Friday, April 23, 2021 by Jo Clifton

Gas companies seek interim rate hikes

The three companies that supply natural gas to Austin residential and commercial customers are each seeking a rate increase under the Gas Reliability Infrastructure Program, or GRIP. City Council acted on April 8 and again on Thursday to temporarily suspend implementation of those increases. However, the increases are likely to take effect after a short period of review because of the way the utility law is written.

Texas Gas Service, which serves the majority of Austin customers, is seeking an interim rate increase of about $10.7 million from customers in the sprawling area between Bayou Vista and Beaumont to Austin.

CenterPoint Energy is seeking an additional $4 million in its South Texas Division, and Atmos Energy Corporation is seeking an interim rate increase of more than $111 million, according to documentation filed with the city. All three companies are requesting rate increases under the GRIP statute to reimburse themselves for money spent in 2020, mostly to replace old pipe, according to Larry Graham, manager of regulatory affairs for Texas Gas Service.

Each company has filed documentation to show why they should be allowed to charge more within 45 days of their filing. The amounts are based on their 2020 expenditures and are technically subject to City Council approval.

However, as Rondella Hawkins, the city’s telecommunications and regulatory affairs officer, explains, GRIP is not a typical rate increase. She told the Austin Monitor via email that a Texas Supreme Court ruling concluded that the GRIP statute provides only for “a ministerial review of the utility’s findings to ensure compliance” with state law and Railroad Commission rules. She pointed out that the rate increases allowed under GRIP will be subject to review during their next comprehensive rate review.

Consumer advocate Paul Robbins protested at both the April 8 Council meeting and Thursday’s meeting, telling Council if the increase for Texas Gas Service is approved, the amount received by the company will have increased 25 percent since 2019.

Graham said Robbins “makes conjectures that are unfounded, and his math is wrong and his conclusions are wrong.”

According to its filing, TGS proposes to increase the customer charge from the current $16 a month to $18.38 a month. Commercial customers, who now pay $53.33 a month, will see an increase of $10.06 to $63.39.

Graham said his company has the vast majority of customers in the Austin area, while Atmos has have around 10,000 and CenterPoint fewer than 1,000.

Documentation provided by Atmos Energy shows the current residential customer charge is $26.45 per month. With a rate increase of $4.55, that monthly charge goes to $31.

CenterPoint currently charges $22.59 per month and proposes an increase of $2.33, for a new rate of $24.92.

Contrary to what Hawkins said, Robbins says Council should “give the Resource Management Commission or another city commission the ability to review all aspects of the gas utility. The increased oversight will over time create a better chance for fairer rates.” In addition, Robbins suggests that Council adopt a resolution indicating that it wants to ask for bids from competing utilities “when the gas company’s franchise begins renegotiation two years from now.”

Photo made available through a Creative Commons license.

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Key Players & Topics In This Article

Austin City Council: The Austin City Council is the body with legislative purview over the City of Austin. It offers policy direction, while the office of the City Manager implements administrative actions based on those policies. Until 2012, the body contained seven members, including the city's Mayor, all elected at-large. In 2012, City of Austin residents voted to change that system and now 10 members of the Council are elected based on geographic districts. The Mayor continues to be elected at-large.

Resource Management Commission: A commission that reviews and advises the city council on renewable energy technologies.

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