Under Austin Energy’s proposed budget for the 2025-2026 year, utility customers will, on average, see a drop in their monthly bill of $4.89. Low income customers on the Customer Assistance Program, also known as CAP, will see a $7 decrease on average.
After hearing a briefing on the utility’s plan for increasing revenue while lowering customers’ bills, members of the Electric Utility Commission on Monday declined to adopt a resolution opposing Austin Energy’s proposed increase in the monthly fee paid by most customers.
With approval from City Council, that fee, which is currently $15 per month, would go up to $16.20 per month. Electric Utility Commission (EUC) members Cyrus Reed and Kaiba White proposed a resolution to keep the current monthly fee at $15 but charge more based on electricity use. They argued raising the price of electricity by how much is used is the best way to reduce energy usage.
But the utility sees raising the monthly fee as the best way to stabilize revenues. The low income customers who are part of the CAP program do not pay the monthly fee, so changes to that charge will not impact them.
Austin Energy Chief Financial Officer Rusty Maenius explained to commissioners that “2019 was the last time we had revenue adequacy. In 2020, Covid happened.” During the height of the pandemic, the utility reduced rates and put a moratorium on cutoffs. At that point, he said, Austin Energy began living off its savings. Most of the utility’s costs are fixed, he explained, notably including salaries, maintenance of power plants and equipment, new poles and lines,
Chief Operating Officer and Deputy General Manager Lisa Martin told the commission that even with the proposed increase in the monthly fee, the utility will still be $43 million short in 2026. Austin Energy’s costs will continue to climb but the utility is trying to reduce customer costs, she said. She noted that Austin Energy has the lowest rates of any utility in the area.
“The Electric Utility Commission understands the need to increase rates to make up for a budget shortfall in FY 2026, but recommends that the monthly Customer Charge for residential customers remains at $15 per month until the conclusion of the next rate case,” states the resolution from Reed and White. “Any additional revenues that the Austin City Council believes are critical to collect from customers without the benefit of a full rate case should be levied from volumetric rates. This will preserve the important incentive to conserve energy and will protect lower-income customers who aren’t eligible for Customer Assistance Program (CAP) discounts from inequitable increases. Furthermore, the Austin City Council should consider scheduling Austin Energy rate cases more frequently than once every five years to better keep Austin Energy budgets aligned with costs.”
White argued that Austin Energy should hold another rate case in three years. However, no other commissioner said they agreed with that idea. Commissioner Al Braden said the utility was working very hard to help CAP customers. “A rate case is a ginormously complex,” he said, adding that he would question whether it should be done more frequently.
A majority of commissioners voted no on the resolution. Only Commissioner Raul Alvarez joined White and Reed in supporting their proposal.
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