PRESS RELEASE
From the Office of State Senator Troy Fraser

For Immediate Release
February 24, 2005
Contact: Bill Bragg - (512) 463-0124

Fraser Proposes Toughening ERCOT Oversight

AUSTIN - Senator Troy Fraser (R-Horseshoe Bay) introduced Senate Bill 743 on Thursday to increase the Public Utility Commission's (PUC) authority to oversee the Electric Reliability Council of Texas (ERCOT).

"The intent of this legislation is to clarify that the PUC has jurisdiction to review ERCOT's finances, budget, day to day management operations, and board structure," said Senator Fraser.

Earlier this year, Attorney General Greg Abbott announced the indictments of five former top managers and one associate contractor at ERCOT who reportedly embezzled millions from the organization.

"It is fortunate that this mis-management of state resources was stopped when it was and I appreciate those that worked to bring this corruption to light," said Senator Fraser. "We need to eliminate the possibility of these events ever occurring in the future and I am confident that this legislation is a positive step."

The indictments are the result of an extensive investigation by the Department of Public Safety, Williamson County District Attorney's Office, and Office of the Attorney General. The investigation uncovered a network of fictitious companies that billed ERCOT more than $2 million for work that was never completed. Often, the work was contracted to companies with nonexistent or dead employees.

SB 743 directs the ERCOT stakeholders to appoint two additional independent members to the ERCOT board of directors, as well as requires all members of the ERCOT board of directors to disclose any conflicts of interest and recuse themselves from any vote directly related to those interests.

Other requirements include requiring ERCOT board meetings to be open to the public, which would include advanced public notice and the posting of agendas for ERCOT board meetings. The bill also grants the PUC clear authority to require ERCOT to submit detailed financial information, which is necessary to scrutinize the process of setting ERCOT's administrative fee.

"I think the proposed changes are going to make consumers more confident about this essential organization," Senator Fraser said. "I am not happy about the circumstances that brought us here, but this bill addresses needed changes and allows us to move forward with confidence in this organization that plays such a vital role in the safe, reliable delivery of electricity in Texas."

Founded in 1970, ERCOT is an independent, third-party, non-profit organization responsible for overseeing the reliability and safety of Texas' electric grid.

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