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Council likely to reject efforts to slow move to Austin Energy panel

Wednesday, March 20, 2013 by Michael Kanin

Austin City Council members appear ready to significantly alter – or flatly reject – an item from Council Members Kathie Tovo and Laura Morrison that calls for a comprehensive and apparently lengthy study of electric utility governance models.


The issue became heated Tuesday as Council members debated the resolution’s merits as part of their regular work session. The city faces an ever-present threat of legislative intervention more immediate during the current session, and a long-debated call for Council to establish an independent board to run Austin Energy renewed in the wake of a contentious rate increase. That left Mayor Lee Leffingwell in no mood to slow down a march toward an independent body.


“It’s a little bit difficult to say that we haven’t studied this issue almost to death,” he said.


Leffingwell, Council Member Mike Martinez, and Mayor Pro Tem Sheryl Cole each expressed some level of concern about slowing a move for independent Austin Energy governance to wait for the study. On Tuesday afternoon, Council Member Bill Spelman – who missed the work session to testify about payday lending before the Texas Senate’s Business and Commerce committee – told In Fact Daily that he agreed with his colleagues.


Spelman added that his first reaction to the proposed study was that it “is not a very powerful research design.


Tovo and Morrison had called for a detailed study that would ultimately compare Austin Energy to a host of “other municipal utilities managed at least in part by an independent board, both in Texas and those of similar size across the nation.” As part of the study, staff would look at a range of items – 58 in all, ranging from how each utility handles tree trimming, to the level of public participation – in an effort to better inform Council members’ decision-making process with regard to Austin Energy governance.


“You’ve got 58 things,” on the list, he continued. “They’re going to be all across the board. Two or three of them are going to be like Austin Energy. The vast majority are going to be too big or too small – they’ve been board-bound for years, they’ve been Council-bound for years. It doesn’t look like you’re going to get anything.”


Meanwhile, in a Monday letter City Manager Marc Ott informed Council members that it would take until at least mid-April for his office to return to chambers with a document that could create the independent board. Ott, who called the work “substantial,” also suggested that it could take longer.


“We have made progress on identifying issues and the attached status report should give you an indication of the work done to date and the remaining work. I plan to update you again in mid-April regarding progress,” he wrote in the memo. “Depending on the rate of data collection and analysis, we may have a draft ordinance prepared at that time.”


Cole was first to suggest a pared-down version of the proposed study. “I know that we have been provided a lot of information. It’s my belief that that information, by and large, has just not been put in the form that this resolution is asking for,” she said. “I would like to see (the resolution) very, very limited to just deal with the State of Texas, and deal with the information that we have – and maybe a little bit of additional work to tell us about how utilities have faired that went on to a governance structure.”


Leffingwell was fine with that idea. Still, the Mayor insisted that nothing should hold up a move for an independent board. “It seems to me that…the actual ordinance is going to come before Council before the timeline of the study requested,” he said.


“I personally don’t consider (the study) a predicate to considering the ordinance,” Leffingwell later added.


Morrison suggested that she and Tovo sit down with staff to pare down their resolution. Cole will join them.


In an unusual twist, no representative from Austin Energy was present to answer Council questions. When Leffingwell told Ott that he had requested that someone be at the work session, Ott responded. “So far as the governance is concerned (utility staff) have only been involved to the extent that they have provided support to my office.”


In a December memo, Ott indicated that he would rather see the utility left in city management’s hands. Though no one at Austin Energy has gone on the record in support of independent governance, the relative political relief it could offer the utility would be substantial.


In addition to local governmental support of an independent Austin Energy governing body, State Senator Kirk Watson (D-Austin) has thrown his considerable political heft behind the idea. Watson’s moves come as some of his legislature colleagues seem ready to attack the utility.


“This is perceived by others as an attempt by this Council to run out the clock – wait for the legislature to go home and then everything will be safe for a few years,” Leffingwell said. “It’s an old, well-used technique here in Austin city governance: If you can’t defeat something, try to delay it as long as you possibly can.


“Delay is defeat,” Leffingwell continued. “(But) in this case, delay will be defeat for the city of Austin, it will be defeat for Austin Energy.”


Tovo suggested otherwise. “I’m not concerned about people who think this is a perception to run down the clock,” she said. “We need to take the time to make the right decisions – and (a governance) ordinance that is coming back from staff will have some decision points.”

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