AUSTIN, Texas - Austin Energy is set to propose changes to its base rate as well as launch a public base rate review process on April 18.
According to Austin Energy policy, the utility is required to perform a regular review of its costs and revenues so that customer charges accurately recover costs and reflect the community’s priorities. Base rates cover the costs of owning and operating the electric system.
Austin Energy staff presented initial findings from a recently completed cost-of-service study at the April 5 Utility Oversight Committee meeting and the March 21 Electric Utility Commission meeting, says the utility. The cost-of-service study looked at FY 2021 financial data on the costs of providing electric service to the community.
These findings show a growing gap between revenues and costs, which means Austin Energy’s current base rates and rates structures are not meeting the costs of serving the community.
2022 Base Rate Review
The base rate review will include only those costs that make up Austin Energy’s base rates, such as financial obligations and utility operation and maintenance expenses.
It does not include a review of pass-through costs such as power supply costs, regulatory costs which help operate the statewide transmission system or energy efficiency costs, says Austin Energy.
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- An outdated residential base rate structure, which does not accurately reflect customer costs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
2022 Base Rate Review Process
The base rate review process includes an open and transparent review of Austin Energy’s base rate proposal by an experienced Impartial Hearing Examiner, says the utility. The Impartial Hearing Examiner will listen to all issues and positions from participants and make a recommendation on Austin Energy’s base rate proposal to the Austin City Council.
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.
Council will ultimately set new rates for Austin Energy after considering its final proposal, the Impartial Hearing Examiner’s recommendation, and any possible agreement from the discussions, says the utility.
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