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Austin City Council Approves Another Large Rate Increase

AUSTIN, Texas – The Austin City Council voted Thursday night to approve a modified version of an Austin Energy (AE) proposal to raise rates. With a 7-4 vote, the Council approved nearly all of the revenue increase that the utility requested.

Council members Kathie Tovo, Ann Kitchen, Vanessa Fuentes, and Alison Alter voted against the proposal.

Under the approved plan, AE customers will see their monthly Customer Charge – the amount everyone pays regardless of how much electricity they consume – go from $10 to $13 in 2023, followed by increases to $14 and $15 in each of the two years that follow. The Customer Charge increase faced widespread opposition and is far less than the $25 AE had requested.

Those using an average amount of energy or less will see large rate increases because a four-tier structure with higher rates for the low-energy use bottom tiers will replace the current five-tier structure. Residents who use the most energy, who are more likely to have higher incomes, will see their bills stay about the same if they live inside the city and will have their bills decreased if they live outside city limits.

“These excessive rate increases for customers using smaller amounts of energy each month – who are disproportionately lower income – is very disappointing,” said Kaiba White, energy policy and outreach specialist with Public Citizen. “While the approved rate plan is an improvement from what Austin Energy initially proposed, it still is still inequitable and de-prioritizes energy conservation, which is key to reducing our impact on climate change.”

The approved plan will see Austin Energy receive an additional $29.5 million in annual revenue. The plan also shifts costs from commercial and industrial customers to residential ones.

“A customer charge of $15 – on top of the changes to the tiers and the significant $15 per month rate hike already passed by the City Council in October – will harm low-income households in Austin,” added Shane Johnson, clean energy organizer with the Sierra Club Lone Star Chapter. “The pressure consumer advocates and environmental groups put on the Council to oppose the proposed rate structure should be applauded. Unfortunately, this was not the best outcome for ratepayers.”

Public Citizen, Sierra Club Lone Star Chapter, and Solar United Neighbors filed a formal objection to the proposed changes to the Value of Solar tariff. They worked for months with other stakeholders to craft an alternative. While Austin Energy’s methodology was largely adopted as proposed, two key changes were made, and stakeholder processes were established to guide future solar policy development.