Council is likely to briefly stop rate hikes for natural gas

Texas Gas Service Company and CenterPoint Energy Resources, which serve gas customers in Austin and surrounding areas as well as other parts of the state, have filed notices of their plan to raise rates for the service regions that include Austin. The increase for the Gas Reliability Infrastructure Program is intended to repay the company for money spent on capital investments for equipment in the service area.

On today’s City Council agenda are two items aiming to suspend the process and put off the rate changes. Under state law, the city can review the rate filings and delay the rate increase for 45 days. However, it seems unlikely that the review will change the amount of the rate increase.

Texas Gas Service has determined that it invested nearly $118 million in the Central Gulf service area. Of that amount, the company is seeking to recover nearly $14 million from customers in cities within the area that includes Austin.

For some perspective, every customer pays a customer charge in addition to whatever they may pay for the gas used. According to information supplied by Texas Gas Service, the small residential customer charge is currently $18 per month. When the increase takes effect, that charge will go to $21.36 per month under the TGS proposal. The charge for large residential customers will go from $30 to $33.36 per month. The jump is 8.12 percent for smaller customers and 4.7 percent for larger customers.

The rate for small commercial customers will increase from $60 per month to $72.88 per month, an increase of nearly 12 percent. For large commercial customers, the monthly charge will increase from $75 per month to $87.88 per month, an increase of more than 10 percent.

CenterPoint Energy Resources says that it has invested more than $446 million in infrastructure in the area that includes Austin, Houston, South Texas, Beaumont and East Texas. The company says Austin customers’ share of that expense is a little less than $71 million, according to today’s City Council agenda.

CenterPoint customers pay considerably more for their gas service than Texas Gas Service customers. According to information provided to the city, the average monthly bill for small residential customers will increase from $48 to $53.14. The average monthly bill for large residential customers will jump from $230 to $291.20, an increase of $61.20.

The rate increase for TGS is scheduled to take effect on April 12 unless City Council takes action to delay the changes. Likewise, the CenterPoint rate increases are scheduled to take effect on April 19 without Council action to suspend those changes in order to review them.

TGS serves about 235,000 residential, commercial and industrial customers in the Austin area according to Larry Graham, the company’s manager of regulatory affairs. CenterPoint has about 1,000 customers in the Austin area, he said.

According to information on the New Braunfels Chamber of Commerce website, “CenterPoint Energy provides natural gas distribution services to approximately 149,000 residential, commercial and industrial customers in the company’s South Texas Division.”

The company provides electric service to a far greater number of customers. After a derecho and a hurricane played havoc with Houston’s electric utility providers and their customers, CenterPoint last year sought to increase rates for those customers. However, the company gave up on that plan after protests from customers, cities and the Texas Consumer Association. Instead, customers received a decrease in the rates.

In addition to the resolutions related to gas rates, Council is likely to give the Resource Management Commission authority to review filings by natural gas companies at today’s meeting. The plan to do so has been in the works for several months, pushed along by Paul Robbins, a consumer advocate who is vice chair of the commission. Robbins has been a critic of Texas Gas Service for several years.

Until now, there has been no commission assigned to weigh rates and franchise agreement priorities for natural gas utilities operating in Austin. In December, the Council Audit & Finance Committee approved adding gas utility oversight to the commission’s duties, but the entire Council must approve the change in the commission’s bylaws.

Photo made available through a Creative Commons license.

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