Energy in the News: Throwing money at problems is not helping Austin’s poor

Robbins: Throwing money at problems is not helping Austin’s poor

By Paul Robbins – Special to the American-Statesman, Monday, June 8, 2015

Austin has one of the highest, if not the highest, costs of living in Texas. The situation is so bad that, according to an analysis of Census data, many poor people are leaving the city, moving to surrounding areas because they cannot make ends meet. One would think that utility programs put in place by the city of Austin to assist low-income people are essential to helping these residents survive. When poorly planned, however, the programs waste scarce resources, providing reasons for fiscal conservatives to be cynical about their effectiveness.

Last fall, I investigated inefficiencies in a utility bill assistance program run by the city, the Customer Assistance Program, known as CAP. I discovered that CAP, which gives rate relief to low-income customers, was giving money to wealthy people as well as poor ones.

Over 1,100 customers in homes worth more than $300,000 were receiving CAP funds. While some of these were understandable, such as small homes in gentrified neighborhoods, many others were unmistakably wealthy. One 8,100-square-foot Lake Austin mansion worth about $4 million had its own indoor movie theater. Another CAP recipient owned 44 properties collectively worth $10.7 million.

This is one of several examples where Austin has thrown money at aproblem without thinking it through. Unfortunately, the list goes on.

CAP gives a 10 percent electric rate discount no matter how much a customer uses. While many people receiving assistance are frugal, some consume much more than average. In these cases, CAP is subsidizing waste. Assistance from the city should be going for basic needs, not to pay for luxury.

Another bad example is the city’s free weatherization effort to help poor people save energy. The federal government had a number of stimulus programs to get the country out of the 2008 recession. One of these gave about 2,000 Austin homes free weatherization and appliances, including central air conditioners.

While this may have stimulated the economy, it did not do much to lower bills. A survey of these homes showed so little energy reduction that the average payback on electricity savings would be over 59 years. You could literally give money away as rate relief and do better than this. The saddest part is there is a serious effort by some low-income advocates to expand this failure.

Yet another bad example is the utility’s debt expense. Austin Energyis losing $21 million a year from unpaid bills, much higher than two years ago. In late 2013, the Austin City Council was urged by some low-income advocates to come up with a lenient cutoff policy. The idea was, “Give customers extended payment arrangements, and you will get more of the city’s money back.”

It did not work. Nineteen months later, advocates are asking for still more time. Meanwhile, most people on these extended payment arrangements are getting further behind on their bills, some to the point where they will never dig out because their debt is so high.

The failures in these programs, taken as a pattern, do not inspire confidence.

The poor pay for these mistakes as well as the rest of us. Directly, they pay for failed conservation programs that save almost no energy. Many low- and moderate-income customers also pay for CAP, even when it goes to the wrong people. Poor people that are current on their bills pay for the bad debt of people who are not. In 2014, the lost revenue amounted to $48 for the average Austin residential ratepayer, accelerating the need for a new rate increase.

The poor also pay indirectly. If 10 percent of CAP is lost because of a flawed enrollment system or discounts for high consumption, that is $1.4 million a year wasted. Money spent on failed weatherization programs that save almost no energy is diverted from energy-saving programs that are effective.

If the city wants to help the poor effectively, it needs to stop throwing money at problems. Low-income assistance programs will never have enough money. The funds that are available need to be spent strategically and carefully.

Robbins has been a consumer advocate since 1977.

Water in the News: Water Treatment Plant #4 Commissioned

Taps flowing, but is there demand for Austin’s WaterTreatment Plant 4?

By Andra Lim – American-Statesman, Posted: 8:35 p.m. Friday, Dec. 19, 2014

At the grand opening Friday for a water treatment plant in West Austin, a trio of city officials raised their glasses and said “cheers” to a project that has often been the target of jeers.

Even as city officials toasted the facility Friday, they also admitted that the water demand projections that helped persuade a slim City Council majority to approve building the plant in 2009 didn’t come true.

The last thing Austin needed to do was build a half-billion-dollar water treatment plant at this time,” environmental activist Paul Robbins said. “We are up to our gills in overcapacity. No pun intended.”

Energy in the News: Utility discounts may be going to people who don’t need them

Utility discounts may be going to people who don’t need them

By Sophia Beausoleil, KXAN, Updated: December 1, 2014, 9:22 pm

AUSTIN (KXAN) — Keeping the lights on can be pricey, and that’s why Austin Energy created the Customer Assistance Program to help reduce utility rates for low-income consumers. But the discounts may not be going to the people who need them.

“I was particularly astounded when I started seeing $1 million homes and $4 million homes on the list and I knew the system needed to be corrected,” said Paul Robbins who has been a consumer advocate and environmental activist in Austin for 37 years.

Robbins said he had heard there were problems with the new automatic enrollment system and decided to check it out for himself. He put in a public information request for the participants in the Customer Assistance Program, reviewed their real estate assets and determined more than 1,100 customers in homes valued more than $300,000 were receiving utility discounts.

Energy in the News: Why Austin utility bill discounts aren’t just going to the poor

Why Austin utility bill discounts aren’t just going to the poor

By Lilly Rockwell – Austin American-Statesman, Posted: 12:01 a.m. Monday, Dec. 1, 2014

As a luxury home builder, Majd Hinedi lives in pretty nice digs himself. His 6,315-square-foot West Lake Hills home is valued at $1.2 million and sits in a cul-de-sac. According to online real estate database Zillow, it has five bedrooms, a pool and a guest house.

But…He is getting a discounted rate on his water, wastewater and drainage fees by being part of Austin Energy’s “Customer Assistance Program,” which is designed to give reduced rates and fees to low-income customers.

An analysis of water and drainage customers on the Customer Assistance Program by activist and consumer advocate Paul Robbins, who obtained the information through an open records request, shows that more than 1,100 people in this program — about 6 percent of the recipients — have homes valued at more than $300,000.

Energy in the News: Austin’s energy goals laudable but counter to laws of physics

Robbins: Austin’s energy goals laudable but counter to laws of physics

By Paul Robbins – Special to the American-Statesman, Posted: 1:46 p.m. Thursday, Sept. 4, 2014

Scientists and policymakers who study global warming are understandably panicked by the deterioration of the earth’s climate. Rising temperatures, increasing drought ironically contrasted with increased incidents of major floods, reduced agricultural output, and dying forests are all predicted as the damage spreads. In worst-case scenarios, billions of people could be at risk of a reduced quality of life, or much worse.

Many activists are desperate for action to eliminate fossil fuel use associated with carbon emissions. I share their frustration. Unfortunately, desperation does not breed good policy, and you cannot legislate physics.

An unfortunate attempt at such legislation occurred at the Aug. 28 City Council meeting, where advocates for clean energy won a commitment for 100 percent carbon-free electricity for Austin’s municipal utility by 2030 (assuming it is “affordable”). Currently Austin gets 23 percent of its energy from renewables.

As an advocate of clean energy for 37 years, it pains me to question this laudable goal, but without cost-effective energy storage, I do not see a way to technically achieve it.

Some people believe that Austin should retire or sell off its fossil assets and only buy renewable power. This scenario would have the Texas electric grid (ERCOT) sell Austin all the capacity to balance these intermittent power sources.

The problem with the theory is that Austinites may have to pay dearly for their idealism. Privately owned “merchant” plants can charge what the market will bear. Wealth would likely be sucked out of Austin, wealth that could go toward the purchase of clean energy equipment in homes and commercial buildings, among other things.

Also, the “affordability goal” for Austin Energy exempts fuel, so most renewable energy contracts will be loopholed since they are paid for in the fuel charge.

The essence of the carbon-free resolution came from a report issued by the council-appointed Generation Task Force. I invite anyone interested in Austin’s future to read this report. It is largely undocumented and has numerous flaws and contradictions.

  • In one place, the report advocates careful estimation of natural gas prices to ensure that a new gas generator is economic, while in another it advocates complete elimination of fossil fuel.
  • The report does not define if nuclear energy is carbon free.
  • The report has arbitrary or undocumented goals for increased energy efficiency, energy storage and solar energy.
  • Even if these arbitrary and undocumented goals are carried out, they are so small that they will not even compensate for the utility’s average growth rate, much less the fossil fuel we currently use.
  • Its section promoting more assistance to low-income customers is so flawed that it defines a household making over $95,000 per year as “working poor.”
  • The report’s obsession with solar energy from West Texas ignores the use of wind from the Texas coast, which is currently less expensive and generates considerable power during summer peak demand.

Fellow environmentalists have questioned why I would be so ardent opposing this supposedly benign resolution and in questioning the Task Force Report. It is because if clean energy supporters are to maintain credibility with the public, we need to explain the costs, benefits, and the current and future capabilities of the technologies as well as the environmental consequences of the current system.

For the next phase of Austin’s clean energy development, programs rather than arbitrary goals should be the norm. My own short list:

  • Create a storage “partnership” with other Texas utilities to develop various technologies while defraying some or most of the economic risk;
  • Create an “on-bill financing” program, similar to what has been done in four other states, to finance clean energy on customers’ electric bills instead of financing new power plants;
  • Since the current Generation Task Force is not inclined to continue to refine its report, appoint a sequel that will come up with a real energy plan for Austin’s future.

Robbins lives in Austin and has been an environmental activist for 37 years.

Government Accountability: Voter approval should be required for Austin debt

Robbins: Voter approval should be required for Austin debt

A July 20 American-Statesman editorial took issue with the Austin City Council for planning to issue bonds for buyouts of the homes of Onion Creek flood victims, since these bonds will be sold without voter approval. Upon reading the editorial, I wondered why the Statesman set its threshold for protest at such a low level. The Austin City Charter specifically states that all revenue bonds, including those that finance Austin’s electric and water utilities, be approved by the voters. Yet this Charter provision has been ignored for 16 years.

Article 7, Section 11 of the Austin City Charter clearly reads: “All revenue bonds issued by the city shall first be authorized by a majority of the qualified electors voting at an election held for such purpose.”

The tradition of utility bond approval by Austin voters goes back as far as 1890. However, this practice of voter approval began to be attacked for various reasons beginning in the 1980s.

In 1984, the City Council approved bonds without voter approval to finance the skyrocketing cost of the South Texas Nuclear Project. The council did this because the city was legally required to pay for cost overruns, and believed voters were so outraged by these overruns that they would not vote to keep up payments. The decision was taken to court, which ruled that the city had the right, but not the obligation, to sell bonds without voter approval. The public was so outraged by the episode that the City Council continued to seek voter approval for all other revenue bonds.

In the mid-1980s, several city purchases of buildings were financed with certificates of obligations, which are similar, though not identical, to revenue bonds. While technically complying with the charter, these transactions also raised hackles in the electorate.

Beginning in 2000, the city began purchasing large long-term supplies of renewable energy. These contracts were, in essence, virtual debt. However, they were not revenue bonds, so again, they were not precluded by the charter. Most of these transactions made good business sense and were good for the environment, but the expensive purchase of electricity from a biomass plant in East Texas is still controversial, and the complete terms of this contract have never been made public.

The last revenue bond election in Austin was held in 1998. There was no official reason given for their cessation after this. There were several contributing factors though.

1. A lot of bond money already had been authorized.

2. There was an economic recession in 2001, so growth-related expenditures were limited for a time.

3. The electric utility was over-collecting revenue to buy down debt so it did not need to borrow a lot of money.

4. Some public officials found it convenient to “forget” what was in the charter.

I began protesting their forgetfulness in 2006. The City Council-appointed Charter Revision Committee recommended in 2011 that this section be updated to mandate voter approval of projects costing more than $50 million. However, the City Council never placed the issue of voter approval on the 2012 Charter election ballot for voters to approve.

So here we are today, with a new water treatment plant exceeding a half-billion dollars in cost that will not be needed for a generation, a $2.3 billion biomass contract that continues to raise electric rates, and an acute affordability problem for the majority of Austinites. While voter approval of debt is not a panacea, it is part of a checks-and-balances system that needs to be resuscitated.

The new 10-1 City Council to be elected this fall could be a turning point to enlist more citizen participation in city government. I urge voters in the upcoming November election to ask candidates if we will be allowed to participate in our Charter-prescribed right to economic self-determination. Or will we continue to be ignored by a government that thinks it always knows best?

Water in the News: Austin needs to take measure to control water rates

Robbins: Austin needs to take measure to control water rates

BY PAUL ROBBINS – SPECIAL TO THE AMERICAN-STATESMAN, Posted: 12:00 a.m. Saturday, April 12, 2014

Austin’s cost of living is soaring, and one reason is its water costs. Water rates are falling into a dangerous pattern. It’s called a “death spiral.” Costs go up, inducing market pressure to drive consumption down, eliminating revenue needed to pay fixed costs. So rates go up again, causing consumers to cut back further, and the spiral gets steeper.

At the same time, the Central Texas region is afflicted with record drought, so consumption is heavily discouraged. Water rates will go higher to make up for even more lost revenue.

Austin’s water utility boasts that its conservation efforts have lowered consumption 17 percent per person between 2006 and 2013. This seems impressive until you consider water rates went up 70 percent in the same time period. In fact, between 2000 and 2014, water rates went up 123 percent and wastewater rates went up 130 percent. Inflation only rose 36 percent.

And brace yourselves. It has been announced that by 2019, water rates will need to be increased another 31 percent and wastewater rates another 15 percent. This is despite cutbacks planned for next year’s budget and recent hook-up fee increases for new buildings of almost 200 percent.

The planned increases may not stop here. Due to the drought, the utility is shopping for new water supplies. To give you an idea of the relative cost, groundwater sold by one potential supplier to an Austin suburb is 30 times the price Austinites pay for Colorado River water.

Why are costs so high?

  • The biggest reason is capital investment and debt, much of it coming from growth. About 52 percent of your water/wastewater bill is related to capital improvements. An example of this is the half-billion-dollar Water Treatment Plant No. 4, which began construction in 2010. Judging from the utility’s recent forecast, Austin will not need its capacity for 17 years. Because it is a wasted asset, it will literally cost more to turn on the plant than to leave off.
  • There were poor decisions regarding asset management. The “profit” from the land sale of the former Green Water Treatment Plant site was put back into enhancements for the site’s redevelopment instead of lowering water costs. Other property, such as the retired Govalle plant on Lady Bird Lake, sits almost unused.
  • The water utility is one of the largest energy users in Austin, consuming enough electricity to power 17,000 homes. Yet it has no energy conservation plan and is buying wind power at 39 percent more than it cost the electric utility to purchase.
  • The utility’s profit, the transfer to the General Fund, has more than doubled since 2000, while water consumption is roughly the same.

Until the debt works its way out of water rates over time, Austin may not be able to do much to lower them. But through fiscal discipline and real conservation efforts, it can mitigate future increases.

There are a host of small cost-saving measures that can add up. These include: reducing General Fund transfers; postponing the operation of the new treatment plant until it is needed; buying and conserving electricity at an affordable cost; selling unneeded assets and using the profits to buy down debt; using leak-resistant polyethylene pipe; using “smart” utility meters to reduce labor costs and water loss.

There are several strategies that need to be implemented instead of purchasing new supplies. One of the most basic is to fully implement the water conservation plan approved by the City Council in 2007. This would be greatly enhanced if the conservation program was moved out of the debt-strapped utility, which has a conflict of interest saving water.

In addition, Austin has a reclaimed water system that is barely used, as well as access to Barton Springs flows into the Colorado River that might be routed to a treatment plant.

Austin would be foolish to ignore the affordability of its water any longer. Wall Street has a word for cities that have reached the height of fiscal hubris: Detroit.

Robbins is an environmental activist, consumer advocate, and author of “Hard to Swallow,” a report on Austin’s high water costs.

Water in the News: Robbins: Dry lakes demand conservation

Robbins: Dry lakes demand conservation

Austin Statesman, September 17, 2013

 The question on a lot of people’s minds right now is, “How low can they go?”

Lakes Travis and Buchanan, which supply much of our region’s water, are not natural lakes. They are reservoirs completed in the 1930s and ’40s. At full capacity, they hold 2 million acre-feet. (An acre-foot is enoughwater for annual needs of about three average Austin homes.)

Today, barring a major rainstorm, they are about to fall to their lowest levels since they were created. In September 1952, the lakes reached 621,000 acre-feet. On Sept. 10, they were at 659,000 acre-feet and dropping by about 1,400 acre-feet per day. Those worried about the water supply are in the perverse position of “praying for hurricanes.”

People living near the lakes, as well as cities facing water shortfalls, have become resentful of the rice farmers in the Colorado River’s lower basin area. It must be remembered that these farms have been cut off from their water supply for the past two years, the first time this has happened in the history of the lakes. It should also be remembered that federal funding for the lakes partially relied on the congressional support of the agrarian region downstream.

And while there is considerably more wealth per gallon generated by cities and industries compared to farms, this wealth will not be especially meaningful without food. In 2011, farmers paid about $28 per acre-foot for raw water to grow enough rice to feed about 1.2 million people annually on a calorie basis. Meanwhile, Austinites were willing to pay $1,600 per acre-foot for treated water to grow their “crop” of grass.

Believe it or not, it can get worse. If you total current use from Austin and other cities, future water contracts to provide for Austin’s growth, industrial use, evaporation from the lakes, and agricultural use, and apply it to current lake levels and drought conditions, the Highland Lakes would be below zero.

It is time to start planning in earnest for the future. There are no longer enough resources to provide for insatiable thirst of all who come here. We will either face huge increases in cost or need to create a water-efficient economy. Conservation of both water and money are key.

Five of the most promising strategies need center attention.

• Full implementation of 2007 conservation plan: In 2007, Austin created an aggressive conservation plan with 19 strategies to save water. Today, many of these ideas are still not implemented or have their effectiveness compromised. Some, such as mandatory plumbing fixtures retrofits, have stalled because they are controversial. Others, such as mandatory irrigation audits, have no method to measure effectiveness.

•Reclaimed water: The use of highly-treated wastewater for non-potable purposes such as irrigation and cooling towers has been employed to great effect in other cities. Austin has invested more than $50 million in its own “purple pipe” system. This has the potential to defray as much as 50 million gallons per day of peak capacity, the same as will be provided by the controversial Water Treatment Plant No. 4. However, Austin’s overly strict hook-up policies, lack of marketing staff, and lack of customer-side financing are constricting the use of this new system.

•Polyethylene utility pipe: Austin is using polyvinyl chloride water pipe as its material of choice. This is extremely toxic to manufacture and is more prone to leaks than polyethylene pipe, which is almost leak-proof and sometimes cheaper to install. Austin needs to replace more than 700 miles of old cast iron pipe that is at the end of its life, and it should be using the best materials.

•No new water projects: When Water Treatment Plant No. 4 comes online, this half-billion-dollar facility will raise Austin’s peak capacity to 335 million gallons per day. This past August, the city barely used half of this amount. This unneeded expenditure, and others like it, directly compete with water conservation funding.

•Relocate water conservation programs: Austin’s water conservation programs are administered by a utility whose main mission is to sell water. This is a blatant conflict of interest. The water conservation programs should be moved to a separate agency unshackled to the water utility.

Conservation is the best option we have right now, and the least expensive. It is past time to make the hard decisions necessary to make it work to its full potential.

Praying for hurricanes is not a drought-management policy.

Robbins is the editor of the Austin Environmental Directory. The new edition is online at

Environmental Directory: Best of Austin 2013


Environmental Directory

Everyone who’s serious about protecting our environment should own a (free) downloadable or print copy of The Austin Environmental Directory. Call us biased, but the 2013 edition is one of the best directories that activist Paul Robbins has published since starting this exhaustive endeavor in 1995. Appropriately, water is the theme of this year’s guide, which also includes updated info on clean energy programs, energy-efficient lighting, recycling, an expanded list of local enviro groups, and so much more. Think you know everything already? You’re guaranteed to learn something new.

Austin Environmental Directory

Water in the News: The Irony of Conservation

Then There’s This: The Irony of Conservation

Austin’s water-saving habits will delay need for WTP4

By Amy Smith, Austin Chronicle, Fri., Dec. 21, 2012

This is how Lake Travis looked on Nov. 9. It looks the same today.

This is how Lake Travis looked on Nov. 9. It looks the same today.
Photo courtesy of The LCRA

“I just need to point out environmentalists were right and you were wrong,” said Spelman, referring to the emotionally charged series of debates leading up to the 2009 Council vote on the plant. “Because,” he continued after pausing a beat, “you have done such a wonderful job with conservation … and if you want to say you’re happy you’re wrong … this would be a lovely time to say so.”

The back-and-forth over WTP4 sidetracked what was supposed to be one of the high points of the Council briefing: Mes­zaros was joined at the podium by Resource Manage­ment Commission Chair Leo Diel­mann, who was on hand to endorse the conservation program’s progress and report on improved relations between utility staff and the Council-appointed RMC. A year ago, the two sides had all but stopped speaking to one another due to their disagreements over how well, or how poorly, the program was working. RMC members complained to Council about what they believed was a lackluster conservation effort and the utility’s apparent reluctance to share information. In response, Council members prodded the utility to start working more collaboratively with the commission. “We came to y’all 18 months ago very critical of the water conservation program and of the water utility,” Diel­mann told the Council. “What we didn’t realize 18 months ago is that the water utility has made very good progress toward these goals.”

But all of this cheerfulness was enough to make water watchdog Paul Robbins gag. He said he felt like a “caged rottweiler” during the briefing, which he said was set up on the agenda in a way that did not allow for public comments. The utility, he says, is still underachieving in many areas – water-saving landscape incentives, irrigation audits, and rebates for rainwater harvesting equipment and water-efficient toilets. He said he outlined these and other shortcomings in an update to his 2011 report, “Read It and Leak,” which he provided to the RMC in November.