Dear Neighbors,
On April 18th, Austin Energy launched the public feedback process for their regular review of the utility’s costs and revenues so that customer charges accurately recover costs and reflect the community’s priorities. Below you will find information regarding the rate review process, how to learn more, and ways for you to get involved and make sure your voice is heard.
What is the base rate case and why is it happening now?
Austin Energy policy requires a regular review of the utility's costs and revenues. The utility completed a cost-of-service study that looked at Fiscal Year 2021 financial data on the costs of providing electric service to the community. This study found a growing gap between revenue and costs. Austin Energy’s current base rates and rates structures are not meeting the costs of serving the community.
Key base rate review drivers include:
An outdated residential base rate structure, which does not accurately reflect customer costs.
Higher operation and maintenance costs.
Continued customer growth, which requires infrastructure additions and improvements.
Lagging energy sales, compared to customer growth.
Grid reliability.
To bring base rate financials back into balance, Austin Energy is proposing to:
Adjust for higher operation and maintenance costs.
Update an outdated residential base rate structure, which does not accurately recover the costs to serve customers.
Better recover fixed costs by relying less on energy sales.
Bring customers closer to what it costs to serve them, establishing more equitable charges as the community continues to grow.
Fairly credit solar customers for the energy that they produce at their homes and businesses.
Base rate changes will ensure Austin Energy’s financial stability, allowing the utility to continue delivering affordable, reliable electric service to the community. As part of the process, an Independent Consumer Advocate, who has specialized knowledge and expertise in utility rates, will represent the interests of residential and small business customers.
How will the base rate case impact your bill?
If approved as initially proposed, Austin Energy’s proposed base rate changes translate to an overall base rate increase of 7.6%, which would take effect in 2023.With the proposed changes, a residential customer with a typical use of 860 kWh would see an increase of $15.56 per month, though actual bill impacts depend on use and vary from customer to customer. Learn more about what this might mean for you in AE’s community presentation.
Austin Energy’s proposed base rate structure still encourages energy conservation through the tier structure and lowered consumption benefits customers through the Power Supply Adjustment process, where cost savings are passed on to AE customers. Energy efficiencies contribute to Austin’s climate goals, and AE offers several efficiency programs you may learn about here: https://austinenergy.com/ae/about/environment.
Austin Energy has also prepared an FAQ and a glossary of technical terms for those who would like to dive deeper on the subject. To learn more about the base rate review, you may watch an explainer video in English or Spanish, and read AE’s full base rate recommendations here.
Base Rate Review Timeline
