Erin Douglas

CEO of Texas power grid operator terminated in aftermath of winter storm

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The board overseeing the Electric Reliability Council of Texas, the independent nonprofit entity that operates and manages the electricity grid that covers much of Texas, fired ERCOT CEO Bill Magness Wednesday night.

The move by the board to vote in favor of a "60-day termination notice" came after they convened in a private executive session for more than three hours. The board barely discussed its decision once returning to the public session.

The decision is the latest of several recently announced departures from the ERCOT board, which also included Magness. Seven board members resigned after public criticism that many board members did not reside in Texas.

Magness' absence will leave the 16-person ERCOT board with a mix of vacancies and temporary members. Both ERCOT and the Public Utilities Commission of Texas, the regulatory body that oversees it, have been lambasted in recent weeks for failures in preparing for and responding to the winter storm that left millions of people in the dark for days and claimed the lives of dozens.

On Monday, Lt. Gov. Dan Patrick had called for both Magness and the chair of the PUC, to resign. DeAnn Walker, the former chairwoman for the PUC, resigned that same day. She had come under sharp criticism by lawmakers after largely pointing blame for Texas' power outages to ERCOT. Gov. Greg Abbott on Wednesday named Walker's replacement.

Magness, who endured more than five hours of questioning by state senators Thursday, was criticized for the organization's preparations for a winter storm. ERCOT underestimated the maximum amount of power that would be demanded by homes, businesses and industry during a severe winter storm in its fall projections, and it overestimated the amount of power generation that would be available to the grid during such a storm.

When massive amounts of power began to trip offline in the early hours of Feb. 15, well beyond what was expected, ERCOT grid operators were forced to order utility companies to start controlled outages to prevent the entire system from collapsing. Legislators complained that the grid manager didn't do enough to alert state leaders or the public to the coming disaster.

In his testimony last week, Magness defended ERCOT's handling of the outages, telling lawmakers that if ERCOT operators had not acted as they did, “the suffering we saw last week would be compounded" and Texans would likely be without power for weeks. Magness also defended ERCOT as an entity that carries out what state lawmakers and the PUC direct.

“The commission approves the policy, we implement it," Magness said.

Magness told lawmakers he earns $803,000 annually, which he said comes from Texans paying their electric bills.

Magness did not speak about the board's decision, only that he abstained from the vote because it involved himself. Magness also said he was not present for any relevant discussion in the private executive session.

Walker, who testified after Magness during the hearings with lawmakers, said she disagreed with his characterization of how much oversight the PUC had of ERCOT, and said the commission has “not been given legal authority by the Legislature to require winter weatherization," a primary concern after the power crisis was precipitated by power plants tripping offline. Many power generators are not built to withstand extreme cold weather temperatures in Texas.

Magness worked at ERCOT for more than a decade and became its CEO and president in 2016 after working as its general counsel. He previously held executive management positions in the public and private utility sectors. A lawyer, he also previously worked as lead counsel in state and federal regulatory matters.

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2021/03/02/ercot-texas-bill-magness/.

The Texas Tribune is a member-supported, nonpartisan newsroom informing and engaging Texans on state politics and policy. Learn more at texastribune.org.

ERCOT board members living outside of Texas now resigning amid winter storm aftermath

Five board members of the Electric Reliability Council of Texas — the entity that manages and operates the electricity grid that covers much of Texas — will resign on Wednesday, according to a notice to the Public Utility Commission. A sixth has withdrawn his application to the board.

All six live outside of Texas.

Sally Talberg, board chair; Peter Cramton, vice chair; Terry Bulger, finance and audit chair; and Raymond Hepper, human resources and governance committee chair, occupy the "unaffiliated" director positions on the board, which mean they must remain independent of any business ERCOT oversees. Their resignations will be effective at the end of the board's Wednesday meeting.

In addition, Vanessa Anesetti-Parra, the market segment director for the independent retail electric provider market segment, will also resign her position as a board member. Craig Ivey, who was slated to fill a vacant unaffiliated director position, withdrew his application.

ERCOT board members had come under fire last week when it was reported that some did not reside in the state. ERCOT officials, during a press conference last week, said it had temporarily removed personal information about the directors from its website because they were experiencing harassment.

The board has been criticized for last week's mass power outage during a winter storm that has claimed the lives of dozens of Texans. More than 4.5 million customers were without power at one point last week.

Gov. Greg Abbott had called on ERCOT board members to resign in the aftermath of the crisis and said in a statement Tuesday that he welcomes their resignations, promising to investigate the grid operator."I welcome the resignations," Abbott said.

"The lack of preparedness and transparency at ERCOT is unacceptable. We will ensure that the disastrous events of last week are never repeated."

ERCOT, a nonprofit, is governed by a board of directors, but overseen by the Public Utility Commission. Fifteen members serve on the ERCOT board, including the five unaffiliated director positions. The vacancies will not immediately be filled.

In order for ERCOT to maintain its certification as an independent organization, the board, which should consist of 16 members, must include five directors who are completely unaffiliated with "any market segment." Ivey would have been the fifth unaffiliated member.

"The board chairman, board vice chairman and both committee chairman leadership roles will be vacant," according to the notice submitted by attorneys representing ERCOT.

Lawsuits have already been filed against ERCOT in response to last week's crisis. It's unclear whether ERCOT, which falls under the PUC's jurisdiction, can be held liable by such suits: The Texas Supreme Court is expected to decide this year whether ERCOT is entitled to sovereign immunity, a legal principle that protects government agencies from lawsuits, after hearing another case that raised the question last year.

The board members were not all immediately available for comment or referred reporters to their resignation letters. In a joint letter to the rest of the board, the four unaffiliated directors cited the public concern that board members did not live in the state as the reason for their resignation. Ivey also cited not wanting to become a "distraction" from the more important response to the crisis in his letter.

"To allow state leaders a free hand with future direction and to eliminate distractions, we are resigning from the board," Talberg, Cramton, Bulger and Hepper wrote in the resignation letter.

The board directors wrote that before they resign, they will launch the review of the power crisis.

"Our hearts go out to all Texans who have had to go without electricity, heat, and water during the frigid temperatures and continue to face the tragic consequences of this emergency," they wrote. "We want what is best for ERCOT and for Texas."

Talberg, a former state utility regulator who served on the Michigan Public Utility Commission from 2013 to 2020, lives in Michigan. Talberg has sat on various state, regional and national boards and committees involving electricity, natural gas, oil, infrastructure and telecommunications issues. Cramton, a professor of economics at the University of Cologne and the University of Maryland, lives in Germany. Cramton has focused his research on electricity and financial markets. He has advised numerous governments and has been on the ERCOT board since 2015.

Bulger worked in the banking sector for 35 years, including various positions with ABN AMRO Bank in Canada, Europe and the U.S., and lives in Wheaton, Illinois. Hepper, a former litigator for the U.S. Department of Justice, retired in 2018 from working for the grid operator that manages the six-state New England electric system and wholesale markets.

Ivey, whose appointment was approved by ERCOT's members but was pending final approval from the PUC, is retired from more than three decades of experience in the utilities industry. He resides in Florida, according to an ERCOT announcement about his candidacy to the board. Most recently, he was the president of Consolidated Edison Co. of New York Inc., a subsidiary of Consolidated Edison Inc.

Anesetti-Parra oversees Just Energy's North American residential and commercial regulatory affairs and compliance division and has two decades of experience in the retail energy sector.

ERCOT representatives did not return calls seeking comment, but in a statement it said: "We look forward to working with the Texas Legislature, and we thank the outgoing Board Members for their service."

Texas was 'seconds and minutes' away from catastrophic months-long blackouts: officials

"Texas was "seconds and minutes" away from catastrophic monthslong blackouts, officials say" was first published by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

Texas' power grid was “seconds and minutes" away from a catastrophic failure that could have left Texans in the dark for months, officials with the entity that operates the grid said Thursday.

As millions of customers throughout the state begin to have power restored after days of massive blackouts, officials with the Electric Reliability Council of Texas, or ERCOT, which operates the power grid that covers most of the state, said Texas was dangerously close to a worst-case scenario: uncontrolled blackouts across the state.

The quick decision that grid operators made in the early hours of Monday morning to begin what was intended to be rolling blackouts — but lasted days for millions of Texans — occurred because operators were seeing warning signs that massive amounts of energy supply was dropping off the grid.

As natural gas fired plants, utility scale wind power and coal plants tripped offline due to the extreme cold brought by the winter storm, the amount of power supplied to the grid to be distributed across the state fell rapidly. At the same time, demand was increasing as consumers and businesses turned up the heat and stayed inside to avoid the weather.

“It needed to be addressed immediately," said Bill Magness, president of ERCOT. “It was seconds and minutes [from possible failure] given the amount of generation that was coming off the system."

Grid operators had to act quickly to cut the amount of power distributed, Magness said, because if they had waited, “then what happens in that next minute might be that three more [power generation] units come offline, and then you're sunk."

Magness said on Wednesday that if operators had not acted in that moment, the state could have suffered blackouts that “could have occurred for months," and left Texas in an “indeterminately long" crisis.

The worst case scenario: Demand for power overwhelms the supply of power generation available on the grid, causing equipment to catch fire, substations to blow and power lines to go down.

If the grid had gone totally offline, the physical damage to power infrastructure from overwhelming the grid can take months to repair, said Bernadette Johnson, senior vice president of power and renewables at Enverus, an oil and gas software and information company headquartered in Austin.

“As chaotic as it was, the whole grid could've been in blackout," she said. “ERCOT is getting a lot of heat, but the fact that it wasn't worse is because of those grid operators."

If that had occurred, even as power generators recovered from the cold, ERCOT would have been unable to quickly reconnect them back to the grid, Johnson said.

Grid operators would have needed to slowly and carefully bring generators and customers back online, all the while taking care to not to cause more damage to the grid. It's a delicate process, Johnson explained, because each part of the puzzle — the generators producing power, the transmission lines that move the power and the customers that use it — must be carefully managed.

“It has to balance constantly," she said. “Once a grid goes down, it's hard to bring it back online. If you bring on too many customers, then you have another outage."

ERCOT officials have repeatedly said that the winter storm that swept the state caught power generators off guard. The storm far exceeded what ERCOT projected in the fall to prepare for winter.

“The operators who took those actions to prevent a catastrophic blackout and much worse damage to our system, that was, I would say, the most difficult decision that had to be made throughout this whole event," Magness said.

Nine grid operators are working at any given time who make these sorts of decisions, said Leslie Sopko, a spokesperson for ERCOT.

“At the end of the day, our operators are highly trained and have the authority to make decisions that protect the reliability of the electric system," she said in a statement.

ERCOT made “significant progress" overnight Wednesday to restore customer power to many Texans, and remaining power outages are likely due to ice storm damage to the distribution system. Some areas that were taken offline will also need to be restored manually, according to ERCOT.

ERCOT warned that emergency conditions remain, and that “some level of rotating outages" may be necessary over the coming days to keep the grid stable.

By Erin Douglas, The Texas Tribune Feb. 18, 2021

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2021/02/18/texas-power-outages-ercot/.

The Texas Tribune is a member-supported, nonpartisan newsroom informing and engaging Texans on state politics and policy. Learn more at texastribune.org.

Texas leaders failed to heed warnings that left the state's power grid vulnerable to winter extremes: experts

By Erin Douglas, Kate McGee and Jolie McCullough, The Texas Tribune

Feb. 17, 2021

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Millions of Texans have gone days without power or heat in subfreezing temperatures brought on by snow and ice storms. Limited regulations on companies that generate power and a history of isolating Texas from federal oversight help explain the crisis, energy and policy experts told The Texas Tribune.

While Texas Republicans were quick to pounce on renewable energy and to blame frozen wind turbines, the natural gas, nuclear and coal plants that provide most of the state's energy also struggled to operate during the storm. Officials with the Electric Reliability Council of Texas, the energy grid operator for most of the state, said that the state's power system was simply no match for the deep freeze.

“Nuclear units, gas units, wind turbines, even solar, in different ways — the very cold weather and snow has impacted every type of generator," said Dan Woodfin, a senior director at ERCOT.

Energy and policy experts said Texas' decision not to require equipment upgrades to better withstand extreme winter temperatures, and choice to operate mostly isolated from other grids in the U.S. left power system unprepared for the winter crisis.

Policy observers blamed the power system failure on the legislators and state agencies who they say did not properly heed the warnings of previous storms or account for more extreme weather events warned of by climate scientists. Instead, Texas prioritized the free market.

“Clearly we need to change our regulatory focus to protect the people, not profits," said Tom “Smitty" Smith, a now-retired former director of Public Citizen, an Austin-based consumer advocacy group who advocated for changes after in 2011 when Texas faced a similar energy crisis.

“Instead of taking any regulatory action, we ended up getting guidelines that were unenforceable and largely ignored in [power companies'] rush for profits," he said.

It is possible to “winterize" natural gas power plants, natural gas production, wind turbines and other energy infrastructure, experts said, through practices like insulating pipelines. These upgrades help prevent major interruptions in other states with regularly cold weather.

Lessons from 2011

In 2011, Texas faced a very similar storm that froze natural gas wells and affected coal plants and wind turbines, leading to power outages across the state. A decade later, Texas power generators have still not made all the investments necessary to prevent plants from tripping offline during extreme cold, experts said.

Woodfin, of ERCOT, acknowledged that there's no requirement to prepare power infrastructure for such extremely low temperatures. “Those are not mandatory, it's a voluntary guideline to decide to do those things," he said. “There are financial incentives to stay online, but there is no regulation at this point."

The North American Electric Reliability Corporation, which has some authority to regulate power generators in the U.S., is currently developing mandatory standards for “winterizing" energy infrastructure, a spokesperson said.

Texas politicians and regulators were warned after the 2011 storm that more “winterizing" of power infrastructure was necessary, a report by the Federal Energy Regulatory Commission and the North American Electric Reliability Corporation shows. The large number of units that tripped offline or couldn't start during that storm “demonstrates that the generators did not adequately anticipate the full impact of the extended cold weather and high winds," regulators wrote at the time. More thorough preparation for cold weather could have prevented the outages, the report said.

“This should have been addressed in 2011 by the Legislature after that market meltdown, but there was no substantial follow up," by state politicians or regulators, said Ed Hirs, an energy fellow and economics professor at the University of Houston. “They skipped on down the road with business as usual."

ERCOT officials said that some generators implemented new winter practices after the freeze a decade ago, and new voluntary “best practices" were adopted. Woodfin said that during subsequent storms, such as in 2018, it appeared that those efforts worked. But he said this storm was even more extreme than regulators anticipated based on models developed after the 2011 storm. He acknowledged that any changes made were “not sufficient to keep these generators online," during this storm.

After temperatures plummeted and snow covered large parts of the state Sunday night, ERCOT warned increased demand might lead to short-term, rolling blackouts. Instead, huge portions of the largest cities in Texas went dark and have remained without heat or power for days. On Tuesday, nearly 60% of Houston households and businesses were without power. Of the total installed capacity to the electric grid, about 40% went offline during the storm, Woodfin said.

Climate wake-up call

Climate scientists in Texas agree with ERCOT leaders that this week's storm was unprecedented in some ways. They also say it's evidence that Texas is not prepared to handle an increasing number of more volatile and more extreme weather events.

“We cannot rely on our past to guide our future," said Dev Niyogi, a geosciences professor at the University of Texas at Austin who previously served as the state climatologist for Indiana. He noted that previous barometers are becoming less useful as states see more intense weather covering larger areas for prolonged periods of time. He said climate scientists want infrastructure design to consider a “much larger spectrum of possibilities" rather than treating these storms as a rarity, or a so-called “100-year event."

Katharine Hayhoe, a leading climate scientist at Texas Tech University, highlighted a 2018 study that showed how a warming Arctic is creating more severe polar vortex events. “It's a wake up call to say, 'What if these are getting more frequent?'" Hayhoe said. “Moving forward, that gives us even more reason to be more prepared in the future."

Still, Hayhoe and Niyogi acknowledged there's uncertainty about the connection between climate change and cold air outbreaks from the Arctic.

Other Texas officials looked beyond ERCOT. Dallas County Judge Clay Jenkins argued that the Texas Railroad Commission, which regulates the oil and gas industry — a remit that includes natural gas wells and pipelines — prioritized commercial customers over residents by not requiring equipment to be better equipped for cold weather. The RRC did not immediately respond to a request for comment.

"Other states require you to have cold weather packages on your generation equipment and require you to use, either through depth or through materials, gas piping that is less likely to freeze," Jenkins said.

Texas' electricity market is also deregulated, meaning that no one company owns all the power plants, transmission lines and distribution networks. Instead, several different companies generate and transmit power, which they sell on the wholesale market to yet more players. Those power companies in turn are the ones that sell to homes and businesses. Policy experts disagree on whether a different structure would have helped Texas navigate these outages. “I don't think deregulation itself is necessarily the thing to blame here," said Josh Rhodes, a research associate at University of Texas at Austin's Energy Institute.

History of isolation

Texas' grid is also mostly isolated from other areas of the country, a set up designed to avoid federal regulation. It has some connectivity to Mexico and to the Eastern U.S. grid, but those ties have limits on what they can transmit. The Eastern U.S. is also facing the same winter storm that is creating a surge in power demand. That means that Texas has been unable to get much help from other areas.

“If you're going to say you can handle it by yourself, step up and do it," said Hirs, the UH energy fellow, of the state's pursuit of an independent grid with a deregulated market. “That's the incredible failure."

Rhodes, of UT Austin, said Texas policy makers should consider more connections to the rest of the country. That, he acknowledged, could come at a higher financial cost — and so will any improvements to the grid to prevent future disasters. There's an open question as to whether Texas leadership will be willing to fund, or politically support, any of these options.

“We need to have a conversation about if we believe that we're going to have more weather events like this," Rhodes said. “On some level, it comes down to if you want a more resilient grid, we can build it, it will just cost more money. What are you willing to pay? We're going to have to confront that."

Texas Tech University, University of Texas at Austin and University of Houston have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2021/02/17/texas-power-grid-failures/.

The Texas Tribune is a member-supported, nonpartisan newsroom informing and engaging Texans on state politics and policy. Learn more at texastribune.org.

Frozen wind turbines aren’t the main culprit for Texas' power outages — no matter what conservatives say

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Frozen wind turbines in Texas caused some conservative state politicians to declare Tuesday that the state was relying too much on renewable energy. But in reality, the lost wind power makes up only a fraction of the reduction in power-generating capacity that has brought outages to millions of Texans across the state during a major winter storm.

An official with the Electric Reliability Council of Texas said Tuesday afternoon that 16 gigawatts of renewable energy generation, mostly wind generation, were offline. Nearly double that, 30 gigawatts, had been lost from thermal sources, which includes gas, coal and nuclear energy.

“Texas is a gas state," said Michael Webber, an energy resources professor at the University of Texas at Austin.

While Webber said all of Texas' energy sources share blame for the power crisis, the natural gas industry is most notably producing significantly less power than normal.

“Gas is failing in the most spectacular fashion right now," Webber said.

Dan Woodfin, a senior director at ERCOT, echoed that sentiment Tuesday.

“It appears that a lot of the generation that has gone offline today has been primarily due to issues on the natural gas system," he said during a Tuesday call with reporters.

Still, some have focused their blame on wind power.

“This is what happens when you force the grid to rely in part on wind as a power source," U.S. Rep. Dan Crenshaw, R-Houston, tweeted Tuesday afternoon. “When weather conditions get bad as they did this week, intermittent renewable energy like wind isn't there when you need it."

He went on to note the shutdown of a nuclear reactor in Bay City because of the cold and finally got to what energy experts say is the biggest culprit, writing, “Low Supply of Natural Gas: ERCOT planned on 67GW from natural gas/coal, but could only get 43GW of it online. We didn't run out of natural gas, but we ran out of the ability to get natural gas. Pipelines in Texas don't use cold insulation —so things were freezing."

Agriculture Commissioner Sid Miller, known for his right-wing Facebook posts that have, in the past, spread misinformation and amplified conspiracy theories, also posted an unvarnished view of wind energy on Facebook: “We should never build another wind turbine in Texas."

In another post, Miller was even more forthright, but also misleading. “Insult added to injury: Those ugly wind turbines out there are among the main reasons we are experiencing electricity blackouts," he wrote. “Isn't that ironic? ... So much for the unsightly and unproductive, energy-robbing Obama Monuments. At least they show us where idiots live."

While wind power skeptics claimed the week's freeze means wind power can't be relied upon, wind turbines — like natural gas plants — can be “winterized," or modified to operate during very low temperatures. Experts say that many of Texas' power generators have not made those investments necessary to prevent disruptions to equipment since the state does not regularly experience extreme winter storms.

It's estimated that of the grid's total winter capacity, about 80% of it, or 67 gigawatts, could be generated by natural gas, coal and some nuclear power. Only 7% of ERCOT's forecasted winter capacity, or 6 gigawatts, was expected to come from various wind power sources across the state.

Production of natural gas in the state has plunged due to the freezing conditions, making it difficult for power plants to get the fuel necessary to run the plants. Natural gas power plants usually don't have very much fuel storage on site, experts said. Instead, the plants rely on the constant flow of natural gas from pipelines that run across the state from areas like the oil and natural gas-producing Permian Basin in West Texas to major demand centers like Houston and Dallas.

Gov. Greg Abbott specified that fossil fuel sources were contributing to the problems with the grid when describing the situation Monday afternoon.

“The ability of some companies that generate the power has been frozen. This includes the natural gas & coal generators," he wrote in a tweet.

Heather Zichal, CEO of the industry group the American Clean Power Association, said opponents of renewable energy were trying to distract from the failures elsewhere in the system and slow the “transition to a clean energy future."

“It is disgraceful to see the longtime antagonists of clean power — who attack it whether it is raining, snowing or the sun is shining — engaging in a politically opportunistic charade, misleading Americans to promote an agenda that has nothing to do with restoring power to Texas communities," she said.

Matthew Watkins contributed reporting.

Disclosure: Facebook and University of Texas at Austin have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2021/02/16/texas-wind-turbines-frozen/.

The Texas Tribune is a member-supported, nonpartisan newsroom informing and engaging Texans on state politics and policy. Learn more at texastribune.org.

Here's why the NRA is really filing for bankruptcy and moving to Texas

The National Rifle Association filed Chapter 11 bankruptcy Friday and said it would eventually reincorporate in Texas — a move experts say is a legal maneuver to escape an aggressive lawsuit being pursued by the New York attorney general.

Officials in Texas — which is known as both a gun-friendly and debtor-friendly state — welcomed the NRA's announcement Friday, embracing the NRA's stance that it is fleeing a “toxic political environment" in New York.

In August, New York's attorney general filed a lawsuit against the organization alleging decades of fraudulent use of the NRA's funds by its executives. New York Attorney General Letitia James accused NRA leaders of knowingly signing off on fraudulent statements.

Texas Gov. Greg Abbott, in a tweet, celebrated the announcement: “Welcome to Texas — a state that safeguards the 2nd Amendment." Other conservative Texas lawmakers also welcomed the news.

But bankruptcy experts said the NRA's filing is less of a physical relocation and more of a legal play to avoid a potentially disastrous case in New York.

The move to Texas, legal experts said, will likely be on paper.

“They probably figured they'd have a more friendly judge in Texas," said Josh Wolfshohl, a bankruptcy attorney at Porter Hedges LLP in Houston.

“They're trying to do a preemptive strike" against New York, said Sidney Scheinberg, a bankruptcy attorney at Godwin Bowman PC in Dallas. “It's a clever maneuver. Whether it's going to work, I don't know."

Filing for Chapter 11 bankruptcy pauses pending litigation, and the New York attorney general's case will now be battled in a Dallas bankruptcy court instead of a civil court in New York.

“I suspect the NRA's plan is to consolidate pending litigation in the bankruptcy court," said Kevin Lippman, a bankruptcy attorney at the Texas-based Munsch Hardt Kopf & Harr PC law firm. But, he said, New York could challenge the move and try to bring the case back.

Texas also has one of the most generous homestead exemptions in the country. NRA executives who might receive judgments against them stemming from the New York suit could feasibly move to Texas, “buy a very nice home, and no one could ever take it away from them," Scheinberg said.

The NRA said it would seek to reincorporate in Texas, pending court approval. While it was chartered in New York, the organization's headquarters and much of its operations are in Fairfax, Virginia.

“There will be no immediate changes to the NRA's operations or workforce," the NRA said in a statement.

Nevertheless, Texas politicians jumped on the move as proof that Texas is attracting new businesses and organizations due to its business-friendly regulatory environment.

“Welcome to Texas," state Sen. Dawn Buckingham, R-Lakeway, wrote in a tweet tagging the NRA. “Unlike New York, we protect and uphold our citizens' right to bear arms."

“This is a wonderful place for [the NRA] both financially and for our community," said Andi Turner, legislative director for the Texas State Rifle Association.

Texas Democrats, meanwhile, criticized the move. U.S. Rep. Veronica Escobar, D-El Paso, criticized Abbott for “courting" the NRA “instead of taking meaningful actions to reduce gun violence in Texas."

The NRA emphasized in its statements Friday that it was not in financial trouble and focused on political reasons for leaving New York.

The NRA listed between $100 million and $500 million in liabilities, the same range it reported for its assets, in its filing. The organization claimed in its press statements it is in its “strongest financial condition" in years.

“The NRA is not insolvent," the group said in a statement. “This action is necessitated primarily by one thing: the unhinged and political attack against the NRA by the New York Attorney General."

But while experts said organizations file for Chapter 11 bankruptcy for a variety of reasons, typically there is some sort of financial cause — otherwise, the courts may toss out the case.

“Very rarely do [organizations] file when they're not in financial trouble," said Josh Wolfshohl, a bankruptcy attorney at Porter Hedges LLP in Houston. “Partly because of the stigma, and also, it's expensive."

Beyond the costly litigation, filing for bankruptcy can also put funding for nonprofits like the NRA in jeopardy, because donors might become concerned that the organization will use their money to pay claims instead of, for example, using it to protect gun owners' rights.

“I don't think it was their first choice to file bankruptcy, because typically it will impact their fundraising," Lippman said.

Texas bankruptcy attorneys theorized that perhaps the NRA decided it needed to file bankruptcy to move the New York lawsuit and decided Texas would be the friendliest place to do it.

“The government is welcoming them here, while the New York attorney general is doing everything in her power to put them out of business," Scheinberg said. And while the political tide may be shifting in the state, he said, “This is still Texas."

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2021/01/15/texas-nra-bankruptcy-fraud/.

The Texas Tribune is a member-supported, nonpartisan newsroom informing and engaging Texans on state politics and policy. Learn more at texastribune.org.

Ex-Houston police captain accused of violent attempt to prove election fraud was hired by GOP activist group

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HOUSTON — A former Houston police captain was arrested after allegedly running a man off the road and threatening him at gunpoint — what prosecutors say was part of an elaborate attempt to find evidence for a false conspiracy theory of widespread voter fraud in Harris County.

Mark Aguirre was working on behalf of a powerful Republican megadonor's group to investigate unsubstantiated claims of widespread voter fraud when, in October, he allegedly pulled a gun on a man described by the Harris County district attorney's office as an “innocent and ordinary" air conditioner repairman.

Aguirre was arrested Tuesday, according to the Harris County district attorney's office.

Prosecutors say Aguirre's election fraud claims were baseless and that he was paid $266,400 by the group Liberty Center for God and Country, whose CEO is prominent Texas right-wing activist Steven Hotze.

Hotze was among a group of Republicans who unsuccessfully sued to have nearly 127,000 Harris County ballots tossed out this year. He was also among Republicans who tried — and failed — to stop Gov. Greg Abbott from extending early voting during the coronavirus pandemic, a suit for which Aguirre had provided an affidavit, stating that he was involved in an investigation into a “wide-ranging and fraudulent ballot harvesting scheme" in Harris County.

Jared Woodfill, a spokesperson and attorney for Hotze, confirmed that the Liberty Center hired a company led by Aguirre to investigate voter fraud ahead of the 2020 election. The company contracted approximately 20 private investigators to work on claims of fraudulent ballots in Harris County and other places in Texas. Woodfill said he was aware of Aguirre's arrest but had not yet heard Aguirre's side of the story.

“[Hotze] did not direct or lead any of the investigations," Woodfill said, noting that Hotze instead sent tips and information to the team of investigators to decide how to follow up. “The [Liberty Center] employed the investigation team that looked into the allegations."

Hotze is an active GOP donor and is one of the most prolific culture warriors on the right. He's a fierce opponent of same-sex marriage and was a key figure in the unsuccessful push for the 2017 “bathroom bill" in the Texas Legislature. This summer, he infamously left a voicemail for Abbott's chief of staff telling him to shoot and kill people protesting the in-custody death of George Floyd.

President Donald Trump, along with the Texas GOP and some key Texas officials, has been pushing thus-far unproven claims of widespread voter fraud both before and after President-elect Joe Biden won the presidential election. Trump recently latched on to Texas Attorney General Ken Paxton's failed lawsuit to challenge 2020 election results in four key battleground states. The Electoral College affirmed that Biden won, but 34 of Texas' 38 electors defiantly urged the legislatures of four swing states to overrule the will of their voters and appoint their own electors. And a large number of GOP members of the Texas congressional delegation still have not acknowledged Biden's victory.

While working on behalf of Hotze's group, which has been attempting to find evidence for the GOP's allegations of election fraud, Aguirre surveilled the air conditioner technician for four days with the help of at least two other unidentified people before the Oct. 19 incident. He later told authorities that he believed the technician was behind a huge voter fraud scheme in the Houston area, according to an affidavit by the Houston police officer who responded to the incident. Aguirre told police that he believed the technician to be transporting fake ballots in his vehicle and to have as many as 750,000 in his possession.

“There were no ballots in the truck," according to a Harris County district attorney's office press release. “It was filled with air conditioning parts and tools."

According to the Houston Chronicle, Aguirre was fired from his job as Houston police captain in 2003 after a controversial raid at a Houston Kmart parking lot.

After the October altercation with the technician, Aguirre also told authorities that he and other unidentified suspects had set up a “command post" at a Marriott hotel in Pearland for days ahead of the incident. He refused to identify the other people he worked with, according to the Houston police report.

Aguirre ran his black SUV into the back of the technician's truck to get the man to stop and get out, according to a court document describing probable cause for the charge of aggravated assault with a deadly weapon. He pointed a handgun at the technician and forced him to the ground, according to the affidavit. One of the other people Aguirre was with allegedly stole the technician's vehicle after searching it; police later found the abandoned truck a few blocks away.

A few days before Aguirre allegedly assaulted the man, he called Lt. Wayne Rubio with the Texas attorney general's office, requesting help with the investigation. Rubio declined and reported the call. Days later, he got another call from Aguirre, who was upset that police would not intervene based on his uncorroborated accusations, according to the affidavit, which referred to a phone call and email from Rubio reporting the call to authorities. Aguirre allegedly told Rubio he had been in a car wreck with “a voter fraud suspect."

“We are lucky no one was killed," Harris County District Attorney Kim Ogg said in a statement. “His alleged investigation was backward from the start — first alleging a crime had occurred and then trying to prove it happened."

Aguirre was arrested by Houston police Tuesday and charged with aggravated assault with a deadly weapon, a second-degree felony punishable by up to 20 years in prison.

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2020/12/15/steven-hotze-texas-election-fraud-Houston-police-arrested/.

The Texas Tribune is a member-supported, nonpartisan newsroom informing and engaging Texans on state politics and policy. Learn more at texastribune.org.

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