City Council puts off decision on electric rate increase

Feb. 22, 2012

By Marty Toohey
Austin American-Statesman Staff

The Austin City Council probably won’t decide any time soon how much to raise electric rates.

Austin Energy executives had requested the council vote by March 1, saying that after more than a year of public debate, the city-owned utility needs a decision on new rates or it will have to either put needed construction projects on hold or begin borrowing to make ends meet.

But at a special Wednesday meeting, council members spent nearly four hours debating whether they need another three months or another six months before taking a vote – and finally, as a compromise, the council approved a schedule that included no dates at all.

Council members also discussed approving a "short-term" rate increase some time soon to stanch Austin Energy’s financial bleeding while they untangle numerous issues – but council members said they needed much more information from the utility before deciding how much added revenue it really needs.

The council might iron out some of those details at its March 1 meeting – or not.

"We can always extend this thing," said Mayor Lee Leffingwell, who has said the council should take as long as needed to come to a decision – even if that decision comes after May, when he and three other council members are up for re-election.

Austin Energy is proposing to raise rates an average of 8.7 percent this year and another 3.8 percent in 2014. But the increase would not hit all classes of customers equally.

A consultant hired by the utility concluded that many medium-to-large businesses for years have been paying far more than the actual cost of serving them electricity, which led Austin Energy to propose that homes and small businesses bear much of the increase. Residential customers would see an increase of more than 20 percent once the new rates are fully phased in.

Austin Energy General Manager Larry Weis said the utility needs a vote some time in March to have the new rates in place by summer, when the utility collects much of its revenue.

The proposal has generated criticism from all sides, leaving council members wary. At Wednesday’s meeting, a unanimous council directed the city auditor to investigate whether Austin Energy really needs the added revenue it says it does. City Auditor Ken Mory said the audit could be finished by late April.

The council discussion then turned to a dueling set of proposals. Council members Mike Martinez, Laura Morrison and Kathie Tovo suggested the council take six months unraveling the various aspects of the complicated rate increase, such as how much money the utility needs and how to apportion an increase among various classes of customers.

They also suggested a 3.5 percent interim increase while those questions are answered.

"I just feel with the complexity of these issues," a shorter schedule "is far too aggressive," Martinez said.

Weis said 3.5 percent would not be nearly enough to cover the utility’s immediate expenses. He also noted that the utility cannot implement a 3.5 percent across-the-board increase; a dozen or so large, industrial companies have special contracts that cannot be altered until 2015, so everyone else would actually see a rate increase of nearly 6 percent.

"It does not bring in enough revenue. … We’re as lean as we can be without putting off certain (large construction) projects," Weis said, adding that those projects are needed for the growing utility.

Council Member Sheryl Cole proposed the council make a final decision in late May. Cole’s proposal doesn’t specify whether the council needs to approve a short-term increase; she said it may be necessary and said the council should not wait six months before arriving at a final decision.

"Under either scenario … we have to do something," Cole said. "I just don’t want us to be mealy mouthed with each other or the public about the tough choices we face."

mtoohey(at)statesman.com; 445-3673

Fair Use Notice
This document contains copyrighted material whose use has not been specifically authorized by the copyright owner. SEED Coalition is making this article available in our efforts to advance understanding of ecological sustainability, human rights, economic democracy and social justice issues. We believe that this constitutes a "fair use" of the copyrighted material as provided for in section 107 of the US Copyright Law. If you wish to use this copyrighted material for purposes of your own that go beyond "fair use", you must obtain permission from the copyright owner.

City Council: Halt the Vote for an Un-Elected Board for Austin Energy, the City’s Largest Asset

Democracy and Public Accountability are Crucial

Media Release -April 9, 2013
For Immediate Release

Contacts: Karen Hadden, 512-797-8481, Tom "Smitty" Smith 512-797-8468

Austin, TX The City Council vote Thursday on an ordinance to let an un-elected board control Austin Energy opens the door to industry insiders and special interests and should be halted says a diverse group concerned citizens, including business leaders and community advocates. Bishop Dr. Sterling Lands serves as the presiding Bishop of the Family Life International Fellowship, Inc., which currently has 300 churches globally and pastor of the Greater Calvary Bible Church.

"We must be able to vote for those who control our utility. We must hold them responsible – and vote them out of office when needed," said Bishop Dr. Sterling Lands. "Direct accountability would be compromised by the board structure proposed in the ordinance to be voted on this Thursday. Low-income utility programs are at risk, along with city funds transferred from the utility that are needed for parks, libraries and public safety."

The ordinance being fast-tracked by Mayor Leffingwell, Sheryl Cole and Bill Spelman will be voted on Thursday, April 11th at City Council, as item #11 on the agenda. It would set up a seven-member board of appointees, with nominees to be chosen by corporate headhunters who may not share Austin’s values or commitment to having an outstanding utility with affordable energy and green programs. We, the public, wouldn’t get to vote for them.

"This undemocratic move by the mayor and some council members is a theft of our publicly owned utility. We, the people, are the owners of our utility, yet we wouldn’t get to vote for people in control of our city’s largest asset. Why not? Who will have to bear the burden of rate breaks for the wealthy?" said Karen Hadden, Director of SEED Coalition. "Our green programs and low-income programs are at risk. We don’t want to lose the direct oversight we need in order to keep our city’s $3.9 billion asset on track, and shouldn’t relinquish control of Austin Energy to un-elected industry insiders."

San Antonio’s CPS Energy Board is being used as a model for the Austin ordinance. Alice Canestaro Garcia and others with Energia Mia travelled from San Antonio to talk about the struggles that she and others had with the un-elected utility board there.

"Despite strong citizen opposition the CPS Energy Board sunk millions of dollars into a financially disastrous nuclear project, instead of spending money on coal plant pollution controls that had been promised. The City Council couldn’t get the information they needed from the utility and skyrocketing costs – over $4.2 billion – were hidden from the public. Austin shouldn’t risk the loss of direct accountability for utility control by people who are elected," said Canestaro-Garcia. "The "business professionals" in San Antonio made a huge, expensive mistake in investing in more nuclear reactors, while Austin’s City Council saved the city millions of dollars by staying out of the project. Accountability is crucial."

"We need to look out for the economic well-being of local businesses and can’t risk negative impacts on the many local solar and energy efficiency businesses that have been growing in Austin," said Carey Ibrahimbegovic, co-owner of Greenbelt Solar. "People should be able to vote for whoever controls our utility, in order to ensure that our nationally recognized green energy programs stay in place."

"This is about who controls our government. It’s about keeping the people in power – the 99%, instead of letting the special interests, that represent the 1%, take over our city’s largest asset," said Daniel Llanes, chair of the Riverbluff Neighborhood Association and Coordinator of the Govalle -Johnston Terrace Neighborhood contacting team.

"The additional layer of bureaucracy that would be created by an un-elected board would insulate an un-elected board from public scrutiny and City Council would likely end up rubberstamping their recommendations -whether good or bad," said Lanetta Cooper, representing Gray Panthers of Austin.

"Customer Assistance Programs that are essential to helping people keep the lights on during tough financial times and crucial weatherization programs could be put at risk if a separate utility board is created," said Carol Biedrzycki, Executive Director of Texas ROSE – Ratepayer’s Organization to Save Energy. "The door was slammed in our face early on when we were told that our ideas were outside the scope of the consultants report that would examine whether Austin should have a separate utility board."

Austin Energy governance could be improved within existing structures. Monthly meetings for energy issues alone would help. City Council could designate an Austin Energy subcommittee if desired and a ratepayer from outside the city limits could included in the subcommittee. Seattle decided to keep Council control of their municipal utility after two years of considering an appointed board.

City Council should not rush such a major decision, one that impacts our health, our economy and quality of life for all of Austin. Citizens should be able to vote on whether they

want such a drastic undemocratic change at all, and should remain able to vote for those who control Austin Energy.

"Austin Energy has been an industry leader on energy efficiency and renewable energy, has won national awards and had great customer satisfaction. Average bills are lower than half of our state. Citizen pressure and demand for accountability are major factors in this success," said Tom "Smitty" Smith. "We must keep Austin Energy accountable by keeping control in the hands of those we elect."

Cyrus Reed, Conservation Director for the Lone Star Chapter of the Sierra Club, relayed the importance of keeping energy efficiency and renewable energy programs strong and keeping utility goals in place.

  • Director of PODER – People Organized to Defend Earth and Her Resources – Susana Almanza
  • Austin Sierra Club Executive Committee member Roy Waley;
  • Director of Clean Water Action David Foster;
  • Solar Austin Executive Board member Kaiba White,
  • Activate Austin representative Marion Mlotok,
  • Greenpeace Director Ryan Rittenhouse,
  • Texas Campaign for the Environment staff,
  • Energy expert Paul Robbins,
  • Texas Table staff members,
  • Consumer Advocate Bill Oakey and
  • Environmentalist Colin Clark
  • Community Advocate Ruby Roa
  • Independent Business Man Jason Meeker
  • Stan Pipkin
  • David Dickson

Related materials can be found online at www.CleanEnergyforAustin.org.

###

Group envisions carbon-free utility

July 09, 2014

By Lilly Rockwell
Austin American Statesman

Austin Energy should meet the goal by 2030, advisory task force says.

Austin Energy should become 100 percent carbon-emission free by 2030.

That’s not a pie-in-the-sky environmentalist’s dream.

It’s a policy recommendation delivered by an Austin advisory task force charged with setting new renewable energy goals for the city’s electric utility, though it was offered with a caveat: Do so as long as it doesn’t cause rates to skyrocket.

The group, called the Austin Generation Resource Planning Task Force, was asked in February to find ways to accelerate the city’s efforts to wean itself off carbon-emitting fuels such as coal and natural gas, which most scientists say contribute to climate change.

The task force is chaired by a former Austin Energy executive, Michael Osborne, and it includes people who work in the clean energy industry, as well as advocates for ratepayers and low-income residents.

In earlier discussions, Austin Energy was tasked with generating 35 percent of its electricity from renewable energy by 2020. But the utility will meet that goal four years early — in 2016 — thanks to large solar and wind contracts and encouragement to customers to either install their own solar panels or participate in the utility’s renewable energy service.

On Wednesday, the task force approved a draft report with more than a dozen recommendations that will eventually be sent to the Austin City Council. But first, it considered feedback from advocates for low-income residents, environmentalists and supporters of the renewable power industry, who largely gave the task force a thumbs-up on the recommendations.

"This sets us on a path to a clean energy future that is more affordable for all ratepayers and better for our community," said Dave Cortez, the Sierra Club’s Beyond Coal organizer.

The report lays out a blueprint for how the utility can achieve its carbon-free 2030 goal, making it one of the most aggressive utilities in the country in its efforts to back away from coal and natural gas. The suggestions included:

Fayette map

  • Eliminating two carbon-emitting plants.
  • Adopting an ordinance that would require local homebuilders to offer solar packages to buyers.
  • Making energy efficiency programs more affordable to low-income residents.

Last year, Austin Energy produced 4.8 million metric tons of carbon dioxide emissions through its coal and natural gas plants, according to the report. To bring that number to zero in 15 years, Austin Energy will have to stop using its coal plant in Fayette and the gas-powered Decker plant in East Austin. It suggests changing the ownership structure of the Fayette Power Plant — which the city co-owns with the Lower Colorado River Authority — to make it easier for Austin to sell or shut down its component.
Some City Council members have supported cutting ties with the Fayette coal plant. But an analysis by Austin Energy earlier this year showed that option could be costly to ratepayers, with projected increases of 5 to 25 percent.

The task force also suggests that the gas-powered Decker plant, which was built in the 1970s, be shut down in favor of solar energy by 2016.
Robert Cullick, an Austin Energy spokesman who attended the meeting, declined to comment on the Fayette proposal, and said the utility has no current plans to mothball the Decker plant, calling it "still a financially viable plant."

The report didn’t address what to do about Sand Hill, Austin Energy’s newest gas-powered plant. Osborne said just getting to 80 percent carbon-emission free by 2030 would be a noteworthy accomplishment.

"We can get a long way toward the council’s goal of decarbonizing the electric utility much sooner than most people think," Osborne said. "We can do that with the removal of the coal and Decker plant, and how the rest of it works out — who knows?"

CONTACT LILLY ROCKWELL AT 512-445-3632.

Fair Use Notice
This document contains copyrighted material whose use has not been specifically authorized by the copyright owner. SEED Coalition is making this article available in our efforts to advance understanding of ecological sustainability, human rights, economic democracy and social justice issues. We believe that this constitutes a "fair use" of the copyrighted material as provided for in section 107 of the US Copyright Law. If you wish to use this copyrighted material for purposes of your own that go beyond "fair use", you must obtain permission from the copyright owner.
Clean Tech for Austin
Low Bills for Austin
Clean Air for Austin