Rate increases expected for Atmos, MaxxSouth customers

January 11, 2017 10:31:22 AM

Carl Smith - [email protected]


Atmos Energy customers in the area and MaxxSouth customers in Starkville could be paying more for their respective services. 


Both companies sent notices to customers in the past weeks informing them of pending rate increases. Atmos' request, which is expected to cost the average residential customer an additional $1.10 per month, will go before the Mississippi Public Service Commission Thursday, while MaxxSouth's notice states across-the-board increases for television, phone and internet services will go into effect Feb. 1. 


If approved, Atmos representatives said their company's increase would also take effect next month. 


Increasing costs associated with infrastructure investments and the cost of delivering services are cited in both companies' notices. 




Atmos request 


Bill Senter, Atmos' vice president over rates and regulatory affairs, said the company's increase is part of a yearly adjustment filed with the state. Since the company filed its request last year, he said Atmos has negotiated with the Mississippi Public Utilities staff and experts to find a palatable and passable increase. 


Atmos' notice to customers first said the increase would be about $1.58 for residential customers -- the bulk of the company's customer base, excluding commercial and industrial subscribers. That increase, he said, was reduced to about $1.10 during the negotiations process and will affect all statewide customers. 


"(Utilities experts at the MPSC) ask questions about how we operate our business, what we spend money on and why. They look at all of the costs involved, our levels of revenue -- all of the financial elements that go into our total cost situation," he said. "Our primary costs are with investments in pipe, meters, regulators, vehicles, information systems, buildings and our employees. But our investments are not just making repairs to aging infrastructure; we're also working to improve customer service." 


The MPSC meeting is scheduled for 10 a.m. at the Woolfork State Office Building in Jackson. 


Atmos is currently tending to a $2 million infrastructure project in Starkville that will replace aging residential gas lines for approximately 300 homes by February. 


The project is part of an anticipated $46 million investment across Atmos' Mississippi service territory that aims to keep the flow of natural gas safe, balanced and manageable for customers, said Robert Lesley, Atmos Mississippi Division public affairs director. 


Under the direction of subcontractors, Atmos' work focuses on an area roughly between Gillespie and Scales streets and Lampkin Street. The project, which began in October, utilizes directional drilling to minimize ground and infrastructure impact, Lesley said. 


Also in October, Atmos officials committed to installing a $13.3 million, 12-mile natural gas line that will service an upcoming Golden Triangle Development LINK-backed industrial park in north Starkville. The new pipe will not only serve new industries, but it will also increase the overall natural gas capacity for Oktibbeha County. 




MaxxSouth increase 


MaxxSouth's rate increase primarily focuses on its cable television customers but also includes monthly hikes for its internet and telephone customers. 


The company's notice outlines monthly increases for a variety of television packages, including basic cable ($3.05), expanded basic ($1.85), digital basic ($1.75) and digital plus tiers ($1.35). A monthly increase is also included for its broadcast television and network sports surcharge ($2.80), while premium channels -- HBO, Cinemax, Showtime and Starz, for example -- will each see a $1.25 monthly increase. Also, customers with free digital terminal adapters for video services will be charged 50 cents per month beginning in February. 


The notice also outlines a $4 increase for monthly internet service and $1.25 more for MaxxSouth phone service. 


Increases are needed, it states, because of rising costs associated with providing programming, operations support and internet bandwidth. 


"While we continue to deliver improvements in all areas of your service, we focus our efforts to control costs and operate more efficiently," the notice states. "Each year, television networks impose substantial increases in the license fees they charge us for the right to distribute their signals. These costs, including those coming from the local broadcast stations, continue to grow well beyond the rate of inflation." 


Specifically, MaxxSouth Chief Executive Officer Peter Kahelin attributed the need for increases due to higher costs associated with broadcast and over-the-air networks' charges for airing their content. Many networks, he said, bundle channels together, therefore forcing cable providers to pay higher rates for high demand content and some channels that are not heavily watched. 


"I'm not knocking them -- we want to support these networks and local broadcast affiliates -- but imagine if your gas rates doubled overnight. That's literally the way the industry is working right now," he said. "It's beginning to get out of hand. We're not making any money on these increases -- we're actually eating a little bit because of them -- but at the same token we have an obligation to bring good programing to our customers. Something's got to change in the industry in time to break out these channels, but by contract we cannot do that. I'd rather not have the increases, because it would make our job easier." 


MaxxSouth customers with questions about the rate changes can call 800-457-5351 for more information.

Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch