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Thursday, December 3, 2015 by Jo Clifton

Talk with EUC chair ends consumer advocate bid

The city’s purchasing officer has disqualified the sole remaining bidder on a contract to act as the consumer advocate in Austin Energy’s upcoming rate review. City Purchasing Officer James Scarboro informed the mayor and City Council about the disqualification of Oxford Advisors LLC in a memo on Wednesday.

According to the memo, “This disqualification is based on a self-reported statement from Oxford in which they describe an exchange they had with the chair of the city’s Electric Utility Commission (EUC),” Michael Osborne.

The disqualification could mean that Austin Energy will have to start over in its process to find a consumer advocate, potentially slowing down the work that it needs to do to help Council set rates for the 2016-2017 Fiscal Year.

In the memo, Scarboro noted, “Although the EUC official initiated this communication, the contents of the exchange constitute a prohibited representation as defined by the ordinance.” The memo continues, “As a reminder, EUC members are subject to the City’s Anti-Lobbying Ordinance. As written, the Anti-Lobbying Ordinance prohibits representations regardless of which party, the offeror or a City representative, initiates them.”

Although it would seem like the city might exercise some leniency toward the company because its representative did not initiate the prohibited contact, Scarboro writes, “The ordinance also does not provide conditions or criteria for determining lessor (sic) violations or corresponding sanctions.”

Today’s meeting of the Austin Energy Utility Oversight Committee includes an agenda item to discuss issues related to authorizing Oxford as the independent consumer advocate, and Council had planned to hold a special called meeting today that included an item to award that contract to Oxford.

Several Council members expressed dissatisfaction with Oxford when the matter came up at their Nov. 23 meeting, and they voted to postpone further discussion until today. Although AE had reached out to companies in two separate solicitation efforts, only two firms offered bids on the contract, according to Mark Dreyfus, AE vice president of regulatory affairs and corporate communications.

Scarboro also noted in the memo that Oxford has until Dec. 7 to protest its disqualification. He issued a not very veiled warning that Council should be careful about what it says before that deadline: “As the protest period will still be in effect at the time of the December 3, 2015 meetings, Council is advised that any communications concerning this solicitation or the offeror occurring during these meetings may become material to any protest submitted by Oxford,” he wrote.

Austin Energy General Manager Larry Weis said Wednesday, “I know it’s a big setback, and I’m very disappointed that an EUC member did this. I just don’t know what the magnitude of it is right now.”

Dreyfus told the Austin Monitor on Wednesday, “It creates a great deal of uncertainty as we move forward into the public cost-of-service process. We have a schedule we developed to give the Council the opportunity to be done at the end of June so that the rates could be used in the city budget process” in August and September. “Would we be required to delay to engage a consumer advocate, that’s problematic for our schedule and problematic for the city budget process,” he said.

Scarboro told Council in the memo that staff from the Law Department, as well as from Austin Energy and the Purchasing Office, would be available at today’s meetings to answer questions about their options moving forward.

Meanwhile, Osborne was in Paris along with Mayor Steve Adler, Council Member Leslie Pool and Travis County Commissioner Brigid Shea, who are attending meetings related to the United Nations Conference on Climate Change.

Osborne emailed a statement after receiving a copy of Scarboro’s memo from the Monitor, which said in part, “The spirit and the purpose of the anti-lobby ordinance is to stop vendors from working with non designated city employees and officials in pursuing contracts with the city during a solicitation period. In no way did Oxford violate the spirit of our anti-lobby rules. Therefore, should Oxford protest the ruling of the purchasing office, their appeal should be considered.”

However, Osborne said he was still not satisfied with the process Austin Energy went through to look for the consumer advocate. He said that Council “should instruct Austin Energy to go back, classify this contract as a critical business need, and try again to get this right.”

Photo by RAYANDBEE made available through a Creative Commons license.

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Key Players & Topics In This Article

Austin City Council: The Austin City Council is the body with legislative purview over the City of Austin. It offers policy direction, while the office of the City Manager implements administrative actions based on those policies. Until 2012, the body contained seven members, including the city's Mayor, all elected at-large. In 2012, City of Austin residents voted to change that system and now 10 members of the Council are elected based on geographic districts. The Mayor continues to be elected at-large.

Austin Energy: As a municipally-owned electric utility, Austin Energy is a rarity in the largely deregulated State of Texas. It's annual budget clocks in at over $1 billion. The utility's annual direct transfer of a Council-determined percentage of its revenues offers the city a notable revenue stream.

Austin Energy Utility Oversight Committee: The Austin City Council committee on Austin Energy was created in May 2013 to provide oversight of the city's electric utility. It's creation was marked by political maneuvering that ultimately resulted in a committee comprised of every member of the Austin City Council.

City of Austin Anti-lobbying ordinance: Enacted December 2011, this ordinance provides a no-contact period for firms bidding for City of Austin contracts.

Electric Utility Commission: The advisory body charged with oversight of Austin Energy, the City of Austin's municipally-owned electric utility.

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