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Environmental groups sign on to Austin Energy rate compromise

Two major environmental advocacy groups signed on to Austin Energy’s $42.5 million overhaul of its rate structure Thursday, after scoring concessions aimed at ensuring the shutdown of part of the coal-fired Fayette power plant.

Under the agreement with the Sierra Club and Public Citizen, Austin Energy will aside $5 million to pay down debt associated with the Fayette Power Project, and it committed to providing a timeline by 2017 for shutting down its share of the facility. The utility had already committed to closing its share of the facility by 2022.

“They’ve already committed to closing (Fayette), but there’s no implementation plan. That’s what this puts us on the path to having,” said Kaiba White, who led the talks for Public Citizen.

The money would come from the utility’s existing reserves and would only be spent if the utility found that paying down the debt was needed to close the facility. The utility co-owns the power plant with the Lower Colorado River Authority.

The two environmental advocacy groups are the latest to join onto the compromise between Austin Energy and many of its largest customers, including Samsung Austin Semiconductor and NXP Semiconductors, under which the utility would cut its revenues by $42.5 million annually — using the money to dramatically restructure its rates.

Under the plan, to which the City Council is scheduled to expected to give final passage on Monday, $36.5 million would be dedicated to cutting electric rates for many commercial and industrial users, who have long complained Austin Energy was charging them far too much. Some major customers, such as some large hospitals and data centers, could see their electric rates fall by nearly 24 percent under the deal.

An additional $1 million would go to cutting electric bills for small businesses.

Meanwhile, the utility would use $5 million to overhaul its residential electric rates, a controversial move that raises the base electric rate, while trimming the costs of its more expensive tiers for customers with higher usage. The utility would also combine its summer and regular electric rates into one system to lower bills slightly during the summer, while raising prices during the winter.

The changes, the utility predicts, mean the average Austinite would save about $20 a year, though some could see their bills fall by nearly $60. However, those who manage to stay within the base electric rate could see their bill rise by $6.

Some critics have blasted the changes, saying they punish conservation. The utility says the changes will put it on more solid financial footing by making it less reliant on heat waves — and corresponding spikes in electricity usage — to pay its bills.

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