WEBVTT
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Point, right, you're
looking good in the pictures.
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All right, Callie, we're ready to start.
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All right, good morning.
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This is Callie Farrar, Commission
Secretary, I'll be serving
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as the meeting moderator
for today's conference.
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Just a few reminders,
when it's your time to speak
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you'll be transferred over
to video and un-muted.
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When transferring, the
speaker and audience
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may experience a moment of delay.
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Speakers will also
need to begin their video,
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and remove themselves from mute
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for the video and audio to work.
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Commission does reserve
the right to remove any audio
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or video sharing capabilities from
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any person at any time if needed.
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Chairman Craddick, we are
ready to begin when you are.
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Thank you, Callie, this is
Chairman Craddick, this meeting
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of the Railroad Commission
of Texas will come to order
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to consider matters which
have been duly posted
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with the Secretary of
State for May 11th, 2021.
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Under our public participation policy
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anyone desiring to offer
public testimony on any items
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that are not noticed on
today's agenda was required
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to register in advance,
and we did not have
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anyone register in advance.
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The Commission will
consider out the items
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on the agenda as posted on the agenda.
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And, let's go to item
number one, Callie.
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Thank you, Frank Tomicek
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will be presenting agenda item one.
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Frank, we are ready when you are.
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Thank you very much, Callie.
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Madam Chairman,
Commissioners, good morning.
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I'm Frank Tomicek with the
Oversight and Safety Division.
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This first item this
morning is Case No. 5808,
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application made by Atmos Pipeline-Texas
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for a test due 2020, annual
interim rate adjustment.
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This is their fifth
interim rate adjustment
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since the company's last
rate case in GUD No. 10580,
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which set the interim
rate adjustment factors.
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And, using those factors
the company has identified
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a texture incremental
revenue requirement
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of approximately $43,868,433,
which will be recovered
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from their tariffed rate
CGS, and PT customers
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under the proposed rate adjustment.
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Staff's review of this filing
has found it to be compliant,
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and Atmos did provide
responses to staff's inquiries
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with the provisions of the GRIP statute,
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and staff is recommending approval.
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I can address any
questions at this time.
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Thank you, Frank,
are there any questions?
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Right, I move we approve the
examiners recommendation.
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Is there a second?
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Second.
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Second by Commissioner
Christian, all in favor say, aye.
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Aye.
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Aye, motion passes, that
item is approved, thanks.
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Thank you.
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I understand that staff
wants to pass item number two,
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so Callie, if you'll please call
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up presenter for item number three.
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Thank you, presenter
for agenda item three
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will be John Dodson,
and looks like we're kind of,
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there we go, good morning, John.
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Good morning.
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We are ready when you are.
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Thank you, Callie.
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Good morning, Chairman
and Commissioners.
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I'm Administrative Law
Judge John Dodson,
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with the Hearings division,
agenda item three is to consider
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a motion for rehearing
GUD No.10597, timely filed
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by complainant Vopak
Moda Houston or VMH.
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The Commission signed a
final order in this docket on
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March 9th, denying
VMH's requested relief.
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VMH then filed this
motion for rehearing,
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and Magellan filed a response opposing.
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A motion will be denied
by operation of law
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if Commission action is
not taken by June 17th,
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the motion for rehearing raises
no new issues of fact or law
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that the Commission has not
already considered, and so,
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the recommendation is to
deny, I'm available for questions.
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Commissioners, we
also have Bill Johnson,
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representing Magellan Crude
Oil Pipeline Company, LP,
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registered and available
for questions as well.
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Thank you, Callie,
are there any questions
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of Mr. Johnson or of John?
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No.
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All right, I move we approve
the examiners recommendation.
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Is there a second,
Second.
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Second, by Commissioner Wright,
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all those in favor say, aye.
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Aye.
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Aye, motion passes,
that item is approved.
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Thank you, John. Callie, if
you'll please call presenter
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for items four through six.
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Yes, thank you,
Veronica Ruberto will
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be presenting agenda
items four through six.
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Veronica, good morning,
we are ready when you are.
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Good morning, Chairman
and Commissioners,
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Veronica Ruberto,
Administrative Law Judge
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with the Hearings
division, item number four
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is the application by
Marshall Mine, LLC,
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requesting acceptance
of a surety bond rider
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for Permit No. 59A,
within Marshall Mine,
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located in Harrison and Panola counties.
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Marshall is requesting
acceptance of a rider to adjust
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the currently bonded
amount of 30 million
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to a reduced amount, based on the
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most recently approved reclamation cost
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in the amount of an
approximate 16.5 million.
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The rider instrument has
been reviewed by the Surface
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Mining and Reclamation Division
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in the office of general counsel.
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The terms for the current
bond will remain in place,
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and the proffered rider
is sufficient to cover
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the most recent
reclamation cost estimate,
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staff and Marshall are the
only parties to the proceeding.
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No exceptions were filed,
the rider to the surety bond
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adequately addresses the
reduction in bond and satisfies
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all requirements for the
acceptance of the rider.
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It is recommended that the application
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for acceptance of the
surety bond be approved.
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I'm available for questions.
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Thank you, Veronica,
are there any questions?
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No.
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All right, I move we approve
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the examiners recommendation,
is there a second?
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Second.
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Second, by
Commissioner Christian,
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all those in favor say, aye.
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Aye.
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Aye, motion passes,
that item is approved.
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Item number five, Veronica.
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Item number five
is an application by
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Texas Municipal Power
Agency for a replacement
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of a collateral bond
and letter of credit
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for Permit No. 26D, within
Gibbons Creek Lignite Mine,
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located in Grimes County,
Texas. (clears throat)
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Permit No. 26D is in reclamation,
and is currently bonded
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with a collateral bond and
a letter of credit issued by
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Wells Fargo bank, in
the amount of 11,600,000,
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which expires on June 8th, 2021.
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TMPA request acceptance of
a replacement collateral bond
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with a letter of credit, also issued by
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Wells Fargo, in the amount of 3,400,000.
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The proffered bond has an
expiration date of June 7th, 2022.
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Staff's most recent
reclamation costs is in
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the approximate amount of 2.8 million.
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The amount of the replacement bond
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for the permit will exceed
the approved reclamation cost
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and is sufficient, all
other issues have been
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sufficiently addressed by
TMPA for acceptance of the bond.
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Staff, and TMPA are the
only parties to the proceeding
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where exceptions were
filed, it is recommended
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that the Commission accept
the proffered collateral bond
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and letter of credit to replace
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the existing bond for Permit No. 26D.
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I'm available for questions.
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Thank you, are there any
questions, all right, I move
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we approve the examiners
recommendation, is there a second?
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Second.
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Second, by Commissioner Wright,
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all in favor say, aye.
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Aye.
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Aye, motion passes,
that item is approved,
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and item number six, Veronica.
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Item number six is
an application by TMPA,
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for the acceptance of a
replacement collateral bond
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and letter of credit for Permit No. 38D,
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within Gibbons Creek Lignite Mine five,
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located in Grimes County, Texas.
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Permit No. 38D is in reclamation,
and is currently bonded
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by a collateral bond letter
and letter of credit issued by
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Wells Fargo, in the amount of 6,500,000,
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which expires on June 8th, 2021.
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TMPA requests acceptance
of the replacement bond,
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with a letter of credit issued by
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Wells Fargo, in the amount of 6,500,000.
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The proffered bond expiration
date is June 7th, 2022.
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Staff's most recent reclamation costs
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in the approximate amount of 6.1 million
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is sufficient to cover the
cost of reclamation costs.
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All other issues have been
sufficiently addressed by TMPA.
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Staff, and TMPA are the only parties
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to the proceeding, no
exceptions were filed.
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It is recommended that
the Commission accept
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the proffered collateral
bond and letter of credit
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to replace the existing
bond per Permit No. 38D,
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I'm available for questions.
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Thank you, are
there any questions.
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No.
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Right, I move we approve
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the examiners recommendation,
is there a second?
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Second.
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Second, by Commissioner
Christian, all in favor, say, aye.
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Aye.
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Aye, motion passes,
that item is approved.
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Thank you, Veronica, Callie if you'll
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please call up presenter
for item number seven.
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Yes, thank you,
Marcella Spraggins will
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be presenting agenda item seven,
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Marcella, we are ready when you are.
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Good morning, Chairman and
Commissioners, for the record,
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Administrative Law
Judge Marcella Spraggins
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with the Hearings
division, item number seven
00:08:47.220 --> 00:08:50.740
is an application by Dos
Republicas Coal Partnership,
00:08:50.740 --> 00:08:53.100
that requests acceptance
of a rider to one of
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its two accepted surety bonds for
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the Eagle Pass Mine, Permit No. 42B.
00:08:59.930 --> 00:09:01.520
The mine is currently bonded in
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the amount of
approximately $46.6 million.
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With two bonds issued by
Argonaut Insurance Company.
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The bonds are in the amount
of approximately $29.3 million,
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that is not proposed to
change, and in the amount
00:09:15.970 --> 00:09:19.850
of approximately $17.4
million, that is proposed
00:09:19.850 --> 00:09:24.850
to be reduced by the
proffered rider to $2,298,596.43.
00:09:28.250 --> 00:09:31.037
This reduction will result
in a total bond amount
00:09:31.037 --> 00:09:36.037
of $31,553,785, this is an amount that
00:09:37.330 --> 00:09:39.990
is sufficient to cover
the most recent estimate
00:09:39.990 --> 00:09:42.970
of reclamation costs for the permit.
00:09:42.970 --> 00:09:45.730
The parties filed waivers of
the preparation and circulation
00:09:45.730 --> 00:09:48.400
of a proposal for
decision, it is recommended
00:09:48.400 --> 00:09:51.050
that the application for
acceptance of the rider
00:09:51.050 --> 00:09:53.230
to the surety bond be approved.
00:09:53.230 --> 00:09:55.900
I'm available to answer any questions.
00:09:55.900 --> 00:09:59.020
Are there any questions,
right, I move we approve
00:09:59.020 --> 00:10:01.316
the examiners recommendation,
is there a second?
00:10:01.316 --> 00:10:02.810
Second.
00:10:02.810 --> 00:10:05.536
Second, by Commissioner
Christian, all in favor, say, aye.
00:10:05.536 --> 00:10:06.580
Aye.
00:10:06.580 --> 00:10:08.497
Aye, motion passes,
that item is approved,
00:10:08.497 --> 00:10:09.330
thank you, Marcy.
00:10:09.330 --> 00:10:10.260
Thank you.
00:10:10.260 --> 00:10:13.277
Callie, please call
up item number eight.
00:10:13.277 --> 00:10:15.907
Yes, thank you, Ashley Correll
00:10:15.907 --> 00:10:19.030
will be presenting agenda item eight.
00:10:19.030 --> 00:10:21.433
Good morning, Ashley,
we are ready when you are.
00:10:22.856 --> 00:10:24.570
Good morning, Chairman
and Commissioners.
00:10:24.570 --> 00:10:26.830
I am Ashley Correll,
Technical Examiner for
00:10:26.830 --> 00:10:30.400
the Hearings division, item
number eight is the application
00:10:30.400 --> 00:10:34.160
of Endeavor Natural Gas,
LP, for a non-commercial permit
00:10:34.160 --> 00:10:37.770
to dispose of fluids into
a formation not productive
00:10:37.770 --> 00:10:41.542
of oil or gas, in Dimmitt County, Texas.
00:10:41.542 --> 00:10:45.240
Endeavor proposes to dispose
of 2000 barrels a day into
00:10:45.240 --> 00:10:48.650
the Olmos Formation,
Endeavor asserts that
00:10:48.650 --> 00:10:50.900
the use of the proposed disposal well,
00:10:50.900 --> 00:10:52.580
with special permit conditions,
00:10:52.580 --> 00:10:54.750
will not endanger groundwater.
00:10:54.750 --> 00:10:57.190
The surface and production
casing are cemented
00:10:57.190 --> 00:11:00.210
to surface, due to short surface casing,
00:11:00.210 --> 00:11:02.340
permit conditions were
added for Endeavor
00:11:02.340 --> 00:11:05.406
to perform annual
annulus pressure testing,
00:11:05.406 --> 00:11:10.140
and weekly monitoring of the
tubing casing annulus pressure.
00:11:10.140 --> 00:11:12.330
The application is protested by
00:11:12.330 --> 00:11:15.690
Winter Garden Groundwater
Conservation District,
00:11:15.690 --> 00:11:17.900
Winter Garden contends
the well is constructed
00:11:17.900 --> 00:11:20.130
with short surface
casing that does not cover
00:11:20.130 --> 00:11:22.800
the base of usable quality
water, and the age of
00:11:22.800 --> 00:11:26.410
the well leaves the well more
susceptible to degradation.
00:11:26.410 --> 00:11:28.450
Winter Garden argues
the well is not in compliance
00:11:28.450 --> 00:11:31.370
with Rule 13, and
special permit conditions
00:11:31.370 --> 00:11:34.250
to address short surface
casing are not sufficient
00:11:34.250 --> 00:11:36.783
to reduce the risk of
groundwater contamination.
00:11:37.800 --> 00:11:40.430
The examiners find the
special permit conditions may
00:11:40.430 --> 00:11:43.770
be utilized when surface
casing does not extend
00:11:43.770 --> 00:11:46.330
below the base of usable quality water,
00:11:46.330 --> 00:11:49.980
and these conditions are
appropriate for this application.
00:11:49.980 --> 00:11:52.240
The examiners did not
find evidence in the record
00:11:52.240 --> 00:11:55.340
that the well bore has
experienced degradation.
00:11:55.340 --> 00:11:57.230
And, a mechanical integrity test,
00:11:57.230 --> 00:12:00.230
and a radioactive tracer survey will
00:12:00.230 --> 00:12:03.207
be run prior to disposal operations.
00:12:03.207 --> 00:12:06.680
The examiners recommend
approval of the application.
00:12:06.680 --> 00:12:10.783
No exceptions were filed,
I'm available for questions.
00:12:10.783 --> 00:12:15.120
Thank you, are there
any questions, right, I move
00:12:15.120 --> 00:12:18.254
we approve the examiners
recommendation, is there a second?
00:12:18.254 --> 00:12:19.087
Second.
00:12:19.087 --> 00:12:21.882
Second, by Commissioner
Wright, all in favor say, aye.
00:12:21.882 --> 00:12:22.810
Aye.
00:12:22.810 --> 00:12:24.860
Aye, motion passes,
that item is approved,
00:12:24.860 --> 00:12:27.110
thank you, Ashley,
all right, let's move on
00:12:27.110 --> 00:12:29.850
to the oil and gas Consent Agenda.
00:12:29.850 --> 00:12:34.410
There are 31 items on
this agenda, part items,
00:12:34.410 --> 00:12:38.270
nine through 39, are there
any specific comments?
00:12:38.270 --> 00:12:41.150
Yeah, Commissioner, of
course I always have comments
00:12:41.150 --> 00:12:44.320
in these regards, I just
wanted to let everyone know
00:12:44.320 --> 00:12:47.510
just how much progress we're
making with the part we're in.
00:12:47.510 --> 00:12:51.820
Every operator in the Consent
Agenda, either on its own
00:12:51.820 --> 00:12:53.380
or challenged by our examiners,
00:12:53.380 --> 00:12:57.380
reduce their flaring exception
term by six to 12 months,
00:12:57.380 --> 00:13:01.240
reduce their flaring exception
volume by 80 to 90%,
00:13:01.240 --> 00:13:03.070
and even chose to send their gas to
00:13:03.070 --> 00:13:06.040
an alternative electric
generation method,
00:13:06.040 --> 00:13:08.180
which captures emissions
that otherwise would have
00:13:08.180 --> 00:13:11.000
been released, I'm also happy to report
00:13:11.000 --> 00:13:13.180
that multiple operators
submitted plans as part
00:13:13.180 --> 00:13:14.890
of their learning exception application
00:13:14.890 --> 00:13:17.920
to eliminate routine
flaring in the near future.
00:13:17.920 --> 00:13:20.460
I sincerely thank both our staff,
00:13:20.460 --> 00:13:22.730
and industry for
continuing to work together
00:13:22.730 --> 00:13:25.040
to resolve this important issue.
00:13:25.040 --> 00:13:27.290
Thank you, and I'm
happy to hear your motion.
00:13:28.140 --> 00:13:31.790
Thank you, Commissioner,
any other comments?
00:13:31.790 --> 00:13:32.860
Yeah, let me
just say something.
00:13:32.860 --> 00:13:35.750
It's interesting, I just
received updated information
00:13:35.750 --> 00:13:38.206
from our staff and what a great job they
00:13:38.206 --> 00:13:40.740
and the industry are
doing, like Jim has said.
00:13:40.740 --> 00:13:43.310
The last three years, it's basically,
00:13:43.310 --> 00:13:46.530
we decreased flaring
in Texas by 1% a year.
00:13:46.530 --> 00:13:51.247
And, it's down now to
0.7%, which means 99.3%
00:13:52.520 --> 00:13:55.020
is not being flared, going
directly to the intended use
00:13:55.020 --> 00:13:57.290
for the consumer, and I
think that's just marvelous
00:13:57.290 --> 00:14:00.730
that less than seven hundredths of 1%
00:14:00.730 --> 00:14:02.240
is being flared in the state of Texas.
00:14:02.240 --> 00:14:05.610
And, it is a great example
of success in an area
00:14:05.610 --> 00:14:07.120
that we continue to watch over.
00:14:07.120 --> 00:14:11.280
Well, I appreciate it, the
staff and industry is going
00:14:11.280 --> 00:14:13.680
the right direction, so thank y'all
00:14:13.680 --> 00:14:16.920
for continuing to highlight
it, and thank you, staff
00:14:16.920 --> 00:14:18.020
for continuing to work through it.
00:14:18.020 --> 00:14:21.323
I appreciate that piece
too, any other comments?
00:14:22.230 --> 00:14:25.640
All right, I move that
we approve items nine
00:14:25.640 --> 00:14:28.241
through 39, is there a second?
00:14:28.241 --> 00:14:29.440
Second.
00:14:29.440 --> 00:14:32.173
Second, by Commissioner
Christian, all in favor say, aye.
00:14:32.173 --> 00:14:33.134
Aye.
00:14:33.134 --> 00:14:35.911
Aye, motion passes,
those items are approved.
00:14:35.911 --> 00:14:38.271
Let's go to master default items.
00:14:38.271 --> 00:14:41.214
There are 10 master default order items.
00:14:41.214 --> 00:14:43.272
I move that we approve items 40
00:14:43.272 --> 00:14:45.484
through 49, is there a second?
00:14:45.484 --> 00:14:46.317
Second.
00:14:46.317 --> 00:14:49.022
Second, by Commissioner
Wright, all in favor say, aye.
00:14:49.022 --> 00:14:49.919
Aye.
00:14:49.919 --> 00:14:52.833
Aye, motion passes,
those items are approved,
00:14:52.833 --> 00:14:54.902
and now agree to enforcement orders.
00:14:54.902 --> 00:14:57.981
There are 60 agreed enforcement orders.
00:14:57.981 --> 00:15:02.981
I move we approve items 50
through 109, is there a second?
00:15:03.238 --> 00:15:04.280
Second.
00:15:04.280 --> 00:15:07.206
Second, by Commissioner
Christian, all in favor say, aye.
00:15:07.206 --> 00:15:08.039
Aye.
00:15:08.039 --> 00:15:10.430
Aye, motion passes,
those items are approved.
00:15:10.430 --> 00:15:12.730
That concludes the
hearing section matters.
00:15:12.730 --> 00:15:16.200
And, we'll now go to the
administrative agenda.
00:15:16.200 --> 00:15:17.910
And, Callie, will you please call up
00:15:17.910 --> 00:15:20.313
the presenter for agenda item 110.
00:15:21.290 --> 00:15:26.223
Thank you, Keith May will
be presenting agenda item 110.
00:15:27.720 --> 00:15:30.270
Morning, Keith, we
are ready when you are.
00:15:30.270 --> 00:15:32.830
Good morning, Chairman and
Commissioners, for the record,
00:15:32.830 --> 00:15:35.640
my name is Keith May,
with the Oil and Gas Division.
00:15:35.640 --> 00:15:38.100
Item 110, staff is
seeking their approval
00:15:38.100 --> 00:15:39.920
to make available for public comment,
00:15:39.920 --> 00:15:42.790
the Commission's Oil and
Gas Division's monitoring
00:15:42.790 --> 00:15:45.733
and enforcement plan
for the fiscal year 2022.
00:15:46.730 --> 00:15:48.920
The plan was required by House Bill 1818
00:15:48.920 --> 00:15:52.320
from the 85th Legislature,
House Bill 1818
00:15:52.320 --> 00:15:54.180
also requires Commission to seek public
00:15:54.180 --> 00:15:56.570
input as the plan is developed.
00:15:56.570 --> 00:15:58.720
With your approval, the
plan will be made available
00:15:58.720 --> 00:16:01.570
from today until June
10th, with the option
00:16:01.570 --> 00:16:05.840
to submit feedback via a web
based survey or via US mail.
00:16:05.840 --> 00:16:08.110
We will return to
conference on June 22nd
00:16:08.110 --> 00:16:09.550
with the final version of the plan
00:16:09.550 --> 00:16:12.810
for your approval, that
version plan will relfect
00:16:12.810 --> 00:16:15.430
any public comment
received by June 10th.
00:16:15.430 --> 00:16:17.460
The final version of the
plan must be posted to the
00:16:17.460 --> 00:16:20.100
Commission's website
no later than July 1st.
00:16:20.100 --> 00:16:21.450
May I answer any questions?
00:16:22.560 --> 00:16:24.240
Are there any questions?
00:16:24.240 --> 00:16:25.100
No.
00:16:25.100 --> 00:16:27.250
Thank you, Keith, and
your staff for working on this,
00:16:27.250 --> 00:16:29.850
I move we approve the
staff's recommendation.
00:16:29.850 --> 00:16:31.045
Is there a second?
00:16:31.045 --> 00:16:31.878
Second.
00:16:31.878 --> 00:16:35.393
Second, by Commissioner
Wright, all in favor say, aye.
00:16:35.393 --> 00:16:36.400
Aye.
00:16:36.400 --> 00:16:39.150
Aye, motion passes,
that item is approved.
00:16:39.150 --> 00:16:43.970
Item 111 is our public
participation item,
00:16:43.970 --> 00:16:46.504
and we don't have
anybody who's signed up for,
00:16:46.504 --> 00:16:50.500
or who's registered
in advance, item 112 is
00:16:50.500 --> 00:16:53.680
our executive session item,
which we will not be going
00:16:53.680 --> 00:16:56.330
into today, and before we adjourn.
00:16:56.330 --> 00:16:58.760
Commissioners, obviously
we've all been watching
00:16:58.760 --> 00:17:02.320
the legislature and this
is our last conference,
00:17:02.320 --> 00:17:03.780
I think, before they adjourn.
00:17:03.780 --> 00:17:07.462
And so, I'd like to get
an update from Jeremy,
00:17:07.462 --> 00:17:09.660
if that's okay with y'all,
kind of where we are
00:17:09.660 --> 00:17:12.280
in the storm, since we've
all been focused on that.
00:17:12.280 --> 00:17:15.650
So, Jeremy, if you
will give us an update,
00:17:15.650 --> 00:17:17.485
I appreciate you being here today.
00:17:17.485 --> 00:17:20.470
Absolutely, Chairman,
Commissioners, thank you for having
00:17:20.470 --> 00:17:22.490
me here, my name's Jeremy Mazur, I'm the
00:17:22.490 --> 00:17:25.220
Railroad Commission's
director of government relations.
00:17:25.220 --> 00:17:28.380
In the weeks following
Winter Storm Uri in February,
00:17:28.380 --> 00:17:29.720
members of the Texas House,
00:17:29.720 --> 00:17:32.390
and Senate filed multiple bills relating
00:17:32.390 --> 00:17:36.000
to the winter weather disaster event.
00:17:36.000 --> 00:17:38.720
Several of those bills
filed, do speak specifically
00:17:38.720 --> 00:17:40.540
to operations of the
Railroad Commission,
00:17:40.540 --> 00:17:42.570
and attempt to assign
further responsibilities
00:17:42.570 --> 00:17:44.240
to the Commission and our oversight
00:17:44.240 --> 00:17:47.380
of the state's oil and
gas and pipeline industry.
00:17:47.380 --> 00:17:49.220
What I'd like to do is
walk you through some
00:17:49.220 --> 00:17:50.999
of those bills that relate
to the Commission,
00:17:50.999 --> 00:17:53.340
and rather than go through
each of the bills individually,
00:17:53.340 --> 00:17:56.020
they generally fall within
one of three categories.
00:17:56.020 --> 00:17:58.800
The first category being
emergency planning,
00:17:58.800 --> 00:18:01.610
the second category being
emergency preparedness.
00:18:01.610 --> 00:18:04.716
And lastly, the third category
of bills involves issues
00:18:04.716 --> 00:18:07.240
that are directly responsive to issues
00:18:07.240 --> 00:18:09.920
that came up during Winter Storm Uri.
00:18:09.920 --> 00:18:11.160
Let me first start with the bills
00:18:11.160 --> 00:18:13.680
that relate to winter disaster planning.
00:18:13.680 --> 00:18:15.580
There are three bills
that are currently moving
00:18:15.580 --> 00:18:18.590
through legislative
process that try to formalize
00:18:18.590 --> 00:18:20.430
some sort of structure for the state.
00:18:20.430 --> 00:18:22.920
And, that often include the
Railroad Commission for planning
00:18:22.920 --> 00:18:25.700
for future weather events,
fore most among those
00:18:25.700 --> 00:18:29.490
is Senate Bill 3, by
Senator Charles Schwertner.
00:18:29.490 --> 00:18:32.850
This bill creates the Texas
Energy Reliability Council
00:18:32.850 --> 00:18:35.970
in statute, the council includes
the Railroad Commission,
00:18:35.970 --> 00:18:37.790
as well as partner
agencies, including the
00:18:37.790 --> 00:18:39.920
Public Utility Commission, TxDOT, and
00:18:39.920 --> 00:18:42.840
the Texas Division of
Emergency Management.
00:18:42.840 --> 00:18:44.240
The purpose of this council is
00:18:44.240 --> 00:18:46.110
to ensure the delivery of natural gas
00:18:46.110 --> 00:18:49.840
to human needs customers
during a emergency event.
00:18:49.840 --> 00:18:51.207
Other planning bills
that are moving through
00:18:51.207 --> 00:18:54.020
the legislative process
include House Bill 13,
00:18:54.020 --> 00:18:55.890
by Chairman Paddie, which creates
00:18:55.890 --> 00:18:58.546
the Texas Energy
Disaster Liability Council,
00:18:58.546 --> 00:19:02.010
which again, as a council
comprise of multiple agencies,
00:19:02.010 --> 00:19:03.730
including the Railroad Commission.
00:19:03.730 --> 00:19:06.240
And, the purpose of this
council is to prevent natural gas
00:19:06.240 --> 00:19:09.750
outages during a disaster event.
00:19:09.750 --> 00:19:12.380
House Bill 13 has passed
the House, and it was heard
00:19:12.380 --> 00:19:14.900
in Senators Prudence
Committee last week,
00:19:14.900 --> 00:19:16.610
is still pending a committee vote and
00:19:16.610 --> 00:19:19.140
a final decision by
the Senate as a whole.
00:19:19.140 --> 00:19:22.020
Another planning bill that's
moving is House Bill 14,
00:19:22.020 --> 00:19:24.450
by House Chairman, Craig
Goldman, which creates
00:19:24.450 --> 00:19:28.160
a Texas Electricity Supply
Chain Mapping Committee.
00:19:28.160 --> 00:19:30.420
And, the purpose of
this committee is to map
00:19:30.420 --> 00:19:34.680
the state's energy supply
chain, and to identify those areas
00:19:34.680 --> 00:19:36.760
that need to be better protected
00:19:36.760 --> 00:19:40.270
in order to avoid future
outages of natural gas supply
00:19:40.270 --> 00:19:43.200
to human needs customers
in a time of disaster.
00:19:43.200 --> 00:19:46.430
House Bill 14, by Chairman
Goldman has passed the House,
00:19:46.430 --> 00:19:49.820
and it's going to be heard
on the Senate this Thursday
00:19:49.820 --> 00:19:52.730
and the Senate
committee on jurisprudence.
00:19:52.730 --> 00:19:54.220
The third category of bills that
00:19:54.220 --> 00:19:55.810
are moving through legislative process.
00:19:55.810 --> 00:19:57.780
The second category, I stand corrected,
00:19:57.780 --> 00:20:00.310
of bills moving through
legislative process relate
00:20:00.310 --> 00:20:03.200
to the state's emergency preparedness.
00:20:03.200 --> 00:20:04.390
And, here there's two bills that
00:20:04.390 --> 00:20:06.110
I want to bring to your attention.
00:20:06.110 --> 00:20:08.380
The first of those
bills is Senate Bill 3,
00:20:08.380 --> 00:20:11.360
in Senate Bill 3, is the sentence
omnibus measure relating
00:20:11.360 --> 00:20:13.470
to the weather winter weather storm.
00:20:13.470 --> 00:20:14.950
Senate Bill 3 requires that the
00:20:14.950 --> 00:20:17.570
Railroad Commission
adopt rules requiring
00:20:17.570 --> 00:20:19.510
that gas supply chain facilities,
00:20:19.510 --> 00:20:22.640
including natural gas
pipelines, implement measures
00:20:22.640 --> 00:20:24.360
to prepare the facilities to operate
00:20:24.360 --> 00:20:27.100
during a weather
emergency, Senate Bill 3
00:20:27.100 --> 00:20:28.510
also requires that gas supply chain
00:20:28.510 --> 00:20:33.510
and pipeline operators submit
emergency operation plans
00:20:34.090 --> 00:20:37.020
to the Commission, and those
plans have to describe how
00:20:37.020 --> 00:20:40.380
they plan to operate during
extreme weather conditions.
00:20:40.380 --> 00:20:43.120
Another bill that relates to
emergency preparedness
00:20:43.120 --> 00:20:46.730
is Senate Bill 1750, by
Senator Kelly Hancock.
00:20:46.730 --> 00:20:49.837
Senate Bill 1750 has passed
the Senate, and it requires that
00:20:49.837 --> 00:20:51.950
the Railroad Commission adopt rules
00:20:51.950 --> 00:20:55.410
to requiring gas well
operators and pipeline operators
00:20:55.410 --> 00:20:58.160
to operate during a weather emergency.
00:20:58.160 --> 00:21:00.440
Specifically weather
emergency much like we saw
00:21:00.440 --> 00:21:02.810
during Winter Stor Uri in February.
00:21:02.810 --> 00:21:06.130
1750 also requires
natural gas, transportation,
00:21:06.130 --> 00:21:08.740
storage, and shipping entities submit
00:21:08.740 --> 00:21:10.560
a winter weather preparedness plan
00:21:10.560 --> 00:21:14.070
to the Railroad Commission,
for review by the agency.
00:21:14.070 --> 00:21:16.310
The third category of
bills that I wanna describe
00:21:16.310 --> 00:21:18.796
with you, are those bills
bills that are responsive
00:21:18.796 --> 00:21:21.440
to specific issues that surfaced
00:21:21.440 --> 00:21:23.890
during Winter Storm Uri in February.
00:21:23.890 --> 00:21:28.460
First, there's House Bill 3648,
by Chairman Charlie Garren.
00:21:28.460 --> 00:21:31.230
And, 3648 requires that the
Railroad Commission work
00:21:31.230 --> 00:21:34.466
with PUC, Public Utility Commission
00:21:34.466 --> 00:21:37.807
to designate natural
gas facilities and entities
00:21:37.807 --> 00:21:40.700
as critical during a time of emergency.
00:21:40.700 --> 00:21:44.210
The purpose of 3648 is to
ensure that power is delivered
00:21:44.210 --> 00:21:47.510
to natural gas entities,
should power outages
00:21:47.510 --> 00:21:49.910
or rolling blackouts occur to ensure
00:21:49.910 --> 00:21:51.400
that natural gas can be delivered
00:21:51.400 --> 00:21:54.450
to human needs customers
during a time of emergency.
00:21:54.450 --> 00:21:56.580
Another major bill that
has passed the House,
00:21:56.580 --> 00:21:59.316
is House Bill 1520, by Chairman Paddie,
00:21:59.316 --> 00:22:02.570
1520 creates a securitization program,
00:22:02.570 --> 00:22:04.940
that would be ministered by
both the Railroad Commission
00:22:04.940 --> 00:22:06.881
and the Texas Public Finance Authority.
00:22:06.881 --> 00:22:08.400
And, this program would work
00:22:08.400 --> 00:22:11.340
so where the Railroad
Commission authorized the issuance
00:22:11.340 --> 00:22:13.990
of bonds, and those bond
proceeds would be used
00:22:13.990 --> 00:22:17.250
by natural gas utilities
to pay for the high price
00:22:17.250 --> 00:22:20.260
of gas that they purchased
during the winter storm.
00:22:20.260 --> 00:22:23.720
In turn, those utilities
customer's would pay a lower bill
00:22:23.720 --> 00:22:25.870
throughout the summer
in the upcoming years
00:22:25.870 --> 00:22:29.730
to pay for the gas that
was ultimately purchased
00:22:29.730 --> 00:22:33.070
during February's winter storm market.
00:22:33.070 --> 00:22:35.610
Again, House Bill 1520
has passed the house,
00:22:35.610 --> 00:22:37.710
and it's pending referral in the Senate.
00:22:37.710 --> 00:22:40.240
Lastly, I wanna bring to
your attention House Bill 2000,
00:22:40.240 --> 00:22:43.450
by Chairman Dan Huberty,
which also has passed the House.
00:22:43.450 --> 00:22:44.790
House Bill 2000 creates the
00:22:44.790 --> 00:22:47.320
State Utilities Reliability Fund,
00:22:47.320 --> 00:22:48.639
which is a fund administered by
00:22:48.639 --> 00:22:51.896
the Water Development Board,
provided grants to natural gas,
00:22:51.896 --> 00:22:55.420
electric, broadband,
and water utilities.
00:22:55.420 --> 00:22:58.210
For the purpose of
making their facilities
00:22:58.210 --> 00:23:00.490
more resilient to
extreme weather events,
00:23:00.490 --> 00:23:03.060
much like the winter
storm we saw in February.
00:23:03.060 --> 00:23:05.920
House Bill 200 passed the
House since pending referral
00:23:05.920 --> 00:23:08.760
in the Senate, with
that Chairman, I close.
00:23:08.760 --> 00:23:10.230
I thank you for your time, and I'm open
00:23:10.230 --> 00:23:12.127
to any questions that you may have.
00:23:12.127 --> 00:23:13.890
Thank you, Jeremy,
Commissioner Christian,
00:23:13.890 --> 00:23:15.140
I saw you raise your hand, yes sir.
00:23:15.140 --> 00:23:18.690
Yes, Thank you, Jeremy,
I thank you, and I thank
00:23:18.690 --> 00:23:21.390
Chairman Craddick for
excellent work that y'all done
00:23:21.390 --> 00:23:23.960
during this session in
leading, and continue to do.
00:23:23.960 --> 00:23:26.880
And, I appreciate very much
both of you for your efforts
00:23:26.880 --> 00:23:28.660
in leading through this session.
00:23:28.660 --> 00:23:32.820
I'm increasingly concerned
though about House Bill 1520,
00:23:32.820 --> 00:23:34.940
it's not been referred to
committee in the Senate.
00:23:34.940 --> 00:23:37.930
It passed the House 20
days ago unanimously,
00:23:37.930 --> 00:23:40.050
without this crucial bill, I'm afraid
00:23:40.050 --> 00:23:43.865
our constituents will receive
large unexpected gas bills
00:23:43.865 --> 00:23:46.460
from the natural gas utilities as
00:23:46.460 --> 00:23:48.920
a surcharge from that winter storm.
00:23:48.920 --> 00:23:50.810
As you know, the cost
of gas is not controlled
00:23:50.810 --> 00:23:53.370
by gas utilities, but instead is set by
00:23:53.370 --> 00:23:56.810
the market and passed through
to consumers without markup.
00:23:56.810 --> 00:23:59.670
High demand for energy
during the storm cause gas prices
00:23:59.670 --> 00:24:03.670
to rise, some utilities reported
incurred gas costs equal
00:24:03.670 --> 00:24:07.935
to two or three times more
than expected annual gas cost.
00:24:07.935 --> 00:24:11.470
1520 House Bill,
allows for the high cost
00:24:11.470 --> 00:24:14.850
of gas from the storm to
be securitized, are providing
00:24:14.850 --> 00:24:17.210
great relief through
extending the timeframe over
00:24:17.210 --> 00:24:20.020
which the extraordinary costs
would have to be recovered,
00:24:20.020 --> 00:24:22.850
lowering associated financing costs.
00:24:22.850 --> 00:24:25.760
This method allows entities
to use the credit worthiness
00:24:25.760 --> 00:24:28.550
of the state to lower
the interest rates,
00:24:28.550 --> 00:24:30.010
ensuring rate payers would not
00:24:30.010 --> 00:24:32.560
be impacted by additional fees.
00:24:32.560 --> 00:24:33.970
I've written the Lieutenant Governor,
00:24:33.970 --> 00:24:35.460
and many of our friends in the Senate
00:24:35.460 --> 00:24:37.320
about the importance of this bill,
00:24:37.320 --> 00:24:40.200
but I just wanted to
express it here today as well.
00:24:40.200 --> 00:24:42.810
Much of the public is going
to be on a fixed income
00:24:42.810 --> 00:24:46.790
in the state of Texas, cannot
afford large unexpected bills.
00:24:46.790 --> 00:24:48.780
And, I wanted to assure them that
00:24:48.780 --> 00:24:51.160
the Railroad Commission
takes this matter seriously,
00:24:51.160 --> 00:24:52.865
and is doing what we can to make sure
00:24:52.865 --> 00:24:55.533
that those high bills do not happen.
00:24:56.973 --> 00:24:59.346
Thank you, Commissioner,
Commissioner Wright,
00:24:59.346 --> 00:25:00.510
do you have any comments?
00:25:00.510 --> 00:25:01.947
No, I'd just like to
thank you Chairman,
00:25:01.947 --> 00:25:03.780
and you Jeremy for the wonderful work
00:25:03.780 --> 00:25:06.090
y'all done this year
over at the Capitol.
00:25:06.090 --> 00:25:08.290
It's been amazing, thank you both.
00:25:08.290 --> 00:25:10.650
Thank you, and thank
you for the nice comments,
00:25:10.650 --> 00:25:12.690
I appreciate both of
you, and Jeremy, thanks.
00:25:12.690 --> 00:25:15.620
I appreciate your update,
and thank you to all the staff.
00:25:15.620 --> 00:25:18.060
I know there's been some
late nights and long hours,
00:25:18.060 --> 00:25:20.950
especially last week, and
we're probably not quite finished
00:25:20.950 --> 00:25:22.640
with the late nights and long hours.
00:25:22.640 --> 00:25:26.160
But, I think it's been
important that we've come
00:25:26.160 --> 00:25:29.010
with meaningful solutions,
and I appreciate that.
00:25:29.010 --> 00:25:31.270
It sounds like we're, some of the ideas
00:25:31.270 --> 00:25:33.060
that we suggested are moving forward,
00:25:33.060 --> 00:25:34.850
and I look forward to continuing working
00:25:34.850 --> 00:25:37.820
with the legislature in
the next three, four weeks.
00:25:37.820 --> 00:25:41.250
Hopefully they get to go
home and see it through,
00:25:41.250 --> 00:25:44.820
because I think we definitely
need something specific
00:25:44.820 --> 00:25:49.820
that happens after the storm
and it needs to be thoughtful
00:25:49.820 --> 00:25:52.710
for customers and
consumers going forward.
00:25:52.710 --> 00:25:55.190
And, I too am concerned,
Commissioner Christian,
00:25:55.190 --> 00:25:59.560
about making sure that our
customers and consumers
00:25:59.560 --> 00:26:02.650
are protected, I think
they've been a priority
00:26:02.650 --> 00:26:06.250
from, at least, this agency
through this whole process.
00:26:06.250 --> 00:26:09.310
And, I wanna make sure
that we don't see unreasonably
00:26:09.310 --> 00:26:12.069
high gas bills as well going forward.
00:26:12.069 --> 00:26:15.650
The gas was delivered,
we appreciate the job
00:26:15.650 --> 00:26:20.650
that gas utility companies did.
00:26:21.090 --> 00:26:25.680
And, when we had
2100 people offline is all,
00:26:25.680 --> 00:26:27.870
I think that's impressive,
but I don't want
00:26:27.870 --> 00:26:31.250
to make all of those
customers have to pay
00:26:31.250 --> 00:26:33.280
for high gas through the summer.
00:26:33.280 --> 00:26:35.430
So, I appreciate you highlighting that,
00:26:35.430 --> 00:26:37.923
and the last piece
that as this legislature
00:26:37.923 --> 00:26:40.760
begins to wrap up is, and we get
00:26:40.760 --> 00:26:42.724
some better direction hopefully.
00:26:42.724 --> 00:26:44.680
That we've all talked about,
00:26:44.680 --> 00:26:47.250
and I think we'll continue
to look at as an agency,
00:26:47.250 --> 00:26:49.430
has to do with the
gas curtailment order.
00:26:49.430 --> 00:26:51.520
I know that that's a
commitment I've made,
00:26:51.520 --> 00:26:53.594
and I think this agency
is made to make sure
00:26:53.594 --> 00:26:56.210
we look at it coming up forward,
00:26:56.210 --> 00:27:01.103
and have some modern,
real world priorities.
00:27:01.103 --> 00:27:05.020
Because the world's
changed a lot since 1972, '73,
00:27:05.020 --> 00:27:08.560
since we've done it, so I
know that our work will continue
00:27:08.560 --> 00:27:10.750
even after the legislature is done.
00:27:10.750 --> 00:27:13.490
So, I appreciate it, Jeremy,
thank you for the update.
00:27:13.490 --> 00:27:15.980
And, if there's any other questions
00:27:15.980 --> 00:27:17.630
or comments, I'll be glad for that.
00:27:17.630 --> 00:27:20.710
Madam Chairman, I do
have one question for Jeremy.
00:27:20.710 --> 00:27:25.260
Jeremy, under that HB1520
securitization, would that
00:27:25.260 --> 00:27:29.800
be retroactive if it were
passed on to the consumer.
00:27:29.800 --> 00:27:32.684
I know that some of
those bills have already hit,
00:27:32.684 --> 00:27:36.700
and I think some of those have
already been sent out to some
00:27:36.700 --> 00:27:41.020
of the natural gas
utilization customers.
00:27:41.020 --> 00:27:43.570
Will that be something that
would be retroactive for them,
00:27:43.570 --> 00:27:46.890
to not have to pay an abnormal cost,
00:27:46.890 --> 00:27:49.286
and spread it out over time?
00:27:49.286 --> 00:27:51.225
Commissioner Wright,
thank you for your question.
00:27:51.225 --> 00:27:56.040
1520 does not speak to
the bills that were assessed
00:27:56.040 --> 00:27:59.240
by utilities in March or April.
00:27:59.240 --> 00:28:00.846
What it does is that,
it creates a program
00:28:00.846 --> 00:28:05.846
that utilities may
apply to receive funds,
00:28:05.976 --> 00:28:08.190
and have those funds
dispersed from the Commission.
00:28:08.190 --> 00:28:12.340
Upon receiving those
funds, those bond proceeds,
00:28:12.340 --> 00:28:14.670
utilities can then lower their customers
00:28:14.670 --> 00:28:17.410
long-term gas bills, so
they're essentially going
00:28:17.410 --> 00:28:20.540
to amortize the payment
for gas over time,
00:28:20.540 --> 00:28:24.410
rather than issue high gas bills
00:28:24.410 --> 00:28:26.710
in the immediate future
to Texas customers.
00:28:26.710 --> 00:28:28.470
So, with effect moving forward,
00:28:28.470 --> 00:28:31.707
not something that's
happened since March 1st.
00:28:34.260 --> 00:28:35.490
Yes, sir.
00:28:35.490 --> 00:28:36.540
Okay, thank you.
00:28:36.540 --> 00:28:38.730
And, I do think,
Jeremy, that we
00:28:38.730 --> 00:28:40.770
as an agency had been working with
00:28:40.770 --> 00:28:43.980
those gas utility companies, trying to
00:28:43.980 --> 00:28:46.330
understand what their gas prices are.
00:28:46.330 --> 00:28:49.780
They've done filings with
us, and to see if there's
00:28:49.780 --> 00:28:52.740
an opportunity for them
to, as the legislature is trying
00:28:52.740 --> 00:28:55.400
to wrap up their work, to
delay some of those bills
00:28:55.400 --> 00:28:58.420
if possible, just because
we all appreciate
00:28:58.420 --> 00:29:00.720
those are some high
bills potentially to come.
00:29:03.060 --> 00:29:05.950
All right, thank you, are there
any questions or comments?
00:29:05.950 --> 00:29:08.420
Thank you, Jeremy, for the
update, I appreciate the work.
00:29:08.420 --> 00:29:10.870
I know we've got another
long few weeks left.
00:29:10.870 --> 00:29:13.130
But, I think we're gonna finish strong.
00:29:13.130 --> 00:29:14.417
So, I appreciate that.
00:29:14.417 --> 00:29:15.250
Thank you, Chairman.
All right,
00:29:15.250 --> 00:29:18.470
if there's no other
comments, questions, all right.
00:29:18.470 --> 00:29:20.570
This meeting in the Railroad
Commission is adjourned.
00:29:20.570 --> 00:29:23.774
Thank you all, and safe
travels, and send pictures
00:29:23.774 --> 00:29:25.813
of grand baby, we wanna see.
00:29:25.813 --> 00:29:26.646
Okay.
00:29:26.646 --> 00:29:29.519
(chuckles) Thank you.
Thanks guys.