December 18, 2008 News Media Release
No Fuel Charge Increase for 2009

The Austin Energy fuel charge of 3.65 cents per kilowatt-hour (kWh) will not change for 2009.

Natural gas prices have been a key driver in pushing up the fuel recovery charge over the past 10 years. However in recent time, natural gas prices have stabilized.

Last July, natural gas was trading at $12.67/mmbtu for deliveries in 2009. Since that time, natural gas prices have been in a sharp decline with 2009 prices now trading in the low $6.00/mmbtu range -- a decrease of over 50%. Natural Gas prices further out in the 2010 to 2013 timeframe have also decreased falling from $11/mmbtu to around $7.50/mmbtu, a decrease of more than 30%. The downturn underscores the volatility of natural gas prices, which can jump up just as quickly due to extreme weather or unforeseen worldwide events.

Natural gas costs are the largest component of the Austin Energy fuel charge which is a dollar-for-dollar recovery of the cost of fuel (coal, nuclear, natural gas) used to meet the power demands of Austin Energy customers. Of the roughly $400 million Austin Energy spends annually on fuel to operate its power plants, more than half is needed to pay for natural gas. The fuel charge also recovers the cost of purchased power and Austin's share of fees to support the operation of the statewide electric grid.

The fuel charge represents almost 40 percent of a monthly residential electric bill. The other 60 percent of the bill is the energy charge, which pays for Austin Energy operations. The energy charge (base rates) has not been increased since 1994. The energy charge during winter months (November - April) is 6.02 cents/kWh.

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