Austin Energy needs a $48 million base revenue increase based on 2021 costs of providing electric service to the community. This represents a 7.6% overall base rate increase, however, actual bill impacts would vary depending on customer class and usage.
2022 Base Rate Proposed Changes
Austin Energy sells electricity to residential customers in kilowatt-hours (kWh). A typical residential user consumes 860 kWh per month. A residential customer that uses 860 kWh would see an increase of $15.56 to their electric bill, based on proposed rate changes. Proposed key base rate changes include:
- Updating an outdated residential base rate structure that does not fully recover costs. Austin Energy uses a tiered rate structure, placing customers in a specific tier based on their energy consumption. Austin Energy proposed reducing the number of residential tiers from five to three, bringing residential 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
- Increasing the residential customer charge from $10 to $25 to better recover fixed costs. The customer charge reflects the costs for billing, metering, and other account management costs. By setting the customer charge at cost, future rate increases may be either deferred or reduced.
- Rolling outside-city residential rates into the revised tier structure. Outside-city residential customers are currently under a three-tier structure. This change will align all residential customers.
Business customers will also see an increase in their customer charge. More specific base rate changes for business customers will depend on their business customer class.
"I think that’s terrible. We already pay enough as it is for rent, rising costs, gas and food prices right now. So, it’ll definitely hurt a lot of people," said Austin Chef Nick Wnukowski.
2022 Base Rate Review & Process
Austin Energy policy requires a regular review of the utility’s costs and revenues so that customer charges accurately recover costs and reflect the community’s priorities. Key base rate review drivers include:
- Higher operation and maintenance costs.
- Continued customer growth, which requires infrastructure additions and improvements.
- Lagging energy sales, compared to customer growth.
- Grid reliability.
The base rate review process includes an open and transparent review of Austin Energy’s base rate proposal by an experienced Impartial Hearing Examiner.
The Austin City Council will ultimately set new rates for Austin Energy after considering Austin Energy’s final proposal, the Impartial Hearing Examiner’s recommendation, and any possible agreement that could come from the discussions.
Base rate changes are expected to take effect in 2023.
"We have not had an increase in the base rates since 2013, and we all know how much Austin and the surrounding area has changed since 2013," said Austin Energy Spokesperson Matt Mitchell. "The population growth is requiring a lot of added investment in infrastructure."
Mitchell said the increase is also necessary because of the increased cost of materials and operations.
"All the equipment, all the infrastructure it takes to maintain more than 12000 miles of wire and over one hundred and fifty thousand poles," he explained.
"We also use this investment to ensure that our power plants are running effectively and efficiently and that we're continuously upgrading and optimizing our electric system and the grid," said Mitchell.
2022 Base Rate Review Timeline
- 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
Find more information about the base rate review at austinenergy.com/go/rates.