Item 7 - Natural Gas Utilities Presentation — original pdf

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Second Natural Gas Utility Policy Briefing Resource Management Commission Paul Robbins July 15, 2025 Item 7There Are Other Gas Utility Issues Besides High Rates 1. High Fuel Costs 2. Taxes & Fees 3. Low-Income Assistance 4. Greenwashing– Faulty Programs for Conservation & Renewable Natural Gas Three Reasons for High Fuel Prices 1. Rising Support Costs 2. Securitization 3. Gas Exports “Securitization” Winter Storm Uri Surcharge Legalized Piracy • $3.5 Billion Financed Over 16 Years • $1.11/MCF Surcharge • ≈ $38/Year/Residential Austin Customer • ≈ $608 Over 16-Year Payoff Liquefied Natural Gas Taxes & Fees • ≈ 3% for State Fees • 5% for City of Austin Franchise Fee • No Cap on Amount Low-Income Assistance 2024 Austin Energy – $20.1 Million Austin Water – $17.4 Million Austin Watershed Protection – $1.2 Million Total City of Austin – $38.7 Million Texas Gas Service – $200,000 (For Entire Central-Gulf Region) Conservation & Renewable Natural Gas When Clean Energy Is Greenwashing Efficiency of the Direct Use of Natural Gas From Atmos RMC June Presentation y c n e i c i f f E y g r e n E Direct Use of Natural Gas Source Energy Extraction, Processing, Transportation Generation Pipeline Loss Water Heater Efficiency 100 MMBTUs 93 MMBTUs Austin Energy Electric Mix No Losses X 93 MMBTUs 92 MMBTUs 53 MMBTUs Source Energy Extraction, Processing, Transportation Generation Line Loss Water Heater Efficiency 100 MMBTUs 90 MMBTUs 60 MMBTUs 57 MMBTUs 53 MMBTUs Austin Energy Electric Mix With Heat Pump Water Heater Source Energy Extraction, Processing, Transportation Generation Line Loss Heat Pump Water Heater 100 MMBTUs 90 MMBTUs 60 MMBTUs 57 MMBTUs 100 MMBTUs- 204 MMBTUs TGS gives rebates way in excess of the national average. Conservation Total Resource Benefit/Cost Test Total Lifetime Investment vs. Lifetime Monetary Savings = Gas Dryer With Moisture Sensor • Between $200 and $500 to save –– $2.35/Year (Gas-to-Gas change-out). • No other gas utilities give rebates for dryer stubs except One Gas. • Payback of 213 Years at Higher Rebate Level. Tankless Water Heaters • $4,150 to $5,050 for New Tankless Installation vs. $1,600- $1,850 for Tank Unit (2021 dollars). • Requires Regular Scale Cleaning • Claims of Increased Lifetime May Be Exaggerated • No Payback. In fact, it will cost $1,200 to $2,200 more over life. • Expensive • Scale Cleaning • Freeze Damage Efficient Furnaces Built for Northern Climates • Estimates of Increased Cost Range from $538 to $751 per Unit. • 18-Year Payback for 21- Year Furnace Life. With lost opportunity costs, this will be 31% more the current high cost of fuel. • This Equipment is More Economic in Northern States 4 to 5 Times Colder Than Austin. Gas Ranges (Proposed) • Most units will probably be gas-to-gas changeouts, which save no energy or money at all. • Very few gas utilities give rebates for ranges and range-stubs except One Gas. • 40-Year Payback (on rebate) for 17-Year Life of Electric Range. Is There Anything More Shameless Than Calling A Backup Generator A Conservation Device?! $500 Proposed Rebate Texas Gas Service Conservation Proposed Misspending Between 2025 and 2027 For Dryers, Water Heaters, and Furnaces • $3.2 Million Wasted Over 3 Years for Appliances Rebates That Will Not Pay for Themselves Over Lifetime. For Ranges and Backup Generators • $1.1 Million Wasted Over 3 Years for Rebates That Will Not Pay for Themselves Over Lifetime. Cost-Effective Rebates for Ceiling Insulation and Duct Sealing Cancelled Renewable Natural Gas From report for Texas Gas Service released in 2020. In 2025,the TGS cost of gas (without adders like storage and reservation fees) was $2.66/MMBTUs. Alternatives to Lower Rates 1. Austin should demand preapproval of all capital expenditures as part of its franchise agreements. 2. Austin should oppose mergers with other TGS regions. 3. Austin should demand full capital recovery fees for new hookups and developments as part of its franchise agreements. Alternatives to Deal With Other Gas-Related Issues 1. Lower Gas Storage and Reservation Fees to Historical Levels. 2. Gas companies and City should file lawsuits for high costs during Winter Storm Uri. 3. Ask U.S. FERC to scale back exports when prices soar or in emergencies like Winter Storm Uri 4. City franchise fee should be capped at a certain amount, with excess collections going towards bill relief. 5. Austin should demand a Customer Assistance Program funded in the new franchise. 6. Austin should advertise to gas utility customers when their conservation programs are not cost effective. The same for Renewable Natural Gas. 7. Austin should oppose gas conservation programs that are not cost effective at the Texas Railroad Commission. 8. Austin should take over planning and management of conservation programs as part of the new franchise agreements. 9. Austin should require that gas utilities invest in Clean Energy R & D consortiums as part of their franchise agreements. This is common in other gas utilities.