San Marcos Mercury | Local News from San Marcos and Hays County, Texas

January 12th, 2011
San Marcos, Kyle and Buda deny CenterPoint rate hike

by BRAD ROLLINS

The cities of San Marcos, Kyle and Buda have lined up against proposed increases in CenterPoint Energy natural gas service rates, setting off a process that will end with both sides arguing their cases before the Texas Railroad Commission.

In December, the utility company told cities it intends to raise the monthly customer charge for residential and small commercial customers, the first hike in the base rate since 2005. That five-year freeze was won during CenterPoint’s last round of proposed increases five years ago in a settlement with a coalition of central and south Texas cities that included Hays County’s three corridor cities.

Under the proposed increase, residential customers would pay $19 a month for service, not including the actual natural gas itself, up from a current rate of $11.75. The base rate for small commercial customers would increase by an average of 15 percent, depending on the city.

Municipal governments, under state law, have original jurisdiction to accept or reject utility rate increases but such decisions are swiftly appealed to the railroad commission. It’s essentially a protracted negotiation process in which everybody knows their roles well.

“You have several options,” interim city manager James Earp said in outlining the issue to the Kyle City Council last month. The first is, Earp said “You can just approve the rates outright. You can say ‘That’s fine. We’re not going to fight it. We’re fine with our citizens paying more.’”

The Kyle City Council voted unanimously to deny the rate increase and join the coalition of cities fighting the increase. Buda and San Marcos followed suit last week. Other cities in the coalition include Alice, Bastrop, Cibolo, Jordanton, New Braunfels, Seguin and Smithville, said James Boyle, the attorney who will represent the cities before the railroad commission.

Kyle has the largest number of residential natural gas customers in the county with 6,427 in addition to 152 small commercial and two large commercial customers. Buda has 1,654 residential, 130 small commercial and six large commercial customers. San Marcos has 4,166 residential, 617 small commercial and 28 large commercial customers.

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