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Starting next month, Austin Energy customers can expect a $15 increase on bills

Friday, October 14, 2022 by Andrew Weber, KUT

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If you’re an Austin Energy customer, your bill is going up soon, but City Council members passed a proposal Thursday to lower some increases – at least for now.

On an 7-4 vote, Council members approved a proposal to lower a planned increase for average customers of $20 a month starting Nov. 1 to $15 a month. The increase, known as a pass-through charge, would in part pay back an estimated $104 million in operating costs incurred by the utility over the last year.

Under the proposal, the city will use the utility’s reserves to cover some of the pass-through charges over three years so customers aren’t stuck with the entire cost.

The increase comes as Austin Energy is in the middle of raising its base rates for electricity next year. The rate, which also needs Council approval, will be debated in the next few weeks.

Citing those looming increases, District 2 Council Member Vanessa Fuentes joined two other members who voted against the proposal. She argued the utility needed to be more transparent in increasing charges and that her constituents cited energy bills as a major concern at a recent town hall in her district.

“The common theme I heard back from my community was (about) the amount of increases we have with our fees,” she said. “Knowing that this fee would impact my community, knowing that … families in Southeast (Austin) … are living paycheck-to-paycheck (and) are dealing with rising rents, inflation … I will not support today’s proposal.”

Ahead of the vote, Council Member Kathie Tovo said it was “critically important” the utility be “more nimble” in its rate adjustment process, but that it was necessary.

“This isn’t really optional. Your publicly owned utility has already expended these dollars to provide you with electricity,” she said. “It is a regrettable yes vote today, but I am going to be voting yes on it.”

Austin Energy spokesperson Matt Mitchell told KUT on Wednesday the utility was hit with a “triple whammy” this year: a hot summer, high natural gas prices and debt it incurred from other electricity generators after last year’s freeze. Austin Energy estimates it had to shoulder $27 million in debt after the bankruptcy of the Brazos Electric Coop alone.

Austin Energy actually made a profit during the statewide blackout, but that triple whammy negated those gains.

Even with the increase, Mitchell said, Austin Energy has the second-lowest prices of publicly owned utilities in the state.

“That is some comfort, but it is cold comfort for people who are used to a certain rate and a certain price point for energy,” he said. “The priority is about bringing our customers closer to what it actually costs to serve them.”

Earlier this year, Austin Energy began the process to raise its base rates for customers to offset a $48 million gap in revenue. Under its rate proposal, the utility will charge an additional $16 more a month for the average household and raise its service fee from $10 to $25.

Critics argued the new pricing will unfairly burden low-income customers and those who use the least energy. That increase will take effect after City Council approves the utility’s proposal within the next few weeks.

This story was produced as part of the Austin Monitor’s reporting partnership with KUT. A previous version of this story said the vote was 8-3. It was 7-4.

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