Austin Energy Rates & ENERGY STAR November 2017

As you are probably aware, Austin Energy just approved a new rate plan which becomes effective on November 1, 2017. Although these new rates are not available yet on the Austin Energy website, the rate plan was distributed by Austin Energy’s key account group, as well as BOMA Austin. Unfortunately, these distributions included a number of “typos,” originally indicating fuel cost (PSA) increases of 17%.

The good news is that Austin Energy has now sent out a corrected rate plan. In the image below, we are comparing the current rate plan with the rate plan that becomes effective on November 1st for buildings inside the Austin city limits, that are either on the 300kW plus or the 10kW – 300 kW rate plan.

As you can see, the fuel cost is increasing by almost 8% during the 8 non-summer months. We have calculated the implication for a typical commercial office building, and it would appear that on average the monthly Austin Energy utility cost will increase between 2 and 2.5%.

As there have been at least two previous rate plans distributed by Austin Energy, we want to stress that we cannot guarantee this will be the final version. Should a new rate plan be distributed by Austin Energy, we will update accordingly.

Many of our clients were surprised to hear about the increase in fuel cost (PSA). As we understand it, the fuel cost is intended to reflect Austin Energy’s cost of fueling their power plants. As these prices are influenced by market forces, the argument is that Austin Energy can pass increases (or decreases) to their customer base without the approval of the Austin City Council. In the past, Austin Energy has only changed these rates once or twice per year. Other utilities (CPS Energy in San Antonio, for example), change the fuel component on every invoice.


Please note that the EPA has extended the deadline for applying for ENERGY STAR® Certification for 2017 until December 15th. Blue Ocean has grown our portfolio of clients we assist with the ENERGY STAR certification process and to date we have certified approximately 30% of all office buildings in the Austin area.

Today is ENERGY STAR Day! Give us a call if you are interested in achieving the ENERGY STAR certification.

If you have any questions please feel free to contact us at:
Office: 512-600-7060
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New Austin Energy Rates

Austin Energy (AE) finally settled on a new rate structure for all customers. In general, most, if not all AE customers, will see a decrease in energy costs.  For commercial accounts, the reduction will be most pronounced during the summer months as AE is eliminating the seasonality charges for peak demand and energy charges.  The new rates will be implemented over a two month period starting with the November 2016 AE invoice.

The biggest change, in our view, is the changes to the commercial customer rate classes.  Please recall that the commercial rate applicable to your property depends on which “demand class” your property belongs to as measured (metered) by summer month’s peak demand (kW).

The bulk of Austin Energy’s commercial customers fall into two rate classes based on peak demand. Smaller commercial properties are typical in the 10>50kW rate class and larger commercial properties in the 50kW and greater rate class.  With the new rate plan the commercial rate classes are changed per the chart above.

Please note that AE has not yet published the approved rate plan but we believe the information provided above to be correct. Unfortunately, it is not all good news as some components of the AE rate plan will result in increases of certain charges. Furthermore, it is our view that the recent increase in energy prices, specifically natural gas prices will result in AE having to increase the fuel charge (Power Supply Adjustment) in 2017.

If you want to find out more about Austin Energy’s new rate structure for commercial properties the Building Owners and Managers Association (BOMA) Austin, who was a key player in the rate discussions, is hosting a seminar on October 13th at Frost Bank where Blue Ocean will be talking about the new rates, load factor, peak demand and managing your electric bills. The seminar is open to all.