The following editorial published in the Houston Chronicle on Aug. 1:
Unless your stocking caps and heavy coats are stored somewhere you can see them regularly, you may find it hard to recall that less than six months ago, in the midst of a debilitating pandemic, many of us were contemplating the possibility of freezing to death. These days, with the summer sun withering grass and backyard gardens, with temperatures camped in the mid-90s, February’s winter storm seems like a bad dream, although continuing higher-than-usual utility bills for many Texans is a jolting monthly reminder that, yes, we lived through a two-week winter nightmare.
Some, of course, require no reminder at all. Their loved ones did not survive the storm that claimed at least 200 lives.
Winter Storm Uri cost us an estimated $293 billion in damages and some estimates put the actual death toll closer to 700. Nearly 5 million Texans lost power; many more went days without water. Remember?
One Texan who hasn’t forgotten is Dallas resident Kelcy Warren, although not because he worried that he and his family were in any danger. Warren, co-founder and now executive chairman of Energy Transfer Partners, lives in a 27,000-square-foot ivy-covered stone castle on nine acres in North Dallas. He bought his humble abode in 2009 for a reported $29 million. We can imagine that the heat stayed on in the Warren manse (or perhaps the family repaired to its private island off the coast of Honduras.)
What the pipeline tycoon remembers, we suspect, is not the nearly $300 billion that the storm cost Texas. It’s the figure $2.4 billion. As Justin Miller reports in the current issue of the Texas Observer, that’s the profit Warren’s company collected during the blackouts, a sizable portion of the $11 billion profit the natural gas industry as a whole collected by, in Miller’s words, “selling fuel at unprecedented prices to desperate power generators and utilities during the state’s energy crisis.”
Warren, a hefty donor over the years to former Gov. Rick Perry, former President Donald Trump and other Republicans, made sure that Gov. Greg Abbott didn’t forget either.
On June 23, Warren wrote out a check to Abbott’s reelection campaign in the amount of $1 million. That’s the biggest check Warren has ever given a Texas politician, according to campaign finance reports. And it’s four times the usual $250,000 gift that Abbott has gotten from his reliable Dallas benefactor nearly every year since he was elected governor in 2014.
It doubtless made an impression on Abbott, even though energy interests are his biggest political contributors, pouring more than $26 million into his political rise, the Associated Press has reported, citing an analysis by the National Institute on Money in Politics.
Warren, a small-town East Texas native who plays guitar and writes songs in the spirit of Jackson Browne, knows how the game is played. So does Abbott, of course. It’s only fair to ask what the billionaire investor got in return for his million smackolas.
The most obvious return on his investment probably wouldn’t have cost Warren a cent. That’s the continued, gingerly treatment that the powerful natural gas industry traditionally enjoys from state government, including from the current governor.
Following the regular session of the Legislature, Abbott signed into law a package of legislation that allegedly strengthened regulation of the state’s woefully compromised power grid. “Everything that needed to be done was done to fix the power grid in Texas,” the governor proclaimed at a bill-signing ceremony in early June.
It was hard not to laugh in the face of the governor’s faux-earnest remarks, particularly when the grid nearly collapsed again shortly afterward under the weight of early-summer heat. Everything was not done to fix the grid. Cosseting the utility industry, including oil and gas, was a higher priority.
Lawmakers approved more than $9 billion in bailouts for the electric utility industry, to be paid by ordinary utility users over the next two or three decades. By spreading the cost of the winter storm to all Texans over a long time, they’re betting the monthly add-on will be so small that folks won’t complain.
As former Chronicle business columnist Loren Steffy points out, Warren and the natural gas industry basically got a pass. They could have been winter-storm heroes.
In Steffy’s words, “They could have prepared better and worked with the Railroad Commission to ensure the gas kept flowing. Instead, it appears they chose to exploit it.” (Steffy does credit Energy Transfer Partners, Warren’s company, for taking the steps necessary to protect the system and keep gas flowing when many other companies didn’t.)
Elected officials not in thrall to money made off the misery of others would have addressed the energy needs of the people of Texas, not the millionaires and billionaires who help keep them in office. For example, they could have required generating reserves, so that sufficient power will be available, whatever the weather emergency. They could have ordered the Energy Reliability Council of Texas (ERCOT) to connect to the rest of the country, just in case. They could have restructured the market, so that both consumers and businesses have direct incentives to use energy more efficiently.
And they could have refused to make exceptions for natural gas companies on weatherization and set real deadlines. Instead, the Legislature required only gas facilities that are deemed “critical” to make changes, knowing that many gas companies failed to fill out simple paperwork in the past to be deemed “critical,” leading their own power to be cut during the winter storm just when they were needed most.
Edward Hirs, a UH Energy Fellow at the University of Houston, would give lawmakers an even bigger task. Hirs, who teaches energy economics at UH, has urged lawmakers to restructure ERCOT and the state’s Public Utility Commission (which oversees ERCOT), to make sure that board members and commission members have zero conflicts of interest. Lawmakers haven’t. Since the job is done, as the governor proclaims, they won’t.
Given the looming danger of climate change, neither the governor nor the Legislature can assure us that we won’t have to cope with another Uri, or that we’ll be ready for it. They can’t assure businesses considering Texas as home base that we can keep the energy flowing. Why not build that billion-dollar factory or ultra-modern corporate campus in Oklahoma or some other Sun Belt state that can guarantee a reliable energy supply?
Granted, taking on a thorough reform of the state’s energy system requires hard work, attention to detail, refereeing among a variety of conflicting interests. It’s much easier to punish and scapegoat renewable energy sources, bloviate about a border wall and concoct schemes to keep the wrong people from voting. It’s also much easier for elected officials to keep their sugar daddies happy.
Mother Jones magazine reported some years back that one of Kelcy Warren’s songwriting endeavors included the following lyrics: “Do you ever talk with angels? Put in a good word for me.”
We can’t confirm that. We can confirm that a politically ambitious governor we know talks to angel donors frequently, putting in a good word and more. Those angels keep him happy. The rest of us, meanwhile, probably should keep those winter coats and stocking caps hanging on convenient hooks.