Politex

Wrong choice for the father of electric choice?

National Power Co., the small Houston-based electric retailer that has run afoul of Texas regulators, has one very high-profile customer.

Steve Wolens, the former state representative who co-authored the legislation that made National Power possible, said he signed about a 16-month contract with the retail electric provider.

"That's my REP! I'm its customer," Wolens said in an email.

A spokesman for the Texas Public Utility Commission has said the agency has opened an investigation into National Power for allegedly breaking fixed-rate deals with customers. The PUC also has removed National Power from the state's Web site that lists competitive electric offers.

Wolens, as a Democrat from Dallas, sponsored Senate Bill 7 in 1999 that created the state's system of retail electric competition. He said he's about a year into his contract with National Power.

"I haven't picked up the mail this week to see if they broke the deal," he said.

The company last week sent letters advising customers that it was canceling existing fixed-rate plans and jacking up prices. That means some customers who signed annual contracts last winter could see their bills go up by as much as 50 percent, according to figures provided by the Texas Public Utility Commission.

A customer-service official for National Power on Wednesday declined to comment or to provide other contact phone numbers for the company. She also said she would pass a message from the Star-Telegram on to company officials, who had not responded by Thursday.

-- R.A. Dyer

A solar power future?

Giant 30 mile by 30 mile solar plants in west Texas could power the entire state, according to a new report from the Environment Texas conservation group. According to the report, the solar power plants could generate 148,000 megawatts of electricity -- or twice the  state's current  energy use.

"Solar thermal power is ready for primetime," said Luke Metzger, director of Environment Texas. “With support from policymakers, Texas could quickly get much of its energy from this abundant and clean domestic energy source at prices competitive with new nuclear or ‘clean coal’ power plants."

However, Metzger warned that solar energy tax credits that make such projects more cost effective are set to expire at the end of the year. He said the cost of energy from solar thermal power plants could be competitive with the cost of new nuclear power plants.

Four companies have proposed building eight new nuclear reactors in Texas. Those plants can cost billions of dollars. The state is also contemplating constructing billions of dollars in transmission lines to encourage the development of additional wind power.

In a recent report, Texas Comptroller Susan Combs notes that about 2.8 cents of every dollar spent on energy in Texas finances a local, state or federal subsidy.

-- R.A. Dyer

Keeping the power on this summer

Elderly customers of TXU Energy -- as well as those customers designated as low-income or disabled -- need not worry about having their electricity cutoff this summer.

The north Texas company on Thursday declared a moratorium on summertime disconnects for such vulnerable customers, and said that such customers can also apply for flexible deferred payment plans.

“We want to go the extra mile to help those who need it most during the summer,” said Jim Burke, chief executive officer, TXU Energy.

Customers who want to take advantage of the offer must contact TXU Energy at (800) 242-9113. TXU says the offer is effective July 1 through September 30, 2008.

Consumer advocate Randy Chapman praised the move, and urged other Texas electric companies to follow suit. He noted that the buyers of TXU committed earlier to form a low-income task force, and that that task force recently recommended the moratorium.

"We are pleased that TXU responded quickly and appropriately to those concerns," he said.

-- R.A. Dyer

Putting the breaks on greenhouse gas reductions

Although scientists from around the world have predicted dire consequences from global warming, the state could be making a big mistake if it mandates policies to reduce green house gases, a policy director at a conservative think tank told lawmakers this week.

"The global dynamics of climate change make it pointless, at best, and counterproductive, at worst, for the Texas Legislature to enact any mandatory (carbon dioxide) schemes," said Kathleen Hartnett White, director of the  Center for Natural Resources at the Texas Public Policy Foundation.

Her reasoning: United Nations scientists conclude that the problem is so massive that any response short of a comprehensive federal program would be ineffective.

Comments by Hartnett White, a former chairman of the Texas Commission on Environmental Quality, did not sit well with conservationists.

Ken Kramer, director of the Lone Star chapter of the Sierra Club, said that while its probably not possible to forestall some effects of global warming, doing nothing is also a mistake.

"Most people these days are definitely of the realization about what is happening and that we we need to do something about it," he said.

Hartnett White was speaking before the Select Committee on Electric Generation Capacity and Environmental Effects, which was created last year by House Speaker Tom Craddick.

-- R.A. Dyer

Railroad Commission candidate Henry questions charges

"Unbelievable" -- that's how Texas Railroad Commission candidate Dale Henry characterized recent revelations about hundreds of thousands of dollars in questionable legal and consultant costs by Atmos Energy.

The Star-Telegram reported Feb. 18 that those charges (which included more than $16,000 in potentially excessive hotel bills) will get charged to utility customers. Atmos attorneys and consultants were racking up those charges as they were litigating a 2007 rate case, even as the company was removing separate charges for expensive limousine rides and cases of wine.

The three-member Texas Railroad Commission recently approved a settlement agreement in the case that included the questionable bills. Henry said the elected commissioners should be exercising more oversight.

"If a utility's lawyers want to stay in expensive hotels and they can afford it, that's fine -- but that utility won't, in turn, be passing those costs onto its ratepayers when I'm on the Railroad Commission," said Henry.

Commission chairman Michael Williams, who is running uncontested in the Republican primary, said the agency could have opened a formal proceeding to dispute the charges -- but that would cost even more.

Most of about $1.7 million in questionable charges identified by an agency expert were rung up by Atmos, although the City Of Dallas billed for $186,000 without sufficient documentation. None of the questionable charges were from Fort Worth attorneys.

-- R.A. Dyer

Mr. King goes to Houston

PoliTex reported earlier that state Rep. Phil King, chair of the House Regulated Industries Committee, was to be collecting checks at a lavish fundraiser sponsored by Scott Rozzell, a top lobbyist for one of the major industries overseen by King's committee.

The fundraiser -- held last week in a tony neighborhood in Houston, about 300 miles away from King's home district of Weatherford -- did not escape the attention of local media. A Houston TV correspondent for the NBC affiliate, KPRC Channel 2, reported seeing a veritable "who's who" from the energy industry. She also suggested that King had not been too keen on returning phone calls.

"Is this the first time you're hearing that I've tried to get in touch with you? You didn't get any of those calls?" she asked.

"You know, we deal with the press everyday, so it may be the fact that you're -- I don't know if you're from Houston calling to where? Weatherford?" said King.

"Right. And you're in Houston collecting money from Houstonians," she said.

The TV reporter then asked whether King thought it a conflict of interest that he was collecting money from the industry that he's charged with overseeing. King responded that he doesn't take money from corporate entities -- an apparent reference to checks he gets from individuals, not corporations.

"Are we splitting hairs?" asked the TV reporter.

You may recall that CenterPoint lobbyist Rozzell also bought Super Bowl tickets in 2004 for King and his son, and Texas Railroad Commissioner Michael Williams and his wife. King, who watched that game from CenterPoint's luxury skyboxes at Reliant Stadium in Houston, earlier denied that CenterPoint paid for those tickets. He later acknowledged accepting them for free after being asked about lobby activity reports filed at the Texas Ethics Commission.

King is seeking re-election. He faces former Weatherford Mayor Joe Tison in the Republican primary. Texas Monthly's Paul Burka calls it "the most talked-about House race in the state."

-- R.A. Dyer

No tickets, no nothing from regulated industries

Texas Railroad Commission candidate Dale Henry, D-Lampasas, has jumped on R.A. Dyer's PoliTex item about Railroad Commissioner Michael L. Williams snagging some freebie Super Bowl tickets in 2004 from a lobbyist for CenterPoint Energy.

In a press release today Henry says: “The members of the Texas Railroad Commission should not take money from–and should not be beholden to–the industries they regulate. This is why I plan to, as Railroad Commissioner, ask the Texas Legislature to pass a campaign finance bill that will prohibit the practice of Railroad Commissioners accepting money from the industries they regulate.”

Steve Campbell

E-mailing former PUC chairwoman in the news again

Rebecca Amendariz Klein, earlier appointed by Gov. Rick Perry to chair the Texas Public Utility Commission, has received another gubernatorial appointment.

According to a statement e-mailed out Tuesday by Perry’s office, the Republican governor has named the former regulator to serve as presiding officer of the board of directors for the Lower Colorado River Authority, a central Texas electric, water and wastewater utility.

You may also remember Klein from 2004, when the then-outgoing chair of the Public Utility Commission was making another sort of e-mailed news: at the time, she was using her state computer to solicit business support for personal political purposes.

According to records then obtained by the Star-Telegram, Klein used her state e-mail account to send at least a half-dozen news releases touting her congressional campaign -- including one to a trade group with members that conducted business before the PUC.

In one e-mail, dated Jan. 19, 2004, and addressed to a telecommunications consultant, Klein wrote, “Here's the latest with what I'm doing, as of last Friday. Maybe [your firm] can throw a fundraiser:-).” In another, Klein wrote “don't know if you heard the latest (see attached)!” — and then she attached a Klein-for-Congress news release.

In that exchange, the director of an telecommunications trade group wrote back: “Good Luck. Our Federal [political action committee] will contribute. Let me know where to send the money.”

Most of the e-mails were sent a few days after Klein's official date of resignation from the PUC -- but while she was still at the agency cleaning out her office. Klein said at the time that she "didn't have another e-mail account,” although many of Klein’s e-mails referenced a personal AOL account.

When asked about the AOL account, Klein amended her comments, saying, “I don't remember when I set that (AOL) account up,” but explained that she didn’t have a campaign email account set up.

Klein was defeated in that District 25 race by Democratic incumbent Lloyd Doggett.

-- R.A. Dyer

Super Bowl Tickets Part 2

Last week, the Star-Telegram reported that state Rep. Phil King, R-Weatherford, had accepted free Super Bowl tickets in 2004 from a top lobbyist for CenterPoint Energy.

But King, R-Weatherford, wasn't the only elected official to have accepted CenterPoint's largesse.

The same 2004 lobby report from CenterPoint Vice President Scott Rozzell that shows free tickets for King and his son also shows free tickets for Republican Michael Williams and his wife.

King chairs the House Committee on Regulated Industries. Williams chairs the Texas Railroad Commission.  CenterPoint  has business before both.

Watchdog groups have said it's improper to accept such gifts because it gives the impression that policymakers are too close to the industries they oversee.

But Williams, like King, said he did nothing wrong. Both are running for re-election

"It's legal and it's ethical and it's consistent with state law," said Williams. "It was reported who purchased the ticket, who I went with, who went with me and so forth. Voters can make their own judgments."

King earlier denied to the Star-Telegram that CenterPoint has paid for his ticket. But after being asked about the old lobby report from Rozzell, King acknowledged that he accepted the freebie.

King faces former Weatherford Mayor Joe Tison in the Republican primary. Williams is unopposed in the Republican primary. However, three Democrats are vying for that party's nomination to run against him.

--R.A. Dyer

Another misinformed Railroad Commission candidate?

Earlier this week, PoliTex reported that Texas Railroad Commission candidate Art Hall was campaigning on an issue that has absolutely nothing to do with the Texas Railroad Commission. The 37-year-old Democrat had raised “railroad safety” as an issue on his website. But the commission gave up its last bit of authority over railroads in 2005.
Hall has since changed the erroneous posting.
However, another Democratic candidate, Mark Thompson, tells PoliTex that the Texas Railroad Commission has no control over home heating rates charged inside cities. “When you think about it, they don’t control rates in the cities,” said Thompson, 48, a resident of Hamilton.
Oh really?
Although cities have so-called "original jurisdiction” over cost-of-service gas rates charged within their boundaries, utilities like Atmos can appeal city decisions to the Texas Railroad Commission. The Railroad Commission conducts hearings, considers evidence and then makes rulings.
"If a city and a utility cannot come to an agreement over the rate, then the utility may choose to appeal to the RRC," said commission spokeswoman Ramona Nye.
Railroad Commission rulings can get appealed to the courts. Nonetheless, the agency's control over cost-of-service gas rates — both inside city boundaries, and outside them — must be considered one of its major areas of authority.

-- R.A. Dyer

Sounds like great news — but is it really?

According to a press release Thursday from the Texas Public Utility Commission, electric customers in Houston ”will save more than $109 million in costs over the next 12 years” because of relatively low bond rates associated with a type of financing known as securitization.

The press release notes that the rates are the lowest since electric deregulation began in Texas.

“Securitization will reduce electricity costs by millions of dollars in the CenterPoint service area,” said PUC chairman Barry Smitherman, referring to city's transmission utility. “These savings are possible through the ... leadership of the Texas Legislature in making necessary changes in the law to help electric customers.”

But not mentioned by Smitherman or the PUC is that also thanks to the Texas Legislature, customers in Houston’s CenterPoint Energy territory are on the hook for more than $2 billion in so-called "stranded costs," which are related to big ticket utility investments.

Again, that's $2 billion. With a B.

Geoffrey Gay, a municipal attorney with expertise in utility matters, said the PUC is crowing about savings that are a “drop in the bucket” when compared to the unfair stranded costs borne by Houston residents.

“While technically correct, the news release is misleading in that consumers are disadvantaged because of the path that Texas has followed — consumers (in Houston) would be far better off had they not paid stranded costs,” said Gay, who represents various north Texas municipalities before the regulatory agency.

The stranded costs in Houston are a function of the Texas electric deregulation law, which was adopted by state lawmakers in 1999. Because of a deal between city attorneys and TXU in 2000, residents in north Texas pay no stranded costs.

"It's particularly offensive to ratepayers to suggest that securitization is a benefit, when it is a means by which stranded costs are recovered," said Gay.

The PUC release notes that the securitization savings in Houston are the result of House Bill 624, which was approved by the Texas Legislature in 2007. The new law allows the expanded use of securitization only if there is a benefit for customers, according to the PUC.

-- R.A. Dyer

Misinformed Texas Railroad Commission candidate?

If there's one major state agency that's little understood by the public, it's the Railroad Commission of Texas. Despite its name, the agency has nothing to do with railroads. Instead, it regulates the oil and gas industry, and has authority over residential gas bills. It turned over its last bit of authority over Texas railroads to the state's transportation commission in October, 2005, according to Railroad Commission spokeswoman Ramona Nye. "It is correct to say the Railroad Commission has nothing to do with railroads," she said.

But that hasn't stopped one Democratic hopeful from campaigning on the issue. On his website, Railroad Commission candidate Art Hall lists "railroad safety" as one of the "issues important to the Railroad Commission of Texas."

"Rail derailment is a major issue in Texas," the website notes. "In the San Antonio area alone, there have been several derailments in the past few years which have threatened the lives and property of Texas citizens. We must do a better job of ensuring the safety of our families and children."

Hall, 37, claims a bachelor's degree from Harvard University and a law degree from Texas Tech. He is a former city councilman in San Antonio. When asked Wednesday about the erroneous website reference, Hall said that he had been made aware that the commission no longer has authority over railroads, and that he plans to take the reference down off his website.

"We need to change that," he said.

Mark Thompson, another Democratic candidate for Railroad Commission, has said the Texas Legislature should change the agency's name because the public has so many misconceptions about it.  The third candidate for the Democratic nomination is Dale Henry, 76, a retired chemical engineer from Lampasas.

-- R.A. Dyer