Austin Energy rate case moving slowly at Council

During Tuesday’s work session, most members of City Council seemed poised to agree that Austin Energy should have an additional $31.3 million in revenue and that the customer service charge should be around $12 or $13 a month instead of the originally proposed $25 per month. They also seemed to agree that there should be four residential rate tiers and that the utility should strive to add more low-income customers to the Customer Assistance Program. That was the case at noon on Tuesday when Mayor Steve Adler turned over the meeting to Mayor Pro Tem Alison Alter.

It was important for the utility to know exactly what numbers it was expected to use while drawing up ordinances for Council to approve Thursday.

By 5 p.m., however, Council members Kathie Tovo, Ann Kitchen and Vanessa Fuentes were insisting that they did not agree with the revenue request and would prefer to see information on the impact of lowering those numbers. In particular, they asked for data on the impact of lowering the revenue increase to between $25 million and $27 million.

Council Member Leslie Pool, who chairs the Austin Energy Utility Oversight Committee, is a strong proponent of AE’s revenue request at $31.3 million and a General Fund transfer amount limited to $115 million.

She said in a memo to her colleagues, “These revenue requirements were vetted by the impartial hearing examiner, an industry expert. I want to make sure that any proposals we put forth do not kick the can down the road on Austin Energy’s revenue gap issue, leaving it for future councils to deal with. We are responsible for ensuring that our public utility, a nonprofit, is financially stable for years to come.”

Following Tuesday’s meeting, Pool posted a memo on the City Council Message Board from Austin Energy’s outside counsel, Thomas Brocato. She wrote that she had asked Austin Energy to run a scenario with a $13 customer charge. “I am still proposing a gradual customer charge for three years, but with a $13 a month starting point,” she said.

One scenario would increase the customer charge by $1 each year up to $15 or starting at $14, up to $16.

The proposal from Pool assumes four tiers of customers based on usage. In one scenario, the two highest-using tiers of customers would face significantly increased rates in order to encourage conservation. Any increased revenue will benefit customers outside the city as well as Austin Energy’s Customer Assistance Program, she wrote.

After Kitchen insisted that Council be able to see the results of the other lower-revenue scenarios, Pool said the utility had “limited ability” to bring back information on the suggestions from Council members.

That being the case, Pool said Council needs to look at having a special called meeting next week.

This Thursday is the final regularly scheduled meeting this year. However, Council members Mackenzie Kelly and Chito Vela both indicated that they would be willing to attend the meeting next week. Kelly said she was concerned about the public being able to weigh in on the new proposals. Council Member Paige Ellis was absent from Tuesday’s work session.

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