Wednesday, February 17, 2021

Dear Texans: A Little Socialism Wouldn't Be Such a Bad Thing


That image became one of my favorite memes when Republicans once again got obsessed with accusing Democrats of being "socialists" during the 2020 election—especially as someone who lives in the tundra, otherwise known as Minnesota. 

But with the brutal weather that is crippling so much of the country this week, an awful lot of people in red America are learning the hard way about the role of government in helping us survive when mother nature unleashes her fury. Nowhere is that more true than Texas, where blackouts have left many without power and heat.

While Governor Abbot is intent on blaming frozen wind turbines, the actual culprit is a bill that was signed back in 1999 by none other than former Governor George W. Bush that deregulated the electricity market. 

As everyone scrambles to point fingers about the current crisis, lets go back to an article written by Loren Steffy at Texas Monthly in 2014. Apparently this isn't the first time the state has experienced blackouts as a result of extreme weather.
Just after seven a.m. on January 6, as Texans awakened to one of the coldest mornings in years, an email and social media alert went out from the Electric Reliability Council of Texas: “Reduce electric use now. Risk of power outages exist throughout Texas. Power warning in effect.” The last time a hard freeze gripped Texas so tightly, in February 2011, power blackouts rolled across much of the state as ERCOT, which operates the state’s power grid, struggled to meet the demand. Then, just as in January, power plants unexpectedly went offline when the state needed them most. This time blackouts were averted, but barely.

This isn’t the free-market wonderland that lawmakers envisioned back in 1999 when they voted to deregulate electricity, turning most of the state’s power system over to private companies. That decision, which was helped along by some arm-twisting from Houston’s Enron Corporation, was supposed to result in a robust market, thriving with competition, which would drive down prices for consumers, unleash a host of twenty-first-century innovations, and boost reliability by encouraging newer—and greener—generating plants...“Competition in the electric industry will benefit Texans by reducing monthly rates and offering consumers more choices about the power they use,” said a euphoric Governor George W. Bush.

First of all, Bush's promise of lower monthly rates didn't turn out to be true. According to a 2014 report by the Texas Coalition for Affordable Power (TCAP), "deregulation cost Texans about $22 billion from 2002 to 2012. And residents in the deregulated market pay prices that are considerably higher than those who live in parts of the state that are still regulated." There are several complicated reasons for those increased costs. But one of them is especially pernicious. With profit as the only goal for a deregulated industry, the possibility of gaming the system was unleashed.

On a typical day, power on the wholesale market sells for between $30 and $100 per megawatt hour. But during January’s cold snap, prices spiked to $5,000. At times like that, generators make big money, which creates an incentive to withhold power from the market. “They know if they hold back and get into real shortages, they will reap tremendous rewards,” Hirs says. Electricity traders have raised questions about suspicious activity that suggests withholding has been going on, but no one has proved anything. What we do know is that the free market isn’t responding the way the architects of deregulation expected. The market doesn’t care if your AC isn’t running in August.

But deregulation didn't just cost Texans money. Steffly goes on to describe how the break-up of electricity monopolies—a major part of the deregulation process—created a far more complicated system for the state to oversee. It also failed to provide incentives for building backup plants to be used during times of peak usage. Both of those are major contributors to the current spate of blackouts that are happening across the state.

What we are witnessing in Texas is yet another example of how the Republican agenda has always been built on lies. Deregulation doesn't unleash the power of competition and reduce costs. Much like their tax cuts, those who benefit are the wealthy, while the rest of us pay the price. 

8 comments:

  1. Biden had no problems approving emergency declarations and the federal government is moving in generators. If it was a hurricane, the gov. would have asked for an emergency declaration before the storm hit.

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  2. Still smarting at the media's buy-in to the Fox and wingnut line that the problem was renewables rather than good old fossil fuels. The Times on Tuesday, as many have pointed out, ran with the line about frozen wind turbines, and its wrong.

    Then on Wednesday it described the real problem, the effect of the weather on natural gas and other reliance points in the power grid. It mentioned wind power only in passing, and only to say that it was not the problem. Tomorrow morning it devotes a full article to debunking the claim.

    This isn't just "balance," but another repeated problem we need to recognize. In part, it's just so easy. Does the right make a claim? The article then writes itself. No investigative work needed. It's also catchy and provocative, maybe especially because it's implausible, earning hits. (Man bites dog!) And assessment can wait for another day. Besides, that other day means more stories, filling the quota.

    It's the paper's MO, and it's not confined to politics either. It's just as pronounced where you'd think objectivity is a given, in science and health. A study reports, well, whatever. (Scientists aren't in general able to take time for self-publicity, but a university's press office is.) Then there can be the opposite conclusion a week later, and maybe eventually an article, with obvious appeal, for what "you" should really do.

    It's one freebie article after another. Gretchen Morgenstern's exercise column is an obvious example. We've read in the last few weeks that only bursts of high-intensity exercise matter and that, implausibly, you can complete them all in 5 minutes, that endurance is what matters, and today that however modest, the more of whatever is what helps. Covid-19 is an opportunity for oodles of the same, for those wealthy Times reading eager to look for the slightest difference (should I wear two masks?) to be a good person and a good parent, while the worst spread comes from big gatherings by people, including Trump supporters and other denialists, who could care less about any rules whatsoever. But hey, for the Times, it generates content and pays the bills.

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    1. I know I'm taking way too much of this space, undeserved. But I'll add that there were other ways the Times could have handled this without even leaping on a position. It could have phrased the line in the first article as conservatives blame so-and-so, but experts are still evaluating what went wrong. And it could have, in mentioning the issue in the second article, have admitted that "the Times reported" such-and-such, but it appears to be wrong. But guilt isn't in its system.

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  3. Former TX governor and Trump's energy secretary:

    “Texans would be without electricity for longer than three days to keep the federal government out of their business!”

    -- Rick Perry

    It's the same old libertarian mantra: deregulate and privatize everything, let profiteers do whatever they want and let the free market do its magic. There's a reason why the hand of the free market is invisible -- it's picking your pocket.




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    1. Texas has no problem asking the Federal Government for monetary help though.
      Also, as a Californian, it does feel weird though seeing Texas hoisted n its own petard.

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  4. Here are the kinds of politicians that Texans elect:

    COLORADO CITY, Texas — Colorado City Mayor Tim Boyd has resigned.

    Boyd acknowledged the resignation Tuesday afternoon while responding to criticism he received for a controversial Facebook post.

    "No one owes you or your family anything; nor is it the local governments responsibility to support you during trying times like this! Sink or swim, it’s your choice! The City and County, along with power providers or any other service owes you NOTHING! I’m sick and tired of people looking for a damn hand out! If you don’t have electricity you step up and come up with a game plan to keep your family warm and safe. If you have no water you deal with out and think outside of the box to survive and supply water to your family. If you were sitting at home in the cold because you have no power and are sitting there waiting for someone to come rescue you because your lazy is direct result of your raising! Only the strong will survive and the week will perish. Folks, God Has given us the tools to support ourselves in times like this. This is sadly a product of a socialist government where they feed people to believe that the FEW work and others will become dependent for handouts. Am I sorry that you have been dealing without electricity and water; yes! But I’ll be damned if I’m going to provide for anyone that is capable of doing it themselves! We have lost sight of those in need and those that take advantage of the system and mesh them into one group!! Bottom line, quit crying and looking for a handout! Get off your ass and take care of your own family!

    "Bottom line - DON’T BE A PART OF A PROBLEM, BE A PART OF THE SOLUTION!"

    https://ktxs.com/news/local/colorado-city-mayor-resigns-after-controversial-facebook-post

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    1. Of course, such notions of responsibility don't extend to the utilities, much less the fossil fuel industry in Texas. They're people only to the extent that they can finance (Republican) campaigns.

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  5. Nancy's well-written article does something that few similar reports today have done: she points out that the deregulation of vital industries (a key element of Republican orthodoxy) ... "created a far more complicated system for the state to oversee. It also failed to provide incentives for building backup plants to be used during times of peak usage." It goes without saying that parallel problems are likely to exist in the water supply systems, in the road construction/maintenance systems, in the management of other 'public' entities such as schools, hospitals and public health/fire protection. Deregulation has shown itself time and again to be nothing but a boondoggle for the corporations, and as such, easily manipulated and pillaged by them at public expense. Much of Texas's problems today are a result of the false image of 'Texas exceptionalism'.

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