Here's how Texas lawmakers (and Enron) shaped the state's electrical market

It had been seven hours, 51 amendments and years of work. Lawmakers on the floor of the Texas Senate were tired, and state Sen. David Sibley was talking about a can of beans on St. Patrick’s Day 1999. “Starting in 2002, people will be able to shop. If they don’t like the electric provider they’ve got, they can switch,” he said. “If the price of a can of beans goes up 10 cents, people shop somewhere else. If the price of electricity goes up, people for the first time will have a choice on what they’re going to do. It’s no more business as usual.” Two decades ago, the Waco Republican led the charge to deregulate Texas’ electrical market — a move that would make the state’s system unlike any other in the United States.

It had been a slog. You could hear it in his firm but plaintive tenor ahead of the final approval of Senate Bill 7, the measure that deregulated the state's retail electrical market. It was, and is, unlike any other system in the country — one that, years later, would leave millions of Texans without power after a catastrophic freeze. Deregulation was pitched as a way to lower Texans' electricity bills by spurring competition in a market that was dominated by regional monopolies. But it also built in new threats to the system by allowing energy providers and traders to shift the blame and avoid accountability whenever the power supply became unreliable. SB 7 was a bill that had been years in the making but began in earnest in 1998 on a cocktail napkin. Sibley was on a flight back to Texas with Democratic Dallas state Rep. Steve Wolens, his Texas House counterpart who was shepherding legislation to deregulate the electric market; and Pat Wood, the head of the Public Utility Commission of Texas, the statewide agency that regulates utilities like electricity, water and telecommunications. They had gone to California on a reconnaissance mission. After federal regulation paved the way for deregulated electrical markets in the 1990s, many states started crafting plans to do so. Texas and California, the two most populous and energy-rich states in the country, were both pushing to be the first state to successfully deregulate their markets. California beat Texas to deregulating retail electricity, passing a bill in 1996. So Sibley, Wolens and Wood flew to California to scope out their market, jotting down their takeaways and concerns on a napkin on the flight back.