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Austin Water pitches rate reductions in 2018

Tuesday, December 19, 2017 by Jessi Devenyns

It has been 15 years since the last time Austin Water reduced the rates for the utility. There is a chance, however, that this trend may end in January.

On Dec. 13, the assistant director of Austin Water, David Anders, presented the Water and Wastewater Commission with the results of its Cost of Service study, which indicated that with the new revenue requirements, the utility “had a 0 percent rate increase (for the customer) for 2018,” according to Anders.

In fact, Anders said, “All classes would see a reduction to their current rates.”

The possible $14.6 million reduction is for all classes of retail customers. All wholesale customers will see a significant increase in their rates.

Many of these wholesale customers are paying impact fees, which according to commission Chair William Moriarty has contributed to this rate stabilization. “We’re letting new development pay for a lot of stuff; we’re not pushing it down on the ratepayers,” he said.

This happy news, however, comes with a catch. At the request of City Council, Austin Water originally planned to conduct an Impartial Hearing Examiner review after its rate filing to determine how to set prices for the future. But according to Anders, at the time the utility was not expecting to see a rate reduction for customers. Now, he says that an IHE “seems like overkill for a rate reduction.”

However, because the gears have already been set into motion, Anders said, “We are not in a position to say we’re not going to do the IHE.” The decision to forgo the planned review depends in large part on Austin Water’s Public Involvement Committee, which met on Dec. 15 to discuss this concern.

Anders explained that proceeding with an IHE is a nine-month process that would likely begin in 2018, and therefore customers “wouldn’t see any rate change out of this until Jan. 2019.” However, he believes that implementing the reduction quickly is in everyone’s favor and expressed his hope that a rate reduction would be approved in January 2018.

Even if the pruning of water utility prices is expedited, Anders said, “We would be talking probably March or April for the implementation of this rate reduction.”

Commissioner Jesse Penn, who is on the Public Involvement Committee, says that having the committee carefully reviewing the Cost of Service study and providing thorough feedback is necessary to help Austin Water move toward its long-term goals.

One of these long-term goals, according to Commissioner Mickey Fishbeck Maia, should be for Austin Water to “take their focus off approved metrics and take it towards affordability.” These rate reductions, she believes, are the first step.

Even though the commissioners agreed that the rate reductions are a beneficial and sustaining step for the water utility, implementing them still requires a public hearing with Council.

“We’re trying to lower the rates and it’s not that easy to do, it sounds like,” noted Moriarty.

A decision for how to proceed is still being considered by the Public Involvement Committee, but in the meantime, Moriarty said, Austin Water can breathe easier because the results of the study show that the utility has been taken “from a really difficult financial perch.”

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