January 1, 2008 News Media Release

Fuel Charge Increased January 1

The fuel charge fuel portion of Austin Energy electric bills increased January 1, 2008 from 3.04 cents/kilowatt-hour to 3.65 cents/kWh.

As a result, a residential customer using the system average 1,000 kWh will see their monthly electric bill increase by $6.09. This represents about a 7% increase to the customer’s overall electric bill. The fuel charge represents about one-third of a residential electric bill.

Reasons for the Decrease
The increase in the fuel charge was necessary for two reasons.

The first factor: Austin Energy will be required to utilize more natural gas-fired generation during 2008 because units we co-own at both the South Texas Project (nuclear) and the Fayette Power Plant (coal) will be off-line for several months each for scheduled maintenance and for refueling at the STP. This will require the use of more natural gas-fueled replacement power. On a fuel-cost basis, natural gas is 12 to 15 times more expensive than nuclear power and about four times more expensive than coal-based power.

The second factor: Increased rail transportation costs for Austin Energy’s share of coal delivered to the Fayette Power Project. Austin Energy has benefited from a highly favorable coal transportation contract that expires this spring. The cost of the new contract is expected to be significantly higher. Transportation represents about 70% of the delivered cost of coal.

Base Rates Do Not Change
Austin Energy base electric rates that pay for power plants, the electric system, personnel and equipment will not change. AE base electric rates have not increased since 1994. The Austin Energy fuel charge continues to be among the lowest in Texas due to our diverse fuel mix. 

AE’s fuel charge is a dollar-for-dollar recovery of the cost of fuel used for generating energy for retail sales, purchased power and certain related Electric Reliability Council of Texas (ERCOT) costs. There is no profit added to the fuel charge.

GreenChoice Not Affected
AE customers who subscribe to the Austin Energy green power program, GreenChoice®, are not impacted by this fuel charge change because they pay a fixed green power charge instead of a fuel charge.

For more information, contact Ed Clark, Public Information.
Phone: (512) 322-6514
Pager: (512) 802-2000