Following the ERCOT Board of Directors’ decision to fire CEO Bill Magness during an emergency teleconference Wednesday night, names of his potential successor have already begun to circulate.

During a hearing before the state House’s State Affairs Committee on Thursday, Rep. Phil King (R) proposed former FERC Chair Pat Wood as a potential short-term caretaker to oversee ERCOT reforms. Wood, now Hunt Energy Network’s CEO, also chaired the state’s Public Utility Commission.

One media report said the board “reportedly already [has] a frontrunner” in former NYISO CEO Brad Jones. However, others suggest Texas’ political leaders will favor someone without personal connections at ERCOT should they need to clean house; Jones spent two years with the grid operator and was its COO before taking over at New York’s grid in 2015.

Jones abruptly left NYISO in 2018 in what was termed a “personal decision.” His LinkedIn profile lists him as “retired.” (See Brad Jones out at NYISO.)

One thing’s for sure, according to one industry insider: The next CEO will be a “tried and true, 10-gallon hat-wearing” Texan.

Magness drew political heat following the system’s near collapse last month that led to long-term power outages and misery for millions of Texans. Testifying for almost 11 hours before four state Senate and House committees on Feb. 25, Magness said he would not have done anything differently in the leadup to the massive load shed, but he admitted that ERCOT’s communications efforts could have been much better. (See Texas Lawmakers Dig into Power Outages.)

Lt. Gov. Dan Patrick, who on Monday had called for the resignations of Magness and PUC Chair DeAnn Walker (who resigned that same day) welcomed the board’s vote. (See PUCT’s Walker Steps Down from Commission.) Late Monday, Shelly Botkin also resigned from the PUC, leaving the commission with just Chair Arthur D’Andrea.

“Good news … they are both gone,” he tweeted. “Next — one of my top 31 priorities — reforming ERCOT and fixing what went wrong.”

The board voted 6-1 to invoke the termination notice in Magness’ contract without cause; however, he turned down the option to receive another year of his current base salary he was entitled to under his contract. Magness will continue in his role for 60 days, working with state leaders and regulators on potential reforms to ERCOT, the grid operator said in a statement.

The board also directed ERCOT to engage with a search firm “as soon as reasonably possible” to find a new CEO. A transition plan will be discussed during future board meetings.

Nick Fehrenbach, manager of regulatory affairs and utility franchising for the city of Dallas and representing the commercial consumer segment, voted against the motion. Magness, who was not present for an executive session before the vote, and Lori Cobos, CEO of the Office of Public Utility Counsel, both abstained.

“I would have preferred to have more time to evaluate this important matter … to evaluate my concerns,” Cobos said.

ERCOT General Counsel Chad Seely conducted the board meeting in the absence of a chair and vice chair, who were among the four independent directors who resigned Feb. 23. (See ERCOT Chair, 4 Directors to Resign.)

Magness joined ERCOT in 2010 after 14 previous years in the electric industry and served as its general counsel. He was appointed CEO in January 2016 and made $837,931 in base salary last year.

ERCOT’s board, ideally composed of 16 members, is now down to 10, including Magness. Two of the seven members who have resigned are currently being replaced by acting directors; the independent retail electric market segment’s director and alternate director are both vacant. The nominee for the fifth independent director’s seat has withdrawn his nomination.

Arthur D’Andrea, whom Gov. Greg Abbot appointed as chairman of the Public Utility Commission on Wednesday, took Walker’s seat as a non-voting member after she stepped down.

Monitor: $16B ERCOT Overcharge

ERCOT’s Independent Market Monitor on Wednesday said the grid operator incorrectly priced electricity for 32 hours following the winter storm, resulting in $16 billion in additional costs to the market.

In a letter filed with the PUC, the Monitor said it agreed with the commission’s Feb. 15 order that set wholesale prices at the $9,000/MWh systemwide price cap, designed to incent electric generation to come online. However, it noted ERCOT exceeded the PUC’s mandate by continuing to maintain the cap “after it ceased the firm load shed.”

The Monitor recommended the commission direct ERCOT to correct 33 hours of real-time prices during Feb. 18-19 “to remove the inappropriate pricing intervention” that occurred during that time. It suggested removing “most, if not all,” of the real-time online reliability deployment price adder during the price intervals, which would nearly eliminate the real-time ancillary service imbalance charge.

“We recognize that revising the prices retroactively is not ideal,” IMM Director Carrie Bivens said. “In this case however, given that the prices are inconsistent with ERCOT’s protocols and [a] commission order and that allowing them to remain will result in substantial and unjustified economic harm, we respectfully recommend that the commission take the action described above to correct ERCOT’s real-time prices.”

The PUC is scheduled to hold an open meeting Friday morning.

ERCOT’s Kenan Ögelman, vice president of commercial operations, said the market “is under a lot of financial duress” during testimony Thursday before the Texas Senate Business and Commerce Committee.

Ögelman said ERCOT — essentially the market’s billing agent — normally processes about $11 million in settlements a day. That figure exceeded $1 billion on Feb. 19, topping that each day until the grid operator cleared $2.1 billion on Feb. 24. After suspending the market on Feb. 25, staff processed more than $12.5 billion on Feb. 26.

ERCOT on Wednesday revoked retail provider Entrust Energy’s right to participate in the market because of a payment breach and transferred its 11,780 customers to other retailers known as providers of last resort (POLRs). Entrust is the second retailer to have its rights revoked, joining Griddy Energy.

A recent PUC emergency order set up TXU Energy or Reliant Energy, ERCOT’s two largest electric retailers, as the primary POLRs. (See Texas PUC Turns Focus to Customer Bills.)

ERCOT Shares List of Generator Outages

ERCOT on Thursday sent a list of all the generator issues that “had issues” during the Feb. 15-19 grid emergency to the Texas Legislature’s members. The information includes the generators’ names, the amount and length of their outages or derates, and their fuel types.

The information was requested by the four committees investigating the near collapse of the grid and its ensuing long-term outages.

The generator information is normally confidential for 60 days after each applicable operating day. Staff messaged market participants on Feb. 22, requesting they be allowed to publicly release the information in anticipation of legislative and regulatory requests.

Not all generators authorized the release. Their information is blank, with the exception of their outage or derate’s start and end times.