Last month, SaveOnEnergy.com told you about looming electric rate hikes at Austin Energy, where customers cannot choose their electric provider, and are instead subject to the city monopoly for electricity.
"Austin Energy's rates are soaring, while rates elsewhere are declining. State officials will want to know why Austin Energy's residential rates have escalated sharply because statewide average rates have dropped by 14 percent and are still falling," one customer wrote to the Austin American Statesman.
The customer notes that Austin Energy, under its new energy rate proposal, would impose an "inclining block" rate structure on customers, where higher levels of usage pay a higher per kilowatt-hour rate. In parts of Texas open to competition, like Dallas and Houston, customers can choose the rate design that best fits their usage (flat rate, Time of Use, declining or inclining block, etc.), but at Austin, everyone would be subject to the same "one size fits all" product.
"The proposal features high rates and other anticompetitive elements that assume the utility will remain a monopoly forever," the customer continues. "Without monopoly protection, Austin Energy cannot survive in the competitive marketplace ... By making itself an outlier, the utility will become an inviting deregulation target."
Meanwhile, as previously observed by SaveOnEnergy.com, the Austin American Statesman noted that even as monopoly Austin Energy is seeking a huge electricity rate increase, Austin Energy's contribution to the City of Austin's general fund grew from $77 million in 2006 to $105 million this year, while Austin Energy's net earnings went from $53 million to a projected negative $76 million.
This transfer of dollars from captive ratepayers to the city's general fund is being protested by Austin Energy customers who live outside of the City of Austin, but within Austin Energy's franchised service area, who must pay for these wealth transfers through their electric rates, but have no say in how the money is used since they cannot vote for Austin city council.