Item 7- Gas Utility Presentation — original pdf

Backup

Second Natural Gas Utility Policy Briefing Resource Management Commission Paul Robbins August 19, 2025 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 U.S. Liquefied Natural Gas Competes on World Market 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 Utilities – $38.7 Million (1.5% of Gross Revenue) Texas Gas Service – $200,000 (For Entire Central-Gulf Region) Gas Companies are Greenwashing Clean Energy 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 100 MMBTUs Water Heater Efficiency Generation No Losses X 90 MMBTUs 90 MMBTUs 52 MMBTUs ERCOT Energy Electric Mix Source Energy Extraction, Processing, Transportation Generation Line Loss Water Heater Efficiency 100 MMBTUs 89 MMBTUs 54 MMBTUs 52 MMBTUs 48 MMBTUs ERCOT Electric Mix With Heat Pump Water Heater ERCOT Energy Electric Mix Source Energy Extraction, Processing, Transportation Generation Line Loss Heat Pump Water Heater 100 MMBTUs 89 MMBTUs 54 MMBTUs 52 MMBTUs 91 MMBTUs- 233 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 $300 to save –– 50¢/Year (Gas-to-Gas change-out). • No other gas utilities give rebates for dryer stubs except One Gas. • Payback of 666 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 $2,800 to $3,800 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. • 36-Year Payback for 21- Year Furnace Life. Its amortized savings will cost 3 times more than the average 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. • Less than 1% of gas utilities give rebates for ranges and range-stubs except One Gas. • Even monetary savings from fuel switching are dubious. 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 • $3.5 Million Wasted Over 3 Years for Appliances Rebates That Will Not Pay for Themselves Over Lifetime. For Ranges and Backup Generators • $1.2 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. The City of 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.