REGULAR MEETING OF THE RESOURCE MANAGEMENT COMMISSION January 20, 2026 6:00 p.m. Austin Energy Headquarters; 1st Floor; Shudde Fath Conference Room 4815 Mueller Blvd, Austin, Texas 78723 Some members of the Resource Management Commission maybe participating by videoconference. Public comment will be allowed in-person or remotely by telephone. Speakers may only register to speak on an item once either in-person or remotely and will be allowed up to three minutes to provide their comments. Registration no later than noon the day before the meeting is required for remote participation. To register contact Natasha Goodwin, at Natasha.Goodwin@austinenergy.com or 512-322-6505. Members: Charlotte Davis, Chair Paul Robbins, Vice Chair Kamil Cook Trey Farmer CALL MEETING TO ORDER AGENDA GeNell Gary Joseph Gerland Harry Kennard Martin Luecke Raphael Schwartz Alison Silverstein Danielle Zigon PUBLIC COMMUNICATION: GENERAL The first 5 speakers signed up prior to the meeting being called to order will each be allowed a three-minute allotment to address their concerns regarding items not posted on the agenda. APPROVAL OF MINUTES 1. Approve the minutes of the Resource Management Commission Meeting on November 18, 2025. DISCUSSION AND ACTION ITEMS 2. Discussion and recommend a policy for the Texas Gas Service franchise negotiations. DISCUSSION 3. Discussion on residential electric rates implemented by Austin Energy and its effects on energy conservation and equity. FUTURE AGENDA ITEMS ADJOURNMENT The City of Austin is committed to compliance with the Americans with Disabilities Act. Reasonable modifications and equal access to communications will be provided upon request. For assistance, please contact the Liaison or TTY users’ route through 711. A person may request language access accommodations no later than 48 hours before the scheduled meeting. Please call or email Natasha Goodwin at Austin Energy, at (512) 322-6505 or Natasha.Goodwin@austinenergy.com to request service or for additional information. For more information on the Resource Management Commission, please contact Natasha Goodwin at Austin Energy, at 512-322-6505 or Natasha.Goodwin@austinenergy.com .
Draft Resource Management Commission Resolution on Texas Gas Service Franchise October 20, 2025 Introduction The City of Austin (The City) has a 20-year franchise agreement with Texas Gas Service (TGS), which is the company’s license to operate in the city limits. That franchise agreement expires in October of 2026. The renewal of the franchise is a once-in-a-generation opportunity to correct or reform longstanding problems that include high rates, high fuel costs, poorly designed rate structures, poorly performing energy conservation programs, scant funding to assist low-income ratepayers, and lack of progress in shrinking the company’s carbon footprint with the company. 1.0 Selection of Company and Term of Franchise WHEREAS, Texas Gas Service, the fifth consecutive owner of the main private gas utility that has provided service in the city limits of Austin since the 1870s, has never participated in a competitive process to determine if the company offers ratepayers adequate or better service; and WHEREAS, the current term of the franchise is 20 years (a 10-year initial period with a subsequent 10-year automatic renewal with minimal conditions), is too long a time period to lapse without a revised regulatory agreement; and 1.1 High and Inequitable Rates WHEREAS, retail residential gas rates have gone up about 132% between 2016 and 2025, which is 96% above inflation; and WHEREAS, Texas Gas Service has proposed three rate increases in since 2024; and WHEREAS, these rate increases are largely driven by the cost of capital expansion or improvements of the system, and no city or state regulator has the ability to prevent these expenditures prior to their occurrence; and WHEREAS, TGS does not collect full payment for new infrastructure (known as Contribution in Aid of Construction or Capital Recovery Fees) required for new customers, thus subsidizing new customers while increasing gas bills of existing customers; and WHEREAS, the recent combination of TGS Central Texas and Gulf Coast regions for purposes of ratemaking has raised Austin’s bills while lowering bills in the Coastal region; and 1.2 Rate Structure (Conservation-Based Rates that Also Help Low-Income Customers) WHEREAS, Austin’s municipal utilities have progressive tiered rates that charge less per unit for less usage, while Texas Gas Service has historically maintained a regressive flat rate, which discourages conservation and adversely affects lower-income ratepayers who typically consume less energy; and 1.3 Low-Income Assistance WHEREAS, TGS currently has no customer assistance program that reduces monthly gas bills for low-income customers; and …
RESOURCE MANAGEMENT COMMISSION RECOMMENDATION 20260120-XX Recommendation on Leak Detection and Repair in Texas Gas Service Franchise Agreement WHEREAS, the City of Austin has a 20-year franchise agreement with Texas Gas Service (TGS), which is the Company’s license to operate in the City’s right of way; and WHEREAS, methane leaks are an inherent risk in the operation of gas utilities and can pose significant safety concerns for people, businesses and infrastructure; and WHEREAS, it is in the interest of the residents of the City of Austin to have visibility into the frequency and severity of methane leaks and the mitigation and repair procedures being employed to minimize the risk; and WHEREAS, minimum leak detection standards are established by federal and state law and the City’s current franchise agreements include only general provisions requiring gas utilities to comply with applicable federal and state regulations; and WHEREAS, the public has limited visibility into the efforts to detect and reduce leaks, the effectiveness of such efforts, the frequency, duration, and persistence of non-hazardous leaks, and the volume of methane emissions from ongoing leaks; and WHEREAS, current advanced leak detection and repair (LDAR) programs may include highly sensitive vehicle-mounted detectors, infrared optical imaging and other methodologies, but are continuously evolving; NOW, THEREFORE BE IT RESOLVED THAT The Resource Management Commission recommends that the City require in its upcoming franchise agreement that Texas Gas Service: 1. Employ industry-leading advanced leak detection and repair technologies throughout the term of the agreement, including technologies that increase the speed and sensitivity of leak detection, expand the search footprint, reduce response time for gas emergencies, and/or increase the repair speed of leaks within the City, 2. Regularly update its LDAR practices to reflect technological advancements, 3. Submit annual reports to the City on the performance of its LDAR programs within the City. Information in reports could include but is not limited to: ○ LDAR practices & technology employed including leak detection survey frequency and mitigation strategies ○ Fugitive methane emissions and fugitive methane emissions rate ○ Average response time for gas emergencies ○ Average leak repair time
Resource Management Commission Resolution Fairness of Residential Electric Rates Whereas, progressive Residential utility rates structures that charge less per unit for less consumption and more per unit for greater consumption encourage conservation; and Whereas progressive Residential rate structures also help save money for low-income customers, who generally use less energy; and Whereas, Austin Energy defended raising these rates during the 2025 budget by explaining to City Council and the Electric Utility Commission that Residential bills would actually go down because of lower fuel costs, when in fact this was not the case; and Whereas, Austin Energy’s more regressive Residential rate structure harms some City Council Districts disproportionally, with Districts 3,4,6,7, and 9 seeing the average bill go up between 31 and 34% between 2022 and 2026, while District 10 will see its average bill go up only 20% (See Attachment 1); and Whereas Austin Energy did not inform the City Council and the general public of this; and Whereas, Austin Energy has claimed that low-income customers have had their bills lowered through the Customer Assistance Program, even though the percentage of CAP customers in less than one-third of Austin’s population of low- and moderate-income citizens; and Whereas, due to the increasingly regressive nature of the rate structure, the majority of Residential customers in every City Council District will see their rates rise above average (See Attachment 2); and Whereas, the Resource Management Commission passed a resolution during the last Austin Energy rate case in 2022 that was on record against regressive rates (Recommendation No. 20221018-004B); and Whereas, Austin Energy intentionally avoided bringing this issue to the RMC during the budget and rate review in 2025, making it impossible for the Commission to make a similar recommendation; and Whereas, Austin Energy went on record during the settlement of the rate case in 2022 to raise Residential rates by a prescribed amount, but exceeded this in 2025, calling into question if the utility can abide by its commitments; and Whereas, electric rates were raised though the budget process and not through an evidentiary rate hearing that Austin is accustomed to; and Whereas rate cases were held in 2012, 2016, and 2022, but have since been completely eliminated; and Whereas, Austin Energy has predicted a 5% per year overall rate increase each year for the next four years; and Whereas, the increased Austin Energy budget has been created without allowing ratepayers and stakeholders …
Energy Efficiency Services - Commercial and Multifamily Enrollment Pipeline Program Location Name Installation Address Council District Measures Est. kWh Savings Est. $ Incentive Multifamily Lantana Hills Apartments 7601 RIALTO BLVD 8 Multifamily SOMERSET TOWNHOMES 6800 AUSTIN CENTER BLVD 04 10 Multifamily STONEY RIDGE APARTMENTS 3200 S 1ST ST Multifamily Mackenzie Point Apartments 1044 CAMINO LA COSTA Multifamily Income Qualified Bridge at Henly 6107 E RIVERSIDE DR UNIT CLUB Multifamily Income Qualified ELM RIDGE 1190 AIRPORT BLVD Multifamily Income Qualified The Amethyst 13401 METRIC BLVD 01 Multifamily Income Qualified Bridge at Goodnight Ranch 9005 ALDERMAN DR HP1 3 4 3 1 7 2 Attic Insulation, Duct Sealing and Remediation, Lighting, Smart PPT Eligible Thermostat, HVAC Tune-Up Attic Insulation, Duct Sealing and Remediation, Lighting, Smart PPT Eligible Thermostat, HVAC Tune-Up Attic Insulation, Duct Sealing and Remediation, Lighting, Smart PPT Eligible Thermostat, HVAC Tune-Up Attic Insulation, Duct Sealing and Remediation, Lighting, Smart PPT Eligible Thermostat, HVAC Tune-Up Attic Insulation, Duct Sealing and Remediation, Lighting, Smart PPT Eligible Thermostat, HVAC Tune-Up Attic Insulation, Duct Sealing and Remediation, Lighting, Smart PPT Eligible Thermostat, HVAC Tune-Up Attic Insulation, Duct Sealing and Remediation, Lighting, Smart PPT Eligible Thermostat, HVAC Tune-Up Attic Insulation, Duct Sealing and Remediation, Lighting, Smart PPT Eligible Thermostat, HVAC Tune-Up 479,191 $ 192,467 153,317 $ 113,513 197,212 $ 104,928 37,591 $ 86,116 364,850 $ 257,648 111,909 $ 96,101 1,006 $ 82,425 129,687 $ 62,178 Rebate Fact Sheet - Energy Efficiency Services December 2025 Rebate Program Enrollment Property Information Multifamily Income Qualified 1325312 Customer or Property THE PARK AT WALNUT CREEK Property Address Year Built * Total Number of Rentable Units Building Total Square Feet 12113 METRIC BLVD 1 AUSTIN, TX 78758 1995 342 N/A Measure ** Rebates and Estimated Annual Savings Est. Kilowatt (kW) Reduction Est. Kilowatt- hours (kWh) Reduction Est. $/kW Rebate per Tenant Unit Total Rebate Attic Insulation Limited Time Bonus Offer 69.7 33,234 $1,472 $300 $102,491 $3 $894 Total *** 69.7 * Year built may not include major renovations ** Fact sheets include final inspection information, and some values may have changed since original proposal. *** Assumes 100% Occupancy $103,385 33,234 $1,472 $302 Date (Year) Measure Rebate Amount Energy Efficiency Rebates in Past 10-Years N/A Rebate Fact Sheet - Energy Efficiency Services December 2025 Rebate Program Enrollment Property Information Multifamily Income Qualified 1327099 Customer or Property BRIDGE AT SOUTHPARK LANDING Property Address Year Built * Total Number of Rentable Units Building …
RESOURCE MANAGEMENT COMMISSION RECOMMENDATION 20260120-XX Recommendation on the Future of Energy Conservation Programs in Texas Gas Service Franchise Agreement WHEREAS, Texas Gas Service (TGS) has been planning and operating Residential energy conservation incentive programs that do not pay for themselves in reduced fuel costs or reduced fuel consumption;1 and WHEREAS, some of these conservation programs are largely targeted at marketing gas appliances rather than energy efficiency;2 and WHEREAS, TGS conservation program incentives are, on average, much higher than those offered by other gas utilities around the country;3 and WHEREAS, Austin Energy already runs similar conservation programs for energy efficiency building improvements and serve most of the same customers as TGS. Austin’s programs have proven much more successful at achieving cost-effective energy savings than TGS' programs; and WHEREAS, there is precedent for the City of Austin to operate a gas utility conservation program, which took place between 1987 and 1997; and WHEREAS, TGS is currently in violation of its franchise, which requires it to implement energy conservation programs as part of its normal operations; THEN BE IT THEREFORE RESOLVED that the City’s Resource Management Commission recommend that the Austin City Council implement the following policies related to the new Texas Gas Service franchise agreement: • Austin should take over planning and management of TGS conservation programs as part of the new franchise agreements, with charges for gas conservation programs paid by TGS. • These funds should be collected with either an increased franchise fee specific to each rate class of customers or a bill rider similar to the Texas Gas Service’s Conservation Adjustment Charge or Austin Energy’s Community Benefits Charges. The funds from an increased franchise fee or bill rider can be allowed to change from year to year, with a not-to-exceed amount or percentage.4 1 Evidence sent to the Texas Railroad Commission, “TGS Conservation Letter to RRC,” on August 8, 2025. 2 Ibid. 3 Evidence sent to the Texas Railroad Commission, “2025 – Gas Utility Rebate Survey 1.0.xlsx,” on August 8, 2025. 4 Using 2025 data as a benchmark, funding the current TGS Residential conservation program would require a franchise fee increase from 5% to about 6.5% on the Residential class. Funding the current TGS commercial program would raise the franchise fee from 5% to about 5.35% to 5.7%. These costs were formerly collected with a bill rider. • Under certain circumstances, increased franchise fee revenue can also be used …
RESOURCE MANAGEMENT COMMISSION RECOMMENDATION 20260120-XX Recommendation on Franchise Fees for Public Entities Texas Gas Service Franchise Agreement WHEREAS, the City of Austin levies a 5% franchise fee on the gross receipts of rates and normal fuel costs, which support the City’s General Fund services; and WHEREAS, the City exempts franchise fee collections from public entities (including governments, educational institutions, and hospitals that provide indigent health care), which does not always occur in other Texas cities; and THEN BE IT THEREFORE RESOLVED that the City’s Resource Management Commission recommend that the Austin City Council implement the following policies related to the new Texas Gas Service franchise agreement: • The City should conduct a benchmark study of large Texas cities to compare the practice of exempting public entities from natural gas utility franchise fees. If the City of Austin is found to be abnormally lenient in collecting franchise fees compared to other large Texas cities, then a phased-in collection of these fees should be enacted.
RESOURCE MANAGEMENT COMMISSION RECOMMENDATION 20260120-XX Recommendation on High Fuel Costs in Texas Gas Service Franchise Agreement WHEREAS, fuel costs, which are added to rates as part of the total gas bill, have spiked in recent years due to increased storage and pipeline demand charges; adding to affordability problems; THEN BE IT THEREFORE RESOLVED that the City’s Resource Management Commission recommend that the Austin City Council implement the following policies related to the new Texas Gas Service franchise agreement: • TGS and the City should investigate ways to lower gas storage costs, demand fees, and reservation fees to historical levels.
RESOURCE MANAGEMENT COMMISSION RECOMMENDATION 20260120-XX Recommendation on Low-Income Assistance in Texas Gas Service Franchise Agreement WHEREAS, TGS currently has no customer assistance program that reduces monthly gas bills for low-income customers; and WHEREAS, TGS only provides minimal funding for emergency bill payments for low-income customers; and WHEREAS, in contrast, Austin Energy and Austin Water provide substantial funding for these kinds of low-income assistance; and THEN BE IT THEREFORE RESOLVED that the City’s Resource Management Commission recommend that the Austin City Council implement the following policies related to the new Texas Gas Service franchise agreement: • The City should immediately require TGS to adopt an income-qualified monthly customer assistance program, to be phased in to enroll at least 7% of ratepayers in the Austin city limits by January 2029. This program could be funded with an increased franchise fee, a bill rider, or a modified rate structure. • The City should require TGS to fund at least $500,000 annually (to go up with annual inflation) for income-qualified emergency bill assistance in the Austin city limits, and to fund at least half of this with money paid by shareholders of the company.
RESOURCE MANAGEMENT COMMISSION RECOMMENDATION 20260120-XX Recommendation on High and Inequitable Rates in Texas Gas Service Franchise Agreement WHEREAS, Texas Gas Service (TGS) residential gas rates have gone up about 108% between 2019 and 2025, which is 79% above inflation; and WHEREAS, Texas Gas Service has proposed three rate increases since 2024; and WHEREAS, these rate increases are largely driven by the cost of capital expansion or improvements of the system, and no city or state regulator has the ability to prevent these expenditures prior to their occurrence; and WHEREAS, TGS does not collect full payment for new infrastructure (known as Contribution in Aid of Construction or Capital Recovery Fees) required for new customers, thus subsidizing new customers while increasing gas bills of existing customers; and WHEREAS, when Austin Energy and Austin Water implemented full capital recovery fees, they experienced rate decreases; and WHEREAS, Austin’s municipal utilities have progressive tiered rates that charge less per unit for less usage, while Texas Gas Service has historically maintained a regressive flat rate, which discourages conservation and adversely affects lower-income ratepayers who typically consume less energy; THEN BE IT THEREFORE RESOLVED that the City’s Resource Management Commission recommend that the Austin City Council implement the following policies related to the new Texas Gas Service franchise agreement: • Austin should demand full capital recovery fees for new hookups and developments in the same manner that it employs for its municipal electric and water utilities. This model should emulate how Austin Water collects water infrastructure improvements for the entire system from new customers as well as the infrastructure for the local infrastructure specific to these new customers.1 • The City of Austin, through the Resource Management Commission and the Austin City Council, should require an annual report by Texas Gas Service of its expected Plant Costs (Capital Improvements) for the coming year prior to their expense. 1 The Commission particularly disagrees that revenue collected from new customers, for example during the first 10 years of their service, can be used as a justification for burdening existing customers by requiring them to subsidize the new development capital expenses. The City should require that this practice ends within the City and that developer contributions reflect the full cost of development so that existing customers are no longer burdened by system expansion. City should require that Austin ratepayers not be billed for uncollected development expenses within or outside of …
RESOURCE MANAGEMENT COMMISSION RECOMMENDATION 20260120-XX Recommendation on Selection of Company and Term of Franchise in Texas Gas Service Franchise Agreement WHEREAS, Texas Gas Service, the fifth consecutive owner of the main private gas utility that has provided service in the city limits of Austin since the 1870s, has never participated in a competitive process to determine if the company offers ratepayers adequate or better service; and WHEREAS, the current term of the franchise is 20 years (a 10-year initial period with a subsequent 10-year automatic renewal with minimal conditions), is too long a time period to lapse without a revised regulatory agreement; THEN BE IT THEREFORE RESOLVED that the City’s Resource Management Commission recommend that the Austin City Council implement the following policies related to the new Texas Gas Service franchise agreement: • The new franchise agreement should be limited to a 10-year term with a firm expiration date and no automatic renewal, as a shorter term will ensure greater regulatory accountability. • Over the proposed 10-year period of the next franchise, the City should consider alternative strategies to lower rates, including municipalization and competitive bidding by other gas utilities. • The agreement should maintain the City's option to purchase distribution system throughout the entirety of the franchise term.
