Public Utility Commission: Moving towards better budget performance measures

Last week, the Sunset Advisory Commission voted on a series of recommendations to improve the Public Utility Commission of Texas. For the uninitiated, the PUC oversees Texas’ electric, water and telecommunications utilities. In the wake of Winter Storm Uri’s devastation in February 2021, the Legislature adopted multiple reforms relating to PUC’s oversight, including the top-down review of the agency by the Sunset Commission.

The Sunset Commission’s staff report pointed towards the need for more agency staff and appropriated resources in order for the PUC to keep pace with its growing regulatory – and critically important – workload. While the agency’s jurisdiction expanded over the past decade, the Sunset report found that the PUC’s staff capacity was challenged to keep pace with those increasingly sophisticated oversight responsibilities.

Given these challenges, the report recommended that the Sunset Commission support several of the PUC’s budget requests to enhance and augment the agency’s staff capacity for its oversight of Texas’ water and electricity industries. In a letter to the Sunset Commission, Texas 2036 supported these specific recommendations. Additionally, Texas 2036 suggested that each recommendation include a corresponding performance measure in the state budget to assess and track the PUC’s efforts in utilizing these appropriations should they be approved by the 88th Legislature

The underlying philosophy behind Texas 2036’s performance measure recommendation was that if the Sunset Commission were to support specific appropriations requests for the agency, then the state budget should include metrics to evaluate how well the PUC uses those dollars. In other words, if the Legislature is asked to pay for something new, taxpayers and budget writers deserve to see – and measure – the value they get in return. This is why good performance measures are so important.

Thanks to the leadership of Senator Drew Springer, two modifications were made to the Sunset report recommendations supportive of the PUC’s budget requests for greater staff capacity. In particular, Senator Springer’s modification directed that the PUC work with the Legislative Budget Board and Sunset staff to update the budget performance measures used to track the agency’s achievement in using the funds appropriated for the agency’s budget requests for water and electric industry oversight. If approved in the final version of the budget, these performance measures will allow state budget writers and taxpayers to gauge how these appropriations improve the PUC’s effectiveness and efficiency in regulating Texas’ electric and water utilities.  

This was not the first time the Sunset Commission voted in favor of better budget performance measures. Earlier in 2022 the Commission adopted a recommendation by Representative Justin Holland directing that the Texas Water Development Board update the agency’s performance measures to assess the agency’s processing of applications for financial assistance.

These recommended changes to the state budget by Senator Springer and Representative Holland are essential for the meaningful measurement of agencies’ performance and efficiency during the budget writing process. Just as performance measures provide budget writers with longitudinal data for tracking state agencies’ efforts, they also serve as business-like metrics for assessing the return on investment of spending taxpayers’ dollars

Read more by Jeremy Mazur regarding the Public Utility Commission’s budget.