Austin City Council Rejects Texas Gas Service Rate Hike Amidst Rising Utility Costs

Austin City Council Rejects Texas Gas Service Rate Increase Proposal

AUSTIN, Texas — The Austin City Council has recently voted against a new rate proposal put forth by Texas Gas Service (TGS), continuing a tense back-and-forth that has seen residents and officials unite in their opposition to rising utility costs. Despite the utility’s recent attempts to reel in its initial proposal, many believe the offer still falls short of what Austin ratepayers deserve.

Backlash Over Initial Rate Hike

This summer, Texas Gas Service proposed a significant hike in its fixed monthly fees, aiming to raise the current $16 service fee to $25.50. Additionally, new classes of residential customers would see monthly fees jump to $39, which represented a staggering 14 percent increase for average consumer bills. Commercial customers were also in for a shock, with fees potentially soaring from the current $53.33 to as much as $100.

In response to the proposal, Austin, along with 16 other cities served by TGS, banded together, demanding a more reasonable compromise. The coalition’s efforts led to negotiations, but even after adjustments to the initial proposal, many felt the adjustments did not go far enough.

Scaled-Back Proposal Also Rejected

After a period of back and forth, TGS introduced a scaled-back plan. This new proposal aimed to adjust the service fees to $18 for small residential customers and $30 for large residential customers, while commercial fees would adjust to $60 and $75. However, in a city council meeting last Thursday, members voted to reject this offer, citing insufficient concessions by the utility.

Critics Voice Concerns

Various watchdog groups, including Austin’s Resource Management Commission and environmental organizations such as Public Citizen, Environment Texas, and Sierra Club, have voiced concerns over TGS’s proposal. Paul Robbins, a commissioner of the Resource Management Commission, emphasized at the meeting that if TGS’s proposal came to pass, it would indicate a 105 percent increase in residential rates since 2019.

“Austin should not have to deal with this constant onslaught of price gouging,” Robbins stated. He highlighted the fact that a neighboring municipality, San Antonio, charges significantly lower rates for gas services, reinforcing the notion that Austin’s residents are bearing an unfair burden.

Defense of Rate Increases

Texas Gas Service maintains that the increases are essential to cover rising gas prices and to meet the growing demand for expanding infrastructure. Critics, however, argue that existing ratepayers are unfairly bearing the cost of these increases. Unlike TGS, Austin’s municipally owned water and electric utilities require new customers to cover the costs of service expansions through premiums.

Mismatched Values

Opponents of TGS’s proposal have further criticized it for being out of step with Austin’s values, pointing out that the proposed rate structure disproportionately affects low-income customers and lacks incentives for conservation.

Looking Ahead

The council’s rejection of the proposal sends the matter to Texas’ Railroad Commission, which will review the case in the coming weeks. Observers are skeptical that the commission, known for its industry-friendly stance, will address the city’s concerns effectively. Nevertheless, this review presents a chance to appeal to the state’s Office of Public Utility Counsel for further action.

Meanwhile, many critics are looking toward 2026, when the city’s franchise agreement with TGS is set to expire. There are calls from officials like Robbins and fellow Commissioner Raphael Schwartz to consider alternatives such as municipalization or adjusting the Resource Management Commission’s oversight to include gas utility issues.

“It seems that the city needs to get serious about finding a way out of this situation,” Schwartz stated, echoing the sentiments of those who worry about growing affordability issues in the city.