• Tue. Sep 20th, 2022

Utilities commission plans to let new developments increase shoulder rate

ByChad J. Johnson

May 13, 2022

Photo by Austin Energy

Friday, May 13, 2022 by Willow Higgins

The Austin Electric Utilities Commission is considering some suggestions to offer the city council regarding the Austin Energy rate review, which, as currently proposed, would increase the base rate of 7.6% to make up for a deficit of $48 million.

The committee’s budget and audit working group met this week EUC meeting with some discussion points and the beginning of a recommendation for the Board. Ideas include 1) conducting a deliberative customer survey on the proposed rate changes so that the Commission has a wide range of consumer opinions to consider; 2) create an alternative development charge for builders and developers – as opposed to a general rate increase – if it concludes that the budget shortfall is caused by population growth rather than individual use; and finally 3) regularly inform the EUC of proposed tariff increases at its meetings.

The proposed new pricing structure would reduce bills for higher consumption amounts and increase bills for lower consumption amounts in addition to more than doubling the customer service charge to $25. But Commissioner Randy Chapman, who presented the budget task force’s ideas, pointed out that Austin residents historically conserve energy where they can and that the rate of energy consumption by consumers is quite steady. What has changed, contributing to the large deficit that Austin Energy is struggling with, is population growth, which has necessitated huge residential and commercial development projects throughout the city.

According to the working group’s second idea, which was mostly discussed at the meeting, Chapman argued that “we’re building a distribution system that has to take into account people who have moved here. For those of us who have lived here for a while, we have the same electric meters. We have the same poles. We sometimes have breakdowns. »

“Builders, we know that they pay for underground wiring in their subdivision or to run a cable from a pole, but the question is…as part of the rate review, if the cost of construction, construction fees, development fees really cover the cost of the distribution network, current and future.

It’s a new concept that has never been used before, Chapman explained. The idea is that those responsible for driving up costs – in this case, new developments and homes – should pay their fair share.

In other words, Commissioner Kay Trostle explained, “You’re creating another fee structure and letting developers and new inbound customers pick up that cost instead of spreading it across all residential customers.”

The Commissioners have made it clear that this concept needs to be explored and ultimately their role as a commission would be to provide this innovative idea to the Board for consideration alongside Austin Energy’s proposed rate review. The task force’s recommendation is still in its infancy and needs to be fleshed out before being presented to Council.

“I think it’s a very interesting question and it would be interesting to study it. I’m not entirely sure what the outcome would be,” Trostle said.

The Independent Residential Consumer Advocate is responsible for bringing residents’ perspectives when reviewing rate structures, Chair Marty Hopkins reminded the commission, saying she would like to talk to staff about how to proceed in a appropriate with the idea.

But Trostle, who brought a copy of the commission’s bylaws to the meeting, interjected to explain that “the very first purpose of the board is to ‘review and analyze all policies and procedures of the electric utility…including the electricity tariff structure”. And that’s what we’re talking about, it’s the tariff structure. So I think there should be a way for us to provide information on what is going to be developed and considered.

The concept of the working group will emerge as an action point at the commission meeting next month. In the meantime, Hopkins will work with staff to determine how to initiate a deliberative customer survey and how to work with the Independent Consumer Advocate in its review of the proposed rate structure.

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