WEBVTT

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(item:0.1:Chairwoman Jackson calls meeting to order) Good morning. This meeting of the Public Utility Commission

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of Texas will come to order. To consider matters that

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have been duly posted with the Secretary of State for

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June 29, 2023. For the record, my name is Kathleen Jackson

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and I'm joined by Will McAdams and Jimmy Glotfelty.

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Commissioner Lake and Commissioner Cobos are out today,

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due to personal matters. (item:0.1:Chairwoman Jackson asks for motion to excuse Commissioners Lake and Cobos) I would like to entertain

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a motion to excuse their absence. So moved. Second. We have a motion

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and a second. All in favor, say aye. Aye. Motion passes.

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Sheila, could you please walk us through the Consent

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Items on today's Agenda? Yes. Good morning Commissioners.

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By individual ballot, the following items were placed

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on your Consent Agenda. Items 4-6, 8, 10-

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12, 14-25, 35, 44 and 45.

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(item:0.1:Chairwoman Jackson asks for motion to approve items on Consent Agenda) I will entertain a motion to approve the items just

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described by Sheila.

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So moved. Second. I have a motion and a second. All in favor, say aye.

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Aye. Motion passes. Additionally, Item No. 28 will not

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be taken up.

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(item:1:Chairwoman Jackson lays out instructions for public comment) Let's begin with Item No. 1, Public Comment. Oral

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comments related to a specific Agenda Item will be

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heard when the item is taken up. This is for general

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comments. When we get to oral arguments on specific

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Items, stakeholders should not approach the table unless

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oral argument has been granted or they have been invited

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by a Commissioner. Speakers will be limited to 3

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minutes each. Sheila, do we have anyone from the public

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signed up to speak? Yes, ma'am. We have one person

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that signed up to speak, Cyrus Reed.

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(silence)

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Thank you. (item:1:Public Comment from Cyrus Reed, Lone Star Chapter Sierra Club on Item 43 rulemaking calendar) For, for the record Cyrus Reed, Lone Star Chapter

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of the Sierra Club. Uh first of all, congratulations

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on uh I guess the interim appointment. But uh good

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choice and uh thank you for all your work and your

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service. And like to thank he's not here, but uh former

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Chairman Lake for his service as well. Um my comments

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actually relate to one of the agenda items, but I'll

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be very, very brief. Which is Item 43 rulemaking calendar.

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I just wanted to remind you you're not going to be

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surprised by this. That the blueprint you passed had

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two items on the demand side. Uh one of them was to

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look at notal pricing and that is being done at ERCOT.

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The other was to examine the efficiency programs of

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the 8 private utilities. And, you know, we had

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a very robust stakeholder group. But I don't see it

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on the calendar yet. Uh and the utilities are already

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putting in their 2024 plans and their EECRFs. So I

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just wanted to remind the Commission that there's no

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time like the present with this heat wave. To take up

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getting more efficient and hopefully more robust programs

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for demand response, energy efficiency. And also a

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reminder that there was actually a Bill the Governor

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didn't veto. Which was SB1699 which deals with aggregated

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distributed energy resources. But it also includes

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a little bit of a um a little, a little push towards

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you guys for residential demand response, as part of

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that Bill. That needs to be implemented through rulemaking.

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I don't see it on the calendar. I know it's early. Legislature

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just met, but I just want to remind you of those two

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facts. Review of energy efficiency, what we can do

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to make them better and also that Bill. So that's all

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I had and with that, I'll be quiet. Happy to answer

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any questions.

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Very good. Thanks Cyrus. Thank you. Thanks so much for being here. 

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Next up is Item No. 2. Sheila, will you lay out

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this item? Yes, ma'am. (item:2:Application of Texas Water Utilities, LP for pass through
gallonage charge) Item No. 2 is Docket No.

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49242. This is the application of Texas Water Utilities,

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LP for a pass through gallonage charge. A revised proposed

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order was filed on June 1 and Commissioner Glotfelty

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filed a memo. Very good. Would you like to lay out

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your memo, please? Yes, it's very, very important.

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(item:2:Commissioner Glotfelty lays out his memo) Um uh first of all I, I uh support the revised

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proposed order with a few changes that are associated

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in my memo. There are technical cleanups. Uh, two of

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them deal with uh, ordering paragraphs. One of them

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deals with a conclusion of law. Um, they're fairly

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self-explanatory. But uh, if you would all like to

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get into the discussion, happy to. Otherwise I make

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a motion to uh approve them, um with the changes

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consistent with my memo. Yeah, uh. (item:2:Commissioner McAdams’ thoughts on Commissioner Glotfelty's memo) Madam Chair I,

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I agree with uh, the suggested changes in the memo.

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I appreciate the Commissioner filing the memo. I believe

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it helps move this case along. And uh and, and I would

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second the motion. To approve the revised proposed

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order consistent with the Commissioner Glotfelty's memo.

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(item:2:Motion to approve revised proposed order concerning memo) Well, very good. We have a motion and a second. All in

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favor, say aye. Aye. Motion passes.

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Next up is Item No. 3. Sheila, will you lay

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out this item? Yes. (item:3:Complaint of Jeff Connors against Gallery Apartments, Roscoe Property Mgmt & Conservice) Item 3 is Docket No. 51619.

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The complaint of Jeff Connors against the Gallery Apartments,

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Roscoe Property Management, and Conservice. A proposal

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for decision was filed on May 15. Mr. Connors, the

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Gallery Apartments and Roscoe Property filed exceptions

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to the PFD. The SOAH ALJ filed changes to the PFD

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on June 20. And in this proceeding, Chairman Jackson

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filed the memo. And also we had the Commission Counsel

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memo that was filed with proposed changes to the order.

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(item:3:Chairwoman Jackson lays out her memo) I did file a memo. Here, the SOAH ALJ found that the

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evidence indicates that some tenants, in addition to

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Mr. Connors were overbilled. The PFD gives The Gallery,

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the option to choose between filing a compliance report

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to address the overbilling. Or documentation to show

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that it no longer owns the apartment in question. Instead

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I recommend that the Commission reject this order and

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paragraph. And add a conclusion of law requiring the

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gallery to comply with Commission rules, regarding overbilling.

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Finally, I recommend that this matter be referred to

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Compliance and Enforcement Staff. To conduct an investigation

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as laid out in my memo. Do you have any additional

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thoughts on this one? No, I appreciate the sentiments

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in the memo.

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(item:3:Motion to adopt PFD and refer to Enforcement, as per memo) So, uh with that Madam Chair. I would move to adopt

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the PFD and refer the matter to Enforcement uh consistent

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with your memo. Second. I have a motion and a second. All in

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favor, say aye. Aye. Motion passes.

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Can we go back to that for just a moment? Did you

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include the, you said the Commission Counsel's memo,

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Is that right? And, and the Commission Counsel

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memo, yes. Did you see that part of that? Ok, great. We've

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got that. All right. I'll look at Steven and see if

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we need to vote again. But I think we've got all the

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options, all the elements for that. All right. 

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Items 4, 5 and 6 were consented. Next up is Item No.

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7., Sheila, will you lay out this Item? Yes. (item:4:Application of Aqua Texas & Southern Oaks Water Supply STM) Item

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4 is Docket No. 54341. This is the Application

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of Aqua Texas and Southern Oaks Water Supply for the

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sale, transfer or merger of facilities and certificate

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rights in Navarro and Freestone counties. And for dual

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certification with Winkler Water Supply Corporation.

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We have two proposed interim orders that were filed

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on June 1. And in this proceeding, Commissioner McAdams

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filed a memo and we also have a Commission Counsel

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memo that was filed with proposed changes to the order.

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So will you, thank you so much. (item:7:Commissioner McAdams lays out his memo) May I allow my memo Madam Chair? Great. Um so Commissioners

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there are through. Uh as stated, there are two proposed

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interim orders before the Commission in this proceeding.

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Uh I recommend in this instance, the Commission approve

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the proposed interim order that does not address fair

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market value or, or initial rate approval. And this

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is because Aqua has shown the financial managerial

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and technical ability or wherewithal. To operate Forest

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Grove's system. The lack of capital, of a capital improvement

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plan. In my view, should not prevent the Commission from

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authorizing the sale to proceed in this instance. However,

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a capital improvements plan that fully complies with

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the statutory and rule requirements must be filed. Before

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the Commission will issue the final order in this proceeding.

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Fair market value should not be addressed in this interim

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order, because its determination is formulated. And is

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not related to the Commission's decision of whether

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a public hearing is necessary. And similarly, it would

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it would be premature and unnecessary to address the

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initial rate approval in this interim order. The Commission

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will set rates for Aqua to charge customers in the certificated

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service area. It is acquiring when the commission, Commission

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issues its final order in this proceeding. Ultimately

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approving the transaction and rates should not be set

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before then. Um the only substantive changes to the

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proposed interim order that I recommend. Uh besides

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those set forth in the Commission Counsel memo filed

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on June 19, 2023. Consistent with replacing ordering

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Paragraph 5 with the language laid out in my memo.

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Um now I'll entertain any discussion Madam Chair or I

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have a motion for you. We're ready for a motion. Great.

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(item:7:Motion to approve proposed interim order with modifications set from memos) Uh therefore, I move to approve the proposed interim 

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order that does not address fair market value or initial

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rate approval. Consistent with the modifications set

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forth in Commission Counsel memo and my memo.

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Do I have a second? Second. All in favor, say aye. Aye. Motion passes.

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Item 8 was consented. I don't have anything on

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Item 9.

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Unless y'all do? No ma'am. Uh Items 10, 11 and 12 were consented. Next up is Item

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No. 13. Sheila, will you lay out this item? Yes.

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(item:13:Complaint of Joe Hunsinger against Highland Park Investment Partners, LLC) Item 13 is Docket No. 54370. This is the complaint

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of Joe Hunsinger against Highland Park Investment Partners, 

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LLC. A proposal for decision was filed on May 12

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and Commission Counsel memo was filed. Recommending

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changes to the order.

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Any thoughts on this one? No, I'm good. (item:13:Commissioner McAdams' thoughts on complaint) Madam Chair I, I had something

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on it. Um I, I didn't consent this one because I wanted

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to just say a few words, and frankly to Mr. Hunsinger. Just

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to demonstrate um that his uh, his petition is well

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taken. Um and I wanted to offer some comments, uh

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so that he'd know we're listening. Um, I believe dismissal

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is appropriate uh in this instance. Because the Commission

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cannot award monetary damages. Um, and on a formal

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complaint that is not the right vehicle for these issues.

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However, I believe once we act here Mr. Hunsinger's

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filings can be forwarded to the Commission's division

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of Compliance and Enforcement. I also believe that

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OPDM or Enforcement. May want to reopen the project as

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a home for the relevant files in this matter. (item:13:Motion to adopt PFD as modified per memo) Uh having

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said that, I believe and would offer a motion to adopt

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the PFD as modified by the Commission Counsel memo,

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and dismiss the case with prejudice. For failing to

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state a claim for which relief may be granted and for

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other good cause shown. And ultimately, I believe that

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by doing this uh our Staff, appropriate Staff divisions.

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Can take a look at this consistent with Commission

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Counsel memo. And uh, and potentially provide uh resolution

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to the case presented by Mr. Hunsinger. But I look forward

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to hearing updates in the future on it.

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I was just wondering who didn't consent this. I did.

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Well, I know. You know I, I just want to let people

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know we're. They, they don't understand when we dismiss

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with prejudice. You know, they think we just poured

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them out and that's not necessarily the case. And, and

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the Commission Staff can continue to try to um follow

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the trail, and see what's wrong. Well, I appreciate

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your views. And I and uh I appreciate uh, the Commission

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Counsel memo. And, and uh what you laid out and support

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that. And would move that we pass that. So you have

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a motion?

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I have a motion, would you second that? How about I second that, absolutely. Okay. We have a motion and a second. All in favor, say

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aye. Aye. Motion passes. And before we go to the next item,

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let me just clarify just for procedural purposes.

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When you mentioned reopening a project, but you mean

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open you do. Are you talking about opening a new project

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as a repository for any of these types of filings going

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forward? So that is my, yes. That is a part of that,

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uh the mechanics. Because I believe we'll see more of

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these in the future. And clearly we need some sort of

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uh repository. Where Staff can find these and start

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doing their own due diligence on the complaint.

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Got it. Items 14-25 were consented. I don't have

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anything on Item No. 26. I do not either. Next up is Item No.

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27. Uh Sheila, will you lay out this item? Certainly.

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(item:27:Application of CenterPoint Energy Houston to amend its distribution cost recovery factor) Item 27 is Docket No. 53442. This is the application

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of CenterPoint Energy Houston Electric, LLC for approval

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to amend its distribution cost recovery factor. Before

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you are two motions for rehearing that were filed on

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June 19. The first motion for rehearing was filed

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jointly by the Texas Energy Association for Marketers

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and the Alliance for Retail Markets. And the 2nd

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motion for rehearing was filed by Texas Competitive

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Power Advocates. I think we need a little more time

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to evaluate the motions for rehearing on this one.

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(item:27:Motion to extend time to act on motions for rehearing to maximum extent permitted by law) I would recommend extending time to act on the motions.

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Um, do y'all have any thoughts on that? Add to the maximum

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extent uh afforded by law? Yes. I would support that. Yes ma'am,

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I would second. Uh I would make the motion, if there's

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a second. I'll second. Great. Okay, so we have a motion to extend the time

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to act on the motions for rehearing to the maximum

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extent permitted by law. And we have a second? Yes. All in

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favor, say aye. Aye. Motion passes.

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Item No. 28 is not going to be taken up. Next up

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is Item No. 29. Sheila, will you lay out this item?

00:13:58.619 --> 00:14:03.149
(item:29:Application of SWEPCO to update its transmission cost recovery factor) Item 29 is Docket No. 54040. The application of

00:14:03.158 --> 00:14:06.408
SWEPCO to update its transmission cost recovery factor.

00:14:06.668 --> 00:14:10.428
The proposed order was filed on June 9, and on June

00:14:10.440 --> 00:14:13.090
19, Commission Staff filed proposed corrections. And

00:14:13.099 --> 00:14:15.719
on the same date, Commission counsel filed proposed

00:14:15.729 --> 00:14:16.649
changes to the order.

00:14:18.210 --> 00:14:22.500
(item:29:Commissioner Glotfelty's thoughts on application) Um y'all, I have a uh a question on this one. So

00:14:22.769 --> 00:14:26.489
uh this deals with um our favorite issue. My favorite

00:14:26.500 --> 00:14:34.308
issue of vegetation management. There is a discussion

00:14:34.320 --> 00:14:37.340
within this docket, about $8 million in vegetation

00:14:37.349 --> 00:14:42.190
management costs. That were initially included and then

00:14:42.200 --> 00:14:48.599
removed um by, uh by the applicant, um in this proceeding.

00:14:48.940 --> 00:14:52.460
Um because there was a, because vegetation management

00:14:52.469 --> 00:14:56.979
is not allowed to be a capital expense. It is primarily

00:14:56.989 --> 00:15:00.820
considered an operation and maintenance expense. However

00:15:01.259 --> 00:15:04.048
that's not always the case. And there are two discrepancies

00:15:04.058 --> 00:15:06.519
here. One of them is when you're building a new line

00:15:07.080 --> 00:15:10.798
you're riding a widening a right of way or upgrading

00:15:10.808 --> 00:15:14.609
a facility. If you need a right or right of way per

00:15:15.058 --> 00:15:18.619
a uh National Electrical Safety Code. Then that can

00:15:18.629 --> 00:15:22.489
be considered as a capital cost, as you are building

00:15:22.500 --> 00:15:28.399
a new facility. Um there is not much evidence in this

00:15:28.408 --> 00:15:33.029
uh docket. That explains the reason for that uh for

00:15:33.038 --> 00:15:38.690
those uh the $8 million. So um in addition, this docket

00:15:38.700 --> 00:15:44.450
is um, that the TCRF says that accounts, FERC accounts

00:15:44.460 --> 00:15:49.210
350 to 359 are the expenses. That are, are the capital

00:15:49.219 --> 00:15:53.019
costs that are eligible for recovery in the TCRF. These

00:15:53.029 --> 00:15:57.700
$8 million were included in account 352. Which would

00:15:57.710 --> 00:16:05.369
seem to be recoverable. So um, my concern is vegetation

00:16:05.379 --> 00:16:07.750
management is hard. Vegetation management is a real

00:16:07.759 --> 00:16:12.538
pain for uh for utilities and, you know, landowners.

00:16:12.940 --> 00:16:16.649
But utilities ought to be given the right to put vegetation

00:16:16.658 --> 00:16:18.750
management in their capital costs, if they are doing

00:16:18.759 --> 00:16:21.428
certain activities. And that is building new lines

00:16:21.440 --> 00:16:24.649
or upgrading existing lines. So what I would suggest

00:16:24.658 --> 00:16:27.469
what I would hope. Is that we could remand this order

00:16:27.759 --> 00:16:32.099
um uh, remand this docket for further processing. To

00:16:32.109 --> 00:16:34.678
confirm whether the appropriate removal of all of SWEPCO's

00:16:34.690 --> 00:16:39.000
vegetation management costs from the TCRF, TCRF

00:16:39.009 --> 00:16:43.428
uh calculation are appropriate. Or should they be 

00:16:43.440 --> 00:16:46.190
reincluded, because they were part of capital costs for

00:16:46.200 --> 00:16:49.928
new facilities? Sounds reasonable to me. So you would

00:16:49.940 --> 00:16:54.428
remand that as a uh briefing question? Yes. Uh, yeah.

00:16:58.009 --> 00:17:01.009
Okay. Perhaps our legal briefing, perhaps. To perhaps what

00:17:01.019 --> 00:17:03.979
you're describing sounds like it would remand it for additional

00:17:03.989 --> 00:17:07.358
information from the parties. Yeah, so this is pretty

00:17:07.368 --> 00:17:12.140
unique. Um vegetation management clearly is an O and

00:17:12.150 --> 00:17:15.449
M expense. It gets expensed, not capitalized. But there

00:17:15.459 --> 00:17:17.769
are just certain circumstances where it's capitalized.

00:17:17.779 --> 00:17:21.769
And if this is one of those, then the utility is afforded

00:17:21.779 --> 00:17:25.818
the right to put it in rates. If not, then. And parties

00:17:25.828 --> 00:17:29.848
can answer the precedential questions about historically

00:17:29.858 --> 00:17:35.880
and under our rule. Uh the uh allow, the allowance for

00:17:35.890 --> 00:17:38.949
recovery, um for vegetation management. Because I understand

00:17:38.959 --> 00:17:40.959
it's well established. But I won't speak to that. I

00:17:40.969 --> 00:17:43.219
think it'd be an interesting question to, to have response

00:17:43.229 --> 00:17:47.630
to. Um and do we think we could have response to that

00:17:47.640 --> 00:17:50.799
timely? To reconsider this um by the next open meeting?

00:17:50.809 --> 00:17:55.390
I worry about the lag experience or by the 20th? Thirty days maybe? 

00:17:56.269 --> 00:17:58.640
I think it's gonna depend, you know, it's possible

00:17:58.650 --> 00:18:00.239
that. I don't, I don't recall if other parties have

00:18:00.250 --> 00:18:02.029
intervened in this, that may want to weigh in on this

00:18:02.039 --> 00:18:03.759
as well. So, I think it's going to depend.

00:18:09.229 --> 00:18:09.799
Um,

00:18:11.469 --> 00:18:13.920
so what's the next open meeting after August or uh

00:18:13.930 --> 00:18:19.769
after July? That's August 4th? 3rd. Yeah. So I, I would

00:18:19.779 --> 00:18:22.559
hope by the August 4th. That's fine. Meeting we can have this back.

00:18:22.588 --> 00:18:24.229
Right. We'll certainly endeavor to try to bring it

00:18:24.239 --> 00:18:26.078
back to you on July 20th. And if not, we'll have that

00:18:26.088 --> 00:18:28.500
as a fallback option. Yeah. And then they just got

00:18:28.509 --> 00:18:30.680
hit by a storm. So we certainly wanna, don't wanna

00:18:30.689 --> 00:18:36.328
slow, not that type of capital flow through. Okay. Do

00:18:36.338 --> 00:18:38.670
you uh, do you have a motion? (item:29:Motion to remand this docket for further processing) So I move that, uh

00:18:38.680 --> 00:18:41.400
we remand this docket for further processing. To confirm

00:18:41.410 --> 00:18:43.900
whether it was appropriate to remove all SWEPCO's

00:18:43.910 --> 00:18:46.358
vegetation management costs from the TCRF calculation.

00:18:47.358 --> 00:18:50.818
Second. We have a motion and second. All in favor, say aye. Aye. Motion

00:18:50.828 --> 00:18:51.318
passes.

00:18:53.219 --> 00:18:55.939
Next up is Item No. 30. Sheila, will you lay out

00:18:55.949 --> 00:19:00.838
this item? (item:30:Application of TNMP for an extension of rate filing) Item 30 is Docket No. 54823. This is the

00:19:00.848 --> 00:19:03.949
application of TNMP for an extension of rate filing

00:19:03.959 --> 00:19:09.900
requirement under 16 TAC 25.247. A proposed order was filed

00:19:09.910 --> 00:19:13.130
on May 19, and Commission Counsel filed a memo with

00:19:13.140 --> 00:19:16.769
proposed changes to this order as well. So do we have

00:19:16.779 --> 00:19:21.000
any thoughts on this one? (item:30:Commissioner McAdams' thoughts on application) Uh Madam Chair, uh Commissioner Glotfelty.

00:19:21.009 --> 00:19:23.930
I, I would have leaned toward approving the proposed

00:19:23.939 --> 00:19:27.969
order. However before approval, um a good cause exception

00:19:27.979 --> 00:19:30.910
to the Commission's rate review schedule rule of 16 TAC

00:19:30.920 --> 00:19:36.608
uh 25.247, Subsection B4 should be addressed.

00:19:37.059 --> 00:19:40.769
Um good cause exists to grant TNMP an exception

00:19:40.779 --> 00:19:43.098
to the notice requirements. For the Commission's rate

00:19:43.108 --> 00:19:47.390
review schedule under the rule 16 TAC 25.247, B4.

00:19:47.549 --> 00:19:51.029
Because although TNMP does not satisfy the timing

00:19:51.039 --> 00:19:53.618
of the notice as stated in the rule. The rule does

00:19:53.630 --> 00:19:57.449
not address extension requests. Beyond its first extension

00:19:57.459 --> 00:20:00.818
of the 4 year deadline um for billing base rate

00:20:00.828 --> 00:20:04.699
proceedings. And uh and I just recommend that we grant

00:20:04.709 --> 00:20:09.519
TNMP a good cause exception to 16 TAC 25.247. (item:30:Motion to approve modified proposed order) And

00:20:09.529 --> 00:20:12.358
uh, and would make a motion to modify the proposed order

00:20:12.368 --> 00:20:18.309
accordingly. We have a motion? So moved. And a second? Second. All in favor,

00:20:18.318 --> 00:20:20.750
say aye. Aye. Motion passes.

00:20:23.150 --> 00:20:29.559
I don't have anything on Items 31 or 32. 

00:20:30.588 --> 00:20:36.489
(item:33:Chairwoman Jackson lays out the discussion on firm fuel supply service) Uh next up is Item No. 33, Project No. 53298.

00:20:36.809 --> 00:20:39.430
Our Wholesale Electric Market Design Implementation

00:20:39.439 --> 00:20:43.670
Project. We're going to discuss firm fuel supply service

00:20:43.680 --> 00:20:49.598
Phase 2 and PUC Staff filed a memo. We have uh

00:20:49.890 --> 00:20:52.858
Harika here. To provide an overview of Staff's memo for Phase

00:20:52.868 --> 00:20:57.009
2 program parameters to be defined. Harika, thanks for coming

00:20:57.019 --> 00:20:59.920
up and if you would please um lay out your memo.

00:21:04.459 --> 00:21:09.229
(item:33:Harika Basaran, with Commission Staff concerning their filed memo) Good morning, Harika Basaran with Commission Staff, Thank

00:21:09.239 --> 00:21:11.949
you. We don't need any action today from you. This

00:21:11.959 --> 00:21:15.279
is just to start the discussions and the memo has really

00:21:15.289 --> 00:21:18.719
two main sections. One of them is the short term decision

00:21:18.729 --> 00:21:21.650
you need to make by the next open meeting, for the next

00:21:21.660 --> 00:21:25.959
phase of this program. Because ERCOT must issue direct pay by August

00:21:25.969 --> 00:21:29.578
1. And since the parameters of this program is not

00:21:29.588 --> 00:21:32.660
codified in the rules or protocols. The budget, the offer

00:21:32.670 --> 00:21:36.969
cap, the duration has to be decided by PUC. So we gave

00:21:36.979 --> 00:21:40.729
you options, what we think on those. The second section

00:21:40.739 --> 00:21:43.269
is the more long term. Again, we don't need the decision

00:21:43.279 --> 00:21:46.880
today. But we came up with, we identified some topics

00:21:46.890 --> 00:21:51.108
we may need to discuss or give us guidance or homework.

00:21:51.118 --> 00:21:53.969
For this program to be a viable, long term, sustainable

00:21:53.979 --> 00:21:57.709
program. So in the future meetings, we also may need

00:21:57.719 --> 00:21:59.348
more direction on that.

00:22:02.509 --> 00:22:05.160
So I can go one by one the parameters, if you want

00:22:05.170 --> 00:22:06.959
me too, short or not.

00:22:08.828 --> 00:22:14.189
I, I don't need that. (item:33:Commissioner McAdams' thoughts on memo) Um first of all I,I look

00:22:14.199 --> 00:22:18.219
forward to making a final decision at the next open

00:22:18.229 --> 00:22:22.118
meeting. Um I believe the, the first part of kind of

00:22:22.130 --> 00:22:24.719
what is before us is the ERCOT recommendation, as well.

00:22:24.729 --> 00:22:27.400
Under this docket, which the Board has forwarded our

00:22:27.410 --> 00:22:32.199
way um addressing the qualifying pipeline. And uh I

00:22:32.209 --> 00:22:34.368
I've said it before, I'll say it again. I agree with

00:22:34.380 --> 00:22:39.380
that. Um so I wholeheartedly endorse um that recommendation. 

00:22:39.390 --> 00:22:43.930
But we will save my motion for uh the next open meeting.

00:22:44.180 --> 00:22:48.598
In terms of the, the parameters um that they, they

00:22:48.608 --> 00:22:53.368
make sense to me. Uh in terms of um the condition and

00:22:53.380 --> 00:22:55.920
and I guess covered at a high level, Harika the core

00:22:55.930 --> 00:23:00.078
components before. Yeah, I start with the easy ones. (item:33:Harika Basaran with Commission Staff's follow-up with core components) Uh obligation

00:23:00.088 --> 00:23:03.848
period, we still think 48 hours to keep it for the next

00:23:03.858 --> 00:23:07.489
period. However, as you may know, gas markets are closed

00:23:07.500 --> 00:23:10.838
for 4-5 days. So in the future, it may look to look

00:23:10.848 --> 00:23:14.318
into allocate between 48 hours, 72 hours based on the

00:23:14.328 --> 00:23:18.219
risk. But for this one, keep 48 hours. The second one

00:23:18.229 --> 00:23:23.779
budget, we think that keep the current $54 million. Because

00:23:23.789 --> 00:23:26.380
this is really important for the Load serving entities.

00:23:26.828 --> 00:23:29.390
How have to serve 30 day notice is how much this program will

00:23:29.400 --> 00:23:33.680
cost regardless. The 3rd one is the offer cap. The

00:23:33.689 --> 00:23:37.430
1st Phase, the Offer Cap Phase was based on the fuel

00:23:37.439 --> 00:23:41.709
oil price and 15 heat rate. However, the fuel oil prices

00:23:41.719 --> 00:23:46.598
came down dramatically from $25 MMBtu to $12. And the reason

00:23:46.608 --> 00:23:50.380
we still think a cap is necessary based on the ERCOT survey.

00:23:50.390 --> 00:23:53.920
Unfortunately even Phase 2, the extra additional

00:23:53.930 --> 00:23:58.229
new capacity with the gas pipeline is around 500 Megawatt.

00:23:58.239 --> 00:24:01.578
So we still think this is not really a liquid market

00:24:01.588 --> 00:24:05.519
So a cap. And the more difficult one is ready procurement

00:24:05.529 --> 00:24:08.318
quantity there. We may need more guidance from you.

00:24:11.098 --> 00:24:15.180
Madam Chair I, I don't wanna create any uh gray

00:24:15.189 --> 00:24:19.549
area for a lot of debate and argument. But I would

00:24:19.559 --> 00:24:23.229
be curious um would Carrie Bivens, the Independent Market Monitor.

00:24:23.239 --> 00:24:25.789
Have any thoughts on the parameters proposed by Staff?

00:24:25.799 --> 00:24:28.029
So we could consider that over the next 3 weeks

00:24:28.039 --> 00:24:31.239
before the next open meeting? May we invite her up?

00:24:31.348 --> 00:24:33.479
Yes, because I believe she has been working on this

00:24:33.489 --> 00:24:36.318
as well. Definitely we consulted with her, but she's here.

00:24:43.279 --> 00:24:46.930
(item:33:Carrie Bivens with Potomac Economics, confirming parameters) Good morning. Uh Carrie Bivens with Potomac Economics.

00:24:46.939 --> 00:24:50.318
Uh we have been working with Commission Staff and have

00:24:50.328 --> 00:24:53.088
seen uh the memo book prior to being filed. And

00:24:53.098 --> 00:24:57.650
agree with the the parameters that Harika laid out. (item:33:Commissioner McAdams question for Carrie Bivens) Carrie

00:24:57.660 --> 00:25:00.939
in, in terms of the parameters. Is there any one component

00:25:00.949 --> 00:25:03.400
that's more important to you than the others? Uh look

00:25:03.410 --> 00:25:06.130
my first blush is kind of the cost gap. It appears

00:25:06.140 --> 00:25:10.209
to be that that ultimate uh constraint. In terms of

00:25:10.219 --> 00:25:14.189
containing mission creep or an undue expansion of the

00:25:14.199 --> 00:25:16.449
program. To where we're basically I mean, it basically

00:25:16.459 --> 00:25:18.529
just becomes a capacity payment because that's not

00:25:18.539 --> 00:25:21.068
what we're doing here. We're gonna get what we pay

00:25:21.078 --> 00:25:25.118
for um and the market bids into that. And then ultimately

00:25:25.500 --> 00:25:28.818
that price will either be very lucrative for a very

00:25:28.828 --> 00:25:31.949
few resources that can qualify or not as lucrative

00:25:31.959 --> 00:25:34.939
if the majority of the market can bid in and qualify

00:25:34.949 --> 00:25:37.549
for it. Is that your view or? (item:33:Carrie Bivens response to Commissioner McAdams) Yeah, I think it's helpful

00:25:37.559 --> 00:25:40.699
to have both the offer cap and the budget cap. Um I

00:25:40.709 --> 00:25:42.049
think that

00:25:43.618 --> 00:25:46.789
it, there's probably that will need to continue to

00:25:46.799 --> 00:25:49.199
be evaluated. Just because if we're basing it based

00:25:49.209 --> 00:25:52.049
on the fuel oil prices, those are gonna fluctuate.

00:25:52.430 --> 00:25:56.930
Um the 15 heat rate is um on the generous side. But

00:25:57.160 --> 00:26:00.910
there is risk of providing the service with compliance

00:26:00.920 --> 00:26:03.949
uh requirements and also with the risk of getting claw

00:26:03.959 --> 00:26:08.289
back. If you um, aren't available during the, the times

00:26:08.299 --> 00:26:11.618
in which they call for the service or the, they possibly

00:26:11.630 --> 00:26:15.019
might call for the service. And so, um we need to have

00:26:15.029 --> 00:26:18.108
a little bit of, of wiggle room in there for that

00:26:18.118 --> 00:26:22.150
for that risk to be priced in. And does Staff have a

00:26:22.160 --> 00:26:24.618
view on kind of that clawback provision? Because I know

00:26:24.630 --> 00:26:29.459
that that's become somewhat of an observable, observable

00:26:30.309 --> 00:26:35.009
issue in Phase 1 of the service. (item:33:Harika Basaran with Commission Staff's response to Commissioner McAdams question) Yeah, I think it's good

00:26:35.019 --> 00:26:37.729
to have performance criteria. And if you don't, if

00:26:37.739 --> 00:26:40.279
you're not available during the watch period, you will

00:26:40.289 --> 00:26:42.670
get claw back. That's why I think it makes sense like

00:26:42.680 --> 00:26:45.858
Carrie said to have a little bit higher over cap. It's a big

00:26:45.868 --> 00:26:48.729
compliance risk as we seen in the first deployments.

00:26:49.239 --> 00:26:53.500
Okay. Like $52 million, $26 million was clawbacked. Right. Almost half of it, so.

00:26:54.269 --> 00:26:54.598
Okay.

00:26:56.699 --> 00:26:57.568
Any other thoughts?

00:26:59.989 --> 00:27:00.578
Um.

00:27:03.809 --> 00:27:06.949
(item:33:Carrie Bivens follow-up to Commissioner McAdams question) No, I think I just would echo what Harika said about the procurement

00:27:06.959 --> 00:27:09.150
quantity. I think that's still a big open question.

00:27:09.459 --> 00:27:13.459
Um with the lower offer cap and keeping the budget

00:27:13.469 --> 00:27:15.750
the same. You have the opportunity to get many more

00:27:15.759 --> 00:27:20.838
megawatts if they are offered in. Um, and, you know

00:27:20.848 --> 00:27:23.180
I think that's a, a policy call for the Commission

00:27:23.189 --> 00:27:24.410
to make. Okay.

00:27:26.250 --> 00:27:28.670
(item:33:Commissioner McAdams additional thoughts on the policy) I'm good for right now. I look forward to discussing

00:27:28.680 --> 00:27:31.699
this offline uh, with you over the next 3 weeks.

00:27:31.709 --> 00:27:34.160
And then uh getting hopefully uh, Commissioner Cobos

00:27:34.170 --> 00:27:36.858
back. Because I know she's got great thoughts on the

00:27:36.868 --> 00:27:41.209
on the policy uh, before the 20th. (item:33:Commissioner Glotfelty's thoughts on the memo) Yeah I, I mean.

00:27:41.219 --> 00:27:44.098
I, I think the memo does a good job of, of laying

00:27:44.108 --> 00:27:48.328
out the issues the uh proposed positions. Uh which

00:27:48.338 --> 00:27:51.250
I think are extremely reasonable. I think from the

00:27:51.259 --> 00:27:54.318
very beginning, we said this uh firm fuel was gonna

00:27:54.328 --> 00:27:57.539
be a work in progress. Uh you know, we've gone through

00:27:57.549 --> 00:27:59.880
Phase 1, we're going through Phase 2. And we're

00:27:59.890 --> 00:28:02.390
gonna have uh a few more phases where we get to tweak

00:28:02.400 --> 00:28:05.828
this. To ensure that uh Texas consumers get what they,

00:28:05.838 --> 00:28:10.029
what they are expecting. So I'm for it. Great, so. Very good.

00:28:10.059 --> 00:28:13.068
Well Harika, thank you uh for working uh with the IMM

00:28:13.078 --> 00:28:15.910
on this. And uh so let's plan on bringing this back

00:28:15.920 --> 00:28:19.265
up finalizing at the next open meeting on July 20.

00:28:19.275 --> 00:28:22.614
(item:33:Commissioner McAdams encourages stakeholder community) May I add one thing, Madam Chairman? I encourage the

00:28:22.625 --> 00:28:25.664
stakeholder community to make filings in response to

00:28:25.674 --> 00:28:29.983
Staff's proposal. Preferably well before the next open

00:28:29.993 --> 00:28:32.555
meeting and not 12 hours prior.

00:28:35.170 --> 00:28:38.420
Yeah, I appreciate that. Thank you. Thank you. Thank

00:28:38.430 --> 00:28:39.219
you. 

00:28:42.598 --> 00:28:48.828
(item:34:Chairwoman Jackson lays out for discussion temperature standard preparing for Winter weather wind chill) Next up is Item No. 34, Project No. 54444. And

00:28:48.838 --> 00:28:51.449
we're going to discuss the temperature standard preparing

00:28:51.459 --> 00:28:55.598
for Winter weather wind chill. ERCOT submitted a filing

00:28:55.890 --> 00:28:59.519
and Commissioner McAdams has filed a memo. Will you please

00:29:00.219 --> 00:29:04.068
lay out your memo? (item:34:Commissioner McAdams lays out his memo) Thank you, Madam Chairman. Uh my memo was perhaps too

00:29:04.078 --> 00:29:11.140
simple um on a policy that is not simple. Um I filed the

00:29:11.150 --> 00:29:14.818
a memo basically that said uh, that I believe. We should

00:29:14.828 --> 00:29:19.650
affirm um that ERCOT is on the right path on weatherization.

00:29:20.239 --> 00:29:24.348
But uh it is a complex topic. One, it is technical

00:29:24.358 --> 00:29:29.969
in nature and two words carry great weight. Uh when

00:29:29.979 --> 00:29:33.328
you're dealing with the the technicality of uh attributed

00:29:33.338 --> 00:29:38.650
to the policy. Um issues surrounding dry bold and ambient

00:29:38.660 --> 00:29:44.699
temperature uh have certainly arisen. Um and concerns

00:29:44.709 --> 00:29:47.890
over the last 12 hours have arisen. Not necessarily

00:29:47.900 --> 00:29:51.279
through filings but certainly discussions that have

00:29:51.289 --> 00:29:55.078
made their way to our office and I believe other offices,

00:29:55.088 --> 00:30:01.118
as well. And those concerns are well taken. It I, I

00:30:01.130 --> 00:30:05.368
believe there's a certain amount of fear that is um

00:30:07.189 --> 00:30:11.660
not appropriately justified. Um that can be worked

00:30:11.670 --> 00:30:16.979
through as we look at the language of the filing. And

00:30:16.989 --> 00:30:22.949
um Madam Chair, just for so we can have some substantive

00:30:22.959 --> 00:30:26.250
discussion. I, I believe we should not act on this

00:30:26.259 --> 00:30:31.489
today um because of the concerns raised. I believe

00:30:31.500 --> 00:30:35.588
there's still work to be done on clarifying language

00:30:35.598 --> 00:30:41.170
that we could achieve in ERCOT's filed framework. And

00:30:41.180 --> 00:30:45.118
um especially as it relates to the table and what is

00:30:45.130 --> 00:30:49.699
uh involved in the table of, of the filing. At a high

00:30:49.709 --> 00:30:53.719
level as my last year's memo indicated. I believe we

00:30:53.729 --> 00:30:58.799
need a clear standard that it, that does um account

00:30:58.809 --> 00:31:02.430
for wind chill and the effect of wind chill in the

00:31:02.439 --> 00:31:05.750
standard. But it needs to be uh a number

00:31:07.299 --> 00:31:12.029
that uh on a zonal basis. That facilities can look to

00:31:12.239 --> 00:31:15.209
and thus begin planning their mitigation strategies

00:31:15.219 --> 00:31:19.529
around and it needs to be unambiguous. And um

00:31:21.390 --> 00:31:25.328
just like everyone you can read a three page document,

00:31:25.338 --> 00:31:28.180
and everybody may have a different take. And so when

00:31:28.189 --> 00:31:31.328
I crafted my memo, I looked at certain sections and

00:31:31.338 --> 00:31:34.759
sentences and I'm like eureka, they captured me. Um

00:31:35.199 --> 00:31:39.039
and, and this is what we need. Uh and then the generator

00:31:39.049 --> 00:31:43.848
community has read it and they see significant problems.

00:31:44.098 --> 00:31:46.930
And there is something to be said about the enforceability

00:31:47.598 --> 00:31:51.750
of the policy that that is uh envisioned in the document.

00:31:52.539 --> 00:31:55.809
And so with that Madam Chair, if you'll entertain it

00:31:55.818 --> 00:31:59.019
just for a couple of minutes. May I uh invite Woody

00:31:59.029 --> 00:32:03.098
Rickerson from ERCOT and possibly Barksdale English.

00:32:03.180 --> 00:32:06.509
Just to talk through the themes in the filed version.

00:32:06.519 --> 00:32:10.049
That may be uh better clarified uh over the coming

00:32:10.059 --> 00:32:10.549
weeks.

00:32:15.199 --> 00:32:17.890
Good morning, Woody. Good morning Barksdale. Um and

00:32:17.900 --> 00:32:20.049
as I ask questions, please identify yourself for

00:32:20.059 --> 00:32:21.660
the record. Um

00:32:23.390 --> 00:32:26.029
all right, Woody. I'm gonna ask you a broad question.

00:32:26.170 --> 00:32:26.719
Um

00:32:29.420 --> 00:32:34.449
what's in that table in this filing? Okay. (item:34:Woody Rickerson with ERCOT, responds to Commissioner McAdams question) Uh Woody Rickerson

00:32:34.769 --> 00:32:37.848
with ERCOT. And pull that mic close so everybody can

00:32:37.858 --> 00:32:41.279
hear you, please. So what's in that table?

00:32:44.640 --> 00:32:49.059
So the table is calculated based on um.

00:32:51.358 --> 00:32:56.539
If you look at all the weather data we have available

00:32:56.549 --> 00:33:01.318
for a particular area, particular weather zones, that

00:33:01.328 --> 00:33:07.578
hourly data. And you look at what the temperature and

00:33:07.588 --> 00:33:12.630
the wind chill is on an hourly basis. And you string

00:33:12.640 --> 00:33:15.449
all that data out from the very first one, hourly all

00:33:15.459 --> 00:33:18.439
the way to the most recent one. And you have this long

00:33:18.449 --> 00:33:24.328
string of data. Now, imagine a 72 hour window that

00:33:24.338 --> 00:33:28.630
slides up and down that data. And it looks for the

00:33:28.640 --> 00:33:34.259
minimum average temperature, which would include wind chill.

00:33:34.269 --> 00:33:36.459
Because we're looking at wind chill data here. (item:34:Commissoner McAdams question for Woody Rickerson) And so

00:33:36.469 --> 00:33:38.279
when you say the minimum average temperature. And I'm

00:33:38.289 --> 00:33:41.489
gonna engage with you, just to try and pull facts forward. Sure. Is that

00:33:41.500 --> 00:33:44.219
an ambient temperature? No. What are we calling that? Okay.

00:33:44.229 --> 00:33:49.390
(item:34:Woody Rickerson's response to question) So this, this string of, of temperatures has wind

00:33:49.400 --> 00:33:52.500
chill associated with it. So we're looking at a string

00:33:52.509 --> 00:33:56.219
of hourly wind chill temperatures for a weather zone.

00:33:57.209 --> 00:34:00.848
And now we're gonna take a 72 hour window and we're

00:34:00.858 --> 00:34:04.420
gonna slide it up and down and try to find the minimum

00:34:05.209 --> 00:34:09.108
in that. And when we find that minimum, we're gonna

00:34:09.117 --> 00:34:11.579
throw that one out because that would be like the 99th

00:34:11.588 --> 00:34:14.489
percentile. And then we're gonna slide it again and

00:34:14.498 --> 00:34:18.588
try to find the next coldest 72 hour average. And we'll

00:34:18.599 --> 00:34:21.387
keep throwing those out till we get down to the 95th

00:34:21.398 --> 00:34:28.099
percentile. The 95th percentile average wind chill

00:34:28.108 --> 00:34:32.728
temperature for that weather zone. And that's what's

00:34:32.739 --> 00:34:33.228
in

00:34:35.617 --> 00:34:39.608
the table. (item:34:Commissioner McAdams question on ambient temperature and dry bulb) So, explain the distinction between ambient

00:34:39.617 --> 00:34:43.039
temperature and dry bulb and the interplay that's in

00:34:43.048 --> 00:34:48.070
that table? Well, the dry bulb temperature would be

00:34:48.079 --> 00:34:51.398
without any wind and it would be a higher temperature

00:34:51.409 --> 00:34:55.469
if there's wind. And so wind speed will decrease that

00:34:55.478 --> 00:34:58.599
temperature. And so this string of numbers we're looking

00:34:58.610 --> 00:35:01.449
at already encompasses a

00:35:03.110 --> 00:35:07.349
ambient or dry bulb temperature and a wind speed at

00:35:07.360 --> 00:35:11.570
that time, that occurred at that time. So maybe the

00:35:11.579 --> 00:35:17.320
the minimum 72 hour average was in 1960. And so that

00:35:17.329 --> 00:35:21.820
would be the wind that occurred on that date in,

00:35:21.829 --> 00:35:24.438
on during those hours in 1960, plus the temperature.

00:35:24.449 --> 00:35:29.099
So that the wind speed is incorporated already in that

00:35:29.469 --> 00:35:31.329
number that appears in the table.

00:35:32.949 --> 00:35:36.099
Um so do, do you have the, the filing in front of

00:35:36.110 --> 00:35:38.550
you? Do you have that? I have our filing. Great. That's

00:35:38.559 --> 00:35:42.750
what I'm talking about. Okay. Page 2 below the table,

00:35:42.760 --> 00:35:43.489
first sentence.

00:35:45.139 --> 00:35:47.110
Sorry, I don't have that one. I have the other one in front of

00:35:47.119 --> 00:35:51.519
me here. Barksdale slide it over to him. Appreciate it. Page

00:35:51.530 --> 00:35:56.708
2. Okay. First sentence after the table. ERCOT interprets

00:35:56.719 --> 00:35:59.449
the rule to refer to the temperatures in the table

00:35:59.458 --> 00:36:05.228
as ambient, dry bulb temperatures, not as wind

00:36:05.289 --> 00:36:08.628
chill values. That could be calculated through myriad

00:36:08.639 --> 00:36:11.860
combinations of wind speed and ambient temperature

00:36:11.869 --> 00:36:13.969
values. Right. Okay.

00:36:15.769 --> 00:36:22.909
I am trying to um square a circle with that sentence

00:36:23.000 --> 00:36:26.829
and then down to the last sentence of the paragraph.

00:36:27.179 --> 00:36:30.918
Where it says that is by incorporating some of the

00:36:30.929 --> 00:36:35.559
effects of wind into a temperature standard. The adopted

00:36:35.570 --> 00:36:38.668
standard provides a single temperature serving as a

00:36:38.679 --> 00:36:43.510
reasonable proxy. For a combination of low temperatures

00:36:43.519 --> 00:36:46.239
and associated wind speeds observed in each weather

00:36:46.250 --> 00:36:50.010
zone. Over a 72 hour period without incorporating all

00:36:50.019 --> 00:36:53.628
of the combinations of temperature and wind speed as

00:36:53.639 --> 00:36:59.829
the actual standard. Right. So help me tie that first sentence

00:36:59.840 --> 00:37:02.800
and that last sentence together. Okay. (item:34:Woody Rickerson responds to question on table) So the, the table

00:37:02.809 --> 00:37:07.478
has two purposes. The table, the first purpose is for

00:37:07.489 --> 00:37:11.869
the weatherization declarations. So the preparation,

00:37:12.360 --> 00:37:17.139
the preparation. The second purpose of the table

00:37:17.188 --> 00:37:22.090
is when enforcement actions would occur. During first

00:37:22.099 --> 00:37:24.148
of all, it would have to be an EEA and you

00:37:24.159 --> 00:37:27.050
and the unit in question would have to have a forced

00:37:27.059 --> 00:37:30.599
outage that's weather related. So you've got those

00:37:30.610 --> 00:37:33.648
two sides that the table is used in. So let's talk

00:37:33.659 --> 00:37:37.449
about the first one. The first one is for the weatherization

00:37:37.458 --> 00:37:43.250
declaration. So how should a resource apply this number

00:37:43.750 --> 00:37:46.510
when they get ready to do their weatherization declaration?

00:37:47.280 --> 00:37:50.889
And so what we've expected resources to do and it wasn't

00:37:50.898 --> 00:37:54.139
spelled out very well. But what we would expect a resource

00:37:54.148 --> 00:37:58.119
to do is to tell us that. Let's say that they're in

00:37:58.128 --> 00:38:02.820
the they're in the uh the, the east zone and the number

00:38:02.829 --> 00:38:03.958
says 4.4.

00:38:05.570 --> 00:38:09.378
So we would expect a resource to tell us that we weatherize.

00:38:09.389 --> 00:38:13.938
Our weatherization program looks at 10 degrees and

00:38:13.949 --> 00:38:15.159
20 miles an hour.

00:38:16.708 --> 00:38:20.280
And if you plug those two numbers into the NOAA equation

00:38:21.148 --> 00:38:24.070
it will give you a single number. And if that single

00:38:24.079 --> 00:38:27.789
number is equal to or less than the number in the table

00:38:27.949 --> 00:38:31.128
then we expect that that weatherization declaration,

00:38:31.360 --> 00:38:36.360
adequately predict the reliability. And that's a reasonable

00:38:36.369 --> 00:38:39.628
expectation for reliability. So that's the, that's

00:38:39.639 --> 00:38:40.949
on the preparation side.

00:38:42.519 --> 00:38:45.030
And that part maybe wasn't very clear. Because I think

00:38:45.039 --> 00:38:47.989
resources were thinking they have to take this number

00:38:48.000 --> 00:38:50.139
and then apply their own wind speed. Which is going

00:38:50.148 --> 00:38:52.179
to take it even further down. That is correct. They

00:38:52.188 --> 00:38:55.289
have asserted that. So our expectation was not that.

00:38:56.250 --> 00:38:59.418
Our expectation was that the resources would take the

00:38:59.429 --> 00:39:03.360
combination of a temperature and a wind speed. The

00:39:03.369 --> 00:39:06.260
two of those together would be equal to or less than

00:39:07.188 --> 00:39:10.719
what we put in the table for the 72 hour, 95th percentile

00:39:10.969 --> 00:39:14.429
windshield average. But the table is the controlling policy

00:39:14.438 --> 00:39:16.719
driver. That's right. The table gives the resources

00:39:16.728 --> 00:39:21.599
a single point to tune their weatherization declarations

00:39:21.610 --> 00:39:25.679
too. And that's on the preparation side. Now during.

00:39:26.070 --> 00:39:29.000
(item:34:Chairwoman Jackson's question for Woody Rickerson) So further to the preparation side. Okay. So the work

00:39:29.010 --> 00:39:32.099
effort here is to make sure that they have the information

00:39:32.110 --> 00:39:36.340
they need to go out and do the design work. So that

00:39:36.349 --> 00:39:40.860
it matches with the level of protection that we feel

00:39:40.869 --> 00:39:45.599
like is appropriate. That's right. And so is does this protocol this

00:39:45.610 --> 00:39:50.489
method do that? Yes, ma'am, I think it will. Um I think

00:39:50.500 --> 00:39:54.800
there was some confusion though because resources and

00:39:54.809 --> 00:39:57.909
rightly so. Look at that number and said well, what's

00:39:57.918 --> 00:39:59.719
the wind speed that we're supposed to put with that.

00:39:59.728 --> 00:40:03.550
Because of the way this is written, it's hard to tell.

00:40:03.559 --> 00:40:05.429
And I admit that it is hard to tell, I've had some

00:40:05.438 --> 00:40:08.878
conversations with them. And so that is how we would

00:40:08.889 --> 00:40:11.539
interpret their weatherization declaration when they

00:40:11.550 --> 00:40:13.929
give it to us. If those two numbers, they give us.

00:40:13.938 --> 00:40:18.139
Give us a number at or below the standard, then we

00:40:18.148 --> 00:40:23.489
will assume that, that declaration is a reasonable uh

00:40:24.300 --> 00:40:27.369
standard for, for reliability. And that gets to the

00:40:27.378 --> 00:40:32.110
the core principle uh, uh of the assumption of risk,

00:40:32.389 --> 00:40:37.360
uh correct? (item:34:Commissioner McAdams question on generator failure responsibility) And let me clarify that question. Who is

00:40:37.369 --> 00:40:41.199
the risk of failure on? Is it on the generator or ERCOT

00:40:41.289 --> 00:40:44.010
to have accounted for the potential, for the failure

00:40:44.019 --> 00:40:47.769
of that generator? Because again, they know what the

00:40:47.780 --> 00:40:51.110
likelihood of wind speeds are for that particular facility.

00:40:51.119 --> 00:40:53.929
Because there's too many permutations of possibilities

00:40:53.938 --> 00:40:57.409
on an individual basis on a facility by facility basis.

00:40:57.688 --> 00:41:01.958
And so therefore, that's on them. The risk is on them

00:41:01.969 --> 00:41:05.369
to have that accounted for and then to not fail uh

00:41:05.378 --> 00:41:08.958
at that temperature. And thus you will not be subject

00:41:08.969 --> 00:41:11.369
to any type of enforcement or even a remediation uh

00:41:11.378 --> 00:41:16.820
strategy at this point. Um unless you fail under those

00:41:16.829 --> 00:41:20.010
conditions. Right. (item:34:Chairwoman Jackson's comments on generator weatherization) As importantly, I mean. It gives us, it

00:41:20.019 --> 00:41:24.429
gives the generators the guidance that they need to

00:41:24.648 --> 00:41:28.938
implement the weatherization. To make sure that they

00:41:28.949 --> 00:41:31.820
don't fail, right? It, it's giving them the guidance

00:41:31.829 --> 00:41:33.579
they need. Because that's the whole point here is that

00:41:33.590 --> 00:41:38.329
we want to, we want to go in and weatherize to avoid

00:41:38.340 --> 00:41:41.889
a failure. And so we're, we're setting a standard that

00:41:41.898 --> 00:41:44.878
we want the weatherization to occur to from a technical

00:41:44.889 --> 00:41:49.898
engineering standpoint. That is adequate to meet our

00:41:49.909 --> 00:41:52.878
expectation. That's right. And I think it's important

00:41:52.889 --> 00:41:55.750
for, for resources to realize in the application of

00:41:55.760 --> 00:41:58.958
this. That we're not expecting them to double count

00:41:58.969 --> 00:42:02.228
wind speed. We don't expect them to count it in the

00:42:02.239 --> 00:42:05.590
stand in the, in the table and then add another

00:42:05.599 --> 00:42:08.739
wind chill factor on top of that. That wasn't our expectation.

00:42:08.750 --> 00:42:11.530
Our expectation was if we refile this, could we specify

00:42:11.539 --> 00:42:14.050
that? We certainly can. We'll, we'll make that very

00:42:14.059 --> 00:42:18.878
clear. Now, I think the other half of the use of the

00:42:18.889 --> 00:42:24.239
table is on the performance side. So let's use that

00:42:24.250 --> 00:42:28.628
same example for a uh someone in the east, in the east

00:42:28.639 --> 00:42:35.789
weather zone, where their number is 4.4. So if ERCOT

00:42:35.800 --> 00:42:43.360
declares an EEA then that's by rule. And if that resource

00:42:43.369 --> 00:42:47.340
in the east weather zone has a forced outage that is

00:42:47.349 --> 00:42:52.469
weather related. They have a frozen instrumentation

00:42:52.478 --> 00:42:54.978
have shut the plant down. Obviously, weather related

00:42:55.648 --> 00:43:01.119
okay. If those two things happen and if the temperature

00:43:01.128 --> 00:43:05.849
is above 4.4 degrees, then they're subject to ERCOT

00:43:05.860 --> 00:43:10.168
coming in and asking more questions and evaluating

00:43:10.179 --> 00:43:14.228
that outage. Now in that investigation,

00:43:16.019 --> 00:43:21.510
if the wind is blowing 50mph. And obviously the combined

00:43:21.519 --> 00:43:24.418
wind chill temperature would be far below 4.4. Then we'd

00:43:24.429 --> 00:43:26.719
have to take that into consideration as well. Under

00:43:26.728 --> 00:43:28.929
a reasonable standard. Under a reasonable standard.

00:43:28.938 --> 00:43:35.050
But the 4.4 serves as the dry bulb, non-wind chill

00:43:35.059 --> 00:43:38.869
temperature that a plant operator could look at. He

00:43:38.878 --> 00:43:42.949
could see okay it's, it's 6 degrees. We still have

00:43:43.208 --> 00:43:45.628
we're not we're, we're above the performance standard.

00:43:45.639 --> 00:43:48.719
Or he could look at it and say it's 0 degrees. We're

00:43:48.728 --> 00:43:52.019
now below that weather standard without worrying about

00:43:52.030 --> 00:43:54.949
what the wind is at the moment the force outage occurs.

00:43:54.958 --> 00:44:01.250
And that gives a very clear uh, a clear number for

00:44:01.260 --> 00:44:03.369
plant operators to look at. And a very clear number

00:44:03.378 --> 00:44:05.800
for ERCOT to look at on what we need to follow up

00:44:05.809 --> 00:44:08.250
with. And which, which force outages we need to follow

00:44:08.260 --> 00:44:10.360
up with and which ones we don't need to.

00:44:12.869 --> 00:44:16.309
Any questions on that? Uh well, I just. Uh I, I think this needs

00:44:16.320 --> 00:44:20.590
to be written better, quite frankly. Granted. But any

00:44:22.878 --> 00:44:24.949
any kind of so. (item:34:Commissioner McAdams' concerns on the Winter of 2024) Let me ask you this.

00:44:27.409 --> 00:44:30.719
In terms of uh timely implementation for the Winter

00:44:30.728 --> 00:44:37.119
of 2024. By taking another 3 weeks to work on this

00:44:37.128 --> 00:44:40.510
in terms of the language of the filing. Which will

00:44:40.519 --> 00:44:43.628
be the guiding star for the industry, I believe. They

00:44:43.639 --> 00:44:48.289
certainly indicate it will. Um, what does that do to

00:44:48.300 --> 00:44:51.610
us for the Winter of '24? So from an ERCOT perspective, it's

00:44:51.619 --> 00:44:55.519
not gonna be a problem. I would think you resources

00:44:55.530 --> 00:44:58.418
would really need to tell us if that's gonna put them

00:44:58.429 --> 00:45:01.418
at a point. Where they can't get the engineering assessments

00:45:01.429 --> 00:45:04.668
and the materials ordered and things like that in time

00:45:04.969 --> 00:45:08.679
for a December 1st implementation. I mean that's,

00:45:08.688 --> 00:45:15.179
I can't answer that. But they've already been uh remediating

00:45:15.188 --> 00:45:18.719
their facilities to the Phase 1 standards. So it'd

00:45:18.728 --> 00:45:21.208
be a compounding effort. It would just be building

00:45:21.219 --> 00:45:24.489
upon what they've already set up. (item:34:Woody Rickerson on rewriting file) As far as writing

00:45:24.500 --> 00:45:28.019
clarification, I've got that on my phone right now.

00:45:28.030 --> 00:45:33.228
I could. Don't do it right now. I mean it is, it's

00:45:33.239 --> 00:45:36.789
easy to clarify. I think uh what I just said, we can

00:45:36.800 --> 00:45:40.128
put in words and can easily clarify this and refile

00:45:40.139 --> 00:45:44.648
it. So that's not gonna be an issue. Um as soon as

00:45:44.849 --> 00:45:45.878
you guys

00:45:47.619 --> 00:45:51.418
put a check mark on that. We'll hold workshops to make

00:45:51.429 --> 00:45:54.000
sure we go through the formulas and everyone understands

00:45:54.010 --> 00:45:56.860
the application. We'll talk through any of the outlying

00:45:56.869 --> 00:46:00.739
issues and so we can schedule a workshop early or,

00:46:00.750 --> 00:46:04.648
or late in July. And we can make sure we go through

00:46:04.659 --> 00:46:06.800
all that kind of stuff. So we could conceivably have

00:46:06.809 --> 00:46:07.918
all this wrapped up by

00:46:09.559 --> 00:46:12.750
into July and have a workshop already completed. Okay.

00:46:13.628 --> 00:46:14.119
Um.

00:46:18.079 --> 00:46:20.619
(item:34:Commissioner Glotfelty's thoughts on clarification) Well, the one thing that I would just say is. You know

00:46:20.628 --> 00:46:25.369
as we uh. Many years ago uh, when no compliance rules

00:46:25.378 --> 00:46:29.148
became mandatory uh, at the very beginning. It was

00:46:29.159 --> 00:46:32.449
uh as some would say, clear as mud on how to comply.

00:46:32.458 --> 00:46:37.789
And over time, we have uh um made that very specific

00:46:37.800 --> 00:46:40.409
and I think the goodwill of the companies to comply

00:46:40.418 --> 00:46:44.639
is, is what makes that happen. Um uh you know, in this

00:46:44.648 --> 00:46:48.510
space. A clarification is appropriate because we, we

00:46:48.519 --> 00:46:52.010
need to ensure that we understand what they're complying

00:46:52.019 --> 00:46:54.869
with. And the workshops are critical so they understand

00:46:54.878 --> 00:46:57.918
what they have to comply with. But if that clears it

00:46:57.929 --> 00:47:01.398
up I, I'm ready to, to support it. And, and get down

00:47:01.409 --> 00:47:04.050
the road and you know, modify next year if we need

00:47:04.059 --> 00:47:07.239
to. But um get this uh in the books and, and be

00:47:07.250 --> 00:47:10.708
ready for this Winter. (item:34:Commissioner McAdams comments on expectation of clear definitions) So as an expectation, I believe

00:47:10.719 --> 00:47:14.829
what should we, we should be able to have in July, for

00:47:14.840 --> 00:47:20.219
us to deliberate upon. Is a clear definition, a more

00:47:20.228 --> 00:47:24.469
clear um and artfully worded definition. Of what is

00:47:24.478 --> 00:47:27.599
in that box, what is in that table? Because I believe

00:47:27.610 --> 00:47:30.260
that table, as from an engineering perspective. Is the

00:47:30.269 --> 00:47:35.469
driving force behind the industry wide efforts to weatherize.

00:47:35.728 --> 00:47:38.909
And, and I would point out that this is, this has been

00:47:38.918 --> 00:47:42.780
a highly successful policy for the ERCOT system. Um and

00:47:42.789 --> 00:47:47.878
frankly for, for uh uh others to follow and, and use

00:47:47.889 --> 00:47:55.929
as a model. And uh I believe we have in this policy

00:47:56.148 --> 00:48:01.599
a more stringent level of uh weatherization security

00:48:01.628 --> 00:48:04.878
than even ERCOT contemplates. And that's a victory for

00:48:04.929 --> 00:48:08.289
ERCOT. And we are an example. And so I believe what

00:48:08.300 --> 00:48:11.659
needs to come back to us is just a more refined definition

00:48:11.840 --> 00:48:15.340
of the numbers that are on the table. Which will be

00:48:15.349 --> 00:48:19.128
the guiding force for weather, weatherization efforts

00:48:19.139 --> 00:48:22.300
and enforcement. Something that we can enforce to.

00:48:22.949 --> 00:48:26.438
Uh and, and, and I believe our Staff and our Staff,

00:48:26.449 --> 00:48:29.119
Commission Staff and ERCOT Staff. Can work together

00:48:29.128 --> 00:48:31.668
to make sure as that definition comes forward. That

00:48:31.679 --> 00:48:35.059
we do contemplate the enforceability of the definition

00:48:35.070 --> 00:48:39.409
of those numbers and how we account for them. Um but

00:48:39.418 --> 00:48:43.969
I, I too believe more time is, is needed. And, and

00:48:43.978 --> 00:48:46.019
if I may Madam Chair, I'm sure I would say uh.

00:48:47.579 --> 00:48:50.250
The two, the last two years have been great for me.

00:48:50.260 --> 00:48:54.628
Um but this was the equivalent of being mugged as a

00:48:54.639 --> 00:48:59.369
regulator. Um last night after my memo dropped, it

00:48:59.378 --> 00:49:04.030
was astounding um the level of engagement, not necessarily

00:49:04.039 --> 00:49:09.739
through filings all back channel um concerns raised.

00:49:09.750 --> 00:49:13.398
Even though ERCOT had filed this document on Friday

00:49:13.409 --> 00:49:17.789
of last week it had been out there. Um we've been working

00:49:17.800 --> 00:49:24.369
on this for how long Woody? Long time. Nine

00:49:24.378 --> 00:49:27.849
months. Oh, that's, that's a great number. Um and,

00:49:27.860 --> 00:49:32.228
and so we do need the uh stakeholder segments to engage

00:49:32.239 --> 00:49:35.070
on this. And to provide that, that technical feedback

00:49:35.079 --> 00:49:37.329
that gives them comfort. That they know what the rules

00:49:37.340 --> 00:49:41.889
of the road are. Um so I would urge them to do

00:49:41.898 --> 00:49:46.059
so and that we need to try to head uh something like

00:49:46.070 --> 00:49:48.449
this off in the future. We need to try to prevent that

00:49:48.458 --> 00:49:51.550
so that we can collaborate more fully uh on the front

00:49:51.559 --> 00:49:54.820
end rather than the back end. Um but I appreciate the

00:49:54.829 --> 00:49:57.938
work you put into this. I think I understand it. Uh

00:49:57.949 --> 00:50:01.110
and I think it's good policy. It's just a matter of

00:50:01.119 --> 00:50:04.059
words and they give uh they give market participants

00:50:04.070 --> 00:50:06.050
comfort as well as regulators.

00:50:07.579 --> 00:50:10.179
(item:34:Chairwoman Jackson's comments on engagement with generator community & project return timeline) So very much a need for alignment, very much a need 

00:50:10.188 --> 00:50:14.898
to go back and clarify the memo um as you mentioned.

00:50:15.139 --> 00:50:18.929
Uh we did hear from the um generator community kind

00:50:18.938 --> 00:50:22.699
of at the last, the last hour. And I very much want

00:50:22.708 --> 00:50:25.739
their engagement, but um would encourage them going

00:50:25.750 --> 00:50:30.688
forward to do it in a different manner. Um so that

00:50:30.699 --> 00:50:33.329
again, we're all aligned, we're all kind of marching

00:50:33.340 --> 00:50:36.208
down and achieving the same goal I think. Which we

00:50:36.219 --> 00:50:38.619
all share, which is we want better reliability and

00:50:38.628 --> 00:50:41.590
we want the standards to be very clear. So that as

00:50:41.599 --> 00:50:44.458
we go in again on the front end and we design these

00:50:44.469 --> 00:50:47.639
facilities. That we will get the objective that we are

00:50:47.648 --> 00:50:50.550
seeking. So I think a lot of times we talk about the

00:50:50.559 --> 00:50:52.668
enforcement side and that is very important and it

00:50:52.679 --> 00:50:55.449
needs to be there. But again, it everything kind of

00:50:55.458 --> 00:50:58.050
starts with making sure we have good alignment so that

00:50:58.059 --> 00:51:02.590
we get those facilities um, um standards established

00:51:02.599 --> 00:51:06.909
very quick, very clearly. So that we can um design them

00:51:06.918 --> 00:51:09.800
and build them as robustly as they need to be as they

00:51:09.809 --> 00:51:12.469
need to be constructed. So I would be in agreement

00:51:12.478 --> 00:51:15.869
that we need to go back and get clear clarification.

00:51:15.878 --> 00:51:20.949
And again um in, in terms of the, of the return date

00:51:20.958 --> 00:51:23.579
we're very much thinking that it would be at our next

00:51:24.250 --> 00:51:27.360
board meeting. That we would have this and be able to

00:51:27.369 --> 00:51:30.128
um finalize the direction. That would, that would be

00:51:30.139 --> 00:51:33.208
my sincere hope. We can certainly do that. And if I

00:51:33.219 --> 00:51:36.228
file a memo, it'll be much more detailed about what

00:51:36.239 --> 00:51:41.010
I actually support. Um again on this topic. If or when?

00:51:41.208 --> 00:51:42.168
No, if.

00:51:43.969 --> 00:51:46.219
Thank you Madam Chair.

00:51:49.860 --> 00:51:53.949
Item No. 35 was consented. (item:36:Chairwoman Jackson lays discussion on reliability standard) Next up is Item No. 

00:51:53.958 --> 00:51:59.590
36, Project No. 54584. And we're going to discuss

00:51:59.599 --> 00:52:03.418
the reliability standard. As a reminder at our last

00:52:03.429 --> 00:52:06.010
open meeting, we gave ERCOT the green light to move

00:52:06.019 --> 00:52:08.750
forward with their analytical approach. The proposed

00:52:08.760 --> 00:52:11.728
treatment of low probability events using the exceedance

00:52:11.739 --> 00:52:15.590
probability methodology. ERCOT has since filed a memo

00:52:15.599 --> 00:52:18.550
and is requesting confirmation regarding the initial

00:52:18.559 --> 00:52:22.070
resource mix scenarios and direction to proceed with

00:52:22.079 --> 00:52:25.958
the model runs. I think Woody is here to discuss the

00:52:25.969 --> 00:52:29.820
memo and we'd like for him to come up and walk us

00:52:29.829 --> 00:52:31.739
through it, through his presentation.

00:52:34.860 --> 00:52:36.090
(item:36:Woody Rickerson, ERCOT on 48 scenarios) Woody Rickerson, ERCOT.

00:52:38.219 --> 00:52:44.059
Okay. So we view these uh these 48 scenarios as kind

00:52:44.070 --> 00:52:48.829
of the next logical step to provide information that

00:52:48.840 --> 00:52:52.079
will enable you guys to ask questions on that will

00:52:52.090 --> 00:52:55.949
direct where the study goes next. So to us, this seemed

00:52:55.958 --> 00:52:58.228
like using the framework we kind of agreed on before

00:52:58.239 --> 00:53:00.110
the frequency duration and magnitude

00:53:01.708 --> 00:53:05.219
these next 48 scenarios. And then there's some behind

00:53:05.228 --> 00:53:08.050
those as well. But this will give some information

00:53:08.059 --> 00:53:12.179
as to cost an amount of generation that has to be added.

00:53:12.800 --> 00:53:16.619
And it just it, it will help fill out the information

00:53:16.628 --> 00:53:20.329
overall so that the next steps can be determined. So

00:53:20.340 --> 00:53:23.079
that's what uh we're looking for confirmation to go

00:53:23.090 --> 00:53:24.378
ahead with these 48.

00:53:28.179 --> 00:53:32.300
(item:36:Chairwoman Jackson's question on scenarios) So again, we would run the initial 48 we get, we get

00:53:32.309 --> 00:53:35.110
those results back. We could take a look at them, decide

00:53:35.119 --> 00:53:37.639
going from there kind of narrow down and what scenarios

00:53:37.648 --> 00:53:40.659
might make sense to run and get that feedback information.

00:53:40.668 --> 00:53:43.079
So we start to kind of if you will kind of narrow

00:53:43.090 --> 00:53:47.510
in on the the answer. Yeah, potentially. But I would

00:53:47.519 --> 00:53:50.550
say that the final answer that you come up with may

00:53:50.559 --> 00:53:53.550
be outside these 48 scenarios. I mean, the information that comes

00:53:53.559 --> 00:53:56.750
out of this may direct us into a place where it's beyond.

00:53:56.760 --> 00:53:59.849
This isn't meant to be limiting in what you decide.

00:54:00.139 --> 00:54:02.679
This is just meant for information at this point. And

00:54:02.688 --> 00:54:04.929
we may end up going down a road that's not in these

00:54:04.938 --> 00:54:08.699
48 that goes somewhere else. Or there may be something

00:54:08.708 --> 00:54:10.878
that comes out of these that leads to questions that

00:54:10.889 --> 00:54:14.989
we haven't anticipated yet. But this is these 48 seem

00:54:15.000 --> 00:54:18.820
like the next logical step. And the path that we're

00:54:18.829 --> 00:54:21.918
taking to try to provide information. And this will

00:54:21.929 --> 00:54:26.208
be a more the, the preliminary results you saw were

00:54:26.219 --> 00:54:29.199
uh were preliminary. This will, these will be more

00:54:29.208 --> 00:54:32.360
robust. Uh there will be more Monte Carlo simulations

00:54:32.369 --> 00:54:36.070
behind them, things like that. So this is we're, we're

00:54:36.079 --> 00:54:38.489
we're tuning the model as we go. And this is, these

00:54:38.510 --> 00:54:41.958
are better and better results. (item:36:Commissioner Glotfelty clarifies scenarios) And I, I'm a little unclear

00:54:41.969 --> 00:54:46.349
on the 48 versus the 42. So the 2nd set, the 2nd

00:54:46.360 --> 00:54:50.739
42. I'm sorry, it is 42. Okay, go ahead. So the, the

00:54:50.750 --> 00:54:53.530
so we have two charts here, one of them has 48, one (inaudible).

00:54:54.878 --> 00:54:58.958
And I'm, I'm assuming the 4 top 48 are the same. And

00:54:58.969 --> 00:55:04.489
then the, the bottom 42 are, are different.

00:55:04.500 --> 00:55:07.208
And I, I just don't understand what the difference

00:55:07.219 --> 00:55:11.418
is between the 48 and the 42. The loss of Load expectation

00:55:11.429 --> 00:55:12.860
is that accurate, Woody?

00:55:15.090 --> 00:55:18.519
(item:36:Woody Rickerson gives clarification on scenerios) The 1 in 30. Yeah, we took the 1 and 30 out.

00:55:18.530 --> 00:55:20.909
Because it was in the initial ones just because it

00:55:20.918 --> 00:55:24.039
seemed like it was pretty, that's a pretty high reserve

00:55:24.050 --> 00:55:26.938
margin. It's pretty extreme. Got it. It doesn't mean we can't

00:55:26.949 --> 00:55:29.478
go back and redo that. And that demonstrates that what

00:55:29.489 --> 00:55:31.829
was excluded under the 1 and 30. Therefore, that's

00:55:31.840 --> 00:55:32.500
what you left.

00:55:34.219 --> 00:55:37.510
But that was the, we're trying to cut the work so that

00:55:37.519 --> 00:55:40.570
we can give you back results, iterative that you can

00:55:40.579 --> 00:55:41.590
look at and not just. Yeah.

00:55:44.099 --> 00:55:47.969
(item:36:Commissioner Glotfelty's question on LOE/LE and EUE) And, and when you bring this back or is

00:55:47.978 --> 00:55:51.389
the only standard you're gonna bring in, be bringing

00:55:51.398 --> 00:55:53.539
it back in is

00:55:55.958 --> 00:56:00.860
lost a Load expectation? I mean, is LOE/LE the only

00:56:00.978 --> 00:56:06.119
metric or can that be translated into a EUE or something

00:56:06.128 --> 00:56:10.708
else? Um next time I mean, when you bring this back

00:56:10.719 --> 00:56:13.789
again. Obviously the, we've said this before up here

00:56:14.090 --> 00:56:16.889
and you all have been parts of this. That, that this

00:56:16.898 --> 00:56:19.628
industry is changing in terms of what is the primary

00:56:19.639 --> 00:56:23.599
standard. And as we have that discussion, it would

00:56:23.659 --> 00:56:26.688
be helpful to me if you could just make that translation

00:56:26.699 --> 00:56:29.978
in terms of EUE as well. Okay. (item:36:Woody Rickerson's follow-up) So the way like

00:56:29.989 --> 00:56:32.820
if you just, if we just look at like the very first

00:56:32.829 --> 00:56:37.978
scenario. It will be based on 3 pillars of the framework.

00:56:38.269 --> 00:56:41.958
It'll have an LOE/LE or a frequency of 1 in 5 years,

00:56:41.969 --> 00:56:45.918
a duration of 15 hours and a magnitude of 14,000 Megawatts.

00:56:45.929 --> 00:56:49.559
So those 3 things will. The first scenario will

00:56:49.570 --> 00:56:54.550
capture those 3 metrics. Um now we're gonna make

00:56:54.559 --> 00:56:56.570
two assumptions when we do that and the assumptions

00:56:56.579 --> 00:57:00.070
will vary as well. The assumptions are that 900 megawatts

00:57:00.079 --> 00:57:04.550
gets retired and that any additional capacity that

00:57:04.559 --> 00:57:08.438
has to be added are 100% CTs that get added. And we'll

00:57:08.449 --> 00:57:11.199
vary those two things in similar scenarios. But for

00:57:11.208 --> 00:57:14.159
the first scenario, you have those 3 pillars and

00:57:14.168 --> 00:57:17.289
those two assumptions and then we get back four results.

00:57:17.909 --> 00:57:21.208
We will get back the expected unserved energy for that

00:57:21.219 --> 00:57:24.648
scenario. So that scenario will meet those 3 pillars

00:57:24.659 --> 00:57:27.148
You'll have those two assumptions in it and then we'll

00:57:27.159 --> 00:57:30.750
get back expected, unserved energy. We'll get back

00:57:30.760 --> 00:57:34.309
the number of megawatts that have to be added. We'll

00:57:34.320 --> 00:57:39.510
get back a cost to add those megawatts. And we'll have

00:57:39.519 --> 00:57:43.590
an exceedance probability associated with those three

00:57:43.599 --> 00:57:47.688
numbers. And so the exceedance probability may be 1%

00:57:47.699 --> 00:57:52.708
or 3% or 5%. Got it. And so those numbers will give you information

00:57:52.719 --> 00:57:56.510
to say, I really like scenario number one. But I'm

00:57:56.519 --> 00:57:59.019
not comfortable with the exceedance probability, that's

00:57:59.030 --> 00:58:01.898
way too high. And so you can look down the chart and

00:58:01.909 --> 00:58:05.699
find those same parameters, those those framework parameters.

00:58:05.708 --> 00:58:08.550
And find one with an exceedance, probability less.

00:58:08.559 --> 00:58:10.539
And you'll see a different amount of generation that

00:58:10.550 --> 00:58:14.059
has to be added. And if the thing you're looking for

00:58:14.070 --> 00:58:16.369
is not in those scenarios, then that's obviously something

00:58:16.378 --> 00:58:19.000
we would add in the next round. Like I really like

00:58:19.010 --> 00:58:23.679
scenario 31 but this is a little bit too high and we

00:58:23.688 --> 00:58:25.809
wanna add something here or take something away here.

00:58:25.820 --> 00:58:28.369
Or I wanna see it with this variation instead of what

00:58:28.378 --> 00:58:32.188
you put in there. That'll help design the next steps

00:58:32.199 --> 00:58:37.059
that you look at. This is almost like a menu and we

00:58:37.070 --> 00:58:40.570
framework the menu around those three things, magnitude

00:58:40.579 --> 00:58:45.648
duration, uh and frequency. And then varying the megawatts

00:58:45.659 --> 00:58:50.340
retired for nearly large. We did, we did. That's right. And you know

00:58:50.349 --> 00:58:55.719
we have uh 900 and 3300 as 2 options. I mean, obviously

00:58:55.728 --> 00:58:58.438
if we think there's a reason you need to do 2000 or

00:58:58.449 --> 00:59:01.389
zero, then we could do that as well. And is that net

00:59:01.769 --> 00:59:05.519
I assume? That's just straight retirement, a straight

00:59:05.530 --> 00:59:08.989
retirement. So the, the base stands, the base

00:59:09.000 --> 00:59:12.789
is what's in the, the 2026 expectation. That includes

00:59:12.800 --> 00:59:16.688
any new generation that's already coming online stuff

00:59:16.699 --> 00:59:20.599
that isn't there today, but will be. So we've included

00:59:20.610 --> 00:59:25.128
all of that. And then from that number, we subtract

00:59:25.139 --> 00:59:29.219
out 900 megawatt or 3300 megawatts. And if those aren't

00:59:29.228 --> 00:59:31.329
the right numbers and there's some analysis behind

00:59:31.340 --> 00:59:33.780
that. But if those aren't the right numbers. And we

00:59:33.789 --> 00:59:35.978
want to look at something else. That's, that's just

00:59:35.989 --> 00:59:39.188
another scenario to look at. And we can certainly add

00:59:39.199 --> 00:59:41.628
those. But for these initial ones, we felt like those

00:59:41.639 --> 00:59:45.989
were two good markers to look at. And by the same token

00:59:46.000 --> 00:59:48.750
you'll have the 100% combined cycle, but then you'll

00:59:48.760 --> 00:59:52.978
also run that same case, uh with a different mix.

00:59:54.559 --> 00:59:58.070
That's right, that's right. So the whole idea is to just get a wide variety of

00:59:58.079 --> 01:00:01.688
scenarios. Look at the outcomes and then you can kind

01:00:01.699 --> 01:00:03.760
of go on to the next step. So the point here is

01:00:03.769 --> 01:00:08.519
to just make sure that we've got um as much um breadth

01:00:08.530 --> 01:00:11.728
of information to kind of. Exactly right. So, so the one other question

01:00:11.739 --> 01:00:16.079
that I have is. So when you get these outcomes uh and

01:00:16.090 --> 01:00:19.280
you create the capital cost for a new generation. Is

01:00:19.289 --> 01:00:22.360
that done using an old cone number or a new cone number

01:00:22.369 --> 01:00:26.978
or a CT cone number or a battery cone number or is

01:00:26.989 --> 01:00:30.039
there a menu there as well? There isn't a menu there.

01:00:30.050 --> 01:00:33.438
(item:36:Woody Rickerson's response to cone questions) We'll use the cone that we have the most recent uh

01:00:33.610 --> 01:00:36.369
numbers for. But that's certainly something we can

01:00:36.378 --> 01:00:40.539
report of what cone we use to, to put that new generation

01:00:40.550 --> 01:00:44.809
in. That be good. It obviously, if it's a CT there's

01:00:44.820 --> 01:00:49.820
a capital cost for CT. If it's a mix of combustion

01:00:49.829 --> 01:00:52.699
turbines, wind and solar and batteries. Then we'll

01:00:52.708 --> 01:00:56.849
use the mix that we expect in the CDR. So 20%

01:00:56.860 --> 01:01:00.789
this, 30% that. And we have industry numbers for what

01:01:00.800 --> 01:01:05.010
those cost as well. So the capital cost for the new

01:01:05.019 --> 01:01:09.789
generation is uh industry numbers. Okay.

01:01:11.489 --> 01:01:16.389
(item:36:Commissioner McAdams asks for IMM's thoughts) Madam Chairman uh I, I'd like to try to start a habit

01:01:16.398 --> 01:01:22.478
of. So I personally agree with what Woody's saying

01:01:22.489 --> 01:01:25.989
and the direction he's heading. But I, I think as he

01:01:26.000 --> 01:01:28.559
has alluded to, there's going to be some economic analysis

01:01:28.570 --> 01:01:31.869
that begins to go into this as well. And the associated

01:01:31.878 --> 01:01:36.918
costs with each uh standard. Um I'd like to hear the

01:01:36.929 --> 01:01:40.659
independent market monitors thoughts on 1 the framework.

01:01:40.668 --> 01:01:42.958
That's being associated with the reliability standard

01:01:42.969 --> 01:01:48.239
right now. And then two, the analysis uh components or

01:01:48.250 --> 01:01:52.398
or the uh the metrics that are being fed into this

01:01:52.739 --> 01:01:56.250
and um and the economic consequences of that. Could,

01:01:56.260 --> 01:01:57.820
could we invite her up? Yes.

01:02:04.340 --> 01:02:06.679
So, so really we're just talking about the process

01:02:06.688 --> 01:02:08.458
here. Because obviously we don't have any numbers yet

01:02:08.469 --> 01:02:12.478
because we haven't run any models. Good morning, Carrie

01:02:12.489 --> 01:02:15.938
Bivens with Potomac Economics. Carrie, uh this process

01:02:15.949 --> 01:02:19.019
do you have thoughts? (item:36:Carrie Bivens with Potomac Economics' thoughts around the analysis) Uh I, yeah, I do have thoughts.

01:02:19.030 --> 01:02:21.079
And I, I've engaged a little bit with Woody and his

01:02:21.090 --> 01:02:24.809
team on some questions around the analysis. Um I would

01:02:24.820 --> 01:02:28.898
say my number one concern at this point is the base

01:02:28.909 --> 01:02:34.159
case year using a 2026 value for that. Um I could see

01:02:34.168 --> 01:02:39.639
how perhaps that's okay as a starting point. But as we

01:02:39.648 --> 01:02:44.389
move forward into future market design. As far as using

01:02:44.398 --> 01:02:47.458
the outcome of these studies, in order to do a preserve

01:02:47.469 --> 01:02:50.300
margin. You should always use the prompt year for that.

01:02:50.510 --> 01:02:52.489
And there's a number of reasons for that. But the biggest

01:02:52.500 --> 01:02:55.719
is that by using 2026 you're introducing quite a bit

01:02:55.728 --> 01:02:58.869
of error into the study because there's a lot of things

01:02:58.878 --> 01:03:00.769
that are going in the interconnection key, You have

01:03:00.780 --> 01:03:03.280
to make assumptions about what's gonna be added and

01:03:03.289 --> 01:03:05.579
what's not going to be added. Versus if you use right

01:03:05.590 --> 01:03:08.639
now, we know what our generation mix is and we can

01:03:08.648 --> 01:03:12.860
use our generation mix um to perform these studies.

01:03:12.869 --> 01:03:15.728
And so, um that's just something I think we should

01:03:15.739 --> 01:03:20.438
continue to discuss. Is both for this initial um reliability

01:03:20.449 --> 01:03:23.458
standard process, but also going forward as the reliability

01:03:23.469 --> 01:03:26.780
standard gets used for market processes. Woody, what's

01:03:26.789 --> 01:03:29.418
your view on that, current year versus forward? (item:36:Woody Rickerson's thoughts on current year versus forward) I think

01:03:29.429 --> 01:03:32.590
it's useful to, to do it. In uh what you call a

01:03:32.599 --> 01:03:35.949
prompt year? I think that is useful. Um unfortunately

01:03:35.958 --> 01:03:40.699
it is a uh a lot of we have to go back

01:03:40.708 --> 01:03:42.659
and reset the entire model. So we're already in the

01:03:42.668 --> 01:03:47.208
process of doing that. So we, we have looked at staffing

01:03:47.219 --> 01:03:49.628
and we've looked at contracting and stuff. And so we

01:03:49.639 --> 01:03:52.800
are gonna go back and try to do a prompt here. It

01:03:52.809 --> 01:03:56.739
may lag behind these results a little bit. But we are

01:03:56.750 --> 01:03:59.360
gonna try to reset all the inputs to the model and

01:03:59.369 --> 01:04:02.688
do a prompt year. So we'll do that. I think that's

01:04:02.699 --> 01:04:04.550
half of what you were talking about. The other half

01:04:04.559 --> 01:04:09.648
though, is in the future when we do this, is it a

01:04:09.659 --> 01:04:12.119
two part study or is it just a one year study? Do

01:04:12.128 --> 01:04:16.619
we do a prompt year and a future year always or do

01:04:16.628 --> 01:04:21.260
we just do a, uh the future year? So when we do

01:04:21.269 --> 01:04:24.590
this for future 2027-2028 and moving forward. Are we

01:04:24.599 --> 01:04:27.340
always gonna do a prompt here or not? And uh I think

01:04:27.349 --> 01:04:31.168
it's good for this study that we have a baseline. That

01:04:31.179 --> 01:04:33.360
is, that has a prompt here. So we can see where we

01:04:33.369 --> 01:04:35.878
are versus where we wanna go. I think that's useful

01:04:35.889 --> 01:04:38.250
and we can do that and we're already starting the process

01:04:38.260 --> 01:04:40.849
to do that. Um I think we need to talk a bit

01:04:40.860 --> 01:04:44.469
more about the usefulness of doing that on all future

01:04:44.478 --> 01:04:50.000
studies. Carrie, what your so at Potomac has experience

01:04:50.010 --> 01:04:54.070
in another ISOs as well and they go forward. I mean

01:04:54.269 --> 01:04:57.000
to the extent where that enters into slope, demand

01:04:57.010 --> 01:04:59.760
curve conversations and stuff like that. So what's

01:04:59.769 --> 01:05:03.429
your view on? (item:36:Carrie Bivens thoughts on ISOs) Yeah. So if, if they're running another

01:05:03.438 --> 01:05:07.489
ISOs it depends on the market design. I understand. But for, for

01:05:07.500 --> 01:05:10.559
ones that have prompt capacity markets, then they use

01:05:10.570 --> 01:05:14.340
the prompt year for that reserve margin study. In order

01:05:14.349 --> 01:05:18.059
to set the target megawatt quantity that you need to

01:05:18.070 --> 01:05:18.679
procure.

01:05:21.869 --> 01:05:24.090
Yeah, okay. (item:36:Chairwoman Jackson's comments on timeline) So I think what I'm hearing is that you're already

01:05:24.099 --> 01:05:27.840
kind of considering this prompt year. Um but again

01:05:27.849 --> 01:05:30.510
time is of the essence, we need to move forward. And

01:05:30.519 --> 01:05:34.849
so, um looking at the scenarios that we have before

01:05:34.860 --> 01:05:39.668
us, um in order to kind of move forward expeditiously.

01:05:39.918 --> 01:05:44.840
We would need to continue to, I guess, do what we're

01:05:44.849 --> 01:05:47.978
proposing here, which is um go, go on to the next step.

01:05:48.000 --> 01:05:50.469
(item:36:Commissioner McAdams question on confirmation model discussion) It, it sounds like Woody, what is describing is.

01:05:50.699 --> 01:05:53.840
That they have initiated work on, on this confirmation

01:05:53.849 --> 01:05:58.188
uh model uh which is using the prompt uh data. And

01:05:58.199 --> 01:06:00.860
then uh as a part of our process, by the time the

01:06:00.869 --> 01:06:05.639
board gets these new refined um model results. And

01:06:05.648 --> 01:06:08.780
then ultimately, the Commission. We'll also have the

01:06:08.789 --> 01:06:12.708
value of lost Load study uh information coming back.

01:06:12.719 --> 01:06:17.628
So there will be a, a window to where uh all processes

01:06:17.639 --> 01:06:20.378
catch back up and then we'll have a more complete picture.

01:06:20.389 --> 01:06:23.219
Is that your view, Woody? By the time we make that ultimate

01:06:23.228 --> 01:06:26.659
value judgment. Yeah, it's kind of a two track process.

01:06:26.668 --> 01:06:32.059
That we continue with the 2026 analysis and we will

01:06:32.070 --> 01:06:34.559
start trying to, we've already decided to do the prompt

01:06:34.570 --> 01:06:37.559
year. But we'll, it's gonna be behind the other one.

01:06:37.570 --> 01:06:40.668
Because there's a lot of, of. Because we did not

01:06:40.679 --> 01:06:43.168
we didn't consider that originally as part of the the

01:06:43.179 --> 01:06:45.320
project. And so we're gonna have to do some catch up

01:06:45.329 --> 01:06:48.539
there and we're not staffed exactly to do that at this

01:06:48.550 --> 01:06:51.219
point. So we're gonna have to, to spin that up and

01:06:51.228 --> 01:06:53.369
and catch it back up. And so it'll be a two track

01:06:53.378 --> 01:06:58.079
process for a while until it gets caught up. So, um

01:06:58.659 --> 01:07:02.000
working on the prompt year but still still on the critical

01:07:02.010 --> 01:07:05.429
path and not slowing down, kind of waiting on the prompt

01:07:05.438 --> 01:07:05.760
year.

01:07:07.659 --> 01:07:10.829
That's right. Carrie, anything else? (item:36:Carrie Bivens final thoughts)  Yeah, just the other items um

01:07:10.840 --> 01:07:15.219
that will become very important to this process as

01:07:15.228 --> 01:07:17.219
you already mentioned vol study. So I think it's really

01:07:17.228 --> 01:07:20.530
important to get those that information back. Um I

01:07:20.550 --> 01:07:23.800
don't know what if it will be a single number or a

01:07:23.809 --> 01:07:26.610
range of numbers. And you know, it's gonna be interesting

01:07:26.619 --> 01:07:28.958
to see how, how that those results come back in and

01:07:28.969 --> 01:07:32.168
how that can feed into this model. Um in addition to

01:07:32.179 --> 01:07:33.918
that, I think the Commission will need to consider

01:07:33.929 --> 01:07:37.269
what cone values to use. Um we've experienced quite

01:07:37.280 --> 01:07:41.655
a bit of inflation on labor and parts. And I think that

01:07:41.914 --> 01:07:45.204
the most likely scenario is that cone is higher than

01:07:45.215 --> 01:07:47.875
the official cone that we have right now. And so those

01:07:47.885 --> 01:07:50.375
two things are gonna, those two levers are gonna make

01:07:50.385 --> 01:07:53.853
a big difference and, and what the cost benefit of

01:07:53.864 --> 01:07:57.293
the various reliability standard options are. And the

01:07:57.304 --> 01:08:02.340
economic cost, right? Correct. Okay. Thank you. That's

01:08:02.349 --> 01:08:04.719
all I had. (item:36:Chairwoman Jackson confirms all in agreement with ERCOT's scenarios) Okay. Well, I think what I'm hearing is that

01:08:04.728 --> 01:08:07.559
we're all in agreement with, um moving forward with

01:08:07.570 --> 01:08:11.610
ERCOT's um initial scenarios, the 48 scenarios. That

01:08:11.708 --> 01:08:12.800
is correct. Thank you very much.

01:08:17.048 --> 01:08:21.828
Thank you, Carrie. Um we don't have anything on Items

01:08:21.837 --> 01:08:25.417
37, 38 or 39. Unless y'all do?

01:08:28.399 --> 01:08:32.878
Next up is Item No. 40. Sheila, will you please lay

01:08:32.890 --> 01:08:36.588
out this item? Yes. (item:40:Discussion concerning petition by ERCOT on compensation for eligible Board of Directors) For Item No. 40, ERCOT filed

01:08:36.600 --> 01:08:40.810
a petition in Project No. 54444. Requesting that

01:08:40.819 --> 01:08:43.298
the Commission review and approve the compensation

01:08:43.310 --> 01:08:47.378
for eligible members of ERCOT Board of Directors.

01:08:48.970 --> 01:08:51.878
(item:40:Chairwoman Jackson lays out why compensation should be approved) Compensation levels have remained unchanged for over

01:08:51.890 --> 01:08:56.109
a decade. We should approve the ERCOT petition outlining

01:08:56.119 --> 01:08:58.399
the Board of Directors compensation as referenced in

01:08:58.409 --> 01:09:01.310
Attachment A. There have been a lot of changes and

01:09:01.319 --> 01:09:04.140
a lot has happened at ERCOT over the last decade and

01:09:04.149 --> 01:09:07.939
we should compensate appropriately. I'd like to open

01:09:07.949 --> 01:09:12.088
it up for discussion. (item:40:Commissioner Glotfelty's comments on compensation) I, I have a few comments on

01:09:12.100 --> 01:09:15.770
this. Uh based upon my background um in starting up

01:09:15.779 --> 01:09:19.378
these organizations, we called RTOs and ISOs around

01:09:19.390 --> 01:09:23.729
the country. Um uh back in the late 90s and the

01:09:23.739 --> 01:09:27.509
early 2000s, um they have taken on a life of

01:09:27.520 --> 01:09:30.628
their own. We have asked them to do more in every single

01:09:30.640 --> 01:09:34.739
market including ERCOT. Um but they started out as

01:09:34.750 --> 01:09:38.060
entities that uh ran markets and ensured open access

01:09:38.069 --> 01:09:41.619
to the transmission system for, for generators. Um

01:09:42.168 --> 01:09:44.878
like I said, they are being asked to do more and more.

01:09:45.509 --> 01:09:51.100
Um I struggle with this. Um I, I struggle with um

01:09:51.109 --> 01:09:55.939
the compensation of the executives of RTOs and ISOs

01:09:55.949 --> 01:09:59.199
around the country and the Board Members. Um I think

01:09:59.208 --> 01:10:02.979
the comparisons are that um they're being compared

01:10:02.989 --> 01:10:06.689
to um publicly traded companies. And I'm not sure that's

01:10:06.699 --> 01:10:10.359
a correct comparison, at least as the ERCOT Board.

01:10:10.378 --> 01:10:13.250
Um they're recommending, their consultant recommended

01:10:13.259 --> 01:10:18.289
um a 75th percentile um of their peer group. Um I'm

01:10:18.298 --> 01:10:20.509
just not sure that their peer group was right. And

01:10:20.520 --> 01:10:22.899
I, and I brought this up at the board meeting. Um,

01:10:22.909 --> 01:10:28.270
if they studied um, nonprofits. Um and the comment

01:10:28.279 --> 01:10:33.500
was that, you know, most of the nonprofit uh IRS 

01:10:33.509 --> 01:10:36.449
990 filings are behind uh due to COVID. And there is

01:10:36.529 --> 01:10:39.088
a process. There was a lag before that. They just posted

01:10:39.100 --> 01:10:40.119
on a lag. They

01:10:41.958 --> 01:10:42.509
posted a lag. Yeah, I know. Um, 

01:10:44.890 --> 01:10:47.798
you know, I find it hard that in this, you know, in

01:10:47.819 --> 01:10:50.239
this Summer and this week.

01:10:51.859 --> 01:10:55.189
That we're breaking records yet again and we're having

01:10:55.199 --> 01:10:58.039
to move this to the top. That this is the most important

01:10:58.048 --> 01:11:00.918
thing that we're considering. I don't know. I just

01:11:00.930 --> 01:11:06.270
I, I accept the fact that they're, um their current

01:11:06.279 --> 01:11:10.500
compensation is lower than the other RTOs and ISOs

01:11:10.509 --> 01:11:14.199
around the country. I don't know if they need to be

01:11:14.208 --> 01:11:19.259
at 100% of them or 75% of them or 50% of them.

01:11:19.600 --> 01:11:23.759
Um so I, I just struggle with this. I mean, I think

01:11:23.770 --> 01:11:29.739
it's um we have to protect ratepayers. And what we've

01:11:29.750 --> 01:11:33.189
seen, what I have seen over the years and other not

01:11:33.199 --> 01:11:37.439
in ERCOT, but in our other RTOs. Is executive compensation

01:11:37.449 --> 01:11:40.560
goes up, Board compensation goes up. Executive compensation

01:11:40.569 --> 01:11:43.489
goes up, Board compensation goes up and nobody has

01:11:43.500 --> 01:11:47.680
any say over it. And while we have a say over ERCOT's

01:11:47.689 --> 01:11:51.628
budget and we ultimately have a say over ERCOT's Board

01:11:51.640 --> 01:11:58.569
compensation. I just hope that in time we, we set this

01:11:58.579 --> 01:12:02.958
and we leave it. If we find it acceptable then fine

01:12:03.869 --> 01:12:05.939
But we can't,

01:12:09.069 --> 01:12:14.668
this can't be a spiraling issue. Where costs go unchecked

01:12:14.680 --> 01:12:18.770
for the consumers of the, of this state. So um with

01:12:18.779 --> 01:12:21.039
that I'll, I'll follow your lead. I really just wanted

01:12:21.048 --> 01:12:24.989
to make a statement here. That we can't um let these

01:12:25.000 --> 01:12:28.239
get out of control. Yeah, absolutely. (item:40:Commissioner McAdams thoughts on ERCOT Board compensation) I mean, just

01:12:28.250 --> 01:12:33.470
to, to add to the discussion. Oh, over the last 2

01:12:33.479 --> 01:12:36.298
years, as we've uh discussed market design. We talk

01:12:36.310 --> 01:12:40.970
a lot about boom bust cycles. And um it, it seems like

01:12:40.979 --> 01:12:45.128
it applies to everything with ERCOT. Um and the PUC,

01:12:45.140 --> 01:12:48.739
the PUC was asked and I was guilty of this. Um when

01:12:48.750 --> 01:12:52.418
I was staffing committees in the Legislature with oversight

01:12:52.430 --> 01:12:57.128
of the PUC. PUC was a starved agency uh for a long time

01:12:57.140 --> 01:12:59.949
of resources, essential resources to beef up their

01:12:59.958 --> 01:13:02.609
capabilities. I mean they, they were like the Marine

01:13:02.619 --> 01:13:04.359
Corps. They were asked to do more with less all the

01:13:04.369 --> 01:13:09.548
time. And um, and ERCOT was in a similar situation

01:13:09.560 --> 01:13:13.588
compared to other ISOs. And um, and we have the benefit

01:13:13.600 --> 01:13:17.048
of, of having representation on other ISOs. And now

01:13:17.338 --> 01:13:19.869
they're, they're watching what I'm telling them about

01:13:19.878 --> 01:13:21.668
the actions in ERCOT. And they're like, wow, we wish

01:13:21.680 --> 01:13:23.140
we could get that, you know, because they're gonna

01:13:23.149 --> 01:13:26.899
need it in the very near future. Given the, the dynamism

01:13:26.909 --> 01:13:32.039
of those grids. So I, I wanna highlight some facts

01:13:32.048 --> 01:13:36.140
and establish a fact pattern. Um as we, as we think

01:13:36.149 --> 01:13:40.810
about this. Uh as the Chairman alluded to, this has

01:13:40.819 --> 01:13:45.909
not been changed since 2011. Um that's 12 years and

01:13:45.918 --> 01:13:48.689
since then, the entire nature of ERCOT governance has

01:13:48.699 --> 01:13:54.039
changed. I think that's an absolute fact. Um it's been

01:13:54.048 --> 01:13:56.609
restructured and reformed by no less than Senate Bill

01:13:56.619 --> 01:13:59.500
2, elements of Senate Bill 3. And now as of this

01:13:59.509 --> 01:14:04.310
last Session, House Bill 1500 which are coming as of

01:14:04.319 --> 01:14:08.689
September 1. Directors are now fully independent

01:14:09.109 --> 01:14:11.890
uh from the industry and industry stakeholder segments.

01:14:11.899 --> 01:14:15.829
Which was a feature of the, of the last governance

01:14:15.838 --> 01:14:19.489
design that allowed us to compensation, the compensate

01:14:19.500 --> 01:14:22.649
them at a lesser level. Because they're individual companies

01:14:22.659 --> 01:14:26.229
were compensating them accordingly to their roles and

01:14:26.239 --> 01:14:30.319
duties in ERCO. We don't have that anymore and rightly

01:14:30.329 --> 01:14:33.529
so. The Legislature deemed that was inappropriate. Um

01:14:33.619 --> 01:14:38.229
statute also imposes significant restrictions on who

01:14:38.239 --> 01:14:40.789
can serve on the Board that also restricts what they

01:14:40.798 --> 01:14:45.298
can do after they serve. This is uh it's, it's a hard

01:14:45.310 --> 01:14:48.979
rule. Um namely, directors cannot have worked within

01:14:48.989 --> 01:14:51.619
the energy industry within years of joining the Board.

01:14:52.039 --> 01:14:54.810
Uh they must divest all energy related investments.

01:14:55.489 --> 01:15:00.020
And that's, that makes this a fairly restrictive um

01:15:00.680 --> 01:15:05.378
uh framework around finding qualified people who can

01:15:05.390 --> 01:15:06.048
serve.

01:15:08.689 --> 01:15:11.859
In principle, I want a system managed by individuals

01:15:11.869 --> 01:15:15.470
who can dedicate the time and focus. To a grid that

01:15:15.479 --> 01:15:17.909
is in the midst of the most significant energy transition

01:15:18.000 --> 01:15:22.399
since. Throw out a number of dates, 1935 the Rural Electrification

01:15:22.409 --> 01:15:25.310
Act and FDR 1950. Air conditioning happening in the

01:15:25.319 --> 01:15:29.338
US or 1997 or 99, in deregulation. You can take your

01:15:29.350 --> 01:15:33.970
pick, but we need to account for that as well as inflation

01:15:33.979 --> 01:15:36.659
since 2011. Which I would argue has been significant

01:15:37.458 --> 01:15:41.789
especially in the last few years. And as a policy consideration

01:15:41.798 --> 01:15:44.329
we need to account for ERCOT budget cycles that we're

01:15:44.338 --> 01:15:48.829
attempting to establish now. Um and how often director

01:15:48.838 --> 01:15:52.979
compensation should be reviewed and set and they like

01:15:52.989 --> 01:15:56.069
we need certainty there. Um we beg the Legislature

01:15:56.079 --> 01:16:00.029
for that and they asked us similarly for it. Um since

01:16:00.039 --> 01:16:03.310
there is a lag in our evaluation of the system administration

01:16:03.319 --> 01:16:07.509
fee, if we put them on a two year cycle. Um that

01:16:07.520 --> 01:16:12.229
that has an impact on that review. And for these reasons

01:16:12.239 --> 01:16:15.548
I believe director compensation should be based on

01:16:15.560 --> 01:16:18.529
not just pure organization comparisons that you have

01:16:18.539 --> 01:16:22.609
so ably noted. But also on levels sufficient to attract

01:16:22.890 --> 01:16:26.378
uh the necessary and retain the qualified candidates that

01:16:26.390 --> 01:16:29.319
we want, that we need, that we're gonna have to have.

01:16:29.779 --> 01:16:32.659
And these candidates know full well that there are

01:16:32.668 --> 01:16:36.779
mountains of work ahead of them. I mean this, I can

01:16:36.789 --> 01:16:40.048
guarantee and that's not a threat, that's just a promise.

01:16:40.569 --> 01:16:43.640
And we all knew what we were getting into when we joined

01:16:43.649 --> 01:16:46.279
the Commission and they knew what they were volunteering

01:16:46.289 --> 01:16:51.239
for when they joined ERCOT. Um but in some I, I support

01:16:51.250 --> 01:16:53.859
the proposed compensation level recommended by the

01:16:53.869 --> 01:16:56.918
Board. And believe this will allow us to recruit and

01:16:56.930 --> 01:17:00.819
retain dedicated, a dedicated governing body. Um for

01:17:00.829 --> 01:17:03.399
the system, independent of the industry, which was

01:17:03.409 --> 01:17:04.500
the Legislature's intent.

01:17:06.109 --> 01:17:08.720
And to be able to execute the reforms that we are required

01:17:08.729 --> 01:17:11.668
to implement. Along the timetables that we are required

01:17:11.680 --> 01:17:16.779
to implement them by. Um so I, I believe we can, we

01:17:16.789 --> 01:17:21.708
should move forward now. I would say that the relationship

01:17:21.720 --> 01:17:25.869
between PUC and ERCOT has changed somewhat. In that

01:17:25.878 --> 01:17:30.479
uh Brad Jones said it, we're partners. Um I believe

01:17:30.489 --> 01:17:32.850
the Courts are saying that we're the senior partner.

01:17:34.270 --> 01:17:36.439
And, and we're gonna have to write the rules of the

01:17:36.449 --> 01:17:39.759
road. And uh and I have comments on another agenda item

01:17:39.770 --> 01:17:45.088
related to rules later. But I, I believe this framework

01:17:45.100 --> 01:17:47.350
has to be harmonized to work together and we need the

01:17:47.359 --> 01:17:50.060
rules of the road to do it. And I think there are

01:17:50.069 --> 01:17:54.168
vehicles that are moving, that it should address all

01:17:54.180 --> 01:17:57.168
of our concerns. And I share your concerns on cost

01:17:57.180 --> 01:18:01.869
containment, not allowing this to spiral, spiral. Accountability

01:18:01.878 --> 01:18:04.128
within the system and something we can take back to

01:18:04.140 --> 01:18:06.149
the Legislature. And say hey, look we have created

01:18:06.159 --> 01:18:11.560
a framework that is going to work. (item:40:Motion to approve ERCOT submitted petition on director compensation) Um but anyway, Madam

01:18:11.569 --> 01:18:15.890
Chairman, I have a motion and I would move to approve

01:18:15.899 --> 01:18:18.649
the ERCOT submitted petition on director compensation

01:18:18.979 --> 01:18:22.168
and I hope I have a second. Second. We have a motion and

01:18:22.180 --> 01:18:27.699
we have a second. Um all in favor, say aye. Aye. Motion

01:18:27.708 --> 01:18:28.350
passes.

01:18:32.418 --> 01:18:37.259
(item:41:Chairman Jackson lays out reliability, reserve service discussion) Next up is Item No. 41. Let's take up the dispatch

01:18:37.359 --> 01:18:40.770
reliability, reserve service discussion here. ERCOT

01:18:41.088 --> 01:18:47.180
filed a memo in Project 54444. House Bill 1500 requires

01:18:47.439 --> 01:18:50.399
ERCOT to develop it, implement an ancillary service

01:18:50.409 --> 01:18:55.729
program to procure DRRS by December 1, 2024. ERCOT has

01:18:55.739 --> 01:18:59.819
been evaluating options for development of AD RRS project

01:18:59.829 --> 01:19:03.168
We have Canon with ERCOT here today, I believe to

01:19:03.180 --> 01:19:06.979
discuss it. And could you please come up and provide

01:19:06.989 --> 01:19:08.979
us with the highlights of your memo.

01:19:16.909 --> 01:19:23.159
(item:41:Kenan Ögelman with ERCOT on memo) Kenan Ögelman, with ERCOT um good morning. So uh, uh I I can walk you

01:19:23.168 --> 01:19:27.220
through the, the slide deck. Or, or just kind of focus

01:19:27.229 --> 01:19:30.229
on some highlights. Is there a preference in terms

01:19:30.239 --> 01:19:36.369
of. I think we've all seen the slide deck. Sure have. Okay,

01:19:36.489 --> 01:19:39.878
um, so let me lay it out. I, I think there are

01:19:39.890 --> 01:19:45.279
uh, within the statute uh some uh, design requirements

01:19:45.289 --> 01:19:48.009
that, that are spelled out. So we're trying to work

01:19:48.020 --> 01:19:53.609
within those parameters. Um some of the key items are

01:19:53.619 --> 01:20:00.378
that we deliver the service by December 1, 2024. That

01:20:00.390 --> 01:20:04.770
puts us on a, a relatively tight time frame. And uh

01:20:04.779 --> 01:20:09.720
helps define some of the feasible options that, that

01:20:09.729 --> 01:20:13.659
are out there. Um, a couple of the other uh items that

01:20:13.668 --> 01:20:18.729
I would highlight is that uh a resource has to be two

01:20:18.739 --> 01:20:23.168
hours or less away. Um and capable of running at its

01:20:23.180 --> 01:20:25.729
uh, uh high end high

01:20:27.439 --> 01:20:33.628
sustainable limit for, for 4 hours. Um uh lastly,

01:20:33.640 --> 01:20:38.750
there is a requirement that there be a uh commiserate

01:20:38.759 --> 01:20:42.779
reduction in the reliability unit commitment. Relative

01:20:42.789 --> 01:20:46.229
to the procured amount of this service. Um uh I, I

01:20:46.239 --> 01:20:50.100
do want to make one observation there um for local

01:20:50.109 --> 01:20:54.109
issues, local reliability issues. Reliability unit

01:20:54.119 --> 01:20:58.029
commitment is one of our kind of backstops that lets

01:20:58.039 --> 01:21:03.109
us uh align and meet NERC requirements. So that's, and

01:21:03.119 --> 01:21:10.020
that part of it, which is not uh the not the, the

01:21:10.048 --> 01:21:13.079
segment of RUC that you've been hearing lots of complaints

01:21:13.088 --> 01:21:17.289
about. But that part is gonna probably remain in, in

01:21:17.298 --> 01:21:20.579
in some form. Now, there's overlap with some of these

01:21:20.588 --> 01:21:25.628
things so that uh that'll be something we work to analyze

01:21:25.640 --> 01:21:28.338
and, and, and work through. (item:41:Commissioner McAdams question on implementation decisions) So, so would that be a

01:21:28.350 --> 01:21:32.128
implementation feature that could be adjusted? I mean

01:21:32.140 --> 01:21:34.729
we've all everybody in the room probably read the statute

01:21:34.739 --> 01:21:38.770
a couple times, you always find something new. Um but

01:21:39.250 --> 01:21:41.779
would that be a feature of implementation decisions?

01:21:41.789 --> 01:21:46.819
Where again the RUC capabilities for congestion are

01:21:46.829 --> 01:21:49.668
separate and apart, in terms of the calculation applied

01:21:49.699 --> 01:21:53.789
to the DRRS equivalent reduction. I believe that we're

01:21:53.798 --> 01:21:56.689
gonna have to try and track that. Federal policy and

01:21:56.699 --> 01:21:58.689
state policy have to be harmonized. So we have to,

01:21:59.149 --> 01:22:02.159
and, and by the way, I mean, the statute doesn't require

01:22:02.338 --> 01:22:05.939
complete elimination of, of reliability unit commitment.

01:22:05.949 --> 01:22:09.399
So I think all of these things align. It's just uh

01:22:09.409 --> 01:22:12.168
just wanted to set the stage with you in terms of how

01:22:12.180 --> 01:22:18.208
we were looking at it. Um so essentially we uh found

01:22:18.220 --> 01:22:22.199
two potential paths that, that would work. And

01:22:22.208 --> 01:22:26.869
ultimately um the, the second one I'll go over uh

01:22:28.088 --> 01:22:31.958
doesn't meet the timeline. But I did wanna make sure

01:22:32.029 --> 01:22:35.000
you knew that we tried to look at as many options uh

01:22:35.009 --> 01:22:39.918
as, as we could. I would also uh you know, qualify

01:22:39.930 --> 01:22:43.208
what I'm about to share with you that. Uh you know,

01:22:43.220 --> 01:22:46.350
we we're still working with both stakeholders and

01:22:46.359 --> 01:22:49.259
internally to see if we miss something. Uh that, that

01:22:49.270 --> 01:22:54.270
is also a viable option. But as of right now, what

01:22:54.279 --> 01:22:57.399
we put in our presentation is are, are the options

01:22:57.409 --> 01:23:03.509
that we're aware of. So, um if the Option A is to

01:23:04.189 --> 01:23:15.239
use nonspin as a replacement for uh, uh for uh DRRS.

01:23:15.250 --> 01:23:20.509
So you are, you kind of either say I'm not procuring

01:23:20.520 --> 01:23:24.819
nonspin anymore in the, in the current fashion and

01:23:24.829 --> 01:23:31.890
procure DRRS in its place. Or you segment, add another

01:23:31.899 --> 01:23:38.479
segment into nonspin. And uh do it and, and that is

01:23:38.489 --> 01:23:43.259
meets the DRRS requirements. There are pros and cons

01:23:43.270 --> 01:23:49.310
to both of these uh approaches. So completely uh vacating

01:23:49.319 --> 01:23:55.259
nonspin and putting DRRS in its place will require

01:23:55.270 --> 01:24:00.699
us to lean more on the ERCOT contingency reserve service

01:24:01.168 --> 01:24:05.628
and that's a very new service. Um and the market is

01:24:05.640 --> 01:24:09.689
still kind of adjusting to our procurement of that

01:24:09.699 --> 01:24:13.699
service. Um so uh that's something definitely we wanna

01:24:13.708 --> 01:24:18.588
keep an eye on. Um the other uh approach. Uh adding

01:24:18.600 --> 01:24:22.220
another segment means that there are kind of almost

01:24:22.229 --> 01:24:26.128
three products within nonspin. But it would have to

01:24:26.140 --> 01:24:31.180
price out at one price. So there's some real inefficiencies

01:24:31.189 --> 01:24:35.770
in terms of market design um going down that path.

01:24:35.989 --> 01:24:39.548
So those are the, those are some of the flavors of

01:24:39.560 --> 01:24:45.029
uh what we're trying to uh wrestle with. Um then if

01:24:45.039 --> 01:24:51.918
I go to Option B. What um happens there, unfortunately

01:24:51.930 --> 01:24:55.878
when we did a very high level impact assessment, it

01:24:55.890 --> 01:24:58.628
doesn't look like we can bring that in until uh the

01:24:58.640 --> 01:25:02.739
first or second quarter of 2025. So to me, that means

01:25:02.750 --> 01:25:07.109
I'm not in compliance with, with the statute. But I

01:25:07.140 --> 01:25:11.199
did wanna uh kind of share all the work that we did

01:25:11.208 --> 01:25:14.560
with the Commission. And in that instance, what we

01:25:14.569 --> 01:25:17.259
would do is almost kind of use our experience from

01:25:17.270 --> 01:25:22.529
ECRS to almost cut and paste uh additional protocol

01:25:22.539 --> 01:25:27.378
language and requirements into our systems. And uh and

01:25:27.390 --> 01:25:32.270
and deliver uh, uh additional ancillary service that

01:25:32.279 --> 01:25:37.298
was called DRRS going down that path. However, as I

01:25:37.310 --> 01:25:40.909
said, that does not seem to meet the timeline that

01:25:40.918 --> 01:25:44.338
we've been instructed to deliver. Uh a couple of other

01:25:44.350 --> 01:25:47.560
observations that I think are material to share with

01:25:47.569 --> 01:25:53.149
you. Is that um whatever path we go with nonspin to

01:25:53.159 --> 01:25:59.689
achieve a uh aligning reduction in RUC. The service

01:25:59.699 --> 01:26:03.779
needs to be provided by offline resources and not online

01:26:03.789 --> 01:26:09.338
resources. And I raise that for two reasons. One, currently

01:26:09.350 --> 01:26:14.220
nonspin has an online component. Um it automatically

01:26:14.229 --> 01:26:21.119
kicks in at $75. Uh and um it allows uh QSCs

01:26:21.128 --> 01:26:25.168
to move responsibilities around relative to day ahead

01:26:25.180 --> 01:26:31.100
awards within their portfolio. Um that uh feature is

01:26:31.109 --> 01:26:36.329
gonna have to be limited or eliminated to ensure we

01:26:36.338 --> 01:26:40.479
get a reduction in RUC. The other reason why you,

01:26:40.489 --> 01:26:43.048
you will be interested in this and this is coming out

01:26:43.060 --> 01:26:47.759
as we look at ECRS, which is an offline resource. Is

01:26:47.770 --> 01:26:54.180
those reserves, make less energy available to our security

01:26:54.189 --> 01:26:58.229
constrained economic dispatch engine until ERCOT releases

01:26:58.239 --> 01:27:02.628
those reserves. Um and that is one of the drivers for

01:27:02.640 --> 01:27:07.949
some of the um uh higher prices that you're seeing

01:27:07.958 --> 01:27:12.350
in, in the energy market. Um when once ERCOT releases

01:27:12.359 --> 01:27:15.310
the reserves, when we've hit the reliability requirements

01:27:15.319 --> 01:27:19.338
to do so that energy is available to the security constrained

01:27:19.350 --> 01:27:22.680
economic dispatch. But prior to that, it's not. Now

01:27:22.689 --> 01:27:26.729
real time optimization solves this. But that's there

01:27:26.739 --> 01:27:30.869
there will be this interim time period where uh less

01:27:30.878 --> 01:27:35.479
energy is available to SCAD. So, so as we um kind of

01:27:35.489 --> 01:27:38.810
engage stakeholders and try and move forward with this.

01:27:39.119 --> 01:27:41.239
Um the, these are some of the themes I think you're

01:27:41.250 --> 01:27:46.539
gonna hear as folks prefer one outcome over another.

01:27:46.548 --> 01:27:49.350
Um so I thought that those were important uh items

01:27:49.359 --> 01:27:52.869
to share with you. Um the last thing that I did want

01:27:52.878 --> 01:27:57.680
to talk about is kind of our, our timeline. And um our

01:27:57.689 --> 01:28:02.649
goal is to uh bring uh. And, and let me make sure

01:28:02.659 --> 01:28:06.918
I get these dates right. But um our goal is to, you

01:28:06.930 --> 01:28:10.009
know, continue discussions through the end of this

01:28:10.020 --> 01:28:16.699
month. Um and uh, then uh work on protocol development.

01:28:16.708 --> 01:28:20.369
Uh we'd like to do that in the August time period.

01:28:21.039 --> 01:28:24.298
Then once the protocols are developed, we would bring

01:28:24.310 --> 01:28:27.878
that to the stakeholder process and move that through

01:28:27.890 --> 01:28:32.100
the stakeholder process probably through October. With

01:28:32.109 --> 01:28:37.000
a goal of delivering uh a voting set of protocols to

01:28:37.009 --> 01:28:41.259
the board in October. And um that would give the Commission

01:28:41.270 --> 01:28:45.458
time to review and do its due diligence and consider

01:28:45.470 --> 01:28:49.708
whether it would like to approve uh the the protocols

01:28:49.720 --> 01:28:53.069
in the kind of November time period. And then we would

01:28:53.079 --> 01:28:58.628
start turning those protocols into um requirements.

01:28:58.958 --> 01:29:02.430
Those requirements would then be system changes that

01:29:02.439 --> 01:29:06.489
we need to implement. And we believe we can meet the

01:29:06.500 --> 01:29:10.310
December 1, 2024 deadline in the statute.

01:29:13.628 --> 01:29:20.048
(item:41:Commissioner McAdams comments to memo) Kenan, you, you lose a bit by uh taking option uh A1.

01:29:21.100 --> 01:29:27.770
Um and it's the repurposing of, of nonspin as one single.

01:29:27.779 --> 01:29:32.128
I mean, all of nonspin capabilities that are being

01:29:32.239 --> 01:29:37.770
supplanted by the statutorily required DERS. And moving

01:29:37.958 --> 01:29:44.029
those megawatts uh procurement over to ECRS. That, that

01:29:44.039 --> 01:29:47.189
really eliminates the 30 minute online. Correct. That

01:29:47.199 --> 01:29:54.048
you lose. Um, I mean, the 30 minute would qualify for

01:29:54.060 --> 01:29:58.208
uh DRRS since it's inside the, the two hours. Yeah

01:29:58.220 --> 01:30:00.770
you would just be paying for really efficient units.

01:30:01.259 --> 01:30:04.939
Correct, I just didn't wanna. Not efficient unit as

01:30:04.949 --> 01:30:07.489
efficient units. Correct. Um

01:30:11.579 --> 01:30:12.668
and um,

01:30:17.000 --> 01:30:21.250
and you believe on A, uh A2. Because you're doing

01:30:21.259 --> 01:30:26.259
an A-B thing. Um, you believe you could meet the statutory

01:30:26.270 --> 01:30:29.798
deadline with A2? (item:41:Kenan Ögelman on timeline) We, we believe we. Kristi is shaking her head

01:30:29.859 --> 01:30:30.100
no.

01:30:33.109 --> 01:30:38.628
Oh, I. The, the team has actually since uh done some

01:30:38.640 --> 01:30:42.319
more work. And I think A, I'd like to reserve the right

01:30:42.329 --> 01:30:45.649
to come back and update you on that. But, but the team

01:30:45.659 --> 01:30:50.640
does believe A2 is in play. It's, it's more B that

01:30:50.649 --> 01:30:54.560
is really off the table. And I, I know Kristi is shaking,

01:30:54.569 --> 01:30:58.699
shaking her head. I had this conversation yesterday

01:30:58.708 --> 01:30:59.220
evening.

01:31:02.250 --> 01:31:05.100
So your thought is that you want to have some stakeholder

01:31:05.109 --> 01:31:08.878
engagement. Um that would in the event that there is

01:31:08.890 --> 01:31:12.250
potentially another idea out there that could enter

01:31:12.259 --> 01:31:16.039
into this Option A. That that could be, that could

01:31:16.048 --> 01:31:20.390
be considered. Is that true? (item:41:Kenan Ögelman on engaging with stakeholders) Yes, we would like to

01:31:20.399 --> 01:31:24.689
engage stakeholders for two reasons. One are, we may

01:31:24.699 --> 01:31:28.298
have missed something that's good or bad in the options

01:31:28.310 --> 01:31:30.640
we're considering. But we may have also missed some

01:31:30.649 --> 01:31:34.708
alternative that, that works better or an enhancement

01:31:34.720 --> 01:31:39.128
that would uh work better. And the stakeholder process

01:31:39.140 --> 01:31:42.588
has been very valuable to provide that kind of feedback.

01:31:42.909 --> 01:31:47.060
Um so, so I think there's a lot of value to having

01:31:47.069 --> 01:31:51.399
some workshops, getting feedback. Um of course, there

01:31:51.409 --> 01:31:54.520
can be additional feedback when we drop the uh protocol

01:31:54.529 --> 01:31:57.878
revisions as well, the nodal protocol revisions. But

01:31:57.890 --> 01:32:01.739
we really wanna um engage stakeholders before we kind

01:32:01.750 --> 01:32:05.869
of choose a path and start writing protocols. What

01:32:05.878 --> 01:32:10.109
do we believe the lag time is uh between real time

01:32:10.119 --> 01:32:12.619
co-optimization and the statutory deadline?

01:32:14.298 --> 01:32:20.609
There is uh I believe around a uh 1.5 to 2 year

01:32:20.619 --> 01:32:27.250
lag. Between uh real time delivery of real time co-optimization

01:32:27.259 --> 01:32:30.369
and the December 1, 2024 date.

01:32:32.810 --> 01:32:37.909
Okay. Meaning RTC happens after the 2024 date. Yes sir.

01:32:37.918 --> 01:32:42.270
Two years later though. It, it can I ask you? So we

01:32:42.279 --> 01:32:49.418
we've got all these ancillary services now. Some have been in the market a long time, others have been created by us. Now we have one

01:32:49.750 --> 01:32:53.199
created by the Legislature. Um do y'all feel comfortable

01:32:53.208 --> 01:32:55.878
how these are working together? Uh and will you be

01:32:55.890 --> 01:32:58.909
able to tell us at some point in time where you see

01:32:58.918 --> 01:32:59.619
gaps?

01:33:01.458 --> 01:33:07.159
(item:41:Kenan Ögelman on ancillary services and gaps) Uh so a, a absolutely. I uh because um and we're experience

01:33:07.168 --> 01:33:11.159
this with EECRS, this contingency reserve service.

01:33:11.539 --> 01:33:15.970
But with every um uh new ancillary service, there is

01:33:15.979 --> 01:33:20.338
a market side adjustment. Um you know so we're, we're

01:33:20.350 --> 01:33:23.229
just kind of getting comfortable uh with that. I, I

01:33:23.239 --> 01:33:26.439
think it's gonna take a little bit more time. Uh we

01:33:26.449 --> 01:33:30.279
discussed uh this TAC. There was a lot more information

01:33:30.289 --> 01:33:33.378
that stakeholders wanted. So, um there's a learning

01:33:33.390 --> 01:33:37.539
process with everyone. And I wouldn't say I'm comfortable

01:33:37.548 --> 01:33:40.439
until, you know, we've gotten through the shakedown.

01:33:40.449 --> 01:33:45.378
And, and really uh, uh closed all the gaps and, and

01:33:45.628 --> 01:33:49.970
and made sure we, you know, uh if something was missing

01:33:49.979 --> 01:33:54.699
we didn't adjust for it. So uh unknowns are, are never

01:33:54.708 --> 01:33:58.048
comfortable, I guess would be maybe the short answer

01:33:58.060 --> 01:34:01.649
that I should have started off with. (item:41:Commissioner Glotfelty's comments on ancillary services and gaps) Well I, I clearly

01:34:01.659 --> 01:34:07.520
these uh the, the kind of the runway for understanding

01:34:07.529 --> 01:34:11.390
how these are playing in the market is. Everybody has

01:34:11.399 --> 01:34:15.189
to have some time to understand that. But I hope that

01:34:15.199 --> 01:34:20.659
as you implement the DRS and continue to understand

01:34:20.668 --> 01:34:24.810
how ECRS is working and interplay with RUCing. And

01:34:24.930 --> 01:34:27.418
I mean, all of these things, you'll come back to us

01:34:27.430 --> 01:34:31.909
and say as well as the IMM. Come back and say, you

01:34:31.918 --> 01:34:34.479
know, this is too expensive here because of, let's

01:34:34.489 --> 01:34:37.798
think about this or we've got a huge ramping gap here.

01:34:37.810 --> 01:34:40.989
ECRS was supposed to solve it, but it's not why. Uh

01:34:41.000 --> 01:34:45.079
we need to add storage into it for some reason or take

01:34:45.088 --> 01:34:47.770
storage out of the, you know. I, I don't know. I'm

01:34:47.779 --> 01:34:50.390
just saying that uh we got to be flexible, these things

01:34:50.399 --> 01:34:52.918
are and then we got to lock it down. I mean, the

01:34:52.930 --> 01:34:56.180
market needs to understand that we, that we mean certainty.

01:34:56.399 --> 01:34:59.939
Um and I'm, I'm hoping that we can get to a

01:34:59.949 --> 01:35:02.279
place in this market where we provide certainty for

01:35:02.289 --> 01:35:06.189
a long time. Um so we just look to you all for

01:35:06.239 --> 01:35:09.699
uh or I look to you for, for giving us these gaps

01:35:09.708 --> 01:35:13.628
here in the future. (item:41:Commissioner McAdams thoughts on certainty) No I, I think, I think it's a

01:35:13.640 --> 01:35:17.289
great segway. We do need certainty and, and frankly

01:35:17.369 --> 01:35:21.548
with the breadth of the Legislation. The effective

01:35:21.560 --> 01:35:27.088
policies in the Legislation. We need ERCOT's help to

01:35:27.100 --> 01:35:31.759
help, along with our Staff. To help frame this out in

01:35:31.770 --> 01:35:36.430
a consistent framework um to make sure it's all harmonized.

01:35:37.350 --> 01:35:39.390
(item:41:Chairwoman Jackson reviews discussion) So, so I believe, I believe what I'm hearing is that

01:35:39.399 --> 01:35:42.989
it's important for ERCOT to comply with the 12-1-24

01:35:43.000 --> 01:35:46.140
statutory deadline. We don't have a choice, yes ma'am. And that

01:35:46.489 --> 01:35:49.039
should work with the stakeholders in July and August.

01:35:49.048 --> 01:35:52.789
On the best way to meet the DERS requirement including

01:35:53.220 --> 01:35:56.350
um developing protocol changes that meet the statutory

01:35:56.359 --> 01:36:00.439
requirements of HB1500. Um it'll be important to have

01:36:00.449 --> 01:36:02.628
decisions made before the end of the year. So that

01:36:02.640 --> 01:36:07.838
system changes can be timely implemented. But in addition

01:36:08.338 --> 01:36:13.720
to DRRS, HB1500 also requires the PUC and ERCOT to work

01:36:13.729 --> 01:36:17.548
on a number of additional market design elements. I

01:36:17.560 --> 01:36:20.009
think it would be helpful for ERCOT to return to our

01:36:20.020 --> 01:36:24.989
next open meeting on July 20. With a road map for accomplishing

01:36:25.000 --> 01:36:28.039
the remaining market design work that is in front of

01:36:28.048 --> 01:36:28.430
us.

01:36:30.079 --> 01:36:33.088
We will be prepared to do that. I think that will be

01:36:33.100 --> 01:36:37.619
very helpful Madam Chair. And Kenan I think that'll synchronize

01:36:37.628 --> 01:36:40.939
with our own Staff's efforts on a rulemaking calendar.

01:36:40.949 --> 01:36:43.418
And then the market we'll be able to see on an iterative

01:36:43.430 --> 01:36:47.798
basis how all this rolls out together. And so we look

01:36:47.810 --> 01:36:51.439
forward to hearing from you all on July 20th. Thank

01:36:51.449 --> 01:36:51.560
you.

01:36:56.180 --> 01:37:04.329
I don't have anything on Items 42 and 43. Uh Madam Chair,

01:37:04.338 --> 01:37:07.529
if, if I could take this opportunity on Item 43. Um

01:37:07.628 --> 01:37:11.689
Let's bring it the item. Oh, yes. Oh, sorry. The project.

01:37:12.668 --> 01:37:18.180
(item:43:Chairwoman Jackson lays out discussion for the rulemaking calendar) Yes, I'm now bringing up Item 43, Project No. 54455

01:37:18.270 --> 01:37:21.430
Perfect. (item:43:Commissioner McAdams comments on rulemaking calendar) Um and that's the discussion for the rulemaking

01:37:21.439 --> 01:37:25.289
calendar. And I wanted to take this opportunity um as

01:37:25.298 --> 01:37:29.319
I had mentioned before. Uh in the context of ERCOT and

01:37:29.329 --> 01:37:34.140
PUC relationship. I believe um much has happened uh

01:37:34.149 --> 01:37:38.619
especially since SB2, SB3 and now, HB1500.

01:37:39.048 --> 01:37:44.609
To that, that certainly warrants us establishing, we're

01:37:44.619 --> 01:37:47.298
codifying the relationship and the interaction and

01:37:47.310 --> 01:37:50.770
the processes associated with the decision making. Uh

01:37:50.779 --> 01:37:56.109
process for both ERCOT and PUC in substantive rule.

01:37:56.119 --> 01:37:59.600
I, I think one of the takeaways I'm hearing from the

01:37:59.609 --> 01:38:02.930
market and other places. Is that we need rules of the

01:38:02.939 --> 01:38:08.649
road and um and it, it helps level set the relationship

01:38:08.770 --> 01:38:12.779
uh for both, for both entities. Um both the organization

01:38:12.789 --> 01:38:16.149
of ERCOT and the PUC. It helps hold us accountable

01:38:16.159 --> 01:38:20.689
if we have some type of uh parameters, some type of

01:38:20.699 --> 01:38:25.548
uh clarification of, of our own review and substantive

01:38:25.560 --> 01:38:32.060
rule. And it allows for a defined process of public

01:38:32.069 --> 01:38:37.640
input, uh stakeholder input and um that, that will

01:38:37.649 --> 01:38:43.350
benefit both organizations. And um I think the rule

01:38:43.359 --> 01:38:47.119
making framework that Staff is working on. Um it's

01:38:47.128 --> 01:38:50.489
been 2 years since House Bill 2 and uh I believe

01:38:50.500 --> 01:38:54.000
I've heard from Staff that they believe it's time to

01:38:54.009 --> 01:38:57.100
to start working on this type of relationship. And

01:38:57.109 --> 01:38:59.949
um frankly, I think ERCOT does too. I mean, it might

01:38:59.958 --> 01:39:02.399
help just to have words on paper. I know Chad believes

01:39:02.409 --> 01:39:07.439
in that. And um especially as we consider the budget

01:39:07.449 --> 01:39:11.259
and it, it's now uh over to us as a recommendation

01:39:11.270 --> 01:39:15.798
from the ERCOT Board. Um it will significantly expand

01:39:15.810 --> 01:39:19.439
the scope and capabilities of the organization. And

01:39:19.449 --> 01:39:22.520
um and I'll be interested to hear uh the market's feedback

01:39:22.529 --> 01:39:26.310
on that. But as such, we need to harness uh within

01:39:26.319 --> 01:39:31.020
our own processes, how to use such capabilities. And

01:39:31.029 --> 01:39:33.838
and that way we can consider it in the Fall. As we

01:39:33.850 --> 01:39:38.628
evaluate both organizations together and the resources

01:39:38.640 --> 01:39:42.640
needed to, to make them work most efficiently for the

01:39:42.649 --> 01:39:45.989
system. And so I guess uh that's a long winded way

01:39:46.000 --> 01:39:50.310
of saying, I think a rulemaking on um PUC processes

01:39:50.319 --> 01:39:53.918
as it relates to ERCOT and ERCOT processes as it relates

01:39:53.930 --> 01:39:58.520
to PUC is warranted. And I believe, um it'll be in

01:39:58.529 --> 01:40:03.149
the framework that we see in July. And um and I just

01:40:03.159 --> 01:40:06.229
want to reassure the system that we're trying to harmonize

01:40:06.239 --> 01:40:10.250
all efforts. That it's nothing is going to spiral out

01:40:10.259 --> 01:40:12.310
of control because there will be checks and balances

01:40:12.319 --> 01:40:18.229
associated with the path forward. And, and hopefully

01:40:18.239 --> 01:40:21.489
that begins assuaging the concerns that are being expressed

01:40:21.829 --> 01:40:25.909
to the Legislature, to the Courts. Um and to let people

01:40:25.918 --> 01:40:32.149
know that we are listening my view. (item:43:Commissioner Glotfelty's thoughts on rulemaking calendar) I, I agree. Um

01:40:32.689 --> 01:40:34.890
We, we, we have to put it on paper for everyone to

01:40:34.899 --> 01:40:38.810
understand including ourselves and our Staff. When we

01:40:38.819 --> 01:40:41.689
get things that come in late, when we get things that

01:40:41.890 --> 01:40:46.770
this won't resolve that. But having discussion items

01:40:46.779 --> 01:40:49.750
or filing deadlines or something before an open meeting.

01:40:49.759 --> 01:40:54.750
Gives us and our Staff uh the ability to ask questions

01:40:54.958 --> 01:40:58.720
appropriately here from other stakeholders. I've been

01:40:58.729 --> 01:41:02.489
uncomfortable for, you know, how we're processing all

01:41:02.500 --> 01:41:05.069
the NPRRs and things. Just because they're coming

01:41:05.079 --> 01:41:11.509
and, you know, we get what the, the Board proposes

01:41:11.520 --> 01:41:14.708
or passes and then our committee, our Commission Staff

01:41:14.720 --> 01:41:17.109
looks at it. And gives us a recommendation, but there's

01:41:17.119 --> 01:41:19.359
no other input, you know, and I, and I think, you know

01:41:19.369 --> 01:41:23.039
as we go down this process. Uh things like that are

01:41:23.048 --> 01:41:26.958
ripe for laying out a framework for and uh I appreciate

01:41:26.970 --> 01:41:31.069
you bringing it up and uh totally support it. It makes

01:41:31.079 --> 01:41:33.708
total and complete sense. It's really operational integrity

01:41:33.720 --> 01:41:37.039
management. So we define what the requirements are.

01:41:37.048 --> 01:41:39.750
We set the processes in place to meet those requirements

01:41:40.088 --> 01:41:43.458
we audit, we make sure that we have evidence and then

01:41:43.470 --> 01:41:45.850
we look for opportunities for continuous improvement.

01:41:48.789 --> 01:41:51.279
And that is all my discussion. So thank you for entertaining.

01:41:51.329 --> 01:41:54.140
So, so I have one other question about the rule making

01:41:54.149 --> 01:41:57.220
calendar and that would be uh I guess David Smeltzer

01:41:59.418 --> 01:42:03.298
I thought you left. Um he's wearing a tie. You don't recognize him.

01:42:04.020 --> 01:42:07.189
That's right. Um So if, if we, if there are other

01:42:07.199 --> 01:42:10.838
rulemaking that we think we want to propose discussion

01:42:11.029 --> 01:42:13.859
items on or bringing up in the process, should we just

01:42:14.289 --> 01:42:17.350
talk to you about it or file a memo or Connie? Let's

01:42:17.359 --> 01:42:23.020
tell me between y'all what we. (item:43:David Smeltzer with Commission Staff on rulemaking calendar) I, I think that, you

01:42:23.029 --> 01:42:24.378
know, to the extent that you wanna share it with your

01:42:24.390 --> 01:42:26.390
colleagues filing a memo is always appropriate. But

01:42:26.399 --> 01:42:30.509
conferring with either Connie and I, as you're before

01:42:30.520 --> 01:42:33.529
you do or alongside your preparations is always helpful.

01:42:33.539 --> 01:42:35.878
So that we can, you know, sometimes we might already

01:42:35.890 --> 01:42:38.208
have something in the works in the area that you're

01:42:38.699 --> 01:42:42.060
contemplating. Other times we might not, but Staff

01:42:42.069 --> 01:42:44.060
always appreciates the heads up either through, either

01:42:44.069 --> 01:42:45.088
through me or Connie. And we,

01:42:47.199 --> 01:42:49.199
one that I'm thinking about is transmission planning

01:42:49.208 --> 01:42:51.850
and, and how we work on that. So I just want to

01:42:51.859 --> 01:42:55.668
make sure that we continue to think about that in the

01:42:55.680 --> 01:42:59.439
mix of all of these rulemakings. And um I know this

01:42:59.449 --> 01:43:01.838
isn't your first time to hear it. And Commissioner

01:43:02.250 --> 01:43:06.229
Glotfelty. I'll say so our plan is to bring a rulemaking calendar

01:43:06.239 --> 01:43:09.899
to the 20th, July 20th open meeting on Staff. We're

01:43:09.909 --> 01:43:13.069
still prioritizing and getting our timelines together.

01:43:13.079 --> 01:43:15.649
We will preview that with you beforehand. When we come

01:43:15.659 --> 01:43:17.079
back to your office, that would be a good time for

01:43:17.088 --> 01:43:19.039
you to let us know if there are any additional rule

01:43:19.048 --> 01:43:22.069
making you'd like us to add. And just for everyone's

01:43:22.079 --> 01:43:24.708
edification, our plan is, is to do that. We'll also

01:43:24.720 --> 01:43:27.270
preview it with Legislature and the Governor's office.

01:43:27.279 --> 01:43:30.310
And then the week of July 10th right now, tentatively

01:43:30.319 --> 01:43:34.399
we're planning to have what I'll call a workshop. Where

01:43:34.409 --> 01:43:39.039
we can get input from stakeholders to see uh and ensure

01:43:39.048 --> 01:43:42.289
that, that we're not missing anything that uh the projects

01:43:42.298 --> 01:43:44.189
that we kind of have paired together are congruent

01:43:44.289 --> 01:43:46.659
So we get their input as well as we move forward. I

01:43:46.708 --> 01:43:48.680
think that's great. Bringing stakeholders in to get

01:43:48.689 --> 01:43:50.399
their opinion. Thanks, me too.

01:43:53.560 --> 01:43:56.878
That's it. All right. Uh I don't have anything on Items

01:43:56.890 --> 01:44:04.208
42 and um excuse me. Uh Items 44 and 45 were consented.

01:44:04.430 --> 01:44:10.829
(item:46:Chairwoman Jackson on memo providing a summary of the 88th Legislative) Next up is Item No. 46, Project No. 55156. Jess

01:44:10.838 --> 01:44:14.119
filed a memo providing a summary of the 88th Legislative

01:44:14.128 --> 01:44:18.329
Session. Uh could you come up and briefly lay out your

01:44:18.338 --> 01:44:20.180
memo? Thank you.

01:44:23.020 --> 01:44:25.418
(item:46:Jess Heck on memo providing a summary of the 88th Legislative) Jess Heck, Director of Government Relations here at

01:44:25.430 --> 01:44:27.949
the PUC. Thank you all for having me this morning.

01:44:30.359 --> 01:44:34.560
Ok. I'm gonna read some prepared remarks. Um, good

01:44:34.569 --> 01:44:36.918
morning Commissioners. Thank you for the opportunity

01:44:36.930 --> 01:44:40.329
to briefly discuss my memo summarizing the 88th Legislative

01:44:40.338 --> 01:44:44.048
session. It was filed last Thursday in Project No.

01:44:44.060 --> 01:44:49.189
55156. I wanna begin by congratulating Interim Chair

01:44:49.199 --> 01:44:51.668
Kathleen Jackson for her unanimous confirmation by

01:44:51.680 --> 01:44:55.899
the Texas Senate. this past Session. On a high level,

01:44:55.909 --> 01:44:59.649
there were 8046 Bills filed this Legislative Session.

01:44:59.878 --> 01:45:04.060
490 with potential impacts on the Commission's operations

01:45:04.069 --> 01:45:09.289
and regulated entities. Of the 490 agency relevant Bills

01:45:09.298 --> 01:45:13.418
72 passed into law, the larger theme of these Bills

01:45:13.430 --> 01:45:17.000
was the streamlining of agency processes and modification

01:45:17.199 --> 01:45:20.619
of the Commission's statutory authority. Including additional

01:45:20.628 --> 01:45:22.739
parameters on a market design program.

01:45:24.359 --> 01:45:28.149
This was a historic budget session for the PUC while

01:45:28.159 --> 01:45:30.869
the Commission maintained its same base appropriation

01:45:31.009 --> 01:45:34.859
as last biennium of 42.6 million. There was an addition

01:45:34.869 --> 01:45:38.239
of 19 million exceptional items. These exceptional

01:45:38.250 --> 01:45:41.750
items had much needed personnel and retention to address

01:45:41.759 --> 01:45:44.989
the agency's existing work Load, expand the Office

01:45:45.000 --> 01:45:47.739
of Public Engagement and increase efforts around market

01:45:47.750 --> 01:45:50.430
data analysis and energy efficiency.

01:45:53.640 --> 01:45:57.000
In the PUCs Biannual agency report released in January

01:45:57.009 --> 01:46:01.270
of 2023. The Commission approved six legislative recommendations

01:46:01.548 --> 01:46:04.409
of those six recommendations. Four were signed into

01:46:04.418 --> 01:46:07.609
law including the authority for the PUC to conduct

01:46:07.619 --> 01:46:10.579
background checks on their personnel, registration

01:46:10.588 --> 01:46:13.770
of virtual currency, mining facilities, parameters

01:46:13.779 --> 01:46:16.259
and customer protections for aggregate distributed

01:46:16.270 --> 01:46:19.668
energy resources and the bolstering of the Texas electricity

01:46:19.680 --> 01:46:23.600
supply chain map. The PUC also went through sunset

01:46:23.609 --> 01:46:26.039
this Session the 3rd time the agency has gone through

01:46:26.048 --> 01:46:32.140
sunset since 2010. HB1500 extended the PUC ERCOT and

01:46:32.149 --> 01:46:37.069
OPEC for six years through 2029. On a high level, the sunset

01:46:37.079 --> 01:46:39.708
bill reflects agency governance and organizational

01:46:39.720 --> 01:46:43.659
best practices, electricity and water reforms, improvements

01:46:43.668 --> 01:46:46.890
to public communication and enhanced contract and data

01:46:46.899 --> 01:46:49.838
management practices. Also included our guard rails

01:46:49.850 --> 01:46:51.338
on a market design program.

01:46:52.918 --> 01:46:57.060
Other Legislation of note includes SB2627 and SJR

01:46:57.378 --> 01:47:00.949
93 creating a low interest loan program to support

01:47:00.958 --> 01:47:04.729
the construction maintenance, modernization and operation

01:47:04.789 --> 01:47:07.759
of electric generating facilities. And the creation

01:47:07.770 --> 01:47:12.259
of the Texas Energy Fund. I conclude my memo by discussing

01:47:12.270 --> 01:47:15.229
additional Legislation on matters under the Commission's

01:47:15.239 --> 01:47:18.369
authority, although not exhaustive. The list reflects

01:47:18.378 --> 01:47:20.970
key Legislation relating to the Commission and its

01:47:20.979 --> 01:47:24.869
regulated entities. Next steps, the agency's focus

01:47:24.878 --> 01:47:27.899
turns to rulemakings as discussed earlier. The GR

01:47:27.909 --> 01:47:31.418
team will be providing consistent updates to the Legislature

01:47:31.479 --> 01:47:34.378
and future implementation updates will be filed in

01:47:34.390 --> 01:47:39.069
Project No. 55156. I'd like to end by thanking the

01:47:39.079 --> 01:47:41.298
Commission leadership and Staff for their tireless

01:47:41.310 --> 01:47:44.798
efforts this Session. Specifically Thomas Gleeson, Connie

01:47:44.810 --> 01:47:48.180
Corona, Maddie Heath, Carol Maxwell and Brooke Comet. I'd

01:47:48.189 --> 01:47:50.869
also like to thank our division leaders many working

01:47:50.878 --> 01:47:53.529
late nights and weekends attending and monitoring hearings

01:47:53.810 --> 01:47:57.208
doing bill analysis and answering questions. Harika Basaran

01:47:58.088 --> 01:48:02.319
Tammy Benter, Chuck Bonderate, Chris Burch, Barksdale English,

01:48:02.329 --> 01:48:06.338
Casey Feldman, Terse Harris, Darryl Tegen, Jay Stone,

01:48:06.350 --> 01:48:10.899
Mariah Benson, Seely Eves and Floyd Walker. We appreciate

01:48:10.909 --> 01:48:13.579
your commitment to the mission of the PUC to protect

01:48:13.588 --> 01:48:16.869
customers, foster competition and promote high quality

01:48:16.878 --> 01:48:21.000
infrastructure. I'm happy to answer my questions. Thank

01:48:21.009 --> 01:48:24.140
you. I'm sure I'd just like to say, uh I'm not that

01:48:24.149 --> 01:48:26.600
old. (item:46:Commissioner McAdams thank you to Staff) But I've watched a few Sessions and that was one

01:48:26.609 --> 01:48:27.939
for the books. Uh

01:48:29.479 --> 01:48:35.009
and uh kudos to Staff. Um you know, worked extremely

01:48:35.020 --> 01:48:39.970
hard and um a lot to track a lot to deal with

01:48:39.979 --> 01:48:44.378
and a lot to implement now. But um this agency couldn't

01:48:44.390 --> 01:48:47.560
have done it without the competence and uh energy for

01:48:47.569 --> 01:48:50.939
which you put into it. And I just wanna say how much

01:48:50.949 --> 01:48:53.850
uh I for one and I believe the, the Commissioners,

01:48:53.859 --> 01:48:57.609
how much. We appreciate that and um, thank you for

01:48:57.619 --> 01:49:01.259
the work. Thank y'all. We appreciate it. (item:46:Commissioner Glotfelty's thanks to Staff) I, I would say

01:49:01.270 --> 01:49:04.239
the same thing. Um, you know, having been in this uh

01:49:04.250 --> 01:49:07.640
fish bowl uh of the Legislative Session a long, long

01:49:07.649 --> 01:49:10.239
time ago. It was kind of nice keeping my head down.

01:49:10.479 --> 01:49:14.548
Um, but we, uh we had great folks there, so I appreciate

01:49:14.560 --> 01:49:16.619
the time and effort. You all took a lot of time away

01:49:16.628 --> 01:49:19.418
from your families. Uh which is required in this role

01:49:19.430 --> 01:49:23.918
at that time every two years. And um, um while we didn't

01:49:23.930 --> 01:49:25.750
know what was going to happen until the very end, we

01:49:25.759 --> 01:49:28.359
we now know the direction. And we've got a lot of work

01:49:28.369 --> 01:49:30.949
to do. So, thank you for the time and effort that you

01:49:30.958 --> 01:49:34.229
all took to, to work on behalf of the Staff uh to

01:49:34.239 --> 01:49:39.310
help the Staff to advocate for the Staff and for this

01:49:39.319 --> 01:49:42.829
agency. Thank you. (item:46:Chairwoman Jackson's thanks to Staff)  Just echo what they said, a great

01:49:42.838 --> 01:49:47.009
job and of course, so important moving forward that

01:49:47.020 --> 01:49:49.259
as you mentioned, we keep the Legislature informed.

01:49:49.628 --> 01:49:52.838
Uh We have our direction as we get every two years

01:49:52.989 --> 01:49:57.159
and a monumental task before us. But one that is so

01:49:57.418 --> 01:50:01.039
you know, vitally, um important, you know, for each

01:50:01.048 --> 01:50:04.418
and every Texan and so, um I know as a Commissioner

01:50:04.739 --> 01:50:08.359
um I'm very honored to, to have the opportunity to

01:50:08.369 --> 01:50:12.409
work with such a tremendous and talented, uh energetic

01:50:12.418 --> 01:50:15.958
Staff. Uh who is, is thinking about this each and every

01:50:15.970 --> 01:50:20.449
day. And so it is in many ways a marathon and we

01:50:20.458 --> 01:50:23.628
will cross the finish line and we will along the way

01:50:23.923 --> 01:50:26.574
out and get those little cups of water as we run past.

01:50:26.583 --> 01:50:30.864
But, uh, we've got the end goal, uh, you know, uh ahead

01:50:30.875 --> 01:50:34.524
of us and, uh, everybody has kind of like the eye on

01:50:34.534 --> 01:50:36.784
the goal and we're all working towards the same thing.

01:50:36.793 --> 01:50:38.904
So I just want to thank the Commissioners for your

01:50:38.914 --> 01:50:40.645
engagement throughout the Session. We appreciate all

01:50:40.654 --> 01:50:42.564
your input and guidance. So thank you all for your

01:50:42.574 --> 01:50:45.659
help. And Commissioners one thing, I'll add to Jess'

01:50:45.668 --> 01:50:48.289
memo one bit of information. So we spent a lot of the

01:50:48.298 --> 01:50:50.838
Session, especially in finance and appropriations talking

01:50:50.850 --> 01:50:54.039
about the need for new resources uh because we were

01:50:54.048 --> 01:50:57.189
engaged in, you know, mid 20s, uh number of rule

01:50:57.199 --> 01:51:00.259
making and project. Which is about three times what

01:51:00.270 --> 01:51:03.489
we normally do in an interim. And by David's calculation

01:51:03.500 --> 01:51:06.168
we're looking at mid 30s to low 40s this time.

01:51:06.180 --> 01:51:09.168
So you've exceeded the number from last the last. Yes

01:51:09.180 --> 01:51:12.430
Yes, sir. By quite a bit. So just, just for your context

01:51:12.439 --> 01:51:16.259
a lot of work ahead of us. Yeah, it's not a threat

01:51:16.270 --> 01:51:17.159
It's a promise.

01:51:19.329 --> 01:51:23.060
The David Smeltzer Full Employment Act, I think. 

01:51:24.189 --> 01:51:25.159
And he needs it.

01:51:26.869 --> 01:51:32.140
Okay. I don't have anything for Item 47 or the remainder

01:51:32.149 --> 01:51:37.569
of the Agenda. Um there is nothing for closed session.

01:51:37.579 --> 01:51:39.949
(item:28:Chairwoman Jackson adjourns meeting) There being no further business to come before the

01:51:39.958 --> 01:51:42.789
Commission. This meeting of the Public Utility Commission

01:51:42.798 --> 01:51:47.418
of Texas is hereby adjourned at 11:28 a.m.