When I saw last week that Dallas Mayor Mike Rawlings had sent a letter to Austin regulators in support of a bid by the Hunt family of Dallas to take over our local electric transmission utility, all of the “how high” jokes I have ever heard in my life started marching through my head. And I realized something. You never get to hear the answer.
Oh, you know. The one guy says jump and the other one asks, “How high?” So what’s the answer? In this case — the second fairly remarkable one in recent history, by the way — the person doing the commanding was Dallas oilman Ray Hunt and the one asking how high was our mayor, Democrat Mike Rawlings.
The earlier how-high incident, you will remember, was about a sex show called Exxxotica in the city convention center, over which we are now being expensively sued. Even though the same show appeared in the convention center a year ago without incident, even though the police said it was not only legal but boring, even though the city attorney told the mayor and City Council that the city would incur expensive litigation if it banned the show this year, and even though the show itself barely rises to the level of a naked ladies tent in a carnival midway anyway, Hunt, who owns property abutting the convention center, told the mayor he didn’t want the show near him again this year.
The mayor did. The mayor put together a coalition of council members afraid to vote in favor of nakedness, and they banned it. The sex show sued. The city won the first round, but of course it goes on.
How powerful is Ray Hunt? In 2008 in a deal the State Department thought could undermine both American foreign policy and the Iraqi central government, Hunt Oil insisted on signing a drilling deal with the government of Kurdistan. President George W. Bush, an old Hunt confidant, sat on his hands — the presidential equivalent of jumping.
That’s the part I’m interested in with Hunt and our mayor. The jumping. With the sex show hop-skip-and-a-jump barely behind us, Hunt obviously has called up the mayor or sent him a text or a little note on a silver tray, however he does it, with another athletic exhortation, this time about the Hunt family’s direly beleaguered attempt to buy Oncor out of a bankruptcy case.
We talked about this case last week. Oncor, the major distributor of electricity in North Texas, used to be a public utility back in the days when anybody could tell what a public utility was.
In 2007 it got swallowed up into some kind of Wall Street Big Short witchery in which a small group of people borrowed a sum of money equivalent to the Obama Administration’s current proposed total budget for military support to Israel (really). And then, oh, snap, the company in this adventure couldn’t keep up with its debt payments. Ever. Who saw that one coming? So the whole thing went belly-up.
Now the Hunt family is behind a proposal to buy the electrical distribution company (which should, by all rights, be renamed “Big Short Electricity”) out of the bankruptcy of the parent company.
They want to turn the electric pole company into a real estate company, because why didn’t anyone think of that before? Silly me, I have no business acumen, so I was thinking of turning it into a wedding venue.
The new electrical real estate company idea involves taking on a new corpus of debt, of course, and let’s not even try to do equivalencies on it because it might impair our equilibrium. What I told you last week is still true: The whole idea frightens the support-hose right off the American Association of Retired Persons (AARP), not to mention a broad coalition of Texas cities served by Oncor, not to mention the staff of the Public Utilities Commission of Texas, all of whom are calling the deal a rapacious assault on ratepayers.
And think about that last one for a second. The staff of the PUC opposes it. Getting the staff of a Texas regulatory agency to give one flying flick of the finger for the welfare of ratepayers is like getting Genghis Khan to agree to a resettlement program. This just does not happen in Texas. Therefore, I do not think it stretches things too much to characterize this deal, at least from the public’s point of view, as a home invasion.
The appointive three-person board of the Texas PUC must agree with me at least in part, because earlier this year they said they would approve the Hunt takeover only with certain strictures attached. Since then those requirements have evolved into poison-pills. At one point last week, the poison pills seemed to have killed the deal.
But that was when everything went sideways, indoors and underground. The PUC was supposed to meet last week to make a pull-the-trigger decision, and at the last minute they punted, saying they will meet next week instead to decide on deciding on pulling the trigger. I think you and I both know what that means. Mr. Hunt is exercising his vocal cords.
Jump! Jump! Jump!
If we could get all the big downtown suits out of their lairs and assemble them in Klyde Warren Park across the street from Hunt world headquarters, it would look like the Calaveras County jumping frog competition out there. Be careful, guys! It’s a bridge park!
With Ray Hunt leaning out of the penthouse window at the top of his aerie shouting “Jump” and that many people asking “How high,” maybe I could finally hear the answer.
It was in this atmosphere at the end of the week, then, that Mayor Rawlings sent off a letter to the Texas Public Utilities Commission urging them to take the Hunt’s side of things for now and start over with a new hearing. “It seems only fair,” he said in his letter, “to grant the motion for rehearing and allow the parties to attempt to solve some of the issues of concern in the order.”
That’s a jump. That’s a Calaveras County jump.
And please allow me to parse the mayor’s careful language for you carefully. Does it sound as if he’s just asking for a fair shot, a sit-down where like-minded people can see if they really agree or disagree? OK, that’s wrong. The like-minded sit-down part has been going on since February. Everybody sat down, got up and sat back down again several times.
The poison pill, as the Hunt people have been characterizing it, came out of that process. The PUC actually leaned way over toward the Hunt position, authorizing them to pay $18 billion for Oncor, but they insisted they had to put some earnest money on the table for the ratepayers.
It’s a fairly pusillanimous requirement – only that the Hunts agree to consider sharing a $250-million-a-year federal tax break with the ratepayers. Apparently you get a $250-million-a-year tax break if you turn an electric company into a real estate company. I want to say I knew that, but … I did not know that. I have no idea what size tax break you might get if you could turn an electric company into a wedding venue, but I have to think it would be yooge. Food for thought?
The Hunts said they would take the sharing with the ratepayers thing to their investors. They came back a week later and said the investors had told them no sharing, not a dime nor a nickel.
Since I wrote about his last week, I have heard from Hunt supporters who have castigated me for not understanding that a tax break of this size requires very expensive legal work and that the investors won’t pay for the legal work if they’re going to have to share their winnings with the ratepayers.
You know, I really have tried to put that one on and wear it around the house just to see if I could ever get it, and I finally decided it’s like those tight Martha’s Vineyard cranberry pants that some guys wear. It must be a cultural thing.
The money, you see, comes from the ratepayers. It’s an amount they have to pay so the electric real estate company can pay its taxes. But if the electric real estate company doesn’t have to pay those taxes any more (for some reason we won’t really try to figure out because it might affect our equilibrium), then why would the money, at least part of it, not go back to the ratepayers?
They say it would be wrong. And I say we should just agree this is a pair of cranberry pants and move on.
Last week before the mayor sent his jump letter, the PUC supposedly was all set to pull the trigger. We can’t know how influential his help may have been, but the decision to delay all decisions on trigger-pulling followed it.
This delay, in other words, is breathing room and an extended period of time for the Calaveras County jumping frog competition. The mayor’s request for an additional hearing and more time was clearly and explicitly a request for clemency for the Hunt deal.
It’s entirely possible – probably what we should expect –that the PUC will come out next week with a new “not squat” position on how much of the tax break should be shared with the ratepayers and the Hunt deal will happen.
I will never find out the thing I care about. Jump. How high? What’s the answer? But let’s see if we can guess.
A mayor who is a Democrat and presides over a city with a crushing poverty rate has asked the state of Texas to take the side of oilman Ray Hunt in a contest over the public interest.
High. A little higher, please. No, you can do better than that.