Gas companies seek more cash from consumers

Gas companies seek more cash from consumers

The Austin Monitor, August 17, 2021 by Jo Clifton

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.

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.

Seaholm project for sale, renewing debate over its public use

Austin’s Seaholm project for sale, renewing debate over its public use

Shonda Novak – American-StatesmanThursday, March 24, 2016


The developers of the high-profile Seaholm project in downtown Austin are seeking a buyer for the hub of office, retail and restaurant space — a move that has reawakened debate over what the public benefit has been from the redevelopment project.

A potential sale of the nearly completed project has sparked criticism from some observers who say that what was built doesn’t live up to the community’s desire — and a former Austin City Council’s vision — for a significant civic use for the former power plant building.

“I think the city gave away the crown jewels,” said Paul Robbins, a longtime Austin environmentalist, referring to Seaholm and other former city-owned properties nearby. “We gave away most of that land to private development and didn’t get a whole lot in return.”

 

Government Accountability: Voter approval should be required for Austin debt

Robbins: Voter approval should be required for Austin debt


A July 20 American-Statesman editorial took issue with the Austin City Council for planning to issue bonds for buyouts of the homes of Onion Creek flood victims, since these bonds will be sold without voter approval. Upon reading the editorial, I wondered why the Statesman set its threshold for protest at such a low level. The Austin City Charter specifically states that all revenue bonds, including those that finance Austin’s electric and water utilities, be approved by the voters. Yet this Charter provision has been ignored for 16 years.

Article 7, Section 11 of the Austin City Charter clearly reads: “All revenue bonds issued by the city shall first be authorized by a majority of the qualified electors voting at an election held for such purpose.”

The tradition of utility bond approval by Austin voters goes back as far as 1890. However, this practice of voter approval began to be attacked for various reasons beginning in the 1980s.

In 1984, the City Council approved bonds without voter approval to finance the skyrocketing cost of the South Texas Nuclear Project. The council did this because the city was legally required to pay for cost overruns, and believed voters were so outraged by these overruns that they would not vote to keep up payments. The decision was taken to court, which ruled that the city had the right, but not the obligation, to sell bonds without voter approval. The public was so outraged by the episode that the City Council continued to seek voter approval for all other revenue bonds.

In the mid-1980s, several city purchases of buildings were financed with certificates of obligations, which are similar, though not identical, to revenue bonds. While technically complying with the charter, these transactions also raised hackles in the electorate.

Beginning in 2000, the city began purchasing large long-term supplies of renewable energy. These contracts were, in essence, virtual debt. However, they were not revenue bonds, so again, they were not precluded by the charter. Most of these transactions made good business sense and were good for the environment, but the expensive purchase of electricity from a biomass plant in East Texas is still controversial, and the complete terms of this contract have never been made public.

The last revenue bond election in Austin was held in 1998. There was no official reason given for their cessation after this. There were several contributing factors though.

1. A lot of bond money already had been authorized.

2. There was an economic recession in 2001, so growth-related expenditures were limited for a time.

3. The electric utility was over-collecting revenue to buy down debt so it did not need to borrow a lot of money.

4. Some public officials found it convenient to “forget” what was in the charter.

I began protesting their forgetfulness in 2006. The City Council-appointed Charter Revision Committee recommended in 2011 that this section be updated to mandate voter approval of projects costing more than $50 million. However, the City Council never placed the issue of voter approval on the 2012 Charter election ballot for voters to approve.

So here we are today, with a new water treatment plant exceeding a half-billion dollars in cost that will not be needed for a generation, a $2.3 billion biomass contract that continues to raise electric rates, and an acute affordability problem for the majority of Austinites. While voter approval of debt is not a panacea, it is part of a checks-and-balances system that needs to be resuscitated.

The new 10-1 City Council to be elected this fall could be a turning point to enlist more citizen participation in city government. I urge voters in the upcoming November election to ask candidates if we will be allowed to participate in our Charter-prescribed right to economic self-determination. Or will we continue to be ignored by a government that thinks it always knows best?

Water in the News: Austin Has High Water Rates

Brigid Shea says Austin water rates doubled in decade and Austin water costs are greater than costs in the state’s other biggest cities

Austin mayoral candidate Brigid Shea, suggesting city leaders have failed to bird-dog affordability, referred to water costs in a March 5, 2012, op-ed article in the Austin American-Statesman.

To our inquiry, Shea said by email that she drew upon a report posted online in February 2012 by an Austin environmental activist and consumer advocate, Paul Robbins, who edits the Austin Environmental Directory.

We rate Shea’s two-part claim Mostly True.

Energy in the News: District Chilling Plant Christened

Love Is …

Love is in the air at City Council chambers

First, self-described consumer advocate and environmental activist Paul Robbins – a prickly-pear if ever there was one – was read a proclamation by Lee Leffingwell naming Downtown’s first district chilling plant for him. “This may be the first award the city ever gave for stubbornness,” said Robbins, whose spent 30 years advocating for smart energy policy in Austin (his Austin Environmental Directory is here)

Downtown Coolin’ Plant Chillin’ Like Paul Robbins

Who’s Paul Robbins, and what’s a cooling plant?

Daniel Mottola, Austin Chronicle, July 27, 2007