Morrison and Tovo Step Up

by Robin Rather, Feb. 9, 2012.

In an unexpected and powerful move this morning, Council-members Laura Morrison and Kathie Tovo announced a counter-proposal today that takes the sting out of the Austin Energy rate increase and replaces it with sanity, simplicity and fairness. (The full text of their press release appears below this post.)

Morrison’s background and master’s in “Disaster Preparedness” may have come in handy as she calmly announced the new approach, designed to move the discussion away from Austin Energy’s proposal and onto something more coherent.

Calling it an “interim” rate increase, the two are recommending a system-wide increase of 3.5% across the board and would allow up to a year for the council to study and sort out the mountain of questions left on the table by Austin Energy’s management team before deciding on a more permanent rate strategy. (see here for an overview of some of these questions.)

Their plan would provide a still whopping $35 million to AE’s coffers this year but far less than AE’s poorly justified request for $126 Million. The Morrison/Tovo plan would eliminate the special discount proposed for those customers outside the city limits. It was unclear whether the 3.5% increase would also apply to the largest corporate customers who’s sweetheart rate contracts do not expire til 2015. Some citizens have suggested that large corporations be asked to voluntarily comply with the suggested increase as the rest of the community must, but the council member’s did not include that suggestion themselves.

The AE management proposal, which called for a rate increase three times larger at 12.5 percent and which put the heaviest rate burden on the poor while allowing large corporations to skate, has been vehemently rejected by virtually every environmentalist, consumer advocate, church and small businesses in town. Members of the Council’s Energy Utility Commission had a split vote. See here for the EUC Chair’s explanation of the vote.

AE management had not responded by noon today but it was clear to many that their latest proposal was destined to get pounded by citizen critics again at tonight’s hearing and was likely to be just as dead on arrival as the previous version was last month.

Immediate reactions from those attending the Morrison/Tovo press conference were generally positive. Paul Robbins, considered by many to be Austin’ pre-eminent energy analyst and consumer advocate called today’s proposal “more of an increase than I hoped, but still I’m good with it.” Tom “Smitty” Smith of Public Citizen, Cyrus Reed of the Sierra Club, Josh Houston of the faith association Texas Impact, Carol Biedrzycki of Texas ROSE, PowerSmack founder Mike Sloan of Virtus Energy, and Andy MacFarlane of Data Foundry representing a large business perspective, all gave the concept a preliminary thumbs up.

It is not clear whether Morrison and Tovo will be able to get the two more votes needed to clinch a victory for their plan. Councilmember Bill Spelman had his own suggestion in the works but has not indicated what his next step will be as yet. Rumor at city hall indicated that Sheryl Cole was possibly interested but awaiting more details. Mayor Leffingwell and Councilmembers Riley and Martinez gave no clues as to their thinking.

The Austin City Council is supposed to give policy oversight to Austin Energy. However, since AE was unable to deliver a rate game-plan that was even remotely acceptable to the Austin community, it was only a matter of time before someone on the Council had the courage to lead the city forward in a more positive and equitable direction.

PowerSmack will post additional perspectives and details as they become available. If you want to weigh in to the Council, go to http://www.austintexas.gov/department/city-council to find email and phone contact info.

_______________________________________________________
FOR IMMEDIATE RELEASE
February 9, 2012
Contact: Barbara Rush: (512) 925-2271 – Morrison’s Office
Contact: Shannon Halley (512) 565-0257 – Tovo’s Office

Council Members Morrison and Tovo Propose Alternative to Austin Energy’s Rate Increase

As a short-term measure to replace Austin Energy’s current proposal of a 12% system-wide rate increase, today, Council Members Laura Morrison and Kathie Tovo proposed an interim 3.5% system-wide rate increase.

Morrison and Tovo were joined at the news conference by consumer advocates who have voiced concerns that Austin Energy’s current 12% rate proposal will negatively impact affordability for Austin ratepayers.

Council Member Morrison said, “We’ve heard from the community loud and clear that the Austin Energy rate proposal will have too much impact on ratepayers—especially our families, our small businesses, and our faith community, all of whom would experience very high rate increases. It’s important that we work to keep Austin an affordable city to live in, especially in these difficult economic times.”

If Council approves the 3.5% interim increase in March 2012, it would go into effect in June 2012 and be in place for approximately one year. “We are thoroughly committed to the financial health of Austin Energy,” said Council Member Kathie Tovo. “However, we must adopt a rate structure that balances the utility’s financial health with our commitment to keep Austin affordable for all the people who live and work here.”

The Morrison and Tovo interim rate proposal would meet Austin Energy’s goal of getting an increase in place before the summer months so that the city’s utility can remain financially secure and sound. During the interim, the financial status of Austin Energy will be carefully reviewed quarterly by the City Council.

Delaying a year will give Council time to the make informed policy decisions that will help guide Austin Energy to craft a rate proposal that is more equitable and has less impact on Austin ratepayers.

In addition, their proposal does not include discounted rates for non-Austin residents, because Morrison and Tovo believe a discounted rate for one set of customers would be unfair to Austin ratepayers.

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