Gas sale referendum returns in Dilley

By Breyana Segura - Chief Staff Writer | June 24, 2026

Aging utility system suffering massive losses, faces state pressure to upgrade

Plagued with strict state regulations, persistent financial losses and compliance violations, the city of Dilley will once again ask voters this November to decide whether to sell its aging municipal gas system.

The decision follows a unanimous push by the city leadership to separate from the utility, coming just a year after local residents voted to keep the municipal utility.

In May 2025, a narrow margin of 165 to 153 voters rejected a ballot proposal to sell the system.

However, facing mounting regulatory pressure, councilors learned on June 9 that they could place the issue back on the ballot for the upcoming November 3 general election.

Earlier this year, Simon Pena, independent consultant, highlighted the system’s deep financial challenges.

According to Pena, the 60-year-old system consists of 24 miles of gas pipeline and has 313 accounts. The city currently purchases natural gas from West Texas Gas Company.

Pena’s records show the utility lost nearly $30,000 during the 2018-19 and 2019-20 fiscal years.

While the system nearly broke even in 2022-23 – bringing in $268,854 against $268,652 in expenditures – it suffered a massive deficit the previous year, logging $197,450 in revenue against $307,308 in expenses.

“The current gas loss and unaccounted for rate is 7.9 percent,” Pena noted in his presentation, adding that any loss over 10 percent is an area of concern for the Texas Railroad Commission (RRC).

During the June 9 council meeting, Moran reminded councilors of Pena’s presentation.

“We do not have the customer base, we are losing funds, and we are also having to comply with these audit findings,” City Administrator Yolanda Moran told councilors.

Councilor Eric Aranda echoed Moran’s position.

“It is not smart business if we keep it,” Aranda said.

Beyond the financial strain, the city is under the microscope for failing to meet strict state mandates imposed by the RRC. Under RRC rules, the city is required to replace eight percent of the 24 miles of infrastructure annually.

Moran told councilors city staff recently submitted a corrective action plan to the RRC.

The city administrator told councilors in June that the state agency had accepted the city’s structural turnaround strategy.

The final pending hurdle is a mandatory public awareness plan, and councilors approved the funding in May to beat a strict June 11 deadline.

Moran said that while the city currently owns the infrastructure, operating it at a significant loss places an unfair burden on taxpayers.

“The agency has strict regulations,” the city administrator said. “If we do not stay on top of things, we get letters of violations and face potential fines.”

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