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Austin Energy is considering a base rate increase to meet new demand

The agency says it needs a $48 million base increase based on costs from last year. That means taxpayers could see a 7.6 percent increase in their bills.

Residents who rely on Austin Energy may see their bills increase if the power company gets the base rate increase they’re after. The agency says its proposal “brings customers closer to what it costs to serve them,” citing the city’s population growth.

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In an advisory released Monday, the agency said a typical resident will consume roughly 860 kilowatt-hours per month. That customer would see an average of $15.56 increase in their electricity bill if the proposal goes through.

The proposal also includes changes to the rate structure which the agency says doesn’t fully recover costs. Currently, Austin Energy uses a tiered rate structure which places customers in specific tiers that are based on their energy consumption. The proposed change would change the number of tiers, from five to three, in an effort to bring customers “closer to their cost of service and establishing more equitable rates.”

— Tier 1 (0-300 kWh) — 3.8 cents per kWh

— Tier 2 (301-1,200 kWh) — 4.3 cents per kWh

— Tier 3 (1,201+ kWh) — 4.8 cents per kWh

The proposal also would change residential customer charges through a $15 increase to recover fixed costs. Businesses may also see an increase in their customer charge, all of which will depend on their business customer class.

Austin Energy requires regular reviews of costs and revenues. The agency says some of the drivers influencing their decision to draft the current proposal have to to with higher operational and maintenance costs, continued population growth which requires infrastructure additions, lagging energy sales and grid reliability. Customers will have a chance to voice their thoughts to officials in the coming weeks.

  • April 18 — Austin Energy publishes base rate proposal; start of base rate review process.

  • Mid-April through mid-May — Community meetings.

  • Mid-April through September — Formal process, including discovery, briefing, participant presentations and Hearing Examiner recommendation.

  • Late October through November — Electric Utility Commission meeting; City Council meetings; final City Council action.

  • January 2023 — Base rate implementation.

An independent review of the proposal will hear arguments from the agency, residents and other participants before making a recommendation to the Austin City Council. If approved, the rates will take effect next year.


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