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Austin Energy outlines details of proposed rate hikes

Tuesday, August 30, 2011 by Bill McCann

Saying that Austin Energy needs its first increase in base rates in 17 years to recover its costs, utility officials yesterday released a report proposing rates that would increase the bills of AE’ s typical residential customers by about 11 percent and smaller users by about 70 percent.


Under the recommended rates, a residential customer using 250 kilowatt-hours a month would see a 71 percent increase, from $23.37 to $39.97 a month, according to the report. A customer using 1,000 kilowatt-hours monthly would see an 11 percent increase, from $92.33 to $102.21.


Residential customers using 2,500 kilowatt-hours a month would see an increase of 17 percent, from $247.10 to $289.53. And customers using 4,000 kilowatt-hours a month would face a 24 percent increase, from $401.86 to $496.35.


In general, the proposed rate package follows through on what Austin Energy officials months ago said they planned to do:


·       consolidate customer classes from 24 to 9;

·       break down, or unbundle, residential rates into several specific charges – customer, electric delivery, energy, regulatory, community benefits and energy adjustment charges;

·       increase the customer charge from $6 to $15 on each residential bill;

·       add a $10 electric delivery charge to monthly bills;

·       add a fee in the community benefit charge to create a pool of funds to assist low-income customers who cannot afford to pay their bills; and

·       replace the current two-tier residential rate structure with five-tier structure, with rates increasingly higher as usage increases.


The recommended rates are in line with preliminary numbers that Austin Energy officials presented to the advisory Electric Utility Commission in July (See In Fact Daily, July 19, 2011).


In addition to its recommended rates for residential customers, the report includes three other rate options for consideration.  All three options would impose somewhat lower rate increases for residential customers than the ones that are proposed.


Residential customers, who currently pay an average of about 9.5 cents per kilowatt-hour, would pay 11.85 cents under the recommended rates, according to the rate report. Commercial customers would see an increase from an average 8.6 cents per kilowatt-hour to 8.94 cents, and industrial customers an increase from an average 5.89 cents a kilowatt-hour to 6.65 cents. 


When compared to rates of other public and private utilities in Texas, the proposed Austin Energy rates would keep its residential, commercial and industrial customers at the mid to low price range, the report shows.


The report, which contains a detailed rate analysis and recommendations, was posted late yesterday ( In addition to posting a full Rate Analysis and Recommendations Report and a Summary Report, Austin Energy posted a Report from the Residential Rate Advisor, a Decision Point List for the Public Review Process, and Guidelines for Public Information Requests and Additional Questions.


The rate analysis and recommendations will be submitted formally to the Electric Utility Commission at a special commission meeting at 6pm Thursday. The commission will take public comment on Thursday and at meetings on Sept. 19, Oct. 3, and Oct. 17, before making recommendations to the Austin City Council. The Council is expected to take final action on the rates in late 2011 or early 2012, with new rates to go into effect in 2012.

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