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Deregulation of electric utilities was a 'big mistake,' Bexar County judge tells Texas lawmakers after massive outages

“It is time to go back to the proven formula of utility regulation that Texas had prior to 1999,” County Judge Nelson Wolff said in a letter to the governor.
Credit: AP
A man crosses a bridge along the River Walk as snow falls, Thursday, Feb. 18, 2021, in San Antonio. Snow, ice and sub-freezing weather continue to wreak havoc on the state's power grid and utilities. (AP Photo/Eric Gay)

DALLAS — In a blistering review of the massive statewide power outages last week, Bexar County Judge Nelson Wolff said Texas should return to the “proven formula of utility regulation that Texas had prior to 1999.”

“We ought to be ashamed of how we handled ourselves down here. In the Northeast, Northwest, they have weather much worse than this and much longer than this and they manage to get through it. We’re down here, and we can’t even get through it for four or five days,” said Judge Wolff on Sunday’s Inside Texas Politics.

On Friday, Wolff sent a two-page letter to the governor stating in part that “deregulation led to ‘just in time power’ purchases from wholesalers without the incentive for storing back-up generation power. Energy producers are selling energy out of the state at a time when we needed power.”

“We find ourselves in a situation that puts profits first for utilities and reliability second. It is time to go back to the proven formula of utility regulation that Texas had prior to 1999,” he continued in the letter.

On the television program, Wolff was blunt.

“I think they made a big mistake back in 1999 when they threw out the integrated utility systems, when they threw out regulation. They broke up the energy sector into three different groups: transmission lines, retail sellers of energy and then energy producers. What we see today is a system that gives no incentive to provide reliability. It’s more focused on short-term profits. We weren’t ready for this. Now we see the consequences of it,” he explained.

In 1999, the Texas legislature unbundled the state’s integrated public utilities and deregulated public utilities. The legislation broke the power sector into three entities; those that produce electrical power, distribution and transmission owners and retail companies that sell electricity directly to customers.

Wolff said he’s doubtful a return to regulation will get much traction in the Republican-controlled legislature.

“I don’t know that they have the political will to stand up to the power of the energy producers, but I hope they will because this certainly has not been in the best interest of anybody in the state of Texas,” said Wolff, who has also served in the Texas House and Texas Senate.

Credit: WFAA

Despite multiple days of power outages in Arctic temperatures, Wolff said the San Antonio area still pushed through with thousands of vaccinations for the pandemic.

“I think over a two-day period, we vaccinated somewhere around 6,000 people this week.”

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