Abbott appointee resigns as chair of power grid regulator

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Peter Lake, chair of the Public Utility Commission — which regulates the state’s power grid — resigned Friday, according to a statement from Gov. Greg Abbott’s office.

Lake was appointed by Abbott in April 2021 following the devastating near-statewide power outages that killed hundreds of people during Winter Storm Uri that February. In that time, he spearheaded a plan to help the state’s grid withstand weather disasters.

But state lawmakers soured on the agency-led proposal, which was approved by the commission in January, at the start of this year’s legislative session. Several lawmakers argued that it didn’t go far enough to ensure new fossil fuel-fired power plants would be built.

Lake had advocated for more of a technology-neutral approach than some lawmakers.

The agency’s plan, which Lake had a heavy hand in crafting, would create a new economic tool called performance credits. The credits would direct funds to companies that operate on-demand power sources, such as natural gas plants and batteries, paid for with an estimated 2% increase in customers’ electricity bills. The idea: A financial incentive would cause companies to build more power plants or keep existing ones in service longer.

But ultimately, state lawmakers crafted and passed legislation with their own idea — which they said would ensure more gas plants are built. The legislation, which awaits the governor’s approval, would create a fund designed to encourage the construction of gas-fueled power plants by providing low-cost loans and paying bonuses for connecting new gas-fueled plants to the state’s primary grid. Another bill, also awaiting approval by Abbott, would change how companies that produce electricity can make money in Texas’ electricity market.

After decades of support for renewable energy, Republican lawmakers have turned against renewable energy sources such as wind and solar. During the 2021 and 2023 legislative sessions, Republican lawmakers pushed legislation to prop up fossil fuel-burning power plants.

Texas produces the most oil and gas of any state in the nation, but renewable energy has threatened the industry’s domination in the electricity sector. Wind turbines and solar panels, which can produce electricity at a very low cost, provided more than a quarter of the state’s electricity last year, according to the U.S. Energy Information Administration.

Both of the bills passed this year, which were supported by Lt. Gov. Dan Patrick, would require dramatic changes to the commission’s plan to harden the grid. PUC spokesperson Ellie Breed said it would be “premature” for the agency to comment on how the legislation could affect the plan before it takes effect.

In a statement provided through a PUC spokesperson, Lake expressed confidence in the state’s electric grid — just a month after he’d warned the grid is at risk for outages this summer.

“When I arrived at the PUC in April 2021, our electric grid was in crisis,” Lake said in a statement. “Thanks to the hard work of the teams here and at ERCOT [the Electric Reliability Council of Texas], and my fellow commissioners, today, our grid is more reliable than ever.”

Lake, in the statement, said the agency had “delivered” on its promise to Texans to keep the lights on.

“While there are challenges ahead, I know the PUC is well positioned to continue the incredible progress we’ve made.”

Lake took over the PUC chair position for DeAnn Walker, who resigned in March 2021 in the aftermath of the power crisis, following several calls for her resignation, including from Patrick.

Michael Webber, an energy resources professor at the University of Texas at Austin, said that Lake was an “excellent public servant” whom he found to be smart and open to new ideas.

“After two years of grueling work at the PUC to tackle some thorny grid issues, I’m not surprised he’s ready for his next challenge,” Webber said.

The governor will announce a new PUC chair in the coming days, and Lake will serve as a commissioner for the agency until July 1.

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