Good morning. (item:0.1:Chairman Lake calls meeting to order) 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 May 11, 2023. For the record, my name is
Peter Lake and I'm joined today by Will McAdams, Lori
Cobos, Jimmy Glotfelty and Kathleen Jackson. Mr. Journeay, could you please walk us through the Consent Items
on today's Agenda. Good morning, Commissioners. (item:0.1:Chairman Lake asks for motion to approve items on Consent Agenda) By individual
ballot, following items were placed on your Consent Agenda.
4-9, 11, 14, 15, 17, 18 and 23. Is there
a motion to approve the items just described by Mr.
Journeay? So moved. Second. A motion and a second. All in favor, say aye. Aye. None opposed.
Motion passes. (item:1:Chairman Lake lays out instructions for public comment) We'll start with Public Comment. Oral
comments related to specific Agenda Items will be heard
when the item is taken up. This is for general comments
only. When we do get to oral comments on specific items.
Stakeholders should not approach the table unless oral
argument has been granted or they have been invited
by a Commissioner. Speakers will be limited to 3
minutes each as always. (item:1:Mr. Journeay confirms there are no public comments) Mr. Journeay, do we have anyone
from the public signed up to speak? No, sir. No one signed up this
morning. Thank you, sir. Public Comment is now closed.
Will you bring up the next item on our Agenda, please sir?
(item:2:51646, STM for of Vista Ranch Water Supply Corp. & Aqua Water Supply Corp.) Item 2 is Docket 51646, the application of Waters
of Vista Ranch Water Supply Corporation and Aqua Water
Supply Corporation. For an STM of facilities and certificate
rights in Fayette County. A proposed order was filed
on March 26th. Commissioner Jackson has a memo and
I have a memo with proposed agenda. Thank you, sir. Uh, so Mrs. Jackson
has a memo. Would you like to lay out for us? Okay.
Thank you very much. (item:2:51646, Commissioner Jackson lays out her memo) Um, I have concerns with the present
record. Uh, whether it's sufficient to approve the requested
CCN amendment. And I would recommend remanding this
case for additional information. Regarding the applicants
sale and transfer of all facilities and certified service
area under Vista Ranches CCN Aqua. The record is unclear as to
whether Vista Ranch's CCN is a facilities only CCN or a
bounded service area CCN. And this should be clarified.
The applicants proposed amendment would add 4,815 acres
to Aqua Water service area in Fayette County. However,
it's not clear from Aqua's revised maps that were filed
on May 23, 2021. Or other evidence that Aqua has addressed
the statute requirement for its entire requested area.
For areas where facilities are needed to provide the
requested service, but are not yet fully constructed.
Aqua must file a capital improvements plan, including
a budget and estimated timeline for construction. Of
all facilities necessary as required by the Texas Water
Code. While Aqua has filed a capital improvements plan.
It did not include an estimated timeline for construction
of all facilities necessary. To provide service to the
entire required area. For any portion of its requested
CCN area that do not have customers. Existing facilities
or plans for building facilities to serve future customers.
Aqua must address the need for additional service, including
whether any landowners, prospective landowners, tenants
or residents have made written application or requests
for service. The record is also unclear as to whether
notice was mailed to each owner of a tract of land.
That is at least 25 acres and is wholly or partially
included in the area proposed to be certified. The
applicants could should supplement the record with
evidence sufficient to show. That the notice requirements
and statute have been met. Finally, Aqua's revised maps
that were filed on May 23, 2021. For the reduced 5,496
area acre, acres that are requested um, area. Uh, have
the same deficiencies as those identified in the maps
originally filed with the application. The applicants
should supplement the record. To provide maps of the
5,496 acre requested area. That are consistent in detail
with what the Administrative Law just required, in order
No. 2. And with that, I would recommend that we
remand this application to Docket Management.
Well stated, through and comprehensive as always. Uh, everything
you said in the following memo makes sense to me. Uh, any
other thoughts or comments. (item:2:51646, Commissioner McAdams' comments on Commissioner Jackson's memo) I, I sincerely appreciated that memo. Um,
shared the same concerns. Uh thought we, we. We're trying
to establish consistency um, in our application of the
Water Code and our own um, substantive rules. And so uh, that
memo helps establish and uh, affirm expectations for our
industry. To attempt to comply with in future filings.
So I think this is a very good uh, timely memo and I
would support uh, the parameters outlined in it. Agreed.
The same. Agreed. All right.
You have a motion for us? (item:2:51646, Motion to approve amendment to application) I would move to amend this application to Docket
Management. And order that Aqua Texas provide information
demonstrating that it has addressed the statutory and
real requirements, to qualify for a CCN amendment. That
includes the entire requested area. We have a motion. Is there
a second? Second. A motion and a second. All in favor, say aye. Aye. None opposed.
Thank you, Mrs. Jackson.
Thank you. Thank you. Next item, please. (item:3:53561, application for Aqua Texas to amended CCN in Henderson County) Item 3 is Docket 53561 is the application
of Aqua Texas to amended CCN in Henderson County. A
proposed order was filed April 4. Uh, Commissioner
Jackson has a memo. Mrs. Jackson? (item:3:53561, Commissioner Jackson lays out her memo) Um, I have 2 primary
concerns, um with the application. Uh, the sufficiency
of the record to support Aqua's CCN amendment and the
discrepancy of the maps in the record. And I would
recommend remaining this case for additional information.
Aqua's proposed amendment would add 944, 994 acres to Aqua's
water service area in Henderson County. It's not clear
from Aqua's revised need for service map or other evidence.
That Aqua Texas has addressed the statute requirement
for the entire requested area. Aqua's revised need for
service map filed on June 23, 2022. Is inconsistent
with its map filed on May 4, 2022. Titled to my buffer
with cities and water CCN's. Aqua should clearly designate
all areas that have existing infrastructure for water
service. For areas where facilities are needed to provide
the requested service, but are not yet fully constructed.
Aqua must file a capital improvements plan, including
a budget and estimated timeline for construction of
all facilities necessary, as required by the Texas Water
Code. If Aqua is proposing a substantial addition to
its CCN requiring capital improvements, in excess of
$100,000. Aqua must provide sufficient financial assurance,
as required under Commission rules. For any remaining
portions within its requested service area. Aqua must
address the need for additional service, including whether
any landowners, prospective landowners, tenants or
residents have made a written application for requests for service.
For these reasons. I would uh, recommend remanding this
case. Thank you, ma'am. All, all makes sense to me. Any
thoughts, comments? No. Thank you again, for this memo as well.
It's a good framework. (item:3:53561, Commissioner McAdam's comments on Commissioner Jackson's memo) Similar to my thoughts on the
last one, and I'd like to point out. We depend on companies
like Aqua, to sort of set the standard. Uh, as we try to
uh establish the consistency with the, within the law
and the rules. So, we appreciate their diligence on
this and their engagement on reman, to try to answer
these questions. Um. (item:3:53561, Chairman Lakes comments on Commissioner Jackson's memo) That's a good point.
Uh, yes. Consistency and sticking to the standards is
important. And companies like this are important to
the future of water in Texas. That they've got gotta
stick to the standards. That's right. Yeah, well put. Do we have a motion, motion
for us Mrs. Jackson? (item:3:53561, Motion to remand application to docket management) I would move to remand this application
to Docket Management. In order that Aqua Texas provide
information demonstrating that it has addressed the
statutory and real requirements. To qualify for a CCN
amendment, that includes the entire requested area.
Second. Gotta motion and a second. All in favor, say aye. Aye. None
opposed. Motion passes. Thank you, Mrs. Jackson again.
Great job. Next item, please sir. I don't believe we have anything
for Items 10 or 12. Takes us to (item:13:53766, application for Southwestern Public Service Co. to implement a net surcharge) Item 13, Docket 53766.
The application of Southwestern Public Service Company
for authority to implement a net surcharge, uh associated
with Docket 51802. Uh, Commissioner Cobos has recused
herself from this matter. Proposal for decision was
filed March 28. The ALJ did not file any changes
in response to exceptions. I have a memo with proposed
changes to the proposal for decision.
Thank you, sir. Thoughts, comments on this one. Well, uh I
I think I'll try to set the table. Sure. (item:13:53766, Commissioner McAdams' comments on Southwestern Public Service Co. application) Um, as a starting
point. I, I would support the PFDs uh 1.86% um, for
the debt rate in this matter. And uh, let me describe
kind of the, the rationale behind that. SPS is a short
term debt rate of 1.86%. In my view, most closely
matches the length of time that SPS will carry the
the surcharge balance, which is about 2.5 years. And
I think that's an important distinction. In terms of
the arguments made within the filing. Um that, that
promote a more long term rate. And so uh, I do not
favor using the long term debt rate of 4.2%. As SPS's
long term debt rate typically has a maturity period
of 30 years. And so to me, it's a bit of apples
to oranges. But you could certainly see why people
are interested. Whatever we come to and whatever the
prevailing will of the body is. I just want us to be
consistent moving forward. I seem to be saying that
a lot this morning. But I think we'll face this for
other utilities as well. And as long as we collectively
have an agreement, this is how we're going to apply
these certain circumstances, uh with these rates of return.
It's better for the system and managing expectations.
So I,I many thoughts on this.
(item:13:53766, Chairman Lake's comments on Southwestern Public Service Co. application) Thanks for setting the stage for us. And uh,
the theme of consistency is worth is important enough
that it's worth repeating. And it's better for the Commission
Staff, Legislature and most importantly, our industry.
The more consistent and clear we are with that, the
better. Um, so from what I heard. You you're, you're
good with the 1.86%? Yes, sir. Just under the distinction
that it's a more short term application. For short term.
It's taking the actual short term interest rate, on
the actual short term debt. And. Applying it. Whatever that is, grab
that number and apply it. Because it is the most similar
timeframe. That's my view, sir. Agree with that, as well. Uh, well
well put. Any thoughts, comments? I support 1.86% as
well. I do as well.
Oh, you're recused.
Uh, Commissioner Cobos says no comments on that. I was looking
at you.
With that, Mr. Chairman. Do you have a motion? (item:13:53766, Motion to approve PFD) I would move to adopt the PFD. Second. Gotta motion and second. All
in favor, say aye. Aye. None opposed. The motion passes. Thank
you, Commissioner McAdams. Expected more push back on that.
Next item, please Mr. Journeay. (item:16:54605, application for El Paso Electric Company to amended CCN, Generation unit 6, Newman Station) Item 16 is Docket 54605.
It's the application of El Paso Electric Company to
amend it CCN. Regarding Generation unit 6, Newman Generation
Station. A draft preliminary order was filed on May
10.
Uh, this is something we've seen recently. Um I don't,
I don't know if it's extremely complicated or extremely
straightforward. But would love to hear y'alls thoughts
on it. I'm hoping for the latter. Don't you represent these people? I was gonna say. (item:16:54605, Commissioner Glotfelty's comments on El Paso's CCN application) Seems straight
forward to me. Sounds like part of the Western market. I think uh. I think we
issue a CCN for the entirety of the project. And, um.
You think we did issue? We did, that's right. I agree. Um, and uh
therefore the application should be withdrawn or dismissed.
And, um you know we'll have another proceeding for
the right impact. But, um this becomes moot. If we
accept the fact that we've, uh already certificated
the entire project. (item:16:54605, Commissioners McAdams, Cobos, Jackson & Chairman Lakes agreement with comments) Great minds think alike.
I agree with Commissioner Glotfelty. It's straightforward
in my opinion. I agree as well. All right. Uh, it all
makes sense to me. Like elegance and simplicity. So uh, I move in accordance
with my discussion. (item:16:54605, Motion to approve as per discussion) So if your discussion is, would
you move. Uh, to allow El Paso Electric 10 days to
withdraw the application. Or failing that, Docket Management
is directed to prepare a PFD dismissing the proceeding?
That's exactly what my motion was gonna be. All right. I would second
that. We, we've got a, a very articulate motion and
a robust, robust second and an echo. Uh, the motion
and a second. Uh, all in favor,
say aye. Aye. None opposed. Motion passes. Mr. Chairman, I just want to let
you know. This matters it so, I'll request that they
return this matter to us. So that we can deal with this.
Thank you,
sir. Next item, please. I think we don't have anything until
28. Um,
(item:28:Chairman Lake lays out information regarding state and federal Legislation) regarding state and federal Legislation, etcetera.
FERC recently issued notice of proposed rulemaking regarding
national transmission corridors. That would affect the
areas outside of ERCOT. So Tom Hunter is here to lay
out the issue for us. Good morning Chairman, Commissioners. (item:28:Tom Hunter, Special Counsel with PUCT concerning draft comments) Uh, before
you today is draft comments in response to the FERC NOPR. Relating
to permitting authority under the recent amendments
to the Federal Power Act. Essentially, we are um urging
that FERC allow state authority states to continue to
allow their processes to go forward. They work very
well, particularly in Texas as you all well know. And
we are asking that FERC refrain from frankly from interfering
in those processes prematurely. As is contemplated in
the, in OPR. So um, be happy to answer any
questions about the draft comments.
(item:28:Commissioner Cobos' thoughts on draft comments) Um thank you, Tom for assisting us with that. Of, as
you may know. Uh, our outside counsel, FERC outside counsel
flagged the issue for us. Um, and so with my coverage
of MISO and um Commissioner McAdams coverage of SPP.
And, and Commissioner Glotfelty's coverage of the West.
The this, this NOPR impacts areas outside of ERCOT. And, um
could have significant impacts um to our ability to
um you know once our, our CCN authority. Because FERC
can come in the back end if they designate a national,
National Interest Transmission Corridor Project. And
trump our authority. Even though we denied, um a transmission
project. So I think it's very important that we be
proactive in this NOPR. And provide our feedback to FERC
on um the robust effective CCN transmission process
that we have in, in Texas period. Um I, I think um
this NOPR doesn't apply to ERCOT. But we must remain
proactive, as I think some of the underlying DOE
studies. That FERC will be relying on, have been talking
about Texas in general, not just non-ERCOT areas. So
um matter of fact, the DOE just issued out a notice
of intent this week. Where they're gonna be identifying
um requesting information to start building um their
framework for designating projects, national interest
transmission corridor project. So we um, have to remain
vigilant um, on our jurisdiction here in Texas. And
I thank Tom for his hard work and working with FERC outside
counsel on this matter. Well, well put. Um, agree with
everything you laid out. Other thoughts or comments?
(item:28:Commissioner Glotfelty's thoughts on draft comments) I do. Uh, uh in the interest of full disclosure. Um, I
was one of the people that wrote this section of the
law um, back in 2003. Which ultimately became law in
2005. Geez, Jimmy. Um,
we were obviously trying to get to spur transmission
development at the time. Um, because it had been declining
for many, many years. And um, so I find myself on the opposite
side of where I was before. Which is um, there I wanted
to usurp state jurisdiction where we needed to.
And.
Isn't it funny how things work out? Now I find that I'm protecting it. So um, I think the
comments are right. I mean, I would say thank you to
Kay Hutchison and Joe Barton for putting the ERCOT
exemption in there. Um, they were the ones who made it
happen. And, um this it's challenging. Um, you know
where you deal with the federal and state jurisdiction.
And, you know, I think that a lot of emphasis has been
put on interregional, interstate transmission lines.
And the threat of some of these things is actually
moving the projects forward. And um I, I'm happy
with these comments. I think we're protecting what
I think we rightfully should protect. Um, but uh just
want y'all to know that I wrote it.
And I won't take it personally, if we file these comments.
That was my main concern.
(item:28:Commissioner McAdams' thoughts on draft comments) Uh, Mr. Chairman. I, I support the, the comments as
well. I think uh, uh FERC's getting into a bit of a
tangle here now. Um, just on sighting and routing. Uh,
those are complex and dynamic uh issues that come up.
And frankly they, they need the states as much as
they can get them to help. Um, uh assuage concerns as
These large scale infrastructure projects move forward.
And I, I think Commissioner Glotfelty would agree with that.
The state shouldn't stand as an impediment, but as
a partner to try to work, work their way through these
things. I mean, uh the interstate system proceeded
forward accordingly as well. The states uh attempted
to collaborate with the federal government. And I,
I think these comments are constructive, constructive.
Um, in attempting to establish our interest in that
relationship. Yeah, let me just say one thing when
we were creating this, the National Interest Electric
Transmission Corridor. The intent was to be very narrow
and very deliberate. That this wasn't for every transmission
line across the country. Uh, so you could bypass the
states, this was the last resort option. So as long
as we can, you know, keep ensuring that it's a last
resort option. Um not a not, not the first option.
Um, states have to go first then. Um again, I think
the comments articulate what uh, what we should be um
supporting. Yeah, along along those lines. (item:28:Chairman Lake's thoughts on draft comments) I, I agree
with everything that's been set up here. Um, and I would
ask for y'all's consideration, along along the lines
what you were talking about. Around the section, that
addresses the duplicative nature of the transmission
sighting. Um and, and for prefiling, moving at the
same time. Uh, because if our utilities are, are
gonna be participating in the FERC process at the same
time. And there's a good chance that are already very
good and continuously improving transmission sighting process.
We'll approve the line, but our ratepayers will have
to pay for what was an unnecessary. What ends up being
a completely unnecessary. And redundant process. Yeah. Completely unnecessary,
redundant proceeding. Uh so if, if we could make a
note to highlight that problem. If y'all are amenable
to that?
I'm amenable to that, yeah. Definitely. Yeah. Do not want to burn any more ratepayer money in D.C. That
was absolutely necessary. All right, appreciate the
discussion. (item:28:Motion to approve draft comments) Uh, is there a motion to approve the draft
comments as amended by our discussion at the dais?
So moved. Second. Gotta motion and a second. All in favor, say aye. Aye. None opposed.
Motion passes. Thank you. And I think that. Thank you, Tom. Uh,
I think that covers the full Agenda for today, and we
do not have anything for Executive Session. (item:28:Chairman Lake adjourns meeting) So having
no further business before the Commission. This meeting
of the Public Utility Commission of Texas is hereby
adjourned.