Resource Management Commission sets sights on natural gas utilities in bid to expand oversight

As the city prepares to renegotiate its contract with Texas Gas Service, Austin’s Resource Management Commission is vying for a seat at the table, with a proposal to expand its purview to include the utility’s oversight on its way to City Council.

The proposal, spearheaded by Commissioner Paul Robbins, would amend the commission’s bylaws to include advisory duties on issues of rate design, environmental goals and low-income assistance measures. Commissioners passed the proposal in a 6-1 vote, with Commissioner Genell Gary voting against.

Unlike the city’s municipally owned electric and water utilities, Texas Gas Service is a publicly traded company serving large swaths of Central Texas, the Rio Grande Valley and the Gulf Coast. The utility serves roughly 230,000 Austin residents via a franchise agreement with the city, which grants distribution rights in exchange for 5 percent of annual revenues.

Robbins, a longtime utility watchdog, says the nature of this agreement has historically shielded Texas Gas Service from yielding to public pressure. Adjusting for inflation, Robbins claims that rates have risen by nearly 100 percent since 2008, partially due to offloading the cost of system growth onto existing ratepayers. In contrast, Austin Energy and Austin Water employ a robust capital in aid of construction charge to avoid these hikes in cost.

Texas Gas Service has also dodged environmental pressures – while Austin Energy is on track to power 65 percent of its system via renewable energy sources by 2027, the natural gas utility has announced no plans to move toward more sustainable practices. While the utility has begun a number of conservation programs, like rebates on tankless water heaters and efficient furnaces, Robbins says their $1.8 million annual price tag far outweighs environmental benefits.

Commissioners hope that their oversight can provide some overdue pressure to the utility to better align with city’s climate and equity goals. More robust environmental programs, expanded low-income assistance and a less regressive rate structure are all on the table.

“In bringing forth these amendments, we should call attention to the franchise renewal of Austin’s natural gas system in 2026,” District 7 voter Al Braden said before last Monday’s vote. “This represents a once-in-a-lifetime opportunity to negotiate some real improvements to the gas system, requiring serious reductions to methane leaks and in upstream supplies to the city.”

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