How the City of Austin Makes Money (or Doesn't) Every Time the Weather Changes

Aug 29, 2016

Every time the weather changes, the City of Austin either makes money or takes a hit to its bottom line. That’s because Austin owns its own water and electric utilities. Their revenue is tied to what it’s like outside, and the weather this year has upset a lot of expectations.


Take Austin Energy, the city’s electric utility.

“This time of August is when Austin Energy sees its highest usage,” says Carlos Cordova, an Austin Energy spokesperson.

Cordova says the reason is that this is typically the hottest time of year, and there are more people in town returning for the start of the academic year. That means there are more people and they have their AC cranked up.

But this year was different. Early August was hot. Austin even broke an electricity usage record early in the month. But then an unseasonable cold front came in, bringing with it a lot of rain. Electricity use dropped and utility revenue that had already taken a hit from a mild winter dropped too.

“Between the mild winter and now the cooler weather that we’re experiencing now for an August, we’re projecting that our revenues will be $18 million less than what we had projected,” says Cordova.

If you’re a rate payer, that means more money in your pocket. But if you’re a city budget writer with a multimillion dollar hole, you’re probably wondering where to make up the shortfall. You might be casting a glance to Austin’s city-owned water utility.

David Anders, assistant director of financial services at Austin Water, says water usage also plummeted with those august rains. In fact, it dropped about 90 million gallons from one day to the next, as people stopped watering their lawns.

But when you look at the year overall, the water utility’s brought in about $12 million more than expected. It could be that people are finally forgetting about the years-long Texas drought.

“This is really the first year coming out of the drought and relaxing some water restrictions to some extent,” says Anders. “We’ve been really conservative of our pumpage projections, and for this year we’ve been above those projections.”

There’s not much time for the weather to change the financial picture for either utility, and Austin closes out its fiscal year next month.