It is no secret that energy prices have increased in the past 10-20 years due to factors such as increased energy needs and inflation. The figure below shows the general U.S. trend of energy prices by sector for 2000-2008.
In Austin,TX, the energy provider Austin Energy claims on their website that their customers enjoy “some of the lowest rates among major Texas cities.” This may be true. However, the next line on austinenergy.com states that, “Austin Energy’s base electric rates have not increased since 1994.” According to statesman.com on 12:21 a.m. Friday, Feb. 3, 2012, “The city-owned utility is seeking to keep the 12.5 percent average rate increase it initially proposed but phase it in over two steps. Sometime this year, rates would rise 8.7 percent, although the increase would hit homes, churches and some other classes of customer much harder. Another 3.8 percent increase would kick in around October 2014.”
It seems that Austin Energy can no longer claim that their rates have not increased. The question is: why? Because this is the first increase in base price in 17 years in Austin, many are alarmed. The fact is, however, that Austin is behind in increasing rates, meaning that they have not kept up with inflation and increasing costs of energy. Austin Energy is in major need of price increase to salvage their finances. In addition, with an increase in revenue, Austin Energy will be able to add to their operations and improve overall the utility in Austin.
As is common in Austin, this change did not happen quickly. The need and movement for this energy price increase has taken place over many years, starting in late 2009 publicly and not coming to resolve until 2012 – a resolution that ends in 2014.