Plugged In
Fri April 13, 2007 5:35 am

I hesitate to tackle the subject of retail electricity, lest I reveal my imperfect understanding of the subject, or put readers to sleep, or both, but it was an important debate in a way that went beyond the substance of the issue. It was like the old days before the Republicans took over. There were bipartisan coalitions (Phil King and Rene Oliveira), bipartisan amendments (Eiland and Bohac), and intraparty strife (Oliveira vs. Sylvester Turner). The chair ruled evenhandedly. Voting took place on the merits rather than along party lines. I looked up one vote--the motion to table an Eiland amendment for a 15% rate cut, which failed on a 66-66 tie vote--expecting it to reflect party lines, and, sure enough, here were the names of those who voted to table, Republican after Republican: Anderson, Aycock, Berman, Bohac, Bonnen, Branch, Brown B., Brown F., Callegari, Chisum, Christian, Cook B., Creighton, Davis J., Delisi, Driver, Dunnam ... WHAT? Dunnam!

King went a long way toward rehabilitating himself from his dreadful management of the telephone dereg and PUC sunset bills last session, which landed him on the Ten Worst list. He compromised, he accepted amendments, he patted members who opposed him on the back, and in general displayed a low-key bedside manner, even when pushed to the limit by an aggressive Borris Miles. King went to the back mike to question authors of hostile amendments, a risky tactic that worked. He had to fend off a lot of pro-consumer amendments--imposing rate cuts, exempting senior citizens from having to put up deposits, curtailing utilities' ability to charge late-payment fees--that he said might hurt small REPs (retail electric providers) by reducing income or imposing costs. (I wonder how many small REPs there are, and how long they can survive in competition with the TXUs and Reliants.) King stuck to a simple message of promoting competition and keeping the maximum number of competitors in the market. For the most part, it worked. He generally stayed away from the TXU buyout, except to note that his perfecting amendment codified the agreements between the prospective buyers and the PUC. The debate revealed the House's schizophrenic attitude toward deregulation: It wants to have its cake (a competitive market that ought to drive rates downward, but hasn't, except for big customers) and eat it too (by mandating lower rates).

There were three major battles during the long debate. One was an effort by Turner to give the PUC authority to order a refund to price-to-beat customers (please don't ask me to explain this; all you have to know is that these folks have been paying the highest rates) based upon the lowest price offered anywhere in the state, supplanting a previous proposal by Oliveira. Their debate grew pretty heated, to the point that Oliveira shouted that Turner wasn't the only person who represented poor people. Both Turner's and Oliveira's proposals went down, clearing the way for Eiland's mandatory 15% rate cut for price-t0-beat customers, which was tabled by a 66-65 vote. Or was it? After verification and machine malfunctions, the tally was 66-66, which meant that the motion to table failed. Then the amendment was adopted by a comfortable margin.

The third issue, and King's biggest concern, was the requirement in the Senate bill of PUC approval of any sale, such as the pending TXU deal. He strongly opposes retroactive interference with mergers and acquisitions. The key test came on an amendment by Sid Miller and Charlie Geren to give the PUC prospective authority to approve or disapprove deals like the TXU buyout. King didn't like that either: "This is the vote everybody has been anticipating. Do we want approval by the PUC or just allow them to have a review process with substantial scrutiny [of the deal] but not final approval? My concern is that the PUC is not qualified to make decisions on a stock purchase." Instead of opposing the amendment, however, King worked out a compromise for a drop-dead period date (180 days) for the PUC to act, after which the deal would be deemed approved. This was one of several instances when he initially opposed an amendment but worked on a compromise that he could accept.

During the debate over the Miller amendment, Turner asked how many other states give their PUCs this authority. At least 47 other states, King responded. That was the cue for Leo Berman to rise to defend Texas's honor. "Would you agree with me that Texas has the best economy in the United States?" he asked King. "Is it fair to say that Texas had the largest surplus, coming into this session, of all the fifty states?" "Have we ever followed any other states with regard to our economic decisions?" "Why would we follow them, then, with this process that 47 other states are using, since we already have the best economy based on decisions that are made here in Texas." You're not going to catch Leo having any new ideas, no sir.

The overall result was a defeat for the eels (a popular nickname for the electric companies), something that doesn't happen often on the floor of the House. They are going to have to cut rates and submit to PUC approval of future acquisitions. Deregulation has eroded their political power by carving the old behemoths into three companies (generation, transmission, retail) and reducing their presence in local communities. Gone are the fishing trips for legislators to the fabled Honey Hole.

The vote on second reading was 132-1, with Merritt casting the only negative vote. But when the wholesale electricity bill came up next on the calendar, victory turned into defeat. King's old bugaboo reappeared: a valid point of order against his bill. He had to recommit the bill to committee.

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