.The Texas Energy Report

July 6, 2023 — Investor-owned electric and gas utilities paid their CEOs $3.2 billion between 2017 and 2022, according to corporate data reviewed by the Energy and Policy Institute.

CEOs for the 57 companies reviewed for this analysis received more than $578 million in 2022. Total utility CEO compensation declined from last year, as it did for most other major US companies. Large portions of CEO compensation depend on company stock prices, which fell in 2022 for most companies. “The decline marks the first time in a decade that compensation for top executives at the biggest U.S. companies didn’t reach new highs,” the Wall Street Journal reported.

Top paid CEOs led utilities implicated in scandals

The highest paid utility CEO in 2022 was NextEra Energy’s James Robo, whose compensation totaled $40.4 million after retiring in July 2022. The company also paid incoming CEO John Ketchum $17.4 million in 2022, for a total of $57.8 million to both CEOs during the year.

Exelon CEO Christopher Crane received the second highest compensation at $30 million, while Southern Company CEO Tom Fanning received $24 million.

All three of those top paid utility CEOs retired during the last year, and all three oversaw utilities whose subsidiaries have recently been implicated in high-profile scandals. NextEra subsidiary Florida Power & Light paid millions of dollars to consultants who helped to run spoiler candidates in Florida State Senate elections. Exelon subsidiary ComEd agreed to pay $200 million three years ago to resolve a federal criminal investigation into a years-long bribery scheme as part of a deferred prosecution agreement. A federal jury recently found four former ComEd executives and associates guilty for bribery, record falsification, and conspiring to influence and reward the former Speaker of the Illinois House to assist with favorable utility legislation. A long-time consultant for Alabama Power, a Southern Company subsidiary, conducted surveillance of Tom Fanning “to influence corporate decision making and succession planning for his own benefit and at the direction of executives of Alabama Power Company,” according to a court filing by a former employee of the consultancy….
 

In southeastern New Mexico, horizontal wells in Lea and Eddy counties drove much of the recent growth in Permian Basin crude oil output. Output from horizontal wells in the two counties accounted for 29% of all crude oil production in the Permian Basin in the first quarter of 2023, averaging 1.7 million barrels per day (b/d), according to data from Enverus. The Permian Basin is the largest oil-producing basin in the United States, spanning 66 counties in southeastern New Mexico and western Texas…..
 

July 5, 2023 — State of Texas production tax income from natural gas dropped 58% year-over-year last month, according to the latest figures from Comptroller Glenn Hegar.

The natgas production tax brought in $184 million during June; oil production tax gathered $456 million, down 33% from June 2022.

Motor fuel taxes totaled $324 million, down less than 1% year-over-year, with motor vehicle sales and rental taxes up 2% from a year ago, at $597 million.

Yet Mr. Hegar stated upon releasing the figures, “Receipts…
 

NOTE: D. Alex Mills enlisted in the U.S. Army Security Agency in 1966 and was discharged in 1970. He lives in Wichita Falls, Texas, but he has family in the Kalamazoo, Michigan area. Through his family’s non-profit  O’Leary Foundation, Mr. Mills was asked to participate in an honor flight.  This is his report.

By D. Alex Mills

On a chilly Saturday morning in May, I had the honor and pleasure of accompanying 87 other veterans on an honor flight to the nation’s capital.

The emotional journey, organized by Talons Out Honor Flight, began at 4:30 a.m. with our arrival at Kalamazoo, Michigan Airport. Amazingly, some people were there and cheered and shook our hand during our arrival.

We registered, got our picture taken, got a sack breakfast, and waited to board the airplane for the nation’s capital. About an hour later a young lady announced that we were ready to board our chartered flight courtesy of American Airlines, but first we were going to sing the national anthem. As we began to sing, some saluted, others removed their caps and placed them over their heart and everyone sang together. Very moving.

Most of the veterans – 74 – served during Vietnam and 11 served during Korea and 3 during World War II. A majority of the vets served in the Army followed by Navy, Marines and Air Force.

Also, each veteran was accompanied by a family member or friend, called “guardian,” who was assigned to take care of us if needed because about one-third of the vets were in wheel chairs and most of the remainder of the group probably had not walked the six miles or so we encountered on the one-day tour. My guardian was my great nephew, C.J., who served in the Marines in Afghanistan.

The hour-and-fifteen minute flight received a water cannon salute in Kalamazoo and again at Washington Reagan Airport. Very impressive! The respect given to these soldiers, sailors, and airmen who served many decades ago brought tears of joy.

The weather in the nation’s capital was overcast, but cloudy skies and drizzling rain was not going spoil this day for these guys and ladies. By the way there were 3 women veterans in the group.

A short bus ride to Arlington National Cemetery and we arrived at the Tomb of the Unknown Soldier and the changing of the guard. The precision of the march of the guards, the timing of the three guards during the exchange of duty, and the beauty of the bugler playing Taps brought chills down my back and tears to my eyes.

Next stop the statue of Marines raising the flag of the United States at Iowa Jima during World War II, then to the Vietnam wall, Lincoln Memorial, Korean conflict, and World War II Memorial.

Everywhere we went in Washington we were greeted with strangers shaking our hand and thanking us for our service to the nation. Some even said “Welcome Home.”

During the flight back to Kalamazoo, the volunteers and staff of Talons Out Honor Flight gave each veteran a letters-from-home package, which included letters, cards, notes, etc. from our family members (adults and children) and some from even strangers expressing many emotions but they all boiled down to the feeling of “Welcome Home.”

“Welcome Home” touches the heart of all veterans but especially to Vietnam-era veterans because many did not get that “Welcome Home” feeling when they returned home some 50 years ago.

I, for one, always had pride I served in the Army, but many Vietnam-era vets were shaken by the controversy during the war and the treatment they received. Now, groups of citizens, like those in Kalamazoo, Michigan, have taken it upon themselves to say “Welcome Home” and it feels good!

The plane arrived just as the sun began to set in Kalamazoo, and we were met with a parade with a police escort to a nearby museum where hundreds of people warmly welcomed us home.

God bless and thanks to all of the staff and volunteers who took the time and effort to work on such a special event.  And thanks to everyone who thanks all veterans for their service and “welcomes us home.”

By Alex Mills

Oil and natural gas companies have experienced a rugged time during the first half of 2023.

Inflation, supply chain issues, and attacks by politicians in the U.S. and Europe have resulted in a decline of investment capital from financial institutions and outside investors.

Out of the top eight oil and gas producing companies, six have had their stocks decline since Jan. 1. Chevron’s stock price has declined 12%, Conoco and EOG down 11%, Pioneer Natural Resources off 9%, ExxonMobil down 5%, and Oxy off 3%. All of these companies are headquartered in the U.S.

The only two with an increase in stock price are Shell up 9% and BP up 3%. Both of these companies are headquartered in Europe.

Crude oil prices are off 30% and natural gas prices are down 40% from a year ago.

The drilling rig count in the U.S. is down 11% to 695, which has resulted in a decline in the companies that provide drilling rigs….
 

By Railroad Commission Chair Christi Craddick

June 23, 2023 — Texas’ oil and gas industry has historically pumped billions of dollars into the state’s coffers, allowing lawmakers to fund critical programs while reducing the burden on taxpayers. With the Permian Basin setting a new record in natural gas production in 2022, never before have revenues been as strong as they were heading into the 88th Legislature. These additional dollars meant that lawmakers had an unprecedented surplus to fund priorities, including local schools, public safety, and investments in local communities and health care programs for the state’s most vulnerable.

To help keep Texas thriving, the Legislature made important investments in the Railroad Commission that will promote our ability to safely, fairly, and effectively oversee this vital industry that our economy and national security depend on.

With the largest pipeline infrastructure network in the nation and one-sixth of the total pipelines in the United States, Texas moves critical energy sources across our state to power homes, businesses, and transportation. This session the Railroad Commission received funding to expand our ability to monitor and maintain the safety of more pipelines across Texas. The Commission added 100,000 miles of gathering pipeline to the agency’s areas of oversight responsibility, which already numbered more than a quarter-million miles of lines across the state. Funding from the legislature will allow the agency to hire and train more safety inspectors to keep up with the growth.

To assist with the surging increase of Oil and Gas Environmental Permit requests and streamline the application process, the Legislature provided additional funding for key staff to more quickly review applications and perform post-permit monitoring. As an agency, we are always looking for ways to eliminate unnecessary delays while protecting environmental quality and ensuring public safety.

This session, the Legislature provided additional resources needed to update the electricity supply chain map. Frequent changes in the supply chain require stronger security features to ensure the information is timely and accurate. By securing and streamlining this process, the Railroad Commission can more readily share information with partner agencies, making the state better prepared in emergency situations.

We also saw important investments in cybersecurity and data protection tools to better inventory, organize, and protect agency information, as well as state-of-the-art cameras and other monitoring equipment to help further reduce gas flaring and venting.

Our primary role is to protect the interests of all Texans and to best serve the state. To accomplish that mission, we are in the process of creating an Office of Public Engagement. Employees in this office will serve as liaisons to give the public a stronger voice and make our agency even more responsive to their needs and requests.

In that same spirit, the Legislature funded our plans to digitize historical records and make them available electronically to the public. This project means easier access to historical well records, refinery reports, and a variety of other forms previously only available in one physical location. As the oldest regulatory agency in the state and one of the oldest in the country, preserving and sharing our history is important.

With the support of the Legislature’s investments, the Commission is as committed and capable as ever to protect the lives and livelihoods of Texans across the state and ensure a strong and safe energy industry for the long term.

Christi Craddick is the current Chair of the Railroad Commission of Texas, on which she has served since 2012.

By Jim Henson & Joshua Blank, Texas Politics Project at the University of Texas

June 23, 2023 — After a regular legislative session that found lawmakers attempting to use a historic budget surplus to address major fiscal issues and infrastructure needs while also pushing some cultural hot buttons, the latest University of Texas/Texas Politics Project Poll found Texas voters with low expectations of the impact of their actions, and dim views of the legislature’s responsiveness.

When asked in general terms about their confidence in legislative efforts to address areas deemed critical by voters in Texas Politics Project polling conducted earlier in the session, most Texas voters lacked confidence in lawmakers’ efforts. Fewer than one in five voters was willing to say they were ‘very’ or ‘extremely’ confident that the legislature had increased the reliability of the electric grid or the water supply, improved the safety of Texas’ public schools, or improved security along the Texas-Mexico border.

In a more general assessment that also illustrates Texans’ low expectations of the legislature’s efforts, asked at the conclusion of the regular session whether the legislature had “made the lives of Texans like you better, made the lives of Texans like you worse, or had no impact on the lives of Texans like you,” only 5% said the legislature had made their lives “a lot better,” joined by 24% who agreed that lawmakers had made their lives “somewhat better.” The plurality, 26%, expected no impact, while 3 in 10 expected the legislature to have made Texans’ lives “somewhat worse” (16%) or “a lot worse (14%).

At the same time, nearly half of Texans (49%) said that Texas’ state government “mostly ignores the needs of Texas residents” — up nearly 20-points since the question was first asked in October of 2012 — while only a little more than a third (36%) said that state government mostly addresses Texans’ needs — down from 54% in October 2012.

As the Texas legislature remains riven by intra-party conflict over property tax reform during the current (first called) special session, Texas voters expressed disapproval of legislative efforts on key issues flagged as priorities by the state’s leadership and, in some cases, by voters themselves, according to results in the latest UT/TXPP Poll. The most striking examples of public skepticism toward recent and current legislative efforts were in response to issues voters identified as urgent in Texas Politics Project Polling conducted earlier in the legislative session: property tax reduction, the reliability of the electric grid, and school safety.

THE PROPERTY TAX IMPASSE

Texans largely disapproved when asked to rate legislative efforts to reduce property taxes, with 45% disapproving and only 25% expressing approval. While all three of the state’s major elected leaders – the governor, lieutenant governor, and Speaker of the House – publicly prioritized cutting property taxes prior to the session, and subsequently committed large shares of the state’s budget surplus to that effort, the House and Senate failed to agree on an approach to achieving those cuts, leading to an impasse that has continued into a special session called by Gov. Abbott to address the issue. This state of affairs appears to be informing public evaluations.

Voters’ evaluations of state leaders’ attempts to reduce property taxes saw the lowest total approval rating from among 16 issue areas voters were asked to evaluate, as well as the lowest net approval rating (-20)…
 

June 23, 2023 — The Texas Supreme Court ruled Friday that the Electric Reliability Council of Texas cannot be sued for damages that happened during Winter Storm Uri.

The state high court affirmed sovereign immunity for ERCOT, placing it firmly within Texas government, thereby placing it outside vulnerability to lawsuits based on the execution of ERCOT’s official duties and actions.

The 5-4 ruling is a reversal of an earlier lower court ruling stating that ERCOT, as a non-profit corporation, is not a government agency…..
 

June 23, 2023 — With weather forecasters calling for possible Texas high temperatures next week nearing 110 degrees, the Electric Reliability Council of Texas is issuing an advisory that electricity demand will also …