Austin Energy closed its budget year $8 million short, better than the $43 million it planned, but missed all five of its financial health targets

Austin Energy spent $8 million more than it took in during the budget year that ended Sept. 30. It had budgeted for a $43 million shortfall. That is from the utility's fourth-quarter financial report, posted for the City Council's Austin Energy Utility Oversight Committee on Tuesday, Nov. 17.

The better-than-planned year still left the city-owned electric utility short of every financial health target it reports.

The targets

| Measure | Target | End of September | |---|---|---| | Days of cash on hand | more than 200 | 187 | | Debt service coverage | more than 2.5 times | 2.3 times | | Operating margin | more than 10% | 9% | | Debt to capitalization | less than 50% | 58% | | S&P bond rating | AA | AA- |

The report says the utility is in "substantial compliance" with its financial policies. Cash and reserves fell from 195 days at the start of the year to 187. A note in the report says the figures include balances from pass-through charges, such as the power supply charge for fuel and purchased power.

Where the money went

For the 12 months ended in September, in millions:

• Revenue: Base revenue was $787, $38 above budget. Power supply revenue was $577, $16 below. Other operating revenue was $518, $42 below. Total operating revenue was $1,882, about $20 short.
• Spending: Operating expenses were $1,400, $64 under budget.
• Transfers: $195 for debt service, $139 to the city's general fund, $124 for capital projects and $42 for city administrative support.

The capital budget was $422 million. Electricity sales rose 2.4%, and the average number of customers rose 1.5%, the report says.

The report also compares bills. Using federal Energy Information Administration data for 2025, it puts Austin Energy's average residential bill at $109.74 a month, against an average of $178.21 for ERCOT providers.

What our records add

Three months ago the numbers looked steadier. At the Sept. 22 committee meeting, the chief financial officer reported 188 days of cash, including about 30 days from over-collected power supply charges, and debt coverage of 2.5 times, meeting the target. She said the utility planned to go to the bond market around the end of the calendar year, with ratings from three agencies.

The bonds are approved. On Nov. 5 the council approved, without objection, up to $695 million in electric revenue bonds, refunding older debt and paying for improvements.

"Living off our savings." At a July 28 budget session, a council member asked whether next year's rate increase would rebuild reserves. The answer: not yet. "This current year and last year we were operating at a deficit," the response went, "so we've been living off our savings."

Also on the agenda

The general manager's report says:

• Solar credits rose 27% on Oct. 1. The Value of Solar rate is now 12.89 cents per kilowatt-hour for systems under 1 megawatt and 10.22 cents for larger ones.
• New state rules. Transmission and distribution pole standards will be on the council's Jan. 28 agenda. A wildfire mitigation plan must be filed with the Public Utility Commission.
• Winter preparation. Plants and substations are being winterized ahead of ERCOT inspections.

Separately, the council's 9 a.m. work session that day lists a closed session on Austin Energy generation. The utility also recently signed a battery storage deal.

What's next

The committee meets at 9 a.m. Nov. 17, the same day as the council's election canvass. Committee briefings are informational, and no vote is posted on the financial report.