December 17, 2010
Austin Energy to Reduce Fuel Charge by 15 Percent
Austin Energy is reducing the fuel charge on electric bills by 15 percent effective January 1, 2011. The fuel charge will drop from 3.65 cents per kWh to 3.105 cents per kWh due largely to decreases in natural gas prices. A residential customer using an average of 1,000 kilowatt-hours (kWh) of electricity per month will see their monthly electric bill drop by about $5.50.
This is the third time over the last five years the fuel charge has been decreased. The fuel charge was decreased twice in 2007. Austin Energy base rates also have not increased since 1994. This means Austin Energy customers have not experienced any increase in their electric bill through either base rates or the fuel charge since Jan. 1, 2008.
A new line-item charge of 82 cents a month on the average residential bill was added in October to help pay Austin Energy's share of a statewide transmission line build out mandated by the Texas Public Utility Commission. However, in just two months, savings from the fuel charge reduction for the average residential customer will more than offset the new transmission charge for an entire year.
Austin Energy makes no profit off the fuel charge. It is a dollar-for-dollar recovery of Austin Energy's costs for fuel such as natural gas to generate power. The fuel charge also includes Austin Energy's share of fees to support state electric grid operations management and the cost of power purchased from other generators in Texas.
Austin Energy reviews and makes any needed adjustment to the fuel charge each January.