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Commercial Electric Rates & Line Items

Austin Energy’s commercial rate classes align with industry best practices and reflect what it costs to serve each class.

Council Adopted New Rates Effective January 1, 2017

On August 29, 2016, Austin City Council set new, lower electric rates. The impact of these reductions will show up in bills starting January 1, 2017.  Commercial customers overall will see an approximately $37 million reduction in their bills. 

Part of the rate change includes switching from seasonal energy and demand rates to annual energy and demand rates. Under the previous rate tariff, customers paid higher energy and demand charges in the summer months than they did the rest of the year. The new rates will be the same all year long.

Lower Energy Rates During Hottest Time of the Year

Starting with the January 2017 billing cycle, the energy charge will increase slightly from previous rates but will not change in June: the result will be a lower energy rate during the hottest and most expensive time of the year for most of our customers. This change will decrease the amount of money most customers pay each year and will lead to more predictable bills month to month.

Customer Class

A Customer Class is a grouping of customers with similar energy-use characteristics. This is important because the cost to serve each class can vary substantially depending on customer service needs and electricity consumption.

An industrial customer, for example, may receive electricity through a single high-voltage line extending directly from a substation. A small business, just like a home, typically receives its electricity through a series of lower voltage lines starting from a substation.

Austin Energy's nine rate classes align with industry best practices. Our commercial rate classes are: 

Commercial Rate Classes by Energy Use
Commercial
Secondary Voltage 1 < 10 kW
Secondary Voltage 2 > 10 < 300 kW
Secondary Voltage 3 > 300 kW
Commercial and Industrial
Primary Voltage 1 < 3 MW
Primary Voltage 2 > 3 < 20 MW
Primary Voltage 3 > 20 MW
Primary Voltage 4 > 20 MW & > 85% Load Factor
Transmission Voltage 1  
Transmission Voltage 2 > 20 MW & > 85% Load Factor

Customer Charge

The Customer Charge recovers the costs of metering, billing, collections, and customer service incurred in managing customer accounts. Austin Energy incurs these costs for all customers, regardless of how much energy is used.  Our rates apply a Customer Charge to most customers on a monthly basis.

Customer Charge ($ per month)
Commercial
Secondary Voltage 1 < 10 kW $18.00
Secondary Voltage 2 > 10 < 300 kW $27.50
Secondary Voltage 3 > 300 kW $71.50
Commercial and Industrial
Primary Voltage 1 < 3 MW $275.00
Primary Voltage 2 > 3 < 20 MW $2,200.00
Primary Voltage 3 > 20 MW $2,750.00
Primary Voltage 4 > 20 MW & > 85% LF $11,000.00
Transmission Voltage 1   $2,750.00
Transmission Voltage 2 > 20 MW & > 85% LF $21,120.00


Electric Delivery

The Electric Delivery Charge helps to recover the operating, maintenance and capital costs of our distribution system which includes poles, wires, transformers, and Smart Grid technology. This charge only applies to customers who are charged for demand.

Electric Delivery ($ per kW billed)
Commercial
Secondary Voltage 1 < 10 kW $0
Secondary Voltage 2 > 10 < 300 kW $4.50
Secondary Voltage 3 > 300 kW $4.50
Commercial and Industrial
Primary Voltage 1 < 3 MW $4.50
Primary Voltage 2 > 3 < 20 MW $4.50
Primary Voltage 3 > 20 MW $4.50
Primary Voltage 4 > 20 MW & > 85% LF $4.50
Transmission Voltage 1   $0
Transmission Voltage 2 > 20 MW  & > 85% LF $0


Demand Charge

“Demand” is the maximum flow of power a customer uses at any one time. It is measured in kilowatts by an electric demand meter. Demand charges are a significant part of a business’s utility bill.

A Demand Charge is applied to all commercial customers with an average summer peak demand of 10 kW and higher. Starting in January 2016, Austin Energy began averaging each commercial customer's peak demand each June through September and assigned customers to the appropriate rate class based on that average.

The Demand Charge recovers fixed production costs related to building and financing Austin Energy’s existing and new power plants. Non-demand customers recover these costs in their energy charges.

Using a Demand Charge best reflects the way in which costs on the Austin Energy system are incurred and provides an incentive for our customers to decrease their load by making energy-efficiency improvements or by leveling their demand.

Learn more about Demand Charge and Demand Meters (pdf)

 

Demand Charge ($ per kW billed)
Commercial
Secondary Voltage 1 < 10 kW n/a
Secondary Voltage 2 > 10 < 300 kW $4.19
Secondary Voltage 3 > 300 kW $6.40
Commercial and Industrial
Primary Voltage 1 < 3 MW $7.00
Primary Voltage 2 > 3 < 20 MW $9.17
Primary Voltage 3 > 20 MW $10.37
Primary Voltage 4 > 20 MW & > 85% LF $10.20
Transmission Voltage 1   $12.00
Transmission Voltage 2 > 20 MW & > 85% LF $11.15


Energy Charge

The Energy Charge is generally designed to recover the variable costs of running the utility. It is billed on a cents per kWh basis and varies by rate class.

Inside and Outside Rates

About 6,500 commercial customers are outside of the City of Austin. Outside city commercial customers that pay a Demand Charge generally have lower rates than commercial customers inside the City of Austin.

Energy Charge (¢ per kWh billed)
  Inside Outside
Commercial
Secondary Voltage 1 < 10 kW 4.802¢ 4.802¢
Secondary Voltage 2 > 10 < 300 kW 2.421¢ 2.356¢
Secondary Voltage 3 > 300 kW 1.955¢ 1.902¢
Commercial and Industrial
Primary Voltage 1 < 3 MW 0.053¢ 0.052¢
Primary Voltage 2 > 3 < 20 MW 0.052¢ 0.051¢
Primary Voltage 3  > 20 MW 0.152¢ 0.152¢
Primary Voltage 4 > 20 MW & > 85% LF 0.0¢ 0.0¢
Transmission Voltage 1   0.500¢ 0.500¢
Transmission Voltage 2 > 20 MW & > 85% LF 0.0¢ 0.0¢


Power Supply Adjustment

The Power Supply Adjustment recovers dollar-for-dollar the net costs of the kilowatt-hours used by customers. Austin Energy makes no profit on this dollar-for-dollar pass-through charge. It covers fuel for our power plants, the cost of electricity purchased from the grid and any net revenues (or losses) experienced as Austin Energy produces and sells power to the grid.

The Power Supply Adjustment is adjusted beginning with November bills to reflect the current price of fuel and projected Austin Energy power purchases.

Summer and Non-Summer Seasonal Power Supply Rates

In addition to the energy charge, the second major component of your bill is the Power Supply Adjustment (PSA). Unlike the energy charge, the PSA will vary between summer and non-summer months.

Austin Energy buys the power needed by our customers from the Texas electric grid at market prices. When demand for power peaks in the summer, so do our costs.  To cover these pass-through costs, summer power supply rates are higher than our winter rates.

Summer rates are in effect June, July, August, and September. 

Download the Power Supply Adjustment Schedule (pdf)

Power Supply Adjustment (¢ per kWh)
  Summer Non-Summer
Commercial
Secondary Voltage 1 < 10 kW 2.829¢ 2.727¢
Secondary Voltage 2 > 10 < 300 kW 2.829¢ 2.727¢
Secondary Voltage 3 > 300 kW 2.829¢ 2.727¢
Commercial and Industrial
Primary Voltage 1 < 3 MW 2.765¢ 2.666¢
Primary Voltage 2 > 3 < 20 MW 2.765¢ 2.666¢
Primary Voltage 3 > 20 MW 2.765¢ 2.666¢
Primary Voltage 4 > 20 MW & > 85% LF 2.765¢ 2.666¢
Transmission Voltage 1   2.730¢ 2.632¢
Transmission Voltage 2 > 20 MW & > 85% LF 2.730¢ 2.632¢


Regulatory Charge

The Regulatory Charge recovers dollar-for-dollar Austin Energy’s share of the statewide costs of managing, using, and maintaining the transmission grid, as well as other regulatory fees and penalties.

ERCOT charges and fees are based on Austin Energy’s share of the summer statewide peak demand — about 4% of the statewide total.

Statewide transmission expenses have increased approximately 20% per year since 2013, due in large part to a $7 billion expansion of transmission capacity built to deliver renewable energy from west Texas to the state’s largest cities. These costs are reviewed, approved and apportioned by the Public Utility Commission of Texas.

Regulatory Charge
  (¢ per kWh) ($ per kW billed)
Commercial
Secondary Voltage 1 < 10 kW 1.343¢ 0
Secondary Voltage 2 > 10 < 300 kW 0 $3.75
Secondary Voltage 3 > 300 kW 0 $3.75
Commercial and Industrial
Primary Voltage 1 < 3 MW 0 $3.67
Primary Voltage 2 > 3 < 20 MW 0 $3.67
Primary Voltage 3 > 20 MW 0 $3.67
Primary Voltage 4 > 20 MW & > 85% LF 0 $3.27
Transmission Voltage 1   0 $3.62
Transmission Voltage 2 > 20 MW & > 85% LF 0 $3.98


Learn More


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