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In the never ending game of musical chairs the ownership of Texas power
plants has an interesting history. Houston Lighting and Power Company ( Old
Houston Electric Company owned by Stone and Webster) partnered with City of
Austin ( Austin Power) and Central Power and Light (CPL, now AES) to
build the South Texas Nuclear plant near Bay City Texas. The plant was being
built by Brown & Root ( now KBR) for an estimated cost of 1 billion dollars.
B&R failed to complete the project and Bechtol had to step in and finish it
for a small increase in cost of addn 4-
13 billion ( nobody knows the true figure but
Reliant's claim against the true costs rose over the years, what with lawyers
and lobbyists running up the costs).
Meanwhile back at the ranch, HL&P morphed into Reliant Energy ( now in
big trouble with the State of California for holding thier thumb on the
meat scales) and the musical chairs began in earnest in the US power
industry. The power companies took their problems to the local lobbyists and had
the State pass the " stranded cost bill" which means the State would allow the
power companies to increase rates the amount to recover the cost of" dumping"
the old obsolete polluting power plants that would cost more to clean up than
they were worth. So, in effect, with the state floating the bonds to provide the
cash to buy the plants( bonds would be paid from the increase revenue yearly,
everybody won except the rate payer.
In Texas, where no good deed ever goes unpunished, the power
companies got their money and plus"sold" the plants they
were " stuck with" ( stranded to the public) to anyone with the money
and desire. Enter several " front " companies spun off from Reliant
Energy..including Genco and Centerpoint.
Who is Genco? Why, they are the people that just bought 44% of the South
Texas Nuclear plant last week. HL& P once owned that equity and were the
most vocal about never being able to recover the cost of a nuke plant. Austin
Power bought out Central Power's ( now AES) interests.
When doing business in Texas watch the magician wave his wand and remember
W got his start here as the GOV when " the tune stranded costs" was put to
music. Poor Enron, Dynegy, El Paso etc. just thought they could take cards in
the game.
Tricks of the trade are catching and the great game is being played out
nationwide. Thats the state we are in with electric power production in the USA.
Its all about " capturing revenue streams" using somebody else's money.
Richard
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