Regulators at the Public Utility Commission initially advanced an application for a taxpayer-backed low-interest loan to a group called Aegle Power, which listed NextEra Energy as a partner on a proposed power plant. Everything looked good to the bureaucrats and to Deloitte, the auditing firm the state hired to vet applications. That is, until NextEra sent a letter saying it wasn’t partnering with Aegle and had not consented to be part of the loan application. Then, regulators learned that Aegle President Kathleen Smith pleaded guilty to an embezzlement scheme seven years ago. Oops.
“This could have been found with a Google review, a Google search,” PUC Chairman Thomas Gleeson said during a state Senate committee hearing Sept. 5. But, apparently, neither the $5 billion government loan program nor the $107 million state contract with Deloitte is enough to fund such extensive research.
The state has now denied Aegle’s application.
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Sen. Paul Bettencourt, R-Houston, said he was “aghast” that this could happen. We’re not. When the government gets into the banking business, all kinds of things can go wrong.
The loan program is part of the Texas Energy Fund created by the Legislature last session. We reluctantly supported the constitutional amendment that created the fund, not because the state should be choosing winners and losers in the energy market — it shouldn’t — but because we’re concerned about the reliability of the grid. Texas needs more dispatchable energy, as the winter storm of 2021 proved. Right now, that means fossil fuels. As battery technology advances, that could mean more renewables in the future, and those renewable sources should also benefit from the fund.
In the meantime, the PUC must shore up the processes it’s using to hand out taxpayer money.
“You need to find out the truth before you not only embarrass the state of Texas, but you put taxpayer dollars at risk. That’s the bottom line here,” Bettencourt told Gleeson.
And our representatives in Austin should pause any initiatives to expand the loan program. This summer, Gov. Greg Abbott and Lt. Gov. Dan Patrick announced a push to double the Texas Energy Fund to $10 billion.
“There’s talk of another $5 billion? I think you’re going to have to clean up your act,” said Sen. Joan Huffman, R-Houston.
We agree. We should be able to shore up the grid without this embarrassment. We certainly shouldn’t throw more money at a loan program with deficient vetting.