ERCOT CEO Refuses $800K Payout Following Firing
The recently ousted CEO of the entity that maintains and operates much of Texas's electricity grid has told its board of directors he will not accept an $800,000 severance.
Bill Magness was fired, officially without cause, Wednesday. He had been president and CEO of the Electric Reliability Council of Texas, but was removed following last month's winter storm that resulted in days-long blackouts for more than 4 million Texas residents.
Separately, a Bloomberg report Thursday disclosed a $16 billion pricing error by ERCOT the week of the storm. ERCOT, which sets wholesale power prices, set the cost of electricity at the $9,000-a-megawatt-hour maximum, a normal step during an emergency.
But in a letter to the Public Utility Commission of Texas, which oversees ERCOT, Potomac Economics wrote that ERCOT kept market prices for power at that level for too long after the storm's widespread outages. Potomac Economics is the independent market monitor for the Texas PUC.
The letter states ERCOT should've reset those prices the following day. The decision to keep prices at such a high level resulted in $16 billion in additional costs to power companies. It's unclear if Magness was directly responsible for that decision.
The hefty costs following the storm has already forced at least one power company to file for bankruptcy protection.
Brazos Electric Power Cooperative, the largest power cooperative in Texas filed for bankruptcy this week, citing a massive bill from ERCOT. The company in court documents said it received an unpayable $1.8 billion bill from ERCOT.
More leaders resign
DeAnn Walker, the chairwoman of the Public Utility Commission of Texas, also resigned this week following calls from Lt. Gov. Dan Patrick for her to quit. Five out-of-state board members of ERCOT resigned last month.
Magness was subject to "at-will employment," according to his work agreement shared with the media. This meant he could've been fired at any time with or without cause.
ERCOT will exercise the 60 days' termination notice pursuant to Magness's employment agreement. He will continue to serve as the organization's president and CEO during the transition period.