WEBVTT
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This meeting of the
Public Utility Commission
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of Texas will come to
order to consider matters
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that have been duly posted
with the Secretary of State
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of Texas for September 23, 2021.
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For the record, my name is Peter Lake
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and with me today are
Will McAdams, Lori Cobos,
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and Jimmy Glotfelty.
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Before we dive in,
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I think Jimmy has an
introduction he'd like to make.
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Thank you, Mr. Chairman.
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For everybody in the room
and those online I'm filling
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out my staff and I wanted
to introduce VA Stevens,
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who will be my chief of staff.
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And she's been around these parts,
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not necessarily the
PUC, for a long time.
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But she's been at the
Capitol and the TNRCC
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and then with me to
streamline permitting
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at the federal level.
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And obviously, if you
talk to her, you talk to me
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so welcome her.
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Thank you.
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(participants applauding)
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Yes, sir.
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All right, Mr. Journeay,
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could you please walk us
through today's Consent Agenda?
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Good morning, Commissioner.
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By individual ballot, the
following items were placed
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on your Consent Agenda.
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Six, nine, and 25.
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That's all.
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Is there a motion to approve
the items just described
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by Mr. Journeay?
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So moved.
Second.
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All in favor, say aye.
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Aye.
Aye.
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Motion passes.
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At this time, we will
open for public comment.
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All comments related
to a specific agenda item
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will be heard when
that item is taken up.
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This is for general
comments from the public only.
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Speakers will be
limited to three minutes.
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Mr. Journeay, do we
have anyone signed up
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from the public to speak?
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No, sir.
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No one's signed up.
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Thank you.
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All right, we will not be
taking up item number 27.
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That brings us to our normal agenda.
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I don't think I have
anything on item one.
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That'll take us to item number two.
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Please lay that out
for us, Mr. Journeay.
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Item two is docket 51215.
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It's the application of
Entergy for a CCN amendment
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for a solar facility in Liberty County.
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The PFD was issued on July 19th.
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Exceptions and replies were filed.
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The ALJ filed a memo on
September 14th, making no changes.
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I have a memo with
proposed changes to the PFD
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and Commissioner Cobos has
recused herself from this matter.
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Thank you, sir.
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I know this is a big project
and would be a good
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diversification of generating
resources for that area.
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But there seems to be a lot of problems
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with the application
and last minute additional
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of financial promises
without any clarity
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on mechanisms to deliver that.
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Thoughts.
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I agree.
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You said the words exactly.
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Financial guarantees
that don't have any backup.
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I think they're a tax equity partner
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that we don't know who they are.
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There are a whole host of
things that I think it's hard
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to make a decision on and
prove beyond a reasonable doubt
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that this is in the public interest.
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Well said on both counts.
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I agree with all of it.
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I appreciate OPUC's
intervening in this
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and their concern.
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We're not at that point yet
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and we'll trust that they'll be there
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to ensure the project costs are in line
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with the public interest.
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Is there a motion to adopt
the proposal for a decision
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with a modification or the parties
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to jointly file this with exhibits,
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indicating which exhibits are
confidential and declassified,
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which was another issue?
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So moved.
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Excuse me, sir.
Sure.
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Your motion
was to adopt the PFD.
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Approve the PFD-
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As modified.
As modified.
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Okay.
Is that to,
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I think we want to agree with it.
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We wanna remand it.
Yeah, we wanna remand it.
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I wanna remand it.
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Oh, okay, I apologize.
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Remand to remand the
docket to OPDM or so.
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So it would fill out the record
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to ensure that we have more information
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about the financial dealings
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about the proposed solar facility
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and the financial
understanding of the other parties
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before it comes back to us.
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I withdrawal my motion.
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All right.
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We'll take Jimmy's motion
commentary as a motion.
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You second that?
Second.
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All right, we've got a
motion and a second
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to remand the solar
for more clarification.
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All in favor, say aye.
Aye.
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Motion passes.
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Item number three, Mr. Journeay.
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Item three is the docket 51556.
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It's the application
of Greenville Electric
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to change wholesale transmission rates.
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Proposed order was filed on August 2nd.
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I have a memo with
proposed changes to that order.
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Seems to be a
reasonable settlement.
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Any thoughts on approving
that proposed order?
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Increases rates by the 900,000.
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Staff, parties agreed.
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I'm good with it.
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And would move to, yeah.
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I'm good.
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I'm good with this one.
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And would move to adopt
the proposed order, as modified.
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Is there a second?
Second.
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All in favor, say aye.
Aye.
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Motion passes.
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Item number four, please sir.
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Item four is docket 51959.
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It's the application of TNMP
to amend their DCRF factor.
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Proposed order was
filed on September 3rd.
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The ALJ filed a correction
memo on September 23rd.
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This is another settlement.
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Any thoughts, concerns?
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Yeah, I mean pending
Commissioner Cobos
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but I just wanted to make
sure what we have here
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conforms to previous
precedent that we establish
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our rate case expenses.
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That is the case, even
with the revised filing by ALJ.
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Or it's not the case, even
with the revised filing by ALJ.
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It's not the case-
That's what I wanna confirm
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and that's what I wanna ask for.
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I believe the Commission
should modify this order,
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as it's presented,
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to recover only the rate case expenses
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for which there's proper evidence
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and accordingly modify
the rate case expenses rider.
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We sort of crossed that
bridge in a previous proceeding
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on Cherryland and I just wanna
make sure we're consistent
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moving forward.
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Well, more than one,
that's a good standard to set.
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I agree.
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Based on my prior experience,
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there have been settlement
agreements reached
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where trailing expenses are
capped at a certain amount
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to take in account
potential rate case expenses
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that would occur at
the tail end of the case
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to settle the case.
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However, I don't
disagree with the approach
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that's been established
by the Commission
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to just cut it off at a certain point
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and let the parties recover
their rate case expenses
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in a future proceeding.
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So I agree with the approach
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and would support approving the order
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with the modifications
regarding the rate case expenses
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and the changes proposed
by TNMP and their exceptions.
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Agreed.
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Can we consider that a motion?
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You can consider it amotion.
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Is there a second?
I second.
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All in favor, say aye.
Aye.
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Aye.
Aye.
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Motion passes.
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Item number five please, sir.
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Item five is docket 51972.
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It's an agreed
NLV-related to Centerpoint.
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Second revised proposed order
was filed on September 15th.
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The ALJ filed a memo on September 16th
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accepting changes
proposed by Centerpoint.
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Got another settlement.
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Thoughts, concerns?
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I hate to open,
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I appreciate when
parties make the effort
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to try to settle.
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I think that's in the best interest
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of all parties involved.
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I struggle with this one a little bit
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because SAIDI and
SAIFI are so important,
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especially in regions
along the Gulf Coast.
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Especially when we don't really have
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a full record of when every
customer was reconnected.
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Especially when I read the filings,
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I'm not sure that the
request for information
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has been totally fulfilled.
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And I think that
these are really, really
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important treatise.
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SAIDI, SAiFI, how we make
sure that these individual Texans
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have their electricity
and when it's cut off
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and when it's not cut off are really,
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really important issues.
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I know Centerpoint's gonna come back
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with the report here in a few months
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documenting a lot of
vegetation management things,
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which I'm really, really
eager to see, and other things.
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But I don't know, this one,
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it kind of scares me that
it's not in the best interest
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right now and we need more information
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in order to make a
more informed decision.
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Yeah, and I would
dovetail on that.
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We tried to establish again,
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since the Commission was formed,
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with its current composition,
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we're trying to be consistent in asking
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for remediation plans so that
we can gauge success here.
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And again, this is in a hurricane,
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it's in a vegetation-prone area of Texas
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so it keeps happening.
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So we need to see, what are you gonna do
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to ultimately fix this?
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Fines are fine but that's
not how I gauge success.
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I gauge success as I
don't ever wanna hear
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about this feeder again.
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And so-
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And the feeder is
not in a rural area.
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It's in a very populated area
so it does impact customers,
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a significant amount of customers.
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And I agree with your statement
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on the administrative penalties
in that a $10,000 penalty,
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sometimes these penalties are basically
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just the cost of doing
business and folks will pay out
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and keep going.
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But we wanna see remediation,
correction, mitigation,
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so that issues are actually
addressed and fixed.
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I think the one other
thing that I would add
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is it is clear, it is a
hurricane-prone area,
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high winds.
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I think they, CenterPoint,
has done a good job
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in a lot of their system.
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If there are problem lines like this,
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we have to focus on these problem lines.
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As a business, you
can't let one problem line
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skew your SAIDI and
SAIFI of your whole system.
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You can't let that happen, guys.
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And I just, I recognize
that they would be under
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or they would be in compliance with most
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of their SAIDI and SAIFI if
it weren't for these storms
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and that's great.
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But we've gotta get these
small ones cleared up
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because it means customers.
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Customers are inconvenienced.
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Or at least get us the plans
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so that we can gauge the
costs on the system, or whatever.
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Just give us a plan.
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And right now that's,
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I think we're all singing
the same sheet of music.
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That's what we're missing right now.
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With respect to
the other violation
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and the 1102 customers and disconnection
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of those customers,
00:11:55.940 --> 00:11:58.940
the company had agreed to a
$200,000 administrative penalty
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and also contributing
to a charitable cause
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for low-income customers
so I am comfortable
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with that path forward.
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It is the SAIDI and SAIFI violations
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that I think are the issue here,
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where we don't have enough information.
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Agreed.
00:12:12.957 --> 00:12:15.303
It sounds like there might
be a motion to remand.
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I move to remand it
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for more information on the-
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Remediation plan.
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The remediation plan.
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Is there a second?
Second.
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All in favor, say aye.
Aye.
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Aye, motion passes.
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And I appreciate very much the focus
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that all of y'all have
put on this issue.
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This is a problem we can solve
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before it becomes a problem.
00:12:40.570 --> 00:12:43.193
Item number six was consented.
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If item number seven and eight,
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are y'all gonna take those up?
00:12:48.120 --> 00:12:50.270
I would just say a
couple of words on those
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and explain the path forward.
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I'll excuse myself.
00:12:53.900 --> 00:12:55.000
It'll be quick, sir.
00:12:56.370 --> 00:12:57.790
I was recused.
00:12:57.790 --> 00:13:02.790
So Chair takes up item 5232,
00:13:02.970 --> 00:13:05.043
can I take these up
together- Yes sir.
00:13:05.043 --> 00:13:08.603
Okay, I'm gonna take
up 52321 and 52322.
00:13:08.603 --> 00:13:13.220
And just for clarity for
stakeholders, participants,
00:13:13.220 --> 00:13:15.920
and the broader
public, on securitization,
00:13:15.920 --> 00:13:20.060
we now have a partial settlement filed
00:13:20.060 --> 00:13:22.523
in the docket on 52322.
00:13:25.270 --> 00:13:28.120
We also have the bones
of what securitization
00:13:28.120 --> 00:13:29.713
might look like for 52321.
00:13:32.210 --> 00:13:34.190
I believe a bit,
00:13:34.190 --> 00:13:38.060
and again, that partial
settlement came in this week.
00:13:38.060 --> 00:13:41.050
It seems prudent to
have a little bit more time
00:13:41.050 --> 00:13:46.050
for staff to address the
fine points and issues
00:13:46.890 --> 00:13:49.860
that were not covered,
for the purposes of 52322
00:13:50.960 --> 00:13:55.320
in the partial settlement
outline that was filed.
00:13:55.320 --> 00:13:57.193
And also, for the purposes of 52321,
00:13:58.810 --> 00:14:03.810
the $800 million
securitization, we also have
00:14:03.940 --> 00:14:08.290
some outstanding
refinements that could be made
00:14:08.290 --> 00:14:11.210
before a final order could be presented
00:14:11.210 --> 00:14:12.340
for our consideration.
00:14:12.340 --> 00:14:15.670
So with that, we have
posted for a open meeting
00:14:15.670 --> 00:14:18.470
next week, September 30th.
Yes, sir.
00:14:18.470 --> 00:14:21.983
And we could take
this up at that time.
00:14:23.000 --> 00:14:26.830
In addition, sir, we
were discussing posting
00:14:26.830 --> 00:14:29.340
additional open meetings
on October 5th and 6th,
00:14:29.340 --> 00:14:32.032
just as a-
Placeholders for, yes sir.
00:14:32.032 --> 00:14:32.865
In case they're needed.
00:14:32.865 --> 00:14:35.600
Yeah, we will not let
the timeline slip on this,
00:14:35.600 --> 00:14:37.040
that's the ultimate goal.
00:14:37.040 --> 00:14:38.380
We wanna make sure the legislature
00:14:38.380 --> 00:14:40.630
and parties understand that.
00:14:40.630 --> 00:14:43.313
We just wanna get
this right at the first cut.
00:14:44.630 --> 00:14:47.510
Absolutely and I support adding
00:14:47.510 --> 00:14:49.950
the extra open meetings to give staff
00:14:49.950 --> 00:14:53.680
more time to evaluate the bare bones,
00:14:53.680 --> 00:14:55.330
as Commissioner
McAdams has talked about,
00:14:55.330 --> 00:14:58.840
in 52321, Subchapter
M, securitization case
00:14:58.840 --> 00:15:00.720
and make sure that we
have everything we need
00:15:00.720 --> 00:15:04.500
to make a decision on that case.
00:15:04.500 --> 00:15:07.873
And then with respect
to 52322, Subchapter N,
00:15:09.494 --> 00:15:11.730
as you noted, we do
have a partial settlement
00:15:11.730 --> 00:15:13.690
and we do need to give staff more time
00:15:13.690 --> 00:15:16.020
to evaluate the settlement.
00:15:16.020 --> 00:15:18.130
But we also need a weight
on the supporting testimony
00:15:18.130 --> 00:15:19.780
that supports the
settlement so that we have
00:15:19.780 --> 00:15:22.040
more information on the settlement
00:15:22.040 --> 00:15:24.740
to allow us to make a
well-informed, holistic,
00:15:24.740 --> 00:15:25.713
robust decision.
00:15:27.664 --> 00:15:28.497
Yes, sir.
I would say,
00:15:28.497 --> 00:15:29.492
I'd like more time to
understand it as well,
00:15:29.492 --> 00:15:30.730
not just staff.
00:15:30.730 --> 00:15:32.900
It's complicated, it's confusing-
00:15:32.900 --> 00:15:34.883
You can just say that,
I'll take more time too.
00:15:36.400 --> 00:15:39.260
We gotta get it right
and it's important.
00:15:39.260 --> 00:15:41.810
We have to do it quickly, obviously,
00:15:41.810 --> 00:15:43.730
for the good of the market.
00:15:43.730 --> 00:15:46.240
But we gotta understand
what we're voting on.
00:15:46.240 --> 00:15:47.190
It would be nice.
00:15:48.740 --> 00:15:50.240
And really, I mean,
I do wanna say
00:15:50.240 --> 00:15:52.640
I appreciate the parties
working towards a settlement.
00:15:52.640 --> 00:15:54.140
We asked them to do that
00:15:54.140 --> 00:15:56.080
and to all of you
that were part of that,
00:15:56.080 --> 00:15:56.913
it's important.
00:15:58.290 --> 00:16:00.760
We appreciate you heeding that call
00:16:00.760 --> 00:16:02.923
and working towards the settlement.
00:16:03.810 --> 00:16:06.170
I would just like
to say that one thing
00:16:06.170 --> 00:16:08.430
that has disrupted our timeline
00:16:09.491 --> 00:16:13.070
is it is taking more time
than anyone might expect
00:16:13.070 --> 00:16:16.648
to figure out what issues
have not been settled.
00:16:16.648 --> 00:16:20.750
And that's why, as parties
file additional comments,
00:16:20.750 --> 00:16:23.420
again, trying to solve those issues
00:16:23.420 --> 00:16:25.440
that are not addressed
in that partial settlement.
00:16:25.440 --> 00:16:28.220
I get it, those were
the big ticket items
00:16:28.220 --> 00:16:30.490
but there are functional areas
that we've gotta make sure
00:16:30.490 --> 00:16:31.720
we get right here.
Yes, sir.
00:16:31.720 --> 00:16:32.830
I just baited the water.
00:16:32.830 --> 00:16:35.071
I don't think I'm gonna
take my hook out.
00:16:35.071 --> 00:16:35.904
Yeah, I just added some to it.
00:16:35.904 --> 00:16:38.890
So if everybody's in agreement,
00:16:38.890 --> 00:16:42.170
we'll set aside items
number seven and eight
00:16:42.170 --> 00:16:43.640
until next week.
00:16:43.640 --> 00:16:44.670
Agreed.
Agreed.
00:16:44.670 --> 00:16:46.697
Mr. Chairman, I'll
hand it back to you.
00:16:57.717 --> 00:17:00.260
All I heard was Journeay
talking about baiting the water.
00:17:00.260 --> 00:17:02.893
That's enough for concern.
That's his favorite pastime.
00:17:03.850 --> 00:17:05.247
You got your reel with you?
00:17:11.060 --> 00:17:11.893
All right.
00:17:11.893 --> 00:17:15.653
That brings us to item
nine, which was consented.
00:17:17.266 --> 00:17:18.990
And have y'all taken up 10
00:17:18.990 --> 00:17:21.060
or you're not gonna take up 10?
00:17:21.060 --> 00:17:22.450
We did not take it up.
We did not.
00:17:22.450 --> 00:17:23.860
We are not gonna take that up.
00:17:23.860 --> 00:17:25.043
Okay.
00:17:25.043 --> 00:17:29.310
Item 11 and 12, I don't
have anything on those.
00:17:29.310 --> 00:17:30.330
Do y'all?
00:17:30.330 --> 00:17:31.413
No sir.
Nope.
00:17:32.906 --> 00:17:37.120
That brings us to 13,
regarding market performance
00:17:37.120 --> 00:17:37.953
this summer.
00:17:37.953 --> 00:17:40.540
I filed a memo on this
earlier this summer,
00:17:40.540 --> 00:17:42.853
related to generator outage reporting.
00:17:46.600 --> 00:17:48.060
Jimmy hadn't joined us at that point
00:17:48.060 --> 00:17:50.800
but we directed ERCOT to make an outage
00:17:50.800 --> 00:17:53.770
and dereg reports
available to the public
00:17:53.770 --> 00:17:57.720
within three days, instead
of the standard 60 days,
00:17:57.720 --> 00:18:01.750
due to issues related to the June event.
00:18:01.750 --> 00:18:04.830
That order expires on September 30th
00:18:04.830 --> 00:18:08.334
and ERCOT is currently
working through NPRRs
00:18:08.334 --> 00:18:12.073
to fulfill the order that we issued.
00:18:13.100 --> 00:18:17.243
But those won't be
completed by September 30th.
00:18:18.080 --> 00:18:22.340
So I would proposed
extending that June order
00:18:22.340 --> 00:18:24.390
to ensure that the public continues
00:18:24.390 --> 00:18:25.980
to have the same transparency
00:18:27.290 --> 00:18:30.510
on generator outages
and deregs that have
00:18:30.510 --> 00:18:31.653
so far this summer.
00:18:32.730 --> 00:18:35.490
I think that transparency
is important to the public.
00:18:35.490 --> 00:18:39.480
And while we have come
through the summer months,
00:18:39.480 --> 00:18:41.430
as y'all know, the fall shoulder months
00:18:42.540 --> 00:18:44.490
still have their own unique challenges.
00:18:44.490 --> 00:18:49.450
And I know the public will still have
00:18:49.450 --> 00:18:51.963
a keen interest in that transparency.
00:18:54.140 --> 00:18:56.633
I'll open it up for thoughts
or comments on that.
00:18:58.792 --> 00:19:00.621
Go ahead.
Thank you, Chairman.
00:19:00.621 --> 00:19:02.980
I think that's a great point.
00:19:02.980 --> 00:19:04.786
With respect to the report,
00:19:04.786 --> 00:19:07.440
as we enter into the shoulder months,
00:19:07.440 --> 00:19:11.180
there will be generation
down to get, maintain
00:19:11.180 --> 00:19:13.020
for the winter, to go through
the maintenance outages.
00:19:13.020 --> 00:19:15.570
So in the report, would that include
00:19:16.720 --> 00:19:21.640
just D rates and plants
that are forced out or both?
00:19:23.610 --> 00:19:26.620
It would be the exact
same order as in June
00:19:26.620 --> 00:19:29.967
of just forced outages and deregs.
00:19:29.967 --> 00:19:31.420
It would just change the timeline.
00:19:31.420 --> 00:19:35.490
I think ERCOT's got, they
already have a pretty robust
00:19:35.490 --> 00:19:38.670
planned outage program.
00:19:38.670 --> 00:19:39.970
We've made changes to that
00:19:41.571 --> 00:19:42.780
and ERCOT has not, since the winter,
00:19:42.780 --> 00:19:46.170
ERCOT has more control
over those planned outages
00:19:46.170 --> 00:19:49.360
and adjusting those
to ensure reliability.
00:19:49.360 --> 00:19:52.550
So this would just be
focused on forced outages,
00:19:52.550 --> 00:19:55.100
simply changing the dates
00:19:55.100 --> 00:19:59.493
from having that order
expire on September 30th.
00:20:01.560 --> 00:20:06.210
And this would just make
that same exact order
00:20:06.210 --> 00:20:09.860
effective from October 1st
through May 31st of 2022.
00:20:12.930 --> 00:20:14.800
Just to correct, Chairman,
00:20:14.800 --> 00:20:17.680
the order does speak to
maintenance level outages.
00:20:17.680 --> 00:20:18.700
Oh, it does, as well.
00:20:18.700 --> 00:20:20.210
Oh, well, there you go.
00:20:20.210 --> 00:20:21.043
Sorry.
00:20:21.043 --> 00:20:22.520
I'm sorry, it speaks to?
00:20:22.520 --> 00:20:26.133
Maintenance level
outage information.
00:20:27.050 --> 00:20:32.050
I think this is a
good vote, a good yes.
00:20:34.515 --> 00:20:36.460
It's pretty big market information,
00:20:36.460 --> 00:20:38.240
especially when we're
so short on capacity.
00:20:38.240 --> 00:20:40.680
And I think it's important
to get it out there quickly,
00:20:40.680 --> 00:20:43.960
as opposed to 60 days later.
00:20:43.960 --> 00:20:47.130
A lot of things can happen in
60 days with generating units
00:20:47.130 --> 00:20:50.290
and we oughta make sure that the public
00:20:50.290 --> 00:20:52.870
and the market knows what's
happening as quick as possible.
00:20:52.870 --> 00:20:55.300
I applaud ERCOT for
trying to make the changes
00:20:55.300 --> 00:20:57.170
as quick as they can and this order
00:20:57.170 --> 00:21:00.280
is kind of a stop-gap
measure to make sure
00:21:00.280 --> 00:21:04.494
that we have a continuity of
service in what we're doing.
00:21:04.494 --> 00:21:05.640
Indeed.
00:21:05.640 --> 00:21:08.240
To dovetail on that, I
believe it is consistent,
00:21:08.240 --> 00:21:11.770
this approach as a stop-gap, a bridge,
00:21:11.770 --> 00:21:15.340
to what may be considered market design,
00:21:15.340 --> 00:21:17.770
as we have that conversation in October.
00:21:17.770 --> 00:21:21.310
So this is widely
considered by the public,
00:21:21.310 --> 00:21:24.240
by policymakers to be, as of right now,
00:21:24.240 --> 00:21:25.330
a successful policy.
00:21:25.330 --> 00:21:27.110
Stakeholders will be able to,
00:21:27.110 --> 00:21:28.980
once we outline a blueprint.
00:21:28.980 --> 00:21:30.430
And if it does touch on this,
00:21:30.430 --> 00:21:33.010
we'll be able to speak
to an overarching policy
00:21:33.010 --> 00:21:34.160
moving forward.
00:21:34.160 --> 00:21:36.710
But for the time being, as we
again bridge through shoulder,
00:21:36.710 --> 00:21:40.313
which is always tense, at
least from my standpoint,
00:21:41.680 --> 00:21:44.160
this helps in terms of transparency
00:21:44.160 --> 00:21:46.670
and pressure on those resources again
00:21:46.670 --> 00:21:48.290
and shareholders to do the right thing.
00:21:48.290 --> 00:21:50.717
So I would support it.
00:21:50.717 --> 00:21:54.310
And yes, I absolutely support
the continued transparency
00:21:54.310 --> 00:21:55.143
going forward.
00:21:55.143 --> 00:21:56.730
I think it is important for the public,
00:21:56.730 --> 00:21:58.700
for the policymakers, for us, as we work
00:21:58.700 --> 00:21:59.990
through market design.
00:21:59.990 --> 00:22:03.253
And I do believe it is
important that ERCOT.
00:22:04.665 --> 00:22:06.710
I'm glad to hear that
ERCOT is introduced NPRRs
00:22:06.710 --> 00:22:09.060
to set a more permanent framework
00:22:09.060 --> 00:22:11.210
to provide that
transparency to the public.
00:22:15.170 --> 00:22:17.333
All right, thank you
all for the comments.
00:22:18.268 --> 00:22:21.630
At this point, I'd entertain a motion
00:22:21.630 --> 00:22:22.820
to issue a new order.
00:22:22.820 --> 00:22:23.860
ERCOT making the order
00:22:23.860 --> 00:22:25.470
in paragraphs one, two, and four
00:22:25.470 --> 00:22:27.563
of our June 30th order.
00:22:28.593 --> 00:22:31.620
And this docket effective
from October 1, 2021
00:22:31.620 --> 00:22:35.110
through May 31, 2022.
So moved.
00:22:35.110 --> 00:22:37.250
Second.
All in favor, say aye.
00:22:37.250 --> 00:22:38.160
Aye.
Aye.
00:22:38.160 --> 00:22:39.053
Motion passes.
00:22:41.050 --> 00:22:44.100
That will bring us to item number 14,
00:22:44.100 --> 00:22:46.630
regarding the Texas
Entergy Reliability Council
00:22:47.470 --> 00:22:48.773
and its membership.
00:22:49.970 --> 00:22:51.700
I know our executive
director filed a memo
00:22:51.700 --> 00:22:53.200
on this project.
00:22:53.200 --> 00:22:54.640
Mr. Gleeson, would you and your staff
00:22:54.640 --> 00:22:57.180
like to provide some
background on your memo?
00:22:57.180 --> 00:23:00.330
Sure, thank you,
Mr. Chairman, Commissioners.
00:23:00.330 --> 00:23:03.250
So we, in this project,
filed instructions
00:23:03.250 --> 00:23:06.740
for those interested in
being a part of TURK.
00:23:06.740 --> 00:23:09.640
To apply, what we're
asking for is a letter of intent,
00:23:09.640 --> 00:23:12.810
for a resume, and for a
letter of recommendation.
00:23:12.810 --> 00:23:16.270
This closely mirrors what
we do in our RFP process
00:23:16.270 --> 00:23:19.530
and that's the example
we use to set this.
00:23:19.530 --> 00:23:22.210
The only thing I would add is we want
00:23:22.210 --> 00:23:23.760
to work on an expedited timeline
00:23:23.760 --> 00:23:25.880
so I'd ask if they're interested,
00:23:25.880 --> 00:23:29.740
file their application by next Friday.
00:23:29.740 --> 00:23:33.100
And my goal would be to have a selection
00:23:33.100 --> 00:23:34.670
for all of the eight spots,
00:23:34.670 --> 00:23:36.723
by the end of the following week.
00:23:37.710 --> 00:23:39.120
Like so many
things around here,
00:23:39.120 --> 00:23:41.120
a very aggressive timeline.
Yes, sir.
00:23:42.653 --> 00:23:46.170
Appreciate the expediency
00:23:46.170 --> 00:23:48.170
with which you're undertaking this.
00:23:48.170 --> 00:23:50.683
Any comments, questions for Mr. Gleeson?
00:23:51.600 --> 00:23:52.433
No, sir.
00:23:54.100 --> 00:23:54.933
No, sir.
00:23:56.010 --> 00:23:56.843
All right.
00:23:56.843 --> 00:23:57.960
Is there a motion to approve
00:23:57.960 --> 00:24:00.420
the order filed with
Mr. Gleeson, September 16th.
00:24:00.420 --> 00:24:02.320
Memo authorizing a
delegation of authority
00:24:02.320 --> 00:24:04.260
to the executive director
takes necessary action
00:24:04.260 --> 00:24:07.530
to make appointments to the
Texas Energy Liability Council?
00:24:07.530 --> 00:24:09.580
So moved.
Second.
00:24:09.580 --> 00:24:10.770
All in favor, say aye.
00:24:10.770 --> 00:24:11.710
Aye.
00:24:11.710 --> 00:24:12.550
Motion passes.
00:24:12.550 --> 00:24:13.383
Thank you.
00:24:15.220 --> 00:24:19.550
Don't have anything
on item 15, do y'all?
00:24:19.550 --> 00:24:21.161
No sir.
All right.
00:24:21.161 --> 00:24:22.193
Nope.
Good.
00:24:23.270 --> 00:24:28.270
That will bring us to item
number 16, project 52373,
00:24:28.380 --> 00:24:31.283
regarding wholesale
electric market design.
00:24:32.960 --> 00:24:35.610
Commissioner McAdams filed
a memo, two memos on this.
00:24:40.420 --> 00:24:41.980
Before I'd ask you to address those,
00:24:41.980 --> 00:24:44.450
I'd offer some comments and thoughts
00:24:44.450 --> 00:24:48.030
to our broader stakeholder community
00:24:48.030 --> 00:24:51.210
that I think reflects
the general sentiment
00:24:51.210 --> 00:24:52.870
of this Commission.
00:24:52.870 --> 00:24:56.010
We have been, and you all have been,
00:24:56.010 --> 00:25:00.113
part of an extraordinary
stakeholder process to date,
00:25:01.160 --> 00:25:03.560
throughout the summer,
and will continue to be.
00:25:03.560 --> 00:25:06.100
So we as a Commission
are very grateful, and the staff,
00:25:06.100 --> 00:25:09.230
for all the effort and resources
that have been expended
00:25:09.230 --> 00:25:10.870
on that.
00:25:10.870 --> 00:25:12.930
We got a lot of good feedback.
00:25:12.930 --> 00:25:14.480
We've had a lot of good discussions
00:25:14.480 --> 00:25:17.180
in these work sessions
and it's been a lot
00:25:17.180 --> 00:25:20.420
of work for everybody
involved, including our staff
00:25:20.420 --> 00:25:23.130
and our Commissioners and their staffs.
00:25:23.130 --> 00:25:26.210
We've got a lot of
good input and insight
00:25:26.210 --> 00:25:28.640
on new ancillary services products,
00:25:28.640 --> 00:25:32.790
the scarcity pricing at
ORDC, MCL, et cetera.
00:25:32.790 --> 00:25:35.170
And all of which this
Commission will consider
00:25:35.170 --> 00:25:39.670
and I suspect will take action on some,
00:25:39.670 --> 00:25:44.670
if not all of the above, once
we get to our final blueprint
00:25:45.440 --> 00:25:46.910
in December.
00:25:46.910 --> 00:25:48.360
But I would ask our
stakeholder community
00:25:48.360 --> 00:25:49.450
to not stop there.
00:25:49.450 --> 00:25:54.050
If we stop there, I
think we run the risk
00:25:54.050 --> 00:25:56.990
of putting band-aids on bullet holes.
00:25:56.990 --> 00:26:00.050
Senate Bill three asks
us to not only address
00:26:01.010 --> 00:26:03.310
ancillary services and
look at additional products
00:26:03.310 --> 00:26:06.060
that could be used
to enhance reliability
00:26:06.060 --> 00:26:07.420
in the ERCOT marketplace
00:26:07.420 --> 00:26:11.330
but it also asks us to
ensure broader reliability
00:26:11.330 --> 00:26:15.010
in the ERCOT marketplace,
in addition to above
00:26:15.010 --> 00:26:17.950
and beyond just those ancillary services
00:26:17.950 --> 00:26:19.250
and similar type products.
00:26:20.415 --> 00:26:22.150
So I would ask our stakeholder community
00:26:22.150 --> 00:26:27.150
to think about the substantial changes
00:26:27.860 --> 00:26:31.230
to the normal functioning
of the ERCOT market
00:26:32.500 --> 00:26:35.760
in a normal day and a
normal course of business
00:26:35.760 --> 00:26:39.300
that will ensure that the
revenues and the economics
00:26:39.300 --> 00:26:43.280
of the ERCOT model go
to generating resources
00:26:43.280 --> 00:26:46.840
that provide reliable power
of any form or fashion.
00:26:46.840 --> 00:26:51.428
And so that companies and entities
00:26:51.428 --> 00:26:55.750
that reliably provide power to Texas
00:26:56.730 --> 00:27:00.470
can run a reasonably profitable business
00:27:00.470 --> 00:27:01.940
under normal conditions.
00:27:01.940 --> 00:27:04.010
They don't need a scarcity event
00:27:04.010 --> 00:27:07.220
or a crisis to generate
reasonable returns
00:27:07.220 --> 00:27:08.220
for their investors.
00:27:10.210 --> 00:27:15.210
Right now, the current market framework
00:27:15.260 --> 00:27:20.260
seems to put reliability risks
in the ERCOT control room.
00:27:21.070 --> 00:27:25.293
If a unit trips or weather
conditions change,
00:27:26.460 --> 00:27:28.560
the folks in the ERCOT control room
00:27:28.560 --> 00:27:31.410
are responsible for
continuing to serve load.
00:27:31.410 --> 00:27:33.670
As part of the normal
functioning of the ERCOT market,
00:27:33.670 --> 00:27:35.120
I think we'd like to see that risk
00:27:35.120 --> 00:27:36.800
moved out into the marketplace.
00:27:36.800 --> 00:27:41.500
That has the financial
tools and risk management
00:27:41.500 --> 00:27:44.320
capabilities to better
handle that kind of risk
00:27:44.320 --> 00:27:47.961
and where the rewards
for mitigating that risk
00:27:47.961 --> 00:27:50.980
are available.
00:27:50.980 --> 00:27:52.850
That could be on the
gen side, the load side,
00:27:52.850 --> 00:27:54.110
some combination thereof.
00:27:54.110 --> 00:27:56.400
We've already seen a lot of
suggestions that address that.
00:27:56.400 --> 00:27:59.500
So this is just a reminder
to our stakeholders
00:27:59.500 --> 00:28:03.310
that as you move, from
now until the submissions
00:28:03.310 --> 00:28:05.830
outlined in Connie's memo,
I think September 30th-
00:28:05.830 --> 00:28:06.663
Yes, sir.
00:28:07.760 --> 00:28:09.230
Please, please think big.
00:28:09.230 --> 00:28:12.860
Please think about wholesale changes
00:28:12.860 --> 00:28:17.860
that will provide
revenues to reliable power
00:28:19.370 --> 00:28:23.790
and normal market
function without requiring
00:28:23.790 --> 00:28:28.053
a crisis, without requiring scarcity.
00:28:28.920 --> 00:28:32.130
So that's simply my
ask of our stakeholders
00:28:32.130 --> 00:28:34.860
as they move towards that
September 30th deadline.
00:28:34.860 --> 00:28:37.380
Commissioner McAdams, I
know you've filed some memos
00:28:37.380 --> 00:28:39.430
on this so I'll turn it
over to you at this point.
00:28:39.430 --> 00:28:40.500
Thank you, sir.
00:28:40.500 --> 00:28:44.530
And let me start off by
saying that the memos
00:28:44.530 --> 00:28:49.520
were filed with an interest
of not only market certainty
00:28:49.520 --> 00:28:52.920
but to assuage consumer concerns
00:28:52.920 --> 00:28:56.003
as we head into the winter of 2022.
00:28:57.633 --> 00:29:02.410
And to set in place a
system of safeguards
00:29:02.410 --> 00:29:06.000
that both the market
participants can count on
00:29:06.000 --> 00:29:09.660
but the consumers, the
residential consumers
00:29:09.660 --> 00:29:11.110
that are gonna receive bills.
00:29:12.550 --> 00:29:16.560
Uri was traumatizing, we recognize that.
00:29:16.560 --> 00:29:20.630
The next winter after
Uri will be remembered
00:29:20.630 --> 00:29:22.990
by consumers of all classes.
00:29:22.990 --> 00:29:26.450
And so my memos were limited in scope
00:29:26.450 --> 00:29:28.340
and as I said in my memo,
00:29:28.340 --> 00:29:30.890
this isn't market redesign,
this is market design.
00:29:30.890 --> 00:29:33.300
These are aspects of our market design
00:29:33.300 --> 00:29:36.460
that are sitting there
that everyone in this room
00:29:36.460 --> 00:29:40.770
is accustomed to seeing
and debating change to.
00:29:40.770 --> 00:29:43.480
But with that, one of
the components is clearly
00:29:43.480 --> 00:29:44.410
in our rule.
00:29:44.410 --> 00:29:48.010
A lot of things hinge
on the value of lost load,
00:29:48.010 --> 00:29:52.987
the high cap that is in TAC 25.505.
00:29:55.070 --> 00:29:59.903
In order to address ORDC substantively,
00:30:01.170 --> 00:30:04.200
which is the basis
of, I think it's fair to say
00:30:04.200 --> 00:30:05.380
hundreds of comments.
00:30:05.380 --> 00:30:10.380
If you screen several
dockets that we've opened,
00:30:10.510 --> 00:30:12.860
consistently, stakeholders have said
00:30:12.860 --> 00:30:16.560
that the high cap should change.
00:30:16.560 --> 00:30:20.670
That $9000 was almost
universally critiqued
00:30:20.670 --> 00:30:25.670
as being high, given
the depth of the load shed
00:30:26.120 --> 00:30:30.610
and the length of the
duration of the period of Uri.
00:30:30.610 --> 00:30:35.290
And so I would pare my memo
back and what I'm asking for
00:30:35.290 --> 00:30:40.290
in the interest of a
fast-moving rulemaking
00:30:40.850 --> 00:30:42.960
to where we could lower the high cap
00:30:44.110 --> 00:30:46.283
for the purposes of 2022.
00:30:47.150 --> 00:30:49.920
And again, that would dovetail naturally
00:30:49.920 --> 00:30:51.840
into the proceedings
that we are taking up
00:30:51.840 --> 00:30:54.080
as a part of the redesigned blueprint,
00:30:54.080 --> 00:30:56.550
which this Commission will consider.
00:30:56.550 --> 00:30:59.090
Again, lowering the high cap is not,
00:30:59.090 --> 00:31:02.030
in and of itself, the
answer and will not be
00:31:02.030 --> 00:31:04.890
the only thing to be imposed for 2021.
00:31:04.890 --> 00:31:06.760
But for the purposes of our rules,
00:31:06.760 --> 00:31:08.330
we must change that in order
00:31:08.330 --> 00:31:11.120
to substantively effect everything else.
00:31:11.120 --> 00:31:14.940
And so I propose that
we open this rulemaking
00:31:14.940 --> 00:31:19.730
to only change that $9000 number and,
00:31:19.730 --> 00:31:20.640
if appropriate,
00:31:20.640 --> 00:31:25.070
so that again, having
conferred with staff,
00:31:25.070 --> 00:31:28.150
the way rulemaking
should proceed is staff
00:31:28.150 --> 00:31:29.830
would file a redline.
00:31:29.830 --> 00:31:32.320
And again, then we
would adopt that redline
00:31:32.320 --> 00:31:34.270
to go out for comment.
00:31:34.270 --> 00:31:38.000
So in order to match
that up with our schedule
00:31:38.000 --> 00:31:41.910
to enact these changes quickly,
00:31:41.910 --> 00:31:44.740
conforming to the comment requirements,
00:31:44.740 --> 00:31:47.123
we only have a couple
of dates on the schedule.
00:31:48.450 --> 00:31:52.970
September 30th would not be in time
00:31:52.970 --> 00:31:56.380
because frankly, I need
to propose a number here
00:31:56.380 --> 00:31:58.130
that can then go into redline.
00:31:58.130 --> 00:31:59.570
And I'm looking at Connie and Thomas
00:31:59.570 --> 00:32:01.120
to make sure all this jives,
00:32:01.120 --> 00:32:04.390
that we can then vote on to
move forward in the process
00:32:04.390 --> 00:32:07.030
so that stakeholder
comment can be received.
00:32:07.030 --> 00:32:11.433
So just as a kind of
whiteboard in words here,
00:32:12.600 --> 00:32:17.600
I would propose a
number at 4500 right now
00:32:18.830 --> 00:32:21.520
to supplement the 9000 as a placeholder-
00:32:21.520 --> 00:32:22.770
To reduce from 9000.
00:32:22.770 --> 00:32:25.890
Reduce from 9000
down to 4500, cut it in half,
00:32:25.890 --> 00:32:29.660
and then let stakeholders
tell us why I am wrong.
00:32:29.660 --> 00:32:32.510
And then let's see-
00:32:32.510 --> 00:32:33.380
Do you think
you'll get comments?
00:32:33.380 --> 00:32:34.491
I think I'm gonna get comments.
00:32:34.491 --> 00:32:35.324
I don't think so.
00:32:35.324 --> 00:32:36.223
I'll bet you won't.
00:32:39.340 --> 00:32:42.260
We could adopt that at
the October 7th open meeting
00:32:43.850 --> 00:32:46.210
with an abbreviated comment period for,
00:32:46.210 --> 00:32:48.320
and again, everybody's
filed comments on this,
00:32:48.320 --> 00:32:50.730
I mean, everybody's done studies,
00:32:50.730 --> 00:32:53.800
for October 14th,
which lines up very well,
00:32:53.800 --> 00:32:56.210
Mr. Chairman, with the redesign effort
00:32:56.210 --> 00:32:58.790
and those decisions that would
00:32:58.790 --> 00:33:02.791
move forward concurrent to
that on ORDC or anything else.
00:33:02.791 --> 00:33:05.870
When would you ask
stakeholders to have their,
00:33:05.870 --> 00:33:09.460
I guess, final, final
comments on high cap
00:33:09.460 --> 00:33:11.650
into the Commission for consideration?
00:33:11.650 --> 00:33:13.930
Well, I'd look
to Connie on that.
00:33:13.930 --> 00:33:16.020
My non-negotiable
is to get this in place
00:33:16.020 --> 00:33:17.773
for January 1.
00:33:18.890 --> 00:33:20.060
Would it sync with this?
00:33:20.060 --> 00:33:21.250
I mean, they've got comments coming in
00:33:21.250 --> 00:33:22.243
on September 30th anyway-
00:33:22.243 --> 00:33:24.129
I know, on the study.
00:33:24.129 --> 00:33:25.400
On the market reliability.
00:33:25.400 --> 00:33:27.419
The reason I didn't line it up
00:33:27.419 --> 00:33:28.500
with September 30th is because I have
00:33:28.500 --> 00:33:30.840
to get staff to put out that redline
00:33:30.840 --> 00:33:33.122
and then we come back and adopt it.
00:33:33.122 --> 00:33:33.955
We have to vote on that portion,
00:33:33.955 --> 00:33:36.510
which starts the clock.
00:33:36.510 --> 00:33:37.747
So that would be-
00:33:37.747 --> 00:33:38.977
The October 7th.
00:33:42.670 --> 00:33:45.480
So would it be manageable
00:33:45.480 --> 00:33:49.500
to having stated, what I think,
00:33:49.500 --> 00:33:51.300
is a reasonable starting point
00:33:51.300 --> 00:33:55.340
for a revised high cap of 4500,
00:33:55.340 --> 00:33:58.225
would it be manageable to let
stakeholders provide feedback
00:33:58.225 --> 00:34:00.070
if, I mean we can have that discussion
00:34:00.070 --> 00:34:01.040
on what that number looks like,
00:34:01.040 --> 00:34:02.600
provide feedback on that number
00:34:02.600 --> 00:34:05.820
before we start the clock
running on a proposed rule,
00:34:05.820 --> 00:34:08.170
get their feedback by September 30th
00:34:09.201 --> 00:34:11.890
and then we can do
the redline after we see
00:34:11.890 --> 00:34:12.790
what they've said?
00:34:14.010 --> 00:34:15.340
I think we have
to do the redline
00:34:15.340 --> 00:34:17.243
in order to get this thing moving.
00:34:18.158 --> 00:34:19.830
I don't know.
We could proceed
00:34:19.830 --> 00:34:22.230
in either path.
00:34:22.230 --> 00:34:26.772
Y'all could agree on a
starting point number today-
00:34:26.772 --> 00:34:28.690
I'll do that.
And we could bring a redline
00:34:28.690 --> 00:34:33.690
to you before the
October 7th open meeting.
00:34:33.760 --> 00:34:37.520
Alternatively, you
could give a few days,
00:34:37.520 --> 00:34:42.040
a week between now
and then, for input into what
00:34:42.040 --> 00:34:43.990
that number should be.
00:34:43.990 --> 00:34:46.240
So input between now
and then could just be
00:34:47.730 --> 00:34:50.060
filed under one of the projects,
00:34:50.060 --> 00:34:52.190
a project open per Will's memo?
00:34:52.190 --> 00:34:53.640
Yes.
And that satisfies
00:34:53.640 --> 00:34:56.110
the legal requirement for
comment as we move forward.
00:34:56.110 --> 00:34:58.020
I just don't want it to get delayed
00:34:58.020 --> 00:35:00.000
so that we don't have
implementation uncertainty
00:35:00.000 --> 00:35:01.310
for consumers by January.
00:35:01.310 --> 00:35:04.730
Anything that
happens prior to us,
00:35:04.730 --> 00:35:07.220
prior to y'all voting on a redline
00:35:07.220 --> 00:35:09.310
is entirely discretionary.
00:35:09.310 --> 00:35:11.417
Okay.
That's right.
00:35:11.417 --> 00:35:15.255
And I thank you, Will, for
the leadership on that issue.
00:35:15.255 --> 00:35:18.406
Having been representing
the residential consumers
00:35:18.406 --> 00:35:20.730
through this winter storm Uri,
00:35:20.730 --> 00:35:24.817
it was a very traumatizing
event to actually work
00:35:27.000 --> 00:35:28.790
firsthand with the residential consumers
00:35:28.790 --> 00:35:30.320
throughout that storm.
00:35:30.320 --> 00:35:32.870
And there are a number
of issues that I think need
00:35:32.870 --> 00:35:34.360
to be addressed before the storm,
00:35:34.360 --> 00:35:37.580
before the anniversary
and this is one of 'em,
00:35:37.580 --> 00:35:38.413
the price cap.
00:35:38.413 --> 00:35:39.950
Although it doesn't translate directly
00:35:39.950 --> 00:35:42.380
to residential bills, and it won't
00:35:42.380 --> 00:35:46.200
because HB16 was passed and it bans
00:35:46.200 --> 00:35:48.320
the wholesale price index plans
00:35:48.320 --> 00:35:51.270
that were provided to
residential and small commercial
00:35:51.270 --> 00:35:52.984
consumers during the storm.
00:35:52.984 --> 00:35:57.003
But it's still important
to lower that cap,
00:35:57.900 --> 00:35:59.640
for a variety of other reasons
00:35:59.640 --> 00:36:03.730
and I support doing that
in the most efficient manner
00:36:03.730 --> 00:36:07.100
but also to get the
feedback that we need
00:36:08.390 --> 00:36:10.110
from the stakeholders on 4500.
00:36:10.110 --> 00:36:12.350
Which we have hd a
lot of stakeholders file
00:36:13.420 --> 00:36:15.050
comments supporting 4500,
00:36:15.050 --> 00:36:18.480
but I just wanna make sure
that we get that feedback.
00:36:18.480 --> 00:36:20.380
And I'm good with either way,
00:36:20.380 --> 00:36:22.230
whether we get the feedback up front.
00:36:23.130 --> 00:36:26.010
We could get it submitted in 52373.
00:36:26.010 --> 00:36:27.670
We could get it
submitted in a new project
00:36:27.670 --> 00:36:30.040
that Commissioner McAdams wants to open
00:36:30.040 --> 00:36:35.040
on ORDC specifically and get information
00:36:35.140 --> 00:36:36.370
and then get the redline going,
00:36:36.370 --> 00:36:38.730
because the clock
doesn't start until the PFP,
00:36:38.730 --> 00:36:40.920
the redline, we vote on the PFP.
00:36:40.920 --> 00:36:42.560
So either way is good with me.
00:36:42.560 --> 00:36:46.850
I think we're gonna meet
the by the end of the year,
00:36:46.850 --> 00:36:49.203
January deadline with either approach.
00:36:50.530 --> 00:36:52.810
So let me make
sure I've got the context
00:36:52.810 --> 00:36:53.877
of what you're laying out,
00:36:53.877 --> 00:36:55.800
and especially for the public.
00:36:55.800 --> 00:36:57.890
Since the winter event Uri,
00:36:57.890 --> 00:37:01.630
the high cap in the
ERCOT market was moved
00:37:01.630 --> 00:37:04.290
from 9000 to 2000.
That's correct, sir.
00:37:04.290 --> 00:37:05.431
So throughout the summer,
00:37:05.431 --> 00:37:08.140
the high cap price in the ERCOT market
00:37:08.140 --> 00:37:11.590
has been 2000, based on existing rules.
00:37:11.590 --> 00:37:14.270
Those rules that will,
based on the existing rules,
00:37:14.270 --> 00:37:19.270
that $2000 mark will move
back up to 9000 on January 1st,
00:37:20.030 --> 00:37:22.240
which I think is, from my understanding-
00:37:22.240 --> 00:37:24.520
That's why it's so pressing
to address it in my mind.
00:37:24.520 --> 00:37:25.353
Agreed.
00:37:25.353 --> 00:37:29.609
And so the driving focus
of your initiative here is to,
00:37:29.609 --> 00:37:34.609
and part of your concern with the,
00:37:34.990 --> 00:37:37.860
obviously protecting
the Texas consumers,
00:37:37.860 --> 00:37:41.430
both businesses and
residential customers,
00:37:41.430 --> 00:37:45.040
this initiative is to make
sure that by January 1st,
00:37:45.040 --> 00:37:47.100
instead of going back to the 9000,
00:37:47.100 --> 00:37:48.860
which we've generally
heard from the public
00:37:48.860 --> 00:37:51.033
and our stakeholders is too high,
00:37:51.920 --> 00:37:56.030
this project will be
an accelerated version
00:37:56.030 --> 00:37:59.523
of moving that high cap
down through our Rule 25.505,
00:37:59.523 --> 00:38:01.573
a very narrow scope of that.
Yes, sir.
00:38:03.360 --> 00:38:07.610
So that we can ensure
Texans won't be charged $9000
00:38:07.610 --> 00:38:09.250
in the event of another scarcity-
00:38:09.250 --> 00:38:11.243
Event.
Crisis.
00:38:12.780 --> 00:38:13.880
We don't know what the number will be.
00:38:13.880 --> 00:38:17.120
You're proposing a 4500, a 50% reduction
00:38:17.120 --> 00:38:19.880
from the old high cap for consumers.
00:38:19.880 --> 00:38:24.880
So that's a substantial
reduction in potential liability
00:38:25.410 --> 00:38:27.553
for Texas consumers.
00:38:29.690 --> 00:38:32.902
And as part of that,
from what I understand,
00:38:32.902 --> 00:38:37.902
you're making a narrow focus
in an accelerated rulemaking
00:38:38.290 --> 00:38:43.210
so that it syncs with our
broader market redesign blueprint,
00:38:43.210 --> 00:38:45.114
so that those can go,
00:38:45.114 --> 00:38:50.114
that we can open and close
25.505, have the rule in place,
00:38:51.880 --> 00:38:54.727
have the new high cap in
place before January 1st
00:38:54.727 --> 00:38:58.790
and still have that rule available to us
00:38:58.790 --> 00:39:00.916
for the broader blueprint.
00:39:00.916 --> 00:39:01.749
Yes, sir.
00:39:01.749 --> 00:39:02.990
Okay, yep.
00:39:02.990 --> 00:39:04.077
I just wanna make sure to lay it out,
00:39:04.077 --> 00:39:05.050
I got everything.
00:39:05.050 --> 00:39:06.660
Can I ask one
clarifying question
00:39:06.660 --> 00:39:09.110
or make one clarification point?
00:39:09.110 --> 00:39:11.710
So in our rule, there's the high cap,
00:39:11.710 --> 00:39:13.307
there's the systemwide upper cap,
00:39:13.307 --> 00:39:15.010
and there's the value of lost load.
00:39:15.010 --> 00:39:16.010
Right.
00:39:16.010 --> 00:39:19.600
So when you say
changing the high cap,
00:39:19.600 --> 00:39:22.280
will that change to
the high cap also result,
00:39:22.280 --> 00:39:24.590
are we still going to
have the same number
00:39:24.590 --> 00:39:26.890
for the systemwide upper
cap and the value of lost load
00:39:26.890 --> 00:39:28.750
because the value of
lost load is what's included
00:39:28.750 --> 00:39:29.583
in ORDC.
00:39:31.050 --> 00:39:32.000
Go ahead.
00:39:32.000 --> 00:39:33.800
I was just gonna say,
that's my understanding.
00:39:33.800 --> 00:39:35.730
Until we do the studies to determine
00:39:35.730 --> 00:39:39.105
what the best value
of lost load is, which-
00:39:39.105 --> 00:39:41.100
Well, thankfully,
lots of stakeholders
00:39:41.100 --> 00:39:43.040
are doing studies for us-
That's for sure.
00:39:43.040 --> 00:39:45.990
To accommodate
our accelerated timeline.
00:39:45.990 --> 00:39:48.130
As per the rule,
Commissioner Cobos,
00:39:48.130 --> 00:39:51.980
two numbers are specified
in relation to high cap.
00:39:51.980 --> 00:39:54.920
And again, that's $9000 twice.
00:39:54.920 --> 00:39:58.963
And so, and again, right
now value of lost load,
00:40:00.648 --> 00:40:02.300
that's kind of why I
asked that question,
00:40:02.300 --> 00:40:05.130
should we specify VOLL in rule?
00:40:05.130 --> 00:40:08.530
I don't think so because
my initial thought is no
00:40:08.530 --> 00:40:11.110
because the whole
action that we were able
00:40:11.110 --> 00:40:14.990
to take with ORDC and being
nimble with making those changes
00:40:14.990 --> 00:40:18.247
would now require a rule
change if we put VOLL in rule.
00:40:18.247 --> 00:40:20.110
Right.
But I do wanna point out
00:40:21.163 --> 00:40:24.937
that in 25.505, subsection G, 6e,
00:40:27.140 --> 00:40:29.020
it says the value of
lost load will equal
00:40:29.020 --> 00:40:31.570
to the value of the
systemwide upper cap in effect.
00:40:34.400 --> 00:40:36.000
Exactly, yes, yes.
00:40:36.000 --> 00:40:38.650
Okay, so-
Which one's setting which?
00:40:38.650 --> 00:40:42.663
Well, that's why that 9000
specification is so important.
00:40:44.429 --> 00:40:46.333
Everything moves off of that.
00:40:47.330 --> 00:40:50.210
Okay, so we're
going to get comment
00:40:50.210 --> 00:40:51.553
on the HCAP and the
systemwide upper cap.
00:40:52.850 --> 00:40:56.397
We're thinking of them
as the same figure?
00:40:56.397 --> 00:40:57.500
Yes.
Okay.
00:40:57.500 --> 00:40:58.850
As of right now.
Okay.
00:40:59.793 --> 00:41:01.280
I just wanted to make
sure I understood that
00:41:01.280 --> 00:41:02.219
because of the ruling-
00:41:02.219 --> 00:41:03.360
It's gonna be a
real simple redline.
00:41:03.360 --> 00:41:06.930
I expect 4500 to replace
9000 in those two spots.
00:41:06.930 --> 00:41:08.500
Okay, great.
00:41:08.500 --> 00:41:09.920
Thank you.
00:41:09.920 --> 00:41:12.983
So do we want to,
00:41:14.370 --> 00:41:16.610
if we wanna have it done,
00:41:16.610 --> 00:41:19.000
and just by you mentioning this in terms
00:41:19.000 --> 00:41:22.533
of the timing for proper rulemaking,
00:41:23.420 --> 00:41:25.130
given the extraordinary circumstances
00:41:25.130 --> 00:41:26.980
since the storm that we're all in,
00:41:26.980 --> 00:41:29.960
this Commission has
already moved forward
00:41:29.960 --> 00:41:33.368
with critical rulemakings
and an accelerated process.
00:41:33.368 --> 00:41:35.130
I think we had a 10-day comment period
00:41:35.130 --> 00:41:39.727
for the Phase 1 weatherization rule.
00:41:39.727 --> 00:41:41.326
And I would certainly be comfortable
00:41:41.326 --> 00:41:44.170
using a similarly accelerated timeline
00:41:44.170 --> 00:41:46.363
for an issue as critical as this.
00:41:47.720 --> 00:41:50.330
Of course, considering that
we've already had months
00:41:50.330 --> 00:41:53.280
of public comment on this included
00:41:53.280 --> 00:41:58.280
in our many other elements of
feedback for market redesign.
00:42:04.020 --> 00:42:05.280
I guess it takes us back to,
00:42:05.280 --> 00:42:09.930
do we want to pick a
number from the dias,
00:42:09.930 --> 00:42:12.293
starting with 4500, I'm fine with,
00:42:13.410 --> 00:42:16.260
get with the stakeholders,
evaluate that,
00:42:16.260 --> 00:42:20.518
include that feedback in the
comments due September 30th,
00:42:20.518 --> 00:42:22.518
then work with staff to issue a redline?
00:42:23.585 --> 00:42:25.110
And then October 7th, we've got a week
00:42:25.110 --> 00:42:27.110
to process their comments.
00:42:27.110 --> 00:42:30.540
October 7th, we can
issue a proposed rule
00:42:32.130 --> 00:42:37.070
using the same 10-day
comment period we did
00:42:37.070 --> 00:42:38.630
with weatherization.
00:42:38.630 --> 00:42:42.133
That would get us to the 17th.
00:42:43.400 --> 00:42:47.430
And from there we would,
depending on how many comments
00:42:47.430 --> 00:42:48.460
we get back from the public
00:42:48.460 --> 00:42:52.070
during that official
public comment period,
00:42:52.070 --> 00:42:55.733
staff will respond, per the process.
00:42:56.750 --> 00:42:59.589
And then I don't know the
next open meeting after that.
00:42:59.589 --> 00:43:01.640
The 27th, I think.
00:43:01.640 --> 00:43:05.000
So the 27th of October,
we could be adopting
00:43:05.000 --> 00:43:08.683
a new VOLL high cap number that will,
00:43:09.540 --> 00:43:11.460
and that would still leave
November, December.
00:43:11.460 --> 00:43:14.620
Yes, Ms. Speltzer, feel free to come up.
00:43:14.620 --> 00:43:16.286
The 28th is the open meeting.
00:43:16.286 --> 00:43:17.880
The 28th.
The 28th?
00:43:17.880 --> 00:43:21.290
So just for your context,
00:43:21.290 --> 00:43:25.600
any proposal that you
determine to publish
00:43:25.600 --> 00:43:28.040
at the October 7th
open meeting will appear
00:43:28.040 --> 00:43:30.863
in the Texas Register on October 22nd.
00:43:32.620 --> 00:43:34.880
It takes a little time to work its way
00:43:34.880 --> 00:43:36.220
through the process.
00:43:36.220 --> 00:43:41.110
But even so, I believe
we could get comments
00:43:41.110 --> 00:43:45.500
back and have it free at the
November 4th open meeting
00:43:45.500 --> 00:43:46.353
for adoption.
00:43:47.470 --> 00:43:49.830
That would still
leave essentially two months
00:43:49.830 --> 00:43:54.533
for that rule change to be
operationalized at ERCOT.
00:43:55.810 --> 00:43:56.643
Correct.
00:43:56.643 --> 00:43:58.700
Is it a requirement
to wait to be published
00:43:58.700 --> 00:43:59.850
in the Texas Register?
00:43:59.850 --> 00:44:02.210
Because I believe we
went through this discussion
00:44:02.210 --> 00:44:04.410
with Barksdale with
the weatherization rule.
00:44:05.320 --> 00:44:08.990
It is not but if we
simply started counting
00:44:12.430 --> 00:44:17.130
the 10 days from the 7th,
the comments would be due
00:44:17.130 --> 00:44:19.143
before it ever appeared in the Register.
00:44:20.230 --> 00:44:24.520
So I would recommend at least allowing
00:44:24.520 --> 00:44:27.650
a couple days after
it's been in the Register,
00:44:27.650 --> 00:44:30.490
which is considered our official notice.
00:44:30.490 --> 00:44:33.590
Are you, I heard
something about a series
00:44:33.590 --> 00:44:36.793
of open meetings
regarding securitization.
00:44:37.810 --> 00:44:39.410
Yeah, so the 30th and the 8th.
00:44:41.585 --> 00:44:44.910
The 30th of September
and the 5th and 6th of October.
00:44:44.910 --> 00:44:47.930
They're earlier than your focus here.
00:44:47.930 --> 00:44:50.940
Is the Texas
Register timeline,
00:44:50.940 --> 00:44:54.910
is that by publication date
or just by 14-day process
00:44:54.910 --> 00:44:56.300
at the Register?
00:44:56.300 --> 00:44:57.880
That's by publication date.
00:44:57.880 --> 00:45:00.913
When's the next
previous publication date?
00:45:07.302 --> 00:45:08.400
Do you mean when's
the publication date
00:45:08.400 --> 00:45:11.560
before the 22nd?
Yes.
00:45:11.560 --> 00:45:14.320
There's a publication
date on October 15th.
00:45:14.320 --> 00:45:17.387
The submission date
for that is October 4th.
00:45:18.470 --> 00:45:19.440
Yes, so that's the problem.
00:45:19.440 --> 00:45:22.690
Remember, the 30th open
meeting has already been posted
00:45:22.690 --> 00:45:24.740
and it's a limited agenda.
00:45:24.740 --> 00:45:27.152
So it would have to be modified.
00:45:27.152 --> 00:45:29.840
It's only covering those
dockets related to securitization,
00:45:29.840 --> 00:45:30.673
that's the problem.
All right.
00:45:30.673 --> 00:45:33.333
You can post
the meeting for the 4th.
00:45:34.684 --> 00:45:36.190
Post the meeting for the 4th.
00:45:36.190 --> 00:45:37.220
I mean, I think
we're gonna be able
00:45:37.220 --> 00:45:40.097
to get there with the
PFP adoption on the-
00:45:40.097 --> 00:45:42.758
And November 4th for adoption.
00:45:42.758 --> 00:45:46.590
Yes.
Okay.
00:45:46.590 --> 00:45:49.683
And especially, I know
it's a very narrow scope but-
00:45:50.670 --> 00:45:54.830
It's very volatile.
(everyone laughing)
00:45:54.830 --> 00:45:55.910
Yes, sir.
00:45:55.910 --> 00:46:00.590
And so that way we can get feedback.
00:46:00.590 --> 00:46:03.170
Let's make sure we
got your thinking right.
00:46:03.170 --> 00:46:05.160
We're asking stakeholders in concurrence
00:46:05.160 --> 00:46:08.250
with if there are market
redesign comments
00:46:08.250 --> 00:46:10.990
due to the Commission on the 30th.
00:46:10.990 --> 00:46:15.810
We would also ask
that they file comments
00:46:15.810 --> 00:46:18.210
related to this very specific high cap
00:46:18.210 --> 00:46:23.210
and VOLL component of the 25.505
00:46:23.320 --> 00:46:25.053
by the 30th to the Commission.
00:46:26.600 --> 00:46:28.053
You include that with the,
00:46:29.140 --> 00:46:31.690
or do you want to open a
separate project for that?
00:46:34.200 --> 00:46:35.340
No.
00:46:35.340 --> 00:46:38.880
Well, I don't wanna make life that much-
00:46:38.880 --> 00:46:41.493
I would recommend
opening a separate project.
00:46:41.493 --> 00:46:43.340
You would, okay?
Yes.
00:46:43.340 --> 00:46:44.437
I didn't wanna step in there.
00:46:44.437 --> 00:46:46.450
And then we'll proceed
with your proposed rule
00:46:46.450 --> 00:46:48.080
in that same new project.
00:46:48.080 --> 00:46:49.720
Okay.
That makes sense for you?
00:46:49.720 --> 00:46:50.913
Makes sense for me.
00:46:50.913 --> 00:46:52.730
Just that we'll
open the new project
00:46:52.730 --> 00:46:56.420
just on the very narrow
component of 25.505
00:46:57.590 --> 00:46:59.253
regarding VOLL and high cap.
00:47:00.380 --> 00:47:03.390
September comments
come back September 30th.
00:47:03.390 --> 00:47:06.843
We will have a redline
ready October 5th.
00:47:08.959 --> 00:47:09.792
The 7th.
Yes.
00:47:09.792 --> 00:47:10.833
The 7th, sorry.
00:47:12.470 --> 00:47:16.110
And with the goal of publishing that
00:47:16.110 --> 00:47:19.680
in the Texas Register
on the 22nd, Ms. Speltzer.
00:47:19.680 --> 00:47:21.670
Yes.
Okay.
00:47:21.670 --> 00:47:26.670
And then with an appropriate
10-day public comment period.
00:47:28.914 --> 00:47:30.570
Seven day?
Seven day.
00:47:30.570 --> 00:47:32.970
Seven-day public
comment period,
00:47:32.970 --> 00:47:37.350
which would be the 13th
opportunity for the public
00:47:37.350 --> 00:47:39.203
to comment on this since June.
00:47:42.710 --> 00:47:46.480
Seven-day formal, official
public comment period
00:47:47.440 --> 00:47:50.970
from October 22nd to the 29th.
00:47:50.970 --> 00:47:54.190
Staff will respond to
those comments submitted
00:47:54.190 --> 00:47:58.020
by the public and be
prepared for the Commission
00:47:58.020 --> 00:48:02.690
to formally adopt the rule at
our October 4th open meeting.
00:48:02.690 --> 00:48:04.290
November 4th.
November 4th.
00:48:05.213 --> 00:48:06.237
- November 4th.
00:48:06.237 --> 00:48:07.570
I look forward to seeing
this in the transcript.
00:48:07.570 --> 00:48:10.620
That's a great plan.
(everyone laughing)
00:48:10.620 --> 00:48:12.070
Janice is the best.
00:48:13.730 --> 00:48:14.700
I'm good with that, yes.
00:48:14.700 --> 00:48:16.430
That'll work?
Jimmy?
00:48:16.430 --> 00:48:17.263
Yes.
00:48:17.263 --> 00:48:19.110
And the only
thing I wanted to say
00:48:20.410 --> 00:48:22.597
with respect to your
request for the proposals
00:48:22.597 --> 00:48:25.410
and your encouragement of
stakeholders submitting proposals
00:48:25.410 --> 00:48:28.700
on the 30th, it would be really helpful
00:48:28.700 --> 00:48:32.270
to get very specific
stakeholder solutions
00:48:32.270 --> 00:48:34.650
with an implementation
path going forward,
00:48:34.650 --> 00:48:37.490
whether that requires PUC rule change
00:48:37.490 --> 00:48:41.690
and/or ERCOT protocol
changes, system changes.
00:48:41.690 --> 00:48:43.830
What is our implementation
path going forward
00:48:43.830 --> 00:48:46.060
to implement their
recommended proposals?
00:48:46.060 --> 00:48:48.980
And to the extent that
stakeholders can get together
00:48:48.980 --> 00:48:53.220
and jointly file proposals,
that would be very helpful
00:48:53.220 --> 00:48:56.060
because I feel like I've
heard a variety of proposals
00:48:56.060 --> 00:48:59.430
that have different
elements of similarity.
00:48:59.430 --> 00:49:01.170
If the stakeholders could get together
00:49:01.170 --> 00:49:03.730
and agree to joint proposals,
00:49:03.730 --> 00:49:06.810
that would also be very
helpful for our evaluation
00:49:06.810 --> 00:49:07.880
of those proposals.
00:49:07.880 --> 00:49:08.713
Very good point.
00:49:08.713 --> 00:49:10.930
Implementation is gonna
be a key part of this.
00:49:12.194 --> 00:49:14.510
And another thing in addition to that
00:49:14.510 --> 00:49:17.030
is please also keep in
mind the general context
00:49:17.030 --> 00:49:18.053
of the proposals.
00:49:19.165 --> 00:49:20.110
In the universe we're working in,
00:49:20.110 --> 00:49:22.890
I suspect that my
colleagues are not going
00:49:22.890 --> 00:49:26.170
to be very excited about any
new ancillary service product
00:49:26.170 --> 00:49:29.103
that contains 70,000
megawatts over peak,
00:49:30.270 --> 00:49:33.880
given that would be a capacity
market or anything like that.
00:49:33.880 --> 00:49:38.800
Also, please, please keep
the real-life implementation
00:49:38.800 --> 00:49:41.903
in context, in consideration,
when you submit these.
00:49:44.900 --> 00:49:47.130
All right, does staff
have any other questions
00:49:47.130 --> 00:49:51.720
or need any other action from us?
00:49:51.720 --> 00:49:55.640
If I could just walk
it back to confirm?
00:49:55.640 --> 00:49:59.790
Today, we'll be opening a new project
00:49:59.790 --> 00:50:03.745
to look at 25.505 for
the very limited purpose
00:50:03.745 --> 00:50:06.610
that you have outlined here today
00:50:06.610 --> 00:50:11.610
and we will file a request for comments
00:50:11.660 --> 00:50:13.513
on that very limited issue.
00:50:14.900 --> 00:50:18.971
Given that it is such a limited issue,
00:50:18.971 --> 00:50:23.303
the comments will be
limited in page number.
00:50:24.432 --> 00:50:26.253
Yes.
00:50:28.850 --> 00:50:30.623
Can we limit the
number of lines?
00:50:31.483 --> 00:50:34.483
(everyone laughing)
00:50:35.440 --> 00:50:37.980
What were you thinking
about in terms of page numbers?
00:50:37.980 --> 00:50:39.250
Five.
00:50:39.250 --> 00:50:40.083
Five pages.
00:50:40.083 --> 00:50:43.620
We're talking about a
number and one issue
00:50:43.620 --> 00:50:44.973
about VOLL and high caps.
00:50:48.496 --> 00:50:49.329
That's a narrow scope.
00:50:49.329 --> 00:50:50.162
Two?
00:50:50.162 --> 00:50:50.995
What are you feeling here?
00:50:54.890 --> 00:50:58.900
Five, because again, you
want the back cast analysis
00:50:58.900 --> 00:51:01.780
to describe how it
will increase pressure
00:51:01.780 --> 00:51:03.730
on generators, you name it.
00:51:03.730 --> 00:51:07.040
Okay, good?
That's good.
00:51:07.040 --> 00:51:11.040
All right, and for our
stakeholder community,
00:51:11.040 --> 00:51:16.040
the tentative proposal starting point
00:51:16.340 --> 00:51:18.310
from Commissioner McAdams is 4500,
00:51:18.310 --> 00:51:20.610
50% reduction from current high cap.
00:51:20.610 --> 00:51:22.740
Any thoughts on-
The number?
00:51:22.740 --> 00:51:23.740
Makes sense?
00:51:23.740 --> 00:51:24.850
That makes sense to me.
00:51:24.850 --> 00:51:27.344
I'm comfortable with starting at 4500.
00:51:27.344 --> 00:51:29.110
Absolutely.
All right.
00:51:29.110 --> 00:51:32.660
And I'll just add to
Commissioner Cobos' comment
00:51:32.660 --> 00:51:36.470
about the filings in 52373,
00:51:36.470 --> 00:51:38.313
the market design recommendations,
00:51:39.160 --> 00:51:42.306
staff's been having
informal conversations
00:51:42.306 --> 00:51:46.580
with market participants
and asking them to work,
00:51:46.580 --> 00:51:49.114
once all the filings are in,
00:51:49.114 --> 00:51:51.020
to review one another's
and come prepared
00:51:51.020 --> 00:51:53.940
to the October 14th workshop,
00:51:53.940 --> 00:51:58.940
to discuss comparison and
contrast among the proposals,
00:51:59.240 --> 00:52:01.820
their own and other parties'.
00:52:01.820 --> 00:52:04.880
Yeah, so there's value
in seeing what everybody,
00:52:04.880 --> 00:52:06.437
or a large segment of people, agree on.
00:52:06.437 --> 00:52:08.230
But there's also value in seeing,
00:52:08.230 --> 00:52:11.600
which is your point, let's
see where the consensus is
00:52:11.600 --> 00:52:15.710
but that's also, that doesn't
mean to discard other ideas.
00:52:15.710 --> 00:52:17.710
So we can see whether there's consensus,
00:52:18.660 --> 00:52:21.660
which is one universe,
but also see other ideas
00:52:21.660 --> 00:52:26.360
that may be worth learning about
00:52:26.360 --> 00:52:31.100
and certainly I don't think any of us
00:52:31.100 --> 00:52:34.510
will be afraid to pick and choose
00:52:34.510 --> 00:52:39.053
and take components
from any or all of these.
00:52:39.972 --> 00:52:41.120
What about Brattle?
00:52:41.120 --> 00:52:42.770
I think that's important as well.
00:52:44.570 --> 00:52:49.510
So we will have Brattle at
the October 14th work session?
00:52:49.510 --> 00:52:50.343
Yes.
00:52:50.343 --> 00:52:55.343
Yes, ERCOT has
retained the Brattle Group
00:52:55.560 --> 00:52:59.280
as the in-house consulting firm to help
00:52:59.280 --> 00:53:00.510
both ERCOT and the Commission
00:53:00.510 --> 00:53:01.720
as we move through this process.
00:53:01.720 --> 00:53:04.730
And they have been
working and will be working
00:53:04.730 --> 00:53:07.374
with ERCOT staff and PUC staff
00:53:07.374 --> 00:53:11.250
and will be available at
that open work session
00:53:11.250 --> 00:53:12.700
on October 14th.
00:53:12.700 --> 00:53:13.815
Good point.
00:53:13.815 --> 00:53:15.915
Thank you for reminding me.
Absolutely.
00:53:16.870 --> 00:53:17.703
All right.
00:53:18.640 --> 00:53:19.870
Thanks, Mr. Chairman.
00:53:19.870 --> 00:53:20.703
Thank you.
00:53:24.169 --> 00:53:27.923
That's a big move critical
to that January 1st timeline.
00:53:29.450 --> 00:53:32.733
That is a major
consumer protection item.
00:53:35.702 --> 00:53:38.190
That will bring us to item 17,
00:53:40.410 --> 00:53:45.240
related to energy
regional state committee.
00:53:45.240 --> 00:53:49.343
Staff has filed a memo on this.
00:53:50.240 --> 00:53:52.010
Come on up.
00:53:52.010 --> 00:53:55.680
We'll call up Warner
Roth and Justin Atkins
00:53:55.680 --> 00:53:56.903
from Commission staff.
00:54:01.950 --> 00:54:04.050
Warner Roth on behalf
of Commission staff.
00:54:04.050 --> 00:54:06.090
The memo I filed in the SVP
00:54:06.090 --> 00:54:10.920
and MISO dockets is related
to FERC docket RM21-17,
00:54:10.920 --> 00:54:13.553
related to the advanced
notice of proposed rulemaking
00:54:13.553 --> 00:54:15.740
on building for the
future through electric
00:54:15.740 --> 00:54:17.640
regional transmission
planning, cost allocation,
00:54:17.640 --> 00:54:19.410
and generation interconnection.
00:54:19.410 --> 00:54:23.313
This is a broad advance of a rulemaking.
00:54:25.410 --> 00:54:27.750
A broad docket opened
up to review a more,
00:54:27.750 --> 00:54:28.890
to take a more holistic view
00:54:28.890 --> 00:54:31.270
of FERC's transmission
planning processes,
00:54:31.270 --> 00:54:33.090
transmission cost allocation processes,
00:54:33.090 --> 00:54:34.867
and the generation
interconnection processes
00:54:34.867 --> 00:54:36.993
for FERC jurisdiction RTOs.
00:54:38.990 --> 00:54:41.930
This could potentially
have significant ramifications
00:54:41.930 --> 00:54:44.580
on shifting costs, changing
how transmission planning
00:54:44.580 --> 00:54:46.110
is done in FERC jurisdictions.
00:54:46.110 --> 00:54:48.100
So in any of the non-ERCOT areas,
00:54:48.100 --> 00:54:50.820
I know that the SVP
Regional State Committee
00:54:50.820 --> 00:54:52.330
and the Organization of MISO States
00:54:52.330 --> 00:54:55.510
are both considering making
comments in this docket,
00:54:55.510 --> 00:54:57.100
both in the initial
phase and in response
00:54:57.100 --> 00:55:00.960
to other commenters later on.
00:55:00.960 --> 00:55:03.450
I am making a recommendation
for the Commission
00:55:03.450 --> 00:55:05.340
to file an intervention in this docket
00:55:05.340 --> 00:55:07.990
so that we may engage
with our outside counsel
00:55:07.990 --> 00:55:11.223
in making sure our interests
are protected in this docket.
00:55:13.570 --> 00:55:15.157
Fair enough, thank you.
00:55:15.157 --> 00:55:16.807
Any thoughts, comments, concerns?
00:55:17.790 --> 00:55:21.937
Just having watched
the interstate traffic on this
00:55:21.937 --> 00:55:24.160
and by that I mean filing traffic,
00:55:24.160 --> 00:55:25.990
I think it's consistent that Texas start
00:55:25.990 --> 00:55:29.070
to stake out our own position
00:55:29.070 --> 00:55:32.110
and I like Warner's recommendation.
00:55:32.110 --> 00:55:32.943
Absolutely.
00:55:32.943 --> 00:55:35.750
I know MISO was
looking at some long-term
00:55:35.750 --> 00:55:38.040
transmission planning
issues and cost allocation.
00:55:38.040 --> 00:55:41.070
I think it's really important
that we get involved
00:55:41.070 --> 00:55:43.480
in these issues at the federal level
00:55:43.480 --> 00:55:45.123
and also at the MISO level.
00:55:47.890 --> 00:55:52.704
So I would, I agree that we
should have this intervention
00:55:52.704 --> 00:55:54.310
in this way.
00:55:54.310 --> 00:55:58.280
I hope that in the future,
we can put more meat
00:55:58.280 --> 00:55:59.820
on the bone when we have an intervention
00:55:59.820 --> 00:56:02.360
and talk about really
what our issues are,
00:56:02.360 --> 00:56:05.510
especially in light of the winter storm.
00:56:05.510 --> 00:56:08.500
We've got parts of
Texas that are in both
00:56:08.500 --> 00:56:11.630
of these regions and
transmission planning,
00:56:11.630 --> 00:56:14.570
use of emergency
power, all of the issues
00:56:14.570 --> 00:56:17.900
that are wrapped up into this issue
00:56:17.900 --> 00:56:19.760
could be valuable to our citizens
00:56:19.760 --> 00:56:22.320
that live in those non-ERCOT areas.
00:56:22.320 --> 00:56:24.700
And I feel it's incumbent upon us
00:56:24.700 --> 00:56:28.010
to be participating in those process.
00:56:28.010 --> 00:56:30.470
I think as it stands now, I may be wrong
00:56:30.470 --> 00:56:34.060
but MISO South doesn't
even have any transmission
00:56:34.060 --> 00:56:35.180
proposed right now.
00:56:35.180 --> 00:56:37.630
And that's a challenge.
00:56:37.630 --> 00:56:40.450
I think that area was hit just as hard
00:56:40.450 --> 00:56:44.390
as many other regions
during winter storm Uri.
00:56:44.390 --> 00:56:46.610
And if there are things that we need
00:56:46.610 --> 00:56:50.300
for our consumers in Texas,
we have to use this process.
00:56:50.300 --> 00:56:52.470
We've gotta get in there and
we've gotta roll our sleeves up
00:56:52.470 --> 00:56:54.650
and do it and participate.
00:56:54.650 --> 00:56:58.129
Agreed, we do need
transmission to ensure reliability
00:56:58.129 --> 00:57:01.350
in the areas of the state
that are not within ERCOT.
00:57:01.350 --> 00:57:04.010
Those are very important
areas of our state as well.
00:57:04.010 --> 00:57:07.130
And also to make sure
that those ratepayers
00:57:07.130 --> 00:57:10.341
are not being allocated
costs for other parts
00:57:10.341 --> 00:57:13.368
of those other ISO RTOs
that they are not getting
00:57:13.368 --> 00:57:14.852
the benefit for.
00:57:14.852 --> 00:57:16.285
And one other
thing that I wanna say
00:57:16.285 --> 00:57:21.285
is these committees
and regions, MISO, SPP,
00:57:22.390 --> 00:57:24.453
even PJM and others,
00:57:25.440 --> 00:57:27.810
they're not easy games to play in.
00:57:27.810 --> 00:57:30.000
They're established players there.
00:57:30.000 --> 00:57:31.583
They have relationships.
00:57:33.099 --> 00:57:34.710
Commissions change
and right when you get
00:57:34.710 --> 00:57:35.620
to know some Commissioners,
00:57:35.620 --> 00:57:37.930
they change on the RSCs and stuff.
00:57:37.930 --> 00:57:41.130
And us getting in there
and building relationships
00:57:41.130 --> 00:57:42.600
and having them understand what we want
00:57:42.600 --> 00:57:45.900
and what we need is
as important as anything.
00:57:45.900 --> 00:57:50.700
So I think that again, us
being involved in these
00:57:50.700 --> 00:57:52.010
is really important.
00:57:52.010 --> 00:57:54.160
And I know it takes staff time,
00:57:54.160 --> 00:57:55.420
I know it takes Commissioner time
00:57:55.420 --> 00:58:00.210
but it's a part of the
state that we can't ignore.
00:58:00.210 --> 00:58:02.505
They represent a lot of Texans.
00:58:02.505 --> 00:58:04.920
I'd agree with
you, Commissioner.
00:58:04.920 --> 00:58:09.253
The trend for the rest of
the country, MISO, SVP,
00:58:11.130 --> 00:58:12.860
they've been, similar to ERCOT,
00:58:12.860 --> 00:58:16.490
so many issues have been
at log jams and logger heads
00:58:16.490 --> 00:58:17.630
for so long.
00:58:17.630 --> 00:58:21.130
I think FERC is starting
to press a little bit
00:58:21.130 --> 00:58:22.280
to break some log jams.
00:58:22.280 --> 00:58:25.610
And that will necessitate
Texas being very well-acquainted
00:58:25.610 --> 00:58:27.450
with those processes and engaged
00:58:27.450 --> 00:58:30.410
because even with the
slivers that we do have
00:58:30.410 --> 00:58:32.970
in those ISOs, we are
a big part of their load
00:58:32.970 --> 00:58:35.510
and must be engaged.
00:58:35.510 --> 00:58:37.780
Well, we do have one
other market that's not covered
00:58:37.780 --> 00:58:39.760
right now by Commissioner McAdams and I
00:58:39.760 --> 00:58:41.890
and that's WAC, the
western part of the grid
00:58:41.890 --> 00:58:43.510
where El Paso is.
00:58:43.510 --> 00:58:45.703
So that might be something that,
00:58:46.777 --> 00:58:48.516
I'm not giving an assignment
00:58:48.516 --> 00:58:51.360
but since I've had my fair share-
00:58:51.360 --> 00:58:53.360
Do I hear a fifth
Commissioner coming?
00:58:54.242 --> 00:58:55.242
I'm kidding.
00:58:57.830 --> 00:58:59.314
Item up for
discussion, absolutely.
00:58:59.314 --> 00:59:01.950
Yeah, any interest in
taking on that charge?
00:59:01.950 --> 00:59:02.783
Perhaps.
00:59:05.830 --> 00:59:06.930
All right.
00:59:06.930 --> 00:59:08.913
Look forward to
exploring that opportunity.
00:59:11.850 --> 00:59:15.743
All right, Mr. Roth, thank
you for laying that out.
00:59:16.650 --> 00:59:21.060
Is there a motion to authorize the PUC
00:59:21.060 --> 00:59:22.800
to file a dockless intervention
00:59:22.800 --> 00:59:26.980
in the FERC docket number RM-21-17,
00:59:26.980 --> 00:59:28.340
directing staff and an outside counsel
00:59:28.340 --> 00:59:29.993
to monitor this FERC proceeding?
00:59:31.272 --> 00:59:32.750
So moved.
Second.
00:59:32.750 --> 00:59:34.078
All in favor, say aye.
Aye.
00:59:34.078 --> 00:59:34.911
Aye.
00:59:34.911 --> 00:59:35.744
Motion passes.
00:59:35.744 --> 00:59:36.577
Thank you, sir.
00:59:37.790 --> 00:59:41.840
We are not, well I guess
18 and 19 were covered
00:59:41.840 --> 00:59:43.040
under the previous item.
00:59:44.322 --> 00:59:46.590
And that will bring us to item 20,
00:59:46.590 --> 00:59:51.590
regarding transmission
and its relation to reliability.
00:59:52.450 --> 00:59:54.766
We've had several entities file material
00:59:54.766 --> 00:59:58.730
on this in response to
Commissioner Cobos' memo.
00:59:58.730 --> 01:00:00.940
And I suspect Commissioner Cobos
01:00:00.940 --> 01:00:04.173
has some thoughts and suggestions.
01:00:05.080 --> 01:00:06.430
Thank you, Chairman Lake.
01:00:06.430 --> 01:00:08.840
Just for background purposes,
01:00:08.840 --> 01:00:11.200
this is a follow-up on our discussion
01:00:11.200 --> 01:00:13.100
from the September 2nd open meeting
01:00:13.100 --> 01:00:16.620
and in response to
Chairman Lake's action items,
01:00:16.620 --> 01:00:18.140
during that open meeting,
01:00:18.140 --> 01:00:20.873
I requested that ERCOT
file additional information
01:00:20.873 --> 01:00:23.900
regarding long-term and
other interim transmission
01:00:23.900 --> 01:00:25.750
improvements to help
ensure reliability in the
01:00:25.750 --> 01:00:26.653
Rio Grande Valley.
01:00:27.720 --> 01:00:30.270
Also information related to
the boundary threshold used
01:00:30.270 --> 01:00:33.400
by ERCOT in transmission
planning for reliability purposes,
01:00:33.400 --> 01:00:36.490
and to also provide us an
update on ERCOT's ability
01:00:36.490 --> 01:00:38.440
to implement the new
consumer benefits test
01:00:38.440 --> 01:00:41.160
that is required by Senate Bill 1281.
01:00:41.160 --> 01:00:45.290
Woody Rickerson is here
today to discuss their filing.
01:00:45.290 --> 01:00:47.240
And while Woody makes his way up here,
01:00:47.240 --> 01:00:49.903
I will also say that on September 14th,
01:00:49.903 --> 01:00:52.300
I filed a memo requesting
that the transmission service
01:00:52.300 --> 01:00:54.060
providers that would be responsible
01:00:54.060 --> 01:00:56.880
for building the interim
transmission improvements
01:00:56.880 --> 01:00:59.900
that we had ERCOT and
those companies evaluate,
01:00:59.900 --> 01:01:01.330
which included a second circuit
01:01:01.330 --> 01:01:02.904
from San Miguel to Palmito
01:01:02.904 --> 01:01:06.530
and a new transmission
facility to close the loop
01:01:06.530 --> 01:01:08.451
from Palmito to Edinburgh.
01:01:08.451 --> 01:01:11.480
I requested that those
transmission service providers
01:01:11.480 --> 01:01:13.330
follow their estimated
timelines and costs
01:01:13.330 --> 01:01:17.080
to build their respective
portions of those facilities
01:01:17.080 --> 01:01:19.753
and they filed them on September 20th.
01:01:21.000 --> 01:01:23.420
And I requested that
representatives of Stack,
01:01:23.420 --> 01:01:26.160
AUP/ETT and Cherryland be here today,
01:01:26.160 --> 01:01:27.663
in case we have any questions,
01:01:30.144 --> 01:01:32.123
after we walk through ERCOT's filing.
01:01:34.500 --> 01:01:36.230
Where would
you like me to start?
01:01:36.230 --> 01:01:38.273
Just at the top with
Rio Grande Valley.
01:01:42.780 --> 01:01:45.201
So my name is Woody Rickerson.
01:01:45.201 --> 01:01:46.034
I'm the Vice President of Grid Planning
01:01:46.034 --> 01:01:46.990
and Operations at ERCOT.
01:01:48.140 --> 01:01:51.193
So we'll start with
the Rio Grande Valley.
01:01:53.620 --> 01:01:57.230
Most of the demand of
the Rio Grande Valley
01:01:57.230 --> 01:02:00.150
is in Cameron, Hidalgo
Starr, and Woolsey Counties,
01:02:00.150 --> 01:02:02.173
which is further south.
01:02:04.150 --> 01:02:07.630
The summer peak demand in that area
01:02:07.630 --> 01:02:11.983
is projected to reach
3200 megawatts in 2026.
01:02:13.920 --> 01:02:17.050
Using our established planning criteria,
01:02:17.050 --> 01:02:20.050
the existing system, if you
don't have any major outages,
01:02:20.050 --> 01:02:25.050
can reliably serve load
up through that point
01:02:25.560 --> 01:02:29.490
and then system changes
will be needed in 2027.
01:02:29.490 --> 01:02:31.360
That's the kind of status
of where we are right now.
01:02:31.360 --> 01:02:33.590
System changes
will need to have been
01:02:33.590 --> 01:02:35.007
completed by 2027.
01:02:35.007 --> 01:02:36.650
Required.
01:02:36.650 --> 01:02:37.963
And why?
01:02:37.963 --> 01:02:39.567
Is that a reliability need
that arises in 2027?
01:02:39.567 --> 01:02:41.340
That's a reliability need.
01:02:41.340 --> 01:02:43.720
The existing system will no longer
01:02:43.720 --> 01:02:47.950
be able to reliably serve,
without having overloads,
01:02:47.950 --> 01:02:50.150
physical overloads of the system,
01:02:50.150 --> 01:02:53.280
the load that's in that area in 2027.
01:02:53.280 --> 01:02:55.930
So they can serve,
just in layman's terms,
01:02:55.930 --> 01:02:59.750
right now the existing transmission
can serve 3200 megawatts
01:02:59.750 --> 01:03:04.750
of load, based on projections.
01:03:05.270 --> 01:03:10.270
After 2026, it will
not be able to serve-
01:03:10.750 --> 01:03:12.030
That's right.
01:03:12.030 --> 01:03:13.950
Any increased load beyond that.
01:03:13.950 --> 01:03:14.783
Right.
01:03:15.950 --> 01:03:17.613
So we don't need
to start in 2026,
01:03:17.613 --> 01:03:19.200
we need to start sooner.
01:03:19.200 --> 01:03:20.070
Absolutely, yeah.
01:03:20.070 --> 01:03:21.943
So yes.
01:03:23.870 --> 01:03:25.960
Just a little more
background on that area,
01:03:25.960 --> 01:03:28.783
it's primarily connected
to the rest of ERCOT
01:03:28.783 --> 01:03:33.783
through three 345 kb lines.
01:03:33.910 --> 01:03:34.903
Those are long lines.
01:03:34.903 --> 01:03:38.350
They're series compensated,
which has its own
01:03:38.350 --> 01:03:39.533
stability issues.
01:03:41.010 --> 01:03:44.100
Two of those lines
run parallel to the coast
01:03:44.100 --> 01:03:46.900
and make them susceptible
to hurricane damage,
01:03:46.900 --> 01:03:49.430
which is a constant
concern that we have.
01:03:49.430 --> 01:03:53.620
But not something that
is directly accounted
01:03:53.620 --> 01:03:54.973
for in planning standards.
01:03:56.600 --> 01:03:58.600
Woody, do you know
when those three circuits
01:03:58.600 --> 01:04:01.920
were put in place, were
placed into service, what year?
01:04:01.920 --> 01:04:04.630
And I did ask the TSPs as well
01:04:04.630 --> 01:04:08.044
but just for context, if
you can at this time?
01:04:08.044 --> 01:04:10.890
So the 345 line
coming from Laredo
01:04:10.890 --> 01:04:12.410
was put in place in 2016.
01:04:12.410 --> 01:04:16.240
So that westernmost line
runs parallel to the Rio Grande
01:04:16.240 --> 01:04:17.513
was 2016.
01:04:18.450 --> 01:04:19.283
All of it?
01:04:19.283 --> 01:04:21.260
From San Miguel to Palmito?
01:04:21.260 --> 01:04:24.000
From, you might have
to get some of the TSPs
01:04:24.000 --> 01:04:24.833
up here to help me on that.
01:04:24.833 --> 01:04:29.250
But from Laredo down to
the lower Rio Grande Valley,
01:04:29.250 --> 01:04:30.933
that was completed in 2016.
01:04:32.961 --> 01:04:34.560
The other two lines,
I don't know for sure
01:04:34.560 --> 01:04:35.564
when those were put in place.
01:04:35.564 --> 01:04:37.950
It was prior to the year 2000 though.
01:04:37.950 --> 01:04:41.030
Yeah, so in terms
of the western leg,
01:04:41.030 --> 01:04:41.970
the San Miguel-
01:04:41.970 --> 01:04:43.110
State your name
and who you're with.
01:04:43.110 --> 01:04:46.060
Piece was put in
place, energized in 2010.
01:04:46.060 --> 01:04:48.212
Can you please state
your name and who you're with?
01:04:48.212 --> 01:04:49.045
I'm sorry.
01:04:49.045 --> 01:04:51.610
Wayman Smith with American
Electric Power Service Corp,
01:04:51.610 --> 01:04:54.523
here for AUP Texas and ETT.
01:04:56.010 --> 01:04:59.700
Okay, and please
continue, what year?
01:04:59.700 --> 01:05:03.460
2010 for the San
Miguel to Lobo portion.
01:05:03.460 --> 01:05:08.460
And then, as Woody indicated,
from Lobo to Palmito, 2016.
01:05:09.791 --> 01:05:13.840
And then, as he alluded to, the two 345s
01:05:13.840 --> 01:05:16.650
on the east side of the valley
have been in place for awhile
01:05:16.650 --> 01:05:19.230
but those were actually reconductored
01:05:19.230 --> 01:05:21.760
in that 2016 timeframe as well.
01:05:25.910 --> 01:05:27.230
So continuing on,
01:05:27.230 --> 01:05:28.760
just a little bit more
background information.
01:05:28.760 --> 01:05:29.990
Can I ask you one question?
01:05:29.990 --> 01:05:32.350
You said that the two easternmost lines
01:05:32.350 --> 01:05:34.930
that are hurricane susceptible are not,
01:05:34.930 --> 01:05:38.163
that's not modeled into our
transmission planning standards?
01:05:41.580 --> 01:05:45.560
Well, the fact that
they are vulnerable
01:05:45.560 --> 01:05:47.090
because they're on the coast,
01:05:47.090 --> 01:05:48.990
doesn't give them any special treatment
01:05:48.990 --> 01:05:51.140
in our planning standards.
01:05:51.140 --> 01:05:55.640
But is there any,
should there be?
01:05:55.640 --> 01:05:57.373
I guess that's the question.
01:05:58.320 --> 01:06:00.630
Well, I think-
Since there are
01:06:00.630 --> 01:06:01.540
three lines that go to the valley
01:06:01.540 --> 01:06:04.660
and two of them are
susceptible to hurricanes.
01:06:04.660 --> 01:06:05.920
I think that's an integral part
01:06:05.920 --> 01:06:08.160
of what our recommendation
is today actually.
01:06:08.160 --> 01:06:08.993
Okay.
01:06:13.899 --> 01:06:17.200
There is also limited
conventional generation capacity
01:06:17.200 --> 01:06:20.690
in the Rio Grande Valley
and there's no new planned
01:06:20.690 --> 01:06:23.050
conventional generation
down there either.
01:06:23.050 --> 01:06:25.560
There's also a, we may have as much
01:06:25.560 --> 01:06:30.560
as seven gigawatts of our
wind and solar generation
01:06:31.250 --> 01:06:32.083
there as well.
01:06:32.083 --> 01:06:34.740
So there's a lot of
that that's coming on.
01:06:34.740 --> 01:06:36.790
Coming on or
is it there, Woody?
01:06:36.790 --> 01:06:39.533
A lot of it's there but there's
a lot of growth there too.
01:06:40.550 --> 01:06:44.013
So we could still have seven
gigawatts of wind and solar.
01:06:45.800 --> 01:06:48.590
The implication being
that if the wind's blowing
01:06:48.590 --> 01:06:50.470
and the sun's shining there,
01:06:50.470 --> 01:06:54.700
there's more power supply than is needed
01:06:54.700 --> 01:06:59.330
at the current time and
with transmission constraints,
01:06:59.330 --> 01:07:01.670
it can't get to the rest of Texas?
01:07:01.670 --> 01:07:04.340
Transmission definitely
has constraints there, yeah.
01:07:04.340 --> 01:07:06.740
And it's Gulf Coast wind?
01:07:06.740 --> 01:07:08.080
Some of it's Gulf Coast wind
01:07:08.080 --> 01:07:10.940
and some of it is along
the Rio Grande Valley
01:07:10.940 --> 01:07:14.080
or along the Rio Grande,
there's a lot in that area too,
01:07:14.080 --> 01:07:15.890
which has a little bit
different characteristic
01:07:15.890 --> 01:07:18.393
than the Gulf wind does.
01:07:20.256 --> 01:07:22.680
And that Gulf
Coast wind is more
01:07:22.680 --> 01:07:24.630
of a non-peak wind resource?
01:07:24.630 --> 01:07:26.290
That's correct,
the Gulf Coast wind
01:07:26.290 --> 01:07:30.150
has a higher on-peak
capacity factor than the non
01:07:31.670 --> 01:07:34.253
or wind that's located in other areas.
01:07:36.250 --> 01:07:37.860
And finally, the other
thing I'd point out
01:07:37.860 --> 01:07:40.750
is that we currently have
01:07:40.750 --> 01:07:44.180
16 generic transmission constraints
01:07:44.180 --> 01:07:46.030
that have to do with stability limits
01:07:46.886 --> 01:07:48.136
in the entire ERCOT grid.
01:07:49.370 --> 01:07:51.570
Seven of those are in
the Rio Grande Valley.
01:07:52.470 --> 01:07:56.760
And that has to do with
the amount of invertebrate
01:07:56.760 --> 01:07:59.160
generation that's
there and also the fact
01:07:59.160 --> 01:08:03.040
that Rio Grande Valley is
on the edge of the system
01:08:03.040 --> 01:08:05.533
and somewhat isolated
from the rest of the grid.
01:08:06.430 --> 01:08:09.800
So all these factors
that we're talking about,
01:08:09.800 --> 01:08:12.360
the relative isolation
of the Rio Grande Valley
01:08:12.360 --> 01:08:13.660
being on the edge of our system,
01:08:13.660 --> 01:08:16.980
being a long ways from a
lot of the rest of the system,
01:08:16.980 --> 01:08:19.640
the susceptibility to hurricane damage,
01:08:19.640 --> 01:08:23.890
load growth, it's a growing area,
01:08:23.890 --> 01:08:26.140
the number of GTCs
and the stability concerns
01:08:26.140 --> 01:08:30.323
we have there, the penetration
level of the wind and solar,
01:08:32.060 --> 01:08:35.330
the fact that we have outage
coordination issues there.
01:08:35.330 --> 01:08:37.230
If someone wants to
take a plant out of service,
01:08:37.230 --> 01:08:39.570
it's very difficult for them to do that.
01:08:39.570 --> 01:08:42.898
If someone wants to take
a 345 line out for service,
01:08:42.898 --> 01:08:45.040
it's very difficult to coordinate
those outages as well.
01:08:45.040 --> 01:08:47.489
Those outages can't occur right now
01:08:47.489 --> 01:08:50.510
during anything near a peak condition.
01:08:50.510 --> 01:08:52.600
They have to occur
during off-peak conditions.
01:08:52.600 --> 01:08:54.890
And when you have competing entities
01:08:54.890 --> 01:08:56.470
wanting to take those same outages,
01:08:56.470 --> 01:08:59.070
it becomes very difficult
too to coordinate outages.
01:09:00.127 --> 01:09:02.240
And that's for both
transmission and generation.
01:09:02.240 --> 01:09:05.463
And also the three
lines that are coming in
01:09:05.463 --> 01:09:09.647
are series compensated,
which causes stability concerns
01:09:09.647 --> 01:09:13.190
and it also causes
sub-synchronous residence issues
01:09:13.190 --> 01:09:14.293
with generators.
01:09:15.750 --> 01:09:19.370
That's the price you pay for
putting the series compensation
01:09:19.370 --> 01:09:20.870
in on those lines.
01:09:20.870 --> 01:09:24.190
But all of those factors,
01:09:24.190 --> 01:09:27.150
we have those factors in
other places in the grid as well.
01:09:27.150 --> 01:09:30.372
But I think the Rio Grande
Valley may be the only place
01:09:30.372 --> 01:09:32.883
where all of those factors
are part of the story.
01:09:35.310 --> 01:09:39.980
And so that combination
of all of those factors
01:09:42.070 --> 01:09:44.260
makes the Rio Grande Valley unique
01:09:44.260 --> 01:09:47.593
and it also stretches
our planning criteria
01:09:47.593 --> 01:09:48.763
that we currently have.
01:09:51.590 --> 01:09:53.413
So in order to-
01:09:53.413 --> 01:09:56.420
What do you mean
stretches the planning criteria?
01:09:56.420 --> 01:09:58.490
It puts us right on the edge
01:09:58.490 --> 01:10:01.170
of having to rely on
the system all the time.
01:10:01.170 --> 01:10:03.323
We're just in time with improvements.
01:10:04.670 --> 01:10:07.450
So more transmission
would probably be better.
01:10:07.450 --> 01:10:09.250
More transmission
would be better.
01:10:11.140 --> 01:10:14.807
Getting more transmission
causes reliability issues,
01:10:16.580 --> 01:10:18.623
which prevents getting
more transmission.
01:10:21.560 --> 01:10:25.106
So in order to address
that combination of factors,
01:10:25.106 --> 01:10:28.250
we looked at, along with the TSPs,
01:10:28.250 --> 01:10:32.740
we've looked at multiple
transmission solutions down there
01:10:32.740 --> 01:10:34.710
and there was a short
list that was filed with you
01:10:34.710 --> 01:10:37.040
of two long-term improvement options
01:10:37.040 --> 01:10:38.993
for the Rio Grande Valley.
01:10:40.500 --> 01:10:44.200
Those two options have
some things in common.
01:10:44.200 --> 01:10:48.530
They involve a 345 line
that comes from San Miguel
01:10:48.530 --> 01:10:49.810
and goes into the Rio Grande Valley.
01:10:49.810 --> 01:10:51.660
It also involves another 345 line
01:10:51.660 --> 01:10:54.150
that cuts across from the Laredo area
01:10:54.150 --> 01:10:57.800
to about halfway between
Corpus and the Rio Grande Valley,
01:10:57.800 --> 01:10:58.890
so it's kind of a cross.
01:10:58.890 --> 01:11:01.868
And there's two
different versions of that.
01:11:01.868 --> 01:11:04.900
Of those two versions,
option two is the plan
01:11:04.900 --> 01:11:08.390
that ERCOT recommends
to ensure that the grid
01:11:08.390 --> 01:11:09.790
continues to serve the load.
01:11:11.840 --> 01:11:13.450
So if you compare the two options
01:11:13.450 --> 01:11:15.283
that's on slide seven for you,
01:11:16.360 --> 01:11:18.890
the two options are pretty similar
01:11:18.890 --> 01:11:23.890
in the estimated 345 kb
right-of-way that they require.
01:11:25.320 --> 01:11:27.900
The estimated cost is similar.
01:11:27.900 --> 01:11:32.080
But option two is significantly better
01:11:32.080 --> 01:11:37.443
because of stability
constraints, SSR mitigation.
01:11:38.520 --> 01:11:41.980
It's further from the
coast so it reduces
01:11:41.980 --> 01:11:45.333
the impact of potential
hurricane damage.
01:11:48.090 --> 01:11:52.560
And so we recommend that the option two
01:11:52.560 --> 01:11:53.760
is the preferred option.
01:11:55.520 --> 01:11:57.093
It's a tier one project.
01:11:58.033 --> 01:11:59.593
A CCN will be required.
01:12:00.830 --> 01:12:03.100
We've presented this to
the Regional Planning Group
01:12:03.100 --> 01:12:06.873
on September 15th and
we're collecting comments now.
01:12:09.820 --> 01:12:13.440
Unless directed otherwise,
we plan on seeking
01:12:13.440 --> 01:12:14.930
TAC review and board enforcement money
01:12:14.930 --> 01:12:18.574
into the year for that option two.
01:12:18.574 --> 01:12:23.574
Woody, is that
option two, the 345 kb
01:12:23.650 --> 01:12:25.450
is double-circuit capable?
01:12:25.450 --> 01:12:27.680
Is it gonna include two
circuits or one circuit?
01:12:27.680 --> 01:12:29.260
It will be two circuits.
01:12:29.260 --> 01:12:31.210
When it's built?
Yes.
01:12:31.210 --> 01:12:32.043
Okay.
01:12:34.730 --> 01:12:39.730
So Woody, on costs,
sorry, I gotta look at that.
01:12:42.820 --> 01:12:44.140
That's a lot.
01:12:44.140 --> 01:12:45.510
Big numbers.
Those are big numbers.
01:12:45.510 --> 01:12:49.523
Those are CREZ type
numbers, ballpark ish.
01:12:51.560 --> 01:12:55.160
But what we get out of that
is you use latest technology,
01:12:55.160 --> 01:12:56.580
you kind of have a hardened system,
01:12:56.580 --> 01:13:01.580
it's interior, and I'm
trying to frame this
01:13:02.230 --> 01:13:06.001
for the hew and cry
that's sure to come up.
01:13:06.001 --> 01:13:08.210
Well, it would supply
the needs of the Valley
01:13:08.210 --> 01:13:10.913
from a low-growth
perspective through 2040.
01:13:10.913 --> 01:13:12.750
Through 2040,
yep, all right, got it.
01:13:12.750 --> 01:13:15.200
So the reliability need
that would present itself
01:13:15.200 --> 01:13:18.213
in 2027 would be moved back to 2040?
01:13:18.213 --> 01:13:21.730
Yes.
At least.
01:13:21.730 --> 01:13:23.700
That would be
greater than 2040.
01:13:23.700 --> 01:13:26.070
Our load forecasting gets a little hazy
01:13:26.070 --> 01:13:27.300
when you get out that many years.
01:13:27.300 --> 01:13:29.670
But up until at least 2040,
01:13:29.670 --> 01:13:32.220
we don't see any more reliability issues
01:13:32.220 --> 01:13:34.657
serving load in the Valley.
01:13:34.657 --> 01:13:37.560
And what were the
alternatives that you,
01:13:37.560 --> 01:13:39.470
I'm sure there were a handful of them.
01:13:39.470 --> 01:13:41.540
You don't have to go through
every single one of them.
01:13:41.540 --> 01:13:44.653
But obviously, building
a $1.2 billion line,
01:13:45.970 --> 01:13:49.440
requiring likely 100% new right away
01:13:49.440 --> 01:13:54.440
through the center part of
the Rio Grande Valley is hard.
01:13:54.650 --> 01:13:55.870
I know that's hard work.
01:13:55.870 --> 01:13:58.763
I know siting transmission,
working with landowners,
01:13:59.740 --> 01:14:01.380
it's a hard thing.
01:14:01.380 --> 01:14:04.890
So what were the comparison points
01:14:04.890 --> 01:14:06.210
that made you all say oh,
01:14:06.210 --> 01:14:09.533
this is 100% worth it
and the other ones aren't?
01:14:10.844 --> 01:14:14.120
The main option
we compared against
01:14:14.120 --> 01:14:15.470
was very similar in nature.
01:14:16.374 --> 01:14:17.207
It required very similar lines,
01:14:17.207 --> 01:14:19.290
the endpoints were
a little bit different,
01:14:19.290 --> 01:14:21.800
it was not quite as good an option
01:14:21.800 --> 01:14:24.250
because of outage coordination issues
01:14:24.250 --> 01:14:25.920
and also because it doesn't help as much
01:14:25.920 --> 01:14:29.530
with the SSR issues
that the other line did.
01:14:29.530 --> 01:14:32.970
So as far as cost goes,
it's was a very similar cost.
01:14:32.970 --> 01:14:33.803
As far as right-of-way goes,
01:14:33.803 --> 01:14:36.160
it's very similar in right-of-way.
01:14:36.160 --> 01:14:39.540
The option two thought
definitely had some advantages
01:14:39.540 --> 01:14:42.040
in outage coordination,
in SSR reduction.
01:14:42.040 --> 01:14:44.793
A little bit further from the coast
01:14:44.793 --> 01:14:47.589
so it's a little less likely
to have hurricane damage
01:14:47.589 --> 01:14:49.710
and things like that.
01:14:49.710 --> 01:14:51.763
Now, there are some other options there.
01:14:53.500 --> 01:14:55.080
There are some existing,
01:14:55.080 --> 01:14:58.420
those existing 345
lines, there is an option
01:14:58.420 --> 01:15:02.060
on the one that comes
down the Rio Grande there,
01:15:02.060 --> 01:15:04.500
you could add a second circuit there
01:15:04.500 --> 01:15:06.380
and that's not as costly.
01:15:06.380 --> 01:15:10.502
However, it is not what we recommend
01:15:10.502 --> 01:15:12.430
as a reliability project.
01:15:12.430 --> 01:15:14.680
It would be continuing
to do what we've done
01:15:14.680 --> 01:15:17.113
in the past, which is
just one step ahead.
01:15:18.673 --> 01:15:23.106
Someone described that as you've got
01:15:23.106 --> 01:15:26.070
the tachometer on
your car is in the yellow.
01:15:26.070 --> 01:15:28.550
It's not in the red
yet, it's in the yellow.
01:15:28.550 --> 01:15:31.220
That second circuit would
mean keeping that tachometer
01:15:31.220 --> 01:15:32.053
in the yellow.
01:15:33.200 --> 01:15:35.770
Building this takes us back out
01:15:35.770 --> 01:15:37.300
so we have a little more margin.
01:15:37.300 --> 01:15:39.800
I just wanna provide
a point of clarification
01:15:39.800 --> 01:15:43.630
because I've had filings
specifically made to me,
01:15:43.630 --> 01:15:45.820
and I'm not the only one
making the decision here
01:15:45.820 --> 01:15:47.220
on the Rio Grande Valley.
01:15:47.220 --> 01:15:50.672
I think my peers and I
are extremely interested
01:15:50.672 --> 01:15:55.450
in ensuring reliability in
the Rio Grande Valley.
01:15:55.450 --> 01:15:58.768
So I'm responding to the
letters that were provided,
01:15:58.768 --> 01:16:02.980
and that is there's a
lot of confusion out there
01:16:02.980 --> 01:16:06.082
that I hear in the ERCOT
stakeholder process
01:16:06.082 --> 01:16:09.072
and concerns with the second circuit.
01:16:09.072 --> 01:16:13.140
And the concern being that
the second circuit shouldn't be
01:16:13.140 --> 01:16:18.140
a replacement for the new
option two long-term project.
01:16:20.420 --> 01:16:22.200
And I just wanna be very clear that
01:16:22.200 --> 01:16:27.040
at no time did I ever say
that it was an either/or
01:16:27.040 --> 01:16:29.060
or versus project.
01:16:29.060 --> 01:16:31.840
But somehow the messaging
has gotten confused
01:16:31.840 --> 01:16:33.700
and there's been a lot of pushback
01:16:33.700 --> 01:16:34.900
on the second circuit saying,
01:16:34.900 --> 01:16:38.617
it's not an option for
replacing the new project
01:16:40.200 --> 01:16:41.320
or deferring it.
01:16:41.320 --> 01:16:43.670
And I just wanna be
very clear that that has
01:16:43.670 --> 01:16:45.030
never been the case.
01:16:45.030 --> 01:16:46.730
We're looking at both of them.
01:16:46.730 --> 01:16:49.053
It's an and, not an either/or.
01:16:50.070 --> 01:16:53.483
And so I just want to level
set there and be very clear.
01:16:54.460 --> 01:16:55.400
Okay.
01:16:55.400 --> 01:16:56.920
And when you say it's not gonna
01:16:56.920 --> 01:16:58.670
to provide a reliability benefit,
01:16:58.670 --> 01:17:00.420
in your presentation today,
01:17:00.420 --> 01:17:02.830
you say that it pushes
back the reliability need
01:17:02.830 --> 01:17:05.220
from 2027 to 2033.
01:17:05.220 --> 01:17:07.670
How long is it gonna
take to build a new project?
01:17:08.990 --> 01:17:10.613
What's your best cost estimate?
01:17:11.500 --> 01:17:14.450
Option two estimate is that
it will be completed in 2027.
01:17:15.470 --> 01:17:19.491
Option two in four years.
01:17:19.491 --> 01:17:22.810
Okay, what's your best estimate
for completing that project?
01:17:22.810 --> 01:17:24.940
No, we think that option two,
01:17:24.940 --> 01:17:27.240
we could complete that in five years.
01:17:27.240 --> 01:17:29.720
So we're sitting here
today, if you start in 2022,
01:17:29.720 --> 01:17:31.043
that'd be '26.
01:17:32.150 --> 01:17:33.910
Right when you were
about to hit the red.
01:17:33.910 --> 01:17:36.170
Okay, so then on the second circuit,
01:17:36.170 --> 01:17:37.540
and I know you're
gonna cover it in a minute,
01:17:37.540 --> 01:17:39.530
but I just wanna make
sure that this is clear too,
01:17:39.530 --> 01:17:41.428
is that in the filings I've received,
01:17:41.428 --> 01:17:45.950
most of the line that's owned
by AUP/EDT is 34 months,
01:17:45.950 --> 01:17:47.400
if you do it hot.
01:17:47.400 --> 01:17:52.400
And so if you're looking
at it as an second circuit
01:17:52.540 --> 01:17:57.540
and new 345 kb project, you are,
01:17:57.590 --> 01:18:00.340
most likely the construction it appears,
01:18:00.340 --> 01:18:02.450
and please clarify me if I'm wrong,
01:18:02.450 --> 01:18:06.140
that if we decided to
add a second circuit,
01:18:06.140 --> 01:18:08.370
then that second circuit
would be put in place
01:18:08.370 --> 01:18:11.960
maybe a year or two, maybe even three,
01:18:11.960 --> 01:18:13.290
before the new project.
01:18:13.290 --> 01:18:14.880
So then you'd have a staggered,
01:18:14.880 --> 01:18:19.530
sort of phased implementation
of new infrastructure
01:18:19.530 --> 01:18:22.300
that would both provide
reliability to the Valley.
01:18:22.300 --> 01:18:25.640
So Woody, in your opinion,
would both of those options
01:18:25.640 --> 01:18:28.683
provide a reliability benefit
together to the Valley?
01:18:29.783 --> 01:18:33.410
The second circuit definitely
has a reliability benefit
01:18:33.410 --> 01:18:34.243
to the Valley.
01:18:34.243 --> 01:18:37.023
It does push that need out as well.
01:18:37.890 --> 01:18:39.220
Yes.
01:18:39.220 --> 01:18:41.075
And option two definitely has,
01:18:41.075 --> 01:18:44.399
I mean, that's the fix for the Valley.
01:18:44.399 --> 01:18:46.433
That is the ERCOT recommendation.
01:18:47.410 --> 01:18:50.000
The second circuit also
has a reliability benefit,
01:18:50.000 --> 01:18:54.270
but we just don't wanna
see that ultimate fix
01:18:54.270 --> 01:18:55.720
get pushed back.
01:18:55.720 --> 01:18:58.950
Right, and again, it's
not an either/or or versus,
01:18:58.950 --> 01:19:00.763
it's an and that I'm looking at.
01:19:02.220 --> 01:19:05.310
When the original
lines were built,
01:19:05.310 --> 01:19:08.080
the Laredo to Rio
Grande Valley and such,
01:19:08.080 --> 01:19:12.000
and I'm assuming here this
is, and correct me if I'm wrong,
01:19:12.000 --> 01:19:14.910
that they were all single circuits
01:19:14.910 --> 01:19:16.330
and they were put on
double-circuit towers.
01:19:16.330 --> 01:19:17.163
Is that right?
01:19:18.930 --> 01:19:21.330
If everybody's pushing
back saying we shouldn't
01:19:21.330 --> 01:19:22.890
put another circuit there,
01:19:22.890 --> 01:19:25.750
then why did we go and
use double-circuit towers
01:19:25.750 --> 01:19:27.050
and put that in rate-based,
01:19:27.050 --> 01:19:30.490
if that was never gonna be a opportunity
01:19:30.490 --> 01:19:34.960
to double-circuit those structures?
01:19:34.960 --> 01:19:37.960
Yeah, if I could maybe,
maybe add a little bit of clarity.
01:19:39.160 --> 01:19:42.090
I think that the concern
was maybe in the way
01:19:42.090 --> 01:19:45.210
this was maybe packaged
a little bit in the PowerPoints
01:19:45.210 --> 01:19:48.430
because it says, well, if
you string second circuits,
01:19:48.430 --> 01:19:52.180
that pushes out the
reliability need until 2033,
01:19:52.180 --> 01:19:54.050
which might lead you to the conclusion,
01:19:54.050 --> 01:19:57.470
oh, well, we don't
need anything 'til 2033.
01:19:57.470 --> 01:20:00.010
Let's just kick the can down the road
01:20:00.010 --> 01:20:03.640
on a long-term option two solution.
01:20:03.640 --> 01:20:05.918
And I think that was the concern.
01:20:05.918 --> 01:20:07.700
I just heard a
recommendation not
01:20:07.700 --> 01:20:09.880
to build the second circuit.
01:20:09.880 --> 01:20:10.890
Well, I-
And I would appreciate
01:20:10.890 --> 01:20:13.450
the concerns being brought to my office
01:20:13.450 --> 01:20:16.790
instead of being voiced at RPG
01:20:16.790 --> 01:20:19.210
against the Commission suggestion.
01:20:19.210 --> 01:20:22.280
And maybe coming to
my office before you decide
01:20:22.280 --> 01:20:23.383
to write me letters.
01:20:24.290 --> 01:20:25.123
Understood.
01:20:26.040 --> 01:20:30.300
But just to be clear, from
AUP, Texas ETT perspective,
01:20:30.300 --> 01:20:31.810
does the second circuit have value?
01:20:31.810 --> 01:20:32.770
Absolutely.
01:20:32.770 --> 01:20:33.750
It has value.
01:20:33.750 --> 01:20:36.190
It improves the load serving capability.
01:20:36.190 --> 01:20:38.580
As a short-term, interim solution,
01:20:38.580 --> 01:20:41.610
until we can get that
long-term solution in place,
01:20:41.610 --> 01:20:43.130
does that make sense?
01:20:43.130 --> 01:20:45.143
It absolutely provides a value.
01:20:46.020 --> 01:20:49.890
But I just, in my mind
I would be concerned
01:20:49.890 --> 01:20:53.200
that not to let that overshadow our need
01:20:53.200 --> 01:20:54.343
for that for a source.
01:20:55.476 --> 01:20:56.718
Okay, 'cause I mean, I
guess I've been a little confused
01:20:56.718 --> 01:21:00.134
with the filings I got
on Monday the 20th
01:21:00.134 --> 01:21:01.480
versus the letter I got last night
01:21:01.480 --> 01:21:04.810
with respect to how AUP/ETT
feels about the second circuit.
01:21:04.810 --> 01:21:09.100
Because in my meetings
directly with Mr. Fox
01:21:09.100 --> 01:21:11.370
and there was a lot of
interest in, you know,
01:21:11.370 --> 01:21:15.130
there seemed to be no
issues, no reliability risk
01:21:15.130 --> 01:21:17.320
with the second
circuit, y'all can do it hot,
01:21:17.320 --> 01:21:19.010
you can get it done,
get it done quickly,
01:21:19.010 --> 01:21:21.420
get it done quicker than ERCOT says.
01:21:21.420 --> 01:21:23.990
And then all of a sudden
I'm getting a letter last night
01:21:23.990 --> 01:21:25.120
saying, well, you know,
01:21:25.120 --> 01:21:27.270
it might get more
complicated and no mention
01:21:27.270 --> 01:21:28.440
of the hot work.
01:21:28.440 --> 01:21:32.500
And again, trying to
combine the two projects
01:21:32.500 --> 01:21:34.380
as competing projects.
01:21:34.380 --> 01:21:38.050
So that's what I'm concerned about
01:21:38.050 --> 01:21:40.610
is that I've gotten mixed messages.
01:21:40.610 --> 01:21:44.950
The last thing we wanna
do is disturb existing reliability
01:21:44.950 --> 01:21:45.800
in the Valley.
01:21:45.800 --> 01:21:46.990
That's the last thing we wanna do.
01:21:46.990 --> 01:21:49.690
We want to bring additional
reliability to the Valley.
01:21:51.080 --> 01:21:54.480
So if we were to order
the second circuit,
01:21:54.480 --> 01:21:56.800
we would want that done
in the best way possible
01:21:56.800 --> 01:21:59.650
to maintain existing
reliability in the Valley.
01:21:59.650 --> 01:22:00.483
Absolutely, understood.
01:22:00.483 --> 01:22:03.510
And I have been assured
by your company, ETT,
01:22:03.510 --> 01:22:06.820
that you can do it hot,
you can do it reliably.
01:22:06.820 --> 01:22:10.640
ERCOT has to approve
and coordinate outages.
01:22:10.640 --> 01:22:11.720
But I want to make sure we're going
01:22:11.720 --> 01:22:12.893
to order that line,
that it's going to done,
01:22:12.893 --> 01:22:15.360
that that second circuit
is gonna be built reliably.
01:22:15.360 --> 01:22:18.163
So we're not gonna
put the Valley at risk,
01:22:18.163 --> 01:22:20.690
although having one
line there for so long,
01:22:20.690 --> 01:22:24.111
that's built for two lines,
double-circuit capable
01:22:24.111 --> 01:22:27.420
for so long, for at
least 11 years part of it,
01:22:27.420 --> 01:22:29.670
has put us in a bind now,
01:22:29.670 --> 01:22:32.070
because now we have
infrastructure there that we want
01:22:32.070 --> 01:22:32.903
to add another line.
01:22:32.903 --> 01:22:37.160
And so now there's this
reliability coordinating outage.
01:22:37.160 --> 01:22:38.190
I mean, it should have just been built
01:22:38.190 --> 01:22:40.250
with the two circuits
that from the beginning,
01:22:40.250 --> 01:22:41.083
it sounds like.
01:22:41.083 --> 01:22:42.933
I would like to
understand why it wasn't.
01:22:44.300 --> 01:22:47.610
If it was approved, if
a CCN was approved
01:22:47.610 --> 01:22:50.697
for a 345 double-circuit
capable transmission line
01:22:50.697 --> 01:22:53.160
and the ratepayers are
paying for extra infrastructure
01:22:53.160 --> 01:22:56.063
for a second line, why
wasn't the second line added?
01:22:56.920 --> 01:22:58.506
Yeah, the short
answer is adding
01:22:58.506 --> 01:23:01.180
the second circuit adds cost.
01:23:01.180 --> 01:23:03.390
And if we can not,
01:23:03.390 --> 01:23:05.150
at the time those decisions were made,
01:23:05.150 --> 01:23:09.510
if we cannot definitively
show, based on ERCOT
01:23:09.510 --> 01:23:11.500
planning criteria, that there's a need
01:23:11.500 --> 01:23:13.940
for that additional capacity associated
01:23:13.940 --> 01:23:17.094
with the second circuit,
it doesn't get endorsed.
01:23:17.094 --> 01:23:19.660
Have you brought
it forward since
01:23:19.660 --> 01:23:23.280
for ERCOT to review
in the last five, 10 years?
01:23:23.280 --> 01:23:25.400
Because the Valley has
exploded in population
01:23:25.400 --> 01:23:27.950
and economic growth,
and I'm surprised to hear
01:23:27.950 --> 01:23:28.810
that there's just no need.
01:23:28.810 --> 01:23:33.180
No, we have, AUP
has made two RPG filings
01:23:33.180 --> 01:23:37.800
since that line was
put in service in 2016,
01:23:37.800 --> 01:23:39.770
we have made two RPG filings.
01:23:39.770 --> 01:23:42.690
In both of those RPG filings,
we looked at alternatives
01:23:42.690 --> 01:23:46.210
that included the new
bringing a fourth source
01:23:46.210 --> 01:23:49.320
in as well as stringing
the second circuits.
01:23:49.320 --> 01:23:51.830
And in neither case,
did we get endorsement
01:23:51.830 --> 01:23:55.680
because we said, well,
the need date is further out
01:23:55.680 --> 01:23:58.794
so we're gonna, put a band-aid on it
01:23:58.794 --> 01:24:00.630
and we're going to put
additional dynamic reactive
01:24:00.630 --> 01:24:02.840
in the Valley, we're gonna
push it out a little bit more.
01:24:02.840 --> 01:24:06.210
And so far that has been the decision.
01:24:06.210 --> 01:24:07.370
But we have brought that forward.
01:24:07.370 --> 01:24:09.970
We have brought
forward both a new source
01:24:09.970 --> 01:24:11.970
as well as stringing the second circuit.
01:24:13.060 --> 01:24:13.893
Okay.
01:24:13.893 --> 01:24:15.440
Well, the band-aid
seems to be the reason
01:24:15.440 --> 01:24:17.360
why we're always playing
catch up in the Valley.
01:24:17.360 --> 01:24:18.273
100% agree.
01:24:19.890 --> 01:24:23.550
And no other
dispatchable resource
01:24:23.550 --> 01:24:26.137
to any degree is moving into the valley
01:24:26.137 --> 01:24:28.370
and that's this catch-up problem.
01:24:28.370 --> 01:24:31.110
ID generation, to help levelize this.
01:24:31.110 --> 01:24:33.630
And we can't have it islanded.
01:24:33.630 --> 01:24:34.474
And at the end of the day,
01:24:34.474 --> 01:24:37.444
that's a policy decision
for the State of Texas
01:24:37.444 --> 01:24:39.480
and certainly us.
01:24:39.480 --> 01:24:41.570
That's what's coming in here
01:24:41.570 --> 01:24:45.730
and if option two is one
of those right choices,
01:24:45.730 --> 01:24:49.275
and I appreciate this briefing
because it helps frame it
01:24:49.275 --> 01:24:51.480
at 1.28 billion.
01:24:51.480 --> 01:24:54.190
And then the other options,
01:24:54.190 --> 01:24:57.583
which redundancy is helpful
in a disaster-prone area,
01:24:57.583 --> 01:24:59.307
that is currently islanded-
01:24:59.307 --> 01:25:01.300
And the most western line.
Yes, ma'am.
01:25:01.300 --> 01:25:03.393
400 to 450 million.
01:25:04.580 --> 01:25:07.128
Look, we've gotta
envision it as a whole.
01:25:07.128 --> 01:25:10.420
That happens to be the cost
of a combined cycle gas plant,
01:25:10.420 --> 01:25:13.490
somewhere in the valley,
if it was ever to deploy.
01:25:13.490 --> 01:25:15.150
I will say, and I
wanna be clear,
01:25:15.150 --> 01:25:17.770
that I do think that the
new long-term project
01:25:17.770 --> 01:25:21.120
has a lot of value and
ERCOT supports it.
01:25:21.120 --> 01:25:24.453
It has a plethora of
value for the Valley.
01:25:25.423 --> 01:25:29.660
And two, with respect
to your cost concerns,
01:25:29.660 --> 01:25:32.060
in no way will we be making
a cost of determination
01:25:32.060 --> 01:25:34.010
with our discussions or
any actions that we make.
01:25:34.010 --> 01:25:34.960
Right, understood.
01:25:34.960 --> 01:25:36.160
Today.
Today.
01:25:36.160 --> 01:25:37.280
It is not a blank check.
01:25:37.280 --> 01:25:40.150
As Chairman Lake has
said in prior open meeting,
01:25:40.150 --> 01:25:41.373
it is not a blank check.
01:25:42.347 --> 01:25:44.950
The utilities would still
be expected to meet
01:25:44.950 --> 01:25:47.160
rate making principles and standards
01:25:47.160 --> 01:25:50.180
that comply with PURA
and the Commission's rules.
01:25:50.180 --> 01:25:53.210
So whatever actions, if
we take any actions on this
01:25:53.210 --> 01:25:55.010
from our dias ordering construction,
01:25:55.010 --> 01:25:57.154
that it's no determination on costs.
01:25:57.154 --> 01:25:58.301
Sure.
We will still expect staff
01:25:58.301 --> 01:26:01.030
to review those costs, as
they would review all other
01:26:01.030 --> 01:26:04.463
transmission-related and
other costs in a rate case.
01:26:05.330 --> 01:26:08.440
I would want to chime
in on the cost issue.
01:26:08.440 --> 01:26:10.640
And that is I've scratched
my head a little bit
01:26:10.640 --> 01:26:13.370
to figure out where $450 million comes
01:26:13.370 --> 01:26:17.660
from on a second circuit
on existing structures
01:26:17.660 --> 01:26:19.123
and existing rights of way.
01:26:20.167 --> 01:26:21.270
I know there are three new substations,
01:26:21.270 --> 01:26:23.940
but adding a second circuit.
01:26:23.940 --> 01:26:25.130
So I struggle with that.
01:26:25.130 --> 01:26:27.290
So I'd love to have some more input
01:26:27.290 --> 01:26:31.500
on why a second circuit costs so much
01:26:31.500 --> 01:26:33.650
on an existing structure.
01:26:33.650 --> 01:26:38.150
And I would assume, again,
I could be very, very wrong,
01:26:38.150 --> 01:26:40.810
but when you built the first structure
01:26:40.810 --> 01:26:42.003
and the single circuit,
01:26:43.096 --> 01:26:45.850
you probably built the substations
01:26:45.850 --> 01:26:47.350
in such that that could be added to,
01:26:47.350 --> 01:26:48.950
if you were gonna add a second circuit.
01:26:48.950 --> 01:26:51.880
So it begs my question
of why would you need
01:26:51.880 --> 01:26:53.203
three more substations?
01:26:54.207 --> 01:26:55.610
So if you can just kind of fill me in
01:26:55.610 --> 01:26:56.910
on a little bit of
that, that'd be great.
01:26:56.910 --> 01:26:59.818
I will and I'll try.
01:26:59.818 --> 01:27:01.440
I have a hard time doing it sometimes
01:27:01.440 --> 01:27:02.370
without drawing on a board.
01:27:02.370 --> 01:27:07.370
But the short answer
is the existing structures
01:27:07.660 --> 01:27:09.950
are double-circuit capable, but the arms
01:27:09.950 --> 01:27:12.493
are not on the structures.
Okay.
01:27:12.493 --> 01:27:15.040
So, they're set up,
they're drilled and tapped
01:27:15.040 --> 01:27:18.240
to add the other arm, but
the other arm's not there.
01:27:18.240 --> 01:27:21.720
So there's a lot of costs
involved there, number one.
01:27:21.720 --> 01:27:26.020
And then the second issue
is when you make turns,
01:27:26.020 --> 01:27:28.570
you can't make those turns,
01:27:28.570 --> 01:27:30.530
we refer to them as heavy angles.
01:27:30.530 --> 01:27:33.920
The really severe turns,
01:27:33.920 --> 01:27:36.720
you can't make those with circuits
01:27:36.720 --> 01:27:38.300
on both sides of the towers.
01:27:38.300 --> 01:27:42.140
And so what happens is when
you get to one of those turns,
01:27:42.140 --> 01:27:46.080
you have a single structure
that each circuit will hit
01:27:46.080 --> 01:27:47.940
in order to make the bend.
01:27:47.940 --> 01:27:50.360
And so every place, there's a turn,
01:27:50.360 --> 01:27:53.530
we have to go put a structure
there, it's not there today.
01:27:53.530 --> 01:27:55.623
So it's the combination of,
01:27:56.714 --> 01:28:01.370
from a material and engineering
and design perspective,
01:28:01.370 --> 01:28:05.140
it's one adding that second
arm to the existing structures,
01:28:05.140 --> 01:28:07.410
and then two, setting
all of the structures
01:28:07.410 --> 01:28:09.450
that are needed to make those turns.
01:28:09.450 --> 01:28:12.090
And when you look at
those estimates, in particular,
01:28:12.090 --> 01:28:17.090
between the Lobo to
North Ed section versus
01:28:17.125 --> 01:28:20.440
North Ed to Palmito,
there's a significant difference
01:28:20.440 --> 01:28:23.010
in costs for stringing
the second circuit
01:28:23.010 --> 01:28:24.630
on those two sections.
01:28:24.630 --> 01:28:26.200
And it gets back to what I just said.
01:28:26.200 --> 01:28:28.100
The section from North Ed to Palmito,
01:28:28.100 --> 01:28:29.637
there are a bunch of turns,
01:28:29.637 --> 01:28:33.330
twists and turns as
you traverse that circuit.
01:28:33.330 --> 01:28:36.320
So you have to set a
bunch of additional structures
01:28:36.320 --> 01:28:38.750
in order to make all those turns.
01:28:38.750 --> 01:28:40.250
Those three new substations.
01:28:41.120 --> 01:28:43.277
I mean, substations are expensive
01:28:43.277 --> 01:28:45.514
and in some cases are needed.
01:28:45.514 --> 01:28:47.756
And in your filing on September 20th,
01:28:47.756 --> 01:28:48.740
you say that three
substations are needed
01:28:48.740 --> 01:28:51.140
for three wind farms.
Correct.
01:28:51.140 --> 01:28:52.180
Can you clarify, why?
01:28:52.180 --> 01:28:55.640
Yeah, so, so, so
what happened is
01:28:55.640 --> 01:28:58.160
in order to connect those wind farms,
01:28:58.160 --> 01:29:03.160
we built circuits, radial if you will,
01:29:03.860 --> 01:29:05.900
out of existing stations,
01:29:05.900 --> 01:29:10.722
utilizing portions of
the open second circuit.
01:29:10.722 --> 01:29:13.922
And it's hard to see without a picture,
01:29:13.922 --> 01:29:17.260
but basically you have, for example,
01:29:17.260 --> 01:29:20.083
a line coming out
of the Del Sol station.
01:29:20.960 --> 01:29:24.110
Utilizing that second
circuit open position for say,
01:29:24.110 --> 01:29:27.680
15, 20 miles, and then going back
01:29:27.680 --> 01:29:30.250
and then going back to the wind farm.
01:29:30.250 --> 01:29:33.160
And so what happens when
we string the second circuit,
01:29:33.160 --> 01:29:35.810
at the point where that
line going to the wind farm
01:29:35.810 --> 01:29:38.590
comes in and hits
the existing structure,
01:29:38.590 --> 01:29:40.660
we have to put a station there.
01:29:40.660 --> 01:29:43.990
And those are the three
stations that we're talking about.
01:29:43.990 --> 01:29:45.250
So to come to this conclusion,
01:29:45.250 --> 01:29:47.513
did you run power flow models?
01:29:47.513 --> 01:29:49.690
I'm sorry.
Power flow models.
01:29:49.690 --> 01:29:50.690
Oh, I'm asking him, sorry.
01:29:50.690 --> 01:29:51.941
I just happened to look at you.
01:29:51.941 --> 01:29:53.940
I'm sorry, I didn't.
01:29:53.940 --> 01:29:55.123
In coming up with
the determination
01:29:55.123 --> 01:29:56.896
that you need those three wind farms,
01:29:56.896 --> 01:29:59.550
did you just run power flow models
01:29:59.550 --> 01:30:02.720
or has actual modeling work been done
01:30:02.720 --> 01:30:04.133
to support that conclusion?
01:30:05.945 --> 01:30:06.900
Well, those are just
requests by the generators
01:30:06.900 --> 01:30:07.970
to interconnect our system.
01:30:07.970 --> 01:30:10.270
So we have an obligation to connect them
01:30:10.270 --> 01:30:12.110
and that was the lowest cost way
01:30:12.110 --> 01:30:14.173
to connect those generators.
01:30:17.594 --> 01:30:19.760
So you're combining two things.
01:30:19.760 --> 01:30:22.020
You're combining an
interconnection issue
01:30:22.020 --> 01:30:23.540
with a reconductoring issue and trying
01:30:23.540 --> 01:30:25.920
to optimize that to
figure out the best way
01:30:25.920 --> 01:30:27.690
to solve both, is that right?
01:30:27.690 --> 01:30:29.670
In that cost bundle,
in that cost structure?
01:30:29.670 --> 01:30:31.630
Yeah, so we got a
request for interconnections
01:30:31.630 --> 01:30:33.387
from these generators and we said okay,
01:30:33.387 --> 01:30:36.130
what's the most economical
way to connect them.
01:30:36.130 --> 01:30:39.610
Well, we've got an open circuit
01:30:39.610 --> 01:30:41.130
on an existing line.
01:30:41.130 --> 01:30:43.610
Let's use what's there,
as much as we can.
01:30:43.610 --> 01:30:46.100
And so we strung some
of that second circuit
01:30:46.100 --> 01:30:47.433
when we connected them.
01:30:48.320 --> 01:30:51.017
And so that's, there's roughly 70 miles
01:30:51.017 --> 01:30:53.990
along that line that
already has the conductor
01:30:53.990 --> 01:30:56.596
hanging on the second
circuit, already has the arms.
01:30:56.596 --> 01:30:58.460
So that works to our benefit.
01:30:58.460 --> 01:31:02.840
But where the line directly coming
01:31:02.840 --> 01:31:05.930
from the generator comes in and hits
01:31:05.930 --> 01:31:07.930
the existing line, we
have to put a station there
01:31:07.930 --> 01:31:08.763
to terminate it.
01:31:16.960 --> 01:31:18.800
I think that makes sense.
01:31:18.800 --> 01:31:22.230
I'm not gonna sit up here and
argue against the engineering.
01:31:22.230 --> 01:31:24.200
But I think, from my standpoint,
01:31:24.200 --> 01:31:26.720
the papers that have been submitted
01:31:26.720 --> 01:31:31.200
were kind of lump sums
saying a double circuit
01:31:31.200 --> 01:31:33.010
with three new substations costs 400
01:31:33.010 --> 01:31:34.590
and something million dollars.
01:31:34.590 --> 01:31:36.220
And a little bit more understanding
01:31:36.220 --> 01:31:40.850
of the components of that
cost would be hugely valuable
01:31:40.850 --> 01:31:44.443
for me and I think everybody.
01:31:45.410 --> 01:31:48.270
I hope, quite frankly, that we look
01:31:48.270 --> 01:31:52.590
at this solution of
adding second circuits
01:31:52.590 --> 01:31:55.865
to towers that are
double-circuit capable
01:31:55.865 --> 01:32:00.170
as a first alternative to
building some more transmission
01:32:00.170 --> 01:32:01.003
in the state.
01:32:01.003 --> 01:32:02.718
Yeah, and just
to dovetail on that,
01:32:02.718 --> 01:32:05.060
I'm not opposed to any of this.
01:32:05.060 --> 01:32:07.580
Even if you lump sum it,
01:32:07.580 --> 01:32:09.020
I put this in the context of look,
01:32:09.020 --> 01:32:12.631
we've got $1.4 billion a
year going out the door
01:32:12.631 --> 01:32:16.770
on transmission congestion costs.
01:32:16.770 --> 01:32:18.417
So anything that helps to offset that
01:32:18.417 --> 01:32:20.220
and you're in one of those prone areas
01:32:20.220 --> 01:32:23.300
of the state that helps you
operate more efficiently,
01:32:23.300 --> 01:32:26.690
and again, load growth
is coming in that area.
01:32:26.690 --> 01:32:30.120
So no, I wouldn't slam the door closed
01:32:30.120 --> 01:32:30.953
on any of this.
01:32:30.953 --> 01:32:33.590
It's just a question of
how to most efficiently do it
01:32:33.590 --> 01:32:34.933
and hit your targets.
01:32:39.670 --> 01:32:41.790
So I think one of the,
01:32:41.790 --> 01:32:42.940
and please correct me if I'm wrong,
01:32:42.940 --> 01:32:46.450
but it sounds like to
me that when you build
01:32:46.450 --> 01:32:49.320
a 345 kb double-circuit capable line,
01:32:49.320 --> 01:32:52.595
as you did, and part
of it was in I guess 2010
01:32:52.595 --> 01:32:54.140
and the other part of it was in 2016,
01:32:54.140 --> 01:32:55.500
it seems like the longer you wait,
01:32:55.500 --> 01:32:57.470
the more the system changes.
01:32:57.470 --> 01:33:01.470
And you end up dropping a radial line
01:33:01.470 --> 01:33:04.110
to some wind farms and some lines
01:33:04.110 --> 01:33:08.330
and it makes it harder to
add the second circuit later on.
01:33:08.330 --> 01:33:10.287
Depending on what
region of the state you're in
01:33:10.287 --> 01:33:14.613
and what the factors are, it
just seems to get complicated.
01:33:16.780 --> 01:33:21.780
Yeah, I would say, if the
second circuit were there,
01:33:21.780 --> 01:33:24.210
what we would do to
connect those generators
01:33:24.210 --> 01:33:26.200
would be the same as
where we're gonna end up.
01:33:26.200 --> 01:33:28.750
We would still have to build a station
01:33:28.750 --> 01:33:31.230
on that second circuit
and then run a radial line
01:33:31.230 --> 01:33:32.400
out to the generator.
01:33:32.400 --> 01:33:35.191
So what we end up with will be the same
01:33:35.191 --> 01:33:37.270
as if the second circuit had been there,
01:33:37.270 --> 01:33:40.290
we're just doing it in
a little different order.
01:33:40.290 --> 01:33:43.060
So, and you might
have already answered,
01:33:43.060 --> 01:33:43.893
Commissioner Glotfelty,
01:33:43.893 --> 01:33:47.631
but how much would
those substations cost?
01:33:47.631 --> 01:33:49.024
A ballpark figure.
01:33:49.024 --> 01:33:53.070
Those are in the
15, $16 million range.
01:33:53.070 --> 01:33:56.010
So you're talking about 45, 50 million
01:33:56.010 --> 01:33:58.440
for those three stations
01:33:58.440 --> 01:34:01.030
and then you've also
got station expansions
01:34:01.030 --> 01:34:03.853
at the other intermediate
stations along the way,
01:34:04.820 --> 01:34:06.620
just to terminate the new circuit.
01:34:06.620 --> 01:34:09.880
So we have to add
terminals at the other stations
01:34:09.880 --> 01:34:11.248
just for adding the second circuit.
01:34:11.248 --> 01:34:13.110
Just those three stations lone
01:34:13.110 --> 01:34:15.363
is in the 45, $50 million range.
01:34:16.430 --> 01:34:19.750
Okay, so thank you.
01:34:19.750 --> 01:34:21.380
And Woody, do you have any more to add
01:34:21.380 --> 01:34:24.860
on that slide that covers
the interim options?
01:34:24.860 --> 01:34:26.100
With respect to the loop,
01:34:26.100 --> 01:34:28.515
can you give me some background on that
01:34:28.515 --> 01:34:30.598
and what are ERCOT's
ultimate recommendations
01:34:30.598 --> 01:34:34.040
on the second, on the
little close the loop project?
01:34:34.040 --> 01:34:35.810
On the closing
the loop project?
01:34:35.810 --> 01:34:39.679
It's not part of our
reliability recommendation.
01:34:39.679 --> 01:34:42.283
It has benefit.
01:34:43.800 --> 01:34:46.010
You can serve more
load with the loop closed.
01:34:46.010 --> 01:34:49.000
It gives you more
operational flexibility.
01:34:49.000 --> 01:34:54.000
But our reliability
recommendation is that option two,
01:34:54.900 --> 01:34:57.379
building a new line down from San Miguel
01:34:57.379 --> 01:34:59.400
in the crosspiece as well.
01:34:59.400 --> 01:35:01.133
But not the double circuit?
01:35:02.950 --> 01:35:05.150
No, that's not part of
our recommendation.
01:35:06.170 --> 01:35:07.310
Part of your recommendation
01:35:07.310 --> 01:35:08.763
for long-term reliability.
01:35:08.763 --> 01:35:10.190
Right.
01:35:10.190 --> 01:35:14.290
But we're doing both,
provide more reliability benefits
01:35:14.290 --> 01:35:15.123
together?
01:35:15.123 --> 01:35:16.900
Closing the loop,
adding the second circuit
01:35:16.900 --> 01:35:21.440
definitely that has benefit
to the Rio Grande Valley
01:35:21.440 --> 01:35:22.510
in terms of reliability.
01:35:22.510 --> 01:35:23.803
There is benefit there.
01:35:25.890 --> 01:35:28.120
Our recommendation is the option two
01:35:29.510 --> 01:35:32.580
and we just don't wanna
see anything delay that
01:35:32.580 --> 01:35:34.802
because that is the fix that we need
01:35:34.802 --> 01:35:38.173
to get out of this just-in-time,
01:35:39.220 --> 01:35:42.290
having things ready just
in time for the next piece
01:35:42.290 --> 01:35:43.123
of load growth.
01:35:43.123 --> 01:35:44.100
Like option two.
01:35:44.100 --> 01:35:46.620
Option two would be a-
01:35:46.620 --> 01:35:47.770
Just-in-time.
01:35:48.769 --> 01:35:52.530
It would be a step change
in what we've done in the past.
01:35:52.530 --> 01:35:54.430
For example, what
we've done in the past is
01:35:54.430 --> 01:35:58.340
if we were gonna build a
double-circuit capable line
01:35:58.340 --> 01:36:00.450
into the valley, we would look at it
01:36:00.450 --> 01:36:04.470
and we would say one circuit is adequate
01:36:04.470 --> 01:36:06.080
to serve the load for
the next five years.
01:36:06.080 --> 01:36:09.600
So let's just fund one circuit.
01:36:09.600 --> 01:36:12.250
That will get us through
the next five years.
01:36:12.250 --> 01:36:14.990
And then we look and say
well load growth is up now
01:36:14.990 --> 01:36:17.240
so we need to add the second circuit.
01:36:17.240 --> 01:36:22.240
But what this is is kind of a kickstart
01:36:24.500 --> 01:36:28.070
all the way to 2040
and it gets you above
01:36:28.070 --> 01:36:29.370
that just-in-time mentality.
01:36:29.370 --> 01:36:34.370
And the reason that
just-in-time mentality is a problem
01:36:34.860 --> 01:36:35.990
in the Rio Grande Valley is because
01:36:35.990 --> 01:36:38.350
of all those reasons I listed before.
01:36:38.350 --> 01:36:41.470
It's isolated, hurricane,
limited generation,
01:36:41.470 --> 01:36:46.100
lots of RR being built there.
01:36:46.100 --> 01:36:49.900
So all those factors
add up there to make,
01:36:49.900 --> 01:36:53.130
I mentioned before, it
stretches our planning criteria.
01:36:53.130 --> 01:36:57.300
So if our planning
criteria has some flaws in it
01:36:57.300 --> 01:37:00.703
or some holes in it, the Rio
Grande Valley exposes those.
01:37:01.700 --> 01:37:03.610
That's what makes that unique.
01:37:03.610 --> 01:37:05.122
And we've seen this a little bit before
01:37:05.122 --> 01:37:08.260
in Far West Texas.
01:37:08.260 --> 01:37:11.453
Once again, fast load growth,
on the edge of the system-
01:37:11.453 --> 01:37:14.420
At the end of the line.
Needs big changes
01:37:14.420 --> 01:37:17.350
to catch up with and
we were in the same kind
01:37:17.350 --> 01:37:22.240
of situation in serving
that area as well,
01:37:22.240 --> 01:37:24.250
struggling between just-in-time fixes,
01:37:24.250 --> 01:37:28.890
small, incremental fixes
versus large step changes.
01:37:28.890 --> 01:37:33.890
And I think you see that
on the edges of our system.
01:37:34.290 --> 01:37:36.300
You see it in places where load growth
01:37:36.300 --> 01:37:40.233
is exceptionally high or higher
than what we normally see.
01:37:41.179 --> 01:37:42.960
So what I'm hearing
you say, Woody,
01:37:42.960 --> 01:37:47.960
is that if ERCOT wanted us
to pick a path going forward,
01:37:47.980 --> 01:37:50.440
it would be the long-term,
option two solution.
01:37:50.440 --> 01:37:53.560
Right.
But if the Commission wanted
01:37:53.560 --> 01:37:55.560
to move forward with two projects,
01:37:55.560 --> 01:37:58.460
one being the long-term and
one being the second circuit,
01:37:58.460 --> 01:38:01.351
that together would provide reliability.
01:38:01.351 --> 01:38:02.540
That's right, my control room,
01:38:02.540 --> 01:38:04.830
my outage coordinators, my planners,
01:38:04.830 --> 01:38:07.210
they all would prefer both
01:38:07.210 --> 01:38:09.650
from a operating the system standpoint.
01:38:09.650 --> 01:38:13.010
Okay, would your
operators, planners,
01:38:13.010 --> 01:38:16.110
control room have reliability concerns
01:38:16.110 --> 01:38:17.300
with adding the second circuit
01:38:17.300 --> 01:38:20.630
if it was done appropriately
in coordination with ERCOT's
01:38:20.630 --> 01:38:23.530
processes and even if it was done hot?
01:38:23.530 --> 01:38:26.650
We don't want to present
a risk to existing reliability
01:38:26.650 --> 01:38:31.440
in the Valley and I need
to hear it clear and now.
01:38:31.440 --> 01:38:34.653
Okay, so here's as
clear as I can state it.
01:38:36.120 --> 01:38:39.073
Strictly speaking with
our planning criteria,
01:38:39.073 --> 01:38:41.200
it would not be an issue there
01:38:41.200 --> 01:38:44.160
because we should be fine through 2026
01:38:45.240 --> 01:38:49.880
and the second circuit
can be added before then.
01:38:49.880 --> 01:38:54.880
However, we are one bad hurricane away
01:38:55.670 --> 01:38:57.353
from losing the 345 line.
01:38:58.320 --> 01:39:01.050
The thermal generation
that's in the Valley
01:39:01.050 --> 01:39:01.900
is getting older.
01:39:03.694 --> 01:39:08.694
A six-month overhaul
of one of those units
01:39:08.830 --> 01:39:10.590
that occurs over the summer would put us
01:39:10.590 --> 01:39:11.657
in a really bad place.
01:39:11.657 --> 01:39:15.503
And our planning criteria
doesn't compensate for that.
01:39:16.570 --> 01:39:19.700
So if we continue business as usual
01:39:19.700 --> 01:39:22.180
and we don't have those
kinds of bad outages,
01:39:22.180 --> 01:39:24.680
then I think that would be fine.
01:39:24.680 --> 01:39:28.880
However, we're right
there in the yellow zone.
01:39:28.880 --> 01:39:32.720
We're one bad thing away from losing
01:39:32.720 --> 01:39:35.870
one of those key pieces
that serves load down there.
01:39:35.870 --> 01:39:40.190
We got the three
lines and four big units
01:39:40.190 --> 01:39:41.210
or three big units.
01:39:41.210 --> 01:39:46.210
Are the eastern lines,
are they double-circuited
01:39:49.410 --> 01:39:50.500
or are they single circuits?
01:39:50.500 --> 01:39:51.410
They're double circuits.
01:39:51.410 --> 01:39:52.500
Okay.
01:39:52.500 --> 01:39:54.910
But the hurricane pole
lines are double circuit?
01:39:55.799 --> 01:39:56.730
I'm gonna have questions.
01:39:56.730 --> 01:39:57.563
You'll like it.
01:39:58.670 --> 01:40:00.523
So put it another way,
01:40:01.750 --> 01:40:05.530
second circuit on the western edge
01:40:05.530 --> 01:40:08.650
in the near-term
provides a near-term level
01:40:08.650 --> 01:40:13.650
of redundancy sooner than you have
01:40:13.880 --> 01:40:15.913
to guard against hurricane disruption,
01:40:16.790 --> 01:40:19.100
generator outages,
because what we're learning
01:40:19.100 --> 01:40:20.513
is that it's happening,
01:40:22.160 --> 01:40:26.270
and any type of unforeseen
event in the near-term.
01:40:26.270 --> 01:40:29.390
It gets you there quicker but ultimately
01:40:29.390 --> 01:40:32.550
the path down the middle of south Texas,
01:40:32.550 --> 01:40:36.540
again, option two, gets us
that long-term breathing room
01:40:36.540 --> 01:40:39.190
to where we can absorb
any potential scenarios
01:40:39.190 --> 01:40:41.020
of load growth well into the future.
01:40:41.020 --> 01:40:42.010
That's right.
01:40:42.010 --> 01:40:45.993
You go back to my
tachometer analogy,
01:40:47.240 --> 01:40:49.040
four years from now,
we're gonna be sitting here
01:40:49.040 --> 01:40:50.600
and we're still gonna be in the yellow.
01:40:50.600 --> 01:40:52.540
Yeah, I hear you.
01:40:52.540 --> 01:40:56.450
Adding a second circuit
doesn't add another pathway
01:40:56.450 --> 01:40:57.283
into the Valley.
01:40:57.283 --> 01:40:59.500
You have three now,
you'll have three then.
01:40:59.500 --> 01:41:01.180
Right, but it gives
you a crutch to lean on
01:41:01.180 --> 01:41:02.370
if something bad happens.
It gives you a crutch
01:41:02.370 --> 01:41:03.290
to lean on, that's right.
01:41:03.290 --> 01:41:04.123
But it doesn't-
01:41:04.123 --> 01:41:07.500
Or if God forbid, the
option two construction
01:41:07.500 --> 01:41:11.330
isn't completed exactly in time,
01:41:11.330 --> 01:41:14.440
precisely on the date in 2026.
01:41:14.440 --> 01:41:16.240
I know that's never happened before.
01:41:18.170 --> 01:41:19.720
That is some
insurance of that as well.
01:41:19.720 --> 01:41:24.010
Right, okay, so to
kind of sum this up,
01:41:24.010 --> 01:41:27.633
we can wrap up this
part of the presentation.
01:41:28.670 --> 01:41:33.670
It sounds like with respect
to the long-erm project,
01:41:34.000 --> 01:41:36.980
option two, we all
agree that it's important
01:41:36.980 --> 01:41:38.580
for the Rio Grande Valley and we want
01:41:38.580 --> 01:41:41.383
to see that project continue
to go forward at ERCOT.
01:41:42.580 --> 01:41:47.440
I would recommend that
we request from ERCOT
01:41:47.440 --> 01:41:50.643
that we have that project
endorsed by the end of the year.
01:41:50.643 --> 01:41:51.740
Okay.
Okay,
01:41:51.740 --> 01:41:53.260
so by the end of the year.
01:41:53.260 --> 01:41:55.025
Through the standard,
current process.
01:41:55.025 --> 01:41:56.763
The normal process.
Through the normal process
01:41:56.763 --> 01:41:59.940
and for ERCOT to
deem it critical for liability
01:41:59.940 --> 01:42:02.400
so that when we get the
CCN we can process it
01:42:02.400 --> 01:42:03.403
in six months.
01:42:04.580 --> 01:42:05.870
And then I would like to hear
01:42:05.870 --> 01:42:08.780
from the companies and their counsel
01:42:09.987 --> 01:42:12.960
how quickly they can put
together a CCN application
01:42:12.960 --> 01:42:17.270
because we wanna wrap
up this long-term project
01:42:17.270 --> 01:42:18.490
as fast as we can.
01:42:18.490 --> 01:42:22.190
So if we don't have a
timeline estimate here today,
01:42:22.190 --> 01:42:25.470
file one and let us know.
01:42:25.470 --> 01:42:28.640
And I would also say, as
you get ready to file a CCN,
01:42:28.640 --> 01:42:31.140
because we're basically
saying right now today
01:42:32.311 --> 01:42:34.461
that we support ERCOT
and their option two.
01:42:35.853 --> 01:42:39.370
So that's enough guidance
to start preparing your CCN
01:42:39.370 --> 01:42:41.890
and I would also say that
when you file that CCN,
01:42:41.890 --> 01:42:44.500
prepare to file your direct
testimony at the same time
01:42:44.500 --> 01:42:45.750
so that we can save time.
01:42:46.870 --> 01:42:47.960
And then we'll look to see what
01:42:47.960 --> 01:42:50.250
other procedural efficiencies
we can squeeze out
01:42:50.250 --> 01:42:52.320
within that six month timeframe.
01:42:52.320 --> 01:42:55.910
That would be my recommendation
for the long-term project.
01:42:57.190 --> 01:43:00.150
Can I ask a couple of things?
01:43:00.150 --> 01:43:05.150
First of all, Woody, you
kind of hit a nerve with me
01:43:07.350 --> 01:43:08.450
with something that I don't like
01:43:08.450 --> 01:43:12.580
about reliability assessments
that come from NERC or any RTO
01:43:12.580 --> 01:43:15.870
is they go, we're gonna be
great for the winter except
01:43:15.870 --> 01:43:17.640
or however.
01:43:17.640 --> 01:43:18.980
It's always the contingency.
01:43:18.980 --> 01:43:20.740
If one big generator trips or
01:43:20.740 --> 01:43:23.120
if one big transmission line fails.
01:43:23.120 --> 01:43:25.020
And that's what we found ourselves in.
01:43:25.920 --> 01:43:29.860
And I know that's planning
criteria across the US
01:43:29.860 --> 01:43:31.850
but we have to be more
diligent about it than that.
01:43:31.850 --> 01:43:34.440
And I hope we could get,
01:43:34.440 --> 01:43:35.790
and obviously there's a cost here,
01:43:35.790 --> 01:43:38.720
but we could get to
the place where it's,
01:43:38.720 --> 01:43:41.300
even if we have one of those
circuits in the Valley go down,
01:43:41.300 --> 01:43:44.063
we are still gonna be okay
in the Rio Grande Valley.
01:43:44.990 --> 01:43:46.313
If we do have a hurricane.
01:43:47.240 --> 01:43:49.930
And that's where we
need to think about this
01:43:49.930 --> 01:43:51.793
from a reliability perspective.
01:43:56.310 --> 01:43:59.200
Obviously, the cost
of reliability goes up
01:43:59.200 --> 01:44:01.120
the more reliable you want the system.
01:44:01.120 --> 01:44:06.120
But to me, just in
time's not getting it.
01:44:06.290 --> 01:44:08.010
I said a couple of open meetings ago,
01:44:08.010 --> 01:44:11.250
the fact that quote/unquote,
we gold-plated the system
01:44:11.250 --> 01:44:13.398
or people were accused
of gold-plating the system
01:44:13.398 --> 01:44:17.390
when we built coal and
nuclear plants, thank God.
01:44:17.390 --> 01:44:18.223
Guess what?
01:44:18.223 --> 01:44:21.763
We're using all of that
capacity today and it's needed.
01:44:22.800 --> 01:44:24.610
So I want you all to think ahead.
01:44:24.610 --> 01:44:28.110
I want you all to think
about these towers
01:44:28.110 --> 01:44:29.270
that you can add a second circuit.
01:44:29.270 --> 01:44:32.320
I want you to think about
these big time reliability
01:44:32.320 --> 01:44:34.573
projects that are necessary for 2040.
01:44:35.530 --> 01:44:37.400
We're not gonna get too
many bites at the apple,
01:44:37.400 --> 01:44:38.693
I don't believe.
01:44:38.693 --> 01:44:41.373
And I'm not saying
that all transmission,
01:44:42.620 --> 01:44:45.210
this isn't a run to the
PUC to put every bit
01:44:45.210 --> 01:44:49.210
of transmission we can in the rate base,
01:44:49.210 --> 01:44:50.310
I don't believe that.
01:44:50.310 --> 01:44:54.330
But there are projects that are needed
01:44:54.330 --> 01:44:56.520
that I hope we can use our authority.
01:44:56.520 --> 01:44:58.810
I think the legislature has been clear,
01:44:58.810 --> 01:45:01.090
the Governor has been
clear and other leaders,
01:45:01.090 --> 01:45:02.360
let's get it done.
01:45:02.360 --> 01:45:04.670
And we want to take advantage of that
01:45:04.670 --> 01:45:06.570
and make sure that Texans are protected
01:45:06.570 --> 01:45:10.420
and Texans are served
by more reliable systems.
01:45:10.420 --> 01:45:13.080
And a lot of that, in my belief,
01:45:13.080 --> 01:45:17.830
is that the generation
costs continues to go down.
01:45:17.830 --> 01:45:19.750
We may be putting a little
bit more in transmission
01:45:19.750 --> 01:45:21.950
but generation keeps coming down
01:45:21.950 --> 01:45:24.950
and we're gonna have other
issues we've gotta deal with
01:45:24.950 --> 01:45:28.040
with inverter-based
generation and storage
01:45:28.040 --> 01:45:28.873
and all those things.
01:45:28.873 --> 01:45:33.610
But it's all dependent upon a
robust transmission system.
01:45:33.610 --> 01:45:36.820
So the one other thing
that I wanted to ask is,
01:45:36.820 --> 01:45:41.820
when you think about
the option two or option B,
01:45:43.140 --> 01:45:45.260
did you only look at 345?
01:45:45.260 --> 01:45:46.700
I continue to struggle with the fact
01:45:46.700 --> 01:45:49.640
that we're one of the
only regions that have
01:45:50.690 --> 01:45:53.640
the upper limit of our
transmission stops at 345.
01:45:53.640 --> 01:45:56.240
And I know some of it is
because of underbuild issues
01:45:56.240 --> 01:46:00.570
and the requirement
that you put in a 500 line.
01:46:00.570 --> 01:46:03.110
We may have a lot more
underbuild to do as well
01:46:03.110 --> 01:46:05.150
but have you looked at the scenario?
01:46:05.150 --> 01:46:07.670
I know you all advocate for 765
01:46:07.670 --> 01:46:10.268
but has ERCOT or AUP
thought about using that?
01:46:10.268 --> 01:46:15.268
And would that provide
any more reliability
01:46:15.390 --> 01:46:17.240
or value to the Rio Grande Valley
01:46:17.240 --> 01:46:18.940
if you went with a higher voltage?
01:46:19.990 --> 01:46:22.700
Yeah, we have considered that
01:46:22.700 --> 01:46:25.913
in a number of, obviously
during the CREZ process,
01:46:25.913 --> 01:46:27.550
it's something that was considered.
01:46:27.550 --> 01:46:29.850
And kind of to your point,
01:46:29.850 --> 01:46:34.850
the way I think about 765
is it's not a onesy twosy,
01:46:35.850 --> 01:46:37.780
for the reasons you just said,
01:46:37.780 --> 01:46:41.120
if you have one 765 kb line or two.
01:46:41.120 --> 01:46:44.194
The problem is, when you
lose that line, what happens?
01:46:44.194 --> 01:46:48.030
And so in my mind,
it's something you have
01:46:48.030 --> 01:46:50.640
to kind of make that
commitment to and work
01:46:50.640 --> 01:46:52.760
towards building out at least some sort
01:46:52.760 --> 01:46:55.810
of a backbone at that voltage
01:46:55.810 --> 01:46:59.040
in order to then have that
to organically grow from
01:46:59.040 --> 01:47:00.370
and make it work.
01:47:00.370 --> 01:47:02.470
And so in this particular case
01:47:02.470 --> 01:47:05.280
when you're looking
at building one new line
01:47:05.280 --> 01:47:08.690
to the Valley, does it
make sense to do it at 765?
01:47:08.690 --> 01:47:12.011
Probably not, right, for
the reasons I just said.
01:47:12.011 --> 01:47:16.580
It's more expensive and then
obviously you have the issues
01:47:16.580 --> 01:47:20.082
to deal with if you
lose it, what happens?
01:47:20.082 --> 01:47:22.690
But if you lose it, you
still have three others
01:47:22.690 --> 01:47:26.150
that might be able to be
the contingency on that.
01:47:26.150 --> 01:47:30.120
I guess what I would say,
I'd love for y'all to look at it.
01:47:30.120 --> 01:47:31.940
I'd love for y'all to think higher.
01:47:31.940 --> 01:47:36.940
Think not 2022 but 2032.
01:47:37.000 --> 01:47:39.810
Yeah, just let me clarify
your statement there.
01:47:39.810 --> 01:47:44.390
The concern with building 500 or 760 kb
01:47:44.390 --> 01:47:47.450
is that it is so good at
delivering high amounts
01:47:47.450 --> 01:47:49.960
of power and high
volumes of supply of power,
01:47:49.960 --> 01:47:52.020
it's so good at its job
01:47:52.020 --> 01:47:53.950
that if you lost it for a little while,
01:47:53.950 --> 01:47:55.650
it's not worth building it at all.
01:47:56.820 --> 01:47:58.190
Uh, no.
Fill in the gaps
01:47:58.190 --> 01:47:59.440
for me there.
(spectators laughing)
01:47:59.440 --> 01:48:00.440
I'm sorry.
01:48:03.149 --> 01:48:05.460
I just don't understand
why you wouldn't want
01:48:05.460 --> 01:48:08.630
to build something that
is extremely good at its job
01:48:08.630 --> 01:48:10.120
because you might not be able to use it
01:48:10.120 --> 01:48:11.250
a couple of days a year.
01:48:11.250 --> 01:48:13.160
Well, it's just,
when it goes out,
01:48:13.160 --> 01:48:16.440
then you have a significant
amount of power that-
01:48:16.440 --> 01:48:20.840
Okay, sure, if you said, I
don't want to build a 760 kb
01:48:20.840 --> 01:48:22.940
because it's a single point of failure
01:48:22.940 --> 01:48:25.603
for more people than a 345 is.
01:48:27.040 --> 01:48:29.360
And so instead of that, I'm gonna build
01:48:29.360 --> 01:48:33.760
two separate 345s that
provide offsetting risks
01:48:33.760 --> 01:48:36.102
to each other in different areas
01:48:36.102 --> 01:48:38.278
and one's on the coast, one's not.
01:48:38.278 --> 01:48:40.060
And so therefore I've reduced my risk
01:48:40.060 --> 01:48:41.380
of a single point of failure.
01:48:41.380 --> 01:48:43.700
If you said that, that would make sense.
01:48:43.700 --> 01:48:45.040
But what I'm hearing is,
01:48:45.040 --> 01:48:47.650
we're only gonna build
the one line and option two.
01:48:47.650 --> 01:48:50.140
And instead of building a
really big one that delivers
01:48:50.140 --> 01:48:53.571
a lot of power to ensure
reliability for a really long time,
01:48:53.571 --> 01:48:56.480
we're not building more to reduce risks,
01:48:56.480 --> 01:48:58.330
we're just gonna build a smaller one.
01:49:00.745 --> 01:49:03.190
Help me fill in, I mean,
somebody help me here.
01:49:03.190 --> 01:49:04.700
Yeah, I think it has to do.
01:49:04.700 --> 01:49:08.130
I mean, really this
is a reliability issue.
01:49:08.130 --> 01:49:10.330
And that is when you talk underbuilds,
01:49:10.330 --> 01:49:13.090
you talk about if that 500 kb line trips
01:49:13.090 --> 01:49:15.763
or that 765, where is that power going?
01:49:17.170 --> 01:49:18.702
The generators are still generating.
01:49:18.702 --> 01:49:19.535
Sure.
01:49:19.535 --> 01:49:20.368
The load is still there.
01:49:20.368 --> 01:49:22.693
So the rest of the
system has to pick that up
01:49:22.693 --> 01:49:25.370
or you're gonna have
potentially outages.
01:49:25.370 --> 01:49:27.490
Lines are gonna trip
generators are gonna trip.
01:49:27.490 --> 01:49:32.490
So the question is, I
think, the cost of a 345,
01:49:33.890 --> 01:49:36.345
knowing that you don't
have do any underbuilds
01:49:36.345 --> 01:49:39.070
or the cost of a 500 and a 765,
01:49:39.070 --> 01:49:42.250
knowing that that's a
higher cost structure,
01:49:42.250 --> 01:49:44.440
but then you're gonna
have to do additional work
01:49:44.440 --> 01:49:47.760
to ensure that that contingency,
if a contingency happens,
01:49:47.760 --> 01:49:48.593
that that fails.
01:49:48.593 --> 01:49:50.950
Okay.
And I kind of wonder
01:49:50.950 --> 01:49:54.900
is does the second
circuit on the western line
01:49:54.900 --> 01:49:56.400
help that contingency.
01:49:56.400 --> 01:49:58.290
Help defray just loading a-
01:49:58.290 --> 01:50:00.970
That's right, a
single circuit 345.
01:50:00.970 --> 01:50:03.600
What worries me about
this entire conversation,
01:50:03.600 --> 01:50:07.940
two part, is that under
this framework of thinking,
01:50:07.940 --> 01:50:11.010
we're never having a
760 line in Texas, ever.
01:50:11.010 --> 01:50:12.373
You're not even headed to
saying we're never having
01:50:12.373 --> 01:50:13.603
a 760 line.
01:50:14.520 --> 01:50:18.050
I think if you want
to move to 765,
01:50:18.050 --> 01:50:20.963
you've gotta build an entire 765 system.
01:50:22.050 --> 01:50:23.980
You can't just build one line.
That's right.
01:50:23.980 --> 01:50:26.530
I realize that-
That's the step change
01:50:26.530 --> 01:50:27.363
we're talking about.
01:50:27.363 --> 01:50:31.250
And so instead of $1.3
billion, we're talking
01:50:31.250 --> 01:50:35.510
about 20 or $30 billion.
01:50:35.510 --> 01:50:37.150
I mean it's a lot-
Not for that line
01:50:37.150 --> 01:50:38.963
but for a system.
For a system.
01:50:38.963 --> 01:50:41.570
I mean, it's a huge step change.
01:50:41.570 --> 01:50:44.230
But other regions have it.
01:50:44.230 --> 01:50:46.343
Did they do it in 30 billion chunks too?
01:50:47.520 --> 01:50:48.353
I don't know.
01:50:48.353 --> 01:50:51.690
AUP, they're really
the premier 765 builders
01:50:51.690 --> 01:50:52.850
across the US.
01:50:52.850 --> 01:50:56.270
But 500s are used in lots
of different regions as well
01:50:56.270 --> 01:51:00.680
and I'd put it out there
for food for thought
01:51:00.680 --> 01:51:04.490
that thinking positively in the future
01:51:04.490 --> 01:51:05.883
about these higher voltage.
01:51:07.090 --> 01:51:09.230
Maybe now is the time,
maybe now is not the time.
01:51:09.230 --> 01:51:10.380
I don't know.
01:51:10.380 --> 01:51:11.284
But I'm saying now is the time-
01:51:11.284 --> 01:51:12.650
Well, a blanket
no is not the answer.
01:51:12.650 --> 01:51:14.310
A blanket no is not the answer.
01:51:14.310 --> 01:51:15.590
Yeah, a blanket
no is not the answer
01:51:15.590 --> 01:51:17.770
and no, I don't even
wanna look at it right now
01:51:17.770 --> 01:51:19.050
is not the answer.
01:51:19.050 --> 01:51:19.883
Absolutely.
01:51:19.883 --> 01:51:23.990
And this kind of circular logic of no,
01:51:23.990 --> 01:51:25.600
we can't do it right now.
01:51:25.600 --> 01:51:27.050
And I understand, y'all are constrained
01:51:27.050 --> 01:51:28.601
by the current process.
01:51:28.601 --> 01:51:31.030
But the circular logic both applying
01:51:31.030 --> 01:51:31.970
to no, we're not gonna do 500.
01:51:31.970 --> 01:51:35.270
We're not gonna do 700
now because it doesn't fit
01:51:35.270 --> 01:51:36.103
and we're not gonna do it,
01:51:36.103 --> 01:51:38.651
just like we're not gonna
do a second circuit band-aid
01:51:38.651 --> 01:51:40.135
because we don't like band-aids,
01:51:40.135 --> 01:51:43.520
we wanna do the billion dollars first.
01:51:43.520 --> 01:51:45.820
The band-aid didn't get done anyway
01:51:45.820 --> 01:51:47.490
because band-aids just leave you
01:51:47.490 --> 01:51:50.369
in a just-in-time danger zone.
01:51:50.369 --> 01:51:52.150
Well, not doing the band-aid got us
01:51:52.150 --> 01:51:53.810
in a Just-in-time danger zone anyway.
01:51:53.810 --> 01:51:57.850
And it's this circular
framework across the board
01:51:57.850 --> 01:52:00.790
in this process that is
very, very concerning.
01:52:00.790 --> 01:52:05.280
And I'm immensely grateful
that you're sorting through this
01:52:05.280 --> 01:52:07.730
because I'm starting to
see why we haven't gotten
01:52:09.204 --> 01:52:11.240
a lot of projects done that
we've needed in the state.
01:52:11.240 --> 01:52:13.280
And it has been a ride.
(spectators laughing)
01:52:13.280 --> 01:52:18.159
So it was much more complicated
than you would ever think
01:52:18.159 --> 01:52:20.310
evaluating the second circuit.
01:52:20.310 --> 01:52:23.360
So to just frame up the conversation,
01:52:23.360 --> 01:52:24.950
and you made a really good point,
01:52:24.950 --> 01:52:27.100
Commissioner Glotfelty, earlier,
01:52:27.100 --> 01:52:29.300
the reason we're having
this conversation here today
01:52:29.300 --> 01:52:31.300
is because the legislature
and the Governor
01:52:31.300 --> 01:52:33.320
want us to ensure reliability.
01:52:33.320 --> 01:52:35.830
And one component of that is looking
01:52:35.830 --> 01:52:38.390
at the acceleration of
transmission development.
01:52:38.390 --> 01:52:42.077
And we, as a Commission,
we as a Commission,
01:52:42.077 --> 01:52:44.600
are looking at that together.
01:52:44.600 --> 01:52:47.240
And although the
Chairman has assigned me
01:52:47.240 --> 01:52:49.620
this very important
project that I have worked
01:52:49.620 --> 01:52:52.290
very hard on over
the last several weeks,
01:52:52.290 --> 01:52:54.540
we as a Commission
are making a decision,
01:52:54.540 --> 01:52:56.983
we as a Commission are
evaluating these issues.
01:52:59.024 --> 01:53:00.674
I just wanna make that real clear
01:53:03.400 --> 01:53:08.210
because it seems that
there might be some thinking
01:53:08.210 --> 01:53:10.370
that I'm the only one interested
01:53:11.375 --> 01:53:13.170
in looking at these options.
01:53:13.170 --> 01:53:16.620
So I just wanna be real clear
and on the record on that.
01:53:16.620 --> 01:53:19.250
And secondly, I wanna go back to again,
01:53:19.250 --> 01:53:20.760
trying to summarize this conversation
01:53:20.760 --> 01:53:23.590
to the long-term project.
01:53:23.590 --> 01:53:25.440
And as we stated here today,
01:53:25.440 --> 01:53:27.220
we want ERCOT to endorse the project
01:53:27.220 --> 01:53:30.610
by the end of the year
and to deem it critical
01:53:30.610 --> 01:53:31.830
for reliability.
01:53:31.830 --> 01:53:33.330
If you don't have it done
by the end of the year,
01:53:33.330 --> 01:53:36.448
then you need to give us an update-
01:53:36.448 --> 01:53:38.588
Okay, we will.
01:53:38.588 --> 01:53:40.650
Because we'll
order it if we have to.
01:53:40.650 --> 01:53:41.629
Right?
Yeah.
01:53:41.629 --> 01:53:45.140
And so it's gonna get done
and we want the endorsement
01:53:45.140 --> 01:53:46.020
through the regular process.
01:53:46.020 --> 01:53:50.140
This is $1.2 billion so
we want it to be vetted
01:53:50.140 --> 01:53:52.810
but we want it endorsed
by the end of the year.
01:53:52.810 --> 01:53:55.870
And we want it deemed
critical for reliability
01:53:55.870 --> 01:53:57.980
and we want the party or
parties that are responsible
01:53:57.980 --> 01:54:00.340
for filing a CCN application
at the Commission
01:54:00.340 --> 01:54:02.050
to provide us with their best case,
01:54:02.050 --> 01:54:04.270
most efficient timeline
for how long it's gonna take
01:54:04.270 --> 01:54:05.483
to file the CCN.
01:54:08.150 --> 01:54:10.580
To file it in a project that
Stephen will be talking
01:54:10.580 --> 01:54:14.173
about to us at the end
of this long conversation.
01:54:15.810 --> 01:54:18.190
To file it with their direct
testimony supporting
01:54:18.190 --> 01:54:21.700
their application to help
expedite the CCN process
01:54:21.700 --> 01:54:24.533
once that project comes
over here for our CCN review.
01:54:25.770 --> 01:54:27.053
Now we'll also say,
01:54:28.820 --> 01:54:31.420
well, I'll leave it to my next topic
01:54:31.420 --> 01:54:32.520
on the second circuit.
01:54:34.380 --> 01:54:36.887
Is I had conveyed last open meeting
01:54:36.887 --> 01:54:39.010
and we had broad statutory power
01:54:39.010 --> 01:54:41.520
to order the construction
of transmission
01:54:41.520 --> 01:54:44.700
for safe and reliable to provide safety
01:54:44.700 --> 01:54:46.210
and reliability in the state.
01:54:46.210 --> 01:54:51.210
And so what I would like to understand
01:54:51.710 --> 01:54:54.640
from you all, if there's
additional information
01:54:54.640 --> 01:54:56.166
y'all would want on the second circuit
01:54:56.166 --> 01:54:58.390
to be able to make a determination
01:54:58.390 --> 01:54:59.740
on whether we want to pull the trigger
01:54:59.740 --> 01:55:01.950
and use that authority
or if you're comfortable
01:55:01.950 --> 01:55:04.530
making that decision here today.
01:55:04.530 --> 01:55:06.570
But before we take action,
01:55:06.570 --> 01:55:09.070
I really wanna make sure that we go back
01:55:09.070 --> 01:55:11.570
to Woody's statement that
he abundantly made clear
01:55:11.570 --> 01:55:14.090
to us today that ERCOT would ensure
01:55:14.090 --> 01:55:16.770
that that second line
would be put in place
01:55:16.770 --> 01:55:19.870
in a reliability manner
where we would not create
01:55:19.870 --> 01:55:23.870
a reliability risk for the
citizens of the Rio Grande Valley
01:55:23.870 --> 01:55:26.080
when we add that second circuit.
01:55:26.080 --> 01:55:27.980
We can do that with
outage coordination, yes.
01:55:27.980 --> 01:55:29.800
And you can
manage the outage risk.
01:55:29.800 --> 01:55:30.633
Right.
01:55:30.633 --> 01:55:32.020
That may delay the
project but we'd rather
01:55:32.020 --> 01:55:33.320
manage the outage risk.
01:55:33.320 --> 01:55:34.710
We're not gonna approve outages
01:55:34.710 --> 01:55:36.803
that jeopardize our liability.
01:55:37.690 --> 01:55:38.900
Okay.
01:55:38.900 --> 01:55:42.480
And I also want to make
clear again from you
01:55:42.480 --> 01:55:44.217
that you said together
these two projects,
01:55:44.217 --> 01:55:48.687
the second circuit, from
San Miguel to Palmito
01:55:50.060 --> 01:55:53.670
and the long-term
project together provide
01:55:53.670 --> 01:55:56.170
significant reliability benefits
01:55:56.170 --> 01:55:57.470
for the Rio Grande Valley.
01:55:58.980 --> 01:56:00.330
That's true, yes.
01:56:01.420 --> 01:56:04.598
I'm not, yeah, keep going.
01:56:04.598 --> 01:56:08.450
Okay, so based on this feedback
01:56:08.450 --> 01:56:13.150
that I think is critical to
our evaluation here today,
01:56:13.150 --> 01:56:14.270
I would like to understand from y'all
01:56:14.270 --> 01:56:17.800
if y'all are ready to
order the construction
01:56:17.800 --> 01:56:18.850
of that second circuit,
01:56:18.850 --> 01:56:20.400
based on our broad statutory authority
01:56:20.400 --> 01:56:25.363
under 35.005, subsection
B, 39.203, subsection E.
01:56:27.550 --> 01:56:29.115
I take it you're ready.
01:56:29.115 --> 01:56:30.096
Just a guess.
01:56:30.096 --> 01:56:31.824
Well, I just wanna
hear from y'all.
01:56:31.824 --> 01:56:33.751
Okay.
I'm waiting to hear.
01:56:33.751 --> 01:56:35.860
Wheen are we expected
to have this thing energized
01:56:35.860 --> 01:56:37.339
if we order this today?
01:56:37.339 --> 01:56:38.200
When is it gonna be ready?
01:56:38.200 --> 01:56:39.570
When does it help out the Valley?
01:56:39.570 --> 01:56:40.623
What's your forecast?
01:56:41.640 --> 01:56:44.457
We were indicating
about 34 months
01:56:44.457 --> 01:56:46.510
for our portion,
01:56:46.510 --> 01:56:49.690
and I think the other TSPs
were within that as well.
01:56:49.690 --> 01:56:51.090
Okay, so we're looking at,
01:56:53.360 --> 01:56:57.300
okay, six years for the long-term fix.
01:56:57.300 --> 01:56:58.133
Yep.
01:57:02.270 --> 01:57:03.870
Three years of hurricane season.
01:57:06.210 --> 01:57:09.313
Okay, that's my question.
01:57:10.230 --> 01:57:11.650
What do you think?
01:57:11.650 --> 01:57:14.140
So, I'm trying not to
surprise the court here
01:57:14.140 --> 01:57:17.420
but we actually have
some fairly new information
01:57:17.420 --> 01:57:18.260
to bring to the group.
01:57:18.260 --> 01:57:19.560
Please state your name for
the record and continue with-
01:57:19.560 --> 01:57:20.393
I'm sorry.
01:57:20.393 --> 01:57:22.430
Michael Quinn on behalf
of the Cherryland Utilities.
01:57:22.430 --> 01:57:24.420
So, since we've had our original project
01:57:24.420 --> 01:57:26.630
approximately a month
ago, we've had a large load
01:57:26.630 --> 01:57:29.770
come and approach us
about siting in the Valley.
01:57:29.770 --> 01:57:33.180
And today we at 2021,
01:57:33.180 --> 01:57:36.300
we have 2800 megawatts
worth of capacity.
01:57:36.300 --> 01:57:37.913
2027 is what he said
01:57:37.913 --> 01:57:41.920
we have 3200 megawatts
worth of capacity.
01:57:41.920 --> 01:57:44.860
And so the second circuit buys us
01:57:44.860 --> 01:57:48.090
approximately 300 megawatts
of additional capacity,
01:57:48.090 --> 01:57:51.530
based on the extrapolation
from what ERCOT brought.
01:57:51.530 --> 01:57:54.433
So over the last month,
we've had a load approach us,
01:57:54.433 --> 01:57:55.990
a very meaningful load.
01:57:55.990 --> 01:57:59.156
And if you'll allow me
to be a little bit vague,
01:57:59.156 --> 01:58:02.910
it's not public information
as to who and the size.
01:58:02.910 --> 01:58:05.940
But the way I would describe it is
01:58:07.620 --> 01:58:09.620
they are on a very aggressive timeline.
01:58:09.620 --> 01:58:12.760
I don't have a signed FEA today,
01:58:12.760 --> 01:58:14.770
that's the Facilities
Extension Agreement.
01:58:14.770 --> 01:58:16.320
But we have vetted them enough
01:58:16.320 --> 01:58:18.980
and actually brought it to
ERCOT within the last week,
01:58:18.980 --> 01:58:21.070
that's it's in the tune
of 600 megawatts.
01:58:21.070 --> 01:58:23.190
And it's a
highly controllable load,
01:58:23.190 --> 01:58:24.840
I would assume.
01:58:24.840 --> 01:58:28.630
Yes.
(everyone laughing)
01:58:28.630 --> 01:58:30.530
I've only been
chairman one day.
01:58:30.530 --> 01:58:31.593
Don't get me fired.
01:58:33.260 --> 01:58:35.610
A bit more
information on that, please.
01:58:35.610 --> 01:58:37.477
This is wild stuff.
01:58:37.477 --> 01:58:39.680
And so I'm not trying
to surprise anybody.
01:58:39.680 --> 01:58:41.830
We brought it to ERCOT, like I said,
01:58:41.830 --> 01:58:43.550
in the last week.
01:58:43.550 --> 01:58:46.840
And we believe the
load is very credible.
01:58:46.840 --> 01:58:49.097
They have another facility in Texas
01:58:49.097 --> 01:58:52.370
that another utility is building out to
01:58:52.370 --> 01:58:57.370
so we believe the load is real.
01:58:57.450 --> 01:59:02.683
So absent the second
circuit and the closed loop,
01:59:04.840 --> 01:59:07.023
I suggest that there's near-term risk.
01:59:09.430 --> 01:59:10.613
Yeah, so,
01:59:10.613 --> 01:59:11.740
oh yeah, go please.
01:59:11.740 --> 01:59:12.573
I'm sorry.
01:59:12.573 --> 01:59:14.150
Mr. Quinn, let me ask you a question.
01:59:14.150 --> 01:59:16.513
So you just got this new information
01:59:16.513 --> 01:59:17.346
and you believe-
01:59:17.346 --> 01:59:19.241
Over the last month
and specific we brought
01:59:19.241 --> 01:59:20.520
it to ERCOT over the last week.
01:59:20.520 --> 01:59:22.400
And you're saying that,
01:59:22.400 --> 01:59:25.140
are you saying that it
justifies closing the loop?
01:59:25.140 --> 01:59:28.670
So I'm happy to talk
about closing the loop
01:59:28.670 --> 01:59:31.410
but I believe that in
ERCOT's presentation,
01:59:31.410 --> 01:59:33.820
they suggested closing the loop
01:59:33.820 --> 01:59:37.790
plus the second circuit is what gets us
01:59:37.790 --> 01:59:40.470
to 310 megawatts of capacity.
01:59:40.470 --> 01:59:43.530
Now, I don't wanna put
words in ERCOT's mouth,
01:59:43.530 --> 01:59:45.390
if they have a different
number than that.
01:59:45.390 --> 01:59:46.470
So in other words,
01:59:46.470 --> 01:59:50.350
that 2026 projection for new capacity
01:59:50.350 --> 01:59:52.890
might be moving up.
01:59:52.890 --> 01:59:55.960
Yes, that's exactly
what we're suggesting.
01:59:55.960 --> 02:00:00.660
So the band-aid might
actually be more critical
02:00:00.660 --> 02:00:02.090
than previously thought.
02:00:02.090 --> 02:00:05.760
So the second circuit
and closing the loop
02:00:05.760 --> 02:00:07.800
gives us a little bit of headroom.
02:00:07.800 --> 02:00:09.740
Not substantial, in my opinion,
02:00:09.740 --> 02:00:12.359
but it does allow us to serve that load
02:00:12.359 --> 02:00:13.980
safely and reliably.
02:00:13.980 --> 02:00:17.150
Now that's a conversation
specific to Cherryland.
02:00:17.150 --> 02:00:19.860
I don't know what other conversations,
02:00:19.860 --> 02:00:22.900
Stack or AUP, is
having with other loads.
02:00:22.900 --> 02:00:23.873
We see the,
02:00:25.050 --> 02:00:27.040
Commissioner, we're
very much in your camp
02:00:27.040 --> 02:00:29.930
from the standpoint of, we
see the near-term project
02:00:29.930 --> 02:00:31.710
and the long-term project as both.
02:00:31.710 --> 02:00:34.870
We see them as two sides
of the same reliability coin.
02:00:34.870 --> 02:00:36.940
We see there's near-term needs
02:00:36.940 --> 02:00:38.450
and we're trying to address those with
02:00:38.450 --> 02:00:40.640
these quicker projects.
02:00:40.640 --> 02:00:43.849
We absolutely believe
the right thing to do
02:00:43.849 --> 02:00:46.533
is to go forward with the
Greenville Project as well.
02:00:48.600 --> 02:00:50.060
Woody, do you have any feedback
02:00:50.060 --> 02:00:53.080
on this new load or
have y'all looked at it?
02:00:53.080 --> 02:00:55.717
We have the information
they've provided us
02:00:55.717 --> 02:00:56.550
but nothing further.
02:00:56.550 --> 02:00:58.744
We don't know anymore
about it than they do.
02:00:58.744 --> 02:00:59.577
Okay.
02:01:00.860 --> 02:01:04.100
I can tell you from
AUP's perspective,
02:01:04.100 --> 02:01:07.590
we've also talked to
several large loads as well.
02:01:07.590 --> 02:01:10.297
Don't have any commitments at this time
02:01:10.297 --> 02:01:12.147
but there is a lot of interest there.
02:01:13.472 --> 02:01:16.330
And so the proposal that
Cherryland has provided
02:01:16.330 --> 02:01:19.240
for closing the loop
includes both construction
02:01:19.240 --> 02:01:23.040
by Cherryland and AUP.
02:01:23.040 --> 02:01:26.713
Do you support this closing the loop?
02:01:27.600 --> 02:01:28.470
I do, yeah.
02:01:28.470 --> 02:01:30.990
And I agree with what was said here.
02:01:30.990 --> 02:01:33.550
Our analysis indicates that stringing
02:01:33.550 --> 02:01:35.100
that second circuit all the way
02:01:36.590 --> 02:01:39.980
from San Miguel to
Palmito, closing the loop,
02:01:39.980 --> 02:01:41.660
gets us about 300 megawatts.
02:01:41.660 --> 02:01:44.850
That's consistent with
our analysis as well.
02:01:44.850 --> 02:01:47.430
And by the way, I sincerely apologize
02:01:47.430 --> 02:01:50.780
for any confusion that we
have caused on this issue.
02:01:50.780 --> 02:01:53.313
We do see value in that second circuit.
02:01:54.390 --> 02:01:58.190
And so I would confirm
what ERCOT has said
02:01:58.190 --> 02:02:00.020
and what Cherryland has indicated
02:02:00.020 --> 02:02:04.077
regarding the improvement
in capability associated with it.
02:02:04.077 --> 02:02:08.590
And we will stand by
our 34-month timeline
02:02:08.590 --> 02:02:10.680
for getting that done, energized,
02:02:10.680 --> 02:02:12.030
so we can do that reliably.
02:02:13.560 --> 02:02:16.170
So I just want to make
sure that it's properly framed
02:02:16.170 --> 02:02:19.520
for everybody, 'cause I know
that the normal stakeholders
02:02:19.520 --> 02:02:21.760
who are very sensitive
to transmission costs
02:02:21.760 --> 02:02:24.530
will come knocking.
02:02:24.530 --> 02:02:29.357
But we get near-term
reliability solutions by 2024
02:02:32.241 --> 02:02:36.527
with a long-term
reliability solution by 2027
02:02:38.777 --> 02:02:40.530
for the tune of this-
02:02:40.530 --> 02:02:43.130
We actually think we can
probably do better than that.
02:02:43.130 --> 02:02:47.738
So possibly even by 2026,
we could get the long-term.
02:02:47.738 --> 02:02:49.717
The other way
to think about it is,
02:02:49.717 --> 02:02:52.610
I know we'll incur new
costs and a significant cost
02:02:52.610 --> 02:02:54.680
but what is the cost of inaction?
02:02:54.680 --> 02:02:55.513
Exactly.
02:02:56.740 --> 02:02:59.960
So the way I
think I envision it is
02:02:59.960 --> 02:03:04.450
if we move forward with
ordering these interim options,
02:03:04.450 --> 02:03:07.100
which is the second circuit
and the closing of the loop
02:03:07.100 --> 02:03:09.899
to provide more near-term reliability
02:03:09.899 --> 02:03:14.899
and load growth, load
serving capability in the valley,
02:03:17.873 --> 02:03:22.340
those facilities would
be in place about 2026,
02:03:22.340 --> 02:03:25.016
which is right before
the reliability need arises,
02:03:25.016 --> 02:03:28.170
based on our cost modeling in 2027.
02:03:28.170 --> 02:03:31.680
And then followed by the
new project that would be built
02:03:33.300 --> 02:03:34.710
after the reliability need.
02:03:34.710 --> 02:03:38.100
So we would have sort of a phased-in
02:03:38.100 --> 02:03:42.090
infrastructure build out to
address the reliability needs
02:03:42.090 --> 02:03:44.100
of the Valley and
maintain the reliability
02:03:44.100 --> 02:03:45.230
for those citizens down there.
02:03:45.230 --> 02:03:49.031
I know you've got an
extensive background in this.
02:03:49.031 --> 02:03:50.203
I'm ready to go.
02:03:51.817 --> 02:03:56.817
I'm good to go,
based on your work
02:03:57.080 --> 02:04:02.080
and your expertise on
those two, as you just laid out.
02:04:02.250 --> 02:04:05.266
Okay, so do you want me to
make a motion or do you want-
02:04:05.266 --> 02:04:07.680
Do you want to cover
that or just those two?
02:04:07.680 --> 02:04:08.513
Do you want me
to make a motion?
02:04:08.513 --> 02:04:10.810
If you have a motion
ready, that'd be fantastic.
02:04:10.810 --> 02:04:12.460
Okay, is everybody
comfortable with that?
02:04:12.460 --> 02:04:13.293
Yes.
Okay,
02:04:13.293 --> 02:04:14.570
I just wanna make sure.
02:04:14.570 --> 02:04:19.570
Okay, so pursuant to PURA
35.005, subsection B and 39.23 E,
02:04:22.290 --> 02:04:26.670
I moved to order Stack,
ETT/AUP and Cherryland
02:04:26.670 --> 02:04:28.270
to construct a new second circuit
02:04:28.270 --> 02:04:31.150
on the existing double-circuit
capable 345 kb line
02:04:31.150 --> 02:04:34.200
that runs from the San Miguel station
02:04:34.200 --> 02:04:37.580
to the Palmito station
and to close the loop
02:04:37.580 --> 02:04:41.473
from Palmito to North Edinburg
02:04:41.473 --> 02:04:45.913
to help ensure reliability
in the Rio Grande Valley.
02:04:47.560 --> 02:04:48.393
We've got a motion.
02:04:48.393 --> 02:04:49.226
Is there a second?
02:04:50.860 --> 02:04:52.155
Second.
02:04:52.155 --> 02:04:53.755
All in favor, say aye.
Aye.
02:04:55.043 --> 02:04:55.876
Okay, and before we move on,
02:04:55.876 --> 02:04:59.330
I will also say that if a
CCN amendment is needed
02:04:59.330 --> 02:05:00.710
to build these facilities,
02:05:00.710 --> 02:05:01.730
and I don't think it will be needed
02:05:01.730 --> 02:05:03.990
for closing the loop, but if it's needed
02:05:03.990 --> 02:05:08.760
for the second circuit, that
EDT and Cherryland said,
02:05:08.760 --> 02:05:11.370
it would take about eight
months to prepare the CCN
02:05:11.370 --> 02:05:14.820
for submission to the PUC,
02:05:14.820 --> 02:05:17.980
if a CCN application is
needed, a CNN amendment.
02:05:17.980 --> 02:05:21.913
So I would like to understand
if that can be done faster.
02:05:24.580 --> 02:05:26.240
By the end of the year.
02:05:26.240 --> 02:05:28.940
Because if we are
approving these projects
02:05:28.940 --> 02:05:31.160
under our statutory authority,
02:05:31.160 --> 02:05:34.960
we will be processing
the CCN within 180 days,
02:05:36.510 --> 02:05:37.370
so that's about six months.
02:05:37.370 --> 02:05:40.610
So we would like to get this
going as soon as possible.
02:05:40.610 --> 02:05:42.500
Yeah and to be clear,
02:05:42.500 --> 02:05:47.275
from our review of our
existing CCN, we don't see,
02:05:47.275 --> 02:05:50.140
it's already certificated
for double-circuit
02:05:50.140 --> 02:05:52.405
so we think we're good to go.
02:05:52.405 --> 02:05:54.280
So we don't see that as an issue.
02:05:54.280 --> 02:05:57.820
And our initial review
indicates the same.
02:05:57.820 --> 02:06:00.870
If the Commission has other perspectives
02:06:01.897 --> 02:06:04.365
in Cherryland's part of the project,
02:06:04.365 --> 02:06:07.970
we specifically have said,
we can do it in 30 months.
02:06:07.970 --> 02:06:10.090
If we have to go
through the CCN process,
02:06:10.090 --> 02:06:13.952
obviously routing's not a
issue for the second circuit,
02:06:13.952 --> 02:06:18.560
we're prepared as soon as
we start that CCN process
02:06:18.560 --> 02:06:20.540
to go ahead and put dollars at work,
02:06:20.540 --> 02:06:22.500
from an engineering and
procurement standpoint,
02:06:22.500 --> 02:06:24.480
recognizing the urgency of the project.
02:06:24.480 --> 02:06:27.270
And I feel comfortable
that we'll hit 30 months.
02:06:27.270 --> 02:06:29.320
We don't have a contrary
opinion on the CCN.
02:06:29.320 --> 02:06:30.153
Good to hear.
02:06:30.153 --> 02:06:31.397
Thank you.
02:06:31.397 --> 02:06:32.230
So you don't need,
02:06:32.230 --> 02:06:33.063
your position is you don't need a CCN
02:06:33.063 --> 02:06:34.280
for the closing the loop facilities?
02:06:34.280 --> 02:06:35.113
I'm sorry.
02:06:35.113 --> 02:06:37.050
For closing the loop,
yes, we absolutely will
02:06:37.050 --> 02:06:37.890
because it's brand new.
02:06:37.890 --> 02:06:39.620
Right away for the second circuit.
02:06:39.620 --> 02:06:40.640
I'm sorry I was not clear.
02:06:40.640 --> 02:06:43.393
Okay, so will that take
eight months to prepare?
02:06:44.886 --> 02:06:48.050
Our past histories
has indicated yes,
02:06:48.050 --> 02:06:49.663
eight months is appropriate.
02:06:50.660 --> 02:06:54.640
I'll commit that we will
leave no stone unturned
02:06:54.640 --> 02:06:57.370
to try and improve upon
that eight-month period.
02:06:57.370 --> 02:07:00.631
Okay, so can you
go back and visit
02:07:00.631 --> 02:07:05.631
with your counsel and see
if you can get it done faster?
02:07:05.890 --> 02:07:08.003
And also-
Why yes, I will.
02:07:08.003 --> 02:07:11.717
(everyone laughing)
02:07:11.717 --> 02:07:12.550
There we go.
02:07:12.550 --> 02:07:13.383
Yes, sir.
02:07:13.383 --> 02:07:14.216
My name is Corey Allen.
02:07:14.216 --> 02:07:18.050
I'm the power delivery manager
for South Texas Electric Coop
02:07:18.050 --> 02:07:22.400
and, like Wayman
said, we've got the rights
02:07:22.400 --> 02:07:25.050
to the double-circuit on that 42 miles
02:07:25.050 --> 02:07:28.290
that we have from San
Miguel going towards the Lobo.
02:07:28.290 --> 02:07:31.190
And we do have the
easement rights in place
02:07:31.190 --> 02:07:36.190
so don't think we'll
have a regulatory time.
02:07:36.220 --> 02:07:37.510
Excellent.
02:07:37.510 --> 02:07:39.810
Cherryland, back to Cherryland.
02:07:39.810 --> 02:07:41.369
Good morning, Commissioners.
02:07:41.369 --> 02:07:42.350
John Zerwas with Cherryland.
02:07:42.350 --> 02:07:44.290
We can certainly go back
and see if we can improve
02:07:44.290 --> 02:07:45.123
on the eight months.
02:07:45.123 --> 02:07:47.541
There's probably a few
things we could expedite
02:07:47.541 --> 02:07:48.800
and try to cut it a little bit shorter.
02:07:48.800 --> 02:07:50.810
But we'll come back and stay in contact
02:07:50.810 --> 02:07:51.780
with you all about that.
02:07:51.780 --> 02:07:55.330
Okay and as I directed,
and for the other project,
02:07:55.330 --> 02:07:56.880
if you can file your direct testimony
02:07:56.880 --> 02:07:59.444
with your CCN application to cut time,
02:07:59.444 --> 02:08:00.277
I think that would be very helpful.
02:08:00.277 --> 02:08:01.340
Absolutely.
02:08:01.340 --> 02:08:02.760
Excellent.
02:08:02.760 --> 02:08:03.593
All right.
02:08:05.490 --> 02:08:07.760
I think we can leave
the Rio Grande Valley.
02:08:07.760 --> 02:08:08.593
All right.
02:08:11.518 --> 02:08:16.518
I'll just remind everyone
that before the direction was
02:08:17.160 --> 02:08:19.550
given to move forward
with closing the loop
02:08:19.550 --> 02:08:21.593
and the second circuit,
02:08:22.510 --> 02:08:24.180
there was also a very clear directive
02:08:24.180 --> 02:08:26.820
from this Commission
to ERCOT to continue
02:08:26.820 --> 02:08:29.360
to accelerate the option to long-term
02:08:29.360 --> 02:08:30.980
transmission project under,
02:08:30.980 --> 02:08:33.823
would you like to
codify that in motion or?
02:08:35.780 --> 02:08:36.613
Sure.
02:08:38.973 --> 02:08:40.046
I think she did, didn't she?
02:08:40.046 --> 02:08:42.380
I did.
Oh, I'm sorry.
02:08:42.380 --> 02:08:44.281
We can, if you'd like.
02:08:44.281 --> 02:08:45.114
No, no.
02:08:45.114 --> 02:08:45.947
We're good, right?
02:08:45.947 --> 02:08:46.980
Well, before we
leave this topic,
02:08:46.980 --> 02:08:50.010
actually, I do have a
very important statement
02:08:50.010 --> 02:08:51.110
that I'd like to make.
02:08:52.010 --> 02:08:53.530
I think it's, as we've said,
02:08:53.530 --> 02:08:56.020
it's extremely important
to maintain reliability
02:08:56.020 --> 02:08:57.174
in the Rio Grande Valley.
02:08:57.174 --> 02:08:59.590
But I do want to say
I can't leave this topic
02:08:59.590 --> 02:09:02.370
with again reiterating
that very importantly,
02:09:02.370 --> 02:09:03.833
that we need to be clear
that we're not making a
02:09:03.833 --> 02:09:05.540
determination on cost.
02:09:05.540 --> 02:09:08.014
I know I asked for cost estimates
02:09:08.014 --> 02:09:10.630
in the filings that were
made this past Monday.
02:09:10.630 --> 02:09:12.870
And although the Commission
is ordering the construction
02:09:12.870 --> 02:09:14.730
of these transmission
lines and facilities
02:09:14.730 --> 02:09:16.511
to improve the
reliability in the Valley,
02:09:16.511 --> 02:09:19.410
we are in no way giving
the companies a blank check
02:09:19.410 --> 02:09:21.630
to build the facilities
being ordered today.
02:09:21.630 --> 02:09:25.470
All costs associated
with the construction
02:09:25.470 --> 02:09:28.209
of these facilities, pursuant
to the Commission's order,
02:09:28.209 --> 02:09:30.860
must still meet the rate
making standard set forth
02:09:30.860 --> 02:09:32.170
in PURA and the Commission rules
02:09:32.170 --> 02:09:33.660
in a future rate making proceeding,
02:09:33.660 --> 02:09:36.340
which will require that
rates are just and reasonable.
02:09:36.340 --> 02:09:38.550
It is my expectation, and
I think our expectation,
02:09:38.550 --> 02:09:41.850
that staff will review all
costs that the companies seek
02:09:41.850 --> 02:09:44.440
to recover for the order transmission
02:09:44.440 --> 02:09:46.930
with the same level of
scrutiny that they would use
02:09:46.930 --> 02:09:48.910
in a rate case proceeding
that does not involve
02:09:48.910 --> 02:09:52.330
the Commission order
to construct to help ensure
02:09:52.330 --> 02:09:54.560
that the rate payers
pay rates that comply
02:09:54.560 --> 02:09:58.053
with PURA and the
Commission's rule standards.
02:09:59.029 --> 02:10:01.220
Well put.
I second that.
02:10:01.220 --> 02:10:02.760
Thank you.
02:10:02.760 --> 02:10:05.270
So Commissioner
Cobos, just to follow
02:10:05.270 --> 02:10:06.540
with the less important,
02:10:06.540 --> 02:10:10.680
we're gonna open a
project as a storage house,
02:10:10.680 --> 02:10:13.380
a place to file Commission
orders that direct
02:10:13.380 --> 02:10:15.750
to building of the transmission
so that these orders
02:10:15.750 --> 02:10:17.353
will be easy to find.
02:10:18.630 --> 02:10:21.110
And can you move my
memos and the TSP's filings
02:10:21.110 --> 02:10:23.640
that have been filed to date from 51617
02:10:23.640 --> 02:10:24.882
into that new project?
02:10:24.882 --> 02:10:29.053
I'll file those in that
when we open it up.
02:10:30.260 --> 02:10:31.093
Thank you.
02:10:31.093 --> 02:10:32.112
I think that's a great idea.
02:10:32.112 --> 02:10:32.945
Excellent.
That's a good idea.
02:10:32.945 --> 02:10:34.011
Okay.
02:10:34.011 --> 02:10:35.483
Good deal.
02:10:35.483 --> 02:10:36.692
Thank you all.
02:10:36.692 --> 02:10:38.530
Thank you.
Thank you.
02:10:40.620 --> 02:10:42.016
That wraps up business on-
02:10:42.016 --> 02:10:43.420
Can I?
02:10:43.420 --> 02:10:46.286
I just have one statement
that I wanna make.
02:10:46.286 --> 02:10:48.370
It's not pertaining to
the Rio Grande Valley,
02:10:48.370 --> 02:10:49.643
but I've had some discussions
02:10:49.643 --> 02:10:54.643
with Brad Jones at
ERCOT about potential,
02:10:58.680 --> 02:11:02.110
if we run into a major
reliability outage,
02:11:02.110 --> 02:11:07.110
like we did during winter storm Uri,
02:11:07.400 --> 02:11:10.030
and if our system went down,
02:11:10.030 --> 02:11:11.990
obviously we have black star plans
02:11:11.990 --> 02:11:14.580
and we have black star
plants around ERCOT
02:11:14.580 --> 02:11:18.530
that would help us
bring the system back up.
02:11:18.530 --> 02:11:21.429
That's still not an easy
process to manage,
02:11:21.429 --> 02:11:26.400
bringing up generation
and load in a way that is
02:11:27.740 --> 02:11:30.098
well, there's a process for that.
02:11:30.098 --> 02:11:34.950
And thank God we have
operators that test this
02:11:34.950 --> 02:11:37.251
and work towards it.
02:11:37.251 --> 02:11:38.980
There have been a couple of discussions
02:11:38.980 --> 02:11:43.359
about what might
happen if we could build
02:11:43.359 --> 02:11:47.220
an AC interconnection to SPP
02:11:48.530 --> 02:11:52.490
or to the Midwest ISO
South, Entergy South,
02:11:52.490 --> 02:11:55.233
and keep that circuit open all the time.
02:11:56.138 --> 02:11:59.400
And I'm not talking about
FERC jurisdiction here,
02:11:59.400 --> 02:12:01.060
but this would never happen if there
02:12:01.060 --> 02:12:02.250
was a jurisdictional issue.
02:12:02.250 --> 02:12:06.170
But keep it open unless there
was the absolute emergency
02:12:06.170 --> 02:12:10.010
that leaning on another system
would help us bring up the
02:12:10.010 --> 02:12:13.293
ERCOT system in the
event of a major catastrophe.
02:12:14.219 --> 02:12:17.480
We've got a handful of
facilities that might be utilized
02:12:17.480 --> 02:12:19.840
for that and I know
ERCOT has been working
02:12:20.690 --> 02:12:23.080
with a university here
in Texas on a study
02:12:23.080 --> 02:12:24.610
that should be done in 2022.
02:12:25.760 --> 02:12:29.560
But to me it seems like
it's a really good issue
02:12:29.560 --> 02:12:32.190
to consider for the
economy of our state.
02:12:32.190 --> 02:12:34.538
We don't want an outage for 30 days.
02:12:34.538 --> 02:12:35.430
We don't want an outage for a week,
02:12:35.430 --> 02:12:36.940
if we can lean on something else.
02:12:36.940 --> 02:12:39.310
We've done things similar
where we've block loaded,
02:12:39.310 --> 02:12:43.050
as it's called, loads into
SVP and loads into MISO.
02:12:43.050 --> 02:12:44.400
This would be a little different,
02:12:44.400 --> 02:12:49.400
but it could provide us some
valuable black start frequency
02:12:51.130 --> 02:12:52.920
support if we needed it.
02:12:52.920 --> 02:12:54.626
And we don't have the answer yet,
02:12:54.626 --> 02:12:59.626
but to me, it's a good educational tool.
02:13:00.440 --> 02:13:04.500
It's a good research project
to see if this is something
02:13:04.500 --> 02:13:06.290
that would benefit all Texans
02:13:06.290 --> 02:13:10.280
in the event of a major
catastrophic outage.
02:13:10.280 --> 02:13:11.390
That's a great idea.
02:13:11.390 --> 02:13:14.550
And I know you've
taken a special interest
02:13:14.550 --> 02:13:16.680
and initiated some special projects
02:13:16.680 --> 02:13:18.470
related to vegetation management,
02:13:18.470 --> 02:13:20.480
a more granular load shed.
02:13:20.480 --> 02:13:23.690
Would this be something
you'd be willing to take on
02:13:23.690 --> 02:13:25.873
and lead the charge on?
02:13:25.873 --> 02:13:26.706
I thought I already did.
02:13:26.706 --> 02:13:28.740
I did too.
02:13:28.740 --> 02:13:30.107
I did too, just what's the next step?
02:13:30.107 --> 02:13:31.013
Thank you, thank you, sir.
02:13:31.013 --> 02:13:34.210
I think, I don't know
what the next step is.
02:13:34.210 --> 02:13:37.390
I think we need data from the study.
02:13:37.390 --> 02:13:42.180
Obviously, we'll have
conversations with FERC
02:13:42.180 --> 02:13:43.740
and the pink building.
02:13:43.740 --> 02:13:47.200
We don't want, this
is not anything to do
02:13:47.200 --> 02:13:48.660
If there's a jurisdictional problem-
02:13:48.660 --> 02:13:51.810
With partial application,
in other words.
02:13:51.810 --> 02:13:55.991
This would be totally
emergency application period.
02:13:55.991 --> 02:13:59.400
As with the other issues
that you're taking the lead on,
02:13:59.400 --> 02:14:04.400
please identify ways to
accelerate, streamline processes
02:14:04.610 --> 02:14:09.610
and move as quickly as we
can to an actionable solution.
02:14:10.050 --> 02:14:11.340
Okay, thank you.
02:14:12.330 --> 02:14:15.695
Woody, back to you for the
remainder of your presentation.
02:14:15.695 --> 02:14:17.090
All right.
02:14:17.090 --> 02:14:18.060
You guys ready to move on
02:14:18.060 --> 02:14:21.290
to load forecast boundary threshold?
02:14:21.290 --> 02:14:22.123
Yes, sir.
Yes sir, quickly.
02:14:22.123 --> 02:14:23.620
Okay, quickly.
02:14:23.620 --> 02:14:27.230
So when ERCOT prepares
future planning fixes,
02:14:27.230 --> 02:14:29.360
we put a load forecasting and it's kind
02:14:29.360 --> 02:14:30.540
of a top-down forecast.
02:14:30.540 --> 02:14:32.937
We use economics and Moody's forecast.
02:14:32.937 --> 02:14:35.030
And we say, this is how
much load is gonna be
02:14:35.030 --> 02:14:36.615
in certain areas.
02:14:36.615 --> 02:14:39.680
That's our forecast.
02:14:39.680 --> 02:14:43.110
And this forecast goes into 2022 cases,
02:14:43.110 --> 02:14:45.350
'23, '24, '25, '26,
02:14:45.350 --> 02:14:49.140
those future planning cases
have our forecasts in 'em.
02:14:49.140 --> 02:14:53.770
Now TSPs, working
more from the field up,
02:14:53.770 --> 02:14:56.140
taking customer information,
02:14:56.140 --> 02:14:59.403
bring their forecast in
and compare it to ours.
02:15:00.580 --> 02:15:02.880
If their forecast currently,
02:15:02.880 --> 02:15:07.010
if their forecast is greater than ours
02:15:07.010 --> 02:15:12.010
but less than 5% more,
then we accept their forecast
02:15:12.110 --> 02:15:14.340
and put that into the planning case.
02:15:14.340 --> 02:15:18.283
If their forecast is, let's
say 8% more than ours,
02:15:19.213 --> 02:15:22.280
then we cap it at 5%.
02:15:22.280 --> 02:15:24.360
And that's true for
all the weather zones,
02:15:24.360 --> 02:15:26.200
except for the Far West,
02:15:26.200 --> 02:15:28.050
which has a seven and a half percent.
02:15:29.090 --> 02:15:33.360
So what we're talking about today is
02:15:33.360 --> 02:15:38.360
a move to increasing
that boundary threshold.
02:15:38.448 --> 02:15:41.046
Instead of having 5%
for the weather zone,
02:15:41.046 --> 02:15:44.437
moving it up to seven and a half percent
02:15:44.437 --> 02:15:46.520
in all the weather zones.
02:15:48.890 --> 02:15:51.210
I think that's a reasonable initial step
02:15:51.210 --> 02:15:56.210
to better account for the
changing needs and load growth.
02:15:56.460 --> 02:15:59.180
And it may actually help alleviate some
02:15:59.180 --> 02:16:01.580
of the just-in-time
planning that we have to do,
02:16:03.340 --> 02:16:05.420
having that power load in there.
02:16:05.420 --> 02:16:10.420
So the request here is
that you give us instructions
02:16:10.470 --> 02:16:12.500
that you want that
boundary threshold moved
02:16:12.500 --> 02:16:14.250
from 5% to seven and a half percent
02:16:14.250 --> 02:16:15.719
in all the weather zones.
02:16:15.719 --> 02:16:19.220
And then the process is
we can go back to TAC.
02:16:19.220 --> 02:16:22.010
We ask for a TAC recommendation.
02:16:22.010 --> 02:16:23.977
We take the TAC
recommendation to the board
02:16:23.977 --> 02:16:28.373
and the board approves it
and then it's done at that point.
02:16:29.429 --> 02:16:31.079
That makes sense to me.
02:16:31.913 --> 02:16:34.310
And then does it have
to come back to us?
02:16:34.310 --> 02:16:35.790
No, we can implement it.
02:16:35.790 --> 02:16:37.410
Okay, good.
02:16:37.410 --> 02:16:38.870
Thank you, Woody,
for your recommendation.
02:16:38.870 --> 02:16:40.490
I think it's important to recognize
02:16:40.490 --> 02:16:42.720
that our state is growing
and it's been growing.
02:16:42.720 --> 02:16:44.430
We have a tremendous
amount of population
02:16:44.430 --> 02:16:46.490
and economic growth
throughout the state.
02:16:46.490 --> 02:16:51.260
I know that the rest
of the state is in 5%.
02:16:51.260 --> 02:16:53.610
Liz Jones, do you have
anything you'd like to add?
02:16:53.610 --> 02:16:55.080
If I may.
Please.
02:17:01.090 --> 02:17:02.713
Liz Jones for Encore.
02:17:05.340 --> 02:17:07.710
I'd like to make sure one thing's clear,
02:17:07.710 --> 02:17:12.010
which is that the
percentage increment is
02:17:12.010 --> 02:17:13.590
on a weather zone basis.
02:17:13.590 --> 02:17:15.503
And so depending on the weather zone,
02:17:16.522 --> 02:17:18.700
that's a few megawatts
or that's a lot of megawatts.
02:17:18.700 --> 02:17:21.250
So if you talk about the
North Central weather zone,
02:17:21.250 --> 02:17:23.540
which includes the DFW area,
02:17:23.540 --> 02:17:26.720
seven and a half percent
is a significant amount.
02:17:26.720 --> 02:17:28.908
If you talk about the
Far West weather zone,
02:17:28.908 --> 02:17:31.340
it is a much smaller amount.
02:17:31.340 --> 02:17:36.340
And wasn't familiar
with our cuts intentions
02:17:37.370 --> 02:17:39.833
until you all provided your slides.
02:17:41.600 --> 02:17:43.350
Would like for you all to think about
02:17:43.350 --> 02:17:46.070
whether there needs
to be some relationship
02:17:46.070 --> 02:17:51.070
to the base size of the forecast
02:17:52.050 --> 02:17:55.460
when you're thinking about
what the percentage increment
02:17:55.460 --> 02:17:57.610
of adjustments should be.
02:17:57.610 --> 02:18:00.480
And that is how the Far West moved
02:18:00.480 --> 02:18:02.390
from five to seven and a half.
02:18:02.390 --> 02:18:04.270
I'm not suggesting that there's a basis
02:18:04.270 --> 02:18:06.370
to move from seven and a half to 10,
02:18:06.370 --> 02:18:10.400
but I do want to make
you aware that the,
02:18:10.400 --> 02:18:13.260
particularly in fast growing
areas like the Valley,
02:18:13.260 --> 02:18:18.260
like the Permian,
that can be less useful
02:18:18.800 --> 02:18:20.760
just because of the base number.
02:18:20.760 --> 02:18:24.250
And so I think, as Woody explained,
02:18:24.250 --> 02:18:26.650
this is something that is
managed through the ERCOT board
02:18:26.650 --> 02:18:29.820
and so it doesn't necessarily
have to come back through you.
02:18:29.820 --> 02:18:34.350
But it would be helpful
if you offered guidance
02:18:34.350 --> 02:18:36.740
on treating this issue.
02:18:36.740 --> 02:18:40.070
Do you have a suggestion
on what a revised number
02:18:40.070 --> 02:18:43.360
for a fast-growing area
like DFW should look like?
02:18:43.360 --> 02:18:47.070
Well, my suggestion is
that because the base number
02:18:47.070 --> 02:18:51.940
in North Central is so
large and we're now talking
02:18:51.940 --> 02:18:54.470
about the seven and a half percent ban,
02:18:54.470 --> 02:18:58.550
I think we, at Encore, are
much more comfortable
02:18:58.550 --> 02:19:01.040
with what those numbers
look like for North Central
02:19:01.040 --> 02:19:04.620
than we are for what those
numbers look like in the Permian.
02:19:04.620 --> 02:19:08.870
And so if you could afford ERCOT
02:19:10.220 --> 02:19:13.660
and Woody the discretion
to bump that number up
02:19:13.660 --> 02:19:18.530
for the smaller weather
zones, if they deem appropriate,
02:19:18.530 --> 02:19:21.393
I think it would be beneficial for us.
02:19:23.671 --> 02:19:25.997
Fair enough.
Woody, is there
02:19:25.997 --> 02:19:29.280
any information that you
can maybe bring back to us
02:19:29.280 --> 02:19:31.320
that would help paint a little bit more
02:19:31.320 --> 02:19:34.050
of a picture for us on exactly what-
02:19:34.050 --> 02:19:36.460
Yeah, maybe an impact of-
02:19:36.460 --> 02:19:38.600
Low thresholds, you know.
02:19:38.600 --> 02:19:39.433
We can look at,
02:19:39.433 --> 02:19:41.210
I mean, this has been going on for years
02:19:41.210 --> 02:19:44.510
and so you can go back and
look at what actually happened
02:19:44.510 --> 02:19:47.760
in 2020 versus what
the ERCOT load forecast
02:19:47.760 --> 02:19:49.390
said was gonna happen in 2020.
02:19:49.390 --> 02:19:50.223
That's a good point.
02:19:50.223 --> 02:19:51.760
You can do that for 2019
02:19:51.760 --> 02:19:53.350
'cause 2020 was kind of a strange year
02:19:53.350 --> 02:19:55.933
because of COVID.
02:19:57.790 --> 02:20:00.263
So there is information like that.
02:20:02.199 --> 02:20:04.130
This is a stretch though right now.
02:20:04.130 --> 02:20:06.340
And seven and a half percent,
02:20:06.340 --> 02:20:09.723
we thought long and hard about
the seven and a half percent.
02:20:09.723 --> 02:20:14.260
That was a stretch, that's a big change.
02:20:14.260 --> 02:20:15.880
Well it seems like the impact
02:20:15.880 --> 02:20:20.060
of whatever that 5% to x is
02:20:20.060 --> 02:20:22.975
can greatly vary,
depending on the load serve
02:20:22.975 --> 02:20:24.140
to that particular area.
02:20:24.140 --> 02:20:27.950
Would it be productive
as an intermediate step
02:20:27.950 --> 02:20:32.950
to look at a data table
of expected impact
02:20:33.940 --> 02:20:37.373
in each of the seven weather zones for-
02:20:38.590 --> 02:20:41.062
I can tell you that this year,
02:20:41.062 --> 02:20:46.062
this year six of the
eight weather zones,
02:20:46.980 --> 02:20:51.270
the TSP predictions forecast were above
02:20:51.270 --> 02:20:54.253
what we had in our economic forecast.
02:20:55.460 --> 02:20:57.610
Six out of the eight weather zones.
02:20:57.610 --> 02:20:59.617
More than 5%?
02:20:59.617 --> 02:21:02.190
More than 5%, correct.
02:21:02.190 --> 02:21:03.883
And I can also tell you that,
02:21:07.593 --> 02:21:08.913
let me get my number here.
02:21:10.463 --> 02:21:12.903
We did think about this
a little bit beforehand.
02:21:16.310 --> 02:21:19.350
That, for example,
I'm not gonna use 2020
02:21:19.350 --> 02:21:23.700
but in 2019, if you think about 2019,
02:21:23.700 --> 02:21:27.190
we made a forecast in 2016 of what 2019
02:21:27.190 --> 02:21:28.190
was gonna look like.
02:21:29.360 --> 02:21:31.310
And the actual numbers that came in
02:21:32.240 --> 02:21:35.380
were below our forecast in 2019
02:21:35.380 --> 02:21:38.690
in every weather zone,
except for the Far West,
02:21:38.690 --> 02:21:42.020
which is partly what
led to us increasing that
02:21:42.020 --> 02:21:43.760
to seven and a half percent.
02:21:43.760 --> 02:21:47.840
So this year, six out of eight forecasts
02:21:47.840 --> 02:21:49.540
are above our forecasts.
02:21:49.540 --> 02:21:52.170
In the past, the actuals,
when they've come in,
02:21:52.170 --> 02:21:55.970
have been below the 5%
boundary that we have.
02:21:55.970 --> 02:21:59.483
So what does the future hold?
02:22:01.290 --> 02:22:04.593
Strong economic
growth still, it appears.
02:22:05.514 --> 02:22:08.220
The bottom line
is forecasting is hard.
02:22:08.220 --> 02:22:09.380
No matter what you say,
02:22:09.380 --> 02:22:12.427
you will surely be wrong,
it's just a question of how.
02:22:12.427 --> 02:22:15.390
And so again, I'm not up here asking
02:22:15.390 --> 02:22:17.210
for a blank check, by any means.
02:22:17.210 --> 02:22:19.210
But what I am asking you all to think
02:22:19.210 --> 02:22:23.010
about is seven and a half is a guidepost
02:22:23.010 --> 02:22:26.660
and not a cap because circumstances
02:22:26.660 --> 02:22:30.370
in different weather
zones may necessitate
02:22:30.370 --> 02:22:32.140
a different result.
02:22:32.140 --> 02:22:33.676
Fair enough.
02:22:33.676 --> 02:22:34.509
I appreciate the point.
02:22:34.509 --> 02:22:36.290
Maybe you could coordinate with ERCOT
02:22:36.290 --> 02:22:39.070
on evaluating what a
scenario would look like
02:22:39.070 --> 02:22:42.150
between with different metrics
for different weather zones.
02:22:42.150 --> 02:22:43.377
Would that make sense?
02:22:43.377 --> 02:22:45.490
Well, I think so,
02:22:45.490 --> 02:22:48.900
but it sounds like what you're asking
02:22:48.900 --> 02:22:51.100
for is sort of a policy change
02:22:51.100 --> 02:22:52.600
of how we apply the threshold.
02:22:54.090 --> 02:22:56.860
Well, so let me, I'm sorry,
02:22:56.860 --> 02:22:58.260
brief history lesson.
02:22:58.260 --> 02:23:02.330
Part of the reason that
the 5% came into effect
02:23:02.330 --> 02:23:04.970
in the planning guide
was as a consequence
02:23:04.970 --> 02:23:09.930
of concern that transmission
and distribution providers
02:23:09.930 --> 02:23:12.653
were padding their forecasts
to maximize their bill.
02:23:14.271 --> 02:23:19.023
And Encore supported this
change and we're standing by it.
02:23:20.132 --> 02:23:24.290
What we're suggesting
is that in the past
02:23:24.290 --> 02:23:26.830
that has been applied
as such a hard cap,
02:23:26.830 --> 02:23:29.420
from a forecasting perspective,
02:23:29.420 --> 02:23:33.340
that it has been difficult
to bring forward projects,
02:23:33.340 --> 02:23:35.500
particularly in fast growing areas,
02:23:35.500 --> 02:23:37.450
that we think are merited,
02:23:37.450 --> 02:23:41.330
not because it's within
the 5% dead band,
02:23:41.330 --> 02:23:42.163
if you will,
02:23:42.163 --> 02:23:45.650
but because there are particular
circumstances in the area,
02:23:45.650 --> 02:23:50.400
and I believe Senate
Bill 1281 actually codifies
02:23:50.400 --> 02:23:55.380
that kind of point of
view so that there is
02:23:55.380 --> 02:23:58.320
some more flexibility there
than what has historically
02:23:58.320 --> 02:24:03.320
been provided by the 5% or
the seven and a half percent cap.
02:24:03.580 --> 02:24:08.390
Okay, so as a
utility on the ground,
02:24:08.390 --> 02:24:09.520
in your service territory,
02:24:09.520 --> 02:24:11.760
you're able to see the growth better
02:24:11.760 --> 02:24:14.650
or in some ways are able to have,
02:24:14.650 --> 02:24:16.160
you're providing information to ERCOT
02:24:16.160 --> 02:24:17.860
because you're on the ground.
02:24:17.860 --> 02:24:19.630
You're much closer to
the actual load growth.
02:24:19.630 --> 02:24:22.710
They have their
forecasting methodologies.
02:24:22.710 --> 02:24:25.430
And so it sounds like to me,
02:24:25.430 --> 02:24:27.590
and again, please
clarify if I'm not exactly
02:24:27.590 --> 02:24:29.690
capturing what you're saying is that,
02:24:29.690 --> 02:24:31.890
even if we went to
seven and a half percent,
02:24:32.928 --> 02:24:34.330
and we asked ERCOT to go and change it
02:24:34.330 --> 02:24:35.163
for all the weather zones.
02:24:35.163 --> 02:24:37.510
Because it sounds like, from
what you're saying, Woody,
02:24:37.510 --> 02:24:42.510
that the 5% in six weather
zones is constraining.
02:24:44.070 --> 02:24:47.230
It's actually constraining
how much load growth
02:24:47.230 --> 02:24:49.770
is probably happening
'cause we have rebounded
02:24:49.770 --> 02:24:52.050
from COVID and our
economy has been strong,
02:24:52.050 --> 02:24:53.330
it's gonna stay strong.
02:24:53.330 --> 02:24:57.860
And so if we go to
seven and a half percent,
02:24:57.860 --> 02:25:00.840
to not have that be a hard cap
02:25:00.840 --> 02:25:05.840
but to be a guide and maybe
if you see something higher
02:25:05.890 --> 02:25:08.004
than what ERCOT is seeing,
02:25:08.004 --> 02:25:10.330
you can provide supporting documentation
02:25:10.330 --> 02:25:12.610
and work with ERCOT to prove your case?
02:25:12.610 --> 02:25:16.440
Yes, and again,
historically that has been
02:25:16.440 --> 02:25:18.340
in the nature of signed agreements
02:25:19.306 --> 02:25:22.930
that are securitized
by the new customers.
02:25:22.930 --> 02:25:25.340
That's a just-in-time standard
02:25:25.340 --> 02:25:30.340
because customers don't
wanna make commitments
02:25:30.800 --> 02:25:33.210
and disclose their business plans
02:25:33.210 --> 02:25:34.880
earlier than they have to.
02:25:34.880 --> 02:25:39.300
So we're looking for
the ability to use a range
02:25:39.300 --> 02:25:41.890
of evidence and we
bear the burden of proof,
02:25:41.890 --> 02:25:46.060
absolutely, as utilities,
that additional infrastructure
02:25:46.060 --> 02:25:47.400
is needed.
02:25:47.400 --> 02:25:50.600
Okay, so as an interim step,
02:25:50.600 --> 02:25:55.600
something to consider
is perhaps having Woody
02:25:55.727 --> 02:25:59.010
and ERCOT go ahead and
increase to seven and a half,
02:25:59.010 --> 02:26:00.540
as an interim step.
02:26:00.540 --> 02:26:03.840
And then for this proposal
that you've provided us today,
02:26:03.840 --> 02:26:07.080
to continue exploring
how we can get that
02:26:07.080 --> 02:26:09.757
into the planning guides so
that we have more transparency
02:26:09.757 --> 02:26:11.480
in the process going forward.
02:26:11.480 --> 02:26:14.123
Does that makes sense?
Yes.
02:26:17.020 --> 02:26:19.920
So this would not
be a permanent order
02:26:19.920 --> 02:26:23.770
in terms of system change for ERCOT.
02:26:23.770 --> 02:26:28.770
This would just be almost
a pilot moving forward
02:26:29.091 --> 02:26:31.880
for their evaluation guidelines?
02:26:31.880 --> 02:26:34.330
I think that if we
were comfortable today,
02:26:34.330 --> 02:26:36.090
if we were comfortable
and if you're not,
02:26:36.090 --> 02:26:38.267
then you can think about it.
02:26:38.267 --> 02:26:40.520
But if you were comfortable today,
02:26:40.520 --> 02:26:43.790
as an interim step, as
ERCOT recommended,
02:26:43.790 --> 02:26:47.950
we can ask them to raise
the 5% boundary threshold
02:26:47.950 --> 02:26:49.910
to seven and a half
because it sounds like,
02:26:49.910 --> 02:26:52.550
at least for six weather
zones in the last year,
02:26:52.550 --> 02:26:54.850
the low forecasts are seen from the TSPs
02:26:54.850 --> 02:26:57.110
are being constrained by the 5%.
02:26:57.110 --> 02:26:58.190
In other words, they're higher
02:26:58.190 --> 02:26:59.023
and they're being constrained.
02:26:59.023 --> 02:27:00.130
So as an interim step,
02:27:00.130 --> 02:27:03.367
we increase it from 5%
to seven and a half percent
02:27:03.367 --> 02:27:08.150
to take into account that growth that-
02:27:08.150 --> 02:27:09.200
So we know we're growing,
02:27:09.200 --> 02:27:11.140
so let's paint with a broad brush first
02:27:11.140 --> 02:27:14.940
and then in the meantime
we can put a finer point
02:27:14.940 --> 02:27:17.340
on particular areas.
02:27:17.340 --> 02:27:20.250
Have ERCOT
explore this concept.
02:27:20.250 --> 02:27:25.250
Work with Encore and the
TDUs to explore that concept
02:27:25.350 --> 02:27:28.080
of having the boundary threshold serve
02:27:28.080 --> 02:27:32.665
as a guiding post and
what additional information
02:27:32.665 --> 02:27:35.920
a utility or TSP can provide
02:27:35.920 --> 02:27:38.562
when they exceed the
seven and a half percent
02:27:38.562 --> 02:27:43.562
that's something beyond
just a signed agreement,
02:27:43.700 --> 02:27:45.820
that would still provide
the proof that you need,
02:27:45.820 --> 02:27:48.650
as ERCOT, and we want to see too
02:27:48.650 --> 02:27:50.710
because we don't want
to have projects justified
02:27:50.710 --> 02:27:51.800
if the growth isn't there.
02:27:51.800 --> 02:27:53.120
Absolutely.
Right.
02:27:53.120 --> 02:27:57.350
But proof that
would help solidify
02:27:59.830 --> 02:28:01.940
the utility's case for why it exceeded
02:28:01.940 --> 02:28:03.190
seven and a half percent.
02:28:04.110 --> 02:28:06.120
In addition, not just a signed contract
02:28:06.120 --> 02:28:09.010
but other forms of proof.
02:28:09.010 --> 02:28:11.960
Yes, Commissioner, we
believe that would be very helpful.
02:28:12.940 --> 02:28:16.370
So I think the five to
seven and a half percent
02:28:16.370 --> 02:28:18.767
is direction from
you, we take it to TAC,
02:28:18.767 --> 02:28:20.173
and we get board approval,
02:28:21.392 --> 02:28:24.060
and that becomes part of
our process at that point.
02:28:24.060 --> 02:28:26.450
So that could happen
fully over the year.
02:28:26.450 --> 02:28:29.753
October.
Potentially.
02:28:31.525 --> 02:28:33.310
Let's hold up for today.
02:28:33.310 --> 02:28:35.690
Let's propose to make the move from 5%
02:28:36.880 --> 02:28:39.050
to seven and a half percent
02:28:39.050 --> 02:28:42.030
and we'll direct that to be implemented.
02:28:42.030 --> 02:28:44.283
And then as the next step we can-
02:28:46.260 --> 02:28:48.783
The next step is a
planning guide revision,
02:28:48.783 --> 02:28:50.888
at the very least.
Yup.
02:28:50.888 --> 02:28:52.690
And there's gonna be
a lot of that going on,
02:28:52.690 --> 02:28:54.693
so we don't need to solve it all today.
02:28:56.100 --> 02:28:57.338
Can I just ask one question
02:28:57.338 --> 02:29:02.338
about the practical
effect of this is kind of
02:29:06.050 --> 02:29:09.740
over projecting,
potentially over projecting
02:29:09.740 --> 02:29:13.070
the load growth in a region, correct?
02:29:13.070 --> 02:29:15.280
So that could mean
more transmission
02:29:15.280 --> 02:29:16.830
as opposed to less transmission.
02:29:16.830 --> 02:29:19.070
Yeah.
Could be.
02:29:19.070 --> 02:29:19.903
Could be.
02:29:19.903 --> 02:29:21.090
It could also mean the second circuit
02:29:21.090 --> 02:29:25.418
of some lines get approved.
Oh, wow.
02:29:25.418 --> 02:29:26.251
Man, what a great thought.
02:29:26.251 --> 02:29:27.084
I'm trying to figure out
02:29:27.084 --> 02:29:28.509
if the checkbook is open right now
02:29:28.509 --> 02:29:30.410
because I'll just write a check.
02:29:30.410 --> 02:29:32.250
But the question really that I have
02:29:32.250 --> 02:29:37.250
is do, you need this,
02:29:38.020 --> 02:29:39.640
you need this change when?
02:29:39.640 --> 02:29:43.130
When are you using the five
versus seven and a half percent?
02:29:43.130 --> 02:29:44.343
Is it for,
02:29:48.740 --> 02:29:53.740
do you need it by December
for a next transmission plan?
02:29:53.860 --> 02:29:55.620
Do you need it by March?
02:29:55.620 --> 02:29:57.130
That's what I'm trying to figure out.
02:29:57.130 --> 02:29:59.750
Those load forecasts
will go into planning cases.
02:29:59.750 --> 02:30:01.933
We have a set of
planning cases every year
02:30:01.933 --> 02:30:04.200
that we use for evaluation.
02:30:04.200 --> 02:30:07.410
Those planning cases
either have a ERCOT forecast,
02:30:07.410 --> 02:30:09.040
they have a 5% bounded forecast
02:30:09.040 --> 02:30:10.630
or they might have a
seven and a half percent
02:30:10.630 --> 02:30:12.300
bounded forecast in those weather zones.
02:30:12.300 --> 02:30:14.784
And the more loads you
have in the planning cases,
02:30:14.784 --> 02:30:18.710
the more needs will show up
in the transmission perspective.
02:30:18.710 --> 02:30:21.620
And those base cases
are for reliability projects?
02:30:21.620 --> 02:30:23.720
Those are for
reliability projects, yes.
02:30:24.760 --> 02:30:26.583
And, sorry.
02:30:28.110 --> 02:30:30.360
And those forecasts are also used
02:30:30.360 --> 02:30:34.420
when ERCOT evaluates
large transmission projects
02:30:34.420 --> 02:30:37.220
or transmission projects
that are not radial
02:30:37.220 --> 02:30:39.080
that require a CCN.
02:30:39.080 --> 02:30:40.640
So I would suggest to you
02:30:40.640 --> 02:30:43.240
that they are your
first screen for whether
02:30:43.240 --> 02:30:44.810
a project is needed.
02:30:44.810 --> 02:30:49.110
But you all and your staff
provide the second screen.
02:30:49.110 --> 02:30:51.000
So this is not a blank check.
02:30:51.000 --> 02:30:55.180
I think the big picture
is it was abundantly clear
02:30:55.180 --> 02:30:57.670
earlier today that the planning process
02:30:57.670 --> 02:31:00.810
for transmission needs to be improved.
02:31:00.810 --> 02:31:04.700
In the meantime, this
change would help us
02:31:04.700 --> 02:31:08.700
defer towards the side of load growth
02:31:08.700 --> 02:31:10.753
rather than constrains.
02:31:10.753 --> 02:31:15.000
I understand that but I'm
still confused on one thing.
02:31:15.000 --> 02:31:17.180
You all, you have your load,
02:31:17.180 --> 02:31:21.950
you all have your
transmission planning models
02:31:21.950 --> 02:31:23.030
that you all use.
02:31:23.030 --> 02:31:26.530
And I'm assuming
that utilities and ERCOT
02:31:26.530 --> 02:31:28.880
have the same model and this is...
02:31:29.797 --> 02:31:31.670
Do I have something wrong?
02:31:31.670 --> 02:31:33.750
I guess what I'm trying to figure out is
02:31:35.600 --> 02:31:38.220
changing this from five to
seven and a half percent
02:31:38.220 --> 02:31:43.220
in September 23rd
versus January 1, 2022,
02:31:44.010 --> 02:31:46.333
what's the practical impact of that?
02:31:47.540 --> 02:31:52.540
Is it that every study of every project
02:31:52.934 --> 02:31:57.934
that gets studied between
now and the end of the year
02:31:58.650 --> 02:32:00.193
uses a lower threshold?
02:32:01.690 --> 02:32:04.601
Or, I'm just trying to understand
02:32:04.601 --> 02:32:09.250
when a utility proposes
a reliability project
02:32:09.250 --> 02:32:13.630
or ERCOT says, we believe
that this project needs to happen,
02:32:13.630 --> 02:32:15.382
what's the timeframe for that?
02:32:15.382 --> 02:32:18.230
Those planning cases
are built once a year.
02:32:18.230 --> 02:32:19.063
Once a year, okay.
02:32:19.063 --> 02:32:21.160
And the load, in
those planning cases,
02:32:21.160 --> 02:32:23.430
is distributed according
to that load forecast.
02:32:23.430 --> 02:32:25.883
It's agreed upon.
Okay.
02:32:28.209 --> 02:32:30.485
And when are the planning cases?
02:32:30.485 --> 02:32:32.160
They're built at the
first of the year so-
02:32:32.160 --> 02:32:33.027
That's what I wanted to know,
02:32:33.027 --> 02:32:34.860
that's what I wanted to know.
02:32:34.860 --> 02:32:39.080
And they're updated
three times yearly.
02:32:39.080 --> 02:32:40.120
Okay.
02:32:40.120 --> 02:32:45.120
And we have the luxury
of a smaller surface area
02:32:45.570 --> 02:32:50.570
than ERCOT and so we
are continuously updating
02:32:50.830 --> 02:32:53.000
our transmission plan and thinking
02:32:53.000 --> 02:32:55.530
about what forecasting should go into it
02:32:55.530 --> 02:32:58.050
for particular regions
and particular projects.
02:32:58.050 --> 02:33:01.960
ERCOT has the challenge of mapping
02:33:01.960 --> 02:33:03.630
and accounting for the entire grid
02:33:03.630 --> 02:33:07.556
and therefore their updates
are less frequent than ours.
02:33:07.556 --> 02:33:08.389
Okay.
02:33:11.710 --> 02:33:13.720
That answered my question.
02:33:13.720 --> 02:33:14.560
Where does that leave you
02:33:14.560 --> 02:33:16.710
in terms of is this
something that's productive
02:33:16.710 --> 02:33:17.653
to do now?
02:33:19.060 --> 02:33:21.020
I'm fine upgrading it now
02:33:21.020 --> 02:33:23.870
and then having another look later or,
02:33:23.870 --> 02:33:25.630
not making this a blank check,
02:33:25.630 --> 02:33:29.240
but I think we have
load growth in the state
02:33:29.240 --> 02:33:30.714
and I think it's pretty common
02:33:30.714 --> 02:33:34.760
that it's growing, pretty
common knowledge.
02:33:34.760 --> 02:33:37.705
But I just don't want
it to be a blank check.
02:33:37.705 --> 02:33:39.510
Yeah, agreed.
And more this was juts
02:33:39.510 --> 02:33:43.010
a trying to understand
when the planning model.
02:33:43.010 --> 02:33:47.214
Yeah, and it's
moving it from five,
02:33:47.214 --> 02:33:49.480
it's still a cap at seven
and a half percent.
02:33:49.480 --> 02:33:50.970
And then you can, per your comments,
02:33:50.970 --> 02:33:53.436
we can look at whether if we need
02:33:53.436 --> 02:33:54.520
to fine tune that in the future.
02:33:54.520 --> 02:33:55.927
Right and agreed
02:33:55.927 --> 02:33:57.470
and I wanna stress this as well.
02:33:57.470 --> 02:34:01.020
And I think this is down
in the planning models
02:34:01.020 --> 02:34:04.120
and like Liz said, it's the first screen
02:34:04.120 --> 02:34:06.120
to see whether or not a
project is even needed.
02:34:06.120 --> 02:34:08.630
So there's a lot of steps
that still need to occur.
02:34:08.630 --> 02:34:09.710
But I still want to,
02:34:09.710 --> 02:34:13.310
before it gets to us in terms
of a CCN approval, et cetera.
02:34:13.310 --> 02:34:14.650
But I do wanna stress again
02:34:14.650 --> 02:34:16.430
that obviously not a blank check
02:34:16.430 --> 02:34:20.470
and no determination on
whether projects are needed or not.
02:34:20.470 --> 02:34:23.900
This is just a percentage change
02:34:23.900 --> 02:34:26.830
to account for the
fast-growing population
02:34:26.830 --> 02:34:29.130
and economic growth
that we have in our state,
02:34:30.201 --> 02:34:33.050
in all areas of our state
in one form or fashion.
02:34:33.050 --> 02:34:35.010
So but that's it.
02:34:35.010 --> 02:34:36.210
I think I'm comfortable moving
02:34:36.210 --> 02:34:37.710
from five to seven and a half percent.
02:34:37.710 --> 02:34:42.710
And with respect to
your long-term process
02:34:43.360 --> 02:34:44.440
that you've proposed, Liz,
02:34:44.440 --> 02:34:47.100
I think that's either a
planning guide revision request
02:34:47.100 --> 02:34:49.330
that you can work with
with ERCOT on submitting.
02:34:49.330 --> 02:34:52.870
Or, we as a Commission,
could include something
02:34:52.870 --> 02:34:55.780
in our rule whenever we-
02:34:55.780 --> 02:34:58.580
Well, I'd welcome
a suggestion from
02:34:58.580 --> 02:35:01.430
and encourage you to
continue exploring this
02:35:01.430 --> 02:35:04.140
and come back with a suggestion.
02:35:04.140 --> 02:35:04.973
But I think for today,
02:35:04.973 --> 02:35:06.010
we've got a pretty good line of sight
02:35:06.010 --> 02:35:07.530
on what action we can take,
02:35:07.530 --> 02:35:10.636
if you've got a motion
you'd like to propose.
02:35:10.636 --> 02:35:12.060
Well, with that,
I would just say
02:35:12.060 --> 02:35:16.420
that we can direct ERCOT to
increase the boundary threshold
02:35:16.420 --> 02:35:18.210
from 5% to seven and a half percent
02:35:18.210 --> 02:35:19.930
in the remaining seven weather zones
02:35:19.930 --> 02:35:21.870
to help accelerate the
development of transmission
02:35:21.870 --> 02:35:23.590
for reliability in the state.
02:35:23.590 --> 02:35:24.423
Okay.
02:35:27.400 --> 02:35:28.233
All right.
02:35:28.233 --> 02:35:30.110
Thank you, Chairman,
Commissioners.
02:35:30.110 --> 02:35:31.070
Thank you.
02:35:31.070 --> 02:35:32.820
Mr. Chairman.
Yes, sir.
02:35:32.820 --> 02:35:34.843
Before we move
to the water issues,
02:35:35.740 --> 02:35:37.850
may I suggest that we
go to closed session?
02:35:37.850 --> 02:35:40.790
We're about to run out of
time with our Attorney General
02:35:40.790 --> 02:35:42.080
sitting here.
02:35:42.080 --> 02:35:45.260
All right, we will
recess after completing
02:35:45.260 --> 02:35:49.483
item number 20 and
move to closed session,
02:35:50.375 --> 02:35:55.375
pursuant to Chapter 551 of
the Texas Government Code,
02:35:57.280 --> 02:36:02.280
sections 551.071, 551.074, and 551.076.
02:36:04.350 --> 02:36:08.623
We will be back to pick up
our agenda on item number 21.
02:36:10.220 --> 02:36:11.480
Woody has one last set
on the economic criteria.
02:36:11.480 --> 02:36:12.908
I can be fast.
02:36:12.908 --> 02:36:13.810
I can be really fast.
02:36:13.810 --> 02:36:15.203
We gotta recess.
Sorry, Woody.
02:36:15.203 --> 02:36:16.623
When we come back.