News Release

March 24, 2006

Statement from CEO Tom Schrader

Regarding Third Guilty Plea In ERCOT Crime Ring Case; Former CIO Kenneth Shoquist Pleads Guilty and Agrees to Make Restitution of $120,000 to ERCOT

Today’s court actions are welcome news for the dedicated and honest employees at ERCOT who want to see justice served.  We are grateful for the hard work of the Attorney General’s office and the Department of Public Safety.  The law enforcement process is working.

ERCOT has fully and actively supported the criminal investigations of the former employees and contractors.   We have also strengthened our business processes and built an environment of strong internal controls designed to prevent abuse of this kind in the future.  

Our goals are to see justice served and to gain full financial restitution on behalf of Texas electricity customers.  ERCOT is pleased with the plea agreements and will continue to pursue restitution through civil claims and our insurance companies to recover as much of the balance as possible.

The last two years have been a difficult time for the employees of ERCOT, and we are looking forward to having this episode behind us.

BACKGROUND

Texas Attorney General Greg Abbott on Jan. 28 announced a total of 23 felony indictments against six individuals, including five former ERCOT employees, alleging organized crime and criminal conspiracy to defraud ERCOT through a web of shell companies paid for services not rendered.  The Attorney General’s announcement followed an eight-month investigation, which ERCOT supported and cooperated with in full.  The indicted former employees were former Chief Information Officer Kenneth Shoquist; former Program Development Director Steve Wallace; former Director of IT Operations and Corporate Security Chris Uranga; former Senior Data Warehouse Manager Chris Douglas; and former Physical Security Manager Carlos Luquis.  A former contractor, John Cavazos, was also indicted.  Previous guilty pleas were entered by Uranga and Cavazos, and the Attorney General has stated publicly that Douglas is cooperating in the investigation.  Sentencing for Shoquist and Uranga is set for May 4.  Pre-trial hearings for Wallace and Luquis are currently scheduled for April 6, and Luquis is scheduled to go to trial April 24. 

Read the Attorney General''s news release.

The Electric Reliability Council of Texas (ERCOT) manages the flow of electric power to more than 25 million Texas customers -- representing about 90 percent of the state’s electric load. As the independent system operator for the region, ERCOT schedules power on an electric grid that connects more than 46,500 miles of transmission lines and 650+ generation units. It also performs financial settlement for the competitive wholesale bulk-power market and administers retail switching for nearly 8 million premises 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. Its members include consumers, cooperatives, generators, power marketers, retail electric providers, investor-owned electric utilities, transmission and distribution providers and municipally owned electric utilities.

Contact

media@ercot.com

512-275-7432