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23 groups get involved in Austin Energy rate review

Thursday, March 24, 2016 by Jack Craver

Austin Energy is assuring the public that new electricity rates will be determined with plenty of input from stakeholders.

Twenty-three individuals and groups representing the interests of various segments of the utility’s customer base have signed on as “intervenors” in the process, according to Mark Dreyfus, vice president of regulatory affairs and corporate communications for Austin Energy.

“The intervenors represent every type of customer in our customer base, so we’re very pleased that we’ve gotten such full representation,” he told members of the Electric Utility Commission at its meeting on Monday.

Seven of the intervenors are business groups – such as the Greater Austin Chamber of Commerce, the Austin Independent Business Alliance and the Austin Apartment Association – seeking to promote the economic interests of their members.

Other intervenors include major individual commercial customers such as Samsung, Goodwill Industries, Cypress Semiconductor, Data Foundry and Seton Healthcare.

There are also advocacy groups focused on either reducing costs or promoting energy efficiency, such as the Sierra Club, Public Citizen and Homeowners United for Rate Fairness, a group that represents suburban homeowners. A group of low-income customers will also be participating.

Finally, two individuals will be intervening: environmental activist Paul Robbins and real estate attorney Jim Rourke.

The briefs submitted by the intervening parties show that while most seem to agree that the cost of energy is a concern, there is little agreement on who is bearing the greatest burden of that cost.

The apartment association, for instance, suggests in its brief that the utility consider establishing a separate rate class for multifamily buildings, an idea recently voiced at a meeting of the Electric Utility Commission by Jim Lazar, a senior adviser to the Regulatory Assistance Project, a global public interest group based in Vermont.

“Apartments are generally overcharged,” said Lazar – who is based in Olympia, Washington – via teleconference at the commission’s meeting last month. Apartment buildings are often purchasing amounts of electricity comparable to large commercial customers but are charged residential rates, which are typically higher, he explained.

However, business groups submitting briefs have a very different interpretation of who’s footing the bill. In its motion to intervene, the Greater Austin Chamber of Commerce asked that the rate review give “special attention to the commercial classes, as they pay a disproportionate amount of Austin Energy’s cost of service.”

Goodwill Industries similarly said that commercial customers were picking up an outsized portion of electricity bills and complained that Austin Energy’s commercial rates were out of line with that of other utilities in Texas.

Originally, City Council was scheduled to make a final decision on June 23, despite vociferous pushback from a number of intervenors who claimed that the compressed schedule did not allow them enough time to do the necessary research and make their case to Council.

In a Feb. 22 memo, Alfred Herrera, the impartial hearing examiner tasked with organizing the process, said “with great reluctance” that he was persuaded by the utility’s arguments that Council needed to approve the rates before it takes up the city budget in August. Two weeks later, however, the utility agreed to an extended timeline, with Council now scheduled to make a final decision on Aug. 29.

As a result, August is going to be a busy month for Council, including two work sessions and three meetings devoted to the rate review, in addition to 13 budget meetings, said Dreyfus.

Dreyfus explained that the budget that Council adopts in September will initially include the rates that were first proposed by the utility in January. Immediately afterward, Council will adopt an ordinance with the new rates, and at the end of September it will approve the amended budget that will include the new rates.

“Not to worry,” Dreyfus told members of the Electric Utility Commission about the convoluted proceedings. “The city finance department people know what those dates are, and they will have the Council members at the right meetings for the right decision points.”

As a result of the extended schedule, he said, the new rates will likely not be implemented until Jan. 1, 2017, rather than at the beginning of the 2017 fiscal year.

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