Good morning, this meeting of the Public Utility Commission
of Texas will come to order to consider matters that
have been duly posted with the secretary of State of
Texas for October 20th 2022. For the record, my name
is Peter Lake and with me today are Will McAdams Lori Cobos
Jimmy Glotfelty and Kathleen Jackson. Mr Journeay would you
please walk us through today's consent agenda? Good
morning commissioners, by individual ballot the following
items were placed on your consent agenda. 2-8
13 15 16 18 19 20 25. Thank you sir. Do we have
a motion to approve the items just described by Mr. Journeay?
All in favor say aye, aye. unopposed. Motion passes. In order
to streamline our agenda today, we will be taking up
items 17 immediately before item 14,
(item:1:Public Comment) At this point we're gonna open public comment. Oral
comments related to a specific agenda item will be
heard when that item is taken up. This segment is for
general comments only when we do get to oral comments
on specific items, as always, stakeholders should not
approach the table unless oral arguments have been
granted or they have been invited by a commissioner.
As usual, speakers will be limited to three minutes
each. Mr. Journeay Do we have anyone from the public
signed up to speak? No sir. No one signed up this morning
Thank you. At this point. Public comment is closed.
Mr. Journeay Would you bring us to our first, I believe our
(item:9:54044) First item is item number nine, docket 54044, petition
for an order appointing temporary manager for the Marion
J smith that does business as smith management services.
Uh Commission staff filed a petition for an order appointing
a temporary manager. Yeah, we're looking at ventana
Ranch,
who is it?
We get that on the consent agenda.
Yeah,
We was considered then we move on to them. Docket 5045
Okay,
Alright, item uh 10 docket 54044 to be clear so I can
say that again for us. Uh Commission staff has filed
a petition for appointing a temporary temporary appointing
a temporary manager. Uh We have also noticed the hearing
um on the temporary manager petition.
All right, thank you sir. At this point we'll recess
this meeting of the PUC to hold a separate hearing
on this item. This meeting of Public Utility Commission
is now recessed for
one minute to switch things over. Good. All right now
this meeting of the public utility commission of Texas
will come to order from the merits hearing in docket
54044, which has been duly posted with secretary of
state of Texas for october 20th 2022. We will now turn
it over to our commission ALJ administration of this
hearing. Good morning Commissioners. I called order
docket number 54044 petition for an order appointing
a temporary manager for mary and jay smith EBA
smith management services. This is Katie marks assisting
the commissioner's this morning. And the purpose of
this hearing is to determine whether a temporary manager
should be appointed. We had a pre hearing conference
yesterday morning at which I admitted three exhibits
Yes. Is it not close enough? Is that better? Okay,
Exhibit one, a copy of commission staff's petition
and all exhibits. Exhibit two, the affidavit of ROS
Ramirez and all exhibits. And exhibit three, a copy
of the notice of hearing. At this time we'll take appearances
of the party's beginning with commission staff. Jenna
Keller for commission staff
Glenn Akins, we're Central States water resources. Have
either of y'all heard anything from the utility or
any other interested person. We have not. Okay at this
time. Do you have any opening statements? No, your
honor. No, your honor any witnesses. No, no any questions
from the commission.
Okay any closing statements. No your honor
Then we are adjourned. Thank you Thank you ma'am. The
Merits hearing in docket 54044 is hereby adjourned
at 9:39 am. Thank you.
We will now reconvene our open meeting
of the public utility commission at 9:40 am resuming
with item 10. Docket 54044. Thoughts, comments?
(item:9:54044 resumes) Based on the information submitted the evidence
in the record, I would move to grant the petition to
appoint CSWR-Texas utility operating company
as temporary manager for Marion J smith, D. B. A smith
management services. Um I think based on the information
before us. Um the utility clearly abandoned operations
for the reasons cited in the petition. Um I would appoint
CSWR-Texas as temporary manager for the utility
beginning on october 29th 2022. After the temporary
manager term for intermediary solutions expires on
october 28th 2022 until the commission orders. Otherwise
um, I would move that we set the temporary manager
compensation for CSWR-Texas at $12 per water connection
per month. As recommended by commission staff waive
the requirement regarding contemporary manager's duty
to post financial insurance with the commission is
recommended by commission staff and direct commission
advising to draft an order consistent um, with this
direction.
come close to a motion. Mr chairman, I agree with everything
she said. Excellent. You have a 2nd? I would 2nd. We've got
a motion and a second. All in favor say, aye, aye, none opposed.
the motion passes. Well done. I don't have anything
on the next few items.
(item:10:52405) I have a proposal for adoption from commission staff.
What's the number 52405, item 10. All right, lay
that out for us. Item 10 is project 52405 review
certain water customer protection rules. Commission
staff has filed a memo in a proposed order to adopt
new rules 24173 and 24364.
Mr smeltzer, Joins. Comments, questions? It seems consistent
with what we do in electric practices and I agree with
the direction of the rulemaking. I do as well. It complies
with Senate Bill three and it's an important um uh
role that we need to get in place to protect water
customers during periods of emergency. I agree
I would move to approve the proposed rule second. We've
got a motion in a second in favor say, aye, none opposed
motion passes. (item:17:53288) So I believe that takes us to item 17, Docket
at 53288, application of ETT to amend the CCN for
the Dell Sole to equinox transmission line in Stark
County. E. T. T. Filed an appeal of order number seven
uh Commissioner McAdams has a memo. Uh
Certainly sir. Commissioners, I wanna approach
this as as softly as I can. Uh the memo uh ultimately
the intent of the memo is to create a pathway uh, to
harmonize the legislative intent and um and requirements
of both the parks and wildlife code as well as the
utilities code, which we ultimately are responsible
for. At the end of the day, this has been
a reoccurring issue uh since we have been re comprised
as a commission. Um We, uh what I'm asking for is within
the memo is for us to capture a longstanding best practice
that has been utilized by the commission as a part
of our ordering paragraphs um and to capture that in
what could possibly constitute a rule. Uh I will clarify
that I am by no means married to the language of the
template rule which as uh followed my memo but I'm
just trying to think of creative ways to provide staffs
from both agencies a reference point on how we could
better communicate with each other and uh and comply
with the spirit of the statute. Um I believe this policy
is the best way to balance giving Texas parks and wildlife
voice in CCN cases which they statutorily have while
maintaining the statutory requirements and obligations
of this commission uh to determine CCNs. We welcome and
and I certainly welcome input from parks and Wildlife
on C. C. N. Cases to the extent that the department
considers a specific recommendation applicable and
important in a particular proceeding, I would invite
them to intervene and present evidence on that specific
uh on that specific line and specific recommendations
as per the route. However, if parks and wildlife does
not provide sufficient evidence um related to best
management practices or intervene in the matter then
the party should neither in my view, engage nor engage
in discovery related to them nor otherwise litigate
these issues. As the commission pointed out, that could
result in unintended delays in reliability projects
or any projects for which the commission has the ultimate
burden of responsibility. The commission's legal obligation
under the Parks and Wildlife Code are clear. Um Under
parks and Wildlife code section 12.0011 subsection
C the commission is statutorily required to respond
in writing to each recommendation or comment made by
the Texas Parks and wildlife.
Department. However, the commission is not obligated
under the statute to adopt any of parks and wildlife's
recommendations or even defer to them. So I want to
establish that clearing the commission is simply required
to respond. And um that's ultimate. The ultimate direction
of a potential rulemaking is give us a reference point
that enshrines best practices that our staff can refer
to when receiving high level recommendations and advice
from the experts on wildlife management at the Texas
Parks and Wildlife Department. Um on a high level,
and this is I welcome discussion and feedback. I believe
we should grant ETT's appeal on order number seven
and deny staff's motion to compel. I would further
move uh and urge moving to adopt the proposed actions
of my memo, which give clear policy guidance for parties
And finally I would direct staff to add this rulemaking
to their already very full calendar but with no sense
of urgency but that they can work on as the calendar
permits to grant us and and I would further grant them
the ability to make any stylistic or editorial or substantive
edits. Again, my uh attachment to the memo was simply
a suggestion and I am not married or wedded to any
of those. Um But they may make any changes as they
say fit and with that I welcome any feedback. Mr Chairman
members, Thank you for letting that out. Well, well
said on all points, I think improving clarity is always
a good thing, especially for our sister agency and
and for our own staff who I know works hard to decipher
what's set up here on the dais, which is a challenge
and sometimes in mumbles, but indeed, so enhanced clarity
is always a good thing. Thank you. Thank you for laying
that out. Thoughts, comments? Yeah, I would uh I would
agree with Commissioner McAdams on this. The uh the
process for advisement um and the ability for advisors
to automatically put something in our rule that has
carries the weight of a contested case um is problematic
for me. Um These are some of the recommendations by
parks and wildlife could be very expensive and I will
suggest that what's happened is a little bit of uh
environmental um work in California has become a multimillion
dollar compliance effort for transmission lines, which
we don't want. So environmental monitors, dozens and
dozens and dozens of environmental monitors, looking
after a a third party company building a transmission
line to make sure that they are following the rules
that a state agency set that's that's gets too convoluted
for me if we want to get these in a rule and
have them report back to us if there are problems and
that's our responsibility, but just getting a having
parks and wildlife say that these are are part of our
rules and ought to be followed. Uh We take it under
advisement. Uh these these projects are um are hard
enough to get built. Uh they're expensive enough to
get built and I believe that if they have a um a
statutory obligation to protect something that they
ought to be a party to the case, if not, um then
we take all of their comments under advisement. We
put in what we need to and we don't where we where
we think that's inappropriate or the evidence doesn't
support it. So I agree with Commissioner McAdams and
I think we should move forward. I say that um the rule
making piece of it, you know, I'm open to that as well
Um I don't know if there's a a a pre step where
we go and further engage parks and wildlife on this
Um and and really maybe get a memorandum of understanding
or something like that. Um Is there a process without
opening a rulemaking or that might be interim to an
open opening a rulemaking that we might consider. I
thank you very much. Commissioners um by way of your
suggestion that we continue dialogue with parks and
Wildlife. Um We do have a meeting set up with them
next week. They're they're legal division um is going
to meet with ours um and and talk about some of these
specific process issues in this case. Um So we'll continue
working on that. We certainly appreciate the guidance
and clarity that was offered by Commissioner McAdams
memo. And we will uh, we'll put that on the rulemaking
calendar for consideration and we'll share with parks
and wildlife for their input as well, appreciate those
efforts. Thank you. I agree on all points. I think
um from my perspective, if you know, it's, it's not
really staff's burden to um build the case to ensure
that there's a cost benefit analysis on Texas, parks
and wildlife recommendation each and every one of them
I think um you know, there might have been some confusion
from the dais in the past, but I think it's important
to give clear direction.
This meeting of the public utility commission of Texas
is hereby reconvened time is 10:10 a.m. We have fully
functioning microphones and lovely mood lighting,
energy efficient, energy efficient.
Where were we?
I think you're going to ask for a motion. I was in
the middle of some statements as I was saying, Stephen
I thought you were gonna make, let's just remind folks
I think we're on docket number 53288. Um, well I'll
was really saying, when are microphones went off and
the lights were really bright on us? Was that I agreed
with commissioner McAdams and and the points made by
um my fellow commissioners and in that I think that
there's just been some confusion with what to do with
Texas parks and wildlife and and I think we've given
some some of their comments and side agreements. I
think we've given clear direction to staff in terms
of not entering into side agreements with Texas parks
and wildlife and prior cases and I think that direction
has been clear. Um And I think there was some confusion
based on past open meeting discussion that led to this
motion or this R. F. I. And ultimate motion to compel
information. But ultimately I think what we've made
clear here today is that um you know we we welcome
the Texas parks and wildlife to intervene in our cases
and put up a case on their best management practices
They're not an intervener in this case. Um Staff took
the responsibility of asking for a cost benefit analysis
and all the recommendations, that's just not staff's
job. Um that that um you know we we have been um
complying with the departments um with our responsibilities
under the Texas, parks and wildlife code through our
standard ordering paragraphs and have recognized those
best management practices in the standard ordering
paragraphs as you highlighted Commissioner McAdams
and that those will be captured in the rule. And so
um I think just having clear direction to staff in
terms of the side agreements and our expectations on
what to do with with this uh departments comments and
recommendations in terms of not expecting cost benefit
analysis on each recommendation going forward so that
we can continue to process these cases in an efficient
manner is important. And then the long term step that
commissioner McAdams highlight is maybe having a rule
out there so that we capture those best practices in
a role in conjunction with our standard ordering language
and um welcome the department if they feel strongly
about an issue to intervene in our case and put up
a case
well put,
you know, one other thing that I would say is it's
my experience that when we're dealing with routing
consultants, um power engineers um HDR you know, they
are experts in these as well in these areas, they take
these into consideration at the earliest time um and
they as part of the environmental assessment, they
are trying to do this as the basic component of their
task and they are very good at it. We see those folks
are the leaders of the field and on most of these transmission
lines there are a handful of routing consultants that
that really take those to heart and do that at the
front end of the process.
Very good point. The uh I would just say that clarification
is always good and I agree with my fellow commissioners
and um particularly the suggestion you made about the
pre step process and meeting with Texas, parks and
Wildlife, which of course staff had already taken the
initiative to do so uh you know, one of the successes
I think that we've had in Texas and what has made us
um you know, it successful as we've been in the past
has been that we value both environmental stewardship
as well as economic development and that, you know
that is absolutely the public's expectation that we
have both. And so clarification is good. Meeting with
Texas, parks and wildlife is good so we can move forward
and continue to do that. Absolutely. Alright, we have
a motion.
So mr chairman, I would move to grant E. T. T. S
appeal of order number seven and deny staff's motion
to compel I would further move to adopt the proposed
actions in my memo, which give clear policy guidance
for parties. And finally, I would direct staff to add
this rulemaking to uh it's calendar as it sees convenient
and grant the ability to make stylistic editorial and
substantive edits it sees fit in the eventual process
of drafting a proposal for publication. We got a motion
Do we have a second
second? I was just, can I can we add that? We have
staff come back to us when they have a discussion with
parks and wildlife and just brief us on on that after
they have their next meeting. Yeah. Yes, I don't think
we need to include that emotion, but staff will certainly
take that second. Thank you got a motion in a second
All in favor say aye, none opposed motion passes. Next
item please. (item:14:52241) We're back to item 14, Docket 52241
the application of energy tremendous CCN for the mill
been transmission project in Montgomery county. Um
this one has a history. We had a proposal for decision
filed on May 17 uh in july the commission remanded
this matter too. So it allows energy to energy to amend
its application for additional routes and to give additional
notice to landowners. I had filed a memo with proposed
changes to the PFD after remand a settlement was reached
and a proposed order on remand was filed on september
21st 2022. Commissioner Glotfelty has a memo. Commission
Glotfelty does indeed have a memo. It is not black
It's a very, very important memo. Thank you. Um the
uh there are two issues here. One of them is obviously
the right decision that we need to make. Um the other
is um a number of technical uh changes, grammatical
issues associated with findings of facts um and other
issues within the, within the proposed order. Um I
believe it's self explanatory in the memo. Um I believe
that we should grant good cause for virtual public
meetings as we've done in the past as a result of covid
Um I don't want to go into each and every one of
these as they've been filed but um I do believe that
um that we need to um fix these data points, fix these
um technical changes um regardless of route we what
route we choose and um so my memo is is clearly here
to affect to fix the technical components. Um So after
that, um I want to talk about the route, which um I
struggle with, I struggle with the agreed upon route
Um I love agreed upon routes, but um I think 12 or
$13 million more uh for a very short line is a is
a challenge for me to get over. Um I think what I
have found is route nine M um seems to be the shortest
the the parallels the most right of way um disruptive
to the inhabitants, correct? Uh and I would recommend
uh I am supportive of um Route nine M um again, this
is a balancing act for for interveners and Commissioners
uh to understand the routing concerns and how they
affect, but what we can't do is allow everybody who
intervenes to say uh we'll take the most expensive
route or we want the route over there that doesn't
affect us. Um there are a whole host of things that
can happen, but we have to balance those. And to me
I think the lower cost um route is nine M is the
is the best possible route and also be mindful of those
who may be impacted who don't happen to be interveners
correct. Thank you for laying that out. Box comments
I agree with Commissioner Glotfelty I think we're in
a position as commissioners to weigh all the factors
and considerations and appear in the Commissioner's
rules. The commission's rules as we look at um, settlement
agreements. We want to encourage settlements, right
and and settled routes, but we have to evaluate the
settlement, the degree to routes based on the factors
that are in pira and the commission rules and based
on those factors, I believe route nine M is the best
route to choose from both the cost perspective and
and it's less intrusive as Commissioner Glotfelty and
Commissioner McAdams noted on other inhabitants um
and shorter, there's a lot more positive to route nine
M than route number One and I believe even commission
staff is uh sort of supportive of that, I think energy
and staff both were unopposed to route number one,
but um nine M was sort of a a new route that
was brought up towards the end of the case, that I
think merits are approved.
Mr Chairman, I I agree with with all the points raised
by my colleagues, um directly affecting 117 habitable
structure structures which are 39 fewer than route
one was an important factor for me. Um high growth
area, a lot of development going on. Uh this clearly
needs to move forward and um I believe this commission
and I would encourage settlements where practicable
Um but this was a, uh late developing alternative route
which offers us the opportunity to satisfy many of
our requirements under the statute to consider in a
CCN Yeah, good points there. Uh We certainly want to
encourage settlements where possible but not at the
additional expense of millions and millions of dollars
to our ratepayers and not at the expense of substantially
more capital structures being impacted. Uh settlement
is not a carte blanche. Um
any other thoughts, comments or motion
I I moved that the commission instruct commission advising
to prepare an order that combines the PFD in the SOAH
proposed order incorporates the commission counsel
memo filed in july 11th 2022 aligns with the commission's
routing decision. In addition, I recommend that the
final incorporate the proposed changes. As noted in
my memo october 1920 22 we've got a motion a second
all in favor say aye not opposed motion passes. Thank
you. Commissioner Glotfelty next item please. Mr Journeay
Item 15 is docket 52929. It's a notice
of violation by OCI Alamo 1, LLC for violations
concerning winter weather readiness reporting requirements
A proposed order was filed on september 30th and the
correction memo filed on october 7th in response to
those corrections, didn't we consent this? Yes sir
I'm sorry I did not. Do you wanna borrow my glasses
Put magic lenses in there so you can see the world
properly sir. It's that price tag sticker huh? So then
I believe that gets us to item 21 subject to correction
again. (item:21:51603) Item 21 is project 51603 review, distributed
Energy resources Commission staff has filed a memo
with draft questions for a proposed ruling. Thank you
sir. Uh you know, we obviously have a staff memo, I
know this is an issue Mr McAdams and mr Glotfelty have
been working hard on suspect. They have comments. Yes
Mr Chairman, thank you for recognizing us. Um high
level, I think I'd like to cover um what has been done
uh key points of what we've received feedback that
we've received over the last uh week or so since our
last open meeting. Um The directions to staff and archive
expected for today were for staff to complete um a
potentially uh complete a discussion draft for rulemaking
by december 15th, um and ERCOT potentially to start
a stakeholder process to clarify, ERCOT Protocol 3.86
High level, that's that's what we're discussing here
Um Staff filed a memo as mentioned under 51603. Uh
They proposed breaking the project into two phases
um First uh embracing and accomplishing technical requirements
and interconnection processes within the discussion
draft to be completed in mid november uh with questions
for comments and then the second track uh to engage
on cost recovery for service, uh requesting responses
to questions by november 17th and aiming to complete
the discussion draft by december 15th, which certainly
complies with the intent of our joint memo. The uh
the second issue to be addressed is the ERCOT Protocol
of 3.8.6 um which asked the question uh the high level
question of does ERCOT require a dedicated feeder to
meet the requirements of 3.8.6. And the reason uh commissioners
this came up is this was flagged as an issue for us
during last fall's workshops um when Oncore and other
TDUs briefed the commission on how they conduct emergency
planning and um what constraints they face when they
organize an emergency plan. For Load shed purposes
or as the system enters emergency conditions and one
of the issues raised was if a resource that is participating
in Ancillary services Is interconnected onto the system
and it's especially if it's interconnected at the distribution
level. Uh certain utilities viewed that under 3.8.6
uh that feeder, that circuit that they were interconnected
at could not be rotated as a part of a load shed
plan. And so in order to clarify that uh that planning
guide, uh we have been engaged with market to try to
resolve the ambiguity of that protocol and to give
them the flexibility to satisfy their operational requirements
and ensure reliability while also giving clarity to
the transmission and distribution service providers
so that they can account for what circuits can be rotated
and under what conditions as a part of their emergency
planning processes and that was the driving force.
Um as you have alluded to Commissioner Jackson, we
need clarity, especially in a time when the energy
transition is uh certainly underway more systems are
electrifying and uh our primary goal is to ensure reliability
So in answer to the question, ERCOT filed comments
under the docket and basically answered uh two does
ERCOT require dedicated feeder to meet 3.8 point six
they believe the answer is no um but resources cannot
be subject to load shed. Uh so in order to harmonize
this, TDSPs may be limited on designating circuits
as non Load shed and therefore would require dedicated
feeders so that they can adequately rotate outages
Ultimately, ERCOT does not want resources providing
Ancillary services um if uh during an emergency they
would be at risk of being disconnected since it could
pose a reliability issue, those megawatts would be
trapped um as a part of the load shed operation and
could not serve a system benefit. Now, ERCOT has discussed
internally and they have deemed that resources on low
shed circuits can provide certain Ancillary services
and that's by nature of their operating plan, um particularly
the Nonspin Ancillary service and regulation down while
still maintaining reliability, which is their overarching
mission and the principle behind the Nonspin is that
Nonspin is a measure that ERCOT will use to keep out
keep the system out of emergency conditions so those
megawatts theoretically will always be deployed ahead
of any type of emergency condition Um unlike other
ancillary services which are to respond to the emergency
condition and bring us out of it once we have already
entered EEA three. Rank down by virtue of the service
is asking generators to turn off so sure if someone
wants to bid into red down as a resource that wants
to turn themselves off, they see no reliability problem
as a, as a feature of the A. S and they are
present and we actually have the privilege of having
Dan and Kenan uh for this meeting, which thank you
so much. Um if we have questions other other clarifications
they plan to address include any DGR or DESRs
connected to a non Load shed circuit can provide
all ancillary services the resource qualifies for um
uh the QSC ultimately as a part of their uh protocol
suggestion carries the risk of not meeting the performance
obligations if the circuit experiences an outage for
any reason and that is to track the money back to ultimately
who is responsible. Um the QSC is managing that and
they have the relationship with the generator, the
generating resource. Uh They also may be open to the
qualification of these resources. Um Opening up ERCOT
contingency reserve service once it is finally deployed
into the system because Nonspin elements certainly
are envisioned to have a place in the world of ECRS
once it comes online. So um at the high level, after
our deliberation, I would urge us that we would consider
directing ERCOT as a part of their filing to move forward
with the staff with with the staff proposed um uh protocol
revision and introduce it within the stakeholder process
under an expedited consideration track which we have
done very recently and uh that would allow um and they
can discuss their timetables for consideration, that
would allow an expeditious uh implementation of the
policy especially for next spring as we try to build
in more tools that allows us to meet reliability also
um affording more resources the ability to keep cost
pressures down on our burgeoning Ancillary Service
suite um to meet reliability. So with that commissioners
I'll hand it over to you for questions. Thank you.
Commissioner McAdams you've covered quite a bit there
for the sake of clarity uh let me take it one piece
at a time if you will, you started out with the discussion
on the staff memo on distributed energy resources and
I and I apologize mr I would suggest we take this in
two parts I and that's why covered the Ancillary service
part first, since we do have ERCOT personnel available
for any questions but then I'll also cover um questions
for staff which broadly I agree with their memo that
they filed and I do have some clarifying comments like
we'll do that next regarding the ERCOT memo on the
distributed energy resources. First of all, Thanks
for all the work on that you've been working on it
they've they've been working on that too. Um there
are two, two components from what I understand you laid out
first of all as a clarification on existing protocol
rules saying that distribute energy resource does not
have to have it construct its own dedicated feeder
in order to be deployed. Uh it can in fact be added
to an existing circuit as long as that circuit is not
available under current reading.
They they may uh participate in Ancillary participating
Ancillary services on a curtail-able circuit um because
they are according to the protocol policy envisioned
they will be limited in their participation and they
will be deployed ahead of you think that's the second
part. I think the second part, I think the first part
is that before we change the protocols, the current
reading as it stands today is that the uh you don't
a battery doesn't need to build its own dedicated feeder
It can currently link and participate in Ancillary
services that it currently links up to a curtailing
non curtail-able circuit, something like a hospital or airport
or something like that. And then the next step is what
you're proposing, the protocol changes to address participation
in a curtail-able circuit. So uh that's the changes
to the protocol that we would be asking for to clarify
our cots to expand the optionality of batteries participating
in Ancillary services and that's the part where we're
gonna ask them to expeditiously change the the protocols
to say that they a battery can connect to a curtail
herbal circuit and participate in ancillary services
As long as it's only Nonspin and reg-down for 75% of
your comment. I wholeheartedly agree. The 1st 25%.
I don't believe any of these resources connected to
distribution are currently allowed to participate in
a s first of all we don't have that many um but
they're not but that's what we were just by this conversation
We're clarifying that. They can. That is correct. Yes
sir. That is correct. On a non containable circuit
Yes sir. Right now dan
we do have some amount of E S R D E s
are distributed energy researchers, energy storage
resources that are providing um red-up and responsive
reserve because they're meeting the the on curtail-able circuit available
circuits on.
Okay. Right, so that's the clarification as it is today
we're making sure a battery at the distribution level
does not need to be on its own single. It still it
still does before we change the protocols. Right. But
that's why we're gonna change the protocols.
They can they can still they can provide I think I
think what we're proposing is that they can provide
rig up and responsive if they're on a non curtail-able
circuit right now even now and going forward before
we change any protocols but so that's the current state
of the world, we want to take it further and change
the protocols to clarify that on a curtail-able circuit
they can provide in the future has been up to some
limit and down okay, we're on the same page. Okay.
Just one, make sure, okay, make sure everybody's on
the same page and I'm thinking about it in the right
way. But all of that makes a lot of sense to me
Uh and the only request I would have is as we go
through this and and first of all we want to uh ask
for an expeditious uh NPRR I know and I'd ask ERCOT
to to go back and really engage with tax because this
is gonna fall TAC to be expeditious, not necessarily
ERCOT staff, but as engaged TAC and come back to us
with a proposed timeline and we can go from there.
Uh The second thing I would ask is that as we go
through this, NPRR and and the protocol change process
Uh as specifically the T DSPs to ensure that it is
abundantly clear in whatever the new protocols dictate
that while a battery on a curtail-able circuit that
is participating in Nonspin particularly, but any ancillary
services, if it is in the state of discharge, it cannot
be part of Load shed. If if it has already been discharged
then no harm, no foul, but we wouldn't obviously want
and it's addressed in the ERCOT memo, I think it's
it says presumably the T D. S. P would be aware that
that resources dis is discharging and thus providing
enhancing reliability. Let's just move that presumably
to a certainly uh, and get some clarification around
that. I think what we're meaning by that language is
that from a reliability perspective, if if we needed
a particular feeder to uh, if we, if we deal the particular
transmission operator to shed 100 megawatts of Load
they if that uh if the battery was producing 20 megawatts
and there was 100 megawatts of load on a particular
feeder, that feeder would only count for 80 megawatts
So it's the net The net of generation would be the
amount that they would be. So they'd have to go find
20 megawatt somewhere else to shed make up for the
hundreds that they need to shed. I just want to make
sure that is iron clad in the protocols and we move
from presumably the T DSP will know too. Here's exactly
how we're going to ensure that the T. D. S. P. No
and can effectuate that and we're not just swinging
in the dark and uh shooting ourselves in the foot.
Uh if we get a lot of batteries that were accidentally
cutting off. So ultimately that can be involved in
and and a part of the the risk incurred one for the
resource, but also for the Qsc who's responsible for
the resource as well that that is a, that you have
a, I don't know a certain percentage of nameplate and
there are a number of ways you can sort of back into
that, can't you? Yeah, well presumably that presumably
the T. O. Is gonna have metering on the distribution
feeder and so they'll know what the net Load on that
distribution feeder is right. That's that's what we
want to figure out and we need to make sure that they
have that come back with a very clear and decisive
mechanism to ensure that that netting out of Load and
DSR discharged is accounted accounted for uh during
a legit event that works for everybody. Yeah I I think
um we have had a fairly convoluted conversation up
here um forgive me if I'm a little confused but I think
I know where we are now. Um the one thing I just
want to say is this issue has come about because we
have more batteries that are trying to interconnect
at the distribution voltage. We don't have many of
those right now but as more and more are trying to
do that, that's the curtail-able circuit. So we're
trying to head this issue off at the pass and give
ERCOT the reliability tools that they need, give the
industry the certainty that they need, I guarantee
you we're gonna have to come back and address this
issue again when we have a few 1000 megawatts of batteries
on the distribution circuits because the load shed
procedures are gonna have to change and we're gonna
have to have a deep discussion with the T. O. S. T
D. S. P. S on how that works. So I mean I
think we're doing the right thing here, the right process
going forward but we just keep in mind that these things
are gonna have to change you know as these as the numbers
of these resources grow in the system but that also
plays into the broader conversation about how targeted
how granular can you impose a Load shed plan remember
that we always said like how do you segment but it's
part of that conversation and I think even ERCOT notes
that system changes will be needed to have that visibility
into the distribution system to be able to get that
data I guess to track the the distributor resources
on your system because you don't have a lot of visibility
I mean you don't really have visibility at this time
We um there's a lot of discussion over the wording
of this but it's really we need to know what distributed
resources are on the distribution feeder in a way that
doesn't cause us to have to model the distribution
system but actually reflect reflect that destroy generation
onto the transmission bus if you will make sense and
and I'd like your appreciate your statements, commissioner
Glotfelty I think this is a way to sort of get the
ball rolling on providing clarity to um the distributor
resources out there that the utilities and to give
ERCOT yet another tool to um to look at and have in
their pocket for reliability in the future and we take
incremental steps towards getting there at this time
by having um the protocols revised and and looked at
um to to allow that function to move forward. I have
a kind of a question and um at the ERCOT RNM
committee meeting you mentioned NPRR 987 that
well now account for battery storage um when you calculate
PRC, which is frequency, how does this play into this
Is there any overlap here? I'm just trying to understand
how, how it all works together because ERCOT will
now be counting um storage that in their PRC calculation
which will result in um potentially Nonspin not being
deployed because your storage will raise the PRC and
you won't have to deploy the Nonspin Is there is there
any any inter relationship with what we're doing? What
ERCOT has done with 9 87 with what we're trying to
do here, I'm just trying to look at it sort of at
a macro level in terms of battery storage and how this
all works together. There is some in that in the graph
in the summer review presentation that shows how much
of the Energy storage resources were providing responsive
reserve um of that amount roughly? 23% of it is was
on the distribution system. So it was on uh non curtail
herbal feeders. So it's able to provide it. But there's
currently that amount that's providing responsive today
that's on distributed uh basically distributed resources
Okay, so we do have an amount that's doing that. Okay
so as we have potentially more of these resources on
the distribution system or these resources, meaning
more storage on the system on the distribution system
that percentage could could increase um and um impact
the PRC calculation ultimately negate the need to deploy
Nonspin in certain reliability conditions.
We're gonna have to think through that one because
right now it would be the only ones that would be able
to provide responsive reserve that are on the distribution
system are the ones that are on non curtail herbal
circuits. Um but that's the existing practice today
Right. Yes, and still will still will be although the
thing that I'm thinking about is if they're providing
Nonspin um and so there are distributed generation
or the distributed resource, are we gonna count the
headroom any headroom they might have if they're online
toward PRC or not. We'll have to think through that
because I don't I don't know that we have at this point
is a constant journey of self discovery for the system
This is a good step in the right direction and is a
measured approach as we've discussed abundantly that
allows the grid to capture the benefits of these resources
while also ensuring that there is no risk enhancers
to reliability and that's an important but nuanced
distinction between and Nonspin and all our other ancillary
services. So good, good step forward. So that covers
your memo discussion any other thoughts, comments on
that. We covered it thoroughly. Thank you dan, pending
other thoughts or discussion. Um we'll actually go
ahead. Okay, I guess does that constitute direction
Yes, yes, it does. Okay, thank you. Mr Chairman, I
appreciate that. ERCOT have everything they need to
move forward. Okay, Okay. Uh staff memo um as mentioned
in in high level layout, um staff memo took a good
swing at attempting to address at the parameters outlined
in our joint memo. Um many of the principles uh staff
took the liberty to put a question mark behind um to
set the field uh on a uh discussion draft, the outline
of a discussion draft. And again the discussion draft
is not a draft for publication. It is preliminary to
the preliminary phase and that's why we're trying to
take this slow. Uh and in a transparent process. Um
there are several uh there are two pieces of the staff
memo that I would highlight um that I want to express
some concern on. Um one of them is item number four
on page two of three and the filed memo and it it's
a question that states in so far as cost allocation
necessitates transmission level allocation to non optimum
entities under PURA Chapter 35. Subsections 40 point
oh 55 and 41 point oh 55 should know is be required
to comply with any cost allocation standards established
for distribution system in this rulemaking,
I believe that asking that question may have the unintended
effect of calling into question, our regulatory oversight
of noise
participating in the wholesale market, interconnecting
at transmission and recovering costs through t costs
Um, it may beg the question of whether our hands are
tied or whether we are prohibited ultimately from regulating
effectively regulating noise at transmission. And in
my view, this is an area of settled law. I believe
we do have that ability. Um, I would just say that
for that portion of the principles outlined in our
joint memo. We articulated that not necessarily as
a question, but as a stated fact, this is an area of
statute. Um, it is, it is key to the regulatory framework
of the commission and uh, and our wholesale bulk power
system. And so I would urge us to consider and staff
may agree and possibly eliminating that question from
those that go out as a part of the questions for the
draft discussion draft and I'd welcome any feedback
on that. And then the second piece is question number
six. Um, and I'll read that 16 TAC 16 TAC 25.501
subsection m provides wholesale storage is not
subject to retail tariff rates and charges or fees
assessed in conjunction with retail purchase of electricity
wholesale storage shall not be subject to ERCOT charges
and credits associated with Ancillary service obligations
or other Load ratio share or per megawatt hour based
charges and allocations. And that, that is sighting
of the rule which was established in 2012 and it goes
on to ask the question given changes in technology
and the proliferation of E. S. R. S on the ERCOT
grid. Should the commission revisit this policy on
wholesale storage? Load and if so, how and I would
like to post the staff for clarification. Um, the intent
of the question, the ultimate intent of the question
and how that question in their view should affect or
or well affect the installed battery capacity that
we've had since 2020 2012 to now over the last 10
years because that's one billion over $1 billion in
investment. And um, what their view is in terms of
the nuance of the question and how they hope to gain
responses. And I would, I would like staff to have
the ability to offer thoughts or clarification on that
Absolutely. Thank you for the opportunity to clarify
Um, it was certainly not staff's intent or um, thought
that the commission might want to change how the rules
under which existing resources are going to be expected
to operate? Rather we would like to um, Take have have
parties comment on given technique the way technology
is developed in the last 10 years. Is there some other
aspect that needs to be included in the rule or change
in policy. So we are not intending to cast a regulatory
cloud over existing resources. It's a forward looking
request for for for commentary on forward looking dynamics
in a future state of the world where we would have
more wholesale storage resources. I don't think that's
fair. Exactly forward looking is the perfect description
Okay, I think that's fair. And I trust our stakeholders
will uh contemplate and consider this conversation
as they respond to that question. Does it make sense
Because as I read this question as well, um, I come
away with the same conclusion you do as well. Commissioner
McAdams and then given your clarification, um, Connie
does it make sense to restructure the question a little
bit because the last thing we want is to put any regulatory
uncertainty on the existing investment battery storage
in ERCOT And also what we're trying to do here is incent
investment and move technologies forward and I just
don't want any regulatory uncertainty cloud and I know
that's not what you mean. But if there's a way to maybe
revise the question so that it captures what you're
trying to do this discussion. We'll work on work on
adjusting the language to reflect this discussion.
Um, our our memo calls for these questions to be filed
on monday, Um, to kick off the comment process and
again, if it helps these are information gathering
questions. Um, so hopefully the parties will understand
that the version presented filed Monday. We'll have
clarifying language incorporated into question six
Yes. And if you're and when you're ready, I would like
to comment on Commissioner McAdams remarks on unquestioned
for as well. Um he very correctly surmised that staff
was carrying out the open meeting discussion from October
six in which the instruction was to oppose each of
five bullet points as a question. Um staff agrees that
that is settled law and we do not necessarily we do
not need to be seeking comment on it. Um Similarly
for question five, that that now that we've bifurcated
that belongs in the first project, so we'll be moving
that to the first project. Okay, fair. And I'll take
the blame for the ambiguity at the last meeting. Uh
I was the one that said, add question marks and I should
have been more nuanced and which statements were relevant
for questions, so yeah, I'll take the hit on that one
All right, good, all good things. One thing I just
wanna say additive to the memo, which is, we talk a
lot about costs, costs on the system, who's gonna pay
for what costs? Um I'd also like stakeholders to talk
about benefits too. There are huge numbers of Ben,
it's on here and highlighting the types of benefits
that we would be receiving from these types of resources
would help us understand the whole universe of those
Let's ask the questions. I'm sure we'll get robust
response is thank you. Thank you.
Uh Well I guess with that Mr chairman pending any other
discussion or input. I would recommend that we uh instruct
staff to move forward um or adopt the proposed staff
memo for discussion, draft questions, I don't know
but
All right. We got everything we need our cats got all
the clarification they need, you'll open new dockets
for both of these.
All right. It moves us further down our agenda. The
next thing I know, is item 25. Never mind. I
was consented.
No, I think that one was a joke. Right. Um It seems
like it's becoming a long day.
This is supposed to be a short meeting. What what item
does that bring us to? I think 33, we have an update
from ERCOT.
Unless you have anything between 25 and 33, we'll ask
ERCOT. ERCOT, would you come up?
(item:33:Update from ERCOT) Good morning. Uh um So uh for our every year
we do a summer review of what went on during the summer
We filed a presentation to this morning or yesterday
for that. Um I guess our thinking was we give you some
high level overview of that since it's basically the
same presentation we did at the board meeting open
meeting earlier this week. Um So if that's okay, that's
what we'll do. Absolutely. Um So we had a really good
summer from reliability perspective. Um, we served
more customer demand than ever before um and set several
new ratcheting up peaks during the course of the summer
ending with a new all time record of over 80 gigawatts
Uh, we generally had higher wind and solar generation
than last year, primarily due to higher installed capacity
of both of those technologies, Thermal unit forced
outages were only slightly higher than what we had
last summer, about 700 MW or about one generator on
average over the course of the summer, so not a lot
higher um as a result of all those factors, we were
able to serve these record demands through the second
hottest summer on record uh, without declaring any
energy emergencies. Um so I turned over to Kenan to
give an overview of the market side. Thank you Kenan
Ogelman with ERCOT um the themes I wanted to share
uh, piggyback on what dan laid out, which was, it was
an extremely hot summer. Um there was a lot more usage
there were many more scarcity intervals than we had
seen in previous summers and if you couple that with
um some of the geopolitical issues around uh natural
gas prices in particular, but um input prices across
the board. Um you see increased prices for energy for
Ancillary services. Um and uh, if you couple that with
uh increased usage, you see higher effects on, on bills
and um, so that was from the market side, the themes
of the summer uh, that uh aligned with what we saw
operationally
be happy to answer any questions. Thank you appreciate
the presentation board meeting in the summary here
and goes, goes without saying that is a remarkable
performance by market and the grid in the face of a
record setting summer record breaking demand to set
dozens of daily seasonal, weekly monthly records in
addition to multiple all time records that we set under
very challenging conditions, says a lot about the work
that's been done to make this written more reliable
has been tested and it has risen to the challenge,
appreciate all y'all's work on it. Um, thoughts, comments
questions no, the demand periods this summer were awesome
in nature and I don't mean that is like awesome. Cool
I mean awesome. Like you're staring at mount Everest
They were huge and it just demonstrates the, the transition
that we're in right now. And ERCOT is at the center
of it and has uh comported itself admirably. Um, you've
you've faced the challenges and we appreciated the
work of staff. Um, it shows us the work ahead of uh
to try to develop as many tools as we can to offer
you the maximum amount of flexibility to address these
challenges And, and I think the charts that you presented
to the board and have sent to us that tells the tale
in 2018. I never thought I would see charts like this
That's amazing. Yeah. To your point, the 80,000 megawatt
record, we set in july ERCOT that demand for 80,000
megawatts met that demand without breaking his stride
without getting, not only didn't get into emergency
conditions, but didn't get into uh scarce substantial
scarcity pricing met that all time record challenge
and that's more than all the power consumed in California
and new york state combined. That's an extraordinary
thing for Texas And I would add a foot note to that
in that not only did ERCOT serve all Texas households
at all time peak demand of over 80,000 gigawatts, but
ERCOT still had excess generation to serve probably
nearly a million more households during that time.
So that's really important. And then just comparing
the record demand that we had to other markets, I think
I noted SPP in july hit, um, you know, somewhere in
the mid fifties, um, 50 gigawatts, mid 50 gigawatts
compared to 80,000 gigawatts. I mean, that just shows
the Yeah, exactly. And so that just shows the immense
amount of electricity demand that our our state um
is that are going given the economic and population
growth that we're experiencing and I agree wholeheartedly
with Commissioner McAdams um, as we look to plan for
the future um, in our phase two market redesign efforts
and looking at um how do we plan for the future in
terms of increased electricity consumption given the
population economic growth in our state, the increased
amount of um different resources on our system. That
that's what we're working hard to do. And I think this
summer was a was a success and we will continue to
plan forward for the future for this type of these
these types of emergency or weather conditions rather
what put Alright gentlemen, thank you and thanks to
the entire team for such outstanding performance this
summer.
That is the last item that we need to cover for today
before closed session. So at this point, having convened
in a duly notice, open meeting, the commission will
now at 11:01 AM on october 20th 2020 to hold a
closed session, pursuant to chapter 551 on the Texas
government code, section 551.7155 point 1074 and 551.76
We'll be back in a bit
closed session is hereby concluded at 1146 AM on october
2020 22. The commission will now resume its public
meeting. Commission will take no action following closed
session and there being no further business to come
before the commission. This meeting, the public until
Commissioner Texas is hereby adjourned