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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Rate Story.png
 
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.”

photo

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.

 

Energy in the News: Austin needs to look out for Texas Gas customers

Courtesy Pixabay
Commentary: Austin needs to look out for Texas Gas customers

By Paul Robbins

Austin American-Statesman, Sunday, December 30, 2018

On a windy day in late winter of 1984, I arrived home to find my gas cut off without notice. It was one of the many indignities I suffered while living without sufficient income, but one indelibly etched in memory. I scrambled to get service restored, but needed to make a hard choice about which other necessity to do without. (You live by the hour when you’re paid by the week.)

As winter closes in and heating bills spike, many consumers worry that their bills will take away from meals and other necessities. Some may wonder if they can afford their bills at all.

The main regional gas utility, Texas Gas Service, collected about $140 million in Austin in 2017. As a consumer advocate, I have followed its local rates and policies for decades and have reached some conclusions of late. The gas company’s rate structure penalizes low-income customers and conservationists. Its policies do not align with the city of Austin’s municipally-owned electric and water utilities. Our gas bills are higher because of this. And several of its energy conservation programs are not cost effective. I have also found that the company is poorly regulated by the city agency charged to do so. More specifically:

  • Texas Gas has steeply regressive rates: The more you use, the less you pay per unit of consumption. In contrast, Austin’s municipal electric and water utilities have progressive rates, where the more you use, the more you pay per unit. Regressive rates hurt lower-income customers, who generally use less energy. These rates also discourage energy conservation.
  • Between 2008 and 2018, rates for the average residential customer (without fuel charges) have gone up more than 50 percent after accounting for inflation. While some of this is justified because safer plastic pipe is replacing old metal lines, there is no indication of when these increases will end.
  • Austin’s municipal utilities generally charge the full cost to hook up new customers to electricity, water, and wastewater. Because of this, our utilities have experienced rate reductions. Yet full recovery fees do not exist for the gas company, meaning that existing customers pay some of the cost of adding new customers to the system. Austin ratepayers also pay for capital improvements in cities and areas outside Austin’s city limits.
  • Some of the company’s energy conservation programs are a waste of money. Having been an environmentalist the whole of my adult life, it pains me to say this. However, $4.5 million from Austin ratepayers will be wasted over the next three years. The cost of tankless water heaters in homes is so high that they will never recoup their savings during the appliance’s lifetime. There is just not enough use. And the high cost of efficient furnaces cannot be recouped in relatively mild Texas winters. These are meant for colder climates like New England and Alaska.

Over the last decade, the city’s Office of Telecommunications and Regulatory Affairs (TARA), which supposedly regulates the gas company, has acted more like a hostage negotiator than a consumer advocate, bargaining from a position of weakness. First, it has allowed rates to become more regressive. TARA has also allowed the gas company to frivolously spend energy conservation money, while allowing the company to hide information that could reveal if these expenditures are imprudent. Finally, it has allowed the company to escape full capital recovery fees and has never challenged Austin ratepayers’ funding of capital improvements outside Austin’s borders.

This company is in business to begin with because the city granted them a franchise to operate. If Texas Gas continues to act more out of self interest than customer interest, Austin can refuse to renew the franchise when it comes up in 2026. In that case, Texas Gas could sell its system to another company or the city could offer to buy it. No one would lose service during such a transition.

As winter fuel bills spike, it is time for a change in attitude on the part of city regulators. If they had been living in my home the day its gas was disconnected, perhaps they would feel more motivated.

Robbins is an environmental activist and consumer advocate living in Austin. He has been current on his gas bill since 1984.

Austin Leads in Residential Efficiency in 2017

Art: John Dolley/© Paul Robbins 1998

Every year, the U.S. Energy Information Administration posts an annual benchmark report of all electric utilities in the U.S. The Final data from the 2017 EIA-861 is now posted. It has mostly good news for Austin Energy (AE).

Average Residential consumption continues to be profoundly low for AE. This is in all likelihood because of its conservation programs, building codes, green building program, and progressive rate structure.

Austin Energy is part of the Electric Reliability Council of Texas (ERCOT) grid, which supplies about 90% of the state’s electric load. Only 1% of ERCOT Residential customers have consumption lower than AE customers, and AE customers are 25% below the ERCOT average. Only 3% have average bills lower than AE customers.  Only 34% of ERCOT Residential customers have rates lower than Austin.

The Commercial class does not look as good. This is because all you can compare with EIA data here is the rate. It is not proper to compare average Commercial and Industrial class bills or consumption. Unlike Residential, which has one main type of building stock, Commercial and Industrial contain a myriad of building types, and various utilities have different definitions of what these rate classes are anyway.

In Commercial, 54% of ERCOT customers have rates lower than AE. So it is on the high side, though not egregiously.

For Industrial rates, 51% of ERCOT customers have rates lower than AE. So Austin is very close to its goal of being no higher than the average for utilities in the state.

If a benchmark study could be done across ERCOT, it would probably find that Austin’s commercial buildings have lower usage compared to buildings in other major Texas cities because of our conservation programs and building codes.

Note: Austin Energy will eventually conduct its own analysis. AE will likely compare Austin with Texas, not ERCOT. El Paso Electric is not in ERCOT, and is in a different climate zone. The analysis will likely show that El Paso has lower Residential consumption than AE. However, I do not think this is a fair comparison. Comparing ERCOT customers is apples-to-apples.

Water in the News: Top 10 Water Users 2017

Austin’s top single-family water user in 2017: a U.S. congressman

By Philip Jankowski – American-Statesman Staff, July 31, 2018

The sprawling West Austin home of Congressman Mike McCaul used more city-supplied water than any other single-family residence in 2017, according to the Austin water utility.

McCaul’s hillside home near Lake Austin was one of 22 residences calculated to have used more than one million gallons of city water in 2017.

“These people have wealth that most of us in the city could not imagine,” [Paul] Robbins told the Statesman. “It would be easy for them to hire someone that could help them save water. They simply just don’t care.”

June 2018 Customer Assistance Program Update

June 18, 2018

To Austin Energy:

I have been waiting since October of last year for data to show how well the repairs for the automatic enrollment system of the Customer Assistance Program have worked.  I have now analyzed the information from May of this year, and there is some good news.

It would appear that about 91% of the 554 CAP homes that I found to have exceeded an improvement value of $250,000 in January of 2017 have been removed from the CAP roles.   This was the threshold for determining if customers in these homes needed to be income qualified.

Another 1% had decreased property improvement values from the appraisal districts in the last year, so they were also justified in being allowed to continue participation.

However, about 2% of participants live in homes that exceed $250,000 in improvement values and cannot be justified unless they were income qualified.  I have asked for the list of income-qualified individuals under Open Records to see if their participation is indeed valid.

The larger problem, though, is those customers who owned two or more properties.  About 35, or 6%, were in this category.  One of these customers had almost $15 million in property assets in 2016.  If all of these 35 homes received discounts for electricity, water, and drainage, it would amount to about $23,000 in misspent money.

What is most frustrating is that I gave Austin Energy my dataset that identified these homes, so it would have been a simple matter to check the current participation roles against them.  This part of the repair is obviously not working and needs to be attended to immediately.

It should not be up to one skinny activist to continue to do this kind of quality control inspection as a volunteer, and AE staff needs to develop the in-house trouble-shooting ability to prevent this from reoccurring.

Other CAP Concerns

While I congratulate your staff for running a better system, on a higher level, I have fundamental concerns about CAP that go way beyond the accuracy of auto-enrollment.

  1. The $250,000 threshold is artificial and allows some wealthy homes to continue to participate in CAP. 

Take, for example, this 2,800 square-foot house in Northwest Austin that receives CAP (3604 Alta Court).  In 2017, it was valued by the Travis County Appraisal District at $861,000.  The improvement value was only $118,500.  Were some tragedy to befall this home, there is no way it could be rebuilt for this paltry amount of money.  The improvement value used by the Appraisal District is not an accurate benchmark for determining the wealth of a household, and there is no way we can justify giving money meant to the poor to this home and others like it.

  1. Income Qualification is a better system and will probably save money that can be used to help the poor.

Auto-enrollment is an expensive system to run.  Income qualifying participants is generally more accurate at screening for need, and there would probably be monetary savings from this system that would allow more money to be spent for low-income customers.

For example, the Sacramento Municipal Utility District (SMUD) has only about 20% more customers than Austin Energy.  However, in 2015, SMUD had 2.6 times the number of participants in its low-income discount program as Austin Energy had in the same year.  Its screening method is income verification of each participant that applies.

SMUD has 3 to 4 staff people responsible for verifying participants on a rotation of once every 2 years.  By inference, this staff cost in Austin would only be about $200-300,000 a year.  Contrast this to the cost of administering Austin Energy’s automatic enrollment process of about $1.3 million annually.

There are a number of ways that SMUD participants can apply, but one effective method is for utility staff to simply ask new customers if they want to receive the discount when they apply for service over the phone.

  1. Limiting CAP discounts on electric consumption is a fairer way to distribute money while encouraging energy conservation.

CAP gives a 10% discount no matter how much electricity is consumed. This works against the conservation-based rate structure that the utility has intentionally implemented.

It also works against fairness to CAP participants who are careful with their bills. Consider: A consumer using 1,000 kwh a month would receive an estimated $174 in electricity discounts in 2017, while a high consumer using 3,500 kwh a month would receive an estimated $720 in the same year.  It is not equitable to give energy-wasting customers more than 4 times the discount as energy-conserving customers.

In 2015, the average Austin Energy customer used 894 kwh a month in the entire year, and 1,171 kwh a month during the 4 summer months.  The average customer never exceeded 1,500 kwh, and so never exceeded the 3rd tier of Austin Energy’s 5-tier system of electric rates.

In 2015, $2.2 million, or 21% of total Austin Energy CAP discounts, went to the 4th and 5th tiers of use.  If the money were redistributed to give higher discounts to customers in the first 3 tiers of use, it would be more equitable, while at the same time encouraging conservation.  Distributing this money equitably among all CAP participants would raise the average discount of about $250 in 2015 by about $60 per year.

Critics of this proposed change will say it discriminates against households with more people in them.  While seeming logical on its surface, more careful investigation shows that energy consumption and cost do not increase proportionately with more people.  The 2015 Residential Energy Consumption Survey conducted by the U.S. Energy Information Administration in the Southern U.S. shows the increase in energy use between a 3-person household and a 6-person household is only 18%.  The energy use per square foot between a 3-person household and a 6-person household is almost identical.

  1. CAP has an enormous surplus and no plans are being made to spend it.

In the last 5 years, CAP has received about $8.5 million in revenues above what it has spent on assistance to the poor.  This money is not even garnering interest that could increase its value to low-income residents.

While some of this money may be needed for an official reserve fund, several million dollars could easily be spent to improve or expand assistance.  A direct installation program for low-cost, high payback items such as LEDs and pipe wraps could be started in low-income neighborhoods, yielding a rate of return greater than the investment.  Another alternative for this surplus would be to increase the CAP discount.

Either idea will help more people than the current policy of accruing money in a non-interest bearing account.

In summation, I urge you not only to make proposed changes that will eliminate owners of multiple properties from receiving CAP funds, but go further and thoroughly repair the program so that millions of more dollars are either available or are more fairly distributed.

Sincerely,

Paul Robbins