Rates charged by the statewide gas utility will increase under the rate settlement— but only by $14.4 million overall — as opposed to the $41.1 million initially proposed by TGS. That’s a nearly 65 percent reduction from the company’s request.
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Under an approved settlement with city representatives and others, Texas Gas Services will shave nearly $27 million from a proposed rate increase taking effect this year.
The Texas Railroad Commission approved the non-unanimous settlement on Feb. 5. with only small modifications. Rates charged by the statewide gas utility will increase under it — but only by $14.4 million overall — as opposed to the $41.1 million initially proposed by TGS. That’s a nearly 65 percent reduction from the company’s request.
The Railroad Commission also approved the consolidation of disparate TGS service territories— namely, its Central-Gulf Coast, West North Service and Rio Grande Valley territories — into a single statewide service area with uniform rates. El Paso, which is in the West North Service area, was not a signatory to the settlement.
The unified service charge for small residential customers across this newly approved statewide service area will be $19.50, as opposed to the $29.50 initially sought by TGS. The Railroad Commission also approved a volumetric rate of approximately 92 cents per cubic feet of gas. For a typical customer, the new charge and volumetric rate will result in average bills of $39.71.
Settlement details include:
- A “Return on Equity” of 9.8 percent, as opposed to the 10.4 percent initially proposed by TGS. Return on Equity signifies how much profit the company can receive from its equity investments.
- The removal of a credit card processing fee assessed on residential customers.
- Language to make sure that TGS collects appropriate amounts from developers.
- Reimbursement for cities of their rate case expenses.
More information about the rate case can be found on the Railroad Commission’s website, under Case No. OS-25-00028202.