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TX Senators Tell ERCOT to Toe the Line

A week after rolling blackouts hit parts of the state, Electric Reliability Council of Texas (ERCOT) executives last week got an earful from senators who made it clear their patience has worn thin with controversies and bickering surrounding the organization.

While ERCOT staff was generally praised for the way it handled technical aspects of the power shortage of April 17, the organization received harsh criticism for failing to notify state emergency and law enforcement agencies as well as commissioners at the Public Utility Commission of Texas (PUC) of rolling blackouts.

PUC Chairman Paul Hudson delivered a 68-page presentation-style report on the blackouts of April 17 (see NGI, April 24).

"While operational decisions were commendable, and the emergency procedures and implementation served to achieve the precise purpose for which they were created, notice of the emergency to some market participants, the PUC, state and local leadership, and the general public was inadequate," the report says. The PUC said the report is preliminary. "The PUC will perform a comprehensive and thorough review and analysis of events on April 17th. If noncompliance with statutes, PUC rules, or the ERCOT Protocols or Operating Guides are discovered, appropriate action will be taken by the PUC."

While it was the blackouts that prompted the report and last Tuesday's Senate Business and Commerce Committee hearing, called by Sen. Troy Fraser (R-Horseshoe Bay) most of the discussion, and grilling, came from senators concerned about ERCOT's relationship with its regulator, the PUC.

Senate Bill 408, passed during the last legislative session, was intended to clarify the PUC's oversight role with respect to ERCOT. Senators and PUC commissioners said much more needs to happen to instill cooperation between the PUC and ERCOT.

"A pattern of frustrations in my interactions with the organization, especially of late, tempers my feelings of progress and obscures what I had hoped would develop into a relationship founded on mutual trust," Hudson told the committee. "Some examples:

The first point -- the retail systems issue -- refers to a "computer glitch" that happened at ERCOT over the Christmas holiday last year. ERCOT has been fined for this breach, but Fraser noted that fining ERCOT is essentially leveling another cost on Texas ratepayers.

"Financial sanction almost doesn't work because, as we've discussed, they almost have a blank check," Fraser said. "If we fine ERCOT, all they're going to do is add it to the budget and pass it back to the public."

Additionally, discussion at the committee hearing touched on PUC displeasure at an ERCOT plan to treat employees to a day out at Austin's Dell Diamond ballpark at taxpayer expense, which was later canceled. While it was not discussed, senators did allude to a rogue employee scandal from last year that has served to tar ERCOT's reputation.

ERCOT CEO Thomas Schrader seemed to get the message of senators. "What I think has transpired is that I have lost some communication contact and some communication with the [PUC] commissioners over this past six months that has hurt me, to be very candid," he said during his response to questions. Schrader said ERCOT's relationship with the PUC is developing and he promised better communication in the future.

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