Austin Energy customers should be allowed to petition for fairer rates, according to new bill

A controversial new regulatory bill in Texas has reached the State Senate this week. If passed into law, the legislation would reform customer rate appeal policy, making it easier for swaths of ratepayers to contest and even overturn their energy costs with the help of the Public Utilities Commission. Does this matter take deregulation a step too far, or us it just a way city government aims to protect its customers from price gouging? 

Texans seek the power to debate their energy rates
Senate Bill 1945 states a single ratepayer or groups of utility customers can petition the Texas PUC to audit Austin Energy's rate setting practices and deem whether or not the prices are consistent with the deregulated energy market. If the commission finds Austin Energy's rates to be excessive, the petitioning parties will be given one of two options: The PUC can put forth an energy rate that better aligns with the market prices at the time of petition, or it will allow the petitioning party to purchase from a separate retail energy provider at the transmission cost of the Austin Energy.

However, the bill strictly defines the requirements for a petitioning party by the amount of energy used. Individual homeowners dissatisfied with their energy rates cannot put forth a complaint. Rather, only groups of customers with usage totaling more than 25 million kilowatt hours per year can bring the matter to the PUC. According to data from the U.S. Energy Information Administration, the average American homeowner typically uses 10,908 kWh annually. This would require a petitioning party to collect somewhere in the ballpark of 2,300 members before action could be taken.

Austin Energy customers want to make sure they're just as protected as their deregulated neighbors.

Hearing from both sides of the energy aisle
Opponents argue this measure unfairly targets city utility Austin Energy merely for being an unregulated energy organization in a deregulated state. According to the Austin Monitor, its namesake city depends heavily on the utility for its general budget to the tune of $155 million as of this year.

As a deregulated energy market, Texas ratepayers have plenty of options when it comes to their energy. One of those options, for the time being, can be Austin Energy. As a city utility, the organization has the power to set its own rates as it sees fit. Proponents of the bill counter that while this might lead to competitive pricing, the ultimate goal of passage is to address gaps in current legislation that don't give ratepayers enough power to fight unjust business practices.

Though KXAN Austin reported Mayor Steve Adler may technically be opposed to the bill itself, that does not necessarily mean he underestimates the importance of transparency in a public utility.

"We're going to be looking at Austin Energy with new eyes, this new council," he said, "And we're going to be taking a look at the business model that Austin Energy has."

This content is property of ESCO Advisors and all reproductions must reference and link back to the ESCO Advisors website.