As you may know, Austin Energy’s new rates became effective November 1st, 2021 and rate changes were less than we anticipated and may even equate to an energy cost reduction in months with lower peak demand.
Here are the specific rate changes for commercial customers on the AE 300kW plus rate; The new rates consist of a $0.55/kW (4%) increase in the Peak Demand (kW) charge and a decrease of $0.002/kWh (-6.5%) in the fuel (PSA) rate. Austin Energy’s “Power Supply Adjustment” (PSA), sometimes referred to as the “fuel charge”, is intended to cover the volatility in fuel cost for AE’s generation facilities.
As can be seen in this image of Austin Energy’s fuel charges and Natural Gas (NG) prices, a seeming disconnect has occurred between Austin Energy’s PSA charges and NG prices.
The new rates impact on your facility(ies) will vary as peak demand and kWh changes from month to month. On average, we would assume the all-in ($/kWh) unit cost to increase between 0% to 1/2% which is much less than anticipated. Which is great news for energy cost in 2022. We do think, however, that another fuel cost increase (PSA) may be implemented in 2022. It is also not great news for Austin Energy clients who signed up for Green Patron in 2021 as they will not benefit from the lowering of the PSA charge.
Again, the best approach to mitigate energy cost continues to be Pro-active Energy Management Strategies.