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Electric Utility Commission prods Council on Austin Energy issues

Tuesday, May 21, 2013 by Michael Kanin

Members of the Electric Utility Commission Monday passed a series of nine resolutions aimed, ostensibly, at kick starting discussion about a host of Austin Energy-related issues. Each of the actions was in the form of a recommendation from the commission to Council members.


Taken together, however, the actions seem to point to the commission’s frustrations with the limitations of their power – and the implied harm it may do to the utility.


They range from a call for a plan to eliminate the city’s dependence on coal by 2015 to a request for an open discussion about the utility’s hedging policies. Collectively, the items capture roughly three years’ worth of discussion.


But it was the last action that stood out. There, commission Chair Bernie Bernfeld offered an item that, if approved by Council, would reinstate the once fairly frequent practice of holding executive sessions, something that Commissioner Steve Smaha implied had disappeared with the coming of current utility General Manager Larry Weis.


Commissioner Michael Webber noted that, without the executive sessions, the board had been somewhat neutered. “I think if you want to make sure the commission has no say in the utility, then no executive sessions is a great way to achieve that,” Webber said.


For his part, Weis denied ending EUC executive sessions. He noted that he and his staff have tried to brief individual commissioners about sensitive issues as they arise.


Council members, of course, can still discuss many Austin Energy issues in executive session.


After the meeting, Smaha told In Fact Daily that the purpose of the nine resolutions had been to get the commission back on track after taxing rate and governance discussions. “These are items that had been deferred for a long time while we dealt with the rate case and governance,” Smaha said.


When asked if he felt he and his colleagues were stepping into a void, Smaha said no. “I don’t think we’re stepping into a void. I think the void has been around and we’ve tried to provide some long term and strategic oversight.” He added, “When we were stuck dealing with one major issue, a lot of other things didn’t get up to the top.”


It was impossible to ignore the context. The question of a new, more powerful independent governing body – something that a perpetual majority of the commission has pushed for – remains stalled at Council and at the Legislature.


Whatever the future holds, the current board’s situation was underlined by the nature of their Monday actions. Commissioners unanimously approved requests for Council action on “a plan to return Austin Energy to compliance with all City Council mandated finance and reserve policies or provide recommendations to revise (them)”; to “require the City Manager to produce a list of all transfers or payments from Austin Energy to the city”; to ask City Manager Marc Ott to “develop a plan to increase the non-nuclear decommissioning reserve”; to “investigate” the possibility of installing combined-cycle gas generators at one of the utility’s plants; and to instruct Ott to analyze the combined effect of the new out-of-city ratepayer exemption from the highest two tiers of billing on the city’s effort to save 800 megawatts of energy by 2020. The vote to allow executive sessions was also unanimous.


After a bit of light editing, the call for a public discussion of the utility’s hedging policy came on a 7-0 vote.


A 6-1 majority of commissioners moved ahead with the request to get off coal – Commissioner Shudde Fath objected to that idea, based on her concerns that a sale of the Fayette plant might not reduce noxious emissions. Commissioner Philip Schmandt may have summarized his feelings about a broader issue when, in reference to the coal debate, he tied the question “to the governance issue,” noting that it had “fallen into a black abyss of the City Manager’s office or staff – I have no idea where we are.”


Only Commissioner Karen Hadden, a Solar Austin board member, objected to a call for a study of the impact of distributed energy programs on the utility “including an analysis of who should pay the fixed costs of serving distributed energy customers.”


For his part, Commissioner Philip Schmandt noted that he believes that it is possible that lower-income utility customers have been subsidizing wealthier Austin Energy solar users.


Still, all commissioners could do was request Council action on the issues. An independent board could, properly empowered, simply order the General Manager to produce the studies. In that regard, the commission’s Monday actions could be viewed as something of a test of the current system – and, depending on Council action, a potentially strong illustration of its shortcomings.

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