WEBVTT 00:00:07.769 --> 00:00:09.936 (banging) 00:00:11.660 --> 00:00:13.520 Good afternoon. 00:00:13.520 --> 00:00:16.670 And welcome back to the second half of this meeting 00:00:16.670 --> 00:00:18.943 of the Public Utility Commission of Texas. 00:00:21.600 --> 00:00:23.810 This is the part of our programming where 00:00:23.810 --> 00:00:26.510 we as a Commission discuss 00:00:26.510 --> 00:00:29.123 our market redesign efforts. 00:00:33.540 --> 00:00:36.070 Apologies for the late posting of the memo last night, 00:00:36.070 --> 00:00:38.113 but it was a full, full day. 00:00:39.131 --> 00:00:41.163 Hell, it's been a full six months. 00:00:45.730 --> 00:00:48.380 As I highlighted in that, 00:00:48.380 --> 00:00:52.220 this Commission has taken 00:00:52.220 --> 00:00:55.613 an extraordinary amount of action to date, 00:00:57.207 --> 00:01:02.207 to make significant reforms that are enhancing resiliency 00:01:04.870 --> 00:01:08.030 for the people who live in ERCOT and for the State of Texas. 00:01:08.030 --> 00:01:13.030 I would challenge anyone to find another grid, RTO, ISO, 00:01:13.730 --> 00:01:16.520 in the world that has 00:01:16.520 --> 00:01:19.140 implemented as much meaningful reform 00:01:19.140 --> 00:01:20.970 as quickly as this Commission has 00:01:20.970 --> 00:01:22.570 in the last six to eight months. 00:01:23.900 --> 00:01:25.320 And we're not finished. 00:01:25.320 --> 00:01:26.830 We still have work to do. 00:01:26.830 --> 00:01:31.830 But I don't want to let that go unnoticed and unrecognized. 00:01:32.080 --> 00:01:33.020 This is... 00:01:34.960 --> 00:01:37.770 Well, we started April, May. 00:01:37.770 --> 00:01:40.550 April 16 for me and a week later for you. 00:01:40.550 --> 00:01:44.023 And that, yeah, it has been breakneck since then. 00:01:44.950 --> 00:01:47.650 Both in legislative implementation 00:01:47.650 --> 00:01:49.280 and operational improvements 00:01:50.270 --> 00:01:54.720 and in the changes we've made to ERS and 00:01:55.840 --> 00:01:57.933 we're quickly gonna be making with ORDC, 00:01:58.906 --> 00:02:00.510 and the high cap that we did today 00:02:00.510 --> 00:02:02.853 to reduce financial liability to customers. 00:02:05.458 --> 00:02:06.291 Those, like I said, 00:02:06.291 --> 00:02:08.440 I think it would be hard to find any other 00:02:08.440 --> 00:02:10.580 grid in the world that's moved as quickly, 00:02:10.580 --> 00:02:14.390 as decisively and as with much impact as we have 00:02:14.390 --> 00:02:15.990 in the last six to eight months. 00:02:18.671 --> 00:02:21.180 Lori and Jimmy got to join the party a little later, 00:02:21.180 --> 00:02:23.410 but that this, there have been 00:02:23.410 --> 00:02:25.469 tremendous accomplishments so far. 00:02:25.469 --> 00:02:27.460 And I want to thank you all, thank our staff, 00:02:27.460 --> 00:02:30.110 thank the team at ERCOT for helping make that happen. 00:02:32.370 --> 00:02:34.630 The second thing I want to highlight is something Jimmy, 00:02:34.630 --> 00:02:35.967 I know you care a lot about, 00:02:35.967 --> 00:02:38.040 and I made sure to mention that in the memo, 00:02:38.040 --> 00:02:40.940 is that this discussion is about operation 00:02:40.940 --> 00:02:43.890 or market redesign changes. 00:02:43.890 --> 00:02:47.060 There are still significant operational improvements 00:02:47.060 --> 00:02:49.143 that can be made at ERCOT. 00:02:50.310 --> 00:02:52.910 Transmission planning is something of importance to you. 00:02:52.910 --> 00:02:55.750 I know Lori's efforts in the Rio Grande Valley 00:02:55.750 --> 00:02:57.260 have made big progress. 00:02:57.260 --> 00:02:59.800 That's another tremendous accomplishment. 00:02:59.800 --> 00:03:02.310 The list is too long to go through. 00:03:02.310 --> 00:03:07.330 Highlight the need that we have to improve that. 00:03:07.330 --> 00:03:10.150 And there are a variety of other operational improvements. 00:03:10.150 --> 00:03:12.060 But I want the public to know that 00:03:13.330 --> 00:03:15.430 we're addressing the market design element 00:03:16.340 --> 00:03:19.890 in addition to the operational improvements that can be made 00:03:19.890 --> 00:03:22.963 and we will continue to do so as we move into the new year. 00:03:24.810 --> 00:03:26.040 We have 00:03:28.150 --> 00:03:30.820 been through an extraordinary process, 00:03:30.820 --> 00:03:33.730 an incredible amount of stakeholder feedback, 00:03:33.730 --> 00:03:36.450 a tremendous amount of time 00:03:36.450 --> 00:03:38.540 from everybody on this Commission, 00:03:38.540 --> 00:03:41.093 considering market redesign efforts. 00:03:42.770 --> 00:03:45.380 I've spent hours hearing, 00:03:45.380 --> 00:03:47.450 we've all spent countless hours hearing for stakeholders, 00:03:47.450 --> 00:03:49.323 reading stakeholder input. 00:03:50.250 --> 00:03:53.100 I've listened, we've all listened to 00:03:53.100 --> 00:03:55.583 input and thoughts from each other for hours. 00:03:56.450 --> 00:03:57.543 Many, many hours. 00:03:58.510 --> 00:04:01.570 And at the end of the day, 00:04:01.570 --> 00:04:03.490 as the chairman and leader of this Commission, 00:04:03.490 --> 00:04:06.850 my job is to gather, 00:04:06.850 --> 00:04:09.100 evaluate all that information, all that feedback, 00:04:09.100 --> 00:04:12.763 discard the ideas that we don't think are viable, 00:04:14.027 --> 00:04:17.370 capture the productive ideas, 00:04:17.370 --> 00:04:19.250 synthesize those, aggregate those, 00:04:19.250 --> 00:04:22.090 and help drive this Commission to 00:04:23.280 --> 00:04:26.603 a productive and meaningful reform. 00:04:27.840 --> 00:04:29.739 As you all know more than anybody, 00:04:29.739 --> 00:04:31.493 that's not an easy task. 00:04:34.940 --> 00:04:38.590 We've had a lot of ideas that were discarded. 00:04:38.590 --> 00:04:40.650 Some pretty easily. 00:04:40.650 --> 00:04:42.410 Some took a little more deliberation. 00:04:42.410 --> 00:04:44.430 But it's important that the public know 00:04:44.430 --> 00:04:47.310 that we've been through a lot of ideas 00:04:47.310 --> 00:04:50.863 that weren't worthy of this market and this reform. 00:04:52.300 --> 00:04:55.960 Today, we need to talk about 00:04:56.840 --> 00:04:59.350 the ideas and concept that these four Commissioners 00:04:59.350 --> 00:05:02.470 think are viable in addressing 00:05:02.470 --> 00:05:03.770 both the extreme weather event 00:05:03.770 --> 00:05:06.300 and the blue sky problem that we have. 00:05:06.300 --> 00:05:07.320 In addition to, of course, 00:05:07.320 --> 00:05:08.420 the infrastructure reform 00:05:08.420 --> 00:05:10.320 and weatherization reform we've taken. 00:05:13.090 --> 00:05:15.570 And we need to continue moving towards 00:05:17.943 --> 00:05:21.327 a point where we can put a flag in the ground and 00:05:22.760 --> 00:05:25.200 establish a blueprint that shows a path forward 00:05:26.220 --> 00:05:28.930 to build on the substantial progress we've made 00:05:28.930 --> 00:05:33.093 and continue to implement meaningful reform in ERCOT. 00:05:34.210 --> 00:05:35.043 At the highest level, 00:05:35.043 --> 00:05:36.700 we know we need more dispatchable power. 00:05:36.700 --> 00:05:39.620 We have, I think, almost 120,000 megawatts 00:05:39.620 --> 00:05:42.470 of installed capacity when we only need 75 or 80,000. 00:05:42.470 --> 00:05:44.390 The problem is, it's not dispatchable. 00:05:44.390 --> 00:05:49.390 A big portion that can vanish relatively quickly. 00:05:50.650 --> 00:05:52.373 We know that Commissioner McAdams has made 00:05:52.373 --> 00:05:56.380 a very good point multiple times about 00:05:56.380 --> 00:05:58.270 the avalanche of the intermittency 00:05:58.270 --> 00:05:59.670 that creates that challenge. 00:06:01.120 --> 00:06:04.580 We know we need more dispatchable. 00:06:04.580 --> 00:06:06.040 How much do we need and how do we get it 00:06:06.040 --> 00:06:07.090 at the highest level? 00:06:08.200 --> 00:06:11.260 I think we need to comprehensively address the problem. 00:06:11.260 --> 00:06:15.210 We need to buy substantially or incentivize substantially 00:06:15.210 --> 00:06:16.840 all of the dispatchable power we need. 00:06:16.840 --> 00:06:18.500 We don't necessarily have to treat 00:06:20.200 --> 00:06:21.810 all of that. 00:06:21.810 --> 00:06:22.780 Those can be distinguished 00:06:22.780 --> 00:06:25.450 with different performance standards. 00:06:25.450 --> 00:06:27.820 But we need to address the whole problem, 00:06:27.820 --> 00:06:29.370 not parts of the problem. 00:06:29.370 --> 00:06:31.150 Where do we get that dispatchable power? 00:06:31.150 --> 00:06:33.510 Do we get it through the load side? 00:06:33.510 --> 00:06:35.180 Do we get it through the gen side? 00:06:35.180 --> 00:06:39.663 Do we get it through the centrally procured at ERCOT? 00:06:40.745 --> 00:06:43.540 There've been many, many proposals across the spectrum. 00:06:43.540 --> 00:06:46.810 We can certainly, and I've certainly considered 00:06:46.810 --> 00:06:49.210 generation side affirming standards. 00:06:49.210 --> 00:06:53.370 We can require affirming performance 00:06:53.370 --> 00:06:55.657 or dispatchability metric on all generations, 00:06:55.657 --> 00:06:59.440 60, 70% over a weekly or monthly basis, 00:06:59.440 --> 00:07:02.620 which require our entire fleet to firm up 00:07:02.620 --> 00:07:05.743 and increase their level of reliability. 00:07:07.890 --> 00:07:11.350 We could even go so far as to curtail, 00:07:11.350 --> 00:07:14.270 as other industries have done in the past in Texas, 00:07:14.270 --> 00:07:15.523 to ensure that, 00:07:16.910 --> 00:07:20.590 both for stability and for reliability, 00:07:20.590 --> 00:07:22.373 we have enough dispatchable 00:07:23.260 --> 00:07:24.360 available at all times. 00:07:24.360 --> 00:07:26.630 Those are heavy handed, regulatory moves 00:07:26.630 --> 00:07:29.920 that do not capture and leverage market forces. 00:07:29.920 --> 00:07:31.140 So I don't think those are the best options, 00:07:31.140 --> 00:07:33.810 not to mention they're tremendously expensive. 00:07:33.810 --> 00:07:36.623 But those are options on the table. 00:07:38.360 --> 00:07:41.730 We've heard a lot about centrally procured products. 00:07:41.730 --> 00:07:44.090 As Commissioner Glotfelty so eloquently says, 00:07:44.090 --> 00:07:45.053 cash for clunkers. 00:07:46.473 --> 00:07:50.040 And I think we've all heard about how that's, 00:07:50.040 --> 00:07:52.510 we've all expressed concern with those models. 00:07:52.510 --> 00:07:54.360 And of course, we've heard about the load side, 00:07:54.360 --> 00:07:55.820 some version of a load side 00:07:57.040 --> 00:08:00.273 procurement of a requirement for that dispatchable power. 00:08:01.990 --> 00:08:03.510 As you saw in 00:08:05.030 --> 00:08:08.330 my memos and my straw man, I think the, 00:08:08.330 --> 00:08:13.330 some version of a load side reliability mechanism 00:08:13.890 --> 00:08:18.890 is the most effective and productive product for ERCOT. 00:08:18.890 --> 00:08:20.780 It leverages market forces. 00:08:20.780 --> 00:08:24.373 It utilizes resources that, 00:08:25.370 --> 00:08:28.343 or pays resources that are being used in general, 00:08:29.330 --> 00:08:31.020 rather than holding them back, 00:08:31.020 --> 00:08:34.460 and it leaves a lot of the decision-making 00:08:34.460 --> 00:08:37.620 about portfolio construction to market participants, 00:08:37.620 --> 00:08:38.743 not the regulators. 00:08:39.830 --> 00:08:43.060 There are lots of different versions of LSE obligations 00:08:43.060 --> 00:08:45.760 and I don't claim to know which one 00:08:45.760 --> 00:08:47.983 is exactly the perfect model right now. 00:08:49.760 --> 00:08:52.843 I do know that of all of our proposals, 00:08:52.843 --> 00:08:56.630 none of them are ready-made and perfectly packaged, 00:08:56.630 --> 00:08:58.730 ready to go right now. 00:08:58.730 --> 00:09:03.610 And it's not my proposal or your proposal or your proposal. 00:09:03.610 --> 00:09:06.150 We need to take the best elements of all of these 00:09:06.150 --> 00:09:09.500 and move forward to the next version 00:09:09.500 --> 00:09:11.180 and iterate moving forward. 00:09:11.180 --> 00:09:12.160 It's not either or. 00:09:12.160 --> 00:09:13.830 It's, how do we put all the puzzle pieces, 00:09:13.830 --> 00:09:15.480 the right puzzle pieces together? 00:09:16.940 --> 00:09:20.780 And in that spirit, I took the approach of looking at 00:09:20.780 --> 00:09:24.850 all of the proposals or the most recent proposals. 00:09:24.850 --> 00:09:27.580 And as you saw, I mean, we've got the 00:09:29.520 --> 00:09:32.953 phase one elements of ORDC, 00:09:33.890 --> 00:09:36.190 ERS we've already taken substantial action on, 00:09:37.040 --> 00:09:40.320 a firm fuel product, I think, is something that we all agree 00:09:40.320 --> 00:09:42.153 needs to be developed. 00:09:44.458 --> 00:09:48.770 But the bigger questions come in phase two. 00:09:48.770 --> 00:09:52.453 In my most recent straw man or draft of a straw man, 00:09:54.610 --> 00:09:59.610 I paired a concept similar to Lori, which you proposed. 00:09:59.710 --> 00:10:02.260 I know you didn't, you wanted to update the name. 00:10:02.260 --> 00:10:03.460 So did the best I could. 00:10:05.260 --> 00:10:07.830 Similar to Brattle's option number two, 00:10:07.830 --> 00:10:11.470 with some version of an LSE obligation 00:10:11.470 --> 00:10:13.390 based on a set of principles. 00:10:13.390 --> 00:10:15.510 None of these principles are, 00:10:15.510 --> 00:10:18.130 those lists are not exhaustive by any means. 00:10:18.130 --> 00:10:23.130 And I hope today we can expand those principles. 00:10:23.170 --> 00:10:25.433 Edit them if elements need to be removed. 00:10:28.880 --> 00:10:31.030 But I want to make sure 00:10:31.030 --> 00:10:33.180 or get to a point where we can identify 00:10:33.180 --> 00:10:35.660 the principles and the mechanisms that 00:10:36.560 --> 00:10:40.720 we as a Commission think need to be 00:10:40.720 --> 00:10:43.700 the foundation of the mechanism, 00:10:43.700 --> 00:10:46.050 the reliability mechanism we move forward with. 00:10:47.190 --> 00:10:49.700 As you know, I've got great reservations about 00:10:49.700 --> 00:10:51.203 a backstop mechanism. 00:10:52.310 --> 00:10:55.963 But there's some elements of it that I'm concerned about. 00:10:57.690 --> 00:10:59.953 Largely that it's a, 00:11:02.190 --> 00:11:05.490 it's withholding resources from the market. 00:11:05.490 --> 00:11:08.140 We're paying people to not participate in the market. 00:11:12.160 --> 00:11:16.003 It's not the most economically efficient version. 00:11:17.110 --> 00:11:18.790 And we'd have to also sit there 00:11:18.790 --> 00:11:21.650 with a lot of generation on the sideline while 00:11:23.480 --> 00:11:27.810 customers pay 4,000, five, $4,500 a megawatt 00:11:27.810 --> 00:11:30.110 and not utilize those resources until 00:11:31.180 --> 00:11:33.200 the high cap is reached. 00:11:33.200 --> 00:11:34.530 But that is also a feature of it. 00:11:34.530 --> 00:11:36.860 So that backstop doesn't interfere 00:11:36.860 --> 00:11:38.940 with normal market dynamics. 00:11:38.940 --> 00:11:42.450 And that's a tough trade-off. 00:11:42.450 --> 00:11:44.100 But at the end of the day I think 00:11:45.170 --> 00:11:49.510 that is a product we need to ensure reliability 00:11:49.510 --> 00:11:52.943 as a bridge to an eventual LSE obligation. 00:11:57.413 --> 00:12:01.390 I like the features of the backstop, 00:12:01.390 --> 00:12:03.820 and the fact that it can be hopefully 00:12:03.820 --> 00:12:05.473 implemented relatively quickly. 00:12:06.560 --> 00:12:10.040 And so I think that's a key part of us moving forward 00:12:10.040 --> 00:12:12.370 is some sort of backstop mechanism. 00:12:12.370 --> 00:12:15.520 I appreciate all the work you've put into that. 00:12:15.520 --> 00:12:19.963 The second part of that, of course, is the LSE obligation. 00:12:24.320 --> 00:12:27.610 We've discussed my original version of that 00:12:27.610 --> 00:12:30.510 and I'll be the first to say that is not the right answer. 00:12:31.641 --> 00:12:33.550 I think the sizing of it's too big, 00:12:33.550 --> 00:12:35.300 in addition to some other concerns. 00:12:35.300 --> 00:12:39.210 I think some version of an LSE obligation is the way to go. 00:12:39.210 --> 00:12:41.010 Not that version. 00:12:41.010 --> 00:12:42.033 And not, 00:12:43.080 --> 00:12:44.500 but I think there, like any of these, 00:12:44.500 --> 00:12:46.260 there are some features that 00:12:47.740 --> 00:12:50.590 could be beneficial in some version of an LSE obligation. 00:12:52.840 --> 00:12:55.920 We heard a lot about the deck program last time. 00:12:55.920 --> 00:13:00.000 I think the deck program as currently constructed 00:13:01.850 --> 00:13:04.800 has all of the problems that we heard last time, 00:13:04.800 --> 00:13:07.790 and it's not something as a standalone product 00:13:07.790 --> 00:13:09.580 that would solve a problem. 00:13:09.580 --> 00:13:11.640 We don't need to solve our problem. 00:13:11.640 --> 00:13:13.970 We heard plenty about that last time. 00:13:13.970 --> 00:13:15.880 But I think the deck program has 00:13:15.880 --> 00:13:18.870 some very important features that can be leveraged 00:13:19.890 --> 00:13:23.270 and incorporated in some version of an LSE obligation. 00:13:23.270 --> 00:13:27.116 Most importantly, you're paying for what you use. 00:13:27.116 --> 00:13:30.020 It's a very important part of that proposal. 00:13:30.020 --> 00:13:32.150 It has a forward price signal, 00:13:32.150 --> 00:13:33.500 which as you saw in my last, 00:13:33.500 --> 00:13:36.100 in my original straw man, I think is very important. 00:13:36.984 --> 00:13:40.250 It has performance standards and penalties and testing, 00:13:40.250 --> 00:13:42.333 which I think is a key feature. 00:13:43.290 --> 00:13:44.830 It's built on a familiar framework 00:13:44.830 --> 00:13:47.113 that can be implemented quickly, which is a, 00:13:49.380 --> 00:13:51.610 not only a feature, but a highlight. 00:13:51.610 --> 00:13:54.920 That's a very important element. 00:13:54.920 --> 00:13:56.690 We've heard about the implementation challenges 00:13:56.690 --> 00:13:57.590 of a lot of these. 00:13:59.600 --> 00:14:02.860 The penalty structure at cost of new entry 00:14:02.860 --> 00:14:07.100 is something that I think is a very clever mechanism, 00:14:07.100 --> 00:14:08.980 an important one, and should be applied 00:14:08.980 --> 00:14:12.310 not only to non-compliance on the load side, 00:14:12.310 --> 00:14:14.610 but for non-performance on the generator side. 00:14:15.620 --> 00:14:19.080 That's a very clever and effective mechanism 00:14:19.080 --> 00:14:20.530 as part of the deck proposal. 00:14:21.690 --> 00:14:24.170 And it's self-correcting. 00:14:24.170 --> 00:14:29.170 It's designed so that at cost of new entry, 00:14:29.600 --> 00:14:33.360 where the noncompliance penalty matches costs of new entry, 00:14:33.360 --> 00:14:36.020 that first new unit is very, very expensive. 00:14:36.020 --> 00:14:38.893 But over time, as more supply comes in to meet demand, 00:14:40.120 --> 00:14:44.530 the price goes down and the sizing is also dynamic. 00:14:44.530 --> 00:14:46.660 So I would like to 00:14:48.980 --> 00:14:53.000 move forward with some version of an LSE obligation 00:14:53.000 --> 00:14:54.973 based on principles like that. 00:14:56.110 --> 00:14:59.323 The last I heard was that the deck wasn't, 00:15:00.320 --> 00:15:02.770 you were focused on deck as packaged, 00:15:02.770 --> 00:15:05.500 which is why I didn't incorporate 00:15:05.500 --> 00:15:08.510 all of those principles into last night's edition. 00:15:08.510 --> 00:15:09.343 But I'm happy to. 00:15:09.343 --> 00:15:14.290 And I would not want to consider an LSE obligation without 00:15:16.190 --> 00:15:18.260 studying how those principles can be leveraged 00:15:18.260 --> 00:15:21.023 and incorporated into any future LSE obligation. 00:15:23.020 --> 00:15:26.593 But as you know, I think that as packaged, 00:15:28.241 --> 00:15:30.550 it's not gonna solve our problems 00:15:30.550 --> 00:15:33.240 and not gonna be a silver bullet. 00:15:33.240 --> 00:15:35.130 And that's what I want to talk about. 00:15:35.130 --> 00:15:37.530 What are the principles, what are the mechanisms 00:15:38.570 --> 00:15:45.540 that we need to put forward and can allow us to 00:15:45.540 --> 00:15:47.230 build a foundation, plant a flag, 00:15:47.230 --> 00:15:48.563 to chart a course forward, 00:15:49.640 --> 00:15:53.860 so that in addition to all of the reform we've made so far, 00:15:53.860 --> 00:15:55.250 we can also show the markets, 00:15:55.250 --> 00:15:58.820 we can show our legislature, our state leadership, 00:15:58.820 --> 00:16:02.370 and most importantly, the citizens of Texas that 00:16:02.370 --> 00:16:05.850 we're continuing to make longterm reform 00:16:05.850 --> 00:16:09.393 that will comprehensively solve the problem at hand. 00:16:11.000 --> 00:16:12.293 Jimmy, I know you've, 00:16:14.610 --> 00:16:16.020 my sense is you 00:16:17.560 --> 00:16:19.170 also think there are features and elements 00:16:19.170 --> 00:16:21.083 of the deck proposal that can be, 00:16:23.760 --> 00:16:26.110 that should be captured in further study 00:16:26.110 --> 00:16:31.110 and rolled into an LSE obligation. 00:16:31.270 --> 00:16:33.570 I think that's the sense I've gotten from you. 00:16:36.104 --> 00:16:38.293 Lori, I know you've also thought about 00:16:40.720 --> 00:16:41.937 the elements that can be captured. 00:16:41.937 --> 00:16:46.920 And I also want to say another element of your proposal, 00:16:46.920 --> 00:16:48.780 the backstop mechanism, 00:16:48.780 --> 00:16:51.570 is the net load highlighting the net load variability. 00:16:51.570 --> 00:16:53.598 This is a great sizing mechanism. 00:16:53.598 --> 00:16:55.780 I think we need to focus on that as well 00:16:55.780 --> 00:16:57.123 in any LSE obligation. 00:16:59.875 --> 00:17:04.875 So I think, I feel confident you like the idea of a backstop 00:17:04.970 --> 00:17:06.420 since you published the memo. 00:17:08.482 --> 00:17:12.010 I don't quite have a sense of your thoughts on the backstop. 00:17:12.010 --> 00:17:15.046 I've got a pretty good sense of your thoughts on the deck. 00:17:15.046 --> 00:17:15.879 I'm not sure about the backstop. 00:17:15.879 --> 00:17:18.623 So that's what we're here for. 00:17:19.580 --> 00:17:20.850 Let's talk about it. 00:17:20.850 --> 00:17:22.300 Let's see what works, what doesn't work, 00:17:22.300 --> 00:17:24.350 what people like, what people don't like, 00:17:25.716 --> 00:17:30.716 and move towards mechanisms based on certain principles 00:17:30.930 --> 00:17:34.750 and we can hopefully keep this train moving 00:17:34.750 --> 00:17:35.950 in a positive direction. 00:17:37.232 --> 00:17:39.790 With that, I'll open up to thoughts or comments. 00:17:39.790 --> 00:17:41.290 Yeah, I guess I'll go first. 00:17:42.318 --> 00:17:44.490 Just to make some clarifying statements. 00:17:44.490 --> 00:17:45.590 I think you noted that 00:17:48.190 --> 00:17:51.323 I had originally proposed the strategic reliability service. 00:17:52.650 --> 00:17:54.438 The reason I use strategic is because 00:17:54.438 --> 00:17:56.410 the service would be used strategically 00:17:56.410 --> 00:17:57.950 and I used reliability service 00:17:57.950 --> 00:18:01.363 'cause it's the term, the phrase is embodied in SB3. 00:18:04.050 --> 00:18:06.650 Over the last week or so I think 00:18:08.422 --> 00:18:09.820 there may be some that have turned that into 00:18:09.820 --> 00:18:11.110 what they believe it is. 00:18:11.110 --> 00:18:12.670 And so really what it is 00:18:12.670 --> 00:18:15.087 is a backstop reliability mechanism, 00:18:15.087 --> 00:18:17.020 backup reliability service, 00:18:17.020 --> 00:18:19.920 backup reserve service, whatever you want to call it. 00:18:19.920 --> 00:18:21.320 That is the concept. 00:18:21.320 --> 00:18:22.820 What I'm focused on is the principles. 00:18:22.820 --> 00:18:24.750 So I don't want to get caught on semantics 00:18:24.750 --> 00:18:26.470 of what the name is 00:18:26.470 --> 00:18:28.770 because I feel like some people out there have 00:18:31.000 --> 00:18:33.460 knowingly misconstrued what I'm trying to do 00:18:33.460 --> 00:18:35.790 and turned it into a proposal that it's not. 00:18:35.790 --> 00:18:40.790 And so I'm happy to call it whatever it's called. 00:18:41.100 --> 00:18:42.336 Backstop-- Call it whatever 00:18:42.336 --> 00:18:43.169 you want to call it. 00:18:43.169 --> 00:18:45.510 That's your-- Backstop reliability service 00:18:45.510 --> 00:18:47.633 because reliability service is in SB3. 00:18:50.040 --> 00:18:52.005 So I just wanted to clarify that. 00:18:52.005 --> 00:18:53.005 I think that 00:18:54.190 --> 00:18:56.350 I'm tired of going back and forth on semantics. 00:18:56.350 --> 00:18:59.630 And so that's what it is. 00:18:59.630 --> 00:19:00.930 I've laid out the principles of it. 00:19:00.930 --> 00:19:02.230 I've spent a lot of time at least 00:19:02.230 --> 00:19:05.910 laying out the framework for it in terms of 00:19:05.910 --> 00:19:07.560 some of the major questions in there, 00:19:07.560 --> 00:19:09.490 what types of resources, who would pay for it, 00:19:09.490 --> 00:19:11.470 how would it be paid for. 00:19:11.470 --> 00:19:14.380 What's very important to me from this mechanism 00:19:14.380 --> 00:19:16.010 is that it's sized appropriately 00:19:16.010 --> 00:19:18.409 to a specific reliability need. 00:19:18.409 --> 00:19:21.210 Now, I mentioned peak net load variability. 00:19:21.210 --> 00:19:25.100 I don't want to create a mechanism that is out-sized. 00:19:25.100 --> 00:19:27.913 I still very much care about consumer costs. 00:19:30.310 --> 00:19:35.250 But one thing I do want to mention as well is that 00:19:37.700 --> 00:19:39.380 we really would have to evaluate 00:19:39.380 --> 00:19:41.540 how quickly it would get implemented, 00:19:41.540 --> 00:19:46.400 but also evaluate how much and based on what. 00:19:46.400 --> 00:19:47.460 I had initially sort of 00:19:47.460 --> 00:19:49.540 put out an example of the SARA report 00:19:49.540 --> 00:19:51.910 and some of the numbers in the red that 00:19:54.130 --> 00:19:58.250 the mechanism could be used to fill 00:19:58.250 --> 00:20:00.360 a specific reliability need. 00:20:00.360 --> 00:20:03.640 However, the last thing I would want to do is 00:20:05.170 --> 00:20:07.680 withhold resources from the market 00:20:07.680 --> 00:20:10.580 and create a reliability risk in the near term. 00:20:10.580 --> 00:20:13.920 So I want to make sure that 00:20:13.920 --> 00:20:16.690 if we are going to use this as a bridge, 00:20:16.690 --> 00:20:18.210 that we study it a little bit further 00:20:18.210 --> 00:20:19.590 to make sure we're not creating 00:20:19.590 --> 00:20:21.850 a near term reliability risk, 00:20:21.850 --> 00:20:25.140 and that maybe there is something else we could use 00:20:25.140 --> 00:20:30.140 to complement this mechanism to fill potentially 00:20:30.808 --> 00:20:32.960 as a joint bridge. 00:20:32.960 --> 00:20:35.810 Because I think really if you pull out the resources, 00:20:35.810 --> 00:20:40.560 the goal would be to efficiently raise energy prices 00:20:40.560 --> 00:20:42.310 to drive, send the forward signal 00:20:42.310 --> 00:20:45.400 that new generation is needed and 00:20:47.374 --> 00:20:49.520 so that's how you would drive investment. 00:20:49.520 --> 00:20:54.150 And so we have 13,000 megawatts of natural gas 00:20:54.150 --> 00:20:56.210 in the interconnection queue. 00:20:56.210 --> 00:20:59.000 I would want to be sure that we're gonna have 00:20:59.850 --> 00:21:02.730 some announcement soon, some investment soon, 00:21:02.730 --> 00:21:07.730 because what I was looking for with this bridge mechanism, 00:21:08.680 --> 00:21:12.440 whether it's standalone, market enhancement, or a bridge, 00:21:12.440 --> 00:21:17.760 is to create, to ensure we have reliability 00:21:17.760 --> 00:21:21.780 while we implement or evaluate, 00:21:21.780 --> 00:21:25.223 continue to evaluate more long-term solutions. 00:21:26.550 --> 00:21:28.980 So I will stop there. 00:21:28.980 --> 00:21:30.640 I know, well, let me add, 00:21:30.640 --> 00:21:33.100 I know that there has been some correspondence filed 00:21:33.100 --> 00:21:34.900 that my proposal could 00:21:36.060 --> 00:21:38.290 be paired with decks. 00:21:38.290 --> 00:21:41.400 I know that's not anything we've fully evaluated yet but 00:21:44.375 --> 00:21:45.680 I read through some of the filings 00:21:45.680 --> 00:21:48.570 and I know that we have some stakeholders here that 00:21:49.725 --> 00:21:51.440 would probably be happy to talk to that issue. 00:21:51.440 --> 00:21:53.320 But I just want to make sure that 00:21:53.320 --> 00:21:54.980 we're kind of turning over every stone 00:21:54.980 --> 00:21:56.620 and we're being open-minded of how 00:21:56.620 --> 00:21:59.770 it could all work together to get to an eventual 00:21:59.770 --> 00:22:00.770 long-term milestone. 00:22:02.060 --> 00:22:02.893 Thank you. 00:22:04.280 --> 00:22:05.637 Thoughts? Comments? 00:22:09.470 --> 00:22:11.823 I'm happy to state some comments. 00:22:13.410 --> 00:22:18.410 I appreciate the time that everybody's put into this. 00:22:20.163 --> 00:22:24.950 It's pretty darn important, obviously, 00:22:24.950 --> 00:22:26.520 as a result of what happened in February, 00:22:26.520 --> 00:22:29.130 but also for the economic development of our state 00:22:29.130 --> 00:22:31.293 and for the benefit of the consumers. 00:22:33.358 --> 00:22:37.900 I am still very wary 00:22:37.900 --> 00:22:40.840 of what a load serving entity obligation would look like 00:22:40.840 --> 00:22:43.860 and would do to the market and do to retailers. 00:22:43.860 --> 00:22:46.720 But I'm willing to go along with 00:22:46.720 --> 00:22:49.920 a deeper dive on the analysis of that. 00:22:49.920 --> 00:22:52.800 One thing that I have struggled with is 00:22:52.800 --> 00:22:56.640 I haven't seen any analytics behind supporting any of these. 00:22:56.640 --> 00:22:58.790 So I don't know how they affect the market. 00:22:58.790 --> 00:23:02.030 I don't know how to compare one versus the other, 00:23:02.030 --> 00:23:04.010 except for on one filing versus another 00:23:04.010 --> 00:23:06.060 or one person's opinion versus the other. 00:23:07.210 --> 00:23:09.470 That's not the way I have historically made decisions. 00:23:09.470 --> 00:23:13.530 I like to have them grounded in analytics. 00:23:13.530 --> 00:23:15.570 That's what happens when you're trying to build 00:23:15.570 --> 00:23:16.920 a billion dollar power plant. 00:23:16.920 --> 00:23:18.300 It's grounded in analytics. 00:23:18.300 --> 00:23:20.810 They look at the market, they look at the revenues. 00:23:20.810 --> 00:23:25.300 And that's the way markets function. 00:23:25.300 --> 00:23:28.973 They have to have robust analytics behind them. 00:23:31.670 --> 00:23:34.950 I really, really like the deck proposal. 00:23:34.950 --> 00:23:37.570 I think it's a great innovation 00:23:37.570 --> 00:23:41.870 that can help Texas be a leader in this new world, 00:23:41.870 --> 00:23:44.250 this new world that we're looking at, 00:23:44.250 --> 00:23:45.850 that everybody's looking at, 00:23:45.850 --> 00:23:50.173 which is lots of intermittent renewables, 00:23:52.140 --> 00:23:54.320 cost pressures going downwards, 00:23:54.320 --> 00:23:57.453 which put pressure on dispatchable resources. 00:23:58.530 --> 00:24:01.430 And I think that the deck idea is really good. 00:24:01.430 --> 00:24:06.430 I've searched long and far to find examples of that 00:24:06.550 --> 00:24:08.591 that have worked and have been successful. 00:24:08.591 --> 00:24:12.150 And I have found a few, and I think one of them, 00:24:12.150 --> 00:24:14.107 I'm no pro on it but-- 00:24:15.108 --> 00:24:16.200 Better hope you're a pro. 00:24:16.200 --> 00:24:17.033 I'm not. 00:24:18.610 --> 00:24:20.620 There's a project that was in Queensland 00:24:20.620 --> 00:24:23.130 called the Queensland Gas Certificate Program. 00:24:23.130 --> 00:24:24.880 And it was in New Zealand 00:24:24.880 --> 00:24:27.250 and it was intended to spur 00:24:27.250 --> 00:24:30.460 natural gas fire generation from coal scenes. 00:24:30.460 --> 00:24:31.833 Very specific. 00:24:32.810 --> 00:24:34.480 And it worked very well. 00:24:34.480 --> 00:24:35.677 Went from like two, 00:24:38.168 --> 00:24:40.660 2% of the market to 20% of the market. 00:24:40.660 --> 00:24:43.990 It was a very similar type program as the deck. 00:24:43.990 --> 00:24:48.990 And I think it has a very good likelihood of success here. 00:24:50.990 --> 00:24:52.760 And want that to be one of the things 00:24:52.760 --> 00:24:54.460 that we study going forward. 00:24:56.794 --> 00:24:59.670 I understand when you tell load 00:24:59.670 --> 00:25:02.820 they have to subscribe to something, that's an obligation. 00:25:02.820 --> 00:25:06.240 So I think the semantics of the 00:25:06.240 --> 00:25:07.720 load serving entity obligation 00:25:07.720 --> 00:25:09.620 and the deck program being a small part 00:25:09.620 --> 00:25:14.620 of a load serving entity obligation are, 00:25:14.741 --> 00:25:18.733 they are somewhat the same, but it has to do with amounts, 00:25:20.870 --> 00:25:22.050 characteristics of the resource 00:25:22.050 --> 00:25:24.400 that you're striving to resolve. 00:25:24.400 --> 00:25:26.860 So like I said, 00:25:26.860 --> 00:25:30.210 I'm on board with trying to do a deeper dive. 00:25:30.210 --> 00:25:34.260 We have to do something deeper on the LSE obligation 00:25:34.260 --> 00:25:36.750 for me to totally understand how it works. 00:25:36.750 --> 00:25:40.350 We have to do something much deeper on the deck program 00:25:40.350 --> 00:25:42.720 to understand how it's gonna affect 00:25:42.720 --> 00:25:44.670 demand response and energy efficiency 00:25:44.670 --> 00:25:46.280 and who's gonna play in these games 00:25:46.280 --> 00:25:48.130 and how it's gonna affect the market. 00:25:51.230 --> 00:25:53.200 And I say that. 00:25:53.200 --> 00:25:55.810 There are a lot of issues that I have 00:25:55.810 --> 00:25:59.440 that are operational issues at ERCOT, 00:25:59.440 --> 00:26:01.840 that I think will have a major effect on the market. 00:26:01.840 --> 00:26:04.720 They are not major operational changes. 00:26:04.720 --> 00:26:09.310 I don't think February was a failure of the ERCOT market. 00:26:09.310 --> 00:26:11.240 There were failures within the market. 00:26:11.240 --> 00:26:13.040 There were failures within the gas system. 00:26:13.040 --> 00:26:16.183 But the entire market, in my opinion, did not fail. 00:26:19.610 --> 00:26:23.090 Things that we talked about at the open meeting earlier. 00:26:23.090 --> 00:26:28.090 How we are gonna work on energy efficiency programs. 00:26:28.260 --> 00:26:32.300 How are we gonna give every bit of the market access 00:26:32.300 --> 00:26:36.390 to demand response functions and resources? 00:26:36.390 --> 00:26:39.290 So we're going from a market where, 00:26:39.290 --> 00:26:42.470 a system where shutting off load 00:26:42.470 --> 00:26:45.640 was the worst thing you could ever do, 00:26:45.640 --> 00:26:47.180 because it was a utility doing it 00:26:47.180 --> 00:26:48.810 and it was a dire circumstance, 00:26:48.810 --> 00:26:51.230 to somebody voluntarily saying, 00:26:51.230 --> 00:26:53.343 oh yeah, I'll do that for money. 00:26:54.190 --> 00:26:55.510 We've got to give them the chance 00:26:55.510 --> 00:26:58.520 because there's a cost reduction 00:26:58.520 --> 00:27:00.070 and there's a reliability benefit. 00:27:00.070 --> 00:27:01.473 So we have to get there. 00:27:05.520 --> 00:27:06.950 That's demand response. 00:27:06.950 --> 00:27:08.364 Energy efficiency. 00:27:08.364 --> 00:27:10.870 Energy efficiency by definition 00:27:10.870 --> 00:27:15.490 will lower the amount of megawatts we need forever. 00:27:15.490 --> 00:27:17.830 And we don't even know what those megawatts are. 00:27:17.830 --> 00:27:21.063 But if we don't have a robust energy efficiency mechanism, 00:27:22.440 --> 00:27:24.210 we're gonna oversize and 00:27:24.210 --> 00:27:26.160 the market will oversize and overspend. 00:27:27.950 --> 00:27:30.680 Transmission, I came in to this Commission. 00:27:30.680 --> 00:27:32.630 I love dealing with transmission issues. 00:27:32.630 --> 00:27:34.630 Unless we know that all the megawatts 00:27:34.630 --> 00:27:36.830 that are being produced can get to the load, 00:27:36.830 --> 00:27:38.380 we don't know how much we need. 00:27:39.410 --> 00:27:40.690 We need more transmission. 00:27:40.690 --> 00:27:43.410 We need to solve generic transmission constraints. 00:27:43.410 --> 00:27:46.570 We need more data to be open to the public on that. 00:27:46.570 --> 00:27:51.570 We need to solve this transmission planning effort to allow, 00:27:51.870 --> 00:27:55.160 to get our underlying understanding of how much we need. 00:27:55.160 --> 00:27:56.633 I have just a few more. 00:27:58.630 --> 00:28:03.133 As we move towards from a supply sided system where just, 00:28:04.220 --> 00:28:06.150 it was vertically integrated utilities 00:28:06.150 --> 00:28:09.163 and now it's generators and reps, 00:28:10.360 --> 00:28:14.020 gentailers, as we call them, are providing resources. 00:28:14.020 --> 00:28:17.820 The lines between what a utility does 00:28:17.820 --> 00:28:20.890 and what a consumer does are being blurred. 00:28:20.890 --> 00:28:23.670 The transmission and distribution systems are being blurred 00:28:23.670 --> 00:28:26.070 as consumers become generators of power 00:28:26.070 --> 00:28:28.040 and put that back on the system. 00:28:28.040 --> 00:28:29.400 We have to account for that. 00:28:29.400 --> 00:28:32.360 And I don't know how these mechanisms account for that. 00:28:32.360 --> 00:28:34.763 That's, again, that's part of my issue. 00:28:37.680 --> 00:28:39.650 Promoting an individual's right 00:28:39.650 --> 00:28:41.780 or these companies rights to 00:28:42.770 --> 00:28:45.510 interconnect at the distribution level voltage 00:28:46.700 --> 00:28:47.900 with certainty to understand. 00:28:47.900 --> 00:28:51.360 We have this at the large generator interconnection process. 00:28:51.360 --> 00:28:53.470 We don't have that at the lower voltage 00:28:53.470 --> 00:28:54.580 or distribution voltage. 00:28:54.580 --> 00:28:57.243 We need that because we need those megawatts. 00:28:59.132 --> 00:29:00.720 Two more things. 00:29:00.720 --> 00:29:01.852 Let me just say. 00:29:01.852 --> 00:29:03.210 Well, three more things. 00:29:03.210 --> 00:29:04.223 One of them is, 00:29:06.510 --> 00:29:07.693 as I understand it, 00:29:09.050 --> 00:29:12.123 ERCOT still gives no capacity value to storage. 00:29:14.450 --> 00:29:16.040 That may be because they haven't 00:29:16.040 --> 00:29:17.890 had much storage on the ERCOT system. 00:29:19.870 --> 00:29:20.930 But it's coming. 00:29:20.930 --> 00:29:24.960 And it seems to me like that is a very important component 00:29:24.960 --> 00:29:27.720 of understanding how many megawatts we need, 00:29:27.720 --> 00:29:30.060 is to understand how many megawatts we have. 00:29:30.060 --> 00:29:32.110 If we don't have this, 00:29:32.110 --> 00:29:35.260 if 30% of the queue is storage coming in, 00:29:35.260 --> 00:29:37.070 we got to have a better understanding 00:29:37.070 --> 00:29:39.143 of what that capacity value is. 00:29:41.310 --> 00:29:45.760 Utilizing ELCC, effective load carrying capability, 00:29:45.760 --> 00:29:47.650 important, get it done. 00:29:47.650 --> 00:29:51.970 We got to understand the megawatt picture better. 00:29:51.970 --> 00:29:54.620 We can't do any of these proposals, in my opinion, 00:29:54.620 --> 00:29:56.160 until we understand this baseline 00:29:56.160 --> 00:29:58.710 or the market will not respond 00:29:58.710 --> 00:30:00.770 to what's needed in the, 00:30:00.770 --> 00:30:02.760 what is needed for reliability, 00:30:02.760 --> 00:30:04.733 if they don't have those numbers. 00:30:05.870 --> 00:30:09.573 And finally looking forward, the question is, 00:30:11.400 --> 00:30:14.230 I mean, we see all these electric vehicles. 00:30:14.230 --> 00:30:16.500 They may be this new future of storage. 00:30:16.500 --> 00:30:17.970 They may be generators. 00:30:17.970 --> 00:30:19.730 They're consumers as well. 00:30:19.730 --> 00:30:22.980 Same with Tesla power walls and batteries. 00:30:22.980 --> 00:30:25.380 And I think we're kind of 00:30:25.380 --> 00:30:28.040 thinking in the old world of 00:30:28.040 --> 00:30:31.250 loss of load expectation numbers. 00:30:31.250 --> 00:30:35.923 What is our reliability megawatt metric? 00:30:37.040 --> 00:30:39.240 And I think that as we go forward 00:30:39.240 --> 00:30:40.363 and look at these, 00:30:41.760 --> 00:30:44.643 the deck proposal, the LSE obligation, 00:30:46.560 --> 00:30:49.990 I think we need to look at them progressively going forward 00:30:49.990 --> 00:30:53.273 with all of these as a part of that analysis. 00:30:56.890 --> 00:30:59.533 I'm fearful that we will make the wrong decisions. 00:31:00.380 --> 00:31:03.763 We will impact, everything we do impacts the market. 00:31:05.190 --> 00:31:09.120 Everything that we do addresses price formation. 00:31:09.120 --> 00:31:11.460 It helps it and it destroys it. 00:31:11.460 --> 00:31:14.110 Every generator, every transmission line, everything. 00:31:15.950 --> 00:31:21.816 So I think with that, Commissioner Cobos, 00:31:21.816 --> 00:31:24.920 I want to understand more about the economics 00:31:24.920 --> 00:31:27.340 of what the strategic reserve is. 00:31:27.340 --> 00:31:30.700 I'm wary of pulling megawatts out of the system. 00:31:30.700 --> 00:31:34.510 And I understand, mostly from Sam at Brattle, 00:31:34.510 --> 00:31:36.300 I understand that 00:31:36.300 --> 00:31:38.900 one way to show the market that you need 00:31:38.900 --> 00:31:42.360 more dispatchable resources to pull a bunch out. 00:31:42.360 --> 00:31:45.510 So it's not being priced in the day to day market. 00:31:45.510 --> 00:31:47.720 It's there for standby, and it's the standby, 00:31:47.720 --> 00:31:49.053 it's there for reserve. 00:31:50.190 --> 00:31:51.810 Seems foreign to me. 00:31:51.810 --> 00:31:53.030 It seems like people, 00:31:53.030 --> 00:31:54.650 when they want to invest in the market, 00:31:54.650 --> 00:31:55.760 they want to be in the market, 00:31:55.760 --> 00:31:58.403 not just get paid for standing by. 00:32:02.940 --> 00:32:06.293 So with that, I think that kind of, 00:32:07.478 --> 00:32:09.260 let me just say one other thing. 00:32:09.260 --> 00:32:12.700 As we've discussed about the load serving entity obligation, 00:32:12.700 --> 00:32:13.643 I have, 00:32:16.172 --> 00:32:18.400 kind of the way I view it 00:32:18.400 --> 00:32:22.118 or the way I've characterized it for myself is that 00:32:22.118 --> 00:32:25.313 when the legislature created the retail market in Texas, 00:32:26.290 --> 00:32:29.910 they wanted retail electric providers to 00:32:31.810 --> 00:32:34.090 be new entrants into this market, 00:32:34.090 --> 00:32:37.070 we wanted them to provide creative services, 00:32:37.070 --> 00:32:40.760 bundling, different pricing, all of this, 00:32:40.760 --> 00:32:42.340 and they were not required to bring 00:32:42.340 --> 00:32:43.590 generation to the market. 00:32:44.870 --> 00:32:46.050 They could go to the market. 00:32:46.050 --> 00:32:48.993 We separated and unbundled those for a reason. 00:32:50.000 --> 00:32:53.290 The load serving entity obligation is kind of, to me, 00:32:53.290 --> 00:32:56.160 like you've got to take a loaf of bread to the grocery store 00:32:56.160 --> 00:32:57.823 in order to buy a loaf of bread. 00:32:59.360 --> 00:33:02.990 And sometimes it has a hard-- 00:33:02.990 --> 00:33:04.603 Including deck obligations. 00:33:05.910 --> 00:33:08.580 It's a version of a load serving entity. 00:33:08.580 --> 00:33:09.810 Well-- A load serving entity. 00:33:09.810 --> 00:33:11.130 I don't necessarily think that, 00:33:11.130 --> 00:33:13.650 but I think as, if we're trying to show that 00:33:14.980 --> 00:33:16.990 100% of the load obligation 00:33:16.990 --> 00:33:19.840 plus a reserve margin is taken care of, 00:33:19.840 --> 00:33:22.380 then that's when you have to show that you have it 00:33:22.380 --> 00:33:24.300 in order to be able to buy it from the market. 00:33:24.300 --> 00:33:26.550 Again, that's just the way I characterize it. 00:33:27.400 --> 00:33:29.030 I want to look through this. 00:33:29.030 --> 00:33:34.030 I want to do this underlying base analysis of this 00:33:34.660 --> 00:33:36.550 that I don't think we've done yet and 00:33:37.950 --> 00:33:39.937 I'm eager to get on with that 00:33:39.937 --> 00:33:43.375 and to narrow the thought and to get on with it. 00:33:43.375 --> 00:33:44.375 Thank you. 00:33:45.483 --> 00:33:46.316 Yes, sir. 00:33:47.250 --> 00:33:48.363 Thanks, Commissioner. 00:33:49.760 --> 00:33:52.280 I think it's fair to say the last few days, 00:33:52.280 --> 00:33:53.520 and certainly the last few months, 00:33:53.520 --> 00:33:55.320 have been challenging for all of us. 00:33:56.440 --> 00:33:58.590 Think you captured that well, Mr. Chairman. 00:33:59.810 --> 00:34:06.120 As we had started out, I feel now we have ended up 00:34:06.120 --> 00:34:09.530 at a similar place asking similar questions about 00:34:10.750 --> 00:34:15.570 what the impacts of any reform may have on the market and 00:34:16.890 --> 00:34:19.030 what do reforms under consideration 00:34:19.030 --> 00:34:20.780 do to the wholesale price of power. 00:34:22.820 --> 00:34:24.820 Does it have the result of eliminating 00:34:24.820 --> 00:34:26.373 the competitive retail market? 00:34:27.690 --> 00:34:30.920 Does it create an unregulated and unaccountable system 00:34:30.920 --> 00:34:33.350 of monopolies controlling one of our most 00:34:33.350 --> 00:34:34.973 important essential services? 00:34:36.100 --> 00:34:38.340 Does it guarantee that we build enough 00:34:38.340 --> 00:34:42.000 dispatchable generation to meet demand in a timely way 00:34:42.000 --> 00:34:43.740 that actually meets the demand? 00:34:43.740 --> 00:34:45.240 Because that's been one of the 00:34:46.970 --> 00:34:48.520 symptoms of our system, 00:34:48.520 --> 00:34:50.990 that we're always behind the eight ball 00:34:50.990 --> 00:34:53.800 and trying to catch up to increasing load growth 00:34:53.800 --> 00:34:55.940 'cause we're growing so fast. 00:34:55.940 --> 00:34:58.116 And then the pressures of intermittence 00:34:58.116 --> 00:35:01.453 on the system at that time. 00:35:02.350 --> 00:35:04.610 We have looked to other models 00:35:04.610 --> 00:35:09.610 across the country and across the globe for examples. 00:35:09.836 --> 00:35:14.010 And anecdotally, again, you can get this through 00:35:14.010 --> 00:35:16.070 the Energy Information Administration 00:35:16.070 --> 00:35:18.870 or drill down onto those systems themselves. 00:35:18.870 --> 00:35:20.660 They have higher costs. 00:35:20.660 --> 00:35:24.280 And I think it's relatively easy to say 00:35:24.280 --> 00:35:27.060 that one of the driving forces of moving business 00:35:27.060 --> 00:35:31.060 and peoples to Texas has been low energy costs. 00:35:31.060 --> 00:35:34.230 So that has been a virtue of the ERCOT system 00:35:34.230 --> 00:35:35.700 that has been absolutely essential 00:35:35.700 --> 00:35:38.380 to the economic growth and success of Texas 00:35:38.380 --> 00:35:39.743 over the last two decades. 00:35:41.550 --> 00:35:43.820 The only conclusion that I can draw 00:35:43.820 --> 00:35:46.110 from this thought exercise, 00:35:46.110 --> 00:35:48.080 and oh, by the way, in those systems, 00:35:48.080 --> 00:35:49.630 this is what I struggle with, 00:35:49.630 --> 00:35:52.410 in those systems, we see declining reserves. 00:35:52.410 --> 00:35:54.160 At least I watch SPP every day 00:35:54.160 --> 00:35:56.430 and they've had declining reserve margins, 00:35:56.430 --> 00:35:57.550 which has been disconcerting. 00:35:57.550 --> 00:36:01.190 I mean, they have a lot of these backstop features 00:36:01.190 --> 00:36:02.543 that we're discussing. 00:36:03.930 --> 00:36:05.130 Declining reserve margins 00:36:05.130 --> 00:36:09.510 and in some of the systems cases, less reliability. 00:36:09.510 --> 00:36:11.650 Now, that could come from other things. 00:36:11.650 --> 00:36:13.943 If you put everything side by side. 00:36:15.350 --> 00:36:16.193 But you see it. 00:36:17.460 --> 00:36:19.170 So the only conclusion I can draw 00:36:19.170 --> 00:36:22.930 from this thought exercise is that we need another way. 00:36:22.930 --> 00:36:24.650 I mean, we're producing and consuming 00:36:24.650 --> 00:36:26.330 10% of the power of this country, 00:36:26.330 --> 00:36:29.323 and we're the preeminent economic power on this planet. 00:36:30.220 --> 00:36:31.410 Just in Texas. 00:36:31.410 --> 00:36:35.100 So we have always been unique. 00:36:35.100 --> 00:36:36.930 We have always held ourselves out to be unique. 00:36:36.930 --> 00:36:38.590 So we need a Texas way. 00:36:38.590 --> 00:36:40.710 And this has been the hallmark of our state 00:36:40.710 --> 00:36:41.710 since the beginning. 00:36:42.880 --> 00:36:45.951 And I propose the dispatchable portfolio 00:36:45.951 --> 00:36:50.951 standard deck system as a first in the nation, 00:36:51.887 --> 00:36:54.440 first of its kind proposal, 00:36:54.440 --> 00:36:56.730 harnessed from the aeolian concept 00:36:56.730 --> 00:37:00.160 because it's a targeted approach 00:37:00.160 --> 00:37:02.113 rather than a broad approach. 00:37:04.680 --> 00:37:09.100 But it's targeted consistent with 00:37:09.100 --> 00:37:11.320 the track that we're already pursuing 00:37:11.320 --> 00:37:13.500 in light of the menu and spectrum 00:37:13.500 --> 00:37:15.400 of the ancillary service products 00:37:15.400 --> 00:37:17.610 that we're already pursuing. 00:37:17.610 --> 00:37:20.740 Because again, those are all different performance values 00:37:20.740 --> 00:37:22.730 that we are seeking on an individual basis. 00:37:22.730 --> 00:37:24.220 So bundled together, 00:37:24.220 --> 00:37:26.723 it is a broad framework for reliability. 00:37:29.810 --> 00:37:31.600 As a targeted approach, 00:37:31.600 --> 00:37:34.300 given the concerns raised by Brattle and yourself, 00:37:34.300 --> 00:37:35.560 which are valid, 00:37:35.560 --> 00:37:36.910 about the dan-- And others. 00:37:36.910 --> 00:37:38.980 And others, yeah, and others. 00:37:38.980 --> 00:37:40.170 All of that. 00:37:40.170 --> 00:37:41.920 About the danger of distorting 00:37:41.920 --> 00:37:43.420 the substitute good principle. 00:37:45.940 --> 00:37:48.540 I would urge that we should not consider 00:37:48.540 --> 00:37:50.483 this policy position in isolation. 00:37:51.820 --> 00:37:56.820 Given what we know about Brattle's second option 00:37:56.900 --> 00:38:00.860 or Commissioner Cobos' backstop reliability service. 00:38:00.860 --> 00:38:01.693 Sure, yes. 00:38:01.693 --> 00:38:03.440 Reliability service backstop. Okay. 00:38:04.664 --> 00:38:08.649 As outlined, this could be harnessed to capture 00:38:08.649 --> 00:38:10.950 the older, less efficient units, 00:38:10.950 --> 00:38:12.030 or at least a portion of them, 00:38:12.030 --> 00:38:14.560 also new units, depending on whatever the performance value 00:38:14.560 --> 00:38:15.890 that we're seeking there, 00:38:15.890 --> 00:38:19.140 so that we mitigate the dangers again 00:38:19.140 --> 00:38:22.293 of the substitute good concerns. 00:38:23.150 --> 00:38:26.090 Thus ensuring we do not lose our existing fleet, 00:38:26.090 --> 00:38:28.620 but allow these units to be retired over time 00:38:28.620 --> 00:38:30.898 as new generation and economic conditions 00:38:30.898 --> 00:38:32.373 continue to dictate. 00:38:33.770 --> 00:38:34.780 So with that, Mr. Chairman, 00:38:34.780 --> 00:38:36.760 I was disappointed that the deck proposal 00:38:36.760 --> 00:38:38.260 did not make the outline. 00:38:38.260 --> 00:38:41.860 I am disappointed because I believe, 00:38:41.860 --> 00:38:44.970 man, an hour and a half for an idea, first of its kind, 00:38:44.970 --> 00:38:46.383 last workshop. 00:38:47.320 --> 00:38:50.663 If we could be allowed to continue this exercise. 00:38:51.813 --> 00:38:52.670 And as you can tell, 00:38:52.670 --> 00:38:57.090 and as we've said throughout this point, 00:38:57.090 --> 00:39:01.970 I have moved toward, we need a load obligation. 00:39:01.970 --> 00:39:03.740 Gen versus load. 00:39:03.740 --> 00:39:05.040 I believe the statute 00:39:07.201 --> 00:39:10.923 has more allowance for load requirements. 00:39:12.330 --> 00:39:15.400 And thus it affords us better optionality 00:39:15.400 --> 00:39:18.123 in pursuing resource adequacy options. 00:39:19.270 --> 00:39:24.270 So I know your intention is to take something off the table. 00:39:25.170 --> 00:39:26.740 I do have core principles. 00:39:26.740 --> 00:39:28.330 We have all discussed them 00:39:28.330 --> 00:39:31.040 and I can articulate them here. 00:39:31.040 --> 00:39:34.320 We have a difference of opinion in how 00:39:34.320 --> 00:39:39.320 revenues designed to incent generation should be used, 00:39:39.430 --> 00:39:43.250 spread across a broad existing generation, 00:39:43.250 --> 00:39:44.373 the generation fleet, 00:39:45.660 --> 00:39:48.850 or targeted for new or 00:39:48.850 --> 00:39:51.683 next generation technology, best available technology. 00:39:53.770 --> 00:39:57.280 I do believe that if we're allowed to pursue this, 00:39:57.280 --> 00:40:01.370 we can answer fundamental concerns and questions 00:40:01.370 --> 00:40:05.650 raised by stakeholders and market participants, 00:40:05.650 --> 00:40:09.930 to where Texas might be able to blaze a path 00:40:09.930 --> 00:40:12.410 for the world to follow because everyone 00:40:12.410 --> 00:40:14.770 is having the same problems. 00:40:14.770 --> 00:40:16.530 Everyone has not cracked the code. 00:40:16.530 --> 00:40:18.773 No one has cracked the code on this. 00:40:20.110 --> 00:40:21.600 Sam's flying all over the world. 00:40:21.600 --> 00:40:23.260 So is everybody else flying all over the world, 00:40:23.260 --> 00:40:24.970 giving advice on how we solve this 00:40:24.970 --> 00:40:26.220 and nobody's done it yet. 00:40:27.970 --> 00:40:28.803 For the future. 00:40:28.803 --> 00:40:30.630 Because the numbers are so large 00:40:30.630 --> 00:40:32.530 in terms of intermittent technologies 00:40:32.530 --> 00:40:34.210 penetrating all markets, 00:40:34.210 --> 00:40:36.073 no one has to deal with it at scale. 00:40:37.020 --> 00:40:40.220 So I would ask, 00:40:40.220 --> 00:40:44.390 I beg that a deck portion similar to what you had, 00:40:44.390 --> 00:40:48.570 the LSE obligation, the backstop reserve service, 00:40:48.570 --> 00:40:50.520 and potentially a deck proposal 00:40:50.520 --> 00:40:53.270 could be studied over the next six months 00:40:53.270 --> 00:40:55.410 so that we could have, again, 00:40:55.410 --> 00:40:57.720 we've got consulting groups coming in here, 00:40:57.720 --> 00:41:00.330 economists telling us that this could work. 00:41:00.330 --> 00:41:03.363 And I don't want to kill the baby in the crib on this. 00:41:05.960 --> 00:41:08.236 And I'll leave it at that, sir. 00:41:08.236 --> 00:41:10.280 And I'd like to follow up because 00:41:11.280 --> 00:41:13.170 I think both Commissioner Glotfelty 00:41:13.170 --> 00:41:15.520 and Commissioner McAdams made some good points. 00:41:17.350 --> 00:41:19.310 We've done a tremendous amount of work 00:41:19.310 --> 00:41:21.330 over the last several months and Chairman, 00:41:21.330 --> 00:41:23.080 you've definitely highlighted that. 00:41:24.780 --> 00:41:26.193 All of these proposals, 00:41:27.180 --> 00:41:29.470 the LSE obligation introduced originally 00:41:29.470 --> 00:41:31.820 by NRG in late September, 00:41:31.820 --> 00:41:34.893 introduced in your memo in sort of later October. 00:41:35.755 --> 00:41:38.840 I mean, even the deck program that we've had 00:41:40.190 --> 00:41:42.110 on our plate for a few weeks, 00:41:42.110 --> 00:41:43.110 maybe a couple of weeks. 00:41:43.110 --> 00:41:44.203 Two. Two weeks. 00:41:46.160 --> 00:41:48.833 We've gotten extensive comments on the LSE obligation 00:41:48.833 --> 00:41:50.885 over the last five weeks. 00:41:50.885 --> 00:41:52.663 Since your memo. 00:41:54.590 --> 00:41:56.303 A lot of commentary there. 00:41:57.510 --> 00:42:00.320 I know I myself have expressed deep concern with it 00:42:00.320 --> 00:42:01.800 from a variety of perspectives 00:42:01.800 --> 00:42:04.130 and I know that there have been comments filed 00:42:04.130 --> 00:42:06.480 that attempt to address those concerns as well. 00:42:08.790 --> 00:42:12.970 But I feel like, and even with the deck program, 00:42:12.970 --> 00:42:14.253 I feel like, 00:42:15.490 --> 00:42:18.050 I strongly believe that I need more time 00:42:18.050 --> 00:42:20.290 to evaluate these options. 00:42:20.290 --> 00:42:22.890 We've had them on the table for weeks. 00:42:22.890 --> 00:42:27.890 And what we're doing here has prolific impacts on our state, 00:42:29.470 --> 00:42:32.500 our market, our consumers, the public. 00:42:32.500 --> 00:42:35.350 And I would just like more time to digest 00:42:36.810 --> 00:42:39.520 these proposals and how they can work together, 00:42:39.520 --> 00:42:43.053 whether it's my bridge and both proposals or, 00:42:44.870 --> 00:42:48.810 I proffered the bridge to give us more time to evaluate. 00:42:48.810 --> 00:42:51.770 But I also want to make sure that it's studied too, 00:42:51.770 --> 00:42:53.560 because as I said earlier, 00:42:53.560 --> 00:42:55.410 I want to make sure, one, ERCOT can get it done 00:42:55.410 --> 00:42:57.440 in a time efficient manner. 00:42:57.440 --> 00:42:58.950 Secondly, I want to be able to make sure 00:42:58.950 --> 00:43:00.230 it's right sized so we're not, 00:43:00.230 --> 00:43:03.090 and it's gonna work in a way that does not create 00:43:03.090 --> 00:43:05.180 any near term reliability issues, 00:43:05.180 --> 00:43:09.670 and that's not impacting pricing in a negative way. 00:43:09.670 --> 00:43:11.530 So even with my proposal, 00:43:11.530 --> 00:43:14.520 I know I've laid a lot of parameters there that I think 00:43:14.520 --> 00:43:18.720 would be palatable for a broad stake of consumers. 00:43:18.720 --> 00:43:21.500 It's by no means the last stop. 00:43:21.500 --> 00:43:24.793 I would like it to get more comments on it 00:43:24.793 --> 00:43:27.200 because we actually haven't gotten formal comment 00:43:27.200 --> 00:43:28.400 on the deck proposal. 00:43:28.400 --> 00:43:31.280 I know you've gotten maybe phone calls and 00:43:31.280 --> 00:43:32.885 commentary. Got a lot of comments. 00:43:32.885 --> 00:43:34.180 Not formal. 00:43:34.180 --> 00:43:35.560 On the formal, yes sir. 00:43:35.560 --> 00:43:36.880 But on the deck proposal, 00:43:36.880 --> 00:43:39.920 I think it's all been sort of just nothing on record. 00:43:39.920 --> 00:43:40.753 Nothing on record. 00:43:40.753 --> 00:43:43.904 I know there's concerns and let's get them on the record 00:43:43.904 --> 00:43:47.263 and do a deeper dive into, 00:43:50.460 --> 00:43:52.331 are there aspects of the deck program 00:43:52.331 --> 00:43:57.331 or the deck, DPS deck program that can be 00:43:57.430 --> 00:44:00.240 modified to make it more palatable? 00:44:00.240 --> 00:44:05.240 Are there aspects that can be used in a broader obligation? 00:44:05.600 --> 00:44:07.160 We just need to think about this more 00:44:07.160 --> 00:44:08.270 of how it could all work together. 00:44:08.270 --> 00:44:11.713 I know that last night I read about how, 00:44:12.640 --> 00:44:14.790 some comments that were sent over, 00:44:14.790 --> 00:44:18.940 how my backstop reliability service can work with decks. 00:44:18.940 --> 00:44:23.161 I know, Chairman Lake, we've talked about that too. 00:44:23.161 --> 00:44:24.570 And I know you have your concerns. 00:44:24.570 --> 00:44:29.570 But I would like to see how we can maybe make it all work. 00:44:30.100 --> 00:44:32.477 And together. 00:44:32.477 --> 00:44:35.660 And I feel like we need some more time 00:44:35.660 --> 00:44:37.540 to get more input 00:44:38.930 --> 00:44:40.973 from not only the stakeholders, but from some, 00:44:41.940 --> 00:44:43.750 whether it's Brattle, I know Brattle, 00:44:43.750 --> 00:44:46.473 Sam expressed some deep concerns with the deck program. 00:44:48.813 --> 00:44:53.100 Nobody's had an opportunity to refute those statements, 00:44:53.100 --> 00:44:55.113 publicly in the record. 00:44:56.200 --> 00:44:58.903 But also to get more information from Sam and Brattle. 00:45:00.410 --> 00:45:03.940 My concerns, and it could be broader than 00:45:03.940 --> 00:45:05.920 just the broader LSE obligation, 00:45:05.920 --> 00:45:07.700 Chairman Lake, that you proposed, 00:45:07.700 --> 00:45:10.060 but I want to make sure that whatever we are doing 00:45:10.060 --> 00:45:14.220 to significantly modify our market 00:45:14.220 --> 00:45:17.100 is actually going to drive new dispatchable generation 00:45:17.100 --> 00:45:18.700 and maintain our existing fleet. 00:45:19.970 --> 00:45:22.683 We need every megawatt, whether it's existing or new, 00:45:23.560 --> 00:45:26.400 and I don't want any unintended consequences 00:45:26.400 --> 00:45:30.030 and I don't want to spend the next five years 00:45:30.030 --> 00:45:32.804 building something that didn't get us anywhere 00:45:32.804 --> 00:45:34.920 that we're not at today. 00:45:34.920 --> 00:45:36.650 And I want to make sure we're actually 00:45:36.650 --> 00:45:39.761 getting something meaningful for whatever we decide to do. 00:45:39.761 --> 00:45:42.611 And I think that's gonna take a little bit more analysis, 00:45:43.695 --> 00:45:45.320 some more robust feedback, 00:45:45.320 --> 00:45:47.830 and really continuing to roll up our sleeves and 00:45:49.220 --> 00:45:54.220 focus more on how all these concepts can work together. 00:45:54.310 --> 00:45:55.706 And we're just gonna need 00:45:55.706 --> 00:45:56.550 a little bit more time because if I, 00:45:56.550 --> 00:45:58.800 right now, I mean, and you know this, 00:45:58.800 --> 00:46:01.336 I have concerns about the LSE obligations but-- 00:46:01.336 --> 00:46:02.770 Yeah, I know. 00:46:02.770 --> 00:46:04.520 You got concerns about everything. 00:46:04.520 --> 00:46:06.500 Well, I mean-- And okay. 00:46:06.500 --> 00:46:07.640 Thank you. Well, that's the matter 00:46:07.640 --> 00:46:08.473 of due diligence. 00:46:08.473 --> 00:46:09.840 I mean, that is being diligent. 00:46:09.840 --> 00:46:13.000 My concern though is 00:46:13.000 --> 00:46:15.260 when in one breath you say 00:46:15.260 --> 00:46:18.830 we've got to do the backstop as a bridge now 00:46:18.830 --> 00:46:21.650 because we need solutions now, 00:46:21.650 --> 00:46:24.300 then the next breath you say, we need more time to study. 00:46:24.300 --> 00:46:26.120 We need more time to study. 00:46:26.120 --> 00:46:28.457 Well, I'm not just gonna sit here and say, 00:46:28.457 --> 00:46:31.543 ERCOT, go procure 3000 megawatts to fill a hole. 00:46:31.543 --> 00:46:33.620 The way I deliberate, 00:46:33.620 --> 00:46:35.150 the way I make policy decisions, 00:46:35.150 --> 00:46:37.580 is by making sure that I have holistic information 00:46:37.580 --> 00:46:39.870 and there's not any unintended consequences. 00:46:39.870 --> 00:46:42.489 And that is what I want to do, even with my proposal. 00:46:42.489 --> 00:46:44.280 Period. 00:46:44.280 --> 00:46:45.330 Thank you for that. 00:46:47.770 --> 00:46:48.670 Couple of thoughts 00:46:50.240 --> 00:46:52.090 in response to all of those comments. 00:46:54.850 --> 00:46:57.760 We know our actions impact the market. 00:46:57.760 --> 00:46:59.110 That's what we're here for. 00:47:00.010 --> 00:47:04.093 If actions weren't needed, none of us would be here. 00:47:05.390 --> 00:47:08.780 If things were working smoothly, none of us would be here. 00:47:08.780 --> 00:47:10.783 We wouldn't have SB3, wouldn't have SB2. 00:47:12.830 --> 00:47:15.653 Lack of action also has consequences. 00:47:16.800 --> 00:47:18.053 That is severe. 00:47:19.900 --> 00:47:24.873 And so while analysis and due diligence is important, 00:47:26.550 --> 00:47:28.513 action is also important. 00:47:30.570 --> 00:47:32.057 Endless studies will not help the people of Texas 00:47:32.057 --> 00:47:34.570 and it will not solve either one of these problems. 00:47:34.570 --> 00:47:36.060 The blue sky problem or 00:47:37.500 --> 00:47:39.913 the extreme weather event problem. 00:47:42.840 --> 00:47:47.840 The low cost of power is important to Texas. 00:47:51.040 --> 00:47:53.170 And it is a feature of our state. 00:47:53.170 --> 00:47:56.960 But it is far from the only reason people move to Texas. 00:47:56.960 --> 00:48:00.690 And I don't want good ideas to be sacrificed 00:48:00.690 --> 00:48:04.210 at the altar of no prices can ever go up. 00:48:04.210 --> 00:48:05.520 We've got a great workforce. 00:48:05.520 --> 00:48:06.840 We've got low cost of living. 00:48:06.840 --> 00:48:08.620 We've got tremendous natural resources. 00:48:08.620 --> 00:48:09.600 We have a very 00:48:12.160 --> 00:48:14.030 efficient and light touched business, 00:48:14.030 --> 00:48:15.270 regulatory environment. 00:48:15.270 --> 00:48:17.160 There are a lot of reasons people come to Texas. 00:48:17.160 --> 00:48:18.223 More than just ERCOT. 00:48:20.700 --> 00:48:24.000 As both of you said in your opening comments, 00:48:24.000 --> 00:48:27.290 the deck concept is a load obligation. 00:48:27.290 --> 00:48:28.933 It is an LSE obligation. 00:48:30.673 --> 00:48:32.060 Is there any disagreement on that? 00:48:32.060 --> 00:48:33.530 No, sir. I agree. 00:48:35.270 --> 00:48:38.280 And do you have any disagreement on that? 00:48:38.280 --> 00:48:39.113 No. 00:48:42.230 --> 00:48:43.203 In a point, 00:48:44.120 --> 00:48:45.860 at a point like this, 00:48:45.860 --> 00:48:49.150 where we know we don't have enough of a resource, 00:48:49.150 --> 00:48:50.380 at the most basic level, 00:48:50.380 --> 00:48:52.230 it's a question of supply and demand. 00:48:53.120 --> 00:48:54.930 If you don't have enough supply 00:48:54.930 --> 00:48:57.673 for the demand that you have, 00:48:58.990 --> 00:49:02.710 prices go up until the market finds equilibrium. 00:49:02.710 --> 00:49:05.230 Amount of supply matches the demand. 00:49:05.230 --> 00:49:08.620 Usually overshoots it, which drives prices back down. 00:49:08.620 --> 00:49:10.410 That's the way markets work. 00:49:10.410 --> 00:49:11.243 As you said. 00:49:12.990 --> 00:49:14.560 That's what's supposed to happen. 00:49:14.560 --> 00:49:15.860 Whether it's apples or widgets 00:49:15.860 --> 00:49:17.540 or barrels of oil or bushels of cotton. 00:49:17.540 --> 00:49:19.610 If you don't have enough of them, 00:49:19.610 --> 00:49:24.220 the higher prices are what incentivize 00:49:24.220 --> 00:49:25.860 getting more supply. 00:49:25.860 --> 00:49:28.170 On the other hand, withdrawing that supply 00:49:29.370 --> 00:49:31.960 has the same impact from the other way. 00:49:31.960 --> 00:49:33.210 You're just moving supply and demand. 00:49:33.210 --> 00:49:34.960 Which way are you going? 00:49:34.960 --> 00:49:38.250 Some version of an LSE obligation 00:49:39.230 --> 00:49:43.693 increases or requires that demand to be put there. 00:49:45.204 --> 00:49:48.014 And the deck obligation is a very narrow demand. 00:49:48.014 --> 00:49:51.090 In a broader LSE obligation, 00:49:51.090 --> 00:49:53.203 it's a much higher level of demand. 00:49:54.616 --> 00:49:57.250 In the NRG original proposal, 00:49:57.250 --> 00:50:00.743 it was 120% of total need. 00:50:02.148 --> 00:50:04.690 And my proposal was 100% of peak load, 00:50:04.690 --> 00:50:06.070 which is, I think, probably too much, 00:50:06.070 --> 00:50:08.513 which is why I'm bringing it down. 00:50:08.513 --> 00:50:11.173 I want to focus more on the net peak load. 00:50:12.480 --> 00:50:13.440 But at the end of the day, 00:50:13.440 --> 00:50:16.280 it's a matter of supply and demand and 00:50:17.150 --> 00:50:21.340 I don't want to sacrifice reliability 00:50:22.550 --> 00:50:25.403 for fear of temporarily raising prices. 00:50:27.290 --> 00:50:30.570 Because that'll dig us deeper in this hole 00:50:30.570 --> 00:50:32.220 and not solve the problem at all. 00:50:35.230 --> 00:50:40.230 And I think we can all agree that in any LSE obligation, 00:50:41.300 --> 00:50:44.820 there are market power control problems. 00:50:44.820 --> 00:50:45.653 Agreed? 00:50:47.500 --> 00:50:48.333 There can be. 00:50:48.333 --> 00:50:49.780 There's a potential for it, yeah? 00:50:49.780 --> 00:50:52.253 Yeah on, well, I'll let you finish, sir. 00:50:53.090 --> 00:50:55.880 Including in a deck construct. 00:50:55.880 --> 00:50:59.870 There's a possibility for market power problems 00:50:59.870 --> 00:51:03.690 if the same people have the supply of power that 00:51:03.690 --> 00:51:05.210 they can withhold from people. 00:51:05.210 --> 00:51:08.620 It's a smaller percentage under the existing framework, 00:51:08.620 --> 00:51:11.003 but it's the same challenge. 00:51:12.057 --> 00:51:13.980 Withholding's a possibility, 00:51:13.980 --> 00:51:15.920 self-dealing's a possibility. 00:51:15.920 --> 00:51:18.745 If the same people that are creating the decks 00:51:18.745 --> 00:51:21.293 are the ones that need to buy it. 00:51:22.944 --> 00:51:26.440 It's the same principle of a problem. 00:51:26.440 --> 00:51:27.273 Yes? 00:51:27.273 --> 00:51:28.106 So. 00:51:29.200 --> 00:51:31.500 I'm not saying it can't be mitigated in any of those, 00:51:31.500 --> 00:51:34.874 but it's just, it can be mitigated in any 00:51:34.874 --> 00:51:37.489 LSE obligation. Framework, yes. 00:51:37.489 --> 00:51:39.387 Yeah, just to remember, sir. 00:51:39.387 --> 00:51:45.640 So in a new concept, nobody's there yet. 00:51:45.640 --> 00:51:47.120 Nobody's got the market power. 00:51:47.120 --> 00:51:48.460 So it's starting from scratch. 00:51:48.460 --> 00:51:51.500 And again, if you're only building to meet growth, 00:51:51.500 --> 00:51:54.700 and we're talking about five gigs or something like that, 00:51:54.700 --> 00:51:58.150 that's a small, that is less than Vistra's 20% cap 00:51:58.150 --> 00:52:01.860 right now in terms of total manipulative power 00:52:01.860 --> 00:52:02.930 in the market. 00:52:02.930 --> 00:52:06.400 So this is well within the spectrum of our IMM 00:52:07.410 --> 00:52:09.840 to catch and mitigate. 00:52:09.840 --> 00:52:12.530 But I agree, all your points. Sure, just like NRG's got 00:52:12.530 --> 00:52:14.190 twice as much load as they do gen, 00:52:14.190 --> 00:52:16.180 so they're gonna have to buy it from somebody else. 00:52:16.180 --> 00:52:17.350 So there's just as much, 00:52:17.350 --> 00:52:20.130 they're just as vulnerable to market manipulation 00:52:20.130 --> 00:52:22.510 as they would be theoretically capable of it. 00:52:22.510 --> 00:52:24.702 Yes, sir, if they could build a new power plant, 00:52:24.702 --> 00:52:26.306 that'd be great and then-- 00:52:26.306 --> 00:52:27.350 I mean, they're below their 20% cap. 00:52:27.350 --> 00:52:28.700 I know. 00:52:28.700 --> 00:52:29.696 They could build a new-- So they could build 00:52:29.696 --> 00:52:30.529 a new power plant under the deck program, 00:52:30.529 --> 00:52:33.970 which is in the same opportunity for self-dealing. 00:52:33.970 --> 00:52:36.320 So I want to make sure we're not pretending 00:52:36.320 --> 00:52:39.896 one version of an LSE obligation 00:52:39.896 --> 00:52:43.870 has market manipulation concerns but another one doesn't. 00:52:43.870 --> 00:52:45.500 Different scale, is that-- 00:52:45.500 --> 00:52:46.826 That's fair, sir. Fair? 00:52:46.826 --> 00:52:48.747 Fair? Yeah, oh yeah. 00:52:48.747 --> 00:52:50.171 Fair? 00:52:50.171 --> 00:52:51.223 Sure. 00:52:55.530 --> 00:52:57.530 As I said at the beginning, 00:52:57.530 --> 00:53:00.540 there are a lot of elements of the deck proposal 00:53:00.540 --> 00:53:03.713 I think are immensely valuable. 00:53:04.590 --> 00:53:07.813 And I know we've covered that ad nauseum. 00:53:10.200 --> 00:53:13.280 The reason I didn't include those, 00:53:13.280 --> 00:53:14.890 I still have them here, 00:53:14.890 --> 00:53:16.710 I would have liked to have them here, 00:53:16.710 --> 00:53:19.430 is, and this is the question to you. 00:53:19.430 --> 00:53:23.080 Are you willing to consider changes to the deck proposal 00:53:23.080 --> 00:53:24.720 as it currently exists? 00:53:24.720 --> 00:53:26.423 Or is it a take it or leave it, 00:53:27.910 --> 00:53:29.910 we can only do this version of the deck? 00:53:30.780 --> 00:53:31.613 Oh no. 00:53:31.613 --> 00:53:33.800 I mean, I've framed it as 00:53:33.800 --> 00:53:36.520 I need feedback from market participants 00:53:36.520 --> 00:53:39.800 on how this thing can function moving forward. 00:53:39.800 --> 00:53:41.710 So open. 00:53:41.710 --> 00:53:43.872 I mean, whack away at it. 00:53:43.872 --> 00:53:44.873 Where are we gonna-- I don't want to 00:53:44.873 --> 00:53:46.707 whack away at it. 00:53:46.707 --> 00:53:49.640 I want to, because the last I heard from you, 00:53:49.640 --> 00:53:52.390 it was take it or leave it as it exists. 00:53:52.390 --> 00:53:55.130 And it's good to hear that that's not the case. 00:53:55.130 --> 00:53:57.900 It was over the nuance of new versus existing, sir. 00:53:57.900 --> 00:53:59.070 And I would just argue, 00:53:59.070 --> 00:54:01.047 the more existing you get out there, 00:54:01.047 --> 00:54:04.610 the less potency and effect you have for your decks. 00:54:04.610 --> 00:54:08.710 And again, the timely installation of new generation. 00:54:08.710 --> 00:54:10.360 That's the whole reason. Sure. 00:54:11.347 --> 00:54:14.563 And I'm perfectly, I mean, 00:54:14.563 --> 00:54:16.740 there's a sizing concern 00:54:18.120 --> 00:54:20.633 that I have with just 5,000 megawatts here, 00:54:20.633 --> 00:54:22.453 5,000 megawatts there. 00:54:23.400 --> 00:54:26.550 Doesn't solve a 67,000 megawatt problem. 00:54:26.550 --> 00:54:30.360 You still got 40 or 50,000 megawatts out there that 00:54:30.360 --> 00:54:32.350 can be stripped down and sold for parts 00:54:32.350 --> 00:54:34.120 or moved to South America or Africa 00:54:34.120 --> 00:54:36.160 where they don't have emissions concerns. 00:54:36.160 --> 00:54:37.210 Happens all the time. 00:54:38.970 --> 00:54:40.310 And so that's a concern. 00:54:40.310 --> 00:54:42.010 We don't have to solve that today. 00:54:43.010 --> 00:54:44.430 I know we've had the conversation. 00:54:44.430 --> 00:54:46.030 Good, 'cause I don't have the answer today. 00:54:46.030 --> 00:54:47.017 Trust me, so. 00:54:48.500 --> 00:54:51.407 But the key point is, 00:54:51.407 --> 00:54:52.957 and I think we've talked about, 00:54:54.950 --> 00:54:57.230 the decks are probably too small. 00:54:57.230 --> 00:54:58.810 E3's proposal's way too big. 00:54:58.810 --> 00:55:00.903 My proposal was too big. 00:55:01.780 --> 00:55:03.690 So I don't know what the right answer is, 00:55:03.690 --> 00:55:06.330 but I think it's somewhere in the middle. 00:55:06.330 --> 00:55:07.720 And so that's a question, 00:55:07.720 --> 00:55:09.390 another question for you, 00:55:09.390 --> 00:55:12.980 is in utilizing the features of a deck program, 00:55:12.980 --> 00:55:17.980 is sizing and open to adjustment? 00:55:20.310 --> 00:55:21.890 Yes, sir. 00:55:21.890 --> 00:55:24.330 And I think that drives at a central point. 00:55:24.330 --> 00:55:25.933 We develop a target. 00:55:26.910 --> 00:55:30.550 What we've got to bring on to this system 00:55:30.550 --> 00:55:32.240 to meet load growth 00:55:32.240 --> 00:55:35.068 and actually develop a process for that. 00:55:35.068 --> 00:55:37.510 And I think that is incumbent. That's one of the virtues, 00:55:37.510 --> 00:55:39.930 one of the attributes of this proposal, 00:55:39.930 --> 00:55:40.770 is that we do that. 00:55:40.770 --> 00:55:42.160 It's in both. 00:55:42.160 --> 00:55:45.883 So yeah, and to answer your question sir, I'm open. 00:55:47.420 --> 00:55:48.330 Good to hear. 00:55:48.330 --> 00:55:49.163 Thank you. 00:55:50.327 --> 00:55:51.353 At the highest level. 00:55:55.280 --> 00:55:59.060 You stated earlier that you believe whatever solution, 00:55:59.060 --> 00:56:04.060 the reliability mechanism we eventually settle on 00:56:04.610 --> 00:56:06.000 needs to come on the load side. 00:56:06.000 --> 00:56:07.620 Yes, sir. 00:56:07.620 --> 00:56:10.370 So it sounds like you're willing to commit 00:56:10.370 --> 00:56:12.380 to developing a load side mechanism. 00:56:12.380 --> 00:56:14.330 Yes, sir. Of some form or fashion. 00:56:16.050 --> 00:56:17.700 Is that fair? That is correct. 00:56:18.870 --> 00:56:19.703 I'm the same. 00:56:21.840 --> 00:56:23.620 Yes, I mean, 00:56:23.620 --> 00:56:25.447 I just need more time to evaluate what that would look like. 00:56:25.447 --> 00:56:28.300 I'm not saying which one it is, but. 00:56:28.300 --> 00:56:32.010 So just as importantly as we're saying that 00:56:32.010 --> 00:56:34.880 is we're taking curtailment or load 00:56:34.880 --> 00:56:37.430 or generation fleet firming standard off the table. 00:56:38.330 --> 00:56:39.330 If we're all gonna commit 00:56:39.330 --> 00:56:42.319 to a load side reliability mechanism, 00:56:42.319 --> 00:56:46.810 means we're not gonna focus on the gen side. 00:56:46.810 --> 00:56:47.700 Correct, sir. 00:56:47.700 --> 00:56:49.270 With the caveat, 'cause I don't want hem you in 00:56:49.270 --> 00:56:50.800 and managing the grid moving forward. 00:56:50.800 --> 00:56:52.559 I mean, if there's so much solar coming on 00:56:52.559 --> 00:56:56.500 that reliability becomes an issue, curtailment is always. 00:56:56.500 --> 00:56:58.000 Sure, thank you. But yes. 00:57:00.380 --> 00:57:01.760 Okay. 00:57:01.760 --> 00:57:06.200 So that's, I mean, I think right there, that's a big, 00:57:06.200 --> 00:57:07.480 if we're all willing to commit to 00:57:07.480 --> 00:57:10.050 a load side reliability mechanism, 00:57:10.050 --> 00:57:11.363 that's a substantial step. 00:57:12.740 --> 00:57:14.106 Yeah? 00:57:14.106 --> 00:57:15.856 As long as it's all encompassing. 00:57:16.970 --> 00:57:19.630 In terms of all of the resources that are available 00:57:19.630 --> 00:57:20.920 to participate in. Yep, I mean, 00:57:20.920 --> 00:57:23.870 these are the principles that I want to start checking off. 00:57:26.748 --> 00:57:29.080 I'm willing to commit, in the meantime, 00:57:29.080 --> 00:57:31.573 to the fastest possible version of a backstop. 00:57:33.420 --> 00:57:34.920 The closer we can get it to a, 00:57:35.940 --> 00:57:39.063 not a wreck, but a black start framework. 00:57:41.310 --> 00:57:44.050 Not to address the entire problem, but as a backstop, 00:57:44.050 --> 00:57:48.040 I'm willing to do that or commit to developing that. 00:57:48.040 --> 00:57:51.521 Ask ERCOT to, all of these are us asking ERCOT to develop 00:57:51.521 --> 00:57:54.249 a product or a series or an option, 00:57:54.249 --> 00:57:56.043 a menu of options. 00:57:57.540 --> 00:57:59.049 I'm willing to do that. 00:57:59.049 --> 00:58:00.550 Okay, and I'm willing to commit, 00:58:00.550 --> 00:58:01.700 I know we will all look at it, 00:58:01.700 --> 00:58:03.900 but I'm willing to work with ERCOT personally 00:58:03.900 --> 00:58:06.830 and Brattle and all the stakeholders as well to make sure, 00:58:06.830 --> 00:58:09.360 I know I laid out some parameters, 00:58:09.360 --> 00:58:11.370 but to make sure that I refine it in a way 00:58:11.370 --> 00:58:15.370 that provides meaningful reliability while we 00:58:15.370 --> 00:58:18.154 get some kind of a load obligation in place. 00:58:18.154 --> 00:58:22.290 And that maintains your liability in the near term. 00:58:22.290 --> 00:58:26.160 So I'm fully committed to doing that. 00:58:26.160 --> 00:58:27.710 Thank you. 00:58:27.710 --> 00:58:29.320 Will, I mean, Will and Jimmy. 00:58:29.320 --> 00:58:30.250 Yes, sir. Well, you've got some 00:58:30.250 --> 00:58:32.050 hesitations about, I know you expressed 00:58:32.050 --> 00:58:33.793 some concerns about developing, 00:58:34.690 --> 00:58:36.620 pulling supply out when we need supply, which-- 00:58:36.620 --> 00:58:38.080 It's just, I have two concerns. 00:58:38.080 --> 00:58:39.850 One of them is about pulling out supply, 00:58:39.850 --> 00:58:42.540 but I'm willing to look at the numbers behind it. 00:58:42.540 --> 00:58:44.740 There is a component of supply 00:58:44.740 --> 00:58:46.710 that doesn't get dispatched on a daily basis. 00:58:46.710 --> 00:58:47.650 I understand that. 00:58:47.650 --> 00:58:49.760 So I don't know what the market impact is. 00:58:49.760 --> 00:58:51.430 If it doesn't have a market impact, 00:58:51.430 --> 00:58:54.340 I'd be willing to look at it more, for sure. 00:58:54.340 --> 00:58:56.700 If it has a major market impact then 00:58:59.080 --> 00:59:00.220 I think there just has to be more 00:59:00.220 --> 00:59:02.130 analysis and discussion about it. 00:59:02.130 --> 00:59:04.643 The other thing is I'm getting, 00:59:06.830 --> 00:59:08.330 I feel like I'm getting whiplashed here 00:59:08.330 --> 00:59:10.420 with all of these new products that we're creating 00:59:10.420 --> 00:59:11.743 and all of this new, 00:59:13.334 --> 00:59:16.340 ERCOT's doing obviously black start and 00:59:17.420 --> 00:59:18.620 some ancillary services. 00:59:18.620 --> 00:59:22.620 We're adding more, we've got ERS, firm fuel, backstop, 00:59:22.620 --> 00:59:24.610 all, I mean, God forbid. 00:59:24.610 --> 00:59:26.460 I almost feel like we're creating niche markets 00:59:26.460 --> 00:59:28.010 instead of one big market. 00:59:28.010 --> 00:59:29.900 I tell you, if anything happens after this, 00:59:29.900 --> 00:59:31.050 I mean, it's a miracle. 00:59:31.050 --> 00:59:33.420 I mean, it's a sign from God that 00:59:34.610 --> 00:59:37.130 something's definitely wrong with the whole system. 00:59:37.130 --> 00:59:38.130 I mean. 00:59:38.130 --> 00:59:40.890 So all I'm saying is I hope in this, 00:59:40.890 --> 00:59:42.930 we're not cannibalizing our own system 00:59:42.930 --> 00:59:45.520 and we're doing good for markets, 00:59:45.520 --> 00:59:48.170 doing good for the products that we need for markets, 00:59:48.170 --> 00:59:49.510 as opposed to not. 00:59:49.510 --> 00:59:50.470 Oh, agreed. But I can't get 00:59:50.470 --> 00:59:51.303 the whole thing around, 00:59:51.303 --> 00:59:52.710 I can't wrap my head around 00:59:52.710 --> 00:59:55.160 all of these new products this quickly. 00:59:55.160 --> 00:59:56.617 Well, Commissioner Glotfelty, 00:59:56.617 --> 00:59:58.160 and I understand what you're saying, 00:59:58.160 --> 01:00:00.050 but for instance, the firm fuel product, 01:00:00.050 --> 01:00:03.780 I mean, that is our effort to try to make sure 01:00:03.780 --> 01:00:05.170 we have enough fuel available. 01:00:05.170 --> 01:00:06.610 That was a significant part of the megawatts 01:00:06.610 --> 01:00:08.050 we lost during the winter. 01:00:08.050 --> 01:00:10.440 Ultimately, that standalone product could get 01:00:10.440 --> 01:00:11.920 rolled into a broader concept 01:00:12.940 --> 01:00:15.130 and that's the way we have been discussing it. 01:00:15.130 --> 01:00:19.243 And so that's just one piece of it there. 01:00:20.360 --> 01:00:21.890 The ancillary services, 01:00:21.890 --> 01:00:24.240 ECRS is something that's been in the oven for awhile. 01:00:24.240 --> 01:00:26.280 I mean, that wasn't our decision. 01:00:26.280 --> 01:00:27.920 ERCOT decided to move forward with it 01:00:27.920 --> 01:00:30.240 and it will serve a very good purpose in the future 01:00:30.240 --> 01:00:32.700 when we have to address more ramping issues 01:00:32.700 --> 01:00:36.643 as more solar comes on the system, hopefully with storage. 01:00:38.070 --> 01:00:43.070 But I think that every action on our consensus item, 01:00:43.273 --> 01:00:44.780 and even the broader concepts 01:00:44.780 --> 01:00:46.227 that we're evaluating right now, 01:00:46.227 --> 01:00:48.860 are really intended to either address 01:00:48.860 --> 01:00:51.250 specific reliability issues that we've experienced 01:00:51.250 --> 01:00:52.350 and may continue to have in the future 01:00:52.350 --> 01:00:54.212 if we don't take action, 01:00:54.212 --> 01:00:58.490 but also to remain vigilant and diligent about 01:00:58.490 --> 01:01:02.850 continuing to review long-term changes that 01:01:03.740 --> 01:01:05.920 we may need in the future. 01:01:05.920 --> 01:01:08.037 I think we are, I think what you're saying is, 01:01:08.037 --> 01:01:10.760 and I tend to agree with what you're saying, I think, 01:01:10.760 --> 01:01:12.700 and I'm not gonna put words in your mouth but 01:01:12.700 --> 01:01:14.050 there's a lot of pancaking. 01:01:15.180 --> 01:01:17.080 Good word. We're pancaking. 01:01:17.080 --> 01:01:19.630 And I think if we're able to 01:01:21.220 --> 01:01:26.220 work to get in place a effective conservative backstop 01:01:27.090 --> 01:01:30.233 and continue to evaluate this obligation, 01:01:31.760 --> 01:01:35.310 then we can maybe buy the market some time to breathe 01:01:35.310 --> 01:01:37.660 and kind of adjust to everything 01:01:37.660 --> 01:01:38.493 we're putting in the market. 01:01:38.493 --> 01:01:40.950 And then we could take that analysis into consideration 01:01:40.950 --> 01:01:43.853 as we're formulating more long-term policy. 01:01:44.730 --> 01:01:47.230 That's what I'm thinking, just generally speaking. 01:01:48.150 --> 01:01:49.773 Absolutely fair concerns. 01:01:51.905 --> 01:01:52.760 But if we're gonna get it wrong, 01:01:52.760 --> 01:01:56.093 I'd rather have too much reliability rather than not enough. 01:01:57.740 --> 01:01:59.640 Can be very expensive. 01:01:59.640 --> 01:02:03.280 And that's why it's important that we ensure all 01:02:04.530 --> 01:02:06.520 resources are treated equally 01:02:06.520 --> 01:02:08.210 and that the market mechanism 01:02:08.210 --> 01:02:11.023 as articulated in the deck program is self-correcting. 01:02:11.950 --> 01:02:14.223 So if we do mess with too much supply, 01:02:16.704 --> 01:02:19.230 cure for high prices is high prices. 01:02:19.230 --> 01:02:20.813 Well, when you say we, 01:02:22.277 --> 01:02:24.170 I don't remember what you exactly said just a second ago, 01:02:24.170 --> 01:02:28.023 but it made me think about the assignment of costs. 01:02:29.500 --> 01:02:31.580 I've said numerous times that 01:02:32.660 --> 01:02:37.500 I am very opposed to assigning costs. 01:02:37.500 --> 01:02:41.310 We have done things in this market for years 01:02:41.310 --> 01:02:44.560 where we do it for the good of all Texans. 01:02:44.560 --> 01:02:45.920 If we're gonna sign transmission costs, 01:02:45.920 --> 01:02:49.230 we've got to go back and do it for every single generator. 01:02:49.230 --> 01:02:51.860 We've got to, if we're gonna assign reliability costs, 01:02:51.860 --> 01:02:54.390 we're gonna have to do it for the peak of the day. 01:02:54.390 --> 01:02:56.550 When that gas fired power plant trips 01:02:56.550 --> 01:02:58.950 or that nuclear plant trips, guess what? 01:02:58.950 --> 01:03:00.300 It's gonna be painful. 01:03:00.300 --> 01:03:02.780 It's gonna be very painful for that resource. 01:03:02.780 --> 01:03:04.270 And that's why I'm opposed to it 01:03:04.270 --> 01:03:07.130 because I think reliability spread out 01:03:07.130 --> 01:03:09.540 across the entire system of consumers 01:03:09.540 --> 01:03:12.110 is a lower cost to every single one of them 01:03:12.110 --> 01:03:14.620 than it is to assigning a cost to somebody 01:03:14.620 --> 01:03:17.870 that doesn't say they're gonna pay, they're gonna, 01:03:17.870 --> 01:03:20.510 that does not commit they're gonna provide it 01:03:20.510 --> 01:03:22.610 and is not getting paid to provide it. 01:03:22.610 --> 01:03:24.020 And then we're gonna tag them and say, 01:03:24.020 --> 01:03:27.140 well, you get tagged because you're not providing something 01:03:27.140 --> 01:03:28.660 that you say you're gonna, 01:03:28.660 --> 01:03:31.890 you don't even say you're gonna provide the market. 01:03:31.890 --> 01:03:35.070 Providing voltage support is a market. 01:03:35.070 --> 01:03:36.700 There are companies that can go provide. 01:03:36.700 --> 01:03:40.280 You can put in all sorts of equipment to provide voltage. 01:03:40.280 --> 01:03:43.590 That doesn't mean that cost has to be borne by a generator. 01:03:43.590 --> 01:03:45.910 It doesn't, so I'm just, 01:03:45.910 --> 01:03:48.320 that's the one thing in your memo that 01:03:48.320 --> 01:03:50.386 I'm very passionate about as you, as you can see. 01:03:50.386 --> 01:03:51.400 I know. 01:03:52.360 --> 01:03:55.763 And that's where I would have a big concern. 01:03:56.620 --> 01:03:58.020 But in that same, 01:03:58.020 --> 01:04:00.563 Commissioner, respect your thoughts on this. 01:04:02.130 --> 01:04:05.510 But again, the legislature spoke. 01:04:05.510 --> 01:04:07.940 I mean, the statute, the debate, 01:04:07.940 --> 01:04:09.740 it all led in that direction. 01:04:09.740 --> 01:04:11.853 So when I look at it, 01:04:11.853 --> 01:04:14.600 I'm just trying to do what the 181 folks 01:04:14.600 --> 01:04:16.150 and the Governor said. 01:04:16.150 --> 01:04:18.560 In writing, they actually put it in writing, 01:04:18.560 --> 01:04:19.780 which is reassuring. 01:04:19.780 --> 01:04:20.680 I appreciate that. 01:04:24.520 --> 01:04:27.960 If you look at that background and all the debate, 01:04:27.960 --> 01:04:32.960 it was oriented on a set of resources that they felt, 01:04:33.910 --> 01:04:35.930 all right, they needed to pay a portion 01:04:35.930 --> 01:04:37.480 to get their product to market. 01:04:38.770 --> 01:04:40.283 But yeah, I hear you, sir. 01:04:43.770 --> 01:04:44.803 Well articulated. 01:04:46.500 --> 01:04:50.930 And we're not all going to agree on everything every day. 01:04:50.930 --> 01:04:52.480 Reasonable people can disagree. 01:04:53.690 --> 01:04:55.340 Think we've hit it out of the park on disagreeing 01:04:55.340 --> 01:04:57.573 so far these last few months. 01:04:58.980 --> 01:05:02.143 We have agreed on a lot of important things. (laughs) 01:05:03.334 --> 01:05:05.210 Like I said, well articulated. 01:05:05.210 --> 01:05:06.660 You know how I feel about it. 01:05:07.640 --> 01:05:10.410 In the absence of a new resource 01:05:10.410 --> 01:05:13.920 that has 100% correlation of dropping out, 01:05:13.920 --> 01:05:15.343 none of this would be a problem. 01:05:17.472 --> 01:05:19.083 But voltage and quick ramping. 01:05:21.150 --> 01:05:25.970 And that's an ECRS product that's 18 to 24 months away. 01:05:25.970 --> 01:05:27.550 So we don't need to solve that today. 01:05:27.550 --> 01:05:31.090 Actually, the program is 18 to 24 months away, 01:05:31.090 --> 01:05:34.410 but the products are on the grid today. 01:05:34.410 --> 01:05:36.810 The resources are coming on very fast. 01:05:36.810 --> 01:05:39.672 They will be here way ahead of ECRS. 01:05:39.672 --> 01:05:40.505 The intermittence. 01:05:40.505 --> 01:05:44.330 Well, the batteries and the other voltage components 01:05:44.330 --> 01:05:46.720 that can help voltage across the system 01:05:46.720 --> 01:05:49.250 and that can provide other ancillary services. 01:05:49.250 --> 01:05:51.550 They're gonna be here before their product is. 01:05:53.010 --> 01:05:53.843 Sure. 01:05:58.043 --> 01:06:00.910 I've heard ad nauseum about how intermittence 01:06:00.910 --> 01:06:04.840 can provide voltage supportive if appropriately outfitted. 01:06:04.840 --> 01:06:08.290 And I look forward to them implementing those technologies. 01:06:08.290 --> 01:06:10.050 In which case they would not be responsible 01:06:10.050 --> 01:06:11.650 for the cost of voltage support. 01:06:12.990 --> 01:06:16.467 Voltage support, again, as I in most markets-- 01:06:17.380 --> 01:06:18.213 Sorry, no. 01:06:18.213 --> 01:06:19.860 We pay for voltage support. 01:06:19.860 --> 01:06:21.587 We pay for VARS. 01:06:21.587 --> 01:06:24.910 We pay for VARS which come from 01:06:26.190 --> 01:06:29.763 large thermal generating plants, nuclear plants. 01:06:30.740 --> 01:06:32.430 But we paid for them for a reason. 01:06:32.430 --> 01:06:34.790 And that's because you have to reduce 01:06:34.790 --> 01:06:37.890 the amount of real energy you're producing 01:06:37.890 --> 01:06:40.220 on the system to produce VARS. 01:06:40.220 --> 01:06:42.950 You produce VARS to allow the transmission system 01:06:42.950 --> 01:06:45.420 to capture those and move those. 01:06:45.420 --> 01:06:47.330 So what you're doing is you're compensating 01:06:47.330 --> 01:06:49.330 for a reduction of real energy 01:06:49.330 --> 01:06:51.080 that could be sold into the market. 01:06:52.470 --> 01:06:54.300 That's why you're doing it. 01:06:54.300 --> 01:06:56.963 And that is, 01:06:57.860 --> 01:07:00.093 to me, voltage support is a common good. 01:07:01.520 --> 01:07:03.340 Nobody does great unless we pay for it. 01:07:03.340 --> 01:07:05.823 It's not assigned to, if we pay for it, 01:07:07.810 --> 01:07:10.143 that is a huge step forward. 01:07:14.200 --> 01:07:17.640 But there is a market there for entity. 01:07:17.640 --> 01:07:19.490 Someone could go put on a synchronous condenser 01:07:19.490 --> 01:07:23.250 and get paid for voltage support if economics worked. 01:07:23.250 --> 01:07:24.300 And that would be it. 01:07:27.990 --> 01:07:30.130 So that's why I think what we're doing 01:07:30.130 --> 01:07:33.550 is telling somebody to do something that they don't, 01:07:33.550 --> 01:07:35.380 they are never committing to do. 01:07:35.380 --> 01:07:37.050 So with that, Commissioner, 01:07:37.050 --> 01:07:40.210 do you believe it would be fair 01:07:41.720 --> 01:07:44.623 and legal, which would be great to have both, 01:07:47.520 --> 01:07:50.630 if a intermittent resource that does not provide 01:07:50.630 --> 01:07:55.460 on the face of its own generation capability, 01:07:55.460 --> 01:07:58.120 if they were paired with a system of batteries 01:07:58.120 --> 01:07:59.760 or whatever technology was available 01:07:59.760 --> 01:08:02.460 to where they could provide their own voltage support, 01:08:03.310 --> 01:08:06.840 could they be exempted from the cost causation? 01:08:06.840 --> 01:08:08.264 Maybe, maybe. 01:08:08.264 --> 01:08:09.375 Something to think about. Tariff or whatever. 01:08:09.375 --> 01:08:10.740 Something to think about. Okay, all right. 01:08:10.740 --> 01:08:11.573 Got it. 01:08:12.830 --> 01:08:15.810 So how would we implement the voltage support? 01:08:15.810 --> 01:08:17.530 Is that through a rulemaking 01:08:17.530 --> 01:08:20.720 or what process would we use to compensate, I guess? 01:08:20.720 --> 01:08:24.093 Initial thought is to direct ERCOT to develop a product, 01:08:25.160 --> 01:08:27.200 both operational need 01:08:30.090 --> 01:08:33.933 and mechanism of implementation, 01:08:35.350 --> 01:08:39.623 and the cost assignment and settlement of that cost. 01:08:41.110 --> 01:08:43.010 With any of these, we'd ask them to go 01:08:43.010 --> 01:08:46.560 develop such a product or give us two or three options 01:08:46.560 --> 01:08:47.670 of what it could look like 01:08:47.670 --> 01:08:49.933 and then we'd evaluate and iterate from there. 01:08:52.484 --> 01:08:54.470 And I think that's-- I think Brattle, 01:08:54.470 --> 01:08:56.580 forgive me if I'm saying this out of school, 01:08:56.580 --> 01:08:58.000 but I think Brattle was looking 01:08:58.000 --> 01:09:00.360 and was gonna provide us with some of the examples 01:09:00.360 --> 01:09:03.890 that other markets, how they pay for voltage and 01:09:04.960 --> 01:09:06.653 they were gonna do that. 01:09:06.653 --> 01:09:08.960 Is that in process? 01:09:08.960 --> 01:09:10.410 It can be in process? Yes. 01:09:11.318 --> 01:09:13.470 Usually not a market product but compensated. 01:09:13.470 --> 01:09:15.370 Compensated product, that's correct. 01:09:16.280 --> 01:09:17.600 All right. 01:09:17.600 --> 01:09:19.617 We'll look forward to that, Sam, thank you. 01:09:22.350 --> 01:09:23.183 Okay. 01:09:24.080 --> 01:09:24.913 Thank you. 01:09:29.440 --> 01:09:33.440 Right now we've thus far agreed to 01:09:35.160 --> 01:09:37.410 develop a load side reliability mechanism 01:09:37.410 --> 01:09:38.713 of some form or fashion, 01:09:39.550 --> 01:09:42.940 based on principles that will articulate and 01:09:44.920 --> 01:09:46.853 agree to incorporate here shortly. 01:09:49.510 --> 01:09:52.690 I think we're all in support of 01:09:52.690 --> 01:09:57.163 developing a backstop mechanism in the meantime. 01:09:59.030 --> 01:10:00.137 Is that something you-- 01:10:00.137 --> 01:10:01.890 I'd look at, absolutely. 01:10:01.890 --> 01:10:03.740 Okay, not there yet but-- 01:10:03.740 --> 01:10:05.192 Not there yet but absolutely look at. 01:10:05.192 --> 01:10:06.540 Okay. 01:10:06.540 --> 01:10:08.940 So we're three out of four on that one. 01:10:08.940 --> 01:10:10.690 That's fair. 01:10:15.525 --> 01:10:17.760 I'm just gonna work backwards up here. 01:10:17.760 --> 01:10:18.963 Firm fuel product. 01:10:19.960 --> 01:10:23.860 We all agree to commit to developing a firm fuel product. 01:10:23.860 --> 01:10:25.040 Mm-hmm. 01:10:25.040 --> 01:10:25.873 Yes. Yes, sir. 01:10:25.873 --> 01:10:28.290 On the general frameworks in this memo. 01:10:28.290 --> 01:10:29.583 Yes, sir. Yes. 01:10:31.020 --> 01:10:32.310 Voltage support product 01:10:34.000 --> 01:10:35.560 in process with Brattle. 01:10:35.560 --> 01:10:38.850 In principle, I'm hearing we all agree to develop 01:10:38.850 --> 01:10:40.023 some form of that. 01:10:41.030 --> 01:10:44.410 Cost assignment and settlement to be determined, 01:10:44.410 --> 01:10:46.900 pending analysis of other 01:10:48.330 --> 01:10:49.740 analog options and 01:10:52.600 --> 01:10:53.550 look at what, 01:10:53.550 --> 01:10:55.013 examination of what that would look like in our market. 01:10:55.013 --> 01:10:56.786 Yes, absolutely. Agreed? 01:10:56.786 --> 01:10:57.619 Agreed. Agreed. 01:10:57.619 --> 01:10:59.023 Agreed? Agreed? Yes. 01:11:00.250 --> 01:11:02.820 Fast frequency response, ECRS in process. 01:11:02.820 --> 01:11:05.180 Anybody want to stop them in process? 01:11:05.180 --> 01:11:06.460 No. 01:11:06.460 --> 01:11:07.293 Accelerate if we could. 01:11:08.536 --> 01:11:11.913 On costs on that? On costs on ECRS. 01:11:14.360 --> 01:11:15.309 Same thing. 01:11:15.309 --> 01:11:16.800 (laughing) Sorry. 01:11:16.800 --> 01:11:18.172 Well, I think we'd have to have a rulemaking 01:11:18.172 --> 01:11:21.210 'cause of the SB3 language we need to implement. 01:11:21.210 --> 01:11:22.510 SB3 has clear language and 01:11:24.520 --> 01:11:26.610 we can open up a rulemaking project next year 01:11:26.610 --> 01:11:27.490 and get that rolling. 01:11:27.490 --> 01:11:28.433 Okay, so. 01:11:29.970 --> 01:11:32.690 Don't take it, either one of those off the table, 01:11:32.690 --> 01:11:34.273 accelerate if possible. 01:11:37.040 --> 01:11:39.200 Cost allocation, a cost assignment 01:11:40.340 --> 01:11:43.960 to be discussed as part of rulemaking for 01:11:43.960 --> 01:11:46.910 in compliance with SB, implementation with SB3, yeah? 01:11:46.910 --> 01:11:48.010 Agreed? Yep. 01:11:48.010 --> 01:11:50.210 Agreed? Agreed? All right. 01:11:50.210 --> 01:11:52.520 ERS reform, I think we've already done most of that. 01:11:52.520 --> 01:11:55.330 We've got to have to tighten it up with the rule next year 01:11:55.330 --> 01:11:58.600 but the good cause exception has done that. 01:11:58.600 --> 01:12:00.600 All right, nobody wants to reverse that? 01:12:03.420 --> 01:12:04.593 Demand response. 01:12:08.650 --> 01:12:10.323 So all the LMP pricing. 01:12:12.940 --> 01:12:16.270 Anybody opposed to asking ERCOT to move in that direction? 01:12:16.270 --> 01:12:17.654 No, I like it. 01:12:17.654 --> 01:12:19.090 I felt it was handled. Okay. 01:12:19.090 --> 01:12:20.270 Sure. I'm for it. 01:12:20.270 --> 01:12:21.103 Okay. 01:12:22.070 --> 01:12:24.190 Energy efficiency performance standards. 01:12:24.190 --> 01:12:25.340 Getting more bang for our buck 01:12:25.340 --> 01:12:27.203 out of the same allocated dollars. 01:12:28.360 --> 01:12:30.730 Strong supporter of opening up that rule for rulemaking 01:12:30.730 --> 01:12:32.320 and making sure we're getting 01:12:32.320 --> 01:12:34.520 a return on our investment rate payer money. 01:12:35.660 --> 01:12:37.290 This is great, I'm all about it. 01:12:37.290 --> 01:12:39.220 We need to open up that rule. 01:12:39.220 --> 01:12:40.170 I'm just looking at some of the people 01:12:40.170 --> 01:12:41.490 who are gonna be involved in that rulemaking. 01:12:41.490 --> 01:12:43.683 Oh yeah. This is great. 01:12:43.683 --> 01:12:44.516 Have to 01:12:44.516 --> 01:12:46.387 beat them off with this. My comments from earlier 01:12:46.387 --> 01:12:47.350 in the open meeting, 01:12:47.350 --> 01:12:51.465 you can probably assume that I'm for that. 01:12:51.465 --> 01:12:52.830 Mm-hmm. (laughs) 01:12:52.830 --> 01:12:54.940 Yeah, I picked up on that. 01:12:54.940 --> 01:12:56.220 I'm slow, Jimmy, but not, 01:12:56.220 --> 01:12:57.621 not quite that slow. You're not that slow. 01:12:57.621 --> 01:12:59.871 (laughing) 01:13:02.050 --> 01:13:04.090 All right, ORDC reform. 01:13:04.090 --> 01:13:05.463 Made some adjustments here. 01:13:07.080 --> 01:13:08.543 We've got our high cap set. 01:13:09.660 --> 01:13:13.023 As you can see, I broke it into two phases. 01:13:15.490 --> 01:13:18.990 HCAP is official as of today. 01:13:18.990 --> 01:13:20.610 Great progress. 01:13:20.610 --> 01:13:22.960 The first step, and I think we've had a lot of discussion 01:13:22.960 --> 01:13:25.980 about MCL at 3000 for many of the reasons 01:13:25.980 --> 01:13:27.720 that have been previously articulated. 01:13:27.720 --> 01:13:29.390 Everybody okay with that? 01:13:29.390 --> 01:13:30.340 Yes, sir. Yes. 01:13:31.990 --> 01:13:34.485 And by rule, vol is at 5,000 01:13:34.485 --> 01:13:36.035 because that's what HCAP is at. 01:13:37.171 --> 01:13:38.960 And based on the analysis that I've seen 01:13:38.960 --> 01:13:42.680 and many discussions with the Brattle team I think 01:13:44.630 --> 01:13:46.530 that essentially gets us back to even. 01:13:46.530 --> 01:13:48.720 The amount of revenue in the marketplace 01:13:48.720 --> 01:13:51.310 brought the highest price down, 01:13:51.310 --> 01:13:54.110 moving it out a bit, but that just gets us back to even. 01:13:55.860 --> 01:13:56.960 And we know back to even, I mean, 01:13:56.960 --> 01:14:00.970 back to even gets our generators, I guess, 01:14:00.970 --> 01:14:04.110 whole or back to where they were. 01:14:04.110 --> 01:14:06.850 But I know we want to go above and beyond. 01:14:06.850 --> 01:14:08.720 We're not here to do status quo. 01:14:08.720 --> 01:14:12.147 So that's why I proposed separating vol and HCAP 01:14:15.410 --> 01:14:17.660 early next year when we can open up that rule 01:14:20.180 --> 01:14:21.640 to add more revenue. 01:14:21.640 --> 01:14:25.993 To go above and beyond just getting back to even so that, 01:14:27.700 --> 01:14:29.450 I forgot to put your thing in here, 01:14:30.920 --> 01:14:31.820 go above and beyond. 01:14:31.820 --> 01:14:33.220 We want more revenues in the market, 01:14:33.220 --> 01:14:34.630 especially in times of scarcity. 01:14:34.630 --> 01:14:36.263 So let's move that vol up. 01:14:37.130 --> 01:14:42.130 It should not extend farther out to the PCR reserves 01:14:42.400 --> 01:14:44.710 of who's getting those payments, 01:14:44.710 --> 01:14:47.620 but should increase the area of under the curve 01:14:47.620 --> 01:14:50.580 so that those who are there in the time of scarcity 01:14:50.580 --> 01:14:52.380 get more revenues than they used to. 01:14:53.520 --> 01:14:55.430 I don't know what that number is, 01:14:55.430 --> 01:14:57.640 but that was a part of the IMM proposal 01:14:57.640 --> 01:15:00.193 with that concept of separating vol and HCAP. 01:15:01.320 --> 01:15:03.560 In principle, does that make sense? 01:15:03.560 --> 01:15:04.590 Yes, sir. 01:15:04.590 --> 01:15:07.380 May I suggest piggybacking, 01:15:07.380 --> 01:15:09.620 while the rule is open on this one, 01:15:09.620 --> 01:15:12.560 25-505 is a big rule. 01:15:12.560 --> 01:15:14.110 Could we consider splitting out 01:15:14.110 --> 01:15:17.970 the subsection E, I believe, in 25-505, 01:15:17.970 --> 01:15:20.980 which is the CDR Sara, 01:15:20.980 --> 01:15:22.850 so we get some reforms going there. 01:15:22.850 --> 01:15:25.930 So at least we have a standalone rule on that. 01:15:25.930 --> 01:15:27.960 Not only yes, but absolutely yes. 01:15:27.960 --> 01:15:30.330 And I think you'd be great 01:15:30.330 --> 01:15:32.290 to take charge of that. Okay, cool. 01:15:32.290 --> 01:15:34.240 Congratulations. Great, thank you. 01:15:35.080 --> 01:15:37.180 I can offer feedback. Oh, cool. 01:15:37.180 --> 01:15:38.630 Yeah, well, I know that's something 01:15:38.630 --> 01:15:40.610 you've cared about for a long time, 01:15:40.610 --> 01:15:42.780 and I know that's something that 01:15:44.431 --> 01:15:47.700 the market looks at, investors look at, 01:15:47.700 --> 01:15:52.620 and it is not painting the best picture. 01:15:52.620 --> 01:15:55.959 It is not the best version of the product it could be. 01:15:55.959 --> 01:15:56.792 Yes, sir. 01:15:56.792 --> 01:15:57.940 Yes, absolutely do that. 01:15:57.940 --> 01:15:59.883 Let me see what I need to add here. 01:16:00.840 --> 01:16:04.160 And opening up as part of the ORDC, 01:16:04.160 --> 01:16:07.160 I don't know that we need to put this in rule, 01:16:07.160 --> 01:16:10.250 but I would also ask that we have 01:16:10.250 --> 01:16:13.060 an automatic revisit built in, 01:16:13.060 --> 01:16:17.300 even if that's directing staff or ERCOT 01:16:17.300 --> 01:16:19.924 to present to the Commission, 01:16:19.924 --> 01:16:21.924 we don't have to figure this out now but 01:16:25.100 --> 01:16:28.000 present to the Commission by December 1st 01:16:28.000 --> 01:16:30.220 of every odd number year, 01:16:30.220 --> 01:16:34.060 an assessment of the efficacy of the ORDC, 01:16:34.060 --> 01:16:36.400 the balance and trade-offs 01:16:36.400 --> 01:16:40.520 between revenues to generators, should we need, 01:16:40.520 --> 01:16:43.890 and how that is balanced with cost on consumers. 01:16:43.890 --> 01:16:46.520 So that ahead of every legislative session 01:16:46.520 --> 01:16:49.750 and at least on a regular basis, 01:16:49.750 --> 01:16:51.530 this Commission and future Commissions 01:16:51.530 --> 01:16:53.540 will be required to evaluate 01:16:53.540 --> 01:16:56.135 all that money that's being pumped into that market. 01:16:56.135 --> 01:16:57.480 Good idea. Does that make sense? 01:16:57.480 --> 01:16:58.680 Thank you for that idea. 01:17:01.770 --> 01:17:03.520 Hope Ben's writing this stuff down. 01:17:05.877 --> 01:17:06.710 All right. 01:17:08.070 --> 01:17:12.953 That covers every element, I think, in that memo. 01:17:15.064 --> 01:17:16.253 We got ORDC visit. 01:17:17.450 --> 01:17:18.863 Sara, CDR. 01:17:20.710 --> 01:17:21.960 Chairman Lake? Yes, ma'am. 01:17:21.960 --> 01:17:24.260 Can I add a couple of items for consideration? 01:17:24.260 --> 01:17:25.634 Maybe two, three? 01:17:25.634 --> 01:17:26.563 Sure. From my flow chart. 01:17:28.230 --> 01:17:30.720 I know that we have been, 01:17:30.720 --> 01:17:33.850 Encore currently has distribution voltage reduction 01:17:33.850 --> 01:17:36.980 in place today that we have directed ERCOT to use 01:17:36.980 --> 01:17:39.300 outside of emergency conditions. 01:17:39.300 --> 01:17:42.300 And I would like to continue to explore 01:17:42.300 --> 01:17:44.490 if we can add to our roles 01:17:45.800 --> 01:17:47.650 some kind of rate recovery mechanisms 01:17:47.650 --> 01:17:49.350 so that we can get some of the TDUs 01:17:49.350 --> 01:17:52.730 that are able to provide that distribution voltage reduction 01:17:52.730 --> 01:17:54.403 to procure that equipment. 01:17:55.785 --> 01:18:00.190 If we can expand that capability or look into expanding it, 01:18:00.190 --> 01:18:02.700 I think that would be additional megawatts 01:18:02.700 --> 01:18:04.380 that we could take advantage of. 01:18:04.380 --> 01:18:06.850 Right now I think it's maybe 300 megawatts, 01:18:06.850 --> 01:18:08.170 is that correct, Liz? 01:18:08.170 --> 01:18:09.320 500? I couldn't say 01:18:09.320 --> 01:18:10.580 across the system. 01:18:10.580 --> 01:18:12.820 Okay, from Encore alone, 01:18:12.820 --> 01:18:15.000 I think we relied on-- 01:18:15.000 --> 01:18:16.350 We're very grateful to have that. 01:18:16.350 --> 01:18:17.530 Yes. I appreciate y'all. 01:18:17.530 --> 01:18:21.130 And Encore has proactively done that on their own. 01:18:21.130 --> 01:18:24.280 But if we can evaluate whether other TDUs 01:18:24.280 --> 01:18:27.920 that are able to do it based on their geographic 01:18:27.920 --> 01:18:30.910 service we can squeeze out-- Absolutely. 01:18:30.910 --> 01:18:34.500 Stated goal of maybe 1000 megawatts, 500 megawatts. 01:18:34.500 --> 01:18:35.670 Just expand that capability. 01:18:35.670 --> 01:18:37.110 I would like to add that to the list 01:18:37.110 --> 01:18:38.950 'cause that's on the demand side. 01:18:38.950 --> 01:18:40.500 Agree. 01:18:40.500 --> 01:18:41.790 In principle, yes. 01:18:41.790 --> 01:18:42.623 Thoughts? 01:18:43.590 --> 01:18:48.590 You want to establish it as a precedent in rate recovery? 01:18:49.000 --> 01:18:51.510 Yeah, I think from what I understand, 01:18:51.510 --> 01:18:53.360 densely populated service territories, 01:18:53.360 --> 01:18:54.400 it's gonna be difficult there. 01:18:54.400 --> 01:18:55.780 So some of the TDUs that are 01:18:55.780 --> 01:18:57.410 in the more densely populated areas. 01:18:57.410 --> 01:18:59.030 We wouldn't require the TDUs to do it, 01:18:59.030 --> 01:19:01.610 but should they have the capability to do it, 01:19:01.610 --> 01:19:04.060 there would be a process for them to be able to 01:19:05.620 --> 01:19:08.010 recover just and reasonable prudently incurred costs 01:19:08.010 --> 01:19:08.910 for that equipment 01:19:10.060 --> 01:19:11.530 so that we can get more megawatts 01:19:11.530 --> 01:19:12.810 on the demand side reduction. 01:19:12.810 --> 01:19:16.529 Would you count that in the CDR Sara? 01:19:16.529 --> 01:19:18.530 I mean, would you count that as megawatts? 01:19:18.530 --> 01:19:20.680 I don't know if ERCOT currently does that right now. 01:19:20.680 --> 01:19:22.970 I don't-- I don't think that... 01:19:22.970 --> 01:19:24.930 Do y'all count distribution voltage reduction 01:19:24.930 --> 01:19:27.632 in your CDR reporting? 01:19:27.632 --> 01:19:29.039 I don't believe so. 01:19:29.039 --> 01:19:32.090 We should and we have more. 01:19:32.090 --> 01:19:32.923 So that's the trigger. 01:19:32.923 --> 01:19:35.228 I mean, let's get the value out of it. 01:19:35.228 --> 01:19:37.628 I mean, we gotta-- Well, I want to do it. 01:19:37.628 --> 01:19:39.543 I want the megawatts when we need them. 01:19:40.492 --> 01:19:42.370 But it's when it gets tight, 01:19:42.370 --> 01:19:44.923 dear God, we're grateful for Encore's megawatts. 01:19:46.320 --> 01:19:49.490 If we can do that, yes, we should recognize that 01:19:49.490 --> 01:19:51.790 is part of the emergency. 01:19:51.790 --> 01:19:53.833 I wouldn't count them, we don't like doing that 01:19:53.833 --> 01:19:54.970 on a regular basis. For regular operation. 01:19:54.970 --> 01:19:56.877 That's not, yeah, not regular operations 01:19:56.877 --> 01:19:58.843 but part of the emergency suite. 01:20:00.800 --> 01:20:01.783 Thoughts? Fine. 01:20:04.350 --> 01:20:06.680 Let me just say, an additive to this. 01:20:06.680 --> 01:20:08.630 I mean, I think this is where, 01:20:08.630 --> 01:20:11.910 is a place where there are some investments 01:20:11.910 --> 01:20:13.740 that need to be made by the TDUs. 01:20:13.740 --> 01:20:15.550 There's significant megawatts that we can't get 01:20:15.550 --> 01:20:16.953 when we go to emergencies. 01:20:18.408 --> 01:20:19.830 Significant megawatts. 01:20:19.830 --> 01:20:21.920 So if we get to that, 01:20:21.920 --> 01:20:25.770 it clearly is a value proposition, I think, will pay off. 01:20:25.770 --> 01:20:27.220 So would you want that 01:20:27.220 --> 01:20:28.880 part of a targeted approach on this one 01:20:28.880 --> 01:20:33.400 or a broader gleaning megawatts on the TDU side? 01:20:33.400 --> 01:20:35.480 I think we get started as a targeted approach 01:20:35.480 --> 01:20:37.300 and see what we can get. 01:20:37.300 --> 01:20:38.960 Maybe we open up a project 01:20:38.960 --> 01:20:41.076 and get some information from the TDUs. 01:20:41.076 --> 01:20:42.760 Yeah, I'm wondering what, 01:20:42.760 --> 01:20:44.933 I think in principle, yes, absolutely. 01:20:45.890 --> 01:20:47.050 I'm trying to think of the right venue 01:20:47.050 --> 01:20:49.150 because that may be something where we ask 01:20:50.690 --> 01:20:54.130 open a project and ask OPDM to think about the best way 01:20:54.130 --> 01:20:57.190 to incorporate that in Commission operations. 01:20:57.190 --> 01:20:58.460 Sure. 01:20:58.460 --> 01:21:01.720 To your dynamic line rating and those concepts, 01:21:01.720 --> 01:21:05.100 what is the best, I think those are important to leverage. 01:21:05.100 --> 01:21:06.480 I don't know that we need to require them, 01:21:06.480 --> 01:21:08.020 but perhaps incentivize. 01:21:08.020 --> 01:21:12.210 Is that a ERCOT ops market design or is that a-- 01:21:12.210 --> 01:21:13.410 It's not a market design. 01:21:13.410 --> 01:21:14.610 I mean, I think it's-- 01:21:14.610 --> 01:21:16.980 It's over here? Yeah, yeah. 01:21:16.980 --> 01:21:19.580 It's operational and it's happening. 01:21:19.580 --> 01:21:22.090 Some of the TDUs have done a great job with it. 01:21:22.090 --> 01:21:23.220 Others have not. 01:21:23.220 --> 01:21:26.710 And I think we just need to work through it 01:21:26.710 --> 01:21:27.770 and see what those issues are. 01:21:27.770 --> 01:21:30.750 If there are rate issues, we need to be told. 01:21:30.750 --> 01:21:34.720 If not, we can keep pushing. 01:21:34.720 --> 01:21:35.553 Yeah. 01:21:35.553 --> 01:21:37.240 So the way, and just to clear it, 01:21:37.240 --> 01:21:39.060 'cause I see the distinction you're making now, 01:21:39.060 --> 01:21:41.300 Chairman Lake, I would view this as more 01:21:41.300 --> 01:21:44.110 as part of an extra tool in our toolkit, 01:21:44.110 --> 01:21:45.750 kind of like ERS. 01:21:45.750 --> 01:21:49.353 Those tools we use when we are trying to avoid conservation. 01:21:50.290 --> 01:21:51.910 If we can expand those megawatts 01:21:51.910 --> 01:21:54.085 on the distribution voltage reduction, 01:21:54.085 --> 01:21:56.560 again, we wouldn't require every utility to do it, 01:21:56.560 --> 01:21:57.890 but the ones that were able to, 01:21:57.890 --> 01:22:00.510 and we could get some more megawatts, 01:22:00.510 --> 01:22:03.920 we can provide some pathway for them 01:22:03.920 --> 01:22:06.960 to be able to invest in those, that additional equipment. 01:22:06.960 --> 01:22:07.793 Okay, well. 01:22:09.980 --> 01:22:12.020 Will you work with staff to figure out 01:22:12.020 --> 01:22:14.050 what the best venue for that is. 01:22:14.050 --> 01:22:16.829 In principle, we're all on board on implementing that. 01:22:16.829 --> 01:22:17.912 Absolutely. 01:22:18.817 --> 01:22:20.440 The other item I was gonna add on there 01:22:20.440 --> 01:22:23.990 is distributed generation. And what I mean by that, 01:22:23.990 --> 01:22:27.410 I know Commissioner McAdams several months ago, 01:22:27.410 --> 01:22:28.860 even before I got to the PUC, 01:22:29.713 --> 01:22:32.420 based on two contested case proceedings at the time 01:22:32.420 --> 01:22:34.320 that you asked to be dismissed, 01:22:34.320 --> 01:22:36.280 you asked for staff to open a project 01:22:36.280 --> 01:22:38.740 to look at distributed generation. 01:22:38.740 --> 01:22:40.380 Based on a lot of feedback that I've gotten 01:22:40.380 --> 01:22:42.260 from distributed generation companies, 01:22:42.260 --> 01:22:45.350 microgrid related companies, 01:22:45.350 --> 01:22:48.160 I think there is some opportunities there 01:22:48.160 --> 01:22:50.790 to evaluate streamlining the interconnection process 01:22:50.790 --> 01:22:52.910 and making improvements there. 01:22:52.910 --> 01:22:56.360 And I think perhaps those issues can get paired up 01:22:56.360 --> 01:22:57.770 with some of the issues you were looking at. 01:22:57.770 --> 01:23:00.220 I know staff hasn't yet opened up a project 01:23:00.220 --> 01:23:02.160 to evaluate that but that would be something else 01:23:02.160 --> 01:23:04.550 that we can have staff evaluate. 01:23:04.550 --> 01:23:07.110 And as the moratorium lives on January 4th, 01:23:07.110 --> 01:23:09.589 more data will be available for that. 01:23:09.589 --> 01:23:11.147 Okay. 01:23:11.147 --> 01:23:13.660 For detail. So the project would 01:23:13.660 --> 01:23:16.010 incorporate that data to what? 01:23:16.010 --> 01:23:17.920 Evaluate our interconnection procedures 01:23:17.920 --> 01:23:22.400 and work with ERCOT and TDU timelines. 01:23:22.400 --> 01:23:26.720 There seems to be some ad hoc sort of procedures that go on. 01:23:26.720 --> 01:23:29.500 And I think you hear that from distribute generation 01:23:29.500 --> 01:23:34.500 resources like micro related type companies, DG, 01:23:35.320 --> 01:23:37.020 also storage. Is that, 01:23:37.020 --> 01:23:39.630 yep, good, yes, yes. 01:23:39.630 --> 01:23:40.780 I think so. 01:23:40.780 --> 01:23:42.650 What my experience is from what I've heard 01:23:42.650 --> 01:23:46.400 is some TDUs do it really well. 01:23:46.400 --> 01:23:47.680 And I say TDUs, I mean, 01:23:47.680 --> 01:23:50.920 co-ops, communities, whatever the interconnection entity is. 01:23:50.920 --> 01:23:52.370 Some of them do it really well. 01:23:52.370 --> 01:23:55.370 Others are very slow, very secretive about costs, 01:23:55.370 --> 01:23:59.070 very not timely, 01:23:59.070 --> 01:24:01.993 and finding a way, as I had said earlier 01:24:01.993 --> 01:24:04.990 when I first discussed market design, 01:24:04.990 --> 01:24:06.640 doing some sort of standard inner connection 01:24:06.640 --> 01:24:08.720 at the distribution level would be, I think, 01:24:08.720 --> 01:24:13.484 a very important component because it all equals megawatts. 01:24:13.484 --> 01:24:15.980 It does. 01:24:15.980 --> 01:24:17.463 Then finally-- 01:24:17.463 --> 01:24:18.616 Megawatts or what? 01:24:18.616 --> 01:24:20.499 There it is. (laughing) 01:24:20.499 --> 01:24:21.640 We should have-- 01:24:21.640 --> 01:24:23.450 On that, real quick question, Lori. 01:24:23.450 --> 01:24:25.830 How would that, or should it or can it, 01:24:25.830 --> 01:24:29.180 overlap with the interconnect work you all are doing? 01:24:29.180 --> 01:24:30.762 And with it-- I think it's different. 01:24:30.762 --> 01:24:32.880 A little bit different. Ours is gonna be simpler. 01:24:32.880 --> 01:24:33.950 I hope. 01:24:33.950 --> 01:24:35.730 Okay, okay, just wanted to ask the question. 01:24:35.730 --> 01:24:37.043 Okay, so that's... 01:24:38.541 --> 01:24:39.374 Okay. 01:24:40.617 --> 01:24:42.239 And one final one. 01:24:42.239 --> 01:24:44.220 Okay, so. 01:24:44.220 --> 01:24:46.010 DG interconnect, okay. 01:24:46.010 --> 01:24:48.976 That's on mine as well. 01:24:48.976 --> 01:24:50.447 Your ops list? Yeah. 01:24:50.447 --> 01:24:52.740 Go ahead. And I have one final one 01:24:52.740 --> 01:24:54.473 that I think is worth exploring. 01:24:56.470 --> 01:25:01.380 FERC recently issued a for quarter 22-22 that promotes 01:25:04.367 --> 01:25:08.470 eliminating barriers for distribute generation resources 01:25:08.470 --> 01:25:11.370 and from getting into the market. 01:25:11.370 --> 01:25:13.390 DERS is often referred to distributed 01:25:13.390 --> 01:25:15.699 energy resources-- Talked about that before. 01:25:15.699 --> 01:25:19.311 And we're not subject for jurisdiction. 01:25:19.311 --> 01:25:21.500 But I think the other markets 01:25:21.500 --> 01:25:22.877 are gonna be evaluating these issues. 01:25:22.877 --> 01:25:24.200 And what I mean by DERS, 01:25:24.200 --> 01:25:26.720 it's aggregations of customers and how they can participate 01:25:26.720 --> 01:25:28.670 in real-time market ancillary services. 01:25:29.510 --> 01:25:32.520 As I've often said before to you in public and to others 01:25:32.520 --> 01:25:34.230 is that I want to use this opportunity 01:25:34.230 --> 01:25:35.700 to not only ensure reliability, 01:25:35.700 --> 01:25:39.330 but to continue to innovate and enhancing reliability. 01:25:39.330 --> 01:25:42.060 And so if the other markets are looking at 01:25:44.040 --> 01:25:45.990 eliminating barriers to this type of participation, 01:25:45.990 --> 01:25:49.040 I think it would be a good idea to at least direct ERCOT 01:25:49.040 --> 01:25:52.260 to have a workshop and start looking at best practices 01:25:52.260 --> 01:25:56.820 and barriers, opportunities for customer aggregations 01:25:56.820 --> 01:25:59.260 or what are known as virtual power plants, 01:25:59.260 --> 01:26:00.650 the distributed energy resources, 01:26:00.650 --> 01:26:03.500 and just kind of at least get some momentum going 01:26:03.500 --> 01:26:06.450 out there at ERCOT through by way of a workshop 01:26:06.450 --> 01:26:09.920 and maybe additional stakeholder discussions, 01:26:09.920 --> 01:26:11.103 a task force or something to evaluate it, 01:26:11.103 --> 01:26:12.720 because I don't want to fall behind 01:26:12.720 --> 01:26:14.440 from the rest of the United States. 01:26:14.440 --> 01:26:15.570 We innovate here at ERCOT. 01:26:15.570 --> 01:26:18.540 We lead and I want to make sure we continue to do so. 01:26:18.540 --> 01:26:20.310 And this concept of virtual power plants, 01:26:20.310 --> 01:26:24.680 well, I would like to see personally a roadmap as to, 01:26:24.680 --> 01:26:26.450 basically once ERCOT has conversations 01:26:26.450 --> 01:26:29.050 with the stakeholders as to what is the pathway, 01:26:29.050 --> 01:26:30.690 what are some challenges, 01:26:30.690 --> 01:26:33.260 and learn what some of the pros and cons are. 01:26:33.260 --> 01:26:36.670 So I think that we capitalize on the demand side. 01:26:36.670 --> 01:26:38.520 That's another demand. Absolutely. 01:26:40.580 --> 01:26:43.040 I think the first question to answer is, 01:26:43.040 --> 01:26:45.410 what are the existing barriers? 01:26:45.410 --> 01:26:46.970 And I want to be very careful, 01:26:46.970 --> 01:26:50.467 as we have numerous stakeholders who do this, 01:26:50.467 --> 01:26:54.140 I want to make sure everyone has equal access, 01:26:54.140 --> 01:26:55.423 but not preferential. 01:26:56.380 --> 01:26:58.970 I catch folks from time to time saying 01:26:58.970 --> 01:27:01.600 we're preventing demand response, 01:27:01.600 --> 01:27:05.610 when that translates to actually mean 01:27:05.610 --> 01:27:09.170 you're not paying me extra more than the next megawatt 01:27:09.170 --> 01:27:11.933 and I want a special product just for me. 01:27:13.762 --> 01:27:17.360 I think it needs to be equal, it needs to be on par, 01:27:17.360 --> 01:27:20.870 but it should all be on par. 01:27:20.870 --> 01:27:23.250 So I want it, let's make, let's check. 01:27:23.250 --> 01:27:24.863 Yes, let's move forward on that. 01:27:25.920 --> 01:27:27.210 Let's start with the barriers. 01:27:27.210 --> 01:27:29.973 Let's start with the command and control needs. 01:27:31.200 --> 01:27:32.760 So it's not just a bonus. 01:27:32.760 --> 01:27:35.900 You've got to commit to, 01:27:35.900 --> 01:27:37.310 you've got to schedule just like 01:27:37.310 --> 01:27:38.910 anybody else who's getting paid. 01:27:41.060 --> 01:27:43.170 So we know if we're counting on that, 01:27:43.170 --> 01:27:46.510 your CTR, your Sara, if you're counting on it being there, 01:27:46.510 --> 01:27:48.100 it dam sure better be there. 01:27:48.100 --> 01:27:49.843 Absolutely. So schedule when you clear, 01:27:49.843 --> 01:27:51.300 is that right maybe? 01:27:51.300 --> 01:27:53.350 Well, I'm saying you-- 01:27:53.350 --> 01:27:54.760 Just trying to make it apples and apples, 01:27:54.760 --> 01:27:56.610 if I can, out of this stuff. 01:27:56.610 --> 01:27:58.960 Yeah. I don't know that you have to be clear, 01:27:58.960 --> 01:28:02.460 but you have to be willing to commit all those Teslas. 01:28:02.460 --> 01:28:05.991 You have to be willing to commit all those power walls. 01:28:05.991 --> 01:28:07.640 I hear you. To be there. 01:28:07.640 --> 01:28:09.040 You're commanding control. 01:28:09.040 --> 01:28:09.873 Woody needs to know 01:28:09.873 --> 01:28:11.420 if he's gonna call on these resources. 01:28:11.420 --> 01:28:12.590 I agree. Absolutely. 01:28:12.590 --> 01:28:15.303 He can't be grabbing air. 01:28:16.370 --> 01:28:18.410 And I definitely agree with that. 01:28:18.410 --> 01:28:19.890 We want to make sure we understand the barriers, 01:28:19.890 --> 01:28:22.060 but also the operational risk involved. 01:28:22.060 --> 01:28:26.040 And I think by way of working with ERCOT or 01:28:27.340 --> 01:28:29.500 creating some kind of forum where 01:28:29.500 --> 01:28:32.140 we are presented with information from 01:28:32.140 --> 01:28:34.820 a robust discussion with ERCOT and stakeholders 01:28:34.820 --> 01:28:37.000 would be great because I'm definitely 01:28:37.000 --> 01:28:38.330 on the same page as you, Chairman Lake. 01:28:38.330 --> 01:28:41.720 I don't want to create any unintended consequences, 01:28:41.720 --> 01:28:43.190 but I want to see if there's any rewards 01:28:43.190 --> 01:28:46.033 we can reap on an even playing field. 01:28:48.250 --> 01:28:50.330 Yeah, I think there's tremendous opportunity there. 01:28:50.330 --> 01:28:52.023 And to the point you make, 01:28:53.610 --> 01:28:55.627 sometimes angrily and sometimes happily, 01:28:55.627 --> 01:28:58.610 (laughing) 01:28:58.610 --> 01:28:59.970 these resources should be, 01:28:59.970 --> 01:29:01.830 they should all be part of this. 01:29:01.830 --> 01:29:03.683 Both in economic reward, 01:29:04.770 --> 01:29:07.490 but if you're not there, you're getting the same penalty. 01:29:07.490 --> 01:29:12.490 Whether it's in a cone deck construct or whatever it is, 01:29:12.790 --> 01:29:15.040 you get the same economic reward 01:29:15.040 --> 01:29:17.810 and you get the same penalty pain 01:29:17.810 --> 01:29:19.813 as a unit tripping. 01:29:21.790 --> 01:29:23.323 Yeah, anything else. 01:29:24.172 --> 01:29:26.340 Have to be able to count on. 01:29:26.340 --> 01:29:29.963 Yeah, accountability across the board. 01:29:30.990 --> 01:29:31.823 Will? 01:29:32.720 --> 01:29:33.723 I think so. 01:29:33.723 --> 01:29:35.810 I'm just trying not to preclude basic elements 01:29:35.810 --> 01:29:37.400 of the old deck program. 01:29:37.400 --> 01:29:39.765 I just want some good to get 01:29:39.765 --> 01:29:41.900 dispatchable generation. 01:29:41.900 --> 01:29:44.640 DG stuff is more amorphous. 01:29:44.640 --> 01:29:47.400 So I'm not trying to box in the deck program. 01:29:47.400 --> 01:29:49.320 No, no, no, I'm not-- I'll cross that hill. 01:29:49.320 --> 01:29:51.491 I think we-- I think that's one of the, 01:29:51.491 --> 01:29:53.380 but I think that's one of the features of the deck program 01:29:53.380 --> 01:29:54.810 is you identify, 01:29:54.810 --> 01:29:59.000 we don't have to figure all this out now but in 01:29:59.996 --> 01:30:02.960 any version of an LSE obligation, 01:30:02.960 --> 01:30:05.543 heavy, light, short, tall, whatever, 01:30:06.380 --> 01:30:09.400 you treat each of them equally, 01:30:09.400 --> 01:30:12.223 both in reward and punishment. 01:30:13.720 --> 01:30:17.600 And by doing that, you're putting value to it, 01:30:17.600 --> 01:30:20.480 whether it's decks you don't have to buy or 01:30:21.636 --> 01:30:23.020 a LSE obligation that you can offer. 01:30:23.020 --> 01:30:25.010 You can essentially self-insure. 01:30:25.010 --> 01:30:27.670 You're putting a value on that demand response 01:30:27.670 --> 01:30:30.400 that's quantifiable and fungible, 01:30:30.400 --> 01:30:33.860 which I can't think of anything more important 01:30:33.860 --> 01:30:36.670 or more that will do more to drive 01:30:36.670 --> 01:30:39.870 the quantifying demand response 01:30:39.870 --> 01:30:43.200 and incentivizing implementation 01:30:43.200 --> 01:30:45.900 of those demand response technologies and aggregation. 01:30:45.900 --> 01:30:50.340 But you put a value on it and tell people to, 01:30:50.340 --> 01:30:52.540 tell the market to go figure out the best way to get those. 01:30:52.540 --> 01:30:54.140 I think, as a principle, 01:30:54.140 --> 01:30:57.300 if those aggregated systems can perform like a power plant 01:30:57.300 --> 01:31:00.600 to Woody's satisfaction and ERCOT operations, 01:31:00.600 --> 01:31:01.540 they're a power plant. 01:31:01.540 --> 01:31:03.476 I mean, if they work like a power plant, 01:31:03.476 --> 01:31:04.480 they're a plower pant. 01:31:04.480 --> 01:31:05.933 Pay them the same, treat them the same. 01:31:05.933 --> 01:31:07.207 Absolutely. 01:31:07.207 --> 01:31:11.020 And I think that'll get better reliability, 01:31:11.020 --> 01:31:11.920 more economically, 01:31:12.937 --> 01:31:14.720 and provide more incentive for those 01:31:14.720 --> 01:31:17.186 resources and technologies than we've ever had. 01:31:17.186 --> 01:31:18.446 Yes, sir. Absolutely. 01:31:18.446 --> 01:31:19.950 That's where I had said earlier in my view 01:31:19.950 --> 01:31:22.200 that we're blurring the lines between 01:31:22.200 --> 01:31:25.380 consumers and providers on the system. 01:31:25.380 --> 01:31:27.160 It's not just supply and demand 01:31:27.160 --> 01:31:29.060 because the demand side is also gonna be 01:31:29.060 --> 01:31:30.550 a supplier at some point in time. 01:31:30.550 --> 01:31:33.370 So this roadmap gets blurry 01:31:35.605 --> 01:31:36.870 as we're gonna 01:31:36.870 --> 01:31:38.907 I don't think we will get it right the first time 01:31:38.907 --> 01:31:40.760 and I don't think others will 01:31:40.760 --> 01:31:43.030 as we try to find out how these VPPs 01:31:43.030 --> 01:31:45.370 and other of those distribution resources 01:31:45.370 --> 01:31:46.580 really fit into this market. 01:31:46.580 --> 01:31:50.220 But I think it's the signal that we want to push for them. 01:31:50.220 --> 01:31:51.260 We want their megawatts, 01:31:51.260 --> 01:31:54.190 we want their demand response as part of our market. 01:31:54.190 --> 01:31:56.380 Yes, absolutely and 01:31:56.380 --> 01:31:59.030 one very important point I want to make. 01:31:59.030 --> 01:32:01.900 Oftentimes in the media and the public, 01:32:01.900 --> 01:32:03.143 stakeholder comments, 01:32:04.740 --> 01:32:07.930 there's a lot of discussion or points being made 01:32:07.930 --> 01:32:10.710 that we're not doing enough on the demand response side. 01:32:10.710 --> 01:32:12.620 And I just really want to 01:32:13.700 --> 01:32:16.240 zoom in on the fact that today we have discussed 01:32:16.240 --> 01:32:20.680 a lot of demand side improvements, 01:32:20.680 --> 01:32:24.520 and that is through long-term improvements through ERS, 01:32:24.520 --> 01:32:25.893 emergency response service, 01:32:26.910 --> 01:32:29.010 the TDU energy efficiency load management rule 01:32:29.010 --> 01:32:30.680 that we're gonna be evaluating, 01:32:30.680 --> 01:32:33.130 distributed generation interconnection procedures 01:32:33.130 --> 01:32:35.870 to make sure that those processes are streamlined, 01:32:35.870 --> 01:32:40.720 and evaluation of virtual power plants. 01:32:40.720 --> 01:32:44.113 And opening up non-spend two 50% load. 01:32:44.113 --> 01:32:46.820 Right. 01:32:46.820 --> 01:32:50.640 Just as a matter of operations, Mr. Chairman. 01:32:50.640 --> 01:32:52.330 I see Kenan and Christie over here, 01:32:52.330 --> 01:32:54.030 and I know they're listening to all this, 01:32:54.030 --> 01:32:55.580 and this is a mountain of work. 01:32:56.460 --> 01:32:58.273 So as a rule, 01:33:00.401 --> 01:33:03.480 well, we all agreed with what you have here. 01:33:03.480 --> 01:33:05.300 The framework that we've kind of discussed. 01:33:05.300 --> 01:33:06.133 It's kind of-- We gotta add 01:33:06.133 --> 01:33:08.010 some principles to the bottom of that. 01:33:08.010 --> 01:33:12.104 But in terms of near term ERCOT operations, 01:33:12.104 --> 01:33:15.027 where the workshops get going 01:33:15.027 --> 01:33:17.440 and what the stakeholders start discussing, 01:33:17.440 --> 01:33:19.650 this is the priority over the next two years. 01:33:19.650 --> 01:33:21.410 Is that accurate? 01:33:21.410 --> 01:33:23.860 Or are we gonna try to work on all this at the same time? 01:33:23.860 --> 01:33:25.370 'Cause their bandwidth and resources 01:33:25.370 --> 01:33:26.270 has come into question 01:33:26.270 --> 01:33:28.253 and also the governance-- Yes, and. 01:33:29.206 --> 01:33:31.373 First part, yes. 01:33:32.450 --> 01:33:34.040 On your first comment. 01:33:34.040 --> 01:33:36.370 Yes, that framework and whatever principles 01:33:36.370 --> 01:33:39.063 or everything we put into that is paramount. 01:33:40.610 --> 01:33:43.630 These other, I guess, non-market design 01:33:44.610 --> 01:33:47.530 operational elements like CDR and Sara. 01:33:47.530 --> 01:33:49.293 That'll take some ERCOT resources, 01:33:50.410 --> 01:33:52.260 but I've got a pretty good hunch 01:33:52.260 --> 01:33:53.770 that you're gonna do a lot of heavy lifting on that. 01:33:53.770 --> 01:33:58.269 Yeah, we'll provide real practical feedback. 01:33:58.269 --> 01:34:01.020 (laughing) 01:34:01.020 --> 01:34:03.560 Yeah, my sense is you're gonna 01:34:03.560 --> 01:34:04.580 roll your sleeves up on that. 01:34:04.580 --> 01:34:06.000 Sure. 01:34:06.000 --> 01:34:09.130 Which is probably not gonna be too much of this. 01:34:09.130 --> 01:34:11.423 That's not a huge resource drain on them. 01:34:15.362 --> 01:34:17.410 The voltage reduction, 01:34:17.410 --> 01:34:20.483 that's probably an OPDM rate making thing. 01:34:23.730 --> 01:34:24.730 Et cetera, so I'm not, 01:34:24.730 --> 01:34:26.730 yes, we don't want to overwhelm them 01:34:27.700 --> 01:34:29.220 and we want to be careful with that. 01:34:29.220 --> 01:34:30.053 And so, 01:34:31.610 --> 01:34:34.100 I want to, as part of the next step of this 01:34:34.100 --> 01:34:35.940 between now and the 16th, 01:34:35.940 --> 01:34:39.100 I need to work with your individual offices 01:34:39.100 --> 01:34:41.830 and them to figure out a more 01:34:43.270 --> 01:34:45.943 crystallized implementation system. 01:34:49.350 --> 01:34:50.512 I'm done. 01:34:50.512 --> 01:34:51.580 Thank you so much for your consideration. 01:34:51.580 --> 01:34:52.600 Yes, ma'am. 01:34:52.600 --> 01:34:54.150 Thank you for laying those out. 01:35:00.842 --> 01:35:04.580 Pending discussion on principles of LSE obligation, 01:35:04.580 --> 01:35:09.023 is there anything else in this memo plus Lori's that, 01:35:10.510 --> 01:35:15.510 and the cost visualization issue we'll have to work on, 01:35:16.150 --> 01:35:19.383 anything else on here that is not, 01:35:20.230 --> 01:35:22.280 we're not committed to moving forward on? 01:35:34.282 --> 01:35:35.220 Other than principles, no sir. 01:35:35.220 --> 01:35:37.243 Yeah, I'm good. That's it. 01:35:39.580 --> 01:35:41.647 I don't see anything right now. 01:35:41.647 --> 01:35:43.782 Okay, and this is, I mean, this is a draft. 01:35:43.782 --> 01:35:47.190 Staff will be, we'll issue the final-- 01:35:47.190 --> 01:35:48.560 Struggling for final comment? 01:35:48.560 --> 01:35:52.630 The final second draft of the temporary 01:35:54.090 --> 01:35:55.023 work in progress. 01:35:57.550 --> 01:35:59.600 So there's still time. 01:35:59.600 --> 01:36:02.290 We'll have time to adjust. 01:36:02.290 --> 01:36:05.610 And then that will be the last set of comments we take 01:36:07.655 --> 01:36:08.750 at the end of the year. 01:36:08.750 --> 01:36:09.583 All right. 01:36:10.685 --> 01:36:12.050 LSE obligation principles. 01:36:12.050 --> 01:36:14.790 We've committed to move forward, 01:36:14.790 --> 01:36:17.210 studying and developing an LSE obligation 01:36:18.190 --> 01:36:20.723 or LSE reliability mechanism. 01:36:22.060 --> 01:36:24.790 What are the principles we want to ask 01:36:24.790 --> 01:36:27.630 ERCOT, Brattle, et cetera, 01:36:27.630 --> 01:36:32.183 to design that principle or design that mechanism around? 01:36:33.050 --> 01:36:35.270 I've laid out some here. 01:36:35.270 --> 01:36:37.060 Obviously I know you all have seen those. 01:36:37.060 --> 01:36:40.440 I would also submit the 01:36:40.440 --> 01:36:43.043 deck features I listed at the beginning. 01:36:46.180 --> 01:36:48.823 Especially the penalty at cone. 01:36:52.460 --> 01:36:53.320 Listing... 01:36:56.300 --> 01:37:00.370 Building on rec framework as much as possible. 01:37:00.370 --> 01:37:02.290 I mean, in general, I think we want to 01:37:02.290 --> 01:37:04.883 utilize existing frameworks as much as we can. 01:37:07.561 --> 01:37:11.063 A self-correcting, ensuring that it's self-correcting. 01:37:12.056 --> 01:37:13.223 The cure for high price is a high price. 01:37:13.223 --> 01:37:15.760 That first, and that's the corollary 01:37:15.760 --> 01:37:19.920 of the cone penalty concept. 01:37:19.920 --> 01:37:22.930 The first one is you don't have enough supply, 01:37:22.930 --> 01:37:24.330 you've got this much demand. 01:37:25.350 --> 01:37:26.840 That next one is cone. 01:37:26.840 --> 01:37:28.070 The next one's cone. 01:37:28.070 --> 01:37:30.510 But as you get closer to that demand 01:37:30.510 --> 01:37:32.020 and that market equilibrium, 01:37:32.020 --> 01:37:36.917 the marginal price per H next unit decreases. 01:37:38.110 --> 01:37:40.880 And then you, so that kind of, 01:37:40.880 --> 01:37:41.790 make sure we incorporate 01:37:41.790 --> 01:37:43.763 that kind of self-correcting mechanism. 01:37:46.180 --> 01:37:47.280 Forward price signal, 01:37:47.280 --> 01:37:50.420 performance penalty, and noncompliance penalty. 01:37:50.420 --> 01:37:52.500 If we're gonna ask someone on the load side 01:37:52.500 --> 01:37:56.260 to procure something to ensure 01:37:56.260 --> 01:37:58.060 their customers receive the reliable power 01:37:58.060 --> 01:37:59.410 that they've promised them, 01:38:00.640 --> 01:38:04.300 same penalty on the gen side for not showing up. 01:38:04.300 --> 01:38:05.133 For not, 01:38:06.111 --> 01:38:11.111 they took revenue for that reliability credit 01:38:11.200 --> 01:38:12.660 that they sold. 01:38:12.660 --> 01:38:15.190 If they don't show up, same penalty, 01:38:15.190 --> 01:38:16.990 or philosophically the same penalty. 01:38:20.468 --> 01:38:21.733 I mean, performance standards, 01:38:21.733 --> 01:38:22.960 that was something you mentioned, I think, 01:38:22.960 --> 01:38:25.443 that was something in the-- Performance, yeah. 01:38:27.152 --> 01:38:28.310 A different issue. 01:38:28.310 --> 01:38:31.080 I would ask him to, again, as a part of this, 01:38:31.080 --> 01:38:32.570 model two scenarios because I think 01:38:32.570 --> 01:38:33.760 it's important for scope 01:38:33.760 --> 01:38:36.930 so that we at least answer questions, 01:38:36.930 --> 01:38:41.163 which is a specific performance standard or for all. 01:38:42.690 --> 01:38:44.250 All dispatchable generation, 01:38:44.250 --> 01:38:46.950 so that we can adequately be informed 01:38:46.950 --> 01:38:48.900 on crossing that river. 01:38:48.900 --> 01:38:53.457 Can I ask if you'd consider asking for, 01:38:55.230 --> 01:38:57.430 or we have a sizing question, a quantity, 01:38:57.430 --> 01:38:58.627 and then a compensation side. 01:38:58.627 --> 01:39:00.973 And I would like to explore, 01:39:05.883 --> 01:39:06.810 and you gotta be real careful about 01:39:06.810 --> 01:39:09.100 the principle of tech agnostic, 01:39:09.100 --> 01:39:11.100 which I think is important to all of us. 01:39:12.790 --> 01:39:16.953 Some bifurcated value of, 01:39:18.050 --> 01:39:19.890 by performance standards, I mean, 01:39:19.890 --> 01:39:21.400 the deck is designed for new, 01:39:21.400 --> 01:39:24.900 but the new part is just from the performance standard. 01:39:24.900 --> 01:39:27.800 It doesn't technically say it's gotta be a ribbon cutting. 01:39:30.133 --> 01:39:31.670 But to have some performance standard 01:39:31.670 --> 01:39:34.630 that has the deck or the reliability credit 01:39:34.630 --> 01:39:36.460 or whatever it is valued more 01:39:36.460 --> 01:39:38.260 for a higher performance standard. 01:39:38.260 --> 01:39:39.773 Almost a bonus, if you will. 01:39:41.740 --> 01:39:43.390 I don't know that that, 01:39:44.610 --> 01:39:46.570 I don't know that that's the answer but 01:39:47.450 --> 01:39:52.450 at least consider the concept of staggered valuation or-- 01:39:52.940 --> 01:39:55.493 Or if you work through the ACP, 01:39:55.493 --> 01:39:57.470 sort of the value of the ACP 01:39:57.470 --> 01:39:59.620 or whatever that concept is, which is cone, 01:40:00.680 --> 01:40:02.110 and work your way backward. 01:40:02.110 --> 01:40:03.480 If you're talking, because, 01:40:03.480 --> 01:40:06.240 if you're concerned about batteries or something, 01:40:06.240 --> 01:40:08.920 that again, they're gonna have a two hour duration 01:40:08.920 --> 01:40:10.959 or whatever that performance value is, 01:40:10.959 --> 01:40:13.080 and they're not providing as much, 01:40:13.080 --> 01:40:14.250 then that gets you into, okay, 01:40:14.250 --> 01:40:16.560 well, whatever is the standard metric 01:40:16.560 --> 01:40:19.650 that you want to assign and the value. 01:40:19.650 --> 01:40:23.523 So that maybe it's not the full ACP value at first. 01:40:24.520 --> 01:40:29.053 And then it ratchets down as more new generation comes in. 01:40:30.063 --> 01:40:31.650 Well, we want, yeah. Know what I'm saying? 01:40:31.650 --> 01:40:34.500 Yeah, and that's, we want that self-correcting mechanism 01:40:34.500 --> 01:40:36.070 that can be structured. 01:40:36.070 --> 01:40:37.720 I think we want it market driven. 01:40:39.570 --> 01:40:42.570 But I mean, for right now, I think we all, 01:40:42.570 --> 01:40:43.403 all we need to 01:40:45.370 --> 01:40:47.070 agree to is that-- 01:40:47.070 --> 01:40:48.640 Performance standard. 01:40:48.640 --> 01:40:51.170 We can pay more for higher performance. 01:40:51.170 --> 01:40:52.500 Check. 01:40:52.500 --> 01:40:55.163 And still pay something for existing. 01:40:56.750 --> 01:40:59.290 Deck value associated with performance standard 01:40:59.290 --> 01:41:01.460 with degrees of performance-- Different performances. 01:41:01.460 --> 01:41:02.840 Degrees of performance. Right, so. 01:41:02.840 --> 01:41:04.755 I know it's something that's important to you 01:41:04.755 --> 01:41:05.870 is we don't want to dump money. 01:41:05.870 --> 01:41:06.960 All of us, cash for clunkers. 01:41:06.960 --> 01:41:08.120 We don't want to do that. 01:41:08.120 --> 01:41:09.410 Deck value associated, yeah. 01:41:09.410 --> 01:41:11.127 But we do want, 01:41:11.127 --> 01:41:13.950 and that's part of, I mean it's... 01:41:18.395 --> 01:41:20.380 And the other feature of, I think I put, 01:41:20.380 --> 01:41:21.780 I already put this in there. 01:41:24.190 --> 01:41:25.377 Performance standards. 01:41:28.509 --> 01:41:29.710 One of the features of the deck proposal 01:41:29.710 --> 01:41:33.660 is it's pay by performance. 01:41:33.660 --> 01:41:35.340 You gotta clear, 01:41:35.340 --> 01:41:36.920 I think as Aaron pointed out last time, 01:41:36.920 --> 01:41:40.510 it was like, it's based on a net peak element. 01:41:40.510 --> 01:41:42.170 So it's important. 01:41:42.170 --> 01:41:44.220 You got to clear out the important times. 01:41:44.220 --> 01:41:45.607 You gotta be in the market, you gotta be available. 01:41:45.607 --> 01:41:47.980 You're not dispatch, but you gotta be there. 01:41:47.980 --> 01:41:49.880 That's how you get paid. 01:41:49.880 --> 01:41:52.220 Doesn't have to look exactly like that. 01:41:52.220 --> 01:41:53.630 But that's important. 01:41:53.630 --> 01:41:54.950 Seems to make sense, yes. 01:41:54.950 --> 01:41:57.173 Yeah, that's a tremendous feature. 01:41:58.320 --> 01:41:59.913 So I would include that. 01:42:00.960 --> 01:42:03.393 And I would also say you could pay, 01:42:04.280 --> 01:42:07.210 I mean, hell, problem may take care of itself anyway. 01:42:07.210 --> 01:42:10.350 I don't know, we don't need to figure it out today, but. 01:42:10.350 --> 01:42:11.443 And that may be, 01:42:12.690 --> 01:42:15.870 that may take care of itself anyway in that, 01:42:15.870 --> 01:42:20.563 in order to clear, you've gotta be lower heat rate. 01:42:23.010 --> 01:42:24.319 So anyway, we don't need to 01:42:24.319 --> 01:42:25.152 figure that out. I think high level, 01:42:25.152 --> 01:42:26.260 as you say, 01:42:26.260 --> 01:42:29.740 associate that deck value with a performance value 01:42:30.610 --> 01:42:33.540 of the machine of the facility. 01:42:33.540 --> 01:42:35.030 Yeah. 01:42:35.030 --> 01:42:35.920 Be open to 01:42:37.550 --> 01:42:39.600 higher payments for higher performance, 01:42:39.600 --> 01:42:41.280 lower payments, but some payment 01:42:41.280 --> 01:42:42.940 for lower performance slash existing. 01:42:42.940 --> 01:42:45.070 Okay, check. Yeah. 01:42:45.070 --> 01:42:45.903 Work, Lori? 01:42:47.060 --> 01:42:48.460 I think that all sounds, 01:42:48.460 --> 01:42:50.750 I'm fine with what we all are discussing. 01:42:50.750 --> 01:42:52.040 I think we're just scoping out 01:42:52.040 --> 01:42:54.053 at least some general parameters right now. 01:42:59.830 --> 01:43:01.073 I think that that's, 01:43:04.090 --> 01:43:06.010 that's what I've got for principles to include 01:43:06.010 --> 01:43:07.747 in the LSE obligation. 01:43:07.747 --> 01:43:12.747 And my intention is once the staff version is published, 01:43:13.170 --> 01:43:15.930 we'll do kind of a brief, 01:43:15.930 --> 01:43:20.743 abridged version of stakeholder comments for this one. 01:43:21.780 --> 01:43:24.750 I would ask that the stakeholders 01:43:24.750 --> 01:43:27.690 stick to the same parameters of page number and format, 01:43:27.690 --> 01:43:32.677 but also limit their responses to the LSE. 01:43:34.490 --> 01:43:36.317 The load side reliability mechanism 01:43:36.317 --> 01:43:38.030 and the backstop reserve mechanism, 01:43:38.030 --> 01:43:40.053 so we can concentrate on just those. 01:43:43.430 --> 01:43:46.480 And in that spirit, if it works for y'all, 01:43:46.480 --> 01:43:48.890 I'm gonna put a subset of, 01:43:48.890 --> 01:43:52.980 in that left column of LSE obligation, 01:43:52.980 --> 01:43:57.630 I'm gonna put a subset of principles, 01:43:57.630 --> 01:44:00.970 not principles, versions as flavors of an LSE. 01:44:00.970 --> 01:44:02.873 What kind of different flavors of ice cream. 01:44:03.857 --> 01:44:05.660 One of them is decks. One of them is proof of purchase. 01:44:05.660 --> 01:44:07.290 We heard the gentleman from Lubbock 01:44:07.290 --> 01:44:08.810 say it was the transmission studies 01:44:08.810 --> 01:44:10.480 that killed it and won the proof of purchase. 01:44:10.480 --> 01:44:12.080 That proof of purchase was easy. 01:44:14.790 --> 01:44:16.930 My original proposal-- Do the assortment. 01:44:16.930 --> 01:44:18.493 Yes, sir. And then the E3. 01:44:19.930 --> 01:44:21.810 With the understanding that 01:44:21.810 --> 01:44:23.990 none of those as previously presented are 01:44:25.730 --> 01:44:27.313 the final product. 01:44:28.420 --> 01:44:31.110 But stakeholders tell us 01:44:31.110 --> 01:44:33.160 what the pros and cons of each of these are 01:44:33.160 --> 01:44:34.524 and the best way. 01:44:34.524 --> 01:44:37.570 We know we're doing some combination of these. 01:44:37.570 --> 01:44:39.713 So tell us what the best version is. 01:44:41.190 --> 01:44:42.310 Does that work for y'all? 01:44:42.310 --> 01:44:44.593 Yes. That's appropriate. 01:44:44.593 --> 01:44:46.560 All right, any other principles? 01:44:46.560 --> 01:44:49.880 I mean, these principles to include 01:44:51.860 --> 01:44:54.523 in our, I gotta come up with a better name. 01:44:55.850 --> 01:44:57.803 We're renaming everything. Straw man. 01:44:57.803 --> 01:45:01.720 LSE, I'm not good at the naming stuff. 01:45:01.720 --> 01:45:03.360 I tried, but you know. 01:45:03.360 --> 01:45:06.250 Do we want to put in on either-- 01:45:06.250 --> 01:45:08.450 You could have stakeholders. 01:45:08.450 --> 01:45:09.900 Jimmy, you kill me. 01:45:12.490 --> 01:45:15.530 Do we want to put in parameters on the sizing to reflect, 01:45:15.530 --> 01:45:16.690 and this kind of goes for all of them, 01:45:16.690 --> 01:45:18.930 either on an annual or a seasonal basis? 01:45:18.930 --> 01:45:22.257 So that we head things off at the pass on years out 01:45:22.257 --> 01:45:24.430 and all that kind of fluster. 01:45:24.430 --> 01:45:25.410 Or do you want to keep that in? 01:45:25.410 --> 01:45:27.450 I don't know. So how about this. 01:45:27.450 --> 01:45:31.450 Forward pricing for a year, no more than a year, 01:45:31.450 --> 01:45:33.023 which is an element of deck. 01:45:34.320 --> 01:45:35.153 Aim for, 01:45:36.690 --> 01:45:39.540 we need to figure out sizing. 01:45:39.540 --> 01:45:40.960 I don't know the answer to that. 01:45:40.960 --> 01:45:43.270 Like I said, I think my original shot was too big. 01:45:43.270 --> 01:45:47.820 I think the kind of share, the other one's too low. 01:45:47.820 --> 01:45:50.340 But I think the important part is it's dynamic 01:45:50.340 --> 01:45:54.900 and it responds, and it doesn't have to be net peak load, 01:45:54.900 --> 01:45:57.670 but that's because that peak load 01:45:57.670 --> 01:45:59.040 isn't just a blunt instrument. 01:45:59.040 --> 01:46:01.290 Hey, go buy everything we could possibly need. 01:46:01.290 --> 01:46:03.460 It accounts for the intermittence. 01:46:04.796 --> 01:46:07.363 And the second part of that is, 01:46:08.921 --> 01:46:12.623 two follow-ons is one, if we set a dynamic metric, 01:46:13.640 --> 01:46:15.890 we can just fire and forget. 01:46:15.890 --> 01:46:17.290 We don't have to revisit it all the time. 01:46:17.290 --> 01:46:19.410 We don't have to resize it every year. 01:46:19.410 --> 01:46:20.402 This is the metric. 01:46:20.402 --> 01:46:21.620 This is what we're gonna do. 01:46:21.620 --> 01:46:22.730 And more importantly, 01:46:22.730 --> 01:46:25.550 and I think this is something that you care about, 01:46:25.550 --> 01:46:27.673 is that if you do it on a dynamic, 01:46:28.910 --> 01:46:31.303 if you use a dynamic sizing tool, 01:46:33.050 --> 01:46:36.293 presumably around key stress, periods of stress, 01:46:37.990 --> 01:46:42.250 that also gives you an opportunity to utilize 01:46:42.250 --> 01:46:44.550 the 4CP phenomenon 01:46:44.550 --> 01:46:48.150 where people know that that's where they either make money 01:46:48.150 --> 01:46:51.540 or they get penalized if they don't show up. 01:46:51.540 --> 01:46:52.930 Yeah, that feeds in, 01:46:52.930 --> 01:46:54.910 that's what I was gonna ask next is, 01:46:54.910 --> 01:46:56.370 do you want, peak load, 01:46:56.370 --> 01:46:58.490 peak net load is kind of important. 01:46:58.490 --> 01:47:00.470 I think we've all identified that. 01:47:00.470 --> 01:47:03.210 So do you want as a principle 01:47:03.210 --> 01:47:06.310 that it should be based around the past year's 01:47:06.310 --> 01:47:09.520 peak net load intervals from the past year, 01:47:09.520 --> 01:47:11.310 or leave that open? 01:47:12.380 --> 01:47:13.660 'Cause I just want it reflective of 01:47:13.660 --> 01:47:15.710 actual load participation. Yeah. 01:47:15.710 --> 01:47:16.550 I don't know if it's last year's 01:47:16.550 --> 01:47:18.677 or the projection for this year and next year. 01:47:18.677 --> 01:47:19.510 I don't know. 01:47:19.510 --> 01:47:21.930 But yes, net peak load dynamic, 01:47:21.930 --> 01:47:23.950 based on some dynamic load metric. 01:47:23.950 --> 01:47:25.337 We don't have to figure that out right now. 01:47:25.337 --> 01:47:27.030 Does that work for everybody? 01:47:27.030 --> 01:47:28.130 That's fine. Yes. 01:47:30.670 --> 01:47:32.440 On the ACP portion, 01:47:32.440 --> 01:47:34.700 I thought this was a virtue, 01:47:34.700 --> 01:47:37.250 and I believe everybody did comment. 01:47:37.250 --> 01:47:38.193 Any penalty, 01:47:40.290 --> 01:47:42.520 firming obligations should act as a circuit breaker 01:47:42.520 --> 01:47:45.683 and offset the cost of ancillary services to it. 01:47:47.308 --> 01:47:51.030 That seems like a no brainer to incorporate from the outset. 01:47:51.030 --> 01:47:52.053 Yeah, absolutely. 01:47:54.830 --> 01:47:56.300 Yeah, yeah. 01:47:56.300 --> 01:47:57.133 Just use, 01:47:59.640 --> 01:48:01.040 well, hold on. 01:48:01.040 --> 01:48:06.040 Yes and I think, I can't remember if we talked about this. 01:48:06.310 --> 01:48:07.610 It may be in there, 01:48:07.610 --> 01:48:10.160 but not only use it to offset the cost, 01:48:10.160 --> 01:48:11.580 but to procure more 01:48:12.770 --> 01:48:15.463 so that you get your new bill one way or the other. 01:48:17.690 --> 01:48:19.110 Does that make sense? 01:48:19.110 --> 01:48:20.670 Yeah, if you don't, I mean, 01:48:20.670 --> 01:48:22.180 if you're not getting the decks, 01:48:22.180 --> 01:48:25.120 if you're not getting generation resulting from the decks, 01:48:25.120 --> 01:48:26.320 something needs to get built. 01:48:26.320 --> 01:48:27.500 If you're not getting more dispatchable 01:48:27.500 --> 01:48:31.112 on the top end from your reliability mechanism-- 01:48:31.112 --> 01:48:31.945 I'm fine with that, yes sir. 01:48:31.945 --> 01:48:34.240 Take that penalty and buy it on the backend. 01:48:34.240 --> 01:48:35.529 Yes. Right. 01:48:35.529 --> 01:48:36.362 Does that work? Yes. 01:48:36.362 --> 01:48:37.270 In principle? Yes. 01:48:38.760 --> 01:48:39.753 Yeah. Okay. 01:48:41.120 --> 01:48:42.362 Keep going. That's all. 01:48:42.362 --> 01:48:44.173 How many was that? 01:48:45.052 --> 01:48:46.070 Got a lot. 01:48:46.070 --> 01:48:47.421 Don't ask. Ben, did you catch that? 01:48:47.421 --> 01:48:49.671 (laughing) 01:48:50.520 --> 01:48:51.370 I think I'm done. 01:48:53.270 --> 01:48:56.183 Any other thoughts on principles to be added? 01:48:57.740 --> 01:48:59.470 No, I think-- We got a lot. 01:48:59.470 --> 01:49:02.160 Yeah, I think y'all came up with a suite of 01:49:02.160 --> 01:49:04.147 good starting principles. 01:49:04.147 --> 01:49:05.523 I don't have anything to add at this time. 01:49:06.718 --> 01:49:07.551 I'm sorry? I don't have anything 01:49:07.551 --> 01:49:09.218 to add at this time. 01:49:12.146 --> 01:49:13.147 Do you think it's helpful, 01:49:13.147 --> 01:49:15.910 and I know you laid out some parameters for the backstop 01:49:15.910 --> 01:49:18.093 reserve mechanisms. We can go through those too. 01:49:22.161 --> 01:49:25.213 And you did include some of the main pieces that I had. 01:49:26.182 --> 01:49:28.932 I tried to but it was late, so. 01:49:29.890 --> 01:49:31.560 I guess the first one is 01:49:31.560 --> 01:49:34.100 procuring dispatchable resources using a framework 01:49:34.100 --> 01:49:35.730 similar to an existing framework. 01:49:35.730 --> 01:49:38.780 And I think, and we talked about this 01:49:38.780 --> 01:49:41.910 and I think that the goal here is to try to get this 01:49:41.910 --> 01:49:44.190 mechanism in place as soon as possible. 01:49:44.190 --> 01:49:46.870 And in my proposal I had put in 01:49:46.870 --> 01:49:47.900 kind of two options, 01:49:47.900 --> 01:49:50.840 a competitive RFP process or a competitive auction. 01:49:50.840 --> 01:49:54.600 And I know in your memo, you laid out potentially, 01:49:54.600 --> 01:49:56.870 I think black start and ERS are both 01:49:56.870 --> 01:49:59.650 competitive RFP processes at ERCOT. 01:49:59.650 --> 01:50:04.650 And maybe if there's some feedback from Kenan as to, 01:50:04.680 --> 01:50:06.740 I know we've had this discussion already and, 01:50:06.740 --> 01:50:09.290 but if there's additional feedback you can provide us on 01:50:09.290 --> 01:50:13.580 maybe we use a black start sort of framework, 01:50:13.580 --> 01:50:15.253 if that's any more efficient. 01:50:16.170 --> 01:50:18.320 Any added feedback on implementation 01:50:19.390 --> 01:50:20.450 in the most efficient manner? 01:50:20.450 --> 01:50:22.780 Is that-- I don't know that, 01:50:22.780 --> 01:50:24.340 happy to hear from Kenan, 01:50:24.340 --> 01:50:25.950 but I don't know that we need to figure it out today. 01:50:25.950 --> 01:50:28.010 My only intention in saying that was 01:50:28.960 --> 01:50:29.793 get it in place. 01:50:29.793 --> 01:50:34.010 Use whatever we can to get it in place as soon as possible. 01:50:34.010 --> 01:50:36.850 If we can use an existing RFP framework, 01:50:36.850 --> 01:50:39.430 anything like that, and copy and paste from that, 01:50:39.430 --> 01:50:42.030 rather than build something completely new from scratch, 01:50:42.030 --> 01:50:44.420 that was my intention on that. 01:50:44.420 --> 01:50:46.140 Which I think is your sentiment. 01:50:46.140 --> 01:50:48.330 I just said the same thing more clumsily. 01:50:48.330 --> 01:50:49.163 That's fine. 01:50:50.337 --> 01:50:51.754 I think that the, 01:50:53.154 --> 01:50:54.343 I'm kind of going through here, 01:50:55.280 --> 01:50:59.020 so that takes care of how we will procure SRS, 01:50:59.020 --> 01:51:01.543 what resources will qualify for SRS. 01:51:03.360 --> 01:51:06.500 I had in my proposal, and I'm not sure there's 01:51:07.750 --> 01:51:12.450 anything in there yet, but that's a key question. 01:51:12.450 --> 01:51:17.270 I had opened it up for new and existing credited resources. 01:51:17.270 --> 01:51:20.580 And what I mean by that are obviously weatherized. 01:51:20.580 --> 01:51:22.310 Generation resources will have to be weatherized 01:51:22.310 --> 01:51:23.710 for our weatherization role. 01:51:25.770 --> 01:51:28.280 Potentially a review of supply arrangement, 01:51:28.280 --> 01:51:29.260 fuel supplier arrangements. 01:51:29.260 --> 01:51:31.550 Just making sure the resources we're getting 01:51:31.550 --> 01:51:33.800 are accredited and seasonally tested 01:51:33.800 --> 01:51:37.006 so that we could avoid the cash for clunkers concept. 01:51:37.006 --> 01:51:38.800 We would not want clunkers to be 01:51:38.800 --> 01:51:40.670 part of this program. Black start though, right? 01:51:40.670 --> 01:51:42.080 I mean, you want to test them. 01:51:42.080 --> 01:51:43.740 Yep, yep, seasonally. Yep. 01:51:43.740 --> 01:51:45.640 In both of these, we want them tested. 01:51:46.500 --> 01:51:48.890 I would ask, in your original proposal, 01:51:48.890 --> 01:51:50.850 it was two hours or more. 01:51:50.850 --> 01:51:55.200 So very much like the idea of it being 01:51:55.200 --> 01:51:58.140 a broader universe of assets we can include. 01:51:58.140 --> 01:52:00.141 I would put a cap on it. 01:52:00.141 --> 01:52:02.450 I would, I don't know what that is, 01:52:02.450 --> 01:52:06.143 but I don't, to avoid the cash for clunkers phenomenon. 01:52:07.490 --> 01:52:09.580 I don't know what it is, but say it's got to either, 01:52:09.580 --> 01:52:11.730 it either gotta be at, I wouldn't say heat rate, 01:52:11.730 --> 01:52:13.963 but a start time or some, 01:52:14.900 --> 01:52:17.863 it can't be the, 01:52:19.440 --> 01:52:22.850 the haunted house cobweb version of a generator 01:52:22.850 --> 01:52:23.890 sitting out there. 01:52:23.890 --> 01:52:24.723 It needs to be-- 01:52:25.610 --> 01:52:27.672 Haunted house? It needs to be performing, 01:52:27.672 --> 01:52:29.040 a well-performing asset. 01:52:29.040 --> 01:52:30.097 Yes, agreed. 01:52:30.097 --> 01:52:32.123 And I'm certainly open to exploring that more. 01:52:32.123 --> 01:52:35.880 My initial, I guess, 01:52:35.880 --> 01:52:37.820 parameter that I put out there was just intended 01:52:37.820 --> 01:52:39.370 to try to capture a little bit more than peekers 01:52:39.370 --> 01:52:40.993 to give our kind of 01:52:40.993 --> 01:52:42.860 operational flexibility. It's immensely valuable. 01:52:42.860 --> 01:52:45.286 Yes, agree with that. But I can work with-- 01:52:45.286 --> 01:52:46.140 Just book end it. 01:52:46.140 --> 01:52:47.263 Sure, okay. 01:52:51.500 --> 01:52:53.673 I think, let me see here. 01:52:54.630 --> 01:52:56.210 And oh, and one thing I do want to add 01:52:56.210 --> 01:52:58.710 is not only new and existing dispatchable resources, 01:52:58.710 --> 01:53:01.200 but potentially demand response, 01:53:01.200 --> 01:53:02.650 depending on how we set up the parameters. 01:53:02.650 --> 01:53:03.523 If there's a way, 01:53:04.410 --> 01:53:06.400 if there's an opportunity there, 01:53:06.400 --> 01:53:08.890 I don't want to close the door, but I think it's gonna be, 01:53:08.890 --> 01:53:10.970 depending on when you have to get synced up 01:53:10.970 --> 01:53:12.570 for how long and how many days. 01:53:12.570 --> 01:53:15.656 Yeah, I'm willing to leave it in there but that's-- 01:53:15.656 --> 01:53:17.667 We don't want to cannibalize ERS either, so. 01:53:17.667 --> 01:53:18.811 We're getting-- 01:53:18.811 --> 01:53:19.770 Right, okay. Getting in the water. 01:53:19.770 --> 01:53:20.703 Okay. All right. 01:53:22.060 --> 01:53:24.010 Well, that is ERS. 01:53:24.010 --> 01:53:25.510 ERS is the backstop version of 01:53:26.874 --> 01:53:28.434 demand response or flood management. 01:53:28.434 --> 01:53:29.580 That's correct. 01:53:29.580 --> 01:53:31.080 Okay. 01:53:31.080 --> 01:53:32.210 When will it be deployed, 01:53:32.210 --> 01:53:33.570 that's your principle in here, 01:53:33.570 --> 01:53:35.340 reserves will be with health in the market 01:53:35.340 --> 01:53:37.230 until HCAP is reached. 01:53:37.230 --> 01:53:39.920 I have been working with ERCOT and Brattle 01:53:39.920 --> 01:53:43.630 on addressing the right price point to bring them in. 01:53:43.630 --> 01:53:46.980 I think there are obviously some feedback we've gotten 01:53:46.980 --> 01:53:48.580 that recommended the price cap, 01:53:48.580 --> 01:53:52.360 and the price cap is the LMP plus the ORDC adder, 01:53:52.360 --> 01:53:54.730 'cause sometimes we can be in tight conditions 01:53:54.730 --> 01:53:57.160 and the LMP is still not at the price cap. 01:53:57.160 --> 01:54:00.370 But there are some stakeholders out there 01:54:00.370 --> 01:54:01.970 believe they should be at the market clearing price. 01:54:01.970 --> 01:54:04.420 So I want to make sure that we scope that out 01:54:04.420 --> 01:54:07.230 in a way that doesn't result in price reversal 01:54:07.230 --> 01:54:09.360 and negative price impacts. 01:54:09.360 --> 01:54:11.700 So I'll continue the discussion with 01:54:11.700 --> 01:54:13.480 Brattle and Kenan and stakeholders. 01:54:13.480 --> 01:54:16.330 It doesn't have to be withheld to HCAP. 01:54:16.330 --> 01:54:18.360 Whatever it is, but I think the principle 01:54:18.360 --> 01:54:23.360 needs to be withheld until it's really a backstop. 01:54:23.740 --> 01:54:24.573 Yes. 01:54:24.573 --> 01:54:26.890 I don't know what the exact price mechanism is, but. 01:54:27.834 --> 01:54:30.170 We can start at HCAP, but I'm very much open to hearing 01:54:30.170 --> 01:54:32.231 if there are any negative consequences 01:54:32.231 --> 01:54:34.200 of deployment price cap. 01:54:34.200 --> 01:54:36.800 Yes, but let's make sure it's, I agree, 01:54:36.800 --> 01:54:39.805 and we can sort that out as part of the development. 01:54:39.805 --> 01:54:40.638 Sure. 01:54:40.638 --> 01:54:43.247 But it is important that it is truly-- 01:54:44.670 --> 01:54:45.880 Backstop. Backstop. 01:54:45.880 --> 01:54:46.713 Absolutely. 01:54:46.713 --> 01:54:48.930 We don't want to tell the market 01:54:48.930 --> 01:54:50.363 we're withholding supply. 01:54:52.120 --> 01:54:54.280 Break glass in case of emergency. 01:54:54.280 --> 01:54:59.040 And it's only coming out at MCL 3000, 01:54:59.040 --> 01:55:02.350 PRC, but we get nervous and say, 01:55:02.350 --> 01:55:05.210 ooh, 3500 PR is really tight. 01:55:05.210 --> 01:55:06.350 Let's dump it in there. 01:55:06.350 --> 01:55:07.550 That's what we want to avoid. 01:55:07.550 --> 01:55:09.363 Right, absolutely, agreed. 01:55:10.768 --> 01:55:11.601 Does that work? 01:55:11.601 --> 01:55:12.434 Yup. Yes, sir. 01:55:12.434 --> 01:55:13.840 Okay, so continue exploring. 01:55:13.840 --> 01:55:16.501 Let me just, go on, finish. 01:55:16.501 --> 01:55:17.611 Go, I'm done. 01:55:17.611 --> 01:55:18.444 Please go. 01:55:18.444 --> 01:55:20.100 No, I was just gonna say something about 01:55:21.330 --> 01:55:24.930 this is kind of off-market but the, 01:55:24.930 --> 01:55:29.530 as we look at this load serving entity obligation 01:55:29.530 --> 01:55:31.230 and these other mechanisms that 01:55:31.230 --> 01:55:33.890 I think the question that I would have is, 01:55:33.890 --> 01:55:35.950 mentioned this before that, 01:55:35.950 --> 01:55:40.040 so if we're requiring entities 01:55:40.040 --> 01:55:43.223 to provide a certain amount of resources in the market, 01:55:44.060 --> 01:55:46.030 do we need, what is this, 01:55:46.030 --> 01:55:48.630 what is the need for our scarcity pricing mechanism? 01:55:51.350 --> 01:55:52.700 At all? 01:55:52.700 --> 01:55:53.540 I think, I mean, 01:55:53.540 --> 01:55:56.630 if we got to 100% load serving entity obligation, 01:55:56.630 --> 01:56:00.186 I would say that you would have no reason to have, 01:56:00.186 --> 01:56:03.380 I mean, you could put a price cap at 500 bucks or 1000, 01:56:03.380 --> 01:56:05.620 'cause you're basically guaranteed on the supply side 01:56:05.620 --> 01:56:08.630 that there's no reason to have both. 01:56:08.630 --> 01:56:12.390 So all I'm saying here in this part of this discussion is 01:56:12.390 --> 01:56:14.570 that's an issue that I'm gonna bring up at a later time, 01:56:14.570 --> 01:56:16.550 once we figure out all this analytics 01:56:16.550 --> 01:56:18.150 and what these things look like. 01:56:19.900 --> 01:56:21.980 Tell me it's a-- How about this. 01:56:21.980 --> 01:56:22.813 I agree in principle. 01:56:22.813 --> 01:56:26.477 If we're, we don't need to over correct. 01:56:29.470 --> 01:56:31.340 Can we incorporate that analysis 01:56:31.340 --> 01:56:34.433 into the odd number year review of ORDC? 01:56:36.630 --> 01:56:38.590 And say-- Yeah, I think so. 01:56:38.590 --> 01:56:40.620 And say every two years 01:56:40.620 --> 01:56:42.670 when ERCOT and staff comes back 01:56:42.670 --> 01:56:46.120 and presents that to your review of the new ORDC, 01:56:46.120 --> 01:56:47.833 part of that needs to be, 01:56:49.060 --> 01:56:51.780 part of that now analysis needs to include 01:56:53.460 --> 01:56:56.990 historic utilization, number of hours of ORDC, 01:56:56.990 --> 01:57:01.990 and analysis of efficacy 01:57:02.300 --> 01:57:05.433 under the market construct at that time. 01:57:05.433 --> 01:57:07.717 Does that make sense? I think that's right. 01:57:07.717 --> 01:57:11.001 Because even under some kind of a load serving obligation, 01:57:11.001 --> 01:57:12.300 you still have to have operational reliability. 01:57:12.300 --> 01:57:13.640 You still have the real-time market 01:57:13.640 --> 01:57:16.280 and the ancillary market working in constructs. 01:57:16.280 --> 01:57:18.560 So I think kind of bake it into 01:57:20.350 --> 01:57:23.020 your odd number year review. 01:57:23.020 --> 01:57:24.290 Think that makes sense. Good for discussion. 01:57:24.290 --> 01:57:25.510 Yeah, absolutely. 01:57:25.510 --> 01:57:26.420 Well, I don't, I mean, 01:57:26.420 --> 01:57:28.940 I don't want these good ideas to just drift away 01:57:28.940 --> 01:57:30.130 because we move on to other things. 01:57:30.130 --> 01:57:31.390 That's why I'm trying to build in 01:57:31.390 --> 01:57:33.463 a trigger and a mechanism so that we, 01:57:34.730 --> 01:57:37.130 or who, the next Commission. 01:57:37.130 --> 01:57:38.270 The next one. 01:57:38.270 --> 01:57:41.390 A review of performance would be prudent of ORDC. 01:57:41.390 --> 01:57:43.870 And we've historically had those from time to time, 01:57:43.870 --> 01:57:46.337 but a biannual review, 01:57:47.910 --> 01:57:49.750 and then those associated 01:57:50.920 --> 01:57:53.480 performance reviews is prudent. 01:57:53.480 --> 01:57:56.410 I mean, we need to do that anyway, so. 01:57:56.410 --> 01:57:58.237 And let me just say it a different way. 01:57:58.237 --> 01:58:00.223 And that is, in my opinion, 01:58:02.570 --> 01:58:05.140 if we move towards something like a capacity market, 01:58:05.140 --> 01:58:07.430 whatever that looks like, whatever it's called, 01:58:07.430 --> 01:58:09.950 more guaranteed resources in the market at price cap 01:58:09.950 --> 01:58:13.490 becomes something that should go down much lower. 01:58:13.490 --> 01:58:14.980 Right. 01:58:14.980 --> 01:58:16.615 If we're guaranteeing that the resources 01:58:16.615 --> 01:58:18.010 are gonna be in the market then-- 01:58:18.010 --> 01:58:19.090 It has tended to, yeah. 01:58:19.090 --> 01:58:22.293 The need for scarcity pricing becomes very thin. 01:58:24.110 --> 01:58:26.420 Operational issues set aside. 01:58:26.420 --> 01:58:28.320 But I mean... 01:58:30.810 --> 01:58:32.114 Good concept keep in mind. And I am, in no way, 01:58:32.114 --> 01:58:33.349 endorsing a capacity market. No way, me neither. 01:58:33.349 --> 01:58:35.599 (laughing) 01:58:36.460 --> 01:58:38.143 Another haunted house. 01:58:38.143 --> 01:58:39.870 (laughing) 01:58:39.870 --> 01:58:41.488 I appreciate your time. 01:58:41.488 --> 01:58:43.640 (laughing) 01:58:43.640 --> 01:58:45.393 Okay, so the next one is sizing. 01:58:46.470 --> 01:58:47.410 The sizing of it. 01:58:47.410 --> 01:58:48.930 And I think in here, Chairman, 01:58:48.930 --> 01:58:50.920 like you have size to address 01:58:50.920 --> 01:58:53.150 the need based on net peak load variability. 01:58:53.150 --> 01:58:54.803 That is an aspect of my proposal. 01:58:55.890 --> 01:58:56.773 Peak net load. 01:58:57.640 --> 01:58:59.380 The next one is establish performance standards 01:58:59.380 --> 01:59:00.350 that are regularly tested. 01:59:00.350 --> 01:59:01.390 We already talked about that. 01:59:01.390 --> 01:59:04.000 So if we are gonna set this up to be 01:59:04.000 --> 01:59:05.440 one year forward on a seasonal basis, 01:59:05.440 --> 01:59:07.163 you'd want seasonal testing. 01:59:09.420 --> 01:59:13.390 Robust non-performance penalties and clawbacks agreed. 01:59:13.390 --> 01:59:16.450 Definitely would want to have a strong penalty 01:59:16.450 --> 01:59:18.140 and clawback of any payment 01:59:18.140 --> 01:59:21.243 if a resource fails to perform under this mechanism. 01:59:22.260 --> 01:59:24.620 Cost allocation based on load ratio share 01:59:24.620 --> 01:59:27.620 as measured by coincident net peak load intervals. 01:59:27.620 --> 01:59:30.440 I think that is an effort that we're, 01:59:30.440 --> 01:59:33.370 I had included that aspect in there, 01:59:33.370 --> 01:59:34.980 to not only base it on net peak load 01:59:34.980 --> 01:59:36.710 consistent with what we're trying to size 01:59:36.710 --> 01:59:39.430 this dynamic flexible tool too, 01:59:39.430 --> 01:59:42.323 but also in an effort to address demand response. 01:59:44.110 --> 01:59:47.163 I think those are, I agree with your principles. 01:59:48.050 --> 01:59:50.280 Let's see if there's anything else that 01:59:54.289 --> 01:59:55.870 is from my memo that might need to be included. 01:59:55.870 --> 01:59:59.483 I think you captured the main points. 02:00:01.080 --> 02:00:01.913 Okay. 02:00:03.100 --> 02:00:04.270 I guess generally speaking, 02:00:04.270 --> 02:00:06.800 in terms of implementation and considering 02:00:06.800 --> 02:00:08.180 this mechanism in conjunction 02:00:08.180 --> 02:00:10.290 with some form of modality obligation, 02:00:10.290 --> 02:00:12.197 it might be helpful to understand 02:00:12.197 --> 02:00:13.750 how they could work together. 02:00:13.750 --> 02:00:16.240 Let's just say it's broader, 02:00:16.240 --> 02:00:18.493 or maybe it's more narrow and then broader. 02:00:19.820 --> 02:00:22.010 Maybe there's an interim way to use 02:00:22.010 --> 02:00:25.110 both in construct at the beginning. 02:00:25.110 --> 02:00:27.190 And then as you move towards a broader framework, 02:00:27.190 --> 02:00:28.570 as we've gotten some common terms-- 02:00:28.570 --> 02:00:29.860 In terms of the set, you mean? 02:00:29.860 --> 02:00:32.280 So that it shrinks proportional 02:00:32.280 --> 02:00:35.300 to whatever the performance of the LSE obligation is 02:00:35.300 --> 02:00:36.303 in terms of new gen. 02:00:38.320 --> 02:00:40.824 So both are dynamic in sizing. 02:00:40.824 --> 02:00:42.083 We want to size them appropriately. 02:00:42.083 --> 02:00:43.623 We don't want to be overly gluttonous. 02:00:44.650 --> 02:00:46.680 So it's somewhat interrelated. 02:00:46.680 --> 02:00:50.403 Is there a way to make them correspondingly complimentary? 02:00:51.580 --> 02:00:54.320 Say that five times fast. 02:00:54.320 --> 02:00:55.840 Is there a way to 02:00:56.930 --> 02:01:00.970 make them complimentary in terms of dynamic 02:01:02.120 --> 02:01:05.300 sizing of both links? I have no idea. 02:01:05.300 --> 02:01:08.777 Something to think about. There's a potential to. 02:01:08.777 --> 02:01:11.217 And that can also change over time. 02:01:11.217 --> 02:01:15.410 As you said, the backstop can be a bridge, 02:01:15.410 --> 02:01:18.260 so it may need to start bigger. 02:01:18.260 --> 02:01:20.469 And as whatever the sizing, 02:01:20.469 --> 02:01:22.833 I mean, well, I guess think about it this way. 02:01:23.860 --> 02:01:24.880 The bridge is gonna be first. 02:01:24.880 --> 02:01:26.410 The backstop bridge is gonna be first. 02:01:26.410 --> 02:01:28.233 So let's size that for the need. 02:01:29.290 --> 02:01:31.743 There's the kind of immediate need. 02:01:32.800 --> 02:01:35.613 And then yes, they can be, 02:01:37.500 --> 02:01:42.370 have a correlated sizing as they phase in. 02:01:42.370 --> 02:01:45.780 And yes, it's too much to figure out. 02:01:45.780 --> 02:01:46.700 I mean, we're not gonna figure it out. 02:01:46.700 --> 02:01:49.233 But yes, in principle, yes let's-- Right. 02:01:49.233 --> 02:01:50.787 And I guess what I'm saying is 02:01:50.787 --> 02:01:51.950 we can get maybe some, 02:01:51.950 --> 02:01:54.470 is we add that question in there 02:01:54.470 --> 02:01:55.480 to the stakeholder comments. 02:01:55.480 --> 02:01:57.420 I think I'd like to learn a little bit more about that 02:01:57.420 --> 02:01:59.050 because I know there's been some contention on, 02:01:59.050 --> 02:02:01.750 well, the deck program is just for new 02:02:01.750 --> 02:02:03.710 and then SRS just for old. 02:02:03.710 --> 02:02:05.533 Is there any synergies we can gain? 02:02:06.380 --> 02:02:07.630 Well, I think that's, I mean, 02:02:07.630 --> 02:02:11.008 that's part of the principles that we're-- 02:02:11.008 --> 02:02:12.208 I mean, it's on a steady scale. 02:02:12.208 --> 02:02:14.080 I mean, and how it's utilized. 02:02:14.080 --> 02:02:18.690 Well but that's, yes, it depends on 02:02:18.690 --> 02:02:21.150 what the develop, what we learn in the development process, 02:02:21.150 --> 02:02:25.120 but it's also, well, it's not either or. 02:02:25.120 --> 02:02:26.820 It's like-- By definition, 02:02:26.820 --> 02:02:30.610 your program will be old just because it's here now 02:02:30.610 --> 02:02:32.043 and we need it now. 02:02:32.043 --> 02:02:34.639 I mean, it's facilities that are on the ground. 02:02:34.639 --> 02:02:36.972 Existing. Yeah, existing. 02:02:40.330 --> 02:02:44.450 The load reliability mechanism, 02:02:44.450 --> 02:02:46.840 may have some elements of existing. 02:02:46.840 --> 02:02:49.012 It may have some, it will have elements, 02:02:49.012 --> 02:02:50.570 it has to have elements in it. 02:02:50.570 --> 02:02:52.613 It has to, or we failed miserably. 02:02:54.320 --> 02:02:55.640 We don't know what that looks like yet, 02:02:55.640 --> 02:02:58.850 but yes, I absolutely agree we should keep, 02:02:58.850 --> 02:03:03.700 we should consider how to size those 02:03:03.700 --> 02:03:05.210 in a complementary fashion. 02:03:05.210 --> 02:03:07.314 Okay, great. Thanks. Does that work? 02:03:07.314 --> 02:03:08.674 Mm-hmm, yes sir. 02:03:08.674 --> 02:03:10.070 All right. 02:03:10.070 --> 02:03:10.903 Good deal. 02:03:10.903 --> 02:03:14.163 Any other thoughts or principles on the backstop reserve? 02:03:15.160 --> 02:03:16.110 Nope. No, sir. 02:03:17.120 --> 02:03:18.550 No, thank you. 02:03:18.550 --> 02:03:19.383 All right. 02:03:23.703 --> 02:03:24.536 I think that 02:03:26.140 --> 02:03:28.650 gets us pretty dam close to 02:03:28.650 --> 02:03:30.800 covering everything we need to cover today. 02:03:32.520 --> 02:03:33.460 Anything else? 02:03:33.460 --> 02:03:36.010 I've said everything I need to say, thank you. 02:03:36.010 --> 02:03:37.210 You ready to head home? 02:03:37.210 --> 02:03:39.040 No. (laughing) 02:03:39.040 --> 02:03:39.920 I think we got a meeting tomorrow. 02:03:39.920 --> 02:03:41.879 We'll be back tomorrow, yeah. 02:03:41.879 --> 02:03:42.984 Oh yeah, y'all do. 02:03:42.984 --> 02:03:45.234 (laughing) 02:03:46.530 --> 02:03:48.020 All right. 02:03:48.020 --> 02:03:50.473 None of this is easy, none of it's straightforward. 02:03:51.930 --> 02:03:54.810 If it was easy, it would've already been done. 02:03:54.810 --> 02:03:56.530 Can I ask one question about 02:03:58.170 --> 02:04:00.050 stakeholder feedback? 02:04:00.050 --> 02:04:03.663 What is the plan for finalizing this, 02:04:04.650 --> 02:04:08.200 refiling it and sending it out for stakeholder comment? 02:04:08.200 --> 02:04:11.440 Ben has been diligently incorporating 02:04:11.440 --> 02:04:14.500 the commentary and principles and notes 02:04:14.500 --> 02:04:15.823 from what I've, right? 02:04:16.810 --> 02:04:18.455 We're not going through all that again. 02:04:18.455 --> 02:04:19.737 (laughing) 02:04:19.737 --> 02:04:20.570 Got that all? 02:04:20.570 --> 02:04:22.430 It's all in there, it's forwarded, so. 02:04:22.430 --> 02:04:23.263 Okay. 02:04:24.250 --> 02:04:26.650 So he'll provide an updated draft. 02:04:26.650 --> 02:04:29.720 I think he can circulate those to the offices. 02:04:29.720 --> 02:04:33.280 I think it's pretty much squared away on what we need 02:04:33.280 --> 02:04:34.763 and what we want to include. 02:04:36.110 --> 02:04:38.040 As in terms, I think we're gonna... 02:04:41.090 --> 02:04:41.923 Don't quote me on this, 02:04:41.923 --> 02:04:43.690 from what I remember the calendar 02:04:45.460 --> 02:04:48.300 called for stakeholder comments by the 10th, 02:04:48.300 --> 02:04:49.700 which I know is a quick turnaround. 02:04:49.700 --> 02:04:51.850 But this whole thing is a quick turnaround. 02:04:53.500 --> 02:04:55.580 And I would ask that under the same, 02:04:55.580 --> 02:04:58.060 we use the same abbreviated formatting 02:04:58.060 --> 02:05:00.960 for the stakeholder responses that we've used in the past. 02:05:01.890 --> 02:05:05.250 And I would ask stakeholders to limit their feedback 02:05:05.250 --> 02:05:08.597 to the phase two proposals. 02:05:11.140 --> 02:05:16.110 The load side, the load reliability mechanism 02:05:16.110 --> 02:05:20.770 and the backstop reserve-- Service. 02:05:20.770 --> 02:05:22.043 I really got to work on the naming here. 02:05:22.043 --> 02:05:24.693 We'll come up with something. We'll get something. 02:05:26.340 --> 02:05:27.510 Focus the comments on those, 02:05:27.510 --> 02:05:28.710 their feedback on those. 02:05:30.570 --> 02:05:33.410 And then in the meantime, 02:05:33.410 --> 02:05:38.180 we've got a list of, I guess, non-market design elements 02:05:38.180 --> 02:05:41.513 I can follow up independently with each of your offices on. 02:05:44.275 --> 02:05:47.647 And I will, as I promised, I will get, 02:05:48.890 --> 02:05:51.490 I will work on a more crystallized 02:05:51.490 --> 02:05:54.223 implementation methodology. 02:05:56.980 --> 02:06:01.343 I think a lot of it is gonna go to ERCOT. 02:06:02.920 --> 02:06:07.920 But I know we all will stay involved. 02:06:09.470 --> 02:06:10.540 But I also know that 02:06:11.890 --> 02:06:13.943 we can't keep up this operational pace. 02:06:16.172 --> 02:06:17.020 And I'm glad we're making, 02:06:17.020 --> 02:06:20.423 we've made tremendous progress, made some decisions. 02:06:21.500 --> 02:06:24.430 And we've got, I think, a clear path forward that will 02:06:26.100 --> 02:06:29.960 implement the tremendous changes we've made so far 02:06:29.960 --> 02:06:32.500 and continue to build on that as we move 02:06:33.850 --> 02:06:38.850 into the next phase of this grand adventure. 02:06:41.400 --> 02:06:42.233 Yes, sir. 02:06:43.218 --> 02:06:44.160 That work? Thank you. 02:06:44.160 --> 02:06:45.270 Thank you for your consideration. 02:06:45.270 --> 02:06:46.103 Yes, ma'am. 02:06:46.103 --> 02:06:47.550 Thank y'all for all the hard work in this. 02:06:47.550 --> 02:06:48.383 This is-- 02:06:48.383 --> 02:06:50.600 Thank you for consideration, Chairman. 02:06:50.600 --> 02:06:51.433 Absolutely. 02:06:53.570 --> 02:06:55.890 None of this is, like I said, none of it's easy. 02:06:55.890 --> 02:06:57.340 None of it's straightforward. 02:06:59.730 --> 02:07:01.270 All right. 02:07:01.270 --> 02:07:03.450 Having no further business before this Commission, 02:07:03.450 --> 02:07:05.350 this meeting with Public Utility Commission of Texas 02:07:05.350 --> 02:07:06.936 is hereby adjourned. 02:07:06.936 --> 02:07:09.436 (bangs gavel)