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Texas utility member leaves amid electric supply debate

HOUSTON (Reuters) - Texas Public Utility Commissioner Rolando Pablos said Thursday he will leave the agency March 1, leaving just two commissioners to continue working to find ways to entice new electricity generation to the state to avoid the rising prospect of rolling outages.

In a statement, Pablos said his objective had been to strengthen the state economy "through the application of fair, transparent, and predictable regulation" in the electricity and telecommunication areas.

The PUC is working with the state grid operator to address a looming shortage of electric capacity in the state that increases the likelihood of rolling outages.

The two other commissioners, Donna Nelson and Ken Anderson, are divided over how to send the right price signals to attract new generation without huge market changes or dramatically higher costs for power in the Electric Reliability Council of Texas (ERCOT), the state's primary grid.

While complimentary of Pablos' talent, one PUC observer said it did not appear he had a long-term interest in the complex electric issues facing the state's deregulated market.

"He came from outside the industry to such an extent that the learning curve with everything going on was really severe," said John Moore, a principal with Stratus Energy Group of Austin.

"Over the last few months, it has become apparent that he was not participating in discussions at open meetings to the level that you might expect of someone with a long-term vision," Moore said.

Pablos was appointed to the PUC in September 2011 by Texas Governor Rick Perry. His term was due to end September 1.

The governor's office did not immediately comment on how quickly it might appoint a new commissioner to replace Pablos.

A third commissioner likely won't be appointed until after the Texas Legislature adjourns in late May since appointments made during the session require confirmation before the session ends.

The next commissioner will face decisions that will shape the Texas power market for years to come.

"Whoever is appointed could be the deciding factor as to what market structure the PUC ultimately adopts and perhaps the potential profitability of power plants in ERCOT," said Paul Patterson, an energy analyst at Glenrock Associates of New York.

Pablos' departure will not slow the current pace of work at the PUC to address the issue of resource adequacy.

On Thursday, the commission asked for more information from ERCOT related to potential solutions and suggested more time will be needed to allow public comment and workshops this spring.

(Reporting by Eileen O'Grady in Houston; Editing by Leslie Adler and Phil Berlowitz)

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