Thanks in large part to Mr. Gay’s imagination, hard work and wise counsel, TCAP today is one of the largest and most successful political aggregation groups in the state.
On March 14, 2001 — nearly two decades ago exactly — the Texas Secretary of State approved articles of incorporation for an organization known as the Cities Aggregation Power Project. A month later the South Texas Aggregation Project received similar approval.
From the later merging of these two groups was born our organization, the Texas Coalition for Affordable Power. But neither CAPP nor STAP nor even TCAP would have existed without the tireless efforts of one man: our long-time general counsel, Geoffrey M. Gay.
Mr. Gay retires this month after a long career advocating on behalf of Texas cities and their citizens. In addition to his integral role with TCAP and its predecessor organizations, the Austin-based attorney also served as a driving force behind several municipal energy-related organizations and, over his 44 years of legal practice, negotiated and litigated utility rate matters collectively valued at more than $1 billion on behalf of more than 300 cities.
In commemoration of his long years of service to cities, we offer here this quick look back at his career and accomplishments.
A native of Texas, Mr. Gay, born in December 1951, received an undergraduate degree from Emory University in Atlanta, a Masters from Houston’s Rice University, and law degree from the University of Houston. He was licensed by the State Bar in 1977.
Mr. Gay spent the first years of his career in public service, beginning with a position at the Fort Worth-based West Texas Legal Services, an organization that provides legal representation for the indigent. From there he moved to West Virginia for a position with the Consumer Advocate Division of that state’s Public Service Division, and then returned to Texas in 1983 for a position with the Texas Attorney General’s office. There he represented state agencies in utility cases, including the AT&T/Southwestern Bell divesture case.
His next position, in 1984, was with the Office of Public Utility Counsel, a state agency that advocates for Texas energy consumers. Gov. Mark White named him the agency’s director in 1986. While at OPUC, Mr. Gay handled the last statewide rate cases for AT&T and Southwestern Bell prior to telecommunications divestiture and likewise handled the first case to consider cost overruns at a Texas nuclear plant. Ultimately, his career involved major roles in protesting imprudent decisions and unreasonable costs at three different nuclear plants.
In 1988 Mr. Gay entered private practice, and in that capacity began working with various municipal coalitions as they resisted electric rate requests from utilities in all areas of Texas. Twelve years later he joined the Austin law firm of Lloyd Gosselink, where he was named chair of its Utility Practice Group. By then the Texas Legislature had adopted the retail electric deregulation law, and in so doing, dramatically changed the state’s regulatory landscape. This, in turn, led to changes in some of Mr. Gay’s work on behalf of municipal governments.
THE FORMATION OF CAPP, STAP and TCAP
It was in 2001, for instance, that he took action on behalf of city clients to form TCAP’s two predecessor organizations: the Cities Aggregation Power Project (“CAPP”) and the South Texas Power Project (“STAP”). These groups were political subdivision aggregators, organized under a provision in the deregulation law that allows cities to join in coalitions to purchase electricity for their own governmental use. Mr. Gay helped bring together city officials to form CAPP’s and STAP’s original oversight boards, suggested and implemented legal and legislative strategy on behalf of both groups, and even handled the Secretary of State paperwork that brought these organizations into existence. He also oversaw the later merging of both groups, leading to the eventual formation of our own group, the Texas Coalition for Affordable Power.
Also in 2001, Mr. Gay helped to negotiate a far-reaching settlement under the state’s deregulation law in which the state’s largest electric utility agreed to surrender potentially billions of dollars in regulatory claims that otherwise would have been charged to ratepayers. Under the terms of the deal, Dallas-based TXU surrendered all claims to deregulation-related “stranded costs” in excess of amounts previously considered by the Public Utility Commission in exchange for an agreement from cities and others to settle various outstanding legal cases as well as other considerations. TXU once claimed it was owed $6 billion in stranded costs. As a result of the 2001 settlement negotiated by Mr. Gay and others, however, the amount of stranded costs granted to TXU was zero.
In 2007, a group of out-of-state investors entered into negotiations to purchase TXU, the owner of Dallas-based Oncor. Because it would result in an ownership change for the regulated utility, the transaction required advanced PUC approval. Mr. Gay intervened in the resulting regulatory proceeding, and helped secure for his city clients a commitment from the investors to create a financial “ring fence” around Oncor. This ring fence included various financial covenants to protect Oncor’s captive ratepayers should the new owners ever face financial difficulties. As it turned out, these protections were absolutely essential: Energy Future Holdings, Oncor’s new owners, filed for Chapter 11 bankruptcy in 2014. The utility eventually changed hands, and Mr. Gay likewise represented city interests in those transactions.
GAS UTILITY MATTERS
Mr. Gay also has spent years involved in gas utility matters, and for three decades has served as general counsel for a coalition that represents municipal interests in gas utility rate cases at the Texas Railroad Commission. Working with the coalition — now known as the Atmos Cities Steering Committee — Mr. Gay in 2007 negotiated with Atmos to create an alternative ratemaking procedure known as the Rate Review Mechanism. Still deployed today, the RRM has allowed cities to mitigate some of the punishing rate hikes the Atmos utility could otherwise have commanded under existing regulatory law. An analysis has shown that the RRM has helped Texans avoid millions of dollars in higher rates.
The ACSC has been involved in every major rate case brought by the Atmos gas utility and its predecessor utilities over the last three decades, and Mr. Gay, as the ACSC general counsel, has played an important role in nearly all of those cases. In more recent years, Mr. Gay also has continued negotiating important electric rate matters on behalf of his city clients, and assisted them in franchise matters.
And of course in 2011, he took action to create our organization, the Texas Coalition for Affordable Power. Through it, Texas cities have secured millions of dollars in savings on their electricity costs. TCAP, thanks in large part to Mr. Gay’s imagination, hard work and wise counsel, today is one of the largest and most successful political aggregation groups in the state.
On behalf of TCAP, we salute Mr. Gay for his years of service to our coalition and cities generally, and we wish him a happy and very well-deserved retirement.
Is a policy analyst consultant for TCAP, a coalition of political subdivisions in Texas that purchase electricity in the deregulated market for their own governmental use. Because energy costs are typically a significant budget item to our members, TCAP is consistently looking for ways to save our members money, through cost-saving contracts, energy efficiency or demand response programs.