Several Austin Energy charges will be rising slightly in November, changes that will go into effect alongside an annual adjustment to the utility's base rates and following a separate AE charge increase that was applied in October.

The details

City Council on Oct. 5 approved annual increases for a grouping of the power utility's charges called pass-through rates—the Community Benefit, Regulatory, and Power Supply Adjustment, or PSA, charges.

Combined, the increases aren't expected to add much to the typical residential customer's bill; the impact will be about $1.33 per month. AE defines its typical residential user within city limits as using 860 kilowatt-hours of power each month.
In a memo, AE General Manager Bob Kahn said the latest charge increases are needed to help the utility recover or correct various costs.

The context

The pass-through adjustments will be seen on customers' bills beginning in November, one month after the utility individually raised the PSA to reflect high costs in the power market through a record stretch of heat this summer.

That new PSA charge was applied Oct. 1 and will hold steady into November alongside the other changes. Kahn said AE may continue to tweak the PSA month-to-month to "smooth out" cost impacts and avoid larger rate swings over time.

Also in November, AE customers can expect to see the first annual adjustment to the utility's base electric rates as part of a three-year plan to gradually increase that side of the billing system. That outline was proposed by City Council members last summer in an attempt to mitigate a larger one-time "rate shock" from AE's regular base rate review cycle.

The first of those adjustments took place last November, and the final increase will be effective in November 2024.

A closer look

The new charges were approved alongside a $130 million budget amendment for AE to cover high congestion costs after the utility underestimated those totals for the past year.

Like all other members on the Electric Reliability Council of Texas, or ERCOT, grid, AE takes on hourly congestion costs based on market activity. While AE staff say those added up to about $20 million-$30 million in previous years, the utility took on more than $120 million in such costs from last October through this August. The budgeting change reflects current pricing conditions and a similar projection for the new fiscal year.

Looking ahead, AE staff said that boosting local power generation could help cut down on the higher congestion costs going forward.