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Jo Clifton is the Politics Editor for the Austin Monitor.
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Thursday, April 23, 2020 by Jo Clifton
City utilities offering more help with bills
Austin Energy and Austin Water, two enterprise departments that help fund the city’s operations, are giving back to the community in the form of reduced electric and water and wastewater bills during the Covid-19 pandemic. Each utility is also contributing $5 million to the fund that helps low-income customers pay their utility bills.
As a result of the economic difficulties many citizens are facing due to the pandemic, City Council approved an ordinance April 9 immediately adopting lower electric rates as well as lower water and wastewater rates for all residential customers. Council also adopted lower electric rates for commercial customers beginning May 1.
Customers who receive lower rates through the city’s Customer Assistance Program will see their discounts on electric rates increased from 10 percent to 15 percent. Customers whose monthly income is below 200 percent of the federal poverty level are now eligible to apply for the program that provides that discount.
Paul Robbins, a consumer advocate who is frequently critical of Austin Energy, told the Austin Monitor he wholeheartedly supports increased bill discounts for CAP customers. However, Robbins said he was opposed to the decision to lower electric rates for all Austin Energy customers using more than 1,000 kilowatt hours per month. The previous rates were designed to encourage customers to conserve energy. But the city notes that people have less control over their electric usage when they are forced to stay home because of the stay-at-home orders.
Robbins contends that lowering the rates for higher-use customers aids the wealthy, not the poor. Austin Energy has argued that people with lower incomes live in less energy-efficient houses and therefore the lower rate is justified.
In addition, Council voted to lower charges for Austin Water residential service both for regular and for CAP customers. David Anders, assistant director of Austin Water, explained that CAP customers normally receive a 43 percent discount off the prices paid by other customers. That percentage discount is being maintained in the new rates, he said. According to the utility’s data, customers will see a $6 million savings on their bills.
Anders said the water utility’s revenues so far this year are about $10 million above budget because Austin experienced considerably less rainfall than usual in October, November and December, so the utility sold more water than anticipated. These rates will be in effect through Sept. 30, the end of the current fiscal year. He said he expects the utility to ask Council to reinstate the previous rates when it makes decisions on next year’s budget this summer.
Jennifer Herber, a spokesperson for Austin Energy, said Wednesday that the utility has also experienced an “overcollection” of regulatory charges. Under normal circumstances, the utility would wait to return that money to customers by lowering the rates for the upcoming year. However, “Because of the crisis we’re going to speed up the process,” she said. The change will help both residential and commercial customers, saving them an additional 4 percent on their electric bills.
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Key Players & Topics In This Article
Austin City Council: The Austin City Council is the body with legislative purview over the City of Austin. It offers policy direction, while the office of the City Manager implements administrative actions based on those policies. Until 2012, the body contained seven members, including the city's Mayor, all elected at-large. In 2012, City of Austin residents voted to change that system and now 10 members of the Council are elected based on geographic districts. The Mayor continues to be elected at-large.
Austin Energy: As a municipally-owned electric utility, Austin Energy is a rarity in the largely deregulated State of Texas. It's annual budget clocks in at over $1 billion. The utility's annual direct transfer of a Council-determined percentage of its revenues offers the city a notable revenue stream.