Item 7- TGS Draft Recommendation — original pdf

Backup

Resolution for City of Austin Study on Municipal Purchase of Texas Gas Service WHEREAS, Texas Gas Service (TGS) serves 94% of gas customers in the city limits of Austin; and WHEREAS, TGS rates for Austin have soared 124% for Residential customers and 167% for Commercial customers between 2019 and 2026; and WHEREAS, TGS will not take substantive steps to lower gas rates, such as requiring new buildings and industries to pay the full cost to connect to the system; and WHEREAS, strategies to reduce fuel costs have not been publicly discussed by TGS; and WHEREAS, TGS has a regressive Residential rate structure that discourages energy conservation and punishes low-income customers, who generally use less energy than average; and WHEREAS, several strategies for gas-leak reduction that would make the system safer and more efficient have been ignored by TGS, even though these strategies would not reduce company profits; and WHEREAS, the Residential energy conservation programs TGS has administered since between 2006 and 2024 have often not been cost-effective at saving gas at or below the cost of fuel; and WHEREAS, the franchise fee the City of Austin will receive from TGS in the new franchise agreement is expected to increase, allowing a small amount of this increased money to be diverted into solving the problems listed here; and WHEREAS, purchase of the TGS system by the City of Austin to create a municipal gas utility may save Austin customers money on rates and increase revenue to the City’s General Fund; and WHEREAS, the Texas cities of San Antonio and Corpus Christi both have municipal gas utilities with lower rates than TGS; and WHEREAS, lower fuel costs might result from a potential Austin municipal gas utility that combines fuel purchases with Austin Energy; THEN BE IT RESOLVED that the Resource Management Commission advise the Austin City Council to budget $100,000 to undertake a study of the costs and benefits of the City of Austin purchase the TGS system in the Austin city limits, turning it into a municipal utility; and BE IT FURTHER RESOLVED that the City of Austin invite other large cities in the TGS greater service territory to participate in this study for the purpose of studying costs and benefits of municipalization of the TGS sysem in their own city limits.