Austin Energy proposes to raise rates, increases will not affect campus

Alexandra Feuerman

A raise in Austin Energy’s rates first suggested in a written proposal released Monday by the utility company will not affect UT’s electricity costs, but students living off campus may see higher energy bills sometime early next year if Austin City Council approves the increase.

If approved, the rate increase — of an average 13 percent — would be the first in 17 years. Since 1995, Austin Energy added about 115,000 customers, a 38 percent increase, stretching its resources, according to the proposal. Austin Energy expects to lose about $30 million this year, Austin Energy general manager Larry Weis told KVUE-TV on Wednesday.

“Austin Energy’s current rates generate insufficient revenue to cover its costs of operation, maintenance and other financial obligations,” said the proposal. “If uncorrected, AE’s reserve fund levels will not meet the requirements set forth in its financial policies as established by the City of Austin.”

The current rate for using 1,000 kilowatt-hours is $92 per month, which would be increased to around $102 if the rate is changed, according to Austin Energy. If the proposal is approved, the price of kilowatt-hours would grow with increased usage.

UT would be unaffected because of the Hal C. Weaver Power Plant that operates an electrical grid separate from the city, said Kenneth Bonin, Utilities and Energy Management contract manager.

“The increase will have a minimal impact for the main campus because we produce our own electricity and buy little power from Austin Energy,” Bonin said. “UT negotiated a new contract for the Pickle [Research] Campus, and it will result in a five-year average of a 2.03 percent increase.”

The Pickle Research Campus in North Austin is the largest solar energy project in Austin and generates about 406,000 kilowatt-hours of energy a year — about one-third of the campus’ total energy consumption, according to the UT website.

Utilities and Energy Management manager Bobby Speer said the UT power plant supplies energy to all of the buildings on campus.

“We have buildings on Austin Energy, but that is a contract that is negotiated,” Speer said. “All state facilities agree to rates that are pre-agreed to or negotiated with.”

Human biology sophomore Claire Smith lives at The Vintage on West Campus and is not excited about a potential rate increase.

“I just now started living in an apartment, so this is my first time having to worry about utility costs,” Smith said. “Basically, I would hate it [if the energy rates increased].”

Undeclared engineering sophomore Chase Hoffstadt, who lives in a duplex in North Campus, said he does not want to pay more for electricity but understands the need for Austin Energy to raise its rates.

“If the raise is needed to continue to provide energy and to decrease costs and losses on the supplier side, then I would understand the raise in prices,” Hoffstadt said.

Printed on September 1, 2011 as: Off-campus residents may face increasing price of electricity