Texas Gas Service rate hearing at Council this Thursday – Austin Monitor

City Council will host a hearing on Thursday to allow members of the public, particularly customers of Texas Gas Service, to voice their opinions about a large rate increase the utility is proposing. The city has also joined a coalition of cities seeking to convince the Texas Railroad Commission, which makes the final decision about gas rates, to lower the increase that TGS seeks.

Consumer advocate Paul Robbins plans to be on hand for the item, which is on Thursday’s City Council agenda. He has prepared a lengthy explanation of the utility’s proposed rates and compared them with rates charged by CPS Energy in San Antonio. According to Robbins, if Texas Gas Service “gets its proposed rate increase, its residential rates per customer will have risen 105 percent in six years. Inflation between 2019 and 2024 was 23 percent.”

He noted that CPS Energy in San Antonio has had a net rate increase of 7 percent since 2014. Over the 10 years between 2014 and 2024, inflation was 33 percent when the new 2024 rate went into effect, he said.

“I do not believe San Antonio charges any taxes and fees,” he said, concluding, “So the current annual rate of $290 a year (for CPS) is less than half of the proposed rate increase from TGS at $596 a year.”

Safeena Walji, public relations manager for Texas Gas Service, told the Austin Monitor, “Texas Gas Service rates have been determined to be fair and reasonable. According to an internal rates analysis, the average monthly Texas Gas Service bill for Austin residents this year is $60.58, including all taxes and fees. Our rates are set through a rigorous review process conducted by the cities we serve and the Railroad Commission of Texas, making sure any adjustments are just and necessary to cover the costs of providing safe and reliable service.”

Robbins notes that Texas Gas Service has invested heavily in its infrastructure – he said those costs increased by 63 percent in a four-year period. He concludes that the infrastructure investment was the major cause of rate increases over the past five years “even though the company’s residential customer base grew by only 5 percent between 2019 and 2023.”

Walji said, “Our rate adjustments reflect the actual costs of maintaining and improving our infrastructure, including significant safety, reliability and efficiency investments.”

Even though Texas Gas Service is proposing a rate increase for residential customers, it is at the same time proposing to cut rates for industrial and commercial customers, Robbins noted. “TGS proposes a 31 percent increase in residential rates, while proposing a 34 percent decrease for industrial customers and a 7 to 9 percent decrease for commercial customers,” he said.

Robbins also complains that the TGS rate structure hurts lower-income people and discourages conservation. He notes, “Low-income utility customers use less energy than average because they have less disposable income.” He provided a chart from the U.S. Energy Information Agency’s residential energy consumption survey for 2020 in southern states. That chart clearly shows the link between income and residential energy consumption, with residents having the highest incomes also using the most energy and those with lower incomes using less energy. Robbins notes that both Austin Energy and Austin Water have progressive rate structures, charging those who have the highest consumption more than those who have lower consumption.

Austin Energy and Austin Water collectively spend at least $22 million a year in discounts to low-income customers, Robbins noted.

Austin Water rates for residents on the Customer Assistance Program are lower for people using the least amount of water. The opposite seems to be true for Texas Gas Service customers. There are no charts for the TGS customer assistance program for low-income customers, Robbins said, simply because TGS does not have one.

Walji disagreed, saying, “We’re committed to supporting our low-income customers and promoting conservation. Programs like ‘Share the Warmth,’ which we support annually, help with utility bills and encourage customers in need to apply for funds through community partners. These funds are often still available at the end of the year. Our Energy Efficiency program also aids in appliance repairs and updates. These initiatives keep bills manageable, promote energy conservation, and address concerns about their impact on low-income customers and sustainable practices.”

She also said the utility had surveyed its customers in Travis, Williamson and Hays counties, with 64 percent indicating “high trust in their utility to set fair and reasonable rates.” She concluded, “90 percent of responses indicated positive overall satisfaction.”

Austin, as part of the coalition of 17 cities referred to as TGS cities, has legal counsel and rate experts working on the rate case. In July, Council approved a delay that will allow the legal counsel and outside experts to determine their strategy in representing the city, according to materials related to the Council agenda. That material notes that “complaints from TGS customers residing in Austin have triggered the city’s obligation to hold a public hearing.”

Even though Council is holding a hearing on Thursday, they will not be voting on TGS rates for quite some time. Their legal team, led by Thomas Brocato, will meet with lawyers and consultants for TGS and staff of the Railroad Commission, with the goal of reaching an agreement on rates. Should they come to an agreement, Brocato will advise Council, who will then vote on whether to approve the agreement. If they approve it, the matter will go before members of the Railroad Commission for their approval. If Council does not approve the agreement, the matter will still go to the Railroad Commission, but the process will likely take longer. Regardless, nothing is expected to come back to Council before November.

Photo made available through a Creative Commons license.

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