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Utility commission continues push for independent Austin Energy board

Tuesday, April 16, 2013 by Michael Kanin

Clearly frustrated with the direction taken last week by City Council members over the governance of Austin Energy, the city’s Electric Utility Commission passed yet another resolution last night urging Council to move toward a powerful independent governing board.


For six commissioners, the issue remains one of utility control. “Something shifted over the last years where the power (to run the utility) shifted from the City Council to city staff,” said Commissioner Michael Webber.


“Not city staff,” added long time Commissioner Shudde Fath, “City Manager.”


The commission’s resolution calls on Council members to “give the independent board general authority over all matters relating to Austin Energy, so the Independent Board may effectively oversee (the utility).” The document also suggests language that would delay any independent board decision by 30 days – and subject it to Council approval — to be sure that Council members and the public could weigh in.


Only Commissioner Karen Hadden held firm to her belief that the best way to assure utility transparency and accountability is to leave much of the power in the hands of the Austin City Council.


Action from Council Member Laura Morrison last week brought the city closer to Hadden’s side of the idea. There, on a motion from Mayor Pro Tem Sheryl Cole, Council members changed the basic structure of an ordinance that will govern how it moves power from Council to an independent body. The change will allow Morrison, Cole, and their colleagues to specify which powers they would transfer to an independent board.


That is more or less the direct opposite of an approach originally pitched by Mayor Lee Leffingwell and Council Member Bill Spelman. At the time, Leffingwell said that the Morrison change would make the independent board “into the Electric Utility Commission.”


Most of the Electric Utility Commission Monday agreed with the Mayor’s implication that their oversight was inadequate. In a resolution brought forward by Commissioners Steve Smaha and Philip Schmandt – both of whom, along with Hadden, testified before Council Thursday – bluntly spelled out that fact.


“Effective oversight involves having sufficient grasp of ongoing activities at Austin Energy to be able to independently assess what questions need to be asked of staff and to independently determine whether some activities require additional scrutiny…the EUC, as an all-volunteer board that meets once a month, does not have the capability to exercise effective oversight over Austin Energy,” it read.


The resolution also leveled heavy criticism at city management over its operation of the utility. “City staff exercises the only real, effective oversight over Austin Energy…this is not good governance as a public body should be exercising that oversight,” it continued.


That argument echoes one made by Council Members Spelman and Chris Riley. Each expressed concern that control of the utility by city management has degraded transparency.


Commissioners carefully left out a statement about where the utility’s general manager should report. That item, when decided, will ultimately finalize where much of the day-to-day decision-making power resides. Currently, City Manager Marc Ott holds those particular reins – and has been reluctant to let them go.


Though they did not address the issue in the resolution commissioners were direct with their thoughts about city management and city legal staff– and the affect that the commission saw all involved had had on the utility. “Some of us think this is primarily a delaying tactic, just so you know,” said Smaha. “The state legislation looked extraordinarily explicit and clear about the ability of the city government to do this,” move Austin Energy’s general manager out from under the City Manager’s authority.


Fath chimed in. “Do you remember when the legal department was moved from Austin Energy – “


Smaha broke in. “Remember when there was an issue in the charter election?”


Fath continued putting it all together for the benefit of those listening. “You remember that the opinion that we can’t remove the City Manager from this deal came from the legal department.”


Webber completed the picture. “So the legal department who reports to the City Manager,” he said.


“I think we really could remove the City Manager,” concluded Fath.


Legislation pending in both the Texas state House and the Texas Senate would clarify Council’s ability to shift management of the utility. After passage, Council members would decide the final disposition of the Austin Energy management staff reporting structure.


“I personally have the understanding that the Watson bill is intended to eliminate any possible excuses that the City Attorney could raise that would sandbag the process of moving forward with this,” Smaha said.


Council members are set to begin hashing out the powers of the independent board at a work session on April 23. A second-reading vote on the matter could come on April 25.


However, Council Member Mike Martinez is set to be out of town that day. That could push a third, and final, reading of the measure in to May.

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