Change wouldn’t be bet­ter, Ott says

En­ergy

Austin American-Statesman - - THE SECOND FRONT - Con­tin­ued from A Money from Austin En­ergy cus­tomers funds po­lice, li­braries, parks, other ser­vices. Con­tact Marty Toohey at 445-3673.

Ott and Tom “Smitty” Smith, head of Pub­lic Cit­i­zen in Texas, said such a change wouldn’t de­liver the promised im­prove­ments, such as bet­ter pol­icy di­rec­tion and a will­ing­ness to make nec­es­sary but po­lit­i­cally un­palat­able de­ci­sions. In a Wed­nes­day report, the city man­ager also ar­gued that Austin En­ergy’s re­cent dif­fi­cul­ties were cre­ated by pre­vi­ous up­per-level man­agers within the city bu­reau­cracy who “chose to de­lay rather than act” and didn’t bring key in­for­ma­tion to the coun­cil, a sit­u­a­tion Ott said an in­de­pen­dent board wouldn’t nec­es­sar­ily han­dle any bet­ter.

Smith and Ott still dif­fer on some par­tic­u­lars. Austin En­ergy ad­min­is­tra­tors now report to Ott; Smith would pre­fer that Austin En­ergy report di­rectly to the coun­cil.

But the sim­i­lar­ity of their po­si­tions is none­the­less strik­ing be­cause Smith was a lead­ing mem­ber of a po­lit­i­cal coali­tion that as­sailed city man­age­ment over its han­dling of an elec­tric-rate in­crease that took ef­fect in Oc­to­ber. Many of the ac­tivists in that coali­tion have made no se­cret of their dis­sat­is­fac­tion with Ott’s man­age­ment of the $2 bil­lion mu­nic­i­pal government.

The gap has been bridged by a shared opin­ion that Austin En­ergy’s spend­ing — a flashpoint in re­cent de­bates — is now largely ap­pro­pri­ate. Roughly $100 mil­lion col­lected from Austin En­ergy cus­tomers is spent an­nu­ally for po­lice, li­braries, parks and other gen­eral fund ser­vices.

The util­ity also spends an ad­di­tional $50 mil­lion to $70 mil­lion an­nu­ally for other ser­vices not re­lated to elec­tric­ity, a prac­tice crit­ics say amounts to a stealth tax.

But in a report this week, Pub­lic Cit­i­zen con­cludes this spend­ing is roughly what San An­to­nio’s CPS En­ergy and other pub­licly owned peers across the coun­try con­trib­ute to their mu­nic­i­pal gov­ern­ments, but­tress­ing the con­clu­sion an in­de­pen­dent board isn’t needed.

The un­usual pair­ing mat­ters be­cause it could in­flu­ence whether the City Coun­cil re­lin­quishes most or all of its over­sight of Austin En­ergy and also could sub­se­quently af­fect poli­cies such as how ag­gres­sively the util­ity in­vests in green en­ergy. Some worry that op­po­si­tion to the in­de­pen­dent board pro­posal could buoy ar­gu­ments by lob­by­ists try­ing to per­suade con­ser­va­tive law­mak­ers to end Austin En­ergy’s mo­nop­oly.

State Sen. Kirk Wat­son, D-Austin, said he is disap- pointed in Ott’s report, “and I dis­agree with it.”

“Now is a good time to mod­ern­ize the gov­er­nance of Austin En­ergy,” Wat­son said. “It op­er­ates in a com­plex and fast­mov­ing mar­ket. Pub­lic own­er­ship of that as­set is a great ben­e­fit to the peo­ple of Austin, and along with own­er­ship comes a real re­spon­si­bil­ity I think is best served by pro­fes­sional, in­de­pen­dent ex­perts.”

Oth­ers share that as­sess­ment, in­clud­ing Roger Dun­can, a former Austin En­ergy gen­eral man­ager and one of the lead­ing fig­ures of Austin’s en­vi­ron­men­tal move­ment. So does the Coali­tion for Clean, Af­ford­able, Re­li­able En­ergy, a lob­by­ing or­ga­ni­za­tion rep­re­sent­ing some of Austin’s largest busi­nesses, in­clud­ing Sam­sung, Dell and Freescale.

The coali­tion was one of Ott’s most im­por­tant back­ers dur­ing the can­tan­ker­ous, two-year rate-in­crease de­bates that ended ear­lier this year. But the or­ga­ni­za­tion said Ott’s suc­ces­sors could make mis­takes that an in­de­pen­dent board would be bet­ter able to ad­dress, and it plans to push for a board when the Leg­is­la­ture con­venes in Jan­uary.

Ott and Smith rooted their ar­gu­ments in good­gov­ern­ment prin­ci­ples, such as trans­parency and pub­lic in­put, and said that an in­de­pen­dent board could be­come in­sensi- tive to the wishes of the pub­lic.

They also are ar­gu­ing for de­ci­sions that pre­serve their in­flu­ence.

By keep­ing the coun­cil in charge, en­vi­ron­men­tal ac­tivists such as Smith can ex­ert in­flu­ence that comes with the abil­ity to mo­bi­lize vot­ers.

As it now stands, the City Coun­cil di­rects Ott on gen­eral Austin En­ergy pol­icy, such as buy­ing 35 per­cent of the util­ity’s elec­tric­ity from re­new­able sources by 2020. In turn, in­for­ma­tion from the util­ity flows through Ott. If over­sight were turned over to an in­de­pen­dent board, Ott would al­most cer­tainly be re­moved from the equa­tion.

Crit­ics, in­clud­ing a coali­tion of sub­ur­ban Austin En­ergy cus­tomers who live west of Austin, want an in­de­pen­dent board partly be­cause it would be a buf­fer be­tween Austin En­ergy and a city government they don’t think should be spend­ing their util­ity pay­ments on gen­eral ser­vices.

Ott and Pub­lic Cit­i­zen say the coun­cil has largely re­solved Austin En­ergy’s re­cent dif­fi­cul­ties. For in­stance, they say, the pro­longed rate de­bate didn’t pro­duce the feared down­grad­ing by credit-rat­ing agen­cies — it ac­tu­ally ended with Austin En­ergy’s credit rat­ing be­ing raised. Ott wrote in his report that the 18-year span be­tween in­creases in Austin En­ergy’s base rate won’t be re­peated.

“Sim­ply put, if lead­er­ship is un­will­ing to face the heat of a dif­fi­cult rec­om­men­da­tion, it won’t mat­ter what gov­er­nance struc­ture ex­ists,” Ott wrote. “I be­lieve the ship has been righted.”

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