El Paso fights proposed Texas Gas Service rate increase, service-area consolidation
The city of El Paso is fighting a proposed Texas Gas Service rate increase in the El Paso area and the proposed consolidation of three of the utility's service areas, city officials announced Tuesday.
Austin-based Texas Gas is proposing to increase El Paso-area residential natural gas rates an average 16.1% for small residential customers and an average 22.6% for large residential customers. The customer size is tied to the amount of natural gas consumed monthly.
The main commercial rate would increase just over 10% under the request.
The request comes as residents begin using natural gas-fueled furnaces as this area's nighttime temperatures dip into the 30s this week.
The El Paso City Council on Tuesday will hold a public hearing on the proposed rate increase toward the beginning of its 9 a.m. regular Council meeting. Texas Gas officials have been asked to attend the hearing. Members of the public can sign up to speak in person or online.
The City Council has until Nov. 28 to take action on the utility’s request, and the Texas Railroad Commission, which has the final say on the proposed rate increase and service-area consolidation, has until Jan. 27 to make its decision, city officials said.
“About 90 percent of the proposed increase by Texas Gas is billed to El Paso residents, which would place the largest burden on our residents while giving other service areas a reduction, which is not reasonable,” City Attorney Karla Nieman said in a statement.
A spokesperson for the utility has said Texas Gas Service needs the rate increase to help pay for $303 million worth of system improvements and other costs incurred since 2016 in the proposed, new West North Service Area.
Texas Gas information shows the rate increase would increase its annual revenues by $13 million, but city officials said in a news release it would increase the utility’s revenues by more than $18 million.
A hearing on the request was held in early November by an administrative law judge for the state agency. The judge’s recommendation will be filed in the future.
The company is proposing to consolidate its West Texas, North Texas and Borger/Skellytown service areas into the new, very large West North Service Area — stretching hundreds of miles from El Paso to Willow Park, a Fort Worth suburb. El Paso and 30 other much smaller cities would be in the expanded service area.
Texas Gas officials want to lower natural gas rates in the 11-city North Texas Service Area as part of the consolidation because rates there are higher than in the 18-city West Texas Service Area, a utility spokesperson has said.
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In a brief filed prior to the hearing, lawyers for the city argued the proposed consolidation makes no sense and is unreasonable, in part, because of the large differences in weather, gas supply issues, and costs between West Texas and North Texas.
The city of Borger also opposed the service-area consolidation in a filed brief.
Texas Gas seeks an excessive return on investment, wants to change the parameters of the basic residential service, recover expenses from ratepayers that the Railroad Commission in the past has found unreasonable, and “set up even higher rate increases for those same customers over the next six-plus years,” lawyers for El Paso argued in their brief.
Vic Kolenc may be reached at 546-6421; vkolenc@elpasotimes.com; @vickolenc on Twitter.
This article originally appeared on El Paso Times: El Paso fights proposed Texas Gas Service rate increase
