What’s Changed in Austin Energy’s New Rate Proposals?

Feb 2, 2012

Austin Energy (AE) has faced a live wire of criticism regarding new proposed electric rates. This afternoon, AE manager Larry Weiss presented changes to rate proposals to the City Council. How do they stack up against what the utility previously proposed? We’ve tallied four major changes.

1. The first 200 killowatt hours (kWh) are built into the flat charge: AE demurred on changing its proposal for $22 in flat monthly fees ($12 customer charge plus a $10 electric delivery charge). However, the first 200 kWh are included in that $12 customer charge.

2. The increases will be phased in over “two steps:” The first phase would begin this fiscal year, in September. It would carry an 8.7 percent overall increase. The second phase would kick in October 2014, comprising an additional 3.8  percent. Taken together, they would create $126 million in new revenue for the utility, but rebuild its reserves at a slower rate.

3. A 6.1 percent discount for customers outside the city: Ratepayers outside of Austin (including politicians like state Rep. Paul Workman) have argued that since they don’t enjoy all the city’s services – paid for in part by transfers to the city budget from Austin Energy – they shouldn’t have to pay the same increase as people living in Austin proper.

The utility seems to agree. It has proposed capping its transfer at $105 million (which is what it was last year), and cutting the transfer of funds AE users outside the city pay to the budget by 6.1 percent, savings which would then be reflected on their bills.

4. Cuts for small businesses and churches: The delivery charge could be removed for this class of customer, and time-of-use charges churches protested (that might charge more on Sundays, for instance) could be made optional.

You can view a slide presentation detailing AE's revised proposals here