Texas Insider Report: AUSTIN Texas Austin Energys
initial $127 million rate increase is likely today being cut to closer to $60 million as Austin Electric lawyers admit via negotiation reductions & discovery the companys initial increase request was off by more than 100.
There is a
Big Show-Down at the Austin City Council 
Corral today possibly settled behind closed doors in Executive Session as to whether the in-city Austin Electric customers will receive the same rate increase reductions being given after Austin Energy the Texas Public Utility Commission (PUC) and
the out-of-city customers who faught appear to have succeeded.
The math isnt rocket science:
- A $127 million dollar utility rate increase was Austin Energys (AE) opening bid in the rate increase process over 18 months ago
- $123 milliion then $105 million were the levels determined to be necessary after City Council heard from rate payers & scrubbed Austin Electrics initial request for appropriateness of costs
- $91.8 million is what was agreed to last June to be applied to all customers systemwide
- And today an approximately $60 million dollar increase likely will be adopted by City Council with only the out-of-city Austin Energy customers seeing the benefit of the rate restructuring & increase cuts not inner-city Austin Electric customers
The Public Utility Commission of Texas (PUC) is currently hearing the case brought by Homeowners United for Rate
Fairness (HURF) to roll back Austin Energys enormous October 1 electric rate increase.
The process at the PUC began officially in November and may end today in Austin City Coucnil Chamers behind closed Executive Session doors.
The Rate Case process has uncovered $10s of millions of costs that PUC administrators and as Austin Electric negotiators are admitting or agreeing to via settlement have determined were not justifiable as true business expenses for Austin Energy to provide electricity to its customers.
With AE being required to justify its rate increase request based upon true costs the interveners secured substantial rate increase reductions which should drive lower future increases in electric rates for out-of-city customers.
Today Austin City Council will decide if In-City Customers will received the same cuts & restructured rates as the out-of-city customers who have faught and won the increase reductions.
Austin Mayor Lee Leffingwell previously announced he did not support the increases as initially proposed and suburban customers of Austin Energy (AE) organized through Homeowners United for Rate Fairness (HURF) to stop what they claimed was a the massive 23 increase in Austin Electrics utility prices.
Roger Borgelt HURF Legal Counsel said the proposed rate increases were excessive and based upon unjustifiable costs assumed by AE.
If AEs projected expenses reserves and other costs were downsized to reasonable levels HURF argued AEs revenue
requirement could be reduced by as much as $50 million and the rate increase could be decreased accordingly. If the issues raised by HURF are not addressed by the Austin City Council there could be another round of PUC appeals.
An overriding concern is directly related to Austin Energys base rates which are currently under review for the first time in 17 years. Rates will increase the question remains by how much and which customer classes bear the brunt of the increases.
Austin Energy customers living in the city have the recourse of voting for or against City Council members. Those customers who live outside the city have no such recourse.
