ERCOT hires Pablo Vegas as new top executive to help manage Texas' power grid

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The operator of the state’s main electricity grid has hired a new CEO, ending a 16-month period in the aftermath of the grid's near collapse in February 2021 during which the agency was helmed on an interim basis because its previous top executive had been fired.

Pablo Vegas, a longtime utility executive who lives in Ohio, will take over at the Electric Reliability Council of Texas beginning Oct. 1, according to ERCOT.

Brad Jones has served as interim CEO since May 2021, after former CEO Bill Magness was fired in the wake of the grid calamity, when extensive blackouts during a severe winter freeze contributed to hundreds of deaths and billions of dollars in property damage.

Vegas currently works as executive vice president of Indiana-based NiSource Inc., a provider of natural gas and electricity, and as group president of its utilities division, NiSource Utilities. A native of Peru, he formerly held executive positions at American Electric Power, including president and chief operating officer of AEP Texas in 2008, according to ERCOT.

More:Changes to Texas' power grid costing state hundreds of millions of dollars

"In Pablo, we’ve found a leader for ERCOT with deep experience at one of the nation’s largest regulated utilities, who brings a strong record of operational excellence managing system growth with a diverse and rapidly evolving energy mix," said Paul Foster, chairperson of ERCOT's board of directors. "He clearly understands the challenges we face in Texas as one of the fastest growing and most dynamic energy grids in the United States, and how to meet them."

Vegas will be paid a base annual salary of $990,000, according to his ERCOT contract, well above the salaries paid to either Jones or Magness. Jones is paid $500,000 annually in base salary, while Magness reportedly earned about $815,000 in base salary.

In addition, Vegas will receive a lump-sum payment of $247,500 by Dec. 31, and he will receive "make-whole" payments totaling $6.68 million over the next five years. The make-whole payments are intended to "make up for earned payments, incentives and grants (Vegas) is forgoing from his current employer because of his agreement to serve as president and chief executive officer" of ERCOT, his contract says.

More:Despite calls to conserve, top regulator says he has 'full confidence' in Texas power grid

According to the contract, Vegas also will be eligible for up to $1.4 million annually in combined short- and long-term incentive payments over the next five years, provided he achieves performance benchmarks set by ERCOT's board.

Jones, who will remain employed by ERCOT for several weeks after Vegas takes the helm to help with the transition, will receive a lump-sum payment of $169,641 when he collects his final paycheck, according to his contract.

In a written statement, Vegas said he is "excited to return to Texas both personally and professionally," calling the job at ERCOT a "once-in-a-lifetime opportunity to lead an exceptional organization of people and make a positive impact on millions of Texans.”

He will face plenty of scrutiny from politicians and the public alike. ERCOT and the Public Utility Commission of Texas, which oversees ERCOT, have been working to enact new policies and procedures aimed at increasing the reliability of the grid in the aftermath of last year's disaster, while also trying to rebuild public confidence in it at the same time.

Extensive and prolonged blackouts during the February 2021 freeze contributed to 246 deaths across 77 counties, according to an official state tally, although other estimates have put the death toll much higher. ERCOT manages the power grid that an estimated 90% of Texas relies upon.

This article originally appeared on Austin American-Statesman: ERCOT hires new top executive to help manage Texas' power grid