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Austin Energy to dispute PUC staff view on revenue increase

Friday, February 22, 2013 by Michael Kanin

Austin Energy staff will respond today to testimony filed with the state Public Utility Commission critical of the utility’s 2012 rate increase. The response is expected to cover concerns raised by the Office of Public Utility Counsel as well as commission staff about fiscal conclusions made by the utility – and affirmed by Council members – that underlined a need for more revenue.

 

Last week, commission staff called for a $30 million reduction in the transfer that Austin Energy sends to the city’s general fund, and a $46 million overall subtraction from both the $1.12 billion revenue requirement and $105 million revenue increase requested by the utility (See In Fact Daily, Feb. 14, 2013).

 

That came on the heels of testimony filed by state consumer advocates at the Office of Public Utility Counsel that suggested the utility’s request was roughly $91 million over its needs. A reduction of $91 million would erase both stages of the two-prong rate increase approved by the Austin City Council last summer. (See In Fact Daily, February 12, 2013.)

 

When delivered, Austin Energy’s responses will be only the latest of nearly 400 documents filed in the case. These include basic legal documents, pages of detailed testimony from multiple parties, and confidential filings not available to the public.

 

There are currently five challenges to the Austin Energy rate increase. The first comes from the Homeowners United for Rate Fairness, called HURF, a collection of out-of-city ratepayers who filed the petition that officially began the rate challenge. The organization has been vocally opposed to Austin Energy rate increases throughout the entire process.

 

On Nov. 8, 2012, Data Foundry petitioned to intervene as another party in the case. The company, a data center, argued that it “has a justiciable interest that may be adversely affected by the outcome of this proceeding because it is a customer of Austin Energy, and the decision in this matter will impact the prices charged to Data Foundry.”

 

Data Foundry and the Office of Public Utility Counsel – the state consumer organization — were each granted status as intervenors on Nov. 13.

 

Austin Energy appealed the inclusion of Data Foundry. “The Commission has no jurisdiction over rates charged inside the City of Austin, and Data Foundry has not shown itself to be a ratepayer outside the City of Austin,” the utility argued.

 

The Office of Public Utility Counsel followed suit. It based its argument on the idea that Data Foundry is located inside city limits, and therefore has no standing in the case. “It appears that Data Foundry is located within the City of Austin limits, not outside the City limits,” the office wrote. “Consequently, since the Commission’s decision in the case will not affect Austin Energy rates for customers inside the City of Austin, Data Foundry has not asserted or shown a justiciable interest that may be adversely affected by the outcome of this case.”

 

On December 18, administrative law judges assigned to the case ruled that Data Foundry would indeed be included as an intervenor. They also admitted the City of Lakeway, an organization called Fair Affordable and Innovative Rates (FAIR), the Texas Legal Services Center, and Texas Rose.

 

Lakeway and FAIR argued that they represent citizens who reside outside city limits, and should therefore be included. Motions to intervene from the Texas Legal Services Center and Texas ROSE were not available online. However representatives for both of those organizations were present throughout the Council’s review of Austin Energy rates. 

 

Both organizations filed testimony to rebut a PUC staff analyst’s recommendation that the commission slash Austin Energy’s low income assistance program, according to the Austin Chronicle.

 

Lakeway withdrew from the case on Feb. 11. The Westlake United Methodist Church would eventually be added.

 

Most of the parties have exchanged requests for information about different aspects of the case. These include queries that touch on the confidential areas of the electric utility business such as purchase power agreements – the documents that lay out the conditions and costs of Austin Energy’s purchase of wholesale electricity.

 

On Jan. 22, HURF filed a motion to compel Austin Energy to share its purchase power agreement for the Nacogdoches biomass plant. The judges initially agreed that the utility should hand over the document. However, Austin Energy appealed, and later won a stay of that ruling. 

 

The case is scheduled for a hearing in the first week of March.

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