By Miranda Rogers
The Lockhart City Council recently joined forces with several area communities to fight a price increase proposed by Texas Gas Service.
The cooperative effort was triggered by Texas Gas Service Company’s (TGS) recent filing of a Statement of Intent to increase rates in seven cities, each holding exclusive original jurisdiction over the rates, operations and services within its South Texas Service Area.
TGS seeks to increase base rates between 17.80 percent and 19.04 percent, depending on the city. Since the last increase was filed in 2007, the purpose of this recent increase is due to several factors, besides an increase in operating costs.
TGS representatives say they have invested over $4 million in a new plant in the South Texas Service Area (STXSA), which includes replacing about 11.5 miles of mains and 1,179 service lines.
The goal, according to TGS, is to reduce depreciation rates consistent with a recent study. They have also experienced about an eight percent loss in customers and a decrease in usage per customer.
To make the rate increase look a little less fearsome, TGS said they plan to continue their use of a “Weather Normalization Adjustment,” to account for the effect of abnormal weather, and will update their Rules of Service to make them consistent with other areas. Overall, TGS claims that two-thirds of a customer’s bill represents the cost of natural gas, not the Company’s cost to provide the gas service.
A synopsis of rate increases proposed by TGSC is as follows: 11.28 percent overall increase, a 15.69 percent overall base increase, and a 17.8-19.04 percent base increase within cities, of which there is an approximate 20 percent increase for residential customers.
The increase was originally slated to go into effect on Jan. 25, 2012, but several cities, including Lockhart, decided to take advantage of a resolution allowing them to suspend the effective date for 90 days.
During that time, City Manager Vance Rogers met with city managers in Cuero, Yoakum, Gonzales, Luling, Shiner and Nixon – the other communities that will experience the proposed rate increase, to propose a partnership to research the merit of the increase and perhaps share the expense.
With the help of these neighboring cities, Lockhart has sought the aid of the Lloyd Gosselink attorney firm of Austin, Texas, and their rate consultant to contest the proposed rate and fee increases.
Gosselink and the consultants will evaluate the filing, determine whether it complies with the law, and determine what strategy to pursue, including settlement and approve reasonable rates.
If the rates are approved as presented by TGS, the average residential gas customer will likely pay $4.11 more per month for natural gas in Lockhart – a 12.2- percent rate hike.
However, if the challenge is successful with no rate or fee increase approvals, the expense of $220,000 that was required to hire the firm will be distributed among all the cities based on their number of gas customers.
This means that the average increase per residential customer will be about 47.5 cents per month for a period of four years.
While the cities are looking at an increase either way, Lockhart’s efforts to use teamwork to combat these prices will potentially save the average community member a lot of money.