Is Austin Energy Committed to Sustainability and Affordability? Its Rate Proposal Raises Doubts.

Austin Chronicle Op-Ed

By Kaiba White

This op-ed was first published in the Austin Chronicle on July 15, 2022

Austin Energy’s rate increase proposal should shock many in the Austin community.

For years, Austin Energy has embraced energy conservation as key to sustainability and affordability for customers. In addition to running energy efficiency incentive programs, the utility adopted tiered rates for residential customers that charged more per kilowatt-hour for those using more energy. These tiered rates send a clear message to customers: You can significantly reduce your bill by using less electricity.

The current rate structure has been effective. Average electricity usage has declined, leading to monthly bills that are among the lowest in the state – even if our rates aren’t.

The rate increase proposal threatens to upend that success.

Austin Energy wants to more than double the fixed fee everyone pays regardless of how much electricity they consume. It also wants to overhaul its tiered pricing structure, raising rates for customers who consume the least energy and lowering them for those who consume more. Combine the proposed new fixed fee with the proposed new pricing structure, and the result is the people who use the most no longer have as much incentive to conserve and those who use less are disproportionately shouldering the burden of the rate hike.

This is a shocking proposal, especially considering Austin’s ongoing affordability challenges and the city’s previously stated goals to address the climate crisis.

Austin Energy has also proposed a new Value of Solar tariff, an alternative to net metering designed to fairly compensate customers for excess energy generated by solar panels installed at their homes or businesses. While the new tariff would be a slight increase in the first year, it would change – potentially by a lot – each year. The new tariff also doesn’t accurately reflect the benefits that rooftop solar provides to the utility and our community. A volatile Value of Solar rate, or one that undervalues local solar energy, could put the brakes on adoption of solar at homes and businesses.

Austin Energy’s rate proposal likewise reveals that the utility continues to invest in the over-40-year-old coal-burning Fayette Power Plant and asks customers to pay for those costs. This is beyond perplexing, given that the Austin City Council and Austin Energy have committed to shutting down Austin Energy’s portion of the plant. While negotiations with the plant co-owner, the Lower Colorado River Authority, to achieve that goal have stalled, that is not an excuse to continue to invest ratepayer money – our money – in an outdated and polluting facility.

All in all, Austin Energy’s rate proposal leaves us wondering: Is Austin Energy fully committed to sustainability and affordability? If these are priorities for the Austin City Council, rejecting Austin Energy’s proposal and sending the utility back to the drawing board should be an easy decision.

Kaiba White is an energy policy and outreach specialist with Public Citizen, a national, nonprofit, consumer advocacy organization based in Washington, D.C., with an office in Austin, Texas.