Magazine: Texas Cities Guard Against Unfair Rate Hikes
Here’s a fun fact: it’s your local government — cities — that serve as the first line of defense against unfair utility rate hikes. It’s cities that have original jurisdiction over local energy utilities, and it’s cities that defend their citizens when those utilities get greedy.
Monopoly utilities include those that provide home gas service and those that operate electric transmission and distribution lines. These companies have no competitors and — if they had no oversight– would be free to wildly overcharge customers. That’s why rate regulation by cities is so vitally important.
A recent article from Texas Town & City, the official publication of the Texas Municipal League, describes city involvement in rate cases at the Public Utility Commission and the Railroad Commission — and how city work at those state agencies has saved Texans millions of dollars.
“Cities have been able to present a strong voice for consumers for more than 30 years — this has served to reduce the costs that cities and their residents pay for gas and electricity,” the magazine states.
What are the some of the most shocking utility expenses that cities have identified and kept out of home bills? Here are just a few, as identified by Texas Town & City:
- Hotel expenses of nearly $1,000 per night for executives to stay at a New York City hotel.
- Tens of thousands of dollars of art for the utility’s office.
- Dinners in New York City, Dallas and Philadelphia restaurants costing more than $200 per person.
Under Texas law, cities receive reimbursement for reasonable expenses associated with participation in rate cases. As noted by the magazine, this municipal participation leads to net savings because it typically results in reduced rates or reductions in rate increases far in excess of rate case expenses.
The publication notes that city participation in ratemaking has proven “time and again to be a good value.”
You can read more about cities and their protection of Texans against unfair rate hikes in two recent articles from Texas Town & City, found here.
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.