This meeting of the Public Utility Commission will
come to order to consider matters that have been duly
posted with the Secretary of State of Texas for August
23, 2021.
We will now take up and consider docket number 52321,
application of the Electric Reliability Council of
Texas inc for a debt obligation under PURA Chapter
39 Subchapter M, and request for a good cause exception.
At this time, let me recognize, I'm joined by Commissioner
Lori Cobos and Commissioner Jimmy Glottfelty. And
at this time I'll hand the proceeding over to Judge.
Hunter Burkhalter. Judge? Good morning, Commissioners.
And I call to order docket number 52321 is a hearing
being held on March 23, 2021, and it's being presided
over by the Commission with my assistance. Commissioners,
we held a pre hearing conference this morning. We took
appearances at the pre hearing conference, but I'm
going to take appearances again just to help you
familiarize with who the parties are and who are the
faces associated with the party. So let's do that.
Let's start with ERCOT, please. Good morning, Commissioners.
Your honor. Ronn Moss and Elliott Clark for ERCOT.
We also have Chad Ceiling, who's the General Counsel
of ERCOT and Juliana Morehead, who is the Assistant.
General Counsel of ERCOT with us today. Great,
thank you. TIEC?
Thank you, your honor. Katie Coleman for TIEC, and with me today are Michael.
Macmillan and John Ross Hubbard.
Just Energy and associated companies. Good morning
your honor. Katherine Webb-King here for Just Energy.
NRG Energy inc. Good morning, your honor, Andrea Stover,
and with me is Christina Rollins, Patrick Leahy, and Landon Will
on behalf of NRG.
City of Garland?
Good morning your honor. Reed Barnes on behalf of the
city of Garland. And Mr Barnes, you're also appearing on behalf
of the city of Denton, City of Georgetown, the city of Lubbock.
Correct? That's correct. Thank you. Has anyone
from DC Energy Texas appeared? All right. How
about City of Austin, DBA Austin Energy? Good morning, your honor.
Thomas Mercado appearing on behalf of the city of Austin,
with (indistinct) for Austin.
Coalition of competitive reps?
I think that's Mr Huerta who must have stepped out
for a, there he is right there.
Mr huerta, you're just in time. You want to make an
appearance. Miguel Huerta, on behalf of the Coalition of Competative Reps.
Thank you. Lower Colorado River Authority and LCRA.
WSC Energy. Good morning, Lee Sebastian and Emily.
Jolly on behalf of LCRA.
Avid Grid Renewable. Is anyone here from them? Excelon.
Energy? Sorry, Excelon Generation Company. Good morning
your honor, Megan Griffiths on behalf of Excelon and.
Constellation new energy. Anyone here from Shell?
Gexa Energy LP. Good morning your honor, Tracey Davis
on behalf of Gexa Energy.
Energy Training Institute?
City of Denton. We already covered Denton. Okay BP.
Energy company?
EDF Energy services LLC. Good morning Commissioners, your
honor. James Guy on behalf of BDS Energy services. Citigroup?
Texas retail energy?
Luminant?
Good morning, your honor Commissioners. Bill Moore on
behalf of Luminant Energy. I'm joined by Melissa
Gilbert. Tanaska Power Services and associated companies?
Good morning, your honor Commissioners. Barton Ford
and Tim Mueller on behalf of the Tamaska Power services
company. Thank you. Is anyone here from Advanced Power.
Alliance?
Golden Spread Electric Co op? Thank you. Your Honor. Morning.
Commissioners. Todd Kimbrough, representing Gold Spread.
TexBo Power. Good morning again, James Guy on
of TexBo Power. Anyone here from Saracen.
Energy West?
TerraForm Power Operating? Carrie Collier Brown and
Matt Art for TerraForm. Thank you. And you're also
appearing on behalf of NL Trading North America.
Yes, your honor. Thank you. Calpine Corporation? Morning
your honor. Good morning Commissioners. Chris Reader
and joined by my firm colleague Miguel Suazo for Calpine.
Corporation and also Diana Woodman Hammet who is an
attorney with Calpine. Thank you. Rayburn Country Electric.
Co op?
Good morning Commissioners, your honor. Emma Hand, Justin.
Mirrorball, and Grace Dixon on behalf of Rayburn Country.
Electric Co op. East Texas Electric Co op? Good morning
your honors, Commissioner, Jacob Lawler for East Texas.
Electric Cooperative. Office of Public utility Council?
Good morning, your honor, Commissioners, Adam Goodland
with the Office of public utility counsel.
NG resources and NG Energy marketing. Good
morning, your honor Stephen Mack for NG. South Texas.
Electric co op? Good morning Carlos Carrasco and Jennifer.
Littlefield for STEC.
Morgan Stanley Capital Group. Anyone here?
Lightal Inc?
RWE Renewable Americas? Morning, Stephanie Sparks for RWE.
Renewables.
Texas Treasury Safe Safekeeping Trust Company? Morning
Whitney Blanton and Mike Rice. You can call me after
Texas Treasury Safety and Trust. AEP Energy Partners?
And Commission staff? Floyd Walker and Eleanor D'Ambrosio
on behalf of Commission staff. Welcome to you all.
Is there anybody who's shown up who I have not identified?
As I mentioned earlier, Commission, we held a pre-
hearing conference. We have admitted all of the exhibits.
You should have all the exhibits in front of you. We've
sworn in all the witnesses, unless you have any questions,
we're ready to proceed to opening statements. Jude, just as
a protocol adopted on the outset. If we could build
in break times for both the transcription and the audience.
Just as a matter of course. Absolutely. My plan, my
thought, and whatever is your pleasure. My thought
is we would take a midmorning break, a lunch break, and
I know that we have to take at least one break at
three in the afternoon each day so the court reporters
can switch out folks. But please don't
be shy about we can take a break anytime the need arises.
As long as you've got a plan I good. Alright, opening
statements. ERCOT, would you like to make an opening statement?
Yes, your honor. Thank you. Good morning Commissioners.
My name is Ron Moss and along with my colleague Elliott
Clark, we represent ERCOT. As I told you earlier, we
also have Chad Seely, the general counsel and Julianne.
Moorehead, the assistant general counsel, here with
us today. That's because this is an important case
for ERCOT and for the market as a whole. And we appreciate
the Commission setting aside the time to hear this
case. As you know, during the 87th regular session,
the legislature passed and the Governor signed, House Bill.
Bill 4492 which directed ERCOT to expeditiously
file two separate applications or debt obligation orders
that would allow us to finance amounts.
And those amounts of course are associated with the
winter storm event. Now we are seeking Commission approval
in this case of a debt obligation under Subchapter.
M of PURA Chapter 39. Tomorrow we're going to present
our case for Subchapter N under Chapter 39 for
our, avoid confusing ourselves, we refer to sometimes
as the Main docket and the Nebraska docket. So if you
hear us saying that it's not because we'd rather be
somewhere else because those are the ways that we are
referring to these two cases. In this main docket,
ERCOT is seeking Commission approval to secure $800 million
of default balanced financing for the Texas Comptroller.
Now the proceeds of that financing will be used to
pay the market participants who were short paid for
the energy and ancillary services they provided during
what we call the period of emergency. Those proceeds
will also allow ERCOT to replenish the congestion revenue
rights funds that ERCOT used shortly after the winter
storm to pay those short paid market participants. Paying
the money to the short paid market participants will
instill confidence in the market and will preserve
the integrity of market, and it will also inject much needed
liquidity. No party in this case opposes their ERCOTs
request for a debt obligation order. In fact, most
affirmatively support it. There are, however, a couple
of contested issues and I want to give you ERCOTs
perspective on those briefly. The first issue is the
priority in which the proceeds of the $800 million
of debt of default balanced financing should
be used. ERCOT has proposed that the 1st $50 million or so.
It's not exact. But for about $50 million dollars be reserved to pay off ERCOTs
existing debt if that becomes necessary. And I'll talk
about that more in just a moment and there's gonna
be some other costs associated with implementing the
debt obligation order. Those would be reserved as well.
ERCOT's second priority is to pay approximately $243
million dollars to the short paid market participants
who were short paid by the competitive wholesale market
participants who left the market to the words, the mainly
retail electric providers who have defaulted and been
terminated as market participants and then the remaining
proceeds would be used to replenish the congestion
revenue right accounts. Now, some of the parties don't
agree with ERCOTs priority. Some propose that the.
Commission require ERCOT to first pay the wholesale
market participants that were short paid. Others want
the Commission to require ERCOT to prioritize the replenishment
of the congestion revenue rights funds. But the priority
that ERCOT is proposing is not just a matter of our
own preference. And let me explain why, what the, what
the other parties may not have understood at the time
they filed their testimony and their statements of
position is that ERCOT has existing debt covenants
that do not allow it to issue more debt without the
consent of its lenders. And so if ERCOT or the special
purpose entity that we are proposing to create as part
of this case were to issue more debt without that consent,
we could be in default of our existing debt instruments.
So if ERCOT cannot reserve that 1st $50 million dollars
to pay off its existing debt, then it just can't borrow
the $800 million dollars at all. Now to be clear, we're
going to ask the lenders to allow us to borrow this
money. And if we get consent, then that solves that
problem, this $50 million dollars will then be used to
replenish the congestion revenue rights auction proceeds.
But if we don't get that money that, if we don't, I'm sorry
if we don't get that consent, then we can't borrow
the money. It's that simple. It's a prerequisite to
us borrowing the money. And by the way, we won't
be in a position to ask for that consent until the
closing of the debt facility in the Nebraska docket.
And that's why we can't just go ask for it now. And
I don't know that, I can't explain the details of that
to you. But I'm sure Mr Taylor, our chief financial
officer, can when he's up here. ERCOT's second priority
for the proceeds is to pay the remaining $243 million
dollars that is owed to the market. The market participants
who were short paid by the competitive wholesale market
participants for the period of emergency. These market
participants have already waited approximately six
months for payment. And if market participants don't
know when they will be paid or even if they will be
paid, we believe it undermines confidence in the market.
That's why we have put this as our second priority.
Our third priority, although this is very important,
our third priority is the replenishment of the congestion
revenue rights auction funds that ERCOT used shortly
after the winter storm to pay these short hold market
participants. These funds need to be replenished so
that we can eventually pay out these conjectures and
revenue right funds to market participants who are
entitled to those. The other major issue from ERCOTs
perspective is to Tanaska's request that ERCOT require
load serving entities and resource entities to be ultimately
responsible for paying the default charges that we're
going to be assessing rather than imposing that burden
on qualified scheduling (indistinct). Now, as you probably
know, ERCOT financially interacts only with qualified
scheduling entities. Some people refer to as QSEs
and congestion revenue rights account holders. ERCOT
does not financially interact with load serving entities
and it does not financially interact with resource
entities. If the Commission were to require ERCOT
to hold the load serving entities responsible for
these default charges, I mean, directly responsible,
we go and we charge them directly or we kick
them out of the market when they don't pay, ERCOT
would have to develop new billing processes and new
software to do that because that's not what we're set
up to do right now. We would also need to collect collateral
from the load resource, the load serving entities and
the resource entities, which we don't currently do.
And if ERCOT has to change its normal settlement and
billing processes that could lead to a delay in the
financing of this and it could lead to higher costs.
And again, our witnesses will be here to answer your
questions about those things. If you have some. From.
ERCOT's perspective, there's simply no need to treat
the default charges any differently from all of the
other charges that ERCOT now assesses to market
participants and we believe that qualified scheduling
entities have tools at their disposal if they're concerned
about defaults by their own load serving entities or
resource entities. So it's unclear why ERCOT should
have to change its process or incur some higher costs
for that.
ERCOT has presented written direct rebuttal testimony
on these two issues and our witnesses will be here
this morning to present, to answer any questions the.
Commissioners might have about these or other issues.
We also intend to address this in post hearing briefing.
Our witnesses today will be Sean Taylor who is our.
ERCOT's Vice President, Chief Financial Officer, and Mr Kenan.
Ogelman, who is ERCOT's Vice President of commercial.
Operations. We're also going to bring to you Charles.
Atkins, who's a financial advisor for ERCOT, he's
a senior adviser to Credit Suites as well. Mr Atkins
has been involved in a number of securitizations over
his career, including several before this Commission.
In this case, he has counseled ERCOT about the best
way to structure the debt financing to achieve the
lowest financing costs. As the Commission knows this
proceeding and the Nebraska proceeding, we're gonna
be talking about tomorrow are the first ISO securitizations
to ever occur as far as we know. So writing on a
blank slate here to something to some extent. Finally.
ERCOT has been working diligently with the comptroller
on indicative terms that will help achieve the lowest
financing costs. We have Mike Reisig who is the CEO
of a Texas, Treasury Safety and Trust Company here
today to answer any questions from you. Again, we appreciate
the time that you have set aside to hear this case.
We request approval of that obligation order allows.
ERCOT to pay default balanced financing in the
amount of $800 million. Thank you.
Thank you. Commissioners, we worked out of order by which
the parties are going to appear so I'm just gonna go
down that list and let me know if you wish to make
an opening statement. Calpine?
I do your honor. Should I just go over there? Yes,
please. If you're inclined to make an opening statement
work your way forward to one of the microphones.
Thank you your honor. Thank you Commissioners. Chris.
Reader again on behalf of Calpine, joined with my colleagues
as well today, very grateful for this opportunity to
submit evidence, to submit our views to you. We feel
like this proceeding and the one for tomorrow are
very critical in the overall context of moving forward
from the winter storm, restoring confidence, restoring
liquidity in our markets and helping customers. I think
most of you have at least some familiarity with Calpine.
We're very happy to be able to participate in Commission
proceedings such as this. Calpine is a generator, a
longtime generator in the Texas market, currently operating
and owning 12 generation facilities, and employing over
1000 personnel throughout those facilities. And is
also active as qualifying scheduling entity as the
power marketer. Calpine's history in the Texas
market as active in the generation side dates back
to the 1990s with the initial development of
cogeneration facilities and has expanded since then.
Calpine has in the ensuing years established
a substantial retail market presence and has two
principal load serving entities, retail electric providers,
that together serve almost over 168,000 customers.
So Calpine's interest and it's stake in our industry
is expansive and covers just about all facets of the
operation of our Texas electric industry. And to that
end, it's been very important that we feel like
to protect not only that interest but to also advance
the interest and the stake of customers coming
out of the storm. And also in dealing with kind of
the restructuring if you will of our electic markets
and our system to advocate if you will kind of on their
behalf. And so our principal recommendation, our
overarching policy recommendations both here and in
the next docket is that the Commission should look
first to prioritize what will be of the most benefit
to customers. And in particular those customers
who directly bore at least the financial brunt of the
storm and the resulting conditions on
the electric system. We feel like that's something
that the Commission again should look first to in
making decisions about the structuring of the debt
obligation orders and charges and so forth. And so
to that end we've advanced testimony, we have with
us today and in the next case, Steve Schlemmer,
excuse me, who is the Senior Vice President of Government
and Regulatory Affairs for Calpine, who's been with
the company since 2006. And he again has submitted
testimony here today. We feel like for purposes
of the what Mr Moss is calling the main docket that
advancing the interests of customers is best accomplished
through adopting ERCOTs recommendations and approving
its its application. Mr Schlemmer's testimony talks about
some key concerns that we have and how we feel like
those advance the interests of customers as well as
most effectively mitigating damage to our markets
and balancing those interests and making them work together.
Throughout the hearing we also are going to advance
the recommendation to you in particular that ERCOT's
view about the allocation of the bond proceeds is most
reasonably balanced through ERCOT's proposal, which
we feel like strikes a good balance between getting
some immediate relief to short paid market participants.
So something that has an immediate impact and addresses
not only investor confidence as Mr Moss pointed out
but also addresses liquidity issues as well, which
is something that ERCOT's rebuttal testimony has focused
on. And as I say, it reasonably balances between
that concern as well as replenishing the balance in
the CRR auction receipts. We feel like this
most reasonably implements House Bill 4492's
statements and requirements that the financing
be one that speaks to and accomplishes both of these
objectives. We are going to have some questions at
the appropriate time concerning the specifics by which
ERCOT would propose to allocate proceeds to short
pay entities, just want to get some clarity about
exactly how that would be distributed. So my colleague,
Mr Suazo, will be here to to ask some of those. Otherwise
like yourselves will be listening to the testimony
and we'll be presenting our views on those issues
and perhaps others as they develop during our briefing.
So again, we're very grateful for the opportunity
to be here. We're very thankful for your attention
to these critically important matters and and look
to see you soon. Thank you Mr. Guy on behalf of
EDF, do you wish to make an opening statement. Good morning, your honor. Thanks
for the opportunity to make an opening statement.
EDF will reserve it's time for questioning witnesses. Thank
you. NL? Your honor, no opening statement this
time from NL. Thank you. Excelon? No opening statement.
Your honor. Thank you. Luminant? Thank you your honor.
Good morning, your honor. Commissioners. Bill Moore for
Luminant Energy. I won't use it much of your time.
I just want to express our appreciation for the work
that you're doing, these cases are are really important.
They're really about providing relief to folks. The
companies that were impacted by the storm. They're
requiring you, I know to dive into a lot of testimony
a lot of arguments in a short period of time. It's
not easy. So we just want to say very much appreciate
the work that you're doing. We appreciate the expedited
way in what you're doing it. Thank you for the opportunity
to make an opening statement.
Thank you. Mr Gore. NRG?
Good morning, your honor and Commissioners.
Thank you so much. Andrea Stober on behalf of NRG
NRG appreciates the opportunity to participate in
the hearing and provide you with our perspective as
I think Mr reader and Mr Moore from Calpine and Luminant
indicated, we also think this is a very important case
and we appreciate all the work that ERCOT has done
and all the work that the Commission has to do to process
these applications. You may be aware, but NRG
has power generation facilities as well as retail electric
providers representing millions of customers across
the state of Texasm and we you know
have a lot of confidence in the state of the market
but these processes will help continue to make sure
that our market can operate as it has in the past
and serve customers on an ongoing basis. We believe
that ERCOTs application along with the clarifications
that's provided and rebuttal provide a basis for
the Commission to be able to issue a debt obligation
order that is in the public interest. With me here
today is um Mr Bill Barnes, who is the senior director
of regulatory affairs. Provided testimony in this case.
Our understanding is that there aren't parties
that have any cross examination questions for him,
but he's available to you should you have any questions
as the preceding goes along and thank you again.
Thank you. Rayburn Country?
Your honor. We have no opening statement. We will reserve
our time. Thank you. Tanaska?
Good morning again, everyone, my name is Martin Ford,
I'm here representing TanaskaPower Services Company.
And during the appearances in the pre hearing conference
I made a point that Tanaska Power services company
is not the whole of Tanaska. Many of you know that
Tanaska does a lot of things that the ERCOT market.
We've been here a very long time and we develop power
plants. But I'm here today to talk about a subject
that hasn't been talked about enough and maybe it wasn't
talked about enough during the legislative session
and that is the role of qualified service entities,
scheduling entities, excuse me. And in particular the role of
those WSCs that are independents, meaning that they
primarily represent loads and generators that do not
have in-house QSEs. Many of the large generators
and large loads have their own QSEs. Some choose to go
with the third party and Tanaska is one of those third
parties. So in addition to doing everything that Tanaska
does generally TanaskaPower Services Company
which is headquartered in Texas as an independent QSC
business. Just to round out the affiliation connection
which will be maybe more relevant tomorrow than today
but just to give you the full picture TPS
and I'll try to refer to Tanaska Power Sources
Company as TPS, just for clarity. TPS's ultimate parent
owns equity interests in three power plants in ERCOT.
Two of those equity interest, these are plants that
have been around a long time. Two of those equity interests
are sort of in the ballpark about 50% with other investors
in there and one is is much less than 50%. So when
you get to affiliation issues, keep in mind that there
are QSCs out there and LSEs cause Tanaska does
that as well, who have these sort of watered down affiliations
with generators.
The business model for the independent QSC business
is that we perform a highly technical service, both
in terms of operations or in terms of scheduling, not
the physical operations, but we work on scheduling
generation and load. We represent, I think almost
maybe up to 100 generating units from people who choose
to use an independent, we do the scheduling for that.
It requires a lot of investment and infrastructure, it requires
a lot of training and that's why some parties choose
to let an independent do it because they prefer to
spend their brain power
and their investment on their business rather than
this highly technical interface that is between the
loads and generators. On the one hand, and ERCOT on
the other hand. So we do that is both the scheduling
and also the financial transactions. We have loads
we have lots of generators, we settle financially with
them and then we settle on a net basis financially
with ERCOT. So if the generators in a particular
period are entitled 50 million and the loads are paying
20 million, then from ERCOTs perspective they just
see a net 30 million and that's how we settle
on a net basis. One thing I want to say, I'm
not quite at the outset, but I'll say it close to the
outset is my mission this morning is to show you
just how cooperative Tanaska Power services wants
to be in helping for the securitization to go forward.
We agree, we agree quite a bit with what ERCOT has
said in its testimony, we agree that ERCOT is not
in a position to do the billing and collection of the
default charges for this docket, the 21 docket, and they're
not in a position to do the billing and collection
of the upload charges in the 52322 docket.
So we are ready willing and able to do that. That's
what we're set up to do. It is very similar to what
we already do in settling ERCOTs charges in the market.
So it's not exactly the same. There are some differences
but it's very similar and it makes complete sense for
the QSEs Including independent QSEs to be the parties
that interfaces with loads and the generators and handles
the assessment of the default charges and handles
the money going back and forth. And no doubt about
that. It may be theoretically possible for ERCOT to
do it but it makes no sense whatever. So our only
point about and we think we can do, we think we can
do a fine job of that. As far as I know, we
performed flawlessly during the winter event, all of
our scheduling, all the money going back and forth
that was a tremendous burden on everyone in the market.
Performing all of their functions including on the QSEs.
Had no idea that in return for the modest monthly
fee that we were going to get involved in handling
billions of dollars over a few days going back and
forth and doing this settlement. And it was quite quite
a strain as it was on everyone in the market. But
you know this is a service business, we're not out
there wheeling and dealing and managing for our own
account and we want to provide that service here. The
problem that we have is this, we don't think that what
ERCOT has proposed complies with the statute.
In the case of the default charges in Subchapter N
what the statute says is that the those charges must
be allocated to all market participants. And I don't
think that anyone's intent in the legislature was
that 100% of the default charges would be allocated
to a service provider playing the middle man role.
I think it was pretty clear that the intent was in
the actual words say that it's all market participants
Meaning, it would be the generators and the loads separately
charges payable by congestion revenue rights participants
which are not involved in the QSC issue. But there
is a third category of people who pay the charges.
So our understanding is that while it is the best practical
solution for the QSEs to play the role that
they play, that it's not, it doesn't comply with the
statute that ERCOT assess the charges to all market
participants and it creates an unreasonable risk to
the middle man to have all of that liability which
we're talking about, just to do a back of the envelope
we're talking about $800 million worth of bonds, interest
on top of that. And you look at the market share of
a company like like Tanaska. If it were Tps if it continues
its probably easily $100 million over 30 years.
So we don't you know we are uncomfortable with having
that liability rested upon us as a QSE. And as important,
it simply doesn't comply with the requirement of the
statute that ERCOT assess this on all market participants.
And in the case of the N docket, it's a very
similar issue. There says that ERCOT will assess to
load serving entities and a QSC, as QSC is not a load
serving entity. We do have one or two loads serving
entities that are affiliated behind the QSC where we
have a large industrial customers are market really
mostly deal with large industrial customers and generators.
So we do happen to have an affiliate that is in LSE
but the statute says that the assessment must be to
LSEs And so we think that it simply doesn't
comply with the statue. We have suggested
I mentioned that our goal is to show how cooperative
we can be. This is a problem that should be fixable.
And we suggested in our statement of position that
the way to fix it is to ask the QSEs
to act in a function as collection agents or administrative
agent for ERCOT. And in fact ERCOT itself as is clear
in Mr Atkins testimony is itself a collection agent.
The party that's entitled to receive the money is the
party that owns owns this property. This right to receive
the money is actually the special purpose issue of
bonds. And it's clear from the Atkins testimony. And
I think Mr Ogelman's testimony itself that ERCOT
itself is merely acting as a servicer or collection
agents. So we said we will do that,
make us a collection agent. We'll do, we will determine
the assessment, how much it is, we will collect that and
if for some reason will not be able to collect that,
then your remedy is not that the QSE might over $100
million dollars over time, but rather that the market
participants who has defaulted will be excluded from
participating in ERCOT until they fix
this and which is we think a sufficient remedy to
make sure that people don't default and we're not expecting,
we're not expecting defaults. We had
some discussion with ERCOT about that. They're
with ERCOT's counsel about that in a phone call and
they weren't comfortable with that. We suggested a
different solution which we haven't completed, completed
the discussion on and so hopefully one of those two
solutions will we'll work here. But again, we're here
to try to fix the problem and I'm confident
that we'll be able to do that. And I guess that's
what I wanted to say. We really, we think that
solving this problem should not be, should not require
a lot of attention of the Commission, that should be
one of the user problems to solve, some of the allocation
issues and ending issues, et cetera, and try to get
this fixed as soon as possible.
Thank you. TexBo. TexBo Power LC? No opening statements.
Your honor. Thank you. TIEC? No thank you, your honor. Thank you. LCRA. No opening
statement. E-Tech statement? No opening statement, your honor. Thank you.
I guess that's Golden Spread. Yes, your honor, just a
very brief statement.
Morning, Commissioners. As I introduced myself earlier
I'm Todd Kimbrough and I'm here representing Golden
Spread this morning. Golden Spread, like I think most
of the rooms supports the securitization of the full
$800 million dollars permitted under Subchapter M.
We agree mostly with what ERCOT is proposing,
but Golden Spread does ask as the allocation of the proceeds
is done, thattwo fundamental principles be kept in
mind. First that it recognize that co ops, communities,
and for profit entities all participated in the wholesale
market and are all dealing with the fallout of the
storm. And then secondly, that as a matter of policy
the Commission should not differentiate one wholesale
market participant from another. As Mr Moss indicated
earlier with the allocation plan that's sitting in
your application, the intent is to address the short
pay. That was really attributable to the competitive
reps. It doesn't address the other portions of the
market. Now for purposes of of implementation Golden
Spread offered a solution. Just moving the full
$800 million dollars to replenish the CRR accounts.
But we also recognize that's not the only viable solution
with those two criteria that I just talked about.
For instance we could in theory keep the allocations
proposed by ERCOT but instead of defining it so that
it only attributes or matches to those terminated rep
entities, it could be prorated across the wholesale
default generally. That is viable. There are a multitude
of other solutions that are of that sort. I'd like
to use this statement just very briefly again to just
emphasize, we want the success of this $800 million securitization.
It's good for the market. It's good for our generators. Golden Spread got short paid too. But we do ask
that the Commission implement and apply the proceeds
in a way that does not distinguish one flavor of market
participants from another. Thank you. Thank you. South
Texas Electric CoOp? No opening statment. City of austin?
No opening statement. The city of Lubbock? No opening statement.
City of Seguin?
OPUC? No opening statement, your honor. All right
before I turned the Commission staff, is there any
other party I haven't identified who wishes to make
an open statement.
Okay, thank you, Commission staff. Brief opening, your honor.
Floyd Walker with Elenaor Diambrosia on behalf of Commission
staff. I just want to note that the Commission
had lots of options in how to issue a debt financing
order. But the one guiding principle should be the
integrity of the entire wholesale market. That's bigger
than one market participant, bigger than a class of
market participants. And we believe that ERCOT's proposal is
a reasonable way to do that. Thank you.
Thank you.
Commissioners, we're ready to go to witness examination
if you are. Please do. Okay, ERCOT, please proceed
At this time., we're going to call Sean Taylor, who's
the Chief Financial Officer and Kenan Ogelman who is
the Vice President of Commercial Operations with the
Judge's kind permission, we have asked them to come up
with our panel because there's no clear demarcation
between their, between how this affected each of their
responsibilities. And we think it will be easier for
you if, and and easier if we're going to understand
what they're talking about, if they can refer questions
to each other and the parties have agreed to that,
so we're going to bring up Mr Ogelman and Mr Taylor
right now.
And we have two seats set aside right there for you
side by side there.
All witnesses have already been sworn in. You are sworn
in.
Mr Ogelman? Would you state your name for the
record, please? Kenan Ogelman. What is your position at ERCOT?
Vice president of Commercial Operations. All right.
Mr Taylor, would you state your name for the record?
Sean Taylor. What is your position that ERCOT?
Vice President and Chief Financial Officer. Do you have
in front of you your direct rebuttal testimony, Mr
Taylor? Yes. Mr Ogelman ? Do you have in front of you
your directed rebuttal testimony? Yes. At this time, your honor,
we tender Mr Ogelman and Mr Taylor for cross examination.
Thank you.
All right. I'm just gonna go down the list and if you've
got a cross examination just come on up. Calpine.
And would you state your name please, sir? I'm sorry.
Yes. Good morning, your honor and Commissioners.
My name is Miguel Suazo. And with Hush Blackwell and
we're here today on behalf of Calpine.
And my first set of questions are intended for Mr Ogelman
I'm saying that correctly? Yes.
Do you recall ERCOTs responses to the Lower Colorado
River Authority's 2nd set of RFIs?
I generally do. Okay and that's fine. Do you recall
preparing the RFIs to their questions? Yes.
Okay. So I want to talk to you briefly about LCRA 2-1,
that you did help prepare. And that was related
to a question from Austin Energy's 1-1. Which states that QSEs
or CR account holder that was short paid
at any time for activity that occurred during the period
of emergency or receive a prorated share of those funds
and what I'm particularly interested in are the last
two sentences which I can read to you from that because
I want to clarify something for the record that was
a bit confusing to me and to my client. The last two
lines of that RFI say that the payments will be
allocated to each eligible market participant on applicable
invoice dates on a pro rata basis. A market participants
pro rata share will be calculated by dividing the
short paid amount still owed to the market participants
for the invoice by the total short paid amount owed
to all market participants for the invoice date.
Your honor. If he's gonna read from our response, can we
ask
the witness be allowed to see the response he's reading
from? That's fair. And I have I have that
to share with you if it helps you.
Do you have a copy for me as well? I don't, I
thought there was multiple copies.
You need some time? Go ahead. Okay. So I'd
like to clarify the denominator value proposed by your
formula and I just have to short questions about that.
Will the total short paid value exclude short paid
amounts owed to Rayburn and Brazos? Or will the value
be calculated based on the total percentages, including
Rayburn and Brazos? If Rayburn is Brazos owe, are
owed monies, it's possible that they have resources
that did operate during the storm. They would get a
credit against the amount they owe ERCOT. That is
the way we expect that to play out. Okay, that's
helpful. Thank you. So one follow up there with respect
to the financing proceed disbursements. Will they be
made sequentially, meaning the pro rata share of the
market participants owed amount by invoice date or
will the invoice dates be combined and the payments
made pro rata?
So I need to think through that question, one more
time, would you ask that again? And maybe I can rephrase it better just
because it's it is kind of hard to hit your arms wrapped
around. With respect to the financing proceed disbursements
that are made thereafter, are they going to be
made sequentially, mean by date that they were incurred,
meaning the pro rata share of the MP's owed amount by
by the invoice date? Or will the invoice dates be
combined and the payments will then be made pro rata,
essentially all together? My recollection of that
is our proposal is to do it by invoice date.
Thank you. I think that's really helpful. That's just
one of the questions we had as we're reading through
your direct and rebuttal. And my second set of questions
are for you, Mr taylor. But since you all are in a
panel and you can clarify for the record, I think
that'd be helpful. So I would like to clarify the sequence
of payments and the amounts that you propose.
I wasn't able to follow the way you've laid out as
clearly as I would have liked. So I wanna start with
first you say that the Commission should pay down
the costs of the debt obligation, is that correct? Yes,
that's to the point that was raised (indistinct) testimony?
And that's because if you did not do that, then
ERCOT would be in default on its obligations? Correct, (indistinct).
Okay. So then second you say that the Commission should
improve payments to short paid MPs? Is that right?
The second is the short payments by market participants.
Okay. And you preserve that because it's ERCOT's
position that that more greatly preserves the integrity
of the market and restores liquidity? More so
than replenishing the CRRs.
More so than fully replenishing the CRRs.
And is it your testimony that the total competitive default
short pay amount, in other words, excluding the amounts
of Brazos and Rayburn is 419 million? For the period
of emergency, 419 million. Okay.
And the amount that you propose be paid to short
paid market participants is 243 million. Do I have
that right, correct? (indistinct) Okay. And that's a change
from your direct testimony where you propose 318 million
be paid to short paid MPs. Is that right? That is correct.
Okay. And the 243 because there was 176 million that
was already paid to the short paid MPs. That was
because it was already paid to the shortbread MPs
from the CRRs, right? Correct. Okay.
So the 418 million is attributable to
non Brazos and non Rayburn short pay defaults,
is that right? 419 million, yes. Okay.
So 176 million paid to the MPs previously from the
CRRs, that needs to be reimbursed to the CRR fund,
is that correct? Correct. Ok. And then after that, there's
600 million that ERCOT previously tapped from the
CCRs to cover their short paid amounts?
Let me make sure I understand what you're saying.
So we originally tapped, to use your terminology, 100 million dollars.
We've applied $25 million 225 invoice due date. So if I
look at the map on page 18 of my rebuttal testimony at table
ST-2, I believe this is what you're referring to. Yes, sir.
Okay and so then yes when you consider that 200
million that was not attributed to Rayburn or Brazos, then we
end up with the result of 600 is the difference between
the 800 million and the 200 million? Is that your question?
Yes. And then just to follow up on that that was from
the tapping of the CRRs, that account to
cover those short paid amounts? Correct. We used
100 million to cover short paid amounts temporarily.
200 million of that we're attributing in this calculation
to the competitive wholesale market participants. And 600 million
were attributed to Brazos. Okay that was my next question.
The bulk of that is attributable to Brazos.
And then one last question on this component because
I think now we have a good sense of how
these are all allocated. The financing will take care
of some of that and that will be approximately 331
million. Is that right? That amount's to be determined.
Okay. How will that be determined? Depends on the amounts
that are necessary to implement the debt obligation
order including the potential repayment, whatever that
total amount is plus the 419 would be the amount that
we've take, we contribute to those two components.
Those two amount from the 800 million remain themselves
in the remainder that I believe is the amount that
you're referencing as 300 or so million. That's right. Okay, no,
that's helpful. One thing I wanted to ask you and
I guess I'm not sure which one of you is the best
since you appear a panel. I did intend to ask
you, Mr Taylor, so I'll give you first crack at it.
Did you have the chance to read Golden Spread's statement
of position in the docket? I don't recall, I'm sure I did.
Okay. Do you recall generally,
just generally their position is that they prioritize
paying crr revenue rights before mps?
If that's what they said. If that's what you're
saying. Okay, do you know if any congestion revenue
rights holders have actually been harmed as a result
of the crr fund balance being tapped?
As a result of the CRR funds being tapped. We
have not
we have had enough money in the CRR funds to pay
them out as they become due, is that your question?
Yes. So essentially CRR payment obligations have
been met to your knowledge? To date,Yes. Okay. And
is that because the CRRs, they get replenished essentially
on a rolling basis. Correct? There's a couple of components
to that so we do continue to receive crr monies in
and ERCOT may (indistinct) the balance of those amounts.
So when we get those moneys in assuming that we get
enough money in, more money than we are paying out,
yes it would roll as you're describing. That situation
does not exist, that's when we end up with a shortage
situation. So the CRR holders at least have the
opportunity to get paid because of how
that market works. But the mps are essentially still
waiting to get paid in perpetuity until this is decided?
I would say it's only working that way at this moment
in time. We're still under are required liquidity level
for the CRR account holders money. So that CRR
balance is lower than what is required by our standards
from a liquidity perspective. And what is the required balance?
Six months of repayment. Six months of repayment. Okay.
So if we were to stop receiving, to say another way,
if we were to stop receiving the new auction monies
in, in less than six months CRR will not be being paid.
That's helpful clarification. My client appreciates
your time here today. No further questions. Commissioners
and your honor. Thank you. Let's see. EDF? No questions, your honor.
Thank you. NL? No questions your honor. Excelon?
No questions, your honor. Luminant? No questions, your honor.
NRG? No questions, your honor. Rayburn?
No questions, your honor. Tanaska? No questions, your honor. TexBo?
No questions. TIEC? No your honor. LCRA. No questions . East Texas? No
question. East Texas? No questions, your honor. Golden
Spread? Thank you your honor.
Morning, Mr Taylor, Mr Ogelman. Good to see both of
you. I think the bulk of my questions are going
to be related to your rebuttal, Mr Taylor. You have
a copy of it there with you? I do. Excellent. Ask you
to turn to page 13 of it.
And specifically looking at lines four
through 7, do you see where you state it is my understanding
that PURA 39602 defines the default balance to include
amounts owed market by competitive wholesale market
participants, but not electric cooperatives. I do not
believe an electric cooperative that has not opted
into competition to be a competitive wholesale market
participant. Is that a correct reading your testimony?
Yes. And where you say opted into competition, does
that mean opted into retail customer choice?
No, my intent of this statement was simply to say
that my understanding as far as what was eligible for
the component of what has been determined as for $419
million. I'm sorry. Mr Taylor, I'm asking a very different
question I'm asking as the language there, where you
say, a cooperative that has not opted into competition.
Are you referring to the opting into retail competition?
No, I'm talking about competitive wholesale market participants.
Okay. How does one opt into competition?
How does one opt into competition? Do I have to take that one? Yes. So I'm sorry.
Mr Ogelman. This is Mr Taylor's testimony. So I'd much
prefer him answer this question. I'm afraid. I'm not
sure I understand. Well, your your testimony says I
do not believe an electric cooperative that has not
opted into competition to be a competitive wholesale
market participants. So I assume that when you wrote
those words, you had some notion for what you were
referring to when you said opted into competition.
And my question is, does that mean opting into retail
choice?
That was not the intent of my statement. Okay, so let me
ask you this then, as we sit today, do you believe
that there are cooperatives that are participants
in the competitive wholesale market of ERCOT.
Do I believe that there are, could you say it again, savings, please?
To your understanding are their electric cooperatives
in ERCOT that are participants in the competitive
wholesale market?
Yes. Okay. And so when I look then to your testimony
on lines four through seven, do we need to change that
last sentence and say that electric cooperative, that
there are electric co operatives who are members of
the competitive wholesale market of ERCOT.
Please say that again?
Again, looking at that last sentence where you
say that if a coop hasn't opted into competition, it's
not part of the competitive wholesale market. Can you
identify for me which cooperatives you believe are
participants in the competitive wholesale market of
ERCOT?
So all, everybody who is competing. And it who is in the wholesale market
participant is part of the competitive, I think I understand your point
now. Okay, So, can you answer the question? Yes.
So back to the beginning, when you're talking
about the competitive wholesale market participant than
it was that component of it that you were talking about.
The retail piece. Okay. So you're saying that you can't
be a competitive wholesale market participant as a
cooperative, absent opting into retail competition?
That's not what I'm trying to say. I'm getting lost. Please
help me understand. Okay, so,
my point of what I was trying to make with this before,
is that when I was taking into consideration the purpose
of 39602 and how the default balance was being divided, then
the amount that was my understanding and reading of
that was that the purpose was for the competitive
wholesale market participants to not include the electric
co operatives per that reading for (indistinct). That's my understanding of
the intent. So that is what, that is all I'm saying,
or attempting to say, which apparently is not done
very well. And and to your knowledge, does 39602, does
it actually say exclude cooperatives?
I don't believe to my knowledge, I don't believe 39602
says that. I believe earlier in the bill, it mentions,
earlier in 4492, it references electric cooperatives.
Can you point me to the language you're talking about?
Your honor if he could put the statue in
front of him, that would be helpful. I can give him
a copy of 44902, that's not a problem. But he seemed
to have an idea for what he was talking. Bear with
me, I'll get him a copy.
Your honor. May I approach? Yes. Thank you.
Do you have one for me? That was my crib sheet, because
I really didn't anticipate that it was going to need
that with him, but I believe it's staff exhibit 4
to the extent that it's already admitted into the record.
I'm a little worried about the time factor of having
him pour through the statute. Yes, and I am too, because
I know I only have a couple of minutes and so in the
interest of time. Mr Taylor,
let me ask you this.
Without looking at it in the context of 44902, is it
your general belief that co ops are competitive wholesale
market participants in ERCOT? Yes. Right. You're
aware that they participate in the day ahead Market
ancillary service market, etcetera? Yes. All right.
And to the extent that 44902 is supposed to be read
in the context of how ERCOT operates today. Would that
be a reasonable interpretation? Do you believe? Objection.
Asking for legal interpretation of a non lawyer witness.
Well, your honor, he opened the door, saying that he
read it in one way. I mean, if he's going to get
to, you know, talk about in one context, he's kind
of opened that door. Would you repeat your question? Sure.
To the extent that this Commission believes that the operation
of ERCOT for the past 20 years should be factored
into how the statute is interpreted. Do you believe
it reasonable for the for the Commission to read the
competitive wholesale market to include co operatives?
I'm gonna, overrule the objection, so you can go ahead and answer.
For my reading, if I'm understanding your question correctly
From my reading of 4492 when references the amounts
Sorry, I'm trying to remember which page.
And I'll withdraw the question because I know I'm limited
on time, your honor. I did very quickly also want to
ask both of you some questions related to the cross
you received from Calpine a moment ago about the CRR
auction proceeds. I believe, Mr Taylor, you spoke
to the issue of using incoming receipts to pay previous
obligations to see CRRs. Do you remember those questions from
Calpine? Yes. And you spoke about the issue that
comes if you don't continue to receive adequate revenues
or inflows, cash inflows from CRR auctions and
this may be a question for both of you, am I correct
that the revenues that have been coming in in the past
are likely to actually shrink to some degree as we
have less congestion and as some of the transmission
constraints are being reduced?
That's a viable option. And to that end if that were to play
out then that would exacerbate the shortage problem
you have in those CRR accounts as far as the lack of
prepaid crr account proceeds sitting in the account?
Correct. Okay, no further questions your honor. Thank
you.
Let's see here. That was Golden Spread. South Texas?
South Texas Electric CoOp?
City of Austin? No questions, your honor. City of Lubbock?
No questions, your honor. City of Seguin? OPUC? No questions, your honor.
Before I turn to Commission staff, anybody else that
I haven't identified? Commission staff? No questions
your honor. All right, thank you. Do you have any redirect, Mr Moss?
Just briefly, the last question that Mr Kimbrough
asked you about whether the congestion revenue rights
would
I'm sorry the congestion revenues would
diminish in the future. He asked the question to
both of you and Mr Ogelmen, I think you had something
to add to that. Yes, we've actually been following
the value of the auctions and they have not been going
down. Over the very recent history. So the hypothetical
is possible, but load and generation also grow on the
system and it's also entirely reasonable to expect
that congestion will form in other areas and we'll
have to build more transmission over time and the revenues
could stay stable or grow. So it's a reasonable hypothesis
but the opposite is also a distinct possibility and
I would want to make sure the other side of the coin
was made aware to the Commissioners.
That's all I have your honor. The only other
thing that I would add is
that if you would prefer it, if not that's fine too,
for the Commissioner's questions, Mr Atkins and Mr.
Reisig could join us as well if that would be more convenient.
As you know, there were no questions for them but we're
happy for them to come up now if the Commissioners
would like to have questions for either of them? And that
completes your redirect. Yes, it does. Okay, so Commissioners
that the parties had indicated ERCOT does have two
other witnesses. Mr Atkins and Mr Reisig.
Parties had no cross examination from them but we thought it
possible that you might have questions for them. So
why don't the two of you come up as well and Commissioners
if you have, before you do, do you all have questions for
any of the ERCOT witnesses?
1 question at this stage. In terms of default
on 50 million. Again, your proposed phase one of obligations.
If ERCOT, goes into default, what is the default
setting, how do we operate at that point? If we go
into default, then we have to repay the debt. And that is uplifted
throughout the system as per protocols already established?
It would be uplifted, necessarily uplifted
throughout the system. It would have to be a normal
course of business as it would be recovered through
the system administration be across time, we would have to
find a way to fund 50 million dollars-- Which is an uplift charge
right? We would have to approve an uplift amount through
the system administration fee?
Yes. You have to increase the system administration fee to
cover that.
That's all I had.
I have one question dealing with the allocation
of bond proceeds. Excuse me. I know you all, I read
into this that you all believe that your allocation
is the best way. Are the other ways harmful to the wholesale
market? Or do you think yours is just a
better way?
It's a matter of where you're, in my opinion, it's a matter
of where you're choosing to apply liquidity, whether
you're choosing as was referenced earlier, whether you're
choosing to apply liquidity to market participants
or to CRR account balance and which of those of liquidity
concerns are greatest and which you feel needs to be
replenished as far as whether it would be better or more harmful the market particpants
from a liquidity perspective. As far as how we have calculated
it out through the process of determining how to attribute
the $800 million dollars out. We feel this is the most
appropriate way and it is the fairest across all market
participants.
Do you think other methods would harm the wholesale
market in in the state? I believe they could.
If I might add, on the liquidity side, the
issue is that there are a set of market participants
that haven't been paid, but they could very easily
oew downstream costs for the energy that they produced.
So if you were to move everything into the crr account,
let's say, that exhausted all of the allocation which
there still will be some left. That would mean people
that were owed money would not get paid and they would
still have the obligation to pay those downstream costs.
So that is, I think from the liquidity standpoint, that
is something to weigh in your contemplation of the issues.
So just kind of spinning off that last
statement you also mentioned I believe in your testimony
that if you don't replenish the CRR auction fund
at some point there could also be liquidity issues.
Can you provide a little more information about that?
Certainly. So as Sean was pointing out we don't
even have the required six months amount in reserves
right now. So if scenarios played out where we weren't
getting money in or as much money in, there is a risk
that we would short pay the recipients of the CRR
auction revenues and that would cause, so if I'm
a load serving entity and I'm expecting this stream
of revenue and that didn't come in that would also
impact their liquidity and their ability to do business.
So that's why we try to strike this balance between
the two but we are absolutely concerned about replenishing
both. So the remaining funds that are not replenished
because the 800 millions not going to cover the entire
amount, will ERCOT recoup that money via its existing
default uplift mechanism, 2.5 million... So that is yet
to be determined. But let me lay out a scenario, this
isn't necessarily what's going to happen, but if we
were to recover either through securitization or other
means, all of the short paid from the
electric cooperatives that have not paid us, then we
would be able to replenish that account. So for example
Sean mentioned that 600 million of the 800 million
was used for Brazos, recovering that would make a
substantial difference in that balance.
So that necessitates
successful administration of the conditions of House
Bill 1580? Correct. Senate Bill 1580.
That is the methodology out there, it also, I believe
dependent on the bankruptcy proceeding that is ongoing.
I would also say that if somehow that wasn't sufficient
one path eligible to us is what Commissioner Cobos
mentioned, which is to use the existing default uplift
mechanism and start trying to recover that in 2.5 million
dollar monthly (indistinct). In the interest of mechanics if the
conditions of 1580 do not proceed in a way that is
timely as to the conditions that we may go down
with this docket,
what happens in the event of lag between the two, and
then when do we need to take action? Is it a six
month issue? So for me and Sean, you might want to
weigh in this some but we're gonna, in our proposal
we recover something near 400 million of this card
account. So that moves us quite a bit forward in the
financial position of the organization. That would buy
us more time and lower the risk that any CRR account
I'm sorry. Any load that is due CRR auction revenues
would be short paid. So I've just moved up by 400 million
ballpark from that, in terms of having additional reserves.
Yes. If you look at the money that's still owed
to ERCOT that's considered to be the short pay amount
that's outstanding then you have what we've defined
as the amounts due from competitive wholesale market participants
which is a 419 million that's being covered here. You
have the amount that is for the period of emergency.
You have an amount due from Brazos Electric CoOp
which is, and the amount due from Rayburn. So you have those
three buckets and then you have an additional fourth
bucket which is amount due to ERCOT from non
period of emergency which is a much smaller amount.
So the anticipated route is to recover that money
through those, from those parties. We still are potentially
recovering money from those parties that have defaulted,
including this 419 million, we're
still seeking recovery of those actual amounts. This
isn't letting those people off the hook for what they owe us. As Kanan
said, because we are recovering, intending to have recovered
that additional 300 plus million through this process
to cover the crr monies which we have attributed to
Brazos, that is buying us that additional time to get
that money back in from Brazos or whatever route that
takes. So as a matter of testimony, you can't say yet
what timelines would follow. We just have additional
time to process both proceedings and for ERCOT to
recover monies associated with these potential
uplift costs? Correct. And then also because of the
pending bankruptcy hearings, we don't know necessarily
what that full final dollar amount that will be due to ERCOT
from Brazos for that will be as well.
So any money you get from the bankruptcy and payment
on the short pay will just be used to credit back the
uplift balance and reallocate the amounts of like default
charges etcetera? It would go back to paying, paying
off the short pays and then also replenishing the CRR
auction fund.
If we recover more than what is necessary to pay for
those items (indistinct) this entire process that would allow
staff to have some money to pay back some of this 800 million
of default balance and pre pay that as well, which is one of the benefits
of going through the comptroller's funding.
Okay, thank you both. And just before we move on from
ERCOT, Mr Atkins and Mr Reisig, would you raise your hands
please? I just want to make sure if the Commission
has any questions of them, and if not we are ready to
proceed with our next party. Thank you, witnesses. You
may step down. Commissioners, the next party
that presented a witness is Calpine. You have
the witnesses direct testimony. His name is Steve Schlemmer.
The other parties have indicated they have no cross
examination of him, but if you have questions of him
we can call him up and proceed with Mr Schlemmer, and if not, we can move
to the next part.
All right.
Then our next party in that category would be NRG energy.
Again, the parties have no cross examination of their
witness, who is Bill Barnes. But if you do we can proceed with that.
Hearing none, the next party in that category is Rayburn
Country. Their witnesses Julie Carey, again, no cross
examination. But if you wish have questions for Miss
Carey, we can proceed with that.
We may have a faster hearing than anybody anticipated
in this case. The last party that has witnesses
is Commission staff. Their witness is Darryl Tietjen.
Again, parties have waived cross examination but we
can present, staff can present Mr Tietjen if you
would like to hear from him.
We may be done, barring closing exam. Let
me suggest that we take about a 10 minute break and
folks can think about if there's anything else we need
to take care of. We can return. If nothing else, forclosing
arguments and be adjourned for the day. So let's take
a 10 minute break.
Yeah. Okay, let's go back on the record. And there
has been a request for Mr Taylor to come back up. Is
Mr Taylor still here? There may be some more questions
for you. And you remain under oath. So let's take care
of them.
And Mr Taylor, I've also had a request if you could
scoot the mic a little bit closer to you. Sure.
Mr Taylor. In regards to the question about cooperatives,
in an interest of providing clarity in the settings
that we have. I'd like to read you something out
of the House Bill 4492. This is section two of
the bill, Section 39.002 of PURA applicability.
This Chapter, other than sections 39.151, 39.1516,
39.155, 39.157, 39.159, 39.203, 39.904, 39.9051,
39.9052, and 39.914, Subsection E, and inserted language
Subchapters M and N does not imply to a municipally
owned utility or an electric cooperative. So in your
hearing, that statutory reference, do you believe,
is that what you're pinning your statement on? Is that
how we do not incorporate cooperatives? Yes, that's
the language I was looking for that said that Subchapter M--
Just for my own peace of mind, I wanted clarity in
the record on that. Apologies for not finding that while I was looking through it earlier.
No problem. It's a dead end. That's what I needed.
Thank you.
All right. I think--Yes, sir? Did you have something?
I think it's fair to say everyone has rested their
case. I had a discussion briefly with Mr Moss who
did not believe anybody cared to make a oral closing
argument. We've had some discussion about briefing
and here's what we have decided to do. As far
as briefing in this case, we may do something, we likely
will do something different in the other case. We're
gonna have one round of briefing in this case. One
only, no reply briefs. That brief will be due, I'm
sorry for the short time frame, it's like everything
else in this case, but it'll have a 10 page limit
and it will be due by September 1. One round of briefing,
September 1, 10 Page limit. And I, it's all happened
faster than I thought it would, but I think we're done.
Is there any other business we need to take care of
in this docket, 53231? Your honor. I've
got one housekeeping matter that I overlooked. The Commission,
it's not something that Commissioners need to deal with
it unless they want to but it's just a errata that
I failed to put it earlier. So if you wanna do that now
or you... I think we probably should. Okay, looking
at, is it Mr Gilman's rebuttal testimony on page 13,
so it's exhibit eight,
page 13. And there's a statement on line 19 and 20 at
one time, we had-- What page? Page 13.
And the sentence that I think was in the record was
on the filed copy was, ERCOT disagrees but for the reasons
stated in the statement of position that will be filed
contemporaneously with my rebuttal testimony. Ft the
time that we filed that or we wrote that, we thought
we were gonna do a statement of position. We since
decided that we're probably gonna get post hearing
briefing after Mr Journay mentioned that on Thursday.
What we'd like to do is just change that to say ERCOT
disagrees but it will address that legal issue in
post hearing briefing.
And the record copies that we brought in for you today
have that change in it already and I'm happy to show
this right here if anyone else has that, needs to see
that language.
All right, thanks for that clarification. That's all
I have sir. Okay, well thank you all for
your professionalism and collegiality in trying this
case under difficult circumstances. Commissioners unless
there's anything more from any of you, we are adjourned.
Thank you all very much. Thank you.