AUSTIN (KXAN) — Following a unanimous vote from the Railroad Commission of Texas Nov. 10, state gas providers now have the ability to raise the costs of customers’ monthly bills to help regain funds lost during the February winter storm.
On June 16, Gov. Greg Abbott signed House Bill 1520 into law, which allows gas utility providers who sustained significant costs during the February winter storm to “issue bonds and impose fees and assessments,” per documents. After that was signed into law, several gas providers filed applications to regain funds lost during the storm.
These applications were combined into one docket and reached a settlement with the RRC. Now, following RRC’s approval last week, eight gas companies will be able to regain $3.4 billion in lost funds incurred during the February winter storm.
In a statement, an RRC spokesperson said these increases will assist in paying off expenses gas providers took on last February to produce “the necessary supply of natural gas to maintain service.”
“During Winter Storm Uri, gas utility local distribution companies (LDCs) incurred extraordinarily high natural gas costs when procuring the necessary supply of natural gas to maintain service to their customers. LDCs are authorized to directly pass-through gas costs, without a markup, to customers. The Legislature recognized that natural gas utility customers could see a dramatic increase in their monthly bills without securitization of those costs and passed House Bill 1520.”RAILROAD COMMISSION OF TEXAS SPOKESPERSON
Following RRC approval Nov. 10, the commission has 90 days to submit a financing order to the Texas Public Finance Authority, directing them to issue bonds. An RRC spokesperson said the commission’s financing order will likely be delivered to the TPFA in less than 90 days.
Once the TPFA receives the financing order, the authority then has 180 days to begin issuing bonds. If both entities take the full 90 and 180-day time span to complete their tasks, bonds will likely be issued around mid-year 2022.
“The bonds provide gas utilities a low-cost source of financing to fulfill outstanding obligations to natural gas suppliers, and allow 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 spokesperson said.
CenterPoint Energy, a gas provider set to recover nearly $1.1 billion in costs incurred during the storm, said their 1.8 million customers should expect to see an increase in their monthly bills at some point in 2022.
Right now, a spokesperson for CenterPoint estimated customers will see a monthly increase between $2.50 and $5 next year. A more specific range won’t be available until the bonds have been issued and companies know the length of the bond, the spokesperson said.
“This ultimately means that the costs will be spread out over a number of years instead of just one,” the CenterPoint spokesperson said. “This recovery option is designed so that CenterPoint Energy recovers our prudently incurred natural gas costs while protecting customers against unexpected increases on their monthly bills.”