Next year, you might face a significant rise in your gas bill, depending on a decision expected this fall by the Texas Railroad Commission, which regulates the state’s oil and gas sector.
Texas Gas Service (TGS) has proposed a rate hike that could increase some Austin-area residents’ bills by up to $10 per month starting next year. Although the increase was scheduled to begin on July 8, cities including Austin, West Lake Hills, Bee Cave, and Pflugerville have passed resolutions to delay it for 90 days. This fall or winter, a coalition of cities, led by Austin, plans to challenge the rate hike before the Railroad Commission on behalf of consumers.
TGS cites $25.7 million in lost revenue from the COVID-19 pandemic and Winter Storm Uri in 2021 as reasons for the proposed increase. In a statement from June 3, TGS explained that rising demand, combined with global economic factors, the Ukraine war, and extreme weather events, has pushed natural gas prices nearly 100% higher than last year. However, the 2021 Texas Legislature allowed gas companies to recover storm-related costs by charging higher rates to residential customers over the next 30 years, as reported by the Austin Monitor.
The proposed rate increases vary by property size. Small homes using 17 Ccf (a unit measuring 100 cubic feet of natural gas) would see a $6.26 monthly increase, while larger homes using 43 Ccf could face an additional $9.53 per month. Consumer advocate Paul Robbins argues that offering two different rate options is confusing and questions the necessity of recovering these costs now. Robbins suggests that TGS could have adjusted rates in the years affected by unforeseen events like Winter Storm Uri or COVID-19.
Consumer bills have already risen annually due to Gas Reliability Infrastructure Program (GRIP) increases. Robbins points out that the proposed rate hike is disproportionately high compared to previous increases. According to Robbins, from 2019 to 2024, bills increased by 57% due to GRIP adjustments. The new proposed rate would raise bills by 106% compared to 2019 and 31% compared to this year’s rates.
Interestingly, while residential rates would rise, commercial and industrial customers would see decreases. Small and large commercial customers would experience a 9% and 7% reduction, respectively, while industrial customers would benefit from a substantial 34% decrease.
The city’s Resource Management Commission has urged the City Council to amend its ordinance to allow it to comment on TGS’s rate-setting process and related environmental concerns. On Tuesday, the Council’s Audit & Finance Committee discussed these changes. Council Member Alison Alter questioned why city finance staff appear to be opposing the commission’s involvement, noting a memo from July 18 that discouraged passing the resolution.
Shane Johnson, a clean energy organizer with the Sierra Club’s Lone Star chapter, who served on the Resource Management Commission until June, told the Monitor via email that the Sierra Club is considering intervening in the case. Johnson encouraged Austinites to contact their City Council members to voice their concerns about higher utility costs.
“We heard from thousands of Austinites during Austin Energy’s rate increase in 2022,” Johnson said. “Unfortunately, City Finance and Legal staff seem to be undermining efforts to include community input in the rate-setting process.”
The Sierra Club’s current stance is that renters, working people, and essential workers should not have to shoulder the increased costs due to climate disasters like Winter Storm Uri, especially since some Texas gas companies profited significantly during the storm. However, they caution that even if the City Council opposes the rate hike, TGS could appeal the decision to the Railroad Commission, which may overturn the council’s vote.