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Panel debates measure to let gas utilities defer new‑infrastructure costs pending full review
Summary
The Senate Committee on Natural Resources considered House Bill 4384, which would let natural gas utilities defer certain costs for newly placed in‑service infrastructure and recover them through existing annual mechanisms, subject to later Railroad Commission review.
The Senate Committee on Natural Resources heard House Bill 4384, which would permit natural gas utilities to temporarily defer certain costs for newly placed in‑service infrastructure (post‑in‑service carrying costs, depreciation and property taxes) and recover them through the existing Gas Reliability Infrastructure Program (GRIP) and annual filings, with final review in a subsequent rate proceeding by the Railroad Commission of Texas.
Proponents, including Jason Ryan, executive vice president at CenterPoint Energy, said the mechanism aligns accounting for growth capital with replacement capital, is credit‑positive for utilities that borrow to finance infrastructure, and ultimately benefits customers by reducing the utility’s cost of borrowing. Ryan said CenterPoint serves about 2 million homes and businesses in Texas and that the framework mirrors longstanding accounting for replacement pipe that has worked for almost two decades.
Opponents including Thomas Mercado (testifying on behalf of an association identified as ACSC) and Cyrus Reed of the Sierra Club said the bill, as written, could allow utilities to increase spending knowing they can recover costs later, creating an incentive to overspend and shifting the burden to ratepayers until a later review; Mercado argued the bill would “increase profits for utilities and increase rates for ratepayers without any offsetting benefits.” Mercado testified he opposed the filed bill but had been working with the chair’s office on concerns.
The bill provides that if the Railroad Commission disallows any portion of deferred costs in its review, the utility must refund that amount with interest. Committee members asked about guardrails and interim checks to prevent excessive interim collection from consumers; members indicated they would consider amendments or a floor amendment to add additional controls.
No final action was taken; the bill was left pending for further work on consumer safeguards and potential amendments.
