Regulatory Rents in Jeopardy?

In Texas, the state comptroller decided that the “energy industry should ‘stand on its own two feet,’” which means that regulatory rents that helped the industry develop may now be in jeopardy.  A report was released that cited the “massive strain on taxpayer dollars” that the regulations impose.  Some of the regulatory rents enjoyed by the energy industry include property tax reductions, a federal production tax credit, and “a nearly $7 billion power line build-out geared towards adding wind to the grid.”  One particular regulatory rent that is prominent in Texas is a tax exemption covering “high-cost natural gas drilling.”  This exemption saved drilling operators $7 billion dollars from 2008-2013.  As a result of the various regulatory rents, many producers have no “tax liabilities,” making it clear that the industries benefit greatly from regulation.  The above regulations appear to fall into Stigler’s category of subsidies, which is unusual because often, this method of regulation is unpopular due to its visible nature (subsidies are included in the budget).  While the extent of industry pursuit of regulation is unclear, it is likely that the energy industry engaged in some form of lobbying to push for favorable regulatory rents.  Stigler’s claim that pubic interest is often used as an explanation for regulation is supported by this case since some argue that society experiences public benefits from the increase in power lines.