findings and prepare our response,” said Jefts. “The rate increases seem on the surface to be unnecessarily burdensome on residents, especially considering Atmos was just the beneficiary of a large tax cut.”
Cedar Park Director of Business Services Daron Butler said rate increase requests from natural gas companies happen every year.
“The City of Cedar Park routinely exercises its right under state law to suspend the rates… in order to review the basis for the rate increase,” Butler explained, noting that the city’s effort is to determine if there are opportunities to minimize the impact of rate proposals on residents and businesses.”
Butler said that the city’s staff will review the rate increase and make a recommendation in writing to the City Council.
“The decision means our city is working for the residents of Cedar Park to keep their utility bills reasonable and logical,” Jefts said. “A large rate increase on residents paired with decreases for commercial and industrial, immediately following a tax cut for Atmos, appears at first glance unfair and illogical. We have now given staff time to dig into the details and counter with what we believe is fair and reasonable.”
Still, the city has limited ability to push back against a rate increase the energy company wants, Jefts noted after the council’s vote to temporarily suspend the proposed rates. Ultimately, Atmos Energy could simply appeal their rate case to the Texas Railroad Commission, going around any city disputing the increase and getting approval at the state level.
For now, Mayor Van Arsdale says the city is following the steps allowed by law and that Cedar Park has joined with the other cities in the Atmos Texas Municipalities coalition in hiring an attorney to assist with the review and with negotiations. The issue is expected to come before council again before the end of September.