Texas Gas Service proposes residential rate hike for Austinites

Proposed rate increases for Austinites

Texas Gas Service has proposed a rate hike for residents, while businesses could get a reduction.

AUSTIN, Texas - Texas Gas Service has proposed a rate hike for residents, while businesses could get a reduction.

Austin has joined a coalition of 17 cities that are served by the Texas Gas Service. The coalition plans to fight a rate increase for gas customers that's before the Texas Railroad Commission.

Austin City Council held a public hearing on Thursday.

The Texas Gas Service wants to increase its revenue for this service area by $25.8 million, which is an increase of 9.83% including gas costs, or 15.59% excluding gas costs.

Part of the proposal includes rates based on usage.

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"Our proposed rate design has a small rate and a large rate option, so customers can choose the rate design that best fits their needs," said Stacey McTaggart, rates and regulatory director at the Texas Gas Service.

For smaller residential users, the average household should expect their bill to go up by about $6.26. For large residential users, it would go up to about $9.53.

Several Austinites spoke out against the proposal during Thursday's meeting.

"We need a progressive rate structure like Austin Energy and Austin Water, providing low cost for families and increasing rates for larger users. High connection fees and lack of progressive rates discourages conservation," one public commenter said.

"Low income utility customers use far less energy on average, mainly due to smaller living spaces," another said.

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"The Texas Gas Service rate structure hurts low income and working class residents and discourages conservation," another public commenter said.

While residential rates could go up, commercial rates could go down. Council Member Ryan Alter asked the gas company why.

"Currently, as is common with utilities, commercial industrial customers, their rates are higher than the cost to serve them, and residential customers' rates are lower than the cost to serve them. There's subsidization of residential customers built in," McTaggart said.

Alter also asked why Texas Gas Service needs such an increase in revenue.

"A lot of it is the need to replace aging infrastructure, to ensure the system is safe and reliable and then there are the impacts of inflation," McTaggart said.

Comments from the hearing will be taken to the coalition for negotiations with the gas company. City Council will revisit the issue in October.