Houston Chronicle editorial: “Deregulation is hurting Texas competitiveness”
Another year has passed, but it’s the same old story for electricity customers across Texas.
Light bills in areas such as Austin and San Antonio, where service continues to be regulated, are lower. In deregulated areas (that’s most of us, Houstonians), they’re higher.
How much higher? We’re not talking a difference that can be measured in pennies. According to the consumer group Texas Coalition for Affordable Power, ratepayers in deregulated areas have coughed up $22 billion more than those in regulated service areas over the past decade.
The Texas Legislature approved electric dereg in 1999, at the high pitch of Enron Fever, when the “smartest guys in the room” were pitching our representatives in Austin hard and fast. Fourteen years later, it’s plain as the light bulb on Reddy Kilowatt’s glowing nose that it’s not doing the intended, and likely never will.
A year ago, on the eve of the opening of the 83rd session of the Texas Legislature, we called on state lawmakers to undo deregulation. Nothing happened.
Once more, with feeling, we say: Re-regulate electricity!
We urge lawmakers to think of the need to take action in two ways: 1) as a pure and simple competitiveness issue that harms large parts of the Texas economy; and 2) as an overdue fix for a situation that was wrongly foisted on Texans by the likes of Ken Lay and Jeff Skilling before their house of cards at Enron tumbled in the early 2000s.
In hindsight, it is clear that deregulation was never about getting the best deals for Texas consumers. It was about bigger salaries for CEOs and bigger returns for shareholders. It was about creating a middleman in a system that never needed one, by gaining access to expensive electric power infrastructure to sell electricity without having to pay for building it.
In short, it was the classic instance of going “asset light,” as Enron’s Skilling memorably said about his company’s go-go approach. We know how that turned out.
Now we see that Austin and San Antonio made the right call by staying with conventional, well-regulated public utilities.
Alas, the rest of us got stung. It’s high time to change that.
The Legislature may not come back into session until January 2015, but this is the perfect time for consumers to press the case with those who seek to represent them in Austin. Party primaries are scheduled for March 4. Candidates’ positions on electricity deregulation ought to be high on the list of voters’ questions.
The full impact of the added costs brought by years of deregulation has been mitigated to a noticeable degree by lowering natural gas prices brought by the shale boom across the state. If anything, that happy circumstance should make the matter of dereg even more urgent. With our natural gas resources, this state has a competitive advantage that should not be impeded in any way. Deregulation is hurting Texas competitiveness.
Surely, that’s a situation that deserves our elected state officials’ attention.