Monday, July 9, 2012

Republicans Raise Your Prices, Bail Out Unprofitable Electricity Companies

Jack TernanBy Jack Ternan

Do you think you should pay more for electricity so that large Republican donors can stay in business? Your state government does.

In 2007, TXU was purchased in a $45 billion leveraged buyout by Kohlberg Kravis Roberts, Goldman Sachs, and other New York investors and was renamed Energy Future Holdings (EFH). EFH bet on coal powering our future. Unfortunately, the company now faces bankruptcy because cheap natural gas has rendered coal power plants unprofitable.

Fortunately for EFH, Republican leaders believe free market discipline only applies to the middle class and the poor. Rather than letting polluting plants close at a loss to Goldman Sachs, the Public Utility Commission (PUC) of Texas recently voted to raise the price cap on wholesale electricity by 50 percent. Starting in August, electricity generators will be able to charge $4,500 per megawatt hour instead of $3,000. According to the Texas Industrial Energy Consumers’ assessment, this change will cost consumers an additional $4.5-$4.7 billion per year on electricity costs.

According to PUC Commissioner Kenneth Anderson, who abstained from voting, increasing prices this summer will allow power companies to “cart away money, not in wheelbarrows, but in Mack Trucks.”

EFH knows how to grease the wheels of Republican government. Its affiliated PACs have given more than $6.3 million to lawmakers between October 2007 and May 2012. My opponent, Ken Paxton, has received more than $7,000 from them. Buying politicians is cheap compared to facing the consequences of bad business decisions, and this latest Republican bailout will ensure that Texas’ pay to play politics continues.

So what does this latest outrage mean for you?

It means that fixed contract you’ve signed with your retail electricity provider might not be “fixed.” It means that by 2013, when the price cap is expected to be between $7,500 and $9,000, you’ll be dishing out more money for electricity than you ever have before. And it means that you will be bailing out New York bankers who pollute your air while you do it.

The misplaced priorities of the Republican leadership are evil. Republican officials are willing to fleece you upwards of $4.5 billion ($9 billion over two years) to bail out EFH and its out-of-state owners. At the same time, they claim to be completely unable to find the $5.4 billion (over two years) needed to avoid firing teachers, closing schools, and cutting financial aid to college students. Here in Texas Senate District 8, we need leaders that will stand up for the priorities of all Texans, not out-of-state donors.

Jack Ternan is the Democratic Candidate for Senate District 8. To email Jack - click here.

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