TXU & TPG Spend $17 Million In Legislative Session

Did you wonder why bills that would regulate large power company buyouts and force TXU to sell off power plants, couldn't get passed in the last Texas legislative session? Well, the answer is money. TXU and its proposed buyer, Texas Pacific Group (TPG), wanted things just like they are, and they were willing to spend millions to see that no changes were made to current law.

The way current laws are written, both groups stand to make a killing. TXU officials will make a ton of money by selling the company. Its CEO, who has only been in office since 2004, stands to make $236 million when the company is sold. As for Texas Pacific Group, it will get to take over the unregulated "gravy train" that is TXU. Since being unregulated, TXU has charged some of the highest electric prices in the nation and reaped windfall profits.

The current lack of regulation makes this deal a win-win situation for both companies. The only losers are the consumers, who must pay the tab after it's all over. So it's easy to see why these two groups were willing to spend a few million dollars to see that the laws didn't change.

The two groups combined to spend $17 million during the last legislative session. They spent nearly $11 million in advertising to make it seem like the unregulated buyout along with unregulated electricity would be a good deal for Texas. That kind of money can buy a lot of good publicity.

But they didn't stop there. They then hired 86 lobbyists -- TXU hired 65 and TPG hired 21. The highest paid lobbyist was former Dallas mayor Ron Kirk, who was paid $351,000. That's pretty good money for a few weeks work. Since the House only has 150 members, that's more than one lobbyist for every two members (The regulation bill passed the Senate and had to be stopped in the House). They also spent $180,000 on entertainment and gifts for House members (including Spurs play-off tickets).

So if you're a TXU customer and couldn't understand why you've been paying some of the highest electric rates in the country, now you know. You're the one who gets to pay for all this. And those bills aren't going to come down anytime soon.

What The Hell Happened In Atmos Energy Case ?

When are Texans going to get tired of being screwed by the Republicans in our state government? This time it's the Texas Railroad Commission (TRC) doing the screwing.

Not long ago, the TRC's own hearing examiners found that Atmos Energy was trying to pass on expenses such as $800-900 hotel rooms, limo rides, cases of expensive wine and high-dollar meals at resturants, to their customers by using a fee tacked on to their gas bills. The fee was supposed to be used for new construction (and only for that purpose).

But I guess if you've got Republican buddies elected to the TRC, then you can break all the rules you want to and get away with it. The hearing examiners had recommended that Atmos be forced to cut their rates by $23 million to compensate for their misuse of fees. Instead, the TRC is allowing Atmos to raise its rates by $10 million. The new higher rates will begin in April.

But the bad news for Texans doesn't stop there. In addition to letting Atmos abuse its customers, the TRC has voted to shift more of the burden onto residential and commercial customers, and give the huge industrial users a break. This means that while you and I will pay more for our gas, industrial users will be paying significantly less.

I guess this shouldn't surprise any of us. Republicans have been stealing from ordinary Texans and funneling the money to the large corporations for years. This is just Republican business as usual.

But it does bring up this question. Why are they doing this? I can only think of two possible reasons - they are either incredibly stupid or they have been paid off. I don't think they're that stupid.

Burnam Seeks To Rein In Electric Costs

Well, Rep. Lon Burnam is at it again - fighting for us ordinary Texans. This time he is seeking to rein in TXU's exorbitant charges for electricity.

The national average for the cost of electricity to the consumer is 10.2 cents per kilowatt/hour. Meanwhile, TXU is charging 15 cents per kilowatt/hour as its standard rate. Does it make any sense that an energy-rich state like Texas must pay such high rates?

I have to think that one reason for the ridiculously high rate is the enormous salaries they currently pay their executives - over $50 million a year to their CEO. In addition he gets to use the company jet as his private plane. And that doesn't even count the hundreds of millions paid to their other executives.

Burnam's bill would attack this problem head-on. HB 1937 would mandate that any electric company that charges its customers more than 125% of the national average, must pay its executives minimum wage. Yes, he said minimum wage! I guarantee you that if TXU executives are paid minimum wage, they will quickly lower costs to the consumer to restore their enormous salaries.

The bill doesn't say the company can't pay a ridiculously high salary to its CEO. It just says they can't gouge their customers to do it. He does allow them one out. They could keep paying their executives hundreds of millions of dollars, as long as they put an equal amount of money into the System Benefit Fund, which helps low-income Texans pay their power bills.

Burnam says, "It's time for Texas' electric companies to act more responsibly. It is simply unconscionable to pay a CEO over $50 million in a year when low-income people are struggling with all-time highs on their electric bills. The Legislature could send a clear message to TXU's new owners that the state of Texas will not tolerate this kind of corporate greed.

The deal is not done. And it may not ever be. Two smaller buyouts of utilities were voted down by state commissions in the last few years.

For now, TXU is still a publicly traded company that took advantage of hurricanes to raise electric rates to unprecedented levels. They could have lowered those prices, but they instead chose to reap the profits and pay John Wilder over $50,000,000.

TXU is a poster boy for corporate excess. They need to be reined in."

I know there's little or no chance of this bill passing. Most of our state officials are too busy kissing corporate ass to worry about ordinary Texans. They have been bought and paid for by corporate interests.

But it's still a good idea.

TXU Buyout Could Save Texas Environment

TXU has not shown in the past that they have any interest in helping Texas solve it's pollution problems, even though they have been one of the major contributors to that problem. Their attorney recently said in court that global warming was the problem of president's and kings, and not TXU's problem.

In other words, they are only interested in greedy windfall profits, and care nothing about the environment of Texas or the health of Texans. They have no interest in being good and responsible corporate neighbors as long as they can pump up their profits and the price of their stock. But we may not have to worry about these greedy bastards much longer.

Two groups (Texas Pacific Group and Kohlberg, Kravis, Roberts & Co.) are trying to buy TXU. Even better, it looks like these groups ARE interested in being good corporate neighbors.

Last week I was very leery of this buyout proposal. After all, the common man is seldom helped when one conglomerate buys another. But right now, these two groups (TPG and KKRC) seem to be different. Rather than try to run roughshod over environmental concerns of TXU critics, they have sat down with them and actually had a dialogue.

They were not only willing to listen to the concerns of Texans - they were willing to compromise for the good of the citizens of Texas and for themselves. This is a remarkable change from the heavy-handed tactics of TXU.

In a deal expected to be announced today, the Fort Worth Star-Telegram is reporting that TPG and KKRC have agreed to:

* Build only 4 of the proposed 11 coal-burning plants that TXU wanted to build.
* Commit to cutting emmissions company-wide by 20%.
* Commit to slashing emissions of carbon dioxide to 1990 levels by the year 2020.
* Agree to support legislation capping the emission of carbon dioxide.
* Pledge to increase the amount of renewable energy sources in the company's portfolio.

This is a compromise that would be beneficial to the people and the environment of Texas. I don't know how well TPG and KKRC will live up to this compromise, but I know TXU isn't willing to compromise at all. I hope this buyout will happen, and will receive approval from the neccessary entities.

Alliance For A Clean Texas vs. TXU

A group of enviornmental organizations, known collectively as the Alliance for a Clean Texas [ACT], announced plans today to lobby the new Texas legislature to stop TXU and others from building up to 19 new coal-burning power plants. TXU is planning to build 11 of those plants.

TXU is trying to scare Texans by telling them the new plants must be built quickly, or Texas will suffer a shortage of electricity. Our governor, who has either been paid off or has fallen for the TXU propaganda gibberish, has "fast-tracked" the new coal-burning plants.

ACT wants the legislators to stop this fast-track process so a thorough study can be done on the pollution effects of the new plants. They believe a study will show the plants will increase pollution in Texas, including ground-level ozone. The DFW area is already having trouble meeting federal pollution regulations, and the new plants will only worsen the problem.

ACT believes Texas' energy needs can be met with solar and wind power combined with a more efficient use of our energy. TXU says this won't be sufficient to meet Texas' needs. I tend to believe ACT since their motivation is to clean up the air we all breath. TXU's motivation is bigger and bigger profits.

While I approve of ACT's program, I believe it ignores a couple of other clean energy options. Both of these options involve gasification.

A plant is being built near Stephenville that will turn cow patties into a clean-burning gas. There is no reason more plants of this type can't be built. Texas certainly has the raw material needed, and more is being produced every day.

The other option is the gasification of coal. We do have an abundance of coal in the United States, and the technology exists to turn this coal into a clean-burning gas. This would cost more than just burning straight coal, but it would result in a cleaner Texas for all of us. ACT is right that coal-fired plants would worsen Texas' pollution problems, but that doesn't mean that coal cannot be used in a cleaner way.

Wind and solar power and conservation may or may not be all we need, but if we combine these with gasification of coal and cow patties, I believe all of Texas future electric needs can be met without further polluting our air.

Business Leaders To Fight TXU's New Coal Plants

Things don't seem to be going all that well for TXU these days. They already had several enviornmental groups and several Texas mayors, including the mayors of Dallas and Houston, opposing their building of 11 new coal-powered plants. Now there is another group coming out in opposition to the coal-powered plants.

The Dallas Morning News tells us today, that a group composed of at least 20 of the most powerful business leaders in the North Texas area, have formed a PAC called Texas Business for Clean Air. The PAC was formed to oppose the building of TXU's 11 new coal-fired power plants, at least with the technology TXU is currently planning to use. These businessmen think that more pollution in an area that is already failing to meet EPA standards, could hurt economic development by boosting health care costs and making the area unattractive to workers.

David Litman, chief executive of Consumer Club Inc., said, "We are not against TXU. We are all for companies making money. But you've passed off some of your costs on the public in terms of dirty air, in terms of kids showing up at Children's Hospital. We think the plan TXU is proposing is irresponsible and is being crammed down our throats. We intend to lobby the legislature, and we intend to use whatever prestige and influence we have."

In the recent past, it has been easy for lawmakers, especially Republicans, to ignore activists and enviornmental groups. But this is a group they cannot ignore. These are powerful men. These are some of the men who fund political campaigns. They have access and will be at least listened to.

TXU needs to take another look at its current plan for the 11 new plants. There is better technology available. They would be better served to take the money they are spending on lobbyists and court costs, and invest it in cleaner technology for the new plants. Think of the good will and good public relations they could build by being a leader in the use of clean technology, rather than the polluter they are now perceived as being.

As Garrett Boone, chairman of The Container Store, said, "There's a myth out there that clean air and business are somehow at odds. This really is going to affect more than Texas. What TXU does could be a pattern nationwide."

Here are the leaders endorsing Texas Business for Clean Air:

Trammel S. Crow, founder, Crow Collection of Asian Art
Garrett Boone, chairman, The Container Store
David Litman, chief executive, Consumer Club Inc.
Wick Allison, publisher, D Magazine
Dick Bartlett, vice chairman, Mary Kay Inc.
Randy Best, chairman, Best & Associates
Stephen Butt, senior vice president, Central Market
Hal Brierley, chairman, Brierley & Partners
Edwin Cox, chairman, Edwin L. Cox Co.
Steve Durham, co-chairman, American Strategic Alliances
Roger Enrico, chairman, Dreamworks Animation
Howard Hallam, president, Ben E. Keith
Bill Hutchinson, chief executive, Dunhill Partners
Tom Lardner, Bright Sun
Aubrey McClendon, chairman, Chesapeake Energy Corp.
Liener Temerlin, Temerlin Consulting
Jay Wagley, managing director, CBRE Melody
Sam Wyly, founder, Ranger Capital