Austin Energy rate increasing 5% in December

AUSTIN (KXAN) — Changes are coming to Austin Energy's power supply adjustment rate, with a 5% increase slated to take effect on Dec. 1.

Officials said the increase is "due to a lack of adequate progress toward making up for the existing PSA under-recovery," according to a Tuesday memo. AE added the typical residential customer will see a financial impact of less than $2 each month tacked onto their AE bill.

The PSA is described as a pass-through cost to electric utility customers "for the recovery and crediting of ERCOT settlements, fuel costs, and net purchased power costs," per the release. Both the weather and ERCOT-established market prices can impact the amount of revenue collected, in turn affecting the collection and return of any under/over balances, the memo added.

Under Austin City Council's direction, Austin Energy's administrative team was permitted to increase the PSA in increments, "not to exceed plus or minus five percent."

On Nov. 1, 2022, AE reported an under-recovered PSA balance of $102 million, largely due to "extraordinary wholesale power supply costs," the memo noted. Since then, AE has tweaked the PSA rate to help recover some of the negative balance, with the current under-recovered balance remaining at $97 million.

"Based on projections of where this balance needs to be prior to summer 2024, Austin Energy must use its administrative authority to adjust the PSA upward by 5%, effective on December 1, 2023. Austin Energy anticipates using its administrative authority in future months to fully recovery power supply costs over the next two years," the memo concluded.