Many Denton customers were stuck with astronomical electricity bills under the green power “choice” plans.

Denton, Texas, population 140,000, located in the Dallas-Fort Worth metroplex, received national media attention for its $9,000 per megawatt hour ($9.00 per kilowatt hour) electricity price spike during the February 2021 Texas Freeze power crisis. 

Although not reported by the media as such, it was an unintended consequence of naive green dreams and “environmental justice” gone wrong.

“Green” Energy Planning

Home to two universities and a junior college, Denton is a Progressive Left city that:

• Banned fracking within its city limits (later reversed by Gov. Abbott)
• Contracted for 180 megawatts from the Blue Bell Solar Plant
• Recorded 40 percent renewables, partly by ending its contract with the now mothballed Gibbons Creek Coal Power Plant
• Built its own natural gas power plant (2018) to provide backup power to its customers and sell the excess into the ERCOT grid.

“In terms of affordability, availability and scalability – methanol and ethanol are the best prospects to [displace oil in transportation] quickly.”

– John Hofmeister, quoted in “Q&A: He Ran Shell Oil Co. – and He Thinks We Use Too Much Crude,” Houston Chronicle, September 19, 2014.

“Retired Shell Oil President John Hofmeister will say practically anything to get quoted in the news media, presumably in the hope of raising his public profile.” (John Donovan, 2016)

It was with some relief that I learned about the passing of a 1) oil executive who never should have been one; 2) mega-promoter who shamed his profession with vitriolic messaging; and 3) thorn in the side of free-market energy education.

Background

John Hofmeister (1948–2021) combined flawed views on energy with ultra-political correctness. How Royal Dutch Shell could have promoted its human resources director (1997–2005) to run Shell Oil Company (2005–2008) is a story of how one contra-capitalist act leads to another.…

Ed. note: This two-part series addresses repeated media errors about the role of Charles Koch in the formation of the Institute for Energy Research (IER) in 1989. Part I yesterday covered the history of the Institute for Humane Studies–Texas, the forerunner to IER. Part II below reviews the formation and early history of IER, then based in Houston, Texas.

Q1. Roger Donway: First, briefly summarize the major point of Part I yesterday on the founding of the Institute for Humane Studies–Texas (IHS–Texas), the predecessor to the Institute for Energy Research (IER).

A1. Robert Bradley Jr.: IHS–Texas was a classical liberal organization focused on education, with Greg Rehmke focused on high school debate and the both of us on summer seminars for business people. Energy was part of it to the extent that I lectured, given my specialization, on oil and gas history and related public policy.

“The physical operation of the grid can be separated from the economic decisions of what power is generated, transmitted, and sold at wholesale or retail in terms of quantity, cost, and price.”

“Mistakes by ERCOT or the PUCT or Texas legislature make my point–this is a planning failure, not a market failure. Not physics but economics. A historian is weighing evidence about this either being a market or government failure. It is a government failure writ large.” (Bradley, below)

Electricity is different. Power flows must the centrally managed. Ergo, regulators and politicians must manage the grid.

WRONG. The physical operation of the grid can be separated from the economic decisions of what power is generated, transmitted, and sold at wholesale or retail in terms of quantity, cost, and price. Companies themselves, vertically and horizontally integrated, what might be called electricity majors, is the opportunity cost of the present regulatory regime.…