Texas Gas Service says Railroad Commission denied its energy-efficiency program application for Central Gulf service area

Texas Gas Service representatives told the Resource Management Commission that the Texas Railroad Commission issued a final order the morning of the meeting denying the company’s application for a customer-funded energy-efficiency program in the Central Gulf service area.

Larry Graham of Texas Gas Service said the denial arrived “literally this morning” and that the company had not yet had time to digest the order or determine next steps. “At the moment, we do not have an energy efficiency program,” Graham said.

Judy Heich, managing attorney for Texas Gas Service, said the commission’s order reflects a precedent that utilities should not file fully customer-funded programs without proposing a cost-sharing structure. “It appears that the commission does not agree with a fully customer funded program of this nature,” Heich said, and she referenced older commission precedent in which a utility was previously denied for failing to seek a 50/50 cost split. Heich said the regulatory venue for approval of such programs moved under House Bill 2263 (2023) to the Railroad Commission and that the company’s original program as filed was therefore before the Railroad Commission.

Heich said Texas Gas Service remains committed to customer education where permitted but that the company had not yet determined whether it will file a revised proposal or what form any resubmission would take. Commissioners asked about elements of the denied filing; Heich and Graham said the proposed program included expanded measures such as rebates for tankless water heaters, gas ranges and (contentiously) standby generators and that the Railroad Commission directed that the CGSA filing be denied under the precedent cited in the order.

Commissioners requested a copy of the final order and a case number. The company left a copy of the order and provided the case number 00018221; Heich confirmed it was the final order issued that day. The company said it would share additional information as its internal review proceeded.

Why this matters: denial by the Railroad Commission halts the company’s customer-funded conservation program in the CGSA service area and shifts questions about how gas-efficiency measures are funded, designed and delivered back to utilities, regulators and affected municipalities. The denial also prompted commissioners to ask whether future approaches should rely on different funding splits or on city-led program delivery.