With national and local voters putting “affordability” on the political agenda, an advisory commission is urging the city to direct its leading private gas utility to reduce prices, as well as its carbon footprint.
Austin’s Resource Management Commission unanimously approved the resolution on Jan. 20, according to Chair Charlotte Davis. The vote comes as the Austin City Council prepares to review Texas Gas Service’s local “franchise” operating license in May. In the meantime, the commission plans to present the resolution to the city council’s Climate, Water, and Environment, and Parks Committee on Feb. 25.
Before the Resource Management Commission approved the resolution, Vice Chair Paul Robbins issued a media release faulting the utility on many fronts.
“At issue are the company’s frequently increasing rates, increasingly unaffordable fuel costs, its poorly performing energy conservation programs, its lack of a plan to cut carbon emissions, and its refusal to enact rates or support programs for low- and moderate-income ratepayers,” he wrote.
Texas Gas Service did not grant Austin Free Press’s repeated requests for an interview. The utility did issue a statement that said that the franchise agreement “provides a solid foundation for safe and reliable service” and is unrelated to many of the issues raised by Robbins and the commission.
“Issues like rate design, rebates and energy‑efficiency programs are not determined within a natural gas franchise agreement under Texas law,” the statement said. The franchise agreement governs how utilities use city property “to build, maintain and replace natural gas infrastructure.” It “also sets the franchise fee paid to the City.”
The utility’s statement also pointed to potential changes at the city level, saying it “would like to explore opportunities to improve the permitting requirements and explore ways to improve communication and collaboration with city-owned utilities, assisting in preventing accidental damage to our facilities.”
Image credit: Ellington Tough.
For its part, the Resource Management Commission recommended that city officials exert more influence on how gas is used, allocated and billed locally. This includes reversing the utility’s rate structure to reward conservation (by decreasing per-unit gas rates the less that customers consume). It also called for more assistance to lower-income residents.
The average annual residential rate charged by Texas Gas has more than doubled since 2019, Robbins wrote. “Possible reasons for these high rates include gold-plating (overbuilding) the system and asking existing ratepayers to pay for the cost of new developments,” he wrote.
Texas Gas Service representative Larry Graham cited the high cost of storing gas supplies for emergencies as a significant cost driver. “One of the reasons they have to pay those storage fees is because of the volatility of the weather,” Graham said at the commission meeting held as Winter Storm Fern approached. “We have to make sure we have the capacity to deliver gas, since it’s going to be not just a peak day, but a super peak day.”
Graham added that, “The majority of our capital budget is removing old pipe, and of all the vintage pipe that we have in the state of Texas, there’s a disproportionate amount of it here.”
Kaiba White, an energy policy specialist at the nonprofit Public Citizen, told Austin Free Press that the “city council wants to keep rates as affordable as possible, but also encourage energy conservation.” She said that the progressive rates that the commission recommended would accomplish both goals.
The utility’s rate structure rewards residential customers who burn the most gas while punishing lower-income users who consume less, Robbins wrote. This is due to imposing a high per-customer service fee, while offering volume discounts to residents who consume more. Generally, “the more you earn, the more you burn,” Robbins wrote of the utility’s so-called “regressive” rates that discourage energy conservation.
The utility provides negligible assistance to those in need, according to Robbins. “In 2024, City of Austin utilities assisted low-Income ratepayers with $38.7 million” in aid, he wrote. By contrast, Robbins said that Texas Gas Service allocated $200,000 of its 2024 budget to lower-income assistance in the Central Gulf service area, which extends from Austin to the Gulf Coast.
Robbins also dinged the gas utility’s planetary stewardship. “In 2024, Texas Gas Service emitted about 45% of the carbon released by Austin Energy,” the activist wrote. “While Austin’s municipal electric utility plans to be at least 75% carbon-free by 2035, the gas utility has no similar reduction plans.”
The commission also addressed environmental concerns. Gas pipeline leaks release the greenhouse gas methane, which Robbins said is “28 times more potent than carbon dioxide over a 100-year period.” While the utility has some safeguards in place, the commission recommended that it install the best available leak-detection technology.
The commission’s recommendation broaches the possibility of the city seeking competitive bids for the gas franchise. Robbins said that Texas Gas Service’s ownership of local pipelines creates a “natural monopoly,” however, that makes it tough for other utilities to compete. Still, he said that the city wields sufficient leverage to get Texas Gas to address the shortcomings pointed out by the commission.
“It’s time for the city to go the distance,” Robbins said.
Ellington Tough is a junior at Austin’s Liberal Arts and Science Academy (LASA), where he serves as the news editor for the LASA Liberator. He is professionally certified in Adobe production and has won multiple awards for his work.
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