By Dennis Herrera
[Originally published in the San Francisco Chronicle, Feb. 28, 2021]
Companies fixin’ to leave California for Texas just got a wake-up call.
Sure, taxes are cheaper in the Lone Star State, but as in most things in life, you get what you pay for.
Texas’ infrastructure and its leadership simply weren’t up to the task of dealing with a winter storm that was both historic and predicted. Besides killing at least 26 people and bringing misery to millions of Texans, this storm laid bare the painful cost of a free market electrical grid and the “Republic of Texas” ethos that eschews regulation and community investment.
Most of the electrical grid collapsed because the free market didn’t incentivize power companies to invest in maintenance, weatherization or reserve capacity.
Texas’ go-it-alone approach means it’s the only state in the continental United States to operate its own electrical grid and is unable to borrow power during emergencies from the two major power sharing networks in the country. (The border town of El Paso is an exception and was able to keep the lights on through assistance from the western regional network.)
Millions of people were without heat when natural gas fields froze up or couldn’t get enough power to operate.
Nearly half of the state — 13 million people — were under a boil-water advisory to get safe drinking water.
If that weren’t enough, Texas couldn’t even plow its side of Stateline Avenue along its border with Arkansas. Photos and video from the Weather Channel showed Arkansas had no such problem on its half of the road.
Some of the more fortunate who had intermittent power reported boiling snow and ice for toilet water. Other residents lucky enough to have power found themselves facing astronomical utility bills because of unchecked pricing schemes that tie some customers’ bills to the wholesale power price. One 63-year-old Army veteran’s electricity bill soared to more than $16,000 for the luxury of keeping power on during the storm.
This happened because of a lack of vision, a free market run amok and a state dominated by the fossil fuel industry, whose decades-long misinformation campaign has left many Texans still disputing the scientific reality of climate change.
Where is the vision, communication, innovation and long-term investment prized as key qualities of leadership?
It’s in California.
Of course, our state is not perfect. Far from it.
But we learn from our mistakes. California tried energy deregulation in the 1990s. We saw how private companies manipulated the marketplace to create an energy crisis in 2000 and 2001. Then we changed, addressed the problem of deregulation, and the California attorney general recovered nearly $7.5 billion from power companies.
Yes, PG&E remains a deeply problematic utility that is a convicted felon because of its unacceptable safety practices. It is being held to account in court and through regulators while also facing market pressure.
San Francisco has made a competitive $2.5 billion offer to buy the local power grid from PG&E.
The San Francisco Public Utilities Commission has provided safe and reliable electricity for 100 years. Today, the SFPUC serves all city buildings and some other customers, including San Francisco’s airport, general hospital and police stations. The city also created CleanPowerSF to purchase renewable power for 376,000 homes and businesses. With the greenhouse-gas-free power generated by the Hetch Hetchy Reservoir and clean power purchased through CleanPowerSF, the SFPUC already provides more than 70% of San Francisco’s electricity demand.
The SFPUC also has a long history of delivering pristine drinking water to 2.7 million people in the San Francisco Bay Area, much of it from an ingenious gravity-fed system from Hetch Hetchy high in the Sierra.
San Francisco has a routinely updated 10-year capital plan that lays out anticipated infrastructure investments over the next decade while keeping property taxes from going up.
Texans are fond of saying, “Don’t mess with Texas.”
That’s fine. But if you’re making long-term decisions about where to base your business, this past week was illuminating. Don’t count California out. Yes, California is more expensive. It also offers a commitment to innovation, clean energy and public infrastructure. There is business predictability, world-class universities, cultural vibrancy, cutting-edge entertainment and natural splendor.
I would suggest, “Don’t bet on Texas.”
Dennis Herrera is the city attorney of San Francisco.