Perry's 3 letter session

Unbecoming photo courtesy of Capitol Annex


Landslide Rick ain't looking so good as of late. In what some are calling a 3 letter session -- from TYC to HPV to TTC to TXU (don't forget KKR) -- Gov. Perry is probably thinking of just one that starts with four letters. So far, his executive orders are falling short of their intended effectiveness, and his new appointment, Ed Owens, as TYC chair falls far short of the conservatorship that all 31 Senators asked for, via SR 384, on Wednesday's irregular evening session.

As Quorum Report reported half an hour ago:

A pair of House members, Democrat Jim Dunnam of Waco and Republican Tommy Merritt of Longview, went further, saying today’s action in effect let Perry off the hook on naming a conservator.

So if Gov. Perry won't go far enough, then who will? This afternoon, Lt. Gov. David Dewhurst and Speaker Tom Craddick issued a press release (Thanks TX Observer..) announcing a Joint Select Committee on the Texas Youth Commission (TYC), co-chaired by Sen. John Whitmire and Rep. Jerry Madden.

Just this minute (literally), QR reported that Travis County DA Ronnie Earle began an investigation today. This is certainly a hot-button issue -- such as some claiming that 'they're using state dollars to rape our boys' -- and much more fallout is expected.

Please see previous posts for HPV and TXU. I may do something on TTC soon, but shit it's Friday, closing in on 5pm. Look for something relatively soon though.

Recapping the Week

I know it's not Friday yet, meaning there's plenty of time for strange things to happen, but I figure it's a good time to recap what's happened this week.

First, the TXU deal was a shock to me, especially since I was convinced that they'd build all 11 of their plants, come hell or high water. They've now, after striking a deal with Environmental Defense and the Natural Resources Defense Fund, agreed to only three. Well, I guess if you're negotiating, you always want to start high so that you get only what you wanted in the first place. (TXU just didn't seem the type to negotiate in the first place..)

On Tuesday, Phil King and the House Regulated Industries Committee had their own (read: light) version of Sen. Fraser's lashings of TXU and CEO John Wilder. I was a little underwhelmed by their tough talking, such as King saying 'Some people want to put the toothpaste back in the tube and re-regulate the energy market in Texas' (I'm paraphrasing here) and Rep. Turner saying that if TXU is allowed to profit at the expense of ratepayers, then he'd "regret his vote in 1999," alluding to the vote to deregulate the market.

It was interesting, though, when Rep. Turner took his turn grilling KKR's Fred Goltz. First, Goltz said that they were providing a 10% price decrease to current customers, but Turner, and later King, pointed to the fact that this isn't a new price break since some customers are already getting the break. Then came the prospect that CEO Wilder may gain another $200 million from the deal. Not only did Goltz and Co. back down from addressing this, but they couldn't say just how much Wilder has made over the past 12-24 months. Last, Rep. Turner asked repeatedly if the TXU deal meant that only three plants would be built, and if KKR was willing to sign a moratorium saying so.

Although TXU's previous tactics included striking fear into state officials by saying that Texas will lack adequate energy to meet new growth, Goltz got up said that three -- not eleven -- plants was all TXU needs to stay above the reserve margin line. They did say that they'll increase their investments in alternative energy, but Goltz made it clear that this deal in no way limits them from building more coal plants in the future......


This meeting comes the same day as the Senate Business & Commerce heard testimony on SB 483, which limits market power of an energy company to 25 percent in each of the four main energy regions of Texas, and 20 percent overall in ERCOT. In North Texas, TXU is rumored to control upwards of 70 percent; minimum 45 percent. Fraser, rightly so, says this bill "increases competition."

It's obvious that Fraser and his colleagues such as Kevin Eltife are furious with TXU, saying that they're "pillaring" their customers, so I guess I wanted to see more from Regulated Industries. I mean come on, Phil King would never re-regulate the energy market. However, King did tell TXU that the Lege can pass some bills that would not favor TXU if he felt they weren't cooperating with him, and TXU responded by tacitly threatening their pledge not to sell TXU for at least the next five years.



Phew, that was longer than I thought it would be, but I guess coal plants are one of the biggest issues right now (I say that as I listen to the Senate Transportation committee's hearing on Trans-Texas Corridor). I was hoping for more space to give a shout-out to Paul Burka for his praise of the House yesterday since for once the debate didn't take place along party lines. I'd have to agree.

Rep. Gary Elkins has a bill that would call a special session if the Governor goes on another veto rage. Sen. Wentworth is carrying the companion in the Senate, which has yet to get a hearing. On a completely unrelated note, HB 1098 is now in Calendars, much to the delight of its 92 authors.

Capitol Annex has a post about a back-end deal for vouchers: autistic kids. Sen. Shapiro, the author of SB 1000, says that she expects a "zero" fiscal note, mainly since it has sunset provisions. I have a little cousin who's autistic, and no I don't think that he should get a voucher. Voucher would bankrupt the schools that the students would leave, so I'm thinking about the others left behind.

Two other main points of contention: this would simply be a gateway for vouchers for other disabled children, using them to pass an anti-educational program. And second, Florida has already tried a voucher bill for kids with autism, and it failed tremendously.

Three bills fast-tracked to floor

Tomorrow, the House will take up three bills, some new and not so new.

The biggest fight tomorrow may well be over HB 5, the enabling legislation for HJR 1 that provides tax relief for seniors and those disabled. The major fight won't be an ideological one (HJR 1 passed with overwhelming bi-partisan support) -- it's essentially over the May 12 vote. Some smaller municipalities are saying they don't have the funds to hold it, so there could be a multitude of amendments regarding this.

HB 3 is also up tomorrow. It's essentially the first section of last session's SB 3, the omnibus water bill. This session's HB 3 would create the Environmental Flows Advisory Group, which would mitigate the state's water uses for rivers, brooks, streams, bay, and estuaries.

Puente plans to offer an amendment to delay the reports by the science teams who would directly oversee the bays and estuaries, which should pass without much fanfare. However, there are other smaller amendments that would establish conservation and utility districts, and if I remember this correctly, these provisions are what killed SB 3 last go-round.

HB 8 is the third major piece of legislation up tomorrow, which would establish the so-called "Jessica's Law." It targets a minority within a minority: sexually violent offenders that target children. Sex offenders are only a tiny fraction of our society, and it would target the sickest of the sick and kill them. It seems to be more of a political stunt by Lt. Governor Dewhurst than anything though. Therapy for these sick souls is what's needed the most, but hey just do what ya can to keep them away from the kids.

Rep. Bonnen also has a bill, HB 542, tomorrow that would rename Brazos River Harbor Navigation District of Brazoria County to "Port Freeport." Why this is coming up right now is beyond me, but what's interesting is that this isn't on the Emergency Calendar -- it's on the General State Calendar. Something's up.

TXU now a bit shaken up

I was in the midst of writing a post about Gov. Perry signing SCR 20 on Friday, when I checked the news and saw all this hubbub about TXU's plans going up in smoke.

Last week, after Travis County District Judge Stephen Yelenosky ruled that Gov. Perry shouldn't have issued the executive order to fast-track the new coal plants, the administrative hearings for seven coal-fired plants that were supposed to start the next morning were delayed for four months.

Then came the news on Friday that Kohlberg, Kravis & Roberts (KKR) and the Texas Pacific Group are now bidding to buy out TXU. KKR has a speciality for buying out fledgling companies and turning them around to boost their portfolio and improve their standing in the stock market. In order to get the buyout approved, though, TXU has canceled plans for 8 of their 11 plants, due to the large opposition to these plants.

So far, environmental groups such as Environmental Defense, Public Citizen, the Sierra Club, and other local groups registered their staunch opposition from the get-go. Then along came natural gas companies, the Texas Baptists, Sen. John Kerry -- and Albert J. Huddleston, a pro-business Republican who helped finance the Swift Boat television ads that played no small part in Kerry's 2004 botched presidential run, and finally the Catholics piled on. What's that old adage about politics and strange bedfellows?

Seemingly, the opinions of the above groups and the barrage of news articles, and all the court proceedings led TXU to accept the bid from KKR and Texas Pacific late yesterday evening. The buyout, roughly $44 billion - $32 billion for the purchase, plus $12 billion in debt - is the largest private sector acquisition ever.

This shocks me on the one hand since they won't make nearly as much money from a potential cap-and-trade program as I'd thought or from ratepayers. The other shocking aspect is that TXU's fearmongering seems to fall flat: they had been saying that Texas needed these plants, or else. Energy shortages! Dependable resources! ¡Rolling blackouts! Actually, the hollowness of the need argument isn't all that shocking....

The other concrete outcomes of the bid agreement, in addition to withdrawing permit applications for eight proposed coal plants, Texas Pacific Group and KKR have agreed to:

• Terminate TXU's previous plans to expand coal operations in other states
  


• Endorse the U.S. Climate Action Partnership (US CAP) platform, including the call for a mandatory federal cap on carbon emissions
  


• Reduce the company's carbon emissions to 1990 levels by 2020
  


• Promote Demand-Side Management programs to reduce energy consumption
  


• Double the company's expenditures on energy efficiency measures
  


• Double the company's purchase of wind power
  


• Honor TXU’s agreement to reduce criteria pollutants in Texas by 20% (TXU’s 20% pledge was contingent upon approval of all 11 plants)
  


• Establish a Sustainable Energy Advisory Board, on which Environmental Defense regional director Jim Marston and Ralph Cavanagh from the Natural Resources Defense Council will serve
  

Regardless, the war over coal plants and Texas energy needs is far from over. TXU still has plans for 3 more plants, not to mention the 8 other coal-fired units that will be built by other companies. Stay tuned for more.