HOUSTON—The big utility company selling natural gas to Houston residents is shifting costs from industrial and commercial customers to residential customers.
Fees on your gas bill, including "customer charges", are set by the Railroad Commission of Texas, which critics claim largely favors big companies over little consumers.
The agency also hasn’t regulated railroads in years.
What its three elected commissioners do oversee is what residents pay to have natural gas piped into their home. The costs show up on the bill as the "customer charge" and the "base amount".
But is the Railroad Commission letting gas companies like CenterPoint charge too much?
"The point is you look at what the company is entitled to and don’t give them any more than that," said Geoffrey Gay, a Houston native who works at a law firm in Austin.
On behalf of some Texas cities fighting rate increases (but not including Houston), his firm researched years of decisions made at the state Capitol by the Railroad Commission.
Gay said they found that in no major case in the past decade did the commission ever deny an increase to a gas company. And he said what may be worse is what the commission did to residential customers in Houston.
Last year, in a case involving CenterPoint, a company with a monopoly on supplying natural gas in the Houston area, the commission reduced those customer charges only to big, commercial customers.
The reduction totaled about $14 million. But the commission made up the difference---and then some---by raising charges to residential customers by over $19 million.
The city of Houston and its lawyers tried to stop it.
"We advocated against that position. Obviously we weren’t successful but there’ll be another one down the line," said Christopher Newport with the City of Houston’s Administration and Regulatory Affairs office.
The Railroad Commission said in a response to criticism of its decision that it’s about time residential customers in Houston started paying more for natural gas.
In a prepared statement emailed to 11 News, the commission said it wanted "to end the decades long practice of having the industrial customers subsidize the cost of residential customers."
The commission explained that it costs gas companies like CenterPoint more to pipe gas to thousands of houses than it does to the far fewer and far bigger commercial and industrial customers.\
CenterPoint agreed, telling the I-Team in an email that the company is attempting to eliminate "any subsidies that exist between customer classes."
"We think exactly the opposite is occurring," said Gay. "That is, those residential customers are now subsidizing big industry."
It’s a sentiment shared by Public Citizen, a national organization that advocates on behalf of consumers and average citizens. Late last year, its Austin office released the results of research it did into campaign contributions to the Railroad Commission’s three, popularly-elected commissioners.
"We went in looking for how much money is being given by industry," said Andy Wilson, who headed up the project. "We found an extensive increase in the amount of money coming from the regulated industries."
Wilson said the tactics employed by the industries were almost too subtle to detect.
"This is not the classic example of someone showing up with a briefcase of money and then getting a regulatory decision," he said. "So much is more subtle than that. It’s a broad-based system of people giving a lot of money to have access."
Wilson said with the campaigns of commissioners being funded largely by the industries they regulate, the result is bad news for consumers.
"We have to balance the needs of industry with the needs of consumers," he said.
The Texas legislature has been studying whether the Railroad Commission should be overhauled or even eliminated with its duties given to the Public Utility Commission, which regulates electricity.
There’s one proposal that takes a different tact, moving electricity regulation to the Railroad Commission.
"That would be a nightmare of catastrophic proportions," said Wilson.
11 News wanted to know directly from the commissioner what they thought about the findings. Only one of the three responded to our requests for interviews. Michael Williams forwarded an email he’d sent to lawmakers.
In it, he said the commission needs overhauling, that it should have just one elected official, not three, and that it should be renamed the Energy Commission so voters know by name what it really does. Commissioner Williams defended the Railroad Commission’s most recent rate decisions.
He said contrary to the perception that the commission gives the gas industry whatever it wants, the commission in the past two years has consistently rejected the industry’s initial rate hike requests.
11 News also asked CenterPoint, in light of the research by Public Citizen, if it felt consumers are fairly represented when rates are set. A spokesperson responded that Texas generally has lower natural gas bills than other parts of the country.