City council to decide on Austin Energy rates

City council members will meet Thursday to consider how best to increase Austin Energy's power supply, which could lead to big hikes for some customers.

Why it matters: Council members have delayed their decision as they grapple with how to balance Austin Energy's costs with the steep increases to residential and commercial customers.

The big picture: Austin Energy officials say the utility needs an additional $111 million in power supply adjustment revenues and needs to make a corresponding $111 million increase in operating requirements.

• They proposed increasing "pass-through" charges by 71% and regulatory charges by 24% beginning Nov. 1. That would increase residential customers' bills by about $20 a month.
• The proposals could also cost small restaurants, department stores and hotel bills thousands of dollars, the Austin American-Statesman reported.

Meanwhile: The utility also proposed a change to the flat monthly fee for all residential customers, which could increase bills to $25 a month.

• City council members are separately considering the base rate review.

What they’re saying: Austin Energy officials blame the increase on regulatory changes to the state's power grid and high natural gas prices, which has left utilities across the state struggling to catch up with costs.

The other side: Business groups have urged the utility provider to find a more gradual approach to raising rates, which the utility raised as a possibility during a city council work session.

• "It will lead to large users seeing over 40% increases on their electric bill and business owners struggling with millions of unbudgeted costs," Ed Latson, CEO of the manufacturers association, told the Statesman. "It is another example of Austin Energy's disregard of their customers, who were not provided any guidance or forecast."

What's next: Council members will take public comment during the meeting, which begins at 10am.

• Watch it online here.