Austin Energy customers can expect (another) increase on their electricity bills next year

Eight months, more than 260 document filings and countless hours of grueling negotiations later, Austin Energy has new electricity rates.

If you’re a customer of the public utility, your bill is going up.

The plan, which Austin City Council passed on a 7-4 vote Thursday, raises electricity rates overall and increases a flat-rate monthly charge from $10 to $13. The charge will increase to $14 in 2024 and $15 the following year. That’s a win for customer advocates, who pushed back against a previous plan to hike that charge up to $25 all at once.

The rates, which take effect in March, will increase customers’ bills by roughly $9 a month. That’s on top of another $15 monthly increase that took effect earlier this year.

The rate structure’s passage comes after a frenzied few weeks ahead of an end-of-year deadline. City staffers, the utility and customer advocates worked on a compromise to avoid unfairly impacting low-income customers while largely addressing a more than $30 million gap in the utility’s revenue.

Austin Energy previously said it needed a new rate structure to make up a roughly $36 million gap in revenue. After pushback from customer advocates, it lowered that gap to $31 million last week and then to $29.5 million on Thursday.

The utility needs that money to pay debts on plants and infrastructure – and avoid a credit downgrade. It argues it loses money providing electricity to low-usage customers.

Ahead of the vote, Austin Energy General Manager Jackie Sargent said the utility was amenable to the plan.

“We will do our best to manage that,” she said. “I think that it is something we can work through and manage.”

The city and the public utility review rates at least every four years, and the process allows for attorneys, energy industry folks and large-scale commercial customers to weigh in on the back-and-forth.

The increase comes amid record inflation and just weeks after the utility raised another fee for customers up to $15 on average. The utility argued the increase was needed in part because last year’s winter freeze meant it took on costs from failed power plants in Texas’ unregulated energy market. On top of that, higher natural gas prices cut into the utility’s revenues.

The plan also increases the utility’s assistance program for people who can’t afford to pay their bills.

While Council Member Vanessa Fuentes said she supported expanding that program, she pointed out it’s underused: Austin Energy found 1 out of 4 people who qualify for it aren’t enrolled. Fuentes said she hoped the utility would better connect with people who need help.

Fuentes voted against the new rate structure, along with Council members Kathie Tovo, Alison Alter and Ann Kitchen.

This is a developing story. It will be updated.

This story was produced as part of the Austin Monitor’s reporting partnership with KUT.

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