Frisco residents who get their natural gas from Atmos Energy are bracing for a bigger bill starting October 1, after the city council voted to adopt a settlement that raises the average residential customer's monthly charge by 14.15 percent. The increase, worth about $13.37 more per month for a typical household, follows months of negotiation between Atmos and a coalition representing Texas cities over how much the utility can collect from customers to cover its infrastructure spending.
The Frisco City Council approved the negotiated settlement at its meeting last Tuesday, as reported by Community Impact. Atmos Energy and the Atmos Cities Steering Committee, a 182-member coalition representing more than 1 million customers across the state, agreed to a $260.5 million settlement that lets Atmos raise rates for its Frisco customers beginning October 1. That figure came in more than $30 million below what Atmos originally asked for.
Atmos had requested $291.1 million in additional systemwide revenue when it filed with Texas municipalities in April 2026, according to the company's own filing with Atmos Energy. That filing disclosed the proposed adjustment touched roughly 1,263,885 residential customers, 94,666 commercial customers, 101 industrial customers, and 498 transportation customers across the Mid-Tex Division's territory in North and Central Texas, with the systemwide request representing a 14.43 percent increase including gas costs. Steering committee member cities ultimately determined that $253.4 million was adequate before landing on the final $260.5 million figure.
Only Some Frisco Households Will Feel the Pinch
Not every Frisco household is affected. The city is served by both CoServ Gas and Atmos Energy, and the approved rate increase does not apply to CoServ Gas customers in Frisco — only to the roughly 18,166 Frisco customers served by Atmos. CoServ Gas, by contrast, serves 47,145 customers in Frisco, meaning the majority of the city's gas users will see no change from this settlement.
That fragmentation lines up with the broader pattern across the utility's coverage area, where CoServ serves approximately 72% of Frisco gas customers while Atmos serves about 28%, per CoServ. CoServ Gas launched in 1998 as an affiliate of the Denton County Electric Cooperative and now serves more than 173,000 active gas meters across North Texas, making it the fifth-largest natural gas utility in the state. As of August 2026, CoServ reported an average monthly residential bill of $130.45, with a volumetric energy charge of $1.4701 per Ccf that adjusts monthly with wholesale gas prices — giving Frisco residents a direct, side-by-side comparison between a cooperative and an investor-owned utility operating in the same city.
Commercial customers on the Atmos side face their own increase. The average Frisco commercial Atmos customer will see a 9.9 percent rate increase, adding about $44.82 to their monthly bill, per the settlement approved by council.
Why Atmos Keeps Raising Rates
The rate increase didn't come out of nowhere. It's part of an annual process called the Rate Review Mechanism, established in 2007 through a negotiated agreement between the Atmos Cities Steering Committee and Atmos Energy as an alternative to interim rate filings under the state's Gas Reliability Infrastructure Program, according to a filing reviewed by the City of Hutchins. GRIP allows utilities to pass through capital costs with limited municipal oversight, while the RRM process creates an annual negotiated audit instead. This is not a new pattern: in the 2025 RRM cycle, Atmos initially sought $245.2 million in additional systemwide revenue before settling for $205.6 million with the steering committee, showing a history of compounding annual increases.
Frisco residents on Atmos service also absorbed a separate cost earlier in the year. Atmos Mid-Tex Pipeline filed an interim rate increase under the Gas Reliability Infrastructure Program in February 2026, adding an estimated $3.46 to average monthly customer bills starting May 29, according to the Atmos Cities Steering Committee. That pipeline surcharge recovers wholesale city-gate delivery expenses and is separate from the retail distribution rate case that just took effect. Together, the two increases mean Atmos customers in Frisco have now faced multiple cumulative bill increases within the same year.
Behind the numbers is a company pouring money into infrastructure. Atmos reported spending over $3 billion on capital projects through the third quarter of fiscal year 2026 and projected $4.2 billion in total capital spending for the full fiscal year, up from $3.6 billion in fiscal year 2025, according to the Texas Coalition for Affordable Utility Rates. The coalition's report also noted Atmos collected $396.1 million in total rate increases across all its jurisdictions during the fiscal year, framing pipeline replacement and infrastructure expansion as the primary driver behind the repeated hikes.
The Legal Trigger and Regional Rollout
Under Section 104.101 of the Texas Utilities Code, a natural gas utility's proposed rate adjustment is legally classified as a “major change” if it increases annual utility revenues by more than 2.5 percent, which triggers formal notice requirements and gives municipalities regulatory jurisdiction. That statute is why the Frisco City Council had to formally vote on the settlement rather than simply absorb the increase administratively.
Frisco isn't alone in approving this settlement. Other member cities in the Atmos Cities Steering Committee, including Wichita Falls and Brownwood, approved the same $260.5 million Mid-Tex settlement in August and September 2026, establishing a uniform October 1 effective date across participating municipalities, according to Citizen Portal. Atmos also filed a separate rate request in April 2026 for its West Texas Division, seeking $13.27 million in additional annual revenue affecting about 135,519 residential and 11,621 commercial customers in that region — a sign the company pursued rate increases across multiple Texas divisions at once this year.
Hoodline previously reported on a similar Atmos rate proposal affecting Dallas gas customers in early 2024, part of the same recurring statewide rate-setting cycle now playing out in Frisco.
