PRESS RELEASE
November 09, 2004
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PUC Audits to be Completed November 15

ERCOT Action Plan Underway

Two major ERCOT audits ordered by the Public Utility Commission (PUC) will be completed and submitted to the PUC next Monday, Nov. 15: a management and internal controls audit by Deloitte & Touche and an internal IT security assessment by Ernst & Young.  ERCOT expects parts of the reports to be critical of numerous existing issues. 

PUC Chairman Paul Hudson has requested that ERCOT prepare a detailed plan for implementing the auditor’s recommendations, provide monthly progress reports at PUC open meetings, and discuss plans for necessary follow-up audits with the PUC and the ERCOT Board.

Statement from Tom Schrader, ERCOT CEO

“ERCOT intends to comply fully with all three of the chairman’s requests.  We welcome this scrutiny, and I remain confident that ERCOT will emerge a stronger organization as a result of the audits.  I believe we have already made a good start in addressing some of the issues identified in the audits, particularly, in three areas: tightening management practices and controls, strengthening accountability, and improving efficiency in use of resources.  ERCOT is fully committed to making the changes necessary to regain public confidence and trust.”

Highlights of ERCOT Management Action Plan

Highlights of management changes already underway at ERCOT are listed below.

Tightening Management Practices and Controls

  • Strengthened numerous accounting controls over contractors
  • Requiring mandatory competitive bids for contractors and outside services
  • Requiring more extensive background checks on employees and contractors
  • Completed initial rounds of mandatory management training on contractor policies and procedures
  • Implemented an anonymous reporting service for employees to report suspected activity

Strengthening Accountability

  • Expanded 2005 budget dialogue with PUC staff and public, including more detailed budget information and more public meetings
  • Increased resources dedicated to communication with the PUC and Legislature

Improving Efficiency in Use of Resources

  • Freezing the administration fee at $.44 in the proposed 2005 budget
  • Reducing debt by $5 million per year in both 2005 and 2006
  • Reducing reliance on outside services from 25% to 14% of company labor for 2005
  • Filed initial insurance claim for recovery of funds lost due to employee misconduct

A more-detailed, complete list is posted on the ERCOT Web site, or contact Dottie Roark, 512-225-7024, droark@ercot.com, if you would like the PDF emailed to you.

The Electric Reliability Council of Texas (ERCOT) manages the flow of electric power to 21 million Texas customers – representing 85 percent of the state’s electric load and 75 percent of the Texas land area. As the independent system operator for the region, ERCOT schedules power on an electric grid that connects 38,000 miles of transmission lines and more than 550 generation units. ERCOT also manages financial settlement for the competitive wholesale bulk-power market and administers customer switching for 6 million Texans in competitive choice areas. ERCOT is a membership-based 501(c)(4) nonprofit corporation, governed by a board of directors and subject to oversight by the Public Utility Commission of Texas and the Texas Legislature. ERCOT's members include consumers, cooperatives, independent generators, independent power marketers, retail electric providers, investor-owned electric utilities (transmission and distribution providers), and municipal-owned electric utilities.

Contact
Dottie Roark 512-225-7024