Wednesday, August 12, 2020 by Nina Hernandez

Electric Utility Commission won’t recommend Austin Energy technology contract

At its Monday meeting, the Electric Utility Commission took a hard look at a purchasing contract that would have authorized $62 million in contracts for computer, network and other technology hardware. Ultimately, none of the commissioners made a motion to approve and the item left without a recommendation.

Item 13 provides $62 million for staff to buy computers, servers or other technology equipment. Austin Energy makes up $21 million of the overall contract.

More than one commissioner expressed concern that recommending the contract to City Council would be akin to writing staff a “blank check” with little to no accountability for how it would be spent.

Charles Dickerson, chief operating officer and deputy general manager of Austin Energy, countered that the commission’s expertise isn’t IT, and therefore it’s a staff function to decide how many and what brand of server, for example, the utility buys.

“We’ve had a full discussion on this issue, including where we have the information that we need to make meaningful recommendations, and frankly whether that really matters,” Chair Marty Hopkins said. “As far as moving forward with this item, it seems to me we have a couple of options. We could either move this item forward, or we could not move this item forward, and Austin Energy” could find another way to gain a recommendation for the contract.

Commissioner Cary Ferchill said he believes the commission approves too many contracts and without proper oversight. He also pointed out that it seems to be a change in procedure to issue contracts, even Texas Department of Information Resources contracts, without specific line items.

“It wasn’t just, here’s $20 million – go spend that on DIR,” Ferchill said.

Dickerson said he agreed with that statement, but that even when staffers do provide the specifics, he doesn’t want to set a precedent where they have to defend the budget line by line. “That’s a staff function,” he said. “That’s my honest belief.”

Ferchill said he wasn’t suggesting the commission direct the exact number of items or even the brand, but insisted there should be more oversight than what was currently being presented.

“There’s got to be something in between me giving you a blank check and you giving me excruciating detail,” he said.

Commissioner Jim Boyle agreed. “We have some responsibility about cost, about duplication, about need,” he said. “Maybe you don’t call that policy, but I think we have some responsibility there.”

Commissioner Karen Hadden said the backup for the contract was late and light on substance. She asked that the backup be more complete the next time around.

Dickerson asked if staff could work until the end of the meeting to gather more details about what the contract would buy. Hopkins agreed, and brought the subject up again near the end of the meeting. Staff members did present commissioners with more specifics, but they didn’t have a lot of time to digest the information before making a decision.

Ultimately, it appeared to be too late to change minds. No commissioner would make a motion to approve.

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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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