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Austin Energy to increase base rates annually through 2025 after city council vote

Here's what this means for the average utility customer's bill.

AUSTIN, Texas — After weeks of discussion, including several opportunities for public input, the Austin City Council on Thursday approved a rate increase for Austin Energy customers.

Right now, residential customers are paying a $10 "customer charge" each month. But, starting next year, that charge will be $13 per month and, in 2024, it'll rise again to $14, stopping in 2025 at $15.

With that new, initial $13 charge, Austin Energy reports that the typical residential customer who uses 860 kWh per month will see an increase of about $8.87 to their electric bills beginning in March. That marks a 5% overall base rate change.

"We know any rate increase affects our customers, who are dealing with rising costs just like our utility," said Jackie Sargent, Austin Energy’s general manager. "With the new base rates, residential customers will continue to see some of the lowest bills in the state while paying closer to the cost of service. I appreciate City Council recognizing the need to protect customers from rate shock while improving the utility’s financial position to continue to meet our community’s needs and priorities in the long term. We believe this balanced approach will help our customers and our utility’s long-term financial health."

The local utility noted that it has not raised its base rates for more than 10 years. It also reduced base rates by $42.5 million in 2016.

"I want to reiterate now in making this decision, I did not take it lightly to support the changes. If, as council members, we don't vote for this item, we've been told that Austin Energy would be in dire trouble financially. We cannot afford to let that happen," said Councilmember Mackenzie Kelly.

The council's vote was not a unanimous decision, with members voting 7-4 in favor of the proposal.

"With rents on the rise, with inflation, with grocery prices going up, all of those factors are compounding and making it more challenging for our working families," said Councilmember Vanessa Fuentes. "And that, to me ... is why I don't think that this proposal is the best possible solution for Austinites."

Those who need help paying their energy bill can still go to Austin Energy's website to learn more about available assistance programs.

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