Like a Rose

The LCRA and Mark Rose: It's a Beautiful World

by Robert Bryce

It would be hard to

imagine a better job for a political animal. You don't have to run for re-election. Your salary of $155,000 is far more than you would make as an elected official at the city or state level. You head an agency with 1,700 employees and a $400 million budget. Last year, your board gave you a 10-year contract. And best of all, you don't have to tell anybody whether you are a Whig, Democrat, Marxist, or Sendero Luminoso.

For Mark Rose, it's perfect. He can play a role in all the major issues facing Central Texas, from water supply and electricity to recreation and endangered species. And all those commodities are in greater demand. As the region grows in population and influence, so will the Lower Colorado River Authority (LCRA) and its general manager.

Rose, 42, has surrounded himself with politicos who know how to play the game at the city, state, and federal levels. Last year, he hired Charles Urdy, the former Austin city councilmember. This year, it was Paul Hilgers, former chief aide to retired U.S. Rep. Jake Pickle. A while back, his agency hired Missy Mandel, a former role player in the Carter White House. In September, Rose hired Joe Beal, an engineer from Espey Huston and Associates who has played a key role in the effort to create the Balcones Canyonlands Conservation Plan.

The LCRA also has a few lobbyists. According to the Texas Ethics Commission, the agency spent at least $80,000 to hire a dozen lobbyists during the last session of the Texas Legislature, including Mike Toomey, Gordon and Rob Johnson, and Nub Donaldson. The agency also pays a handsome sum for the services of lobbyist David Armbrust, who represents the LCRA in its bids to gain all or part of the City of Austin's electric utility business.

Call it empire-building. Rose says he's just doing his job. "I don't consider this to be a fief-dom," he said. "The only thing that is important to me is what it is we're doing. I believe we're here to serve. If we don't do our job as a river authority, and protect the assets of the Colorado River, we should not exist. The Legislature should do away with us and send me and everybody here packing."

That isn't likely to happen. The LCRA celebrates its 60th anniversary this year. By hiring lots of skilled people, Rose is trying to assure that it will be around for another 60 years. He likes to quote his predecessor at LCRA, David Freeman, who used to say "We play politics, but we aren't partisan." Tom "Smitty" Smith, director of Public Citizen of Texas, says of Rose, "It certainly is clear that he is hiring people who have been politically active and that can give him quite a base of power."

But Smith also counts himself among Rose's biggest fans. "I think he's doing a great job. He's probably one of the most progressive utility executives in the country."

Rose certainly has made the LCRA, the state's eighth largest utility, into an efficient operation. And the agency has had lots of good press while maintaining favorable relations with its customers. A year ago, Standard & Poor's increased the LCRA's bond rating, a move which will save the agency money on its capital debt. In June, Standard & Poor's named the agency as the nation's best wholesale electric provider. LCRA has promised to freeze its electric rates until the year 2000.

The agency has become an environmental leader in water quality and air quality. It has raised environmental awareness all along the river through the Friends of the Colorado River Foundation, which sponsors education and cleanup programs on the river and through the Colorado River Watch Network. It has created numerous public recreation areas along the river, including several primitive camping spots and the popular Camp Chautauqua on Lake Travis.

Last spring it agreed to voluntarily reduce greenhouse gas emissions from its power plants. And last week, the LCRA held a dedication of its new wind-power facility in Culberson County. The new wind turbines, built by a California-based company called Kenetech, are generating 35 megawatts of pollution-free power. The city owns 10 megawatts of that; the LCRA gets the remainder.

While it flourishes, the agency also faces uncertainty in the new era of deregulated electricity. If, in 1997, the Legislature decides to completely deregulate the electric power industry, the LCRA will have to scramble. But Rose and his cohorts are already planning for the future and they like what they see. During the last session, the Lege allowed electric utilities to sell electric power on the wholesale level, and the LCRA is creating a subsidiary corporation which will trade electric power on the open market.

Some of that power will come from a contract the LCRA recently negotiated with Destec, an independent power producer, which was spun off by Dow Chemical Co. in 1989. The contract allows the LCRA to buy 400 megawatts of power from Destec at what Rose calls a very good price (he won't give the price). The LCRA can then turn around and sell that power to its retail customers at a profit.

And even if the Legislature decides to let the electric industry go into no-holds-barred competition, the LCRA will retain a significant advantage over other utilities. As a quasi-governmental entity, it is exempt from many of the taxes competitors must pay. It owns several billion dollars worth of generating equipment, and its transmission lines will be extremely valuable in a deregulated environment. Plus, it is already the lowest-cost electric provider in the state, so it will begin the era of deregulation with a price advantage over investor-owned utilities like Texas Utilities, Central and South West, or Houston Lighting & Power. The LCRA also has reaped the benefits of a decision made in the 1970s not to get involved in the South Texas Project, the nuclear power plant in Bay City which has cost investors (including the City of Austin, which owns 16% of the plant) millions in recent years due to mismanagement and cost overruns.

Like other electric utilities, the LCRA is looking at expanding into a new business: telecommunications. The agency owns nearly 3,500 miles of right-of-way throughout the Hill Country and has already begun stringing fiber optic cable on its towers. That fiber optic capability could become a major business for the agency. At present, Rose says the agency is looking to do a joint venture with another company. But the capability is already there, and agency insiders say the revenue from such a venture could be substantial. "We are exploring that," says Rose. "I think that in the area of telecommunications, it's the 1930s all over again."

While Rose earns a substantial salary for his job at LCRA, he points out that he could make quite a bit more money at an investor-owned utility. So you will pardon him if he has done some deals that make his life easier. The latest one includes the purchase of an 11-acre tract in Bastrop which is called the Riverside Conference Center. In an interview with the Chronicle last year, Rose said, "The reason that Bastrop was picked is because it's my hometown." Indeed, the new facility is located just a block and a half from Rose's home at 1208 Church Street. The LCRA will spend $2.9 million renovating and expanding the structures on the property. It's a beautiful place. The historic buildings on the grounds give it a quaint atmosphere, and the LCRA has enlarged one of the buildings so that it will seat 120 people.

Purchased last July from Houston oil and real estate mogul George Mitchell and another investor, the land also sits immediately next to a home owned by Rose's longtime friend Joe Beal. And the LCRA did Beal a favor less than three weeks after buying the land from Mitchell by selling a 0.16-acre tract to Beal so that he could build a garage on it. It wasn't a big deal - Beal bought the property for about $3,000. Rose defends the move, saying that the agency frequently sells small parcels of land to people who have encroached on LCRA land.

As for the conference center, Rose explains that the agency has been planning to build one for several years and that the old facility at Lake Buchanan was simply too remote for the LCRA employees who work at the Fayette Power Plant near La Grange.

"I don't think the LCRA has become more powerful," Rose says. "We've been a big part of Central Texas for decades. It's just that people in Austin are becoming more aware of us."

A member of the Austin City Council from 1983-1987, Rose has been transforming the LCRA into a potent force in regional politics, while avoiding any and all questions about his political leanings. He does it in order to keep his job. He answers to an LCRA board appointed by the governor. So in recent years, Rose has had to deal with Republicans appointed by Bill Clements, Democrats appointed by Ann Richards, and now another set of Republicans appointed by George W. Bush.

Rose has the sort of cool detachment that you would expect from a professional politician. There are no rough edges visible. A graduate with a history degree from UT, he speaks slowly, carefully. His small office is lined with books, mostly biographies. His pants are carefully creased and the brown loafers he was wearing during a recent interview had large holes in the soles.

Asked about his political aspirations, he replies with an earnest speech praising the LCRA. "I am really content and challenged by what I'm doing. I am deeply committed to this place and the issues that affect rural Texas," he says. "I am committed to the river. I am committed to the mission of the LCRA, and it starts and stops there."

As for his future, he says he will "probably" run for political office again. But he adds, "I couldn't tell you what party I would be affiliated with." He insists that he will finish his current 10-year contract and stay on at the LCRA until at least 2004. Then, when he's in his early 50s, he says, he will re-think his political future.

Until then, he's in no hurry. And he has no reason to hurry. As Smith said, "There aren't too many jobs that would give him more power and prestige than the one he's got right now."

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