Who will pay for the dramatically increased energy costs associated with February’s winter storm? Energy companies want the state of Texas to borrow $6.5 billion to cover outstanding bills from the storm, with taxpayers footing the bill.
Dave Lieber writes “The Watchdog” for The Dallas Morning News. He told Texas Standard he discovered the planned borrowing by digging through a 292-page filing by ERCOT, to the Public Utility Commission, or PUC.
“This money is not going to fix the infrastructure,” Lieber said. “This money is going to pay companies’ debts.”
The debts were incurred when energy prices spiked during the winter storm. Lieber says energy companies say that without the money, they would be forced to pass along their costs to consumers in the form of higher utility bills.
Either way, Texans will pay the cost.
Natural gas companies are also seeking $3.6 billion in relief. Both proposals must be approved by the elected Railroad Commission.
The funds would be provided by selling bonds, a process to which voters would typically have to agree. But Lieber says the Legislature created a process that doesn’t require voter approval. It’s called securitization, and it’s been done before, but not in such large amounts.
“Whenever an energy company gets in trouble, we’ll bail em out with bonds,” Lieber said. “They have storm recovery bonds, disaster bonds, transition bonds.”
Lieber says the specifics of which companies benefit and how much isn’t a transparent one.
“There’s no press conferences, there’s no announcements,” he said. “You just have to go through the paperwork and add up the numbers and then check with the experts and make sure you’re adding everything up correctly.”
Lieber says taxpayers are on the hook because the energy lobby is powerful in Texas. Stopping the process would require the Railroad Commission, which he calls a “a very weak, spineless entity, run by the oil and gas industry.”
He also says it’s unlikely the PUC will stop the bond sale. “That train has left the station.”