AUSTIN — New ERCOT CEO Pablo Vegas starts work Monday overseeing Texas’ beleaguered electricity grid, aiming to make it so reliable that Texans don’t think about it, even in frigid or scorching temperatures.
Vegas, 49, comes to an agency that continues to absorb blame for the catastrophic February 2021 winter storm. More than 200 Texans died, according to official estimates, although others put that number much higher.
“What ERCOT has been doing over the last 12 to 18 months has been executing,” Vegas said. “They’ve been improving the way that they operate the grid so that they never come to a place where they have to ask somebody not to have power.”
The Electric Reliability Council of Texas, which has around 800 employees, has been without a permanent CEO since its board fired Bill Magness in March 2021.
Vegas’ salary, incentives and other payments will exceed $3 million, making him one of Texas’ top paid public employees — though not on the level of the state’s highest-paid football coach, Texas A&M’s Jimbo Fisher, who earns $9 million a year.
Born in Peru, Vegas was raised in Indiana and studied electrical engineering at the University of Michigan. He moved into business management, which led him to Corpus Christi to work for the utility AEP Texas, serving the Gulf Coast, South Texas and parts of West Texas. He continued to work for AEP in Ohio before moving to the utility NiSource in 2016. He left there as vice president and chief operating officer.
Vegas, 49, plans to move to the Austin area, where ERCOT is headquartered. He is married and has three children ages 21, 18 and 14.
Ahead of his first day of work, Vegas sat down for a wide-ranging, virtual interview with The Dallas Morning News.
He talked about why he wanted the job in the wake of scrutiny after the 2021 storm, the politics involved in delivering electricity and how ERCOT can balance the need to use energy from renewable and fossil fuel sources.
The interview has been condensed and edited for length and clarity.
ERCOT continues to be blamed for the mass outages in the February 2021 storm. Being CEO is a job in which you receive all the blame when things go wrong and none of the credit when things go right. Why would you take this job?
You just described the role of any utility executive anywhere in the country. Because when things go right, nobody notices. And when things go wrong, everybody does and you get all the blame.
What really compelled me to this job and this opportunity was really about the underlying purpose of what our economy is about. ERCOT helps to support the reliable operations of electric service for the 26 million Texans and every business that relies on them. They are doing so in an environment where the economy is growing faster than anywhere else in the country, where the energy landscape is changing more rapidly and becoming more complex than anywhere else in the country. When you think about the penetration of renewables in Texas, it’s at the highest levels of any [power grid] in the country.
When you look at those factors, to be able to come down and provide leadership and to have some influence and to help guide the next evolution of where ERCOT is going to go, it has real purpose and impact.
You met with Gov. Greg Abbott on Sept. 6. While this is an operational job, it is a political job as well. How do you plan to handle the political nature of it?
The fact that the governor cares about it and wants to ensure that the [Public Utility Commission] and ERCOT have what they need in order to be successful is a great trait. That’s important, and I’m appreciative of that fact. The reality is the more political aspects of this job really do fall to the PUC. They are the more politically pointed entity in the whole process; they have that governance oversight role for ERCOT.
I’m there to support it operationally. I’m there to support it in terms of, ‘Here’s how ERCOT is running, what it needs, where the failures have been, where the successes have been, and what needs to change in order for us to continue to be successful.’
That all being said, in my experience as an operating company president for AEP Texas, as an operating company president for AEP Ohio, being the chief operating officer and a group president at NiSource over all of its utilities, there is absolutely a political aspect to all utility work because of how important electric and gas and energy is to politics and the economy in any state.
There’s always been a facet of the work that I’ve done historically that has involved me in the political conversation and to help represent what’s going on and the issues and the opportunities. And so it’s something that I feel comfortable with.
A recent Dallas Morning News/University of Texas at Tyler poll found that only 14% of Texans have high confidence in the grid’s stability. Nearly half of Texans are not confident in its reliability and 20% have zero confidence in the grid. How do you rebuild that trust?
It’s a really concerning set of facts to hear that feedback, because what you want and expect for an electric grid is for people to not have to really think about it, because it’s always there. And it’s always reliable, and that, frankly, has been the goal of utilities and the electric grid operators.
What I think we have to do to get back to that place where Texans don’t need to be thinking about this every day, we have to continue to execute. And what ERCOT has been doing over the last 12 to 18 months has been executing. They’ve been improving the way that they operate the grid so that they never come to a place where they have to ask somebody not to have power. That has to be the way that you rebuild trust — through steady, consistent execution.
ERCOT’s deregulated energy market, which lets Texans choose from multiple providers in the state, has been blamed for contributing to the blackouts during the 2021 storm. The Public Utility Commission is in the process of revamping the market’s design. But if you had a magic wand, how would you restructure the ERCOT market?
To me the magic wand is to get into a nice coordinated way to advance both continuing renewables, continuing dispatchable energy and matching those to the expected economic growth needs Texas is going to have and the consideration of extreme weather events that could come up at any point in time. We have to be prepared for either one of those scenarios.
Whatever the economy brings and whatever the weather brings, we have to have energy and electricity that is ready to go without question. [Note: Dispatchable energy refers to power provided by plants that operate on demand, most often by burning natural gas.]
How do you view the future of Texas power production? What is the balance between clean, weather-dependent renewable energy and reliable fossil fuel generation?
I see continued advancement of both. It’s important to continue to build dispatchable. It’s important to continue to advance renewables. And from all evidence, the renewables growth is going to continue to happen, which I think is great.
This next evolution of the phase two market I think is going to find ways to ensure that we incentivize and build enough dispatchable energy to balance it and to help keep both growing at the right pace.
But what’s really exciting about the future of the energy market in Texas is the potential to start bringing in advanced technologies that today we’re starting to see permeate on the distribution grid. And I’m talking about things like plug-in electric vehicles, batteries that are in homes like the battery walls that Tesla sells.
We’re getting a lot of new interesting load-side resources that are nontraditional, like cryptocurrency miners. Their load profile is one that you can really integrate into how you manage the grid. And if you look at all those pieces together and think about integrating them down the road in terms of managing the actual electric system, there are some really unique innovations that could happen that could improve the efficiency, cost, performance and reliability that we haven’t even scratched the surface on yet.
What is it about Texas that makes you want to return?
I love the opportunity to live and work in a state that is really growing. Growth solves so many problems when you’re in the utility industry. Growth is something that helps to bring investment. It helps to bring more people. It helps to bring more companies and it helps to diversify the economy. Those are all great attributes for an electric grid and for utility companies overall. So I love the facet of the economic conditions within Texas.
I love the opportunity to rebuild the trust in a long storied brand, which ERCOT is, and to work with a team.
There’s a strong passion for getting it right. And I want to be part of a team that’s really interested and willing to do whatever it takes to get it right.
CORRECTION, 12:35 a.m., Oct. 4, 2022: An earlier version of this story said Vegas was a government worker. ERCOT operates as a membership-based 501(c)(4) nonprofit corporation. It is subject to oversight by the Public Utility Commission of Texas and the Texas Legislature, and the Texas Supreme Court let stand a lower court ruling that ERCOT had government immunity and could not face lawsuits over the 2021 blackouts.