Texas PUC chairman resigns; defends record

Ann de Rouffignac
OGJ Online

HOUSTON, Jan. 18, 2002 — Max Yzaguirre, chairman of the Public Utility Commission of Texas, confirmed his resignation Friday, adding the controversy over his appointment has been “difficult” on his family and “taken attention away from the important issues the PUC is handling.”

Texas Gov. Rick Perry named Yzaguirre to fill a vacancy left by Pat Wood who President George W. Bush named chairman of the Federal Energy Regulatory Commission in May. Yzaguirre surfaced as a potential liability for Perry, who is running for reelection, after disclosures he received a $25,000 contribution from Enron CEO Kenneth Lay the day after he appointed Yzaguirre commission chairman. Perry has termed the timing “coincidental.”

In a statement, Yzaguirre defended his record at the PUC and said his background and qualifications had been thoroughly analyzed and found to be fully “consistent with state laws.” He said the debate over his appointment at times has “strayed into inaccuracies.”

Recently, attention has focused on Yzaguirre’s initial failure to disclose all his positions at Enron Corp. The only connection to Enron he originally acknowledged was being an officer of Enron’s operations in Mexico. He later confirmed holding other positions with Enron, which is at the heart of a rapidly evolving financial and political scandal.

“Not a day goes by that there is not some kind of mention of the Enron debacle, Perry, and Yzaguirre in the same breath,” said one source close to the PUC in Austin.

Enron, which filed for bankruptcy protection Dec. 2, was at the forefront of pushing electricity deregulation legislation in Texas. The company, which had a large interest in trading and selling natural gas and electricity in the wholesale market in Texas and elsewhere, also participated in shaping the wholesale market protocols with ERCOT.

Prof. Bill Hogan, Kennedy School of Government at Harvard University, said in an interview Enron played a huge role in lobbying for specific market designs for deregulated wholesale electricity markets. Enron lobbied hard for the market design that was implemented in California and ultimately failed, he said. Hogan said Enron pushed to use same wholesale market design in Texas.

Names mentioned by the industry as possible replacements include Suzie McClellan, public counsel for the Office of Public Utility Counsel, and attorneys Diane Lieberman and Stephanie Kroger, both in private practice.

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