The Nebraska cavalry has been working the Texas Legislature for a week and a half, according to The Texas Tribune’s Cassandra Pollock and Erin Douglas. The company’s proposal is for a Texas Emergency Power Reserve that would build 10 new natural gas-fueled power plants in the state. Those would be idle unless they were needed for times of peak demand — or when other electrical generation failed, as some did last month.It’s a slick presentation, complete with a poll and a slide deck that found Texans would pay $3 more every month to “significantly lower their risk of losing power during a winter storm.” As proposed, the new plants would be up and running by winter 2023.
There's the solution, and it sounds like a good one. $3 a month extra? Except for the poor among us, what's the problem? (Let's set aside the absolute lack of social justice in Texas for the moment.) The price tag here, by the way, in round numbers, is $8.3 billion.
Those would be fixed bills, paid each month by customers for the assurance that outages would be less frequent and less severe. That would pay the cost of building the plants. The cost of fuel when the plants are turned on would be passed through to consumers.
Just to be clear, because it gets less clear in a moment. That "fixed cost" is the cost to residential customers (some of whom, yes, can't afford it. But those who can't are also more likely to be among the dead right now, from hypothermia. Like I said: Texas. It's friendly; but it's heartless.)
Put simply, lawmakers and regulators have been more sensitive to the business sector’s complaints about price increases than about those from residential customers. You can see it in the average rates for Texas, compared with other states. According to the U.S. Energy Information Administration, Texas had the 10th-lowest average prices for electricity in the country in January 2021. But residential electric customers paid less in 22 other states. Just two states had lower prices for commercial and industrial electricity.
We’re 23rd for residential prices, third for commercial and for industrial prices. That’s where Texas is competitive, and it’s the root of the claim that prices here are low. They are — for business.
But the plan really lays out one of the reasons lawmakers balked at weather-proofing 10 years ago: It’s expensive. And it’s more expensive for commercial and industrial customers — the big plants known around the Legislature as the “heavy metals” — than for residential customers.That also happens to be how the three sectors line up, in terms of lobbying power, at the Texas Capitol. The industrials and commercials don’t rule the roost, necessarily, but their constant presence and their sectors’ importance in economic development make them very persuasive.
I can already tell you how that's gonna shake out. 2 years ago people were up in arms about the way the state funds public education. The Lege huffed and puffed and declared the problem solved; and everyone was satisfied. Well, except the people who know the Lege didn't do jack shit to solve the problem.
History doesn't repeat itself; but it does rhyme.