RRCSeveral key reforms for the Texas Railroad Commission that would have helped gas utility ratepayers were removed Thursday from a 2017 legislative package.

The rejected reforms included a proposal to change the agency’s name to one that better reflect its responsibilities, a proposal to transfer administrative law cases to an independent agency, and a proposal to transfer gas utility cases to the Texas Public Utility Commission.

The Texas Railroad Commission is the 125-year-old state agency that oversees the Texas oil and gas industry. The Commission also decides gas rate cases. The changes rejected Thursday had been proposed by staff at the Sunset Advisory Commission, which is a legislative panel that periodically reviews and re-authorizes state governmental agencies.

Meeting at the Capitol, Texas House and Senate lawmakers on the Sunset Advisory panel accepted a number of staff recommendations, but removed those pertaining to gas utility ratemaking. Each of the rejected recommendations had been endorsed by city and consumer groups.

The rejected proposals include:

  • Sunset staff had recommended changing the name of the Texas Railroad Commission. Sunset staff concluded that the agency’s current name misleads the public and impedes transparency. Staff recommended instead “Texas Energy Resources Commission” as a name that better reflects the agency’s modern-day mission.
  • Sunset staff found that contested hearings and gas utility oversight are not core functions of the Railroad Commission, and therefore should 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.
  • Sunset staff also recommended that the Public Utility Commission assume responsibility for 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.

However the Sunset Commission lawmakers adopted a number of other recommendations, including those designed to improve monitoring of the oil and gas industry, to authorize the creation of pipeline permit fees, and to direct the Railroad Commission to incorporate findings from a seismic monitoring program into its disposal well guidelines. These proposed Railroad Commission reforms and others will become the basis for “Sunset” legislation to be taken up during the 85th Texas Legislature, in 2017.

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.

— R.A. Dyer

What is the Texas Coalition for Affordable Power?

R.A. Dyer is a policy analyst for TCAP,  a coalition of cities and other political subdivisions that purchase electricity in the deregulated market for their own governmental use. Because high energy costs can impact municipal budgets and the ability to fund essential services, TCAP, as part of its mission, actively promotes affordable energy policies. High energy prices also place a burden on local businesses and home consumers.

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