Electric Reliability Council of Texas Inc

“Ercot is governed by a board of directors composed of 12 directors (nine voting and three non-voting). Eight of the voting directors are selected by a statutorily created ercot board selection committee and may not have fiduciary duty or assets in the electricity market for the ercot region. The remaining voting director is an ex officio director, the public counsel. The three non-voting directors are also ex officio, that is, the chair of the public utility commission of texas, a second commissioner of the public utility commission of texas who rotates annually, and ercot's chief executive officer.”

“As of december 31, 2024, ercot's membership included 356 voting and non-voting members. Ercot members may be corporate members, associate members, or adjunct members. Corporate and associate members qualify in one of seven segments: cooperative; independent generator; independent power marketer; independent retail electric provider; investor-owned utility; municipal (i.e. A municipal-owned utility or a river authority); or consumer (which has subsegments including commercial, industrial and residential). An entity may be approved for adjunct membership by the board of directors if such entity does not meet the definitions and requirements to join as a corporate or associate member. Corporate members have the right to select technical advisory committee (tac) and tac subcommittee representatives and to be elected or appointed to tac and tac subcommittees. Associate and adjunct members do not have the right to select tac and tac subcommittee representatives. Associate members have the right to be elected or appointed to tac or any subcommittee of tac. Adjunct members do not have the right to be elected or appointed to tac or tac subcommittees but have the right to vote at the protocol revision subcommittee (prs).”

“Eight of the twelve directors are appointed by the ercot board selection committee. The ercot board selection committee is comprised of one member appointed by the texas governor, one member appointed by the texas lieutenant governor, and one member appointed by the texas speaker of the house of representatives. These directors must have executive level experience in any of the following professions: finance, business, engineering (including electrical engineering), trading, risk management, law, or electric market design. The remaining voting director is the ex officio public counsel director. The three non-voting directors are also ex officio directors, that is, chair of the public utility commission of texas, a second commissioner of the public utility commission of texas who rotates annually, and ercot's chief executive officer. All twelve directors must be residents of the state of texas.”

“Decisions of the ercot board are generally appealable to the public utility commission of texas, an agency of the state of texas.”

“The 2024 form 990 was prepared initially by the finance department of ercot. It was reviewed by ercot officers as well as internal legal counsel and submitted for review by ercot's independent auditors. The form 990 was provided to the board of directors in advance of and for its consideration and input at its meeting on june 24, 2025. The final version of the 2024 form 990, incorporating the comments of all the foregoing, was then filed with the internal revenue service.”

“Each director annually must execute an ethics agreement for directors, and each employee annually must attend internal training sessions and execute an employee ethics agreement. Pursuant to each ethics agreement, a signatory has an affirmative duty to disclose any actual or potential conflicts of interest of the signatory and also must disclose all personal relationships with ercot vendors, including business or direct or indirect ownership interests. Any conflict of interest issue involving a director is referred to the ercot general counsel who, in consultation with the board chair and outside legal counsel if and when necessary, makes a legal determination as to whether a conflict exists and, if so, a recommendation as to how it may be resolved. Any conflict and its resolution are reported to the full board of directors and to the human resources and governance (hr&g) committee of the board, as needed. Any objection to the recommendation is resolved by the hr&g committee or the full board. Any ercot employee conflicts are evaluated by ercot legal staff, which then makes a recommendation to resolve the conflict of interest. If ercot legal staff recommends a resolution that is objectionable to the manager/director/officer of the conflicted employee, the legal decision is referred to the chief executive officer and ultimately to the board's hr&g committee.”

“In determining compensation for the chief executive officer, ercot follows a procedure which ensures i) compensation is approved in advance by the hr&g committee of the board of directors and the board itself, (ii) the board and the hr&g committee obtain and rely upon appropriate market data for comparability, and (iii) the board and the hr&g committee document the compensation determination. Furthermore, the public utility commission of texas substantive rules related to ercot governance require that all compensation to be paid to the chief executive officer is subject to review and approval by the public utility commission of texas. The hr&g committee receives compensation information from forms 990 and other sources during its assessment of ercot's ceo compensation. Additionally, compensation surveys/studies are performed, as needed, to provide insight into the elements of compensation. The hr&g committee may also request information from independent compensation consultants the hr&g committee submits compensation recommendations to the board for its approval by all uninterested members of the board of the directors (that is, all board members except the chief executive officer, who is required to abstain from such vote). A review of the chief executive officer's compensation is performed annually except in instances in which the compensation is pursuant to provisions of an employment agreement between ercot and the chief executive officer for a term exceeding a year. Such agreements must be approved by the board of directors. In determining compensation for officers, ercot follows a procedure which ensures that (i) compensation is fully disclosed in advance to the hr&g committee of the board of directors, and (ii) the hr&g committee is provided market data for comparability. The chief executive officer informs the hr&g committee of proposed officer pay amounts. For review of all officer and key employee compensation, ercot uses performance and market data obtained relating to comparable compensation of similarly qualified persons in comparable positions at comparable organizations, including compensation surveys and forms 990.”

“Ercot's governing documents, code of conduct, and audited financial statements are available to the public through the ercot website (www.ercot.com).”

“Electric reliability council of texas, inc. (ercot) lessens the burdens of government, serves the public interest by, and fulfills its statutory obligation by: (i) ensuring open access to transmission and distribution systems; (ii) maintaining system reliability and operations; (iii) enabling retail choice; (iv) operating fair and competitive wholesale markets; (v) maintaining the renewable energy credits registry; and (vi) providing leadership and independent expertise to improve system reliability and market efficiency. Ercot manages the flow of electric power to more than 27 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 54,100 miles of transmission lines and 1,250 generation units. Ercot also performs financial settlement for the competitive wholesale bulk-power market and administers retail switching for nearly 8 million premises in competitive choice areas.”