WEBVTT
00:00:07.610 --> 00:00:09.750
Maybe this meeting of
the Public Utility Commission
00:00:09.750 --> 00:00:11.370
will come to order to consider matters
00:00:11.370 --> 00:00:13.510
that have been duly posted
by the Secretary of State
00:00:13.510 --> 00:00:17.170
of Texas on August 25th, 2021.
00:00:17.170 --> 00:00:19.780
All nail, we will now
take up and consider
00:00:19.780 --> 00:00:23.190
Docket No. 52322
application of electric reliability
00:00:23.190 --> 00:00:24.600
of Council of Texas Inc
00:00:24.600 --> 00:00:25.925
for a debt obligation order
00:00:25.925 --> 00:00:30.250
to uplift balances on PURA
Chapter 39 Subchapter N
00:00:30.250 --> 00:00:33.200
on order initiating a parallel docket
00:00:33.200 --> 00:00:34.730
and for good cause exception.
00:00:34.730 --> 00:00:36.690
At this time, I'll now
hand the proceeding back
00:00:36.690 --> 00:00:38.240
over to Judge Hunter Burkhalter
00:00:39.890 --> 00:00:40.723
Okay, good morning.
00:00:40.723 --> 00:00:42.500
Welcome to day two.
00:00:42.500 --> 00:00:44.380
Before we get to the
presentation of evidence,
00:00:44.380 --> 00:00:46.010
we have at least one
housekeeping matter.
00:00:46.010 --> 00:00:49.493
Understand that counsel for
Rayburn country and ERCOT
00:00:49.493 --> 00:00:50.820
have been in discussions
00:00:50.820 --> 00:00:53.470
and have something they
would like to get on the record.
00:00:53.470 --> 00:00:55.410
So please proceed.
00:00:55.410 --> 00:00:56.620
Yes, your honor.
00:00:56.620 --> 00:00:58.310
Good morning Commissioners,
good morning, your honor.
00:00:58.310 --> 00:01:00.210
I'm Justin Mirabal appearing on behalf
00:01:00.210 --> 00:01:02.160
of Rayburn Country Electric Cooperative
00:01:03.295 --> 00:01:05.960
in response to Commissioner
Cobos' requests,
00:01:05.960 --> 00:01:08.460
Rayburn committed to
going back and reviewing
00:01:08.460 --> 00:01:11.770
the ancillary services and RDP,
00:01:11.770 --> 00:01:15.090
the reliability deployment
price add or charges
00:01:15.090 --> 00:01:18.880
that we're putting into HB 4492.
00:01:18.880 --> 00:01:21.040
To expedite that process,
00:01:21.040 --> 00:01:24.840
we've requested ERCOT
provide the supporting documents
00:01:24.840 --> 00:01:28.080
for their calculation and
they've agreed to do that.
00:01:28.080 --> 00:01:29.690
So we just wanted to
advise the Commission
00:01:29.690 --> 00:01:32.880
that that's the process that
we're looking at right now.
00:01:32.880 --> 00:01:34.234
Thank you.
00:01:34.234 --> 00:01:35.234
Thank you.
00:01:36.275 --> 00:01:37.980
Is there any other, yes sir.
00:01:37.980 --> 00:01:41.920
Do you know when
you might have an answer
00:01:41.920 --> 00:01:44.063
to the evaluation of the data?
00:01:45.664 --> 00:01:49.630
It really depends on
what we get the workpapers.
00:01:49.630 --> 00:01:50.463
Right.
00:01:50.463 --> 00:01:52.000
And we can review
that and we'll do it
00:01:52.000 --> 00:01:53.930
as quickly as possible.
00:01:53.930 --> 00:01:54.763
Thank you.
00:01:56.680 --> 00:01:58.325
And just as a followup,
00:01:58.325 --> 00:02:00.270
and this is not specific to Rayburn,
00:02:00.270 --> 00:02:03.620
but thank you so much for
being responsive to my request.
00:02:03.620 --> 00:02:06.950
I suspect that Rayburn
is not the only party
00:02:06.950 --> 00:02:09.120
that has a settlement dispute
00:02:09.120 --> 00:02:14.120
regarding those RDPA charges
and AS costs over $9,000.
00:02:15.430 --> 00:02:20.430
So I guess my general
feedback on that is that
00:02:22.350 --> 00:02:25.730
in order for us to be able
to document exposure,
00:02:25.730 --> 00:02:28.220
to move through, move
forward with this transaction,
00:02:28.220 --> 00:02:31.462
we're gonna have to have
the settlement disputes,
00:02:31.462 --> 00:02:34.210
you know, hopefully wrapped up
00:02:34.210 --> 00:02:35.280
because if they're in dispute,
00:02:35.280 --> 00:02:37.621
we don't know what
documentation we're gonna get
00:02:37.621 --> 00:02:40.680
to prove up exposure.
00:02:40.680 --> 00:02:44.920
So I guess my general statement here
00:02:44.920 --> 00:02:47.260
is that if parties have
settlement disputes
00:02:47.260 --> 00:02:48.560
and they plan to take...
00:02:48.560 --> 00:02:53.030
to submit exposure
documentation, in this case,
00:02:53.030 --> 00:02:56.250
they need to take some proactive action
00:02:56.250 --> 00:02:57.510
and try to get this wrapped up
00:02:57.510 --> 00:03:00.490
so we can get exposure
documentation in the record,
00:03:00.490 --> 00:03:02.840
so they can be part of
the securitization case.
00:03:04.230 --> 00:03:05.563
Does that make sense to y'all?
00:03:06.700 --> 00:03:09.100
Yeah, no, I think that's right.
00:03:09.100 --> 00:03:13.600
Ultimately I'm still
wrapping my mind around
00:03:13.600 --> 00:03:15.620
the functionality mechanics,
00:03:15.620 --> 00:03:17.120
and I'll have some questions for staff
00:03:17.120 --> 00:03:21.660
that'll kind of help
articulate that more
00:03:21.660 --> 00:03:25.020
on how Rayburn and or Brazos,
00:03:25.020 --> 00:03:28.810
again, those select entities
that are in a unique situation
00:03:28.810 --> 00:03:31.630
and have disputes with
ERCOT that we know of
00:03:31.630 --> 00:03:35.580
others may exist as well, but how they,
00:03:35.580 --> 00:03:40.303
how they interplay in the
4492 and the timelines there,
00:03:41.950 --> 00:03:44.500
and then how that also
plays into the legislative
00:03:44.500 --> 00:03:46.973
and the overall
legislative intent of the bills.
00:03:50.290 --> 00:03:54.070
Yeah, I think questions
are gonna bear this out.
00:03:54.070 --> 00:03:56.620
I think we need to talk
through that some more.
00:03:57.540 --> 00:03:58.543
Right.
00:03:58.543 --> 00:04:00.070
I guess my concern is if
there are settlement disputes
00:04:00.070 --> 00:04:03.320
and you know, that there's
a whole process at ERCOT,
00:04:03.320 --> 00:04:05.330
that where you start
with a settlement dispute
00:04:05.330 --> 00:04:07.040
and you could take
that settlement dispute
00:04:07.040 --> 00:04:11.620
all the way up to an
ADR process with ERCOT
00:04:11.620 --> 00:04:13.630
that could ultimately end up
00:04:13.630 --> 00:04:14.830
being appealed to the Commission.
00:04:14.830 --> 00:04:17.310
So we won't have
finality on those disputes
00:04:18.390 --> 00:04:19.570
for weeks or months.
00:04:19.570 --> 00:04:22.640
Meanwhile, we are moving
forward with this case
00:04:22.640 --> 00:04:27.300
and we will need documentation
to prove up exposure.
00:04:27.300 --> 00:04:32.300
So we need to have that
documentation and those disputes
00:04:33.550 --> 00:04:36.339
come to some sort of finality
00:04:36.339 --> 00:04:37.490
to be able to get that documentation
00:04:37.490 --> 00:04:38.710
and it's incumbent on the LSEs
00:04:38.710 --> 00:04:41.880
I think that are looking to
get this financing in this case.
00:04:41.880 --> 00:04:46.710
I think that that
comment and, you know,
00:04:46.710 --> 00:04:51.520
doctrine is applied to this
case needs to be well-taken.
00:04:51.520 --> 00:04:54.350
I think it behooves all parties to some,
00:04:54.350 --> 00:04:57.420
come to some type of timely resolution
00:04:57.420 --> 00:05:00.380
on their disputes on the numbers,
00:05:00.380 --> 00:05:02.827
so that at least this Commission,
00:05:02.827 --> 00:05:06.490
once we do make final
decisions on process
00:05:06.490 --> 00:05:10.040
and applicability,
00:05:10.040 --> 00:05:14.280
we at least have a view
of how big the pie chart is
00:05:14.280 --> 00:05:16.750
and how many different
ways it's carved up.
00:05:16.750 --> 00:05:19.873
And we've got to have that.
00:05:21.240 --> 00:05:22.267
Okay, thank you.
00:05:23.320 --> 00:05:24.210
Yeah, I'm in agreement.
00:05:24.210 --> 00:05:26.540
I'm just, I wonder what the process
00:05:26.540 --> 00:05:28.340
for us to learn that information is,
00:05:28.340 --> 00:05:32.670
is it to request ERCOT to
provide unsettled accounts,
00:05:32.670 --> 00:05:36.920
or is it a request that
interveners let us know,
00:05:36.920 --> 00:05:38.866
you know, if they have disputes,
00:05:38.866 --> 00:05:42.160
what would be the best way
to understand that universe,
00:05:42.160 --> 00:05:44.783
rather than just saying,
y'all go off and solve it.
00:05:46.520 --> 00:05:48.420
We want them to, obviously.
00:05:48.420 --> 00:05:50.560
Do y'all have
stats on any analysis
00:05:50.560 --> 00:05:52.540
on how many you know
settlement disputes involved,
00:05:52.540 --> 00:05:56.213
the RDPA charges and,
or AS costs over SOC.
00:05:57.230 --> 00:05:58.063
Yeah.
00:06:05.240 --> 00:06:07.830
Good morning
Commissioners, (mumbles)
00:06:07.830 --> 00:06:10.490
Yes, we obviously
have the number
00:06:10.490 --> 00:06:13.200
of settlement billing disputes and ADRs
00:06:13.200 --> 00:06:15.550
related to the Winter Storm Uri,
00:06:15.550 --> 00:06:18.220
I guess I would ask you
all to think of those disputes
00:06:18.220 --> 00:06:21.840
outside the context of
the Nebraska docket.
00:06:21.840 --> 00:06:25.690
Those disputes will take
quite some time to resolve.
00:06:25.690 --> 00:06:30.690
And the statute contemplates
that if disputes are resolved,
00:06:31.060 --> 00:06:33.300
then there has a payback mechanism.
00:06:33.300 --> 00:06:36.990
And there's also litigation
and the district courts
00:06:36.990 --> 00:06:39.820
there's litigation at the
third court of appeals
00:06:39.820 --> 00:06:41.810
that will not be resolved
within the timeframe
00:06:41.810 --> 00:06:43.590
that the Commission needs to take action
00:06:43.590 --> 00:06:44.823
on the Nebraska docket.
00:06:50.760 --> 00:06:52.310
We're gonna have to
take that in consideration
00:06:52.310 --> 00:06:56.420
when we developed the process
for exposure documentation.
00:06:56.420 --> 00:06:59.430
There will be
litigation disputes
00:06:59.430 --> 00:07:03.350
that go on for many years
as a result of Winter Storm Uri.
00:07:03.350 --> 00:07:05.330
And there will be a process
00:07:05.330 --> 00:07:07.210
depending on what those outcomes are,
00:07:07.210 --> 00:07:09.020
whether we have to
resettle in the market
00:07:09.020 --> 00:07:11.860
or they're resolved finally,
00:07:11.860 --> 00:07:14.200
that will be the resolution
of those disputes.
00:07:14.200 --> 00:07:17.880
And if somehow there
are instances in which
00:07:17.880 --> 00:07:20.880
we have to resettle the
market and exchange money,
00:07:20.880 --> 00:07:23.960
then there will be a
way to reconcile that
00:07:23.960 --> 00:07:25.883
outside the securitization framework.
00:07:30.520 --> 00:07:32.890
Well, (indistinct) up here
00:07:32.890 --> 00:07:34.410
(laughing)
00:07:34.410 --> 00:07:36.183
and I can ask questions.
00:07:38.800 --> 00:07:43.800
Okay, so 4492 and 1580
kind of all gets back to that.
00:07:45.060 --> 00:07:50.060
The interplay between
the two statutory additions.
00:07:52.560 --> 00:07:57.560
So in reading the 4492 statute,
00:08:00.410 --> 00:08:05.410
and that's the PURA
39652, the definition section.
00:08:05.940 --> 00:08:10.410
One of the key provisions
is the uplift balance provision
00:08:10.410 --> 00:08:12.060
and how it applies.
00:08:12.060 --> 00:08:14.200
And it refers to the amount
of money that was uplifted
00:08:14.200 --> 00:08:16.540
to the load serving
entities, isn't that correct?
00:08:16.540 --> 00:08:17.373
Correct.
00:08:17.373 --> 00:08:18.206
Yeah.
00:08:18.206 --> 00:08:23.093
And that definition goes on to
exclude amounts securitized,
00:08:25.320 --> 00:08:26.973
ed, so past tense.
00:08:29.450 --> 00:08:31.580
Under Subchapter B section 41,
00:08:31.580 --> 00:08:33.593
otherwise known as Senate bill 1580.
00:08:34.570 --> 00:08:39.460
So I will confess, I am not an attorney.
00:08:39.460 --> 00:08:42.360
I think everybody in this room
knows that pretty well now,
00:08:43.570 --> 00:08:47.610
but in terms of the
functionality of the two,
00:08:47.610 --> 00:08:49.610
of the two laws together,
00:08:49.610 --> 00:08:51.280
I think you can't read them separately,
00:08:51.280 --> 00:08:55.290
you have to read them together
and as they were passed,
00:08:55.290 --> 00:09:00.290
so as 1580 was enacted
00:09:00.490 --> 00:09:02.880
with the express intent
for cooperative specifically
00:09:02.880 --> 00:09:04.923
to securitize their costs,
00:09:05.786 --> 00:09:09.023
that's the way it kind of
reads, is that your view?
00:09:09.874 --> 00:09:11.010
Yes, it is my view.
00:09:11.010 --> 00:09:12.150
Yeah.
00:09:12.150 --> 00:09:15.070
So it sounds to me like
cooperatives must use
00:09:15.070 --> 00:09:18.180
Senate bill 1580, at least
those that are in default,
00:09:18.180 --> 00:09:20.370
but qualify under those provisions
00:09:22.140 --> 00:09:25.910
must securitize under the 1580 process
00:09:25.910 --> 00:09:30.233
before seeking any funds of 4492.
00:09:31.580 --> 00:09:33.600
Is that a way to read this?
00:09:33.600 --> 00:09:34.433
Yes.
00:09:34.433 --> 00:09:35.823
I think that's probably the
most reasonable way to read it
00:09:35.823 --> 00:09:39.110
that the legislature
intended specifically Rayburn
00:09:39.110 --> 00:09:41.260
and Brazos to use 1580.
00:09:41.260 --> 00:09:44.100
Now, I recognize that
other co-ops have costs
00:09:44.100 --> 00:09:45.450
coming out of Winter Storm Uri,
00:09:45.450 --> 00:09:47.660
and they can use that mechanism as well.
00:09:47.660 --> 00:09:49.320
But I believe the legislative intent
00:09:49.320 --> 00:09:52.760
was for Rayburn and Brazos
who are in payment breach
00:09:52.760 --> 00:09:55.700
with ERCOT to utilize 1580
00:09:55.700 --> 00:09:58.700
and not seek the funds under 4492.
00:09:58.700 --> 00:10:00.800
I know there may be
differences of opinions here,
00:10:00.800 --> 00:10:03.670
and we can lay out the policy rationale
00:10:03.670 --> 00:10:05.240
and post hearing briefing,
00:10:05.240 --> 00:10:07.740
but I believe that
was the overall design,
00:10:07.740 --> 00:10:09.810
what the legislature
did with those bills.
00:10:09.810 --> 00:10:12.667
So in terms of those
mechanics that are somewhat in
00:10:12.667 --> 00:10:16.040
that the Commission is
trying to sort through right now
00:10:16.040 --> 00:10:17.500
that solves a bit of it,
00:10:17.500 --> 00:10:22.500
because then they come out of
default as asserted by ERCOT,
00:10:22.900 --> 00:10:25.243
but then they can opt out.
00:10:25.243 --> 00:10:26.080
Correct.
00:10:26.080 --> 00:10:29.900
Now I recognize, assuming
they can get the proper funding
00:10:29.900 --> 00:10:33.170
to pay back the full debt
to ERCOT under 1580
00:10:33.170 --> 00:10:35.910
or through other financing mechanisms.
00:10:35.910 --> 00:10:36.743
Yeah.
00:10:40.359 --> 00:10:44.637
And to circle back to your
point earlier about, you know,
00:10:45.880 --> 00:10:48.810
litigation that's going on in
parallel to this proceeding
00:10:48.810 --> 00:10:51.840
and obviously settlement disputes
00:10:51.840 --> 00:10:54.410
that are caught in ADR processes
00:10:56.330 --> 00:10:58.730
when we issue out this order
cause we have to issue it out
00:10:58.730 --> 00:11:01.123
and by a set time per the statute,
00:11:02.090 --> 00:11:04.480
the order is not subject to rehearing
00:11:04.480 --> 00:11:09.480
and is subject to expeditious
appeal to the district court
00:11:09.630 --> 00:11:11.190
and to the Texas Supreme court.
00:11:11.190 --> 00:11:14.030
And so once this bus
leaves and all of this,
00:11:14.030 --> 00:11:17.160
all these legal remedies are exhausted,
00:11:17.160 --> 00:11:21.640
then the ship is sailed,
so there's parallel,
00:11:21.640 --> 00:11:25.270
somewhat related issues
going on on the side disputes
00:11:25.270 --> 00:11:30.253
ADRs litigation that
ultimately even if they were,
00:11:31.320 --> 00:11:33.540
it sounds like based on
what you're telling me that,
00:11:33.540 --> 00:11:35.460
but in kind of looking
at the whole timeline,
00:11:35.460 --> 00:11:37.510
even if they were settled in a way that,
00:11:37.510 --> 00:11:39.310
or not settled rather,
00:11:39.310 --> 00:11:41.917
and litigation occurred that required,
00:11:41.917 --> 00:11:45.840
I guess what I'm getting
at is that to some degree,
00:11:45.840 --> 00:11:47.830
this order is gonna come out
00:11:47.830 --> 00:11:52.830
and since it's has a very
quick legal process for appeal,
00:11:54.990 --> 00:11:58.640
I don't know that some
of those other issues
00:11:58.640 --> 00:12:02.234
are gonna have, what
bearing it will have.
00:12:02.234 --> 00:12:03.284
Do you have any feedback on that
00:12:03.284 --> 00:12:05.620
and given the fact
that this is, you know,
00:12:05.620 --> 00:12:07.600
on an expeditious timeline?
00:12:07.600 --> 00:12:08.940
Yeah, s I think, you know,
00:12:08.940 --> 00:12:13.100
4492 is a separate mechanism
for any of the disputes
00:12:13.100 --> 00:12:14.360
related to any of the disputes
00:12:14.360 --> 00:12:15.690
that came on a Winter Storm Uri.
00:12:15.690 --> 00:12:18.700
The legislature wanted
to provide an opportunity
00:12:18.700 --> 00:12:20.770
to get money back
to load serving entities
00:12:20.770 --> 00:12:22.430
through the Nebraska docket.
00:12:22.430 --> 00:12:23.930
And that's what the
Commission is focused on
00:12:23.930 --> 00:12:26.000
with this debt obligation order.
00:12:26.000 --> 00:12:28.740
And as you heard
yesterday from Mr. Atkins,
00:12:28.740 --> 00:12:32.610
it's gonna take us some
time to go through that public
00:12:32.610 --> 00:12:34.950
or private market to get those funding
00:12:34.950 --> 00:12:37.690
and we will proceed and
distribute those proceeds.
00:12:37.690 --> 00:12:39.360
As disputes start to play out,
00:12:39.360 --> 00:12:42.210
whatever the finality of
those that's a separate path.
00:12:42.210 --> 00:12:44.830
It's a separate train that's not as fast
00:12:44.830 --> 00:12:47.160
as the securitization train
00:12:47.160 --> 00:12:49.110
and when those issues get resolved
00:12:49.110 --> 00:12:51.000
and I don't know what the outcome are,
00:12:51.000 --> 00:12:52.510
but to the extent there is something
00:12:52.510 --> 00:12:53.940
where we have to resettle,
00:12:53.940 --> 00:12:56.700
we will go and do that
under our processes.
00:12:56.700 --> 00:12:59.840
And the securitization will
have already been funded
00:12:59.840 --> 00:13:02.110
and whatever money we hold there,
00:13:02.110 --> 00:13:04.560
we will have to look at what
our financing mechanism is.
00:13:04.560 --> 00:13:07.710
If there's prepayment,
you know, penalties,
00:13:07.710 --> 00:13:11.240
we will probably just hold
that money and use it as a way
00:13:11.240 --> 00:13:15.240
to offset the charges going
forward as we collect that.
00:13:15.240 --> 00:13:18.400
So there is a way to
reconcile all the disputes,
00:13:18.400 --> 00:13:22.629
those that got proceeds under 4492,
00:13:22.629 --> 00:13:24.530
if it was resolved in their favor,
00:13:24.530 --> 00:13:26.430
then they have to pay it back.
00:13:26.430 --> 00:13:28.870
And again, we will may
have to set that aside
00:13:28.870 --> 00:13:32.596
and hold that as a way to
deal with future uplift charges,
00:13:32.596 --> 00:13:35.680
if there is a prepayment
penalty in advance
00:13:35.680 --> 00:13:37.083
for those bond holders.
00:13:39.450 --> 00:13:40.283
Okay.
00:13:40.283 --> 00:13:42.100
I'm just really trying to
understand the impact
00:13:42.100 --> 00:13:44.643
of what's going on at ERCOT
with the settlement disputes
00:13:44.643 --> 00:13:46.600
and ADR on what we're trying to do here
00:13:46.600 --> 00:13:49.030
and getting exposure documentation.
00:13:49.030 --> 00:13:52.840
And I think there's a
variety of ways it sounds like
00:13:52.840 --> 00:13:55.610
that you can account
for it respectively.
00:13:55.610 --> 00:13:59.410
There is a path forward
that accounts for the litigation
00:13:59.410 --> 00:14:01.790
and how that would
be handled after we go
00:14:01.790 --> 00:14:04.693
and securitize the funding
for the Nebraska docket.
00:14:07.230 --> 00:14:08.583
I was just gonna ask if,
00:14:09.710 --> 00:14:11.940
is it possible for ERCOT to hold back
00:14:11.940 --> 00:14:13.933
some of the proceeds of the bond,
00:14:15.440 --> 00:14:18.683
the bond sale in the amount that you,
00:14:19.521 --> 00:14:20.840
I don't know that this is fair,
00:14:20.840 --> 00:14:23.200
but I just want to
know if you can do it.
00:14:23.200 --> 00:14:27.560
So in the disputed amount
between Brazos and ERCOT
00:14:27.560 --> 00:14:32.560
90 million say, disperse
the rest of the bond proceeds.
00:14:32.640 --> 00:14:37.640
So you don't have to resettle,
ask entities for money back
00:14:37.670 --> 00:14:41.510
if in fact the Brazos securitization
00:14:41.510 --> 00:14:44.670
does not fulfill the entire obligation.
00:14:44.670 --> 00:14:46.280
So I think you're talking
about Rayburn and-
00:14:46.280 --> 00:14:47.340
I'm sorry, Rayburn.
00:14:47.340 --> 00:14:48.600
I'm sorry, I'm sorry.
00:14:48.600 --> 00:14:52.580
I'd have to think through
what that would mean.
00:14:52.580 --> 00:14:55.040
And I don't know what the
financial ramifications are
00:14:55.040 --> 00:14:57.880
if you get that securitization funding,
00:14:57.880 --> 00:15:01.150
you're holding that back in, you know,
00:15:01.150 --> 00:15:03.960
a piece of the market is
paying for those proceeds
00:15:03.960 --> 00:15:04.980
that you're holding back.
00:15:04.980 --> 00:15:07.500
So I just have to think
through that a little bit more.
00:15:07.500 --> 00:15:08.333
Okay.
00:15:13.300 --> 00:15:16.630
It seems to me like
if you can, you might,
00:15:16.630 --> 00:15:18.513
we might save the market a step.
00:15:19.460 --> 00:15:21.223
We might delay some funds.
00:15:23.420 --> 00:15:26.170
It's a pretty short timeframe, correct.
00:15:26.170 --> 00:15:28.280
We might delay the
disbursement of some funds,
00:15:28.280 --> 00:15:32.910
but it might resolve a
resettlement component
00:15:32.910 --> 00:15:35.840
that would be potentially even harder
00:15:35.840 --> 00:15:38.840
for market participants to
deal with later on down the line.
00:15:39.850 --> 00:15:40.987
Sure.
00:15:40.987 --> 00:15:43.690
I just would want more
time to think about what the
00:15:43.690 --> 00:15:44.730
on the financial side,
00:15:44.730 --> 00:15:46.480
what the ramifications of that would be.
00:15:46.480 --> 00:15:47.727
That'd be great.
00:15:47.727 --> 00:15:48.970
If you could think about that
and give us your comments,
00:15:48.970 --> 00:15:49.803
that'd be great.
00:15:52.010 --> 00:15:55.680
In terms of process
and filing overall numbers
00:15:55.680 --> 00:15:58.650
once disputes are settled,
00:15:58.650 --> 00:16:02.510
if they are before September
23rd, that'd be great,
00:16:02.510 --> 00:16:05.683
but maybe they're not,
but in terms of filing,
00:16:06.610 --> 00:16:11.240
I think it should be under
this docket if those are,
00:16:11.240 --> 00:16:13.640
if that is firmed up,
00:16:13.640 --> 00:16:15.730
if we have certainty
on what that looks like
00:16:15.730 --> 00:16:19.560
between the parties,
should that be under this file?
00:16:19.560 --> 00:16:23.350
I would not do it under
the parallel docket,
00:16:23.350 --> 00:16:27.580
which is purely designed for the process
00:16:27.580 --> 00:16:30.480
where we have submission for opt-out
00:16:30.480 --> 00:16:34.423
and certification of costs.
00:16:35.490 --> 00:16:38.817
Are you referring to the
resolution of settlement dispute?
00:16:38.817 --> 00:16:40.660
Yes, that's what
I'm referring to
00:16:40.660 --> 00:16:42.980
is where we would like that visible
00:16:42.980 --> 00:16:45.470
for all parties to look
at and say, all right, this,
00:16:45.470 --> 00:16:48.545
because everybody's
formulating their, you know,
00:16:48.545 --> 00:16:51.278
back of the napkin, you know, pie chart
00:16:51.278 --> 00:16:53.530
on what gonna be able to securitize here
00:16:53.530 --> 00:16:55.150
and who gets what right.
00:16:55.150 --> 00:16:57.770
I envisioned that being part
00:16:57.770 --> 00:17:01.940
of our exposure documentation
process and requirements
00:17:01.940 --> 00:17:03.450
and the parallel docket,
00:17:03.450 --> 00:17:05.160
because it's gonna be
incumbent on the LSEs
00:17:05.160 --> 00:17:07.478
to provide the exposure documentation.
00:17:07.478 --> 00:17:11.830
My perspective is
really on whether or not
00:17:11.830 --> 00:17:15.680
all those (mumbles) and ADR processes
00:17:15.680 --> 00:17:17.600
at ERCOT are gonna have any impact
00:17:17.600 --> 00:17:21.710
on our exposure documentation
process and requirements.
00:17:21.710 --> 00:17:26.710
And if so, what can we
do from our perspective
00:17:27.060 --> 00:17:29.940
to give direction to move that along?
00:17:29.940 --> 00:17:32.670
Ultimately it is gonna be
incumbent on the LSEs
00:17:32.670 --> 00:17:34.960
to provide us the exposure documentation
00:17:34.960 --> 00:17:37.360
they want to get
securitization in the docket.
00:17:37.360 --> 00:17:40.710
So it's really, my
feedback was just really,
00:17:40.710 --> 00:17:43.210
I guess, a general
statement that, you know,
00:17:43.210 --> 00:17:46.990
you want to give us a
more final set of documents,
00:17:46.990 --> 00:17:49.610
probably be incumbent
on the LSE to wrap up.
00:17:49.610 --> 00:17:50.722
No.
00:17:50.722 --> 00:17:52.790
It was the ADRs
but if they haven't
00:17:52.790 --> 00:17:56.620
sounds like ERCOT has
a way to take care of it
00:17:56.620 --> 00:17:57.807
in the back end in some way,
00:17:57.807 --> 00:18:00.050
depending on what ultimately
happens at the end of,
00:18:00.050 --> 00:18:03.920
you know, being successful or not.
00:18:03.920 --> 00:18:06.660
And so that's,
00:18:06.660 --> 00:18:09.594
I think I envisioned that
more in the parallel docket,
00:18:09.594 --> 00:18:11.490
whatever they ultimately gives.
00:18:11.490 --> 00:18:13.820
I'm just trying to understand what,
00:18:13.820 --> 00:18:17.313
how, what impact that has on
our exposure documentation.
00:18:19.320 --> 00:18:22.640
Yeah, and I think, you know,
my recommendation would be,
00:18:22.640 --> 00:18:25.160
you can have a separate
compliance docket
00:18:25.160 --> 00:18:28.770
that comes out of this
proceeding that requires reporting
00:18:28.770 --> 00:18:33.270
by ERCOT, and it could
be related to how ERCOT
00:18:33.270 --> 00:18:35.690
resolves settlement
billing disputes and ADRs
00:18:35.690 --> 00:18:37.110
coming out of the Winter Storm Uri
00:18:37.110 --> 00:18:39.140
during this period of emergency.
00:18:39.140 --> 00:18:41.700
It's probably valuable to
have reporting by ERCOT
00:18:41.700 --> 00:18:44.270
on ultimately the
distribution of the proceeds
00:18:44.270 --> 00:18:47.440
and who gets that and
put that in the record too.
00:18:47.440 --> 00:18:50.610
So I would envision a
separate compliance docket
00:18:50.610 --> 00:18:52.250
potentially coming
out of this proceeding
00:18:52.250 --> 00:18:54.600
where we have an opportunity to come
00:18:54.600 --> 00:18:56.610
and tell the Commission
how we're implementing
00:18:56.610 --> 00:18:58.267
the securitization.
00:18:58.267 --> 00:19:00.120
You know, I like that idea.
00:19:00.120 --> 00:19:00.953
I do too.
00:19:03.130 --> 00:19:04.393
I think that's a good idea.
00:19:05.330 --> 00:19:06.163
Thank you.
00:19:06.163 --> 00:19:07.100
Okay.
00:19:07.100 --> 00:19:09.180
And I think, you know,
and post-hearing briefing,
00:19:09.180 --> 00:19:14.180
we can address more around
1580 and 4492, and, you know,
00:19:14.210 --> 00:19:17.190
kind of the policy
rationale on how we believe
00:19:17.190 --> 00:19:20.790
the two co-ops that are in
payment breach with the ERCOT
00:19:20.790 --> 00:19:22.660
and how that was
supposed to be reconciled.
00:19:22.660 --> 00:19:23.493
Okay, great.
00:19:25.860 --> 00:19:27.670
Okay is there any other
administrative matters
00:19:27.670 --> 00:19:30.633
before we proceed with
presentation of witnesses?
00:19:32.150 --> 00:19:36.470
Sounds like not, we are
ready for TXU and Luminant.
00:19:36.470 --> 00:19:38.840
Your honor, yesterday
at the end of the day,
00:19:38.840 --> 00:19:40.570
I had asked for some clarify,
00:19:40.570 --> 00:19:43.250
Mr. O'Gorman to give some
clarification this morning
00:19:43.250 --> 00:19:45.930
and we decided we would
do that first thing this morning,
00:19:45.930 --> 00:19:46.998
as I recall.
00:19:46.998 --> 00:19:47.831
You're right, we do.
00:19:47.831 --> 00:19:50.010
So with the
Commission's permission,
00:19:50.010 --> 00:19:52.650
I'd like to call Mr. O'Gorman
back up to the stand
00:19:52.650 --> 00:19:55.682
and just to give you some
context on this Commissioners,
00:19:55.682 --> 00:19:58.750
one of the highest priorities for ERCOT
00:19:58.750 --> 00:20:02.370
is that we don't end up with an order
00:20:02.370 --> 00:20:03.630
that we have to come back to you
00:20:03.630 --> 00:20:04.800
in two months or three months
00:20:04.800 --> 00:20:07.000
to say we can't implement that.
00:20:07.000 --> 00:20:09.760
So we want, or are there
some unintended consequences,
00:20:09.760 --> 00:20:12.000
so we want to provide you
with as much information
00:20:12.000 --> 00:20:15.350
as we can right now, so
that you're not surprised,
00:20:15.350 --> 00:20:17.280
and we're not surprised
when the order comes out.
00:20:17.280 --> 00:20:18.540
And that's kind of the context
00:20:18.540 --> 00:20:20.310
in which we're bringing
Mr. O'Gorman back up
00:20:20.310 --> 00:20:23.910
so he can clarify a couple of
things that he said yesterday,
00:20:23.910 --> 00:20:25.010
if that's permissible.
00:20:28.114 --> 00:20:30.830
Your Honor, (indistinct)
00:20:30.830 --> 00:20:33.140
We're absolutely fine with
Mr. O'Gorman going up
00:20:33.140 --> 00:20:34.840
and clarifying his testimony yesterday,
00:20:34.840 --> 00:20:37.250
but we would like to
potentially reserve the right
00:20:37.250 --> 00:20:40.870
if necessary for
redirect on Mr. O'Gorman
00:20:40.870 --> 00:20:43.500
or to offer Ms. Simpson
backup should we need to,
00:20:43.500 --> 00:20:45.200
to clarify her plan.
00:20:45.200 --> 00:20:47.435
So I just wanna mention
that at the (indistinct)
00:20:47.435 --> 00:20:48.480
I think it's fair recross.
00:20:48.480 --> 00:20:51.173
I know what you mean
is recross, but that,
00:20:52.103 --> 00:20:53.070
I think that's a fair request.
00:20:53.070 --> 00:20:54.923
So we'll honor that.
00:20:57.520 --> 00:21:01.100
Mr. O'Gorman, can
you clarify your remarks
00:21:01.100 --> 00:21:03.340
from yesterday about the exposure issue
00:21:03.340 --> 00:21:05.930
that you were just asked
about by the Commissioners?
00:21:05.930 --> 00:21:10.530
Yes, so I was asked
set of questions,
00:21:12.190 --> 00:21:14.210
I believe from Commissioner McAdams
00:21:14.210 --> 00:21:18.570
about taking the Exelon proposal
00:21:18.570 --> 00:21:21.700
and then possibly merging
that with some netting.
00:21:21.700 --> 00:21:24.037
So I think I need to,
00:21:24.037 --> 00:21:29.037
for my testimony is we can
implement Exelon's calculations.
00:21:29.250 --> 00:21:33.081
They don't propose any
netting in their calculations.
00:21:33.081 --> 00:21:37.660
So I just wanna be very clear that
00:21:37.660 --> 00:21:41.920
the netting we could do
would be extremely limited
00:21:41.920 --> 00:21:45.710
if you were to merge
that the Exelon proposal
00:21:45.710 --> 00:21:47.380
with some form of netting
00:21:47.380 --> 00:21:50.950
for the purposes of calculating exposure
00:21:50.950 --> 00:21:53.060
and in particular,
00:21:53.060 --> 00:21:56.990
the limits would be that
we would only be able
00:21:56.990 --> 00:22:00.230
to do a calculation on exposure,
00:22:00.230 --> 00:22:05.230
if a, the QSE contains only
a single load serving entity
00:22:06.080 --> 00:22:09.253
or multiple load serving
entities that are affiliates,
00:22:10.230 --> 00:22:15.230
b, that there are kind of
no affiliated resource entities
00:22:16.090 --> 00:22:20.380
in that QSE and that
the load serving entity
00:22:20.380 --> 00:22:23.943
affirms that the QSE
costs were passed through.
00:22:25.150 --> 00:22:27.840
So that's a pretty small population
00:22:27.840 --> 00:22:30.850
where we could make that calculation.
00:22:30.850 --> 00:22:34.410
And I don't feel I was
very clear about those limits
00:22:34.410 --> 00:22:38.600
when I was answering
your question yesterday.
00:22:38.600 --> 00:22:41.503
So as a practical matter,
00:22:44.700 --> 00:22:48.830
let me use Tenaska, again
as that example of complexity,
00:22:48.830 --> 00:22:53.630
would you be able to
calculate for affiliates with,
00:22:53.630 --> 00:22:55.623
because they're acting as that QSE.
00:22:57.810 --> 00:23:02.290
So Tenaska, which has
many unaffiliated LSEs,
00:23:02.290 --> 00:23:05.000
we would not be able
to make that calculation.
00:23:05.000 --> 00:23:08.790
It would be a very limited,
00:23:08.790 --> 00:23:12.780
you would have to have a QSE or a subQSE
00:23:12.780 --> 00:23:17.780
with only one LSE or all
other ones being affiliates
00:23:19.350 --> 00:23:24.350
of one another and no
affiliated resource entities,
00:23:25.220 --> 00:23:30.083
and this promise that the
costs were passed through.
00:23:31.481 --> 00:23:34.617
And that just seems very limited
00:23:34.617 --> 00:23:37.150
and I know there's lots
of settlement negotiations
00:23:37.150 --> 00:23:39.320
going on around netting,
00:23:39.320 --> 00:23:43.790
and I didn't want to
mislead the Commission
00:23:43.790 --> 00:23:45.733
in terms of what might be feasible.
00:23:47.160 --> 00:23:49.017
So it sounds like what
you've described as living
00:23:49.017 --> 00:23:51.810
are the circumstances
or the circumstances
00:23:51.810 --> 00:23:55.980
on a limited basis that
Commission staff witness
00:23:56.850 --> 00:23:59.590
Carrie Bivens IMM
provided in her testimony.
00:23:59.590 --> 00:24:01.683
That is exactly correct.
00:24:02.920 --> 00:24:03.753
Thank you.
00:24:06.283 --> 00:24:09.213
Anything else you need
to clarify, Mr. O'Gorman?
00:24:10.110 --> 00:24:11.050
I don't believe so.
00:24:11.050 --> 00:24:12.093
Okay, thank you.
00:24:14.130 --> 00:24:15.550
(indistinct)
00:24:15.550 --> 00:24:16.940
All right, thank you.
00:24:16.940 --> 00:24:19.930
That is additional,
further direct testimony.
00:24:19.930 --> 00:24:22.440
So does anybody else
have any cross examination
00:24:22.440 --> 00:24:24.390
they'd like to conduct aligned to that?
00:24:25.670 --> 00:24:26.970
All right, thank you, sir.
00:24:30.560 --> 00:24:33.983
Now I think we're ready for
the TXU LSEs and Luminant.
00:25:16.820 --> 00:25:17.653
Good morning.
00:25:17.653 --> 00:25:18.486
Good morning,
00:25:19.410 --> 00:25:21.060
Bill Moore and Melissa Lorber
00:25:21.060 --> 00:25:24.863
on behalf of the TXU
LSEs and Luminant Energy.
00:25:26.630 --> 00:25:27.540
I will present,
00:25:27.540 --> 00:25:30.673
Ms. Frazier and Ms. Lorber
will present Mr. Parker.
00:25:32.360 --> 00:25:34.240
Ms. Frazier, would you state your name
00:25:34.240 --> 00:25:35.640
for the record, please?
00:25:35.640 --> 00:25:37.220
Amanda Frazier.
00:25:37.220 --> 00:25:41.810
And are you the Amanda
Frazier who offered exhibit one?
00:25:41.810 --> 00:25:42.790
Yes.
00:25:42.790 --> 00:25:46.540
And were certain portions
of that TXU LSE exhibit one
00:25:46.540 --> 00:25:49.260
struck by the judge's oral ruling
00:25:49.260 --> 00:25:51.539
at the pre hearing conference?
00:25:51.539 --> 00:25:52.973
They were.
00:25:52.973 --> 00:25:57.000
And TXU LSEs exhibit
four is your direct testimony
00:25:57.000 --> 00:25:59.940
modified in accordance
with the judge's oral ruling,
00:25:59.940 --> 00:26:00.980
is that correct?
00:26:00.980 --> 00:26:01.813
Yes.
00:26:01.813 --> 00:26:05.070
And do you offer that
TXU LSE exhibit four
00:26:05.070 --> 00:26:07.120
subject to the offer of
proof that we have made
00:26:07.120 --> 00:26:10.740
regarding supplementation
completion of that testimony?
00:26:10.740 --> 00:26:13.050
Do you offer that as your
testimony here today?
00:26:13.050 --> 00:26:14.470
Yes.
00:26:14.470 --> 00:26:16.030
Thank you.
00:26:16.030 --> 00:26:16.863
Mr. Parker,
00:26:16.863 --> 00:26:18.890
can you please state your
full name for the record?
00:26:18.890 --> 00:26:20.040
Matthew Parker.
00:26:20.040 --> 00:26:22.220
And are you the
Matthew Parker who offered
00:26:22.220 --> 00:26:27.220
the pre-file written direct
testimony TXU LSEs exhibit two?
00:26:28.130 --> 00:26:28.963
I am.
00:26:28.963 --> 00:26:32.100
And do you present
TXU LSE exhibit two
00:26:32.100 --> 00:26:33.480
as your direct testimony?
00:26:33.480 --> 00:26:34.313
I do.
00:26:35.300 --> 00:26:38.330
Your honor, as you know
that TXU LSEs also offered
00:26:38.330 --> 00:26:41.160
the direct testimony of
Professor James Spindler,
00:26:41.160 --> 00:26:43.740
which was also struck
by your oral ruling.
00:26:43.740 --> 00:26:47.680
That was exhibit three,
which was not admitted.
00:26:47.680 --> 00:26:50.330
We have also made an
offer of proof on that exhibit,
00:26:50.330 --> 00:26:54.240
but we are not presenting
Professor Spindler here today.
00:26:54.240 --> 00:26:55.073
Sure.
00:26:55.073 --> 00:26:58.160
So with that we return to
Mr. Parker and Ms. Frazier
00:26:58.160 --> 00:26:59.470
for cross examination.
00:26:59.470 --> 00:27:00.908
Thank you, Calpine?
00:27:00.908 --> 00:27:03.300
(indistinct) questions.
00:27:03.300 --> 00:27:04.660
Coalition?
00:27:04.660 --> 00:27:06.030
No questions, Your Jonor.
00:27:06.030 --> 00:27:07.938
174 Power?
00:27:07.938 --> 00:27:09.758
No questions, Your Honor.
00:27:09.758 --> 00:27:10.850
EDF?
00:27:10.850 --> 00:27:13.040
No questions, Your Honor.
00:27:13.040 --> 00:27:14.710
NG resources?
00:27:14.710 --> 00:27:16.890
No questions, Your Honor.
00:27:16.890 --> 00:27:17.830
Exelon?
00:27:17.830 --> 00:27:19.323
No questions.
00:27:19.323 --> 00:27:20.660
Just Energy.
00:27:20.660 --> 00:27:22.383
Yeah we do, Your Honor.
00:27:35.420 --> 00:27:36.536
Good morning, Your Honor.
00:27:36.536 --> 00:27:38.430
It's Catherine Webking for Just Energy.
00:27:38.430 --> 00:27:40.820
Good morning Ms. Frazier and Mr. Parker.
00:27:40.820 --> 00:27:43.360
I just have a very
brief set of questions
00:27:43.360 --> 00:27:45.750
for you Ms. Frazier, please.
00:27:45.750 --> 00:27:47.710
Have you heard
testimony in this proceeding
00:27:47.710 --> 00:27:48.640
throughout all these days
00:27:48.640 --> 00:27:51.240
about a possible prioritization
00:27:51.240 --> 00:27:56.240
or distribution of proceeds
based on those LSEs of customers
00:27:58.860 --> 00:28:02.090
to whom charges these charges were made
00:28:02.090 --> 00:28:04.140
or could have been made?
00:28:04.140 --> 00:28:08.100
I believe you're referring
to Calpine's testimony.
00:28:08.100 --> 00:28:10.030
Yes, that's one
example definitely.
00:28:10.030 --> 00:28:10.863
Yes.
00:28:11.720 --> 00:28:14.620
Are the total numbers
of customers that Vistra
00:28:14.620 --> 00:28:16.420
could have passed this through,
00:28:16.420 --> 00:28:17.840
these charges through too different
00:28:17.840 --> 00:28:18.850
than the number of customers
00:28:18.850 --> 00:28:21.333
that you did pass these
charges through for.
00:28:23.690 --> 00:28:24.620
Yes.
00:28:24.620 --> 00:28:26.830
And I didn't mean,
I'm not trying to be tricky,
00:28:26.830 --> 00:28:30.163
I can rephrase but are
there instances where Vistra
00:28:31.262 --> 00:28:34.210
and I think there's been
other testimony to this effect
00:28:34.210 --> 00:28:37.426
from other retail electric
providers anyway,
00:28:37.426 --> 00:28:42.426
that they did not necessarily
pass these costs through
00:28:43.490 --> 00:28:44.400
in all instances
00:28:44.400 --> 00:28:46.500
where they may have had
a contractual right to do so.
00:28:46.500 --> 00:28:47.333
Yes.
00:28:49.410 --> 00:28:52.340
And in order to examine those
00:28:52.340 --> 00:28:54.450
that you could have passed them through,
00:28:54.450 --> 00:28:56.260
you would have to somehow,
00:28:56.260 --> 00:28:58.080
do you have any idea of
how that would be proved up?
00:28:58.080 --> 00:29:03.080
Would you have to look at
the contracts and identify that?
00:29:03.870 --> 00:29:06.850
Yeah, so I think
that the proposal,
00:29:06.850 --> 00:29:11.850
the proposal to repay
charges from the uplift balance
00:29:14.360 --> 00:29:19.360
to customers before
paying them to LSEs is
00:29:19.820 --> 00:29:22.088
it would be very complicated.
00:29:22.088 --> 00:29:24.730
First, the statute already requires
00:29:24.730 --> 00:29:28.720
that if a customer was
subject to these charges
00:29:28.720 --> 00:29:32.400
that you do pass through
the charges to them.
00:29:32.400 --> 00:29:37.400
So changing the order
of that to require ERCOT
00:29:37.810 --> 00:29:42.590
or some other entity to figure
out that group of customers,
00:29:42.590 --> 00:29:45.700
rather than having
the LSE distribute that
00:29:45.700 --> 00:29:48.390
back to the customers
would be complicated.
00:29:48.390 --> 00:29:52.630
You would have to have
ERCOT look at all of the contracts
00:29:52.630 --> 00:29:53.853
for those customers.
00:29:55.100 --> 00:29:56.392
And would you understand,
00:29:56.392 --> 00:30:01.392
let me just leave it there.
00:30:02.890 --> 00:30:04.218
Thank you very much.
00:30:04.218 --> 00:30:05.695
Thank you very much.
00:30:05.695 --> 00:30:06.695
Thank you.
00:30:08.318 --> 00:30:09.151
NRG?
00:30:10.379 --> 00:30:12.354
No questions, Your Honor.
00:30:12.354 --> 00:30:13.306
Rayburn?
00:30:13.306 --> 00:30:16.051
No questions, Your Honor.
00:30:16.051 --> 00:30:17.701
Tenaska?
00:30:17.701 --> 00:30:19.562
No questions, Your Honor.
00:30:19.562 --> 00:30:21.773
Texpo?
00:30:21.773 --> 00:30:23.219
No questions, Your Honor.
00:30:23.219 --> 00:30:24.475
TIEC?
00:30:24.475 --> 00:30:27.401
No questions, Your Honor.
00:30:27.401 --> 00:30:28.234
LCRA?
00:30:28.234 --> 00:30:29.900
No questions, Your Honor.
00:30:29.900 --> 00:30:31.010
East Texas?
00:30:31.010 --> 00:30:32.030
No questions, Your Honor.
00:30:32.030 --> 00:30:32.930
Golden Spread?
00:30:32.930 --> 00:30:33.800
No questions, Your Honor.
00:30:33.800 --> 00:30:34.964
South Texas?
00:30:34.964 --> 00:30:35.890
No questions, Your Honor.
00:30:35.890 --> 00:30:36.723
Austin?
00:30:36.723 --> 00:30:37.810
No questions, Your Honor.
00:30:37.810 --> 00:30:38.643
Lubbock?
00:30:38.643 --> 00:30:40.172
No questions, Your Honor.
00:30:40.172 --> 00:30:41.005
OPUC?
00:30:41.005 --> 00:30:45.227
No questions, Your Honor.
00:30:45.227 --> 00:30:46.630
ERCOT?
00:30:46.630 --> 00:30:47.620
No questions, Your Honor.
00:30:47.620 --> 00:30:48.460
Staff?
00:30:48.460 --> 00:30:49.960
Staff has no
questions, Your Honor.
00:30:49.960 --> 00:30:51.603
All right, thank
you, Commissioners.
00:30:52.950 --> 00:30:54.183
I have a question,
00:30:55.680 --> 00:30:59.593
Ms. Frazier, on page 48
of your modified testimony,
00:31:01.040 --> 00:31:02.653
you on line 10,
00:31:03.777 --> 00:31:06.800
you say determine
that if netting applies
00:31:06.800 --> 00:31:09.480
to the determination of
exposure tub, lift balance costs,
00:31:09.480 --> 00:31:11.570
then netting must also
apply to the determination
00:31:11.570 --> 00:31:15.996
of liability, if any, for the
payment of uplift charges.
00:31:15.996 --> 00:31:16.829
Yes.
00:31:16.829 --> 00:31:18.460
Can you tell me how
you think that would work
00:31:18.460 --> 00:31:19.460
and what that would look like?
00:31:19.460 --> 00:31:20.900
What would that require ERCOT to do
00:31:20.900 --> 00:31:23.530
to make that happen on
both sides of the equation?
00:31:23.530 --> 00:31:26.240
Right, so the
statute Commissioner,
00:31:26.240 --> 00:31:31.240
and thank you for the question
talks about payments by LSEs
00:31:32.640 --> 00:31:34.230
on a load ratio share
00:31:34.230 --> 00:31:36.550
that's the language
that's used to determine
00:31:36.550 --> 00:31:38.220
who's entitled to funds,
00:31:38.220 --> 00:31:40.540
it's also the language
that's used to entitle
00:31:40.540 --> 00:31:42.470
to who pays back the funds.
00:31:42.470 --> 00:31:47.470
And so our position is
if something other than,
00:31:47.909 --> 00:31:50.410
you know, load ratio share for LSEs
00:31:50.410 --> 00:31:53.530
is used to determine
who's eligible for the funds
00:31:53.530 --> 00:31:56.750
that same process would have to be used
00:31:56.750 --> 00:32:00.370
to determine who pays back the funds.
00:32:00.370 --> 00:32:04.030
So for instance, in this proceeding,
00:32:04.030 --> 00:32:09.030
parties have argued that ERCOT
should net the RDPA charges
00:32:11.910 --> 00:32:14.185
in ancillary services above 9,000
00:32:14.185 --> 00:32:19.185
for entities who have both,
00:32:19.200 --> 00:32:21.770
who have subsidiaries like Vistra does.
00:32:21.770 --> 00:32:26.770
So Vistra has subsidiaries,
Luminant generation,
00:32:26.960 --> 00:32:31.430
and also the TXU,
you know, retail brands
00:32:32.990 --> 00:32:37.990
where the QSE received payments for RDPA
00:32:39.380 --> 00:32:43.790
and for ancillary services above 9,000.
00:32:43.790 --> 00:32:46.940
The LSEs paid those charges
00:32:47.910 --> 00:32:52.910
but that's just one line
item of the ERCOT bill.
00:32:53.280 --> 00:32:56.950
So if you were looking
at just those two numbers
00:32:56.950 --> 00:32:59.790
on the ERCOT settlement
statement, the Vistra company,
00:32:59.790 --> 00:33:03.760
and you netted them, the
Vistra companies would get zero.
00:33:03.760 --> 00:33:08.260
Even though we lost money, I
hate being the company up here
00:33:09.190 --> 00:33:13.070
trying to argue that, you
know, we're the biggest losers.
00:33:13.070 --> 00:33:15.860
That's a terrible
position for us to be in,
00:33:15.860 --> 00:33:19.590
but it is the position that
we're in and this version
00:33:19.590 --> 00:33:22.810
where you do nothing
but net one line item
00:33:22.810 --> 00:33:26.750
against another line item
would cause us to be entitled
00:33:26.750 --> 00:33:29.530
to $0 in this proceeding.
00:33:29.530 --> 00:33:32.700
And we think that that's
not the way to do it,
00:33:32.700 --> 00:33:35.340
but if you were to do that,
00:33:35.340 --> 00:33:38.830
you should not subject those TXU LSEs
00:33:38.830 --> 00:33:40.830
who got nothing from this proceeding
00:33:40.830 --> 00:33:44.720
to having to recover
those from its customers
00:33:44.720 --> 00:33:49.060
and pay them back to ERCOT
over the term of the loan,
00:33:49.060 --> 00:33:52.170
because that would put
them at a disadvantage
00:33:52.170 --> 00:33:56.350
in the competitive market
relative to all of the other LSEs
00:33:56.350 --> 00:33:59.443
who would benefit from
the securitization proceeding.
00:34:00.790 --> 00:34:01.623
Thank you.
00:34:05.590 --> 00:34:06.840
Do you have any redirect?
00:34:06.840 --> 00:34:09.080
Yes, one question, your honor.
00:34:09.080 --> 00:34:13.120
Ms. Frazier, Ms. Webking
asks you about complications
00:34:13.120 --> 00:34:17.660
that might arise from a
customer's first type of approach.
00:34:17.660 --> 00:34:21.240
Are there other approaches
that have been argued
00:34:21.240 --> 00:34:23.470
in this proceeding that
would also lead to similar
00:34:23.470 --> 00:34:25.530
types of complications?
00:34:25.530 --> 00:34:28.860
Yes, my position
is that if we're,
00:34:28.860 --> 00:34:31.490
if the Commission determines
00:34:31.490 --> 00:34:33.310
that we should do a netting approach,
00:34:33.310 --> 00:34:36.330
then it should be done
on an equitable basis,
00:34:36.330 --> 00:34:39.230
which means we should
look at everyone's hedges,
00:34:39.230 --> 00:34:42.560
not just self scheduled
ancillary services,
00:34:42.560 --> 00:34:47.340
not just RDPA and ancillary services.
00:34:47.340 --> 00:34:50.910
We should, let's look at
contracts, let's see who hedged,
00:34:50.910 --> 00:34:52.300
who had the opportunity to hedge
00:34:52.300 --> 00:34:54.670
and how those should be netted.
00:34:54.670 --> 00:34:56.640
Let's look at financial hedges,
00:34:56.640 --> 00:35:01.640
not just this one
charge type firm ERCOT,
00:35:01.720 --> 00:35:03.890
and that would be incredibly complicated
00:35:03.890 --> 00:35:05.600
and I don't think could be accomplished
00:35:05.600 --> 00:35:09.239
in the short timeframe that
the legislature has given us
00:35:09.239 --> 00:35:11.783
to implement this statute.
00:35:13.810 --> 00:35:15.120
That's all I have, your honor.
00:35:15.120 --> 00:35:17.823
Any recross on that topic?
00:35:19.610 --> 00:35:21.150
Any questions?
00:35:21.150 --> 00:35:22.090
Thank you.
00:35:22.090 --> 00:35:23.150
Thank you witnesses
00:35:37.890 --> 00:35:38.890
Commissioners staff.
00:35:46.820 --> 00:35:49.800
Staff calls to the
stand Daryl Tyson
00:35:55.854 --> 00:35:57.504
(mumbles), we were up so quickly.
00:36:03.490 --> 00:36:05.270
Mr. Tyson, you
are one of the ones
00:36:05.270 --> 00:36:07.213
who the parties indicated they,
00:36:07.213 --> 00:36:08.610
and they had no cross for.
00:36:08.610 --> 00:36:10.000
So, because of that,
00:36:10.000 --> 00:36:12.560
I cannot recall if I had you stand up
00:36:12.560 --> 00:36:14.460
and I swore you in or not.
00:36:14.460 --> 00:36:15.303
You did swear me in.
00:36:15.303 --> 00:36:16.136
I did.
00:36:16.136 --> 00:36:18.770
And just for the
record, it is Tyson.
00:36:18.770 --> 00:36:19.853
I'm sorry.
00:36:19.853 --> 00:36:20.686
It's okay.
00:36:20.686 --> 00:36:22.170
I think I knew that
name it's forgotten.
00:36:22.170 --> 00:36:23.470
I apologize as well, so.
00:36:25.670 --> 00:36:28.000
So we are directly
to you Commissioners
00:36:28.000 --> 00:36:30.603
for any questions you
may have for Mr. Tyson.
00:36:35.520 --> 00:36:36.410
That makes it easy.
00:36:36.410 --> 00:36:37.620
Thank you, sir.
00:36:37.620 --> 00:36:39.765
I wanted the Charles
Griffith treatment, thank you.
00:36:39.765 --> 00:36:42.015
(laughing)
00:36:48.240 --> 00:36:50.643
Staff calls to the
stand Rebecca Zeross
00:37:10.010 --> 00:37:13.070
Ms. Zeross please state
your name for the record.
00:37:13.070 --> 00:37:14.157
Rebecca Zeross.
00:37:15.533 --> 00:37:19.840
You have been presented
with the marked staff exhibit,
00:37:19.840 --> 00:37:21.520
I thought your direct testimony
00:37:21.520 --> 00:37:23.820
should be in front of you, correct?
00:37:23.820 --> 00:37:24.653
Yes.
00:37:26.661 --> 00:37:28.580
Will the answers
provided in your testimony
00:37:28.580 --> 00:37:31.870
be the same today as in
your pre-filed testimony?
00:37:31.870 --> 00:37:33.390
Yes, they would.
00:37:33.390 --> 00:37:35.130
Her testimony has already
been admitted to evidence
00:37:35.130 --> 00:37:37.430
so staff submits the witness
for cross examination.
00:37:37.430 --> 00:37:38.843
Thank you, Calpine.
00:37:39.684 --> 00:37:40.840
We just had
questions Your Honor.
00:37:40.840 --> 00:37:41.823
Go right ahead.
00:38:01.470 --> 00:38:03.240
Good morning, Your Honor,
members of the Commission,
00:38:03.240 --> 00:38:06.490
Miguel Suazo with Husch
Blackwell on behalf of Calpine.
00:38:06.490 --> 00:38:08.677
Good morning, Ms. Zeross, how are you?
00:38:08.677 --> 00:38:09.510
I'm fine.
00:38:09.510 --> 00:38:11.513
I just have a few
questions for you.
00:38:12.810 --> 00:38:14.750
You recommend the
various bits of information
00:38:14.750 --> 00:38:17.760
be submitted to the Commission
in making their decision
00:38:17.760 --> 00:38:19.410
in the parallel docket, is that correct?
00:38:19.410 --> 00:38:20.780
I do.
00:38:20.780 --> 00:38:25.750
And is any of that
information potentially protected
00:38:25.750 --> 00:38:29.720
or confidential or, you know,
CPI types of information?
00:38:29.720 --> 00:38:30.907
It is, yes.
00:38:30.907 --> 00:38:32.990
Are you familiar with
the Commission's rules
00:38:32.990 --> 00:38:34.000
on customer protection?
00:38:34.000 --> 00:38:35.685
I am yes.
00:38:35.685 --> 00:38:39.110
If someone was
gonna submit information
00:38:39.110 --> 00:38:42.900
that is typically protected
customer information,
00:38:42.900 --> 00:38:46.050
should it be submitted
with that designation?
00:38:46.050 --> 00:38:47.880
I would recommend that similar
00:38:47.880 --> 00:38:50.000
to other reporting requirements
about the Commission
00:38:50.000 --> 00:38:51.820
that anything that's
considered sensitive
00:38:51.820 --> 00:38:54.130
or had identifying customer information
00:38:54.130 --> 00:38:55.748
be submitted confidentially.
00:38:55.748 --> 00:38:56.893
Okay, and that's to predict-
00:38:56.893 --> 00:38:57.726
Ms. Zeross
00:38:57.726 --> 00:38:58.810
would you scooch your microphone
00:38:58.810 --> 00:38:59.990
a little bit closer to you please?
00:38:59.990 --> 00:39:00.823
Thank you.
00:39:03.220 --> 00:39:04.990
And that's to protect
those customers'
00:39:04.990 --> 00:39:06.989
sensitive information, correct?
00:39:06.989 --> 00:39:07.822
Yes.
00:39:07.822 --> 00:39:08.937
Okay, so the fact that it
wasn't in your testimony,
00:39:08.937 --> 00:39:11.450
it was just not because
it doesn't matter,
00:39:11.450 --> 00:39:13.700
it was just omitted for whatever reason.
00:39:13.700 --> 00:39:16.660
I think the Commissions
normal administrative
00:39:16.660 --> 00:39:18.286
procedures rules would apply.
00:39:18.286 --> 00:39:19.750
Okay.
00:39:19.750 --> 00:39:21.285
Thank you for that.
00:39:21.285 --> 00:39:22.860
A couple more questions.
00:39:22.860 --> 00:39:26.698
Did you hear Calpine witness,
Mr. Steven Schleimer testify?
00:39:26.698 --> 00:39:27.932
I did.
00:39:27.932 --> 00:39:31.100
And you're aware that
Calpine's position as a customer
00:39:31.100 --> 00:39:34.310
should be made whole first
in this proceeding, correct?
00:39:34.310 --> 00:39:35.660
I am.
00:39:35.660 --> 00:39:37.560
Does staff agree
with that position?
00:39:39.220 --> 00:39:42.490
I think that's an illegal
interpretation of the statute.
00:39:42.490 --> 00:39:43.710
Whether customers
should be paid
00:39:43.710 --> 00:39:45.363
versus a legal interpretation.
00:39:47.950 --> 00:39:52.797
I did not in the scope of my
testimony look at that issue.
00:39:52.797 --> 00:39:53.788
specifically no.
00:39:53.788 --> 00:39:55.940
Okay so you don't
know what staff position is.
00:39:55.940 --> 00:39:58.600
I individually do not
have a position of staff.
00:39:58.600 --> 00:40:00.827
Okay, no further questions.
00:40:06.040 --> 00:40:07.000
Thank you.
00:40:07.000 --> 00:40:07.833
Coalition?
00:40:09.690 --> 00:40:10.730
No question.
00:40:10.730 --> 00:40:11.993
174 Power?
00:40:13.340 --> 00:40:15.170
No questions, Your Honor.
00:40:15.170 --> 00:40:16.003
EDF?
00:40:18.570 --> 00:40:20.150
No questions, Your Honor.
00:40:20.150 --> 00:40:21.900
NG resources?
00:40:21.900 --> 00:40:23.840
No questions, Your Honor.
00:40:23.840 --> 00:40:24.870
Exelon?
00:40:24.870 --> 00:40:26.040
No questions.
00:40:26.040 --> 00:40:27.210
Just Energy?
00:40:27.210 --> 00:40:28.710
No questions, Your Honor.
00:40:28.710 --> 00:40:30.450
NRG Energy?
00:40:30.450 --> 00:40:31.616
Yes, Your Honor.
00:40:31.616 --> 00:40:33.033
Go right ahead.
00:40:37.105 --> 00:40:37.938
Good morning Commissioners.
00:40:37.938 --> 00:40:39.440
Andrea Russell on behalf of NRG.
00:40:40.730 --> 00:40:42.396
Good morning, Ms. Zeross
Good morning.
00:40:46.096 --> 00:40:47.700
Ms. Zeross you testify
regarding the process
00:40:47.700 --> 00:40:51.110
by which entities may opt
out of being obsessed, sorry,
00:40:51.110 --> 00:40:53.070
assessed uplift
charges, is that correct?
00:40:53.070 --> 00:40:54.440
I do, yes.
00:40:54.440 --> 00:40:56.310
And in your testimony,
you state that you reviewed
00:40:56.310 --> 00:40:58.520
PURA Chapter 39 Subchapter N
00:40:59.440 --> 00:41:00.990
in preparing your testimony, correct?
00:41:00.990 --> 00:41:01.930
Correct.
00:41:01.930 --> 00:41:06.670
And in particular
you looked at 39.653 D
00:41:06.670 --> 00:41:08.680
which specifies that the
Commission must develop
00:41:08.680 --> 00:41:12.020
the process for certain
market participants to opt out,
00:41:12.020 --> 00:41:15.610
including municipal
utilities, electric cooperatives,
00:41:15.610 --> 00:41:17.150
river authorities, certain reps
00:41:17.150 --> 00:41:19.100
and transmission voltage customers?
00:41:19.100 --> 00:41:19.933
Correct yes.
00:41:20.910 --> 00:41:24.047
To opt out these entities
must pay all invoices
00:41:24.047 --> 00:41:26.470
for usage during the period
of emergency, correct?
00:41:26.470 --> 00:41:27.790
Yes.
00:41:27.790 --> 00:41:31.480
Did you read or review
any other part of Chapter 39
00:41:31.480 --> 00:41:33.180
in preparation for your testimony?
00:41:34.800 --> 00:41:39.800
Specific to Subchapter N
or HB 4492 or in general?
00:41:40.310 --> 00:41:43.743
In particular section 39 159 B.
00:41:45.551 --> 00:41:50.551
I did not read specific
sections of PURA outside the bill
00:41:51.190 --> 00:41:53.043
or my standard knowledge.
00:41:54.190 --> 00:41:55.440
Your honor, may I approach?
00:41:55.440 --> 00:41:56.273
Yes.
00:42:09.490 --> 00:42:13.850
I've handed you a copy
of HB 4492, is that correct?
00:42:13.850 --> 00:42:15.330
Yes.
00:42:15.330 --> 00:42:19.083
And can you turn with me
to page four of the document?
00:42:22.850 --> 00:42:25.010
And actually, if you look
back on the previous page,
00:42:25.010 --> 00:42:29.240
you'll see that's part of section 39 159
00:42:30.750 --> 00:42:33.170
a starts on page three,
00:42:33.170 --> 00:42:34.460
and then if you turn to page four
00:42:34.460 --> 00:42:38.810
you can see on line four subsection B.
00:42:38.810 --> 00:42:39.830
Yes.
00:42:39.830 --> 00:42:41.680
Can you review
that section for me?
00:42:57.209 --> 00:42:59.010
Yes.
00:42:59.010 --> 00:43:00.100
Thank you.
00:43:00.100 --> 00:43:01.300
Now I know you're not a lawyer,
00:43:01.300 --> 00:43:03.090
but based on your
reading of this language,
00:43:03.090 --> 00:43:05.790
is it your understanding
that a market participant
00:43:05.790 --> 00:43:08.770
that has not paid all amounts
owed to ERCOT that had not,
00:43:08.770 --> 00:43:11.420
can not continue to be a
market participant in ERCOT?
00:43:28.920 --> 00:43:31.070
Without looking at
other parts of the statute,
00:43:31.070 --> 00:43:31.993
I mean, this is.
00:43:36.320 --> 00:43:38.370
Yeah, and I'm just asking
based on the language here,
00:43:38.370 --> 00:43:40.640
the language states
that if a market participant
00:43:40.640 --> 00:43:42.790
has not paid all amounts owed to ERCOT
00:43:42.790 --> 00:43:44.630
it can not continue to
be a market participant,
00:43:44.630 --> 00:43:45.523
is that correct?
00:43:48.340 --> 00:43:50.050
I mean, plain reading
of the words on paper,
00:43:50.050 --> 00:43:53.100
I think that's a broader
conversation for statute as a whole
00:43:53.100 --> 00:43:54.860
one thing that would go with it, sure.
00:43:54.860 --> 00:43:55.693
Absolutely.
00:43:57.140 --> 00:44:00.140
And do you have an
opinion about whether or not
00:44:00.140 --> 00:44:03.320
if an entity is not qualified
to remain a market participant
00:44:03.320 --> 00:44:04.817
in ERCOT under this section,
00:44:04.817 --> 00:44:07.220
should they be able to receive proceeds
00:44:07.220 --> 00:44:08.970
through the Subchapter and process?
00:44:13.170 --> 00:44:15.650
I think if an entity
is not paid in full,
00:44:15.650 --> 00:44:20.650
it would not be eligible
for funds under the statute.
00:44:20.780 --> 00:44:21.613
Okay.
00:44:23.240 --> 00:44:25.010
Just a couple
other quick questions.
00:44:25.010 --> 00:44:27.480
Have you had a chance to
review the statement of position
00:44:27.480 --> 00:44:30.923
that was filed by the joint
interveners on August 12th?
00:44:33.440 --> 00:44:37.293
I'm not familiar with that
specific statement of position.
00:44:40.840 --> 00:44:41.673
Your honor may I (mumbles) .
00:44:41.673 --> 00:44:42.506
Yeah.
00:44:56.250 --> 00:44:57.083
Thank you.
00:45:06.710 --> 00:45:08.760
Do you recognize this document?
00:45:08.760 --> 00:45:09.842
I do.
00:45:09.842 --> 00:45:10.675
Okay.
00:45:10.675 --> 00:45:12.630
So did you have a chance to review this
00:45:12.630 --> 00:45:14.760
in preparing for your testimony?
00:45:14.760 --> 00:45:16.242
I believe I've read this yes.
00:45:16.242 --> 00:45:17.075
Okay.
00:45:17.075 --> 00:45:19.250
And did you also read attachment a
00:45:21.492 --> 00:45:24.520
which it provides a
proposed opt-out notice
00:45:24.520 --> 00:45:26.613
for transmission
voltage level customers?
00:45:35.190 --> 00:45:36.023
Yes.
00:45:37.250 --> 00:45:38.950
Does this form
provide a reasonable way
00:45:38.950 --> 00:45:41.590
for transmission voltage level customers
00:45:41.590 --> 00:45:45.540
to opt out of the uplift charges
00:45:45.540 --> 00:45:47.940
that will be assessed
pursuant to Subchapter N?
00:45:57.097 --> 00:45:58.480
I feel like it provides
basic information,
00:45:58.480 --> 00:46:01.080
whether the Commission would
determine the specific language
00:46:01.080 --> 00:46:03.390
would be a requirement for all reps
00:46:03.390 --> 00:46:04.572
to contact our customers,
00:46:04.572 --> 00:46:07.080
I think would be a policy
decision for the Commission.
00:46:07.080 --> 00:46:07.913
Yeah, but overall,
00:46:07.913 --> 00:46:08.746
do you believe it's reasonable
00:46:08.746 --> 00:46:10.190
just in your personal opinion?
00:46:30.670 --> 00:46:33.923
I'm sorry, I haven't memorized
the details of the form.
00:46:42.250 --> 00:46:45.010
It seems to contemplate
that there would be also
00:46:45.010 --> 00:46:48.933
an attached form for the
customer to notice the rep.
00:46:50.056 --> 00:46:53.900
And so I think it does extend perhaps
00:46:53.900 --> 00:46:56.540
beyond my basic recommendation.
00:46:56.540 --> 00:46:57.540
Okay.
00:46:57.540 --> 00:46:58.373
All right.
00:46:58.373 --> 00:46:59.330
Thank you.
00:46:59.330 --> 00:47:01.680
No further questions, your honor.
00:47:01.680 --> 00:47:02.830
All right. Thank you.
00:47:06.930 --> 00:47:07.763
Rayburn?
00:47:09.434 --> 00:47:12.017
(indistinct)
00:47:18.241 --> 00:47:19.415
Good morning, Ms. Zeross
00:47:19.415 --> 00:47:20.248
Good morning.
00:47:20.248 --> 00:47:23.203
I'm (indistinct) representing
Rayburn Countries Cooperative.
00:47:24.690 --> 00:47:26.690
I just have one quick question.
00:47:26.690 --> 00:47:30.380
Do you still have a copy
of HB 4492 in front of you?
00:47:30.380 --> 00:47:31.213
I do.
00:47:32.460 --> 00:47:34.850
If you would turn please to Subchapter N
00:47:36.440 --> 00:47:39.033
which is section 39 651,
00:47:46.480 --> 00:47:48.603
and then I'm looking at subsection D,
00:47:53.790 --> 00:47:57.070
which begins the proceeds
of debt obligations issued.
00:47:57.070 --> 00:47:58.500
Yes.
00:47:58.500 --> 00:48:02.570
So if you go down to on
my copy it's on line nine,
00:48:02.570 --> 00:48:06.610
it says a load serving
entity that receives proceeds
00:48:06.610 --> 00:48:10.220
from debt obligations may
use the proceeds solely
00:48:10.220 --> 00:48:13.230
for the purposes of
fulfilling payment obligations
00:48:13.230 --> 00:48:15.610
directly related to such costs
00:48:15.610 --> 00:48:18.150
and refunding such
costs to retail customers
00:48:18.150 --> 00:48:20.240
who have paid otherwise
it would be obligated
00:48:20.240 --> 00:48:22.610
to pay such costs, is that correct?
00:48:22.610 --> 00:48:23.750
Yes.
00:48:23.750 --> 00:48:26.300
Would you agree
that that does imply
00:48:26.300 --> 00:48:30.180
there would be a
situation where an entity
00:48:30.180 --> 00:48:33.400
might not have paid yet and
uses the securitized funds
00:48:33.400 --> 00:48:36.293
to make those payment
obligations to ERCOT?
00:48:44.270 --> 00:48:47.820
I wouldn't read that as
specifically paying ERCOT
00:48:47.820 --> 00:48:49.900
and fulfilling payment obligations
00:48:49.900 --> 00:48:51.280
can be much more broad than that.
00:48:51.280 --> 00:48:53.970
I think it could be to suppliers
or other contractual things
00:48:53.970 --> 00:48:55.303
behind that relationship.
00:48:57.030 --> 00:48:58.023
Okay, thank you.
00:49:01.900 --> 00:49:02.800
That's all I have.
00:49:06.530 --> 00:49:07.685
Tenaska?
00:49:07.685 --> 00:49:08.563
No questions, Your Honor.
00:49:08.563 --> 00:49:09.396
Texpo?
00:49:09.396 --> 00:49:10.718
No questions Your Honor.
00:49:10.718 --> 00:49:11.866
TIEC?
00:49:11.866 --> 00:49:13.707
No questions, Your Honor.
00:49:13.707 --> 00:49:14.820
TXU and Luminant?
00:49:14.820 --> 00:49:16.160
No questions Your Honor.
00:49:16.160 --> 00:49:17.370
LCRA?
00:49:17.370 --> 00:49:18.520
Yes Your Honor.
00:49:29.420 --> 00:49:31.650
Good morning, Ms. Zeross
00:49:31.650 --> 00:49:32.660
My name is Emily Jolly
00:49:32.660 --> 00:49:34.283
and I'm here representing LCRA.
00:49:35.795 --> 00:49:39.140
I wanna thank you for your
testimony in this proceeding
00:49:39.140 --> 00:49:42.540
and I have a few questions
regarding your testimony
00:49:44.890 --> 00:49:49.500
and you're generally familiar with LCRA
00:49:49.500 --> 00:49:51.330
as a river authority that participates
00:49:51.330 --> 00:49:52.750
in the ERCOT wholesale market.
00:49:52.750 --> 00:49:53.840
Yes.
00:49:53.840 --> 00:49:58.620
And LCRA also serves as
a qualified scheduling entity
00:49:58.620 --> 00:50:00.810
and has wholesale customers that include
00:50:00.810 --> 00:50:04.240
municipally-owned utilities
and electric cooperatives.
00:50:04.240 --> 00:50:05.430
Yes.
00:50:05.430 --> 00:50:07.350
And we can for
ease of reference,
00:50:07.350 --> 00:50:09.820
refer collectively to
these types of entities
00:50:09.820 --> 00:50:14.510
as non opt-in entities or
NOIEs, can we agree on that?
00:50:14.510 --> 00:50:15.343
Yes.
00:50:16.600 --> 00:50:19.830
So I'd like to look
beginning at page four
00:50:19.830 --> 00:50:24.583
of your testimony in this
proceeding line 13, are you there.
00:50:35.320 --> 00:50:38.550
Are we page number
four B stand four.
00:50:38.550 --> 00:50:40.750
I'm looking at the
page numbers at the top
00:50:40.750 --> 00:50:42.476
page four of 12.
00:50:42.476 --> 00:50:43.309
Okay.
00:50:45.710 --> 00:50:47.710
And in this portion
of your testimony,
00:50:47.710 --> 00:50:52.710
you're describing the
qualifications to be able to opt out.
00:50:52.750 --> 00:50:55.480
And my questions today
are all going to be generally
00:50:55.480 --> 00:50:58.243
related to the opt-out process or NOIEs.
00:51:00.090 --> 00:51:04.870
And you make a reference to
having paid all invoices owed
00:51:04.870 --> 00:51:06.540
in order to qualify.
00:51:06.540 --> 00:51:09.640
Do you agree that the
only invoices at issue
00:51:09.640 --> 00:51:12.660
are those that are issued
by ERCOT to a QSE
00:51:12.660 --> 00:51:14.803
for any LSE that it represents?
00:51:18.990 --> 00:51:20.890
I think there's a for NOIEs,
00:51:20.890 --> 00:51:24.570
that usage should be to ERCOT, I think,
00:51:24.570 --> 00:51:28.873
or entities specifically customers,
00:51:28.873 --> 00:51:30.640
because the opt out does provide
00:51:30.640 --> 00:51:33.450
for a transmission
voltage customer served
00:51:33.450 --> 00:51:34.327
by a wrapped opt-out,
00:51:34.327 --> 00:51:37.490
but that usage would be to their rep.
00:51:37.490 --> 00:51:38.787
Thank you, and to clarify,
00:51:38.787 --> 00:51:40.900
I'm just asking specifically
about the NOIEs.
00:51:40.900 --> 00:51:42.520
Okay.
00:51:42.520 --> 00:51:44.750
So you agree that
here you're referring
00:51:44.750 --> 00:51:48.630
specifically to an invoice
that is owed to ERCOT?
00:51:48.630 --> 00:51:49.463
Yes.
00:51:49.463 --> 00:51:50.520
Thank you.
00:51:50.520 --> 00:51:54.200
And then later in the same
response you testify regarding
00:51:54.200 --> 00:51:57.870
the consequences of an opt-out election.
00:51:57.870 --> 00:52:02.650
Do you agree that a non-opt
in entity load serving entity
00:52:02.650 --> 00:52:07.650
choosing to opt out faces
an all or nothing proposition?
00:52:07.650 --> 00:52:11.960
In other words, either all
of its load will be included
00:52:11.960 --> 00:52:14.780
when ERCOT is allocating uplift charges,
00:52:14.780 --> 00:52:18.563
or if it opts out that all of
its load would be excluded?
00:52:19.440 --> 00:52:22.130
For the non opt-in entities
since they would be opting out
00:52:22.130 --> 00:52:25.290
there, their entity as a whole
00:52:25.290 --> 00:52:28.210
versus having specific customers
make individual decisions
00:52:28.210 --> 00:52:30.420
to opt out, that seems
to be correct yes.
00:52:30.420 --> 00:52:31.253
Thank you.
00:52:32.160 --> 00:52:34.810
I also wanna look at
page six of your testimony,
00:52:34.810 --> 00:52:36.060
if you could turn to that
00:52:39.370 --> 00:52:42.550
And here in the question
that begins on line eight,
00:52:42.550 --> 00:52:45.830
you describe a process
for the parallel proceeding
00:52:45.830 --> 00:52:48.610
and you're proposing
here a 30 day proceedings
00:52:48.610 --> 00:52:50.240
start to finish for the parallel docket.
00:52:50.240 --> 00:52:51.073
Is that correct?
00:52:53.170 --> 00:52:55.280
I think 30 days
would be for parties
00:52:55.280 --> 00:52:57.030
to file their application
in that proceeding
00:52:57.030 --> 00:52:59.306
because I know entities have intervened
00:52:59.306 --> 00:53:01.230
now the Commission
has made a determination
00:53:01.230 --> 00:53:03.720
of the purpose of that
parallel proceeding docket.
00:53:03.720 --> 00:53:05.550
I think 30 days were an application
00:53:05.550 --> 00:53:07.570
and then a timeline
of procedural schedule
00:53:07.570 --> 00:53:10.520
would be established, but
30 days of the application.
00:53:10.520 --> 00:53:12.970
Okay, thank you
for that clarification.
00:53:12.970 --> 00:53:15.560
So is it fair to say
that you are advocating
00:53:15.560 --> 00:53:19.910
that the parallel proceeding
be processed expeditiously?
00:53:19.910 --> 00:53:21.100
Yes.
00:53:21.100 --> 00:53:23.470
And would you
agree as a policy matter
00:53:23.470 --> 00:53:25.830
that the process in
the parallel proceedings
00:53:25.830 --> 00:53:28.860
should be efficient and not pose
00:53:28.860 --> 00:53:31.720
an undue administrative
burden on the Commission
00:53:31.720 --> 00:53:34.703
or ERCOT or the parties themselves?
00:53:36.340 --> 00:53:37.173
I agree.
00:53:37.173 --> 00:53:38.250
I think some of the other timelines
00:53:38.250 --> 00:53:41.310
considered for the opt-in
and the documenting exposure
00:53:41.310 --> 00:53:43.780
are covered in Ms. Bivens testimony.
00:53:43.780 --> 00:53:44.790
Okay, but in general,
00:53:44.790 --> 00:53:46.440
those are all goals that you support
00:53:46.440 --> 00:53:48.307
from a policy standpoint.
00:53:48.307 --> 00:53:50.850
I think the intent of
this statute in general
00:53:50.850 --> 00:53:54.980
was to process quickly
internet abbreviated timeline.
00:53:54.980 --> 00:53:55.920
So yes.
00:53:55.920 --> 00:53:56.753
Thank you.
00:53:58.190 --> 00:54:01.370
Also on page six with a
question beginning on line 20,
00:54:01.370 --> 00:54:05.490
you described the entities
that are eligible to opt out,
00:54:05.490 --> 00:54:07.190
and we've already
talked about that a little bit,
00:54:07.190 --> 00:54:10.010
but just wanted to clarify
one additional point.
00:54:10.010 --> 00:54:13.130
You agree that an
individual retail customer
00:54:13.130 --> 00:54:14.890
of a NOIE, for example,
00:54:14.890 --> 00:54:18.460
an MOU customer or
a cooperative customer
00:54:19.340 --> 00:54:22.010
could not submit an application
00:54:22.010 --> 00:54:24.370
to opt out under the statute.
00:54:24.370 --> 00:54:27.550
The statute, the 39653 D
00:54:27.550 --> 00:54:30.030
provision for individual
customers to opt out
00:54:30.030 --> 00:54:33.430
is limited to transmission
voltage customers
00:54:33.430 --> 00:54:34.450
served by a rep.
00:54:34.450 --> 00:54:39.450
So it does not contemplate
NOIE's customers opting out.
00:54:39.480 --> 00:54:41.620
Thank you, and so you
agree that for a NOIE,
00:54:41.620 --> 00:54:45.430
the opt-out is actually
determined at the entity level,
00:54:45.430 --> 00:54:48.490
not an individual customer premise.
00:54:48.490 --> 00:54:49.323
Yes.
00:54:49.323 --> 00:54:50.156
Thank you.
00:54:56.130 --> 00:54:57.380
So back on page four,
00:54:57.380 --> 00:54:59.140
you talk a little bit about the right
00:54:59.140 --> 00:55:02.150
to receive uplift financing.
00:55:02.150 --> 00:55:05.180
And just to clarify, you
agree that that's a right,
00:55:05.180 --> 00:55:08.210
that is created solely
under this legislation
00:55:08.210 --> 00:55:10.103
house bill 4492?
00:55:12.960 --> 00:55:14.550
I'm sorry, can you
clarify your question?
00:55:14.550 --> 00:55:15.383
Sure.
00:55:15.383 --> 00:55:18.290
So an entity has no
right outside of this statute
00:55:18.290 --> 00:55:22.230
and the provisions of house bill 4492
00:55:22.230 --> 00:55:25.310
to claim uplift financing?
00:55:25.310 --> 00:55:28.060
I think the uplift financing
of the debt obligation order
00:55:28.060 --> 00:55:29.920
that will result from this proceeding
00:55:29.920 --> 00:55:34.250
is self-contained to the
sections added under HB 4492.
00:55:34.250 --> 00:55:38.840
Okay, so 4492 is the sole
conveyance of that, right
00:55:38.840 --> 00:55:39.950
to receive proceeds.
00:55:39.950 --> 00:55:42.750
For this specific
financing order, yes.
00:55:42.750 --> 00:55:44.650
Okay, I appreciate that clarification.
00:55:46.260 --> 00:55:47.860
No further questions, thank you.
00:55:49.140 --> 00:55:49.973
Thank you.
00:55:51.970 --> 00:55:53.490
East Texas?
00:55:53.490 --> 00:55:54.860
No questions, your honor.
00:55:54.860 --> 00:55:56.060
Golden Spread?
00:55:56.060 --> 00:55:58.200
Ms. Jolly asked my questions
00:55:58.200 --> 00:55:59.630
Okay.
00:55:59.630 --> 00:56:00.653
South Texas?
00:56:01.840 --> 00:56:02.740
Yes, your honor.
00:56:14.100 --> 00:56:16.050
Good morning, your
honor, Commissioners
00:56:16.050 --> 00:56:19.572
Carlos Carrasco for South
Texas Electric Cooperative.
00:56:19.572 --> 00:56:20.405
Good morning Ms. Zeross.
00:56:20.405 --> 00:56:21.238
Good morning.
00:56:21.238 --> 00:56:23.860
I just have a few questions
for you on the opt-out process
00:56:23.860 --> 00:56:25.460
you discussed in your testimony.
00:56:27.150 --> 00:56:29.710
I know Ms. Jolly was asking
you about NOIE's specifically,
00:56:29.710 --> 00:56:32.700
and that's kind of gonna
be my focus as well.
00:56:32.700 --> 00:56:34.620
So in your testimony you say that NOIE's
00:56:34.620 --> 00:56:38.130
have a designated QSE
for settlement with archives,
00:56:38.130 --> 00:56:39.230
is that correct?
00:56:39.230 --> 00:56:40.130
Yes.
00:56:40.130 --> 00:56:42.760
Okay and ERCOT knows
which boundary meters
00:56:42.760 --> 00:56:45.383
are associated with that
specific NOIE's, correct?
00:56:47.330 --> 00:56:48.163
Yes.
00:56:48.163 --> 00:56:51.370
Okay and you also
referred to that situation
00:56:51.370 --> 00:56:53.290
with NOIE's and ERCOT knowing that
00:56:53.290 --> 00:56:57.190
as the most simple paradigm
when it comes to documentation
00:56:57.190 --> 00:57:00.060
needed by ERCOT
to facilitate the opt-out.
00:57:00.060 --> 00:57:00.923
Is that correct?
00:57:00.923 --> 00:57:03.240
Yes, because ERCOT has
a relationship with an entity
00:57:03.240 --> 00:57:06.100
as a whole versus settling
on individual premises.
00:57:06.100 --> 00:57:08.120
I think that's the most
simple relationship.
00:57:08.120 --> 00:57:11.800
Okay, and would you
agree with me that a QSE
00:57:11.800 --> 00:57:14.590
can represent more than one LSE?
00:57:14.590 --> 00:57:15.423
Yes.
00:57:15.423 --> 00:57:17.980
Okay, and for purposes
of this proceeding,
00:57:17.980 --> 00:57:22.280
do you think it's likely that
a QSE will likely represent
00:57:22.280 --> 00:57:25.720
several LSEs that
have chosen to opt out?
00:57:25.720 --> 00:57:28.670
I think as Mr. O'Gorman
then testified
00:57:28.670 --> 00:57:32.070
the QSE relationships
one are not very transparent
00:57:32.070 --> 00:57:32.903
at the staff level,
00:57:32.903 --> 00:57:37.660
and it can go from very
simplistic to a single QSE and LSE
00:57:37.660 --> 00:57:42.130
to a QSE with multiple sub QSEs
00:57:42.130 --> 00:57:46.340
and LSEs with multiple
affiliations under it.
00:57:46.340 --> 00:57:50.040
So that could be the case,
but it's not necessarily a given.
00:57:50.040 --> 00:57:52.820
Okay, but you would
agree that it is possible.
00:57:52.820 --> 00:57:53.653
Yes.
00:57:53.653 --> 00:57:57.410
Okay, so for those situations
where we have a single QSE
00:57:57.410 --> 00:58:00.540
representing several LSEs
that have chosen opt-out
00:58:02.270 --> 00:58:04.280
and again, let's talk about this
00:58:04.280 --> 00:58:06.111
in the context of NOIE's.
00:58:06.111 --> 00:58:08.910
Again, you referred to this
as the most simple paradigm
00:58:08.910 --> 00:58:12.060
when it comes to documentation
needed by ERCOT.
00:58:12.060 --> 00:58:14.660
Do you think it's
reasonable that a single QSE
00:58:14.660 --> 00:58:17.100
would be able to submit documentation
00:58:17.100 --> 00:58:20.903
on behalf of these
LSEs for that process?
00:58:20.903 --> 00:58:25.903
I think there are
some LSEs who are,
00:58:26.570 --> 00:58:28.750
some entities who may
have designated a party
00:58:28.750 --> 00:58:29.920
as their LSE as well.
00:58:29.920 --> 00:58:31.750
And I think it would
be appropriate for them
00:58:31.750 --> 00:58:33.940
to file on behalf of them.
00:58:33.940 --> 00:58:37.370
I don't know if it's appropriate
for a QSE as a whole,
00:58:37.370 --> 00:58:41.810
because if it's a QSE and
not that LSE relationship,
00:58:46.220 --> 00:58:48.860
it would be appropriate for the QSE
00:58:48.860 --> 00:58:50.790
just to file for everyone under it.
00:58:50.790 --> 00:58:51.623
Okay.
00:58:51.623 --> 00:58:54.702
So for the situation where
you have a single QSE
00:58:54.702 --> 00:58:58.550
does represent all opt-out LSEs,
00:58:58.550 --> 00:59:00.770
would that be reasonable for that QSE
00:59:00.770 --> 00:59:03.733
to file that documentation
on behalf of those LSEs?
00:59:04.680 --> 00:59:07.260
So for a QSE to file
instead of the LSE?
00:59:07.260 --> 00:59:10.080
Right, for the QSE to
submit that documentation
00:59:10.080 --> 00:59:12.040
to the Commission and to ERCOT
00:59:12.040 --> 00:59:16.190
so as to not administratively
burden ERCOT or the Commission
00:59:16.190 --> 00:59:17.763
as Ms. Jolly was talking about.
00:59:22.800 --> 00:59:24.250
I don't think it would
be inappropriate.
00:59:24.250 --> 00:59:27.010
I would question if ERCOT can,
00:59:27.010 --> 00:59:29.820
if that meets its qualifications
to process that, yes.
00:59:29.820 --> 00:59:32.003
Okay, no further questions.
00:59:33.940 --> 00:59:34.773
Thank you.
00:59:36.463 --> 00:59:38.381
Austin?
00:59:38.381 --> 00:59:39.510
No questions, Your Honor.
00:59:39.510 --> 00:59:40.343
Lubbock.
00:59:40.343 --> 00:59:41.810
No questions, Your Honor.
00:59:41.810 --> 00:59:42.643
OPUC?
00:59:42.643 --> 00:59:43.631
No questions, Your Honor.
00:59:43.631 --> 00:59:44.464
ERCOT?
00:59:44.464 --> 00:59:47.350
No questions, Your Honor.
00:59:47.350 --> 00:59:48.183
Commissioners?
00:59:51.469 --> 00:59:52.727
(indistinct)
00:59:52.727 --> 00:59:53.560
Okay.
00:59:53.560 --> 00:59:55.000
Do you have any
redirect, Mr. Walker?
00:59:55.000 --> 00:59:56.400
No, your honor.
00:59:56.400 --> 00:59:57.300
Thank you ma'am.
01:00:02.170 --> 01:00:03.497
Who's your next witness?
01:00:05.980 --> 01:00:07.533
Staff calls Carrie Bivens.
01:00:35.470 --> 01:00:36.470
Good morning, Ms. Bivens.
01:00:36.470 --> 01:00:38.550
Can you please state
your name for the record?
01:00:38.550 --> 01:00:40.000
Good morning Carrie Bivens.
01:00:41.630 --> 01:00:43.040
And do you have
in front of you,
01:00:43.040 --> 01:00:45.980
what has been admitted
as staff exhibit two?
01:00:45.980 --> 01:00:47.230
Yes, I do.
01:00:47.230 --> 01:00:49.710
And is that your direct
testimony in this proceeding?
01:00:49.710 --> 01:00:50.543
Yes, it is.
01:00:51.380 --> 01:00:53.850
And Ms. Bivens just
to clarify for the record
01:00:53.850 --> 01:00:56.010
so as to avoid any confusion,
01:00:56.010 --> 01:00:58.360
are you testifying on
behalf of Commission staff
01:00:58.360 --> 01:00:59.193
in this proceeding?
01:00:59.193 --> 01:01:00.026
Yes, I am.
01:01:00.026 --> 01:01:02.176
And so your opinions,
01:01:02.176 --> 01:01:07.176
or your opinions in your
testimony might be informed
01:01:07.190 --> 01:01:10.300
by your position as the
independent market monitor,
01:01:10.300 --> 01:01:12.705
but they are staff's
positions in this proceeding.
01:01:12.705 --> 01:01:13.750
That is correct.
01:01:13.750 --> 01:01:15.730
I tender the witness
for cross examination.
01:01:15.730 --> 01:01:16.563
Thank you.
01:01:18.210 --> 01:01:19.630
Calpine?
01:01:19.630 --> 01:01:20.903
Yes, Your Honor.
01:01:42.515 --> 01:01:43.840
Thank you, your honor,
members of the Commission,
01:01:43.840 --> 01:01:47.240
Miguel Suazo with Husch
Blackwell on behalf of Calpine.
01:01:47.240 --> 01:01:48.090
Good morning Ms. Bivens.
01:01:48.090 --> 01:01:49.510
Good morning.
01:01:49.510 --> 01:01:50.880
Just a few questions for you.
01:01:50.880 --> 01:01:53.523
Are you familiar with Calpine's position
01:01:53.523 --> 01:01:58.200
in terms of making sure
customers are made whole first?
01:01:58.200 --> 01:01:59.710
Yes, I am.
01:01:59.710 --> 01:02:00.710
Do you agree
with that position?
01:02:00.710 --> 01:02:01.543
I do not.
01:02:01.543 --> 01:02:02.810
Okay, why not?
01:02:02.810 --> 01:02:06.550
I do not think that
is the best process
01:02:06.550 --> 01:02:08.770
for the health of the
entire wholesale market.
01:02:08.770 --> 01:02:10.419
Okay.
01:02:10.419 --> 01:02:14.077
Are you aware that
Calpine proposes the LLC
01:02:15.860 --> 01:02:19.910
is an ERCOT calculate the end
use customer refund amounts?
01:02:19.910 --> 01:02:21.130
Can you say that one more time?
01:02:21.130 --> 01:02:24.220
Calpine proposes the ERCOT
calculate the end use customer
01:02:24.220 --> 01:02:25.180
refund amounts?
01:02:25.180 --> 01:02:26.013
Yes, I am.
01:02:26.013 --> 01:02:26.846
Okay.
01:02:31.980 --> 01:02:34.490
So your testimony entails information
01:02:34.490 --> 01:02:37.128
that you propose to be
submitted in the parallel docket,
01:02:37.128 --> 01:02:37.961
correct?
01:02:37.961 --> 01:02:38.794
Correct.
01:02:38.794 --> 01:02:41.280
And did you hear Calpine
witness Steve Schleimer
01:02:41.280 --> 01:02:42.130
testified earlier?
01:02:42.130 --> 01:02:42.963
Yes.
01:02:42.963 --> 01:02:47.600
And did you hear Ms.
Zeross Was testify just now?
01:02:47.600 --> 01:02:48.680
Yes.
01:02:48.680 --> 01:02:52.110
And did you hear
her say that information
01:02:52.110 --> 01:02:54.970
that's proprietary or
confidential in nature
01:02:54.970 --> 01:02:57.610
should be submitted
accordingly to the Commission?
01:02:57.610 --> 01:02:58.487
I did hear that, yes.
01:02:58.487 --> 01:03:00.397
And do you agree with that?
01:03:01.300 --> 01:03:04.920
I'm not an expert in
procedural submission
01:03:04.920 --> 01:03:05.865
to the Commission.
01:03:05.865 --> 01:03:07.820
But generally speaking
confidential information
01:03:07.820 --> 01:03:09.650
should be designated, would you say?
01:03:09.650 --> 01:03:11.410
That seems fair.
01:03:11.410 --> 01:03:12.433
Okay, thank you.
01:03:14.380 --> 01:03:17.870
I'd also like to ask you
a little bit about netting,
01:03:17.870 --> 01:03:19.370
you advocate a netting approach
01:03:19.370 --> 01:03:21.540
to determine analysis exposure
01:03:21.540 --> 01:03:24.252
for purposes of
allocating uplift, correct?
01:03:24.252 --> 01:03:25.085
Yes.
01:03:25.085 --> 01:03:27.990
Okay, and if an
LSE gets proceeds,
01:03:27.990 --> 01:03:31.500
then they have an
opportunity to refund customers
01:03:31.500 --> 01:03:32.333
those funds, correct?
01:03:32.333 --> 01:03:33.410
Correct.
01:03:33.410 --> 01:03:35.560
But if they don't get
any of those proceeds,
01:03:35.560 --> 01:03:37.410
then they don't get that opportunity.
01:03:38.750 --> 01:03:40.560
Yes, not with uplift financing,
01:03:40.560 --> 01:03:42.930
they would not have
any proceeds to distribute.
01:03:42.930 --> 01:03:43.763
And, you know,
01:03:43.763 --> 01:03:45.540
I really appreciated the care
01:03:45.540 --> 01:03:47.750
that you put into your testimony
and the examples you gave
01:03:47.750 --> 01:03:50.450
it really helped us and our
client kind of think through
01:03:50.450 --> 01:03:52.855
how that would work as you propose,
01:03:52.855 --> 01:03:55.990
but I'd like to kind of walk
through one hypothetical.
01:03:55.990 --> 01:03:58.813
And so let's take two LSEs,
01:04:00.070 --> 01:04:02.350
the first is part of a corporate family
01:04:02.350 --> 01:04:04.520
that includes generation affiliates,
01:04:04.520 --> 01:04:07.140
and the second would be a standalone LSE
01:04:07.140 --> 01:04:08.773
with no generation affiliates.
01:04:10.830 --> 01:04:14.430
And let's assume that both
LSE serve end use customers
01:04:14.430 --> 01:04:16.730
that are exposed to RDPA charges
01:04:16.730 --> 01:04:20.803
and ancillary services above
the system-wide offer cap.
01:04:21.870 --> 01:04:25.563
If the Commission approves
netting as you propose,
01:04:26.870 --> 01:04:29.560
the customer over
the first LSE is at risk
01:04:29.560 --> 01:04:32.450
of having those costs
but not being refunded
01:04:32.450 --> 01:04:34.690
by the financing
proceeds, is that accurate?
01:04:34.690 --> 01:04:36.635
My focus is on the liquidity
01:04:36.635 --> 01:04:38.240
and stability of the wholesale market.
01:04:38.240 --> 01:04:39.470
Okay, so that's a yes.
01:04:39.470 --> 01:04:40.303
Mm-hmm.
01:04:40.303 --> 01:04:41.136
Okay.
01:04:41.136 --> 01:04:42.800
Is that a neither
yes or a no, instead of.
01:04:42.800 --> 01:04:44.230
Yes.
01:04:44.230 --> 01:04:47.570
But the second LSE
customers will be funded,
01:04:47.570 --> 01:04:49.570
will be refunded from
the financing proceeds.
01:04:49.570 --> 01:04:50.403
Do I have that right?
01:04:50.403 --> 01:04:53.880
Or the LSE will use it to
meet its payment obligations.
01:04:53.880 --> 01:04:57.910
Okay, and so I guess,
as my client proposes,
01:04:57.910 --> 01:05:02.190
we're asking that the LSE
verified that those costs
01:05:02.190 --> 01:05:04.630
have been passed through
is that you're understanding?
01:05:04.630 --> 01:05:05.780
Say that one more time.
01:05:05.780 --> 01:05:08.630
My client's proposing that
the LSE verifies those costs.
01:05:08.630 --> 01:05:09.910
Your Honor, I'm gonna object.
01:05:09.910 --> 01:05:13.130
If he'd like to point the
witness to the actual testimony
01:05:13.130 --> 01:05:14.099
that he's talking about...
01:05:14.099 --> 01:05:14.932
That would be helpful.
01:05:14.932 --> 01:05:17.000
I'd like her to have
it in front of her.
01:05:17.000 --> 01:05:18.870
Okay let me try and move on.
01:05:18.870 --> 01:05:20.670
I know we don't have that much time.
01:05:28.080 --> 01:05:32.050
So let me see if I understand
your testimony accurately,
01:05:32.050 --> 01:05:35.020
just because an LSE received
net payments from ERCOT
01:05:35.020 --> 01:05:39.240
does not mean that that LSE
actually made money, correct?
01:05:39.240 --> 01:05:42.121
Because an LSE
received net payments,
01:05:42.121 --> 01:05:44.473
I need you to define made money.
01:05:46.320 --> 01:05:49.160
So just because they received
the net payments from ERCOT,
01:05:49.160 --> 01:05:52.730
that doesn't actually
mean that they profited
01:05:52.730 --> 01:05:55.490
from those monies cause
they could help other parties
01:05:55.490 --> 01:05:56.677
or any number of things
could happen to them.
01:05:56.677 --> 01:06:00.223
I'm not aware of what
goes on outside of ERCOT.
01:06:08.660 --> 01:06:09.810
No further questions.
01:06:10.830 --> 01:06:11.663
Thank you.
01:06:11.663 --> 01:06:12.496
Coalition?
01:06:13.772 --> 01:06:14.980
(indistinct)
01:06:14.980 --> 01:06:16.233
174 Power?
01:06:17.130 --> 01:06:18.960
No questions, your honor.
01:06:18.960 --> 01:06:20.470
EDF?
01:06:20.470 --> 01:06:21.820
No questions, your honor.
01:06:22.760 --> 01:06:24.290
NG Resources?
01:06:24.290 --> 01:06:25.190
Yes, your honor.
01:06:45.360 --> 01:06:46.660
Good morning, Ms. Bivens.
01:06:46.660 --> 01:06:47.493
Good morning.
01:06:47.493 --> 01:06:49.183
I am Steven Mac
representing NG.
01:06:50.450 --> 01:06:52.780
We just had a few
questions for you to clarify,
01:06:52.780 --> 01:06:54.410
clarify some numbers.
01:06:54.410 --> 01:06:57.693
If you don't mind turning to
page 18 of your testimony.
01:07:04.297 --> 01:07:05.297
I'm there.
01:07:14.300 --> 01:07:17.380
And on lines 21 through 24,
01:07:17.380 --> 01:07:21.850
you mentioned the 2.1
billion figure in a new state
01:07:21.850 --> 01:07:25.970
the legislature got that
from IMM calculations
01:07:25.970 --> 01:07:29.610
contained in the March 11th,
2021 letter to the Commission.
01:07:29.610 --> 01:07:31.870
That is my understanding, yes.
01:07:31.870 --> 01:07:34.400
Did you perform
that calculation?
01:07:34.400 --> 01:07:35.674
My team did.
01:07:35.674 --> 01:07:40.674
And to clarify, was it a
$2.1 billion figure or 1.9.
01:07:42.656 --> 01:07:44.087
It was 1.9.
01:07:44.087 --> 01:07:44.920
Okay.
01:07:48.780 --> 01:07:52.930
Did you calculate or
provide to the legislature
01:07:52.930 --> 01:07:56.080
during the legislative
process for this bill
01:07:56.080 --> 01:07:58.010
the total charges?
01:07:58.010 --> 01:07:58.843
No, I did not.
01:07:58.843 --> 01:07:59.990
I was not asked to do so.
01:08:01.137 --> 01:08:03.220
Have you calculated them since?
01:08:03.220 --> 01:08:04.440
No, I have not.
01:08:04.440 --> 01:08:05.930
Okay.
01:08:05.930 --> 01:08:09.600
Did you calculate or
provide to the legislature
01:08:11.190 --> 01:08:14.543
I believe what you called
the affiliate payments?
01:08:17.440 --> 01:08:21.410
No, so my 1.9 billion was
based on a counterparty netting,
01:08:21.410 --> 01:08:23.610
which I note in a
footnote on the next page.
01:08:24.740 --> 01:08:26.590
There are cases in
which counterparty netting
01:08:26.590 --> 01:08:28.860
are not gonna be the same as the process
01:08:28.860 --> 01:08:30.300
that I delineate my testimony
01:08:30.300 --> 01:08:33.730
because that there are cases
in which a QSE represents
01:08:33.730 --> 01:08:35.350
non-affiliated LSEs.
01:08:35.350 --> 01:08:36.500
Okay.
01:08:36.500 --> 01:08:40.620
So did you calculate
a counterparty netting
01:08:40.620 --> 01:08:45.423
for the full eight to nine days
of the emergency period?
01:08:51.020 --> 01:08:55.040
No, I did not because that
was never part of my testimony
01:08:55.040 --> 01:08:56.100
to the legislature.
01:08:56.100 --> 01:08:57.830
I was not concerned with those days.
01:08:57.830 --> 01:09:00.730
And have you since
perform that calculation?
01:09:00.730 --> 01:09:01.563
I have not.
01:09:01.563 --> 01:09:04.900
Do you have any idea
of what that calculation
01:09:04.900 --> 01:09:05.733
may results in.
01:09:05.733 --> 01:09:06.883
What that figure may be?
01:09:06.883 --> 01:09:08.183
I have not performed it.
01:09:19.110 --> 01:09:20.103
Okay, thank you.
01:09:24.690 --> 01:09:25.523
All right, thank you.
01:09:25.523 --> 01:09:26.790
Exelon?
01:09:26.790 --> 01:09:29.770
Yes, your honor
I've got two questions.
01:09:48.537 --> 01:09:49.855
Good morning, Ms. Bivens
01:09:49.855 --> 01:09:51.370
Ms. Meghan Griffiths on behalf of Exelon
01:09:51.370 --> 01:09:52.690
and Constellation New Energy.
01:09:52.690 --> 01:09:54.040
Good morning.
01:09:54.040 --> 01:09:56.530
Ms. Bivens, you
are the Vice President
01:09:56.530 --> 01:09:59.620
and Director of Potomac Economics
01:09:59.620 --> 01:10:01.550
and serve as Vice President and Director
01:10:01.550 --> 01:10:03.837
of the Independent
Market Monitor, correct?
01:10:03.837 --> 01:10:05.740
For the coverage region, yes.
01:10:05.740 --> 01:10:10.479
And you have been in that
position since 2020, correct?
01:10:10.479 --> 01:10:11.312
Yes.
01:10:11.312 --> 01:10:13.940
And prior to
that, for 14 years,
01:10:13.940 --> 01:10:18.070
you worked at ERCOT where
you served in various positions
01:10:18.070 --> 01:10:19.846
of increasing responsibility, correct?
01:10:19.846 --> 01:10:20.679
Yes.
01:10:20.679 --> 01:10:22.050
And when you left ERCOT,
01:10:22.050 --> 01:10:25.020
you were the Director of
Wholesale Operations?
01:10:25.020 --> 01:10:26.240
Yes.
01:10:26.240 --> 01:10:27.747
And in that position,
01:10:27.747 --> 01:10:30.400
is it a correct characterization to say
01:10:30.400 --> 01:10:34.460
that you provided direction
for wholesale market operations
01:10:34.460 --> 01:10:36.910
and some strategic
direction over ERCOT's
01:10:36.910 --> 01:10:39.760
day ahead market congestion
revenue right auction
01:10:39.760 --> 01:10:40.880
and demand integration?
01:10:40.880 --> 01:10:41.713
Yes.
01:10:41.713 --> 01:10:45.640
Okay, and then prior
to working at ERCOT,
01:10:45.640 --> 01:10:47.970
you served as an
energy industry analysis
01:10:47.970 --> 01:10:50.150
for the Federal Energy
Regulatory Commission, correct.
01:10:50.150 --> 01:10:51.720
Yes.
01:10:51.720 --> 01:10:54.620
And you have a bachelor's
of business administration,
01:10:54.620 --> 01:10:55.453
correct?
01:10:55.453 --> 01:10:56.300
Yes.
01:10:56.300 --> 01:10:58.540
But you were not an
electrical engineer, are you?
01:10:58.540 --> 01:10:59.470
I am not.
01:10:59.470 --> 01:11:00.690
And you are not a lawyer.
01:11:00.690 --> 01:11:01.900
I'm not a lawyer.
01:11:01.900 --> 01:11:04.510
Ms. Bivens, have
you ever been employed
01:11:04.510 --> 01:11:06.720
by an independent power producer
01:11:06.720 --> 01:11:08.740
that owns and operates gas plants?
01:11:08.740 --> 01:11:10.170
No.
01:11:10.170 --> 01:11:13.050
Have you ever worked
for an electric utility
01:11:13.050 --> 01:11:14.460
that owns and operates gas plants?
01:11:14.460 --> 01:11:15.770
No.
01:11:15.770 --> 01:11:19.040
So is it a fair to assume
that you have never had
01:11:19.040 --> 01:11:22.805
responsibility for a gas
supply procurement?
01:11:22.805 --> 01:11:23.950
That's correct.
01:11:23.950 --> 01:11:27.480
And so you have no
experience buying and selling gas
01:11:27.480 --> 01:11:28.313
for gas plants?
01:11:28.313 --> 01:11:29.720
I agree.
01:11:29.720 --> 01:11:32.780
And you've never negotiated
gas supply contracts?
01:11:32.780 --> 01:11:34.380
No.
01:11:34.380 --> 01:11:36.450
Have you ever worked
for a retail electric provider?
01:11:36.450 --> 01:11:38.110
No.
01:11:38.110 --> 01:11:40.610
So you have never then
worked in electricity supply
01:11:40.610 --> 01:11:42.400
procurement for a rep, correct?
01:11:42.400 --> 01:11:43.667
No.
01:11:43.667 --> 01:11:45.160
And so you've never
negotiated wholesale
01:11:45.160 --> 01:11:46.630
purchase power agreements?
01:11:46.630 --> 01:11:47.750
Nope.
01:11:47.750 --> 01:11:52.010
You have never negotiated
or been directly involved
01:11:52.010 --> 01:11:55.670
with financial or full
requirements contracts for reps,
01:11:55.670 --> 01:11:57.240
correct?
That's correct.
01:11:57.240 --> 01:12:01.230
And have you ever negotiated
a financial hedge for a rep?
01:12:01.230 --> 01:12:02.240
No.
01:12:02.240 --> 01:12:07.240
Okay, Ms. Bivens
from a policy perspective,
01:12:09.490 --> 01:12:11.640
do you believe that it is important
01:12:11.640 --> 01:12:16.640
for generation development in ERCOT
01:12:17.510 --> 01:12:20.703
to have sufficient generation
to serve the load in ERCOT?
01:12:21.910 --> 01:12:22.800
Yes.
01:12:22.800 --> 01:12:25.070
Okay, and Ms. Bivens
would you agree with me
01:12:25.070 --> 01:12:29.560
that gas supply was very
scarce during Winter Storm Uri?
01:12:29.560 --> 01:12:30.470
Yes.
01:12:30.470 --> 01:12:34.920
And in fact it was so scarce
that on February 12th, 2021,
01:12:34.920 --> 01:12:38.260
the railroad Commission
held an emergency meeting
01:12:38.260 --> 01:12:40.620
and actually issued an emergency order
01:12:40.620 --> 01:12:43.210
curtailing and modifying natural gas
01:12:43.210 --> 01:12:44.797
utility curtailment priorities, correct?
01:12:44.797 --> 01:12:46.971
I have no personal
knowledge of that.
01:12:46.971 --> 01:12:47.804
Okay.
01:12:47.804 --> 01:12:49.270
Are you aware and that's fine
01:12:49.270 --> 01:12:50.360
if you don't have personal knowledge,
01:12:50.360 --> 01:12:52.630
but are you aware that
the railroad Commission
01:12:52.630 --> 01:12:56.870
issued an order that changed natural gas
01:12:56.870 --> 01:12:59.790
utility curtailment priorities
and elevated deliveries
01:12:59.790 --> 01:13:01.267
of gas to electric
generation facilities?
01:13:01.267 --> 01:13:03.830
I believe I read a
newspaper article to that effect.
01:13:03.830 --> 01:13:04.663
Okay.
01:13:04.663 --> 01:13:06.380
And we can then,
01:13:06.380 --> 01:13:08.911
and are you aware that
ERCOT issued a market notice
01:13:08.911 --> 01:13:11.160
with that order?
01:13:11.160 --> 01:13:12.124
No.
01:13:12.124 --> 01:13:12.957
Okay.
01:13:12.957 --> 01:13:15.190
Commission, I just
would like for the record,
01:13:15.190 --> 01:13:18.630
I'm gonna reference ERCOT
market notice M-A021321-1,
01:13:22.010 --> 01:13:25.340
which has the attached
Railroad Commission order
01:13:25.340 --> 01:13:26.300
that I was referencing.
01:13:26.300 --> 01:13:27.630
And I just would like the Commission
01:13:27.630 --> 01:13:29.430
to take administrative notice of it.
01:13:29.430 --> 01:13:32.978
I'm gonna object to the
request for official notice
01:13:32.978 --> 01:13:36.140
under the Commission's procedural rules,
01:13:36.140 --> 01:13:41.140
16 tech 22.222
specifically subsection D,
01:13:42.470 --> 01:13:45.340
there is an allowance
for official notice
01:13:45.340 --> 01:13:50.340
of a Commission order or judicial notice
01:13:50.590 --> 01:13:53.840
or official notice of subjects
01:13:53.840 --> 01:13:56.750
that are within the
jurisdiction of the Commission.
01:13:56.750 --> 01:14:01.040
And first this exhibit is a
Railroad Commission order,
01:14:01.040 --> 01:14:02.650
not a PUC order.
01:14:02.650 --> 01:14:05.250
And second, if you look at it,
01:14:05.250 --> 01:14:09.310
it addresses rule two of the
Railroad Commission's rules.
01:14:09.310 --> 01:14:12.540
And that deals with the
priority of natural gas deliveries,
01:14:12.540 --> 01:14:15.260
which is not within the
Commission's jurisdiction.
01:14:15.260 --> 01:14:16.330
Okay, well, let me back up,
01:14:16.330 --> 01:14:18.789
you indicated earlier you had some doc,
01:14:18.789 --> 01:14:21.030
but when we started this morning,
01:14:21.030 --> 01:14:24.410
you came by and said you
had some documents that were,
01:14:24.410 --> 01:14:26.910
maybe I thought I heard you
say were gonna be demonstrative.
01:14:26.910 --> 01:14:30.900
Is that so you are, that's
not the purpose of this.
01:14:30.900 --> 01:14:32.572
You were wanting an official notice.
01:14:32.572 --> 01:14:33.405
I just want an official notice
01:14:33.405 --> 01:14:34.610
of the Railroad Commission order,
01:14:34.610 --> 01:14:36.370
which I think you actually can take.
01:14:36.370 --> 01:14:38.890
I'm I holding the
right, is is this?
01:14:38.890 --> 01:14:40.557
It is, it was issued
01:14:40.557 --> 01:14:42.760
and attached to an ERCOT market notice.
01:14:42.760 --> 01:14:45.280
So I have the ERCOT
market notice on top of it.
01:14:45.280 --> 01:14:47.300
I don't think it's necessary to include
01:14:47.300 --> 01:14:49.780
the ERCOT market notice, but you can,
01:14:49.780 --> 01:14:52.180
and it has the referenced
Railroad Commission order.
01:14:52.180 --> 01:14:54.517
So that's why I have
those for ease of the record.
01:14:54.517 --> 01:14:56.570
All right, and then assigned
me to the rule please.
01:14:56.570 --> 01:15:01.163
Its 16 Tech 22.222 A and D.
01:15:03.080 --> 01:15:03.913
And your honor,
01:15:03.913 --> 01:15:06.040
she has mentioned that
she is generally familiar
01:15:06.040 --> 01:15:07.760
that the railroad Commission
did issue the order.
01:15:07.760 --> 01:15:09.486
This is the order that
we were speaking of.
01:15:09.486 --> 01:15:11.250
I think it would be
good just to have it.
01:15:11.250 --> 01:15:13.100
I'm not objecting
to the foundation.
01:15:13.100 --> 01:15:15.843
I'm objecting to the
judicial notice of the order.
01:15:23.913 --> 01:15:24.746
And on that point,
01:15:24.746 --> 01:15:26.910
we can offer an officially
into the record as evidence
01:15:26.910 --> 01:15:28.410
rather than taking judicial notice.
01:15:28.410 --> 01:15:30.013
I think it's just semantics.
01:15:54.942 --> 01:15:56.790
And your argument is under,
01:15:56.790 --> 01:15:58.230
recite your argument Lori..
01:15:58.230 --> 01:16:00.470
Two arguments, the first is,
01:16:00.470 --> 01:16:04.040
is that under A matters
that can be officially noticed
01:16:04.040 --> 01:16:06.730
or matters known within the
jurisdiction of the Commission,
01:16:06.730 --> 01:16:08.340
meaning the Public Utility Commission.
01:16:08.340 --> 01:16:11.900
And so this order deals with natural,
01:16:11.900 --> 01:16:14.090
the priority of natural gas deliveries,
01:16:14.090 --> 01:16:16.840
which is not within
the PUCs jurisdiction.
01:16:16.840 --> 01:16:21.390
And then under D there can
specifically be official notice
01:16:21.390 --> 01:16:23.830
of Commission again PUC orders,
01:16:23.830 --> 01:16:25.830
and this is a Railroad Commission order.
01:16:28.430 --> 01:16:30.040
It also mentioned judicial
01:16:30.040 --> 01:16:32.693
and administrative
decisions generically.
01:16:35.950 --> 01:16:37.500
Give me a minute to look at it.
01:16:49.290 --> 01:16:50.123
Ms. Griffith,
01:16:50.123 --> 01:16:54.890
I'm not familiar with
Railroad Commission orders.
01:16:55.930 --> 01:16:58.210
Walk me through
what I'm looking at here.
01:16:58.210 --> 01:17:01.120
Sure, you're looking
at an emergency order
01:17:01.120 --> 01:17:03.389
that was issued by the
Railroad Commission.
01:17:03.389 --> 01:17:04.340
What's the first page?
01:17:04.340 --> 01:17:07.223
Look at the second
page of the exhibit.
01:17:08.058 --> 01:17:10.370
I understand that
it's the order itself.
01:17:10.370 --> 01:17:12.010
What is the first page?
01:17:12.010 --> 01:17:17.010
The first on February 13th
ERCOT issued a market notice
01:17:18.080 --> 01:17:21.510
that goes out to the entire
market that announced that
01:17:21.510 --> 01:17:24.400
the Railroad Commission
held an emergency meeting
01:17:25.260 --> 01:17:29.840
to address the priority of
gas deliveries in the market.
01:17:29.840 --> 01:17:32.779
This is well known and
then ERCOT also attached
01:17:32.779 --> 01:17:37.083
the emergency order, so I have, yeah,
01:17:38.720 --> 01:17:42.100
I think you can take
notice of the market notice
01:17:42.100 --> 01:17:44.040
and the Railroad Commission order,
01:17:44.040 --> 01:17:47.030
or you can simply
admit it into the record.
01:17:47.030 --> 01:17:48.420
And if we're gonna
move to admit,
01:17:48.420 --> 01:17:50.233
I have an objection to that as well.
01:18:11.490 --> 01:18:15.550
So what is the purpose
that, you wanted notice taken?
01:18:15.550 --> 01:18:17.690
Sure, I'm just trying
to set a foundation
01:18:17.690 --> 01:18:20.400
that gas supply was scarce
and gas was really high,
01:18:20.400 --> 01:18:21.280
which we all know,
01:18:21.280 --> 01:18:22.950
but I just want to
have it in the record.
01:18:22.950 --> 01:18:24.320
She's already attested to part of that,
01:18:24.320 --> 01:18:26.790
but I think it's good to
have the official order.
01:18:26.790 --> 01:18:27.815
All right, I'm gonna take,
01:18:27.815 --> 01:18:28.880
I'm going to overrule the objection.
01:18:28.880 --> 01:18:30.730
I'm gonna take official notice of it.
01:18:33.210 --> 01:18:35.359
All right, thank
you, Ms. Bivens.
01:18:35.359 --> 01:18:40.103
And do we need to mark
this as Exelon exhibit three?
01:18:41.040 --> 01:18:41.880
Or do you want to take,
01:18:41.880 --> 01:18:43.988
if you're gonna take judicial
notice of that, your honor?
01:18:43.988 --> 01:18:44.821
Yes.
01:18:44.821 --> 01:18:46.321
Okay, thank you.
01:18:49.520 --> 01:18:51.740
All right, and Ms. Bivens,
01:18:51.740 --> 01:18:54.270
so we were talking about
gas supply being scare.
01:18:54.270 --> 01:18:56.010
So you do agree that
gas supply was scarce
01:18:56.010 --> 01:18:57.460
during the winter storm?
01:18:57.460 --> 01:18:58.293
Yes.
01:18:58.293 --> 01:18:59.126
Okay.
01:18:59.126 --> 01:19:03.010
And in addition, isn't it the
case that the Commission
01:19:03.010 --> 01:19:06.160
during the Winter Storm
adjusted the low wide
01:19:06.160 --> 01:19:11.080
system offer cap specified
in PUC rule 25.505
01:19:11.080 --> 01:19:15.140
citing the fact that if
the L-CAP was applied,
01:19:15.140 --> 01:19:17.100
the provision of the L-CAP
01:19:17.100 --> 01:19:21.570
that specified 50 times the
natural gas price index value
01:19:21.570 --> 01:19:23.640
may exceed the system-wide offer cap.
01:19:23.640 --> 01:19:25.485
Are you generally familiar with the fact
01:19:25.485 --> 01:19:26.690
that the Commission did that?
01:19:26.690 --> 01:19:28.370
I think you mean the low
system wide offer cap, but yes.
01:19:28.370 --> 01:19:30.580
Yes, thank you
for that clarification.
01:19:30.580 --> 01:19:34.530
Okay, so, all right Ms. Bivens,
01:19:34.530 --> 01:19:39.530
I'd like to turn to page
11 of your testimony.
01:19:45.320 --> 01:19:46.720
And in your testimony,
01:19:46.720 --> 01:19:51.660
you stated that the RDPA at
are at issue in this proceeding
01:19:51.660 --> 01:19:55.290
relates to the paying of
real time reserves, correct?
01:19:55.290 --> 01:19:56.123
What page?
01:19:56.123 --> 01:19:57.963
I'm looking at page 11.
01:19:59.620 --> 01:20:02.603
It might actually be on the
prior page on page seven.
01:20:03.780 --> 01:20:04.900
Yeah, it's on page seven.
01:20:04.900 --> 01:20:06.290
I'm sorry, on this side of the page.
01:20:06.290 --> 01:20:08.363
It's on page seven, line 10.
01:20:10.230 --> 01:20:11.530
Yes.
01:20:11.530 --> 01:20:12.650
All right.
01:20:12.650 --> 01:20:17.650
And then you say the
RDPA adder is the only adder
01:20:19.040 --> 01:20:21.230
relevant to this proceeding, correct?
01:20:21.230 --> 01:20:22.063
Yes.
01:20:24.070 --> 01:20:25.890
All right, Ms. Bivens
01:20:25.890 --> 01:20:30.100
do you agree that for
grid reliability purposes,
01:20:30.100 --> 01:20:34.670
it's important for gas plants
in ERCOT to buy enough gas,
01:20:34.670 --> 01:20:39.110
buy enough gas to serve
at their high side limits
01:20:39.110 --> 01:20:40.760
when electricity is it's scarce.
01:20:40.760 --> 01:20:42.333
Objection relevance.
01:20:43.583 --> 01:20:45.074
As a relevant.
01:20:45.074 --> 01:20:49.380
I'm gonna tie this to her
hypothetical on page 11
01:20:49.380 --> 01:20:51.605
in just a minute, I'm
setting a foundation to get.
01:20:51.605 --> 01:20:53.100
Repeat the question
for me, please.
01:20:53.100 --> 01:20:53.933
Sure.
01:20:53.933 --> 01:20:55.660
I said, for grid reliability purposes,
01:20:55.660 --> 01:21:00.660
would you agree that it is
important for gas plants in ERCOT
01:21:00.880 --> 01:21:03.742
to buy enough gas to run
01:21:03.742 --> 01:21:05.980
during an electricity scarcity event
01:21:05.980 --> 01:21:07.780
like we had during Winter Storm Uri?
01:21:09.050 --> 01:21:09.883
Overruled.
01:21:11.660 --> 01:21:13.590
I'm not a reliability expert,
01:21:13.590 --> 01:21:15.440
as you mentioned I'm
not electrical engineer.
01:21:15.440 --> 01:21:18.290
So you have no opinion
and you do not know.
01:21:18.290 --> 01:21:20.850
You think it might be
reasonable for a gas plant
01:21:20.850 --> 01:21:23.450
to offer operating
reserves into the market,
01:21:23.450 --> 01:21:26.110
but not have any gas to supply the plant
01:21:26.110 --> 01:21:27.740
if it's called upon, is
that your testimony?
01:21:27.740 --> 01:21:28.573
I think no.
01:21:28.573 --> 01:21:32.730
My testimony is that the
generator should buy gas
01:21:32.730 --> 01:21:35.210
that represents its
expected level of operation,
01:21:35.210 --> 01:21:36.570
which is not what you said.
01:21:36.570 --> 01:21:37.640
You said the high sustained limit,
01:21:37.640 --> 01:21:38.680
which is a different number.
01:21:38.680 --> 01:21:39.680
Okay, no, fair enough.
01:21:39.680 --> 01:21:42.160
So their expected level of operation.
01:21:42.160 --> 01:21:47.160
And so if let's just say a gas
plan has a 100 MW capacity
01:21:47.900 --> 01:21:48.830
and they're anticipated,
01:21:48.830 --> 01:21:50.710
they expect that they
may be called upon.
01:21:50.710 --> 01:21:53.480
Would you think it would be
reasonable to buy enough gas
01:21:53.480 --> 01:21:55.180
to serve that if called upon?
01:21:55.180 --> 01:21:56.320
I think there'll be called upon
01:21:56.320 --> 01:21:58.880
and there'll be
dispatched a 100 MW, yes.
01:21:58.880 --> 01:21:59.713
Okay.
01:22:00.560 --> 01:22:03.800
And so and what would
happen if the gas plant
01:22:03.800 --> 01:22:08.670
was called upon and didn't
have gas to deliver the energy
01:22:08.670 --> 01:22:10.910
that it needed to
deliver into the market?
01:22:10.910 --> 01:22:13.237
That sounds like
a forced outage.
01:22:13.237 --> 01:22:14.620
I'm not talking about....
01:22:14.620 --> 01:22:15.960
So that sounds like a forced outage.
01:22:15.960 --> 01:22:17.250
So they would have a forced outage
01:22:17.250 --> 01:22:19.100
or would they pay a penalty?
01:22:19.100 --> 01:22:22.600
Would they pay a penalty if
they were not able to supply
01:22:22.600 --> 01:22:26.760
because they fail to have
enough gas to offer into,
01:22:26.760 --> 01:22:28.530
to deliver into the market?
01:22:28.530 --> 01:22:30.960
Penalty, you need
to define penalty.
01:22:30.960 --> 01:22:31.840
You define it for me.
01:22:31.840 --> 01:22:35.550
What would happen if the
gas plant offered electricity
01:22:35.550 --> 01:22:38.520
into the market and didn't
have enough gas supply
01:22:38.520 --> 01:22:40.760
to meet its offer,
would it have to cover?
01:22:40.760 --> 01:22:44.230
Do you say offer day
ahead or offer real time?
01:22:44.230 --> 01:22:45.530
I need some specifics.
01:22:45.530 --> 01:22:47.010
Let's do day ahead
and let's do real time.
01:22:47.010 --> 01:22:48.000
If you offer a day ahead
01:22:48.000 --> 01:22:50.297
and you have a day
ahead obligation of 100 MW
01:22:50.297 --> 01:22:52.730
and you don't generate
100 MW in real time,
01:22:52.730 --> 01:22:54.650
then you do have to purchase that back.
01:22:54.650 --> 01:22:56.580
I don't know if you consider
that a penalty or not,
01:22:56.580 --> 01:22:58.750
but that you have to
purchase that energy back.
01:22:58.750 --> 01:23:02.704
There's no penalty that
I'm aware of in either case.
01:23:02.704 --> 01:23:05.970
And if in real time you offer
it and you're not available,
01:23:05.970 --> 01:23:09.273
then you need to derate
your unit or be forced offline.
01:23:09.273 --> 01:23:13.920
Okay, so let's turn to your
hypothetical on page 11.
01:23:20.470 --> 01:23:22.960
And I'm referring to the
hypothetical on page 11
01:23:22.960 --> 01:23:25.330
lines 12 through 21.
01:23:25.330 --> 01:23:26.163
Yes.
01:23:26.163 --> 01:23:27.570
And you have a hypothetical
01:23:27.570 --> 01:23:29.530
and I believe the
point of your testimony
01:23:29.530 --> 01:23:31.570
and the recommendation that
you've made in this proceeding
01:23:31.570 --> 01:23:34.040
is that you're focusing
on liquidity issues, correct?
01:23:34.040 --> 01:23:34.873
Yes.
01:23:34.873 --> 01:23:36.890
All right, and so
in your hypothetical,
01:23:36.890 --> 01:23:39.050
you offer two companies A and B
01:23:39.050 --> 01:23:40.980
that have the same load ratio share
01:23:42.070 --> 01:23:46.010
and assume company A owns generation
01:23:46.010 --> 01:23:48.740
that received the RDA adder payments
01:23:48.740 --> 01:23:51.902
as part of the ancillary
service imbalance settlement.
01:23:51.902 --> 01:23:53.060
RDPA, yes.
01:23:53.060 --> 01:23:54.529
RDPA.
01:23:54.529 --> 01:23:56.740
And then you make the statement
01:23:56.740 --> 01:24:01.260
because these payments are
not for generated energy itself,
01:24:01.260 --> 01:24:05.140
but are instead for energy
that was not produced.
01:24:05.140 --> 01:24:08.070
No monetary costs are associated
01:24:08.070 --> 01:24:10.290
with presiding these reserves,
01:24:10.290 --> 01:24:13.900
for example, no fuel was
converted to electric energy.
01:24:13.900 --> 01:24:14.760
Do you see that there?
01:24:14.760 --> 01:24:15.700
Yeah, that's accurate.
01:24:15.700 --> 01:24:19.730
Okay, and your position
is that the generators
01:24:19.730 --> 01:24:23.780
who offered operating
reserves into the market
01:24:23.780 --> 01:24:27.410
did not have to pay any fuel costs
01:24:27.410 --> 01:24:30.340
if they did not burn
it for electric energy,
01:24:30.340 --> 01:24:31.460
is that correct?
01:24:31.460 --> 01:24:32.545
These are not offers.
01:24:32.545 --> 01:24:35.450
RDPA has nothing to do with offers,
01:24:35.450 --> 01:24:36.930
it is the difference between
01:24:36.930 --> 01:24:39.200
where you're dispatched by ERCOT
01:24:39.200 --> 01:24:41.610
and what you have as your high limit.
01:24:41.610 --> 01:24:45.098
And these RDPA payment represents
01:24:45.098 --> 01:24:50.098
is not intended to
compensate for any costs,
01:24:51.540 --> 01:24:52.540
any monetary costs.
01:24:52.540 --> 01:24:53.620
Let's talk about the
expenses of the generator.
01:24:53.620 --> 01:24:56.830
You're saying what you believe
the RDPA payment represents,
01:24:56.830 --> 01:25:00.030
but is it your position
that the generator itself,
01:25:00.030 --> 01:25:05.030
which received an RDPA
payment had no operating costs
01:25:05.150 --> 01:25:06.440
associated with fuel?
01:25:06.440 --> 01:25:08.190
Is that your position?
01:25:08.190 --> 01:25:13.190
For the purpose of
reserves, that is accurate.
01:25:13.360 --> 01:25:16.220
For the purpose of reserves,
but you have no position.
01:25:16.220 --> 01:25:19.060
It could very well be the
case that the generator
01:25:19.060 --> 01:25:23.000
that is offering operating
reserves into the market
01:25:23.000 --> 01:25:27.020
had to procure fuel in order to serve
01:25:27.020 --> 01:25:28.560
if called upon, correct.
01:25:28.560 --> 01:25:29.623
It's not an offer.
01:25:30.600 --> 01:25:32.120
Reserves are not an offer.
01:25:32.120 --> 01:25:33.470
We're talking
about different things
01:25:33.470 --> 01:25:34.940
and I'm not talking about reserves.
01:25:34.940 --> 01:25:38.110
Isn't it the case that a generator
01:25:38.110 --> 01:25:40.900
who is offering operating reserves,
01:25:40.900 --> 01:25:45.900
if it gets called upon to
deliver energy into the market
01:25:46.020 --> 01:25:47.210
has fuel costs
01:25:47.210 --> 01:25:50.200
and that it could have
also had to procure fuel
01:25:50.200 --> 01:25:54.260
in order to stand by
and be ready to deliver
01:25:54.260 --> 01:25:56.050
if the energy was called upon?
01:25:56.050 --> 01:25:57.723
Objection, compound question.
01:25:59.196 --> 01:26:00.029
I don't think it was.
01:26:00.029 --> 01:26:01.520
Did you understand the question?
01:26:01.520 --> 01:26:05.050
I did not, and also I
disagree with how she's talking
01:26:05.050 --> 01:26:07.890
about operating reserves,
that's not how it works.
01:26:07.890 --> 01:26:10.560
I'm asking you about
actual costs of a generator.
01:26:10.560 --> 01:26:12.730
And have you ever worked at a gas plant
01:26:12.730 --> 01:26:14.830
or for a company that
owns or operates gas plants?
01:26:14.830 --> 01:26:17.250
No, but I am very familiar
with cost of generators
01:26:17.250 --> 01:26:19.660
because I'm a familiar
with how you offer them
01:26:19.660 --> 01:26:21.050
into a competitive market.
01:26:21.050 --> 01:26:25.370
And my role as IMM
we regularly review costs
01:26:25.370 --> 01:26:27.870
and I have familiarity
with the cost (mumbles)
01:26:27.870 --> 01:26:31.080
So it is your
belief as the IMM,
01:26:31.080 --> 01:26:33.330
even though you've never
worked for a gas plant
01:26:33.330 --> 01:26:35.790
that generators have no fuel costs
01:26:35.790 --> 01:26:38.150
associated with buying gas
01:26:38.150 --> 01:26:40.560
if they're offering operating
reserves into the market,
01:26:40.560 --> 01:26:42.270
is that what you're
testifying too here today?
01:26:42.270 --> 01:26:45.490
So competitive markets mean
that you offer your variable?
01:26:45.490 --> 01:26:47.710
Would you please answer,
this is it a yes or no question?
01:26:47.710 --> 01:26:48.670
I disagree with your question.
01:26:48.670 --> 01:26:49.810
I can't answer a question
01:26:49.810 --> 01:26:51.590
because it doesn't make sense to me.
01:26:51.590 --> 01:26:53.960
Okay, so let's break it down.
01:26:53.960 --> 01:26:56.810
Is it the case that a generator
01:26:56.810 --> 01:27:00.220
that is operating
reserves into the market?
01:27:00.220 --> 01:27:02.476
They don't offer
operating reserves.
01:27:02.476 --> 01:27:06.100
Okay, we're fighting with
the semantics on that point.
01:27:06.100 --> 01:27:07.100
It's not an offer.
01:27:07.960 --> 01:27:10.113
They provide operating
reserves, is that fair?
01:27:10.113 --> 01:27:10.946
Yes.
01:27:10.946 --> 01:27:11.779
Okay.
01:27:11.779 --> 01:27:12.612
Provides operating reserves.
01:27:12.612 --> 01:27:13.445
Okay, that's fair.
01:27:13.445 --> 01:27:15.910
Okay, is it the
case that a generator
01:27:15.910 --> 01:27:20.910
that provides operating
reserves has fuel costs
01:27:21.800 --> 01:27:25.940
whether or not it's
providing operating reserves
01:27:25.940 --> 01:27:27.450
or delivering energy?
01:27:27.450 --> 01:27:29.210
It has no variable fuel costs
01:27:29.210 --> 01:27:31.500
for the proportion of the reserves
01:27:31.500 --> 01:27:32.950
and those are the relevant costs.
01:27:32.950 --> 01:27:36.100
It has no variable fuel costs
under the ERCOT protocols,
01:27:36.100 --> 01:27:37.400
correct?
01:27:37.400 --> 01:27:39.840
Under the ERCOT
protocols, sure.
01:27:39.840 --> 01:27:42.630
Okay, but the generator
may still have fuel costs,
01:27:42.630 --> 01:27:43.830
correct?
01:27:43.830 --> 01:27:47.686
Those not variable operating
maintenance costs, no.
01:27:47.686 --> 01:27:51.780
Not for reserves,
reserves have no costs.
01:27:51.780 --> 01:27:53.607
And we may have a
fundamental disagreement on that.
01:27:53.607 --> 01:27:54.440
We do.
01:27:54.440 --> 01:27:57.120
You've never
worked for a generator.
01:27:57.120 --> 01:27:59.188
Objection, asked and answered.
01:27:59.188 --> 01:28:00.310
Sustained.
01:28:00.310 --> 01:28:01.490
That's fine, let's clarify.
01:28:01.490 --> 01:28:03.340
So you had, and I think
we've already established
01:28:03.340 --> 01:28:07.480
that you never worked for a
independent power producer
01:28:07.480 --> 01:28:09.760
or an electric utility that
owns thermal generation.
01:28:09.760 --> 01:28:12.280
But I'm aware that you're
trying to refer to fixed costs,
01:28:12.280 --> 01:28:14.350
which do not belong in reserve payments.
01:28:14.350 --> 01:28:18.190
And I think that I'm
disagreeing with your description
01:28:18.190 --> 01:28:20.127
of these costs for
this particular purpose.
01:28:20.127 --> 01:28:21.400
And are you disagreeing with it
01:28:21.400 --> 01:28:23.678
because it's in the fixed payment,
01:28:23.678 --> 01:28:25.340
are you saying that
the cost just don't exist?
01:28:25.340 --> 01:28:26.207
Because it's a fixed cost
01:28:26.207 --> 01:28:29.290
and those don't belong
in a competitive offer.
01:28:29.290 --> 01:28:31.930
But the costs do, could
potentially exist, correct?
01:28:31.930 --> 01:28:33.210
And they get recovered
in different ways,
01:28:33.210 --> 01:28:35.010
not through the RDPA.
01:28:35.010 --> 01:28:36.790
And if they get
recovered in different ways,
01:28:36.790 --> 01:28:38.830
they would get recovered
through an energy payment
01:28:38.830 --> 01:28:40.151
if they're disbatched, correct?
01:28:40.151 --> 01:28:41.970
And energy payment or
an ancillary service payment
01:28:41.970 --> 01:28:42.803
in the day ahead market.
01:28:42.803 --> 01:28:44.450
Okay, but if they're
not dispatched
01:28:44.450 --> 01:28:45.440
do they get recovered?
01:28:45.440 --> 01:28:47.520
If they're not dispatched,
they do not get recovered.
01:28:47.520 --> 01:28:48.960
That's right, that's
how the market works.
01:28:48.960 --> 01:28:49.793
Thank you.
01:28:53.580 --> 01:28:54.413
All right.
01:28:54.413 --> 01:28:59.120
So let me then go to the
other part of your hypothetical.
01:28:59.120 --> 01:29:01.750
We're gonna turn
back to that on page 11.
01:29:01.750 --> 01:29:03.180
Yeah.
01:29:03.180 --> 01:29:05.760
You said that assume company B,
01:29:05.760 --> 01:29:08.650
and this is the company
without generation.
01:29:08.650 --> 01:29:12.400
It owns no generation and it
only received uplift charges.
01:29:12.400 --> 01:29:14.700
There are many factors to consider,
01:29:14.700 --> 01:29:16.790
but given that the total
amount that may be financed
01:29:16.790 --> 01:29:20.120
is capped company B is more
likely to be at risk of default
01:29:20.120 --> 01:29:24.650
than company A because
company A had a natural hedge
01:29:24.650 --> 01:29:28.720
and company B had no
ability to financially hedge.
01:29:28.720 --> 01:29:30.010
Let's focus on that.
01:29:30.010 --> 01:29:32.500
When you say natural hedge,
01:29:32.500 --> 01:29:35.199
are you referring to the generation
01:29:35.199 --> 01:29:40.199
that the companies of
the company's affiliates?
01:29:41.260 --> 01:29:42.970
The generator
that was online, Yes
01:29:42.970 --> 01:29:43.920
as a natural hedge.
01:29:43.920 --> 01:29:46.560
Okay, and you say company B
01:29:46.560 --> 01:29:50.860
the load serving entity
without affiliated generation
01:29:50.860 --> 01:29:53.780
had no ability to financially hedge.
01:29:53.780 --> 01:29:56.070
And you say that unequivocally there,
01:29:56.070 --> 01:29:59.950
were you here for the testimony
of Mr. Carter yesterday?
01:29:59.950 --> 01:30:00.810
Yes.
01:30:00.810 --> 01:30:01.643
Okay.
01:30:01.643 --> 01:30:03.420
And were you also here for the testimony
01:30:03.420 --> 01:30:05.165
of Mr. O'Gorman.
01:30:05.165 --> 01:30:05.998
Yes.
01:30:05.998 --> 01:30:06.831
Earlier in the morning.
01:30:06.831 --> 01:30:10.440
Okay, and both Mr. O'Gorman
and Mr. Carter stated that they,
01:30:10.440 --> 01:30:13.790
there are financial hedges
in the market for LSEs.
01:30:13.790 --> 01:30:15.180
Do you recall that testimony?
01:30:15.180 --> 01:30:17.040
Yes, but not for RDPA.
01:30:17.040 --> 01:30:19.110
But not for RDPA, okay.
01:30:19.110 --> 01:30:21.100
And so your statement here
01:30:21.100 --> 01:30:23.470
is that only with respect to RDPA.
01:30:23.470 --> 01:30:27.100
You can hedge energy, you
can hedge ancillary services,
01:30:27.100 --> 01:30:28.060
you can hedge a number of things,
01:30:28.060 --> 01:30:29.640
but you cannot hedge uplift.
01:30:29.640 --> 01:30:30.473
That's right.
01:30:30.473 --> 01:30:32.440
But for ancillary services,
01:30:32.440 --> 01:30:33.810
you would say that company B
01:30:33.810 --> 01:30:37.120
did have the ability to
financially hedge, correct?
01:30:37.120 --> 01:30:37.960
My testimony here,
01:30:37.960 --> 01:30:40.010
I'm only speaking about the RDPA.
01:30:40.010 --> 01:30:41.780
And I'm asking you
about with respect
01:30:41.780 --> 01:30:42.640
to ancillary services.
01:30:42.640 --> 01:30:44.520
There are financial
hedges for ancillary services.
01:30:44.520 --> 01:30:46.120
They're not well-treated,
they're illiquid,
01:30:46.120 --> 01:30:47.243
but yes, they exist.
01:30:59.450 --> 01:31:01.463
Those are the questions
I have, thank you.
01:31:05.240 --> 01:31:06.800
Thank you.
01:31:06.800 --> 01:31:08.543
Just Energy?
01:31:08.543 --> 01:31:09.960
Yes Your Honor.
01:31:44.679 --> 01:31:46.929
(mumbling)
01:32:16.500 --> 01:32:18.753
Good morning, Ms. Bivens
Good morning.
01:32:18.753 --> 01:32:21.443
Catherine Webking and
here representing Just Energy.
01:32:24.910 --> 01:32:27.480
I think it would be best given our time
01:32:27.480 --> 01:32:29.829
just to just dive right in.
01:32:29.829 --> 01:32:30.662
Okay.
01:32:30.662 --> 01:32:32.260
So could we look
at exhibit seven A
01:32:32.260 --> 01:32:33.330
that's in front of you?
01:32:33.330 --> 01:32:34.240
What I just handed you?
01:32:34.240 --> 01:32:35.240
Yes.
01:32:35.240 --> 01:32:38.950
This is an exhibit in the
record, it's been admitted,
01:32:38.950 --> 01:32:40.123
parties have copies.
01:32:41.111 --> 01:32:44.313
Are you familiar with this
document in general, Ms. Bivens?
01:32:44.313 --> 01:32:46.270
I have not seen this before.
01:32:46.270 --> 01:32:51.250
This is a response to
an RFI that was asked
01:32:51.250 --> 01:32:53.610
by Just Energy to ERCOT.
01:32:53.610 --> 01:32:54.443
Okay.
01:32:54.443 --> 01:32:55.430
So this document was
produced by ERCOT.
01:32:55.430 --> 01:32:56.263
Got it.
01:32:56.263 --> 01:33:01.180
It is ERCOT's calculation
underlying their display
01:33:02.800 --> 01:33:04.800
of RDPA charges.
01:33:04.800 --> 01:33:05.670
By QSE.
01:33:05.670 --> 01:33:06.503
Yes.
01:33:06.503 --> 01:33:07.336
Got it.
01:33:07.336 --> 01:33:10.713
And monies paid
from ERCOT for RDPA,
01:33:13.110 --> 01:33:15.773
payments to reserves by QSE.
01:33:20.450 --> 01:33:23.193
So if we look at this chart,
01:33:25.210 --> 01:33:27.910
I just want to go through
a little bit of discussion.
01:33:27.910 --> 01:33:32.570
This is their representation
that this is the,
01:33:32.570 --> 01:33:34.950
these are the total RDPA charges
01:33:34.950 --> 01:33:37.063
for the period of the emergency.
01:33:38.150 --> 01:33:41.570
So that would be in the
column there with a heading
01:33:41.570 --> 01:33:45.500
L-A-R-D-A-S-I-R-N-A-M-T, correct?
01:33:45.500 --> 01:33:49.963
No, I believe
RTRDASIMT is the RDPA.
01:33:51.440 --> 01:33:53.570
I'm sorry, is that
not what I said?
01:33:53.570 --> 01:33:55.297
I'm sorry, the RDPA charges.
01:33:55.297 --> 01:33:57.963
The RDPA charges is
the column on the far right.
01:33:59.120 --> 01:34:02.800
Ms. Webking, did you provide
a copy to the court reporter?
01:34:02.800 --> 01:34:03.633
Yes, I did.
01:34:03.633 --> 01:34:04.466
Okay, good.
01:34:04.466 --> 01:34:06.890
I'm feeling a great deal of
sympathy with these acronyms.
01:34:06.890 --> 01:34:09.802
I just wanna make sure
we know who they are.
01:34:09.802 --> 01:34:10.635
(laughing)
01:34:10.635 --> 01:34:12.290
Well, apologies.
01:34:12.290 --> 01:34:14.210
Let me say I don't off
the top of my head know
01:34:14.210 --> 01:34:17.320
what the first column on the left is
01:34:17.320 --> 01:34:22.010
the L-A-R-D-A-S-I-R-N-A-M-T is.
01:34:22.010 --> 01:34:26.490
I know what R-T-R-D-A-S-I-M-T
is off the top of my head
01:34:26.490 --> 01:34:28.920
Fair enough, those
are lengthy acronyms.
01:34:28.920 --> 01:34:29.753
They are.
01:34:29.753 --> 01:34:30.586
And we could
go to the protocols.
01:34:30.586 --> 01:34:32.470
And we just, just assume for me,
01:34:32.470 --> 01:34:34.510
for the moment that
ERCOT represented that.
01:34:34.510 --> 01:34:35.922
This is the load allocated
01:34:35.922 --> 01:34:38.610
real time deployment
price setter amount?
01:34:38.610 --> 01:34:39.443
Yes.
01:34:39.443 --> 01:34:40.276
Okay.
01:34:42.640 --> 01:34:46.880
So for each of these
lines where it has a QSE,
01:34:46.880 --> 01:34:50.220
and then in some places it has an SQ1,
01:34:50.220 --> 01:34:53.820
for example under CPS
energy or ConocoPhillips even,
01:34:53.820 --> 01:34:57.230
could you explain just for
everyone's understanding
01:34:57.230 --> 01:34:59.640
what the SQs referred to.
01:34:59.640 --> 01:35:00.913
Sub QSE.
01:35:01.800 --> 01:35:06.800
And so ERCOT has data
broken down for these elements
01:35:06.840 --> 01:35:09.369
for RDPA by sub QSE, correct?
01:35:09.369 --> 01:35:11.930
QSE and sub QSE, which
are for all intents and purposes,
01:35:11.930 --> 01:35:13.410
the same.
01:35:13.410 --> 01:35:14.810
From ERCOT?
01:35:14.810 --> 01:35:16.210
From an ERCOT perspective.
01:35:17.260 --> 01:35:20.340
So from a data availability,
they're all the same.
01:35:20.340 --> 01:35:21.173
Yes.
01:35:23.729 --> 01:35:26.380
Do you understand, or
what is your understanding
01:35:26.380 --> 01:35:30.090
of the purposes of sub QSEs in general?
01:35:30.090 --> 01:35:31.120
Accounting.
01:35:31.120 --> 01:35:31.953
Okay.
01:35:31.953 --> 01:35:34.773
And so an individual
entity that is serving
01:35:34.773 --> 01:35:38.350
as a qualified scheduling
entity for third party
01:35:38.350 --> 01:35:42.680
may have a sub QSE for that
third parties, is that common?
01:35:42.680 --> 01:35:43.780
Yes, that is common.
01:35:44.850 --> 01:35:47.272
And in fact, if
we looked in this
01:35:47.272 --> 01:35:48.230
and I'm not gonna take the time
01:35:48.230 --> 01:35:49.600
because we have delicate minutes,
01:35:49.600 --> 01:35:54.600
but there is a British petroleum sub QSE
01:35:55.360 --> 01:35:57.183
that says Hudson next to it,
01:35:58.526 --> 01:36:02.783
which is on page four,
not quite to the middle.
01:36:04.427 --> 01:36:05.775
I see that.
01:36:05.775 --> 01:36:09.620
And Hudson is a
Just Energy affiliate
01:36:09.620 --> 01:36:11.520
that's part of the record in this case.
01:36:11.520 --> 01:36:16.520
So would your common
understanding of ERCOT operations
01:36:17.280 --> 01:36:19.826
be that that would be the Hudson numbers
01:36:19.826 --> 01:36:22.677
settled within BPs QSEs?
01:36:22.677 --> 01:36:25.577
I have no special knowledge,
but that sounds reasonable.
01:36:28.960 --> 01:36:31.570
But if you were asked
to look at the details of this
01:36:31.570 --> 01:36:35.120
and you had access to all of
this information within ERCOT
01:36:35.120 --> 01:36:40.040
you could make those determination.
01:36:40.040 --> 01:36:43.220
Whether the Hudson LSE is
contained within the sub QSE
01:36:43.220 --> 01:36:44.250
is that the question?
01:36:44.250 --> 01:36:46.839
Yes.
01:36:46.839 --> 01:36:47.672
Yes.
01:36:52.090 --> 01:36:54.590
And when we've
heard about limitations
01:36:54.590 --> 01:36:57.130
in the ability to make
detailed calculations
01:36:57.130 --> 01:36:58.187
down to each LSE,
01:36:59.380 --> 01:37:03.490
the data for each LSE
is available for ERCOT.
01:37:03.490 --> 01:37:05.230
And in fact, to come up with this,
01:37:05.230 --> 01:37:09.360
any of these QSE data for RDPA charges,
01:37:10.840 --> 01:37:15.840
that's a sum of each of
the LSEs load ratio share,
01:37:16.410 --> 01:37:18.500
or the RDPA charges, correct?
01:37:18.500 --> 01:37:20.710
Which column again,
are you talking about?
01:37:20.710 --> 01:37:21.800
The one that starts with LA?
01:37:21.800 --> 01:37:22.633
Yes.
01:37:22.633 --> 01:37:23.930
I'm not familiar
with that determined.
01:37:23.930 --> 01:37:24.930
It I'd have to look it up.
01:37:24.930 --> 01:37:26.241
I don't have, like I said,
01:37:26.241 --> 01:37:27.650
I don't have that memorized.
01:37:27.650 --> 01:37:31.700
I know that the one on the
right as a QSE level determinant.
01:37:31.700 --> 01:37:32.533
Okay.
01:37:32.533 --> 01:37:35.730
If we assume the one on the
left is a QSE level determinant.
01:37:35.730 --> 01:37:39.277
Then you just have it by
QSE, you don't have it by LSE.
01:37:40.720 --> 01:37:44.670
And if it's a determinant
that only contains low data
01:37:44.670 --> 01:37:48.473
and there is multiple LSEs, then it,
01:37:49.364 --> 01:37:52.120
you wouldn't necessarily
know how to apportion
01:37:52.120 --> 01:37:56.050
that QSE level dollars
down to the LSE level.
01:37:56.050 --> 01:37:58.770
If you had the LSE
extracts would say
01:37:58.770 --> 01:38:01.650
what portion of the load
ratio share was associated
01:38:01.650 --> 01:38:03.780
with each LSE, correct?
01:38:03.780 --> 01:38:05.736
I'm not familiar with those.
01:38:05.736 --> 01:38:06.993
LSE extracts.
01:38:11.464 --> 01:38:12.297
Okay.
01:38:23.890 --> 01:38:26.430
And when you did your,
01:38:26.430 --> 01:38:27.840
you didn't have this particular sheet
01:38:27.840 --> 01:38:30.660
but you had similar data
for the operating days
01:38:30.660 --> 01:38:34.470
that you did your
original calculations for,
01:38:34.470 --> 01:38:36.540
for the legislature, which I might add,
01:38:36.540 --> 01:38:39.923
you did very quickly in
response to the timing.
01:38:41.010 --> 01:38:43.800
Did you use this QSE level data?
01:38:43.800 --> 01:38:45.800
We use the QSE level data,
01:38:45.800 --> 01:38:48.815
and we netted that to
the counterparty level.
01:38:48.815 --> 01:38:49.648
Okay.
01:38:49.648 --> 01:38:54.200
And counterparty at that point would be
01:38:54.200 --> 01:38:56.680
the same financially responsible entity?
01:38:56.680 --> 01:38:58.880
Yes, it would be a
collection of QSEs
01:38:58.880 --> 01:39:00.130
and LSEs account holders.
01:39:17.622 --> 01:39:19.930
In the discussions
about your understanding
01:39:19.930 --> 01:39:23.980
of RDPA payments to reserves,
01:39:23.980 --> 01:39:25.660
those are paid to all reserves
01:39:25.660 --> 01:39:30.450
regardless of the type
of generator that it is,
01:39:30.450 --> 01:39:33.730
whether it's natural
gas or coal or nuclear,
01:39:33.730 --> 01:39:37.020
if there's room between
the LSL and the HSL
01:39:37.020 --> 01:39:42.020
or the operating level and the
HSL that generator gets paid.
01:39:43.630 --> 01:39:45.100
That's generally true.
01:39:45.100 --> 01:39:47.583
For wind it's only if
the wind is curtailed.
01:40:02.630 --> 01:40:05.023
And so if we're
looking at RDPA,
01:40:07.950 --> 01:40:12.950
can you give a general idea
of say on the 19th of that week,
01:40:13.830 --> 01:40:17.193
on the Thursday of that week,
01:40:18.650 --> 01:40:23.650
what levels the RDPA was
sitting at in terms of our range?
01:40:24.060 --> 01:40:28.030
It was a substantial portion
of, I would say, you know,
01:40:28.030 --> 01:40:30.460
$8,000 perhaps.
01:40:30.460 --> 01:40:33.506
And is that a unique
circumstance in your understanding
01:40:33.506 --> 01:40:34.390
in ERCOT operation?
01:40:34.390 --> 01:40:35.708
Yes, it is.
01:40:35.708 --> 01:40:40.540
And with the entities
that were paid that amount
01:40:40.540 --> 01:40:42.173
for reserves,
01:40:43.210 --> 01:40:45.960
would that have been an expected payment
01:40:45.960 --> 01:40:47.790
under normal operations?
01:40:47.790 --> 01:40:49.290
Under normal operations, no.
01:41:02.630 --> 01:41:07.630
Okay, I'm gonna skip for
a minute to your testimony
01:41:08.470 --> 01:41:09.853
at page 19.
01:41:17.600 --> 01:41:20.700
In there you have a proration
methodology, is that correct?
01:41:20.700 --> 01:41:21.533
Yes.
01:41:21.533 --> 01:41:22.366
First of all,
01:41:22.366 --> 01:41:25.600
whatever proration
methodology is necessary
01:41:25.600 --> 01:41:30.600
would only be necessary if
the total amounts of exposures
01:41:30.967 --> 01:41:35.510
to be allocated were
more than $2.1 billion.
01:41:35.510 --> 01:41:37.090
That's correct.
01:41:37.090 --> 01:41:39.560
And is it conceivable
in your mind
01:41:39.560 --> 01:41:44.490
that under a netted
scenario with some portion
01:41:44.490 --> 01:41:48.860
of opt-outs that we would
not get above 2.1 billion?
01:41:48.860 --> 01:41:51.500
It's difficult to say again,
01:41:51.500 --> 01:41:55.600
the $1.9 billion number
that we presented previously
01:41:55.600 --> 01:42:00.600
only represented for the RDPA
payments two day window,
01:42:00.600 --> 01:42:04.600
whereas the 4492 covers the entire week.
01:42:04.600 --> 01:42:08.760
So we'd have to balance that
fact that there's extra RDPA
01:42:08.760 --> 01:42:10.630
with the fact that there
might be some opt-outs,
01:42:10.630 --> 01:42:11.463
it's difficult to say.
01:42:11.463 --> 01:42:14.460
I think that the we'll
probably still hit the CAP.
01:42:14.460 --> 01:42:15.960
Have you looked
to see which days
01:42:15.960 --> 01:42:19.300
had actual positive RDPA payments?
01:42:19.300 --> 01:42:21.500
Yes, and Thursday and
Friday have the largest,
01:42:21.500 --> 01:42:23.500
but they're by no means the only.
01:42:23.500 --> 01:42:26.170
But Monday and Tuesday
don't have any correct
01:42:26.170 --> 01:42:29.080
or possibly even
negative one of those days.
01:42:29.080 --> 01:42:31.050
Definitely not negative.
01:42:31.050 --> 01:42:32.943
I don't recall off the top of my head.
01:42:32.943 --> 01:42:35.290
Okay, and the ideas
01:42:35.290 --> 01:42:37.520
it starts hitting under the way
01:42:37.520 --> 01:42:40.023
the world was working that week,
01:42:41.770 --> 01:42:44.000
when there were excess reserves
01:42:45.210 --> 01:42:48.267
that weren't being called upon
to actually generate energy.
01:42:48.267 --> 01:42:52.820
The RDPA, yeah those
charges are generated
01:42:52.820 --> 01:42:57.650
when there are reserves between
what ERCOT is dispatching
01:42:57.650 --> 01:42:59.550
and what's available to be dispatched.
01:43:03.270 --> 01:43:08.270
The actual total of those RDPA
charges and payments by day
01:43:11.310 --> 01:43:14.447
are readily available
to ERCOT and to you
01:43:14.447 --> 01:43:16.110
and to anyone who
wanted to look at it, correct?
01:43:16.110 --> 01:43:16.943
Yes
01:43:24.850 --> 01:43:25.700
And so when it,
01:43:28.490 --> 01:43:31.960
so if we are in some proration
methodology that's necessary,
01:43:31.960 --> 01:43:36.633
so total exposure, let's
say it ends up at $2.4 billion,
01:43:39.950 --> 01:43:44.630
would your proration
methodology kick in at that point?
01:43:44.630 --> 01:43:45.463
Yes.
01:43:45.463 --> 01:43:48.570
And are there other
probation methodologies
01:43:48.570 --> 01:43:49.580
that would be reasonable?
01:43:49.580 --> 01:43:50.413
Yes.
01:43:50.413 --> 01:43:53.130
And under your
proration methodology,
01:43:53.130 --> 01:43:56.273
the amount of funds and
that's in your testimony,
01:43:58.050 --> 01:44:01.610
would the amount of funds
going to an individual LSE
01:44:01.610 --> 01:44:05.320
could change dramatically
between whether or not
01:44:05.320 --> 01:44:08.243
we were just over the cap
or just under the cap, correct?
01:44:09.270 --> 01:44:11.080
That sounds right.
01:44:11.080 --> 01:44:15.080
And is that still
your testimony
01:44:15.080 --> 01:44:17.593
is the best proration methodology?
01:44:18.676 --> 01:44:22.250
Well, I will say that
there is a scenario
01:44:22.250 --> 01:44:26.170
that I was just recently considering
01:44:26.170 --> 01:44:29.650
where there could be a situation
01:44:29.650 --> 01:44:34.650
where an LSE has no pass
through to end use customers.
01:44:35.080 --> 01:44:38.360
And I think that that may
needs to be considered
01:44:38.360 --> 01:44:41.979
an proration methodology
so that I think there might be
01:44:41.979 --> 01:44:44.940
the proration methodologist
should take into account
01:44:44.940 --> 01:44:48.070
that there are LSEs
that do not pass through
01:44:48.070 --> 01:44:49.050
cost to customers.
01:44:49.050 --> 01:44:50.820
And that would occur for a rep
01:44:50.820 --> 01:44:52.950
that was predominantly serving
01:44:52.950 --> 01:44:55.220
residential and small
commercial customers.
01:44:55.220 --> 01:44:58.270
For example, their amount
of pass through if any,
01:44:58.270 --> 01:45:00.413
would be much less than an RFP
01:45:00.413 --> 01:45:03.350
that was serving primarily
industrial customers,
01:45:03.350 --> 01:45:04.220
for example.
01:45:04.220 --> 01:45:05.220
That sounds right.
01:45:06.130 --> 01:45:09.730
And actually in
this securitization,
01:45:09.730 --> 01:45:12.660
we could have municipalities
involved also, right.
01:45:12.660 --> 01:45:14.123
Good point.
01:45:15.020 --> 01:45:19.640
And that, depending on
how you characterize this pro
01:45:19.640 --> 01:45:22.090
this idea of pass through or not
01:45:22.090 --> 01:45:24.380
municipalities ultimately
will pass through
01:45:24.380 --> 01:45:28.660
all of these charges in theory,
is that your understanding?
01:45:28.660 --> 01:45:30.430
I'm not familiar with
municipalities passing.
01:45:30.430 --> 01:45:32.010
That could be claimed
or not be claimed,
01:45:32.010 --> 01:45:34.980
but if they said, you know,
we only have our customers
01:45:34.980 --> 01:45:36.360
to recoup this from.
01:45:36.360 --> 01:45:38.000
So ultimately this
would be passed through
01:45:38.000 --> 01:45:39.440
to all our customers.
01:45:39.440 --> 01:45:42.440
So under this scenario that
municipality could come in
01:45:42.440 --> 01:45:44.900
and get 100%.
01:45:44.900 --> 01:45:45.733
Objection, your honor.
01:45:45.733 --> 01:45:48.150
I think the witnesses
already explained she doesn't
01:45:48.150 --> 01:45:49.830
that she doesn't have any familiarity
01:45:49.830 --> 01:45:51.083
with the municipalities.
01:45:53.300 --> 01:45:54.654
Can Ms. Catherine rephrase.
01:45:54.654 --> 01:45:55.487
I think she's
trying to explore that
01:45:55.487 --> 01:45:58.395
and if she continues
to not know, we can,
01:45:58.395 --> 01:46:00.200
we wouldn't find that out, so overrule.
01:46:00.200 --> 01:46:01.553
You can recharge it if you feel like it,
01:46:02.633 --> 01:46:03.940
if it's appropriate.
01:46:03.940 --> 01:46:07.200
Yeah, my intention
was to staff's intention
01:46:07.200 --> 01:46:09.650
was to apply a proration methodology
01:46:09.650 --> 01:46:12.610
that gives some preference to the idea
01:46:12.610 --> 01:46:15.510
that there are end customers,
that the reps are the,
01:46:15.510 --> 01:46:20.140
the LSEs are gonna
need to refund dollars to
01:46:20.140 --> 01:46:24.290
under 4492 and to prioritize those
01:46:24.290 --> 01:46:26.180
because they need to
pay those dollars back
01:46:26.180 --> 01:46:29.513
to the end use customers
per the securitization bill.
01:46:30.940 --> 01:46:35.940
But to the extent that ends
up with entities who have the,
01:46:38.730 --> 01:46:41.587
are bearing the full weight
of these RDPA charges
01:46:41.587 --> 01:46:43.997
and the answering
service charges over 9,000
01:46:43.997 --> 01:46:47.077
and not passing those
through to those customers.
01:46:50.330 --> 01:46:52.240
If you put them at
the bottom of the stack
01:46:52.240 --> 01:46:55.720
for funding or no funding,
01:46:55.720 --> 01:46:59.260
then that would not help that
entities liquidity in any way.
01:46:59.260 --> 01:47:01.020
I could see a mixed
proration method
01:47:01.020 --> 01:47:06.020
where that there is some
priority given to the pass through
01:47:06.797 --> 01:47:10.300
and use customers given
that that is the stated objective
01:47:10.300 --> 01:47:13.255
of in 4492,
01:47:13.255 --> 01:47:16.860
and as well as payments
and for obligations
01:47:16.860 --> 01:47:17.693
that were incurred.
01:47:17.693 --> 01:47:21.330
So there's kind of two
things that are noted in 4492.
01:47:21.330 --> 01:47:24.360
And so I could see there being
some mixed proration method
01:47:24.360 --> 01:47:28.040
to allocate some funds
in a proportional manner
01:47:28.040 --> 01:47:30.420
and some funds in a
way that gives priority
01:47:30.420 --> 01:47:32.360
to those that have to pass
through to end use customers
01:47:32.360 --> 01:47:35.200
because they have
to refund those dollars.
01:47:35.200 --> 01:47:37.763
But whatever proration
methodology is used,
01:47:42.670 --> 01:47:44.320
would it be reasonable to have something
01:47:44.320 --> 01:47:48.730
that dramatically changes
the distribution of dollars
01:47:48.730 --> 01:47:52.033
from if you were at 2.1 versus 2.11?
01:47:54.903 --> 01:47:56.260
Can you say that one more time?
01:47:56.260 --> 01:47:58.730
Yeah, it wasn't very hard.
01:47:58.730 --> 01:48:01.710
If you have a proration methodology,
01:48:01.710 --> 01:48:04.740
if you have a basic
allocation of proceeds,
01:48:04.740 --> 01:48:09.163
assuming we're at 2.09 billion,
01:48:10.180 --> 01:48:13.720
and then if we end up at 2.11 billion,
01:48:13.720 --> 01:48:16.490
would you expect that
that fundamental allocation
01:48:16.490 --> 01:48:18.330
would change dramatically?
01:48:18.330 --> 01:48:19.630
I don't have an opinion.
01:48:31.110 --> 01:48:32.204
Okay.
01:48:32.204 --> 01:48:33.037
If we get back to,
01:48:33.037 --> 01:48:35.540
if you don't do this itemization
01:48:37.220 --> 01:48:40.360
of which customers could
have been passed through
01:48:40.360 --> 01:48:42.120
or were passed through,
01:48:42.120 --> 01:48:46.150
then when we get to your
listing of doing the calculation
01:48:46.150 --> 01:48:50.253
of netting as recommended
in your testimony,
01:48:51.760 --> 01:48:55.063
I'm looking at page 16 of
your testimony, 15 and 16.
01:48:57.860 --> 01:48:59.014
Got it.
01:48:59.014 --> 01:49:00.170
And it actually begins,
I guess, some 14.
01:49:00.170 --> 01:49:01.353
Yes.
01:49:01.353 --> 01:49:02.400
But if we go
through these steps,
01:49:02.400 --> 01:49:07.400
each of these steps are known quantities
01:49:07.810 --> 01:49:10.347
that can be verified by the LSE.
01:49:11.200 --> 01:49:12.740
By the LSEs, yes.
01:49:12.740 --> 01:49:17.150
And you step through
the mechanisms
01:49:17.150 --> 01:49:19.550
by which the LSEs
could produce this data
01:49:19.550 --> 01:49:22.810
that could be then
review by the Commission.
01:49:22.810 --> 01:49:23.643
Yes.
01:49:23.643 --> 01:49:26.160
And, or possibly with
your help or your staff's help,
01:49:26.160 --> 01:49:27.910
depending on resource availability.
01:49:30.100 --> 01:49:33.540
If you did not do the
proration methodology
01:49:33.540 --> 01:49:36.590
that you suggested in on page 19,
01:49:36.590 --> 01:49:39.630
or looking into customer
specific contracts,
01:49:39.630 --> 01:49:44.193
the item you have there for number 11,
01:49:44.193 --> 01:49:46.877
that talks about
percentage of pass throughs
01:49:46.877 --> 01:49:47.860
and that sort of thing
01:49:47.860 --> 01:49:52.860
that would not be relevant
to your netting proposal.
01:49:53.330 --> 01:49:54.273
That's correct.
01:49:59.750 --> 01:50:02.070
And with regard
to the understanding
01:50:02.070 --> 01:50:06.250
of how much subjectivity
there is to these numbers
01:50:11.250 --> 01:50:14.750
for the Commission to be able to verify
01:50:14.750 --> 01:50:18.753
that when an LSE comes in
and says, this was my exposure,
01:50:21.730 --> 01:50:25.020
are there some base
level data that is available
01:50:25.020 --> 01:50:27.960
through ERCOT so that you or ERCOT
01:50:27.960 --> 01:50:30.720
or whoever at the
staff is working on this
01:50:30.720 --> 01:50:34.040
would be able to have some verification
01:50:34.040 --> 01:50:38.743
that that exposure is within
the realm of reasonableness?
01:50:43.320 --> 01:50:45.080
Let me phrase a
little more specifically,
01:50:45.080 --> 01:50:46.630
I'm not trying to be difficult.
01:50:47.590 --> 01:50:50.890
For example, this happened
with Rayburn in this case, right?
01:50:50.890 --> 01:50:53.000
The original testimony from Rayburn
01:50:53.000 --> 01:50:56.980
identified a number for
RDPA and ancillary services
01:50:56.980 --> 01:50:59.610
that was much higher and
ERCOT was able to come in
01:50:59.610 --> 01:51:02.494
and say that it's not,
01:51:02.494 --> 01:51:04.700
that exceeds our understanding
01:51:04.700 --> 01:51:07.452
of what these two
charges would equate to.
01:51:07.452 --> 01:51:08.626
Yes.
01:51:08.626 --> 01:51:10.590
Okay, and ERCOT
had the ability to do that
01:51:10.590 --> 01:51:13.880
for that entity because
they just had a single
01:51:13.880 --> 01:51:17.420
presumably that LSE was only in one QSE
01:51:17.420 --> 01:51:18.670
and there was nobody else involved.
01:51:18.670 --> 01:51:19.567
So they were able to do that.
01:51:19.567 --> 01:51:20.640
But they made some,
01:51:20.640 --> 01:51:22.570
I assume they made some
simplifying assumptions
01:51:22.570 --> 01:51:25.860
so that they could get a
reasonability number. Yes.
01:51:25.860 --> 01:51:27.880
And so similar
process could be done
01:51:27.880 --> 01:51:30.713
with simplifying assumptions
for the entire market.
01:51:33.310 --> 01:51:35.240
I think you would need
to spell out what you mean
01:51:35.240 --> 01:51:36.500
by those simplifying assumptions
01:51:36.500 --> 01:51:39.520
will this assumptions be that all QSEs
01:51:39.520 --> 01:51:42.403
pass all uplift costs down to all LSEs.
01:51:43.520 --> 01:51:44.703
That could be one.
01:51:46.500 --> 01:51:49.763
I don't know how to
apportion the QSE level,
01:51:50.720 --> 01:51:53.920
build determinants <v
->Right, and ultimately-
01:51:53.920 --> 01:51:56.813
Come up with
some rubric for that.
01:51:58.230 --> 01:52:00.430
But either way, no
LSE should be able,
01:52:00.430 --> 01:52:02.720
should be coming in
and saying their exposure
01:52:02.720 --> 01:52:05.910
was greater than their QSEs exposure.
01:52:05.910 --> 01:52:07.510
I agree with that.
01:52:07.510 --> 01:52:10.210
So we could do a QSE
exposure calculation,
01:52:10.210 --> 01:52:12.853
and at least have a not
to exceed understanding.
01:52:13.780 --> 01:52:15.430
It appears that
ERCOT has already done
01:52:15.430 --> 01:52:16.263
the QSE level exposure.
01:52:16.263 --> 01:52:17.925
That's what this is, correct?
01:52:17.925 --> 01:52:18.758
Right.
01:52:18.758 --> 01:52:20.567
This exhibit that
you showed me, yes.
01:52:20.567 --> 01:52:24.400
And so if, if there was
an example yesterday
01:52:24.400 --> 01:52:26.470
about a 100 LSEs and a QSE,
01:52:26.470 --> 01:52:28.970
is it your understanding
that that's a common thing
01:52:28.970 --> 01:52:30.203
or normal thing?
01:52:30.203 --> 01:52:32.480
I mean, you can see
NextEra here has 26.
01:52:32.480 --> 01:52:35.723
I don't know that those
are LSE QSEs, but.
01:52:35.723 --> 01:52:37.240
But they're each separate QSEs.
01:52:37.240 --> 01:52:38.603
They're each separate QSEs.
01:52:38.603 --> 01:52:40.176
100 LSEs under that sub QSE.
01:52:40.176 --> 01:52:41.953
Yes so, and this
is a case in which.
01:52:41.953 --> 01:52:43.130
(indistinct) I can't
have y'all talking over.
01:52:43.130 --> 01:52:44.796
One at a time <v
->I'm sorry.
01:52:44.796 --> 01:52:46.080
I apologize.
01:52:46.080 --> 01:52:47.263
Go ahead and explain it.
01:52:47.263 --> 01:52:49.573
There are cases in which,
01:52:50.930 --> 01:52:53.270
such as all of these sub QSEs you see,
01:52:53.270 --> 01:52:55.370
this is likely an entity that is giving
01:52:55.370 --> 01:52:59.940
every unaffiliated entity its own QSE,
01:52:59.940 --> 01:53:02.830
but there are other cases
in which they'll, you know,
01:53:02.830 --> 01:53:05.883
merge multiple LSEs within one QSE,
01:53:07.340 --> 01:53:08.573
both scenarios exist.
01:53:11.470 --> 01:53:12.380
And when we say multiple,
01:53:12.380 --> 01:53:15.570
do you know how many
LSEs there are in the market,
01:53:15.570 --> 01:53:17.183
roughly operating.
01:53:19.080 --> 01:53:21.350
I'm gonna guess somewhere
around 80 to 100, but.
01:53:21.350 --> 01:53:22.552
Okay.
01:53:22.552 --> 01:53:23.385
Yeah.
01:53:23.385 --> 01:53:25.182
So no one QSE has 100 LSEs?
01:53:25.182 --> 01:53:26.015
No.
01:53:28.020 --> 01:53:31.770
And in fact, in this list
with these RDPA payments,
01:53:31.770 --> 01:53:33.640
if you look at, and charges,
01:53:33.640 --> 01:53:36.220
if you assume with me that the column
01:53:36.220 --> 01:53:39.160
that has the load
allocated starts with the LA
01:53:39.160 --> 01:53:45.130
are the loads, then each
of those, only those QSEs
01:53:45.130 --> 01:53:47.150
that have a positive number in that,
01:53:47.150 --> 01:53:50.990
or have a number in that
column would be QSEs
01:53:50.990 --> 01:53:52.743
that represent LSEs.
01:53:55.068 --> 01:53:59.783
That's or for whatever
reason the LSE had no load.
01:54:01.220 --> 01:54:02.270
If it had no load.
01:54:02.270 --> 01:54:03.710
Fair enough for that week.
01:54:03.710 --> 01:54:04.543
For that week.
01:54:04.543 --> 01:54:07.520
That would have allocated
charges that would be part of.
01:54:07.520 --> 01:54:09.420
If it had no load it would.
01:54:09.420 --> 01:54:11.560
Yeah, that again, I apologize.
01:54:11.560 --> 01:54:12.393
Go ahead.
01:54:13.360 --> 01:54:14.550
If it had no load,
01:54:14.550 --> 01:54:16.860
then it would not have
any load allocated charges
01:54:16.860 --> 01:54:17.710
during that week.
01:54:19.530 --> 01:54:21.835
And this would be the
entirety of the universe
01:54:21.835 --> 01:54:25.230
based on my representation of
this being ERCOT's response.
01:54:25.230 --> 01:54:30.230
There's no other, other
QSEs that would be involved.
01:54:32.060 --> 01:54:34.433
Based on your
representation, yes.
01:54:40.786 --> 01:54:45.160
And we could perform,
ERCOT could perform,
01:54:45.160 --> 01:54:49.980
you could perform the
same sort of calculation
01:54:49.980 --> 01:54:54.250
for the ancillary service
charges over 9,000 by each QSE,
01:54:54.250 --> 01:54:55.083
correct?
01:54:56.050 --> 01:54:57.480
Yes.
01:54:57.480 --> 01:54:58.430
Ms. Webking.
01:54:58.430 --> 01:55:01.665
I had anticipated we'll
take a break at 11.
01:55:01.665 --> 01:55:03.960
Should we wait for you to finish
01:55:03.960 --> 01:55:05.250
or you have much more...
01:55:05.250 --> 01:55:07.520
I think a break right now
would be perfect, Your Honor.
01:55:07.520 --> 01:55:08.820
Okay, let's do that.
01:55:08.820 --> 01:55:09.970
And before we do break,
01:55:09.970 --> 01:55:12.120
just this is our last witness.
01:55:12.120 --> 01:55:15.480
I'm wondering, just for
purpose of planning our day
01:55:16.762 --> 01:55:19.100
by show of hands, could I see folks
01:55:19.100 --> 01:55:22.453
who are still wanting to
cross examine this witness?
01:55:24.050 --> 01:55:27.090
Okay, so we still have
some lifting to do, fair enough.
01:55:27.090 --> 01:55:28.540
Let's take a 10 minute break.
01:55:35.910 --> 01:55:38.690
Okay, we're back on
the record after our break
01:55:38.690 --> 01:55:41.430
and Ms. Webking, you may continue.
01:55:41.430 --> 01:55:42.630
Thank you, your honor.
01:55:43.610 --> 01:55:45.390
Welcome back, Ms. Bivens.
01:55:45.390 --> 01:55:46.390
Thank you.
01:55:50.610 --> 01:55:53.810
Just want to try to
continue a little bit
01:55:53.810 --> 01:55:54.820
from where we were
01:55:54.820 --> 01:55:59.820
in terms of the ability of
ERCOT or you and your staff
01:56:00.840 --> 01:56:03.940
or someone to provide sort of a,
01:56:03.940 --> 01:56:08.870
not to exceed at least review
of what LSEs might submit
01:56:10.640 --> 01:56:12.320
for their exposure.
01:56:12.320 --> 01:56:15.670
And I think, I don't want
to put words in your mouth,
01:56:15.670 --> 01:56:18.390
but I think we established
that at least at a QSE level,
01:56:18.390 --> 01:56:19.720
you would be able to understand
01:56:19.720 --> 01:56:22.160
what that not to exceed
numbers should look like
01:56:22.160 --> 01:56:24.020
with clarity from the
Commission of what charges
01:56:24.020 --> 01:56:25.420
should be included.
01:56:25.420 --> 01:56:28.190
Yeah, I would like,
I can't guarantee
01:56:28.190 --> 01:56:30.070
that's gonna cover all cases
01:56:30.070 --> 01:56:32.300
cause this is the first time
I'm thinking of it like that,
01:56:32.300 --> 01:56:36.063
but it seems like that
would be broadly true.
01:56:39.010 --> 01:56:41.710
And the LSEs would have
the opportunity to come in
01:56:41.710 --> 01:56:45.960
and explain if for some
reason that wasn't the case.
01:56:45.960 --> 01:56:48.300
But if you have an LSE
who's not in this room
01:56:48.300 --> 01:56:50.690
and who hasn't been
participating in this
01:56:50.690 --> 01:56:51.870
and they do a calculation
01:56:51.870 --> 01:56:54.020
and submit all of their
ancillary service charges,
01:56:54.020 --> 01:56:56.211
instead of only those above 9,000,
01:56:56.211 --> 01:56:58.360
you'd be able to recognize that.
01:56:58.360 --> 01:56:59.193
Yes.
01:57:10.690 --> 01:57:14.410
And for each LSE, once
you know their load ratio share,
01:57:14.410 --> 01:57:18.563
you would be able to identify
what their RDPA charges
01:57:22.420 --> 01:57:26.300
would have the maximum
that they could have been.
01:57:26.300 --> 01:57:29.203
The maximum they
could have been, yes.
01:57:30.580 --> 01:57:33.760
And the place where
we run into limitations,
01:57:33.760 --> 01:57:36.680
I think is ERCOT put
an and in your testimony
01:57:36.680 --> 01:57:39.910
is just that you can't
make a positive averment
01:57:39.910 --> 01:57:43.880
that their QSE actually
charged that to them.
01:57:43.880 --> 01:57:45.570
And so you need the LSE to come in
01:57:45.570 --> 01:57:49.150
and make that representation
one way or the other.
01:57:49.150 --> 01:57:50.223
That's one issue.
01:58:05.070 --> 01:58:10.070
And with regard to
dollars proceeds out of this
01:58:11.230 --> 01:58:13.750
that any LSE receives
01:58:13.750 --> 01:58:18.010
one aspect of the legislation
that kind of addresses
01:58:18.010 --> 01:58:22.000
any potential double recovery
is the section that requires
01:58:22.000 --> 01:58:25.460
the load serving entity to
flow through any proceeds
01:58:25.460 --> 01:58:27.770
for these charges where the customer
01:58:27.770 --> 01:58:31.103
has actually already paid
for those charges, correct?
01:58:32.410 --> 01:58:35.450
Can you tell me what
you mean by flow through,
01:58:35.450 --> 01:58:38.070
they have to remit excess payments.
01:58:38.070 --> 01:58:39.770
They have to remit
excess payments, yes.
01:58:39.770 --> 01:58:44.130
And if a customer was charge
for their portion of the RDPA
01:58:44.130 --> 01:58:47.050
in some sort of an ancillary
charge pass through contract,
01:58:47.050 --> 01:58:50.650
for example, and that
customer paid that amount,
01:58:50.650 --> 01:58:55.650
then the LSE would
credit the customer back.
01:58:55.650 --> 01:58:56.714
That's my understanding.
01:58:56.714 --> 01:58:57.547
Okay.
01:59:15.030 --> 01:59:16.790
When we're looking at the proration,
01:59:16.790 --> 01:59:21.790
if we end up at a
number that say 2.3 billion
01:59:22.900 --> 01:59:24.573
instead of 2.1 billion,
01:59:25.649 --> 01:59:29.730
would another reasonable
proration methodology
01:59:29.730 --> 01:59:31.882
be to say, all right,
01:59:31.882 --> 01:59:35.580
let's just take that
ratio of 2.3 to 2.1.
01:59:35.580 --> 01:59:40.580
So roughly 90% as a very
rough number for this calculation
01:59:42.571 --> 01:59:46.570
and each entity that documented exposure
01:59:46.570 --> 01:59:48.750
would get 90% of their exposure.
01:59:48.750 --> 01:59:50.050
That's one way to do it.
02:00:04.247 --> 02:00:05.500
I have no further questions.
02:00:05.500 --> 02:00:06.992
Thank you, Ms. Bivens
Sure.
02:00:06.992 --> 02:00:07.825
Thanks for your
honors, Commissioners.
02:00:07.825 --> 02:00:11.910
Thank you.
02:00:11.910 --> 02:00:13.532
NRG?
02:00:13.532 --> 02:00:15.032
Yes, Your Honor.
02:00:24.001 --> 02:00:25.330
Good morning again
Commissioners, your honor,
02:00:25.330 --> 02:00:27.871
Andrea Russell on behalf of NRG.
02:00:27.871 --> 02:00:28.726
Good morning, Ms. Bivens.
02:00:28.726 --> 02:00:29.559
Morning.
02:00:30.670 --> 02:00:33.000
I wanted to take
a look again and...
02:00:33.000 --> 02:00:33.940
Bless you.
02:00:33.940 --> 02:00:37.540
clarify some of the testimony
02:00:37.540 --> 02:00:40.620
that you gave just
previously with Ms. Webking
02:00:40.620 --> 02:00:43.460
related to page 19 of your testimony
02:00:43.460 --> 02:00:47.817
and the proposal that
you've got related to proration,
02:00:49.730 --> 02:00:54.363
on line I think it's 11,
02:00:55.350 --> 02:00:58.630
your part of your proposal
says that each LSE
02:00:58.630 --> 02:01:00.880
that applies to receive
financing proceeds
02:01:00.880 --> 02:01:03.980
will provide the amount
of the relevant costs
02:01:03.980 --> 02:01:07.150
that will ultimately pass
through to the end use customer.
02:01:07.150 --> 02:01:10.449
And that would be used to
in the proration calculation,
02:01:10.449 --> 02:01:11.610
is that correct?
02:01:11.610 --> 02:01:12.930
Under this method, yes.
02:01:12.930 --> 02:01:17.930
Okay, so are you aware
that there are some reps
02:01:18.130 --> 02:01:21.430
who may have a contractual
right to pass through costs
02:01:21.430 --> 02:01:22.520
to their customers,
02:01:22.520 --> 02:01:26.421
but given the amount of
costs that a customer may have
02:01:26.421 --> 02:01:29.790
a customer may have
incurred related to the storm
02:01:29.790 --> 02:01:33.297
that some reps may have
negotiated with their customers
02:01:33.297 --> 02:01:38.297
and not charged all
those costs or, you know,
02:01:38.339 --> 02:01:41.110
put those customers on a payment plan
02:01:41.110 --> 02:01:43.150
or made some other
arrangements with their customers?
02:01:43.150 --> 02:01:44.170
Yes.
02:01:44.170 --> 02:01:48.510
Okay, but under this proposal,
02:01:48.510 --> 02:01:53.140
that rep would not be able
to include those obligations
02:01:53.140 --> 02:01:54.930
if it was not actually passed through,
02:01:54.930 --> 02:01:57.550
those costs were not passed
through to the customer.
02:01:57.550 --> 02:01:59.630
Under this method, yes.
02:01:59.630 --> 02:02:03.470
So under this method,
02:02:03.470 --> 02:02:08.178
if a rep has maybe primarily
residential customers
02:02:08.178 --> 02:02:13.178
and with fixed contracts and
has no ability or, you know,
02:02:13.300 --> 02:02:15.350
can't otherwise pass
those costs through,
02:02:16.870 --> 02:02:20.080
they would not be able
to recover any costs
02:02:21.040 --> 02:02:23.100
if your proration method was applied?
02:02:23.100 --> 02:02:24.580
Yeah, so earlier I stated that
02:02:24.580 --> 02:02:26.410
I could see a different method
02:02:26.410 --> 02:02:27.650
that was more of a mixed method
02:02:27.650 --> 02:02:30.300
that included some prioritization
for end-use customers
02:02:30.300 --> 02:02:33.570
that also included some dollars
02:02:33.570 --> 02:02:36.350
for those who were not able
to pass through those costs.
02:02:36.350 --> 02:02:41.130
And would that mix method be maybe more
02:02:41.130 --> 02:02:44.150
in keeping with your
goal of promoting liquidity
02:02:44.150 --> 02:02:44.983
in the market,
02:02:44.983 --> 02:02:47.640
by allowing reps who may
be shielded their customers
02:02:47.640 --> 02:02:50.850
from these costs to be able to
access some of these funds?
02:02:50.850 --> 02:02:52.580
From the health of
the wholesale market,
02:02:52.580 --> 02:02:54.085
it's possible that that would,
02:02:54.085 --> 02:02:57.970
that would help stabilize and
prevent some future defaults.
02:02:57.970 --> 02:03:01.410
And maybe more complete way
02:03:01.410 --> 02:03:03.430
than what you proposed
in your written testimony?
02:03:03.430 --> 02:03:04.263
Yes.
02:03:04.263 --> 02:03:05.399
Okay, great thank you.
02:03:05.399 --> 02:03:07.097
No further questions.
02:03:10.680 --> 02:03:12.213
Rayburn?
02:03:12.213 --> 02:03:15.046
Just a few
question, your honor.
02:03:27.010 --> 02:03:30.010
Commissioners, your honor, Ms. Bivens,
02:03:30.010 --> 02:03:30.860
Justin Mirabal
02:03:30.860 --> 02:03:33.473
on behalf of Rayburn
Country Electric Cooperative.
02:03:35.450 --> 02:03:37.870
Ms. Bivens, I would like
to start with your testimony
02:03:37.870 --> 02:03:42.660
on page nine lines 22 through 26.
02:03:42.660 --> 02:03:44.460
Just let me know when you get there.
02:03:50.260 --> 02:03:51.093
Yes.
02:03:52.100 --> 02:03:56.200
So in that section of your
prepared direct testimony,
02:03:56.200 --> 02:03:58.250
you recommended that
a load serving entities
02:03:58.250 --> 02:04:02.310
should calculate its
exposure under Subchapter N
02:04:02.310 --> 02:04:05.590
on a net basis taking into consideration
02:04:05.590 --> 02:04:08.740
the larger corporate structure of an LSE
02:04:08.740 --> 02:04:10.860
and the other market participants
02:04:10.860 --> 02:04:13.240
within that corporate
structure, is that correct?
02:04:13.240 --> 02:04:14.073
Correct.
02:04:18.590 --> 02:04:21.120
And you explained to
your recommendation
02:04:21.120 --> 02:04:24.530
regarding how to
calculate an LSEs exposure
02:04:24.530 --> 02:04:28.870
is based on a plain reading
of Subchapter N of HB 4492,
02:04:29.800 --> 02:04:31.380
is that right?
02:04:31.380 --> 02:04:32.213
Yes.
02:04:33.680 --> 02:04:35.030
So based on your testimony,
02:04:35.030 --> 02:04:38.440
is it fair to say that you have reviewed
02:04:38.440 --> 02:04:41.327
and you're familiar with HB 4492?
02:04:41.327 --> 02:04:42.160
Yes.
02:04:43.688 --> 02:04:46.640
Okay, I would like to jump
ahead in your testimony
02:04:46.640 --> 02:04:50.373
to page 20, lines 22 through 24.
02:04:54.750 --> 02:04:56.610
Just let me know when you're there.
02:04:56.610 --> 02:04:58.773
20, page 20 yeah I'm there.
02:04:58.773 --> 02:05:01.240
Page 20 lines 22 through 24.
02:05:01.240 --> 02:05:02.073
Yes.
02:05:03.580 --> 02:05:05.470
So in this section
of your testimony
02:05:05.470 --> 02:05:09.400
you discuss about whether to prorate
02:05:10.240 --> 02:05:15.240
the securitization proceeds
available under Subchapter N
02:05:16.207 --> 02:05:18.013
and you recommended that if an LSE
02:05:19.000 --> 02:05:23.660
is on the ERCOT short
list, short pay list rather,
02:05:23.660 --> 02:05:27.640
and has access to unique
alternate financing opportunities
02:05:27.640 --> 02:05:30.140
outside of sub-Chapter N,
02:05:30.140 --> 02:05:34.270
that LSE should be
prioritized lower than entities
02:05:34.270 --> 02:05:35.500
that do not have access
02:05:35.500 --> 02:05:38.030
to such alternate
financing opportunities,
02:05:38.030 --> 02:05:39.082
is that right?
02:05:39.082 --> 02:05:40.180
Yes.
02:05:40.180 --> 02:05:44.810
So is that recommendation
to prioritize certain LSEs
02:05:44.810 --> 02:05:46.290
above others?
02:05:46.290 --> 02:05:49.710
Is that required under HB 4492?
02:05:50.800 --> 02:05:53.097
I believe the Commission
gets to choose the proration
02:05:53.097 --> 02:05:54.630
and the prioritization method.
02:05:54.630 --> 02:05:57.246
But is it required
under the statute?
02:05:57.246 --> 02:06:02.246
It's not required, no.
02:06:02.730 --> 02:06:04.603
Thank you, Ms. Bivens,
no further questions.
02:06:09.040 --> 02:06:09.873
Tenaska?
02:06:10.995 --> 02:06:12.342
No questions, your honor.
02:06:12.342 --> 02:06:13.617
Texpo?
02:06:13.617 --> 02:06:15.418
No questions, your honor.
02:06:15.418 --> 02:06:16.736
TIEC?
02:06:16.736 --> 02:06:18.986
No questions, your honor.
02:06:21.657 --> 02:06:22.607
TXU and Luminant?
02:06:23.500 --> 02:06:24.400
Yes, your honor.
02:06:35.414 --> 02:06:36.247
Good morning, Ms. Bivens
02:06:36.247 --> 02:06:40.240
My name is Bill Moore representing
the TXU LSEs and Luminant
02:06:44.410 --> 02:06:47.790
I think it's fair as
reflected in your testimony
02:06:47.790 --> 02:06:51.400
as you just agreed with
counsel for Rayburn Country,
02:06:51.400 --> 02:06:53.440
your recommendation
with respect to netting,
02:06:53.440 --> 02:06:55.400
you say is based upon
a plain language reading
02:06:55.400 --> 02:06:57.110
of the statute, is that correct?
02:06:57.110 --> 02:06:58.470
Yes.
02:06:58.470 --> 02:07:02.433
So do you have a
copy of staff's exhibit four,
02:07:03.280 --> 02:07:06.740
which is House Bill 4492?
02:07:06.740 --> 02:07:07.573
Yes.
02:07:20.640 --> 02:07:25.640
Could you turn to page
16 of House Bill 4492
02:07:34.100 --> 02:07:38.010
Do you see the definition
there of uplift balance?
02:07:38.010 --> 02:07:38.843
Yes.
02:07:38.843 --> 02:07:39.890
Paragraph four.
02:07:39.890 --> 02:07:43.190
Great, could you read
that definition for us please?
02:07:43.190 --> 02:07:44.790
Uplift balance means
an amount of money
02:07:44.790 --> 02:07:46.697
not more than 2.1
billion that was uplifted
02:07:46.697 --> 02:07:49.270
the load serving entities
on the load ratio share basis
02:07:49.270 --> 02:07:50.103
due to energy.
02:07:50.103 --> 02:07:51.020
Could you go a little bit slow.
02:07:51.020 --> 02:07:51.995
Sorry.
02:07:51.995 --> 02:07:53.400
(laughing)
02:07:53.400 --> 02:07:55.900
I have it memorized at
this point, I apologize.
02:07:55.900 --> 02:07:58.550
Uplift balance means an amount of money
02:07:58.550 --> 02:08:01.060
of not more than 2.1 billion
02:08:01.060 --> 02:08:03.360
that was uplifted to
load serving entities
02:08:03.360 --> 02:08:07.480
on a load ratio share basis
due to energy consumption
02:08:07.480 --> 02:08:09.390
during the period of emergency
02:08:09.390 --> 02:08:12.880
for reliability deployment
price at our charges
02:08:12.880 --> 02:08:15.010
and ancillary service costs
02:08:15.010 --> 02:08:19.090
in excess of the Commissions
system-wide offer cap
02:08:19.090 --> 02:08:24.090
excluding amount securitized
under Subchapter D Chapter 41.
02:08:24.660 --> 02:08:27.650
The term does not include
amounts that were part
02:08:27.650 --> 02:08:29.510
of the prevailing settlement point price
02:08:29.510 --> 02:08:31.283
during the period of emergency.
02:08:32.250 --> 02:08:33.083
Thank you.
02:08:33.083 --> 02:08:35.560
So, one thing I noticed as you read that
02:08:35.560 --> 02:08:37.930
you did not say the
word net, is that correct?
02:08:37.930 --> 02:08:39.020
Correct.
02:08:39.020 --> 02:08:41.110
And that's because the
word net does not appear
02:08:41.110 --> 02:08:43.660
in that definition of uplift
balance, is that correct?
02:08:43.660 --> 02:08:45.060
Correct.
02:08:45.060 --> 02:08:50.060
So would you refer in your
testimony to page six of 21?
02:09:11.900 --> 02:09:12.820
I'm there.
02:09:12.820 --> 02:09:17.230
Great, there at
line 20 on page six,
02:09:17.230 --> 02:09:18.320
the question is asked,
02:09:18.320 --> 02:09:21.940
please describe the costs
included in the uplift balance
02:09:21.940 --> 02:09:26.190
as defined in PURA
section 39.6524, right?
02:09:26.190 --> 02:09:27.023
Yes.
02:09:27.023 --> 02:09:31.043
And that reference
to PURA section 39.6.2
02:09:32.140 --> 02:09:37.140
39.6524 is the definition
that you just read,
02:09:37.140 --> 02:09:37.973
is that correct?
02:09:37.973 --> 02:09:38.806
Yes.
02:09:39.750 --> 02:09:44.750
Now your answer to that
question on lines 22 and 23 says,
02:09:45.180 --> 02:09:46.380
tell me if I get this right,
02:09:46.380 --> 02:09:48.790
the costs included in the uplift balance
02:09:48.790 --> 02:09:51.910
are the net reliability
deployment price adder,
02:09:51.910 --> 02:09:53.150
RDPA charges,
02:09:53.150 --> 02:09:56.700
and the net charges for
day ahead ancillary services
02:09:56.700 --> 02:09:58.090
for the amounts that were priced
02:09:58.090 --> 02:10:01.780
over the system-wide offer cap, SW cap.
02:10:01.780 --> 02:10:03.080
That's your testimony, right?
02:10:03.080 --> 02:10:04.250
Yes.
02:10:04.250 --> 02:10:09.250
Now in that answer, the
word net appears twice,
02:10:09.640 --> 02:10:10.473
is that right?
02:10:10.473 --> 02:10:11.464
Yes.
02:10:11.464 --> 02:10:14.060
And you just agreed
with me that the definition
02:10:14.060 --> 02:10:17.500
that is posed to which
the question is posed
02:10:17.500 --> 02:10:20.830
doesn't include the word
net at all, isn't that right?
02:10:20.830 --> 02:10:25.170
Yes. I included the
entire reading of HB 4492
02:10:25.170 --> 02:10:27.967
and the determination, so net.
02:10:27.967 --> 02:10:32.630
Your testimony is the entire
reading includes adding words
02:10:32.630 --> 02:10:36.440
to the statute that don't
appear, is that correct?
02:10:36.440 --> 02:10:39.583
The word net does not
appear, but the concept appears.
02:10:41.430 --> 02:10:43.860
So the definition
in the legislature,
02:10:43.860 --> 02:10:46.450
in the legislation does
not include the word net,
02:10:46.450 --> 02:10:48.120
is that correct?
Correct.
02:10:48.120 --> 02:10:51.120
And the Q&A ask you
to describe the definition
02:10:51.120 --> 02:10:53.600
and you add the word
net twice, is that correct?
02:10:53.600 --> 02:10:55.200
Objection, asked and answered.
02:10:57.600 --> 02:10:58.433
Sustained.
02:11:02.426 --> 02:11:03.973
I have no further questions.
02:11:07.730 --> 02:11:08.773
Okay, thank you.
02:11:10.130 --> 02:11:11.575
LCRA?
02:11:11.575 --> 02:11:13.020
No questions your honor.
02:11:13.020 --> 02:11:14.063
East Texas?
02:11:14.940 --> 02:11:15.903
Yes, your honor.
02:11:25.590 --> 02:11:27.170
Good morning, Ms. Bivens
02:11:27.170 --> 02:11:28.190
My name is Jacob Lawlor
02:11:28.190 --> 02:11:30.590
and I represent East
Texas Electric Cooperative.
02:11:31.440 --> 02:11:34.920
And I had a few questions
about the $2.1 billion cap
02:11:37.160 --> 02:11:39.210
in the March 11th letter.
02:11:39.210 --> 02:11:40.043
Okay.
02:11:41.520 --> 02:11:43.670
On page 18 of your testimony,
02:11:43.670 --> 02:11:46.750
you state that it is your understanding
02:11:46.750 --> 02:11:51.730
that the legislature relied
on the 1.9 billion number
02:11:51.730 --> 02:11:55.490
from your March 11th letter
in setting the $2.1 billion cap,
02:11:55.490 --> 02:11:56.323
is that correct?
02:11:56.323 --> 02:11:57.240
Yes.
02:11:57.240 --> 02:11:59.610
And that number
included the exposure
02:11:59.610 --> 02:12:02.800
of all load serving entities
in the ERCOT market,
02:12:02.800 --> 02:12:03.633
is that correct?
02:12:03.633 --> 02:12:04.466
Correct.
02:12:04.466 --> 02:12:06.860
And that would include
electric cooperatives
02:12:06.860 --> 02:12:07.730
in the ERCOT market?
02:12:07.730 --> 02:12:08.670
Yes.
02:12:08.670 --> 02:12:10.370
Thank you, no
further questions.
02:12:12.171 --> 02:12:13.683
Thank you.
02:12:16.080 --> 02:12:17.450
Golden spread?
02:12:17.450 --> 02:12:19.490
No questions, your honor.
02:12:19.490 --> 02:12:20.698
South Texas?
02:12:20.698 --> 02:12:22.150
No questions, your honor.
02:12:22.150 --> 02:12:23.101
Austin?
02:12:23.101 --> 02:12:24.452
No questions, your honor.
02:12:24.452 --> 02:12:25.285
Lubbock?
02:12:25.285 --> 02:12:27.196
No questions your honor.
02:12:27.196 --> 02:12:28.437
OPUC?
02:12:28.437 --> 02:12:29.915
No questions, your honor.
02:12:29.915 --> 02:12:30.870
ERCOT?
02:12:30.870 --> 02:12:32.220
No questions, your honor.
02:12:33.350 --> 02:12:34.950
Let's see here, Commissioners?
02:12:38.820 --> 02:12:42.640
Ms. Bivens, the
number that you alluded to
02:12:42.640 --> 02:12:43.903
questions from East Tech,
02:12:47.760 --> 02:12:51.070
that included all cooperatives
in the ERCOT market
02:12:51.070 --> 02:12:52.837
as was just asked.
02:12:52.837 --> 02:12:57.837
And that includes those also
in subject to Senate bill 1580.
02:12:58.300 --> 02:13:01.500
The purpose of the March
11th letter to the Commission
02:13:01.500 --> 02:13:05.060
was a different purpose
and it was around pricing.
02:13:05.060 --> 02:13:08.950
And so yes, we included
all entities for that purpose.
02:13:08.950 --> 02:13:11.130
Okay, so that was
baked in to your number.
02:13:11.130 --> 02:13:13.070
That was baked
into my number, yeah.
02:13:13.070 --> 02:13:16.453
That's includes all load
serving entities, yes.
02:13:20.610 --> 02:13:22.710
Ms. Bivens, I have a question
02:13:22.710 --> 02:13:27.710
about Ms. Frazier's testimony and this,
02:13:28.000 --> 02:13:31.010
I know you don't have it
in front of you or perhaps
02:13:31.010 --> 02:13:34.778
I just wanna read it to you and
get your thought on how you,
02:13:34.778 --> 02:13:38.860
if you agree with this or
disagree this and perhaps why.
02:13:38.860 --> 02:13:40.480
She writes that if netting applies
02:13:40.480 --> 02:13:43.257
to the determination of
exposure to uplift balanced cost
02:13:43.257 --> 02:13:45.860
and netting must also be
applied to the determination
02:13:45.860 --> 02:13:49.393
of liability, if any, for
payment of uplift charges,
02:13:50.890 --> 02:13:51.723
how do you feel?
02:13:51.723 --> 02:13:54.130
Do you believe that netting has to apply
02:13:54.130 --> 02:13:54.963
on both sides of that?
02:13:54.963 --> 02:13:56.170
I do not.
02:13:56.170 --> 02:13:57.337
Can you tell me why?
02:13:57.337 --> 02:13:59.520
Well one's a
practical reason is
02:13:59.520 --> 02:14:02.053
I don't know how you
do that on the other side.
02:14:02.970 --> 02:14:07.400
And I think the definition
02:14:08.630 --> 02:14:10.920
of how the uplift proceeds are collected
02:14:10.920 --> 02:14:15.640
is clear in the language and
it does not reflect exposure
02:14:15.640 --> 02:14:17.650
or any sort of net calculation
02:14:17.650 --> 02:14:19.630
the same way that,
you know, for instance,
02:14:19.630 --> 02:14:22.500
how we netted the $1.9 billion number.
02:14:22.500 --> 02:14:25.360
And there's no nothing in the,
02:14:25.360 --> 02:14:28.300
my plain language reading of that 4492
02:14:28.300 --> 02:14:31.010
would allow a different
epileptic methodology.
02:14:31.010 --> 02:14:31.910
Okay, thank you.
02:14:34.560 --> 02:14:36.880
And then just as a
clarifying question,
02:14:36.880 --> 02:14:41.880
in an exchange that you
had with Ms. Webking
02:14:43.630 --> 02:14:46.120
on the number of load serving entities
02:14:46.120 --> 02:14:47.960
in the ERCOT market,
02:14:47.960 --> 02:14:50.670
you estimated that there were a hundred
02:14:50.670 --> 02:14:52.300
load serving entities?
02:14:52.300 --> 02:14:54.560
Off the top of my
head, that's my estimate.
02:14:54.560 --> 02:14:57.930
Okay, so in terms of
the universe of entities,
02:14:57.930 --> 02:15:00.960
it's only really 100
bit that are affiliated
02:15:00.960 --> 02:15:03.300
in different forms with various QSEs
02:15:03.300 --> 02:15:05.750
and that's where it
becomes more complicated.
02:15:05.750 --> 02:15:06.583
Yes.
02:15:06.583 --> 02:15:07.416
Okay, all right.
02:15:12.106 --> 02:15:13.100
Do you have any redirect?
02:15:13.100 --> 02:15:14.000
Yes, your honor,
02:15:19.460 --> 02:15:23.110
Ms. Bivens, do you remember
the questions and answers
02:15:23.110 --> 02:15:27.960
from Ms. Griffiths regarding
the RDPA charges?
02:15:27.960 --> 02:15:28.793
Yes.
02:15:30.370 --> 02:15:32.650
At one point you
stated that you disagreed
02:15:32.650 --> 02:15:34.653
with the way the question was framed.
02:15:35.870 --> 02:15:37.033
Why did you disagree?
02:15:38.670 --> 02:15:41.020
The question was
framed in such a way
02:15:41.020 --> 02:15:45.807
as to describe these
pigments to generators
02:15:47.390 --> 02:15:50.810
in a way that is different
from how they're actually used.
02:15:50.810 --> 02:15:53.140
So this ancillary service and balance,
02:15:53.140 --> 02:15:58.060
these RDPA payments are
essentially in different payments
02:15:58.060 --> 02:16:01.480
to ensure that the entities
follow their base points,
02:16:01.480 --> 02:16:05.150
they are not intended
to recover any costs.
02:16:05.150 --> 02:16:06.560
They're not part of the, you know,
02:16:06.560 --> 02:16:09.323
this is not the energy costs,
that's a whole separate thing.
02:16:10.328 --> 02:16:12.470
These ASN balanced payments are simply
02:16:12.470 --> 02:16:14.030
an indifference payment
02:16:14.030 --> 02:16:16.610
and they do not reflect
any sort of cost recovery.
02:16:16.610 --> 02:16:19.260
And there's no basis on which to assume
02:16:19.260 --> 02:16:22.023
that they are intended
to recover any costs.
02:16:27.910 --> 02:16:30.053
Okay, and then moving on,
02:16:31.810 --> 02:16:35.723
do you recall that Ms.
Webking asked you about,
02:16:37.030 --> 02:16:40.713
was there a way to
sort of set a cap on the,
02:16:43.430 --> 02:16:45.930
she was talking about the
relationship between QSE
02:16:47.160 --> 02:16:52.160
QSEs and LSEs and she
was trying to ask whether or not
02:16:54.030 --> 02:16:55.360
there was a way to set a cap
02:16:55.360 --> 02:17:00.313
and to say that the amount
that a QSE had been invoiced
02:17:00.313 --> 02:17:04.310
should not exceed the amount of the LSEs
02:17:04.310 --> 02:17:07.840
of the combined total of
the LSEs underneath it.
02:17:07.840 --> 02:17:10.283
Can you think of any exception to that?
02:17:11.600 --> 02:17:12.760
It's difficult to say,
02:17:12.760 --> 02:17:17.760
because I cannot claim to
know every QSE relationship
02:17:19.810 --> 02:17:22.500
paradigm that might exist out there.
02:17:22.500 --> 02:17:25.530
As I was asked that question
and was thinking about,
02:17:25.530 --> 02:17:29.190
you know, if you have
two LSEs and a QSE,
02:17:29.190 --> 02:17:34.190
and it seems to me as
though the QSE costs would,
02:17:34.399 --> 02:17:38.633
could not exceed those
individual LSE costs.
02:17:41.880 --> 02:17:42.713
Okay.
02:17:42.713 --> 02:17:46.750
And then turning to the
question that counsel for Rayburn
02:17:46.750 --> 02:17:50.391
asked you about
whether or not prioritizing
02:17:50.391 --> 02:17:54.020
the remittance of the
proceeds is required
02:17:54.020 --> 02:17:55.330
under Subchapter N
02:18:00.890 --> 02:18:05.890
What about the definition
of the uplift balance
02:18:05.900 --> 02:18:08.990
makes it a reality
02:18:08.990 --> 02:18:11.483
that there's going
to be a prioritization?
02:18:12.500 --> 02:18:14.730
Yeah, I believe
it's difficult to say,
02:18:14.730 --> 02:18:15.630
as I was saying before about,
02:18:15.630 --> 02:18:18.530
cause we don't know what
the universe of the opt-outs are,
02:18:18.530 --> 02:18:24.170
but given the fact
that how this numb,
02:18:24.170 --> 02:18:27.250
my understanding of how
the 2.1 billion was arrived at
02:18:27.250 --> 02:18:30.960
only includes a subset
of the amount of time
02:18:30.960 --> 02:18:32.260
that was actually included
02:18:32.260 --> 02:18:35.130
in the definition of period
of emergency and the bill.
02:18:35.130 --> 02:18:38.700
And so the costs are
likely to exceed 2.1 billion.
02:18:38.700 --> 02:18:40.950
And so I think it is likely
that there's gonna have to be
02:18:40.950 --> 02:18:44.313
some proration or
prioritization of financing funds.
02:18:45.720 --> 02:18:47.410
Thank you, no
further questions.
02:18:47.410 --> 02:18:48.243
Thank you.
02:18:48.243 --> 02:18:51.757
In light of the scope, within
the scope of the redirect,
02:18:51.757 --> 02:18:55.493
is there any one who
wishes to do more cross?
02:18:57.050 --> 02:18:59.010
Any other questions from Commissioners?
02:18:59.010 --> 02:18:59.910
Thank you ma'am.
02:19:01.700 --> 02:19:04.446
All right, we've reached
the end of the road here.
02:19:04.446 --> 02:19:09.446
I wanna talk about briefing,
post-hearing briefing.
02:19:09.840 --> 02:19:12.597
We've discussed it
with the Commissioners
02:19:12.597 --> 02:19:16.030
and here's what we're gonna
require to post-hearing briefing
02:19:17.110 --> 02:19:21.600
initial briefs will be
due by September one,
02:19:21.600 --> 02:19:24.430
limited to 15 pages.
02:19:24.430 --> 02:19:29.430
Reply brief, limited to 10
pages due by September eight.
02:19:32.450 --> 02:19:35.710
Is there any other, before I
turn to the Commissioners,
02:19:35.710 --> 02:19:38.410
is there any other business
we need to take care of
02:19:38.410 --> 02:19:39.933
before we adjourn?
02:19:42.510 --> 02:19:43.343
All right then,
02:19:43.343 --> 02:19:46.313
any other matters that
Commissioners wanna address?
02:19:47.650 --> 02:19:50.950
So just as a matter of course,
02:19:50.950 --> 02:19:52.980
I'd love to hear other
Commissioner's views on this,
02:19:52.980 --> 02:19:57.303
but I think we might
be on the same page.
02:19:58.320 --> 02:20:02.630
We have seen a variety of
arguments presented in evidence.
02:20:02.630 --> 02:20:05.160
There is some consistency from parties
02:20:05.160 --> 02:20:07.870
in terms of your arguments
02:20:07.870 --> 02:20:12.320
for the purposes of our
ability to digest your reply briefs
02:20:12.320 --> 02:20:14.540
in a timely manner given the workload
02:20:14.540 --> 02:20:18.400
that the Commission has in
other projects and dockets,
02:20:18.400 --> 02:20:23.300
if a consistent coordination
could be had among parties
02:20:23.300 --> 02:20:27.620
to prioritize your
arguments in different ways,
02:20:27.620 --> 02:20:29.253
to where we can,
02:20:31.130 --> 02:20:34.050
to where it's not spread
over 50 different parties
02:20:34.050 --> 02:20:38.230
to where you can consolidate
in thus we see the argument,
02:20:38.230 --> 02:20:41.520
we see your counter arguments
to what was presented today
02:20:41.520 --> 02:20:44.120
and asked from us.
02:20:44.120 --> 02:20:47.930
And that way we have less to read
02:20:47.930 --> 02:20:51.791
and can form our
opinions in a timely manner.
02:20:51.791 --> 02:20:56.600
I think that would be
an ask from myself,
02:20:56.600 --> 02:20:59.203
I don't know how the other
Commissioners feel about it.
02:21:00.560 --> 02:21:02.200
I'm fine with that
Commissioner McAdams.
02:21:02.200 --> 02:21:05.280
I think we are dealing
with a very short timeline
02:21:05.280 --> 02:21:08.209
for briefing, and if we
can limit the page limits
02:21:08.209 --> 02:21:10.990
and get some coordination,
that would be great.
02:21:10.990 --> 02:21:13.880
I understand that a lot of
issues are very important
02:21:13.880 --> 02:21:16.520
to the different parties
and a lot of information
02:21:16.520 --> 02:21:20.520
was shared over the last day or so.
02:21:20.520 --> 02:21:25.070
And so really trying to
highlight any new information
02:21:25.070 --> 02:21:27.240
that you feel you need to highlight
02:21:27.240 --> 02:21:30.130
based on the hearing discussion
that you want us to consider
02:21:31.320 --> 02:21:33.460
or new information that
supports prior arguments.
02:21:33.460 --> 02:21:36.913
But I definitely agree
with your direction.
02:21:37.842 --> 02:21:39.610
Good, good.
02:21:39.610 --> 02:21:40.443
Yeah, same.
02:21:40.443 --> 02:21:44.470
I think to summarize that is
just your pages really count,
02:21:44.470 --> 02:21:47.423
so make them count
and we'd appreciate that.
02:21:49.120 --> 02:21:50.770
Okay. Well, thank
you all very much.
02:21:50.770 --> 02:21:52.230
I'll adjourn the hearing it,
02:21:52.230 --> 02:21:53.691
and then you'll adjourn the meeting,
02:21:53.691 --> 02:21:57.080
the hearing in 52322 is adjourned.
02:21:57.080 --> 02:21:58.280
Thank you all very much.
02:21:59.600 --> 02:22:01.330
This meeting of the
Public Utility Commission
02:22:01.330 --> 02:22:05.403
duly posted is hereby
adjourned at 11:42 AM.