Council rejects Texas Gas Service rate hike

City Council voted unanimously Thursday to reject new rates proposed by Texas Gas Service. The vote came as no surprise. The decision had strong support from a group of environmental and consumer advocates who wrote a letter to Council last week urging them to reject the new rates, which would have brought in more than $15.6 million in additional revenue for the company.

Paul Robbins, one of the signees of the letter, told Council Thursday that his group proposed that the gas company lower rates, provide more assistance to low-income customers and encourage conservation and renewable energy.

The case will now be appealed to the Texas Railroad Commission, which has final say over the rates. Current rates will remain in effect until the commission makes a decision.

Even though it seems an especially difficult time to be asking for a rate increase, Larry Graham, who represents TGS, has pointed out that no one in the U.S. knew about Covid-19 when the new rates were proposed in December.

Rondella Hawkins, telecommunications and regulatory affairs officer for the city of Austin, told Council at Thursday’s hearing that TGS is seeking not only to raise rates for Austinites but to consolidate the Central Texas region with the Gulf Coast region before the Railroad Commission. That would result in fewer trips before regulatory authorities. Graham told the Austin Monitor that Texas is the only state that allows cities to set rates.

Austin was part of the coalition of cities looking at the rate request and hiring experts to advise them. Those experts concluded that the rate request was unreasonable. In their ordinance rejecting the gas company’s request, the city is asking for compensation for paying those experts. Thomas Brocato of Lloyd Gosselink Rochelle & Townsend is advising the city.

Brocato noted that the commission will have until Aug. 4 to make a final decision on the rates. Graham is expecting considerably more negotiation with the cities before the Railroad Commission. He should also expect to see more of Robbins. Robbins tried to intervene in the case before the Railroad Commission, but the administrative law judge handling the case denied that request, Robbins told the Monitor. However, he said Thursday now that the case is going back to the commission, he will likely try to intervene again.

Robbins and other environmentalists have pointed out that while TGS charges a monthly fee of $18.81, CPS Energy in San Antonio charges only $9.55. Robbins has also proposed a higher rate for customers who use the most gas. He and other advocates have also proposed that TGS set up a surcharge on customer bills, similar to what Austin Energy has, to lower bills for low-income customers.

Council Member Kathie Tovo added a direction to Brocato and city staff to emphasize the fact that Council supports the recommendations Robbins and the other advocates made in their letter to Council.

Photo made available through a Creative Commons license.

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