Advertisement
This is member-exclusive content
icon/ui/info filled

newsWatchdog

Texans, you are paying for the 2021 ice storm this summer. It didn’t have to be that way

The Texas Supreme Court could have undone the corruption following the 2021 ice storm. It didn’t.

Once upon a time, the lights went out across Texas.

The year was 2021, and there was wind and ice and sub-freezing temperatures for days.

Life seemed to stop in the cold and dark. At least 200 people died. It was a devastating calamity for the so-called energy capital of America.

Advertisement
Watchdog Alert

Are you a taxpayer in Texas? The Watchdog has your back.

Or with:

The people who ran the Texas electric grid had, during those dark days, charged the highest prices possible during the crisis.

There was a quick investigation in the Texas Legislature, which is supposed to make laws to protect us.

Advertisement

This time, however, the laws seemed to promote the companies that lost millions of dollars when they were forced to overpay at the highest prices.

State lawmakers hatched a plan to borrow billions of dollars to repay hurting gas and electric companies so their losses wouldn’t be so big. Or even worse, companies could go bankrupt.

Advertisement

They gave their plan a big name – securitization – which is a fancy way to say we’re going to sell bonds worth billions of dollars and then offer the money to some electricity and gas companies who could then pass on the debt to their customers. Some of these bonds were long-term with original debt repayments scheduled for as far off as the year 2049.

The rest of us had no choice or decision-making power even though it was our future payments that were promised as support for the borrowing of what originally was $6 billion in electricity and gas bonds.

The missing P

There was one more hand to play.

A group of electricity companies joined to sue the (p)ublic Utility Commission and force it to support a rollback of fairer pricing. They called it a “repricing.”

I refer to the Public Utility Commission as (p)UC because several years ago, I took the ‘P’ away, symbolically, because I didn’t believe the (p)UC cared about the public. Us.

Led by Luminant, the companies sued the (p)UC. They wanted their money back. They know they overpaid during the days of darkness.

Advertisement

The lawsuit was a blockbuster. It had the potential to shake up energy financing across the state. It could mean that the more than $2 billion in electricity-related bonds (not including gas bonds) would be paid off now and not in 20 or 30 years.

Texas has billions of dollars in surplus funds. There’s no reason they had to borrow and make us pay. The (p)UC, led by lawmakers, took this route.

I hold this up as proof that the (p)UC doesn’t deserve its ‘P’ back yet, maybe ever.

Advertisement

Ed Hirs, who teaches energy-related classes at the University of Houston, can help me explain. He says, the PUC “went out and made sure consumers paid. Their purpose is to protect the consumers in the state. Nowhere in America has a public utility commission taken such a position. Texas made sure their consumers were charged billions of dollars. Whose side are they on?”

What free market?

Texas is proud of its “free market” economy. To me that means a deregulated marketplace, and one in which laws and regulations that supposedly hurt companies are minimal or, worse, on the books but unenforced.

Advertisement

In a free market, you are supposed to thrive or die. The government doesn’t bail out failing companies in a free market.

This time, they did.

Off script

This was all supposed to go away, let time move on. But then those pesky electricity companies sued. Luminant said it lost a billion dollars.

Advertisement

If they won, fairness would have been injected into the corporate bailout. But few gave them a chance. A winning decision for the electric companies would have caused more chaos, but at least fairness would be coming.

Then came the shocker in this story.

Two appeals court judges who heard the case ruled in favor of Luminant. In a big blow to the (p)UC, the judges said the (p)UC exceeded its authority.

Who saw that coming?

Advertisement

But before the money in this giant poker game could be pushed into the middle of the table, the (p)UC would have to win its appeal at the Texas Supreme Court. Otherwise, companies that received bail-out money could be forced to return the bond money. Storm-related add-on charges could disappear from your bill, too.

Final decision

The Texas high court could have cleaned up this mess. Instead, not only did the all-Republican court rule unanimously in favor of the (p)UC, it gave the agency more power than ever.

Last month’s court opinion, written by Chief Justice Nathan Hecht, ruled against the companies on more of a technicality – how the (p)UC handled emergency rule making.

Advertisement

Sadly, for consumers this story has no happy ending. Everyone can see what happened here.

As Chico Marx once famously asked, “Who are you going to believe, me or your own eyes?”

Final note: The Watchdog contacted Luminant and the (p)UC for this story but I didn’t hear back.

Related Stories
View More