Texas grid operator to consider board seat for retailers

Ann de Rouffignac
OGJ Online

HOUSTON, Sept. 19, 2001 — The board of the Texas grid operator Tuesday asked a committee to investigate giving competitive electricity retailers board representation, after Electric Reliability Council of Texas officials were grilled by a legislative committee.

It is unclear if the action will satisfy members of the Texas Legislature’s electricity oversight committee. At a Sept. 7 hearing in Austin, where some industry representatives expressed dissatisfaction with the status of deregulation, legislators said electricity retailers should have representation on the ERCOT board, which is made up of various so-called stakeholders to the process.

Legislative staff members attended Tuesday’s board meeting. There was general agreement the retailers needed to be heard on the board, said Mark Bruce, policy analyst with the legislative oversight committee.

The issue of board representation arose after problems materialized in the Texas retail and wholesale markets run by ERCOT. Wholesale spot market prices jumped to more than $1,000/Mw-hr, and Shell Energy Services LLC, a unit of Shell Oil Co., Houston, pulled out of the Ohio and Texas retail markets, after filing complaints with the Public Utility Commission of Texas enumerating problems the company encountered receiving correct information about its customers from ERCOT.

Retailers asked for an at-large seat currently held by a representative of a cooperative, but board members did not vote on the proposal. Co-ops hold three seats, excluding the at-large position, even though most co-ops and municipal electric utilities are not participating in the retail market. They were specifically allowed to opt out by Senate Bill 7, the law deregulating the Texas electric power market. Some are participating in the wholesale market.

All corporate and associate ERCOT members can participate in the committee’s deliberation. The committee has 30 days to make its recommendations. After the committee comes to a consensus, its recommendations will be presented to the full board for a vote.

The committee will have the latitude to “start all over again” with the board composition if they want, said Bruce who attended the meeting. If the retailers feel they still don’t have fair representation, they will appeal the decision directly to the PUC, said one retailer who didn’t want to be identified. By turning the job over to a committee, he said, action will be delayed at least 30 days and possibly longer.

“We would go directly to the commission for relief if that happened,” the retailer said. “It is clear that the board must have equal representation by all market participants with separate interests.”

The ERCOT board consists of members from different participating segments of the market. The board of the California Independent System Operator had a similar stakeholder makeup prior to a huge run up in electricity prices. After the price debacle, California Gov. Gray Davis disbanded the board and appointed new members.

Presently, the ERCOT board has 21 members, including:

Cooperatives: Joseph Beal, Lower Colorado River Authority, Austin; Mike Troell, South Texas Electric Cooperative Inc. Nursery; Clifton Karnei, Brazos Electric Power Cooperative Inc., Waco; and Robert Merett, Magic Valley Electric Cooperative Inc., San Benito.

Municipally owned utilities: Jim Harder, Garland Power & Light, Garland; Milton Lee, City Public Service of San Antonio; and Charles Manning, Austin Energy, Austin.

Investor-owned utilities: David McClanahan, chief operating officer, Reliant Energy Delivery Group; a unit of Reliant Energy Inc., Houston; Michael Greene, TXU Corp. Dallas; and Brian Tierney, American Electric Power Co. Inc., Columbus, Ohio.

Independent generators: Trudy Harper, Tenaska Energy Inc., Omaha, Neb.; David Itz, Calpine Corp.; San Jose, Calif.; and John Stauffacher, Dynegy Inc., Houston.

Independent power marketers: Jack Hawks, vice chairman, PG&E Energy Group, a unit of PG&E Corp., San Francisco, Calif.; and Curtis Griffin, Mirant Corp., Atlanta, Ga.

Residential, commercial, and industrial consumers: Jill Hall, Austin; Bob Manning, H-E-B Grocery Co., San Antonio; Suzi McClellan, counsel, Office of Public Utility Counsel; and Tom Payton, Occidental Chemical Corp.

PUC and ERCOT: Thomas Noel, ERCOT CEO; and Max Yzaguirre, PUC chairman.

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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