The Electrical Reliability Council of Texas (ERCOT) introduced this week that Alejandro Hernandez and Sigmund Cornelius, who each have had prolonged careers within the Houston-area power business, could be becoming a member of its board of administrators.
Hernandez and Cornelius started their new positions instantly Monday and have been chosen by the board choice committee for ERCOT, which operates the state’s electrical grid. The 2 are changing Paul Foster and Robert Felxon, who each introduced they might be leaving the board final 12 months. The ERCOT board of administrators is comprised of 12 members.
College of Houston power fellow Ed Hirs mentioned ERCOT basically capabilities to realize the objectives set by the Texas Legislature, that means that the board of administrators doesn’t have a lot autonomy.
“It is form of a fiction that it is operated by a board of administrators or an unbiased board of administrators,” he mentioned. “The course for the Texas grid is actually set by the principles that the legislature has laid out.”
Hernandez is the previous founder and CEO of Cumulus Knowledge, a hyper-scale knowledge heart related on to nuclear energy, in line with ERCOT. He additionally beforehand served because the CEO and director of Talen Power, a Houston-based energy firm that went bankrupt in 2022, in line with Reuters. The corporate left chapter in 2023 after a restructuring.
In keeping with ERCOT, Cornelius most lately served as president of Freeport LNG Improvement, a liquified pure gasoline exporter working south of Houston alongside the Gulf Coast. Earlier than main Freeport LNG, he labored at Houston-based ConocoPhillips from 1980-2010, finally working his approach as much as senior vp and CFO earlier than retiring.
Following the winter storm of 2021 — which brought on tens of millions of Texans to lose energy and likewise led to the deaths of greater than 200 folks statewide — Texas lawmakers handed the Public Utility Regulator Act.
The legislation required that ERCOT’s three-member board choice committee be composed of three members every appointed by a special state official. The governor, lieutenant governor and speaker of the home are every given one appointment. The legislation additionally required that every one choice committee members should reside in Texas.
The choice committee is in command of selecting the remaining eight members of the board of administrators, who every serve a three-year time period. A retained outdoors consulting agency additionally assists within the collection of the eight different members, in line with ERCOT.
Hirs mentioned these new guidelines haven’t resulted in a lot change when it comes to the board’s administration.
“ERCOT is the one purchaser of the wholesale market daily for electrical energy throughout its grid. It is also the one vendor,” he mentioned. “ERCOT solutions to the Public Utility Fee (of Texas). The members of the Public Utility Fee are appointed by the governor. So, there’s just about a direct line.”
Hirs additionally mentioned ERCOT has not made the adjustments essential to right the errors that led to the rolling blackouts throughout the 2021 winter storm.
“The ERCOT market’s main attribute is that of being electrical energy solely,” he mentioned. “So, solely these mills which might be truly producing electrical energy receives a commission within the wholesale market. The equal, if you’ll, could be if the Astros have been paid that approach, then solely these gamers taking the sector in a recreation would receives a commission.”
This implies there may be little incentive for power producers to construct new energy crops, Hirs mentioned.
“Peak demand throughout the winter and peak demand throughout the summer season requires all palms on deck,” he mentioned. “However for the higher a part of the 12 months, we do not want that further working capability. Since we do not pay for that to be there, we have had a scenario the place the financial progress of the state has outstripped any progress in electrical energy provide.”
