Can an energy regulator who’s on the board of an entity he oversees apply for the top job there? Industry and government sources say that’s what Barry Smitherman, the chairman of Texas’ influential Public Utility Commission, is doing. And energy watchdogs are wary.
Smitherman isn’t just a governor-appointed public utility commissioner who's responsible for regulating the electric industry. He’s also an ex-officio member of the board of directors of the Electric Reliability Council of Texas (ERCOT), a nonprofit that manages the flow of power across much of the state. Industry insiders and government sources say that without resigning from those posts, Smitherman is vying to fill ERCOT’s vacant president and CEO job, which pays $350,000 per year.
Smitherman didn't return phone messages asking whether he’s in the running for the job. Instead, he e-mailed a statement to The Texas Tribune. “Executive searches, like the CEO search at ERCOT, are by their very nature highly confidential,” he wrote. “Public discussion about who may or may not be, or who has been or may become, a candidate isn’t appropriate.”
But energy watchdogs say a Smitherman employment bid could pose a “double conflict” — first as a PUC commissioner charged with establishing the rules under which ERCOT operates and, second, as a board member (albeit a non-voting one) of the agency he’s asking to hire him. It's also unclear whether the laws governing the PUC allow a commissioner to seek the ERCOT job. Texas' Public Utility Regulatory Act says commissioners can't seek employment with a "public utility" while they're on the PUC. While ERCOT doesn't technically qualify as a public utility, industry insiders say it's a gray area, and the spirit of the law looks prohibitive.
Tom “Smitty” Smith, director of the nonprofit Public Citizen's Texas office, says it’s a conundrum, because Smitherman is highly qualified for the ERCOT job. But he said Smitherman's play for the job could create a scenario where fellow ERCOT board members feel pressure to hire him or risk damaging their relationship with him on the PUC if they don’t. “If you vote against the sitting chairman of a commission through which all of your business is done, what do you put at risk?” Smith asks. At a minimum, Smith says, it would be appropriate for such a candidate to step down from the PUC job before interviewing for the ERCOT job.
Gov. Rick Perry appointed Smitherman to the PUC in 2004; he was reappointed and named chairman in 2007. He’s highly regarded across the industry — he was honored by the American Wind Energy Association for pioneering renewable energy policy and was named one of the energy and utility industry’s “great transformers” of 2010 by a partnership including Forbes Magazine. He went to college at Texas A&M University, got his law degree at the University of Texas and got his master's in public administration at Harvard University. He worked as an investment banker until 2003, when he started a second career as a prosecutor with the Harris County District Attorney’s Office.
Several industry and government sources confirmed that Smitherman has thrown his hat in the ring for the ERCOT job but declined to be named in this article because of their working relationships with the PUC and ERCOT.
Asked whether Smitherman has notified Perry about a potential bid for the ERCOT job, a spokeswoman for the governor deferred to Smitherman, saying only that Perry hasn’t “received any notice of resignation.”
Officials at the PUC and at ERCOT said they couldn’t confirm whether Smitherman was in the running for the ERCOT job, which is currently held by interim president and CEO H.B. “Trip” Doggett. A spokeswoman for ERCOT said because the hiring is a personnel matter, all meetings are happening behind closed doors in executive session.
Doggett replaced Bob Kahn, who resigned in November. Kahn was general manager for Austin Energy and a former ERCOT board member when he was hired in 2007 (he left the board in 2006, and was hired in May 2007).