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EUC still concerned over relocation of Austin Energy’s legal staff

Monday, April 23, 2012 by Elizabeth Pagano

The relocation of Austin Energy’s attorneys continued to ruffle feathers at the Electric Utility Commission meeting last week. The commission, whose members are appointed by the City Council, requested an explanation for the move from the city’s management, though representatives failed to appear.


This did not prevent the commission from questioning Austin Energy General Manager Larry Weis, however. They took no action, but decided to revisit the topic in six months, when more data about the impact of the move would be available.


The attorneys made the move to City Hall on March 9. At the time, staffers were concerned about the possibility that the move could result in a loss of efficiency, in the middle of the utility’s first rate case in 17 years. Their concerns were shared by the EUC.


“There is a systemic problem, that the utility is not given the freedom to operate at its most optimum. And the consequence of that, we fear, will show up either in an inability to manage the way that you need, or in a more expensive management practice,” Commissioner Michael Webber told In Fact Daily. “We think that this is a problem, that the city uses the utility to pay for its own operations.”


Webber is the associate director of the Center for International Energy and Environmental Policy, co-director of the Clean Energy Incubator at the Austin Technology Incubator, and Assistant Professor of Mechanical Engineering at The University of Texas at Austin.


“It’s fundamentally a bad business practice to have the people that you pay for report to someone else,” Webber told In Fact Daily. “Manpower more and more is under city control but paid for by Austin Energy. So it’s good for the city but bad for the utility.”


“This strikes me as yet another move on behalf of the city that is good for the city’s efficiency, but bad for the utility’s operations. This is the complaint in the rate case, that the city’s efficiency is prioritized over effective operation of the utility, which makes it more expensive to run the utility which makes the rates have to go up,” said Webber.


Weis told the commission that he was, as yet, unclear as to what extent the move would impact the efficiency of his management, though he pointed out that the legal department had always reported to the city attorney. He also noted that energy law work is frequently “really specialized,” and in those cases requires outside counsel anyway.


“It puts me in a spot, because this was not my idea. But it is one that I support,” said Weis. “Having not worked for a municipally-owned utility before this… I can tell you I don’t really have a sense for the out-of-line or in-line. But I did tell the city attorney that I will watch this and make sure that it works as efficiently as possibly. If it doesn’t, I’ll definitely approach and do that.”


Without a clear understanding of how the move impacted the utility at this time, the commission agreed to revisit the matter in six months, when more information would be available.


“Is there a place where this will stop, or some point will you be the only one left, and everyone else will be going over to the city? This is an alarming trend, from the commissioners’ perspective,” said Webber.

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