AUSTIN, TX - The Texas Senate moments ago passed legislation authored by Sen. Kelly Hancock (R-North Richland Hills) overhauling the Electric Reliability Council of Texas (ERCOT) Board of Directors.

"Our investigative hearings into February's winter storm outages exposed across-the-board failures, and none is more glaring than ERCOT's lack of preparedness and independent leadership," said Hancock, Chairman of the Texas Senate Business & Commerce Committee. "When the Electric Reliability Council assures you everything looks good, they're ready, and then Texans end up facing dangerous, frigid conditions in our own homes, it's completely unacceptable, and it can never happen again. This bill eliminates affiliated industry seats on the ERCOT board - no more fox guarding the henhouse - and brings the new leadership and strong oversight that are the foundation we need to fortify and protect the Texas grid."

Senate Bill 2 improves legislative oversight of ERCOT and reforms and restructures its Board of Directors in several ways, including requiring members to live in Texas so their decisions directly impact electric reliability in their own homes, businesses and communities.

The filed version of the bill required that the Chairman of the Board and its five unaffiliated members be appointed by the Governor and confirmed by the Senate.

The Conference Committee Report adopted by the Legislature today strengthens that provision by creating an 11-member board consisting of eight fully-independent general members, plus the Chairman of the Public Utility Council (PUC; non-voting), the ERCOT CEO (non-voting), and the Office of Public Utility Counsel's Chief Executive and Public Counsel representing consumers and small-commercial consumers (voting).

Eliminating industry-affiliated positions represents a major shift in the way ERCOT is governed.

The independent members will be selected by a search firm based on executive level experience in a range of fields, including finance, business, engineering, risk management, law and electric market design. None of them may own a financial interest in the companies operating in the ERCOT market.

Once selected, those members must be confirmed by the newly-created Board Selection Committee consisting of three appointees: one each from the Governor, the Lt. Governor and the Speaker of the House. This committee will also select the Chair and Vice-Chair.

SB 2 additionally requires all major protocol changes at ERCOT to be reviewed by the PUC before adoption, giving the PUC veto authority over those changes.

To read the full text of the bill, visit capitol.texas.gov.

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