A year after a gas explosion destroyed a Dallas, Texas home, killing a 12-year-old girl and injuring four others, utility owner Atmos Energy is seeking a rate hike that would allow it to pull in an additional $10.1 million.
The proposed rate hike, filed Jan. 15 in Dallas City Hall, comes as Atmos Energy continues to replace pipes in the northwest Dallas neighborhood where three gas explosions erupted on Feb. 22 and Feb. 23 of last year.
Investigators say the explosion that killed 12-year-old Linda Rogers on Feb. 23 could be linked to faulty compression couplings that can separate when the north Texas soil shifts. One analysis of Atmos records showed that there have been at least seven other gas leaks within a block of Linda Rogers’ home.
Atmos Energy pledged to replace all the faulty couplings nearly a decade ago, but natural gas explosions kept occurring, calling the utility’s regard for public safety into question. Investigators blamed faulty compression joints for a southeast Dallas house explosion in 2015 that injured two people and said they likely triggered another natural gas explosion in a Northeast Dallas home in 2016.
The day before Linda Rogers’ house exploded, a surge of natural gas caused two other incidents in the same neighborhood. One of the incidents involved a gas heater that exploded, seriously burning one person and heavily damaging a home. The other involved a stove top that suddenly flared. Those homes and the Rogers’ home share a common alley and are hooked up to the same Atmos Energy pipelines.
Many residents and city officials were riled by Atmos Energy’s planned rate hike, which if passed would take effect June 1, 2019, and would raise the monthly bill for the average residential customer by more than $3 per month.
For North Dallas council member Lee Kleinman, who has pushed for tougher oversight of Atmos Energy, the proposed rate hike was a tough pill to swallow.
“Had Atmos been maintaining the system adequately, which they claimed was the reason for prior increases, the dramatic catch-up in the replacement would not have been necessary,” Mr. Kleinman said, according to The Dallas Morning News. “This cost should be borne by the shareholders, not the rate-payers. In my opinion, they should reduce their generous dividend.”
The Dallas Morning News observed that, coincidentally, Zacks Equity Research issued a report Wednesday, Jan. 17, that called Atmos “a great dividend stock right now.” The report noted that over the last five years alone, the provider “increased its dividend five times on a year-over-year basis for an average annual increase of 7.29 percent.”
Net income for Atmos Energy in fiscal year 2018 was $603 million – a 65 percent increase over 2017’s $396 million profit margin.