(gavel banging)
-: The meeting of the Public Utility Commission of Texas
is now called back into order.
We will be picking up our agenda,
the last item we did was number item 17,
I believe Mr. Janae, which will move us all
the way through to.
Man: We're gonna send it up to 21 then, I believe.
-: All right, item 21, I don't have anything.
Do you wanna?
(indistinct)
We're gonna go ahead and take up item 22.
-: 20, we've already called that
so we just need to pull back up.
-: Let's pull it back up.
-: Mr Smeltzer.
Man: May I approach the bench?
-: Please.
-: Did you go to law school?
(group laughing)
(indistinct chatter)
-: We'll be doing a credentials review after the meeting.
(group laughing)
-: David Smeltzer, Commission staff,
we returned and talk about
the retail electric customer protection rule.
The item for discussion before we left was
the question of the definition of fixed rate product
and whether not that included a ancillary service pass
through or more accurately,
whether or not ancillary service contracts could be changed
based on future changes in ancillary services costs.
Staff has provided you with some language
that we think captures the intent
that was expressed by Commissioner McAdams.
And so the change would be the last sentence
that had been added in the draft
would change to the price may not vary from
the disclosed amount to reflect changes
in the ancillary service charges
unless the Commission expressly designates
a specific type of ancillary service product
as incurring charges beyond the rep's control
for a customer's existing contract.
So what this would do is the default posture
would be that reps can not vary their contracts,
or it cannot vary the price of existing contracts,
any ancillary services that are known at the time
or, you know, that are in effect at a time
that a contract is being signed,
they can't rate based on that.
They should've hedged for it,
but in the instance that there are extraordinary
or unexpected costs associated with
a new or modified ancillary service in the opinion
of the Commission, as part of like the approval
of the NPRR or entry of the new ancillary service
you guys would have the discretion to make
that pass through rubble as appropriate.
But reps, the rep community would have to sort of come
and make their case for it, right?
'Cause we'd want these to be like acknowledge
well defined decisions with the idea being that we want,
we genuinely want reps to be able
to get long-term financing, have long-term contracts,
hedge their products and have some certainty
to know that the Commission's not going to
be thoughtless about the assigning of new costs
to that particular community.
So this will hopefully be a safety backstop
for the rep community.
And I think that was our,
what we heard from you guys prior to the break.
-: So just to attest in terms of my view,
I believe that does because where I wanted to go
is to provide a mechanism for the market,
the public to come in and demonstrate the need for,
and to tell us, okay,
because there's gonna be a million
and one business models out there in the retail community.
Like you said, selling coasters,
they'll find a million- -: I dint say that.
-: Okay, sorry, no, they did, they did,
they did, they did.
-: Important, very important detail.
-: Correct, maybe I should stop talking.
(group laughing)
In any case, there will be a variety
of business models out there.
This would provide a mechanism
and a safeguard for the Commission to have to re-look
or examine as we authorize and approve of the products
on a case-by-case basis to account for the effect
on the retail community and to essentially build in
a process for approval or disallowance of pass through
the ancillary services and what those conditions
might look like if it's a pass through in part,
if it's a conditional pass through,
whatever we need to do
because you can't accurately forecast the future,
we would have that opportunity
and it would be, give them a due process
to come litigate this and allow us to do
what we're supposed to do,
which is safeguard the public interest
and determine the best path forward.
-: Agreed, nicely put.
-: Commissioner McAdams, well said.
Again, like I said at the beginning of our discussion,
I think this is a balance between protecting consumers
and ensuring a competitive, healthy retail market.
I think this language strikes that balance in terms
of trying to ensure that we still have fixed rate products
in our competitive market,
but also provide more transparency and visibility,
and more due process for the reps going forward
so that they can properly hedge against
all of the items that we are looking at
through our market design grid reform efforts
that are important for reliability
and for consumers as well,
but to be able to provide the reps
the opportunity to hedge against those costs
and for the Commission to take more of an active role
on approving all of those efforts as we will,
but also an active role on sizing those efforts
to ensure that we are appropriately balancing benefits,
reliability, benefits, and consumer costs in the future.
-: And we may also note that I think
a lot of times ancillary services have a lead time
with when they would come into effect.
So there might even be an opportunity,
I assume that in time there would be an opportunity
for them to maybe get those questions answered
before the new cost came into effect, potentially
if and when there's enough lead time to do so.
Man: Absolutely.
-: Okay.
-: Well, yes, well, long before.
All right, so done?
-: I'm good, thank you for the (indistinct).
-: Yeah, appreciate the quick edits
to improve an already excellent rule.
Is- -: Along, sorry, and along with that,
if you would also approve us,
we've not yet edited the preamble
but I assume we're gonna have to do a quick run through
and make a few edits in line with the discussion
that we just had.
So if whatever you approve could give us that discretion
that would be fantastic.
-: That works.
Is there a motion to approve the proposal
for adoption with the edits submitted by Mr. Smeltzer
and the discretion to reconcile the preamble
with said edits?
-: So moved.
-: Second.
-: All in favor say aye.
Commissioners: Aye.
-: Non opposed, the motion passes,
thank you very much, Mr. Smeltzer.
-: Thank you David, for your work
on that very important rule.
Man: Thank you, Connie, I appreciate it.
-: Thank you, Connie and team.
-: Mark also wanted his shout out, he's over there.
(everyone laughing)
-: Yeah, Mark.
-: Thank you, Mark.
-: Mark's been hustling just as hard as Smeltzer, I think.
(indistinct)
See, he just gave him more work.
(everyone laughing)
See, he's literally going up some TEA Smeltzer.
All right, we've already addressed,
I think for 23, 24, we've already addressed item 25,
which brings us to 26, I believe Mr. Janae.
-: 26 Is Project 52307,
a review of the rules adopted by
the independent organization in county year 2021,
Commission staff has filed a memo along
with a proposed order that addresses 19 (indistinct).
-: Thank you.
These rule changes have been in the works
but at the tech level or across staff level
at the PUC staff level with Rebecca Zerwas
and her team do an extraordinary amount of work
over the last number of months.
All of these are, I know y'all are familiar with,
all these are much needed improvements,
and I think it's fair to say a dramatic amount of changes
in the short amount of time
that will deliver tangible results.
Any thoughts, questions, comments?
-: Strongly agree.
-: Same.
-: All right, is there a motion
to approve the proposed order?
-: So moved.
-: Second. -: All in favor say aye.
Commissioners: Aye.
-: Non opposed, motion passes.
Don't have anything on 27,
save 28 till the end of our programming.
Brings us to 29, I believe Commissioner Cobos
has an update for us.
-: All right, thank you, Chairman Lake.
Just wanted to note that the ERCOT Board of Directors
approved the long-term transmission infrastructure
project for the Rio Grande Valley
at this past Board meeting on December 10th,
the project has been deemed critical for reliability
by ERCOT and therefore the Commission will have to approve
the CCN applications once they're filed before us
on an expedited basis within 180 days
of the CCN filing date.
This longterm infrastructure project is very important
and the party should file,
I would strongly encourage the parties to file
their CCN applications as soon as possible.
And in that due course,
I would like the relevant parties to file a progress report
on January 20th in this project that provides
us with an estimated timeframe on when they will
be filing their CCN applications for this project.
This project must stay on track to be energized
by December, 2026.
Finally, this longterm transmission infrastructure project
together with the new second circuit
and close the loop transmission facilities
that were ordered by the Commission this fall,
will provide much needed, long awaited reliability
and resiliency in the Rio Grande Valley in the state.
-: Thank you, ma'am.
It is hard to understate the magnitude of this project
and the speed at which you have moved it forward.
So thank you for that leadership.
I know these are long lift projects,
but I wanna make sure that the importance of this project
is not fade away and this is a huge, huge project.
Thank you for taking the leadership role on this.
Commissioner McAdams.
-: Oh, I would just like to commend you Commissioner
for leading on this.
I'd like to highlight this just on behalf of myself for
the public, this is an entire region
of the state of Texas that will
have a large scale critical piece of infrastructure built
over the next six, seven years
that will enhance and increase reliability of that region
for decades to come and will provide a backbone
of resiliency in a natural disaster prone area.
This will benefit all consumers as result
especially the people of the Rio Grande Valley.
And this is not inexpensive.
This is gonna cost everyone equally,
but it's well worth it.
I think this is a testament to the work of ERCOT
and the Commission in trying to,
as some of the public comments said earlier,
watch out for the public interest.
That's what we're trying to do.
That's our mission.
So appreciate your work, ma'am.
-: Thank you so much.
-: I would-
-: Thoughts on transmission, general?
-: Just, you know vegetation management of course.
(everyone laughing)
Thank you, Commissioner.
I think, you know, having this authority
to order transmission is important.
It's an important tool in our toolbox.
It's an important thing that we need to use
to make this system reliable looking forward,
as opposed to just-in-time transmission.
And as we give ERCOT more tools with implementing
the economic transmission language
that the legislature passed,
we'll hopefully be able to look ahead,
look ahead of the headlights, rather than just to them,
to the edge.
And that will give ERCOT and the market tenacity
to really get, really see what needs to be done
for the good of the market before we get
to the edge of that system.
So I commend you, thank you.
And look forward to more of these.
-: Yeah, I look forward,
very glad you laid out the timetable you did
and look forward to continuing that.
-: Sure, thank you so much.
-: Don't think we have anything on items 30
through 37 to bring us to an update from our ED in 38.
-: Thank you, Mr. Chairman and Commissioners,
just two quick updates this afternoon.
First in regards to the Mapping Committee that I chair,
we're having our last meeting of the year tomorrow,
where we will approve the statutorily required
mapping report, it's due January 1st.
We will get that published on our website
before the end of the year and sent out to the Governor
and the legislature, and also file that in project 52404.
And then as I've spoken about before,
our January meeting is gonna be a public meeting.
We're gonna hold it in this room.
It's gonna be broadcast on Texas Admin,
and we're gonna run it very similar to the way
that you all run work sessions.
We're gonna get reports from our different project teams
go over the report.
And what I would ask from the public or anyone interested,
if you have comments you wanna file related
to our Mapping Committee and any of the work
we're doing, file them in project 52404
so that we can see them.
And then the second thing is something I was asked
to do by staff.
So as you are aware, we passed rules
and so did the Railroad Commission back in November relating
to reliability and continuity of service
and critical designation of natural gas infrastructure.
And those rules set up a process
to designate natural gas critical facilities.
And so just to be able to ease the administration
of that sharing of information,
because the rules require operators of critical natural gas
to provide customer information by January 15th to,
via their electric utilities and to ERCOT.
We've opened a project 52964
to put all of that contact information in.
And so what we're asking is that utilities
put their contact information and file it
in that project by December 29th,
so that we can get that posted by January 3rd.
Chairman Lake: Always appreciate streamlining processes,
especially this one.
-: Yes, sir, we want people to be able
to find that information easily.
Chairman Lake: Thank you very much.
-: That's all I have, thank you, sir.
-: Any questions or comments for Thomas?
-: No, sir.
-: No.
-: All right, well that concludes the business
on 38, 39 and 40.
I don't think we have any business which will bring
us back to item 28, project number 52373
which is the last piece of business for this meeting today.
As we all know, and we've heard multiple times,
that devastating event in February
was a seismic part of Texas history.
And in response to that, the legislature
and the Governor passed landmark reform
to address the problems that were made apparent
in that extreme weather event.
We, as the Commission received clear direction
in SB3 to conduct a wholesale review of the ERCOT Market
to move away from the crisis-based business model
and to redesign as needed our market
to ensure a resilient, reliable grid.
We started this process as new Commissioners in June.
Commissioner Cobos joined later in the summer,
and then Commissioner Glotfelty.
Starting in June, we as a Commission
have directed significant operational reforms at ERCOT
that made an immediate impact in improving reliability
going into last summer,
we've conducted almost a dozen public work sessions
to engage with stakeholders and the public in this room
with all Commissioners present, with staff support,
with ERCOT present, we have received thousands of pages
of comments from stakeholders
and members of the general public.
And today, at the end of this incredibly intense process,
we're discussing, and I hope to deliver
a blueprint for market redesign.
Early on, I think we all realized
that our market has been historically focused
on affordability first and reliability second.
Reliability moving up in the ranks of priorities.
In fairness to our predecessors,
the current market design was put in place
before intermittent renewables were so prevalent,
they introduced a new operational challenge,
new volatility and vulnerabilities to our market.
Texas has plenty of generation
but that can vanish when the wind doesn't blow
and the sun doesn't shine,
which leaves us with a very thin reserve margin.
And we've seen that at different points
over the last six months.
We, as a Commission have worked hard to acknowledge
the pros and cons of all generator types.
The self-contained supply chain of wind and solar
is a tremendous feature.
Unfortunately, we can't turn the wind on
and make the sun shine.
There are plenty of well known vulnerabilities
in thermal dispatchable generators,
but one of their features is that
they can be turned on at command.
And our effort has largely been to capture the benefits
of each type while mitigating the detractions.
The bottom line, I think we all agree
is to provide economic rewards in our market structure
for the desired output and the desired capabilities,
moving revenues to reliable sources of power.
And when we say reliable and dispatchable, I think,
it's fair for all of us that we mean
more than just thermal, we mean batteries.
We've been doing renewables partnered with batteries,
hydrogen, hydro-generation, biomass, and most importantly,
accountable demand response.
And a big part of this effort is quantifying
and assigning value to those demand response capabilities
that we know we have in our grid.
We spoken a lot about being technology agnostic,
and it's a principle I think we're adhering to,
we're gonna put the economics out there
and let the marketplace deliver the best technology
at any moment in time to deliver reliability
for our citizens.
We've always known there was not gonna be one silver bullet
to solve all these, but rather a combination
of different changes needed.
The market redesign blueprint that was published
by staff on December 6th
and you all have all seen is based on reliability
and accountability.
As seen in that memo,
this proposed blueprint will be deployed in two phases.
The phase immediately actionable items
will be implemented at various points throughout 2022,
some immediately on January 1st,
the longer term market reforms will be more finely tuned
and implemented over the next several years.
Texans shouldn't have to worry
about whether they can power their lives
or power our economy, when they flip the lights on,
the lights should come on and these efforts go a long,
long way to ensure that.
With that, I'll open up for thought, comments.
-: Sure, Chairman Lake, thank you so much
for your views and statements on this very important issues
that are before us today.
For context, I think it's important for me to lay out
that prior to serving as PUC Commissioner,
I served as public counsel at
the Office of Public Utility Council
that is represents the residential
and small commercial consumers of Texas.
During Winter Storm Uri,
our agency worked tirelessly to assist consumers
during the storm, including getting oxygen
to elderly Texans, getting water to assisted living centers,
having to assist consumers to call 911.
I bring that firsthand experience and perspective
to the Commission as we address these important
grid reforms today.
After Winter Storm Uri
the legislature acted SWIFTly to pass
a comprehensive package of landmark legislation
to address the issues experienced by Texans
across the state during the storm
Senate Bill Three alone that was passed by the legislature
and signed into law by the Governor provides
for sweeping reform of our ERCOT power grid.
Pursuant to the direction of the Governor
and the legislature over the course
of the last several months,
we have rolled up our sleeves and have worked hard
to address the issues that were experienced by Texans
during the winter storm.
The Commission has diligently as Chairman Lake
has duly noted, held many public workshops,
has received thousands of pages of comments
from stakeholders, experts and the public
that have been very helpful in identifying actions
that will provide the state with a spectrum
of enhanced grid reliability and resiliency
in the future.
These important and calculated actions
will help enhance grid reliability and resiliency
by, as Chairman Lake noted,
moving ERCOT away from operating the grid
in a crisis-based manner,
adding more tools to ERCOT's arsenal
to help avoid conservation appeals
and emergency conditions in the future
and making generation transmission
and customer demand site improvements.
These SWIFT historic actions will help improve
grid reliability and send a strong market signal
for new and existing dispatchable generation investment
in our state.
-: Well put.
Commissioner McAdams, I know you a memo
follow on that, on the side.
-: I do, sir.
-: You had full.
-: I have plenty of thoughts.
-: Full agenda-
-: Some of them helpful, some not.
I would say to dovetail on comments about
the broader blueprint as outlined by the staff memo
and as reviewed by stakeholders.
I believe that actions taken and affirmative actions
or affirmative instructions given on the part
of the Commission, as it relates to the blueprint,
as Churchill said, this is not the end.
This is only the end of the beginning.
And our job moving forward is to provide continued
affirmative instruction, hard deadlines for deliverables,
public access, and oversight to a process
that traditionally has been shrouded in market ambiguities.
And this Commission along with ERCOT looks forward
to the hard work ahead.
We have trusted staff now in both entities
that we can really make a difference for Texas
and in a short amount of time.
Great work has already been accomplished
but great work is yet to be done
and I look forward to that.
As it relates to my memo,
the memo as in the other workshops
and open meetings, discusses a policy
that relates to dispatchable interconnection prioritization
or dispatchable resource interconnection prioritization.
It has not deviated much from previous conversations,
but it is the product of a concerted stakeholder feedback.
And I believe it accommodates many of the concerns raised
by industry stakeholders
and those wires companies who have to actually implement
the policy.
I would like to come in Commissioner Glotfelty
on his input in working with me on it.
I think the outcome is a better outcome
than it was originally.
And I think I'll leave it at that,
but let him sort of speak to his views
on the memo and the policy outcome
that we're seeking to achieve.
-: Thank you, Commissioner.
We each pat each other on the back a lot, you know,
but we-
-: Today is the day for it, it's almost Christmas.
-: We brought the stakeholders in here
and I think we had a robust discussion.
I think there were some parts of this interconnection piece
that were not understood, some by me, some by others.
I think we highlighted that.
I think your memo is fine.
There were a couple of things that I wanted to point out.
One of them is that, if you're
in the interconnection process
and you start to have problems
that you've never seen before,
it's incumbent upon you to let us know.
-: That's correct.
-: It is incumbent upon you all to tell us what the issue is
and why it has changed and when it changed,
we don't want that to happen,
but we do dispatchable resources as the chairman suggested
are not just one kind of resource,
but there are a lot of resources.
It's an operating characteristic that we want.
So as the transmission owners in ERCOT
continue to look at these resources
and how they go through the screening study process
and so forth, it's my hope that no project gets slowed down.
I think that was the commitment by ERCOT
that no project will go beyond the timelines
that are already existing in their rules
or in their protocols.
And that's important that we give certainty in that space,
to those who are willing to invest money in our state.
-: I would like to highlight that the goal
of the PUC is not fine
but we'll settle for it now and make positive headway.
I also wanna highlight that this policy does work
as a consistent approach to the vast untapped resources
that the policy that Commissioner Cobos
has been working on may unlock for the people of Texas,
meaning that as we invest in critical infrastructure,
in building out that infrastructure
that's gonna serve future generations,
it will unlock areas of the state
that will unleash untapped, renewable resources
or dispatchable resources.
And the policy enshrined
in the memo helps provide direction and clarity
for those organizations that are responsible
for absorbing that and interconnecting it
and making all these things work together.
So I believe it's consistent with the blueprint approach.
-: Well put, by both gentlemen.
And I think as a first step in this,
I would be comfortable directing ERCOT
to implement the framework laid out in your memo.
-: I would happily, so moved, yes, sir.
-: I agree and thank you,
Commissioner McAdams and Commissioner Glotfelty
for your work and leadership on this issue.
-: Yes, second, those things,
a lot of work goes into a very few short few minutes
on the diocese, but thank you.
-: Let me, we want certainty here.
We don't want uncertainty.
This is just got a lot of uncertainty in the market
and I think what Commissioner McAdams and I have,
we have come to an agreement on
that this should provide certainty
but if uncertainty prevails we come back-
-: We can address it, we can address it.
-: Well put, ERCOT, I know y'all have had
a lot of communication on this.
I think y'all have your marching orders pretty clearly
consider it so directed from this Commission.
Man: Yes, thank you.
-: With that, any other thoughts, comments on the blueprint?
I know ERCOT, PUC staff, Commission staff
in each of the Commissions,
Commissions office had put a lot of work into this.
I've got a proposed motion's pretty long.
That's a lot, you're gonna need a pen
to write this down
but contains a lot of direction to ERCOT
on general framework of implementation.
I think each of your offices have been updated on.
-: I got you covered.
-: Are we gonna talk about that afterwards
or are we gonna have a little bit more discussion
before you make the motion?
-: We can, I'm happy that I was gonna lay it out.
-: There you go.
-: Yeah, put it out there for discussion piece by piece.
As you all know, we've got phase one and phase two,
should we adopt the blueprint.
That includes a lot of work for ERCOT, as we all know.
So I would propose we direct ERCOT
to take certain blueprint actions immediately
and then ask them to report back on implement,
needs for implementation and status of implementation
on various other elements as we go through progress,
I would vote to adopt, I would ask for a vote
to adopt the December 6th filing as the Commission
that's market redesign blueprint
and ask that, that motion include a proposal to,
or a direction to ERCOT, to implement
phase one RDC changes by January 1st, 2022,
implement all other phase one actions under ERCOT control
as soon as practicable,
evaluate phase one of the blueprint
and file a report on this project by January 10th,
with the following information,
project plan for implementing all phase one items,
including which items would start first
and how the implementation would overlap,
including opportunities for synergies of implementation
and constraints created by dual implementation.
Also with that information,
request a description of changes
to ERCOT's information technology systems
for implementing each action item where it's applicable,
include an estimate of the amount of time
each action item will take to implement,
including estimates of significant milestones
within each action item where applicable,
milestones and timelines, Commissioner Cobos
as with your Rio Grande Valley project,
a description of human resource needs
to implement phase one action items
including information on how the progress
of current ERCOT projects and activities may be impacted
by implementation of these items.
I suspect we'll hear about the settlements.
Also include a description of any impediments
to the implementation of the phase one action items
with recommendations on how to remove
or mitigate those impediments.
Finally, I would direct ERCOT,
I would ask that the motion direct ERCOT
to prepare NPRRs to facilitate these directives
for the Commission's review prior to filing the report
with us to ensure those NPRRs capture
the Commission's intent.
That's largely phase one, phase two,
I would ask that not be included in this formal memo,
that be as I think each of you all have been briefed on,
coordinated with staff to work with ERCOT,
to identify the best course of action
for implementation with both existing
and potentially new resources.
But that, I don't think that does not require
a formal action from the diocese.
That's a lot, you get back through different pieces of that.
-: Can we take phase one first and.
-: Sure.
-: Okay.
-: Just, so I think just from me as laid out,
I'm good with process.
It looks like we get to reengage and as per,
it's somewhat familiar to us,
somewhat familiar as securitization was,
a plan is filed on implementation or at least brought back
to ensure that it captures all, how each of our offices
see the mechanics of implementation moving forward
and to address any of those questions we may have
so that we made an answer to them for further direction.
That's the way I hear it.
-: Short way to say this as,
what are the decision points you need, ERCOT?
Bring those back to us and we'll answer.
-: And we readdress.
So to me, I think as per the memo,
consistent with all the near-term approaches
we believe were absolutely necessary,
this is a affirmative first step to take.
-: It's a hell of a major step.
-: I agree, I think that what gets lost in this
is that these are massive changes in the market,
they cost a lot of money and, you know,
Texans pay for grid reliability in different ways.
They're paying for it this way and we need to deliver,
we need the industry to deliver
that we are expecting a more reliable system,
the costs, the timing, the certainty,
all of these things are thrown into disarray
when this Commission decides to try to act on something,
whether it's legislatively driven or on our own accord,
and it's incumbent upon us to implement those quickly
so that the industry can get back to certainty.
With certainty comes investment,
with uncertainty we leave the door open for questions
and folks, those with capital resources likely do not invest
during those times.
And if there's anything that I believe
that this Commission is trying to do
and what ERCOT's trying to do, it's to pursue investment,
whether that's investment in demand response,
or dispatchable resources, thermal resources,
or renewable resources, you know, that's what we need,
but we need to provide that.
So I'm very happy that we've done the ORDC
and these phase one components, you know,
I think we are, you know,
we had the citizens come and talk to us before
but I wish they had seen this memo, you know,
number two, demand response, pursue market modifications,
for demand response pricing.
And this is as they said, for the people.
We're talking about energy efficiency changes,
that's what they asked for, for the people.
These are all components of a market that are viable
and valuable for companies and for people across the state.
And I think that we've done some valuable things
as we go forward, we just need to continue
to think that we're not spending our own money,
we're spending other people's money it's expensive,
it's somebody else's money.
And that as we develop these,
we need to keep that first and foremost
that it's someone else's money and we're using it
to provide reliability everybody.
-: Thank you, Commissioner Glotfelty
and I agree that all the phase one items
should be implemented as soon as possible with respect
to ORDC, the operating reserve demand curve.
I think I would give a little bit more specific direction
to ERCOT to increase the MCL to 3000 effective
January 1st, 2022.
I think we have lowered the cap.
We've already adopted the lower price cap
of $5,000 per megawatt hour,
but if we can give them that specific directive
to increase the MCL to 3000 megawatts effective January 1st,
I think, I believe Kanaan,
that is the direction that y'all would need
to get it done ASAP by January 1st.
-: Yeah, that's in the directive,
-: Okay. Man: It's in the memo-
-: Okay, great, great, great. -: Or the blueprint, yes.
-: And yes, I echo, you know,
many of the sentiments are a lot of very important actions
in the phase one list,
the from fuel product is tremendously important,
that will provide greater liability resiliency
in the future winter seasons pursuant to Senate Bill Three,
a whole host of actions here that yes,
that do involve demand response
as Commissioner Glotfelty noted,
involve the demand side by way of ERs,
emergency response serve reform.
That is a service that ensures
and that load resources reduce demand the system
to help maintain reliability.
We will be looking at our PUC energy efficiency
load management programs.
And so all of those actions are our demand side focused.
And I'm glad you raised that Commissioner Glotfelty,
I think we heard a lot of expressions for, you know,
the need to focus on the demand side as well.
And there are a host of demand side improvements
and enhancements that we are looking to address
by way of our phase one action items.
-: Well put.
Hard to understate the breadth and depth
of these phase one reforms and any other time,
each of these would be considered remarkable on its own,
and yes, Commissioner Glotfelty, these cost money,
but nothing's more expensive than losing power.
-: Mr. Chairman, just to support you on that.
I think that's why it's important
to articulate the breadth of the changes and modifications,
the spectrum of tools that we will now have available
at the completion of this over the, again,
the next two years, subject to ERCOT feedback.
And it also provides those mechanisms for the Commission
and the representative government to be able to speak
to the scale of these services so that again,
we can address any contingency that should present itself
in the foreseeable future in terms
of electric reliability in Texas.
So, you know, subject to any other feedback,
I'd be happy to make your motion.
-: You got everything you need
or you want me to read that again?
-: So, Steven, if you want me to try to articulate
all this stuff.
(speaker laughing)
-: So I listened carefully to the chairman
and have the things that he numerated.
And if you want to make your motion to adopt that,
I have what I need.
-: I would move to direct based on the chairman's comments,
reflective of Commissioner Cobos\ conversation
and issue those directives to both PUC and ERCOT staff.
-: We have a motion, is there a second?
-: Second.
-: All in favor say aye.
Commissioners: Aye.
-: Motion passes, non opposed.
-: I made the wrong motion, didn't I, Steven?
-: Well the directives said Commission staff,
I thought I heard, we said we didn't need
to take formal action on that and I'm not sure-
Chairman Lake: Yeah, for phase one.
-: Other than the staff's supposed to work with ERCOT
on phase two.
-: Well, then I withdraw those directive
to Commission staff ERCOT on all.
-: And, then remove and revote, please, sir.
-: I move to, you've never follow Robert's rules.
Come on, you gotta spit it out.
(everyone laughing)
-: You move like you just did with the exception
of the directives to the Commission staff.
-: Okay.
-: There's a motion, Commissioner McAdams motion
stands on the floor, less direction
to Commission staff, awaiting a second.
-: So moved.
-: Second.
-: All in favor say aye.
Commissioners: Aye.
-: None opposed, motion passes.
(speakers laughing)
-: You're making it hard for us today, Steven.
-: All right, phase two, I didn't fully articulate that.
I would ask for a motion to direct Commission staff
to work with ERCOT, to get into,
to recap, there's some big, big concepts
to be explored and, or crystallized and implemented
in phase two, load side reliability mechanism
of some form based on the principles outlined in the memo
and a backup reliability serve,
backstop for liability service.
These are more abstract concepts, and we all,
we have all agreed to those principles,
which is the most important part I would ask simply
for and we know these are longer term reforms,
but the most substantial ones we will make in the long run.
I would ask simply at this point for Commission staff
to work with ERCOT staff to have,
to jointly develop the needed inputs specifications
and quantification relevant metrics
that ERCOT would need to build,
design each of these two products
and not, don't fill in the blanks,
just tell us what are the specifications they need
and then we can, and I'd ask for that by February 1st,
February 15th?
(everyone laughing)
Man: Yes, yes.
-: March 1st?
Man: Let's let's target February 15th.
-: Let's do target February 15.
Man: And if we see something else I'll ask for more time
but I'd rather hold our feet to the fire.
-: Yeah, me too.
-: Agreed.
-: There's a list of the specifications
we need to build these products.
At that point staff can synthesize that,
bring that back to each of our offices for review,
at which point we can reconvene and decide
the best course forward.
-: I agree, Chairman Lake,
I think that is the best course forward.
I would add and I think we're all in consensus here
and agreement, I think both sides, you know,
ERCOT can give us on the load side and the backstop side,
a list of all the decision points,
I think with respect to the backstop reliability service
the parameters and the decision points
are pretty clear cut already.
I think we've been sort of looking at them.
If there is a way as I have, you know,
we've sort of looked at the backstop reliability service
to serve as sort of a bridge if ERCOT,
I think who's been ruling over these decision points
a little bit more
'cause I think they're more clearly defined
if they can come back with those decision points,
maybe first that way we can get the trucks rolling
and get that going a little bit faster
because I think time is of the essence in 2022
with all the work that ERCOT has on their plate.
If we can, you know, maybe get that out
February 1st from ERCOT.
-: We're back to February 1st.
-: Oh, I'm sorry.
Yes February 1st or even January, I think,
there's, I mean, I think the parameters
are pretty well laid out on that one
in terms of what decision points you need from us.
We may not be able to give you everything you need
at once, but.
(indistinct)
-: So you're talking about the fuel service?
Chairman Lake: Fuel backstop reliability service.
-: Well, fuel is part of phase one
and the backstop reliability service
I think there are decision points that you would be looking
from us to provide you as similar to the load side as well.
However, if we, if you know,
if we can give you some direction on that,
'cause I think there's just more,
clearly defined decision points at this point
for the backup stop reliability services
you discussed how to procure it, how much and all that,
if we can start getting that rolling,
that would be great.
-: So I can try and get information on that one back
to you February 1st or.
(indistinct)
-: As soon as, yes, that's hard to stop February 15th,
but do start with backstop reliability service first
and send that along as soon as humanly possible.
Does that work?
-: Yes, yes, sir, thank you so much.
-: That's important that one goes first.
That was part of the, probably put that first.
-: Commissioners, If I may,
perhaps we would like to set aside a time
at each open meeting to provide an update
on how these reports are progressing between staff
and ERCOT and we can continue to post this item
in the other meetings through the first quarter of the year.
-: Excellent idea.
-: Sounds great.
-: The word?
-: Sounds great, thank you
and thank you for your consideration. Thank you, Kanaan.
-: Thoughts on the proposed motion to direct ERCOT
to bring us specs for phase two products
and decision points about February 15th,
given the longer-term nature of these
and we can evaluate and move forward as a Commission
at that point on best path for implementation.
-: You want me to go?
-: Yeah, or y'all can just say yes too.
(speakers laughing)
-: I think that I'm getting these questions to us
soon is important.
I wanna take a step back to our last meeting,
I committed that I support the evaluation
and the analysis necessary to look at a LSE obligation,
a deck program.
I am not sitting here saying that I support it
a hundred percent because I don't know.
I still don't have the analytical underpinnings
of anything to say that it's the best program
for reliability in the state
or that it will solve the problems that we need
to solve for reliability.
So I understand we're gonna go ahead
and we're going to study this
and we're gonna try to understand
the parameters associated with such implementation
and do a deeper dive on the technical pieces for putting it,
something like this in place, the impacts to consumers
but to me, the vast majority of that is dependent upon
an analytical model based analysis of what we want
and with sensitivities around,
sensitivities needed to show
kind of those one-off scenarios.
I believe that every market out there that has been
contemplating these changes underpins their work
in analytical value, valuable analytical work
and I think we should do the same.
To that end, I have had meetings with some
of the nation's top modeling folks at our national labs
and other places that have looked at different mechanisms
within the load serving entity family,
or the load serving entity family to see what works,
what doesn't, kind of in accordance with our system.
We will continue to work with them
and see if there's a product that we can come up with
and we can all discussion and have a bigger,
robust discussion.
But I just, I want to kind of set my compass to say,
I'm not a hundred percent sold on all of this yet,
but I am a hundred percent sold on going forward
and studying is this the best thing to that
we can look at?
And I think going forward and looking at it
and analyzing it as the thing that we need to do,
but I'm not gonna prejudge my outcome
and say that that's still a thing
that we absolutely have.
-: Still better (indistinct).
-: It could be.
-: We got to figure out what the specs of the car are
before we know how much it's gonna cost.
-: Yeah, maybe, but, if you wanna use a car analogy,
I think that's right but sometimes
I see that these load serving reliability mechanisms,
it's not the first car that we're talking about,
it's the backup car and the backup to the backup car.
And sometimes that third backup,
you're better to buy parts than to buy a third car.
So that's where the analytical component has to come in
to determine what's the most cost effective
for our consumers knowing the goal that we want to achieve.
-: So when you still need the specs and the decision points.
-: We need specs and decision points
in order to model, correct.
-: So that's where I was headed Mr. Chairman
And my question, just to clarify,
it's clarifying question, we will ask ERCOT and again,
this is just putting it another way and you had it in there,
but what are the technical questions
from the market administrator that need
to be answered on each of the proposed obligations?
-: Starting with backstop reliability?
-: Yes, sir.
-: First.
-: In order to be implemented in any form or fashion.
And then that will then go to an analytic process
to answer some of the questions
as Commissioner Glotfelty highlighted, but just on its face,
we will ask the technical experts at ERCOT
to identify those questions on a performance basis
that must be answered in order to implement anything
so that experts can then create something.
-: We know which dials to turn up,
which dials to turn down,
we got to know the very specific dials.
-: Okay.
-: Correct.
-: Yep, same as Commissioner Glotfelty,
I'll put a bullet point disclaimer on that.
Don't wanna prejudge anything.
You know, I'm afraid of making any decision
without a concrete analytics following it on cost,
impact on market power, retail competition,
the energy only market design.
But I would support a path forward to where
we get this feedback from ERCOT in a timely way
so that we can start that next phase
of the analysis in the spring.
-: I would echo, I guess,
the disclaimers that Commissioner Glotfelty
and Commissioner McAdams laid out,
but will continue to support that come to us
with the technical specifications
and parameters and framework of decision making
that we would need to make
in order to properly evaluate the mechanisms.
-: I don't have any disclaimers.
(everyone laughing)
I got a motion to direct ERCOT to work with PUC staff,
to identify and articulate the specifications,
decision points and other relevant metrics needed to develop
the products described in phase two
of the December 6th memo with the priority
on backstop reliability service with,
and I'll stop there, that's,
I'll ask for that motion.
-: So moved.
-: Second.
-: All in favor say aye.
Commissioners: Aye.
-: None opposed, the motion passes.
Thank you all very much.
Man: Question. -: Thank you, Chairman Lake.
-: Do we want that directive in the same document
that we're going to prepare on the previous function.
-: I would separate it.
(indistinct)
-: I would say consensus, keep as one.
-: Yeah, I think so, it's a blueprint.
-: Blueprint, right.
(indistinct chatter)
-: With a disclaimer.
(everyone laughing)
-: That would be the last four pages.
-: Hey, Jimmy, I'm the lawyer here.
I'm supposed to be the one with the (indistinct)
(speaker laughing)
-: All right, that concludes our formal agenda for the day.
It has been a long day, it's been a long month,
it's been a long six months, it's been a long year
so I will not, I don't have much to say
to delay concluding business for today other than,
it's been a hell of what six, seven, eight months
going from what I would imagine has to be
the darkest period in this Commission's history,
working, making remarkable progress
with our partners in the legislature,
the Governor to then work with our stakeholder groups,
ERCOT staff and leadership to bring about even before
today's actions, an outstanding amount
of reform and improvement and rely enhancement
reliability at ERCOT in a staggeringly short amount of time.
So all I will offer is many thanks to all of you
and wish you all the best.
To happy holidays.
There being no further business to come before
the Public Utility Commission of Texas,
this meeting is hereby adjourned.
(gavel banging)