WEBVTT 00:00:05.290 --> 00:00:06.670 All right. 00:00:06.670 --> 00:00:07.853 Welcome back folks. 00:00:09.450 --> 00:00:12.480 We are at our next panel 00:00:12.480 --> 00:00:16.930 on DR ERS energy efficiency 00:00:16.930 --> 00:00:20.763 products and providers starting off with Reliant. 00:00:29.220 --> 00:00:30.070 Good afternoon. 00:00:31.350 --> 00:00:34.060 I'm Derek Mauzy with Reliant Energy 00:00:34.060 --> 00:00:36.630 and wanted to talk a little bit about what we're doing 00:00:36.630 --> 00:00:38.890 and what we've found about our experiences, 00:00:38.890 --> 00:00:40.290 what works and what doesn't. 00:00:41.130 --> 00:00:45.270 So we've got a couple of times of DR that we execute. 00:00:45.270 --> 00:00:49.370 We've got device DR in our cases specifically thermostats. 00:00:49.370 --> 00:00:52.970 Where we can control that smart thermostat. 00:00:52.970 --> 00:00:56.840 I send a signal and reduce the air conditioning usage 00:00:57.730 --> 00:00:59.570 for some period of time. 00:00:59.570 --> 00:01:04.060 It is very effective but it is limited to customers 00:01:04.060 --> 00:01:06.120 who have that kind of device 00:01:06.120 --> 00:01:08.650 and the customer do have the option and of course, 00:01:08.650 --> 00:01:10.497 want to retain that option to override it. 00:01:10.497 --> 00:01:13.010 And they can always walk over to the thermostat 00:01:13.010 --> 00:01:15.240 and turn it back down to a lower setting 00:01:15.240 --> 00:01:17.870 if it's summertime, if they wish. 00:01:17.870 --> 00:01:20.910 The other kind we use it as we call it behavioral DR. 00:01:20.910 --> 00:01:25.750 It's where we send out an email a day before 00:01:25.750 --> 00:01:29.950 and give the customer and incentive to 00:01:29.950 --> 00:01:33.273 shift or reduce their usage for some time the next day. 00:01:34.790 --> 00:01:38.770 This one depends on the customers proactively taking action 00:01:39.933 --> 00:01:43.210 and it can be used by a wider range of customers. 00:01:43.210 --> 00:01:45.571 So with the thermostat DR, 00:01:45.571 --> 00:01:47.070 you've got to have the right kind of thermostat 00:01:47.070 --> 00:01:50.550 with this behavioral DR you could do anything. 00:01:50.550 --> 00:01:55.100 You could you could shift your laundry to later in the day, 00:01:55.100 --> 00:01:58.590 you could decide that you're going to go over 00:01:58.590 --> 00:02:00.533 and raise your thermostat yourself. 00:02:01.680 --> 00:02:03.740 You could shift some other things that you're going to do 00:02:03.740 --> 00:02:04.683 to another time. 00:02:06.210 --> 00:02:10.460 This kind of of behavioral DR 00:02:10.460 --> 00:02:13.270 from kind of the rep's perspective, 00:02:13.270 --> 00:02:17.150 it does benefit from times of high market prices. 00:02:17.150 --> 00:02:20.913 That is we see that load reduction and we get that benefit. 00:02:22.220 --> 00:02:25.150 But this kind of Dr is not really eligible 00:02:25.150 --> 00:02:29.790 for the TDU programs or ERS 00:02:30.920 --> 00:02:34.473 because it's not dispatchable in a short period of time. 00:02:35.760 --> 00:02:37.650 With either kind of this, 00:02:37.650 --> 00:02:40.720 we've seen the participating customers 00:02:40.720 --> 00:02:43.810 give us load reductions of around 20 to 25% of their load 00:02:43.810 --> 00:02:48.810 or around 1KW per customer in in the summertime. 00:02:49.400 --> 00:02:52.730 And with the thermostat DR, 00:02:52.730 --> 00:02:54.510 that means you're gonna get 00:02:54.510 --> 00:02:57.650 a very high percentage of customers who do that. 00:02:57.650 --> 00:02:58.820 With the behavioral DR, 00:02:58.820 --> 00:03:01.170 again, the customer has to take the action. 00:03:01.170 --> 00:03:03.120 So there's somewhat lower participation in that. 00:03:03.120 --> 00:03:04.990 Some people will just kind of ignore the email or say, 00:03:04.990 --> 00:03:06.800 today's not the right time for me, 00:03:06.800 --> 00:03:07.900 but others will do it. 00:03:10.161 --> 00:03:11.140 An the, like, kind of on the flip side, 00:03:11.140 --> 00:03:15.490 some things that we've found are not as effective, 00:03:15.490 --> 00:03:18.480 at least in our market with regard to 00:03:18.480 --> 00:03:22.770 shifting load is detailed time of use rates. 00:03:22.770 --> 00:03:25.520 Many markets have kind of a low medium high 00:03:25.520 --> 00:03:28.340 kind of pricing for time of use. 00:03:28.340 --> 00:03:31.860 What we have seen is that customers 00:03:31.860 --> 00:03:34.463 see that high price and they back off. 00:03:35.810 --> 00:03:37.730 I was watching a focus group 00:03:37.730 --> 00:03:42.730 where we showed a time that you saw option to some folks. 00:03:43.440 --> 00:03:47.930 And I saw a peak price of 30 cents a kilowatt hour. 00:03:47.930 --> 00:03:48.763 And they're like, 00:03:48.763 --> 00:03:50.630 "Ooh, I'm gonna have to think about that." 00:03:50.630 --> 00:03:52.927 Well, if you're trying to enroll somebody and they say, 00:03:52.927 --> 00:03:54.260 "Ooh, I gotta think about that," 00:03:54.260 --> 00:03:57.230 you know that you haven't made a sale. 00:03:57.230 --> 00:04:01.750 So in our market where the goal is you, 00:04:01.750 --> 00:04:04.403 you give the customer something that they're interested in, 00:04:05.320 --> 00:04:08.600 time of use has not been a particularly successful tool 00:04:09.580 --> 00:04:12.050 at least the kind of traditional time of use rates. 00:04:12.050 --> 00:04:15.680 And really critical piece pricing where you have something, 00:04:15.680 --> 00:04:19.080 we've seen those in California and several other places 00:04:19.080 --> 00:04:20.580 where at times of critical peak, 00:04:20.580 --> 00:04:22.936 the price goes over a dollar, a kilowatt hour, 00:04:22.936 --> 00:04:27.673 those have not been well received by customers here. 00:04:29.700 --> 00:04:32.120 I thought I would show you a little bit about how 00:04:32.120 --> 00:04:35.400 the smart thermostat DR works. 00:04:35.400 --> 00:04:40.400 So this is an average of the participating customers 00:04:41.010 --> 00:04:43.970 in an event we had in 2020. 00:04:43.970 --> 00:04:48.040 So the load on here on the left axis, the KW, 00:04:48.040 --> 00:04:49.750 is actually just the air conditioning load , 00:04:49.750 --> 00:04:52.610 is not the entire house load. 00:04:52.610 --> 00:04:54.430 The entire house load will probably 00:04:54.430 --> 00:04:57.083 be closer to four or five KW at peak. 00:04:58.850 --> 00:05:02.450 But what you see is we started this event 00:05:02.450 --> 00:05:05.980 at three o'clock in the afternoon, 15:00, 00:05:05.980 --> 00:05:07.570 pretty strong drop-off. 00:05:07.570 --> 00:05:11.900 And then as the event went on, the drop-off decreased a bit, 00:05:11.900 --> 00:05:14.120 but it was still a solid reduction 00:05:14.120 --> 00:05:16.970 throughout that period of time we control the thermostat. 00:05:17.820 --> 00:05:20.760 When the event ends and the thermostats are kind of 00:05:20.760 --> 00:05:22.720 allowed to go back to their original set point, 00:05:22.720 --> 00:05:24.750 then you see a kind of a kick up in usage 00:05:24.750 --> 00:05:26.943 as the house works to cool itself down. 00:05:27.930 --> 00:05:30.460 The other thing I just wanted to point out was 00:05:30.460 --> 00:05:34.520 the bottom chart shows kind of the participants 00:05:34.520 --> 00:05:36.610 interval by interval during that event. 00:05:36.610 --> 00:05:39.630 So we started off with 96% of customers 00:05:39.630 --> 00:05:42.800 were participating in this event, the other 4%, 00:05:42.800 --> 00:05:45.000 there was probably a internet connection 00:05:45.000 --> 00:05:45.833 or something like that, 00:05:45.833 --> 00:05:48.580 just a communication problem with the thermostat. 00:05:48.580 --> 00:05:51.269 And then as the event wore on, 00:05:51.269 --> 00:05:53.090 we had people dropping out, 00:05:53.090 --> 00:05:54.250 but somebody would walk over 00:05:54.250 --> 00:05:55.900 and change the thermostat back 00:05:57.808 --> 00:05:59.383 to a more comfortable setting. 00:06:00.548 --> 00:06:03.920 So main point here is that thermostat DR 00:06:03.920 --> 00:06:05.583 can't really be used forever. 00:06:07.735 --> 00:06:09.070 It's a limited duration. 00:06:09.070 --> 00:06:11.873 It works very well, but for a limited period of time. 00:06:14.200 --> 00:06:17.870 So in this admittedly crude drawing 00:06:17.870 --> 00:06:21.320 wanted to just kind of show kind of overlay 00:06:21.320 --> 00:06:26.320 that load reduction with some illustrative market prices. 00:06:26.640 --> 00:06:28.677 So in that kind of green scenario, 00:06:28.677 --> 00:06:33.020 if you had wholesale prices that were kind of low 00:06:33.020 --> 00:06:36.320 and then went fairly high for say a couple of hours, 00:06:36.320 --> 00:06:37.960 and then came back down, 00:06:37.960 --> 00:06:42.810 that lends itself very well to to this kind of DR event. 00:06:42.810 --> 00:06:46.346 This is the kind of situation where 00:06:46.346 --> 00:06:51.346 the market signal and the available resource 00:06:52.950 --> 00:06:55.000 kind of lines up pretty well. 00:06:55.000 --> 00:06:58.740 What is not as effective for incentivizing DR 00:06:58.740 --> 00:07:02.940 is if the high price last for a really long time 00:07:03.910 --> 00:07:05.780 because at the end of the event, 00:07:05.780 --> 00:07:08.000 we're gonna start using more power again. 00:07:08.000 --> 00:07:10.600 Well, okay, that you've just shifted power 00:07:10.600 --> 00:07:13.970 from a high price interval to another high price interval. 00:07:13.970 --> 00:07:17.740 So that's just one of the considerations 00:07:17.740 --> 00:07:19.880 that goes into kind of the market structure 00:07:19.880 --> 00:07:24.292 or what incentivizes REP behavior 00:07:24.292 --> 00:07:27.113 or any DR Manufacturer's behavior. 00:07:29.286 --> 00:07:31.600 What is that magic amount of time? 00:07:31.600 --> 00:07:33.180 In terms of your focus groups, 00:07:33.180 --> 00:07:35.786 in terms of your practical experience, 00:07:35.786 --> 00:07:38.630 where do you see the most effect 00:07:39.804 --> 00:07:42.260 of price responsiveness, 00:07:42.260 --> 00:07:44.870 and then when does it start tailing off? 00:07:44.870 --> 00:07:48.790 So it seems to us that it starts tailing off 00:07:48.790 --> 00:07:51.093 around two hours into the end of the event. 00:07:52.840 --> 00:07:54.650 And in my experience, 00:07:54.650 --> 00:07:58.200 if you try to carry on thermostat DR event 00:07:58.200 --> 00:07:59.810 more than four hours, 00:07:59.810 --> 00:08:04.133 you're really not getting anything in that last part. 00:08:06.060 --> 00:08:08.460 And it's not necessarily just that consumers 00:08:08.460 --> 00:08:11.660 are going to turn down the thermostat. 00:08:11.660 --> 00:08:14.050 They could leave the thermostat at the higher setting, 00:08:14.050 --> 00:08:16.140 but if it's hot outside and the temperature 00:08:16.140 --> 00:08:16.990 in the house gets up, 00:08:16.990 --> 00:08:19.630 then the air conditioner is gonna kick on again. 00:08:19.630 --> 00:08:22.500 It may not run at quite as high a load factor 00:08:22.500 --> 00:08:24.410 if you've got the thermostat set higher, 00:08:24.410 --> 00:08:27.113 but eventually that air conditioner is gonna run. 00:08:28.360 --> 00:08:30.990 Which of these price curves is the most indicative 00:08:30.990 --> 00:08:32.620 of our current market, 00:08:32.620 --> 00:08:34.520 or is it just circumstances dependent? 00:08:36.871 --> 00:08:38.706 In the in the summertime, 00:08:38.706 --> 00:08:40.960 the green one is reasonably close. 00:08:40.960 --> 00:08:42.340 Okay, so that's pretty good. 00:08:42.340 --> 00:08:45.620 Current market structure and performance 00:08:46.787 --> 00:08:49.570 shows a price signal that correlates well 00:08:49.570 --> 00:08:51.140 with effective DR. 00:08:51.140 --> 00:08:52.031 Yes. 00:08:52.031 --> 00:08:52.864 Okay. 00:08:52.864 --> 00:08:55.030 I will say that kind of before ORDC came along, 00:08:55.030 --> 00:08:58.430 that what you saw was extremely spiky prices 00:08:58.430 --> 00:08:59.980 that were very hard to predict. 00:09:01.180 --> 00:09:03.400 And they might last for only 15 minutes 00:09:03.400 --> 00:09:04.600 or something like that, 00:09:04.600 --> 00:09:07.180 or maybe they lasted four for 30, 00:09:07.180 --> 00:09:10.390 but still it was a quick up and down. 00:09:10.390 --> 00:09:12.770 And if you had not an advanced kind of predicted 00:09:12.770 --> 00:09:14.623 exactly when that was gonna happen- 00:09:15.460 --> 00:09:17.670 Presumably, effective DR would have an impact 00:09:17.670 --> 00:09:18.503 on the price. 00:09:20.120 --> 00:09:20.953 Yeah. 00:09:25.358 --> 00:09:26.191 Hopefully. 00:09:26.191 --> 00:09:27.353 Yes, it should. 00:09:29.458 --> 00:09:32.570 The amount of DR on the system right now, 00:09:32.570 --> 00:09:35.743 or at least of I'll say residential DR, 00:09:35.743 --> 00:09:40.150 is not enough that it has made a huge difference 00:09:40.150 --> 00:09:43.793 in where prices go, but it could down the road. 00:09:45.900 --> 00:09:48.830 So if you can go back to that prior slide real quick 00:09:52.180 --> 00:09:55.040 in orange, your statement about stretching high prices 00:09:55.040 --> 00:09:57.663 over several hours is not useful for most DR, 00:10:00.140 --> 00:10:03.060 is we're looking at market design changes 00:10:03.060 --> 00:10:07.700 in this forum and especially specifically ORDC, 00:10:07.700 --> 00:10:10.000 and there's been a lot of stakeholder comments 00:10:10.960 --> 00:10:13.130 that have recommended stretching out the curve 00:10:13.130 --> 00:10:14.630 and lowering the price curve, 00:10:14.630 --> 00:10:18.083 but essentially producing more hours of higher prices. 00:10:22.244 --> 00:10:24.760 How does that coincide with your statement? 00:10:24.760 --> 00:10:27.560 So if that happens, 00:10:27.560 --> 00:10:31.790 it does not help the economics 00:10:31.790 --> 00:10:34.973 of implementing a residential DR. 00:10:37.440 --> 00:10:41.990 Or what would tend to happen then is that 00:10:41.990 --> 00:10:45.650 it would only make sense for someone who's got 00:10:45.650 --> 00:10:48.240 a resource that only lasts two or three hours, 00:10:48.240 --> 00:10:51.300 they would have to wait until halfway through 00:10:51.300 --> 00:10:52.870 what they think is the high price period, 00:10:52.870 --> 00:10:55.130 and try to catch the tail end of it. 00:10:55.130 --> 00:10:58.780 Because what's happening is that we aren't completely 00:10:58.780 --> 00:10:59.613 eliminating load, 00:10:59.613 --> 00:11:02.550 we're really shifting it to a later time. 00:11:02.550 --> 00:11:05.170 You're saying, okay, I'll let the house get hotter now, 00:11:05.170 --> 00:11:07.874 but I'm gonna to want it cooler later. 00:11:07.874 --> 00:11:10.220 And so 00:11:11.996 --> 00:11:15.280 what a DR executer wants to do is 00:11:16.590 --> 00:11:20.020 I wanna lower the load when prices are high 00:11:20.020 --> 00:11:22.033 and let it go up when prices are low. 00:11:23.920 --> 00:11:26.123 If prices stay high for a really long time, 00:11:28.080 --> 00:11:31.160 then there's not that market price, 00:11:31.160 --> 00:11:34.653 it's not a useful market price signal for us. 00:11:36.010 --> 00:11:37.250 When you also, I mean, 00:11:37.250 --> 00:11:40.083 the DR doesn't exist in a vacuum, right? 00:11:40.083 --> 00:11:42.540 Like it should be competing with other resources. 00:11:42.540 --> 00:11:47.343 So even a elongated flattened ORDC, 00:11:48.462 --> 00:11:50.030 would just mean that it's competing 00:11:50.030 --> 00:11:54.003 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. 00:11:57.663 --> 00:11:59.770 Presumably what you would expect would be 00:11:59.770 --> 00:12:04.360 that generation resources or other resources 00:12:04.360 --> 00:12:07.775 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 00:12:09.970 --> 00:12:14.453 of that high price period for DR. 00:12:16.610 --> 00:12:20.490 If we caught the front end of that price period 00:12:20.490 --> 00:12:22.690 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 00:12:31.970 --> 00:12:34.840 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 00:13:49.470 --> 00:13:51.070 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.