Create a State Agency Utility Service Working Group

The Legislature should establish a state utility service working group to assist and advise all state agencies on utility purchases.


Background
The state spends approximately $300 million annually on telephone, electric, gas and water utility services. All state agencies are involved in the appropriation, procurement, use and payment of utility services. 1

Some state agencies have more responsibility in the area of utility services. For example, both the Department of Information Resources (DIR) and the General Services Commission (GSC) are involved in the acquisition of the telecommunications services used by state agencies. GSC buys electricity and gas service for the capitol complex, and the General Land Office (GLO) is involved with the procurement and use of state-owned gas. The Consumer Protection Division of the Attorney General s office intervenes on behalf of the state in telephone and utility cases before the Public Utility Commission (PUC) of Texas and the Railroad Commission (RRC) of Texas. The Comptroller s office prepares an annual Utilities Report, which is used to control the state s utility expenditures.

State agencies benefit by sharing ideas and information on utility matters. GSC, DIR and other agencies that purchase telephone services meet to discuss telecommunications issues. The Governor s Off ice of Energy Management has an advisory committee, which addresses the state s purchase and use of gas and electricity and has discussed excessive gas transportation rates, which impede a state agency s ability to purchase state-owned gas.

Agencies also benefit by working together on utility issues. In rate cases, the Consumer Protection Division of the Attorney General s Office recommends modifying existing utility tariffs to better serve state agency customers. Examples of suggested tariff changes, whi ch would save the state money, include cost-based street lighting rates, which affects more than 10,000 state lighting accounts, and economic development riders to tariffs for new Texas Department of Criminal Justice facilities, which should lower the init ial cost of those projects. GSC, through the Consumer Protection Division of the Attorney General s office, intervenes in proceedings at PUC to ensure more economic use of the state telecommunications network. GLO negotiates and approves state-owned gas contracts. The Legislative Budget Board (LBB), the Governor s office and the Comptroller estimate and track utility appropriations. Because of rate increases especially for electricity the appropriation estimate does not accurately reflect the true cost of an agency s electricity usage during the next fiscal year.


Recommendations
A. Effective September 1, 1993, the Legislature should establish through an appropriation rider the State Agency Utility Service Working Group to assist, inform and advise all stat e agencies on the appropriation, procurement, use and payment of telephone, electric, gas and water utility services.

The working group should include the regulating authorities (PUC and RRC), the budgeting and tracking authorities (LBB, Governor s office, Comptroller s office, DIR, Attorney General s office), the 15 largest state agencies and any other agency wanting to participate. The group would work cooperatively using existing staff. A new agency would not be created, and new staffing would not be necessary.

B. The General Services Commission (GSC) should be the agency responsible for organizing and supporting this working group.

Establishing the State Agency Utility Service Working Group would not reduce or modify the authority of any state agency regarding telephone, electric, gas and water utility services. Rather the working group would enable state agencies to better coordina te and address existing problems common to the appropriation, procurement, use and payment of utility services.


Implications
The State Agency Utility Services Working Group would reduce duplication of efforts by state agencies and increase efficiency and cooperation. The State Agency Utility Services Working Group could handle specific tasks relating to appropriation, procuremen t, use and payment of utility services that no one agency alone has the authority or expertise to fully address. The working group would help relieve various internal and external political pressures on agencies dealing with utility matters and re duce friction between agencies because of overlapping authority.


Fiscal Impact
State agencies are currently meeting informally on utility matters in various separate advisory groups and on a case-by-case basis to address utility problems. Formalizing those groups and meetings under one working group that can establish subcommittees w ould have no additional fiscal implications. Any savings would depend on the actions of the advisory council and the directions given by the Texas Legislature and cannot reasonably be estimated at this time.



Endnotes
1 Comptroller of Public Accounts, State of Texas Fiscal Year 1991 Utilities Report, at p. II-1 indicates total spending from utility appropriations amounted to $231 million during fiscal year 1991. The $231 million does not take into account spending from local funds or third-party contracts where state agencies pay utility expenses of entities as part of some other service.