Murphy customers of Atmos Energy Corp. Mid-Tex Division would be paying more for natural gas under a rate settlement negotiated between Atmos and a committee of cities it serves. 

The agreement, on the Murphy City Council’s consent agenda for the Sept. 15 meeting, would provide Atmos with $260.5 million in additional annual revenues.  

The gas company said that effective Oct. 1 the average residential customer’s monthly bill would increase by 14.15% — or $13.37 — and commercial customers will pay 9.90% more, or $44.82.

Average calculations were based on a residential customer using 40.7 Ccf  [hundred cubic feet] per month and currently paying $94.48, Atmos Mid-Tex said.   The average commercial customer consumes 372.6 Ccf and is currently paying $452.93, the company said.

The rate settlement was negotiated by the Atmos Cities Steering Committee (ACSC), of which Murphy is one of 182 members, as part of a Rate Review Mechanism (RRM) adopted in 2007.

Atmos Mid-Tex filed in April for a system-wide rate increase providing the energy company with an additional $291.1 million. 

The proposal was based on the cost of service during a test year comprising all of 2025. 

“Application of the standards set forth in the ACSC’s RRM Tariff reduces the Company’s request to $273.6 million,” said Murphy Finance Director Berna Fitzpatrick-Walker. “After reviewing the filing and conducting discovery, ACSC’s consultants concluded that the system-wide deficiency under the RRM regime should be $253.4 million.”

After several settlement meetings, the parties agreed to settle the case for $260.5 million, Fitzpatrick-Wallker said. 

The RRM by the ACSC substitutes for an interim rate adjustment under the Texas Utilities Code known as a GRIP (Gas Reliability Infrastructure Program) filing established by the Texas Legislature.

The finance director said ACSC strongly opposed the GRIP process “because it constitutes piecemeal ratemaking by ignoring declining expenses and increasing revenues while rewarding the company for increasing capital investment on an annual basis.”

She said the GRIP process does not allow any review of the reasonableness of capital investment and does not allow cities to participate in the Railroad Commission’s review of annual GRIP filings or allow recovery of Cities’ rate case expenses. 

The Railroad Commission undertakes a mere administrative review of GRIP filings (instead of a full hearing), and rate increases go into effect without any material adjustments, Fitzpatrick-Walker said. 

“In ACSC’s view, the GRIP process unfairly raises customer rates without any regulatory oversight,” she said. “In contract, the RRM process has allowed for a more comprehensive rate review and annual evaluation of expenses and revenues, as well as capital investment.” 

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