Stop Me If You’ve Heard This One Before

The wholesale price for electricity in Texas skyrocketed during last month’s power crisis — and remained high even after forced outages ended. Now, the Texas Senate and House are at an impasse over whether some wholesale prices should be readjusted. https://t.co/wLqOEmZBFk

— Texas Tribune (@TexasTribune) March 17, 2021

It’s still not clear how much the billing dispute will impact average Texans. The measure would not change existing law to prevent similar occurrences in the future. At least some of the additional costs incurred by retail electric providers would likely be passed on to customers through rate increases. But the impact varies by company — and those that sent power to the grid while rates were inflated stand to lose money if ERCOT reprices. 

Gov. Greg Abbott has not weighed in on the fight since Monday morning, when he seemed to urge a more deliberate approach. He said electricity repricing posed potential conflicts with some provisions of the Texas Constitution and that the Legislature needed to “weed through all these complexities.” Later in the day, Patrick said the Senate did not have similar concerns after talking with lawyers and that if Abbott was worried about such issues, he would have detailed them when he named “billing errors” an emergency item.

My bankruptcy professor (also a bankruptcy judge at the time) told us there were three types of real estate appraisals (real estate prices in Texas had collapsed when a bubble burst.  Countless numbers of developers and those looking to make money in real estate were flooding the bankruptcy courts and literally teaching lawyers in Texas what bankruptcy did.  Overnight it went from a practice more obscure than patent law to being hotter than Beyoncé).  What was I saying?  Oh, yes, the three types of real estate appraisals:  windshield (as seen through in driving by, IOW); wild-ass (you get the idea), and “Hell if I know but it looks good on paper!”

Dan Patrick’s Senate bill 2142 is the last of those three.  Patrick has no idea what it does (Gov. Absent at least has the background of being a lawyer and one-time Texas AG; Patrick hosts a talk-radio show), but it looks good to him to be for it.  Will any money be refunded?  If so, from who, to who?  Probably not rate-payers, but Patrick cares less about them than he says Abbott does.  Will the courts declare it violates the Texas Constitution?  What da fuck does Patrick care? He’ll just rail against the courts, too.

Donald Trump didn’t invent this schtick.  He didn’t even perfect it. He just took an amateur hour version of it to the White House.  Con men like Patrick still don’t realize the mark is now on to the con.

Per the article, I expect SB 2142 to die in the House.  Patrick’s been down that road before:  his bill to ban transgendered bathrooms in all public places in Texas died because the then Speaker (also GOP, as are all positions of power in Texas) had to reassure businesses ready to boycott Texas to stand down.  Patrick was furious.  He knew his voters would re-elect him no matter what, and he thinks, like Trump, that he’s a populist; well, when he wants to be.

And now one of the largest wholesale electricity providers in Texas has filed for bankruptcy:

“Our bankruptcy plan, if confirmed, provides relief for our former customers who were unable to pay their electricity bills resulting from the unprecedented prices,” Griddy CEO Michael Fallquist said in a statement on its website. He emphasized Griddy did not profit from increased prices and only made money off of the fixed monthly membership fees.

Something exceedingly odd about that, since Griddy’s customers are unsecured creditors and so last in line to claim any of the assets of the bankruptcy estate (think of bankruptcy like a probate, where the estate of the deceased is divided up among claimants in the absence of a will.  In that case, the statutes decide generally who gets what. In bankruptcy, the statutes say the last in line are the unsecured creditors.).  The secured creditors of Griddy will have something to say about this plan, and if Griddy only has the monthly fee as income, I’m not sure where the get the large sums that were vaccumed out of bank accounts and levied on credit cards.  It sounds addled to me, at first blush.  Not to mention that “unable to pay” language.  I’m guessing those who were able to pay are screwed, and those who weren’t won’t have to, since Griddy won’t go after them, and the creditors can’t go after Griddy.  But the creditors can go after that class of customers through Griddy, in order to recover their losses.  Potentially, anyway.

There is no quick fix for this, no simple solution, and Dan Patrick is desperately seeking one.  As I said, he doesn’t know whether to shit, or go blind.  My money is on the bet that he has to do both before the year is over.