Resource Management Commission presses Texas Gas Service on 2025 rate filing, consolidation and low‑income program

Maria Norton, the city controller for the City of Austin, and Thomas Porchetto, outside counsel, briefed the Resource Management Commission on Texas Gas Service’s (TGS) June 30, 2025, comprehensive base rate filing and related proposals.

Porchetto told commissioners the company is seeking to increase revenues by $41,100,000, which he described as “a 7.07% rate increase, including gas costs,” and roughly a 9.83% revenue requirement increase excluding gas costs. He said the utility has filed in all three of its service areas and is proposing to consolidate them into a single service area. Porchetto said the company set an effective date of Aug. 19 and that, under state procedures, cities can suspend that effective date for an additional 90 days to allow review. He said the Railroad Commission is likely to issue a final decision in mid‑January 2026.

Why it matters: the filing would change who pays which costs and would raise the monthly customer charge substantially in the Central Gulf service area — Porchetto noted proposals that would raise the small residential customer charge from $21.36 to $29.50 and the large residential customer charge from $33.36 to $39.50 in that area. Commissioners said higher fixed customer charges risk making bills more regressive and reducing incentives for conservation.

Key items in the filing and commission concerns

- Consolidation into one service area: Porchetto explained utilities have been consolidating historically because of administrative and cost‑of‑service reasons. Commissioners expressed near‑universal opposition to consolidation, arguing it would move costs from higher‑use, colder areas to warmer regions such as Austin and could raise Austin customers’ base charges. Chair Davis summarized the room’s sentiment as “Looks like everybody feels that way.”

- Size and design of the requested increase: Porchetto and Norton said the requested revenue increase includes both distribution and gas‑supply components. Commissioners pressed on the company’s proposed rate design, which in their view increases fixed customer charges and thus shifts costs away from volumetric charges, a structure several commissioners called regressive and inconsistent with the commission’s conservation goals.

- “Share the Warmth” low‑income program: TGS proposes expanding its Share the Warmth program to $2,000,000 annually and to recover the cost from ratepayers rather than (or in addition to) shareholders. Commissioners questioned whether the $2 million is a cap or a guaranteed collection, how any matching from shareholders would work, and whether Austin customers’ contributions would be directed back to Austin residents in need. Commissioner Silverstein said he “will not support it here” if the program is moved into customer rates without a dollar‑for‑dollar shareholder match. Commissioners also asked for transparency on administration and requested a written plan for the proposed $60,000 outreach budget.

- Customer assistance pilot: TGS also proposes a residential customer assistance rate schedule pilot to serve up to 30,000 qualifying customers funded in part by a roughly $570,000 contribution from all customers. Commissioners supported the concept of targeted assistance but urged clear eligibility rules. Vice Chair Robbins and others urged income‑based qualification or use of an established verification tool.

City process and next steps

Norton and Porchetto said the city has engaged three consultants and is conducting discovery. Porchetto recommended cities suspend the filing’s Aug. 19 effective date to secure an additional 90 days to review. Staff said the city will take an item to the city council on July 24 to consider suspending the effective date and requested the commission return formal input by Aug. 8 so outside counsel can incorporate commission priorities into discovery and settlement discussions.

Discussion versus decision

No final city decision was made by the commission at this meeting. Commissioners provided advisory sentiment and requested clarifications and additional analysis. The commission’s major positions expressed on the record were:

- Oppose consolidation of the three TGS service areas into a single statewide service area. - Oppose the proposed shift toward higher fixed customer charges and other regressive rate features. - Express concern about the Share the Warmth proposal being recovered from all ratepayers without a clear shareholder match or guarantees; request transparency on program administration and a plan for outreach and local allocation of customer contributions. - Support further study and stricter qualification for any customer assistance program, including consideration of income verification or validated targeting tools.

What staff said they will do: staff and outside counsel will pursue suspension of the filing’s effective date at the July 24 city council meeting, continue discovery with consultant support, and take commission input on or before Aug. 8 for use in settlement/discovery work.

Ending note: Porchetto reminded the commission that if the city issues an adverse ruling, the utility may appeal the city decision to the Railroad Commission, where the company’s filing would be consolidated with the broader proceeding.