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Proposed Rate Increases at Austin Energy

Proposed Rate Increases at Austin Energy
By Tom “Smitty” Smith, Public Citizen Texas Director

Do you pay an electric bill to Austin Energy? Do you care how much electricity in Austin costs and where we get it from?

If so you should be at the Electric Utility Commission’s meeting on October 17th in Austin Energy’s offices at 721 Barton Springs Rd. The meeting, which will begin at 6:00pm, will substantially influence the future of Austin Energy. You can learn more about the rate review process by clicking here.

Austin Energy has proposed a substantial rate increase, most of which will be borne by residential customers (i.e. regular people) instead of commercial and industrial customers. The plan has many critics who charge that the utility is asking for too much money, that there has been some fuzzy accounting, that big businesses should share a larger portion of the burden, and that green technologies will be unfairly blamed for a massive rate increase.

For supporters of renewable energy and energy efficiency and for green businesses in general this is very worrying. While the utility certainly needs some additional revenue, two independent estimates have concluded that Austin Energy needs only about half of what it claims to need. Despite these conclusions from two independent sources, the Electric Utility Commission came close to approving Austin Energy’s request at the last meeting. Fortunately several of the commissioners expressed concern and moved instead to have another meeting so those concerns could be discussed.

If Austin residents experience a very large increase in their electric bills it is likely that green energy will catch much of the blame. While in reality that green energy and energy efficiency have helped keep bills low, it is easy for opponents of these technologies to say “Austin has been buying into this green energy movement, and look, now your bills are going up just like we said they would!”

It will also create problems for green businesses by depressing local spending power and motivation to purchase green products and services. When residents spend more of their paycheck on electricity each month, they have less left over to spend on other things, especially green items which many people consider non-vital. This is bad for the economy in general, and worse for green businesses. Putting more of the rate increase on large businesses which consume most of the electricity in Austin is more fair and also less harmful to the local economy.

In some instances you would expect higher electric bills to motivate people to purchase energy efficiency services, new windows, new appliances or even solar panels to get their energy bills down, but unfortunately that is unlikely, too. Austin Energy is proposing to put much more of the bill in fixed charges that are not based on energy consumption, which means reducing your consumption may not help reduce your bill all that much. They would like residential customers to pay about $30 each month in fixed charges as opposed to less than $10 on most bills now. For some customers this will mean that increased energy consumption will lower the cost per kilowatt-hour by spreading this fixed cost over more kilowatt-hours consumed (i.e. the customer’s bill would rise, but the cost of additional units of electricity would be effectively less up to a certain point).

So far the Electric Utility Commission has heard many concerns, but too few of them have come from green businesses and concerned residents. A strong showing at the October 17th meeting will help turn the tide, and a close vote is expected, so the more attendance we can generate the more likely that vote is to go our way! Anyone who attends can sign up at the beginning of the meeting to speak for 3 minutes. We would encourage you to attend, show up early and speak to the concerns above any more you may have.