WEBVTT 00:00:10.630 --> 00:00:11.463 Good morning. 00:00:12.640 --> 00:00:14.510 This meeting of the Railroad Commission of Texas 00:00:14.510 --> 00:00:16.590 will come to order to consider matters 00:00:16.590 --> 00:00:19.150 which have been duly posted with the Secretary of State, 00:00:19.150 --> 00:00:23.360 for March 20th, 2018, the Spring Solstice. 00:00:23.360 --> 00:00:25.730 The Commission will consider the items on the agenda 00:00:25.730 --> 00:00:27.590 as posted on the agenda. 00:00:27.590 --> 00:00:29.800 Under our public participation policy, 00:00:29.800 --> 00:00:32.910 anyone desiring to offer public testimony on any items 00:00:32.910 --> 00:00:35.490 that are not noticed on today's agenda 00:00:35.490 --> 00:00:37.410 will need to fill out a testimony form 00:00:37.410 --> 00:00:38.530 found in the back of the room, 00:00:38.530 --> 00:00:41.420 and submit it to Commission Secretary Kathy Way. 00:00:41.420 --> 00:00:43.633 Reminder, please turn off your cellphones. 00:00:44.730 --> 00:00:45.563 Item number one. 00:00:47.610 --> 00:00:48.443 Good morning. 00:00:49.550 --> 00:00:51.390 Good morning, Commissioners. 00:00:51.390 --> 00:00:54.040 For the record, my name is Amy Bruce, and I am representing 00:00:54.040 --> 00:00:55.380 the Market Oversight section 00:00:55.380 --> 00:00:57.990 of the Oversight and Safety Division. 00:00:57.990 --> 00:00:59.990 Before you today is Gas Utilities Docket 00:00:59.990 --> 00:01:03.550 Number 10663, the application 00:01:03.550 --> 00:01:07.670 of Texas Gas Service Company, for the test year 2016, 00:01:07.670 --> 00:01:10.340 annual interim rate adjustment for the unincorporated 00:01:10.340 --> 00:01:12.683 portion of the North Texas Service Area. 00:01:14.110 --> 00:01:16.310 This docket is the sixth interim rate adjustment 00:01:16.310 --> 00:01:19.300 the company has filed for the North Texas Service Area 00:01:19.300 --> 00:01:21.260 environ, since the final order was issued 00:01:21.260 --> 00:01:25.323 in Gas Utilities Docket number 10094. 00:01:26.700 --> 00:01:29.810 This adjustment represents an incremental increase 00:01:29.810 --> 00:01:33.520 of $610,854 00:01:33.520 --> 00:01:36.930 of which $56,899 00:01:36.930 --> 00:01:39.490 may be collected from environ's customers. 00:01:39.490 --> 00:01:41.880 I recommend approval of the interim rate adjustment 00:01:41.880 --> 00:01:45.170 as revised, and I'm available to answer any questions. 00:01:45.170 --> 00:01:46.003 Thank you, Amy. 00:01:46.003 --> 00:01:47.495 Are there any questions? 00:01:47.495 --> 00:01:48.590 No. I move we approve 00:01:48.590 --> 00:01:49.860 the examiner's recommendation. 00:01:49.860 --> 00:01:50.990 Is there a second? 00:01:50.990 --> 00:01:52.550 Second. Second, Commissioner Sitton. 00:01:52.550 --> 00:01:53.957 All in favor, say aye. 00:01:53.957 --> 00:01:54.790 Aye. Aye. 00:01:54.790 --> 00:01:55.623 Motion passed, this item is approved. 00:01:55.623 --> 00:01:57.270 Thanks. Thank you. 00:01:57.270 --> 00:01:58.143 Item number two. 00:02:03.450 --> 00:02:04.540 Good morning, Commissioners. 00:02:04.540 --> 00:02:06.840 For the record, my name is Sarah Montoya-Foglesong. 00:02:06.840 --> 00:02:08.920 I'm also representing the Market Oversight Section 00:02:08.920 --> 00:02:11.380 of the Oversight and Safety Division. 00:02:11.380 --> 00:02:13.230 Before you today is Gas Utilities Docket 00:02:13.230 --> 00:02:17.200 Number 10666, the application of Texas Gas Service 00:02:17.200 --> 00:02:20.700 for the test year 2016, annual interim rate adjustment, 00:02:20.700 --> 00:02:22.000 for the unincorporated portion 00:02:22.000 --> 00:02:23.550 of the Gulf Coast Service Area. 00:02:24.700 --> 00:02:26.270 This is the first interim rate adjustment 00:02:26.270 --> 00:02:28.600 the company has filed for the environs at the Gulf Coast 00:02:28.600 --> 00:02:31.210 Service Area, since the final order was issued 00:02:31.210 --> 00:02:34.600 in Gas Utilities Docket number 10488. 00:02:34.600 --> 00:02:36.303 This adjustment represents an incremental increase 00:02:36.303 --> 00:02:40.220 of $464,756, 00:02:40.220 --> 00:02:42.610 of which $11,555 00:02:42.610 --> 00:02:45.580 is allocated to the environ's customers. 00:02:45.580 --> 00:02:47.830 I recommend approval of the interim rate adjustment 00:02:47.830 --> 00:02:50.020 as revised, and I'm happy to answer any questions 00:02:50.020 --> 00:02:50.853 you may have. 00:02:50.853 --> 00:02:51.686 Thank you, Sarah. 00:02:51.686 --> 00:02:53.160 Are there any questions? 00:02:53.160 --> 00:02:55.700 I move we approve the examiner's recommendation. 00:02:55.700 --> 00:02:57.020 Is there a second? Second. 00:02:57.020 --> 00:02:58.430 Second, Commissioner Christian. 00:02:58.430 --> 00:02:59.970 All in favor, say aye. 00:02:59.970 --> 00:03:00.803 Aye. Aye. 00:03:00.803 --> 00:03:01.636 Motion passed. 00:03:01.636 --> 00:03:02.469 Thank you. This item is approved. 00:03:02.469 --> 00:03:03.302 Thank you. 00:03:03.302 --> 00:03:04.163 Item number three. 00:03:05.510 --> 00:03:07.000 Good morning, Chairman and Commissioners. 00:03:07.000 --> 00:03:09.050 For the record, my name is Christina Poole, 00:03:09.050 --> 00:03:11.550 and I'm also with the Oversight and Safety Division. 00:03:11.550 --> 00:03:13.900 The item before you today is Gas Utilities Docket 00:03:13.900 --> 00:03:17.950 Number 10668, the application of West Texas Gas Incorporated 00:03:17.950 --> 00:03:21.490 for the test year 2016, annual interim rate adjustment, 00:03:21.490 --> 00:03:24.230 for its unincorporated Texas Service Area. 00:03:24.230 --> 00:03:26.340 This docket is the fourth interim rate adjustment 00:03:26.340 --> 00:03:28.310 since the company's last rate case, 00:03:28.310 --> 00:03:30.293 GUD number 10235. 00:03:31.290 --> 00:03:33.550 The adjustment represents an incremental increase 00:03:33.550 --> 00:03:37.970 of $44,547, affecting two customer classes 00:03:37.970 --> 00:03:40.910 at the company's unincorporated Texas Service Area. 00:03:40.910 --> 00:03:42.220 Staff recommends approval 00:03:42.220 --> 00:03:44.700 of the interim rate adjustment, as revised. 00:03:44.700 --> 00:03:47.150 I'm available to answer questions. 00:03:47.150 --> 00:03:47.983 Thank you, Christina. 00:03:47.983 --> 00:03:49.690 Are there any questions? Nope. 00:03:49.690 --> 00:03:51.800 I move we approve the examiner's recommendation. 00:03:51.800 --> 00:03:52.896 Is there a second? 00:03:52.896 --> 00:03:54.520 Second. Second, Commissioner Sitton. 00:03:54.520 --> 00:03:55.720 All in favor, say aye. 00:03:55.720 --> 00:03:56.770 Aye. Aye. 00:03:56.770 --> 00:03:57.823 Motion is approved. 00:04:01.051 --> 00:04:04.463 Good morning, Dana. Good morning. 00:04:04.463 --> 00:04:06.220 Good morning, Chairman and Commissioners. 00:04:06.220 --> 00:04:07.770 For the record, my name is Dana Lewis, 00:04:07.770 --> 00:04:10.600 Administrative Law Judge with the Hearings Division. 00:04:10.600 --> 00:04:12.560 Item number four is a statement of intent, 00:04:12.560 --> 00:04:15.360 filed by Texas Gas Service Company, 00:04:15.360 --> 00:04:16.880 to increase rates in environs 00:04:16.880 --> 00:04:18.610 of the Rio Grande Service Area. 00:04:18.610 --> 00:04:21.180 Staff intervened, and the parties engaged 00:04:21.180 --> 00:04:23.230 in discovery and negotiations. 00:04:23.230 --> 00:04:25.150 A unanimous settlement agreement was reached, 00:04:25.150 --> 00:04:27.250 that resolved all issues. 00:04:27.250 --> 00:04:29.300 The settlement includes a revenue increase 00:04:29.300 --> 00:04:34.300 of $500,882, which consists 00:04:34.340 --> 00:04:39.340 of $253,516 00:04:39.490 --> 00:04:42.580 increase in the overall base rate, and a pipeline integrity 00:04:42.580 --> 00:04:44.860 testing rider, recovering an average 00:04:44.860 --> 00:04:49.451 of $247,367 annually. 00:04:49.451 --> 00:04:52.460 TGS' revenue calculations do incorporate 00:04:52.460 --> 00:04:54.680 the reduction to the corporate tax rate 00:04:54.680 --> 00:04:59.070 passed in the Tax Cuts and Jobs Act of 2017. 00:04:59.070 --> 00:05:01.060 The party has timely filed exceptions. 00:05:01.060 --> 00:05:02.780 No replies were filed. 00:05:02.780 --> 00:05:05.760 After review and consideration of the party's exceptions, 00:05:05.760 --> 00:05:08.800 the examiners issued non-substantive corrections 00:05:08.800 --> 00:05:11.420 to certain pages of the proposal for decision, 00:05:11.420 --> 00:05:14.450 and updated the final order with language conforming 00:05:14.450 --> 00:05:16.250 to the Commission's accounting order 00:05:16.250 --> 00:05:19.170 that was issued at the last conference. 00:05:19.170 --> 00:05:20.870 The examiners recommend the Commission approve 00:05:20.870 --> 00:05:22.590 the terms of the settlement agreement 00:05:22.590 --> 00:05:24.350 as reflected in the final order. 00:05:24.350 --> 00:05:26.280 I'm available for questions. 00:05:26.280 --> 00:05:27.113 Thank you. 00:05:27.113 --> 00:05:28.183 Are there any questions? 00:05:29.030 --> 00:05:30.980 I move we approve the examiner's recommendation. 00:05:30.980 --> 00:05:32.380 Is there a second? Second. 00:05:32.380 --> 00:05:33.740 Second, Commissioner Christian. 00:05:33.740 --> 00:05:35.145 All in favor, say aye. 00:05:35.145 --> 00:05:35.978 Aye. Aye. 00:05:35.978 --> 00:05:37.290 Motion passed, this item is approved. 00:05:37.290 --> 00:05:38.123 Thank you. 00:05:41.450 --> 00:05:43.093 Last time up, Marcy. 00:05:44.060 --> 00:05:45.530 It is. 00:05:45.530 --> 00:05:48.410 Good morning, Chairman and Commissioners. 00:05:48.410 --> 00:05:51.620 Marcy Spraggins, an ALJ with the Hearings Division. 00:05:51.620 --> 00:05:54.930 Luminant Mining Company LLC requested releases 00:05:54.930 --> 00:05:57.920 of reclamation obligations on an aggregate 00:05:57.920 --> 00:06:02.080 1,313.1 acres within permit number 46C, 00:06:02.080 --> 00:06:03.820 the Oak Hill Mine. 00:06:03.820 --> 00:06:06.520 Requests included Phase I and Phase II, 00:06:06.520 --> 00:06:09.740 and Phase II and III release for various acreages 00:06:09.740 --> 00:06:12.610 that are within 13 parcels of land. 00:06:12.610 --> 00:06:16.350 After notice no comments or requests for hearing were filed. 00:06:16.350 --> 00:06:18.320 Parties are Luminant and the staff. 00:06:18.320 --> 00:06:19.880 The acreage recommended for release 00:06:19.880 --> 00:06:23.190 is located in the D1, D2, and D3 areas, 00:06:23.190 --> 00:06:25.793 in the western-central portion of the permit area. 00:06:27.040 --> 00:06:29.620 Post-mine land uses approved for the acreage 00:06:29.620 --> 00:06:32.550 include forestry, fish and wildlife habitat, 00:06:32.550 --> 00:06:35.500 developed water resources, industrial-commercial, 00:06:35.500 --> 00:06:36.990 and pasture land. 00:06:36.990 --> 00:06:39.450 After field inspection, staff reviewed the areas 00:06:39.450 --> 00:06:41.500 requested for Phase I release, 00:06:41.500 --> 00:06:45.010 are recommended for approval except for parcel three, 00:06:45.010 --> 00:06:47.160 containing a structure that has been modified 00:06:47.160 --> 00:06:50.270 without approval, and has now been withdrawn. 00:06:50.270 --> 00:06:52.360 Parcels one, two, and 10, are recommended 00:06:52.360 --> 00:06:54.333 for Phase I release for backfilling, 00:06:54.333 --> 00:06:56.930 regrading, and drainage control. 00:06:56.930 --> 00:07:01.130 Staff inspection confirms Phase II's successful revegetation 00:07:01.130 --> 00:07:04.100 as required by the permit, for areas of pasture land, 00:07:04.100 --> 00:07:06.563 fish and wildlife habitat, and forestry. 00:07:07.740 --> 00:07:11.550 Concerns regarding parcel nine that drains to a pond, 00:07:11.550 --> 00:07:14.500 that shows rising concentrations of manganese, 00:07:14.500 --> 00:07:16.630 and parcel 11 that drained to a pond 00:07:16.630 --> 00:07:19.130 with rising TDS concentrations, 00:07:19.130 --> 00:07:22.030 have resulted in these being withdrawn 00:07:22.030 --> 00:07:25.533 from Phase II release, and III release. 00:07:27.090 --> 00:07:31.230 For Phase II, records of successful 00:07:31.230 --> 00:07:35.733 revegetation were filed for the areas mentioned before. 00:07:36.930 --> 00:07:39.870 Drainage from the areas requested for Phase II release, 00:07:39.870 --> 00:07:43.200 is routed to approved sediment control structures, 00:07:43.200 --> 00:07:45.810 with records of compliant discharges, 00:07:45.810 --> 00:07:49.510 except for a few exceedances for temporary sediment ponds 00:07:49.510 --> 00:07:52.640 that occurred prior to October, 2003. 00:07:52.640 --> 00:07:54.930 Stream monitoring data for disturbed downstream 00:07:54.930 --> 00:07:59.400 monitoring stations, indicates that average annual pH values 00:07:59.400 --> 00:08:01.630 and average as well as flow-weighted average 00:08:01.630 --> 00:08:05.270 TDS concentrations, were within the stream segment standards 00:08:05.270 --> 00:08:09.260 for segment 0505 of the Sabine River. 00:08:09.260 --> 00:08:12.230 Parcels four through eight have also been withdrawn 00:08:12.230 --> 00:08:14.360 from Phase III release, based on issues 00:08:14.360 --> 00:08:18.490 related to low pH at a USGS monitoring station, 00:08:18.490 --> 00:08:21.640 and because of inconsistent flow data. 00:08:21.640 --> 00:08:23.060 Parcels withdrawn are recommended 00:08:23.060 --> 00:08:25.390 for denial without prejudice, so that Luminant 00:08:25.390 --> 00:08:27.880 may refile for release. 00:08:27.880 --> 00:08:30.260 Based on the evidence received, and the recommendations 00:08:30.260 --> 00:08:32.020 by staff and Luminant's withdrawal 00:08:32.020 --> 00:08:33.940 of certain of the requests, I recommend 00:08:33.940 --> 00:08:35.950 approval of the proposed order. 00:08:35.950 --> 00:08:39.120 Staff calculated an eligible bond reduction amount 00:08:39.120 --> 00:08:41.490 for the parcels recommended for approval 00:08:41.490 --> 00:08:44.690 of Phase I release, and/or Phase II release, 00:08:44.690 --> 00:08:47.743 of $4,595,242.85. 00:08:50.470 --> 00:08:53.040 No changes to the bond instrument are requested 00:08:53.040 --> 00:08:54.040 at this time. 00:08:54.040 --> 00:08:55.950 And I'll be glad to answer your questions. 00:08:55.950 --> 00:08:56.783 Thank you, Marcy. 00:08:56.783 --> 00:08:58.050 Are there any questions? 00:08:58.050 --> 00:09:00.217 Nope. I move we approve 00:09:00.217 --> 00:09:01.370 the examiner's recommendation. 00:09:01.370 --> 00:09:02.581 Is there a second? 00:09:02.581 --> 00:09:04.090 Second. Second, Commissioner Sitton. 00:09:04.090 --> 00:09:05.270 All in favor, say aye. 00:09:05.270 --> 00:09:06.390 Aye. Aye. 00:09:06.390 --> 00:09:08.620 Motion passed, this item is approved. 00:09:08.620 --> 00:09:09.540 Number six. Commissioners, with your 00:09:09.540 --> 00:09:12.560 permission, I'll wait until the end of item eight, 00:09:12.560 --> 00:09:14.460 to bring the orders up. Yes, ma'am. 00:09:18.930 --> 00:09:23.930 Items six and seven are for Texas Municipal Power Agency. 00:09:24.240 --> 00:09:28.710 TMPA submitted replacement bonds for its two permits, 00:09:28.710 --> 00:09:30.910 permit number 26D and 38D, 00:09:30.910 --> 00:09:33.793 for the Gibbons Creek Lignite Mines, in Grimes County. 00:09:35.300 --> 00:09:37.330 Both mines are in reclamation. 00:09:37.330 --> 00:09:39.660 Permit number 26D is currently bonded 00:09:39.660 --> 00:09:42.460 with a collateral bond and letter of credit, 00:09:42.460 --> 00:09:46.310 or LOC, issued by Wells Fargo Bank National Association, 00:09:46.310 --> 00:09:48.383 in the amount of $11.1 million. 00:09:49.260 --> 00:09:53.010 TMPA requests acceptance of a replacement collateral bond 00:09:53.010 --> 00:09:55.810 with LOC, also issued by Wells Fargo, 00:09:55.810 --> 00:09:57.260 in the amount of $11 million. 00:09:58.560 --> 00:10:00.660 The calculated reclamation cost estimate 00:10:00.660 --> 00:10:05.390 is $10,584,672. 00:10:05.390 --> 00:10:07.300 The replacement instrument will provide 00:10:07.300 --> 00:10:09.780 for a reduced amount that will still remain 00:10:09.780 --> 00:10:12.380 sufficient for reclamation of the permit area, 00:10:12.380 --> 00:10:13.993 of permit number 26D. 00:10:15.680 --> 00:10:18.440 Permit number 38D is currently bonded 00:10:18.440 --> 00:10:20.090 with a self bond, in the amount 00:10:20.090 --> 00:10:23.490 of $7.45 million, and a collateral bond 00:10:23.490 --> 00:10:25.920 with letter of credit by Wells Fargo, 00:10:25.920 --> 00:10:29.040 in the amount of $10.85 million. 00:10:29.040 --> 00:10:32.450 TMPA requests acceptance of a replacement self bond 00:10:32.450 --> 00:10:35.040 in the amount of $8.9 million, 00:10:35.040 --> 00:10:37.880 and a replacement collateral bond with LOC, 00:10:37.880 --> 00:10:41.710 issued by Wells Fargo, in the amount of $9.6 million. 00:10:41.710 --> 00:10:43.900 Together, the two proffered bonds will provide 00:10:43.900 --> 00:10:46.350 for increased total bonding, that will be sufficient 00:10:46.350 --> 00:10:49.550 to cover the costs of reclamation of permit 38D, 00:10:49.550 --> 00:10:51.830 which are $17,934,635. 00:10:56.340 --> 00:10:59.790 The bonds and LOCs are in proper form and format, 00:10:59.790 --> 00:11:02.080 and amount, and the letters of credit 00:11:02.080 --> 00:11:04.440 are irrevocable during their terms. 00:11:04.440 --> 00:11:06.700 For the self bond, TMPA has demonstrated 00:11:06.700 --> 00:11:09.930 that it has an A rating for its most recent bond issuance, 00:11:09.930 --> 00:11:12.430 and that it meets the requirement that the total 00:11:12.430 --> 00:11:15.590 self bond amount does not exceed 25% 00:11:15.590 --> 00:11:17.573 of TMPA's tangible net worth. 00:11:19.010 --> 00:11:21.440 Two ordering paragraphs are included in the proposed orders 00:11:21.440 --> 00:11:24.110 that require that replacement bonds be filed 00:11:24.110 --> 00:11:26.480 by January 9th, 2019, 00:11:26.480 --> 00:11:29.500 approximately 90 days prior to the expiration date 00:11:29.500 --> 00:11:33.140 of the collateral, which is April 9th, 2019, 00:11:33.140 --> 00:11:35.900 to ensure that the bonds are replaced in a timely manner, 00:11:35.900 --> 00:11:38.780 so that forfeiture proceedings would not be required. 00:11:38.780 --> 00:11:41.030 In addition, replacement bonds must be docketed 00:11:41.030 --> 00:11:43.650 with the Hearings Division at least 30 days prior 00:11:43.650 --> 00:11:46.770 to the expiration date, to ensure that such proceedings, 00:11:46.770 --> 00:11:50.010 if necessary, are begun in accordance with regulations. 00:11:50.010 --> 00:11:53.100 I recommend that the Commission accept the replacement bonds 00:11:53.100 --> 00:11:55.610 for both of these permits, and the LOCs. 00:11:55.610 --> 00:11:57.600 I'm available to answer your questions. 00:11:57.600 --> 00:11:58.433 Thank you. 00:11:58.433 --> 00:11:59.394 Are there any questions? 00:11:59.394 --> 00:12:00.950 Nope. I'll make a motion 00:12:00.950 --> 00:12:05.010 on item number six, which is permit number 26D, first. 00:12:05.010 --> 00:12:07.170 I move we approve the examiner's recommendation. 00:12:07.170 --> 00:12:08.550 Is there a second? Second. 00:12:08.550 --> 00:12:10.010 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. 00:12:11.830 --> 00:12:13.900 Motion passes, that item is approved. 00:12:13.900 --> 00:12:18.320 And on item number seven, which is permit number 38D, 00:12:18.320 --> 00:12:20.450 I move we approve the examiner's recommendation. 00:12:20.450 --> 00:12:21.630 Is there a second? 00:12:21.630 --> 00:12:23.190 Second. Second, Commissioner Sitton. 00:12:23.190 --> 00:12:24.730 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. 00:12:29.910 --> 00:12:32.510 Commissioners, item eight is an application 00:12:32.510 --> 00:12:34.750 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 00:12:43.650 --> 00:12:45.530 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.