A Reckoning for Texas

Electric utilities come in in numerous forms. Some are cooperatives or municipals devoted to serving the interests of their members. Others are investor-owned entities that are unabashedly focused on the pursuit of profit. Texas has some of both, but the Lonestar State stands out for its decision to operate a statewide power grid cut off from all other states. This move is now causing massive hardship amid the polar vortex.

Hare-brained energy market approaches have been around for some time in Texas. Houston was the headquarters of Enron, which made use of federal deregulation to promote aggressive energy trading schemes that turned out to thoroughly fraudulent. It was only a few months after Enron declared bankruptcy that the Texas legislature adopted a statewide electricity market deregulation scheme.

Since then, the old-line utilities have been broken up, bought and sold like so many Monopoly properties. For instance, Dallas Power & Light morphed into TXU Electric Delivery, which in turn became Oncor Electric Delivery. Oncor was then taken over by California-based Sempra Energy.

Houston Lighting and Power was split up into several companies, including CenterPoint Energy. When the storm hit, CenterPoint was focused on a complicated financial deal involving its subsidiary Enable Midstream Partners.

Amid this wheeling and dealing, Texas utilities seemed to have forgotten about their most important responsibility: serving their customers. They created the now ridiculously named Electric Reliability Council of Texas to coordinate their efforts, but neither that non-profit nor the individual companies thought to prepare for the kind of extreme weather situation that is now crippling the state.

There have been signs that Texas climate was becoming erratic. In 2018 hailstones the size of tennis balls caused $1 billion in damages in North Texas. Houston had its earliest snow ever. Bloomberg is reporting that ERCOT was warned a decade ago that Texas utility facilities needed to be winterized to assure service during colder weather.

ERCOT deserves no sympathy, but it is absurd for politicians like Gov. Greg Abbott to put all the blame on the non-profit when he has long been a climate change denier, a deregulation proponent and a renewable energy basher.

The current disaster should serve as a wake-up call to Texas politicians as well as Texas utilities that they should focus less on ideological posturing and financial maneuvers and pay more attention to the needs of the residents of the state.