Let’s talk about what isn’t horrible about California.
One thing that comes to mind despite how the legislature looks the other way, the state Public Utilities Commission is more lapdog than watchdog, and the governor is as tough as they don’t come in regards to PG&E’s horrendous track record of killing customers and burning down their homes is the fact California has never given PG&E and their somewhat more restrained for-profit cousin profiteers their deep and darkest wishes.
The same isn’t true of “business friendly” Texas where the housing is more affordable and the for-profit utilities these past two weeks made PG&E seem as if they are giving away electricity.
Reports are surfacing how the Wild West approach Texas has taken to its retail power markets is paying big dividends for the PG&Es of the Lone Star State while costing folks like 33-year DeAndre Upshaw. The Dallas apartment dweller for the privilege of having his service interrupted repeatedly during the past few weeks, saw his electric bill top $6,700. Normally his winter bill is $80 a month.
That’s cheap compared to 63-year-old Army veteran Scott Willoughby. His power bill was 70 times higher as it hit $16,702. The Social Security recipient drained his savings to pay the power bill.
Texas has what PG&E wanted which is 100 percent deregulated wholesale electricity markets in 1999 but had to settle for what the California Legislature gave them — partial deregulation.
Remember Gov. Gray Davis’ political Alamo — the one he didn’t set the stage for and the one that led to his being the only governor successfully recalled so far in the 170-year history of California?
That was the 2001 market manipulation by the company PG&E praised at the time as the wave of the future —Enron. Remember Enron? There were a pure “Texas business friendly enterprise” if there ever was one. Based in Houston, Enron manipulated wholesale prices by exacerbating spot wholesale market shortages to spike up power costs.
Because PG&E et al were only able to convince their pals at the time in the legislature to deregulate the wholesale market and not the retail market the pain inflicted on residential and business customers wasn’t as severe.
It did, however, send wholesale prices sky high especially when power use was at its peak. Ultimately it forced PG&E into their first bankruptcy — a fete that has become an every 15-year or so event for the San Francisco-based power company.
Between rolling brownouts — PG&E coined the term as it was less ominous sounding than calling them what they were which was deliberate blackouts — and higher rates needed to pull the utility out of bankruptcy, Californians took hits financially.
To understand how Texas is friendly for only businesses that politicians give the ability to siphon money from consumers, you need to look at a $200 PG&E bill for electricity. Of that $106 is for transmission and distribution of power. The cost of the actual electricity used is $86.27. Another $9 or so in charges is the electric public purposes programs — essentially to subsidize low-income ratepayers. The remaining $6 plus is for things such as the wildfire fund charge, nuclear decommissioning and 22 cents to pay the cities such as Manteca, Lathrop, and Tracy a franchise tax charge for PG&E to have exclusive rights to distribute retail power within their jurisdictions.
In PG&E’s case, the only way they can generate more profits beyond the 10.5 percent guaranteed profit the California Public Utilities Commission allows is for non-capped costs to go higher. That means the more electricity you consume, the more profit PG&E is assured.
Now imagine what would happen if PG&E wasn’t regulated at all by the CPUC. That means they could pass on the spot market value of electricity automatically to customers.
The only reason the power bills of Texas residents such as Upshaw or Willoughby weren’t even higher was because the Texas PUC issued an emergency order to cap the per kilowatt hour power charge at $9.
You read that right. The Lone Star agency charged with protecting the interests of consumers raised the cap limits to its preordained maximum of $9 per kilowatt hour in the middle of a natural disaster imperiling the health, safety, and lives of millions.
The maximum per kilowatt hour that PG&E can charge is 38 cents per kilowatt hour for power usage that reaches the third tier.
Who needs to worry about being prosecuted for price gouging during a natural disaster when the state government is your partner in crime?
If California’s PUC allowed the cap in electrical rate charges to reach $1 per kilowatt or a ninth of what Texas did, your PG&E bill would triple.
PG&E, by its own projections, is on target to pile up $2.4 billion in annual profits in 2024. Imagine how PG&E would obscenely proposer with Texas-style regulation.
There are also other little nuances about Texas that may make you think tempering your slamming of California somewhat.
Up until a few years ago zoning was non-existent in Texas. That means everything from a 7-Eleven to a Tesla assembly plant could go next to your home if the authorities could be persuaded to allow it.
And while there is a lot of overreach in the California Environmental Quality Act, the Lone Star State basically lets developers have their way. This results in lower housing costs in the short run and probably in the long-haul as well but at what cost?
Longtime residents in places such as Austin are already complaining loudly about being displaced and priced out of neighborhoods.
Austin might be a lower priced version of San Jose but when it gets to critical mass Austin is less likely to be Austin or a San Jose than Los Angeles.
None of this is intended to knock Texas.
It is, however, meant to point out the fallacy of Texas for the last 20 years using California as a piñata in their tap dance to lure more people and more corporations due to their Wild West brand of being business friendly.
In the end the Elon Musks of the world that go to where they can get the best corporate welfare packages from government agencies and be free to prey on consumers will be the only ones made financially better by such a move.
It’ll be the workers that make it possible for the Elon Musk et al to be obscenely rich that will pay for price of not being able to lock in long-term lower power rates and negotiating the ability to forgo property taxes for 20 years if they move to Texas that will end up having their bank accounts depleted to make corporations even richer.
Perhaps Texas can capitalize on their infatuation with the energy sector robber barons.
Television ads depicting a smiling J.R. Ewing of “Dallas” prime time soap opera fame urging businesses and workers to pack up the bags and move to Texas would be apropos.
J.R. Ewing could do his best Texas rattler pose and urge people “to come to Texas and let us unfreeze your assets.”
It’s true. Everything indeed is bigger in Texas including the electrical bills.