Dilley council moves to put possible sale of municipal natural‑gas utility on May ballot

Following a detailed presentation on the condition and finances of Dilley’s natural‑gas distribution system, the city council on Nov. 12 voted to place a question on the May ballot to allow voters to decide whether the city should be permitted to sell its natural‑gas utility.

Simon Pena, the city’s natural‑gas consultant, told council the distribution system dates to the 1960s, contains roughly 27 miles of pipe (mostly coated steel), and faces substantial regulatory pressure to replace high‑risk segments at an 8% annual replacement rate. Pena showed five‑year revenue and expense trends that left the utility operating at a loss in recent years and explained that replacement of aging steel mains in a fully developed town could cost millions. He described options the council could pursue—raise rates substantially, issue bonds, or seek voter authorization to offer the system for sale and accept bids from private utilities.

Council members discussed affordability and practical options for meeting replacement obligations, including the difficulty of raising rates quickly and the risk of enforcement or fines from the Railroad Commission for noncompliance with replacement rules. After discussion, a motion to put the question of selling the gas utility on the May ballot passed. Council instructed staff to begin the necessary election preparations to place the question before voters.

What’s next: Staff will coordinate with legal counsel and election officials to prepare the ballot question and election timetable for May. If voters authorize a sale, the council would still need to pursue formal steps (RFPs, bids and required regulatory approvals) before any transfer could occur.