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Texas Gas Service seeks rate hike for Austin, Central Texas customers

Tuesday, February 28, 2012 by Michael Kanin

Add another utility rate increase to the mounting bills of Central Texas rate payers. On Feb.  10, Texas Gas Service filed with a handful of area municipalities for a rate increase under what’s known as a Gas Reliability Infrastructure Program, or GRIP. The program, which is a state statute, allows natural gas companies to file for an interim rate increase to pay for capital expenditures.


Texas Gas’ director of customer service Larry Graham told In Fact Daily that average residential ratepayers could expect to see a monthly increase of roughly $1.20. Coupled with a 2011 GRIP increase of 48 cents and a 2009 rate increase of 47 cents, the combined rise in monthly Gas rates for average users would be just over $2. Graham said that, prior to the 2009 rate case, Texas Gas had not raised its rates since 1993.


The 2012 GRIP hike is subject to local municipal approval. For Austin residents, that means the Austin City Council will have final say over the matter. Council is scheduled to take action in May or June.


Graham said that Texas Gas has roughly 30,000 customers in the unincorporated areas surrounding the City of Austin. He notes that the company has roughly 200,000 customers in the City of Austin in addition to customers in the cities of Rollingwood, West Lake Hills, Cedar Park, Kyle and Sunset Valley.


Residents of the unincorporated regions could theoretically appeal the hike to the Texas Railroad Commission, which has original jurisdiction on gas matters for those residents. Graham says he does not expect that to happen. However, he notes that “the environment has changed with the Austin Energy case.”


According to Graham, municipalities have “ministerial responsibilities” with Texas Gas GRIP requests. He said that, though a city could challenge whether certain costs were appropriate for a GRIP rate increase, there are fairly “black and white” guidelines about approval. “As long as the costs that we submit fit the statute, (the increase) is allowable,” he said.


In an email sent to affected capital region customers, Graham noted that municipal bodies can suspend implementation of the rates for 35 days from the point at which they receive the request for an increase. They then have up to 90 days to review the request.


Graham notes that the “incremental increases” that result from the GRIP process often end in somewhat-less dramatic rate increases when a gas company files an actual rate increase. According to GRIP regulations, Texas Gas must file for a formal rate increase within five years of its first GRIP hike. According to that schedule, the company must file for that process by 2016.


The municipalities can challenge the rate increases – including the GRIP hikes – when they review Texas Gas’ rate case. That would happen in a hearing conducted by their respective governing bodies.


Texas Gas joins Austin Energy and the Austin Water Utility in a quest for higher rates in 2012. The Austin Water Utility has already increased rates. Austin Energy is in the middle of a contentious fight to do the same. Like Texas Gas, Austin Energy has gone nearly two decades without a rate increase.

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