Texas Governor Names New Head of Embattled Utility Regulator

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Texas Governor Greg Abbott tapped a statehouse veteran to manage the ongoing fallout from February’s massive blackouts, a job that will include implementing a potential legislative overhaul of the state’s power markets.

Will McAdams will lead the beleaguered Texas Public Utility Commission, which has come under intense scrutiny in the wake of the energy crisis. He will replace Arthur D’Andrea, the lone member of the three-person agency who was asked by Abbott, a Republican, to resign on March 16.

State lawmakers including Lieutenant Governor Dan Patrick, the second most powerful politician in Texas, had lambasted D’Andrea for refusing to reverse billions of dollars in energy charges tied to the nearly week-long power outages. Abbott called for D’Andrea’s dismissal shortly after a story in Texas Monthly magazine cast the regulator as putting Wall Street’s interests ahead of Texans. The story quoted D’Andrea as saying the governor was unlikely to fire him and that he had one of the “safest jobs” in the state.

The new chair must now deal with the financial fallout from the February energy crisis triggered by a rare and powerful winter storm that left more than 100 people dead. The commission will likely need to implement many of the grid reforms winding their way through the legislature, including determining rules for power plants to winterize.

Following the blackouts, the commission came under fire for setting wholesale power prices at the maximum amount of $9,000 a megawatt-hour for more than four days during the emergency. An independent monitor hired to oversee the state’s power system said the grid operator erred in keeping that cap in place for more than 30 hours after it called for an end to blackouts, resulting in about $4.2 billion in overcharges.

State lawmakers have been at odds over whether to reverse those charges.

The Texas electricity market also faces a nearly $3 billion shortfall, with state residents unclear how much will ultimately fall to them. Several power retailers and a large rural electric co-operative have already filed for bankruptcy under the crush of high power bills.

McAdams previously served as president of the Associated Builders and Contractors of Texas and was senior staff on legislative committees helmed by Republican state Senators Kelly Hancock and Charles Schwertner. Schwertner sponsored a sweeping measure passed by the Senate recently that would overhaul the state’s electricity market. The nomination of McAdams will need to be approved by the Texas senate.

The three-person commission had already lost two members in the past weeks after DeAnn Walker and Shelly Botkin resigned. D’Andrea was named chairman following Walker’s resignation.

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