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Then There's This: Power Play

Debate continues over governance of Austin Energy

By Amy Smith, Fri., April 19, 2013

Laura Morrison
Laura Morrison
Photo by John Anderson

So, remind me again why we need to rearrange the deck chairs at Austin Energy?

Judging from last week's City Council hearing and deliberations from the dais, there was no factual evidence pointing to a crisis at the electric utility; no explanation to warrant asking the Legislature to trump the City Charter so Council can change the governance structure without a vote from the citizen owners, and nothing to suggest an immediate need to hand over control of the utility to an unelected, independent board.

Nevertheless, Council, after considerable debate spanning nearly two hours, gave very tentative approval to a draft ordinance to create a new board to oversee the municipal electric utility. Yet the amended version of the ordinance, which passed on a 6-0 vote (with Council Member Kathie Tovo out of the country), still left at least two members wary of the potential outcome – but for diametrically different reasons. Council will plow back into shaping the ordinance at a work session April 23, with action scheduled for April 25, although with CM Mike Martin­ez's scheduled absence from that meeting, it's possible the vote will be pushed to May 9.

Mayor Lee Leffingwell, who sponsored the proposal with CM Bill Spelman, voted against most of the changes, but in favor of the overall package. He said he may vote against the final product on third reading "if it's still this weak." CM Laura Morrison, who drove most of the amendments, still wants additional language specifying Council's broad authority over utility matters. Leffing­well views that approach as a step backward, creating a "glorified Electric Utility Com­mis­sion" – an advisory panel of volunteer citizens, rather than a board of professionals with the business smarts to run a utility.

Morrison's first and most significant amendment came in two parts: 1) Council would retain its powers and specify which duties and responsibilities would go to the board, rather than surrender all its powers in one fell swoop; 2) The board would have more limited decision-making authority over high-dollar contracts and expenditures than what's currently proposed (up to $100 million), and such contracts must comply with city policies and master plans.

CM Chris Riley echoed that motion with a second (drawing applause from the audience), arguing that this "would reflect that we're going to proceed cautiously, recognizing that the public has a great interest at stake here in terms of its interest in accountability and transparency." The motion failed on a 3-3 deadlock, with Morrison, Riley, and Martinez in favor, and Leffingwell, Spelman, and Mayor Pro Tem Sheryl Cole opposed.

Cole later resuscitated part one of Morrison's motion and called for a second vote to reconsider Council retaining its powers and determining which duties it wants to transfer to the board. That motion passed 4-2, with only ordinance sponsors Lef­fing­well and Spelman voting no.

Council's direct discussion had been preceded by lengthy testimony on both sides of the debate, with business and industry representatives on one side and consumer and environmental activists on the other.

Spelman qualified his nay vote, saying he didn't necessarily believe it would be bad form for Council to retain authority, but he first wanted to take the time to study the data that Morrison used to draft her amendments. Morrison successfully moved a handful of other amendments, gaining support from the mayor on at least two of them. The changes gave opponents of the governance change some amount of hope, but their progress may be short-lived. On Tuesday, the Electric Utility Commission majority reiterated its strong support for a governance change, while also advocating removing much of the utility's day-to-day oversight from City Man­ag­er Marc Ott. At last week's hearing, EUC members Stephen Smaha and Phillip Schmandt advocated for the governance change while member Karen Hadden spoke against.

Once Council voted on all the amendments, it turned to a related matter of endorsing, on a 5-1* vote (with Morrison opposed), state legislation by Sen. Kirk Watson and Rep. Eddie Rodriguez that would enable Council to change the utility's governance structure without a charter election. Watson's bill has cleared the Senate and Rodriguez' companion bill is set for a House committee hearing April 24.

Morrison, before casting the lone nay vote regarding the legislation, warned that Council was heading down a dangerous path of supporting a measure that would trump the City Charter. She raised the possibility of the governance issue becoming a hot campaign topic in the 2014 election cycle, one that could result in a new Council overturning the ordinance, should it pass. "I highly suspect that as soon as the campaign season starts, the question's going to be, 'Do you support having an independent board?' I'm willing to put my money on some candidates winning that do not like the idea of a completely independent Austin Energy [board]."

*This story has been updated to correct the vote on Council's endorsement of proposed legislation. The vote was 5-1 (with Tovo absent), not 6-1 as originally reported.

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