2022 Base Rate Review and Approved Base Rate Changes

Working to Ensure Fair and Equitable Rates Along with Financial Stability

Austin City Council approved new base rates for Austin Energy on December 8, 2022. City Council approved increasing Austin Energy’s base revenues by $29.5 million to offset increased costs and provide increased stability in a changing electric landscape. These changes help Austin Energy continue to provide valuable services, encourage energy efficiency and conservation, and maintain the local electric system for our growing area. 

Approved Residential Base Rate Changes

  • Raising the Customer Charge gradually as follows:
Approved Residential Base Rate Changes
Customer Type Customer Charge Rate Change Timing
Residential, Inside and Outside the Austin City Limits
Increases by $3, from $10 to $13 Beginning March 1, 2023
Increases by $1, from $13 to $14 Beginning November 1, 2023
Increases by $1, from $14 to $15 Beginning November 1, 2024

The Customer Charge is a flat fee that all residential customers who are not in the Customer Assistance Program pay, no matter how much energy they use each month. The Customer Charge includes costs for billing, metering, and other customer account management costs.

  • Decreasing the residential billing tier amounts as the Customer Charge increases, and changing the tier structure.
    • Starting in March, residential customer bills for people living inside and outside the Austin city limits will have a four-tier rate structure tied to customer energy use.
    • Because of rising costs for electricity, this change helps move customer payments closer to covering their actual costs while making rates more equitable.
    • Your tier is based on the amount of electricity you use each month. The less you use, the lower your tier and the more you use, the higher your tier.
    • On a customer bill, energy is measured in kilowatt-hours. A kilowatt-hour is a unit of energy and measures the amount of electricity a customer uses.

Inside City of Austin – Approved Residential Tier Changes
Customer Type Tier Changes Timing
Residential, Inside the Austin City Limits
Tier 1: 0-300 kWh at 4.100 cents
Tier 2: 301-900 kWh at 5.100 cents
Tier 3: 901-2,000 kWh at 7.307 cents
Tier 4: >2,000 kWh at 10.564 cents
March 1, 2023 – October 31, 2023
Tier 1: 0-300 kWh at 3.984 cents
Tier 2: 301-900 kWh at 4.984 cents
Tier 3: 901-2,000 kWh at 7.301 cents
Tier 4: >2,000 kWh at 10.559 cents
November 1, 2023 – October 31, 2024
Tier 1: 0-300 kWh at 3.869 cents
Tier 2: 301-900 kWh at 4.869 cents
Tier 3: 901-2,000 kWh at 7.295 cents
Tier 4: >2,000 kWh at 10.554 cents
November 1, 2024 – October, 31, 2025


Outside City of Austin – Approved Residential Tier Changes
Customer Type Tier Changes Timing
Residential, Outside the Austin City Limits
Tier 1: 0-300 kWh at 4.100 cents
Tier 2: 301-900 kWh at 4.637 cents
Tier 3: 901-2,000 kWh at 6.001 cents
Tier 4: >2,000 kWh at 7.820 cents
March 1, 2023 – October 31, 2023
Tier 1: 0-300 kWh at 3.984 cents
Tier 2: 301-900 kWh at 4.524 cents
Tier 3: 901-2,000 kWh at 5.885 cents
Tier 4: >2,000 kWh at 7.700 cents
November 1, 2023 – October 31, 2024
Tier 1: 0-300 kWh at 3.869 cents
Tier 2: 301-900 kWh at 4.411 cents
Tier 3: 901-2,000 kWh at 5.770 cents
Tier 4: >2,000 kWh at 7.582 cents
November 1, 2024 – October, 31, 2025
 Actual bills depend on energy use and will vary from customer to customer, and month to month. Factors like weather, number of people in the home and changing habits in energy use all impact customer electric bills.

Approved Base Rate Changes for Business/Commercial Customers

Business Secondary Customers < 10 kW, as of March 1, 2023
Base Rates Components Previous Base Rates Approved Base Rates
Inside City Outside City All Customers
Customer Charge $18.00 per month $18.00 per month $35.00 per month
Delivery Charge N/A N/A N/A
Demand Charge N/A N/A N/A
Energy Charge 4.802¢ per kWh 4.802¢ per kWh 2.865¢ per kWh

Based on these changes, this class would receive an overall base rate increase of 5%, but actual impacts depend on electric use.

 

Business Secondary Customers ≥ 10 kW < 300 kW, as of March 1, 2023
Base Rates Components Previous Base Rates Approved Base Rates
Inside City Outside City All Customers
Customer Charge $27.50 per month $27.50 per month $55.00 per month
Delivery Charge $4.50 per kW $4.50 per kW Combined with Demand Charge
Demand Charge $4.19 per kW $4.19 per kW $9.00 per kW
Energy Charge 2.421¢ per kWh 2.356¢ per kWh 1.769¢ per kWh

Based on these changes, this class would receive an overall base rate decrease of 4.6%, but actual impacts depend on electric use.

 

Business Secondary Customers ≥ 300 kW, as of March 1, 2023
Base Rates Components Previous Base Rates Approved Base Rates
Inside City Outside City All Customers
Customer Charge $71.50 per month $71.50 per month $275.00 per month
Delivery Charge $4.50 per kW $4.50 per kW Combined with Demand Charge
Demand Charge $6.40 per kW $6.40 per kW $11.50 per kW
Energy Charge 1.995¢ per kWh 1.902¢ per kWh 1.684¢ per kWh

Based on these changes, this class would receive an overall base rate decrease of 2.7%, but actual impacts depend on electric use.

 

Primary Customers < 3 MW, as of March 1, 2023
Base Rates Components Previous Base Rates Approved Base Rates
Inside City Outside City All Customers
Customer Charge $275.00 per month $275.00 per month $300.00 per month
Delivery Charge $4.50 per kW $4.50 per kW Combined with Demand Charge
Demand Charge $7.00 per kW $7.00 per kW $11.50 per kW
Energy Charge 0.053¢ per kWh 0.052¢ per kWh 0.109¢ per kWh

Based on these changes, this class would receive an overall base rate decrease of 1.1%, but actual impacts depend on electric use.

 

Primary Customers ≥ 3 < 20 MW, as of March 1, 2023
Base Rates Components Previous Base Rates Approved Base Rates
Inside City Outside City All Customers
Customer Charge $2,200.00 per month $2,200.00 per month $2,500.00 per month
Delivery Charge $4.50 per kW $4.50 per kW Combined with Demand Charge
Demand Charge $9.17 per kW $9.17 per kW $14.00 per kW
Energy Charge 0.052¢ per kWh 0.051¢ per kWh 0.019¢ per kWh

Based on these changes, this class would receive an overall base rate decrease of 1%, but actual impacts depend on electric use.

  • Other relevant business/commercial base rate change information:
    • Eliminating the adjustment for low load factor (<20%) customers to bring them closer to what it costs to serve them.
    • Billing Houses of Worship consistent with other business/commercial customers.
    • More equitably recovering discounts offered to State of Texas facilities, local school districts, and military facilities by spreading those costs across all customers.
    • Billing impacts for business customers depend on business customer category as indicated above (small business, large industrial customer, etc.).

Approved Changes to the Value of Solar

  • As part of the base rate review, Austin Energy proposed and received approval to update the Value of Solar (VoS). Approved changes include:
    • Updating the societal benefits calculation to reflect the positive impacts of solar generation in Texas.
    • Updating the avoided cost methodology to use the embedded costs approach to increase accuracy and better align with standard rate-making practices.
    • Changing the Value of Solar, increasing the incentive for solar customers.
Approved Changes to the Value of Solar
Customer Type Current VoS Rate ($/kWh) VoS Rate ($/kWh) as of March 1, 2023
Residential and Commercial
Non-Demand
$0.0970 $0.0991
Commercial Demand
(Solar capacity < 1,000 kW-ac)
$0.0670 $0.0991
Commercial Demand
Solar capacity ≥ 1,000 kW-ac)
$0.0670 $0.0724

2022 Base Rate Review

Austin Energy policy requires a regular review of the utility's costs and revenues. From this recently completed financial analysis, Austin Energy proposed updates to its base electric rates and launched a base rate review process. The new base rates are the culmination of Austin Energy’s Base Rate Review process. The base rate review included only those costs that make up Austin Energy’s base rates, such as financial obligations and utility operation and maintenance expenses.

This process included an open and transparent review of Austin Energy’s base rate proposal by an experienced Impartial Hearing Examiner. The Impartial Hearing Examiner listened to all issues and positions from participants and made a recommendation to Austin City Council. The Austin City Council set new base rates for Austin Energy after considering the utility’s final proposal, stakeholder positions and the Impartial Hearing Examiner’s recommendation. 


Date last reviewed or modified: 02/01/2023