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Pablo Vegas, a utility executive who lives in Ohio, will be the new leader of Texas’s largest electric grid operator, the Electric Reliability Council of Texas. ERCOT’s board of directors announced the hiring of Vegas on Tuesday.
Vegas becomes ERCOT’s first permanent CEO in 16 months, since former CEO Bill Magness was fired in the aftermath of the February 2021 power grid disaster, when a severe winter storm left millions of Texans without electricity for days after freezing temperatures shut down natural gas plants and power plants, which rely on each other to keep electricity flowing. Hundreds of people died.
Following the deadly blackouts, Texas politicians criticized ERCOT’s board of directors because some of them did not reside in Texas and many of them resigned. At the time, a bipartisan chorus of state lawmakers expressed frustration and disbelief that many ERCOT board members, despite extensive experience in the energy sector, were living outside the state.
Now, a non-Texan will drive the state’s main power grid.
Vegas is executive vice president of NiSource Inc. and president of the company’s utilities group. NiSource, headquartered in Indiana, supplies natural gas to approximately 3.1 million customers in six states and electricity to approximately 470,000 customers in Indiana, according to the company.
Vegas, who was born in Peru and served as president and chief operating officer for broadcasting company AEP Texas from 2008 to 2010, did not respond to questions sent in Monday by the Texas Tribune. Vegas has held a number of other senior management roles at AEP in addition to his two-year stint at the company’s Texas branch. AEP, which supplies power to over 5 million customers in 11 states, is headquartered in Columbus, Ohio, where Vegas lives with his family.
Vegas will begin on Oct.18 and will receive a base salary of $ 990,000 per year, under its contract, which has been approved by ERCOT and the Public Utility Commission. In addition to the base salary, ERCOT will also pay Vegas $ 6.68 million over six years, and Vegas could achieve a variety of payout incentive metrics that could further boost its pay.
Magness told lawmakers that he made $ 803,000 a year. Brad Jones, ERCOT’s interim CEO who was hired for a temporary position after the disaster but had no plans to stay at work that long, makes $ 500,000 a year, under his contract, which the Tribune got through a request for open records. Jones will also receive a one-time lump sum of $ 169,640 when he receives his final salary from ERCOT.
It is not clear how much independence Vegas and ERCOT will have in managing the electricity grid. gov. Greg Abbott, who will run for re-election in November, has closely monitored how and whether ERCOT has been communicating information on the network to the public since the winter storm of 2021, which has become a major election issue for its Democratic opponent, Beto O ‘ Rourke.
Current and former directors of energy companies, power grid employees, longtime energy analysts and consultants told the Tribune that Abbott also had unprecedented power over ERCOT’s CEO search and vetoed at least one candidate: a former executive of a large Texas electricity supplier and former CEO of a California utility, while his favorite candidate, the CEO of the Austin-based Lower Colorado River Authority, has repeatedly turned down the job.
Vegas did not contribute any money to Abbott, Lt. gov. Dan Patrick or House Speaker Dade Phelan, according to a Tribune analysis of the campaign’s financial documents.
Eric Lau helped bring this story back.
Disclosure: The Lower Colorado River Authority has been a financial supporter of The Texas Tribune, a nonprofit, non-partisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial advocates play no role in Tribune journalism. Find a full list of them here.
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