Representatives from Austin Energy met with the City Council today to discuss a 12.5 percent rate and fee increase to be implemented in April of next year. Much of the discussion centered on how churches and schools will pay for the rate increase.
"We understand the concern by the school districts. We understand that they have options electrically to fix it. And we're going to work with the school districts with our key accounts to see if we can overcome that," Austin Energy's general manager Larry Weiss said at the meeting.
"But, right now, the way the rates stand, is that the school districts would have to do something electrically to change the type of service that they have to address that," he said.
The Austin Independent School District estimates the proposed rate hike would cost it about $3 million per year. Austin Energy is proposing a 10 percent discount for school districts.
Consumer advocates say Austin Energy's proposal to increase fixed charges will disproportionately affect senior citizens, students and others living on lower incomes. A customer charge of $6 that appears on your bill would jump to $12, and an additional $10 "delivery charge" would be added to residential bills.
"Getting the rates right is critical to assuring that people can afford to live in this city and will continue to move here," Public Citizen's Tom "Smitty" Smith said in a blog post. Public Citizen listed five reasons why they believe Austin's Energy's rate hikes are flawed:
- They haven’t proven they need this much of a rate increase;
- The proposed rates overcharge residential consumers almost 20% more than previous methods of allocating costs;
- The proposed rates continue to be a corporate welfare program that subsidizes large industrial consumers and places the burden on average customers;
- The proposed rates are unfair to low income users; and
- The proposed rates discourage conservation and renewable energy use.
Austin Energy wrote on its blog that its rates are among the lowest in Texas, and points to its projected $75 million deficit this year as evidence of a need to charge more for fixed costs.
The City Council will consider a January 12 public forum on the rate increase at tomorrow's council meeting.