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Texas Bill Providing Potential for Choice at Austin Energy Advances From Committee; Fraser Says City "Addicted" To Revenue Diverted From Austin Energy

April 15, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

The City of Austin is like a "drug addict" that is "addicted" to some $156 million in annual revenues diverted from Austin Energy to city coffers, Sen. Troy Fraser said during a hearing on SB 1945, which would provide the potential opportunity for certain large customers at Austin Energy to take competitive electric supply.

The Senate Committee on Natural Resources & Economic Development yesterday reported favorably a committee substitute of SB 1945, sending the bill to the whole Senate. Text of the committee substitute was not immediately available.

As first reported by RetailEnergyX.com, the as-filed version of the bill provided that a customer or group of customers at Austin Energy, with a total usage of more than 25,000,000 kWh per year, may file a petition to have the Public Utility Commission of Texas review current or proposed rates applicable to the petitioning customers.

If, in such review, the PUC finds that the Austin Energy rates are not just and reasonable, or not consistent with the rates available to similarly situated customer areas of the state that have access to customer choice, the commission shall either:

(a) set rates for the petitioning customer or customers that are just, reasonable, and consistent with the rates available to similarly situated customers in areas of the state that have access to customer choice, or

(b) set cost-based transmission and distribution rates for the municipally owned utility and allow a petitioning customer or customers to purchase electricity through a competitive retail electric provider

During public testimony, John Bick, long-time ERCOT market veteran who was testifying on behalf of the Coalition for Clean, Affordable, Reliable Energy, reported that rates at Austin Energy are, on average, nearly 2¢/kWh higher than rates available in the competitive market for industrial customers

The use of utility revenues to fund the city's budget has been cited for the electric rate disparity.

Though aimed at large industrial customers, Fraser during the hearing lamented that he is more concerned with small businesses that don't have the leverage to negotiate superior rates with Austin Energy, unlike large industrial customers who can pressure the muni for lower rates.

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