Relief is on the way for customers of the state’s gas utilities who were facing potentially high gas bills resulting from Winter Storm Uri.
On June 16, Governor Greg Abbott signed House Bill 1520, which directs the RRC and the Texas Public Finance Authority to work together to issue customer rate-relief bonds, the proceeds of which gas utilities would use to pay for the extraordinary cost of natural gas due to high demand during February’s winter storm.
The bonds would provide rate relief to customers by allowing gas utilities to recover the extraordinary cost of gas through customer bills over a longer time period, rather than potentially through a single billing statement. The bill provides financial relief to gas utilities that choose to apply for the bonds by providing for a low-cost source of financing to fulfill outstanding obligations to natural gas suppliers.
A gas utility that chooses to participate in the process would submit information and documentation to the RRC regarding its extraordinary costs to procure natural gas during Winter Storm Uri. The agency would review the application and, if the agency determines that issuing bonds is cost-effective, direct the Texas Public Finance Authority to issue bonds. The RRC sent gas utilities a Notice to Operators providing further information related to the bill.
“Throughout my time at the Railroad Commission of Texas and especially in the aftermath of Winter Storm Uri, consumer protection has been a priority,” said Chairman Christi Craddick. “I am grateful to the Legislature for passing this important bill and look forward to working with my colleagues and agency staff to ensure that we prevent any undue burden on natural gas customers who might have experienced extraordinarily high gas bills otherwise.”
“High demand for energy during the storm caused gas prices to rise and utilities incurred extraordinary gas costs to procure the supply needed to maintain service,” said Commissioner Wayne Christian. “HB 1520 allows for the high cost of gas from the storm to be securitized, utilizing the creditworthiness of our state to lower interest rates. This will ensure our constituents do not receive large, unexpected bills from their natural gas utility provider in the wake of Winter Storm Uri.”
“I commend the members of the Texas Legislature for getting this across the goal line,” said Commissioner Jim Wright. “Winter Storm Uri was an unprecedented event, and Texans should not have to shoulder the cost alone. Securitization will allow gas utilities to remain afloat while lessening the burden on their customers.”
House Bill 1520 was authored by Representative Chris Paddie and sponsored by Senator Kelly Hancock.
Gas supply was uninterrupted for a vast majority of Texas residents during Winter Storm Uri: 99.5 percent of customers connected to natural gas maintained service during the storm.
For more information, please visit www.rrc.texas.gov.
Source: Railroad Commission of Texas
