The Richmond Public Utilities Commission

Richmond Gasworks (RGW) is the eighth largest publicly owned gas utility in the United States, but it’s not exactly a friend to the public. Gas leaks, costly maintenance expenses and mysterious expansion plans raise questions about its priorities and practices. Investigations by Beyond Methane and other groups have uncovered risks to health, safety and — if you’re a gas customer or taxpayer — your household budget.

Fortunately, RGW just got a major assist from City Council. On November 13, the council passed ordinance 2023-315 and establish a Public Utilities Commission for Richmond!

What’s a Public Utilities Commission?

It’s an advisory group of experts and community members that can provide guidance and support to the people managing daily operations. It can also dive into accounting and planning practices that too often remain behind closed doors to the general public. The idea is not to get in the way, but to steer decision-making into cost-effective and responsible territory.

Why should you care?

Because if you’re a ratepayer for methane gas or a taxpayer in the city of Richmond, part of what you pay is literally disappearing into thin air. More than 900 gas leaks have been identified throughout the RGW service area — some of them above the lower explosive limit. Just as gas customers buy from RGW, RGW buys from the volatile world gas market, then simply passes on those expenses, including the cost of leaked gas. Since 2012, that cost has exceeded $35 million!

Meanwhile, the costs to repair leaking pipes continue to mount.

It gets worse.

RGW continues to expand its services into surrounding counties, spending millions of dollars to design and build its gas lines. They’re even planning to penetrate Goochland, a sparsely populated region that would require miles of pipes to service a handful of customers. The money for this expansion comes from revenue bonds — lots of borrowed money: at the end of 2022, RGW had a debt burden of $757 million! And who pays off the debt? If you live in the city of Richmond, you again. Since none of this spending generates income for the city, it’s a return on investment of zero. In reality, it’s less than zero.

RGW faces the possibility of a Utility Death Spiral.

More and more gas customers are seeking relief from high gas bills by installing high efficiency heat pumps and electric water heaters in their homes. They’re getting off gas. That’s problematic for RGW because fewer gas customers requires higher rates on those who remain, since someone still has to pay off the debt. Higher rates lead to even more customers getting off gas, then higher rates again. These highly unstable economics become the utility death spiral.

The changing climate.

No one likes to talk about climate change, but the truth is we live in an age where the burning of fossil fuels is regularly threatening our way of life. Fires, floods and droughts force millions of people from their homes, raise enormous rebuilding and relocating costs on taxpayers, and threaten food supplies for everyone, as farmers across the land wrestle with extreme weather and depleted topsoils.

The choice to bury antiquated energy systems under the roadways of our neighborhoods rather than harnessing energy from the wind and sun is an example of backwards thinking. The Public Utilities Commission will be looking forward, towards a breakthrough for delivering reliable and low cost energy to the city and beyond.