Austin business energy: municipal utility

Austin is a public power city, and that changes the question

Austin Energy is a municipal utility: not-for-profit, community-owned, with no shareholders, and by its own count one of seventy-two public power utilities in Texas serving more than five million customers statewide. The practical consequence for a commercial account is that the meter has a single supplier of both energy and delivery. There is no retail provider to enrol with, no contract term to choose and no supplier price to compare against a competitor's, because the utility's rates are approved each year by the Austin City Council rather than filed in a competitive market. The approved tariff runs on a fiscal year beginning 1 October, and the rate package includes riders that only exist for a utility like this one, among them the Community Solar Rider, the GreenChoice Rider, the Solar Standard Offer Rider and a Load Shifting Voltage Discount Rider. A site that would be shopping in Dallas is, in Austin, managing a utility account.

• Austin Energy is city-owned and not-for-profit; it supplies and delivers the power on the same account.
• Rates and fees are approved annually by the Austin City Council, and the approved tariff runs on an October-to-September year.
• There is no competitive supply contract to negotiate at the meter, so the work is on class, load shape and power quality.
• Texas public power is not a corner case: Austin Energy counts seventy-two public power utilities in the state.

Ten commercial classes, cut by demand and service voltage

Austin Energy publishes ten commercial rate classes, and the boundaries are drawn on demand and on the voltage the site takes service at. The commercial classes begin at Secondary Voltage 1 below 10 kW, step to Secondary Voltage 2 from 10 kW up to 300 kW, and then to Secondary Voltage 3 at 300 kW and above. Above those sit the combined commercial and industrial classes: Primary Voltage 1 below three megawatts, Primary Voltage 2 from three megawatts up to twenty, Primary Voltage 3 at twenty megawatts and above, and two high-load-factor variants. Transmission Voltage 1 and Transmission Voltage 2 complete the set. The utility explains the grouping the way any co-operative or municipal utility does: a class is a set of customers with similar use characteristics and therefore a similar cost to serve, from a small business on the low-voltage network to an industrial site fed directly from a substation. The class a site falls into is a fact about the service, not a choice the business makes, and it is the first thing to establish because every line item below is published per class.

• Secondary Voltage 1 is the under-10 kW class; Secondary Voltage 2 runs from 10 kW to under 300 kW; Secondary Voltage 3 is 300 kW and above.
• Primary Voltage classes start below three megawatts and step at three and twenty megawatts, with high-load-factor variants alongside.
• Transmission Voltage 1 and 2 are the highest-voltage classes, the second reserved for twenty megawatts and above at a high load factor.
• A class is defined by similar use characteristics and a similar cost to serve, so class assignment follows the service, not the business type.

The demand charge starts at an average summer peak of 10 kW

Austin Energy's demand charge recovers the cost of building and maintaining the system, and the test for it is unusual in how it is measured: the charge applies to commercial customers whose average summer peak demand, taken across June through September, reaches 10 kW. An average across four months is a different test from a single worst fifteen-minute interval, and it is worth knowing which one the account is measured on, because a site with one abnormal summer month is treated more gently here than on a tariff that bills the single highest interval of the month. Below the threshold the class pays no demand charge at all and recovers cost through energy and fixed charges; above it, demand is a separate published line per class. The utility's stated purpose is to reflect the cost of serving each class and to give a customer a reason to level demand through efficiency work rather than to chase volume alone.

• The demand charge applies where the average peak across June to September reaches 10 kW or more.
• It is an average summer peak rather than a single worst interval, which forgives a one-off spike.
• The charge is published per kilowatt billed and varies by class, rising with the cost to serve that class.
• Below the threshold, the class recovers cost through fixed and energy charges instead.

High load factor earns its own class instead of a penalty

Where several Texas delivery tariffs publish load-factor bands that charge a spiky site more per kilowatt, Austin Energy does the opposite for its largest customers. Load factor is the ratio of energy used to the peak drawn over a period, and in the Austin schedule a site that holds a load factor of 85% or more gets a class of its own: Primary Voltage 2 High Load Factor and Primary Voltage 4 sit alongside the standard classes of the same size, and Transmission Voltage 2 is defined as twenty megawatts and above at a high load factor. The high-load-factor versions carry a lower published demand charge than the standard class they shadow. For an operator the reading is straightforward: a steady industrial process is rewarded rather than penalised, and a site that flattens its profile across the day may have more to gain from the class boundary than from any equipment purchase.

• A load factor of 85% or more qualifies for the high-load-factor classes above the standard class of the same size.
• The high-load-factor classes carry a lower published demand charge than the class they shadow.
• Transmission Voltage 2 is defined as twenty megawatts or more at a high load factor.
• A steady process profile can therefore change the class a site is billed on, which is a decision worth modelling before a plant expansion.

Power factor decides the kilowatts you are billed for

Austin Energy applies a power factor adjustment, and it changes the quantity billed rather than adding a fee. Power factor measures how effectively power is consumed: a site with a low power factor draws more current to do the same work, which means greater system losses and more capacity for the utility to buy or build. The tariff's rule is that where the power factor is below 90% during the interval of greatest monthly use, billed kilowatts are calculated by taking the kilowatt demand in that interval, multiplying by 90% and dividing by the recorded power factor. The adjustment applies to the electric delivery charge, the demand charge and the regulatory charge, so it compounds across the delivery half of the bill. The causes the utility names are the usual industrial set: motors running below full load, compressors, conveyors, magnetic-ballasted lighting and step transformers. Power factor correction is an engineering job with a billing consequence, and it is the kind of work a competitive supplier would never have been able to sell you.

• Below 90% power factor in the interval of greatest monthly use, billed kW rises by the ratio of 90% to the recorded power factor.
• The adjustment reaches the electric delivery charge, the demand charge and the regulatory charge.
• Motors at less than full load, compressors, conveyors and transformers are the common causes.
• Correcting power factor is a capital decision on the customer's side of the meter, with a measurable billing effect.

There is no fixed supply price: the Power Supply Adjustment

Because Austin Energy supplies the energy as well as delivering it, the supply cost reaches the customer as a pass-through. The Power Supply Adjustment recovers fuel for the utility's own plants, electricity bought from the grid and the net effect of selling power to the grid on a dollar-for-dollar basis, and it is adjusted through an administrative adjustment as power supply costs move. The Regulatory Charge is the second pass-through: it recovers the cost of using the ERCOT wholesale transmission system and other regulatory fees, with transmission costs determined by the Public Utility Commission of Texas and Austin Energy's share of that system reflecting its position as roughly four percent of the ERCOT market. For a commercial buyer this is the structural difference from a competitive market. In Dallas the supply half of the bill is a contract with a term, a price and a renewal date; in Austin it is a regulated pass-through that changes when the utility's costs change, and no broker or supplier can alter it. The variables the business actually controls are how much power it uses, when it uses it and how efficiently.

• The Power Supply Adjustment passes fuel and purchased-power cost through dollar for dollar, with an administrative adjustment as costs move.
• The Regulatory Charge recovers ERCOT transmission and other regulatory costs, with transmission set by the Commission.
• Austin Energy describes its share of the ERCOT market as roughly four percent.
• No supplier or broker can re-price these pass-throughs; only consumption, timing and efficiency move them.

What the utility's own reliability record shows

A municipal utility is accountable to its council rather than to shareholders, and Austin Energy publishes its own performance against the statewide average. In the figures it draws from its fiscal year 2025 annual report, customers experienced 0.98 interruptions a year against a Texas electric utility average of 1.40, an average interruption length of 74.30 minutes against 153.40, and an average restoration time of 76.13 minutes against 109.70. The utility notes that these figures exclude major outage events, which is the qualification that matters most for a business with a continuity requirement: the numbers describe ordinary-year reliability rather than storm performance. Read that way they are still useful, because reliability is the one part of an energy decision that a competitive contract cannot deliver. For a Dallas or Houston site the delivery utility is a fixed fact of the address; in Austin the same is true, and the operator has the additional option of holding the utility to a published record through the city's own process.

• Austin Energy reports 0.98 interruptions per customer a year against a statewide electric utility average of 1.40.
• Average interruption length is reported at 74.30 minutes against 153.40 statewide, and restoration at 76.13 against 109.70.
• The utility states that these figures exclude major outage events, so they describe ordinary-year reliability.
• Reliability is the part of an energy decision that no competitive supply contract can deliver.

Gas in Austin: Texas Gas Service and the cost-of-gas clause

Gas is not a public power story. Austin's distribution utility is Texas Gas Service Company, a Division of ONE Gas, Inc., which files its tariff with the Railroad Commission of Texas. That tariff shows the structure a commercial account works with. The commercial schedules combine a cost-of-service rate with a cost-of-gas component, calculated by applying the cost of gas under the company's Cost of Gas clause to the volume consumed in the billing month, so the commodity is a pass-through above the delivery rate rather than a bundled price. The tariff also provides for transportation service, defined as the transportation by the company of gas owned by someone else: a customer elects it on the company's transportation form with a qualified supplier, and where transportation service is elected the commodity cost of gas is not part of what the company charges. Riders apply on top, including a weather normalization adjustment and a pipeline integrity testing rider, the second of which funds the inspection work on the distribution system itself. Whether a given Austin site can transport its own gas is a question for the tariff and the account, not for the city boundary.

• Texas Gas Service Company, a Division of ONE Gas, delivers Austin gas under an RRC-filed tariff.
• Commercial schedules pair a cost-of-service rate with a cost-of-gas component applied to the volume consumed.
• Transportation service is a defined option: the customer owns the gas and elects delivery on the company's transportation form with a qualified supplier.
• Riders include a weather normalization adjustment and a pipeline integrity testing rider.

What to assemble before an Austin decision

In a market without retail choice the preparation is different, and the documents change. Establish the rate class and the service voltage from the bill, because every line item is published per class and the class follows the meter. Pull twelve months of kWh with the demand reading where the bill shows one, and note whether the peak pattern puts the site near a class boundary: the 10 kW demand threshold for the smallest commercial classes, 300 kW at the top of Secondary Voltage, three megawatts and twenty megawatts on the primary side, and the 85% load-factor line where the high-load-factor classes begin. Check the power factor history if the site runs motors or compressors, and check whether the address is inside the City of Austin, because the utility publishes rates for customers outside the city as well. For gas, take twelve months of usage in Ccf or Mcf and the schedule printed on the bill. HighGround works as an advisor-assisted channel rather than a rate table, sourcing electricity and gas supply through the Broker Online Exchange supplier network and the adjacent categories through the AppDirect ecosystem. HighGround may receive provider compensation on completed purchases, and an inquiry places no order and switches no supplier.

• The rate class and service voltage from the bill, plus whether the address is inside the City of Austin.
• Twelve months of kWh and the demand readings, checked against the class boundaries at 10 kW, 300 kW, three megawatts and twenty megawatts.
• The load factor if the site is near the 85% high-load-factor line, and the power factor history if motors or compressors run the load.
• Twelve months of gas usage in Ccf or Mcf and the rate schedule printed on the gas bill.
• Competitive supply depends on the service address, the meter and the utility territory; municipal utilities, cooperatives and some jurisdictions have no choice at all.
• HighGround may receive provider compensation on completed purchases, and an inquiry places no order and switches no supplier.

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