{"id":421043,"date":"2026-08-30T13:29:57","date_gmt":"2026-08-30T13:29:57","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-tx\/421043\/"},"modified":"2026-08-30T13:29:57","modified_gmt":"2026-08-30T13:29:57","slug":"what-would-abbotts-deregulation-plan-mean-for-austin-energy-customers-the-austin-chronicle","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-tx\/421043\/","title":{"rendered":"What Would Abbott\u2019s Deregulation Plan Mean for Austin Energy Customers? \u2022 The Austin Chronicle"},"content":{"rendered":"

One day after Gov. Greg Abbott announced a moratorium on new data centers<\/a> until an audit of their strain on natural resources is completed, he pitched another part of his Keep Texas Affordable agenda<\/a>: that municipally owned utilities in Texas should be opened up to market competition<\/a>. He called Austin Energy and San Antonio\u2019s CPS Energy \u201cmonopolies that drive up costs for Texas families and small businesses,\u201d and argued that customers could \u201csave more than 10%\u201d if they could shop around the retail electricity market. But would deregulating Austin Energy really reduce Austinites\u2019 monthly bills?<\/p>\n

\u201cIt\u2019s a reach to say categorically that customers are going to save energy through competition,\u201d said Kaiba White, a member of the city\u2019s Electric Utility Commission and climate policy and outreach specialist for Public Citizen, a consumer advocate nonprofit. She explained that although retail electric providers often offer short-term deals at a fixed rate, they typically raise rates later, requiring customers to be market savvy and shop around for the lowest rate. \u201cYou have to be willing to pretty consistently be on top of that, and that does not describe your average consumer when it comes to electric bills or anything else. Even if the rate goes up, even if they are dissatisfied by it, they just don\u2019t have the time and the bandwidth [to switch].\u201d<\/p>\n

Austin Energy\u2019s residential bills are around $60 less per month than the statewide average, according to AE spokesperson Matt Mitchell. This is largely due to energy efficiency and green building programs that reduce customers\u2019 usage, and AE\u2019s ownership of profitable generation resources. And if customers have a problem with their bill, they can pursue accountability through political channels. \u201cOur customers are the owners of the utility, and they have direct access to the board of directors, which is the City Council,\u201d said Roger Duncan<\/a>, former Austin Energy general manager and City Council member. \u201cAnd there are citizens\u2019 committees like the Electric Utility Commission and the Resource Management Commission that focus on programs to lower customers\u2019 electric bills. A private utility will not be providing you programs to lower your electric consumption. It\u2019s against their interest.\u201d<\/p>\n

So who would benefit from deregulation? In his statement, Abbott conceded that \u201csmall businesses\u201d would see \u201ceven greater savings\u201d than residents would. But Duncan said \u201cthe only winners in this situation are the large industrial customers [who] can afford to be shopping the market regularly.\u201d White agreed: \u201cThe larger the customer, the more staff they\u2019re going to have dedicated to managing their energy procurement.\u201d<\/p>\n

If large customers leave, AE\u2019s revenue will go down, which will affect the already-tight city budget. Around 13% of the FY 2026-27 budget comes from the General Fund transfer, wherein AE and Austin Water transfer a set percentage of their revenues toward services like EMS, fire, libraries, and parks. If the utility provider is deregulated, that transfer would certainly be lower, causing the city to raise taxes or cut services. Council has asked for the maximum tax rate increase of 3.5% in the last two budget cycles (and voters rejected the city\u2019s proposal<\/a> for more, Prop Q, last fall). \u201cSo it\u2019s definitely something for the City Council to be worried about,\u201d said White. In a statement to the Statesman<\/a>, Mayor Kirk Watson said the deregulation process would \u201ccost over a billion dollars that would be paid by customers.\u201d<\/p>\n

Changing the structure of AE could also affect Austin\u2019s climate plan, which relies heavily on AE\u2019s Resource Generation and Climate Protection Plan to 2035<\/a>. Duncan fears \u201cthe climate plan would be gone. It\u2019s based on the fact that we own our generation resources and can plan on generation. It would be extremely hard for Austin, in my opinion, to continue with their climate protection plan under a deregulated utility.\u201d<\/p>\n

White said the resource plan might change, but \u201cwhether or not that would be positive or negative for the environment, I\u2019m not 100% sure.\u201d She posits that AE would have less incentive to make investments like their recent gas peaker<\/a> plan, which they justified as a stopgap measure to support large projected load growth. White said if the industrial customers that drive that growth leave AE, \u201cthey\u2019re probably going to have to rethink that type of gamble.\u201d<\/p>\n

In the FY 26-27 budget that passed earlier this month, Austin Energy raised its rates due to increased operating costs. Along with water, trash, and other city fees, that amounts to an increase of $14.34 per month or $172.08 per year on the average utility bill. White said, by approving these rate increases without requiring AE to go through the rigorous rate case process, Council is failing to regulate the public utility. \u201cI don\u2019t think that\u2019s doing customers any favors,\u201d she explained. \u201cAnd frankly, it doesn\u2019t help now when we\u2019re entering into this conversation with the Legislature.\u201d\u00a0<\/p>\n

Still, she said, \u201cthat doesn\u2019t mean that they need to be open to competition.\u201d Even with her critiques of the local provider, White said, \u201cas an Austin Energy customer, I\u2019d rather have my money going into my local city government than to some investor wherever.\u201d Most importantly, she thinks it\u2019s still the best deal around: \u201cI don\u2019t think that, for residential customers, there\u2019s a lot of better long-term options.\u201d<\/p>\n

This article appears in August 28 \u2022 2026<\/a>.<\/p>\n

A note to readers:\u00a0Bold and uncensored,\u00a0The Austin Chronicle\u00a0has been Austin\u2019s independent news source for over 40 years, expressing the community\u2019s political and environmental concerns and supporting its active cultural scene. Now more than ever, we need your support to continue supplying Austin with independent, free press. If real news is important to you, please consider making a donation of $5, $10 or whatever you can afford, to help keep our journalism on stands. <\/p>\n","protected":false},"excerpt":{"rendered":"One day after Gov. Greg Abbott announced a moratorium on new data centers until an audit of their…\n","protected":false},"author":2,"featured_media":421044,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[132,15959,134,133,1551,392],"class_list":["post-421043","post","type-post","status-publish","format-standard","has-post-thumbnail","category-austin","tag-austin","tag-austin-energy","tag-austin-headlines","tag-austin-news","tag-feature","tag-greg-abbott"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/421043","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/comments?post=421043"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/421043\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media\/421044"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media?parent=421043"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/categories?post=421043"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/tags?post=421043"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}