WEBVTT 00:00:04.629 --> 00:00:05.309 Good morning. 00:00:07.379 --> 00:00:10.028 (item:1:Chairman Peter Lake opening statement on 2023 SARA and CDR report) Appreciate everybody being here and taking a break 00:00:10.038 --> 00:00:14.429 from session. I know it's a very, very busy time. This 00:00:14.439 --> 00:00:18.530 is our annual public update ahead of the summer just 00:00:18.539 --> 00:00:21.478 like we did before last winter and before the summer 00:00:21.489 --> 00:00:26.208 before. Uh this is our standard communication with 00:00:26.219 --> 00:00:29.469 the public to make them aware of grid and operating 00:00:29.478 --> 00:00:33.969 conditions ahead of our hot summer season. First and 00:00:33.978 --> 00:00:37.848 foremost, I want to emphasize that the SARA report 00:00:37.859 --> 00:00:41.469 is not a forecast. This is a scenario analysis that 00:00:41.478 --> 00:00:45.598 evaluates a range of potential outcomes. It is not 00:00:45.609 --> 00:00:50.228 a prediction of what will actually happen operationally 00:00:51.310 --> 00:00:54.469 the archive grid is ready for this summer. The reliability 00:00:54.478 --> 00:00:58.759 reforms that were put in place have been tested and 00:00:58.770 --> 00:01:03.029 continue to work. We've made the grid, we've got as 00:01:03.039 --> 00:01:06.448 strong as possible using every tool available. The 00:01:06.459 --> 00:01:10.650 landmark reforms passed last session have been utilized 00:01:10.659 --> 00:01:14.489 and put in place to ensure our grid operates more reliably 00:01:14.500 --> 00:01:20.239 now than it ever has in the past. However, the Texas 00:01:20.250 --> 00:01:26.750 grid faces a new reality data shows for the first time 00:01:27.500 --> 00:01:31.189 at the peak demand for electricity this summer will 00:01:31.198 --> 00:01:34.980 exceed the amount we can generate from on demand, dispatch 00:01:35.138 --> 00:01:39.698 power. So we will be relying on renewables to keep 00:01:39.709 --> 00:01:44.349 the lights on, on the hottest days of summer, there 00:01:44.359 --> 00:01:48.480 is no longer enough on demand, dispatch power generation 00:01:49.260 --> 00:01:54.709 to meet demand. In the ROS system from 2008 to 2022 00:01:55.719 --> 00:01:59.829 Texas on demand, dispatchable power supply grew only 00:01:59.838 --> 00:02:05.379 1.5%. In that same time frame, our population grew 00:02:05.388 --> 00:02:11.588 24%. The increase in demand for electricity is outpacing 00:02:12.080 --> 00:02:16.919 the supply of on demand, dispatch power. In this new 00:02:16.929 --> 00:02:21.308 reality, our risk goes up as the sun goes down because 00:02:21.439 --> 00:02:26.058 it's still hot at nine pm, the sun sets faster than 00:02:26.069 --> 00:02:29.149 the atmosphere cools and our solar generation is all 00:02:29.159 --> 00:02:33.800 gone. So at that point in the day, we will be relying 00:02:33.830 --> 00:02:38.050 on wind generation on our hottest days. If the wind 00:02:38.058 --> 00:02:41.490 does not pick up, we will have to rely on our on 00:02:41.500 --> 00:02:45.229 demand dispatch generators. And the data is showing 00:02:45.240 --> 00:02:50.319 us that on our hottest days under some certain set 00:02:50.330 --> 00:02:53.520 of circumstances, we may not have enough on demand 00:02:53.528 --> 00:02:56.838 dispatch generation to cover the gap between when the 00:02:56.849 --> 00:03:01.069 sun sets, we lose the solar and when our wind generation 00:03:01.080 --> 00:03:04.960 picks up at this point, I'll turn it over to the archive 00:03:05.020 --> 00:03:08.569 Ceo Pablo Vegas to discuss the technical aspects of 00:03:08.580 --> 00:03:11.058 the report. (item:1:ERCOT CEO Pablo Vegas opening comments on 2023 Summer SARA) All right. Thank you very much, chairman 00:03:11.069 --> 00:03:14.308 and good morning everybody. So the season seasonal 00:03:14.319 --> 00:03:16.979 assessment resource adequacy that we complete every 00:03:16.990 --> 00:03:20.189 season is a series of models and risk scenarios that 00:03:20.199 --> 00:03:23.008 we use to prepare for the unique challenges of each 00:03:23.020 --> 00:03:25.939 weather season. In Texas. I want to reemphasize the 00:03:25.949 --> 00:03:28.729 point that the chairman made that these are not forecasts 00:03:28.979 --> 00:03:31.610 These are scenarios, they're not necessarily what we 00:03:31.618 --> 00:03:33.569 believe will happen, but they are scenarios that could 00:03:33.580 --> 00:03:37.368 happen based on historical data and projections. The 00:03:37.379 --> 00:03:40.300 summer SARA includes a base and a moderate risk scenario 00:03:40.389 --> 00:03:44.058 as well as an extreme set of risk scenarios. The most 00:03:44.069 --> 00:03:47.889 severe risk scenarios assume very high peak Load, extreme 00:03:47.899 --> 00:03:51.669 unplanned thermal outages based on historic observations 00:03:51.679 --> 00:03:55.490 and extreme low wind output. These scenarios are based 00:03:55.500 --> 00:03:58.399 on circumstances that include a combination of unplanned 00:03:58.409 --> 00:04:02.169 forced outages and varying weather conditions when 00:04:02.179 --> 00:04:05.250 it comes to Texas. As has been noted, the term that 00:04:05.258 --> 00:04:09.618 we should be focused on is growth since 2002, population 00:04:09.629 --> 00:04:12.750 growth has gone from 22.9 million to more than 30 million 00:04:12.758 --> 00:04:16.019 Last year. We saw several peak demand records sent 00:04:16.028 --> 00:04:19.170 last set last year. Our all time peak was set last 00:04:19.178 --> 00:04:22.548 summer on July 20th at over 80,000 Megawatt of demand 00:04:23.170 --> 00:04:25.199 And as we continue to experience substantial growth 00:04:25.209 --> 00:04:27.910 in population with more businesses moving to Texas 00:04:27.920 --> 00:04:30.738 and a rapidly growing economy. The demand for energy 00:04:30.750 --> 00:04:34.528 is growing at a rapidly increasing pace compared to 00:04:34.540 --> 00:04:38.358 last year. Our models estimate that this summer's peak 00:04:38.369 --> 00:04:41.759 could be about 6000 megawatts greater than last summer's 00:04:42.579 --> 00:04:45.738 However, we're only expecting a nominal increase of 00:04:45.750 --> 00:04:50.088 about 850 megawatts of thermal capacity. Since last 00:04:50.100 --> 00:04:53.899 summer. The majority of new generation capacity that 00:04:53.910 --> 00:04:56.629 has been added since last summer in ERCOT continues 00:04:56.639 --> 00:05:00.660 to come from intermittent resources on the renewables 00:05:00.670 --> 00:05:03.769 front, we're expecting about 1000 more megawatts of 00:05:03.778 --> 00:05:09.199 wind capacity and about 3400 megawatts of solar capacity 00:05:09.209 --> 00:05:13.709 compared to last summer's SOAH. So as a result, we 00:05:13.720 --> 00:05:16.290 are expecting to have to rely more on renewables during 00:05:16.298 --> 00:05:19.670 peak conditions than we ever have before. And as a 00:05:19.678 --> 00:05:22.389 result of this dynamic, this summer could have tighter 00:05:22.399 --> 00:05:25.290 hours than last summer with a higher risk of emergency 00:05:25.298 --> 00:05:26.079 operations. 00:05:27.928 --> 00:05:30.738 ERCOT may experience these tighter conditions after 00:05:30.750 --> 00:05:34.178 the traditional five PM peak Load as generation from 00:05:34.189 --> 00:05:37.778 solar units begins to decrease when the sun sets. This 00:05:37.790 --> 00:05:39.600 would be similar if you think about what happened last 00:05:39.608 --> 00:05:43.488 summer during July 13th, that day, wind and solar generation 00:05:43.500 --> 00:05:46.470 both began to decrease simultaneously in the evening 00:05:46.480 --> 00:05:49.709 hours and tight grid conditions resulted because there 00:05:49.720 --> 00:05:52.949 was limited additional dispatch units available to 00:05:52.959 --> 00:05:56.738 deploy at that time. And that's in contrast to a week 00:05:56.750 --> 00:06:00.569 later on July 20th. Well, it was much hotter, demand 00:06:00.579 --> 00:06:03.028 was higher and it reached the highest point ever there 00:06:03.040 --> 00:06:06.500 was ample wind that day. So there was no reliable reliability 00:06:06.509 --> 00:06:09.660 concerns that afternoon. So we're expecting that it's 00:06:09.670 --> 00:06:12.369 possible that the riskiest hours this summer could 00:06:12.379 --> 00:06:15.079 be closer to the nine PM period than what we're used 00:06:15.088 --> 00:06:16.988 to seeing around the four or five PM during the peak 00:06:17.000 --> 00:06:20.278 heat of the day to help mitigate these risks. (item:1:Pablo Vegas on ECRS implementation) We're 00:06:20.290 --> 00:06:22.410 going to continue to operate the grid conservatively 00:06:22.420 --> 00:06:25.079 as we have been doing. That means bringing generating 00:06:25.088 --> 00:06:28.389 resources online earlier to mitigate any sudden changes 00:06:28.399 --> 00:06:32.139 in generation or demand. On June 8th this summer, we're 00:06:32.149 --> 00:06:34.569 going to launch a new Ancillary service called ERCOT 00:06:34.579 --> 00:06:39.230 Contingency Reserve Service or E C R S. This takes 00:06:39.238 --> 00:06:41.569 advantage of faster performing characteristics of some 00:06:41.579 --> 00:06:43.850 of the generating units that are out there that can 00:06:43.858 --> 00:06:46.139 address the rapid ramps that can occur during times 00:06:46.149 --> 00:06:49.819 of intermittent resource performance. And this summer 00:06:49.829 --> 00:06:52.769 we're also expecting about 500 Megawatt from battery 00:06:52.778 --> 00:06:55.230 energy storage to be available during our tightest 00:06:55.238 --> 00:06:59.019 hours. Additionally, our team is doing weatherization 00:06:59.028 --> 00:07:01.389 inspections just like we do in the winter. We do this 00:07:01.399 --> 00:07:04.759 in the summer for generating and transmission facilities 00:07:04.769 --> 00:07:07.119 to make sure that all the facilities are ready to perform 00:07:07.129 --> 00:07:11.019 during the peak summer heat. So while our assessment 00:07:11.028 --> 00:07:13.319 of resource adequacy indicates that there are risks 00:07:13.329 --> 00:07:16.988 this summer, the implementation of these programs executing 00:07:17.000 --> 00:07:20.920 last sessions reforms and new operational tools like 00:07:20.928 --> 00:07:24.879 E C R S as well as our conservative approach to operations 00:07:25.019 --> 00:07:27.838 We plan to operate a reliable and resilient grid this 00:07:27.850 --> 00:07:31.088 summer. But I also want to emphasize a point that I 00:07:31.100 --> 00:07:33.119 made during our last discussion during the winter Sara 00:07:33.149 --> 00:07:36.250 report which is that the urgency to move forward with 00:07:36.259 --> 00:07:39.759 meaningful electric market reforms that will incentivize 00:07:39.769 --> 00:07:43.548 the development of dispatchable generation remains extremely 00:07:43.559 --> 00:07:46.509 high. I've described many of the tools that we have 00:07:46.519 --> 00:07:48.778 to deal with the real time operational challenges that 00:07:48.790 --> 00:07:52.389 we have. But these do not substitute for significant 00:07:52.399 --> 00:07:54.759 market reforms that will incentivize the development 00:07:54.769 --> 00:07:58.178 of new dispatchable generation and to help preserve older 00:07:58.189 --> 00:08:01.660 generation until it can be replaced. We're committed 00:08:01.670 --> 00:08:04.649 to keeping you and the public informed on grid conditions 00:08:04.660 --> 00:08:06.809 throughout what could be a challenging summer season 00:08:07.428 --> 00:08:09.869 And so would that be happy to let me turn it back 00:08:09.879 --> 00:08:11.509 (item:1:Chairman Peter Lake further comments in 2023 SARA and CDR) over to Peter for some close remarks and then we'll 00:08:11.519 --> 00:08:16.230 open up for questions. Thanks, Pablo. The challenges 00:08:16.238 --> 00:08:18.829 that we're describing today have been on the horizon 00:08:18.838 --> 00:08:22.519 for several years. That's why the legislature passed 00:08:22.829 --> 00:08:26.988 S B three last session to help address this. And that's 00:08:27.000 --> 00:08:30.769 why at the direction of S B three, the P U C 00:08:30.778 --> 00:08:33.840 went through months and months of stakeholder engagement 00:08:33.849 --> 00:08:37.058 and work sessions. We hired an outside consultant over 00:08:37.070 --> 00:08:40.519 a year ago and presented a plan to the legislature 00:08:40.529 --> 00:08:44.649 in January and we await their direction. We're going 00:08:44.769 --> 00:08:48.769 into this summer, relying on wind and solar to keep 00:08:48.779 --> 00:08:52.298 the lights on in Texas on our hottest days. I want 00:08:52.308 --> 00:08:56.048 to emphasize this is not an operational issue, this 00:08:56.058 --> 00:08:57.950 is a supply and demand issue. 00:08:59.609 --> 00:09:02.739 We will continue to use every tool available to keep 00:09:02.750 --> 00:09:07.129 the lights on and the A CS running this summer, but 00:09:07.139 --> 00:09:08.969 we do not have any control over DERs so 00:09:10.700 --> 00:09:12.330 that I'm happy to take a few questions. 00:09:14.779 --> 00:09:19.750 (item:2:What do you say to Texans asking why this wasn't fixed in 20 or 21) What do you say to Texas customers who might 00:09:19.759 --> 00:09:22.820 be angry that this, the grid wasn't fixed as of summer 00:09:22.830 --> 00:09:24.279 of 2021 or 22. 00:09:26.048 --> 00:09:28.190 I'm sorry, I'm not sure. I understand the question 00:09:28.279 --> 00:09:32.479 would be more reliable, I should say by 2021 or 2022 00:09:32.489 --> 00:09:34.019 But this has been an ongoing, 00:09:35.649 --> 00:09:40.599 an ongoing project, as we've said in the past SB3 00:09:40.609 --> 00:09:44.048 gave us the tools and the legislature's actions last 00:09:44.058 --> 00:09:46.759 session gave us the tools to stabilize the grid. We 00:09:46.769 --> 00:09:51.729 have now and laid the groundwork to ensure long term 00:09:51.739 --> 00:09:55.250 resource adequacy and long term supply and demand. 00:09:55.750 --> 00:10:00.690 And those, we have done the work on both of those pieces 00:10:00.769 --> 00:10:04.928 That's why we presented the PCM as a reliability service 00:10:04.940 --> 00:10:07.269 to the legislature in January and it's a priority for 00:10:07.279 --> 00:10:10.099 them and it's under consideration along with a variety 00:10:10.109 --> 00:10:11.109 of other ideas. 00:10:12.639 --> 00:10:15.668 So we've been doing the work, the legislature has provided 00:10:15.678 --> 00:10:19.729 the leadership and the policy changes needed. It's 00:10:19.739 --> 00:10:22.548 just a matter of executing on those. And we have, 00:10:24.570 --> 00:10:27.619 (item:2:Pablo Vegas additional comment on grid reliability) I was just going to add to that, that the grid is 00:10:27.629 --> 00:10:30.779 as reliable as it has ever been. And, and let me give 00:10:30.788 --> 00:10:34.090 you an analogy to explain what I mean by that. So if 00:10:34.099 --> 00:10:36.340 during the winter storm year, you would think about 00:10:36.349 --> 00:10:39.668 the grid as a car, the car didn't start, it was not 00:10:39.678 --> 00:10:41.820 reliable. We had issues with the reliability of the 00:10:41.830 --> 00:10:44.969 grid during that storm in the two years that followed 00:10:44.979 --> 00:10:46.979 significant investments and improvements have been 00:10:46.989 --> 00:10:48.918 made to make sure that the grid would be reliable, 00:10:48.928 --> 00:10:51.190 that the car would start. So what we're saying this 00:10:51.200 --> 00:10:53.808 summer is that the car is ready to go, it's ready to 00:10:53.820 --> 00:10:57.099 run, it's going to be reliable. However, we're asking 00:10:57.109 --> 00:11:00.259 it to go further without adding more reliable fuel 00:11:00.529 --> 00:11:03.219 So now it's a supply and demand issue. The grid is 00:11:03.229 --> 00:11:05.798 reliable. We need to make reforms that are going to 00:11:05.808 --> 00:11:09.668 incentivize building more dispatch generation so that 00:11:09.678 --> 00:11:11.918 as demand continues to grow, as the state of Texas 00:11:11.928 --> 00:11:14.989 continues to grow. We'll always have reliable supply 00:11:15.000 --> 00:11:17.840 to serve it. But the grid is reliable and we do expect 00:11:17.849 --> 00:11:20.700 the grid to remain reliable this summer real quick 00:11:20.710 --> 00:11:23.129 If you could please identify, say your name and identify 00:11:23.139 --> 00:11:25.570 who you would. That'd be helpful. Thanks. Yeah. Uh 00:11:25.580 --> 00:11:29.759 (item:3:Phil Jankowski, Dallas Morning News - thoughts on Bills affecting PCM) Phil Jankowski, Dallas Morning news. Are there any 00:11:29.769 --> 00:11:32.849 uh I, I'm curious what your thoughts are on any of 00:11:32.859 --> 00:11:35.969 the uh bills that are being considered? There's been 00:11:35.979 --> 00:11:40.178 a lot of talk about the some of these bills for the 00:11:40.190 --> 00:11:45.428 term knee capping the the PCM um undoing the work um 00:11:45.440 --> 00:11:47.830 possibly completely upending the work that y'all are 00:11:47.840 --> 00:11:51.389 doing. I'd like to know your thoughts on that. We presented 00:11:51.399 --> 00:11:54.308 the PCM in January. We've seen the market respond to 00:11:54.320 --> 00:11:57.500 that with several 1000 Megawatt of commitments representing 00:11:57.519 --> 00:12:00.889 billions of dollars of investment. This is, this is 00:12:00.899 --> 00:12:03.729 a clear priority for the legislature and we're all 00:12:03.739 --> 00:12:07.710 solving for the same thing more on demand, reliable 00:12:07.719 --> 00:12:11.710 dispatch generation. The PCM is obviously under consideration 00:12:11.719 --> 00:12:14.210 to the legislature along with an array of other ideas 00:12:14.678 --> 00:12:19.440 Uh and we will implement whatever their direction is 00:12:19.450 --> 00:12:21.668 at the end of the session and we will implement whatever 00:12:21.678 --> 00:12:24.418 laws are on the books at that time. Are you worried 00:12:24.500 --> 00:12:25.359 that any of those 00:12:28.029 --> 00:12:31.808 I can't speculate on outcomes of the legislature? There's 00:12:31.820 --> 00:12:33.690 a lot of time left, there are a lot of ideas and 00:12:33.700 --> 00:12:36.779 discussions going on. Uh So at the, at the end of the 00:12:36.788 --> 00:12:39.840 day, we're going to implement whatever they direct 00:12:39.849 --> 00:12:42.960 us to. But I'll add, we share the goals of the legislature 00:12:42.969 --> 00:12:46.109 Those goals are to improve reliability to increase 00:12:46.119 --> 00:12:48.080 the amount of dispatch generation that gets built in 00:12:48.090 --> 00:12:51.558 the state and to keep consumer costs reasonable throughout 00:12:51.570 --> 00:12:54.298 that process, we share those goals and we think that 00:12:54.308 --> 00:12:56.788 we're going to remain aligned and come out aligned 00:12:56.798 --> 00:13:00.349 as we finish this legislative session. (item:4:Charlotte Scott, Web Spectrum News - SB7 Ancillary Services impact on renewables) 00:13:00.359 --> 00:13:03.649 Question Charlotte Scott with spectrum news. So talking about relying 00:13:03.658 --> 00:13:07.279 on renewables this summer, one of the Bills, Senate 00:13:07.288 --> 00:13:11.989 Bill seven would sort of de incentivize renewable companies 00:13:12.000 --> 00:13:16.320 by having them pay Ancillary service fees. How do you 00:13:16.330 --> 00:13:19.479 feel about the legislatures sort of moving away from 00:13:19.489 --> 00:13:22.599 renewables at a time when we're going into summer needing 00:13:22.609 --> 00:13:25.950 to rely on them again, I'm not going to speculate on 00:13:25.960 --> 00:13:28.399 particular bills or the outcome of session this is 00:13:28.408 --> 00:13:32.119 about informing Texans of the changing dynamics of 00:13:32.129 --> 00:13:35.979 the grid and the increase in risk this summer. And 00:13:35.989 --> 00:13:39.729 at the end of the day, we will implement whatever existing 00:13:39.739 --> 00:13:43.798 or new laws are on the books. But we need more of 00:13:44.908 --> 00:13:47.369 s considering that we're going to need to rely on them 00:13:47.418 --> 00:13:53.239 this summer. As, as we, this commission and ERCOT has 00:13:53.250 --> 00:13:56.678 been consistently messaging over the last two years 00:13:57.219 --> 00:14:02.399 We need more on demand, dispatch, power, renewables 00:14:02.408 --> 00:14:05.558 provide a great cost benefit. They have the benefits 00:14:05.570 --> 00:14:08.369 of a self contained supply chain, but they don't have 00:14:08.379 --> 00:14:11.599 an on switch. We've got lots of renewables, but at 00:14:11.609 --> 00:14:15.389 the end of the day, zero wind times infinity windmills 00:14:15.399 --> 00:14:19.259 is zero electricity and the sun sets every night in 00:14:19.269 --> 00:14:24.149 those gaps, we have to have generation with an on switch 00:14:24.408 --> 00:14:26.918 And so that's what we, that's what we're focused on 00:14:26.928 --> 00:14:29.529 That's what the legislature directed us to focus on 00:14:29.928 --> 00:14:34.739 in SB3 and developing and deploying a reliability 00:14:34.750 --> 00:14:38.820 service. And so at the end of the day, this is about 00:14:39.308 --> 00:14:41.859 doing whatever is necessary to keep the lights on for 00:14:41.869 --> 00:14:45.859 Texans.(item:5:Charlotte Scott - why should Texans feel confident?) That just one more question, why should Texans 00:14:45.869 --> 00:14:48.529 knowing this, feel confident that with hot weather 00:14:48.538 --> 00:14:52.330 they won't lose power this summer if demand is out 00:14:54.308 --> 00:14:59.729 uh the the risk of brief periods of Load shed has increased 00:14:59.739 --> 00:15:03.009 And again, this is, this is a new reality for Texas 00:15:03.019 --> 00:15:08.219 This is the first time the the available supply of 00:15:08.229 --> 00:15:13.379 on demand. Dispatch power has been less than the expected 00:15:13.389 --> 00:15:18.009 demand. In the past, we've had more supply of on demand 00:15:18.019 --> 00:15:20.840 dispatchable power than the expected demand. This is 00:15:20.849 --> 00:15:23.399 the first time our base case on the hottest days has 00:15:23.408 --> 00:15:27.340 gone above that. And so we fully expect to keep the 00:15:27.349 --> 00:15:30.548 lights on if wind and sun perform, 00:15:32.428 --> 00:15:35.979 but we will be relying on wind and sun. Let me add 00:15:35.989 --> 00:15:39.750 that the high risk scenarios that are in this SARA 00:15:39.808 --> 00:15:44.259 report are low probability scenarios. We do expect 00:15:44.269 --> 00:15:46.820 the grid to be reliable, but we want to be up front 00:15:46.830 --> 00:15:49.979 and communicate openly and transparently to all consumers 00:15:49.989 --> 00:15:52.820 to the kinds of risks that we do see. And so that's 00:15:52.830 --> 00:15:54.960 the purpose of sharing all of these different scenarios 00:15:54.969 --> 00:15:58.259 But those high risk scenarios are low probability scenarios 00:16:01.950 --> 00:16:03.090 (item:5:What is the probability of extreme scenarios?) What is the probability of kind of going off of that. 00:16:05.580 --> 00:16:09.558 S you have a number or like half the summer days. S 00:16:11.038 --> 00:16:14.168 it's the probabilities of getting into a scenario where 00:16:14.178 --> 00:16:17.678 you have extreme high heat, very low renewable output 00:16:17.690 --> 00:16:20.840 and very low thermal dispatch generation availability 00:16:21.000 --> 00:16:23.668 that the combination of all of those is less than a 00:16:23.678 --> 00:16:27.479 1% probability far below that. So throughout the summer 00:16:27.489 --> 00:16:30.529 we do expect to have enough supply to meet Texas generation 00:16:30.538 --> 00:16:33.489 demand and, and uh electric demand. So these are very 00:16:33.500 --> 00:16:36.158 low probability scenarios. Thank you. (item:5:What conservation efforts should public expect?) My second question 00:16:36.168 --> 00:16:39.340 is, should we reach that scenario? What will happen 00:16:39.349 --> 00:16:41.808 or what should Texas expect? Are we going to conservation 00:16:41.820 --> 00:16:43.759 efforts that you guys have put before. Kind of give 00:16:43.769 --> 00:16:48.969 me some ideas of what may happen. We will be communicating 00:16:48.979 --> 00:16:52.500 early and often with Texas as we get to scenarios where 00:16:52.509 --> 00:16:55.379 we think that there may be tight grid conditions. We 00:16:55.389 --> 00:16:57.940 have used conservation notices over the last many years 00:16:57.950 --> 00:17:00.918 dozens of times. And I think Texas are used to conservation 00:17:00.928 --> 00:17:03.639 in different parts of their life, whether it be water 00:17:03.649 --> 00:17:05.959 or electricity. And so if we get to that, we would 00:17:05.969 --> 00:17:08.299 communicate about the need to conserve energy, what 00:17:08.309 --> 00:17:10.539 we expect the periods of time where we think those 00:17:10.549 --> 00:17:13.288 risks are higher. And as Texans have done, they have 00:17:13.298 --> 00:17:15.847 responded really effectively in the past and we appreciate 00:17:15.858 --> 00:17:18.979 that. So we'll continue to communicate early and often 00:17:18.989 --> 00:17:22.188 when we get into those scenarios, you other other scenarios 00:17:22.198 --> 00:17:25.509 or other in addition to conservation, other ideas that 00:17:25.519 --> 00:17:29.890 we will go with really conservation is the, is the 00:17:29.900 --> 00:17:32.180 tool that we would communicate to the public about 00:17:32.189 --> 00:17:33.838 And then we have a lot of tools that we would use 00:17:33.848 --> 00:17:36.709 internally where we have suppliers that can reduce 00:17:36.719 --> 00:17:39.130 the amount of energy that they're using, that participate 00:17:39.140 --> 00:17:41.689 in programs that ERCOT offers. And so we have large 00:17:41.699 --> 00:17:44.219 customers that participate in that as well as all of 00:17:44.229 --> 00:17:46.729 our emergency reserve tools that we have available 00:17:48.289 --> 00:17:52.578 (item:6:Brett Johnson, The Texan, probability of low wind output) Brett Johnson with the Texan. Um the extreme risk scenario 00:17:52.588 --> 00:17:56.130 estimated, what was it? 61 megawatts obviously very 00:17:56.140 --> 00:18:01.059 low uh uh probability of wind output that low. But 00:18:01.068 --> 00:18:04.088 um, do we know how last summer, how frequently, how 00:18:04.098 --> 00:18:08.838 often wind dipped, maybe not quite that low but very 00:18:08.848 --> 00:18:12.578 very low. Uh, during the summer heat last summer, we 00:18:12.588 --> 00:18:18.868 had at least 12 days where in the 8 to 10 o'clock 00:18:18.880 --> 00:18:23.588 PM range, which is the new time period of increased 00:18:23.598 --> 00:18:29.309 risk. We experienced less than 20% of all the windmills 00:18:29.318 --> 00:18:34.140 generating and data shows that 00:18:35.739 --> 00:18:41.309 on average, on our hottest days, we need 50% of all 00:18:41.318 --> 00:18:46.239 the windmills generating power at nine PM. So we, I 00:18:46.250 --> 00:18:49.779 mean, these are the changes in the data that are driving 00:18:49.789 --> 00:18:54.759 this update. So at least 12 days, last, last summer 00:18:55.390 --> 00:18:59.789 where we experienced low wind later in the evening 00:18:59.799 --> 00:19:04.449 8, 9, 10 o'clock at night when we, we'll have zero solar 00:19:04.459 --> 00:19:08.549 generation, (item:6:Chairman Lake on CONE cap in PUC PCM Plan) I wanna follow up um in your PCM plan, 00:19:09.078 --> 00:19:13.410 I don't think it had a cap. Um Obviously, we see a 00:19:13.420 --> 00:19:16.650 cap in the two legislative proposals right now. Why 00:19:16.660 --> 00:19:19.660 in your plan? Did you not include a cap on that? So 00:19:19.670 --> 00:19:22.559 again, I'm not going to speculate on, on pending legislation 00:19:22.568 --> 00:19:26.098 or ongoing discussions, but just as a technical clarification 00:19:26.108 --> 00:19:30.088 the base case report from the consultants did include 00:19:30.420 --> 00:19:35.180 the same 1, 1.5 times cost of new entry cap that is 00:19:35.189 --> 00:19:36.759 in other parts of the ERCOT market. 00:19:39.299 --> 00:19:43.130 (item:7:Question on a new reality of conservation calls) So you, you mentioned uh that this is a new reality 00:19:43.140 --> 00:19:48.559 um sounds kind of dire, but you're also saying that 00:19:48.568 --> 00:19:51.039 it's more reliable than, than ever. So I'm having a 00:19:51.049 --> 00:19:53.680 little trouble fully understanding what that means 00:19:53.689 --> 00:19:58.338 Does that mean a new reality of regular brownouts or 00:19:58.348 --> 00:20:03.160 is that a new reality of, of more conservation calls 00:20:03.170 --> 00:20:07.410 and alerts? What exactly does that mean? (item:7:Pablo Vegas on widening gap in supply and demand) So I would 00:20:07.420 --> 00:20:11.150 say the supply demand risk is growing. So, one of the 00:20:11.160 --> 00:20:14.709 core differences between last summer and this summer 00:20:14.719 --> 00:20:17.680 is that we're seeing the amount of demand for electricity 00:20:17.689 --> 00:20:20.848 grow faster than the supply of dispatchable generations 00:20:20.858 --> 00:20:23.400 So that is a growing risk that we've been talking about 00:20:23.410 --> 00:20:26.559 That's the long term resource adequacy risk. When we 00:20:26.568 --> 00:20:28.160 say that the grid is more reliable than ever. It's 00:20:28.170 --> 00:20:30.789 because the investments that have been made to ensure 00:20:30.799 --> 00:20:33.719 that all of the resources on the grid will be available 00:20:33.729 --> 00:20:36.618 and running when called on those investments have been 00:20:36.630 --> 00:20:39.578 made. So we expect the thermal dispatchable fleet to 00:20:39.588 --> 00:20:43.189 be in good operating condition. We expect the transmission 00:20:43.199 --> 00:20:45.328 facilities to be in good operating condition. So the 00:20:45.338 --> 00:20:48.640 grid is reliable and the car will run if we ask it 00:20:48.650 --> 00:20:51.789 to run further than we have reliable fuel for those 00:20:51.799 --> 00:20:54.489 are the low probability scenarios that we're talking 00:20:54.500 --> 00:20:58.088 about. And as the chairman noted last summer was the 00:20:58.098 --> 00:21:01.049 first time we saw a scenario where during the peak 00:21:01.059 --> 00:21:03.809 of the summer, there was more electric demand than 00:21:03.818 --> 00:21:08.949 there was dispatchable generation supply. And so that 00:21:08.959 --> 00:21:12.239 continues to get wider that gap. And so the risk of 00:21:12.250 --> 00:21:15.078 getting into tighter hours because of that reality 00:21:15.088 --> 00:21:19.250 is growing. (item:7:Chairman Lake comment on widening gap) Another way to think of it is that before 00:21:19.259 --> 00:21:23.009 Uri, nobody was really maintaining the car with minimal 00:21:23.019 --> 00:21:26.930 margin of safety. There was, there was no operating 00:21:26.939 --> 00:21:30.910 with abundance of caution. There was, it was skating 00:21:30.920 --> 00:21:34.068 on a knife's edge and that's why the legislature had 00:21:34.078 --> 00:21:37.140 the foresight to authorize us to make the changes, 00:21:37.150 --> 00:21:39.410 bring more units online sooner rather than later. That 00:21:39.420 --> 00:21:42.338 never happened before. Expand the margin of safety 00:21:42.469 --> 00:21:45.660 that never happened before. Better coordination with 00:21:45.670 --> 00:21:47.910 the natural gas system, better communication with the 00:21:47.920 --> 00:21:52.338 public in advance of any need for conservation notices 00:21:52.348 --> 00:21:55.239 So those are the operational changes that have been 00:21:55.250 --> 00:21:58.858 made. Um And the not to mention the weatherization 00:21:58.868 --> 00:22:03.559 so that the the existing pieces of the grid we've stabilized 00:22:03.568 --> 00:22:07.670 we've fine tuned and optimized to the greatest extent 00:22:07.680 --> 00:22:11.459 we possibly can. It is now a question of supply and 00:22:11.469 --> 00:22:15.489 demand like Pablo said and again, that this challenge 00:22:15.500 --> 00:22:20.549 has been on the horizon, the risk of that occurring 00:22:20.559 --> 00:22:23.130 is increasing as we have more and more people. We have 00:22:23.140 --> 00:22:25.279 the equivalent of the entire city of Oakland, California 00:22:25.289 --> 00:22:27.729 moving to Texas every year with more devices, more 00:22:27.739 --> 00:22:30.689 demand for electricity. And so it's that increase in 00:22:30.699 --> 00:22:35.618 demand without the market incentives to increase the 00:22:35.630 --> 00:22:40.578 supply of the dispatch power. That is now the resource 00:22:40.588 --> 00:22:44.519 adequacy problem. It's the lack of dispatch on demand 00:22:44.529 --> 00:22:49.729 supply rather than will the car start. Is it operating 00:22:49.739 --> 00:22:53.160 conservatively? And operating well compared to last 00:22:53.170 --> 00:22:58.420 year's uh report, the scenario for an extreme amount 00:22:58.430 --> 00:23:03.568 of unplanned or unplanned outages for dispatchable. Um 00:23:03.868 --> 00:23:06.410 (item:8:Question to Pablo Vegas on improved solar performance in report) Last year, you were projecting that that would create 00:23:06.420 --> 00:23:10.868 a nine gigawatt um loss this year. It's only six gigawatts 00:23:10.880 --> 00:23:13.459 How come, why, why did that change? The reason that 00:23:13.469 --> 00:23:15.920 changed is because the amount of solar production at 00:23:15.930 --> 00:23:19.858 peak is greater. And so during the S A R report, the 00:23:19.868 --> 00:23:23.338 scenarios are modeled at the five pm hour of the summer 00:23:23.500 --> 00:23:27.420 And so we saw increases in solar resources during that 00:23:27.430 --> 00:23:30.959 time. And so the deficiency during that peak period 00:23:31.019 --> 00:23:33.525 shrunk during that point in time. And that's why we're 00:23:33.535 --> 00:23:36.594 talking about the risk period shifting really away 00:23:36.604 --> 00:23:39.243 from that five o'clock peak period because of the more 00:23:39.255 --> 00:23:43.035 availability of solar resources to the evening where 00:23:43.045 --> 00:23:46.184 if it happens to be a very hot day, the heat remains 00:23:46.193 --> 00:23:49.858 the demand remains high and we have low wind wind is 00:23:49.868 --> 00:23:52.650 what we depend on more in the evenings that creates 00:23:52.660 --> 00:23:55.368 the bigger risk scenario. Last really technical question 00:23:55.380 --> 00:23:58.838 (item:9:Question to Pablo Vegas - does growth of batteries mitigate risk?) Um I also noticed that the amount of batteries is seems 00:23:58.848 --> 00:24:00.900 to have risen pretty dramatically even though it's 00:24:00.910 --> 00:24:04.868 still a small, small profile. Uh uh 2000 or roughly 00:24:04.880 --> 00:24:09.890 3500. Y'all are only saying 500 will be available. 00:24:09.900 --> 00:24:15.500 Um I'm curious are not batteries mitigating this way 00:24:15.750 --> 00:24:19.229 Yeah, so the growth in batteries is it's a great trend 00:24:19.239 --> 00:24:21.789 to see batteries are operating throughout the day. 00:24:21.799 --> 00:24:24.699 In the market. And the reason, the way that we set 00:24:24.709 --> 00:24:27.930 the expectation at the peak hour is based on historical 00:24:27.939 --> 00:24:30.500 performance. And the way batteries operate in the energy 00:24:30.509 --> 00:24:33.189 market, they are, they are discharging and charging 00:24:33.199 --> 00:24:36.328 throughout the day. And during the tightest hour, it's 00:24:36.338 --> 00:24:38.828 a percentage of their total capacity that is typically 00:24:38.838 --> 00:24:41.509 available during those tight hours based on how they 00:24:41.519 --> 00:24:45.430 perform prior. And so our 500 Megawatt number is based 00:24:45.439 --> 00:24:48.049 on that historical evidence. As we see more and more 00:24:48.059 --> 00:24:50.368 batteries come on and get more data to work with, we'll 00:24:50.380 --> 00:24:52.858 continue to refine those forecasts but they are providing 00:24:52.868 --> 00:24:55.449 a valuable service. Another way to think about that 00:24:55.459 --> 00:25:00.318 is they have limited duration, which is a factor and 00:25:00.328 --> 00:25:04.108 so on a hot summer day when prices are high, we don't 00:25:04.118 --> 00:25:07.799 control when they discharge. But there's historically 00:25:07.809 --> 00:25:10.529 the data has shown that a lot of batteries will discharge 00:25:10.539 --> 00:25:14.400 from 6 to 8 PM or 7 to 9 PM and they're 00:25:14.410 --> 00:25:17.170 out of juice. But if wind doesn't pick up at eight 00:25:17.180 --> 00:25:21.229 or nine PM, we still need that dispatch power, but 00:25:21.239 --> 00:25:26.309 the batteries are empty. And so that historical performance 00:25:26.318 --> 00:25:29.209 factors into a bit of a lower number later in the day 00:25:31.150 --> 00:25:35.229 (item:10:Chairman Lake on new dispatchable generation entry) Chairman Lake you mentioned earlier, generators committing 00:25:35.239 --> 00:25:38.338 to additional generation specifically natural capacity 00:25:38.539 --> 00:25:41.259 energy was one cal is another there been a few others 00:25:41.489 --> 00:25:44.098 Do you expect more of those kind of commitments to 00:25:44.108 --> 00:25:49.559 come? Oh, I'll have to defer to those companies on 00:25:49.568 --> 00:25:55.009 and the broader investment universe on what those plans 00:25:55.019 --> 00:25:59.509 are. The legislature directed us to develop and procure 00:25:59.519 --> 00:26:03.989 a reliability service to ensure reliable power during 00:26:04.000 --> 00:26:08.380 periods of low non dispatch power we developed and 00:26:08.390 --> 00:26:10.809 unanimously approved the PCM as what we thought was 00:26:10.818 --> 00:26:14.759 the best way to deliver that reliability service. And 00:26:14.769 --> 00:26:17.838 like Pablo said, and you've heard us say frequently 00:26:18.189 --> 00:26:22.088 we're completely aligned in supporting the legislature's 00:26:22.098 --> 00:26:24.769 desire for more on demand dispatch power. There are 00:26:24.779 --> 00:26:27.189 a lot of ideas under consideration and a lot of discussions 00:26:27.199 --> 00:26:29.779 going on and I'm sure there are many discussions, the 00:26:29.789 --> 00:26:33.338 investment community. Um but uh that's a question for 00:26:33.348 --> 00:26:35.848 them. OK. What uh what kind of rate would we have to 00:26:35.858 --> 00:26:39.930 increase dispatch to catch up to the demand? Correct 00:26:40.900 --> 00:26:43.439 Uh I mean, again, this is, this is a scenario analysis 00:26:43.449 --> 00:26:47.078 So there's no single one number, there's, there's some 00:26:47.088 --> 00:26:49.559 good analysis in the consultant's report in E3 00:26:49.910 --> 00:26:53.410 Uh So I, I refer you to that. I wanna get to 00:26:53.459 --> 00:26:58.239 the, (item:10:Do dispatchable generators want to some to Texas?) I have one more question. So when we talk about 00:26:58.250 --> 00:27:02.068 uh too much or too much demand, not enough supply, 00:27:02.229 --> 00:27:05.479 are there suppliers willing to come on them to help 00:27:05.489 --> 00:27:09.818 us with that issue or I guess I'm just trying to understand 00:27:09.828 --> 00:27:13.449 like, do suppliers want to come on to Texas this grid 00:27:13.459 --> 00:27:17.380 right now? Uh Well, I mean, that goes back to the investment 00:27:17.390 --> 00:27:20.578 question. We, we've got the, the existing generators 00:27:20.588 --> 00:27:22.630 we've got, are the ones that we're gonna be operating 00:27:22.640 --> 00:27:26.660 with this summer. No, you can't build a new generator 00:27:27.390 --> 00:27:30.979 in anything less than a couple of years. So we're operating 00:27:30.989 --> 00:27:34.529 with the, the grid we had last summer. And if you look 00:27:34.539 --> 00:27:37.650 back to July 11th and July 13th when we issued calls 00:27:37.660 --> 00:27:40.920 for conservation, every generator that could operate 00:27:41.699 --> 00:27:45.969 in Texas was operating on those days and our reserves 00:27:45.979 --> 00:27:48.368 were tight enough that we needed to ask for conservation 00:27:48.380 --> 00:27:51.568 And Texans responded and we, we saw it in the data 00:27:52.039 --> 00:27:57.209 and that was a tremendous help. This year we have the 00:27:57.219 --> 00:28:01.680 same amount of generators with a lot more Texans. 00:28:03.618 --> 00:28:06.250 Right? We've got some, some reporters on the phone 00:28:06.259 --> 00:28:11.848 It uh moderator. Is it Brad? Correct? Yes. Yeah. If 00:28:11.858 --> 00:28:15.039 you have to take some, some uh questions from callers 00:28:15.049 --> 00:28:16.930 and they can say their name and identifying their, 00:28:17.259 --> 00:28:20.449 who they're representing. That'd be great. Sure. And 00:28:20.459 --> 00:28:22.489 if anyone for the phone lines at this time has a question 00:28:22.500 --> 00:28:25.529 please press one then zero on your telephone keypad 00:28:25.959 --> 00:28:27.469 And again, if you have any questions at this time, 00:28:27.479 --> 00:28:28.809 please press one and then zero. 00:28:35.519 --> 00:28:37.269 Once again, if there are any questions for the phone 00:28:37.279 --> 00:28:39.608 lines, please press 1 to 0 at this time. 00:28:45.689 --> 00:28:47.739 And it does appear at this time. There are no questions 00:28:47.750 --> 00:28:48.358 in Q sir, 00:28:51.098 --> 00:28:55.828 I don't want. So for next summer, um the population 00:28:55.838 --> 00:28:58.769 is gonna go up. Are we expecting that um there to be 00:28:58.779 --> 00:29:01.348 enough supply or the supply to start catching up or 00:29:01.358 --> 00:29:03.868 how long is this gonna be a problem for Texans going 00:29:03.900 --> 00:29:08.689 forward with the supply and demand open. This is about 00:29:08.699 --> 00:29:11.009 the analysis and the expectations for this summer, 00:29:11.019 --> 00:29:15.049 the scenarios, potential scenarios. This summer, the 00:29:15.059 --> 00:29:18.680 CDR report looks at longer term resource supply and 00:29:18.689 --> 00:29:22.348 demand resource adequacy. So that's the best data we 00:29:22.358 --> 00:29:25.598 have now on the longer term picture. But of course 00:29:25.608 --> 00:29:28.868 a lot of this depends on the outcome of the legislative 00:29:28.880 --> 00:29:32.140 session. And that's why the legislature both I know 00:29:32.150 --> 00:29:33.930 that both the House and the Senate and the governor 00:29:33.939 --> 00:29:37.709 consider this a top priority. Their work. Both chambers 00:29:37.719 --> 00:29:42.930 and the governor are working hard on this and we look 00:29:42.939 --> 00:29:45.459 forward to implementing the policies they direct us 00:29:45.469 --> 00:29:48.799 to. But the urgency to act is now the urgency is high 00:29:48.809 --> 00:29:52.219 and we need to make changes soon in order to get us 00:29:52.229 --> 00:29:55.390 on a trajectory where the market design incentivizes 00:29:55.400 --> 00:29:57.568 building more dispatch, generation, supply 00:29:59.160 --> 00:30:02.358 MOUs checks from phones. Yep, we do have a question 00:30:02.368 --> 00:30:04.719 here from the line of Herbert. I'm sorry, Herman crave 00:30:05.078 --> 00:30:07.189 please state your affiliation followed by your question 00:30:08.719 --> 00:30:11.598 (item:11:Herman Trabish, Utility Dive - how are Load flexibility affecting calculations) Hi, my name is Herman. I'm with utility Dive 00:30:11.650 --> 00:30:16.709 Um I would like to know how your calculations 00:30:16.719 --> 00:30:20.328 on your demand response program figure into this. I 00:30:20.338 --> 00:30:24.430 appreciate the urgency of your situation and I appreciate 00:30:24.439 --> 00:30:27.709 you communicating it, but I don't understand how the 00:30:27.719 --> 00:30:30.799 most flexibility options that you have figure into 00:30:30.809 --> 00:30:31.949 your calculation. 00:30:33.670 --> 00:30:37.059 So hermit the way that we factor in the Load responses 00:30:37.348 --> 00:30:41.858 as we operate throughout the day and we see reserves 00:30:41.868 --> 00:30:46.838 coming down. What we do is we deploy the emergency 00:30:46.848 --> 00:30:49.598 reserve services that we have before we ask Texans 00:30:49.608 --> 00:30:53.890 to start conserving their own generation usage. So 00:30:53.900 --> 00:30:57.608 we have demand response programs that include large 00:30:57.618 --> 00:31:01.880 industrials and aggregated um supplies of Load that 00:31:01.890 --> 00:31:05.910 we would leverage. We purchase those each season so 00:31:05.920 --> 00:31:10.660 that we've got enough to be able to manage those fluctuations 00:31:11.140 --> 00:31:14.500 As we showed in the report, the total amount of deployed 00:31:14.509 --> 00:31:17.930 reserves that we have typically is between four and 00:31:17.939 --> 00:31:21.818 5000 Megawatt of reserves that we would deploy throughout 00:31:21.828 --> 00:31:24.959 the cycle of leading up to an emergency operation and 00:31:24.969 --> 00:31:27.640 then into an emergency operation, we would pull the 00:31:27.650 --> 00:31:30.309 levers on differing emergency reserves. But the Load 00:31:30.318 --> 00:31:32.920 and demand response is one of the first ones that we 00:31:32.930 --> 00:31:35.949 would pull and we would ask our suppliers of that to 00:31:35.959 --> 00:31:39.789 do this to do so before we would ask Texans to conserve 00:31:39.799 --> 00:31:40.848 their own energy supply. 00:31:43.818 --> 00:31:48.989 Uh If I may follow up, are you saying that the calculations 00:31:49.000 --> 00:31:54.459 that lead to your, your uh the urgency messaging include 00:31:54.469 --> 00:31:57.108 the demand response or that that would come into play 00:31:58.588 --> 00:31:58.838 and then 00:32:01.439 --> 00:32:04.848 no, it includes the demand response. So we include 00:32:04.858 --> 00:32:08.568 the utilization of the demand response through the 00:32:08.578 --> 00:32:12.269 um the scenarios that we're showing in the S A R report 00:32:12.559 --> 00:32:15.559 And as you look at the as the scenarios indicate a 00:32:15.568 --> 00:32:18.858 tighter condition, you'll see there's a row for the 00:32:18.868 --> 00:32:22.689 deployment of emergency resources. And so we do include 00:32:22.699 --> 00:32:26.769 those in the calculations of the net result of the 00:32:26.779 --> 00:32:28.549 of the performance of that scenario. 00:32:30.219 --> 00:32:32.729 Got it. Thank you. You have any other questions on 00:32:32.739 --> 00:32:35.858 the phone at this time? There are further questions 00:32:35.868 --> 00:32:39.739 Thank you. Thank you very much. Thank you. Thank you 00:32:41.479 --> 00:32:41.989 No problem.