WEBVTT
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All right.
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Welcome back folks.
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We are at our next panel
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on DR ERS energy efficiency
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products and providers
starting off with Reliant.
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Good afternoon.
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I'm Derek Mauzy with Reliant Energy
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and wanted to talk a little
bit about what we're doing
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and what we've found
about our experiences,
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what works and what doesn't.
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So we've got a couple of
times of DR that we execute.
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We've got device DR in our
cases specifically thermostats.
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Where we can control
that smart thermostat.
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I send a signal and reduce
the air conditioning usage
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for some period of time.
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It is very effective but
it is limited to customers
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who have that kind of device
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and the customer do have
the option and of course,
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want to retain that
option to override it.
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And they can always
walk over to the thermostat
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and turn it back down to a lower setting
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if it's summertime, if they wish.
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The other kind we use it
as we call it behavioral DR.
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It's where we send out
an email a day before
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and give the customer and incentive to
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shift or reduce their usage
for some time the next day.
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This one depends on the
customers proactively taking action
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and it can be used by a
wider range of customers.
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So with the thermostat DR,
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you've got to have the
right kind of thermostat
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with this behavioral DR
you could do anything.
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You could you could shift
your laundry to later in the day,
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you could decide that
you're going to go over
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and raise your thermostat yourself.
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You could shift some other
things that you're going to do
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to another time.
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This kind of of behavioral DR
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from kind of the rep's perspective,
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it does benefit from times
of high market prices.
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That is we see that load
reduction and we get that benefit.
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But this kind of Dr
is not really eligible
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for the TDU programs or ERS
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because it's not dispatchable
in a short period of time.
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With either kind of this,
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we've seen the participating customers
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give us load reductions of
around 20 to 25% of their load
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or around 1KW per
customer in in the summertime.
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And with the thermostat DR,
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that means you're gonna get
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a very high percentage
of customers who do that.
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With the behavioral DR,
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again, the customer
has to take the action.
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So there's somewhat
lower participation in that.
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Some people will just kind
of ignore the email or say,
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today's not the right time for me,
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but others will do it.
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An the, like, kind of on the flip side,
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some things that we've
found are not as effective,
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at least in our market with regard to
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shifting load is detailed
time of use rates.
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Many markets have
kind of a low medium high
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kind of pricing for time of use.
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What we have seen is that customers
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see that high price and they back off.
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I was watching a focus group
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where we showed a time that
you saw option to some folks.
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And I saw a peak price
of 30 cents a kilowatt hour.
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And they're like,
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"Ooh, I'm gonna have
to think about that."
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Well, if you're trying to
enroll somebody and they say,
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"Ooh, I gotta think about that,"
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you know that you haven't made a sale.
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So in our market where the goal is you,
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you give the customer
something that they're interested in,
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time of use has not been a
particularly successful tool
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at least the kind of
traditional time of use rates.
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And really critical piece pricing
where you have something,
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we've seen those in California
and several other places
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where at times of critical peak,
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the price goes over a
dollar, a kilowatt hour,
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those have not been well
received by customers here.
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I thought I would show
you a little bit about how
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the smart thermostat DR works.
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So this is an average of
the participating customers
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in an event we had in 2020.
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So the load on here
on the left axis, the KW,
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is actually just the
air conditioning load ,
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is not the entire house load.
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The entire house load will probably
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be closer to four or five KW at peak.
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But what you see is
we started this event
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at three o'clock in
the afternoon, 15:00,
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pretty strong drop-off.
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And then as the event went
on, the drop-off decreased a bit,
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but it was still a solid reduction
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throughout that period of
time we control the thermostat.
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When the event ends and
the thermostats are kind of
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allowed to go back to
their original set point,
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then you see a kind
of a kick up in usage
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as the house works to cool itself down.
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The other thing I just
wanted to point out was
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the bottom chart shows
kind of the participants
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interval by interval during that event.
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So we started off with 96% of customers
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were participating in
this event, the other 4%,
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there was probably a internet connection
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or something like that,
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just a communication
problem with the thermostat.
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And then as the event wore on,
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we had people dropping out,
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but somebody would walk over
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and change the thermostat back
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to a more comfortable setting.
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So main point here is that thermostat DR
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can't really be used forever.
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It's a limited duration.
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It works very well, but
for a limited period of time.
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So in this admittedly crude drawing
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wanted to just kind
of show kind of overlay
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that load reduction with
some illustrative market prices.
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So in that kind of green scenario,
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if you had wholesale
prices that were kind of low
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and then went fairly high
for say a couple of hours,
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and then came back down,
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that lends itself very well
to to this kind of DR event.
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This is the kind of situation where
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the market signal and
the available resource
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kind of lines up pretty well.
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What is not as effective
for incentivizing DR
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is if the high price last
for a really long time
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because at the end of the event,
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we're gonna start
using more power again.
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Well, okay, that you've
just shifted power
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from a high price interval
to another high price interval.
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So that's just one of the considerations
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that goes into kind
of the market structure
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or what incentivizes REP behavior
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or any DR Manufacturer's behavior.
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What is that
magic amount of time?
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In terms of your focus groups,
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in terms of your practical experience,
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where do you see the most effect
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of price responsiveness,
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and then when does it start tailing off?
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So it seems to
us that it starts tailing off
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around two hours into
the end of the event.
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And in my experience,
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if you try to carry on
thermostat DR event
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more than four hours,
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you're really not getting
anything in that last part.
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And it's not necessarily
just that consumers
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are going to turn down the thermostat.
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They could leave the
thermostat at the higher setting,
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but if it's hot outside
and the temperature
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in the house gets up,
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then the air conditioner
is gonna kick on again.
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It may not run at quite
as high a load factor
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if you've got the thermostat set higher,
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but eventually that air
conditioner is gonna run.
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Which of these price
curves is the most indicative
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of our current market,
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or is it just circumstances dependent?
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In the in the summertime,
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the green one is reasonably close.
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Okay, so that's pretty good.
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Current market structure and performance
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shows a price signal
that correlates well
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with effective DR.
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Yes.
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Okay.
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I will say that kind of
before ORDC came along,
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that what you saw was
extremely spiky prices
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that were very hard to predict.
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And they might last for only 15 minutes
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or something like that,
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or maybe they lasted four for 30,
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but still it was a quick up and down.
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And if you had not an
advanced kind of predicted
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exactly when that was gonna happen-
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Presumably, effective
DR would have an impact
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on the price.
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Yeah.
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Hopefully.
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Yes, it should.
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The amount of DR on
the system right now,
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or at least of I'll say residential DR,
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is not enough that it has
made a huge difference
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in where prices go, but
it could down the road.
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So if you can go back to
that prior slide real quick
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in orange, your statement
about stretching high prices
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over several hours is
not useful for most DR,
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is we're looking at
market design changes
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in this forum and
especially specifically ORDC,
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and there's been a lot
of stakeholder comments
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that have recommended
stretching out the curve
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and lowering the price curve,
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but essentially producing
more hours of higher prices.
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How does that coincide
with your statement?
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So if that happens,
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it does not help the economics
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of implementing a residential DR.
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Or what would tend
to happen then is that
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it would only make sense
for someone who's got
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a resource that only
lasts two or three hours,
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they would have to
wait until halfway through
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what they think is
the high price period,
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and try to catch the tail end of it.
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Because what's happening
is that we aren't completely
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eliminating load,
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we're really shifting
it to a later time.
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You're saying, okay, I'll
let the house get hotter now,
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but I'm gonna to want it cooler later.
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And so
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what a DR executer wants to do is
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I wanna lower the load
when prices are high
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and let it go up when prices are low.
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If prices stay high
for a really long time,
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then there's not that market price,
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it's not a useful market
price signal for us.
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When you also, I mean,
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the DR doesn't exist in a vacuum, right?
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Like it should be competing
with other resources.
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So even a elongated flattened ORDC,
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would just mean that it's competing
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with different resources,
different heat rights sooner,
00:11:55.240 --> 00:11:56.830
right?
00:11:56.830 --> 00:11:57.663
Yeah.
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Presumably what you
would expect would be
00:11:59.770 --> 00:12:04.360
that generation resources
or other resources
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that can run for a longer period of time
00:12:07.775 --> 00:12:09.970
would definitely try
to catch the front end
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of that high price period for DR.
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If we caught the front
end of that price period
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it just doesn't give us
an economic benefit.
00:12:24.160 --> 00:12:25.803
So I guess it's, I mean,
00:12:26.820 --> 00:12:31.820
we wanna bring resources with
the ORDC you're talking about
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hypothetically we'd would
wanna bring more resources
00:12:37.010 --> 00:12:40.373
sooner rather than waiting
for such a small reserve margin.
00:12:42.076 --> 00:12:45.470
And this is one of those
resources that can compete
00:12:45.470 --> 00:12:47.820
with, and that could change
depending on price of gas,
00:12:47.820 --> 00:12:50.890
for example, right now
would be those heat rates
00:12:50.890 --> 00:12:52.750
are changing we would be very different
00:12:52.750 --> 00:12:53.780
than they were two years ago,
00:12:53.780 --> 00:12:57.310
compared to a product like this.
00:12:57.310 --> 00:13:00.680
I think we want this to be
another market resource
00:13:00.680 --> 00:13:02.623
and its economics could change,
00:13:03.720 --> 00:13:06.760
but what we wanna be
agnostic to those resources,
00:13:06.760 --> 00:13:07.593
we just want,
00:13:08.808 --> 00:13:11.110
I think we want the market to be able
00:13:11.110 --> 00:13:14.960
to provide the most
efficient resource sooner,
00:13:14.960 --> 00:13:16.893
I guess, sooner, rather than later.
00:13:17.930 --> 00:13:19.090
And then I get that.
00:13:19.090 --> 00:13:22.400
And so I guess it sounds
like it could get difficult
00:13:22.400 --> 00:13:24.770
for residential Dr because
you're gonna come on
00:13:24.770 --> 00:13:26.120
and you're only going
to be able to produce
00:13:26.120 --> 00:13:27.000
for up to two hours.
00:13:27.000 --> 00:13:31.730
So if you come on and
you prevent a reliability risk
00:13:31.730 --> 00:13:36.649
or event, but what if
it continues to occur
00:13:36.649 --> 00:13:40.900
when were in an emergency
then residential VR
00:13:40.900 --> 00:13:43.730
that's responding in this
way will not be available
00:13:43.730 --> 00:13:47.820
because they can only be
part of this curve for two hours.
00:13:47.820 --> 00:13:49.470
Well, I think it will be
available just a little bit
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later a little bit higher price.
00:13:52.380 --> 00:13:53.270
They may respond to you.
00:13:53.270 --> 00:13:55.810
Maybe just another
way to state it as that,
00:13:55.810 --> 00:13:59.130
if you think of the market
prices as being a signal
00:13:59.130 --> 00:14:00.913
as to when you need to take action,
00:14:02.440 --> 00:14:04.840
a market price thing
though the last eight hours
00:14:05.676 --> 00:14:06.509
I'm being maybe a little extreme
00:14:06.509 --> 00:14:07.770
I don't think anyone is
talking about stretching out
00:14:07.770 --> 00:14:11.450
that long, but a market
signal the last a long time
00:14:13.040 --> 00:14:16.630
is something that a resource
00:14:16.630 --> 00:14:19.120
that can only last for three hours
00:14:19.120 --> 00:14:22.030
is gonna have to kind of
figure out how to work with them.
00:14:24.328 --> 00:14:25.161
And I've been,
00:14:25.161 --> 00:14:26.160
it probably wouldn't make as much sense
00:14:26.160 --> 00:14:29.620
for residential DR To try
to catch the front end of that
00:14:29.620 --> 00:14:30.470
eight hour period.
00:14:30.470 --> 00:14:32.200
It would make more
sense for the residential DR
00:14:32.200 --> 00:14:35.730
To try to catch the later
part of that eight hour period.
00:14:35.730 --> 00:14:39.160
But if the event
happens more often,
00:14:39.160 --> 00:14:42.040
that's really where Dr makes its money.
00:14:42.040 --> 00:14:43.940
If you're talking about price signals
00:14:45.405 --> 00:14:50.150
that reoccur and more often
at the efficiency of the market,
00:14:50.150 --> 00:14:54.050
and that is kind of what energy
only was predicated upon.
00:14:54.050 --> 00:14:58.010
I mean, is that everything
is subject to price signals.
00:14:58.010 --> 00:15:00.183
Behavior is influenced by price signals.
00:15:04.060 --> 00:15:05.910
Does that add to your ability as a rep
00:15:05.910 --> 00:15:08.330
to sort of negotiate
around that with these new
00:15:08.330 --> 00:15:09.593
and unique offerings?
00:15:14.810 --> 00:15:18.207
With with regard
to the energy only market
00:15:19.320 --> 00:15:20.763
and price signals,
00:15:23.900 --> 00:15:28.380
I guess when the energy
only market didn't have ORDC,
00:15:28.380 --> 00:15:32.143
the price signals were
unfortunately unpredictable.
00:15:33.570 --> 00:15:37.070
You would have some of
those really high price times,
00:15:37.070 --> 00:15:40.250
but it was hard to tell
when they were gonna occur
00:15:40.250 --> 00:15:42.100
and you had to be
extremely good at guessing
00:15:42.100 --> 00:15:46.700
that in order to actually make
money or even breakeven
00:15:46.700 --> 00:15:48.300
at something like residential DR
00:15:49.556 --> 00:15:54.500
By using the ORDC to give them a market
00:15:54.500 --> 00:15:58.290
to tie that signal to
available reserves,
00:15:58.290 --> 00:16:01.400
I think the market did a really good job
00:16:01.400 --> 00:16:06.400
of combining reliability signal
00:16:06.600 --> 00:16:08.153
with a price signal.
00:16:09.160 --> 00:16:12.027
And that I think has
enhanced the ability
00:16:12.027 --> 00:16:15.160
of something like residential DR
00:16:15.160 --> 00:16:18.930
or any kind of resource that can come on
00:16:18.930 --> 00:16:20.450
for some period of time,
00:16:20.450 --> 00:16:23.773
but it doesn't have like
unlimited capabilities.
00:16:24.680 --> 00:16:28.960
It makes it much more viable
for those kinds of resources
00:16:28.960 --> 00:16:30.883
to participate in the market.
00:16:33.310 --> 00:16:38.230
To your point about
products that we can offer
00:16:38.230 --> 00:16:39.573
and can develop,
00:16:40.760 --> 00:16:43.200
that's an interesting point that I think
00:16:43.200 --> 00:16:46.730
one of the great strengths
of the competitive market
00:16:46.730 --> 00:16:51.730
is that the companies
involved are always working
00:16:52.260 --> 00:16:57.260
to find value propositions
that appeal to consumers,
00:16:57.300 --> 00:17:00.110
and that produce at
least some kind of return
00:17:00.110 --> 00:17:02.320
for that company.
00:17:02.320 --> 00:17:06.710
And so while some
structures will work better
00:17:06.710 --> 00:17:08.120
than others for us,
00:17:08.120 --> 00:17:10.200
I do think that kind
of whatever structure
00:17:10.200 --> 00:17:12.720
you end up coming up with
in terms of how market prices
00:17:12.720 --> 00:17:16.844
are gonna work REPs
undoubtedly find ways
00:17:16.844 --> 00:17:18.950
to look at that and say, okay,
00:17:18.950 --> 00:17:22.130
well, how can we work
within that framework
00:17:22.130 --> 00:17:23.830
to provide value to our customers?
00:17:25.956 --> 00:17:30.495
Okay, keep going.
00:17:30.495 --> 00:17:31.870
So I think this is my last one.
00:17:31.870 --> 00:17:35.960
A few things that that we've
thought of that could help
00:17:35.960 --> 00:17:37.193
expand DR,
00:17:38.310 --> 00:17:40.610
making participation
in the program simple
00:17:40.610 --> 00:17:42.530
and through a trusted
resource that is reachable
00:17:42.530 --> 00:17:43.953
for questions and concerns.
00:17:45.918 --> 00:17:50.918
When the conservation event happened
00:17:51.180 --> 00:17:54.393
that they got a lot of
publicity earlier this year,
00:17:55.950 --> 00:18:00.693
it was a program that the
REPs were not involved with.
00:18:01.560 --> 00:18:03.560
Customers are used to coming to the REP
00:18:03.560 --> 00:18:07.983
as that's who I deal with
for power and electricity.
00:18:09.320 --> 00:18:10.710
And we were kind of scrambling because,
00:18:10.710 --> 00:18:14.063
well, that wasn't us, we didn't
do that to your thermostat.
00:18:15.490 --> 00:18:20.033
So that kind of creates
some confusion in the market.
00:18:21.530 --> 00:18:23.900
Reliant does in fact have a program
00:18:23.900 --> 00:18:27.173
as I've been describing where
we can control the thermostat.
00:18:28.010 --> 00:18:31.370
For a company like Reliant
00:18:31.370 --> 00:18:35.000
because we are very concerned
with retaining customers
00:18:35.000 --> 00:18:38.370
and not just acquiring
them in the first place,
00:18:38.370 --> 00:18:42.300
we are pretty careful about
making sure that people
00:18:42.300 --> 00:18:43.250
who enroll in this program
00:18:43.250 --> 00:18:44.950
understand what they're enrolling at.
00:18:44.950 --> 00:18:48.530
We don't actually like bundle
our thermostat DR program
00:18:48.530 --> 00:18:50.970
in with some other offer.
00:18:50.970 --> 00:18:54.000
It's okay, here's our program,
00:18:54.000 --> 00:18:56.570
if you enroll, you get this benefit.
00:18:56.570 --> 00:18:58.853
And so people understand
what they're getting into.
00:19:01.010 --> 00:19:01.843
All right.
00:19:01.843 --> 00:19:02.683
So enough on that one.
00:19:04.330 --> 00:19:07.210
We think that incentives
that could help reduce
00:19:07.210 --> 00:19:09.900
the customer's cost of smart thermostats
00:19:09.900 --> 00:19:13.580
or other devices what would help.
00:19:13.580 --> 00:19:15.380
And perhaps that could happen through
00:19:15.380 --> 00:19:17.263
some of the energy
efficiency dollars ECRF
00:19:17.263 --> 00:19:19.290
that was being discussed earlier
00:19:20.900 --> 00:19:24.384
as a way of subsidizing
00:19:24.384 --> 00:19:29.384
or somehow reducing
the cost of the thermostat.
00:19:29.570 --> 00:19:33.210
And if you do that
through an REP program,
00:19:33.210 --> 00:19:38.210
then it is something that
you can clearly kind of tie
00:19:38.580 --> 00:19:41.530
the results to the fact that
you spent these dollars.
00:19:41.530 --> 00:19:45.780
So work it through an REP
program that is designed
00:19:45.780 --> 00:19:47.673
to improve reliability.
00:19:49.320 --> 00:19:53.060
And then final thing is
as an administrative hurdle
00:19:53.060 --> 00:19:58.060
that we sort of observed
is that in the TDU programs
00:19:59.480 --> 00:20:04.480
and ERS, we have participated
in both of those in the past.
00:20:05.970 --> 00:20:09.120
They are pretty
inflexible when it comes to
00:20:12.930 --> 00:20:15.890
adding new customers or
taking out existing customers.
00:20:15.890 --> 00:20:20.890
So in other words when we
have to kind of set a few months
00:20:22.260 --> 00:20:23.926
in advance, this is
the list of customers
00:20:23.926 --> 00:20:27.193
who are gonna be
participating in this program.
00:20:28.420 --> 00:20:30.340
REPs are continually gaining customers
00:20:30.340 --> 00:20:32.340
and honestly losing them as well.
00:20:32.340 --> 00:20:35.523
But the customers
leave for various reasons.
00:20:37.320 --> 00:20:39.650
We would like to be able to, okay, well,
00:20:39.650 --> 00:20:40.750
we've lost some of these customers,
00:20:40.750 --> 00:20:42.603
but we've added a new one since then.
00:20:43.730 --> 00:20:45.170
We'd like some flexibility there.
00:20:45.170 --> 00:20:47.260
So far, that's not really...
00:20:48.350 --> 00:20:50.730
that's been something
that has been lacking
00:20:50.730 --> 00:20:54.480
that would make it a little
bit easier for us to participate
00:20:54.480 --> 00:20:56.483
in some of those some of those programs.
00:20:57.390 --> 00:20:59.750
So I think that's all I had.
00:20:59.750 --> 00:21:00.750
Thank you.
00:21:02.620 --> 00:21:07.620
Quick to your incentive
question and broader question,
00:21:08.720 --> 00:21:13.720
isn't the incentive to the
REP to the DR Program
00:21:13.910 --> 00:21:17.010
to be able to provide the
next marginal megawatt
00:21:17.010 --> 00:21:18.330
through demand response
00:21:18.330 --> 00:21:21.510
rather than a very expensive megawatt
00:21:21.510 --> 00:21:22.763
in the real-time market?
00:21:23.650 --> 00:21:24.570
Yes.
00:21:24.570 --> 00:21:25.403
I guess to be clear,
00:21:25.403 --> 00:21:27.790
there are two main
sources of value that we see,
00:21:27.790 --> 00:21:29.570
and that is one of them.
00:21:29.570 --> 00:21:34.030
The other one is that if
we participate in ERS,
00:21:34.030 --> 00:21:37.210
so we could aggregate our
customers and put them in ERS
00:21:38.290 --> 00:21:40.280
or in a TDU program,
00:21:40.280 --> 00:21:43.060
you can't do both the cause
that would be double counting,
00:21:43.060 --> 00:21:44.760
but you could do one or the other.
00:21:45.830 --> 00:21:49.170
So you can get a benefit from,
00:21:49.170 --> 00:21:54.170
a dollar benefit from the
TDSB let's say for participating.
00:21:54.350 --> 00:21:59.350
And you get the incremental cost benefit
00:21:59.360 --> 00:22:02.540
that you were describing
of replacing a high cost
00:22:02.540 --> 00:22:05.880
supply dollar with a low
cost supply dollar later on.
00:22:05.880 --> 00:22:06.713
Sure.
00:22:06.713 --> 00:22:08.760
So I will get some
second part of my question,
00:22:08.760 --> 00:22:10.950
if customers can
override this at any time
00:22:11.930 --> 00:22:15.480
and they can override it over
the longer the event goes on,
00:22:15.480 --> 00:22:17.590
as we saw on one of your graphs,
00:22:17.590 --> 00:22:21.580
then how can you provide reliable
00:22:24.130 --> 00:22:27.500
demand response to the ERCOT,
00:22:27.500 --> 00:22:32.160
whether in the form of
ERS or whatever future
00:22:32.160 --> 00:22:33.460
kind of ancillary service?
00:22:33.460 --> 00:22:36.320
Well, we heard earlier that you can,
00:22:36.320 --> 00:22:39.447
these programs are eligible
for ancillary services, right?
00:22:39.447 --> 00:22:41.000
But I mean, if they can override,
00:22:41.000 --> 00:22:42.020
if customers can override it,
00:22:42.020 --> 00:22:43.700
they can reduce participation.
00:22:43.700 --> 00:22:45.970
How can you guarantee
that demand response
00:22:45.970 --> 00:22:48.210
is there from a reliability perspective?
00:22:48.210 --> 00:22:50.020
So once you get to there is
00:22:50.020 --> 00:22:51.820
kind of the law of averages thing of
00:22:52.700 --> 00:22:55.230
since we're aggregating
a large group of customers
00:22:56.720 --> 00:23:00.450
we can gain that
experience of all right,
00:23:00.450 --> 00:23:02.860
over this period of
time, over four hours,
00:23:02.860 --> 00:23:05.790
we'll have on average
70% of the customers.
00:23:05.790 --> 00:23:09.360
So we will commit to providing an amount
00:23:09.360 --> 00:23:12.070
that's equal to 70% of the-
00:23:12.070 --> 00:23:15.380
We learned about averages
in June and expectations.
00:23:15.380 --> 00:23:17.393
And that's a dangerous game.
00:23:21.380 --> 00:23:23.080
I guess the key is that,
00:23:24.830 --> 00:23:29.633
with experience on on
implementing the demand response,
00:23:29.633 --> 00:23:34.633
what we've seen is under the
right temperature conditions,
00:23:35.640 --> 00:23:38.780
which are basically summertime
temperature conditions.
00:23:38.780 --> 00:23:43.780
We see a pretty consistent
KW of reduction per customer.
00:23:46.192 --> 00:23:50.020
And yes, again, some
customers will drop out in that,
00:23:50.020 --> 00:23:51.668
but our experience has been
00:23:51.668 --> 00:23:52.663
that it's been pretty consistent.
00:23:53.767 --> 00:23:55.640
So I think you
touched on a point earlier,
00:23:55.640 --> 00:24:00.490
and also, I think I've
engagement with your company.
00:24:00.490 --> 00:24:05.430
I've heard a little bit about
your support for aggregation
00:24:05.430 --> 00:24:09.860
to participate in ERS and more
residential DR TDU programs,
00:24:09.860 --> 00:24:11.010
et cetera.
00:24:11.010 --> 00:24:13.807
But one challenge is that,
especially as a big rep,
00:24:13.807 --> 00:24:15.760
you have a lot of
customers coming and going,
00:24:15.760 --> 00:24:17.370
even within that aggregation.
00:24:17.370 --> 00:24:20.250
So would you rely on
historical averages as well
00:24:20.250 --> 00:24:23.340
to try to, I mean, cause you as a rep,
00:24:23.340 --> 00:24:25.180
you're gaining and losing customers.
00:24:25.180 --> 00:24:27.750
And if you're going to
proffer in aggregation
00:24:27.750 --> 00:24:30.490
to participate in ERs, for example,
00:24:30.490 --> 00:24:34.193
that aggregation customer
irrigation number can change.
00:24:35.330 --> 00:24:37.803
So how do you mitigate
against that risk?
00:24:39.200 --> 00:24:42.864
Yeah, it's a case where we...
00:24:42.864 --> 00:24:44.870
It's actually not dissimilar
00:24:44.870 --> 00:24:47.630
to how we go about buying supply.
00:24:47.630 --> 00:24:52.570
We understand that when
we sign up 1000 customers
00:24:54.660 --> 00:24:59.070
that at some period of time
later we'll have 950 customers
00:24:59.070 --> 00:25:01.053
or 900 customers.
00:25:02.210 --> 00:25:04.470
And so it would be similar here.
00:25:04.470 --> 00:25:07.520
We understand that at the
beginning of the summer,
00:25:07.520 --> 00:25:08.990
we've got a thousand
at the end of the summer,
00:25:08.990 --> 00:25:11.263
we might have 900.
00:25:12.550 --> 00:25:16.250
And so what we will do
is we will bid into ERS
00:25:16.250 --> 00:25:19.453
something that's at that minimum level.
00:25:21.750 --> 00:25:22.767
We wouldn't say,
00:25:22.767 --> 00:25:24.650
"Oh, we're gonna have a
thousand the whole summer."
00:25:24.650 --> 00:25:26.200
'Cause we wouldn't expect that.
00:25:31.180 --> 00:25:35.230
Is there anything
preventing your company
00:25:35.230 --> 00:25:38.260
from expanding this effort
and expanding this program
00:25:38.260 --> 00:25:40.800
right now, other than just
customer engagement,
00:25:40.800 --> 00:25:42.730
preferences, et cetera?
00:25:42.730 --> 00:25:43.563
Is there anything that we need to do
00:25:43.563 --> 00:25:45.565
on this side of the table?
00:25:45.565 --> 00:25:49.840
The incentives noted and
admit the administrative,
00:25:49.840 --> 00:25:51.300
that seems like a very marginal change.
00:25:51.300 --> 00:25:53.450
Is there anything
structural we need to do?
00:25:54.580 --> 00:25:56.817
Or is there anything on
our side and the PUC side,
00:25:56.817 --> 00:26:00.530
the market side, preventing
this program from expanding,
00:26:00.530 --> 00:26:03.140
however broadly your
customers and price signals
00:26:04.410 --> 00:26:05.800
would want?
00:26:05.800 --> 00:26:08.913
I wouldn't say there's
anything preventing it.
00:26:10.000 --> 00:26:13.590
I think that through incentives
we could make it go faster.
00:26:13.590 --> 00:26:15.300
So you
don't think $50 million
00:26:15.300 --> 00:26:18.393
is an impediment right now on ERS.
00:26:19.316 --> 00:26:20.410
'Cause that's a hard cap.
00:26:20.410 --> 00:26:21.623
It is a hard cap.
00:26:25.893 --> 00:26:29.000
And I would say that if that, if ERS is,
00:26:29.000 --> 00:26:31.520
if the $50 million is raised,
00:26:31.520 --> 00:26:36.080
that I would love to see that
incremental part be dedicated,
00:26:36.080 --> 00:26:38.523
allocated towards residential DR.
00:26:39.880 --> 00:26:42.450
Yeah, but I
mean, at the same time,
00:26:42.450 --> 00:26:43.660
if that's of your sources,
00:26:43.660 --> 00:26:45.310
one of your two sources of value,
00:26:48.510 --> 00:26:50.990
like I said, skydiving
on averages don't work
00:26:50.990 --> 00:26:53.140
when it comes to reliability
and scarcity events
00:26:53.140 --> 00:26:56.720
hoping that 65% of my
DR thermostat show up.
00:26:56.720 --> 00:26:59.330
It does not put their car
control room in a reliable spot
00:26:59.330 --> 00:27:01.550
and does not put Texas
in her reliable spot.
00:27:01.550 --> 00:27:02.673
But at the same time,
00:27:03.508 --> 00:27:06.493
you get 100% of the customers
who show up in real time.
00:27:07.590 --> 00:27:09.870
So there may be a business argument
00:27:09.870 --> 00:27:13.930
for passing by the ERS 50 million,
00:27:13.930 --> 00:27:17.790
because you don't know how
big the benefit is in real time.
00:27:17.790 --> 00:27:20.290
It could be bigger than
whatever your cost is
00:27:20.290 --> 00:27:25.150
or opportunity cost is
on the 50 million on ERS.
00:27:25.150 --> 00:27:27.170
And you get to count 100% of the people
00:27:27.170 --> 00:27:29.320
that are actually
doing it that day, right?
00:27:31.580 --> 00:27:34.580
100% of the people that
participate in the program that day.
00:27:36.880 --> 00:27:39.120
We would get
the market price benefit
00:27:39.120 --> 00:27:42.260
of 100% of the people
that participate that day,
00:27:42.260 --> 00:27:43.093
that's right.
00:27:44.970 --> 00:27:47.178
I guess I just, I would just reiterate
00:27:47.178 --> 00:27:51.770
that we have seen that
that reduction amount
00:27:51.770 --> 00:27:53.390
is pretty consistent.
00:27:53.390 --> 00:27:55.410
So in other words, again,
00:27:55.410 --> 00:27:58.840
I wouldn't bid 100% into ERS,
00:27:58.840 --> 00:28:02.550
I would bid 70% into
ERS because I have seen
00:28:02.550 --> 00:28:05.053
consistently that we
get that 70% benefit.
00:28:07.030 --> 00:28:10.830
One more question
from a REP point of view,
00:28:10.830 --> 00:28:13.813
ancillary service charges and costs.
00:28:15.530 --> 00:28:20.530
How does that factor into
your demand response,
00:28:21.570 --> 00:28:23.203
calculus and programs?
00:28:24.360 --> 00:28:27.913
How does that work in
today's market design for you?
00:28:28.800 --> 00:28:32.300
So there are some
ancillary service concepts
00:28:32.300 --> 00:28:36.730
had been discussed that
would basically require
00:28:36.730 --> 00:28:40.100
in order for residential
DR to participate
00:28:40.100 --> 00:28:42.570
would require real-time telemetry
00:28:44.370 --> 00:28:46.700
at the individual customer level.
00:28:46.700 --> 00:28:48.550
So at every resource.
00:28:48.550 --> 00:28:52.960
So and that kind of,
that idea of telemetry
00:28:52.960 --> 00:28:55.360
real-time telemetry
signals being sent to caught
00:28:56.690 --> 00:28:59.740
it's just not really not really viable.
00:28:59.740 --> 00:29:04.740
So I would agree with Mr
omens point earlier that ERS,
00:29:06.120 --> 00:29:09.413
weather sensor ERS is
the best vehicle right now.
00:29:10.520 --> 00:29:13.860
There have been ideas floated around
00:29:13.860 --> 00:29:17.710
of how ancillary service
structures could be changed
00:29:17.710 --> 00:29:20.590
and there may still be
some idea that someone
00:29:20.590 --> 00:29:22.070
comes up with that
that would work better,
00:29:22.070 --> 00:29:26.950
but at this point I'm
doing residential DR
00:29:26.950 --> 00:29:29.010
or some sort of a
residential aggregation
00:29:29.010 --> 00:29:32.330
in an ancillary service
doesn't really work
00:29:32.330 --> 00:29:34.160
just because of the
telemetry requirements
00:29:34.160 --> 00:29:35.600
that would be needed.
00:29:35.600 --> 00:29:38.920
What about future products?
00:29:38.920 --> 00:29:43.080
Again and you're speaking
to it from the carrot side,
00:29:43.080 --> 00:29:47.610
but on the stick side if,
00:29:47.610 --> 00:29:50.750
if there were more ancillary
services imposed on the market,
00:29:50.750 --> 00:29:53.140
which we're having
to take a bit of out of
00:29:53.140 --> 00:29:56.170
market action these
days right now to stabilize
00:29:56.170 --> 00:30:00.563
the system and operate it in
a more conservative approach,
00:30:01.557 --> 00:30:05.870
if more of those or
different ancillary services
00:30:05.870 --> 00:30:08.000
were imposed in the future to meet
00:30:08.000 --> 00:30:10.490
various performance
metrics for the operator
00:30:10.490 --> 00:30:14.410
to better reliably administer the system
00:30:14.410 --> 00:30:17.950
but DR was included as a offset measure
00:30:18.880 --> 00:30:22.330
that would obviously
incent heavy participation
00:30:22.330 --> 00:30:24.530
in an a DR program, I would assume.
00:30:24.530 --> 00:30:26.350
Yes, it would.
00:30:26.350 --> 00:30:27.183
Okay.
00:30:29.370 --> 00:30:30.290
All right, thank you, sir.
00:30:30.290 --> 00:30:32.337
Welcome to step on the panel
and answer follow-up questions
00:30:32.337 --> 00:30:34.120
if you are with the other members.
00:30:34.120 --> 00:30:36.503
I think next up is Oncor or so.
00:30:46.800 --> 00:30:48.700
Good afternoon
chairman, Commissioners,
00:30:48.700 --> 00:30:49.790
I'm Liz Jones,
00:30:49.790 --> 00:30:52.583
vice president of
regulatory affairs for Oncor.
00:30:54.010 --> 00:30:56.480
I am here specifically to talk with you
00:30:56.480 --> 00:31:00.860
about the Oncor residential
demand response program,
00:31:00.860 --> 00:31:04.270
but through the morning
you pose several questions
00:31:04.270 --> 00:31:06.810
that you deferred for TDUs
00:31:06.810 --> 00:31:09.653
and I can speak to at least
some of those, if you wish.
00:31:13.570 --> 00:31:14.403
Yes?
00:31:14.403 --> 00:31:15.236
Sure.
00:31:15.236 --> 00:31:16.069
Okay.
00:31:16.069 --> 00:31:16.902
If you want to handle it
00:31:16.902 --> 00:31:18.070
at the end of your
presentation, that's fine as well.
00:31:18.070 --> 00:31:18.903
Okay.
00:31:19.990 --> 00:31:21.380
So Commissioner Cobos,
00:31:21.380 --> 00:31:25.200
you in particular were
concerned about realizing
00:31:25.200 --> 00:31:28.600
the value of distribution resources
00:31:28.600 --> 00:31:30.860
during a load shed event
00:31:30.860 --> 00:31:33.633
and wanted to address
that because it is something
00:31:33.633 --> 00:31:38.020
that we have struggled with
for over a decade at ERCOT.
00:31:38.020 --> 00:31:41.380
And the problem is
much like our discussion
00:31:41.380 --> 00:31:44.863
a month ago or so about critical load,
00:31:46.310 --> 00:31:49.640
distributed resources
are sprinkled throughout
00:31:49.640 --> 00:31:51.510
our distribution feeders,
00:31:51.510 --> 00:31:56.510
and we account for them
in the sense of recognizing
00:31:57.030 --> 00:32:00.190
what the net load is
on a particular feeder.
00:32:00.190 --> 00:32:05.190
So let's say, we had a
feeder that had one megawatt,
00:32:05.490 --> 00:32:09.750
and had in turn or three megawatts,
00:32:09.750 --> 00:32:12.180
and it turns out there
was a one megawatt
00:32:12.180 --> 00:32:15.000
distributed generator that was active.
00:32:15.000 --> 00:32:18.690
That feeder would look to
us for load shed purposes
00:32:18.690 --> 00:32:22.630
like it had two megawatts of load.
00:32:22.630 --> 00:32:27.630
So we can manage
shallow load shed events,
00:32:27.780 --> 00:32:31.530
say 500 megawatts rather
than 20,000 megawatts
00:32:31.530 --> 00:32:33.650
in a way that can maximize
00:32:33.650 --> 00:32:35.897
the value of the distributed generation.
00:32:35.897 --> 00:32:40.790
But we can't necessarily
do that in every short event.
00:32:40.790 --> 00:32:44.110
And the tagline on that is
00:32:48.180 --> 00:32:51.050
distributed generation resources,
00:32:51.050 --> 00:32:54.113
which Canon Gilman
spoke about this morning,
00:32:55.700 --> 00:32:59.030
those are able to
offer ancillary services
00:32:59.030 --> 00:33:01.610
and are in turn required
to be on theaters
00:33:01.610 --> 00:33:03.630
that will not be shed.
00:33:03.630 --> 00:33:07.960
And so there is a category
of distributed generation
00:33:07.960 --> 00:33:10.490
that can be protected from load shed.
00:33:10.490 --> 00:33:13.270
And that is an option that is available
00:33:13.270 --> 00:33:14.750
to distributed generators.
00:33:14.750 --> 00:33:18.400
It costs more because
you're essentially reserving
00:33:18.400 --> 00:33:22.193
your own feeder, but it also
provides greater reliability.
00:33:23.090 --> 00:33:24.890
I would urge you not to
00:33:26.620 --> 00:33:29.740
immediately exclude
distributed generation
00:33:29.740 --> 00:33:31.500
based on hurricane, sorry,
00:33:31.500 --> 00:33:33.533
not hurricane Winter Storm Uri.
00:33:34.490 --> 00:33:37.440
Because I think if you were to do so,
00:33:37.440 --> 00:33:40.630
you would also decline
benefits that they offer
00:33:40.630 --> 00:33:43.000
during other times when
we don't actually get
00:33:43.000 --> 00:33:44.093
to from load shed.
00:33:45.920 --> 00:33:49.400
The second issue is
00:33:50.460 --> 00:33:55.460
the notion of weatherization
and whether TDU programs
00:33:57.160 --> 00:33:58.880
should engage in more weatherization
00:33:58.880 --> 00:34:01.083
and less demand response.
00:34:02.880 --> 00:34:05.290
One of the obligations
that each of us has
00:34:05.290 --> 00:34:07.740
and Lark spoke to it earlier
00:34:07.740 --> 00:34:11.910
is our programs must be
demonstrably cost-effective
00:34:11.910 --> 00:34:15.630
and weatherization
presents a tremendous benefit
00:34:15.630 --> 00:34:17.910
to the individual customer,
00:34:17.910 --> 00:34:22.250
but it is extremely expensive
relative to the number
00:34:22.250 --> 00:34:25.930
of KW or KWH that are saved.
00:34:25.930 --> 00:34:30.380
And so while the low income
and hard to reach programs
00:34:30.380 --> 00:34:32.650
are principally focused on that,
00:34:32.650 --> 00:34:36.250
we do not have broader
weatherization programs
00:34:36.250 --> 00:34:38.050
and that's the principle reason why.
00:34:39.750 --> 00:34:44.750
Finally there is an argument
that demand response
00:34:45.120 --> 00:34:49.770
is not real energy efficiency,
and I respect that argument,
00:34:49.770 --> 00:34:51.193
but I will tell you that,
00:34:53.370 --> 00:34:56.830
it is relatively low cost.
00:34:56.830 --> 00:35:01.530
So we aren't engaged
in helping folks buy
00:35:01.530 --> 00:35:05.000
new air conditioners or heat pumps
00:35:05.000 --> 00:35:07.770
or any of the other kinds of appliances
00:35:07.770 --> 00:35:10.113
for lighting or refrigeration.
00:35:11.680 --> 00:35:15.850
So we are not making as
large a capital expenditure
00:35:15.850 --> 00:35:18.480
of our energy efficiency dollars.
00:35:18.480 --> 00:35:21.290
So in fact, while we do have
to spend them year after year,
00:35:21.290 --> 00:35:24.020
if it's demand response, and
we would only spend them once,
00:35:24.020 --> 00:35:26.593
if it was real energy efficiency,
00:35:27.780 --> 00:35:30.840
I think you have to
balance what you expect
00:35:30.840 --> 00:35:31.900
from the programs.
00:35:31.900 --> 00:35:33.300
And once you do,
00:35:33.300 --> 00:35:36.900
we will develop the
programs that you want us to.
00:35:36.900 --> 00:35:40.780
Because TDU energy efficiency
since its inception incentive
00:35:40.780 --> 00:35:45.780
bill seven has been
designed to bridge if you will,
00:35:45.920 --> 00:35:50.080
the current state of
events and equipment
00:35:50.080 --> 00:35:55.080
to some future market
state where the 12 sear
00:35:55.700 --> 00:35:59.310
air conditioner is common
so we're gonna go to 14.
00:35:59.310 --> 00:36:02.000
The 14 becomes common,
so we're gonna go to 16.
00:36:02.000 --> 00:36:06.010
There are all sorts of ways in that vein
00:36:06.010 --> 00:36:08.330
that the energy efficiency
programs are continuing
00:36:08.330 --> 00:36:10.453
to move forward and push the envelope.
00:36:11.850 --> 00:36:15.940
So and then the last
piece, and I'm sorry,
00:36:15.940 --> 00:36:18.590
I can't remember who
asked the question originally,
00:36:18.590 --> 00:36:21.243
if we did demand response right,
00:36:22.170 --> 00:36:24.403
would we need to have a TDU program?
00:36:26.180 --> 00:36:27.013
Maybe not.
00:36:27.870 --> 00:36:30.880
And that's certainly been a
healthy topic of conversation
00:36:30.880 --> 00:36:31.963
with your staff.
00:36:33.800 --> 00:36:37.950
The issue is that for customers
who see average pricing,
00:36:37.950 --> 00:36:39.750
and there are a lot of
them in the residential
00:36:39.750 --> 00:36:40.913
and commercial sectors,
00:36:42.420 --> 00:36:46.280
the sort of cost-based
price-based programs
00:36:46.280 --> 00:36:48.710
that we talk about in the market
00:36:48.710 --> 00:36:52.350
don't have any effect
on those retail customers.
00:36:52.350 --> 00:36:55.230
And so you have to
think about another way
00:36:55.230 --> 00:36:56.970
of trying to reach them.
00:36:56.970 --> 00:36:58.560
And this is the mechanism
00:36:58.560 --> 00:37:01.273
that is least in
impartial use right now.
00:37:03.245 --> 00:37:04.653
Thank you, Liz.
00:37:07.260 --> 00:37:08.093
So I have...
00:37:08.093 --> 00:37:10.200
my initial slider is full of things
00:37:10.200 --> 00:37:13.250
that you've already
heard from everyone else
00:37:13.250 --> 00:37:17.520
with the exception that
ERCOT TDUs presently
00:37:17.520 --> 00:37:18.710
can offer our DR
00:37:18.710 --> 00:37:21.820
only through our energy
efficiency programs.
00:37:21.820 --> 00:37:26.820
And we, the TDUs are
not allowed to provide
00:37:26.850 --> 00:37:30.160
energy efficiency dollars
directly to customers.
00:37:30.160 --> 00:37:35.160
We must review and sponsor
programs that the vendors offer.
00:37:35.760 --> 00:37:37.640
And then we pay the vendors
00:37:37.640 --> 00:37:41.363
and the vendors have a
contract with the customer.
00:37:42.410 --> 00:37:45.410
And in some cases that's visible to us,
00:37:45.410 --> 00:37:47.110
but that's not within our control.
00:37:54.000 --> 00:37:58.830
We've talked earlier today
about the summer peak period
00:37:58.830 --> 00:38:03.193
as the demand response
window for TDU programs.
00:38:04.400 --> 00:38:05.920
I think Lark's correct when she says
00:38:05.920 --> 00:38:08.260
we could do that as a winter program.
00:38:08.260 --> 00:38:12.840
I don't think it takes into
account year round occasions,
00:38:12.840 --> 00:38:15.570
and it may be worth thinking
about year round occasions,
00:38:15.570 --> 00:38:19.330
because some of the short
supply events that have occurred
00:38:19.330 --> 00:38:24.290
across my time here have
been in April or October
00:38:24.290 --> 00:38:28.463
and not in February or August.
00:38:30.910 --> 00:38:33.080
The other question that
you all have wrestled with
00:38:33.080 --> 00:38:37.670
is at what point do you want
to deploy demand response?
00:38:37.670 --> 00:38:40.750
Because right now the
TDU programs are designed
00:38:40.750 --> 00:38:43.080
to be implemented in a EEA2
00:38:45.170 --> 00:38:48.580
so short affirm load
shed, but not by much.
00:38:48.580 --> 00:38:52.543
I think Derek said it well
when he said you know,
00:38:55.138 --> 00:38:56.930
DR has a shelf life,
00:38:56.930 --> 00:39:00.110
particularly when all these
customers can override it.
00:39:00.110 --> 00:39:03.680
And so the more often you call on it,
00:39:03.680 --> 00:39:06.400
I believe the less
effective it will turn out to be
00:39:06.400 --> 00:39:09.060
particularly at the residential level.
00:39:09.060 --> 00:39:11.930
And so I think you need to balance that.
00:39:11.930 --> 00:39:13.750
And I think that is a limitation
00:39:13.750 --> 00:39:16.650
in the way residential
demand response works
00:39:16.650 --> 00:39:19.640
relative to large
commercial and industrial.
00:39:19.640 --> 00:39:22.143
Costco condemn it's lights all day long,
00:39:23.410 --> 00:39:26.313
houses need air conditioning
back at some point.
00:39:30.300 --> 00:39:31.480
The other piece is
00:39:33.060 --> 00:39:36.580
we actually do test
sometime during May and June
00:39:36.580 --> 00:39:41.090
to make sure that the bid
in for these TDU programs
00:39:41.090 --> 00:39:44.920
are accurate and justified.
00:39:44.920 --> 00:39:47.800
And so I will tell you
that this year's test
00:39:49.040 --> 00:39:54.040
occurred on June 17th and we had 40.7,
00:39:54.190 --> 00:39:55.590
this is Oncor only,
00:39:55.590 --> 00:39:59.130
we had 40.7 megawatts
in the residential,
00:39:59.130 --> 00:40:03.530
and we actually had a
total of 103.2 megawatts
00:40:03.530 --> 00:40:04.950
in the commercial.
00:40:04.950 --> 00:40:07.520
But because of the program design,
00:40:07.520 --> 00:40:11.920
the commercial was limited to 78.1.
00:40:11.920 --> 00:40:15.113
So we paid for 78.1 and we got 103.
00:40:23.470 --> 00:40:26.330
So we could talk about
irrespective of who is offering
00:40:26.330 --> 00:40:29.150
the residential demand response program,
00:40:29.150 --> 00:40:33.070
the number and type of devices
that are available in a home
00:40:33.070 --> 00:40:36.040
to be controlled is fairly limited.
00:40:36.040 --> 00:40:37.150
I mean, the conventional wisdom
00:40:37.150 --> 00:40:42.150
is you got AC/ heat pump,
water heater if it's electric,
00:40:42.900 --> 00:40:44.140
pool pump.
00:40:44.140 --> 00:40:47.400
And that's pretty much
all the bang for the buck
00:40:47.400 --> 00:40:49.953
that you can get in a single house.
00:40:51.740 --> 00:40:54.350
There's also a question of how much
00:40:54.350 --> 00:40:57.800
we should aggregate or dis-aggregate
00:40:57.800 --> 00:40:59.180
residential demand response,
00:40:59.180 --> 00:41:02.210
because of course any
one house is not valuable,
00:41:02.210 --> 00:41:04.963
but 10,000 houses is a lot.
00:41:06.940 --> 00:41:09.410
We have talked at ERCOT
and I expect we will continue
00:41:09.410 --> 00:41:10.360
to talk here.
00:41:10.360 --> 00:41:14.890
Canon mentioned it that
depending on what kind of service
00:41:14.890 --> 00:41:17.660
residential demand response is used for
00:41:17.660 --> 00:41:20.390
it either is very important
that we're very specific
00:41:20.390 --> 00:41:23.840
about what settlement node
00:41:23.840 --> 00:41:27.913
those customers reside
are electrically connected to,
00:41:28.870 --> 00:41:32.190
for others, if there's
an overall reduction
00:41:32.190 --> 00:41:33.023
in energy demand,
00:41:33.023 --> 00:41:35.210
we're grateful for it
for wherever it comes.
00:41:38.460 --> 00:41:41.460
Average pricing on residential plans.
00:41:41.460 --> 00:41:42.293
Again,
00:41:44.360 --> 00:41:47.960
the retailer or the third-party provider
00:41:47.960 --> 00:41:52.960
sees a lot of upside or downside
from the wholesale price.
00:41:53.010 --> 00:41:55.550
The residential customer
typically does not.
00:41:55.550 --> 00:41:58.370
And in fact, you all are
engaged in a rulemaking
00:41:58.370 --> 00:42:02.190
that is expressly designed
to limit that exposure, right?
00:42:02.190 --> 00:42:03.933
So that makes a difference.
00:42:05.270 --> 00:42:08.970
The other piece is, I'm sorry.
00:42:08.970 --> 00:42:10.390
Well, you've
mentioned that several times
00:42:10.390 --> 00:42:13.450
and especially after recent legislation
00:42:15.140 --> 00:42:18.580
a lot like the legislature
and as a result of
00:42:18.580 --> 00:42:20.790
our rulemaking is designed to limit,
00:42:20.790 --> 00:42:23.640
very specifically limit
individual residential customers,
00:42:23.640 --> 00:42:26.210
exposures to variable rates, right?
00:42:26.210 --> 00:42:29.690
So if you've mentioned this
several times as a challenge
00:42:29.690 --> 00:42:30.780
to getting customer,
00:42:30.780 --> 00:42:35.780
to helping that customer
feel the incentive of demand,
00:42:36.360 --> 00:42:38.060
that would prompt demand response.
00:42:41.370 --> 00:42:45.590
How would you suggest we
address that in the fact pattern
00:42:45.590 --> 00:42:50.450
that we cannot move
away from average pricing
00:42:50.450 --> 00:42:54.550
or we will not be
implementing variable pricing
00:42:54.550 --> 00:42:56.060
on residential homes?
00:42:56.060 --> 00:42:57.500
Well, to the extent
that we're talking
00:42:57.500 --> 00:43:01.650
about market based programs
for residential demand response,
00:43:01.650 --> 00:43:04.810
you can't use the
stick of price exposure.
00:43:04.810 --> 00:43:06.350
So you're gonna have to use the carrot,
00:43:06.350 --> 00:43:11.350
which is how much money
are we as market construct
00:43:11.410 --> 00:43:15.740
prepared to pay to individual
residential customers
00:43:15.740 --> 00:43:17.270
for changing their behavior.
00:43:17.270 --> 00:43:21.930
Or is there enough sticking
carrot at the REP level that,
00:43:23.340 --> 00:43:26.980
I mean, like Mr Mauzy said,
00:43:26.980 --> 00:43:29.530
there's nothing preventing
them other than price signals
00:43:29.530 --> 00:43:33.290
from expanding this program
and customer intent, right?
00:43:33.290 --> 00:43:35.150
I mean, there's a lot
of stick in a lot of care
00:43:35.150 --> 00:43:37.040
at the REP level.
00:43:37.040 --> 00:43:41.510
Well, and to the extent
that average retail prices
00:43:41.510 --> 00:43:46.090
were wholesale prices
were consistently higher
00:43:46.090 --> 00:43:48.540
as they are in, for
instance, California,
00:43:48.540 --> 00:43:51.350
I think that the demand
response economic equation
00:43:51.350 --> 00:43:52.763
would change meaningfully.
00:43:53.710 --> 00:43:56.220
I can't speak to what
it is or is not here,
00:43:56.220 --> 00:44:00.060
but I suspect it is a
lot less, most days,
00:44:00.060 --> 00:44:01.160
most parts of the year
00:44:02.250 --> 00:44:03.103
Let's hope so.
00:44:10.210 --> 00:44:12.090
Mr. Barnes at one point said that reps
00:44:12.090 --> 00:44:14.730
in many ways are
financial risk providers,
00:44:14.730 --> 00:44:17.950
the risk and reward of all
the tools that their disposal,
00:44:17.950 --> 00:44:20.500
including demand response resides
00:44:20.500 --> 00:44:22.103
at the retail electric provider.
00:44:23.300 --> 00:44:28.300
And that benefits the customer,
00:44:28.640 --> 00:44:31.570
the individual household in many ways is
00:44:31.570 --> 00:44:34.050
in that household is
not exposed to the risk
00:44:34.050 --> 00:44:35.610
of variable rates,
00:44:35.610 --> 00:44:38.460
but at the same time,
they don't reap the rewards
00:44:39.370 --> 00:44:43.690
like they do, as a retail
electric provider would.
00:44:43.690 --> 00:44:47.400
Well, you and Brad
Jones have spoken throughout
00:44:47.400 --> 00:44:51.550
these past months about
the value of conservation
00:44:51.550 --> 00:44:54.920
and conservation is an
unpaid demand response.
00:44:54.920 --> 00:44:58.380
And I frankly think there is,
00:44:58.380 --> 00:45:01.163
sort of back to your behavioral
program modification.
00:45:02.190 --> 00:45:04.880
I think there's a lot
of opportunity there
00:45:04.880 --> 00:45:06.220
that isn't about changing hand.
00:45:06.220 --> 00:45:09.083
When you say it's
unpaid, unpaid to who?
00:45:10.710 --> 00:45:13.440
If Derek's able to get conserve
00:45:13.440 --> 00:45:15.660
through smart thermostats
and he doesn't have to go out
00:45:15.660 --> 00:45:20.660
and buy a $1,500 megawatt,
that's a huge benefit.
00:45:21.080 --> 00:45:21.990
That's whole a whole point.
00:45:21.990 --> 00:45:24.390
That's a big value driver
of the program, right?
00:45:25.420 --> 00:45:26.278
And when I say-
That a tremendous payment.
00:45:26.278 --> 00:45:27.170
No, that's right.
00:45:27.170 --> 00:45:30.080
I'm talking about unpaid
to the retail customer.
00:45:30.080 --> 00:45:32.910
So I, in my home have a
programmable thermostat
00:45:32.910 --> 00:45:36.130
and I use it aggressively
to manage my energy,
00:45:36.130 --> 00:45:40.900
but I'm not part of Austin Energy's RDR.
00:45:40.900 --> 00:45:42.030
I mean,
00:45:42.030 --> 00:45:43.480
that's something that I
would prefer to exercise
00:45:43.480 --> 00:45:47.500
personal control over and
I suspect that that is true
00:45:47.500 --> 00:45:48.800
of many customers,
00:45:48.800 --> 00:45:52.070
particularly having
undertaken an advanced meter
00:45:52.070 --> 00:45:56.850
deployment customers
are very uncomfortable
00:45:56.850 --> 00:46:01.193
with having external
control in their homes.
00:46:02.152 --> 00:46:04.660
Understandably.
00:46:04.660 --> 00:46:07.000
But I hear this a lot
and this is not you,
00:46:07.000 --> 00:46:08.710
but that residential customers
00:46:08.710 --> 00:46:10.403
don't get paid for conserving.
00:46:12.120 --> 00:46:15.180
And I wanna make sure
that folks understand
00:46:15.180 --> 00:46:16.013
and correct me if I'm wrong,
00:46:16.013 --> 00:46:20.010
but they're electric
providers get paid a lot
00:46:20.010 --> 00:46:22.680
for incentivizing them
through time of day or rebates
00:46:22.680 --> 00:46:26.670
or whatever mechanism I mean,
00:46:26.670 --> 00:46:29.420
but there's substantial
rewards for conservation
00:46:29.420 --> 00:46:31.530
in the current market construct.
00:46:31.530 --> 00:46:34.070
That's just allocated to
the retail electric provider
00:46:34.070 --> 00:46:36.580
who then chooses how to
allocate that reward to the customer
00:46:36.580 --> 00:46:38.600
on a company by company basis.
00:46:38.600 --> 00:46:40.410
And that reward under
our current framework
00:46:40.410 --> 00:46:42.480
is only allocated that hill provider
00:46:42.480 --> 00:46:45.360
'cause they're also taking on the risk.
00:46:45.360 --> 00:46:46.760
Is that fair?
00:46:46.760 --> 00:46:47.593
Yes.
00:46:47.593 --> 00:46:48.530
And it doesn't even need to be a rep.
00:46:48.530 --> 00:46:51.630
It can be a third party
competitive service provider.
00:46:51.630 --> 00:46:52.463
Okay.
00:46:52.463 --> 00:46:53.807
So, I mean, there is
payment for conservation.
00:46:53.807 --> 00:46:54.780
There is.
00:46:54.780 --> 00:46:57.493
And so if within the market construct,
00:46:58.580 --> 00:47:00.123
even the TDU program,
00:47:01.120 --> 00:47:06.120
we write checks to REPs or
competitive service providers
00:47:06.140 --> 00:47:07.860
for their participation in this program
00:47:07.860 --> 00:47:11.133
and they demonstrate that
they can perform in this program.
00:47:12.420 --> 00:47:16.703
But as people talk about a
way to incent greater number
00:47:18.590 --> 00:47:22.000
or kind of residential demand response,
00:47:22.000 --> 00:47:25.810
I guess what I'm is the
current model doesn't assume
00:47:25.810 --> 00:47:29.490
that the economic benefit
is necessarily flowing directly
00:47:29.490 --> 00:47:31.660
to that residential customer.
00:47:31.660 --> 00:47:34.790
It is instead one step up the food chain
00:47:35.666 --> 00:47:37.020
And I suspect
we'll hear from some
00:47:37.020 --> 00:47:38.670
very clever REPs in our next panel
00:47:38.670 --> 00:47:41.380
about how they're competing to deliver
00:47:41.380 --> 00:47:42.920
those rewards to customers.
00:47:42.920 --> 00:47:43.753
That's right.
00:47:44.960 --> 00:47:47.600
So I've listed a couple other things
00:47:47.600 --> 00:47:51.490
that customers can override of a signal.
00:47:51.490 --> 00:47:53.820
They can sign up for multiple programs
00:47:54.910 --> 00:47:57.270
and then they can
also sign up for a benefit
00:47:57.270 --> 00:47:59.860
and then opt out of the obligation.
00:47:59.860 --> 00:48:01.040
We again,
00:48:01.040 --> 00:48:04.480
the paradigm is to
offer a lot of control
00:48:04.480 --> 00:48:06.080
for these residential customers.
00:48:07.380 --> 00:48:09.100
And then finally we
have device automation
00:48:09.100 --> 00:48:10.230
and customer awareness.
00:48:10.230 --> 00:48:14.290
And Derek spoke to the
test that happened to occur
00:48:14.290 --> 00:48:18.450
that it wasn't a TDU test
and it wasn't a REP test
00:48:18.450 --> 00:48:20.387
and it freaked a lot of people out.
00:48:20.387 --> 00:48:23.290
And some of 'em called the news station
00:48:23.290 --> 00:48:25.023
or talked to the journalist.
00:48:28.660 --> 00:48:33.180
The next page, I have talked
about a couple of things,
00:48:33.180 --> 00:48:35.110
the limitation to summer peak periods
00:48:35.110 --> 00:48:38.570
and the system wide
nature of the TDU programs.
00:48:38.570 --> 00:48:41.330
Those are potential areas for refinement
00:48:41.330 --> 00:48:46.330
in order to expand the RDR
usage throughout the year.
00:48:48.220 --> 00:48:50.130
The next to last bullet on the page
00:48:50.130 --> 00:48:53.030
is the most significant and
probably the most obvious
00:48:53.030 --> 00:48:55.063
given what we've already talked about.
00:48:56.105 --> 00:48:59.900
And that is the TDU residential
demand response programs
00:48:59.900 --> 00:49:03.630
are unlikely to fully fund
the program opportunities
00:49:03.630 --> 00:49:05.510
that exist in ERCOT.
00:49:05.510 --> 00:49:10.170
And so depending on your
objectives for load management,
00:49:10.170 --> 00:49:13.350
we probably need to talk about
a layered or tiered approach
00:49:13.350 --> 00:49:16.650
that specifies in some detail,
00:49:16.650 --> 00:49:19.250
what are your
expectations for a short term
00:49:19.250 --> 00:49:24.250
two hour turnaround versus
every day from three to five,
00:49:24.680 --> 00:49:25.673
for instance.
00:49:27.820 --> 00:49:29.500
And the other thing that we would note,
00:49:29.500 --> 00:49:31.280
and we're not wed to this concept,
00:49:31.280 --> 00:49:34.250
but we wanted to go
ahead and identify for you is
00:49:34.250 --> 00:49:38.520
it may be that a direct TDU program
00:49:38.520 --> 00:49:42.930
could be more beneficial to
the extent that the customers
00:49:42.930 --> 00:49:46.830
trust the TDU and are
more familiar with the TDU.
00:49:46.830 --> 00:49:49.610
We're not interested in
being a market participant,
00:49:49.610 --> 00:49:51.370
but we are interested in helping
00:49:51.370 --> 00:49:53.570
if you all believe that
would be beneficial.
00:49:54.640 --> 00:49:56.090
All right.
00:49:56.090 --> 00:49:56.923
Thank you, Ma'am.
00:49:56.923 --> 00:49:59.313
The last page
is the punchline.
00:50:00.920 --> 00:50:02.640
The first issue is customer value.
00:50:02.640 --> 00:50:07.000
The customers have to
find value in the program
00:50:09.270 --> 00:50:11.970
whether that's qualitative
or quantitative or economic
00:50:13.540 --> 00:50:14.630
market impact.
00:50:14.630 --> 00:50:16.880
I mean, we don't wanna
diminish the fact that
00:50:18.476 --> 00:50:22.420
demand response
programs in size and scope
00:50:22.420 --> 00:50:26.410
can have an impact on
wholesale market prices.
00:50:26.410 --> 00:50:28.880
And in the past couple years
00:50:28.880 --> 00:50:32.210
we've had a healthy
discussion about whether
00:50:32.210 --> 00:50:35.840
that kind of price impact
should be reflected in the ORDC
00:50:35.840 --> 00:50:39.037
and power balance from the curve.
00:50:39.037 --> 00:50:41.653
All the other market
mechanisms you here.
00:50:43.870 --> 00:50:46.430
We feel very strongly
about real time deliverability,
00:50:46.430 --> 00:50:48.120
and I'm sure you all do as well.
00:50:48.120 --> 00:50:50.130
And Derek talked about,
00:50:50.130 --> 00:50:53.410
I'm not sure I can get
100% so therefore I'm gonna
00:50:53.410 --> 00:50:56.210
discount the available
amount by what I think
00:50:56.210 --> 00:50:57.540
I can actually deliver.
00:50:57.540 --> 00:50:58.980
That's perfect.
00:50:58.980 --> 00:51:00.720
I will tell you that historically,
00:51:00.720 --> 00:51:04.590
the Commission has been
extremely aggressive against
00:51:04.590 --> 00:51:08.540
large load resources who underperform
00:51:08.540 --> 00:51:11.853
or don't perform at all
consistent with their obligations.
00:51:12.800 --> 00:51:16.510
The penalties are
significantly less for ERS
00:51:16.510 --> 00:51:17.820
and the TDU programs.
00:51:17.820 --> 00:51:20.700
And in fact, there's no
penalty in the TDU program,
00:51:20.700 --> 00:51:21.950
they just don't get paid.
00:51:23.160 --> 00:51:25.860
Is that why you
don't count it in emergencies?
00:51:25.860 --> 00:51:27.650
I mean, as per the winter event,
00:51:27.650 --> 00:51:30.710
you have 300 all in the ERCOT system
00:51:30.710 --> 00:51:32.520
and we didn't count that.
00:51:32.520 --> 00:51:35.520
That wasn't a realized in
your load shed numbers
00:51:35.520 --> 00:51:36.873
or anything like that.
00:51:37.710 --> 00:51:39.570
Because it's not controllable?
00:51:39.570 --> 00:51:42.790
Well, so the TDU did not
have a program in February.
00:51:42.790 --> 00:51:45.390
No TDU had a program in February.
00:51:45.390 --> 00:51:49.390
Ours are summer only
which is a fair topic, right?
00:51:49.390 --> 00:51:50.223
But that's why-
00:51:50.223 --> 00:51:51.390
But if we
were to go to winter,
00:51:51.390 --> 00:51:54.450
I mean, that would be
one of those instances
00:51:54.450 --> 00:51:56.623
where someone would
override their switch.
00:51:57.592 --> 00:51:58.800
(Peter laughing)
00:51:58.800 --> 00:52:00.700
I'm freezing to death, I'm turning on.
00:52:03.070 --> 00:52:05.740
Averages per pants
might not apply in that case.
00:52:05.740 --> 00:52:07.221
Maybe.
00:52:07.221 --> 00:52:08.200
And there's also a notion
00:52:08.200 --> 00:52:09.920
that it doesn't
necessarily get turned off,
00:52:09.920 --> 00:52:12.880
it gets adjusted by four
degrees or six degrees
00:52:12.880 --> 00:52:16.290
or something so that
somebody who had it said at 75
00:52:16.290 --> 00:52:18.350
might be looking at 69.
00:52:18.350 --> 00:52:20.853
And that's a little bit
of a different issue.
00:52:23.310 --> 00:52:25.400
Accountability and compliance.
00:52:25.400 --> 00:52:28.123
I mean, it's part of that same exercise.
00:52:29.050 --> 00:52:31.150
And there have been some discussions
00:52:32.153 --> 00:52:35.480
a little bit today from Cyrus
and certainly other days
00:52:35.480 --> 00:52:39.270
about what can the
advancement meters do here.
00:52:39.270 --> 00:52:43.760
And the situation is we
cannot provide real time data,
00:52:43.760 --> 00:52:47.400
but we can verify on a next day basis
00:52:47.400 --> 00:52:49.950
what the consumption was
at a particular household.
00:52:52.000 --> 00:52:54.693
And then finally
coordination of programs.
00:52:57.210 --> 00:52:58.043
So, Liz,
00:52:58.043 --> 00:53:00.963
I wanna ask you a couple
of clarifying questions.
00:53:02.270 --> 00:53:03.290
As you noted,
00:53:03.290 --> 00:53:04.970
we know the TDU load management programs
00:53:04.970 --> 00:53:07.200
are limited to the summer,
00:53:07.200 --> 00:53:09.660
and I just wanna clarify,
00:53:09.660 --> 00:53:12.500
so you're saying if we
wanted to extend the benefits
00:53:12.500 --> 00:53:14.270
of those programs into the winter,
00:53:14.270 --> 00:53:16.720
we'd wanna do it through
a residential DR program
00:53:18.430 --> 00:53:23.110
effort, or can we modify the
TDU load management program
00:53:23.110 --> 00:53:25.173
to cover summer and winter?
00:53:26.120 --> 00:53:28.830
I think you have
the existing authority
00:53:28.830 --> 00:53:29.963
to modify it.
00:53:30.900 --> 00:53:34.430
And I think the TDU
would certainly respond
00:53:34.430 --> 00:53:37.833
to some direction
from you on that point.
00:53:38.730 --> 00:53:40.420
I think the winter
program would be different
00:53:40.420 --> 00:53:44.020
because we would be
talking more about heat pumps
00:53:44.020 --> 00:53:46.120
and electric resistance heating
00:53:46.120 --> 00:53:49.600
and less about the
conventional pattern of AC
00:53:49.600 --> 00:53:51.810
'cause almost everybody uses electric AC
00:53:51.810 --> 00:53:53.580
and depending on the area,
00:53:53.580 --> 00:53:55.050
there can be a pretty sharp divide
00:53:55.050 --> 00:53:57.853
between gas fire heating
and electric heating.
00:54:00.180 --> 00:54:01.667
The other question
that I ask Canon
00:54:01.667 --> 00:54:05.060
and I'll ask you is,
00:54:05.060 --> 00:54:07.540
is there an opportunity that we can gain
00:54:08.990 --> 00:54:12.750
more reliability benefits
by moving the use of TDU
00:54:12.750 --> 00:54:16.733
load management programs
from EEA2 to EEA1 or earlier?
00:54:18.630 --> 00:54:22.260
So I'm gonna go
back to the how often
00:54:22.260 --> 00:54:23.730
do you wanna use it?
00:54:23.730 --> 00:54:26.990
What is the customer
tolerance for the use?
00:54:26.990 --> 00:54:29.880
How invasive is it to their daily lives?
00:54:29.880 --> 00:54:32.540
And I think that is a different answer
00:54:32.540 --> 00:54:35.100
for commercial versus residential.
00:54:35.100 --> 00:54:36.590
I think there's probably more tolerance
00:54:36.590 --> 00:54:38.893
in our commercial management programs.
00:54:41.520 --> 00:54:44.160
The other thing that I will
say is in my experience
00:54:44.160 --> 00:54:48.593
and not necessarily a
predictor of the future,
00:54:50.860 --> 00:54:54.770
there has been a
hesitation to call an alert,
00:54:54.770 --> 00:54:57.460
to call an EEA1 to call an EEA2.
00:54:57.460 --> 00:54:58.470
I mean, all of those,
00:54:58.470 --> 00:55:01.900
although they are permitted
under both the Commission rules
00:55:01.900 --> 00:55:04.270
and the NERC reliability standards,
00:55:04.270 --> 00:55:08.570
there is an obvious stigma
associated with them.
00:55:08.570 --> 00:55:13.030
And so if you are thinking
about moving them,
00:55:13.030 --> 00:55:16.340
I think it's important to
understand that is doing
00:55:17.490 --> 00:55:20.600
for the customers in the system
00:55:20.600 --> 00:55:23.433
relative to the risk that they face.
00:55:24.500 --> 00:55:27.010
I am not taking issue
at all with the desire
00:55:27.010 --> 00:55:31.520
to take a step back from the
physical scarcity as the driver
00:55:31.520 --> 00:55:34.520
of how we deploy programs.
00:55:34.520 --> 00:55:38.600
But I do think that
it's going to have to be
00:55:38.600 --> 00:55:41.500
well understood in order for the market
00:55:41.500 --> 00:55:44.963
to work around those signals.
00:55:46.570 --> 00:55:49.860
So if you wanna have a
price signal before you have
00:55:49.860 --> 00:55:52.530
a physical scarcity signal, that's fine.
00:55:52.530 --> 00:55:54.480
We just all need to
understand what that is
00:55:54.480 --> 00:55:55.780
and know when it's coming.
00:55:58.310 --> 00:56:00.950
So you talking
about tier TDU load
00:56:00.950 --> 00:56:02.230
management programs,
00:56:02.230 --> 00:56:06.320
I think SB3 has some
language in there about allowing
00:56:06.320 --> 00:56:09.730
the TDU to design and operate a
TDU load management program
00:56:09.730 --> 00:56:11.283
for non residential customers.
00:56:12.510 --> 00:56:15.480
It's not
allowing, it's a shall.
00:56:15.480 --> 00:56:17.230
Yeah, shall allow, sorry.
00:56:17.230 --> 00:56:19.110
Missed a word in my reading.
00:56:19.110 --> 00:56:19.943
Shall allow,
00:56:22.112 --> 00:56:25.350
so is that what you're talking
about when you mean tiered
00:56:25.350 --> 00:56:29.400
with respect to residential and CNI,
00:56:29.400 --> 00:56:32.200
'cause we're gonna have
to put this in role I believe.
00:56:32.200 --> 00:56:36.810
It's an SB3 it's a pretty
direct that's not this
00:56:36.810 --> 00:56:38.950
in our rule, thought it
wouldn't be in legislation.
00:56:38.950 --> 00:56:43.800
So that's an area
of concern I would say
00:56:43.800 --> 00:56:48.800
among the TDUs in the
sense of it's not clear whether
00:56:48.960 --> 00:56:52.900
this other SB3 sanction
commercial load management
00:56:52.900 --> 00:56:55.830
would be integrated
into energy efficiency
00:56:55.830 --> 00:56:59.603
or whether it would be
independent from energy efficiency.
00:57:00.560 --> 00:57:02.740
It's just simply not clear there.
00:57:02.740 --> 00:57:04.403
And additionally,
00:57:05.590 --> 00:57:08.420
there's a desire to make
sure that we are responsive
00:57:08.420 --> 00:57:11.333
to the legislature and the
tools that they have given us.
00:57:12.730 --> 00:57:17.290
But we have not
previously designed off peak
00:57:17.290 --> 00:57:21.060
in terms of the year commercial
load management programs.
00:57:21.060 --> 00:57:24.270
And I think all of us
have an interest in
00:57:24.270 --> 00:57:26.680
making sure that we understand
00:57:26.680 --> 00:57:29.113
what would be most
effective programmatically.
00:57:30.200 --> 00:57:33.890
So we're all signed up,
00:57:33.890 --> 00:57:36.140
we're just not sure where to start
00:57:36.140 --> 00:57:38.750
and would appreciate your direction.
00:57:38.750 --> 00:57:39.583
Well, on this one,
00:57:39.583 --> 00:57:42.660
a constraining factor is we
can't advance this program.
00:57:42.660 --> 00:57:46.490
I mean, we can't pull that out
and advance it ahead of EEA,
00:57:46.490 --> 00:57:48.860
it's at EEA2 statutorily.
00:57:48.860 --> 00:57:50.280
Yes, so I mean,
00:57:50.280 --> 00:57:52.360
that's a last resort
break the glass plan
00:57:52.360 --> 00:57:54.583
on your part or program.
00:57:55.750 --> 00:57:56.583
Yes.
00:57:56.583 --> 00:57:57.740
So that's what I
was sort of thinking
00:57:57.740 --> 00:57:59.930
and maybe tiered is not the right word.
00:57:59.930 --> 00:58:02.810
Maybe it's phased because if you have
00:58:02.810 --> 00:58:06.500
this CNI TDU load
management program or whatever
00:58:06.500 --> 00:58:08.410
it ends up being as
part of this legislation
00:58:08.410 --> 00:58:12.140
that's has to be implemented in EEA2,
00:58:12.140 --> 00:58:15.000
then perhaps the other
aspect of the program
00:58:15.000 --> 00:58:17.792
being used in EEA1, you have sort of
00:58:17.792 --> 00:58:21.760
two buckets of customers you can call on
00:58:21.760 --> 00:58:25.070
in an emergency as opposed
to calling on them all at once.
00:58:25.070 --> 00:58:29.900
At an EEA2, you can go EEA1, EEA2,
00:58:29.900 --> 00:58:34.030
and have reliability benefits from both.
00:58:34.030 --> 00:58:35.460
I think that's
certainly an option.
00:58:35.460 --> 00:58:39.020
The other thing is that it may be
00:58:39.020 --> 00:58:41.170
that for residential programs,
00:58:41.170 --> 00:58:45.330
which we think have a finite tolerance
00:58:45.330 --> 00:58:47.020
on the part of the customers,
00:58:47.020 --> 00:58:49.160
that we have different tranches
00:58:49.160 --> 00:58:52.490
of residential demand response,
00:58:52.490 --> 00:58:55.533
such that if we're an event,
00:58:56.560 --> 00:58:57.730
I won't label it,
00:58:57.730 --> 00:59:00.540
but if we are in a condition in which
00:59:00.540 --> 00:59:02.750
we want to call on demand response,
00:59:02.750 --> 00:59:05.200
maybe we make it available in a way
00:59:05.200 --> 00:59:08.090
that is hours, one through two,
00:59:08.090 --> 00:59:11.020
then hours three and
four, then hours five and six,
00:59:11.020 --> 00:59:15.310
so that you have a longer caution
00:59:16.970 --> 00:59:19.803
than what Derek was
describing is ordinarily the case.
00:59:20.890 --> 00:59:22.239
Yeah.
00:59:22.239 --> 00:59:23.680
I'll just add that that
there are definitely
00:59:23.680 --> 00:59:25.360
residential demand response programs
00:59:25.360 --> 00:59:27.350
that cycle through groups of customers
00:59:27.350 --> 00:59:29.870
as a way of spreading the reduction
00:59:29.870 --> 00:59:31.350
over a longer period of time,
00:59:31.350 --> 00:59:33.050
the reduction is gonna be shallow,
00:59:33.966 --> 00:59:35.840
'cause you're doing only
a few customers at a time,
00:59:35.840 --> 00:59:36.960
but you can,
00:59:36.960 --> 00:59:39.750
that is a solution if you're
looking for a longer span.
00:59:39.750 --> 00:59:41.489
Yeah, good point.
00:59:41.489 --> 00:59:42.967
Well thank you Liz.
00:59:42.967 --> 00:59:46.313
And while CPS comes up
for the next presentation,
00:59:49.690 --> 00:59:54.000
Canon can gimme a,
just a quick data point.
00:59:54.000 --> 00:59:56.813
We've talked a lot about
EEA1, EEA2, EEA3,
00:59:59.060 --> 01:00:02.620
exactly how many
megawatts are between moving
01:00:02.620 --> 01:00:06.990
from EEA1 to 2 and EEA3,
01:00:06.990 --> 01:00:09.800
the most severe
emergency level is load shed
01:00:09.800 --> 01:00:11.140
which we always wanna avoid.
01:00:11.140 --> 01:00:14.940
It's I think it starts at
2,700 and moves down to...
01:00:18.390 --> 01:00:19.523
Yeah, go ahead.
01:00:21.410 --> 01:00:26.140
So the difference
between EEA 1 and EEA2,
01:00:26.140 --> 01:00:28.250
it's not a necessarily absolute
01:00:28.250 --> 01:00:29.950
quantity of reserves anymore.
01:00:29.950 --> 01:00:32.060
It is a frequency based,
01:00:32.060 --> 01:00:35.940
but there are also reserve references.
01:00:35.940 --> 01:00:36.940
What are the reserve
reference points?
01:00:36.940 --> 01:00:41.940
So as I recall it's
the watches start at 3,200,
01:00:44.540 --> 01:00:46.153
I think EEA1 is that 23,
01:00:52.483 --> 01:00:54.066
and then EEA2 1750.
01:00:57.086 --> 01:00:59.169
1750, and then EEA3 is?
01:01:02.009 --> 01:01:05.430
EEA3 is not
really defined at that point
01:01:05.430 --> 01:01:09.663
by a quantity of reserves.
01:01:11.040 --> 01:01:14.312
There is a no trigger in
EEA3, it's based on reserves.
01:01:14.312 --> 01:01:16.350
So it's for me like
based on reserves EEA1,
01:01:16.350 --> 01:01:20.483
EEA2 is about 500, 450.
01:01:21.535 --> 01:01:22.368
That's correct.
01:01:22.368 --> 01:01:26.343
450 megawatts, which
we have is one unit tripping?
01:01:28.150 --> 01:01:29.040
Very easily.
01:01:29.040 --> 01:01:31.500
That's one unit tripping
in one moment at a time.
01:01:31.500 --> 01:01:34.880
And then next step
from there is load shed,
01:01:34.880 --> 01:01:36.460
turning out the lights.
01:01:36.460 --> 01:01:37.352
That is correct.
01:01:37.352 --> 01:01:38.185
Okay.
01:01:38.185 --> 01:01:39.150
And this is a broader, thank you.
01:01:39.150 --> 01:01:40.300
It's a broader reference point.
01:01:40.300 --> 01:01:42.260
We've referenced EEA1 and 2 a lot.
01:01:42.260 --> 01:01:43.750
And I think it's important
for the general public
01:01:43.750 --> 01:01:48.750
to know how fast that can
go is a very steep slope.
01:01:49.750 --> 01:01:52.040
And the only
other thing I would add
01:01:52.040 --> 01:01:56.090
is there is an additional move from
01:01:57.920 --> 01:02:01.623
one to two that could be
driven by frequency issues.
01:02:02.770 --> 01:02:05.123
So that's the other reference point
01:02:05.123 --> 01:02:06.400
that the operators would -
01:02:06.400 --> 01:02:07.920
The point being
like, when you said,
01:02:07.920 --> 01:02:10.007
in case of emergency brake glass,
01:02:10.007 --> 01:02:13.120
this can happen so
fast you don't have time
01:02:13.120 --> 01:02:15.173
to grab the hammer to break the glass.
01:02:16.280 --> 01:02:19.720
And so I think the broader
point in our new direction
01:02:19.720 --> 01:02:21.893
from legislature is
don't even get close.
01:02:23.360 --> 01:02:24.650
The other thing I would note
01:02:24.650 --> 01:02:27.900
is that those values
have changed over time
01:02:27.900 --> 01:02:31.660
and are not mandated
by any external standard.
01:02:31.660 --> 01:02:36.660
And so the way you calibrate
and how many megawatts
01:02:37.570 --> 01:02:42.090
differentiate a watch from
an emergency condition
01:02:42.090 --> 01:02:45.173
is I think within your discretion
and ERCOT discretion.
01:02:46.110 --> 01:02:47.850
Very good point is
something we need to-
01:02:47.850 --> 01:02:49.700
Yeah, just for clarification.
01:02:49.700 --> 01:02:53.370
So an EEA standard is NERC required,
01:02:53.370 --> 01:02:57.100
but the numbers that are
baked into the EEA thresholds
01:02:57.100 --> 01:02:58.570
are ISO set.
01:02:58.570 --> 01:02:59.714
Is that accurate?
01:02:59.714 --> 01:03:00.760
Yes.
01:03:00.760 --> 01:03:01.593
But,
01:03:02.910 --> 01:03:04.770
and this will come up
in later conversation,
01:03:04.770 --> 01:03:08.603
but EEA1 was certainly it,
01:03:09.830 --> 01:03:14.190
I think because it ties in
with the minimum contingency
01:03:14.190 --> 01:03:19.190
level of the ORDC was
set in 2014 June 30th,
01:03:22.410 --> 01:03:24.230
something like that.
01:03:24.230 --> 01:03:26.460
So Canon, if you wanna
talk about that now,
01:03:26.460 --> 01:03:28.500
but bottom line is
everything's predicated
01:03:28.500 --> 01:03:29.720
on that 2300 number.
01:03:29.720 --> 01:03:31.860
I mean the whole
band starts playing let's.
01:03:31.860 --> 01:03:33.350
Let's keep this moving.
01:03:33.350 --> 01:03:36.010
We'll keep the presentation
moving, but thank you Canon.
01:03:36.010 --> 01:03:39.370
But the point is it's
a very steep slope.
01:03:39.370 --> 01:03:40.510
Yes, sir.
01:03:40.510 --> 01:03:42.120
Once things start going wrong,
01:03:42.120 --> 01:03:44.710
they can go wrong very quickly
01:03:45.620 --> 01:03:47.713
and we get,
01:03:48.710 --> 01:03:50.913
doesn't take long to be a fatal problem.
01:03:52.120 --> 01:03:54.710
Mr. Luna, thank you for joining.
01:03:54.710 --> 01:03:55.940
Thank you.
01:03:55.940 --> 01:03:57.920
Commissioners good afternoon.
01:03:57.920 --> 01:03:58.810
My name is Rick Luna.
01:03:58.810 --> 01:04:00.690
I'm director of technology
and product innovation
01:04:00.690 --> 01:04:02.270
for CPS Energy.
01:04:02.270 --> 01:04:04.140
And certainly appreciate the opportunity
01:04:04.140 --> 01:04:07.483
to tell you about our demand
response programs at CPS.
01:04:08.990 --> 01:04:11.340
And so let me start by telling you
01:04:11.340 --> 01:04:14.720
that our demand response program
01:04:14.720 --> 01:04:17.460
is part of our energy
efficiency program.
01:04:17.460 --> 01:04:21.510
We started this back
in 2009 after our board
01:04:21.510 --> 01:04:24.570
and our city council
approved the creation
01:04:24.570 --> 01:04:27.430
of what we call the safer
for tomorrow energy plan.
01:04:27.430 --> 01:04:30.610
So under step we had a
goal man reduction goal
01:04:30.610 --> 01:04:32.373
of 771 megawatts,
01:04:33.330 --> 01:04:36.320
and we also had a funding
stream that was approved
01:04:36.320 --> 01:04:38.210
that we recover from our customers
01:04:38.210 --> 01:04:39.610
through our fuel adjustment.
01:04:40.460 --> 01:04:42.420
And and so we set the target.
01:04:42.420 --> 01:04:45.683
We put in place the incentives
and the funding for that.
01:04:46.548 --> 01:04:48.870
And we launched a
variety of program offerings
01:04:48.870 --> 01:04:49.933
for our customers.
01:04:50.920 --> 01:04:52.860
We've now achieved
the goal of that plan.
01:04:52.860 --> 01:04:54.210
We achieved it a year early
01:04:55.270 --> 01:04:58.535
and actually under budget and
have continued those programs
01:04:58.535 --> 01:05:01.520
with approval from our city council.
01:05:01.520 --> 01:05:03.523
And so we continue to offer this today.
01:05:04.418 --> 01:05:05.768
If we go to the next slide.
01:05:08.700 --> 01:05:11.830
I should mention that
we started down path
01:05:11.830 --> 01:05:14.900
in part of course energy
efficiency was important to us
01:05:14.900 --> 01:05:17.619
conservation but also community value
01:05:17.619 --> 01:05:22.110
and the desire in the
community to reduce
01:05:23.810 --> 01:05:26.330
our reliance on fossil generation,
01:05:26.330 --> 01:05:29.610
as well as develop
programs that would support
01:05:29.610 --> 01:05:32.680
our customers and help
save energy and save money,
01:05:32.680 --> 01:05:34.913
which they tell us is a big priority.
01:05:35.790 --> 01:05:37.710
So we've developed a roster of programs.
01:05:37.710 --> 01:05:40.290
This is everything that we
fund in our step programs
01:05:40.290 --> 01:05:43.510
to the tune of about 70 million a year.
01:05:43.510 --> 01:05:46.770
So weatherization in low income homes,
01:05:46.770 --> 01:05:50.210
residential, commercial
energy efficiency programs,
01:05:50.210 --> 01:05:52.810
we have solar rebate
programs that we offer
01:05:52.810 --> 01:05:55.240
and most recently electric
vehicle charging incentives
01:05:55.240 --> 01:05:56.760
that we've created.
01:05:56.760 --> 01:05:57.955
Of course,
01:05:57.955 --> 01:05:59.290
I'm here to talk about the
demand response program,
01:05:59.290 --> 01:06:01.870
and we've got a variety
of flavor of programs
01:06:01.870 --> 01:06:02.783
that we offer.
01:06:03.850 --> 01:06:05.750
And what we've done
here is break this down
01:06:05.750 --> 01:06:09.733
just to be able to speak to
the different types of programs
01:06:09.733 --> 01:06:10.963
that we offer.
01:06:12.530 --> 01:06:14.830
Maybe I'll start on
the right, the far right,
01:06:14.830 --> 01:06:17.750
actually, as I look at this
now because historically,
01:06:17.750 --> 01:06:21.110
that's where we started
was with our large commercial
01:06:21.110 --> 01:06:25.330
and industrial customers
who were interested
01:06:25.330 --> 01:06:29.710
in having incentives and
had the ability to reduce
01:06:29.710 --> 01:06:34.120
load with with some
instructions in advance.
01:06:34.120 --> 01:06:35.650
We've grown that program over time.
01:06:35.650 --> 01:06:38.040
We've got about 110 megawatts of load
01:06:38.040 --> 01:06:41.030
that's committed to us every summer.
01:06:41.030 --> 01:06:44.180
And we've got pretty much
all of our large school districts,
01:06:44.180 --> 01:06:48.730
all of our universities
manufacturing cement plants
01:06:48.730 --> 01:06:50.200
and so forth.
01:06:50.200 --> 01:06:53.340
They're available to us
for reductions in anywhere
01:06:53.340 --> 01:06:55.130
from 30 minutes to two hours,
01:06:55.130 --> 01:06:58.410
depending on the option
of program that they choose.
01:06:58.410 --> 01:07:00.620
And we pay them a
rebate for reducing load
01:07:00.620 --> 01:07:02.740
and being available to reduce load
01:07:02.740 --> 01:07:04.863
on those peak days when we call on them.
01:07:06.340 --> 01:07:08.270
In the middle is our third
thermostat programs.
01:07:08.270 --> 01:07:11.920
So we've got 150,000
devices and customer homes.
01:07:11.920 --> 01:07:12.930
About half of those,
01:07:12.930 --> 01:07:17.290
we installed through
partnership with Honeywell,
01:07:17.290 --> 01:07:20.380
where we were going
out and installing one way
01:07:20.380 --> 01:07:24.250
paging thermostats with the evolution
01:07:24.250 --> 01:07:27.390
to wifi connected smart devices.
01:07:27.390 --> 01:07:29.060
We began and to do more of a model
01:07:29.060 --> 01:07:30.770
where the customer purchases the device,
01:07:30.770 --> 01:07:33.330
and then we offer them
an incentive to enroll
01:07:33.330 --> 01:07:35.460
in our DR program.
01:07:35.460 --> 01:07:36.595
of course,
01:07:36.595 --> 01:07:37.510
customer and it's been
talked about customer always
01:07:37.510 --> 01:07:39.883
has the option to opt
out of any single event.
01:07:40.780 --> 01:07:45.240
But we find that opt outs are low
01:07:45.240 --> 01:07:47.743
or they're acceptable levels.
01:07:48.720 --> 01:07:51.480
And of course customers
can also leave the program.
01:07:51.480 --> 01:07:56.280
So they get an upfront
incentive of $85 for enrolling.
01:07:56.280 --> 01:07:58.120
And then if they stay with
the program every year,
01:07:58.120 --> 01:08:01.500
we give them an additional
$30 that we pay out
01:08:01.500 --> 01:08:03.670
in October or November.
01:08:03.670 --> 01:08:05.410
And we do that every year.
01:08:05.410 --> 01:08:07.393
So that program's worked well for us.
01:08:08.723 --> 01:08:09.940
And then the last one is behavioral.
01:08:09.940 --> 01:08:11.423
This is the newest program.
01:08:12.810 --> 01:08:16.080
So we've got about a 15%
adoption rate on thermostats.
01:08:16.080 --> 01:08:17.420
And so we were looking for
01:08:17.420 --> 01:08:21.210
how do we reach the 85% of customers?
01:08:21.210 --> 01:08:23.310
And so we partnered up with Oracle
01:08:24.230 --> 01:08:27.520
and launched a behavioral DR Program
01:08:27.520 --> 01:08:30.497
where we sent peak
day alert two customers,
01:08:30.497 --> 01:08:32.850
320,000 customers.
01:08:32.850 --> 01:08:36.270
These are customers that they
did not enroll in the program.
01:08:36.270 --> 01:08:37.720
We send them a notification to say,
01:08:37.720 --> 01:08:40.500
Hey you're gonna get
these alerts from us.
01:08:40.500 --> 01:08:43.583
We deliver them the phone call or email.
01:08:46.450 --> 01:08:48.260
And they have the right to opt out
01:08:48.260 --> 01:08:50.036
and not receive the messages
01:08:50.036 --> 01:08:52.696
but otherwise we're gonna send them
01:08:52.696 --> 01:08:56.480
any time that we forecast
a conservation day
01:08:56.480 --> 01:09:01.320
for the next day, we will
initiate those call-outs.
01:09:01.320 --> 01:09:04.680
And we also support that with awareness
01:09:04.680 --> 01:09:05.600
through social media.
01:09:05.600 --> 01:09:07.420
We have digital billboards
that we can change
01:09:07.420 --> 01:09:09.130
on a daily basis.
01:09:09.130 --> 01:09:11.680
And we also have a
partnerships with the news stations
01:09:11.680 --> 01:09:15.150
to run the promos for the program
01:09:15.150 --> 01:09:17.653
during the weather portion of the news.
01:09:19.240 --> 01:09:21.950
Critical to this is, of
course, this is informational.
01:09:21.950 --> 01:09:23.580
We're not paying the
customer to do this.
01:09:23.580 --> 01:09:26.603
So we're simply asking them to conserve.
01:09:27.520 --> 01:09:31.250
So include some tips for
them on how to trim energy use
01:09:31.250 --> 01:09:34.190
but really the key piece of
this is we give them feedback
01:09:34.190 --> 01:09:35.780
after we call for it.
01:09:35.780 --> 01:09:37.530
So if we call for it tomorrow,
01:09:37.530 --> 01:09:39.880
the following day or the day after,
01:09:39.880 --> 01:09:41.790
they'll get another
phone call at our email
01:09:41.790 --> 01:09:44.300
with a ranking of how they performed
01:09:44.300 --> 01:09:47.040
relative to similar homes.
01:09:47.040 --> 01:09:49.460
And what we find is absolutely
what drives the engagement
01:09:49.460 --> 01:09:54.093
is the ranking sort of
triggers a competitive aspect.
01:09:55.450 --> 01:09:57.320
So we have measurable
savings from this program.
01:09:57.320 --> 01:09:59.500
We have smart meters
in all of these customers,
01:09:59.500 --> 01:10:00.790
so we measure the impact
01:10:00.790 --> 01:10:04.133
and we get about 30
megawatts through this program.
01:10:06.180 --> 01:10:07.800
If we go to the next one.
01:10:07.800 --> 01:10:09.970
So our perspective on
demand response, again,
01:10:09.970 --> 01:10:12.520
we've been doing this for a long time.
01:10:12.520 --> 01:10:13.800
We think it's a valuable tool,
01:10:13.800 --> 01:10:16.170
we think it's an active
tool that can be used
01:10:16.170 --> 01:10:18.680
to support greater reliability.
01:10:18.680 --> 01:10:21.650
It helps us manage our native peak load.
01:10:21.650 --> 01:10:23.957
It helps reduce our
exposure to high prices
01:10:23.957 --> 01:10:25.180
and the real time market.
01:10:25.180 --> 01:10:26.720
And so it's actively used,
01:10:26.720 --> 01:10:29.473
I'll get into some statistics
on that in a minute.
01:10:30.400 --> 01:10:35.220
But that's critical because we
want customers to anticipate
01:10:35.220 --> 01:10:37.840
and to know that most
likely on 100 degree day,
01:10:37.840 --> 01:10:39.620
you're gonna get a call from us.
01:10:39.620 --> 01:10:42.580
And once we build sort of that behavior
01:10:42.580 --> 01:10:44.900
and then that anticipation
customers generally
01:10:44.900 --> 01:10:46.170
go along with it.
01:10:46.170 --> 01:10:48.820
And we don't get a lot of resistance
01:10:49.780 --> 01:10:51.933
or pushback from customers.
01:10:53.680 --> 01:10:58.120
And so we have seen
customers willing to participate
01:10:58.120 --> 01:10:59.750
for the right incentive.
01:10:59.750 --> 01:11:03.610
Of course we've
gotta build in flexibility.
01:11:03.610 --> 01:11:06.240
So even though I showed you
three categories of programs,
01:11:06.240 --> 01:11:08.880
I mean, there sub categories
under each of the categories
01:11:08.880 --> 01:11:10.573
to try to meet a customer need.
01:11:11.540 --> 01:11:13.390
And that's that point about,
01:11:13.390 --> 01:11:16.663
you gotta have multiple
paths to be able to participate.
01:11:18.080 --> 01:11:20.280
To the point that was made earlier,
01:11:20.280 --> 01:11:22.100
DR performance is consistent.
01:11:22.100 --> 01:11:25.140
We've had over 200 events we've done
01:11:25.140 --> 01:11:26.920
MNV on every one of them.
01:11:26.920 --> 01:11:28.090
We know it's consistent,
01:11:28.090 --> 01:11:31.010
we know it's reliable
within a certain bandwidth.
01:11:31.010 --> 01:11:34.760
Of course it's not always 100%
01:11:34.760 --> 01:11:36.510
but it depends by the program.
01:11:36.510 --> 01:11:37.478
But for the most part,
01:11:37.478 --> 01:11:39.600
we have seen it to be very consistent.
01:11:39.600 --> 01:11:41.870
And it's a case of
diversity is our friend, right?
01:11:41.870 --> 01:11:45.310
You've got 150,000
thermostats on any given day.
01:11:45.310 --> 01:11:47.580
Some percentage of
them will not be available,
01:11:47.580 --> 01:11:49.500
but we know that going in.
01:11:49.500 --> 01:11:51.980
And so we can accurately forecast.
01:11:51.980 --> 01:11:53.420
Given the temperature on a given day,
01:11:53.420 --> 01:11:56.283
we know what we have
available to in our portfolio.
01:11:57.870 --> 01:12:00.550
To the point about
back to back DR events,
01:12:00.550 --> 01:12:04.150
we have run up to 10
consecutive days of events
01:12:04.150 --> 01:12:07.483
in some August back in time.
01:12:08.610 --> 01:12:11.370
And we have found that
customers will stick with us.
01:12:11.370 --> 01:12:12.640
There is a little bit of a drop off.
01:12:12.640 --> 01:12:15.340
We do complaints, we do get phone calls,
01:12:15.340 --> 01:12:18.280
but the vast majority of
customers will stay with us
01:12:19.226 --> 01:12:21.370
and will not drop off the program.
01:12:21.370 --> 01:12:23.797
So partly I think that's the incentive,
01:12:23.797 --> 01:12:26.590
the effect of the $30 incentive.
01:12:26.590 --> 01:12:30.780
And part of it is the community
messaging we put around this
01:12:30.780 --> 01:12:33.760
doing your part helping the community
01:12:33.760 --> 01:12:36.233
that seems to really
resonate with customers.
01:12:38.650 --> 01:12:42.013
So DR in action, this
is for summer of 2020,
01:12:43.640 --> 01:12:45.070
we had 19 event days.
01:12:45.070 --> 01:12:48.540
Again, the point I made
was that we call this actively
01:12:49.885 --> 01:12:52.470
and we think about it
every day and whether
01:12:52.470 --> 01:12:54.253
it should be a DR day or not.
01:12:55.240 --> 01:12:56.860
And of course that's weather dependent.
01:12:56.860 --> 01:13:01.760
We've had seasons where we've
had as few as 10 or 11 events
01:13:01.760 --> 01:13:03.490
and some years we've had up to 30.
01:13:03.490 --> 01:13:05.333
So it's just gonna depend.
01:13:06.430 --> 01:13:08.380
And our average duration for an event
01:13:08.380 --> 01:13:10.350
is about two and a half hours.
01:13:10.350 --> 01:13:12.570
That varies a little bit by program.
01:13:12.570 --> 01:13:14.580
And again, we've got
different groups of customers,
01:13:14.580 --> 01:13:16.730
so we don't call all of it
01:13:16.730 --> 01:13:18.330
for the exact two and a half hours.
01:13:18.330 --> 01:13:23.330
We will stagger some of the
programs behave differently.
01:13:23.480 --> 01:13:25.390
So we know residential
has a lot of impact
01:13:25.390 --> 01:13:26.230
right out of the gate.
01:13:26.230 --> 01:13:28.690
So we'll tend to
call that a little later.
01:13:28.690 --> 01:13:30.400
Whereas maybe our commercial programs
01:13:30.400 --> 01:13:32.510
are more solid for a longer duration,
01:13:32.510 --> 01:13:34.410
so we can stretch those a little more.
01:13:35.520 --> 01:13:39.250
And so we evaluate
that when we dispatch.
01:13:39.250 --> 01:13:42.200
We dispatch if we forecast a CP day,
01:13:42.200 --> 01:13:44.900
we will dispatch the
programs for of that.
01:13:45.740 --> 01:13:48.993
And then there, you
can see our performance.
01:13:50.140 --> 01:13:54.480
So across all of the programs
about 270 megawatts last year
01:13:54.480 --> 01:13:56.840
again, we don't call
everything at the same time.
01:13:56.840 --> 01:14:00.170
So the second number
we provide you is a day
01:14:00.170 --> 01:14:02.670
where was the CP's peak,
and then you can see there,
01:14:02.670 --> 01:14:04.993
we had that 231 megawatts of impact.
01:14:08.540 --> 01:14:10.150
So my last slide is
just to talk a little bit
01:14:10.150 --> 01:14:11.420
about winter storm.
01:14:11.420 --> 01:14:14.630
Of course that was that
was a unique challenge
01:14:14.630 --> 01:14:15.830
for our DR Programs.
01:14:15.830 --> 01:14:17.708
We of course have been summer focused
01:14:17.708 --> 01:14:20.410
like every other DR program.
01:14:20.410 --> 01:14:23.870
so we were challenged
with what could we contribute
01:14:23.870 --> 01:14:25.403
through our thermostat fleet.
01:14:26.260 --> 01:14:28.790
And so we worked with
the thermostat vendors,
01:14:28.790 --> 01:14:32.600
and we were able to get out a a signal
01:14:32.600 --> 01:14:36.440
to electric customers
who had electric heat.
01:14:36.440 --> 01:14:39.260
And so about 93% of our thermostats
01:14:39.260 --> 01:14:43.810
were able to be dispatched
with a two degree differential.
01:14:43.810 --> 01:14:45.780
Of course the impact isn't anywhere near
01:14:45.780 --> 01:14:47.330
as you get with air conditioning.
01:14:47.330 --> 01:14:50.360
But it did have some
incremental value for us.
01:14:50.360 --> 01:14:51.220
And then on top of that,
01:14:51.220 --> 01:14:52.710
we had some of our large customers
01:14:52.710 --> 01:14:54.020
who had backup generators,
01:14:54.020 --> 01:14:56.910
who voluntarily agreed to curtail.
01:14:56.910 --> 01:15:00.620
And an important point to here is
01:15:00.620 --> 01:15:04.060
of course that was for
100 hours continuous time.
01:15:04.060 --> 01:15:07.500
Our typical DR Summer is
60 hours across four months.
01:15:07.500 --> 01:15:10.590
And so it was a whole
different situation
01:15:10.590 --> 01:15:13.000
than anything we'd encountered before.
01:15:13.000 --> 01:15:16.683
So just to drill down,
this is a great object lesson,
01:15:17.910 --> 01:15:19.810
and you went through it.
01:15:19.810 --> 01:15:22.670
So in terms of what you
were able to negotiate
01:15:22.670 --> 01:15:25.650
with those customers in February,
01:15:25.650 --> 01:15:27.860
basically you were trying to
squeeze an extra two degrees
01:15:27.860 --> 01:15:28.693
out of their homes.
01:15:28.693 --> 01:15:31.073
Is that kind of what
they... Correct.
01:15:31.073 --> 01:15:33.400
What we did, and you
see the screen there,
01:15:33.400 --> 01:15:35.850
actually that's my thermostat at home ,
01:15:35.850 --> 01:15:38.370
is we notified customers that we were
01:15:39.520 --> 01:15:42.570
in an energy saving
and we used two degrees
01:15:42.570 --> 01:15:44.250
as our benchmark.
01:15:44.250 --> 01:15:47.710
And so if the customer
had electric heat,
01:15:47.710 --> 01:15:51.080
then that differential was beneficial.
01:15:51.080 --> 01:15:54.590
And we saw customers did participate
01:15:54.590 --> 01:15:55.640
and did stay with us.
01:15:56.550 --> 01:15:58.940
Now you had the challenge
of they might lose power.
01:15:58.940 --> 01:16:01.290
And so you the home got really cold.
01:16:01.290 --> 01:16:04.833
And so it was definitely
a unique situation.
01:16:05.760 --> 01:16:08.233
And we've MEVed the event.
01:16:09.770 --> 01:16:11.883
I think we have a lot to learn still,
01:16:13.031 --> 01:16:15.600
but on the fly, we
were able to pull it off.
01:16:15.600 --> 01:16:16.493
Great.
01:16:18.590 --> 01:16:20.140
Okay, that was my last slide.
01:16:21.130 --> 01:16:21.963
Thank you, Mr. Luna,
01:16:21.963 --> 01:16:23.810
any other questions or comments for him?
01:16:24.810 --> 01:16:25.943
All right.
01:16:25.943 --> 01:16:26.776
Appreciate you being here.
01:16:28.065 --> 01:16:29.733
Next up is in Enchanted Rock.
01:16:39.721 --> 01:16:41.971
(laughing)
01:16:42.970 --> 01:16:44.810
We'll stick around for you.
01:16:44.810 --> 01:16:45.743
Okay, I appreciate that.
01:16:47.100 --> 01:16:47.933
My name is Corey Amthor.
01:16:47.933 --> 01:16:49.260
I'm the president of Enchanted Rock.
01:16:49.260 --> 01:16:51.626
Speak into the
microphone, of course.
01:16:51.626 --> 01:16:53.600
Okay, sorry.
01:16:53.600 --> 01:16:56.200
My name's Corey Amthor,
president of Enchanted Rock.
01:16:57.110 --> 01:16:59.030
Appreciate the time to talk today.
01:16:59.030 --> 01:17:00.434
Thought I'd give you guys just,
01:17:00.434 --> 01:17:01.840
if you wanna go to the next slide,
01:17:01.840 --> 01:17:04.540
just a little base of what we do.
01:17:04.540 --> 01:17:08.320
We provide resiliency
microgrids to commercial
01:17:08.320 --> 01:17:10.070
and industrial customers.
01:17:10.070 --> 01:17:14.370
We do that through using
natural gas generators,
01:17:14.370 --> 01:17:18.090
and a lot of our
customers are what I'd call
01:17:18.090 --> 01:17:23.090
critical customers to the population,
01:17:23.400 --> 01:17:28.003
grocery stores hospitals,
senior living facilities,
01:17:30.140 --> 01:17:32.803
universities, others.
01:17:33.810 --> 01:17:37.420
And what we do
different than most backup
01:17:37.420 --> 01:17:39.890
generation companies
is we continue to maintain
01:17:39.890 --> 01:17:42.700
the ownership and
operate the generators.
01:17:42.700 --> 01:17:46.770
And then we parallel
with the grid whenever
01:17:46.770 --> 01:17:49.780
the grid's available and
provides services back to the grid.
01:17:49.780 --> 01:17:51.520
So when the grid's not available,
01:17:51.520 --> 01:17:53.733
we're providing backup
service to the customer,
01:17:53.733 --> 01:17:54.720
when it is available,
01:17:54.720 --> 01:17:57.870
then we're providing
services back to the grid.
01:17:57.870 --> 01:18:00.550
And what that does is,
01:18:00.550 --> 01:18:03.230
that's what we call a
dual purpose microgrid.
01:18:03.230 --> 01:18:08.230
And the benefit of the
revenue streams from the grid
01:18:08.370 --> 01:18:12.220
helps subsidize the cost
for the end use customer
01:18:12.220 --> 01:18:16.260
to get cheaper backup
generation or discount,
01:18:16.260 --> 01:18:18.510
reliability power for them.
01:18:18.510 --> 01:18:23.290
And it's been a big help
for a lot of our customers,
01:18:23.290 --> 01:18:24.410
I believe.
01:18:24.410 --> 01:18:27.380
I wanted to spend a
few minutes talking about
01:18:27.380 --> 01:18:28.213
the winter storm,
01:18:28.213 --> 01:18:30.480
and then just the hurricane
that went in through
01:18:31.800 --> 01:18:33.340
just a few days ago.
01:18:33.340 --> 01:18:36.230
And I think one of the
things that we've spent
01:18:36.230 --> 01:18:37.300
a lot of time talking about over
01:18:37.300 --> 01:18:42.300
the last five, six months is
about how the winter storm
01:18:43.530 --> 01:18:46.963
and rolling blackouts
affected critical loads.
01:18:47.850 --> 01:18:50.650
But I just wanna, and I know
most of you already know this,
01:18:50.650 --> 01:18:55.650
but just wanna keep it up
front and with everyone that,
01:18:55.870 --> 01:18:57.630
most of the blackouts that happen
01:18:57.630 --> 01:18:59.530
are most of the outages
that happen on the grid
01:18:59.530 --> 01:19:01.230
are not due to rolling blackouts.
01:19:01.230 --> 01:19:06.230
It's due to the storms burbs
flying into transformers,
01:19:06.680 --> 01:19:07.820
different things like that.
01:19:07.820 --> 01:19:09.700
And so,
01:19:09.700 --> 01:19:12.730
we provide a service during
the storm Winter Storm Uri
01:19:12.730 --> 01:19:14.700
but also during the hurricane,
01:19:14.700 --> 01:19:19.700
and have had we had 465
out outage hours at 42 site
01:19:20.010 --> 01:19:23.293
and providing them great resiliency.
01:19:25.630 --> 01:19:29.130
I think it's important
that our units provide
01:19:29.130 --> 01:19:31.000
a great service to the grid,
01:19:31.000 --> 01:19:33.950
but it's also important
for those revenue streams
01:19:33.950 --> 01:19:36.113
to continue to let critical loads,
01:19:37.030 --> 01:19:38.853
install backup generation.
01:19:41.290 --> 01:19:42.600
If they don't do that, then,
01:19:42.600 --> 01:19:45.770
we'll just talk about critical
loads and providing them
01:19:45.770 --> 01:19:49.240
circuits that protect them
during rolling blackouts.
01:19:49.240 --> 01:19:51.230
That does nothing for
them the rest of the time
01:19:51.230 --> 01:19:52.630
when they're having outages.
01:19:54.280 --> 01:19:55.741
Wait,
01:19:55.741 --> 01:19:58.540
can I ask you a question
on the hurricane Nicholas?
01:19:58.540 --> 01:19:59.373
Yeah.
01:19:59.373 --> 01:20:01.670
Does that
mean that at 42 sites
01:20:01.670 --> 01:20:03.750
where you have backup generation,
01:20:03.750 --> 01:20:07.650
there were 465 hours
that you all supplied-
01:20:07.650 --> 01:20:08.483
Correct.
01:20:08.483 --> 01:20:09.580
That would
have been grid supplied,
01:20:09.580 --> 01:20:11.230
if not for the hurricane,
01:20:11.230 --> 01:20:12.710
It should have
been grid supplied,
01:20:12.710 --> 01:20:13.940
but there was no grid available.
01:20:13.940 --> 01:20:14.773
That's right, okay.
01:20:14.773 --> 01:20:19.620
So you all came on and
did your job 99.7% of the time
01:20:19.620 --> 01:20:21.160
at those 42 sites?
01:20:21.160 --> 01:20:21.993
Correct.
01:20:24.072 --> 01:20:27.355
Can you come to my house?
01:20:27.355 --> 01:20:30.037
(laughing)
01:20:30.037 --> 01:20:31.813
So yeah, if you
wanna go to the next page.
01:20:33.800 --> 01:20:35.720
One of the things is
right now we're settlement
01:20:35.720 --> 01:20:39.640
only distributed generation
providing those services.
01:20:39.640 --> 01:20:44.530
And in that we can pro provide
ERS and participate in that,
01:20:44.530 --> 01:20:45.363
but in the future,
01:20:45.363 --> 01:20:47.210
what we'd like to be
able to look at also
01:20:47.210 --> 01:20:50.370
is participating as a
distributed generation resource.
01:20:50.370 --> 01:20:53.580
And right now that's under
moratorium where you can apply,
01:20:53.580 --> 01:20:56.410
but it looks like that's
gonna open up in January,
01:20:56.410 --> 01:20:58.153
February of next year.
01:21:00.390 --> 01:21:02.240
But part of that,
01:21:02.240 --> 01:21:04.320
that I think is important
when that happens
01:21:04.320 --> 01:21:06.840
is that we need to look
at distributed generation
01:21:06.840 --> 01:21:11.080
different than the big
combined cycle turbines
01:21:11.080 --> 01:21:12.083
or turbines.
01:21:13.250 --> 01:21:14.810
We have 200 sites,
01:21:14.810 --> 01:21:19.610
over 200 sites with about
450 megawatts of generation.
01:21:19.610 --> 01:21:24.180
So the distribution of that
and the diversification of that
01:21:24.180 --> 01:21:29.180
is much more resilient and reliable
01:21:29.470 --> 01:21:31.653
than just one generator at one site.
01:21:32.690 --> 01:21:36.132
But if we're not allowed
to aggregate those facilities
01:21:36.132 --> 01:21:38.930
in to a larger facility,
01:21:38.930 --> 01:21:43.320
into an aggregation the operating plans
01:21:43.320 --> 01:21:46.593
operating as a generation resource,
01:21:48.040 --> 01:21:51.530
there would be a ton of
information that we have to pass
01:21:51.530 --> 01:21:54.200
back and forth on an
individual side basis
01:21:54.200 --> 01:21:57.000
that I don't think is really
necessary for ERCOT to have
01:21:59.120 --> 01:22:00.610
on a hour to hour basis,
01:22:00.610 --> 01:22:03.770
we can aggregate all that
and give them the information.
01:22:03.770 --> 01:22:06.440
And like our customers
like to have many times
01:22:06.440 --> 01:22:07.600
as they want a button to push,
01:22:07.600 --> 01:22:09.780
but they don't wanna see
what happens in the background.
01:22:09.780 --> 01:22:11.200
We can provide that to ERCOT too.
01:22:11.200 --> 01:22:13.200
And I think that's important.
01:22:13.200 --> 01:22:15.091
The other component is that,
01:22:15.091 --> 01:22:19.590
with a large portfolio of generation,
01:22:19.590 --> 01:22:22.840
I'm not sure we need to
worry about having circuits
01:22:22.840 --> 01:22:26.010
that are, you know,
right now to be a DGR,
01:22:26.010 --> 01:22:29.330
you have to have a
non curtailable circuit
01:22:29.330 --> 01:22:32.133
to a transmission grid,
but do we really need that?
01:22:33.180 --> 01:22:35.360
I don't think so because
you're gonna have such
01:22:35.360 --> 01:22:38.540
a large array of generations spread out
01:22:38.540 --> 01:22:41.630
across the distribution
grid all across Texas,
01:22:41.630 --> 01:22:46.260
that if it's a service that
is bought on a bulk basis,
01:22:46.260 --> 01:22:48.200
not by a specific point basis,
01:22:48.200 --> 01:22:50.180
like ancillary services are,
01:22:50.180 --> 01:22:53.440
then that distribution,
01:22:53.440 --> 01:22:58.440
even if there is some sort
of outage on a certain circuit
01:22:58.530 --> 01:23:01.350
shouldn't affect the overall portfolio
01:23:01.350 --> 01:23:03.800
and should be allowed for the operator
01:23:03.800 --> 01:23:06.470
or the queasy to manage that.
01:23:06.470 --> 01:23:07.660
Mr. Amthor,
01:23:07.660 --> 01:23:10.190
may I ask you a technical
question about Enchanted Rock?
01:23:10.190 --> 01:23:13.283
So does your system,
01:23:14.510 --> 01:23:18.610
are you telemetric dispatched?
01:23:18.610 --> 01:23:19.443
Can you be?
01:23:19.443 --> 01:23:20.870
Yes.
01:23:20.870 --> 01:23:23.140
So you fit
that profile in terms of
01:23:23.140 --> 01:23:24.400
grid operators need.
01:23:24.400 --> 01:23:26.440
We're working with
ERCOT now and that, yeah.
01:23:26.440 --> 01:23:27.559
Okay.
01:23:27.559 --> 01:23:28.870
So you're, you're working
through the details of that,
01:23:28.870 --> 01:23:31.040
or you have been dispatch-
01:23:31.040 --> 01:23:33.120
We have a 24/7
knock that we dispatch
01:23:33.120 --> 01:23:35.560
all of our assets from that knock.
01:23:35.560 --> 01:23:37.980
And we have the ability
to take the telemetry,
01:23:37.980 --> 01:23:39.860
all the measurements
from that and send that
01:23:39.860 --> 01:23:42.090
and share that with
ERCOT on a real time basis
01:23:42.090 --> 01:23:43.967
or a TDSP all those things.
01:23:43.967 --> 01:23:45.373
And we're fine doing that.
01:23:46.760 --> 01:23:51.580
Now, if we have a
regional event maybe not Uri,
01:23:51.580 --> 01:23:54.560
but something significant
to where it impacts
01:23:54.560 --> 01:23:57.660
the greater Houston
area, or north Texas,
01:23:57.660 --> 01:23:59.083
say an ice event.
01:24:00.813 --> 01:24:03.800
And again, it knocks out
of your 450 megawatts,
01:24:03.800 --> 01:24:06.950
a lot of that because Oncor
has to start rolling outage.
01:24:06.950 --> 01:24:10.270
We are in out rolling
outages at that point.
01:24:10.270 --> 01:24:12.380
And when we're counting
on you as an ancillary service,
01:24:12.380 --> 01:24:15.640
and you're advocating to be modeled
01:24:15.640 --> 01:24:18.910
on this aggregated basis,
01:24:18.910 --> 01:24:23.910
how do you explain our
reliability concern in that scenario?
01:24:25.840 --> 01:24:27.960
Well, there's a
couple things with that.
01:24:27.960 --> 01:24:31.010
First, because the number sites,
01:24:31.010 --> 01:24:36.010
that gives us enough
sites across the whole state
01:24:36.320 --> 01:24:39.757
that you're gonna be
already distributed pretty well
01:24:39.757 --> 01:24:41.640
And keep you at a fairly high level.
01:24:41.640 --> 01:24:43.600
And then as you go
into rolling blackouts
01:24:43.600 --> 01:24:46.260
in a specific area, that's
even gonna be less.
01:24:46.260 --> 01:24:47.110
So, I mean, I think-
01:24:47.110 --> 01:24:49.830
So you're saying you
wouldn't bid your entire-
01:24:49.830 --> 01:24:50.920
We would
never bid our entire,
01:24:50.920 --> 01:24:52.600
we prepare for that.
01:24:52.600 --> 01:24:55.750
I think it's important to
remember that the blackouts
01:24:55.750 --> 01:24:57.590
that we had during this storm
01:24:57.590 --> 01:25:00.123
where we were dropping
20,000 megawatts of load,
01:25:01.010 --> 01:25:03.720
if we try to design
everything in the system
01:25:03.720 --> 01:25:05.660
preparing for that,
01:25:05.660 --> 01:25:09.380
that is going to eliminate
a lot of opportunities
01:25:09.380 --> 01:25:11.840
for things that we could
do with the grid to prevent us
01:25:11.840 --> 01:25:13.030
from ever getting there again.
01:25:13.030 --> 01:25:16.620
So if we just worry about that
and say nothing else matters,
01:25:16.620 --> 01:25:18.280
then we'll take a lot of resources
01:25:18.280 --> 01:25:21.870
that are dispatchable like
ours and maybe not get
01:25:21.870 --> 01:25:23.450
the true use out of them.
01:25:23.450 --> 01:25:25.830
And I think what we're trying to do
01:25:25.830 --> 01:25:29.330
is to prevent ourselves from
ever getting back there again.
01:25:29.330 --> 01:25:31.840
And so we don't wanna take the chance of
01:25:31.840 --> 01:25:34.840
not using assets that are
out there that can perform
01:25:34.840 --> 01:25:37.990
and provide services to the grid.
01:25:37.990 --> 01:25:39.180
So I guess what you're saying
01:25:39.180 --> 01:25:42.480
is that day to day reliability,
01:25:42.480 --> 01:25:46.930
these microgrid systems
can provide reliability benefits,
01:25:46.930 --> 01:25:48.208
like you said,
01:25:48.208 --> 01:25:51.010
to prevent us from getting
into those emergency events.
01:25:51.010 --> 01:25:52.700
So if you do have,
01:25:52.700 --> 01:25:54.820
what I believe you're
saying is geographic diversity
01:25:54.820 --> 01:25:56.160
of your microgrids,
01:25:56.160 --> 01:25:58.610
that if you have one system
go out in the Dallas area,
01:25:58.610 --> 01:26:00.800
you still have one going on in Houston,
01:26:00.800 --> 01:26:03.300
you're still gonna provide
a benefit to the system
01:26:04.340 --> 01:26:08.300
to help with reliability that day.
01:26:08.300 --> 01:26:09.260
Correct.
01:26:09.260 --> 01:26:14.260
I think, we've already got
225, 230 sites across Texas.
01:26:15.520 --> 01:26:17.610
So that's huge diversification,
01:26:17.610 --> 01:26:19.160
but then if you take
that to the extreme,
01:26:19.160 --> 01:26:20.120
not just us,
01:26:20.120 --> 01:26:24.040
but we're gonna continue to
add more distributed generation
01:26:24.040 --> 01:26:26.750
on the grid and it's
gonna be everywhere.
01:26:26.750 --> 01:26:31.010
And so there's gonna
be so much diversification
01:26:31.010 --> 01:26:35.000
that did you be worried
about having a circuit
01:26:35.930 --> 01:26:37.610
that is direct to a transmission grid
01:26:37.610 --> 01:26:41.750
that can be protected
especially when you have,
01:26:41.750 --> 01:26:44.960
you get to these smaller DG sites,
01:26:44.960 --> 01:26:47.130
that maybe one megawatt size,
01:26:47.130 --> 01:26:48.830
and we have a lot of
those at grocery stores.
01:26:48.830 --> 01:26:52.620
And if they're one
megawatt size, they cannot,
01:26:52.620 --> 01:26:55.210
there's no way that TDSP
is gonna be economically
01:26:55.210 --> 01:26:59.160
make that a direct circuit
and keep that energized
01:26:59.160 --> 01:27:00.900
during a rolling blackout.
01:27:00.900 --> 01:27:01.860
But the diversification,
01:27:01.860 --> 01:27:03.580
I believe both geographically
01:27:03.580 --> 01:27:05.210
and just what the diversification
01:27:05.210 --> 01:27:07.590
of the actual rolling blackouts
01:27:07.590 --> 01:27:09.630
is gonna keep that at a very high level
01:27:10.560 --> 01:27:12.210
of availability and reliability
01:27:13.130 --> 01:27:17.410
So if we were to get to a
rolling blackout load shed event
01:27:18.670 --> 01:27:22.760
we would be relying on other
tools to bring the system back
01:27:22.760 --> 01:27:26.650
or keep us from going to an EEA3.
01:27:26.650 --> 01:27:28.690
But with respect to those microgrids,
01:27:28.690 --> 01:27:31.910
if depending on the level
of the load shed event,
01:27:31.910 --> 01:27:34.800
it provide benefits
though, but it may not,
01:27:34.800 --> 01:27:37.720
depending on the size is the-
01:27:37.720 --> 01:27:38.940
I don't know
if what I described
01:27:38.940 --> 01:27:39.870
is any really different
01:27:39.870 --> 01:27:41.820
than what we just went
through in a hurricane
01:27:41.820 --> 01:27:44.200
and you have transmission
lines that get knocked out
01:27:44.200 --> 01:27:46.320
that can take generation plants out too.
01:27:46.320 --> 01:27:48.820
Are we gonna say that
every, I'm not trying to be,
01:27:50.770 --> 01:27:52.140
but are we gonna say every generator
01:27:52.140 --> 01:27:53.860
can't participate in
ancillary services too
01:27:53.860 --> 01:27:56.930
because a transmission system might...
01:27:56.930 --> 01:27:59.530
part of the transmission
grid could get taken out by
01:28:00.580 --> 01:28:02.250
a hurricane or something like that.
01:28:02.250 --> 01:28:06.780
I'm just saying that
I think the reliability
01:28:06.780 --> 01:28:10.560
of a distributed system
is just as good or better
01:28:10.560 --> 01:28:14.100
than the generators that
we have currently operating,
01:28:14.100 --> 01:28:16.513
so can provide similar services.
01:28:21.775 --> 01:28:23.692
We go to the next page.
01:28:25.671 --> 01:28:27.880
I wanna talk about a
little about ERS because
01:28:27.880 --> 01:28:29.453
we are a participant in ERS.
01:28:33.419 --> 01:28:35.770
Wanna just kind of talk a
little about what Canon said
01:28:35.770 --> 01:28:38.083
about generators participating in ERS.
01:28:39.840 --> 01:28:41.433
Once again, we had,
01:28:44.260 --> 01:28:45.743
two years ago in 2019,
01:28:47.339 --> 01:28:48.760
and two events that we had,
01:28:48.760 --> 01:28:53.760
we had 99.4% availability
in the eight 13 event.
01:28:54.900 --> 01:28:56.000
And then eight 15 event,
01:28:56.000 --> 01:28:59.850
we were at 100% availability on ERS.
01:28:59.850 --> 01:29:02.840
During this winter event,
01:29:02.840 --> 01:29:06.520
up until we went to EEA level three,
01:29:06.520 --> 01:29:11.313
we were at greater than 90% performance.
01:29:13.270 --> 01:29:15.260
Once we went a day, level three,
01:29:15.260 --> 01:29:17.840
when frequency dropped down so low,
01:29:17.840 --> 01:29:19.720
it did trip off many of our generators.
01:29:19.720 --> 01:29:23.650
And that wasn't just
necessarily distribution circuits,
01:29:23.650 --> 01:29:26.220
but it was because the
frequency dropping so low.
01:29:26.220 --> 01:29:27.053
But then after that,
01:29:27.053 --> 01:29:30.740
we did have quite a few
rolling brown that did impact
01:29:30.740 --> 01:29:36.790
our performance
somewhat, but it did affect us,
01:29:36.790 --> 01:29:39.500
but we were still providing the service
01:29:39.500 --> 01:29:41.310
that we were supposed to be providing
01:29:41.310 --> 01:29:44.060
and trying to prevent us
going to an EEA level three,
01:29:44.060 --> 01:29:45.450
up until that happens.
01:29:45.450 --> 01:29:47.100
And somewhat when that happens,
01:29:47.100 --> 01:29:49.860
that does change the system some point.
01:29:49.860 --> 01:29:53.883
So wanted to talk
a little bit about that.
01:29:55.540 --> 01:29:57.100
The other thing is on the,
01:29:57.100 --> 01:29:58.240
we've talked about the budget cap.
01:29:58.240 --> 01:30:00.280
I think a lot of people have
mentioned that we also think
01:30:00.280 --> 01:30:01.543
it should be raised.
01:30:02.574 --> 01:30:05.530
It's been a $50 million
since I think 2008,
01:30:05.530 --> 01:30:09.640
we've had about a 30%
increase in load since then,
01:30:09.640 --> 01:30:10.520
peak load.
01:30:10.520 --> 01:30:13.220
So we think that's something
that should be looked at.
01:30:14.210 --> 01:30:15.890
Another component
that I'd like to talk about is
01:30:15.890 --> 01:30:19.300
that we talked about
how ERS is dispatched.
01:30:19.300 --> 01:30:23.390
And right now the 30
minute ERS is dispatched
01:30:23.390 --> 01:30:24.800
on an EEA level one.
01:30:24.800 --> 01:30:28.223
And then EEA level two is
when the 10 minute is dispatched.
01:30:29.300 --> 01:30:31.050
We've talked quite a bit,
01:30:31.050 --> 01:30:33.250
or for the fast past
few years that we think
01:30:34.330 --> 01:30:36.860
anytime as you approach
zero in response time,
01:30:36.860 --> 01:30:38.860
that resource should be worth more
01:30:38.860 --> 01:30:40.520
than a slower responding resource.
01:30:40.520 --> 01:30:44.530
And so what's happened
in ERS is everyone has went
01:30:44.530 --> 01:30:49.250
to the 30 minute product
because it's priced the exact same.
01:30:49.250 --> 01:30:51.780
And we're gonna go to the 30 minute
01:30:51.780 --> 01:30:53.770
because it gives us
more time to make sure
01:30:53.770 --> 01:30:57.610
everything's up and
running properly whatnot.
01:30:57.610 --> 01:31:00.409
But what we would suggest
is this let's take everything
01:31:00.409 --> 01:31:04.433
to an EEA level one startup
time instead of EEA level two.
01:31:05.928 --> 01:31:07.520
And during the storm,
I saw that we were,
01:31:07.520 --> 01:31:11.140
1215 was when EEA level one happened,
01:31:11.140 --> 01:31:13.560
107 was when two happened.
01:31:13.560 --> 01:31:16.030
And then 120, we
were at EEA level three.
01:31:16.030 --> 01:31:18.910
So 52 minutes between one and two,
01:31:18.910 --> 01:31:21.000
13 minutes between two and three.
01:31:21.000 --> 01:31:23.520
So between two and
three went, like you said,
01:31:23.520 --> 01:31:25.060
extremely quick.
01:31:25.060 --> 01:31:27.320
If we move those all up to level one,
01:31:27.320 --> 01:31:29.180
I think that helps somewhat.
01:31:29.180 --> 01:31:31.630
But then I think also if we're
gonna increase the budget,
01:31:31.630 --> 01:31:36.460
why not incent more people
to go to the 10 minute response
01:31:36.460 --> 01:31:39.440
and make that a dual bidding system
01:31:39.440 --> 01:31:41.280
where if you can do the 10 minute,
01:31:41.280 --> 01:31:43.680
maybe then you can get
paid more for that, right?
01:31:43.680 --> 01:31:46.620
Because you're providing
a better service to the grid.
01:31:46.620 --> 01:31:50.000
And if you had a 10 minute
response time in EEA level one,
01:31:50.000 --> 01:31:52.233
I think that's very helpful to the grid.
01:31:53.860 --> 01:31:56.410
I guess that's probably my
primary comment on that.
01:31:58.800 --> 01:32:01.603
Last within,
01:32:04.040 --> 01:32:06.069
setting up distributed generation,
01:32:06.069 --> 01:32:07.690
one of the things that we've noticed,
01:32:07.690 --> 01:32:10.710
and I think a lot of people
see is that the difference
01:32:10.710 --> 01:32:13.040
between a large generator
and distributed generation
01:32:13.040 --> 01:32:18.040
is any one thing can cause
it to be uneconomic, right?
01:32:18.100 --> 01:32:21.770
And so interconnects become
very important to us, right?
01:32:21.770 --> 01:32:23.053
The cost of interconnect.
01:32:24.327 --> 01:32:26.990
And two things really
affect that, one is metering.
01:32:26.990 --> 01:32:29.630
If we become a distributed
generation resource,
01:32:29.630 --> 01:32:32.012
we have to put in EPS metering,
01:32:32.012 --> 01:32:35.492
there is a wide array
of pricing between TSPs
01:32:35.492 --> 01:32:37.400
on putting in an EPS metering.
01:32:37.400 --> 01:32:39.410
We have one TDS P that
we're working with right now
01:32:39.410 --> 01:32:40.643
that we'll do it for $0.
01:32:41.489 --> 01:32:45.143
And another one that's
$450,000 for an EPS meter.
01:32:47.190 --> 01:32:49.920
I think a lot of these rules
are based on old rules
01:32:49.920 --> 01:32:54.430
many years ago, put in
place with AMS metering.
01:32:54.430 --> 01:32:57.250
I think metering is a lot
more dependable now
01:32:57.250 --> 01:32:58.720
than it used to be in the past.
01:32:58.720 --> 01:33:00.750
But when you're talking
about a one megawatt site
01:33:00.750 --> 01:33:04.250
and you say all of a sudden
that could be $450,000,
01:33:04.250 --> 01:33:07.800
that could be 40 to 50% of
the cost of the entire project.
01:33:07.800 --> 01:33:09.930
So that's very expensive.
01:33:09.930 --> 01:33:13.300
There's also a lot of
things I'd like to talk about
01:33:13.300 --> 01:33:18.300
on interconnect with the
protection that's required on TPS.
01:33:19.710 --> 01:33:22.730
It used to be basically if
you went to two megawatts,
01:33:22.730 --> 01:33:24.550
you know, you didn't
have to pin in transfer trip.
01:33:24.550 --> 01:33:27.240
And if above two megawatts
generally then transfer
01:33:27.240 --> 01:33:28.563
trip could be required.
01:33:29.550 --> 01:33:30.630
That has changed a lot.
01:33:30.630 --> 01:33:34.470
And so some utilities
are requiring transfer trip
01:33:34.470 --> 01:33:38.680
for basically every
facility that's put in place.
01:33:38.680 --> 01:33:42.630
Those can range anywhere
from 150 to $250,000.
01:33:42.630 --> 01:33:43.463
And once again,
01:33:43.463 --> 01:33:46.900
that's a very costly
component for putting
01:33:46.900 --> 01:33:48.690
in distributed generation.
01:33:48.690 --> 01:33:51.626
And one part that I'd like
to really point out is that,
01:33:51.626 --> 01:33:54.470
the main cost of that
is put the equipment
01:33:54.470 --> 01:33:56.060
into the substation,
01:33:56.060 --> 01:33:59.150
that it's the first mover
that pays for the entire
01:33:59.150 --> 01:34:02.800
cost of putting that
system into the substation.
01:34:02.800 --> 01:34:04.570
And once it's set of
up on the substation,
01:34:04.570 --> 01:34:08.930
then others can come in
and get do it much cheaper.
01:34:08.930 --> 01:34:11.200
So should that be a
subsidized cost across
01:34:12.180 --> 01:34:14.180
the grid somehow to incent more
01:34:15.060 --> 01:34:17.443
distributed generation
being put on the grid?
01:34:21.050 --> 01:34:23.520
That is all I have.
01:34:23.520 --> 01:34:25.790
Before you move on, if I could,
01:34:25.790 --> 01:34:27.390
I certainly wanted to...
01:34:28.550 --> 01:34:32.613
Saw your comments consistency
on interconnection processes.
01:34:34.367 --> 01:34:35.490
Is there...
01:34:37.210 --> 01:34:39.560
what's the inconsistency
other than these price
01:34:40.757 --> 01:34:44.500
in terms of these
augmentations to their system
01:34:44.500 --> 01:34:46.290
in order to get you interconnected?
01:34:46.290 --> 01:34:48.660
Is there a timeline
inconsistency as well
01:34:48.660 --> 01:34:51.220
in terms of process, or
what do you see out there,
01:34:51.220 --> 01:34:52.590
you're operating in every system?
01:34:52.590 --> 01:34:54.300
Yeah, there is,
01:34:54.300 --> 01:34:57.800
I mean once you go into a transfer trip,
01:34:57.800 --> 01:35:02.310
that can increase the
timeline by 10 months,
01:35:02.310 --> 01:35:04.350
well, for doing something like that.
01:35:04.350 --> 01:35:08.277
So that gets to, have
transfer trip facilities
01:35:10.080 --> 01:35:12.430
that'll take over a year
to get interconnected.
01:35:16.960 --> 01:35:20.390
It seems like some DG
interconnection standards
01:35:21.890 --> 01:35:24.420
is where you can use
some assistance from us
01:35:24.420 --> 01:35:28.440
and working with the TDU
and coming up with consistency
01:35:28.440 --> 01:35:31.830
in their tariffs for charging
distributed generation.
01:35:31.830 --> 01:35:32.980
Yes, I agree.
01:35:34.300 --> 01:35:35.133
If possible.
01:35:37.458 --> 01:35:40.250
And I think one thing
that SB3 includes in
01:35:40.250 --> 01:35:45.250
it is that ERCOT has to
require an owner of DG
01:35:45.670 --> 01:35:49.580
to register with ERCOT
and also with the TDU.
01:35:49.580 --> 01:35:51.560
So I think that's gonna
provide a lot more visibility
01:35:51.560 --> 01:35:53.573
into the distribution system.
01:35:53.573 --> 01:35:54.406
That's been something I know,
01:35:54.406 --> 01:35:56.240
or kind of struggled with for years.
01:35:56.240 --> 01:35:59.290
And so as we look to
integrate distribute generation
01:35:59.290 --> 01:36:02.440
into a variety of programs
01:36:02.440 --> 01:36:06.781
and use those
facilities for reliability,
01:36:06.781 --> 01:36:08.923
I think that's gonna also of help
01:36:08.923 --> 01:36:10.490
with respect to (indistinct)
01:36:10.490 --> 01:36:12.800
I agree, appreciate that.
01:36:13.942 --> 01:36:16.836
Well one quick question.
01:36:16.836 --> 01:36:18.786
I know we're trying to watch the clock.
01:36:20.790 --> 01:36:24.010
You spoke about your
reliability in various
01:36:24.010 --> 01:36:25.620
across the presentation,
01:36:25.620 --> 01:36:29.840
and I believe you said you
run natural gas generators.
01:36:29.840 --> 01:36:30.673
We do.
01:36:30.673 --> 01:36:34.020
How do y'all ensure
farm fuel supply?
01:36:34.020 --> 01:36:35.970
That's a great question.
01:36:35.970 --> 01:36:36.803
First of all,
01:36:36.803 --> 01:36:39.037
is that we are providing
resiliency as a service
01:36:39.037 --> 01:36:40.360
to our customers, right?
01:36:40.360 --> 01:36:42.420
So us being there
during whatever weather
01:36:42.420 --> 01:36:44.040
is extremely important.
01:36:44.040 --> 01:36:47.090
So we always buy firm,
no notice, natural gas.
01:36:47.090 --> 01:36:51.170
So we pay large premium
and price to get our gas.
01:36:51.170 --> 01:36:53.423
We're not buying non-farm gas.
01:36:54.790 --> 01:36:56.500
So that's the first thing.
01:36:56.500 --> 01:36:58.510
The second thing that
we saw during the storm
01:36:58.510 --> 01:37:00.710
is that our operating pressures
01:37:00.710 --> 01:37:04.300
that we can down can
run down to five PSIG.
01:37:04.300 --> 01:37:07.040
Whereas a lot of turbines
have to run somewhere
01:37:07.040 --> 01:37:09.840
between 400, 700 PSIG.
01:37:09.840 --> 01:37:13.490
So where they might be
affected by drop in pressure
01:37:13.490 --> 01:37:14.780
that doesn't affect us at all.
01:37:14.780 --> 01:37:17.970
But the primary reason is
that we pay up to make sure
01:37:17.970 --> 01:37:18.803
that we get,
01:37:19.830 --> 01:37:21.410
we're willing to pay the
higher price to make sure
01:37:21.410 --> 01:37:23.360
we're available over
there for our customers.
01:37:23.360 --> 01:37:27.210
Is there any
particular, is it just any farm?
01:37:27.210 --> 01:37:28.043
What, I mean,
01:37:28.043 --> 01:37:29.560
there's lots of flavors
of contracts there,
01:37:29.560 --> 01:37:34.119
any specific standards
that y'all so set as minimum?
01:37:34.119 --> 01:37:37.950
We're behind LDCs
because we're not as large,
01:37:37.950 --> 01:37:40.750
we're not on the intrastate
or interstate pipelines.
01:37:40.750 --> 01:37:44.530
So we're behind the LDCs,
we're buying service from them,
01:37:44.530 --> 01:37:46.720
which is a more firm service right
01:37:46.720 --> 01:37:48.053
in the first place.
01:37:49.500 --> 01:37:52.077
Yeah, but that's primarily
where we're operating.
01:37:53.132 --> 01:37:55.351
All right, thank you, sir.
01:37:55.351 --> 01:37:56.460
Got one more question
01:37:56.460 --> 01:37:59.300
with respect to weatherization
and any lesson learned
01:37:59.300 --> 01:38:01.570
from the winter storm.
01:38:01.570 --> 01:38:04.020
I thought I heard in
passing that there were some
01:38:05.820 --> 01:38:08.040
maybe natural gas diesel BG facilities
01:38:08.040 --> 01:38:11.553
that weren't able to function
during storm cause they froze.
01:38:13.071 --> 01:38:14.471
And is there anything there?
01:38:16.260 --> 01:38:17.670
We definitely
had lessons learned.
01:38:17.670 --> 01:38:20.203
We were taking notes
during the entire week.
01:38:21.220 --> 01:38:22.670
Seeing things were happen.
01:38:22.670 --> 01:38:25.170
We had certain breakers
that may have froze up
01:38:25.170 --> 01:38:27.017
that we've looked at inside ATS.
01:38:30.454 --> 01:38:33.250
And our inside of our ATSs
that we're adding heaters
01:38:33.250 --> 01:38:36.303
to changing the heater
settings, stuff like that.
01:38:37.310 --> 01:38:42.310
But nothing with freezing
up that happened to us,
01:38:43.160 --> 01:38:45.830
but we've spent a lot of time on that
01:38:45.830 --> 01:38:48.330
and I've already started
making changes to
01:38:48.330 --> 01:38:49.163
just like you do.
01:38:49.163 --> 01:38:50.770
That's just what we do.
01:38:50.770 --> 01:38:51.920
Anytime we have an operation,
01:38:51.920 --> 01:38:53.570
we're always looking at what happened,
01:38:53.570 --> 01:38:55.200
how should we look at it?
01:38:55.200 --> 01:38:56.033
What could we do better?
01:38:56.033 --> 01:38:57.140
What could we change?
01:38:57.140 --> 01:38:57.973
Stuff like that.
01:38:57.973 --> 01:39:00.880
So I think we've already made
or in the process of making
01:39:00.880 --> 01:39:04.510
a lot of changes that
will increase reliability
01:39:04.510 --> 01:39:06.373
further than the whole we had.
01:39:08.080 --> 01:39:08.913
All right.
01:39:08.913 --> 01:39:09.920
Thank you very much.
01:39:09.920 --> 01:39:11.213
Thank you all.
01:39:11.213 --> 01:39:12.560
Appreciate you being here, Mr. Amthor.
01:39:14.380 --> 01:39:16.070
Before we bring up our next panel,
01:39:16.070 --> 01:39:17.150
two minute break
01:39:18.450 --> 01:39:21.163
and we'll reconvene at 2:30.
01:39:32.310 --> 01:39:35.450
Reconvene this work session.
01:39:35.450 --> 01:39:36.413
Trees and stuff-
01:39:38.744 --> 01:39:42.410
For our final panel screen
on products and technology
01:39:42.410 --> 01:39:43.640
and emphasis on technology,
01:39:43.640 --> 01:39:46.427
we will start with Ms. Hart from SunRun.
01:39:47.419 --> 01:39:48.252
Thank you so much.
01:39:48.252 --> 01:39:49.085
Thank you, chair.
01:39:49.085 --> 01:39:49.918
Thank you, Commissioners.
01:39:49.918 --> 01:39:52.230
Thanks for having me here today.
01:39:52.230 --> 01:39:55.990
Part of the conversation
and including SunRun.
01:39:55.990 --> 01:39:58.260
Just by way of introduction,
My name's Amy Hart,
01:39:58.260 --> 01:40:01.660
I'm a senior director
Republic policy at SunRun.
01:40:01.660 --> 01:40:05.310
I Have been with SunRun since 2014,
01:40:05.310 --> 01:40:10.310
have worked on solar policy
here in Texas since 2015.
01:40:10.570 --> 01:40:14.370
Happy to be here in
person with all of you.
01:40:14.370 --> 01:40:17.157
So just a little
background about SunRun.
01:40:17.157 --> 01:40:21.950
SunRun is a residential
solar and storage provider
01:40:21.950 --> 01:40:25.240
started in 2007 by our co-founders
01:40:25.240 --> 01:40:27.430
Ed Fenster and Lynn Jurich.
01:40:27.430 --> 01:40:30.360
We have grown to become
the largest residential
01:40:30.360 --> 01:40:33.930
solar battery storage and
energy services provider
01:40:33.930 --> 01:40:36.060
in the country by a significant margin.
01:40:36.060 --> 01:40:39.110
So we focus on that residential sector.
01:40:39.110 --> 01:40:42.730
We have more than 600 down
and customers across the US.
01:40:42.730 --> 01:40:47.570
We are the one of the top
three owners of solar in the US.
01:40:47.570 --> 01:40:49.770
So if you think about
just who owns solar farms
01:40:49.770 --> 01:40:50.700
who owns solar,
01:40:50.700 --> 01:40:53.782
we have 4.2 gigawatts of
networked solar capacity
01:40:53.782 --> 01:40:54.893
in the country.
01:40:56.556 --> 01:40:58.900
We are in 23 states,
Texas being one of them,
01:40:58.900 --> 01:41:01.450
including Puerto Rico and DC.
01:41:01.450 --> 01:41:04.907
Texas has served SunRun
customers since 2017.
01:41:04.907 --> 01:41:09.220
And we started offering
battery backup since 2019.
01:41:09.220 --> 01:41:10.530
So overall,
01:41:10.530 --> 01:41:12.480
part of this conversation will be about
01:41:14.573 --> 01:41:16.620
demand response and those resources.
01:41:16.620 --> 01:41:18.590
We don't participate in
those programs currently,
01:41:18.590 --> 01:41:19.680
I'll explain some of our, you know,
01:41:19.680 --> 01:41:21.690
Hey, here are the opportunities,
01:41:21.690 --> 01:41:25.810
but really number one, we're
fairly new to the Texas market.
01:41:25.810 --> 01:41:29.770
Since 2019, we have
branches and service in Houston
01:41:29.770 --> 01:41:33.200
and Dallas or worth area.
And most recently adding solar
01:41:33.200 --> 01:41:37.260
and storage service in
San Antonio and Austin.
01:41:37.260 --> 01:41:40.450
We have nearly 500 employees
01:41:40.450 --> 01:41:42.020
working at all those
different branches in it,
01:41:42.020 --> 01:41:45.750
out on rooftops, on any
given day here in Texas.
01:41:45.750 --> 01:41:48.240
And before we get into
the sort of the opportunities
01:41:48.240 --> 01:41:50.570
and challenges within demand response,
01:41:50.570 --> 01:41:52.410
since it's my first
opportunity getting to chat
01:41:52.410 --> 01:41:54.690
with a couple of you
just about the experience
01:41:54.690 --> 01:41:58.170
this past February
during the winter storms
01:41:58.170 --> 01:42:00.710
really just wanted to share
with you what happened
01:42:00.710 --> 01:42:05.020
for our customers and our
SunRun family here in Texas.
01:42:05.020 --> 01:42:08.030
We had hundreds of
customers that had solar
01:42:08.030 --> 01:42:10.030
and battery backup systems.
01:42:10.030 --> 01:42:13.620
They were able to power
through those outages.
01:42:13.620 --> 01:42:15.830
And so what that means is
they have solar on their rooftops.
01:42:15.830 --> 01:42:20.120
They have a battery system
that's backing up their power.
01:42:20.120 --> 01:42:23.450
The next day, the sun came
out, recharged the batteries,
01:42:23.450 --> 01:42:26.340
we had hundreds of customers
with thousands of hours,
01:42:26.340 --> 01:42:28.770
an aggregate of backup capacity.
01:42:28.770 --> 01:42:32.040
Some of those outages
ranged for 15 minutes
01:42:32.040 --> 01:42:33.080
that happened on and off.
01:42:33.080 --> 01:42:36.730
Some were a couple of days long.
01:42:36.730 --> 01:42:38.180
We, even this past week,
01:42:38.180 --> 01:42:41.420
I called our tech team
yesterday just to see
01:42:41.420 --> 01:42:44.213
how our systems perform
during the Storm Nicholas.
01:42:45.780 --> 01:42:49.440
And we did have a
number of our customers
01:42:49.440 --> 01:42:51.910
about a third of our storage customers
01:42:51.910 --> 01:42:55.340
in the Houston area that
did have power outages,
01:42:55.340 --> 01:42:57.930
but were able to have backup power
01:42:57.930 --> 01:43:00.040
through their battery backup systems.
01:43:00.040 --> 01:43:02.920
We actually saw those
systems kind of around
01:43:02.920 --> 01:43:05.600
the entire Houston area.
01:43:05.600 --> 01:43:07.610
So it's been interesting just to see
01:43:07.610 --> 01:43:09.110
where the outages occurred,
01:43:09.110 --> 01:43:14.110
but happy to see that all of
the customers were able to see,
01:43:15.630 --> 01:43:16.810
have that backup power.
01:43:16.810 --> 01:43:20.760
Some again, ranging
from in the Storm Nicholas
01:43:20.760 --> 01:43:24.303
ranging from one hour to
26 hours in some cases.
01:43:25.230 --> 01:43:27.820
So that's sort of what
our experience has been.
01:43:27.820 --> 01:43:30.730
We do know that when
there are the weather events,
01:43:30.730 --> 01:43:35.180
they're outages, it is felt
close to home, as you all know.
01:43:35.180 --> 01:43:38.210
And also whether it
makes us all feel better
01:43:38.210 --> 01:43:42.110
or worse, we are part
of these conversations
01:43:42.110 --> 01:43:44.280
and we're experiencing
these types of situations
01:43:44.280 --> 01:43:47.860
and conversations about how
to build a more resilient grid
01:43:47.860 --> 01:43:49.260
in lots of other states
01:43:49.260 --> 01:43:52.440
and in lots of other wholesale
markets across the country.
01:43:52.440 --> 01:43:54.760
So anywhere from Michigan, California,
01:43:54.760 --> 01:43:56.470
the Northeast New Orleans.
01:43:56.470 --> 01:44:00.130
And so what we've seen
in our approach is thinking
01:44:00.130 --> 01:44:04.120
about that home solar
and battery system.
01:44:04.120 --> 01:44:07.100
How can we leverage
that to not only provide
01:44:07.100 --> 01:44:08.610
that peace of mind for customers,
01:44:08.610 --> 01:44:10.820
but how do you build that resilient grid
01:44:10.820 --> 01:44:13.803
and demand response can be part of that.
01:44:13.803 --> 01:44:15.721
We're working with utilities
01:44:15.721 --> 01:44:18.630
and Commissions in a
number of different areas
01:44:18.630 --> 01:44:20.890
to use these re sources
in a variety of ways,
01:44:20.890 --> 01:44:23.108
depending on what the need is
01:44:23.108 --> 01:44:25.760
and demand response can
certainly play an important role.
01:44:25.760 --> 01:44:27.733
So we, as a member of,
01:44:27.733 --> 01:44:30.270
we have a member of a
number of trade associations,
01:44:30.270 --> 01:44:31.830
so that's how we've provided comments
01:44:31.830 --> 01:44:35.970
on the demand response
docket work session.
01:44:35.970 --> 01:44:37.180
We're members of TABA
01:44:37.180 --> 01:44:39.620
of the Texas Solar
Power Association and CS.
01:44:39.620 --> 01:44:41.760
So that's how our comments
have been provided.
01:44:41.760 --> 01:44:44.490
But thanks for inviting me here today
01:44:44.490 --> 01:44:47.790
to talk a little bit about
some considerations.
01:44:47.790 --> 01:44:52.160
So as I said, DERs
distributed generation
01:44:52.160 --> 01:44:54.350
in our respect, solar plus storage,
01:44:54.350 --> 01:44:57.000
really leveraging all
of the different values
01:44:57.000 --> 01:44:59.760
that can bring becomes really important.
01:44:59.760 --> 01:45:03.080
We also do support, which
was mentioned earlier,
01:45:03.080 --> 01:45:04.510
making sure that those rules,
01:45:04.510 --> 01:45:08.720
those can provide guardrails
that's technology neutral.
01:45:08.720 --> 01:45:10.040
So we do solar and storage.
01:45:10.040 --> 01:45:12.420
We think it's a really
powerful resource,
01:45:12.420 --> 01:45:14.480
but we also know
there's smart thermostats.
01:45:14.480 --> 01:45:15.730
We also know there's heat pumps.
01:45:15.730 --> 01:45:18.400
We also know that there's
going to be the ability
01:45:18.400 --> 01:45:20.522
for electric vehicles to play into that.
01:45:20.522 --> 01:45:22.710
I'd be remise if I didn't
mention we have a partnership
01:45:22.710 --> 01:45:23.660
with Ford,
01:45:23.660 --> 01:45:25.790
that's rolling out
with their all electric
01:45:27.310 --> 01:45:29.220
Ford F150 lightning,
01:45:29.220 --> 01:45:31.630
where we'll be able to
provide some backup.
01:45:31.630 --> 01:45:33.950
I'm just gonna get
some water if that's okay.
01:45:33.950 --> 01:45:35.150
I'll take a quick break.
01:45:36.880 --> 01:45:39.040
I should have brought it with me.
01:45:39.040 --> 01:45:39.873
Thank you all.
01:45:44.670 --> 01:45:48.450
So with the Ford F-150 the electric
01:45:48.450 --> 01:45:52.120
that would be the first
electric vehicle that's going to,
01:45:52.120 --> 01:45:54.620
instead of just having your
home or the grid charge
01:45:54.620 --> 01:45:55.970
to the vehicle,
01:45:55.970 --> 01:45:58.483
the vehicle can provide
backup power to the home.
01:46:01.750 --> 01:46:04.093
So that's where things begin to change.
01:46:05.140 --> 01:46:07.703
We also had, excuse me,
01:46:09.310 --> 01:46:12.440
a partnership in South Carolina
01:46:15.890 --> 01:46:17.660
with Duke Energy
01:46:17.660 --> 01:46:21.840
and they have used their
energy efficiency program
01:46:21.840 --> 01:46:24.960
to develop a program for solar coupled
01:46:24.960 --> 01:46:26.920
with smart thermostats.
01:46:26.920 --> 01:46:28.750
So using kind of looking at all those
01:46:28.750 --> 01:46:31.863
different technologies, how
to encourage that in the home.
01:46:33.275 --> 01:46:34.970
(coughs) excuse me.
01:46:34.970 --> 01:46:35.840
We can be a tough audience.
01:46:35.840 --> 01:46:37.190
I know, I apologize.
01:46:37.190 --> 01:46:39.550
I was doing so, and I'm fine.
01:46:39.550 --> 01:46:42.734
It's just a little
tickle that I realize.
01:46:42.734 --> 01:46:45.817
I think I realized- (laughing)
01:46:46.780 --> 01:46:48.930
I should have started with that.
01:46:48.930 --> 01:46:53.450
I should note this photo
is from the winter storm
01:46:53.450 --> 01:46:55.193
in Houston, one of our customers.
01:46:56.257 --> 01:46:58.470
And I think one of the
pieces of my remarks
01:46:58.470 --> 01:47:02.230
is really thinking about this
as seamless for the customer.
01:47:02.230 --> 01:47:04.383
They went out to walk
their dog in the morning,
01:47:04.383 --> 01:47:06.800
and kind of what's going on,
01:47:06.800 --> 01:47:09.650
it did not know that there
had been a power outage
01:47:09.650 --> 01:47:14.150
because of that seamless
switch to a battery backup.
01:47:14.150 --> 01:47:16.230
And so that was one of
the families that was able
01:47:16.230 --> 01:47:18.340
to power through our goal of course,
01:47:18.340 --> 01:47:21.840
is to expand that to as
many folks as possible
01:47:21.840 --> 01:47:23.333
and expand those solutions.
01:47:25.430 --> 01:47:27.450
So what did
look like for that family?
01:47:27.450 --> 01:47:29.970
I mean, was this just a
brief interlude to where
01:47:29.970 --> 01:47:33.330
they bought themselves
some time or did they make it?
01:47:33.330 --> 01:47:34.924
Oh, little bit both.
01:47:34.924 --> 01:47:38.520
So we did not have any experiences where
01:47:38.520 --> 01:47:40.580
the battery was drained so low,
01:47:40.580 --> 01:47:42.450
where they were not able to make it.
01:47:42.450 --> 01:47:44.640
And that could be a combination of
01:47:44.640 --> 01:47:49.240
they had an outage of 20
minutes or an outage of an hour.
01:47:49.240 --> 01:47:52.770
If you get into a multi-day outage,
01:47:52.770 --> 01:47:56.940
we did not have a number
of days without sun, right?
01:47:56.940 --> 01:47:58.720
So the next day there was enough,
01:47:58.720 --> 01:47:59.950
maybe it was a little bit of cloudy
01:47:59.950 --> 01:48:03.070
for a couple of hours still
as the storms rolled through.
01:48:03.070 --> 01:48:05.437
But that was able to
recharge the battery.
01:48:05.437 --> 01:48:07.550
And so they were able to power through.
01:48:07.550 --> 01:48:10.060
Now we do have some customers
01:48:10.060 --> 01:48:12.780
just to get into that experience,
01:48:12.780 --> 01:48:15.880
we will design the system for their need
01:48:15.880 --> 01:48:17.620
and also their financial situation.
01:48:17.620 --> 01:48:20.350
So we have enough
of different offerings.
01:48:20.350 --> 01:48:22.990
We have it offer the LG Chem battery,
01:48:22.990 --> 01:48:25.610
and also the Tesla Power Wall battery.
01:48:25.610 --> 01:48:27.400
We were the first
solar company to install
01:48:27.400 --> 01:48:32.330
a Tesla Power Wall for
backup back in 2016, I believe.
01:48:32.330 --> 01:48:33.520
So we have a lot of experience.
01:48:33.520 --> 01:48:37.930
The Tesla Power Wall provides
a whole home backup solution.
01:48:37.930 --> 01:48:39.890
So if you're like, Hey,
I want everything on,
01:48:39.890 --> 01:48:41.140
I want my coffee maker on.
01:48:41.140 --> 01:48:44.730
I want my, all the
appliances, that's your backup.
01:48:44.730 --> 01:48:47.390
If you say, okay, I can
handle my critical loads.
01:48:47.390 --> 01:48:49.870
What's my heating,
what's my refrigeration?
01:48:49.870 --> 01:48:51.920
What do I need for my critical loads?
01:48:51.920 --> 01:48:54.270
Then you can size your
batteries system a different way.
01:48:54.270 --> 01:48:58.030
So some customers said,
okay, we want the LG Chem,
01:48:58.030 --> 01:49:00.040
we want a smaller battery.
01:49:00.040 --> 01:49:02.800
well, now your loads are
going to adjust a little bit
01:49:02.800 --> 01:49:03.960
when you go to that outage,
01:49:03.960 --> 01:49:05.470
but they knew that ahead of time
01:49:05.470 --> 01:49:08.150
that they didn't need
that whole home back up.
01:49:08.150 --> 01:49:09.780
So that's kind of the
conversation we have
01:49:09.780 --> 01:49:12.443
at the kitchen table with the customer.
01:49:13.560 --> 01:49:14.840
So one of the other,
01:49:14.840 --> 01:49:19.805
so the next bullet is the
aggregate load reduction.
01:49:19.805 --> 01:49:20.638
And I think,
01:49:20.638 --> 01:49:22.050
so I think this is something
that's been interesting
01:49:22.050 --> 01:49:25.930
as we've done a few bidding
into wholesale markets
01:49:25.930 --> 01:49:30.800
or demand response of
being able to aggregate
01:49:30.800 --> 01:49:32.230
these small systems,
01:49:32.230 --> 01:49:36.770
but still have trans
into what's happening.
01:49:36.770 --> 01:49:39.050
So we fully support transparency.
01:49:39.050 --> 01:49:41.670
I think when we get
in to talk about costs
01:49:41.670 --> 01:49:42.963
for participation,
01:49:43.932 --> 01:49:48.932
does the requirement of
telemetry down to a home
01:49:49.130 --> 01:49:52.130
with a five kilowatt system make sense?
01:49:52.130 --> 01:49:55.160
That's just not economically
feasible for that customer
01:49:55.160 --> 01:49:56.850
to be able to do that.
01:49:56.850 --> 01:49:59.290
And we've seen in other RTOs,
01:49:59.290 --> 01:50:00.400
like in the CaISO market,
01:50:00.400 --> 01:50:02.700
they said we don't need
to see it down to the home,
01:50:02.700 --> 01:50:06.550
but we'd like to see it
aggregated at the 100 KW level,
01:50:06.550 --> 01:50:08.170
which is about 20 homes.
01:50:08.170 --> 01:50:10.310
So that's pretty darn small,
01:50:10.310 --> 01:50:12.650
that's smaller than most commercial.
01:50:12.650 --> 01:50:13.483
So what
does that look like?
01:50:13.483 --> 01:50:16.890
Does that, do you install a feeder or?
01:50:16.890 --> 01:50:17.800
What does that look like?
01:50:17.800 --> 01:50:18.994
No.
01:50:18.994 --> 01:50:20.030
So they just want to be able to know
01:50:20.030 --> 01:50:22.080
that's what's going to respond where,
01:50:22.080 --> 01:50:27.080
and whether it's some
sort of meter of some sort,
01:50:27.300 --> 01:50:29.560
not a separate line by any means.
01:50:29.560 --> 01:50:31.330
So you install a
separate meter that everybody
01:50:31.330 --> 01:50:33.410
into all those power flows,
01:50:33.410 --> 01:50:36.500
that then goes on to
the distribution system
01:50:36.500 --> 01:50:38.150
that goes to wholesale.
01:50:38.150 --> 01:50:38.983
That's right.
01:50:40.809 --> 01:50:44.550
So I think there's...
01:50:44.550 --> 01:50:47.050
I guess what I love
about it is the power of
01:50:47.050 --> 01:50:49.640
aggregating these systems
that makes it powerful,
01:50:49.640 --> 01:50:52.430
but you can still
have the ability to see
01:50:52.430 --> 01:50:54.140
down to that noble level.
01:50:54.140 --> 01:50:57.260
If you're talking about the
switch from a whole zone
01:50:57.260 --> 01:50:58.970
down to vocational price,
01:50:58.970 --> 01:51:03.110
well, now you can see where
those aggregated systems are.
01:51:03.110 --> 01:51:05.960
So there's I think
different conversations
01:51:05.960 --> 01:51:08.280
about aggregated DG,
and what does that mean?
01:51:08.280 --> 01:51:09.870
From our perspective,
01:51:09.870 --> 01:51:12.580
aggregated DG can be
anything from 100 KW
01:51:12.580 --> 01:51:14.743
up to the multiple megawatts.
01:51:15.980 --> 01:51:18.100
But being able to use demand response
01:51:18.100 --> 01:51:20.960
as a way to aggregate those systems.
01:51:20.960 --> 01:51:25.960
We also support having
REPs be able to aggregate
01:51:26.020 --> 01:51:29.830
those system or finding
a market for customer
01:51:29.830 --> 01:51:32.970
cited solar and storage
and demand response,
01:51:32.970 --> 01:51:35.670
but also would encourage
the Commission to think about
01:51:36.730 --> 01:51:40.133
the rules around allowing
third party aggregators
01:51:40.133 --> 01:51:41.590
to do that.
01:51:41.590 --> 01:51:43.270
It might be a company like SunRun,
01:51:43.270 --> 01:51:45.670
but there's also a lot of
really good solar companies
01:51:45.670 --> 01:51:47.440
and solar and storage installers
01:51:47.440 --> 01:51:50.970
that have no interest or
experience in being aggregators.
01:51:50.970 --> 01:51:52.450
So set up market rules,
01:51:52.450 --> 01:51:56.680
which would allow those
types of third party aggregators
01:51:56.680 --> 01:51:58.830
and providers to be on the hook.
01:51:58.830 --> 01:52:02.887
To be made to make
sure those that shows up
01:52:02.887 --> 01:52:05.483
when it's bid into these systems.
01:52:07.120 --> 01:52:11.560
The other piece is yeah,
enhancing the compensation look.
01:52:11.560 --> 01:52:16.100
The two main barriers is any signals,
01:52:16.100 --> 01:52:19.680
there's providing the
economic signal for a company
01:52:19.680 --> 01:52:22.990
like SunRun or others
to find the solution
01:52:22.990 --> 01:52:25.950
and participate, and then the
other one would be technology.
01:52:25.950 --> 01:52:29.260
And the technology kind
of impacts the economics.
01:52:29.260 --> 01:52:30.970
So providing the right
signal, if you're saying,
01:52:30.970 --> 01:52:35.310
Hey, we want more of
resources to respond,
01:52:35.310 --> 01:52:38.240
not when it becomes
that EEA3 but earlier,
01:52:38.240 --> 01:52:40.020
and maybe it's scheduled.
01:52:40.020 --> 01:52:41.680
ISO New England, for example,
01:52:41.680 --> 01:52:44.450
we have been into their capacity market.
01:52:44.450 --> 01:52:47.390
So take what works for this market.
01:52:47.390 --> 01:52:52.050
But they have scheduled
four hour peak windows
01:52:52.050 --> 01:52:55.520
in the summer, two
hour peaks in the winter.
01:52:55.520 --> 01:52:56.620
And so you're on the,
01:52:56.620 --> 01:52:59.820
you have to show up when
called on during those windows,
01:52:59.820 --> 01:53:02.620
but then you can also in California,
01:53:02.620 --> 01:53:05.880
in CaISO it's also day ahead.
01:53:05.880 --> 01:53:10.610
So there might be peak
programs that we would sign up for.
01:53:10.610 --> 01:53:12.890
So let me ask
you this on aggregated basis
01:53:12.890 --> 01:53:16.010
and ISO New England that
gets a capacity payment,
01:53:16.010 --> 01:53:17.630
and you get to bid for
a capacity payment.
01:53:17.630 --> 01:53:18.463
Correct.
01:53:19.410 --> 01:53:23.110
The cloud
goes over, you're out.
01:53:23.110 --> 01:53:24.220
How does the penalty work?
01:53:24.220 --> 01:53:26.010
Well, the penalty
is significant,
01:53:26.010 --> 01:53:27.130
so we make sure that-
01:53:27.130 --> 01:53:27.963
and how does that-
01:53:27.963 --> 01:53:28.796
We show up-
01:53:28.796 --> 01:53:30.290
Does it go down
to the customer and then like,
01:53:30.290 --> 01:53:32.040
oh my goodness- No.
01:53:32.040 --> 01:53:33.630
Yeah, so the risk is on us.
01:53:33.630 --> 01:53:34.790
So that a great question.
01:53:34.790 --> 01:53:39.400
So how it works in
ISO New England is it,
01:53:39.400 --> 01:53:42.920
so for example, we successfully
been in it's 20 megawatts.
01:53:42.920 --> 01:53:45.480
Which is five to 8,000 homes,
01:53:45.480 --> 01:53:50.480
and we under promise, and over deliver.
01:53:50.610 --> 01:53:54.580
So do we have way more than 20 megawatts
01:53:54.580 --> 01:53:58.250
of solar and battery
systems that we can call on
01:53:58.250 --> 01:54:00.050
to meet that requirement?
01:54:00.050 --> 01:54:04.130
Yes, because we never want
to be short and pay that penalty.
01:54:04.130 --> 01:54:08.160
And so what we will do is, we'll,
01:54:08.160 --> 01:54:11.210
we would get a payment to participate,
01:54:11.210 --> 01:54:15.550
but that payment gets
passed onto the customer
01:54:15.550 --> 01:54:17.070
in a monthly incentive,
01:54:17.070 --> 01:54:19.343
whether or not they're called on or not.
01:54:20.300 --> 01:54:23.650
Because we know we need
to use them in aggregate.
01:54:23.650 --> 01:54:27.720
So we may have 15,000
homes that we have enrolled
01:54:27.720 --> 01:54:32.130
in the program where we only
need 5,000 of those batteries,
01:54:32.130 --> 01:54:34.330
of the battery to show up.
01:54:34.330 --> 01:54:36.210
And the other piece that I would note,
01:54:36.210 --> 01:54:38.870
and I can talk a little
bit more about this
01:54:38.870 --> 01:54:41.220
is just how it works at a customer level
01:54:41.220 --> 01:54:43.090
is that it is seamless, right?
01:54:43.090 --> 01:54:46.180
So they get a reduction
basically in their battery price.
01:54:46.180 --> 01:54:47.740
So now they get, okay,
01:54:47.740 --> 01:54:50.100
I get the peace of mind
if the power go is out,
01:54:50.100 --> 01:54:54.180
but it's a lot lower
because we get a benefit
01:54:54.180 --> 01:54:56.630
for participating in
this capacity market.
01:54:56.630 --> 01:54:59.130
We get called on, they never know.
01:54:59.130 --> 01:55:02.160
Because we're just using
the power that's in their battery.
01:55:02.160 --> 01:55:05.210
So, but they're
paying for reliability
01:55:05.210 --> 01:55:07.230
and redundancy if the power goes out,
01:55:07.230 --> 01:55:10.270
while at the same time you're
drawing down their battery?
01:55:10.270 --> 01:55:13.630
So if the power goes out,
01:55:13.630 --> 01:55:16.030
we're no longer gonna be called on.
01:55:16.030 --> 01:55:17.290
Well, I thought-
01:55:17.290 --> 01:55:18.123
At that point, it's too late,
01:55:18.123 --> 01:55:20.123
but they thought
they had a full battery.
01:55:21.530 --> 01:55:23.530
But because presumably
01:55:23.530 --> 01:55:27.745
that capacity was called on the way-
01:55:27.745 --> 01:55:29.260
Like the day before, yeah.
01:55:29.260 --> 01:55:30.660
Six hours before.
01:55:30.660 --> 01:55:31.753
Great question.
01:55:33.413 --> 01:55:34.730
So not only has
the customer given up
01:55:34.730 --> 01:55:36.890
control of their battery,
01:55:36.890 --> 01:55:39.880
they've also don't have a full battery
01:55:39.880 --> 01:55:40.713
when they think they do.
01:55:40.713 --> 01:55:44.370
So we always reserve 20 to 50%
01:55:44.370 --> 01:55:47.160
depending on what the
customer wants of that battery
01:55:47.160 --> 01:55:48.540
for backup use.
01:55:48.540 --> 01:55:52.427
So we never say we're
going to your battery is 100%.
01:55:52.427 --> 01:55:55.110
I thought I
had 100% battery
01:55:56.107 --> 01:55:59.133
and the lights go out
and I've only got 50%,
01:56:00.120 --> 01:56:00.953
as a customer,
01:56:00.953 --> 01:56:04.046
I'd have some pretty strong
negative opinions about that.
01:56:04.046 --> 01:56:05.774
With the
size of your house.
01:56:05.774 --> 01:56:08.094
I mean, You can light
of one room, right?
01:56:08.094 --> 01:56:10.575
(laughing)
01:56:10.575 --> 01:56:12.990
Well, I'm not gonna-
The whole house.
01:56:12.990 --> 01:56:14.300
But it's yeah.
01:56:14.300 --> 01:56:17.963
I won't get into your
electrical needs.
01:56:19.250 --> 01:56:20.480
So what will happen though,
01:56:20.480 --> 01:56:23.810
that's part of the
conversation in the contract
01:56:23.810 --> 01:56:25.790
of what are you going to use it for?
01:56:25.790 --> 01:56:27.170
What are your expectations?
01:56:27.170 --> 01:56:30.610
If you say, I want whole
home, no matter what,
01:56:30.610 --> 01:56:33.290
I don't just want to use
critical loads while charges
01:56:33.290 --> 01:56:37.236
back up, fine, that's
not the program for you.
01:56:37.236 --> 01:56:38.870
There's that understanding,
01:56:38.870 --> 01:56:40.600
but you're exactly right.
01:56:40.600 --> 01:56:45.400
But that's why we have
15,000 homes participate
01:56:45.400 --> 01:56:49.360
instead of 5,000 homes,
because you're not using---
01:56:49.360 --> 01:56:50.930
Sure, thinking
about the customer.
01:56:50.930 --> 01:56:54.400
I can see how it works
from your company's level
01:56:54.400 --> 01:56:57.710
and from the so it's level
by aggregating me homes,
01:56:57.710 --> 01:57:00.650
but for the individual
customer who paid for
01:57:00.650 --> 01:57:04.343
a pretty substantial
infrastructure in their home,
01:57:05.910 --> 01:57:07.223
there's an upfront,
01:57:08.320 --> 01:57:11.828
I guess, subscription
package they get to choose-
01:57:11.828 --> 01:57:13.510
That's right.
01:57:13.510 --> 01:57:15.470
Silver or gold package,
01:57:15.470 --> 01:57:18.480
but there's, depending
on the fine print,
01:57:18.480 --> 01:57:21.720
they may think they've
got a battery for a backup
01:57:21.720 --> 01:57:25.310
that's gonna be 100% charge
when they need it the most,
01:57:25.310 --> 01:57:27.220
but they can, when the lights go out,
01:57:27.220 --> 01:57:30.340
they may find out they've only
got 50% of what they thought.
01:57:30.340 --> 01:57:32.690
Well, and with
a battery, the look,
01:57:32.690 --> 01:57:37.690
the lights are out for 10 hours.
01:57:37.820 --> 01:57:40.610
Like it is, but there is generation.
01:57:40.610 --> 01:57:42.370
That's why we always tie it to solar
01:57:42.370 --> 01:57:45.870
because there's always
generation coming into that battery.
01:57:45.870 --> 01:57:50.590
So you have that battery has
to get you through an evening.
01:57:50.590 --> 01:57:51.880
Unless you're on that critical load,
01:57:51.880 --> 01:57:53.660
now you're going to have
down to your critical loads
01:57:53.660 --> 01:57:55.060
to get you through that evening.
01:57:55.060 --> 01:57:57.330
So you design that system,
01:57:57.330 --> 01:58:00.543
so you know, you've got
that generation coming.
01:58:01.400 --> 01:58:04.740
Very tricky customer
experience to manage.
01:58:04.740 --> 01:58:05.940
Yeah, yes it is.
01:58:09.880 --> 01:58:11.539
Other questions?
01:58:11.539 --> 01:58:12.372
No, keep going.
01:58:12.372 --> 01:58:13.940
Okay, great.
01:58:13.940 --> 01:58:16.040
And so the other piece
I would just mention
01:58:16.040 --> 01:58:18.860
is the compensation
ensuring the technology
01:58:18.860 --> 01:58:23.760
can respond data head
signals for the technology today
01:58:23.760 --> 01:58:25.700
makes the most sense
that's sort of what we've done
01:58:25.700 --> 01:58:28.560
in other wholesale markets
where you could we program
01:58:28.560 --> 01:58:32.483
basically all of the batteries
to dispatch a day ahead.
01:58:33.340 --> 01:58:37.250
If it needs to be closer to
those emergency response
01:58:37.250 --> 01:58:41.400
events then the compensation
would need to be more
01:58:41.400 --> 01:58:44.790
because it takes a lot
more response right now
01:58:44.790 --> 01:58:47.040
for the technology that we have today.
01:58:48.147 --> 01:58:49.320
But I did just,
01:58:49.320 --> 01:58:51.900
I wanted to mention that
ISO New England experience
01:58:51.900 --> 01:58:55.957
is because there's the
conversation about for 22,
01:58:55.957 --> 01:58:57.230
and how is that going to,
01:58:57.230 --> 01:59:02.230
or should apply and just
that there are mechanisms
01:59:02.340 --> 01:59:04.760
and that's already
happening in some RTOs
01:59:04.760 --> 01:59:09.393
is that there is the aggregation
of DG of distribution,
01:59:09.393 --> 01:59:12.500
a generation that can play
in the wholesale market.
01:59:12.500 --> 01:59:14.700
You can go to the final slide.
01:59:14.700 --> 01:59:17.450
I'm happy to open this
up for more questions too,
01:59:17.450 --> 01:59:19.460
but I just wanted to make sure,
01:59:19.460 --> 01:59:21.920
and this kind of gets
to your question share,
01:59:21.920 --> 01:59:23.160
what are all of the,
01:59:23.160 --> 01:59:25.690
what's the expectation of the customer?
01:59:25.690 --> 01:59:28.440
is that there always
has to be at the top line
01:59:28.440 --> 01:59:30.960
for the customer there
always to be the backup power.
01:59:30.960 --> 01:59:32.710
That's what people are calling for.
01:59:33.850 --> 01:59:36.490
I've seen just a tremendous shift
01:59:36.490 --> 01:59:39.350
in the past two years alone
01:59:39.350 --> 01:59:41.930
much less my many years working in solar
01:59:41.930 --> 01:59:43.950
of the number of folks who have called
01:59:43.950 --> 01:59:47.650
interested about solar 50 to 75%,
01:59:47.650 --> 01:59:50.310
want storage with it easily now
01:59:50.310 --> 01:59:52.000
compared to the past couple of years.
01:59:52.000 --> 01:59:53.420
And so now how do we,
01:59:53.420 --> 01:59:55.640
in addition to just
providing that backup power
01:59:55.640 --> 01:59:57.480
for the customer, what else can we do?
01:59:57.480 --> 01:59:59.800
So we've got a demand response bucket
01:59:59.800 --> 02:00:01.680
where you can aggregate DERs
02:00:01.680 --> 02:00:03.940
and that can be solar plus storage
02:00:03.940 --> 02:00:05.810
combined with that smart thermostat.
02:00:05.810 --> 02:00:07.000
How do you think about,
02:00:07.000 --> 02:00:08.923
as we start thinking about the home,
02:00:12.400 --> 02:00:14.520
that electrification of the home
02:00:15.546 --> 02:00:18.290
and what these gentlemen
will most likely talk about.
02:00:18.290 --> 02:00:19.270
So that's one bucket,
02:00:19.270 --> 02:00:21.670
and then we have the
energy market bucket.
02:00:21.670 --> 02:00:23.740
Whether or not there's a path there
02:00:23.740 --> 02:00:26.900
for behind the meter
distributed generation to play,
02:00:26.900 --> 02:00:29.370
but that can provide reliable generation
02:00:29.370 --> 02:00:31.710
affordable generation
into the energy market,
02:00:31.710 --> 02:00:33.480
but then also grid services
02:00:33.480 --> 02:00:36.900
and working with
the distribution utilities
02:00:36.900 --> 02:00:39.200
on how to tap into some
of those grid benefits,
02:00:39.200 --> 02:00:42.110
frequency, both bar even potential,
02:00:42.110 --> 02:00:44.890
even some of the
microgrids and backup power
02:00:44.890 --> 02:00:47.100
from levels that's where we've had
02:00:47.100 --> 02:00:50.010
some real great success with...
02:00:50.010 --> 02:00:52.960
bring your own device
type programs with utilities.
02:00:52.960 --> 02:00:55.670
So there's sort of that
partnership piece there as well.
02:00:55.670 --> 02:00:57.310
So that's how we think about it,
02:00:57.310 --> 02:00:58.960
if you think about the battery of
02:00:58.960 --> 02:01:01.690
all the different values it can bring.
02:01:01.690 --> 02:01:03.560
So certainly wanted to leave you
02:01:03.560 --> 02:01:06.750
that this isn't the only
pathway to consider,
02:01:06.750 --> 02:01:08.940
but having different
ways where the market
02:01:08.940 --> 02:01:12.193
can respond and
create that reliable grid.
02:01:14.470 --> 02:01:16.220
I guess Amy, I
have one question.
02:01:17.410 --> 02:01:19.470
So we've been exploring
02:01:19.470 --> 02:01:22.060
how to incent dispatchable
generation and in one hand,
02:01:22.060 --> 02:01:25.264
and then looking at the
supply side in the other.
02:01:25.264 --> 02:01:29.857
And on the dispatchable
generation investment side,
02:01:31.400 --> 02:01:33.420
we've often said in many workshops
02:01:33.420 --> 02:01:35.020
that it's just not the generation,
02:01:35.020 --> 02:01:36.500
it's also renewable generation,
02:01:36.500 --> 02:01:39.040
like solar that compare
with the storage.
02:01:39.040 --> 02:01:40.460
However, in the air hop market,
02:01:40.460 --> 02:01:43.010
we haven't seen a lot
of proliferation of solar
02:01:43.010 --> 02:01:46.020
and storage from a
utility scale perspective,
02:01:46.020 --> 02:01:51.020
but there's an economic
component to that aspect
02:01:51.040 --> 02:01:52.418
of solar development,
02:01:52.418 --> 02:01:55.420
but on the solar
distributed generation side,
02:01:55.420 --> 02:01:56.860
it sounds like your business model
02:01:56.860 --> 02:01:59.430
is definitely got a lot of subscription.
02:01:59.430 --> 02:02:02.030
What are the economic, what are the,
02:02:02.030 --> 02:02:03.920
is it just because the solar smaller,
02:02:03.920 --> 02:02:05.710
I mean, I'm sorry, well,
the solar is smaller,
02:02:05.710 --> 02:02:09.160
but also the storage
facilities are just smaller
02:02:09.160 --> 02:02:13.693
and it's just more economic
on the deep solar DG side?
02:02:15.190 --> 02:02:18.210
Why would people
make that (laughs)
02:02:18.210 --> 02:02:21.240
I mean, we, (laughing)
02:02:21.240 --> 02:02:22.073
Yes and no,
02:02:22.073 --> 02:02:24.310
I'm just kind of trying to
understand cause it seems like
02:02:25.350 --> 02:02:28.640
I mean it might be expensive
too on the solar DG side
02:02:29.680 --> 02:02:33.040
but it seems like
there's a lot more growth
02:02:33.040 --> 02:02:35.280
on the solar DG side
than the utility scale here
02:02:35.280 --> 02:02:37.360
and potentially here in Texas.
02:02:37.360 --> 02:02:39.250
Is that true?
02:02:39.250 --> 02:02:40.095
Yeah.
02:02:40.095 --> 02:02:44.420
When Lynn and Ed founded
the company back in 2007,
02:02:44.420 --> 02:02:47.350
the concept was two things,
02:02:47.350 --> 02:02:49.600
there are a lot of are rooftops, right?
02:02:49.600 --> 02:02:51.540
There's a lot of built environment,
02:02:51.540 --> 02:02:55.410
how can we use that
space for generation?
02:02:55.410 --> 02:02:59.500
And then that you can
use right where the load is.
02:02:59.500 --> 02:03:02.090
That's a very efficient concept.
02:03:02.090 --> 02:03:06.570
And then the second aspect
was families and homeowners
02:03:06.570 --> 02:03:08.866
and small businesses need the ability,
02:03:08.866 --> 02:03:11.260
what's the ability they have to control
02:03:11.260 --> 02:03:13.640
and manage their electricity though.
02:03:13.640 --> 02:03:15.840
And that's why I think in Texas,
02:03:15.840 --> 02:03:20.840
we have found a very a
more interested market
02:03:21.540 --> 02:03:25.620
because customers are
engaged in electricity choices,
02:03:25.620 --> 02:03:27.560
more so than any
other state that I cover.
02:03:27.560 --> 02:03:31.170
And I cover, and work a
lot of different types of states
02:03:31.170 --> 02:03:32.420
across the country,
02:03:32.420 --> 02:03:35.510
but the fact that there's
the experience of well,
02:03:35.510 --> 02:03:37.580
what type of REP is right for me,
02:03:37.580 --> 02:03:40.350
what is the electricity bill that fits
02:03:40.350 --> 02:03:41.300
the needs in my family?
02:03:41.300 --> 02:03:43.580
Is it that average bill?
02:03:43.580 --> 02:03:45.350
Do I wanna participate in a free nights
02:03:45.350 --> 02:03:46.400
and weekends program?
02:03:46.400 --> 02:03:47.290
What does that look like?
02:03:47.290 --> 02:03:52.080
We have a very very
educated customers in Texas.
02:03:52.080 --> 02:03:56.200
And so the notion of
creating my own generation,
02:03:56.200 --> 02:03:59.110
storing it and being
prepared and using that onsite
02:03:59.110 --> 02:04:01.220
is almost second
nature in my experience,
02:04:01.220 --> 02:04:04.900
as far as working with
customers here in Texas.
02:04:04.900 --> 02:04:07.820
And I think that's become
more of an interest of,
02:04:07.820 --> 02:04:10.360
okay, that does seem
to make natural sense.
02:04:10.360 --> 02:04:12.810
There's solar, I'm gonna
turn the light switch on
02:04:12.810 --> 02:04:14.660
that's where it's generated.
02:04:14.660 --> 02:04:17.160
But now the idea of
having that piece of mind
02:04:17.160 --> 02:04:19.850
of backup power really
has been front and center
02:04:19.850 --> 02:04:21.780
to most of our conversations.
02:04:21.780 --> 02:04:24.070
Have, have you seen
an increase in the interest
02:04:24.070 --> 02:04:27.790
in your solar battery package
since Winter Storm Uri?
02:04:27.790 --> 02:04:30.527
Yeah, considerably .
02:04:32.240 --> 02:04:34.940
In specific we don't usually talk about
02:04:34.940 --> 02:04:37.250
the state level of information,
02:04:37.250 --> 02:04:38.710
but yeah, like I said,
02:04:38.710 --> 02:04:42.863
easily 50 to 75% of our
systems that are being installed
02:04:42.863 --> 02:04:44.633
now are that customers are asking about
02:04:44.633 --> 02:04:49.620
have storage attached
where before maybe it was 15,
02:04:49.620 --> 02:04:52.020
maybe it was 20%.
02:04:52.020 --> 02:04:53.410
And that was Texas,
02:04:53.410 --> 02:04:55.610
even at that point
still leading the country
02:04:56.720 --> 02:05:00.080
in many other states, they
just haven't gotten there yet.
02:05:00.080 --> 02:05:03.940
They haven't had that acute experience.
02:05:03.940 --> 02:05:06.980
That's still in their minds,
so it's absolutely an interest.
02:05:06.980 --> 02:05:09.710
And I think we're not
the only solar company
02:05:09.710 --> 02:05:11.740
that's seeing that,
02:05:11.740 --> 02:05:14.970
I think probably if you
talk to Oncor and CPS,
02:05:14.970 --> 02:05:16.760
they probably have seen
lots of interconnection
02:05:16.760 --> 02:05:20.530
requests coming in for those
solar and storage systems.
02:05:20.530 --> 02:05:21.680
And so how,
02:05:21.680 --> 02:05:25.080
what are the programs then
to use all of that technology?
02:05:25.080 --> 02:05:27.680
Because there's a lot of
value there behind the meter
02:05:27.680 --> 02:05:30.410
and can we create a
demand response program
02:05:30.410 --> 02:05:34.300
or other programs that
can use that for neighbors
02:05:34.300 --> 02:05:35.923
fo the grid?
02:05:37.650 --> 02:05:42.650
Like our job is to move from
individual home peace of mind
02:05:42.800 --> 02:05:44.703
to utility-scale peace of mind.
02:05:46.210 --> 02:05:47.774
Thank you very much, Mrs. Hart.
02:05:47.774 --> 02:05:48.610
Absolutely, thank you.
02:05:48.610 --> 02:05:50.423
Next up, Octopus Energy.
02:05:52.290 --> 02:05:53.123
Hi everyone.
02:05:53.123 --> 02:05:55.560
My name is Michael Lee
representing Octopus Energy.
02:05:55.560 --> 02:05:58.420
I am the CEO of the US business.
02:05:58.420 --> 02:06:01.463
Thank you for having me
Commissioners and chairman.
02:06:02.890 --> 02:06:05.320
So I'm gonna start my
slides today kind of outlining
02:06:05.320 --> 02:06:08.040
who we are at Octopus
because that frames what we do.
02:06:08.040 --> 02:06:09.930
We've only been around for five years
02:06:09.930 --> 02:06:12.530
and in those short five years, globally,
02:06:12.530 --> 02:06:14.800
we've acquired over
two and a half million
02:06:14.800 --> 02:06:16.377
individual meter customers.
02:06:16.377 --> 02:06:19.160
And that's simply on two principles;
02:06:19.160 --> 02:06:22.400
one giving customers
an incredible experience
02:06:22.400 --> 02:06:26.460
that's extremely fair, and
two, as low price as possible.
02:06:26.460 --> 02:06:29.400
And I think both of those
elements tied very directly
02:06:29.400 --> 02:06:30.880
into demand response.
02:06:30.880 --> 02:06:33.250
And I think we have a huge opportunity
02:06:33.250 --> 02:06:36.790
to unlock massive amounts
of demand response
02:06:36.790 --> 02:06:41.063
here in Texas and in the
ERCOT market in general.
02:06:43.870 --> 02:06:44.703
Next slide.
02:06:48.020 --> 02:06:50.730
So just to kind of
keep it a little light,
02:06:50.730 --> 02:06:51.690
I know it's the afternoon,
02:06:51.690 --> 02:06:54.490
we've seen a lot of
different presentations.
02:06:54.490 --> 02:06:56.420
This kind of ties into the prior example
02:06:56.420 --> 02:06:59.010
by growing so quickly
by doing the right thing,
02:06:59.010 --> 02:07:01.300
we've been able to create
value, not just for our customers,
02:07:01.300 --> 02:07:02.990
but also for our shareholders.
02:07:02.990 --> 02:07:05.720
We think that these
things are highly aligned.
02:07:05.720 --> 02:07:06.553
We've gotten to
02:07:06.553 --> 02:07:10.020
a Unicorn status
multi-billion dollar company
02:07:10.020 --> 02:07:11.620
and just these handful of years.
02:07:13.890 --> 02:07:16.410
So I like to say that
we're a tech company
02:07:16.410 --> 02:07:18.330
that happens to do energy.
02:07:18.330 --> 02:07:19.163
At its core,
02:07:19.163 --> 02:07:20.800
we have a software
platform that we built
02:07:20.800 --> 02:07:22.520
internally called Kraken,
02:07:22.520 --> 02:07:25.663
that enables us to have a
50% lower cost of sale of service
02:07:25.663 --> 02:07:27.410
than our competitors.
02:07:27.410 --> 02:07:29.550
And that allows us to do
a lot of interesting things.
02:07:29.550 --> 02:07:33.280
So it's not just meter reading
and managing customers,
02:07:33.280 --> 02:07:35.950
but it's helping
integrate into vehicles,
02:07:35.950 --> 02:07:39.080
batteries, thermostats, you
name it, we can control it.
02:07:39.080 --> 02:07:42.281
And that is what we do every single day.
02:07:42.281 --> 02:07:43.560
We wake up doing this stuff.
02:07:43.560 --> 02:07:47.000
This is not a side team
that thinks about this.
02:07:47.000 --> 02:07:50.050
This is the very nature of what we do
02:07:50.050 --> 02:07:52.823
in our day-to-day jobs, next.
02:07:57.300 --> 02:07:58.510
So a couple of products,
02:07:58.510 --> 02:07:59.870
when we think about demand response,
02:07:59.870 --> 02:08:03.830
we think about two way
participation in the energy markets.
02:08:03.830 --> 02:08:07.020
And what we've designed
several years ago in the UK,
02:08:07.020 --> 02:08:10.240
is the world's first index based rate.
02:08:10.240 --> 02:08:11.840
I understand that with HB 16,
02:08:11.840 --> 02:08:13.520
that's no longer a
product that we offer here
02:08:13.520 --> 02:08:17.060
for the real-time product
but just kind of qualifying
02:08:17.060 --> 02:08:20.410
as far as what we can do
to link prices, to devices,
02:08:20.410 --> 02:08:22.060
to allow customers,
02:08:22.060 --> 02:08:24.930
to get the benefits
of really low prices,
02:08:24.930 --> 02:08:27.457
as well as shutting load
when the grid needs it.
02:08:27.457 --> 02:08:29.860
And I think these things
kind of come hand in hand
02:08:29.860 --> 02:08:31.080
and there's different ways
02:08:31.080 --> 02:08:33.730
that we can creatively
think about the Texas market
02:08:33.730 --> 02:08:35.330
as we kind of move forward.
02:08:35.330 --> 02:08:36.163
Next.
02:08:37.560 --> 02:08:39.050
We've done a couple of things as well
02:08:39.050 --> 02:08:40.930
with regards to balancing the grid.
02:08:40.930 --> 02:08:42.240
We've had some opportunities
02:08:42.240 --> 02:08:44.910
where we've seen a surplus
generation come online.
02:08:44.910 --> 02:08:47.960
And so demand response is
not just about shedding load
02:08:47.960 --> 02:08:50.430
when we see a critical time period,
02:08:50.430 --> 02:08:52.930
but it's actually about
moving that load to a time
02:08:52.930 --> 02:08:55.380
where we see excess supply on the grid.
02:08:55.380 --> 02:08:57.820
I think I like to talk a lot
about the hotel industry
02:08:57.820 --> 02:08:59.410
and the airline industry.
02:08:59.410 --> 02:09:01.890
These are fixed asset industries,
02:09:01.890 --> 02:09:04.270
and it's about creating
efficiency about how,
02:09:04.270 --> 02:09:06.150
and when you use the product
02:09:06.150 --> 02:09:07.730
and they've gotten
really good at doing that.
02:09:07.730 --> 02:09:10.120
I don't think we've
gotten as good as we can
02:09:10.120 --> 02:09:13.890
here in the electricity industry
to maximize the opportunity
02:09:13.890 --> 02:09:17.170
of this fixed asset called
the grid and generation
02:09:17.170 --> 02:09:19.330
that we have available to us.
02:09:19.330 --> 02:09:20.223
Next slide.
02:09:21.430 --> 02:09:23.694
So in this example,
what we call the big switch
02:09:23.694 --> 02:09:25.700
and there's a "New York
Times" article about it,
02:09:25.700 --> 02:09:28.400
we've been able to
incentivize our customers
02:09:28.400 --> 02:09:29.920
and it's not a large payment.
02:09:29.920 --> 02:09:33.210
I'm talking about just
maybe 5 cents, 10 cents,
02:09:33.210 --> 02:09:34.550
20 cents per kilowatt hour,
02:09:34.550 --> 02:09:36.820
that we've been able to pay customers.
02:09:36.820 --> 02:09:40.180
And we've been able to
move 75 megawatt hours.
02:09:40.180 --> 02:09:43.230
Sorry, I didn't mean
since fractions of a penny.
02:09:43.230 --> 02:09:44.387
So we can (all laughing).
02:09:47.849 --> 02:09:50.350
Fractions of a penny.
02:09:50.350 --> 02:09:53.710
We were able to move a
lot of generation demand.
02:09:53.710 --> 02:09:55.840
And this example,
02:09:55.840 --> 02:10:00.690
we've moved about 75 megawatt
hours with no investment,
02:10:00.690 --> 02:10:04.960
no cap ex no batteries,
no costs to bill payers,
02:10:04.960 --> 02:10:07.030
simply just informing them
when is the cheaper time
02:10:07.030 --> 02:10:08.990
for them to use energy and passing on
02:10:08.990 --> 02:10:12.183
that financial benefit to them,
even as modest as it was.
02:10:17.746 --> 02:10:20.050
I think the compound
that second piece I'll make,
02:10:20.050 --> 02:10:22.070
is that every single night, again,
02:10:22.070 --> 02:10:23.990
our core market right now is the UK.
02:10:23.990 --> 02:10:28.570
We are excited about
rapidly scaling here in Texas,
02:10:28.570 --> 02:10:30.840
but our core market in the UK,
02:10:30.840 --> 02:10:33.330
we engage in a demand
response every single day,
02:10:33.330 --> 02:10:34.700
we, every single night,
02:10:34.700 --> 02:10:39.330
we have an V tariff and we've
shift more megawatt hours,
02:10:39.330 --> 02:10:42.000
50%, more megawatt
hours, then the largest
02:10:42.000 --> 02:10:44.980
installed utility scale
battery and the grid.
02:10:44.980 --> 02:10:48.823
So we are actively able to move load.
02:10:49.820 --> 02:10:52.480
And as we electrify
transportation in the state,
02:10:52.480 --> 02:10:55.150
that's gonna be more
and more of a real concern.
02:10:55.150 --> 02:10:58.700
We're able to move load
in a very material way
02:10:58.700 --> 02:11:01.920
without a single cost
to us or to our customers
02:11:01.920 --> 02:11:03.620
or to the broader grid,
02:11:03.620 --> 02:11:06.010
but simply actually
saving everyone money
02:11:06.010 --> 02:11:07.460
because the less that they use
02:11:07.460 --> 02:11:08.940
during those on peak rates
02:11:09.851 --> 02:11:11.610
and the more that they
use during the off-peak rates,
02:11:11.610 --> 02:11:13.440
the cheaper it is for everyone else,
02:11:13.440 --> 02:11:15.930
even those who aren't participating.
02:11:15.930 --> 02:11:18.730
So we think about rates
in this new paradigm.
02:11:18.730 --> 02:11:21.110
So this blue line is the fixed
rate that everyone's used to,
02:11:21.110 --> 02:11:25.010
but it never accurately
reflects the grid conditions.
02:11:25.010 --> 02:11:27.540
And so time of use rates is a great way
02:11:27.540 --> 02:11:30.900
to start thinking about
getting customers
02:11:30.900 --> 02:11:32.300
the right kind of financial incentive
02:11:32.300 --> 02:11:33.940
to change their behavior.
02:11:33.940 --> 02:11:35.620
But what we're talking
about is that we're moving
02:11:35.620 --> 02:11:38.240
into a very unpredictable world,
02:11:38.240 --> 02:11:43.240
so agility and the
ability to be responsive
02:11:43.510 --> 02:11:44.730
generally in real time,
02:11:44.730 --> 02:11:47.510
or to other signals that allow customers
02:11:47.510 --> 02:11:50.640
to compliment the grid as the grid
02:11:50.640 --> 02:11:53.910
is going through unique
situations on a day-to-day basis.
02:11:53.910 --> 02:11:55.940
We're talking about
frameworks and technology
02:11:55.940 --> 02:12:00.220
that honestly have been
deployed in many other industries.
02:12:00.220 --> 02:12:01.990
We think about the
modern work environment.
02:12:01.990 --> 02:12:04.220
It's a very agile work environment.
02:12:04.220 --> 02:12:06.270
When we think about software and coding,
02:12:06.270 --> 02:12:08.360
it's a very agile work environment.
02:12:08.360 --> 02:12:10.750
We think that these types
of concepts can very easily
02:12:10.750 --> 02:12:14.450
be applied to the grid with
some small modifications,
02:12:14.450 --> 02:12:17.410
and I'll kind of get
into that future slides.
02:12:17.410 --> 02:12:18.980
Excellent.
02:12:18.980 --> 02:12:22.150
So one last point, you said
this may not apply to Texas,
02:12:22.150 --> 02:12:23.260
but about a year ago,
02:12:23.260 --> 02:12:27.190
we used to offer index
rate prices to customers.
02:12:27.190 --> 02:12:29.390
During the winter storm, we
kept our customer's exposures.
02:12:29.390 --> 02:12:31.430
We wanted to do the
right thing to customers.
02:12:31.430 --> 02:12:33.520
So we didn't give them
the full cost exposure.
02:12:33.520 --> 02:12:34.780
But in this example, you can see,
02:12:34.780 --> 02:12:37.780
this is a chart of a Texas customer
02:12:37.780 --> 02:12:41.710
responding in real time
to conditions on the grid
02:12:41.710 --> 02:12:43.110
in the middle of October.
02:12:43.110 --> 02:12:45.230
You wanna think that we
would have expensive prices
02:12:45.230 --> 02:12:47.730
in October, but because
of seasonal maintenance,
02:12:47.730 --> 02:12:50.610
we often do have tightness
in the shoulder months.
02:12:50.610 --> 02:12:54.170
And so having the ability to
shed load on a real-time basis,
02:12:54.170 --> 02:12:56.630
or at least in partnership
with the retailer,
02:12:56.630 --> 02:12:58.610
is what we envisioned
as a very important
02:12:58.610 --> 02:13:01.030
part of the future that
we have already created,
02:13:01.030 --> 02:13:02.830
and that we are accelerating it too.
02:13:05.440 --> 02:13:07.470
So I figured I'd kind
of spend my time today
02:13:07.470 --> 02:13:10.040
to kind of put you in
my shoes as a retailer,
02:13:10.040 --> 02:13:11.160
that's trying to do this.
02:13:11.160 --> 02:13:13.110
What do we think about how do we do it?
02:13:14.010 --> 02:13:15.930
So I like to think about demand response
02:13:15.930 --> 02:13:18.010
into two separate categories.
02:13:18.010 --> 02:13:20.700
One of them is economic self-interest.
02:13:20.700 --> 02:13:23.170
As a pure play retailer,
02:13:23.170 --> 02:13:26.300
I have a lot of
incentive to do this right.
02:13:26.300 --> 02:13:27.610
And because I'm well capitalized
02:13:27.610 --> 02:13:31.180
and have great technology
behind me, I can easily do it.
02:13:31.180 --> 02:13:35.670
I'd say again, as a CEO, if
I was a diversified retailer,
02:13:35.670 --> 02:13:38.800
I think it would be as in Jen Taylor,
02:13:38.800 --> 02:13:41.062
I think it would be complex
to think about the dynamics
02:13:41.062 --> 02:13:46.062
of my various P and L's
and how I wanna allocate
02:13:46.130 --> 02:13:47.850
profit across those P and L's.
02:13:47.850 --> 02:13:49.850
And I think demand response makes this
02:13:49.850 --> 02:13:52.200
a lot more complicated
in that situation.
02:13:52.200 --> 02:13:54.140
But as a pure play retailer,
02:13:54.140 --> 02:13:56.540
I have very clear financial incentives
02:13:56.540 --> 02:13:58.430
to do the right thing,
not just for myself,
02:13:58.430 --> 02:14:00.580
but more importantly to my customers.
02:14:00.580 --> 02:14:03.160
Because the lower the
prices that I can extract
02:14:03.160 --> 02:14:04.290
in the market,
02:14:04.290 --> 02:14:07.050
the lower the prices I
can offer my customers.
02:14:07.050 --> 02:14:09.560
And when I can do that, I
can win more in the market.
02:14:09.560 --> 02:14:12.060
So I look at demand
response is not just something
02:14:12.060 --> 02:14:13.150
that's good for me,
02:14:13.150 --> 02:14:14.830
it's also good for my customers
02:14:14.830 --> 02:14:16.810
and it enables me to grow as well.
02:14:16.810 --> 02:14:19.340
So again, I think of two
different demand responses.
02:14:19.340 --> 02:14:21.450
One of them is this
economic self-interest,
02:14:21.450 --> 02:14:24.970
this is purely voluntary,
is unpredictable,
02:14:24.970 --> 02:14:28.890
but prices ensure reliability.
02:14:28.890 --> 02:14:32.990
As high prices
come, that is my stick,
02:14:32.990 --> 02:14:35.513
or even carrot to go
do something different.
02:14:36.520 --> 02:14:38.980
Then I think of a second type
of bucket command and control.
02:14:38.980 --> 02:14:41.490
I heard a lot about
dispatchability, certainty,
02:14:41.490 --> 02:14:44.403
visibility in the comments
or the questions earlier today.
02:14:45.240 --> 02:14:47.780
Command and control is
the perfect execution for that.
02:14:47.780 --> 02:14:51.640
I think of that as a separate
type of demand response.
02:14:51.640 --> 02:14:53.770
And the way that I
kind of think of it is,
02:14:53.770 --> 02:14:56.230
if there is command and
control and certainty needed,
02:14:56.230 --> 02:14:59.490
then that means that there's
a penalty for non-performance.
02:14:59.490 --> 02:15:01.920
And if there's a penalty
for non-performance,
02:15:01.920 --> 02:15:04.350
then there probably should
be an extra financial incentive
02:15:04.350 --> 02:15:05.560
to perform.
02:15:05.560 --> 02:15:08.040
Because if I'm only
going to get hit one way
02:15:08.040 --> 02:15:10.200
for not performing and
I need to be rewarded
02:15:10.200 --> 02:15:12.910
to actually perform above and beyond
02:15:12.910 --> 02:15:14.160
my voluntary performance.
02:15:15.490 --> 02:15:16.430
And then secondly,
02:15:16.430 --> 02:15:19.140
I think that there's a lot of
opportunity to actually think
02:15:19.140 --> 02:15:21.940
it's great that it's by
zone have some matters
02:15:21.940 --> 02:15:23.310
for the nodal.
02:15:23.310 --> 02:15:26.040
But I need to know a
little bit ahead of time.
02:15:26.040 --> 02:15:27.470
The more that I get zip code,
02:15:27.470 --> 02:15:29.750
because my customers
are in the zip code basis,
02:15:29.750 --> 02:15:32.520
it's fine that we all
think about feeders.
02:15:32.520 --> 02:15:35.100
But the reality is that
when I go acquire customers
02:15:35.100 --> 02:15:36.060
is by zip code.
02:15:36.060 --> 02:15:39.680
So I need to kind of sort
my marketing activities
02:15:39.680 --> 02:15:41.130
by zip code.
02:15:41.130 --> 02:15:43.890
But the more forward
value certainty that I can get
02:15:43.890 --> 02:15:46.260
on those additional benefits,
02:15:46.260 --> 02:15:48.380
the more that I can
go aggressively market
02:15:48.380 --> 02:15:51.503
a much lower price to
those particular customers.
02:15:52.468 --> 02:15:54.570
So that type of
situation is very helpful
02:15:54.570 --> 02:15:56.313
when it comes to command and control.
02:15:58.290 --> 02:16:00.890
So before I kind of
get into the nitty-gritty
02:16:00.890 --> 02:16:02.480
of the things that make it difficult,
02:16:02.480 --> 02:16:04.150
I actually want to
start with the positives.
02:16:04.150 --> 02:16:07.370
This is the perfect market
for demand response.
02:16:07.370 --> 02:16:08.480
Energy only market.
02:16:08.480 --> 02:16:11.360
It makes it very clear
that demand response
02:16:11.360 --> 02:16:12.330
has a lot of value.
02:16:12.330 --> 02:16:14.880
There's no wasted money
in capacity payments.
02:16:14.880 --> 02:16:16.943
It's very clear what this looks like.
02:16:17.940 --> 02:16:21.500
I would say the fact that
we settled to our customers
02:16:21.500 --> 02:16:23.240
on actual load profiles and not
02:16:23.240 --> 02:16:25.880
a generic load profile
for a residential customer,
02:16:25.880 --> 02:16:28.583
gives me even more incentive
to go do demand response.
02:16:29.570 --> 02:16:32.060
The fact that here in Texas,
02:16:32.060 --> 02:16:35.370
energy is such a large proportion
02:16:35.370 --> 02:16:38.070
of the overall energy
consumer monthly spend
02:16:38.070 --> 02:16:42.980
for anything gives me a lot of
reason to help minimize that.
02:16:42.980 --> 02:16:45.740
And then finally controllable loads
02:16:45.740 --> 02:16:47.980
are more and more,
02:16:47.980 --> 02:16:52.980
a larger percentage of the
overall energy exposure.
02:16:53.510 --> 02:16:55.850
First with thermostats and even more so
02:16:55.850 --> 02:17:00.270
as we started electrifying
transportation, hot water,
02:17:00.270 --> 02:17:02.090
we are very excited about this future,
02:17:02.090 --> 02:17:05.170
and we are very excited
about having these assets
02:17:05.170 --> 02:17:07.360
be responding to
real-time grid conditions
02:17:07.360 --> 02:17:09.593
or committed controlled grid conditions.
02:17:10.670 --> 02:17:11.503
Next.
02:17:12.840 --> 02:17:15.470
So limitations in the status quo
02:17:15.470 --> 02:17:18.350
and before even getting,
while we are a tech company,
02:17:18.350 --> 02:17:20.290
before I even get to the tech side,
02:17:20.290 --> 02:17:22.670
I think we need to actually
talk about the cultural side.
02:17:22.670 --> 02:17:25.290
Because at the end of
the day demand response,
02:17:25.290 --> 02:17:26.870
the technology is easy.
02:17:26.870 --> 02:17:28.600
That's just ones and zeros.
02:17:28.600 --> 02:17:29.470
What we're really talking about
02:17:29.470 --> 02:17:31.860
is consumer behavior individuals.
02:17:31.860 --> 02:17:35.840
How do we reach out to people
and do something for them
02:17:35.840 --> 02:17:37.350
and not the other way around.
02:17:37.350 --> 02:17:40.420
We can't frame it as them
doing something for us.
02:17:40.420 --> 02:17:42.840
We need to do something for them.
02:17:42.840 --> 02:17:46.133
So the current business
model, unfortunately in retail,
02:17:47.530 --> 02:17:50.430
it's kind of be frank, it's
about forgetting the customer.
02:17:52.190 --> 02:17:54.360
There's a lot of incentive for customers
02:17:54.360 --> 02:17:56.190
do not know what they're paying.
02:17:56.190 --> 02:17:59.440
So that way they pay
very high variable rates.
02:17:59.440 --> 02:18:01.910
And that gross margin is very lucrative
02:18:01.910 --> 02:18:03.460
for the average retailer.
02:18:03.460 --> 02:18:05.730
Engaging the customer,
02:18:05.730 --> 02:18:08.430
which is a requirement
of demand response
02:18:08.430 --> 02:18:12.900
is antithetical to that
variable rate product.
02:18:12.900 --> 02:18:15.410
So what we're looking at is
02:18:15.410 --> 02:18:18.350
that demand response equals trust.
02:18:18.350 --> 02:18:21.280
If I'm gonna manage your asset for you,
02:18:21.280 --> 02:18:24.500
you have to trust me that
I'm doing it for your behalf
02:18:24.500 --> 02:18:26.950
not for my behalf.
02:18:26.950 --> 02:18:29.640
I think that unfortunately we've seen it
02:18:29.640 --> 02:18:32.400
with some of the tweets and say, June,
02:18:32.400 --> 02:18:34.670
a lot of people had their
thermostats changed.
02:18:34.670 --> 02:18:36.920
They're saying, "Where's
my compensation.
02:18:36.920 --> 02:18:38.080
Why is this happening?
02:18:38.080 --> 02:18:40.460
I don't really remember
this, and even if I did,
02:18:40.460 --> 02:18:43.320
where's my personal
benefit as a homeowner
02:18:43.320 --> 02:18:45.720
or as a renter or as to
some residential customer
02:18:45.720 --> 02:18:47.000
in this state?"
02:18:47.000 --> 02:18:49.940
So I think that we lose the link
02:18:49.940 --> 02:18:52.570
between doing something for ourselves
02:18:52.570 --> 02:18:54.570
versus doing something for the customer.
02:18:55.996 --> 02:18:59.420
And at the very least
engaging customers monthly,
02:18:59.420 --> 02:19:02.120
to just say, here's your current rate,
02:19:02.120 --> 02:19:04.520
will give a lot of
awareness in the market.
02:19:04.520 --> 02:19:06.430
And I think that awareness
is the first foundation
02:19:06.430 --> 02:19:08.130
to demand response.
02:19:08.130 --> 02:19:10.063
I like to think of it as this analogy.
02:19:11.030 --> 02:19:12.200
When you go to the coffee shops
02:19:12.200 --> 02:19:15.370
say you go to Starbucks
and you order a coffee,
02:19:15.370 --> 02:19:18.300
you don't get a formula on a website
02:19:18.300 --> 02:19:19.900
about how much the coffee is gonna cost,
02:19:19.900 --> 02:19:20.917
how much the milk is gonna cost
02:19:20.917 --> 02:19:23.220
and how much the
barista's time is gonna cost,
02:19:23.220 --> 02:19:26.520
and then get billed 15
or 30 days afterwards.
02:19:26.520 --> 02:19:28.910
You know before you drink the coffee,
02:19:28.910 --> 02:19:31.120
how much it's going to cost.
02:19:31.120 --> 02:19:34.270
That's not how our current
market is engaged or structured.
02:19:34.270 --> 02:19:36.440
So there's no way for customers to know
02:19:36.440 --> 02:19:39.640
that they actually got
the latte and not the drip.
02:19:39.640 --> 02:19:42.510
And demand response
is the way for them to
02:19:42.510 --> 02:19:44.510
move from the latte to the drip,
02:19:44.510 --> 02:19:47.290
save some money
because they did an action.
02:19:47.290 --> 02:19:48.850
But there's no way to do
that in this current market
02:19:48.850 --> 02:19:50.920
because people are
incentivized to not know.
02:19:50.920 --> 02:19:55.920
So just at the very least
engaging them on a monthly basis.
02:19:56.080 --> 02:19:58.990
And there's really no
excuse in the digital age
02:19:58.990 --> 02:20:01.410
for a retailer not to engage
their customer once a month
02:20:01.410 --> 02:20:02.650
what their rate is.
02:20:02.650 --> 02:20:06.250
That should be very easy, email, text.
02:20:06.250 --> 02:20:07.327
You could even snail mail it.
02:20:07.327 --> 02:20:09.610
But that is all low cost and easy,
02:20:09.610 --> 02:20:12.690
and that is the building
blocks of not just trust
02:20:12.690 --> 02:20:15.800
and awareness, but then
going to doing something
02:20:15.800 --> 02:20:17.473
even better with that customer.
02:20:18.640 --> 02:20:21.300
The second piece is that
again, we are humans.
02:20:21.300 --> 02:20:23.730
Feedback loops need to be really quick,
02:20:23.730 --> 02:20:26.470
unfortunately in the way
that the energy markets work,
02:20:26.470 --> 02:20:29.770
there's some friction
involved with doing an action
02:20:29.770 --> 02:20:30.980
and getting a quick response.
02:20:30.980 --> 02:20:31.813
I'll kind of go through
02:20:31.813 --> 02:20:36.610
a couple of opportunities for
us to move that feedback loop
02:20:36.610 --> 02:20:37.443
really tight.
02:20:37.443 --> 02:20:38.880
So that way, when there's a response,
02:20:38.880 --> 02:20:40.640
there's an immediate feedback
02:20:40.640 --> 02:20:42.890
and incentive given to that customer.
02:20:42.890 --> 02:20:44.313
And then finally,
02:20:45.150 --> 02:20:46.730
we have to also recognize the product
02:20:46.730 --> 02:20:48.963
that we sell is invisible, right?
02:20:50.440 --> 02:20:53.983
Many customers, sorry for
the bad pun, feel powerless.
02:20:55.220 --> 02:20:58.250
They feel like the bill is
the bill type of mindset.
02:20:58.250 --> 02:21:00.960
This is such a large expense
for the average person.
02:21:00.960 --> 02:21:03.960
And yet they feel very unempowered
02:21:03.960 --> 02:21:05.320
to make a big impact in it.
02:21:05.320 --> 02:21:08.240
Demand response is
a huge way to do that.
02:21:08.240 --> 02:21:11.890
But getting an opaque
bill there 15 or 30 days
02:21:11.890 --> 02:21:14.890
after you've done
something is not the style
02:21:14.890 --> 02:21:18.130
of encouraging real-time
participation, right?
02:21:18.130 --> 02:21:20.770
So I think there's partly
a business model issue,
02:21:20.770 --> 02:21:23.560
but I think that there's
also a lack of tech centricity
02:21:23.560 --> 02:21:26.640
that is now emerging in this market.
02:21:26.640 --> 02:21:27.473
Next slide.
02:21:28.900 --> 02:21:31.890
So I'm gonna get into
some nitty gritty stuff
02:21:31.890 --> 02:21:36.420
but it's all in the spirit of
where some of the friction is
02:21:36.420 --> 02:21:37.600
on the customer side.
02:21:37.600 --> 02:21:40.130
Because again, everything
I do when I wake up,
02:21:40.130 --> 02:21:42.090
is I think about how can I make this
02:21:42.090 --> 02:21:44.890
an incredible modern
experience for my customers?
02:21:44.890 --> 02:21:48.720
When you go to amazon.com
and you order something it's easy,
02:21:48.720 --> 02:21:50.870
why can't energy be like that?
02:21:50.870 --> 02:21:52.510
So when I think about this,
02:21:52.510 --> 02:21:55.960
and the things that we get
tripped up on the SMT side,
02:21:55.960 --> 02:21:57.280
I think can use a little improvement.
02:21:57.280 --> 02:21:59.430
I think it's a step in
the right direction.
02:22:01.468 --> 02:22:03.270
The two or three things
I'd like to highlight,
02:22:03.270 --> 02:22:06.240
one is that it can only get
two calls per meter per hour.
02:22:06.240 --> 02:22:07.690
A call is a start.
02:22:07.690 --> 02:22:08.930
And then the second one is a stock.
02:22:08.930 --> 02:22:10.963
That's a two calls for one measurement.
02:22:12.030 --> 02:22:15.340
What happens when
I use this is that if I try
02:22:15.340 --> 02:22:17.420
to take an action and I
want to call that meter
02:22:17.420 --> 02:22:20.863
to see if it actually
worked, and it didn't work,
02:22:21.790 --> 02:22:23.870
while I'm in the dark for the next hour.
02:22:23.870 --> 02:22:26.560
I can't try to recall that action again
02:22:26.560 --> 02:22:28.950
and see if it worked
a few minutes later.
02:22:28.950 --> 02:22:30.970
So I can do multiple calls a meter,
02:22:30.970 --> 02:22:32.970
I can do multiple verifications
02:22:32.970 --> 02:22:34.533
if that actual action worked.
02:22:35.530 --> 02:22:38.540
Limited to 3000 calls for TDU,
you can kind of do the math.
02:22:38.540 --> 02:22:41.390
And that means kind of
1500 customers at best
02:22:41.390 --> 02:22:44.260
in ideal Senate scenarios that I can do.
02:22:44.260 --> 02:22:49.040
So, truly improving the
API structure, modernizing it,
02:22:49.040 --> 02:22:50.320
making it highly usable,
02:22:50.320 --> 02:22:53.510
as well as increasing the
number of interactions and calls
02:22:53.510 --> 02:22:55.090
that I can have in real time.
02:22:55.090 --> 02:22:56.160
I think that would be amazing.
02:22:56.160 --> 02:22:57.953
And I think it's, the
structure is already there.
02:22:57.953 --> 02:23:01.500
It's just kind of increasing
these artificial limitations.
02:23:01.500 --> 02:23:03.470
I think there may even be an opportunity
02:23:03.470 --> 02:23:05.370
to kind of consolidate
those that are gone.
02:23:05.370 --> 02:23:08.340
It seems like a duplicative set of data
02:23:08.340 --> 02:23:12.320
that's above and beyond what
that same type of information
02:23:12.320 --> 02:23:14.020
that were caught using anyways.
02:23:14.020 --> 02:23:17.193
Let's just make it more
streamlined and simple.
02:23:18.070 --> 02:23:18.903
Next slide.
02:23:20.630 --> 02:23:22.670
So DER's, I love all the acronyms.
02:23:22.670 --> 02:23:24.463
I love the DER's the BPPS,
02:23:26.410 --> 02:23:28.400
we get really excited
about this teacher grid.
02:23:28.400 --> 02:23:30.400
We get really excited about enabling it.
02:23:35.926 --> 02:23:39.100
We are actively able to
manage a lot of these things.
02:23:39.100 --> 02:23:42.410
We do vehicle to grid
projects in other countries.
02:23:42.410 --> 02:23:44.740
We could do that today, here in Texas,
02:23:44.740 --> 02:23:47.510
it's not a regulatory issue.
02:23:47.510 --> 02:23:51.270
It's enabling more of
those vehicles on the grid
02:23:51.270 --> 02:23:52.920
type of issue and does
come in very quickly.
02:23:52.920 --> 02:23:54.120
As we heard from SunRun.
02:23:55.070 --> 02:23:57.380
We get very excited about all of this.
02:23:57.380 --> 02:23:59.720
I think the thing that we
would just like to highlight,
02:23:59.720 --> 02:24:02.240
and this is actually in spirit of
02:24:02.240 --> 02:24:03.943
broader market participation,
02:24:04.970 --> 02:24:08.543
is that we worry about walled gardens.
02:24:10.670 --> 02:24:14.630
We think that the best way
to maximize value of DERs
02:24:14.630 --> 02:24:17.740
on the grid is to have
competition for those assets.
02:24:17.740 --> 02:24:20.490
Meaning the customer owns them,
02:24:20.490 --> 02:24:23.370
and then various third
parties such as retailers,
02:24:23.370 --> 02:24:25.230
aggregators, whoever,
02:24:25.230 --> 02:24:28.070
they get to all compete to control them
02:24:28.070 --> 02:24:29.950
on behalf of the customer.
02:24:29.950 --> 02:24:34.830
And the more that that is
competed against the more
02:24:34.830 --> 02:24:38.570
that the value that customer
ultimately gets to the house.
02:24:38.570 --> 02:24:40.240
I worry about a world where
02:24:41.550 --> 02:24:44.000
only one person gets to control that.
02:24:44.000 --> 02:24:48.350
And you're kind of hoping
that there's beneficial control,
02:24:48.350 --> 02:24:50.640
there is a lot of incentive
for that to be controlled
02:24:50.640 --> 02:24:53.423
in the right way, but
with open standards,
02:24:54.330 --> 02:24:56.933
whether it's for
storage or other assets,
02:24:58.720 --> 02:25:00.960
chargers, thermostat, you name it,
02:25:00.960 --> 02:25:04.170
the more that there's
competition to control it,
02:25:04.170 --> 02:25:06.480
the more value that
individual customers get.
02:25:06.480 --> 02:25:09.170
And then the more that they
go talk about to other people
02:25:09.170 --> 02:25:12.280
about why it's a great
thing to own those assets.
02:25:12.280 --> 02:25:14.410
And the more that you
only enable one person
02:25:14.410 --> 02:25:16.460
or one entity to control it,
02:25:16.460 --> 02:25:19.680
the more opportunity
there is for capture of value
02:25:19.680 --> 02:25:22.050
to that entity and not the customer.
02:25:22.050 --> 02:25:23.710
And that will slow the growth
02:25:23.710 --> 02:25:28.000
of the broader participation
of these assets on the market.
02:25:31.480 --> 02:25:34.040
So we get really excited
about solar and storage too.
02:25:34.040 --> 02:25:36.760
We know that the traditional
retail business model is ours,
02:25:36.760 --> 02:25:39.210
is that the more mega megawatt hours
02:25:39.210 --> 02:25:41.320
we sell to our customers,
the more money we make.
02:25:41.320 --> 02:25:42.153
That's okay.
02:25:42.153 --> 02:25:44.210
We're actually really excited
about solar and storage,
02:25:44.210 --> 02:25:45.070
even though it conflicts
02:25:45.070 --> 02:25:48.010
with our traditional business model.
02:25:48.010 --> 02:25:50.330
However, there's a couple
pieces of friction in here
02:25:50.330 --> 02:25:51.510
that I just like to highlight
02:25:51.510 --> 02:25:54.850
from a consumer-user experience.
02:25:54.850 --> 02:25:57.630
So kind of step number
one is that they work
02:25:57.630 --> 02:26:00.290
with various solar companies
to get their assets up there.
02:26:00.290 --> 02:26:03.739
So their rooftop solar is on
their solar assets on the grid.
02:26:03.739 --> 02:26:07.293
We kind of have a multi-party
coordination problem.
02:26:08.170 --> 02:26:10.270
The solar provider will install it,
02:26:10.270 --> 02:26:13.700
they'll go call the utility to
try to get a Commissioned,
02:26:13.700 --> 02:26:17.100
TDU will come out three weeks
later or so to Commission it,
02:26:17.100 --> 02:26:19.340
we have no heads up
that that's happening.
02:26:19.340 --> 02:26:22.427
So the customer calls us and says,
02:26:22.427 --> 02:26:23.260
"Where's my solar?"
02:26:23.260 --> 02:26:24.290
How come it's not on my bill?"
02:26:24.290 --> 02:26:26.540
And I say, I don't know
what you're talking about.
02:26:26.540 --> 02:26:29.840
Besides the meter change out
that we get on the EDR stream,
02:26:29.840 --> 02:26:32.480
we actually don't have a
heads up earlier than that,
02:26:32.480 --> 02:26:34.180
that this could potentially change.
02:26:34.180 --> 02:26:37.650
It'd be great to hear that
one of our customers got
02:26:37.650 --> 02:26:39.680
solar installed and is
waiting for interconnection.
02:26:39.680 --> 02:26:41.370
'Cause then we can work
with them about designing
02:26:41.370 --> 02:26:42.780
a great plan for them
02:26:42.780 --> 02:26:44.330
so that way they're really happy,
02:26:44.330 --> 02:26:45.834
but we don't have that heads up.
02:26:45.834 --> 02:26:46.720
We don't have that visibility.
02:26:46.720 --> 02:26:48.010
I think the other thing that creates
02:26:48.010 --> 02:26:51.010
a lot of frustration for our customers
02:26:51.010 --> 02:26:55.260
is that this whole process
of updating new load profiles
02:26:55.260 --> 02:26:56.730
is very slow.
02:26:56.730 --> 02:27:00.450
So when they get a built few weeks later
02:27:00.450 --> 02:27:02.380
for somebody to come
out and Commission it,
02:27:02.380 --> 02:27:04.840
when that PTO is authorized,
02:27:04.840 --> 02:27:07.480
if that is the point that
starts the process for ERCOT
02:27:07.480 --> 02:27:09.540
to update a new load profile.
02:27:09.540 --> 02:27:12.060
And that can take anywhere
between one and three months
02:27:12.060 --> 02:27:15.060
what we've seen to actually
get that two-way channel
02:27:15.060 --> 02:27:17.820
to be registered as a retailer.
02:27:17.820 --> 02:27:18.653
You would say,
02:27:18.653 --> 02:27:20.530
Hey, three months, one month, whatever.
02:27:20.530 --> 02:27:21.890
Why is that such a big deal?
02:27:21.890 --> 02:27:24.830
The problem is that somebody
just spent $10,000 or more
02:27:24.830 --> 02:27:28.600
on an asset and all of a
sudden it doesn't work.
02:27:28.600 --> 02:27:29.480
What do you mean it doesn't work?
02:27:29.480 --> 02:27:31.510
Somebody just came
up to Commissioned it.
02:27:31.510 --> 02:27:34.510
I don't know, I can't see
it because it doesn't work.
02:27:34.510 --> 02:27:37.440
So that creates a lot
of friction in that case,
02:27:37.440 --> 02:27:40.800
because then they're not
gonna go tell a friend to go spend,
02:27:40.800 --> 02:27:43.150
I don't know, five, 10, $20,000 on solar
02:27:43.150 --> 02:27:46.420
or solar plus storage 'cause
it doesn't work right away.
02:27:46.420 --> 02:27:49.280
That feedback loop of
when they spent the money
02:27:49.280 --> 02:27:51.220
between the multiple
months of when they start
02:27:51.220 --> 02:27:53.840
getting the benefit
of it, it's too long.
02:27:53.840 --> 02:27:58.750
And I think that there's a way
that when the interconnection
02:27:58.750 --> 02:28:00.340
request is sent,
02:28:00.340 --> 02:28:02.180
we can start processing
that through archives
02:28:02.180 --> 02:28:03.370
almost immediately.
02:28:03.370 --> 02:28:05.220
We can say, Hey, this is coming.
02:28:05.220 --> 02:28:06.510
And in fact,
02:28:06.510 --> 02:28:09.520
I think one of the TDUs
actually does this by mistake
02:28:09.520 --> 02:28:12.340
in a way that's very
favorable for customers.
02:28:12.340 --> 02:28:13.830
And we've had actually,
02:28:13.830 --> 02:28:16.230
'cause I don't think they
realize that they're doing it
02:28:16.230 --> 02:28:17.980
out of sequence and that's the one place
02:28:17.980 --> 02:28:19.740
where customers love it.
02:28:19.740 --> 02:28:21.920
And then it wasn't
until we started asking
02:28:21.920 --> 02:28:22.753
about their process,
02:28:22.753 --> 02:28:25.300
that they actually changed
their process to the archives.
02:28:25.300 --> 02:28:27.580
So I think there's actually opportunity
02:28:27.580 --> 02:28:29.960
that's kind of low-hanging
fruit to improve
02:28:29.960 --> 02:28:32.350
end user customer experience.
02:28:37.440 --> 02:28:40.453
So this is my closing slide.
02:28:42.257 --> 02:28:44.410
You can read the words and that's fine.
02:28:44.410 --> 02:28:47.730
I think what's really important
here are a few things.
02:28:47.730 --> 02:28:51.770
I think that the role of the
retailer is the prime role
02:28:51.770 --> 02:28:53.780
to do demand response.
02:28:53.780 --> 02:28:56.940
I've heard some comments
earlier today about TDUs doing it.
02:28:56.940 --> 02:28:59.790
I think that actually creates a friction
02:28:59.790 --> 02:29:01.530
in a way that we saw in June
02:29:01.530 --> 02:29:04.310
where things happen for
reasons that are outside
02:29:04.310 --> 02:29:05.143
of the control,
02:29:05.143 --> 02:29:06.947
that natural relationship
between a customer
02:29:06.947 --> 02:29:08.310
and the retailer.
02:29:08.310 --> 02:29:10.220
And then when they call
us as a retailer, we said,
02:29:10.220 --> 02:29:11.890
we don't know, we're not part of this.
02:29:11.890 --> 02:29:13.390
And then they feel like we don't know
02:29:13.390 --> 02:29:14.610
what's happening on the electric grid
02:29:14.610 --> 02:29:17.040
because there's some
third-party doing something
02:29:17.040 --> 02:29:19.090
that we're not a part of and it's,
02:29:19.090 --> 02:29:20.990
they don't know that the average person
02:29:20.990 --> 02:29:23.682
doesn't know the difference
between a retailer and a TDU.
02:29:23.682 --> 02:29:24.800
They just want the
electricity turned off.
02:29:24.800 --> 02:29:26.470
They don't know why things are changing.
02:29:26.470 --> 02:29:29.230
So when things are
happening outside of our control,
02:29:29.230 --> 02:29:31.705
it really limits our
ability to talk to it.
02:29:31.705 --> 02:29:33.590
And really changes
that ability to manage
02:29:33.590 --> 02:29:35.620
that customer experience.
02:29:35.620 --> 02:29:36.850
And I think there's ways to have
02:29:36.850 --> 02:29:37.960
a great customer experience.
02:29:37.960 --> 02:29:40.910
And it's about communicating
often ahead of time,
02:29:40.910 --> 02:29:42.244
set expectations,
02:29:42.244 --> 02:29:44.590
deliver on what you just
said you were gonna do
02:29:44.590 --> 02:29:47.790
and give them real time
feedback and incentives
02:29:47.790 --> 02:29:49.160
as they went through that process.
02:29:49.160 --> 02:29:52.910
And I think we're
rapidly trying to do that
02:29:52.910 --> 02:29:53.930
with a lot of our customers.
02:29:53.930 --> 02:29:54.763
I think,
02:30:00.790 --> 02:30:02.370
we talk a lot about summer
02:30:03.550 --> 02:30:06.490
and I think we're really excited
about deploying heat pumps
02:30:06.490 --> 02:30:07.983
for the winter.
02:30:07.983 --> 02:30:10.640
And I think that this
becomes a very flexible load
02:30:10.640 --> 02:30:12.800
for the wintertime as well.
02:30:12.800 --> 02:30:16.410
Texas has a really great
market for electric base heat
02:30:16.410 --> 02:30:19.240
and heat pumps because
of the generally more
02:30:19.240 --> 02:30:20.360
moderate temperatures.
02:30:20.360 --> 02:30:22.350
So I think there's a lot of opportunity
02:30:22.350 --> 02:30:24.560
to like maximize the value of the grid
02:30:24.560 --> 02:30:27.760
through demand response,
through changing behaviors,
02:30:27.760 --> 02:30:29.890
through doing a lot of things
that are outside of the norm.
02:30:29.890 --> 02:30:34.590
But the reality is that
an attitude of let's just do
02:30:34.590 --> 02:30:38.650
something based on the
past and maybe tweak it,
02:30:38.650 --> 02:30:41.410
is going to get you
results a lot like the past.
02:30:41.410 --> 02:30:43.207
But thinking about a more modern grid
02:30:43.207 --> 02:30:46.537
and a more modern
interaction with customers
02:30:46.537 --> 02:30:50.520
and a more modern deployment of many,
02:30:50.520 --> 02:30:52.670
many fragmented resources,
02:30:52.670 --> 02:30:54.710
that's something that we specialize in.
02:30:54.710 --> 02:30:56.820
And that's something
that we kind of lock
02:30:56.820 --> 02:31:00.200
with technology and behavioral change.
02:31:00.200 --> 02:31:02.555
And that's ultimately
what we're here for.
02:31:02.555 --> 02:31:03.388
Thank you.
02:31:03.388 --> 02:31:04.358
Thank you very much.
02:31:04.358 --> 02:31:07.010
So it was a very thorough,
thorough presentation.
02:31:07.010 --> 02:31:10.253
And I think all of us up
here appreciate the fact
02:31:10.253 --> 02:31:13.150
that the competitive nature
of the Texas retail market
02:31:14.210 --> 02:31:15.380
is a bit of the customer,
02:31:15.380 --> 02:31:18.470
exactly because of the ability
of new companies like yours
02:31:18.470 --> 02:31:20.523
to come disrupt the space.
02:31:22.300 --> 02:31:23.133
We've got lots of questions,
02:31:23.133 --> 02:31:25.290
but I think we probably
want to keep moving.
02:31:26.210 --> 02:31:27.210
Thank you very much.
02:31:30.490 --> 02:31:31.323
All right.
02:31:32.900 --> 02:31:36.050
Everyone, Aaron
Berndt by way of introduction.
02:31:36.050 --> 02:31:38.870
And thanks Commissioners
for having us here today.
02:31:38.870 --> 02:31:40.380
By way of introduction is Aaron Berndt.
02:31:40.380 --> 02:31:43.493
I'm a Google's Energy
Energy Partnerships team.
02:31:44.665 --> 02:31:46.680
I've been with Nest for about six years.
02:31:46.680 --> 02:31:47.803
And before that,
02:31:48.920 --> 02:31:52.110
before that was with
Pacific Gas Electric
02:31:52.110 --> 02:31:54.310
all within our demand side
management programs as well.
02:31:54.310 --> 02:31:56.320
So been running energy efficiency
02:31:56.320 --> 02:31:59.143
and demand response
programs for quite a while.
02:32:00.250 --> 02:32:04.200
Our team focuses almost
exclusively on accelerating
02:32:04.200 --> 02:32:06.547
demand side management
programs for our energy efficiency
02:32:06.547 --> 02:32:09.540
and demand response
partnerships all across the country.
02:32:09.540 --> 02:32:12.370
We have currently over 70 different
02:32:12.370 --> 02:32:15.320
residential demand response
programs that we're supporting.
02:32:16.240 --> 02:32:18.170
And we do that through partners.
02:32:18.170 --> 02:32:23.170
So aggregators, et cetera,
to support utility programs,
02:32:23.700 --> 02:32:25.423
third-party programs, et cetera.
02:32:27.220 --> 02:32:30.890
We think there is a
ton of potential in Texas
02:32:30.890 --> 02:32:33.640
for demand response right now,
02:32:33.640 --> 02:32:34.790
we don't have perfect numbers,
02:32:34.790 --> 02:32:39.640
but for smart thermostat
penetration across all brands,
02:32:39.640 --> 02:32:43.830
it's somewhere a little
north of a million thermostats,
02:32:43.830 --> 02:32:46.270
smart thermostats in Texas.
02:32:46.270 --> 02:32:51.270
But with eight and a half
million central ACs in Texas,
02:32:51.300 --> 02:32:53.130
there should be significantly more
02:32:54.250 --> 02:32:58.390
of the smart thermostats
that are in market right now
02:32:58.390 --> 02:33:02.790
where there's sub 10% participation
02:33:02.790 --> 02:33:04.340
in demand response programs right now.
02:33:04.340 --> 02:33:07.700
So we see a huge upside Commissioner,
02:33:07.700 --> 02:33:09.550
like you said earlier in the day,
02:33:09.550 --> 02:33:13.260
it's all about AC, AC, AC.
02:33:13.260 --> 02:33:17.800
Texas should be the
Superbowl of demand response,
02:33:17.800 --> 02:33:18.990
but it's not.
02:33:18.990 --> 02:33:21.130
Outside of some of the
great programs that we have
02:33:21.130 --> 02:33:23.960
with CPS energy and Austin Energy,
02:33:23.960 --> 02:33:26.320
We really don't see a lot of residential
02:33:26.320 --> 02:33:28.560
smart thermostat participation
in the REP programs.
02:33:28.560 --> 02:33:33.010
So even in the prior panel
came to the conclusion
02:33:33.010 --> 02:33:37.330
that there are no blockers
for demand response.
02:33:37.330 --> 02:33:40.480
What I would push back
on that is there doesn't seem
02:33:40.480 --> 02:33:43.540
to be enough incentives to really unlock
02:33:43.540 --> 02:33:45.470
the benefits in the economics.
02:33:45.470 --> 02:33:47.746
I appreciate everything
that Michael just reiterated
02:33:47.746 --> 02:33:50.660
and we would love more
of those types of partners.
02:33:50.660 --> 02:33:54.730
That's not the current
status of what's in market.
02:33:54.730 --> 02:33:58.310
Multiple parties are reiterated
that there's something
02:33:58.310 --> 02:34:02.330
like 2% of REP customers
are in demand response
02:34:02.330 --> 02:34:03.330
programs right now.
02:34:03.330 --> 02:34:06.480
So there's a lot of room to grow.
02:34:06.480 --> 02:34:07.313
Next slide
02:34:08.930 --> 02:34:11.040
So I thought I would start
with some of the basics
02:34:11.040 --> 02:34:12.210
of residential demand response.
02:34:12.210 --> 02:34:13.540
Some of this we've already heard today,
02:34:13.540 --> 02:34:15.590
so you can either ask
questions everyday.
02:34:16.550 --> 02:34:19.010
But we launched Rochelle rewards,
02:34:19.010 --> 02:34:21.810
which is effectively a
metaphor for demand response
02:34:21.810 --> 02:34:23.180
in 2013.
02:34:23.180 --> 02:34:26.233
One of our earliest
partners was Austin Energy.
02:34:27.260 --> 02:34:28.890
One of our longest standing partners,
02:34:28.890 --> 02:34:31.483
and then closely after
that with CPS Energy.
02:34:33.910 --> 02:34:38.910
Similar to Michael
focusing on making energy
02:34:39.170 --> 02:34:41.000
easy for customers,
02:34:41.000 --> 02:34:44.850
we've always focused
on having really great,
02:34:44.850 --> 02:34:48.473
simple customer engagement
through all of our products.
02:34:49.350 --> 02:34:51.240
And particularly with Rochelle Rewards
02:34:51.240 --> 02:34:54.583
to make demand response
easy for customers.
02:34:58.510 --> 02:35:00.120
The key thing that we do there
02:35:00.120 --> 02:35:03.640
is we balance the
potential load reduction
02:35:03.640 --> 02:35:05.980
with customer satisfaction.
02:35:05.980 --> 02:35:08.970
So it could just mean that
we crank the thermostat
02:35:08.970 --> 02:35:10.860
and the customer's upset.
02:35:10.860 --> 02:35:13.230
But that also means that
they wouldn't be in the program
02:35:13.230 --> 02:35:14.100
for a very long time.
02:35:14.100 --> 02:35:17.260
So we do have custom
algorithms for each home.
02:35:17.260 --> 02:35:20.660
And as Kim has mentioned
several times during the day,
02:35:20.660 --> 02:35:24.873
customers do always remain
in control of their thermostats.
02:35:26.120 --> 02:35:28.080
What you're looking
at on the bottom there
02:35:28.080 --> 02:35:30.970
is representative of a typical event.
02:35:30.970 --> 02:35:35.120
So most events are our
partners will run pre-cooling
02:35:35.120 --> 02:35:35.953
out of the event,
02:35:35.953 --> 02:35:40.040
so they they'll run the air
conditioner for an hour or so,
02:35:40.040 --> 02:35:41.570
make the home a little bit cooler.
02:35:41.570 --> 02:35:42.850
And then during the event,
02:35:42.850 --> 02:35:46.480
it'll offset something
like three to four degrees,
02:35:46.480 --> 02:35:48.500
depending on the home a little bit,
02:35:48.500 --> 02:35:51.830
that'll shift 55% of that
air conditioning load.
02:35:51.830 --> 02:35:54.840
And that's why we see so much
potential in the Texas market
02:35:54.840 --> 02:35:57.552
is if we had eight and
a half million customers
02:35:57.552 --> 02:36:00.100
that realize that's
the technical potential
02:36:00.100 --> 02:36:01.890
that would be a massive amount of load
02:36:01.890 --> 02:36:05.290
that the Commission
or caught in the market
02:36:05.290 --> 02:36:09.030
could be providing on four dispatchable,
02:36:09.030 --> 02:36:12.393
reliable reliability
standards effectively.
02:36:13.920 --> 02:36:18.160
The bottom stat on there came
from CenterPoint's comments
02:36:18.160 --> 02:36:22.420
where they are seeing
1.2, five KW per household.
02:36:22.420 --> 02:36:26.620
That's pretty similar to what
we see across the country.
02:36:26.620 --> 02:36:30.343
We generally see roughly
about a KW per thermostat.
02:36:31.220 --> 02:36:32.950
The other thing to keep in mind
02:36:32.950 --> 02:36:37.760
is that smart thermostats
drive both energy efficiency
02:36:37.760 --> 02:36:38.930
and demand response.
02:36:38.930 --> 02:36:43.140
So I mentioned that we
support both EMDR programs.
02:36:43.140 --> 02:36:45.590
Many programs are just
energy, for instance ,the only,
02:36:45.590 --> 02:36:50.590
but we're seeing
significant traction, if you will,
02:36:50.770 --> 02:36:52.900
upside potential with
our utility partners
02:36:52.900 --> 02:36:55.430
is when they're stacking
the energy efficiency,
02:36:55.430 --> 02:36:57.900
incentives and benefits
with also with demand
02:36:57.900 --> 02:36:59.000
response enrollment,
02:36:59.000 --> 02:37:00.830
where they're effectively
being able to get
02:37:00.830 --> 02:37:02.690
a no cost thermostat for the customer,
02:37:02.690 --> 02:37:05.233
as long as they're
enrolling in those programs.
02:37:06.990 --> 02:37:09.700
Another line of questions
that have come up
02:37:09.700 --> 02:37:11.740
a couple of times today was,
02:37:11.740 --> 02:37:15.907
is it how reliable is
his demand response?
02:37:15.907 --> 02:37:18.920
And do customers participate in events
02:37:18.920 --> 02:37:21.030
when it's 100 degrees.
02:37:21.030 --> 02:37:22.853
And the short answer is, they do.
02:37:23.810 --> 02:37:25.280
CPS mentioned it.
02:37:25.280 --> 02:37:28.120
So we, and they actually
have data that shows
02:37:28.120 --> 02:37:31.350
that customers participate
on 100 degree days,
02:37:31.350 --> 02:37:32.677
105 degree days.
02:37:32.677 --> 02:37:35.473
And we also have partners like APS
02:37:35.473 --> 02:37:37.790
a solar project in Phoenix.
02:37:37.790 --> 02:37:39.210
Texas is hot.
02:37:39.210 --> 02:37:40.860
Phoenix is very hot
02:37:40.860 --> 02:37:43.980
and customers continually
participate in those programs
02:37:43.980 --> 02:37:47.310
because we're doing
it in a way that is okay
02:37:47.310 --> 02:37:48.143
with the customers.
02:37:48.143 --> 02:37:50.730
We're balancing that customer experience
02:37:50.730 --> 02:37:54.490
with the demand response experience,
02:37:54.490 --> 02:37:57.580
as well as paying them
incentives to stay in the program.
02:37:57.580 --> 02:38:01.090
So it really is those two
things that customers
02:38:01.090 --> 02:38:03.480
are able to are since they are partners,
02:38:03.480 --> 02:38:06.550
that utilities are able to
rely on that dispatchability
02:38:06.550 --> 02:38:07.930
and load reduction.
02:38:07.930 --> 02:38:10.420
And particularly in Arizona,
02:38:10.420 --> 02:38:14.990
they are hit significantly
throughout their programs
02:38:14.990 --> 02:38:17.820
over the last 18 months.
02:38:17.820 --> 02:38:20.140
We've had a long
standing program with them,
02:38:20.140 --> 02:38:24.910
but with some of the new
clean energy standards
02:38:24.910 --> 02:38:28.230
that they put in place on
wanting to ramp up renewables
02:38:28.230 --> 02:38:31.290
in their portfolio, they put
a big stake in the ground of,
02:38:31.290 --> 02:38:34.980
we want as much demand
response as we can possibly enroll.
02:38:34.980 --> 02:38:39.210
So we are doing everything
that we can alongside APS
02:38:39.210 --> 02:38:41.760
to get as many of their customers
02:38:41.760 --> 02:38:44.240
in their demand response
program as possible.
02:38:44.240 --> 02:38:46.117
And what we're interested in
doing is what could we be doing
02:38:46.117 --> 02:38:50.240
in the Texas market to set
up that those same incentives
02:38:50.240 --> 02:38:53.400
for partners to want to
be going as big as they can
02:38:53.400 --> 02:38:54.720
in the demand response market.
02:38:54.720 --> 02:38:55.553
Right now, that's just,
02:38:55.553 --> 02:38:58.353
isn't happening outside
of the big programs.
02:38:59.740 --> 02:39:00.583
Next slide.
02:39:04.027 --> 02:39:08.040
So the customer
experience itself first of all,
02:39:08.040 --> 02:39:10.160
just so that it's perfectly clear,
02:39:10.160 --> 02:39:12.163
all of our programs are opt in.
02:39:13.580 --> 02:39:15.700
None of our demand response programs
02:39:15.700 --> 02:39:17.400
are just happen on their own.
02:39:17.400 --> 02:39:19.150
So customers are making the decision
02:39:19.150 --> 02:39:21.590
to go to an enrollment page.
02:39:21.590 --> 02:39:23.840
It's pretty similar like
what you see up here,
02:39:23.840 --> 02:39:25.530
there's typically a landing page
02:39:26.390 --> 02:39:28.340
either on the web or mobile
02:39:28.340 --> 02:39:29.530
where they learn about the program
02:39:29.530 --> 02:39:32.360
and learn about the
incentives also agreed to
02:39:33.430 --> 02:39:35.450
the customers terms and agreements.
02:39:35.450 --> 02:39:38.050
And that's important
because there's a fair amount
02:39:38.050 --> 02:39:41.260
of data sharing going on between us,
02:39:41.260 --> 02:39:42.810
the aggregator partners,
02:39:42.810 --> 02:39:44.780
and the program
evaluators that are actually
02:39:44.780 --> 02:39:48.233
doing all the evaluation of
the load reductions, et cetera.
02:39:50.420 --> 02:39:53.340
The part of the reason
that customers enroll
02:39:53.340 --> 02:39:55.250
in these programs, as we've mentioned,
02:39:55.250 --> 02:39:58.393
are for the incentives
so they can be steep.
02:39:59.690 --> 02:40:02.070
Think CPS's program right now is $115.
02:40:03.930 --> 02:40:07.820
But they'll also ratchet
that up from time to time
02:40:07.820 --> 02:40:10.380
during the year end to boost incentive.
02:40:10.380 --> 02:40:12.113
So it could be a $150.
02:40:13.360 --> 02:40:14.193
Over this year,
02:40:14.193 --> 02:40:17.670
we've had 30 plus
programs where customers
02:40:17.670 --> 02:40:20.080
can get free thermostats
from the utilities
02:40:20.080 --> 02:40:22.460
as long as they weren't
enrolling in programs.
02:40:22.460 --> 02:40:24.830
So the value is definitely there.
02:40:24.830 --> 02:40:28.410
The market for smart thermostat adoption
02:40:28.410 --> 02:40:33.210
and for demand response
adoption is still relatively low.
02:40:33.210 --> 02:40:35.290
Back when I started with the company,
02:40:35.290 --> 02:40:39.310
I was signing thousand unit pilots
02:40:40.200 --> 02:40:42.680
that we are well beyond that stage.
02:40:42.680 --> 02:40:46.630
All the tools are there for the market
02:40:46.630 --> 02:40:50.380
to really start accelerating
these benefits in market.
02:40:50.380 --> 02:40:54.750
They've had multiple years of practice
02:40:54.750 --> 02:40:57.870
learning techniques to
figure out how do they work?
02:40:57.870 --> 02:41:00.720
What do we need to make
happen to really accelerate them?
02:41:02.100 --> 02:41:02.933
On the bottom here,
02:41:02.933 --> 02:41:06.750
what you're looking at
is a utility marketplace.
02:41:06.750 --> 02:41:10.780
It's effectively a white
labeled e-commerce website
02:41:10.780 --> 02:41:12.203
that utilities host.
02:41:13.220 --> 02:41:18.100
And this is how many of our
partners are actually enabling,
02:41:18.100 --> 02:41:20.480
sign up and get a free
thermostat from partners
02:41:20.480 --> 02:41:22.460
in the way that they
do that for customer.
02:41:22.460 --> 02:41:24.640
If they don't have a
smart thermostat already,
02:41:24.640 --> 02:41:28.073
as you go to ABS's website, log in,
02:41:28.930 --> 02:41:30.750
get all the incentives upfront,
02:41:30.750 --> 02:41:34.260
and then we ship out a
thermostat that's already enrolled
02:41:34.260 --> 02:41:35.130
in the program.
02:41:35.130 --> 02:41:37.610
They still agree to the same terms
02:41:37.610 --> 02:41:38.920
and conditions regardless.
02:41:38.920 --> 02:41:41.220
So they still know that
they're getting into it,
02:41:41.220 --> 02:41:43.140
but it's the number one way
02:41:43.140 --> 02:41:45.730
that all of our utility partners are
02:41:45.730 --> 02:41:47.150
dramatically accelerating
02:41:47.150 --> 02:41:48.600
their programs significantly.
02:41:51.530 --> 02:41:54.740
During an event itself, we
also have Customer UX as well.
02:41:54.740 --> 02:41:57.810
And that's what you see
on the right-hand side.
02:41:57.810 --> 02:42:00.900
So you'll see it on the device itself,
02:42:00.900 --> 02:42:02.163
not the head unit.
02:42:03.730 --> 02:42:05.770
It'll display information like that.
02:42:05.770 --> 02:42:07.250
If you just walk past the thermostat,
02:42:07.250 --> 02:42:09.630
you'll see that little gold gear,
02:42:09.630 --> 02:42:13.130
that little gold gear means
we're doing something.
02:42:13.130 --> 02:42:15.370
So something is going
on in you can click in
02:42:15.370 --> 02:42:16.360
and learn more about that.
02:42:16.360 --> 02:42:20.900
But we also send
notifications in their app.
02:42:20.900 --> 02:42:23.900
And most of all of our other partners,
02:42:23.900 --> 02:42:25.310
whether it's utilities or not
02:42:25.310 --> 02:42:27.750
also send their own
communications to customers as well,
02:42:27.750 --> 02:42:31.523
so that they know what's
happening during those events.
02:42:33.440 --> 02:42:38.237
We see very high customer
satisfaction with our programs.
02:42:38.237 --> 02:42:40.643
And that's something that
we're really proud about.
02:42:41.500 --> 02:42:44.897
We do regular net promoter
scores for our programs,
02:42:44.897 --> 02:42:47.250
and those are consistently very high.
02:42:47.250 --> 02:42:48.950
And when you think about it,
02:42:48.950 --> 02:42:51.230
that shouldn't really make sense
02:42:51.230 --> 02:42:55.460
from just the fact of it's
hot out and work turning up
02:42:55.460 --> 02:42:58.930
your air conditioner, but
customers do love these programs.
02:42:58.930 --> 02:43:03.300
It provides them a way to
give back to their community,
02:43:03.300 --> 02:43:07.390
help with climate change
and earn money in rewards.
02:43:07.390 --> 02:43:10.490
So that's the kind of the key thesis
02:43:10.490 --> 02:43:15.180
that really makes them make
these programs accelerate.
02:43:15.180 --> 02:43:16.890
The other key question,
02:43:16.890 --> 02:43:20.960
I get quite a bit from regulators,
02:43:20.960 --> 02:43:24.720
reporters, et cetera,
how reliable is it?
02:43:24.720 --> 02:43:28.070
And do customers get fatigued on events?
02:43:28.070 --> 02:43:32.830
And the short answer is
no, as long as it's automated,
02:43:32.830 --> 02:43:35.330
simple and easy in
your, and you're paying,
02:43:35.330 --> 02:43:36.700
customers or boards.
02:43:36.700 --> 02:43:39.650
If it's a pain in the ass
and it's complicated
02:43:39.650 --> 02:43:42.270
and they're hot, no, it's not.
02:43:42.270 --> 02:43:47.270
So a lot of the call to the
call the conserve programs,
02:43:47.720 --> 02:43:51.970
whether it's ERCOT or
California with their programs,
02:43:51.970 --> 02:43:55.560
those don't work
customers don't like those.
02:43:55.560 --> 02:43:58.060
But when they enrolled in programs
02:43:58.060 --> 02:44:00.740
where they're getting
paid, it's set it and forget it.
02:44:00.740 --> 02:44:01.670
They don't have to worry about it.
02:44:01.670 --> 02:44:03.350
It's just happening in the background.
02:44:03.350 --> 02:44:06.380
We see really high
customer satisfaction.
02:44:06.380 --> 02:44:09.000
Short duration, that's
kind of key to that, too, right?
02:44:09.000 --> 02:44:10.463
So that temperature really,
02:44:10.463 --> 02:44:13.730
they're not feeling the
fraud border will go up
02:44:13.730 --> 02:44:16.993
and that sustained-
Yes.
02:44:17.950 --> 02:44:21.990
The highest impact that
we see are shorter events,
02:44:21.990 --> 02:44:24.863
whether that's an hour or less.
02:44:26.330 --> 02:44:29.050
Many of our partners
will run for our events.
02:44:29.050 --> 02:44:31.930
And similar to the chart
that Reliant showed you,
02:44:31.930 --> 02:44:34.883
you will see some step
off towards that end.
02:44:35.970 --> 02:44:37.450
If you ran an eight hour event,
02:44:37.450 --> 02:44:41.520
I would not expect our eight
to perform as well as our one.
02:44:41.520 --> 02:44:45.927
But very similar to what
Rick from CPS energy said is,
02:44:45.927 --> 02:44:48.990
and I hear the same thing from every one
02:44:48.990 --> 02:44:52.640
of our other utility partners
is we've run so many events.
02:44:52.640 --> 02:44:55.130
We have such a big
portfolio of customers.
02:44:55.130 --> 02:44:58.220
We know what to expect
when we hit that button.
02:44:58.220 --> 02:45:00.273
So that's one of the key
things that I wanna make sure
02:45:00.273 --> 02:45:01.830
that the Commission is aware of.
02:45:01.830 --> 02:45:04.657
It is reliable, it's dispatchable,
02:45:04.657 --> 02:45:07.570
and you need to run events
to know what's gonna happen
02:45:07.570 --> 02:45:08.640
on the other side.
02:45:08.640 --> 02:45:11.460
But once you're running events,
02:45:11.460 --> 02:45:14.110
all of our partners know what to expect,
02:45:14.110 --> 02:45:15.210
and they either,
02:45:15.210 --> 02:45:18.160
they're either bidding
in a portion of that load,
02:45:18.160 --> 02:45:20.930
or they just know what to
expect when they hit the button.
02:45:20.930 --> 02:45:22.950
To be clear on two things,
02:45:22.950 --> 02:45:25.900
the averages are reliable 100%.
02:45:25.900 --> 02:45:27.470
But there's still averages
02:45:27.470 --> 02:45:29.570
with a discount
factor of total installed.
02:45:30.502 --> 02:45:31.335
And more importantly,
02:45:31.335 --> 02:45:33.150
I want to make sure to
clarify that this Commission
02:45:33.150 --> 02:45:36.383
does not think of demand
response as boiling frogs.
02:45:36.383 --> 02:45:39.100
(laughing)
02:45:39.100 --> 02:45:40.713
I didn't say that.
02:45:40.713 --> 02:45:42.963
(laughing)
02:45:43.853 --> 02:45:45.293
I don't know
if she wrote it down.
02:45:46.930 --> 02:45:48.330
Clarify it,
02:45:48.330 --> 02:45:52.930
not how we consider (indistinct)
customers in such trouble.
02:45:52.930 --> 02:45:53.763
Next slide.
02:45:53.763 --> 02:45:54.800
Yeah, thank you.
02:45:54.800 --> 02:45:58.280
So some recommendations
from us and we started
02:45:58.280 --> 02:46:03.160
out today wanting to
highlight actionable change
02:46:03.160 --> 02:46:04.657
that could be impacted now.
02:46:04.657 --> 02:46:06.610
And that the first bullet point
02:46:07.800 --> 02:46:11.950
is what I would consider
the clearest action
02:46:11.950 --> 02:46:14.450
will change it's in your jurisdiction
02:46:14.450 --> 02:46:18.900
is one increase the cost
cap in value paid per KW
02:46:18.900 --> 02:46:22.610
in the TDU program in the
same with the ERS program.
02:46:22.610 --> 02:46:24.840
Increase the cap, but also importantly,
02:46:24.840 --> 02:46:28.750
also increasing the ERS
payment to be more in line
02:46:28.750 --> 02:46:30.540
with the value delivered.
02:46:30.540 --> 02:46:32.343
Right now, the ERS payment.
02:46:33.821 --> 02:46:35.460
And I'll just clarify it.
02:46:35.460 --> 02:46:38.590
Google does not participate
directly in our cuts market.
02:46:38.590 --> 02:46:41.090
So I'm not 100% experts on all this.
02:46:41.090 --> 02:46:43.323
I've learned this through our partners.
02:46:44.720 --> 02:46:48.230
But on average ERS will pay
02:46:48.230 --> 02:46:50.340
for like a 30 megawatt portfolio,
02:46:50.340 --> 02:46:55.340
something like $13
per KW for the summer.
02:46:56.170 --> 02:46:59.670
So for that partner, it'd be $360,000.
02:46:59.670 --> 02:47:01.350
That's not zero,
02:47:01.350 --> 02:47:05.130
but typically when events are called,
02:47:05.130 --> 02:47:06.870
prices are also usually high.
02:47:06.870 --> 02:47:08.300
If in that say,
02:47:08.300 --> 02:47:11.473
if it was a two hour
event and we're at $9,000,
02:47:13.080 --> 02:47:16.160
that's $220,000 for two hours
02:47:16.160 --> 02:47:18.750
compared to 360 for the entire summer.
02:47:18.750 --> 02:47:21.590
So what we consistently
hear from our partners
02:47:21.590 --> 02:47:24.680
is there just isn't
enough juice to squeeze
02:47:24.680 --> 02:47:28.650
in the Texas market to
make it profitable enough
02:47:28.650 --> 02:47:31.700
so that they can also provide decent
02:47:31.700 --> 02:47:34.960
enough customer incentives
to get the customer traction
02:47:34.960 --> 02:47:36.210
that we need in market.
02:47:36.210 --> 02:47:38.450
So in terms of actionable change,
02:47:38.450 --> 02:47:40.940
that first one I would
say is the most important
02:47:40.940 --> 02:47:43.400
for the Commission to be exploring.
02:47:43.400 --> 02:47:45.780
And is this by
nature of cause you're right,
02:47:45.780 --> 02:47:48.640
it was in several comments,
02:47:48.640 --> 02:47:51.150
is this by nature of the
saturation of the amount
02:47:51.150 --> 02:47:53.773
of bids that drives down that value?
02:47:54.620 --> 02:47:55.850
That's a great question
02:47:55.850 --> 02:48:00.470
that I do not have
an answer for (laughs)
02:48:00.470 --> 02:48:02.950
But that is something
that should be explored
02:48:02.950 --> 02:48:04.853
to really understand that dynamic.
02:48:08.540 --> 02:48:12.660
The second bullet point that I have here
02:48:12.660 --> 02:48:17.660
of recommending that the
Commission set a DR goal
02:48:17.990 --> 02:48:20.940
is something that we've
consistently found time
02:48:20.940 --> 02:48:24.010
and time again, has
worked for all of our partners
02:48:24.010 --> 02:48:27.510
that want to aggressively
grow their portfolios.
02:48:27.510 --> 02:48:29.603
They put an aggressive goal out there.
02:48:30.982 --> 02:48:32.770
I'm not an expert
enough if that should be
02:48:32.770 --> 02:48:36.450
a goal on the TDU programs,
ERS programs, REP programs,
02:48:36.450 --> 02:48:40.510
et cetera, but we should
be setting a goal out there
02:48:40.510 --> 02:48:43.840
and then figuring out the
right mechanisms to hit that
02:48:44.760 --> 02:48:47.633
and really putting, putting
programs in place to do that.
02:48:49.870 --> 02:48:52.020
The last bullet point,
02:48:52.020 --> 02:48:56.610
I do firmly believe that
the demand response
02:48:57.600 --> 02:49:00.160
has a ton of potential in Texas.
02:49:00.160 --> 02:49:02.750
I can also, through this discussion,
02:49:02.750 --> 02:49:04.080
know that there's a lot of questions
02:49:04.080 --> 02:49:05.990
on what that potential actually is.
02:49:05.990 --> 02:49:09.570
So I think that there should
be a demand response
02:49:09.570 --> 02:49:11.343
potential study completed.
02:49:12.420 --> 02:49:17.420
I also added with the
exploration of creating additional,
02:49:17.620 --> 02:49:20.180
an reliability ancillary services,
02:49:20.180 --> 02:49:22.860
specifically focused on demand response.
02:49:22.860 --> 02:49:25.700
If we're not getting
exactly what we need
02:49:25.700 --> 02:49:28.210
through the ERS in TDU programs,
02:49:28.210 --> 02:49:30.690
let's design a new ancillary service
02:49:30.690 --> 02:49:33.030
that does drive the reliability
02:49:34.030 --> 02:49:36.210
benefits that the
Commission is looking for.
02:49:36.210 --> 02:49:37.090
I put that at last,
02:49:37.090 --> 02:49:40.760
cause I realize that might
not be a short term thing.
02:49:40.760 --> 02:49:42.060
Action items, number one.
02:49:42.060 --> 02:49:44.540
But I do think there should
be some longer term studies
02:49:44.540 --> 02:49:46.630
to really figure out
what could be doing.
02:49:46.630 --> 02:49:48.390
'Cause there is a ton of potential
02:49:48.390 --> 02:49:51.883
and we are barely scratching
the surface right now.
02:49:53.870 --> 02:49:54.703
All right.
02:49:55.677 --> 02:49:56.718
Thank you, Mr Berndt.
02:49:56.718 --> 02:49:59.097
Thank you.
Appreciate it.
02:49:59.097 --> 02:50:01.573
And to bring us home, Silver Stain.
02:50:04.380 --> 02:50:06.503
Hello, thank you for having me.
02:50:07.360 --> 02:50:12.360
So I'm an independent consultant.
02:50:13.000 --> 02:50:15.170
My comments today are as an individual.
02:50:15.170 --> 02:50:16.700
I'm not gonna make or lose any money
02:50:16.700 --> 02:50:19.640
depending on how y'all
decide these policy calls.
02:50:19.640 --> 02:50:22.080
So I'm speaking solely
for my position as a citizen
02:50:22.080 --> 02:50:24.660
with decades of working on these issues
02:50:24.660 --> 02:50:27.110
to support reliable grids
in the public interest.
02:50:29.210 --> 02:50:30.210
And so what I'm gonna,
02:50:30.210 --> 02:50:33.650
I was thinking about what
is it that the last speaker
02:50:33.650 --> 02:50:36.100
after for really long day can say
02:50:36.100 --> 02:50:37.720
that hasn't been said before?
02:50:37.720 --> 02:50:41.410
And I decided that maybe
the value I could offer
02:50:41.410 --> 02:50:43.890
was kind of a summary and a cheat sheet
02:50:43.890 --> 02:50:46.830
to wrap up everything that we've heard.
02:50:46.830 --> 02:50:50.740
And so I was looking over
through all the 40 plus comments
02:50:50.740 --> 02:50:55.500
that we received and my
first summary look kind of
02:50:55.500 --> 02:50:57.163
like the next slide please.
02:50:58.540 --> 02:51:02.840
And I want to tell Canon
and the folks who are with him,
02:51:02.840 --> 02:51:06.460
how much I appreciate
getting me to bingo on
02:51:06.460 --> 02:51:08.160
by 1130 this morning.
02:51:08.160 --> 02:51:08.993
Thank you.
02:51:10.086 --> 02:51:13.280
But Amy and Enchanted Rock,
02:51:13.280 --> 02:51:15.717
I'm really disappointing
you didn't give me (indistinct).
02:51:18.480 --> 02:51:20.420
Let's try harder next time.
02:51:20.420 --> 02:51:21.840
There are a few other partials in it
02:51:21.840 --> 02:51:23.840
for if you don't know
what Sneakernet is,
02:51:23.840 --> 02:51:25.100
'cause y'all are new to that.
02:51:25.100 --> 02:51:28.480
That is when an aggregator
calls up a commercial
02:51:28.480 --> 02:51:31.250
or industrial customer
that is not yet automated.
02:51:31.250 --> 02:51:34.190
And so they send someone around some
02:51:35.110 --> 02:51:38.240
plea working around,
running around the factory,
02:51:38.240 --> 02:51:39.740
turning things down.
02:51:39.740 --> 02:51:41.340
And that's what Sneakernet is
02:51:41.340 --> 02:51:43.780
for old fashioned DR Providers.
02:51:43.780 --> 02:51:47.260
So a lot of
02:51:47.260 --> 02:51:49.380
what we heard today in
some of the earlier stuff
02:51:49.380 --> 02:51:50.831
and a lot of the comments
02:51:50.831 --> 02:51:55.010
are a lot of acronyms
and not a lot of content.
02:51:55.010 --> 02:52:00.010
So I though I would back up
and give you some summary.
02:52:00.960 --> 02:52:02.373
Next slide, please.
02:52:03.610 --> 02:52:07.520
The first two things that you
should take away from this,
02:52:07.520 --> 02:52:10.100
I think are that demand responds
02:52:10.100 --> 02:52:13.100
and energy efficiency
deliver a ton of benefits.
02:52:13.100 --> 02:52:14.290
I'm not gonna read them all,
02:52:14.290 --> 02:52:15.990
that's the point of a cheat sheet.
02:52:19.169 --> 02:52:21.370
And then the second thing is that,
02:52:22.370 --> 02:52:25.470
demand response and demand flexibility,
02:52:25.470 --> 02:52:28.630
there are a zillion
ways you can use this.
02:52:28.630 --> 02:52:32.693
But your rules and are
written around mostly T shade,
02:52:33.650 --> 02:52:35.120
huge problem.
02:52:35.120 --> 02:52:37.560
You could be using as
many of the speakers
02:52:37.560 --> 02:52:40.360
have talked to you
about low shifting a variety
02:52:40.360 --> 02:52:41.810
of ways for that,
02:52:41.810 --> 02:52:44.430
bill and portfolio
management for the customer,
02:52:44.430 --> 02:52:47.110
as well as for the REP and the queasy
02:52:47.110 --> 02:52:50.410
to present a better
portfolio to the market
02:52:50.410 --> 02:52:52.083
and hedge prices.
02:52:52.922 --> 02:52:55.430
There are about a million
different ancillary services
02:52:55.430 --> 02:52:58.390
and reliability services
that could be provided
02:52:58.390 --> 02:53:01.750
and improvements using this.
02:53:01.750 --> 02:53:05.210
The thing that I want to highlight here
02:53:05.210 --> 02:53:07.830
is we've heard about demand response
02:53:07.830 --> 02:53:09.520
and energy efficiency potential.
02:53:09.520 --> 02:53:11.530
The first thing I wanna say is,
02:53:11.530 --> 02:53:15.030
yes, this is the demand
response work session,
02:53:15.030 --> 02:53:17.960
but what several of the
comments have told you,
02:53:17.960 --> 02:53:21.270
and what I need to repeat
is that energy efficiency
02:53:21.270 --> 02:53:23.850
and demand response are complimentary.
02:53:23.850 --> 02:53:25.720
The more energy efficiency you have,
02:53:25.720 --> 02:53:28.010
the better demand response performs.
02:53:28.010 --> 02:53:33.010
And frankly, there is so
much energy in Texas,
02:53:33.970 --> 02:53:37.460
that you could do energy
efficiency all day long
02:53:37.460 --> 02:53:38.293
for decades,
02:53:38.293 --> 02:53:41.760
and you will not destroy the
potential of demand response
02:53:41.760 --> 02:53:44.160
to help the market work
better and to help keep
02:53:44.160 --> 02:53:45.970
the grid reliable.
02:53:45.970 --> 02:53:50.970
So two things on energy
efficiency actual potential.
02:53:53.080 --> 02:53:55.820
Energy efficiency used to be designed
02:53:55.820 --> 02:53:57.500
and is still often assumed
02:53:57.500 --> 02:54:00.260
to be about saving kilowatt hours.
02:54:00.260 --> 02:54:02.170
It is entirely possible to target
02:54:02.170 --> 02:54:04.550
energy efficiency
specifically for winter
02:54:04.550 --> 02:54:07.980
and summer demand
reduction peak reduction.
02:54:07.980 --> 02:54:11.157
And we know that 40%
of ERCOT winter load
02:54:11.157 --> 02:54:16.157
and 50% of summer load
are specifically weather driven
02:54:16.640 --> 02:54:19.180
so that there is a massive opportunity
02:54:19.180 --> 02:54:22.410
to use both targeted
efficiency and demand response
02:54:22.410 --> 02:54:23.740
to fix that.
02:54:23.740 --> 02:54:26.130
One of the demand
response providers I talked to
02:54:26.130 --> 02:54:29.097
told me that at least
15% of industrial load
02:54:29.097 --> 02:54:30.690
and ERCOT is moveable.
02:54:30.690 --> 02:54:32.113
That's 10 gig right there.
02:54:33.360 --> 02:54:36.140
The American Council for
an Energy Efficient Economy
02:54:36.140 --> 02:54:39.310
of which I'm on the
board is doing a study
02:54:39.310 --> 02:54:41.040
of the impact of,
02:54:41.040 --> 02:54:43.250
potential impact of energy efficiency
02:54:43.250 --> 02:54:45.920
and demand response
measures targeted at winter
02:54:45.920 --> 02:54:48.910
and summer peak reduction
over the next five years.
02:54:48.910 --> 02:54:49.743
In other words,
02:54:49.743 --> 02:54:53.440
what can we get fast if
we wanted to max out,
02:54:53.440 --> 02:54:57.860
do a lot of high scalable
efficiency and demand response.
02:54:57.860 --> 02:55:00.700
A preliminary estimate
is that we can get
02:55:00.700 --> 02:55:04.970
well over 10,000 megawatts
02:55:04.970 --> 02:55:07.270
of winter peak load reduction
02:55:07.270 --> 02:55:12.160
and another 10 gig of
summer peak load reduction.
02:55:12.160 --> 02:55:14.123
And that's only five years.
02:55:15.120 --> 02:55:16.900
A limited number of measures.
02:55:16.900 --> 02:55:20.420
And that's only from
residential customers.
02:55:20.420 --> 02:55:22.460
That report will be out next month.
02:55:22.460 --> 02:55:27.020
It is not the thorough
kind of detailed technical
02:55:27.020 --> 02:55:31.270
and economic potential
study that many of these folks
02:55:31.270 --> 02:55:32.610
are advocating you to perform in
02:55:32.610 --> 02:55:35.150
an I too advocate that you perform.
02:55:35.150 --> 02:55:36.790
It should give you some reassurance
02:55:36.790 --> 02:55:39.120
that there is some
massive potential out there
02:55:39.120 --> 02:55:40.520
and you should not waste it.
02:55:42.250 --> 02:55:44.640
And by the way, all of
this is at an average cost
02:55:44.640 --> 02:55:46.860
of about 2 cents per kilowatt hour,
02:55:46.860 --> 02:55:50.790
which ignores does not include
all of the additional savings
02:55:50.790 --> 02:55:52.730
that you realize from not having to buy
02:55:52.730 --> 02:55:55.200
in an incremental to 18% over that,
02:55:55.200 --> 02:55:59.810
but for additional
generation for line losses
02:55:59.810 --> 02:56:03.420
and reserve margin, nor
do you have to pay for fuel.
02:56:03.420 --> 02:56:05.820
And you're also saving on customer bills
02:56:05.820 --> 02:56:10.820
and health and pollution and
significantly improving equity.
02:56:10.890 --> 02:56:12.693
So that's about potential.
02:56:13.642 --> 02:56:15.740
And you can also
use it for geo targeting.
02:56:15.740 --> 02:56:17.390
So a lot of the concerns that you have
02:56:17.390 --> 02:56:19.570
about the lower Rio
Grande Valley, for instance,
02:56:19.570 --> 02:56:21.100
and those transmission constraints
02:56:21.100 --> 02:56:23.630
and the equity issues
associated with that,
02:56:23.630 --> 02:56:26.390
could be addressed
in ameliorated in part
02:56:26.390 --> 02:56:28.560
by efficiency and demand response.
02:56:28.560 --> 02:56:30.300
You will still need to
build trans transmission
02:56:30.300 --> 02:56:31.810
there sooner later,
02:56:31.810 --> 02:56:34.570
but at least you can make
the situation significantly
02:56:34.570 --> 02:56:36.920
better and less painful in the interim
02:56:36.920 --> 02:56:38.390
before all those lines get built
02:56:38.390 --> 02:56:40.640
or all that generation shows up.
02:56:40.640 --> 02:56:41.847
Next slide please.
02:56:43.750 --> 02:56:47.320
So the other thing you've
heard pieces about today
02:56:47.320 --> 02:56:50.213
from different people is
how to structure demand
02:56:50.213 --> 02:56:51.550
risk products,
02:56:51.550 --> 02:56:54.490
and whether they're control
or pull or dispatchable.
02:56:54.490 --> 02:56:58.250
So think of this slide as
some of the design parameters
02:56:58.250 --> 02:57:01.280
or the knobs that you can
turn and mix and match
02:57:02.560 --> 02:57:06.020
to design products that
suit your reliability needs
02:57:06.020 --> 02:57:09.280
and, or your customer
and technology capabilities.
02:57:09.280 --> 02:57:14.280
Some of these elements and
iterations include time options,
02:57:14.640 --> 02:57:15.730
like when to use it.
02:57:15.730 --> 02:57:18.610
One of the things that I
put in here that's misleading
02:57:18.610 --> 02:57:20.120
is I wrote event lead time.
02:57:20.120 --> 02:57:23.490
But what I really meant was
more like speed of low drop,
02:57:23.490 --> 02:57:25.950
which is a compliment
to the amount of advance
02:57:25.950 --> 02:57:27.380
notice that you need.
02:57:27.380 --> 02:57:30.160
Like, do you get a
day ahead warning that,
02:57:30.160 --> 02:57:33.380
I hear to a day at five that
I need to drop tomorrow
02:57:33.380 --> 02:57:34.280
at five.
02:57:34.280 --> 02:57:36.620
So lead time versus speed of response
02:57:36.620 --> 02:57:38.150
are two different factors.
02:57:38.150 --> 02:57:40.120
A ton of management options.
02:57:40.120 --> 02:57:42.030
You've heard about price responsive,
02:57:42.030 --> 02:57:43.360
aggregating, and automated,
02:57:43.360 --> 02:57:47.180
like smart thermostats
direct load control used to be
02:57:47.180 --> 02:57:48.180
the fabulous thing.
02:57:48.180 --> 02:57:50.560
And it's still used for
stuff like pull pumps,
02:57:50.560 --> 02:57:54.420
but much in Texas anymore
because most of the equipment
02:57:54.420 --> 02:57:59.420
broke and we have moved
beyond pagers in doing dispatch.
02:58:00.160 --> 02:58:02.630
And you know about the
effectiveness of automated
02:58:02.630 --> 02:58:05.370
relay operation for
under frequency relay.
02:58:05.370 --> 02:58:07.673
Although again, Canon,
I bought was hoping,
02:58:07.673 --> 02:58:10.445
I had money on you
saying frequency response.
02:58:10.445 --> 02:58:12.475
(finger snapping)
02:58:12.475 --> 02:58:15.537
(laughing)
02:58:15.537 --> 02:58:17.930
You've heard about a variety sources
02:58:17.930 --> 02:58:20.080
of where do you get the load shift
02:58:20.080 --> 02:58:22.010
or the load reduction from,
02:58:22.010 --> 02:58:24.860
you have heard about who
gets to be in charge of the use.
02:58:26.280 --> 02:58:27.910
And you've heard about different issues
02:58:27.910 --> 02:58:29.740
associated with compensation.
02:58:29.740 --> 02:58:32.830
The thing that I didn't put
on here is when it gets used,
02:58:32.830 --> 02:58:34.820
and that includes examples like peak,
02:58:34.820 --> 02:58:37.750
net load peak,
or for valley filling
02:58:39.395 --> 02:58:42.740
or for doing fixing the solar ramp down,
02:58:42.740 --> 02:58:44.210
filling in behind that.
02:58:44.210 --> 02:58:45.423
Next slide, please.
02:58:46.670 --> 02:58:48.764
This is my summary of barriers.
02:58:48.764 --> 02:58:53.740
It doesn't include most
of well, 99% of deep,
02:58:53.740 --> 02:58:56.590
the kind of fabulous detail
that we got from Michael Lee.
02:58:57.540 --> 02:58:58.752
But in my view,
02:58:58.752 --> 02:59:02.790
the barriers around this
are an over narrow view
02:59:02.790 --> 02:59:04.890
of what the purpose
of demand response is.
02:59:05.930 --> 02:59:08.150
Because the capabilities
of demand response
02:59:08.150 --> 02:59:10.680
and efficiency have
changed so massively,
02:59:10.680 --> 02:59:15.260
our views of how to use it
should be equally expansive.
02:59:15.260 --> 02:59:17.960
Barriers around compensation
and cost restrictions.
02:59:17.960 --> 02:59:20.170
You've heard a ton of detail about.
02:59:20.170 --> 02:59:22.100
Some of the most frustrating barriers
02:59:22.100 --> 02:59:24.630
are about restrictions on participation,
02:59:24.630 --> 02:59:26.120
what customers can do it,
02:59:26.120 --> 02:59:31.120
what kinds of who's allowed
to offer demand response,
02:59:31.200 --> 02:59:34.360
who's allowed to be in what
product, et cetera, et cetera.
02:59:34.360 --> 02:59:36.740
The TDU efficiency goals are way too low
02:59:36.740 --> 02:59:40.800
down and of itself is a
participation restriction.
02:59:40.800 --> 02:59:44.490
And the last set of restrictions
are arise from technology.
02:59:44.490 --> 02:59:46.530
And you heard examples about metering
02:59:46.530 --> 02:59:48.870
and about customer access to data
02:59:48.870 --> 02:59:51.510
and aggregator access to data.
02:59:51.510 --> 02:59:54.680
I want to offer a couple of observations
02:59:54.680 --> 02:59:57.540
that are sufficiently tacky,
that I didn't write them down.
02:59:57.540 --> 02:59:58.960
So instead I'm going to say them
02:59:58.960 --> 03:00:01.243
in front of an archive livestream.
03:00:02.240 --> 03:00:04.760
The first is that most of these barriers
03:00:04.760 --> 03:00:08.040
reflect historical outdated assumptions
03:00:08.040 --> 03:00:11.960
about what demand response
in DR are capable of doing
03:00:11.960 --> 03:00:15.230
or what TDU and ERCOT
are capable of doing.
03:00:15.230 --> 03:00:18.070
You guys have computers,
you have the cloud,
03:00:18.070 --> 03:00:21.520
there is no excuse for there
being a limit on 3000 calls
03:00:21.520 --> 03:00:23.700
to a TDU per per month.
03:00:23.700 --> 03:00:24.793
That's insane.
03:00:25.890 --> 03:00:28.700
The second is that
most of these barriers
03:00:28.700 --> 03:00:32.210
have been into rules
at the PUC and ERCOT,
03:00:32.210 --> 03:00:36.940
and a lot of those have been
initiated and or promulgated
03:00:36.940 --> 03:00:41.190
and or enforced through slogging
03:00:41.190 --> 03:00:44.370
through the ERCOT stakeholder
and governance process,
03:00:44.370 --> 03:00:47.430
that essentially is dominated
by TDUs and generators
03:00:47.430 --> 03:00:49.510
and large industrial
customers who are profiting
03:00:49.510 --> 03:00:52.830
from the current system
of high prices and scarcity
03:00:54.000 --> 03:00:56.430
and high throughput of energy.
03:00:56.430 --> 03:00:59.747
And if you do things like
allow more demand response
03:00:59.747 --> 03:01:01.070
and energy efficiency,
03:01:01.070 --> 03:01:03.800
you're gonna take
away some of their bread.
03:01:03.800 --> 03:01:05.340
That doesn't mean...
03:01:06.830 --> 03:01:09.350
so they have been
very effective at freezing
03:01:09.350 --> 03:01:13.740
out a lot of changes in
rules that do not protect
03:01:13.740 --> 03:01:16.030
their price spikes and their throughput.
03:01:16.030 --> 03:01:18.810
You have the capability to change that.
03:01:18.810 --> 03:01:20.970
What we have done in
archive is we have created
03:01:20.970 --> 03:01:23.260
a wonderfully effective
market for competition
03:01:23.260 --> 03:01:24.580
between suppliers.
03:01:24.580 --> 03:01:27.470
We have ignored the fact
that the most effective markets
03:01:27.470 --> 03:01:31.770
require competition
between consumers suppliers.
03:01:31.770 --> 03:01:36.430
So this is your chance
to recreate that market.
03:01:36.430 --> 03:01:37.450
By the way,
03:01:37.450 --> 03:01:40.060
anytime someone complains
about price formation,
03:01:40.060 --> 03:01:42.230
what they're really
complaining about is that the fact
03:01:42.230 --> 03:01:44.700
that the price formation
that is working,
03:01:44.700 --> 03:01:48.230
isn't giving them high
enough prices for their taste,
03:01:48.230 --> 03:01:51.203
but consumers are an
important part of price formation.
03:01:52.300 --> 03:01:53.263
Next, please.
03:01:56.740 --> 03:02:00.340
This is a summary of the
most common demand response
03:02:00.340 --> 03:02:04.460
and demand flexibility recommendations.
03:02:04.460 --> 03:02:07.820
Because it's my slides,
03:02:07.820 --> 03:02:10.100
these are the recommendations
that are both common
03:02:10.100 --> 03:02:11.530
that I agree with,
03:02:11.530 --> 03:02:13.791
and that I think are
sound public policy.
03:02:13.791 --> 03:02:15.600
(laughing)
03:02:15.600 --> 03:02:20.130
So it excludes the ones that
I think are not a good idea.
03:02:20.130 --> 03:02:23.310
These are big picture and
they are not super detailed
03:02:23.310 --> 03:02:27.130
and the way that many of the
other speaker have phrased them
03:02:27.130 --> 03:02:31.163
has been much more
detailed and or elegant.
03:02:32.030 --> 03:02:33.750
So this is just sort of,
03:02:33.750 --> 03:02:35.130
I'm not gonna read most of them
03:02:35.130 --> 03:02:39.140
because you already
have heard the mag nausea
03:02:39.140 --> 03:02:40.090
and you're welcome.
03:02:46.421 --> 03:02:48.860
The only one I wanna
touch on briefly is number six,
03:02:48.860 --> 03:02:51.890
rethink resource
adequacy meaning in math,
03:02:51.890 --> 03:02:54.040
nobody's really talked about this.
03:02:54.040 --> 03:02:57.160
We designed the paradigm
of resource adequacy
03:02:57.160 --> 03:02:58.770
under the old world,
03:02:58.770 --> 03:03:03.000
where you have
generators that you control
03:03:03.000 --> 03:03:05.150
and customers who you don't control.
03:03:05.150 --> 03:03:06.150
And the generators,
03:03:06.150 --> 03:03:08.240
the supply a always has to be there
03:03:08.240 --> 03:03:09.767
because you never know
what those darn customers
03:03:09.767 --> 03:03:10.873
are gonna do.
03:03:12.160 --> 03:03:15.590
Yet today, we have a
grid that is changing,
03:03:15.590 --> 03:03:19.103
where as our colleagues
have demonstrated,
03:03:20.190 --> 03:03:22.740
customers capabilities and willingness
03:03:22.740 --> 03:03:27.090
to consume electricity
is deeply manageable
03:03:27.090 --> 03:03:30.860
in an incredibly sophisticated
and not frustrating ways.
03:03:30.860 --> 03:03:32.790
If you use the right technology
03:03:32.790 --> 03:03:34.690
and treat your customers with respect.
03:03:35.690 --> 03:03:38.290
It is supply that is
becoming intermittent
03:03:38.290 --> 03:03:41.780
and variable and risky and infirm.
03:03:41.780 --> 03:03:44.440
And so our job today is to figure out
03:03:44.440 --> 03:03:47.170
how to use customer capabilities,
03:03:47.170 --> 03:03:49.580
including all this behind
the meter generation
03:03:49.580 --> 03:03:52.280
and storage and their
willingness to move
03:03:52.280 --> 03:03:56.823
around loads enabled by
technology and decent treatment.
03:03:57.740 --> 03:04:02.740
So manage customer
stuff to meet variable supply.
03:04:03.220 --> 03:04:06.580
Don't keep thinking you need
to move supply to meet demand,
03:04:06.580 --> 03:04:09.400
move them both to complement deep other.
03:04:09.400 --> 03:04:10.780
So all of the math,
03:04:10.780 --> 03:04:13.399
every time someone talks
about every time Woody Rick
03:04:13.399 --> 03:04:16.130
talks about you with reserve margins,
03:04:16.130 --> 03:04:20.630
Woody is talking about a
paradigm for 10, 20, 30 years ago,
03:04:20.630 --> 03:04:24.073
and it is not relevant to
where we need to be going.
03:04:25.070 --> 03:04:27.880
Now, I can tell you that the
math of how to do resource
03:04:27.880 --> 03:04:29.523
adequacy is hard,
03:04:30.410 --> 03:04:34.120
given things like ELCC and
all of the uncertainties around
03:04:34.120 --> 03:04:37.160
can I build transmission
fast enough for generation?
03:04:37.160 --> 03:04:42.120
What if there is a two
week long reduction in PV
03:04:42.120 --> 03:04:45.140
or what if the wind doesn't
blow for this period of time?
03:04:45.140 --> 03:04:47.040
So it is not easy,
03:04:47.040 --> 03:04:49.790
but I am here to tell
you that it's a lot easier
03:04:49.790 --> 03:04:53.497
if you assume that customer
load can be counted on
03:04:53.497 --> 03:04:55.603
for a much more important role.
03:04:57.020 --> 03:05:00.500
So I wanna close with a
couple of ideas for you.
03:05:00.500 --> 03:05:04.240
The first is actually, it's
only one, but it's a big idea.
03:05:04.240 --> 03:05:07.090
You asked Mr. Chairman
if we attributing it
03:05:08.160 --> 03:05:09.310
to Commissioner Glotfelty,
03:05:09.310 --> 03:05:11.370
which I thought was really clever.
03:05:11.370 --> 03:05:14.827
If we design, if we designed
the market correctly,
03:05:17.970 --> 03:05:21.370
it's a common political
thing is blame someone else
03:05:21.370 --> 03:05:24.250
for the question you're
about to ask, but it's okay.
03:05:24.250 --> 03:05:26.810
If we redesign the market correctly,
03:05:26.810 --> 03:05:30.240
do we still need to fund
TDU energy efficiency
03:05:30.240 --> 03:05:32.220
and demand response?
03:05:32.220 --> 03:05:37.090
And I want to give you
four answers to that.
03:05:37.090 --> 03:05:40.030
All of them align with yes, you do.
03:05:40.030 --> 03:05:42.780
And you cannot afford not to.
03:05:42.780 --> 03:05:45.443
The first reason is about luck.
03:05:46.490 --> 03:05:47.760
Are you feeling lucky?
03:05:47.760 --> 03:05:50.770
You guys are undertaking
the world's fastest
03:05:50.770 --> 03:05:52.660
electric market redesign.
03:05:52.660 --> 03:05:54.580
These are incredibly complicated issues,
03:05:54.580 --> 03:05:56.860
and no one knows how to do this,
03:05:56.860 --> 03:05:58.750
which is why they're
all taking a lot of money
03:05:58.750 --> 03:06:00.523
to tell you how you should do it.
03:06:01.870 --> 03:06:04.400
You cannot afford to
let load keep growing
03:06:05.330 --> 03:06:08.410
while you wait to see if
all of the redesign works
03:06:08.410 --> 03:06:10.830
and all the pieces
fall into place quickly,
03:06:10.830 --> 03:06:14.640
and load is growing wicked
fast in taxes as you know.
03:06:14.640 --> 03:06:16.630
Energy efficiency and demand response,
03:06:16.630 --> 03:06:18.020
give you defense and depth.
03:06:18.020 --> 03:06:19.950
They give you diversity of tools
03:06:19.950 --> 03:06:23.410
and they will help to buffer reliability
03:06:23.410 --> 03:06:26.750
and reduce the need for
all of that addition generation
03:06:26.750 --> 03:06:28.760
and all the folks you
wanna come spend money
03:06:28.760 --> 03:06:30.640
on capital and Texas to show up
03:06:31.750 --> 03:06:33.830
and get through the
interconnection queue,
03:06:33.830 --> 03:06:36.720
which by the way you can't
fix in the next year or two fast.
03:06:36.720 --> 03:06:38.380
Or we can change it.
03:06:38.380 --> 03:06:39.213
I know you can.
03:06:39.213 --> 03:06:41.660
The question is how
fast between when you
03:06:41.660 --> 03:06:44.687
write the regulation and
when the cash shows up
03:06:44.687 --> 03:06:46.947
and the infrastructure's on the ground,
03:06:46.947 --> 03:06:48.840
and that you can't change.
03:06:48.840 --> 03:06:50.890
The second factor is cost.
03:06:50.890 --> 03:06:51.840
Bear in mind,
03:06:51.840 --> 03:06:55.320
energy efficiency and demand
response are the least costly
03:06:55.320 --> 03:06:58.710
resources available
relative to all that generation
03:06:58.710 --> 03:07:00.550
and all that storage.
03:07:00.550 --> 03:07:02.691
So you need to save Texans money.
03:07:02.691 --> 03:07:07.510
And the other thing is
that energy efficiency
03:07:07.510 --> 03:07:10.720
is gonna protect
Texans when the grid fails
03:07:10.720 --> 03:07:13.020
and no matter how
good you do on redesign,
03:07:13.020 --> 03:07:14.450
the grid is gonna fail.
03:07:14.450 --> 03:07:15.560
Every hurricane,
03:07:15.560 --> 03:07:19.430
every snowstorm tells
us the grid is gonna fail.
03:07:19.430 --> 03:07:22.250
Lightning customers are
always gonna be in the dark,
03:07:22.250 --> 03:07:25.050
energy efficiency is
gonna keep 'em alive.
03:07:25.050 --> 03:07:26.840
The third factor is equity.
03:07:26.840 --> 03:07:30.180
Markets are not kind to
low income customers,
03:07:30.180 --> 03:07:32.430
and they don't deliver
equitable outcomes.
03:07:32.430 --> 03:07:35.610
Uri pulled a lot more low income
and middle income customers
03:07:35.610 --> 03:07:37.820
than they did well to do customers who
03:07:37.820 --> 03:07:42.490
are now calling up Amy
to buy PV and storage.
03:07:42.490 --> 03:07:44.093
So they will be protected.
03:07:45.180 --> 03:07:48.130
So the well to do customers
are gonna to be protected
03:07:48.130 --> 03:07:51.360
for a long time because
they can afford the storage
03:07:51.360 --> 03:07:52.577
and the distributed generation
03:07:52.577 --> 03:07:54.950
and the food and the water in advance.
03:07:54.950 --> 03:07:58.180
But it's the customers who
are freezing in (indistinct)
03:07:58.180 --> 03:08:00.320
whom we can deliver
energy efficiency to,
03:08:00.320 --> 03:08:03.750
and who will participate in
demand response programs
03:08:03.750 --> 03:08:06.903
to protect reliability as well
as protecting themselves.
03:08:08.420 --> 03:08:09.253
And frankly,
03:08:09.253 --> 03:08:11.650
energy efficiency is about
the only energy protection
03:08:11.650 --> 03:08:15.110
most low income customers
get out of these markets.
03:08:15.110 --> 03:08:17.970
The last factor again,
is risk reduction.
03:08:17.970 --> 03:08:21.000
Energy efficiency almost always works.
03:08:21.000 --> 03:08:22.180
You change the light bulb,
03:08:22.180 --> 03:08:24.000
it's always gonna be a
low efficient light bulb.
03:08:24.000 --> 03:08:27.970
If you put in window better
windows for weatherization
03:08:29.651 --> 03:08:30.980
or a more efficient air conditioner,
03:08:30.980 --> 03:08:32.500
it's always gonna work.
03:08:32.500 --> 03:08:34.620
It's always gonna reduce demand.
03:08:34.620 --> 03:08:37.550
So it's always gonna be
delivering better reliability
03:08:37.550 --> 03:08:40.250
for you and lower peak demand.
03:08:40.250 --> 03:08:42.530
And it's not likely to break .
03:08:42.530 --> 03:08:43.363
If it breaks,
03:08:43.363 --> 03:08:44.870
it's not gonna have the same consequence
03:08:44.870 --> 03:08:47.820
for the grid that a
power plant breaking will,
03:08:47.820 --> 03:08:50.010
or that loss of gas supply,
03:08:50.010 --> 03:08:53.470
or loss of distribution
lines or transmission lines.
03:08:53.470 --> 03:08:56.990
So you need to use these
measures as ways to reduce risk
03:08:56.990 --> 03:08:59.840
and diversify the
tools to operate the grid
03:08:59.840 --> 03:09:03.230
and protect reliability
for all of us as a whole,
03:09:03.230 --> 03:09:07.570
not just put 90% of your cash bet
03:09:07.570 --> 03:09:09.840
on the generation side to work,
03:09:09.840 --> 03:09:13.700
cover that bet by making
an even a fraction of that.
03:09:13.700 --> 03:09:16.290
Some invested in energy efficiency
03:09:16.290 --> 03:09:20.010
and demand response will
deliver massive long term benefits
03:09:20.010 --> 03:09:22.090
in terms of grid reliability,
03:09:22.090 --> 03:09:24.887
and let you keep your
promise to the people of Texas
03:09:24.887 --> 03:09:27.010
and the politicians of Texas
03:09:27.010 --> 03:09:28.860
that you're gonna keep our lights on.
03:09:28.860 --> 03:09:29.693
Thank you.
03:09:30.670 --> 03:09:32.400
Thank you,
Mrs Silver Stain.
03:09:32.400 --> 03:09:34.570
Can't imagine to see...
03:09:34.570 --> 03:09:36.650
I'm both intrigued and terrified
03:09:36.650 --> 03:09:38.438
to see the slides you pulled.
03:09:38.438 --> 03:09:41.021
(all laughing)
03:09:42.400 --> 03:09:44.200
And thank you to our entire panel.
03:09:44.200 --> 03:09:46.700
Any final questions or
comments for our our panel?
03:09:48.860 --> 03:09:49.965
All right.
03:09:49.965 --> 03:09:52.390
Well, it's certainly been a
full day of demand response,
03:09:52.390 --> 03:09:54.560
distributed generation, et cetera.
03:09:54.560 --> 03:09:55.510
Thank you all much.
03:09:59.030 --> 03:10:01.433
That concludes item number four.
03:10:02.510 --> 03:10:04.760
(laughing)
03:10:06.591 --> 03:10:10.040
And we're gonna jump
straight to item number 21,
03:10:10.040 --> 03:10:12.440
project number 52373,
03:10:12.440 --> 03:10:15.240
review of the wholesale
electric market design
03:10:15.240 --> 03:10:18.330
Commissioner McAdams says filed a memo.
03:10:18.330 --> 03:10:19.990
We'll turn over you.
03:10:19.990 --> 03:10:21.930
Thank you, Mr. Chairman.
03:10:21.930 --> 03:10:25.540
I wanted to take this up today
and provide an opportunity
03:10:25.540 --> 03:10:29.653
to unpack some of the
concepts in the memo has stated.
03:10:31.180 --> 03:10:36.180
I urge the Commission to
consider this and these concepts
03:10:36.500 --> 03:10:40.610
for our next open
meeting for possible action.
03:10:40.610 --> 03:10:43.400
And let me tell you why.
03:10:43.400 --> 03:10:48.200
Because I think, and this
is where I'd love feedback,
03:10:48.200 --> 03:10:51.460
but given the
conversations that we've had
03:10:51.460 --> 03:10:52.870
over the last several workshops,
03:10:52.870 --> 03:10:54.870
which have been incredibly
productive as stated
03:10:54.870 --> 03:10:55.923
in the memo,
03:10:57.450 --> 03:10:59.710
there are common
themes that are emerging
03:11:00.890 --> 03:11:04.233
in terms of potential
action near term action.
03:11:06.370 --> 03:11:09.910
Among the common themes are are issues
03:11:09.910 --> 03:11:14.910
that do have relevant rules
that are already in place
03:11:16.070 --> 03:11:18.150
that would necessitate change.
03:11:18.150 --> 03:11:23.150
In order to engage and
open up a proceeding
03:11:23.640 --> 03:11:26.420
and follow the normal comment period
03:11:26.420 --> 03:11:31.420
and procedural glide path
would take four to five months,
03:11:31.870 --> 03:11:34.273
if we were to do that on September 23rd,
03:11:34.273 --> 03:11:38.530
that would put us in
January or February.
03:11:38.530 --> 03:11:41.303
Of some of the common
themes that we discuss
03:11:41.303 --> 03:11:42.963
at our workshops,
03:11:42.963 --> 03:11:46.260
a lot of them will
impact price formation
03:11:46.260 --> 03:11:50.083
in terms of the forwards that
will impact the summer of 22.
03:11:51.090 --> 03:11:55.460
And as per the market custom of ERCOT,
03:11:55.460 --> 03:11:58.860
that is right in the prime season when
03:11:58.860 --> 03:12:02.090
retail electric providers
non opt opportunities,
03:12:02.090 --> 03:12:04.710
all market participants
go to market and start
03:12:04.710 --> 03:12:05.930
purchasing their hedges
03:12:05.930 --> 03:12:08.823
and positioning their hedges for peak.
03:12:10.080 --> 03:12:13.070
So with that in mind and as context,
03:12:13.070 --> 03:12:16.897
that's why I chose some
of the topics that I did
03:12:16.897 --> 03:12:21.897
for action and related
to the two relevant rules
03:12:23.270 --> 03:12:26.173
that we have in the
Texas Administrative Code.
03:12:30.140 --> 03:12:32.063
And again, among
those, that's why,
03:12:33.702 --> 03:12:36.970
I'm kind of opening up some
of these topics for questions,
03:12:36.970 --> 03:12:41.970
whether we move the high cap from 9,000,
03:12:42.220 --> 03:12:44.730
should we decouple
the system wide offer cap
03:12:44.730 --> 03:12:45.563
and the high cap?
03:12:45.563 --> 03:12:46.520
And I have thoughts on that,
03:12:46.520 --> 03:12:47.860
but we'll loves yours,
03:12:47.860 --> 03:12:51.480
should we change the value of loss load,
03:12:51.480 --> 03:12:54.170
which I believe was certainly implied
03:12:54.170 --> 03:12:59.170
during the last session and
what should be that number?
03:12:59.340 --> 03:13:01.830
Should we change the ORDC now, again,
03:13:01.830 --> 03:13:04.310
this is a on thread that has reoccurred
03:13:04.310 --> 03:13:05.733
through all our proceedings.
03:13:07.160 --> 03:13:10.420
Do we as a Commission
have to adjust the curve,
03:13:10.420 --> 03:13:11.980
or do we just look at extending
03:13:11.980 --> 03:13:14.630
the minimum contingency level.
03:13:14.630 --> 03:13:17.050
The MC away from 2300, which again,
03:13:17.050 --> 03:13:19.173
is that trigger at EEA1.
03:13:21.780 --> 03:13:26.280
Now as part of that, what
numbers would we consider?
03:13:26.280 --> 03:13:27.113
And again,
03:13:27.113 --> 03:13:28.370
the reason I wanted to bring this up now
03:13:28.370 --> 03:13:32.060
is because concurrent to ERCOT efforts,
03:13:32.060 --> 03:13:35.800
they are working with groups potentially
03:13:35.800 --> 03:13:40.100
to study significant issues
that could do back cast for us.
03:13:40.100 --> 03:13:44.640
This would be a relevant time
to throw scenarios out there
03:13:44.640 --> 03:13:46.460
for them to consider certain numbers
03:13:46.460 --> 03:13:49.610
as a back cast model
to show us the impacts.
03:13:49.610 --> 03:13:50.443
And again,
03:13:50.443 --> 03:13:53.330
all that lines up with
the ultimate decisions
03:13:53.330 --> 03:13:57.363
that you, Mr. Chairman,
urges to make in November.
03:13:58.413 --> 03:14:01.820
December, correct.
03:14:01.820 --> 03:14:02.850
every 30 days counts.
03:14:02.850 --> 03:14:04.481
That's correct.
03:14:04.481 --> 03:14:05.314
(laughing)
03:14:05.314 --> 03:14:06.910
I don't wanna squeeze in 'em up on you.
03:14:09.202 --> 03:14:12.090
And then you get to the
emergency pricing program.
03:14:12.090 --> 03:14:15.970
It is certainly articulated
in black letter of law
03:14:17.160 --> 03:14:21.227
as of section 18 of Senate
bill three PRA 39 160
03:14:23.620 --> 03:14:25.620
that instructs the
Commission to establish
03:14:25.620 --> 03:14:27.180
an emergency pricing program.
03:14:27.180 --> 03:14:31.680
And under that program
it goes into effect
03:14:31.680 --> 03:14:36.680
the high cap a has been
in effect 12 out of 24 hours.
03:14:38.310 --> 03:14:42.683
The EPP cap cannot exceed
the system wide offer cap.
03:14:44.170 --> 03:14:47.150
Also it establishes
an ancillary services
03:14:47.150 --> 03:14:49.980
cap to be in effect during the EPP,
03:14:49.980 --> 03:14:53.110
which cannot exceed
the system wide offer cap.
03:14:53.110 --> 03:14:54.760
Now for the purpose of our system,
03:14:54.760 --> 03:14:56.750
that's significant considering the risk
03:14:56.750 --> 03:14:59.780
that those being into
ancillary service is incur.
03:14:59.780 --> 03:15:02.180
So if you can't exceed
the system wide offer gap
03:15:03.300 --> 03:15:06.451
we have to compute
something differently.
03:15:06.451 --> 03:15:09.490
The OCAP may not exceed under that law
03:15:09.490 --> 03:15:10.973
the system wide offer cap.
03:15:12.214 --> 03:15:15.610
And we've gotta review
it once every five years.
03:15:15.610 --> 03:15:18.410
And then we've already
changed the way generators
03:15:18.410 --> 03:15:23.410
are reimbursed for verifiable
operating costs in our rule.
03:15:23.460 --> 03:15:28.460
So just to kind of put
a frame around this
03:15:28.957 --> 03:15:30.913
and where I'm thinking.
03:15:33.850 --> 03:15:38.470
Look in terms of our
conservative operating doctrine
03:15:38.470 --> 03:15:40.490
that we have embraced this summer
03:15:40.490 --> 03:15:43.523
and looks like we'll be
needed moving forward.
03:15:45.420 --> 03:15:49.070
The MCL should be studied at the least.
03:15:49.070 --> 03:15:51.340
And we should look at that because again
03:15:51.340 --> 03:15:55.690
with that everything advances
a whole arsenal of tools
03:15:55.690 --> 03:15:59.950
move forward and would
have to be revalued as well.
03:15:59.950 --> 03:16:00.783
So,
03:16:03.060 --> 03:16:04.340
we need time.
03:16:04.340 --> 03:16:07.700
And so that's why I'd
like that considered.
03:16:07.700 --> 03:16:12.120
I am not inferring as per my
memo that ORDC be captured
03:16:12.120 --> 03:16:12.953
in a rule.
03:16:12.953 --> 03:16:14.950
Although I believe people,
03:16:14.950 --> 03:16:17.303
stakeholders will
comment to that effect.
03:16:19.050 --> 03:16:22.270
But the components
system might offer cap
03:16:22.270 --> 03:16:25.670
high cap that are clearly
articulated and joined right now
03:16:25.670 --> 03:16:29.630
in the rule need to be
taken up and broken apart.
03:16:29.630 --> 03:16:30.730
So while we're doing that,
03:16:30.730 --> 03:16:35.333
we might as well take a
ORDC as integral consideration.
03:16:39.647 --> 03:16:43.970
And in terms of tack 25, 507,
03:16:43.970 --> 03:16:45.473
the emergency response system,
03:16:47.880 --> 03:16:51.500
whatever changes we make there, again,
03:16:51.500 --> 03:16:53.420
concurrent with that MC decision,
03:16:53.420 --> 03:16:58.420
if one is to be made and
as ERS should it move
03:16:58.570 --> 03:17:03.540
out of EEA one or EEA two
functions should it happen,
03:17:03.540 --> 03:17:08.510
auctions are made on ERs
quarterly for quarterly contracts.
03:17:08.510 --> 03:17:13.510
And for example, if you
wanted to affect ERS for peak,
03:17:13.520 --> 03:17:18.200
that auction would be
officially closed on May 16th.
03:17:18.200 --> 03:17:20.840
So whatever changes
we make would be in time
03:17:20.840 --> 03:17:22.578
for those financial decisions.
03:17:22.578 --> 03:17:23.411
So next summer.
03:17:23.411 --> 03:17:24.244
Yes, sir.
03:17:24.244 --> 03:17:25.077
To impact next summer.
03:17:25.077 --> 03:17:26.990
So with that, I would
open it up for your thoughts.
03:17:26.990 --> 03:17:28.037
A clarifying question you,
03:17:28.037 --> 03:17:30.510
the action you were
considering asking us to consider
03:17:30.510 --> 03:17:32.440
for next meeting would be
opening these two projects.
03:17:32.440 --> 03:17:33.273
Yes, sir.
03:17:33.273 --> 03:17:34.790
Okay.
03:17:34.790 --> 03:17:37.850
Questions, comments for
Commissioner McAdams.
03:17:37.850 --> 03:17:40.325
I have some, but I
will let you go first.
03:17:40.325 --> 03:17:41.158
Go ahead.
03:17:41.158 --> 03:17:44.410
Okay, I think it's no
secret that I've been
03:17:44.410 --> 03:17:46.092
wanting to open up world making project
03:17:46.092 --> 03:17:47.500
for the last couple of months.
03:17:47.500 --> 03:17:49.140
(laughs)
03:17:49.140 --> 03:17:51.470
Showed up wanting to
open up world projects.
03:17:51.470 --> 03:17:52.890
It's what I do.
03:17:52.890 --> 03:17:54.150
So okay.
03:17:54.150 --> 03:17:57.590
So I'm all about starting
to send price signals
03:17:57.590 --> 03:17:59.240
as soon as possible.
03:17:59.240 --> 03:18:02.820
And I agree that we do
need to study the ORDC
03:18:02.820 --> 03:18:05.020
with the third party
independent consultant.
03:18:05.989 --> 03:18:08.650
And in addition to the minimum
minimum contingency level,
03:18:08.650 --> 03:18:10.685
or the X factor is often referred to
03:18:10.685 --> 03:18:13.100
by the stakeholder community industry,
03:18:13.100 --> 03:18:16.900
I think we need to
look at the curve being
03:18:16.900 --> 03:18:18.790
shifted potentially,
03:18:18.790 --> 03:18:21.140
and the price cap or
variation of price gaps,
03:18:21.140 --> 03:18:25.460
and have backs conducted on a variation
03:18:25.460 --> 03:18:27.740
of already see changes, the price cap,
03:18:27.740 --> 03:18:30.853
the curve X factor slash MCLE.
03:18:32.984 --> 03:18:36.710
And I think as part of
that evaluation that I think,
03:18:36.710 --> 03:18:39.210
'cause I'm not sure
where we are right now
03:18:39.210 --> 03:18:42.330
with respect to what price
caps we wanna look at
03:18:42.330 --> 03:18:44.573
and whether we want to shift curves.
03:18:45.699 --> 03:18:48.600
I know Commissioner
McAdams definitely has suggested
03:18:48.600 --> 03:18:51.090
that the MCLEs needs to
be looked out an increase
03:18:51.090 --> 03:18:55.640
so that we could start
sending price signals earlier.
03:18:55.640 --> 03:18:58.880
And so I think as a Commission,
03:18:58.880 --> 03:19:00.810
we need to decide what
we want the third party
03:19:00.810 --> 03:19:02.780
independent consultant to look at.
03:19:02.780 --> 03:19:06.590
Run those back analysis,
arrive at a price cap,
03:19:06.590 --> 03:19:08.697
and then plug that
into the role making .
03:19:10.012 --> 03:19:11.590
And I don't know how you're envisioning
03:19:11.590 --> 03:19:15.923
the timing Commissioner
McAdams, but it seems,
03:19:16.813 --> 03:19:18.840
I mean, I think we
could open that project,
03:19:18.840 --> 03:19:20.630
but I think we need some analysis
03:19:20.630 --> 03:19:22.980
before we even get
going with the project done.
03:19:25.303 --> 03:19:29.560
And I agree that we may
get some recommendations
03:19:29.560 --> 03:19:31.305
on what to do with the ORDC,
03:19:31.305 --> 03:19:32.760
whether we put in the
rule or we don't put it in
03:19:32.760 --> 03:19:35.450
the role and you continue
to operate with a framework
03:19:35.450 --> 03:19:37.487
where we give directives
and implements it.
03:19:37.487 --> 03:19:40.515
And I think from my perspective,
03:19:40.515 --> 03:19:42.640
and I know you're not suggesting that,
03:19:42.640 --> 03:19:47.070
but I think that the
framework we have right now,
03:19:47.070 --> 03:19:50.500
which is the Commission
giving ERCOT a directive
03:19:50.500 --> 03:19:53.140
to make RDC changes in ERCOT,
03:19:53.140 --> 03:19:56.350
making those changes via
NPRs and then system changes,
03:19:56.350 --> 03:19:58.780
whatever it is that they do
03:19:58.780 --> 03:20:03.780
has been a very nimble
action we've been able to take.
03:20:03.950 --> 03:20:06.290
And I don't think that,
03:20:06.290 --> 03:20:07.480
and I know you're not suggesting this,
03:20:07.480 --> 03:20:09.260
but I'm just speaking
to the other option,
03:20:09.260 --> 03:20:12.250
putting that in rule is
gonna help us when
03:20:12.250 --> 03:20:13.870
push comes to shop and we need to send
03:20:13.870 --> 03:20:16.100
or price signal relatively quickly.
03:20:16.100 --> 03:20:17.590
But I know that we have to open the rule
03:20:17.590 --> 03:20:19.330
because if we change the price cap,
03:20:19.330 --> 03:20:22.280
we have to change the, we
have to change it in the role.
03:20:22.280 --> 03:20:23.593
So with that being said,
03:20:24.680 --> 03:20:25.813
I don't disagree about opening the rule.
03:20:25.813 --> 03:20:29.200
We have to open the
rule for a variety of reason.
03:20:29.200 --> 03:20:31.020
I'm just wondering the timing
03:20:31.020 --> 03:20:32.320
and when we're gonna
be able to take action.
03:20:32.320 --> 03:20:34.670
And I don't know if we
have anything in mind
03:20:34.670 --> 03:20:36.283
on that necessarily.
03:20:37.670 --> 03:20:38.960
With respect to ERS,
03:20:38.960 --> 03:20:42.623
I think we heard a variety of
comments today that I agree,
03:20:42.623 --> 03:20:45.790
I think out of all the
demand response programs
03:20:45.790 --> 03:20:50.163
that one needs to be opened
and it's an existing role.
03:20:51.020 --> 03:20:54.260
The only thing I will
say is that and I know
03:20:54.260 --> 03:20:57.210
this probably was
against what we just heard,
03:20:57.210 --> 03:21:00.033
but we need to be looking
at both sides of the equation.
03:21:00.950 --> 03:21:01.972
No doubt.
03:21:01.972 --> 03:21:03.980
And so what I'm about
to say doesn't mean
03:21:03.980 --> 03:21:06.200
that we shouldn't be looking at load,
03:21:06.200 --> 03:21:08.410
what I think the
legislature has made clear,
03:21:08.410 --> 03:21:09.720
and so as the Governor is that we need
03:21:09.720 --> 03:21:11.670
to incent dispatchable generation.
03:21:11.670 --> 03:21:16.670
So I wanna make sure that
we are sending those signals
03:21:17.540 --> 03:21:22.540
through ORDC through giving
more direction on AES products.
03:21:22.543 --> 03:21:27.543
And I think the next
workshop will probably be,
03:21:27.950 --> 03:21:29.200
or maybe this next open meeting,
03:21:29.200 --> 03:21:32.620
I don't know that I know
we've had some discussion
03:21:32.620 --> 03:21:35.440
about whether or not ancillary services
03:21:35.440 --> 03:21:40.300
belong in a PUC role making home or not.
03:21:40.300 --> 03:21:44.750
But I do believe that
at least with respect to
03:21:44.750 --> 03:21:46.441
specific AEs products,
03:21:46.441 --> 03:21:49.570
we should consider putting
at least the parameters
03:21:49.570 --> 03:21:50.820
in a rule.
03:21:50.820 --> 03:21:52.290
And I wouldn't want us to wait,
03:21:52.290 --> 03:21:55.310
if we already have an
idea that a certain product,
03:21:55.310 --> 03:21:58.440
like a firm fuel holding
product is necessary,
03:21:58.440 --> 03:22:01.550
then why not open a
project and start getting more
03:22:01.550 --> 03:22:02.740
detailed information,
03:22:02.740 --> 03:22:05.910
and then drop that information
to the product project
03:22:05.910 --> 03:22:06.743
when it's timely.
03:22:06.743 --> 03:22:09.140
Because I do think that
we need to start sending
03:22:09.140 --> 03:22:11.520
price signals for generation investment
03:22:11.520 --> 03:22:13.240
sooner rather than later.
03:22:13.240 --> 03:22:15.990
And so
03:22:17.090 --> 03:22:18.653
that's where I'm at right now.
03:22:19.590 --> 03:22:20.940
Do you wanna speak to that?
03:22:21.934 --> 03:22:22.767
Makes sense.
03:22:22.767 --> 03:22:27.440
And I think the, over
my interpretation of
03:22:27.440 --> 03:22:30.480
these proposed project openings are one,
03:22:30.480 --> 03:22:34.400
we need to be ready to implement.
03:22:34.400 --> 03:22:38.900
Well, one, these is
opening projects on I guess,
03:22:38.900 --> 03:22:40.950
levers we can pull
that are already in rule
03:22:40.950 --> 03:22:43.580
that will require by
definition rule change.
03:22:43.580 --> 03:22:46.250
That does not mean
it excludes other levers
03:22:46.250 --> 03:22:50.820
that we can pull like a new as product
03:22:50.820 --> 03:22:54.210
or changing the queue or any others.
03:22:54.210 --> 03:22:56.190
It does not exclude that.
03:22:56.190 --> 03:22:58.270
But my understanding,
03:22:58.270 --> 03:23:00.150
my interpretation of what
you just laid out is this
03:23:00.150 --> 03:23:05.150
just gives us the groundwork
to be ready to implement
03:23:05.500 --> 03:23:08.373
those rules once we figure
out the blueprint in December.
03:23:09.590 --> 03:23:10.510
And that's ready.
03:23:10.510 --> 03:23:11.343
And so those,
03:23:11.343 --> 03:23:13.320
the things we know that
we have to change and rule
03:23:13.320 --> 03:23:15.030
to the extent we decide to change 'em,
03:23:15.030 --> 03:23:17.520
we've got that process, that's open.
03:23:17.520 --> 03:23:19.733
For things that may,
03:23:21.021 --> 03:23:24.050
we may or may not TBD,
03:23:24.050 --> 03:23:29.050
say as I think those
topics and those levers,
03:23:31.550 --> 03:23:32.670
or what we're willing to consider,
03:23:32.670 --> 03:23:35.290
what we're not willing
to consider are going to
03:23:35.290 --> 03:23:37.850
crystallize very rapidly,
03:23:37.850 --> 03:23:39.800
starting with our October work session.
03:23:41.770 --> 03:23:43.270
And then as we move through November,
03:23:43.270 --> 03:23:45.630
that's gonna get even more clear
03:23:45.630 --> 03:23:48.480
about what's going to be
part of the December blueprint
03:23:48.480 --> 03:23:49.600
or not.
03:23:49.600 --> 03:23:52.275
And so I would say,
03:23:52.275 --> 03:23:57.275
let's certainly prepare for
the event that a new tool,
03:23:57.280 --> 03:23:58.920
I guess might be in
03:24:04.110 --> 03:24:06.110
something we would do wanna put in rule.
03:24:07.360 --> 03:24:08.930
But I would propose,
03:24:08.930 --> 03:24:12.280
we at least wait until
that October work session
03:24:12.280 --> 03:24:14.210
and then so we can crystallize
03:24:14.210 --> 03:24:17.010
on exactly what kind of AES we wanna do.
03:24:17.010 --> 03:24:19.050
And if we want to
03:24:23.400 --> 03:24:25.846
put that in rule or
leave it at the level,
03:24:25.846 --> 03:24:29.263
and also remember concurrently,
we've got new governments,
03:24:30.623 --> 03:24:31.470
that's gonna be coming
on board at the same time,
03:24:31.470 --> 03:24:36.040
which rule also inform how
we approach all of these things.
03:24:36.040 --> 03:24:36.873
Right.
03:24:36.873 --> 03:24:39.970
And that's actually how I
was thinking about it in timing
03:24:39.970 --> 03:24:41.260
was that I think we still need to gather
03:24:41.260 --> 03:24:45.550
some more information in
this next October work session
03:24:45.550 --> 03:24:47.130
to help us scope out
03:24:47.130 --> 03:24:52.130
or refine our focus on what new products
03:24:52.280 --> 03:24:54.970
we would be interested in moving forward
03:24:54.970 --> 03:24:58.190
with what specific RDC
changes we would want
03:24:58.190 --> 03:25:01.193
our independent consumer
to back and model.
03:25:02.400 --> 03:25:06.650
And then also I think today
we got a lot of information,
03:25:06.650 --> 03:25:09.133
I think Commissioner
McAdams laid out some points
03:25:09.133 --> 03:25:10.340
that change in ERS,
03:25:10.340 --> 03:25:12.260
I think those are two starting points
03:25:12.260 --> 03:25:15.210
and probably others to look
at when we open up the role.
03:25:15.210 --> 03:25:17.310
The other existing role
that we didn't discuss
03:25:17.310 --> 03:25:19.970
was the TDU load management program.
03:25:19.970 --> 03:25:21.800
And that's also an existing role
03:25:23.100 --> 03:25:25.810
that we may wanna
consider opening up as well.
03:25:25.810 --> 03:25:28.730
You consider adding
that to the topics.
03:25:28.730 --> 03:25:29.563
Yes, sir.
03:25:30.420 --> 03:25:31.253
And the timing,
03:25:31.253 --> 03:25:33.950
I'm not suggesting the time
and maybe one that we open
03:25:35.150 --> 03:25:36.760
that part of the menu.
03:25:36.760 --> 03:25:38.331
Sure.
03:25:38.331 --> 03:25:40.030
And I think for
October, I think we'll be
03:25:41.468 --> 03:25:44.200
the last work session
we're taking and information,
03:25:44.200 --> 03:25:46.750
but also feel free to start preparing,
03:25:46.750 --> 03:25:51.080
to lay out suggestions and
really clarifying thoughts.
03:25:51.080 --> 03:25:54.253
I think we all should be prepared.
03:25:54.253 --> 03:25:57.040
We'll still be taking
information for stakeholders,
03:25:57.040 --> 03:25:59.190
but that's going to
be the inflection point
03:25:59.190 --> 03:26:01.320
where it shifts to starting to lay out
03:26:01.320 --> 03:26:03.627
and bet amongst us and with the public
03:26:03.627 --> 03:26:06.693
and with our stakeholders
start betting very specific ideas.
03:26:07.924 --> 03:26:11.230
And one also thing I
would point out that I omitted,
03:26:11.230 --> 03:26:14.690
but as per the October 14th workshop,
03:26:14.690 --> 03:26:18.800
we have studies coming
for us from generators,
03:26:18.800 --> 03:26:21.935
as well as (indistinct),
will they be there?
03:26:21.935 --> 03:26:22.768
Not yet.
03:26:22.768 --> 03:26:23.601
Not yet.
03:26:24.520 --> 03:26:27.050
But at the least it kind of helps inform
03:26:27.050 --> 03:26:31.120
their thinking on in terms
of the ORDC near term,
03:26:31.120 --> 03:26:34.633
what we are considering as a framework.
03:26:35.930 --> 03:26:39.600
And they could come and actually OPPI
03:26:39.600 --> 03:26:41.527
on that a little bit might help that
03:26:42.714 --> 03:26:43.880
I would also like
to get their opinion
03:26:43.880 --> 03:26:47.843
or get more info on decoupling
of the H cap and the qua.
03:26:48.690 --> 03:26:50.080
That's definitely something that I think
03:26:50.080 --> 03:26:53.750
we need some further analysis of by Brad
03:26:55.860 --> 03:26:59.917
to see what the opportunities
and cost may there.
03:27:01.420 --> 03:27:03.400
Little bit while
we're still on it,
03:27:03.400 --> 03:27:04.240
a little bit of history.
03:27:04.240 --> 03:27:09.240
And we've been bouncing
around when the the old MCL
03:27:09.320 --> 03:27:13.210
was settled on and jump in
here when y'all are watching
03:27:13.210 --> 03:27:14.473
this stuff move through.
03:27:16.248 --> 03:27:20.587
But 2750 I think was
discussed at the time.
03:27:20.587 --> 03:27:22.403
And this was again 2014.
03:27:24.240 --> 03:27:25.950
2750 discussed at the time
03:27:27.461 --> 03:27:30.460
and I, that's why these studies
are gonna be so important
03:27:30.460 --> 03:27:32.350
because depending on the low level,
03:27:32.350 --> 03:27:33.820
you're talking about real money
03:27:33.820 --> 03:27:37.360
and the frequency of events
cause dropping it down,
03:27:37.360 --> 03:27:42.360
it increases the, the probability
of ORDC being activated.
03:27:42.510 --> 03:27:46.980
And so that a starting point,
03:27:46.980 --> 03:27:49.560
if we go all the way back to 2014,
03:27:49.560 --> 03:27:53.610
when at the time was 12,000,
megawatts on the system
03:27:53.610 --> 03:27:55.990
no solar, and now we're at 31,000,
03:27:55.990 --> 03:27:59.280
it just puts it in a scale in
terms of the resource mix,
03:27:59.280 --> 03:28:00.640
how things change.
03:28:00.640 --> 03:28:04.090
And as these generators are sitting
03:28:04.090 --> 03:28:05.920
there watching this and
as they're gonna introduce
03:28:05.920 --> 03:28:09.970
their study, just a a
poll for them to look at,
03:28:09.970 --> 03:28:11.380
where where's the starting point?
03:28:11.380 --> 03:28:14.287
2300, maybe inadequate, where do you go?
03:28:15.135 --> 03:28:15.968
Right.
03:28:15.968 --> 03:28:16.801
I think that makes sense.
03:28:16.801 --> 03:28:20.323
Looking at variety of
X factors above 2000.
03:28:21.500 --> 03:28:25.170
Okay, so that's all
03:28:25.170 --> 03:28:26.553
Dito, Dito and Dito.
03:28:27.980 --> 03:28:32.333
Well put, that's always
a popular response.
03:28:33.540 --> 03:28:37.750
So I think where we're
triangulating towards
03:28:37.750 --> 03:28:41.950
is considering opening
projects on levers
03:28:41.950 --> 03:28:44.770
that are currently possible
levers on market redesign
03:28:44.770 --> 03:28:48.450
that are currently in rule,
including the DR load shift,
03:28:48.450 --> 03:28:50.090
low management program.
03:28:50.090 --> 03:28:53.740
And then as we move
on our next open meeting
03:28:53.740 --> 03:28:56.343
in between now and our
work session in October,
03:29:00.030 --> 03:29:04.290
we'll receive the studies from
our third party stakeholders
03:29:04.290 --> 03:29:05.750
well before that October work session.
03:29:05.750 --> 03:29:08.490
So we Commission will
have a chance to digest
03:29:09.709 --> 03:29:11.020
and then of course discussed and debated
03:29:11.020 --> 03:29:13.330
at the October work session.
03:29:13.330 --> 03:29:16.020
But come prepared to
the October work session
03:29:16.020 --> 03:29:19.290
to consider opening
a project or projects
03:29:19.290 --> 03:29:22.030
on other levers of market redesign
03:29:22.030 --> 03:29:23.630
that are not currently in rule,
03:29:23.630 --> 03:29:26.760
but that we may want
to consider in rule.
03:29:26.760 --> 03:29:28.870
And so at that point,
we, we will hopefully
03:29:28.870 --> 03:29:31.610
have a much narrower scope
of what we would consider.
03:29:31.610 --> 03:29:35.810
And then we can take up
the market redesign levers,
03:29:35.810 --> 03:29:37.940
not currently in rule that
we may want to put in rule
03:29:37.940 --> 03:29:39.020
at that time.
03:29:39.020 --> 03:29:40.040
Does that make sense?
03:29:40.040 --> 03:29:40.873
That makes sense.
03:29:40.873 --> 03:29:41.706
Yes, sir.
03:29:42.757 --> 03:29:45.215
Now we're not adopting
anything at this time.
03:29:45.215 --> 03:29:47.940
We're gonna vote a
decision next time in spirit.
03:29:47.940 --> 03:29:50.497
And I do wanna
say that I did put
03:29:50.497 --> 03:29:54.090
out the TD management
rule or 25, 1801 out there.
03:29:54.090 --> 03:29:55.500
Only because it's an existing rule,
03:29:55.500 --> 03:29:57.360
but I guess we need to decide
03:29:57.360 --> 03:30:02.200
if there's any general
direction we're headed
03:30:02.200 --> 03:30:05.313
to making change just
that little, if any, before...
03:30:06.413 --> 03:30:08.540
Well, I think it opens
up and we're gonna
03:30:08.540 --> 03:30:09.740
have the discussion anyway.
03:30:09.740 --> 03:30:14.147
I think this is in many
ways a procedural angle
03:30:14.147 --> 03:30:18.390
of the groundwork or
setting up the framework
03:30:18.390 --> 03:30:20.330
for official action they take later.
03:30:20.330 --> 03:30:21.410
Yeah, that's right.
03:30:21.410 --> 03:30:25.523
One of those things
(indistinct) TDU programs
03:30:25.523 --> 03:30:27.973
some are only status right now.
03:30:29.920 --> 03:30:33.693
That is low hanging if you
were just provide focus.
03:30:34.742 --> 03:30:37.159
(indistinct)
03:30:38.710 --> 03:30:42.030
If I may just wanted
to lay out particularly
03:30:42.030 --> 03:30:45.743
for those who might be
following on the viewers,
03:30:48.951 --> 03:30:51.120
there's a distinction
between opening a project
03:30:51.120 --> 03:30:52.580
and opening a rule.
03:30:52.580 --> 03:30:54.630
So when we open a project,
03:30:54.630 --> 03:30:58.690
that's kind of a an organizational tool
03:30:58.690 --> 03:31:02.100
to keep our thoughts
about a particular topic
03:31:02.100 --> 03:31:06.200
and let's folks know
where they can participate
03:31:06.200 --> 03:31:08.570
and give their views on that project.
03:31:08.570 --> 03:31:12.500
And then opening a
rule is an actual vote
03:31:12.500 --> 03:31:14.490
as Commissioner McAdams mentioned
03:31:14.490 --> 03:31:17.720
that you will take an
open meeting to propose
03:31:17.720 --> 03:31:20.440
specific changes to one of our rules.
03:31:20.440 --> 03:31:24.380
So we can open a project
at any time you would like,
03:31:24.380 --> 03:31:27.430
and there's no deadline
for us to come forward
03:31:27.430 --> 03:31:28.440
with that rule.
03:31:28.440 --> 03:31:30.430
We can continue discussing
03:31:31.290 --> 03:31:34.070
the topics within the project
03:31:34.070 --> 03:31:35.780
until you're ready to propose.
03:31:35.780 --> 03:31:38.640
So on the two
outline in the memo,
03:31:38.640 --> 03:31:41.640
I would propose opening
a rule making subject
03:31:41.640 --> 03:31:44.500
to the the parameters,
03:31:44.500 --> 03:31:47.643
the issues and the vault
and out outlined in the memo.
03:31:48.990 --> 03:31:52.600
But again, and correct
me if I'm wrong Connie,
03:31:52.600 --> 03:31:54.810
is as comments come back,
03:31:54.810 --> 03:31:58.830
the Commission can always
sort of within the parameters
03:31:58.830 --> 03:32:02.743
and scope of the rule
making go further afield,
03:32:03.660 --> 03:32:06.150
subject to the parameters.
03:32:06.150 --> 03:32:06.983
That's right.
03:32:06.983 --> 03:32:10.830
You can take in comments consider those
03:32:10.830 --> 03:32:15.830
and use that input
when you draft the actual
03:32:17.820 --> 03:32:19.943
changes or amendments to the rule.
03:32:20.800 --> 03:32:21.633
Correct.
03:32:21.633 --> 03:32:23.370
But you're still
touching on those topics
03:32:23.370 --> 03:32:25.320
which are foundational.
03:32:25.320 --> 03:32:26.153
No, absolutely.
03:32:26.153 --> 03:32:29.415
And I understood your products
to be rule making proceeds.
03:32:29.415 --> 03:32:31.190
I mean, they're existing rules.
03:32:31.190 --> 03:32:33.160
So you're ready
to start the clock
03:32:33.160 --> 03:32:36.220
with opening rule making on those.
03:32:36.220 --> 03:32:37.053
Yes, sir.
03:32:37.053 --> 03:32:37.886
(indistinct)
03:32:37.886 --> 03:32:38.853
Next week.
03:32:39.970 --> 03:32:41.080
And we'll do the same,
03:32:41.080 --> 03:32:43.579
considered the same for October,
03:32:43.579 --> 03:32:45.279
for levers not currently enrolled.
03:32:47.250 --> 03:32:48.083
All right.
03:32:48.083 --> 03:32:48.916
Makes sense.
03:32:49.971 --> 03:32:52.870
We'll look forward to
any further discussion on-
03:32:52.870 --> 03:32:54.850
I was just gonna say
thank you for the memo.
03:32:54.850 --> 03:32:57.400
I think we gotta get going,
03:32:57.400 --> 03:33:02.110
and I think I think the market
Commissioner club outside
03:33:02.110 --> 03:33:03.560
the market signals need to be there.
03:33:03.560 --> 03:33:06.190
So let's go.
03:33:06.190 --> 03:33:07.491
I wore my tie.
03:33:07.491 --> 03:33:09.741
(laughing)
03:33:11.000 --> 03:33:12.310
I was thinking
about moving this
03:33:12.310 --> 03:33:13.900
to the front of the agenda,
03:33:13.900 --> 03:33:16.650
but I wanted to make sure
you kept your tie on all day.
03:33:18.237 --> 03:33:21.898
All right, good for the day.
03:33:21.898 --> 03:33:22.731
All right.
03:33:22.731 --> 03:33:24.620
Now we will not meet in closed session.
03:33:24.620 --> 03:33:26.630
So there being no further
business, this meeting,
03:33:26.630 --> 03:33:29.823
the Public utility Commission
of Texas is hereby adjourned.