Change wouldn’t be better, Ott says
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.”