Energy in the News: Austin Gas Companies Seek Rate Hikes

Is imagining a “progressive” natural gas utility even possible?

Or are these fossil-fuel marketing companies locked into a fossilized business model?

Below is a recent news story about huge gas utility rate hikes in Austin, but it is followed by a summary articulating a better way.

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Gas companies seek interim rate hikes

The Austin Monitor, Friday, April 23, 2021 by Jo Clifton

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 $44.7 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 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.”

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A Gas Company That Cares About Consumers and the Environment

Progressive Gas Rates: Currently, Texas Gas Service (TGS) has a regressive rate structure, where the more you pay, the less you pay per unit.  A progressive gas company should use progressive rate structures, where the more you use, the more you pay per unit.  These new rates can be accomplished with low monthly service charges and tiered rates for consumption.

The lower a monthly service charge is, the more money that will be charged from actual consumption.  This encourages conservation, while at the same time helping the poor, who generally use less energy.

In 2020, I reviewed the rates of the largest gas companies in the U.S.; 26 out of 32 regional or state tariffs reviewed had a monthly service charge lower than TGS-Austin.  Some were only lower by a small amount, but 7 were less than half of the TGS-Austin charge.

In 2020, the TGS monthly charge was twice as high as CPS Energy in San Antonio.  Given the similarity in climate, this seems a good benchmark for Austin to follow.

Another thing that a progressive gas company would do is charge a higher price for higher blocks of use, or tiers.  Both Austin Energy and Austin Water have 5 tiers, where each block of higher consumption is charged more per unit than the last.  TGS, by contrast, has flat rates, where each unit of energy costs the same.

Large gas companies that have progressive tier charges include: SoCalGas, Pacific Gas & Electric, and Southwest Gas in California; Southwest Gas in Arizona (for low-income ratepayers); and Spire Energy in Missouri (in summer months).

Low-Income Bill Assistance: It is common for gas utilities in the states of California, New York, and Massachusetts to have monthly discounts or lower gas rates for low-income customers.  Our neighbors at CPS Energy in San Antonio also have low-income discounts for gas service.  Austin utilities (electric, water, drainage) have discounts and emergency assistance amounting to about $30 million a year.  However, TGS-Austin will only be spending about $100,000 this year.

Capital Recovery Fees: Connecting new customers in a growing city costs a considerable amount of money.  Who pays for it, the new customer, or existing customers?  At Austin Energy and Austin Water, new customers are charged full hook-up costs.  At TGS, it may be as low as 10%.  After Austin’s electric and water utilities began collecting full costs, both of them lowered their rates.

Clean Energy Research: While electric utilities are using wind and solar cells and retiring coal plants to lower their carbon emissions, natural gas utilities currently have little chance to reduce carbon emissions other than energy efficiency and more efficient gas mains.

Currently, most renewable gas sources are profoundly expensive.  However, some gas progressive companies are investing in research and development for a cleaner, safer utility.

SoCalGas, which serves much of Southern California, spent over $16 million in 2020 on Research and Development.  About 80% of this money was related to clean energy and energy efficiency.  The remainder was related to efficient operations that lower bills, including better prevention of gas leaks common in everyday operation.  In 2020, there were 386 active projects.

Most R&D funds are leveraged with other partners at about a 7 to 1 ratio.  These partners include the National Renewable Energy Laboratory, the California Energy Commission, and the Gas Technology Institute.

Good Management of Energy-Efficiency Programs: Energy conservation is usually a good thing for ratepayers and the environment.  However, a considerable amount of TGS-Austin conservation funds are spent for equipment that will cost more than the gas it is saving.  To some extent, these conservation funds are being used as a glorified marketing program.

A BETTER DIRECTION: Negotiations on the TGS-Austin franchise – its license to operate – will begin in the near future.  Austin should seek bids from competing gas utilities that will better reflect our community values.

Guest Viewpoint: Wealthy homes still getting Austin utility bill discounts.

Opinion: Wealthy homes still getting Austin utility bill discounts. We need audit to know why.

By Paul Robbins
Austin American Statesman, February 7, 2021

 

This year, the average City of Austin utility customer who receives electric, water and drainage bills will pay roughly $30 to fund discounts for low-income ratepayers. In some cases, this Customer Assistance Program (CAP) can prevent a household from choosing between food or utilities in these pandemic-ravaged times. Austin Energy and Austin Water expect to put a total $17.5 million toward these discounts this year.

Most Austinites might be proud to live in such a compassionate city. But some of these funds go to people who don’t need the help, or they fail to promote the energy savings that Austin residents should expect.

In December 2014, the Austin American-Statesman ran a front-page story reporting an analysis I conducted of CAP recipients. It revealed some of the CAP discounts intended for the poor were inadvertently routed to people who lived in expensive homes or owned more than one property.

CAP was automatically providing utility bill discounts to people who participated in certain social service programs,such Supplemental Security Income or the Children’s Health Insurance Program, assuming this was a proxy for a low-income household. No one checked to see whether these customers lived in a larger or wealthier home. An affluent family could still end up on the list if, for example, they have a foster child on CHIP, or an elderly parent in the home receiving SSI.

Energy in the News: Austin Energy Still Hasn’t Fixed Problems With Utility Bill Discounts

Austin Energy Still Hasn’t Fixed Problems With Utility Bill Discounts on Expensive Homes

Consumer advocate requests audit of AE’s Customer Assistance Program

BY LINA FISHERTHE AUSTIN CHRONICLEFRI., JAN. 29, 2021

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One of the homes Robbins has identified as receiving discounts through Austin Energy’s Customer Assistance Program, which is intended to assist low-income customers (note the private tennis court) (Courtesy of Paul Robbins)

Last Thursday, Paul Robbins, a longtime local consumer advocate and environmental activist, filed a complaint with the Office of the City Auditor over Austin Energy‘s $18 million Customer Assistance Program (CAP) discounts – designed to help lower-income customers with utility bills but in practice being offered to owners of some very expensive properties.

Paul Robbins’ chief question for the auditor is how Austin Energy determines customers are income-restricted, given their apparent wealth in real estate assets.

In his six years of digging into the CAP system, Robbins has identified many more loopholes and inefficiencies, which he outlines in his complaint with OCA. Chief among them is that CAP eligibility is unlinked to AE’s progressive residential electric rate structure, which has five tiers; the high-usage customers (for example, the large mansions Robbins calls out in his report) pay more than the lower tiers. Ideally, Robbins says, “This does two things: It incentivizes conservation and simultaneously helps the poor, who use less energy on an average basis. But some people on CAP do use electricity in these higher tiers.” His complaint cites data from 2015 in which 21% of customers with CAP discounts were fourth- and fifth-tier energy users.

In the report, Robbins details the multiple instances in which AE has refused to provide information, or provided it after much delay, over the past six years. That’s why he’s taken this step: “They can stay up nights trying to figure out ways to keep public information from me, but they can’t do that to the auditor.”

Clarification: The estate in this photo above is indeed owned by a customer receiving CAP, but the CAP discount is going to another home owned by the same customer.

Energy in the News: Consumer advocate seeks audit of Austin Energy program

Consumer advocate seeks audit of Austin Energy program

The Austin Monitor, January 20, 2021, by Jo Clifton

Consumer advocate Paul Robbins, who has argued for years that Austin Energy is wasting money and inadequately screening participants in its Customer Assistance Program, is asking City Auditor Corrie Stokes to audit the program for wasted expenditures.

The program, which serves low-income customers of Austin’s electric, water and drainage utilities, provided more than $15.3 million in discounts for electricity, water, wastewater and drainage in Fiscal Year 2020. Approximately 35,000 customers per month receive these discounts and the average discount is about $437 a year, according to Austin Energy spokeswoman Jennifer Herber.

Herber told the Austin Monitor via email that “CAP enrollment fluctuates monthly. The discount is a percentage off the total bill and/or monthly charges; it’s not just about which services a customer has, but also about consumption.”

Robbins has prepared a lengthy document demonstrating that a number of customers enrolled in CAP either lived in expensive homes or owned more than one property. In his complaint, Robbins provides photographs of expensive properties belonging to Austin utility customers participating in the program.

He says, “The program is intended to assist customers at or below 200 percent of the poverty level, but most CAP customers who are automatically enrolled are not screened for income.” The automatic enrollment is a result of the utility enrolling households with a member who receives benefits through one of seven social service programs, such as food stamps.

According to Robbins’ research, Austin has the loosest restrictions for enrollment in CAP among the top 10 public utilities in the U.S. Eight of those utilities, from the Jacksonville Electric Authority to Seattle City Light, require income verification, he says.

After Robbins complained about some customers who may have been ineligible, Austin Energy enacted some reforms requiring customers with a certain level of real estate assets to be income qualified. However, Robbins says the utility is ignoring customers who do not live in expensive homes or own more than one property.

In order to find out whether the utility was doing a good job in its efforts to qualify applicants by income, Robbins studied records of CAP enrollment for Austin Water discount participants in October 2020. He said he discovered the following:

  • 123 participants who were receiving the discount owned homes worth more than $250,000 or owned two or more properties, or both. In one case, he said, the customer was receiving discounts at two different properties.
  • 28 of those customers owned two or more properties and 50 customers had properties with values of more than $500,000
  • Five of the customers lived in homes larger than 5,000 square feet, while 28 lived in homes larger than 3,000 square feet
  • 18 of the customers had expensive additions to their homes, such as pools, large decks and terraces

Jerry Galvan, an Austin Energy VP, said via email, “We are proud of our Customer Assistance Program and we continue to assess our programs to maintain integrity while removing barriers to entry, all with the goal of making utilities more affordable to those who qualify for assistance.”

Robbins also complains that the utility is “spending some of its funding on discounts to customers consuming lavish quantities of energy, and on funding on a program that is much less effective at saving money than direct discount programs.” He says while he has tried to work with Austin Energy in the past, he now finds the staff “complacent and unwilling to make further changes. I am reluctantly forced to turn to your (Stokes’) office to investigate this continued misallocation of limited funds meant to assist the poor.”

Robbins said the total CAP funding for all three utilities would be more than $18 million in the current fiscal year. “If even 10 percent of CAP funds are being given to the wrong people, it could amount to almost $2 million in wasted funds that could be rerouted to customers with legitimate needs if income qualification were to completely replace automatic enrollment,” he said.

Austin Energy’s residential electric rate structure is intentionally designed to charge more for greater amounts of consumption, in an effort to encourage energy conservation. However, as Robbins pointed out, CAP customers receive a 10 percent discount on consumption regardless of how much energy they consume. As he noted, the discount was raised to 15 percent in the last year because of the pandemic. That will continue through at least the end of September 2021, according to Herber.

Of the top 10 public utilities in the United States, Austin is one of only two utilities that offer discounts for unlimited consumption, Robbins said. Five of the programs offer a flat discount and three offer no utility-funded program. He noted that there has been an argument defending discounts for high consumption on the assumption that households with larger numbers of people use a lot more energy. But Robbins points to a residential energy consumption survey showing that “a three-person household in the southern U.S. used only 17 percent less than a household with six or more people.”

He concludes that “CAP discounts are structured in a way that discourages energy conservation, while at the same time depriving customers with lower consumption from receiving larger discounts.”

In addition, Robbins also complains that Austin Energy is using CAP funds on the utility’s free weatherization program without adequately determining whether the recipients are qualified under the rules of the Customer Assistance Program.

Finally, Robbins reports that during his six-year-long effort to monitor CAP, Austin Energy has exhibited “a lack of transparency and responsiveness,” that has made it more difficult for “a responsible consumer advocate to get accurate information.”

Click here to see Complaint

The Austin Monitor’s work is made possible by donations from the community. Though our reporting covers donors from time to time, we are careful to keep business and editorial efforts separate while maintaining transparency. A complete list of donors is available here, and our code of ethics is explained here.

Energy in the News: Council Rejects Gas Rate Hike

With all the confusion surrounding the pandemic, most Austinites are not aware that the regional gas utility has asked for a record 22% increase in Residential rates.  This outrageous increase is even more onerous in the recession we have entered.
 
Below is a recent news story about this.  Following the story is a press release sent out on behalf of environmental and consumer groups opposing the rate increase. 
 
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Friday, May 8, 2020 by Jo Clifton
The Austin Monitor

Council rejects Texas Gas Service rate hike

City Council voted unanimously Thursday to reject new rates proposed by Texas Gas Service. The vote came as no surprise. The decision had strong support from a group of environmental and consumer advocates who wrote a letter to Council last week urging them to reject the new rates, which would have brought in more than $15.6 million in additional revenue for the company.

Paul Robbins, one of the signees of the letter, told Council Thursday that his group proposed that the gas company lower rates, provide more assistance to low-income customers and encourage conservation and renewable energy.

The case will now be appealed to the Texas Railroad Commission, which has final say over the rates. Current rates will remain in effect until the commission makes a decision.

Even though it seems an especially difficult time to be asking for a rate increase, Larry Graham, who represents TGS, has pointed out that no one in the U.S. knew about Covid-19 when the new rates were proposed in December.

Rondella Hawkins, telecommunications and regulatory affairs officer for the city of Austin, told Council at Thursday’s hearing that TGS is seeking not only to raise rates for Austinites but to consolidate the Central Texas region with the Gulf Coast region before the Railroad Commission. That would result in fewer trips before regulatory authorities. Graham told the Austin Monitor that Texas is the only state that allows cities to set rates.

Austin was part of the coalition of cities looking at the rate request and hiring experts to advise them. Those experts concluded that the rate request was unreasonable. In their ordinance rejecting the gas company’s request, the city is asking for compensation for paying those experts. Thomas Brocato of Lloyd Gosselink Rochelle & Townsend is advising the city.

Brocato noted that the commission will have until Aug. 4 to make a final decision on the rates. Graham is expecting considerably more negotiation with the cities before the Railroad Commission. He should also expect to see more of Robbins. Robbins tried to intervene in the case before the Railroad Commission, but the administrative law judge handling the case denied that request, Robbins told the Monitor. However, he said Thursday now that the case is going back to the commission, he will likely try to intervene again.

Robbins and other environmentalists have pointed out that while TGS charges a monthly fee of $18.81, CPS Energy in San Antonio charges only $9.55. Robbins has also proposed a higher rate for customers who use the most gas. He and other advocates have also proposed that TGS set up a surcharge on customer bills, similar to what Austin Energy has, to lower bills for low-income customers.

Council Member Kathie Tovo added a direction to Brocato and city staff to emphasize the fact that Council supports the recommendations Robbins and the other advocates made in their letter to Council.

Photo made available through a Creative Commons license.

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FOR IMMEDIATE RELEASE                                                                

May 6, 2020

Environmental and Consumer Groups Oppose Gas Rate Increase

AUSTIN, TX- Nine local or state environmental and consumer groups have called in unison for the Austin City Council to reject a record 22% rate increase for Texas Gas Service set to be voted on at this Thursday’s Council meeting. This increase will cause economic stress while the region and country are in a tailspin recession. These groups are collectively asking for long-term reforms that will create lower rates, assist low-income ratepayers, and encourage energy conservation and renewable energy.

The signers included representatives of:

  • The Austin Tenants Council;
  • Clean Water Action;
  • Public Citizen of Texas;
  • Local and state chapters of the Sierra Club;
  • Solar Austin;
  • Texas Campaign for the Environment;
  • Climate Action Now;
  • 350-Austin

“The Sierra Club is opposed to this proposed gas rate hike,” said Cyrus Reed, Conservation Director of Sierra Club’s Lone Star Chapter. “The proposal would impact Austin ratepayers without encouraging them to conserve their gas use, would not protect limited-income Austinites and would not work toward a day when we could look at alternatives to fracked gas.” 

In a letter sent to the Austin Council, advocates asked for more than a rejection of unjustified rate increases during a time of high unemployment. They requested the following actions.

  1. Increase Low-Income Assistance –  This year, City of Austin will provide about $62 million in low-income assistance and rate relief. In 2019, Texas Gas Service provided only $78,000 to indigent ratepayers, and 40% of this came from charity. Advocates are asking Council for $500,000, in addition to charitable contributions.

  2. Restructure Residential Rates – Texas Gas Service has regressive Residential rates: the more you use the less you pay per unit. Austin electric and water utilities do the opposite.  Their progressive rates charge less to customers who use less.  This encourages conservation, and helps lower-income customers who generally use less because they have less disposable income.

  3. Fund Renewable Energy Research – Austin Energy plans to be carbon-free by 2035.  Texas Gas Service has no plans at all to adopt renewable energy. Advocates ask that a surcharge be levied to fund research of technologies that replace fossil fuels.

  4. Charge Full Capital Recovery Fees – Austin Energy and Austin Water both require full compensation from developers and builders for new hook-ups.  Existing customers do not subsidize new customers. This has led to rate decreases. The gas company, however, spent almost $90 million on new customers in the last 4 years, and most of it is being paid by existing ratepayers.

“This jaw-dropping 22% rate increase is being made at a time when other Austin utilities are lowering their rates to help customers survive the pandemic recession,” complained Paul Robbins, an advocate working on energy issues for decades.  “Austin electric and water utilities will provide about $26 million in low-income customer assistance this year, and another $35 million in general rate relief. Texas Gas Service wants to raise Residential rates almost $18 million, yet the company has no substantial assistance program to help the poor.”

“The Texas Gas rate structure needs to be changed to encourage and reward energy conservation,” said Kaiba White of Public Citizen. “Austin is making great progress in transitioning to renewable energy for electricity production, but there’s no real strategy to reduce the use of methane gas use in buildings. Given the devastating impact of methane on the climate, this needs to be a priority.”

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Lone Star Chapter
Sierra Club
AUSTIN, TX

 

Testimony in Texas Gas Service Rate Case

TO: Rondella Hawkins, Officer, Telecommunications & Regulatory Affairs, City of Austin

Thomas Brocato, Lloyd Gosselink Rochelle & Townsend, P.C.

FROM: Paul Robbins, Intervener in Texas Gas Service Rate Case GUD 10928

DATE: March 27, 2020

SUBJECT: Testimony for Austin Rate Case

Dear Rondella and Thomas,

You have asked that I submit testimony by 5 PM on March 27.  I am sending what I can.  It is unfortunate the TGS has not fully complied with my information requests, so this testimony may be supplemented later when I have more information.

  1. Residential Rate Structure

I propose that the monthly Residential service charge of $18.81 be drastically lowered to what CPS Energy (San Antonio) charges, which is $9.55.

I propose a second-tier be created for the top 7% of customers.  This will be 15% higher than average, with the increased revenue being used to lower rates for the other 93% of customers. 

1.1 Monthly Service Fees

I have contended for many years that the rate structure of TGS is regressive.  The more a customer uses, the less they pay per unit of energy consumed.  This discourages energy efficiency, and adversely affects lower-income customers, who use less energy because they have less discretionary income.

I have conducted a benchmark analysis of the larger gas utilities in the U.S. as measured by the “2018 Ranking of Companies By Residential Sales Customers” from the American Gas Association.  I reviewed the top 10 utilities, which represent over 23 million Residential customers with a gross revenue of over $13 billion.

Some of these utilities operate in multiple states, and regions within states.  The tariffs usually differ.  Still, Texas Gas Service’s Central Texas service charge is on the high end.

26 out of 32 regional or state tariffs for the top 10 national gas utilities that serve Residential customers that I reviewed had a monthly service charge lower than TGS-Austin.  Some were only lower by a small amount, but 7 were less than half the TGS-Austin charge.

Another benchmark is comparing TGS to itself.  TGS-Austin is even higher than the company’s other Texas regions.  The monthly charges of the 5 other TGS-Texas regions range from $12.42 to $18.69.

Still another benchmark is comparing the gas company to Austin’s electric, water, and wastewater utilities, which charge a substantially smaller customer charge in relation to their base revenue requirements.  If TGS-Austin emulated Austin Energy for example, it would only charge a $3.14 monthly fee.

TGS is almost twice as high as CPS Energy, which charges a monthly service charge of $9.55.  Given its similarity in climate, this seems a good benchmark for Austin to follow.

Substantially lowering the monthly fee will substantially flatten the regressive rate structure that is in place.  Revenue from this reduction can be made up by a weather-normalized volume-fee increase.

Some may be curious as to how such a rate affects low-income customers.  During discovery, I requested that TGS send consumption information by zip code.  I took this information and correlated it with 2017 ACS Census (1-Year) estimates of Median Household Income.  Below are the results.  The highest quartile of income uses substantially more (68%) than the lowest quartile.

1.2 Second Tier

Information provided by TGS during this rate case shows the number of customers consuming various volumes of fuel.  There were only 7% of customers that consumed over 587 ccf.  This was 64% above average.  However, these 7% of customers used 15% of total volume.

Austin Energy and Austin Water have steeply tiered progressive rates, where the more customers use, the more they pay per unit.  Even though several Austin City Council Members stated publicly that they were interested in a progressive rate structure for TGS in November of 2018, the gas company has ignored the issue.

Some people have suggested that tiered rates be studied further before they are implemented.  However, since it may be 5 years until the next rate case, I propose a 15% increase on these higher-volume customers, which would be used to lower the bills for the balance of TGS customers.  A more sophisticated tier system can be proposed in the next rate case.

  1. Customer Assistance Program

I propose that TGS-Austin implement a surcharge sufficient to establish a low-income assistance program that, combined with gas company contributions, would raise $500,000 revenue.  TGS should match revenue with the funding that comes from ratepayers.  This money should be given to income-qualified customers.

In FY 2019, Austin Energy spent $9.6 million on customer assistance; Austin Water spent about $5.4 million, and the Austin drainage utility spend about $600,000.  Yet last year, the gas company spent only $78,000, and half of this was from charitable contributions of individuals.

Putting a surcharge on the bill of all gas sales to create a $500,000 year program (in addition to charitable contributions) will increase the average residential bill by no more than 1/6 of 1%.

  1. Renewable Energy Surcharge Fund

I propose that TGS-Austin implement a surcharge sufficient to establish a fund for research of fuel, hydrocarbons, and process heat derived from renewable energy that can substitute for natural gas. 

Austin Energy’s latest Resource, Generation and Climate Protection Plan has a goal of being 93% carbon free by 2030 and completely carbon free by 2035.

TGS has no plan at all to adopt renewable energy, and few if any currently economic technologies to do so.  A surcharge on all gas sales (similar to the one proposed for Customer Assistance Program for TGS-Austin described above) could collect $300,000 of renewable energy research at credible laboratories will set a precedent for the country.

Decisions on spending would be directed by the City of Austin, quite possibly its Climate Program, with input from TGS if the company desires it.

Though this surcharge should occur with or without gas company matching contributions, it would be in the company’s self interest to ensure its long-term future.

Energy in the News: Gas Rate Case Issues

No hearing on gas rates this week

The Austin Monitor
Tuesday, April 7, 2020 by Jo Clifton

Negotiators for the city of Austin and Texas Gas Service, which provides residential and commercial services to Austin and the surrounding communities, have not been able to reach agreement on new rates for residential customers, Larry Graham, a spokesperson for the gas company, told the Austin Monitor Monday.

Rondella Hawkins, the city’s officer for telecommunications and regulatory affairs, confirmed for the Monitor that the hearing would be postponed to May 7, with any rate increase delayed until June 5.

Graham said under normal circumstances Council would have to decide either this week or on April 23 whether to accept or reject the gas company’s proposal. The proposal would typically be worked out between a consultant for Austin, representatives from smaller cities within the county and a representative of the Texas Railroad Commission, which represents customers in the unincorporated parts of Travis County.

Under state law, the Council had until sometime in early May to accept the proposal or reject it, allowing Texas Gas Service to appeal to the Railroad Commission, Graham said.

However, because of difficulties posed by precautions taken against the spread of Covid-19, the company has decided to request a postponement to give the parties more time to reach an agreement.

There are several issues preventing an agreement, as outlined in written testimony from consumer advocate Paul Robbins. Robbins shared his concerns about the gas company’s request with Rondella Hawkins and attorney Thomas Brocato, a city consultant with Lloyd Gosselink Rochelle & Townsend.

Texas Gas Service proposes a monthly service charge of $18.81, although Graham said he does not expect a rate that high when negotiations conclude. However, it is unlikely he would agree to what Robbins proposes – a monthly service charge of $9.55. That would match the amount charged by CPS Energy of San Antonio, a city-owned utility. Robbins believes that’s a fair amount, especially given the monthly fees charged by Austin Energy and Austin Water, which charge about $3 and $5 per month respectively, he said.

According to Robbins, the bigger problem is that while Austin Energy and Austin Water have deeply tiered progressive rates, Texas Gas Service does not. That means customers who use the most pay more per unit of energy or water used, while those who use less pay less per unit. Graham says the gas company fundamentally disagrees with that approach, wishing to charge each customer the same amount for each CCF of gas used.

The gas company incurs its greatest costs in owning, operating and maintaining its pipeline system. If it lowered its monthly fees but raised gas prices with the amount used, Graham argues that would be particularly hard on the economically disadvantaged during cold winter months when they would see much higher gas bills.

Texas Gas Service has a low-income assistance program but spent only $78,000 on it during Fiscal Year 2018-19, according to Robbins. Half of that comes from the company and half from voluntary contributions. Austin Energy spent $9.6 million and Austin Water spent $5.4 million on their customer assistance programs during the same time period. If the gas company put a small surcharge on each bill, it could create a $500,000-a-year program to help economically disadvantaged customers, he argues.

Of course, the city owns Austin Energy and Austin Water. Any dividends from the sale of electricity and water go into the city budget, not into the pockets of investors. Texas Gas Service is a subsidiary of ONE Gas Inc.

The Austin Monitor’s work is made possible by donations from the community. Though our reporting covers donors from time to time, we are careful to keep business and editorial efforts separate while maintaining transparency. A complete list of donors is available here, and our code of ethics is explained here.

Green Building In the News: Environmental Commission Recommends Revising Green Building Standards

Environmental Commission recommends revising green building standards

Tuesday, February 25, 2020 by Jessi Devenyns

Green buildings are intended to be superior constructions built with environmentally sustainable materials and design. While not required, the city encourages this type of construction on a voluntary basis through Austin Energy’s Green Building Program, which rewards builders for green choices.

Although some baseline prerequisites are required for a development to be eligible for one-star green building status, prohibiting toxic chemicals is not part of these fundamental requirements.

The Environmental Commission, however, unanimously recommends that Austin Energy and other city entities restrict the use of toxic chemicals in construction or redevelopment of projects. The commission additionally recommends that the Green Building Program revise its standards to actively encourage nontoxic and less toxic materials in its guidelines.

“I think it is outrageous that we accept any toxic items in our buildings where people are there,” Commissioner Mary Ann Neely said at the Feb. 19 meeting of the Environmental Commission.

Chair Linda Guerrero agreed that limiting the use of toxic chemicals is important for the health and safety of residents. “There are just chemicals everywhere,” she said.

Heidi Kasper with the Green Building Program said requiring the use of nontoxic building materials as a prerequisite rather than an opportunity for builders to earn points is a nuance that avoids “(setting) us up for a much more adversarial approach with those clients.”

Austin’s voluntary sustainable construction program evaluates single-family, multifamily and commercial buildings across categories, including materials used, energy efficiency, water quality and transportation options. The chemicals used in these products are not considered to be a part of the baseline evaluation.

Texas House Bill 2439, from the 86th Legislature, prohibits cities from regulating building materials if the material is approved for use by a national model code. The result is that Austin Energy may not ban the use of certain materials that are known to be toxic to human health if they are federally legal.

Local environmental activist and researcher Paul Robbins disagreed that Austin Energy cannot preclude these materials under its Green Building Program since the program is voluntary. He said even if the program does not prohibit the use of these materials, “I propose that the program illuminate toxic building materials when there are cost-effective alternatives.”

Kasper told the commission that it can be challenging to identify the chemicals used in construction materials as ingredients vary from product to product. She pointed to formaldehyde, which is no longer used in fiberglass insulation yet is still used in composite wood. Kasper said that while Austin Energy is working to discourage the use of these chemicals, it is difficult because many others remain in widespread use, including phthalates and other plasticizers, and developers are not necessarily aware of their existence.

To educate builders about material selection, Austin Energy tracks a variety of toxic chemicals on a red list developed by the International Living Future Institute. This list allows the utility to keep track of toxins like formaldehyde and volatile organic compounds in paints that the industry is phasing out and provide guidance to builders when selecting materials.

Commissioner Ryan Nill suggested giving builders that use toxic materials a negative score instead of awarding points for not using them. He said this approach offers an option to“quasi ban” the toxic materials.

Kasper explained that while the program does not negatively weigh the use of materials containing toxins, there have been improvements in the industry that limit their use as certain products and materials fall out of favor with builders and the public.

“We are evolving our standard over time; the codes are evolving over time. So they’re committing to building to an unknown, above-code standard years out,” said Kasper. “The two- and three-star projects you are seeing today are not the same as a two- or three-star project built six or 10 years ago.”

The Austin Monitor’s work is made possible by donations from the community. Though our reporting covers donors from time to time, we are careful to keep business and editorial efforts separate while maintaining transparency. A complete list of donors is available here, and our code of ethics is explained here.

Green Building In the News: Banning Toxic Building Materials

Courtesy Pixabay

About a year ago, I began advocating that Austin’s green building program ban toxic building materials whenever there were cost-effective alternatives.  This story covers the issue.

Also see an Audio-Visual presentation made to the City of Austin’s Environmental Commission last November.  Here is a link to the online recording.  Click on Item 7A.  It runs about 15 minutes.

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Public Safety Commission dives into building material safety

Thursday, January 9, 2020 by Jessi Devenyns, Austin Monitor

Fire unquestionably presents a risk to public safety. However, a less visible risk associated with a burning building are the toxic chemicals used in building materials that can damage the health of first responders and homeowners who inhale the fumes they emit.

According to local environmental activist and researcher Paul Robbins, three of the most harmful chemicals frequently used in the construction of buildings are PVC, perfluorocarbons and antimicrobials. “There are certainly a number of others,” he told the Public Safety Commission at its Jan. 6 meeting. However, those three chemical classes “are so pervasive and, in their own way, so dangerous.”

PVC and perfluorocarbons are particularly detrimental as they can take hundreds of years to biodegrade and have been linked to cancer, high cholesterol and thyroid disorders in humans who have been exposed.

The Austin Fire Department is aware of the risks of these chemicals and has taken measures over the years to better protect its employees. Division Chief Rob Vires told the commission that the department has adjusted the way firefighters remove their gear on-site to minimize exposure to carcinogens. Likewise, the department has made continuous adjustments to protective equipment to protect first responders from the off-gassing materials and contaminated particles left in the wake of a fire.

While they’re a primary population of concern, Commissioner Preston Tyree pointed out that first responders are not the only citizens that the city should consider. Homeowners and individuals who clean up after a fire also risk being exposed. The city should work toward reducing the risk for all parties, he noted. “The toxic gas is being let off by the building materials. We probably ought to know about it, and we probably ought to be working to stop it,” he said.

Kurt Stogdill with Austin Energy said that the utility has not pushed for the codified prevention of materials that become toxic when burned. However, sections in the code enumerate various toxic building materials, including asbestos, that are precluded from use in construction.

The utility has been working with the Fire Department to advise on the Wildland-Urban Interface Code, recommending the use of building materials that are less likely to catch on fire in the first place.

Austin Energy has been regulating materials through its Green Building Program, a rating system used for evaluating the sustainability of buildings based on materials used, energy efficiency, water quality, and transportation options. Heidi Kasper with the Green Building Program told the Austin Monitor, “For ages, we’ve required low VOC (volatile organic compound) paints.” Other parts of the program list preferred materials that are low-VOC or nontoxic, but they are not required. The voluntary program allows for a buffet-style selection of sustainable building practices to reach higher ratings, though Robbins explained that toxic chemicals are just as prevalent in green structures as in conventional construction.

Part of the reason toxic chemicals are used in green building materials is that the industry guards the composition of materials as proprietary information, Kasper told commissioners. “There’s movement right now to get a lot more transparency,” she said.

Austin Energy tracks a variety of toxic chemicals on a “red list” developed by the International Living Future Institute that allows the utility to keep track of toxins like formaldehyde and volatile organic compound paints that the industry is phasing out and provide guidance to builders when selecting materials.

Since the Green Building Program is voluntary, Kasper explained that there are no cash incentives to encourage nontoxic, sustainable construction. However, she did note that there is a continual evolution around what is considered safe for the environment and for human beings. “We’re actively developing innovation guides,” Kasper said, to keep up and encourage builders to use the latest sustainable options, including less toxic materials.

Kasper told the Monitor that when these guides become available they will serve as a menu of ideas for developers and include sustainable new solutions, including a reduction in the use of toxic building materials. “(It’s) a library of ideas,” she said. “And we need somebody to test them out.”

The Austin Monitor’s work is made possible by donations from the community. Though our reporting covers donors from time to time, we are careful to keep business and editorial efforts separate while maintaining transparency. A complete list of donors is available here, and our code of ethics is explained here.

Austin’s Highest Water Consumers for 2018

FOR IMMEDIATE RELEASE                                                                                            SEPTEMBER 24, 2019

High Water Mark: Austin’s Highest Water Consumers for 2018 Released

As all of Travis County suffers under Stage 2 drought and Austin has implemented a burn ban in its city limits, data for the Austin Water Utility’s top consumers in 2018 is now available. The numbers show that, despite the region’s scorching summers and frequent drought cycles, a culture of water waste among certain Residential customers continues unabated.

Paul Robbins, an environmental activist and consumer advocate in Central Texas who requested and analyzed the data, observed that “High water bills are nature’s way of telling you that you have too much money. This is a profile of the people who waste water, in large part, because they can afford to.”

“Lost here is the concept of ‘noblesse oblige,’ that the privileged have a responsibility to lead by example and show others how to manage things like natural resources.”

  • In FY 2018, the average annual consumption per Residential customer was 68,000 gallons. Each of these top 47 water consumers used between 12 and 29 times the 2018 average.
  • 33 out of 47 customers live in homes between 4,300 and 14,500 square feet appraised by the Travis County Appraisal District at between $1 million and $7.6 million in 2018.
  • 39 out of 47 customers live on property appraised at over $1 million in 2018 irrespective of home size.
  • 30 out of 47 customers have between 1 and 9 acres of land at or near the home site.
  • 35 out of 47 customers have swimming pools, and many of these also have spas and/or hot tubs and outdoor fountains.
  • 21 out of 47 customers live in the zip code 78746. 43 out of 47 customers live in wealthy areas of Austin.

This analysis did not directly interview the customers, but Internet searches have preliminarily identified the professions or activities of 28 out of these 47 Residential customers. They include doctors, lawyers, financiers, business people in electronics hardware and software, developers, philanthropists, and even a well-known martial arts actor. At least 2 are or were heavily involved in state politics. One of these customers is identified as among the largest landowners in the entire U.S.

Below is a list of the top Residential water consumers in Austin in 2018 and their consumption in gallons as provided by the Austin Water Utility.

One customer not on the 2018 list was Congressman Michael McCaul. Last year he made national news for being the top Residential water consumer on the City of Austin system in 2017. Information showed that his 14,400 square-foot mansion consumed at least a million gallons a year. He has often been in the top 50 Austin water consumers since 2009.

“This was probably not the kind of front-page publicity for leadership that the Congressman had in mind,” said Robbins. “For whatever reason though, he is not on this list of top water wasters this year, and I congratulate him. I hope some of these other top water consumers follow his example.”

Another interesting observation is Austin’s largest single water user, Samsung. In 2018, it used 4.6 billion gallons, 11% of Austin’s retail water sales, enough to provide for 68,000 average Austin homes. Samsung’s 2018 use was a 112% increase from only a year earlier.

Notes:

This link is more specific information on the Residential customers listed. Even though some of the customer’s requested privacy that restricted the addresses and specific consumption, the unspecified usage fell between other customers on this list with specific information and can be easily estimated.

In almost all cases, the names could be matched with data from the Travis County Appraisal District and Internet searches to determine their residences or probable residences. The majority on this list could also be identified for their likely professions and community activities. However, none of these customers were interviewed for this analysis.

Originally, the top 50 customers were requested.  However, errors in the original data were adjusted, and this reduced this number to 47.