ARCO Alum puts the wind in Texas’ companies’ sales

Mark Armentrout was recently quoted in the Houston Chronicle in an article about deregulation in Texas. The article claimed that electricity deregulation is failing to make power more reliable or less costly.  In Mark’s role as former chairman of the Electric Reliability Council of Texas (ERCOT) and currently role as president of the energy/technology consulting firm Texas Technology Partners, Mark was quoted saying that “investor-owned utility executives face tough choices weighing reliability improvements against cost.”  US Securities and Exchange Commission records show pay packages de-emphasize reliability in favor of profits, according to the article, and after a decade of electricity deregulation in Texas, the state’s power supplies are left vulnerable as Texas continues to grow.  

Reporters often contact Mark because of his experience at ERCOT, although he no longer has a direct interest in ERCOT.  Now most of Mark’s client base includes renewable start-ups including wind, solar, biomass and retailers specializing in renewables.  There have also been some research and government clients.  “My services include management advice on how to get started, i.e. how does the ERCOT grid work technically, governmentally, and from a business planning standpoint.  The US and Canada have 3 AC grids, each with DC ties: East, West and ERCOT.  So Texas is free from most FERC jurisdiction.”  This freedom has been one of the catalysts to make Texas a leader in renewable energy.

“If Texas were an independent country, we would rank fifth in the world in terms of wind generation capacity…only China, India, Spain and Germany have more. Texas has nearly a third of the nation’s wind energy.  We take it very seriously.  And we have learned to manage its variability since the wind does not always blow.  It is a management challenge that ERCOT stepped up to and met,” explains Mark.  Now however, with long-term gas prices so low, ERCOT’s electricity prices are also lower, since gas is the swing fuel in ERCOT.  So between the uncertainty of federal production tax credits and low prices, new renewable development is slowing down.

Mark started with ARCO in Dallas in 1976 at the age of 20, working as the lead programmer on the Prudhoe Bay maintenance system.  In 1977, he travelled to Prudhoe to implement the maintenance system and train the maintenance supervisors.  Mark spent his entire 24-year ARCO career in Information Technology. He held management positions in Dallas, Midland, Plano, Houston and Anchorage. His responsibilities in the 90’s included IT functions worldwide for E&P.  

In 2003, Mark agreed to join the ERCOT board.  In 2006, he was elected Chairman, the first independent board member to do so.  “Generating electricity, as ARCO did with Co-gen plants, is different than managing the grid.  It is a complex cooperative technical challenge to keep at the grid’s frequency at 60 hertz, the standard across North America.  Emergency procedures begin at 59.7 hertz, and blackouts will occur at 59.3.  We have to exactly balance generation and load on a real time basis to be successful.  The legislature deregulated wholesale electricity in the late 90’s and empowered ERCOT to manage the grid, as a not-for-profit entity.  In 2002, retail was deregulated.  While there is a political debate about whether deregulation is good or bad, the Chairman of the Board for ERCOT can’t enter that political debate publically.  ERCOT’s job is to execute the law and adhere to the oversight of the PUC and three legislative committees.  Simply stated, our job is to keep the lights on.”

In June of this year, Mark will be speaking at the annual Texas Society of Professional Engineers in Dallas.