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Fath pushes ahead on demand charge policy

Tuesday, September 1, 2015 by Tyler Whitson

Electric Utility Commissioner Shudde Fath continued her effort to get City Council to raise the demand charge threshold for small, commercial Austin Energy customers as part of the Fiscal Year 2015-16 budget in a frank memo she sent to Council, City Manager Marc Ott and Austin Energy General Manager Larry Weis on Monday. “A budget amendment to change the small business demand charge threshold from 10 (kilowatts) back to 20kW WILL NOT ‘raise bills for some customers’ and WILL NOT result in a budget increase or budget reduction,” Fath wrote. She was directly refuting a statement that Austin Energy spokesperson Robert Cullick provided to the Austin Monitor on Wednesday, which stated that “changing (the policy) will raise bills for some customers without giving them a chance to participate in a fair and impartial process.” Council reduced the demand charge threshold for small, commercial customers from 20 to 10 kilowatts in 2012, meaning that customers in that class who exceed 10 kilowatts of peak demand between June and September of any given year are bumped into a higher class – for the following year – that is subject to demand charges. Small-business customers have complained that the policy creates a financial burden and risk for them. The Electric Utility Commission passed Fath’s resolution on Aug. 17 asking Council to raise the threshold back to 20 kilowatts and reduce the amount of time – from one year to three months – before customers are eligible to return to their previous class. Mark Dreyfus, vice president of regulatory affairs and corporate communications at Austin Energy, has maintained that Council should consider the policy change as part of a cost-of-service study that will take place over the next several months – for rates that will be effective in October 2016 – rather than consider it as part of the budget. Fath has argued that small businesses need relief sooner.

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