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Thursday, January 7, 2016 by Tyler Whitson

Consumer advocate hearing to take place today

As Austin Energy moves forward on a rate review, one puzzle piece remains missing – an independent consumer advocate for smaller customers. That piece may soon come closer to falling into place. On Dec. 14, the sole remaining bidder for the job brought a protest against the city for its disqualification after an alleged anti-lobbying policy violation. Today, there will be a hearing on that protest.

The hearing, which will be open to the public, will take place at the city’s Municipal Court building at 1 p.m. It will involve legal arguments about whether an exchange initiated by Electric Utility Commission Chair Michael Osborne with the bidder, Oxford Advisors LLC, did indeed violate the city’s Anti-Lobbying Ordinance.

James Scarboro, the city’s purchasing officer, wrote in a Dec. 2 memo that the city had disqualified Oxford Advisors because “the contents of the exchange constitute a prohibited representation as defined by the ordinance.” Osborne, however, argued at an EUC meeting on Dec. 14 that “there was no representation that was related to the response, and so therefore there was no violation of the ordinance” – ostensibly siding with Oxford Advisors.

However, as the Austin Monitor reported on Dec. 3, Osborne was not satisfied with the solicitation process for the consumer advocate for residential and small commercial Austin Energy customers and argued that City Council “should instruct Austin Energy to go back, classify this contract as a critical business need and try again to get this right.”

Mark Dreyfus, Austin Energy’s vice president of regulatory affairs and corporate communications, noted at the Dec. 14 EUC meeting that the city cannot release another request for proposals for the consumer advocate position, as Osborne had recommended, until the dispute has been resolved.

Regardless of the outcome of the dispute, it has further delayed the process of selecting a consumer advocate, an item that Council first considered and postponed on Nov. 23Nov. 19 amid concerns about Oxford Advisors’ qualifications for the job.

At the same time, the rate review process continues to move forward. In a Monday press release, Austin Energy noted that Alfred Herrera, the impartial hearings examiner for the rate review, has announced that he will hold a prehearing conference “for interested parties to discuss procedural matters” on Jan. 14 at Austin Energy’s Town Lake Center.

The conference, according to the press release, will cover topics including “Treatment of confidential information; Identification of issues to be deliberated through the hearings process; Procedural schedule; and Adoption of procedural rules.” The time window to submit comments on the draft procedural rules closed on Wednesday.

Dreyfus presented the results of Austin Energy’s cost-of-service study at the Dec. 14 EUC meeting. He stated that, although the utility has $17 million in excess revenue to return to customers, there remains an imbalance because rates for residential and small commercial customer classes are below cost while rates for larger commercial customers are above cost.

Austin Energy staff will present its rate design recommendations to the EUC on Jan. 25 and then to the Council Austin Energy Utility Oversight Committee on Jan. 28, after which it will begin proceedings before Herrera.

Based on the results of the cost-of-service study, it is possible that utility staff will recommend raising rates for residential and small commercial customers.

Austin Energy expects Herrera to release his recommendations report based on the hearings on May 6 and hopes for Council to adopt the new rate structure on June 23, in time for implementation in the coming fiscal year, which will start in October.

When an independent consumer advocate will be able to enter the picture – and whom that might be – is unclear at this point. It will likely depend on what happens at today’s hearing and on the decision that Council makes when it holds its first meeting of the year on Jan. 28.

This story has been corrected to reflect the correct date of the City Council decision.

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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.

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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