Deregulation in Texas
The Wall Street Journal reports that electricity bills in Texas were $28 billion higher due to deregulation. So in addition to not winterizing their facilities, charging astronomical prices to some customers during the shut down, and leaving millions with no water or power during severe winter weather, the utilities charged their customers higher prices than in regulated markets. It seems to me that this is simply poor regulation at fault; for example ERCOT and the state PUC (Public Utilities Commission) could have easily required all the energy operators to winterize their facilities but did not. Likewise, they could have banned the types of price hikes and shoddy policies that ended up with residential customers being charged $8000 a day for their electricity, but they did not. So one should ask, what’s up with ERCOT and the PUC.
It appears that the ERCOT (operator of the state energy grid) Board Members were lavishly compensated for their time; about a third lived out of state, and they, the PUC, and the state’s oil and gas industry were all exceedingly generous contributors to Governor Abbot’s political campaigns. https://www.ksat.com/news/defenders/2021/02/24/political-contributions-link-ercot-board-to-abbott-and-the-state-committee-now-investigating-the-troubled-entity/ Responsibility for this debacle ultimately falls on the Governor, but one has to ask as well “what were these experienced grid operators and utility executives thinking?”
Living in California, we can’t throw stones as we have been through energy deregulation and seen energy companies use it to gouge their customers, and we have been through grid overloads due to excessive heatwaves and loss of power due to lightning, high winds and firestorms which disabled our energy lines and left millions of customers in the dark and facing the fire threats to their homes and lives.
Lives were lost due to California and Texas’ poor regulation of these utilities; lives were lost because utility executives did not prioritize the safety of their customers. Lives were lost because state policy makers failed to address the readily foreseeable. Lives were lost even though there was a history of failure of the utilities to perform basic maintenance services. Yes, it costs money to winterize; yes it costs money to do routine maintenance; yes it costs money to trim trees and brush. And no, we cannot all hop on a plane to Mexico whenever it gets cold or dine out at the French Laundry, but you signed on to provide basic care and essential services for the state’s residents or your customers.