Austin Energy Freezes Fuel Charge

Customers to benefit from drop in natural gas futures

Austin Energy Freezes Fuel Charge

Good news for Austin Energy customers: the local energy utility has announced that their keeping their fuel charges for electricity static for the next year.

Electricity bills break into two sections: the fuel charge, which pays for the fuel to produce the electricity, and the energy charge, which pays for infrastructure and operational costs. Currently, AE customers pay 3.65 cents/kWh (kilowatt-hour) in fuel charges and 6.02 cents/kWh for the energy charge. The announcement locks in the fuel component for 2009.

In a press release, AE spokesman Ed Clark put this down to natural gas prices stabilizing after a decade of increases. It's all to do with the futures market. In July, natural gas for delivery in 2009 was trading at $12.67/mmbtu (million BTU), and that's since dropped to $6. Over the same period, 2010-2013 deliveries have dropped from $11/ mmbtu to $7.

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