2022 Base Rate Review and Approved 2023 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. Base rate changes begin March 1, 2023.
Approved Residential Base Rate Changes
- Raising the Customer Charge gradually as follows:
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.
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 |
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 |
Approved Base Rate Changes for Business/Commercial Customers
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.
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.
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.
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.
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 | $14.00 per kW |
Energy Charge | 0.052¢ per kWh | 0.051¢ per kWh | 0.019¢ per kWh |
Based on these changes, this class would receive an overall base rate decrease of 1%, but actual impacts depend on electric use.
- Other relevant business/commercial base rate change information:
- Eliminating the adjustment for low load factor (<20%) customers to bring them closer to what it costs to serve them.
- Billing Houses of Worship consistent with other business/commercial customers.
- More equitably recovering discounts offered to State of Texas facilities, local school districts, and military facilities by spreading those costs across all customers.
- Billing impacts for business customers depend on business customer category as indicated above (small business, large industrial customer, etc.).
Approved Changes to the Value of Solar
- As part of the base rate review, Austin Energy proposed and received approval to update the Value of Solar (VoS). Approved changes include:
- Updating the societal benefits calculation to reflect the positive impacts of solar generation in Texas.
- Updating the avoided cost methodology to use the embedded costs approach to increase accuracy and better align with standard rate-making practices.
- Changing the Value of Solar, increasing the incentive for solar customers.
Customer Type | Previous VoS Rate ($/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) |
$0.0470 | $0.0724 |
Download Fact Sheets
Download a fact sheet that explains the approved base rate changes — available in multiple languages.
- English (pdf)
- Spanish - Español (pdf)
- Vietnamese - Tiếng Việt (pdf)
- Simplified Chinese - 中文 (简体) (pdf)
- Korean - 한국어 (pdf)
- Arabic - عربي (pdf)
- French - Français (pdf)
- Hindi - हिन्दी (pdf)
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.
Learn More
- Get more information about Austin Energy rates
- Learn about the Value of Solar
- Find help with utility bills