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Commission may recommend charter revision for Austin Energy

Wednesday, June 20, 2012 by Josh Rosenblatt

Longtime Electric Utility Commissioner Shudde Fath is pushing for a charter revision election this November to allow Austin Energy to emulate San Antonio’s municipally owned CPS Energy.

As part of their June 7 vote on the electric rate increase, Council approved a resolution directing the city manager and the EUC to study and evaluate governance models used by other municipally owned utilities in Texas. Council currently governs the utility, but approximately 50,000 of Austin Energy’s more than 400,000 customers live outside the jurisdiction of the city, meaning they don’t vote for the people who make decisions about their utility. Council wants to know if a board made up of either independently elected or appointed members would be a more equitable approach to utility governance.

The resolution directs the EUC to report its findings and input to the Council no later than Oct. 31.

Ask Fath, however, and she’ll say that would be too late for Council to do what would actually be necessary to change AE’s governance model anytime soon: a November charter-revision election.

According to the Texas Government Code, the management and control of a municipal utility system can be vested in only one of two places: 1) the municipality’s governing body (as in Austin); or 2) a board of trustees consisting of no more than five members, one of whom must be that city’s mayor (which is the model employed by CPS in San Antonio). According to Fath, the only way for a city like Austin to change from model 1 to model 2 is through a charter election. 

“(Changing the model) does take a charter election,” Fath said at Monday’s Electric Utility Commission meeting. “If it doesn’t pass this November, there won’t be another one for two years. If the time was ever welcoming for something like that, it’s right now.”

Thankfully, Fath continued, if Council decides to consider putting the governance change on the November ballot, it most likely has all the information it needs already, as Fath has a copy of a resolution drawn up by the EUC and sent to the Charter Revision Committee back on Jan. 14, 2002, asking them to support a charter election that May. The commission voted not to support the resolution.

“I hate to see us try and reinvent the wheel,” Fath said. “Unless some state legislation has changed, the only way Austin can have an independent board is a CPS model. That’s Austin’s take-it-or-leave-it. It has to be started before the fall.”

The commission agreed to go forward with Fath’s request and bring forth a resolution recommending a charter election to Council by their next meeting, in July, but some members expressed reservations about going outside their mandate from the Council to simply study, evaluate and provide input.

“I like that resolution, but I think we have to go through this process,” said commission Chair Phillip Schmandt. “We would be disrespecting the Council if we didn’t go through the process they laid out for us. I think our hand has been dealt.” As a sort of compromise measure, the commission put together a working group – composed of Schmandt, Vice-Chair Linda Shaw, and commission Member Stephen Smaha – to conduct the evaluation while staff looks into the viability of a charter revision election.

According to Austin Energy Legal Services Division Chief Andy Perny, it’s unclear whether changing Austin Energy’s governance model to a board system would require a charter election. That’s one of the things legal staff will be looking into over the next month, he said.

“It would make sense that a charter election would be needed, but we’re not sure of that,” Perny told In Fact Daily. “We haven’t had a chance to analyze that issue.” 

Fath, however, seems sure. She said decisions changing the governing power of the Council require charter elections.

“It’s what we’ve always been told,” she said. “A long time ago, some lawyer said so.”

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