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TIME TO PRIVATIZE AUSTIN ENERGY


Millions of Texans are experiencing electricity insecurity during this unprecedented winter storm. How tragic. I genuinely hope and pray that there are no deaths and that our economy is not terribly disrupted. I am fearful my prayers will not be answered in the affirmative.


There will be plenty of blame and finger-pointing, and, hopefully, good information on what went wrong and then good plans to avoid similar scenarios.


Numerous explanations are being floated, including:


1. Poorly weatherized electricity generation plants;

2. An over-reliance on “weather sensitive” power sources;

3. Inadequate spare generation capacity;

4. Inadequate “quality control” and "operating standards" regulation of electricity generation plants;

5. An Electric Reliability Council of Texas Board of Directors that resembles a "private club;"

6. Public Utility Commissioners with dubious credentials who either don’t know what they are doing, lack the statutory authority to assure that electricity generators can provide the electricity they promise, or lack adequate audit and investigatory staffs, or some sort of combination.


These are just a few explanations (and excuses) – and no doubt in the coming weeks there will be more. For certain, the health and safety of our citizens are at risk – you really cannot live in Texas without heat and air-conditioning. Similarly, to maintain economic growth, we must offer all businesses, including industrials, semiconductor manufacturers and everyone else reliable and affordably priced electricity. If not, our businesses will relocate elsewhere and new businesses will not come to Texas. All of that is pretty straightforward.


Austinites are dependent on Austin Energy, a city-owned utility. Unlike citizens in Fort Worth, Dallas, and Houston, we must buy our power from Austin Energy, whereas they can purchase electricity from multiple electricity providers. The result is, you guessed it, Austinites pay more than their counterparts in Fort Worth, Dallas, Houston, and elsewhere.


But you say, because we single source our electricity, our electric service is more reliable. But, indeed, our electricity is not more reliable, just more expensive. The Electric Reliability Council of Texas (ERCOT) oversees reliability – and ERCOT does not grant favoritism to Austinites merely because Austinites pay more than everyone else.


So what do we get by being under the “monopolistic thumb” of Austin Energy other than the obvious pleasure of paying more for electricity than anyone else –


Answer; ABSOLUTELY NOTHING


· Austin Energy did not provide us more reliable power than did anyone else – we just have the pleasure of paying more for a significant service interruption that was pretty uniform across the State.

· Apparently, Austin Energy has not been working with ERCOT to oversee system reliability – apparently, that is just not “Austin Energy’s job.”

· Apparently, Austin Energy doesn’t check the weather, etc., either. Austin Energy, seemingly, was even less prepared than ERCOT, at the very least no better.


The kindest thing that can be said about Austin Energy is that it is a “big, fat, dumb monopolist.” Its rates are set by the City Council of Austin, who is no better at this than the Public Utility Commission of Texas.


Set my people free – let us negotiate our own electricity contracts. It couldn’t be worse than what we currently have.


There probably is some value to Austin Energy to a private investor – lots of investors would like to own the power lines in the 10th or 11th largest city in the country that is probably growing faster than any other metropolitan area in the US. And the City Council can take all that "loot" from the sale and re-direct it into their "usual worthy projects." It is a "win-win" for everyone.


The Texas plan, for better our worse, is for de-regulated electric generators who compete with each other; a charge is made to maintain the power lines, and customers save money/control their energy costs by negotiating with competing electric service providers.


Except in Austin, Austinites don’t get to save money/control their energy costs – they are at the mercy of a city-owned utility.


Higher than everyone else electric rates are a cruel tax on those with low incomes. It is difficult, if not impossible, to live in Austin without electricity. And, ultimately, higher than everyone else electric rates will discourage economic investment. Like it or not, as nice as Austin is, there are other places in Texas (and elsewhere) to conduct business.

In conclusion, electricity reliability is serious stuff. If the City Council is using revenues from the sale of electricity for anything other than the provision of electricity, then "shame on them" - that is the ultimate regressive tax.


I genuinely hope that that the current crisis is not used for meaningless political pandering – and I hope that policy responses will not be influenced by a bias in favor of one energy source over another. It is really just too important.


But here in Austin there is one thing needed right now - LET MY PEOPLE GO!


by Jack M. Wilhelm


Edward Wilhelm and Jack Wilhelm provide tremendously high value legal assistance to a large number of very desirable clients.


THE WILHELM LAW FIRM, 5524 Bee Caves Road, Suite B5, Austin, TX 78746; (512) 236 8400 (phone); (512) 236 8404 (fax); www.wilhelmlaw.net


DISCLAIMER: The information on this site is not intended to and does not offer legal advice, legal recommendations, or legal representation on any matter. You need to consult an attorney in person for legal advice regarding your individual situation.

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Wilhelm Law Firm, 5524 Bee Caves Rd., Ste B-5, Austin, TX 78746 (512) 236-8400