Item 2- Rates Documentation — original pdf

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Resource Management Commission Resolution Fairness of Residential Electric Rates WHEREAS, progressive Residential utility rates structures that charge less per unit for less consumption and more per unit for more consumption encourage conservation; and WHEREAS, progressive Residential rate structures also help save money for low-income customers, who generally use less energy; and Here is a chart that I have shown before derived from the U.S. Energy Information Administration’s Residential Consumption Survey. The data comes from Table CE1.4 Summary consumption and expenditures in the South - totals and intensities, “2020 annual household income.” WHEREAS, Austin Energy has implemented a more regressive Residential rate structure that runs counter to the goals of both energy conservation and of lowering costs for low-income residents; and The new tariff was approved by City Council on August 13, 2025. It contains increases in the Customer Charge and the lowest “Tier 1” of consumption, but no increases in the higher 3 Tiers of consumption. It can be found at this link. You can compare these to the older tariffs: Tariffs for FY 2024 and 2025 Pages 5 & 6 WHEREAS, Austin Energy defended this change during the 2025 budget by explaining to City Council and the Electric Utility Commission that Residential bills would actually go down because of lower fuel costs, when in fact this has not happened; and First, this is an example of the utility’s public stance, as taken from a news story. Matt Mitchell, a public information officer for Austin Energy, said...the base rate will rise 5%... However, Austin Energy has been able to lower the power supply adjustment charge...and most customers will see lower electric bills compared to last year. This is calculated in the Austin Energy Budget Presentation given to the EUC in mid-July. See Slide 16. Below is a screenshot. The PSA (fuel charge) here is 5.32¢ per kwh. ($45.77 ÷ 860 kwh.) But the actual fuel charge over the course of the year was 4.352¢. from: Everhart, Amy <Amy.Everhart@austinenergy.com> to: Paul Robbins <paul_robbins@greenbuilder.com> date: Jan 9, 2026, 3:31 PM subject: RE: Request for Information on 2025 PSA Costs Paul, Here is the response to your questions: Fiscal Year 2025 Average residential rate: $.04363 Weighted Average residential rate: $.04352 This EUC presentation was made 9 months into the rate year, so it was virtually impossible that Austin Energy could not know or at least estimate the last 3 months. The bottom line is that had AE used the real fuel cost, it would have shown the Total Monthly Bill in 2025 to be $113.62, not $121.96. Hence, the 2026 bill would indeed be higher than 2025. WHEREAS, this more regressive Residential rate structure harms some City Council Districts disproportionally, where Districts 3,4,6,7, and 9 experienced rate increases of between 31 and 34% between 2022 and 2026, while District 10 experienced only a 20% rate increase (See Attachment 1); and I have provided detailed spreadsheet tables to RMC in an earlier e-mail. WHEREAS, Austin Energy did not inform the City Council and the general public of this; and On December 16, 2025, I submitted Public Information Request #X022954 to Stuart Reilly, General Manager of Austin Energy. The answers were provided December 30, including the one below. Question: 3. In the most recent Austin Energy rate increase discussions and deliberations that have taken place since June of 2025, has there been any information provided by Austin Energy to the City Council or public on how the proposed rate increase affects individual City Council Districts? If so, provide this. • No responsive information WHEREAS, Austin Energy has stated that low-income customers have had their bills lowered through the Customer Assistance Program, even though the percentage of CAP customers is less than one-third of Austin’s population of low- and moderate-income citizens; and I have provided detailed spreadsheet tables to RMC in an earlier e-mail. WHEREAS, due to the increasingly regressive nature of the rate structure, the majority of Residential customers in every City Council District have seen their rates rise above average (See Attachment 2) because customers with the very highest energy usage received a rate increase far below the average; and I have provided detailed spreadsheet tables to RMC in an earlier e-mail. WHEREAS, the Resource Management Commission (RMC) passed a resolution during the last Austin Energy rate case in 2022 that was on record against regressive rates (Recommendation No. 20221018-004B); and See link above. WHEREAS, Austin Energy did not mention this major rate change to RMC during the budget review in 2025, making it difficult for the Commission to make a similar recommendation; and When the above-mentioned resolution was passed at the RMC meeting in October 2022, at least 3 Austin Energy Vice-Presidents were in attendance and knew of the Commission’s interest. You can see this in the video presentation on the RMC Web site. These same personnel were employed by AE in the summer of 2025, but did not bring this matter to us. WHEREAS, high monthly base fees such as those in Austin ($16.50) contribute to regressive rates, and there are other municipal electric utilities in Texas with lower monthly fees, including San Antonio CPS ($9.50), the City of Brownsville ($6.94); the City of Greenville ($12.15), the City of San Marcos ($12.61), and Bryan Texas Utilities ($11); and See links for tariffs: San Antonio CPS City of Brownsville City of Greenville City of San Marcos Bryan Texas Utilities WHEREAS, Austin Energy went on record during the settlement of the rate case in 2022 to raise Residential rates by a prescribed amount, but exceeded this commitment in 2025; and The 2022 rate case settlement was approved December 8 of that year. Here is the link. See pages 3 thru 5. Having spent untold hours as one of 10 serious intervenors in that rate case, and having been in Council Chambers when the vote took place in December 2022, I can honestly tell you that my perception was that the rates would stay in place until there was a subsequent rate case. WHEREAS, in 2025 electric rates were raised through the budget process and not through an evidentiary rate hearing that Austin is accustomed to, a departure from the utility’s longstanding practice which reduces transparency to the public; and Since the 1980s, the only electric rate increases that occurred without a rate case (and approved through the budget instead) occurred after the 2022 rate case. WHEREAS, Austin Energy rate cases were held in 2012, 2016, and 2022, but have since been completely eliminated; and See above. And since 2022, I have not heard of any plans to hold another rate case, despite the huge rate increases being planned. Note that late Friday, February 13, Austin Energy sent a memo stating: Austin Energy expects to conduct a rate adequacy review based on a 2026 test year. This memo is unclear as to it if this is a rate case with interveners who have the power of discovery and an Independent Hearings Examiner. WHEREAS, Austin Energy has predicted a 5% per year overall rate increase each year for the next four years; and According to the Austin Energy Budget Presentation given to the EUC in mid-July, rates are projected to go up 5% a year for the next 4 consecutive years. See Slide 13. Below is a screenshot. WHEREAS, the increased Austin Energy budget has been created without allowing ratepayers and stakeholders the power of discovery to gather evidence to determine if the rate increase was justified or equitable to consumers with low consumption, as would occur in a rate case process; The last rate case was in 2022. Rates were raised 5% this year (FY 2026) without a rate case. NOW THEREFORE BE IT RESOLVED that the Resource Management Commission ask the Austin City Council for the following remedies. 1. Restructure the Residential rate increase between 2025 and 2026 to be more progressive by placing an equal multiplier on all rate components (Customer Charge, Tier 1, Tier 2, Tier 3, Tier 4) instead of only raising the cost of the Customer Charge and Tier 1. This will equalize the 2026 rate increase across Council Districts, though work still needs to occur to remedy regressive electric rate actions that took place prior to this. 2. Require that all future proposed Residential rate increases have an accompanying analysis that exhibits the rate increase for each City Council District. 3. Begin an evidentiary rate case in 2026 to allow citizens and stakeholders the power of discovery and testimony in accordance with City of Austin custom. Attachment 1 Austin Energy Residential rate increase by Council District between 2022 and 2026. Attachment 2 Percentage of Austin Energy Residential customers with above-average increases by Council District in 2026.