Austin Utilities Board approves rate changes for 2022

Published 4:13 pm Wednesday, December 15, 2021

The Austin Utilities Board of Commissioners has approved the 2022 Austin Utilities budget and related rate adjustments at its December board meeting. 

Austin residents will see no changes on electric rates for 2022, but will see a 2% increase on water rates for both residential and commercial customers.

The effect of the overall residential water rate adjustments will be an average monthly bill increase of $.072. 

About 85% of Austin Utilities current customers are residential. Small to mid-sized business customers can expect to see monthly water increases in the range of $1.68 to $10.56 depending on the size of their meter and usage. 

AU will not make changes to the natural gas rate, but will use their Purchased  Gas Adjustment mechanism (PGA) to address anticipated winter gas increases on a month-by-month basis. During the winter months gas prices could be 30-35% higher. 

This rate change stretches clear back to the ice storm that sacked the state of Texas in mid-February. That storm disrupted gas supplies coming north and analysts were warning that spring that hits to northern natural gas prices were coming.

In April, AU Executive Director Mark Nibaur said the board acted quickly to try and lessen the blow to Austin customers, making use of reservers to help ease customers into any increases.

“I think all things considered, what we were able to do is buy gas at what was a high price, but were able to limit the amount we did buy,” said Austin Utilities Executive Director Mark Nibaur in April. “The board made the decision of using cash reserves that we have for some of these situations and spreading it out over seven months. The cost challenge was definitely lessened for customers.”

To minimize the impact of commodity price spikes to their customers, Austin Utilities will use several  tools:  

  • A Natural Gas Hedge program that locks in cost for 65-75% of our anticipated usage. 
  • A plan to increase winter hedge by up to 90% on a month-by-month basis. 
  • A Propane Air Plant that can displace natural gas load and avoid purchasing high-priced gas. 
  • A commercial gas interruptible program in which customers switch to an alternate fuel. 
  • Peak Gas Alerts to warn customers when costs are high, and conservation should be practices.  

“Our team is managing our internal costs very well, however the actual natural gas commodity we have to purchase to deliver to customers is volatile,” Nibaur said in a press release Wednesday. “The price changes daily based on supply and demand, which is why we have so many tools in place to protect our customers from high gas prices.” 

Portions of the bill related to sewer charges and storm water fees are controlled and administered by the City of Austin. Changes to these costs are not reported by Austin Utilities.  

The annual budget is used to set rates along with cost of service and rate studies performed every three years.