Sherman and Denison have agreed to a settlement over natural gas rates that could see the average residential bill increase by about $5.


Last week, the city councils agreed to accept a settlement with Atmos Energy as a part of its rate adjustment procedures. For the latest round of negotiations Atmos sought about $141.2 million in additional system-wide revenues.


"Essentially, the utility company comes before the state and requests a certain amount of money to upgrade and maintain their facilities," Sherman Community and Support Services Manager Nate Strauch said. "Then the cities always come back and say, ’That’s too much money.’ From there, it goes to a mediator to decide if it should be less than the city wants or more than the city wants."


The cities participated in the negotiations as a part of the Atmos Cities Steering Committee, along with 171 other cities within the mid-Texas division. The last time that these negotiations took place was in 2018, which led to a settlement between the committee and Atmos.


In the latest negotiations, Atmos sought $141.2 million in new revenue in a request filed in March. Upon review, the steering cities found the request to be unreasonable and instead countered with an offer on $80.8 million, which they felt was more reasonable.


This triggered settlement procedures where the executive committee recommended a settlement of $90 million with a two month delay that equates to about $80 million for the year.


Homeowners could see an increase of about $5.15 — about 9.9 percent — in the monthly bill. The average commercial customer will see an increase of about 6.56 percent, or $15.48 on the bill moving forward.


Under the settlement, the new rate is scheduled to go into effect on Dec. 1.