Houston is remembering the legacy of Enron with the sentencing of Jeffrey Skilling this week. Too bad so few people in Houston read the New York Times, or are paying attention to the real legacy of Enron:
After the Texas Legislature, urged by Enron and big industrial customers, voted to make electricity generation a competitive business, the utility serving the Houston area sold 60 power plants that generate most of the power for the area to four investment firms — the Texas Pacific Group, the Blackstone Group, Kohlberg Kravis Roberts and Hellman & Friedman — which soon resold the plants at the $5 billion profit.When I lived in Austin, we notoriously paid high electricity rates because the City owned the power generating equipment. This was prudent, actually, since the State owned much of the prime downtown real estate (and not a small portion outside of downtown), which the City couldn't tax. So it collected money via electricity rates. Actually, by the time I left Austin, rates were fairly competitive.
But state regulators have ordered electricity customers to pay an average of $4.75 monthly for 14 years to finish paying for the construction of the power plants, plus interest.
And the utility that sold the plants, Centerpoint, is suing for even higher payments from customers. Houston-area consumers now pay among the highest electricity rates, nearly double the national average.
Now, thanks to deregulation, the rates in Austin are cheaper than the rates in Houston.
But unfortunately, that's not making any news in the gubernatorial race, or in the state legislative races. And high electricity rates, like sales taxes (Texas depends on sales and property taxes, largely, for state income), are incredibly regressive. My electric bill has jumped almost 50%, even though I use no more than I did last year.
I hate to think what those rates are doing to the poor and the janitors living on minimum wage.
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