Community continues fight against gas company, lawmaker proposes changes

AUSTIN (KXAN) — After a community began raising concerns about propane bills and other issues, Rep. Jason Isaac, R-Dripping Springs, is proposing legislation to address the frustrations of the neighborhood.

Last year, KXAN News investigated the situation in the Belterra community. Hundreds of people in the neighborhoods southwest of Austin said they were being charged too much by Texas Community Propane, their propane provider. Some customers said they were paying $1,200 a month in the Belterra area.

“I want to stay here. I love the neighborhood. I love the schools,” Amanda Stanley, a Belterra resident, said at the time. “I want my kids to go to school here but this is definitely a hindrance.”

“[There are a couple thousand homeowners] right in my backyard that are really upset about being in this monopoly,” said Rep. Isaac. “Some of them knew about it going in. Some of them did not.”

Isaac is referring to a 30-year, automatically renewing deal in Belterra that states residents have to use propane. They also only have one provider: Texas Community Propane. The agreement, obtained by KXAN News, shows breaking the terms of the deal can cost homeowners between $950 to $1,500.

“The ‘break fee’ is charged to partially cover loss of revenue regarding infrastructure already installed and ongoing ownership costs of that infrastructure. Although a customer may cease using propane, our company nevertheless has continuing obligations and costs related to owning the gas mains and services at that prior customer’s residence,” wrote Barton Prideaux with Texas Community Propane in a statement last year. “Some of our ongoing obligations include “One Call” line locate costs, federal and state regulatory compliance costs (e.g., leak surveys, line surveillance, line patrolling) and 24/7 leak response and repair (gas line leaks occur despite not having an active customer).”

Rep. Isaac is now sponsoring three bills related to propane service. One targets opt out fees and contracts similar to the one in Belterra. Another bill limits a propane customer’s billing period to no more than 31 days. The third bill looks to make it easier for homeowners to switch propane providers by laying out in state law the ability for a homeowner to put a propane tank on their property.

“You couldn’t opt out and then put a tank on your property, behind a fence or in your backyard, screened in, out of site,” said Isaac. “You couldn’t do that right now. And that’s one of the bills that I have filed.”

“After last winter, a lot of folks in the neighborhood went out and bought multiple space heaters because they were just terrified of the bills,” said Mike Cherry, who lives in Belterra.

Cherry is waiting for his next bill, which should have some cold days on it. Mike says a recent propane statement was more than $500 to heat and run appliances in his roughly 2900 sq. ft. home.

Last year, the bills in Belterra outpaced the national average and the fees of a couple other propane providers. Bills provided to KXAN News by Belterra residents show the company charged $2.38 per gallon for propane in November — a penny below the state-allowed maximum for that month. Texas Community Propane’s rate was also below the national figure of $2.40 for residential propane, according to the U.S. Energy Information Administration. Still, those figures aren’t necessarily comparable.

Another agreement

Belterra isn’t the only community under a propane deal or restrictive covenant.

“It’s just, it’s been really frustrating,” said Linda Arroyo, who lives in Lakeside Estates near Hutto. Arroyo believes her bills are too high and doesn’t believe the statements dropped enough as temperatures warmed.

At least part of Lakeside Estates is entered into a 50-year propane deal, according to Hays County records. Customers there also say they use Texas Community Propane.

Texas Community Propane would not agree to an on-camera interview. However, the company sent KXAN News statements in reaction to customer concerns and the proposed legislation from Rep. Jason Isaac:

In 2013, the Texas Legislature regulated the community propane system operators by passing HB 2532 into law. This bill provides many consumer protections including price regulation. In formulating HB 2532, the legislature considered and evaluated many possible solutions before deciding on the bill which ultimately became law. The provisions included in Rep. Isaac’s current proposed legislation regarding break fees and individual tanks were thoroughly considered and were decided to be unnecessary and inconsistent with the final bill for a variety of reasons.

As a community propane system provider, the Texas Railroad Commission regulates both our operations and pricing. These regulations work to provide safe, reliable operations and provide a pricing structure that is transparent, verifiable, and ensures a long term competitive pricing structure to the benefit of the consumer. This winter has been colder than normal resulting in higher than normal gas usage. Despite lower gas prices, high gas bills have resulted from the higher than normal gas usage. We appreciate our customers and continue to work hard to ensure they receive safe, reliable gas service at a competitive value in compliance with all regulations.

Comparing prices

The average weekly price in Texas for residential propane got as low as $2.44 in November, according to the U.S. Energy Information Administration. However, an administration spokesperson says those prices typically look at propane delivered to the home. TCP’s system in Belterra hooks up and serves the community.

Still, TCP’s price in November came in lower than that state average at $2.38 per gallon.

We also got a copy of a bill in the Rancho Sienna development near Georgetown where Direct Propane charged $2.19 that month. However, a propane retailer tells KXAN that many factors can cause variations in price.

TCP also responded to these comparisons:

We do not comment on other propane dealers operations; however , we do know our pricing is competitive with the propane market and complies with all regulations.

What you can do

The Railroad Commission enforces the established price limits, however, enforcement is complaint driven.

You can find a link to the maximum allowed state price for community propane distribution systems here. The Railroad Commission also has information about how to file a complaint.

According to a commission spokesperson Ramona Nye, the commission has investigated 44 rate complaints since a new law took effect in September 2013. Staff found four overcharges, which lead to $89,666 in refunds for 17 neighborhoods. TCP was not one of the company’s found to be overcharging.

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