Updated 09/20/2011 03:20 PM
Customers voice electric rate hike concerns
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As city officials consider the first proposed rate hike since 1994, Austin Energy customers are continuing to voice concerns.
The second of four hearings took place Monday at Austin Energy headquarters. About half a dozen customers voiced their concerns about the proposed increase’s impact on low-income families, churches, nonprofits and the elderly.
Laticia Riveles is a 23-year-old mother of four and a full-time student at Austin Community College. She and her husband are barely able to get by. Due to mounting bills, they moved in with her parents earlier this year.
"We keep our curtains drawn closed most of the time,” Riveles said. “My dad has installed ceiling fans every room."
Riveles tried to keep her composure as she pleaded with Austin Energy executives to think of her before increasing rates. She said she’s also worried about others who are worse off than her.
"What will our single mothers, senior citizens, people on disability do with the rate increase?" she asked.
An analysis team recommended that Austin Energy go with one of four options to cover increasing operational costs.
Customers currently pay a flat fee of $6. The plan includes increasing the base rate to $25, which would be split up as a customer charge and electric charge.
"With $6 a month, we are not really covering the cost to deliver the service everybody expects," Austin Energy Chief Operating Officer Cheryl Mele said.
The price for electricity would increase with the amount each customer used.
Currently, there are only two electric rates, one for those customers who use fewer than 500 kilowatt hours a month and another for those who use more.
Source: Austin Energy
|ENERGY USED||PRICE (cents/kWh)|
|0 – 500 kWh||5.514|
|501 – 1000 kWh||9.514|
|1001 – 1500 kWh||12.014|
|1501 – 2500 kWh||13.514|
For example, customers using 300 kilowatt hours a month would pay an extra $16.12, a 60 percent increase. Those using 1000 kilowatt hours would be billed an additional $9.88 per month, or 11 percent more. Customers using 2500 kilowatt hours would have to pay $42.43 more per month, a 17 percent hike.
"We know it's difficult for people,” Mele said. “Obviously, the cost of a lot of things has gone up. Those who can least likely afford it are certainly people we are taking into consideration."
Another concern is a demand charge for commercial customers.
Businesses, churches and nonprofits would all be classified as commercial customers and pay an additional fee based on the amount of energy used at one time. Customers would have to turn on lights and equipment in phases in order to decrease the demand charge.
Mele said Austin Energy has streamlined its operation with technological advances since its last increase 17 years ago, but the utility is losing money and needs to get back in the black.
Part of why Austin Energy is not making money is how much the city takes from the company's profits. The City of Austin uses revenue from Austin Energy to fund things like the city's economic development fund. Members of the Electric Utility Commission recently criticized the Austin City Council in regards to how the city leaders are spending money from Austin Energy. You can read more by clicking here.
Austin Energy will hold two more public hearings on the proposed rate hikes before officials make a final decision. The hearings are scheduled for October 3 and 17 at 6 p.m. They’ll be held at Austin Energy headquarters, 721 Barton Springs Road.
Read more on the proposed electric rate increases by clicking here.