Monday, October 18, 2010

Austin Energy May Pass Planned Franchise Fee on to Consumers

With both individual consumers and large businesses facing the consequences of a struggling economy, everyone is looking for new ways to minimize their expenses while keeping the bottom line in their bank accounts as large and substantial as possible. It's only common sense that no one wants to pay more for a product or service than required. And, when people feel that the government is giving them no choice in the amount of money they have to spend every month, tensions may rise.

Neighborhood reaction is just starting to be shared concerning the franchise fee that Austin Energy may start paying to the cities around Austin that it services. It is not uncommon for utility companies to offer some compensation to city governments in return for being the sole energy provider in that area. Of course, it also is not unusual for these companies to cover that additional expense by passing on the cost to the consumers. To cover the $800,000 in expected franchise fees, Austin Energy is considering a three percent surcharge to its customers who live outside of Austin.

This projected change, along with the already planned rate increase for 2012, reignites the debate over government-supervised monopolies of our utilities. Some residents who live in Austin's surrounding communities and who will be affected by these price hikes are frustrated by the fact that they have no voice in Austin's City Council, the governing body that approves any decisions by Austin Energy, and would be in violation of state law if they tried to receive their energy from another company.

What are your thoughts on the planned changes to Austin Energy's fees? If you live in one of the neighborhoods just outside of Austin that is serviced by Austin Energy, what is the overall reaction in your community, if there's been a noticeable one at all?

At Bertolino LLP, we have attorneys in Austin, Houston, and San Antonio who are experienced in both business formation and business litigation. If you are considering some changes to your company's contracts or business procedures, please contact our office and we will guide you through the process in a way that follows all legal provisions and maintains strong relationships with your clients.

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