In Texas the free market is expensive

 

We’ve learned a lot about Texas in the past few days. Their infrastructure is woefully inadequate, their governor hates government and their utilities are free from federal regulation so when demand rises, so do prices—without limits—even for necessities like heat and water.

But hey, that’s fine because in the words of Texan and former Secretary of Energy Rick Perry “Texans would be without electricity for longer than three days to keep the federal government out of their business.” 

That may be true of wealthy Texans, but it’s debatable whether the folks whose roofs caved in from burst water pipes and must now boil water (without any heat) would agree.

Last night on MSNBC the price of electricity was cited as under $30 per megawatt-hour before the recent storm. It’s now over $9000 per megawatt-hour. That is not a typo. People who haven’t yet frozen to death can now look forward to going bankrupt.

Those whose pipes froze can also expect hefty bills to clean up the mess from water spilling into electrical fixtures, causing ceilings to crash to the floor and ruining their personal belongings. If the utility company isn’t required to keep rates reasonable, we can only imagine what the water damage clean-up will cost. And let’s not be naïve about how much their insurance will cover.

To be fair, a lot of Texans are rushing to the service of others. But no amount of neighborly assistance can mitigate the financial hardship many Texans now face.

One woman was cited $3000 for a plumber just to assess the damage to her home. Yes, demand is high, but how can anyone with a conscience justify $3000 for an assessment? Given how busy plumbers are, the work is more plentiful than ever. They won’t have to advertise or look for work any time in the foreseeable future. So, what do they do? They up their prices until only the rich can afford their services. By the time this series of crises is over, the average Texan will owe his entire life savings to someone.

You might think the government should step in to help, but let’s be real, they caused this problem. Their insistence that government is bad has meant that government officials now feel free to simply not govern at all.

Tim Boyd, former Mayor of Colorado City, made his position clear in a Facebook post that said, “No one owes you are (sic) your family anything, nor is it the local government's responsibility to support you during trying times like this…Only the strong will survive and the weak will parish (sic)." Boyd wrote.

Apparently, it doesn’t matter to him that the government who refuses to take responsibility for this catastrophe is the source of it.

Texas Governor Gregory Abbott tried to point the finger at renewable energy, but only about 10% of Texas’ energy comes from renewables. It is the failure to weatherize pipelines and instruments controlling energy generated from fossil fuels and nuclear energy that led to the horror show Texans are living with today. And it was the state government of Texas that created that failure.

As Democratic state Rep. James Talarico said in the Charlotte Observer, “It's almost like a murder suspect blaming their right hand for committing the crime."

There is a reason for Abbott’s refusal to lay blame where it belongs: The oil and gas industries are Texas’ largest industries and biggest political contributors. Since he can’t blame them, and is unwilling to take any responsibility for the government’s failure to ensure they do the right thing, he’s trying everything else.

After his failure to credibly blame renewable energy, he turned his ire to ERCOT (Electric Reliability Council of Texas)—an ironic moniker if ever there was one.

But even that excuse fell apart when Bill Magness, chief executive of ERCOT came right out and said he thought Texas “had better prepared for such cold.”

The reason he thought that was because ERCOT had issued a report over ten years ago, in which it was recommended that generators winterize their equipment—including suggesting that pipes be insulated.

Now Governor Abbott is calling for reform at ERCOT, but the state Public Utilities Commission is responsible for overseeing ERCOT and it was the state that chose not to implement their earlier recommendations. Apparently, in Texas, the buck never stops.

Another reason for the prolonged outages is that Texas is the only state to use its own power grid. “That frees it from federal regulations, including ones that could have required it to be better prepared for a freak cold snap,” said Peter Fox-Penner, the founder of Boston University’s Institute for Sustainable Energy.

Freedom from interference by the Federal Government is the bedrock of Texas politics. That and an almost maniacal insistence that the free market is the only regulator they need. But as we can see that thinking is flawed. As mentioned in one of my prior posts, the so-called free market is anything but. It provides the perfect opportunity for those with money and other resources to take advantage of those less fortunate. There is no rising tide lifting all boats. It’s more like a yacht coming into harbor and pushing all the little boats under water or crashing them into the pier.

It’s one thing to use a simple supply and demand formula for luxuries, it’s another to apply that to necessities. Democrats know this; Republicans do not. Or perhaps, they just don’t care.

As former democratic presidential candidate Beto O’Rourke said in his recent interview with Mika Brzezinski on Morning Joe, “This is what happens when a state is governed by those who don’t believe in government.”

There is only one way out for Texas: it’s time to go blue.