Jun. 3--The Texas Public Utility Commission launched an investigation
Wednesday into a possible security breach at the state electricity grid, with
some employees facing accusations of wrongdoing and potential criminal charges. In an emergency meeting of the regulatory commission, PUC Chairman Paul
Hudson said the agency "has recently obtained information that calls into
question the integrity of the security" at the Electric Reliability Council
of Texas, which operates the grid that covers three-fourths of the state. The Austin-based ERCOT launched its own investigation for what it describes
as "vendor procurement irregularities" in late March, but did not
notify the PUC chairman until two weeks ago. The PUC oversees the state's $20 billion-a-year electricity industry,
including the ERCOT grid that serves 85 percent of the state's power load. The PUC planned to run its own independent third-party investigation, paid
for with ERCOT funds. ERCOT and Mr. Hudson declined to describe the nature of the security breach
or the actions that are under criminal investigation by the Texas Department of
Public Safety. "I don't think there's an imminent threat," Mr. Hudson said. "ERCOT
assures us there are no security issues we need to be concerned about." ERCOT said in a statement that it learned of the problems through internal
auditing processes and launched an investigation by its management. Reliability and market operations were not affected, and no activity by
market participants such as utilities or retailers was involved, the group said. "ERCOT is undergoing a thorough audit of all of its vendor contracts and
vendor activities to prevent recurrence of any such improper conduct within
ERCOT," the Austin-based nonprofit organization, which is funded through
its electric customers, said in a statement Wednesday. The actions appear to involve at least three ERCOT employees, who have either
resigned or have been fired. "It's my understanding that they are not in a position to do any
potential further harm," Mr. Hudson said. The meeting of the three PUC commissioners came with a few hours' notice, a
highly unusual action for the regulatory agency. ERCOT's delay in notifying the PUC about its own investigation appears to
have rankled the three commissioners, who are appointed by the governor. "They have 400 employees there [at ERCOT]. Who's minding the
store?" said Randy Chapman, executive director of the Texas Legal Services
Center, a consumer group. "Why was the PUC left out of the loop? "In the 10 years I've been attending PUC meetings, I've never seen
commissioners so angry," Mr. Chapman said.