Austin Energy rate work sessions begin this afternoon, KVUE.com reports. There will be eleven in all between Austin Energy representatives and City Council. The council is asking Austin Energy to present evidence showing how much money it needs to continue to function without asking customers to overpay.
Austin Energy’s reserves, which in part determine what their credit rating is, are dangerously low. Austin Energy wants to raise enough revenue by raising rates to bring the level of reserves to $30 million. They have proposed rolling out the increase over a couple of years to help ease the burden on customers. The utility company will also review debt service coverage, or how well they can pay their debts while still paying for new improvements, and its debt equity ratio, which determines the cost of debt. Austin Energy is recommending a 50/50 debt equity ratio.
The work sessions will continue through April and City Council expects to make a final decision on rates on May 24th, so you can know how the new rates will affect your utility bill and the cost of your Austin Texas Apartment.
Photo by Cycling Octopus