Procurement News Notice |
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| PNN | 2404 |
| Work Detail | The Austin City Council has a unique opportunity to help the city’s smallest businesses stabilize their electricity bills and simplify their charges when the council adopts its new budget in September. Of Austin Energy’s more than 455,000 ratepayers, about 6,000 are small businesses who are paying demand charges for usage that is largely out of their control, and they are least able to afford dramatic spikes in charges. Prior to 2012, Austin Energy never assessed demand charges on small businesses when demand was less than 20 kilowatts per hour, which is the maximum flow of power a customer uses at any one time. (These businesses paid charges only for consumption per their kilowatt-hour meter — just like residential ratepayers. Larger businesses have paid demand charges for years and are accustomed to dealing with them.) Despite an October 2011 unanimous Electric Utility Commission recommendation to retain the 20kWh threshold, City Council voted in 2012 to lower the 20kWh threshold to 10kWh, where it remains today. Beginning Oct. 1, 2012, small businesses were required to pay demand charges when their demand was 10kWh or more during their highest 15-minute kilowatt demand in any one of the June through September summer billing months. Once becoming eligible, these higher rates apply for at least 12 months and then continue until 12 months have passed without a 10kWh or higher demand meter reading. In addition to lowering the demand threshold, the new 2012 rates for 10kWh to 20kWh businesses were not implemented correctly. In early 2014, Austin Energy discovered that demand charges during the summer of 2013 were not identified and billed small businesses for the underpayments. Once the error was rectified, the average impact to those businesses was about $826 added to their next monthly bill. Because of so much flak from about 7,700 small businesses that had never seen a bill with demand charges, the council approved Austin Energy’s proposal last fall to average the four summer peak months and assess demand charges only when the average is 10kWh or more. This change exempted about 1,700 small businesses from demand charges beginning in January 2016, leaving the forgotten 6,000. One reason Austin Energy asked to lower the 20kWh threshold to 10kWh was to encourage businesses to make energy efficiency improvements and thereby reduce their electricity consumption. However, at least 70 percent of small businesses occupy rented space, and they usually don’t make improvements to the building they occupy. This means the small businesses are mostly limited to improving lighting efficiency and replacing inefficient motors. Also, these small businesses are too small and too diverse to “spike” the overall Austin Energy system (the electricity they use represents less than 2 percent of Austin Energy’s overall output), which is another reason given for demand charges. The September City Council budget votes represents a golden opportunity to combine the original 20kWh threshold and assign a kilowatt-hour rate designed to collect the same revenue as in Austin Energy’s proposed budget. Since the 0 to 10kWh business class includes several times more businesses than the 10kWh to 20kWh group, it may be that a three-tier rate, without demand charges, would be more equitable than a single rate for the below-20kWh class. In no way should there be a shortfall to be recovered from other rate classes. It’s just that this group of 6,000 small business owners would no longer have to be concerned with demand charges, load factors and complex electric bills. They will be free to run their businesses without worrying whether some needed activity is going to cause a demand meter to “spike” at 10kWh or more, costing them potentially thousands of dollars in unanticipated demand charges. What’s not to like? It is high time to give more than lip service to our valuable small businesses, who also are important job creators. |
| Country | United States , Northern America |
| Industry | Energy & Power |
| Entry Date | 03 Sep 2016 |
| Source | http://www.mystatesman.com/news/news/opinion/fath-austin-council-should-fix-small-business-elec/nsLxt/ |
