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Customers seek changes in AE rate case

Friday, January 22, 2016 by Jo Clifton

An unusual coalition of consumers has written to City Council to request that it slow down the proposed schedule for Austin Energy’s upcoming rate case. In addition, the consumers – including semiconductor giants Samsung and NXP as well as the Sierra Club, Public Citizen, Texas Legal Services Center, a Barton Creek property owners association and the business coalition known as the Coalition for Clean, Affordable, Reliable Energy – have requested that the independent hearing examiner be given the authority to determine the procedural rules.

Austin Energy has stated that final rates must be established by June 30 so that they can be considered as part of Council’s budget process in August and September.

The letter, written by attorney Chris Reeder of Husch Blackwell, states that “assuming that a Consumer Advocate (for residential and small commercial customers) will be timely confirmed, Customers request that the process conclude later this year, with the incorporation of rates during a budget review.”

Tom “Smitty” Smith of Public Citizen, which advocates on behalf of residential customers, said that Reeder is representing Public Citizen and the other residential advocates only on this particular issue. He stated that it was not necessary to have the rates in June.

In December, the city’s purchasing officer disqualified Oxford Advisors LLC, the sole remaining bidder on a contract to act as the consumer advocate. Oxford Advisors was disqualified because Electric Utility Commission Chair Michael Osborne initiated a conversation with a company employee on the day that the contract was up for Council consideration. Osborne had argued that the city needed a consumer advocate with more experience than Oxford Advisors.

The company appealed its disqualification. Council may soon hear whether Oxford Advisors is again eligible to serve, because it is scheduled to hear an update on the company’s status at the Austin Energy Utility Oversight Committee meeting at 9 a.m. Monday. If Council chooses to award the contract to Oxford, the company can begin its work. However, if Council decides to begin the bid process all over again, as Osborne advocated, it seems unlikely that the rate case could be concluded this year.

According to Reeder, “A rate filing is highly voluminous and complex, involving potentially dozens of highly detailed schedules, spreadsheets and electronic files, in addition to any narrative explanation. Even so, it often omits highly critical information that the utility relied upon to shape its recommendations, necessitating a discovery process to encumber this information. In short, customers must have a real opportunity to conduct a robust review and develop testimony and evidence. This takes some time.”

The lawyer points out that Austin Energy’s schedule allows customers only five weeks to do all of its discovery in order to arrive at the final rates by June 30. “Compounding the problems arising from this highly compressed five week period is that the city has not yet approved the consumer advocate,” he writes.

The independent hearings examiner, Alfred Herrera, has indicated that he would start the hearing process whether the consumer advocate was appointed or not, “and further indicated that he is bound to adopt Austin Energy’s June 30 deadline,” the letter says. Those factors place further pressure on Council to make a quick decision about hiring the consumer advocate.

Smith said, “I think everybody expects to have at least a process in June so the Council will have enough information to put a placeholder in the budget for expense and revenues (for the utility) for adoption of the budget in September.” However, he seemed uncertain about whether the city would have new rates by September.

Those behind the letter are clearly working with members of the city’s Electric Utility Commission, because the letter includes a resolution to be considered by the commission at its meeting this Monday night. That resolution also asks that Council give the hearing examiner the authority to determine the procedural rules for the hearing “and to set a procedural schedule consistent with the consumer advocate’s full participation and with the budget review process.” It is not clear whether it is possible to fulfill both of those requests.

Austin Energy spokesman Robert Cullick said the utility had no comment. The full text of the letter is below.

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