Bill Magness, chief executive officer of the Texas power grid operator, will leave his post in the wake of the February energy crisis that left millions of people in the state without electricity and heat for days.
Magness is leaving the Electric Reliability Council of Texas after the board voted to terminate his employment and gave him a 60-day term notice, according to a notice to Ercot staff and contractors seen by Bloomberg News. Board members voted 6-1, with two abstaining, in favor of serving Magness with his notice.
The unprecedented outages caused as much as $129 billion in economic losses. More than 4 million Texas homes and businesses were without power over several days of bitter cold. It crippled oil and gas production, and dozens of people died. Generators, the grid operator and politicians have clashed over who is to blame, pointing fingers at power plants that didn’t prepare for winter, Texas’s highly deregulated power market, frozen natural gas wells and issues with the grid itself.
Magness will continue to serve as CEO and work with state leaders and regulators on potential reforms while Ercot’s board conducts a search for a replacement, according to the notice to staff and contractors. Magness is being terminated “without cause,” a spokesperson said, making him eligible for a severance of one-year’s current salary, according to his employment agreement. However, Magness has told Ercot’s board he won’t seek or accept a severance, according to a statement.
Brad Jones, former head of New York’s power grid, is the leading candidate to replace Magness as Ercot’s new CEO, according to people familiar with the board’s thinking. Jones was once Ercot’s chief operating officer, and is a Texan. He didn’t immediately respond to a LinkedIn message.
Magness is leaving as ERCOT faces a $2.5 billion shortfall in payments from retail power providers and others after electricity prices skyrocketed during the energy crisis. Even after it covers some of that debt by using $800 million in revenues from another market, there remains a nearly $1.7 billion deficit. If Ercot cannot come up with financing to cover the underpayments, the debt could end up being shared by everyone in the Texas market, including consumers.
Ercot’s chair and four other directors resigned Feb. 23, while two other board members resigned in the following days. The Texas Public Utility Commission chair followed suit March 1. Texas Governor Greg Abbott had called for board members and other leaders to step down in the wake of the crisis.
Magness joined Ercot in 2010, and he’s led the grid operator since 2016. His exit comes days after the head of the state’s utility regulator stepped down after receiving withering criticism by state lawmakers during hearings last week.
Magness has defended the grid operator’s decision to call for the largest forced power outage in U.S. history, saying Texas came within “seconds and minutes” of catastrophic grid failures.
–With assistance from Dan Murtaugh.
