The Galveston County Daily News is the oldest paper in Texas. Founded in 1842 by the Belo family, it was the predecessor of the Dallas Morning News. While the paper only serves a readership of some 60,000 people, it has a long history of staffing with Big Brains for reporters, editors and the publisher. Michael Smith, the assistant editor, is one of them. This is an editorial about how Texans were dooped by utility deregulation. I asked Mr. Smith for permission to share it in its entirety with you. -- Bill Cherry Truth hidden by the Chinese Wall
By Michael A. Smith
The Galveston County Daily News Published December 21, 2007 What's in a name? Sometimes a little fragment of truth. Back in the days just before deregulation of the electricity industry, caravans of free-market evangelicals traveled the state holding revivals out in the provinces where instances of skepticism and other heresies had been reported.
Their sermons were long and intricate and as beautifully nebulous as The Market's own shimmering, holy aura. The beginning was forgotten before they got to the middle, the middle gone by the merciful end. Almost all that lingered was the notion that only poor, lost and ignorant souls would question the plan.
Perhaps it was the passion with which the preachers built it, but one image remains - the Chinese Wall. A cleric from the Cato Institute may actually have wept as he described its awesome might - 18 feet thick, 25 feet tall, topped with shards of glass and concertina wire, patrolled by hawk-eyed guards and vicious dogs.
This supernal edifice was to be erected between the three basic units of the old regulated power monopolies - generation, distribution and sales. They would become discrete, autonomous entities.
To do otherwise would allow the pieces of the old regulated monopolies to collude, cut sweetheart deals and otherwise rig the game to undermine competition. Without the wall, we might end up with only the superficial appearance of competition.
The wall, however, now looks less like the great one in China, or even the Maginot Line, than a little chicken-wire fence around a tomato patch.
For example, when a group of investors recently bought TXU, it bought the power plants, the wires and poles, the sales, everything all in one deal. The new owners renamed the generation part Luminant. Oncor is the wires and poles. TXU now is just sales.
So, TXU never really had been broken up into the three parts like the sermons all said would happen.
It's a small truth pointing to what perhaps was only a small lie about deregulation.
But the small truths are adding up.
Prices didn't go down as promised; they went up. They always go up, even when the same market forces that drove them up - natural-gas prices, for instance - go down.
The list goes on and the question arises: How many small truths pointing to lies and failed promises are required to form one large, compelling truth? Copyright 2007 - The Galveston County Daily News All Rights Reserved |
