ERCOT Board Members Who Live Outside Texas Are Resigning In Aftermath Of Power Outages, Winter Storm
Five board members of the Electric Reliability Council of Texas — the entity that manages and operates the electricity grid that covers much of Texas — will resign on Wednesday, according to a notice to the Public Utility Commission. A sixth has withdrawn his application to the board.
All six live outside of Texas.
Sally Talberg, board chair; Peter Cramton, vice chair; Terry Bulger, finance and audit chair; and Raymond Hepper, human resources and governance committee chair, occupy the "unaffiliated" director positions on the board, which mean they must remain independent of any business ERCOT oversees. Their resignations will be effective at the end of the board's Wednesday meeting.
In addition, Vanessa Anesetti-Parra, the market segment director for the independent retail electric provider market segment, will also resign her position as a board member. Craig Ivey, who was slated to fill a vacant unaffiliated director position, withdrew his application.
ERCOT board members had come under fire last week when it was reported that some did not reside in the state. ERCOT officials, during a press conference last week, said it had temporarily removed personal information about the directors from its website because they were experiencing harassment.
The board has been criticized for last week's mass power outage during a winter storm that has claimed the lives of dozens of Texans. More than 4.5 million customers were without power at one point last week.
Gov. Greg Abbott had called on ERCOT board members to resign in the aftermath of the crisis and said in a statement Tuesday that he welcomes their resignations, promising to investigate the grid operator.
“I welcome the resignations,” Abbott said. “The lack of preparedness and transparency at ERCOT is unacceptable. We will ensure that the disastrous events of last week are never repeated.”
ERCOT, a nonprofit, is governed by a board of directors, but overseen by the Public Utility Commission. Fifteen members serve on the ERCOT board, including the five unaffiliated director positions. The vacancies will not immediately be filled.
In order for ERCOT to maintain its certification as an independent organization, the board, which should consist of 16 members, must include five directors who are completely unaffiliated with “any market segment.” Ivey would have been the fifth unaffiliated member.
“The board chairman, board vice chairman and both committee chairman leadership roles will be vacant,” according to the notice submitted by attorneys representing ERCOT.
Lawsuits have already been filed against ERCOT in response to last week's crisis. It's unclear whether ERCOT, which falls under the PUC's jurisdiction, can be held liable by such suits: The Texas Supreme Court is expected to decide this year whether ERCOT is entitled to sovereign immunity, a legal principle that protects government agencies from lawsuits, after hearing another case that raised the question last year.
The board members were not all immediately available for comment or referred reporters to their resignation letters. In a joint letter to the rest of the board, the four unaffiliated directors cited the public concern that board members did not live in the state as the reason for their resignation. Ivey also cited not wanting to become a “distraction” from the more important response to the crisis in his letter.
“To allow state leaders a free hand with future direction and to eliminate distractions, we are resigning from the board,” Talberg, Cramton, Bulger and Hepper wrote in the resignation letter.
The board directors wrote that before they resign, they will launch the review of the power crisis.
“Our hearts go out to all Texans who have had to go without electricity, heat, and water during the frigid temperatures and continue to face the tragic consequences of this emergency,” they wrote. “We want what is best for ERCOT and for Texas."
Talberg, a former state utility regulator who served on the Michigan Public Utility Commission from 2013 to 2020, lives in Michigan. Talberg has sat on various state, regional and national boards and committees involving electricity, natural gas, oil, infrastructure and telecommunications issues. Cramton, a professor of economics at the University of Cologne and the University of Maryland, lives in Germany. Cramton has focused his research on electricity and financial markets. He has advised numerous governments and has been on the ERCOT board since 2015.
Bulger worked in the banking sector for 35 years, including various positions with ABN AMRO Bank in Canada, Europe and the U.S., and lives in Wheaton, Illinois. Hepper, a former litigator for the U.S. Department of Justice, retired in 2018 from working for the grid operator that manages the six-state New England electric system and wholesale markets.
Ivey, whose appointment was approved by ERCOT's members but was pending final approval from the PUC, is retired from more than three decades of experience in the utilities industry. He resides in Florida, according to an ERCOT announcement about his candidacy to the board. Most recently, he was the president of Consolidated Edison Co. of New York Inc., a subsidiary of Consolidated Edison Inc.
Anesetti-Parra oversees Just Energy’s North American residential and commercial regulatory affairs and compliance division and has two decades of experience in the retail energy sector.
ERCOT representatives did not return calls seeking comment, but in a statement it said: "We look forward to working with the Texas Legislature, and we thank the outgoing Board Members for their service."
Lexi Chuchill and Kiah Collier contributed to this report.
Clarification, Feb. 23, 2021: An earlier version of this story reported four ERCOT members who hold unaffiliated director positions are resigning. The story was updated to reflect a fifth member of the board, Vanessa Anesetti-Parra, who is not an unaffiliated director, is also resigning. Unaffiliated members cannot have ties to businesses ERCOT oversees.