A small, rural Harrison County congregation has taken on natural gas giant, Centerpoint-Entex, and is so far, making great strides.
In effort to maintain natural gas service in their community, Canaan Baptist Church launched an online petition, addressed to officials with the Railroad Commission, urging them to reject Centerpoint’s application to abandon service to a dozen residential customers and two commercial customers, which includes the church.
The congregation also filed an official protest in response to Centerpoint’s request.
The protest recently gained success, as the Railroad Commission of Texas Hearings Division sided with Earnol Brewster, a trustee of the church, who launched the petition and filed the protest on behalf of the congregation as well as his own household.
“We did win the first round of this,” Brewster said in an interview with The Marshall News Messenger. “The administrative law judge ruled in our favor.”
However, “Centerpoint Energy is appealing right away. They’ve already filed for delay and for trying to appeal with this,” said Brewster. “The judge agreed with everything we said, pretty much. God is good.”
Brewster, who drove to Austin this past December for the Railroad Commission’s preliminary hearing, has been advocating on behalf of all affected customers since November.
When Centerpoint filed its application on Nov. 8, 2018, to abandon service, Brewster followed up with a protest to the application on Nov. 26, 2018.
“Over 80 years, Centerpoint has served the community and the church,” Brewster said. “It’s all about money and greed and loopholes and trying to go around.
“I’ve already told them this is environmental racism because they singled us out,” he said of the economically disadvantaged, minority and elderly community. “They want to convert us to propane usage.
“It’s just so much more unsafe from what my research has shown. The potential of having problems with it are greater. So, that has alarmed me.”
Phillip Green, area manager for Centerpoint, told the News Messenger the company cares about its customers, which is why Centerpoint is offering to manage the conversion itself, perform assessments of customers’ compliances and provide a full tank for the initial fill.
“If they choose not to go with propane, they can take the lump sum and then they’re able to convert to any other energy source of their choosing,” said Green.
To ease the fears of propane use and the rates associated with it, Green said he brought in a sales representative from a tank company to meet with some of the church community to educate them on various cost-saving programs.
“We do sympathize with the customers in this entire situation, and we at Centerpoint we love our customers. We’re trying to do everything we can to accommodate,” said Green.
Due to the protest, a hearing on the merits was held on Feb. 15 to allow the utility to prove that the proposed abandonment is “reasonable and necessary and is not contrary to the public interest.”
PROPOSAL FOR DECISION
The Railroad Commission of Texas Hearings Division then issued its proposal for decision on April 12, along with a proposed final order, announcing that “the Administrative Law Judge and technical examiners recommend that the Commission deny Centerpoint’s application.”
Giving background, the proposal notes that Centerpoint’s request to abandon natural gas service to the 11 residential customers and two commercial customers — Canaan and St. John Baptist Church — was driven by a possibility that the type of gas it receives from its supplier may change and become unsuitable for Centerpoint’s customers if its current supplier, Gulf South Pipeline Co., sells its interstate facilities to a new owner, Tristate NLA LLC.
The proposal continues to explain that Gulf South had already received conditional approval at the federal level from the Federal Energy Regulatory Commission (FERC) for an abandonment by sale to Tristate, subject to Gulf South first arranging for continuity of service for Centerpoint’s affected customers in Texas.
To make Gulf South’s facilities suitable for transfer to Tristate by sale, Centerpoint, Gulf South, and Tristate decided — and represented to FERC — that continuity of service for these 13 Texas customers would be accomplished by converting them from natural gas to propane.
Based on this representation, FERC conditionally approved Gulf South’s application in July 2018.
Centerpoint informed FERC and the parties of its regulatory obligation to continue serving its customers until abandonment is approved at the state level. In Texas, any gas utility can request to abandon service to certain customers by filing an application with the Railroad Commission.
Thus, Centerpoint filed its abandonment application on Nov. 8, 2018, initially requesting abandonment for 14 customers. The request changed to 13 customers after deciding to connect one residential customer to a nearby gas line.
During the Feb. 15 hearing, prompted by Brewster’s protest, Centerpoint argued that abandonment for the impacted customers is appropriate because the quality of gas transported to these customers will change and become unsuitable for residential and commercial consumption, should the PSA transaction become final and Tristate take ownership of the facilities; and because the estimated cost of $1,002,300 to connect these 13 customers to nearby Centerpoint facilities to continue serving them is too high.
Brewster, representing his wife, Regina Washington, and his church, Canaan, informed that most of the people in the community have space heaters, HVACs or installed units. He advised that their main concern is the potential danger of propane.
“I think this is probably a big deal for Gulf South and maybe Centerpoint is making money as well, but I think when people’s lives are at stake maybe if you can do something better, I think it would be appropriate now,” Brewster told the Railroad Commission in the hearing.
Brewster also expressed that he finds it disturbing that Centerpoint seems to have targeted a primarily minority and economically disadvantaged community.
“Here we are facing loss of service and increased cost without, I think, the support and due diligence from Centerpoint and others to try to provide service to us,” he said.
In rebuttal, Centerpoint contended that propane is the lowest-cost alternative energy source available to these customers and that the type of gas Tristate intends to transport through these pipelines would be unsafe to serve them.
Taking all into consideration, the administrative law judge and technical examiners determined that the proposed abandonment is not reasonable or necessary, and not in the public interest.
“One company’s uncompelled sale of an asset to another company in a private transaction is the reason for this abandonment request. This scenario is not what the abandonment rule contemplates, but rather is incident to readying a third-party asset for transfer to a new owner,” the hearing division determined. “Making Gulf South’s interstate facilities suitable for sale, regardless the cost, is between the buyer and seller and need not involve the Railroad Commission or Centerpoint’s customers.”
The hearing division further noted that the FERC’s conditional approval of the abandonment by sale of Gulf South’s facilities was made based on representations by Gulf South that there would be no service disruption for these Centerpoint customers.
“No one represented the interests of these 13 customers during that proceeding, yet Gulf South, Tristate, and Centerpoint together effectively arranged propane conversion on their behalf despite this option being far from a guaranteed outcome under Texas law,” the hearing division stated. “In Texas, companies cannot decide to stop serving natural gas customers whenever they want just because they can afford to convert affected customers to propane. Abandonment must be necessary and in the public interest, not simply the cheaper option to ready an asset for sale in a voluntary transaction between two companies. Here, Gulf South and Tristate can avoid service disruption, satisfy the FERC’s sole condition for the sale, and complete their private transaction by connecting these 13 customers to nearby Centerpoint gas lines.”
The hearing division additionally found Centerpoint wrong for several reasons. One is because Centerpoint is not responsible for paying any necessary costs incident to a private transaction between two companies.
“Any expenses voluntarily paid by Centerpoint to do so, whether $1 or $1 million, are effectively a gift to Gulf South and Tristate. For Centerpoint’s purposes, the only pertinent numerical difference is the $10,097.58 it would lose in annual revenue if these 13 customers are converted to propane,” the hearing division noted. “More broadly, the public interest is not served by placing Texans in the precarious position of wondering whether companies are privately arranging to cancel their gas service to save money on closing costs.”
Further, Centerpoint did not prove that propane is the lowest cost available alternative energy source.
“With Gulf South and Tristate responsible for all costs incident to their own private transaction — and their open willingness to pay them — Centerpoint never should have considered or suggested propane conversion for any of its customers,” the hearing division noted.
In conclusion, the ALJ and examiners are proposing that the Commission deny the abandonment request.
“Abandonment must be necessary and in the public interest, not simply the cheaper option to ready an asset for sale in a voluntary transaction between two companies,” examiners stated. “Gulf South and Tristate have the ability and apparent willingness to pay all costs necessary to arrange continuity of service for these 13 customers and finalize their corporate sale. This can be achieved by Gulf South and Tristate connecting these customers to nearby gas lines at a cost of approximately $1 million. This approximately shoulders these companies with all the costs necessary and incident to their private transaction.”
Brewster told the News Messenger that he is happy that the administrative law judge heard his plea.
“I was impressed to see that the judge thought about what I (presented),” said Brewster. “(He said) this is not what the federal energy regulatory commission had in mind. It said we all need to be taken care of.”
He said from the beginning it seems like the company was trying to railroad the customers. Some unfortunately gave in, he said.
“I really thought we’d have more people interested in pushing it but everybody just seemed to give up, even in my community,” said Brewster. “Those people, they just felt like they had no choice and they did have a choice and I’m just thankful that the judge listened to our plea.”
The customer said he would’ve liked to have had more time, perhaps during the summer, to petition Centerpoint, but was glad they were still able to make some headway despite the inconvenient timing of Centerpoint’s notification letter, which was sent during the hustle and bustle of the holiday season.
“They really tried to rush this thing through,” said Brewster. “They were disappointed that they didn’t get an administrative discontinuance of service,” he added. That’s what they wanted … just to send the paperwork out, what I think was pre-planned to be an inconvenient time, holiday season, everybody’s busy doing things and they didn’t expect anybody to protest. So I’m just thankful that we were able to protest it and get something good out of this.”
Brewster said he’s glad for the outcome, so far, as it seems that Centerpoint had no intent on finding alternatives other than propane. He said they refused to entertain the options of solar or wind energy when mentioned at a January meeting held at the church between the parties and customers.
“They said that’s too expensive. But the judge ruled that they did have the resources if that’s what they wanted to do,” said Brewster.
Brewster’s online petition — addressed to John Dodson, Administrative Law Judge of the Railroad Commission of Texas and Rose Ruiz, Technical Examiner for the Railroad Commission of Texas — in protest of Centerpoint is still active on the website, www.change.org, today, boasting a total of 103 signatures.
“This is a prime example of corporations putting ‘profit before people”! These churches and communities have been a part of and served Harrison County since about 1870, shortly after slavery ended. Discontinuing natural gas service to these communities would be unfair and would place undue burdens on long time, elderly customers,” the petition states.