Then There's This: Consumer Alert

There's a glimmer of hope that we won't go broke paying for electricity

Then There's This: Consumer Alert
Photo by Jana Birchum

This week we have two new developments in the Austin Energy rate case. It's unfortunate that these things always seem to break on a Wednesday, which is our press day (very inconvenient) – but such is the nature of breaking news and the scramble to get people on the horn to tell you what's what. And of course, it's possible that this could be old news by the time you read it, but here's the deal:

First, Council Member Mike Martinez is on board with the interim 3.5% rate increase that Laura Morrison and Kathie Tovo introduced last week. Their proposal – sort of an of-the-people action plan – is the alternative, temporary solution to the utility's overall 12.5% rate hike request that has drawn widespread rebuke from consumer and environmental activists and church representatives. The Morrison-Tovo-Martinez plan, which has the backing of consumer advocates and the like, is scheduled for council action March 1 – also the date of the council's third public hearing on the rate plan.

With Martinez teaming with Morrison and Tovo, this leaves the question of who, if anyone, will provide the fourth vote to pass what would serve as a stopgap measure to keep Austin Energy afloat without tapping out residential customers, who would see the largest increase under AE's existing proposal, even after its most recent tweaks. Mayor Lee Leffingwell is regarded as the most likely possible fourth vote, since he's voiced doubt about the council's ability to fashion an agreement on the existing AE proposal and get it passed any time in the near future. But earlier this week, Leffing­well's office was noncommittal about how the mayor intends to vote.

In the second news flash, Austin Energy officials are expected to "clarify" the rate increase as it relates to houses of worship. This clarification will be presented at a community discussion Mayor Pro Tem Sheryl Cole will host today (Thursday, Feb. 16, 2-4pm) in City Council chambers. But it's uncertain whether the utility's illumination of its proposal will completely satisfy churches and organizations like Texas Impact, a grassroots religious network dedicated to social justice issues.

If the 3.5% proposal secures a majority vote, the interim plan would not only provide AE with additional revenue, but it would also give utility officials another 12 to 18 months to create a more realistic, less complex rate plan, which many critics believe was deliberately designed to confuse. There's also some doubt now over whether AE really is hemorrhaging $2 million a week, as it claims, or if the utility is stashing more money than it actually needs for its reserve accounts. There are many, many more questions along those lines, with no systematic process of examining each issue in a public setting.

The Morrison-Tovo-Mar­tinez plan would not include a discount to customers outside the city limits, which AE recently offered in an apparent attempt to ward off the prospect of out-of-town ratepayers appealing to the Public Utility Com­mis­sion, or worse, the Texas Legislature, which has periodically threatened to deregulate municipal utilities. At a Feb. 9 hearing on the rate case, Public Citizen's Tom "Smitty" Smith, who himself lives in the city of West Lake Hills, offered a suggestion for those suburban residents who are banging the taxation-without-representation drum. "We could put up a toll booth at various locations" around the perimeter of the city, he said, ­noting that Red Bud Trail and Bee Caves Road are particularly clogged with vehicles every weekday morning as drivers make their way into Austin to work and enjoy the city's services.

A Real Advocate

Also on Wednesday, Morrison and Martinez both said that the interim proposal would include the hiring of an outside consultant who would be charged with looking out for the interests of residential and small-business ratepayers. This is big news because, until this week, the council had never publicly responded to numerous pleas from consumer advocates to hire a ratepayer expert who would report directly to council instead of to Austin Energy, which according to one activist, made only a token attempt to provide for consumer representation. Under the interim proposal, the public advocate would also play a role in ensuring the success of the utility's green energy agenda, such as its solar program, and in shaping a workable Customer Assistance Program for low-income ­residents.

It's still curious, though, why the council remained mum for so long on hiring a public advocate, especially since the city didn't think twice about hiring an outside consultant in 1994, the last time the utility raised rates.

"When people have mentioned it, nobody ever opened their mouth," said Shudde Fath, one of the three Electric Utility Com­mis­sion members who voted against the narrowly approved plan. Fath and several other consumer pros told the council that the city would be better served by a consultant who reported to the council. The very people who had been pushing for an outside advocate were apparently unaware as late as Tuesday afternoon that a ratepayer advocate had been folded into the Morrison-Tovo-Martinez proposal, making the plan even more ­complete.

Now, all we need is a fourth council vote. Anyone?

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City Council, Austin Energy, rate case, Laura Morrison, Kathie Tovo, Mike Martinez, Lee Leffingwell

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