Tuesday, October 8, 2013 by Michael Kanin

Non-Austin ratepayers file another Austin Energy complaint with PUC

The group of out-of-town residents who originally challenged last year’s Austin Energy rate increase has filed another complaint with Public Utility Commission against AE. In a nine-page document signed by Homeowners United for Rate Fairness attorney (and Travis County Republican Party Vice Chair) Roger Borgelt, the organization argues that the utility violated the settlement agreement that the parties reached in March.


In the complaint by the group known as HURF, Borgelt argues that Council’s action in September to charge only out-of-city ratepayers with legal fees incurred by the utility during the rate case (See In Fact Daily, Sept. 11) violates the deal. “HURF requests that the final order… be enforced and that Austin Energy be required to comply with its provisions, by removing the rate case expense surcharge imposed on out-of-city customers by the Austin City Council,” it reads.


Austin Energy offered the following statement about the complaint via email: “The City of Austin’s actions in setting the Austin Energy budget and related rates for the 2014 fiscal year were conducted appropriately and in full compliance with the rate settlement approved by the Public Utility Commission in April.


“The billing changes approved Sept. 10 by the Austin City Council in the budget ordinance were discussed during multiple public meetings and HURF had the opportunity to speak at all of them. Austin Energy looks forward to a full fact finding on the legal issues raised in HURF’s filing.”


The March agreement came after a lengthy challenge mounted by HURF. As part of it, the group achieved some level of concession from the utility. Austin Energy’s rates, however, stayed relatively unchanged.


Borgelt’s complaint centers on the idea, as he puts it in the complaint, that the “treatment of the City’s post June 7, 2012 rate case expenses was agreed upon by all parties” – and that an attempt to recoup such expenses on the part of Council is not appropriate.


“It is unconscionable that the Austin City Council would unilaterally violate these terms of the settlement,” continues the complaint.


Council’s attempt to charge their rate case legal expenses to out of city ratepayers came on a motion from Council Member Chris Riley in the waning hours of Council’s budget deliberations. Mayor Lee Leffingwell provided the only ‘no’ vote.


After the budget hearing, Riley – an attorney — told In Fact Daily that he believes the city is on firm ground. “The intent was to be consistent with how these cases are typically handled,” he said at the time. “What we’ve learned from staff is that, typically, the expenses associated with rate cases are charged to those customers over whom the (Public Utility Commission) has jurisdiction.”


That sentiment echoed an opinion given to Council members earlier in the day by Thomas Brocato of Lloyd Gosselink, who Council members had retained to help with the rate case. “That is a legally defensible position,” said Brocato. “Historically, rate case expenses are collected from all ratepayers over which the (Public Utility Commission) has jurisdiction.” The PUC only has jurisdiction over customers who live outside the city.


This story originally contained a paragraph relating to the rate case before the PUC but not related to the current complaint. That portion was extraneous and has been removed.

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Key Players & Topics In This Article

Austin City Council Public Utility Committee: A City Council committee that reviews issues related to water and drainage utilities.

Austin Energy: As a municipally-owned electric utility, Austin Energy is a rarity in the largely deregulated State of Texas. It's annual budget clocks in at over $1 billion. The utility's annual direct transfer of a Council-determined percentage of its revenues offers the city a notable revenue stream.

Austin Energy 2012 rate increase: 2012 marked the first time in roughly two decades that the city's municipally-owned electric utility asked for an increase in the rates it charges customers. The process took about a year to wind its way through deliberation, passage, and an expected challenge from ratepayers outside city limits who challenged the increase at the State's Public Utility Commission.

Austin Energy 2013 rate case: After Austin City Council members voted to raise Austin Energy rates for the first time in two decades, the increase was challenged by a group of AE ratepayers who live outside city limits. Indeed, out-of-city ratepayers are the only utility customers who have standing to take that action. The case was heard by Texas' Public Utility Commission. That body ultimately upheld much of the increase.

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