When Enron's Top Execs Went To Prison They Left Texas Consumers A Poison Pill: Energy Deregulation

Yesterday, HuffPo's Roque Planas reported that Texas Republicans were too busy fighting deranged ideological battles against imaginary enemies to bother securing their state's power lines. He noted that the state's all-powerful lunatic fringe neo-fascist Lt Governor, Dan Patrick-- who, like Ted Cruz, fled the state to escape the power disaster-- "announced a new legislative priority: All publicly funded events in the state would have to play the national anthem." This was just days before Republican energy policy teamed up with a winter storm to cripple the state. "Over the last week," wrote Planas, "as state leaders like Patrick and Gov. Greg Abbott (R) called for investigations into the lapses behind the catastrophic failures that left millions without power, the Star-Spangled Banner Protection Act probably seemed a little less urgent, even to Patrick. But his inane choice of priorities wasn’t unusual. And it helps to understand how things went so wrong in Texas in the first place. The problem is simple: In a sunny state that rarely sees prolonged freezes, power companies didn’t invest much in precautions to deal with extremely cold weather or to fortify the system’s reserve capacity. Texas lawmakers did equally little to either incentivize or require the utilities to prepare for uncommon catastrophes like the one that hit the state last week."

Republicans, who have controlled every statewide office and both houses of the legislature since 2003, have prioritized social battles like Patrick’s national anthem crusade. In their zeal, they’ve often neglected ho-hum tasks like winterizing the energy grid, against the advice they themselves commissioned. That lack of interest is the backdrop against which some 4 million Texans lost power at the height of the crisis, while many more were left without drinkable water and dozens died.
...“Texas has been in the hands of people who don’t believe in government in the first place,” former San Antonio Mayor Julián Castro (D) said at a press conference last Friday. “It’s a crisis of leadership that has real consequences for families across the state.”

Around dawn this morning, that bastion of conservatism, the Wall Street Journal, ran a report by Tom McGinty and Scott Patterson that absolutely shreds Republican energy policy. The GOP tried energy deregulation in Texas and hoped to expand it into the rest of America. It has been a miserable failure-- and long before the current catastrophe. "Texas’s deregulated electricity market," they wrote, "which was supposed to provide reliable power at a lower price, left millions in the dark last week. For two decades, its customers have paid more for electricity than state residents who are served by traditional utilities... Nearly 20 years ago, Texas shifted from using full-service regulated utilities to generate power and deliver it to consumers. The state deregulated power generation, creating the system that failed last week. And it required nearly 60% of consumers to buy their electricity from one of many retail power companies, rather than a local utility. Those deregulated Texas residential consumers paid $28 billion more for their power since 2004 than they would have paid at the rates charged to the customers of the state’s traditional utilities."

Now, according to their report retail electric companies are hitting consumers with steep bills. "Power prices surged to the market price cap of $9,000 a megawatt hour for several days during the crisis, a feature of the state’s system designed to incentivize power plants to supply more juice. Some consumers who chose variable rate power plans from retail power companies are seeing the big bills. None of this was supposed to happen under deregulation. Backers of competition in the electricity-supply business promised it would lower prices for consumers who could shop around for the best deals, just as they do for cellphone service. The system would be an improvement over monopoly utilities, which have little incentive to innovate and provide better service to customers, supporters of deregulation said."

The cheerleaders from the private energy companies-- primarily the predators and criminals who ran Enron-- and the Republican whores they bought in state government, said everyone would benefit. The companies did and the conservative politicians they pay off did. But consumers did not. "From 2004 through 2019," they wrote, "the annual rate for electricity from Texas’s traditional utilities was 8% lower, on average, than the nationwide average rate, while the rates of retail providers averaged 13% higher than the nationwide rate." That 13% explains the $28 billion, which is far from chump change. It went into the pockets of company management, for and foremost, and also to shareholders and, off course, into the campaigns-- legalistic bribes-- to the conservative politicians who make the world go round for them.