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Questions over governance of Austin Energy go back three decades

Monday, June 4, 2012 by Michael Kanin

Austin City Council Member Bill Spelman’s push to consider establishing an external governing body for Austin Energy has already been vetted thoroughly by at least one city advisory body — 16 years ago.


In May, 1996, an all-star citizens’ group urged Council members to adopt an independent governing body for Austin Energy after two lengthy back-to-back meetings. In fact, formal questions about altering the governing structure of the utility date back to the 1970s, according to veteran Electric Utility Commission (EUC) member Shudde Fath, who has been a part of multiple efforts to encourage the city to adopt an independent board similar to the one that manages San Antonio’s CPS Energy.


“The only way to go is to do the CPS model,” Fath told In Fact Daily on Sunday evening. “My premise is that the board would participate in the decision making process…It would provide continuity. One of the big things is that it would be a positive to the bond-rating houses. They take a dim view of the political management of the utility.”


The 1996 panel included former EUC chair Sam Graham, Tom “Smitty” Smith of Public Citizen and State Senator Kirk Watson (D-Austin) before he served as Austin Mayor, among other luminaries. They held two multi-hour public meetings on May 13 and May 14, 1996. In the end, after much testimony and questioning, the group agreed that Austin Energy needed an independent board. Fath knows because she was there. She has served on the EUC since its inception nearly 35 years ago.


In his summary of the group’s proceedings at the time, Austin American-Statesman reporter Laylan Copelin quoted group members and former City Council members Robert Barnstone and Charles Urdy. “I don’t believe that there is anyone in this city who believes the City Council is an asset to the electric utility,” Barnstone said.


“A politically driven body cannot run a competitive business,” Urdy added.


On Friday, In Fact Daily reported that Spelman, Council Member Chris Riley, and Mayor Pro Tem Sheryl Cole would place an item on this Thursday’s Council agenda that would call on City Manager Marc Ott and Austin Energy General Manager Larry Weis to begin a study of the possibility of transferring board control of the utility to an independent body. “Somebody who has more bandwidth than the City Council has or is ever likely to have, ought to be looking at the details. We just have never been in a position to look at those,” Spelman said. (See In Fact Daily, whispers, June 1, 2012.)


In a February 2008 memo to EUC members, Fath was blunt. “Until there is a major change in governance, it is my considered opinion that we are just rearranging the deck chairs!” she wrote.


Such a change would take a revision to the city’s charter. With Council members planning a charter election for this fall, and considering that two years must elapse before another can take place, Fath wants to see inclusion of a question about the utility’s governance as soon as possible. “I’d like to see it go on the ballot this November,” she said.


Should Council members opt for a change, Fath argues that there would be no need for a drawn out information-gathering process. “The EUC has voted unanimously for this in ’96, and ’02, and I think one more time,” she said.


Spelman told In Fact Daily Sunday night that he knew that there had been some discussion on the matter previously, but that he was surprised to hear that it had advanced as far as Fath suggested. He pointed out that the new resolution would call for a simple look at how other large city-owned utilities are governed and provide this report to the current EUC and Ott.


Fath – who, at 96, would rather not lead an effort for the charter question – indicated that the multiple other attempts to change the utility’s governance structure have been met with silence from a host of past City Councils. Fath may ask the chair of the group to place an item addressing the issue of governance on the next EUC agenda. That meeting is scheduled for June 20.

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