When the Gas Stops

One Texas town found the bills so high that it quit paying them

What would happen if the price of natural gas were to be deregulated? That question sums up public concern in much of the country. But no price controls exist for millions of consumers in major gas-producing states, such as Texas, Louisiana, Oklahoma, New Mexico, .Wyoming, California and Kansas. Of the 20 trillion cu. ft. of natural gas used each year in the U.S., roughly one-third is not subject to federal controls, since it is both produced and consumed within a single state's borders. This unregulated, intrastate gas now sells generally for as much as $2 to $2.25 per 1,000 cu. ft., v. the Government-fixed rate of $1.47 for gas that flows across state lines.

For those intrastate consumers who are paying much more than their interstate brethren and have seen prices escalate drastically, gas bills are an irritating burden. For at least a few, the costs have become intolerable. This is one reason why, during last winter's gas shortage in the North, Southerners flaunted bumper stickers reading: LET THE YANKEE BASTARDS FREEZE. The town of Crystal City, Texas, is not a typical case--but it is an instructive one. For more than two weeks, the 8,000 citizens of Crystal City have been doing without natural gas. It was cut off after the town refused to pay its supplier, the Lo-Vaca Gathering Co., $800,000 in back bills.

Life in Crystal City has not been severely disrupted. The mostly Mexican-American population continues to work in the fields and the cannery; no businesses have shut down. Many people are taking cold showers or heating water in pans. They are cooking with firewood and butane and on hot plates, though some complain that tortillas do not taste as good cooked on electric skillets as they do on iron ones heated by gas. Civic organizations are sponoring free cookouts for people who cannot fend for themselves. But when cold weather arrives, Crystal City will be in more serious trouble, because most of its homes are heated by natural gas. "Deregulation leads to rapacious attacks on the consumer," protests Mayor Francisco Benavides. "Other towns will face problems similar to Crystal City's if gas is deregulated."

So far, many communities in south Texas, though just as hard hit, have been able to scrape by without having their gas turned off. But the hardships have been real. With the cost of exploration rising, producers have hiked prices for most consumers from 36-c- per 1,000 cu. ft. in 1972 to more than six times that amount today. For an average family, that means a bill running anywhere from $40 to $70 higher per month. Many people have had to move to smaller houses, others double up with relatives. Farmers have curtailed planting--gas is needed for irrigation pumps.

San Antonio was rudely awakened from what city officials referred to as a "cheap energy drunk." Curtailments of gas forced the city to adopt emergency conservation measures, including converting the city's electrical power generators to higher-cost fuel oil and reducing street lighting. For the past five years, an average of 156 people a day have telephoned or visited the city utility offices asking for some kind of relief or further credit or, at least, that their gas not be shut off.

Several city utility companies, including those in Austin, San Antonio and a number of small towns near Crystal City, refused to pay the increases to the producer and went to court to seek reductions. The utility companies continued to charge their customers the full rate, but they put the difference between the lower and higher rates in escrow accounts until the courts ruled on the matter.

Crystal City took more provocative action. In 1972 its city council voted unanimously to keep charging its customers 34-c- per 1,000 cu. ft. The town fathers contended that they had no choice, since more than 67% of the residents are below the poverty level. But the decision was also in keeping with the town's combative political reputation. The birthplace of the militant Mexican-American La Raza Unida (the United Race) Party, Crystal City has stressed racial solidarity at the expense of economic growth. As taxes soared, businesses have fled.

When Crystal City refused to pay the higher rates, Lo-Vaca terminated its contract and filed suit for payment. During the 30 months that the case was being decided, the town continued to get gas without paying for it. Last June the court ordered it to pay up. Insisted Lo-Vaca Attorney Joseph Jaworski (son of Leon, of Watergate and now Koreagate fame): "It's time to stop this legal circus. Other customers of Lo-Vaca want to know why they should have to pay full price for gas and Crystal City doesn't."

At one point Mayor Benavides got the federal Community Services Administration to promise financial assistance, but the agency reneged after other hard-pressed Texas towns flooded it with similar requests for funds. Lo-Vaca has offered to consider turning the gas back on if Crystal City would make a 20% down payment on what it owes. But city officials claim they do not have that much in the treasury. Meanwhile, Crystal City does not burn gas.

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