Electrical towers stretch into a big, partly cloudy Texas sky at sunset, symbolizing ERCOT, the power authority in Texas which is tightly controlled by Gov. Abbott.
Reginald Mathalone / NurPhoto via AP

Abbott and ERCOT Keep Texans in the Dark

From selecting a new CEO to an obscure committee report, the governor kept tight control over significant post-storm energy changes.

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In the one and a half years since the deadly winter power failures of 2021, Governor Greg Abbott has repeatedly promised that everything is copacetic regarding Texas’ shaky power grid. He’s even gone so far as to micromanage how often the Electric Reliability Council of Texas, the state’s beleaguered independent grid operator, issues public updates on grid conditions. Behind the scenes, he’s also kept a tight grip on the regulatory machinations that have largely taken place behind the scenes with little transparency or public input. 

Take, for instance, the installation of new leadership at ERCOT. In the wake of the storm, Abbott and other top Republicans tried mightily to pin the bulk of blame on then-CEO Bill Magness. Magness, along with the entire ERCOT board of directors, was run out of town. To fill the void, Abbott, Lieutenant Governor Dan Patrick, and House Speaker Dade Phelan appointed a selection committee—composed of a trio of big donors and politically wired power players—tasked with hiring a new board. 

That new board was in turn filled by several new members with deep ties to the state’s energy industry, including a new board chair named Paul Foster, an El Paso mogul who’s contributed nearly $2 million to Abbott’s campaign coffers. 

Last week, the ERCOT board abruptly assembled behind closed doors to unanimously vote to hire electric utility executive Pablo Vegas as the new CEO, putting him in charge of a grid that has been under immense strain during record-setting summer heat. ERCOT, which is a nonprofit corporation, is not subject to the state’s open meeting laws. As the Houston Chronicle reported, Foster said the “urgent” decision was made because their choice had apparently leaked to the media, putting their agreement with Vegas at risk. 

Vegas is a longtime energy executive who was most recently at an Indiana-based electric utility corporation. He’ll reportedly earn a base salary of just under $1 million, with additional incentive pay in coming years. His hiring came after a prolonged and politically charged search process that included a field of over 100 candidates. 

Despite having no official decision-making powers, Abbott had “total veto power” over the search for a new ERCOT CEO.

ERCOT blew past its original June goal for finding a permanent replacement for interim CEO Brad Jones, who had been at the helm for well over a year. That was in large part because Abbott—who is in the middle of a tense reelection fight that has centered on his handling of the grid—had a “stranglehold on the CEO search process,” according to the Texas Tribune. Despite having no official decision-making powers, he had “total veto power,” one source told the Tribune. Abbott had reportedly exercised that power earlier this summer, nixing a top candidate who was the head of California’s grid operator and had significant support from the board. The political optics of importing someone from California to helm the Texas grid was apparently too much for Abbott. 

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Then there’s the obscure mouthful known as the State Energy Plan Advisory Committee, which was established by the Legislature after the grid collapse and charged with coming up with a series of recommendations that could guide lawmakers in making further grid reforms in the 2023 legislative session. Abbott, Patrick, and Phelan appointed an equal share of appointees to the 12-person committee, which they stacked with energy industry execs and political allies. Since its creation, the committee has met only twice, without public testimony. 

Earlier this month, the committee approved a report that it will issue to the Legislature. As the Dallas Morning News reported, it’s not clear what exactly is in the report or what policies the committee is recommending—and how those might affect Texas consumers’ utility bills. The draft report has not been made public and committee members have been told that its contents are confidential. 

Phil Wilson, chairman of the committee, was the architect of the report and has been given a wide berth to further edit the report’s elusive recommendations after the fact. Wilson, who is also CEO of the public utility Lower Colorado River Authority, is a close ally and confidante of Governor Abbott. Wilson was the tiebreaker to approve his report as the committee voted 7-5 on August 10. One committee member opposed the report because he didn’t believe they had nearly enough time to consider the byzantine policy issues affecting the electric grid. “The issues are complex enough that it is hard to address them in the time we had available,” the member told the News

The committee is required to issue its full report to the Legislature by next week. 

That should give Abbott and his proxy on the Energy Advisory Plan Committee plenty of time to polish the final draft.