Resource Management Commission urges tougher franchise terms for Texas Gas Service; company says negotiations are under way

The Resource Management Commission presented unanimous recommendations to the committee on Feb. 11 calling for new franchise terms to address rising residential gas bills, increase low-income assistance, and reform conservation spending by Texas Gas Service.

"Texas Gas Service residential rates ... have gone up 111% in only the last 6 years," Paul Robbins, vice chair of the RMC, told the committee, citing the commission’s analysis. Robbins said aggregate fuel, storage and pipeline reservation fees and a regressive rate structure have collectively cost Austin households and businesses millions more in recent years and recommended several franchise changes, including requiring full capital recovery fees from developers and an annual prudence audit of proposed plant and capital expenditures.

Charlotte Davis, RMC chair, said the city’s 2006 franchise agreement is essentially a once‑in‑a‑generation chance to establish guardrails for gas service within Austin. Rafael Schwartz, an RMC commissioner, urged franchise language that requires a low-income assistance enrollment goal (the RMC suggested a 7% enrollment target) and recommended increasing emergency-bill assistance to $500,000 with shared company funding. He also criticized past Texas Gas conservation rebates as overly generous to gas-appliance purchases and proposed that the city take over management of conservation program funds so they can be redirected to building-efficiency measures that save energy.

Paula Kaufman, a caller who identified herself as a District 9 resident, urged the council to negotiate protections against surprise bills and to strengthen low-income assistance, saying unusual weather‑normalization fees and other charges had caused her own bill to spike. "Texas Gas Services unfair billing practices drastically diminished housing affordability," she said.

A Texas Gas Service representative told the committee the company and city staff are already negotiating a draft franchise and that many of the RMC’s concerns are being addressed in that process. The company representative warned, however, that some proposals—such as adopting progressive residential rate tiers that closely mirror municipal electric or water rate structures—are technically difficult for a natural gas utility that serves many different cities across Texas and whose residential consumption is heavily winter‑concentrated. He said the company is open to public hearings and to further discussions but flagged operational and regulatory constraints, including oversight by the Railroad Commission of Texas.

Assistant City Manager Susana Carbajal said staff plans to return to the committee in March with follow-up information on the legal and operational feasibility of priority RMC recommendations, including capital project reporting, methane-leak detection standards and low-income assistance options. Committee members asked staff and the company to continue outreach and to share draft franchise language publicly as negotiations proceed.

The committee did not vote on franchise terms; staff and the company said they expect continued negotiations followed by council consideration later in the spring.