Austin Energy begins repayments for incorrect tax

AUSTIN (KXAN) — Austin Energy has started returning money to customers in southern Williamson County, where the utility incorrectly collected a 1 percent metro tax for years.

Utility spokesman Robert Cullick said the returns began last week. In this first round, current customers will receive credits on their bills. By the end of the year, the utility will be returning over $220,000 to those customers, he said in an email.

KXAN revealed the taxation problem in September. At that time, the utility said it mistakenly collected the tax from more than 6,000 customers in far North Austin. The affected area is located in and around the Forest North neighborhood, which is southeast of the intersection of US 183 and the 45 Tollway.

The utility said, in assessing refunds, it would only go back four years due to statutes of limitations in state and local law, Cullick said.

It is not clear when the incorrect tax collection began and it appears the utility isn’t investigating the exact origin, though KXAN has seen a customer bill from the affected area that shows the tax being applied more than a decade ago. Cullick said the utility’s goal has been to return money to customers as soon as possible, and it is “irrelevant,” in regards to that goal, to find exactly when the problem began. The utility believes human error initially caused the problem, not a computer or billing system glitch.

KXAN asked: “You don’t know when it happened, you don’t know how it happened, you don’t know who did it, but you all are assuming that it was human error?”

“I think we’ve ruled out anything, but human error,” Cullick responded.

In internal utility emails obtained by KXAN through the Texas Public Information Act, Austin Energy officials say the tax has been applied since 1998.

“We are trying to determine whether or not residential electric customers should be exempt from the TRANSIT tax in the South Williamson County District,” said an Austin Energy customer service manager, in a Sept. 1 email. “We have been collecting this tax since 1998, and it is now being challenged by a resident of South Williamson County (Jollyville).”

It is not clear if the utility employee is referring specifically to the affected region, or to Austin generally.

In December, the utility will begin sending refund checks to the last known addresses of inactive customer accounts. If a refund is returned, it will be placed in the Texas Comptroller’s unclaimed property account. The utility will conduct a final quality-control check by the end of the year, Cullick said.

The utility also said it would hire an outside auditing firm to take a comprehensive look at its tax billing process. A request for qualifications for the auditor closed Nov. 8. Cullick said the utility received one reply to the RFQ, and it could not release the name of the firm at this time.

According to the RFQ, the auditor will look solely at billing and tax collection processes from Sept. 1 through Sept. 30 of 2016. The auditor would not be looking to find the origin of the original problem, according to the city documents and Cullick.

The utility has said the incorrect tax money ultimately ended up in Capital Metro’s coffers, and the utility would seek reimbursement from Cap Metro.

Mariette Hummel, a spokesperson for Cap Metro, said the agency has not received a directive yet from the Comptroller to reimburse Austin Energy. 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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