Bridget Grumet: Austin Energy shouldn't raise rates on those who conserve

Over the past decade or so, Karen Hadden used Austin Energy rebates to add solar panels, install a more efficient air-conditioning system and better insulate the attic of her South Austin home. Those investments helped Hadden reduce her energy use and her electric bill. But now our city-owned utility is saying homes like Hadden's are contributing to a different problem — Austin Energy's revenue shortfalls — and people like her need to pay more. “As a customer, I feel a bit slapped around,” said Hadden, who serves on the city’s Electric Utility Commission, an advisory group reviewing Austin Energy’s request for a rate hike. "It seems like the same people who did those (utility-sponsored efficiency) measures are now getting penalized,” she added. As I noted last week, Austin Energy is in the midst of requesting a major overhaul of our utility rates, arguing the current rates don’t cover the day-to-day costs of delivering electricity.

But we’re not talking about an across-the-board rate hike. Austin Energy’s proposal, slated to come before the City Council in November, would deliver the steepest increases to frugal energy users, while actually giving a break to more extravagant consumers. Under the utility’s initial proposal, the typical homeowner would pay an additional $184 a year, an increase of 18%. Someone using half as much energy as the typical homeowner would see their bill go up 50%. Someone using three times as much energy as the typical homeowner would see their bill decrease 18%. It all sounds upside-down to me. But this exercise is about much more than adjusting rates. It’s about choosing a philosophy. Should a public utility serve the common good by designing prices that promote conservation and a healthier planet? Or should a public utility serve the fiscal interests of ratepayers by ensuring each customer pays fees closely aligned to the cost of serving them?