Dear Neighbors,

On December 8th, a majority of my colleagues voted to approve new base rates for Austin Energy customers. While I voted against the rate change, I want to share the final proposal and the implications of these changes with you. Throughout our deliberations, advocates, Austin Energy staff, and the Austin City Council attempted to address various, and at times, competing priorities: stabilize the fiscal health of the utility, incentivize conservation and energy efficiency, maintain reliable service in a dynamic energy landscape, and mitigate rate shock to our most vulnerable customers and those who are grappling with the financial consequences of inflation and COVID-19. The final proposal was presented on the evening of December 8th shortly before we were asked to vote and included various changes to our rate design and tier structure. 

Leading up to the vote, I spent hours working with Austin Energy staff and pouring over the rates, tiers, and various scenarios to mitigate the impact and rate shock and to deliver the best possible outcome for the ratepayers, the utility, and our conservation goals. Through these efforts, I offered changes that allowed us to advance various community priorities, like providing small business relief, expanding the Customer Assistance Program and not rewarding energy over-consumption.

While I believe the proposal improved significantly through our deliberations, in the end I voted against the final rate increase and rate design supported by the majority.  I simply could not justify burdening our community with higher rates without assurances that the final proposal would sufficiently fortify the long-term health of our publicly-owned utility.

The rate increases and updated rate design will go into effect with your March 2023 bill. An inside-city residential customer with a typical use of 860 kWh will see an $8.87 increase to their monthly bill beginning in March of 2023, though there will be variation to that increase based on a customer’s actual energy use. The average customer impact is over $6 less than AE’s initial proposal.

The approved proposal includes:

• Increasing Austin Energy’s base revenues by $29.5 million to offset increased costs. 

• Raising the Customer Charge gradually over three years — initially by $3 to total $13 in 2023, up to $15 total in 2025.

• Reducing residential tiers from five to four and setting new levels. For 2023, the tiers for inside-city residential customers are:

  • Tier 1: 0-300 kWh at 4.100 cents.

  • Tier 2: 301-900 kWh at 5.100 cents.

  • Tier 3: 901-2,000 kWh at 7.307 cents.

  • Tier 4: >2,000 kWh at 10.564 cents.

• Specific base rate changes for commercial and industrial customers vary based on their customer class.

If you have other questions regarding the base rate review process, I encourage you to read Austin Energy’s 2022 Base Rates Review FAQ webpage and to read material I shared in my April and November newsletters. You also may contact my office with any questions that are not addressed by Austin Energy’s online resources.

At our December 1st meeting, I sponsored a resolution initiating a review and revision of our 2030 Austin Energy Resource, Generation, and Climate Protection Plan, which will include a new retirement date for the Fayette Power Project plant. I, and my colleagues, Council Members Tovo, Pool, and Vela and Mayor Adler, advanced this item together with members of our Electric Utility Commission, Resource Management Commission, Sierra Club, and Public Citizen because the generation choices that we make have potentially great impacts on our rates and our ability to achieve our climate change goals. This resolution will allow us to adjust to the new technologies that are emerging and to adapt to shifts in the energy market, as well as position ourselves to take advantage of new federal funding opportunities. Thank you to the many constituents who wrote to me and my colleagues in support of this update.

I know that these rate changes will impact households of varying financial means differently, which is why at our December 1st meeting I co-sponsored Mayor Adler’s initiative to expand the Customer Assistance Program to better serve our community’s families who will be most impacted by these rate changes. I intend to stay apprised of these efforts to ensure that the program is accessible to all who are eligible.

I also want to take this opportunity to make sure you are aware of the various utility bill relief programs that are offered by Austin Energy. Please click the links below to review eligibility guidelines and apply for each program.

• The Customer Assistance Program provides utility discounts to income-eligible households.

• Financial Support Plus 1 assists those who are experiencing temporary financial challenges, such as job loss, and are in need of utility bill relief.

• The Medically Vulnerable Registry serves those with a long-term disease or critical illness in which someone is on life support, being treated for a serious illness that meets the eligibility criteria, or has an illness that is impacted by changes in temperature.  

• The City’s weatherization assistance program  provides free home energy improvements that can help reduce your utility bill.

I would like to conclude by congratulating my new colleagues: Mayor-Elect Kirk Watson and Council Members-Elect José Velásquez, Ryan Alter, and Zo Qadri. I also want to thank Mayor Steve Adler and Council Members Kathie Tovo, Ann Kitchen, and Pio Renteria for their service. It is an honor to serve with all of you.

Best wishes,