Austin Energy ramps up outreach for proposed rate changes

Austin Energy has entered the public hearing phase of its base rate review process, following its proposal to raise service costs. The monthslong dialogue with stakeholders and city staff, slated for resolution by City Council in November, has surfaced predictable conflicts over the price hike.

Released late April, Austin Energy’s proposal includes an overall base rate increase of 7.6 percent designed to recover the $48 million gap in revenue calculated from Fiscal Year 2021. Last Monday, members of the Electric Utility Commission voiced concerns that the increase could prove a significant burden to lower-income customers already struggling to afford the city’s increasing cost of living.

“The timing for a rate increase could not be worse,” Commissioner Randall Chapman said.

The proposal marks the second time Austin Energy has changed service costs since 1994, with the last update dating back nearly 10 years to 2013. The utility provider says that increasing costs of labor and equipment and shifting consumption patterns have resulted in a revenue gap that could negatively impact bond ratings if not addressed. 

Among the proposed changes is a shakeup of the five-tier classification structure into a three-tier system to more accurately reflect service costs, as well as a jump in the general customer charge fee from $10 to $25. Austin Energy predicts the average consumer will see an increase of roughly $15.56 per bill cycle as a result. Still, the proposal’s critics have noted that the rate change would disproportionately impact those who consume the least energy at a time when the cost of living has risen sharply in the city.

Acknowledging these concerns, the EUC’s budget and audit working group developed a number of recommendations for consideration. While several were scrapped due to a lack of votes, the commission unanimously approved a recommendation to ensure that the independent hearing examiner, who is scheduled to make a third-party ruling on Aug. 31, will read all publicly submitted comments as part of the decision process (there are 300 so far).

The commission will also take up a proposal at its next meeting that would invite the multitude of stakeholders, including the Sierra Club, Homeowners United for Rate Fairness, Coalition for Clean Affordable and Reliable Energy, and an independent consumer advocate, to testify before it makes its own recommendations to City Council this fall. 

Lastly, the commission proposed a number of measures that would reevaluate how the costs of infrastructure growth are allocated, suggesting that the burden on consumers could be lessened if developers responsible for expanded infrastructure needs were held more accountable. 

“Is it not true that in the world of transportation or water and wastewater, we put impact fees for developers all the time for the growth that’s coming?” Chapman asked. 

Ultimately commissioners elected to table the discussion, opting to engage in a separate dialogue with Council about future base rate review procedures. For now, Austin Energy will continue gathering community feedback via SpeakUp Austin until July 1, and will make its rebuttal publicly available July 8. From there, an independent hearing examiner will evaluate both sides and make its recommendations available to City Council, which will host a public hearing on Nov. 17.

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