The Stakeholders' Golden Rule

Who put ERCOT in charge of public policy?…

by Raymond Giuliani

I get it now. ERCOT’s responsibilities go further than just ensuring electric power reliability and facilitating competitive wholesale and retail markets. It is in the business of setting public policy for all Texans.

This epiphany came to me through an old ERCOT contact. He was talking with an ERCOT stakeholder who had heard about my new book, “The Stakeholder’s Golden Rule.” That stakeholder was not happy with my book – “Ray never understood the complexities of managing public policy,” he said. That stakeholder had been participating in ERCOT membership governance since its inception. I guess that makes him an expert on all things ERCOT.

I want to thank that participant for making the focus of my book crystal clear. That ERCOT membership governance was the root cause of the problems associated with the Texas Storm of February 2021. The Technical Advisory Committee of ERCOT, all member stakeholders, determines all rules of engagement for ERCOT. Their “protocols” are the script that ERCOT employees must follow.

Some stakeholders on the Technical Advisory Committee have their heads in the clouds or elsewhere, thinking they are in the public policy business. In contrast, other stakeholders take advantage of them by railroading protocols through the committee catering to the business needs of generators and energy marketers. Keep in mind that ERCOT was a brainchild of ENRON. They knew exactly what business ERCOT was in when they created the stakeholder governance structure.

Those stakeholders that think ERCOT is in the public policy business never worked in Corporate America. They have been drinking government cool-aid their entire career and have never been dependent on consumers to determine the fate of their business ultimately. Now perhaps, the business of ERCOT is a bit clearer to them. Their public policy approach to ERCOT governance needs to include the responsibility that the events of February 2021 should never happen again. The issues aren’t complex, just plain old tough business decisions that, frankly, ERCOT stakeholders are not equipped to address.

Raymond Giuliani, former Chief of Market Operations at ERCOT, has pulled back the curtain on the inner workings of ERCOT in his new book, The Stakeholders’ Golden Rule, available now at Barnes & Noble, Amazon, and Books A Million


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