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Future uncertain for Austin Energy panel

Wednesday, May 15, 2013 by Michael Kanin

Legislative action that would clarify the Austin City Council’s authority to move Austin Energy out from under the control of the City Manager remained stalled in committee Tuesday. With the 2013 session of the Texas Legislature set to expire on May 27, each passing day increases the likelihood that the bill won’t make it.


Still, Austin City Council members pressed on with their work on a new governing body for the utility. Council Member Chris Riley told In Fact Daily Tuesday that he plans to bring forward an item that would create a Council subcommittee that would deal with Austin Energy matters on May 23 – a development that, Riley contends, would allow for more full discussion of Austin Energy matters.


“At this point, we’re in the position of having to learn about each others’ positions by reading the newspaper,” Riley said.


Mayor Pro Tem Sheryl Cole also appeared to support the idea – reiterating that she would prefer that the committee also handle the business of other city utilities, most notably the Austin Water Utility. Cole also indicated Tuesday that she would push for a charter amendment that would allow voters to answer the question of whether the Council should have the power to move Austin Energy’s reporting structure.


The city held a charter election last November. That means that a vote to allow Council members to make the change could not come until May or November of 2015. By that point, of course, a new Council – and a new form of government – will be in place.


Last week, Council members delayed a second-reading vote on a new governing board after Cole, Council Member Bill Spelman, and Mayor Lee Leffingwell said that a draft of the ordinance had changed so substantially – in a manner that weakened the authority of the board – that they needed more time to review it. Council Members Laura Morrison and Kathie Tovo, each supporters of a body with more limited reach, backed at least a hearing and discussion on the matter.


Riley and Council Member Mike Martinez joined Cole, Spelman, and Leffingwell in voting to postpone.


Electric Utility Commissioner Philip Schmandt offered In Fact Daily his take on the events of the past week in a Tuesday email. Schmandt specifically responded to calls for what he considers a more politically inflected board.


“Appointing competing stakeholders to a new advisory board does not help manage Austin Energy; rather it helps manage the politics of managing Austin Energy.  Those are two very different things,” he wrote.


As for the new draft of the governance ordinance, Schmandt continued to hammer on the direction that discussions appear to be taking.


“The City Council already has an advisory board – the Electric Utility Commission – whose advice is to create an independent, professional board with sovereign powers subject to overall policy review by the Council. The Council does not like that advice so their solution is (to) eliminate the board whose advice they reject and create yet another volunteer advisory board with no sovereign power,” Schmandt said. “This ordinance could be the basis for real improvement if it provides sovereign authority to the Board and mandates that the Board be experienced professionals and not competing stakeholders.”


Electric Utility Commissioner Michael Webber seconded Schmandt’s statement. Webber, Schmandt, Steve Smaha, and Shudde Fath have all argued forcefully for a new, powerful governing board. They have been joined by commission Chair ‘Bernie’ Bernfeld and Commissioner Linda Shaw.


Only commission Vice Chair Karen Hadden has come out against a new governing model. Hadden’s concerns go back to first hand experience with San Antonio’s CPS Energy board – and her assertion that autonomy in that case brought on a forge-ahead attitude that Hadden contends ignored the will of San Antonio residents and Council members.


Supporters of a board for Austin Energy have suggested that the San Antonio problem would not repeat itself in Austin.


Meanwhile, when asked to illustrate the difference between his version of the board and the current Electric Utility Commission, Riley pointed to a handful of characteristics. “The ordinance we have includes language about drawing people from different stakeholder groups and various entities, so it would be a more professional make-up,” he said. “We will also be looking at the possibility of giving the board additional authority over time. The Council Committee would be positioned to make assessments about the performance of the board (and) make any adjustments, as needed over time.


“There has been discussion about the board being able to make some final decisions over … matters such as procurement,” Riley continued. “We may get to the point before long when the board is actually making final decisions on things like that…If a majority of the Council is comfortable enabling the board to make final decisions on matters such as procurement, than I imagine that would not be too difficult to put in place.”


Council members are set to vote again on Austin Energy governance May 23.

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