The Austin City Council approved a new 10-year franchise agreement with Texas Gas Service that dictates how Austin’s primary gas utility can operate in the city.
The council’s move marks the end of a lengthy negotiation process, during which consumer and climate advocates lobbied for stricter environmental regulations and tighter cost controls in the contract as natural gas bills balloon in Central Texas.
The council gave its preliminary approval to the agreement on May 7, though members of the city’s Resource Management Commission — an appointed advisory body — argued the proposal failed to deliver several critical provisions for ratepayers and the environment.
After more than two months of additional negotiation between Texas Gas Service and city staff, the final agreement approved Thursday moved closer to the commission’s original vision.
Texas Gas Service agreed to create a low-income assistance program for customers who struggle to pay their bills. The company also agreed to enhanced transparency provisions, including a leak detection report, capital improvement plan and an appearance before the Resource Management Commission each year.
Paul Robbins, the vice-chair of the commission, considers these changes wins, though he’s still not wholly satisfied with the outcome of what he has called a “once-in-a-generation opportunity” to address longstanding issues with the utility.
“It’s better to win some than to win none,” Robbins told the American-Statesman following the vote. “But I think city staff could have gotten a better deal.”
Texas Gas Service said it appreciated the collaboration with the city over the past few months and it is pleased with the new franchise agreement.
The agreement includes provisions that go beyond standard franchise agreements in Texas and are aimed at providing benefits for Austin customers, including enhanced community engagement and additional customer support programs, the company said.
“We look forward to continuing to serve Austin,” said Safeena Khanmohamed, a public relations manager for Texas Gas Service.
Notably missing from the final contract, Robbins said, were provisions designed to curb costs, including a requirement that Texas Gas charge developers for building infrastructure to serve new developments rather than passing those costs to ratepayers. The suggestion could have been a primary tool to keep rates down, he said.
“We couldn’t find a way to help lower bills,” Robbins said.
But the contract leaves Austin leaders with the option to explore purchasing the Texas Gas system to create a municipal gas utility at any point in the future. Robbins said a city-owned utility would ultimately be the best way to keep natural gas affordable.
“Is the issue over? Not by any chance,” Robbins said. “The only way this is going to stop is if we own it.”
Austin-based Texas Gas Service is the Texas division of Oklahoma utility giant ONE Gas Inc.