Texas Gas Service, as well as other utilities throughout Texas that provide natural gas to consumers and businesses, is asking the Texas Railroad Commission to allow it to put a surcharge on customers’ bills in order to pay for natural gas used during Winter Storm Uri. TGS filed its application with the commission to recover costs of the storm on July 30.

Consumer advocate Paul Robbins, who has studied documents filed with the commission, has concluded that the gas companies are seeking an order that will allow them to add about $5 a month to customers’ bills for 10 years. Larry Graham, manager of regulatory affairs for TGS, declined to offer an estimate of the cost to consumers.

According to an analysis by Bloomberg News, because of Texas’ unregulated market, natural gas producers – as opposed to companies that sell gas to consumers – made $11 billion in just five days during the unprecedented winter storm.

Although TGS and the other gas companies that provide gas to consumers each filed a separate request for a hearing on their securitization case, all the cases have been consolidated. More than 50 cities throughout the state have joined a coalition to intervene in the case before the commission. Central Texas cities that have joined the Texas Cities Alliance include West Lake Hills, Taylor, Goliad and Killeen.

While Austin is not on the list, city officials confirmed late Monday that Austin has joined in intervening on the matter. Thomas Brocato, the lead attorney representing the alliance of cities, told the Austin Monitor that other cities still have time to join the coalition.

Graham insists that the matter before the Railroad Commission is not a “rate case,” but a proceeding to allow securitization financing. As he explained, under Texas House Bill 1520 the gas companies will be able to extend the period of time during which they can recover costs associated with Winter Storm Uri.

According to documents filed with the commission, charges for natural gas during the winter storm left TGS with about $290 million in debt. Robbins said all told, the companies that provide gas service directly to consumers have more than $3.6 billion in fuel debt that they want to securitize.

Graham said, “The price at that moment in time went berserk … it happened to every gas utility in the state of Texas. Our company had to take a big loan out to pay the bill.”

As Graham explained, under the legislation signed by the governor in June, the commission will decide the amount to be recovered by each gas utility. After the commission determines the amount each company can finance, it will issue a financing order directing the Texas Public Finance Authority “to issue customer rate relief bonds.” The commission has 90 days to issue the financing order and the state financing authority has 180 days to issue the bonds.

Graham said via email, “Securitization is expected to provide a lower monthly cost compared to recovery over nine months through the existing cost of gas clause tariffs in Texas Gas Service’s service areas.” In other words, customers’ bills would be much higher if the gas company attempted to recover its costs through existing agreements.

Graham concluded, “We empathize with our customers’ concerns about higher bills and want to assure them that we are working on their behalf. As a fully regulated utility, our current tariffs would have us recover the amount over only a nine-month period. We believe that securitization is the best option for helping our customers by extending the period to recover the extraordinary costs from Winter Storm Uri. Additionally, as a distribution company, we do not profit on the cost of gas.”

The Texas Legislature has taken no action to ensure that the same scenario will not recur.

Austin American Statesman, February 7, 2021

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.

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 FISHER, THE AUSTIN CHRONICLE, FRI., JAN. 29, 2021

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.

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