Texas, the biggest electricity consumer in the U.S., faces a shortage of power to fuel its growing economy that may force the most extensive overhaul of the state’s competitive market since deregulation in 2002.
Houston consumers were supposed to get lower electricity rates from deregulation. Instead, they pay some of the nation’s highest prices, partly because of bonds Goldman Sachs Group Inc. recently sold for a local utility.
Bond investors are challenging the notion that the regulated transmission and distribution unit of the former TXU Corp., the electricity provider saddled with $36.7 billion of debt from the 2007 buyout by KKR & Co. and TPG Capital, will avoid being dragged down by its parent.
A blackout in Texas City, Texas, may be the latest in a series of power failures caused by lack of rain, which helps clear electrical lines of deposits, according to Terry Hadley , a spokesman for the Public Utility Commission.
Texas Governor Rick Perry is calling on the U.S. government to stop “picking winners and losers” among energy companies and has pledged to end federal subsidies to the industry. Under his plan, alternative energy businesses would likely lose a lot more than would fossil-fuel producers.