Fired ERCOT CEO Refuses To Accept $800K Severance Pay

Texas Struggles With Unprecedented Cold And Power Outages

(Photo : Photo by Justin Sullivan/Getty Images)
HOUSTON, TEXAS - FEBRUARY 21: A view of high voltage transmission towers on February 21, 2021 in Houston, Texas. Millions of Texans lost their power when winter storm Uri hit the state and knocked out coal, natural gas and nuclear plants that were unprepared for the freezing temperatures brought on by the storm. Wind turbines that provide an estimated 24 percent of energy to the state became inoperable when they froze.

After the recent firing of ERCOT CEO Bill Magness, he told the board of directors of the entity that manages the Texas electricity grid that he will not accept the $800,000 severance pay that they offered.

The ERCOT CEO was fired on Wednesday, officially without cause. Magness was removed from his post as the president and CEO of Texas's Electric Reliability Council after the winter storm that hit the state last month caused days of blackouts to more than 4 million residents.

Fired ERCOT CEO refuses severance pay

Based on his contract terms, upon vacating the position, Magness would be entitled to receive severance pay, which is equivalent to one year of his current salary. Calculations show that the ERCOT CEO is supposed to receive more than $800,000 upon separation from the council.

The ERCOT CEO received his two-month termination notice during ERCOT's board meeting on Wednesday night. The council also stated that Magness still needs to continue doing his duties as the CEO and president of ERCOT during the two-month transition.

NPR also reported that the ousted ERCOT CEO would continue to work with state leaders and regulators on reforms for the council.

Magness has been called out for his part in cutting off power for more than 4 million people in Texas, leading to several deaths from carbon monoxide poisoning and hypothermia. Both the Public Utility Commission of Texas and ERCOT have received backlash on their 'failures' in preparing for the sudden lack of power, Wisconsin Public Radio reported.

Amid Winter Storm Uri that caused blackouts to most of Texas, Magness was the target of the public's outrage. Many people suffered from the cold as the winter storm dropped the temperature to single digits, increasing the demand for electricity.

Meanwhile, ABC 13 reported that Lt. Gov. Dan Patrick has called for the resignation of both Magness and the PUC chair. On the same day, PUC chairwoman, DeAnn Walker, stepped down from her position.

Like the ERCOT CEO, Walker also received criticism from the public and lawmakers after she largely pointed the blame for ERCOT for Texas' power outages.

On Wednesday, following Walker's resignation, Gov. Greg Abbott named her replacement. Arthur D'Andrea was promoted to become the chair of the utility regulator of the state.

The ousted ERCOT CEO faced state senators on Thursday and endured more than five hours of criticism regarding the blackouts in the state. Magness defended himself and stated that his decision was able to save Texas from power outages that could have lasted for months, NPR reported.

Based on the employment agreement that Magness shared with the media, he was subject to "at-will employment." This means that he could be fired at any point with or without cause.

The then ERCOT CEO worked with the council for more than a decade before he was named President and CEO in 2016 after serving as the general counsel of the body. Aside from this, he also served several executive positions in the private and public utility sectors.