PILLAR: Fiscally Sound
AGENDA DATE: May 27, 2026
COUNCIL DISTRICT(S): N/A
DEPARTMENT: Budget and Management Services
PRIORITY: N/A
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SUBJECT
Title
An ordinance denying rates as requested by Atmos Energy Corp. Mid-Tex Division provided pursuant to its January 15, 2026, Dallas Annual Rate Review filing and setting rates as recommended by the City Manager - Financing: No cost consideration to the City
Body
BACKGROUND
Atmos Energy Corp. Mid-Tex Division (Atmos) provides natural gas utility service in Dallas in accordance with City franchise Ordinance No. 27793 and Title 3, Subtitle A Texas Utilities Code, Gas Utility Regulatory Act (GURA). On June 22, 2011, the City of Dallas approved Atmos’ tariff Dallas Annual Rate Review (DARR), which provides a mechanism by which Atmos shall file for an annual review of its rates. On May 13, 2020, the City Council adopted an ordinance amending the DARR tariff to allow for an extension of time if a state of emergency is in effect within the City of Dallas during the review period.
On January 15, 2026, Atmos filed its rate increase request under the DARR tariff. In its filing, Atmos requested an increase in annual revenue of $38.1 million in base rates from within the City of Dallas. Atmos requested that the new rates become effective June 1, 2026.
The City contracted with NewGen Strategies & Solutions to assist City staff in reviewing the DARR filing. NewGen has expertise in reviewing gas rate cases. After reviewing the January 15, 2025, rate filing and supplemental information received from Atmos, NewGen determined that the requested rate increase was not justified.
City staff, consultant and outside legal counsel met with Atmos on numerous occasions, by electronic virtual meetings/conference call to discuss findings and negotiate a settlement of the pending rate request. City staff was able to reach a proposed settlement with Atmos and the City Manager recommends adoption of the proposed settlement regarding rates to be charged by Atmos. Per the terms of the settlement agreement, Atmos rates will increase from customers within the City of Dallas and become effective on June 1, 2026.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
The Finance Committee was briefed by memorandum on the status of the Dallas Annual Rate Review filing on April 21, 2026. <https://dallascityhall.com/government/citymanager/Documents/Council%20Materials/J.%20Atmos%202026.pdf>
The Finance Committee was briefed on the Dallas Annual Rate Review filing on May 26, 2026.
FISCAL INFORMATION
No cost consideration to the City.