WEBVTT
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Good morning.
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This meeting of the Railroad Commission of Texas
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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 March 20th, 2018, the Spring Solstice.
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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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Reminder, please turn off your cellphones.
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Item number one.
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Good morning.
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Good morning, Commissioners.
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For the record, my name is Amy Bruce, and I am representing
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the Market Oversight section
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of the Oversight and Safety Division.
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Before you today is Gas Utilities Docket
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Number 10663, the application
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of Texas Gas Service Company, for the test year 2016,
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annual interim rate adjustment for the unincorporated
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portion of the North Texas Service Area.
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This docket is the sixth interim rate adjustment
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the company has filed for the North Texas Service Area
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environ, since the final order was issued
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in Gas Utilities Docket number 10094.
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This adjustment represents an incremental increase
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of $610,854
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of which $56,899
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may be collected from environ's customers.
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I recommend approval of the interim rate adjustment
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as revised, and I'm available to answer any questions.
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Thank you, Amy.
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Are there any questions?
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No.
I move we approve
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the examiner's recommendation.
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Is there a second?
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Second.
Second, Commissioner Sitton.
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All in favor, say aye.
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Aye.
Aye.
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Motion passed, this item is approved.
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Thanks.
Thank you.
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Item number two.
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Good morning, Commissioners.
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For the record, my name is Sarah Montoya-Foglesong.
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I'm also representing the Market Oversight Section
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of the Oversight and Safety Division.
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Before you today is Gas Utilities Docket
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Number 10666, the application of Texas Gas Service
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for the test year 2016, annual interim rate adjustment,
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for the unincorporated portion
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of the Gulf Coast Service Area.
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This is the first interim rate adjustment
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the company has filed for the environs at the Gulf Coast
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Service Area, since the final order was issued
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in Gas Utilities Docket number 10488.
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This adjustment represents an incremental increase
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of $464,756,
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of which $11,555
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is allocated to the environ's customers.
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I recommend approval of the interim rate adjustment
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as revised, and I'm happy to answer any questions
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you may have.
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Thank you, Sarah.
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Are there any questions?
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I move we approve the examiner's recommendation.
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Is there a second?
Second.
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Second, Commissioner Christian.
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All in favor, say aye.
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Aye.
Aye.
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Motion passed.
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Thank you.
This item is approved.
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Thank you.
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Item number three.
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Good morning, Chairman and Commissioners.
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For the record, my name is Christina Poole,
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and I'm also with the Oversight and Safety Division.
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The item before you today is Gas Utilities Docket
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Number 10668, the application of West Texas Gas Incorporated
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for the test year 2016, annual interim rate adjustment,
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for its unincorporated Texas Service Area.
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This docket is the fourth interim rate adjustment
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since the company's last rate case,
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GUD number 10235.
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The adjustment represents an incremental increase
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of $44,547, affecting two customer classes
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at the company's unincorporated Texas Service Area.
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Staff recommends approval
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of the interim rate adjustment, as revised.
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I'm available to answer questions.
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Thank you, Christina.
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Are there any questions?
Nope.
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I move we approve the examiner's recommendation.
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Is there a second?
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Second.
Second, Commissioner Sitton.
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All in favor, say aye.
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Aye.
Aye.
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Motion is approved.
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Good morning, Dana.
Good morning.
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Good morning, Chairman and Commissioners.
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For the record, my name is Dana Lewis,
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Administrative Law Judge with the Hearings Division.
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Item number four is a statement of intent,
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filed by Texas Gas Service Company,
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to increase rates in environs
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of the Rio Grande Service Area.
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Staff intervened, and the parties engaged
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in discovery and negotiations.
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A unanimous settlement agreement was reached,
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that resolved all issues.
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The settlement includes a revenue increase
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of $500,882, which consists
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of $253,516
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increase in the overall base rate, and a pipeline integrity
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testing rider, recovering an average
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of $247,367 annually.
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TGS' revenue calculations do incorporate
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the reduction to the corporate tax rate
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passed in the Tax Cuts and Jobs Act of 2017.
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The party has timely filed exceptions.
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No replies were filed.
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After review and consideration of the party's exceptions,
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the examiners issued non-substantive corrections
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to certain pages of the proposal for decision,
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and updated the final order with language conforming
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to the Commission's accounting order
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that was issued at the last conference.
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The examiners recommend the Commission approve
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the terms of the settlement agreement
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as reflected in the final order.
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I'm available for questions.
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Thank you.
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Are there any questions?
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I move we approve the examiner's recommendation.
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Is there a second?
Second.
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Second, Commissioner Christian.
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All in favor, say aye.
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Aye.
Aye.
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Motion passed, this item is approved.
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Thank you.
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Last time up, Marcy.
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It is.
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Good morning, Chairman and Commissioners.
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Marcy Spraggins, an ALJ with the Hearings Division.
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Luminant Mining Company LLC requested releases
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of reclamation obligations on an aggregate
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1,313.1 acres within permit number 46C,
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the Oak Hill Mine.
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Requests included Phase I and Phase II,
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and Phase II and III release for various acreages
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that are within 13 parcels of land.
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After notice no comments or requests for hearing were filed.
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Parties are Luminant and the staff.
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The acreage recommended for release
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is located in the D1, D2, and D3 areas,
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in the western-central portion of the permit area.
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Post-mine land uses approved for the acreage
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include forestry, fish and wildlife habitat,
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developed water resources, industrial-commercial,
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and pasture land.
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After field inspection, staff reviewed the areas
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requested for Phase I release,
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are recommended for approval except for parcel three,
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containing a structure that has been modified
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without approval, and has now been withdrawn.
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Parcels one, two, and 10, are recommended
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for Phase I release for backfilling,
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regrading, and drainage control.
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Staff inspection confirms Phase II's successful revegetation
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as required by the permit, for areas of pasture land,
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fish and wildlife habitat, and forestry.
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Concerns regarding parcel nine that drains to a pond,
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that shows rising concentrations of manganese,
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and parcel 11 that drained to a pond
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with rising TDS concentrations,
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have resulted in these being withdrawn
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from Phase II release, and III release.
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For Phase II, records of successful
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revegetation were filed for the areas mentioned before.
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Drainage from the areas requested for Phase II release,
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is routed to approved sediment control structures,
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with records of compliant discharges,
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except for a few exceedances for temporary sediment ponds
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that occurred prior to October, 2003.
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Stream monitoring data for disturbed downstream
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monitoring stations, indicates that average annual pH values
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and average as well as flow-weighted average
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TDS concentrations, were within the stream segment standards
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for segment 0505 of the Sabine River.
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Parcels four through eight have also been withdrawn
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from Phase III release, based on issues
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related to low pH at a USGS monitoring station,
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and because of inconsistent flow data.
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Parcels withdrawn are recommended
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for denial without prejudice, so that Luminant
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may refile for release.
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Based on the evidence received, and the recommendations
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by staff and Luminant's withdrawal
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of certain of the requests, I recommend
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approval of the proposed order.
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Staff calculated an eligible bond reduction amount
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for the parcels recommended for approval
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of Phase I release, and/or Phase II release,
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of $4,595,242.85.
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No changes to the bond instrument are requested
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at this time.
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And I'll be glad to answer your questions.
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Thank you, Marcy.
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Are there any questions?
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Nope.
I move we approve
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the examiner's recommendation.
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Is there a second?
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Second.
Second, Commissioner Sitton.
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All in favor, say aye.
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Aye.
Aye.
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Motion passed, this item is approved.
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Number six.
Commissioners, with your
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permission, I'll wait until the end of item eight,
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to bring the orders up.
Yes, ma'am.
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Items six and seven are for Texas Municipal Power Agency.
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TMPA submitted replacement bonds for its two permits,
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permit number 26D and 38D,
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for the Gibbons Creek Lignite Mines, in Grimes County.
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Both mines are in reclamation.
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Permit number 26D is currently bonded
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with a collateral bond and letter of credit,
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or LOC, issued by Wells Fargo Bank National Association,
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in the amount of $11.1 million.
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TMPA requests acceptance of a replacement collateral bond
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with LOC, also issued by Wells Fargo,
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in the amount of $11 million.
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The calculated reclamation cost estimate
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is $10,584,672.
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The replacement instrument will provide
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for a reduced amount that will still remain
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sufficient for reclamation of the permit area,
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of permit number 26D.
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Permit number 38D is currently bonded
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with a self bond, in the amount
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of $7.45 million, and a collateral bond
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with letter of credit by Wells Fargo,
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in the amount of $10.85 million.
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TMPA requests acceptance of a replacement self bond
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in the amount of $8.9 million,
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and a replacement collateral bond with LOC,
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issued by Wells Fargo, in the amount of $9.6 million.
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Together, the two proffered bonds will provide
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for increased total bonding, that will be sufficient
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to cover the costs of reclamation of permit 38D,
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which are $17,934,635.
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The bonds and LOCs are in proper form and format,
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and amount, and the letters of credit
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are irrevocable during their terms.
00:11:04.440 --> 00:11:06.700
For the self bond, TMPA has demonstrated
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that it has an A rating for its most recent bond issuance,
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and that it meets the requirement that the total
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self bond amount does not exceed 25%
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of TMPA's tangible net worth.
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Two ordering paragraphs are included in the proposed orders
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that require that replacement bonds be filed
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by January 9th, 2019,
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approximately 90 days prior to the expiration date
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of the collateral, which is April 9th, 2019,
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to ensure that the bonds are replaced in a timely manner,
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so that forfeiture proceedings would not be required.
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In addition, replacement bonds must be docketed
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with the Hearings Division at least 30 days prior
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to the expiration date, to ensure that such proceedings,
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if necessary, are begun in accordance with regulations.
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I recommend that the Commission accept the replacement bonds
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for both of these permits, and the LOCs.
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I'm available to answer your questions.
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Thank you.
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Are there any questions?
00:11:59.394 --> 00:12:00.950
Nope.
I'll make a motion
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on item number six, which is permit number 26D, first.
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I move we approve the examiner's recommendation.
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Is there a second?
Second.
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Second, Commissioner Christian.
00:12:10.010 --> 00:12:10.870
All in favor, say aye.
00:12:10.870 --> 00:12:11.830
Aye.
Aye.
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Motion passes, that item is approved.
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And on item number seven, which is permit number 38D,
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I move we approve the examiner's recommendation.
00:12:20.450 --> 00:12:21.630
Is there a second?
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Second.
Second, Commissioner Sitton.
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All those in favor, say aye.
00:12:24.730 --> 00:12:25.760
Aye.
Aye.
00:12:25.760 --> 00:12:28.090
Motion passes, that item is approved.
00:12:28.090 --> 00:12:28.923
Number eight.
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Commissioners, item eight is an application
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by Luminant Mining Company LLC,
00:12:34.750 --> 00:12:37.837
for release of Phases II and III reclamation obligations,
00:12:37.837 --> 00:12:41.940
for 312 acres within the Monticello Thermo Mine.
00:12:41.940 --> 00:12:43.650
The Commission approved Phase I release
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of reclamation liability for the acreage,
00:12:45.530 --> 00:12:47.960
requested by previous Commission orders.
00:12:47.960 --> 00:12:50.360
Staff of the Surface Mining and Reclamation Division
00:12:50.360 --> 00:12:53.850
filed its technical analysis and field inspection report,
00:12:53.850 --> 00:12:57.210
by a letter dated July 22nd, 2016,
00:12:57.210 --> 00:12:59.710
determining that there were remaining deficiencies
00:12:59.710 --> 00:13:01.210
in the application.
00:13:01.210 --> 00:13:03.130
Luminant supplemented the application,
00:13:03.130 --> 00:13:05.510
and staff filed its addendum number one
00:13:05.510 --> 00:13:08.060
to the TA, that recommended approval.
00:13:08.060 --> 00:13:10.330
After notice, one comment letter was filed,
00:13:10.330 --> 00:13:12.200
but no hearing was requested.
00:13:12.200 --> 00:13:14.620
The only parties are Luminant and staff.
00:13:14.620 --> 00:13:17.490
The post-mining land uses for the two parcels
00:13:17.490 --> 00:13:22.100
comprising 312.2 acres, consist of 150.5 acres
00:13:22.100 --> 00:13:26.550
of pasture land, 138.1 acres of fish and wildlife habitat,
00:13:26.550 --> 00:13:30.360
and 23.6 acres of developed water resources.
00:13:30.360 --> 00:13:33.240
Phase II revegetation requirements have been met
00:13:33.240 --> 00:13:35.600
in accordance with the reclamation plan,
00:13:35.600 --> 00:13:38.500
productivity and ground cover data for pasture land,
00:13:38.500 --> 00:13:40.520
and ground cover and stem count data
00:13:40.520 --> 00:13:42.030
for fish and wildlife habitat,
00:13:42.030 --> 00:13:44.860
meet or exceed applicable standards.
00:13:44.860 --> 00:13:47.650
Luminant has also successfully completed all mining
00:13:47.650 --> 00:13:51.010
and reclamation activities for the 312.2 acres
00:13:51.010 --> 00:13:53.070
requested for Phase III release.
00:13:53.070 --> 00:13:56.110
Requirements for completion of the ERP have been met.
00:13:56.110 --> 00:13:58.530
Surface water and groundwater within and adjacent
00:13:58.530 --> 00:14:00.570
to the areas requested for release
00:14:00.570 --> 00:14:03.560
have been protected in accordance with regulations.
00:14:03.560 --> 00:14:06.430
Luminant provided data from sedimentation ponds
00:14:06.430 --> 00:14:09.190
to show that the water quality permit requirements
00:14:09.190 --> 00:14:12.360
are being met, and that suspended solids and stream flow
00:14:12.360 --> 00:14:13.870
have been limited.
00:14:13.870 --> 00:14:17.250
Data from long-term surface water monitoring stations
00:14:17.250 --> 00:14:19.130
show that the stream segment criteria
00:14:19.130 --> 00:14:21.820
established by TCEQ, are met.
00:14:21.820 --> 00:14:24.080
The observed changes and overburdened wells
00:14:24.080 --> 00:14:26.880
follow the trends expected from the approved
00:14:26.880 --> 00:14:29.994
probable hydrologic consequences determination,
00:14:29.994 --> 00:14:32.283
that is contained in the permit.
00:14:33.550 --> 00:14:35.780
Water quality and quantity
00:14:35.780 --> 00:14:37.670
in the overburdened groundwater systems
00:14:37.670 --> 00:14:39.560
adjacent to the proposed release area
00:14:39.560 --> 00:14:41.720
have not been materially impacted.
00:14:41.720 --> 00:14:44.920
Staff found that results from sampling have been consistent
00:14:44.920 --> 00:14:49.390
with the PHC and the cumulative hydrologic impact assessment
00:14:49.390 --> 00:14:52.630
conducted by staff, that includes the permit area.
00:14:52.630 --> 00:14:55.540
Staff analysis also indicated reasonable conformity
00:14:55.540 --> 00:14:57.690
with pre-mine data.
00:14:57.690 --> 00:14:59.810
I recommend approval of the proposed order,
00:14:59.810 --> 00:15:02.060
including an eligible bond reduction amount
00:15:02.060 --> 00:15:03.233
of $239,020.32.
00:15:06.300 --> 00:15:08.130
I'll be glad to answer your questions.
00:15:08.130 --> 00:15:08.963
Thank you, Marcy.
00:15:08.963 --> 00:15:10.042
Are there any questions?
00:15:10.042 --> 00:15:10.875
Nope.
No.
00:15:10.875 --> 00:15:12.530
I move we approve the examiner's recommendation.
00:15:12.530 --> 00:15:13.940
Is there a second?
Second.
00:15:13.940 --> 00:15:15.270
Second, Commissioner Christian.
00:15:15.270 --> 00:15:16.510
All in favor, say aye.
00:15:16.510 --> 00:15:17.343
Aye.
Aye.
00:15:17.343 --> 00:15:19.210
Motion passes, that item is approved.
00:15:19.210 --> 00:15:20.043
Thank you, Marcy,
00:15:20.043 --> 00:15:21.927
for your service to us.
Thank you.
00:15:21.927 --> 00:15:23.930
You've done a great job, and I always like your pictures,
00:15:23.930 --> 00:15:25.260
by the way.
Thanks very much.
00:15:25.260 --> 00:15:27.213
I appreciate having been here.
00:15:28.210 --> 00:15:30.610
Good luck, I hope you enjoy retirement.
00:15:30.610 --> 00:15:31.693
Don't be a stranger.
00:15:31.693 --> 00:15:33.420
I will, for sure.
Good.
00:15:33.420 --> 00:15:34.420
Thank you.
00:15:36.000 --> 00:15:36.950
Item number nine.
00:15:39.630 --> 00:15:40.463
Good morning.
00:15:40.463 --> 00:15:42.370
Good morning, Chairman, Commissioners.
00:15:42.370 --> 00:15:43.820
For the record, Kristi Reeve,
00:15:43.820 --> 00:15:46.300
Administrative Law Judge, Hearings Division.
00:15:46.300 --> 00:15:48.850
I'll be presenting items number nine through 13,
00:15:48.850 --> 00:15:52.090
all of which are P-5 motions for rehearing.
00:15:52.090 --> 00:15:53.380
Item number nine.
00:15:53.380 --> 00:15:56.300
On January 23rd, 2018, the Commission entered
00:15:56.300 --> 00:15:57.890
a default order denying renewal
00:15:57.890 --> 00:16:02.270
of Caskids Operating Company's form P-5 Organization Report.
00:16:02.270 --> 00:16:04.790
Caskids filed a timely motion for rehearing,
00:16:04.790 --> 00:16:07.100
which states the operator is actively working
00:16:07.100 --> 00:16:09.540
to achieve compliance, and that four wells
00:16:09.540 --> 00:16:11.860
currently remain noncompliant.
00:16:11.860 --> 00:16:13.350
Staff opposes the motion.
00:16:13.350 --> 00:16:17.124
Staff's response states that four wells are noncompliant.
00:16:17.124 --> 00:16:19.430
For one well, the operator has failed to perform
00:16:19.430 --> 00:16:21.530
its annual H-5 test.
00:16:21.530 --> 00:16:24.010
For two wells, the operator's test to demonstrate
00:16:24.010 --> 00:16:27.720
the well bore is not a potential harm,
00:16:27.720 --> 00:16:29.430
has resulted in failure.
00:16:29.430 --> 00:16:31.917
And on the last well, the operator
00:16:34.470 --> 00:16:37.470
has failed to perform an H-15 test.
00:16:37.470 --> 00:16:39.600
I've been informed that two of the wells
00:16:39.600 --> 00:16:42.440
have now been plugged, but W-3's are pending,
00:16:42.440 --> 00:16:44.450
and the wells will not be considered plugged
00:16:44.450 --> 00:16:46.210
until they're filed and approved,
00:16:46.210 --> 00:16:48.793
and that two wells are awaiting plugging.
00:16:49.680 --> 00:16:51.830
It is recommended that the motion be denied.
00:16:51.830 --> 00:16:54.410
The motion will be overruled by operation of law
00:16:54.410 --> 00:16:55.870
on May 3rd, 2018.
00:16:55.870 --> 00:16:57.503
I'm available for questions.
00:16:59.603 --> 00:17:03.450
Kristi, do we expect them to get it done by May 3rd?
00:17:03.450 --> 00:17:05.040
We have one more conference.
00:17:05.040 --> 00:17:06.060
I think so.
00:17:06.060 --> 00:17:06.970
Yes, ma'am.
00:17:06.970 --> 00:17:09.620
If we pass this and they aren't done, can we do that?
00:17:09.620 --> 00:17:10.453
Yes, ma'am, we certainly can.
00:17:10.453 --> 00:17:11.290
Let's give them an opportunity.
00:17:11.290 --> 00:17:12.123
Okay?
Okay.
00:17:12.123 --> 00:17:13.470
Alright, we'll pass number nine.
00:17:13.470 --> 00:17:14.303
Thank you.
00:17:14.303 --> 00:17:15.350
Alright, and everything else I have
00:17:15.350 --> 00:17:16.360
for y'all is good news.
00:17:16.360 --> 00:17:18.360
We like good news.
I know.
00:17:18.360 --> 00:17:20.110
Randall told me I should always end on good news,
00:17:20.110 --> 00:17:21.840
so this works within that.
That's right.
00:17:21.840 --> 00:17:23.950
Alright, so item number 10.
00:17:23.950 --> 00:17:26.420
On January 23rd, 2018, the Commission entered
00:17:26.420 --> 00:17:29.280
a default order denying renewal of L&B Oil and Gas
00:17:29.280 --> 00:17:32.960
Equipment, LLC's form P-5 Organization Report.
00:17:32.960 --> 00:17:35.730
Subsequently, L&B resolved the inactive well issues,
00:17:35.730 --> 00:17:37.320
and is now in compliance.
00:17:37.320 --> 00:17:39.020
It is recommended the motion be granted,
00:17:39.020 --> 00:17:41.010
and the underlying docket be dismissed as moot.
00:17:41.010 --> 00:17:42.650
I'm available for questions.
00:17:42.650 --> 00:17:43.606
Thank you.
00:17:43.606 --> 00:17:44.439
Are there any questions?
00:17:44.439 --> 00:17:45.272
Nope.
No.
00:17:45.272 --> 00:17:46.910
I move we approve the examiner's recommendation.
00:17:46.910 --> 00:17:48.230
Is there a second?
Second.
00:17:48.230 --> 00:17:49.480
Second, Commissioner Sitton.
00:17:49.480 --> 00:17:50.313
All in favor, say aye.
00:17:50.313 --> 00:17:51.604
Aye.
Aye.
00:17:51.604 --> 00:17:53.088
Motion passed, this item is approved.
00:17:53.088 --> 00:17:54.059
Number 11.
00:17:54.059 --> 00:17:57.126
Item number 11, on January 23rd, 2018,
00:17:57.126 --> 00:17:59.514
the Commission entered a default order denying renewal
00:17:59.514 --> 00:18:03.869
of Mokan Capital LLC's form P-5 Organization Report.
00:18:03.869 --> 00:18:06.573
Subsequently, Mokan resolved the inactive well issues,
00:18:06.573 --> 00:18:08.005
and is now in compliance.
00:18:08.005 --> 00:18:09.971
It is recommended the motion be granted,
00:18:09.971 --> 00:18:12.156
and the underlying docket be dismissed as moot.
00:18:12.156 --> 00:18:13.512
I'm available for questions.
00:18:13.512 --> 00:18:14.583
Any questions?
Nope.
00:18:14.583 --> 00:18:16.959
Alright, I move we approve the examiner's recommendation.
00:18:16.959 --> 00:18:18.315
Is there a second?
Second.
00:18:18.315 --> 00:18:19.578
Second, Commissioner Christian.
00:18:19.578 --> 00:18:20.937
All in favor, say aye.
00:18:20.937 --> 00:18:21.770
Aye.
Aye.
00:18:21.770 --> 00:18:23.569
Motion passes, that item is approved.
00:18:23.569 --> 00:18:24.571
Number 12.
00:18:24.571 --> 00:18:27.024
On January 23rd, 2018, the Commission entered
00:18:27.024 --> 00:18:29.001
a default order denying renewal of Patno
00:18:29.001 --> 00:18:32.490
Oil and Gas Company's Form P-5 Organization Report.
00:18:32.490 --> 00:18:34.973
Subsequently, Patno resolved the inactive well issues
00:18:34.973 --> 00:18:36.606
and is now in compliance.
00:18:36.606 --> 00:18:38.696
It is recommended that the motion be granted,
00:18:38.696 --> 00:18:40.919
and the underlying docket be dismissed as moot.
00:18:40.919 --> 00:18:42.566
I'm available for questions.
00:18:42.566 --> 00:18:43.399
Thank you.
00:18:43.399 --> 00:18:44.232
Any questions?
Nope.
00:18:44.232 --> 00:18:46.064
I move we approve the examiner's recommendation.
00:18:46.064 --> 00:18:48.645
Is there a second?
Second.
00:18:48.645 --> 00:18:49.910
Okay.
00:18:49.910 --> 00:18:51.355
Whose turn was it?
00:18:51.355 --> 00:18:52.865
(laughing)
Okay.
00:18:52.865 --> 00:18:54.017
Second, Commissioner Sitton.
00:18:54.017 --> 00:18:55.216
All in favor, say aye.
00:18:55.216 --> 00:18:56.049
Aye.
Aye.
00:18:56.049 --> 00:18:59.369
Motion passes, that item is approved.
00:18:59.369 --> 00:19:00.937
Alright, item number 13.
00:19:00.937 --> 00:19:03.277
On January 23rd, 2018, the Commission entered
00:19:03.277 --> 00:19:05.002
a default order denying renewal
00:19:05.002 --> 00:19:09.500
of Rubac Technical Services' Form P-5 Organization Report.
00:19:09.500 --> 00:19:12.513
Subsequently, Rubac resolved the inactive well issues
00:19:12.513 --> 00:19:13.855
and is now in compliance.
00:19:13.855 --> 00:19:15.744
It is recommended that the motion be granted
00:19:15.744 --> 00:19:17.939
and the underlying docket be dismissed as moot.
00:19:17.939 --> 00:19:19.490
I'm available for questions.
00:19:19.490 --> 00:19:20.323
Thank you.
00:19:20.323 --> 00:19:22.215
I move we approve the examiner's recommendation.
00:19:22.215 --> 00:19:23.698
Is there a second?
Second.
00:19:23.698 --> 00:19:24.991
Second, Commissioner Christian.
00:19:24.991 --> 00:19:26.473
All those in favor, say aye.
00:19:26.473 --> 00:19:27.306
Aye.
Aye.
00:19:27.306 --> 00:19:29.201
Motion passes, that item is approved.
00:19:29.201 --> 00:19:30.217
Great, thank y'all very much.
00:19:30.217 --> 00:19:31.050
Thank you very much.
00:19:31.050 --> 00:19:33.281
We like good news.
00:19:33.281 --> 00:19:36.018
Items 14 through 57,
00:19:36.018 --> 00:19:39.415
there are 44 items on the consent agenda.
00:19:39.415 --> 00:19:42.481
I'm gonna move we approve items 14 through 57.
00:19:42.481 --> 00:19:44.706
Is there a second?
Second.
00:19:44.706 --> 00:19:47.010
Second by, I'm sorry, did we have one?
00:19:47.010 --> 00:19:49.173
Yeah, staff previously requested
00:19:49.173 --> 00:19:50.676
we pass number 38.
00:19:50.676 --> 00:19:51.757
I'm sorry, I didn't have that.
00:19:51.757 --> 00:19:52.590
Okay.
00:19:53.940 --> 00:19:55.471
Alright, let me, will you
00:19:55.471 --> 00:19:56.785
withdraw your second?
Withdraw, yup.
00:19:56.785 --> 00:19:57.618
Okay.
00:19:57.618 --> 00:20:00.968
So I'm gonna move we approve items 14 through 57,
00:20:00.968 --> 00:20:03.227
but pass number 38.
00:20:03.227 --> 00:20:04.179
Is there a second?
00:20:04.179 --> 00:20:05.889
Second.
Second, Commissioner Sitton.
00:20:05.889 --> 00:20:07.474
All those in favor say aye.
00:20:07.474 --> 00:20:08.307
Aye.
Aye.
00:20:08.307 --> 00:20:11.170
Motion passes, those items are approved.
00:20:11.170 --> 00:20:16.170
Rule 15, inactive wells, numbers 58 through 80.
00:20:17.000 --> 00:20:19.430
So we've got a couple in compliance, right?
00:20:19.430 --> 00:20:20.940
Number 80's in compliance.
00:20:20.940 --> 00:20:22.100
Is that correct?
00:20:22.100 --> 00:20:22.933
Alright.
00:20:22.933 --> 00:20:25.770
And I'd like to pass number 61.
00:20:25.770 --> 00:20:29.210
So there are 21 of those.
00:20:29.210 --> 00:20:31.450
Thank you, my math's slow today.
00:20:31.450 --> 00:20:34.000
I'm gonna move we approve items,
00:20:34.000 --> 00:20:37.750
these items, which we're excepting items 61 and 80,
00:20:37.750 --> 00:20:39.250
which is 21, yup.
00:20:39.250 --> 00:20:41.060
Is there a second?
Second.
00:20:41.060 --> 00:20:42.690
Second by Commissioner Christian.
00:20:42.690 --> 00:20:43.700
All those in favor say aye.
00:20:43.700 --> 00:20:45.240
Aye.
Aye.
00:20:45.240 --> 00:20:47.513
Motion passes, those items are approved.
00:20:48.640 --> 00:20:51.970
Agreed enforcement orders, items 81 through 295,
00:20:51.970 --> 00:20:54.040
there are 215.
00:20:54.040 --> 00:20:57.432
I'm gonna move that we approve items 81 through 295.
00:20:57.432 --> 00:20:58.333
Is there a second?
00:20:58.333 --> 00:20:59.166
Second.
00:20:59.166 --> 00:21:00.130
Second by Commissioner Sitton.
00:21:00.130 --> 00:21:01.210
All those in favor say aye.
00:21:01.210 --> 00:21:02.450
Aye.
Aye.
00:21:02.450 --> 00:21:04.390
Motion passes, those items are approved.
00:21:04.390 --> 00:21:06.390
That concludes the hearings section.
00:21:06.390 --> 00:21:07.730
Thank you.
00:21:07.730 --> 00:21:09.920
I'll take up administrative matters.
00:21:09.920 --> 00:21:13.230
296 and 297.
00:21:13.230 --> 00:21:14.450
Good morning, Wei.
00:21:14.450 --> 00:21:15.920
Good morning, Chairman, Commissioners.
00:21:15.920 --> 00:21:19.110
For the record, I'm Wei Wang, Interim Executive Director.
00:21:19.110 --> 00:21:22.480
And we have started updating
00:21:22.480 --> 00:21:25.320
our business continuity plan, which is also known
00:21:25.320 --> 00:21:26.990
as a coop plan.
00:21:26.990 --> 00:21:29.790
And Phase I is to update our procedures
00:21:29.790 --> 00:21:32.200
for the Austin headquarters.
00:21:32.200 --> 00:21:35.110
And Phase II is to include our district office.
00:21:35.110 --> 00:21:37.500
I'd also like to take the opportunity to introduce
00:21:37.500 --> 00:21:41.200
our new Safety Officer, Erica Guiterrez.
00:21:41.200 --> 00:21:43.180
She came to us from SORM,
00:21:43.180 --> 00:21:45.190
the State Offices of Risk Management.
00:21:45.190 --> 00:21:47.400
She'll be leading that project.
00:21:47.400 --> 00:21:50.200
And also, you may remember, the plan
00:21:50.200 --> 00:21:54.400
was put together in 2014, so we're also engaging
00:21:54.400 --> 00:21:56.400
the contractor we used at the time,
00:21:56.400 --> 00:21:58.600
to help us with the process.
00:21:58.600 --> 00:22:00.260
So that concludes my report for today.
00:22:00.260 --> 00:22:01.913
I'm available for questions.
00:22:01.913 --> 00:22:02.746
Thank you.
00:22:02.746 --> 00:22:03.740
Any questions?
No.
00:22:03.740 --> 00:22:04.573
Welcome.
00:22:05.810 --> 00:22:07.687
Okay, thank you.
00:22:07.687 --> 00:22:09.269
Item 298, Alex.
00:22:09.269 --> 00:22:10.670
Okay, good morning, Chairman, Commissioners.
00:22:10.670 --> 00:22:12.070
For the record, my name is Alex Schoch,
00:22:12.070 --> 00:22:14.550
General Counsel, the Railroad Commission of Texas.
00:22:14.550 --> 00:22:17.020
We've got nothing to report for 298 this morning.
00:22:17.020 --> 00:22:18.970
Natalie Dubiel and Hailey Cochrane
00:22:18.970 --> 00:22:20.720
have the next three items.
Okay.
00:22:25.070 --> 00:22:26.780
Good morning, Chairman and Commissioners.
00:22:26.780 --> 00:22:28.600
For the record, my name is Natalie Dubiel,
00:22:28.600 --> 00:22:30.800
with the Office of General Counsel.
00:22:30.800 --> 00:22:33.600
Item number 299 is an order nunc pro tunc,
00:22:33.600 --> 00:22:37.640
in Gas Utilities Docket number 10695,
00:22:37.640 --> 00:22:41.540
regulatory accounting related to Federal Income Tax changes.
00:22:41.540 --> 00:22:45.200
On February 27th, 2018, the Commission signed
00:22:45.200 --> 00:22:47.130
a Gas Utilities Accounting Order,
00:22:47.130 --> 00:22:49.760
in GUD number 10695,
00:22:49.760 --> 00:22:52.100
ordering gas utilities in the State of Texas
00:22:52.100 --> 00:22:54.470
to account for the reduction in the federal corporate
00:22:54.470 --> 00:22:59.140
income tax rate, due to the Tax and Cuts Job Act of 2017.
00:23:00.740 --> 00:23:02.890
Ordering paragraph number eight of that order
00:23:02.890 --> 00:23:05.000
contains a clerical error.
00:23:05.000 --> 00:23:10.000
The reference to Texas Utilities Code section 102.003b
00:23:10.280 --> 00:23:12.170
should be to Texas Utilities Code
00:23:12.170 --> 00:23:15.860
section 104.003b.
00:23:15.860 --> 00:23:17.990
The order nunc pro tunc corrects this reference,
00:23:17.990 --> 00:23:20.770
and staff recommends the Commission adopt the order.
00:23:20.770 --> 00:23:22.560
I'm available to answer any questions.
00:23:22.560 --> 00:23:23.512
Thank you.
00:23:23.512 --> 00:23:24.345
Are there any questions?
00:23:24.345 --> 00:23:25.330
No.
I move we approve
00:23:25.330 --> 00:23:26.590
the staff's recommendation
00:23:26.590 --> 00:23:27.803
Is there a second?
00:23:27.803 --> 00:23:29.680
Second.
Second, Commissioner Sitton.
00:23:29.680 --> 00:23:30.814
All in favor, say aye.
00:23:30.814 --> 00:23:31.647
Aye.
Aye.
00:23:31.647 --> 00:23:33.389
Motion passed, this item is approved.
00:23:33.389 --> 00:23:34.222
Thanks, Natalie.
Thank you.
00:23:34.222 --> 00:23:35.423
I also have item 300.
00:23:36.270 --> 00:23:38.100
Item number 300 on the agenda
00:23:38.100 --> 00:23:41.000
pertains to Commissioner approval of certain contracts
00:23:41.000 --> 00:23:43.830
pursuant to the Commission's delegation of authority,
00:23:43.830 --> 00:23:48.830
in section 2261.254 of the Texas Government Code.
00:23:49.040 --> 00:23:51.220
The Commission's internal delegation of authority
00:23:51.220 --> 00:23:53.790
requires Commissioner approval of contracts
00:23:53.790 --> 00:23:55.560
and associated amendments
00:23:55.560 --> 00:23:58.710
greater than or equal to $500,000.
00:23:58.710 --> 00:24:02.990
Section 2261.254 of the Texas Government Code
00:24:02.990 --> 00:24:06.270
requires approval of contracts and associated amendments
00:24:06.270 --> 00:24:08.630
greater than one million dollars.
00:24:08.630 --> 00:24:10.580
At issue today are two amendments,
00:24:10.580 --> 00:24:12.800
to well plugging master agreements that result
00:24:12.800 --> 00:24:15.810
from statewide well plugging solicitations.
00:24:15.810 --> 00:24:18.370
These amendments increase the not-to-exceed ceiling
00:24:18.370 --> 00:24:21.340
of the original master agreement with that vendor.
00:24:21.340 --> 00:24:23.780
Additionally at issue today is one solicitation
00:24:23.780 --> 00:24:26.460
for future well plugging services.
00:24:26.460 --> 00:24:28.550
Approval of these items today will ensure
00:24:28.550 --> 00:24:31.130
agency operations remain on schedule,
00:24:31.130 --> 00:24:33.270
and the necessary approvals will be in place
00:24:33.270 --> 00:24:35.530
pursuant to the Commission's delegation of authority
00:24:35.530 --> 00:24:37.030
and State law.
00:24:37.030 --> 00:24:39.540
A summary of these agreements and solicitation,
00:24:39.540 --> 00:24:42.730
including contract and solicitation number and amount,
00:24:42.730 --> 00:24:44.700
were included in your notebooks.
00:24:44.700 --> 00:24:46.990
Staff asks the Commission approve these agreements
00:24:46.990 --> 00:24:49.750
and solicitation, pursuant to the Commission's delegation
00:24:49.750 --> 00:24:51.870
of authority, and State law.
00:24:51.870 --> 00:24:53.300
I'm available to answer any questions.
00:24:53.300 --> 00:24:54.313
Thank you.
00:24:54.313 --> 00:24:55.146
Are there any questions?
00:24:55.146 --> 00:24:55.979
Nope.
00:24:55.979 --> 00:24:58.160
I move we approve the staff's recommendation.
00:24:58.160 --> 00:24:59.500
Is there a second?
Second.
00:24:59.500 --> 00:25:00.880
Second, Commissioner Christian.
00:25:00.880 --> 00:25:02.050
All in favor, say aye.
00:25:02.050 --> 00:25:03.120
Aye.
Aye.
00:25:03.120 --> 00:25:05.010
Motion passes, that item is approved.
00:25:05.010 --> 00:25:05.843
Thank you.
00:25:07.630 --> 00:25:08.490
Morning.
00:25:08.490 --> 00:25:09.699
How are you?
00:25:09.699 --> 00:25:11.043
Oh, good.
00:25:11.043 --> 00:25:13.220
Good morning, Chairman, Commissioners.
00:25:13.220 --> 00:25:15.940
Hailey Cochrane with the Office of General Counsel.
00:25:15.940 --> 00:25:18.160
Item number 301 is staff's recommendation
00:25:18.160 --> 00:25:19.560
to publish proposed amendments
00:25:19.560 --> 00:25:23.410
to 16 Texas Administrative Code, section 3.70.
00:25:23.410 --> 00:25:25.020
The amendments are necessary to implement
00:25:25.020 --> 00:25:28.000
the Commission Sunset Bill, House Bill 1818,
00:25:28.000 --> 00:25:30.060
which requires that the Commission impose fees
00:25:30.060 --> 00:25:32.440
to fund its Pipeline Safety Program.
00:25:32.440 --> 00:25:34.940
The proposed amendments create two main types of fees:
00:25:34.940 --> 00:25:37.280
an annual fee to pipeline permit holders,
00:25:37.280 --> 00:25:40.470
and a $500 processing fee for new permit applications
00:25:40.470 --> 00:25:41.980
and permit renewals.
00:25:41.980 --> 00:25:43.640
The amount of the annual fee would depend
00:25:43.640 --> 00:25:45.730
on the permitted mileage, and whether the pipeline
00:25:45.730 --> 00:25:48.030
falls into group A or group B.
00:25:48.030 --> 00:25:49.940
Group A pipelines are those subjects,
00:25:49.940 --> 00:25:52.210
subject to title 49 of the Code
00:25:52.210 --> 00:25:55.760
of Federal Regulations, parts 192 and 195.
00:25:55.760 --> 00:25:58.030
Because these pipelines paid higher inspection costs
00:25:58.030 --> 00:26:00.250
to the Commission, they would be charged $20
00:26:00.250 --> 00:26:01.850
per mile of pipe.
00:26:01.850 --> 00:26:03.830
Group B pipelines are required to comply
00:26:03.830 --> 00:26:05.580
with Commission rules, but are not subject
00:26:05.580 --> 00:26:08.920
to 49 CFR parts 192 and 195.
00:26:08.920 --> 00:26:11.620
These pipelines would be charged $10 per mile of pipe.
00:26:12.590 --> 00:26:14.250
Under the proposed amendments, the Commission
00:26:14.250 --> 00:26:16.320
would calculate this year's annual fee
00:26:16.320 --> 00:26:18.060
based on the mileage assigned to an operator
00:26:18.060 --> 00:26:20.550
as of June 29th of 2018.
00:26:20.550 --> 00:26:22.550
This year's annual fee would be due to the Commission
00:26:22.550 --> 00:26:24.300
on August 31st.
00:26:24.300 --> 00:26:26.360
And all subsequent years, an operator's annual fee
00:26:26.360 --> 00:26:28.460
would be based on mileage assigned to the operator
00:26:28.460 --> 00:26:30.237
as of December 31st,
00:26:30.237 --> 00:26:32.890
and the annual fee would be due on April 1st.
00:26:32.890 --> 00:26:35.010
The proposed amendments include additional changes,
00:26:35.010 --> 00:26:37.720
such as requiring electronic filing of permits,
00:26:37.720 --> 00:26:39.600
decreasing the time for Commission review
00:26:39.600 --> 00:26:41.230
of permit applications,
00:26:41.230 --> 00:26:44.090
and detailing procedures for pipeline transfers.
00:26:44.090 --> 00:26:45.780
Staff requests the Commission's approval
00:26:45.780 --> 00:26:47.700
to publish the proposed amendments
00:26:47.700 --> 00:26:50.490
in the Texas Register for a 30-day comment period.
00:26:50.490 --> 00:26:52.310
If approved today, the proposal
00:26:52.310 --> 00:26:55.290
should appear in the April 6th issue of the Register.
00:26:55.290 --> 00:26:56.550
The proposal and an online comment form
00:26:56.550 --> 00:26:59.630
would also be made available on the Commission's website.
00:26:59.630 --> 00:27:00.980
May I answer any questions?
00:27:02.050 --> 00:27:02.883
Thank you.
00:27:02.883 --> 00:27:03.716
Are there any questions?
00:27:03.716 --> 00:27:04.573
I have a question.
00:27:04.573 --> 00:27:07.200
Hailey, when you started off your presentation,
00:27:07.200 --> 00:27:10.810
you talked about that this,
00:27:10.810 --> 00:27:12.260
well in fact, the proposed amendments are necessary
00:27:12.260 --> 00:27:13.970
to implement provisions of the House Bill 1818,
00:27:13.970 --> 00:27:17.047
which requires the Commission to create fees,
00:27:17.047 --> 00:27:17.880
da, da, da, da, da.
00:27:19.262 --> 00:27:20.710
I wanna be careful about our language here,
00:27:20.710 --> 00:27:23.860
because we actually write, in our proposed rule amendment,
00:27:23.860 --> 00:27:27.300
on page one, that Natural Resources Code,
00:27:27.300 --> 00:27:29.280
which authorizes and requires the Commission
00:27:29.280 --> 00:27:32.130
to establish pipeline safety and regulatory fees.
00:27:32.130 --> 00:27:34.000
I'm not sure that's accurate.
00:27:34.000 --> 00:27:36.150
I wanna be careful about our language here.
00:27:37.630 --> 00:27:41.260
I believe that the House Sunset Bill,
00:27:41.260 --> 00:27:43.760
the amendment to Bill 1818, which amended
00:27:43.760 --> 00:27:45.040
the Natural Resources Code, says
00:27:45.040 --> 00:27:47.710
that the Railroad Commission may establish
00:27:47.710 --> 00:27:49.510
pipeline safety and regulatory fees.
00:27:50.460 --> 00:27:51.820
Am I correct in that?
00:27:51.820 --> 00:27:52.740
Yes, sir, that's correct.
00:27:52.740 --> 00:27:55.100
Okay, so then I think we should not say
00:27:55.100 --> 00:27:57.450
that it's required, because it's not.
00:27:57.450 --> 00:27:59.623
It's an option that we can take.
00:28:04.360 --> 00:28:05.980
Further on to that, Commissioners,
00:28:05.980 --> 00:28:09.050
I have a couple of reservations about the structure
00:28:09.050 --> 00:28:11.283
of this fee.
00:28:12.930 --> 00:28:15.173
In general, we have shown,
00:28:17.530 --> 00:28:19.940
Commission has had a hard time assessing the market,
00:28:19.940 --> 00:28:21.540
in some cases.
00:28:21.540 --> 00:28:23.880
And part of the Sunset Bill
00:28:23.880 --> 00:28:26.870
was that the effects of these fees,
00:28:26.870 --> 00:28:28.990
we would need to assess the effects of these fees
00:28:28.990 --> 00:28:31.520
on operators of all sizes.
00:28:31.520 --> 00:28:33.890
And we currently have, the way this thing is structured,
00:28:33.890 --> 00:28:37.250
that any gathering systems that leave a lease
00:28:37.250 --> 00:28:40.920
are charged a $10 annual mileage fee,
00:28:40.920 --> 00:28:44.700
and there are some gathering systems in the State of Texas
00:28:44.700 --> 00:28:46.970
today, that operate at a loss.
00:28:46.970 --> 00:28:49.470
And I'm very concerned that by this kind,
00:28:49.470 --> 00:28:53.390
even though we have two separate categories of fees,
00:28:53.390 --> 00:28:55.310
that there are pockets of operation
00:28:55.310 --> 00:28:57.900
that we need to be very careful
00:28:57.900 --> 00:29:00.913
about applying new fees to.
00:29:03.890 --> 00:29:07.070
And once again, given our struggles
00:29:07.070 --> 00:29:09.430
to assess the market in some of our rate-making cases,
00:29:09.430 --> 00:29:12.380
I'm really uncomfortable with this fee structure
00:29:13.490 --> 00:29:16.760
that has kind of blanketed all gathering systems
00:29:16.760 --> 00:29:17.943
across the state.
00:29:19.670 --> 00:29:23.267
So I'm inclined to slow,
00:29:23.267 --> 00:29:25.290
to take a step back on this.
00:29:25.290 --> 00:29:28.240
There are some other issues with this,
00:29:28.240 --> 00:29:31.530
with this rule, this proposed change,
00:29:31.530 --> 00:29:32.560
the way it's written.
00:29:32.560 --> 00:29:34.770
For example, on page two,
00:29:34.770 --> 00:29:37.490
we require an operator to utilize our POP system,
00:29:37.490 --> 00:29:39.110
which currently isn't working.
00:29:39.110 --> 00:29:40.180
I understand that we--
00:29:40.180 --> 00:29:41.850
When did it quit working?
00:29:41.850 --> 00:29:42.885
What?
00:29:42.885 --> 00:29:44.460
Does the POP system work?
00:29:44.460 --> 00:29:45.293
It currently works.
00:29:45.293 --> 00:29:47.050
They're making additional changes
00:29:47.050 --> 00:29:51.660
to be able to handle the new requirements,
00:29:51.660 --> 00:29:54.390
and those are gonna be in place, my understanding,
00:29:54.390 --> 00:29:56.040
before the rule goes into effect.
00:29:57.800 --> 00:29:58.633
Well said.
00:29:58.633 --> 00:30:00.540
And my concern is, we should make sure those are working
00:30:00.540 --> 00:30:03.150
before we take the steps on the rule.
00:30:03.150 --> 00:30:05.870
I think it was Dao, in one of the comments,
00:30:05.870 --> 00:30:09.260
said that hey, we're gonna put a rule out that requires
00:30:09.260 --> 00:30:11.820
something that we couldn't actually do today.
00:30:11.820 --> 00:30:14.963
So that gives me some pause.
00:30:16.930 --> 00:30:19.080
On page three, if an operator needs to update
00:30:19.080 --> 00:30:21.230
its number of permitted miles, the operator must submit
00:30:21.230 --> 00:30:23.810
a permit amendment no later than May 15th, 2018.
00:30:23.810 --> 00:30:27.300
This rule will go into effect after that date.
00:30:27.300 --> 00:30:29.510
So there's just a number of things about this
00:30:29.510 --> 00:30:31.920
that I have pause with, the biggest one being,
00:30:31.920 --> 00:30:35.840
I'm not comfortable with assessing a new fee
00:30:35.840 --> 00:30:39.220
that could potentially push some of these gathering systems
00:30:39.220 --> 00:30:40.610
that are already operating at a loss,
00:30:40.610 --> 00:30:42.203
to have them face more losses.
00:30:43.740 --> 00:30:45.303
So that said, I'm gonna,
00:30:46.780 --> 00:30:48.366
based on the way this thing sits today,
00:30:48.366 --> 00:30:50.383
I'm inclined to vote against this.
00:30:51.412 --> 00:30:53.410
You have a comment?
Yes.
00:30:53.410 --> 00:30:55.440
My understanding is, and correct me if I'm wrong,
00:30:55.440 --> 00:30:58.000
this is opening up for public comment.
00:30:58.000 --> 00:30:59.200
Is that correct?
Yes sir.
00:30:59.200 --> 00:31:03.360
So we are not approving the long-term rules
00:31:03.360 --> 00:31:04.750
as written, we're just,
00:31:04.750 --> 00:31:08.079
and I'm all for public comment and comment by the folks.
00:31:08.079 --> 00:31:11.678
I appreciate the things you brought up, but I would think
00:31:11.678 --> 00:31:13.270
that's why we're having comment,
00:31:13.270 --> 00:31:15.340
to correct those type of things, if they're identified.
00:31:15.340 --> 00:31:17.560
And later we'll vote on whether to accept it permanently,
00:31:17.560 --> 00:31:18.393
I believe.
00:31:18.393 --> 00:31:20.090
Is that true?
That's the process, yes.
00:31:20.090 --> 00:31:21.560
Okay.
00:31:21.560 --> 00:31:24.100
Yeah, while I respect your change on this,
00:31:24.100 --> 00:31:26.160
I see no reason of not moving forward with comments
00:31:26.160 --> 00:31:27.780
so we will consider,
00:31:27.780 --> 00:31:30.040
and I respect what happens
00:31:30.040 --> 00:31:32.240
when we come back and get the final version.
00:31:33.520 --> 00:31:34.640
You're right, we could make amendments later.
00:31:34.640 --> 00:31:36.150
I just don't wanna put out something
00:31:36.150 --> 00:31:38.510
where if we sit here today, and say
00:31:38.510 --> 00:31:40.350
I'm not gonna approve this the way it's written today,
00:31:40.350 --> 00:31:41.796
I don't wanna put it out there for public comment.
00:31:41.796 --> 00:31:43.770
I wanna get it to a point that I feel confident
00:31:43.770 --> 00:31:46.007
in it, before we put it out for public comment.
00:31:46.007 --> 00:31:48.393
That's my approach.
I understand.
00:31:52.260 --> 00:31:54.270
Let me say, I'm okay,
00:31:54.270 --> 00:31:56.210
I feel comfortable with the public comment part,
00:31:56.210 --> 00:31:59.280
and that the staff hears your recommendations,
00:31:59.280 --> 00:32:02.610
and I agree with that we say it correctly
00:32:02.610 --> 00:32:04.390
with the legislation that was passed.
00:32:04.390 --> 00:32:07.100
It's not a requirement, that needs to be clarified.
00:32:07.100 --> 00:32:08.811
But I would think, am I correct,
00:32:08.811 --> 00:32:11.760
that some of the comments made will be considered
00:32:11.760 --> 00:32:13.690
by the staff, as they take comments,
00:32:13.690 --> 00:32:15.430
and you've heard comments from the Commissioner.
00:32:15.430 --> 00:32:17.300
So that would be under consideration
00:32:17.300 --> 00:32:18.560
for this commentary time.
00:32:18.560 --> 00:32:19.440
Correct?
Yes, sir.
00:32:19.440 --> 00:32:20.273
Okay.
00:32:22.087 --> 00:32:23.670
Let me do my,
00:32:23.670 --> 00:32:26.610
I have a statement before I would do a second.
00:32:26.610 --> 00:32:29.500
As a Conservative, I'm not proposing raising taxes
00:32:29.500 --> 00:32:30.830
and fees on the industry we regulate.
00:32:30.830 --> 00:32:33.690
However, I'm also not a proponent of a person
00:32:33.690 --> 00:32:37.820
being forced to pay for person A, from B's services.
00:32:37.820 --> 00:32:39.910
And currently, Texas taxpayers are on the hook
00:32:39.910 --> 00:32:43.923
to pay for the pipeline industry's regulation.
00:32:44.994 --> 00:32:46.820
The last session, part of Sunset,
00:32:46.820 --> 00:32:49.330
the Texas Legislature asked us to assess a new fee
00:32:49.330 --> 00:32:52.250
to shift the burden from paying our pipeline program,
00:32:52.250 --> 00:32:53.600
from the average Texas family,
00:32:53.600 --> 00:32:55.860
to the pipeline industry we regulate.
00:32:55.860 --> 00:32:58.010
And I commend the industry for agreeing to that.
00:32:58.010 --> 00:33:00.630
It shows good faith on the industry, I believe.
00:33:00.630 --> 00:33:03.330
I believe it is the Conservative right move forward
00:33:03.330 --> 00:33:05.490
for our agency, as long as the fees are not frivolous,
00:33:05.490 --> 00:33:06.700
and simply cover the cost
00:33:06.700 --> 00:33:09.230
of our pipeline inspection programs.
00:33:09.230 --> 00:33:11.250
This provision of our Sunset legislation
00:33:11.250 --> 00:33:13.390
was passed with industry support,
00:33:13.390 --> 00:33:15.860
because the industry believes pipeline companies,
00:33:15.860 --> 00:33:19.310
not Texas families, should pay for the pipeline regulation.
00:33:19.310 --> 00:33:21.730
If we don't at very least propose the rule change,
00:33:21.730 --> 00:33:23.970
how can we go back to the Legislature, next session,
00:33:23.970 --> 00:33:27.310
and ask 'em, ask the people of Texas to fund this agency,
00:33:27.310 --> 00:33:29.320
when we're not willing to do what's necessary
00:33:29.320 --> 00:33:30.840
to fund ourselves.
00:33:30.840 --> 00:33:32.890
And again, since this is commentary
00:33:32.890 --> 00:33:35.150
toward some of the good suggestions you made,
00:33:35.150 --> 00:33:38.440
I will second the motion that is made.
00:33:38.440 --> 00:33:39.640
Okay.
00:33:39.640 --> 00:33:40.900
And I appreciate that, and I think
00:33:40.900 --> 00:33:44.350
we're trying to keep up with the Sunset recommendations,
00:33:44.350 --> 00:33:47.110
which obviously took us eight years to get there.
00:33:47.110 --> 00:33:49.890
This was part of it that they never took out for us.
00:33:49.890 --> 00:33:52.800
So I think we've had a lot of conversations,
00:33:52.800 --> 00:33:55.460
and I agree with you, with the Legislature,
00:33:55.460 --> 00:33:56.860
spent a lot of time last session
00:33:56.860 --> 00:33:58.890
about how we're gonna fund this agency.
00:33:58.890 --> 00:34:01.640
And it's showing that our regulatory programs
00:34:01.640 --> 00:34:02.670
are funded by people
00:34:05.509 --> 00:34:07.400
that we provide the services to.
00:34:07.400 --> 00:34:09.870
So the Legislature and the Texas taxpayers
00:34:09.870 --> 00:34:12.370
don't have to fund those services.
00:34:12.370 --> 00:34:14.260
I think this is part of that effort,
00:34:14.260 --> 00:34:17.950
and I'm glad we're moving in the step
00:34:17.950 --> 00:34:20.690
to do what the Legislature's asked us to do, quite frankly,
00:34:20.690 --> 00:34:21.523
as we go forward.
00:34:21.523 --> 00:34:23.030
So I look forward to the comments back.
00:34:23.030 --> 00:34:25.300
I think it is always difficult
00:34:26.631 --> 00:34:30.470
to increase, or add additional fees to people.
00:34:30.470 --> 00:34:34.060
So I appreciate the comments, and I look forward to those.
00:34:34.060 --> 00:34:36.883
So I'm gonna move that we put this out for comment.
00:34:37.720 --> 00:34:39.170
Sorry, can I clarify, one second?
00:34:39.170 --> 00:34:41.180
Because we've had two suggestions
00:34:41.180 --> 00:34:43.940
that y'all wanted to remove the word requires
00:34:43.940 --> 00:34:45.060
from the preamble.
00:34:45.060 --> 00:34:47.580
And so I wanna make sure that the version that y'all sign
00:34:47.580 --> 00:34:49.240
is what you wanna sign.
00:34:49.240 --> 00:34:52.190
So do you want to remove the word "requires" from the preamble
00:34:52.190 --> 00:34:55.023
or y'all moving forward with the preamble as is?
00:34:56.220 --> 00:34:57.800
I agree with Commissioner Sitton,
00:34:57.800 --> 00:34:59.410
that "requires," if it's not in the law,
00:34:59.410 --> 00:35:00.860
we shouldn't have it in ours.
00:35:02.080 --> 00:35:04.863
We should match what the Legislature passed.
00:35:05.894 --> 00:35:08.350
But I think you can say "authorizes,"
00:35:08.350 --> 00:35:09.563
would be appropriate.
00:35:11.002 --> 00:35:13.180
The "require" part, if we're going to do a fee,
00:35:13.180 --> 00:35:14.880
"requires" is to pay,
00:35:14.880 --> 00:35:19.391
to put a fee in place that pays for the whole program.
00:35:19.391 --> 00:35:21.324
That's how I read the statute.
00:35:21.324 --> 00:35:22.157
Is that correct?
Yes, I think
00:35:22.157 --> 00:35:23.420
our interpretation was that the effect
00:35:23.420 --> 00:35:24.930
requires us to implement a fee,
00:35:24.930 --> 00:35:27.560
because we have to get the money from a different fund
00:35:27.560 --> 00:35:29.880
than we were before.
00:35:29.880 --> 00:35:32.630
But the law itself does not say "requires," that's correct.
00:35:32.630 --> 00:35:33.620
Okay.
00:35:33.620 --> 00:35:36.900
So if you wanna tweak that, that might be helpful.
00:35:36.900 --> 00:35:40.333
I think authorizes us, and then requires us to pay
00:35:42.080 --> 00:35:45.170
for the fund, with a fund, pay for itself.
00:35:45.170 --> 00:35:47.780
So however you wanna adjust that, that would be fine.
00:35:47.780 --> 00:35:49.067
I'll just make it on this version
00:35:49.067 --> 00:35:50.110
that I'm gonna bring to y'all in writing,
00:35:50.110 --> 00:35:52.900
and then we'll make a correction when we file it.
00:35:52.900 --> 00:35:54.110
Okay, that'd be fine.
00:35:54.110 --> 00:35:55.870
So with that tweak--
00:35:55.870 --> 00:35:56.970
Can I make one last comment?
00:35:56.970 --> 00:35:58.480
I just wanna make sure,
00:35:58.480 --> 00:36:00.547
I'm not opposed to, just to make sure,
00:36:00.547 --> 00:36:03.670
I'm not opposed to us having, being a fee-based agency.
00:36:03.670 --> 00:36:05.150
So I'm comfortable with fees,
00:36:05.150 --> 00:36:06.780
I'm just not comfortable with the way
00:36:06.780 --> 00:36:08.560
this presents itself right now.
00:36:08.560 --> 00:36:09.393
So I wanna make sure
00:36:09.393 --> 00:36:10.226
I'm clear about that.
Yes, sir.
00:36:10.226 --> 00:36:13.300
And I think it'd be helpful, that's why I think
00:36:14.389 --> 00:36:17.640
companies of all sizes, I know we've started some feedback,
00:36:17.640 --> 00:36:19.330
but I think it's important to get the feedback,
00:36:19.330 --> 00:36:22.110
because we may see a different way to do things.
00:36:22.110 --> 00:36:24.290
So with that, we've got a--
00:36:24.290 --> 00:36:25.930
Second.
Second?
00:36:25.930 --> 00:36:30.370
I move we approve the staff's recommendation,
00:36:30.370 --> 00:36:31.820
with the tweak you're gonna make for us.
00:36:31.820 --> 00:36:32.653
Is there a second?
00:36:32.653 --> 00:36:33.510
And we have one.
Second.
00:36:33.510 --> 00:36:34.360
All in favor say aye.
00:36:34.360 --> 00:36:36.160
Aye.
Aye.
00:36:36.160 --> 00:36:37.890
Opposed?
No.
00:36:37.890 --> 00:36:38.723
Motion passes.
00:36:38.723 --> 00:36:40.700
Thank you, Hailey, for the work on this.
00:36:41.710 --> 00:36:42.543
Okay.
00:36:43.490 --> 00:36:44.550
Alex, are you done?
00:36:44.550 --> 00:36:45.383
Are you still up?
00:36:45.383 --> 00:36:47.627
Okay, didn't know if you had anything else to report.
00:36:47.627 --> 00:36:49.040
No.
Okay, alright.
00:36:49.040 --> 00:36:50.200
We're on 302.
00:36:50.200 --> 00:36:51.630
Is that correct?
00:36:51.630 --> 00:36:52.463
Yes.
Did I skip something?
00:36:52.463 --> 00:36:53.480
Okay.
00:36:53.480 --> 00:36:55.250
Good morning, Chairman, Commissioners.
00:36:55.250 --> 00:36:56.807
For the record, my name's Lori Wrotenbery.
00:36:56.807 --> 00:36:59.610
I'm the Director of the Oil and Gas Division.
00:36:59.610 --> 00:37:04.610
And item 302 is another Sunset action.
00:37:05.390 --> 00:37:07.360
It is the Draft Oil and Gas Division
00:37:07.360 --> 00:37:10.010
Monitoring and Enforcement Strategic Plan
00:37:10.010 --> 00:37:12.600
for Fiscal Year 2019.
00:37:12.600 --> 00:37:15.510
And today what we're doing is asking your approval
00:37:15.510 --> 00:37:19.950
to make the draft plan available for public comment.
00:37:19.950 --> 00:37:23.800
Once finalized, this plan will be the Commission's first
00:37:23.800 --> 00:37:26.580
annual Oil and Gas Division Monitoring
00:37:26.580 --> 00:37:28.440
and Enforcement Strategic Plan,
00:37:28.440 --> 00:37:32.220
as required by House Bill 1818.
00:37:32.220 --> 00:37:36.580
The plan is intended to set goals for, and measure
00:37:36.580 --> 00:37:39.290
the effectiveness of the Commission's Oil and Gas
00:37:39.290 --> 00:37:42.120
monitoring and enforcement activities.
00:37:42.120 --> 00:37:44.340
To develop this plan, the Commission staff
00:37:44.340 --> 00:37:48.060
convened a work group of about 15 employees
00:37:48.060 --> 00:37:51.750
from the Executive Office, the Oil and Gas Division,
00:37:51.750 --> 00:37:53.340
the Office of General Counsel,
00:37:53.340 --> 00:37:57.040
and the Information Services Technology Division.
00:37:57.040 --> 00:38:01.000
The work group met five times between October and February.
00:38:01.000 --> 00:38:03.480
And we are very thankful for the contributions
00:38:03.480 --> 00:38:06.040
of all of the members of the work group,
00:38:06.040 --> 00:38:09.363
but in particular, we wanna thank Colleen Forest.
00:38:10.340 --> 00:38:11.710
Right here, you moved up.
00:38:11.710 --> 00:38:15.030
Colleen Forest, who shared her strategic planning
00:38:15.030 --> 00:38:17.640
and performance measurement expertise with us,
00:38:17.640 --> 00:38:21.010
and also, through her organizational skills,
00:38:21.010 --> 00:38:23.170
helped to keep us on track and on schedule
00:38:23.170 --> 00:38:24.683
in development of this plan.
00:38:25.810 --> 00:38:29.040
House Bill 1818 requires the Commission to seek input
00:38:29.040 --> 00:38:32.810
from stakeholders when developing the plan.
00:38:32.810 --> 00:38:35.700
With your approval, we will make the draft plan
00:38:35.700 --> 00:38:38.320
available for public comment, for about a month,
00:38:38.320 --> 00:38:40.920
through April 20th.
00:38:40.920 --> 00:38:44.350
Members of the public who are interested in providing input
00:38:44.350 --> 00:38:45.760
will have a couple of options:
00:38:45.760 --> 00:38:48.570
they'll be able to file comments online
00:38:49.560 --> 00:38:52.890
through a survey mechanism, and they also will be able
00:38:52.890 --> 00:38:56.010
to submit written comments through the mail.
00:38:56.010 --> 00:38:58.800
The final version of the plan has to be posted
00:38:58.800 --> 00:39:01.350
to the Commission's website by July 1st.
00:39:01.350 --> 00:39:05.100
So we plan to bring to conference
00:39:05.100 --> 00:39:08.020
on June 5th, the final version of the plan
00:39:08.020 --> 00:39:09.450
for your approval.
00:39:09.450 --> 00:39:12.730
That final version will reflect the public comments
00:39:12.730 --> 00:39:15.730
that we've received, and it will also include
00:39:15.730 --> 00:39:20.730
updated data and projections on the performance measures.
00:39:20.790 --> 00:39:23.483
And with that, we're available to answer questions.
00:39:24.600 --> 00:39:25.433
Thank you.
00:39:25.433 --> 00:39:26.360
Are there any questions?
00:39:26.360 --> 00:39:28.100
I appreciate the work y'all have done on this,
00:39:28.100 --> 00:39:30.490
and again, more things from Sunset,
00:39:30.490 --> 00:39:32.418
that we'll go, moving forward.
00:39:32.418 --> 00:39:34.460
So I move we approve staff's recommendation.
00:39:34.460 --> 00:39:35.513
Is there a second?
00:39:35.513 --> 00:39:37.490
Second.
Second, Commissioner Sitton.
00:39:37.490 --> 00:39:38.703
All those in favor, say aye.
00:39:38.703 --> 00:39:39.536
Aye.
Aye.
00:39:39.536 --> 00:39:41.100
Motion passed, this item is approved.
00:39:41.100 --> 00:39:42.350
Thank y'all for the time.
00:39:43.360 --> 00:39:45.313
Alright, item 303.
00:39:52.915 --> 00:39:53.748
Good morning, gentlemen.
00:39:53.748 --> 00:39:54.581
How are you?
00:39:54.581 --> 00:39:56.400
Good morning, Chairman, Commissioners.
00:39:57.620 --> 00:39:58.870
For the record, I'm Clay Woodul
00:39:58.870 --> 00:40:00.683
with the Oil and Gas Division.
00:40:01.590 --> 00:40:04.620
Item 303 is the oil field cleanup program
00:40:04.620 --> 00:40:08.610
status report for the second quarter of fiscal year 2018.
00:40:08.610 --> 00:40:10.780
I will present the well plugging report,
00:40:10.780 --> 00:40:13.630
and Peter Pope will present the site remediation portion.
00:40:14.820 --> 00:40:17.280
During the second quarter, plugging operations
00:40:17.280 --> 00:40:19.300
were completed, and files were closed
00:40:19.300 --> 00:40:21.690
on 350 wells, at a cost
00:40:21.690 --> 00:40:24.120
of $4,564,560.
00:40:27.640 --> 00:40:30.760
This includes only those wells that were plugged,
00:40:30.760 --> 00:40:32.680
invoiced by the plugging contractor,
00:40:32.680 --> 00:40:35.370
and approved for payment by field operations.
00:40:35.370 --> 00:40:38.920
During this same period, 524 new wells were approved
00:40:38.920 --> 00:40:40.940
for plugging, with State funds.
00:40:40.940 --> 00:40:43.080
The fiscal year to-date totals through the end
00:40:43.080 --> 00:40:47.020
of the second quarter, includes 571 wells completed
00:40:47.020 --> 00:40:51.250
with files closed, and 934 new wells
00:40:51.250 --> 00:40:53.500
approved for plugging with State funds.
00:40:53.500 --> 00:40:56.420
As of last Friday, March 16th,
00:40:56.420 --> 00:40:59.750
722 wells have been physically plugged
00:40:59.750 --> 00:41:03.410
at an estimated cost of $11.1 million.
00:41:03.410 --> 00:41:05.970
The well plugging target for fiscal year 2018
00:41:05.970 --> 00:41:08.030
is 1,500 wells.
00:41:08.030 --> 00:41:10.530
I'll now turn over the presentation to Peter Pope.
00:41:13.660 --> 00:41:15.500
Good morning, Chairman, Commissioners.
00:41:15.500 --> 00:41:16.840
For the record, I'm Peter Pope,
00:41:16.840 --> 00:41:18.840
Manager of the Site Remediation section.
00:41:19.690 --> 00:41:21.960
During the second quarter of fiscal year 2018,
00:41:21.960 --> 00:41:26.270
Site Remediation completed and closed 40 activities
00:41:26.270 --> 00:41:29.697
at a cost of $410,018.89.
00:41:31.408 --> 00:41:35.780
We also authorized an additional 60 activities.
00:41:35.780 --> 00:41:37.800
And at the end of the quarter, we had 93
00:41:37.800 --> 00:41:40.433
authorized activities that remain to be completed.
00:41:41.790 --> 00:41:45.720
Year-to-date, we've completed 56 activities,
00:41:45.720 --> 00:41:50.163
at a cost of $645,359.
00:41:51.390 --> 00:41:54.490
And as of March 16th, last Friday,
00:41:54.490 --> 00:41:56.740
we had completed another 13 activities.
00:41:56.740 --> 00:41:59.550
So year-to-date, we have, well as of Friday,
00:41:59.550 --> 00:42:03.410
we have a total of 69 activities at an approximate cost
00:42:03.410 --> 00:42:05.507
of about $650,000.
00:42:06.860 --> 00:42:10.350
And on top of that, we have an additional 29 activities
00:42:10.350 --> 00:42:11.800
that are completed in the field,
00:42:11.800 --> 00:42:14.700
we're just waiting to make final payments on the invoices.
00:42:16.030 --> 00:42:17.487
May I answer any questions?
00:42:18.521 --> 00:42:20.220
I have a question.
00:42:20.220 --> 00:42:21.940
So clearly, we got pretty aggressive.
00:42:21.940 --> 00:42:22.990
Can we hit our numbers?
00:42:22.990 --> 00:42:25.970
I know we start slow and then we finish heavy,
00:42:25.970 --> 00:42:27.270
finish fast at the end.
00:42:27.270 --> 00:42:28.170
Right?
00:42:28.170 --> 00:42:31.300
The summer seems to be our, the warmer weather,
00:42:31.300 --> 00:42:33.643
the longer days, historically,
00:42:34.808 --> 00:42:38.270
we really do a great job in our districts.
00:42:38.270 --> 00:42:40.150
As you can tell by the numbers,
00:42:40.150 --> 00:42:41.140
our districts are out there.
00:42:41.140 --> 00:42:43.310
They're doing a great job for us.
00:42:43.310 --> 00:42:47.890
We've got 25 rigs currently running across the State,
00:42:47.890 --> 00:42:50.410
and as you, the earlier item,
00:42:50.410 --> 00:42:52.860
we're looking to put some more out there.
00:42:52.860 --> 00:42:55.430
So we're going to do everything we can
00:42:55.430 --> 00:42:57.332
to meet that target number.
00:42:57.332 --> 00:42:58.165
Great.
00:42:58.165 --> 00:42:59.000
Well both of y'all, thank you very much.
00:42:59.000 --> 00:43:00.490
Any questions?
00:43:00.490 --> 00:43:02.140
Alright, thank you.
Thank you.
00:43:03.110 --> 00:43:03.943
Alright.
00:43:03.943 --> 00:43:06.940
Item 304 is our public participation item,
00:43:06.940 --> 00:43:09.400
and nobody's turned in cards indicating
00:43:09.400 --> 00:43:11.338
they wish to speak.
00:43:11.338 --> 00:43:15.110
On posted items, under items 305 and 306
00:43:15.110 --> 00:43:16.990
are our executive session,
00:43:16.990 --> 00:43:19.530
which we are going into executive session.
00:43:19.530 --> 00:43:23.940
So having duly convened in an open notice meeting,
00:43:23.940 --> 00:43:27.200
the Railroad Commission now, at 10:15
00:43:27.200 --> 00:43:29.580
on Tuesday, March 20th, 2018,
00:43:29.580 --> 00:43:32.320
will hold a closed meeting in the Willa May Conference Room
00:43:32.320 --> 00:43:34.390
on the 12th Floor of the William B. Travis
00:43:34.390 --> 00:43:35.580
State Office Building,
00:43:35.580 --> 00:43:39.250
pursuant to the Texas Government Code chapter 551.
00:43:39.250 --> 00:43:41.390
The Commission will discuss personnel matters
00:43:41.390 --> 00:43:43.140
and possible candidate interviews
00:43:43.140 --> 00:43:46.010
related to the position of Executive Director,
00:43:46.010 --> 00:43:51.010
pursuant to section 551.074 of the Code.
00:43:51.530 --> 00:43:53.840
The Commission will reconvene the open meeting
00:43:53.840 --> 00:43:56.230
in the Willa May Conference Room,
00:43:56.230 --> 00:43:58.050
on the 12th floor of the William B. Travis
00:43:58.050 --> 00:43:59.150
State Office Building.
00:44:00.170 --> 00:44:02.453
Thank you, we are recessed.