WEBVTT
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(gavel pounding)
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This meeting of the Public Utility Commission
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of Texas will come to order to consider matters
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that have been duly posted with the secretary
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of state of Texas for September 16th, 2021.
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For the record, my name is Peter Lake
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and with me today are Will McAdams, Laurie Cobos
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and Jimmy Glotfelty.
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As y'all know, this work session is primarily devoted
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to the ERCOT market design features
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and a proposed rule addressing continuity of service.
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So unless any of my colleagues wants to discuss
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any other posted items,
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I don't think we will be taking up items one through three
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or five through 19.
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So then I know you've got a memo 21 think.
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Yes.
So, four, 20, and 21.
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If I was to make a public service announcement,
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would I do it now?
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Sure.
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So staff has nominated me, since I open the door to this,
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as the public service announcer for the PUC.
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Congratulations.
Thank you.
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And, but I would like to take a moment,
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to especially recognize Kristen Abbott of Commission staff,
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and her retirement.
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After 10 years of public service,
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she did a heck of a job for the Commission over that decade,
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and she'll be sorely missed,
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but I just wanted to tell the world
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that we're gonna miss her and we appreciate her service.
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Well done. Thank you from all of us.
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So should we just let you know
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all the announcements we need to--
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No! No.
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(everyone laughing)
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But that comes with good and bad.
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It sure does.
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I have a couple of announcements, Will.
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Like I said, congratulations.
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Thank you.
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We're gonna go out of order today on our agenda items,
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we are gonna start with item number 22,
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accommodate all stakeholders schedules
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related to critical natural gas facilities and entities.
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For this item we're joined today by Wei Wang,
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Executive Director of the Texas Railroad Commission.
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He and his staff have worked together
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with our Commission staff in repairing rules
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related to critical natural gas facilities.
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So, first of all, I wanna thank you.
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Good to see you.
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Thank you and your staff for engaging
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on such aggressively-paced rulemaking
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in such a critical topic.
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I know it's been a lot of, a lot of work very quickly.
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So I want to thank you and commend your staff
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for establishing such a good working relationship
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between our agencies.
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So with that, I'll turn it over to you.
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Thank you.
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Good morning, Chairman Lake and Commissioners.
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For the record, I'm Wei Wang,
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Executive Director of the Railroad Commission.
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Glad to be with you this morning.
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I think once SB3 was signed to law,
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the two agencies work more cleverly, closely together
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since late May, early June.
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And first of all, I'd like to thank you
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and your Executive Director Thomas and his staff
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were working closely with our agency.
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We worked very aggressively during the last few months.
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Thomas and I had a weekly meeting
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to make sure we're on the same page
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and we're moving forward.
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Our staff had to meet either weekly or twice a week
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on various issues from SB3.
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So on this particular rulemaking,
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I think the bill is clear
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that the two agency, our two agency
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should collaborate on this matter.
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And not just on the rulemaking,
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on other sections of the bill.
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I'm proud to say that we have done that
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and made a really good process.
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So, in closing again, I just want to express my gratitude
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and appreciation of your staff and your agency
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working with us on this important matter for all Texans,
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and available for questions if you have any.
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Appreciate it.
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And I know we all look forward to continued
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good working relationship
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and productive working relationship.
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Yes, sir.
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Questions?
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Thank you very much.
Thank you.
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Thanks buddy.
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I know staff has proposed or prepared a proposal
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for publication for a new rule related to said
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critical natural gas facilities and entities.
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Mr. Smelcher, Smeltzer,
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could you give us some background and get us up to speed?
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Sure. David Smeltzer, Commission staff.
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The first remark I want to make is sort of
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for people who are listening to contextualize this
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in our larger effort.
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I think this is gonna be the first of a couple of phases
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when we're dealing with critical topics.
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So according to statutory deadlines of HB 3648,
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this is our, this is our quick action.
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Let's make sure that our electric utilities
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have all the information that they need
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from the critical national gas facilities
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to appropriately prioritize them in future,
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you know, load shed events.
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But this is gonna be,
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there's gonna be future rule-makings on this topic,
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both to revisit these natural gas topics
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after we have more information
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provided by these Statewide mapping exercise
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that we're working on,
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and also we're gonna have to do, likely,
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a more comprehensive, sort of load shed
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while making the things about natural gas, water entities,
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and all the other different types of entities
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that qualify for critical status.
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So this is but the beginning.
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With regard to this rulemaking specifically,
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I think there are two statutory objectives
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that we're trying to accomplish.
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The first of which is Senate bill 1876,
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which essentially just adds
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end-stage renal disease facilities
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to the list of medical facilities
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that have to be given priority during load shed
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and power restoration events.
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That's a simple, we took the line from the statute,
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we added it to our code in the appropriate place,
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sort of implementation.
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And the second one, as we've mentioned, is HB 3648,
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section two, which is our half
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of the critical natural gas designation process
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what Wei was speaking about a few moments ago.
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Procedurally speaking, I want to clarify for parties
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because there's a lot going on at both agencies.
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The Railroad Commission adopted their proposal
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earlier this week on Tuesday,
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we're adopting ours today, hopefully,
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and then there are gonna be a number of opportunities
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for contributions in the future.
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So the Railroad Commission has their workshop
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on October 5th.
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Our comment deadline is gonna be on October 7th.
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Theirs is on November 1st.
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And then the last two open meetings
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that the two agencies have to pass this before deadline,
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their last currently-scheduled open meeting is November 10th
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and ours is November 17th.
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So I will publish, I will file something
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with all the deadlines in the docket
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so the parties know all the different ways
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they can contribute,
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but for interest to stakeholders,
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you really should be following their rule-making
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and our rule-making
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so you can see how the pieces fit together.
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With regards to the contents of this bill,
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it's, or excuse me, this rulemaking,
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the way that it divvies up right now
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is on the Railroad Commission side,
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they designate the criteria for which natural gas facilities
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are the ones that have to participate in this process.
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And there is a setup to where sort of, like,
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everybody's all in.
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If you meet these criteria,
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you're one of the critical facilities
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unless you fill out an exemption form
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to sort of take yourself off the list.
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So that is how their winnowing process works.
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And then the remaining folks that are still critical,
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then have to provide information to our utilities
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and they do so with, currently there's a table
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that the Railroad Commission has developed
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that has all the different criteria
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that our electric utilities need
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in order to make their load shed decisions.
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One area that we are still looking for feedback on
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and that we need to continue to develop
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is how we want the information to flow to our utilities.
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So for instance, our current draft has it being emailed
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to the utilities and to ERCOT separately,
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but potentially, maybe it should flow first to the utilities
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then to ERCOT or different areas like that.
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I think there are logistical ways
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as far as how the information could flow,
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that we are interested in comments on,
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and we want to keep working with stakeholders on
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to make sure that everyone's getting information
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in a usable format that they can use,
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and it has everything they need to make the right decisions.
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So I think that covers the basics
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of what we're trying to do here today.
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I'm happy to answer any questions.
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Thank you, Mr. Smeltzer.
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Any questions or comments?
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Nope, I'm fine.
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So one comment, I would like to urge or ask both agencies,
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I think time is of the essence right now,
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and we all know that and are feeling it.
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But I do think that once this moves forward,
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as Railroad has adopted their PFP and we do the same,
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that over the next few weeks a collaborative meeting,
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and I don't know if the workshop's the right term,
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but industry and staff get together,
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because these are both complex industries
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and we both recognize that,
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and we don't necessarily speak the same language.
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But those of us who have had experience
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in a bit of both industries and or policies
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around both industries
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understand that it is highly technical,
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and we need to be able to narrow this list down
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so that we meet our reliability parameters,
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meaning that we can roll outages.
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And that does not mean hardening all of West Texas
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or South Texas.
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So, I just want to put that marker down
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that we do need a practical exercise
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in terms of how to prioritize key infrastructure.
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I think that's a great idea.
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We've had a really great time working
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with Railroad Commission staff,
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and we, I think that pulling in more industry
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into that discussion can only help.
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Okay. Great.
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All right, if there are no other questions or comments,
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is there a motion to propose amendments
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to substantive rule 25.52
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relating to reliability and continuity of service
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for publication and public comment?
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So moved.
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Second.
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All in favor, say aye.
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Aye.
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Motion passes.
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Thank you, Mr. Smeltzer.
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Thank you, Mr. Wang.
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Thank you.
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(man clears throat)
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That brings us to item number four,
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related to electric reliability.
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As I hope everyone knows at this point,
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we are focused on demand response and to some extent,
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distributed generation today.
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I know Commissioner McAdams has done a deep dive
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into these topics over the last few months.
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So particularly look forward to hearing from him today.
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And we have a number of panelists
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that will be addressing the Commission.
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Before we dive into this expansive topic
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that holds lots of opportunity,
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I also want to make sure that we have
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a realistic set of expectations about this conversation.
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One part of the purpose today is to establish
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or get a sense of the existing demand response activities
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that are out there now,
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and level set on what is currently being achieved,
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especially on the residential side,
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what is already being achieved
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by price signals and market forces.
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If the market can accomplish it,
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we certainly don't need to regulate it.
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And second, as we look ahead
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to identify actionable changes
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to PUC and ERCOT policy
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that can remove barriers to leveraging technologies
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and business models for demand response,
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but the key phrase there being actionable.
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Certainly don't want to limit the scope of the discussion,
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but we also want to be realistic
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about the PUC's jurisdiction.
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We can't change building codes,
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we don't have local ordinance control.
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So we want to keep the conversation on topic.
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And I'll say it again, focus on actionable.
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Current opportunities with current technologies.
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And we want to, I think we all want to build
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or redesign the ERCOT market
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to be a well-functioning enough market,
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that new technologies and business models in the future
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can be adapted into that marketplace
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without us having to take action.
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It should be a market, but we also want to be grounded
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in reality about the actions that can be taken today
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to drive change today.
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So with that, I'll turn it over
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to our first panelist, Mr. Ogelman,
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with the introduction from ERCOT.
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Thank you.
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Good morning, chairman, Commissioners.
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For the record, Kenan Ogelman with ERCOT.
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So I'm gonna speak to you about demand response
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and a little bit about distributed energy resources as well.
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Now, just to kind of set the stage,
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there are kind of two main programs
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that are administered by ERCOT,
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and there are several programs
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that are not administered by ERCOT,
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but I'm gonna talk about all of these in my presentation.
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So the two programs that are administered by ERCOT
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are the Load Resource program
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where loads can participate in ancillary services
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and the Emergency Response Service.
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The non-ERCOT administered programs
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are the TDSP Load Management Programs,
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the Four Coincident Peak Load Reduction
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that we see load make.
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There is also a load that just reacts to price on the system
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that they face.
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And then lastly,
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we see distributed generation react to prices,
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and oftentimes that looks to us like load going away
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because it could be behind the meter or, you know,
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we only have real visibility into the transmission system.
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Next slide please.
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Okay, so on the administered by ERCOT programs,
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we have load resources
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that can bid into the day ahead market
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and clear ancillary services.
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We referenced to these as controllable load resources
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or load resources that are capable of following base points.
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So they can move from one level of consumption to another
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based on a price signal that they're sent.
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Currently, we have six CLRs,
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300 megawatts of registered capacity.
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I would expect this population to grow
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because a lot of these are data centers.
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And as you're reading in the news,
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there's lots of data centers
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moving into the ERCOT footprint,
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either from a Bitcoin perspective or, you know,
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simple need to manage data
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from all kinds of high tech usage.
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This category does not include energy storage.
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We treat them differently than we do
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controllable load resources.
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When you say controllable load
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following base points, that, to be clear, is that automated?
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And is there a time constraint on that?
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There is a time constraint. It's five minutes.
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They have to be able
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to follow instructions every five minutes,
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but they could adjust their reaction either automatically,
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systematically or manually if they chose to manage that way.
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Okay, but when, when SCAD issues a command
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to reduce load, on a C, controllable load resource,
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how quickly does the control room
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expect that to be implemented?
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So, if they're in a base point following mode,
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they have to meet the same requirements that resources do.
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However, so that's five minutes
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just to make sure I answered the question.
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However, they could also, you know,
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load doesn't have to follow base points,
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but they could still do that behind the scenes on their own.
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They have that capability as well.
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They don't necessarily have to bid into these programs.
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Got it, thank you.
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Then we have what is described as
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non-controllable load resources.
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So these are blockier loads.
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They can respond relatively quickly,
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but it's difficult for them to come back
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and, and follow another base point.
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So this would be more like a industrial process
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or something along those lines,
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where they can react to the price,
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but, you know, when the price goes back down,
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they don't necessarily bring their a load back online
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or back into consumption
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as rapidly as a controllable load resource would.
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Kenan, as you're going through this,
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can you also describe those trigger points,
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when this is employed, EEA, and so forth
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just for the public?
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Sure.
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So it depends on the service that they've bid in on,
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and currently the main area that they can participate
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is responsive reserve service.
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So controllable load resources are qualified
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to also participate in non-spin.
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Just so you know.
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So ERCOT tends to deploy non-spin early and in the process,
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oftentimes before we get into an EEA,
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there are potential price trigger points, and so forth,
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but the responsive reserve is deployed
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kind of at the very end
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of the responsive reserve deployments.
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Now later on in this presentation,
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I'm gonna reference NPR 939,
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where we're working to change that
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and deploy load that's providing responsive reserve
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in 500 megawatt blocks.
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But the current state is to deploy those
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at the very end of the responsive reserve deployments.
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I should be careful and also note
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that the load providing responsive reserve has to be
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on under frequency relays.
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If the under frequency relays trip,
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either for a local or system issue,
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they could get deployed on their own
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without any ERCOT instruction.
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So that is in response to a frequency.
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Yep. Got it.
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Did I, did I cover all of that?
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Okay.
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So in this blocky area that is on under frequency relays,
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we have over 600 load resources registered
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and that's around 7,000 megawatts of capacity.
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But what we really see is a much lower amount than that.
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And this is primarily because, I think,
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a lot of these, and I'm speculating here,
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but a lot of these entities registered
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everything that they had,
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but because you're cutting processes,
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a lot of that is very unattractive at any given time.
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And what they do is they register everything
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behind their point of interconnect.
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But really there might be only a couple of processes
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that they can safely interrupt at a time,
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but those might revolve around or change over time.
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So we see a very large amount registered,
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but what we see offered in is a smaller amount.
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So the willing participation,
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which we deem as folks that have offers or self arranged
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ancillary services is around 3,100 megawatts.
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The actual participation number is the amount that we award
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plus self arrangement.
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And this drops because we actually prorate,
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there's a limit to how much we can allocate to load.
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And so we prorate that allocation
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amongst a multitude of resources.
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What we've seen over time is that more and more
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of these resources are going down the self-arranged path
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than just openly clearing in the day ahead market.
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And then the last thing was the available quantity
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from willing participation is this very last number.
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Next slide, please.
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So a real quick question on the previous slide,
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in the total 7,000 megawatts of registered.
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So when you say there's an industrial constraint on that,
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it's I guess the heavy machinery version
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of dimming the lights 20%.
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You can still conduct business,
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the machinery can still run,
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even though you registered 100%.
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But if you turn the machinery completely off,
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then that's a fundamental change to your business.
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So while there may be 7,000 megawatts,
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an industrial consumer may not want to shut down
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all of that, they may want to do
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the industrial equivalent of dimming the lights.
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I think that's a very good analogy.
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I would definitely encourage you to speak with the owners
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of the plants, as that is not my expertise,
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but the other thing is I might have six processes running
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behind the meter and I can safely, like you say, dim one,
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but other things I might not be able to.
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So while they registered more than one,
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they at any one time could only dim the one.
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Sure, so there's, of the 7,000 registered,
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there's a self-imposed constraint
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on the industrial consumers, right?
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Is there--
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That's my understanding, correct.
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Is there also a constraint on the ERCOT side,
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in terms of how much is accepted into different types
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of ancillary services?
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So, the answer to that is yes,
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there's a minimum that we always want to procure
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from dispatchable resources on responsive reserve service.
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And then on top of that,
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there is a no more than 60% limit
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coming from load resources.
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So there's, there's kind of two limits.
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One is we want to make sure, at least set them out,
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comes from resources that we can deploy
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and then no more--
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That you can control?
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Rotating them out so you can control.
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Exactly, and then also we don't want,
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currently in the rules that says no more than 60%
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can participate from the total, from load resources.
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We're looking at potentially changing that,
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but there's a lot of things that we need to work through
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with our stakeholder partners,
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as they try and manage these resources on the grid as well.
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So there can be, for example,
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on the transmission distribution side,
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you might be worried if a bunch of these resources
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are concentrated in one area,
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that there could be frequency overshoot or undershoot
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as they're deployed.
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I'm sure some of the other panelists can speak more
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about that, but that's,
00:24:51.990 --> 00:24:56.860
we are looking to lower that limit on the percentage,
00:24:56.860 --> 00:25:00.010
but we will keep the limit on what we need
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from dispatchable resources.
00:25:02.260 --> 00:25:04.603
Okay. Thank you for clarifying that.
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Okay, so Emergency Response Service is a service
00:25:13.770 --> 00:25:18.060
where we would
00:25:20.210 --> 00:25:23.160
auction dollars off for load
00:25:23.160 --> 00:25:27.840
to voluntarily go away before we were gonna shed firm load.
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And there are several categories.
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Those are non-weather sensitive 10 minute,
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non-weather sensitive 30,
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weather sensitive 10 and weather sensitive 30.
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So the 10 and 30 references how quickly they have
00:25:47.340 --> 00:25:50.453
to respond to an instruction to deploy.
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We deploy these folks in and around EEA two,
00:25:58.220 --> 00:26:01.330
but they have the right to go away
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before we call on their deployment.
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The logic for that was we don't necessarily mind
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if they go away earlier
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because they are in the end, allowing us
00:26:16.240 --> 00:26:21.240
to curtail less firm load than we would otherwise.
00:26:22.490 --> 00:26:25.450
So back in the day when this program was designed,
00:26:25.450 --> 00:26:29.060
that was the thinking behind that optionality for them to--
00:26:29.060 --> 00:26:30.650
Could you clarify what you mean
00:26:30.650 --> 00:26:33.360
when you say that resource goes away?
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So, they curtail or stop consuming electricity,
00:26:38.860 --> 00:26:43.860
or because there are some behind the meter generators,
00:26:44.250 --> 00:26:46.760
small scale generators that can participate.
00:26:46.760 --> 00:26:50.040
So either the load curtails
00:26:50.040 --> 00:26:53.790
or they turn on their backup generation
00:26:53.790 --> 00:26:58.400
and for us, that looks like that load is consuming less.
00:26:58.400 --> 00:27:00.775
So, according to these contracts,
00:27:00.775 --> 00:27:02.410
I just wanna make sure I'm clear on this
00:27:02.410 --> 00:27:03.960
and the public is clear.
00:27:03.960 --> 00:27:08.960
The ERS participants are required to reduce consumption
00:27:11.630 --> 00:27:16.580
of power at EEA two, the second emergency level.
00:27:16.580 --> 00:27:17.413
Correct.
00:27:17.413 --> 00:27:19.450
But they can, like at that point,
00:27:19.450 --> 00:27:20.470
according to that contract,
00:27:20.470 --> 00:27:21.950
they can be required by ERCOT
00:27:21.950 --> 00:27:24.440
to reduce their power consumption.
00:27:24.440 --> 00:27:25.273
Correct.
00:27:25.273 --> 00:27:28.095
Okay. But they can volunteer to do that beforehand.
00:27:28.095 --> 00:27:29.280
That is also correct.
00:27:29.280 --> 00:27:34.280
Okay, but before the second emergency level, EEA two,
00:27:34.900 --> 00:27:39.080
ERCOT cannot force them to reduce that consumption.
00:27:39.080 --> 00:27:40.388
That is the way
00:27:40.388 --> 00:27:42.538
it is set up.
It is currently set. Okay.
00:27:45.351 --> 00:27:46.873
Kenan, one question.
00:27:46.873 --> 00:27:49.926
So based on the PUC's rule,
00:27:49.926 --> 00:27:52.625
it says that ERCOT shall procure ERS,
00:27:52.625 --> 00:27:53.600
a special Emergency Response Service
00:27:53.600 --> 00:27:55.250
that's intended to be deployed by ERCOT
00:27:55.250 --> 00:27:57.370
in an energy emergency alert event.
00:27:57.370 --> 00:28:02.022
Currently, as you stated, ERCOT deploys it in EEA two?
00:28:02.022 --> 00:28:06.100
Can you please explain how the decision was made
00:28:06.100 --> 00:28:07.540
to deploy it EEA two,
00:28:07.540 --> 00:28:09.030
because it sounds like there's flexibility
00:28:09.030 --> 00:28:10.640
to deploy it earlier in EEA one,
00:28:10.640 --> 00:28:14.263
if the Commission decided that was a good idea.
00:28:15.190 --> 00:28:18.510
And, I should be, I mean, if ERCOT,
00:28:18.510 --> 00:28:21.850
ERCOT has a flexibility to deploy these earlier,
00:28:21.850 --> 00:28:24.180
they could deploy them in EEA one.
00:28:24.180 --> 00:28:27.390
More often than not, it is EEA two
00:28:27.390 --> 00:28:31.760
when we actually order them to curtail.
00:28:31.760 --> 00:28:34.610
But if frequency, the current NERC standard
00:28:34.610 --> 00:28:37.990
is that if frequency was decaying fast enough
00:28:37.990 --> 00:28:42.630
and we were in EEA one, we could still deploy them earlier.
00:28:42.630 --> 00:28:43.900
But we tend to--
Could you deploy them
00:28:43.900 --> 00:28:45.540
in a watch or an advisory
00:28:45.540 --> 00:28:47.410
before we get to an emergency level?
00:28:47.410 --> 00:28:52.410
That, we, my understanding is, I mean,
00:28:52.760 --> 00:28:55.530
I think ERCOT always has that last line of,
00:28:55.530 --> 00:28:59.006
for reliability being able to take action,
00:28:59.006 --> 00:29:03.380
but that would, we would need to see a really rapid decay
00:29:03.380 --> 00:29:06.930
in frequency or something to do that.
00:29:06.930 --> 00:29:09.859
So I don't believe we've ever done that.
00:29:09.859 --> 00:29:13.330
And the rule doesn't say that.
00:29:13.330 --> 00:29:16.780
We would have to point to a different part of the protocols
00:29:16.780 --> 00:29:19.200
to have taken that action.
00:29:19.200 --> 00:29:21.920
So let's just say that ERCOT decides to deploy ERS
00:29:21.920 --> 00:29:25.120
at EEA one, and as you described earlier,
00:29:25.120 --> 00:29:27.830
some loads decide to pre deploy.
00:29:27.830 --> 00:29:30.750
I mean, would that occur maybe, you know,
00:29:30.750 --> 00:29:34.140
would that pre-deployment would occur before EEA one,
00:29:34.140 --> 00:29:37.180
and so that would fall within that period
00:29:37.180 --> 00:29:39.688
you're maybe discussing or noting.
00:29:39.688 --> 00:29:41.670
I just wanna get a sense
00:29:41.670 --> 00:29:43.220
of when these resources are available.
00:29:43.220 --> 00:29:46.580
And it sounds like we have to get to an emergency
00:29:46.580 --> 00:29:50.232
before these contracts allow us to deploy.
00:29:50.232 --> 00:29:52.390
Yeah, I mean, we would be needing to point
00:29:52.390 --> 00:29:55.140
to an emergency need to deploy them,
00:29:55.140 --> 00:30:00.140
as it's currently contracted, any earlier than EEA two.
00:30:02.320 --> 00:30:05.320
But there are some circumstances where we could.
00:30:05.320 --> 00:30:08.610
The contracts can be changed to,
00:30:08.610 --> 00:30:10.200
I think, answer your question.
00:30:10.200 --> 00:30:12.410
Well, and I'm not saying they should be,
00:30:12.410 --> 00:30:14.380
that ERS should be deployed before an emergency,
00:30:14.380 --> 00:30:16.970
the rule clearly says that it's intended to be deployed
00:30:16.970 --> 00:30:18.200
during an EEA event.
00:30:18.200 --> 00:30:20.503
What I'm saying is that if you decide to deploy
00:30:20.503 --> 00:30:22.758
during EEA one and you continue to see pre-deployments,
00:30:22.758 --> 00:30:25.560
then those pre-deployments would come in
00:30:25.560 --> 00:30:26.770
to assist with reliability
00:30:26.770 --> 00:30:29.618
before we even get into an emergency in EEA one.
00:30:29.618 --> 00:30:31.250
That, that is true.
00:30:31.250 --> 00:30:35.130
That load has reduced its consumption.
00:30:35.130 --> 00:30:40.070
So that means there would be less load, that firm load,
00:30:40.070 --> 00:30:43.073
that you would have to shed in an emergency.
00:30:45.148 --> 00:30:46.437
Thank you.
00:30:49.367 --> 00:30:51.460
So we currently--
00:30:51.460 --> 00:30:53.350
Can I ask one question on your slide,
00:30:53.350 --> 00:30:55.760
just the $50 million a year spending limit,
00:30:55.760 --> 00:30:58.210
is that imposed by us or is that imposed by you
00:30:58.210 --> 00:30:59.240
or is that the market?
00:30:59.240 --> 00:31:01.010
That is in the substantive rule.
00:31:01.010 --> 00:31:02.894
Okay, thanks.
00:31:02.894 --> 00:31:07.810
And we do look at, as we contract,
00:31:07.810 --> 00:31:11.600
there are factors we give to different time periods,
00:31:11.600 --> 00:31:14.670
so that for time periods that are more valuable,
00:31:14.670 --> 00:31:19.300
we spend more of those that 50 million in those time periods
00:31:19.300 --> 00:31:22.990
than in time periods where it might not be as valuable,
00:31:22.990 --> 00:31:27.990
but we do procure across the full day.
00:31:28.840 --> 00:31:31.720
And can I, you probably know a little more
00:31:31.720 --> 00:31:35.160
of the history than we do, but 50 million,
00:31:35.160 --> 00:31:36.960
how did we come up with that number?
00:31:37.918 --> 00:31:42.918
So at the time that was deemed a good amount
00:31:43.910 --> 00:31:45.110
for two reasons.
00:31:45.110 --> 00:31:49.133
One, there was a little bit of worry
00:31:49.133 --> 00:31:51.680
that the market might not be liquid enough
00:31:51.680 --> 00:31:56.680
and you would be, you know, just if you increased it,
00:31:56.890 --> 00:31:58.200
you would just be spending that money
00:31:58.200 --> 00:32:01.550
for the same amount of dollars.
00:32:01.550 --> 00:32:06.020
The other rationale, I think, that the Commission gave
00:32:06.020 --> 00:32:11.020
was that seemed like a good amount of kind of
00:32:11.139 --> 00:32:13.050
what I would describe as seed money
00:32:13.050 --> 00:32:17.376
to help develop demand response in the ERCOT market,
00:32:17.376 --> 00:32:20.080
because we were an energy only market
00:32:20.080 --> 00:32:22.301
and on a lot of the other jurisdictions
00:32:22.301 --> 00:32:26.300
demand response is paid on a capacity basis.
00:32:26.300 --> 00:32:29.481
So this looks a little bit more like a capacity market
00:32:29.481 --> 00:32:32.603
for a demand response.
00:32:33.530 --> 00:32:38.530
When, so for example, in other jurisdictions like PJM,
00:32:38.658 --> 00:32:41.320
they pay a capacity value.
00:32:41.320 --> 00:32:44.400
So this, there was a thought
00:32:44.400 --> 00:32:47.940
that if we put some dollars out there
00:32:47.940 --> 00:32:51.380
that would bring development and folks thinking about this,
00:32:51.380 --> 00:32:55.050
and then it would expand beyond just this program
00:32:55.050 --> 00:33:00.050
and into programs that could be just slot in
00:33:00.150 --> 00:33:02.200
to an energy only market.
00:33:02.200 --> 00:33:05.040
That that was, I think, in the preamble to the rule,
00:33:05.040 --> 00:33:07.370
those things were highlighted, as I recall.
00:33:07.370 --> 00:33:10.320
So as per comments, I just want to hear your view.
00:33:10.320 --> 00:33:13.520
A lot of stakeholders had pointed out
00:33:13.520 --> 00:33:15.210
50 million isn't enough.
00:33:15.210 --> 00:33:16.993
It's just, it doesn't make it worthwhile
00:33:16.993 --> 00:33:21.993
to get a lot of those resources out there
00:33:22.080 --> 00:33:24.533
and to enhance deployment of them.
00:33:26.360 --> 00:33:30.220
So, how's the 50 million work
00:33:30.220 --> 00:33:32.986
in terms of spreading it over the market.
00:33:32.986 --> 00:33:35.960
So, I mean, if you looked at the clearing price
00:33:35.960 --> 00:33:39.824
that they received on a capacity basis,
00:33:39.824 --> 00:33:44.824
ERS looks like a responsive reserve kind of payment,
00:33:45.430 --> 00:33:48.050
or, I mean, depending on the time period.
00:33:48.050 --> 00:33:52.180
So in the more valuable time periods, or, you know,
00:33:52.180 --> 00:33:56.170
even a reg up, reg down kind of payment.
00:33:56.170 --> 00:34:00.307
And I mean, I think there's value
00:34:01.800 --> 00:34:04.190
to increasing the 50 million,
00:34:04.190 --> 00:34:05.755
if you can get more megawatts,
00:34:05.755 --> 00:34:10.089
but what they are getting paid currently is,
00:34:10.089 --> 00:34:14.830
has some symmetry to the ancillary service payments
00:34:14.830 --> 00:34:16.428
that load gets.
00:34:16.428 --> 00:34:21.428
So I mean, I think the better argument on the 50 million
00:34:23.180 --> 00:34:25.840
is that there's more out there that we're not procuring,
00:34:25.840 --> 00:34:30.250
than the payments being received are insufficient
00:34:30.250 --> 00:34:31.290
in some way.
00:34:31.290 --> 00:34:35.257
Okay, is it fair to say that you've got a pie
00:34:35.257 --> 00:34:37.510
and you're having to divide up your pie
00:34:37.510 --> 00:34:40.280
and you want to equitably divide up your pie
00:34:40.280 --> 00:34:42.880
so that all your eggs aren't in one basket,
00:34:42.880 --> 00:34:46.290
and is it fair to say that this was a seed money approach,
00:34:46.290 --> 00:34:47.950
and this is just sort of how it settled out
00:34:47.950 --> 00:34:50.207
in the division of the pie so that it just didn't get
00:34:50.207 --> 00:34:52.890
loaded up in one particular slice?
00:34:52.890 --> 00:34:55.890
Yeah, I mean, the, the pie is 50 million.
00:34:55.890 --> 00:34:58.990
I have that to spend over a year, so it's,
00:34:58.990 --> 00:35:03.874
and in some instances I exhaust all the bids
00:35:03.874 --> 00:35:05.909
in certain time periods,
00:35:05.909 --> 00:35:10.730
but I cannot make that pie any bigger.
00:35:10.730 --> 00:35:13.890
It's just, I can slice it up differently, to your point,
00:35:13.890 --> 00:35:15.773
but I can't make the pie any bigger.
00:35:16.796 --> 00:35:19.660
Question on this because it may be,
00:35:19.660 --> 00:35:21.301
but you may speak to it elsewhere,
00:35:21.301 --> 00:35:25.324
of the thousand megawatts that you,
00:35:25.324 --> 00:35:28.020
of qualified loads and generators
00:35:28.020 --> 00:35:29.683
that make themselves available,
00:35:30.640 --> 00:35:35.640
300 of that is provided by DG, is that accurate?
00:35:35.810 --> 00:35:36.880
That's my recollection, yes.
00:35:36.880 --> 00:35:39.710
How do we settle on that? How does ERCOT settle on that?
00:35:39.710 --> 00:35:40.843
The portion money?
00:35:42.180 --> 00:35:44.722
It's, we don't really,
00:35:44.722 --> 00:35:47.890
as long as they qualify and perform,
00:35:47.890 --> 00:35:49.660
we don't necessarily distinguish
00:35:49.660 --> 00:35:52.900
between an award to DG or load.
00:35:52.900 --> 00:35:55.690
It's just how the bids should have shaken out.
00:35:55.690 --> 00:35:57.417
That's correct, and the timing of,
00:35:57.417 --> 00:36:02.038
or the qualifying time period of the bid.
00:36:02.038 --> 00:36:06.260
Okay.
00:36:06.260 --> 00:36:07.260
All right.
00:36:08.980 --> 00:36:11.920
This last bullet I think is important.
00:36:11.920 --> 00:36:14.413
So on the weather sensitive ones,
00:36:16.070 --> 00:36:21.070
we only procure those during peak time periods
00:36:22.640 --> 00:36:25.820
because the volume is very different.
00:36:25.820 --> 00:36:29.462
So some of the weather sensitive are air conditioning load,
00:36:29.462 --> 00:36:33.910
it doesn't make a lot of sense to spend money on those
00:36:33.910 --> 00:36:37.610
in the winter or off-peak.
00:36:37.610 --> 00:36:42.610
So we do focus and discriminate a little on those
00:36:43.860 --> 00:36:46.920
because of the types of resources that are there.
00:36:46.920 --> 00:36:51.920
And those tend to be aggregated thermostat response,
00:36:52.390 --> 00:36:54.880
and those types of products.
00:36:54.880 --> 00:36:59.880
So we do look at what constitutes the bidding block.
00:37:00.000 --> 00:37:01.607
And so you look at the technical aspects
00:37:01.607 --> 00:37:04.576
of the DG bidding into the block?
00:37:04.576 --> 00:37:07.740
Yes. Especially for the, this weather sensitive.
00:37:07.740 --> 00:37:10.860
If it's, like I said, if it's air conditioner,
00:37:10.860 --> 00:37:14.590
then the time period that we're procuring that matters
00:37:14.590 --> 00:37:16.230
in terms of how much is really available.
00:37:16.230 --> 00:37:17.540
So I thought one of the interesting comments
00:37:17.540 --> 00:37:20.480
that we saw was from the HVAC guys.
00:37:20.480 --> 00:37:22.210
And they said that, look,
00:37:22.210 --> 00:37:25.802
you really get more juice for the squeeze, paraphrasing,
00:37:25.802 --> 00:37:30.802
when you qualify the latest inverter technology
00:37:32.008 --> 00:37:34.190
on those AC systems.
00:37:34.190 --> 00:37:38.155
Again the EEA, it's a long number,
00:37:38.155 --> 00:37:43.155
but it's the latest electric model inverter for that.
00:37:44.620 --> 00:37:47.770
So is that baked into your equation
00:37:47.770 --> 00:37:49.780
when you qualify those systems?
00:37:49.780 --> 00:37:52.360
No, it's not.
00:37:52.360 --> 00:37:55.280
So what happens is somebody aggregates those
00:37:55.280 --> 00:37:59.220
and they perform based on the characteristics
00:37:59.220 --> 00:38:02.930
of the aggregation and they offer that in
00:38:02.930 --> 00:38:06.550
and we test them to see if they can perform.
00:38:06.550 --> 00:38:09.975
And if they do they're in the program,
00:38:09.975 --> 00:38:13.330
but that we do test the response
00:38:13.330 --> 00:38:15.193
and pay them for the response.
00:38:16.100 --> 00:38:20.540
But it's up to whoever brings all of those loads together
00:38:20.540 --> 00:38:23.740
to quantify their response accurately.
00:38:23.740 --> 00:38:24.573
Okay.
00:38:24.573 --> 00:38:26.320
So that with the more juice for the squeeze,
00:38:26.320 --> 00:38:27.760
we go to the aggregator?
00:38:27.760 --> 00:38:28.850
Yeah.
00:38:28.850 --> 00:38:31.630
So that would be their opportunity, I guess.
00:38:31.630 --> 00:38:34.790
To get the most efficient devices as they can
00:38:34.790 --> 00:38:36.366
on their system,
00:38:36.366 --> 00:38:37.489
And ERCOT--
'Cause it gets them
00:38:37.489 --> 00:38:38.322
more of that pie.
Yeah.
00:38:38.322 --> 00:38:39.420
ERCOT's hanging out the money,
00:38:39.420 --> 00:38:41.059
whoever can get there at the lowest cost falls
00:38:41.059 --> 00:38:42.884
on the aggregator.
00:38:42.884 --> 00:38:45.030
But I think that's also, I'm glad, very glad
00:38:45.030 --> 00:38:47.180
you asked that question because it's important to highlight
00:38:47.180 --> 00:38:51.680
that today, ERCOT is spending millions of dollars
00:38:51.680 --> 00:38:55.590
on smart thermostat responsive air conditioning units
00:38:55.590 --> 00:38:57.500
in summer season.
00:38:57.500 --> 00:38:59.120
Is that accurate?
00:38:59.120 --> 00:39:00.820
That is accurate.
00:39:00.820 --> 00:39:03.730
Okay. So that's happening today?
00:39:03.730 --> 00:39:05.840
Yes, if somebody can come and aggregate
00:39:05.840 --> 00:39:07.364
and bid in--
00:39:07.364 --> 00:39:08.320
There is money at ERCOT
00:39:08.320 --> 00:39:11.910
for those aggregated smart thermostat, responsive AC units.
00:39:11.910 --> 00:39:13.300
Okay.
00:39:13.300 --> 00:39:15.690
Thank you, sir.
And are they consistent
00:39:15.690 --> 00:39:16.944
when needed?
00:39:16.944 --> 00:39:18.400
I mean, I have--
00:39:18.400 --> 00:39:23.133
They have a band in which they are allowed to perform.
00:39:24.060 --> 00:39:27.730
So what is available is dependent on the weather conditions
00:39:27.730 --> 00:39:28.563
on that day.
00:39:28.563 --> 00:39:32.297
So if I had aggregated a large number, say,
00:39:32.297 --> 00:39:37.297
in any city in Texas, and it was very cloudy and cool there,
00:39:38.760 --> 00:39:40.410
I might get less response.
00:39:40.410 --> 00:39:43.060
If they go below the acceptable bandwidth,
00:39:43.060 --> 00:39:44.573
we would pay them less.
00:39:45.670 --> 00:39:48.290
We would look at their performance and pay them less.
00:39:48.290 --> 00:39:52.439
If it's really hot, they might have more capability
00:39:52.439 --> 00:39:54.680
than on another day.
00:39:54.680 --> 00:39:59.140
So that tends to drive the variance.
00:39:59.140 --> 00:40:01.710
So they are pretty variable
00:40:01.710 --> 00:40:03.780
because they're so weather sensitive.
00:40:03.780 --> 00:40:05.160
Yes.
Okay.
00:40:05.160 --> 00:40:06.383
And that's tremendously important
00:40:06.383 --> 00:40:09.370
because the top three consumers of power in Texas,
00:40:09.370 --> 00:40:12.600
residential power in Texas, are AC, AC and AC, I think.
00:40:12.600 --> 00:40:16.080
So anything you can get out of that counts for a lot.
00:40:16.080 --> 00:40:17.420
And the likelihood that you're gonna get that
00:40:17.420 --> 00:40:19.410
on a hundred plus degree day in the summertime
00:40:19.410 --> 00:40:21.693
is, my guess, is fairly slim.
00:40:22.650 --> 00:40:23.820
Well if--
Residential.
00:40:23.820 --> 00:40:26.040
You've entered, the aggregators entered into a contract.
00:40:26.040 --> 00:40:28.090
They owed it. They told they already took the money for it.
00:40:28.090 --> 00:40:28.940
True, true.
00:40:28.940 --> 00:40:31.530
Like whether you get that, whether you have customers
00:40:31.530 --> 00:40:34.840
willing to give over control is a question I'm sure
00:40:34.840 --> 00:40:36.380
will come up for some of our later panelists.
00:40:36.380 --> 00:40:39.059
That's a question for that.
00:40:39.059 --> 00:40:41.381
So I'll share, all of you know,
00:40:41.381 --> 00:40:46.381
this is a coworker at ERCOT, and he is very conscious.
00:40:46.760 --> 00:40:51.260
So he's on a thermostat program
00:40:51.260 --> 00:40:53.340
where they can move up his thermostat.
00:40:53.340 --> 00:40:58.340
You could bid that program in TRS if you so chose.
00:40:58.470 --> 00:41:00.985
He had turned his thermostat up already,
00:41:00.985 --> 00:41:03.390
and then they came in and still turned it up
00:41:03.390 --> 00:41:06.140
another four degrees and next thing he knew
00:41:06.140 --> 00:41:10.708
he was working in 88 degree temperature at home.
00:41:10.708 --> 00:41:15.708
So, you can still get the response from this.
00:41:15.732 --> 00:41:19.680
And, and there are override ability as well
00:41:19.680 --> 00:41:23.540
for these programs, but just saying, you know,
00:41:23.540 --> 00:41:25.010
unless somebody overrides it,
00:41:25.010 --> 00:41:28.440
you would still get the response if it's really hot, or,
00:41:28.440 --> 00:41:30.680
the only thing I would kind of caution you
00:41:30.680 --> 00:41:33.410
on the air conditioning is on a winter event,
00:41:33.410 --> 00:41:35.560
there's not that much there.
00:41:35.560 --> 00:41:36.560
That was gonna be my question.
00:41:36.560 --> 00:41:38.320
How do you compare summer versus winter?
00:41:38.320 --> 00:41:40.490
It is different.
00:41:40.490 --> 00:41:43.023
And I think that's just important to note.
00:41:44.114 --> 00:41:47.830
But we do get significant offers in the winter,
00:41:47.830 --> 00:41:52.490
and we did and have in the past
00:41:52.490 --> 00:41:56.130
employed the program in the winter.
00:41:56.130 --> 00:41:58.177
Kenan, speaking of the winter,
00:41:58.177 --> 00:42:00.080
and I don't want you to give
00:42:00.080 --> 00:42:02.130
like a sub presentation on this,
00:42:02.130 --> 00:42:03.920
but I know that after the winter storm
00:42:03.920 --> 00:42:07.470
ERCOT filed and ERS report as to how ERS performed
00:42:07.470 --> 00:42:08.966
during winter storm Uri,
00:42:08.966 --> 00:42:12.864
are there some broad highlights that we, you know,
00:42:12.864 --> 00:42:15.164
lessons learned that we should be taking away
00:42:15.164 --> 00:42:18.380
from winter storm Uri based on that report that ERCOT filed?
00:42:18.380 --> 00:42:23.380
Yes, I would most definitely look at, you know,
00:42:24.140 --> 00:42:28.020
there are both generators and load that participates.
00:42:28.020 --> 00:42:30.439
To me, the generation performance
00:42:30.439 --> 00:42:34.640
kind of jumped out at me when I looked at that.
00:42:34.640 --> 00:42:38.783
So that would be something I would advise
00:42:40.350 --> 00:42:41.790
that you take a look at.
00:42:41.790 --> 00:42:43.590
Okay, so when you say that, do you mean,
00:42:43.590 --> 00:42:45.880
because currently there is some generation participates
00:42:45.880 --> 00:42:48.020
in ERS when you say, look at it,
00:42:48.020 --> 00:42:50.045
does that mean look at to take it out?
00:42:50.045 --> 00:42:50.940
Or look to--
No, no.
00:42:50.940 --> 00:42:55.940
I just, I would just say that that side
00:42:56.240 --> 00:42:59.867
did not perform as well as we expected.
00:42:59.867 --> 00:43:04.867
And we may want to, you know, spend more time
00:43:05.990 --> 00:43:07.630
on performance requirements
00:43:07.630 --> 00:43:10.520
or how we want to deal with that.
00:43:10.520 --> 00:43:15.320
Now during the event, fuel was an issue.
00:43:15.320 --> 00:43:18.238
So that I think also needs to be thought through
00:43:18.238 --> 00:43:23.238
and not just, you know,
00:43:23.293 --> 00:43:26.940
there's two sides to that story and I would emphasize that.
00:43:26.940 --> 00:43:29.650
And I would also emphasize that that might play out
00:43:29.650 --> 00:43:32.031
differently in the winter than in the summer.
00:43:32.031 --> 00:43:32.864
So--
00:43:32.864 --> 00:43:33.770
Oh, sorry.
00:43:33.770 --> 00:43:34.603
Go ahead, Will.
00:43:34.603 --> 00:43:36.420
Well, just to dovetail on your point.
00:43:36.420 --> 00:43:40.582
So if we were to consider backup storage,
00:43:40.582 --> 00:43:43.630
ancillary service as has been contemplated in
00:43:43.630 --> 00:43:47.260
and suggested in other workshops, that would change,
00:43:47.260 --> 00:43:48.340
that possibly could change
00:43:48.340 --> 00:43:51.293
some of the ERS participation, possibly?
00:43:53.920 --> 00:43:56.587
So ERS is not an ancillary service.
00:43:56.587 --> 00:43:57.720
You're right, you're right.
I need to make sure
00:43:57.720 --> 00:43:59.597
that's clear.
I'm sorry.
00:43:59.597 --> 00:44:04.597
So if they qualified for the backup fuel, you know,
00:44:06.190 --> 00:44:10.577
however it is structured, then it would apply.
00:44:10.577 --> 00:44:15.038
It just depends on how you would like to move that forward
00:44:15.038 --> 00:44:17.580
from a policy standpoint.
00:44:17.580 --> 00:44:22.580
And I am not qualified to tell you
00:44:22.610 --> 00:44:25.610
that there is more value to back up fuel there
00:44:25.610 --> 00:44:28.670
than a 500 megawatt plant.
00:44:28.670 --> 00:44:33.040
There might be more bang for the buck on one end of that.
00:44:33.040 --> 00:44:35.140
But that would be of interest to me
00:44:35.140 --> 00:44:37.158
as I was thinking through those.
00:44:37.158 --> 00:44:40.000
I want to return back to the topic
00:44:40.000 --> 00:44:43.230
on generation resource participation in ERS.
00:44:43.230 --> 00:44:45.970
So currently a generation resource that participates
00:44:45.970 --> 00:44:49.320
in ERS, per our rules, a dispatchable generator
00:44:49.320 --> 00:44:51.850
that is not registered as ERCOT, as a generation resource
00:44:51.850 --> 00:44:53.410
or an aggregation of such generators.
00:44:53.410 --> 00:44:56.477
So, you're saying that these generation resources
00:44:56.477 --> 00:44:59.768
during the storm did not perform well.
00:44:59.768 --> 00:45:04.500
Yes, our analysis shows that their performance
00:45:04.500 --> 00:45:08.020
was not at the level we expected.
00:45:08.020 --> 00:45:10.560
Mark, did you have something you wanted to add?
00:45:10.560 --> 00:45:12.960
Well, but you also realize we have a lot
00:45:12.960 --> 00:45:14.130
of rotating--
Mark,
00:45:14.130 --> 00:45:16.380
why don't you come up here?
00:45:17.742 --> 00:45:20.909
(Mark speaks faintly)
00:45:22.435 --> 00:45:24.650
And for the court reporter, tell her your name.
00:45:26.700 --> 00:45:30.133
Mark Patterson, manager of demand integration at ERCOT.
00:45:32.170 --> 00:45:35.120
So you realize during the winter storm,
00:45:35.120 --> 00:45:37.630
there were quite a few rotating outages
00:45:37.630 --> 00:45:39.070
on the distribution system
00:45:39.070 --> 00:45:41.420
where these resources are located.
00:45:41.420 --> 00:45:43.900
So anytime you're gonna have outages
00:45:43.900 --> 00:45:45.410
on the distribution system,
00:45:45.410 --> 00:45:47.288
that energy's not gonna be able to flow.
00:45:47.288 --> 00:45:49.710
So that contributed to a lot of the failures
00:45:49.710 --> 00:45:51.697
of the generation providing ERS.
00:45:51.697 --> 00:45:54.741
Once you get to load shed ERS,
00:45:54.741 --> 00:45:57.040
you better have already shot your ERS bullet
00:45:57.040 --> 00:45:58.560
because it won't matter at that point.
00:45:58.560 --> 00:46:02.210
Well, so that's why the loads seem like they over-perform,
00:46:02.210 --> 00:46:04.121
because again, you're adding rotating outages.
00:46:04.121 --> 00:46:06.162
they can't consume.
They really were going.
00:46:06.162 --> 00:46:08.380
And then on the generation side,
00:46:08.380 --> 00:46:09.750
they can't get their energy out.
00:46:09.750 --> 00:46:12.970
So they're gonna look like they over, I mean underperformed.
00:46:12.970 --> 00:46:15.450
So, these generation resources
00:46:15.450 --> 00:46:17.470
are connected to the distribution system?
00:46:17.470 --> 00:46:20.530
Yeah, and I, there's one thing I want to make very clear
00:46:20.530 --> 00:46:24.096
is that these, to be qualified for ERS,
00:46:24.096 --> 00:46:26.900
you do not have to be a,
00:46:26.900 --> 00:46:30.190
what we define as a generation resource.
00:46:30.190 --> 00:46:34.110
You just have to have either load that can curtail
00:46:34.110 --> 00:46:37.230
or some kind of backup generation
00:46:37.230 --> 00:46:41.380
that can make it look like you're consuming less.
00:46:41.380 --> 00:46:43.397
You stopped consuming from ERCOT
00:46:43.397 --> 00:46:44.230
and start consuming
00:46:44.230 --> 00:46:45.470
from your behind the meter generating asset.
00:46:45.470 --> 00:46:47.706
Exactly, but I think it's really important to note
00:46:47.706 --> 00:46:52.706
that those are not necessarily, and I think rarely
00:46:53.680 --> 00:46:56.360
what we would describe as a generation resource
00:46:56.360 --> 00:46:58.930
that's qualified for ancillary services.
00:46:58.930 --> 00:47:00.580
Right, so I guess my whole point here
00:47:00.580 --> 00:47:03.660
is that it sounds like, you know, there's a little,
00:47:03.660 --> 00:47:06.750
there's a smaller number of generation resources
00:47:06.750 --> 00:47:09.653
that participates in ERS about how many megawatts?
00:47:09.653 --> 00:47:14.630
About 300 megawatts participate as ERS generators.
00:47:14.630 --> 00:47:16.570
Out of how many total megawatts typically?
00:47:16.570 --> 00:47:18.432
About, I mean, we have about a thousand.
00:47:18.432 --> 00:47:20.730
Let's just use that as a round number.
00:47:20.730 --> 00:47:24.290
But it sounds like your suggestion is to go back
00:47:24.290 --> 00:47:26.450
and take a look at this issue with performance
00:47:26.450 --> 00:47:28.100
because during a winter storm event,
00:47:28.100 --> 00:47:31.030
or any event we have to take out distribution system,
00:47:31.030 --> 00:47:33.570
there could be impacts to their ability to perform
00:47:33.570 --> 00:47:36.953
and provide that ERS service that we've contracted them for.
00:47:36.953 --> 00:47:40.453
I mean, I think you want to,
00:47:40.453 --> 00:47:45.453
to me, your question was, sorry, what stood out?
00:47:45.470 --> 00:47:48.010
That aspect stood out to me.
00:47:48.010 --> 00:47:51.664
I think there's a lot to look at behind that story,
00:47:51.664 --> 00:47:56.664
but I, to me that is the thing that on the ERS program,
00:47:57.090 --> 00:47:59.738
that when I looked at it, I was sitting there going,
00:47:59.738 --> 00:48:04.738
I'm not sure I'm getting the response that I was planning
00:48:05.626 --> 00:48:10.626
after I've gone through this event of curtailing firm load.
00:48:11.670 --> 00:48:16.160
Now this can happen on the load side also, to Mark's point.
00:48:16.160 --> 00:48:18.550
So, and thank you for that background.
00:48:18.550 --> 00:48:19.917
And I appreciate you highlighting that.
00:48:19.917 --> 00:48:24.917
And the reason I'm asking is because we look to evaluate ERS
00:48:25.460 --> 00:48:27.412
and make improvements for the future,
00:48:27.412 --> 00:48:30.710
we have to do a look back and lessons learned.
00:48:30.710 --> 00:48:34.770
And I think this is, you know, important fact to understand.
00:48:34.770 --> 00:48:36.970
And we have had some stakeholders file comments
00:48:36.970 --> 00:48:39.410
that state that generation resources,
00:48:39.410 --> 00:48:42.450
those same generation resources you're noting
00:48:42.450 --> 00:48:44.020
shouldn't be part of ERS.
00:48:44.020 --> 00:48:46.536
So I'm just making sure that whatever we're paying for,
00:48:46.536 --> 00:48:49.193
we're actually gonna get a reliability benefit from.
00:48:51.440 --> 00:48:52.500
And I'm not saying--
Those are,
00:48:52.500 --> 00:48:54.190
those are fantastic questions.
00:48:54.190 --> 00:48:55.973
And I would just make sure,
00:48:56.901 --> 00:49:00.550
as you think through that kind of caveat it
00:49:00.550 --> 00:49:03.563
with the winter might look different than the summer.
00:49:06.950 --> 00:49:11.950
But, I think the commenters are bringing up this issue
00:49:14.200 --> 00:49:18.950
because it's, as we work through our market redesign,
00:49:18.950 --> 00:49:22.690
these are important things to consider and evaluate.
00:49:22.690 --> 00:49:23.523
Absolutely.
00:49:23.523 --> 00:49:25.040
And you have this context
00:49:25.040 --> 00:49:27.410
where they also want to grow the program.
00:49:27.410 --> 00:49:30.050
So how you want that program to grow
00:49:30.050 --> 00:49:34.490
from a public policy standpoint is important.
00:49:34.490 --> 00:49:37.183
Did anything else stand out from the winter?
00:49:37.183 --> 00:49:38.760
That was, that would be the main thing.
00:49:38.760 --> 00:49:40.130
I mean, I think there are
00:49:40.130 --> 00:49:43.810
very individual details that stood out,
00:49:43.810 --> 00:49:46.560
but while Mark's up here, I might as well let him also,
00:49:46.560 --> 00:49:50.677
as manager of the program, answer that question as well.
00:49:50.677 --> 00:49:52.350
Well, before I go into that,
00:49:52.350 --> 00:49:54.100
maybe I could make one statement.
00:49:54.100 --> 00:49:56.730
I want to make, ERS with the two different,
00:49:56.730 --> 00:50:00.310
we have the ERS 10 and the ERS 30 product types.
00:50:00.310 --> 00:50:04.603
The ERS 30 can get deployed in EEA level one.
00:50:04.603 --> 00:50:08.600
The 10 minute product types, they are,
00:50:08.600 --> 00:50:12.530
they can't be deployed any earlier than EEA level two.
00:50:12.530 --> 00:50:13.580
So I think it's also important.
00:50:13.580 --> 00:50:17.200
So there, you got the ERS 30 in EEA level one,
00:50:17.200 --> 00:50:19.630
and then there's the makeup
00:50:19.630 --> 00:50:22.500
of how much of that capacity is in ERS 10
00:50:22.500 --> 00:50:24.090
versus ERS 30.
00:50:24.090 --> 00:50:27.390
Over the years, there's been a significant movement
00:50:27.390 --> 00:50:30.760
of most of the providers are now offering
00:50:30.760 --> 00:50:34.602
into the ERS 30 product type service.
00:50:34.602 --> 00:50:38.410
And so now the ratio is about 90% of the capacity
00:50:38.410 --> 00:50:42.560
is in ERS 30 and only 10% is in ERS 10.
00:50:42.560 --> 00:50:44.320
That means we're getting about nine,
00:50:44.320 --> 00:50:47.811
if you use the 1000 megawatts, we get about 900 megawatts
00:50:47.811 --> 00:50:51.190
that's available to us in EEA level one,
00:50:51.190 --> 00:50:53.680
and then only about a hundred megawatts is leftover
00:50:53.680 --> 00:50:55.540
when we get into EEA level two.
00:50:55.540 --> 00:50:58.210
All in, and this is for either of you,
00:50:58.210 --> 00:51:01.316
or I dunno if Woody's out in the audience, probably not,
00:51:01.316 --> 00:51:05.210
but how long did it take us to go
00:51:05.210 --> 00:51:08.143
from EEA one to EEA three during Uri?
00:51:09.140 --> 00:51:10.719
It was very short.
00:51:10.719 --> 00:51:12.200
Hour, hour and a half?
It was short.
00:51:12.200 --> 00:51:13.520
Was about an hour or two.
00:51:13.520 --> 00:51:15.191
So you got a 30 minute product,
00:51:15.191 --> 00:51:17.560
you're making lightening fast decisions.
00:51:17.560 --> 00:51:20.066
And that was a very fast moving
00:51:20.066 --> 00:51:20.970
event.
It was a fast moving.
00:51:20.970 --> 00:51:24.100
But still, I mean, if we did a sort of historical back cast
00:51:24.100 --> 00:51:27.880
on 2011, you know, when you kind of went through that,
00:51:27.880 --> 00:51:30.670
it seems like that system does move fast.
00:51:30.670 --> 00:51:32.950
I mean, when you're trying to arrest free falls
00:51:32.950 --> 00:51:36.810
and God forbid frequency events, you know,
00:51:36.810 --> 00:51:39.370
and this rotating mass becomes more of an issue.
00:51:39.370 --> 00:51:42.507
So I guess, is it fair to say
00:51:42.507 --> 00:51:44.970
that due to what we did observe,
00:51:44.970 --> 00:51:48.830
which is a legitimate, you know, constraint on the system,
00:51:48.830 --> 00:51:50.380
fuel, resource, or whatever,
00:51:50.380 --> 00:51:53.240
once you start load shed protocols,
00:51:53.240 --> 00:51:55.650
and you're even close to load shed protocols,
00:51:55.650 --> 00:51:59.855
you need to be out front with these capabilities of ERS
00:51:59.855 --> 00:52:03.915
because you won't be able to use them once you're in it.
00:52:03.915 --> 00:52:07.180
Yes, I mean that the operators have to
00:52:07.180 --> 00:52:12.180
really be thoughtful about when they deploy ERS.
00:52:12.810 --> 00:52:16.870
I do want to, so 2011 was a really interesting year
00:52:16.870 --> 00:52:19.100
because we had two cases to look at.
00:52:19.100 --> 00:52:22.070
One is the winter event, you know,
00:52:22.070 --> 00:52:24.260
where things may have moved a lot faster,
00:52:24.260 --> 00:52:28.010
but there was also a day in August where it was,
00:52:28.010 --> 00:52:31.200
we got really close to having to shed firm load,
00:52:31.200 --> 00:52:33.770
but it moved to that point much slower.
00:52:33.770 --> 00:52:35.839
And we actually deployed ERS.
00:52:35.839 --> 00:52:39.110
And I actually remember the day really clearly,
00:52:39.110 --> 00:52:40.980
'cause I was sitting there waiting to see
00:52:40.980 --> 00:52:42.450
if the lights would go out
00:52:42.450 --> 00:52:46.200
and ERS did make the difference that day and the time,
00:52:46.200 --> 00:52:50.420
so again, it just kinda depends on the type of event.
00:52:50.420 --> 00:52:54.640
But sometimes you have a little bit more time
00:52:54.640 --> 00:52:58.000
if it is, you know, load slowly ramping up
00:52:58.958 --> 00:53:00.410
and there's not enough generation
00:53:00.410 --> 00:53:04.210
that might happen in the summer with no generation trip
00:53:04.210 --> 00:53:08.623
versus a winter event could look very different.
00:53:09.720 --> 00:53:11.710
So Kenan, as I stated earlier,
00:53:11.710 --> 00:53:13.310
the role allows us flexibility
00:53:13.310 --> 00:53:15.880
and ERCOT does use that flexibility to use ERS
00:53:15.880 --> 00:53:18.363
in EEA one or two.
00:53:18.363 --> 00:53:23.363
It seems like most of the sort of emergency EEA levels,
00:53:23.890 --> 00:53:25.996
all the information I've ever seen from ERCOT,
00:53:25.996 --> 00:53:27.671
has it being deployed in EEA two.
00:53:27.671 --> 00:53:31.030
So to Mark's point,
00:53:31.030 --> 00:53:34.030
because this is the 30 minute service,
00:53:34.030 --> 00:53:38.383
30 minutes is too long to wait for EEA two,
00:53:38.383 --> 00:53:41.563
that is deployed in EEA one.
00:53:41.563 --> 00:53:43.190
Okay, so--
00:53:43.190 --> 00:53:47.630
So, the lead time does matter for the product.
00:53:47.630 --> 00:53:49.220
I do want to ask you one question
00:53:49.220 --> 00:53:50.990
and it goes back to the pre-deployment.
00:53:50.990 --> 00:53:53.620
There is a variety of stakeholders that file comments
00:53:53.620 --> 00:53:54.860
that said that we should prohibit,
00:53:54.860 --> 00:53:56.880
the Commission should prohibit early deployment,
00:53:56.880 --> 00:54:00.820
pre deployments of ERS that has been contracted for.
00:54:00.820 --> 00:54:05.820
Can you give me your thoughts on that issue?
00:54:06.909 --> 00:54:09.720
I mean, so it kind of depends on your goal,
00:54:09.720 --> 00:54:13.790
but if your goal is to have a product
00:54:13.790 --> 00:54:17.050
that is in lieu of shedding firm load,
00:54:17.050 --> 00:54:20.350
the way it is set up now make sense.
00:54:20.350 --> 00:54:25.090
If you were worried about these loads
00:54:26.810 --> 00:54:30.200
would have responded anyway, or those types of arguments,
00:54:30.200 --> 00:54:33.363
that's where this don't let them leave early
00:54:33.363 --> 00:54:37.030
kind of argument comes in into play,
00:54:37.030 --> 00:54:40.860
is a lot of people will argue what they are,
00:54:40.860 --> 00:54:41.920
you know, and, and I'm not,
00:54:41.920 --> 00:54:43.350
I don't necessarily agree with this,
00:54:43.350 --> 00:54:44.900
but I want to lay this out there,
00:54:44.900 --> 00:54:49.900
is that these resources would have gone away anyway.
00:54:50.445 --> 00:54:52.240
And you're in addition,
00:54:52.240 --> 00:54:54.583
making an additional payment to them.
00:54:54.583 --> 00:54:57.520
That's a lot of the argument for saying,
00:54:57.520 --> 00:54:59.043
don't let them go away early.
00:54:59.043 --> 00:55:04.043
That very issue was debated back in the original version,
00:55:05.580 --> 00:55:08.348
and ultimately at that time, the Commission said,
00:55:08.348 --> 00:55:11.970
and this doesn't need to be the case today,
00:55:11.970 --> 00:55:15.060
but the thought was, I'd rather have them go away
00:55:15.060 --> 00:55:19.150
whenever they're comfortable going away.
00:55:19.150 --> 00:55:24.150
That is one less megawatt of firm load that I have to shed.
00:55:24.530 --> 00:55:26.270
That that was the thinking.
00:55:26.270 --> 00:55:28.320
I'm not saying that's necessarily right.
00:55:28.320 --> 00:55:32.760
You might, if you agree with at least the commenters,
00:55:32.760 --> 00:55:34.530
that the comments that I read,
00:55:34.530 --> 00:55:37.133
you might get that response anyway.
00:55:38.130 --> 00:55:40.780
So that I think that's the dynamic there.
00:55:40.780 --> 00:55:41.613
Sure.
00:55:42.940 --> 00:55:46.780
My colleagues are being very detailed in their comments,
00:55:46.780 --> 00:55:49.190
and I understand you all were following the protocols
00:55:49.190 --> 00:55:50.300
that you had at the time.
00:55:50.300 --> 00:55:52.450
But I think I'll be a little more blunt
00:55:52.450 --> 00:55:54.250
in saying that our direction from the Governor
00:55:54.250 --> 00:55:57.091
and the legislature was to use these tools
00:55:57.091 --> 00:56:00.101
before you even get close to the emergency,
00:56:00.101 --> 00:56:03.360
and so we are never in a situation
00:56:03.360 --> 00:56:06.270
where either the Commissioners, the regulators
00:56:06.270 --> 00:56:08.520
or the operators are wondering whether or not
00:56:08.520 --> 00:56:10.040
the lights are gonna go out.
00:56:10.040 --> 00:56:11.370
Our jobs are to make sure
00:56:11.370 --> 00:56:13.150
we don't get close to the lights going out.
00:56:13.150 --> 00:56:15.870
And so I think there's plenty of comments
00:56:15.870 --> 00:56:17.440
and thought up here,
00:56:17.440 --> 00:56:20.770
that we don't need to cut it that close anymore.
00:56:20.770 --> 00:56:22.750
I know Laurie's referenced this as well,
00:56:22.750 --> 00:56:25.600
that there's a very good argument
00:56:25.600 --> 00:56:27.770
for building a bigger margin of safety
00:56:27.770 --> 00:56:29.855
between when we deploy these resources
00:56:29.855 --> 00:56:34.855
and that hour between, the hour kind of downward spiral
00:56:36.740 --> 00:56:39.720
between when we first started thinking about it
00:56:39.720 --> 00:56:42.590
and when we started turning off people's lights.
00:56:42.590 --> 00:56:46.120
Yeah, and in that context, I mean,
00:56:46.120 --> 00:56:47.638
we talked about the 50 million.
00:56:47.638 --> 00:56:50.790
When a load resource bids into this,
00:56:50.790 --> 00:56:53.030
and I'm talking less about the generation
00:56:53.030 --> 00:56:58.030
and more about the load, there is a cost to curtailing
00:56:58.280 --> 00:57:03.280
and that is whatever they're making or the recovery,
00:57:03.480 --> 00:57:05.210
having to come back.
00:57:05.210 --> 00:57:09.576
So Commissioner McAdams, you had asked about the 50 million,
00:57:09.576 --> 00:57:12.130
it's entirely reasonable to move up
00:57:12.130 --> 00:57:14.220
that deployment time period,
00:57:14.220 --> 00:57:18.430
but there might be a higher cost to that load
00:57:18.430 --> 00:57:20.780
of curtailing earlier.
00:57:20.780 --> 00:57:23.020
So that might be something to consider
00:57:23.020 --> 00:57:25.284
when you think about the pot.
But why?
00:57:25.284 --> 00:57:27.299
The pot of money.
Why is it more expensive?
00:57:27.299 --> 00:57:28.159
Pardon?
00:57:28.159 --> 00:57:29.274
Why is it more expensive,
00:57:29.274 --> 00:57:30.541
'cause in 15 minutes
'Cause they actually think
00:57:30.541 --> 00:57:32.098
they're gonna get used.
they're gonna--
00:57:32.098 --> 00:57:33.563
Well, I think there's two things,
00:57:33.563 --> 00:57:34.396
they think there'll be used,
00:57:34.396 --> 00:57:36.660
but they will be deployed more frequently
00:57:36.660 --> 00:57:39.930
if it's a watch or an alert
00:57:39.930 --> 00:57:44.107
rather than later in the queue, in the--
00:57:45.880 --> 00:57:47.030
The preferred business model
00:57:47.030 --> 00:57:48.060
is to get the 50 million
00:57:48.060 --> 00:57:51.130
without actually having to be deployed.
00:57:51.130 --> 00:57:53.700
But there is a cost to being deployed,
00:57:53.700 --> 00:57:56.300
and that certainly would be in my calculation
00:57:56.300 --> 00:57:59.003
if I bid into ERS.
00:58:00.120 --> 00:58:03.780
The other side of that coin is getting what you paid for.
00:58:03.780 --> 00:58:04.813
Absolutely.
00:58:05.814 --> 00:58:09.564
So, before we leave ERS, you know, I think,
00:58:11.060 --> 00:58:12.190
thank you for all your feedback.
00:58:12.190 --> 00:58:13.680
I think it's been very helpful to understand.
00:58:13.680 --> 00:58:15.950
I definitely agree with Chairman Lake
00:58:15.950 --> 00:58:18.550
that we've got to figure out how to use
00:58:18.550 --> 00:58:21.850
this very important service in a way that provides us
00:58:21.850 --> 00:58:24.590
a reliability benefit, and we get what we pay for.
00:58:24.590 --> 00:58:27.240
And have a more, we want to give ERCOT
00:58:27.240 --> 00:58:29.490
operational flexibility to use it when they need it,
00:58:29.490 --> 00:58:31.590
but using it earlier to prevent us
00:58:31.590 --> 00:58:32.950
from getting into an emergency
00:58:32.950 --> 00:58:34.530
or at the very beginning of emergency
00:58:34.530 --> 00:58:36.720
seems to make more sense.
00:58:36.720 --> 00:58:38.800
But that's something we'll continue to evaluate.
00:58:38.800 --> 00:58:40.440
The other piece of it is, you know,
00:58:40.440 --> 00:58:42.210
we have a significant amount
00:58:42.210 --> 00:58:44.251
of CNI customers that are registered.
00:58:44.251 --> 00:58:46.660
There's been a lot of comments that have been filed
00:58:46.660 --> 00:58:50.061
about residential demand response and performance blocks,
00:58:50.061 --> 00:58:53.550
distributed energy, resources, storage, aggregations,
00:58:53.550 --> 00:58:58.550
are there, with respect to any of those options
00:58:58.650 --> 00:59:02.210
of new options potentially of being included in ERS,
00:59:02.210 --> 00:59:04.500
Are there any opportunities you see
00:59:04.500 --> 00:59:06.220
with some of these newer participants,
00:59:06.220 --> 00:59:08.605
potential newer participants in the program?
00:59:08.605 --> 00:59:12.980
And if so, is there any benefit for ERCOT
00:59:12.980 --> 00:59:16.450
piloting some of some new participation?
00:59:16.450 --> 00:59:18.130
I know ERCOT's done that a lot in the past,
00:59:18.130 --> 00:59:19.430
and it's a way to sort of understand
00:59:19.430 --> 00:59:24.430
how those resources will behave in a ERS scenario
00:59:24.490 --> 00:59:26.349
so that we can see if we get any benefit.
00:59:26.349 --> 00:59:31.349
So, I mean, ERS is probably more conducive
00:59:32.440 --> 00:59:37.440
to some type of aggregation than any other program we have.
00:59:38.908 --> 00:59:43.908
So I would, the areas that I'm more interested in seeing
00:59:46.730 --> 00:59:48.380
how we might be able to aggregate
00:59:48.380 --> 00:59:52.850
are more and load resource,
00:59:52.850 --> 00:59:56.131
where they're participating in ancillary services,
00:59:56.131 --> 01:00:01.131
both storage and a load.
01:00:04.338 --> 01:00:07.743
We, ERCOT does allow non-spin,
01:00:11.160 --> 01:00:13.630
some aggregations of load
01:00:13.630 --> 01:00:15.240
to participate in non-spin,
01:00:15.240 --> 01:00:17.640
but they have to follow base points.
01:00:17.640 --> 01:00:20.010
And the data flow is necessary to manage
01:00:20.010 --> 01:00:25.010
a lot of small resources and an aggregation is expensive.
01:00:26.500 --> 01:00:30.997
So nobody is participating in that currently in that form.
01:00:30.997 --> 01:00:35.997
But the data centers and things like that
01:00:36.130 --> 01:00:39.130
have found that to be a good path.
01:00:39.130 --> 01:00:44.130
So to me, the challenge we have
01:00:44.470 --> 01:00:49.470
is to see what we can do on aggregations on this other end.
01:00:50.260 --> 01:00:55.260
As far as pilots go, you know, certainly open to pilots,
01:00:57.130 --> 01:01:00.580
but a lot of those sometimes turn into
01:01:00.580 --> 01:01:04.090
just like a small set-aside project
01:01:04.090 --> 01:01:09.090
that I don't know how much value that has or does not.
01:01:09.341 --> 01:01:10.941
Okay.
Yeah.
01:01:10.941 --> 01:01:14.550
So, I mean, I do think we need to spend energy
01:01:14.550 --> 01:01:16.990
and attention on aggregating
01:01:16.990 --> 01:01:20.514
within the ancillary service suite.
01:01:20.514 --> 01:01:25.080
And as I think a lot of the commenters pointed out
01:01:25.080 --> 01:01:27.243
that might be also an area that you want to grow
01:01:27.243 --> 01:01:32.243
from the perspective of system reliability anyway.
01:01:33.240 --> 01:01:35.410
So it sounds like your conclusion is,
01:01:35.410 --> 01:01:36.310
and I don't want to put words in your mouth,
01:01:36.310 --> 01:01:39.523
but it sounds like you're saying that with respect to ERS,
01:01:39.523 --> 01:01:42.564
the current participants, the status quo,
01:01:42.564 --> 01:01:45.350
is you don't see any other opportunities
01:01:45.350 --> 01:01:48.720
for any other resources to participate?
01:01:48.720 --> 01:01:52.140
If I may qualify, I was trying to answer that
01:01:52.140 --> 01:01:54.720
only in the terms of aggregation.
01:01:54.720 --> 01:01:58.250
I think there are opportunities for other resources
01:01:58.250 --> 01:02:00.710
to participate if, you know,
01:02:00.710 --> 01:02:04.019
that meets your public interest standard.
01:02:04.019 --> 01:02:08.170
But I think on the aggregation, and this might be
01:02:08.170 --> 01:02:13.170
the most friendly product we have to aggregation.
01:02:13.830 --> 01:02:15.973
What type of resources?
01:02:15.973 --> 01:02:18.627
That's what I'm trying to get at.
01:02:18.627 --> 01:02:20.321
I'm just trying to figure out
01:02:20.321 --> 01:02:22.194
what else we can be looking at.
01:02:22.194 --> 01:02:23.027
I think there is a potential
01:02:23.027 --> 01:02:27.950
for maybe some kind of aggregated storage to participate.
01:02:29.310 --> 01:02:32.380
I think it's more on the small scale,
01:02:32.380 --> 01:02:36.820
and not on the, you know, megawatt scale,
01:02:36.820 --> 01:02:39.780
but I wouldn't preclude anything.
01:02:39.780 --> 01:02:42.763
And we, this program is relatively open
01:02:42.763 --> 01:02:45.110
to those types of resources,
01:02:45.110 --> 01:02:48.070
as long as it's behind the meter,
01:02:48.070 --> 01:02:52.210
and, you know, we can measure it and validate.
01:02:52.210 --> 01:02:56.470
But as home storage proliferates
01:02:56.470 --> 01:02:59.450
and as transportation electrification drives
01:02:59.450 --> 01:03:03.180
more home electrification to a certain degree,
01:03:03.180 --> 01:03:06.820
and more controllability at that on an aggregated scale,
01:03:06.820 --> 01:03:09.220
you're saying that you would rather see that,
01:03:09.220 --> 01:03:13.020
well, once it's a scalable and controllable,
01:03:13.020 --> 01:03:15.223
participate in your ancillary services,
01:03:16.291 --> 01:03:17.460
because you can forecast that, you're bidding that,
01:03:17.460 --> 01:03:18.990
you're auctioning that.
01:03:18.990 --> 01:03:21.760
And for ERCOT's purposes, that's a much more refined
01:03:21.760 --> 01:03:23.660
mechanism for usage.
01:03:23.660 --> 01:03:25.840
It sounds like they can already participate.
01:03:25.840 --> 01:03:28.310
They just haven't found the right business model
01:03:28.310 --> 01:03:29.569
to make it economic.
01:03:29.569 --> 01:03:30.830
Is that accurate?
01:03:30.830 --> 01:03:31.800
That would be,
Data centers
01:03:31.800 --> 01:03:33.706
could participate.
I mean, the things
01:03:33.706 --> 01:03:35.390
that you mentioned--
Do participate, right?
01:03:35.390 --> 01:03:37.017
The items that you mentioned,
01:03:37.017 --> 01:03:40.560
we would, I mean, I think they can participate.
01:03:40.560 --> 01:03:44.583
Where they are unable to right now is in ancillary services.
01:03:46.110 --> 01:03:48.880
But they have to meet the requirements
01:03:48.880 --> 01:03:50.375
of the program, sorry.
01:03:50.375 --> 01:03:52.008
Is it the economics doesn't work for them
01:03:52.008 --> 01:03:52.841
in the ancillary services
01:03:52.841 --> 01:03:56.380
or the reliability dispatchable requirements don't,
01:03:56.380 --> 01:03:58.315
the performance, they don't meet
01:03:58.315 --> 01:03:59.368
the performance requirement?
01:03:59.368 --> 01:04:02.469
Well, I think right now, from an aggregation standpoint,
01:04:02.469 --> 01:04:07.469
it's difficult to meet the ancillary service requirements.
01:04:09.974 --> 01:04:14.974
But every day, folks are getting much more sophisticated
01:04:15.130 --> 01:04:18.950
about controlling these devices.
01:04:18.950 --> 01:04:22.750
And to me, it's possible,
01:04:22.750 --> 01:04:25.310
I think we want to remove those barriers
01:04:26.690 --> 01:04:31.273
and the ancillary services, also an open-ended,
01:04:35.010 --> 01:04:38.093
the funding is more open-ended than ERS is.
01:04:39.650 --> 01:04:42.540
Yeah, it's, just to harken back,
01:04:42.540 --> 01:04:47.300
it's the performance barriers that ERCOT has to have
01:04:47.300 --> 01:04:48.670
on a physical basis.
01:04:48.670 --> 01:04:51.195
There's requirements for reliability.
01:04:51.195 --> 01:04:53.392
So the barriers aren't,
01:04:53.392 --> 01:04:58.392
the performance aggregated load demand response
01:04:58.670 --> 01:05:01.770
is not participating ancillary services right now
01:05:01.770 --> 01:05:05.250
because they don't have, they, for whatever reason,
01:05:05.250 --> 01:05:08.010
don't meet the existing performance requirements
01:05:08.010 --> 01:05:08.890
of ancillary services.
01:05:08.890 --> 01:05:10.180
Is that accurate?
01:05:10.180 --> 01:05:11.360
Yes, and in fact--
01:05:11.360 --> 01:05:14.559
Okay, we don't want to lower those reliability standards,
01:05:14.559 --> 01:05:19.559
I feel confident in saying, is that generally reasonable?
01:05:20.260 --> 01:05:24.010
They're there because that is the service that we need
01:05:24.010 --> 01:05:26.060
to maintain reliability.
01:05:26.060 --> 01:05:30.190
But sometimes registration requirements were built
01:05:30.190 --> 01:05:34.510
on thinking about the resources that were on the system
01:05:34.510 --> 01:05:37.730
at the time, or, and that's where ERCOT
01:05:37.730 --> 01:05:40.250
needs to be nimble and adjust.
01:05:40.250 --> 01:05:42.378
So I don't want to--
01:05:42.378 --> 01:05:43.820
Sure, is there anything specific,
01:05:43.820 --> 01:05:46.040
any barrier that you could point to on the ERCOT side
01:05:46.040 --> 01:05:50.070
that needs to be tweaked or adjusted
01:05:50.070 --> 01:05:54.550
to facilitate this without reducing reliability standards?
01:05:54.550 --> 01:05:59.550
So I would say we want to get this moratorium
01:05:59.639 --> 01:06:04.639
around DGRs away when we can do it reliably.
01:06:06.329 --> 01:06:09.820
I think that's in process.
That's important. That is.
01:06:09.820 --> 01:06:13.580
I think we want as many of the new resources
01:06:13.580 --> 01:06:14.750
coming on the system,
01:06:14.750 --> 01:06:17.147
if they provide the value that we're looking for,
01:06:17.147 --> 01:06:19.940
allow them to qualify.
01:06:19.940 --> 01:06:21.720
So we would want to, if there's something
01:06:21.720 --> 01:06:23.703
stopping them from qualifying,
01:06:24.620 --> 01:06:26.082
we would want to look at that.
01:06:26.082 --> 01:06:29.660
I think a lot of the comments that I read,
01:06:29.660 --> 01:06:31.520
in and around this, you know,
01:06:31.520 --> 01:06:35.265
wanted to reduce the hour duration or things like that.
01:06:35.265 --> 01:06:37.660
That's where I get a little bit more nervous
01:06:37.660 --> 01:06:41.400
because if I have an hour long event, I am--
01:06:41.400 --> 01:06:44.270
Yeah, we don't need to adjust reliability
01:06:44.270 --> 01:06:45.580
to meet existing technology.
01:06:45.580 --> 01:06:48.810
We need the technology to rise to reliability.
01:06:48.810 --> 01:06:52.090
Exactly, and then be open to any technology
01:06:52.090 --> 01:06:55.860
that can meet those requirements to qualify.
01:06:55.860 --> 01:06:57.250
Yeah, I think we've got,
01:06:57.250 --> 01:06:58.960
we'll hear from lots of folks today
01:06:58.960 --> 01:07:02.870
about any opportunities to improve on the ERCOT side.
01:07:02.870 --> 01:07:07.290
So, with respect to the moratorium on DGB being lifted
01:07:08.378 --> 01:07:09.725
over the years,
01:07:09.725 --> 01:07:13.140
and expected significant increase in those resources
01:07:13.140 --> 01:07:16.828
after that moratorium is lifted this next year,
01:07:16.828 --> 01:07:20.937
and those resources are connected to the distribution system
01:07:20.937 --> 01:07:25.937
by way of just pure definition, how are we gonna, you know,
01:07:27.141 --> 01:07:29.990
how does ERCOT anticipate managing that?
01:07:29.990 --> 01:07:32.440
Or what can we do to help you manage that situation
01:07:32.440 --> 01:07:34.270
where we are in a load shed event,
01:07:34.270 --> 01:07:36.320
and, you know, we have a bunch of resources
01:07:36.320 --> 01:07:40.113
on the distribution system and we've, you know,
01:07:41.573 --> 01:07:43.151
we can designate them as, I mean,
01:07:43.151 --> 01:07:44.860
how is that gonna all play out?
01:07:44.860 --> 01:07:49.060
So I think what folks from the TDSPs
01:07:49.060 --> 01:07:50.090
are gonna share with you
01:07:50.090 --> 01:07:54.210
is gonna be really important to answer that.
01:07:54.210 --> 01:07:59.210
But one thing I would throw out there is, you know,
01:07:59.310 --> 01:08:04.060
the more granular we can be in terms of the load shed,
01:08:04.060 --> 01:08:08.710
then we might be able to keep more of these resources that
01:08:08.710 --> 01:08:11.930
are on the distribution system of available.
01:08:11.930 --> 01:08:16.760
But that's quite a challenging and expensive proposition.
01:08:16.760 --> 01:08:18.500
But that's one thing I think,
01:08:18.500 --> 01:08:23.185
as far as distribution level resources go, that, you know,
01:08:23.185 --> 01:08:28.185
that's a challenge to manage for the distribution providers.
01:08:28.730 --> 01:08:31.480
And I think they would be able to share
01:08:31.480 --> 01:08:33.270
a lot of thoughts with you on that.
01:08:33.270 --> 01:08:36.160
We did hear from at least Encore at the TDU work session
01:08:36.160 --> 01:08:38.610
that said they do have some distribution resources
01:08:38.610 --> 01:08:40.630
on their system, and obviously wouldn't roll them off
01:08:40.630 --> 01:08:42.490
because they are providing an ancillary service.
01:08:42.490 --> 01:08:45.060
But as we have a tremendous increase in those resources
01:08:45.060 --> 01:08:46.130
on our distribution system,
01:08:46.130 --> 01:08:47.510
I think it's gonna be really important,
01:08:47.510 --> 01:08:49.079
as you've highlighted,
01:08:49.079 --> 01:08:53.360
to figure out a way to get the reliability benefit,
01:08:53.360 --> 01:08:56.310
especially if they're enrolled in AS product or ERS
01:08:56.310 --> 01:08:57.930
so that they're not being rolled off
01:08:57.930 --> 01:09:01.330
and we also don't have operational issues
01:09:01.330 --> 01:09:04.010
in conducting load shed because we have a bunch of lines
01:09:04.010 --> 01:09:07.467
in addition to critical care that can't be rolled.
01:09:07.467 --> 01:09:09.573
Yeah, absolutely.
01:09:09.573 --> 01:09:12.260
Programming question for you, Kenan,
01:09:12.260 --> 01:09:14.470
how many more slides do you have?
01:09:14.470 --> 01:09:16.900
I believe there's three more if I remember correctly.
01:09:16.900 --> 01:09:18.797
But I can move, I can move through them pretty quickly.
01:09:18.797 --> 01:09:20.791
And in fact, a lot of your questions
01:09:20.791 --> 01:09:23.900
are on the subsequent slides.
01:09:23.900 --> 01:09:25.137
I mean, nailed it.
01:09:25.137 --> 01:09:26.366
All right, take it away.
01:09:26.366 --> 01:09:31.366
So TSPs or TDSPs do have load management programs.
01:09:34.397 --> 01:09:39.397
They deploy, those are deployed through ERCOT instruction.
01:09:39.710 --> 01:09:43.810
We're actually tracking them more closely now
01:09:43.810 --> 01:09:48.810
because there is a price adjustment for their deployment
01:09:49.010 --> 01:09:51.500
that now is in our system.
01:09:51.500 --> 01:09:56.500
So there's like a price run and we adjust the price up
01:09:56.540 --> 01:09:59.100
for the deployment of those megawatts
01:09:59.100 --> 01:10:03.141
to make sure we're sending the right scarcity price
01:10:03.141 --> 01:10:04.543
to the system.
01:10:05.479 --> 01:10:09.770
This program has between 250 and 350 megawatts.
01:10:09.770 --> 01:10:11.293
Next slide, please.
01:10:13.370 --> 01:10:16.910
The four coincidence peak load reduction
01:10:16.910 --> 01:10:21.910
is a major response that we see in terms of demand response.
01:10:22.520 --> 01:10:25.041
All the data on this slide,
01:10:25.041 --> 01:10:26.730
I need to highlight, is from 2020.
01:10:26.730 --> 01:10:28.920
We don't have 2021 data yet
01:10:28.920 --> 01:10:33.890
because we actually collect, September is a 4CP,
01:10:33.890 --> 01:10:36.590
we collect data through September
01:10:36.590 --> 01:10:40.990
and we'll issue an updated report in December on this.
01:10:40.990 --> 01:10:45.590
But what you'd see is load reacting
01:10:45.590 --> 01:10:49.520
to the transmission cost of service allocation
01:10:49.520 --> 01:10:51.130
that they would face.
01:10:51.130 --> 01:10:56.130
And they curtail both on the 4CP day or days,
01:10:57.330 --> 01:10:59.350
but they also, to be absolutely sure
01:10:59.350 --> 01:11:00.500
that they don't miss it,
01:11:00.500 --> 01:11:03.930
there are also these near 4CP days
01:11:03.930 --> 01:11:07.820
or near coincidence peak days that we see large deployments.
01:11:07.820 --> 01:11:12.163
And in fact, I believe it was 2019,
01:11:13.054 --> 01:11:16.180
one of the coincidence peaks change
01:11:16.180 --> 01:11:18.890
because so much load responded on one day,
01:11:18.890 --> 01:11:23.190
it moved back to a prior day in the week.
01:11:23.190 --> 01:11:27.040
So, you definitely want to catch the near days
01:11:27.040 --> 01:11:30.713
as well as the actual days.
01:11:31.600 --> 01:11:35.880
And there's large value in that as this slide shows.
01:11:35.880 --> 01:11:39.100
So speaking of how the grid is changing
01:11:39.100 --> 01:11:41.000
and as the peaks change,
01:11:41.000 --> 01:11:46.000
so if we will experience some of our peaks in the non,
01:11:46.985 --> 01:11:49.120
you know, summer periods,
01:11:49.120 --> 01:11:51.580
like as we go into shoulder months
01:11:51.580 --> 01:11:54.490
and we have more, dispatchability offline
01:11:54.490 --> 01:11:56.108
due to maintenance schedules.
01:11:56.108 --> 01:12:00.050
If the Commission was to consider a,
01:12:00.050 --> 01:12:02.840
and I'm not doing it here, I'm just asking the questions,
01:12:02.840 --> 01:12:07.120
a more disparate CP,
01:12:07.120 --> 01:12:12.098
you know, some comments have indicated a 12 CP approach.
01:12:12.098 --> 01:12:15.300
Again, that number, that all in number wouldn't change,
01:12:15.300 --> 01:12:19.410
it would just be spread over a longer range.
01:12:19.410 --> 01:12:21.840
Again, more months.
01:12:21.840 --> 01:12:26.270
Yes, you would have to curtail at the peak of every month,
01:12:26.270 --> 01:12:30.900
for example, in a 12 CP to make that work.
01:12:30.900 --> 01:12:34.090
I do, Woody's not here,
01:12:34.090 --> 01:12:39.090
but I do want to channel my operations colleagues and say,
01:12:40.270 --> 01:12:44.290
one of the things that ERCOT is very interested in
01:12:44.290 --> 01:12:47.170
is instead of just the load peak,
01:12:47.170 --> 01:12:51.470
the net load peak is of particular interest to ERCOT
01:12:51.470 --> 01:12:53.500
in terms of managing the grid
01:12:53.500 --> 01:12:56.510
as you have more and more intermittence on the system.
01:12:56.510 --> 01:13:01.510
So it's that peak adjusted for intermittent resources
01:13:02.270 --> 01:13:05.895
from an ERCOT reliability standpoint, that is--
01:13:05.895 --> 01:13:07.400
Can you put net peak load in context?
01:13:07.400 --> 01:13:10.980
For non-engineers. In layman's terms.
01:13:10.980 --> 01:13:15.980
Yeah, so it is load adjusted for intermittent resources.
01:13:15.990 --> 01:13:20.400
So it's the combination of intermittent resources and load
01:13:20.400 --> 01:13:22.993
that is that net load peak.
01:13:24.719 --> 01:13:28.540
The one thing I would caution you is on,
01:13:28.540 --> 01:13:32.810
this methodology was chosen on a cost causation basis
01:13:32.810 --> 01:13:34.720
for the transmission build.
01:13:34.720 --> 01:13:36.510
I'm not, I couldn't tell you
01:13:36.510 --> 01:13:38.930
that there is a cost causation link
01:13:38.930 --> 01:13:43.930
between the net load peak and the coincident peak.
01:13:44.010 --> 01:13:48.360
So I think you would get people arguing that before you.
01:13:48.360 --> 01:13:51.730
Yeah, so net net peak load comes later in the day,
01:13:51.730 --> 01:13:54.122
generally as solar, as the sun sets,
01:13:54.122 --> 01:13:56.610
and that may not necessarily be
01:13:56.610 --> 01:14:00.676
when an industrial consumer of power is,
01:14:00.676 --> 01:14:02.650
that's not the same time that,
01:14:02.650 --> 01:14:05.860
the peak power consumption happens at 4:00 or 5:00
01:14:05.860 --> 01:14:07.340
in the afternoon.
01:14:07.340 --> 01:14:08.173
That's correct.
01:14:08.173 --> 01:14:10.750
And, so, from a reliability standpoint,
01:14:10.750 --> 01:14:12.023
in the control room,
01:14:13.080 --> 01:14:16.360
the most challenging time is when the sun goes down
01:14:16.360 --> 01:14:20.350
and solar comes off, the solar power supply comes off.
01:14:20.350 --> 01:14:23.390
Not necessarily when the most power is being consumed
01:14:23.390 --> 01:14:24.223
during the day.
01:14:24.223 --> 01:14:25.960
Is that what you're trying to say?
01:14:25.960 --> 01:14:29.010
Exactly. Also when wind is really low,
01:14:29.010 --> 01:14:31.150
or something like that.
Right.
01:14:31.150 --> 01:14:34.300
The supply drops closer to the total demand
01:14:34.300 --> 01:14:36.930
rather than the highest total demand of the day.
01:14:36.930 --> 01:14:37.960
Correct.
01:14:37.960 --> 01:14:39.616
Well, what about the winter?
01:14:39.616 --> 01:14:44.320
Allocating on the winter PX?
01:14:44.320 --> 01:14:45.950
Yeah, like a net load impact on winter.
01:14:45.950 --> 01:14:47.310
Cause I mean, renewable generation
01:14:47.310 --> 01:14:49.597
definitely performs different then, right?
01:14:49.597 --> 01:14:53.960
Yes, so renewable performance
01:14:53.960 --> 01:14:56.075
would be different in the winter.
01:14:56.075 --> 01:14:59.320
You might have, you know, less solar on the system,
01:14:59.320 --> 01:15:00.948
so there's not as big a drop
01:15:00.948 --> 01:15:03.280
and also the sun goes down earlier,
01:15:03.280 --> 01:15:06.363
so the timing of that changes.
01:15:08.280 --> 01:15:12.210
I mean, I think our observation is more,
01:15:12.210 --> 01:15:16.310
this net load peak is of material interest
01:15:16.310 --> 01:15:17.883
in the summer right now.
01:15:19.020 --> 01:15:20.395
Okay. Thank you.
01:15:20.395 --> 01:15:22.653
Next slide, please.
01:15:24.140 --> 01:15:27.580
Also just want to make sure that I share with you
01:15:27.580 --> 01:15:32.560
that retail electric providers have programs
01:15:32.560 --> 01:15:34.560
that they don't necessarily have to register with us,
01:15:34.560 --> 01:15:37.670
but there's a financial interest in them
01:15:37.670 --> 01:15:40.570
reducing their consumption at certain times.
01:15:40.570 --> 01:15:44.380
And NOIEs have demand response and 4CP programs.
01:15:44.380 --> 01:15:48.480
So we try and account for that as well.
01:15:48.480 --> 01:15:53.480
And we've identified kind of the day in 2020,
01:15:55.400 --> 01:15:58.543
when that was the highest amount.
01:15:59.940 --> 01:16:00.773
Next slide.
01:16:01.735 --> 01:16:04.899
This is just an informational slide showing
01:16:04.899 --> 01:16:09.290
both in megawatts and in numbers,
01:16:09.290 --> 01:16:12.730
the amount of growth in what we are calling
01:16:12.730 --> 01:16:15.010
settlement-only distributed generation.
01:16:15.010 --> 01:16:18.020
So because nobody's really qualified
01:16:18.020 --> 01:16:20.130
to be a generation resource
01:16:20.130 --> 01:16:23.800
or a capital D capital G capital R,
01:16:23.800 --> 01:16:25.700
distribution generation resource,
01:16:25.700 --> 01:16:28.760
this is the main number that we're tracking.
01:16:28.760 --> 01:16:30.450
When the moratorium ends,
01:16:30.450 --> 01:16:33.070
there'll probably be a different category here.
01:16:33.070 --> 01:16:36.940
But as you can see, both in numbers and megawatts,
01:16:36.940 --> 01:16:40.885
year on year, these resources are growing.
01:16:40.885 --> 01:16:42.943
Next slide, please.
01:16:44.200 --> 01:16:47.404
We are also tracking what is going on
01:16:47.404 --> 01:16:49.046
in the rest of the United States.
01:16:49.046 --> 01:16:54.046
FERC order 2222 is just of interest to us
01:16:54.630 --> 01:16:58.500
to make sure we're not missing any good ideas
01:16:58.500 --> 01:17:03.141
or bad ideas for that matter, or things that don't work.
01:17:03.141 --> 01:17:08.141
But we are implementing rules ourselves.
01:17:08.330 --> 01:17:11.780
They are not necessarily tied to any FERC order,
01:17:11.780 --> 01:17:15.283
but those are items that we do track,
01:17:16.260 --> 01:17:19.220
as well as the regular developments
01:17:19.220 --> 01:17:20.940
in different jurisdictions.
01:17:20.940 --> 01:17:22.960
Next slide please.
01:17:22.960 --> 01:17:26.240
So, and this is my last slide.
01:17:26.240 --> 01:17:28.003
I think we've talked about a lot of these,
01:17:28.003 --> 01:17:33.003
but the one I want to really focus on is this first bullet.
01:17:34.000 --> 01:17:38.185
And we actually filed in this docket comments on this,
01:17:38.185 --> 01:17:43.185
which is, when I look at the price
01:17:43.400 --> 01:17:47.280
at which we compensate load, it's the zonal price,
01:17:47.280 --> 01:17:52.280
the zonal average, and the reliability baked in price
01:17:53.200 --> 01:17:56.330
is the locational marginal price.
01:17:56.330 --> 01:17:58.934
And we would like to find a way to move,
01:17:58.934 --> 01:18:03.660
for compensating load resources,
01:18:03.660 --> 01:18:06.610
to this locational marginal price
01:18:06.610 --> 01:18:08.910
rather than the zonal price.
01:18:08.910 --> 01:18:12.920
And I can give you an example of where this came into play,
01:18:12.920 --> 01:18:17.110
but when I think it was, it's almost two years now,
01:18:17.110 --> 01:18:21.800
when the hurricane hit the lower Rio Grande Valley,
01:18:21.800 --> 01:18:26.330
we saw really high prices in the south zone.
01:18:26.330 --> 01:18:29.180
Those really high prices in the south zone
01:18:29.180 --> 01:18:34.180
were driven by issues in the lower Rio Grande Valley.
01:18:34.210 --> 01:18:38.590
However, the prices were as high as $1,400.
01:18:38.590 --> 01:18:43.270
I saw load in, you know, north of,
01:18:43.270 --> 01:18:48.270
or east of San Antonio curtail due to that price,
01:18:50.003 --> 01:18:55.003
but they actually hindered a reliability solution
01:18:55.130 --> 01:18:58.110
rather than help by curtailing
01:18:58.110 --> 01:19:00.210
because the locational marginal price
01:19:00.210 --> 01:19:02.450
would have been more like $10.
01:19:02.450 --> 01:19:05.774
So I've done two things as I think
01:19:05.774 --> 01:19:07.890
about both the Texas economy and reliability.
01:19:07.890 --> 01:19:12.890
One is I sent somebody a price signal that said curtail
01:19:13.330 --> 01:19:16.780
when they should be making whatever it is they wanna make.
01:19:16.780 --> 01:19:20.880
And two, I didn't really help the reliability problem
01:19:20.880 --> 01:19:25.430
that I was having in the Rio Grande Valley.
01:19:25.430 --> 01:19:27.230
And I may have actually hindered it.
01:19:28.570 --> 01:19:31.620
So the the impact was extremely small,
01:19:31.620 --> 01:19:33.370
but it kind of gets you thinking,
01:19:33.370 --> 01:19:37.530
if it was closer to the constraint that load curtailment,
01:19:37.530 --> 01:19:41.840
it actually could push the prices up even higher
01:19:41.840 --> 01:19:45.840
and make it more difficult for ERCOT to solve the problems
01:19:45.840 --> 01:19:47.610
that it's trying to solve.
01:19:47.610 --> 01:19:51.300
And that's why we've advocated for this issue
01:19:51.300 --> 01:19:52.714
in our comments.
01:19:52.714 --> 01:19:54.200
So, more precise price signals.
01:19:54.200 --> 01:19:55.324
Correct.
01:19:55.324 --> 01:19:58.500
Is that an ERCOT problem or is that a substantive?
01:19:58.500 --> 01:20:00.980
I'm not seeing that in the substantive rule.
01:20:00.980 --> 01:20:03.310
So actually the substantive rule
01:20:03.310 --> 01:20:07.266
talks about all resources getting an LMP.
01:20:07.266 --> 01:20:09.370
When we implemented nodal,
01:20:09.370 --> 01:20:13.900
we didn't have the technology to get them that price
01:20:13.900 --> 01:20:15.170
so we can change
01:20:19.880 --> 01:20:22.093
our rules to reflect that.
01:20:22.980 --> 01:20:27.270
However, in our comments, we also at least propose
01:20:27.270 --> 01:20:30.834
that all load, whether it's a resource or not
01:20:30.834 --> 01:20:35.480
potentially be settled, if it's greater than a megawatt
01:20:35.480 --> 01:20:37.486
at the LMP.
01:20:37.486 --> 01:20:40.250
And I don't think that is something
01:20:40.250 --> 01:20:41.690
you want to do immediately.
01:20:41.690 --> 01:20:44.710
That's probably something you want to phase in over time.
01:20:44.710 --> 01:20:46.900
But it is something to be thinking about
01:20:46.900 --> 01:20:50.370
as we try to more reliably operate the system,
01:20:50.370 --> 01:20:53.820
and we're likely to have more load resources or load,
01:20:53.820 --> 01:20:55.890
large loads on the system
01:20:55.890 --> 01:20:58.822
that can curtail in response to price.
01:20:58.822 --> 01:21:01.130
Very good point. Thank you.
01:21:01.130 --> 01:21:03.450
And I think we've talked about everything else
01:21:03.450 --> 01:21:04.680
on this slide.
01:21:04.680 --> 01:21:06.720
Yeah, I imagine we have.
01:21:06.720 --> 01:21:08.940
Appreciate you, Kenan, and Mark.
01:21:08.940 --> 01:21:09.850
Thank you all for being here.
01:21:09.850 --> 01:21:14.850
Thank you for presentation and your sporting willingness
01:21:15.010 --> 01:21:16.780
to field all these questions.
01:21:16.780 --> 01:21:17.613
Oh, it's a pleasure.
01:21:17.613 --> 01:21:19.528
Thank you for having us.
All right.
01:21:19.528 --> 01:21:24.528
Next up we have a panel of Tetra Tech, Xcel Energy,
01:21:25.927 --> 01:21:27.023
and the Sierra Club.
01:21:36.434 --> 01:21:39.691
Someone get her attention, is she the only one here?
01:21:39.691 --> 01:21:41.020
Is she the only one here?
01:21:41.020 --> 01:21:45.353
(people whispering over each other)
01:21:52.970 --> 01:21:55.020
Okay. Welcome.
01:21:55.020 --> 01:21:58.440
I think we're by, in terms of programming,
01:21:58.440 --> 01:22:02.310
we're gonna get as far through y'all's presentations
01:22:02.310 --> 01:22:07.310
as we can get, and aim for an 11:45 break time for lunch,
01:22:07.770 --> 01:22:12.683
and 12:30ish return.
01:22:13.956 --> 01:22:17.131
I learned my lesson on 30-minute lunches.
01:22:17.131 --> 01:22:22.000
Well, with that, we'll turn it over to Tetra Tech. Welcome.
01:22:22.000 --> 01:22:23.610
Great, great to be here.
01:22:23.610 --> 01:22:25.500
Hello, I'm Lark Lee with Tetra Tech,
01:22:25.500 --> 01:22:28.060
and I've been working in this demand side management
01:22:28.060 --> 01:22:30.000
for over 20 years.
01:22:30.000 --> 01:22:33.730
Specifically since 2013, I've worked very closely
01:22:33.730 --> 01:22:36.190
with Commission staff to oversee
01:22:36.190 --> 01:22:39.470
the IOU energy efficiency programs.
01:22:39.470 --> 01:22:42.917
So the eight investor-owned utilities we have.
01:22:42.917 --> 01:22:45.480
What I was quickly hopefully to do with you,
01:22:45.480 --> 01:22:47.220
I know time is of the essence here,
01:22:47.220 --> 01:22:50.570
but is dive a little bit deeper into those programs
01:22:50.570 --> 01:22:51.780
that ERCOT talked about
01:22:51.780 --> 01:22:54.210
to hopefully give you a little bit more insight
01:22:54.210 --> 01:22:58.110
of how they currently operate, what constraints,
01:22:58.110 --> 01:23:00.890
maybe some of your questions on how they can help
01:23:00.890 --> 01:23:01.840
keep the lights on.
01:23:01.840 --> 01:23:04.310
And maybe some of the ways we could use them more
01:23:04.310 --> 01:23:07.850
to help keep the lights on, but totally informational here.
01:23:07.850 --> 01:23:10.360
So just a little history,
01:23:10.360 --> 01:23:13.430
Texas was one of the first states that legislated
01:23:13.430 --> 01:23:15.200
energy efficiency goals.
01:23:15.200 --> 01:23:18.350
We did it very uniquely compared to other states,
01:23:18.350 --> 01:23:21.200
as we always had in mind using these programs
01:23:21.200 --> 01:23:22.970
to help address peak demand.
01:23:22.970 --> 01:23:26.440
So, whereas a lot of other states talk about KWH goals
01:23:26.440 --> 01:23:28.150
as a percent of annual sales,
01:23:28.150 --> 01:23:32.120
ours has always been to reduce peak demand growth.
01:23:32.120 --> 01:23:35.040
So the current goals have been set in 2013.
01:23:35.040 --> 01:23:40.040
There's a floor, 30% of growth, peak demand growth
01:23:40.950 --> 01:23:44.860
until that hits four tenths of 1% of summer peak.
01:23:44.860 --> 01:23:46.260
And then that's the new goal.
01:23:46.260 --> 01:23:48.240
Encore and Center Point have hit that.
01:23:48.240 --> 01:23:50.700
So they do have higher goals right now.
01:23:50.700 --> 01:23:52.780
Goals can never reduce. So that is a floor.
01:23:52.780 --> 01:23:55.150
So even if demand goes slows down,
01:23:55.150 --> 01:23:57.163
they're still held to that higher floor.
01:23:58.331 --> 01:24:01.100
The substantive rule that governs the programs
01:24:01.100 --> 01:24:06.100
was, the latest one was in 2012 coming into effect in 2013.
01:24:06.710 --> 01:24:09.230
There are some very specific things in there
01:24:09.230 --> 01:24:11.210
that we need to be aware of.
01:24:11.210 --> 01:24:15.380
Summer peak is very, it's defined very clearly.
01:24:15.380 --> 01:24:18.710
It only includes Monday to Friday non-holidays.
01:24:18.710 --> 01:24:21.500
I think about that when we think about winter storm Uri,
01:24:21.500 --> 01:24:23.574
that came in on the Sunday.
01:24:23.574 --> 01:24:27.370
Also winter peak is clearly defined as well.
01:24:27.370 --> 01:24:30.130
There's nothing addressing shoulder seasons.
01:24:30.130 --> 01:24:33.723
So that's something to keep in mind on that.
01:24:35.320 --> 01:24:37.170
Any questions on the history
01:24:37.170 --> 01:24:39.340
before we go into some specifics
01:24:40.560 --> 01:24:42.230
of their demand response programs?
01:24:42.230 --> 01:24:43.850
All right, next slide please.
01:24:43.850 --> 01:24:46.080
So this is a quick overview of what we've seen
01:24:46.080 --> 01:24:49.620
over the last five years from the programs.
01:24:49.620 --> 01:24:52.881
As you can see, 2020, I don't have the latest from 2021,
01:24:52.881 --> 01:24:56.940
did see the most amount and peak demand reductions
01:24:56.940 --> 01:24:58.140
from these programs.
01:24:58.140 --> 01:25:00.230
Slightly less than two thirds of this
01:25:00.230 --> 01:25:02.850
is from load management demand response offerings.
01:25:02.850 --> 01:25:06.612
About a third is from energy efficiency offerings.
01:25:06.612 --> 01:25:09.140
The difference in there, right,
01:25:09.140 --> 01:25:12.610
is that demand response requires annual participation.
01:25:12.610 --> 01:25:14.770
So this is about getting customers in,
01:25:14.770 --> 01:25:16.810
retaining them every year.
01:25:16.810 --> 01:25:18.820
Whereas the energy efficiency,
01:25:18.820 --> 01:25:21.290
when you're installing something more efficient,
01:25:21.290 --> 01:25:23.360
you should see that peak demand reduction
01:25:23.360 --> 01:25:25.160
not only in the year it's installed,
01:25:25.160 --> 01:25:27.553
but for the life of that equipment.
01:25:27.553 --> 01:25:29.019
Move your microphone a little closer?
01:25:29.019 --> 01:25:30.350
Yeah. Oh, I'm sorry.
01:25:30.350 --> 01:25:32.721
Usually I'm told I'm so loud I don't need a microphone.
01:25:32.721 --> 01:25:34.260
You can pull it closer to you as well.
01:25:34.260 --> 01:25:36.450
Okay. Is that better?
01:25:36.450 --> 01:25:38.118
Can you hear me better now? Okay.
01:25:38.118 --> 01:25:41.110
All right, so again,
01:25:41.110 --> 01:25:43.770
I'm gonna talk about next a little bit more
01:25:43.770 --> 01:25:48.030
on that 328, right in line with ERCOT's estimates,
01:25:48.030 --> 01:25:49.970
they kind of had a range over time,
01:25:49.970 --> 01:25:52.870
is what we had from 2020.
01:25:52.870 --> 01:25:54.240
And most of that is from
01:25:54.240 --> 01:25:55.807
commercial load management programs.
01:25:55.807 --> 01:25:57.180
The next couple of slides,
01:25:57.180 --> 01:25:59.110
I'm gonna give you a little more information
01:25:59.110 --> 01:26:00.810
on how the commercial programs
01:26:00.810 --> 01:26:03.069
and residential currently operate.
01:26:03.069 --> 01:26:06.210
I can talk about these programs all day.
01:26:06.210 --> 01:26:08.800
So any questions you have, I would love to answer,
01:26:08.800 --> 01:26:11.445
but there are also a lot of reference slides
01:26:11.445 --> 01:26:13.800
for future consumption.
01:26:13.800 --> 01:26:17.484
So moving onto the commercial load management slides.
01:26:17.484 --> 01:26:22.484
This is, we do have a slide later on for future reference
01:26:22.650 --> 01:26:23.760
that shows all the programs.
01:26:23.760 --> 01:26:26.680
We focus just on ERCOT today.
01:26:26.680 --> 01:26:30.500
The bottom line is, you know, Center Point, Encore.
01:26:30.500 --> 01:26:32.583
And then we have AEP and TNMP.
01:26:33.630 --> 01:26:35.800
One of the things that's worth noting
01:26:35.800 --> 01:26:37.310
on that participant count,
01:26:37.310 --> 01:26:42.310
is we have seen participation go up over the years.
01:26:42.340 --> 01:26:45.100
You know, we do a deep dive into these programs,
01:26:45.100 --> 01:26:47.985
our last one was in 2019, to really understand
01:26:47.985 --> 01:26:52.810
how the participants are responding, what the makeup is,
01:26:52.810 --> 01:26:56.060
how they're making sure that they curtail.
01:26:56.060 --> 01:26:58.760
So those are things I can go into more depth,
01:26:58.760 --> 01:27:02.020
but that, for the time, might not be something of interest
01:27:02.020 --> 01:27:02.863
at the moment.
01:27:04.870 --> 01:27:06.730
So moving on to residential.
01:27:06.730 --> 01:27:09.490
So residential is different than commercial.
01:27:09.490 --> 01:27:12.500
So when we came on board in 2013,
01:27:12.500 --> 01:27:14.390
the commercial load management programs
01:27:14.390 --> 01:27:15.570
were already very mature.
01:27:15.570 --> 01:27:18.040
They'd already been operating for over a decade.
01:27:18.040 --> 01:27:19.840
Residential was just starting.
01:27:19.840 --> 01:27:22.120
Center Point was the first one who started working
01:27:22.120 --> 01:27:26.120
with the reps to roll out residential demand response.
01:27:26.120 --> 01:27:31.120
And since then, Encore has really the largest program now.
01:27:31.190 --> 01:27:33.760
AEP did have a program for a couple of years.
01:27:33.760 --> 01:27:36.320
They had issues with the implementation contractor.
01:27:36.320 --> 01:27:38.330
That's why it's discontinued.
01:27:38.330 --> 01:27:40.880
I'm probably not gonna talk about El Paso's program
01:27:40.880 --> 01:27:43.157
at this particular juncture.
01:27:43.157 --> 01:27:46.840
One of the things that I think is important to note on this
01:27:46.840 --> 01:27:49.800
is in talking with all the utilities,
01:27:49.800 --> 01:27:52.370
there's significant interest in participating
01:27:52.370 --> 01:27:54.251
in these residential programs.
01:27:54.251 --> 01:27:57.620
They put a limit on how many people can,
01:27:57.620 --> 01:28:00.500
they turn people away from these programs.
01:28:00.500 --> 01:28:03.940
So that's something to keep in mind.
01:28:03.940 --> 01:28:05.089
And again, sorry.
01:28:05.089 --> 01:28:06.700
Yeah.
And again, why?
01:28:06.700 --> 01:28:11.700
Well, because of the way the rule works is,
01:28:13.850 --> 01:28:16.530
so why I talked about the legislative goal
01:28:16.530 --> 01:28:18.550
was set in peak demand,
01:28:18.550 --> 01:28:21.630
there is what, a unique Texas term,
01:28:21.630 --> 01:28:24.270
an energy efficiency conservation load factor.
01:28:24.270 --> 01:28:27.980
So we set an energy savings goal in relation to that.
01:28:27.980 --> 01:28:30.880
So we can't have everything coming from demand response.
01:28:30.880 --> 01:28:32.430
So they do have to keep some budget
01:28:32.430 --> 01:28:34.110
for that energy efficiency.
01:28:34.110 --> 01:28:36.750
So I think it's just in how they allocate across,
01:28:36.750 --> 01:28:40.760
what do they do in energy efficiency versus demand response.
01:28:40.760 --> 01:28:44.250
There's not been, it's an ongoing discussion.
01:28:44.250 --> 01:28:47.360
And I think the utilities can tell you this directly.
01:28:47.360 --> 01:28:49.163
They're never quite sure how much
01:28:49.163 --> 01:28:52.630
they should have in their portfolio from demand response.
01:28:52.630 --> 01:28:56.080
In some states, we have some specific guidance on that.
01:28:56.080 --> 01:28:58.617
We don't really, we don't have a limit in the rule
01:28:58.617 --> 01:29:00.630
other than the fact they have to get
01:29:00.630 --> 01:29:03.200
those energy efficiency savings too.
01:29:03.200 --> 01:29:04.150
Did that answer your question?
01:29:04.150 --> 01:29:07.330
Yeah, so we, just to kind of recapture that
01:29:07.330 --> 01:29:09.803
in another way, we tell them they have to do it,
01:29:09.803 --> 01:29:13.420
they have to do something and we set a floor,
01:29:13.420 --> 01:29:15.940
and then they are playing the odds
01:29:15.940 --> 01:29:20.940
in terms of what a rate case is gonna come back at them on.
01:29:21.840 --> 01:29:24.053
Well, (laughs)
01:29:26.010 --> 01:29:29.600
so rate cases are a little bit out of my area of expertise,
01:29:29.600 --> 01:29:31.139
but--
Is that economics?
01:29:31.139 --> 01:29:33.620
Is that the--
Yeah, I guess I would say,
01:29:33.620 --> 01:29:36.640
remember, so there is the floor
01:29:36.640 --> 01:29:40.330
on the what they have to do on the demand reduction,
01:29:40.330 --> 01:29:41.630
but within their budgets,
01:29:41.630 --> 01:29:44.280
which are baked into the rate case, right?
01:29:44.280 --> 01:29:46.100
So everything, these programs are funded
01:29:46.100 --> 01:29:49.020
through the energy efficiency cost recovery factor, right?
01:29:49.020 --> 01:29:51.740
So that is what you're alluding to.
01:29:51.740 --> 01:29:55.736
And so they have to meet both goals to keep everything
01:29:55.736 --> 01:29:58.910
part of their, get their bonuses, everything.
01:29:58.910 --> 01:30:02.420
So they do also have that energy efficiency goal.
01:30:02.420 --> 01:30:06.110
So they couldn't in fact get 100% from demand response
01:30:06.110 --> 01:30:08.120
and also meet that other goal
01:30:08.120 --> 01:30:11.040
and recoup the costs they need to under EECRF.
01:30:11.040 --> 01:30:15.000
So it would then be a very sticky situation for them.
01:30:15.000 --> 01:30:18.290
Okay, and you may have this in your later slides,
01:30:18.290 --> 01:30:21.150
but as I sort of see this system,
01:30:21.150 --> 01:30:22.100
you're kind of the,
01:30:24.166 --> 01:30:27.320
you're the sheriff, you go out and make sure
01:30:27.320 --> 01:30:30.930
that there's actually quality as a part of these systems.
01:30:30.930 --> 01:30:34.823
So as per the comments that I alluded to earlier on HVAC,
01:30:35.799 --> 01:30:40.799
and up-to-date and most technologically advanced
01:30:41.710 --> 01:30:44.223
inverter system, inverter-based systems,
01:30:45.730 --> 01:30:48.360
and they alluded to efficiencies in the winter,
01:30:48.360 --> 01:30:49.230
as well as the summer,
01:30:49.230 --> 01:30:52.811
just in its ability to regulate power use.
01:30:52.811 --> 01:30:57.811
What do you do to sort of, and how is that accounted for
01:30:58.255 --> 01:30:59.715
in these systems?
01:30:59.715 --> 01:31:00.886
Is it accounted for?
01:31:00.886 --> 01:31:01.803
Yep. Yep.
01:31:02.703 --> 01:31:04.750
So there's a couple of different parts
01:31:04.750 --> 01:31:07.086
to answer your question fully.
01:31:07.086 --> 01:31:10.660
So stepping back on the summer and winter,
01:31:10.660 --> 01:31:13.640
right now these programs only address summer peak.
01:31:13.640 --> 01:31:17.760
So they were not called when winter Uri hit.
01:31:17.760 --> 01:31:19.600
They're not set up that way.
01:31:19.600 --> 01:31:22.270
The way the current rule reads,
01:31:22.270 --> 01:31:26.030
because the utilities can only claim summer or winter peak.
01:31:26.030 --> 01:31:28.330
So they can't get people to participate
01:31:28.330 --> 01:31:30.930
without being able to offer an incentive.
01:31:30.930 --> 01:31:34.596
We believe that the current rule would allow
01:31:34.596 --> 01:31:38.210
there to be a separate winter peak program too.
01:31:38.210 --> 01:31:42.010
So that's one aspect of your question.
01:31:42.010 --> 01:31:44.900
The second is my role as the sheriff.
01:31:44.900 --> 01:31:48.560
This is where we really do have a lot of confidence
01:31:48.560 --> 01:31:50.280
in the savings from these programs.
01:31:50.280 --> 01:31:53.720
So I will be honest with you, when I started in 2013,
01:31:53.720 --> 01:31:57.010
there was no consistency in how people were coming up
01:31:57.010 --> 01:32:00.120
with how these demand reductions calculated.
01:32:00.120 --> 01:32:00.953
Now there is.
01:32:02.054 --> 01:32:03.000
We have a centralized document
01:32:03.000 --> 01:32:04.530
called the Technical Reference Manual,
01:32:04.530 --> 01:32:06.410
which I won't geek out too much on you,
01:32:06.410 --> 01:32:10.300
but it does say this is a baseline you have to set
01:32:10.300 --> 01:32:12.070
for commercial programs.
01:32:12.070 --> 01:32:14.950
It's six out of the last 10 hottest days.
01:32:14.950 --> 01:32:17.430
I also qualified non-holidays, et cetera.
01:32:17.430 --> 01:32:20.366
For residential, it's three out of the five.
01:32:20.366 --> 01:32:23.050
We get a interval meter data
01:32:23.050 --> 01:32:25.130
for a census of those participants.
01:32:25.130 --> 01:32:27.640
We calculate it independently.
01:32:27.640 --> 01:32:30.420
After doing those with a few years with the utilities,
01:32:30.420 --> 01:32:34.440
they now, you know, we've resolved any differences
01:32:34.440 --> 01:32:36.360
in the way they calculate it, both of us.
01:32:36.360 --> 01:32:40.085
So we have a lot of confidence in the calculations
01:32:40.085 --> 01:32:42.810
that they pay incentives for.
01:32:42.810 --> 01:32:45.700
There are no penalties in these current programs.
01:32:45.700 --> 01:32:47.820
We also require a test event
01:32:47.820 --> 01:32:51.460
so that we, again, really know what people can curtail
01:32:52.599 --> 01:32:53.675
and see that that's there.
01:32:53.675 --> 01:32:56.140
We ask them to modify, you know, consider contracts
01:32:56.140 --> 01:32:58.197
based on the results of that test event.
01:32:58.197 --> 01:33:00.570
So there hasn't been a lot of done
01:33:00.570 --> 01:33:02.733
to increase our confidence
01:33:02.733 --> 01:33:04.650
that those savings are really there.
01:33:04.650 --> 01:33:07.490
So is it fair to say you would have mechanisms
01:33:07.490 --> 01:33:10.436
if we enhanced, and again,
01:33:10.436 --> 01:33:14.110
if we're supplying capital for this effort
01:33:14.110 --> 01:33:17.135
as approved in rates, rate cases,
01:33:17.135 --> 01:33:20.390
there are mechanisms and that you already employ
01:33:20.390 --> 01:33:21.980
and that you could enhance
01:33:21.980 --> 01:33:25.240
to ensure that latest developed available technology
01:33:25.240 --> 01:33:28.320
is being employed or at least valued differently,
01:33:28.320 --> 01:33:32.660
more enhanced value within those systems
01:33:32.660 --> 01:33:34.140
that the utilities could recover for.
01:33:34.140 --> 01:33:35.920
Just so that the Commission could have a view
01:33:35.920 --> 01:33:37.250
that look, no, we are sure
01:33:37.250 --> 01:33:39.920
that we are getting what we pay for here
01:33:39.920 --> 01:33:41.880
and its latest available today.
01:33:41.880 --> 01:33:42.713
Correct.
01:33:42.713 --> 01:33:45.470
So I don't even, my last slide just literally walks
01:33:45.470 --> 01:33:48.737
you through the history of the EMNV
01:33:48.737 --> 01:33:50.845
because I wasn't even gonna talk to that.
01:33:50.845 --> 01:33:52.970
My point was there isn't infrastructure in place
01:33:52.970 --> 01:33:56.040
if it's desire to expand these programs,
01:33:56.040 --> 01:33:59.200
there's an infrastructure to support that happening
01:33:59.200 --> 01:34:01.650
in a way that you can have confidence
01:34:01.650 --> 01:34:03.008
those savings are there.
01:34:03.008 --> 01:34:03.841
Okay.
01:34:06.570 --> 01:34:10.120
I was told to keep it to 10 minutes, so, I'm gonna try to,
01:34:10.120 --> 01:34:11.481
so that's it.
01:34:11.481 --> 01:34:13.156
I mean, that was the only point I was gonna make
01:34:13.156 --> 01:34:14.880
is just letting you all know
01:34:14.880 --> 01:34:17.830
kind of the background that supported this infrastructure
01:34:17.830 --> 01:34:20.370
and just the fact that everything is in place.
01:34:20.370 --> 01:34:22.580
We already, for energy efficiency measures,
01:34:22.580 --> 01:34:25.040
we do already have winter peak.
01:34:25.040 --> 01:34:28.960
So expanding out the current demand response protocols
01:34:28.960 --> 01:34:31.000
to address winter peak versus summer,
01:34:31.000 --> 01:34:33.550
again, our only limitation under the current rule
01:34:33.550 --> 01:34:37.260
is we're really constrained in being able to do anything
01:34:37.260 --> 01:34:38.170
in shoulder seasons.
01:34:38.170 --> 01:34:40.230
So that would be something that would need to be addressed,
01:34:40.230 --> 01:34:45.230
but otherwise I think we have a good infrastructure in place
01:34:45.750 --> 01:34:48.223
if it's so desired to expand these offerings.
01:34:49.120 --> 01:34:51.880
So I think two key points being expanding,
01:34:51.880 --> 01:34:55.280
opportunities to expand and improve.
01:34:55.280 --> 01:34:57.820
Accountability, or--
Bang bang for your buck.
01:34:57.820 --> 01:34:59.624
Yeah.
Value delivered
01:34:59.624 --> 01:35:01.140
for dollar spent, is that fair?
01:35:01.140 --> 01:35:03.130
Can I ask something? This is, uh.
01:35:03.130 --> 01:35:04.250
Yeah.
01:35:04.250 --> 01:35:06.688
I just wonder if we get demand response
01:35:06.688 --> 01:35:11.688
at ERCOT right, should the transmission companies
01:35:12.950 --> 01:35:15.130
focus on energy efficiency?
01:35:15.130 --> 01:35:18.770
So that has, that is a long-standing
01:35:18.770 --> 01:35:20.400
debate and discussion.
01:35:20.400 --> 01:35:24.470
Sorry.
So we did meet, (laughs)
01:35:24.470 --> 01:35:29.380
we did meet with ERCOT in 2019 and we talked about that,
01:35:29.380 --> 01:35:31.161
of when they come in.
01:35:31.161 --> 01:35:34.890
I, my personal opinion from that take away
01:35:34.890 --> 01:35:37.173
was that at that time,
01:35:38.061 --> 01:35:41.630
ERCOT did see value in having those programs as a resource.
01:35:41.630 --> 01:35:43.460
So we did work to make some improvements.
01:35:43.460 --> 01:35:46.601
Like they made the comment, not all that utilities,
01:35:46.601 --> 01:35:47.930
some of them had an hour advanced notification
01:35:47.930 --> 01:35:49.642
versus 30 minutes.
01:35:49.642 --> 01:35:51.340
Hey guys, we need to, everybody's gotta be 30 minutes.
01:35:51.340 --> 01:35:54.090
So I would say
01:35:54.090 --> 01:35:59.090
that it's an ongoing debate.
Thank you.
01:36:00.410 --> 01:36:02.554
Very, very important question.
01:36:02.554 --> 01:36:04.500
It is, yeah.
01:36:04.500 --> 01:36:05.800
Very important question.
01:36:07.550 --> 01:36:10.940
All right, thank you very much, Ms. Lee.
01:36:10.940 --> 01:36:12.003
Xcel Energy.
01:36:14.750 --> 01:36:16.930
Good morning. My name is Bill Grant.
01:36:16.930 --> 01:36:19.580
I'm a regional vice president for a regulatory
01:36:19.580 --> 01:36:22.200
for the SPS operating company.
01:36:22.200 --> 01:36:24.963
A little bit about my background before we get in,
01:36:24.963 --> 01:36:27.560
I've had various jobs with Xcel Energy,
01:36:27.560 --> 01:36:29.620
the service company, plus SPS,
01:36:29.620 --> 01:36:33.940
but I've seen all sides of the demand response
01:36:33.940 --> 01:36:35.591
and the distributed energy.
01:36:35.591 --> 01:36:38.580
For seven years, I was director of power operations
01:36:38.580 --> 01:36:41.270
doing all the real time dispatch and marketing
01:36:41.270 --> 01:36:45.207
for Xcel Energy company for all of our operating companies.
01:36:45.207 --> 01:36:47.527
And that includes the MISO market.
01:36:47.527 --> 01:36:49.620
One utility that's not in a market,
01:36:49.620 --> 01:36:51.850
public service Colorado in the SPS system,
01:36:51.850 --> 01:36:54.303
that's in the Southwest power pool market.
01:36:55.170 --> 01:36:58.640
Also, I was the manager of the transmission control center
01:36:58.640 --> 01:36:59.473
for several years.
01:36:59.473 --> 01:37:02.210
So I've seen that side of the operation
01:37:02.210 --> 01:37:05.620
and how these resources actually meet
01:37:05.620 --> 01:37:10.050
with our emergency plans and the other issues we have.
01:37:10.050 --> 01:37:12.580
And currently, and I've been doing regional policy
01:37:12.580 --> 01:37:14.450
all during this time, and also now
01:37:14.450 --> 01:37:16.200
I'm over the regulatory department.
01:37:17.118 --> 01:37:18.526
So I want to get started by talking about SPS
01:37:18.526 --> 01:37:22.647
and what makes us different than ERCOT.
01:37:22.647 --> 01:37:25.890
We're a fully bundled utility and not in the ERCOT system.
01:37:25.890 --> 01:37:29.520
Most of our programs that we offer for a demand response
01:37:29.520 --> 01:37:31.000
are tariff driven.
01:37:31.000 --> 01:37:35.230
And I've seen, like I said, I was overall,
01:37:35.230 --> 01:37:36.140
three operating companies.
01:37:36.140 --> 01:37:39.010
So each company was different with their resources
01:37:39.010 --> 01:37:42.145
and the offerings they made, and the tariffs.
01:37:42.145 --> 01:37:44.210
And a lot of it had to do with their capacity position.
01:37:44.210 --> 01:37:46.540
So a lot of the pricing of the demand response
01:37:46.540 --> 01:37:48.931
was due to their capacity positions.
01:37:48.931 --> 01:37:51.990
For example, do I need some quick-start resources,
01:37:51.990 --> 01:37:54.770
we'd have a 10 minute product versus a one hour product.
01:37:54.770 --> 01:37:58.679
And our pricing was what type of resource where we avoiding?
01:37:58.679 --> 01:38:00.710
And we would make those.
01:38:00.710 --> 01:38:04.170
Our NSP system has a lot of demand response,
01:38:04.170 --> 01:38:06.658
well over a thousand megawatts of demand response,
01:38:06.658 --> 01:38:10.270
the SPS system, we did not have as much.
01:38:10.270 --> 01:38:12.960
Our capacity position is a little bit different.
01:38:12.960 --> 01:38:15.010
A lot of our companies do have
01:38:15.844 --> 01:38:16.677
their own sustainability goals
01:38:16.677 --> 01:38:20.160
where they have the generation behind the meter,
01:38:20.160 --> 01:38:21.990
but they're not participating in the market
01:38:21.990 --> 01:38:22.823
for the most part.
01:38:22.823 --> 01:38:25.490
They're offsetting the retail rates.
01:38:25.490 --> 01:38:28.110
And then, you know, we have some customers,
01:38:28.110 --> 01:38:31.340
when they produce excess, they're getting paid the L and P.
01:38:31.340 --> 01:38:33.540
So we do have some dump behind the meter generation,
01:38:33.540 --> 01:38:35.560
but not as much participating in the market
01:38:35.560 --> 01:38:39.600
as offsetting their load they're taking from the utility.
01:38:39.600 --> 01:38:44.600
On our offerings for demand response,
01:38:45.130 --> 01:38:48.390
we do have the program
01:38:48.390 --> 01:38:51.350
where we interrupt the air conditioners on days,
01:38:51.350 --> 01:38:52.810
but we're not limited to peak days,
01:38:52.810 --> 01:38:54.950
where we can actually utilize that program
01:38:54.950 --> 01:38:56.280
when we see high prices,
01:38:56.280 --> 01:38:58.640
it's not necessarily a reliability issue.
01:38:58.640 --> 01:39:01.130
We can actually do it to avoid pricing.
01:39:01.130 --> 01:39:06.130
So the whole concept is to minimize cross subsidization
01:39:07.450 --> 01:39:08.900
by offering the payments,
01:39:08.900 --> 01:39:11.840
but also utilizing that when, you know,
01:39:11.840 --> 01:39:14.220
when it benefits all the other customers on fuel.
01:39:14.220 --> 01:39:15.900
Are your customers auto-enrolled in that?
01:39:15.900 --> 01:39:17.390
Or they, you have to opt into that?
01:39:17.390 --> 01:39:19.180
They have to opt into that.
01:39:19.180 --> 01:39:22.069
One of the things I will tell you that I did learn,
01:39:22.069 --> 01:39:24.080
you know, we did learn the hard way
01:39:24.080 --> 01:39:26.730
is when you're doing resource planning,
01:39:26.730 --> 01:39:30.120
one of the things you need is a longer commitment
01:39:30.120 --> 01:39:33.040
from customers that are going to participate
01:39:33.040 --> 01:39:35.910
in demand response
01:39:35.910 --> 01:39:38.560
because we used to have a very robust system
01:39:38.560 --> 01:39:42.040
where we had over 350 megawatts in the SPS system
01:39:42.040 --> 01:39:43.910
that participated in demand response.
01:39:43.910 --> 01:39:46.200
At the time, we only had a one-year notice to get off.
01:39:46.200 --> 01:39:50.257
If you can imagine 350 megawatts given you one year's notice
01:39:50.257 --> 01:39:55.257
because the price of natural, price of oil spiked up,
01:39:56.500 --> 01:39:58.040
we had to scramble the very next year
01:39:58.040 --> 01:39:59.910
to get resources in our resource mix.
01:39:59.910 --> 01:40:02.350
So, you know, when we do offer these programs,
01:40:02.350 --> 01:40:04.770
we do at least ask for a three-year commitment
01:40:04.770 --> 01:40:07.160
so it fits into our resource planning,
01:40:07.160 --> 01:40:12.160
and that we're not left in an emergency response
01:40:12.660 --> 01:40:15.403
to somebody say, hey I don't want to be interrupted anymore.
01:40:15.403 --> 01:40:18.400
But another thing that we have coming on
01:40:18.400 --> 01:40:20.587
is we're in the southwest power pool market.
01:40:20.587 --> 01:40:25.587
And what that does, that allows our load to use
01:40:26.380 --> 01:40:28.310
even third-party aggregators,
01:40:28.310 --> 01:40:30.910
if they want to, to participate in the market.
01:40:30.910 --> 01:40:34.640
Now that's unique because we still have the responsibility
01:40:34.640 --> 01:40:35.750
to serve that load,
01:40:35.750 --> 01:40:38.740
but we don't necessarily have the communication
01:40:38.740 --> 01:40:41.160
with the entity that might be offering this load up.
01:40:41.160 --> 01:40:43.630
So some of the things we've been seeing lately
01:40:43.630 --> 01:40:46.690
is the programs are not sizeable yet.
01:40:46.690 --> 01:40:49.970
I can say we're probably less than 10 megawatts total,
01:40:49.970 --> 01:40:50.803
but it's growing.
01:40:50.803 --> 01:40:52.270
We're getting more and more people
01:40:52.270 --> 01:40:54.100
signed up for this program.
01:40:54.100 --> 01:40:56.150
My fear is, is as it grows,
01:40:56.150 --> 01:40:57.710
if we don't know when that,
01:40:57.710 --> 01:41:01.380
when our load is gonna be offered by another party,
01:41:01.380 --> 01:41:03.520
into a market to be interrupted,
01:41:03.520 --> 01:41:06.180
that impacts how we bid our load into the market.
01:41:06.180 --> 01:41:08.860
And we start getting concerned.
01:41:08.860 --> 01:41:10.581
So for those programs,
01:41:10.581 --> 01:41:13.300
we're not opposed to people doing that,
01:41:13.300 --> 01:41:16.610
but we think communication with the host utility
01:41:16.610 --> 01:41:19.350
that's responsible for serving that load is critical
01:41:19.350 --> 01:41:22.980
so that we can manage the load pricing.
01:41:22.980 --> 01:41:27.639
So kind of to summarize, we offer some of our resources
01:41:27.639 --> 01:41:32.130
through a tariff, and if people want to participate in that,
01:41:32.130 --> 01:41:34.670
a lot of our companies do have behind the meter generation,
01:41:34.670 --> 01:41:38.690
but they're doing it for their own sustainability goals.
01:41:38.690 --> 01:41:40.680
And they're also offsetting, you know,
01:41:40.680 --> 01:41:43.058
for the most part, they're offsetting our tariff charges.
01:41:43.058 --> 01:41:46.000
And then, but we are in a market.
01:41:46.000 --> 01:41:48.930
And FERC order 222 was mentioned before.
01:41:48.930 --> 01:41:52.390
So SPP is in the middle of doing their compliance filing.
01:41:52.390 --> 01:41:54.360
We've been working on that team
01:41:54.360 --> 01:41:56.130
to help with the compliance filing on that.
01:41:56.130 --> 01:41:58.740
So it's yet to be determined how many people
01:41:58.740 --> 01:42:00.530
will actually utilize that program
01:42:00.530 --> 01:42:02.892
other than offsetting their tariff load,
01:42:02.892 --> 01:42:06.330
but we have to, you know, we have to get the rules right
01:42:06.330 --> 01:42:08.540
to where people can participate if they want to.
01:42:08.540 --> 01:42:10.710
But, you know, the economics is gonna drive
01:42:10.710 --> 01:42:12.150
whether they just drive to a market
01:42:12.150 --> 01:42:16.130
or whether they still offset their load consumption
01:42:16.130 --> 01:42:17.420
from the host utility.
01:42:17.420 --> 01:42:19.120
And the other thing we have going on
01:42:19.120 --> 01:42:22.110
is third-party aggregation into demand response.
01:42:22.110 --> 01:42:25.285
And as I said earlier, you know,
01:42:25.285 --> 01:42:28.450
we would hope the Commission, you know,
01:42:28.450 --> 01:42:32.980
might look at helping us out with some rules around that,
01:42:32.980 --> 01:42:35.200
to where we have information flowing
01:42:35.200 --> 01:42:37.440
to where we can manage our load.
01:42:37.440 --> 01:42:39.885
It's not being subsidized by other customers as well.
01:42:39.885 --> 01:42:42.100
So that's kind of a quick summary
01:42:42.100 --> 01:42:46.160
of where we're at and why we're different than ERCOT load,
01:42:46.160 --> 01:42:47.510
'cause we're fully bundled.
01:42:50.610 --> 01:42:52.270
Mr. Grant, thank you, sir.
01:42:52.270 --> 01:42:54.870
Question for you.
01:42:54.870 --> 01:42:56.570
On, in terms of the way
01:42:58.078 --> 01:43:03.078
SPP manages their system for capacity,
01:43:03.470 --> 01:43:08.470
can you qualify the distributed resources, DG,
01:43:10.510 --> 01:43:12.923
for a capacity bid?
01:43:13.890 --> 01:43:18.690
When you put in your resources for capacity,
01:43:18.690 --> 01:43:21.310
that 12% in SPP,
01:43:21.310 --> 01:43:26.023
can you use aggregated DR as a part of that?
01:43:27.020 --> 01:43:31.150
Yes, if we have a distributed resource
01:43:31.150 --> 01:43:34.200
that we know that we can interrupt,
01:43:34.200 --> 01:43:37.077
we have two choices in SPP.
01:43:37.077 --> 01:43:40.250
If we're wanting to be able to dispatch it,
01:43:40.250 --> 01:43:42.420
it goes into just like a generator.
01:43:42.420 --> 01:43:43.730
It goes into a generator bucket.
01:43:43.730 --> 01:43:46.270
But if it shows up as reduced load,
01:43:46.270 --> 01:43:49.030
we can count it as reduced load for our load reporting
01:43:49.030 --> 01:43:52.010
for the purposes of capacity integration.
01:43:52.010 --> 01:43:54.120
So, if I have an interruptible product
01:43:54.120 --> 01:43:56.110
that I can interrupt across peak,
01:43:56.110 --> 01:43:57.820
I would reduce my load requirement
01:43:57.820 --> 01:43:58.990
for the purposes of meeting
01:43:58.990 --> 01:44:01.673
my 12% planning capacity requirement.
01:44:01.673 --> 01:44:03.145
Okay, good.
01:44:03.145 --> 01:44:08.145
Given one, FERC order 2222, and now new federal policy goals
01:44:10.581 --> 01:44:12.680
that seem to be happening now,
01:44:12.680 --> 01:44:16.800
again, the federal renewable portfolio standard,
01:44:16.800 --> 01:44:20.980
I'll just call it that, for 2035.
01:44:20.980 --> 01:44:22.733
I think that's a kind way of putting it.
01:44:24.266 --> 01:44:29.266
What do you think happens in terms of DG, DR,
01:44:33.170 --> 01:44:37.510
what pressures is your market gonna come under
01:44:37.510 --> 01:44:40.330
to harness that energy again in the near term?
01:44:40.330 --> 01:44:42.680
'Cause that's a pretty short fuse on goals
01:44:42.680 --> 01:44:43.800
in terms to meet that.
01:44:43.800 --> 01:44:47.910
And what does that look like for that capacity target
01:44:47.910 --> 01:44:51.840
that the system has to, you know, one, adopt
01:44:51.840 --> 01:44:55.413
and utilize to offset intermittency?
01:44:55.413 --> 01:44:56.900
That's a good question.
01:44:56.900 --> 01:44:59.160
And one of the things we're changing our methodology
01:44:59.160 --> 01:45:01.270
for the accreditation of renewable resources.
01:45:01.270 --> 01:45:04.070
Now we're gonna an ALLC process,
01:45:04.070 --> 01:45:06.890
which actually would consider the saturation points
01:45:06.890 --> 01:45:10.480
of specific resources and the, you know,
01:45:10.480 --> 01:45:12.990
the probability of it being there on a peak day.
01:45:12.990 --> 01:45:14.899
So we're changing the way we're accrediting.
01:45:14.899 --> 01:45:16.950
A lot of studies going on
01:45:16.950 --> 01:45:18.450
as far as the reliability concerns,
01:45:18.450 --> 01:45:21.150
how much spinning mass you have to have on the system.
01:45:22.290 --> 01:45:24.070
One of the things we've done recently
01:45:24.070 --> 01:45:27.070
is on a plant, of one of our larger plants,
01:45:27.070 --> 01:45:30.380
when we're not running as a generator, we've decoupled,
01:45:30.380 --> 01:45:33.220
and we're able to run it as a synchronous condenser.
01:45:33.220 --> 01:45:37.310
Ideas like that help us with the voltage control
01:45:37.310 --> 01:45:40.430
and the support that inverted base generation
01:45:40.430 --> 01:45:41.990
does not give us.
01:45:41.990 --> 01:45:44.090
So, you know, a lot of different things
01:45:44.090 --> 01:45:45.500
that SPP is struggling with
01:45:45.500 --> 01:45:49.180
as far as a lot of companies meeting their goals
01:45:49.180 --> 01:45:50.840
and we cover 16 states.
01:45:50.840 --> 01:45:52.680
So what's unique is not every state
01:45:52.680 --> 01:45:54.940
has the same goals at the same time.
01:45:54.940 --> 01:45:57.390
So cost allocation is always a consideration
01:45:57.390 --> 01:46:00.270
when you're, if you have a state like New Mexico,
01:46:00.270 --> 01:46:03.867
where we're supposed to be 50% by 30,
01:46:03.867 --> 01:46:08.434
supposed to be 80% by 40, and completely carbon-free by 45.
01:46:08.434 --> 01:46:11.440
Well, that's gonna take either a lot of different resources
01:46:11.440 --> 01:46:13.310
or even transmission in there.
01:46:13.310 --> 01:46:15.480
And the other states are saying, why am I paying for that?
01:46:15.480 --> 01:46:18.770
So we have a lot of issues like that we're dealing with.
01:46:18.770 --> 01:46:23.770
And so, to, first steps are,
01:46:25.710 --> 01:46:27.220
what are the top resources?
01:46:27.220 --> 01:46:30.320
How much can we handle? We're doing studies on that.
01:46:30.320 --> 01:46:32.745
Changing the accreditation methodology.
01:46:32.745 --> 01:46:36.820
And also the tools that real-time operators have
01:46:36.820 --> 01:46:39.790
like dynamic stability analysis real-time,
01:46:39.790 --> 01:46:44.460
which is a tool that we haven't always had at our disposal.
01:46:44.460 --> 01:46:46.761
So we can actually recognize voltage,
01:46:46.761 --> 01:46:49.530
areas on our system that have voltage concerns
01:46:49.530 --> 01:46:51.422
and other issues as we transition
01:46:51.422 --> 01:46:54.913
into a different type of resource.
01:46:56.063 --> 01:47:01.063
So Mr. Grant, just to kind of understand, you know,
01:47:01.266 --> 01:47:05.410
you have a lot of wind on your, in your portfolio, right?
01:47:05.410 --> 01:47:08.290
You recently added significant amount of wind?
01:47:08.290 --> 01:47:09.123
That's correct.
01:47:09.123 --> 01:47:11.710
We're anticipating energy served to be around
01:47:11.710 --> 01:47:14.283
the 45% range for 2021.
01:47:15.233 --> 01:47:19.980
So we have on a 6,000 megawatt transmission system,
01:47:19.980 --> 01:47:22.000
but also we're responsible
01:47:22.000 --> 01:47:23.840
for about 4,100 megawatts of that.
01:47:23.840 --> 01:47:28.683
We have close to 3,000 megawatts of wind on our system.
01:47:29.649 --> 01:47:30.482
I'm just trying to understand,
01:47:30.482 --> 01:47:33.010
'cause I know Mr. McAdams asked some questions
01:47:33.010 --> 01:47:35.120
about federal de-carbonization,
01:47:35.120 --> 01:47:39.023
and how does that play into FERC order 2222?
01:47:40.310 --> 01:47:41.710
That's been very controversial.
01:47:41.710 --> 01:47:45.220
I know following the issue several years ago,
01:47:45.220 --> 01:47:46.634
I think was challenged.
01:47:46.634 --> 01:47:50.053
So I'm just trying to understand the pressures
01:47:50.053 --> 01:47:52.464
that you're facing, since--
01:47:52.464 --> 01:47:56.070
Well, when it comes to FERC order 2222,
01:47:56.070 --> 01:47:59.260
one of the problems we're facing is the RTLs
01:47:59.260 --> 01:48:02.233
have no jurisdiction over the distribution companies.
01:48:02.233 --> 01:48:06.019
So FERC order 2222 puts a lot of requirements
01:48:06.019 --> 01:48:07.990
on the distribution companies
01:48:07.990 --> 01:48:10.530
that FERC does not have authority over.
01:48:10.530 --> 01:48:15.530
And SPP only has their system model
01:48:16.450 --> 01:48:18.270
to the transmission nodal market.
01:48:18.270 --> 01:48:21.290
They do not even see into the distribution system.
01:48:21.290 --> 01:48:25.180
So when you're talking about putting distribution resources
01:48:25.180 --> 01:48:27.095
that can participate in a market,
01:48:27.095 --> 01:48:30.160
first of all, you know, SPP is not gonna see it.
01:48:30.160 --> 01:48:31.220
We're gonna have to bring it,
01:48:31.220 --> 01:48:35.010
a telemeter back to the transmission system
01:48:35.010 --> 01:48:36.940
so they can even see it.
01:48:36.940 --> 01:48:38.600
What does that do changing the flows
01:48:38.600 --> 01:48:39.780
on the distribution system?
01:48:39.780 --> 01:48:41.640
We're talking about all those issues right now
01:48:41.640 --> 01:48:43.700
on our task force.
01:48:43.700 --> 01:48:46.230
And one of the concerns we have
01:48:46.230 --> 01:48:48.050
is do the distribution companies even have
01:48:48.050 --> 01:48:51.370
the tools necessary to be able to enable,
01:48:51.370 --> 01:48:53.950
and we don't even know how big of a, you know,
01:48:53.950 --> 01:48:55.920
I always like to say, bring me a bread box.
01:48:55.920 --> 01:48:58.380
We don't even know how big this bread box is gonna be yet,
01:48:58.380 --> 01:49:00.770
and how much participation we're gonna have.
01:49:00.770 --> 01:49:03.390
So there's a potential of a lot of spend out there,
01:49:03.390 --> 01:49:05.653
and we might not get that much participation.
01:49:06.919 --> 01:49:09.002
A lot of those issues out there.
01:49:09.002 --> 01:49:11.250
But, the main point, to answer your question
01:49:11.250 --> 01:49:15.560
is without having the, I kind of halfway consider it
01:49:15.560 --> 01:49:17.718
an unfunded mandate.
01:49:17.718 --> 01:49:20.730
FERC went in and said, hey, you can have generation
01:49:20.730 --> 01:49:21.830
on the distribution system
01:49:21.830 --> 01:49:23.920
that participates in the wholesale markets.
01:49:23.920 --> 01:49:26.470
They didn't necessarily say how to accomplish that.
01:49:28.910 --> 01:49:31.060
I heard you say three, SPP was working on
01:49:31.060 --> 01:49:32.070
or struggling with three things,
01:49:32.070 --> 01:49:34.800
saturation point, discount factor for,
01:49:34.800 --> 01:49:37.730
saturation point of each type of generating asset,
01:49:37.730 --> 01:49:40.400
discount factor to apply for each count,
01:49:40.400 --> 01:49:42.350
type of generating asset
01:49:42.350 --> 01:49:46.960
based on estimates of how much that generating asset
01:49:46.960 --> 01:49:51.298
would provide during certain hours when power's needed,
01:49:51.298 --> 01:49:55.005
and minimum rotating mass for voltage support.
01:49:55.005 --> 01:49:56.320
Yes.
01:49:56.320 --> 01:50:01.320
It sounds like, to Commissioner McAdams' point,
01:50:01.406 --> 01:50:03.550
y'all are struggling with the same challenge
01:50:03.550 --> 01:50:06.200
of reconciling renewable with a reliable that we are.
01:50:06.200 --> 01:50:09.390
When you, when you get the answer to those three,
01:50:09.390 --> 01:50:12.070
will you please send them our way?
01:50:12.070 --> 01:50:14.300
Well, that is the one thing that our industry
01:50:14.300 --> 01:50:17.230
needs to do a better job of is, you know,
01:50:17.230 --> 01:50:19.100
you have a lot of people that didn't even think
01:50:19.100 --> 01:50:21.470
we can incorporate the amount of renewables we have today,
01:50:21.470 --> 01:50:25.390
but, you know, we've been able to do that.
01:50:25.390 --> 01:50:27.850
And, and it's a great testament to our industry.
01:50:27.850 --> 01:50:32.235
However, I do think there is with our current technology
01:50:32.235 --> 01:50:34.674
and emphasis on the current technology,
01:50:34.674 --> 01:50:37.750
we can put ourselves into a place
01:50:37.750 --> 01:50:39.210
of unknown operating conditions
01:50:39.210 --> 01:50:41.880
if we don't do a lot more studying,
01:50:41.880 --> 01:50:45.360
and we don't get a handle on if there are limitations.
01:50:45.360 --> 01:50:46.300
And I'm not saying there are.
01:50:46.300 --> 01:50:47.930
But I'm just saying with the current technology,
01:50:47.930 --> 01:50:49.310
there are limitations.
01:50:49.310 --> 01:50:51.840
Yeah. We've found those in April and June
01:50:51.840 --> 01:50:53.507
in ERCOT.
Yes, sir.
01:50:54.348 --> 01:50:55.620
Questions?
01:50:55.620 --> 01:50:59.130
One last question in terms of the technical aspects,
01:50:59.130 --> 01:51:01.510
when you incorporate these resources,
01:51:01.510 --> 01:51:03.303
and I'm talking about DR, DG,
01:51:04.490 --> 01:51:09.490
resources onto your system, do you require that technology
01:51:09.940 --> 01:51:12.333
to be telemetrically controlled?
01:51:13.630 --> 01:51:16.710
If we count it towards our resource plan and stuff,
01:51:16.710 --> 01:51:18.740
we have to have control at the control center.
01:51:18.740 --> 01:51:21.410
We have to be able to interrupt it and we do test it
01:51:21.410 --> 01:51:23.840
to make sure we can interrupt it.
01:51:23.840 --> 01:51:26.790
SPP has very hard requirements.
01:51:26.790 --> 01:51:30.094
If it has nothing to do with utility and you have a resource
01:51:30.094 --> 01:51:31.960
that wants to participate in the market,
01:51:31.960 --> 01:51:33.340
they have to meet all the requirements
01:51:33.340 --> 01:51:34.790
that a generator does.
01:51:34.790 --> 01:51:36.980
They have to have the real-time telemetering,
01:51:36.980 --> 01:51:38.770
they have to be able to send a signal back,
01:51:38.770 --> 01:51:40.100
and they have to prove that they can react
01:51:40.100 --> 01:51:40.990
to a dispatch signal.
01:51:40.990 --> 01:51:42.990
So it is valued differently.
01:51:42.990 --> 01:51:43.823
Yes.
01:51:47.150 --> 01:51:48.390
Okay. Thank you.
01:51:50.790 --> 01:51:52.490
All right. Thank you, Mr. Grant.
01:51:53.500 --> 01:51:55.160
Mr. Reed?
01:51:55.160 --> 01:51:56.340
Thank you. Pleasure to be here.
01:51:56.340 --> 01:51:58.600
Cyrus Reed, Lonestar Chapter of the Sierra Club.
01:51:58.600 --> 01:52:02.120
I'm gonna be covering quite a bit today.
01:52:02.120 --> 01:52:04.510
So I'm the conservation director for the state Chapter
01:52:04.510 --> 01:52:06.090
of the Sierra Club.
01:52:06.090 --> 01:52:09.120
We have about 30,000 members. Most of them are in ERCOT.
01:52:09.120 --> 01:52:12.380
If you can go to the next slide, I was told not to advocate,
01:52:12.380 --> 01:52:14.780
but I'm gonna advocate anyway, on this first slide.
01:52:14.780 --> 01:52:15.917
That's never stopped you before.
01:52:15.917 --> 01:52:17.876
(group laughs)
01:52:17.876 --> 01:52:19.930
So first thing to say is, thank you.
01:52:19.930 --> 01:52:21.840
Thank you for looking at the demand side.
01:52:21.840 --> 01:52:25.046
The demand side is where residential consumers
01:52:25.046 --> 01:52:27.330
and, you know, Sierra Club members
01:52:27.330 --> 01:52:29.040
tend to be resonant with consumers.
01:52:29.040 --> 01:52:30.930
That's where we are. It's half of the equation.
01:52:30.930 --> 01:52:32.350
So I do appreciate.
01:52:32.350 --> 01:52:35.370
I do want to make a pitch that I think I've made
01:52:35.370 --> 01:52:37.192
to several of you in private meetings,
01:52:37.192 --> 01:52:40.758
that at some point we have at least one workshop
01:52:40.758 --> 01:52:43.670
where any member of the public can give
01:52:43.670 --> 01:52:44.890
their two, three minutes,
01:52:44.890 --> 01:52:47.320
especially as you get down to decisions.
01:52:47.320 --> 01:52:50.530
You know, winter storm Uri was obviously devastating
01:52:50.530 --> 01:52:52.260
to millions of Texans.
01:52:52.260 --> 01:52:53.350
Some Texans died.
01:52:53.350 --> 01:52:55.870
There were a lot of Texans with health problems.
01:52:55.870 --> 01:52:58.060
And these are major decisions you're making.
01:52:58.060 --> 01:53:02.110
So I obviously appreciate the invitation to the Sierra Club,
01:53:02.110 --> 01:53:05.270
but it would be nice to have at least one public forum
01:53:05.270 --> 01:53:07.800
as you get down to the decisions.
01:53:07.800 --> 01:53:10.245
And that'll be my one specific advocacy,
01:53:10.245 --> 01:53:12.050
can't promise you I won't do other advocacy,
01:53:12.050 --> 01:53:15.390
but that's my one pitch, is better include the public
01:53:15.390 --> 01:53:17.250
in these discussions.
01:53:17.250 --> 01:53:21.820
But yes, let me recognize that focusing on demand side
01:53:21.820 --> 01:53:22.905
is very important.
01:53:22.905 --> 01:53:27.905
And within ERCOT, as we know, both in the winter and summer,
01:53:28.460 --> 01:53:30.640
more than half of the peak load is residential
01:53:30.640 --> 01:53:31.490
and small commercial.
01:53:31.490 --> 01:53:34.223
So it's very important. If you can go to the next slide.
01:53:35.240 --> 01:53:37.440
So this is my basic slide,
01:53:37.440 --> 01:53:41.210
which is you guys have a lot of tools in your toolbox.
01:53:41.210 --> 01:53:43.786
And so if you look at these four categories,
01:53:43.786 --> 01:53:46.530
the TDU energy efficiency programs,
01:53:46.530 --> 01:53:48.890
which is really what Lark spoke about,
01:53:48.890 --> 01:53:51.900
ERS and ERCOT spoke about that this morning,
01:53:51.900 --> 01:53:53.940
the ancillary services ERCOT spoke about,
01:53:53.940 --> 01:53:55.830
and then market another.
01:53:55.830 --> 01:53:59.270
I do think in all of these categories,
01:53:59.270 --> 01:54:01.970
in terms of residential DR energy efficiency,
01:54:01.970 --> 01:54:03.190
distributed generation,
01:54:03.190 --> 01:54:05.920
and behind the meter distributed generation,
01:54:05.920 --> 01:54:08.299
there are things that can be done
01:54:08.299 --> 01:54:12.860
to increase those categories.
01:54:12.860 --> 01:54:14.810
And now, you know, in some of those categories,
01:54:14.810 --> 01:54:15.850
we're fairly limited.
01:54:15.850 --> 01:54:18.390
So we talked about residential DR
01:54:18.390 --> 01:54:20.755
and the TDU energy efficiency programs.
01:54:20.755 --> 01:54:24.366
Limited capability, and basically summer-only.
01:54:24.366 --> 01:54:29.060
Energy efficiency within those TDUs is based,
01:54:29.060 --> 01:54:32.630
I call it a capacity factor, it's actually called, Lark, a?
01:54:32.630 --> 01:54:34.660
Energy conservation load factor.
01:54:34.660 --> 01:54:37.210
Energy conservation load factor.
01:54:37.210 --> 01:54:40.130
We have a, I would call it a very low amount
01:54:40.130 --> 01:54:43.350
of energy efficiency that we require TDUs to use,
01:54:43.350 --> 01:54:44.760
to make, to meet.
01:54:44.760 --> 01:54:47.676
Those programs do not cover distributed generation.
01:54:47.676 --> 01:54:50.240
They can include some
01:54:50.240 --> 01:54:51.900
behind the meter distributed generation.
01:54:51.900 --> 01:54:54.850
There can be incentives to storage solar
01:54:54.850 --> 01:54:55.890
within those programs.
01:54:55.890 --> 01:54:57.670
There are some limited incentives.
01:54:57.670 --> 01:54:59.523
That's something to think about.
01:54:59.523 --> 01:55:01.976
ERS we've already talked about.
01:55:01.976 --> 01:55:04.650
There's some limited residential DR,
01:55:04.650 --> 01:55:07.620
really the 30 minute weather sensitive load.
01:55:07.620 --> 01:55:10.090
We do think that can be increased substantially.
01:55:10.090 --> 01:55:12.420
And I would argue if I'm allowed to advocate,
01:55:12.420 --> 01:55:13.343
that it should be.
01:55:14.436 --> 01:55:19.220
Ancillary services, we are appreciative
01:55:19.220 --> 01:55:22.220
of the current efforts to get non-controllable loads
01:55:22.220 --> 01:55:23.510
into non-spin.
01:55:23.510 --> 01:55:25.200
And we do believe more can be done
01:55:25.200 --> 01:55:27.000
with an ancillary services.
01:55:27.000 --> 01:55:29.330
And then there's the market itself.
01:55:29.330 --> 01:55:32.030
And there's a lot that can be done in the market.
01:55:32.030 --> 01:55:33.830
So if we can move to the next slide.
01:55:35.670 --> 01:55:36.870
I want to just remind folks,
01:55:36.870 --> 01:55:39.160
the energy efficiency rule you have,
01:55:39.160 --> 01:55:42.521
and this is why I say you have a lot of tools,
01:55:42.521 --> 01:55:46.690
you have the ability to really expand it
01:55:46.690 --> 01:55:47.527
because it does say
01:55:47.527 --> 01:55:48.743
"ensure that all customers
01:55:48.743 --> 01:55:50.900
"and all eligible customer classes"
01:55:50.900 --> 01:55:54.240
and, reminder that our energy efficiency programs
01:55:54.240 --> 01:55:56.163
really do not cover industrial.
01:55:57.092 --> 01:55:59.378
We specifically limit them to commercial and residential.
01:55:59.378 --> 01:56:00.937
"Have a choice of an access
01:56:00.937 --> 01:56:03.181
"to energy efficiency alternatives
01:56:03.181 --> 01:56:04.847
"that allow each customer to reduce energy consumption,
01:56:04.847 --> 01:56:06.113
"peak demand, or energy costs."
01:56:06.113 --> 01:56:09.190
So I think that gives you pretty broad authority
01:56:09.190 --> 01:56:12.060
to change the way we do our energy efficiency
01:56:12.060 --> 01:56:14.750
and load management programs through the TDUs.
01:56:14.750 --> 01:56:15.583
Next slide.
01:56:18.660 --> 01:56:20.020
I'm not gonna go through all of this,
01:56:20.020 --> 01:56:22.110
but on the right,
01:56:22.110 --> 01:56:24.960
this is a study from APRA-E that shows
01:56:24.960 --> 01:56:29.180
that there is no state that has more economic potential
01:56:29.180 --> 01:56:31.653
for electricity savings than Texas.
01:56:32.881 --> 01:56:34.790
And in the comments we submitted, there's a footnote,
01:56:34.790 --> 01:56:36.720
if you want to read the whole study,
01:56:36.720 --> 01:56:39.945
but APRA-E puts the study out every couple of years.
01:56:39.945 --> 01:56:43.580
As Lark said, we were really the first state
01:56:43.580 --> 01:56:46.041
to have an energy efficiency resource standard.
01:56:46.041 --> 01:56:48.799
That is not correct.
01:56:48.799 --> 01:56:51.730
We're actually ranked 27th. I said 29th.
01:56:51.730 --> 01:56:55.470
I'll, you know, fix that in a final version.
01:56:55.470 --> 01:56:59.420
We are now last in terms of our overall savings goals.
01:56:59.420 --> 01:57:01.430
And here I'm talking about the savings goal,
01:57:01.430 --> 01:57:05.380
which as Lark said, is a percentage of the peak demand goal.
01:57:05.380 --> 01:57:07.430
So we are really the last state
01:57:07.430 --> 01:57:10.580
of the states that have an energy efficiency goal.
01:57:10.580 --> 01:57:12.840
We are currently have the lowest one.
01:57:12.840 --> 01:57:17.840
Which in my mind means if we were to aim for a medium goal,
01:57:18.670 --> 01:57:21.420
not the Vermonts or the New Yorks or the Californias,
01:57:21.420 --> 01:57:24.283
but the, you know, Arkansas of the world,
01:57:25.218 --> 01:57:27.555
you know, the medium states.
01:57:27.555 --> 01:57:29.753
Pennsylvanias of the world.
01:57:31.038 --> 01:57:31.871
You know--
After last weekend,
01:57:31.871 --> 01:57:33.300
that's just especially mean Cyrus.
01:57:33.300 --> 01:57:34.430
Yeah, sorry.
01:57:34.430 --> 01:57:35.990
Oh, I'm sorry, I didn't even think about that.
01:57:35.990 --> 01:57:40.063
Yeah, that was, as a UT grad, that was painful.
01:57:43.030 --> 01:57:44.580
So they'll do better next time.
01:57:46.890 --> 01:57:50.535
You know, we could potentially adopt a goal,
01:57:50.535 --> 01:57:52.830
not tomorrow, but over time, you know,
01:57:52.830 --> 01:57:56.900
phase it in over time and quintuple our energy savings
01:57:56.900 --> 01:57:58.863
compared to what we get today.
01:58:00.193 --> 01:58:01.590
And so if you, oh, and I'll just mention,
01:58:01.590 --> 01:58:04.620
NOIEs do have programs, they do have energy efficiencies
01:58:04.620 --> 01:58:06.210
and DR programs,
01:58:06.210 --> 01:58:09.276
we require a certain NOIEs to report,
01:58:09.276 --> 01:58:12.520
both do some reporting to ERCOT and to SECO.
01:58:12.520 --> 01:58:15.320
Those reports probably aren't as good as they should be.
01:58:16.690 --> 01:58:18.677
But in general, we don't see
01:58:18.677 --> 01:58:22.195
a lot of participation by NOIEs,
01:58:22.195 --> 01:58:23.550
other than Austin Energy and CPS Energy,
01:58:23.550 --> 01:58:26.890
which have their own internal goals that they're meeting.
01:58:26.890 --> 01:58:29.596
What's the policy behind requiring some,
01:58:29.596 --> 01:58:31.280
rather than others?
01:58:31.280 --> 01:58:32.750
Do you know where that came from?
01:58:32.750 --> 01:58:36.530
So that was a law
01:58:36.530 --> 01:58:37.980
that was passed by the legislature
01:58:37.980 --> 01:58:41.180
that said NOIEs have to report to SECO.
01:58:41.180 --> 01:58:45.920
Any NOIE that's at, I believe it's 500,000 kilowatt hours,
01:58:45.920 --> 01:58:47.660
and I get my megawatt hours and kilowatt hours
01:58:47.660 --> 01:58:49.920
get confused sometimes, think I'm right,
01:58:49.920 --> 01:58:52.800
have to report to SECO annually on their DR
01:58:52.800 --> 01:58:55.370
and energy efficiency programs.
01:58:55.370 --> 01:58:56.470
So that's who's got to report,
01:58:56.470 --> 01:58:57.810
not who's actually doing it.
01:58:57.810 --> 01:59:00.450
It's just a report. We're not requiring--
01:59:00.450 --> 01:59:03.464
So there are reps and NOIEs out there
01:59:03.464 --> 01:59:05.320
that may have may or may not have these programs in place
01:59:05.320 --> 01:59:07.470
that aren't reporting them.
01:59:07.470 --> 01:59:10.650
So we require NOIEs to report to SECO.
01:59:10.650 --> 01:59:15.410
ERCOT has some new reporting requirements as well,
01:59:15.410 --> 01:59:19.640
both for DG and some surveys for demand response.
01:59:19.640 --> 01:59:22.191
But one could argue that we should be doing,
01:59:22.191 --> 01:59:25.100
we should be requiring more of NOIEs
01:59:25.100 --> 01:59:26.620
in terms of these programs.
01:59:26.620 --> 01:59:27.823
So next slide.
01:59:29.370 --> 01:59:30.510
I'm not gonna go over this
01:59:30.510 --> 01:59:32.829
because I really think Lark did a great job.
01:59:32.829 --> 01:59:37.829
I put some of the numbers down on the energy use
01:59:37.890 --> 01:59:39.900
and the actual cost.
01:59:39.900 --> 01:59:42.450
And these are, I didn't have the 2020 data.
01:59:42.450 --> 01:59:43.730
So this is really through 2019.
01:59:43.730 --> 01:59:46.993
I think I can skip this slide if you want to go to the next.
01:59:48.040 --> 01:59:51.920
This is really my somewhat of advocacy slide
01:59:51.920 --> 01:59:54.193
on energy efficiency.
01:59:54.193 --> 01:59:57.830
Key point building codes are very important.
01:59:57.830 --> 01:59:59.370
You guys have nothing to do with building codes,
01:59:59.370 --> 02:00:01.860
but I do want to mention that we as a state
02:00:01.860 --> 02:00:04.660
could and should be doing more on building codes.
02:00:04.660 --> 02:00:06.600
But I do want to make the point
02:00:06.600 --> 02:00:09.770
that energy efficiency can really be thought of
02:00:09.770 --> 02:00:14.400
as base load if we can reduce overall the energy demand,
02:00:14.400 --> 02:00:15.820
that's gonna buy us some time
02:00:15.820 --> 02:00:17.670
and it's gonna be good for customers.
02:00:18.965 --> 02:00:21.090
And then, you know, the peak demand programs,
02:00:21.090 --> 02:00:23.930
demand response is really about those peaks.
02:00:23.930 --> 02:00:26.613
And I do think we need both in the program.
02:00:27.520 --> 02:00:30.910
And I do want to say that although the legislature did pass
02:00:30.910 --> 02:00:34.290
SB 1125 in 2011,
02:00:34.290 --> 02:00:37.065
which was the last time we had legislative action on this,
02:00:37.065 --> 02:00:41.560
the PUC itself through rulemaking has, in the past,
02:00:41.560 --> 02:00:43.130
expanded and changed goals.
02:00:43.130 --> 02:00:44.230
You did it in 2010.
02:00:44.230 --> 02:00:46.720
So you do have, as long as you meet
02:00:46.720 --> 02:00:48.810
the legislative minimums, you do have authority
02:00:48.810 --> 02:00:51.530
to adjust goals and adjust programs.
02:00:51.530 --> 02:00:55.330
There are some requirements, Lark didn't mention this,
02:00:55.330 --> 02:00:57.430
but there are some specific requirements
02:00:57.430 --> 02:01:00.210
on low-income and hard-to-reach programs,
02:01:00.210 --> 02:01:04.320
which I think are very important given that we don't have a,
02:01:04.320 --> 02:01:06.206
you know, some of the system benefit fund features
02:01:06.206 --> 02:01:08.049
we used to.
02:01:08.049 --> 02:01:12.490
So they are very important, but it does mean TDUs are in
02:01:12.490 --> 02:01:14.300
a little bit of a, you know,
02:01:14.300 --> 02:01:15.660
they've got to do a lot of balancing
02:01:15.660 --> 02:01:17.427
between the peak demand energy savings
02:01:17.427 --> 02:01:18.750
and the low income programs,
02:01:18.750 --> 02:01:20.666
but it's just something to be aware of.
02:01:20.666 --> 02:01:23.667
The 20%, and I call it the load factor.
02:01:23.667 --> 02:01:25.840
Well, that's correct.
02:01:25.840 --> 02:01:27.470
I sometimes mix up (mumbles).
02:01:27.470 --> 02:01:32.470
But, the 20% load factor is something that can be adjusted.
02:01:32.580 --> 02:01:33.810
That's in the rules.
02:01:33.810 --> 02:01:35.750
So if we want to get more energy savings,
02:01:35.750 --> 02:01:37.080
we could adjust those.
02:01:37.080 --> 02:01:39.952
We could also adopt a separate energy savings goal.
02:01:39.952 --> 02:01:43.480
And obviously all this gets back to the rate payers,
02:01:43.480 --> 02:01:45.630
the rate payers are paying for these programs.
02:01:45.630 --> 02:01:47.880
And so you do have annual energy efficiency
02:01:47.880 --> 02:01:51.320
cost recovery factor proceedings.
02:01:51.320 --> 02:01:54.730
But ultimately you all, the four of you,
02:01:54.730 --> 02:01:57.610
make those decisions really about, you know,
02:01:57.610 --> 02:02:00.370
what's the appropriate amount to charge rate payers?
02:02:00.370 --> 02:02:03.560
Right now, we're generally under a buck average,
02:02:03.560 --> 02:02:05.429
am I right, on to consumers?
02:02:05.429 --> 02:02:07.340
(woman stutters)
02:02:07.340 --> 02:02:09.312
We're around there, I believe.
02:02:09.312 --> 02:02:11.169
Yeah, we're around there.
Per month or per year?
02:02:11.169 --> 02:02:12.873
Per month or per year?
02:02:12.873 --> 02:02:14.350
Per month.
02:02:14.350 --> 02:02:17.780
So the Sierra Club argument would be,
02:02:17.780 --> 02:02:19.160
we can go higher than that
02:02:19.160 --> 02:02:21.540
and get more energy efficiency and demand response
02:02:21.540 --> 02:02:22.860
to these programs.
02:02:22.860 --> 02:02:25.123
Obviously there's a balancing act, you know.
02:02:26.770 --> 02:02:29.065
And PUC can refocus these programs
02:02:29.065 --> 02:02:32.480
to deal with winter savings and new technologies.
02:02:32.480 --> 02:02:34.200
We can do that.
02:02:34.200 --> 02:02:35.950
How am I doing on time? Keep going.
02:02:38.130 --> 02:02:41.640
Smart Meter Texas, this is another tool in your toolbox.
02:02:41.640 --> 02:02:44.950
We invested billions and rate payers paid for this,
02:02:44.950 --> 02:02:46.300
in Smart Meters.
02:02:46.300 --> 02:02:47.850
We've done rulemaking on this.
02:02:47.850 --> 02:02:49.966
This is something you could look at again.
02:02:49.966 --> 02:02:53.820
Our argument would be that rate payers haven't gotten
02:02:53.820 --> 02:02:56.510
all the value they could from those smart meters.
02:02:56.510 --> 02:03:00.160
And it's really about accessing more timely access
02:03:00.160 --> 02:03:03.150
to the information and Smart Meter Texas,
02:03:03.150 --> 02:03:04.810
mainly for retail electric providers,
02:03:04.810 --> 02:03:08.053
but also for third parties.
02:03:08.053 --> 02:03:11.030
That could be really key to opening up
02:03:11.030 --> 02:03:12.770
economic demand response,
02:03:12.770 --> 02:03:14.750
really allowing those programs to grow.
02:03:14.750 --> 02:03:17.380
So looking again at the rules around access
02:03:17.380 --> 02:03:20.640
to the smart meters, who has access, how much,
02:03:20.640 --> 02:03:25.340
how can they get information in a timely way
02:03:25.340 --> 02:03:26.670
that can be useful to them?
02:03:26.670 --> 02:03:28.560
And there's gonna be other people who can speak later
02:03:28.560 --> 02:03:30.110
about the details of that.
02:03:30.110 --> 02:03:33.180
Don't ask me too much about that. So, next.
02:03:33.180 --> 02:03:38.060
ERS, again, we put this in our comments,
02:03:38.060 --> 02:03:41.360
I guess I'm minute into advocacy, 50 million.
02:03:41.360 --> 02:03:45.050
I think, I think we could double it and still,
02:03:45.050 --> 02:03:48.340
the impact on overall on load serving entities
02:03:48.340 --> 02:03:49.650
would not be great.
02:03:49.650 --> 02:03:52.110
And I believe we could do a lot more with aggregation,
02:03:52.110 --> 02:03:55.030
and that is probably the easiest place to do aggregation
02:03:55.030 --> 02:03:56.482
in the ERS.
02:03:56.482 --> 02:03:58.733
Next slide.
02:04:01.010 --> 02:04:03.443
You know, we have limited residential DR
02:04:03.443 --> 02:04:05.310
in the market itself.
02:04:05.310 --> 02:04:07.600
A lot of it is nights and weekends free.
02:04:07.600 --> 02:04:09.941
It's not what I would call true DR.
02:04:09.941 --> 02:04:14.941
You guys could either look at additional ancillary services
02:04:15.320 --> 02:04:18.400
or setting a goal for load serving entities,
02:04:18.400 --> 02:04:22.579
making people nervous here, for residential DR,
02:04:22.579 --> 02:04:25.010
and then let the market do what it is,
02:04:25.010 --> 02:04:26.010
allow it to be tradable.
02:04:26.010 --> 02:04:29.570
That's something that I think is within your authority.
02:04:29.570 --> 02:04:32.323
And then I think this is my last slide.
02:04:33.550 --> 02:04:36.070
And then there are gonna be many others
02:04:36.070 --> 02:04:37.460
who talk about this later,
02:04:37.460 --> 02:04:41.796
but I would argue right now, you know,
02:04:41.796 --> 02:04:45.440
we've done a lot on settlement-only distributed generation,
02:04:45.440 --> 02:04:47.560
that's growing, and these are old numbers.
02:04:47.560 --> 02:04:50.103
Obviously Kenan gave you more recent numbers.
02:04:50.103 --> 02:04:54.021
But how do we get the unregistered DG
02:04:54.021 --> 02:04:56.290
and the distribution generation,
02:04:56.290 --> 02:04:58.070
you know, aggregated, unregistered,
02:04:58.070 --> 02:05:02.390
unregistered DG, and distribution generation resources,
02:05:02.390 --> 02:05:04.196
how do we really grow those markets?
02:05:04.196 --> 02:05:07.430
And we think there are ways to do that.
02:05:07.430 --> 02:05:11.160
I think I'll allow, you know, other folks coming later
02:05:11.160 --> 02:05:12.670
that have more experience than I do,
02:05:12.670 --> 02:05:15.130
but we are, we generally think there is more
02:05:15.130 --> 02:05:19.900
that can be done to get to that sort of third bucket,
02:05:19.900 --> 02:05:22.410
and also incorporate some of those smaller units
02:05:22.410 --> 02:05:23.818
that are customer-sided.
02:05:23.818 --> 02:05:27.500
And so with that, I'm happy to answer questions.
02:05:27.500 --> 02:05:28.610
Thank you, sir.
02:05:28.610 --> 02:05:31.960
I know we've got five minutes before we break for lunch.
02:05:31.960 --> 02:05:34.430
I want to be quick,
02:05:34.430 --> 02:05:37.142
but I'm gonna co-op Commissioner Glotfelty's question.
02:05:37.142 --> 02:05:38.930
Or do you want to?
02:05:38.930 --> 02:05:39.763
Go.
02:05:41.142 --> 02:05:42.700
Let me get this right.
02:05:42.700 --> 02:05:44.160
If we do demand response,
02:05:44.160 --> 02:05:47.000
if we do the ERCOT market redesign correctly
02:05:47.000 --> 02:05:50.950
and get demand response correct in that redesign,
02:05:50.950 --> 02:05:52.900
do we still need to be spending 50
02:05:52.900 --> 02:05:55.074
or 100 or 150 million
02:05:55.074 --> 02:05:57.600
on the energy efficiency program?
02:05:57.600 --> 02:06:02.110
So you may be, so you're not referring to ERS.
02:06:02.110 --> 02:06:04.710
You're referring to the TDU?
02:06:04.710 --> 02:06:06.110
Sorry. Okay yeah, sorry.
02:06:06.110 --> 02:06:08.160
That was ERS, I apologize.
02:06:08.160 --> 02:06:11.223
Refer to the TDU efficiency programs.
02:06:11.223 --> 02:06:16.223
I am in favor of making the TDU programs
02:06:16.690 --> 02:06:18.781
more focused on energy efficiency
02:06:18.781 --> 02:06:23.440
and getting homes and businesses up to, kind of up to snuff,
02:06:23.440 --> 02:06:26.240
so they can then participate more fully.
02:06:26.240 --> 02:06:29.540
That's not to say that we're against having some, you know,
02:06:29.540 --> 02:06:32.823
load management programs within there.
02:06:32.823 --> 02:06:33.656
And I think it'll be important,
02:06:33.656 --> 02:06:34.489
at least for the next few years
02:06:34.489 --> 02:06:36.860
before we get to that redesign,
02:06:36.860 --> 02:06:39.060
it's kind of a way to pilot new things
02:06:39.060 --> 02:06:40.850
and get them out there.
02:06:40.850 --> 02:06:43.661
But I do think if you look at most states,
02:06:43.661 --> 02:06:47.530
a lot of the focus of these tend to be energy efficiency.
02:06:47.530 --> 02:06:51.610
And in particular, low-income working Texans,
02:06:51.610 --> 02:06:54.842
people at 200% or less of the federal, you know,
02:06:54.842 --> 02:06:56.485
those are, you know,
02:06:56.485 --> 02:07:00.320
we saw a lot of the suffering during Uri
02:07:00.320 --> 02:07:02.140
had to do with your housing stock.
02:07:02.140 --> 02:07:06.120
So I do think it makes sense to some extent,
02:07:06.120 --> 02:07:07.944
refocus these programs on energy efficiency,
02:07:07.944 --> 02:07:09.310
but not immediately.
02:07:09.310 --> 02:07:13.563
It's gonna take some time to, you know, to switch over.
02:07:13.563 --> 02:07:18.030
I was just gonna ask, do we do a,
02:07:18.030 --> 02:07:20.560
I think I know the answer to this, but a good job
02:07:20.560 --> 02:07:23.930
or a poor job of working weatherization programs
02:07:23.930 --> 02:07:27.203
with EE programs as a state?
02:07:28.680 --> 02:07:31.410
I would say we do, we do a poor job.
02:07:31.410 --> 02:07:32.980
That's not to say that there aren't,
02:07:32.980 --> 02:07:36.040
you know, lots of great implementers out there.
02:07:36.040 --> 02:07:41.040
I've always felt like, you know, there's the TDU programs.
02:07:43.250 --> 02:07:45.760
And then there's the federal weatherization money
02:07:45.760 --> 02:07:48.070
that flows through TDHCA.
02:07:48.070 --> 02:07:49.920
And sometimes it gets very confusing
02:07:49.920 --> 02:07:51.990
about what the rules are and who does what.
02:07:51.990 --> 02:07:56.990
I think within the confines of what TDUs are required to do,
02:07:57.690 --> 02:07:58.930
they do do a good job.
02:07:58.930 --> 02:08:02.130
It's just, we could be doing so much more.
02:08:02.130 --> 02:08:03.387
Thanks.
02:08:03.387 --> 02:08:04.220
So I have a question.
02:08:04.220 --> 02:08:06.203
There was a variety of comments filed
02:08:06.203 --> 02:08:10.610
recommending that the Commission allocate money
02:08:10.610 --> 02:08:12.965
from the TDU energy efficiency program
02:08:12.965 --> 02:08:17.965
to, within that pot, to residential DR
02:08:18.960 --> 02:08:21.800
energy savings programs,
02:08:21.800 --> 02:08:25.810
and I'm just wondering what your thoughts are on that,
02:08:25.810 --> 02:08:27.253
Lark, Cyrus?
02:08:28.560 --> 02:08:31.230
And I think their basis is there are some programs
02:08:31.230 --> 02:08:33.626
within that energy efficiency program
02:08:33.626 --> 02:08:37.930
that could be underperforming,
02:08:37.930 --> 02:08:39.540
and we're not getting that much bang for our buck
02:08:39.540 --> 02:08:41.720
from a reliability benefits standpoint.
02:08:41.720 --> 02:08:44.190
And by shifting some of that money over
02:08:44.190 --> 02:08:46.861
to residential DR-focused programs,
02:08:46.861 --> 02:08:51.553
that we would be able to get more of a reliability benefit.
02:08:55.070 --> 02:08:56.360
So I have to be careful, right?
02:08:56.360 --> 02:08:58.083
'Cause I can't advocate.
02:08:59.453 --> 02:09:04.453
I guess I would say, I don't know that particular comment.
02:09:05.960 --> 02:09:08.570
We already did, there are some residential
02:09:08.570 --> 02:09:11.200
demand response offerings being funded right now
02:09:11.200 --> 02:09:13.060
through the energy efficiency programs
02:09:13.060 --> 02:09:17.540
that could be called in a way that could increase
02:09:17.540 --> 02:09:19.300
the value they currently have.
02:09:19.300 --> 02:09:21.020
I don't know where they're talking
02:09:21.020 --> 02:09:24.020
about diverting monies from,
02:09:24.020 --> 02:09:25.580
which makes it difficult for me
02:09:25.580 --> 02:09:27.710
to kind of talk about that more.
02:09:27.710 --> 02:09:30.090
I was really glad that Cyrus brought up
02:09:30.090 --> 02:09:32.382
the low-income, hard-to-reach component.
02:09:32.382 --> 02:09:34.320
That is something that's legislated.
02:09:34.320 --> 02:09:36.080
It's something we're actually working really hard
02:09:36.080 --> 02:09:38.410
on improving those programs this year.
02:09:38.410 --> 02:09:40.857
So I'm sorry, that's not.
02:09:42.861 --> 02:09:44.743
I'm just not, I'm sorry, I can't answer that one
02:09:44.743 --> 02:09:46.541
more fully without--
02:09:46.541 --> 02:09:47.743
I understand.
You know the devil's
02:09:47.743 --> 02:09:49.160
always in the details, right?
02:09:49.160 --> 02:09:50.253
And maybe the question is better
02:09:50.253 --> 02:09:51.750
for the next panel.
02:09:51.750 --> 02:09:54.130
Yeah. I mean, if you have 150 million
02:09:54.130 --> 02:09:56.610
or whatever it is, is about 150 million a year,
02:09:56.610 --> 02:09:59.060
that's spent through the energy efficiency programs?
02:09:59.060 --> 02:10:00.862
I think that's about right.
A little bit more, yeah.
02:10:00.862 --> 02:10:04.103
You know, like we were talking about with the ERS,
02:10:04.103 --> 02:10:05.410
it has to be divided in different ways.
02:10:05.410 --> 02:10:09.580
And the money that comes from commercial customers
02:10:09.580 --> 02:10:12.426
are supposed to be spent on commercial programs
02:10:12.426 --> 02:10:14.063
and the money that comes from residential customers
02:10:14.063 --> 02:10:15.360
is supposed to be spent on residential.
02:10:15.360 --> 02:10:18.800
So it's when you start getting those details,
02:10:18.800 --> 02:10:21.210
it gets pretty confusing.
02:10:21.210 --> 02:10:23.780
But I, you know, I do think more can be done
02:10:23.780 --> 02:10:26.350
on residential DR Within these programs.
02:10:26.350 --> 02:10:31.120
I do think there may be a way to focus on winter as well.
02:10:31.120 --> 02:10:33.300
We talked about, you know, you've seen other people
02:10:33.300 --> 02:10:34.750
comment and winter storm Uri,
02:10:34.750 --> 02:10:37.470
that a lot of it was electric strip heating,
02:10:37.470 --> 02:10:38.943
drove that demand.
02:10:38.943 --> 02:10:41.650
Or, you know, can we be investing in heat pumps
02:10:41.650 --> 02:10:43.650
and new technologies that will really reduce,
02:10:43.650 --> 02:10:45.521
for those people who aren't using gas.
02:10:45.521 --> 02:10:48.963
So we can really reduce that energy load
02:10:48.963 --> 02:10:50.860
during really cold periods.
02:10:50.860 --> 02:10:54.440
So there may be things we can do on in the wintertime.
02:10:54.440 --> 02:10:55.490
That would be useful.
02:10:58.100 --> 02:10:59.590
All right. Thank you all.
02:10:59.590 --> 02:11:00.423
Appreciate the invitation.
02:11:00.423 --> 02:11:04.603
Right at our 11:45 mark, we'll reconvene at 12:30.
02:11:05.879 --> 02:11:08.796
(group chattering)