-: Session was concluded at 12:12 PM on September 23rd,
and the Commission will now- -: 2:12.
-: 2:12?
-: Yeah. You said 12:12.
-: Sorry, one of those days, appreciate it.
12:12 on September 23rd, 2021.
The Commission will now resume it's public meeting.
Woody, I apologize about having recess
with one slide left in your presentation.
(meeting attendees laughing)
But I'd already, already dropped the hammer.
Woody: No problem.
Chairman: Carry, carry on, sir.
-: All right so the last slide here
talks about the consumer benefit test.
So Senate Bill 1281, amended per Section 37.056
to require consideration
of estimated congestion cost savings for consumers.
So that's a new requirement
for economic-driven transmission projects.
So we have tools in-house to be able to do that,
do some sort of consumer benefit test.
We have looked now at what we have,
it's gonna take a little bit of updating.
We have to update some of the data that we use
to drive that kinda thing.
And, so before we are able to implement that test,
we're gonna need a little bit of guidance from you guys.
So we've already started the update process in general,
and then we will wait and before we complete it
to get some policy guidance on exactly what it will entail.
-: So no decisions today?
Oh, good.
-: Thank you from the peanut gallery.
Yes we're, no decision needed today.
Thank you for the update,
any other questions or comments for?
-: Yeah, I would just say that the reason
Woody included this in the
slide deck is based on our prior discussion on what to do
with economics of the new consumer benefits test,
given the fact that,
ERCOT needs some more guidance, policy guidance from the
Commission before they finish off their models.
I think probably the most prudent course of action at this
point is to continue down the path of having staff,
has it on their roadmap for the beginning of the year,
this next year to implement 1281.
And so I think the probably the more cleaner pragmatic
approach would be to just go ahead and open up the rule
making process at the beginning of the year or first
quarter you know winter and around then,
and these discussions will happen and we can set a more
definitive timeline then,
and then that way we give ERCOT the policy guidance
they need to implement their models and additional feedback
we may need to be able to come to a
policy decision at that time.
-: And in the meantime,
there are things that we can do to get ready for that.
So their data,
we need to have updated and certain fields
we need filled out
that will be true for any kind of consumer benefit to us.
So we'll go ahead and we've already,
actually started that process, so.
-: Like since then,
we also have plenty to do between
now and the end of the year.
So, kicking that off in the beginning,
like early first quarter makes a lot of sense.
-: All right.
Thank you Woody.
-: Thank you sir.
-: Thanks Woody.
-: Apologies again.
And Kristi has a grid update for us.
-: All right. Good afternoon,
Kristi Hobbs vice-president of Corporate Strategy
and PUC Relations for ERCOT.
So very fitting that as we move into the first days of fall,
that we're giving you our last summer recap.
Looking back to last week,
hurricane Nicholas really did impact the demand on the grid.
As you can imagine,
when it came ashore last Monday, continued lingering in
the Houston area,
there were some transmission outages and many distribution
outages that were experienced due to the storm.
And of course,
demand was lower due to the rain in those coastal areas.
Daily demands ranged anywhere last week from
55,000 to a high of 67,000 at the end of the week.
Renewable performance,
we saw wind at 8,500 megawatts
for the peak demand time on Monday.
But then that remained below 5,000 for the rest of the week.
Solar was around 6,000 megawatts at peak demand
pretty much the entire week, except for Saturday,
when it was a little bit lower.
From a thermal generation outage perspective,
the range that we saw throughout the week was in the
7 to 9,000, megawatt range.
I think maybe some units taking advantage of the lower
demand to get work done.
Chairman: Good getting ready for winter.
-: You know,
would be a miss if we didn't recognize that we did have
transmission issues because of the wind of the storm and,
you know would give kudos to the,
the TDSPs that reacted quickly,
that the updates that I got out of the control room earlier
this week was that from our perspective,
all the transmission lines had been repaired
and back in service.
So far this week,
Monday was definitely our highest date as we were still
experiencing summer weather type conditions.
We saw the peak demand on Monday at 71,930.
With the front moving through the area,
that dropped to mid 60s on Tuesday.
And yesterday, our peak demand was only 48,000.
So, definitely had an impact on the usage on the system.
So far this week, wind Monday was 8,800,
Tuesday was up to almost 18,000 of wind on the system,
but that then dropped back down yesterday
to just over 5,600.
Solar started off the week,
pretty normal at the 5,400 megawatt range,
but then dropped to 2,600 on Tuesday.
I guess likely with the front moving through and the impact.
Wednesday was back up though to 6,800.
And again,
we've seen thermal outages beginning of this week,
anywhere from the 7 to 11,000 megawatt range.
-: So on solar,
is our maximum production that we've observed
after the latest fields have been energized.
Is it around, I mean, is it right at 7,000?
-: Yes.
Commissioner: that we have seen produce?
-: Yes.
Commissioner: Okay Good to know
-: How about installed capacity available for...
-: Is that installed capacity?
or Is that actually production?
-: I mean that's available.
-: Actually, installed capacity right now is
just over 8,500.
-: Yeah so, it's
-: Total available
-: Right. Yep.
-: 7,000. Good deal.
-: Looking ahead the next week or the next seven days,
as expected these cooler temperatures
are going to be impacting the demand.
We do expect sufficient generation, you know,
barring any unforeseen outages or changes to the forecast,
that we should be able to reliably serve the grid.
We're looking at demand today at just under 53,000 megawatts
and continuing really for the next seven days,
in that mid 50,000 megawatt range
of the renewable performance.
Our forecasters showing for wind anywhere in the
4 to now 9,000 megawatt range in the next seven days.
And solar in 4 1/2 to just under 7,000,
for performance expected.
As I close out,
again this is the last periodic summer update.
We will be back at your October 7th open meeting to give you
a little bit more of a formal look back,
not only on the grid conditions,
but on the market performance of the summer.
And then Woody would also be here to share information
with you all as as you mentioned chairman,
as we move into the shoulder months,
it's an important time for generation units to be able to
take the outages they need to prepare for winter.
And so he'll give you an update kind of what we're seeing
from a seasonal perspective on outages.
-: Good deal.
Thank you very much Kristi.
Hobbs: All right.
-: Appreciate you all hanging with us.
Hobbs: Thank you.
-: All right.
That will conclude item 20 and get us to item 21.
I don't have anything on 21, do y'all?
-: No.
-: If not that'll bring us to Item number 22.
Mr Journeay could you lay this out for us please?
-: Item 22, is Docket 49351,
It's a ratepayers appeal of the
Bear Creek Special Utility District to change of rates.
The Commission adopted
in part and modified in part a PFD
at a previous open meeting.
Before you is a draft order memorializing that decision.
-: So.
-: Just heads up,
I'm going to abstain from taking a vote on this.
As you all had made this decision prior,
I'm going to let you all continue down this road.
-: That, I can say that now for this docket as well
as docket 50605.
-: Thank you Jimmy.
-: Okay.
-: This seems pretty straight forward.
Good job memorializing what we did previously.
-: Is there motion to issue the order.
-: So moved.
-: Second.
-: All in favor say aye.
-: Aye.
-: Motion passes.
Next item is number 23, Mr. Journeay.
-: Item 23 is the application of Corix Utilities
to change rate.
Proposed order was filed on September 3rd,
no exceptions or corrections were found.
I have a memo with proposed changes to the proposed order.
I also issued a memo to request of an office,
asking the parties to be here to address issues.
-: Sir, go ahead.
-: Thank you, Stephen.
And if representatives from Corix could approach,
I just had some questions.
I appreciate you making yourselves available just to dig
into a couple components of the application.
-: As they get settled.
I just wanted to mention that I am recusing myself
on this case,
as I did participate in the cast when I was at OPUC.
-: Okay.
-: Um. Sorry Mr. Chairman.
-: Can you state your names and who you are
for the record please.
-: Thank you. My name's Evan.
(coughing)
Excuse me. My name's Evan Johnson.
I'm here on behalf of Corix Utilities Texas.
With me is Darrin Barker,
he's the president of Corix Utilities Texas.
We also have our witness in this case,
Dr Bruce Fairchild in the room,
to the extent the questions you have, exceed our expertise.
-: Thank you so much,
Mr. Johnson and Mr. Barker,
and thank you for being present.
My questions relate to the computation of ADFIT,
the Federal Income Tax computation.
And, so, staff and I,
as we were reading through the application,
were just trying to make the numbers work out in our own
mind and how that would be processed over time.
And, as per your filing, it all is baked into Exhibit F.
And if you could,
could you walk me through how those numbers work out and,
where we're headed is the way we read it is that this
would be accounted for over an 18 year period.
Is that, is this, is that right?
-: Approximately 18 years.
-: 18 And a half? Okay
Okay. So.
Why the 18 years because that's a long time.
Five years has been what's used in other cases.
Can you explain that sir?
-: I think I can.
And if my answer is not deep enough in the weeds,
then Dr. Fairchild can come in
Commissioner: Sure.
-: and help explain it as well.
But what's at issue here is, you know,
we've agreed on an excess deferred federal income tax
balance that we are going to return to customers.
Within that balance,
there's essentially two buckets of deferred tax assets
that we are returning back over time.
One of those buckets are related to accelerated
depreciation.
The company has taken in the past on certain ones of its
physical assets.
Commissioner: Okay.
-: That's the one that is really driving a lot of the timing
of this.
The second bucket is essentially all the other deferred
taxes that are going to be returned to customers.
In the first bucket,
under the federal tax code and a number of different IRS
private letter rulings,
the IRS essentially directs us to normalize our refund of
these taxes,
these ones related to accelerated appreciation,
rateably over the service life of the physical assets
that the accelerated depreciation was taken on.
So what we did is we utilized the,
the remaining life for those assets as calculated by our
expert depreciation witness Dane Watson.
We utilized the reversed South Georgia method,
which requires us to use the average remaining life of our
entire plant.
You can find that on pages 11 and 12 of his
rebuttal testimony,
and you can also go through his depreciation schedules and
it lays it out there.
If we don't return to customers over that period of time,
that's matched to the life of the assets,
the IRS considers that a normalization violation.
And if we trigger a normalization violation,
it's possible the IRS could come in and say,
you're no longer eligible to take
accelerated depreciation going forward,
which obviously would be a huge
detriment to our customers and ourselves.
The other bucket here, the second bucket,
we adopted staff's proposal of five years.
You have the discretion to require us to return that over
any period of time you like,
but we adopted staff's approach, which is consistent with,
with what this Commission approved in the center point rate
case, a five-year period.
-: Okay. Yeah, yeah. That's right.
-: Okay, and you have approved settlements adopting this same
approach in CenterPoint's most recent rate case
and AEPs I think.
-: So which aligns with the IRS rule that,
that you're trying to conform to,
which is over the life of the asset.
-: Right, so if you think about it, you know,
what you're trying to do is
return the tax benefits to each generation of customers
who's taking advantage or using the assets,
paying for the assets.
So not just customers today
get the tax benefit, customers over the entire life of the
asset get it.
-: Okay. And then second question as it relates to this,
so why is this being done via
the revenue requirement rather than the,
just a direct refund to customers as per the file.
-: You know, I'm sorry to say,
I can't recall exactly why we structured it this way.
Commissioner: Okay.
I think it was just easier to capture it that way,
but what the idea here is
we've reduced our revenue requirement
by that amortization amount,
and we will keep tracking it on our books.
So to the extent we have subsequent rate cases,
it will stay on our books for that full 18 years until we
have captured it through rates.
-: Okay.
I mean is there a problem,
if you did direct refunds to customers,
just for our tracking.
We're trying to make apples to apples here,
as we sort of go through these cases.
-: I have, from an operation side,
and maybe you can respond to that.
I think it's more of cumbersome,
but if you want to speak to what the process would be.
-: This is Darrin Parker.
Commissioner: Yes sir.
-: Is the question direct refunds over the
remaining life of the asset?
Councilman: Yes sir.
-: So that would involve basically a separate
line item on the bill tracking that separately I guess.
Commissioner: Okay.
-: Administratively it's harder to do with
the billing system, to add more line items on a bill.
And sometimes I worry that we get so many line items that
the bill gets a little bit confusing for our customers.
Commissioner: Okay.
-: It's doable.
I'll say that it's doable.
I just have to look at the amounts and talk with our
billing department and see what it takes to code that in.
Commissioner: Okay.
-: And, you know we have a lot of different service areas,
rate regions, customer classes, so I think the reason
it's cumbersome is 'cause it has to
be calculated for everyone.
-: Yeah and since you're doing this consolidated filing.
Okay.
-: Right.
-: Those were my questions. Thank you sir.
-: Those were eerily similar to mine.
And if it's an IRS requirement then that,
-: Yeah.
-: seems pretty straightforward.
-: I just want to make sure it's consistent,
which it sounds like it is.
-: Otherwise the settlement seems.
-: Sounds like it's the federal government
here to help right?
-: Yeah.
-: As usual.
-: Can't do it in five, but 18 will work.
-: In terms of in this consolidated, you know,
mechanism, is what I'm, we're all trying to get
our minds wrapped around.
So I just want to make sure if we proceed down certain roads
that we try to stick with it,
and yeah, I mean, I'm okay.
So with that, I'll wake up again, and uh,
-: Is it... go ahead.
-: Let me get to the right one.
-: So I would move to approve.
-: Approve the proposed order, as amended.
-: Second.
-: Yes approved.
-: Motion and a second, all in favor say aye,
-: Aye.
-: Motion passes.
Thank you gentlemen, -: Thank you
-: for being here.
-: Brings us to item 24, Mr. Journeay.
-: 24 is docket 50605.
It's the petition for an order appointing the temporary
manager to Blue Cereus.
The Commission previously entered an order
that allowed Lynn Sherman,
the temporary manager to end his management.
Before you is a motion for rehearing.
-: Thank you, sir.
Short version is,
not a ratemaking preceding and we do have another
pending ratemaking preceding coming up
related to this case
where I think this should probably be handled,
could be handled more smoothly.
-: I agree that, yep.
I would deny the motion for regroup.
-: Agreed.
-: Alright, is there a motion to deny the motion?
-: So moved.
-: Second,
-: All in favor, say aye.
-: Aye.
-: Aye. Motion passes.
25 was consented, that brings us to item number 26.
Mr. Journeay.
-: Item 26 is docket 52125.
It's the complainant of Mary Haywood against
New Progress Water Supply Corporation.
A proposal for decision was issued on July 22nd,
that would deny the complaint.
I have a memo with proposed changes to the PFD.
-: Thank you, sir.
Seems straight forward, if you want to follow through
the complaint, you gotta show up and you gotta be called
to show that you qualified.
-: To serve.
-: Any other thoughts on that?
Or is there a motion to adopt the proposal as modified,
proposal for decision as modified by Commission council.
-: So moved.
-: Second.
-: all in favor say aye.
-: Aye.
-: Motion passes. We're not taking up 27 today.
I don't have anything for item 28 through 33.
Y'all?
-: No sir.
-: Nope.
-: All right.
Do we have exec on 34?
We have staff here to discuss water critical load
requirements.
-: Yes. So thank you chairman, Commissioners,
just a couple of updates, quickly.
We talked last time about the work of our mapping committee
and I committed to you all that we would find a way to make
the work of that committee public.
So what we've done is we've opened project 52404,
and that is the project that we will warehouse all of the
project team updates and all of the meeting minutes from our
monthly meetings that we're having.
So that's where the public and interested stakeholders can
find the activities of that committee.
-: Thank you. Transparency's always important.
-: Yes, sir.
Secondly, we've started our communications with
our sunset review team.
Very preliminary discussions at this point,
but we have been told they will be on site in April of 2022
to begin our intro conference.
So just want to give y'all an update that that's
when that work will really start.
-: Good deal.
-: And then two updates from
Senate bill three implementation.
The first is we were working with ERCOT on conducting a load
shed exercise.
So the bill requires that they conduct a summer and winter
load shed exercise and now that we've entered the fall,
it's time that we really start get going on that.
So I've talked to Kristi and we're going to get working on
that in the next week to get something solidified so we can
make sure that we get that done and
meet that requirement in Senate bill three.
And the second is we, you know,
most of the discussion around Senate bill three has been
around electricity.
There's also components about water.
One of them has a deadline, we have a deadline of
November 1st for water utilities that
want to be deemed, designated as critical loads.
They have to submit certain information to the Commission,
to their electric utility and their retail electric provider
by November 1st.
So I just wanted to put everyone at notice that
that's in there, remind everybody,
and to ask the utilities and the reps that
if those water utilities have any questions to,
you know work with them and help hammer that out.
-: Good note and want to make sure we alert,
the water utilities hear us loud and clear.
Thomas: Yes sir.
-: that please get on top of that before the deadline
Thomas: Yes sir.
-: All right, any questions or comments for Thomas?
-: No sir.
-: All right, appreciate it.
That brings us to item 35.
I don't have anything for 35 or 36, do y'all?
-: No.
-: No sir.
-: No.
-: All right, having already taken care of all our business
in closed session we have no further public business.
So this meeting of the Public Utilities Commission of Texas
is hereby adjourn.
(gavel hitting wood)