AUSTIN (KXAN) — More than 450,000 Austin Energy customers will see a reduction in their cost of electricity on April 1, according to Austin Energy.
In a statement Monday, the utility said Austin City Manager Marc Ott reported to the Austin City Council that the cost of electricity purchased from the statewide market continues to fall, so Austin Energy’s Power Supply Adjustment rate will be reduced 11.3 percent.
A residential customer billed for 1,000 kilowatt-hours will see a monthly reduction of $3.56, but actual savings depend on energy usage patterns, the statement continues. The average residential customer uses just over 900 kilowatt-hours each month. The reduction is automatically required by a policy established by the Austin City Council.
The change will bring the average Power Supply Adjustment down from 3.9 cents per kilowatt hour a year ago to 2.7 cents per kilowatt-hour, a 30 percent reduction that will save customers more than $100 million a year, Austin Energy says. The Power Supply Adjustment will be the lowest in any year since 2003.
The utility says the last time the Power Supply Adjustment was changed was Nov. 1, 2015, when it was reduced 20.4 percent. They explain the Power Supply Adjustment as a dollar-for-dollar pass-through of fuel expenses for natural gas, coal and nuclear fuel, revenues from the sale of power through the Electric Reliability Council of Texas wholesale market, the expense of renewable energy purchase power agreements, and the purchase of power through ERCOT to supply retail customers.
The decrease is not related to the current study of the utility’s base rates. Austin Energy has proposed a base revenue reduction of $17.4 million. That rate review is ongoing and is expected to reach the Austin City Council this summer, the utility said.