Peter Lake, appointed to restore the Texas Public Utility Commission’s credibility after the disastrous 2021 winter storm, said Friday he is stepping down as PUC chair.
His resignation comes after he apparently lost the faith of Texas lawmakers. Lake pushed forward a complicated and novel market design, the performance credit mechanism (PCM), that would benefit primarily thermal generation. The Texas Legislature took little action on the PCM during its recently concluded session other than proposing guardrails that would reduce its financial benefits. (See Clean Energy Escapes Texas Legislature’s Wrath.)
Gov. Greg Abbott announced Lake’s resignation late Friday afternoon, a time normally reserved for dumping bad or uncomfortable news and hoping it goes unnoticed over the weekend. Abbott, who appoints members to the five-person commission, promised to name a new chair “in the coming days.”
Lake will leave the PUC July 1, two months before his term expires.
“The most surprising unsurprising news,” said one industry insider, who wondered whether Lake really enjoyed his job.
Other ERCOT stakeholders weighed in as well.
Attorney Katie Coleman, who frequently testifies before the PUC and represents Texas Energy Industrial Consumers, tweeted that she and Lake disagreed on market policy, but that he “had good intentions, tried to bring a fresh perspective, and put in a lot of long hard hours for the state.”
“He will be remembered for his lack of knowledge of simple microeconomics, unexplained support of the anti-market and pro-oligopoly PCM model, and attempting to implement an authoritarian power structure by removing stakeholders from the ERCOT process,” tweeted another interested observer, who uses the ERCOT Traders Anon handle.
The grid operator’s market participants have been largely sidelined by 2021 legislation that replaced the previous board, composed of market participants and independent directors, with eight independent directors selected by the state’s political leadership. The board then created a reliability and markets subcommittee that creates another layer of separation between stakeholders and the directors.
Asked about the PCM’s fate, a PUC spokesperson said it would be “premature” to discuss any legislation’s effect until it becomes law.
Abbott selected Lake to lead the PUC in April 2021, saying he was confident Lake would “bring a fresh perspective and trustworthy leadership to the PUC.”
Lake replaced DeAnn Walker, who resigned under pressure following the February winter storm that nearly collapsed the ERCOT grid and led to days of blackouts that killed hundreds of Texans and caused billions in financial damage. (See Abbott Appoints New Texas PUC Chair.)
In a statement provided by the PUC, Lake thanked Abbott for the “incredible opportunity” to serve the state.
“When I arrived at the [PUC] in April 2021, our electric grid was in crisis,” he said. “Thanks to the hard work of the teams here and at ERCOT, and my fellow commissioners, today our grid is more reliable than ever. While there are challenges ahead, I know the [PUC] is well positioned to continue the incredible progress we’ve made.”
During Lake’s tenure, the PUC ordered weatherization requirements for generators and transmission facilities, made it easier to build transmission facilities, and directed ERCOT to make several tweaks to the market. However, as with the PCM, he also focused on dispatchable, or thermal, generation and highlighted renewable energy’s intermittency.
Abbott praised Lake for being a “true public servant who stepped up during a critical time in our state” to rebuild the PUC and “Texans’ trust in those charged with providing reliable power.”
“With Lake at the helm of the PUC,” Abbott said, “we have ensured that no Texan has lost power due to the state grid” since legislation passed in the wake of Winter Storm Uri.
Lake previously chaired the Texas Water Development Board, which provides planning for the state’s water resources and wastewater services. He brought a financial background with him, having led business development at Lake Ronel Oil and special projects for equity firm VantageCap Partners.
