Texas governor takes control of search for new CEO over state power grid

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When Brad Jones was tapped as interim CEO of the nonprofit that runs the state’s power grid following the lethal February 2021 winter storm that left most of Texas with out power for days, he mentioned he would assist stabilize the grid and get it by way of the summer time. Jones was clear that he wasn’t interested by protecting the job long run.

Now, 15 months after Jones turned interim CEO — and greater than a month after the June goal date when Jones had instructed colleagues and convention crowds that he wished to step down — the Electric Reliability Council of Texas’ new board of administrators nonetheless has not chosen his successor.

Eight sources from throughout the power trade who spoke to The Texas Tribune say Gov. Greg Abbott — who has no formal function within the course of — has put a stranglehold on the CEO search.

The board of administrators, put in by a bunch of three people who find themselves appointed by the governor, lieutenant governor and House speaker, and a contracted search agency have introduced CEO candidates to Abbott for closing say, based on three sources who spoke to the Tribune on the situation of anonymity to debate the delicate points.

The governor has already vetoed Steve Berberich, a Texan who was vice chairman of Irving-based TXU Energy and later turned CEO of California’s power grid operator and who appeared to have sturdy assist from each the power trade and ERCOT’s board of administrators, two folks aware of the matter mentioned.

“The only explanation we got was because he came from California,” mentioned a power trade supply aware of the discussions about Berberich. “Obviously California has its share of problems, but you can’t argue with his qualifications.”

Berberich declined to remark for this story.

This stage of involvement by the governor in ERCOT’s hiring course of — and in its public communications — is extraordinary within the nonprofit’s 52-year historical past, quite a few sources instructed the Tribune.

“He has total veto power,” one of the sources aware of the method mentioned of Abbott.

Abbott’s workplace controls ERCOT’s public statements

By the time Jones took over ERCOT two months after the disaster, Abbott’s workplace had begun dictating what — and whether or not — information in regards to the power grid was launched to the general public by ERCOT, an unprecedented transfer by a Texas governor, based on present and former power firm administrators, power grid workers, longtime power analysts and consultants who spoke to The Texas Tribune.

After the storm, ERCOT’s public messaging rapidly dwindled whilst public anxiousness in regards to the grid’s reliability soared: Jones has held few press conferences — and when he has, they’ve virtually all the time been alongside his boss, Public Utility Commission Chair Peter Lake, whom Abbott appointed to switch one other chief who left within the post-winter-storm purge.

“The governor is not just reviewing and editing [ERCOT’s public statements]. He’s telling ERCOT whether or not they can release grid information at all,” mentioned a former senior ERCOT worker who spoke candidly in regards to the matter on the situation of anonymity. The supply mentioned “it means information is potentially not getting where it needs to go, and that means Texans aren’t hearing what they need to hear.”

At occasions for the reason that winter freeze, the governor’s workplace examined press releases and different communications ERCOT had ready to place out to the general public and made modifications “if they were uncomfortable with the language,” the previous worker mentioned. Before the freeze, the governor’s workplace was barely concerned in any respect in ERCOT’s public communications, 4 folks aware of the method mentioned.

ERCOT’s social media posts have additionally dwindled: In the 4 months earlier than February 2021, ERCOT posted 41 occasions on Facebook, a mixture of common grid updates, job postings and statements from its executives in regards to the grid. In the 17 months after, ERCOT has posted solely 31 occasions on Facebook; the identical development has performed out on ERCOT’s Twitter account.

“The National Weather Service is on Twitter every day or in the newspaper or on Facebook — there are a thousand ways to reach people where they are,” mentioned Alison Silverstein, a former senior adviser on the Public Utility Commission of Texas, which regulates ERCOT. “The point is to provide so much information that people stop thinking you’re hiding stuff and they stop looking behind every lamp post and stop being suspicious about what you’re not telling them.”

Silverstein, who additionally used to work for the Federal Energy Regulatory Commission, mentioned grid operators routinely give U.S. governors’ workplaces a heads up earlier than they launch grid information to the general public. But governors don’t often dictate what information is launched, Silverstein and different former Texas grid officers mentioned.

Before the winter freeze, that was the case with ERCOT, too, based on quite a few sources aware of the method: The grid operator sometimes despatched press releases and grid replace bulletins to the PUC, which generally shared them with the governor’s workplace, a day or two earlier than launch as a heads up, they usually had been hardly ever questioned or instructed to considerably change the content material.

Abbott, who’s up for reelection in November, has virtually totally averted discussing the grid publicly this summer time, whilst Texans have been repeatedly asked to conserve electricity and lots of have seen their home electric bills skyrocket. Abbott’s opponent, Democrat Beto O’Rourke, has made the grid’s issues a giant half of his marketing campaign and has criticized Abbott over his dealing with of the grid throughout and after final 12 months’s tragedy.

A spokesperson for Abbott didn’t reply detailed questions in regards to the governor’s involvement within the grid, however mentioned Texas has taken “unprecedented steps” to guard the state’s power system following the 2021 winter storm — together with mandating that power turbines and pure gasoline producers higher put together their amenities for excessive climate.

“Governor Abbott continues working to ensure the substantial bipartisan reforms passed by the House and Senate last year are properly implemented, including greater transparency and accountability at the PUC and ERCOT, so that the grid remains stable and reliable,” the spokesperson mentioned in a written assertion. “Under the Governor’s management, Texans have seen extra communication and proactive responses by the PUC and ERCOT to maintain the general public higher knowledgeable of present grid circumstances, comparable to voluntary conservation appeals this summer time throughout record-setting temperatures and demand.”

In response to detailed questions for this story, a spokesperson for ERCOT used the identical written assertion repeatedly: “ERCOT does not speak for Gov. Abbott on what, if any involvement he’s had.”

The spokesperson added that ERCOT’s public communications are reviewed and authorised by the PUC, the state agency that oversees ERCOT.

Abbott appoints the PUC’s board, which was expanded from three to 5 members after the winter storm, when hundreds of thousands of folks had been plunged into darkness after prolonged freezing temperatures shut down pure gasoline amenities and power vegetation. Those two main elements of the grid rely on each other to maintain electrical energy flowing. Hundreds of folks died throughout the freeze. All three of Abbott’s appointees resigned from the board shortly after the freeze. The earlier ERCOT CEO was fired, and lots of of its board members resigned.

Beth Garza, who has labored within the Texas power trade for a long time, together with because the impartial watchdog of ERCOT from 2014-19, mentioned any direct involvement by the governor in ERCOT’s day-to-day operations is regarding as a result of he and his workers usually are not educated power professionals.

“I don’t think he knows anything about running [a grid operator]. He certainly couldn’t figure out who to pick as [PUC] commissioners the first time around,” Garza mentioned. “Let’s remember: The three in charge [of the PUC] during the catastrophe were all his appointees.”

Who desires to be ERCOT’s subsequent CEO?

The final week of July, ERCOT’s board of administrators held an pressing digital assembly to think about a “sensitive matter,” which they mentioned in a non-public govt session. When the board returned to open session, they mentioned they deliberated on a personnel matter and didn’t vote on something.

Behind closed doorways, the board narrowed its search for a everlasting CEO, based on three folks aware of the matter.

Numerous sources mentioned the governor has persistently pushed for Phil Wilson, former secretary of state beneath Gov. Rick Perry and present chief govt of the Lower Colorado River Authority, a nonprofit public utility based mostly in Austin that gives water and electrical energy to greater than 1 million Texans.

Abbott has turned to Wilson as a disaster supervisor earlier than. During the early days of the COVID-19 pandemic, Abbott named Wilson the performing head of Texas’ large well being and human providers company, which he ran for 4 months while continuing to lead the river authority.

Last fall, Abbott additionally appointed Wilson as chair of the State Energy Plan Advisory Committee, a bunch of largely power executives who’re anticipated to put out a long-term power plan for the state, which state lawmakers might use to assist them draft legislative proposals.

But Wilson doesn’t need the ERCOT CEO job and has privately turned it down a number of occasions, based on 4 folks aware of the matter.

When reached by a Tribune reporter searching for remark about his candidacy for the ERCOT job, Wilson mentioned he was in a gathering and couldn’t speak.

Wilson’s obvious reluctance to take the job underscores the largest problem for Abbott and the ERCOT board: discovering certified candidates who truly need the job. Garza mentioned the ERCOT job pays effectively and might be interesting for anyone within the power sector who desires to run a company that’s crucial to the lives of most Texans.

But ERCOT will not be a state company — it’s a nonprofit entity that operates like an air site visitors controller and a monetary change, coordinating with dozens of transmission firms, power suppliers and turbines to handle each the state’s sprawling power provide and the cash transferred amongst completely different segments of the power system.

The non-public power sector usually pays prime executives greater than what ERCOT might supply, and the ERCOT CEO is beneath a a lot brighter highlight than any power firm CEO after final 12 months’s catastrophe sowed widespread public mistrust within the state power grid. Jones earns $500,000 yearly as interim CEO, based on his contract, obtained by the Tribune by way of an open data request. That’s $300,000 lower than his predecessor, Bill Magness, revealed that he earned throughout legislative hearings after the 2021 winter storm.

Garza and different sources within the power trade mentioned candidates additionally need to weigh whether or not they’re keen to step into such a politicized place.

“The concern is that once you have an organization that’s sort of kowtowed into believing it needs approval from whoever it needs to come from, that organization is stymied and will wait to take action,” Garza mentioned. “You risk losing some initiative. That’s not what you want from ERCOT. You want ERCOT to be smart, capable folks who take necessary actions when they’re necessary to take.”

Disclosure: Facebook and the Lower Colorado River Authority have been monetary supporters of The Texas Tribune, a nonprofit, nonpartisan news group that’s funded partially by donations from members, foundations and company sponsors. Financial supporters play no function within the Tribune’s journalism. Find a whole list of them here.

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