FY 2023 Rate Increase – Frequently Asked Questions
New Braunfels Utilities entered the third year of its City Council-approved three-year rate plan on Monday, August 1, 2022. As a not-for-profit entity, New Braunfels Utilities’ rates are designed to cover the cost of providing essential services and upgrading and expanding existing infrastructure to support the needs of our growing community.
To help you prepare and understand how the increases will affect your utility bill, we’ve compiled answers to commonly asked questions below.
Many customers have experienced higher Purchased Power and PCRA charges this summer. While 72% of the PCRA is due to energy market volatility, 28% is due to NBU’s need to recover the $93 million incurred by ERCOT’s price increases during Winter Storm Uri. To mitigate the impact of the PCRA during a time when bills are already higher due to the current heat wave and drought, NBU is initiating interim reductions in the PCRA for August and September. Effective August 1 through September 30, 2022, NBU customers will see a $0.021 per kWh reduction in the PCRA portion of their bill, representing an overall 11.95% reduction to the electric portion of the bill.
The energy market is one of the most volatile commodity markets; prices vary in as much as 15 minutes depending on market situations and supply and demand. Utilities typically take long-term approaches to hedge energy. Some enter into long-term contracts at a contracted amount for all their energy needs (20 + years). This type of hedging is known as a full-requirements contract. Some utilities enter into energy deals for portions of their needs, then contract with another entity to handle the remainder of their energy needs. This approach is the riskiest and is known as a load-following contract. Some utilities build power plants and must acquire the fuel to run the plant; this doesn’t remove risk; it just transforms it into a different type of risk. Other utilities apply various combinations of the above. New Braunfels Utilities takes a cost-blending approach that blends the cost of power for any one moment across multiple power purchases bought at different periods of time.
When considering the larger picture of the energy market landscape, utilities will almost never have the same energy costs because they buy different products from various supplies at different times.
While ERCOT does run both the day ahead and real-time energy markets, most utilities are getting very little power from those markets, especially the real-time market. The reason is that those two markets, while sometimes cheaper, are more volatile in price than contracting with another energy supplier at an earlier point in time before we need the energy.
New Braunfels Utilities’ cost of power prices differ from GVEC and PEC due to the fact that each entity purchases energy in different ways and at different times. Buying energy from the same supplier for the same delivery period can have vastly different pricing if the time entered into a deal differs.
New Braunfels Utilities must recover the debt incurred during Winter Storm Uri in order to protect its bond rating. The portion of the PCRA to collect for Winter Storm Uri will be reinstated this fall. New Braunfels Utilities passes the cost of purchasing energy from ERCOT directly to its customers with no markup. A strong bond rating helps NBU keep its utility rates as low as possible with lower interest rates.
For a customer using 1,400 kWh per month, the Winter Storm Recovery portion of the PCRA is currently $29.40. The current electric and PCRA rates can be found at nbutexas.com/electric-rate-breakdown.
New Braunfels Utilities will enter the third year of its three-year rate plan on August 1, 2022. The New Braunfels City Council approved the three-year rate plan in October 2020, with a November 1, 2020, effective date for the first year. The three-year rate plan was designed to help fund the costs of capital improvement projects currently in design or in progress for Fiscal Years 2021 – 2025. Currently, there are 153 capital improvement projects in progress or being planned.
The NBU FY 2023 five-year operating plan includes more than $871 million in capital improvement projects. As our service area grows, these projects support our mission of enhancing the quality of our community by providing innovative essential services.
For the average customer with electric usage at 1,400 kWh, and water (6,500 gallons), and wastewater services (3,300 gallons), the combined rate increase due to changes in rates (and excluding variable market adjustments reflected in the PCRA) is 5.99% or an increase of $11.59. For a complete breakdown of electric, water, and wastewater rates and a comparison of FY 2022 and FY2023 rates, visit nbutexas.com/rate-change.
View NBU’s utility rate comparisons to neighboring utilities.
New Braunfels Utilities recognizes that utility bills may continue to be a challenge for customers in the face of global energy market volatility, the heat wave and drought, and other widespread factors. We want to be a resource to our customers to help them manage their utility bills in every season. Customers are encouraged to explore our bill management and conservation resources.
Our Conservation and Customer Solutions experts are ready to provide customers with valuable insights into their household energy and water consumption, complete personalized home assessments, and share customized conservation tips. Additionally, customers may call Customer Service at 830.629.8400 for personalized assistance.
The cost of natural gas has increased; however, customers typically use less gas at home in the summer, so customers may not notice the price rise. The high usage season for gas is in the winter, when customers use it to heat their homes.
According to the U.S. Energy Information Administration, U.S. residential natural gas usage in the winter can be more than 30 billion cubic feet per day (bcf/d), while in the summer is three bcf/d, which is 10 times more in the winter.
Natural gas has two peaks: one in the winter for residential and commercial heating and one in the summer for producing electric power. Read more at https://www.eia.gov/todayinenergy/detail.php?id=42815.
New Braunfels Utilities will work with customers individually to help those who are having difficulty paying their utility bills. Contact our customer service team at 830.629.8400 or email@example.com to customize a payment plan.
New Braunfels Utilities is not disconnecting service for non-payment during the high summer temperatures. Service disconnections for non-payment will resume when temperatures drop in the fall. Customers struggling to pay their bills are urged to call or email our Customer Service team to set up a payment plan to avoid service disconnection.
Water rates for average residential household domestic use (6,000 gallons) are the lowest among surrounding utilities and lower or right above the average cost for customers who have usage in the higher tiers.
The daily cost for water during Peak rates for the average domestic user is .93 cents a day; this is an increase of .06 cents per day over the FY22 rate.
- Residential customers with domestic usage lower than 7,500 gallons will not be charged the Water Supply Fee. They will only be charged a usage rate and availability charge.
- If a Residential Customer uses over 7,500 gallons on their domestic meter, only the usage over the 7,500 will be assessed the Water Supply Fee.
- To calculate your usage charge, divide your monthly usage in excess of 7,500 gallons by 1,000, then multiply by the rate.
The Drought Surcharge is assessed when New Braunfels Utilities is in Stage III and Stage IV as follows:
- Stage III – $1.00 per 1,000 gallons for residential greater than 15,000 gallons and irrigation usage greater than 7,500
- Stage IV – $2.00 per 1,000 gallons for residential greater than 15,000 gallons and irrigation usage greater than 7,500
The Drought Surcharge is assessed to encourage conservation when water flows and levels are stressed due to lack of rainfall.
The availability charge is fixed; it will not change with your usage. The charge is based on the size of your meter. Most residential customers have a 5/8″ meter.
There are four tiers for residential rates
- Tier 1 – 0 – 7,500
- Tier 2 – 7,501 – 15,000
- Tier 3 – 15,001 – 25,000
- Tier 4 – Excess of 25,000
- Residential and Commercial irrigation usage is billed on a tier structure.
- All irrigation usage will be assessed the Water Supply Fee.
- Two seasonal periods (Off-peak, October through May, Peak June through September)
- There are three tiers for irrigation rates:
- Tier 1 – 0 – 7,500
- Tier 2 – 7,501-25,000
- Tier 3 – Excess of 25,000
The Water Supply Fee will be applied to all commercial accounts according to their usage.
There are four tiers for commercial rates:
- Tier 1 – 0 – 5,000
- Tier 2 – 5,001 – 50,000
- Tier 3 – 50,001 – 200,000
- Tier 4 – Excess of 200,001
- Residential customers with an established history greater than 12 months are billed based on an average of their three lowest months of domestic usage.
- New Customers with less than 12 months of water usage history are billed the lowest of the two: monthly usage or 150 gallons per number of days in the service period.
- The daily cost for an average (4,600 gallons) residential customer is $1.90 per day, increasing by .21 cents over the FY22 rate.
- Usage on the irrigation meter is not used to calculate the wastewater charge.
- The availability charge is fixed; it will not change with your usage.
No, irrigation meters are exempt from wastewater usage charges.
Wastewater usage charges are based on an average of your three lowest months of water usage in a 12 -month rolling period. One month of higher than normal usage should not affect your wastewater usage charges.
Commercial customers will be assessed wastewater charges based on their monthly water usage; there is no averaging of months of usage.
Restaurants, Cafeterias, Cleaners, and Carwashes will be charged a Chemical Oxygen Demand/Total Suspended Solids surcharge.
- This charge is based on a value determined by our Treatment and Water Compliance lab.
Commercial account holders pay the availability charge. The amount paid is determined by the size of the water meter on the account.
Base charges, such as availability, generation/transmission, and delivery, for electric usage are lower or right at the average rate among surrounding utilities.
The only increase in electric base rates for FY 2023 (August 1, 2022 – July 31, 2023) is to the availability charge and the delivery fee.
- The availability charge will increase $1.55 per month.
- The delivery fee increase is .0014 per kWh.
The August 2022 daily cost for a residential customer with 1400 kWh is $6.36 per day; this is a decrease of .86 cents per day over the July 2022 rate. The breakdown is:
- 62 cents per kWh (total for a bill based on 1400 kWh usage)
- The current range of electric prices in Texas: 8.8 to 18 cents/kWh, according to EcoWatch: https://www.ecowatch.com and Wattbuy: https://wattbuy.com.
The Purchased Power, delivery, and PCRA rates are multiplied by the monthly kWh usage to determine the charges. When calculating the PCRA, customers should note that the PCRA is not a fixed rate, and each customer will be assessed charges based on their individual usage.
Depending on where you live in the city, the service period for your current bill includes usage from the previous month. Your bill will always include availability charges and city services, even if your usage is zero.
Flat rate charges such as availability, solar meter delivery fee, and city services are prorated. Customers’ first and final bills, with more or less than 30 days, will reflect the different amounts based on usage. Otherwise, it is a charge assessed monthly.
The New Braunfels City Council approved the three-year rate plan in October 2020.
The PCRA is based on each customer’s monthly kWh usage. The current rate is multiplied by your kWh usage. Several years ago, the line item was changed from Power Cost Recovery Factor (PCRF).
The energy market volatility was unanticipated and elevated quickly, complemented by the heat wave, which has produced prolonged 100-degree days, and extremely high electric use; on average, customers are using 32% more energy compared to last year. There was no way to predict the extreme volatility of the energy market we are now experiencing. NBU continues to work to find ways to soften the impact to lessen the strain on our customers. If you are having difficulty paying your bill, please reach out to our Customer Service team at 830.629.8400; a representative will work individually with you to develop payment options.
The PCRA charge has always been on customers’ bills; however, the PCRA rate may change each month.
The PCRA charge is assessed on all billed kWh usage. If you used 1000 kWh and your system generated 50 kWh, the PCRA will be calculated on 950 kWh.
No, the PCRA is only a charge assessed on kWh electric usage.
The PCRA varies each month based on fuel costs to generate electricity and rises and falls as fuel costs rise or fall and do not impact rates.