Thursday, November 7, 2013 by Michael Kanin

PUC staff urges dismissal of latest rate challenge

A document filed Tuesday by staff of the Texas Public Utility Commission hints strongly that the commission will reject an appeal by Homeowners United for Rate Fairness of Austin City Council members’ action to assess legal costs from the Austin Energy rate case to out-of-city ratepayers.


In a 12-page filing, commission staff conclude that the body “does not have jurisdiction over the rate case expense claim and that claim should be dismissed.” It also notes that the Commission “does not have jurisdiction over the claim that additional information should have been provided at the public hearing” – two key elements of the HURF appeal.


“The Commission does have jurisdiction over whether a public hearing was held, but because it is undisputed that a public hearing was held, summary decision is appropriate…and Staff moves for summary decision on this claim,” concludes the document.


A state administrative law judge will now rule in the matter. Austin Energy also filed a 250-plus page response to the HURF complaint that included a motion to dismiss the matter.


HURF appealed the City Council’s decision to charge outside the city customers with the fees from the rate case, arguing that it violated the settlement agreement between the city and HURF.


Austin Energy officials declined comment, citing the ongoing nature of the case. In an Oct. 8 In Fact Daily story about the HURF filing, the utility offered a quick statement 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.” (See In Fact Daily, Oct. 8)


HURF attorney Roger Borgelt told In Fact Daily that he disagrees with PUC staff’s position and the City of Austin’s response. “I don’t have any instruction right now from my clients to do anything,” he added when asked about further actions. “Without getting into attorney-client privilege, there are other possible options. But, quite frankly, after a while it becomes a resource issue where the city can just continue to spend money on this, and pass its costs along to everybody or whoever, and we, frankly, don’t have unlimited resources.”


Borgelt is also vice chair of the Travis County Republican Party.


The issue stems out of the city’s recent Austin Energy rate increase, and the subsequent appeal of that increase by ratepayers who live outside of the city. That challenge eventually ended in a settlement.


Council Member Chris Riley then moved during the city’s budget deliberations to assess legal fees associated with that process to out-of-city rate payers.

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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 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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