WEBVTT

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Okay,

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mm hmm. Good morning. This meeting of the Public utility

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commission of texas will come to order to consider

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matters that have been duly posted with the secretary

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of State of texas for april 21st 2022. For the record

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My name is Peter Lake with Will Mcadams, Lori Cobos,

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and Jimmy Glotfelty.

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Begin with our consent agenda items. Mr Journeay, could

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you please walk us through the consent agenda? Good

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morning. Commissioners, by individual ballots falling

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out were placed on your consent agenda Item 6-12 28

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31 34 and 35. Thank you sir. It's a motion to approve

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the items just described by Mr

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and a second all in favor say, aye, aye. None opposed

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motion passes. We will not be taking enough items 16th

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and 19 today,

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which brings us to the beginning of our formal agenda

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item Number one, please. (item:1:Public Comment) Mr Journeay.

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I don't want is our public comment chairman. We have

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two people who have signed up. I will call the first

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the person is robert Payne. Alright, well mr Pain makes

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his way up to address the commission. I'll remind our

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speakers that oral comments related to a specific agenda

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item will be heard when that item is taken up this

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segment of the agenda is where general comments only

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And as always, when we do get to oral arguments on

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specific items, stakeholders should not approach the

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table unless oral argument has been granted by commissioners

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or uh, they're invited by this commission. As always

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speakers will be limited three minutes each.

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Just find the floor is yours. Thank you. Thank Mr for

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allowing this time to speak. I'm speaking about applications

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of small water, uh, supplies.

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My opinion is that they are extremely long and complicated

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to this thick. When you're talking about a water supply

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only a couple of 100 m, it's pretty, you know, pretty

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hard to do uh, ones that small. I mean, I don't know

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I shouldn't even have to have attorneys or Great cassie

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experts and it just passes the cost on to the customers

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And, and the timeline is much too long. In my opinion

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I mean sometimes it goes a year and a half, three years

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Well by then, ladies and gentlemen, we're so far behind

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on our expenses that we're in trouble. I mean, Red

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Kay said you only have a test year of 2019 and it

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happens two years later. Our expenses have already

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way surpassed that. We all know what's happened in

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the last couple of years. So I'm asking if there's

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a way to shorten this to expedite it to keep our rate

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cases more current with our expenses. Um, you know

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I will use and quite frankly now we use nothing mainly

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as a sole proprietor. We're a small business and we

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know small businesses, the backbone of America, but

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we're being strapped by the time line it takes and

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and I know you're doing the best you can, but somehow

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I'm asking for help for small business and and everything

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Um, I hope it's not true. I've been told that you know

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the state doesn't want small we used but I don't believe

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that because we're a small business. We just need to

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be on a a fair playing field as as the um municipalities

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as board run water systems at one minute. Yes sir.

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Thank you. So I'm not here to criticize. Absolutely

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not. I'm here to ask help. I'm here to try to change

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see if we can change it. And I understand the process

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No one wants a water customer to be overcharged. But

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however, I don't think it'd be fair to ask the water

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purveyor to take money out of his personal personal

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money to subsidize the water company just like the

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expenses. So please ladies and gentlemen figure out

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a different way for small work system. Thank you for

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your time. Thank you for being here.

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Next speaker please. Mr Next speaker is Debra Kato

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Mm hmm. Okay.

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It's good to see you all again. I have my script and

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I'll try and keep this as brief as possible into the

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script. I'm very disappointed in how the petition action

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under control. Number 49351 turned out I believed that

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bringing the ratepayers issues with this sud before

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the highest authority in texas. The puc would have

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caused what everyone was writing about to be corrected

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more fixed instead. It's just ignored. That was a lot

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of years and a lot of effort for nothing. I don't know

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what to tell the ratepayers who supported my efforts

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to bring this petition action before the puc and all

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the way through trial by myself for five years without

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an attorney. We prevailed in it being ordered that

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the $10 increase in the service fee from $25 to $35

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was proven to be excessive, unjust and unreasonable

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But the sud won't lower it And the 477 per month surcharge

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on everyone's water bill for attorney's fees is also

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unjust. Those fees were paid to counsel defending the

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sud throughout the duration of the action with money

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obtained from overcharging the ratepayers so having

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to pay it again. I think it's double dipping on the

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deposits issue that came up in this case. I would also

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like to pursue the deposits issue. It was revealed

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in the petition action that this sud claims to be exempt

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from having to pay this texas state control or any

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deposit monies that are not returned to a ratepayer

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once they move and close their account. The S. U. D

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S. Policies are that unless they leave a forwarding

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address when the account is closed they don't get their

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$200 deposit. And of course they take out that last

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month's $35 service fee from that $200 even though

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the account was shut down and no water service happened

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not paying the state comptroller. Those unclaimed deposit

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money is a crime it is theft and that money doesn't

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get accounted for. I asked and was told at the board

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meeting that it goes into the general fund and I have

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a video of the then president saying we use that money

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for other things.

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I'm going to talk about how they tried to arrest me

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Last time I was before this commission, I was newly

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elected as president of the S. U. D. Well that only

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lasted three months. They brought in a director resigned

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they brought in one to fill the vacancy who was an

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old director. And then that swayed the vote 4-3 in

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the majority. I got out voted because they immediately

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have another election of officers after three months

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in May and I was out as president, how can any water

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companies do that? It's only after, it was supposed

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to be after an election. I've not been back to a board

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meeting since October 2021 when they tried to arrest

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me and I have a panic attack every time I think about

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this collin county constable coming from across the

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room drawing his handcuffs out of his back pocket to

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arrest me because I was um interfering with a board

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meeting even though it was executive session and no

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one else was there um legislative action MS jinx with

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the puc told me when I asked why aren't they lowering

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the rates. She said, well if you don't like it, you

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can take it up with the texas legislature and the clip

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hung up on it. So I did and I will, I've met

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with the legislature. They want me to provide a um

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a bunch of stories about all the bad acts that this

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suv has perpetrated on the ratepayers. So I am prepared

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to do that. I have started a facebook page called Bad

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Acts, what the Sud did to me true stories of ratepayers

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wrong. So I have to take up this whole new quest to

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collect all these stories, write the great american

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novel of what this thing has done to me, hoping that

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the legislature can do something because the puc has

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failed to enforce any orders that were given to Bear

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Creek sud. So they think they don't have to lower the

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fees. I don't know what to tell the ratepayers when

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I'm up for election in the May seven election to be

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a director again because Working from the inside is

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futile. I can't get any changes made because this core

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group of good old boys that have been running this

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place since it was this community of 600 people in

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2000 were now about 10,000 people with growth and sprawl

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and 14,000 new roofs going in with new subdivisions

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and this suv is making money hand over fist and it's

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all controlled By one general manager who has all the

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control. So I don't know what to do. But your mission

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statement on the wall out there by the elevator says

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your mission is to protect the people In this one case

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you failed. So please let's talk about enforcing the

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order. I need to tell the ratepayers that all the effort

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we did to get the order that it was lowered. I wanted

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to tell them your your water bill is gonna go down

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by $4.19 a month but they're not doing that because

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they don't think they have to. This is the same sud

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that padlocked every fire hydrant in town for eight

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years. This is the same S. U. D. That is now like

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charging people an extra water meter even though they

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can't hook it up because they have a business out of

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their homes. Um it's, it's egregious. I'm probably

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out of time. Thank you for bringing this to our attention

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condition with MR here and I would like to reopen conversations

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with Mr Gleason about enforcing this with the Attorney

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General's office and I will still continue to pursue

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my contacts with the legislature. Thank you for making

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the trip.

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Mm hmm. Okay.

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Anyone else signed up for public comment?

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Alright. At this point, public comment is now closed

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Which brings us to agenda item number two, (item:2)

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Item two is docket 51480 is the application El paso

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electric company to amend IT CCN for a 1 15 KV transmission

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line in El paso county. The PFD was filed on March

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three exceptions were filed in the O. J. Filed a memo

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with proposed corrections. I also have a memo with

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proposed changes to the PFD. Thank you sir. As we all

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know, these are never easy

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citing these transmission lines surrounding is never

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easy. Um, there's always lots of information. So happy

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to open up to thoughts, comments and questions.

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Thank you. MR Chairman. I I think this is a bit unique

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in terms of what we've seen before us since we were

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constituted as a commission. Um, the CCN uh application

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study area envisions frankly a more remote part of

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texas which has the circumstances that are attributable

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to its remoteness. Which is heavy emphasis for the

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Department of Parks and Wildlife. Heavy emphasis for

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the archaeological sites that potentially could be

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impacted. Um, that weighed heavily for me in considering

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the facts of mm hmm the proceeding. So, um again, my

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personal view is that you know, the PFD on route one

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weighs more heavily on those facts and uh the objector

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in this case through the file testimony. Um again,

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it doesn't necessarily object to the route on its face

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for any type of intrusive effects. Any type of diminished

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value to property but because alternative routes could

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provide better access for their business develop and

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that's that's a whole different waiting in my opinion

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when you when you are trying to maintain property rights

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So So route one on. Yes cost was a little more but

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on the community values tests on the parks and wildlife

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impact way more favorable. Okay, In favor of round

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one

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well stated thoughts. I'm, I'm a great in agreement

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on round # one. Yeah, I'm in agreement as well on route

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number one. Um, I think you know that the company needs

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to get this line built due to transmission overloads

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and low growth in the area. I think brought one respects

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the environmental considerations that Commissioner

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Mcadams raised um, texas, parks and wildlife supports

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it. Um, the need for the line is not contested.

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Good points that we have commission counsel memo on

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this item. So given given the agreement up here and

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ask for a motion to adopt the proposal for the decision

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as amended

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2nd, all in favor say aye, unopposed motion passes

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the next item please.

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Mhm.

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Item three (item:3) is docket 52040 the application

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El pasO electric company for an advanced meter system

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deployment plan, surcharge and nonstandard uh, service

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fees proposed order. It was filed on March 11 and the

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Correction Memo was filed on April six.

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Thank you sir. This is

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mm hmm. I'll say there are a lot of issues in this

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one. Um, and I'll stop there and open it up for thoughts

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comments questions.

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I'm happy to be laid off batteries, local security

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Um, that's I think This proceeding along with its companion

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will take up afterwards. Centers around 13 core questions

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and I could present those and we could discuss them

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in order if we like. Um, firstly should the commission

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approved the proposed amS deployment plan or surcharge

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and nonstandard metering fees in my opinion. As is

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no, we should not and I can break that down into the

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kind of sub issues that present themselves. Should

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the commission grant el pasO's electric requested waivers

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of commission rules and that really gets to the heart

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of where I'm going in my objection. Uh, no, we should

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not um, in certain cases, so on that front, should

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the commission grant a good cause exception of the

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commission rule that requires rotational testing of

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meters in service under 16 Tac 25 1 2 4 subsection

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B in my opinion, yes, we should for the proposed order

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the meters are being replaced and exempting the utility

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from the rotational testing requirement will have operational

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benefits for the system in this particular case. That's

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the first way to request that the first river request

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you grant the waiver on the basis that no point in

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test, it's a waste of time and resources to test old

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meters about pulled out. Right, okay. Sorry,

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I'm on the fence on this one. Um, I, you know, it's

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it's still several years out and just based on reviewing

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the application. I question whether the deployment

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will actually happen on on time and so um,

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I think this, this granting, this could cause a waiver

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is not gonna make or break my ultimate decision. So

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I'm fine with granting it. But um hesitant. Don't worry

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I got some others

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may wait.

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I thought about that and a similar framework as and

00:16:46.159 --> 00:16:49.750
we still need these assets to operate reliably in the

00:16:49.750 --> 00:16:54.309
meantime. But when I looked at the fact that the rotational

00:16:54.320 --> 00:16:58.690
testing is over a 12 year cycle, two or three, even

00:16:58.690 --> 00:17:02.990
with a year or two delay, it's still because of the

00:17:03.000 --> 00:17:05.059
direct that the length of that

00:17:06.829 --> 00:17:09.740
testing cycle, I think at the end of that would still

00:17:09.740 --> 00:17:15.680
be a relatively the minimus impact on um so take that

00:17:15.680 --> 00:17:20.119
for what it's worth. But I've I also agree that this

00:17:20.119 --> 00:17:21.450
is only a week away. Okay,

00:17:23.539 --> 00:17:25.769
okay. Keep it under consideration.

00:17:27.599 --> 00:17:27.700
The

00:17:29.279 --> 00:17:31.500
second issue in my opinion. Should the issue grant

00:17:31.509 --> 00:17:33.940
a temporary waiver of commission rule that requires

00:17:33.940 --> 00:17:36.670
the AMS deployment plan to include deployment schedule

00:17:36.670 --> 00:17:41.460
by specific geographical area. In my opinion. No, the

00:17:41.460 --> 00:17:45.450
commission should not. Um The rule requires AMS deployment

00:17:45.450 --> 00:17:48.089
plan include deployment schedules by specific area

00:17:48.089 --> 00:17:52.200
and that includes geographic information. Uh look the

00:17:52.210 --> 00:17:54.680
point of this, the point of our rules is the whole

00:17:54.690 --> 00:17:59.640
utility accountable and on some of these waiver request

00:17:59.650 --> 00:18:02.630
the accountability measures directly relate to the

00:18:02.630 --> 00:18:06.509
resiliency of the system and when they can timely show

00:18:06.509 --> 00:18:11.660
us that this is beneficial um for not just the ratepayer

00:18:11.660 --> 00:18:14.470
but the consumers that you know, have reliability at

00:18:14.470 --> 00:18:20.779
stake. Um AMS was presented as an enhancement for reliability

00:18:20.789 --> 00:18:24.190
not just better meter data, you know, for the efficiency

00:18:24.190 --> 00:18:26.039
of the utility at least that's the way it was passed

00:18:26.039 --> 00:18:29.880
in the legislature and has been for some time. So we

00:18:29.880 --> 00:18:31.799
have been stressing over the last six months. This

00:18:31.799 --> 00:18:34.549
is that this is an important attribute for our purposes

00:18:34.559 --> 00:18:39.269
um and to grant the waiver I think runs counter to

00:18:39.269 --> 00:18:42.619
that in a way. So that's that's why I oppose granting

00:18:42.619 --> 00:18:45.539
the waiver. Interesting thoughts on that.

00:18:48.039 --> 00:18:50.019
I mean I think the rule requires that the department

00:18:50.019 --> 00:18:53.490
plan includes the geographic breakdown breakdown and

00:18:53.500 --> 00:18:57.769
um by not being able to do that sort of signifies to

00:18:57.769 --> 00:19:02.759
me that um that that the company doesn't yet have properly

00:19:03.240 --> 00:19:04.819
um developed, developed

00:19:06.539 --> 00:19:09.059
which which is problematic in and of itself. I mean

00:19:09.940 --> 00:19:13.420
Mhm. Yeah, good to that delay you mentioned mentioned

00:19:14.839 --> 00:19:18.539
Yes, I would say generally speaking that, I mean this

00:19:18.539 --> 00:19:22.380
is one of the last utilities in the state to get to

00:19:22.380 --> 00:19:28.890
deploy M. S. Um They We have seen this this this process

00:19:28.890 --> 00:19:32.170
has gone on for I think almost 20 years since the first

00:19:32.640 --> 00:19:35.259
meters were deployed and there ought to be a better

00:19:35.259 --> 00:19:37.220
plan. There ought to be a better process. There ought

00:19:37.220 --> 00:19:41.269
to be more meat on this bone on how we can see

00:19:41.269 --> 00:19:45.710
that they're gonna make this roll this out provide

00:19:45.880 --> 00:19:51.519
um data to others. I just I think there's a I struggle

00:19:51.519 --> 00:19:54.720
with approving the entire in its entirety just because

00:19:54.720 --> 00:19:56.660
of I think it's not complete.

00:19:58.940 --> 00:20:01.269
Alright, well we'll put

00:20:03.140 --> 00:20:08.680
yeah I think we can agree that the waiver for the deployment

00:20:08.680 --> 00:20:10.660
plan by geographic area should not be there.

00:20:12.539 --> 00:20:15.680
Um The next issue in my opinion should the commission

00:20:15.680 --> 00:20:18.160
grant waiver of the commission rule that requires monthly

00:20:18.160 --> 00:20:22.630
progress reports on the amS deployment. My position

00:20:22.630 --> 00:20:26.480
is that we should not, the rule requires monthly progress

00:20:26.480 --> 00:20:29.150
reports on A. M. S. Deployment plan following the filing

00:20:29.150 --> 00:20:31.859
of its deployment plan until deployment is complete

00:20:32.339 --> 00:20:36.700
Um Yes, unless the utility complies with the rule and

00:20:36.700 --> 00:20:39.130
submits monthly progress reports, the commission will

00:20:39.130 --> 00:20:42.420
not have advanced notice of any delays and thus that

00:20:42.420 --> 00:20:44.849
accountability feature which I described before which

00:20:44.849 --> 00:20:48.619
is the policy intent of our rules and and the authorized

00:20:48.630 --> 00:20:51.789
authorization in the statutory language. That's that's

00:20:51.789 --> 00:20:56.480
why we're here. So I think the problem is I agree.

00:20:56.490 --> 00:20:59.660
Um I the monthly reports are required by the rules

00:20:59.670 --> 00:21:02.559
and they serve a purpose to keep this, keep the commission

00:21:02.559 --> 00:21:05.789
updated as to where the company is with their deployment

00:21:05.789 --> 00:21:09.700
plan. When I read through this this um this issue it

00:21:09.700 --> 00:21:13.549
reminded me of sort of the Rio grande Valley transmission

00:21:13.559 --> 00:21:17.539
um discussion we had and our desire to hold the companies

00:21:17.539 --> 00:21:20.130
accountable for building the infrastructure and entirely

00:21:20.130 --> 00:21:23.000
manner. And asking for quarterly reports. It's not

00:21:23.000 --> 00:21:25.309
so much that we need to wait until they're actually

00:21:25.319 --> 00:21:27.650
you know, building the project. We need to see the

00:21:27.650 --> 00:21:31.119
spectrum of actions that have been taken, um, to get

00:21:31.130 --> 00:21:34.430
to the completion of the deployment plan. And so the

00:21:34.430 --> 00:21:37.269
monthly progress reports in my mind, um, serve an important

00:21:37.269 --> 00:21:39.410
progress and they're required by the rules. And so

00:21:39.410 --> 00:21:40.160
I would not grant the wish.

00:21:42.789 --> 00:21:45.430
That's a good analogy. I think we should not grant

00:21:45.430 --> 00:21:49.920
the waiver. It's, this is a pretty low bar for for

00:21:49.920 --> 00:21:52.019
utility in the state that has a guaranteed rate of

00:21:52.019 --> 00:21:57.200
return to competition in the public on the status agreed

00:21:57.200 --> 00:22:04.690
across the board. Cool. Um, carry on. So then Mr Chairman

00:22:04.690 --> 00:22:07.150
should the commission grant a waiver of the commission

00:22:07.150 --> 00:22:10.170
ruled that requires remote disconnection and reconnection

00:22:10.170 --> 00:22:13.470
capability for all advanced meters rated at or below

00:22:13.470 --> 00:22:19.200
200 amps in my opinion. Yes, we should uh, provided

00:22:19.200 --> 00:22:21.559
that the commission should grant waiver with respect

00:22:21.559 --> 00:22:25.480
to polyp phase meters in this case, compliance would

00:22:25.490 --> 00:22:29.930
be uneconomic and technically infeasible. Um, so as

00:22:29.930 --> 00:22:32.250
such, I, I advocate granting away with,

00:22:34.539 --> 00:22:37.000
I would grant this waiver as well, but I view this

00:22:37.009 --> 00:22:40.319
this issue is sort of a back end issue in terms of

00:22:40.329 --> 00:22:41.910
there's, there's a lot of compliance that needs to

00:22:41.910 --> 00:22:43.990
happen with the AMS rule before you can even get to

00:22:43.990 --> 00:22:47.710
this issue, but I would grant the wish. I think we

00:22:47.720 --> 00:22:52.490
I understand this issue a bit, I'm concerned about

00:22:52.500 --> 00:22:56.509
granting this. I believe that we should, but I'm concerned

00:22:56.519 --> 00:23:01.150
you know, as we saw during the the winter storm in

00:23:01.160 --> 00:23:05.799
any ways that utilities can um, disconnect individual

00:23:05.799 --> 00:23:08.299
meters for the good of the entire Load I think it's

00:23:08.299 --> 00:23:10.599
an important thing that we ought to consider. Maybe

00:23:10.599 --> 00:23:13.099
it shouldn't be considered in this individual docket

00:23:13.109 --> 00:23:15.720
but we have to continue to look at the health of the

00:23:15.720 --> 00:23:21.490
entire system in these in these scenarios. Well, I

00:23:21.500 --> 00:23:24.349
agree with commissioner guilty. I'll sort of veer back

00:23:24.349 --> 00:23:26.829
to that in some some of these later issues because

00:23:26.829 --> 00:23:29.130
I do think it's interlinked in terms of the segmentation

00:23:29.130 --> 00:23:33.039
their capability, uh, what they can do once this is

00:23:33.039 --> 00:23:36.359
out there, I can see that they don't know what they

00:23:36.359 --> 00:23:40.640
don't know yet. They haven't deployed, but but we need

00:23:40.640 --> 00:23:46.309
that accounted for. Yeah, in general, we want to use

00:23:46.309 --> 00:23:50.059
every tool possible to continue to enhance the granularity

00:23:50.069 --> 00:23:54.519
of Load shed capabilities given the supply constraints

00:23:54.710 --> 00:23:59.039
their supply chain constraints on this specific piece

00:23:59.039 --> 00:24:03.769
of equipment. I think the waiver is justified because

00:24:03.769 --> 00:24:07.200
that that shouldn't hold up the entire project. Is

00:24:07.210 --> 00:24:10.900
that consistent with your think again? Alright, so

00:24:10.900 --> 00:24:14.079
we're we're all okay with the granite waiver on the

00:24:14.079 --> 00:24:19.869
remote connect disconnect on the poly face. Okay, great

00:24:19.869 --> 00:24:22.359
Dovetail into next issue. Should the commission grant

00:24:22.359 --> 00:24:25.279
a waiver of the commission rule that requires the capability

00:24:25.289 --> 00:24:28.400
to provide on demand reads of a customer's advanced

00:24:28.400 --> 00:24:32.079
meter to authorize third parties through the graphical

00:24:32.089 --> 00:24:35.630
user interface of the utilities web portal, in my opinion

00:24:35.630 --> 00:24:38.829
No, they should not. No, we should not. Um, the utility

00:24:38.829 --> 00:24:41.150
has not established it is an economic or technically

00:24:41.150 --> 00:24:44.359
infeasible to provide third party access to on demand

00:24:44.359 --> 00:24:47.660
reads on the web portal. I think that plays into bringing

00:24:47.660 --> 00:24:49.720
in the rest of the market to see how we can better

00:24:49.720 --> 00:24:52.990
improve resiliency and or the efficiency of that system

00:24:52.990 --> 00:24:55.829
in particular, uh it runs counter to the public interest

00:24:55.829 --> 00:24:59.359
and they should be able to uh provide this information

00:25:00.240 --> 00:25:04.349
Absolutely agree. And not only that, I think that um

00:25:05.339 --> 00:25:10.700
you know, we need to create a process to where um you

00:25:10.700 --> 00:25:14.630
know, to jimmy's point earlier, the ERCOT utilities

00:25:14.630 --> 00:25:17.640
got their advanced meters put in place um starting

00:25:17.640 --> 00:25:19.730
around 2000 and that's when the whole process started

00:25:19.730 --> 00:25:25.279
Right. And they conduct the third party web portal

00:25:25.279 --> 00:25:27.789
access through smart meter texas. So they have their

00:25:27.789 --> 00:25:32.200
process laid out. Um The non ERCOT utilities in the

00:25:32.200 --> 00:25:35.950
last several years had legislation passed that allows

00:25:35.950 --> 00:25:39.849
them to deploy advanced meters. And so um as we saw

00:25:39.859 --> 00:25:42.890
in entities AMS case, they did not want to be part

00:25:42.890 --> 00:25:44.859
of smart media texas because they're not in ERCOT And

00:25:44.859 --> 00:25:49.789
so um you know, they're focused on using green button

00:25:49.799 --> 00:25:53.769
connect. Um and as we've seen through this case in

00:25:53.769 --> 00:25:56.460
the next case we'll discuss looking at another provider

00:25:56.460 --> 00:26:00.119
another functionality web portal to comply with the

00:26:00.119 --> 00:26:02.890
rule to provide their party access to web to the web

00:26:02.890 --> 00:26:09.380
portal. Um I think we need to, in this case, I agree

00:26:09.380 --> 00:26:11.480
with you that we shouldn't grant the waiver because

00:26:11.490 --> 00:26:14.819
the company hasn't um demonstrated the compliance is

00:26:14.819 --> 00:26:17.660
technologically technically infeasible or economic

00:26:18.039 --> 00:26:21.009
and has stated that they'll study it. And I mean that

00:26:21.009 --> 00:26:24.519
could take a while and we need to get the non ERCOT

00:26:24.519 --> 00:26:29.440
utilities in a in a process to where they're providing

00:26:29.440 --> 00:26:31.460
this third party access within a reasonable amount

00:26:31.460 --> 00:26:31.769
of time

00:26:33.640 --> 00:26:35.880
as you may have explored in the enter G A. M. S

00:26:35.880 --> 00:26:39.029
case, they have a compliance dockett going on right

00:26:39.029 --> 00:26:42.259
now where they have for the last 3 to 4 years been

00:26:42.259 --> 00:26:46.190
trying to comply with the web portal requirement. We

00:26:46.190 --> 00:26:48.490
can't have this as for the reasons Commissioner Mcadams

00:26:48.490 --> 00:26:52.589
stated, um go on forever. We need to bring that to

00:26:52.589 --> 00:26:55.420
a close, we need to set parameters in these cases.

00:26:55.430 --> 00:26:59.619
Should we um you know, should we approve the application

00:27:00.539 --> 00:27:04.289
so that the the non ERCOT utilities can comply with

00:27:04.289 --> 00:27:06.019
the rules, provide this world portal access in a timely

00:27:06.019 --> 00:27:10.079
fashion so that the market can respond and customers

00:27:10.079 --> 00:27:12.519
can avail themselves to a variety of technologies that

00:27:12.519 --> 00:27:17.059
are out there. And so um I wouldn't grant this waiver

00:27:17.839 --> 00:27:21.140
but I wanted to sort of lay the groundwork to to wear

00:27:21.150 --> 00:27:24.500
how I'm thinking about this issue with respect to should

00:27:24.500 --> 00:27:28.460
we grant an application and to also send a signal two

00:27:29.480 --> 00:27:32.829
the ongoing compliance docket and the and energy that

00:27:32.829 --> 00:27:35.670
at some point in a monthly report. I think it would

00:27:35.680 --> 00:27:41.069
be helpful to get some information as to why update

00:27:41.069 --> 00:27:45.859
us as to why they haven't been able to come into compliance

00:27:46.170 --> 00:27:49.279
and to provide us with a hard deadline as to when they

00:27:49.279 --> 00:27:52.849
expect to come into compliance Because it has been

00:27:52.849 --> 00:27:56.930
going on for 3-4 years. It adds to that accountability

00:27:56.940 --> 00:28:00.910
feature in terms of our stated policy goals. I don't

00:28:00.910 --> 00:28:03.279
know that we want to set the deadline related to energy

00:28:03.279 --> 00:28:06.079
in this docket, but can you think that makes sense

00:28:06.079 --> 00:28:07.609
And I think we all agree with it. Can you follow up

00:28:07.609 --> 00:28:11.670
with a PDM afterwards and we'll post the item for the

00:28:11.670 --> 00:28:15.559
next open meeting. Thank you. Perfect. Thank you.

00:28:18.240 --> 00:28:19.990
I agree with everything that's been said jimmy

00:28:21.769 --> 00:28:25.029
and I built on the points that have been made by saying

00:28:25.349 --> 00:28:29.430
the test of infeasible or uneconomic in this particular

00:28:29.430 --> 00:28:34.880
item? It is, it's gonna be hard to convince me otherwise

00:28:34.880 --> 00:28:38.529
because most of the state of texas has shown that it

00:28:38.529 --> 00:28:42.500
is economic and feasible and valuable and there's the

00:28:42.509 --> 00:28:47.299
green dot federal standard that is used many many jurisdictions

00:28:47.299 --> 00:28:50.789
So I think we're all gonna need to hear a very good

00:28:50.789 --> 00:28:52.339
reason why this shouldn't be put in place.

00:28:54.539 --> 00:28:56.960
Alright. No waiver on the 3rd party

00:28:59.940 --> 00:29:03.410
3rd Party reads on demand. What do you got next week

00:29:03.940 --> 00:29:06.200
Should the commission grant a waiver of the commission

00:29:06.200 --> 00:29:09.039
ruled that the utility must provide third party entities

00:29:09.049 --> 00:29:12.990
authorized by the consumer. Consumer read only access

00:29:13.000 --> 00:29:16.269
to the consumers advanced meter data no later than

00:29:16.269 --> 00:29:20.039
a day after it was created, in my opinion, akin to

00:29:20.039 --> 00:29:23.890
the last issue. No, we should not. The rule requires

00:29:23.900 --> 00:29:26.650
the utility provided these authorized by consumer read

00:29:26.650 --> 00:29:29.359
only access to the consumers advanced meter data no

00:29:29.359 --> 00:29:31.599
later than a day after it was created. This requirement

00:29:31.609 --> 00:29:35.730
dates to 2000 and seven well established um utilities

00:29:35.740 --> 00:29:39.099
across the country are are accustomed to a certain

00:29:39.099 --> 00:29:42.869
rhythm here. Uh Again, it impacts significant policy

00:29:42.869 --> 00:29:46.500
and uh considerations, again, it impacts the overall

00:29:46.509 --> 00:29:50.269
overarching goal of bringing the market into this um

00:29:50.279 --> 00:29:53.349
to to help solve a resiliency problem that that we

00:29:53.349 --> 00:29:55.440
think this technology could feasibly address in the

00:29:55.440 --> 00:29:57.960
future. So that's why I would oppose grant

00:30:00.539 --> 00:30:03.119
similar, substantially similar points of the previous

00:30:03.119 --> 00:30:03.349
point.

00:30:06.789 --> 00:30:07.160
I agree.

00:30:08.839 --> 00:30:13.359
All right, agreed on that one. Mhm. I'll keep marching

00:30:13.359 --> 00:30:16.230
on should the commission grant a waiver of the requirement

00:30:16.230 --> 00:30:18.930
that the cost of implementing a msB moved into base

00:30:18.930 --> 00:30:22.009
rates if a base rate case occurs during the AMS deployment

00:30:22.019 --> 00:30:25.920
period under 16 to 25 1 30 subsection K and subsection

00:30:25.930 --> 00:30:30.140
four, in my opinion, Yes, we should. The waiver in

00:30:30.470 --> 00:30:33.109
of this nature is consistent with our past practice

00:30:34.440 --> 00:30:37.799
and I would grant it, Yeah, I would as well as a

00:30:37.799 --> 00:30:40.690
matter of fact, I think it's helpful also to have an

00:30:40.690 --> 00:30:44.569
independent surcharge so that you can have the accounting

00:30:44.579 --> 00:30:49.549
for the AMS um related deployment costs and um it's

00:30:49.549 --> 00:30:54.349
more visible to be able to see um when the AMS charge

00:30:54.359 --> 00:30:56.700
is put in place and when it's completed within the

00:30:56.700 --> 00:30:58.619
timeline, I think when you roll it into base rates

00:30:58.619 --> 00:31:01.509
it becomes more complicated sort of decipher and and

00:31:01.519 --> 00:31:05.900
bake it into a rape case. So that's a good point. Yeah

00:31:05.910 --> 00:31:08.460
very good point. Thank you. All right. So, we're agreed

00:31:08.839 --> 00:31:12.049
cost of implementation of base rates waiver is accepted

00:31:13.339 --> 00:31:16.839
Great. Uh following issue does El pasO Electric's AMS

00:31:16.839 --> 00:31:19.309
deployment plan and surcharge failed to comply with

00:31:19.319 --> 00:31:23.430
any other requirements in 16 to 25 1 30 for which for

00:31:23.430 --> 00:31:26.400
which El paso did not request a waiver in my opinion

00:31:26.400 --> 00:31:30.859
as they did. Um uh, El paso Electric has other deficiencies

00:31:31.039 --> 00:31:33.539
The utility has not submitted an adequate timeline

00:31:33.549 --> 00:31:36.799
for web portal development or integration into existing

00:31:36.799 --> 00:31:40.690
web portals as required. Under 16 to 25 1 30 Subsection

00:31:40.690 --> 00:31:44.369
D. Subsection for sub subsection D. The utility has

00:31:44.369 --> 00:31:46.569
not submitted a schedule for deployment of what portal

00:31:46.569 --> 00:31:51.500
functionalities under uh 16 Tax, 25 1 30 subsection

00:31:51.509 --> 00:31:55.859
D four E. Um, so they didn't do it.

00:31:57.529 --> 00:32:01.390
It's pretty straightforward. I like the issue because

00:32:03.440 --> 00:32:06.019
I agree utility failed to comply with the web portal

00:32:06.019 --> 00:32:09.349
third party access requirements. We all agree that

00:32:09.349 --> 00:32:10.160
we need to see that

00:32:11.910 --> 00:32:14.990
to see that all the items you need to come into compliance

00:32:15.839 --> 00:32:19.450
Great. Uh following issue. Did the parties adequately

00:32:19.450 --> 00:32:21.440
address the issues raised in the preliminary order

00:32:21.440 --> 00:32:24.539
regarding the effect of AMS technology unload management

00:32:24.549 --> 00:32:25.670
in a scarcity event,

00:32:27.640 --> 00:32:28.170
um,

00:32:29.930 --> 00:32:35.019
in my opinion, and this relates to its its its procedural

00:32:35.019 --> 00:32:39.150
cousin here coming later in El paso's case. No, they

00:32:39.160 --> 00:32:45.759
didn't. And let me say, i it is agreed uh, to investigate

00:32:45.759 --> 00:32:50.950
the potential, but nothing tangible that allows um

00:32:52.089 --> 00:32:56.170
two, it allows us to hold them to account was expressed

00:32:56.500 --> 00:33:01.420
in their filings or testimony as such. They acknowledge

00:33:01.420 --> 00:33:03.960
that they'll come back and look at it post deployment

00:33:04.339 --> 00:33:08.140
Um, but the the Acknowledgments expressed in the next

00:33:08.140 --> 00:33:12.769
proceeding don't exist here. And so, when, when we're

00:33:12.769 --> 00:33:15.500
talking about what right looks like, and I don't want

00:33:15.500 --> 00:33:17.450
to speak to another case necessarily. But

00:33:19.140 --> 00:33:22.839
they might look at that later on, uh to establish,

00:33:22.849 --> 00:33:26.259
we want these considerations reflected, so that we

00:33:26.259 --> 00:33:28.079
know what you're talking about and what you should

00:33:28.079 --> 00:33:31.319
report back to us on. Um, once you actually deploy

00:33:31.319 --> 00:33:32.059
the technology

00:33:34.420 --> 00:33:38.920
a great and I think we want to avoid the never ending

00:33:38.920 --> 00:33:42.829
investigation that mr cho cell line. So, in terms of

00:33:42.839 --> 00:33:46.329
of a possible remedy here, if we consider options down

00:33:46.329 --> 00:33:49.259
the road in the final motion, this should be included

00:33:50.309 --> 00:33:54.089
Absolutely. I mean, this issue is very important. Um

00:33:54.099 --> 00:33:58.220
you know, El paso wasn't impacted by winter storm Uri

00:33:58.230 --> 00:34:03.630
but they were impacted in 2011. And so it is critically

00:34:03.630 --> 00:34:07.009
important. Um, as we see more fluctuating weather patterns

00:34:07.009 --> 00:34:10.150
throughout the state that in other issues, just, you

00:34:10.150 --> 00:34:13.380
know, rising demand or state, you know, just we have

00:34:13.380 --> 00:34:18.150
a lot of moving factors and in and out of market and

00:34:18.150 --> 00:34:20.789
this functionality is extremely important or looking

00:34:20.789 --> 00:34:23.610
into this issue. I think we've made that clear um I

00:34:23.610 --> 00:34:27.530
think staff highlighted in your testimony and um we

00:34:27.530 --> 00:34:31.090
can't allow this for this important issue to get caught

00:34:31.090 --> 00:34:32.360
up in analysis paralysis.

00:34:35.380 --> 00:34:39.610
I would add back what commissioner kobo says, but more

00:34:39.610 --> 00:34:43.250
to my point is commission staff filed this that this

00:34:43.250 --> 00:34:45.739
was important to the commission filed in the docket

00:34:45.739 --> 00:34:50.670
and it was ignored. So I think we want to set the

00:34:51.239 --> 00:34:55.500
the expectation that when the commission specifically

00:34:55.500 --> 00:34:57.469
says they want these things that we expect.

00:34:59.039 --> 00:35:02.570
Yeah, that's ignoring commission staff direction is

00:35:02.570 --> 00:35:08.380
not gonna work. Um Alright, specific remedy. So um

00:35:08.389 --> 00:35:11.920
I would I would argue when when we get to that point

00:35:11.929 --> 00:35:17.550
on on the final motion on how we kind of fix all

00:35:17.550 --> 00:35:22.179
this um that that be one of the issues to be addressed

00:35:22.190 --> 00:35:25.030
and so let's just leave that hanging out there. Uh

00:35:25.039 --> 00:35:27.340
That one, they did not adequately address it and that

00:35:27.340 --> 00:35:28.480
they should in the future.

00:35:30.340 --> 00:35:33.920
Uh If the issue, if the commission decides to grant

00:35:33.920 --> 00:35:36.019
the waivers of the third party data requirements, should

00:35:36.019 --> 00:35:40.019
the commission order permitting of the filing. I believe

00:35:40.019 --> 00:35:42.139
this is a moot point now because we have determined

00:35:42.150 --> 00:35:44.400
that we're not waiving any of the data requirements

00:35:44.409 --> 00:35:48.659
um and uh so mr journey, I think that's clear in terms

00:35:48.659 --> 00:35:51.389
of process and issues to be addressed, correct? We

00:35:51.389 --> 00:35:56.429
have rejected the data filing requirements. Not quite

00:35:56.429 --> 00:35:58.699
yet, but all four of you indicated you're going to

00:35:58.710 --> 00:36:01.030
when you vote, You're correct. Okay, cool. I just want

00:36:01.030 --> 00:36:04.289
to make sure I'm checking my boxes. Okay. So the final

00:36:04.289 --> 00:36:10.809
remedy to be considered in in my view, look as a commission

00:36:10.809 --> 00:36:14.670
we're taking a lot more policy considerations into

00:36:14.670 --> 00:36:18.070
account when we're viewing the deployment of new technologies

00:36:18.079 --> 00:36:19.780
as a part of these cases.

00:36:21.329 --> 00:36:24.599
I don't want utilities to have to go back to Square

00:36:24.599 --> 00:36:27.699
one to try to remedy these things. I want them to have

00:36:27.699 --> 00:36:31.150
the opportunity to link up with staff following our

00:36:31.630 --> 00:36:35.860
you know, discussions here and and try to fix this

00:36:36.090 --> 00:36:39.260
and then and then stay at the stage where they can

00:36:39.269 --> 00:36:45.389
reapply um to be granted approval. So with that in

00:36:45.389 --> 00:36:48.929
mind um I would suggest that the commission could allow

00:36:48.940 --> 00:36:51.670
the parties to submit a revised proposed order that

00:36:51.670 --> 00:36:54.960
addresses the commission's concerns? Point by point

00:36:55.429 --> 00:36:58.639
to see if we could get a satisfactory answer in a new

00:36:58.639 --> 00:36:58.960
filing?

00:37:00.630 --> 00:37:03.829
So you re manned it with I would I would remand it

00:37:03.840 --> 00:37:08.070
with direction, direction on the discussed topics

00:37:10.130 --> 00:37:10.750
before remedy.

00:37:12.429 --> 00:37:15.039
That makes sense to me. What about the

00:37:17.000 --> 00:37:19.460
specific remedy for the

00:37:21.099 --> 00:37:29.139
paralysis by analysis of the never ending an investigation

00:37:29.139 --> 00:37:33.809
into bloodshed. We want to ask for a specific deadline

00:37:33.820 --> 00:37:37.119
that they must come back with answers on, they must

00:37:37.130 --> 00:37:41.579
So my guidance on that suggested guidance would be

00:37:41.599 --> 00:37:46.590
uh to look at similar proceedings to look at what those

00:37:46.590 --> 00:37:49.550
filings indicated. The considerations would be in the

00:37:49.550 --> 00:37:53.440
follow on studies and reflect those considerations

00:37:54.929 --> 00:38:00.099
appropriate to their system management and so that

00:38:00.099 --> 00:38:03.150
we have an accountability uh item.

00:38:05.409 --> 00:38:07.809
That's right. I I understand that they will still have

00:38:07.809 --> 00:38:10.940
these and they will wait for these answers ultimately

00:38:10.969 --> 00:38:15.320
once deployment occurs, but it's an issue area identification

00:38:15.329 --> 00:38:17.380
that this is what they'll be looking for. And that

00:38:17.389 --> 00:38:20.380
completely made sense to me. So I'm just wondering

00:38:20.380 --> 00:38:22.340
from a procedural standpoint, um

00:38:23.940 --> 00:38:27.090
we've not granted any of the waivers that the company

00:38:27.099 --> 00:38:31.500
would then have or some of them we have not granted

00:38:31.500 --> 00:38:36.530
the majority of them. And so now what what we're asking

00:38:36.539 --> 00:38:42.309
is for um the company and staff and the company work

00:38:42.309 --> 00:38:45.980
with the parties and staff to try to address all of

00:38:45.980 --> 00:38:51.039
the rural requirements um within this application context

00:38:51.920 --> 00:38:55.489
And if it doesn't make sense for them to stay within

00:38:55.489 --> 00:38:57.590
this application context, because maybe they need a

00:38:57.590 --> 00:39:00.619
little bit more time to gather the information and

00:39:00.619 --> 00:39:03.880
it's just not right right now, it's premature to then

00:39:03.880 --> 00:39:06.670
maybe re file their application later when they can

00:39:06.670 --> 00:39:10.880
comply with. Because I I don't it appears like maybe

00:39:10.880 --> 00:39:13.690
at this time with the vendor constraints that we were

00:39:13.690 --> 00:39:16.489
highlighting gender constraints and maybe, you know

00:39:16.500 --> 00:39:20.030
getting more analysis to be able to comply. I I don't

00:39:20.030 --> 00:39:22.590
know if it's possible. That's fair. There's a lot of

00:39:22.590 --> 00:39:27.199
unknowns. I think most streamlined approach would be

00:39:27.820 --> 00:39:30.429
to remand with very clear directions that we've laid

00:39:30.429 --> 00:39:34.650
out here on a short timeline. So if they're ready,

00:39:35.320 --> 00:39:38.469
they can, they can get back to us. But if they're,

00:39:38.480 --> 00:39:40.210
if they're not and they want to re file, then they

00:39:40.210 --> 00:39:43.659
can let us know that they can let us at that time

00:39:43.670 --> 00:39:47.510
or before then there's no, I mean my my, I'd suggest

00:39:47.510 --> 00:39:52.699
the six months timeline remanded for six months, but

00:39:52.699 --> 00:39:54.329
they can always come back before then and they don't

00:39:54.329 --> 00:40:00.170
have to wait six months. So if they do or if they

00:40:00.170 --> 00:40:03.110
are struggling with issues you articulated and they

00:40:03.119 --> 00:40:06.280
do want to start from scratch and come back at a later

00:40:06.280 --> 00:40:08.219
point with the new application, they can let us know

00:40:08.730 --> 00:40:10.199
they don't have to wait six months to tell us that

00:40:10.869 --> 00:40:13.599
Does that make sense? It doesn't make, it does make

00:40:13.599 --> 00:40:16.190
sense. And at the end of the day, I think what we're

00:40:16.190 --> 00:40:20.079
saying here is that, um, we want to give the company

00:40:20.079 --> 00:40:22.710
an opportunity to come within compliance and so that

00:40:22.710 --> 00:40:25.460
we can get to a place where we can improve their amS

00:40:25.460 --> 00:40:28.710
deployment plan because the rollout of the events meters

00:40:28.710 --> 00:40:32.489
is important, um, for system resiliency, reliability

00:40:32.489 --> 00:40:35.550
for the consumers in el paso. So we want to see that

00:40:35.559 --> 00:40:39.260
happen. And you mentioned this as well. We all want

00:40:39.260 --> 00:40:42.480
this to get done. It's long overdue, but we want to

00:40:42.489 --> 00:40:46.110
do it right. We want to make sure the ratepayers benefit

00:40:46.110 --> 00:40:50.150
from all the full range of capabilities and the ecosystem

00:40:50.150 --> 00:40:54.159
does as well with the third party access. And as we

00:40:54.159 --> 00:40:58.809
get more unique innovative technologies in these ecosystems

00:40:58.809 --> 00:41:00.969
we need to be able to manage that and have the data

00:41:00.980 --> 00:41:04.480
to help optimize that and not and not to mention new

00:41:04.480 --> 00:41:08.650
innovative business models that have yet to be conjured

00:41:08.650 --> 00:41:12.579
up. This kind of data will be important for developing

00:41:12.579 --> 00:41:15.139
those. So we've got to do it right but we need, we

00:41:15.510 --> 00:41:17.820
want to get this done. Absolutely.

00:41:20.809 --> 00:41:24.619
I'm happy to to go with the majority here on on a

00:41:24.619 --> 00:41:29.510
plan to remedy. Um I'm I have a right mind to just

00:41:29.519 --> 00:41:32.400
deny it because I think there are, there are a lot

00:41:32.400 --> 00:41:38.239
of holes in it but I don't think that um ah furthers

00:41:38.239 --> 00:41:42.409
the process of getting amS deployed quickly so quickly

00:41:42.440 --> 00:41:47.449
I think my view of quickly and the company's view quickly

00:41:47.449 --> 00:41:50.349
are probably two different things anyway. But um you

00:41:50.349 --> 00:41:53.139
know, I would vote with the majority was remanded and

00:41:53.710 --> 00:41:58.599
um try to find um and help them understand what's expected

00:41:58.599 --> 00:42:01.900
from the commission in order to approve one final point

00:42:03.400 --> 00:42:07.849
I am in agreement with the direction we're headed and

00:42:07.849 --> 00:42:12.900
you raised the issue of denial. So how can we ensure

00:42:12.900 --> 00:42:15.409
that the rate payers are not paying more than they

00:42:15.409 --> 00:42:19.719
need to an attorney rape case expenses because this

00:42:19.719 --> 00:42:23.869
case has been filed for the application was very deficient

00:42:23.869 --> 00:42:26.199
And now we're remanding and it's gonna go on for a

00:42:26.199 --> 00:42:28.690
while longer. So I want to make sure we have a clear

00:42:28.690 --> 00:42:31.199
divide as to what's allowable for rape case expenses

00:42:31.199 --> 00:42:31.929
and what's not,

00:42:33.699 --> 00:42:37.599
we're gonna we're separating the cost of this implementation

00:42:37.750 --> 00:42:40.130
in the surcharge so they should be isolated. And I

00:42:40.130 --> 00:42:42.510
think by remanding, we're not going to let any of those

00:42:42.510 --> 00:42:46.429
charges surcharges to be collected until it's approved

00:42:47.610 --> 00:42:51.500
Right? But what I'm saying is that the rape case expenses

00:42:51.500 --> 00:42:56.019
associated with this docket um could be higher because

00:42:56.019 --> 00:42:59.619
of the deficient application because of the remand

00:42:59.619 --> 00:43:03.170
and continuous work on it. So I wanted to come up with

00:43:03.170 --> 00:43:10.559
a way to to mitigate the rape case expense um incurred

00:43:10.559 --> 00:43:13.179
as a result of this filing of this application. That's

00:43:13.179 --> 00:43:15.449
division. Does that make sense?

00:43:17.500 --> 00:43:20.110
Ratepayers shouldn't bear the burden of additional

00:43:21.500 --> 00:43:25.900
legal fees due to a poor application done the first

00:43:25.900 --> 00:43:28.559
time because if we deny the application then no rape

00:43:28.559 --> 00:43:32.889
cases would be they wouldn't be approved approved but

00:43:32.889 --> 00:43:36.489
we're remanding um and I know we've remanded before

00:43:36.500 --> 00:43:38.659
and we let parties address the issues but I guess that's

00:43:38.659 --> 00:43:42.039
an issue. We can look at whenever um what we'll ask

00:43:42.039 --> 00:43:44.320
for staff and the parties to look at that maybe um

00:43:44.329 --> 00:43:47.309
as they come back as an additional issue to be addressed

00:43:47.309 --> 00:43:54.590
in the remand questions over recovery for great case

00:43:54.590 --> 00:43:56.110
expenses in this proceeding?

00:43:58.000 --> 00:44:01.539
Is that clear on that one. Mr J or do we just

00:44:01.539 --> 00:44:04.510
want to shorten the timeline to limit the disclosure

00:44:04.690 --> 00:44:06.980
of those expenses and if they can't get it together

00:44:06.980 --> 00:44:10.880
by then yeah, I would think in three months MR Chairman

00:44:10.880 --> 00:44:13.489
if they can't do this. I mean that's a business quarter

00:44:13.889 --> 00:44:16.139
Some of these are complex things. It gives them a window

00:44:16.139 --> 00:44:19.679
with their vendor to expedite those conversations and

00:44:19.679 --> 00:44:23.150
get answers on that. Exactly. And if they can't do

00:44:23.150 --> 00:44:25.409
it within three months, well then they can, you know

00:44:26.090 --> 00:44:30.409
hold the application and we can't deny it.

00:44:32.289 --> 00:44:32.610
Right,

00:44:34.539 --> 00:44:36.739
limit the exposure. Put him on commissioner,

00:44:39.789 --> 00:44:40.920
Reducing it to three months.

00:44:44.090 --> 00:44:48.719
All right. Okay. So let's see if this motion is adequate

00:44:49.090 --> 00:44:49.500
All right.

00:44:51.590 --> 00:44:53.239
Let me check my notes. I've been trying to keep track

00:44:53.239 --> 00:44:56.309
of it. I'm going to make it broad. Don't worry. Okay

00:44:56.320 --> 00:45:00.099
well, let me, let me, let me let me let me go

00:45:00.099 --> 00:45:03.829
through what I've got to make sure we're all on the

00:45:03.829 --> 00:45:09.099
same page as for, so that the, the application is deficient

00:45:09.199 --> 00:45:12.960
First and foremost, in many regards, as for the specific

00:45:12.960 --> 00:45:13.980
waivers

00:45:16.690 --> 00:45:24.250
waving the rotating inspections is okay. Mhm. Um, I

00:45:24.250 --> 00:45:29.510
think Glory can, yeah, like get comfortable with that

00:45:30.480 --> 00:45:34.969
The waiver for the rotating testing of meters. Is that

00:45:34.969 --> 00:45:39.090
waiver is okay? The waiver for uh, deployment plan

00:45:39.090 --> 00:45:42.289
by geography is not, should not be granted progress

00:45:42.289 --> 00:45:45.699
reports. The way we should not be granted remote connect

00:45:45.699 --> 00:45:49.829
disconnect for polyphasic flavor is okay. Third party

00:45:49.829 --> 00:45:53.210
reads of both varieties on demand and the next day

00:45:53.789 --> 00:45:57.280
flavors should not be granted cost debates, rates,

00:45:57.280 --> 00:46:01.179
waiver is okay. So the costs are isolated in the surcharges

00:46:01.179 --> 00:46:05.800
Commissioner Cobos nicely identified the other deficiencies

00:46:06.380 --> 00:46:09.199
you stated on the record I think

00:46:11.579 --> 00:46:16.269
remind me what? So you have the surcharge in there

00:46:16.269 --> 00:46:19.300
So the the final couple of things are

00:46:22.280 --> 00:46:23.090
Load management

00:46:24.679 --> 00:46:30.820
review. So so look at your Your your colleagues from

00:46:30.820 --> 00:46:33.070
other utilities that are filing the same thing and

00:46:33.070 --> 00:46:35.900
give us issue areas that they plan to look at in 10

00:46:35.900 --> 00:46:39.909
years. Additionally, um

00:46:44.380 --> 00:46:49.860
3rd Party data requirements, they need to be able to

00:46:49.860 --> 00:46:54.630
provide a plan on providing that and then uh that's

00:46:54.630 --> 00:46:57.280
it. Those were the remaining topics I would add to

00:46:57.280 --> 00:46:59.769
the last sentence to your last sentence. Commission

00:46:59.769 --> 00:47:05.210
mcadams um that providing a plan to have a web portal

00:47:05.210 --> 00:47:09.579
for third party access with with with a timeline and

00:47:09.590 --> 00:47:13.849
a expected completion date because I don't want it

00:47:13.849 --> 00:47:18.059
going on for years. So with an ex expected compliance

00:47:18.059 --> 00:47:20.530
statement. Yes.

00:47:22.679 --> 00:47:27.780
So the broad motion could look like I would move to

00:47:27.780 --> 00:47:30.030
remand the proceeding to staff to remedy questions

00:47:30.030 --> 00:47:33.380
and issues reflected in our discussion with that

00:47:36.480 --> 00:47:37.639
with an expected

00:47:39.159 --> 00:47:44.289
no later than compliance or resolution Data. three

00:47:44.289 --> 00:47:47.000
months from the date of the remain.

00:47:49.539 --> 00:47:52.829
All right. Yes sir. I mean, we will plan to put this

00:47:52.829 --> 00:47:57.349
on a meeting on that timeline and at whatever state

00:47:57.360 --> 00:48:00.630
it is, it's either ready for your consideration or

00:48:00.630 --> 00:48:03.559
it's ready for summary.

00:48:05.969 --> 00:48:09.179
All right. I've got a motion to remand to the proceedings

00:48:09.179 --> 00:48:12.000
Docket management to allow the party to present supplemented

00:48:13.059 --> 00:48:17.699
information within six months, three months of the

00:48:18.269 --> 00:48:22.630
date of remained. Is there a second second? All in

00:48:22.630 --> 00:48:23.300
favor say, aye.

00:48:25.070 --> 00:48:27.500
None opposed motion passes. Thank you for taking us

00:48:27.500 --> 00:48:33.909
through that next item please. (item:4) Mr Jack Item four is

00:48:33.909 --> 00:48:38.500
docket 52389 Southwestern Electric Power Company's

00:48:38.500 --> 00:48:41.710
request for approval of an ams deployment. Plans are

00:48:41.710 --> 00:48:45.400
charged and nonstandard meter and fees. A proposed

00:48:45.400 --> 00:48:47.789
order was filed on April four and the Correction Memo

00:48:47.789 --> 00:48:51.550
was filed on April 12. I also have a memo with proposed

00:48:51.559 --> 00:48:52.579
changes to the order.

00:48:55.170 --> 00:49:00.139
Thank you sir. Another A. M. A. A. M. S. Case. I

00:49:00.139 --> 00:49:04.789
think it's safe to say this one is substantially more

00:49:05.269 --> 00:49:08.989
thorough and further along than the application we

00:49:08.989 --> 00:49:13.179
just discussed. Um But I do I do have some thoughts

00:49:13.179 --> 00:49:17.480
on I think there's still some deficiencies. I imagine

00:49:17.480 --> 00:49:19.420
you'll have some thoughts, comments and questions as

00:49:19.420 --> 00:49:19.789
well.

00:49:21.570 --> 00:49:26.949
Open the forum. Mr kobo says some note sounds I guess

00:49:26.949 --> 00:49:31.369
I'll take the baton next. Um Alright, so similar issues

00:49:31.369 --> 00:49:36.440
I think um with respect to um the granting the waivers

00:49:36.440 --> 00:49:39.409
requested. Um I know some people pull down their their

00:49:39.409 --> 00:49:42.449
requests for the monthly progress reports and are in

00:49:42.449 --> 00:49:45.670
fact now filing monthly progress reports. So that rule

00:49:45.670 --> 00:49:49.369
waiver request is no longer needed. Um The second rule

00:49:49.369 --> 00:49:53.300
waiver request is with respect to um the requirement

00:49:53.309 --> 00:49:55.670
that disconnection reconnection capability for all

00:49:55.670 --> 00:50:00.269
advanced meters rated at or below 200 amps be waived

00:50:00.269 --> 00:50:04.570
And um as consistent with our prior discussion, I would

00:50:04.699 --> 00:50:05.000
recommend

00:50:07.340 --> 00:50:09.809
everybody's okay on the first one was kind of solved

00:50:09.809 --> 00:50:12.730
itself the same opinion on the same opinion

00:50:14.250 --> 00:50:18.719
um with with their with respect to their um requests

00:50:18.730 --> 00:50:22.039
to waive the requirement that the capability provide

00:50:22.039 --> 00:50:24.579
access to customer use to general data via the utilities

00:50:24.960 --> 00:50:28.449
web portal on the day after basis and the capability

00:50:28.449 --> 00:50:30.570
to provide demand reads of the customers advanced meters

00:50:30.960 --> 00:50:33.800
to authorize parties through the graphical graphical

00:50:33.800 --> 00:50:36.469
user interfaces, the utilities web portal. These two

00:50:36.469 --> 00:50:40.119
issues are my basis would be the same as it was in

00:50:40.119 --> 00:50:43.110
el paso that the company hasn't established that it's

00:50:43.260 --> 00:50:45.739
uneconomic and technically infeasible to comply with

00:50:45.739 --> 00:50:51.239
these requirements. So I would deny the waiver On those

00:50:51.510 --> 00:50:53.780
two requests. I agree.

00:50:55.559 --> 00:50:59.829
Okay. And then um with respect to the requirement that

00:50:59.840 --> 00:51:02.460
implementing AMS be moved into base rates.

00:51:04.159 --> 00:51:06.889
If the base rate occurs during the AMS deployment period

00:51:06.889 --> 00:51:09.519
I would grant this waiver based on the same reasoning

00:51:09.519 --> 00:51:13.079
that I provided in the el pasO race. I agree. Okay

00:51:13.460 --> 00:51:18.820
Um does the company um I guess the swift codes AMS

00:51:18.820 --> 00:51:21.150
deployment plan and surcharge failed to comply with

00:51:21.150 --> 00:51:24.360
any other requirements in the commission's AMS rule

00:51:24.369 --> 00:51:29.099
um and which um requirements did they request or for

00:51:29.099 --> 00:51:31.929
which Flacco did not request a waiver and the same

00:51:31.929 --> 00:51:36.269
basis or same issue as in the paso case, um The utility

00:51:36.269 --> 00:51:38.050
has not submitted a schedule for the deployment of

00:51:38.050 --> 00:51:41.909
the portal functionality. And so um I would find that

00:51:41.920 --> 00:51:44.489
their application is deficient on this issue and this

00:51:44.489 --> 00:51:45.670
amS real requirement.

00:51:48.260 --> 00:51:52.489
Um Did the did did the parties adequately address the

00:51:52.489 --> 00:51:54.079
issue raised in the preliminary order regarding the

00:51:54.079 --> 00:51:58.349
effect of AMS technology and unload management in a

00:51:58.349 --> 00:52:02.690
scarcity event? I think in this case they did um swept

00:52:02.690 --> 00:52:05.269
code provided testimony and the application and um

00:52:05.280 --> 00:52:07.860
in their in their application testimony or testimony

00:52:07.860 --> 00:52:11.099
appended to their application as filed. And um they

00:52:11.099 --> 00:52:13.369
also responded to our F. I. S. That were propounded

00:52:13.369 --> 00:52:16.409
on them and provided information on this important

00:52:16.409 --> 00:52:19.710
issue. So just like everything. What does right look

00:52:19.719 --> 00:52:22.489
like in my opinion on this sort of subjective test

00:52:22.500 --> 00:52:25.219
because again, this is new information that that we're

00:52:25.219 --> 00:52:29.280
seeking for a new policy agenda where it's always been

00:52:29.280 --> 00:52:31.659
there, but we're emphasizing it this is what in my

00:52:31.659 --> 00:52:35.329
opinion, right looks like. Mhm. Yeah, that's an important

00:52:35.329 --> 00:52:38.639
distinction. Um I appreciate them getting that right

00:52:40.849 --> 00:52:45.960
agree agree on that. So ultimately my recommendation

00:52:45.960 --> 00:52:52.579
would be um to approve the application. Mhm. But um

00:52:52.590 --> 00:52:55.920
you know, as as discussed, not grant the rural waivers

00:52:55.929 --> 00:52:58.809
that we discussed and grant the waivers that we are

00:52:58.820 --> 00:53:01.730
we're comfortable with granting but with respect to

00:53:01.730 --> 00:53:04.610
the web portal issues and third party web portal issues

00:53:04.619 --> 00:53:10.050
that in our order approving the application that we

00:53:10.059 --> 00:53:15.750
um direct staff to open a compliance docket. Um so

00:53:15.750 --> 00:53:20.000
that the company can um foul a plan and a timeline

00:53:20.000 --> 00:53:22.300
and expected completion date to comply with the third

00:53:22.300 --> 00:53:26.510
party web portal access requirements. So we want to

00:53:26.510 --> 00:53:29.889
see a definitive timeline and completion date so that

00:53:29.889 --> 00:53:34.760
we put in a, you know, back in um you know, deadline

00:53:35.550 --> 00:53:38.679
This doesn't go on for for years in the compartment

00:53:40.550 --> 00:53:45.960
Does that make sense? I it certainly makes sense in

00:53:45.960 --> 00:53:48.639
terms of solving the the issue I think we all want

00:53:48.639 --> 00:53:53.380
to solve. I'm curious on why the pros and cons of taking

00:53:53.380 --> 00:53:56.949
that approach versus the quick remand that we did in

00:53:56.949 --> 00:54:01.710
the last case. I think we might. I don't I don't know

00:54:01.710 --> 00:54:05.889
I'm asking would would it be more streamlined two take

00:54:05.889 --> 00:54:09.670
a similar approach quickly man, we need this information

00:54:09.670 --> 00:54:12.710
before we're going to approve it Because that 3rd party

00:54:12.710 --> 00:54:16.050
data is so important and you know, we better see it

00:54:16.050 --> 00:54:16.659
pretty quick.

00:54:18.840 --> 00:54:21.780
Okay. So I don't I don't know the pros and cons. Well

00:54:21.789 --> 00:54:24.789
um the reason I threw that out there is because that's

00:54:24.800 --> 00:54:27.530
the framework we use for the energy ams deployment

00:54:27.530 --> 00:54:30.760
plan. Of course we don't want to let you know the the

00:54:30.760 --> 00:54:34.860
compliance stock it go on for years. So um really no

00:54:34.860 --> 00:54:37.679
pros and cons I guess if if we want if we are

00:54:37.679 --> 00:54:41.170
comfortable remanding it and having them submit information

00:54:42.039 --> 00:54:47.380
um, To comply with the 3rd party web portal access

00:54:47.389 --> 00:54:49.949
and submit a timeline and expect expected completion

00:54:49.949 --> 00:54:52.920
date. I mean, we still need to ensure compliance and

00:54:52.920 --> 00:54:54.670
that's why I was thinking the compliance stock it would

00:54:54.679 --> 00:54:57.340
be helpful so that we can get that information in there

00:54:57.340 --> 00:54:59.670
so they can get rolling on their deployment.

00:55:01.539 --> 00:55:03.460
I hear you. I'm tempted to avoid

00:55:05.039 --> 00:55:08.039
anything that looks like the energy situation that

00:55:08.039 --> 00:55:13.570
we the inter G situation I would suggest the issues

00:55:13.579 --> 00:55:17.239
addressed here are so much more limited than they are

00:55:17.250 --> 00:55:20.940
in el paso. The the likelihood of a quick turnaround

00:55:20.940 --> 00:55:24.110
is much better. I'm looking at steven in terms of staff

00:55:24.110 --> 00:55:28.260
engagement, in terms of, you know, riveting that that

00:55:28.260 --> 00:55:32.730
feedback before approval, we could still grant the

00:55:32.739 --> 00:55:34.190
three months no later then

00:55:36.860 --> 00:55:38.739
that's that's the no later than before. We have to

00:55:38.750 --> 00:55:40.969
kill them, which we don't want to do.

00:55:43.440 --> 00:55:46.719
Yeah. I think it's consistent with what we did. Yeah

00:55:46.730 --> 00:55:49.780
And and one thing that just came to mind too, is that

00:55:50.340 --> 00:55:54.030
once we approve the plan, the company can start assessing

00:55:54.030 --> 00:55:58.639
the surcharge. So we want to make sure that do we,

00:55:58.900 --> 00:56:01.809
you know, get all our ducks in a row and get that

00:56:02.190 --> 00:56:05.230
So that's a con against my recommendation. But it's

00:56:05.230 --> 00:56:08.250
the same point you made with el paso is they didn't

00:56:08.250 --> 00:56:10.750
address key issues and they shouldn't be paid for poor

00:56:10.750 --> 00:56:11.050
work

00:56:12.630 --> 00:56:16.059
and we can avoid that with the remand? Okay. I mean

00:56:16.059 --> 00:56:17.119
I'm open to that. I just kind of

00:56:20.139 --> 00:56:23.550
That's consistent. Thank you. Okay, thank you for laying

00:56:23.550 --> 00:56:26.050
that out and and working through that.

00:56:27.730 --> 00:56:32.159
It was much more efficient than that way. Well, you

00:56:32.530 --> 00:56:36.809
go ahead. Yeah, you blazed the trail for us. Alright

00:56:36.809 --> 00:56:41.050
So on this specific waivers requested monthly progress

00:56:41.050 --> 00:56:42.739
reports. Let me make sure I got this right. We're on

00:56:42.739 --> 00:56:46.250
the same page. Monthly progress reports has moved remote

00:56:46.250 --> 00:56:49.219
connect, disconnect waiver is okay. Third party read

00:56:49.219 --> 00:56:53.880
for both one day and on demand waivers should not be

00:56:53.880 --> 00:56:57.650
granted and we need to know why we know these are economically

00:56:57.650 --> 00:57:00.940
feasible. These are economic and feasible and almost

00:57:00.940 --> 00:57:02.980
every other part of texas. So what in the world wouldn't

00:57:02.989 --> 00:57:11.579
be here. And finally the waiver request two put the

00:57:11.579 --> 00:57:14.590
cost of implementation and a surcharge instead of base

00:57:14.590 --> 00:57:15.460
rate should be granted.

00:57:17.099 --> 00:57:19.639
We get that right. I think everybody's on the same

00:57:19.639 --> 00:57:23.139
page there. That's correct, correct. So I think we

00:57:23.139 --> 00:57:28.150
are looking for a motion to remand the docket management

00:57:28.230 --> 00:57:34.210
to allow the party to present uh the supporting her

00:57:34.219 --> 00:57:38.860
supplemental information that we just articulated within

00:57:38.869 --> 00:57:44.750
three months. I just want to make that motion second

00:57:45.130 --> 00:57:47.469
all in, we've got a motion and a second all in favor

00:57:47.469 --> 00:57:48.980
say, aye,

00:57:50.829 --> 00:57:55.059
I'm not opposed. Good work. Y'all. Thank you for laying

00:57:55.059 --> 00:57:55.530
that out.

00:57:57.630 --> 00:58:00.650
So just so we are on the same page. If we have

00:58:00.650 --> 00:58:03.210
the three month submission period, that will be a little

00:58:03.210 --> 00:58:05.340
longer than that before it gets back in front of you

00:58:07.920 --> 00:58:11.679
Is that the case even if they comply early? No, not

00:58:11.679 --> 00:58:13.940
necessarily. It's depends on how early.

00:58:16.019 --> 00:58:18.750
Yeah, just what he's saying is you'll you'll get resolution

00:58:18.750 --> 00:58:20.630
one way or another. You will get your answers or you

00:58:20.630 --> 00:58:24.500
won't and then we'll get the preceding up there after

00:58:24.550 --> 00:58:27.989
Sure. Just if it hits the door, three months, 90 days

00:58:27.989 --> 00:58:31.780
from the day, it still needs to go through the examination

00:58:31.780 --> 00:58:35.059
process here. That's that's fine. And and it's it's

00:58:35.059 --> 00:58:40.820
not inconceivable that whatever they file um meets

00:58:40.820 --> 00:58:45.050
resistance and it could even lead to re referral to

00:58:45.050 --> 00:58:50.099
sew up for hearing on these matters how we that sounds

00:58:50.099 --> 00:58:53.679
bad. That's what has to happen. I mean, I don't know

00:58:53.679 --> 00:58:56.909
I just I just I don't want you to be surprised if

00:58:56.909 --> 00:59:00.610
it it's a bustier than you think it might be.

00:59:03.670 --> 00:59:07.809
That's okay, as long as we get it right both of these

00:59:07.809 --> 00:59:11.469
cases and as always, we would welcome both of these

00:59:11.480 --> 00:59:16.429
parties too, address issues we've I spent a lot of

00:59:16.429 --> 00:59:19.099
time laying out here adequately thoroughly and they

00:59:19.099 --> 00:59:21.889
should feel free to bring that information back to

00:59:21.889 --> 00:59:24.039
us sooner rather than later.

00:59:27.519 --> 00:59:32.469
All right. Next item, please sir, (item:5) item five is docket

00:59:32.469 --> 00:59:35.949
 52715. It's the application of Denton Municipal

00:59:35.949 --> 00:59:38.469
electric exchange rates for wholesale transmission

00:59:38.469 --> 00:59:43.039
service before you is an appeal of order number four

00:59:45.619 --> 00:59:47.989
Alright, this is an interesting thoughts, comments

00:59:48.000 --> 00:59:48.739
questions.

00:59:50.519 --> 00:59:55.719
So I agree. It's it's interesting. I think it boils

00:59:55.719 --> 00:59:56.699
down to

00:59:59.119 --> 01:00:05.789
a question between sufficiency versus merits. Um yeah

01:00:06.800 --> 01:00:09.219
as we explore this Mr chairman, I was wondering if

01:00:09.219 --> 01:00:13.980
you could humor me. Um I'd like to ask staff in the

01:00:13.980 --> 01:00:17.949
intro and my staff, I mean Darryl, because he's he's

01:00:17.949 --> 01:00:20.739
a great all things rates guy here at the commission

01:00:21.309 --> 01:00:25.159
on what is in our interest, staff's interests in terms

01:00:25.170 --> 01:00:29.190
in terms of the information that is needed and when

01:00:29.199 --> 01:00:34.820
it is needed. Um if that's all right. Absolutely. Okay

01:00:35.110 --> 01:00:35.929
Darryl,

01:00:37.510 --> 01:00:43.099
as I looked at this in a perfect world, would you want

01:00:43.099 --> 01:00:45.969
to see a depreciation study with the initial filing

01:00:45.969 --> 01:00:51.269
package? Okay. Uh, Good morning Commission Mcadams

01:00:51.400 --> 01:00:54.329
Commissioners Darryl Darryl teaching on behalf of staff

01:00:55.110 --> 01:00:59.719
Um and I'm sorry Commissioner Mcadams, you always catch

01:00:59.719 --> 01:01:02.639
me by surprise and scare me. Uh could you repeat that

01:01:02.639 --> 01:01:03.389
question please?

01:01:06.409 --> 01:01:10.329
In a perfect world? And I'm talking about from processing

01:01:10.329 --> 01:01:14.139
so that we can expeditiously review and adjudicate

01:01:14.510 --> 01:01:18.699
these cases. Would you want to see an appreciation

01:01:18.699 --> 01:01:22.550
study with the initial filing package? I think the

01:01:22.550 --> 01:01:25.400
answer, in my view, the answer to that is an unequivocal

01:01:25.400 --> 01:01:30.489
yes. Uh in terms of at least in terms of the interim

01:01:30.500 --> 01:01:32.909
t cost filings and for that matter, one could make

01:01:32.909 --> 01:01:36.510
the same point about a comprehensive rate case. Uh

01:01:36.519 --> 01:01:39.800
by by sort of design, not sort of by design. The

01:01:39.800 --> 01:01:43.170
interim T cause proceedings are the objective is to

01:01:43.179 --> 01:01:46.860
to process them and administratively expedient and

01:01:46.860 --> 01:01:50.780
timely manner and a utility that provides the information

01:01:50.860 --> 01:01:55.739
right up front as in the most easily accessible and

01:01:55.750 --> 01:02:00.469
useful and informative form is going to serve that

01:02:00.480 --> 01:02:06.320
objective. So, um in the case of depreciation, because

01:02:06.800 --> 01:02:09.650
depreciation is unique in terms of the data points

01:02:09.659 --> 01:02:13.760
that you'll account for. But it is very important.

01:02:13.769 --> 01:02:17.170
And in my view, um in the course of utilities business

01:02:17.170 --> 01:02:19.619
model, I mean, it's a big deal because the numbers

01:02:19.619 --> 01:02:24.750
are big. Um What specifically about depreciation? It

01:02:24.750 --> 01:02:27.579
has been asserted that we don't even know what a study

01:02:27.590 --> 01:02:30.860
should look like in the case of didn't so what should

01:02:30.860 --> 01:02:33.309
that look like? What do you need in a depreciation

01:02:33.309 --> 01:02:35.789
study to be able to adequately view that an expedition

01:02:35.820 --> 01:02:39.190
process. Uh Commissioner Mcadams with with the caveat

01:02:39.190 --> 01:02:43.650
that I had. I'm I have not done the appreciation studies

01:02:43.650 --> 01:02:49.550
myself. Um However, anyone can take sort of different

01:02:49.550 --> 01:02:53.880
viewpoints on this. But this being every case, of course

01:02:53.880 --> 01:02:56.019
as we all know, is different. Every case has unique

01:02:56.019 --> 01:02:59.090
circumstances. Every time during my time at the commission

01:02:59.090 --> 01:03:01.619
I think there is a simple issue in a simple proceeding

01:03:03.300 --> 01:03:05.420
As mike Tyson said everybody, everybody has a plan

01:03:05.420 --> 01:03:09.929
until you get punched in the face. Um The there is

01:03:10.300 --> 01:03:14.920
hardly if ever a simple type of issue in the proceeding

01:03:15.719 --> 01:03:19.349
There have been some debates or arguments made about

01:03:19.349 --> 01:03:22.929
this debt in case, in in various ways that, well, uh

01:03:22.940 --> 01:03:26.119
Denton is being treated in a certain way. Uh Perhaps

01:03:26.119 --> 01:03:28.960
so, my view on that is Denton has not had a comprehensive

01:03:28.960 --> 01:03:32.980
red case for I forget 20 years or thereabouts a couple

01:03:32.980 --> 01:03:35.329
of years ago or maybe going on three years ago. I have

01:03:35.329 --> 01:03:38.050
to think about it when we the staff recommended to

01:03:38.050 --> 01:03:40.369
the commission to require didn't follow rate case,

01:03:40.380 --> 01:03:44.170
it was because Didn't had not had a comprehensive rate

01:03:44.170 --> 01:03:49.409
review and call it 20 years, give or take. Uh The method

01:03:49.409 --> 01:03:52.519
by which their return dollars have been computed. We

01:03:52.519 --> 01:03:56.199
felt definitely needs to be reevaluated, Especially

01:03:56.199 --> 01:03:59.119
given that the company had grown quite considerably

01:03:59.130 --> 01:04:05.130
during that 20 or so years. And so, ah with regard

01:04:05.130 --> 01:04:07.889
to the current proceeding, again, it is a comprehensive

01:04:07.889 --> 01:04:12.000
rate proceeding as directed by the commission. Uh And

01:04:12.000 --> 01:04:18.219
so we, the staff believed that just sort of and inescapably

01:04:18.789 --> 01:04:22.480
necessary. Part of that filing should be a comprehensive

01:04:22.489 --> 01:04:26.809
depreciation study uh or consistent with the requirements

01:04:26.809 --> 01:04:28.650
of the rate following package. Now, I know that there's

01:04:28.650 --> 01:04:31.369
been some debate about the wording and the meaning

01:04:31.369 --> 01:04:33.059
of the rate following package. And we can certainly

01:04:33.059 --> 01:04:36.289
discuss that if you wish. But but well, well, so, my

01:04:36.289 --> 01:04:40.309
follow on is again, it gets that heart of sufficiency

01:04:40.309 --> 01:04:43.329
versus the merits at what stage of the process do we

01:04:43.329 --> 01:04:46.719
pursue these questions to get to get this information

01:04:47.090 --> 01:04:50.329
Now, what is lost? If you simply wait to discovery

01:04:51.690 --> 01:04:55.500
Ah well, I would say what's lost and actually, I'm

01:04:55.500 --> 01:04:57.619
having spoke earlier, this is not a guarantee because

01:04:57.619 --> 01:05:00.780
this is a comprehensive case. And so again, the whole

01:05:00.780 --> 01:05:06.000
objective of the utility providing information as required

01:05:06.489 --> 01:05:09.030
by the provision of a rate following package is to

01:05:09.039 --> 01:05:11.739
as much as reasonably possible, eliminate the need

01:05:11.739 --> 01:05:14.920
for discovery. We all know that there are games that

01:05:14.920 --> 01:05:16.760
have always been played in terms of what our utility

01:05:16.760 --> 01:05:20.590
files and what what a what various interveners, including

01:05:20.590 --> 01:05:23.789
staff wants to see in terms of greater detail or just

01:05:23.789 --> 01:05:27.849
simply more information. I would reference

01:05:29.369 --> 01:05:33.309
the most recent proceeding in which the commission

01:05:33.989 --> 01:05:36.510
expressly in an open meeting, just like right now,

01:05:36.889 --> 01:05:39.769
former commissioner, former chairman uh walker called

01:05:39.769 --> 01:05:42.969
me up and said, hey, can you open up 491. Can you

01:05:42.980 --> 01:05:45.900
can you open the project which ended up to be 49199

01:05:45.909 --> 01:05:50.769
for the specific purpose of having utilities file more

01:05:50.780 --> 01:05:53.789
detailed and granular, granular information up front

01:05:53.800 --> 01:05:57.469
in the initial rate falling package. In my mind that

01:05:58.989 --> 01:06:01.190
I'm getting maybe into areas which you haven't asked

01:06:01.190 --> 01:06:04.349
me about. But but in my view, in my view, the argument

01:06:04.349 --> 01:06:07.719
that a guideline did a rate following package adopted

01:06:07.719 --> 01:06:11.969
by the commission served only as a guideline is fundamentally

01:06:11.969 --> 01:06:16.840
at odds at a quantum level, even I would say with the

01:06:16.849 --> 01:06:22.380
with the nature of the project, in which the commission

01:06:22.389 --> 01:06:26.530
adopts the form, it is analogous, in my view to a rulemaking

01:06:26.539 --> 01:06:30.429
it's not analogous that the same procedural operational

01:06:30.429 --> 01:06:34.329
steps are used, workshops are held strong, man has

01:06:34.329 --> 01:06:38.320
published comments are made, the the commission responses

01:06:38.320 --> 01:06:40.699
are developed. The commission ultimately proves it

01:06:40.710 --> 01:06:44.150
to say that it's it only provides a guideline to me

01:06:44.150 --> 01:06:49.730
is just absolutely at odds with the with the, the resources

01:06:49.730 --> 01:06:52.610
and the time and the effort and ultimately, the objective

01:06:52.619 --> 01:06:56.460
of getting the company to provide extremely, very specific

01:06:56.460 --> 01:07:00.599
information, as was evidenced in doc project 49199

01:07:01.380 --> 01:07:03.599
Well, so, so where I'm going with my question Mr. Chairman

01:07:04.860 --> 01:07:10.090
look in my experience, especially with the non option

01:07:10.090 --> 01:07:14.469
entities, um they are different by definition, by statutory

01:07:14.469 --> 01:07:18.110
definition, um a lot of pages involved in separating

01:07:18.110 --> 01:07:22.519
them from our investor owned utilities, but at the

01:07:22.519 --> 01:07:25.360
end of the day, we've got to sign off on their wholesale

01:07:25.360 --> 01:07:29.920
rates. I mean, that that is a passed on cost to the

01:07:29.920 --> 01:07:33.500
system, not just their own service territory ratepayers

01:07:34.079 --> 01:07:37.829
And so, um our staff has an obligation to gather as

01:07:37.829 --> 01:07:41.130
much information up front that allows them to start

01:07:41.130 --> 01:07:45.110
processing that in a judicious way early on, they have

01:07:45.110 --> 01:07:49.590
an interest in and thus, uh it's not really a process

01:07:49.590 --> 01:07:52.710
that that should require the force of law behind it

01:07:52.719 --> 01:07:56.139
When you have an application packet formalized as you've

01:07:56.139 --> 01:07:58.769
described. I mean, it goes through a similar parallel

01:07:58.769 --> 01:08:01.360
process. I mean, if we've got to go through rulemaking

01:08:01.360 --> 01:08:06.079
on everything process uh period, that's a major undertaking

01:08:06.079 --> 01:08:07.489
Matter of fact, I think we're kind of experiencing

01:08:07.489 --> 01:08:10.969
that right now with the market design evaluations,

01:08:10.980 --> 01:08:16.350
so um Mhm. I think it's important to get as much right

01:08:16.359 --> 01:08:19.359
up front for the purposes of staffs consideration so

01:08:19.359 --> 01:08:22.789
that we can eventually adjudicate that as possible

01:08:23.539 --> 01:08:29.079
and so, so I'm leaning towards agreeing with staff

01:08:29.090 --> 01:08:31.420
and that's why I wanted to tease these out from Mr

01:08:31.609 --> 01:08:34.949
Jin's perspective. Um Well, we'll put Daryl, thank

01:08:34.949 --> 01:08:41.409
you for perfect working on the fly, the best answers

01:08:41.409 --> 01:08:45.850
come that way. So, what, what what I'm hearing from

01:08:45.850 --> 01:08:51.239
you is that the the language under question does require

01:08:51.520 --> 01:08:54.840
the depreciation study, but it is not happening on

01:08:54.840 --> 01:08:57.760
what that looks like, I think because you got to give

01:08:57.760 --> 01:08:58.149
us something

01:09:01.069 --> 01:09:02.590
and that's the standard, you gotta give us something

01:09:03.149 --> 01:09:08.180
but it does not have the same force behind it is rulemaking

01:09:10.270 --> 01:09:14.340
Um That is true, but it's akin, I mean, for staff to

01:09:14.350 --> 01:09:17.979
be able to process it, they gotta have this. I mean

01:09:17.989 --> 01:09:21.689
this starts off as a staff investigatory proceedings

01:09:22.170 --> 01:09:24.449
to gather information and then make a recommendation

01:09:24.449 --> 01:09:26.210
and then they enter into a discovery period where it's

01:09:26.210 --> 01:09:30.100
more formalized, I mean, I'd welcome any thoughts Mr

01:09:30.100 --> 01:09:31.840
Carlos, you have a lot of experience with this, with

01:09:32.869 --> 01:09:37.550
yes. Um beyond, I think, well, you know, the importance

01:09:37.550 --> 01:09:40.319
of the right calling packages, Darryl stated is very

01:09:40.319 --> 01:09:44.609
important, right? I mean, staff needs to have the information

01:09:44.619 --> 01:09:48.920
um upfront um submitted via rate filing package with

01:09:48.920 --> 01:09:52.899
the utilities application in a manner that allows staff

01:09:52.909 --> 01:09:58.770
um the time and um ability to examine the significant

01:09:58.779 --> 01:10:01.590
amount of information that submitted with a rate filing

01:10:01.600 --> 01:10:05.189
application. Right. Right. Right. Right. So I think

01:10:05.189 --> 01:10:10.109
it's, you know, the question of whether a utility needs

01:10:10.109 --> 01:10:13.050
to comply with the rate filing package. I think yes

01:10:13.359 --> 01:10:17.840
Um The main question we're answering here is how do

01:10:17.840 --> 01:10:21.119
we interpret the language of the schedule as to whether

01:10:21.130 --> 01:10:26.050
depreciation study is required? Um So, um you know

01:10:26.050 --> 01:10:28.050
on one hand, if you agree that the differentiation

01:10:28.050 --> 01:10:30.090
study is required and getting it up front with the

01:10:30.090 --> 01:10:32.739
right filing package allows staff more time to review

01:10:32.739 --> 01:10:37.750
a very complicated complex, some degree, probably convoluted

01:10:37.760 --> 01:10:42.899
study um as opposed to through our F. I. S. Which,

01:10:42.909 --> 01:10:45.710
you know, in the middle of the litigated case, it will

01:10:45.710 --> 01:10:48.680
allow you a limited time to review the information

01:10:49.159 --> 01:10:54.289
especially a study. Right? So um that's just one, you

01:10:54.289 --> 01:10:58.510
know, I guess advantages and positive if a depreciation

01:10:58.510 --> 01:11:02.829
study is needed as to why you'd want to get. Um I

01:11:02.829 --> 01:11:08.579
agree the language is ambiguous. Um And and that's

01:11:08.579 --> 01:11:11.939
that's what we need to settle here, the foundation

01:11:11.939 --> 01:11:16.229
of, right, because it's Darryl, I think you're saying

01:11:16.229 --> 01:11:20.399
that appreciation study is very important. Um And whether

01:11:20.399 --> 01:11:24.189
or not Denton has has one or not is another question

01:11:24.659 --> 01:11:29.550
but you know, are we going to require an appreciation

01:11:29.550 --> 01:11:31.649
study in every case is one submitted in every case

01:11:31.649 --> 01:11:36.779
that I hear that the answer is yes, or I think the

01:11:36.789 --> 01:11:40.289
language of the RFP uh states that either commission

01:11:40.289 --> 01:11:44.789
approved rates or depreciation study, uh and it is

01:11:45.020 --> 01:11:47.850
when you read that, when you read the briefs, it is

01:11:47.859 --> 01:11:50.789
it is apparent or it's not apparent the problem with

01:11:50.789 --> 01:11:54.569
it. The problem with the Denton, The situation is that

01:11:54.579 --> 01:11:58.180
in their last case, which was 3:00 5, 3, 8 3 or

01:11:58.180 --> 01:12:00.970
something, which which indicates how long ago it was

01:12:01.350 --> 01:12:03.840
Uh It was it was a subtle case and there were there

01:12:03.840 --> 01:12:07.529
were no depreciation rates. Hence, here we are, however

01:12:07.529 --> 01:12:10.640
many years later, 20 years or so later, and we're trying

01:12:10.640 --> 01:12:14.569
to Yeah, so, I think what, what I'm hearing and I'm

01:12:14.689 --> 01:12:17.350
interested to hear from Mr Clodfelter, I think what

01:12:17.350 --> 01:12:19.520
I'm hearing from you all is yes, you need the one and

01:12:19.520 --> 01:12:22.470
it says you need to provide the basis for the depreciation

01:12:23.350 --> 01:12:26.050
right? It's used. That means you need to submit the

01:12:26.060 --> 01:12:32.020
bridging study of some sort and that's the most relevant

01:12:32.029 --> 01:12:37.880
decision point on this particular appeal, nope. Okay

01:12:38.550 --> 01:12:39.270
The

01:12:40.949 --> 01:12:45.550
the other issues beyond that, or does it have the force

01:12:45.550 --> 01:12:50.039
of rulemaking, what is the definition other rates of

01:12:50.039 --> 01:12:53.770
the depreciation study is not something I think we

01:12:53.770 --> 01:12:55.949
need to solve today. We need to establish whether you've

01:12:55.949 --> 01:12:59.210
got to submit something, whether that's the quality

01:12:59.210 --> 01:13:00.609
scope, etcetera of that is

01:13:02.550 --> 01:13:04.470
bigger issue than we need to solve today, I think.

01:13:05.550 --> 01:13:08.859
And if you want me to mumble something, I will, but

01:13:08.859 --> 01:13:14.170
I agree. I think I hear from the commissioner, I'm

01:13:14.170 --> 01:13:16.989
an agreement that I think depreciation study is important

01:13:16.989 --> 01:13:21.609
I think the staff is right on this one. I think, you

01:13:21.609 --> 01:13:25.210
know, based upon what staff has said that in this case

01:13:25.220 --> 01:13:30.640
a little different. But the the they don't have uh

01:13:30.649 --> 01:13:33.600
depreciation rates approved by the commission, we have

01:13:33.600 --> 01:13:35.420
to have something to base it on. So they have to do

01:13:35.420 --> 01:13:39.260
a study. Okay. I think we're all consistent on that

01:13:41.260 --> 01:13:42.789
Yeah, I mean, it's been years since they've been in

01:13:42.789 --> 01:13:48.949
for for a comprehensive right case. So, um, I know

01:13:48.949 --> 01:13:51.260
didn't have submitted some information to supplement

01:13:51.260 --> 01:13:55.630
their there. I guess depreciation rates that are in

01:13:55.630 --> 01:14:00.930
place or and and so um the question is, is that sufficient

01:14:00.939 --> 01:14:03.750
or because it's been so long, should we go make them

01:14:03.760 --> 01:14:08.130
file an updated comprehensive depreciation and given

01:14:08.130 --> 01:14:11.279
those facts, I am, I am leaning towards the depreciation

01:14:11.279 --> 01:14:16.479
study would be inclined to grant the appeals that does

01:14:16.479 --> 01:14:18.989
have to submit appreciation study.

01:14:23.729 --> 01:14:28.659
Does anybody have emotion just a second? All right

01:14:28.670 --> 01:14:33.680
All in favor say hi, hi, unopposed motion passes. Thank

01:14:33.680 --> 01:14:34.489
you all thank you. Daryl

01:14:36.460 --> 01:14:39.460
six. We've got a number of items that worked in scented

01:14:40.039 --> 01:14:42.779
Um we've already addressed those, I don't have anything

01:14:42.779 --> 01:14:48.000
for 13 and 14, Which brings us to item 15, we have

01:14:48.000 --> 01:14:55.750
a couple of memos. (item:15) Uh huh Lori you your memo has the

01:14:55.750 --> 01:14:57.460
most robust discussion

01:15:00.340 --> 01:15:02.949
attached to it. So let's let's save that for

01:15:05.239 --> 01:15:06.260
once. We get through

01:15:08.489 --> 01:15:13.020
Much kinder for fear in terms of what it seeks to accomplish

01:15:13.489 --> 01:15:18.109
Call out item 15 project number 52373. Review wholesale market rates

01:15:20.140 --> 01:15:22.479
Mr Chairman, thank you for your preliminary introduction

01:15:23.439 --> 01:15:28.949
My memo is an attempt. It's a cry for help. Um are

01:15:29.340 --> 01:15:33.409
our office as you know, since redesign was taken up

01:15:33.420 --> 01:15:38.369
has been trying to seek out what the most important

01:15:38.840 --> 01:15:44.199
issues and considerations policy parameters were to

01:15:44.210 --> 01:15:48.510
be considered on the topic of distributed generation

01:15:48.520 --> 01:15:52.600
on our system or distributed energy resources. Uh It

01:15:52.609 --> 01:15:55.560
is um I call it the Holy Grail issue. If we can

01:15:55.560 --> 01:15:59.079
ever crack the code on that, then the grid has unlimited

01:15:59.079 --> 01:16:05.170
potential in terms of segmentation, in terms of resiliency

01:16:05.180 --> 01:16:09.899
capability, in terms of resource adequacy, all the

01:16:09.899 --> 01:16:13.210
other grids are tackling this as well. Work is keenly

01:16:13.220 --> 01:16:17.430
interested in it. Our staff complement in terms of

01:16:17.430 --> 01:16:20.109
the the work that went into the formation of the memo

01:16:20.109 --> 01:16:23.000
trying to boil down the key topics that we would seek

01:16:23.000 --> 01:16:26.239
information to. I'd like to point out that as per the

01:16:26.239 --> 01:16:30.109
topics addressed in the memo, we we put a target date

01:16:30.119 --> 01:16:33.470
to have answers back on a potential project by June

01:16:33.470 --> 01:16:40.750
15 and that that was baked in in order to allow staff

01:16:40.760 --> 01:16:43.600
I do not want to overwhelm staff with all these side

01:16:43.600 --> 01:16:47.260
projects this and I'll say this for thomas's and Connie's

01:16:47.260 --> 01:16:50.920
benefit is really for our benefit, meaning our offices

01:16:50.920 --> 01:16:54.020
benefit, we just need help. We do not expect staff

01:16:54.029 --> 01:16:58.060
to solve for this. Uh this is a greater march toward

01:16:58.060 --> 01:17:01.300
an ultimate destination. That could be a component

01:17:01.310 --> 01:17:03.859
towards this redesigned discussion that we're talking

01:17:03.859 --> 01:17:09.029
about that will converge in the fall and in the next

01:17:09.029 --> 01:17:13.850
winter. So um I think the questions speak for themselves

01:17:13.859 --> 01:17:18.500
I'd welcome and I do welcome staff input in other questions

01:17:18.500 --> 01:17:20.840
if they want to dedicate the time and are interested

01:17:21.430 --> 01:17:25.510
Um but in terms of, we opened up Pandora's box here

01:17:25.510 --> 01:17:28.189
this is not just for the T dus, the Iot dus or

01:17:28.189 --> 01:17:32.350
the noise, uh it's for the greater market to have input

01:17:32.930 --> 01:17:36.319
and and this is a dynamic and evolving area of the

01:17:36.319 --> 01:17:41.630
energy industry that as the memo alludes to is growing

01:17:41.630 --> 01:17:45.069
leaps and bounds by the day and has only accelerated

01:17:45.079 --> 01:17:48.579
after winter storm Uri because everybody is looking

01:17:48.579 --> 01:17:50.729
at trying to have some type of backup power source

01:17:50.729 --> 01:17:55.550
on their house. Um so like I said, I'd keep it high

01:17:55.550 --> 01:17:58.039
level but would welcome any thoughts but look forward

01:17:58.039 --> 01:18:00.380
to introducing these questions to the market and their

01:18:00.380 --> 01:18:01.579
associated responses,

01:18:03.720 --> 01:18:05.750
we'll put any, I think you

01:18:07.720 --> 01:18:10.350
hit on the key topics. It's important that I know,

01:18:11.319 --> 01:18:14.520
as you said that top of your remarks at the end of

01:18:14.520 --> 01:18:18.460
the day, this is all about enhancing reliability and

01:18:18.460 --> 01:18:22.630
have you and you have said consistently from the beginning

01:18:22.630 --> 01:18:27.329
of this endeavor. Command and control to ensure reliability

01:18:28.020 --> 01:18:28.970
is paramount.

01:18:31.890 --> 01:18:34.800
That is continues to be consistent through throughout

01:18:34.810 --> 01:18:38.119
what I see in your memo here. So I want to highlight

01:18:38.119 --> 01:18:41.689
that for all of our stakeholders and I commend you

01:18:41.689 --> 01:18:44.359
for your consistency. There's a lot of technology and

01:18:44.359 --> 01:18:46.750
resources out there, but at the end of the day, as

01:18:46.750 --> 01:18:49.689
you said many times we need to have the right level

01:18:49.689 --> 01:18:52.189
of command and control to ensure those resources can

01:18:52.189 --> 01:18:56.529
be utilized for reliability. I would also say that

01:18:56.539 --> 01:19:00.350
this this issue and topic as I alluded to during the

01:19:00.350 --> 01:19:04.390
last open meeting is not dissimilar to the pursuit

01:19:04.399 --> 01:19:07.439
that Commissioner Gladfelter he is pursuing in terms

01:19:07.439 --> 01:19:11.439
of distribution level versus transmission level, uh

01:19:12.619 --> 01:19:16.670
power deployment and interconnection policy. So again

01:19:16.680 --> 01:19:20.880
if staff chooses to fold our questions in with that

01:19:20.890 --> 01:19:24.380
docket once produced, I'm okay with that too. However

01:19:24.390 --> 01:19:26.960
best to move forward so that it limits the amount of

01:19:26.960 --> 01:19:31.869
staff work happy to cooperate. I just need something

01:19:31.869 --> 01:19:34.850
to house the responses from the market participants

01:19:36.420 --> 01:19:40.079
Thank you. Our rules and projects group I believe has

01:19:40.090 --> 01:19:44.840
identified an appropriate project number for that and

01:19:44.840 --> 01:19:49.960
will be making a filing to that effect, recapping your

01:19:49.960 --> 01:19:53.439
questions and laying out a schedule. Did you wish to

01:19:53.439 --> 01:19:57.699
have entertain reply comments or just the one round

01:19:57.699 --> 01:19:59.880
of comments? Just the one round of comments right now

01:19:59.890 --> 01:20:03.920
so that so that we can start formulating our our strategy

01:20:03.930 --> 01:20:07.140
moving forward into the fall will do thank you, thank

01:20:07.140 --> 01:20:10.800
you, I'm in total agreement with with the memo, the

01:20:10.810 --> 01:20:16.260
process folded in, I think we're searching for places

01:20:16.560 --> 01:20:21.380
to have these issues discussed in an expeditious way

01:20:21.380 --> 01:20:24.220
We don't want a strange staff where we I have two strange

01:20:24.220 --> 01:20:26.770
staff that these are important questions and and I

01:20:26.770 --> 01:20:30.399
believe we ought to we've got to get on with it. So

01:20:30.590 --> 01:20:36.350
the most expeditious way we can healthy town, thank

01:20:36.350 --> 01:20:37.939
you for your leadership, Commissioner Mcadams on these

01:20:37.939 --> 01:20:40.510
issues, these are great questions and I like your focus

01:20:40.520 --> 01:20:45.699
on both inside and outside of work, yep, great staff

01:20:45.699 --> 01:20:49.180
will move forward as outlined in the memo, appreciate

01:20:49.180 --> 01:20:50.960
you continue to push forward on this.

01:20:52.710 --> 01:20:55.659
All right, that brings us to Lori's Magness

01:20:57.970 --> 01:21:03.979
for sure. So I stated in my memo on March eight Commission

01:21:03.979 --> 01:21:06.369
staff issued out a request for written comments from

01:21:06.369 --> 01:21:09.289
stakeholders on um policy questions that need to be

01:21:09.289 --> 01:21:12.470
addressed by the commission, so that ERCOT can develop

01:21:12.479 --> 01:21:16.340
their RFP, Um that they intend to issue out on August

01:21:16.340 --> 01:21:20.600
one and so um in an effort to make sure that are

01:21:20.600 --> 01:21:24.270
caught um has the guidance that they need to develop

01:21:24.270 --> 01:21:29.600
the RFP. Um my memo lays out um my thought process

01:21:29.600 --> 01:21:33.189
and where we should land on those questions and so

01:21:33.199 --> 01:21:36.630
um you know, we wanna be able to give this policy guidance

01:21:36.630 --> 01:21:39.189
to ensure that ERCOT can issue out that R. P in august

01:21:39.189 --> 01:21:41.649
1st we can get this product in, in by this next winter

01:21:41.659 --> 01:21:46.199
So ah with respect to and I could just go question

01:21:46.199 --> 01:21:50.909
by question if that works that works before you do

01:21:50.909 --> 01:21:55.100
that. That's Cindy for any of the market team who would

01:21:55.100 --> 01:21:58.000
like to come up? That'd be helpful.

01:21:59.609 --> 01:21:59.930
Yeah,

01:22:01.670 --> 01:22:06.609
the mm is here ah there she is. If you if you're

01:22:06.609 --> 01:22:07.819
willing carrie come on up

01:22:10.199 --> 01:22:13.670
both be very helpful folks to have as we work through

01:22:13.670 --> 01:22:17.850
these issues. Great. Um, so I reorganized the questions

01:22:17.850 --> 01:22:20.479
in a way that would allow us to just kind of flow

01:22:20.479 --> 01:22:23.050
through I think one of the, one of with respect to

01:22:23.050 --> 01:22:26.810
eligible resources, making a decision on what resources

01:22:26.810 --> 01:22:31.119
would be um eligible to qualify for the first RFP is

01:22:31.250 --> 01:22:35.920
um, you know, front and focused um before us. And so

01:22:36.300 --> 01:22:41.029
my recommendation is to um issue out the first RFP

01:22:41.039 --> 01:22:44.659
for eligible resources that include uh don't feel capable

01:22:44.670 --> 01:22:47.220
Generation resources with on site alternative fuel

01:22:47.220 --> 01:22:49.789
storage and generation resources that own and control

01:22:49.789 --> 01:22:53.739
the pipeline to a storage facility. Uh, I am open and

01:22:53.739 --> 01:22:57.359
subsequent RPS to include fuel supply arrangements

01:22:57.359 --> 01:22:59.670
consisting of outside storage with firm transportation

01:22:59.670 --> 01:23:03.949
contracts. Um, if we have the appropriate regulatory

01:23:03.960 --> 01:23:07.819
framework assurances and safeguards in place. Um and

01:23:07.819 --> 01:23:11.500
also to give market an opportunity to appropriately

01:23:11.500 --> 01:23:15.750
survey the generation resources to identify the size

01:23:15.760 --> 01:23:18.310
the megawatts of of, of those arrangements that are

01:23:18.310 --> 01:23:20.199
out there in the location. I think the location is

01:23:20.199 --> 01:23:24.720
important as well with respect to the configuration

01:23:24.720 --> 01:23:27.770
of those supply arrangements so that that's where I

01:23:27.770 --> 01:23:30.100
land on on this issue.

01:23:31.899 --> 01:23:35.550
Uh, you mentioned location and geography as being important

01:23:35.560 --> 01:23:41.060
It's important to note that by the second cycle you've

01:23:41.060 --> 01:23:44.270
identified that broader resource mix and the second

01:23:44.270 --> 01:23:47.600
cycle, the critical infrastructure match will be completed

01:23:47.609 --> 01:23:51.029
providing vastly more information than currently available

01:23:52.500 --> 01:23:55.859
and visibility into the natural gas ecosystem. Exactly

01:23:55.859 --> 01:23:58.039
And some of the feedback that I received from market

01:23:58.050 --> 01:24:01.409
is that they feel that they would need additional time

01:24:01.420 --> 01:24:05.460
to fold the supply arrangements into the um, into the

01:24:05.460 --> 01:24:08.729
product. So if we did that now, um, they wouldn't be

01:24:08.729 --> 01:24:10.729
able to get the product implemented by this next winter

01:24:10.739 --> 01:24:13.439
because they need more time to work with the pipeline

01:24:13.439 --> 01:24:16.359
companies and the gas, The gas pipeline companies and

01:24:16.359 --> 01:24:20.069
the generators on some contractual matters and also

01:24:20.069 --> 01:24:22.479
to allow time for the critical map to be in place by

01:24:22.479 --> 01:24:25.680
September one that will trigger, um other regulatory

01:24:25.680 --> 01:24:28.399
requirements with respect to weatherization and of

01:24:28.399 --> 01:24:31.430
course more visibility as you as you mentioned. So

01:24:31.430 --> 01:24:36.579
I think just letting those important um, um, factors

01:24:36.590 --> 01:24:40.409
come to fruition would be important um, before we fold

01:24:40.409 --> 01:24:45.289
in these um, you know, valuable resources. All right

01:24:45.289 --> 01:24:51.550
thank you thoughts, comments so high level um, I believe

01:24:51.560 --> 01:24:53.699
what you have expressed in the memo and I very much

01:24:53.699 --> 01:24:57.899
appreciate you setting the table with um is a phased

01:24:57.909 --> 01:25:03.699
approach to the firm fuel product. Product and in process

01:25:04.189 --> 01:25:09.680
and um I concur with you on the type of the qualification

01:25:09.689 --> 01:25:13.569
in phase one which is this near term approach to satisfy

01:25:13.569 --> 01:25:20.880
the requirements of SP three? Um I believe it it will

01:25:20.890 --> 01:25:25.550
give us access to a significant pool of resources that

01:25:25.550 --> 01:25:27.920
can be narrowed and I think that goes to what we may

01:25:27.920 --> 01:25:31.850
discuss with Kerry in terms of options on how ultimately

01:25:31.859 --> 01:25:34.909
uh the following questions are addressed, the budget

01:25:35.390 --> 01:25:41.500
aspects of it. So um no, I'm an agreement. I initially

01:25:41.500 --> 01:25:43.619
came in in terms of the

01:25:45.189 --> 01:25:49.890
contract terms, make sure you're not jumping you here

01:25:49.899 --> 01:25:52.630
on your topic on eligible resources, you're in agreement

01:25:52.630 --> 01:25:56.420
on phase one of the first cycle First RFP and I'm willing

01:25:56.420 --> 01:25:59.659
to talk about but I want to follow your lead. MR Chairman

01:25:59.659 --> 01:26:02.739
and leadership if you agree on a phased approach in

01:26:02.739 --> 01:26:05.880
terms of the concept of operation for the commission

01:26:05.899 --> 01:26:10.510
on that next step. Um if if we have an evaluation of

01:26:10.520 --> 01:26:14.109
other resources to expand that pool because I'm certainly

01:26:14.109 --> 01:26:19.109
sure in terms yes, I think right now let's let's let's

01:26:19.109 --> 01:26:21.279
let's focus well, I was gonna say let's focus on the

01:26:21.279 --> 01:26:26.649
literary sources but both phases. So in my concept

01:26:26.649 --> 01:26:31.350
I I concur with Commissioner Cobos for on site backup

01:26:31.350 --> 01:26:34.989
fuel um those generation entities that own their own

01:26:35.000 --> 01:26:40.960
transportation and storage and uh dual fuel capabilities

01:26:40.970 --> 01:26:45.119
that that qualifies uh in Phase one, Phase two, um

01:26:45.130 --> 01:26:48.210
I am interested in a evaluate continued evaluation

01:26:48.210 --> 01:26:50.520
on the part of the commission. Again, this process

01:26:50.529 --> 01:26:55.430
should go on um on firm transportation, what firm means

01:26:55.430 --> 01:26:59.640
on a contractual basis uh and firm storage for natural

01:26:59.640 --> 01:27:02.890
gas supplies. Um I think that will expand the pool

01:27:02.890 --> 01:27:07.310
of eligible uh resources exponentially and thus provide

01:27:07.319 --> 01:27:10.100
downward pressure in terms of the competitive forces

01:27:10.100 --> 01:27:12.819
which had improved the bang for the buck for consumers

01:27:12.829 --> 01:27:14.810
increased reliability and lowered costs. That's right

01:27:15.380 --> 01:27:22.050
Um right now, but I think we should That that should

01:27:22.050 --> 01:27:25.739
take place with a target for the winter of 2024 um

01:27:25.750 --> 01:27:29.329
in terms of final implementation, which kind of gets

01:27:29.329 --> 01:27:33.829
into the rest of your memo. I do want to say that

01:27:33.840 --> 01:27:36.579
we have an interest in terms of the Phase two expansion

01:27:36.579 --> 01:27:39.649
of resources. We can, this can only be accomplished

01:27:39.659 --> 01:27:42.840
if we can develop regulatory assurances and safeguards

01:27:42.850 --> 01:27:47.350
uh to our satisfaction that we know uh ensures accountability

01:27:47.350 --> 01:27:50.859
within the fleet and the gas supply chain. In my view

01:27:50.869 --> 01:27:53.930
those are adam man time principles that we need to

01:27:53.930 --> 01:27:57.859
adhere to as we continue this process into next spring

01:27:57.869 --> 01:27:59.500
and potentially expand that pool.

01:28:01.369 --> 01:28:05.939
It took me so work expeditiously on figuring out firm

01:28:05.939 --> 01:28:08.859
transport outside storage. I believe negotiations with

01:28:08.859 --> 01:28:12.319
our between our generators and their gas suppliers

01:28:12.510 --> 01:28:17.569
and what assurances, contractual safeguards. Accounting

01:28:17.569 --> 01:28:22.289
mechanisms will be essential to our evaluation. Okay

01:28:22.970 --> 01:28:26.189
thanks for find that out. Mr Garfield.

01:28:27.869 --> 01:28:31.569
Um, I struggle with with some of these nuances here

01:28:31.569 --> 01:28:35.260
because I'm not an expert in the gas space, expert

01:28:35.260 --> 01:28:42.619
in pipelines. And I just um uh let me tell you, let

01:28:42.619 --> 01:28:44.449
me kind of walk through where I land and then I'll

01:28:44.449 --> 01:28:49.579
tell you what I'm hopeful that we can do. Um So I

01:28:49.590 --> 01:28:55.390
believe cole um uh, coal piles um provides firm fuel

01:28:56.149 --> 01:29:00.630
they're on site. Um many of the coal plants do not

01:29:00.640 --> 01:29:04.319
run that often and we don't want to play pay repay

01:29:04.319 --> 01:29:08.460
for fuel supply that's already there, but I would be

01:29:08.460 --> 01:29:11.869
interested in in looking in perhaps a second phase

01:29:11.880 --> 01:29:17.029
if cole additional coal stocks beyond what is normally

01:29:17.029 --> 01:29:21.779
contracted for during winter months or times of need

01:29:23.470 --> 01:29:26.489
would be considered. Um Again, I don't want to pay

01:29:26.489 --> 01:29:28.600
for what's sitting there for them to participate in

01:29:28.600 --> 01:29:30.789
the market. We're trying to get something beyond that

01:29:31.270 --> 01:29:35.500
but I have a hard time grasping that coal is not a

01:29:35.869 --> 01:29:38.960
a firm fuel resource because I can see it. I think

01:29:38.960 --> 01:29:47.020
it's very firm. And the uh the arrangements for storage

01:29:47.029 --> 01:29:51.609
um for geological storage, underground storage for

01:29:51.609 --> 01:29:55.010
natural gas and pipeline capacity, um, I don't know

01:29:55.020 --> 01:29:59.989
how many generators own, um and control a pipeline

01:30:00.359 --> 01:30:03.090
They may control a slice of a pipeline or a slice of

01:30:03.090 --> 01:30:05.560
a storage facility. I don't I don't know that it would

01:30:05.569 --> 01:30:09.500
be interesting to see how that works where I struggle

01:30:09.510 --> 01:30:14.409
with this is um paying for something that we have no

01:30:14.420 --> 01:30:21.060
price transparency into and would argue that we as

01:30:21.060 --> 01:30:26.350
we look into these arrangements, um that we at least

01:30:26.350 --> 01:30:32.399
consider that um the transportation component of a

01:30:32.409 --> 01:30:36.979
of of the natural gas storage facility and the transportation

01:30:37.560 --> 01:30:39.750
be connected to an electronic bulletin board of some

01:30:39.750 --> 01:30:42.590
format. So there's price transparency so we can actually

01:30:42.590 --> 01:30:47.289
see the prices now. That creates a challenge here in

01:30:47.289 --> 01:30:51.390
texas. I understand with the intra and interstate um

01:30:51.399 --> 01:30:55.600
but what we need for our, so the way I see this

01:30:55.600 --> 01:30:58.760
is we, we work for the people of texas and we regulate

01:30:58.760 --> 01:31:02.350
the electric business um and for me to feel comfortable

01:31:02.350 --> 01:31:05.220
with how that those prices might go through in the

01:31:05.220 --> 01:31:08.310
electric space and on this product, I would have to

01:31:08.310 --> 01:31:11.300
see something that has some transparency on, are you

01:31:11.300 --> 01:31:15.390
talking about the offsite storage product or on demand

01:31:15.390 --> 01:31:19.159
gas really off? Really. Uh it would be both, but I

01:31:19.159 --> 01:31:23.539
think offsite storage and transportation kind of the

01:31:23.550 --> 01:31:26.699
way that Commissioner Cobos has laid this out in a

01:31:26.710 --> 01:31:31.159
Phase two or the second RFP, I think we need to get

01:31:31.159 --> 01:31:33.800
to something that's more transparent and something

01:31:33.800 --> 01:31:38.159
that we can um have some comfort level with that we

01:31:38.159 --> 01:31:42.840
know what the prices are. Um um so anyway, so to to

01:31:42.850 --> 01:31:47.359
uh to kind of backtrack and summarize, I'm okay with

01:31:47.369 --> 01:31:50.930
the dual fuel capable, on site storage Um in Phase

01:31:50.930 --> 01:31:53.060
one, I think we should have a one year contract. I

01:31:53.060 --> 01:31:56.500
think we ought to get on with it um, and be ready

01:31:56.510 --> 01:31:58.869
to be responsive to what the legislature wants right

01:31:58.869 --> 01:32:01.020
now. I do think there are other products that ought

01:32:01.020 --> 01:32:04.050
to be part of this that we need to get on with

01:32:04.050 --> 01:32:06.090
and consider that and we ought to do that on a phase

01:32:06.090 --> 01:32:06.779
two basis.

01:32:09.149 --> 01:32:12.359
Can I comment on a couple of um Commissioner Glad felt

01:32:12.359 --> 01:32:17.739
these points. So commissioner flt. Yes. So um my the

01:32:17.739 --> 01:32:21.979
purpose of my memo was too start with a framework to

01:32:21.979 --> 01:32:26.239
at least get the product launched right. Um I have

01:32:26.250 --> 01:32:28.760
personally been very focused on the crux of gas and

01:32:28.760 --> 01:32:31.750
electricity, right? Those those are those are issues

01:32:31.750 --> 01:32:35.979
that um, you know, surfaced during the winter storm

01:32:36.350 --> 01:32:39.640
that we need to add more resiliency during the winter

01:32:39.670 --> 01:32:42.649
And that's that's that's why I have been narrowly focused

01:32:42.649 --> 01:32:47.939
on gas with respect to cole um, you know, as we, as

01:32:47.939 --> 01:32:51.970
we sort of start looking at the second RFP and getting

01:32:51.970 --> 01:32:54.899
more information on on the fuel supply arrangements

01:32:54.899 --> 01:32:57.760
having ERCOT survey. Once they figure out what exactly

01:32:57.760 --> 01:33:01.689
they're going to survey for, um you know, I would be

01:33:01.689 --> 01:33:03.850
open to getting more information and and letting some

01:33:03.850 --> 01:33:05.909
factors play out and and here are the factors I want

01:33:05.909 --> 01:33:09.140
to sort of lay out. I've been reading that coal prices

01:33:09.140 --> 01:33:13.729
are going up right. Um I've also been reading that

01:33:13.739 --> 01:33:16.789
the E. P. A. Is coming out with regulations that impact

01:33:16.789 --> 01:33:20.670
whole cross state air pollution. Exactly. So how do

01:33:20.670 --> 01:33:24.260
these factors interplay with coal plants? Are we going

01:33:24.260 --> 01:33:28.409
to see more retirements? Um, it's gonna be costlier

01:33:28.409 --> 01:33:31.979
to stockpile as it is going to be costlier to to stockpile

01:33:31.979 --> 01:33:37.050
gas. Um, it's going to be a costly resource to stockpile

01:33:37.050 --> 01:33:41.430
as well. But as E. P. A. Regulations unfold and coal

01:33:41.430 --> 01:33:45.220
plants may get impacted. What are we ultimately going

01:33:45.220 --> 01:33:47.869
to have to pay for? We're going to have to pay for

01:33:48.350 --> 01:33:50.699
pile of coal or are we going to be being asked to

01:33:50.699 --> 01:33:54.819
pay for a scrubber? I think it's important if we're

01:33:54.819 --> 01:33:58.989
going to be consistent as we have in the past with

01:33:58.989 --> 01:34:04.199
the technology agnostic approach, it's a question of

01:34:04.199 --> 01:34:08.079
eligibility and I think it's it's It's worthwhile to

01:34:08.079 --> 01:34:11.720
include consideration of coal for Phase two or the

01:34:11.720 --> 01:34:16.560
second cycle of RFP second RFP as long as we make sure

01:34:16.569 --> 01:34:19.390
they compete on a level playing field with all other

01:34:19.390 --> 01:34:25.239
resources. And so the marketplace can, can evaluate

01:34:25.460 --> 01:34:29.539
as long as we set the performance standard, the marketplace

01:34:30.739 --> 01:34:35.359
will solve for the most cost effective product that

01:34:35.359 --> 01:34:40.199
meets that reliability standard. And if we do end up

01:34:40.199 --> 01:34:42.819
including coal, like we want to make sure that in the

01:34:42.819 --> 01:34:45.260
next cycle in the next cycle is gas prices and coal

01:34:45.260 --> 01:34:49.159
prices fluctuate and cost of E. P. A compliance potentially

01:34:49.159 --> 01:34:52.659
changes. We don't have to redesign the RFP each time

01:34:54.140 --> 01:34:56.829
we have, we have a performance standard of reliability

01:34:56.829 --> 01:34:59.630
standards must be met and whatever the most appropriate

01:34:59.630 --> 01:35:08.270
technology available at that point can compete. Yes

01:35:08.270 --> 01:35:11.079
So I'm okay. So I don't disagree with your points.

01:35:11.079 --> 01:35:13.859
What I guess what I'm trying to say is we need some

01:35:13.859 --> 01:35:16.369
of these factors. I'm not opposed to getting more information

01:35:16.739 --> 01:35:18.810
and we've got to develop, you know, the questions that

01:35:18.810 --> 01:35:21.619
are appropriate to ask the resource owners so that

01:35:21.619 --> 01:35:24.149
we're able to get information that would be valuable

01:35:24.149 --> 01:35:26.479
to us to assess, you know, what are we talking about

01:35:26.479 --> 01:35:30.840
How many days would we consider as additional um, piles

01:35:30.850 --> 01:35:35.270
to be considered firm. Um, what are the impacts of

01:35:35.279 --> 01:35:37.619
the environmental regulations and what are we actually

01:35:37.619 --> 01:35:40.770
going to be asked to pay for? Right because the consumers

01:35:40.770 --> 01:35:43.159
are going to have to pay for these costs and I just

01:35:43.159 --> 01:35:45.970
want to make sure that we're just not opening a Pandora's

01:35:45.970 --> 01:35:51.699
box of costs with respect to, you know, the product

01:35:51.699 --> 01:35:54.680
itself, but also to certain resources that may have

01:35:54.689 --> 01:35:57.340
different challenges in the future that are gonna be

01:35:57.350 --> 01:36:00.329
costly to bake into this product. That's my only point

01:36:00.369 --> 01:36:02.770
and and and look it kind of gets into these following

01:36:02.770 --> 01:36:06.590
points and considerations. Mr Chairman, that gets into

01:36:06.590 --> 01:36:10.189
whatever whatever the target but ends up becoming the

01:36:10.199 --> 01:36:14.279
megawatt budget that we as a commission want to settle

01:36:14.279 --> 01:36:17.859
on in terms of procuring on, on a seasonal basis and

01:36:17.859 --> 01:36:22.449
how we we end up there. Um, if cole is introduced,

01:36:22.460 --> 01:36:26.430
what effect that has on even allowing the gas to recuperate

01:36:26.439 --> 01:36:30.010
their dual fuel costs or whether it's even economic

01:36:30.010 --> 01:36:32.289
for them because again, if you don't have the metrics

01:36:32.300 --> 01:36:36.750
level ized, you know, and how, how there, well, I mean

01:36:37.380 --> 01:36:39.779
sure we were always gonna keep costs low, but this

01:36:39.779 --> 01:36:43.579
commission, this agency, ERCOT no, no bureaucracy or

01:36:43.579 --> 01:36:45.489
administrative agency is going to be able to keep up

01:36:45.489 --> 01:36:49.239
with coal and gas prices right? We gotta, we gotta

01:36:49.239 --> 01:36:53.050
set the, we set the performance standard, reliability

01:36:53.050 --> 01:36:57.340
standard or eligibility standard, reliability standard

01:36:57.930 --> 01:37:00.890
and let them let the market figure out what rises to

01:37:00.890 --> 01:37:03.890
the top of that moment in time. I'm sure, You know

01:37:03.890 --> 01:37:08.170
gas is $30 in London right now And $30 gas cole looks

01:37:08.170 --> 01:37:11.140
pretty good, but that goes the other way,

01:37:12.930 --> 01:37:17.170
yep, so I think what I'm hearing is everybody's interested

01:37:17.170 --> 01:37:20.260
in getting more information on coal for the second

01:37:20.260 --> 01:37:21.699
RFP. All right,

01:37:23.329 --> 01:37:27.390
make a note of that that worked on the, I agree with

01:37:27.399 --> 01:37:32.250
you on the eligibility, I agree with your 1st, 1st

01:37:32.250 --> 01:37:34.310
RFP layout, I think that makes sense. I think we're

01:37:34.310 --> 01:37:40.550
all on board with that. Um, as for the second RFP um

01:37:41.229 --> 01:37:44.010
broadly agree with what he wrote in his memo, but I

01:37:44.010 --> 01:37:48.600
would emphasize the need to move aggressively to include

01:37:48.609 --> 01:37:54.319
offsite storage and combined with firm transport with

01:37:54.329 --> 01:37:58.779
the important distinction that, and I've very much

01:37:58.789 --> 01:38:03.960
here, your point on transparency and in any marketplace

01:38:05.020 --> 01:38:08.180
one of the key differences of offsite storage that

01:38:08.180 --> 01:38:11.090
I think is important and gives me a greater degree

01:38:11.090 --> 01:38:16.350
of comfort moving forward quickly is that as part as

01:38:16.350 --> 01:38:20.430
part of offsite storage and also storage requirements

01:38:21.020 --> 01:38:24.649
the generator would have to own title to those molecules

01:38:25.119 --> 01:38:28.439
and we? Re required to able to point to those physical

01:38:28.439 --> 01:38:31.720
molecules, it's not dependent on a supply chain, it's

01:38:31.720 --> 01:38:37.350
not dependent on the many complexities of our broader

01:38:38.140 --> 01:38:41.630
ecosystem, it's not subject to price risk. The price

01:38:41.630 --> 01:38:45.930
risk was already incurred at some other point, the

01:38:45.930 --> 01:38:49.500
generator's got titled to those molecules and they've

01:38:49.500 --> 01:38:53.529
got the equivalent of title to capacity to move them

01:38:53.539 --> 01:38:56.359
to their generator. The critical infrastructure map

01:38:56.359 --> 01:38:59.979
will, will go a long way to giving us comfort and they're

01:38:59.979 --> 01:39:02.640
merely renting renting space in the storage cabinet

01:39:03.220 --> 01:39:06.460
the renting space, but they've got, they've got it

01:39:06.649 --> 01:39:10.119
and importantly, it's also under pressure. So once

01:39:10.119 --> 01:39:15.430
it's, once it's um put in the ground, it takes a lot

01:39:15.430 --> 01:39:19.029
less energy to get it back out of the ground right

01:39:20.020 --> 01:39:22.760
to to the generator, which is, which is just another

01:39:22.770 --> 01:39:29.199
operational benefit or redundancy. So, and there there's

01:39:29.199 --> 01:39:34.720
a, with any contract, there's a myriad of okay of permutations

01:39:34.720 --> 01:39:40.069
and combinations but importantly, I think with discrete

01:39:40.069 --> 01:39:44.539
pipelines from one specific location of storage too

01:39:45.220 --> 01:39:49.850
one specific location of a generator, we can very,

01:39:50.319 --> 01:39:54.250
very easily with it not easily perhaps, but it's very

01:39:54.250 --> 01:39:56.390
reasonable to expect that working with our cars, our

01:39:56.390 --> 01:40:01.720
generators and many of them pipeline companies that

01:40:02.909 --> 01:40:05.939
we've heard from. I think we can get by

01:40:07.510 --> 01:40:11.859
by the second RFP, we can get comfortable with Having

01:40:11.859 --> 01:40:14.340
to generate our own title two molecules and underground

01:40:14.340 --> 01:40:19.979
storage, owning senior transportation rights, not subordinated

01:40:19.979 --> 01:40:23.750
anyway. Senior transportation rights of a capacity

01:40:23.850 --> 01:40:26.630
and a rate that matches what that generator will need

01:40:27.510 --> 01:40:31.909
because it's, we know the specific unit and so it's

01:40:31.909 --> 01:40:34.710
much easier to quantify all these things. We're not

01:40:34.710 --> 01:40:37.300
depending on routing of pipelines, were not depending

01:40:37.300 --> 01:40:40.699
on price at that moment in time. So I think that's

01:40:40.699 --> 01:40:45.939
a very solvable problem and by doing so by incorporating

01:40:46.909 --> 01:40:50.829
offside gas storage plus combined with firm transport

01:40:51.210 --> 01:40:54.350
we can, as you said, exponentially expand the amount

01:40:54.350 --> 01:40:57.970
of firm fuel available to our generation fleet, thus

01:40:57.970 --> 01:41:02.130
increasing reliability exponentially, while also making

01:41:02.140 --> 01:41:06.800
that, this, the market for this firm fuel product much

01:41:06.800 --> 01:41:11.600
more competitive and thus more cost efficient for our

01:41:11.609 --> 01:41:14.529
consumers and our ratepayers. And I'll,

01:41:16.210 --> 01:41:18.850
I'll finish this segment of my comments by saying,

01:41:18.850 --> 01:41:21.329
I also think it's very important for this commission

01:41:22.109 --> 01:41:26.760
to signal now that we are committed to figuring out

01:41:26.770 --> 01:41:29.250
a way to implement offsite storage combined with from

01:41:29.250 --> 01:41:34.520
transport for the second RFP, so that our generators

01:41:35.710 --> 01:41:39.260
no, that can run the analysis and make the business

01:41:39.260 --> 01:41:42.380
decision of whether they should be investing in underground

01:41:42.380 --> 01:41:46.479
storage and from transport contracts or building dual

01:41:46.479 --> 01:41:48.500
fuel tanks in the back lines.

01:41:51.909 --> 01:41:53.850
That's a business decision that will depend on each

01:41:53.850 --> 01:41:56.390
generators assets, their location and a variety of

01:41:56.390 --> 01:42:00.569
other things, but it's important for us to let them

01:42:00.569 --> 01:42:04.710
know that we are, we don't know the specifics, but

01:42:04.710 --> 01:42:08.060
we are intent and committed to expanding this product

01:42:08.060 --> 01:42:12.270
to offsite storage combined with firm transport and

01:42:12.270 --> 01:42:15.109
also letting and signaling the pipeline companies,

01:42:15.800 --> 01:42:19.430
uh, which unlike shippers, marketers and other players

01:42:19.430 --> 01:42:22.149
in the national gas space, the pipelines themselves

01:42:22.149 --> 01:42:25.590
are directly regulated by the Railroad Commission who

01:42:25.590 --> 01:42:28.680
have been very helpful in working through and helping

01:42:28.680 --> 01:42:31.829
us understand these issues. The pipeline companies

01:42:31.829 --> 01:42:34.010
will also know that there's that new revenue stream

01:42:34.010 --> 01:42:36.119
out there. These generators have a real product or

01:42:36.119 --> 01:42:39.060
we'll have a real product, uh, and they can adjust

01:42:39.069 --> 01:42:41.369
their business models and their and their offerings

01:42:41.369 --> 01:42:45.449
their contract offerings to meet the requirements we

01:42:45.449 --> 01:42:50.960
set. And I think all of those things will help move

01:42:50.960 --> 01:42:56.619
us in the quickest way possible while still maintaining

01:42:57.100 --> 01:43:03.800
cost control and, and a legitimate reliability standard

01:43:04.409 --> 01:43:06.680
to where the legislature wanted us to get where we

01:43:06.680 --> 01:43:09.329
have a robust amount of firm fuel

01:43:11.000 --> 01:43:15.619
during our winter seasons. No, thank you for your perspective

01:43:15.619 --> 01:43:18.859
chairman, I think you've raised a lot of very important

01:43:18.859 --> 01:43:23.829
points. I will say that, um, you know, part of our

01:43:24.699 --> 01:43:27.250
part of what we need here is a commitment from the

01:43:27.250 --> 01:43:30.109
generation companies and the gas pipeline companies

01:43:30.109 --> 01:43:32.489
that they will also commit to working with us to be

01:43:32.489 --> 01:43:35.470
able to come up with this regulatory framework um,

01:43:35.479 --> 01:43:37.899
that we're asking for and obviously some of it's going

01:43:37.899 --> 01:43:40.029
to be done by legislative direction with the critical

01:43:40.029 --> 01:43:43.579
map, but as I explained earlier, you know, um, you

01:43:43.579 --> 01:43:46.350
know, for for ERCOT to be able to analyze and and feel

01:43:46.350 --> 01:43:48.909
comfortable with the supply arrangements. Um, they

01:43:48.909 --> 01:43:51.630
want to see contract language in the contracts and

01:43:51.630 --> 01:43:54.840
so while I want to say, I want to move forward aggressively

01:43:54.840 --> 01:43:57.939
and I want to, you know, while I understand your desire

01:43:57.939 --> 01:44:00.739
to move forward aggressively and to get them into the

01:44:00.739 --> 01:44:04.479
second RFP, that would be my desire to, but we need

01:44:04.479 --> 01:44:07.649
to see, you know, then meet us at the table to to

01:44:07.659 --> 01:44:12.619
be able to, you know, get the information we need,

01:44:12.630 --> 01:44:15.930
owning the molecules, molecules is one thing, but having

01:44:15.930 --> 01:44:19.229
the comfort in the contracts is another. And also,

01:44:19.239 --> 01:44:22.510
um, you know, you noted that, um, you know, for them

01:44:22.510 --> 01:44:24.619
to be able to enter into these arrangements, well,

01:44:24.619 --> 01:44:27.520
they've been entering into these arrangements. Um,

01:44:27.989 --> 01:44:30.380
my understanding for for a while now, right, I mean

01:44:30.380 --> 01:44:32.979
we've had these these configurations in place for a

01:44:32.979 --> 01:44:36.670
while. Um, the whole, what we're trying to do here

01:44:36.680 --> 01:44:40.409
is encourage um, maybe some other types of arrangements

01:44:40.409 --> 01:44:42.420
that are more resilient to be part of this product

01:44:42.989 --> 01:44:46.109
Um, but um, I don't disagree. We want to try to get

01:44:46.109 --> 01:44:49.750
them into the second RFP, but that is from my perspective

01:44:49.760 --> 01:44:53.340
very much contingent on us having the regulatory framework

01:44:53.340 --> 01:44:59.010
that we need um in place by way of the, the contract

01:44:59.010 --> 01:45:01.899
language that ERCOT has been um, I guess working with

01:45:01.899 --> 01:45:05.340
the gas pipeline and generators with the map in place

01:45:05.350 --> 01:45:08.569
Um, I know that um, some of the stakeholders provided

01:45:08.569 --> 01:45:13.329
some regulatory um, uh, framework recommendations like

01:45:13.340 --> 01:45:16.689
affidavits and that, but we're gonna need to have affidavits

01:45:16.699 --> 01:45:18.289
we're gonna need them from the generation companies

01:45:18.289 --> 01:45:20.260
and we're gonna, even though we don't have regulatory

01:45:20.260 --> 01:45:21.979
oversight over the gas pipeline companies, I think

01:45:21.989 --> 01:45:25.100
we need one from them, we can put conditions on access

01:45:25.100 --> 01:45:27.189
to the revenues we put in the market and

01:45:28.989 --> 01:45:32.949
I appreciate all of the concerns and considerations

01:45:32.949 --> 01:45:35.260
you laid out and I'd say, let's let's get started on

01:45:35.260 --> 01:45:38.199
solving that problem. My ask today would be too, as

01:45:38.199 --> 01:45:41.119
we give ERCOT direction to start

01:45:42.890 --> 01:45:47.010
putting a finer point on the first RFP that this commission

01:45:47.010 --> 01:45:52.210
asked or direct ERCOT to immediately and

01:45:53.939 --> 01:45:58.789
in a very concentrated way, start working on the specific

01:45:58.789 --> 01:46:01.909
contract terms, the specific conditions affidavits

01:46:01.909 --> 01:46:03.199
whatever is needed.

01:46:04.779 --> 01:46:08.850
Two get comfortable to their comfort level with an

01:46:08.850 --> 01:46:11.899
offsite plus from transport product, transport product

01:46:12.279 --> 01:46:15.729
and also asked the generators in our, in our marketplace

01:46:15.739 --> 01:46:19.890
to work with ERCOT and our our pipeline companies and

01:46:19.890 --> 01:46:23.090
many of whom have participated in our comment periods

01:46:24.479 --> 01:46:29.470
to work in a very concentrated manner, I'll defer to

01:46:29.510 --> 01:46:33.210
ERCOT on if the best format is workshops or whatnot

01:46:33.859 --> 01:46:37.609
but to start working on this immediately, with the

01:46:37.609 --> 01:46:38.569
Express

01:46:40.220 --> 01:46:44.930
directed from us that in a matter of

01:46:46.779 --> 01:46:49.800
Sandy help Phil help me on the timeline here, but in

01:46:49.800 --> 01:46:53.119
a couple of months this summer they can come back and

01:46:53.119 --> 01:46:55.760
report to this commission on the progress made, the

01:46:55.760 --> 01:46:58.550
next steps needed. I think you laura you outlined a

01:46:58.560 --> 01:47:05.479
Q 1 23 as the target date for the second RFP so

01:47:05.479 --> 01:47:11.210
we can have updates along the way. Two adjust and iterate

01:47:11.420 --> 01:47:15.300
on what we think in conjunction with market the right

01:47:15.300 --> 01:47:19.939
standards for offsite plus firm transport are so we

01:47:19.939 --> 01:47:22.899
can do everything possible to address the challenges

01:47:22.899 --> 01:47:27.189
concerns you laid out and get this thing done sooner

01:47:27.189 --> 01:47:30.750
rather than later. Uh, and then I think in the unlikely

01:47:30.750 --> 01:47:34.510
case it proves to be truly an unsolvable problem. We

01:47:34.510 --> 01:47:37.029
can identify that and take it off the list sooner rather

01:47:37.029 --> 01:47:40.460
than later. I have every confidence that we can build

01:47:40.460 --> 01:47:44.329
this product, build it reliably hold the relevant parties

01:47:44.329 --> 01:47:44.899
accountable

01:47:46.479 --> 01:47:49.670
to ensure performance. Um, and so that's, that's what

01:47:49.670 --> 01:47:53.670
I I'd asked of this commission today so that our generators

01:47:53.680 --> 01:47:59.109
the pipeline companies and the broader investment community

01:47:59.109 --> 01:48:00.829
and most importantly, the people of texas know that

01:48:00.829 --> 01:48:03.430
we're working to continue to build out resiliency to

01:48:03.439 --> 01:48:09.840
build out the most reliable grid. We can, is that directive

01:48:09.840 --> 01:48:13.680
work for y'all. So to recap mr Chairman, we would affirm

01:48:13.680 --> 01:48:17.029
for market today that it is in the interest of the

01:48:17.039 --> 01:48:22.270
firm fuel product Um in a second phase 2024 approach

01:48:22.279 --> 01:48:26.989
that firm transport and firm storage be considered

01:48:27.000 --> 01:48:31.800
or Developed and a list of recommendations in terms

01:48:31.800 --> 01:48:35.829
of contractual and physical best practices, physical

01:48:35.829 --> 01:48:38.880
management, best practices be submitted to the commission

01:48:39.069 --> 01:48:42.689
in Q one of next year. Before consideration before

01:48:42.689 --> 01:48:45.970
that before this summer and I'd say not best practices

01:48:45.970 --> 01:48:51.170
standards. What Belt and suspenders, How do we, how

01:48:51.170 --> 01:48:54.380
do we make it? And you made another important distinction

01:48:54.380 --> 01:48:58.210
Let's develop this product. It's um, I want to avoid

01:48:58.220 --> 01:49:01.310
what I think Commissioner covers correctly identified

01:49:01.310 --> 01:49:03.890
in one of our earlier dockets of the danger of never

01:49:03.890 --> 01:49:04.689
ending studies.

01:49:07.069 --> 01:49:10.920
Everything you said except standards, not best practices

01:49:11.470 --> 01:49:14.909
and develop don't study doesn't mean we have to accept

01:49:14.909 --> 01:49:20.119
it and come back that we can work on a timeline but

01:49:20.119 --> 01:49:24.369
come back with updates between now and let's probably

01:49:24.369 --> 01:49:27.470
start summer aim for summer for the first update with

01:49:27.470 --> 01:49:30.850
the goal of having this product ready for deployment

01:49:30.850 --> 01:49:35.170
When we go to go out with a second RFP In Q

01:49:35.170 --> 01:49:36.000
123.

01:49:37.550 --> 01:49:41.590
I would reiterate that I'd like some discussion from

01:49:41.590 --> 01:49:45.850
market on their thoughts on how they would see price

01:49:45.850 --> 01:49:46.890
transparency

01:49:48.760 --> 01:49:51.689
on inter versus intra state pipelines and how that

01:49:51.689 --> 01:49:54.829
might affect the cost of this product and also the

01:49:54.829 --> 01:49:58.010
numbers of facilities that might comply with with,

01:49:58.020 --> 01:50:01.210
I want to be a part of this product. Um to me

01:50:01.220 --> 01:50:05.130
um price transparency is absolutely key on the transportation

01:50:05.130 --> 01:50:09.609
side of things and we need to assure that if we include

01:50:09.609 --> 01:50:12.319
that, my view, if we include them in this product,

01:50:12.329 --> 01:50:15.039
they have products that the public can have transparency

01:50:16.149 --> 01:50:21.859
That makes sense. So it sounds like a list of um contractual

01:50:21.859 --> 01:50:25.119
physical and regulatory standards that ERCOT would

01:50:25.119 --> 01:50:28.630
like to see. Um also I think it may not be the

01:50:28.630 --> 01:50:31.699
next update but as they continue to come in for updates

01:50:31.710 --> 01:50:35.479
is to have a ERCOT develop a list of questions when

01:50:35.479 --> 01:50:39.029
it's timely and appropriate of um that would help us

01:50:39.029 --> 01:50:42.560
gauge um get or get more information on these fuel

01:50:42.560 --> 01:50:45.779
supply arrangements kind of like how are cut surveyed

01:50:45.789 --> 01:50:48.289
the generation resource owners will do feel capable

01:50:48.289 --> 01:50:51.489
and alternative on site fuel um come up with the questions

01:50:51.489 --> 01:50:54.310
for our review um on appropriate questions that need

01:50:54.310 --> 01:50:57.050
to be asked so we can um start kind of getting an

01:50:57.050 --> 01:51:00.840
idea of the size, location and scope of these arrangements

01:51:00.840 --> 01:51:03.770
that are out there and I think in addition to that

01:51:03.779 --> 01:51:07.010
um come up with a list of questions with respect to

01:51:07.010 --> 01:51:10.579
kEL that can be the generation resources.

01:51:13.260 --> 01:51:14.369
Alright, did you get all that

01:51:16.359 --> 01:51:18.970
Good morning Commissioners Chairman? Yes, I think we'll

01:51:18.970 --> 01:51:23.779
follow as soon as we wrap up the first RFP and with

01:51:23.779 --> 01:51:25.600
some of the guidance we may get today we should be

01:51:25.600 --> 01:51:27.840
able to do that quickly and then we can put all of

01:51:27.840 --> 01:51:31.300
our focus on the second RFP and all the discussions

01:51:31.300 --> 01:51:33.479
and questions that you all have raised today.

01:51:35.060 --> 01:51:41.319
Okay, excellent thank you and as always welcome our

01:51:41.329 --> 01:51:44.380
stakeholders from both industries to continue to provide

01:51:45.159 --> 01:51:49.810
more information, more granular specific, either standards

01:51:49.819 --> 01:51:54.569
required of a university of transport contracts or

01:51:55.760 --> 01:51:56.380
templates,

01:51:57.960 --> 01:52:00.710
boilerplate forms contracts that can be included and

01:52:00.710 --> 01:52:01.170
considered

01:52:02.949 --> 01:52:08.520
Okay like ERCOT view um on one other thing if if you

01:52:08.520 --> 01:52:12.170
may um I don't know if there's any validity to doing

01:52:12.170 --> 01:52:17.600
this or not but Um I'd like your thoughts on should

01:52:17.600 --> 01:52:21.689
we do 50%? So the first year we're going to do 100%

01:52:21.689 --> 01:52:27.569
of what we need. Is there any reason I'm sorry, is

01:52:27.569 --> 01:52:31.180
there any reason to do these contracts like 50% for

01:52:31.180 --> 01:52:33.909
a two-year contract and the other 50% on a staggered

01:52:33.909 --> 01:52:37.600
year basis so that you're not procuring 100% at one

01:52:37.600 --> 01:52:41.069
years prices but you may have some fluctuation in those

01:52:41.069 --> 01:52:44.210
prices on a, on a multiyear basis. I don't know the

01:52:44.210 --> 01:52:48.149
answer. Can we save that question for the mm and when

01:52:48.149 --> 01:52:52.409
we get to quantity. Absolutely. Okay so I think we've

01:52:52.409 --> 01:52:55.270
covered eligible resources and the plan for the first

01:52:55.279 --> 01:53:00.390
RFP and um perspectively for the second so the next

01:53:00.390 --> 01:53:03.909
question is what sustained duration um should the product

01:53:03.920 --> 01:53:07.560
of the product should ERCOT procure? And my recommendation

01:53:07.560 --> 01:53:11.840
is a 48 hour sustained duration, requirement one so

01:53:11.840 --> 01:53:14.750
that we can capture the most resources that we can

01:53:14.750 --> 01:53:19.090
available I think the first bucket has A lot of resources

01:53:19.090 --> 01:53:21.399
that can provide up to 72 but that second bucket that

01:53:21.399 --> 01:53:25.039
we're trying to incent uh and the first bucket being

01:53:25.050 --> 01:53:27.989
the generation resource owners that have dual fuel

01:53:27.989 --> 01:53:32.199
capable and on site fuel, alternate fuel, existing

01:53:32.199 --> 01:53:35.989
infrastructure that's in place functional. Um the second

01:53:35.989 --> 01:53:38.880
bucket is what we're trying to send a signal to as

01:53:38.880 --> 01:53:43.890
well and the majority of that almost 48 hours. So I

01:53:43.890 --> 01:53:46.119
think it strikes a sweet spot and getting, you know

01:53:46.130 --> 01:53:49.050
not only the most available resources, sending a signal

01:53:49.050 --> 01:53:52.729
to those resources but also um mitigating consumer

01:53:52.729 --> 01:53:56.609
cost impacts by starting off 48 hours. That makes sense

01:53:56.609 --> 01:53:59.340
to me and 72 hours in this as you laid out in

01:53:59.340 --> 01:54:03.810
your second RFP provides more reliability, especially

01:54:03.829 --> 01:54:07.420
if we do, if we can get get their on off site

01:54:07.529 --> 01:54:09.170
storage plus transport

01:54:10.939 --> 01:54:15.319
72 hours is more reliability and if the costs downward

01:54:15.319 --> 01:54:19.279
cost pressures that you mentioned earlier come into

01:54:19.289 --> 01:54:22.739
play, like we anticipate that would be even more reliability

01:54:22.739 --> 01:54:24.909
and lower costs. So that, that very much makes sense

01:54:24.909 --> 01:54:25.210
to me.

01:54:27.350 --> 01:54:31.810
Alright, good on duration that yes and um with respect

01:54:31.810 --> 01:54:33.880
to the third question, what's the minimum sustained

01:54:33.880 --> 01:54:36.180
duration? Well, in my opinion, it's 48 hours because

01:54:36.189 --> 01:54:38.390
sp three says that the product should ensure that the

01:54:38.390 --> 01:54:41.930
performance for several days, so We'll comply with

01:54:41.930 --> 01:54:46.869
sp three with 48 hours. Okay, next question is what's

01:54:46.869 --> 01:54:50.909
the quantity of that ERCOT should procure and how should

01:54:50.909 --> 01:54:53.659
it be measured in terms of monetary budget of generation

01:54:53.659 --> 01:54:58.270
capacity over a specific duration um so you know, going

01:54:58.270 --> 01:55:01.050
back to ERCOT survey results, they provided us three

01:55:01.050 --> 01:55:04.510
buckets of of information um the first one being, as

01:55:04.510 --> 01:55:07.510
I explained existing infrastructure, do I feel capable

01:55:07.510 --> 01:55:11.810
of on site Alternative fuel storage and um they have

01:55:11.810 --> 01:55:15.029
about 441 megawatts in there But you got to remove

01:55:15.029 --> 01:55:18.369
the black start, so that's why I included 4000 um in

01:55:18.369 --> 01:55:21.770
that first tranche. The second bucket or tranches is

01:55:21.779 --> 01:55:25.029
the infrastructure that's there is some infrastructure

01:55:25.039 --> 01:55:27.659
but we don't know what condition it's in, it's about

01:55:27.659 --> 01:55:31.649
2900 at 48 hour duration. And then the third bucket

01:55:31.659 --> 01:55:35.970
is the are the power plants that have owned and controlled

01:55:35.970 --> 01:55:39.369
transmission pipeline to offsite to storage facility

01:55:39.409 --> 01:55:43.630
and um really what I was viewing there is 550 megawatts

01:55:43.630 --> 01:55:46.449
because um you know, the plants can't be all using

01:55:46.449 --> 01:55:48.350
the same storage facility at the same time at maximum

01:55:48.350 --> 01:55:51.079
output and that's how I got to 5 50. So as you

01:55:51.079 --> 01:55:55.710
look at um you know, a clear picture of what's valuable

01:55:56.640 --> 01:56:00.439
I came up with a range of 4000 to 5000 um to

01:56:00.439 --> 01:56:04.640
include in that uh in the first RFP I guess for a

01:56:04.640 --> 01:56:08.300
couple of reasons is, you know, we don't know if all

01:56:08.300 --> 01:56:11.210
of the first bucket is going to bid. We don't know

01:56:11.210 --> 01:56:13.600
what percentage of the middle bucket that has some

01:56:13.609 --> 01:56:16.770
infrastructure is going to be able to actually participate

01:56:16.770 --> 01:56:19.899
in the program And then the 5:50 I included in there

01:56:20.329 --> 01:56:25.439
But also so that um, one can also mitigate consumer

01:56:25.439 --> 01:56:29.649
cost impacts but also size it in a way where um, you

01:56:29.649 --> 01:56:33.649
know, we do create some competition with this first

01:56:34.229 --> 01:56:40.590
RFP um, ERCOT stated in their survey One generation

01:56:40.590 --> 01:56:43.560
resource owner owns 74% of the existing infrastructure

01:56:44.229 --> 01:56:50.590
So we want to create uh huh a size that will allow

01:56:50.600 --> 01:56:55.609
for some level of competition. So A range of 4,000

01:56:55.619 --> 01:56:58.020
5,000 5000 is kind of work. I put my steak and I'm

01:56:58.020 --> 01:56:59.149
open to discussion on that.

01:57:00.829 --> 01:57:02.930
All right, well, we'll start with, thank you for letting

01:57:02.930 --> 01:57:05.449
that out. We'll start with the first RFP and well,

01:57:05.829 --> 01:57:09.590
we can talk about scaling in the next next RFP. Don't

01:57:09.619 --> 01:57:13.659
come in to me this is, this is the devil in the

01:57:13.659 --> 01:57:20.350
details uh, where, where we land on the pricing structure

01:57:20.930 --> 01:57:26.369
both the megawatt and the potential for a price budget

01:57:26.380 --> 01:57:29.350
So megawatt budget and price budget um

01:57:31.529 --> 01:57:35.949
are, are major drivers here. Um, so

01:57:38.529 --> 01:57:42.890
the point of concentration within the known pool of

01:57:42.899 --> 01:57:48.590
uh installed resources is, is well taken and that is

01:57:49.329 --> 01:57:50.949
depending on which

01:57:52.729 --> 01:57:57.510
structure is adopted or considered for, how the price

01:57:57.510 --> 01:58:01.390
is determined that resources going to have a major

01:58:01.390 --> 01:58:06.689
impact on, on the overall impact to consumers. And

01:58:08.119 --> 01:58:12.520
I think I will tell you coming into this, I thought

01:58:12.529 --> 01:58:16.420
and as bid approach was the simplest method as per

01:58:16.420 --> 01:58:20.380
ERCOT staff comments coming back and considerable stakeholder

01:58:20.380 --> 01:58:26.069
comments. If we adopted a megawatt budget threshold

01:58:26.079 --> 01:58:30.689
that was much lower uh, than the known pool of potential

01:58:30.699 --> 01:58:33.840
resources because that provides, provides downward

01:58:33.840 --> 01:58:36.829
cost pressures on the bids that would be experienced

01:58:36.840 --> 01:58:39.210
But it doesn't, you know, that alone would not provide

01:58:39.220 --> 01:58:43.159
absolute safeguard to resources. And uh, windfalls

01:58:43.159 --> 01:58:46.039
could be experienced on the part of the dominant, you

01:58:46.039 --> 01:58:52.310
know, market participants. So, um, I think MR chairman

01:58:52.310 --> 01:58:56.020
I'll follow your lead. But the I mm had thoughts on

01:58:56.029 --> 01:59:00.140
a particular combination. They could be considered

01:59:00.720 --> 01:59:05.350
uh, in a, in a way that helps mitigate the dangers

01:59:05.359 --> 01:59:05.850
of

01:59:08.199 --> 01:59:13.000
and it's a upward skew to prices and impact of conservatives

01:59:13.149 --> 01:59:15.399
and ultimately that's what we want to stay apart against

01:59:15.399 --> 01:59:19.729
as a part of any decision made here. Yeah, I also want

01:59:19.729 --> 01:59:22.430
to hear from the mm, but you're from commissioner.

01:59:23.850 --> 01:59:27.229
Alright, could you um, welcome Carrie, thank you for

01:59:27.229 --> 01:59:29.649
being here. Could you

01:59:31.319 --> 01:59:37.989
give us your thoughts on a first RFP only with the

01:59:37.989 --> 01:59:40.390
eligibility requirements that we've laid out essentially

01:59:40.399 --> 01:59:45.029
on any version of, on site gas or backup dual fuel

01:59:48.119 --> 01:59:52.520
The dynamics with the market concentration that we've

01:59:52.529 --> 01:59:57.880
got and the trade offs between what well mentioned

01:59:57.880 --> 02:00:04.060
of limiting megawatts versus a program budget versus

02:00:04.069 --> 02:00:11.220
a called micro or macro, a program says price cap versus

02:00:11.220 --> 02:00:16.449
a unit per megawatt price cap vs. Any other mechanisms

02:00:16.449 --> 02:00:21.090
like discarding highest and highest bids in ensuring

02:00:21.090 --> 02:00:27.710
that we get the reliability we need without of with

02:00:27.720 --> 02:00:31.319
while minimizing the risk of price gouging. Is that

02:00:31.319 --> 02:00:35.000
enough for you? Yes. Carrie Bivens with potomac economics

02:00:35.409 --> 02:00:40.659
Um so you know the textbook ideal way would be to implement

02:00:40.670 --> 02:00:44.720
a slope demand curve with pivotal supplier offer mitigation

02:00:45.210 --> 02:00:50.409
and um but for a first RFP we have limited time and

02:00:50.409 --> 02:00:54.829
information in order to do that administrative work

02:00:54.840 --> 02:01:00.149
And so I would say a second approach would be to set

02:01:00.159 --> 02:01:05.210
a budget cap and that has some of the benefits of a

02:01:05.210 --> 02:01:08.840
demand curve. The budget cap in terms of price in terms

02:01:08.850 --> 02:01:12.760
of total dollars, total dollars. And that has some

02:01:12.760 --> 02:01:15.729
of the benefits of the demand curve and that it will

02:01:16.039 --> 02:01:24.840
um allow the offer behavior to reflect um well we'll

02:01:24.850 --> 02:01:29.310
provide some cost controls and will um provide some

02:01:29.310 --> 02:01:32.079
mitigation on the offering behavior because you know

02:01:32.090 --> 02:01:36.229
you'll there'll be still some competition on um what

02:01:36.810 --> 02:01:39.399
whether or not these offers are going to be selected

02:01:39.409 --> 02:01:42.649
Uh Now certainly we can participate in the process

02:01:42.659 --> 02:01:45.760
with removing I think Commissioner Cobos mentioned

02:01:45.760 --> 02:01:50.130
like outlier offers but um it's possible with a highly

02:01:50.130 --> 02:01:53.369
concentrated market that they could all be um very

02:01:53.369 --> 02:01:56.109
similarly priced and there wouldn't necessarily be

02:01:56.109 --> 02:02:00.560
outliers but they might all be um what you know, significantly

02:02:00.560 --> 02:02:04.930
higher than what would be um worthwhile cost to load

02:02:04.939 --> 02:02:09.180
for the reliability benefit. And so for the first RFP

02:02:09.180 --> 02:02:12.250
I would um that with this more limited eligibility

02:02:12.250 --> 02:02:17.329
requirement, I would recommend a um, you know, a lower

02:02:17.350 --> 02:02:24.060
budget cap and allow the megawatt procured to float

02:02:24.060 --> 02:02:27.159
with that cat based on the offers that you get. If

02:02:27.159 --> 02:02:30.699
we, so we in that framework we'd not be guaranteed

02:02:30.699 --> 02:02:32.439
any particular number of megawatts

02:02:34.000 --> 02:02:36.500
or you might get more, you might get more, you might

02:02:36.500 --> 02:02:41.479
get less. We're solving to protect the downside. So

02:02:41.479 --> 02:02:43.020
I guess in a worst case scenario

02:02:44.899 --> 02:02:48.220
your your offers could call all come in near the high

02:02:48.220 --> 02:02:48.619
cap

02:02:51.399 --> 02:02:55.899
if you, I would, I don't think it's clear that this

02:02:55.899 --> 02:03:01.569
product is subject to the um Ancillary service offer

02:03:01.569 --> 02:03:04.050
cap. I think this would be, I think this is going to

02:03:04.050 --> 02:03:06.890
be a bit a little bit differently is that it's more

02:03:06.890 --> 02:03:12.250
of a, it's a seasonal daily capacity payment. Um it's

02:03:12.250 --> 02:03:16.069
not necessarily a dollar per megawatt hours or dollars

02:03:16.069 --> 02:03:23.189
per megawatt service. And so um I'm not sure the $5,000

02:03:23.199 --> 02:03:27.170
per megawatt in one way or the other and if we, the

02:03:27.170 --> 02:03:29.510
answer services price cap is probably something we

02:03:29.510 --> 02:03:29.829
wanted

02:03:31.600 --> 02:03:34.789
consider on this. So it's not an unlimited financial

02:03:34.789 --> 02:03:39.130
liability to our ratepayers. So recall that, you know

02:03:39.130 --> 02:03:42.380
as the NPRR is designed is that their um it's still

02:03:42.380 --> 02:03:47.529
gonna be the market forces effect of the resources

02:03:47.529 --> 02:03:51.229
will still be able to um get energy market revenues

02:03:51.229 --> 02:03:55.159
during their deployment. Um and so this is really a

02:03:55.159 --> 02:04:01.260
product that is saying, um Invest in the fixed costs

02:04:01.260 --> 02:04:05.270
that you need in order to run a resource for 48 hours

02:04:05.279 --> 02:04:11.000
during a disruption in the natural gas, um supply And

02:04:11.010 --> 02:04:14.449
um sure, but if I know I own 75% of the market

02:04:14.449 --> 02:04:18.090
and I absolutely have to be cleared, ERCOT has no choice

02:04:18.090 --> 02:04:21.140
but to clear me why in the world, if we if we

02:04:21.140 --> 02:04:23.170
did have an age cap, why in the world would I not

02:04:23.170 --> 02:04:25.529
just offer everything at the age cap? Knowing that

02:04:25.529 --> 02:04:28.909
I absolutely, yes, I'm going to get filled. I think

02:04:28.909 --> 02:04:30.659
that's the most significant problem with the pay as

02:04:30.659 --> 02:04:34.250
bid approach. Um So at least an offer cap that does

02:04:34.250 --> 02:04:38.770
not have a set. Um, megawatt quantity would mitigate

02:04:38.770 --> 02:04:41.930
the effects of that. Um we've seen with pay as bid

02:04:41.930 --> 02:04:44.810
products and in a variety of different types of markets

02:04:44.810 --> 02:04:49.000
is that people don't offer what their costs are. Instead

02:04:49.000 --> 02:04:51.460
they try to predict what other suppliers are going

02:04:51.460 --> 02:04:54.770
to offer and it always ends up converging in higher

02:04:54.770 --> 02:04:57.720
costs than a single clearing price products. Sure.

02:04:57.729 --> 02:05:02.590
I mean, that's, that's in a market with more distributed

02:05:02.590 --> 02:05:07.890
suppliers in this particular case, if we don't have

02:05:07.890 --> 02:05:12.109
a minimum megawatt requirement quantity requirement

02:05:12.689 --> 02:05:17.590
even with a budget cap, but the the dominant market

02:05:17.600 --> 02:05:20.810
player knows they absolutely have to be filled

02:05:22.390 --> 02:05:25.899
in order to get any meaningful amount of megawatts

02:05:27.590 --> 02:05:30.609
how do we end up not at the price cap?

02:05:32.789 --> 02:05:37.199
Well, again, I would think of it as a, you know, x

02:05:37.199 --> 02:05:41.039
number of millions of dollars budget cap for procuring

02:05:41.050 --> 02:05:45.420
the service during the 120 8100 and 20 days of the

02:05:45.420 --> 02:05:48.109
contract period. I would think of it more like that

02:05:48.109 --> 02:05:52.949
rather than, um, a price cap type approach. I just

02:05:52.949 --> 02:05:56.720
think that there's, they have to offer associate quantity

02:05:56.720 --> 02:05:59.630
of megawatts, They have to offer a number of, they

02:05:59.630 --> 02:06:02.960
would give a dollar amount for the contract period

02:06:02.970 --> 02:06:05.149
for the number of megawatts that they are providing

02:06:05.779 --> 02:06:10.279
Right? So, I mean, my, my big concern is Whatever that

02:06:10.279 --> 02:06:13.729
offer is knowing that there's, I don't, I don't see

02:06:13.729 --> 02:06:15.979
I don't, I don't see anything in a budget. If there's

02:06:15.979 --> 02:06:21.170
20 million or 100 million, what prevents Everybody

02:06:21.170 --> 02:06:22.930
from just offering $5,000

02:06:24.979 --> 02:06:27.100
contract per megawatt?

02:06:29.079 --> 02:06:34.250
And we'll end up with 13 megawatts because the parameters

02:06:34.250 --> 02:06:37.149
of that would be such that, um, knowing that there

02:06:37.149 --> 02:06:40.989
is a limited budget limit, is that you wouldn't offer

02:06:40.989 --> 02:06:44.270
the cap necessarily because you might lose if only

02:06:44.270 --> 02:06:46.729
13 megawatts clear and you could have otherwise cleared

02:06:46.739 --> 02:06:52.380
2000. Um, if you had offered a lower amount, then you're

02:06:52.380 --> 02:06:54.989
better off with more megawatts at a lower hopefully

02:06:55.479 --> 02:06:58.890
Yes, well, there's an opportunity cost there. And so

02:06:58.899 --> 02:07:02.720
the idea is that puts pressure on the suppliers to

02:07:02.720 --> 02:07:05.569
offer their costs so that they can share the maximum

02:07:05.569 --> 02:07:08.060
number of megawatts get cleared because there is this

02:07:08.060 --> 02:07:10.909
cat that is the benefit of like more of a demand curve

02:07:10.920 --> 02:07:16.300
approach and capacity products is that it ensures that

02:07:16.479 --> 02:07:20.069
you know, there's maybe a high number where you really

02:07:20.069 --> 02:07:25.310
have some desire for reliability benefit and there's

02:07:25.310 --> 02:07:30.649
a downward sloping dollar amount because the reliability

02:07:30.659 --> 02:07:33.260
benefit declines with more megalodon. Sure, but we

02:07:33.260 --> 02:07:36.510
can't do it. The demand for many reasons. The second

02:07:36.510 --> 02:07:41.869
best approach um, is is the, the budget cap which has

02:07:41.869 --> 02:07:45.390
some elements of a demand current that still leaves

02:07:45.390 --> 02:07:47.239
the possibility competitive offers.

02:07:49.229 --> 02:07:51.920
There's a possibility that 15 megawatts of,

02:07:53.680 --> 02:07:55.880
okay, what can we do to eliminate that possibility

02:07:55.890 --> 02:07:57.100
Because I'm not comfortable with that,

02:07:58.979 --> 02:08:02.750
I'm not comfortable with that possibility. The probability

02:08:02.750 --> 02:08:06.640
of that happening being above zero for prices to come

02:08:06.640 --> 02:08:11.039
in that we don't, that we don't have any minimum number

02:08:11.039 --> 02:08:14.180
of megawatts that must be procured. And so that if

02:08:14.180 --> 02:08:20.159
it's just a floating, it's an offer anything and well

02:08:20.159 --> 02:08:24.220
hope it's competitive. But there's a chance that the

02:08:24.220 --> 02:08:26.659
equivalent price per megawatt could be extraordinarily

02:08:26.659 --> 02:08:31.899
high and we only by 100 MW before our budget runs out

02:08:33.069 --> 02:08:37.989
um, which is hopefully theoretically that doesn't happen

02:08:38.000 --> 02:08:42.979
But under the under a budget cap, we can't guarantee

02:08:42.979 --> 02:08:43.899
that doesn't happen.

02:08:45.670 --> 02:08:49.840
And that's, that's what it scares me. Yeah, I mean

02:08:49.850 --> 02:08:53.920
it's concerning. Um, also with respect that we could

02:08:53.920 --> 02:08:57.149
end up with very little megawatts and the whole point

02:08:57.159 --> 02:09:01.930
of this product is to add resiliency and future winner

02:09:01.930 --> 02:09:04.220
starting this, this winner, I mean, I don't want to

02:09:04.220 --> 02:09:07.000
say, well, we complied with SP three with 1000 megawatts

02:09:07.869 --> 02:09:11.840
X amount of money. I mean, exactly. So we gotta figure

02:09:11.840 --> 02:09:16.229
out a way to balance um, the price concerns that the

02:09:16.229 --> 02:09:21.220
chairman has, has highlighted first with the amount

02:09:21.229 --> 02:09:25.380
that we need for winter resiliency. And you know, I'm

02:09:25.380 --> 02:09:28.130
not comfortable going away to go, you know, controlling

02:09:28.130 --> 02:09:30.500
costs of making sure that the prices aren't, you know

02:09:30.500 --> 02:09:34.189
taking advantage of or whatever it is, it is very important

02:09:34.189 --> 02:09:36.840
but at the same time we need megawatts, we need winner

02:09:36.840 --> 02:09:39.109
resiliency and we've got to get there. I hear you may

02:09:39.109 --> 02:09:42.670
I offer a third approach, then a third approach could

02:09:42.680 --> 02:09:46.229
be doing a budget have with a range of megawatts, that

02:09:46.239 --> 02:09:50.619
would be um, lower than what you suggested previously

02:09:50.619 --> 02:09:54.060
So that you could, let's say, you know, assure that

02:09:54.060 --> 02:09:58.840
at least 2000 megawatts clears. And if the, um, you

02:09:58.840 --> 02:10:00.949
know, if the prices are low enough, then you clear

02:10:00.949 --> 02:10:04.750
5000, um, and then you can at least ensure that that

02:10:04.750 --> 02:10:08.739
you do have some minimum. But again, um, the suppliers

02:10:08.750 --> 02:10:11.420
will be motivated to ensure they get the most megawatts

02:10:11.430 --> 02:10:16.090
awarded because, um, that will result in the most revenue

02:10:16.100 --> 02:10:18.699
for them. So I still think that there's the budget

02:10:18.699 --> 02:10:22.199
happens, but otherwise they're going to be wrapped

02:10:22.210 --> 02:10:24.729
too. I mean, they have an obligation to comply with

02:10:24.739 --> 02:10:28.920
market reliability. Um, right, and again, during an

02:10:28.920 --> 02:10:31.060
event such as this, in which there is a disruption

02:10:31.060 --> 02:10:33.100
in the natural gas supply, you definitely have the

02:10:33.100 --> 02:10:36.140
incentive incentive is still there in the energy market

02:10:36.149 --> 02:10:39.520
And so this is on top of that. So I would expect

02:10:39.520 --> 02:10:46.239
that the cost of this may not be as um, capital intensive

02:10:46.250 --> 02:10:49.300
as some might suggest because you have to remember

02:10:49.300 --> 02:10:51.680
you're also going to get the energy market revenue

02:10:51.689 --> 02:10:54.880
on top of this capacity payment that you're receiving

02:10:54.890 --> 02:10:57.760
Sure. But we know there's a lot of these existing assets

02:10:58.359 --> 02:11:00.470
we know for a fact that's a lot of existing assets

02:11:00.470 --> 02:11:04.729
We want them to remain two, incentivize more of those

02:11:04.729 --> 02:11:09.649
assets, but for this specific round while or maybe

02:11:09.850 --> 02:11:14.199
maybe it's a uh, cold winter and there's a lot of high

02:11:14.199 --> 02:11:17.029
prices, but maybe it's a mild winter and this is gonna

02:11:17.029 --> 02:11:20.310
be my best chance at solid revenue. But in any scenario

02:11:20.310 --> 02:11:23.539
any business is gonna optimize maximize revenues, optimize

02:11:23.539 --> 02:11:27.850
profits. And sometimes optimizing profits doesn't mean

02:11:27.850 --> 02:11:32.130
maximizing revenue if you can on the same sunk cost

02:11:32.130 --> 02:11:34.789
of existing infrastructure, you've already built, the

02:11:34.789 --> 02:11:36.859
tanks are already there. They were sitting behind the

02:11:36.859 --> 02:11:40.350
generator, you've already filled them up because you

02:11:40.350 --> 02:11:43.710
want them, you want them to be there, you want them

02:11:43.710 --> 02:11:46.579
available for potential high price events.

02:11:48.560 --> 02:11:48.979
Whoa.

02:11:50.939 --> 02:11:54.069
And you know, you control most of the market

02:11:56.159 --> 02:11:58.680
and you can get for whatever your quantity of megawatts

02:11:58.680 --> 02:12:05.979
is, you can get $5,000 a megawatt, even for 500 megawatts

02:12:06.649 --> 02:12:12.380
or $50 per megawatt for 4000 megawatts I'm taking $5,000

02:12:12.380 --> 02:12:16.869
per 500 megawatts seven days a week. There is one more

02:12:16.869 --> 02:12:20.609
benefit which is that if these resources are deployed

02:12:20.619 --> 02:12:26.399
as written in the protocol change is that if the tank

02:12:26.399 --> 02:12:30.399
is drained, ERCOT actually, you know, through the low

02:12:30.399 --> 02:12:32.720
ratio share is going to actually pay to refill the

02:12:32.720 --> 02:12:35.260
tank. So that's a benefit that you don't get. If you're

02:12:35.260 --> 02:12:37.350
not participating in the service, you, if you drain

02:12:37.350 --> 02:12:41.329
the tank at $5,000 energy market revenue, you have

02:12:41.329 --> 02:12:44.569
to make that significant reinvestment and refilling

02:12:44.579 --> 02:12:48.220
not $5,000 in the real time market, $5,000 equivalent

02:12:48.229 --> 02:12:51.100
for the MW I'm offering for stuff that I didn't have

02:12:51.100 --> 02:12:54.770
already paid for. And I don't have to build anymore

02:12:56.149 --> 02:13:00.189
I may not want to maximize revenue or units sold and

02:13:00.199 --> 02:13:07.130
very well could make a lot more profit on higher margin

02:13:07.130 --> 02:13:10.560
part unit. And, and, and with the caveat that the economics

02:13:10.560 --> 02:13:12.899
of this are uncertain. Nobody's have done this at this

02:13:12.899 --> 02:13:17.300
scale before. Um So that's, that's what the bottom

02:13:17.300 --> 02:13:19.979
line is. I want to make sure that we have zero probability

02:13:21.250 --> 02:13:25.770
of high price equivalent per megawatt. And ending up

02:13:25.770 --> 02:13:29.539
with very few megawatts. So I think some version, I

02:13:29.550 --> 02:13:32.279
think we have to have a minimum quantity of megawatts

02:13:33.050 --> 02:13:37.529
um, is with an individual price cap on per megawatt

02:13:37.529 --> 02:13:42.220
combined with a minimum required megawatts help minimize

02:13:42.229 --> 02:13:45.300
the price or the risk of this kind of price gouging

02:13:45.399 --> 02:13:47.489
I think there's enough uncertainty at this time this

02:13:47.489 --> 02:13:50.250
time that it would be very difficult to set a price

02:13:50.250 --> 02:13:56.180
cap in a way that would ensure that, um, it's not too

02:13:56.180 --> 02:13:59.829
high, but also that you also risk that nobody participates

02:13:59.829 --> 02:14:03.170
in the service and you get zero megawatts. So, um,

02:14:03.539 --> 02:14:06.689
I think Commissioner Cobos mentioned that as part of

02:14:06.699 --> 02:14:09.699
the design, um, that the mm, could review the bids

02:14:09.699 --> 02:14:13.159
and so that does another part of protection to ensure

02:14:13.159 --> 02:14:17.170
that, um, you know, ah,

02:14:18.939 --> 02:14:22.770
offers that are significantly more than the Load would

02:14:22.770 --> 02:14:26.180
benefit from, would not be awarded. Okay, so what's

02:14:26.500 --> 02:14:31.149
zero megawatts is also unacceptable. Commissioner correctly

02:14:31.149 --> 02:14:34.140
articulated. I think we can all agree on that. If we

02:14:34.140 --> 02:14:39.170
have hypothetically, if we play out a price cap

02:14:40.680 --> 02:14:46.819
per megawatt combined with a minimum mega, what quantity

02:14:46.819 --> 02:14:51.060
to be procured for assets that largely exist?

02:14:54.539 --> 02:14:58.510
There's, I would expect most they will offer at the

02:14:58.520 --> 02:15:01.750
price cab, but nobody with the existing assets is going

02:15:01.750 --> 02:15:07.180
to refuse to take that revenue. If the price cap is

02:15:07.180 --> 02:15:10.439
high enough that you said, well, if it's a dollar and

02:15:10.439 --> 02:15:15.409
I don't have to do anything, I'm taking it, its existing

02:15:15.409 --> 02:15:15.899
assets,

02:15:17.539 --> 02:15:21.609
you have to purchase the fuel. Even if you have an

02:15:21.609 --> 02:15:24.399
existing asset, you still have to, you have to buy

02:15:24.399 --> 02:15:27.840
the oil, you have to maintain the facilities, These

02:15:27.840 --> 02:15:33.270
are costs that you may or may not invest in. Absolutely

02:15:34.539 --> 02:15:37.289
Um, because there's significant compliance risk and

02:15:37.289 --> 02:15:40.010
penalty, You know, the penalty of non non performance

02:15:40.020 --> 02:15:43.270
Um, uh, the requirement that you operate continuously

02:15:43.270 --> 02:15:47.100
for 48 hours is significant. And so these are all,

02:15:47.109 --> 02:15:52.270
um, fairly strict rules to comply with. And so that

02:15:52.279 --> 02:15:55.479
feeds into the cost. You know, I wouldn't offer a dollar

02:15:55.489 --> 02:15:57.890
for that. I think that's because there's enough risk

02:15:57.890 --> 02:16:00.220
there in providing the product. These are the same

02:16:00.220 --> 02:16:03.630
generators, they're expecting to operate continuously

02:16:03.630 --> 02:16:06.420
in high priced environments anyway. And they may choose

02:16:06.420 --> 02:16:09.859
to do that and not, and not take the compliance and

02:16:09.859 --> 02:16:12.109
the penalty risk that's associated with the product

02:16:12.119 --> 02:16:15.569
So these generators have the opportunity to participate

02:16:15.569 --> 02:16:19.510
in real time market, right. Um, and still draw the

02:16:19.510 --> 02:16:22.590
payment from the firm fuel. But if they don't participate

02:16:22.600 --> 02:16:27.000
in the real time market. Um, and there's no economic

02:16:27.000 --> 02:16:29.649
signal for them to be in the real time market, um,

02:16:30.329 --> 02:16:34.079
they will get rocked if needed for reliability as we

02:16:34.079 --> 02:16:35.600
experienced during winter storm landing.

02:16:38.459 --> 02:16:43.200
Exactly. So what I'm hearing and this may merit further

02:16:43.200 --> 02:16:45.459
discussion, but they may or may not have the backup

02:16:45.459 --> 02:16:49.799
fuel. So if there's no primary fuel, they won't get

02:16:49.799 --> 02:16:53.100
rough because they can't run right. But these businesses

02:16:53.100 --> 02:16:55.350
these companies have invested quite a bit of money

02:16:55.350 --> 02:16:58.120
to have that resiliency in the dual fuel capability

02:16:58.129 --> 02:17:01.690
because of, there are specific circumstances that they

02:17:01.690 --> 02:17:05.860
experience with, you know, being able to run right

02:17:05.870 --> 02:17:11.670
operationally. So I guess what I work and you've laid

02:17:11.670 --> 02:17:15.010
out several options and I think, you know, I would

02:17:15.020 --> 02:17:19.280
I personally would feel more comfortable um you know

02:17:19.280 --> 02:17:24.100
not making a decision on on those, those points here

02:17:24.100 --> 02:17:26.459
because I don't know what price cap to put out there

02:17:26.459 --> 02:17:29.159
right now. I don't know if that's the right construct

02:17:29.629 --> 02:17:34.379
I'm hearing your options here verbally. Um I would

02:17:34.389 --> 02:17:36.500
I would like to take a little bit more time to think

02:17:36.500 --> 02:17:41.459
about, you know, I've set out a megawatt amount, but

02:17:41.829 --> 02:17:44.430
I'd like to better understand the interplay between

02:17:44.709 --> 02:17:48.479
a budget cap and the price cap and get it's a really

02:17:48.479 --> 02:17:51.319
important issue and I'm not in the position here to

02:17:51.329 --> 02:17:53.610
pick out a number of a price cap because there's too

02:17:53.610 --> 02:17:57.540
many interrelated factors. So would it be possible

02:17:57.549 --> 02:18:01.280
to have, you know, maybe carry if you can file your

02:18:01.290 --> 02:18:05.000
you know, your your recommendations and with with the

02:18:05.010 --> 02:18:10.899
pros and cons of each approach and then, you know,

02:18:10.909 --> 02:18:13.700
we we we'd be better, you know, time, have more time

02:18:13.700 --> 02:18:17.370
to evaluate it and have a little bit more context written

02:18:17.370 --> 02:18:20.540
so we can analyze it and, and you know, visit with

02:18:20.540 --> 02:18:23.930
stakeholders perhaps. Yeah, I mean this is tough, but

02:18:23.930 --> 02:18:26.950
we also need to get this thing moving according to

02:18:27.379 --> 02:18:30.700
wild comments. They gave us a no later than decision

02:18:30.700 --> 02:18:34.030
point. We've got to have it done, May 12th.

02:18:37.420 --> 02:18:40.540
Yeah, we're gonna need a margin of safety on that one

02:18:41.219 --> 02:18:46.100
Um Mhm. Yeah, thank you. There's some rumblings in

02:18:46.100 --> 02:18:51.969
the crowd about that. Um but but it's it's it's a it's

02:18:51.969 --> 02:18:54.930
a large amount of money and an important resource.

02:18:54.930 --> 02:18:59.879
So I appreciate the that the deliberateness with which

02:18:59.879 --> 02:19:03.200
you want to approach this. The last recommendation

02:19:03.200 --> 02:19:07.340
or suggestion I heard from you was a budget cap with

02:19:07.819 --> 02:19:13.909
a minimum megawatt quantity as the best possibility

02:19:13.920 --> 02:19:19.010
of ensuring some enough megawatts for reliability while

02:19:19.020 --> 02:19:20.360
having cost control.

02:19:22.479 --> 02:19:25.239
As long as that minimum quantity is not so large that

02:19:25.239 --> 02:19:27.959
it pretty much encompasses all of the existing capacity

02:19:27.959 --> 02:19:30.629
I think that's the issue. That's hugely important.

02:19:33.719 --> 02:19:34.250
Um

02:19:36.319 --> 02:19:40.530
Do you set that at the threshold of the dominant market

02:19:40.540 --> 02:19:45.540
at at the level where the dominant market participants

02:19:46.500 --> 02:19:49.819
It is not the all encompassing factor. So if the dominant

02:19:49.819 --> 02:19:55.649
market participant is 3000 of the 5000 qualifying megawatts

02:19:55.649 --> 02:19:57.870
you said it at a minimum of 2000. So, you know that

02:19:57.870 --> 02:20:01.579
at least somebody could bid in of the 2000, I think

02:20:01.579 --> 02:20:03.809
you went the other way or the other way. So if it's

02:20:03.819 --> 02:20:08.579
if the dominant is 3000 Instead of 5000, you do Correent

02:20:08.579 --> 02:20:13.290
me but you do 4000. So that there are more people fighting

02:20:13.290 --> 02:20:16.379
over, agree with Commissioner Mcadams. You wanted bigger

02:20:16.379 --> 02:20:19.930
quantity, smaller quantity. He said 2000. And I think

02:20:19.930 --> 02:20:22.549
that what for what are your concerns are

02:20:24.540 --> 02:20:28.000
at 4000 megawatts you have to procure just about all

02:20:28.000 --> 02:20:33.290
that's out there and so your your incentive would be

02:20:33.299 --> 02:20:40.340
to um if there was a budget cap to um did just

02:20:40.340 --> 02:20:42.930
enough that you clear all of your megawatts for that

02:20:42.940 --> 02:20:47.670
budget cap because your, all of your megawatts are

02:20:47.670 --> 02:20:51.340
needed and that is already predefined. So your offer

02:20:51.340 --> 02:20:55.180
strategy is gonna essentially be to offer higher than

02:20:55.180 --> 02:20:57.729
your costs as high as possible to ensure that you get

02:20:58.549 --> 02:21:01.629
to use the full budget because of the lack of competitive

02:21:02.010 --> 02:21:04.809
suppliers who might come in and undercut you. So if

02:21:04.809 --> 02:21:07.899
you have a lower quantity then you have a different

02:21:07.899 --> 02:21:09.969
strategy, you have to have a different strategy because

02:21:09.969 --> 02:21:14.860
you have competitors and that sweet spot is 32 in your

02:21:14.860 --> 02:21:18.040
opinion, um I'd have to look at the numbers again but

02:21:18.040 --> 02:21:21.020
I think it's probably closer to two. Okay, yeah, the

02:21:21.020 --> 02:21:23.750
concern I have about that, I, I definitely see and

02:21:23.760 --> 02:21:27.110
you know, I understand the concerns, the concern I

02:21:27.110 --> 02:21:31.760
have is you know, um putting out a product for this

02:21:31.760 --> 02:21:35.790
next winner um And and and stating we complied with

02:21:35.790 --> 02:21:39.729
SB three with only 2000 MW of resiliency, I'm happy

02:21:39.729 --> 02:21:43.629
to expand it to offsite storage for gas this cycle

02:21:44.110 --> 02:21:47.200
Um there's a lot of footwork that needs to happen and

02:21:47.200 --> 02:21:49.950
ERCOT told me that you can implement it before next

02:21:49.950 --> 02:21:54.709
winter with, with that, that functionality. So we're

02:21:54.709 --> 02:21:58.149
all here to surpass expectations. I'm also,

02:22:00.000 --> 02:22:04.200
I mean implementation timelines vary sometimes that

02:22:04.209 --> 02:22:07.430
you know that ERCOT So we gotta be, we have to make

02:22:07.430 --> 02:22:13.319
sure that we can comply. Um you're okay.

02:22:17.000 --> 02:22:20.120
I mean, I like your like your thoughts

02:22:21.680 --> 02:22:22.120
in the lower

02:22:23.700 --> 02:22:28.139
Yeah, you know, I, I totally, I want to give these

02:22:28.309 --> 02:22:32.350
folks on the market and credit that It's my hope that

02:22:32.350 --> 02:22:34.709
they're not going to bid at 5000. I mean,

02:22:37.000 --> 02:22:38.530
I hope it's not a strategy to me,

02:22:43.629 --> 02:22:46.280
it's called experience,

02:22:48.420 --> 02:22:51.030
they're not gonna bid that. Um,

02:22:56.500 --> 02:23:01.709
I'm too callous and jaded Tibet millions of ratepayer

02:23:01.709 --> 02:23:06.090
dollars on that, but I appreciate the point and I do

02:23:06.100 --> 02:23:10.579
along those lines. It is worth giving credit to the

02:23:10.579 --> 02:23:13.020
generators who have been ahead of the curve. Just as

02:23:13.020 --> 02:23:15.209
many of our generators would have the curve on winterization

02:23:15.770 --> 02:23:17.629
Some of our generators have been ahead of the curve

02:23:17.639 --> 02:23:22.899
on getting backup fuel, dual fuel on site and as you

02:23:22.899 --> 02:23:27.690
said, was was used this winter and they should have

02:23:27.690 --> 02:23:29.870
compensation for that. So I certainly want to make

02:23:29.870 --> 02:23:33.370
sure that economic reward is out there while also balancing

02:23:33.370 --> 02:23:36.680
the risk of price gouging and an unlimited risk financial

02:23:36.680 --> 02:23:39.219
risk of the ratepayers. So it

02:23:41.299 --> 02:23:45.690
as as much as we need to move this forward, I do

02:23:45.690 --> 02:23:49.729
think Laurie has a good point in in the right direction

02:23:49.729 --> 02:23:55.819
and asking for some more guidance and clarity on an

02:23:55.819 --> 02:23:59.879
analysis really on how we can very specifically structure

02:23:59.879 --> 02:24:05.879
this to ensure we provide some measure of substantial

02:24:05.879 --> 02:24:08.190
reliability and

02:24:09.790 --> 02:24:14.370
at a reasonable cost to ratepayers while still providing

02:24:14.579 --> 02:24:17.459
the necessary economic incentives to our generators

02:24:18.090 --> 02:24:23.930
All right, and if we do that, I'd like to offer at

02:24:23.930 --> 02:24:29.059
least a starting point or benchmark. I'm happy to hear

02:24:29.059 --> 02:24:32.489
your suggestions to or any suggestions anyone. But

02:24:32.489 --> 02:24:37.059
as a starting point in your analysis, as a using er

02:24:37.059 --> 02:24:39.190
s as a comparable I think for the winter season we

02:24:39.190 --> 02:24:42.819
moved it up to 21 million. That's correct. 21 million

02:24:45.489 --> 02:24:50.219
Let's use let's use that as a comparable budget, acceptable

02:24:50.219 --> 02:24:55.569
budget amount for extreme break glass in case of emergency

02:24:56.790 --> 02:24:59.889
winter resiliency tools. I'm not saying that's what

02:24:59.889 --> 02:25:03.530
it needs to be, but start looking at the analysis,

02:25:03.690 --> 02:25:06.700
I mean, almost like a data table. I don't know. Okay

02:25:07.489 --> 02:25:11.209
I'll leave that to you, but Isn't er is 12 our product

02:25:11.790 --> 02:25:14.270
Yes, it is. Okay. So do we need to extrapolate that

02:25:14.450 --> 02:25:19.670
to, for the 48 hour? Yeah, good point. So call it and

02:25:19.670 --> 02:25:24.709
even 80. Yeah, and probably bacon, additional factors

02:25:24.719 --> 02:25:28.209
you know, er, s I mean, we're asking um, you know,

02:25:28.989 --> 02:25:32.879
aggregated customers, industrial customers to reduce

02:25:33.120 --> 02:25:36.530
their demand on the system, but here we're asking for

02:25:36.530 --> 02:25:42.540
generators to provide fuel, recognizing the high natural

02:25:42.540 --> 02:25:44.389
gas price environment. We're in. We're not going to

02:25:44.389 --> 02:25:46.500
stay there forever, hopefully, but but there's just

02:25:46.500 --> 02:25:48.020
I think it's gonna be a little bit more expensive.

02:25:48.020 --> 02:25:50.809
Right? So if you, but if there's a way to marry up

02:25:51.590 --> 02:25:56.420
the thought process um that would be helped. So I don't

02:25:56.420 --> 02:25:58.190
know if 21 million is too low but it's a

02:26:00.040 --> 02:26:04.280
very good point that it's to even start incomparable

02:26:04.280 --> 02:26:08.010
it needs to be 80 85 million really, N E R S

02:26:08.020 --> 02:26:13.409
doesn't necessarily require the Amount of infrastructure

02:26:13.409 --> 02:26:15.709
this would but again these are all kind of existing

02:26:15.709 --> 02:26:18.010
assets. So call that a scratch. Let's start with start

02:26:18.010 --> 02:26:23.280
with 85 million. And and look at the dynamics and cost

02:26:23.280 --> 02:26:28.180
implications for I guess varying budget amounts to

02:26:28.219 --> 02:26:31.079
defer to you on both like lower than 85 million or

02:26:31.079 --> 02:26:35.100
higher than 85 million and then varying megawatt amounts

02:26:35.500 --> 02:26:40.870
9000. Again, I'll defer to you on the nuances of the

02:26:40.870 --> 02:26:45.659
analysis but some sort of of matrix or data table water

02:26:46.579 --> 02:26:48.440
like I said, I'll let you figure out the best way to

02:26:48.440 --> 02:26:52.290
present that so we can we can see the implications

02:26:53.379 --> 02:26:57.639
of both of those variables and how they interact and

02:26:57.639 --> 02:27:01.530
what the net result would be. Is that does that make

02:27:01.540 --> 02:27:06.590
does that make sense? Happy to do that? I think certainly

02:27:06.600 --> 02:27:09.510
I think CLRs could be an appropriate benchmark. We

02:27:09.510 --> 02:27:14.629
could also look at um capacity products and other certain

02:27:14.639 --> 02:27:18.219
other parts of the country that have cleared um we

02:27:18.219 --> 02:27:24.790
could extrapolate based on um you know, some societal

02:27:24.790 --> 02:27:28.860
cost numbers on what, what's the benefit to consumers

02:27:28.860 --> 02:27:31.450
and use that to back into what could be an appropriate

02:27:31.459 --> 02:27:33.729
budget cap. So let's start with the different ways

02:27:33.729 --> 02:27:36.110
that we could. Okay. And let's start with the RS is

02:27:36.450 --> 02:27:40.530
E R S equivalent as the benchmark on costs that work

02:27:40.530 --> 02:27:44.049
for you all will defer to you for any other examples

02:27:44.049 --> 02:27:48.139
from other markets or frameworks in any other regulatory

02:27:48.139 --> 02:27:51.059
safeguards that you lay out your options anyway. But

02:27:51.069 --> 02:27:54.440
any other regulatory safeguards that could um, help

02:27:54.440 --> 02:27:58.540
mitigate the risk of all of the bids being at the base

02:27:58.540 --> 02:28:02.760
camp? He laid some out, but this allowance of high

02:28:02.760 --> 02:28:03.690
bid things like that.

02:28:05.770 --> 02:28:09.340
I mean in in a market in which there is a dominant

02:28:09.340 --> 02:28:12.530
supplier, they're all going to be, I don't know that

02:28:12.530 --> 02:28:14.700
you're going to see an outlier. We're not talking,

02:28:15.000 --> 02:28:19.790
you know, may be a number of hybrids. That's definitely

02:28:19.920 --> 02:28:23.530
Okay. So in terms of sizing and budget that we'll set

02:28:23.540 --> 02:28:26.549
that aside for now and and as part of that, please

02:28:26.549 --> 02:28:29.889
do keep in mind that one of the excellent tools archive

02:28:29.889 --> 02:28:34.489
has to minimize and control costs is a range not a

02:28:34.500 --> 02:28:38.569
fixed number. So under Laurie's framework, if it's

02:28:38.569 --> 02:28:42.090
4000-5000 We get to 4600,

02:28:43.670 --> 02:28:47.620
we can stop there If the next marginal megawatt equivalent

02:28:47.620 --> 02:28:52.870
is $5,000 a megawatt like backing your way into a demand

02:28:52.870 --> 02:28:55.590
curve essentially is what that is what that's doing

02:28:55.600 --> 02:28:58.649
just doing it kind of in a post-hoc way we'll take

02:28:58.649 --> 02:29:02.219
it. But keep the range in mind if you will. All right

02:29:02.219 --> 02:29:03.920
Thank you. Sandy, if anything to contribute on that

02:29:03.920 --> 02:29:07.170
request for sure we'll work with.

02:29:09.139 --> 02:29:11.639
Is there anything else we need to ask or including

02:29:11.639 --> 02:29:17.700
the mm analysis to get to the the the final direction

02:29:17.700 --> 02:29:21.559
to our ERCOT Does that cover it? I think we covered

02:29:22.600 --> 02:29:25.670
I don't have anything else to add a good deal. So that's

02:29:25.670 --> 02:29:31.840
quantity. Alright, well hopefully the next view will

02:29:31.840 --> 02:29:34.600
be easier. Um So what's the appropriate contract term

02:29:34.600 --> 02:29:38.280
for the initial um, product term? It and what should

02:29:38.290 --> 02:29:41.069
be the contract term for subsequent procurements? I

02:29:41.079 --> 02:29:44.100
believe the initial contract term for the first R.

02:29:44.100 --> 02:29:46.579
P. Should be one year. Um I think that allows us to

02:29:46.579 --> 02:29:49.559
get the product into the market um and will allow us

02:29:49.559 --> 02:29:52.729
to um add other resources um that could be scaled into

02:29:52.729 --> 02:29:56.129
the product and subsequent RPS and I think the subsequent

02:29:56.129 --> 02:30:00.979
RPS um should be multi year and um

02:30:03.540 --> 02:30:06.729
uh and I also would make a note to in in in

02:30:06.729 --> 02:30:12.290
the request consistent with the coal analysis. Also

02:30:12.290 --> 02:30:15.129
look at the staggered contract arms, not the first

02:30:15.129 --> 02:30:17.829
one. Maybe not the second one. But is there value in

02:30:18.040 --> 02:30:21.530
considering I made a note of it? Anything else on contract

02:30:23.860 --> 02:30:29.930
All right, last one. Okay. Last one. Um what how should

02:30:29.930 --> 02:30:34.299
the price awarded to each um firm fuel resource be

02:30:34.299 --> 02:30:38.409
determined? I would recommend a single clearing price

02:30:38.409 --> 02:30:41.250
for the mark for market efficiency purposes. Um as

02:30:41.250 --> 02:30:44.540
I recommended um you know, having market and the I

02:30:44.540 --> 02:30:48.200
mm taking out the outlier bids and that's subject to

02:30:48.209 --> 02:30:50.969
further analysis, but I think the single clearing price

02:30:50.979 --> 02:30:56.479
um versus pay as bid would be uh more administratively

02:30:56.479 --> 02:31:00.309
efficient. Um also um in terms of cost allocation would

02:31:00.319 --> 02:31:03.989
be easier to implement versus pays bid which could

02:31:03.989 --> 02:31:08.569
be choppier we want um the load the reps to be able

02:31:08.579 --> 02:31:13.219
to address these issues in a way that that is more

02:31:13.229 --> 02:31:16.790
streamlined and efficient. So that's where I land.

02:31:17.159 --> 02:31:23.420
Yeah. All right. Yeah. If this is a target of opportunity

02:31:23.430 --> 02:31:27.549
moment of opportunity to add in peripheral issues that

02:31:27.559 --> 02:31:31.610
may need to be considered. Sure. Far away briefly.

02:31:31.680 --> 02:31:37.809
Alright. It depends. Yeah, I will. It obviously depends

02:31:37.809 --> 02:31:40.750
on what methodology has adopted in terms of sizing

02:31:40.760 --> 02:31:45.489
and ultimate cost, that um there will be impact to

02:31:45.500 --> 02:31:48.709
consumers. There will be impact impact to the retail

02:31:48.709 --> 02:31:51.340
market and it will be a, a strange kind of impact.

02:31:51.340 --> 02:31:52.989
It will be something that we are not accustomed to

02:31:53.000 --> 02:31:55.909
Obviously we're dealing with a known pool of resources

02:31:56.030 --> 02:31:58.620
that have a dominant market participant. That's one

02:31:58.629 --> 02:32:02.100
that does have a retail component to it. So the ability

02:32:02.100 --> 02:32:04.959
for the rest of the market to self hedge against this

02:32:04.969 --> 02:32:10.340
is not present because it depends on who the other

02:32:10.340 --> 02:32:15.639
resources are more limited than in other, more limited

02:32:15.639 --> 02:32:16.579
than other Ancillary

02:32:18.149 --> 02:32:21.120
dynamic that we've got to work our way through. But

02:32:21.129 --> 02:32:25.520
I would suggest. Um, and, and we, we argued about this

02:32:25.530 --> 02:32:29.360
and, and the rulemaking on the fixed rate contract

02:32:29.360 --> 02:32:32.430
for retail elected providers. And it was asserted in

02:32:32.430 --> 02:32:34.729
comments. And, and I just want to keep this on the

02:32:34.729 --> 02:32:39.670
commission's radar, uh, that we consider asking ERCOT

02:32:39.750 --> 02:32:43.170
as as they deliberate when they report back the final

02:32:43.280 --> 02:32:47.889
potential financial impact to the system. Uh, before

02:32:47.889 --> 02:32:50.579
we execute that, we consider

02:32:52.250 --> 02:32:57.639
a plan to authorize the pass through of for a firm

02:32:57.639 --> 02:33:03.860
fuel program costs under 16 to 25 475. Subsection B

02:33:03.860 --> 02:33:08.719
five, which is again an authorized passed through amount

02:33:08.729 --> 02:33:12.100
of an out of market occurring from an out of market

02:33:12.100 --> 02:33:15.270
action that this commission authorizes. We specifically

02:33:15.280 --> 02:33:19.049
allowed that in for the very scenario of the firm fuel

02:33:19.049 --> 02:33:21.020
program because we knew that was coming because we

02:33:21.020 --> 02:33:24.020
knew we were gonna have to build this in for resiliency

02:33:24.030 --> 02:33:27.620
purposes. And, and in this particular instances we

02:33:27.620 --> 02:33:31.899
are going to have quantifiable and qualifications for

02:33:31.909 --> 02:33:35.530
actual resiliency that will result, which is megawatts

02:33:35.540 --> 02:33:41.170
of uh, specified duration in scarcity events. So the

02:33:41.170 --> 02:33:42.889
public can actually see what they're getting here.

02:33:42.889 --> 02:33:47.659
It's not some ephemeral, you know, uh, concept. So

02:33:48.049 --> 02:33:50.389
I just want to keep that on our radar. I want you

02:33:50.389 --> 02:33:52.260
to be thinking about that. I would ask that you be

02:33:52.260 --> 02:33:55.000
thinking about that as Kerry goes off and deliberates

02:33:55.010 --> 02:33:59.909
on how bad this could get. But maybe we can manage

02:33:59.909 --> 02:34:02.850
our way through that, appreciate the point is an important

02:34:02.850 --> 02:34:05.940
thing to consider the shock value to our retailers

02:34:06.209 --> 02:34:08.459
Especially independent retailers is significant.

02:34:10.040 --> 02:34:13.549
I don't know the right answer right now, but also keep

02:34:13.549 --> 02:34:17.600
in mind that this is also another competitive at the

02:34:17.600 --> 02:34:20.790
end of the day will be a competitive and Ancillary

02:34:20.790 --> 02:34:24.610
service, essentially 11 with unique characteristics

02:34:24.819 --> 02:34:31.440
for sure. But also I think as we have expand to offsite

02:34:31.649 --> 02:34:34.659
fuel plus from transport, the cost pressure changes

02:34:34.670 --> 02:34:39.409
the scope of um the scope of the program will change

02:34:39.770 --> 02:34:44.739
So I say all that and say it's worth considering staggering

02:34:44.739 --> 02:34:50.020
how we treat this charge like we're in phases of course

02:34:50.020 --> 02:34:52.600
as we're just like we're phasing other elements of

02:34:52.600 --> 02:34:56.219
this. I would also point out that we should keep this

02:34:56.219 --> 02:35:00.159
in mind because if we don't devise a plan, then this

02:35:00.159 --> 02:35:04.290
will be a Depending on the terms of when people are

02:35:04.290 --> 02:35:07.069
rolling off their fixed rate, 12 months or 24 months

02:35:07.440 --> 02:35:10.920
those new renewals will experience those kind of upfront

02:35:10.920 --> 02:35:13.530
costs all at once. So there's a greater concentration

02:35:13.690 --> 02:35:16.000
and our ability to socialize that and spread it across

02:35:16.000 --> 02:35:19.780
the moor even plane of of consumers will help manage

02:35:19.780 --> 02:35:25.219
that so that it softens any impact. But I've said enough

02:35:25.219 --> 02:35:29.329
I'll let it go with that. Alright, good, good item

02:35:29.329 --> 02:35:33.399
to keep in mind. We've been going over 2.5 hours now

02:35:33.399 --> 02:35:36.709
So how about we uh take 10 minutes,

02:35:39.139 --> 02:35:43.590
give her staff a break and refill coffee and come back

02:35:43.590 --> 02:35:44.120
to that work for you.

02:35:45.639 --> 02:35:47.870
Alright, we'll reconvene. Let's call it 12:20

02:43:34.299 --> 02:43:35.219
back to my list here.

02:43:36.899 --> 02:43:39.409
Right this meeting the public utility commission of

02:43:39.420 --> 02:43:44.290
texas is called back into order. We completed business

02:43:44.299 --> 02:43:47.020
on item 15.

02:43:48.899 --> 02:43:53.500
The next few items were not taken up which brings us

02:43:53.500 --> 02:43:58.420
to project item number 20 (item:20) project number 53191 reorganization

02:43:58.420 --> 02:44:04.569
of 25.505. A proposal from a support adoption commission

02:44:04.569 --> 02:44:07.920
Mcadams has a memo on this item.

02:44:11.489 --> 02:44:13.709
Start with you. If you'll lay out your memo and then

02:44:13.709 --> 02:44:16.700
we can ask Mr Chairman. I move fast. I already did

02:44:16.700 --> 02:44:20.090
my thanks and congratulations. Mr Smeltzer. Just my

02:44:20.090 --> 02:44:24.870
memo was designed just to elicit A order of work prioritization

02:44:24.870 --> 02:44:28.620
which I know staff is on for the purposes of 25,505

02:44:28.989 --> 02:44:32.489
uh during this summer and have received positive feedback

02:44:32.489 --> 02:44:34.209
so I'll let it go with that, appreciate your help.

02:44:35.090 --> 02:44:38.870
Mhm Thank you sir. Any other thoughts, comments or

02:44:38.870 --> 02:44:41.069
a motion to approve the proposal for adoption.

02:44:42.790 --> 02:44:46.760
Second, all in favor say aye unopposed motion passes

02:44:46.760 --> 02:44:49.680
Thank you Mr Smeltzer and good work Smeltzer and team

02:44:50.379 --> 02:44:54.489
nothing on items 21 through 25 Which brings us to item

02:44:54.489 --> 02:44:56.360
number 26. (item:26)

02:44:58.090 --> 02:45:02.940
Docket # 48697. Mr Journey could you lay out the remainder

02:45:02.940 --> 02:45:05.409
of that item for us. Yes sir

02:45:08.489 --> 02:45:12.799
26 to the docket 48697 is the application of Anderson

02:45:12.799 --> 02:45:16.069
water company for authority changes, rates, Proposed

02:45:16.069 --> 02:45:18.510
orders filed on March 11. No exceptions corrections

02:45:18.510 --> 02:45:21.200
were filed and I have a memo with proposed changes

02:45:23.989 --> 02:45:30.040
Thank you sir, appreciate the staff working with so

02:45:30.040 --> 02:45:31.860
closely with another small utility.

02:45:33.889 --> 02:45:37.790
No part earlier there's a lot of nuances and challenges

02:45:37.790 --> 02:45:42.670
in that process. Uh The proposed order largely looks

02:45:42.670 --> 02:45:44.659
good but there might be some room for improvement.

02:45:44.659 --> 02:45:48.479
Any thoughts, comments, questions. Mr. Chairman thank

02:45:48.479 --> 02:45:53.229
you when I was reading through this the tap fee issue

02:45:53.239 --> 02:45:57.780
um stuck out to me. Um Anderson water requested an

02:45:57.780 --> 02:46:01.379
increase for its standard tap fee from $300 to $1200

02:46:01.389 --> 02:46:04.440
but it did not file sufficient evidence in my view

02:46:04.450 --> 02:46:07.469
to support the increase. Um There was a commission

02:46:07.469 --> 02:46:10.670
counsel memo that asked Anderson to identify or provide

02:46:10.670 --> 02:46:14.569
evidence to support the the increase but Anderson did

02:46:14.569 --> 02:46:17.100
not file a response and eventually commissioned staff

02:46:17.100 --> 02:46:20.270
filed very limited information that the A. L. J. Did

02:46:20.270 --> 02:46:25.629
not enter it into evidence. So as you can see as a

02:46:25.629 --> 02:46:27.620
part of the case this is a class D. Utility and they

02:46:27.620 --> 02:46:30.610
are not represented by counsel. So the effects of the

02:46:30.610 --> 02:46:34.389
proceeds represented pro se representation kind of

02:46:34.399 --> 02:46:38.600
come forward. What as such. Rather than deny the requested

02:46:38.600 --> 02:46:41.100
standard tap fee increase because of the lack of evidence

02:46:41.100 --> 02:46:43.299
to support it. I would rather see that the utility

02:46:43.299 --> 02:46:46.299
recover its actual costs. I understand that this is

02:46:46.299 --> 02:46:50.500
not a preferred method for for staff, but I mean it

02:46:50.500 --> 02:46:53.700
is a way to keep this thing moving, puts it back on

02:46:53.700 --> 02:46:57.000
the utility, setting up. The standard tap fee at actual

02:46:57.000 --> 02:46:59.200
cost is consistent with the commission's rule on tap

02:46:59.200 --> 02:47:04.000
fees as part of 16 to 24 1 63 a one and

02:47:04.100 --> 02:47:06.799
as as I alluded to it's appropriate in this case, I

02:47:06.799 --> 02:47:11.200
agree thoughts on that. Yeah, the the taffy stuck out

02:47:11.200 --> 02:47:13.700
to me as well. I raised the taffy in in other prior

02:47:13.700 --> 02:47:19.799
cases and um had requested, I believe that um the parties

02:47:19.799 --> 02:47:23.200
in those prior cases submit additional information

02:47:23.200 --> 02:47:26.899
to justify their tap fee and they ultimately did. So

02:47:27.299 --> 02:47:32.000
um you know, having them set at actual cost versus

02:47:32.000 --> 02:47:35.700
having them prove up there There are 1200 ft and I

02:47:35.700 --> 02:47:38.600
understand $1200 taffy. I understand that it's been

02:47:38.700 --> 02:47:41.299
challenging to get information. I mean they are small

02:47:41.899 --> 02:47:43.899
Um so I guess,

02:47:46.399 --> 02:47:48.000
you know, I want to try to stay consistent with how

02:47:48.000 --> 02:47:50.600
we've been tackling these issues and I believe we asked

02:47:50.600 --> 02:47:53.500
for additional information for staff to work with additional

02:47:53.500 --> 02:47:56.799
information to work with the company to get additional

02:47:56.799 --> 02:47:58.700
information in the past. Is that your recollection

02:47:58.700 --> 02:48:02.399
Stephen yes, we did ask for information to support

02:48:02.399 --> 02:48:07.000
the taffy and then was forthcoming really and none

02:48:07.000 --> 02:48:07.500
was provided.

02:48:09.100 --> 02:48:09.600
What do you think?

02:48:11.600 --> 02:48:13.500
Are you on the side of just setting an actual costs

02:48:13.500 --> 02:48:14.399
and moving forward?

02:48:16.299 --> 02:48:19.600
And it sounded like the $1200 is consistent with what

02:48:19.600 --> 02:48:21.500
we've been looking at lately since they haven't come

02:48:21.500 --> 02:48:24.700
in for a while. So given that we're not gonna get anything

02:48:24.700 --> 02:48:29.799
out uh just to move quickly there there's uh one other

02:48:29.799 --> 02:48:32.200
significant issue but this one is not addressed in

02:48:32.200 --> 02:48:35.000
the party's agreement. So Anderson water continued

02:48:35.000 --> 02:48:38.500
to collect the proposed rates after the A. L. J. Suspended

02:48:38.600 --> 02:48:40.700
the effective date for the proposed rates in order

02:48:40.700 --> 02:48:45.700
number seven. Under the water code 13 1871. Subsection

02:48:45.700 --> 02:48:49.200
G. The commission may suspend proposed rates And under

02:48:49.200 --> 02:48:54.799
the water code 13.135. A utility may not charge or

02:48:54.799 --> 02:48:57.899
collect any rate for its services other than as provided

02:48:57.899 --> 02:49:02.299
in the code because Anderson did not was not permitted

02:49:02.299 --> 02:49:06.299
to collect the proposed rates. I support a refund under

02:49:06.299 --> 02:49:10.700
the commission's rules for overbilling 16 to 24 1 65

02:49:10.799 --> 02:49:14.399
H Now the amount that was over collected in my view

02:49:14.399 --> 02:49:17.500
should be returned to customers through a refund. Um

02:49:17.500 --> 02:49:20.100
or building credits. And it should mirror the over

02:49:20.100 --> 02:49:24.399
collection. Anderson should issue refunds or building

02:49:24.399 --> 02:49:27.500
credits for all sums collected in excess of their tariff

02:49:27.500 --> 02:49:30.500
rates during the suspension period, Which was in effect

02:49:30.600 --> 02:49:36.200
between April 26 of 2019 and January 16 of 2020. The

02:49:36.200 --> 02:49:39.299
refund, in my view should be dollar for dollar for

02:49:39.299 --> 02:49:42.200
each customer and made over the same period of months

02:49:42.500 --> 02:49:45.500
as the over collection. Thus at the end of the refund

02:49:45.500 --> 02:49:47.700
or credit period each customer will have received the

02:49:47.700 --> 02:49:50.600
exact amount that they were overbilled over the same

02:49:50.600 --> 02:49:54.000
period of time that the overbilling occurred. Um This

02:49:54.000 --> 02:49:58.899
can be addressed possibly in a compliance docket where

02:49:58.899 --> 02:50:01.899
Anderson water should file the documentation of the

02:50:01.899 --> 02:50:05.600
amounts collected during the suspension period. Staff

02:50:05.600 --> 02:50:08.000
should file a recommendation identifying the dollar

02:50:08.000 --> 02:50:11.299
for dollar amount to be refunded or credited to each

02:50:11.299 --> 02:50:14.399
customer. And Anderson should file documentation that

02:50:14.399 --> 02:50:16.799
these credits have been applied to each customer's

02:50:16.799 --> 02:50:20.799
monthly bill um in my view as the most black and white

02:50:20.799 --> 02:50:22.799
way to address the uh

02:50:24.500 --> 02:50:27.299
I agree in principle. Is there a more efficient way

02:50:27.299 --> 02:50:30.299
to include that directive in the order and skip the

02:50:30.299 --> 02:50:33.399
compliance docket? I don't know that. I think we need

02:50:33.399 --> 02:50:36.100
a compliance document to ensure that the numbers are

02:50:36.100 --> 02:50:39.000
right in that the factor return that that makes sense

02:50:39.000 --> 02:50:41.200
to me. And since they're I mean small utility just

02:50:41.200 --> 02:50:43.799
gives them something to to check everything against

02:50:44.200 --> 02:50:44.799
Alright,

02:50:46.899 --> 02:50:50.600
alright. So with that Mr Chairman I would move to approve

02:50:50.600 --> 02:50:54.299
the proposed order um as modified by our discussion

02:50:55.500 --> 02:50:58.799
Got a motion to the second all in favor say aye. Alright

02:50:59.100 --> 02:51:01.500
None opposed motion passes. You have everything you

02:51:01.500 --> 02:51:02.299
need. Mr johnny

02:51:05.200 --> 02:51:07.000
good cause exceptional notice.

02:51:11.100 --> 02:51:15.200
Let's stay that motion and ask for another motion from

02:51:15.200 --> 02:51:18.600
commissioner Mcadams including a good cause exception

02:51:18.600 --> 02:51:25.000
And also considering commission councils. I would move

02:51:26.399 --> 02:51:29.299
move to approve the proposed order. As modified by

02:51:29.299 --> 02:51:34.799
our discussion and grant good cause on notice and include

02:51:35.100 --> 02:51:38.700
commission and and and and and as modified by commission

02:51:38.700 --> 02:51:42.600
council members. I suck it up nicely done. Jimmy.

02:51:45.600 --> 02:51:49.100
We got a motion in a second. Um all they ever say

02:51:49.100 --> 02:51:52.799
I don't oppose. Thank you. Thank you. Commissioner

02:51:52.799 --> 02:51:56.299
Academy bringing that home for us. All right, Adam

02:51:56.299 --> 02:52:00.899
27 (item:27) Please item 27 is docket 48836. It's the petition

02:52:00.899 --> 02:52:06.500
of diploma like Mud # one and others for the appeal

02:52:06.500 --> 02:52:10.500
in the wholesale water rates of Round Rock before the

02:52:10.500 --> 02:52:14.299
commission are appeals of So as the so LJ's order number

02:52:14.299 --> 02:52:15.299
17.

02:52:19.299 --> 02:52:24.200
Alright, lots lots of pieces on this case as well,

02:52:24.799 --> 02:52:26.500
thoughts, comments, questions,

02:52:28.500 --> 02:52:33.600
seven issues I think from the LJ, we need to provide

02:52:33.600 --> 02:52:37.100
some clarity. Well, this was, yeah, I mean, it looked

02:52:37.500 --> 02:52:39.899
as I read through the case um I think, you know, that

02:52:39.899 --> 02:52:44.299
the issues became more clear and delineated um though

02:52:44.299 --> 02:52:46.399
at first it was a little bit, you know, convoluted

02:52:46.399 --> 02:52:50.000
looking but um so I I from my perspective, I would

02:52:50.000 --> 02:52:54.299
grant uh the party's appeals of um so uh order number

02:52:54.299 --> 02:52:57.100
17. Um so that would be the appeal of the city of

02:52:57.100 --> 02:53:01.299
Round Rock and the municipal utility districts and

02:53:01.299 --> 02:53:06.100
um then we would have to provide a ruling on each issue

02:53:06.100 --> 02:53:10.899
so that staff could develop an order um in response

02:53:10.899 --> 02:53:15.700
to the appeal. And so The first question is um what

02:53:15.700 --> 02:53:18.100
is the appropriate legal standard for a municipality

02:53:18.100 --> 02:53:21.500
to prove its rates are just and reasonable under Texas

02:53:21.500 --> 02:53:27.399
water code? Section 13.044. Um I my perspective is

02:53:27.399 --> 02:53:29.299
the appropriate legal standard is a just and reasonable

02:53:29.299 --> 02:53:33.500
standard period seems to make sense, especially the

02:53:33.500 --> 02:53:34.299
period part.

02:53:36.000 --> 02:53:40.799
Um The second issue is Maia municipality use budget

02:53:40.799 --> 02:53:43.500
data to establish its cost of service and to assess

02:53:43.500 --> 02:53:48.000
the reasonableness of its rates under um section 13.044

02:53:48.500 --> 02:53:51.899
Yes. A municipality may use budget data to establish

02:53:51.899 --> 02:53:54.000
its cost of service and to assess the reasonableness

02:53:54.000 --> 02:53:57.799
of its rates. Under TARC 13.44.

02:53:59.500 --> 02:54:05.299
Okay. Does T. W. C. limit the scope of the evidence

02:54:05.299 --> 02:54:09.899
the commission may consider in this appeal. No. Um

02:54:10.600 --> 02:54:15.899
Under Section 13.044. The commission um would review

02:54:15.899 --> 02:54:18.899
this case under the Pure trial de novo standard of

02:54:18.899 --> 02:54:24.000
review and mm hmm, agreed that all evidence should

02:54:24.000 --> 02:54:26.500
be considered. Um

02:54:28.100 --> 02:54:32.299
What is the relevant period of data under review my

02:54:32.299 --> 02:54:34.799
opinion. There is no relevant period of data under

02:54:34.799 --> 02:54:38.600
review under the water code section. All information

02:54:38.600 --> 02:54:42.500
regardless of its date. Origin can be used to determine

02:54:42.500 --> 02:54:44.500
whether the appeal rates are just and reasonable and

02:54:44.500 --> 02:54:47.200
if necessary to fix new just and reasonable rates.

02:54:47.899 --> 02:54:48.799
It makes sense to me.

02:54:51.100 --> 02:54:55.000
Alright, next may party recover reasonable expenses

02:54:55.000 --> 02:54:59.899
incurred an appeal under section 13.044. No

02:54:59.899 --> 02:55:02.299
a party may not recover reasonable expenses incurred

02:55:02.399 --> 02:55:08.700
in an appeal under section 13.44. Water is very specific

02:55:11.500 --> 02:55:15.700
Um are the round are are the city of Rome rocks 2019

02:55:15.700 --> 02:55:20.299
wholesale water rates subject to this appeal. No, The

02:55:20.299 --> 02:55:22.500
2019 rates are no longer subject to this appeal

02:55:24.100 --> 02:55:31.299
agreed. All right, thank you so much for the final

02:55:31.299 --> 02:55:34.000
question. Is should Round Rocks motion to dismiss me

02:55:34.000 --> 02:55:38.000
denied. Um Yes. Um Ron Rocks motion to dismiss should

02:55:38.000 --> 02:55:39.000
be denied

02:55:41.399 --> 02:55:44.100
agreed before you make your motion just make clear

02:55:44.100 --> 02:55:47.000
that if we're only granting the appealing part, do

02:55:47.000 --> 02:55:51.399
not impart. That's right. Um So we would grant the

02:55:51.399 --> 02:55:53.700
city of Around Rocks the motion would be to grant the

02:55:53.700 --> 02:55:56.500
City of Round Rocks appeal and the municipal utilities

02:55:56.500 --> 02:56:01.000
districts Joint Appeal of so a order number 17 in part

02:56:01.500 --> 02:56:05.200
To allow the commission as we've discussed to affirm

02:56:05.200 --> 02:56:09.700
deny and modify the order. So is order number 17. Is

02:56:09.700 --> 02:56:13.799
that a motion Does that suffice? His emotion? Emotion

02:56:16.200 --> 02:56:18.500
I've got a motion and a second. All in favor say, aye

02:56:18.500 --> 02:56:26.000
aye. None opposed motion passes Moving ahead to Adam

02:56:26.000 --> 02:56:31.000
29. Please sir. (item:29) Item 29 is docket 50721 is the

02:56:31.000 --> 02:56:33.100
application of crystal clear water for authority to

02:56:33.100 --> 02:56:35.700
change rates. So I proposed order was filed on April

02:56:35.700 --> 02:56:39.500
one corrections were filed to that

02:56:42.700 --> 02:56:45.600
file proposed corrections. I'd order but the judge

02:56:45.600 --> 02:56:49.799
made no corrections to the order. No, I take that back

02:56:49.799 --> 02:56:54.500
I have a memo. The judge did make corrections. Um that

02:56:54.500 --> 02:56:58.100
didn't get into my notes. All right. Thank you sir

02:56:59.200 --> 02:57:05.100
Bit of a tricky one thoughts, comments questions quickly

02:57:05.100 --> 02:57:08.799
I mean to me, um it's kind of a black box settlement

02:57:08.799 --> 02:57:14.200
It's a which highlights some very serious affiliate

02:57:14.200 --> 02:57:19.399
problems that have not been addressed. Um I think from

02:57:19.399 --> 02:57:21.500
my understanding of this case, in my reading of this

02:57:21.500 --> 02:57:29.799
case, um the types of affiliate transactions are are

02:57:29.799 --> 02:57:34.299
totally unacceptable in the way we do utility um rates

02:57:34.299 --> 02:57:37.600
and and work in the state. Um I would love to deny

02:57:37.600 --> 02:57:41.399
this. Um But I think we should remain it because it

02:57:41.399 --> 02:57:46.700
probably can be fixed. Um And I think that we have

02:57:46.700 --> 02:57:49.100
to send a signal that we would never accept things

02:57:49.100 --> 02:57:52.399
like this. Make sure that every utility knows that

02:57:52.600 --> 02:57:56.100
these types of affiliate problems. It just won't work

02:57:56.200 --> 02:57:59.200
Utilities with affiliate relationships need to meet

02:57:59.200 --> 02:58:03.000
a higher standard than otherwise. It's fair to say

02:58:03.000 --> 02:58:07.799
that there maybe there's a lot of unknowns in this

02:58:08.399 --> 02:58:12.299
Ah and would welcome some clarity. We welcome clarity

02:58:16.500 --> 02:58:20.000
Thank you for letting that out. Yeah, I concur um I

02:58:20.000 --> 02:58:24.100
support remand uh and and first off as I as I lead

02:58:24.100 --> 02:58:30.299
into that, I'd like to highlight um I also have objection

02:58:30.299 --> 02:58:32.799
to accepting a black box settlement in this stock.

02:58:32.799 --> 02:58:35.899
It either now or later because of the serious affiliate

02:58:35.899 --> 02:58:40.200
issues and the facts of the case highlights the seriousness

02:58:40.200 --> 02:58:43.899
of those issues. Uh The utility in this case submitted

02:58:43.899 --> 02:58:47.799
an affidavit stating it has no affiliates, but we clearly

02:58:47.799 --> 02:58:51.600
see in the facts that it does um, just like we've seen

02:58:51.600 --> 02:58:54.000
in other cases, the water code provides a higher standard

02:58:54.000 --> 02:58:56.799
for affiliate transaction and requires the commission

02:58:56.799 --> 02:59:00.100
to make certain findings as part of that robert pain

02:59:00.200 --> 02:59:03.399
in this case has interest in in other business entities

02:59:03.399 --> 02:59:05.700
And there's evidence of payments from the utility to

02:59:05.700 --> 02:59:09.100
those entities during the test year. So I want to point

02:59:09.100 --> 02:59:12.500
out, highlight some examples. There's an invoice from

02:59:12.500 --> 02:59:16.000
the utilities rental of a backhoe from Mr Payne's farm

02:59:16.000 --> 02:59:19.600
equipment LLC. Uh, MR Payne also says that the utility

02:59:19.600 --> 02:59:22.799
shares basic operating expenses such as rent and utilities

02:59:22.799 --> 02:59:28.000
with his other business entities. Um There is no question

02:59:28.000 --> 02:59:31.100
that Mr Pain himself is an affiliate as the owner and

02:59:31.100 --> 02:59:33.700
president of the utility. But the record contains a

02:59:33.700 --> 02:59:36.799
2019 promissory note from Mr Pain to the utility for

02:59:36.799 --> 02:59:41.299
a 20 year loan Of more than $500,000. And this gets

02:59:41.299 --> 02:59:43.000
interesting because the loan is clearly an affiliate

02:59:43.000 --> 02:59:46.200
transaction. Uh, and if any part is to be included

02:59:46.200 --> 02:59:50.299
in rates the commission should consider, uh, and and

02:59:50.299 --> 02:59:53.799
get more information, For example, the spreadsheet

02:59:53.799 --> 02:59:56.500
attached to the promissory note of the loan has grown

02:59:56.500 --> 03:00:00.299
since 1997. It's not clear whether Mr Mr Payne has

03:00:00.299 --> 03:00:03.899
always considered this loan, uh, this a loan or whether

03:00:03.899 --> 03:00:06.899
it's uh some or all of it is better characterized as

03:00:06.899 --> 03:00:11.299
a capital contribution to the to the corporation for

03:00:11.299 --> 03:00:15.299
about 10 years. Uh This thing has been out there and

03:00:15.299 --> 03:00:19.100
the utility has failed to make payments uh on on the

03:00:19.100 --> 03:00:21.799
the alleged loan. The result is the utility is now

03:00:21.799 --> 03:00:26.100
paying an interest on the accumulated interest of of

03:00:26.100 --> 03:00:30.600
the of the sum. So on remand, I would suggest that

03:00:30.600 --> 03:00:33.600
staff should also explore safeguards for these utility

03:00:33.600 --> 03:00:36.399
and its affiliates, such as agreements between affiliates

03:00:36.899 --> 03:00:39.299
Uh so that the affiliate transactions are properly

03:00:39.299 --> 03:00:42.700
accounted for in the utilities books going forward

03:00:42.700 --> 03:00:45.299
Additionally, on remand, I would also like to encourage

03:00:45.299 --> 03:00:48.299
staff to take a very close look at the notice that

03:00:48.299 --> 03:00:51.700
was issued for the proposed tariff fees in this proceeding

03:00:51.700 --> 03:00:54.500
and more broadly to take a very close look at notice

03:00:54.500 --> 03:00:57.799
going forward and other rape cases. Uh This commission

03:00:57.799 --> 03:01:00.799
has focused recently on fees charged by utilities and

03:01:00.799 --> 03:01:05.399
change in fees and change rates. Changes in fees constitute

03:01:05.399 --> 03:01:08.700
a change in rates. So even if the change in fees is

03:01:08.700 --> 03:01:12.000
not reflected in the standardized form for notice to

03:01:12.000 --> 03:01:14.200
customers, customers need to receive notice of any

03:01:14.200 --> 03:01:17.799
fees that are being changed and added. Um The form

03:01:17.799 --> 03:01:20.399
explicitly provides for supplemental pages if needed

03:01:20.399 --> 03:01:24.200
to address those type of fees. Oh puck additionally

03:01:24.200 --> 03:01:26.899
received late notice in this proceeding and uh and

03:01:26.899 --> 03:01:30.500
intervened on remand. I'd like, oh puck to be given

03:01:30.500 --> 03:01:32.799
the opportunity to fully participate from this point

03:01:32.799 --> 03:01:36.399
forward. And then also I'd like to highlight the rape

03:01:36.399 --> 03:01:40.100
case expense surcharge if I may. Um There are not enough

03:01:40.100 --> 03:01:43.000
details about the surcharge. The party's agreement

03:01:43.000 --> 03:01:47.399
on rape case expenses may change on remand but at the

03:01:47.399 --> 03:01:49.700
end of the day the commission needs to know the actual

03:01:49.700 --> 03:01:53.399
rate and the tariff provisions being approved related

03:01:53.399 --> 03:01:56.500
to the rape case expense surcharge to customers. Um

03:01:56.600 --> 03:01:59.299
Also, if an agreement or proposal for decision includes

03:01:59.299 --> 03:02:01.799
the rape case expenses through a certain date. There

03:02:01.799 --> 03:02:05.600
needs to be clarity for our purposes um whether rape

03:02:05.600 --> 03:02:08.100
case expenses after that date are being disallowed

03:02:08.100 --> 03:02:11.899
or deferred so we know what we're approving. And uh

03:02:12.000 --> 03:02:14.299
just to wrap up MR chairman and thank you for humoring

03:02:14.299 --> 03:02:17.200
me. Uh This utility acquired two water systems in the

03:02:17.200 --> 03:02:21.700
past few years. If Crystal Clear files a sale transfer

03:02:21.700 --> 03:02:25.100
merger application to acquire any additional water

03:02:25.100 --> 03:02:28.299
systems before final rates are approved in this docket

03:02:28.299 --> 03:02:31.799
commission staff should appropriately scrutinize any

03:02:31.799 --> 03:02:34.399
sale transfer merger proceeding involving this utility

03:02:34.399 --> 03:02:38.799
until the rate issues just mentioned our address and

03:02:39.200 --> 03:02:42.500
and pending Commissioner Cobos or your comments. I'd

03:02:42.500 --> 03:02:46.000
have a motion to remand nicely, nicely articulated

03:02:46.000 --> 03:02:49.700
agree with all those points And the sake of again,

03:02:50.600 --> 03:02:54.500
this needs to move forward. There's no effort to prevent

03:02:54.799 --> 03:02:57.700
progress but you did a very nice job of laying out

03:02:57.700 --> 03:03:01.000
the points. We need more clarity transparency on additional

03:03:01.000 --> 03:03:05.000
information before we can move forward. Yes, I agree

03:03:05.100 --> 03:03:08.500
on the points you raised and um I would remind the

03:03:08.500 --> 03:03:12.799
case back um to docket management um so that they can

03:03:12.799 --> 03:03:15.500
focus on the affiliate issues and the notice issues

03:03:15.500 --> 03:03:17.799
Um You raised the point on clarity on the rape case

03:03:17.799 --> 03:03:22.399
expenses and uh with respect to notice to open I think

03:03:22.399 --> 03:03:26.299
in this situation um, you know, yes, they were intervening

03:03:26.299 --> 03:03:29.000
in towards the end of the case again, but because they're

03:03:29.000 --> 03:03:32.000
the bulk of the main issues of this case are the affiliate

03:03:32.000 --> 03:03:35.299
issues and the and the notice issues they will have

03:03:35.399 --> 03:03:38.899
you know, it's incumbent on them to participate um

03:03:39.399 --> 03:03:41.100
in this case and they'll have an opportunity to do

03:03:41.100 --> 03:03:46.100
so um on remand and so I I think that that's a

03:03:46.100 --> 03:03:49.000
workable solution for me going forward. Um I think

03:03:49.000 --> 03:03:54.899
the loan um that you highlighted is problematic. Um

03:03:55.299 --> 03:03:57.600
it shouldn't stay on the utilities books with with

03:03:57.600 --> 03:03:59.600
ripe pears being on the hook especially because it

03:03:59.600 --> 03:04:01.500
seems like none of the money has been spent. It's only

03:04:01.500 --> 03:04:04.899
been a korean interest and no loan payments have been

03:04:04.899 --> 03:04:07.500
made and the default provisions haven't kicked haven't

03:04:07.500 --> 03:04:10.700
been kicked in so that just doesn't, you know, it doesn't

03:04:10.700 --> 03:04:14.000
sit well. So um that needs to be highly scrutinized

03:04:14.000 --> 03:04:16.000
and and removed from the books or accounted for in

03:04:16.000 --> 03:04:20.299
a different way agreed. Alright. You ready? Yes sir

03:04:20.299 --> 03:04:24.399
Mr chairman. You bet I would move to remand this proceeding

03:04:24.399 --> 03:04:26.899
consistent with our discussion and would instruct commission

03:04:26.899 --> 03:04:29.500
advising to include specific questions in our remand

03:04:29.500 --> 03:04:32.000
order to address the issues raised generally in our

03:04:32.000 --> 03:04:35.700
discussion. You got emotional for a second. All in

03:04:35.700 --> 03:04:39.899
favor say, aye, aye. None opposed motion passes. The

03:04:39.899 --> 03:04:44.899
next item please. Mr journeay. (item:30) item 30 is docket 51973

03:04:44.899 --> 03:04:49.700
X petitioner Rodney, Earl Monkey and others uh to amend

03:04:49.700 --> 03:04:53.299
H. M. W. Special Utility District CCN in Harris County

03:04:53.299 --> 03:04:57.200
by expedited release Before you as a motion to extend

03:04:57.200 --> 03:04:59.899
time to file a motion for rehearing. I would point

03:04:59.899 --> 03:05:02.500
out to you that a motion for rehearing was filed on

03:05:02.500 --> 03:05:05.899
April 15. That would make this request

03:05:08.200 --> 03:05:10.399
mood. So I think it's straightforward enough to just

03:05:10.399 --> 03:05:14.000
ask for a motion to deny this motion for an extension

03:05:14.000 --> 03:05:15.000
to request. We're hearing

03:05:16.600 --> 03:05:20.100
all in favor. Say aye, aye, not opposed item number

03:05:20.100 --> 03:05:24.700
32 please. (item:32) Mr item 32 is docket 52515 petitioner

03:05:24.700 --> 03:05:30.399
bell not FP limited to amend merrily suds CCN and collin

03:05:30.399 --> 03:05:33.200
county backs but I had to release. PFD was filed on

03:05:33.200 --> 03:05:37.000
february 22nd. No exceptions were filed. Thank you

03:05:37.000 --> 03:05:39.600
sir. This someone is another one that's pretty straightforward

03:05:39.600 --> 03:05:42.799
The petitioners don't own the property in question

03:05:43.399 --> 03:05:49.000
so we need to modify the PFD to deny. It seems pretty

03:05:49.000 --> 03:05:56.600
straightforward. Yes sir, deny based on So 22 182 subsection

03:05:56.600 --> 03:06:00.299
A just a more appropriate condition for denial. Is

03:06:00.299 --> 03:06:02.000
that what we're doing? I'll take your word for it.

03:06:02.000 --> 03:06:06.700
I believe so. Yeah, we've got a motion moved all in

03:06:06.700 --> 03:06:12.500
favor. Say, aye, opposed motion passes. Is there an

03:06:12.500 --> 03:06:14.600
issue? Think

03:06:17.600 --> 03:06:20.299
we'll stay that. Okay.

03:06:22.000 --> 03:06:26.299
Item 33 (item:33) is docket 52529 petition of East Tioga 

03:06:26.899 --> 03:06:31.299
5 81 LP to amend merrily said CCN in Grayson County

03:06:31.299 --> 03:06:35.200
by expedited release. PFD was filed on February 22

03:06:35.200 --> 03:06:39.000
No exceptions were filed another fairly straightforward

03:06:39.000 --> 03:06:43.100
regarding Qualifying County to be eligible for release

03:06:43.799 --> 03:06:46.299
Yes sir. Mr Chairman. With that. I'd move to modify

03:06:46.299 --> 03:06:49.500
the PFD tonight to deny the petition based on section

03:06:49.500 --> 03:06:54.100
22 182 subsection eight motion have a second all in

03:06:54.100 --> 03:07:00.600
favor say, aye. None opposed motion passes. Item 36

03:07:00.600 --> 03:07:01.299
Please, sir.

03:07:04.299 --> 03:07:07.500
Item 36.(item:36)  This project 52405 to review a certain

03:07:07.500 --> 03:07:10.500
water customer protection rules. Commission staff filed

03:07:10.500 --> 03:07:13.000
a memo and proposal for publication german you have

03:07:13.000 --> 03:07:18.600
a memo in this matter? Yes, I do. I know you all

03:07:18.600 --> 03:07:23.600
have seen this. I'll be brief just expanding on this

03:07:23.600 --> 03:07:27.100
proposal to ask questions regarding notifying customers

03:07:27.100 --> 03:07:31.799
of the full scope of the rights otherwise very nicely

03:07:31.799 --> 03:07:36.200
done in my opinion. Ready to ready to go. Great question

03:07:36.200 --> 03:07:37.399
I support it. Absolutely.

03:07:39.000 --> 03:07:42.500
All right. Do we have a motion motion to approve the

03:07:42.500 --> 03:07:44.899
proposal for publication as amended by my memo. Do

03:07:44.899 --> 03:07:49.799
we have that motion all in favor? Say, aye, aye, I'm

03:07:49.799 --> 03:07:51.899
not opposed nicely done.

03:07:53.600 --> 03:07:58.899
Uh brings us to 37. I don't have anything on that.

03:07:58.899 --> 03:08:05.100
Not Taking up 38 so 39 please. (item:39) I'm 39 is project 43518 delegation

03:08:05.100 --> 03:08:07.500
authorities. Docket management, I filed a memo asking

03:08:07.500 --> 03:08:10.200
for delegation authority to dock it management to process

03:08:10.200 --> 03:08:13.799
requests for waivers of schedule s to the right filing

03:08:13.799 --> 03:08:16.799
package for I will use administratively

03:08:18.500 --> 03:08:21.500
very straightforward thoughts, questions or a motion

03:08:21.500 --> 03:08:24.000
to approve the proposed It's a great idea. Mr Chairman

03:08:24.000 --> 03:08:27.899
and I would move to approve 2nd all in favor say, Aye

03:08:30.100 --> 03:08:33.799
Nothing on 40, 41 brings us to 42

03:08:35.399 --> 03:08:39.000
(item:42) item 42 is project 53157. The agency report to the

03:08:39.000 --> 03:08:42.600
88th Legislature commissioned staff has filed a memo

03:08:42.600 --> 03:08:44.899
regarding the commission's report to the Legislature

03:08:46.299 --> 03:08:48.500
All right, thank you sir. I know we've all reviewed

03:08:48.500 --> 03:08:48.799
that.

03:08:51.700 --> 03:08:55.100
This is the beginning phase five. I appreciate the

03:08:55.100 --> 03:08:57.200
work that's going into this, that has gone into this

03:08:57.200 --> 03:08:59.500
and more importantly, the work that will go into this

03:08:59.899 --> 03:09:03.600
project uh to be prepared for next session.

03:09:06.299 --> 03:09:08.799
As we all know, these are unusual times. And so given

03:09:08.799 --> 03:09:13.200
given the incredible The past 12 months, we've we've

03:09:13.200 --> 03:09:15.399
had at this agency, I'd offer a couple of thoughts

03:09:15.399 --> 03:09:19.700
for staff to consider primarily that when looking at

03:09:19.700 --> 03:09:23.399
the table of contents, the implementation of SP two

03:09:23.399 --> 03:09:29.899
and SP three are huge projects, hugely important, huge

03:09:29.899 --> 03:09:33.399
huge pieces of reform legislation and there's been

03:09:33.399 --> 03:09:36.600
a lot of work from our stakeholders market participants

03:09:36.899 --> 03:09:39.799
Most importantly, our staff. So I would certainly hope

03:09:39.799 --> 03:09:44.100
we highlight the work that's going into that for the

03:09:44.100 --> 03:09:46.899
legislature and the results that we're delivering to

03:09:46.899 --> 03:09:50.799
the legislature in the people of texas. I'm not sure

03:09:50.799 --> 03:09:54.600
electric vehicles rises quite to the The same level

03:09:54.600 --> 03:09:58.100
of importance is SB three, so we might be able to save

03:09:58.100 --> 03:10:03.200
space there. Um And of course we'd wanna, I think,

03:10:03.200 --> 03:10:04.700
I think it would be important to

03:10:06.399 --> 03:10:10.500
highlight the operational improvements ERCOT has made

03:10:11.299 --> 03:10:15.299
with our increased margin of safety and and more conservative

03:10:15.299 --> 03:10:17.700
operating posture. That's I know a lot has happened

03:10:17.700 --> 03:10:20.899
very quickly, but that's been a key part of this commission

03:10:20.899 --> 03:10:23.299
and archive have enhanced reliability.

03:10:25.799 --> 03:10:32.500
Two citizens just offer that up. Mr Chairman. I I'd

03:10:32.500 --> 03:10:34.299
agree with that. I mean, there are important things

03:10:34.299 --> 03:10:39.700
that we need to highlight um for the legislature and

03:10:39.700 --> 03:10:44.399
government leaders in terms of the the reforms that

03:10:44.399 --> 03:10:49.399
had been undertaken by the commission to restore resiliency

03:10:49.399 --> 03:10:55.100
and confidence in the system. Um You know, I wouldn't

03:10:55.100 --> 03:10:57.299
go so far as to open on anything, but just they need

03:10:57.299 --> 03:10:59.399
to be highlighted and explained because they're so

03:10:59.399 --> 03:11:03.200
complicated in the system. The vastness of everything

03:11:03.200 --> 03:11:06.399
that we've talked about over the last nine months has

03:11:06.399 --> 03:11:09.299
to be captured somehow and uh I'd agree that their

03:11:09.299 --> 03:11:12.799
importance is it should be elevated and the process

03:11:12.799 --> 03:11:14.700
we've gone through the

03:11:16.500 --> 03:11:20.100
extensive and comprehensive process of market redesign

03:11:20.100 --> 03:11:22.100
and the efforts that everybody up here, our staffs

03:11:22.100 --> 03:11:26.200
and the team have put into that. Mhm. Absolutely agree

03:11:26.200 --> 03:11:30.200
I think um there's several sets of actions right? There's

03:11:30.200 --> 03:11:34.399
the market reform process that we undertook Over the

03:11:34.399 --> 03:11:38.200
last several months that have resulted in Phase one

03:11:39.299 --> 03:11:43.299
and phase two but also actions we've taken to address

03:11:43.299 --> 03:11:45.700
issues we saw from winter storm Uri separate and apart

03:11:45.700 --> 03:11:50.000
from that um from that process um lowering the price

03:11:50.000 --> 03:11:52.799
cap, putting in stronger customer protection rules

03:11:53.399 --> 03:11:58.500
um Critical Load designation. Org. See all of those

03:11:58.500 --> 03:12:01.399
actions that we've taken. Weatherization. Um This is

03:12:01.399 --> 03:12:04.600
all very important to highlight um to the legislature

03:12:05.000 --> 03:12:08.299
agreed staff feel they have. That's alright, jimmy

03:12:08.700 --> 03:12:11.799
I was just gonna say I would request that we also had

03:12:11.799 --> 03:12:15.500
a section on a very specific timeline on the build

03:12:15.500 --> 03:12:16.600
out of the new offices

03:12:20.299 --> 03:12:23.100
and has equal importance to build out of the real Grand

03:12:23.100 --> 03:12:28.700
Valley infrastructure. I withdraw that. I don't want

03:12:28.700 --> 03:12:32.299
to put it back in. Yeah, Alright. There's the staff

03:12:32.299 --> 03:12:35.000
have all the direction they need on that particular

03:12:35.000 --> 03:12:39.000
We appreciate your input And um just to be clear, we

03:12:39.000 --> 03:12:43.000
consider this table of contents a living document as

03:12:43.000 --> 03:12:45.700
we go through the process of drafting this report and

03:12:45.700 --> 03:12:48.799
um welcome any additional thoughts that you have over

03:12:48.799 --> 03:12:52.299
the next several months. Thank you ma'am. Alright,

03:12:52.299 --> 03:12:57.100
that concludes business on item 42 brings us to 43

03:12:57.100 --> 03:13:01.100
(item:43) An update from our executive director. Thank you mr

03:13:01.100 --> 03:13:04.100
Chairman and commissioners in noting our successes

03:13:04.100 --> 03:13:06.500
we also talk about this beautiful diets that that you're

03:13:06.500 --> 03:13:09.700
sitting behind now. Um The only update I have to smoke

03:13:11.000 --> 03:13:15.399
crap working on it working. It's in process like most

03:13:15.399 --> 03:13:19.500
things. Um The only update I have today is on the electric

03:13:19.500 --> 03:13:21.500
supply chain security and mapping committee. We will

03:13:21.500 --> 03:13:24.600
hold our april meeting next friday. It's my intent

03:13:24.799 --> 03:13:27.500
to ask for a vote to approve the first iteration of

03:13:27.500 --> 03:13:30.200
the electric supply chain map which is Commissioner

03:13:30.200 --> 03:13:34.000
Cobos pointed out, will start the timeline for some

03:13:34.000 --> 03:13:37.299
other regulatory regulatory implementation, most notably

03:13:37.299 --> 03:13:39.500
weatherization rules that the railroad commission.

03:13:40.000 --> 03:13:42.600
And then it's my intent to have a public meeting of

03:13:42.600 --> 03:13:46.799
that committee on May 31st, Tuesday May 31st the Tuesday

03:13:46.799 --> 03:13:49.899
right after memorial Day to discuss the details of

03:13:49.899 --> 03:13:54.100
what's on that first map and to discuss how the contents

03:13:54.100 --> 03:13:58.500
of that map will help us better uh improve our operations

03:13:58.500 --> 03:14:02.799
during emergency events going forward, critically important

03:14:02.799 --> 03:14:05.000
initiative. Thank you for the update. Any other questions

03:14:05.000 --> 03:14:09.899
comments for thomas. All right, thank you. We don't

03:14:09.899 --> 03:14:17.200
have anything on 44 45 which brings us to End of our

03:14:17.200 --> 03:14:20.200
formal agenda. Having convened a duly notice, open

03:14:20.200 --> 03:14:25.100
meeting this commission will now at 12:54 PM on april

03:14:25.100 --> 03:14:28.600
21st 2020 to hold a closed session, pursuant to chapter

03:14:28.600 --> 03:14:32.899
551 of the texas government code, section 551.7155

03:14:32.899 --> 03:14:38.500
point 1.074 and 551.076. We'll be back in a bit

03:19:00.000 --> 03:19:07.299
closed session is hereby concluded at 12 59. Wow uh

03:19:07.299 --> 03:19:11.500
pm on april 21st 2022. And the commission now presume

03:19:11.500 --> 03:19:13.700
it's public meeting. I've been discussed compensation

03:19:13.700 --> 03:19:16.399
for the agency's executive director. In closed session

03:19:16.399 --> 03:19:19.299
I will entertain a motion to request approval from

03:19:19.299 --> 03:19:21.299
the office of the governor and the Legislative Budget

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board to set The executive director's salary at $220,000

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per year. Is their emotion 2nd, all in favor say Aye

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none opposed motion passes. There being no further

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business to come before the commission. This meeting

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of the Public Utility Commission of texas is hereby

03:19:41.600 --> 03:19:42.500
adjourned.