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Council puts energy consulting contracts on hold

Monday, March 2, 2015 by Tyler Whitson

Picking up where others left off can be difficult, especially when it involves something as expensive and complicated as the Austin Energy generation plan. Rather than decide on up to $2 million worth of contracts for energy demand management consulting related to the plan, City Council voted Thursday to refer the decision to one of its committees for vetting.

The vote was unanimous, with the exception of Council Member Ora Houston, who was not present. The item will go to the Austin Energy Committee, which will likely meet toward the end of the month.

Council Member Ann Kitchen, who made the motion, said she was not necessarily making a statement on the appropriateness of the contracts themselves.

“I just think that we’re talking about a large amount of money, and we don’t have any indication of what that would be used for,” Kitchen said. “We’re all concerned about affordability and impacts on rates. I think that we need to be looking at these types of expenditures in the larger context.”

Austin Energy Vice President of Customer Energy Solutions Debbie Kimberly said the “on call” contracts would be used “only as necessary to augment staff expertise” in carrying out highly specialized studies. Waiting on the contracts, she said, “would just delay some potential opportunities to … contribute to some studies that would actually reduce costs to our customers.

“The alternatives,” Kimberly continued, “would be to do this on an as-needed basis when special consulting needs arise, and typically those one-time proposals can be more expensive than having the pool of consultants.”

Austin Energy staff wrote in Council backup documents that the contracts would help them reach goals the previous Council adopted in December as part of the Austin Energy Resource, Generation and Climate Protection Plan to 2025, an update to a plan adopted in 2010.

The new goals include achieving 900 megawatts of energy efficiency and demand side management — or measures to modify or reduce energy demands — and investing in 200 megawatts of local solar.

Kimberly said the project that is “closest in the pipeline” is a study that would look at implementing a conservation voltage reduction program. Such a program could save energy by making parts of the electrical grid more efficient and reducing waste before energy gets to customers.

Another project the utility could use the consultants for, Kimberly said, is a local storage pilot program that could enhance the city’s ability to store power when it is not needed. The generation plan sets goals for implementing at least 10 megawatts of distribution connected local storage and as much as 20 megawatts of thermal storage.

If passed, the item Council is considering would authorize Austin Energy to execute two-year contracts with three different consulting companies that total no more than $1 million, with the option to extend the contracts for up to two years at a total of no more than $500,000 per year.

Kimberly said the contracts would essentially replace similar ones that Austin Energy had in place since 2011, but expired at the end of January. “On average we’ve spent, I would say, roughly no more than $160,000 a year,” she said, adding that the older contracts had a significantly higher maximum yearly limit of $850,000.

Council Member Sheri Gallo pointed out that the Electric Utility Commission was unable to pass a motion at last Monday’s meeting that would have recommended passage of the item to Council. Though three commissioners voted in favor of recommending the contracts, Chair Michael Osborne and Vice Chair Karen Hadden voted against it.

Osborne said he objected to the inclusion of government contractor Leidos as one of the three recommended consultants. “They look like a large military-industrial complex provider to me,” he said, referring to the company’s website. “I really question whether or not they’ll be the right choice for a progressive city like Austin.”

Austin Energy Chief Operating Officer Cheryl Mele responded to this concern. “I understand that if you just Google ‘Leidos,’ you certainly will find one component of them. If you Google ‘Leidos energy efficiency,’ you’ll find that they’re a very experienced consultant in that space,” she said.

Austin Energy spokesperson Carlos Cordova told the Austin Monitor on Friday that, though the utility has recommended Leidos as one of the three potential contract recipients based on evaluation criteria, Council has the authority to choose whichever three consultants it would like out of a list of six qualified bidders.

Photo by Sue Jones [CC BY-SA 2.0], via Wikimedia Commons

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