there were many factors that went into creating the energy disaster with which Texans are now dealing. But at least in one respect, the problems in Texas are a product of an approach to the energy business that Lone Star State companies like Enron pursued at the end of the 20th century.wapo
Ken Lay was George Bush’s best friend, back when George Bush was governor of Texas. That was what Ken Lay would tell you, if he was still alive today. The story is more slanted now that Ken Lay has been convicted of felony crimes and his flagship business, Enron, went bankrupt and took $40 billion dollars and the fortunes of thousands with it. Also, Ken Lay is conveniently dead of natural causes, so it is easy to blame him for all of the greed that was behind the drive to deregulate the energy sector in the United States.
It is because of Ken Lay’s friendship with Governor and then President Bush that the Texas and California electrical grids ended up being the mess that they are today. It’s just taken longer for Texas’ grid to fall apart than it did California’s, which has been on the ropes since Enron arranged for it to start suffering rolling blackouts back at the turn of the century.
I watched/read The Smartest Guys in the Room when the movie/book came out back in 2005. The story itself was just another nail in the coffin of my belief in market solutions, the death of my libertarian delusions. Every time that the fraudsters finally convince someone in authority to deregulate, it doesn’t take long to prove that government regulation had been there for a very good reason after all. Enron bought energy companies and then created energy markets for their power to be sold on. That was what those regulations stood in the way of, huge profits on Wall Street.
One of the last acts of desperation in the failing business that Enron became after its meteoric rise on the stock market was to turn off power generation in California’s electrical market in order to drive up the price of electricity and put money in the pockets of Enron executives and traders. Enron created rolling blackouts on purpose in order to profit from the suffering of California citizens. One of the last acts of desperation of the Texas Public Utility Commision during the recent winter storm was to set the price of electricity high enough on the Texas market to inspire power generators to turn on their excess capacity and flood the Texas power grid in their time of need. It’s just too bad that there wasn’t any capacity to be had because the power generators hadn’t bothered to insure against freezing by weatherizing their supply systems. Just too bad that electric energy generators and their investors were more interested in profiting off of the suffering of Texas citizens than they were in spending money weatherizing against winter storms that they hoped would never show up, but still manage to show up about every ten years anyway.
Shares of Macquarie rose 3.4% in Sydney on Monday after the company raised its profit outlook. They are now down 2.8% over the past 12 months.
One customer told the Dallas Morning News that his electric bill for five days stood at $5,000, the amount he would normally pay for several years of power. Another told the Dallas-Fort Worth NBC affiliate that he had been charged more than $16,000 for February.wsj.com
It is also too bad that Texas’ hostility to federal regulation caused it to seek an isolated grid through ERCOT, which meant that most of Texas went without power when it’s isolated grid went down and no one could send it power to keep it afloat. Unless you were lucky and lived around El Paso, which (along with Amarillo and the panhandle) are not under ERCOT and consequently only saw minor interruptions in service.
This is what happens when you make the essentials for survival into profit-driven commodities; commodities that no one can understand how to profit from unless they are scarce enough to drive demand over available supply. When there is more demand than there is supply of the essentials some people won’t survive. The death toll across Texas due to the winter storm and resulting power outages is still unknown but is likely to be well over 100 people, and a bank in Australia made 200 million off of those deaths.
Texas is misnamed. Texas (tejas) supposedly means friend or ally. Nothing could be further from the truth than seeing Texas as your friend or ally. That is the ploy of the confidence man, the demand to trust him even though he seems to be oilier than all get out. The Texas mascot should be the irresponsible teen who wants to shirk all the day long because he can. It should be the grasshopper that whiles the summer away instead of storing food for the winter. Like the grasshopper and the irresponsible teen, Texas is always unprepared for adversity because of these infantile behavior patterns. Texas is a great place to be young and healthy, because there are no worries about tomorrow here, and no requirement to save anything for that day of need. Texas is a horrible place to be old or sick in because there is no place to go when you reach your hour of need. No allowance for the slackers that we pretend to be fond of, but throw out in the cold the minute that things get tough.
The true beneficiary of Texas largesse is the corporate raider, the false priest, the con artist. Texas is made for thieves. Personal and corporate greed are rewarded here, rewarded more highly than any human virtue. Just look at Ken Lay. He understood what Texas was for. He rode that pony hard and put it up wet counting on not being there when the tax man came for his cut. He died a millionaire, of the diseases of old age he could have avoided if he had straightened up and flown right. Why bother? No one gets out of this life alive.
The Enron legacy is ERCOT and every other Texas boondoggle ever hatched. Every scheme that amounted to nothing more than stealing from public coffers and crafting a golden parachute for yourself. If we had those billions that Enron stole from us, that the deregulation scheme stole from us, we wouldn’t need to go without water or power, the average Austinite wouldn’t have to be out there hand-delivering necessities to people on the verge of death during a pandemic. This lunacy has to stop. The question is, will we pay attention long enough to make it stop?
Featured image from twitter.com/austinenergy