Photo courtesy Austin EnergyAustin Energy lowered its proposed monthly increase to electric bills for the upcoming fiscal year after receiving negative feedback from City Council.
The utility provider initially proposed a 4.4 percent increase to the average customer's monthly bill because of rate increases, but has now proposed a lower increase of 2.6 percent, according to an Aug. 19 presentation to council. The newly proposed increase is an attempt to stay in line with the council's affordability goal of not increasing rates by more than 2 percent.
The new increase will cost the average customer who uses 1,000 kilowatt per hour about $2.72 more a month instead of $4.67, according to Austin Energy's presentation.
However, City Council questioned whether the change meets the affordability goal if bills would still increase by more than 2 percent each month. Mayor Lee Leffingwell said the goal should be clarified to help departments during their budgeting process.
"I'm very pleased we were able [to bring it down]," Leffingwell said. "We have to nail that down with a little more specificity as to exactly what the 2 percent affordability goal means so that it's clear to everybody and understandable to everybody."
Councilman Mike Martinez said that whether the 2 percent affordability goal will be measured by cost to the consumer or how much the charge makes up of total revenue needs to be clarified so the goal can be properly attained.
Chief Financial Officer Ann Little told council members they consider the changes to land below the affordability goal because revenue from the charges would be 1.9 percent of overall revenue.
Residential users who use less energy will see a higher increase in their monthly bills than heavy residential users, Little said.
"The smaller your bill, the higher percentage increase it could be because your use is so small. If you're a large residential customer, you'll see a smaller percentage increase. You might see a larger dollar increase," said Larry Weis, general manager of Austin Energy.
When City Council first met to discuss the budget at a July 31 work session, Leffingwell said he was not pleased with the original proposed increase because it did not meet council's affordability standards.
"I'm still very concerned about Austin Energy to make sure we're doing every last thing we can do to contain any possible rate increases there and at the same time maintain the fiscal integrity of [that department]," Leffingwell said.
