Courtesy Austin Energy
Austin Energy customers will see their rates increase for the first time in 17 years.
The Austin City Council unanimously approved June 7 a new rate structure to occur in two phases—the first beginning in October and resulting in about an $8 increase per month for the average household.
Phase I is expected to generate $71 million in additional revenue for AE. The second phase, which should add about $3 to $5 to the average household's bill, is planned for 2014 after a review of the utility's finances.
AE staff said in September that a $131 million shortfall necessitated a 12.5 percent systemwide rate increase. The city-owned utility recently modified that figure to $126 million, but council lowered the revenue requirement to $71 million.
The plan also includes a five-tier rate structure based on energy usage similar to the utility's original proposal, but the residential fixed rate will be $10, not $22.
Councilwoman Laura Morrison amended the plan to include slight changes to the lowest tier and the second tier to spread out the increases more evenly.
Additionally, the new plan would give any independent school district a 10 percent discount on energy bills and caps the rates for group worship communities.
The plan will also eliminate discounts given to larger businesses as their contracts begin to expire in the next couple of years.
The changes do not offer an energy discount to customers outside the city limits.
A public hearing was held prior to the vote, and the consensus among those who testified, as well as council members, was that while the plan was not perfect, it was better than AE's original proposal unveiled in December.
Joshua Houston of Texas Impact, a faith-based public policy advocacy group, said the faith community supports the new plan as charitable customers with off-peak energy usage are no longer penalized.
Carol Biedrzycki, executive director of Texas Ratepayers Organization to Save Energy, urged support of an extended Customer Assistance Program for low-income residents, and an amendment was added to expand eligibility prior to passage.
"It's hard to be in favor of a rate increase, but there have been a lot of improvements since December," she said.