Hurricane Beryl shows the lethal consequences of monopoly power

Utility crews work to restore electricity in Houston, Thursday, July 11, 2024. | Lekan Oyekanmi / AP

HOUSTON—An estimated 13 people are dead and hundreds of thousands of Houston residents remain without power and vulnerable to the Texas summer more than a week after Hurricane Beryl first struck.

The storm serves as another painful reminder of the destructive power of climate change that has been exacerbated by the purchased political power of monopoly capital. CenterPoint Energy, empowered by an ultra-right Republican government, continues to face widespread criticism for its inadequate response to the extensive damage caused by the storm.

One of the most glaring issues in CenterPoint Energy’s response to Beryl has been the failure of infrastructure resilience. The extensive damage to the power grid, with poles snapped in half and power lines strewn across the ground, highlights the company’s lack of preparedness for severe weather events.

“Finding gas was a nightmare. I needed it to travel to my job site, but the shortages made it almost impossible to find,” Micah Schweitzer, a union plumber, said about his challenges in the storm’s aftermath. “The streets were dangerous with debris, and all the traffic signals I saw were out. I saw several wrecks. It’s clear that the lack of preparedness and investment in infrastructure is risking lives.”

Less than a year ago, John Farrell, director of the Energy Democracy Initiative, warned of the dangers posed by profit-driven monopolies in the utilities sector:

“Nearly two-thirds of Americans receive their electricity from for-profit corporations granted a monopoly over electricity distribution. In theory, state regulation protects the public from the excesses of these private companies. In practice, weak laws, poor oversight, and the swelling power of consolidation allow state-sponsored utility monopolies to cut corners and choke off competition in order to maximize profits.”

CenterPoint Energy is a textbook example.

The company has already been forced to acknowledge that insufficient resiliency work was done before the Category 1 hurricane that left 2.5 million people without power last week. Jason Ryan, CenterPoint’s Executive Vice President of Regulatory Services and Government Affairs, acknowledged, “I can’t tell you that we’ve nailed resiliency, and we’re done… clearly, more needs to be done.”

This lack of investment in infrastructure resilience can be explained with a quick look at the company’s financials. Over half (54.88%) of all of CenterPoint’s earnings go to shareholder payouts. This leaves less than half of the company’s earnings to cover operating and investment expenses.

CenterPoint Energy’s estimated timeline for restoring power has left over 300,000 customers without electricity as of early this week, down from a peak of over 2.5 million. While CenterPoint’s disastrous response has come as a shock to many Houston residents, according to reporting from ABC13, this debacle should come as no surprise.

CenterPoint has faced ongoing issues with system reliability and service quality standards for years, paying millions of dollars in fines for violating a range of regulatory laws.

The lack of power during the intense heat of the Texas summer has forced families into a life-or-death hunt for safe places to stay cool.

Mary Hendricks is a Houston ISD public school teacher whose elderly mother was left scrambling for space to fend off the brutal heat that followed the storm. The cooling centers they sought out were consistently over-capacity and unable to accept them.

“My mother is acutely vulnerable to the heat without air conditioning,” Hendricks said. “We were without power for days, and the temperature in our house was unbearable. It has been so stressful to struggle to find a stable and safe place to get her out of the heat.”

Houston NBC affiliate KPRC has reported at least three heat-related deaths in the aftermath of the storm. They also reported that hospitals across the metro area “have seen an increase in visits since Monday.”

The policies of the Republican Party in Texas have significantly contributed to the negative influence of monopoly power demonstrated in CenterPoint Energy’s stewardship of Houston’s power system. In the wake of calls for tighter regulation of the state’s energy grid following the 2021 winter disaster, The Texas Tribune ran a report on energy sector political donations following the end of the legislative session.

What it found was that the energy industry, including CenterPoint, showered Texas Republican politicians with more than double the contributions they’d given at the end of the 2019 legislative session.

Critics argue that the state’s policies have allowed companies like CenterPoint to prioritize shareholder returns over necessary infrastructure investments, leaving communities vulnerable.

“CenterPoint Energy has caused longer emergency hospital waits because many patients cannot be released since their homes are without power when we face a 103-degree heat index,” said Alvaro Rodriguez, Texas District Organizer for the Communist Party, USA. “The Republican governor of Texas, simulating concern, has given CenterPoint until the end of the month to write a plan to minimize future outages. This will not address the inadequate response and lack of communication with customers. CenterPoint has demonstrated a pattern of disregard for public safety.”

Rodriguez believes calls for accountability from current leadership are insufficient. He points to a need for broader systemic change: “Three years ago, hundreds of Texans froze in the dark…. Many of the deficiencies had been previously identified but remedial actions were not taken in order to increase profits.”

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CONTRIBUTOR

Bradley Crowder

Bradley Crowder helped organize fast food and academic workers and supported the organization of unemployed workers, especially those in the hospitality and food service industry. He worked with the American Federation of Teachers and the Fight For 15. He studied economics at Texas State University and labor studies at UMass. He was born and raised in the Permian Basin oil patch in west Texas.