Naked City
Electric Storm
By Kevin Fullerton, Fri., July 14, 2000
So, Austin, how much do you trust your electric utility to work on your behalf? Enough to let it hide contracts, maintenance schedules, and other documents from public view so that it can more aggressively recruit industries into the city limits? That's what the City Council will soon have to decide, after a group of consultants and city commissioners review a proposal from Austin Energy that would afford the city-owned utility the same right currently enjoyed by private utilities to keep sensitive financial information secret.
Those utilities may one day be allowed to vie for Austin Energy customers, if the city opts to open its service area to competitors in 2002 as permitted by recent state legislation, but AE officials say the scramble to win tomorrow's customers is already on. High-tech companies are demanding more sophisticated levels of service, they say, and the utility will be at a disadvantage against electricity providers in Round Rock and other surrounding cities if it can't negotiate those arrangements in private.
Revenues from Austin Energy dumped more than $60 million into the city treasury last year, and everyone wants to see that cash river keep on widening. But drawing the blinds on the utility's financial dealings runs counter to Austin's cherished tradition of citizen oversight.
Longtime consumer advocate Paul Robbins is not impressed, for example, that nine other Texas cities which own electric utilities -- including Lubbock, San Antonio, and Brownsville -- have already passed resolutions similar to the one Austin Energy is proposing. "Maybe those cities don't have the history of public scrutiny we do," says Robbins.
Robbins says that Austin Energy's "utility secrecy resolution" is an overreaction to a perceived threat from competitors that hasn't yet materialized. He says that until Austin votes to let rivals step on AE's turf, if it ever does so, the utility has no business depriving ratepayers of the right to examine how their money is spent. Under the resolution, which will be scrutinized this month by the city's Electric Utility Commission and outside experts before it comes to a City Council vote, Austin Energy would be shielded from releasing any information concerning:
Robbins says that without access to this information, the public won't know if rate increases are justified, if the utility is sincerely pushing energy conservation and renewable energy acquisition, or if it's steering into another sinkhole like the infamous South Texas nuke. "Austin Energy will be accountable to no one but God -- maybe," says Robbins. Tom Smith, of consumers group Public Citizen, adds that Austin Energy has recently become a leader in purchasing "green" energy partly because his group was able to use the utility's data to prove the idea was viable.
Members of the Electric Utility Commission, however, believe Robbins and others are being a bit paranoid. Longtime commissioner Shudde Fath, who's long been known for her keen nose for sour deals, says she believes the utility is acting in the city's best long-term interests. "I think it's reasonable, I really do. I want us to remain publicly owned, and we've got to be competitive to do that," she said. Competing utilities "would have less concrete proposals and offers to make [to customers] if they knew less details about our various contracts and plans. They would be more in the dark about making offers."
But Robbins says Austin Energy has already acted deceptively by appointing a local consultant, GDS Associates Inc., to represent consumers' interests on the evaluating team. Scott Norwood, a principal partner in that firm, says that his current clients include cities and consumer-owned electric cooperatives who are challenging massive private utilities' petitions before the state Public Utility Commission to pass on billions in old capital costs to ratepayers when deregulation hits in 2002. To date, Norwood's recommendations haven't favored the utilities.
In the case of the Austin Energy secrecy proposal, Norwood says that while AE may be trying to shield more information than necessary, conventional wisdom dictates that public utilities batten down the hatches against private competitors in the deregulated marketplace. New industries are highly mobile, Norwood says, and willing to move into whichever electric service area they prefer. "Whether Austin opts in [to competition] or not, they will have to compete for new loads, new industry expanding in their service territory," he says.
AE general manager Chuck Manning adds that as private utilities crowd into municipal markets, they'll be cranking up the lobbying pressure on cities to lower the gates to new electric service, and much of AE's service area extends outside Austin's political bulwarks into more impressionable burgs such as Pflugerville, Rollingwood, and West Lake Hills. "We don't want to maintain secrets," says Manning, noting that AE would still make more information accessible than most other public utilities, but "we have a very high-density load, customers who would be very attractive to other providers."
The resolution should come before the City Council for a vote in August.
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