October 2, 2026

By Mary Beth Gahan

The average monthly gas bill for Atmos residential customers in Flower Mound and scores of other municipalities in Texas is set to go up 14 percent.

The town council approved a rate change at its Sept. 21 and although it was on the regular agenda, there was little chance of it being denied. Council members and those involved with negotiating rates with the Dallas-based utility company say state law has given them little recourse to stem gas rates that have doubled the average monthly bill in the last six years.

Municipalities have original jurisdiction, meaning they are the ones to give final approval of rate increases. But to protest a rate change, it could end up costing more than it would save.

“Sometimes we're just up against a fight we can't win,” said Meg Jakubik, the town’s strategic services director.

Under the approved rate change, an average residential customer will pay 14.15 percent, or $13.37, more on a monthly basis. The calculation is based on an average consumption volume of 40.7 ccf and the exact impact will vary by customer, Jakubik said.

Commercial bills are expected to go up 9.9 percent, or $44.82 per month.

The new rates went into effect on Oct. 1.

It’s the latest increase in a series of them. An average gas residential bill went up 9 percent last year, 6 percent the year before, and 7 percent in 2023.

In 2019, the average monthly bill for an Atmos customer was $52.01, according to town council agenda documents at the time. With the latest rate increase, the company projects it will be $107.85.

If the council chose to deny the rate increase that Atmos proposed, the issue would likely go before the oldest regulatory agency in the state.

The Railroad Commission was created in 1891 to regulate the rates and operations of railroads. In 1920, the Cox Act created an oil and gas division within the commission and municipalities were given jurisdiction over rates and services in their city limits.

Nowadays, the Railroad Commission is a misnomer. It no longer regulates railroads. But it does regulate the oil and gas industry.

For decades, utility companies filed one rate case – or the argument for what they need to charge customers to pay for infrastructure and other investments – every four years. When they said the cost recovery was not quick enough, Texas legislation created the Gas Reliability Infrastructure Program, or GRIP, in 2003.

Under GRIP, Atmos and other gas companies are able to do an interim rate increase annually to cover capital investment costs.

“They pass all the capital costs onto the rate payers and all the profits and savings get passed on to the shareholders,” Mayor Pro Tem Adam Schiestel said. “It's a great business to be in.”

One tool cities have in their favor is a rate review mechanism, or RRM. In 2007, Atmos agreed to submit a filing with the Atmos Cities Steering Committee (ACSC), a collective of more than 180 cities, every spring. The committee and its lawyers review all documents about the revenue Atmos is requesting to recover and conduct discovery to “disallow unreasonable costs,” Thomas Brocato, an energy and regulatory attorney, told council members in a 2024 work session.

“Is it perfect? No. Is it an improvement over GRIP? Yes,” Brocato said.

The amount of system-wide revenues that ACSC and Atmos agree on often results in a lower rate than residents of non-member cities pay. Most cities and towns in the Metroplex are part of ACSC. Dallas has its own review mechanism with Atmos.

“ACSC has saved residents hundreds of millions of dollars in unreasonable charges,” Brocato said.

Once the negotiated rate tariff is decided, the town council has to approve it by Sept. 30. If a council denies the RRM rate change, Atmos would likely issue an appeal with the Railroad Commission or the town would have to pay the higher non-negotiated rate. If an appeal is granted in Atmos’s favor, residents would be the ones paying the legal fees.

“Rate case expenses, for both the town and the company, would likely be surcharged back to the town that denied the increase, by way of the customers,” Brocato said.

Schiestel said state-level attempts to tackle an affordability crisis in Texas have been misguided by “constantly beating the drum of lowering property taxes.”

“The governor's on TV saying we should have a two-thirds majority vote to raise taxes but meanwhile nothing's getting done about GRIP legislation,” Schiestel said.

Council member Chris Drew agreed.

“Looking at rate increases from 2020 to 2026, it's over a hundred percent. You compare that to taxes; taxes are a short string,” Drew said. “This is bigger.”

Schiestel asked Jakubik, who is also president of ACSC, if the committee had considered declaring rates unreasonable under the state’s utility code 104.151. Jakubik said it would be a “broader conversation” with all members, but one they could have.

“Maybe it's time to pull the trigger on that,” Schiestel said.

The town is also hoping its state delegation will assist in proposing legislation next session that would give cities more leverage when it comes to utility rates.

State Rep. Mitch Little said he had not discussed the issue with Flower Mound and would need to “read up” on the issue. State Rep. Ben Bumgarner and State Sen. Tan Parker did not respond to emailed questions.