Why Haven’t We Been Told Whether Austin Energy Has A Windfall Revenue Surplus?

By Bill Oakey – September 8, 2022

On August 14th, this blog asked the City to evaluate whether the historic summer heatwave will raise enough of a budget surplus to nullify the need for an Austin Energy rate increase. That was over 3 weeks ago. There has been no response from City Hall, or from the Utility. I first raised this question in a July 22nd KXAN News broadcast. Since then, we have learned several new factors that make that case stronger than ever.

City Officials Should Answer These Important Questions?

1. What is the revenue status now in Austin Energy’s current budget?

As pointed out in my August 14th blog post, San Antonio’s City-owned utility announced a $75 million budget surplus. Their City Council has held work sessions on how best to utilize those funds. Just yesterday, San Antonio City Manager, Erik Walsh, discussed the options in an on-air interview with KSAT-TV. A rebate to customers is being considered.

2. Where, and at what time will the Hearings Examiner deliver his recommendation on the rate increase?

His report is due tomorrow. But where and when is that supposed to take place? Austin Energy published a procedural timeline, but it does not address that question. When I asked one of the prominent participants in the rate case, I was told that they have not been given that information. This is a perplexing and frustrating lack of transparency!

3. What impact will a budget revenue surplus have on the rate 

Let’s hope that the City Council will ask Austin Energy immediately for a current estimate of their fiscal year to date “budget vs. actual” revenue status. They should have been able to conduct the same type of revenue and spending option evaluation that San Antonio has been doing for the past month. If not, somebody should tell us why not.

We already know that accounting errors identified by the Independent Consumer Advocate have been accepted by Austin Energy. This caused them to lower their rate case revenue requirement from $48.2 million to $35.7 million. (See pp. 1-2). At this point, the current budget status should be an essential part of reviewing the Hearing Examiner’s recommendation.

4. Does Austin Energy have the opportunity to improve its bond ratings, based on new revenue estimates, along with the diligent and excellent recommendations by all of the rate case participants? The picture is much better now than it was at the beginning of the summer. The best outcome would avoid the need for ongoing rate increases.

This blog has raised a whole host of other questions. And, there are more to come. Stay tuned. I remain optimistic that the Austin community can come together, and ultimately end up in a better place. If we get onto the right path, we can be a leader in the country’s quest to obtain affordable clean energy, while setting achievable goals to combat climate change.

A Fun Thing to Think About

What about the other Central Texas utilities? A friend asked me about Pedernales Electric Coop. It got me to wondering. Won’t all of these utilities have summer windfall revenues? Bluebonnet and what-all. They don’t hesitate to raise rates when financial woes strike them. But now they are awash with boatloads of unanticipated surpluses. Is it executive bonus time at champagne galas? Or, do their customers deserve a billing credit or a rate decrease? This question should apply from Buda, Kyle and Dripping Springs to Pflugerville, Round Rock, Cedar Park and Georgetown. Maybe even San Marcos and Bastrop.

I don’t have time to look into it. But, maybe somebody should.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s