Callie: Okay, if everybody's ready. Good morning. This is Callie
Ferrar, Commission secretary. I will be serving as
the meeting moderator for today's meeting. Just a few
reminders. When it's your time to speak, you'll be
transferred over to video and unmuted. You will
also need to remove yourself from mute for the audio
to work. For any of our guest speakers, you will be
audio only today. You will be unmuted when and if
a question is needed to be answered by a Commissioner.
You will also need to remove yourself from mute
for audio to work. The Commission does reserve the
right to remove any audio or video sharing capabilities
from any person if needed. Commissioner Christian, we
are ready to begin when you are.
Chairman Christian: Thank you. This is Chairman
Christian. This meeting of the Railroad Commission of
Texas will come to order to consider matters which
have been duly posted with Secretary of State for May
20, 2020. Under our public participation policy, anyone
desiring to offer public testimony on any items that
are not noticed on today's agenda was required
to register in advance. We had one person, Cyrus Reed,
with the Sierra Club, register in advance for this meeting.
The Commission will consider the items on the agenda
as posted on the agenda. Callie please call up the presenter
for Agenda Item Number one.
Callie: Yes, thank you, Christina
Pool will be presenting agenda item number one. Christina,
we are ready when you are.
Christina Pool: Morning Chairman and Commissioners
For the record, my name is Cristina Pool, and I'm with
the Oversight and Safety Division. Before you today is
Gas Utilities Docket number 10942, the application
of Atmos Pipeline Texas, for the Test Year 2019
Annual Interim Rate adjustment. This is the fourth
interim rate adjustment the Atmos Pipeline Texas has
filed since the company's last rate case, GUD number
10580. This adjustment represents an incremental revenue
increase of $49,250,788, affecting all the customers
located on the Atmos Pipeline system. Staff recommends
approval of the interim rate adjustment as proposed.
I'm available to answer questions.
Chairman Christian: Any questions? I move
we approve the Examiners recommendation. Is there a
second?
Commissioner Sitton: Second.
Chairman Christian: Second by Commissioner Sitton. All in favor
say aye. Any opposed? Motion passes, that item
is approved. Callie, please call up the presenter
for Agenda Item 2.
Callie: Yes, thank you, Frank Thomasek will
be presenting agenda Item number two. Frank, we are
ready when you are.
Frank Tomasek: All right. Very well. Chairman
Commissioners. Good morning. I'm Frank Thomasek
with the Oversight and Safety division. This morning's
next agenda item is Gas Utilities Docket number 10944,
application made by Atmos Energy Corporation
for a Test Year 2019 Annual Interim Rate Adjustment for
the unincorporated areas in its MidTex division service
area. This is the second interim rate adjustment since
the company's last rate case in GUD number 10742
which set the basin or rate adjustment components.
Under these factors, the company's identified an annual
test year incremental rate requirement of approximately
$113,027,985 of which $4,439,923 will be recovered
from environs customers under the proposed rate adjustment.
Atmos has also stated its intention by letter to defer
the effective rate of the proposed IRA changing costs
September 1st in recognizing the ongoing economic effects
of the COVID 19 pandemic. Staff's review of the filing
has found it to be compliant with the provisions of
the GRIP statutes since staff is recommending approval.
I can address any questions at this time.
Chairman Christian: Any questions
members?
I move we approve the Examiner's recommendation. Is there
a second?
Commissioner Craddick: Second.
Chairman Christian: Second by Commissioner Craddick. All
in favor, say aye. Aye. Any opposed? Motion passes.
That item was approved. Callie, please call the presenter for
agenda item three.
Callie: Agenda Item number three Veronica Roberto will be
presenting. Veronica, we are ready when you are.
Veronica Roberto: Good morning,
Chairman, Commissioners. For the record, Veronica Roberto,
Administrative Law Judge of that Hearings division.
I will be presenting items three through five, of which
items three and four are both replacement bond applications
by Texas Municipal Power Agency. Item number three
is the application by TMPA for acceptance of replacement
collateral bond and letter of credit for Permit number
2060 within Givens Creek Lignite Mine. Located in Grimes
County. Permit number 2060 is in reclamation and is
currently bonded with a collateral bond and letter
of credit issued by Wells Fargo in the amount of $11.4
million. The existing bond expires on June 9, 2020.
TMPA requests acceptance of a replacement collateral
bond with a letter of credit, also issued by Wells Fargo
in the amount of the $11.6 million. This is an increase
from the existing bond. The profered bond has an expiration
date of June 8, 2021. Staff's most recent reclamation
costs proposed for adoption is in the amount of $10,942,642.
The amount of the replacement bond for the permit will
exceed the approved reclamation costs and is sufficient
in amount. All other issues have been sufficiently
addressed by TMPA, where acceptance of the bond, staff
and TMPA are the only parties to the proceedings. No
exceptions were filed. It is recommended the Commission
accept the proper collateral bond and letter of credit
to replace existing bond. I'm available for questions.
Are there any questions? I move we approve the examiners recommendation.
Chairman Christian: Is there a second?
Commissioner Sitton: Second.
Chairman Christian: Second by Commissioner
Sitton. All in favor, say aye. Aye. Any opposed?
Motion passes, that item is approved. Please
call up agenda 4.
Callie: Thank you, Veronica Roberto will
be continuing with agenda item number four. Veronica,
we are ready when you are.
Veronica Roberto: Item number four it is.
It is an application by TMPA for acceptance of a replacement
collateral bond and letter of credit for permit number
38D, within Givens Creek Lignite Mined Five. Located
in Grimes County. Permit number 38D is in reclamation
and is currently bonded by both a self bond in the
amount of $3.3 million and by a collateral bond with a
letter of credit issued by Wells Fargo in the amount
of $11.9 million. The existing bond expires on June
9, 2020. TMPA request acceptance of a replacement collateral
bond with a letter of credit issued by Wells Fargo
in the amount of $6.5 million. This is a decrease from
the existing bond to correspond to staff's
most recent reclamation cost estimates. The proferred
bond expiration date is June 8, 2021. Staff's nost
recent reclamation cost estimate, which was approved
administratively February 25, 2020, is in the amount
of $6,134,953. The amount of the replacement
bond for the permit will exceed the approved reclamation
costs and is sufficient in amount. All other issues
have been sufficiently addressed by TMPA for acceptance
of the bond. Staff and TMPA are the only parties
to the proceeding. No exceptions were filed. It is
recommended that the Commission accept the proffered
collateral bond and letter of credit to replace both existing
self bond and collateral bond. I'm available for questions
Chairman Christian: Are they need questions? I move we approve the examiners
recommendation. Is there a second?
Commissioner Craddick: Second.
Chairman Christian: Second by Commissioner Craddick.
All in favor, say Aye.Any opposed? Motion passes.
That item is approved. Please call up agenda item
five.
Callie: Yes. Thank you. Veronica Roberto will be continuing
with agenda item number five. Veronica, you may continue.
Veronica Roberto: Item number Five is an application by the Sabine
Mining Company requesting a multi phase release of reclamation
obligations on an aggregate 1422.5 acres. Permit number
33I within South Hallsville Number one mine, located
in Harrison County. There are four approved post mine
land uses. Grazing land, pasture land, developed water
resources and forestry. Evidence in the record supports
that Sabine has completed all reclamation activities
required for the various phases of released sought
with the exception of two acres that do not meet the
requirements for release. After notice, no comments
or request for a hearing were received. Staff and Sabine
are the only parties to the proceeding. No exceptions
were filed. No current changes to the current
bond are requested in this docket. It it is recommended
that the requests for the various phases of release
be approved for the aggregate 1420.5 acres and for
two acres, be denied release without prejudice. And to
then be eligible to reduce the bond monies attributable
to the areas granted release on the docket. I'm available
for questions.
Any questions? I move we approve the
examiners recommendation. Is there a second?
Commissioner Sitton: Second.
Chairman Christian: Second by
by Commissioner Sitton. All in favor, say aye. Aye.
Any opposed? Motion passes. That item was approved.
Callie, please call up agenda Item number six.
Callie: Yes
Thank you. Robert Music will be presenting agenda
Item number six. Robert. Good morning. We're ready
when you are.
Robert Music: Thank you. Morning, Chairman and Commissioners
My name is Robert Music, technical examiner in the Hearings
division. Item number six is the application of Round
Rock Midstream LLC for a commercial permit to dispose
of oil and gas waste by injection into a reservoir
productive of oil or gas for the Mudhole Lease well Number one
Carthage Travis Peak Field, Panola County, Texas. Round
Rock seeks authority to inject 17,500 barrels per day
into the Travis peak formation at a depth of 7320 to
8400 feet. The Travis Peak formation is considered
a productive, underdeveloped reservoir in the area
The application is protested by Chevron USA Incorporated.
Chevron operates in several fields near the proposed
injection well. Chevron has plans to recomplete oil
and gas wells from deeper reservoirs up into the Travis
Peak to recover known proven gas reserves. Chevron
contends that their mineral interest in the Travis
Peak formacion would be harmed by the injection of
disposal fluids. Chevron also contends that there is
ample disposal capacity available in the area. Further
evidence in the record indicates that the injected
fluids would not be contained within the proposed
injection intervals. The examiners find that Round Rock
failed two of the four elements of the Texas Water
Code. Specifically, Round Rock failed to show that
the injected fluids would not harm or injure a reservoir
productive of oil or gas, failed to show that the injected
fluids would be confined to the proposed injection
interval, and that the proposed injection well was in
the public interest. The examiners recommended denial
of the application. No exceptions were filed. I'm available
for questions for.
Chairman Christian: Any questions?
Callie: Commissioners. I just
want to let you know that we have Bill Hunger, Matthew
Burgers and Eric Swanson, all with Chevron, who are available
to answer any questions on agenda Item six.
Chairman Christian: Are there any questions
members?
I move we approve the examiners recommendation. Is
there a second?
Commissioner Craddick: Second.
Chairman Christian: All in favor. Say Aye. Any
opposed?
Motion passes. That item is approved. Callie, please
call up agenda item seven.
Callie: Yes, Thank you, Peter
Bravo will be presenting agenda item seven. Good morning
Peter. We're ready when you are.
Peter Bravo: Morning, Chairman, Commissioners.
For the record, my name is Peter Buva. Technical examinier
with the Hearings division. Item number seven is the
application of Ruger Properties LL C. Pursuant to
Statewide Rule Nine. They inject fluid into a reservoir
not productive of oil and gas for the White SWD
lease, Well Number one in the Sprayberry trend area
field in Morning, County, Texas. The application is
protested by an adjacent surface owner, Cactus Energy
Incorporated. The protestant contents that there
are improperly plugged wells in the half mile area
that will harm water and or mineral resources should
the subject disposal well be approved. Protestant also
claims that there is a lack of industry need for
a disposal well in the area.
Ruger presented evidence addressing each of the requirements
in the Statewide Rule Nine. Regarding protestants
claims about improperly plugged wells, examiners find
these wells have been plugged in accordance with the
Commission requirements. The applicant also provided
evidence in support of the industry need for the
proposed well.Eexaminers recommend approval of the
application. Exceptions and replies have been filed.
I'm available for questions.
Chairman Christian: Are there any questions?
I move we approve the--
Callie: Commissioners? Sorry. Excuse me really
quickly.
We have Stephen and I'm sorry if I butcher your name
Finagolio, attorney for Cactus Energy Incorporated
available to answer any questions.
Chairman Christian: Thank you. Any questions,
Members? I'm actually loving the way that that Callie
is now having to pronounce the names of the people
cause I always screw it up myself. And now it's her
fun.
Are there any questions? I move we approve the examiners
recommendation. Is there a second?
Commissioner Sitton: Second.
Chairman Christian: Second by Commissioner
Sitton. All in favor, say aye. Any opposed? Motion
passes? That item was approved. Callie, please call up
Agenda 8.
Callie: Thank you. Mr. Joe Menefee will be
presenting agenda item eight. Joe, we're ready when
you are.
Joe Menefee: Good morning, Chairman. Commissioners for
the record, Joe Menefee, paralegal in the Hearings
division. I'll be presenting items eight through 10, all
of which are P5 motions for rehearing, filed
as a result of final orders denying renewal of the
operators P5 because of wells non-compliant with Statewide
rule 15.
It's my understanding that item number eight was passed.
Callie: That is my understanding as well. So I apologize if
that was on me, but it should only be agenda Item number
nine and 10.
Chairman Christian: Okay, well, staff has requested to pass
this item. So Callie, please call up agenda number
nine.
Callie: Okay. Ah, Joe Menefee will be continuing with
agenda Item number nine. Thank you, Joe. Please continue
Joe Menefee: Item number 9. Subsequent to filing its motion
for rehearing, but Vaquero Operating has come into
compliance with statewide rule 15. It is recommended
the motion be granted and the underlying docket dismissed
as moot. I'm available for questions.
Callie: And Commissioners,
we have Matt Garvin and Casey Amsler. I'm sorry. Matt
Garvin is representing Vaquero and Casey Amsler is
representing Ten Man Energy to answer any questions
on agenda item nine.
Chairman Christian: Are there any questions, Members?
I move we approve the examiner's recommendation. Is there a
second?
Commissioner Craddick: Second.
Chairman Christian: All in favor, second by Commissioner Craddick.
All in favor, say, aye. Any opposed? Motion
passes. That item was approved. Please call up Agenda
item 10.
Callie: Yes, thank you. Joe Menefee would be
continuing with agenda Item number 10. Joe, you may
continue
Joe Menefee: Item number 10. and it's motionfor rehearing
Walls, GM and Francis Inc states its failure to request
a hearing was due to mail interruption and that the
operator continues to pursue compliance. Staff opposes
the motion. 15 wells remain noncompliant with Statewide
Rule 15. It is recommended the motion be denied. The
motion will be overruled by Operation of Law on June
12. I'm available for cost.
Chairman Christian: Any questions, members?
I move we approve the examiner's recommendation. Is there a
second?
Commissioner Sitton: Second.
Chairman Christian: Second by Commissioner Sitton. All in favor,
say aye. Any opposed? Motion passes. That item
is approved. Let's moved to the Oil and Gas Consent
Agenda.
There are 26 items on the Oil and Gas Consent Agenda.
I move that we approved Items 11 through 38 except
items 18 and 23, which would be passed to the next conference.
Is there a second?
Commissioner Craddick: Second.
Chairman Christian: Second by Commissioner Craddick. All
in favor, say aye. Any opposed? Motion passes.
Those items are approved. Let's move to the Rule 15
Inactive Wells items. There's 17 items on the Rule
15 Inactive Well items list. I move we approve items
39 through 60, except items 40, 44, 48, 51, and 59. Items 40,
44, and 59 have achieved compliance. Staff has requested
to pass items 48 and 51 to the next conference. Is there
a second?
Commissioner Sitton: Second.
Chairman Christian: Second by Commissioner Sitton. All in favor,
say aye.
Any opposed? Item is approved. Let's move to the Master
Default Orders. There are two Master Default Orders
I move, we approve these items 61 and 62. Is there a second?
Commissioner Craddick: Second.
Chairman Christian: Second by Commissioner Craddick. All in favor
say Aye. Aye. Any opposed? Motion passes. Those items
are approved. Let's move to Agreed Enforcement Orders. There
are 159 Agreed Enforcement Orders. I move we approve
item 63 through 221. Is there a second?
Commissioner Sitton: Second
Chairman Christian: Second by Commissioner Sitton. All in favor, say aye.
Any opposed? Motion passes. Those items are approved. That--
Commissioner Craddick: Mister Chairman, before we go forward. And I'm sorry,
I just wasn't paying good attention on the Inactive
Wells. Could you go back through and I voted on it.
I just want to clarify which ones we passed again.
Would you mind rereading that? I think we did it, I just didn't
write it down right. Thank you.
Chairman Christian: Okay. On the Rule 15 Inactive Wells
items. There are 15, there are 17 items on the Rule 15
Inactive wells items list. And we approved items 39
through 60. Except items 40, 44, 48, 51, and 59.
Commissioner Craddick: That's great.
Thank you very much. I appreciate you reviewing that for me.
Chairman Christian: Okay.
Call up agenda item 222, Callie.
Callie: We're ready to go. Thank you.
Miss Colleen Forest will be presenting Agenda Item Number
222. Colleen, we are ready when you are.
Colleen Forest: Good morning, Chairman and Commissioners. For the record
my name is Colleen Forest, Senior Management Analyst
with the Commission's Executive Office. Today, I will
be presenting item number 222. For your approval today
is the Commission's strategic plan for Fiscal Years
2021 through 2025. The plan lays out the Commission's
strategic direction for the next five years and determines
the Commission's budget structure for the Legislative
appropriations request for Fiscal Years 2022 and 2023.
The goals and action items laid out in this plan
track to the goals that form the structure of the Commission's
budget request. The plan also defines the Commission's
performance measures for the coming biennium. The
Governor's budget and policy teams and the Legislative
Budget Board have not yet approved the Commission's
proposed performance measure definition changes. We're
seeking seeking approval of the plan
and delegation of authority to the Executive Director
for any conforming changes that may be necessary. The
plan is due on Monday, June 1st. It will be submitted
electronically to the Governor's office, the LBB,
and other state officials, as well as being posted
on the Commission's website. May I answer any questions?
Chairman Christian: Are there any questions, Members? I move we approve the strategic
plan for Fiscal Years 2021 through 2025. Is there a
second?
Commissioner Craddick: Second.
Chairman Christian: Second by Commissioner Craddick. All
in favor, say aye. Any opposed? Motion passes.
That item is approved. Callie, please call up the presenter
for agenda Item 223.
Callie: Yes, thank you. April Richardson
will be presenting agenda Item number 223. April, we
are ready when you are.
April Richardson: Good morning, Mr Chairman and Commissioners. For the
record, my name is April Richardson, director of Alternative
Fuel Safety in the Oversight and Safety Division.
Item 223 is the Alternative Fuels Safety Department's
request for approval to adopt provisions to LPG Form
16, application for certification or certification renewal,
and minor corrections to 28 other LP gas forms. The changes
to LPG Form 16 are related to the Chapter 9
rule changes that went into effect January 6, 2020, and
combined the class attendance form used to collect
information for individuals who attend an LP gas training
class and one or more LP gas certification exam. The
changes update the division and department names, as
well as at information regarding training class attendance
and payment information for attending a training class,
exams taken, and any renewal fees paid. The changes
made to the other 28 forms are corrections to remove
previous designations used for the Alternative Fuel
Safety Department and update those references to the
current department name. All headers and contact information
were updated on these forms to the current division
and department names, and any outdated contact information
was also corrected. The proposed form changes were
presented at conference on March 4th and posted on
the Commission's website report for Public Comment. One
positive comment regarding the changes was received.
May I answer any questions?
Chairman Christian: Are there any questions
Members?
Commissioner Sitton: No.
Chairman Christian: I move we adopt the amendments to LPG
Form 16 and corrections to other LP gas forms. Is there a
second? Second. Second by Commissioner Sitton. All in favor,
say Aye. Aye. Any opposed? Motion passes. That item
was approved. Agenda Item 224 is our Public Participation
item. Cyrus Reed with Sierra Club is registered indicating
that he wishes to speak on a nonposted item. Callie,
please call it Mr Reid.
Callie: Yes, Thank you. Good morning
Mr Reid. We are ready when you are?
Cyrus Reed: Yes. Good morning. Commissioners
this is Cyrus Reed. I work with the Sierra Club Lone
Star chapter. Thank you for the opportunity to speak
very briefly. I wanted to speak very briefly about
transparency issues involving enforcement data and
Railroad Commission decisions. And I've sent each of
you separately a little statement and I won't read
the statement. I'll just kind of hit the highlights.
I, first of all , want to praise some recent decisions
you made before I criticized some of the other decisions.
So I do want to recognize the Railroad Commission,
this is an issue that we've been advocating for a long
time, the fact that you've put the online inspection
look up data that you seem to be improving over time
and I think more improvements are needed. But I think
this is very important that both regulated industry
and the public can see inspection and potential violations
related to those inspections at oil and gas wells and
related infrastructure. So I want to recognize you
guys for that effort and I know you got some money
to do it as well, so I appreciate that. And I also
appreciate that you've announced that you're online
Railroad Commission cases database, which is good,
but, you know, needs improvement is gonna be improved
by September. One of the issues that I've come across
is that until you guys make decisions on permits and
enforcement cases, you can't actually see what
you're deciding, and I think that's gonna be improved
by September. And that's going to be a very important,
I think, for the public and the regulator community.
So I appreciate those changes. Now, I'm going to get to my criticism.
You guys, comments are due tomorrow on the annual
oil and gas division monitoring enforcement plan, and
I just want to note that while you're complying with
what's in statute, I think some important information
that used to be on your website has been lost. And
that's the information that was in Rider 11, which
was very detailed enforcement data that was, you used to
report quarterly. And annually. What's in the annual
enforcement plan isn't as detailed, and I think it's
a disservice to the public and, frankly, the good work
a lot of your inspectors are doing to not have that
trend analysis on your website. I was able to obtain
it. Thank you. Thank you, Chairman, for your
efforts in obtaining the information for the last
couple of years. But I really think you should just
place it on your website. You're collecting the data it
makes sense to include it. It's helpful for the Legislature
to see the work you're doing and where more inspectors
may be needed. And then just, I'll hit a couple points
very briefly sso I don't go over time, but I
do think you need to also improve how you present information
about complaints and response. TCEQ has a very good,
searchable website on the number of complaints and
how this complaints are handled. I think you guys could
do something similar. I also think you should look
at how to put enforcement data about pipelines online
which is currently hard to find. And then you've heard
me say this before, but I do think you should revisit
your penalty matrix and open up a rulemaking on penalties.
I know that there are statutory caps on what you guys
are allowed to do in terms of penalties. That's a legislative
issue that we'll bring up again next next year. But
I think there are things that you can do at the Commission
so that the penalty fits the crime because I think
a lot of your penalties, frankly, are too low to deter
repeat violators. And my last point, I'm gonna make,
I think you probably heard me say this. I was very
very pleased with how you got public input on
the proration decision. It was very fair. You got lots
of input. That's a model you should be using going
forward. And I'm going to contrast that with your decisions
on regulatory relief. I personally disagreed with those
decisions. You obviously felt they were the right thing
to do. But I do think it was unfair to make those
decisions without at least posting the orders beforehand
and giving a chance for the public to input on those
issues. I don't think that's open and transparent government
and you know, the Commission, the Chairman asked for
information from industry on flaring to be taken up
at a future meeting. I think you should post some
questions to the public on flaring and get ideas
not just from industry, but from all stakeholders.
That's a better way to be transparent, and I'll end
it there. And I do appreciate all of your guys' service.
I know you're putting in long hours, but I've given
you my my praise and my criticism, and I hope you'll
take it seriously. Thank you.
Chairman Christian: Thank you, Mr Reid. Thank you.
Are the questions, members? No questions?
Cyrus, I appreciate your commentary this morning and just
want, in part, brag on my staff and the openness.
We did receive the IOGCC, the National Award for
Transparency, for our new reporting system online, and
we will take into consideration those items you brought,
frankly, the, right now, as you're well aware and all
are, these are not normal times. And maybe that's
part of the reason that we tried to quickly move to
relieve some of the costs and burdens to some of our
small producers across the state. Our big concern right
now, I believe, are those moms and dads that are
out of jobs and try and get those jobs back as quickly
as possible without harming the environment and our
citizens in the safety of what's going on. And so,
frankly, I hope you'll excuse some of the immediacy
of some of our rulemaking, contingent upon the current
situation we have and the many families that are suffering
right now. And we'll keep your comments in mind and continue
to work for that. I ask the staff to kind of review them
and appreciate your input and your comments today.
Cyrus Reed: Thank you. And again, I understand the immediacy of
the time. My point is you could have done something
like post the ideas for 10 days or one day or five
days and get input. And I hope you'll do something
similar on Flaring, where, if you are going to take
it upon the 16th, you have something for the public
to react to give their ideas as well. And that's
what I'm asking. You don't have to do it.
I'm just suggesting that would be a better way to get
input from all stakeholders.
And I respect that tremendously.
Just personally. My thought was, being in the finance
business for a number of years, the markets were very
uncertain, the price of West Texas Intermediate had done
things we don't want to see it do again. And I just
felt that we needed to make some certainty in the market.
And I'm glad to say that since the day that we
did that motion a couple weeks ago, the West Texas
Intermediate has gone up, not down. And I will forever
as a politician take credit for helping with that with
Railroad Commission and on that. But that's
some of the reason I think there's some quick decisions
that I think we're feeling we should make for the
good of the industry. Any other comments, members?
Okay, then. Thank you very much, Mr Reed, for your comments.
Thank you. Agenda 225 is our Executive Session item.
Which we will not be going into today. Are there any
other duly posted matters to be brought before the Commission
at this time? Hearing none, this meeting the Railroad
Commission of Texas is adjourned. Okay. Thank you.