Possible Electric Rate Increases

        Austin Energy is strongly considering on adding a twenty two to thirty dollar fee to the monthly bills of residential customers. This has come about as a result of the various drawbacks that come with using power plants, such as nuclear waste and air pollution. In other words, Austin Energy has decided that it needs to promote energy conservation. Although Austin Energy is planning on adding the flat twenty two to thirty dollar fee it is also proposing to reduce the rates for customers who use small amounts of electricity. Those in favor of this fee argue that the fee is necessary in order to encourage customers to conserve energy. Those that are against implementing the fee argue that the fee will have the exact opposite effect by giving customers less incentive to conserve energy than if Austin Energy were to simply charge customers increasing rates for increasing amounts of electricity.

         I am not in favor of implementing the fee. If Austin Energy implements the flat fee and reduces the rates for customers who use little electricity then the customers who are already conserving energy will still have to pay more than usual as a result they are basically being punished for the extra consumption of those certain customers who use larger amounts of electricity. Since the fee will apply to everyone there will be relatively no incentive for customers to conserve energy. The best solution would be to simply charge more to customers who use a large amount of electricity and less to those who use little electricity. Now this brings up another problem. What is a large amount of electricity? According to the Chairman of a split Electric Utility Commission Phillip Schmandt, which advises the council, no home will see its electric bill rise more than twenty dollars unless it uses more than 1,500 kilowatt-hours a month. So it appears the Electric Utility Commission has decided that anything above 1,500 kilowatt-hours a month is a large amount of electricity. This seems like a reasonable number as according to the U.S.Energy Information Administration, “the average annual electricity consumption for a U.S. residential utility customer was 10,896 kWh, an average of 908 kilowatt-hours (kWh) per month.”

        And of course another huge problem the fee will certainly result in is a large number of angry customers, which is exactly what Austin Energy does not need when it is “under pressure to sell more electricity—and to sell less of it.”