By Bill Oakey – April 9, 2021
Let’s keep this simple. What is a “strong mayor?” It is a local oligarch who has so much power, that he or she could veto almost anything that the rest of your elected City Council tries to do. Like so many things in politics and life, it comes down to simple numbers. Right now, we have 11 equal Council members, including the Mayor. It takes 6 votes to pass an ordinance. If you support protecting neighborhoods and other progressive issues, you can fight for or against any proposed ordinance and win, by convincing 6 Council members.
But Under a Strong Mayor, You Would Need 7 Votes to Override the Mayor’s Veto
Please understand that it takes two-thirds of the Council members to override a strong mayor’s veto. We are taking about two-thirds of 10, because the Strong Mayor does not participate in the override votes. Two-thirds of 10 rounds off to 7. So, now your neighborhood association or progressive organization suddenly faces a much steeper hill. You would need to secure 7 votes instead of 6 for every critical issue. And get this…The Strong Mayor doesn’t even have to attend the City Council meetings! He or she could fire any City department heads, and hire a band of personal cronies. Don’t bring The Swamp to Austin!
Don’t Be Fooled By the Smooth Talk and Hype – A Strong Mayor System Would Benefit the Special Interests, Not You!
It doesn’t take rocket science to figure out who must be backing this so-called “progressive reform.” The Big Money special interests would like to install your next mayor. So, vote No. And while you are at it, vote against their entire package of propositions. We don’t need to change any of our current election standards. What we do need is better transparency, tougher ethics policies and more accountability for some of the missteps under our Council-Manager system. Those are reforms worth fighting for.
Prop F Gets an F From Austin’s Real Progressives! Vote Early, Starting Monday April 19th – Click Here for Polling Locations
This will be a low turnout election. Please share this blog link with as many people as possible.
Yes, there Is a “strong mayor” song, and the messenger is literally Strong:
1. “Money (That’s What I Want)” – By Barrett Strong. He was the first artist signed to a Motown label, and this was a #2 R&B hit in 1960.
2. “Money (That’s What I Want)” – By the Beatles, from their second album
By Bill Oakey – March 28, 2021
The U.S. Congress took up their investigation of the Texas power blackout last week. And the bumbling, bungling shenanigans of Texas officialdom went on full display. When you read the editorial below, ask yourself this question – If you owned a large Texas business, would you hire any of the numbskulls from ERCOT, or the political hacks that interact with or pretend to oversee them? The gang that couldn’t shoot straight was called upon the carpet in Washington. Here’s what happened…
Editorial – The Houston Chronicle
By the Editorial Board, March 28, 2021
Texas leaders, get tough on grid security
Human mistakes shut off the electricity. Now the humans in charge must do their jobs.
It wasn’t the wind turbines. It wasn’t natural gas. It wasn’t coal that was to blame in the blackout that killed 111 people across Texas.
The truth is all those power sources went offline at some point during last month’s winter storm, not because they were “renewable” or “base load” or “liberal” or “conservative” fuels but because generators and pipeline owners chose not to weatherize their equipment for a predictable winter storm. Some gas operators chose not to fill out a simple two-page form to exempt their operations from losing power during rolling blackouts and other shortages.
They chose not to do these things because nobody in Texas government required them to.
Let’s stop wasting time, as U.S. House members did in a hearing last week, bickering over which political party’s preferred natural resource saved the day and which caused death and destruction.
The culprit was not vegetable or mineral. It was human.
By Bill Oakey – March 26, 2021
Strap yourselves in for a wild ride, folks! If you think you’re heard everything…Nope, not even close. No wonder this guy won a top journalism award. What in the ding-dong-dang are the politicians going to do now!??
Dallas Morning News Watchdog Column – By Dave Lieber, March 26, 2021
In 20 years, ERCOT has been a misbehaving, secretive, arrogant, even criminal grid operator
Looking at the history of the state’s all-powerful electricity overseer, The Watchdog finds a pattern of failure.
ERCOT, the operator of the Texas electric grid, has been a problem child since the state’s electricity market was deregulated at the turn of the century.
When it comes to the Electric Reliability Council of Texas, incompetence and lack of accountability and oversight is nothing new.
If you know your history, you shouldn’t be surprised about what happened in last month’s cold-weather catastrophe.
The power to bring us electricity rests in the hands of a nonprofit, mostly invisible group whose leaders claimed we were a mere 4 minutes and 37 seconds from a massive blackout that could have shut the grid down for months.
Texans wonder why it would take months. It takes that long for replacement transmission towers to be built shipped, placed and powered up.
It might make you wonder why we don’t throw up the white flag and join the interconnected national grid.
2001: Tasked with creating a pilot program to handle the new deregulated system that began that year, ERCOT blows it by going over-budget and failing to meet goals. Customers who wish to switch electricity companies are blocked. Bills generated by ERCOT are wildly inaccurate. Its budget, built on fees paid by electricity customers, is hatched in secret.
That year, the first price spike to the maximum-allowed cap hits customers, but ERCOT says it won’t happen again. Yet it happens again and again in the next few days.
2002: About a quarter-million customers do not receive bills, sometimes for months. An expensive marketing campaign promoting the new deregulated system is delayed because ERCOT can’t handle the influx of consumers wanting to switch companies.
A peek at financial statements shows ERCOT’s average salary with benefits is $99,000. Employees receive a $10,000 travel allowance. Critics pounce on ERCOT’s sponsorship of a minor league hockey team as frivolous. After promising to cut back, ERCOT asks that its customer-paid fees get doubled.
2004: This is — aside from 2021 — ERCOT’s worst year. The Dallas Morning News reveals a massive procurement scandal at ERCOT that will lead to criminal convictions. Fake companies are created by several ERCOT managers, and millions of dollars are siphoned from ERCOT funds. Legislators blast ERCOT’s weak financial controls and complain about “perceived arrogance among top officials in the face of these problems,” Dyer writes.
2005: A grand jury indicts six ERCOT managers. They include the chief information officer, director of information technology, data warehouse manager, director of program development and physical security manager. The sixth, a former FBI agent, is responsible for corporate security. The men use the stolen money to buy boats, luxury homes and expensive cars.
“The maze of illicit business dealings going on within ERCOT over a year’s time is simply stunning,” the Texas attorney general says. “This is not about electricity. It’s about corruption at top levels of ERCOT.”
The AG at the time? Greg Abbott.
In response to the growing scandal, the Legislature gives all oversight of ERCOT to the Public Utility Commission.
2006: Running out of power on an April day, ERCOT launches, without public warning, rolling blackouts. Even the PUC, which supposedly oversees ERCOT, isn’t notified. Under fire, ERCOT’s chief executive resigns. On the criminal front, the indicted managers are convicted and some are ordered to pay fines, while others are sent to prison.
One state senator says: “There’s an ongoing, cavalier attitude over there [at ERCOT] that you are a standalone entity and not responsible to the people of the state.”
2009: Bills to rein in ERCOT are introduced at the Legislature, but they do not pass. ERCOT’s CEO resigns, the fourth such resignation since 2000.
2010: A consultant’s report finds ERCOT is hindered by “poor corporate governance, leadership and culture.” The consultant finds that ERCOT has too many employees and recommends that 166 get cut. ERCOT cuts 37. A state report finds poor financial oversight, questions ERCOT’s large debt (more than $300 million) and suggests removing industry representatives from the board.
2011: An icy cold snap hits during Super Bowl week, but ERCOT isn’t prepared, resulting in rolling blackouts. Similar cold weather problems occurred in 1983, 1989, 2003, 2006, 2008 and 2010. Meanwhile, during the summer, the state keeps setting records for hot-weather usage. A bill that gives the PUC even more oversight of ERCOT dies in the Legislature.
2015: New electricity demands break records. ERCOT lifts the regulatory cap to its current $9,000 per megawatt-hour. Originally, until 2011, the cap was $1,000 per megawatt-hour. ERCOT’s cap is the highest in the nation.
2018: ERCOT planners predict that generators will note the state has lower reserve margins of power and build new power plants to make profits and boost energy supplies. Because of this, they say, Texas will have a much stronger system by 2021. Oh, well.
2019: The $9,000 cap for wholesale electricity is hit twice, once in May and once in August. “Such high prices eventually trickle down into home rates,” Dyer writes.
Texas’ population of 29 million people is projected to grow by 2050 to 55 million. Can the current system handle the added power load? Why isn’t anyone talking seriously about joining the national grid?
The Watchdog took the “P” away from the (p)UC because the commission doesn’t care about the public. Watchdog Nation member David P. Bader of Dallas suggests, “Going forward, until some meaningful reforms are made, you should refer to ERCOT as E(r)COT since “reliability” doesn’t appear to be part of their purview.”
Done. Considering its sketchy past and dangerous present times, you have to wonder if E(r)COT can handle the future.
News researcher Alyssa Fernandez contributed to this report.
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Blog Special Feature – Songs From the ERCOT Jukebox
1. “Ain’t No Honky Tonks in Jail” – George Goss (Totally Hilarious)!
2. “Shame and Scandal” – Shawn Elliott
3. “Shame, Shame, Shame” – Cher & Tina Turner
4. “In the Jailhouse Now” – Johnny Cash
5. “Mama Tried” – Merle Haggard
By Bill Oakey – March 25, 2021
During the winter storm, we were all told why the price of electricity sold through ERCOT was increased to the maximum rate. We were told that it’s a demand-based system. The high prices were designed to incentivize energy producers to build more capacity and supply more power to the grid.
Well, Texas utilities did their part. They paid the outlandish price of $9,000 per megawatt-hour, which is 250 to 300 times the normal rate of $30 to $35 per megawatt-hour. These astronomical prices continued for 32 hours after the storm ended. The Washington Post reported that nearly $50 billion in electricity sales were generated during the week of the storm. To put that $50 billion figure in perspective, it’s over 3 times the entire annual budgets of Austin, San Antonio, Dallas and Houston, combined! Check the numbers and sources below for this fiscal year’s budgets:
A wave of bankruptcies and lawsuits are unraveling by the day. Many Texas consumers will see higher electric bills, stretching far into the future, as pass-through power supply adjustment charges are recalculated several months from now. San Antonio’s electric utility is considering spreading these charges over an entire decade, to make the rate jolt less onerous. Close your eyes and contemplate what would happen if ERCOT sees no reforms, and we get another severe winter storm in the next year or two.
So, here is the one big question that begs to be answered:
How Many New Weatherized Power Plants, and How Much New Capacity Will Texans Get, After Paying All Those Tens Of Billions Of Dollars?
We have a right to expect a precise answer to that simple question from the likes of ERCOT, the Public Utility Commission, and the folks at the State Capitol who gave us an independent power grid with these pricing policies. Otherwise, how could they possibly justify keeping ERCOT’s current pricing model in place? Exelon Corp., which lost close to $1 billion, told the Washington Post that it may consider leaving Texas unless its market system is reformed.
So far, we haven’t heard a word from the folks who walked away with windfall profits about building us the new generating capacity that we were promised. And they are not required to do so under the weak Texas laws. As soon as this blog receives the list of power plants and their capacities, we will publish it here in detail.
If You Would Like to Wade Into the Weeds of the Data
Here is a bucketful from the U.S. Energy Information Administration. You won’t find anything close to ERCOT’s $9,000 per megawatt-hour peak prices.
Musical Accompaniment for This Blog Piece
1. “Such An Easy Question” – Elvis Presley
2. “A Lover’s Question” – Clyde McPhatter
3. “What a Price” – Fats Domino
4. “96 Tears” – ? and the Mysterians
5. “What Did I Promise Her Last Night?”– Mel Tillis
6. “Promises Promises” – Lynn Anderson
7. “When” – The Kalin Twins
8. “The Twelfth of Never” – Johnny Mathis
By Bill Oakey – March 22, 2021
In just 32 hours, after the winter storm was over, ERCOT billed enough electricity charges to fund the entire annual budgets of Texas’ four biggest cities combined. Read on for further details…
We know that the Big Boys on Wall Street are thrilled with their massive windfall in ERCOT’s utility pricing overcharges. They and our governor would like everyone else to just butt out now, and leave well enough alone. The Chairman of the Public Utility Commission was caught on a recording, promising to protect the Wall Street profits. The Texas Tribune recently published an article entitled, “Experts Fear Reversing Electricity Charges Will Make Things Worse.”
Why? Because “That might have a chilling effect on companies wanting to come in and invest money in Texas.” Those same “experts” insist that consumers would not be affected if the overcharges were paid back. So, we pay more when the price goes up, but if it came down, with a huge price correction, we would get nothing. Huh?
In Austin, over a dozen people were hospitalized with frostbite. Eleven feet were amputated, and five people had both feet amputated. They will be disabled for the rest of their lives.
How Much Is $16 Billion…Really?
1. Take a guess at how much this year’s entire city budgets for Austin, San Antonio, Dallas and Houston add up to. Here’s the simple math:
2. If you laid a bunch of $10 bills end to end in a line, that line would have to wrap around the world 6 times to total up to $16 billion! Here’s the math:
The earth’s circumference at the equator is 24,901 miles
24,901 miles converts to 1,577,727,360 inches
1,577,727,360” divided by 6.12” (length of any U.S. bill) = 257,798,588
That’s roughly a quarter of a billion single dollar bills. Those would wrap around the world 4 times to reach $1 billion. So, it would take 4 times 16, which is 64 times around, to reach $16 billion with $1.00 bills. For $10 bills, it would be one-tenth of that, which is roughly 6 times.
3. Austin Energy’s annual budget is now $1 billion. So, at the current rate, a $16 billion windfall would keep the utility running for 16 years!
Just take a deep breath and try to swallow this – In just 32 hours, after the storm was over, ERCOT billed enough electricity charges to fund the entire annual budgets of Texas’ four biggest cities combined! If that doesn’t tell you that we need serious reform of our power grid pricing system, then nothing will.
Two interesting questions – How many fully weatherized new power plants could be built with $16 billion? And how much of that money, plus the profits earned during the storm actually be used for that purpose?
We’ve heard a lot about “winners and losers.” So, who are the winners, and what are they going to do with all that money? We deserve a full accounting of what happened to the entire $16 billion, including the $12 billion or so that was supposedly “settled.”
For the Readers: A Simple Multiple Choice Question
The assertion that Texans should shrug off ERCOT’s $16 billion in overcharges, because it wouldn’t make any difference is:
E. All of the above
If you answered “E,” then congratulations, you passed the exam. But don’t expect any kudos from ERCOT, the Public Utility Commission or the Governor’s office. They are all out to lunch!
Musical Accompaniment for This Blog Piece
1, “Money Makes the World Go Round” – Liza Minnelli
2. “Around the World” – Connie Francis
3. “Miss Otis Regrets” – Linda Ronstadt
4. “Money, Money, Money” – Abba
5. “For Your Sweet Love” – Rick Nelson
By Bill Oakey – March 22, 2021
Birds are chirping. Spring is in the air. People are out frolicking, with hardly a care. High above that facade sits an unmerciful God. Reach into your mailbox…but only if you dare!
I offer both good news and bad news. You might qualify for a temporary property tax exemption if you sustained certain levels of damage during the February storm. The TCAD website lists all the details. The bad news is that the Chairman of the Appraisal Review Board has abruptly resigned, because of serious animosity towards him from other board members. That could throw a huge kink into this year’s rollicking tax protest season, which seems to set new records in numbers every single year. The appraisal review process has strained under heavy workloads in the recent past, leading to chaos and legal challenges.
Why Do Austin’s Tax Appraisals Keep Skyrocketing?
The simple answer is that the official mission of our once affordable city has morphed into something rather frightening for ordinary, hard-working, longtime residents. If you look in the City Budget, you will find an organization chart. The little box at the very top is labeled “Citizens of Austin.” The official wording in that box remains the same, as it has since Austin’s founding in 1839. But, unofficially, a single new word has been added.
You may recall a scene from George Orwell’s Animal Farm. The first time the animals walked by the big sign on the barn, it said, “All Animals Are Equal.” But the next time they saw it, the message had been altered – “All animals are equal, but some are more equal than others.” In the case of our City’s Organization Chart, just one single word has been added to describe the folks in the very top box – “Future Citizens of Austin.”
The powerful special interests who control the City have a mission for you and your neighbors as well – Make way for those wealthy newcomers, and the developers who want to bulldoze your house and turn it into multiple luxury units. For another analogy, think of the science fiction movie classic, “Invasion of the Body Snatchers.” Seed pods were placed outside people’s bedroom windows. Once you fell asleep, the seed pod would burst open to reveal a blank, alien body that had arrived to take the place of yours. The assembled army of new, sinister creatures then tried to brainwash the rest of the town into falling asleep and joining their herd.
That same scenario is playing out here in Austin. This time it’s called “Invasion of the Property Snatchers.” No family is safe, not even from its own members. If your wife comes to the breakfast table looking a bit odd, and speaks in a dull, lifeless tone, get ready to run. Especially, if she says something like, “Oh darling, we were so wrong! High density is wonderful for our neighborhood. It’s too late to stop it anyway. Let them have our lot. We should sell it, or maybe just give it to them…” Jump up from the table and run! As fast and as far as you can. But whatever you do, don’t fall asleep!
How to Open Your Tax Appraisal Notice
By Bill Oakey – Originally published March 26, 2014
Within just a matter of days, something will happen all over Austin that must be approached with utmost caution. That thump and rustling sound that you hear outside your front door could evoke a cold sweat and the starkest feeling of sheer dread and fear. “Could it be out there today?” you might wonder. “Was that really the mailman, or just a bird trying to make another nest?” “Should I actually go out there and look?” “Do I have to?”
All of those are perfectly legitimate questions. But sooner or later, you are going to have to open that door. You are going to have to stick your hand in the mailbox, and find out if this is the day that you were hoping would never come. But I have a few suggestions that might help you get through the process. There may be a way to do it and remain in one piece.
1. With any luck, the “bad envelope” will be buried inside a bundle of junk mail. Grab the bundle and squeeze it tightly, so that you can take everything inside without looking at the envelopes.
2. Once your are safely inside the house, it’s OK to look through the envelopes. But make sure you are sitting down first.
3. If you even think you see an envelope from the Travis Central Appraisal District, don’t open it right away and don’t panic! Take a few deep breaths and look at the envelope again. Make absolutely sure that you saw what you think you saw. Our brains can play tricks on us sometimes.
4. If you are positively certain that what you are holding really is your tax appraisal notice, then you will have to make another decision. When and how are you going to open it?
5. My advice is definitely not to do it alone! If your significant other is not home yet, wait until you can share the memorable experience together.
6. If you don’t have a significant other, or if he/she is out with another significant other, just call a good friend.
7. Depending on your situation, you might want to pour a glass of wine or have some medication handy if needed. I’ve always heard that aspirin is good for a stroke.
8. If the battery is low on your phone, plug it in. You might need to call 911.
9. When you and at least one other supportive person are sure you are prepared, go ahead and get ready to open the envelope. Do not attempt it with a sharp object like a knife or a letter opener.
10. Open your tax appraisal notice.
Sorry, I can’t help you any further. We will all miss you when you leave. Take those fond memories of Austin with you, and come back and see us sometime!
Musical Accompaniment for This Blog Piece
1. “Something’s Coming” – West Side Story, Original Broadway Cast
2. “Getting Ready for the Heartbreak” – Chuck Jackson
3. “Bad Moon Rising” – Creedence Clearwater Revival
4. “Taxman” – The Beatles
5. “Shutters and Boards” – Jerry Wallace
6. “In the Middle of the House” – Vaughn Monroe
7. “Make Way for a Better Man” – Willie Nelson
8. “Home of the Blues” – Johnny Cash
9. “I’m Gonna Move to the Outskirts of Town” – Ray Charles
10. “Little Boxes” – Pete Seeger
By Bill Oakey – March 17, 2021
Almost every day, news reports pop up with a different twist on the confusing numbers. How much did ERCOT really overcharge Texas electric utilities? First, we heard the staggering figure of $16 billion. This amount came from Potomac Economics, who monitors ERCOT’s market functions. As I noted previously, $16 billion works out to roughly $552.00 for every man, woman and child in Texas.
Before the ink was even dry on the newsprint, you could hear the whimpers and the hollers. City officials squawked, utility companies balked. Suddenly, that $16 billion figure began to morph into something much smaller. All sorts of numbers were tossed around. If you mix hard numbers with politics and powerful special interests, they become soft and squishy. Like something you would not like to feel between your toes, while stepping through a cow pasture.
Let’s Make Our Way Through the ERCOT Shuffle
Everybody pick a partner and form a circle. But please stay 6 feet apart, and keep your masks on.
1. We are told that ERCOT overcharged customers by $16 billion – after the storm was over.(Shuffle to the left and swing your arms around. Keep the circle moving clockwise).
2. The Public Utility Commission doesn’t initially deny the number, but refuses to order ERCOT to fix the errors – It would only create winners and losers. It’s too hard to “unscramble the egg.” (Shuffle to the right, take two steps, and kick your left foot forward).
3. Lt. Gov. Dan Patrick calls on ERCOT to repay the $16 billion, plus additional overcharges billed above the approved maximum rate. He cites RRCOT’s own regulations. (Clap your hands and wiggle your hips. Then continue shuffling clockwise).
4. ERCOT’s monitor announces that only $5.1 billion needs to be refunded to consumers – later revised again to $4.something billion. The rest has already been settled with large providers. The PUC Chair claims that the remaining amount is not really an error, and blames it on a formula. (Shuffle sideways to the other side of the circle, and choose a new partner).
5. The PUC Chair tells the Lt. Gov. and a Senate committee that it would be illegal to change any of ERCOT’s billings, and stands by his assertion that the overcharges were not errors. (Face the center of the circle. Turn your backsides outward, and bend forward to your waist).
6. The Texas Senate votes in record time to order that the overcharges be repaid. But the House leadership slams on the brakes and hesitates. Big business leaders urge the State not to “meddle” with prices that were previously set. That translates to “We’re happy with the winners. To hell with the losers.” (That’s all the time for dancin, folks. Now, y’all come back and see us real soon, ya hear?)
The Drama Will Shift to the Courtroom
Regardless of what the State does, this big mess is headed for months, and possibly years of litigation. The cities of San Antonio and Denton have filed lawsuits, along with multiple private utilities. The Legislature should take some action soon to clarify the whole confusing situation. Somebody besides a court judge should tell us whether the big “settled” chunk of the $16 billion was settled accurately and fairly.
Of course, they should order ERCOT to pay back the remaining overcharges. Failing that, they could ask ERCOT’s independent monitor to assist in identifying who now has the unsettled money that was collected in error. Then, the State should pass legislation to retrieve that money and place it in an escrow account. That way, the courts will know that the money is really available to award to the parties that win the various lawsuits.
Will the Public Ever Have Confidence In Such a Crazy, Convoluted System?
Probably not, unless our State leadership is willing to ensure that we are given all the facts. They also need to establish clear guidelines on how ERCOT handles electricity pricing going forward. We are just one polar vortex away from another severe winter storm. But just leaving ERCOT to continue legalized price gouging is not a workable solution. The February storm and exorbitant pricing caused extraordinary financial harm to cities, businesses and citizens throughout the state. We need a whole new electricity pricing model that better reflects the actual cost of delivering the power, with nothing more than a reasonable amount of profit.
Blog Music Special Edition – Songs for the ERCOT Shuffle:
1. “Put Your Little Foot Right There” – Lawrence Welk
2. “It’s a Cowboy Lovin’ Night” – Tanya Tucker
3. “Dance In Circles” – Tim Ryan
4. “Copper Canyon” – Lisa Kirk
5. Do-Si-Do and Face the Sides – Square dance lesson
6. “Changing Partners” – Patti Page
7. “The Winner” – Bobby Bare
8. “Born to Lose” – Ray Charles
By Bill Oakey – March 9, 2021
The unbelievable $16 billion in utility overcharges that followed the February storm will have to be paid back by ERCOT, and the Public Utility Commission will not be able to stop it. Lt. Gov. Dan Patrick called for the action on Monday, citing ERCOT’s own regulations requiring the paybacks to be made within 30 days (Nodal Protocol Section 6.3 (6) (a).
“Unscrambling the egg” to make it happen will no doubt require armies of lawyers and rooms full of accountants. In addition to the large block of overcharges that happened after the storm was over, Patrick cited other billing errors that came from stratospheric pricing well beyond the State’s already high approved cap. The cap was set at $9,000 per megawatt-hour. But IMM, the outside firm that monitor’s ERCOT’s operations identified sporadic charges as high as $24,000 per megawatt hour. Those errors must now also be corrected.
In the meantime, heads are rolling at all level’s at the State’s utility authorities. On Monday, a second member of the three-member Public Utility Commission resigned. Shelly Botkin’s departure was effective immediately, leaving just Chairman Arthur D’Andrea in place. Then, early Tuesday morning, the Texas Observer reported that ERCOT is refusing to turn over records related to their preparedness and their response to the winter storm. They are seeking an opinion from the State Attorney General to avoid disclosing the information. ERCOT insists that it is not subject to the State’s open records laws because it is not a State agency. The result could be a long legal dispute that ends up at the Texas Supreme Court.
Stories of astronomical electric bills from ERCOT’s demand-based pricing system and the billing errors abound. On Monday, the City of Denton filed suit against ERCOT over an electric bill for $207 million. This compares to their entire annual budget of around $230 million. On a hopeful note, there is word emerging of a huge Tesla “secret battery” that is being constructed at a site close to the ERCOT grid. If all goes well, this could become part of a much needed solution to our power generation woes.
The Legislature is currently rolling out a bucketful of bills to deal with some of the immediate problems. I will not be surprised if they have to appoint a two-year interim committee to hammer out long term reforms to fix the entire tangled up mess. The question remains as to what might happen if we get another severe winter storm before enough current power generating facilities are sufficiently weatherized and enough new ones can be brought online. In my view, the best way to protect citizens from serious danger and costly water-related repairs would be to focus on strategies to implement effective rolling blackouts.
Good News From Austin Energy!
While many Texas utilities faced devastating losses during the storm, Austin Energy estimates that it earned $54 million. That’s because our City-owned utility has done an excellent job weathering its generating facilities. The actual amount of revenue that Austin energy receives, however, could be anywhere between minus $16 million and plus $104 million. It all depends on how well ERCOT “unscrambles the egg” to reprice the State’s power purchase transactions. In any case, our utility’s ratepayers should not be saying “yikes” to massive spikes in forthcoming bills.
But…wait! You might be wondering why we had to freeze in the dark if Austin Energy weatherized most of its power plants, and they were working during the storm. That’s because our electricity goes into the ETCOT grid, where it is sold statewide through a convoluted demand-based bidding process. A process that we now know can lead to other-worldly prices, and become riddled with pricing errors.
Where Is Austin Energy’s Reward for Weatherizing Power Plants?
Under the current system, why doesn’t Austin Energy get some kind of financial reward for better management of its facilities? This is definitely an issue that our City Council and our Legislative delegation needs to look into. The reward for well-managed utilities could come in the form of discounts applied to power purchased from the grid. Or, the State could hold some revenue in reserve from power that is sold. Then, they could do an annual review and issue payments to well-managed utilities, based on a certain set of criteria.
Perhaps there is some provision buried deep within the troves of ERCOT and PUC regulations that we just don’t know about. If not, let’s hear it for a new bill at the State Capitol to give utilities like Austin Energy and their ratepayers proper compensation-for now, and into the future.
By Bill Oakey – March 8, 2021
While you and your neighbors were freezing in the dark for several days in February, you probably wondered if you could trust the “powers that be” to straighten out the big, ugly mess. Fast forward to Friday March 5. We learned that ERCOT, the team that manages the Texas power grid, kept the maximum price allowable for electricity for 32 hours past the end of the storm. So, for a day and a half, Texas electric utilities were overcharged to the tune of $16 billion. During the full period of the maximum pricing, including the overcharge period, utilities were charged $9.00 per kilowatt hour. That is 75 times the normal winter rate, according to NPR News.
How much do Texas ratepayers stand to lose in this shameful debacle?
Here’s the simple math. This is based on very rough averages, but it will give you the basic perspective:
- $16 billion billing error divided by 29 million residents of Texas = $552.00 for every man, woman and child in the state.
- $552.00 times 1 million Austin residents = $552 million lost to Austin ratepayers
- $552.00 times 2 million Austin metro residents = $1.1 billion lost to the Austin Metro
Surely, the Texas Public Utility Commission would order those overcharges to be paid back. Right?
Like Trying To Unscramble An Egg?
On Friday March 5, Mr. Arthur D’Andrea, the new PUC Chair, who just replaced the ousted former Chair, tried to explain their decision NOT to correct the overcharges. “It’s just nearly impossible to unscramble this sort of egg,” he proclaimed. Then he did an artful Texas two-step to dance around the issue. In doing so, he left a big boatload of unanswered questions:
- Are there procedures in place to guard against keeping prices high beyond the conclusion of a power emergency?
- Is there a written policy regarding if, when and how the related overcharges should be corrected? If not, why not, and will such a policy be forthcoming?
- Who all is responsible for monitoring the fluctuating electricity prices?
- What specifically were the various breakdowns in procedures that led to the February overcharges?
- Are there any penalties placed upon employees for actions or inactions that can lead to these types of overcharges? If not, will there be some in the future?
- What is the historical record of previous overcharges similar to these?
- What specific steps can be taken to prevent these overcharges from happening again?
- Do any State laws or regulations need to be revised or new ones written to authorize and mandate that these type overcharges be corrected?
- Does the Governor have emergency authority or any other powers to make this happen? If not, can political pressure be applied?
- How long has it been since ERCOT and the PUC have been audited by the State Auditor?
- Are there any reports showing whether or to what extent these agencies have followed previous audit recommendations?
- Who will be the first State leader to demand that the overcharges be paid back, ask for revised procedures for both agencies, and request new State audits.
- Have you ever heard of any business or agency, public or private, that has ever even suggested not correcting a $12 BILLION billing error??!!
The biggest question – Why do we have such a screwball system? A convenience store owner could face civil penalties up to $10,000 per violation for price gouging. And yet the electric power suppliers get away with it. A bunch of fat cats are now laughing all the way to the bank! For the wonks among you, here’s the scoop on how ERCOT works. This article is from April, 2019. The warning signs were flashing, as they have been for a very long time.
Humpty Dumpty – Texas Style
By Bil Oakey
Humpty Dumpty fell from a tower
That ERCOT assigned to bring us all power
None of the bureaucrats and none of their friends
Could put Humpty back together again
So they gathered his innards and tossed ’em in a bowl
And scrambled him up, unaware of the toll
Try as they may, and try as they might
Those buffoons just couldn’t get anything right
They overcharged Texans by $16 billion
How’s that for relief from the freeze and the chillin’?
You can’t unscramble this sort of egg
Said the PUC Chairman – was he pulling our leg?
The Texans I know are smart and tough
We won’t put up with that kind of guff
Charging 75 times the normal rate
Is no way to run the Lone Star State!
Humpty Dumpty will not be forgotten
By now the poor fellow is probably rotten
It’s time for our leaders to stand up and be counted
There’s a big hill to climb, but it must be surmounted
Anyone who reads this should contact their State Representative’s office and their State Senator to ask for an end to the insanity surrounding our electric power grid and the lack of common-sense regulations.
Check out this amazing, but unverified YouTube video on how to unscramble an egg.
A Blast From My Past
My days of consumer activism began in the 1980’s. As a member of Austin’s Electric Utility Commission, I fought many electric rate battles. Here is one of my letters to the editor in the Austin American-Statesman. The last line became my slogan:
Isn’t it interesting how many words in the English language have more than one meaning? Take, for example the, word “bill.” Birds have bills. The Legislature passes bills. Entertainers are listed on bills. But the worst kind of bill is the kind you have to pay, like an Austin electric bill. Well, I have a very simple message. My name is Bill, and I would like to lower yours.
Musical accompaniment for this blog piece:
1.Humpty Dumpty Heart – Hank Thompson (original 1947 version)
2. Dirty Old Egg-Sucking Dog – Johnny Cash (live from Folsom Prison)
3. Four Strong Winds – Bobby Bare
4. The Blizzard – Jim Reeves
5. Storms Never Last – Dottsy
6. I Am The Walrus – The Beatles
7. Texas Two-Step – Vance Lane
8. Take The Money and Run – Steve Miller Band