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Ott: Weiss to lead Austin Energy, be highest-paid city employee

Friday, July 23, 2010 by Michelle Jimenez

It’s official: Larry Weis will become Austin Energy’s next leader and the city’s highest-paid employee.


City Manager Marc Ott announced at a news conference Thursday that he has appointed Weis, general manager of the Turlock Irrigation District in Central California, to the post and will pay him $285,000 a year. Ott’s salary is $240,000 a year.


Ott said Weis would report directly to the city manager, like his predecessors at Austin Energy.


The appointment brings to a close a process that began with a nationwide search after Roger Duncan retired as general manager in February. The high-profile search netted three finalists, including Weis, who drew a range of responses from the city’s environmental activists, low-income advocates and industry representatives. Within the environmental group alone, opinions about the candidates varied, with some wanting additional finalists added to the list and others calling on Ott to start from scratch.


“I wouldn’t say that I’ve won anybody over,” Weis told In Fact Daily on Thursday. “I got the job, but it’s going to be a lot of work to carry out. I have to come into the job and perform, and I’m sure that while I’ve personally had people contact me and say, ‘You know, I had my doubts at first’…. I feel like it’s one thing to say and to talk about things you’ll do, but at the end of the day, the proof is did you carry out, did you do them?”


Some community and Council members felt that Weis, coming from a smaller utility with a $460 million annual budget and about 106,000 customers, lacked the credentials to run Austin Energy, which has 407,000 customers an annual budget of $1.3 billion. Some also questioned his ability to lead in Austin’s politically charged environment.


However, over the course of the interview process, and after continued discussions with Weis, some members of the environmental community changed their minds about his ability to lead.


Jim Marston, director of the Texas regional office of the Environmental Defense Fund, said that though his group would have liked to have seen Karl Rábago, vice president of Distributed Energy Services at Austin Energy, in the mix of finalists, his group supports Weis. Nobody, Marston said, “can have everything in their background.”


“I liked him. He is really smart and he’s experienced,” Marston said. “He wants to do the right thing. I think he can learn the things that he doesn’t have a lot of experience in, but he’ll have to work at it.”


For that work, Weis will be paid more than the city manager, but, generally, less than his peers at other utilities. At the news conference, the city distributed a list of salaries for general managers and CEOs of other utilities, including the publicly owned CPS Energy in San Antonio and the privately owned Pedernales Electric, a cooperative which serves far fewer members than Austin Energy but covers an 8,100-square-mile area that includes Cedar Park and Leander.


CPS Energy, also on Thursday, announced the hiring of its new president and CEO, Doyle N. Beneby Jr., who signed a three-year contract at $360,000 a year, plus an incentive package, according to CPS spokeswoman Theresa Cortez. San Antonio news sources said Beneby will be offered a multi-year contract with a pay package commensurate with the peak earnings of outgoing CEO Milton Lee, which was $613,000 three years ago, including salary and incentive pay. CPS Energy serves more than 1 million customers and has a generating capacity of 5,816 megawatts.


The former Pedernales general manager, Juan Garza, who was fired in June, earned $350,000 a year, Communications Coordinator Anne Harvey confirmed.


“When you look at the market data in these positions, general managers, CEOs of these types of operations, in many instances, are making considerably more than what we’re going to be compensating him,” Ott said.


Weis currently makes about $277,000 a year at the Turlock district, which provides electricity and water to a fast-growing area. He has more than 28 years of experience in the electric power and water utility industries, 19 of those serving as a general manager and chief executive officer, according to his resume. He has been at the Turlock district since July 2000.


As the interviewing process came to a close week, Ott and a group of community members representing different interests visited the Turlock district. Ott said Thursday he received consistent positive feedback about Weis from board members, staff members, customers and community leaders.


Martha Smiley, president of the Austin Area Research Organization, was among the members who visited Turlock. She said the group heard a consistently positive message about Weis from stakeholders, who described him as being transparent in his dealings with people and providing good leadership through various stages of regulatory and legislative reform.


“I think what we heard about Larry’s ability to introduce renewables to a board that was resistant to them, to go out and find a major wind project and get financing for it and then bring his board along to accept it, and then years later find that it was a very good financial arrangement and investment for the district — that suggests to me that he has the leadership ability, the vision and the commitment to the innovation that we’re accustomed to and appreciate in our own utility,” Smiley said.


Smiley said she found that the customers the group spoke to did not have an issue with the rate increases the utility has implemented in recent years.


Preparing for a rate case in 2012 will be among Weis’ top priorities, Ott said. The utility, which plans to dig into savings to cover a projected $46 million shortfall in 2011, is looking to the rate increase for some relief. But Austin Energy, under Weis’ leadership, will also have to plan for a shift to more renewable energy sources to power the city and, if the city reaches its goal by 2020, greater efficiencies that would lead to a decrease in peak energy demand. A decrease in demand would mean less revenue for the utility — and that creates an additional challenge, one that would require a new business model to keep afloat.


“We’ve learned in California that Larry Weis is someone who clearly has the heart, passion and intellect to honor and foster the innovative spirit that has come to define honest energy,” Ott said Thursday. “He’s outpaced nearly all of his peers in the pursuit of renewable energy in the most demanding state in the country, and he’s done it while being mindful of the financial impact on his customers.”


Mayor Pro Tem Mike Martinez predicted Weis would have to hit the ground running to begin tackling the issues, keeping affordability at the forefront.


“I think it’s time to move forward and make Mr. Weis successful as our new General Manager,” Martinez said. “Any time you make a decision there are folks who are going to still have lingering questions, there may be folks who are even going to disagree with your decision. But this was a decision that was solely within the wheelhouse of the city manager, and now it’s time to move forward.”

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