What it means for Austin’s Faith Community

November 29, 2011

The Austin Energy Rate Review

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

The General Fund Transfer

Austin Energy transfers roughly 10% of gross revenues to the City of Austin.

$101 million in FY 2010One of the 3 main components of City’s

General Revenue Fund – (sales and property tax)

Is this a proper way to raise taxes? (Procedure) “Phantom tax:” not obvious like a sales or property tax Lack of representation for AE customers not in Austin

Tax Justice (Equity) More regressive than a flat sales tax on the poor Not just the poor, but the middle class too

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…

Percent Increase Under Current ProposalPercent Increase Under Current Proposal

Faith Community as Part of Larger Faith Community as Part of Larger CommunityCommunity

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%.

Texas Impact’s Goals

We want to pay our fair share80% is not fair.Our Goals

Protect low-income ratepayers Negotiate the most fair increases for Houses of

Worship Protect the environment with a more green design

Low-Income Customers

Faith Community interconnected with low-income community If faith community’s 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.

Inadequate Low-Income Programming (CAP)

Customer Assistance Program (CAP)Fixed Charges

Currently offsets the fixed customer charge No guarantee it 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 ½ the City’s need.

About a $15 million dollar issue

Inadequate Low-Income Programming (EE)

Proposal raises roughly $28 million for green programs

We support this. However, no commitment to funding green programs that benefit low and moderate income households

All ratepayers pay the on bill chargeUnfair to make poor people pay for rich

people’s solar panels without programs to save the less affluent on their monthly bill through energy efficiency as well. Its just Equity.

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)

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

Austin’s Design is not Green

Complicated case to make

Must understand the nuances of the rate design

We’re going to have to examine the structure of the rate so let’s circle back to this…

WHAT?! 80%?! WHY?!

Rate Design 101

80%?! Why?

Short Answer: Demand ChargesThree 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)(like a house) Demand (kW)

Delivery Charge Demand Charge; and Regulatory Charge

All could be based on energy, but AE chose demand

KW Demand vs. KWH ConsumptionKW Demand vs. KWH Consumption

Example: A 60 Watt Light Bulb Needs continuous 60W to run This is the “Demand” 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

Put Another Way: Two Kinds of Put Another Way: Two Kinds of MeasurementsMeasurements

Total Consumption Over Billing Cycle Basis for the “Energy Charge” 60W x 1 of hours = 60 watt/hours; or .060

kwh

Biggest Demand at One Moment over Billing Cycle Basis for the “Demand Charge” KW Demand for one bulb = 60 Watts

Current Electric Rates Current Electric Rates (Residential & General Service Non-Demand)(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/KWhThen 21.6 KWh x $0.10 = $2.16This is how homes and most worship facilities

are currently billed

Proposed Commercial Rates Proposed Commercial Rates (Add a Demand Charge)(Add a Demand Charge)

Light Bulb = 60W or .06 KW

300 bulbs = 18 KW

18 KW x $15 per KW = $270

Just for flipping the switch one time

How Worship Facility Bills Would WorkHow 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

A Large Church in AustinA Large Church in Austin

Read Date KWH Usage KW Demand Avg. LF% Current Bill Total Projected Bill % Increase

12/16/09-1/19/10 29,000 102 34.8% $2,754.45 $2,996.83 8.80%

1/19/10-2/16/10 25,600 202 18.9% $2,430.77 $4,228.36 73.95%

2/16/10-3/17/10 23,600 210 15.6% $2,240.37 $4,237.70 89.15%

3/17/10-4-15-10 32,000 226 20.3% $3,040.05 $4,896.34 61.06%

4/15/10-5/16/10 53,000 242 29.4% $5,984.25 $6,205.27 3.69%

5/16/10-6/16/10 71,400 276 34.8% $8,067.13 $8,144.89 0.96%

6/16/10-7/18/10 92,600 264 45.7% $10,466.97 $9,128.15 -12.79%

7/18/10-8/17/10 98,200 268 50.9% $11,100.89 $9,495.92 -14.46%

8/17/10-9/16/10 95,400 272 48.7% $10,783.93 $9,402.45 -12.81%

9/16/10-10/17/10 64,400 242 35.8% $7,274.73 $6,793.62 -6.61%

10/17/10-11/15/10 42,600 220 27.8% $4,085.81 $5,358.99 31.16%

11/15/10-12/15/10 28,000 250 15.6% $2,683.33 $5,027.58 87.36%Total Annual 655,800 $70,912.68 $75,916.10 7.06%

A Church w/ DG Solar PanelsA Church w/ DG Solar Panels

Read Date KWH Usage KW Demand Avg. LF% Current Bill Projected Bill % Increase% from kWh

charges (Solar)

8/10/11-9/10/11 16,880 96.00 23.6% $2,292.08 $2,438.60 6.4% 37.87%

7/12/11-8/10/11 9,440 96.00 14.1% $1,279.79 $2,030.07 58.6% 37.93%

6/10/11-7/12/11 14,880 79.20 24.5% $1,761.12 $2,075.60 17.9% 43.45%

5/11/11-6/10/11 10,160 91.20 15.5% $1,203.87 $1,872.54 55.5% 40.61%

4/11/11-5/11/11 8,640 78.40 15.3% $1,024.42 $1,614.00 57.6% 40.58%

3/10/11-4/11/11 5,120 76.00 8.8% $608.85 $1,398.56 129.7% 40.47%

2/9/11-3/10/11 4,440 56.80 11.2% $579.24 $1,093.32 88.8% 36.89%

1/11/11-2/9/11 3,760 37.60 14.4% $341.13 $788.09 131.0% 53.04%

12/9/10-1/11/11 3,760 30.40 15.6% $341.13 $686.78 101.3% 53.04%

11/8/10-12/9/10 3,440 40.00 11.6% $312.85 $805.34 157.4% 52.91%

10/11/10-11/8/10 4,960 58.40 12.6% $448.98 $1,142.67 154.5% 53.16%

9/10/10-10/11/10 8,800 84.80 13.9% $942.30 $1,826.14 93.8% 48.02%

Total Annual 94,280 69 $11,135.76 $17,771.73 59.6% 44.83%

A Large Church w/ Multiple A Large Church w/ Multiple MetersMeters

Preschool & Sanctuary Family Life CenterRead Date

KWH Usage

KW Demand

Avg. LF% Current Bill

Projected Bill % Inc.

KWH Usage

KW Demand

Avg. LF% Current Bill

Projected Bill % Inc.

11/28/10 45,900 177 32.7% $4,473.03 $4,924.29 10.1% 22,400 168 15.9% $2,179.66 $3,584.82 64.5%

12/28/10 46,800 159 40.9% $4,218.76 $4,717.48 11.8% 23,200 200 16.1% $2,088.14 $4,076.35 95.2%

1/27/11 45,300 150 41.9% $4,166.24 $4,513.43 8.3% 26,800 208 17.9% $2,462.20 $4,374.71 77.7%

2/24/11 39,900 156 38.1% $3,668.84 $4,319.16 17.7% 27,200 212 19.1% $2,499.04 $4,451.63 78.13%

3/29/11 50,400 168 37.9% $4,635.99 $5,029.90 8.5% 22,400 164 17.2% $2,056.91 $3,528.54 71.55%

4/27/11 48,300 177 39.2% $5,302.97 $5,048.15 -4.8% 21,600 172 18.0% $2,363.03 $3,599.82 52.34%

5/30/11 57,600 177 41.1% $6,326.99 $5,895.21 -6.8% 26,000 180 18.2% $2,847.51 $4,205.26 47.68%

6/28/11 59,400 276 32.0% $6,525.18 $7,485.97 14.7% 28,800 172 24.9% $3,155.82 $4,238.45 34.31%

7/27/11 64,200 255 36.2% $7,053.71 $7,433.07 5.4% 33,600 188 25.7% $3,684.35 $4,743.14 28.74%

8/29/11 77,100 240 40.6% $8,474.14 $7,915.36 -6.6% 44,800 212 26.7% $4,917.58 $5,719.81 16.31%

10/3/11 69,600 213 37.8% $7,648.31 $6,653.97 -13.0% 34,800 204 19.7% $3,816.48 $4,731.31 23.97%

11/2/11 50,100 144 48.3% $4,635.42 $4,676.74 0.9% 31,200 144 30.1% $2,884.33 $3,701.31 28.32%

Total 654,600 191 38.4% $67,129.58 $68,612.74 2.2% 342,800 185 20.6% $34,955.05 $50,955.14 45.77%

Commercial Rate Design is not Green

While not as dramatic for high load factor users, 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 going to pay for coal, gas and nuclear

So who is this really benefiting?

2009 Average Industrial Rates

What You and Your Congregation Can Do

Contact City Council

Letters, Emails, Phone Calls, Letters to the Editor to get

their attention

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.

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 by Jan/ Feb at the earliest

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.

What You and Your Congregation Can Do

GOOD ADVICE REGARDLESS OF AUSTIN

ENERGY’S RATE RESTRUCTURING

Tools to Lower Your Demand

Think About Your Facility…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…

A Bit of Research…A Bit of Research…

Most appliances say somewhere near where it plugs in

Watts = Volts x AmpsMost American appliances = 120VVisit: energystar.gov/congregations

How to guides Portfolio Manager

HVACHVAC

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…

New Units vs. Old UnitsNew Units vs. Old Units

How old is yours?FBC Case Study:

Old Units (1980s) = 2 chillers: 206 ton large unit & 40 ton mini unit.

Avg. Demand 200-270 KWNew Unit = 280 tons, but

Technology to control load Max Demand Only 154 KW

Counter-Intuitive, but…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 billLook into programmable thermostatsTechnology to control HVAC from computer & even from iphone

“But investments take money…”

HB 2077: LoanSTAR Stewards Pilot HB 2077: LoanSTAR Stewards Pilot ProgramProgram

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

Thank You

Contact Texas Impact with questions regarding the rate case or your bills.

Texas Impact: 512 472 3903 www.texasimpact.org