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Verify: Can Atmos bill customers to cover its emergency costs?

Can Atmos pass emergency costs on to the rest of us?

Replacing 27 miles of pipe to avoid future fires and explosions in Northwest Dallas, Atmos Energy is in a state of emergency.

Crews and contractors are working 24/7 and Atmos is putting affected families up in hotels for weeks.

We don't know what this will cost but it will be expensive. The question is can Atmos pass emergency costs on to the rest of us?

For answers, reporter David Schechter looked at Texas state law and spoke with Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University.

Can utilities raise prices just like a dairy might raise the price of a gallon of milk?

"Utilities can't raise prices at their whim," Bullock said. "They have to go through a fairly strict process."

That process is called a rate increase. In urban areas, a request for an increase goes before the local city council.

"In the case of rate increases, do utilities always get what they want, never get what they want, how would you characterize?" Schechter asked.

"They usually don't get everything they want," Bullock said. "They usually get some of what they want."

Cities, like Dallas, review rates once a year. But under a Texas law called the Gas Reliability Infrastructure Program (section 104.301), a utility can request a rate hike at any time.

The idea behind the law is to encourage utilities to replace old infrastructure and then to "to recover the cost of changes" from customers.

"Can Atmos get a rate hike to cover the cost of the infrastructure?" Schechter asked.

"Atmos can get a rate hike for reasonable expenses for improving its infrastructure," Bullock said.

So, the answer is yes for infrastructure. But Bullock says it's not the intent of regulators to allow utilities to pass along emergency costs to you and me, like 24/7 overtime and hotel rooms.

Got something you want verified? Send me an e-mail: david@verifytv.com

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