Austin Energy rates cut, budget slashed for 2017

Austin Energy crew (KXAN Photo)
Austin Energy crew (KXAN Photo)

AUSTIN (KXAN) — The Austin City Council decided Monday to lower energy rates for residential customers. The new rates will kick in at the beginning of the 2017.

The decision comes just a few weeks after Austin Energy cut a deal to lower rates for two of the largest companies in Austin: NXP and Samsung. The city-owned utility is slashing its budget by $42.5 million for the next fiscal year.

In a statement, Mayor Steve Adler said the rate reduction would not have been possible “without so many people representing a broad array consumers and businesses, environmental groups and industries.”

The move comes after seven months of discussion, debate, and ultimately, compromise.

“The fact that we got Austin Energy and 20 different stakeholder groups that represent very, very, very diverse groups of people from the big companies like Samsung, to low income residents all on board and all in agreement, it was a compromise,” Austin Energy Utility Oversight Committee Chair, Council Member Sheri Gallo said.

Jeff Williams lives just outside of the city limits, and says he can relate to those fed up with Austin’s high utility bills. He was one of them.

“I hope that they do lower the cost for consumers because personally, that’s why I left Austin in 2010, was because of the high energy rates,” Williams said ahead of  Monday’s meeting. “After I moved out away from the centralized area of Austin, costs became much cheaper and a lot more affordable.”

Every five years, Austin Energy reviews its base rates. The last time the energy utility reviewed how much they were charging customers was in 2012.

“I don’t think that anybody in this process got everything that they wanted, but everybody in this process got enough for them to feel good about the settlement,” Adler said. “It was important for us to be able to make the statement that we were lowering energy rates, utility rates, for everybody in this city.”

Austin Energy says for a customer who uses 460 kWh  in a billing cycle, they will see a decrease of $4.12. The customers who will see the biggest decrease will be the customers in the Tier 3 range (1,001-1,500 kWh); those customers who use an average of 1,471 kWh per month will see a decrease of $69.30.

Investigation: Austin Energy tackling rising number of customer complaints with smaller staff 

The city also listened to the feedback it was receiving from churches and other houses of worship. Austin Energy agreed to extend the House of Worship discount period for four years so churches can plan accordingly. Starting in FY 2017, the rate will be 13.25 cents per kWh and it will increase to 14.75 cents per kWh by FY 2018. The rate cap for how customers will end in September 2020.

Starting in January, the plan will also waive late fees for customers who are enrolled in the Customer Assistance Program.

For AE customers who have solar panels, they will see less of a payout when it comes to the Value-of-Solar rate. Starting Jan. 1, 2017, solar customers will receive $0.106/kWh instead of $0.109/kWh.

The utility recently found customers were paying more than it cost to supply them with electricity. This has been a nearly 9-month-long rate review process.

Back in March, the utility company did decide to lower rates since the company was paying less for electricity. provides commenting to allow for constructive discussion on the stories we cover. In order to comment here, you acknowledge you have read and agreed to our Terms of Service. Users who violate these terms, including use of vulgar language or racial slurs, will be banned. If you see an inappropriate comment, please flag it for our moderators to review.

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