AUSTIN, Texas — A Columbus, Ohio-based natural gas and electric utility executive has been named the president and CEO of the Texas power grid operator.
The selection of Pablo Vegas to head the Electric Reliability Council of Texas, or ERCOT, comes about a year and half after a devastating February’s 2021 winter storm left dozens dead, millions without power for days and cost the state and consumers billions.
Vegas’ selection was unanimously approved Tuesday by the ERCOT board, and its regulator, the Public Utility Commission of Texas, whose members are appointed by the governor. He will start his new job in October.
"With Pablo, we are getting the leader we have been looking for: extensive experience with regulated utilities, a demonstrated record of managing a system of diverse energy resources, and most importantly an unwavering commitment to reliability," said Paul Foster, ERCOT's board chair.
He will be coming on board with a lucrative compensation package. Vegas' base salary will $990,000. He'll also be eligible for annual incentive payments totalling $1.4 million.
Vegas will also be paid $6.8 million in "make-whole payments" spread out over the next six years.
And that's not all.
He will receive a $248,500 lump sum payment this year.
"My quick reaction is that the salary is not out of line with" the salaries of the CEOs of other power grids, said Beth Garza, ERCOT's former independent grid monitor.
Garza told WFAA that she sees the "make-whole" payments "as the price that had to be paid to get someone to come on to the hot seat."
"I don't know anything about Mr. Vegas, but I wish him all the best," Garza said. "His biggest external task will be to re-earn the confidence of regulators and politicians in the ERCOT organization. Internally, he will need to bolster the organization's morale, ensuring they perform at the highest standards."
Vegas will be assuming the helm as ERCOT nears the end of what will either be the hottest or the second hottest summer in Texas history.
"Consumers are hurting badly in this state with the average price of power at 20 cents," said Doug Lewin, an Austin-based power grid expert. "I'm eager to see how Mr. Vegas (and the PUC and the Legislature) solve for both reliability and affordability."
Lewin told WFAA that the current approach of ERCOT and the PUC has been "has been reliability at any cost."
"Texas will not be an attractive place for businesses to locate and more Texans won't be able to pay their energy bills if we can't solve the affordability crisis while we solve the reliability crisis," Lewin said. "He's got a tough job ahead; I don't envy him even though he'll be paid more than $2 million per year."
Vegas is currently executive vice president at NiSource Utilities, a Columbus, Ohio, based natural gas and electric utility company. The company serves almost 4 million customers across six states. He has been with the company since 2018.
He was previously an executive with American Electric Power and served as AEP’s president and Chief Operating Officer of its Texas operations from 2008 to 2010.
"Pablo is the right leader at the right time to help us address the complex grid we have (and) the dynamic mix of resources we have," said Public Utility Commission Chairman Peter Lake.
Vegas replaces Brad Jones, who took over as ERCOT’s interim president and CEO, in May 2021.
The prior CEO and president, Bill Magness, was fired in March 2021, in the fallout from the 2021 winter storm.
One hundred and seven candidates applied for the job, and 21 were interviewed.
ERCOT employs about 800 people and its grid provides power to about 25 million Texans.