The Austin Energy Rate Review

What it means for Austins Faith Community

Texas Impact

12/15/11

The Big Picture

No rate review since 1994 Austin Energy says it requires = $1.136 billion.

(This is called Revenue Requirement)

Current revenues $1.004 billion. An additional $131 million or 13.2% increase

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The Revenue Requirement

Really complicated, but know: Its an art not a science Gets litigated in what is known as a rate case. If it shrinks, all customers benefit.
City

Council can shrink it Public Utility Commission (state) can shrink it in a rate case.

Texas Impact believes it is overinflated They could just increase everyone 13.2% across the

board, but

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Cost Allocation Methodology

So congregations arent paying their true cost of

service?

Also not a science, but an art. Outcome depends on methodology

Different methodologies exist Average Excess and Demand (AED) Baseload, Intermediate, Peak (BIP) 4CP Austin Energy picked AED AED favors high load factor users over low load factor users BIP favors low load factor users over high load factor users
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The General Fund Transfer

Like other Municipally owned utilities

Austin Energy transfers roughly 10% of gross revenues to the City $101 million in FY 2010 Sales tax Property tax General Fund Transfer City budget is dependent on rates taking effect in October 2012 GFTs have potential to be a cash cow for city governments Tax Justice: regressive form of revenue

3 main components of Citys General Revenue Fund

An issue to be aware of

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Projected Increase in Annual Electric Costs by Customer Type Under Austin Energys Proposed Rate Plan
90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% -10.0% Worship Facilities Residential Small Commercial <10KW Medium Large Commercial Commercial 50 10-49 KW KW or more Primary Voltage <3 MW Primary Voltage 3-19 MW Primary Voltage 20+ Transmission Voltage

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Faith Community as Part of Larger Community

Total Austin Energy Revenue = $1.004 Billion (FY 2009) Austin Faith Community = Currently, $5 million

annually in electric bills; or 1/2 of 1% of total revenue

Projected Increase = $9 million or an additional $4

million annually from the faith community

As a class, an increase of roughly 80%.
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Texas Impacts Goals

We want to pay our fair share 80% is not fair. Our Goals
Make it Affordable: Protect low-income ratepayers Make it Fair: Negotiate the most fair increases for Houses of Worship Make it Green: Protect the environment with a more green design

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Low-Income Customers
Faith Community interconnected with low-income

community
If faith communitys rates go up, then less money for ministries that benefit the community. If low income rates go up, then the fewer families we can help with our limited benevolence funds.

Fixed Charge = a customer owes regardless of usage The new fixed customer charge added to the new

fixed delivery charge quadruples fixed charges from $6 to $25 a month.

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Inadequate Low-Income Programming (CAP)

Customer Assistance Program (CAP) Fixed Charges Currently CAP participants exempt from fixed customer charge No guarantee CAP will continue to do so Inadequate Funding Over 50,000 families in Austin on food stamps Cap currently covers less than 10,000 customers Proposal doubles funding, (from $3.1 mil to $7.7 mil) but at most covers 26,000 customers only the Citys need. About a $15 million dollar issue
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12/15/11

Inadequate Low-Income Programming (EE)

Proposal raises roughly $28 million for energy

efficiency and solar programs

All ratepayer pay the charge on the bill Austin Energy needs to commit to providing green programs to low and moderate income families.

Its just Equity Weatherization saves families $ Unfair to make poor people pay for rich peoples solar panels

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Houses of Worship
All Houses of Worship will be

billed in the Commercial Class

621

will be charged based on peak demand for the first time For those who have not paid demand charges in the past they will phased in over 3 years (energy (kWh) charges will decrease as demand (kW) charges increase)

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Case: El Paso Electric

Problem: Houses of Worship were assessed demand

charges for the first time; bills skyrocketed Reaction: Religious Leaders filed complaints in Texas and New Mexico with regulatory authorities Solution: An agreement was reached to implement a 20% cap for the energy portion of their bill per facility.

Customers who are:

Off-peak users, with low load factors, Charitable organizations, and Recently reassigned a rate class with demand charges

This solution was approved by the El Paso City

Council and the Public Utility Commission

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Austins Design is not Green

Complicated case to make Must understand the nuances of the rate design Were going to have to examine the structure of the

rate so lets circle back to this

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Rate Design 101

WHAT?! 80%?! WHY?!

80%?! Why?
Short Answer: Demand Charges Three basic types of charges on a bill
Fixed

(flat fee everyone pays regardless of usage)

Harms

very green & low-income customers Relatively insignificant for faith community
Energy

(kwh)(measured like a house) Demand (kW)(measurement of peak)

Delivery

Charge Demand Charge; and Regulatory Charge

All could be based on energy, but AE chose demand
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KW Demand vs. KWH Consumption

Example: A 60 Watt Light Bulb
Needs

continuous 60W to run This is the Demand (measured in KW) Under 60W, and lights go out At any one moment in time

A 60W Bulb Run for 1 Hour

=

60 Watt/hour Or .060 kwh Measure of total consumption (in kwh)

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Put Another Way: Two Different Measurements

Measure #1 = Total KWH

Consumption

Over billing cycle Basis for the energy charge

Measure #2 = Peak KW
Highest

peak in any moment over billing cycle Basis for the demand charge

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Current Electric Rates

(Residential & General Service Non-Demand)

So run that one light bulb for 360 hours for that

billing cycle 60W x 360 hr = 21,600 Watt/hours; or 21.6 KWh Hypo: Utility charges $0.10/KWh Then 21.6 KWh x $0.10 = $2.16 This is how homes and most worship facilities are currently billed

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Proposed Commercial Rates

(Add a Demand Charge)

Back to Light Bulb Example 1 Light Bulb = 60W or .06 KW 300 bulbs = 18 KW 18 KW x $15 per KW = $270 Just for flipping the switch one time
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How Worship Facility Bills Would Work

Bill = Fixed Charges + Energy Charges +

Demand Charges

Fixed Charge = $25 Demand Charge = $270 Energy Charge = $180

300 bulbs (60W) x 100 hours = 1800 kwh @ $0.10/kwh

$475 = $25+$270+$180

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A Large Church in Austin

Read Date 12/16/09-1/19/10 1/19/10-2/16/10 2/16/10-3/17/10 3/17/10-4-15-10 4/15/10-5/16/10 5/16/10-6/16/10 6/16/10-7/18/10 7/18/10-8/17/10 8/17/10-9/16/10 9/16/10-10/17/10 10/17/10-11/15/10 11/15/10-12/15/10 Total Annual Texas Impact KWH Usage 29,000 25,600 23,600 32,000 53,000 71,400 92,600 98,200 95,400 64,400 42,600 28,000 655,800 KW Demand 102 202 210 226 242 276 264 268 272 242 220 250 Avg. LF% 34.8% 18.9% 15.6% 20.3% 29.4% 34.8% 45.7% 50.9% 48.7% 35.8% 27.8% 15.6% Current Bill $2,754.45 $2,430.77 $2,240.37 $3,040.05 $5,984.25 $8,067.13 $10,466.97 $11,100.89 $10,783.93 $7,274.73 $4,085.81 $2,683.33 $70,912.68 Total Projected Bill $2,996.83 $4,228.36 $4,237.70 $4,896.34 $6,205.27 $8,144.89 $9,128.15 $9,495.92 $9,402.45 $6,793.62 $5,358.99 $5,027.58 $75,916.10 % Increase 8.80% 73.95% 89.15% 61.06% 3.69% 0.96% -12.79% -14.46% -12.81% -6.61% 31.16% 87.36% 7.06%

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A Church w/ DG Solar Panels

Read Date 8/10/11-9/10/11 7/12/11-8/10/11 6/10/11-7/12/11 5/11/11-6/10/11 4/11/11-5/11/11 3/10/11-4/11/11 2/9/11-3/10/11 1/11/11-2/9/11 12/9/10-1/11/11 11/8/10-12/9/10 10/11/10-11/8/10 9/10/10-10/11/10 Total Annual Texas Impact KWH Usage 16,880 9,440 14,880 10,160 8,640 5,120 4,440 3,760 3,760 3,440 4,960 8,800 94,280 KW Demand 96.00 96.00 79.20 91.20 78.40 76.00 56.80 37.60 30.40 40.00 58.40 84.80 69 Avg. LF% 23.6% 14.1% 24.5% 15.5% 15.3% 8.8% 11.2% 14.4% 15.6% 11.6% 12.6% 13.9% Current Bill $2,292.08 $1,279.79 $1,761.12 $1,203.87 $1,024.42 $608.85 $579.24 $341.13 $341.13 $312.85 $448.98 $942.30 $11,135.76 Projected Bill $2,438.60 $2,030.07 $2,075.60 $1,872.54 $1,614.00 $1,398.56 $1,093.32 $788.09 $686.78 $805.34 $1,142.67 $1,826.14 $17,771.73 % Increase 6.4% 58.6% 17.9% 55.5% 57.6% 129.7% 88.8% 131.0% 101.3% 157.4% 154.5% 93.8% 59.6% % from kWh charges (Solar) 37.87% 37.93% 43.45% 40.61% 40.58% 40.47% 36.89% 53.04% 53.04% 52.91% 53.16% 48.02% 44.83%

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A Large Church w/ Multiple Meters

Preschool & Sanctuary
Read Date KWH KW Avg. Projected Usage Demand LF% Current Bill Bill % Inc. 177 159 150 156 168 177 177 276 255 240 213 144 191 11/28/10 45,900 12/28/10 46,800 1/27/11 45,300 2/24/11 39,900 3/29/11 50,400 4/27/11 48,300 5/30/11 57,600 6/28/11 59,400 7/27/11 64,200 8/29/11 77,100 10/3/11 69,600 11/2/11 50,100 Total 654,600 Texas Impact 32.7% $4,473.03 $4,924.29 10.1% 22,400 40.9% $4,218.76 $4,717.48 11.8% 23,200 41.9% $4,166.24 $4,513.43 8.3% 26,800

Family Life Center

KWH KW Avg. Projected Usage Demand LF% Current Bill Bill 168 200 208 212 164 172 180 172 188 212 204 144 185 15.9% $2,179.66 16.1% $2,088.14 17.9% $2,462.20 19.1% $2,499.04 17.2% $2,056.91 18.0% $2,363.03 18.2% $2,847.51 24.9% $3,155.82 25.7% $3,684.35 26.7% $4,917.58 19.7% $3,816.48 30.1% $2,884.33 $3,584.82 $4,076.35 $4,374.71 % Inc. 64.5% 95.2% 77.7%

38.1% $3,668.84 $4,319.16 17.7% 27,200 37.9% $4,635.99 $5,029.90 8.5% 22,400

$4,451.63 78.13% $3,528.54 71.55% $3,599.82 52.34% $4,205.26 47.68% $4,238.45 34.31% $4,743.14 28.74% $5,719.81 16.31% $4,731.31 23.97% $3,701.31 28.32%

39.2% $5,302.97 $5,048.15 -4.8% 21,600 41.1% $6,326.99 $5,895.21 -6.8% 26,000 32.0% $6,525.18 $7,485.97 14.7% 28,800 36.2% $7,053.71 $7,433.07 5.4% 33,600

40.6% $8,474.14 $7,915.36 -6.6% 44,800 37.8% $7,648.31 $6,653.97 -13.0% 34,800 48.3% $4,635.42 $4,676.74 0.9% 31,200

38.4% $67,129.58 $68,612.74 2.2% 342,800

20.6% $34,955.05 $50,955.14 45.77%

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Consumption Curve for Current Worship Facility Rate Class (E01C)

Texas Impact

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Commercial Rate Design is not Green

For low load factor users like worship facilities: Value of energy efficiency cut in half Value of DG solar panels cut in half Value of choosing Green Choice cut in half Green Choice Customers: Demand charges go to pay

for coal, gas and nuclear so-called brown power

So who is this really benefiting?

Texas Impact

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2009 Average Industrial Rates

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12/15/11

What You and Your Congregation Can Do

Contact City Council

Letters, Emails, Phone Calls, Letters to the Editor to get their attention
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Message to Council
Make it fair
80% is grossly disproportionate to the faith community. Cap the increase at 20% per customer. Low-income people cannot handle the increase in a recession.

Make it affordable
Some congregations will close under current proposal. Some families will go under which will leads to a cascade of economic harm for all.

Make it green
Energy production & consumption harms the environment Demand charges do little to protect the environment.

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Timeline
Contact your City Council immediately. Wed Dec 14th: Austin Energy presents their

proposal to City Council Council will set the schedule (after Dec 14th) for approving the rates. Rumor is Jan 12th for public hearing. Rumor is also that the city budget is depending on the Austin Energy Rate Increase to take effect in October 2012.
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What You and Your Congregation Can Do

Get the Word Out in your Community

Email your contacts; Publish information in your newsletter; Reach out to other congregations; Discuss the issue with Neighborhood

Association. Send us your bills

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Tools to Lower Your Demand

GOOD ADVICE REGARDLESS OF AUSTIN ENERGYS RATE RESTRUCTURING

Think About Your Facility

How many lights? What kind?

60W bulb or 18W CFL w/ equivalent lumens? 1/3rd of energy and demand

Appliances?
Avg. Dishwasher = 1.2 KW 5 computers = 1.2 KW Avg. Water heater = 3.8 KW Refrigerator = 1.5 KW What kind of HVAC?

If all are running at once

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A Bit of Research
Most appliances say somewhere near where

it plugs in Watts = Volts x Amps Most American appliances = 120V Visit: energystar.gov/congregations
How to guides Portfolio Manager

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HVAC

For 1,000 member congregations or less,

HVAC = 70% of electric bill

Talk to an HVAC professional, but generally 1,000 sq. ft = 2.5 ton unit = 3.5 KW (avg. residential) Small church = 20 ton unit = 90 KW Medium = 40 ton = 150 KW Large like FBC = 280 ton, but
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New Units vs. Old Units

How old is yours? FBC Case Study:
Old

Units (1980s) =

chillers: 206 ton large unit & 40 ton mini unit. Avg. Demand 200-270 KW
New

Unit = 280 tons, but

Technology

to control load Max Demand Only 154 KW

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Counter-Intuitive, but
Might be cheaper in the long run to

replace it if its older than 15 years HVAC is prob around 70% of your bill Look into programmable thermostats Technology to control HVAC from computer & even from smart phones But investments take money
Texas Impact

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HB 2077: LoanSTAR Stewards Pilot Program

Texas Impact helped pass HB 2077 by

Rep. Eddie Rodriguez last session A low-interest revolving loan fund for EE improvements set up in the State Energy Conservation Office Cost-effective requirement loan paid back through energy savings Must be up and running by March 2012
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Thank You
Contact Texas Impact with questions regarding the rate case or your bills. Texas Impact: 512 472 3903 www.texasimpact.org

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12/15/11