Electric Rate Cut for Local High-Tech Passes City Council

Last year, Microsoft came to central Texas looking for a spot to build a new $550 million data center. Austin lost out to San Antonio mostly because the City of San Antonio offered the company a better break on electricity rates for the new project.

Since then, Mayor Will Wynn and the Austin City Council have been pursuing a new proposal to cut electric rates for certain types of large high-tech companies in order to attract them to Austin. The proposal is, essentially, an incentive program aimed at large, energy-ravenous semiconductor companies that are considering setting up shop in Austin, but only if the deal is sweet enough.

Yesterday, City Council took this rate reduction proposal up for discussion. Predictably, semiconductor representatives spoke in favor of it. Consumer advocate groups spoke in opposition to the selective rate decrease, claiming that it would simply shift the cost to residential consumers in the form of higher rates ($4 dollars extra on all of our electric bills per year, to be exact). They also claimed that similar large businesses in Austin already pay half what residential ratepayers pay, and this proposal would just give them an even bigger break on their electric bills. Later in the hearing, local environmental groups claimed that, while this plan might attract new, highly lucrative business to Austin, it would also encourage our current reliance on inefficient energy practices instead of advancing the cause of energy efficiency in Austin.

Despite these concerns, the proposal passed City Council unanimously with a 7-0 vote.

What do you think, Austin? Is this proposal good for Austin? Do you think City Council's plan will work?

Contact the author of this article or email tips@austinist.com with further questions, comments or tips.

By s in News on April 6, 2007 2:28 PM 0 Comments

Comments [rss]

enuff-z-enuff

Didn't the City Council know anything about this story that came out in the paper this week?

Climate change already under way in Texas http://www.statesman.com/news/content/news/stories/local/04/07/7climate.html?cxtype=rss&cxsvc=7&cxcat=52

Businesses shouldn't get special concessions on energy rates, especially at a time when we all need to do more to help the relieve the effects of global warming. I work for a semiconductor company here in town and, believe me, there are no programs in place to alleviate energy usage.

M1EK

James,

Your argument only holds if Austin's paying less for these good jobs than we could on the open market (without subsidy) - i.e., if we're NOT having any trouble getting high-paying jobs to move here (and we're not), then it doesn't make any sense to subsidize a batch of them.

Randy

Wes, really? Or did you just sleep in a Holiday Inn Express last night?

Wes

Actually, James, I am an economist.

James

Obviously none of your are economists. Neither am I. But, I listened to the economic arguement and I get it; since other State governments support incentives (State of Tx would rather gag than help blue Austin) and since our low-pay town is in need of higher paying jobs, and when employees have good jobs, they buy instead of rent (or improve their homes) (property tax) and spend more (sales tax) then the city makes more money.

All because our flooded-with-cash electric utility is giving a bulk discount just like you get at Costco. - Seems pretty simple.

Wes

Giving tax breaks to businesses isn't a bad idea in and of itself. The city just needs to make sure that the terms of the contract allow us to recoup those breaks if the business closes up shop and leaves town early.

daniel

wynn's a dildo who'll sell this city to the highest bidder. current development and cuts like these to fill those developments....

Stew

I don't care if it makes economic sense, it's not the city's money to be spending/gambling with. They should be more respectful with the taxes which they are lucky to be receiving.

heyzeus

Corporate welfare at its finest. Microsoft is a needy, underprivileged upstart, right?

marty

m1ek, i agree with you 100% (for once!)

M1EK

Retarded. You only give away the store when you have to; there's plenty of companies who want to be here without a handout.

San Antonio needs to give the handout, because, frankly, their image sucks, and high-tech employees don't want to live there. We ought not descend to their level unless necessary.