Stage Three: Is Utility Deregulation the Answer to Austin Energy?

In a February 9, 2012 commentary from the Austin American Statesman written by Carla Penny, titled “Don’t buy into utility deregulation,” the contributor states her opinion in opposition to deregulating the city’s electric utility, currently supplied by Austin Energy. Penny’s argument asserts that deregulation will only drive costs upward for Austin electric consumers, especially the elderly, who typically use less energy. Another argument against deregulation includes a report from Texas Coalition for Affordable Power which found that Texas deregulated electric utility consumers pay higher electric utility rates than those in regulated electric utility areas. Lastly, the contributor claims that contracts from deregulated electric companies may include hidden excess charges in the contractual agreement, much like the cell phone monopoly, in trying to initially attract customers. She cites penalty examples such as not using a minimum amount of electrical usage, not maintaining a contractual agreement for a certain period of time and the solvency of a company to prevent it from going bankrupt. The author principally uses her reference to the Texas Coalition for Affordable Power report and her association with AARP, an organization devoted to the special interests of people 50 and over, to gain confidence from readers who are mindful of increasing electric rates and how it would affect their pocketbooks.

Conversely, a supporter of deregulating Austin’s electric utility is The Texas Conservative Coalition. Penny cites their one direct comment in opposition to deregulation. According to John Colyandro and Tom Aldred from this organization, it notes that "Providers in competitive parts of the state continually respond to market pressure." Her response to this comment is the assumption that publicly owned utilities have a greater responsibility to their local government in meeting the demands of its clientele for reasonable rates. If this were truly an unbiased commentary, I believe the author should have devoted an equal representation of facts and figures to substantiate her case for keeping Austin’s electric utility regulated. However, as a volunteer of the AARP Texas Executive Council, the author uses her skillful writing persuasion to convey the injustices that would be brought to Austin electric utility consumers if deregulation were agreed to. Furthermore, a thorough analysis and debate to weigh the strengths and weaknesses in deregulating the electric utility can only be done through careful process. Deregulation, as Penny points out, would negatively impact the targeted AARP group and intended audience of people on fixed incomes she represents.

Penny uses the fallacy of diversion by arguing against deregulation instead of bringing readers attention to the rate hike proposition by Austin Energy. Initially, Penny’s stance that deregulation is not the answer for Austinites seemed reasonable. However, the real issue of managing escalating electric rates is what needs to be addressed. Whether it can gather enough support from those in favor of deregulating and bring fair prices through market competition, will be contested vigorously on both sides of the issue and either solution will certainly not please everyone. Austin City Council will take a position on the issue of deregulation versus the rate increases recommended by Austin Energy. However, councilmembers may ultimately pay the price of reelection depending on which side they choose to take and how Austinites decide what is best for them.

Stage Two: Medicaid Enrollment on the Rise

On February 1, 2012, The Texas Tribune published an article titled Interactive: Enrollment in Texas' Health Care Programs Increasing.

Medicaid is a health care program that covers over three and a half million uninsured Texans on a limited income who are otherwise left without a safety net to receive proper medical care.

Health and Human Services Commission, which operates the program, is asking the legislature for billions more to cover its costs in the 2012-2013 legislative session. The agency has made budget cuts in services, expanded its managed care plans, analyzed and implemented ways to slash unnecessary expenditures after being mandated by lawmakers in the last session. However, lawmakers did not accurately project a substantial increased enrollment which is one reason why HHSC is now asking for these billions of dollars to cover its costs.

While the federal government pays the greater proportion of costs to HHSC, Medicaid accounts for approximately one-third of the state’s budget. With such a large share of its budget going toward Medicaid, this program is both a federal and state problem which must implement strategic measures to survive and help its needy clientele while not draining the Texas budget and overtaxing its citizens.