TribBlog: Grading the Grid

A consulting firm's report on the Texas grid operator, ERCOT, has found that the agency is significantly overstaffed and needs an independent board.

The agency has "likely a lot of dead wood and no process for handling poor performers," according to the report's compilation of comments from the Public Utility Commission and the ERCOT board. Others said the agency was "woefully under-skilled" in some areas.

Additional commentary from PUC commissioners cited "poor corporate governance, leadership and culture, leading to an overall below-average quality of people" at ERCOT.

The report was prepared by the firm Market Reform and presented to ERCOT's board on Tuesday. ERCOT has come under fire in recent years for delays and huge cost overruns on a project to overhaul how the grid works. That project is scheduled to go live in December.

The consultants also recommended changes to the ERCOT's board. Right now, the board is made up almost entirely of representatives from the electric industry, many of whom are subject to ERCOT rules. Market Reform said that its membership should be smaller (seven or nine members, about half the current size), and the majority should be independent.

"We say amen to that," said Geoffrey Gay, an attorney with Lloyd Gosselink, who represents groups of cities that get power through ERCOT. He would like to see the board comprised of only independent members, and noted that ratepayers did not appear to have been consulted in the compilation of the report.

Texas, Gay added, is "probably the only place in the country where an independent operator for the grid has been turned over to market participants for the design of the market and the governance of the market. And that's shocking."

Trip Doggett, ERCOT's new chief executive, responded to the report by unveiling preliminary plans at the meeting on Tuesday to reduce the agency's size from 685 employees to 585 in the next few years.

His presentation to the board, however, makes no apparent mention of altering the board itself.