When it comes to assessing penalties, state regulators at the Texas Public Utility Commission routinely settle for just pennies on the dollar. That’s according to the Houston Chronicle, which notes in a Sept. 26th article that the agency consistently collects fines for violations in the state’s electricity market that are significantly less than the amounts originally proposed. You can read the full text of the article here.
In one celebrated case a proposed $210 million fine against a major north Texas electric company was whittled down first to $171 million, then to $140 million, and finally to just $15 million. Although the agency crows that it was the largest fine it ever assessed, it’s actually so small that it even falls short of the company’s illicit profits in the case.
The penalty was also less than half the $57 million in estimated damages the company caused to the market. The case is referenced in the video, posted above.
Purva Patel
Speaking to the Chronicle’s Purva Patel, one consumer advocate likened the situation to a delivery truck driver double-parking. “It’s cheaper to pay a parking violation than to wait for a parking space,” he told the reporter. Another consumer advocate said the PUC will continue to lose leverage with bad actors unless it starts taking a more aggressive stance.
Consumer advocates have called upon the agency to step up enforcement, especially with regards to anti-consumer and anti-competitive activities. Otherwise electric competition can’t work properly. Consumer groups also have promoted legislative reforms, including proposed changes to state law that would give the PUC explicit authority to order restitution payments for those harmed by anti-competitive practices.
Consumer advocates also want to close a loophole that allows some power companies to freely engage in anti-competitive practices.
R.A. "Jake" Dyer
Is a policy analyst for TCAP, a coalition of cities and other political subdivisions that purchase electricity in the deregulated market for their own governmental use. Because high energy costs can impact municipal budgets and the ability to fund essential services, TCAP, as part of its mission, actively promotes affordable energy policies. High energy prices also place a burden on local businesses and home consumers.