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Electric Utility Commission approves AE budget

Tuesday, August 19, 2014 by Kara Nuzback

Austin residents can expect higher electric rates in the coming year, but low-income utility customers may get a few more breaks. The Austin Electric Utility Commission met Monday to approve the utility’s proposed budget for fiscal year 2015 and discuss ways to help customers who have defaulted on their payments get out of debt.

The city released its proposed budget for FY2015 on July 31, which included an approximate $4.67 increase for the average Austin Energy customer due to increased costs to the utility, such as fuel, power and regulatory costs. However, after complaints from Council, Austin Energy staff revised the overall increase to $2.72.

Ann Little, chief financial officer for Austin Energy told the commission at its Aug. 18 meeting that Electric Reliability Council of Texas fees cost the utility $100 million more this year than last year. Little said the frigid winter is partially accountable, causing gas prices to increase by 50 percent.

Little said the utility predicts the average customer bill in fiscal year 2015 will total $107.90 a month.

Utility Commissioners Brent Heidebrecht and Linda Shaw said they were prepared to approve the budget. However, Commissioners Karen Hadden and Clay Butler argued the commission should establish a working group to go over the proposal line by line. The commission did not receive a line item budget at its meeting.

Commissioner Varun Rai and newly appointed Chair Michael Osborne supported establishing a working group, and Osborne appointed Hadden, Butler and Heidebrecht to serve on the group. If the group decides to make more specific budget recommendations to Council, the commission will hold a special called meeting to vote on the working group’s recommendations before the scheduled Council vote on the budget Sept. 8, 9 and 10.

The commission unanimously approved the utility’s proposed budget, subject to the working group’s recommendations, with an amendment, proposed by Commissioner Shudde Fath, not to approve an $8 million fund transfer from Austin Energy to the city’s Economic Development Department. Shudde said the Austin Chamber of Commerce and Opportunity Austin provide enough support to the city’s economic development without having to use ratepayers’ money to fund the initiative.

Little said the utility will offer the same budget presentation to Austin City Council at its budget work session today. To view the presentation, go to the city website.

J.J. Gutierrez, vice president of Austin Energy Customer Care Services, briefed the commission on possible changes to the way the utility handles customers who have defaulted on their monthly payments.

Gutierrez said last November, City Council formed a working group made up of utilities, agencies and advocacy groups to examine a new arrearage management program for utility customers. The group held eight meetings, she said, and it is now recommending a new policy that would change the definition of a customer in default.

Currently, any customer who pays their bill after the due date is in default. The working group is recommending a grace period of seven days to allow the customer to catch up on a late payment, Gutierrez said.

The utility also considers customers in default under the current practice if they pay any less than the full amount due each month. Under the working group’s recommendation, customers who pay within $10 of the total amount due each month would not be in default, she said.

Gutierrez also described a new arrearage management program in which the utility would pay a large percentage of the outstanding bill for low-income customers who owe the utility $750 or more, as long as the customers continue to make payments on the debt.

All of the working group’s recommendations will come before the commission again at its next meeting, Sept. 15.

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