By Bill Oakey – July 25, 2022
On Friday July 22nd, KXAN-TV News aired a story about our oppressively high summer electric bills. The historic triple-digit heat has led to these burdensome bills, that are straining family budgets at a time of record high inflation. But, as I pointed out in the news segment, Austin Energy has a nasty surprise for us, lurking around the corner. They want to pile on a new base rate increase!
In the news interview, I explained that Austin Energy will be sweeping up the highest peak season profits in their history, from May through September. This will pour tens of millions of extra dollars into their coffers, well above their current year’s budget. The City Council will have every reason to nip the rate increase in the bud, as well they should.
But my jaw dropped to the floor, as I listened to Austin Energy’s response to that suggestion on KXAN. Here are their misleading and faulty arguments:
1. We don’t make any profits. The extra revenue is returned to the City.
2. We will earn extra revenue, but we also have additional expenses, with “the high cost of energy.”
The full costs of fuel and ERCOT power purchases are passed through to us, the customers. That charge appears on the Power Supply Adjustment line on our electric bills. The summer demand surge will undoubtedly push the charge higher. The fixed monthly amount is modified each year in November.
It’s true that Austin Energy’s revenue transfers to the general fund are not the same as a private business profit. But, here we’re talking about a revenue surplus – a windfall. In a recession or a time of high inflation, the revenue surplus can be used to keep customer rates stable. (Hint for the City Council)!
Imagine this historic seasonal windfall, with a new base rate increase stacked on top of it! That would generate even more tens of millions of extra revenue – every year. There are suspicions that the City wants to dodge the Legislative property tax cap with higher general fund transfers.
Here’s The Rub – Get Ready for a Snub!
The rate increase proposal would shift some base rate costs away from big businesses, onto residential ratepayers. And it would upend the residential rate tiers, pushing higher costs onto low and middle-income folks. We simply can’t let that happen! It’s a slap in the face in a city with extreme income inequality and an affordability crisis, plus high inflation.
It’s Time For a Call to Action!
S-T-R-I-P: Stop The Rate Increase Proposal
Nip It, Skip It, STRIP It!
My plan is to meet with neighborhood groups and civic organizations across the City, to explain what’s going on here. This is my fifth decade of affordability activism. I served on the City Electric Utility Commission from 1985-1990. This time around, we may have a victory in the palm of our hands. There are four City Council seats and the Mayor’s race on the ballot in November. Even if the current City Council adopts the lopsidedly unfair rate proposal, the new Council could scale it back or STRIP it completely. It’s up to you and me and our friends and neighbors, to elect a consumer-friendly Mayor and City Council. We can do it! Any future rate increase must not penalize small users, and it must protect residential and small business ratepayers!
Here’s What You Can Do to Help
1. Contact every City Council member and the Mayor. Ask them to STRIP (Ooooh!…They can do some of it behind closed doors, subject to the open meetings law limitations).
2. Ask the City Council to put senior discounts on the fixed customer charges for every category on our utility bills. It’s high time for the City to help our longtime residents.
3. Alert your friends, family, neighbors and co-workers. Send them the link to this blog piece.
4. Subscribe to this blog to stay up to date on our path to victory. A convenient STRIP Guide will soon be made available. It will tell it like it is in plain, simple language. The veil of special interest subterfuge will be peeled away and clearly exposed. We will wrestle our publicity-owned utility away from the special interests, and give it back to the people!
Use These One-Click Links to Send Emails to the City Council:
Mayor Steve Adler email@example.com
1. District 1 – Natasha Harper-Madison firstname.lastname@example.org
2. District 2 – Vanessa Fuentes email@example.com
3. District 3 – Sabino “Pio” Renteria firstname.lastname@example.org
4, District 4 – Jose “Chio” Vela email@example.com
5. District 5 – Ann Kitchen firstname.lastname@example.org
6. District 6 – Mackenzie Kelly email@example.com
7. District 7 – Leslie Pool firstname.lastname@example.org
8. District 8 – Paige Ellis email@example.com
9. District 9 – Kathie Tovo firstname.lastname@example.org
10. District 10 – Mayor Pro Tem Alison Alter email@example.com
Musical Accompaniment for This Blog Posting:
1. “Let’s Call The Whole Thing Off” – Harry Connick Jr., from “When Harry Met Sally”
2. “The Stripper” – David Rose, 1962 #1 song
3. “Behind Closed Doors” – Charlie Rich
4. “The Streak” – Ray Stevens
5. “Heat Wave” – Martha & the Vandellas
6. “Windfall” – Rick Nelson
7. “77 Sunset Strip” – Don Ralke
8. “Tell It Like It Is” – Aaron Neville
9. “The High Cost Of Living” – Wood’s Tea Company
10. “When The Lights Go On Again” – Mary Duff
Just to point out an important issue related to Austin Energy revenues and the City’s General Fund: The annual “utility revenue transfer” is very important to the many services and items which are funded by the General Fund. Without that transfer, or with a reduction in the transfer amounts, there would be many items that the residents use and depend on that may not exist. Or they would, but for a property tax increase.
That has been well established over the years. But, the City can face regulatory consequences for Austin Energy if the transfer is unreasonably high. Utility customers outside the city limits can appeal to the Texas Public Utility Commission. On the spending front. Austin spends considerably more per capita than any other major Texas city. When they had a chance to use Federal COVID relief funds to shore up the budget, they blew $100 million of it on the homeless! As if that’s the only pressing issue in the entire city!