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THE TERM “POWER POLITICS” IS about to take on a whole new meaning in Texas. The Public Utility Commission issued a ruling in February that puts the state’s electric industry—now a collection of regulated monopoly companies—on a path toward deregulation and competition. The PUC ordered utility companies to “unbundle” their generating, transmission, and local distribution activities for account-ing purposes by the beginning of March. The idea is that in time each utility behemoth will break up into three distinct companies.
This restructuring will have a major effect on rates, although whether the cost of electricity will go up or down, and for whom, depends upon whom you believe. The pressure for deregulation comes from companies like Houston-based Destec Energy, which wants to generate and sell electricity and use existing transmission lines to get it to customers, and from large users (such as refineries, hospitals, and shopping malls), which think that competition will bring them lower rates. But the biggest utilities, Houston Lighting and Power (HL&P), Texas Utilities, and Central and South West, are fighting all-out competition. They contend that “customer choice” will only be a boon for “choice customers,” meaning that all the competition will be for big users, so residential customers are at risk to end up with higher rates. Another part of the PUC’s order changes the current practice of allowing each utility to decide what to charge other companies (such as Destec) that want to use its transmission lines. Instead, the PUC set a formula that will apply to most of the state. HL&P, along with city-owned utilities in San Antonio and Austin, is protesting that the cost to its regular customers will increase because of the formula—in HL&P’s case, by at least $35 million.
The fight between the utilities and their biggest customers is headed for the Legislature, which will need to give the PUC new authority before companies like Destec can sell directly to customers. But there’s no doubt where the PUC is headed. Governor Bush strongly favors deregulation, and PUC chairman Pat Wood, a Bush appointee, is committed to establishing a marketplace for electricity.
ONCE UPON A TIME, THE DEMOCRATIC primary for the U.S. Senate would have been a high-profile, high-emotion, high-stakes fight between the party’s liberal and conservative wings. Each side has a retiring congressman as its standardbearer—John Bryant of Dallas on the left and Jim Chapman of Sulphur Springs on the right. But the biggest news about the race is that it’s no news at all. Hardly anyone cares. The first public poll showed that the front-runner was Undecided. The candidate with the most support was Morales—not attorney general Dan, but former civics teacher Vic of Crandall. A second poll still had Undecided getting almost as much support as Bryant, Chapman, Morales, and former attorney general candidate John Odam combined.
Conservative Democrats have traditionally made the pitch that they can get things done for Texas, so Chapman likes to say that he knows how to work with Republican senator Kay Bailey Hutchison. Bryant’s message to partisan Democrats is the same: Chapman likes to say that he knows how to work with Republican senator Kay Bailey Hutchison. Neither candidate has raised enough money to run a major media campaign. Bryant is making the rounds of Democratic groups in the cities, while Chapman is spending most of his time in the more conservative rural areas. Early on, both camps were joking that they might be better off using their money to remind Hispanic voters that Vic isn’t Dan, just so their candidate could be sure of gaining a spot in a runoff. But apparently the voters have figured it out, because polls now show Morales dropping to fourth place.
So, do any of these guys have a chance of defeating incumbent Phil Gramm? Democrats are fond of comparing polls taken in January 1990 and January 1996. In 1990 Gramm had a lead over Hugh Parmer of 66 percent to 23 percent. This year, 47 percent of the voters polled were for Gramm, while 32 percent intended to vote for a Democrat; anytime an incumbent starts with less than 50 percent of the vote, there’s reason to worry. Moreover, Gramm’s disastrous presidential bid has provided the Democratic nominee with fodder for the fall campaign: missed votes, the pornographic movie flap, and a lot more exposure than his personality can stand. But Gramm will have three things going for him: a big edge in money, Bill Clinton’s continuing unpopularity in Texas, and the failure of the Democratic party to produce even one A-list candidate. Maybe Dan Morales should have run after all.