Austin Energy:  A Wake Up Call

by Robin Rather & Mike Sloan SEP 24, 2010.

Larry Weis, the new General Manager for Austin Energy, starts work on Monday.

What will he awake to find?

A)  A utility that at the beginning of 2008 was widely recognized as the greenest, most innovative, and among the most affordable utilities in Texas.

B)  A utility that owns many power plants, 99% of which are nukes, coal and natural gas.

C)  A utility that is steering steadily toward the rocks with an obsolete business model based on growing use of its nukes, coal and natural gas.

D)  All of the above.

Many in our community believe the answer is D) All of the above.

Austin residents, who own their own electric utility, should rightfully be concerned about who is behind the helm. For the last six months, city administrators rather than energy professionals have been steering. Now Weis arrives to take charge, but without knowledge of the local waters that are the Texas electric system and Austin’s complex political dynamics. Will Weis and City Manager Marc Ott – who the GM will report to – navigate Austin Energy to its rightful place as a leader, or instead hold a course of peril? That is an open question and a serious one. It takes a long time to build an innovative market leader, but almost no time to wreck it.

When Weis walks into his office on Monday he faces these cold hard facts:

Austin Energy, at the beginning of 2008, was ranked in Texas

#1 in new Solar installations
#1 in Voluntary Renewable Energy use
#1 for lowest “Green” Rate  (compared to competitive market)
#1 for lowest “Regular” Electric Rate (compared to competitive market)

Now, based on current data, Austin Energy’s status in Texas has fallen:

#2 in new Solar installations
#4 in Voluntary Renewable Energy Use
#69 for lowest “Green” Rate (relative to 71 competitive market green rates)
#128 for lowest “Regular” Electric Rate (170 competitive “regular” rates)

Relative to other Texas energy companies, Austin is now doing less
with green power and its electric rates are higher, with significant rate hikes on the horizon.

He would be wise to wake up and start asking the big questions.

1. Why are Austin Energy’s rates on the way up when the rest of Texas
rates are generally on the way down?

2. Why is Austin Energy preparing its rate case based on an old business
model that is widely seen as financially unsustainable?

3. Why have Austin Energy’s operational, fuel and capital costs skyrocketed
rather than be streamlined for the ongoing economic crisis?

4  Why has Austin Energy delayed resolving an affordability goal – requested by Council, and a wide range of business, environmental and consumer advocates – which is holding up action on the Generation Plan designed to make Austin cleaner and more affordable?

There are more questions to be asked….

Energy is the most important factor for Austin’s economic future. It is the key to our sustainability. This is no time to backslide on commitments. No time to pretend that Austin Energy can keep on its current path.

It is clear we have to live by the famous technology saying - innovate
or die.
Larry Weis is not the only one who needs to wake up on Monday
and start moving Austin Energy to the next level. We all do.

For details on the numbers above, see   Texas Power Rankings
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