Austin Utilities Board approves rate changes for 2023 – Austin Daily Herald
Austin Utilities board approves 2023 rate changes
Published 9:00 a.m. Wednesday, December 28, 2022
The Austin Utilities Board of Commissioners approved Austin Utilities’ 2023 budget and related rate adjustments at its December board meeting, including increases across all of its utility groups.
According to a press release issued Wednesday morning, the AU is making no changes to the natural gas rate, but will use a Purchased Gas Adjustment (PGA) mechanism to address month-to-month gas increases, resulted in anticipated increases of 9-12%. Average households will see a bill increase between $4.25 and $14.38 per month, while small and medium business customers can expect monthly increases of $16 to $639.38 depending on meter size and their use.
According to the announcement, a projected increase of 35-45% for gas transportation along with freight costs ranging 30-35% higher are bullish. These increases have a significant impact on energy costs across the country.
“Our team is constantly looking for ways to manage these costs, however, the cost of the actual merchandise we purchase to provide to customers is highly volatile,” said CEO Mark Nibauer. “Natural gas increases are affecting our rates as more power is generated using natural gas as coal plants are decommissioned.”
To minimize the impact of natural gas commodity price increases on customers, Austin Utilities will use several tools:
- A natural gas hedge program that locks in the cost for 65-75% of our projected usage.
- Two prepaid gas transactions that lower the cost of natural gas.
- A plan to increase winter protection by up to 90% every month to avoid volatility.
- A propane air plant that can displace natural gas loads and avoid buying high-priced gas.
- A commercial gas discontinued program in which customers switch to an alternative fuel.
- Peak Gas Alerts to alert customers when costs are high and conservation should be practiced.
Meanwhile, electricity tariffs will see a 7% increase in all tariff classes.
The average residential customer will see an increase of $5.05 per month, and small and medium business customers can expect to see monthly increases ranging from $9.69 to $172.80 depending on meter size and their use.
About 85% of Austin Utilities’ current customers are residential. A 15.6% increase in energy costs from our wholesale electricity provider, caused by the high cost of natural gas for power generation, is driving up electricity rates. The cost of buying wholesale power is 75% of the electricity operating budget. According to the announcement, AU will continue to work with its electricity provider to manage high market costs.
Water tariffs will increase by 9% for all categories of customers. The average residential water customer will see a bill increase of $3.06 per month. Small and medium business customers can expect to see monthly water increases ranging from $6.61 to $47.32 depending on their meter size and usage. Higher water pumping costs and increased material costs are behind the water rate hike.
Portions of the bill related to sewer rates and storm water rates are controlled and administered by the City of Austin. Changes in these costs are not reported by Austin Utilities.
In August of this year, the City Council approved a 15% sewer rate increase for 2023, the first of four increases to be made through 2026 to help generate revenue for renovations to the Water Treatment Plant. Black.