Increase gives no discount to customers outside of city
On June 7, the Austin City Council unanimously approved a new rate structure for Austin Energy customers that does not give a discount to customers outside of the city limits.
Under the rate increase unanimously backed by Austin City Council, the new rate structure will occur in two phases—the first beginning in October and resulting in about an $8 increase per month for the average household.
Phase 1 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 monthly 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 of usage and the second-lowest tier to spread out the increases more evenly.
An unfair rate structure?
AE is a city-owned utility, and a portion of a rate increase would go back to the City of Austin general fund.
Austin City Council considered giving a discount to customers outside of the City of Austin but decided against it.
Lakeway Councilman Alan Tye said a rate increase essentially pays a part of the City of Austin’s budget for which customers outside of Austin have no benefit.
The Homeowners United for Rate Fairness, an association of AE customers who live outside of Austin, has launched a campaign to collect 3,000 signatures to challenge the rate increase. With 3,000 signatures, AE will have to defend the rate hike before the Public Utility Commission of Texas.
The PUCT can direct AE to change its rate increase if it is deemed unfair.
There are approximately 450,000 Austin energy customers, and approximately 2,100 of the customers in Lakeway.
The Steiner Ranch Neighborhood Association is attempting to gather some of the signatures. The petition is available at several businesses in the Steiner Ranch area and can be signed and dropped off at Cups and Cones, 2900 N. Quinlan Park Road, Ste. 290.
The City of Lakeway has copies of the petition at City Hall, 1102 Lohmans Crossing Road. The signatures must be turned in by July 31.
Correction: The original article misstated that there are 450,000 Austin energy customers that live outside of the City of Austin.