March 5, 2021

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5 ERCOT board members don’t live in Texas, one from Canada – KXAN.com

6 min read

AUSTIN (KXAN) — The nonprofit managing 26 million Texans’ access to electricity voted to hand one-third of its decision-making power to five people who do not call Texas home. The Electric Reliability Council of Texas, known as ERCOT, manages about 90% of the state’s electric load, according to the organization.

As millions of Texans are still without power, Texas lawmakers and the governor are demanding answers after ERCOT activated the state’s Energy Emergency Alerts. The first alert happened at 12:17 a.m. Monday. A level two alert went out 55 minutes later, asking people to conserve energy or they’d face “rotating outages.”

Just 13 minutes later, at 1:25 a.m., ERCOT activated its third-level EEA, and Texans started to lose power in what was supposed to be rotating power losses.

For millions of Texans, those outages never rotated as power was intentionally cut to homes across the state and has still not been restored.

ERCOT’s Foreign Leadership

Just last week, the ERCOT board elected its newest leaders: Sally Talberg and Peter Cramton. Neither call Texas home and both are “Unaffiliated Directors.”

Talberg lives in Michigan and was a Michigan Public Service Commissioner up until her term ended on Dec. 31, 2020, according to that agency’s website. While Talberg was serving her term in Michigan, the ERCOT Nominating Committee voted to give Talberg one of its four unaffiliated spots on the governing board. Talberg’s ERCOT term started Jan. 1, 2021.

In a Feb. 9, 2021 ERCOT board meeting, Sally Talberg was elected chairwoman and Peter Cramton was elected as vice chairman. (Photo Credit: ERCOT)

An unaffiliated board member does not have ties to Texas energy entities or markets.

In the Feb. 9, 2021 election that handed Talberg the chair, Cramton was elected as ERCOT’s vice chairman. Cramton is an economics professor at the University of Maryland and the University of Cologne, Germany, but his professional social media account shows his location as Del Mar, California.

ERCOT’s governed by a 15-member board at the moment with a 16th board position remaining vacant as of February 2021. That 16th spot is also an unaffiliated director.

A KXAN analysis of ERCOT’s board revealed a total of five members do not live in Texas. Along with Telberg and Cramton, board members Vanessa Anesetti-Parra, Terry Bulger and Raymond Hepper do not appear to live in the Lone Star State.

Anesetti-Parra’s professional social media account shows her location as Canada, Bulger’s ERCOT biography lists his home as Wheaton, Illinois and a University of Pennsylvania law school biography shows Hepper calls Maine home.

The ERCOT bylaws make these out-of-state appointments legal. Nothing in the bylaws requires unaffiliated directors to live in Texas. In fact, the bylaws only state “Residence in the State of Texas preferred.”

“That is definitely a problem,” Rep. Matt Schaefer, R-Tyler, told KXAN’s sister station KETK in a Feb. 17 interview. “We have to look at the leadership and we have to look at the function and we have to look at how we’re setting policies that allow us to use the resources that we have. It would be like if you lived in a grocery store and you were starving to death, it would only be by your own choice. We live in a state with the most abundant energy sources on the planet. There’s no reason we should be starving for energy,” Schaefer said.

ERCOT CEO Bill Magness listens in as a spokeswoman reads reporter questions during a Feb. 17, 2021 virtual press conference.

ERCOT held a virtual press conference on Feb. 17 as 2.7 million Texans continued to sit in homes with temperatures well below freezing across the state. ERCOT Chief Executive Officer Bill Magness fielded questions submitted by media outlets, which were read to Magness by an ERCOT spokeswoman.

“How can you best serve Texans with a board chair that lives in another state,” a question submitted by a reporter asked of Magness.

“Right now, the way that we can best serve Texans is to focus on getting generation and load and balance in working with our control room operators and other staff with the generators to get power back on for everyone. That’s the priority right now. I think if folks want to look at how ERCOT is run and who runs it, obviously it’s part of the investigation of what we’re doing in the future, all those things are on the table. But I think there was no impact of the chair of the ERCOT board of directors,” Magness responded.

KXAN asked all four unaffiliated directors and Magness for interviews regarding this report. Only Anesetti-Parra responded, but did not agree to an interview. “Kindly direct your inquiry to media@ercot.com,” Anesetti-Parra wrote in a LinkedIn message to KXAN.

2011 ERCOT Federal Inquiry

Just 10 years and two weeks ago, 3.2 million Texans were in the same energy crisis as 2.7 million find themselves in now. A winter storm ripped across Arizona, New Mexico and Texas and ERCOT did then what it did this week: cut power to millions of homes.

Between Feb. 2-4, 2011, a total of 4.4 million people in Texas and New Mexico lost power, according to an August 2011 report published by the Federal Energy Regulatory Commission, or FERC.

The 357-page FERC report detailed nine separate findings that showed exactly what happened inside ERCOT’s power grid that left millions without power for so long.

“Generators were generally reactive as opposed to being proactive in their approach to winterization and preparedness. The single largest problem during the cold weather event was the freezing of instrumentation and equipment. Many generators failed to adequately prepare for winter, including the following: failed or inadequate heat traces, missing or inadequate wind breaks, inadequate insulation and lagging (metal covering for insulation), failure to have or to maintain heating elements and heat lamps in instrument cabinets, failure to train operators and maintenance personnel on winter preparations, lack of fuel switching training and drills, and failure to ensure adequate fuel.

Combining forced outages with scheduled outages, approximately one-third of the total ERCOT fleet was unavailable at the lowest point of the event. These extensive generator failures overwhelmed ERCOT’s reserves, which eventually dropped below the level of safe operation. Had ERCOT not acted promptly to shed load, it would very likely have suffered widespread, uncontrolled blackouts throughout the entire ERCOT Interconnection.”

FERC report

The report also questioned decisions concerning activating energy reserves as the forecasts showed what was coming toward Texas.

“However, the massive amount of generator failures that were experienced raises the question whether it would have been helpful to increase reserve levels going into the event. This action would have brought more units online earlier, might have prevented some of the freezing problems the generators experienced, and could have exposed operational problems in time to implement corrections before the units were needed to meet customer demand,” the report stated.

A KXAN analysis of Internal Revenue Service 990 filings shows three current ERCOT board members were also part of the board in 2011. Nick Fehrenbach, Clifton Karnei and Kevin Gresham were all three listed on ERCOT’s 2011 IRS filing.

ERCOT board members Nick Fehrenbach (left), Clifton Karnei (top left), and Kevin Gresham (bottom left) were all on the ERCOT board in 2011, according to the organization’s 2011 IRS 990 filing. (Photo Credit: ERCOT)

Fehrenbach is listed as “Utility Management” on the City of Dallas’ website. Karnei is the Vice President and General Manager of the Brazos Electric Power Cooperative and Gresham’s ERCOT biography shows he’s the Vice President, Government Relations & External Affairs for RWE Renewables Americas LLC, which lists an address in Austin.

The 2011 IRS filing also shows current CEO Bill Magness as ERCOT’s Vice President, General Counsel and Corporate Secretary.

We wanted to ask all four what steps they took following the 2011 federal report to make sure another situation like that never happened again.

We asked each of three board members and Magness for interviews. As of this report, none of the ERCOT officials agreed to be interviewed. Fehrenbach responded to an email sent to his City of Dallas address writing, “I am not available for an interview,” and referred KXAN to ERCOT’s media relations office.

The report also listed 26 separate steps entities within ERCOT’s power grid could take to make sure an mass electricity failure didn’t happen again.

“It (the report) also presents recommendations that the task force believes, if implemented, could significantly contribute to preventing a recurrence of the rolling blackouts and natural gas curtailments experienced in the Southwest during the February 2011 cold weather event,” the 2011 FERC report stated under a heading titled ‘Key Findings and Recommendations.”

There were 2.7 million Texans without power on Feb. 17, 2021 more than two days after ERCOT activated its level three Energy Emergency Alert.

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