2016 Sunset Report RRCjpgThe Texas Railroad Commission would surrender its authority over gas utility rate cases to the Public Utility Commission under new recommendations to state lawmakers.

The Railroad Commission also would undergo a name change and end its controversial use of internal hearing examiners in favor of outside, independent hearing examiners.

These recommendations and more were included in an April 29 report by the professional staff of the Sunset Advisory Commission, a 12-member legislative panel that oversees the re-authorization of state agencies. The release of the staff’s 77-page report marks an initial step in a months-long process that also includes legislative hearings and the filing of a Railroad Commission re-authorization bill during the 2017 legislative session.

Although state agencies typically undergo a Sunset review only once every 11 years, this is the third for the Railroad Commission since 2010. Two previous Railroad Commission re-authorization bills failed in 2011 and 2013 — largely stymied by industry opposition to recommendations pertaining to the agency’s governance and its use of internal hearing examiners.

With regards to gas utility issues, the staff report found that the Railroad Commission’s current name does not reflect its responsibilities, misleads the public and impedes transparency. It recommended instead “Texas Energy Resources Commission” as a name that better reflects the agency’s modern-day mission.

Sunset staff further found that contested hearings and gas utility oversight are not core functions of the Railroad Commission, and therefore RRCshould be transferred to other agencies. Sunset staff said this would promote efficiency, transparency and fairness. Specifically, it recommended that hearing examiners from the independent State Office of Administrative Hearings replace the Railroad Commission’s internal hearing examiners and that the Public Utility Commission take over gas utility rate cases. The PUC already handles electric utility cases and has a structure that has evolved over time to promote fairness in decision making, according to Sunset staff.

Separately, Sunset staff was extremely critical of the Railroad Commission’s oil and natural gas enforcement program and said the agency struggles to maintain and report basic data pertaining to that program — despite having previously been made aware of deficiencies.

The report is noteworthy also for what it does not include: namely, a recommendation to change the Railroad Commission’s political governance. In its 2011 report, Sunset staff recommended that the Railroad Commission replace its three elected commissioners with a board of five part-time, governor-appointed members. In its 2013 review, Sunset Commission staff called for new limits on campaign contributions for commissioners and a resignation requirement for any commissioner who becomes a candidate for separate elected office.

Both the 2011 and 2013 recommendations contributed to the failure of Sunset bills during those years. In choosing to proffer neither recommendation this year, Sunset staff noted that “the Sunset Commission and the Legislature as a whole remain aware of these alternatives … and can choose to address them.”

— R.A. Dyer