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Austin Energy’s Proposed Flat Rates Worry Low-Income Advocates

Aug. 12, 2016—Beginning in January of this year, Austin’s city-owned utility, Austin Energy, has had its proposed commercial and residential rate changes under review. The City Council supplied an impartial hearing examiner and formed the Austin Energy Oversight Committee to oversee the rate case. Since that time, several interest groups have spoken up against the proposed rates in public hearings, including during one held this month.

Of particular concern to low-income advocates is the proposal to set a fixed rate for residential users that would penalize those who use the least amount of energy. The proposed flat rate would benefit households that generally use more electricity, but for those struggling to make ends meet by reducing their energy usage in an effort to save money, the flat rate is potentially harmful.

Already during this rate case, advocacy groups such as Public Citizen and Sierra Club have argued that low-income households have high home energy burdens, a claim supported by numerous studies. According to one industry-backed study, titled Energy Cost Impacts on American Families, households that earn less than $50,000 a year pay 23 percent of their annual income on home heating and cooling costs. That is considerably more than those who make more than $50,000, who only pay 7 percent of their annual income on home heating and/or cooling bills. According to this study, 48 percent of American families fall into that less than $50,000 a year category.

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