Austin Energy has put forth a budget proposal for the 2025-2026 fiscal year that promises a reduction in monthly utility bills for customers. On average, residents can expect their monthly bills to decrease by $4.89, while low-income customers enrolled in the Customer Assistance Program (CAP) will see an average decrease of $7.
At a recent briefing, members of the Electric Utility Commission (EUC) discussed the utility’s plan to increase revenue while also lowering costs for its customers. Despite hearing arguments from some commissioners, the EUC ultimately chose not to adopt a resolution opposing the proposed hike in the monthly fee that most customers pay.
The current monthly fee stands at $15, but if the City Council approves the proposal, this fee will rise to $16.20 per month. Commissioners Cyrus Reed and Kaiba White suggested maintaining the current fee and instead charging more based on the amount of electricity consumed. They contended that a usage-based pricing model would incentivize energy conservation.
However, Austin Energy officials view the increase in the monthly fee as a necessary measure to stabilize revenue streams. It is important to note that low-income customers enrolled in the CAP are exempt from paying this monthly fee, which means they will not be affected by the proposed changes.
Chief Financial Officer Rusty Maenius shed light on the utility’s financial situation, explaining that the service last experienced revenue adequacy in 2019. The onset of the COVID-19 pandemic in 2020 led to the utility reducing rates and implementing a moratorium on service cutoffs, resulting in the utility relying on its savings for continued operation. Most of Austin Energy’s expenses are fixed, including salaries and maintenance for power plants, as well as costs for new infrastructure such as poles and lines.
Furthermore, Chief Operating Officer and Deputy General Manager Lisa Martin informed the commission that even with the proposed monthly fee increase, Austin Energy is projected to face a budget shortfall of $43 million in 2026. While costs are expected to rise, Martin emphasized that the utility aims to minimize the impact on customer rates. She also highlighted that Austin Energy currently offers the lowest rates among utilities in the region.
The resolution proposed by Reed and White acknowledged the need for rate increases to address the budget shortfall for FY 2026 but advocated for maintaining the customer charge at $15 until the next formal rate case concludes. They suggested that any necessary additional revenue should come from volumetric rates rather than a fixed monthly charge. This approach, they argued, would help to encourage energy conservation and protect lower-income customers not participating in CAP from unfair increases.
Commissioner White went further to advocate for holding another rate case within three years. However, other commission members did not support this idea, with Commissioner Al Braden highlighting that rate cases are complex undertakings. After deliberation, a majority of the commissioners voted against the resolution, with only Commissioner Raul Alvarez joining Reed and White in support.
Austin Energy’s proposed budget and rate changes continue to foster discussions on how to balance revenue needs with the financial concerns of its diverse customer base.
image source from：austinmonitor
