Convicted in Absentia
Everyone loves a good villain. Especially Texas lawmakers, who have always enjoyed heaping righteous indignation upon evil-doers before the captive audience of a public hearing. The classic example of this occurred a full decade ago, when former Continental Airlines CEO Gordon Bethune made a brief, but ill-advised, appearance before former State Rep. Paul Sadler’s Select Committee on Public School Finance to object to a tax proposal he felt would harm the airline. Bethune descended into the Capitol underground a well-respected corporate titan; he emerged a poster child for greed and indifference to public school children. Gordon Buffoon, they called him for months afterwards.
Since then, Bethune has held the title for most publicly vilified corporate executive at the Texas Legislature. But after today’s hearing before the Senate’s Business and Commerce committee, we have a new winner, albeit in absentia: John Wilder, CEO of TXU.
Troy Fraser couldn’t — well, didn’t — wait for TXU lobbyist Curtis Seidlits to finish his testimony on a package of bills directed at electric companies before he interrupting with questions about TXU profits since Wilder took the helm. Fraser abruptly cut Seidlits off, calling his testimony “all this crap you are laying out today.”
Behind the bluster were some damning facts about the company. Noting that TXU used a spike in gas prices to justify price increases, Fraser argued the company had scalped consumers by not lowering rates when gas prices receded. “You didn’t sell any more electricity, but you took in a billion dollars. You used that one billion dollar profit to browbeat your customers to lock in at record rates. If you do what is right by your customers, you need to drop the price.” Senator Keith Eltife jumped in with questions about Wilder’s compensation, and later provided the answer himself after a quick-thinking staff member found the information on the Internet. “He made $200 million over two years. What do you tell the customers who are struggling to pay their electric bills when your CEO made $200 million and it (his compensation) is tied to the stock price?”
An indignant Fraser added: “He has publicly said his responsibility is to his stockholders!”
All very good points, and yet, the piling on started to feel a little cartoonish. Dudley DoRight (Fraser and Co.) versus Snidely Whiplash (TXU).
All in all, not a swell day for TXU, as a judge dealt a blow to the company’s ambitious coal plant construction strategy. With environmentalists fighting hard against TXU at the Texas Commission on Environmental Quality, and affronted lawmakers vowing to shake up Texas’ electric deregulation scheme, it’s clear that TXU is the new enemy lawmakers love to hate.