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Austin Energy looks to get under affordability cap

Wednesday, August 6, 2014 by Michael Kanin

Austin Energy General Manager Larry Weis told the Austin Monitor Tuesday that he and utility staff are working on a proposal that would keep the utility’s FY2015 budget revenue request under a 2 percent affordability cap on potential rate increases.

Weis added that the proposal would address concerns first raised by Austin Mayor Lee Leffingwell and Council Member Mike Martinez over an increased pass-through fuel charge leveled against the utility by the Electric Reliability Council of Texas.

Though he did not offer any more in the way of specifics, Weis noted that he and his staff would be ready to pitch the idea as part of a budget session next week. He later repeated the news to Council members at their regular Tuesday work session as he and utility staff discussed a potential shift in AE’s cash.

Leffingwell and Martinez raised their concerns as part of Council’s first formal budget hearing this past Thursday. There, the Mayor worried about the propriety of Austin Energy officials proposal to go above the 2 percent cap — set just last year — as part of the “very next” budget cycle.

Martinez added his worry that a shifting reserve policy might also reflect poorly. “This does not feel or look appropriate to our citizens,” said Martinez. “We are putting $44 million in reserves and raising the rates.”

Leffingwell later took to social media. “The proposed Austin Energy increase is above the previously adopted goals of 2 percent a year.” he said on his Facebook page. “I will be strongly advocating that we make the adjustments necessary to restrict that rate increase to 2 percent. Also, while our utilities have taken important steps to eliminate non-related expenditures, I believe more can and should be done.” (See Austin Monitor, Aug. 1)

In fact, the utility’s commitment to keeping rate hikes below 2 percent was not intended to include pass-through charges such as ERCOT fees and higher fuel prices. (Additional comment, added post-publication: This is a point of contention between AE supporters and a group of large customers.–Jo Clifton, editor.)

However, Weis’ announcement appears to address at least some of the concerns expressed by the Mayor and Martinez.

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