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THE TEXAS OBSERVER. The Texas Observer Publishing Co. 1971 ‘Ronnie Dugger, Publisher A window to the South A journal of free voices Vol. LXIII, No. 8 Apr. 23, 1971 Incorporating the State Observer and the East Texas Democrat, which in turn incorporated the Austin ForumAdvocate. Editorial and Business Offices: The Texas Observer, 504 West 24th St., Austin, Texas 78705. Telephone 477-0746. MCEPOV It becomes clearer now Lverdad? Coastal States won the contract with the city of Austin both because they offered long-term fixed prices and because they entered into an agreement not to try to get those prices changed by any governmental agency. They are currently engaged in trying to get those fixed prices changed through a governmental agency, to wit, the Railroad Commission via the Texas Legislature. On Oct. 21, 1963, Coastal States assigned and conveyed all rights, title and interest in its Austin contract to Lo-Vaca Gathering Co., a Coastal States subsidiary. On March 24, 1969, the 1962 contract was extended for another 15 years, so that the current contract runs through 1999. Ah, but that’s just Austin. In Corpus Christi the Lo-Vaca contract runs to 1986. The situation there is gooped up by an oddity of a distribution system the city itself owns two-thirds of its gas distribution system and the other third is owned by a private, non-profit corporation, which was set up by the city to acquire private franchises and which will revert to the city when its debt has been paid off. Corpus Christi is also the hometown of Oscar S. Wyatt, Jr. Oscar S. Wyatt, Jr., is the chairman of the board and the president of Coastal States. Oscar S. Wyatt, Jr., is also very active indeed in city politics in Corpus Christi. In San Antonio, same story; Coastal States is locked into a long-term, low fixed-price contract with the all-municipal distributing system there. Coastal States also serves 74 other smaller cities and towns in south Texas. REP. CARL Parker introduced a version of the bill which did not include the specific reference to municipalities. Carl Parker, incidentally, is a cousin of some degree more remote than first, he’s not quite clear on the degree of kinship to Oscar S. Wyatt, Jr. Parker told the Observer that he did not talk to his cousin before introducing his bill, although he assumes his cousin favored it. Will Ehrle, registered lobbyist for Coastal States, said, “I did discuss the bill with Carl, I actually did prepare that bill, but I had no contact prior to the time when their bills were introduced. I can think of no contact other than indirectly, that preliminary drafts of my bill might have found their way into their hands.” Parker said that it was possible that a jaundiced observer might regard the bills as special interest legislation from Coastal States’ point of view, but that it is equally valid to look at them as the only realistically feasible way of getting gas pipeline regulation through the Legislature. Besides, he added, there’s no guarantee that the Railroad Commission would break the contracts even if the bills were passed and no guarantee that the commission would give the company a break. A nervous-sounding Corpus Christi city official to whom the Observer talked echoed Parker’s contention. “Just because the Railroad Commission takes jurisdiction doesn’t mean rates get changed,” he said. And again later, “Nobody’s implied that Coastal States will try to change these contracts.” No? Well, Business Weekly, which is not one of your flaming radical publications, is pressing in Austin for legislation that would force the Texas Railroad Commission to review cases where a wholesaler such as Coastal States is seeking higher prices from a city utility. The commission, one of whose concerns is the health of the Texas oil and gas industry, could be expected to favor the intrastate wholesaler.” Coastal States is an intrastate. wholesaler. What kind of money is involved here? Don Butler, Austin city attorney, told the Observer that when he originally had the city staff sit down and try to figure out the cost of a likely contract increase dictated by the Railroad Commission \(assuming the they appalled him. “I thought, God, no one will ever believe that, I’d better revise it down or people will think it’s phony scare talk.” His conservative estimate is $200 million over the life of the contract. He figured that every one cent increase per MCF 4 would cost the people $17 million and included anticipated increases in kilowatt usage according to population projections. But Marvin Townsend, Corpus Christi city manager \(who is not the inclined to back down on his earlier p ., estimate of the cost of Commission-dictated contract. “I figured between $15 and $20 million over the life of the contract,” he said, “and that made big headlines when I got back from Austin. But I may have been high there. That could be a biased figure.” THE LEGAL arguments on the bill are interesting, with both sides claiming . EDITOR Kaye Northcott CO-EDITOR Molly Ivins EDITORS AT LARGE Elroy Bode, Ronnie Dugger, Bill Hamilton Contributing Editors: Bill. Bratruner, Gary Cartwright, Lee Clark, Sue Horn Estes, Joe Frantz, Larry Goodwyn, Harris Green, Bill Helmer, Dave Hickey, Franklin Jones, Lyman Jones, Larry L. King, Georgia Earnest Klipple, Larry Lee, Dave McNeely, Al Melinger, Robert L. Montgomery, Willie Morris, Bill Porterfield, James Presley, Charles Ramsdell, Buck Ramsey, John Rogers, Mary Beth Rogers, Roger Shattuck, Edwin Shrake, Dan Strawn, John P. Sullivan, Tom Sutherland, Charles Alan Wright. We will serve no group or party but will hew hard to the truth as we find it and the right as we see it. We are dedicated to the whole truth, to human values above all interests, to the rights of man as the foundation of democracy; we will take orders from none but our own conscience, and never will we overlook or misrepresent the truth to serve the interests of the powerful or cater to the ignoble in the human spirit. The editor has exclusive control over the editorial policies and contents of the Observer. None of the other people who are associated with the enterprise shares this responsibility with her. Writers are responsible for their own work, but not for anything they have not themselves written, and in publishing them the editor does not necessarily imply that she agrees with them, because this is a journal of free voices. GENERAL MANAGER C. R. Olofson OFFICE MANAGER Irene Wilkinson EMERITUS BUSINESS MANAGER Sarah Payne The Observer is published by Texas Observer Publishing Co., biweekly from Austin, Texas. Entered as second-class matter April 26, 1937, at the Post Office at Austin, Texas, under the Act of March 3, 1879. Second class postage paid at Austin, Texas. Single copy, 25c. One year, $7.00; two years, $13.00; three years, $18.00; plus, for Texas addresses, 41/4% sales tax. Foreign, except APO/FPO, 50c additional per year. Airmail, bulk orders, and group rates on request. Change of Address: Please givjold and new address, including zip codes, and allow two weeks. Form 3579 regarding undelivered copies: Send to Texas Observer, 504 W. 24th, Austin, Texas 78705.