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Friday, January 8, 2016 by Tyler Whitson

Arguments made in consumer advocate hearing

A Thursday afternoon hearing likely brought the city one step closer to hiring an independent consumer advocate for the ongoing Austin Energy rate review.

Attorney Stephen Webb, the independent hearings officer for the case, heard arguments from representatives of Oxford Advisors LLC and the city about whether the energy consultant firm violated the city’s Anti-Lobbying Ordinance in November and should be disqualified for the job.

“I think the ordinance is pretty literal, and I think we’re looking for your guidance … based on everything you’ve heard today,” said Yolanda Miller, deputy purchasing officer for the city, to Webb.

“This is holding up the process in terms of either continuing with this firm or sending another solicitation out, so that whole process is being delayed,” Miller later noted.

Webb agreed to release his decision on the matter by the end of next week.

James Scarboro, the city’s purchasing officer, wrote in a Dec. 2 memo that the city had disqualified Oxford Advisors – the sole remaining bidder for the consumer advocate position – based on communications between Oxford Advisors staff and Electric Utility Commission Chair Michael Osborne.

Oxford Advisors filed a protest of the disqualification on Dec. 14.

At the hearing, Oxford Advisors managing directors Paul Corey and Keith Hausman described the Nov. 19 exchange – which Osborne initiated, and Oxford Advisors staff reported to the city – and argued that it did not violate the ordinance.

“All of the calls together, combined, none of them amount to a representation,” said Corey. He was referring to language in the ordinance that prohibits certain types of “representation” between bidders and “city officials.”

Oxford Advisors, Corey continued, had “no intent to influence the process” and did not discuss its submittal to the city. “We had no intent whatsoever,” he said. “We had a call from the chairman of the commission. We returned the call.”

Miller responded. “Staff was not looking at intent. … We were just looking at what the ordinance said and what the communications (were) that had occurred, and then we concluded that a violation had occurred,” she said.

“We determined that the representation that occurred where Oxford stated that they could do the job and do a good job at it in the communication that was clarified to us violated (the ordinance),” Miller explained.

Scarboro also stepped in. “We don’t relish this opportunity, but it is our responsibility, and so we had to make an interpretation.”

Corey addressed the specific phone call that Miller mentioned, which, like the others, occurred on the same day that Council was scheduled to consider approving the consumer advocate contract.

“(Osborne) said he was walking over to the City Council meeting, he would let us know the outcome, and I just made a kind of off-the-cuff comment – ‘You know, if we’re approved, we’ll do a great job,’” said Corey. “In no way is that reasonably likely to influence the outcome.”

Council ultimately postponed consideration of the contract after discussing a resolution that the EUC passed on Nov. 16 recommending that it turn down Oxford Advisors’ bid and release a new request for proposal.

Although Osborne joined the EUC in passing its resolution, he stated at a Dec. 14 EUC meeting that he did not believe the consultant violated the Anti-Lobbying Ordinance. “There was no representation that was related to the response, and so therefore there was no violation of the ordinance,” said Osborne.

The independent consumer advocate in the rate review will be charged with representing residential and small commercial Austin Energy customers in a legal proceeding that is set to begin in late January. The goal of the review is to put in place new rates starting in October that are reflective of the costs the utility incurs in serving its different customer classes.

Unless Council calls a special meeting, the soonest it will be able to consider the consumer advocate issue is at its Jan. 28 meeting.

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Key Players & Topics In This Article

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.

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