Item 7- Staff Briefing 2024 Texas Gas Service Rate Case — original pdf

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2024 Texas Gas Service (TGS) Rate Case Update & Gas Utility Policy Discussion Marija Norton| City Controller 2024 TGS Rate Case Timeline June 3: TGS filed application with the City of Austin (COA) and Railroad Commission (RRC) for New Rates to be effective July 8. TGS subsequently agreed to extend COA effective date of new rates to August 1. Settlement meeting. Settlement meeting. July 18: City Council suspended effective date of New Rates by 90 days. July 25: Aug. 6: Aug. 8: Discovery ends. Aug. 20: City testimony filed. Aug. 22: Settlement meeting. Aug. 27: Staff testimony filed. Aug. 29: COA Public Hearing on New Rates. Sept. 10: Rebuttal testimony filed. Sept. 19: Hearing. Sept. 26: Austin City Council denies TGS’ proposed rate increase. Oct. 30: COA deadline for final action on New Rates. Nov. 19: Commission decision. Dec. 5: Deadline for RRC action. 2 2024 TGS Rate Case Settlement Overview 3 2024 TGS Rate Case Settlement Overview 4 2024 TGS Rate Case Settlement Overview 5 Gas Utility Customer Class Counts Customer Class Residential Commercial Industrial Public Authority Texas Gas Service Atmos Energy CenterPoint Energy SiEnergy 219,806 9,971 7 341 10,710 307 2 2,274 106 1,057 1 TOTAL 230,125 11,019 2,380 1,058 6 Gas Utility Service Area - TGS 7 Gas Utility Service Area – Atmos Energy 8 Gas Utility Service Area – CenterPoint Energy 9 Gas Utility Service Area - SiEnergy 10 Important Dates – Rate Cases Atmos Energy – Settlement at Railroad Commission in March 2025 Texas Gas Service – Settlement at Railroad Commission in November 2024 CenterPoint Energy – Settlement at Railroad Commission in June 2024 SiEnergy – Settlement approved by City Council in August 2023 Typically, we see full rate cases filed every 4-5 years. If a company has filed a GRIP (Gas Reliability Infrastructure Program), they must file a full rate case within 5 1/2 years. 11 Important Dates – Franchise Agreements Texas Gas Service CenterPoint Energy Expires May 14, 2028 Expires Dec. 24, 2037 Expires Oct. 15, 2026 Expires Feb. 22, 2035 Atmos Energy SiEnergy 12 Important Dates – GRIP Filings Texas Gas Service – • Filed 2/11/2025, with original effective date of 4/12/2025 • Council approved ordinance on 3/17/2025 extending the effective date by 45 days to 5/27/2025 • Increase of $3.36 per month for Residential, $12.88 per month for Commercial, $461.83 per month for Industrial, and $25.96 per month for Public Authority customers. CenterPoint Energy – • Filed 2/18/2025, with original effective date of 4/19/2025 • Council approved ordinance on 3/17/2025 extending the effective date by 45 days to 6/3/2025 • Increase of $2.88 per month for Residential customers, $5.14 per month for Small Commercial customers, and $61.20 per month for Large Commercial customers. 13 Gas Utility Policy Considerations • Resource Management Commission to develop/propose priorities to use in upcoming rate case and franchise negotiations - Progressive vs Regressive Rates, Increases to Customer Assistance Programs, Conservation Rebates, etc • Priorities should be generic (lower increases allocated to residential customers vs commercial customers), instead of specific (residential rate should be $18) • Priorities to be shared with City Council for approval through a resolution. City staff and outside counsel will use the approved resolution as a guide in future negotiations 14 Future Rate Case Timing Proposed Timeline for Future Rate Cases: • Gas utility files a rate case. • RMC Meeting/Workshop within 7-10 days of rate filing - outside counsel provides an overview of rate case. • Outside counsel to use approved Council priorities resolution as a guide during rate case negotiations. No time to revisit during a rate case due to fast pace. Changes to priorities should only be handled outside of rate cases. • Council action to approve or deny within 50 days of rate filing. • Individual RMC members have a standing to intervene at the RRC as a ratepayer if they are a customer of the company involved in the rate case. 15 THANK YOU!! City of Austin FINANCIAL SERVICES DEPARTMENT