Amarillo, Channing, Dalhart and Lubbock v. Railroad Commission of Texas

OPINION

ANN CRAWFORD McCLURE, Chief Justice

Any major change in a gas utilities’ rates are subject to approval by the governmental units that regulate them. 1 They can justify a rate increase based on their cost of providing gas service, and by statute are accorded a reasonable return on their invested capital in excess of their operating costs. 2 But in identifying those costs, geographic boundaries can sometimes come into play. Here for instance, Atmos Energy Corp. provides gas service to cities and unincorporated areas located in its “West Texas Division” which encompasses much of the…