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PUC Chair resigns after Lt. Gov. request

The chair of the agency that oversees electric generation and delivery in Texas announced her resignation hours after Lt. Governor Dan Patrick said that she should step down.  In a statement released Monday, Patrick said that DeAnn Walker, chair of the Public Utility Commission (PUC) – as well as Bill Magness, CEO of the Electric Reliability Council of Texas (ERCOT) – failed to warn state officials and the public of the danger the storm posed to the state’s power grid.

“Instead, Texans and lawmakers were told there might be ‘rolling brownouts’ of short duration along with the typical messages we get when cold weather comes to the state ­ cover your plants and keep your pets inside,” said Patrick.  “In short, they hoped for the best instead of planning for the worst.”

Magness and Walker spent nine hours combined in front of the Senate Business and Commerce Committee last Thursday, trying to explain how a state considered a world leader in energy production could spend days in darkness.  Magness told the committee he felt his level of alarm for the storm was commensurate with what his organization had forecast.

“What we understood we were facing based on the weather forecast and the generation we had available, we were probably going to have rotating outages – but manageable ones,” Magness testified Thursday.  “What we did not anticipate was losing up to 48 percent of the generation available Monday night.”

In his statement, Patrick cited testimony from Vistra Energy CEO Curt Morgan as further evidence of ERCOT’s lack of readiness.  Morgan testified Thursday that ERCOT officials failed to display “a sense of urgency” when he warned them of his company’s more serious demand forecast on February 10th.

“ERCOT thought they had it,” said Morgan.  “I think they believed that they were going to be able to manage through it.”

While ERCOT “directs traffic” on the state’s energy grid, including orders to generators to reduce output when needed to prevent the grid from becoming unbalanced, the PUC is the state agency charged with oversight of that grid.   Many members seemed taken aback on Thursday by Walker’s testimony that the agency she chairs lacks full authority to manage ERCOT.

“I would contend that it’s not a problem with authority,” said Conroe Senator Brandon Creighton. “I would contend that you are choosing not to leverage the authority we’ve given you, and that’s a serious, serious problem.”

Patrick also said that assertions that ERCOT and the PUC adequately warned state lawmakers of the impending threat was untrue.

“Both the Chairman and CEO publicly testified they had informed state leadership, including me, about the seriousness of the winter storm. In fact, as they both admitted to me the day after the hearings, their testimony was not accurate,” he said. “They did not provide me with information regarding the potential catastrophic grid-threatening danger of the storm before the morning of February 15, and, based on the questions that were asked in the House and Senate investigation committees, I don’t believe that information was provided to any other state lawmakers.”

The safety and reliability of the state electric grid has leaped to the top of the list of priorities for the legislative session, and as lawmakers look for reforms to ensure that another failure doesn’t happen, Patrick said it’s clear the organizations in charge of that grid need new leadership. “The lack of adequate preparation by both the ERCOT CEO and the PUC chair prior to the storm, their failure to plan for the worst-case scenario and their failure to communicate in a timely manner dictates they are not the ones to oversee the reforms needed,” he said.  PUC officials are scheduled to appear in front of the Senate Finance Committee Tuesday to defend their agency budget requests.

The Senate reconvened Tuesday, March 2 at 3 p.m.