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Thursday, February 8, 2001

Natural gas users may soon see price relief

From Staff and Wire Reports

PECOS, Thursday, February 8 - State officials in Austin are urging lawmakers to slash taxes for natural gas producers and consumers and create incentives to dig more wells in Texas, even as recent trends show the price of natural gas dropping in the state, which should translate into lower bills for local consumers.
"What's happening is the commodity prices are going down, the last time I checked they were down," said Southern Union Gas Area Manager Danny Shelton.
Gas prices and consumers' bills have soared this winter, after the price of natural gas reached $10 per thousand cubic feet late last year. Officials in Austin said a drop in production is to blame for the rise from $2.45 per thousand cubic feet a year ago.
Prices have fallen by about one-third from their highs in recent weeks, but to jumpstart production, Texas Railroad Commissioner Michael Williams said lawmakers should reduce the severance tax producers pay on gas they take from the ground. Severance taxes on natural gas total $488 million per year and $210 million on oil, according to the commission.
Lawmakers should also consider creating incentives to encourage utilities to buy gas at lower prices and to encourage producers to dig new wells, Williams told the House Energy Resources Committee.
He recommended that lawmakers also give consumers a break by giving rebates on the gas, electric and water utility tax utility companies charge consumers. That tax brings in $220 million per year.
Shelton said that the current gas bill for local consumers should reflect $7 per thousand cubic feet, the cost of gas. "That's the cost of gas, put on the bill, floated directly to customers," said Shelton.
In other words, Southern Union Gas does not make any money from the cost of gas, according to Shelton.
"The cost of gas is just a flow through," said Shelton.
Shelton said the cost of gas billing that appears on the consumers bill, is directly passed through, and not a part of the bill the company makes money on. "When the cost goes up, the bill goes up," said Shelton. "If it continues to go down, we'll probably see a decrease in the bills, because there haven't been any changes in our billing."
However, the market is so unpredictable natural gas prices could go up, but again, they could decrease, according to Shelton.
Williams and other members of the Railroad Commission said severance tax relief is needed to boost new production in an industry where investors, bankers and producers are still shaken from hard-hitting price declines in 1998 and 1999. But their recommendations Wednesday were challenged by some lawmakers and consumer advocates.
Rep. Ron Lewis, chair of the House Energy Committee, questioned why the state should offer aid to a gas industry that doesn't seem to be suffering.
"We see all these big profits being made and the public wants to know why they're paying all these profits for you," Lewis, D-Mauriceville, told a Houston producer during the meeting.
Janee Briesemeister of the Consumers Union rejected tax relief and financial incentives for producers.
"The high price of natural gas should be incentive enough to increase drilling and exploration," she said, adding that consumers are the ones who need relief.
While there's plenty of gas in Texas, there aren't enough rig workers, geologists or petroleum engineers to collect it, Williams said. Workers left the industry during the decline when there was little work.
That kind of shortage of manpower and lack of confidence in the industry is keeping many producers from venturing out and drilling new wells, said Railroad Commissioner Charles Matthews.
Matthews said he wasn't sure if the state can afford to give consumers a break on taxes, but he said the commission will present the Legislature with its final recommendations in March.
Mike Reissig, director of fiscal management for the comptroller, said one way to pay for the tax cuts would be to dip into the Legislature's rainy day fund, reserved for hard times.
The option is open, he said, because increases in the natural gas tax are expected to pour $904 million into the fund during this and the next biennium.
According to the state's largest electric company, TXU Electric, the average residential utility bill in December increased by 140 percent compared to last year, while usage increased by 92.5 percent.

Council agrees to assist county landscaping plan

Staff Writer

PECOS, Thursday, February 8 - The Town of Pecos City Council approved assisting Reeves County in the first phase of the master plan for landscaping parts of Pecos, during their regular meeting this morning at City Hall.
Reeves County Judge Jimmy Galindo requested assistance from the city in providing water taps at the intersection of Interstate 20 and U.S. 285 on the south side of Pecos.
The county has been working for several years on numerous landscaping projects that includes improving the areas around the interstate and a hike and constructing a bike trail. It will also include planting trees being cultivated at the Reeves County Detention Center.
Galindo explained that the first phase of the plan would be the area around the I-20 intersection and would include various plants and rocks resembling the West Texas landscape and the historic West of the Pecos Rodeo.
"We're really beginning to build around the western theme of the community," Galindo said.
The county has been working with landscape designer Peter Mora, who is originally from Pecos.
"We are very fortunate to have Mr. Mora back in town," Galindo said.
Landscaping work is set to begin as soon as possible with plans to plant pine trees purchased with money saved by the Reeves County Commissioners from their own travel funds.
Galindo said that the pine trees need to be in the ground by the end of this month and as soon as they are the watering would begin.
Mora explained to the Council that they would use a drip irrigation system in order to save water.
"We don't have any sprinklers designed at this time," he said.
Mora continued to explain that for the next few years they would water the plants about every two to three days until the plants are able to take root.
"Mainly for the first two years to get the plants established," he said.
In order to do that the county would need to use about 713 gallons of water a day until the watering is cut back after the plants take root, according to Mora.
"We're looking at about 18,000 gallons a year for two years," he said. "Then it would significantly drop after that."
Councilman Johnny Terrazas asked Galindo what would be done about the existing state of Texas rock design, built by junior high students on the eastside of the U.S. 285 overpass several years ago.
Galindo explained that the county asked Mora to design around that existing rock formation and work it into the new landscape.
Galindo told the Council that construction of the landscape would move fairly fast once started.
"I think over the next couple of weeks we'll see some considerable movement on this project," he said.
In other action today, the council received some information from City Manager Carlos Yerena about a possible contract with F.I.R.E. Inc., to collect money for the Pecos Volunteer Fire Department's services.
Yerena explained to the Council that F.I.R.E. Inc., is a private company that acts as a collection agency for numerous fire departments.
He recommended that the council consider signing a contract with the company which would allow F.I.R.E. to bill non-residential locations in the city and county for services provided by the fire department.
Yerena also suggested not billing the people themselves but billing the insurance agencies.
"We would be looking at the individual's insurance agency, not the individual itself," he said.
Originally Yerena suggested not billing residence of the city of Pecos.
Galindo asked the Council to reconsider that and include the county residence as well due to the fact that the county also funds the fire department.
"Considerations should be given to county residence because the county does contribute to the fire department," he said.
Yerena said that the contract would be for one year in which the company would bill. F.I.R.E. would receive 10 percent of the total collected for the city and county.
He also said that they would ask the company to try to collect for services given out this past year. The charge would go up slightly to 35 percent of all money coming into the city.
The billing would only go to vehicle accidents along the roadways in the city and county.
Fire Chief Roy Pena informed the Council that in the past five years the PVFD has responded to a total of 1,162 vehicle calls with 254 of them in the county and 62 in the city.
Pena said the billing has not been determined at this time because each call is different and would depend on how many firemen and fire trucks responded.
Yerena said that during the year of the contract with F.I.R.E. Inc., the PVFD staff would be learning the process of the billing and collecting in order to take over the services after the contract is up.
"It is a learning process through them," Pena said. "Once we get an understanding of the process I think the city wants us to take over."
All the money generated through the billing and collecting of services would go to the city's general fund, according to Mayor Ray Ortega.
The council approved Yerena's recommendation to sign a contract with F.I.R.E. Inc.
They also approved an ordinance that would allow the city to enforce building, electrical, plumbing and fire codes within the city's extraterritorial jurisdiction of a one-mile radius of the Pecos City limits.
"I think it's important for us to be up to standard," Yerena said.
City Attorney Scott Johnson informed the council that the city already has the ability to enforce the codes within that space.
"This just reinforces what is already law," he said.
The ordinance gives the city the control to enforce those codes within the city and that one-mile radius whether or not the land is part of the city limits or not.
"It's going to effect a lot of people," Councilman Ricky Herrera said.
Johnson said that the ordinance would help the community by having everyone up to code in case of any future annexation.
"If we do that, by they time we annex them they'll already be up to code," he said.
Herrera said that because this ordinance would affect so many people he would like to wait before any final action is taken.
"I'd like to get more input from the community," he said.
Council members approved the first reading of the ordinance and would not give final approval until the next regular meeting.
The council then approved an annexation policy that would require any new applicants for hook ups to the city water and electrical to sign a letter of consent to be annexed by the city.
Yerena explained that if any applicants did not want to sign the letter they would not be allowed hook-ups with the city's water and electrical system.
"It would only be for new applications," he said including business and residential applications.
In other business the council approved minutes from their last regular meeting on January 25 and the accounts payable.

Pecos LL tryouts set for Saturday

PECOS, Thursday, February 8 - Pecos Little League tryouts and sign-ups will be held this Saturday at the old Pecos High School gym from from 10 a.m. to 2 p.m., according to Lee Serrano of the Pecos Little League. Registration fee will be $15 per player and $20 per family.
A meeting also has been scheduled for all Little League, Junior League and Senior League coaches this Monday at 7 p.m. at Saragosa Hall 7 p.m. Serrano said the league is in need of more coaches for the 2001 season, and anyone interested in helping out this season is urged to attend the meeting.

Lions' Club seeks camp applicants

PECOS, Thursday, February 8 - The Pecos Downtown Lions Club is looking for children interested in attending Texas Lions Camp in Kerrville.
The Texas Lions Camp is a summer camping facility dedicated to serving children from the state of Texas who have physical disabilities and Type I diabetes. Programs at the Texas Lions Club are designed to help children make social adjustments, become more self-confident and develop a positive self-image.
Camping sessions begin early June for children with physical disabilities ages 7-16 and for children who have diabetes ages 8-15. Camp is free for eligible children.
For more information, contact Lions Club member Tom Rivera at 445-2406.


Maria Contreras


PECOS, Thursday, February 8 - High Wednesday 82. Low this morning 57. Forecast for tonight: Decreasing clouds and breezy. Low near 35. West wind 15 to 25 mph and gusty. Friday: Mostly sunny. High in the mid 50s. Light wind. Friday night: Partly cloudy. Low in the mid 20s. Saturday: Mostly sunny. High 55 to 65. Sunday: Partly cloudy. Lows 35 to 40. Highs in the 60s to lower 70s.

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