WEBVTT

00:00:05.066 --> 00:00:06.300
<v ->Good morning.</v>

00:00:06.300 --> 00:00:08.520
This meeting of the Public Utility Commission of Texas will

00:00:08.520 --> 00:00:10.620
come to order to consider matters that have been duly posted

00:00:10.620 --> 00:00:15.060
with the secretary of state for Texas for June 16th, 2022.

00:00:15.060 --> 00:00:16.410
For the record, my name is Peter Lake

00:00:16.410 --> 00:00:17.730
and with me today are Will McAdams,

00:00:17.730 --> 00:00:20.013
Lori Cobos and Jimmy Glotfelty.

00:00:21.601 --> 00:00:23.220
Mr. Journeay could you please walk us

00:00:23.220 --> 00:00:26.280
through the consent items on today's agenda?

00:00:26.280 --> 00:00:28.800
<v ->Good morning, Commissioners.</v>

00:00:28.800 --> 00:00:30.780
by individual ballot the following items

00:00:30.780 --> 00:00:33.390
were placed on your Consent Agenda.

00:00:33.390 --> 00:00:36.540
4, 7, 9 through 14,

00:00:36.540 --> 00:00:39.843
16, 19 23, 26 and 44.

00:00:40.950 --> 00:00:41.783
<v ->Thank you, sir.</v>

00:00:41.783 --> 00:00:43.590
Do we have a motion to approve the items just described

00:00:43.590 --> 00:00:44.640
by Mr. Journeay.

00:00:44.640 --> 00:00:45.900
<v ->So moved.</v>
<v ->Second.</v>

00:00:45.900 --> 00:00:47.130
<v ->All in favor, say aye.</v>

00:00:47.130 --> 00:00:47.963
<v All>Aye.</v>

00:00:47.963 --> 00:00:49.500
<v ->None opposed, motion passes.</v>

00:00:49.500 --> 00:00:54.330
We will not be taking up item 22 today and due to the nature

00:00:54.330 --> 00:00:58.800
of the items in the agenda, we will be taking up item 25

00:00:58.800 --> 00:01:01.233
before we take up item 24.

00:01:02.130 --> 00:01:04.413
Brings us to our formal agenda.

00:01:05.700 --> 00:01:08.193
First item is public comment.

00:01:09.570 --> 00:01:10.770
I'll ask all the speakers,

00:01:10.770 --> 00:01:12.330
remember that oral comments related

00:01:12.330 --> 00:01:14.580
to a specific agenda item will be heard

00:01:14.580 --> 00:01:15.840
when that item is taken up.

00:01:15.840 --> 00:01:19.470
This public comment segment is for general comments only.

00:01:19.470 --> 00:01:21.990
When we do get to oral comments on specific items,

00:01:21.990 --> 00:01:24.060
stakeholders should not approach the table

00:01:24.060 --> 00:01:26.130
unless oral argument has been previously granted,

00:01:26.130 --> 00:01:28.200
or they have been invited by a Commissioner.

00:01:28.200 --> 00:01:31.920
As always, speakers will be limited to three minutes each.

00:01:31.920 --> 00:01:34.710
Mr. Journeay do we have anyone from the public

00:01:34.710 --> 00:01:35.690
signed up to speak today?

00:01:35.690 --> 00:01:37.860
<v ->We have one person this morning, sir.</v>

00:01:37.860 --> 00:01:39.153
Mr. Cyrus Reed.

00:01:49.290 --> 00:01:52.002
<v ->Good morning, Commissioners. Welcome back.</v>

00:01:52.002 --> 00:01:52.835
<v Man>Thank you.</v>

00:01:52.835 --> 00:01:53.668
<v ->I went through the same thing.</v>

00:01:53.668 --> 00:01:54.690
Glad to be over it.

00:01:54.690 --> 00:01:57.090
Cyrus Reed here with Sierra Club Lone Star Chapter,

00:01:57.090 --> 00:01:59.640
here to talk to you about my favorite subject,

00:01:59.640 --> 00:02:01.350
energy efficiency.

00:02:01.350 --> 00:02:05.007
Prices are all up over ERCOT, even in the (indistinct).

00:02:05.970 --> 00:02:07.830
The cheapest, quickest and cleanest way

00:02:07.830 --> 00:02:10.920
to help consumers more directly is energy efficiency.

00:02:10.920 --> 00:02:15.510
The legislature, as you know, set broad goals in 2011,

00:02:15.510 --> 00:02:17.820
we, previous Commissioners, set rules.

00:02:17.820 --> 00:02:20.733
We haven't really revisited those rules since.

00:02:21.570 --> 00:02:23.580
They gave you the overall goals,

00:02:23.580 --> 00:02:26.040
but the details, performance bonuses,

00:02:26.040 --> 00:02:29.490
cost caps, energy saving targets are left to you guys,

00:02:29.490 --> 00:02:30.480
not the legislature.

00:02:30.480 --> 00:02:31.710
There are things you can do.

00:02:31.710 --> 00:02:34.590
You said, and not trying to make this personal.

00:02:34.590 --> 00:02:36.420
I'm just trying to make my point.

00:02:36.420 --> 00:02:39.270
You said in December 21 in the blueprint,

00:02:39.270 --> 00:02:41.100
we're gonna look at those programs.

00:02:41.100 --> 00:02:43.050
We haven't looked at 'em yet.

00:02:43.050 --> 00:02:46.140
In the meantime, those eight utilities,

00:02:46.140 --> 00:02:48.000
and they're all good people doing their jobs,

00:02:48.000 --> 00:02:50.700
following the rules, have set forth

00:02:50.700 --> 00:02:53.190
their proposed 2023 plans

00:02:53.190 --> 00:02:56.130
and EECRFs, which is how we collect the money

00:02:56.130 --> 00:02:57.630
to run those programs.

00:02:57.630 --> 00:03:01.350
They're basically saying we're gonna do the same in 2023,

00:03:01.350 --> 00:03:04.710
as we did in 2022, as we did in '21,

00:03:04.710 --> 00:03:08.070
get to about 530 megawatts of peak demand reduction

00:03:08.070 --> 00:03:11.550
and 700,000 megawatt hours of reduction,

00:03:11.550 --> 00:03:14.730
all of which are well beyond the goals and good,

00:03:14.730 --> 00:03:18.030
but you have a choice: open up a rulemaking

00:03:18.030 --> 00:03:22.860
and look at this, get comments from stakeholders,

00:03:22.860 --> 00:03:27.090
look at some of these issues, or you will be individually

00:03:27.090 --> 00:03:29.100
approving eight different utility plans

00:03:29.100 --> 00:03:31.380
in the next few months as those come to you.

00:03:31.380 --> 00:03:33.660
I've looked at those plans.

00:03:33.660 --> 00:03:35.340
We've filed comments and several of them.

00:03:35.340 --> 00:03:37.290
I'm just gonna mention a few things.

00:03:37.290 --> 00:03:40.800
CenterPoint 53677-

00:03:40.800 --> 00:03:42.840
<v ->You have one minute, sir.</v>
<v ->Okay.</v>

00:03:42.840 --> 00:03:46.830
36% of their proposed budget is for a performance bonus.

00:03:46.830 --> 00:03:48.243
They're following the rules.

00:03:49.470 --> 00:03:53.460
Encore 536071, Encore has some great programs.

00:03:53.460 --> 00:03:56.430
We appreciate their new programs on commercial winter peak.

00:03:56.430 --> 00:04:00.330
Great programs, 28 million, 33%,

00:04:00.330 --> 00:04:03.390
28 million of their budget is for a performance bonus,

00:04:03.390 --> 00:04:06.390
33% of the total budget that all ratepayers make.

00:04:06.390 --> 00:04:10.740
Entergy 53571, 37% of their budget,

00:04:10.740 --> 00:04:13.795
4.5 million is for performance bonus.

00:04:13.795 --> 00:04:17.550
53540, SPS, 34% of their budget,

00:04:17.550 --> 00:04:19.470
2.1 million is a performance bonus.

00:04:19.470 --> 00:04:20.610
They're not doing anything wrong.

00:04:20.610 --> 00:04:21.930
They're following the rules,

00:04:21.930 --> 00:04:24.150
but we need to re-look at those rules.

00:04:24.150 --> 00:04:27.630
You guys can look at higher savings goals,

00:04:27.630 --> 00:04:32.190
specific winter peak programs, what to do about caps,

00:04:32.190 --> 00:04:35.010
and the fact is they all could be doing a lot more,

00:04:35.010 --> 00:04:37.200
even under the caps we have.

00:04:37.200 --> 00:04:38.850
So with that, I'm encouraging you

00:04:38.850 --> 00:04:41.850
to please open up some stakeholder comments

00:04:41.850 --> 00:04:43.200
on energy efficiency programs,

00:04:43.200 --> 00:04:45.450
so you're not to force to approve all these plans

00:04:45.450 --> 00:04:48.120
in a few months without taking a good look at them.

00:04:48.120 --> 00:04:50.183
Thank you very much.
<v ->Thank you, Mr. Reed.</v>

00:04:51.270 --> 00:04:53.370
Anyone else signed up for public comment?

00:04:53.370 --> 00:04:54.370
<v Stephen>No, sir.</v>

00:04:56.100 --> 00:04:56.933
<v ->All right.</v>

00:04:56.933 --> 00:04:59.850
At this point, public comment is now closed.

00:04:59.850 --> 00:05:01.923
Next item on the agenda, please, sir.

00:05:02.970 --> 00:05:06.600
<v ->Item two is docket 52341, it's the application</v>

00:05:06.600 --> 00:05:08.160
of Mark Patterson for temporary rates

00:05:08.160 --> 00:05:10.350
for nonfunctioning utility.

00:05:10.350 --> 00:05:12.450
Proposed order was filed on March 8th

00:05:12.450 --> 00:05:15.530
and on June 3rd, the judges filed...

00:05:16.534 --> 00:05:18.600
Well, I filed a memo recommending that Commission

00:05:18.600 --> 00:05:21.780
take official notice of six monthly reports.

00:05:21.780 --> 00:05:24.420
Filed that by the temporary manager.

00:05:24.420 --> 00:05:28.410
Commissioner McAdams has a memo on this item

00:05:28.410 --> 00:05:30.240
and the subsequent item.

00:05:30.240 --> 00:05:31.073
<v ->Thank you, sir.</v>

00:05:31.073 --> 00:05:34.890
I know you obviously filed a memo.

00:05:34.890 --> 00:05:35.723
Would you carry the tee us off?

00:05:35.723 --> 00:05:38.220
<v ->Yes sir. It was a lengthy memo.</v>

00:05:38.220 --> 00:05:39.783
I'll try to boil it down.

00:05:40.920 --> 00:05:42.690
In these two dockets,

00:05:42.690 --> 00:05:45.780
we are attempting to address a number of issues and try

00:05:45.780 --> 00:05:47.727
to get a potential solution in front of us.

00:05:47.727 --> 00:05:49.560
And that was the purpose behind the memo.

00:05:49.560 --> 00:05:51.780
That was the purpose behind the length and description

00:05:51.780 --> 00:05:54.060
of the mechanics.

00:05:54.060 --> 00:05:57.270
As I set out, I recommended modifying the proposed order

00:05:57.270 --> 00:05:59.130
to accomplish two things.

00:05:59.130 --> 00:06:02.130
First, addressing the temporary manager compensation issue

00:06:02.130 --> 00:06:04.080
raised by Commission staff,

00:06:04.080 --> 00:06:06.390
and ultimately approve the temporary rates

00:06:06.390 --> 00:06:08.430
in the petition.

00:06:08.430 --> 00:06:09.573
As to the first,

00:06:11.310 --> 00:06:13.440
I believe that the proposed temporary rates allow

00:06:13.440 --> 00:06:16.080
the utility to maintain the annual revenue

00:06:16.080 --> 00:06:19.170
that the temporary rates are designed to recover.

00:06:19.170 --> 00:06:21.960
I would however, deny the effective date

00:06:21.960 --> 00:06:23.700
of the recombined effective rate

00:06:23.700 --> 00:06:26.820
until the completion of the sale transfer merger.

00:06:26.820 --> 00:06:31.020
I would make a motion to accomplish this,

00:06:31.020 --> 00:06:33.330
but certainly welcome any feedback.

00:06:33.330 --> 00:06:35.673
Again, it was a heavy memo.

00:06:37.800 --> 00:06:39.147
<v ->Thoughts, comments?</v>

00:06:40.530 --> 00:06:45.530
<v ->I agree with Commissioner McAdams' proposed actions</v>

00:06:45.810 --> 00:06:48.390
for this case and the next case,

00:06:48.390 --> 00:06:50.190
with respect to the first case,

00:06:50.190 --> 00:06:53.130
from my perspective, I think we need to go ahead

00:06:53.130 --> 00:06:54.600
and approve temporary rates to get

00:06:54.600 --> 00:06:57.660
this nonfunctioning utility going.

00:06:57.660 --> 00:07:02.057
But upon the Commission's issuance of a final order

00:07:03.720 --> 00:07:04.923
approving the STM,

00:07:06.120 --> 00:07:07.950
those temporary rates would be in effect

00:07:07.950 --> 00:07:10.920
and the temporary managers fee needs to be zeroed out

00:07:10.920 --> 00:07:13.920
because that would be subsumed into the rate.

00:07:13.920 --> 00:07:16.800
I think once we look at the STM case

00:07:16.800 --> 00:07:18.510
and I know, Commissioner McAdams,

00:07:18.510 --> 00:07:20.520
you have some proposed steps there that you've laid out,

00:07:20.520 --> 00:07:22.290
I'll let you do that.
<v ->Yeah.</v>

00:07:22.290 --> 00:07:23.760
<v ->And then I'll chime in after that.</v>

00:07:23.760 --> 00:07:26.580
<v ->So thank you, Commissioner. So as to that.</v>

00:07:26.580 --> 00:07:29.450
<v ->Before we do that, we should probably call that item up.</v>

00:07:29.450 --> 00:07:31.110
<v ->Okay, do we need to? Yeah.</v>

00:07:31.110 --> 00:07:33.732
<v ->You're gonna talk about zeroing out the temporary</v>

00:07:33.732 --> 00:07:35.820
(indistinct)
<v ->Exactly, yes sir.</v>

00:07:35.820 --> 00:07:38.370
Which was articulated in the memo.

00:07:38.370 --> 00:07:40.920
So I believe the mechanics, if we were

00:07:40.920 --> 00:07:45.540
to adopt anything that that is reflected

00:07:45.540 --> 00:07:47.940
in the conditions of the memorandum.

00:07:47.940 --> 00:07:51.120
So Stephen, with that, you want us to call it up?

00:07:51.120 --> 00:07:53.477
<v ->So item three is docket 50085,</v>

00:07:53.477 --> 00:07:56.760
is the application of Castle Water Incorporated

00:07:56.760 --> 00:07:58.890
doing business, Horseshoe Bend Water Systems

00:07:58.890 --> 00:08:00.570
and Horseshoe Bend Water Company

00:08:00.570 --> 00:08:02.730
for the sale transfer or merging of facilities

00:08:02.730 --> 00:08:04.053
and certificate rights.

00:08:08.790 --> 00:08:09.960
<v ->I'll keep going, Mr. Chairman,</v>

00:08:09.960 --> 00:08:10.793
if you want me to.
<v ->Yeah, keep going.</v>

00:08:10.793 --> 00:08:11.626
Whatever you have left.

00:08:11.626 --> 00:08:12.459
Okay.
<v ->Keep rolling.</v>

00:08:12.459 --> 00:08:13.292
<v ->Okay.</v>

00:08:13.292 --> 00:08:15.210
As the sale and transfer of Castle Water

00:08:15.210 --> 00:08:17.430
is nearing its conclusion,

00:08:17.430 --> 00:08:20.670
I believe there is an opportunity for the Commission

00:08:20.670 --> 00:08:23.820
to provide clarification and guidance on key issues

00:08:23.820 --> 00:08:27.120
that the Commission has not yet addressed in the rulemaking

00:08:27.120 --> 00:08:29.040
or the sale transfer merger docket

00:08:29.040 --> 00:08:31.350
for nonfunctioning utilities.

00:08:31.350 --> 00:08:34.200
Most importantly and consistent with my memo,

00:08:34.200 --> 00:08:36.300
I recommend that the reconciliation review

00:08:36.300 --> 00:08:38.940
of temporary rates approved for the utility

00:08:38.940 --> 00:08:43.050
in docket number 49759 be completed

00:08:43.050 --> 00:08:47.040
in this docket, number 50085,

00:08:47.040 --> 00:08:49.830
before the Commission issues a final order.

00:08:49.830 --> 00:08:51.270
For the amended temporary rates

00:08:51.270 --> 00:08:54.540
that may be approved in the pending temporary rate

00:08:54.540 --> 00:08:57.720
case of docket 52341.

00:08:57.720 --> 00:09:00.540
It makes sense in that case to require

00:09:00.540 --> 00:09:03.510
the reconciliation review of these temporary rates

00:09:03.510 --> 00:09:05.760
in the utility's next base rate case,

00:09:05.760 --> 00:09:08.640
because after sale transfer merger,

00:09:08.640 --> 00:09:10.890
it's logical that that may occur.

00:09:10.890 --> 00:09:13.920
So with that, Mr. Chairman, pending any type of feedback,

00:09:13.920 --> 00:09:15.960
discussion or modification, I would make a motion

00:09:15.960 --> 00:09:19.650
to direct OPDM to file an interim order consistent

00:09:19.650 --> 00:09:20.483
with my memo.

00:09:22.200 --> 00:09:23.740
<v ->Thoughts, comments?</v>

00:09:23.740 --> 00:09:27.180
<v ->Okay, so with respect to this case,</v>

00:09:27.180 --> 00:09:28.050
I am in agreement.

00:09:28.050 --> 00:09:31.560
Ultimately the order that comes out from the Commission

00:09:31.560 --> 00:09:34.230
needs to terminate the temporary manager's appointment

00:09:34.230 --> 00:09:35.430
and compensation fee.

00:09:35.430 --> 00:09:39.389
I agree with the reconciliation in the base rate case,

00:09:39.389 --> 00:09:41.109
'cause that is consistent with the Commission's practice-

00:09:41.109 --> 00:09:46.109
<v ->Precipice.</v>
<v ->In reconciling interim rates</v>

00:09:46.590 --> 00:09:49.080
in the electric utility industry.

00:09:49.080 --> 00:09:51.210
And I think that's the appropriate place to reconcile

00:09:51.210 --> 00:09:52.680
those temporary rates.

00:09:52.680 --> 00:09:54.990
I do think that we need to set

00:09:54.990 --> 00:09:58.410
a period as to when those temporary rates will be in place

00:09:58.410 --> 00:10:01.768
and then give a date certain after, you know,

00:10:01.768 --> 00:10:02.970
I think the utility will come in

00:10:02.970 --> 00:10:04.350
after the temporary rates expire,

00:10:04.350 --> 00:10:06.540
but if we wanna set a date certain as to when they would

00:10:06.540 --> 00:10:08.670
come in after the temporary rate period expires,

00:10:08.670 --> 00:10:10.653
I think I'm good with that as well.

00:10:12.300 --> 00:10:13.710
So my only question is,

00:10:13.710 --> 00:10:16.290
so your position is the Commission issue out

00:10:16.290 --> 00:10:18.167
an interim order in this case,

00:10:18.167 --> 00:10:22.200
in the STM case, laying out our expectations?

00:10:22.200 --> 00:10:23.500
<v ->That's correct.</v>
<v ->Okay.</v>

00:10:28.500 --> 00:10:32.460
Stephen, is that the appropriate mechanical, procedural way

00:10:32.460 --> 00:10:33.450
to approach this?

00:10:33.450 --> 00:10:35.840
Or are the expectations...

00:10:37.733 --> 00:10:39.881
I mean, how do you...

00:10:39.881 --> 00:10:41.730
I mean, I'm just curious to think about that.

00:10:41.730 --> 00:10:43.410
<v ->We thought it would be good</v>

00:10:43.410 --> 00:10:46.840
to memorialize this discussion

00:10:48.240 --> 00:10:50.760
going forward to make sure that it's clear

00:10:50.760 --> 00:10:55.650
to the parties and the judge and STM what's expected.

00:10:55.650 --> 00:10:56.483
<v Lori>Okay.</v>

00:10:57.690 --> 00:11:00.239
<v ->Makes sense to me. Anything to?</v>

00:11:00.239 --> 00:11:02.657
<v ->I'm just happy Commissioner McAdams put forth this memo.</v>

00:11:02.657 --> 00:11:06.780
It's a little convoluted here and he spent the late nights

00:11:06.780 --> 00:11:08.550
this week doing it, not me.

00:11:08.550 --> 00:11:10.280
<v ->Also very appreciative of that.</v>

00:11:10.280 --> 00:11:13.530
<v ->Very appreciative of it.</v>
<v ->Staff was brilliant.</v>

00:11:13.530 --> 00:11:15.783
So it helped.
<v ->Brilliant staff. Absolutely.</v>

00:11:16.800 --> 00:11:19.017
But nonetheless, it's your name on it,

00:11:19.017 --> 00:11:22.680
so it's brilliant.
<v ->Thanks.</v>

00:11:22.680 --> 00:11:23.520
<v ->I'm in agreement.</v>

00:11:23.520 --> 00:11:25.380
You know, I think this is a complicated case,

00:11:25.380 --> 00:11:29.160
and the goal is to get this across the finish line,

00:11:29.160 --> 00:11:31.980
and you've laid out a very formidable path to do so.

00:11:31.980 --> 00:11:34.260
So I'm in support of that.

00:11:34.260 --> 00:11:35.760
<v ->Agreed on all points.</v>

00:11:35.760 --> 00:11:38.777
So we've got a proposed order to consider and then

00:11:38.777 --> 00:11:42.120
a proposed order for reconciliation review.

00:11:42.120 --> 00:11:42.953
<v ->That's correct.</v>

00:11:42.953 --> 00:11:43.990
<v ->Let's tackle that proposed order first.</v>

00:11:43.990 --> 00:11:45.010
<v ->Okay.</v>
<v ->Do we</v>

00:11:46.410 --> 00:11:49.980
have a motion to approve the proposal for item number two?

00:11:49.980 --> 00:11:52.590
Approve the proposed order as modified

00:11:52.590 --> 00:11:54.420
by Commissioner McAdams' memo.

00:11:54.420 --> 00:11:57.300
<v ->So moved</v>
<v ->We have a second?</v>

00:11:57.300 --> 00:11:59.520
<v ->Second.</v>
<v ->Second.</v>

00:11:59.520 --> 00:12:00.993
The only piece is I think, Stephen,

00:12:00.993 --> 00:12:03.870
do we need to modify the proposed orders,

00:12:03.870 --> 00:12:05.490
ordering paragraphs to make them consistent

00:12:05.490 --> 00:12:07.563
with the prior temporary rates order?

00:12:08.670 --> 00:12:10.860
<v ->So I think this order, which is basically</v>

00:12:10.860 --> 00:12:14.790
amending those would approve the transfer

00:12:14.790 --> 00:12:17.640
that the $8 into the rates of the utility,

00:12:17.640 --> 00:12:20.340
but make that effective upon the issuance of the final order

00:12:20.340 --> 00:12:21.420
in the STM case.

00:12:21.420 --> 00:12:22.830
<v ->Okay, I just wanna make sure that's straightened out.</v>

00:12:22.830 --> 00:12:24.166
<v ->It's released as the temporary measure.</v>

00:12:24.166 --> 00:12:25.482
<v ->Okay.</v>
<v ->Okay, so-</v>

00:12:25.482 --> 00:12:26.490
<v ->Motion stands.</v>

00:12:26.490 --> 00:12:29.010
<v ->Motion stands? Doesn't need to be amended?</v>

00:12:29.010 --> 00:12:30.750
All right, motion stands. We have a second.

00:12:30.750 --> 00:12:32.730
All in favor, say aye.
<v ->Aye.</v>

00:12:32.730 --> 00:12:35.520
<v ->None opposed, motion passes.</v>

00:12:35.520 --> 00:12:38.490
That brings us to back to item three with a proposal

00:12:38.490 --> 00:12:40.320
for reconciliation review.

00:12:40.320 --> 00:12:41.610
<v ->Yep.</v>

00:12:41.610 --> 00:12:44.640
<v ->So we have a motion to direct OPDM to issue an order</v>

00:12:44.640 --> 00:12:47.370
consistent with Commissioner McAdams' memo

00:12:47.370 --> 00:12:48.600
and the discussion at the dias?

00:12:48.600 --> 00:12:50.670
<v ->So moved.</v>
<v ->Second.</v>

00:12:50.670 --> 00:12:52.650
<v ->All in favor, say aye.</v>
<v ->Aye.</v>

00:12:52.650 --> 00:12:54.270
<v ->None opposed, motion passes.</v>

00:12:54.270 --> 00:12:58.530
Thank you, again, Mr. McAdams' staff, McAdam's office.

00:12:58.530 --> 00:13:00.003
Lot of work goes into that.

00:13:02.100 --> 00:13:03.660
Next item please, sir.

00:13:03.660 --> 00:13:07.530
<v ->Item five is docket 50788, the ratepayers' appeal</v>

00:13:07.530 --> 00:13:10.830
of the decision by Windermere Oaks Water Supply Corporation

00:13:10.830 --> 00:13:12.990
to change water and sewer rates.

00:13:12.990 --> 00:13:15.810
A proposal for decision was filed on March 31st,

00:13:15.810 --> 00:13:18.120
exceptions and replies were filed,

00:13:18.120 --> 00:13:20.370
and the ALJs filed a memo on June 6th,

00:13:20.370 --> 00:13:23.370
in which they only recommended adopting the correction

00:13:23.370 --> 00:13:24.603
proposed by Windermere.

00:13:26.010 --> 00:13:27.180
<v ->Thank you, sir.</v>

00:13:27.180 --> 00:13:29.373
There seemed to be two big elements.

00:13:31.860 --> 00:13:36.660
In this case, the question of non-discriminatory,

00:13:36.660 --> 00:13:39.063
but also the question of just and reasonable.

00:13:41.713 --> 00:13:42.920
I don't know that...

00:13:44.160 --> 00:13:46.140
I don't think either one of those were necessarily

00:13:46.140 --> 00:13:49.950
satisfied, but would love to hear thoughts and comments.

00:13:49.950 --> 00:13:53.250
<v ->Yeah, so based on my review of the case,</v>

00:13:53.250 --> 00:13:56.100
I think the SOAH ALJs

00:13:56.100 --> 00:13:57.780
applied the incorrect legal standard,

00:13:57.780 --> 00:14:01.440
they only applied one of the, I guess,

00:14:01.440 --> 00:14:04.230
prongs that are to be reviewed

00:14:04.230 --> 00:14:06.903
under the Texas Water Code 13.043J.

00:14:08.820 --> 00:14:11.130
Under that provision of the water code,

00:14:11.130 --> 00:14:14.340
the appeal rates must be reviewed

00:14:14.340 --> 00:14:16.710
to see if they are unjust and unreasonable,

00:14:16.710 --> 00:14:18.270
preferential, prejudicial

00:14:18.270 --> 00:14:20.010
or discriminatory or insufficient

00:14:20.010 --> 00:14:21.210
and equitable or inconsistent

00:14:21.210 --> 00:14:23.610
with the application to each class of the customers.

00:14:23.610 --> 00:14:28.320
And so the, SOAH ALJ only looked at whether the rates

00:14:28.320 --> 00:14:31.170
were unreasonable-
<v ->Discriminatory.</v>

00:14:31.170 --> 00:14:33.900
<v ->I'm sorry, preferential prejudicial or discriminatory.</v>

00:14:33.900 --> 00:14:35.880
And they did that,

00:14:35.880 --> 00:14:38.157
I think, based on our conclusion of law

00:14:38.157 --> 00:14:42.270
and the Bear Creek Spud case, they only zeroed in

00:14:42.270 --> 00:14:44.670
on conclusion of law number eight,

00:14:44.670 --> 00:14:47.940
but didn't apply the entire requirements for review

00:14:47.940 --> 00:14:49.140
of appealed rates in this case.

00:14:49.140 --> 00:14:51.450
So I think they applied the incorrect legal standard.

00:14:51.450 --> 00:14:55.770
And I think as a matter

00:14:55.770 --> 00:14:58.537
of just sending it back to SOAH,

00:14:58.537 --> 00:14:59.700
remanding it back to SOAH

00:14:59.700 --> 00:15:03.257
so that SOAH can issue a PFD to address all

00:15:03.257 --> 00:15:08.257
of the requirements of the water code 13.043J,

00:15:08.340 --> 00:15:13.270
but also to zero in on the $171,000

00:15:14.430 --> 00:15:19.430
in legal fees that comprise some of those rates.

00:15:19.470 --> 00:15:23.730
I think as you look at the entire request,

00:15:23.730 --> 00:15:27.850
I think they're requesting about over 500,000,

00:15:27.850 --> 00:15:30.180
and 171,000 of that is our legal fees,

00:15:30.180 --> 00:15:34.530
so we need them to scrub that down and apply

00:15:34.530 --> 00:15:36.450
the correct legal standard and all their requirements

00:15:36.450 --> 00:15:38.790
in the Texas Water Code in their review of the appeal rate.

00:15:38.790 --> 00:15:41.880
<v ->So what I'm hearing is that they need to,</v>

00:15:41.880 --> 00:15:44.520
you think this needs to go back to SOAH to not only address

00:15:44.520 --> 00:15:46.980
the non-discriminatory, non-preferential,

00:15:46.980 --> 00:15:49.680
but in addition to the rest of that section of code,

00:15:49.680 --> 00:15:52.173
just and reasonable, and on top of that,

00:15:53.280 --> 00:15:55.380
take a closer look on the validity

00:15:55.380 --> 00:15:59.206
of the $171,000 in legal fees?

00:15:59.206 --> 00:16:00.330
Is that correct?
<v ->Yes. Correct.</v>

00:16:00.330 --> 00:16:03.270
<v ->Okay. That makes a lot of sense to me.</v>

00:16:03.270 --> 00:16:04.590
Other thoughts, comments?

00:16:04.590 --> 00:16:07.170
<v ->Yeah.</v>
<v ->I'm in complete agreement.</v>

00:16:07.170 --> 00:16:10.980
Those are the issues that I had and I support that.

00:16:10.980 --> 00:16:13.590
<v ->The only thing I would add is that I don't want</v>

00:16:13.590 --> 00:16:16.240
to just, not that you did this,

00:16:16.240 --> 00:16:18.960
but I don't want SOAH it to get the impression

00:16:18.960 --> 00:16:21.480
that we're checking the box on non-discriminatory,

00:16:21.480 --> 00:16:24.120
non-preferential just because there's one rate class.

00:16:24.120 --> 00:16:25.020
<v ->Right.</v>
<v ->Right.</v>

00:16:26.220 --> 00:16:28.110
<v ->There's a lot of different types of water users</v>

00:16:28.110 --> 00:16:31.140
and just one rate class does not solve

00:16:31.140 --> 00:16:33.723
the non-discriminatory issue.

00:16:35.220 --> 00:16:37.293
So just want to put that out there.

00:16:39.930 --> 00:16:43.020
All right, I think we're in good shape for a motion

00:16:43.020 --> 00:16:47.380
to remand to SOAH with instructions to address

00:16:48.900 --> 00:16:53.640
the issues Commissioner Cobos raised, specifically

00:16:53.640 --> 00:16:56.130
whether or not the rates are just and reasonable,

00:16:56.130 --> 00:17:00.753
and the validity of the $171,000 in legal fees.

00:17:02.310 --> 00:17:03.694
Anybody care to make that motion?

00:17:03.694 --> 00:17:05.101
<v ->And the issue you raised, sir.</v>

00:17:05.101 --> 00:17:08.460
<v ->And the non-discriminatory issue.</v>

00:17:08.460 --> 00:17:09.501
<v ->So moved.</v>

00:17:09.501 --> 00:17:10.334
<v ->Second.</v>
<v ->Second.</v>

00:17:10.334 --> 00:17:11.490
<v ->We got a motion and a second.</v>

00:17:11.490 --> 00:17:12.990
All in favor, say aye.
<v ->Aye.</v>

00:17:14.280 --> 00:17:15.903
<v ->None opposed. Motion passes.</v>

00:17:17.700 --> 00:17:19.260
Next item please, sir.

00:17:19.260 --> 00:17:21.750
<v ->Item six is docket 512333.</v>

00:17:21.750 --> 00:17:23.460
It's the complaint of John Soules Foods

00:17:23.460 --> 00:17:25.920
against the Southern Utilities Company.

00:17:25.920 --> 00:17:28.020
Commission considered this docket

00:17:28.020 --> 00:17:30.660
at the last open meeting and Commissioner McAdams

00:17:30.660 --> 00:17:31.983
has filed a memo.

00:17:33.480 --> 00:17:34.890
<v ->Mr. Chairman, before you begin,</v>

00:17:34.890 --> 00:17:38.100
I'm not gonna sign whatever order we have

00:17:38.100 --> 00:17:40.500
on this because I wasn't here for the last meeting.

00:17:40.500 --> 00:17:43.140
So I'm gonna let you three make the decision on this,

00:17:43.140 --> 00:17:44.490
if that's appropriate.

00:17:44.490 --> 00:17:45.323
<v ->Fair enough.</v>

00:17:45.323 --> 00:17:47.163
We'll consider you recused.

00:17:48.180 --> 00:17:50.700
Per your memo, Commissioner McAdams.

00:17:50.700 --> 00:17:52.329
<v ->Yes, sir. Take, thank you, sir.</v>

00:17:52.329 --> 00:17:53.340
<v ->Lay it out for us.</v>

00:17:53.340 --> 00:17:56.100
<v ->The memo resulted after a conference with staff</v>

00:17:56.100 --> 00:17:59.100
and in undertaking further review of the matter,

00:17:59.100 --> 00:18:01.620
i believe that certain items needed to be clarified

00:18:01.620 --> 00:18:04.032
in the order, remanding the proceeding.

00:18:04.032 --> 00:18:05.760
As detailed in the memo,

00:18:05.760 --> 00:18:08.410
I believe there are issues with the escrow agreement.

00:18:09.600 --> 00:18:14.490
The nature of the conservation charge and the source

00:18:14.490 --> 00:18:16.620
of the funds to pay the complainant

00:18:16.620 --> 00:18:19.170
that should be addressed on remand.

00:18:19.170 --> 00:18:21.510
And so therefore pending any discussion,

00:18:21.510 --> 00:18:22.837
I'd move that the Commission adopts the order,

00:18:22.837 --> 00:18:26.433
remanding the proceeding consistent with the memo.

00:18:28.890 --> 00:18:30.783
<v ->Makes sense to me. Commissioner Cobos?</v>

00:18:30.783 --> 00:18:32.940
<v ->Yes, I agree with the recommendations</v>

00:18:32.940 --> 00:18:33.773
you made in your memo,

00:18:33.773 --> 00:18:35.725
and thank you for your leadership on this issue.

00:18:35.725 --> 00:18:37.980
<v ->Oh, well, I look forward to not being a leader</v>

00:18:37.980 --> 00:18:40.813
on these issues. (laughs)

00:18:40.813 --> 00:18:41.730
<v ->(laughs) You're doing great.</v>

00:18:41.730 --> 00:18:43.007
You're got the curse of confidence there.

00:18:43.007 --> 00:18:45.474
<v ->Thank you, sir.</v>
<v ->It'll keep you going.</v>

00:18:45.474 --> 00:18:47.224
Do you have a motion?

00:18:48.120 --> 00:18:49.353
<v ->I believe I moved.</v>

00:18:50.220 --> 00:18:52.530
<v ->Pardon me.</v>
<v ->Move to adopt his order.</v>

00:18:52.530 --> 00:18:54.570
<v ->We have a motion to adopt the order.</v>

00:18:54.570 --> 00:18:56.250
Is there second?
<v ->Second</v>

00:18:56.250 --> 00:18:58.110
<v ->All in favor, say aye.</v>
<v ->Aye.</v>

00:18:58.110 --> 00:18:59.610
<v ->None opposed. Motion passes.</v>

00:18:59.610 --> 00:19:01.743
<v ->Great.</v>
<v ->Thank you, sir.</v>

00:19:01.743 --> 00:19:04.380
<v ->Thank you, sir.</v>
<v ->Next item please, sir.</v>

00:19:04.380 --> 00:19:07.230
<v ->Next item is item eight, docket 52384.</v>

00:19:07.230 --> 00:19:10.170
It's the application of Samuel Sledge to cancel

00:19:10.170 --> 00:19:14.490
an exempt utility registration, and an application

00:19:14.490 --> 00:19:17.640
of Sharon Peach to obtain an exempt utility registration.

00:19:17.640 --> 00:19:20.733
Proposal for decision was filed early May.

00:19:24.780 --> 00:19:29.460
<v ->All right, this is this unique case, I suppose.</v>

00:19:29.460 --> 00:19:30.610
Any thoughts, comments?

00:19:32.670 --> 00:19:33.570
<v ->Firstly, Mr. Chairman,</v>

00:19:33.570 --> 00:19:38.073
I appreciate and applaud staff's diligence on this matter.

00:19:39.090 --> 00:19:41.190
And I think there's a simpler path forward

00:19:41.190 --> 00:19:42.720
for the Commission.

00:19:42.720 --> 00:19:45.120
I believe that the Commission should process

00:19:45.120 --> 00:19:47.340
this application as an amendment

00:19:47.340 --> 00:19:49.470
to an existing exempt utility.

00:19:49.470 --> 00:19:52.410
The applicants are merely seeking to notify the Commission

00:19:52.410 --> 00:19:55.320
of the change in connections of the utility and the change

00:19:55.320 --> 00:19:57.870
in the name of the person that owns or manages

00:19:57.870 --> 00:20:00.120
the facilities at issue,

00:20:00.120 --> 00:20:01.830
given that there's no need

00:20:01.830 --> 00:20:04.560
to cancel the existing exempt utility registration

00:20:04.560 --> 00:20:08.280
and issue a new exempt utility registration number.

00:20:08.280 --> 00:20:11.250
As such, I would move that we should remand the proceeding

00:20:11.250 --> 00:20:12.420
for further processing.

00:20:12.420 --> 00:20:14.730
I would also ask Commission staff

00:20:14.730 --> 00:20:18.270
and duo to work with this applicant to obtain the data

00:20:18.270 --> 00:20:21.120
necessary for the Commission to update its maps

00:20:21.120 --> 00:20:25.830
with the following understanding: while maps for CCN holders

00:20:25.830 --> 00:20:28.020
must provide precise mapping data,

00:20:28.020 --> 00:20:30.900
it makes little sense to hold an exempt utility that is not

00:20:30.900 --> 00:20:35.220
required to hold a CCN to those same stringent standards.

00:20:35.220 --> 00:20:37.770
My understanding is that the map

00:20:37.770 --> 00:20:40.170
for the previous service area already exists

00:20:40.170 --> 00:20:41.790
in the Commission's mapping database,

00:20:41.790 --> 00:20:43.650
and therefore it should be possible

00:20:43.650 --> 00:20:45.393
to update the map accordingly.

00:20:47.340 --> 00:20:49.643
<v ->Agreed on all points. Do you consider that your motion?</v>

00:20:49.643 --> 00:20:51.188
<v ->I would so move.</v>

00:20:51.188 --> 00:20:52.860
<v ->All right. Thoughts, comments?</v>

00:20:52.860 --> 00:20:54.840
<v ->I'm in agreement and I'll second that motion.</v>

00:20:54.840 --> 00:20:55.860
<v ->Great.</v>
<v ->All right.</v>

00:20:55.860 --> 00:20:57.010
Before we move forward,

00:20:58.008 --> 00:20:59.670
I do want to highlight something

00:20:59.670 --> 00:21:03.120
you said that in general as a status quo,

00:21:03.120 --> 00:21:05.880
default setting, very much appreciate staff

00:21:05.880 --> 00:21:08.370
being more accurate and getting more information.

00:21:08.370 --> 00:21:10.650
This is unique in that it's such a small utility,

00:21:10.650 --> 00:21:13.950
but certainly appreciate their diligence.

00:21:13.950 --> 00:21:14.783
<v ->Absolutely.</v>

00:21:14.783 --> 00:21:16.040
<v ->As their starting point in being</v>

00:21:17.636 --> 00:21:19.650
in case a question would prefer they defer,

00:21:19.650 --> 00:21:22.090
they default to more information

00:21:22.980 --> 00:21:24.180
and more accurate information.

00:21:24.180 --> 00:21:25.013
<v ->Absolutely.</v>

00:21:25.013 --> 00:21:26.697
In my view, sir, they were correct in their process

00:21:26.697 --> 00:21:27.780
and in their reading,

00:21:27.780 --> 00:21:30.300
this is just a more expeditious way to satisfy the needs

00:21:30.300 --> 00:21:31.710
of the...
<v ->Agreed on all points.</v>

00:21:31.710 --> 00:21:32.700
<v ->Yes, sir.</v>

00:21:32.700 --> 00:21:34.477
<v ->Appreciate the diligent staff.</v>

00:21:34.477 --> 00:21:36.030
All right. We got a motion and a second.

00:21:36.030 --> 00:21:37.530
All in favor, say aye.
<v ->Aye.</v>

00:21:38.370 --> 00:21:40.860
None opposed. Motion passes.

00:21:40.860 --> 00:21:42.243
Next item please, sir.

00:21:48.515 --> 00:21:53.277
<v ->Next item is item 15, docket 53109,</v>

00:21:53.277 --> 00:21:54.780
is the application Undine Development

00:21:54.780 --> 00:21:56.583
for system improvement charges.

00:21:57.917 --> 00:21:59.673
(murmuring) Nope. Nevermind.

00:22:02.520 --> 00:22:03.633
It's all to you now.

00:22:05.722 --> 00:22:06.990
(Stephen laughs)

00:22:06.990 --> 00:22:08.820
<v ->Thank you for the articulate laying out</v>

00:22:08.820 --> 00:22:10.293
of this item, Mr. Journeay.

00:22:12.030 --> 00:22:17.030
Oh, this item has some complexity to it,

00:22:17.940 --> 00:22:20.753
but I'll start by saying

00:22:24.780 --> 00:22:28.020
that at the core of this,

00:22:28.020 --> 00:22:30.580
I think there's an element of identifying

00:22:35.040 --> 00:22:37.650
which elements of utility are doing what

00:22:37.650 --> 00:22:40.140
of the broader corporate structure.

00:22:40.140 --> 00:22:43.350
And that's an open question in my mind

00:22:43.350 --> 00:22:46.623
in this one, and leaves some questions to be answered.

00:22:48.420 --> 00:22:49.590
Thoughts, comments?

00:22:49.590 --> 00:22:54.330
<v ->Agreed the issue of what entity or entities constitute</v>

00:22:54.330 --> 00:22:56.400
the utility is a very important issue.

00:22:56.400 --> 00:23:00.450
It's an issue that I know this Commission has sought

00:23:00.450 --> 00:23:02.640
to address diligently in the past.

00:23:02.640 --> 00:23:05.400
As, you know, water utilities are set up in a variety

00:23:05.400 --> 00:23:09.570
of different arrangements and determining who the utility is

00:23:09.570 --> 00:23:12.220
in this case will drive a lot of really important

00:23:14.880 --> 00:23:19.500
issues with respect to the rate of return that's used

00:23:19.500 --> 00:23:21.660
for the system improvement charge,

00:23:21.660 --> 00:23:23.490
the rate classification of the utility,

00:23:23.490 --> 00:23:24.690
and how that they will be required

00:23:24.690 --> 00:23:26.350
to file a rate application

00:23:28.188 --> 00:23:30.540
if the SIC is approved by the Commission,

00:23:30.540 --> 00:23:32.430
the annual reports that are provided to the Commission.

00:23:32.430 --> 00:23:35.550
So figuring out who the utility is impacts

00:23:35.550 --> 00:23:40.170
very important issues that not only apply to the SIC,

00:23:40.170 --> 00:23:41.520
but going forward for the utility.

00:23:41.520 --> 00:23:44.460
So I am in agreement that that issue

00:23:44.460 --> 00:23:46.080
is a critically important issue.

00:23:46.080 --> 00:23:48.380
It needs to be added to the preliminary order.

00:23:49.800 --> 00:23:52.023
<v ->Yeah, I would agree on all those.</v>

00:23:53.490 --> 00:23:55.440
I think we can't understand rates,

00:23:55.440 --> 00:23:57.240
we can't understand charges if we don't understand

00:23:57.240 --> 00:23:59.550
what the costs are that go into that utility.

00:23:59.550 --> 00:24:01.650
So we have to have that basic understanding.

00:24:01.650 --> 00:24:05.283
I think there's another part of this utility

00:24:05.283 --> 00:24:07.650
that is actually not part of this docket,

00:24:07.650 --> 00:24:10.530
but it's a sidebar that I think there are some questions

00:24:10.530 --> 00:24:13.080
about what their rates are and what they're earning.

00:24:13.080 --> 00:24:16.350
And as as a side, we might ask

00:24:16.350 --> 00:24:18.070
the right regulatory division

00:24:19.608 --> 00:24:23.130
to look into their rates and see,

00:24:23.130 --> 00:24:25.470
and report back to us in a few weeks and see if there's

00:24:25.470 --> 00:24:27.360
a reason for a full-blown rate case,

00:24:27.360 --> 00:24:31.530
or if they feel like their rates are just and reasonable

00:24:31.530 --> 00:24:32.760
and in line.

00:24:32.760 --> 00:24:34.050
<v ->Commissioner Glotfelty,</v>

00:24:34.050 --> 00:24:36.900
I am very much in agreement with your point.

00:24:36.900 --> 00:24:39.420
I actually spent some time looking into this issue

00:24:39.420 --> 00:24:41.280
and what I discovered,

00:24:41.280 --> 00:24:44.580
and I appreciate staff's research into this issue is

00:24:44.580 --> 00:24:47.130
that the greenshore system that was acquired

00:24:47.130 --> 00:24:48.780
by Undine Development used to be owned

00:24:48.780 --> 00:24:50.793
by PK-RE Development.

00:24:51.930 --> 00:24:56.607
PK-RE Development sought rates at the TCQ

00:24:57.945 --> 00:24:59.240
and the TCQ approved rates in 2012.

00:25:02.370 --> 00:25:05.453
And those rates that the TCQ approved

00:25:06.420 --> 00:25:11.420
in a settled case constitute a rate base of, depending

00:25:12.000 --> 00:25:13.170
on how you look at the numbers,

00:25:13.170 --> 00:25:16.653
anywhere from five to $6 million,

00:25:18.390 --> 00:25:21.240
when the purchase price of the system itself

00:25:21.240 --> 00:25:22.893
was 1.8 million.

00:25:23.850 --> 00:25:27.360
So to your point, Commissioner Glotfelty,

00:25:27.360 --> 00:25:29.160
I do think that rate regulation needs

00:25:29.160 --> 00:25:33.123
to assess whether Undine Development is over-earning.

00:25:34.470 --> 00:25:38.070
I think it's extremely prudent because if we ultimately

00:25:38.070 --> 00:25:40.440
approve a system improvement charge,

00:25:40.440 --> 00:25:44.070
then Undine Development wouldn't come in for a rate case

00:25:44.070 --> 00:25:44.940
for another eight years,

00:25:44.940 --> 00:25:47.250
as they are claiming they're a class-C utility.

00:25:47.250 --> 00:25:52.250
So that's 18 years of no actual full-on rate case.

00:25:53.250 --> 00:25:56.340
And so I think we gotta be mindful as this is the first

00:25:56.340 --> 00:25:58.860
system improvement charge case before the Commission,

00:25:58.860 --> 00:26:01.830
but as additional water utilities come in,

00:26:01.830 --> 00:26:04.740
that we need to be mindful as to who the utility is

00:26:04.740 --> 00:26:07.140
and also know that if we do approve

00:26:07.140 --> 00:26:08.220
a system improvement charge,

00:26:08.220 --> 00:26:09.870
depending on what size the utility is,

00:26:09.870 --> 00:26:14.010
they may not come in for another four,

00:26:14.010 --> 00:26:17.520
six or eight years after the charge is approved.

00:26:17.520 --> 00:26:22.350
So wanna make sure that we are not approving

00:26:22.350 --> 00:26:24.355
system improvement charges

00:26:24.355 --> 00:26:27.840
that lead to over excessive over-earning.

00:26:27.840 --> 00:26:31.380
So I agree with your point Commissioner Glotfelty.

00:26:31.380 --> 00:26:33.490
I do think that rate regulation

00:26:35.580 --> 00:26:39.150
should take a closer look at Undine Development

00:26:39.150 --> 00:26:42.930
and report back to us in parallel with this process,

00:26:42.930 --> 00:26:44.730
whether or not they're over-earning.

00:26:46.140 --> 00:26:49.230
<v ->I appreciate you highlighting what are certainly</v>

00:26:49.230 --> 00:26:52.230
some big discrepancies in this case,

00:26:52.230 --> 00:26:55.980
and agree that they need to be addressed and evaluated.

00:26:55.980 --> 00:26:57.547
<v ->You're welcome.</v>

00:26:57.547 --> 00:26:59.490
(Peter laughs)
<v ->So, Mr. Chairman, I'd agree</v>

00:26:59.490 --> 00:27:03.660
on all parts, as you have implied.

00:27:03.660 --> 00:27:06.240
I don't believe we're limited in our scope as a part

00:27:06.240 --> 00:27:07.170
of this proceeding.

00:27:07.170 --> 00:27:09.450
We have a duty under the law.

00:27:09.450 --> 00:27:12.527
I do believe there needs to be some fact-finding in terms

00:27:12.527 --> 00:27:16.536
of determining the affiliation of all the arms

00:27:16.536 --> 00:27:20.730
of the proposed utility to see where we fall

00:27:20.730 --> 00:27:24.390
in the spectrum of the classes of utilities

00:27:24.390 --> 00:27:25.230
that we're talking about,

00:27:25.230 --> 00:27:27.900
and the number of years that could be impacted by any type

00:27:27.900 --> 00:27:31.380
of approved rates.

00:27:31.380 --> 00:27:35.133
And so I'm in agreement with the Commissioner.

00:27:37.740 --> 00:27:39.180
<v ->All right, so sounds like we've got</v>

00:27:39.180 --> 00:27:42.060
a number of questions that we want to ask

00:27:42.060 --> 00:27:45.423
OPDM to include in a briefing order.

00:27:48.510 --> 00:27:53.423
First is questions about asking

00:27:54.360 --> 00:27:56.520
parties to define and articulate

00:27:56.520 --> 00:27:59.820
the nature of the entities and relationship of the entities

00:27:59.820 --> 00:28:01.980
underneath Undine.

00:28:01.980 --> 00:28:05.160
<v ->Sir, we were not intended to brief that issue.</v>

00:28:05.160 --> 00:28:06.690
It's factually intensive.

00:28:06.690 --> 00:28:10.080
We just wanted to put that issue into the issues

00:28:10.080 --> 00:28:11.430
of the preliminary.
<v ->The preliminary. Okay.</v>

00:28:11.430 --> 00:28:12.690
<v ->Yes, sir.</v>
<v ->Gotcha.</v>

00:28:12.690 --> 00:28:16.470
So we've got, laid out the issues

00:28:16.470 --> 00:28:19.503
to include in the preliminary order.

00:28:21.330 --> 00:28:22.260
<v Stephen>Would you like me to run through</v>

00:28:22.260 --> 00:28:23.610
the briefing issues?

00:28:23.610 --> 00:28:24.710
<v ->That'd be excellent.</v>

00:28:25.950 --> 00:28:27.850
Summarize our discussion, if you will.

00:28:29.040 --> 00:28:30.660
<v ->One of the issues we'd like</v>

00:28:30.660 --> 00:28:33.120
to brief the parties have raised in this case, is whether

00:28:33.120 --> 00:28:37.020
the provisions related to affiliate charges apply

00:28:37.020 --> 00:28:39.420
in a proceeding for a system improvement charge.

00:28:44.070 --> 00:28:44.970
<v ->I think another one is,</v>

00:28:44.970 --> 00:28:47.400
should the utility be required to offset costs

00:28:47.400 --> 00:28:49.080
and base rates that are no longer needed

00:28:49.080 --> 00:28:50.100
because of the improvements

00:28:50.100 --> 00:28:52.710
included in the system improvement charge?

00:28:52.710 --> 00:28:55.080
And then thirdly, our developer contributions

00:28:55.080 --> 00:28:56.910
in aid of construction included

00:28:56.910 --> 00:28:58.555
in the cost for plant provided

00:28:58.555 --> 00:29:01.110
by explicit customer agreements-

00:29:01.110 --> 00:29:01.943
<v ->Agreed</v>
<v ->Or funded</v>

00:29:01.943 --> 00:29:03.630
by customer contributions in aid

00:29:03.630 --> 00:29:07.983
of construction under 16 TAC 24.76, subsection DE3,

00:29:09.660 --> 00:29:12.510
and then can cost of eligible plant

00:29:12.510 --> 00:29:14.850
for which Undine Development is seeking

00:29:14.850 --> 00:29:17.040
a system improvement charge, be considered

00:29:17.040 --> 00:29:20.070
to already be included in the utility's existing rates,

00:29:20.070 --> 00:29:22.470
just because the utility is currently over-earning

00:29:22.470 --> 00:29:25.500
through its base rates, if it is, which may be determined

00:29:25.500 --> 00:29:27.240
by any type of investigation

00:29:27.240 --> 00:29:28.073
on the part of the raised (indistinct).

00:29:28.073 --> 00:29:28.990
<v ->We'll include that</v>

00:29:30.300 --> 00:29:32.040
in the briefing.
<v ->In the briefing.</v>

00:29:32.040 --> 00:29:35.730
<v ->And that touches on the point of concern</v>

00:29:35.730 --> 00:29:36.870
you mentioned earlier.

00:29:36.870 --> 00:29:37.890
<v ->Yes. Yes.</v>

00:29:37.890 --> 00:29:40.080
So we've got four issues, as laid out,

00:29:40.080 --> 00:29:43.500
that would be part of a briefing order that would go out.

00:29:43.500 --> 00:29:46.920
And then the issue of the who's the entity

00:29:46.920 --> 00:29:48.840
or entities that constitute to utility is just

00:29:48.840 --> 00:29:50.760
an issue that will be in the preliminary order,

00:29:50.760 --> 00:29:52.140
'cause it's a fact-intensive,

00:29:52.140 --> 00:29:56.910
it needs to be developed in the record.

00:29:56.910 --> 00:29:59.250
And so that's just added to the preliminary order,

00:29:59.250 --> 00:30:02.100
but for now we're not issuing one out,

00:30:02.100 --> 00:30:04.110
but we're gonna issue out a briefing order to get briefing

00:30:04.110 --> 00:30:05.910
on those four issues.

00:30:05.910 --> 00:30:08.670
And then we can either, I guess,

00:30:08.670 --> 00:30:11.370
just wait until we get the briefs and decide

00:30:11.370 --> 00:30:14.462
those four issues and then issue out a preliminary order.

00:30:14.462 --> 00:30:15.727
<v ->That works for me if-</v>
<v ->I believe that's-</v>

00:30:15.727 --> 00:30:18.000
<v ->I thought we could probably get briefs back and get</v>

00:30:18.000 --> 00:30:21.060
this back to you at the July 14th open meeting.

00:30:21.060 --> 00:30:25.350
<v ->We'll ask for responses to briefing order by end</v>

00:30:25.350 --> 00:30:26.183
of the month.

00:30:29.190 --> 00:30:30.023
<v ->Yes, sir.</v>

00:30:30.023 --> 00:30:34.050
Around that 2 or so weeks, 14, 15 days.

00:30:34.050 --> 00:30:36.450
<v ->Let's do two weeks from today. Does that work?</v>

00:30:38.010 --> 00:30:39.270
<v ->Yes, sir.</v>
<v ->Sounds good to me.</v>

00:30:39.270 --> 00:30:40.970
<v ->Yep. Yep.</v>
<v ->Good for everybody?</v>

00:30:41.820 --> 00:30:44.120
<v ->And in parallel, the rate regulation review.</v>

00:30:49.650 --> 00:30:51.960
<v ->Do you want to do an order on that or just to have</v>

00:30:51.960 --> 00:30:54.660
your instructions here at the open meeting to do that?

00:30:56.070 --> 00:30:57.660
<v ->I think instructions.</v>
<v ->I think instructions.</v>

00:30:57.660 --> 00:31:00.060
<v ->I'm looking at Daryl right now. He acknowledges.</v>

00:31:00.060 --> 00:31:01.800
<v ->And then just for clarity,</v>

00:31:01.800 --> 00:31:05.340
because you had emphasized evaluation

00:31:05.340 --> 00:31:08.010
of Undine Development Company,

00:31:08.010 --> 00:31:10.320
which has its own rate schedule,

00:31:10.320 --> 00:31:15.047
should the earnings evaluation be limited to Undine itself?

00:31:16.320 --> 00:31:19.980
Or given the uncertainty of who we're looking at,

00:31:19.980 --> 00:31:23.318
do you want...
<v ->And including affiliates?</v>

00:31:23.318 --> 00:31:26.190
<v ->Do you wanna do one with everyone in it,</v>

00:31:26.190 --> 00:31:28.680
and one just looking at Undine Development?

00:31:28.680 --> 00:31:32.000
<v ->Yeah, let's do that because that will at least help us</v>

00:31:32.000 --> 00:31:34.263
as we review ultimately, who is the entity.

00:31:35.303 --> 00:31:37.920
<v ->Yeah, that will help inform the later decision.</v>

00:31:37.920 --> 00:31:40.950
<v ->Yeah, both of those pieces will inform the other.</v>

00:31:40.950 --> 00:31:45.360
<v ->Wait, so say that again. You want to do...</v>

00:31:45.360 --> 00:31:48.120
<v ->So we would have ask rate review</v>

00:31:48.120 --> 00:31:49.890
to do two evaluations here.

00:31:49.890 --> 00:31:53.010
One of the entire Undine system.

00:31:53.010 --> 00:31:53.843
<v ->Got it.</v>
<v ->Okay.</v>

00:31:53.843 --> 00:31:56.270
<v ->And another one, separate analysis just</v>

00:31:56.270 --> 00:31:57.840
of Undine Development Company,

00:31:57.840 --> 00:32:00.420
which has its own separate rate schedule.

00:32:00.420 --> 00:32:01.253
<v ->Got it. Yes.</v>

00:32:01.253 --> 00:32:03.030
I think that's the right thing.

00:32:03.030 --> 00:32:04.530
<v ->The actual provider</v>

00:32:04.530 --> 00:32:05.670
and then the entire corporate, correct?

00:32:05.670 --> 00:32:06.503
<v ->Yes. Yeah.</v>

00:32:06.503 --> 00:32:08.190
I think if we don't know what the entire holding company is,

00:32:08.190 --> 00:32:10.710
then understand what the costs are.

00:32:10.710 --> 00:32:12.750
<v ->And that's, I think, to Commissioner Cobos' point,</v>

00:32:12.750 --> 00:32:15.780
both like that analysis will also compliment

00:32:15.780 --> 00:32:18.120
the results of the briefings we get

00:32:18.120 --> 00:32:20.730
on definitely the character of each of these entities.

00:32:20.730 --> 00:32:22.110
<v ->Correct.</v>

00:32:22.110 --> 00:32:25.560
You could even ask them to speculate if they got everything

00:32:25.560 --> 00:32:27.702
they're asking for in this docket,

00:32:27.702 --> 00:32:31.713
would that cause them to go into an over-earning state?

00:32:33.180 --> 00:32:36.627
<v ->Well, I think we've got enough to chew on here.</v>

00:32:36.627 --> 00:32:37.460
<v Stephen>All right.</v>

00:32:37.460 --> 00:32:39.090
People just wanted me to complicate things.

00:32:39.090 --> 00:32:40.790
So I'm trying to accommodate them.

00:32:41.910 --> 00:32:44.700
<v ->We've got plenty to work with without any rampant</v>

00:32:44.700 --> 00:32:46.963
speculation from the bench there.

00:32:50.550 --> 00:32:51.383
All right.

00:32:53.190 --> 00:32:55.143
I think OPDM has everything they need.

00:32:56.190 --> 00:32:58.020
<v ->I got a feeling this thing may result in a memo,</v>

00:32:58.020 --> 00:33:00.582
so I'm not gonna make a motion on this.

00:33:00.582 --> 00:33:04.920
<v ->(laughs) There's one other issue that I think we need</v>

00:33:04.920 --> 00:33:07.650
to address, and that is that the parties

00:33:07.650 --> 00:33:09.960
wanted to limit the list of issues

00:33:09.960 --> 00:33:12.240
to the list of issues that were provided about the parties.

00:33:12.240 --> 00:33:15.970
And I think that, just as a matter of standard practice

00:33:17.100 --> 00:33:20.100
and law, that the Commission is not limited

00:33:20.100 --> 00:33:21.150
by the list of issues submitted

00:33:21.150 --> 00:33:23.294
by the parties requesting a hearing.

00:33:23.294 --> 00:33:24.600
I mean, our standard practice is

00:33:24.600 --> 00:33:27.420
to not only get lists of issues from parties,

00:33:27.420 --> 00:33:30.090
but to ensure that all the issues are addressed to allow us

00:33:30.090 --> 00:33:32.040
to issue out an order in compliance

00:33:32.040 --> 00:33:34.860
with our Commission rules and statutory authority.

00:33:34.860 --> 00:33:36.540
<v ->Would you like to add that as an issue</v>

00:33:36.540 --> 00:33:38.070
to the briefing order?

00:33:38.070 --> 00:33:39.495
<v ->No. It's just a statement.</v>

00:33:39.495 --> 00:33:41.340
<v ->It's our opinion.</v>
<v ->It's our opinion.</v>

00:33:41.340 --> 00:33:42.659
It's our conclusion on that issue.

00:33:42.659 --> 00:33:44.577
<v ->You mentioned earlier you agree with that.</v>

00:33:44.577 --> 00:33:45.813
<v ->I do agree with that, yeah.</v>
<v ->We all agree with that.</v>

00:33:45.813 --> 00:33:47.563
Yes, thank you for clarifying that.

00:33:50.460 --> 00:33:52.350
All right do-
<v ->So just a motion</v>

00:33:52.350 --> 00:33:54.030
to delegate a story issued briefing order

00:33:54.030 --> 00:33:56.010
on the issues identified.

00:33:56.010 --> 00:33:57.770
<v ->So we got a motion.</v>

00:33:57.770 --> 00:33:59.520
Do we have a second?
<v ->Second.</v>

00:33:59.520 --> 00:34:01.590
All in favor, say aye.
<v ->Aye.</v>

00:34:01.590 --> 00:34:03.990
None opposed. Motion passes.

00:34:03.990 --> 00:34:05.130
Thank y'all for work, everybody

00:34:05.130 --> 00:34:06.120
for working through all that.

00:34:06.120 --> 00:34:09.480
<v ->You bet.</v>
<v ->Next item please, sir.</v>

00:34:09.480 --> 00:34:12.660
<v ->Next its item 18, docket 5229,</v>

00:34:12.660 --> 00:34:15.379
petition of Crown Castle Fiber

00:34:15.379 --> 00:34:17.580
against Lincoln Property Company.

00:34:17.580 --> 00:34:22.230
A proposal for decision filed on April 7th of this year.

00:34:22.230 --> 00:34:23.122
<v ->Okay.</v>

00:34:23.122 --> 00:34:24.930
I think we've concluded the water portion of our agenda.

00:34:24.930 --> 00:34:26.525
Moving to communications and electric.

00:34:26.525 --> 00:34:27.750
Is that right?
<v ->Yes, sir.</v>

00:34:27.750 --> 00:34:28.583
<v ->All right.</v>

00:34:30.120 --> 00:34:31.653
Crown Castle Fiber,

00:34:34.890 --> 00:34:36.780
thoughts, comments?

00:34:36.780 --> 00:34:38.230
Seems pretty straightforward.

00:34:41.190 --> 00:34:42.870
<v ->From my position, sir,</v>

00:34:42.870 --> 00:34:45.900
I would support moving to adopt a PFD,

00:34:45.900 --> 00:34:48.480
but modify it to dismiss without prejudice,

00:34:48.480 --> 00:34:51.210
because the question of notice sufficiency

00:34:51.210 --> 00:34:53.823
does not determine the merits of a case.

00:34:54.900 --> 00:34:56.460
So I base my decision on that.

00:34:56.460 --> 00:34:58.160
<v ->Yeah, agreed. You gotta show up.</v>

00:35:00.120 --> 00:35:00.953
<v ->I agree.</v>

00:35:01.857 --> 00:35:02.821
<v ->All right. Do we have a motion?</v>

00:35:02.821 --> 00:35:03.654
<v ->So moved.</v>

00:35:03.654 --> 00:35:04.487
<v ->Second.</v>
<v ->Second.</v>

00:35:04.487 --> 00:35:06.360
<v ->All in favor, say aye.</v>
<v ->Aye.</v>

00:35:06.360 --> 00:35:08.193
<v ->None opposed. Motion passes.</v>

00:35:09.720 --> 00:35:12.960
<v ->Next item I believe is...</v>

00:35:12.960 --> 00:35:14.160
<v Stephen>Moving to electric, sir. Item 21.</v>

00:35:14.160 --> 00:35:16.953
<v ->Moving to item 21.</v>

00:35:17.820 --> 00:35:21.390
<v ->Docket number 52120, petition to Simon Property Group</v>

00:35:21.390 --> 00:35:25.110
and Simon Property Group Texas for declaratory order.

00:35:25.110 --> 00:35:28.220
A proposed declaratory order was filed on March 3rd

00:35:28.220 --> 00:35:29.053
of this year.

00:35:32.670 --> 00:35:35.610
<v ->Thank you, sir. Thoughts, comments?</v>

00:35:35.610 --> 00:35:38.910
This is multi-jurisdictional, if you will.

00:35:38.910 --> 00:35:39.743
<v ->Yeah.</v>

00:35:41.610 --> 00:35:43.950
I think the Commission should decline to issue out

00:35:43.950 --> 00:35:47.250
a declaratory order at this time because the requested

00:35:47.250 --> 00:35:48.963
declaratory ruling is premature.

00:35:49.980 --> 00:35:52.920
The Florida complaint case involves a lot of different

00:35:52.920 --> 00:35:56.223
violations of law, federal and Florida state law.

00:35:57.390 --> 00:35:59.820
In addition to the references

00:35:59.820 --> 00:36:02.973
to the violations of the Commission rules and PURA,

00:36:03.990 --> 00:36:07.470
I think the basis for issuing out a declaratory order is

00:36:07.470 --> 00:36:11.220
when is only appropriate when the entire controversy may be

00:36:11.220 --> 00:36:13.170
determined by the judicial declaration,

00:36:13.170 --> 00:36:15.630
and we would not have that impact

00:36:15.630 --> 00:36:17.850
on the Florida complaint case

00:36:17.850 --> 00:36:19.620
by issuing out a declaratory ruling.

00:36:19.620 --> 00:36:21.340
So I think it's it's premature

00:36:22.650 --> 00:36:25.020
and is not pivotal in the case.

00:36:25.020 --> 00:36:28.830
And so I would recommend that we deny the request

00:36:28.830 --> 00:36:32.460
for a declaratory ruling or order in this case,

00:36:32.460 --> 00:36:35.520
and also request that we take official notice

00:36:35.520 --> 00:36:40.347
of the Florida District Court's order to support

00:36:41.340 --> 00:36:43.313
the Commission's denial of the petition.

00:36:44.400 --> 00:36:45.930
<v ->Mr. Chairman, I agree.</v>

00:36:45.930 --> 00:36:49.140
The Florida court said the reference is not pivotal

00:36:49.140 --> 00:36:50.730
to the resolution of the claims,

00:36:50.730 --> 00:36:53.823
and so what I'm in alignment with you, Commissioner.

00:36:54.840 --> 00:36:58.380
<v ->Agreed on all points.</v>
<v ->I'm gonna agree.</v>

00:36:58.380 --> 00:36:59.670
<v ->All right.</v>

00:36:59.670 --> 00:37:02.520
Does someone wanna offer a motion that takes official notice

00:37:02.520 --> 00:37:04.410
of that Florida case?

00:37:04.410 --> 00:37:05.570
<v ->Yeah. Yes.</v>

00:37:05.570 --> 00:37:07.980
So the motion would be to deny the request

00:37:07.980 --> 00:37:10.320
for a declaratory ruling in this case

00:37:10.320 --> 00:37:12.930
and for directing Commission advising

00:37:12.930 --> 00:37:16.410
to take official notice of the district court's order

00:37:16.410 --> 00:37:18.953
to support the Commission's denial of the petition.

00:37:20.208 --> 00:37:21.886
<v ->And I would second.</v>

00:37:21.886 --> 00:37:23.490
<v ->Got a motion and a second.</v>

00:37:23.490 --> 00:37:25.260
All in favor to say aye.
<v ->Aye.</v>

00:37:25.260 --> 00:37:26.490
None opposed. Motion passes.

00:37:26.490 --> 00:37:27.990
Thank you, Commissioner Cobos.

00:37:29.670 --> 00:37:31.350
Next item please, sir.

00:37:31.350 --> 00:37:33.450
<v ->Next item's item 24,</v>

00:37:33.450 --> 00:37:35.850
but you said you wanted to take up item 25 first,

00:37:35.850 --> 00:37:39.480
so item 25 is docket 53442,

00:37:39.480 --> 00:37:41.850
application of CenterPoint Energy Houston Electric

00:37:41.850 --> 00:37:46.230
for approval to amend its distribution cost recovery factor.

00:37:46.230 --> 00:37:48.813
Before you is an appeal of SOAH order number five.

00:37:49.740 --> 00:37:51.390
<v ->Thank you, sir.</v>

00:37:51.390 --> 00:37:54.450
And we're taking up item 25 and then 24

00:37:54.450 --> 00:37:56.730
and Commissioner McAdams has a memo.

00:37:56.730 --> 00:37:58.290
Would you lay that out for us, please, sir?

00:37:58.290 --> 00:38:00.093
Yes, sir, and thank you.

00:38:01.170 --> 00:38:03.360
As I set out in my memo,

00:38:03.360 --> 00:38:07.050
I believe that CenterPoint may request recovery

00:38:07.050 --> 00:38:12.050
of section 39.918 costs through a DCRF proceeding,

00:38:12.120 --> 00:38:15.810
but not as part of a DCRF rider itself.

00:38:15.810 --> 00:38:19.590
The section 39.918 costs should be in a separate rider,

00:38:19.590 --> 00:38:23.430
in my view, from the DCRF rider.

00:38:23.430 --> 00:38:28.020
Section 39.918J in statute states that a utility may

00:38:28.020 --> 00:38:30.540
request recovery of a reasonable and necessary cost

00:38:30.540 --> 00:38:33.077
through a DCRF proceeding.

00:38:33.077 --> 00:38:34.710
<v ->Sorry.</v>
<v ->That's all right.</v>

00:38:34.710 --> 00:38:39.210
Thus section 39.918J requires

00:38:39.210 --> 00:38:42.690
that reasonableness and necessity and compliance with PURA

00:38:42.690 --> 00:38:47.220
be determined through a proceeding under 36.210 in statute

00:38:47.220 --> 00:38:49.860
or in another rate making proceeding.

00:38:49.860 --> 00:38:53.450
This is fundamentally different from section 36.210

00:38:53.450 --> 00:38:55.800
in the Commission's DCF rule.

00:38:55.800 --> 00:38:58.230
The DCRF rule contemplates the reasonableness

00:38:58.230 --> 00:39:00.960
and necessity of DCRF cost being litigated

00:39:00.960 --> 00:39:03.540
in a future base rate proceeding,

00:39:03.540 --> 00:39:05.896
unless the presiding officer finds good cause to address

00:39:05.896 --> 00:39:09.120
those issues in the DCRF.

00:39:09.120 --> 00:39:11.340
CenterPoint can still request

00:39:11.340 --> 00:39:15.390
approval of a separate rider for section 39.908 costs

00:39:15.390 --> 00:39:19.710
in this DCRF proceeding or in a standalone severed out

00:39:19.710 --> 00:39:24.270
rate making proceeding, or in a base rate case if it wishes,

00:39:24.270 --> 00:39:27.823
but either way the rider should be separate, in my view.

00:39:27.823 --> 00:39:30.750
A DCRF proceeding simply serves as a venue

00:39:30.750 --> 00:39:34.830
for requesting section 39.918 rider.

00:39:34.830 --> 00:39:37.020
Based on that, I recommend that the Commission

00:39:37.020 --> 00:39:39.510
grant the appeal in part and reverse

00:39:39.510 --> 00:39:43.380
the SOAH ALJ's decision to dismiss CenterPoint's request

00:39:43.380 --> 00:39:47.010
for section 39.918 costs from this proceeding.

00:39:47.010 --> 00:39:48.630
However, I also recommend

00:39:48.630 --> 00:39:50.190
that the Commission instructs CenterPoint

00:39:50.190 --> 00:39:52.230
to amend its application to separate

00:39:52.230 --> 00:39:56.460
the section 39.918 costs into a separate tariff rider

00:39:56.460 --> 00:39:58.290
in this proceeding.

00:39:58.290 --> 00:40:00.210
Once CenterPoint amends its application,

00:40:00.210 --> 00:40:01.350
the Commission should consider

00:40:01.350 --> 00:40:03.480
a supplemental preliminary order

00:40:03.480 --> 00:40:06.967
addressing issues under PURA 39.918.

00:40:07.950 --> 00:40:11.880
The crooks of it, Mr. Chairman, is DCRF

00:40:11.880 --> 00:40:14.520
is an expedited rate making proceeding.

00:40:14.520 --> 00:40:17.823
It is designed to provide you expedited recovery.

00:40:19.410 --> 00:40:22.830
CenterPoint has the statute, again,

00:40:22.830 --> 00:40:25.830
as per my memo, and my view is clear,

00:40:25.830 --> 00:40:28.020
they can avail themselves of it.

00:40:28.020 --> 00:40:32.850
The question is whether something with the magnitude

00:40:32.850 --> 00:40:36.900
of a mobile generation could bog down

00:40:36.900 --> 00:40:39.300
a overall DCRF proceeding

00:40:39.300 --> 00:40:41.550
in litigation, or should it be carved out

00:40:41.550 --> 00:40:44.703
to where just and reasonableness is still evaluated.

00:40:46.110 --> 00:40:48.420
And then we establish precedent moving forward

00:40:48.420 --> 00:40:51.990
to where these cases can be judiciously adjudicated,

00:40:51.990 --> 00:40:55.290
and again, processed expeditiously,

00:40:55.290 --> 00:40:56.990
which is the intent under the law.

00:40:58.290 --> 00:41:02.100
<v ->I agree and well, again,</v>

00:41:02.100 --> 00:41:05.250
highlight your point that the most important element

00:41:05.250 --> 00:41:10.250
of this is this cost recovery can be included in this DCRF.

00:41:10.260 --> 00:41:11.604
<v ->Yes, sir.</v>

00:41:11.604 --> 00:41:14.940
<v ->And then I've got a couple thoughts to add,</v>

00:41:14.940 --> 00:41:17.943
but I'll open up your thoughts and comments before.

00:41:19.110 --> 00:41:19.943
<v ->Okay. Sure.</v>

00:41:20.850 --> 00:41:23.760
So I think, you know, I generally agree

00:41:23.760 --> 00:41:24.840
with you, Commissioner McAdams.

00:41:24.840 --> 00:41:26.733
I just have a slight nuance.
<v ->Okay.</v>

00:41:27.870 --> 00:41:31.200
<v ->So with respect to the first issue, I agree.</v>

00:41:31.200 --> 00:41:34.650
I think the legislation HB 2043

00:41:34.650 --> 00:41:39.000
and PURA 39.918 are clear

00:41:39.000 --> 00:41:43.230
that a TDU may recover their mobile generation costs

00:41:43.230 --> 00:41:44.493
in a DCRF proceeding.

00:41:45.630 --> 00:41:49.020
The legislative language is clear and unambiguous.

00:41:49.020 --> 00:41:52.420
And so the question really is can they do it

00:41:53.463 --> 00:41:55.110
in this DCRF proceeding?
<v ->Mm-hmm.</v>

00:41:55.110 --> 00:41:56.630
<v ->And if so, how?</v>
<v ->Sure.</v>

00:41:58.380 --> 00:42:01.050
<v ->So from my perspective,</v>

00:42:01.050 --> 00:42:06.050
in reading 39.918 and 36.210,

00:42:06.150 --> 00:42:10.170
I believe that the, SOAH ILJ's water number five is contrary

00:42:10.170 --> 00:42:14.520
to the overarching policy goals of the legislation,

00:42:14.520 --> 00:42:16.470
which is intended to enhance the state preparedness

00:42:16.470 --> 00:42:18.480
for future weather events and great emergencies

00:42:18.480 --> 00:42:21.080
by incenting TDS to invest in the mobile generation.

00:42:22.440 --> 00:42:26.190
I think that when you read both sets of law

00:42:26.190 --> 00:42:27.420
and the Commission's rule

00:42:27.420 --> 00:42:29.793
and the Commission's order adopting the rule,

00:42:30.780 --> 00:42:35.520
and that rule being 24, I'm sorry,

00:42:35.520 --> 00:42:38.317
16 TAC 25.243,

00:42:39.450 --> 00:42:43.440
I believe that that CenterPoint

00:42:43.440 --> 00:42:47.680
and that TDUs can recover their mobile generation costs

00:42:49.050 --> 00:42:50.910
in a DCRF proceeding,

00:42:50.910 --> 00:42:53.970
and CenterPoint can do it in this DCRF proceeding

00:42:53.970 --> 00:42:56.130
through a DCRF rider,

00:42:56.130 --> 00:42:59.820
because the statutory law

00:42:59.820 --> 00:43:04.120
in 36.210 states that

00:43:05.850 --> 00:43:08.793
the allocation factors must be consistent with,

00:43:10.470 --> 00:43:12.600
that the inputs must be consistent with the allocation

00:43:12.600 --> 00:43:15.390
factors approved for each rate class in the last rate case.

00:43:15.390 --> 00:43:17.680
Now, when you go to the rule, it says

00:43:24.171 --> 00:43:25.773
that the inputs for a DCRF formula, and you bear with me,

00:43:29.130 --> 00:43:30.630
got a lot of information here,

00:43:33.480 --> 00:43:38.480
that basically, if the input in to a DCRF formula

00:43:39.870 --> 00:43:42.900
is not clear that you can rely on the information

00:43:42.900 --> 00:43:44.130
that's similar to it,

00:43:44.130 --> 00:43:46.410
so it doesn't have to be exact or the same.

00:43:46.410 --> 00:43:49.590
So when you go back and you look at the Commission's order,

00:43:49.590 --> 00:43:50.880
adopting the DCRF rule,

00:43:50.880 --> 00:43:54.090
the Commission responded to a party's argument

00:43:54.090 --> 00:43:56.880
that, the party argued, that before a utility applies

00:43:56.880 --> 00:43:59.640
for a DCRF, a contested case proceeding should be required

00:43:59.640 --> 00:44:02.940
to establish a DCRF formula inputs.

00:44:02.940 --> 00:44:05.100
The Commission responded stating that such a requirement

00:44:05.100 --> 00:44:06.960
would be inconsistent with PURA,

00:44:06.960 --> 00:44:10.440
which PURA 36.210.A1,

00:44:10.440 --> 00:44:12.660
which provides for an expedited proceeding.

00:44:12.660 --> 00:44:13.560
<v ->That's right.</v>

00:44:13.560 --> 00:44:18.227
<v ->So based on my reading of 36.210,</v>

00:44:19.260 --> 00:44:22.950
the rule and the Commission's order adopting the rule,

00:44:22.950 --> 00:44:26.250
I believe that the Commission can adopt

00:44:26.250 --> 00:44:31.020
or can approve these costs in the DCRF proceeding,

00:44:31.020 --> 00:44:32.700
through a DCRF rider,

00:44:32.700 --> 00:44:35.400
and I will also say that I think it's a cleaner way

00:44:35.400 --> 00:44:36.480
of approaching this issue.

00:44:36.480 --> 00:44:38.850
I know you wanna separate it out, and I know why,

00:44:38.850 --> 00:44:42.180
but we've never really separated out any costs

00:44:42.180 --> 00:44:44.711
in a separate rider and a DCRF proceeding.

00:44:44.711 --> 00:44:46.200
I know this is a case of first impression,

00:44:46.200 --> 00:44:49.320
but we would be setting up a framework that hasn't really

00:44:49.320 --> 00:44:53.370
been used before in a DCRF proceeding to separate out costs

00:44:53.370 --> 00:44:58.350
in a rider, and so I'm not really sure that it's necessary,

00:44:58.350 --> 00:45:00.659
and I think from my reading of the law,

00:45:00.659 --> 00:45:05.580
it's possible to just approve it in a DCRF proceeding.

00:45:05.580 --> 00:45:06.570
Of course, you know, they got parties

00:45:06.570 --> 00:45:08.490
gotta go through this proceeding,

00:45:08.490 --> 00:45:09.993
but it's possible to approve these costs

00:45:09.993 --> 00:45:12.480
in a DCRF proceeding, through a DCRF rider.

00:45:12.480 --> 00:45:16.424
And then we can reconcile in the next base rate case

00:45:16.424 --> 00:45:17.257
that CenterPoint files.
<v ->If it's-</v>

00:45:17.257 --> 00:45:18.390
<v ->Which you're required to. Absolutely.</v>

00:45:18.390 --> 00:45:20.100
There's a true up at the end of the rainbow,

00:45:20.100 --> 00:45:21.003
you know, on that.

00:45:22.020 --> 00:45:24.690
So I just worry, take an army term.

00:45:24.690 --> 00:45:27.120
This thing becomes a bullet magnet, you know,

00:45:27.120 --> 00:45:32.120
and then the whole DCRF is kind of contemplated as a part

00:45:32.850 --> 00:45:34.950
of the bullet magnet that's housed within it.

00:45:34.950 --> 00:45:39.950
And so, yeah, I get it, Commissioner.

00:45:40.170 --> 00:45:44.250
<v ->I guess another way to approach it</v>

00:45:44.250 --> 00:45:46.440
is even if it's not required

00:45:46.440 --> 00:45:49.560
to be severed in a separate rider,

00:45:49.560 --> 00:45:53.970
is there necessarily harm or foul other than setting

00:45:53.970 --> 00:45:56.220
the precedent of the ability to do that?

00:45:56.220 --> 00:46:00.450
<v ->Well, I think that we haven't adopted a rule yet.</v>

00:46:00.450 --> 00:46:02.250
My understanding is we're gonna have a proposal

00:46:02.250 --> 00:46:05.310
for publication at the beginning of the next open meeting

00:46:05.310 --> 00:46:08.580
that implements 39.918,

00:46:08.580 --> 00:46:13.580
but I think that it doesn't cause a problem necessarily,

00:46:14.340 --> 00:46:16.110
but I think it's unnecessary complication

00:46:16.110 --> 00:46:17.250
to a DCRF proceeding.

00:46:17.250 --> 00:46:19.680
We're just going to evaluate 'em as a DCRF cost

00:46:19.680 --> 00:46:21.630
as distribution invested capital,

00:46:21.630 --> 00:46:25.020
then we should just do it as all in one rider,

00:46:25.020 --> 00:46:27.777
because we're gonna end up setting precedent here,

00:46:27.777 --> 00:46:30.870
and so we're gonna end up having to evaluate the rest

00:46:30.870 --> 00:46:33.450
of these investments with separate riders,

00:46:33.450 --> 00:46:35.240
that to me...

00:46:36.120 --> 00:46:38.460
<v ->You mean the next mobile generator case,</v>

00:46:38.460 --> 00:46:39.660
or-
<v ->Sure. Sure.</v>

00:46:39.660 --> 00:46:43.530
The next time a TDU comes in with mobile generation costs

00:46:43.530 --> 00:46:44.970
in a DCRF proceeding.

00:46:44.970 --> 00:46:46.290
<v ->So is that risk isolated</v>

00:46:46.290 --> 00:46:50.130
to the mobile generator and cost recovery?

00:46:50.130 --> 00:46:51.390
Or is that precedent,

00:46:51.390 --> 00:46:54.180
are you concerned that precedent expands to a broader

00:46:54.180 --> 00:46:56.130
universe of potential cost recovery?

00:46:56.130 --> 00:46:58.140
<v ->Well, potentially, I mean, we have other types</v>

00:46:58.140 --> 00:47:01.110
of new distribution investment capital costs.

00:47:01.110 --> 00:47:02.970
I mean, are we gonna start approving different riders

00:47:02.970 --> 00:47:05.043
and DCRF proceedings for those?

00:47:07.623 --> 00:47:09.810
<v ->We're plotting a lot of new ground here.</v>

00:47:09.810 --> 00:47:10.980
It's not...

00:47:10.980 --> 00:47:12.543
All of this is very new.

00:47:14.490 --> 00:47:15.900
<v ->I think you have good thoughts on it.</v>

00:47:15.900 --> 00:47:17.670
What do you think?
<v ->Well, so,</v>

00:47:17.670 --> 00:47:20.970
I wanna step back and say, obviously,

00:47:20.970 --> 00:47:24.840
I respect the legislature passed this and allowed

00:47:24.840 --> 00:47:27.060
TDUs to get into the generation business

00:47:27.060 --> 00:47:28.710
in emergency situations.

00:47:28.710 --> 00:47:32.010
That troubles me having gone back to the unbundling

00:47:32.010 --> 00:47:35.970
of the electric system and kind of blurring those lines.

00:47:35.970 --> 00:47:37.500
This is the first time we've done that.

00:47:37.500 --> 00:47:40.500
And this is not my...

00:47:40.500 --> 00:47:43.080
I would not have done that, but the legislature has spoken.

00:47:43.080 --> 00:47:45.003
So I'm here to implement.

00:47:46.020 --> 00:47:49.110
There are some challenges that I see with this.

00:47:49.110 --> 00:47:50.760
So I'm not getting into the rider yet.

00:47:50.760 --> 00:47:53.010
I just want to give you all a thought on this.

00:47:53.010 --> 00:47:56.343
And I don't understand how it works,

00:47:57.270 --> 00:48:01.590
that a TDU puts

00:48:01.590 --> 00:48:05.220
these mobile facilities in place.

00:48:05.220 --> 00:48:10.220
They can't charge for energy and they can't be

00:48:10.350 --> 00:48:12.840
part of price formation, so how do they build?

00:48:12.840 --> 00:48:16.530
They don't even have a interaction

00:48:16.530 --> 00:48:20.280
with a QSE or a retail electric provider.

00:48:20.280 --> 00:48:25.280
And it says that a T&amp;D utility that leases facilities

00:48:26.550 --> 00:48:29.340
may not sell that electric energy or ancillary services

00:48:29.340 --> 00:48:30.930
from those facilities.

00:48:30.930 --> 00:48:32.370
So if they're not selling it,

00:48:32.370 --> 00:48:36.030
and if I look at my discussion with CenterPoint has been,

00:48:36.030 --> 00:48:38.580
you know, they want to use a mobile generation facility

00:48:38.580 --> 00:48:41.430
to help in the event that there are rolling outages.

00:48:41.430 --> 00:48:44.490
They can take a couple hundred megawatts

00:48:44.490 --> 00:48:48.790
of load offline, use these generators

00:48:50.040 --> 00:48:53.550
to roll outages where it's helping the system.

00:48:53.550 --> 00:48:55.250
And I think there's value in that,

00:48:56.250 --> 00:48:59.340
but I just don't understand the price side of it.

00:48:59.340 --> 00:49:01.620
Does that mean that every person on that circuit

00:49:01.620 --> 00:49:03.723
gets free energy during that process?

00:49:04.950 --> 00:49:08.350
Or is there there's another provision that says

00:49:16.268 --> 00:49:19.560
that there should be an adjustment of the usage

00:49:19.560 --> 00:49:21.900
for billing purposes out of the retail customers'

00:49:21.900 --> 00:49:23.580
retail electric provider?

00:49:23.580 --> 00:49:24.413
I don't know.

00:49:24.413 --> 00:49:26.790
It just seems very convoluted and hard to understand

00:49:26.790 --> 00:49:29.580
when it's just black and white on paper.

00:49:29.580 --> 00:49:32.250
That's why I would suggest and support

00:49:32.250 --> 00:49:36.420
Commissioner McAdams that just a rider,

00:49:36.420 --> 00:49:38.640
I mean, this is a brand new type of facility

00:49:38.640 --> 00:49:40.770
that's going into a DCRF.

00:49:40.770 --> 00:49:41.850
We're historically talking

00:49:41.850 --> 00:49:45.150
about poles and wires, substations,

00:49:45.150 --> 00:49:47.040
and other types of equipment,

00:49:47.040 --> 00:49:49.140
and this is a totally new piece of equipment

00:49:49.140 --> 00:49:50.610
and something very different.

00:49:50.610 --> 00:49:53.580
And I think we've seen interest at least in this docket,

00:49:53.580 --> 00:49:56.280
from the other TDUs, that they're gonna do

00:49:56.280 --> 00:49:58.440
something like this,

00:49:58.440 --> 00:50:02.280
and would think that if we can at least have those set aside

00:50:02.280 --> 00:50:06.240
now in its own rider, but in this DCRF proceeding,

00:50:06.240 --> 00:50:09.540
I would say that that for me, is the best way

00:50:09.540 --> 00:50:11.190
to evaluate those costs going forward.

00:50:11.190 --> 00:50:13.440
<v ->It's a layer of transparency.</v>

00:50:13.440 --> 00:50:15.840
<v ->So by separating into its own rider,</v>

00:50:15.840 --> 00:50:18.780
you would provide a venue for answering these questions

00:50:18.780 --> 00:50:21.180
and evaluating these issues

00:50:21.180 --> 00:50:24.540
without holding up the broader DCRF proceeding?

00:50:24.540 --> 00:50:25.890
<v ->Absolutely. Yeah.</v>

00:50:25.890 --> 00:50:28.121
And I mean, I think the language,

00:50:28.121 --> 00:50:29.730
it's pretty clear on the law.

00:50:29.730 --> 00:50:32.700
I mean, they have the authority to recover this.

00:50:32.700 --> 00:50:34.590
They have the authority to make these investments.

00:50:34.590 --> 00:50:36.723
It's not questioning that at all.

00:50:37.680 --> 00:50:42.150
And I know that there's value in this.

00:50:42.150 --> 00:50:43.852
Like I said, the blurring of the lines

00:50:43.852 --> 00:50:47.170
of the separation

00:50:49.320 --> 00:50:51.420
makes me a little nervous, but the law

00:50:51.420 --> 00:50:55.800
is passed and I'm here to implement, but...

00:50:55.800 --> 00:50:57.004
<v ->That's the most important part.</v>

00:50:57.004 --> 00:50:58.339
<v ->(laughs) That's right.</v>

00:50:58.339 --> 00:51:00.450
<v ->That all makes sense to me.</v>

00:51:00.450 --> 00:51:04.410
And those are important questions that need

00:51:04.410 --> 00:51:09.210
to be answered and have those issues articulated.

00:51:09.210 --> 00:51:11.760
I would add if you're laying out

00:51:11.760 --> 00:51:12.900
a list of questions being answered,

00:51:12.900 --> 00:51:14.643
I'll jump in and add-
<v ->Please.</v>

00:51:15.900 --> 00:51:19.050
<v ->Request some clarity on</v>

00:51:19.050 --> 00:51:20.970
when these resources should be deployed.

00:51:20.970 --> 00:51:24.780
Is it system wide outages? Is it local outages?

00:51:24.780 --> 00:51:28.110
Because I know specifically for the CenterPoint territory-

00:51:28.110 --> 00:51:30.270
<v ->Hurricane.</v>
<v ->Hurricane damage</v>

00:51:30.270 --> 00:51:34.380
to both transmission and generation assets is a big issue,

00:51:34.380 --> 00:51:36.270
so even if they're not taking load offline,

00:51:36.270 --> 00:51:39.720
they may be getting load that was removed from the system

00:51:39.720 --> 00:51:41.723
due to hurricane damage back online.

00:51:41.723 --> 00:51:43.110
<v ->Yeah.</v>

00:51:43.110 --> 00:51:44.790
<v ->So that's an important clarification</v>

00:51:44.790 --> 00:51:46.410
I think we need to make.

00:51:46.410 --> 00:51:48.240
<v ->Being a load pocket, I think that they're</v>

00:51:48.240 --> 00:51:50.100
in a pretty unique situation down there,

00:51:50.100 --> 00:51:52.440
and we ought to have that clarified.

00:51:52.440 --> 00:51:53.280
<v ->Well, the statute says</v>

00:51:53.280 --> 00:51:54.960
that it's for an extended power outage,

00:51:54.960 --> 00:51:56.850
which has lasted, or is expected

00:51:56.850 --> 00:51:58.560
to last more than eight hours.

00:51:58.560 --> 00:51:59.909
<v ->Right.</v>
<v ->So, I mean,</v>

00:51:59.909 --> 00:52:01.347
I think that's, you know,

00:52:01.347 --> 00:52:04.080
and if there's a question, I think in this case,

00:52:04.080 --> 00:52:07.350
as to whether CenterPoint used those mobile generation units

00:52:07.350 --> 00:52:09.240
in the past, or will use them in the future

00:52:09.240 --> 00:52:11.580
before their next rate case appropriately per the statute,

00:52:11.580 --> 00:52:14.640
then that could be litigated out in the base rate case,

00:52:14.640 --> 00:52:16.710
right, as you prove up your cost.

00:52:16.710 --> 00:52:18.840
Reasonable, necessary and prudent review

00:52:18.840 --> 00:52:19.860
would be conducted then.

00:52:19.860 --> 00:52:24.803
So, I mean, okay. I'll let you proceed, Chairman.

00:52:24.803 --> 00:52:26.430
<v ->Yeah, I appreciate the points.</v>

00:52:26.430 --> 00:52:27.930
I think the general sentiment is

00:52:27.930 --> 00:52:29.440
we do want it in a separate rider

00:52:29.440 --> 00:52:32.490
so we don't hold up the DCRF and we can answer,

00:52:32.490 --> 00:52:35.970
we can have some of these questions answered and litigated.

00:52:35.970 --> 00:52:38.190
I certainly, and importantly,

00:52:38.190 --> 00:52:42.900
it's expected outages of eight hours or more,

00:52:42.900 --> 00:52:46.893
the question is that if a hurricane hits Houston,

00:52:47.910 --> 00:52:51.450
but there's no system-wide problem in Abilene and Amarillo

00:52:51.450 --> 00:52:56.250
and Odessa, do we not want to deploy these generators

00:52:56.250 --> 00:52:59.220
for people who are without service in Houston?

00:52:59.220 --> 00:53:01.890
I think that's not clear in the statute.

00:53:01.890 --> 00:53:04.950
I think the intent is clear.

00:53:04.950 --> 00:53:06.540
<v ->Say that again? I didn't understand that.</v>

00:53:06.540 --> 00:53:07.730
<v ->The difference, like,</v>

00:53:07.730 --> 00:53:11.070
so Commissioner Cobos laid out the statutory requirement.

00:53:11.070 --> 00:53:14.040
These can only be deployed in the event of blackouts

00:53:14.040 --> 00:53:15.810
of eight hours or more?
<v ->Mm-hmm.</v>

00:53:15.810 --> 00:53:19.080
<v ->Or expected to last eight hours or more.</v>

00:53:19.080 --> 00:53:22.560
It's unclear if that's outages system-wide.

00:53:22.560 --> 00:53:23.887
<v ->Right.</v>
<v ->The entire ERCOT grid-</v>

00:53:23.887 --> 00:53:25.590
<v ->Right. Yeah.</v>
<v ->Or localized outages,</v>

00:53:25.590 --> 00:53:28.463
which is the key question that we need to answer.

00:53:28.463 --> 00:53:32.133
I mean, I think the intent,

00:53:33.360 --> 00:53:36.510
my understanding of the intent is they certainly want,

00:53:36.510 --> 00:53:38.700
especially in this region, these mobile generators

00:53:38.700 --> 00:53:40.863
to be deployed if there are local outages,

00:53:41.736 --> 00:53:44.070
as in particular, as a result of a hurricane

00:53:44.070 --> 00:53:46.920
that knocks out transmission resources,

00:53:46.920 --> 00:53:48.305
and I certainly would not want

00:53:48.305 --> 00:53:53.160
to deprive the people of Houston or the Gulf Coast

00:53:53.160 --> 00:53:54.960
access to these generators and access

00:53:54.960 --> 00:53:57.915
to power just because said hurricane did not

00:53:57.915 --> 00:54:00.450
create a system wide outage across ERCOT.

00:54:00.450 --> 00:54:02.190
But that's a question that needs to be answered

00:54:02.190 --> 00:54:04.500
and clarified as part of which I think

00:54:04.500 --> 00:54:05.333
is another good reason,

00:54:05.333 --> 00:54:09.480
like you said, to have this issue separated.

00:54:09.480 --> 00:54:10.380
<v ->Yeah.</v>

00:54:10.380 --> 00:54:12.120
<v ->Well, that could be addressed in the rulemaking proceeding</v>

00:54:12.120 --> 00:54:13.500
that's gonna be opened up by staff.

00:54:13.500 --> 00:54:16.890
And I agree with you, Mr. Chairman, I think, I mean,

00:54:16.890 --> 00:54:18.240
that's the whole point of letting

00:54:18.240 --> 00:54:20.820
the TDUs own the mobile generation units.

00:54:20.820 --> 00:54:23.490
They serve specific service territories that are challenged

00:54:23.490 --> 00:54:27.840
by different weather patterns or, you know,

00:54:27.840 --> 00:54:31.260
natural disasters, hurricanes, tornadoes, you name it.

00:54:31.260 --> 00:54:32.580
We've got everything in this big state.

00:54:32.580 --> 00:54:35.430
So, but as we move forward

00:54:35.430 --> 00:54:37.260
with the general policy foundation

00:54:37.260 --> 00:54:38.093
and the rule, then we can, you know,

00:54:39.780 --> 00:54:41.530
better hammer that out in the rule.

00:54:42.480 --> 00:54:43.313
<v ->We certainly can.</v>

00:54:43.313 --> 00:54:44.670
I don't know where this falls

00:54:44.670 --> 00:54:47.250
in our very crowded rulemaking schedule,

00:54:47.250 --> 00:54:48.083
but in the meantime,

00:54:48.083 --> 00:54:51.510
I certainly don't wanna hold up their ability to move

00:54:51.510 --> 00:54:55.080
forward with this recovery.
<v ->Agreed.</v>

00:54:55.080 --> 00:54:58.803
<v ->How would we get some answers to some questions about,</v>

00:55:00.480 --> 00:55:01.740
you know, kind of the mechanics

00:55:01.740 --> 00:55:06.740
of the interaction between the customer,

00:55:07.230 --> 00:55:10.493
the TDU and the retail electric provider in terms of-

00:55:10.493 --> 00:55:12.810
<v ->I suspect Mr. Smeltzer can...</v>

00:55:12.810 --> 00:55:16.260
<v ->Oh, hello.
(indistinct)</v>

00:55:16.260 --> 00:55:17.093
<v ->Oh, dear.</v>

00:55:17.093 --> 00:55:18.720
I don't usually participate in contested cases.

00:55:18.720 --> 00:55:21.180
I come up because you guys were asking questions

00:55:21.180 --> 00:55:23.820
that some of which we hadn't thought about

00:55:23.820 --> 00:55:24.653
in the rulemaking team,

00:55:24.653 --> 00:55:26.100
so I wasn't sure if I should clarify.

00:55:26.100 --> 00:55:28.080
We'll still try and keep it on for next open meeting,

00:55:28.080 --> 00:55:30.477
but we may have to, we're gonna go back

00:55:30.477 --> 00:55:32.280
and scrutinize this transcript and see

00:55:32.280 --> 00:55:33.510
if we need a little more time

00:55:33.510 --> 00:55:34.920
to make sure all these are answered.

00:55:34.920 --> 00:55:36.720
So I don't wanna weigh in on the specifics

00:55:36.720 --> 00:55:38.250
of a contested case.

00:55:38.250 --> 00:55:41.130
I mean, I think that in our meetings on the rulemaking,

00:55:41.130 --> 00:55:42.720
I can tell you that the TDUs will spend

00:55:42.720 --> 00:55:43.830
a lot of time thinking about this.

00:55:43.830 --> 00:55:45.570
So I think there are people that in this room that know

00:55:45.570 --> 00:55:47.670
the answers to some of your questions,

00:55:47.670 --> 00:55:49.140
but I wouldn't want to opine

00:55:49.140 --> 00:55:51.870
on a case that I'm not a part of.

00:55:51.870 --> 00:55:52.920
<v ->Well, it may be possible.</v>

00:55:52.920 --> 00:55:54.390
'Cause some of the things you were asking,

00:55:54.390 --> 00:55:56.997
I don't think are issues in this case.

00:55:56.997 --> 00:55:58.020
And they could be,

00:55:58.020 --> 00:56:01.463
perhaps, we could propose questions in the rule proposal

00:56:01.463 --> 00:56:03.090
to have people address them.

00:56:03.090 --> 00:56:05.820
<v ->I think I agree that they technically</v>

00:56:05.820 --> 00:56:08.550
are not part of this case.

00:56:08.550 --> 00:56:11.340
They are general questions on the implementation

00:56:11.340 --> 00:56:14.370
of the section of the law-
<v ->Right.</v>

00:56:14.370 --> 00:56:16.410
<v ->On how that functions, but think-</v>

00:56:16.410 --> 00:56:18.360
<v ->We can tackle it from both sides, too.</v>

00:56:18.360 --> 00:56:19.193
Doesn't have to be one or the other.

00:56:19.193 --> 00:56:22.203
<v ->Yeah, and think that, again, I feel that,</v>

00:56:23.580 --> 00:56:27.270
you know, these are not distribution poles,

00:56:27.270 --> 00:56:29.132
this is not a conductor.

00:56:29.132 --> 00:56:30.747
This is something that's very different

00:56:30.747 --> 00:56:32.550
and having its own line item

00:56:32.550 --> 00:56:35.310
and its own rider that's separated out

00:56:35.310 --> 00:56:36.930
so that we can see all the costs that are associated

00:56:36.930 --> 00:56:41.163
with this new statutory provision

00:56:43.140 --> 00:56:47.250
seems to me in this case to be the best path forward.

00:56:47.250 --> 00:56:49.500
<v ->Yeah, and we're on the same page, like,</v>

00:56:49.500 --> 00:56:51.910
we're on the same page with respect to,

00:56:51.910 --> 00:56:56.670
can a TDU recover these costs in a DCRF proceeding?

00:56:56.670 --> 00:56:57.753
Yes, the law says so.

00:56:59.220 --> 00:57:00.053
The question is,

00:57:00.053 --> 00:57:02.280
in this case, we agree.
<v ->Correct.</v>

00:57:02.280 --> 00:57:03.380
<v ->The question is how.</v>

00:57:04.650 --> 00:57:06.930
I certainly respect where you're coming from.

00:57:06.930 --> 00:57:07.870
<v ->Oh, and-</v>

00:57:07.870 --> 00:57:09.690
<v ->I'm just coming from my experience</v>

00:57:09.690 --> 00:57:12.600
dealing with DCRF proceedings and just reading the law

00:57:12.600 --> 00:57:15.510
and based on my review, I think that it could all

00:57:15.510 --> 00:57:17.190
just flow smoother if we just get

00:57:17.190 --> 00:57:19.533
it through a DCRF proceeding rider.

00:57:20.370 --> 00:57:22.290
It is, you know, a case of first impression

00:57:22.290 --> 00:57:25.080
to have a separate rider in a DCRF proceeding.

00:57:25.080 --> 00:57:27.720
I'm wondering mechanically how it works

00:57:27.720 --> 00:57:30.116
with a DCRF proceeding,

00:57:30.116 --> 00:57:32.247
like to the point of, we don't wanna slow down

00:57:32.247 --> 00:57:33.990
the DCRF proceeding because there are,

00:57:33.990 --> 00:57:35.820
you know, deadlines with the DCRF proceeding,

00:57:35.820 --> 00:57:38.190
but how does it work with when you have a separate rider

00:57:38.190 --> 00:57:40.350
in there, in a DCRF proceeding?

00:57:40.350 --> 00:57:41.730
I mean, you're gonna have to have CenterPoint amend

00:57:41.730 --> 00:57:43.110
their application, separate these costs

00:57:43.110 --> 00:57:44.910
into a separate rider, right?

00:57:44.910 --> 00:57:46.860
<v ->Well, I would think so.</v>

00:57:46.860 --> 00:57:49.800
So, you know, how to design that particular rate.

00:57:49.800 --> 00:57:51.660
<v ->So then is it part of the DCRF?</v>

00:57:51.660 --> 00:57:53.280
It stays in, this is this docket,

00:57:53.280 --> 00:57:56.230
but it's just an amended application that separates it out?

00:57:58.800 --> 00:58:01.650
<v ->It seems like the application needs to segregate,</v>

00:58:01.650 --> 00:58:03.270
as I understand it, to segregate

00:58:03.270 --> 00:58:08.270
the cost of all the distribution cost here

00:58:08.520 --> 00:58:11.250
and the mobile generation cost here,

00:58:11.250 --> 00:58:14.370
and the rate will be designed, the DCRF will be designed

00:58:14.370 --> 00:58:15.351
for these costs

00:58:15.351 --> 00:58:18.900
and the mobile generation rate recovery rider,

00:58:18.900 --> 00:58:22.391
whatever it's called, will recover these costs right here.

00:58:22.391 --> 00:58:25.260
They will go in parallel,

00:58:25.260 --> 00:58:30.260
and if it gets tied up, I mean,

00:58:31.290 --> 00:58:32.123
they can sever the...

00:58:32.123 --> 00:58:35.340
If the DCRF is done and they settle on all that,

00:58:35.340 --> 00:58:36.780
they can sever it out and send it back

00:58:36.780 --> 00:58:39.723
and do a final order on that and continue on.

00:58:40.650 --> 00:58:42.960
<v ->So are you relying on the...</v>

00:58:42.960 --> 00:58:45.990
Well, 'cause you're saying we'll separate it out

00:58:45.990 --> 00:58:48.183
and the rest of the distribution investment capital costs

00:58:48.183 --> 00:58:50.430
that are not related in mobile generation will be part

00:58:50.430 --> 00:58:53.380
of the DCRF rider, but then we'll have a separate rider

00:58:55.110 --> 00:58:58.637
in a DCRF proceeding in the same application.

00:58:58.637 --> 00:58:59.470
Yeah, I mean, presumably

00:58:59.470 --> 00:59:00.630
CenterPoint's already separated these costs

00:59:00.630 --> 00:59:02.760
in their application because I think they have spelled out

00:59:02.760 --> 00:59:04.050
that they have over a billion dollars

00:59:04.050 --> 00:59:05.100
worth of costs that exclude

00:59:05.100 --> 00:59:07.320
the 200 million invested in these mobile machines.

00:59:07.320 --> 00:59:11.340
<v ->I know just a smidgen of what's in their application.</v>

00:59:11.340 --> 00:59:13.020
So I don't know what the detail is.

00:59:13.020 --> 00:59:15.390
Maybe it is already in the shape that they can move forward

00:59:15.390 --> 00:59:16.560
as is, I don't know.

00:59:16.560 --> 00:59:18.450
<v ->Well, that's what I recall</v>

00:59:18.450 --> 00:59:19.980
based on my review of the application.

00:59:19.980 --> 00:59:22.410
<v ->Yeah.</v>
<v ->And so again, I'm not trying</v>

00:59:22.410 --> 00:59:23.490
to complicate this discussion up.

00:59:23.490 --> 00:59:26.490
I'm just trying to figure out, you know,

00:59:26.490 --> 00:59:30.110
how this all works mechanically and procedurally, you know,

00:59:30.110 --> 00:59:33.270
and so with the rider then, we approve a rider,

00:59:33.270 --> 00:59:35.580
ultimately, you know, we'll approve a DCRF

00:59:35.580 --> 00:59:37.830
and we will approve a rider,

00:59:37.830 --> 00:59:40.800
separate rider in a DCRF proceeding.

00:59:40.800 --> 00:59:42.750
And then when they come in for a rate case,

00:59:42.750 --> 00:59:45.600
they'll take the cost and that rider,

00:59:45.600 --> 00:59:48.180
reconcile it, you know, do their, you know,

00:59:48.180 --> 00:59:50.980
we'll do our just and reasonable prudent review process,

00:59:52.320 --> 00:59:54.580
and then it stays as a rider

00:59:58.258 --> 01:00:00.060
in the rate case application?

01:00:00.060 --> 01:00:01.668
I mean, I'm just trying to figure out-

01:00:01.668 --> 01:00:03.330
<v ->Hopefully by then we'll have our rule done with,</v>

01:00:03.330 --> 01:00:06.840
but you know, the cost recovery rider's,

01:00:06.840 --> 01:00:08.823
usually in a base rate, get zeroed out,

01:00:09.720 --> 01:00:12.000
items get moved into base rates.

01:00:12.000 --> 01:00:12.900
<v ->Okay.</v>
<v ->And then we start over</v>

01:00:12.900 --> 01:00:16.470
with the next round of recovery factors.

01:00:16.470 --> 01:00:19.080
<v ->So you're saying there's a reconsolidation of the entire</v>

01:00:19.080 --> 01:00:21.780
rate structure with all the expenses?

01:00:21.780 --> 01:00:23.730
I'm seeing a lot of head nods behind you.

01:00:23.730 --> 01:00:25.736
<v ->Yeah, I mean, that's how the other ones work.</v>

01:00:25.736 --> 01:00:30.120
<v ->Yeah.</v>
<v ->I mean,</v>

01:00:30.120 --> 01:00:33.150
I think my understanding of this, it's a new statute,

01:00:33.150 --> 01:00:34.380
we haven't gone through a case yet,

01:00:34.380 --> 01:00:36.120
but this is similar in the sense

01:00:36.120 --> 01:00:38.970
it's wanting to capture the investment in this type

01:00:38.970 --> 01:00:40.620
of facility.
<v ->Absolutely. Yeah.</v>

01:00:42.063 --> 01:00:43.860
That all makes sense to me.

01:00:43.860 --> 01:00:45.060
It may be on the front end,

01:00:45.060 --> 01:00:50.060
a little more complexity and administrative burden.

01:00:50.940 --> 01:00:53.730
I think that'll yield some clarity,

01:00:53.730 --> 01:00:57.625
both on the actual rate recovery of this new,

01:00:57.625 --> 01:01:00.990
unique element of a TDU that we've not dealt with before,

01:01:00.990 --> 01:01:04.850
and also allow a separate venue to answer some

01:01:04.850 --> 01:01:07.110
of the questions that have been laid out here.

01:01:07.110 --> 01:01:09.563
<v ->Well, it does in this particular case, sir,</v>

01:01:09.563 --> 01:01:11.919
but the Commissioner McAdams memo

01:01:11.919 --> 01:01:16.500
has a suggestion in it that you could do a separate mobile

01:01:16.500 --> 01:01:18.120
generation cost recovery rider

01:01:18.120 --> 01:01:21.150
in a standalone rate proceeding,

01:01:21.150 --> 01:01:23.610
where that's the only thing there that you're not tied

01:01:23.610 --> 01:01:25.740
to putting, you don't have to recover it

01:01:25.740 --> 01:01:27.090
in a DCRF proceeding.

01:01:27.090 --> 01:01:28.800
And if I read his memo right,

01:01:28.800 --> 01:01:30.450
he suggests you could do it here,

01:01:30.450 --> 01:01:31.710
you could do it at base rate procedure,

01:01:31.710 --> 01:01:33.380
you could just file-
<v ->You can use this</v>

01:01:33.380 --> 01:01:35.220
as a vehicle or you can carve it out.

01:01:35.220 --> 01:01:37.440
But again, the beauty of the DCRF

01:01:37.440 --> 01:01:39.981
is it expeditious recovery, you know?

01:01:39.981 --> 01:01:41.280
So-
<v ->Well, it is here right now,</v>

01:01:41.280 --> 01:01:42.587
I think is the advantage of it in this case.

01:01:42.587 --> 01:01:45.090
<v ->That's very important.</v>
<v ->Hurricane season's upon us.</v>

01:01:45.090 --> 01:01:48.909
<v ->So the statute says DCRF or other rate making proceeding,</v>

01:01:48.909 --> 01:01:51.027
so you can rely on the other rate making proceeding.

01:01:51.027 --> 01:01:55.830
The DCRF has deadlines, the rule, the statute, right?

01:01:55.830 --> 01:01:58.500
A rider, if we do it in a separate rider case,

01:01:58.500 --> 01:02:01.000
won't necessarily be tied to those same deadlines.

01:02:02.880 --> 01:02:05.253
<v ->Whatever we end up putting in our rule.</v>

01:02:08.790 --> 01:02:10.110
I mean...

01:02:10.110 --> 01:02:12.510
<v ->It's in the process.</v>

01:02:12.510 --> 01:02:15.540
<v ->If you narrow down and only looking at one particular type</v>

01:02:15.540 --> 01:02:19.440
of cost, it eliminates

01:02:19.440 --> 01:02:20.550
a lot of complications

01:02:20.550 --> 01:02:23.670
in a major rate case where you're looking

01:02:23.670 --> 01:02:24.960
at all kinds of costs.

01:02:24.960 --> 01:02:27.720
So I don't know that you can't...

01:02:27.720 --> 01:02:30.870
If you decided to write a rule and gave and gave them

01:02:30.870 --> 01:02:34.680
the option to file a separate proceeding just for this,

01:02:34.680 --> 01:02:37.980
that you could put the same type of timelines that you have

01:02:37.980 --> 01:02:40.830
in the other recovery factor cases.

01:02:40.830 --> 01:02:41.663
<v ->Something to consider in our rulemaking.</v>

01:02:41.663 --> 01:02:43.620
<v ->I don't know.</v>
<v ->So, okay.</v>

01:02:43.620 --> 01:02:46.410
So my final question then, because this is an application

01:02:46.410 --> 01:02:49.350
for a DCRF would then, okay,

01:02:49.350 --> 01:02:51.540
we would have to ask CenterPoint to amend

01:02:51.540 --> 01:02:54.900
their application, take those mobile generation costs out

01:02:54.900 --> 01:02:57.210
and file a new application

01:02:57.210 --> 01:03:01.737
for the mobile generation costs in a separate rider case?

01:03:01.737 --> 01:03:05.280
<v ->No, I just said I think his memo suggested</v>

01:03:05.280 --> 01:03:07.560
you could do that somewhere in the future.

01:03:07.560 --> 01:03:09.480
Right here, I think y'all are all on board

01:03:09.480 --> 01:03:12.000
with it being done right here, right now.

01:03:12.000 --> 01:03:15.450
If their application has the cost efficiently identified,

01:03:15.450 --> 01:03:17.820
maybe the only thing they have to amend is the title

01:03:17.820 --> 01:03:21.750
of their application, application to amend DCRF

01:03:21.750 --> 01:03:25.260
and establish mobile generation cost recovery.

01:03:25.260 --> 01:03:26.490
Maybe they don't have to do anything

01:03:26.490 --> 01:03:28.497
if their application has...

01:03:28.497 --> 01:03:30.360
I don't know, I haven't looked at the application

01:03:30.360 --> 01:03:31.510
in that kind of detail.

01:03:32.430 --> 01:03:36.120
<v ->All of those can be addressed in the rulemaking.</v>

01:03:36.120 --> 01:03:39.533
<v ->Well, and it can be addressed by the parties in the DCRF.</v>

01:03:39.533 --> 01:03:42.210
I mean, if-
<v ->They can settle.</v>

01:03:42.210 --> 01:03:44.580
<v ->If they think the costs are adequately identified,</v>

01:03:44.580 --> 01:03:46.680
that they can move forward with the review of them,

01:03:46.680 --> 01:03:48.990
I don't know why they need to do anything

01:03:48.990 --> 01:03:50.610
but just get going.
<v ->Okay.</v>

01:03:50.610 --> 01:03:52.467
Well, yeah, and I think that's right.

01:03:52.467 --> 01:03:54.760
If we move forward with this new framework

01:03:54.760 --> 01:03:57.270
and a DCRF proceeding in our rule that,

01:03:57.270 --> 01:03:58.500
I think I'm hearing from you, David,

01:03:58.500 --> 01:04:00.243
will come up in the near future,

01:04:01.980 --> 01:04:04.350
we can finish off that process by capturing

01:04:04.350 --> 01:04:07.473
that rider framework in that role.

01:04:08.670 --> 01:04:10.710
<v ->We certainly can do that.</v>

01:04:10.710 --> 01:04:12.950
As contemplated, we weren't looking at...

01:04:15.330 --> 01:04:17.370
We hadn't parsed out those details, but we certainly can.

01:04:17.370 --> 01:04:20.280
And I think Mr. Journeay has volunteered to join

01:04:20.280 --> 01:04:22.515
the rulemaking effort on this,

01:04:22.515 --> 01:04:24.905
and so that will be helpful.
(Commissioners laugh)

01:04:24.905 --> 01:04:26.759
<v ->He certainly has to.</v>
<v ->Very painful for us</v>

01:04:26.759 --> 01:04:27.858
but we'll pull through.
<v ->It's his rider proposal.</v>

01:04:27.858 --> 01:04:28.949
(Lori laughs)

01:04:28.949 --> 01:04:30.120
<v ->Well, that's the kind of teamwork</v>

01:04:30.120 --> 01:04:32.005
and collaboration we celebrate here at the PUC.

01:04:32.005 --> 01:04:34.710
(Commissioners laugh)

01:04:34.710 --> 01:04:37.650
<v ->Thank you, sir.
(Commissioners laugh)</v>

01:04:37.650 --> 01:04:39.870
I mean, there is the one complication though,

01:04:39.870 --> 01:04:42.210
of looking at the reasonables and necessity

01:04:42.210 --> 01:04:44.490
of these particular cost in this proceeding,

01:04:44.490 --> 01:04:47.750
which you don't do with the other cost in the DCRF.

01:04:47.750 --> 01:04:51.370
So there is some complication here beyond just

01:04:52.830 --> 01:04:54.870
putting some of the cost recovery

01:04:54.870 --> 01:04:55.703
in this rate and this rider

01:04:55.703 --> 01:04:57.540
and some of in this rate and this rider.

01:04:57.540 --> 01:05:00.930
<v ->So you're saying that we will or will not look</v>

01:05:00.930 --> 01:05:03.510
at the reasonable necessary of those mobile generation costs

01:05:03.510 --> 01:05:04.343
in the rider?

01:05:04.343 --> 01:05:06.240
<v ->If I read his memo, right, he says yes.</v>

01:05:06.240 --> 01:05:07.333
<v ->Yes, absolutely.</v>

01:05:07.333 --> 01:05:09.356
<v ->Okay. Okay.</v>
<v ->Oh, absolutely.</v>

01:05:09.356 --> 01:05:12.390
<v ->Okay, which is a little bit different than DCRF</v>

01:05:12.390 --> 01:05:15.445
because you only do that unless there's good cause shown.

01:05:15.445 --> 01:05:18.415
<v ->Right.</v>
<v ->So yeah.</v>

01:05:18.415 --> 01:05:20.730
I mean, I'm fine with that,

01:05:20.730 --> 01:05:23.280
but we also will do another scrub down in the rate case?

01:05:23.280 --> 01:05:25.083
<v ->It is true.</v>
<v ->Yeah, absolutely.</v>

01:05:27.120 --> 01:05:31.200
All right.
<v ->So I think we have a plan.</v>

01:05:31.200 --> 01:05:32.965
<v ->I think we're in a good spot.</v>

01:05:32.965 --> 01:05:35.970
<v ->I'm gonna have a motion.
(Lori laughs)</v>

01:05:35.970 --> 01:05:38.400
<v ->Give it a shot.</v>
<v ->All right.</v>

01:05:38.400 --> 01:05:41.498
I'd move to grant the appeal in part

01:05:41.498 --> 01:05:46.350
and reverse in part the SOAH ALJ's decision to dismiss

01:05:46.350 --> 01:05:49.440
CenterPoint's request for section 39.918 costs

01:05:49.440 --> 01:05:50.553
from this proceeding.

01:05:51.510 --> 01:05:54.240
Additionally, I'd moved to instruct

01:05:54.240 --> 01:05:55.650
that the Commission instructs CenterPoint

01:05:55.650 --> 01:05:57.210
to amend its application to separate

01:05:57.210 --> 01:06:01.080
the section 39.918 costs into a separate tariff rider

01:06:01.080 --> 01:06:02.815
in this proceeding.

01:06:02.815 --> 01:06:04.290
Is that adequate?

01:06:04.290 --> 01:06:08.370
<v ->I think it captures it.</v>
<v ->Motion stands.</v>

01:06:08.370 --> 01:06:09.203
<v ->We have a motion.</v>

01:06:09.203 --> 01:06:10.800
Do we have a second?
<v ->Second.</v>

01:06:10.800 --> 01:06:11.910
<v ->We've got a motion and a second.</v>

01:06:11.910 --> 01:06:13.950
All in favor, say aye.
<v ->Aye.</v>

01:06:13.950 --> 01:06:15.270
None opposed. Motion passes.

01:06:15.270 --> 01:06:17.700
<v ->Right. That's good.</v>
<v ->Now, I think we need</v>

01:06:17.700 --> 01:06:19.800
to do a supplemental preliminary order

01:06:19.800 --> 01:06:24.177
to deal with these issues and bring it back to you quickly.

01:06:24.177 --> 01:06:25.010
<v Peter>Yeah. Yeah.</v>

01:06:25.010 --> 01:06:28.797
<v ->Very quickly.</v>
<v ->I'm good with that. Yep.</v>

01:06:28.797 --> 01:06:31.623
<v ->Now I gotta clean up 52976, too.</v>

01:06:33.570 --> 01:06:34.410
<v ->Next.</v>

01:06:34.410 --> 01:06:36.540
<v ->So that would take us back to item 24,</v>

01:06:36.540 --> 01:06:38.790
which is docket 52976,

01:06:38.790 --> 01:06:42.300
petition of CenterPoint Energy Houston Electric to add

01:06:42.300 --> 01:06:43.950
to Chapter six of its tariff

01:06:43.950 --> 01:06:45.693
for retail delivery service.

01:06:47.070 --> 01:06:49.923
Commissioner McAdams' memo addressed this.

01:06:51.360 --> 01:06:54.180
<v ->Related topic right on cue, Commissioner McAdams.</v>

01:06:54.180 --> 01:06:56.310
<v ->Thank you, Mr. Chair.</v>
<v ->Lay out your memo for us.</v>

01:06:56.310 --> 01:06:57.660
<v ->As per the memo,</v>

01:06:57.660 --> 01:06:59.342
I would recommend that the Commission request

01:06:59.342 --> 01:07:02.550
that docket management prepare a proposal

01:07:02.550 --> 01:07:06.930
for decision dismissing docket number 52976.

01:07:06.930 --> 01:07:09.510
The possible grounds could be unnecessary duplication

01:07:09.510 --> 01:07:12.000
of proceedings or other good cause shown

01:07:12.000 --> 01:07:13.890
because it is more appropriate to address

01:07:13.890 --> 01:07:15.720
the proposed tariff language

01:07:15.720 --> 01:07:19.080
alongside other rate making issues that will already require

01:07:19.080 --> 01:07:22.200
changes to Chapter six of CenterPoint's tariff,

01:07:22.200 --> 01:07:24.480
if the Commission establishes a new rider

01:07:24.480 --> 01:07:26.973
for section 39918 cost.

01:07:27.900 --> 01:07:29.370
<v ->Which means go put it</v>

01:07:29.370 --> 01:07:30.240
in the DCRF proceedings. (laughs)

01:07:30.240 --> 01:07:33.630
<v ->That is exactly what it means. I would so move.</v>

01:07:33.630 --> 01:07:34.890
<v ->Thoughts, comments?</v>

01:07:34.890 --> 01:07:35.943
<v ->I would second that one.</v>
<v ->Second.</v>

01:07:35.943 --> 01:07:37.593
<v ->I've got a motion and a second.</v>

01:07:38.520 --> 01:07:40.620
All in favor, say aye.
<v ->Aye.</v>

01:07:40.620 --> 01:07:42.273
<v ->None opposed. Motion passes.</v>

01:07:43.170 --> 01:07:44.913
Nicely done.
<v ->Thanks.</v>

01:07:46.050 --> 01:07:49.552
<v ->On average. Your layouts are not too long.</v>

01:07:49.552 --> 01:07:52.140
<v ->We haven't gotten to that next memo yet.</v>

01:07:52.140 --> 01:07:53.677
<v ->You have another one?</v>
<v ->No, no, no.</v>

01:07:53.677 --> 01:07:56.070
It's the good one. It's the sugar.

01:07:56.070 --> 01:07:58.137
Next item, please, Mr. Journeay.

01:08:02.808 --> 01:08:05.637
<v ->Item 27 is docket 53625,</v>

01:08:05.637 --> 01:08:10.637
The application of SWEPCO for a CCN and related relief

01:08:10.920 --> 01:08:13.950
for the acquisition of generation facilities.

01:08:13.950 --> 01:08:16.623
Draft preliminary order is filed on June 10th.

01:08:17.490 --> 01:08:18.360
<v ->Thank you, sir.</v>

01:08:19.573 --> 01:08:21.120
As much as I hate to say it,

01:08:21.120 --> 01:08:23.190
this is an issue where costs incurred outside

01:08:23.190 --> 01:08:26.820
of the boundaries of Texas are potentially levied

01:08:26.820 --> 01:08:27.990
upon Texas citizens,

01:08:27.990 --> 01:08:30.830
which Commissioner McAdams has taken the lead on.

01:08:30.830 --> 01:08:33.870
So you, once again, may have some thoughts

01:08:33.870 --> 01:08:35.280
or opinions on this?

01:08:35.280 --> 01:08:36.420
<v ->Yes, sir.</v>

01:08:37.470 --> 01:08:39.330
In its proposed list of issues,

01:08:39.330 --> 01:08:41.550
SWEPCO raises the question of whether

01:08:41.550 --> 01:08:43.930
the generation facilities in question

01:08:46.200 --> 01:08:49.440
that are outside of Texas qualify as a transaction

01:08:49.440 --> 01:08:51.393
under PURA 14.101.

01:08:52.410 --> 01:08:54.423
I believe, and I welcome your thoughts,

01:08:56.213 --> 01:09:00.480
that this section is a question of law that does not need

01:09:00.480 --> 01:09:03.450
to be litigated and can be settled here.

01:09:03.450 --> 01:09:05.400
If you all agree, then I would move

01:09:05.400 --> 01:09:08.130
to have OPDM request briefing on this issue

01:09:08.130 --> 01:09:12.060
while simultaneously issuing the preliminary order.

01:09:12.060 --> 01:09:15.660
And so I would like some feedback

01:09:15.660 --> 01:09:20.313
on our scope and again, how those facilities impact us.

01:09:21.660 --> 01:09:23.400
<v ->I agree with the addition of that issue</v>

01:09:23.400 --> 01:09:24.300
to the preliminary order.

01:09:24.300 --> 01:09:27.672
And I also agree with the procedural approach.

01:09:27.672 --> 01:09:30.210
I think that the case we can go ahead and issue out

01:09:30.210 --> 01:09:34.020
a preliminary order and start addressing the issues related

01:09:34.020 --> 01:09:37.230
to the CCN, which unfortunately entail

01:09:37.230 --> 01:09:39.120
a different set of criteria.

01:09:39.120 --> 01:09:41.568
And then once we get briefing,

01:09:41.568 --> 01:09:46.568
we can make a determination on this PURA 14.101 issue,

01:09:46.860 --> 01:09:50.400
which is a separate set of criteria when you review

01:09:50.400 --> 01:09:52.980
transactions on the basis of whether or not they're

01:09:52.980 --> 01:09:54.563
in the public interest.
<v ->Right.</v>

01:09:56.250 --> 01:09:58.327
<v ->Thoughts, comments?</v>
<v ->So just,</v>

01:09:58.327 --> 01:09:59.160
I'm a little confused.

01:09:59.160 --> 01:10:01.170
Do you all want to go forward with the preliminary order

01:10:01.170 --> 01:10:04.650
or delay the preliminary order until it gets briefed?

01:10:04.650 --> 01:10:07.290
<v ->The idea would be to issue the preliminary order</v>

01:10:07.290 --> 01:10:11.550
concurrent to that have briefing on the question of law

01:10:11.550 --> 01:10:13.713
on whether we can actually impact,

01:10:15.210 --> 01:10:18.450
qualify as a transaction under the 14.101 stipulations.

01:10:18.450 --> 01:10:21.930
<v ->The draft preliminary order has issues that as if you do</v>

01:10:21.930 --> 01:10:24.180
have to address the 14.101.
<v ->Okay.</v>

01:10:24.180 --> 01:10:25.620
<v ->If you wanna do that.</v>

01:10:25.620 --> 01:10:28.230
We'd need to pull those issues out if we're gonna issue

01:10:28.230 --> 01:10:29.790
the preliminary order until after briefing.

01:10:29.790 --> 01:10:32.070
And then depending on your decision,

01:10:32.070 --> 01:10:34.410
we might have to do a supplemental to put 'em back in.

01:10:34.410 --> 01:10:36.000
<v ->Okay.</v>

01:10:36.000 --> 01:10:38.340
I just understand there needed to be a bifurcated approach

01:10:38.340 --> 01:10:40.530
'cause the question of law, so...

01:10:40.530 --> 01:10:44.760
<v ->Well, usually when we brief issues for preliminary orders,</v>

01:10:44.760 --> 01:10:47.520
they're questions of law, they're not fact issues.

01:10:47.520 --> 01:10:49.770
So I mean, this could be a quick brief

01:10:49.770 --> 01:10:51.450
into if we could do it and have

01:10:51.450 --> 01:10:53.820
it back on the July 14th open meeting.

01:10:53.820 --> 01:10:55.770
<v ->But could we approve a modified preliminary order</v>

01:10:55.770 --> 01:10:57.128
and have you just take it out,

01:10:57.128 --> 01:10:58.170
take out the portion.
<v ->We could do that.</v>

01:10:58.170 --> 01:11:00.690
We could pull all those issues out

01:11:00.690 --> 01:11:04.140
for the out-of-state facilities in brief,

01:11:04.140 --> 01:11:07.380
and then depending on your decision,

01:11:07.380 --> 01:11:08.640
if we needed to put 'em back in,

01:11:08.640 --> 01:11:10.713
we could do a supplemental order later.

01:11:13.050 --> 01:11:14.820
<v ->So we can do parallel,</v>

01:11:14.820 --> 01:11:17.655
which may require editing down the road

01:11:17.655 --> 01:11:19.443
or do a quick briefing.

01:11:20.490 --> 01:11:23.790
<v ->I'd rather have input on it sooner rather than later.</v>

01:11:23.790 --> 01:11:26.616
I mean you're kind of impacted by this stuff, too.

01:11:26.616 --> 01:11:28.620
<v ->I really, I'm not married to either approach.</v>

01:11:28.620 --> 01:11:30.934
I think, you know, mechanically,

01:11:30.934 --> 01:11:34.980
we can approve a preliminary order

01:11:34.980 --> 01:11:37.440
with changes consistent with our discussion

01:11:37.440 --> 01:11:39.480
that would remove the PURA 14.101 issues

01:11:39.480 --> 01:11:40.590
and get that process going.

01:11:40.590 --> 01:11:45.090
So the parties can start addressing the CCN criteria,

01:11:45.090 --> 01:11:46.050
in this case.

01:11:46.050 --> 01:11:50.100
And then while we await briefing, in parallel

01:11:50.100 --> 01:11:51.630
we will get briefing, and then we'll issue out

01:11:51.630 --> 01:11:55.650
a supplemental, we'll make a decision, and either, you know,

01:11:55.650 --> 01:11:57.210
issue out a supplemental preliminary order,

01:11:57.210 --> 01:11:59.850
I think at that time, that will address PURA 14.101.

01:11:59.850 --> 01:12:01.140
So we could do it in parallel.

01:12:01.140 --> 01:12:02.280
I don't think it's complicated,

01:12:02.280 --> 01:12:04.980
or we could wait and do it all at once, I'm...

01:12:04.980 --> 01:12:08.083
<v ->I guess, if it's either or is there.</v>

01:12:08.083 --> 01:12:10.620
Is there...
<v ->We make fewer mistakes</v>

01:12:10.620 --> 01:12:13.055
cutting stuff out than putting stuff in.

01:12:13.055 --> 01:12:13.947
<v ->That's true.
(indistinct)</v>

01:12:13.947 --> 01:12:15.685
<v ->And the magnitude of that feedback.</v>

01:12:15.685 --> 01:12:17.730
I mean, it impacts a lot of stuff,

01:12:17.730 --> 01:12:20.070
so again, the parallel approach

01:12:20.070 --> 01:12:22.590
would get us answers sooner rather

01:12:22.590 --> 01:12:25.563
than later for both of our purposes in MISO and SBP,

01:12:27.270 --> 01:12:29.474
just so that we proceed forward with that view.

01:12:29.474 --> 01:12:32.970
'Cause this is gonna be happening all over the country.

01:12:32.970 --> 01:12:36.281
You know, these type of readjustments of resources.

01:12:36.281 --> 01:12:37.680
<v ->Yeah, absolutely.</v>

01:12:37.680 --> 01:12:40.623
In terms of staff resources-
<v ->Yeah, no problem.</v>

01:12:41.657 --> 01:12:42.825
<v ->Is one better than the other or is it</v>

01:12:42.825 --> 01:12:45.753
a six one way, half dozen the other?

01:12:50.550 --> 01:12:53.760
<v ->Minuscule less if we briefed and waited</v>

01:12:53.760 --> 01:12:54.600
on preliminary order,

01:12:54.600 --> 01:12:57.365
but it's not really enough, I think to worry about.

01:12:57.365 --> 01:12:58.198
<v ->Okay.</v>

01:12:59.119 --> 01:13:01.770
<v ->So I have one further question,</v>

01:13:01.770 --> 01:13:04.100
if it's appropriate now.
<v ->Okay.</v>

01:13:04.100 --> 01:13:06.030
<v ->So I'm interested in this case.</v>

01:13:06.030 --> 01:13:10.380
Obviously SWEPCO wants to purchase generation facilities

01:13:10.380 --> 01:13:14.970
that are not built yet in areas of MISO

01:13:14.970 --> 01:13:17.370
that has huge amounts of congestion.

01:13:17.370 --> 01:13:19.620
And there's nothing in the preliminary order that talks

01:13:19.620 --> 01:13:24.030
about what deliverability or congestion costs might be

01:13:24.030 --> 01:13:25.620
associated with these facilities,

01:13:25.620 --> 01:13:27.570
and I'm wondering if we could at least just put a question

01:13:27.570 --> 01:13:32.570
in there that might address that as it goes to SOAH,

01:13:32.580 --> 01:13:35.130
to ensure that we understand full costs associated

01:13:35.130 --> 01:13:39.600
with transmission costs associated with the deliverability

01:13:39.600 --> 01:13:40.890
of this energy.

01:13:40.890 --> 01:13:43.110
<v ->There's a general issue in most of these cases</v>

01:13:43.110 --> 01:13:46.383
talking about effective upon other utilities and stuff.

01:13:48.390 --> 01:13:53.010
We did have one with Entergy,

01:13:53.010 --> 01:13:55.770
my memory is not serving me well, that we had

01:13:55.770 --> 01:13:57.603
a similar type of discussion,

01:14:00.000 --> 01:14:03.090
but I don't remember if we put special issues

01:14:03.090 --> 01:14:04.110
in on that one or not.

01:14:04.110 --> 01:14:05.403
I'd have to go look.

01:14:09.780 --> 01:14:11.600
But that-
<v ->Is there any...</v>

01:14:12.684 --> 01:14:13.517
Can't put it in?
<v ->Does that mean we can't</v>

01:14:13.517 --> 01:14:15.920
put it in this?
<v ->No. Well...</v>

01:14:18.553 --> 01:14:20.210
<v ->Maybe it just means to answer the question twice</v>

01:14:20.210 --> 01:14:21.333
in a different way.

01:14:23.040 --> 01:14:23.873
<v ->Sub-question.</v>

01:14:23.873 --> 01:14:26.100
<v ->You could tell us that you want that issue added</v>

01:14:26.100 --> 01:14:27.767
and we'll go do the best we can to put it in,

01:14:27.767 --> 01:14:30.570
and if we don't get it good enough when it comes

01:14:30.570 --> 01:14:32.370
for signature, then we'll have to bring it back

01:14:32.370 --> 01:14:33.690
to the next open meeting

01:14:33.690 --> 01:14:35.390
and have further discussion on it.

01:14:36.405 --> 01:14:38.970
(tone dinging)

01:14:38.970 --> 01:14:41.819
Wait a minute, the guy who might know something.

01:14:41.819 --> 01:14:43.746
(Commissioners laugh)

01:14:43.746 --> 01:14:45.720
<v ->Phone friend, I like it.</v>

01:14:45.720 --> 01:14:47.220
<v ->Lifeline.</v>

01:14:47.220 --> 01:14:48.810
<v ->Again, outstanding collaboration</v>

01:14:48.810 --> 01:14:49.885
amongst team members here.
<v ->He tells me to look</v>

01:14:49.885 --> 01:14:54.885
at (indistinct) 4B, which I guess is an issue.

01:14:55.560 --> 01:14:59.160
Well, it does talk about congestion charges

01:14:59.160 --> 01:15:00.313
for the need of it.

01:15:01.380 --> 01:15:05.040
So maybe these are the ones that we did similar ones

01:15:05.040 --> 01:15:07.203
with that Entergy case that's in my mind.

01:15:11.108 --> 01:15:13.127
And so it's on page 13 of the draft.

01:15:14.340 --> 01:15:15.173
<v Will>Oh yeah.</v>

01:15:15.173 --> 01:15:16.950
<v ->And there should be a similar one for...</v>

01:15:18.780 --> 01:15:22.860
<v ->Oh, okay. Listen, this solves my question.</v>

01:15:22.860 --> 01:15:23.693
So these are in there.

01:15:23.693 --> 01:15:25.733
So I'm totally fine.
<v ->Ah, texting's great.</v>

01:15:27.540 --> 01:15:30.870
<v ->Whoever drafted this preliminary order did a great job.</v>

01:15:30.870 --> 01:15:34.393
<v ->Well, he just mail ordered me that answer. (laughs)</v>

01:15:36.390 --> 01:15:37.650
<v ->All right, so which way do we wanna go?</v>

01:15:37.650 --> 01:15:38.730
We wanna parallel or.

01:15:38.730 --> 01:15:40.560
<v ->I believe parallel.</v>

01:15:40.560 --> 01:15:42.330
I believe sever those questions out.

01:15:42.330 --> 01:15:44.220
Let's address that through briefing.

01:15:44.220 --> 01:15:48.693
That way we have the answer back and the preliminary,

01:15:51.690 --> 01:15:53.313
the proceeding may move forward.

01:15:54.660 --> 01:15:55.830
<v ->Yeah, it's fine with me.</v>
<v ->That work, Commissioner?</v>

01:15:55.830 --> 01:15:57.090
<v ->Yes, sir.</v>

01:15:57.090 --> 01:15:58.140
<v ->Fine.</v>
<v ->All right.</v>

01:15:58.140 --> 01:15:59.865
Looking to Stephen.

01:15:59.865 --> 01:16:03.330
I would make that motion consistent with our discussion

01:16:03.330 --> 01:16:05.370
from the dias.
<v ->Fine.</v>

01:16:05.370 --> 01:16:06.630
<v ->Second.</v>

01:16:06.630 --> 01:16:08.100
<v ->Got motion and a second.</v>

01:16:08.100 --> 01:16:09.600
All in favor, say aye.
<v ->Aye.</v>

01:16:10.530 --> 01:16:13.359
<v ->None opposed. Motion passes.</v>

01:16:13.359 --> 01:16:15.807
Next item please, sir.

01:16:15.807 --> 01:16:19.410
<v ->Next item is item 28, docket 52710,</v>

01:16:19.410 --> 01:16:22.440
compliance filing for docket number 52322,

01:16:22.440 --> 01:16:26.040
which was the big ERCOT thing.

01:16:26.040 --> 01:16:28.920
Chairman Lake, you've recused yourself from these issues.

01:16:28.920 --> 01:16:29.753
<v ->I'm recused.</v>

01:16:29.753 --> 01:16:31.568
I'll turn the chair over to Commissioner McAdams.

01:16:31.568 --> 01:16:32.550
<v Will>Okay, sir.</v>

01:16:32.550 --> 01:16:34.620
<v ->Commission staff filed a memo discussing</v>

01:16:34.620 --> 01:16:37.350
procedures related to the distribution of bond proceeds

01:16:37.350 --> 01:16:38.880
and other related matters.

01:16:38.880 --> 01:16:41.310
ERCOT also filed a memo asking that the Commission

01:16:41.310 --> 01:16:43.970
give ERCOT direction on some of the issues raised

01:16:43.970 --> 01:16:47.073
in Commission staff's memo on distribution of proceeds.

01:16:48.810 --> 01:16:51.260
<v ->Okay, so you you've read it, you brought it up.</v>

01:16:53.640 --> 01:16:57.450
So I see both Commission staff and ERCOT have recently filed

01:16:57.450 --> 01:16:58.620
memos in this docket.

01:16:58.620 --> 01:17:02.703
So staff, Connie, I know you're up.

01:17:03.630 --> 01:17:04.740
If we have questions,

01:17:04.740 --> 01:17:08.220
do you envision bringing anybody else up on this?

01:17:08.220 --> 01:17:11.040
<v ->I mean, Floyd is here with me to answer</v>

01:17:11.040 --> 01:17:12.360
any further questions.
<v ->Okay.</v>

01:17:12.360 --> 01:17:15.273
If he wants to approach, we may have some on that.

01:17:16.740 --> 01:17:21.630
So if you would, walk us through the compliance framework

01:17:21.630 --> 01:17:24.120
that you have envisioned for the record

01:17:24.120 --> 01:17:26.820
for the distribution of debt obligation bond proceeds.

01:17:30.300 --> 01:17:32.610
<v ->Floyd Walker, Commission staff,</v>

01:17:32.610 --> 01:17:37.020
beginning with the receipt of the proceeds for ERCOT,

01:17:37.020 --> 01:17:38.490
according to the debt obligation order,

01:17:38.490 --> 01:17:40.860
there's the proceeds allocation table

01:17:40.860 --> 01:17:42.390
that they're gonna follow.

01:17:42.390 --> 01:17:45.570
And so they will issue the money to the LSEs.

01:17:45.570 --> 01:17:47.670
This is the general case.
<v ->Yep.</v>

01:17:47.670 --> 01:17:50.850
<v ->And then the LSEs will submit confirmation.</v>

01:17:50.850 --> 01:17:52.830
I'm sorry, they'll submit it to the QSEs.

01:17:52.830 --> 01:17:55.170
QSEs will send it to the LSEs,

01:17:55.170 --> 01:17:58.110
LSEs will submit confirmation that they've got it and lay

01:17:58.110 --> 01:17:59.640
out their plan for distributing it,

01:17:59.640 --> 01:18:01.710
according to the requirements of PURA

01:18:01.710 --> 01:18:03.603
and the debt obligation order.

01:18:05.730 --> 01:18:08.070
That's sort of the first step.

01:18:08.070 --> 01:18:12.450
And then after that process, we want a status update

01:18:12.450 --> 01:18:15.420
to show what they've done so far

01:18:15.420 --> 01:18:16.253
with the process.

01:18:16.253 --> 01:18:17.610
Have they distributed it all?

01:18:17.610 --> 01:18:20.220
And that will then allow staff

01:18:20.220 --> 01:18:21.600
to sort of audit the process,

01:18:21.600 --> 01:18:24.450
make sure the money's been spent properly.

01:18:24.450 --> 01:18:27.780
And one of the considerations going with that

01:18:27.780 --> 01:18:28.980
is sort issue of refunds.

01:18:28.980 --> 01:18:30.510
We understand that that could have the process,

01:18:30.510 --> 01:18:33.660
and so we want to get quarterly updates if they're not able

01:18:33.660 --> 01:18:37.620
to do that timely by the November 15th deadline

01:18:37.620 --> 01:18:39.240
that we've set up.

01:18:39.240 --> 01:18:40.073
<v Will>Okay. Great.</v>

01:18:40.073 --> 01:18:41.910
<v ->That's the general event of the case of there are</v>

01:18:41.910 --> 01:18:44.400
some exception to LSEs that are

01:18:44.400 --> 01:18:47.220
no longer market participants in that case,

01:18:47.220 --> 01:18:48.277
because they don't have QSEs

01:18:48.277 --> 01:18:51.150
and ERCOT wouldn't be able to give the money to those,

01:18:51.150 --> 01:18:53.007
even if, I mean, that was something we wanted to do,

01:18:53.007 --> 01:18:55.650
and so they would withhold that money pending

01:18:55.650 --> 01:18:58.470
further instruction from the Commission of that issue.

01:18:58.470 --> 01:19:01.065
<v Will>And on that, you've seen or ERCOT's filing?</v>

01:19:01.065 --> 01:19:03.180
<v ->Mm-hmm.</v>
<v ->You've seen the question</v>

01:19:03.180 --> 01:19:05.970
of future directives from us that they have

01:19:05.970 --> 01:19:10.590
posed for those out-of-market participants now.

01:19:10.590 --> 01:19:12.330
<v Floyd>Mm-hmm.</v>

01:19:12.330 --> 01:19:15.660
What are some possible solutions to that?

01:19:15.660 --> 01:19:17.943
What feedback would you offer to that filing.

01:19:19.410 --> 01:19:20.495
<v ->It's staff's position that</v>

01:19:20.495 --> 01:19:22.892
that is sort of what they would have

01:19:22.892 --> 01:19:24.150
to do in the case

01:19:24.150 --> 01:19:26.160
of the one LSE that didn't send verification,

01:19:26.160 --> 01:19:28.170
then they wouldn't be eligible to receive funds.

01:19:28.170 --> 01:19:30.480
So in that case, ERCOT wouldn't be able to issue.

01:19:30.480 --> 01:19:31.650
That's one example

01:19:31.650 --> 01:19:33.705
and the other four, because they don't have QSEs,

01:19:33.705 --> 01:19:35.430
the debt obligation order says

01:19:35.430 --> 01:19:38.010
send it to the LSE's QSE, and so if that doesn't exist,

01:19:38.010 --> 01:19:41.190
they really don't have an option but to withhold the money.

01:19:41.190 --> 01:19:43.530
And because the debt obligations going smoothly

01:19:43.530 --> 01:19:46.050
spell out exactly what to do, in that case,

01:19:46.050 --> 01:19:46.883
they hold the money.

01:19:46.883 --> 01:19:49.500
Then that's where we'll seek clarification on exactly

01:19:49.500 --> 01:19:51.567
what be the appropriate outcome on that.

01:19:51.567 --> 01:19:54.420
And there several options, but we'd open up a docket,

01:19:54.420 --> 01:19:57.090
and so all those things could be considered.

01:19:57.090 --> 01:19:58.890
<v ->Okay, so you've got several options,</v>

01:19:58.890 --> 01:20:02.070
and you wanna wait until

01:20:02.070 --> 01:20:04.473
we open up a docket to pose those?

01:20:05.670 --> 01:20:06.503
<v ->Yeah.</v>

01:20:06.503 --> 01:20:07.336
We wanna have an opportunity

01:20:07.336 --> 01:20:09.690
for the affected LSEs
(indistinct)

01:20:09.690 --> 01:20:11.040
to, you know, weigh in and say,

01:20:11.040 --> 01:20:13.080
hey, this is what they would want.

01:20:13.080 --> 01:20:16.710
And then time to have a full recommendation of what we think

01:20:16.710 --> 01:20:18.180
the best outcome would be.

01:20:18.180 --> 01:20:21.420
<v ->Yeah, it's a limited number of entities,</v>

01:20:21.420 --> 01:20:26.420
as Floyd suggested, and order to get

01:20:26.430 --> 01:20:31.170
the best outcome, and implementing this whole

01:20:31.170 --> 01:20:33.480
securitization process, we would wanna consider

01:20:33.480 --> 01:20:37.055
the specific facts surrounding each of the entities.

01:20:37.055 --> 01:20:41.322
<v Will>Okay, go ahead.</v>

01:20:41.322 --> 01:20:42.155
<v ->So, okay.</v>

01:20:42.155 --> 01:20:43.890
So first and foremost, you know,

01:20:43.890 --> 01:20:47.214
I do wanna thank Floyd and Harika for laying out

01:20:47.214 --> 01:20:50.520
a very detailed plan on how we will ensure compliance

01:20:50.520 --> 01:20:52.380
with our debt obligation order

01:20:52.380 --> 01:20:56.130
and PURA Chapter 39 Subchapter N.

01:20:56.130 --> 01:20:58.680
I think there are a couple of points

01:20:58.680 --> 01:21:00.450
of potential clarification.

01:21:00.450 --> 01:21:02.040
One is the one that ERCOT requested,

01:21:02.040 --> 01:21:03.510
and, from my perspective,

01:21:03.510 --> 01:21:05.874
I think what ERCOT wants to hear from us is

01:21:05.874 --> 01:21:09.150
that they can actually get that money

01:21:09.150 --> 01:21:10.893
and segregate it into an account.

01:21:11.730 --> 01:21:15.930
I would add that, you know, if we give that direction

01:21:15.930 --> 01:21:20.160
here today and solidify that direction or that clarity to,

01:21:20.160 --> 01:21:22.140
or that information directive to ERCOT,

01:21:22.140 --> 01:21:24.600
that we request that ERCOT,

01:21:24.600 --> 01:21:27.030
hold that money in account until the Commission issues out

01:21:27.030 --> 01:21:29.100
an order directing ERCOT to take action

01:21:29.100 --> 01:21:30.810
with the money and proceeds.

01:21:30.810 --> 01:21:34.440
It must remain segregated and held out until we issue out

01:21:34.440 --> 01:21:37.683
an order determining what we do with that money.

01:21:38.640 --> 01:21:42.450
And so am I hearing from you,

01:21:42.450 --> 01:21:44.550
I'm a little confused, but am I hearing from you

01:21:44.550 --> 01:21:47.820
that you want to open up a separate project docket

01:21:47.820 --> 01:21:50.400
to lay out specific steps on how ERCOT would hold the money?

01:21:50.400 --> 01:21:53.583
<v ->No, Commissioner Cobos.</v>
<v ->Okay. Okay.</v>

01:21:53.583 --> 01:21:55.350
<v ->It's actually how they would distribute.</v>

01:21:55.350 --> 01:21:56.906
It's the holding, we don't believe, it's for the direction.

01:21:56.906 --> 01:21:58.650
<v ->Okay, so you're-</v>
<v ->It's just that</v>

01:21:58.650 --> 01:22:00.030
not that they've held it,

01:22:00.030 --> 01:22:03.210
our order is saying you will use the money in this way

01:22:03.210 --> 01:22:05.550
of the available options that-

01:22:05.550 --> 01:22:06.878
<v ->When we issue out the order-</v>

01:22:06.878 --> 01:22:07.711
<v ->Yes.</v>

01:22:07.711 --> 01:22:08.790
<v ->We determine, you know, for certain,</v>

01:22:08.790 --> 01:22:10.200
what's in that account?

01:22:10.200 --> 01:22:12.810
<v ->Yeah, so right now it's that 24 and a half million</v>

01:22:12.810 --> 01:22:13.650
that would be withheld.

01:22:13.650 --> 01:22:15.180
And then we issue order and it would say,

01:22:15.180 --> 01:22:17.673
you know, spend it this way.

01:22:18.750 --> 01:22:21.180
<v ->Yeah, and I'm in support of providing</v>

01:22:21.180 --> 01:22:23.130
that clarity for ERCOT,

01:22:23.130 --> 01:22:27.618
that they can hold that money in a segregated account.

01:22:27.618 --> 01:22:29.618
<v ->Agreed.</v>
<v ->Pending a Commission order.</v>

01:22:30.600 --> 01:22:31.433
<v Jimmy>Yeah.</v>

01:22:33.840 --> 01:22:36.030
<v ->So any feedback on that?</v>
<v ->No, I'm fine.</v>

01:22:36.030 --> 01:22:37.957
I think that's (indistinct)
<v ->I agree.</v>

01:22:37.957 --> 01:22:39.890
The direction on holding...

01:22:41.250 --> 01:22:45.213
Okay. At this point, procedurally, what do we need on this?

01:22:46.080 --> 01:22:47.070
We don't need a motion.

01:22:47.070 --> 01:22:49.293
We don't, I mean, this is good to go.

01:22:50.610 --> 01:22:53.130
<v ->Well, it's a little unclear,</v>

01:22:53.130 --> 01:22:55.500
but I think that you've given direction.

01:22:55.500 --> 01:23:00.003
And so I assume that satisfies ERCOT's needs.

01:23:01.050 --> 01:23:04.290
<v ->And staff has also what it needs to move forward.</v>

01:23:04.290 --> 01:23:05.430
<v ->Yeah, that's my understanding.</v>

01:23:05.430 --> 01:23:06.420
<v ->Okay, great.</v>

01:23:06.420 --> 01:23:08.197
With that, Mr. Chairman, I'll hand it back to you.

01:23:08.197 --> 01:23:09.030
This is a-

01:23:09.030 --> 01:23:09.863
<v ->I have one clarifying question.</v>

01:23:09.863 --> 01:23:11.550
<v ->Okay.</v>
<v ->(laughs) Sorry.</v>

01:23:11.550 --> 01:23:15.150
I'm just wondering, and mechanically, you know,

01:23:15.150 --> 01:23:16.530
I'm wondering, you know,

01:23:16.530 --> 01:23:19.168
there's the priority list at the very back end

01:23:19.168 --> 01:23:24.168
that you've laid out, Floyd and Harika, and you know,

01:23:24.870 --> 01:23:27.300
there's a whole process that ultimately culminates

01:23:27.300 --> 01:23:30.663
with the November 1st 2023 final report.

01:23:32.490 --> 01:23:33.917
As we look at priority, you know,

01:23:33.917 --> 01:23:36.600
it's enscripted in our, laid out

01:23:36.600 --> 01:23:38.100
in our debt obligation order

01:23:38.100 --> 01:23:40.830
that the first priority is refunding and crediting

01:23:40.830 --> 01:23:41.890
the retail customers

01:23:43.230 --> 01:23:45.570
that paid or would otherwise be obligated

01:23:45.570 --> 01:23:47.610
to pay those qualifying costs.

01:23:47.610 --> 01:23:50.190
And then the second priority is payment of obligations

01:23:50.190 --> 01:23:52.050
to third party entities,

01:23:52.050 --> 01:23:55.863
and then the reimbursement to the LSEs themselves.

01:23:57.210 --> 01:23:58.983
I guess the question is, you know,

01:24:00.390 --> 01:24:05.283
as the LSEs look to credit and refund the retail customers,

01:24:06.270 --> 01:24:10.620
must they do that in full before they pay themselves

01:24:10.620 --> 01:24:13.500
and pay their parties?

01:24:13.500 --> 01:24:16.200
Now, what I'm saying is that, for example,

01:24:16.200 --> 01:24:21.200
an LSE got $5 million and they earmarked 2 million

01:24:23.190 --> 01:24:25.023
that has to be refunded or credited,

01:24:26.700 --> 01:24:28.590
and that's been earmarked and that's consistent

01:24:28.590 --> 01:24:30.140
with our debt obligation order.

01:24:31.449 --> 01:24:34.230
And the rest is gonna flow through to paying third parties

01:24:34.230 --> 01:24:35.640
and paying themselves.

01:24:35.640 --> 01:24:40.620
Must they completely conduct the entire process

01:24:40.620 --> 01:24:42.303
of refunding and crediting?

01:24:43.530 --> 01:24:45.510
They've already earmarked the money.

01:24:45.510 --> 01:24:48.720
That's what has to be earmarked as first priority.

01:24:48.720 --> 01:24:50.730
Did they have to go through the whole process of crediting

01:24:50.730 --> 01:24:55.320
and refunding before they can tap into the rest of the money

01:24:55.320 --> 01:24:59.070
to pay themselves back and pay third parties?

01:24:59.070 --> 01:25:01.370
There's a mechanical issue there that I think-

01:25:02.460 --> 01:25:03.930
<v Will>Otherwise they'll be waiting,</v>

01:25:03.930 --> 01:25:05.829
what is it?
<v ->'Til 2023.</v>

01:25:05.829 --> 01:25:08.160
<v ->Yeah, I get it.</v>
<v ->For sure.</v>

01:25:08.160 --> 01:25:11.670
<v ->I mean, they've earmarked the money, they've provided,</v>

01:25:11.670 --> 01:25:14.640
I believe in the compliance docket, invoices that state

01:25:14.640 --> 01:25:15.570
these are the customers,

01:25:15.570 --> 01:25:17.310
this is the amount they're setting it aside.

01:25:17.310 --> 01:25:18.450
They're not gonna tap into it.

01:25:18.450 --> 01:25:20.940
They're gonna exercise all efforts

01:25:20.940 --> 01:25:22.540
to refund and credit that money,

01:25:23.660 --> 01:25:28.290
and that process will go on till November 1st, 2023,

01:25:28.290 --> 01:25:29.850
'til they file that final status report

01:25:29.850 --> 01:25:31.710
and we figure out what to do if they have

01:25:31.710 --> 01:25:33.460
any remaining money in that bucket.

01:25:36.600 --> 01:25:38.820
But the rest of it that's not earmarked

01:25:38.820 --> 01:25:42.300
'cause that's not part of the refund or credit process,

01:25:42.300 --> 01:25:44.790
they can move forward with those steps.

01:25:44.790 --> 01:25:46.590
I'm just trying to get clarity here because I think there

01:25:46.590 --> 01:25:47.913
might be some ambiguity.

01:25:48.810 --> 01:25:51.120
<v ->Yeah, no, I get it.</v>

01:25:51.120 --> 01:25:53.870
In terms of the mechanics that staff had envisioned,

01:25:53.870 --> 01:25:56.313
what do you, what are you looking to see?

01:25:57.600 --> 01:25:59.520
<v ->In the example you used,</v>

01:25:59.520 --> 01:26:02.580
what we'd understand is that if there are 2 million

01:26:02.580 --> 01:26:04.800
that's available for customer refunds,

01:26:04.800 --> 01:26:07.860
that 2 million would be sort of set aside to issue refunds,

01:26:07.860 --> 01:26:09.633
but if there's money in excess of that,

01:26:09.633 --> 01:26:11.310
then they would be able to use it

01:26:11.310 --> 01:26:12.720
for paying other debt obligations.

01:26:12.720 --> 01:26:15.848
So the process wouldn't be held up until all refunds are

01:26:15.848 --> 01:26:19.590
issued to the other uses,

01:26:19.590 --> 01:26:22.320
but the thing is in terms of absolute priority,

01:26:22.320 --> 01:26:24.960
that if they can't issue all refunds,

01:26:24.960 --> 01:26:26.280
if there's nothing left after that,

01:26:26.280 --> 01:26:28.770
then they wouldn't be able to use money for other purposes.

01:26:28.770 --> 01:26:29.603
If-
<v ->Mm-hmm.</v>

01:26:29.603 --> 01:26:32.340
They'd have to hold it until we get a Commission order,

01:26:32.340 --> 01:26:33.570
we issue out a Commission order-

01:26:33.570 --> 01:26:35.910
<v ->Determining distribution.</v>
<v ->Determining, yeah,</v>

01:26:35.910 --> 01:26:37.770
what we're gonna do with that money.

01:26:37.770 --> 01:26:39.330
<v ->Yes.</v>
<v ->Okay.</v>

01:26:39.330 --> 01:26:40.740
<v ->So if it's owed,</v>

01:26:40.740 --> 01:26:43.830
holds in an account and then we order a disposition,

01:26:43.830 --> 01:26:46.893
but if it's over and above that, they access it.

01:26:48.030 --> 01:26:49.002
<v Lori>Yeah.</v>

01:26:49.002 --> 01:26:49.835
<v Floyd>That's Commission staff's understanding.</v>

01:26:49.835 --> 01:26:50.870
<v Lori>They can try to allocate it</v>

01:26:50.870 --> 01:26:51.703
all back to the customer,

01:26:51.703 --> 01:26:53.610
and if they didn't find all the customers,

01:26:53.610 --> 01:26:55.320
then they leave that money there and we figure out

01:26:55.320 --> 01:26:56.153
what to do we figure out what to do

01:26:56.153 --> 01:26:57.330
via an order.
<v ->We figure it out later.</v>

01:26:57.330 --> 01:26:58.163
<v Floyd>Yes.</v>

01:26:59.310 --> 01:27:00.498
<v ->Good with that?</v>
<v ->Yes.</v>

01:27:00.498 --> 01:27:02.430
<v ->Okay, me too.</v>
<v ->I'm good.</v>

01:27:02.430 --> 01:27:05.100
<v ->I think that settles all business on this one.</v>

01:27:05.100 --> 01:27:05.933
Mr. Chairman.

01:27:23.850 --> 01:27:27.423
<v ->All right. That concludes business on item number 28.</v>

01:27:28.770 --> 01:27:30.870
And now that we've concluded business on that,

01:27:30.870 --> 01:27:33.360
before we move on, just as a personal note,

01:27:33.360 --> 01:27:36.900
I do want to say thank you to all of the staff at the PUC

01:27:36.900 --> 01:27:41.900
who worked tirelessly on an unprecedented securitization

01:27:42.510 --> 01:27:44.370
with unprecedented complexity,

01:27:44.370 --> 01:27:48.390
and I'd also extend that thanks to the multitude of people

01:27:48.390 --> 01:27:52.020
at ERCOT who spent a lot of late nights,

01:27:52.020 --> 01:27:57.020
a lot of Sunday afternoons, and just a lot of sweat

01:27:57.450 --> 01:27:59.220
making this thing happen.

01:27:59.220 --> 01:28:02.010
There's far too many to name, but many, many thanks

01:28:02.010 --> 01:28:05.373
to the teammates on both agencies.

01:28:06.510 --> 01:28:10.920
Again, huge, huge securitization,

01:28:10.920 --> 01:28:12.000
unprecedented complexity.

01:28:12.000 --> 01:28:14.227
So many, many thanks to all the folks.

01:28:14.227 --> 01:28:15.633
They know who they are.

01:28:16.740 --> 01:28:17.890
Next item, please, sir.

01:28:19.770 --> 01:28:21.540
<v ->I'm guessing the next item is 30,</v>

01:28:21.540 --> 01:28:24.120
which is the review of Wholesale Electric Market Design

01:28:24.120 --> 01:28:25.710
in which Commissioner McAdams

01:28:25.710 --> 01:28:27.180
filed a memo last open meeting,

01:28:27.180 --> 01:28:30.600
but held it over for discussion purposes to this meeting.

01:28:30.600 --> 01:28:32.130
<v ->That is indeed our next item.</v>

01:28:32.130 --> 01:28:35.640
And, to inform, Commissioner McAdams has a memo.

01:28:35.640 --> 01:28:39.090
<v ->Hot dog. This is exciting.
(Commissioners laugh)</v>

01:28:39.090 --> 01:28:40.980
Thank you, Mr. Chairman.

01:28:40.980 --> 01:28:44.580
As I have had the privilege to sit on the RSC

01:28:44.580 --> 01:28:48.180
for Southwest Power Pool and Commissioner Cobos has had

01:28:48.180 --> 01:28:51.180
the privilege to sit on OMS for MISO

01:28:51.180 --> 01:28:53.160
and Commissioner Glotfelty seems to know

01:28:53.160 --> 01:28:54.810
just about everybody in the industry,

01:28:54.810 --> 01:28:57.300
all across this country, and you Mr. Chair

01:28:57.300 --> 01:28:59.400
try to keep the trains running on time in ERCOT,

01:28:59.400 --> 01:29:03.030
one thing has become clear, planning for resource adequacy

01:29:03.030 --> 01:29:06.810
in all grids has taken a taken on a new sense of urgency.

01:29:06.810 --> 01:29:11.810
And I think we see that with Woody Richardson's transition

01:29:11.880 --> 01:29:14.160
over to that position at ERCOT.

01:29:14.160 --> 01:29:15.243
It's very important.

01:29:16.140 --> 01:29:19.920
With my memo, I am trying to do two things.

01:29:19.920 --> 01:29:24.330
One, identify policy areas necessary to grid planning

01:29:24.330 --> 01:29:26.490
that are right for reform.

01:29:26.490 --> 01:29:30.120
And then two, draw a line among these issues,

01:29:30.120 --> 01:29:32.190
issue areas that I believe should be addressed

01:29:32.190 --> 01:29:34.890
by the Public Utility Commission through rulemaking,

01:29:34.890 --> 01:29:38.190
and then those areas that should remain delegated to ERCOT,

01:29:38.190 --> 01:29:39.990
to functionally administer the grid.

01:29:40.830 --> 01:29:43.920
I believe if we were to embark on rulemakings,

01:29:43.920 --> 01:29:46.410
as outlined in the memo this summer,

01:29:46.410 --> 01:29:49.950
a concrete framework of principles could be enshrined

01:29:49.950 --> 01:29:54.950
and ruled by this December and help to comport the 2023 CDR

01:29:55.380 --> 01:29:58.560
and SARA reports and accompanying defined metrics

01:29:58.560 --> 01:30:00.000
to a format that supports

01:30:00.000 --> 01:30:03.393
our contemplated phase two market design reforms.

01:30:04.440 --> 01:30:05.940
As this memo articulates,

01:30:05.940 --> 01:30:08.250
I believe rulemaking could address the frequency

01:30:08.250 --> 01:30:11.670
of reliability reports as it relates to the CDR,

01:30:11.670 --> 01:30:15.600
the reliability metrics or metric by which we measure

01:30:15.600 --> 01:30:19.890
the health of the system, and the imposition of a registry

01:30:19.890 --> 01:30:21.810
for large loads that must be accounted

01:30:21.810 --> 01:30:24.963
for by both the market and the grid operator.

01:30:25.830 --> 01:30:30.120
So again, we attempt to get a better fix on supplies

01:30:30.120 --> 01:30:31.053
and demand.

01:30:33.540 --> 01:30:38.190
As such, if you refer to the memo, the first component

01:30:38.190 --> 01:30:41.430
is I believe we need a seasonal CDR,

01:30:41.430 --> 01:30:44.880
because the report is not just used by the market.

01:30:44.880 --> 01:30:47.250
It's very important to us.

01:30:47.250 --> 01:30:49.230
It's important to the legislature.

01:30:49.230 --> 01:30:52.050
We use it to determine a probability

01:30:52.050 --> 01:30:53.850
of scarcity in coming years.

01:30:53.850 --> 01:30:57.210
And I speak to the CDR specifically.

01:30:57.210 --> 01:30:59.520
By having a CDR on a seasonal basis

01:30:59.520 --> 01:31:03.690
rather than a twice-a-year method we use now,

01:31:03.690 --> 01:31:06.540
the Commission would be able to see when expected projects

01:31:06.540 --> 01:31:10.260
may be reasonably expected to become commercially available,

01:31:10.260 --> 01:31:12.480
specifically in the spring and fall.

01:31:12.480 --> 01:31:13.860
Okay?

01:31:13.860 --> 01:31:16.590
Which has become periods of tight conditions on the system

01:31:16.590 --> 01:31:18.360
that are frequently experienced due

01:31:18.360 --> 01:31:19.893
to plant maintenance cycles.

01:31:20.970 --> 01:31:25.773
I'd like to know, given this potential restructuring here,

01:31:27.000 --> 01:31:28.470
on a more granular basis,

01:31:28.470 --> 01:31:31.650
that we have more generation coming online in future years

01:31:31.650 --> 01:31:33.213
during specific periods.

01:31:34.710 --> 01:31:37.233
This report could help inform our POC,

01:31:38.610 --> 01:31:41.160
maintenance scheduler process at ERCOT,

01:31:41.160 --> 01:31:42.910
which is currently being formulated

01:31:43.770 --> 01:31:45.573
on a potential five-year basis.

01:31:47.340 --> 01:31:50.040
And I can hold there 'cause that's the first component,

01:31:50.040 --> 01:31:55.040
but I welcome any input in that aspect.

01:31:55.110 --> 01:32:00.110
Secondly, as contemplated in the memo, hard timelines,

01:32:00.150 --> 01:32:02.160
hard no-later-than dates,

01:32:02.160 --> 01:32:06.960
I suggested imposing those dates in rule

01:32:06.960 --> 01:32:11.490
that would comport to the emergency planning,

01:32:11.490 --> 01:32:15.510
the emergency condition planning process that is

01:32:15.510 --> 01:32:17.640
contemplated by our TDSPs.

01:32:17.640 --> 01:32:20.050
Again, they always have certain

01:32:21.870 --> 01:32:24.100
planning cycles where they try to have

01:32:25.440 --> 01:32:28.950
the key number of megawatts allocated

01:32:28.950 --> 01:32:31.140
so that they know, going into winter,

01:32:31.140 --> 01:32:33.450
that they can adequately rotate outages,

01:32:33.450 --> 01:32:37.350
given a certain threat condition.

01:32:37.350 --> 01:32:42.350
So CDR could be conformed to that schedule,

01:32:42.960 --> 01:32:45.990
and ERCOT staff could be held accountable.

01:32:45.990 --> 01:32:50.970
It gives certainty to the market and decreases ambiguity

01:32:50.970 --> 01:32:54.330
about when these reports become issued.

01:32:54.330 --> 01:32:57.093
But with that, I'll open it up to the Dias. All ears.

01:32:58.560 --> 01:33:00.450
<v ->Thoughts, comments?</v>
<v ->Yeah.</v>

01:33:00.450 --> 01:33:04.680
I would say I appreciate the efforts

01:33:04.680 --> 01:33:07.140
that you've done on CDR SARA.

01:33:07.140 --> 01:33:09.570
I know you've worked with Woody and ERCOT,

01:33:09.570 --> 01:33:14.220
and I think the goal of this process is admirable

01:33:14.220 --> 01:33:19.220
and necessary that we get a new set of reports

01:33:19.350 --> 01:33:20.670
that are filed at the right time

01:33:20.670 --> 01:33:22.200
to give us the right information.

01:33:22.200 --> 01:33:24.873
The system's changing and we need to have that.

01:33:25.740 --> 01:33:27.930
The there's only one thing that I struggle with,

01:33:27.930 --> 01:33:28.850
and it's not...

01:33:30.840 --> 01:33:32.670
This is a much more general issue.

01:33:32.670 --> 01:33:34.650
This deals with phase two, this deals

01:33:34.650 --> 01:33:36.282
with all of this thing,

01:33:36.282 --> 01:33:40.260
and that is the resiliency and reliability metric.

01:33:40.260 --> 01:33:41.093
<v ->Sure.</v>

01:33:41.093 --> 01:33:43.530
<v ->Because I just don't know</v>

01:33:43.530 --> 01:33:45.630
what that metric is going forward.

01:33:45.630 --> 01:33:49.230
Is it, you know, one in 10?

01:33:49.230 --> 01:33:52.860
So, you know, a loss of load expectation, you know,

01:33:52.860 --> 01:33:53.693
does that...

01:33:54.815 --> 01:33:57.300
We don't even know what's acceptable in that space.

01:33:57.300 --> 01:33:58.950
You know, we want it as low as possible,

01:33:58.950 --> 01:34:02.490
but as we are changing from a capacity-based system

01:34:02.490 --> 01:34:05.040
to an energy-based system, which I believe

01:34:05.040 --> 01:34:06.423
is what's happening.

01:34:08.490 --> 01:34:12.690
Some of the old standards and metrics don't make sense,

01:34:12.690 --> 01:34:15.180
or they're not as relevant, they still may be relevant

01:34:15.180 --> 01:34:16.560
and they still may need to be

01:34:16.560 --> 01:34:19.860
reported, but there may be a whole nother set of them.

01:34:19.860 --> 01:34:21.960
So I know your effort here is to,

01:34:21.960 --> 01:34:23.700
let's try to fix, let's throw those out

01:34:23.700 --> 01:34:27.630
to the market participants and see what

01:34:27.630 --> 01:34:30.090
the right one is or what the right set of them is.

01:34:30.090 --> 01:34:31.560
And I agree with that.

01:34:31.560 --> 01:34:36.560
I just, I hope we can come to some agreement that,

01:34:36.600 --> 01:34:40.260
or some belief that, well, maybe I should say it this way.

01:34:40.260 --> 01:34:44.130
I just don't believe that one metric for reliability

01:34:44.130 --> 01:34:47.040
or resiliency is what's is necessary.

01:34:47.040 --> 01:34:48.600
I think we're gonna need more of that.

01:34:48.600 --> 01:34:49.650
<v ->Maybe. Yeah.</v>
<v ->So.</v>

01:34:51.980 --> 01:34:53.940
<v ->So a clarifying question.</v>
<v ->Yeah, go ahead.</v>

01:34:53.940 --> 01:34:57.240
<v ->How do you envision the seasonal quarterly CDR</v>

01:34:57.240 --> 01:35:00.000
interplaying with the SARA report position?

01:35:00.000 --> 01:35:04.620
<v ->So was robust conversation</v>

01:35:04.620 --> 01:35:07.530
about the need for, okay,

01:35:07.530 --> 01:35:09.840
do we just have one report moving forward

01:35:09.840 --> 01:35:11.910
on a monthly basis?

01:35:11.910 --> 01:35:15.210
There is clear value in having a separation

01:35:15.210 --> 01:35:18.177
of a long-term capacity demand and reserves report

01:35:18.177 --> 01:35:20.850
and a true resource adequacy report,

01:35:20.850 --> 01:35:23.670
well out into the future on a five-year basis.

01:35:23.670 --> 01:35:26.970
The SARA still has value in that it contemplates

01:35:26.970 --> 01:35:29.130
various scenarios,

01:35:29.130 --> 01:35:32.500
especially in the near-term as ERCOT approaches

01:35:33.720 --> 01:35:37.023
certain conditions, certain weather-based conditions,

01:35:38.880 --> 01:35:42.210
ERCOT believes, and after discussion with stakeholders,

01:35:42.210 --> 01:35:46.110
there's certainly value on a monthly SARA report moving

01:35:46.110 --> 01:35:50.040
forward that the system could be conditioned to follow,

01:35:50.040 --> 01:35:53.562
especially as we enter periods of certain weather,

01:35:53.562 --> 01:35:56.430
La Nina, El Nino patterns that bring

01:35:56.430 --> 01:35:59.853
their own set of scenarios to bear.

01:36:00.690 --> 01:36:05.690
So that's more granular, that's beneficial to both us

01:36:06.090 --> 01:36:07.080
to know kind of what we're

01:36:07.080 --> 01:36:11.460
dealing with and as shaped as we get closer in

01:36:11.460 --> 01:36:12.840
to various seasons.

01:36:12.840 --> 01:36:15.210
CDR, again, the main point,

01:36:15.210 --> 01:36:16.890
the market participants didn't believe there

01:36:16.890 --> 01:36:21.660
was any value in breaking it out

01:36:21.660 --> 01:36:24.450
on a seasonal basis, but they're not us.

01:36:24.450 --> 01:36:26.550
And they're certainly not the legislature.

01:36:26.550 --> 01:36:29.130
And we got our own set of problems to deal with in trying

01:36:29.130 --> 01:36:31.260
to communicate this stuff to the public.

01:36:31.260 --> 01:36:35.010
And we're constantly going from type period to type period

01:36:35.010 --> 01:36:37.620
because of various issues.

01:36:37.620 --> 01:36:39.690
One, cold fronts, two, hurricanes,

01:36:39.690 --> 01:36:44.370
three, La Nina, four, maintenance cycles,

01:36:44.370 --> 01:36:46.110
six, stuff breaking.

01:36:46.110 --> 01:36:49.513
I mean, so it's, I think we need

01:36:49.513 --> 01:36:52.080
a more targeted, granular approach.

01:36:52.080 --> 01:36:55.440
And again, we could set the schedule

01:36:55.440 --> 01:36:57.870
and the non-negotiables in rule

01:36:57.870 --> 01:37:01.620
that hold everybody accountable, ERCOT the TDSPs,

01:37:01.620 --> 01:37:04.950
the resources, the loads to a certain extent,

01:37:04.950 --> 01:37:07.593
but not required, everybody.

01:37:09.210 --> 01:37:10.770
<v ->Okay, no, thank you for that clarification.</v>

01:37:10.770 --> 01:37:13.740
I think that's important to, for us all

01:37:13.740 --> 01:37:15.450
to understand how the CDR

01:37:15.450 --> 01:37:19.620
and these more near-term resource adequacy assessments would

01:37:19.620 --> 01:37:20.970
work together, right?

01:37:20.970 --> 01:37:23.670
You know, the SARA has proven to be valuable and,

01:37:23.670 --> 01:37:25.147
you know, just for his historical purposes,

01:37:25.147 --> 01:37:29.250
you know, in 2011, we had the rotating outages in February,

01:37:29.250 --> 01:37:31.860
and then in August of 2011, we had, you know,

01:37:31.860 --> 01:37:35.310
triple-digit weather for over 90 days and nearly hit

01:37:35.310 --> 01:37:37.192
rotating outages again in August,

01:37:37.192 --> 01:37:40.320
and everybody was, you know, kind of surprised

01:37:40.320 --> 01:37:44.370
because the CDR or reserve margins looked so healthy.

01:37:44.370 --> 01:37:48.690
So at that, based on that outcome in August

01:37:48.690 --> 01:37:51.630
and what happened, ERCOT started looking

01:37:51.630 --> 01:37:54.450
at more near-term seasonal resources,

01:37:54.450 --> 01:37:55.680
producing this area to provide

01:37:55.680 --> 01:37:57.510
a more near-term resource adequacy assessment.

01:37:57.510 --> 01:37:58.343
<v Will>Correct.</v>

01:37:58.343 --> 01:38:03.343
<v ->As now we are laser-focused on resource adequacy</v>

01:38:03.480 --> 01:38:06.420
year-round, reliability year-round,

01:38:06.420 --> 01:38:10.470
I think it makes sense to zoom in even closer

01:38:10.470 --> 01:38:11.610
on a monthly basis.
<v ->Okay.</v>

01:38:11.610 --> 01:38:15.930
<v ->If ERCOT can do that, you know, in an effective manner,</v>

01:38:15.930 --> 01:38:17.400
and everything works together.

01:38:17.400 --> 01:38:18.650
I think that makes sense.

01:38:19.650 --> 01:38:22.290
<v ->And broadly on the CDR, again,</v>

01:38:22.290 --> 01:38:25.260
the resource adequacy report on a four-times-a-year basis,

01:38:25.260 --> 01:38:27.993
do you have any concerns on that or?

01:38:29.340 --> 01:38:30.173
<v ->No-</v>
<v ->'Cause that is</v>

01:38:30.173 --> 01:38:34.020
a defined topic in the current rule,

01:38:34.020 --> 01:38:36.360
so it would certainly be subject to adjustment.

01:38:36.360 --> 01:38:37.193
<v ->Sure.</v>

01:38:37.193 --> 01:38:40.050
So the current rule only envisions the December CDR?

01:38:40.050 --> 01:38:40.883
<v Will>That's correct.</v>

01:38:40.883 --> 01:38:44.640
<v ->And so I think by laying out when, you know,</v>

01:38:44.640 --> 01:38:48.240
by what the end of what month or in some form or fashion

01:38:48.240 --> 01:38:50.340
in the rule, when those CDR reports

01:38:50.340 --> 01:38:51.683
would be published would be helpful.

01:38:51.683 --> 01:38:52.516
<v Will>Okay.</v>

01:38:52.516 --> 01:38:53.850
<v ->For the public, for the legislature,</v>

01:38:53.850 --> 01:38:55.950
for us, everybody involved.

01:38:55.950 --> 01:38:59.040
So I think that's helpful as long as we structure,

01:38:59.040 --> 01:39:00.240
you know, the language in a way

01:39:00.240 --> 01:39:02.830
that provides flexibility as we work

01:39:04.080 --> 01:39:05.973
with ERCOT to produce those reports.

01:39:07.920 --> 01:39:10.050
The third piece that I think

01:39:10.050 --> 01:39:11.550
Commissioner Glotfelty raised,

01:39:11.550 --> 01:39:14.580
and this is maybe a question and then maybe some additional

01:39:14.580 --> 01:39:17.010
kind of perspective on resiliency

01:39:17.010 --> 01:39:18.780
and a reliability standard.

01:39:18.780 --> 01:39:22.280
So, you know, the resiliency standard,

01:39:22.280 --> 01:39:27.180
as I see it, is different in the transmission world,

01:39:27.180 --> 01:39:29.280
from the generation world, right?

01:39:29.280 --> 01:39:32.580
Transmission, if you look for a reliability standard

01:39:32.580 --> 01:39:34.143
in the transmission world, according to NRC,

01:39:34.143 --> 01:39:35.360
it's in minus one.
<v ->Right.</v>

01:39:35.360 --> 01:39:36.600
<v ->If you look for resiliency,</v>

01:39:36.600 --> 01:39:39.090
it could be in minus one, minus one.

01:39:39.090 --> 01:39:41.460
And then in generation world, in my mind,

01:39:41.460 --> 01:39:44.730
resiliency is weatherization and firm fuel products

01:39:44.730 --> 01:39:47.401
and other, you know, actions ERCOT or products ERCOT

01:39:47.401 --> 01:39:48.420
are putting in the market.

01:39:48.420 --> 01:39:51.557
So is your thought more...

01:39:51.557 --> 01:39:53.760
Are you more focused on the reliability standard part

01:39:53.760 --> 01:39:55.860
that would then provide resiliency?

01:39:55.860 --> 01:39:57.750
<v ->Yes.</v>
<v ->Okay. Okay.</v>

01:39:57.750 --> 01:40:00.480
And so you're-
<v ->And the intent would be,</v>

01:40:00.480 --> 01:40:02.730
we need a metric that attempts

01:40:02.730 --> 01:40:04.830
to harmonize this bifurcation

01:40:04.830 --> 01:40:08.490
between resources, facilities,

01:40:08.490 --> 01:40:10.650
units that can support a given system,

01:40:10.650 --> 01:40:13.290
and again, the ability for the grid itself.

01:40:13.290 --> 01:40:16.320
Take Houston, you know, a finite amount

01:40:16.320 --> 01:40:18.363
of transmission going into an area,

01:40:19.230 --> 01:40:20.880
an islanded situation.

01:40:20.880 --> 01:40:23.760
We need to be able to break down walls and get resources

01:40:23.760 --> 01:40:24.780
to where they need to go.

01:40:24.780 --> 01:40:26.640
I know this is gonna be music to some people's ears

01:40:26.640 --> 01:40:31.640
and terror to others, but reliability drives resiliency.

01:40:33.071 --> 01:40:33.904
<v ->Okay.</v>

01:40:33.904 --> 01:40:36.600
Okay, so then the process would then be to get

01:40:36.600 --> 01:40:39.420
stakeholder feedback on different reliability standards

01:40:39.420 --> 01:40:42.390
in parallel to our phase two.
<v ->Concurrent to.</v>

01:40:42.390 --> 01:40:44.070
<v ->Independent consultant process.</v>

01:40:44.070 --> 01:40:46.650
And that will hopefully at some point dovetail together

01:40:46.650 --> 01:40:49.830
to at least provide additional options

01:40:49.830 --> 01:40:53.190
for review in the phase two independent consulting process.

01:40:53.190 --> 01:40:54.023
<v Will>Yes.</v>

01:40:54.023 --> 01:40:56.100
<v ->And then at that point we would direct ERCOT</v>

01:40:56.100 --> 01:40:58.290
to implement the reliability standard, or-

01:40:58.290 --> 01:41:00.780
<v ->And Mr. Chairman-</v>
<v ->I think that to be</v>

01:41:00.780 --> 01:41:03.180
even take that a step further, Commissioner Cobos,

01:41:03.180 --> 01:41:05.640
and your intention or design would be

01:41:05.640 --> 01:41:07.920
to have whatever reliability standard

01:41:07.920 --> 01:41:12.540
is established sync up with the reliability requirement

01:41:12.540 --> 01:41:14.523
of the phase two tool.

01:41:15.480 --> 01:41:16.800
<v ->My intention sir, is</v>

01:41:16.800 --> 01:41:21.330
that the principles that we enshrine be harnessed

01:41:21.330 --> 01:41:24.240
for whatever phase two is designed to cure.

01:41:24.240 --> 01:41:26.040
<v ->So those would sync up?</v>

01:41:26.040 --> 01:41:26.972
<v ->Yes, sir.</v>

01:41:26.972 --> 01:41:29.460
<v ->And whatever, if we need to get here, and whatever number</v>

01:41:29.460 --> 01:41:31.860
of metric that is-
<v ->That provides us our goal.</v>

01:41:31.860 --> 01:41:35.970
<v ->The phase tool mechanism will be set</v>

01:41:35.970 --> 01:41:37.530
to however that looks.

01:41:37.530 --> 01:41:40.710
So those two match up. That's the ultimate goal.

01:41:40.710 --> 01:41:41.890
<v ->That is the goal.</v>

01:41:41.890 --> 01:41:44.050
<v ->Okay, and let me, can I just say that</v>

01:41:46.260 --> 01:41:50.007
I think we've got one foot in the capacity world

01:41:50.007 --> 01:41:52.590
and one foot in the energy world here.

01:41:52.590 --> 01:41:56.280
We have, this is a challenge

01:41:56.280 --> 01:41:57.930
that not just ERCOT is going through,

01:41:57.930 --> 01:41:59.640
everybody's going through,

01:41:59.640 --> 01:42:01.650
as we're moving towards energy resources,

01:42:01.650 --> 01:42:03.780
as we're moving towards demand response,

01:42:03.780 --> 01:42:08.580
this is becoming a more daily energy use issue than it is

01:42:08.580 --> 01:42:09.843
a capacity issue,

01:42:12.870 --> 01:42:14.730
on how we measure reliability,

01:42:14.730 --> 01:42:17.520
and everybody's struggling with this.

01:42:17.520 --> 01:42:20.530
And I just, you know, I'm eager for us

01:42:24.690 --> 01:42:27.240
to see what the industry has to say about it.

01:42:27.240 --> 01:42:30.177
I'm personally, I'm not optimistic

01:42:32.910 --> 01:42:35.010
that we are gonna solve something that nobody else

01:42:35.010 --> 01:42:37.140
can solve right now,

01:42:37.140 --> 01:42:40.320
but I think we need to be part of the debate here in this.

01:42:40.320 --> 01:42:42.671
<v ->What job were you told you were signing up for?</v>

01:42:42.671 --> 01:42:43.635
(Commissioners laugh)

01:42:43.635 --> 01:42:45.305
'Cause I think that's exactly what we're here for.

01:42:45.305 --> 01:42:49.260
<v ->I'm talking the metric, not the reliability.</v>

01:42:49.260 --> 01:42:52.260
We will have a reliable system. There's no doubt about that.

01:42:52.260 --> 01:42:53.973
So this is just a metric.

01:42:54.930 --> 01:42:58.494
<v ->I was told I'm jumping a volcano and to see if I make it.</v>

01:42:58.494 --> 01:43:00.150
(Commissioners laughs)

01:43:00.150 --> 01:43:03.180
<v ->So anyway, my point here is we are</v>

01:43:03.180 --> 01:43:07.110
in this transition of this industry and of these metrics

01:43:07.110 --> 01:43:10.380
and it's my belief that more metrics are probably

01:43:10.380 --> 01:43:12.750
more valuable than less metrics.

01:43:12.750 --> 01:43:14.490
We shouldn't just be judging the system

01:43:14.490 --> 01:43:17.160
by one single metric.

01:43:17.160 --> 01:43:19.470
So a handful of them would probably be very valuable.

01:43:19.470 --> 01:43:20.303
<v ->Sure.</v>

01:43:20.303 --> 01:43:22.170
<v ->Well, even with one event in 10 years, I mean,</v>

01:43:22.170 --> 01:43:25.800
you still have to evaluate, well, how long is the event?

01:43:25.800 --> 01:43:26.850
The duration.
<v ->Yeah, exactly.</v>

01:43:26.850 --> 01:43:28.276
<v ->What's the cost of the event?</v>

01:43:28.276 --> 01:43:29.109
<v ->Exactly.</v>

01:43:29.109 --> 01:43:30.000
<v ->But as we're all moving towards</v>

01:43:30.000 --> 01:43:33.032
this new market environment

01:43:33.032 --> 01:43:35.610
in Texas, across the nation, you know,

01:43:35.610 --> 01:43:37.650
with more renewables on the system,

01:43:37.650 --> 01:43:40.140
aging thermal generation, retirements,

01:43:40.140 --> 01:43:42.060
not a lot of new generation on the forefront,

01:43:42.060 --> 01:43:44.430
which we're working on it here,

01:43:44.430 --> 01:43:46.230
you know, I think it,

01:43:46.230 --> 01:43:49.800
we must be proactive in trying to figure out

01:43:49.800 --> 01:43:52.530
what reliability metrics are there outside of,

01:43:52.530 --> 01:43:54.660
aside from this one in 10 reliability standard

01:43:54.660 --> 01:43:57.783
that's been the utility, you know, standard for,

01:43:58.650 --> 01:44:02.100
since utilities were probably around.

01:44:02.100 --> 01:44:05.640
And so, I mean, we need to think more progressively,

01:44:05.640 --> 01:44:06.473
I think, go and see what's out there.

01:44:06.473 --> 01:44:09.000
<v ->So having gone back to the history,</v>

01:44:09.000 --> 01:44:12.030
the reason I'm not as afraid of this as other people are,

01:44:12.030 --> 01:44:15.600
is we've got well-blazed roads

01:44:15.600 --> 01:44:17.583
on this topic specifically.

01:44:19.560 --> 01:44:23.670
ERCOT and PUC worked together for two years, 2012 to 2014,

01:44:23.670 --> 01:44:27.660
docket number 40000 on this specific topic.

01:44:27.660 --> 01:44:30.300
ERCOT did an extensive valuation in 2010.

01:44:30.300 --> 01:44:32.670
Woody, were you here or around here at that time?

01:44:32.670 --> 01:44:37.670
Anyway, at that time, to set the 13.75% from 12.75%.

01:44:38.420 --> 01:44:40.770
So they underwent an evaluation just

01:44:40.770 --> 01:44:43.350
on the high-level metric at that time,

01:44:43.350 --> 01:44:45.630
and then there was an extensive conversation,

01:44:45.630 --> 01:44:50.280
I've got the minutes, ERCOT in 2005.

01:44:50.280 --> 01:44:52.920
So every five years or so

01:44:52.920 --> 01:44:56.460
there's a deep dive into what it means to be reliable

01:44:56.460 --> 01:44:57.747
and what the goal is.

01:44:57.747 --> 01:44:59.370
<v ->So, and all I agree with that,</v>

01:44:59.370 --> 01:45:04.370
all I'm saying is that 2005, 2010, 2014 and 2022,

01:45:05.566 --> 01:45:07.350
<v ->Totally different.</v>
<v ->Totally different.</v>

01:45:07.350 --> 01:45:10.020
The resource mix, everything that's going on

01:45:10.020 --> 01:45:12.087
in terms in this system is totally different.

01:45:12.087 --> 01:45:15.060
<v ->The loads are totally different. You bet.</v>

01:45:15.060 --> 01:45:16.160
<v ->That's the recognition I wanna make sure</v>

01:45:16.160 --> 01:45:16.993
that we-
<v ->I think everybody is</v>

01:45:16.993 --> 01:45:18.110
on board with the fact that the one

01:45:18.110 --> 01:45:20.980
in 10 loss of load probability

01:45:22.440 --> 01:45:23.940
is not only older than the iPhone,

01:45:23.940 --> 01:45:28.380
but more vintage of Betamax and VHS.

01:45:28.380 --> 01:45:33.030
So certainly needs improvement both in sophistication

01:45:33.030 --> 01:45:37.620
of the tool and the scope of tool or tools to be used.

01:45:37.620 --> 01:45:41.220
And I'll also highlight the fact,

01:45:41.220 --> 01:45:42.450
as we have all experienced

01:45:42.450 --> 01:45:46.860
in the last 14 months that these are good metrics and tools

01:45:46.860 --> 01:45:48.090
that certainly need to be updated,

01:45:48.090 --> 01:45:50.730
but they are also at the end of the day,

01:45:50.730 --> 01:45:53.700
just academic analysis that don't take into account

01:45:53.700 --> 01:45:55.480
real-time conditions on the ground

01:45:56.520 --> 01:45:59.730
and contingencies that cannot be planned for,

01:45:59.730 --> 01:46:01.293
like personnel and switch yard,

01:46:02.550 --> 01:46:03.630
and things like that.

01:46:03.630 --> 01:46:06.330
So they're important tools to have,

01:46:06.330 --> 01:46:10.800
but I also want to always be cognizant of the fact

01:46:10.800 --> 01:46:12.990
that they're academic constructs

01:46:12.990 --> 01:46:14.850
that provide good guidelines,

01:46:14.850 --> 01:46:19.383
but are not the end-all and be-all in terms of reliability.

01:46:20.310 --> 01:46:22.860
There's still the real world, as we all know,

01:46:22.860 --> 01:46:25.893
has ways of proving studies wrong.

01:46:26.880 --> 01:46:27.713
<v ->You bet.</v>

01:46:30.120 --> 01:46:35.110
<v ->And in terms of both what we build to and how many</v>

01:46:36.060 --> 01:46:39.540
CDR SARA, how many, you know,

01:46:39.540 --> 01:46:42.690
the lowest metric possible a Commissioner Glotfelty said

01:46:42.690 --> 01:46:44.490
as always I'll remind folks,

01:46:44.490 --> 01:46:47.880
we'll approach that through a lens of cost-benefit analysis,

01:46:47.880 --> 01:46:50.430
to make sure that our ratepayers are getting value

01:46:50.430 --> 01:46:53.850
for the dollar spent on any and all of these products

01:46:53.850 --> 01:46:55.200
and initiatives.

01:46:55.200 --> 01:46:57.623
On the seasonal CDR.
<v ->Yes, sir.</v>

01:46:57.623 --> 01:46:59.880
<v ->I think in general, that's a good approach.</v>

01:46:59.880 --> 01:47:03.060
Another question for you is I understand your intent is

01:47:03.060 --> 01:47:06.510
to, in the updated version,

01:47:06.510 --> 01:47:09.930
incorporate not only an installed capacity

01:47:09.930 --> 01:47:12.330
of the fleet metric,

01:47:12.330 --> 01:47:14.940
how many of each type of resource and et cetera,

01:47:14.940 --> 01:47:19.590
but also a much more finely tuned probabilistic

01:47:19.590 --> 01:47:22.740
operational expectation on what we can count on.

01:47:22.740 --> 01:47:24.690
<v ->Yeah.
That's more precise</v>

01:47:24.690 --> 01:47:26.520
than just on average.

01:47:26.520 --> 01:47:27.360
<v ->That that's correct, sir.</v>

01:47:27.360 --> 01:47:30.000
And so let me, let me break that out a little bit.

01:47:30.000 --> 01:47:33.330
There were components that I envisioned

01:47:33.330 --> 01:47:35.490
we would enshrine on a principle basis

01:47:35.490 --> 01:47:37.830
in rule and those still being worked

01:47:37.830 --> 01:47:39.510
on by the grid operator.

01:47:39.510 --> 01:47:41.790
Again, through delegated authority

01:47:41.790 --> 01:47:45.510
from the PUC, accreditation on these resources

01:47:45.510 --> 01:47:46.893
is ongoing at PUC.

01:47:48.510 --> 01:47:53.510
They have a good model during the workshops that we held.

01:47:55.110 --> 01:47:58.380
Most stakeholders were put at ease on the type

01:47:58.380 --> 01:48:02.850
of hybrid models that they were considering using.

01:48:02.850 --> 01:48:07.530
So no, that more granular fine-tuned view

01:48:07.530 --> 01:48:11.670
of what anticipated output is being taken into account

01:48:11.670 --> 01:48:13.800
as part of these two processes.

01:48:13.800 --> 01:48:16.650
<v ->That is the crux of your initiative in my mind,</v>

01:48:16.650 --> 01:48:18.150
that is the most important thing

01:48:18.150 --> 01:48:21.030
to highlight the difference

01:48:21.030 --> 01:48:25.260
between a soil capacity and expected operational output.

01:48:25.260 --> 01:48:27.600
And if we are going to move in the direction

01:48:27.600 --> 01:48:30.087
of truly looking at two things,

01:48:30.087 --> 01:48:33.180
I don't know what the statistical metric is,

01:48:33.180 --> 01:48:36.690
but something more precise than average over peak,

01:48:36.690 --> 01:48:37.680
something like a standard,

01:48:37.680 --> 01:48:39.570
two standard deviations away from peak,

01:48:39.570 --> 01:48:42.960
what is our worst case scenario, or not even worst case,

01:48:42.960 --> 01:48:47.960
just what is the downside scenario

01:48:48.180 --> 01:48:50.160
that we truly need to prepare

01:48:50.160 --> 01:48:52.743
our fleet for to provide reliability?

01:48:53.580 --> 01:48:55.350
If we're moving that direction,

01:48:55.350 --> 01:48:57.840
then I think it makes a lot of sense to do it seasonally,

01:48:57.840 --> 01:49:01.590
because our intermittent have vastly different-

01:49:01.590 --> 01:49:04.230
<v ->Different profiles.</v>
<v ->Performance over seasons,</v>

01:49:04.230 --> 01:49:08.190
and the maintenance profiles of our dispatchable have

01:49:08.190 --> 01:49:09.810
different profiles over different seasons.

01:49:09.810 --> 01:49:12.780
So if we are moving in that much more granular,

01:49:12.780 --> 01:49:16.870
probabilistic direction, then that makes a lot of sense.

01:49:16.870 --> 01:49:18.240
<v ->Okay. Yeah.</v>

01:49:18.240 --> 01:49:20.040
<v ->If we're just replicating the same thing,</v>

01:49:20.040 --> 01:49:21.660
which I don't think we are,

01:49:21.660 --> 01:49:24.121
then that wouldn't the cost-benefit on that wouldn't make

01:49:24.121 --> 01:49:26.190
a lot of sense, but that I think all that's

01:49:26.190 --> 01:49:27.660
moving in the right direction.

01:49:27.660 --> 01:49:29.733
Only other note I would make is that,

01:49:30.870 --> 01:49:33.720
I think Commissioner Cobos may have touched on this.

01:49:33.720 --> 01:49:37.770
If we're doing a seasonal, in rural,

01:49:37.770 --> 01:49:42.660
I'd formalize the seasonal nature requirement,

01:49:42.660 --> 01:49:46.950
but not set hard dates, leave some flexibility to,

01:49:46.950 --> 01:49:49.860
a requirement for each season or quarterly or whatnot.

01:49:49.860 --> 01:49:52.800
But as we've all learned,

01:49:52.800 --> 01:49:57.120
the operational nature of the grid can shift priorities

01:49:57.120 --> 01:49:59.460
around from day to day and time, you know, week to week.

01:49:59.460 --> 01:50:00.570
So I'd make it,

01:50:00.570 --> 01:50:05.570
I'd leave some flexibility on the date specifically.

01:50:05.640 --> 01:50:07.800
<v ->Okay.</v>
<v ->Wouldn't hard code that.</v>

01:50:07.800 --> 01:50:11.670
<v ->Yeah, that was an ask by TDSPs and ERCOT,</v>

01:50:11.670 --> 01:50:14.370
would've appreciated any type of hard date just so that they

01:50:14.370 --> 01:50:16.170
have a target to shoot for,

01:50:16.170 --> 01:50:18.720
but understood the operational flexibility.

01:50:18.720 --> 01:50:20.280
I was wondering if we,

01:50:20.280 --> 01:50:22.890
I would have universal support on that,

01:50:22.890 --> 01:50:25.290
but understand the constraints.

01:50:25.290 --> 01:50:26.790
<v ->Or week-of perhaps.</v>

01:50:26.790 --> 01:50:28.320
<v ->Okay.</v>

01:50:28.320 --> 01:50:30.210
<v ->Something there.</v>
<v ->Cool.</v>

01:50:30.210 --> 01:50:33.480
It's better than I have. So cool. (laughs)

01:50:33.480 --> 01:50:34.440
<v ->You've got more?</v>

01:50:34.440 --> 01:50:35.880
<v ->And I can, now,</v>

01:50:35.880 --> 01:50:39.183
since we've talked through the metric,

01:50:40.544 --> 01:50:44.283
the periodic review loads.

01:50:45.120 --> 01:50:47.790
So we have as noted in the memo,

01:50:47.790 --> 01:50:51.450
an ongoing proceeding at the Commission right now,

01:50:51.450 --> 01:50:56.450
which is working in tandem with task forces formed by ERCOT

01:50:57.390 --> 01:50:58.983
for large flexible loads,

01:50:59.820 --> 01:51:03.870
but it's project number 51888,

01:51:03.870 --> 01:51:08.100
and loads are a key component in our effort

01:51:08.100 --> 01:51:09.840
to provide reliable service.

01:51:09.840 --> 01:51:12.720
Senate Bill 3 defined critical industrial customers

01:51:12.720 --> 01:51:16.740
in section 17.02 of the Utilities Code now,

01:51:16.740 --> 01:51:21.030
and orders us under section 38.076 Utilities Code

01:51:21.030 --> 01:51:22.890
to have our utilities develop plans

01:51:22.890 --> 01:51:27.030
for designation and power restoration to critical loads.

01:51:27.030 --> 01:51:30.750
The memo highlights Project 51888 as a precursor

01:51:30.750 --> 01:51:35.067
to a rulemaking that could require the require ERCOT,

01:51:35.067 --> 01:51:39.637
not the loads, to form a voluntary registration,

01:51:42.900 --> 01:51:46.950
a repository for voluntary registration of loads that meet

01:51:46.950 --> 01:51:51.300
the critical industrial load designation and potentially

01:51:51.300 --> 01:51:52.893
large flexible loads.

01:51:54.180 --> 01:51:58.830
This is for those type of loads that never want to turn off

01:51:58.830 --> 01:52:01.320
while also providing a registry for those loads that wish

01:52:01.320 --> 01:52:04.230
to hold themselves out as potentially controllable,

01:52:04.230 --> 01:52:06.750
that aren't necessarily participating in the ancillary

01:52:06.750 --> 01:52:09.180
service component of controllable loads,

01:52:09.180 --> 01:52:12.920
but may seek that in the future and want participate

01:52:14.370 --> 01:52:19.370
in a registry that allows us to know on a LMP basis,

01:52:19.470 --> 01:52:21.540
on a locational basis,

01:52:21.540 --> 01:52:25.590
whether they will assist the system or if they are going

01:52:25.590 --> 01:52:29.130
to be a source of demand

01:52:29.130 --> 01:52:32.400
that must be satisfied on the system at any given time.

01:52:32.400 --> 01:52:35.920
The way I envision that is the Private Use Network

01:52:37.410 --> 01:52:39.840
line item in the CDR.

01:52:39.840 --> 01:52:41.790
We have a number of megawatts

01:52:41.790 --> 01:52:44.840
that we have affixed in the CDR for that purpose.

01:52:44.840 --> 01:52:48.690
It plays in generally

01:52:48.690 --> 01:52:52.080
to the reliability metric that they use,

01:52:52.080 --> 01:52:55.560
again, the reserve margin, but for my purpose,

01:52:55.560 --> 01:52:56.970
I'd like us to look down the road,

01:52:56.970 --> 01:53:01.410
especially on a rulemaking about having

01:53:01.410 --> 01:53:03.780
a locationally based registry,

01:53:03.780 --> 01:53:08.780
meaning if a semiconductor facility wants to register

01:53:09.960 --> 01:53:11.850
and they wanna hold themselves out,

01:53:11.850 --> 01:53:13.620
as they never want to be turned off,

01:53:13.620 --> 01:53:15.720
they obviously will be as a part of any type

01:53:15.720 --> 01:53:20.720
of load shed plan, but they never wanna be turned off.

01:53:20.880 --> 01:53:24.150
That LMP is very important for the market to know

01:53:24.150 --> 01:53:25.260
where it is.

01:53:25.260 --> 01:53:28.590
Okay, what load is beyond that LMP,

01:53:28.590 --> 01:53:33.450
because hopefully we wanna incent resources to locate near

01:53:33.450 --> 01:53:36.483
there to support that load.

01:53:37.710 --> 01:53:40.290
So it's important for our planning purposes.

01:53:40.290 --> 01:53:42.840
It's important for our market to know that it's there,

01:53:42.840 --> 01:53:47.100
so that resources locate themselves accordingly.

01:53:47.100 --> 01:53:48.510
For the flexible loads,

01:53:48.510 --> 01:53:51.453
we just need to know how much is out there,

01:53:52.350 --> 01:53:54.660
and ERCOT can base other policies

01:53:54.660 --> 01:53:57.150
and other considerations based

01:53:57.150 --> 01:53:59.670
on their willingness to register

01:53:59.670 --> 01:54:01.743
and let us know that they're there.

01:54:04.950 --> 01:54:06.147
<v ->Thoughts, comments?</v>

01:54:07.190 --> 01:54:08.880
<v ->So I think, Commissioner McAdams,</v>

01:54:08.880 --> 01:54:13.710
your overall goal is to determine what load resources we can

01:54:13.710 --> 01:54:16.347
count on for resource reliability benefits.

01:54:16.347 --> 01:54:19.917
<v ->Correct.</v>

01:54:19.917 --> 01:54:22.353
<v ->And which resources we have to serve,</v>

01:54:23.250 --> 01:54:26.490
which industrial resources we have to serve for SB 3.

01:54:26.490 --> 01:54:30.900
So project number 51888

01:54:30.900 --> 01:54:32.190
was opened right after the storm.

01:54:32.190 --> 01:54:33.750
There's not a lot of activity in there.

01:54:33.750 --> 01:54:36.300
It seems to be an open book right now.

01:54:36.300 --> 01:54:39.050
We know it's for critical load standards and processes.

01:54:40.590 --> 01:54:43.050
And I think there's maybe two to three moving pieces here.

01:54:43.050 --> 01:54:46.080
One is the implementation of SB 3

01:54:46.080 --> 01:54:50.313
and the critical industrial load consumers provision there.

01:54:51.360 --> 01:54:53.430
And then there's the piece of the,

01:54:53.430 --> 01:54:54.870
maybe trying to get some of those larger

01:54:54.870 --> 01:54:56.640
flexible loans registered.

01:54:56.640 --> 01:55:01.170
So with respect to the critical industrial consumers,

01:55:01.170 --> 01:55:03.660
I think it is important that we implement

01:55:03.660 --> 01:55:05.850
the SB 3 provision.

01:55:05.850 --> 01:55:08.970
I think we need to develop criteria

01:55:08.970 --> 01:55:13.740
and some kind of registration criteria so that we can ensure

01:55:13.740 --> 01:55:17.310
that the industrial customers that are signing up to be

01:55:17.310 --> 01:55:20.700
critical load are in fact critical,

01:55:20.700 --> 01:55:24.390
kind of like on the natural gas facility

01:55:24.390 --> 01:55:28.350
critical load registration process.

01:55:28.350 --> 01:55:30.210
I think we have to to set up

01:55:30.210 --> 01:55:34.770
some criteria so we can ensure that we're implementing

01:55:34.770 --> 01:55:38.280
that pie of statutory provision appropriately.

01:55:38.280 --> 01:55:39.990
<v ->When everybody's critical, nobody's critical.</v>

01:55:39.990 --> 01:55:41.460
Avoid that.
<v ->Yeah.</v>

01:55:41.460 --> 01:55:42.540
<v ->Yeah. Ultimately, right?</v>

01:55:42.540 --> 01:55:46.230
So we need to have some registration criteria

01:55:46.230 --> 01:55:48.210
in that project or in a new project

01:55:48.210 --> 01:55:49.610
that's titled appropriately.

01:55:51.720 --> 01:55:54.960
I think understanding, getting a better handle

01:55:54.960 --> 01:55:56.790
of what load resources are out there

01:55:56.790 --> 01:55:58.950
that can voluntarily respond is important.

01:55:58.950 --> 01:56:01.050
I think Brad always, you know, ERCOT always says, well,

01:56:01.050 --> 01:56:04.530
we got about four to 500 megawatts of voluntary response,

01:56:04.530 --> 01:56:07.470
and thank you to the industrial for a voluntary response,

01:56:07.470 --> 01:56:10.260
but getting a better handle of what's out there

01:56:10.260 --> 01:56:11.430
is really important.

01:56:11.430 --> 01:56:13.770
And maybe through the registration,

01:56:13.770 --> 01:56:16.080
the large flexible loads gonna be registering

01:56:16.080 --> 01:56:16.913
as critical loads,

01:56:16.913 --> 01:56:19.470
but they'd be registering so that we can have

01:56:19.470 --> 01:56:21.656
a better picture of what's out there.

01:56:21.656 --> 01:56:24.423
<v ->And again, under a definitional basis,</v>

01:56:26.400 --> 01:56:30.300
they could register as a voluntary flexible load,

01:56:30.300 --> 01:56:32.160
but again, they may want to agree

01:56:32.160 --> 01:56:33.900
to certain conditions that guarantee

01:56:33.900 --> 01:56:38.040
that they could in fact, be flexible, that, you know,

01:56:38.040 --> 01:56:39.990
they could be controllable for the purposes

01:56:39.990 --> 01:56:42.423
of our resource adequacy, our reliability.

01:56:44.430 --> 01:56:45.360
Voluntarily.

01:56:45.360 --> 01:56:47.286
<v ->Voluntarily, and confidentially.</v>

01:56:47.286 --> 01:56:48.774
<v ->That's right.</v>
<v ->Presumably.</v>

01:56:48.774 --> 01:56:50.191
Yeah. Good point.

01:56:52.483 --> 01:56:54.214
Commissioner Glotfelty?
<v ->Well you know,</v>

01:56:54.214 --> 01:56:57.150
I think it's a good effort to help give us

01:56:57.150 --> 01:56:58.200
information in the future.

01:56:58.200 --> 01:57:00.023
<v ->Yeah, I think for both of these initiatives,</v>

01:57:00.023 --> 01:57:03.630
I think as long as they're voluntary and confidential,

01:57:03.630 --> 01:57:04.463
it's a good start.

01:57:04.463 --> 01:57:07.830
The only ask I have is that on the large flexible load.

01:57:07.830 --> 01:57:08.663
<v Will>Yes, sir.</v>

01:57:08.663 --> 01:57:11.940
<v ->That whatever steps we take in this don't get in front</v>

01:57:11.940 --> 01:57:15.270
of the task force that's currently underway.

01:57:15.270 --> 01:57:19.390
We're all counting on the participants there to help

01:57:21.240 --> 01:57:22.680
show us the way on that.

01:57:22.680 --> 01:57:26.970
So I'd ask that anything on large flexible load

01:57:26.970 --> 01:57:28.860
either be in conjunction with,

01:57:28.860 --> 01:57:31.050
or don't get ahead of the work they're doing.

01:57:31.050 --> 01:57:32.670
<v Will>Absolutely sir.</v>

01:57:32.670 --> 01:57:34.230
<v ->Appreciate it.</v>

01:57:34.230 --> 01:57:35.850
What else you got?

01:57:35.850 --> 01:57:39.960
<v ->Well so that delineates</v>

01:57:39.960 --> 01:57:42.750
the rulemaking scope that could occur,

01:57:42.750 --> 01:57:46.200
pending the consensus of the Commission.

01:57:46.200 --> 01:57:50.280
As per my memo, I would still lead discussions

01:57:50.280 --> 01:57:52.290
that have concluded potential improvements

01:57:52.290 --> 01:57:54.420
to load forecasting generation accreditation,

01:57:54.420 --> 01:57:56.550
scenario analysis, and formatting

01:57:56.550 --> 01:57:58.680
to the grid administrator to continue

01:57:58.680 --> 01:58:03.680
to refine for more accurate reports and to help, again,

01:58:05.010 --> 01:58:08.280
the rules should enshrine principles

01:58:08.280 --> 01:58:11.370
that the grid administrator should conform

01:58:11.370 --> 01:58:13.980
their processes to meet.

01:58:13.980 --> 01:58:17.130
And that would also give it the force of law,

01:58:17.130 --> 01:58:20.313
which helps the credibility of everybody.

01:58:23.190 --> 01:58:26.010
Now with that I'll close, Mr. Chairman.

01:58:26.010 --> 01:58:27.063
<v ->Makes sense to me.</v>

01:58:28.680 --> 01:58:29.790
<v ->All right.</v>

01:58:29.790 --> 01:58:31.380
Okay to move forward?
<v ->Again, I want to say,</v>

01:58:31.380 --> 01:58:35.310
I appreciate you taking on these two pieces, you know,

01:58:35.310 --> 01:58:38.640
with ERCOT, with new types of assets

01:58:38.640 --> 01:58:40.980
coming on the system like storage,

01:58:40.980 --> 01:58:43.950
making sure that they're updated in these reports is very

01:58:43.950 --> 01:58:46.437
valuable for us in the industry going forward.

01:58:46.437 --> 01:58:49.510
And I just think that accreditation is

01:58:51.241 --> 01:58:54.630
a huge issue on renewable and thermals.

01:58:54.630 --> 01:58:57.390
<v ->Right.</v>
<v ->And storage, quite frankly.</v>

01:58:57.390 --> 01:58:59.940
We gotta get our head around that.

01:58:59.940 --> 01:59:04.662
We haven't done it yet in any formal way, but understanding

01:59:04.662 --> 01:59:06.480
that is really important,

01:59:06.480 --> 01:59:09.543
so I'm glad that you're leading up these efforts.

01:59:11.190 --> 01:59:13.340
<v ->Well put. Thank you, sir.</v>

01:59:13.340 --> 01:59:15.390
<v ->So with that, Mr. Chairman,</v>

01:59:15.390 --> 01:59:17.700
I don't think I'll make any formal motion,

01:59:17.700 --> 01:59:18.960
just directive to staff.

01:59:18.960 --> 01:59:19.793
<v ->Yeah.</v>

01:59:19.793 --> 01:59:22.110
<v ->If we could proceed consistent with the memo.</v>

01:59:22.110 --> 01:59:23.663
<v ->I think staff has everything they need?</v>

01:59:23.663 --> 01:59:24.913
<v ->Right.</v>
<v ->Yes.</v>

01:59:25.880 --> 01:59:28.920
<v ->As you said, no formal action required on item number 31.</v>

01:59:28.920 --> 01:59:31.800
That brings us precisely to the two-hour mark.

01:59:31.800 --> 01:59:36.800
So let's take 15 minutes and we'll reconvene at 11:45 AM.

02:00:00.353 --> 02:00:02.940
(gavel bangs)

02:00:02.940 --> 02:00:05.010
This meeting of the Public Utility Commission of Texas is

02:00:05.010 --> 02:00:06.393
now called back to order.

02:00:08.430 --> 02:00:12.810
We don't have any business on items 31 or 32,

02:00:12.810 --> 02:00:16.110
which brings us to item number 33.

02:00:16.110 --> 02:00:19.110
I believe Commissioner Glotfelty has some comments

02:00:19.110 --> 02:00:19.943
on this item.

02:00:23.160 --> 02:00:24.600
<v ->Caught me with some M&amp;Ms in my mouth.</v>

02:00:24.600 --> 02:00:25.433
I apologize.

02:00:28.140 --> 02:00:30.600
Docket number 33 is a review of transmission rights

02:00:30.600 --> 02:00:32.130
for exports from ERCOT.

02:00:32.130 --> 02:00:33.830
It's pretty narrow, pretty simple.

02:00:35.610 --> 02:00:36.987
We've gone through a process here

02:00:36.987 --> 02:00:41.340
of trying to figure out if export tariffs

02:00:41.340 --> 02:00:43.890
deserve to have three times the export charge

02:00:43.890 --> 02:00:46.623
during June, July, and August.

02:00:48.510 --> 02:00:52.830
DC ties can have a very valuable reliability,

02:00:52.830 --> 02:00:55.710
resiliency component for our system.

02:00:55.710 --> 02:00:57.630
We don't know if we're gonna get more of them,

02:00:57.630 --> 02:01:01.290
but this is potentially one of the barriers to getting more

02:01:01.290 --> 02:01:03.513
so, as we've looked at at DC lines,

02:01:05.580 --> 02:01:07.770
one of the issues has been this tariff.

02:01:07.770 --> 02:01:09.600
It seems to be outdated.

02:01:09.600 --> 02:01:11.910
We've gone through a process with stakeholders.

02:01:11.910 --> 02:01:16.410
It's, you know, we've really had almost unanimous agreement

02:01:16.410 --> 02:01:20.850
that it's okay to have this eliminated,

02:01:20.850 --> 02:01:23.400
this three times the rate, not because ERCOT

02:01:23.400 --> 02:01:26.100
has the very specifically the authority

02:01:26.100 --> 02:01:27.660
if there's a reliability impact

02:01:27.660 --> 02:01:29.880
to shut down the DC ties and keep that power in the state.

02:01:29.880 --> 02:01:34.630
So again, this is process going forward, which is

02:01:35.970 --> 02:01:37.350
we've put out a straw man.

02:01:37.350 --> 02:01:40.950
We've asked for input from stakeholders.

02:01:40.950 --> 02:01:44.520
This would be just to approve the formal process

02:01:44.520 --> 02:01:48.810
of publishing a draft rule and moving that forward

02:01:48.810 --> 02:01:51.153
in the general rulemaking process.

02:01:52.002 --> 02:01:56.280
It's very short, but I'm happy to answer any questions.

02:01:56.280 --> 02:01:57.960
<v ->Thank you. Thoughts, comments, questions?</v>

02:01:57.960 --> 02:01:59.070
<v ->Firstly, Commissioner, thank you</v>

02:01:59.070 --> 02:02:00.750
for affording me the opportunity to dig

02:02:00.750 --> 02:02:02.400
into it more and understand

02:02:02.400 --> 02:02:03.750
what we were talking about.

02:02:04.980 --> 02:02:06.690
My comfort level with moving forward,

02:02:06.690 --> 02:02:09.150
pending staff's bandwidth and everything else,

02:02:09.150 --> 02:02:11.700
you know, I know I just made an ask for tool rulemaking,

02:02:11.700 --> 02:02:16.650
so I'm happy to support my colleague on that, but no,

02:02:16.650 --> 02:02:18.210
I think if we have the bandwidth,

02:02:18.210 --> 02:02:19.660
we should move forward on it.

02:02:22.080 --> 02:02:23.250
<v ->Same.</v>

02:02:23.250 --> 02:02:27.180
I think you've gotten some comments that majority support

02:02:27.180 --> 02:02:28.440
making these changes to the rule.

02:02:28.440 --> 02:02:30.630
I think we know why they were put in place in the past.

02:02:30.630 --> 02:02:34.410
And so I appreciate your leadership on this issue

02:02:34.410 --> 02:02:38.070
and if staff has the bandwidth, let's move forward.

02:02:38.070 --> 02:02:40.270
<v ->Agreed. Thank you, Commissioner Glotfelty.</v>

02:02:41.490 --> 02:02:43.710
Staff have any other questions or.

02:02:43.710 --> 02:02:46.660
<v ->Well, so we have the discussion draft, but also</v>

02:02:47.805 --> 02:02:50.340
if rather than just recall that as a PFP,

02:02:50.340 --> 02:02:52.920
I think staff has a few additional tweaks

02:02:52.920 --> 02:02:53.760
that they might want to make.

02:02:53.760 --> 02:02:56.460
So if we can send down our usual scoping document

02:02:56.460 --> 02:03:00.360
in proceeding of the PFP with our fleshed out

02:03:00.360 --> 02:03:03.000
version of how we would react to the comments,

02:03:03.000 --> 02:03:06.760
we'll we can proceed in the next little bit on that.

02:03:08.250 --> 02:03:09.930
But yeah, we can do it.

02:03:09.930 --> 02:03:12.270
I just wanted to make sure that we can just go

02:03:12.270 --> 02:03:13.860
through the normal process rather than just refile,

02:03:13.860 --> 02:03:14.850
if that works.

02:03:14.850 --> 02:03:15.750
<v Jimmy>That's fine.</v>

02:03:15.750 --> 02:03:17.310
<v ->And that scoping document, too,</v>

02:03:17.310 --> 02:03:22.170
will have a recommended schedule that will allow us

02:03:22.170 --> 02:03:25.800
to slot it in among the other rulemakings

02:03:25.800 --> 02:03:27.180
in a way that's feasible

02:03:27.180 --> 02:03:30.540
for our resources.
<v ->Okay, good. Got it.</v>

02:03:30.540 --> 02:03:32.523
<v ->Thank you. Appreciate that.</v>

02:03:33.540 --> 02:03:34.830
Thank you, Commissioner Glotfelty.

02:03:34.830 --> 02:03:36.330
<v ->Thank you.</v>

02:03:36.330 --> 02:03:40.260
<v ->Next item is project number 53298,</v>

02:03:40.260 --> 02:03:43.350
related to Wholesale Electric Market Design.

02:03:43.350 --> 02:03:46.999
Commissioner McAdams, I understand, has some comments here.

02:03:46.999 --> 02:03:48.060
<v ->I do.</v>

02:03:48.060 --> 02:03:52.800
Mr. Chairman and I believe, so let me say this:

02:03:52.800 --> 02:03:57.450
our recent request for information from stakeholders has

02:03:57.450 --> 02:03:59.040
recently concluded.

02:03:59.040 --> 02:04:03.360
I know all of our offices are digesting those comments.

02:04:03.360 --> 02:04:08.360
This is a dynamic area of the market that could prove

02:04:09.060 --> 02:04:11.583
to be an invaluable resource moving forward.

02:04:12.600 --> 02:04:16.380
I know that Commissioner Glotfelty has also thoughts

02:04:16.380 --> 02:04:20.850
on how far and how fast we may be able

02:04:20.850 --> 02:04:23.970
to move in the near future.

02:04:23.970 --> 02:04:28.970
I know this, that the winter,

02:04:29.070 --> 02:04:30.820
this Christmas is

02:04:34.380 --> 02:04:36.870
a transformational time

02:04:36.870 --> 02:04:38.340
for what we are doing here

02:04:38.340 --> 02:04:41.160
at the Commission and on the ERCOT system.

02:04:41.160 --> 02:04:43.860
That that is a target for both staff,

02:04:43.860 --> 02:04:46.080
ERCOT staff, stakeholders

02:04:46.080 --> 02:04:51.080
in trying to formalize a framework of tools to combat

02:04:51.230 --> 02:04:56.010
and solve for reliability moving forward.

02:04:56.010 --> 02:05:01.010
So DR's, whether they're on the supply side,

02:05:02.700 --> 02:05:07.653
or, well, on the demand side or the supply side,

02:05:09.480 --> 02:05:12.630
are going to be instrumental in providing

02:05:12.630 --> 02:05:14.643
a long term solution for the system.

02:05:16.020 --> 02:05:17.010
Just like everything,

02:05:17.010 --> 02:05:19.623
there's a time and a place under Heaven.

02:05:20.730 --> 02:05:23.520
I'm not sure if we can move forward at the moment,

02:05:23.520 --> 02:05:28.200
but I'm interested in thoughts from other Commissioners

02:05:28.200 --> 02:05:31.800
on how far, how fast and what we could do right now.

02:05:31.800 --> 02:05:33.060
And without Mr. Chairman,

02:05:33.060 --> 02:05:34.830
I'll open it up for other thoughts.

02:05:34.830 --> 02:05:36.583
<v ->Suspect Commissioner Glotfelty has some thoughts on that.</v>

02:05:36.583 --> 02:05:39.760
<v ->Yeah, go ahead, Jimmy.</v>

02:05:40.617 --> 02:05:44.820
<v ->Are you specifically bringing up DER pilot projects?</v>

02:05:44.820 --> 02:05:46.590
<v ->Yes, sir. It's teed up.</v>
<v ->So, yeah.</v>

02:05:46.590 --> 02:05:50.460
So what I think is we've had some discussions back

02:05:50.460 --> 02:05:53.640
and forth on what ERCOT can and cannot do

02:05:53.640 --> 02:05:57.693
with pilot projects in this space.

02:05:58.680 --> 02:06:02.730
And should we have a task force instead of a pilot project

02:06:02.730 --> 02:06:04.353
to resolve all the issues?

02:06:06.300 --> 02:06:11.300
My experience has been that task force solve

02:06:12.840 --> 02:06:14.970
a lot of issues, they delay a lot of issues

02:06:14.970 --> 02:06:16.473
that can be resolved as well.

02:06:19.800 --> 02:06:22.200
So I think you get to the same answer

02:06:22.200 --> 02:06:23.730
if you do a pilot project,

02:06:23.730 --> 02:06:27.630
a very defined pilot project

02:06:27.630 --> 02:06:30.150
that can help answer very specific questions

02:06:30.150 --> 02:06:34.050
on DERs, VPPs and other things like that.

02:06:34.050 --> 02:06:36.300
What I've experienced in the past

02:06:36.300 --> 02:06:38.010
is that you do a task force,

02:06:38.010 --> 02:06:40.260
the task force comes up with a bunch of issues,

02:06:40.260 --> 02:06:43.950
the issues go to the real implementation on the system,

02:06:43.950 --> 02:06:45.690
and there's still a whole bunch of issues that still have

02:06:45.690 --> 02:06:49.380
to be resolved, and believe that as you go

02:06:49.380 --> 02:06:50.790
through a small pilot project,

02:06:50.790 --> 02:06:52.830
you get to the exact same point.

02:06:52.830 --> 02:06:56.640
And that the further point on kind

02:06:56.640 --> 02:07:00.210
of virtual power plants is that we we're trying

02:07:00.210 --> 02:07:01.890
to figure out where batteries fit.

02:07:01.890 --> 02:07:04.247
Are they loads, or are they generators?

02:07:04.247 --> 02:07:05.550
<v ->They're both.</v>
<v ->They're both, right now.</v>

02:07:05.550 --> 02:07:09.540
And this is not just small storage facilities.

02:07:09.540 --> 02:07:11.130
This is large storage facilities.

02:07:11.130 --> 02:07:12.930
They are everything on this system.

02:07:12.930 --> 02:07:15.240
And that's what makes them a wild card.

02:07:15.240 --> 02:07:17.130
And so, you know, I just,

02:07:17.130 --> 02:07:20.340
I think that if we could have parties, you know,

02:07:20.340 --> 02:07:24.150
put together a pilot project and have it scoped out,

02:07:24.150 --> 02:07:26.850
I think that I've talked to folks at ERCOT about it.

02:07:26.850 --> 02:07:29.760
I know there are some difference of opinions,

02:07:29.760 --> 02:07:32.130
but my opinion is that we ought to go forward and we ought

02:07:32.130 --> 02:07:36.420
to find a way to encourage ERCOT to get stakeholders

02:07:36.420 --> 02:07:39.638
together and do a pilot project and make sure

02:07:39.638 --> 02:07:44.490
that the issues that come up are answered in that process.

02:07:44.490 --> 02:07:48.060
<v ->So is there a specific request for a pilot project or is</v>

02:07:48.060 --> 02:07:52.440
this this a concept you'd like to open up

02:07:52.440 --> 02:07:55.230
to the broader community?

02:07:55.230 --> 02:07:57.060
<v ->So this is a issue</v>

02:07:57.060 --> 02:08:02.060
of a request by Tesla

02:08:03.390 --> 02:08:06.360
to modify a...

02:08:06.360 --> 02:08:08.160
I don't know what an OBDR...
<v ->OBDR.</v>

02:08:08.160 --> 02:08:09.480
<v ->Other binding document.</v>
<v ->Other binding document.</v>

02:08:09.480 --> 02:08:11.380
<v ->Yeah, another binding document there</v>

02:08:12.270 --> 02:08:15.120
to allow them to create

02:08:15.120 --> 02:08:18.850
a virtual power plan here in Texas using power walls

02:08:20.490 --> 02:08:25.490
and the challenge,

02:08:25.500 --> 02:08:28.114
you know, I think there's some overburdenness,

02:08:28.114 --> 02:08:29.010
you know, with ERCOT, you know,

02:08:29.010 --> 02:08:30.420
they've got a lot of task forces,

02:08:30.420 --> 02:08:33.390
but this is what my request would be,

02:08:33.390 --> 02:08:36.120
is let's figure out how we can move forward and let them

02:08:36.120 --> 02:08:38.610
create a small pilot project to do this going forward

02:08:38.610 --> 02:08:41.610
and answer any questions that we have, reliability,

02:08:41.610 --> 02:08:44.409
economic, settlements, all of those things,

02:08:44.409 --> 02:08:46.459
through a pilot project, rather than just

02:08:47.569 --> 02:08:48.570
some task force that goes

02:08:48.570 --> 02:08:50.563
and kicks the can down the road for a few.

02:08:50.563 --> 02:08:53.040
<v ->I will say in some cases, task forces are excellent,</v>

02:08:53.040 --> 02:08:55.427
like large flexible load.
<v ->I totally agree.</v>

02:08:55.427 --> 02:08:58.350
<v ->When some elements present risk to the system.</v>

02:08:58.350 --> 02:08:59.183
<v ->Absolutely.</v>

02:09:00.030 --> 02:09:01.977
<v ->Sometimes it's more prudent to step back</v>

02:09:01.977 --> 02:09:03.330
and evaluate those issues

02:09:03.330 --> 02:09:05.523
in a task force format.
<v ->I understand.</v>

02:09:08.310 --> 02:09:12.750
<v ->Related to any particular NPR, OBDR,</v>

02:09:12.750 --> 02:09:15.750
I think there's a time and a place for us to opine on those,

02:09:15.750 --> 02:09:18.870
but it's certainly after the ERCOT board and staff have gone

02:09:18.870 --> 02:09:20.700
through their process.

02:09:20.700 --> 02:09:22.620
<v ->Yeah, and this has been an issue</v>

02:09:22.620 --> 02:09:26.010
that has been pending before the ERCOT staff

02:09:26.010 --> 02:09:29.200
for many months, we're we can invite Tesla up

02:09:30.090 --> 02:09:31.830
to lay it out for us, if you want.

02:09:31.830 --> 02:09:33.872
I know the there's gonna be a discussion

02:09:33.872 --> 02:09:37.140
at the ERCOT board meeting on either Monday or Tuesday,

02:09:37.140 --> 02:09:39.900
and we can wait for that and then come back afterwards.

02:09:39.900 --> 02:09:43.380
I really just want to make sure that...

02:09:43.380 --> 02:09:45.300
I'm a believer that these are part

02:09:45.300 --> 02:09:46.923
of the solution going forward.

02:09:47.890 --> 02:09:49.980
Yeah.
<v ->Yeah. Firm.</v>

02:09:49.980 --> 02:09:53.583
We're all, I think, supportive of all of the above approach.

02:09:54.510 --> 02:09:55.816
<v ->And the other thing is</v>

02:09:55.816 --> 02:09:58.770
as we look at these pilot projects, you know,

02:09:58.770 --> 02:10:03.770
a small pilot project becomes a rounding error in terms

02:10:03.900 --> 02:10:07.170
of energy on the system.

02:10:07.170 --> 02:10:11.040
And, you know, you're kind of shaking your head here,

02:10:11.040 --> 02:10:14.225
but listen, the amount of load that flex

02:10:14.225 --> 02:10:17.250
on the load side, that's moving up

02:10:17.250 --> 02:10:20.340
and down every second of every day makes

02:10:20.340 --> 02:10:23.610
the surrounding error on the generation side, so.

02:10:23.610 --> 02:10:25.980
<v ->Right, I'm just, I'm more thinking about it of as,</v>

02:10:25.980 --> 02:10:27.270
from the perspective,

02:10:27.270 --> 02:10:30.330
if we're gonna divert resources from ECRS

02:10:30.330 --> 02:10:32.610
or voltage support or other key initiatives

02:10:32.610 --> 02:10:35.190
for a rounding error,

02:10:35.190 --> 02:10:36.600
I'm not sure that's the most prudent.

02:10:36.600 --> 02:10:39.390
<v ->But this is something that has to go forward.</v>

02:10:39.390 --> 02:10:42.723
We've gotta find some solution to these issues.

02:10:44.280 --> 02:10:45.900
I understand what you're saying.

02:10:45.900 --> 02:10:47.010
You know, I think ERCOT needs

02:10:47.010 --> 02:10:51.240
to make that decision, but my view is let's let you know,

02:10:51.240 --> 02:10:55.920
Tesla and others who want to, you know, create

02:10:55.920 --> 02:11:00.920
and use virtual power plants in some fashion,

02:11:01.380 --> 02:11:05.070
you know, put together a proposal to ERCOT,

02:11:05.070 --> 02:11:08.190
but that ERCOT looks upon it favorably.

02:11:08.190 --> 02:11:09.330
Obviously, they have to look at it

02:11:09.330 --> 02:11:12.420
from a reliability perspective, but look on it favorably

02:11:12.420 --> 02:11:14.880
that we can do these tests and solve problems

02:11:14.880 --> 02:11:18.435
in a pilot project, as opposed to just a task force.

02:11:18.435 --> 02:11:19.290
<v ->So, yeah, absolutely.</v>

02:11:19.290 --> 02:11:23.160
So one of the considerations that in my deliberations

02:11:23.160 --> 02:11:26.940
on the topic that I believe is essential,

02:11:26.940 --> 02:11:28.530
is you have to have the right system.

02:11:28.530 --> 02:11:30.660
You have to have the right distribution system

02:11:30.660 --> 02:11:32.103
for the pilot project.

02:11:33.570 --> 02:11:35.490
Our large scale TDSPs,

02:11:35.490 --> 02:11:36.510
I'm looking at 'em over there.

02:11:36.510 --> 02:11:40.320
I'm sure they may be cagey about that.

02:11:40.320 --> 02:11:42.330
However, a non-opt-in entity

02:11:42.330 --> 02:11:45.510
that has a contiguous distribution system

02:11:45.510 --> 02:11:50.510
that fairly well controls their own distribution system

02:11:50.940 --> 02:11:53.460
in a more manageable way.

02:11:53.460 --> 02:11:54.750
They may have interest.

02:11:54.750 --> 02:11:57.070
And so my belief was

02:11:59.039 --> 02:12:01.500
there's responsibilities on everyone here.

02:12:01.500 --> 02:12:04.890
ERCOT certainly has some, but they're doing

02:12:04.890 --> 02:12:08.403
a lot of different things over the next several weeks.

02:12:09.540 --> 02:12:12.840
It may be feasible or advisable to get feedback

02:12:12.840 --> 02:12:16.050
from the TDSP community,

02:12:16.050 --> 02:12:20.700
the electric utility community on who might volunteer to be

02:12:21.570 --> 02:12:24.480
involved in some kind of pilot project,

02:12:24.480 --> 02:12:25.920
if they were interested.

02:12:25.920 --> 02:12:26.760
Because again, it's all

02:12:26.760 --> 02:12:28.350
about distribution system management.

02:12:28.350 --> 02:12:30.750
You guys are transmission system managers.

02:12:30.750 --> 02:12:31.943
And this is a DSO.
<v ->Yeah, this is huge,</v>

02:12:33.150 --> 02:12:34.537
hugely important point.
<v ->Right.</v>

02:12:34.537 --> 02:12:37.380
<v ->Is that ERCOT is a transmission level operator.</v>

02:12:37.380 --> 02:12:38.310
<v ->Right.</v>

02:12:38.310 --> 02:12:41.370
<v ->And for a pilot project or a system-wide change,</v>

02:12:41.370 --> 02:12:44.400
moving ERCOT from just the transmission level,

02:12:44.400 --> 02:12:48.210
into the distribution level, to the extent they would need

02:12:48.210 --> 02:12:49.710
to have visibility,

02:12:49.710 --> 02:12:52.560
command and control necessary to maintain reliability,

02:12:52.560 --> 02:12:56.820
not to mention execute any project of any scale.

02:12:56.820 --> 02:12:59.161
That transition is a huge undertaking.

02:12:59.161 --> 02:13:02.310
<v ->It's happening. It's happening today.</v>

02:13:02.310 --> 02:13:03.143
So, you know.
<v ->That's fine,</v>

02:13:03.143 --> 02:13:04.950
but ERCOT's not doing that today.

02:13:04.950 --> 02:13:09.720
And doing that system wide is a huge, huge undertaking,

02:13:09.720 --> 02:13:10.890
which I think is to your point.

02:13:10.890 --> 02:13:12.510
<v ->That's why you limit it.</v>

02:13:12.510 --> 02:13:13.453
That's why it's small.
<v ->It'd be kind of-</v>

02:13:13.453 --> 02:13:16.650
<v ->So I think self-contained sandbox, if you will.</v>

02:13:16.650 --> 02:13:18.930
Makes a lot of sense.
<v ->Yeah, for experimentation.</v>

02:13:18.930 --> 02:13:21.030
<v ->Yeah. That makes a lot of sense.</v>

02:13:21.030 --> 02:13:23.920
Trying to force feed it through an OBDR

02:13:26.279 --> 02:13:30.543
is something that ERCOT board can consider next week.

02:13:32.670 --> 02:13:34.020
I guess the first question

02:13:34.020 --> 02:13:35.490
that makes like a pilot project,

02:13:35.490 --> 02:13:39.513
a self-contained NOI, makes a lot of sense,

02:13:40.380 --> 02:13:43.830
and I'm happy to concur with Commissioner Glotfelty

02:13:43.830 --> 02:13:46.740
that nothing teaches like experience.

02:13:46.740 --> 02:13:48.390
So the sooner you get something in the field,

02:13:48.390 --> 02:13:50.760
the more you learn faster.
<v ->Right.</v>

02:13:50.760 --> 02:13:53.490
<v ->It's just the trade-offs on doing so.</v>

02:13:53.490 --> 02:13:55.350
Is there anything, the first question

02:13:55.350 --> 02:13:56.220
I think we need to ask,

02:13:56.220 --> 02:14:01.220
is there anything in place today preventing

02:14:01.740 --> 02:14:04.290
an independent company like Tesla from partnering

02:14:04.290 --> 02:14:08.223
with a NOI to move forward with a small pilot project?

02:14:09.240 --> 02:14:10.200
<v ->I have a question.</v>

02:14:10.200 --> 02:14:12.680
'Cause I thought I read in the news articles, you know,

02:14:12.680 --> 02:14:17.130
in the press, that Tesla currently is looking to do

02:14:17.130 --> 02:14:20.700
a test of their VPP model in north Texas.

02:14:20.700 --> 02:14:23.010
And so they already have something that, you know,

02:14:23.010 --> 02:14:24.513
they're working on right now.

02:14:25.380 --> 02:14:27.390
And I don't know if that's connected to, you know,

02:14:27.390 --> 02:14:28.920
Encore's distribution grid or NOI.

02:14:28.920 --> 02:14:32.763
It looks like yes. Liz is shaking her head yes.

02:14:33.990 --> 02:14:38.643
So, okay, so there's that to take into consideration,

02:14:38.643 --> 02:14:42.390
(laughs) but I guess my question is, and I'm still parsing

02:14:42.390 --> 02:14:44.430
through the comments and I'm just trying

02:14:44.430 --> 02:14:45.263
to figure out exactly-
<v ->Oh yeah, we are.</v>

02:14:45.263 --> 02:14:47.310
<v ->What we're tackling here.</v>

02:14:47.310 --> 02:14:52.310
So I know Tesla has their OBDRR and had a workshop,

02:14:52.737 --> 02:14:55.800
and so that's an avenue that they're pursuing

02:14:55.800 --> 02:14:57.030
that'll go through the, you know,

02:14:57.030 --> 02:14:59.040
stakeholder and board review,

02:14:59.040 --> 02:15:01.590
ultimately over here, if the board approves it.

02:15:01.590 --> 02:15:05.953
And I think what I'm hearing from at least Jimmy

02:15:05.953 --> 02:15:07.500
and both of you guys,

02:15:07.500 --> 02:15:12.500
is that you would prefer piloting the program rather than,

02:15:13.290 --> 02:15:16.560
you know, maybe putting in a task force

02:15:16.560 --> 02:15:19.770
where there's just a whole lot more, you know,

02:15:19.770 --> 02:15:23.310
process and, you know...
<v ->Commissioner,</v>

02:15:23.310 --> 02:15:27.870
my position is just as, maybe in the middle on this,

02:15:27.870 --> 02:15:30.870
would be if feasible, certainly pilots

02:15:30.870 --> 02:15:32.850
are very useful for experimentation

02:15:32.850 --> 02:15:37.850
and just problem-solving on the front end,

02:15:38.040 --> 02:15:39.360
if feasible.

02:15:39.360 --> 02:15:40.470
Key term.

02:15:40.470 --> 02:15:41.640
So if you get the right system,

02:15:41.640 --> 02:15:42.690
if you get the right partners,

02:15:42.690 --> 02:15:45.690
if you get Tesla married up to the right distribution system

02:15:46.620 --> 02:15:49.050
so that we can work our way through this,

02:15:49.050 --> 02:15:53.880
but that's a lot of what-ifs and my non-negotiable

02:15:53.880 --> 02:15:56.860
on the other side was as we are

02:15:58.830 --> 02:16:03.000
analyzing the feedback from this docket

02:16:03.000 --> 02:16:05.730
and from our DER comments,

02:16:05.730 --> 02:16:10.560
a task force or some type of construct acting concurrent

02:16:10.560 --> 02:16:12.390
with us, partnering with us

02:16:12.390 --> 02:16:15.240
to make recommendations by the end of the year,

02:16:15.240 --> 02:16:18.570
given any type of outcomes,

02:16:18.570 --> 02:16:20.190
either from a pilot project

02:16:20.190 --> 02:16:22.139
or from the task force's deliberation

02:16:22.139 --> 02:16:25.440
on their own would be useful for our purposes

02:16:25.440 --> 02:16:27.990
to guide rulemaking for the next year,

02:16:27.990 --> 02:16:30.780
so that we could possibly start to count on these resources

02:16:30.780 --> 02:16:31.980
in the near future.

02:16:31.980 --> 02:16:34.410
I'm uncomfortable with just leaving it open ended

02:16:34.410 --> 02:16:35.700
to where we're not doing anything on DERs.

02:16:35.700 --> 02:16:36.550
<v ->Absolutely not.</v>

02:16:37.435 --> 02:16:39.870
<v ->And my read of your orders</v>

02:16:39.870 --> 02:16:42.930
to my office is let's try to do something

02:16:42.930 --> 02:16:44.640
and we're going to,

02:16:44.640 --> 02:16:47.670
so it's just a question of how best to get there

02:16:47.670 --> 02:16:48.690
by the end of the year.

02:16:48.690 --> 02:16:49.523
<v ->Absolutely.</v>

02:16:49.523 --> 02:16:52.230
And this isn't part of all of the above approach.

02:16:52.230 --> 02:16:54.990
I'm just not prepared to sacrifice ERCOT resources

02:16:54.990 --> 02:16:59.070
working on ERS, or ECRS, or voltage support,

02:16:59.070 --> 02:17:01.500
or any of the other, or RTC,

02:17:01.500 --> 02:17:04.140
or any other big initiatives for 50 megawatts,

02:17:04.140 --> 02:17:05.730
potentially.
<v ->Got it.</v>

02:17:05.730 --> 02:17:07.300
<v ->But we need to move forward under that.</v>

02:17:07.300 --> 02:17:08.430
<v ->Yeah.</v>
<v ->100% agree</v>

02:17:08.430 --> 02:17:09.630
we need to move forward.

02:17:09.630 --> 02:17:12.600
Under what framework, is the open question.

02:17:12.600 --> 02:17:14.700
<v ->Yeah, so-</v>
<v ->And you two</v>

02:17:14.700 --> 02:17:17.583
are the leads on our DER initiative,

02:17:18.660 --> 02:17:21.000
so I think you've got a question,

02:17:21.000 --> 02:17:24.200
and I guess I've got a question.

02:17:24.200 --> 02:17:25.770
We might have some folks in the audience,

02:17:25.770 --> 02:17:30.770
if y'all would be willing to ask the Tesla folks, if we can.

02:17:30.960 --> 02:17:31.800
<v ->Absolutely.</v>
<v ->I don't wanna steal</v>

02:17:31.800 --> 02:17:34.140
any thunder from the ERCOT board though next week.

02:17:34.140 --> 02:17:36.150
<v ->Yeah, I mean, and that is the thing.</v>

02:17:36.150 --> 02:17:38.360
We could bring it up at the next meeting as well.

02:17:38.360 --> 02:17:39.193
<v ->Sure.</v>

02:17:39.193 --> 02:17:41.040
<v ->After the presentation to the ERCOT board</v>

02:17:41.040 --> 02:17:44.580
and the ERCOT board has a discussion next week about it.

02:17:44.580 --> 02:17:46.071
<v ->Well, there's no time like the present.</v>

02:17:46.071 --> 02:17:47.260
<v ->Okay. Well, let's steal some thunder.</v>

02:17:47.260 --> 02:17:48.390
<v ->Well, okay.</v>

02:17:48.390 --> 02:17:51.060
<v ->And you have a question about what they're actually doing,</v>

02:17:51.060 --> 02:17:53.580
and I have a question-
<v ->Let me just say one thing.</v>

02:17:53.580 --> 02:17:57.690
Since we unbundled this market and restructured the market,

02:17:57.690 --> 02:17:59.700
we've tried to eliminate barriers to entry,

02:17:59.700 --> 02:18:01.890
to getting new entrant into these-

02:18:01.890 --> 02:18:03.960
<v ->That's true.</v>
<v ->Systems and provide</v>

02:18:03.960 --> 02:18:06.180
new products to consumers.

02:18:06.180 --> 02:18:08.640
<v ->That's my question, what barriers exist to (indistinct)</v>

02:18:08.640 --> 02:18:12.180
<v ->So that's why that is one of the issues.</v>

02:18:12.180 --> 02:18:13.860
I printed this map yesterday.

02:18:13.860 --> 02:18:18.150
This was at 1:47 yesterday, the ERCOT heat map,

02:18:18.150 --> 02:18:22.110
which shows that we've got a very big challenge

02:18:22.110 --> 02:18:25.500
across our system that has some areas of...

02:18:25.500 --> 02:18:27.630
This system, as funny as it looks,

02:18:27.630 --> 02:18:32.630
is still 100% reliable or 99.999% reliable.

02:18:32.640 --> 02:18:35.700
It's just very inexpensive in the blue and very expensive

02:18:35.700 --> 02:18:36.540
in the red,

02:18:36.540 --> 02:18:38.811
and if we can help solve some of those problems,

02:18:38.811 --> 02:18:40.500
you know, with this and transmission,

02:18:40.500 --> 02:18:42.030
obviously that's what we need to be working on.

02:18:42.030 --> 02:18:45.330
<v ->We'll get the small modular reactor guys up next week.</v>

02:18:45.330 --> 02:18:46.500
<v ->Are we having them in?</v>

02:18:46.500 --> 02:18:48.496
<v ->Well, we can.</v>
<v ->I think-</v>

02:18:48.496 --> 02:18:50.370
That goes a long way to solving that problem.

02:18:50.370 --> 02:18:52.110
<v ->If they can fit into the market construct</v>

02:18:52.110 --> 02:18:54.171
and they can pay for it, for sure.

02:18:54.171 --> 02:18:56.040
<v ->(laughs) All right. First question.</v>

02:18:56.040 --> 02:18:59.970
What barriers exist to currently implementing Tesla's vision

02:18:59.970 --> 02:19:01.983
of a VVP and a NOI?

02:19:03.784 --> 02:19:05.130
It's on.
<v ->It's on.</v>

02:19:05.130 --> 02:19:06.237
<v Peter>State your name for the record, please.</v>

02:19:06.237 --> 02:19:07.590
<v ->Hi, Arushi Sharma Frank.</v>

02:19:07.590 --> 02:19:10.410
I'm sorry, there were 67 pages filed last night,

02:19:10.410 --> 02:19:14.460
but most of our data from the VPP trials itself.

02:19:14.460 --> 02:19:18.147
All right, so main issue is that right now

02:19:18.147 --> 02:19:19.980
the ERCOT system cannot see

02:19:19.980 --> 02:19:22.920
an export from the distributed system.

02:19:22.920 --> 02:19:24.380
So it can't value it, it can't settle it,

02:19:24.380 --> 02:19:26.340
it can't control it.

02:19:26.340 --> 02:19:29.640
The idea of the virtual power plant is essentially command

02:19:29.640 --> 02:19:33.540
and control over distributed energy resources while they're

02:19:33.540 --> 02:19:36.420
either reducing load or they're exporting,

02:19:36.420 --> 02:19:40.062
and while they're exporting providing ancillary services.

02:19:40.062 --> 02:19:42.210
<v Peter>You mean exporting out</v>

02:19:42.210 --> 02:19:43.732
of that physical location.
<v ->Correct.</v>

02:19:43.732 --> 02:19:45.467
Out of the physical location.
<v ->Not out of ERCOT grid..</v>

02:19:45.467 --> 02:19:48.483
<v ->Correct. Out of the physical location or this site.</v>

02:19:49.800 --> 02:19:51.870
The biggest challenge is that right now,

02:19:51.870 --> 02:19:55.110
the only recognition you could get for ancillary services

02:19:55.110 --> 02:19:56.460
from these distributed systems

02:19:56.460 --> 02:19:59.040
is as load reduction resources.

02:19:59.040 --> 02:20:00.930
So if you have, which you have,

02:20:00.930 --> 02:20:05.846
let's just take the example of a local area here, which is,

02:20:05.846 --> 02:20:09.660
you know, 7,000 parallels in, you know, the top, you know,

02:20:09.660 --> 02:20:12.690
30% of the neighborhoods in the state.

02:20:12.690 --> 02:20:15.270
All of those battery systems have the ability to provide

02:20:15.270 --> 02:20:18.840
expert capacity and to do it instantaneously in response

02:20:18.840 --> 02:20:22.530
to real time signals from ERCOT, and ERCOT can't see

02:20:22.530 --> 02:20:24.900
or recognize, or even dispatch it.

02:20:24.900 --> 02:20:28.380
So the whole point of the OBD filing is one way to look

02:20:28.380 --> 02:20:32.610
at how do you get that dispatch to ERCOT

02:20:32.610 --> 02:20:34.140
part of a larger load,

02:20:34.140 --> 02:20:36.300
we're calling it clumping, it's become a big thing,

02:20:36.300 --> 02:20:40.260
but the idea is that you have a large load that's responsive

02:20:40.260 --> 02:20:42.390
register as an aggregated load,

02:20:42.390 --> 02:20:45.840
and only some devices or sites within that aggregated load

02:20:45.840 --> 02:20:47.820
are providing injection value.

02:20:47.820 --> 02:20:50.250
It raises the same question that ERCOT is already going

02:20:50.250 --> 02:20:52.320
to face around devices that export.

02:20:52.320 --> 02:20:54.870
DERs obviously export constantly to the system.

02:20:54.870 --> 02:20:57.180
But the whole point in the virtual power plant is to take

02:20:57.180 --> 02:20:59.940
these energy-dense, high-capacity resources

02:20:59.940 --> 02:21:01.740
and move them from just dispatching

02:21:01.740 --> 02:21:04.440
at random over 24 hours of the day and moving them

02:21:04.440 --> 02:21:06.570
into a concerted command and control dispatch

02:21:06.570 --> 02:21:08.010
directly from ERCOT

02:21:08.010 --> 02:21:10.461
That's essentially the problem we're trying to solve.

02:21:10.461 --> 02:21:12.540
In terms of an approach to do it,

02:21:12.540 --> 02:21:14.220
I mean, for starters,

02:21:14.220 --> 02:21:16.830
the OBD is tabled at the technical advisory committee.

02:21:16.830 --> 02:21:19.647
So really there's no action for the board to take next week.

02:21:19.647 --> 02:21:21.210
The OBD has been proposed.

02:21:21.210 --> 02:21:22.770
It really, for us, it's a straw man

02:21:22.770 --> 02:21:24.780
to get the conversation started and remind

02:21:24.780 --> 02:21:28.200
folks that look, the data supports us registering an ALR,

02:21:28.200 --> 02:21:30.360
and aggregated load resource, right now.

02:21:30.360 --> 02:21:33.270
But if we do it right now, half the value

02:21:33.270 --> 02:21:35.673
of those systems that would be in the ALR

02:21:35.673 --> 02:21:37.170
like is literally waste.

02:21:37.170 --> 02:21:38.490
You're wasting it.

02:21:38.490 --> 02:21:41.790
So the price signal is not complete to the customer,

02:21:41.790 --> 02:21:43.230
and if it's not complete to the customer,

02:21:43.230 --> 02:21:44.640
it's not complete to the entity

02:21:44.640 --> 02:21:47.142
that's offering that resource into the market,

02:21:47.142 --> 02:21:49.590
whether it's a NOI or whether it's a retail energy provider

02:21:49.590 --> 02:21:51.150
in a competitive area.

02:21:51.150 --> 02:21:53.700
So that's the essential challenge of like why you can't

02:21:53.700 --> 02:21:55.800
register an aggregated load resource right now,

02:21:55.800 --> 02:21:58.230
and it's also why no one has tried to register one

02:21:58.230 --> 02:22:01.800
for almost a decade since we've had the policy in place.

02:22:01.800 --> 02:22:04.650
The pilot idea, I must say, is an interesting one

02:22:04.650 --> 02:22:06.240
and a potentially really good one.

02:22:06.240 --> 02:22:07.770
And a lot of markets, in Australia,

02:22:07.770 --> 02:22:10.050
for example, we had a three-year pilot

02:22:10.050 --> 02:22:11.790
where the set megawatt capacity

02:22:11.790 --> 02:22:14.280
that resources, which export could provide

02:22:14.280 --> 02:22:15.390
and all of these issues

02:22:15.390 --> 02:22:18.030
that we're talking about here that are raised by utilities

02:22:18.030 --> 02:22:22.050
and by us in the docket, they're all studied simultaneously

02:22:22.050 --> 02:22:23.820
while the pilot is ongoing,

02:22:23.820 --> 02:22:27.720
and just to address Mr. Chairman's question about resources,

02:22:27.720 --> 02:22:31.020
the work in that 67 pages of filings,

02:22:31.020 --> 02:22:34.140
98% of it is Tesla's work.

02:22:34.140 --> 02:22:37.200
The amount of time that we took from ERCOT is 15 minutes

02:22:37.200 --> 02:22:41.184
to half an hour, every couple of weeks for six months.

02:22:41.184 --> 02:22:44.460
All ERCOT does in these sorts of qualification tests,

02:22:44.460 --> 02:22:47.130
which are our normal process of qualifying any resource

02:22:47.130 --> 02:22:50.370
for ancillary service is give us a guideline,

02:22:50.370 --> 02:22:52.260
give us historical data,

02:22:52.260 --> 02:22:53.790
you look at it and you say, okay,

02:22:53.790 --> 02:22:57.120
I can make my real-time resources perform exactly like

02:22:57.120 --> 02:22:58.710
your qualification test.

02:22:58.710 --> 02:23:00.840
It is essentially the same normal work

02:23:00.840 --> 02:23:03.090
of qualifying your resource to provide that service

02:23:03.090 --> 02:23:04.710
now in the market.

02:23:04.710 --> 02:23:05.850
This is how far we've come,

02:23:05.850 --> 02:23:08.670
and I think that with the collaborative approaches that are

02:23:08.670 --> 02:23:11.640
being suggested in the docket and that I'm hearing today,

02:23:11.640 --> 02:23:13.950
we can probably continue that and keep it really

02:23:13.950 --> 02:23:17.070
a low-key effort on ERCOT's part in terms of resources

02:23:17.070 --> 02:23:17.970
and be mindful of that.

02:23:17.970 --> 02:23:19.740
I mean, we know as much as anyone else

02:23:19.740 --> 02:23:22.653
that everything takes time and resources to get done.

02:23:23.487 --> 02:23:27.810
<v ->I appreciate you contributing the work so far,</v>

02:23:27.810 --> 02:23:31.050
and I'm glad ERCOT could spare the 15 minutes.

02:23:31.050 --> 02:23:32.730
I suspect building out systems

02:23:32.730 --> 02:23:35.460
for a broader integration of the distribution system would

02:23:35.460 --> 02:23:38.340
take more than 15 minutes.
<v ->Much more. Yes.</v>

02:23:38.340 --> 02:23:42.520
<v ->So what barriers exist today to doing a pilot project</v>

02:23:42.520 --> 02:23:44.733
with a NOI?

02:23:46.500 --> 02:23:48.570
<v ->I don't know that we've even explored</v>

02:23:48.570 --> 02:23:50.973
going with a NOI specifically.

02:23:52.470 --> 02:23:56.190
I think that one of the issues is that if you have customers

02:23:56.190 --> 02:24:00.270
in a competitive area, you're able to aggregate

02:24:00.270 --> 02:24:02.640
to them across a very large load zone.

02:24:02.640 --> 02:24:07.640
And let's say you have protected circuits over a large area.

02:24:07.920 --> 02:24:09.930
To get the minimum aggregation size,

02:24:09.930 --> 02:24:12.500
you'd be able to go out and pick up 10 customers

02:24:12.500 --> 02:24:15.120
at one point, 10 customers at another point,

02:24:15.120 --> 02:24:17.550
and do the pilot without getting into serious issues

02:24:17.550 --> 02:24:21.540
around congestion, specifically zonal versus nodal.

02:24:21.540 --> 02:24:24.510
In a NOI, depending on where

02:24:24.510 --> 02:24:26.670
the aggregation was being built,

02:24:26.670 --> 02:24:27.990
you might be a little more constrained,

02:24:27.990 --> 02:24:30.270
'cause NOI territories are generally smaller.

02:24:30.270 --> 02:24:31.940
If you're trying to stay-
<v ->Got some pretty big ones.</v>

02:24:31.940 --> 02:24:35.430
<v ->You got (indistinct) and some other pretty large areas,</v>

02:24:35.430 --> 02:24:37.590
but that is a potential issue.

02:24:37.590 --> 02:24:39.150
Eric, do you think there are others?

02:24:39.150 --> 02:24:41.670
<v ->There's one specific issue that's pretty key,</v>

02:24:41.670 --> 02:24:43.530
which is that in the competitive areas,

02:24:43.530 --> 02:24:47.000
we have EZIDs that go through the ERCOT process,

02:24:47.000 --> 02:24:50.520
so ERCOT has direct access to all the meter data that they

02:24:50.520 --> 02:24:51.600
don't have for NOIs.

02:24:51.600 --> 02:24:53.370
So we'd have to create a new process

02:24:53.370 --> 02:24:54.203
to get that meter data earlier.

02:24:54.203 --> 02:24:55.980
<v ->The NOI would have access to their meter data.</v>

02:24:55.980 --> 02:24:58.410
<v ->They would, but the point is for ERCOT to get confident.</v>

02:24:58.410 --> 02:25:00.900
And so there's an existing process for ERCOT to get

02:25:00.900 --> 02:25:02.220
all the (indistinct)
<v ->I think the point is</v>

02:25:02.220 --> 02:25:06.000
for the concept to be proved out-

02:25:06.000 --> 02:25:07.666
<v Eric>Sure.</v>
<v ->In some sort of partnership</v>

02:25:07.666 --> 02:25:08.910
like Commissioner McAdams mentioned.

02:25:08.910 --> 02:25:10.560
<v ->Yep.</v>
<v ->And that data</v>

02:25:10.560 --> 02:25:13.350
then brought to the broader stakeholder community.

02:25:13.350 --> 02:25:15.150
<v ->You're right.</v>
<v ->Which sounds like</v>

02:25:15.150 --> 02:25:17.070
it can be accomplished within an existing NOI

02:25:17.070 --> 02:25:20.970
if there are enough resources in the geographic footprint.

02:25:20.970 --> 02:25:22.530
Is that?

02:25:22.530 --> 02:25:23.850
<v ->You're not wrong,</v>

02:25:23.850 --> 02:25:25.827
but we'd have to reinvent the wheel on how to get

02:25:25.827 --> 02:25:27.510
the meter data to ERCOT,

02:25:27.510 --> 02:25:32.510
and so it'd be a way to simplify the work

02:25:32.512 --> 02:25:34.890
of the pilot program.

02:25:34.890 --> 02:25:36.480
ERCOT would have to figure out a new way to look

02:25:36.480 --> 02:25:39.390
at meter data that they don't currently have.

02:25:39.390 --> 02:25:41.970
Whereas today, if there's a competitive area,

02:25:41.970 --> 02:25:44.705
there's an existing process we've used since 2001

02:25:44.705 --> 02:25:46.740
for ERCOT to see meter data in a competitive area.

02:25:46.740 --> 02:25:47.743
So it just-
<v ->Well, hold on.</v>

02:25:47.743 --> 02:25:48.810
<v Lori>It's more efficient process.</v>

02:25:48.810 --> 02:25:49.650
Is that what I'm hearing?

02:25:49.650 --> 02:25:51.420
<v ->So Liz Jones for Encore.</v>

02:25:51.420 --> 02:25:55.170
So first of all, the meter data is not gonna be sufficient

02:25:55.170 --> 02:25:57.630
to support an aggregated load resource,

02:25:57.630 --> 02:26:00.540
because a meter measures inflows and outflows,

02:26:00.540 --> 02:26:03.660
and it's my understanding what Tesla's looking for is

02:26:03.660 --> 02:26:08.660
to actually account for what's going on behind that meter

02:26:08.880 --> 02:26:11.190
with respect to a power wall.

02:26:11.190 --> 02:26:14.670
So that is an issue.

02:26:14.670 --> 02:26:19.050
The second issue is with respect to the testing that Tesla

02:26:19.050 --> 02:26:22.740
has done, Encore was not advised of the test,

02:26:22.740 --> 02:26:26.460
and we have not been able to take a closer look

02:26:26.460 --> 02:26:29.117
at what issues are or are not,

02:26:29.117 --> 02:26:32.580
I mean, I'm not gonna foretell anything.

02:26:32.580 --> 02:26:37.580
What issues may result from an exporting

02:26:37.770 --> 02:26:40.290
DER on the system,

02:26:40.290 --> 02:26:43.200
particularly in such small increments and aggregated,

02:26:43.200 --> 02:26:45.000
as has been suggested.

02:26:45.000 --> 02:26:49.500
I will tell you that in the past week we've been engaged

02:26:49.500 --> 02:26:53.370
in discussions with Tesla, we are supportive of a pilot.

02:26:53.370 --> 02:26:57.960
The reason we're supportive of a pilot is that it can be

02:26:57.960 --> 02:27:02.770
isolated and reviewed and hopefully not

02:27:04.740 --> 02:27:08.850
have larger transmission system implications.

02:27:08.850 --> 02:27:12.180
But I will tell you that nobody tests

02:27:12.180 --> 02:27:15.150
on the transmission system without ERCOT's sign off,

02:27:15.150 --> 02:27:19.620
and I feel pretty strongly that a similar proposition is

02:27:19.620 --> 02:27:21.513
necessary on the distribution system.

02:27:22.650 --> 02:27:25.980
<v ->And the meters that do the real-time telemetry</v>

02:27:25.980 --> 02:27:29.370
are individual device meters that are actually

02:27:29.370 --> 02:27:31.710
attached to the power wall system itself

02:27:31.710 --> 02:27:33.600
and they provide two-second telemetry.

02:27:33.600 --> 02:27:36.630
So yeah, the revenue meter is a 15-minute interval meter.

02:27:36.630 --> 02:27:37.463
<v Peter>Yeah.</v>

02:27:37.463 --> 02:27:38.528
<v ->And then the additional one is the one</v>

02:27:38.528 --> 02:27:39.450
that does instantaneous.
<v ->So the power wall</v>

02:27:39.450 --> 02:27:40.710
meter data would be-
<v ->Correct.</v>

02:27:40.710 --> 02:27:43.170
<v Peter>Available to Tesla, the company.</v>

02:27:43.170 --> 02:27:44.640
<v ->Yes.</v>
<v ->Pending terms</v>

02:27:44.640 --> 02:27:46.680
and conditions for the customer,

02:27:46.680 --> 02:27:48.530
and presumably ERCOT could read that.

02:27:49.890 --> 02:27:50.723
<v ->You're right,</v>

02:27:50.723 --> 02:27:55.723
but to verify it for the measurement verification process,

02:27:56.370 --> 02:27:59.580
in the past, ERCOT like to see meter reads on their meters

02:27:59.580 --> 02:28:03.150
they get as well to confirm the data that they're receiving.

02:28:03.150 --> 02:28:05.940
<v ->You're not gonna see anything on the meter except inflows</v>

02:28:05.940 --> 02:28:07.653
and outflows, Eric.
<v ->Well,</v>

02:28:09.660 --> 02:28:11.700
there's a measurement verification process called

02:28:11.700 --> 02:28:12.810
meter before meter after

02:28:12.810 --> 02:28:14.910
that's been used for these processes before,

02:28:14.910 --> 02:28:18.180
and I think our approach that we've suggested

02:28:18.180 --> 02:28:21.600
is to use both sets of data in order to confirm

02:28:21.600 --> 02:28:23.900
what's happening on both and have it match up.

02:28:25.230 --> 02:28:27.660
<v ->Well, and that's certainly possible,</v>

02:28:27.660 --> 02:28:30.870
but that also leads to the question...

02:28:30.870 --> 02:28:34.290
I'm not supportive of a task force at this point, either.

02:28:34.290 --> 02:28:36.930
I do think a pilot would be more instructive,

02:28:36.930 --> 02:28:40.260
but I do think a pilot design is going to be important,

02:28:40.260 --> 02:28:43.120
both for ERCOT the settlement entity,

02:28:43.120 --> 02:28:45.510
ERCOT the reliability operator,

02:28:45.510 --> 02:28:49.050
and whatever distribution utility

02:28:49.050 --> 02:28:52.830
is participating in that pilot.

02:28:52.830 --> 02:28:55.200
<v ->So I there's been a lot of...</v>

02:28:55.200 --> 02:28:59.507
Woody, do y'all have an opinion on any of this information

02:28:59.507 --> 02:29:00.660
that's being shared?

02:29:00.660 --> 02:29:01.942
No?
(Peter laughs)

02:29:01.942 --> 02:29:04.442
(Lori laughs)

02:29:10.991 --> 02:29:13.740
<v ->Kenan Ogelman with ERCOT.</v>

02:29:13.740 --> 02:29:18.740
So let me just start off by saying that ERCOT agrees

02:29:19.070 --> 02:29:23.670
with, I think, the point that Commissioner Glotfelty made,

02:29:23.670 --> 02:29:28.360
that solving the DER issue ends up being a critical

02:29:30.300 --> 02:29:33.267
answer to reliably maintaining the grid.

02:29:33.267 --> 02:29:35.850
And I think that's a really important point

02:29:35.850 --> 02:29:37.293
to just start off with.

02:29:38.940 --> 02:29:41.940
Now, the devils is always in the details,

02:29:41.940 --> 02:29:44.970
and getting that right is really important.

02:29:44.970 --> 02:29:48.273
And just as y'all pointed out,

02:29:49.800 --> 02:29:54.750
there has to be this really effective partnership

02:29:54.750 --> 02:29:58.860
between ERCOT and the TDSPs to make it all work out.

02:29:58.860 --> 02:30:03.000
And I mean, their concerns end up,

02:30:03.000 --> 02:30:05.070
in some instances, being paramount,

02:30:05.070 --> 02:30:07.950
they have to manage that distribution system.

02:30:07.950 --> 02:30:09.270
ERCOT doesn't.

02:30:09.270 --> 02:30:14.270
So with those initial, you know, hierarching statements,

02:30:14.790 --> 02:30:18.750
what I would say is we think a pilot

02:30:18.750 --> 02:30:22.140
with a willing DSP partner,

02:30:22.140 --> 02:30:25.530
and that could be anywhere in the ERCOT footprint,

02:30:25.530 --> 02:30:28.650
would be a good way to move forward.

02:30:28.650 --> 02:30:33.650
We have serious concerns about the OBDRR.

02:30:35.220 --> 02:30:39.990
It's primarily around the fact that there are these things

02:30:39.990 --> 02:30:44.990
that are injecting into the grid being netted somewhere else

02:30:45.150 --> 02:30:49.510
in the entire footprint of the zone

02:30:51.000 --> 02:30:52.470
with load.

02:30:52.470 --> 02:30:54.330
And that actually could make your, you know,

02:30:54.330 --> 02:30:59.010
heat map worse because you could have load going up

02:30:59.010 --> 02:31:02.340
in the wrong area and or generation ramping up

02:31:02.340 --> 02:31:04.290
in the wrong area.

02:31:04.290 --> 02:31:09.290
So we think pilot is a really good idea.

02:31:09.870 --> 02:31:13.500
That does not mean that we should stop

02:31:13.500 --> 02:31:16.200
on getting to a long-term answer,

02:31:16.200 --> 02:31:19.350
which I think happens in the ERCOT process.

02:31:19.350 --> 02:31:23.520
I don't want say task force or anything in particular,

02:31:23.520 --> 02:31:26.546
but that also has to, we have to keep working on that.

02:31:26.546 --> 02:31:28.192
<v ->That's an incredibly important point</v>

02:31:28.192 --> 02:31:32.040
in this framework or construct, the difference

02:31:32.040 --> 02:31:34.560
in geographical, physical location

02:31:34.560 --> 02:31:38.973
of the exporting, discharging device and the load.

02:31:39.900 --> 02:31:42.870
Right now, a home with a power wall

02:31:42.870 --> 02:31:44.100
is important for the public to know,

02:31:44.100 --> 02:31:45.660
a home with a power wall, for example,

02:31:45.660 --> 02:31:48.180
or Entergy, Generac, or anything else,

02:31:48.180 --> 02:31:51.240
can reduce its load in the same physical location

02:31:51.240 --> 02:31:53.280
by using that backup resource.

02:31:53.280 --> 02:31:55.727
That happens all the time today in ERCOT.

02:31:55.727 --> 02:31:58.080
So I wanna make sure the public is clear that we're not

02:31:58.080 --> 02:32:01.050
in no way preventing that right from happening now.

02:32:01.050 --> 02:32:04.170
Solar panel, any configuration thereof that happens now,

02:32:04.170 --> 02:32:07.593
Kenan's very important point of the difference in,

02:32:08.640 --> 02:32:10.950
it's not a reduction of load over here,

02:32:10.950 --> 02:32:15.630
it's a addition, a discharge of a power wall over here

02:32:15.630 --> 02:32:19.593
in Abilene, which may not necessarily help in Houston,

02:32:20.970 --> 02:32:22.890
but these are the things that we need to figure out.

02:32:22.890 --> 02:32:25.170
So that's the difference in geographic location

02:32:25.170 --> 02:32:27.423
is a hugely important distinction here.

02:32:29.268 --> 02:32:30.101
Do you have a question?
(phone ringing)

02:32:30.101 --> 02:32:31.623
<v ->No, I mean, I'm just trying to figure out,</v>

02:32:31.623 --> 02:32:33.147
'cause it sounds like, you know,

02:32:33.147 --> 02:32:34.059
ERCOT, you have concerns with...

02:32:34.059 --> 02:32:35.958
Come on, sorry.
(phone ringing)

02:32:35.958 --> 02:32:38.700
You have concerns with the OBDRR,

02:32:38.700 --> 02:32:42.270
and I'm wondering if the most productive way to approach

02:32:42.270 --> 02:32:47.270
this issue is through a limited pilot that will explore

02:32:48.240 --> 02:32:49.650
all of these issues.

02:32:49.650 --> 02:32:54.650
And then out of that pilot would come market rule changes,

02:32:54.720 --> 02:32:59.720
potential market rule changes that are then more effective

02:32:59.870 --> 02:33:03.960
at at addressing these VPP issues from an ERCOT standpoint,

02:33:03.960 --> 02:33:08.960
but also from a TDU and DSP and you know,

02:33:11.400 --> 02:33:13.947
VPP provider standpoint rather than...

02:33:13.947 --> 02:33:17.460
You know, 'cause I task forces,

02:33:17.460 --> 02:33:18.840
I think, you know, Liz, you mentioned

02:33:18.840 --> 02:33:21.630
that ERCOT's had a task force on, you know, DERs

02:33:21.630 --> 02:33:23.340
and addressed a lot of these issues already,

02:33:23.340 --> 02:33:25.590
and I don't wanna reinvent the wheel.

02:33:25.590 --> 02:33:27.480
It's just kind of coming up with a roadmap,

02:33:27.480 --> 02:33:32.480
is what I'm hearing, to how to figure out what opportunities

02:33:32.790 --> 02:33:35.190
and challenges are in a way that is

02:33:35.190 --> 02:33:37.240
efficient and effective

02:33:38.370 --> 02:33:40.770
so that we can see if we can reap rewards

02:33:40.770 --> 02:33:43.140
out of, you know, benefits, reliability benefits,

02:33:43.140 --> 02:33:46.770
from this, you know, VPP concert.

02:33:46.770 --> 02:33:48.150
<v Liz>If I may.</v>

02:33:48.150 --> 02:33:49.150
<v ->Oh, go ahead, Liz.</v>

02:33:51.060 --> 02:33:54.060
<v ->Although ERCOT and Tesla have been in discussion</v>

02:33:54.060 --> 02:33:58.590
for several months, the wider market participant community

02:33:58.590 --> 02:34:02.070
has been in discussion for a matter of a few weeks,

02:34:02.070 --> 02:34:06.120
and I think we would all be well served to have

02:34:06.120 --> 02:34:07.620
an opportunity to go back

02:34:07.620 --> 02:34:10.980
and think about these circumstances

02:34:10.980 --> 02:34:12.960
and how we might proceed,

02:34:12.960 --> 02:34:17.550
and Encore is committed to having that conversation,

02:34:17.550 --> 02:34:21.750
but rather than trying to resolve the matter today,

02:34:21.750 --> 02:34:26.750
if you all could defer this for a month, six weeks,

02:34:26.820 --> 02:34:28.980
so that we could figure out if it's feasible

02:34:28.980 --> 02:34:32.070
to design a pilot, what that pilot might look like,

02:34:32.070 --> 02:34:33.750
and how we might answer

02:34:33.750 --> 02:34:37.092
at least some of the questions that you have posed.

02:34:37.092 --> 02:34:38.037
<v Peter>Good.</v>

02:34:38.037 --> 02:34:39.060
Thank you, Liz.
<v ->Just one more point</v>

02:34:39.060 --> 02:34:40.320
I was gonna make on the pilot is,

02:34:40.320 --> 02:34:43.560
in the Commission's rule on ERCOT pilot programs,

02:34:43.560 --> 02:34:45.930
it requires close coordination with the executive director

02:34:45.930 --> 02:34:47.551
and Commission staff,

02:34:47.551 --> 02:34:49.350
so it's a way for y'all to make sure that we don't

02:34:49.350 --> 02:34:51.153
overburden ERCOT in the process.

02:34:52.350 --> 02:34:53.700
<v ->Appreciate you highlighting that.</v>

02:34:53.700 --> 02:34:55.773
We'll make sure keep that in mind.

02:34:58.290 --> 02:34:59.433
Very good point, Liz.

02:35:01.410 --> 02:35:04.620
From Lori's questions down to Jimmy's layout,

02:35:04.620 --> 02:35:06.627
what I'm hearing is I hate to say this,

02:35:06.627 --> 02:35:09.630
but we almost need a task force to design the pilot project.

02:35:09.630 --> 02:35:12.213
(group laughs)

02:35:14.250 --> 02:35:16.560
Just calling 'em like I see 'em.

02:35:16.560 --> 02:35:20.490
But most importantly, I'd say in the spirit

02:35:20.490 --> 02:35:22.413
of actually moving forward.
<v ->Yeah.</v>

02:35:23.670 --> 02:35:27.060
<v ->We have an initiative here at the Commission led initially</v>

02:35:27.060 --> 02:35:29.370
by Commissioner McAdams with your,

02:35:29.370 --> 02:35:33.030
once you got here, joint leadership,

02:35:33.030 --> 02:35:36.963
we have a forum for exactly these kinds of discussions.

02:35:37.800 --> 02:35:42.800
So I would propose that you all-

02:35:44.100 --> 02:35:45.720
<v ->Why don't-</v>
<v ->Work with the stakeholders</v>

02:35:45.720 --> 02:35:46.920
like Liz?
<v ->Why don't</v>

02:35:46.920 --> 02:35:48.153
one of us follow a memo?

02:35:49.072 --> 02:35:50.280
(Commissioners laugh)

02:35:50.280 --> 02:35:52.380
<v ->Before-</v>
<v ->You've been talking all day</v>

02:35:52.380 --> 02:35:54.390
about how you don't wanna file any more memos.

02:35:54.390 --> 02:35:57.120
<v ->Before next open meeting
(Jimmy laughs)</v>

02:35:57.120 --> 02:36:00.090
delineating a process, a timetable,

02:36:00.090 --> 02:36:03.930
about deliverability or deliverables associated with this.

02:36:03.930 --> 02:36:07.080
Again, putting an RFI out to stakeholders,

02:36:07.080 --> 02:36:09.780
again, interested parties on who could come

02:36:09.780 --> 02:36:11.010
to the table with Tesla,

02:36:11.010 --> 02:36:16.010
partner with Tesla or any DER system

02:36:16.170 --> 02:36:18.150
that could be overseen by ERCOT,

02:36:18.150 --> 02:36:21.510
or can work in coordination with ERCOT,

02:36:21.510 --> 02:36:24.750
just so they don't, any pilot, ultimately,

02:36:24.750 --> 02:36:26.550
doesn't foul up the transmission system,

02:36:26.550 --> 02:36:29.673
and is closely managed at distribution, and-

02:36:30.684 --> 02:36:31.767
<v ->Yeah, I mean, do all those things, but do it...</v>

02:36:32.721 --> 02:36:34.410
<v ->We'll file them. Well, somebody will.</v>

02:36:34.410 --> 02:36:35.970
<v ->I mean, it doesn't have to have</v>

02:36:35.970 --> 02:36:37.017
a hard and fast sell on it,

02:36:37.017 --> 02:36:38.160
but the both of y'all-
<v ->No, or-</v>

02:36:38.160 --> 02:36:40.620
<v ->Is the one's leading this initiative,</v>

02:36:40.620 --> 02:36:44.220
sit down, do what you did with CDR SARA,

02:36:44.220 --> 02:36:45.693
y'all sit down with the stakeholders.

02:36:45.693 --> 02:36:48.540
<v ->Yep.</v>
<v ->And start pulling</v>

02:36:48.540 --> 02:36:51.780
these parameters together, work with the stakeholders,

02:36:51.780 --> 02:36:55.560
and at the same time, Tesla and anybody else who wants

02:36:55.560 --> 02:36:59.790
to pursue this kind of pilot project,

02:36:59.790 --> 02:37:03.540
in the meantime, please be actively engaged

02:37:03.540 --> 02:37:05.903
with not only the TDSPs,

02:37:05.903 --> 02:37:10.903
but the DSPs, and actively searching for a potential partner

02:37:12.660 --> 02:37:17.660
who could come to the table with you arm in arm.

02:37:18.000 --> 02:37:19.009
<v Arusha>Absolutely.</v>

02:37:19.009 --> 02:37:22.950
<v ->And so it's a more comprehensive approach than-</v>

02:37:22.950 --> 02:37:24.590
<v ->Sure.</v>

02:37:24.590 --> 02:37:25.423
<v Peter>Just kind of swinging wildly.</v>

02:37:25.423 --> 02:37:27.287
<v ->And we can commit to doing that with NOI partners,</v>

02:37:27.287 --> 02:37:30.450
as well as with TDSPs like Encore.

02:37:30.450 --> 02:37:33.060
I mean, if anything what we're learning

02:37:33.060 --> 02:37:35.250
from discussing with Encore more recently

02:37:35.250 --> 02:37:38.970
is that learning experience for the utilities is important,

02:37:38.970 --> 02:37:41.910
so if that experience can be part of this pilot,

02:37:41.910 --> 02:37:43.830
and we can also, at the same time,

02:37:43.830 --> 02:37:46.200
we're considering doing more workshops

02:37:46.200 --> 02:37:47.790
or other working sessions where we just have

02:37:47.790 --> 02:37:49.677
all the companies that are participating

02:37:49.677 --> 02:37:50.700
presenting informations

02:37:50.700 --> 02:37:52.057
in coordination with DSPs.
<v ->Defer to Commissioners</v>

02:37:52.057 --> 02:37:54.106
Glotfelty and McAdams to provide the-

02:37:54.106 --> 02:37:57.636
<v ->Yes. We'll invite them personally. (laughs)</v>

02:37:57.636 --> 02:37:58.680
<v ->But I think those are gonna be the ones</v>

02:37:58.680 --> 02:38:00.278
doing the inviting.
<v ->Yeah.</v>

02:38:00.278 --> 02:38:02.220
<v Arusha>All right. Thank you.</v>

02:38:02.220 --> 02:38:05.433
<v ->And Commissioner McAdams, if you would,</v>

02:38:08.610 --> 02:38:11.400
ideally, take a scope of the issues

02:38:11.400 --> 02:38:13.830
before you set timelines.

02:38:13.830 --> 02:38:15.510
<v ->Yeah, no, I get it Liz.</v>

02:38:15.510 --> 02:38:17.483
I mean, we we'll get it done.
(group laughs)

02:38:17.483 --> 02:38:18.930
<v ->Yeah. Go ahead.</v>

02:38:18.930 --> 02:38:19.763
<v ->Oh, I'm good.</v>

02:38:19.763 --> 02:38:22.830
I think you hit it on the nose in terms of,

02:38:22.830 --> 02:38:23.910
you know, workshops.

02:38:23.910 --> 02:38:24.743
I think, you know,

02:38:24.743 --> 02:38:27.060
having a workshop Commission-led workshop, whatever,

02:38:27.060 --> 02:38:28.830
but a workshop, period, just to get, you know,

02:38:28.830 --> 02:38:32.190
some parameters in place for the pilot, and-

02:38:34.227 --> 02:38:36.630
<v ->And I'd say, and as we work through this,</v>

02:38:36.630 --> 02:38:38.040
this is exactly why we have

02:38:38.040 --> 02:38:40.650
y'all leading these kinds of initiatives,

02:38:40.650 --> 02:38:42.150
coordinate with the stakeholders.

02:38:42.150 --> 02:38:45.150
We appreciate working with the TDSPs, the DSPs,

02:38:45.150 --> 02:38:49.050
to to come together with a partner.

02:38:49.050 --> 02:38:53.670
And most importantly, as for everybody involved in all this,

02:38:53.670 --> 02:38:56.040
we want to as always explore the opportunities

02:38:56.040 --> 02:38:58.893
for every avenue to all of the above,

02:38:59.760 --> 02:39:04.650
but at no risk to reliability.

02:39:04.650 --> 02:39:06.155
We're gonna start with a small steps.

02:39:06.155 --> 02:39:07.710
<v ->Yeah.</v>
<v ->To ensure that</v>

02:39:07.710 --> 02:39:10.530
in this isolated, whatever version of this type

02:39:10.530 --> 02:39:13.110
of pilot project eventually emerges,

02:39:13.110 --> 02:39:15.630
that on an ongoing basis,

02:39:15.630 --> 02:39:18.480
at any point in time, these initiatives

02:39:18.480 --> 02:39:21.270
and efforts present no risk to reliability

02:39:21.270 --> 02:39:23.190
for the people of Texas.

02:39:23.190 --> 02:39:24.810
As always, reliability is paramount.

02:39:24.810 --> 02:39:25.674
<v ->You bet.</v>

02:39:25.674 --> 02:39:27.674
<v ->All right? All right?</v>

02:39:28.590 --> 02:39:29.520
<v ->Thank you.</v>
<v ->Thank y'all.</v>

02:39:29.520 --> 02:39:30.383
<v Arusha>Thank you.</v>

02:39:31.243 --> 02:39:34.920
<v ->I would highlight that the feedback to our RFI</v>

02:39:34.920 --> 02:39:37.020
to the system was due yesterday.

02:39:37.020 --> 02:39:38.336
So they came in yesterday.
<v ->Yeah, we still got</v>

02:39:38.336 --> 02:39:40.772
a lot to work with.
<v ->Everybody's really eager.</v>

02:39:40.772 --> 02:39:42.446
But it was yesterday.

02:39:42.446 --> 02:39:44.250
So I appreciate that.
<v ->Thanks for this discussion.</v>

02:39:44.250 --> 02:39:46.860
<v ->Yeah, well, this has been, something has been</v>

02:39:46.860 --> 02:39:49.680
in the works for a long time, but yeah,

02:39:49.680 --> 02:39:52.530
it's a long list of things to work on.

02:39:52.530 --> 02:39:54.210
<v ->Thank you, Eric.</v>
<v ->Thank you.</v>

02:39:54.210 --> 02:39:55.043
<v ->Thanks Eric.</v>

02:39:56.721 --> 02:39:58.113
All right.

02:39:59.820 --> 02:40:00.653
<v Stephen>35, sir.</v>

02:40:00.653 --> 02:40:01.530
<v ->Oh, sorry, yeah.</v>

02:40:01.530 --> 02:40:03.240
I think we've covered everything on 34?

02:40:03.240 --> 02:40:04.134
<v ->Yes, sir.</v>

02:40:04.134 --> 02:40:05.847
<v ->All right.</v>

02:40:05.847 --> 02:40:07.827
35. Please lay that out for us, Mr. Journeay.

02:40:07.827 --> 02:40:10.470
<v ->Item 35 is project 53493.</v>

02:40:10.470 --> 02:40:13.200
It's emergency response service.

02:40:13.200 --> 02:40:15.240
Commission staff filed a memo and proposal

02:40:15.240 --> 02:40:18.510
for publication to amend 25.507.

02:40:18.510 --> 02:40:21.103
Chairman, you have a memo in this matter.

02:40:21.103 --> 02:40:23.460
<v ->I do. I do have a memo.</v>

02:40:23.460 --> 02:40:25.980
This is pretty straightforward.

02:40:25.980 --> 02:40:27.510
This Commission has been very deliberate

02:40:27.510 --> 02:40:30.540
in its phase one market redesign to make

02:40:30.540 --> 02:40:33.240
the ERS, industrial demand response program,

02:40:33.240 --> 02:40:38.240
more available and more ready to be utilized in the event

02:40:38.790 --> 02:40:39.930
of tight grid conditions.

02:40:39.930 --> 02:40:43.260
Most importantly, this Commission has been very deliberate

02:40:43.260 --> 02:40:46.620
and direct in its intention

02:40:46.620 --> 02:40:51.540
to deploy these industrial demand response resources

02:40:51.540 --> 02:40:54.000
that we have already paid for as ratepayers

02:40:54.000 --> 02:40:55.770
to deploy these resources

02:40:55.770 --> 02:40:57.780
in the event of tide grid conditions

02:40:57.780 --> 02:41:00.630
before we ask residential households

02:41:00.630 --> 02:41:03.780
and residential customers to alter

02:41:03.780 --> 02:41:06.300
their energy consumption.

02:41:06.300 --> 02:41:07.680
In that spirit,

02:41:07.680 --> 02:41:12.330
this rule is designed to ensure that if and when ERCOT does

02:41:12.330 --> 02:41:15.633
deploy ERS industrial demand resources,

02:41:16.470 --> 02:41:18.960
those resources can be readily reloaded,

02:41:18.960 --> 02:41:21.270
so we can essentially use those resources

02:41:21.270 --> 02:41:22.770
more than once a season.

02:41:22.770 --> 02:41:24.370
If they are completely depleted,

02:41:25.890 --> 02:41:28.350
you'll seen my memo and I'm sure staff has provided

02:41:28.350 --> 02:41:30.033
whatever briefings are necessary.

02:41:32.820 --> 02:41:35.160
I don't think there's anything more complicated

02:41:35.160 --> 02:41:36.990
about it than that, but would be happy to hear

02:41:36.990 --> 02:41:38.340
your thoughts and comments.

02:41:41.520 --> 02:41:44.397
Or entertain a motion to approve the DFP.

02:41:46.062 --> 02:41:48.601
<v ->I will move to do that.</v>

02:41:48.601 --> 02:41:49.434
<v ->Second.</v>
<v ->Second.</v>

02:41:49.434 --> 02:41:50.340
We got a motion and a second.

02:41:50.340 --> 02:41:52.302
All in favor, say aye.
<v ->Aye.</v>

02:41:52.302 --> 02:41:53.135
(indistinct)

02:41:53.135 --> 02:41:53.968
<v ->Sorry?</v>

02:41:53.968 --> 02:41:54.801
(indistinct)

02:41:54.801 --> 02:41:55.980
<v ->Consistent with his memo.</v>
<v ->Yep.</v>

02:41:55.980 --> 02:41:57.720
<v ->That was my motion.</v>
<v ->Motion and a second.</v>

02:41:57.720 --> 02:41:59.790
All in favor, say aye.
<v ->Aye.</v>

02:41:59.790 --> 02:42:01.110
<v ->None opposed. Motion passes.</v>

02:42:01.110 --> 02:42:02.220
Thank y'all.

02:42:02.220 --> 02:42:06.420
Don't have anything on 36 through 40.

02:42:06.420 --> 02:42:07.923
Item number 41, please, sir.

02:42:09.844 --> 02:42:11.850
I think that's Mr. Hunter.

02:42:11.850 --> 02:42:15.660
<v ->Item 41 is project 43517, delegation of authority</v>

02:42:15.660 --> 02:42:17.343
generally the executive director.

02:42:19.050 --> 02:42:21.003
Federal government comes to visit.

02:42:22.950 --> 02:42:25.590
<v ->Good afternoon. Chairman, Commissioners.</v>

02:42:25.590 --> 02:42:28.440
Before you today is a request from staff to delegate

02:42:28.440 --> 02:42:30.540
to the executive director of the authority to finalize

02:42:30.540 --> 02:42:33.900
and file on behalf of the Commission

02:42:33.900 --> 02:42:36.780
comments on the Environmental Protection Agency

02:42:36.780 --> 02:42:39.758
Transport Federal Implementation Plan

02:42:39.758 --> 02:42:42.270
on or before June 21st.

02:42:42.270 --> 02:42:44.220
We are continuing to revise and refine the draft

02:42:44.220 --> 02:42:48.080
we sent you earlier this week and we're working with ERCOT

02:42:48.080 --> 02:42:50.640
and TCQ and the Attorney General's office,

02:42:50.640 --> 02:42:53.070
and we'll finalize those comments and happy

02:42:53.070 --> 02:42:54.600
to answer any questions.

02:42:54.600 --> 02:42:56.670
<v ->Thank you, sir. Questions, comments?</v>

02:42:56.670 --> 02:42:57.840
<v Jimmy>I think he's doing the right thing.</v>

02:42:57.840 --> 02:42:59.747
<v Will>Yeah, it was a mountain of work, Tom.</v>

02:42:59.747 --> 02:43:00.580
<v Peter>Yeah, A lot of work,</v>

02:43:00.580 --> 02:43:03.450
a lot of coordination appreciate the efforts on those.

02:43:03.450 --> 02:43:05.490
<v ->And obviously this issue could have a huge impact</v>

02:43:05.490 --> 02:43:07.028
on the reliability of our system.

02:43:07.028 --> 02:43:07.861
<v ->Absolutely.</v>

02:43:07.861 --> 02:43:09.810
<v ->So being on top of it and in front of it,</v>

02:43:09.810 --> 02:43:13.835
I applaud y'alls efforts to work on behalf of the state.

02:43:13.835 --> 02:43:15.180
Thank you.
<v ->Thank you.</v>

02:43:15.180 --> 02:43:16.026
<v ->And consumers
(indistinct)</v>

02:43:16.026 --> 02:43:16.912
who pay everything.

02:43:16.912 --> 02:43:19.320
<v ->Yeah. Do we have a motion.</v>

02:43:19.320 --> 02:43:20.310
<v ->So with that, Mr. Chairman,</v>

02:43:20.310 --> 02:43:21.230
I'd moved to delegate authority

02:43:21.230 --> 02:43:23.490
to the executive director.
<v ->Second.</v>

02:43:23.490 --> 02:43:25.530
<v ->All in favor, say aye.</v>
<v ->Aye.</v>

02:43:25.530 --> 02:43:26.940
None opposed, motion passes.

02:43:26.940 --> 02:43:30.433
Nothing on 42, 43, which brings us to our

02:43:32.493 --> 02:43:36.963
item 45, which is update from our executive director.

02:43:38.520 --> 02:43:40.290
<v ->Thank you, Mr. Chairman.</v>

02:43:40.290 --> 02:43:41.760
Good afternoon. Commissioners.

02:43:41.760 --> 02:43:45.210
First, I'd like to welcome Connie back from her stay

02:43:45.210 --> 02:43:47.400
in Oklahoma City and congratulate her daughter,

02:43:47.400 --> 02:43:51.180
Camille, and the UT softball team for their run

02:43:51.180 --> 02:43:52.950
in the Women's College World Series all the way

02:43:52.950 --> 02:43:54.990
to the Championship Series.

02:43:54.990 --> 02:43:56.403
Amazing job by them.

02:43:57.900 --> 02:44:00.210
Secondly, I just want, you know,

02:44:00.210 --> 02:44:02.520
a couple meetings ago I pointed out that Charlie Hemmeline

02:44:02.520 --> 02:44:03.810
left the Solar Association,

02:44:03.810 --> 02:44:05.850
so we had an opening on TERC.

02:44:05.850 --> 02:44:09.270
As of yesterday, Bob Helton has accepted that post.

02:44:09.270 --> 02:44:12.600
Bob has, you know, some 30 years of experience

02:44:12.600 --> 02:44:14.100
in the industry, currently works

02:44:14.100 --> 02:44:15.780
for NG and his vice chair of TAC,

02:44:15.780 --> 02:44:18.660
so he brings a depth and breadth of knowledge

02:44:18.660 --> 02:44:21.120
that will be a great asset on TERC,

02:44:21.120 --> 02:44:22.350
and I just want to thank him

02:44:22.350 --> 02:44:25.140
for accepting that post yesterday.

02:44:25.140 --> 02:44:27.540
And finally, you know, most of the time I try

02:44:27.540 --> 02:44:29.640
to keep these informative and light,

02:44:29.640 --> 02:44:31.740
but on a bit of a somber note,

02:44:31.740 --> 02:44:35.220
I'm sure most of you all heard that on May 31st,

02:44:35.220 --> 02:44:37.830
Former Commissioner Brandy Marty Marquez's mother

02:44:37.830 --> 02:44:39.000
passed away.

02:44:39.000 --> 02:44:41.790
Today is the visitation rosary

02:44:41.790 --> 02:44:44.370
and tomorrow's the mass for her,

02:44:44.370 --> 02:44:46.140
so just wanted to take this opportunity to send

02:44:46.140 --> 02:44:48.900
our thoughts, prayers, and love out to Brandy, Enrique,

02:44:48.900 --> 02:44:52.020
Max, and the whole Marty family,

02:44:52.020 --> 02:44:55.020
as they deal in their grief and these difficult times.

02:44:55.020 --> 02:44:56.370
And let them know that we love them

02:44:56.370 --> 02:44:59.850
and we support them in this time of grief,

02:44:59.850 --> 02:45:02.441
like I said, and know that they are,

02:45:02.441 --> 02:45:04.650
you know, we're lifting them up

02:45:04.650 --> 02:45:07.230
and hope that they find comfort

02:45:07.230 --> 02:45:09.540
in their family and their faith.

02:45:09.540 --> 02:45:11.310
<v ->Indeed condolences from all of us</v>

02:45:11.310 --> 02:45:15.450
to the family and extended family.

02:45:15.450 --> 02:45:17.450
Thanks to Bob Helton for taking this on.

02:45:18.325 --> 02:45:21.213
He's a greatly valued resource in this marketplace.

02:45:22.410 --> 02:45:25.263
That's a big job and he already has a big job at TAC,

02:45:26.520 --> 02:45:28.680
so appreciate his willingness to step up.

02:45:28.680 --> 02:45:29.513
<v ->Sure.</v>

02:45:29.513 --> 02:45:31.329
<v ->He's like the ERS of stakeholders.</v>

02:45:31.329 --> 02:45:32.162
(group laughs)

02:45:32.162 --> 02:45:35.430
We plug and play him (indistinct)

02:45:35.430 --> 02:45:37.638
<v ->Well-played, Commissioner. Very well-played.</v>

02:45:37.638 --> 02:45:39.329
<v ->24/7 duration.</v>
<v ->Yeah.</v>

02:45:39.329 --> 02:45:40.162
<v ->Exactly.</v>

02:45:40.162 --> 02:45:42.750
<v ->We need to give him a reload. (laughs)</v>

02:45:42.750 --> 02:45:46.950
And again, congrats Camille and the whole squad.

02:45:46.950 --> 02:45:50.760
The position of this Commission shall remain book 'em Horns.

02:45:50.760 --> 02:45:51.990
Having no further business

02:45:51.990 --> 02:45:54.540
and having convened (laughs)
(group laughs)

02:45:54.540 --> 02:45:57.120
a duly noticed open meeting,

02:45:57.120 --> 02:46:02.120
the Commission will now, at 12:33 PM on June 16th,

02:46:02.160 --> 02:46:04.410
hold a closed session pursuant

02:46:04.410 --> 02:46:06.600
to Chapter 551 of the Texas Government Code

02:46:06.600 --> 02:46:09.983
sections 551.071, 551.074 and and 551.076.

02:46:12.120 --> 02:46:16.253
We'll be back in a bit.
(people chattering)

02:47:18.391 --> 02:47:19.980
This meeting of the Public Utility Commission of Texas

02:47:19.980 --> 02:47:21.420
is now back in order.

02:47:21.420 --> 02:47:23.130
Considering the discussion closed session,

02:47:23.130 --> 02:47:25.650
I will now entertain a motion to authorize our counsel

02:47:25.650 --> 02:47:27.960
to file a nonsuit in Public Utility Commission

02:47:27.960 --> 02:47:32.207
of Texas v. March, cause number D1G N22-000458.

02:47:36.720 --> 02:47:37.620
<v ->With prejudice.</v>

02:47:37.620 --> 02:47:38.916
Without prejudice.
<v ->Without prejudice.</v>

02:47:38.916 --> 02:47:39.840
<v ->Without prejudice.</v>

02:47:39.840 --> 02:47:41.200
<v ->So moved.</v>
<v ->Second.</v>

02:47:41.200 --> 02:47:42.720
<v ->Got a motion and a second.</v>

02:47:42.720 --> 02:47:44.940
All in favor, say aye.
<v ->Aye.</v>

02:47:44.940 --> 02:47:47.550
<v ->None opposed. Motion passes.</v>

02:47:47.550 --> 02:47:49.290
There being no further business to come

02:47:49.290 --> 02:47:50.730
before this Commission, this meeting

02:47:50.730 --> 02:47:52.590
of the Public Utility Commission of Texas

02:47:52.590 --> 02:47:53.973
is here by adjourned.

02:47:53.973 --> 02:47:55.710
(gavel bangs)

02:47:55.710 --> 02:47:56.543
<v ->You can read.</v>