WEBVTT

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<v ->This meeting of the Railroad Commission of Texas</v>

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will come to order to consider matters

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which have been duly posted with the Secretary of State,

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for February 27th, 2018.

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The Commission will consider the items on the agenda

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as posted on the agenda.

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Under our public participation policy,

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anyone desiring to offer public testimony on any items

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that are not noticed on today's agenda,

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will need to fill out a testimony form

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found in the back of the room,

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and submit it to Commission Secretary Kathy Way.

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A reminder, turn off your cellphones.

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And we're gonna start with service awards.

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That's what all these people

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are here for.
<v ->Yeah.</v>

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<v ->Good morning Commissioners, Chairman.</v>

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My name is Robbie Craig, I'm the Director

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of Human Resources, and I'll be presenting service awards

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for first and second quarter, 2018, this morning.

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So first, with five years of service,

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we would like to recognize Chairman Christi Craddick.

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(audience applauding)

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<v Photographer>Three, two, one.</v>

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<v ->Alright.
<v ->Congratulations, Chairman.</v>

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<v ->Also with five years of service, we would like</v>

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to recognize Interim Executive Director Wei Wang.

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(audience applauding)

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<v Photographer>Alright, three, two, one.</v>

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One more, guys.

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Three, two, one.

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<v ->Thank you.
<v ->Congratulations.</v>

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Here's your pin.
<v ->Oh.</v>

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(laughing)

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<v Christi>They didn't give me a pin.</v>

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<v ->They didn't give me a pin to give you.</v>

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I'll send you one.
(laughing)

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(laughing)
(audience applauding)

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<v ->With five years of service</v>

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from our ITS Division, Sean Miller.

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(audience applauding)

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<v Photographer>Three, two, one.</v>

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One more.

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Two, one.

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Very good.

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<v ->Congratulations, and you even get a pin.</v>

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<v ->Hey, thank you.
(laughing)

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<v ->Everybody gets a pin.</v>

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From our Financial Services Division,

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with five years of service, Jennifer Garcia.

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(audience applauding)

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<v ->Thank you.</v>

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<v Photographer>Three, two, one.</v>

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Thank you.

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<v ->Okay.</v>

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<v ->Next, with five years of service,</v>

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from our Oil and Gas Division, is Zachary Adkins.

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(audience applauding)

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<v ->We can move if you need us to.</v>

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(laughing)
<v ->No, you're good.</v>

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Actually--
<v ->Yeah, move over.</v>

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<v Photographer>Yeah, let's slide this way.</v>

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Thank you.

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Alright.

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Alright, three, two, one.

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One more.

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Three, two.
(camera shutter clicking)

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<v ->Thank you.
<v ->Congratulations.</v>

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(laughing)

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<v ->Celebrating five years of service,</v>

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from our Oil and Gas Division, is Allen Kumasa.

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(audience applauding)

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<v ->Are we good?
<v ->Yeah.</v>

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<v Photographer>Three, two, one.</v>

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One more.

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Three, two, one.

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Thanks.

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<v ->Congratulations.
<v ->Thank you.</v>

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<v ->Celebrating 10 years of service,</v>

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from our ITS division, is Rolly Reid.

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(audience applauding)

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<v Photographer>Three, two, one.</v>

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Three, two, one, got it.

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<v ->Thank you.
<v ->Thanks.</v>

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Congratulations.

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<v ->Next, from our Hearings Division,</v>

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Sandra Elliot is also celebrating 10 years of service.

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(audience applauding loudly)

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<v Photographer>Okay, here we go.</v>

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Three, two, one.

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And again.

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Two, one.

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Thank you.

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<v ->Thank you.</v>

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<v ->Thanks again.</v>

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<v ->Next, from Chairman Craddick's office,</v>

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celebrating five years of service, is Lauren Spring.

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(audience applauding)

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<v Photographer>Three, two, one.</v>

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One more.

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Three, two, one.

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Thanks.

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(audience applauding)

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<v ->Also from Chairman Craddick's office,</v>

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and celebrating five years, is Kathleen Hayden.

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(audience applauding)

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<v ->I'm so excited.</v>

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The last time I got hands was home.

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(laughing)

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<v Man>That didn't work out.</v>

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<v Photographer>Three, two, one.</v>

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One more.

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Three, two, one.

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(audience mumbling)
(laughing)

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<v Man>I want the rest of the story.</v>

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(laughing)

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<v ->Celebrating 10 years from the Administration Division,</v>

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is Roy Phillips.

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(audience applauding)

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<v Photographer>Three, two, one.</v>

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(camera shutter clicking)
One more.

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Three, two, one.
(camera shutter clicking)

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<v ->You did it on two.
(laughing)

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<v ->Also celebrating 10 years,</v>

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from the Oil and Gas Division, is Markita Horton.

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(audience applauding)

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<v Photographer>Alright, three, two, one.</v>

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One more.

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Three, two, one.

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Thank you.

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(audience applauding)

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<v ->Celebrating 15 years,</v>

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from our San Antonio office, in the Oil and Gas Division,

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is Beatrice Castillo.

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(audience applauding)

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<v ->Are we in the right spot?</v>

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Do we need to move?
<v ->You're good.</v>

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<v Photographer>Fine, three, two.</v>

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(camera shutter clicking)
One more.

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Three, two, one.

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<v ->Thank you.
<v ->Thank you very much.</v>

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Thank you.
<v ->Thank you.</v>

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<v ->Celebrating 20 years, from Oversight and Safety,</v>

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is Virgie Frosto.

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(audience applauding)

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<v ->Good morning, thank you.</v>

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<v ->Congratulations.</v>

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(laughing)

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<v Photographer>Here we go, three, two, one.</v>

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One more.

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Three, two, one.

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<v ->Thank you.</v>

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<v ->And finally, celebrating 25 years,</v>

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from our Oversight and Safety Division,

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is Laurie Oviedo.

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(audience applauding)

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<v ->Congratulations.</v>

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<v ->Thank you.
(mumbling)

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<v Photographer>Three, two, one.</v>

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Three, two one.
(camera shutter clicking)

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Perfect.
<v ->Thank you.</v>

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<v Robbie>This concludes our service awards for today.</v>

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(audience applauding)

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(audience members chatting indistinctly)

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<v ->Yeah, but we're on that now too.</v>

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Same kind, but I still got the single daughter.

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<v ->Yes.</v>

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Hey, I'm still single.

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What do you think happened?
(laughing)

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Kidding.
(laughing)

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Thank you all.

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We've got some great staff.
<v ->We do.</v>

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<v ->Alright, we're at Item Number One.</v>

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<v ->Good morning, Chairman, Commissioners.</v>

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I'm Randall Collins from the Hearings Division.

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Agenda item one, GUD 10455,

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is a motion filed by WTXP,

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addressed directly to the Commissioners.

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WTXP requests reconsideration of the Commissioners'

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January 23rd remand order.

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And in the alternative, reinstatement

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of WTXP's challenged rate amounts.

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All materials related to the agenda items

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are included in your notebooks.

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If you have any questions, I am available,

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and also, the ALJ.

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<v ->Thank you.</v>

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Are there any questions?

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Alright, I move that we deny the motion.

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Is there a second?
<v ->Second.</v>

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<v ->Second, Commissioner Christian.</v>

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All in favor say aye.

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<v ->Aye.
<v ->Aye.</v>

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Any opposed?
<v ->No.</v>

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<v ->One no.</v>

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Motion passed, this item is approved, two to one.

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Item Number Two.

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<v Marcy>Good morning, Chairman, Commissioners.</v>

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<v ->Morning, Marcy.</v>

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How are you?
<v ->I'm fine, thank you.</v>

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This is the application,

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by Texas Municipal Power Agency,

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for release of reclamation obligations,

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Phases I through III,

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for 4.9 acres, and Phase III for 1.8 acres,

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for an aggregate of 6.7 acres,

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Permit 26D, Gibbons Creek Lignite Mine,

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in Grimes County.

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TMPA filed an application for release

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of backfilling, regrading, to approximate

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original contour and drainage control,

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for the 4.9 acres within the mine.

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The application was submitted by a letter

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dated May 3rd, 2017.

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Staff filed its technical analysis,

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and building inspection report,

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by a letter dated January 2nd, 2018.

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The staff report recommends release of Phases I through III

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obligations for 4.9 acres as well as release

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of Phase III reclamation obligations,

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for, excuse me, 1.8 acres.

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TMP presented evidence confirmed by staff

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that all requirements for backfill and grading,

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vegetation, surface, and groundwater protection,

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have been met, that are applicable.

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Some areas were disturbed after reclamation,

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by a third party, the Texas Department of Transportation.

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Tex DOT entered into an agreement with the landowner,

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an individual not related to TMPA,

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whereby Tex DOT took borrowed material for use

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in an intersection upgrade,

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and also constructed a pond on the property.

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There is some erosion in the area of the pond.

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Soil has also been stockpiled on the property.

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When a third party has conducted operations

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not subject to the control of the permitee

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and for which the permitee is not responsible,

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these areas need not be covered by the bond,

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pursuant to section 12.306E of the Regulations.

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The land use for the tract is industrial-commercial,

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for which vegetation sufficient to control erosion

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is the re-vegetation requirement.

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Except for the third-party-disturbed areas,

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the areas requested for release are re-vegetated

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sufficient to control erosion.

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All other requirements for the release have been met.

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In processing this application,

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staff required TMPA to submit an application

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for a post mine land-use change,

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from industrial-commercial, a defined land use,

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to industrial-commercial exempt,

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that is not defined in the Regulations.

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Because of section 12.306E,

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the application for an undefined post-mine

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land use was unnecessary.

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Public notice and other required notices were provided.

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No hearing was requested.

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TMPA and staff waived the preparation and circulation

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of a proposal for decision.

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No changes are requested to the current bond.

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An eligible bond reduction not attributable

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to the acreage has been calculated

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for the aggregate 6.7 acres,

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that is $37,061.31.

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The Commission may approve this bond reduction amount.

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The application is recommended for approval,

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and I am available for any questions.

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<v Christi>Thank you, Marcy.</v>

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Are there any questions?
<v ->No.</v>

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<v ->I move we approve the examiner's recommendation.</v>

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Is there a second?
<v ->Second.</v>

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<v ->Second, Commissioner Sitton.</v>

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All in favor, say aye.

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<v ->Aye.
<v ->Aye.</v>

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Motion passed, this item is approved.

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Thank you.

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Item Number Three.

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<v Man>We're requesting that Item Number Three be passed.</v>

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<v ->Alright, passing Item Number Three.</v>

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Item Number Four.

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Oh, last conference, huh?
<v ->Last conference.</v>

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Yes, Ma'am.

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Good morning, Chairman, Commissioners.

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For the record, my name is Ryan Lammert,

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Administrative Law Judge, Hearings Division.

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Items number four and five are two proposed orders

00:14:53.230 --> 00:14:56.470
of memorializing Commissioner Christian's motions

00:14:56.470 --> 00:14:58.390
made at the previous conference.

00:14:58.390 --> 00:15:00.520
The first proposed order dismisses without prejudice

00:15:00.520 --> 00:15:02.987
RBJ's complaint against COG.

00:15:02.987 --> 00:15:05.660
The second proposed order revokes RBJ's disposal authority

00:15:05.660 --> 00:15:07.140
at the subject wells,

00:15:07.140 --> 00:15:10.240
and directs RBJ to plug each well.

00:15:10.240 --> 00:15:11.690
I am available for questions.

00:15:13.180 --> 00:15:16.300
<v ->Madam Chairman, making sure</v>

00:15:16.300 --> 00:15:18.700
this is not my second Rosanna Danna Danna moment,

00:15:18.700 --> 00:15:20.736
and that may be past generation, okay.

00:15:20.736 --> 00:15:22.650
(laughing)
This is the right item, okay.

00:15:22.650 --> 00:15:23.910
<v ->This is the right item.
<v ->Okay.</v>

00:15:23.910 --> 00:15:25.880
<v ->I wanna make a motion</v>

00:15:25.880 --> 00:15:28.330
to amend this, the last time.

00:15:28.330 --> 00:15:29.180
Let me explain.

00:15:29.180 --> 00:15:31.160
After further review of the record,

00:15:31.160 --> 00:15:33.410
I'd like to move to amend the order

00:15:33.410 --> 00:15:35.300
the Commission adopted at the last conference,

00:15:35.300 --> 00:15:37.640
regarding this case specifically.

00:15:37.640 --> 00:15:40.370
At the conference, the Commission adopted an order

00:15:40.370 --> 00:15:44.350
to terminate the permit at RBJ's Delhi Ranch.

00:15:44.350 --> 00:15:46.250
Delhi, is that correct?

00:15:46.250 --> 00:15:48.580
<v ->Yes, Sir, Delhi.
<v ->Hey, I said it right.</v>

00:15:48.580 --> 00:15:51.840
Ranch lease well number one, and require to plug.

00:15:51.840 --> 00:15:54.560
The Commission took this action based on the evidence

00:15:54.560 --> 00:15:57.310
that the PDF that produced water with a chemical tracer

00:15:57.310 --> 00:15:59.860
was injected down the well, that was later produced

00:16:00.700 --> 00:16:04.660
by Henry Resources' wells on the Melinda Lease.

00:16:04.660 --> 00:16:06.500
However, further review of the record,

00:16:06.500 --> 00:16:09.840
only 1% of the produced water with the chemical tracer

00:16:09.840 --> 00:16:12.140
was injected into well number one.

00:16:12.140 --> 00:16:14.700
Therefore, I would like to move to amend the order

00:16:14.700 --> 00:16:16.820
adopted by the Commission at the last conference,

00:16:16.820 --> 00:16:20.320
as follows: do not terminate the permit

00:16:20.320 --> 00:16:21.860
for well number one.

00:16:21.860 --> 00:16:24.340
Suspend the permit to operate well number one

00:16:24.340 --> 00:16:27.870
until such time that RBJ can successfully demonstrate

00:16:27.870 --> 00:16:30.400
to the Commission that injected fluids

00:16:30.400 --> 00:16:33.650
disposed at the Delhi Ranch Lease well number one

00:16:33.650 --> 00:16:36.580
are not being produced from Henry Resources,

00:16:36.580 --> 00:16:37.560
on Melinda Lease.

00:16:39.641 --> 00:16:42.500
<v Christi>Are there any questions?</v>

00:16:42.500 --> 00:16:44.120
<v ->Commissioner Christian, I wanna make sure I understand.</v>

00:16:44.120 --> 00:16:45.360
You made a comment

00:16:46.450 --> 00:16:48.529
about the fact that only 1% chemical tracer

00:16:48.529 --> 00:16:50.080
was injected in well number one.

00:16:50.080 --> 00:16:51.650
There was no chemical tracer injected

00:16:51.650 --> 00:16:52.483
in well number one, right?

00:16:52.483 --> 00:16:54.090
It was only well number two?

00:16:54.090 --> 00:16:57.240
<v ->There was a small amount,</v>

00:16:57.240 --> 00:16:59.780
give or take, 5,000 barrels, that was injected

00:16:59.780 --> 00:17:01.220
into number one.

00:17:01.220 --> 00:17:03.150
<v ->[Commissioner Sitton] But we didn't see that recovered</v>

00:17:07.965 --> 00:17:10.220
through the Henry well.

00:17:10.220 --> 00:17:12.040
<v ->I think that was the issue,</v>

00:17:12.040 --> 00:17:13.880
is that we could not determine

00:17:13.880 --> 00:17:15.720
the chemical tracer was the same that was injected

00:17:15.720 --> 00:17:16.750
into each well.

00:17:19.019 --> 00:17:22.590
I'm not sure that there was a distinguishing factor

00:17:22.590 --> 00:17:24.560
that you could say this was injected into one

00:17:24.560 --> 00:17:26.010
and this was injected into two.

00:17:26.010 --> 00:17:27.290
<v ->Right.
<v ->Does that make sense?</v>

00:17:27.290 --> 00:17:28.338
<v ->It does.</v>

00:17:28.338 --> 00:17:29.327
I wanna make sure we're being clear

00:17:29.327 --> 00:17:30.451
about what the basis of the motion is.

00:17:30.451 --> 00:17:32.250
<v ->Yeah, I made 1%, just a small amount.</v>

00:17:32.250 --> 00:17:34.230
<v ->I wanna make sure that we're not, yeah.</v>

00:17:34.230 --> 00:17:36.818
So okay, it's the fact that we couldn't determine

00:17:36.818 --> 00:17:40.200
that where the chemical tracer was coming from.

00:17:40.200 --> 00:17:43.730
The amounts that were put into the disposal

00:17:43.730 --> 00:17:45.490
were predominantly in disposal well two,

00:17:45.490 --> 00:17:48.820
so we're assuming that that's where they came from.

00:17:48.820 --> 00:17:51.062
Hence the reason to only plug that well.

00:17:51.062 --> 00:17:51.895
<v Ryan>That's correct.</v>

00:17:51.895 --> 00:17:53.020
<v ->Okay, I just wanna be clear on that.</v>

00:17:53.020 --> 00:17:54.380
Yup, thank you.

00:17:54.380 --> 00:17:55.213
<v ->Alright.</v>

00:17:55.213 --> 00:17:56.870
We've got a motion, I'll second that motion.

00:17:56.870 --> 00:17:59.224
Is there any more discussion?

00:17:59.224 --> 00:18:00.060
Alright.

00:18:00.060 --> 00:18:01.210
All in favor, say aye.

00:18:01.210 --> 00:18:02.154
<v ->Aye.
<v ->Aye.</v>

00:18:02.154 --> 00:18:02.987
<v ->Aye.</v>

00:18:02.987 --> 00:18:04.550
Motion passed, this item is approved.

00:18:06.471 --> 00:18:07.671
And we're on number six.

00:18:09.263 --> 00:18:11.060
(clears throat)

00:18:11.060 --> 00:18:13.690
<v ->Item Number Six is the Commission-called hearing</v>

00:18:13.690 --> 00:18:16.070
to provide Polk Operating, LLC,

00:18:16.070 --> 00:18:18.010
an opportunity to show cause why the operator

00:18:18.010 --> 00:18:19.870
is not in violation of Statewide Rules

00:18:19.870 --> 00:18:23.370
at the Polk Karnes R3 Facility

00:18:23.370 --> 00:18:24.790
located in Karnes County.

00:18:25.640 --> 00:18:29.670
Between February, 2015, and December, 2016,

00:18:29.670 --> 00:18:32.420
staff visited the facility 24 times.

00:18:32.420 --> 00:18:35.040
Staff cited violations at each inspection,

00:18:35.040 --> 00:18:37.060
including violations of 8(d)(1),

00:18:37.958 --> 00:18:40.970
8(d)(6), and 91,

00:18:40.970 --> 00:18:44.180
and other numerous violations of permit conditions.

00:18:45.140 --> 00:18:47.620
To be clear, staff asserts, quote:

00:18:47.620 --> 00:18:49.460
"The operator is discharging stormwater

00:18:49.460 --> 00:18:52.910
"from a non-contact stormwater pond, into a stock pond."

00:18:53.750 --> 00:18:55.920
Staff also alleges various pits are, quote:

00:18:55.920 --> 00:18:57.260
"over the capacity",

00:18:57.260 --> 00:18:59.870
firewalls are not built to permit specifications,

00:18:59.870 --> 00:19:01.870
and missing in some areas,

00:19:01.870 --> 00:19:04.050
and quote: "Treated material is stockpiled

00:19:04.050 --> 00:19:05.370
"outside of the assigned pits,

00:19:05.370 --> 00:19:06.670
"and the stormwater collection pond

00:19:06.670 --> 00:19:08.780
"contains contact stormwater."

00:19:09.810 --> 00:19:12.630
Staff maintains the cited violations persist at the facility

00:19:12.630 --> 00:19:15.680
save for a pit that is no longer over capacity.

00:19:17.070 --> 00:19:18.670
On three separate occasions,

00:19:18.670 --> 00:19:20.370
staff mailed correspondence to Polk,

00:19:20.370 --> 00:19:23.020
notifying the operator of violations at the facility,

00:19:23.020 --> 00:19:25.210
and directed Polk to discontinue accepting waste

00:19:25.210 --> 00:19:27.480
until the violations were resolved.

00:19:27.480 --> 00:19:30.250
Polk was also provided the option to request a hearing

00:19:30.250 --> 00:19:31.970
on the merits.

00:19:31.970 --> 00:19:35.360
Polk exercised that opportunity and requested a hearing.

00:19:35.360 --> 00:19:37.650
Shortly thereafter, Evergreen Underground

00:19:37.650 --> 00:19:40.620
Water Conservation District intervened into the matter.

00:19:40.620 --> 00:19:42.010
A protracted period of discovery

00:19:42.010 --> 00:19:44.340
preceded the seven-day hearing.

00:19:44.340 --> 00:19:46.950
Staff requests Polk's permit be suspended.

00:19:46.950 --> 00:19:48.780
Evergreen seeks revocation.

00:19:49.860 --> 00:19:51.470
The examiners are convinced the evidence of record

00:19:51.470 --> 00:19:54.230
supports suspending Polk's permit until such time

00:19:54.230 --> 00:19:57.000
that the operator performs remediation of the facility,

00:19:57.000 --> 00:19:59.720
and otherwise comes into compliance with the permit

00:19:59.720 --> 00:20:01.500
and all applicable Commission rules,

00:20:01.500 --> 00:20:04.390
and now make that recommendation to the Commissioners.

00:20:04.390 --> 00:20:06.240
Exceptions and replies were received.

00:20:07.690 --> 00:20:09.310
Evergreen is present to answer questions,

00:20:09.310 --> 00:20:12.520
and I am also available for questions.

00:20:12.520 --> 00:20:14.690
<v ->Thank you, and before we</v>

00:20:14.690 --> 00:20:16.270
get into six, I'm sorry, I forgot

00:20:16.270 --> 00:20:17.470
we had somebody for four and five,

00:20:17.470 --> 00:20:18.780
if we had any questions.

00:20:19.700 --> 00:20:21.120
And we do have number six.

00:20:21.120 --> 00:20:24.310
Sorry, I forgot, too much stuff sitting up here today.

00:20:24.310 --> 00:20:25.960
Okay, we're on Item Number Six.

00:20:25.960 --> 00:20:27.510
Does anybody have any questions?

00:20:28.855 --> 00:20:29.980
<v ->I just have a comment.</v>

00:20:29.980 --> 00:20:30.813
<v ->Okay.</v>

00:20:32.610 --> 00:20:35.180
<v ->So we had, between February, 2015,</v>

00:20:35.180 --> 00:20:38.120
and December, 2016, over a hundred violations.

00:20:38.120 --> 00:20:39.620
Correct?
<v ->Alleged, yes, Sir.</v>

00:20:43.530 --> 00:20:45.210
<v ->Looking through the record, looking at the pictures</v>

00:20:45.210 --> 00:20:47.310
of the facility, this looks like

00:20:48.200 --> 00:20:51.470
one of these facilities that we're gonna end up,

00:20:51.470 --> 00:20:52.940
I'm concerned that we're gonna end up having

00:20:52.940 --> 00:20:54.840
to do a lot more here.

00:20:54.840 --> 00:20:57.630
The Commission's gonna have to take a lot more

00:20:57.630 --> 00:21:00.580
prominent role in helping clean this thing up.

00:21:00.580 --> 00:21:04.230
Just a comment is, I'm glad

00:21:04.230 --> 00:21:05.700
we're taking this enforcement action,

00:21:05.700 --> 00:21:08.250
and I think that it has taken a little bit,

00:21:08.250 --> 00:21:09.670
this is an area I think, Commissioners,

00:21:09.670 --> 00:21:10.820
that we are gonna have to get aggressive,

00:21:10.820 --> 00:21:13.720
because these types of facilities, and Boundary Ventures

00:21:13.720 --> 00:21:15.940
a couple years ago cost us a lot of money,

00:21:15.940 --> 00:21:18.380
and we're gonna need

00:21:18.380 --> 00:21:21.690
to be diligent in making sure,

00:21:21.690 --> 00:21:23.700
that, you know we've talked before, most operators

00:21:23.700 --> 00:21:24.730
in this state do a great job.

00:21:24.730 --> 00:21:26.710
They work with us when there are rule violations

00:21:26.710 --> 00:21:27.830
that are unintentional,

00:21:27.830 --> 00:21:28.920
and we work together.

00:21:30.450 --> 00:21:31.820
People in this state do really good business.

00:21:31.820 --> 00:21:33.320
Every once in a while there's people that seem

00:21:33.320 --> 00:21:35.400
to intentionally go around our rules,

00:21:35.400 --> 00:21:39.000
that seem to get away

00:21:39.000 --> 00:21:40.740
with whatever they can, and at the end of the day,

00:21:40.740 --> 00:21:42.420
we end up holding the bag,

00:21:42.420 --> 00:21:44.410
and this is, it's unacceptable.

00:21:47.720 --> 00:21:49.530
I'm gonna support the examiner's recommendation here,

00:21:49.530 --> 00:21:51.580
but I think in the future, we've gotta figure out a way

00:21:51.580 --> 00:21:55.550
to identify these bad apples and take more swift action,

00:21:57.220 --> 00:21:59.080
to prevent these things from becoming this size issue

00:21:59.080 --> 00:22:01.160
that this one looks like it's gonna become.

00:22:01.160 --> 00:22:02.344
My comment.

00:22:02.344 --> 00:22:04.330
<v ->And to clarify, just for me,</v>

00:22:04.330 --> 00:22:05.660
we're giving them four months.

00:22:05.660 --> 00:22:06.493
Is that correct?

00:22:06.493 --> 00:22:09.218
And then if they don't have remediation in four months,

00:22:09.218 --> 00:22:12.100
there's a provision that they'll be fined

00:22:12.100 --> 00:22:13.230
$10,000 a day.

00:22:13.230 --> 00:22:14.730
Is that correct?
<v ->Yes, Ma'am.</v>

00:22:14.730 --> 00:22:16.100
<v Ryan>120 days, and then</v>

00:22:16.100 --> 00:22:18.887
$10,000 per day for non-compliance.

00:22:18.887 --> 00:22:19.950
<v ->Okay.</v>

00:22:19.950 --> 00:22:21.030
<v ->And, Madam Chairman?</v>

00:22:21.030 --> 00:22:23.900
May I say, I agree with Chairman, Commissioner Sitton.

00:22:23.900 --> 00:22:25.337
<v ->Chairman?</v>

00:22:25.337 --> 00:22:27.940
That was quick.
(laughing)

00:22:29.030 --> 00:22:30.690
<v ->No, but I agree.</v>

00:22:30.690 --> 00:22:34.070
I've seen that problem, and I agree with you on that.

00:22:34.070 --> 00:22:36.950
To combine that, it's a problem that we see

00:22:36.950 --> 00:22:39.040
in certain parts of the state, where historically

00:22:39.040 --> 00:22:40.760
it's been producing on wells.

00:22:43.110 --> 00:22:44.770
They're producing such a minimal amount,

00:22:44.770 --> 00:22:45.610
but they're important.

00:22:45.610 --> 00:22:50.020
We have small producers doing a minimum profitability.

00:22:51.300 --> 00:22:54.670
The problem, and I agree we need to discuss,

00:22:54.670 --> 00:22:56.890
is how we can differentiate, because some of these folks

00:22:56.890 --> 00:22:59.680
are doing like several wells, and if we impose

00:23:00.890 --> 00:23:04.080
any restrictions on them, to any large extent,

00:23:04.080 --> 00:23:05.240
and they're doing the best they can,

00:23:05.240 --> 00:23:07.210
getting a small check going each month for royalties,

00:23:07.210 --> 00:23:10.070
and getting going, but if you start imposing

00:23:10.070 --> 00:23:13.110
additional restrictions that may not be necessary,

00:23:13.110 --> 00:23:13.943
across the state.

00:23:13.943 --> 00:23:15.410
That's the trouble with doing rules,

00:23:15.410 --> 00:23:18.150
and I think we need to understand, can we differentiate

00:23:18.150 --> 00:23:18.983
from different people?

00:23:18.983 --> 00:23:21.500
'Cause if you shut down that one situation,

00:23:21.500 --> 00:23:23.700
will they just simply walk off, and we're now imposed

00:23:23.700 --> 00:23:27.130
with shutting, closing 30 wells

00:23:27.130 --> 00:23:28.820
that are producing just barely each month,

00:23:28.820 --> 00:23:31.035
even though they're producing according?

00:23:31.035 --> 00:23:33.090
So it's a real problem I'm having

00:23:33.090 --> 00:23:37.400
to understand, of how we address legitimate actors

00:23:37.400 --> 00:23:40.340
that we can do something and prevent costs in the future.

00:23:40.340 --> 00:23:43.190
At the same time, in addressing those,

00:23:43.190 --> 00:23:45.480
not hit somebody over here in another part of the state,

00:23:45.480 --> 00:23:47.880
that's doing the best they can and not harming anything,

00:23:47.880 --> 00:23:49.940
but it's not profitable for them to do whatever

00:23:49.940 --> 00:23:50.830
we then require.

00:23:50.830 --> 00:23:53.050
So I think, how we can be careful

00:23:53.050 --> 00:23:56.840
in protecting both those small, small producers

00:23:56.840 --> 00:23:58.210
that are still barely getting something

00:23:58.210 --> 00:24:00.680
out of the last few years of some wells,

00:24:00.680 --> 00:24:02.590
at the same time that we get the bad actors

00:24:02.590 --> 00:24:04.100
that we can go after.

00:24:04.100 --> 00:24:05.840
It's a problem, I agree with you, Commissioner,

00:24:05.840 --> 00:24:06.850
we need to address.

00:24:08.590 --> 00:24:10.060
<v ->I wanna be clear, I wasn't talking</v>

00:24:10.060 --> 00:24:11.990
about small producers here.

00:24:11.990 --> 00:24:15.540
This is somebody who, beginning of February of 2015,

00:24:15.540 --> 00:24:16.390
our staff started

00:24:18.060 --> 00:24:20.090
finding violations, identifying violations,

00:24:20.090 --> 00:24:22.210
found a hundred of them over a less-than-two-year period.

00:24:22.210 --> 00:24:24.290
So that's a pretty specific application.

00:24:24.290 --> 00:24:25.690
That's a pretty specific instance

00:24:25.690 --> 00:24:29.020
that differentiates someone, an operator,

00:24:29.020 --> 00:24:32.906
or in this case a disposal operator, from other people.

00:24:32.906 --> 00:24:34.520
<v ->I agree totally.</v>

00:24:34.520 --> 00:24:36.210
I'm just adding a comment

00:24:36.210 --> 00:24:38.440
that we have to be very careful,

00:24:38.440 --> 00:24:41.170
because sometimes when we pass a rule over somebody

00:24:41.170 --> 00:24:43.660
like that, we need to really consider

00:24:43.660 --> 00:24:45.420
we're not touching somebody that's maybe

00:24:45.420 --> 00:24:47.040
barely getting by, that's doing the right thing

00:24:47.040 --> 00:24:50.930
somewhere else, and wind up closing several wells.

00:24:50.930 --> 00:24:52.100
It's a statewide problem.

00:24:52.100 --> 00:24:55.790
For example, you go out to Midland,

00:24:55.790 --> 00:24:58.350
and some of the Commission employees there complain

00:24:58.350 --> 00:25:00.870
because the fines and fees are not enough to be respected

00:25:00.870 --> 00:25:02.820
by the large producers there.

00:25:02.820 --> 00:25:04.730
But if you change some of those fees,

00:25:04.730 --> 00:25:07.260
it would close some of the smaller producers

00:25:07.260 --> 00:25:08.610
in other parts of the state.

00:25:08.610 --> 00:25:12.090
So that's a challenge we have, on how to enforce correctly,

00:25:12.090 --> 00:25:13.820
these things across the state.

00:25:13.820 --> 00:25:16.180
It's, believe me, it's a problem

00:25:16.180 --> 00:25:17.670
when you have a state as big as Texas,

00:25:17.670 --> 00:25:18.503
and thank God we do.

00:25:18.503 --> 00:25:20.710
But that's all I'm saying, how we could do that.

00:25:21.710 --> 00:25:24.500
<v ->I appreciate that staff has an aggressive plan,</v>

00:25:24.500 --> 00:25:27.090
in 120 days, if this doesn't get fixed.

00:25:28.490 --> 00:25:30.410
I move we approve the examiner's recommendation.

00:25:30.410 --> 00:25:31.890
Is there a second?

00:25:31.890 --> 00:25:33.680
<v ->Second.
<v ->Second, Commissioner Sitton.</v>

00:25:33.680 --> 00:25:34.991
All in favor, say aye.

00:25:34.991 --> 00:25:35.824
<v ->Aye.
<v ->Aye.</v>

00:25:35.824 --> 00:25:37.220
Motion is approved.

00:25:37.220 --> 00:25:38.053
Thank you, Ryan.

00:25:39.400 --> 00:25:42.440
Alright, we are on the Oil and Gas Consent agenda,

00:25:42.440 --> 00:25:44.510
items seven through 27.

00:25:44.510 --> 00:25:46.680
There are 21 items on this agenda.

00:25:46.680 --> 00:25:49.850
I'm told staff wants to pass 26, is that correct?

00:25:49.850 --> 00:25:51.320
Number 26.

00:25:51.320 --> 00:25:53.440
Alright, I'm gonna move that we approve

00:25:53.440 --> 00:25:56.080
items seven through 27, with the exception

00:25:56.080 --> 00:25:57.750
of Item Number 26.

00:25:57.750 --> 00:25:59.760
Is there a second?
<v ->Second.</v>

00:25:59.760 --> 00:26:01.080
<v ->Second, Commissioner Christian.</v>

00:26:01.080 --> 00:26:02.683
All in favor, say aye.

00:26:02.683 --> 00:26:03.516
<v ->Aye.
<v ->Aye.</v>

00:26:03.516 --> 00:26:05.660
Motion passes, those items are approved.

00:26:05.660 --> 00:26:09.610
Master Default items, they are items 28 through 32.

00:26:09.610 --> 00:26:12.520
There are five items on this agenda.

00:26:12.520 --> 00:26:15.270
I'm gonna move that we approve items 28 through 32.

00:26:15.270 --> 00:26:16.654
Is there a second?

00:26:16.654 --> 00:26:18.390
<v ->Second.
<v ->Second, Commissioner Sitton.</v>

00:26:18.390 --> 00:26:19.947
All in favor, say aye.

00:26:19.947 --> 00:26:20.780
<v ->Aye.
<v ->Aye.</v>

00:26:20.780 --> 00:26:22.620
Motion passes, those items are approved.

00:26:22.620 --> 00:26:26.810
Agreed Enforcement Orders, items 33 through 160.

00:26:26.810 --> 00:26:31.060
There are 128 on this docket.

00:26:31.060 --> 00:26:34.790
I'm gonna move that we approve items 33 through 160.

00:26:34.790 --> 00:26:36.470
Is there a second?
<v ->Second.</v>

00:26:36.470 --> 00:26:38.210
<v ->Second, Commissioner Christian.</v>

00:26:38.210 --> 00:26:39.043
All in favor, say aye.

00:26:39.043 --> 00:26:40.020
<v ->Aye.
<v ->Aye.</v>

00:26:40.020 --> 00:26:41.780
Motion passes, those items are approved.

00:26:41.780 --> 00:26:43.500
That concludes the agreed section.

00:26:43.500 --> 00:26:45.422
Thanks, Randall.
<v ->Thank you.</v>

00:26:45.422 --> 00:26:47.755
<v ->Item 161.</v>

00:26:49.842 --> 00:26:51.130
Good morning, Wei.

00:26:51.130 --> 00:26:52.860
<v ->Good morning, Chairman, Commissioners.</v>

00:26:52.860 --> 00:26:55.210
For the record, I'm Wei Wang, Interim Director.

00:26:56.270 --> 00:26:58.930
As we wrap up the second quarter of the state fiscal year,

00:26:58.930 --> 00:27:02.640
I'm happy to report that the state of finances is strong.

00:27:03.560 --> 00:27:07.160
Thanks to funding certainty, we're able to plan ahead,

00:27:07.160 --> 00:27:08.900
which allows us to plug more wells

00:27:08.900 --> 00:27:10.690
and hire more inspectors.

00:27:10.690 --> 00:27:14.030
As of last Friday, we plugged 635 wells,

00:27:14.030 --> 00:27:16.850
which is more than the entire year of 2016.

00:27:16.850 --> 00:27:20.770
And today, we have 55 Pipeline Inspectors,

00:27:20.770 --> 00:27:23.120
the highest level in Commission history.

00:27:23.120 --> 00:27:25.330
So if this trend continues, I'm confident

00:27:25.330 --> 00:27:28.270
that we'll see even better numbers during the second half

00:27:28.270 --> 00:27:29.660
of the year.

00:27:29.660 --> 00:27:31.610
With that, I'm available for questions.

00:27:32.450 --> 00:27:33.512
<v Christi>Thank you.</v>

00:27:33.512 --> 00:27:34.530
Are there any questions?

00:27:34.530 --> 00:27:36.040
<v ->Just one comment, Madam Commissioner.</v>

00:27:36.040 --> 00:27:39.220
I wanna commend the other two Commissioners here,

00:27:39.220 --> 00:27:41.540
and our Interim Executive Director, Mr. Wang,

00:27:41.540 --> 00:27:43.900
who helped tremendously during session,

00:27:43.900 --> 00:27:46.260
to convince the Legislature to give us the funding

00:27:46.260 --> 00:27:48.710
that has provided this additional safety

00:27:48.710 --> 00:27:51.540
to the citizens of Texas, and want to extend

00:27:51.540 --> 00:27:54.850
this information to our friends at the capitol over there,

00:27:54.850 --> 00:27:57.817
when they consider the next session coming up, how much

00:27:57.817 --> 00:28:00.400
benefit, did the citizens of Texas, for them

00:28:00.400 --> 00:28:03.742
to see the Railroad Commission was properly funded.

00:28:03.742 --> 00:28:04.575
<v ->Thank you.</v>

00:28:04.575 --> 00:28:05.877
It was a good point.

00:28:05.877 --> 00:28:06.722
Any other things?

00:28:06.722 --> 00:28:07.610
<v ->No.
<v ->Okay.</v>

00:28:07.610 --> 00:28:08.443
Thank you.

00:28:08.443 --> 00:28:09.340
Wei, did you have anything else?

00:28:09.340 --> 00:28:11.590
<v ->No.
<v ->Okay.</v>

00:28:13.500 --> 00:28:15.000
163.

00:28:15.000 --> 00:28:18.220
<v ->163 is the Commission Employee Handbook.</v>

00:28:19.490 --> 00:28:22.430
I just wanna recognize our HR Director, Robbie Craig,

00:28:22.430 --> 00:28:23.790
and her staff, for their hard work.

00:28:23.790 --> 00:28:25.980
They've been working on this for several months.

00:28:25.980 --> 00:28:28.973
And with that, I'll turn over to General Counsel,

00:28:28.973 --> 00:28:32.421
and Assistant General Counsel Vanessa, for the presentation.

00:28:32.421 --> 00:28:33.693
<v Christi>Okay, good morning, Vanessa.</v>

00:28:33.693 --> 00:28:34.700
<v ->Good morning.</v>

00:28:34.700 --> 00:28:37.350
Vanessa Burgess, Assistant General Counsel, for the record.

00:28:37.350 --> 00:28:40.030
Item 163 pertains to the adoption of a new

00:28:40.030 --> 00:28:42.050
Commission Employee Handbook.

00:28:42.050 --> 00:28:44.260
A little background on this project:

00:28:44.260 --> 00:28:46.430
the Human Resources Department, in conjunction

00:28:46.430 --> 00:28:49.460
with the Executive Office and the Office of General Counsel,

00:28:49.460 --> 00:28:51.130
determined it was the appropriate time

00:28:51.130 --> 00:28:53.690
to review the Commission's current Employee Handbook,

00:28:53.690 --> 00:28:57.060
and make any necessary updates or changes to it.

00:28:57.060 --> 00:28:58.890
Accordingly, the Human Resources Division

00:28:58.890 --> 00:29:01.070
organized a work group of 10 employees

00:29:01.070 --> 00:29:03.360
with representation from the Oil and Gas,

00:29:03.360 --> 00:29:06.780
Oversight and Safety, and Surface Mining Divisions.

00:29:06.780 --> 00:29:09.640
This work group met weekly over the course of six months,

00:29:09.640 --> 00:29:11.220
in order to draft and review

00:29:11.220 --> 00:29:14.200
each and every policy in the new handbook.

00:29:14.200 --> 00:29:16.240
The work group consulted multiple handbooks

00:29:16.240 --> 00:29:19.170
used by other agencies, state statute,

00:29:19.170 --> 00:29:22.690
the State Auditor's inventory, and private sector handbooks,

00:29:22.690 --> 00:29:26.230
in order to create and shape this current draft handbook.

00:29:26.230 --> 00:29:29.420
Special thanks goes out to all the work group members,

00:29:29.420 --> 00:29:31.520
Catherine Dolan, Jason Clark,

00:29:31.520 --> 00:29:34.390
Robbie Craig, Carrie French, Eric Patton,

00:29:34.390 --> 00:29:37.060
Danny Kingsley, and Travis Wooten.

00:29:37.060 --> 00:29:40.080
And I'd like, at this time, to give extra special thanks

00:29:40.080 --> 00:29:42.090
to Wendy O'Neill in Human Resources

00:29:42.090 --> 00:29:44.240
for her tireless drafting and organization

00:29:44.240 --> 00:29:45.940
of the final handbook,

00:29:45.940 --> 00:29:48.720
and to Hailey Cochran in the Office of General Counsel,

00:29:48.720 --> 00:29:51.380
for her meticulous approach to assigning various tasks

00:29:51.380 --> 00:29:54.290
to members of the group, and keeping everyone on track

00:29:54.290 --> 00:29:57.400
to meet established internal guidelines.

00:29:57.400 --> 00:29:59.540
If approved, this handbook will supersede

00:29:59.540 --> 00:30:02.210
all prior agency handbooks, and serve as the guiding

00:30:02.210 --> 00:30:04.510
human resources policy document

00:30:04.510 --> 00:30:06.640
for Railroad Commission staff.

00:30:06.640 --> 00:30:08.710
A draft version of this handbook was included

00:30:08.710 --> 00:30:10.430
in your notebook materials.

00:30:10.430 --> 00:30:12.860
Staff asks that you adopt this current draft handbook.

00:30:12.860 --> 00:30:15.740
And I am available to answer any questions.

00:30:15.740 --> 00:30:16.573
<v ->Thank you.</v>

00:30:16.573 --> 00:30:17.406
Are there any questions?

00:30:17.406 --> 00:30:19.620
Well thank you all for your work, we appreciate it.

00:30:19.620 --> 00:30:20.453
And I know it takes time,

00:30:20.453 --> 00:30:22.580
but this is a good product.

00:30:22.580 --> 00:30:24.680
So, nice going.
<v ->Well thank you.</v>

00:30:24.680 --> 00:30:25.920
<v ->Nice going forward.</v>

00:30:25.920 --> 00:30:28.110
I move we approve the staff's recommendation.

00:30:28.110 --> 00:30:29.222
Is there a second?

00:30:29.222 --> 00:30:30.920
<v ->Second.
<v ->Second, Commissioner Sitton.</v>

00:30:30.920 --> 00:30:32.290
All in favor, say aye.

00:30:32.290 --> 00:30:33.123
<v ->Aye.
<v ->Aye.</v>

00:30:33.123 --> 00:30:34.303
Motion passes, this item is approved.

00:30:34.303 --> 00:30:35.259
Thank you.

00:30:35.259 --> 00:30:37.325
Alright, 164.

00:30:37.325 --> 00:30:38.158
Good morning, Alex.

00:30:38.158 --> 00:30:38.991
<v Alex>Good morning, Chairman, Commissioners.</v>

00:30:38.991 --> 00:30:40.320
For the record, my name is Alex Schoch,

00:30:40.320 --> 00:30:42.690
the General Counsel of the Railroad Commission of Texas.

00:30:42.690 --> 00:30:45.380
For item 164, Mr. Cooney just has a brief update

00:30:45.380 --> 00:30:47.920
on some of the recent developments on the Clean Power Plan.

00:30:47.920 --> 00:30:48.753
<v ->Great.</v>

00:30:48.753 --> 00:30:49.586
<v ->Good morning Chairman, Commissioners.</v>

00:30:49.586 --> 00:30:51.740
David Cooney, from the Office of General Counsel.

00:30:51.740 --> 00:30:54.100
Just wanted to advise that yesterday,

00:30:54.100 --> 00:30:56.810
the TCEQ, on behalf of themselves, us,

00:30:56.810 --> 00:30:58.340
and the PUC, filed comments

00:30:58.340 --> 00:31:01.810
on the EPA's Advance Notice of Proposed Rulemaking

00:31:01.810 --> 00:31:04.330
on State Guidelines for Greenhouse Gas Emissions

00:31:04.330 --> 00:31:08.200
from Existing Electric Utility Generating Units.

00:31:08.200 --> 00:31:11.110
And we are still, our comment

00:31:11.110 --> 00:31:13.348
is basically: what are you doing?

00:31:13.348 --> 00:31:16.380
(laughing)

00:31:16.380 --> 00:31:17.300
<v ->[Commissioner Sitton] Don't like this high-falutin'</v>

00:31:17.300 --> 00:31:19.339
legal language you're using.
<v ->Right, right.</v>

00:31:19.339 --> 00:31:21.229
<v ->[Commissioner Sitton] Tone it down for me, please.</v>

00:31:21.229 --> 00:31:24.060
<v ->The repeal, we also have comments brewing</v>

00:31:24.060 --> 00:31:25.830
on the repeal of the Clean Power Plan,

00:31:25.830 --> 00:31:28.420
but those are still, the Governor's Office

00:31:28.420 --> 00:31:31.167
is reviewing recommendations

00:31:31.167 --> 00:31:34.230
that the TCEQ made in response to their comments.

00:31:34.230 --> 00:31:36.880
Those will be filed timely, they're due April 26th.

00:31:36.880 --> 00:31:38.670
I'm available for any questions.

00:31:38.670 --> 00:31:39.503
<v Christi>Thank you.</v>

00:31:39.503 --> 00:31:41.520
Thank you for working with other agencies too.

00:31:41.520 --> 00:31:43.650
I think it makes us stronger, so I appreciate that.

00:31:43.650 --> 00:31:45.090
Thanks.

00:31:45.090 --> 00:31:46.730
<v ->Don't mess up that repeal.</v>

00:31:46.730 --> 00:31:48.564
<v ->No, don't mess up.</v>

00:31:48.564 --> 00:31:49.397
Alright.

00:31:51.535 --> 00:31:52.570
Morning.

00:31:52.570 --> 00:31:53.730
How are you?
<v ->Great.</v>

00:31:53.730 --> 00:31:55.650
Good morning, Chairman.
<v ->165.</v>

00:31:55.650 --> 00:31:56.780
<v ->Commissioners, for the record,</v>

00:31:56.780 --> 00:31:57.880
my name is Mark Everett,

00:31:57.880 --> 00:32:00.040
with the Oversight and Safety Division.

00:32:00.040 --> 00:32:03.110
Item Number 165 is Gas Utilities Docket

00:32:03.110 --> 00:32:06.610
Number 10695, Regulatory Accounting

00:32:06.610 --> 00:32:09.430
Related to Federal Income Tax Changes,

00:32:09.430 --> 00:32:11.920
Gas Utilities Accounting Order.

00:32:11.920 --> 00:32:14.250
On December 22nd, 2017,

00:32:14.250 --> 00:32:16.560
the President signed into law the Tax Cuts

00:32:16.560 --> 00:32:19.220
and Jobs Act of 2017.

00:32:19.220 --> 00:32:20.960
The act made widespread changes

00:32:20.960 --> 00:32:22.950
to the Internal Revenue Code,

00:32:22.950 --> 00:32:24.940
which included reducing the Federal Corporate

00:32:24.940 --> 00:32:28.630
Income Tax Rate from 35 to 21%.

00:32:28.630 --> 00:32:32.530
The act became effective on January 1st, 2018.

00:32:32.530 --> 00:32:35.110
On January 23rd, Chairman Craddick directed

00:32:35.110 --> 00:32:38.010
the Commission staff to assess the impact of the act

00:32:38.010 --> 00:32:40.180
on regulated gas utilities,

00:32:40.180 --> 00:32:43.210
to ensure that the tax savings are passed on to rate payers

00:32:43.210 --> 00:32:44.980
in the State of Texas.

00:32:44.980 --> 00:32:46.940
The Federal Corporate Income Tax Rate

00:32:46.940 --> 00:32:49.750
is a key component of the cost of service,

00:32:49.750 --> 00:32:52.400
used to set natural gas utility rates,

00:32:52.400 --> 00:32:55.290
and the reduction of the tax rate has a significant impact

00:32:55.290 --> 00:32:57.150
on the cost of service.

00:32:57.150 --> 00:32:58.970
Staff recommends the Commission adopt

00:32:58.970 --> 00:33:01.410
a Gas Utilities Accounting Order which accomplishes

00:33:01.410 --> 00:33:04.970
the following: one, orders gas utilities

00:33:04.970 --> 00:33:07.040
subject to the Commission's jurisdiction

00:33:07.040 --> 00:33:10.980
to create regulatory liabilities, to record the changes

00:33:10.980 --> 00:33:12.710
to rates and deferred income tax,

00:33:12.710 --> 00:33:16.970
effective January 1st, 2018, to the actual date

00:33:16.970 --> 00:33:18.950
the changes are implemented;

00:33:18.950 --> 00:33:22.330
two, orders gas utilities to file with the Commission

00:33:22.330 --> 00:33:26.470
to decrease rates to reflect the 21% tax rate,

00:33:26.470 --> 00:33:29.740
no later than September 1st, 2018,

00:33:29.740 --> 00:33:33.400
for gas utilities serving 10,000 customers or more,

00:33:33.400 --> 00:33:37.330
and no later than March 1st, 2019, for gas utilities

00:33:37.330 --> 00:33:39.560
serving less than 10,000 customers;

00:33:40.880 --> 00:33:44.010
three, orders gas utilities to refund the amount

00:33:44.010 --> 00:33:47.200
collected by the utility that reflects the difference

00:33:47.200 --> 00:33:49.460
between existing rates and the rates

00:33:49.460 --> 00:33:51.770
that would have been charged

00:33:51.770 --> 00:33:54.110
had the cost of service been calculated

00:33:54.110 --> 00:33:57.380
using a 21% Federal Income Tax rate.

00:33:57.380 --> 00:34:01.300
This covers the period between January 1st, 2018,

00:34:01.300 --> 00:34:04.920
and the date the rate decrease is effective.

00:34:04.920 --> 00:34:09.310
Four, orders gas utilities to implement the rate decreases

00:34:09.310 --> 00:34:12.010
and refunds through an administrative filing

00:34:12.010 --> 00:34:17.010
pursuant to Texas Utilities Code 104.111,

00:34:17.070 --> 00:34:19.620
or through a full Statement of Intent rate filing.

00:34:20.480 --> 00:34:24.100
Changes to rates made through a 104.111 filing

00:34:24.100 --> 00:34:26.580
will be subject to review in the gas utility's next

00:34:26.580 --> 00:34:29.180
Statement of Intent proceeding.

00:34:29.180 --> 00:34:32.950
And five, orders that the regulatory liabilities

00:34:32.950 --> 00:34:36.050
and amortization established by a gas utility

00:34:36.050 --> 00:34:39.230
shall be presented for consideration in setting the cost

00:34:39.230 --> 00:34:41.710
of service rates of the gas utility

00:34:41.710 --> 00:34:43.810
during the next Statement of Intent proceeding,

00:34:43.810 --> 00:34:45.180
or other rate proceeding.

00:34:46.930 --> 00:34:49.720
In staff's opinion, the Gas Utilities Accounting Order

00:34:49.720 --> 00:34:52.860
effectively ensures that the corporate tax savings

00:34:52.860 --> 00:34:55.140
resulting from the Tax Cuts and Jobs Act,

00:34:55.140 --> 00:34:58.100
are passed on to rate-payers in the State of Texas.

00:34:58.100 --> 00:35:01.160
And staff recommends that the Commission adopt the order.

00:35:02.574 --> 00:35:03.407
<v ->Thank you, Mark.</v>

00:35:03.407 --> 00:35:04.915
Are there any questions?

00:35:04.915 --> 00:35:06.380
I'd like to thank staff

00:35:06.380 --> 00:35:08.280
for looking at this and being timely about it.

00:35:08.280 --> 00:35:10.150
I appreciate it, and I think

00:35:10.150 --> 00:35:11.070
y'all have done a good job.

00:35:11.070 --> 00:35:12.690
And we're gonna pass these tax savings

00:35:12.690 --> 00:35:14.820
back down to customers, which I think is a priority.

00:35:14.820 --> 00:35:16.560
So thanks, Mark.
<v ->Thank you.</v>

00:35:17.820 --> 00:35:19.740
<v ->I move we approve the staff's recommendation.</v>

00:35:19.740 --> 00:35:21.340
Is there a second?
<v ->Second.</v>

00:35:21.340 --> 00:35:22.690
<v ->Second, Commissioner Christian.</v>

00:35:22.690 --> 00:35:24.234
All in favor, say aye.

00:35:24.234 --> 00:35:25.170
<v ->Aye.
<v ->Aye.</v>

00:35:25.170 --> 00:35:26.950
Motion is approved.

00:35:26.950 --> 00:35:28.350
We're on item 166.

00:35:28.350 --> 00:35:30.579
We have no public participation

00:35:30.579 --> 00:35:32.730
that anybody's turned any cards,

00:35:32.730 --> 00:35:36.920
so item 167 is our

00:35:39.820 --> 00:35:42.700
Executive Session.

00:35:42.700 --> 00:35:44.640
We're going to recess for Executive Session.

00:35:44.640 --> 00:35:46.820
So having duly convened

00:35:46.820 --> 00:35:50.050
in an open meeting, the Railroad Commission of Texas

00:35:50.050 --> 00:35:54.970
will now, at 10, I can't read that far today.

00:35:54.970 --> 00:35:56.630
<v ->10:10.
<v ->10:07, on Tuesday,</v>

00:35:56.630 --> 00:35:59.510
February 27th, 2018,

00:35:59.510 --> 00:36:02.880
hold a closed meeting in the Willa May Conference Room,

00:36:02.880 --> 00:36:04.980
on the 12th floor of the William B. Travis

00:36:04.980 --> 00:36:05.900
State Office Building,

00:36:05.900 --> 00:36:09.810
pursuant to Texas Government Code Chapter 551.

00:36:09.810 --> 00:36:11.990
The Commission will discuss personnel matters

00:36:11.990 --> 00:36:14.560
related to the position of Executive Director,

00:36:14.560 --> 00:36:18.260
pursuant to section 551.074 of the code.

00:36:18.260 --> 00:36:21.050
The Commission will reconvene the open meeting

00:36:21.050 --> 00:36:23.260
in the Willa May Conference Room,

00:36:23.260 --> 00:36:25.870
on the 12th floor of the William B. Travis

00:36:25.870 --> 00:36:26.800
State Office Building.

00:36:26.800 --> 00:36:27.650
We are recessed.

00:36:27.650 --> 00:36:28.483
Thank you.

00:36:31.480 --> 00:36:32.313
<v ->I'm signing.</v>