Yesterday, the Austin City Council unanimously came out in favor of what is called a moderate plan for increasing Austin Energy electric rates – and against a potential discount to customers outside the city limits.
The proposal would see an overall increase of seven percent, spaced over five years – an effort to “spread the pain” of rising rates, as council member Bill Spelman put it.
“At this point it feels like it’s a little bit more an art than a science,” council member Laura Morrison said before council voted to adopt the moderate plan over other proposals. “And since we don’t have any one single, definitive reason to go in another direction. There’s so many different things that we’re trying to juggle.”
“It seems to make sense to go with the moderate, although we do need to remember that the only thing in the middle of the road is a dead armadillo,” Morrison joked.
Increases would be broken out into five tiers, charging a higher rate for more electricity used. The base rate of the new plan is 3.5 cents with a cap of 11.4 cents. The council had previously approved a set $10 monthly fee for energy customers.
“The purpose of tiered rates is to incentivize energy efficiency and to also reflect the lack of charging demand to residential customers,” Austin Energy CEO Larry Weiss told the council.
Council also unanimously agreed not to offer an energy discount to customers who don’t live within the city limits. Some people outside Austin have argued that they should pay a discounted rate because the utility transfers over $100 million every year to the city General Fund that pays for parks, libraries, public safety and other city services.
The city council could take a final vote to adopt the new rate structure as soon as June 7.