Report: RRC allows energy cost increases twice that of inflation rate




Posted on December 13, 2010 at 8:40 PM

Updated Monday, Dec 13 at 10:29 PM

DALLAS - A new report obtained by WFAA is adding fuel to the fire that the Texas Railroad Commission (RRC) should be abolished.

The latest attack on the commission is connected to what North Texans are paying for natural gas, specifically what natural gas providers charge to get gas into homes.

For example, in Dallas, the RRC has allowed Atmos Energy and its predecessors to increase its base rate 67 percent over the past decade, which is more than twice the rate of inflation.

"Why?" is a question ratepayers in more than 150 cities want to know.

Other than her fireplace, what heats Dallas resident Ree Watner up is the possibility she pays more than necessary for the cost of the delivery of natural gas.

“I don't think the commission, any of the commissioners down there, seem to have the public's interest at heart," she said.

A new report by the Atmos Cities Steering Committee, representing 150 cities in North Texas, found that the RRC granted higher residential rates to deliver the gas in most major cases in the past 13 years. The rates are even higher than the recommendation of the commission's own impartial hearing examiners, who judge the cases first.

“It's the residential ratepayers that seem to be getting hit the hardest," said Jay Doegey, the Arlington city attorney and co-chair of the steering committee

As an example, he points to a 2007 Atmos rate case when the hearing examiner recommended a $21.5 million rate cut. But, commissioners ended up granting a $10.1 million rate increase.

The study says since 1997, the total difference between what hearing examiners recommended and what the commission approved for North Texas gas customers was $155.6 million.

“It's being reversed repeatedly by the Railroad Commission with little or no explanation," Doegey said.

The state's Sunset Advisory Commission staff suggests replacing the elected railroad commissioners since they rely on the industries they regulate for campaign money. In their place, they recommend appointed people.

The Sunset Commission holds a public hearing Wednesday, which Watner said she will be watching closely.

“The only solution is going to be for people to really get involved and make their voices known," she said.

“In evaluating the evidence before it and in reaching decisions on the myriad of issues that are raised, the Commission exercises its judgment in a fair and objective manner to ensure that its decisions are reasonable and supported by the evidence and law," read a statement released late Monday by an RRC spokeswoman in response to the report. "When the Commission sets rates, it must balance its concerns for the price the consumer pays with the necessity that the utility provides safe and reliable service.”

Atmos says it hasn't seen the report, but said it will continue to work with cities to provide cost-effective and safe natural gas service.

Every 12 years, the Sunset Advisory Commission reviews a state agency's performance. The latest report identified concerns with oversight, funding and enforcement at the RRC. The findings reinforce a four-year News 8 investigation.

News 8 will be at Public hearings Wednesday in Austin. A final vote will take place in January.