Austin Utilities warns of inevitable increase

Published 12:00 am Wednesday, December 13, 2000

While utility gas prices are already squeezing customer’s wallets, word comes from Austin Utilities that the pinch may be on for a good time to come.

Wednesday, December 13, 2000

While utility gas prices are already squeezing customer’s wallets, word comes from Austin Utilities that the pinch may be on for a good time to come.

Email newsletter signup

Market prices for gas have closed far higher than expected recently, General Manager Jerry McCarthy said during Tuesday’s Board of Commissioners meeting. When buying gas from their supplier, Austin Utilities normally pays $1 million to $1.2 million per year.

In the relatively low-usage month of December 2000, costs ran to $1.5 million. McCarthy projects that the costs for January could reach $4 million.

If gas supply costs remain where they currently are, the average increase for Austin customers could be 70 percent. If gas costs go higher, the increase could be even greater.

"This has a huge, huge impact on our customers," McCarthy said. "We’re in a situation where people will have to choose between food and heat." McCarthy suggested that customers contact their senators and representatives with their concerns about the high prices, in order to urge them on to a swift solution.

Both McCarthy and Commissioner Vincent Lynch suggested turning thermostats down at least one degree to save on the expense. There could be as much as a 15 percent savings if the thermostat is set back 15 degrees lower per night, McCarthy said.

Austin Utilities presents an option to pay bills not exceeding $2,000 by credit card.

In other utility business:

n The union which represents the 11 supervisory staff members of Austin Utilities accepted a nine percent contract increase for each of the next three years. The contract term is from Jan. 1, 2001 through Dec. 31, 2003.

n McCarthy reported that utility deregulation in Austin could result in problems he witnessed firsthand in California. These include extremely high utility costs, restrictive blackout hours and the loss of businesses, due to the escalating expenses.

n The 2001 Austin Utilities budget was approved at the meeting. Electric, water and gas were divided into three individual budgets. The electric budget will equal $20 million, water will equal $1.7 million and gas will equal $12.6 million.

"The cost of electrical will remain essentially the same," McCarthy said. Increases in the gas expense depend upon the market, which means that the current market instability will result in Austin budget instability.

The water budget includes a 7.5 percent increase for previously deferred projects, including refurbishments on a water tank and tower.

n Austin Utilities awarded tree trimming responsibilities to Ted Janning of Blooming Prairie. At a cost of $75.62 per hour, which includes equipment, manpower and vehicles, Janning will work for the city for eight months, as he did last year. His services improve reliability by preventing outages due to the elements.

Janning was chosen because of the way he conducts his work, Commissioner Tom Tylutki said. "When he has to trim trees near homes, he lets (the residents) know what he is doing and why. In the past, others haven’t."

n Kelly Lady, Austin gas buyer, was granted an increase of $3,000 per year. Lady will soon graduate with a BS degree from Southwest State, obtained through an agreement with Austin Utilities. In the agreement, Austin Utilities will reimburse her for her school costs after completion, with the understanding that she must stay at Austin Utilities for five years or pay the money back.

"She has done a great job, especially in light of what’s been happening with the gas situation this year," McCarthy said.

n President Ruth Rasmussen and Commissioner Vincent Lynch were thanked for their eight years of service on the commission. "It has been a pleasure working with all of you," Lynch said. "This year has gone exceedingly fast."