Resource Management Commission considers petition for oversight on gas utilities

The city’s Resource Management Commission may soon find itself a bit busier, with plans for a vote to add oversight of Austin’s natural gas utilities to its purview.

Commissioner Paul Robbins, a longtime environmentalist, brought the proposal forth. It would explicitly designate the commission as City Council’s primary adviser on gas utility policies like rate design, environmental programs and customer assistance programs. Currently, the Resource Management Commission is tasked only with reviewing the city’s renewable energy and conservation policies.

“The Electric Utility Commission looks at electric rates, the Water and Wastewater Commission looks at water rates and the Zero Waste Commission looks at Austin Resource Recovery and their rates, but Texas Gas Service has to a great degree eluded scrutiny from the public,” Robbins said. “I think our commission could address several issues, including fair natural gas rates, better franchise agreements, affordability for low- and moderate-income ratepayers, and better overview of energy efficiency and clean energy.”

Unlike Austin’s municipally owned electric and water utilities, Texas Gas Service is a publicly traded utility company serving 689,000 residential, commercial and industrial customers across Central Texas, the Rio Grande Valley and the Gulf Coast. While the city of Austin does exercise some control over rates per their franchise agreement, the rate cases generally entail less public participation than those conducted by Austin Energy or Austin Water.

In a draft resolution, Robbins claimed that Texas Gas Service and fellow gas utilities Atmos and Centerpoint have made no effort to transition to renewable energy sources, currently accounting for roughly 34 percent of Austin Energy’s carbon footprint. Robbins also highlighted the utility’s regressive rate structure and customer assistance program as areas of concern.

“Texas Gas Service has a poorly funded, inadequate budget to help low- and moderate-income ratepayers,” reads the resolution. “While Austin Water and Austin Energy have a combined Customer Assistance Program annual budget exceeding $20 million, in 2022 (Texas Gas Service’s) budget was about $100,000.”

This is not Robbins’ first time criticizing the utility. In 2018, Robbins protested what he considered wasteful and ineffective rebates on efficient furnaces and tankless water heaters both at City Council and the Texas Railroad Commission. In 2020, Robbins also joined a coalition of environmentalists in protest of base rate hikes, which successfully reeled in residential increases from 22 percent to 13 percent.

“(Texas Gas Service) has a regressive rate structure, where the more customers use, the less they pay per unit,” Robbins said. “It has a large flat monthly fee, and no progressively increasing tiers. … This simultaneously discourages conservation and harms lower-income ratepayers, who generally use less energy.”

Robbins also hopes the utility can revisit its stance on capital in aid of construction, a system leveraged by Austin Energy that passes the cost of new infrastructure directly to new customers connecting to the system. Robbins said the strategy could be useful in shouldering rate increases, particularly as war in Europe and volatile weather patterns affect the global market.

The Resource Management Commission will return to vote on the proposal later this month. If successful, it will then move to Council for consideration on the dais.

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