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Parties near settlement in Austin Energy rate case

Tuesday, February 26, 2013 by Michael Kanin

Multiple City of Austin sources confirmed for In Fact Daily Tuesday afternoon the that parties are nearing a settlement agreement in the Austin Energy rate case. Though no one would comment on the record about the settlement – or its details – it appears as though something could be in place by late Thursday or Friday.


This likely means that some out-of-city ratepayers, including the group challenging Austin Energy’s new rates, will see their electric bills go down, while those living within the City of Austin will see no change.


City Council members are set for a regular Austin Energy briefing as part of Thursday’s meeting. That could provide a convenient platform for discussion of a potential rate case settlement.


However, there is also now a special called meeting posted for Friday to discuss the matter both in Council executive session and in open deliberations. Rate case proceedings were also due to begin Friday with a pre-hearings conference for all sides.


The pre-hearings conference is set to begin at 9 am. The special called meeting is scheduled for 12:30.


Early signs of a potential settlement first surfaced during a Council work session this morning. There, Council members held a lengthy executive session to discuss the matter. The city posted notice for the special called meeting shortly thereafter.


Multiple City Hall sources reached for comment Tuesday declined to talk on the record about the pending deal but seemed favorably disposed towards it. However, a majority of the City Council must approve the agreement. They would be unlikely to do so without positive feedback from Austin Energy officials.


If approved, a rate case settlement would bring an end to what has been a long and taxing process for city officials, Council members, and Austin Energy staff. An agreement could also relieve pressure from the state over the matter.


Council members approved the utility’s first rate increase in 18 years by unanimous vote in June (see In Fact Daily, June 8). Council’s version of the new rate structure included a five-tier residential block rate system, discounts for houses of worship and local independent school districts, and a customer assistance plan for low-income ratepayers.


Out-of-city ratepayers then challenged the increase, as they said they would. In November, Homeowners United for Rate Fairness (HURF) delivered a petition to the state’s Public Utility Commission that kicked off the rate case. More parties would join those proceedings, including state consumer advocate agency the Office of Public Utility Counsel (OPUC). Commission staff would also produce a set of findings about Austin Energy’s rates and the accounting structure behind them.


Much of the testimony from HURF and the OPUC was deeply critical of the utility’s ratemaking. Key provisions called on Austin Energy to reduce its revenue requirement — and by extension, its rate increase — by up to 100 percent. (See In Fact Daily, February 12 and 14.)


Austin Energy offered its response to the organizations last week. There, they sometimes brusquely defended the utility’s new rates and the work done toward those calculations. (See In Fact Daily, February 25.)


Much discussion in this back-and-forth revolved around the utility’s nine percent transfer to the city’s general fund, its nearly sole support of Austin’s Economic Growth and Redevelopment Services Office, its Consumer Assistance Program, and the new five-tier rate structure.

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