Business groups alarmed at proposed Austin Energy fee hikes

The prospect of a big and sudden increase in a critical expense — such as the cost of electricity — can trigger nightmares for many business owners. That’s the position in which Austin Energy has put local companies, according to industry groups that are expressing alarm at the utility’s recent proposal to sharply raise some fees beginning Nov. 1. Austin Energy has said its proposed increases to so-called "pass-through" charges intended to recoup costs that are beyond its control — such as higher prices for natural gas — would boost monthly electricity bills for average residential customers by about $20, or $240 annually, not including the impact of unrelated proposed increases to the utility's base electricity rates. While the sum is significant, it's a fraction of what the city-owned utility's local commercial and industrial customers are facing.

The impact on small and medium-sized businesses could be thousands of dollars, and in some cases tens of thousands of dollars, annually in extra costs from the pass-through increases, city figures show. Meanwhile, top industrial users — such as semiconductor factories, which draw large amounts of electricity 24 hours a day and use many times the volume of residential customers and most commercial operations — would be on the hook for millions of dollars annually from the higher fees, industry experts say. The Austin City Council was scheduled to vote last Thursday on the fee increases but postponed the action for two weeks after a variety of groups — including the Austin Regional Manufacturers Association, the Austin Chamber of Commerce and the Coalition for Clean, Affordable, Reliable Energy — sought a delay. Had the City Council approved the fees according to the original schedule, it would have done so barely a week after Austin Energy first proposed them Sept. 21 — a time frame that business advocates said provided scant opportunity to assess the need for them or for the utility's customers to plan for them. "It will lead to large users seeing over 40% increases on their electric bill and business owners struggling with millions of unbudgeted costs," said Ed Latson, CEO of the manufacturers association. "It is another example of Austin Energy's disregard of their customers, who were not provided any guidance or forecast."