AUSTIN -- New, higher energy rates will be implemented this year in Austin, but some city leaders are still searching for a middle ground.
Among Austin Energy's proposed increase is a 12.5 percent hike in rates. The first hike is scheduled to start this year at 8.7 percent. A 3.8 percent hike would begin in 2015.
On Thursday morning Austin City Council members Kathie Tovo and Laura Morrison introduced their own suggestion: an interim rate hike starting this June.
“This would meet Austin Energy's goal of getting a plan in place before the summer months so that our utility can remain financially secure and sound,” explained Morrison.
Morrison and Tovo say raising rates by 3.5 percent systemwide will generate $35 million for the utility company by the end of the year without putting a heavy burden on customers.
“Many Austinites are struggling financially right now, and we need a rate proposal that reflects that reality,” said Tovo.
Austin Energy hasn't raised its base rate in 17 years. It's now at a point of failure. Without a hike, the company says it will lose some $77 million in 2012. The planning has been back and forth from council to developers for more than a year now.
The plan presented by Tovo and Morrison on Thursday is getting support from faith groups that have been fighting Austin Energy's proposal.
According to the company’s new system, worship centers will face a higher burden. They will be categorized as a business instead of as a residence, meaning they will have to pay higher rates.
Those faith groups plan to be a part of Thursday’s public hearing on the new rates. It's scheduled for 6 p.m. at City Hall.
