City says Austin Energy’s budget reflects needs

All Austin Energy customers will see a small increase in their electric bills this fall – about $1.04 a month for the typical residential customer. According to the utility, its residential bills are still among the lowest in the state.

However, Austin Energy is facing a number of challenges, and several recently were addressed by the Electric Utility Commission, which offers advice to City Council and the utility. At the top of that list: making sure that the budget includes sufficient funds for tree trimming in upcoming years.

Customers who suffered through Winter Storm Mara, which brought down many trees, branches and utility lines in January and February, are hoping not to go through an experience like that again. In an April report to Council, Stuart Reilly, then serving as Austin Energy’s interim general manager, said the utility would be “looking into opportunities to upgrade and repair its vegetation management infrastructure with a focus on resiliency.”

Electric Utility Commissioner Cyrus Reed told the Austin Monitor, “Given what happened in Mara … at least some of those problems were a result of not putting enough money into vegetation management.”

Reed said the utility has allocated about $20 million for tree trimming in the upcoming year, adding, “We want to make sure they go forward with the plan to manage it within the next four years. We want to make sure we’re keeping trees away from lines.” (As a utility spokesperson noted, the budget for upcoming years has yet to be decided.)

Also, Austin Energy continues to be an important source of funding for the city’s General Fund. The utility plans to increase transfers in the coming year by about $4 million, bringing the total transfer to $178 million. The utility’s leaders have been particularly concerned about its low level of cash reserves. The Fiscal Year 2023-24 budget will add $20 million to those reserves, and the utility says it can fully fund reserves by 2026.

Council Member Leslie Pool, who chairs Council’s Austin Energy committee, told the Monitor via text that she believes Reilly when he says that the utility’s reserves are continuing to be restored.

“(Austin Energy’s) budget met my expectations,” she said, adding that there’s “still work to do, but the rates we approved last year and the process identified is holding up to what I hoped/expected (in regard to) collections.”

Pool noted that there are still some unknowns, including the stability of grid operations, “but we’ve weathered the harsh hot weather this summer so far, and every day we’re closer to fall and – I hope! – drops in temp, and increases in humidity.”

Utility commissioners also urged Council to ensure sufficient money in the budget to increase the number of participants in the Customer Assistance Program to 90 percent of those eligible by FY 2025. Austin Energy has been working to increase the number of participants for some time.

Consumer advocate Paul Robbins told Council last week – as he has in the past – that some people are receiving benefits from the program in error. He urged Council to audit the program.

Members of the Electric Utility Commission said Austin Energy also should ensure sufficient money is allocated to demand-side and energy-efficiency programs to meet its annual 1 percent savings goal, as well as contribute to an overall goal to reduce demand. An Austin Energy spokesperson said the utility will continue with sufficient funding and staff to achieve the city’s 2030 goals from the Resource, Generation and Climate Protection Plan.

In addition, commissioners also urged Council to carefully monitor and evaluate any cost of joint projects, especially the Fayette coal plant, and consider cost reductions, especially in light of an upcoming review of the resource plan and reduced use of the plant. Although commissioners wanted to hear that Council would be asked to approve any individual expenditures exceeding $100,000, utility officials said such an arrangement wouldn’t be consistent with existing agreements.

Commissioners also encouraged the city manager and Austin Energy to take advantage of federal funding opportunities to increase investments in energy efficiency, weatherization assistance, resilient grid projects, renewable energy and electric vehicle charging infrastructure.

The utility responded that it would continue to work internally and with other city departments to identify and prioritize such funding opportunities, as far as the resources needed to apply for and maintain grant obligations allow.

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