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solar panelsLate last week, Austin Energy announced that it will bring contracts for two large new solar projects to City Council for approval at the March 20th meeting.  The contracts that Austin Energy is poised to sign, after Council approval, are for 150 megawatts of solar power from SunEdison and the price agreed to is nothing short of phenomenal.  At less than 5 cents per kilowatt-hour, Austin will have solar energy for the same price as electricity from natural gas generators.

Austin Energy predicts that this solar project will actually LOWER RATES slightly.  That’s right folks – we’re getting clean renewable energy AND lower bills.

These new solar facilities will be completed by 2016, and will provide Austin Energy with power for 25 years.  That’s 25 years of electricity at a fixed cost, something that simply can’t be obtained from a gas or coal plant.  When natural gas prices go up, so does that “Power Supply Adjustment Fee” on bills.  The beauty of wind and solar projects as that there are no fuel costs, so consumers are protected from unexpected price hikes.

Austin Energy should be commended for it’s excellent work in seeking competitive bids for this project and for capitalizing on an opportunity to contract for more than the 25 to 50 megawatts it initially planned for when it became clear that prices were lower than expected.  This significant Austin Energy solar expansion is big news, not just for the utility and the city, but for the state of Texas.

Show your utility some love on Facebook and Twitter (@austinenergy) for a job well done.  Use the hashtag #solarsaves.

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hands raisedGood governance advocates got a win at City Hall today when the Austin City Council approved a resolution to create the Austin Generation Resource Planning Task Force.  The task force will examine energy options and make recommendations regarding the 2014 update to the Austin Energy Resource, Generation, and Climate Protection Plan, which will be approved by City Council later this year.

A similar task force was instrumental in developing the original Austin Energy Resource, Generation, and Climate Protection Plan, which was approved in 2010 and advocates representing a variety of interests where dismayed to discover that a task force wasn’t part of the panned process this time around.  Luckily though, City Council saw the need for greater public involvement and worked quickly to approve a task force.  The resolution was sponsored by Council Members Tovo, Spelman and Morrison and passed on a 6 to 0 vote (Mayor Leffingwell was absent).

In addition to providing greater transparency and public involvement in the update process, the task force will afford an opportunity to more thoroughly analyze the the energy options available. The full costs and benefits of Austin’s energy choices, including climate change, air quality, water use, water contamination, health impacts, local economic development, and short and long term impact on rates need to be considered.

The task force will also provide a value able opportunity to examine what goals are being set and what programs are being implemented in other cities and states that could be favorably applied to Austin Energy. Carbon reduction and renewable energy goals and community solar and energy efficiency and renewable energy programs for low income customers deserve a closer look. Likewise, the task force will be able to gather more information on energy sources that are viable in Texas, but have been underutilized, such as concentrating solar power (CSP), thermal energy storage, compressed air energy storage, and geothermal energy.

The task force will be appointed by the end of March and will have three months to complete its work.  It’s meetings will be open to the public, so all will be welcome to attend.

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In a recent blog post, I reported on the completion of a large amount of CREZ transmission lines – infrastructure that incentivizes the production of wind energy – here in Texas. While the discussion around wind energy is usually around environmental responsibility, it is important not to overlook some of the more salient effects of wind energy – namely, consumer savings.

Photo from Renewable Energy Magazine

Photo from Renewable Energy Magazine

A recent report by the American Wind Energy Association notes that states that get more than 7% of their energy from wind have seen electric rates go down by .37% over the last five years, whereas all other states have seen a 7.79% increase in electric rates. Luckily, Texas is one of these 11 states that get more than 7% of its energy from wind, along with Wyoming, Oregon, Oklahoma, Idaho, Colorado, Kansas, Minnesota, North Dakota, South Dakota and Iowa.

There’s still more good news to come – as more wind develops in Texas, your electric bill could be lowered even more. Some reports show that when wind provides 14% of electricity, prices drop 10%, and when it reaches 24%, prices decline 15% .

Wind’s not just good for the environment, it’s good for your wallet, too.

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Smith’s Bill – HB1714 – Makes Perry’s Texas Even More of a Paradise for Polluters and is expected to be heard in the Texas House sometime on Thursday

Contact your representative (don’t know who that is . . . click here) and tell them to vote NO on HB 1714

On April 17th, an explosion at the West Fertilizer plant killed 15 people – mostly first responders, and injured hundreds more; that plant had been cited 5 times in 6 years by three enforcement agencies for failing to follow the law. Leaders of Texas’ environmental organizations called on state legislators to protect against the next environmental disaster by rejecting Rep Wayne Smith’s 1714 which would eliminate provision in Texas environmental law requiring more inspections and tougher enforcement for polluters who have poor record with the state or federal environmental agencies.

“Leadership needs to improve regulations, not weaken them further,” said Tom “Smitty” Smith, director of Public Citizen’s Texas office.  The Texas Legislature will consider HB 1714 by Representative Wayne Smith (R-Baytown) in the Texas House that would further weaken the permitting and enforcement processes.”

“HB 1714, would eliminate enhanced inspections of companies that have a history of environmental violations at a time when it is clear that the state and its citizens would benefit from having more scrutiny of companies that violate their permits. This bill would also reduce public disclosure of the state’s evaluation of company compliance histories, making it even more difficult to distinguish the bad actors from the good actors.”

“While the facility at West, TX may have been too small to have qualified for the enhanced inspections as the law is currently written,” continued Smith, “it begs the question, should we be weakening this oversight rather than enhancing it in order to prevent these types of tragedies?”

Years of state budget cuts and lax regulations have left communities at risk.

“The West Fertilizer incident shows how badly the TCEQ has failed to protect Texans under Governor Perry’s ‘paradise for polluters’ administration,” said Karen Hadden, executive director of the Sustainable Energy and Economic Development (SEED) Coalition.  The TCEQ failed to inspect the plant even after three state and federal agencies found five violations at that plant over the last six years. The plant was operating without the proper permits and failed to properly train their workers, label dangerous products or to develop a worst case accident plan.

“Texas has a program that is supposed to target companies that have poor compliance records with extra inspections. The West Fertilizer plant was “unclassified” – meaning the TCEQ didn’t take the time to look at the plant’s record. Had TCEQ inspected the West Fertilizer facility, we can only hope that they might have found the 270 tons of explosives at the site and 15 people might not have died.”

Budget cuts have real consequences. Over the last 4 years, funding for TCEQ has been cut back 34% and 295 employees have been laid off.

“TCEQ doesn’t have nearly enough inspectors for the number of facilities it is responsible for. Facilities are not routinely inspected and the agency’s response to complaints is far from adequate. In 2006, a nearby resident reported a gas leak at the West Fertilizer facility and it took the TCEQ 11 days to travel the 17 miles from Waco to West to follow up,” pointed out David Weinberg, executive director of the Texas League of Conservation Voters, and further illustrates TCEQ’s ineffectiveness.” (See westfertilizerinfo.com for TCEQ files)

As the events of the past two months have shown, the push to hasten the permitting process, weaken the regulatory oversight processes, and abandon due diligence and planning for both large and small industrial facilities has real life consequences.

Hadden said, “These disasters serve as a reminder of the necessity for strong and effective land use regulations, as well as proper enforcement systems to ensure public safety and prevent toxic releases into the environment.  Regulations that reduce the likelihood and size of industrial accidents protect workers, nearby neighborhoods and residents, and minimize the potential loss of life when accidents do happen, as they always will.”

“The Texas Legislature must act now to ensure existing and new regulations protect workers, communities and our state’s natural resources on which we all depend,” concluded Smith.

Contact your representative (don’t know who that is . . . click here) and tell them to vote NO on HB 1714.

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While Austin City Council continues to move forward with an ordinance to transfer governing authority of Austin Energy from our elected City Council to an unelected board, Austin democracy is being attacked at in the state legislature as well.  Senate bill 410, sponsored by Senator Kirk Watson and Representative Paul Workman, would allow the city to establish an unelected board without a charter election, as our city charter calls for.

The issue of who should govern Austin Energy is important, but it’s also local in nature.  There is no need for state to amend Austin’s charter.  That is a right reserved for the citizens of Austin.  If the changes proposed by City Council are truly in the best interest of our city, that case should be made to the voters and decided upon at the ballot box. 

To have a state representative who doesn’t even live in Austin carrying a bill to change our charter is unacceptable.

The Austin City Charter was adopted by the people of Austin and the people of Austin approved a governance structure for Austin Energy that is accountable to the people through elections.

An unelected board won’t be directly accountable to the ratepayers and wouldn’t necessarily represent our values.  As we debate this issue in Austin the unelected board at San Antonio’s CPS Energy is slashing the rate customers with solar installations will receive for their energy in half without first consulting the public or the solar industry.  Austin Energy customers could be facing similar changes if we don’t act now to protect our rights.

SB 410 has passed the Senate and will be heard by the House Committee on State Affairs tomorrow.

Please consider attending the hearing and speaking against SB 410.

What: Hearing on SB 410 to change Austin’s charter to move Austin Energy governance to an undemocratic board without a vote by the citizens of Austin, as our charter requires.

When: 1:00pm on Wednesday, May 1

Where: John H. Reagan (JHR) building, room 140 – 105 W. 15th St., Austin, TX, 78701

Why: Because Austin Energy’s governance structure will impact decisions going forward, including on renewable energy and energy efficiency programs and rates.  This is the decision that will determine how other decisions are made.

You can register against the bill at the kiosks outside of room 140.  Even if you don’t wish to speak, registering against the bill would be helpful.  We hope you’ll consider saying a few words about the value of local democracy though.  Speakers will be limited to 3 minutes each.

SB 410 is anti-democratic and is one more example of the state government trying to interfere with Austin’s internal policies and governance.

We need your help to stop this bill.

Public opposition to SB 410 at Wednesday’s hearing may be the only thing that can ensure that our Austin representatives don’t let this bad bill move forward.

Please email Kaiba White at kwhite (at) citizen.org if you can attend the hearing at 1:00pm on Wednesday.

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I was part of and witnessed an inspiring evening at Austin City Hall yesterday.  Engaged citizens came together to speak passionately about the importance of maintaining democratic leadership for Austin Energy, our city’s electric utility.

Many people talked about wanting the right to vote on a change in governance, about the importance of accountable leaders and about the need for multiple public hearings to discuss this important issue.  Others spoke about our utility continuing to invest in renewable energy and energy efficiency and maintaining our commitment to assisting low income families with their electric bills.  The voices were many and varied and the process took hours.

And we made a difference.

Several important amendments were added to the ordinance that, if they remain, limit the powers granted to the unelected board and increase oversight by our elected City Council.  Councilwoman Laura Morrison continued to be our champion on the Council, but Councilmen Chris Riley and Mike Martinez also emerged as allies on numerous amendments to lessen the negative impact of establishing an unelected board.  I commend them on their willingness to listen to the public and make changes to address some of our concerns.  (It should be noted that Councilwoman Tovo was in China for City business, but has also stood by the people throughout this debate.)

There is still a lot of work to be done to eliminate the threat of an unelected board, but it’s clear that public participation does make a difference.  And that’s our fundamental point.  We, the people, wish to retain our direct access to and influence on those who govern Austin Energy.  An unelected board wouldn’t be accountable to the ratepayers.

Please visit CleanEnergyForAustin.org to stay informed over the next week.  Email me at kwhite(at)citizen.org to receive email updates.  This isn’t over yet.

I remember the feeling of community brewing

Of democracy happening

~Ani Difranco

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If you weren’t already convinced that Austin would be misguided to hand over governance and oversight of our municipal electric utility, Austin Energy, to an unelected board, CPS Energy’s unelected board just provided a great example of what we can expect under such a regime.

CPS Energy on Tuesday proposed cutting the amount it pays for solar power generated from residential customers roughly in half, angering clean-energy activists and system installers who say the cuts would cripple the local solar industry.

“There was zero consultation with the solar industry in the development of this proposal,” said Lanny Sinkin, executive director of the advocacy group Solar San Antonio, who was made aware of the plan Monday night. “They’re going to kill the solar industry.”

Read the rest of the story on MySanAntonio.com.

Two important things to note:

  1. This is a bad, anti-environmental, anti-consumer policy change.
  2. No public input was sought prior to announcing this very significant change to CPS policy.

In Austin, we have come to expect that the public will be consulted on changes to our community.  An unelected board doesn’t fear political blow-back and will therefore be beholden not to the ratepayers (that’s you and me), but to special interests.  I don’t know who was behind this proposal at CPS, but it wasn’t the people of San Antonio.

Please, stop by City Hall and register against item #11 on today’s City Council agenda.  If you have time to say a few words on behalf of democracy, arrive by 4pm if you can.  Council doesn’t always run on time though, so even if you can’t get there until 5:00 or after, you might still get a chance to speak.

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You may have never heard of Property Assessed Clean Energy (PACE), but it has the potential to make a huge difference in adoption of distributed renewable energy systems, such as rooftop solar installations. PACE allows businesses to borrow money from local governments to work on energy efficiency and renewable energy projects in the buildings they occupy.

Since PACE is funding is loans, there is no real expense to the taxpayer.  On the other side of the coin, it allows businesses to spread out the costs of becoming more environmentally friendly over time, all while lowering their monthly utility costs.  This strategy is a win-win-win for Texans.  Business save money, the environment benefits, and it cost Texans nothing.

The Texas Legislature is currently considering legislation that would move PACE forward for our state.  Senate bill 385 has already cleared the hurdle of the Texas Senate, and now is pending in our House of Representatives. House bill 1094 is still waiting be voted out of the House Committee on Energy Resources.  The House should move forward to adopt this common sense measure.

As of 2013, 27 states and the District of Columbia have PACE legislation on the books to help combat harmful emissions from electric generation.  States from California to Wyoming have enacted PACE programs.  Generally, in these states, the financing terms are 15-20 years.  It works very much like taking out a home loan, or perhaps a better example would be a home improvement loan, but for commercial properties. Disbursing the payments over a longer period of time makes these efficiency upgrades affordable for a wider variety of business.  It also makes upgrades attainable for smaller businesses.

I urge fellow Texans to get in touch with their State Representative and tell him or her to support the PACE bills (HB 1094 and SB 385).  This is common sense legislation that benefits everyone.

Click here to find out who represents you. 

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It wouldn’t be a Texas legislative session without some truly backwards bills.  Today we have House Bill 2026 by freshman Representative Sanford of Collin county that would eliminate our state renewable energy goals.

BeachWindIn 1999, the state of Texas made a commitment to renewable energy in the form of the renewable portfolio standard (RPS).  That decision played a major role in spurring the development of the wind industry in Texas.

We have now exceeded the renewable energy goals established in the 2005 update to the RPS and Texas has more wind energy capacity than any other state.[1]  On the surface that may seem to indicate that the RPS has been 100% successful and is no longer needed, but that isn’t the case.

One of the major reasons for establishing the RPS was to encourage diversification of our energy sources, which ultimately makes us more resilient to physical and economic forces that can impact the availability and price of energy sources.  While wind energy has increased from zero percent when the RPS was first established to around ten percent today, other renewable energy sources are still largely absent from our energy portfolio.

With more solar energy potential than any other state, Texas should be the center point of the solar industry as well.[2]  Instead we are lagging behind states with far less solar resources, such as New Jersey and Pennsylvania,[3] and are paying the price in missed opportunities for job growth and new generation capacity that can produce during peak demand.

Solar companies invest in California and other states, because smart policies created attractive markets in those places.  California has 1,505 solar companies compared to Texas’ 260. Even New Jersey has more, with 382.[4] Texas should be doing more, not less to attract solar businesses to our state.

SolarInstallProjections showing that we won’t have enough electricity to meet demand by 2020.[5]  The maximum wholesale price of electricity has been set to triple by 2015, without even determining what the cost to consumers will be.  There have been workshops and meetings to consider the prospect of implementing a capacity market in Texas, which would raise costs even more.  But little time has been spent considering simpler, cheaper solutions such as expanding efficiency and demand response (where customers get paid to reduce there energy usage for short periods of time when demand is high) and getting more solar capacity built in Texas.  Solar is most productive when we need it the most – on hot, sunny afternoons.

The RPS should be retooled to focus on solar and other renewable energy resources that are most capable of producing during peak demand.  Millions of dollars could be saved in the wholesale electric market if we had more solar panels installed.[6]

Solar, like wind, also has the benefit of needing very little water to operate.  Solar photovoltaic (PV) installations need an occasional cleaning to keep performance high, but the amount of water need is minimal in comparison to fossil fuel options.  Coal-fired generators need billions of gallons of water to operate each year[7] and while natural gas-fired generations consume less water than coal-fired generators, they still use more than solar, even without accounting for the millions of gallons of water used to extract the gas with hydraulic fracturing.[8]  Including more renewable energy in our portfolio will make our electric grid less vulnerable to drought[9] and will free up water supplies that are desperately needed for human consumption and agriculture.

Abandoning the RPS now would send a terrible signal to renewable energy companies that are deciding where to establish their businesses.  Our state made a commitment that isn’t set to expire until 2025 at the earliest.  There is no good reason to abandon the policy now.  We should be moving in the opposite direction of what is proposed in HB 2026.  Instead of giving up on a policy that has been successful, we should be looking at ways to build on that success and benefit our state.


[1] AWEA. “Wind Energy Facts: Texas.” Oct 2012. http://www.awea.org/learnabout/publications/factsheets/upload/3Q-12-Texas.pdf.

[2] NREL. “U.S. Renewable Energy Technical Potentials: A GIS Based Analysis.” July, 2012. Pg. 10-13. http://www.nrel.gov/docs/fy12osti/51946.pdf.

[3] SEIA. Solar Industry Data. http://www.seia.org/research-resources/solar-industry-data#state_rankings.

[4] SEIA. State Solar Policy. http://www.seia.org/policy/state-solar-policy.

[5] “Report on the Capacity, Demand, and Reserves in the ERCOT Region.” Dec 2012. Pg 8. http://www.ercot.com/content/news/presentations/2012/CapacityDemandandReservesReport_Winter_2012_Final.pdf.

[6] Weiss, Jurgen, Judy Chang and Onur Aydin. “The Potential Impact of Solar PV on Electricity Markets in Texas.” The Brattle Group.  June 19, 2012. http://www.seia.org/sites/default/files/brattlegrouptexasstudy6-19-12-120619081828-phpapp01.pdf.

[7] “Environmental impacts of coal power: water use” Union of Concerned Scientists http://www.ucsusa.org/clean_energy/coalvswind/c02b.html

[8] http://www.ucsusa.org/clean_energy/our-energy-choices/energy-and-water-use/water-energy-electricity-natural-gas.html

[9] Wu, M. and M. J. Peng.  “Developing a Tool to Estimate Water Use in Electric Power Generation in the United States.” Argonne National Laboratory – U.S. Department of Energy. http://greet.es.anl.gov/publication-watertool.

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Would you decide who manages your retirement account by closing your eyes and pointing?  Probably not.

Press Conference RE: Austin Energy Governance 2-13-13Yet, Austin City Council is moving forward with a rash plan to hand over the bulk of its power to govern and oversee Austin Energy to an appointed board.  A well thought-out Austin American-Statesman editorial reveals the fool-hardness of making such a substantial governance change without even studying if it is needed or if the proposed change would yield better results than the current system of governance by the City Council.

This is one of those times when we need to remember that “the only thing we have to fear is fear itself.”  City Council (and a couple of our state legislators) have been reacting out of fear that Austin Energy, or parts of it, could be deregulated.  But, in light of the recent settlement reached with the out-of-town ratepayers, that is unlikely to happen.  We need City Council to stare their fear in the face and make a rational, fact-based decision.  Panicking now could cost our utility and our city for years to come.

Our city’s most valuable asset should be accountable to us, the citizens of Austin and the customers it serves.  Elections don’t always turn out the way I wish and some appointees do their jobs well, but I’m a populist, so at the end of the day, I want the power in the hands of the people.  With elections, we give power to individuals to do jobs an with elections we can take that power away.  An appointed board wouldn’t have to be responsive to citizen concerns and could make the vast majority of decisions about how Austin Energy is run and what to prioritize.

If, after studying the pros and cons of governance by City Council vs. governance by a board, City Council still believes that they are not the best people to oversee Austin Energy, an elected board would be a better option than an appointed board.

Let’s keep the power in our hands.

Tell Austin City Council not to approve an appointed board.

 

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While the proposed resolution to give Austin Energy governance responsibilities to an appointed board has been taken off the “consent agenda”, it’s still alive and kicking.

City Council will take up the issue at 6 p.m. this evening (Thurs, 2/14) and I hope you can take a bit of time before dinner to stand up for your rights. 

Austin Energy is a owned by us, the citizens of Austin.  Currently, we can influence the direction the utility takes by showing up at City Council meetings (just as I’m hoping you will tonight) and voicing your opinions.  The people of Austin have spoken passionately and convincingly on a variety of issues including development of strong solar energy programs,  assistance for the poor and keeping rates affordable for everyone.  City Council has often changed it’s course as a result of public outcry.  They do so because they know that they can be held accountable at the ballot box (or the electronic voting machine, as the case may be).

An appointed board could dramatically limit the ability that each of us has to ensure that Austin Energy is governed in a way that aligns with our values.

Some have argued that a board could focus more on the important issues at Austin Energy, but an appointed board is not the only option.  With City Council soon to be enlarged – when we move to the 10-1 system with geographic representation – there could easily be a subcommittee that focuses on the governance and oversight of Austin Energy.  If some members of City Council don’t wish to be burdened with the responsibility of governing our most (monetarily) valuable asset, then they could decline to serve on such a subcommittee.

Some Austin Energy customers who live outside Austin have complained that they have no representation in the governing body of Austin Energy (which is Austin City Council).  That’s a fair point and could easily be remedied by reserving one seat (or whatever is proportional based on population) on the subcommittee for an elected representative of those customers residing outside city limits.  What doesn’t make sense it to disenfranchise everyone just because some people aren’t currently represented.

Yes, the system could be more perfect and we at Public Citizen are always working toward making it so, but with all the awards and national recognition that Austin Energy has received, we must be doing something right.

So, please, make your voice heard at City Hall tonight.  The proposed resolution is “Item #46” and will be taken up at 6 p.m.  You can register to speak or register your opposition at the kiosks in the City Hall lobby.  You can donate your speaking time to someone else, but you must be present at the meeting to do so. If you drive, you can park in the garage underneath City Hall and get your parking validated in the lobby.

If you can’t make it to the meeting tonight, send City Council a letter letting them know you oppose the formation of an appointed board to govern Austin Energy.

For more information, please visit www.cleanenergyforaustin.org.

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Yesterday, Clean Energy Works for Texas – a coalition consisting of Public Citizen, Sierra Club, Texas BlueGreen Apollo Alliance, Progress Texas, Clean Water Action, Environment Texas, North Texas Renewable Energy Group, North Texas Renewable Energy Inc., SEED Coalition, Solar Austin, Solar San Antonio, Texas Campaign for the Environment and  Texas Pecan Alliance – filed a petition with the Public Utility Commission of Texas (PUC) asking for a rule-making to implement the non-wind renewable portfolio standard (RPS).

A law passed by the Texas Legislature in 2005 established that at least 500 megawatts (MW) of the electricity used in Texas would come from renewable energy sources other than wind by 2015.  The PUC, however, has failed to establish rules to ensure that this goal is reached.  Clean Energy Works for Texas calls on the PUC to fulfill its statutory duty and create rules to ensure that the goal is reached.  The petition also proposes and expansion of that goal to 3,000 MW by 2025.

The non-wind RPS would provide a level of certainty for investors considering Texas for clean energy projects.  While the wind industry has thrived in Texas, thanks, at least in part, to the RPS, other renewable energy industries have lagged behind.  Implementation of the non-wind RPS would send a signal to investors that Texas is open for business.   At at time when nearly a million Texans are looking for work, developing 21st century industries here in Texas should be a priority.

Texas has immense solar resources, as well as substantial geothermal resources that, if developed, could be providing the State with additional electricity that it needs.  Electricity market regulators and policy-makers have had numerous discussions about electricity generation shortages over the past year.  The petition filed by Clean Energy Works for Texas offers a solution – and it’s one that can be expanded upon in the coming years.

Please visit www.CleanEnergyWorksForTexas.org to learn more and send an email to to the PUC in support of the non-wind RPS.

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If you think that bonuses are supposed to reward success, you’re not alone, but the reality is more bizarre.  While Energy Future Holdings, formerly TXU, of Dallas continues its downward spiral toward bankruptcy, it’s handing out millions in bonuses to its executives.

The bonuses are called retention bonuses and are supposed to keep executive from fleeing the company as its prospects worsen.  At first glance, that makes some sense.  Recruiting replacements might be difficult.  After all, who is going to want to take charge of a failing company?  But then, who would want to hire an executive whose last job was running a company that failed so spectacularly?  And if bonuses increase as the company does worse, what incentive is there to improve performance?  Against the basic principle of capitalism, this system actually provides an incentive to fail.

Meanwhile, Energy Future Holdings is still making huge payments to the private equity holders that are responsible for over leveraging the company in the first place.  Henry Roberts Kravis, CEO of KKR received $30 million and his cousin and co-CEO, George Roberts received $29.9 million in compensation for 2011.  Clearly, the survival of Energy Future Holdings is not the main concern of either these private equity barons or the executives at the company, or else they wouldn’t be squeezing personal profit out of it when it’s floundering.

While employees at Energy Future Holdings and its subsidiaries may be worrying about what the future holds, those at the top are cashing in big.  No government payments or loans to the company or altering of the energy market will change that dynamic.

Don’t let your money be used to line the pockets of failing executives and private equity CEOs.

If you live in Texas, please sign our petition urging all Texas Legislators to oppose any public or ratepayer-funded bailout of Energy Future Holdings

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No Bailout for Energy Future HoldingsEnergy Future Holdings, formerly TXU, of Dallas might be looking for a handout – from you.

Back in January, Moody’s changed Energy Future Holdings Corp’s rating outlook to negative and made it impossible to ignore what anyone who had been paying attention to the company’s quarterly reports already knew: Energy Future Holdings is on a path heading towards bankruptcy.  Now there are rumors floating around that the company may ask the Texas Legislature to approve a public or ratepayer-funded bailout.

Neither option would benefit majority of Texas citizens and we urge everyone to sign our petition in opposition to any bailout proposal for Energy Future Holdings

You might wonder how the profitable TXU end up as the failing Energy Future Holdings.  The answer is twofold.

First, in Texas, electricity prices are set based on the price of natural gas.  When natural gas prices were high, this meant that coal-fired power plants could reap additional profit.  This made TXU an attractive acquisition because the company owned many coal-fired power plants.  But now, natural gas prices have plummeted and those same coal-fired power plants, especially the oldest and most inefficient, are dragging Energy Future Holdings down.  The private equity investors made a big bet on the wrong energy source.

The second problem is that Energy Future Holdings was acquired in a leveraged buyout.  What that means is that instead of the investors paying the full amount to buy TXU, they financed the deal partially through loans to the company.  While the company has done a good job of staving off the day of reckoning by refinancing many of those loans, many are approaching maturity and additional refinancing options are limited by the negative prospects for the company.

So, while TXU was a profitable company with relatively low debt, Energy Future Holdings is an unprofitable company (because of low natural gas prices) with massive debt (because of the leveraged buyout) that is approaching maturity.  This isn’t a good combination and some people are going to lose money on the deal (many already have).  However, those losses shouldn’t be placed on Texas taxpayers or ratepayers.

Tell your state representatives and senators that you oppose bailing out failed corporations.

Most of us have to live with the consequences of our bad decisions.  Help us make sure that Wall Street and private equity firms must do the same.

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Statement by Tom “Smitty” Smith, Director of the Texas office of Public Citizen

It’s time to unshackle Texas’ ethics watchdog and give it some teeth.

A recent study by the  Center for Public Integrity, Public Radio International and Global Integrity found that when it comes to government openness and accountability, Texas ranks in the lower half of all states.

While the language of the laws received a B- grade in the study, when it came to implementing the laws (or disclosing and enforcing them), Texas got a D+

Among the faults found in the study, four stand out as most egregious: The Lone Star State’s poor financial disclosure laws make it almost impossible to tell when an officeholder has a conflict of interest; lobbyists can make unlimited contributions to legislators to influence policy; contributors or their employees can be appointed to regulatory agencies – and adopt policies to benefits their business interests; and the revolving door is kept spinning by loopholes that allow government officials to go to work for the businesses they regulated or had legislative control.

While Texas should be performing better, the ethics commission isn’t to blame. It has been handcuffed since it started. Instead of policing the politicians, the watchdog is protecting them.

It is time for Texas to get tough on political crimes, stop protecting the politicians and treat the ethics commission as if it were just another professional regulatory agency. The commission should have the authority to take enforcement actions and hear complaints without needing to check in with a board of political appointees.

The Ethics Commission will undergo Sunset review this year. In advance of discussions about necessary reforms for the commission, which are slated for April 10, ethics watchdog groups will make public a comprehensive reform package. It’s time to give Texas the ability to rein in out-of-control, unethical behaviors.

Check out the excellent coverage of this issue by the Texas Tribune

Texas Gets a D+ in Public Integrity Study

Texas: The story behind the score

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