Item 2- Draft Recommendation Franchise Term and Ownership 1.0 3 of 6 — original pdf

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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.