EUC reviews Austin Energy�'s proposed 2027 budget and urges a formal 2027 rate case with an evening public hearing

Austin Energy's finance director, John Davis, presented the utility's proposed 2027 budget to the Electric Utility Commission on July 20, telling commissioners the proposal reflects about $110 million of additional projected revenues over FY26 driven primarily by a 5% base-rate increase and customer/load growth.

Davis said approximately $40 million of the projected increase is tied to the planned 5% base-rate adjustment and about $21 million to load and customer growth; he also noted power-supply pass-through changes and a production tax credit benefit tied to nuclear operations. "The $110,000,000 is comprised of the increase in base rates, which is about $40,000,000 related to the planned 5% base rate increase and an additional $21,000,000 related to load growth and customer growth," Davis said.

Davis outlined operating and maintenance expenses of roughly $619 million (about 30% of the total), major CIP plans totaling approximately $3.2 billion over five years (financed roughly 27% with cash and 73% with debt), and projected adjustments to debt service and reserve transfers as the five-year plan proceeds.

Following the budget briefing, Commissioner Cyrus Reed introduced a resolution asking City Council to hold a separate evening public hearing on the 2027 proposed rate increase and to initiate a formal 2027 rate-case process, using FY26 as the cost-of-service year. Reed and other commissioners said the rate-case process provides a structured, adjudicative path (with an independent administrative law judge and a consumer advocate) for stakeholders to evaluate rates and allocations.

Staff finance leadership said revenue-adequacy reviews and cost-of-service studies are part of routine financial policy; Stephanie Koudelkam, Austin Energy CFO, confirmed the last full test year was FY21 and that FY26 would be the next in routine review. Commissioners asked for additional modeling (including longer-term, 20-year comparisons) showing the long-term financial effects of major capital projects such as proposed peaker plants.

The commission approved the resolution as amended (a friendly clarification on customer charge language) and will forward the recommendation to City Council. Staff agreed to provide additional budget material and longer-range modeling if requested.