The Texas electricity racket

iuPrepare to be shocked: the deregulated Texas electricity market has produced a windfall… just not for consumers. It’s created lots of opportunities to monkey around with power prices behind the scenes, profiting somebody who is not you.

The Calpine incident is far from isolated and unusual only in that the details have become public. Power companies have exploited weaknesses in the design of Texas’ deregulated market almost from the day it began operating in 2002 and often done so with few consequences, reaping windfalls that have cost consumers, traders, industrial customers and retail power companies hundreds of millions of dollars, according to court records, regulatory filings, market reports and interviews with analysts, commodity traders and other experts.

In other words, business as usual. Someday, somewhere, privatizing a critical public service is going to work well and save money and make everything better. I look forward to hearing about it, and I’m sure it won’t be anything the Texas legislature has had a finger in.

(Side note: it is so nice to see the Houston Chronicle doing actual journalism. I’ve been a pretty harsh critic of the paper over the years – because they deserved it – but they are clearly making some investments in their newsroom, and it’s overdue and welcome.)

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