RRC’s Commissioners Approve Financing Order to Keep Monthly Gas Utility Bills LowFebruary 08, 2022
AUSTIN – RRC’s commissioners approved a financing order today that will prevent huge spikes in gas bills for more than 4 million residential and 260,000 commercial customers because of Winter Storm Uri.
Natural gas utilities are authorized by law to pass through the cost of gas each month, without markup, which customers see as a monthly line item in their bills.
In fact, it is illegal in Texas for natural gas utilities to profit from the sale of natural gas. The pass-through system works best when natural gas prices are stable and affordable, as they typically are, but Winter Storm Uri created a situation that required change.
The financing order allows natural gas utilities to spread the high cost of gas incurred during last year’s winter storm across multiple monthly bills rather than having customers face a large spike in one bill. This order is not a windfall for natural gas utilities and is for the benefit of Texas consumers.
Customer rate-relief bonds will be issued for Atmos Energy, CenterPoint, Texas Gas Service and five smaller Texas gas utilities to spread out charges for customers over an extended period time.
“Today's action by the Railroad Commission is not a bailout for natural gas utilities; it is simply a process created by bipartisan legislation to protect Texas consumers,” said RRC Chairman Wayne Christian. “With or without this action, these companies are lawfully able to pass along their expenses to ratepayers. This process simply allows the cost of high-cost gas during Winter Storm Uri to be reimbursed over time instead of in one massive bill."
“Protecting natural gas customers in Texas has been a priority for myself and this agency since Winter Storm Uri,” said RRC Commissioner Christi Craddick. “The unprecedented circumstances surrounding that winter weather event required swift action, and I am proud to deliver that relief today. Thank you to RRC staff and the Texas Public Financing Authority for your hard work on this important matter.”
“Today’s order is critical for gas customers and provides a reasonable solution to spread the costs incurred during Winter Storm Uri,” said RRC Commissioner Jim Wright. “The Texas Legislature correctly understood that if this was not addressed, residential customers, including the least fortunate among us, would be hit with a one-time charge that could cause serious harm to their family finances. I am proud of the work of the Legislature, the Railroad Commission and the Texas Public Finance Authority to address this issue and find a solution that benefits all gas utility customers.”
The financing order is authorized by House Bill 1520 which was passed on a bipartisan basis by the Legislature last year. The bonds are for approximately $3.4 billion of extraordinary gas costs from last year’s winter storm.
The Texas Public Finance Authority will issue the customer rate-relief bonds within six months. Bond proceeds will be used to reimburse participating gas utilities for their gas costs.
About the Railroad Commission:
Our mission is to serve Texas by our stewardship of natural resources and the environment, our concern for personal and community safety, and our support of enhanced development and economic vitality for the benefit of Texans. The Commission has a long and proud history of service to both Texas and to the nation, including almost 100 years regulating the oil and gas industry. The Commission also has jurisdiction over alternative fuels safety, natural gas utilities, surface mining and intrastate pipelines. Established in 1891, the Railroad Commission of Texas is the oldest regulatory agency in the state. To learn more, please visit http://www.rrc.texas.gov/about-us/.