Mayor against electric rate hike plan

AUSTIN (KXAN) - Mayor Lee Leffingwell says he's against the rate increase proposed by Austin Energy even though he agrees that the city-owned power company needs more cash to keep the lights on.

"It should be plain to every informed observer that our electric utility is at a crossroads," the mayor said in a blog post date Sunday.  "Austin Energy has not sought a rate increase in 17 years. To put that in perspective, the average price of a gallon of gas in 1994 was $1.11.

"So while I agree that an adjustment is appropriate and necessary to ensure the long-term financial health of our utility, I do see problems with the current proposal."

The Council last week heard from several residents who did not support the proposed restructuring of Austin Energy's rates. Many said it the plan would prove too burdensome for most residents and for churches.

Leffingwell says the utility should go back to the drawing board.

"First, I believe we need clarity on Austin Energy’s future revenue requirements,".he said in his blog  "Until the council has full confidence that the revenue requirements are based on sound analysis and projections, it will be impossible to debate any rate increase.  Every dollar saved by verifying the utility’s revenue requirement now will be a dollar saved by a customer later.

"Second – assuming that the revenue requirements prove justified – I can’t support a plan in which residential rates are increased so out proportion to corporate rate increases."