Council approves special energy rate for largest customers

Following a lengthy closed meeting, City Council adopted a new tariff Thursday that applies to Austin Energy’s largest industrial customers, with little discussion on the dais. “I understand, now, the staff’s rationale for creating this particular tariff for these customers, and I believe there are good policy reasons for doing so,” said Mayor Pro Tem Kathie Tovo. Currently, only two customers, Samsung and Freescale Semiconductor, are large enough and consume energy consistently enough to qualify for the new tariff, although others could be in the future. Rates for these two customers will increase overall, because they will be replacing rates that were frozen in 15-year contracts. However, as an Austin Energy fact sheet notes, rates for the companies that qualify for the new tariff are “lower than those paid by other companies.” That same fact sheet states that the rates “reflect the cost of service” for providing energy to the new class of customers, which “use a lot of power consistently over time.” Council has been considering the new tariff for several months, discussing it most recently at an Austin Energy Utility Oversight Committee meeting on Oct. 23 after having removed it from staff’s proposed Fiscal Year 2015-16 budget.