Talk continues in Texas about massive debts racked up by companies and consumers during February's winter storm.
While some argue the state should rollback its artificially high peak electricity rates, others, including Governor Greg Abbott and House Speaker, seem to want stay the course and not give rate payers a helping hand.
”These people are responsible for what they did. If a drunk driver goes down the road and kills somebody, he's charged with manslaughter. These ERCOT directors and PUC are just as culpable as that,” said Russell Devorsky.
With the electric grid on the verge of collapse, ERCOT jacked up the price to the maximum allowed by law to get more electricity flowing, but it took power companies time to reach a point where everything stabilized.
Watchdogs say ERCOT overcharged `$16 billion and asked it to give more than $4 billion back.
”That was by order, and it can... that order can actually be undone to where all of the transactions that traded for a period of time are settled at a lower amount and some of these losses can be just paper losses,” explained Dallas Engineer and energy attorney, Chrysta Castañeda.
What are paper losses? It's not money you've made, but money you expect to make but won't for some reason. This way, the profit or loss only exists on paper.
While the governor sought to comfort voters about the Texas energy crisis, the Abbott administration showed a growing reluctance to take definite action, citing potential damage to the market.
Economist Ray Perryman admits that's a risk.
”It is difficult to undo what the market did, and it does send some very bad signals out there,” said the head of the Perryman Group.
He cites how New York City came to the brink of bankruptcy in 1975 as leaders revealed they didn't have the cash on hand to meet the city's debt.
Just the hint of insolvency, Perryman says, roiled the bond market for years after.
”It [New York City] ultimately paid its bonds, but because there was a vote not to honor a market commitment, it was years and years before many investors would touch New York again," he explained.
Gov. Abbott can't afford to have that happen to Texas, so he sent his last standing Public Service Commissioner to reassure the financial markets, bond traders and others that Texas would follow the rules of its electricity market and not re-write them to fit its current finances.
That would seem to effectively kill any chance Texans have of getting a rollback of ERCOT's price spike.
So in all this talk of paper losses and rolling back charges, where will the bill really end up? Where it always does. Experts say taxpayers will foot the bill for this massive failure, if not in taxes then almost certainly in higher utility rates.
According to the Wall Street Journal, Texans already paid a high tab. Since 2004, WSJ reports Texas taxpayers have overpaid for our deregulated electricity.
How much? The tab totaled $28 billion.
However, Perryman says deregulation has also brought benefits.
”The market has been very good. We've studied it has brought a lot of savings and efficiency and innovation to Texas, but there are a few flaws in this design that need to be addressed,” he said.
Some of those things include winterization of equipment and supply lines. Perryman even suggests power plants get paid for making a constant minimum of electricity to keep the distribution grid stable, something else that could add to our bills.
Bills that many of us have struggled to pay in the wake of our winter disaster. Russel Devorsky says that does nothing for Texans, some on the edge of bankruptcy .
”The elected officials on the state level that sent the ERCOT manager the PUC manager to Wall Street to say we're going to protect you, where were they to protect the 58 people that froze to death?" he questioned.
Something the families of those 58 people want to know, and something we all might think about before the next disaster.
