(item:0.1:Chairwoman Jackson calls meeting to order) Good morning. This meeting of the Public Utility Commission
of Texas will come to order. To consider matters that
have been duly posted with the Secretary of State for
June 29, 2023. For the record, my name is Kathleen Jackson
and I'm joined by Will McAdams and Jimmy Glotfelty.
Commissioner Lake and Commissioner Cobos are out today,
due to personal matters. (item:0.1:Chairwoman Jackson asks for motion to excuse Commissioners Lake and Cobos) I would like to entertain
a motion to excuse their absence. So moved. Second. We have a motion
and a second. All in favor, say aye. Aye. Motion passes.
Sheila, could you please walk us through the Consent
Items on today's Agenda? Yes. Good morning Commissioners.
By individual ballot, the following items were placed
on your Consent Agenda. Items 4-6, 8, 10-
12, 14-25, 35, 44 and 45.
(item:0.1:Chairwoman Jackson asks for motion to approve items on Consent Agenda) I will entertain a motion to approve the items just
described by Sheila.
So moved. Second. I have a motion and a second. All in favor, say aye.
Aye. Motion passes. Additionally, Item No. 28 will not
be taken up.
(item:1:Chairwoman Jackson lays out instructions for public comment) Let's begin with Item No. 1, Public Comment. Oral
comments related to a specific Agenda Item will be
heard when the item is taken up. This is for general
comments. When we get to oral arguments on specific
Items, stakeholders should not approach the table unless
oral argument has been granted or they have been invited
by a Commissioner. Speakers will be limited to 3
minutes each. Sheila, do we have anyone from the public
signed up to speak? Yes, ma'am. We have one person
that signed up to speak, Cyrus Reed.
(silence)
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
of the Sierra Club. Uh first of all, congratulations
on uh I guess the interim appointment. But uh good
choice and uh thank you for all your work and your
service. And like to thank he's not here, but uh former
Chairman Lake for his service as well. Um my comments
actually relate to one of the agenda items, but I'll
be very, very brief. Which is Item 43 rulemaking calendar.
I just wanted to remind you you're not going to be
surprised by this. That the blueprint you passed had
two items on the demand side. Uh one of them was to
look at notal pricing and that is being done at ERCOT.
The other was to examine the efficiency programs of
the 8 private utilities. And, you know, we had
a very robust stakeholder group. But I don't see it
on the calendar yet. Uh and the utilities are already
putting in their 2024 plans and their EECRFs. So I
just wanted to remind the Commission that there's no
time like the present with this heat wave. To take up
getting more efficient and hopefully more robust programs
for demand response, energy efficiency. And also a
reminder that there was actually a Bill the Governor
didn't veto. Which was SB1699 which deals with aggregated
distributed energy resources. But it also includes
a little bit of a um a little, a little push towards
you guys for residential demand response, as part of
that Bill. That needs to be implemented through rulemaking.
I don't see it on the calendar. I know it's early. Legislature
just met, but I just want to remind you of those two
facts. Review of energy efficiency, what we can do
to make them better and also that Bill. So that's all
I had and with that, I'll be quiet. Happy to answer
any questions.
Very good. Thanks Cyrus. Thank you. Thanks so much for being here.
Next up is Item No. 2. Sheila, will you lay out
this item? Yes, ma'am. (item:2:Application of Texas Water Utilities, LP for pass through gallonage charge) Item No. 2 is Docket No.
49242. This is the application of Texas Water Utilities,
LP for a pass through gallonage charge. A revised proposed
order was filed on June 1 and Commissioner Glotfelty
filed a memo. Very good. Would you like to lay out
your memo, please? Yes, it's very, very important.
(item:2:Commissioner Glotfelty lays out his memo) Um uh first of all I, I uh support the revised
proposed order with a few changes that are associated
in my memo. There are technical cleanups. Uh, two of
them deal with uh, ordering paragraphs. One of them
deals with a conclusion of law. Um, they're fairly
self-explanatory. But uh, if you would all like to
get into the discussion, happy to. Otherwise I make
a motion to uh approve them, um with the changes
consistent with my memo. Yeah, uh. (item:2:Commissioner McAdams’ thoughts on Commissioner Glotfelty's memo) Madam Chair I,
I agree with uh, the suggested changes in the memo.
I appreciate the Commissioner filing the memo. I believe
it helps move this case along. And uh and, and I would
second the motion. To approve the revised proposed
order consistent with the Commissioner Glotfelty's memo.
(item:2:Motion to approve revised proposed order concerning memo) Well, very good. We have a motion and a second. All in
favor, say aye. Aye. Motion passes.
Next up is Item No. 3. Sheila, will you lay
out this item? Yes. (item:3:Complaint of Jeff Connors against Gallery Apartments, Roscoe Property Mgmt & Conservice) Item 3 is Docket No. 51619.
The complaint of Jeff Connors against the Gallery Apartments,
Roscoe Property Management, and Conservice. A proposal
for decision was filed on May 15. Mr. Connors, the
Gallery Apartments and Roscoe Property filed exceptions
to the PFD. The SOAH ALJ filed changes to the PFD
on June 20. And in this proceeding, Chairman Jackson
filed the memo. And also we had the Commission Counsel
memo that was filed with proposed changes to the order.
(item:3:Chairwoman Jackson lays out her memo) I did file a memo. Here, the SOAH ALJ found that the
evidence indicates that some tenants, in addition to
Mr. Connors were overbilled. The PFD gives The Gallery,
the option to choose between filing a compliance report
to address the overbilling. Or documentation to show
that it no longer owns the apartment in question. Instead
I recommend that the Commission reject this order and
paragraph. And add a conclusion of law requiring the
gallery to comply with Commission rules, regarding overbilling.
Finally, I recommend that this matter be referred to
Compliance and Enforcement Staff. To conduct an investigation
as laid out in my memo. Do you have any additional
thoughts on this one? No, I appreciate the sentiments
in the memo.
(item:3:Motion to adopt PFD and refer to Enforcement, as per memo) So, uh with that Madam Chair. I would move to adopt
the PFD and refer the matter to Enforcement uh consistent
with your memo. Second. I have a motion and a second. All in
favor, say aye. Aye. Motion passes.
Can we go back to that for just a moment? Did you
include the, you said the Commission Counsel's memo,
Is that right? And, and the Commission Counsel
memo, yes. Did you see that part of that? Ok, great. We've
got that. All right. I'll look at Steven and see if
we need to vote again. But I think we've got all the
options, all the elements for that. All right.
Items 4, 5 and 6 were consented. Next up is Item No.
7., Sheila, will you lay out this Item? Yes. (item:4:Application of Aqua Texas & Southern Oaks Water Supply STM) Item
4 is Docket No. 54341. This is the Application
of Aqua Texas and Southern Oaks Water Supply for the
sale, transfer or merger of facilities and certificate
rights in Navarro and Freestone counties. And for dual
certification with Winkler Water Supply Corporation.
We have two proposed interim orders that were filed
on June 1. And in this proceeding, Commissioner McAdams
filed a memo and we also have a Commission Counsel
memo that was filed with proposed changes to the order.
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
there are through. Uh as stated, there are two proposed
interim orders before the Commission in this proceeding.
Uh I recommend in this instance, the Commission approve
the proposed interim order that does not address fair
market value or, or initial rate approval. And this
is because Aqua has shown the financial managerial
and technical ability or wherewithal. To operate Forest
Grove's system. The lack of capital, of a capital improvement
plan. In my view, should not prevent the Commission from
authorizing the sale to proceed in this instance. However,
a capital improvements plan that fully complies with
the statutory and rule requirements must be filed. Before
the Commission will issue the final order in this proceeding.
Fair market value should not be addressed in this interim
order, because its determination is formulated. And is
not related to the Commission's decision of whether
a public hearing is necessary. And similarly, it would
it would be premature and unnecessary to address the
initial rate approval in this interim order. The Commission
will set rates for Aqua to charge customers in the certificated
service area. It is acquiring when the commission, Commission
issues its final order in this proceeding. Ultimately
approving the transaction and rates should not be set
before then. Um the only substantive changes to the
proposed interim order that I recommend. Uh besides
those set forth in the Commission Counsel memo filed
on June 19, 2023. Consistent with replacing ordering
Paragraph 5 with the language laid out in my memo.
Um now I'll entertain any discussion Madam Chair or I
have a motion for you. We're ready for a motion. Great.
(item:7:Motion to approve proposed interim order with modifications set from memos) Uh therefore, I move to approve the proposed interim
order that does not address fair market value or initial
rate approval. Consistent with the modifications set
forth in Commission Counsel memo and my memo.
Do I have a second? Second. All in favor, say aye. Aye. Motion passes.
Item 8 was consented. I don't have anything on
Item 9.
Unless y'all do? No ma'am. Uh Items 10, 11 and 12 were consented. Next up is Item
No. 13. Sheila, will you lay out this item? Yes.
(item:13:Complaint of Joe Hunsinger against Highland Park Investment Partners, LLC) Item 13 is Docket No. 54370. This is the complaint
of Joe Hunsinger against Highland Park Investment Partners,
LLC. A proposal for decision was filed on May 12
and Commission Counsel memo was filed. Recommending
changes to the order.
Any thoughts on this one? No, I'm good. (item:13:Commissioner McAdams' thoughts on complaint) Madam Chair I, I had something
on it. Um I, I didn't consent this one because I wanted
to just say a few words, and frankly to Mr. Hunsinger. Just
to demonstrate um that his uh, his petition is well
taken. Um and I wanted to offer some comments, uh
so that he'd know we're listening. Um, I believe dismissal
is appropriate uh in this instance. Because the Commission
cannot award monetary damages. Um, and on a formal
complaint that is not the right vehicle for these issues.
However, I believe once we act here Mr. Hunsinger's
filings can be forwarded to the Commission's division
of Compliance and Enforcement. I also believe that
OPDM or Enforcement. May want to reopen the project as
a home for the relevant files in this matter. (item:13:Motion to adopt PFD as modified per memo) Uh having
said that, I believe and would offer a motion to adopt
the PFD as modified by the Commission Counsel memo,
and dismiss the case with prejudice. For failing to
state a claim for which relief may be granted and for
other good cause shown. And ultimately, I believe that
by doing this uh our Staff, appropriate Staff divisions.
Can take a look at this consistent with Commission
Counsel memo. And uh, and potentially provide uh resolution
to the case presented by Mr. Hunsinger. But I look forward
to hearing updates in the future on it.
I was just wondering who didn't consent this. I did.
Well, I know. You know I, I just want to let people
know we're. They, they don't understand when we dismiss
with prejudice. You know, they think we just poured
them out and that's not necessarily the case. And, and
the Commission Staff can continue to try to um follow
the trail, and see what's wrong. Well, I appreciate
your views. And I and uh I appreciate uh, the Commission
Counsel memo. And, and uh what you laid out and support
that. And would move that we pass that. So you have
a motion?
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
aye. Aye. Motion passes. And before we go to the next item,
let me just clarify just for procedural purposes.
When you mentioned reopening a project, but you mean
open you do. Are you talking about opening a new project
as a repository for any of these types of filings going
forward? So that is my, yes. That is a part of that,
uh the mechanics. Because I believe we'll see more of
these in the future. And clearly we need some sort of
uh repository. Where Staff can find these and start
doing their own due diligence on the complaint.
Got it. Items 14-25 were consented. I don't have
anything on Item No. 26. I do not either. Next up is Item No.
27. Uh Sheila, will you lay out this item? Certainly.
(item:27:Application of CenterPoint Energy Houston to amend its distribution cost recovery factor) Item 27 is Docket No. 53442. This is the application
of CenterPoint Energy Houston Electric, LLC for approval
to amend its distribution cost recovery factor. Before
you are two motions for rehearing that were filed on
June 19. The first motion for rehearing was filed
jointly by the Texas Energy Association for Marketers
and the Alliance for Retail Markets. And the 2nd
motion for rehearing was filed by Texas Competitive
Power Advocates. I think we need a little more time
to evaluate the motions for rehearing on this one.
(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.
Um, do y'all have any thoughts on that? Add to the maximum
extent uh afforded by law? Yes. I would support that. Yes ma'am,
I would second. Uh I would make the motion, if there's
a second. I'll second. Great. Okay, so we have a motion to extend the time
to act on the motions for rehearing to the maximum
extent permitted by law. And we have a second? Yes. All in
favor, say aye. Aye. Motion passes.
Item No. 28 is not going to be taken up. Next up
is Item No. 29. Sheila, will you lay out this item?
(item:29:Application of SWEPCO to update its transmission cost recovery factor) Item 29 is Docket No. 54040. The application of
SWEPCO to update its transmission cost recovery factor.
The proposed order was filed on June 9, and on June
19, Commission Staff filed proposed corrections. And
on the same date, Commission counsel filed proposed
changes to the order.
(item:29:Commissioner Glotfelty's thoughts on application) Um y'all, I have a uh a question on this one. So
uh this deals with um our favorite issue. My favorite
issue of vegetation management. There is a discussion
within this docket, about $8 million in vegetation
management costs. That were initially included and then
removed um by, uh by the applicant, um in this proceeding.
Um because there was a, because vegetation management
is not allowed to be a capital expense. It is primarily
considered an operation and maintenance expense. However
that's not always the case. And there are two discrepancies
here. One of them is when you're building a new line
you're riding a widening a right of way or upgrading
a facility. If you need a right or right of way per
a uh National Electrical Safety Code. Then that can
be considered as a capital cost, as you are building
a new facility. Um there is not much evidence in this
uh docket. That explains the reason for that uh for
those uh the $8 million. So um in addition, this docket
is um, that the TCRF says that accounts, FERC accounts
350 to 359 are the expenses. That are, are the capital
costs that are eligible for recovery in the TCRF. These
$8 million were included in account 352. Which would
seem to be recoverable. So um, my concern is vegetation
management is hard. Vegetation management is a real
pain for uh for utilities and, you know, landowners.
But utilities ought to be given the right to put vegetation
management in their capital costs, if they are doing
certain activities. And that is building new lines
or upgrading existing lines. So what I would suggest
what I would hope. Is that we could remand this order
um uh, remand this docket for further processing. To
confirm whether the appropriate removal of all of SWEPCO's
vegetation management costs from the TCRF, TCRF
uh calculation are appropriate. Or should they be
reincluded, because they were part of capital costs for
new facilities? Sounds reasonable to me. So you would
remand that as a uh briefing question? Yes. Uh, yeah.
Okay. Perhaps our legal briefing, perhaps. To perhaps what
you're describing sounds like it would remand it for additional
information from the parties. Yeah, so this is pretty
unique. Um vegetation management clearly is an O and
M expense. It gets expensed, not capitalized. But there
are just certain circumstances where it's capitalized.
And if this is one of those, then the utility is afforded
the right to put it in rates. If not, then. And parties
can answer the precedential questions about historically
and under our rule. Uh the uh allow, the allowance for
recovery, um for vegetation management. Because I understand
it's well established. But I won't speak to that. I
think it'd be an interesting question to, to have response
to. Um and do we think we could have response to that
timely? To reconsider this um by the next open meeting?
I worry about the lag experience or by the 20th? Thirty days maybe?
I think it's gonna depend, you know, it's possible
that. I don't, I don't recall if other parties have
intervened in this, that may want to weigh in on this
as well. So, I think it's going to depend.
Um,
so what's the next open meeting after August or uh
after July? That's August 4th? 3rd. Yeah. So I, I would
hope by the August 4th. That's fine. Meeting we can have this back.
Right. We'll certainly endeavor to try to bring it
back to you on July 20th. And if not, we'll have that
as a fallback option. Yeah. And then they just got
hit by a storm. So we certainly wanna, don't wanna
slow, not that type of capital flow through. Okay. Do
you uh, do you have a motion? (item:29:Motion to remand this docket for further processing) So I move that, uh
we remand this docket for further processing. To confirm
whether it was appropriate to remove all SWEPCO's
vegetation management costs from the TCRF calculation.
Second. We have a motion and second. All in favor, say aye. Aye. Motion
passes.
Next up is Item No. 30. Sheila, will you lay out
this item? (item:30:Application of TNMP for an extension of rate filing) Item 30 is Docket No. 54823. This is the
application of TNMP for an extension of rate filing
requirement under 16 TAC 25.247. A proposed order was filed
on May 19, and Commission Counsel filed a memo with
proposed changes to this order as well. So do we have
any thoughts on this one? (item:30:Commissioner McAdams' thoughts on application) Uh Madam Chair, uh Commissioner Glotfelty.
I, I would have leaned toward approving the proposed
order. However before approval, um a good cause exception
to the Commission's rate review schedule rule of 16 TAC
uh 25.247, Subsection B4 should be addressed.
Um good cause exists to grant TNMP an exception
to the notice requirements. For the Commission's rate
review schedule under the rule 16 TAC 25.247, B4.
Because although TNMP does not satisfy the timing
of the notice as stated in the rule. The rule does
not address extension requests. Beyond its first extension
of the 4 year deadline um for billing base rate
proceedings. And uh and I just recommend that we grant
TNMP a good cause exception to 16 TAC 25.247. (item:30:Motion to approve modified proposed order) And
uh, and would make a motion to modify the proposed order
accordingly. We have a motion? So moved. And a second? Second. All in favor,
say aye. Aye. Motion passes.
I don't have anything on Items 31 or 32.
(item:33:Chairwoman Jackson lays out the discussion on firm fuel supply service) Uh next up is Item No. 33, Project No. 53298.
Our Wholesale Electric Market Design Implementation
Project. We're going to discuss firm fuel supply service
Phase 2 and PUC Staff filed a memo. We have uh
Harika here. To provide an overview of Staff's memo for Phase
2 program parameters to be defined. Harika, thanks for coming
up and if you would please um lay out your memo.
(item:33:Harika Basaran, with Commission Staff concerning their filed memo) Good morning, Harika Basaran with Commission Staff, Thank
you. We don't need any action today from you. This
is just to start the discussions and the memo has really
two main sections. One of them is the short term decision
you need to make by the next open meeting, for the next
phase of this program. Because ERCOT must issue direct pay by August
1. And since the parameters of this program is not
codified in the rules or protocols. The budget, the offer
cap, the duration has to be decided by PUC. So we gave
you options, what we think on those. The second section
is the more long term. Again, we don't need the decision
today. But we came up with, we identified some topics
we may need to discuss or give us guidance or homework.
For this program to be a viable, long term, sustainable
program. So in the future meetings, we also may need
more direction on that.
So I can go one by one the parameters, if you want
me too, short or not.
I, I don't need that. (item:33:Commissioner McAdams' thoughts on memo) Um first of all I,I look
forward to making a final decision at the next open
meeting. Um I believe the, the first part of kind of
what is before us is the ERCOT recommendation, as well.
Under this docket, which the Board has forwarded our
way um addressing the qualifying pipeline. And uh I
I've said it before, I'll say it again. I agree with
that. Um so I wholeheartedly endorse um that recommendation.
But we will save my motion for uh the next open meeting.
In terms of the, the parameters um that they, they
make sense to me. Uh in terms of um the condition and
and I guess covered at a high level, Harika the core
components before. Yeah, I start with the easy ones. (item:33:Harika Basaran with Commission Staff's follow-up with core components) Uh obligation
period, we still think 48 hours to keep it for the next
period. However, as you may know, gas markets are closed
for 4-5 days. So in the future, it may look to look
into allocate between 48 hours, 72 hours based on the
risk. But for this one, keep 48 hours. The second one
budget, we think that keep the current $54 million. Because
this is really important for the Load serving entities.
How have to serve 30 day notice is how much this program will
cost regardless. The 3rd one is the offer cap. The
1st Phase, the Offer Cap Phase was based on the fuel
oil price and 15 heat rate. However, the fuel oil prices
came down dramatically from $25 MMBtu to $12. And the reason
we still think a cap is necessary based on the ERCOT survey.
Unfortunately even Phase 2, the extra additional
new capacity with the gas pipeline is around 500 Megawatt.
So we still think this is not really a liquid market
So a cap. And the more difficult one is ready procurement
quantity there. We may need more guidance from you.
Madam Chair I, I don't wanna create any uh gray
area for a lot of debate and argument. But I would
be curious um would Carrie Bivens, the Independent Market Monitor.
Have any thoughts on the parameters proposed by Staff?
So we could consider that over the next 3 weeks
before the next open meeting? May we invite her up?
Yes, because I believe she has been working on this
as well. Definitely we consulted with her, but she's here.
(item:33:Carrie Bivens with Potomac Economics, confirming parameters) Good morning. Uh Carrie Bivens with Potomac Economics.
Uh we have been working with Commission Staff and have
seen uh the memo book prior to being filed. And
agree with the the parameters that Harika laid out. (item:33:Commissioner McAdams question for Carrie Bivens) Carrie
in, in terms of the parameters. Is there any one component
that's more important to you than the others? Uh look
my first blush is kind of the cost gap. It appears
to be that that ultimate uh constraint. In terms of
containing mission creep or an undue expansion of the
program. To where we're basically I mean, it basically
just becomes a capacity payment because that's not
what we're doing here. We're gonna get what we pay
for um and the market bids into that. And then ultimately
that price will either be very lucrative for a very
few resources that can qualify or not as lucrative
if the majority of the market can bid in and qualify
for it. Is that your view or? (item:33:Carrie Bivens response to Commissioner McAdams) Yeah, I think it's helpful
to have both the offer cap and the budget cap. Um I
think that
it, there's probably that will need to continue to
be evaluated. Just because if we're basing it based
on the fuel oil prices, those are gonna fluctuate.
Um the 15 heat rate is um on the generous side. But
there is risk of providing the service with compliance
uh requirements and also with the risk of getting claw
back. If you um, aren't available during the, the times
in which they call for the service or the, they possibly
might call for the service. And so, um we need to have
a little bit of, of wiggle room in there for that
for that risk to be priced in. And does Staff have a
view on kind of that clawback provision? Because I know
that that's become somewhat of an observable, observable
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
to have performance criteria. And if you don't, if
you're not available during the watch period, you will
get claw back. That's why I think it makes sense like
Carrie said to have a little bit higher over cap. It's a big
compliance risk as we seen in the first deployments.
Okay. Like $52 million, $26 million was clawbacked. Right. Almost half of it, so.
Okay.
Any other thoughts?
Um.
(item:33:Carrie Bivens follow-up to Commissioner McAdams question) No, I think I just would echo what Harika said about the procurement
quantity. I think that's still a big open question.
Um with the lower offer cap and keeping the budget
the same. You have the opportunity to get many more
megawatts if they are offered in. Um, and, you know
I think that's a, a policy call for the Commission
to make. Okay.
(item:33:Commissioner McAdams additional thoughts on the policy) I'm good for right now. I look forward to discussing
this offline uh, with you over the next 3 weeks.
And then uh getting hopefully uh, Commissioner Cobos
back. Because I know she's got great thoughts on the
on the policy uh, before the 20th. (item:33:Commissioner Glotfelty's thoughts on the memo) Yeah I, I mean.
I, I think the memo does a good job of, of laying
out the issues the uh proposed positions. Uh which
I think are extremely reasonable. I think from the
very beginning, we said this uh firm fuel was gonna
be a work in progress. Uh you know, we've gone through
Phase 1, we're going through Phase 2. And we're
gonna have uh a few more phases where we get to tweak
this. To ensure that uh Texas consumers get what they,
what they are expecting. So I'm for it. Great, so. Very good.
Well Harika, thank you uh for working uh with the IMM
on this. And uh so let's plan on bringing this back
up finalizing at the next open meeting on July 20.
(item:33:Commissioner McAdams encourages stakeholder community) May I add one thing, Madam Chairman? I encourage the
stakeholder community to make filings in response to
Staff's proposal. Preferably well before the next open
meeting and not 12 hours prior.
Yeah, I appreciate that. Thank you. Thank you. Thank
you.
(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
we're going to discuss the temperature standard preparing
for Winter weather wind chill. ERCOT submitted a filing
and Commissioner McAdams has filed a memo. Will you please
lay out your memo? (item:34:Commissioner McAdams lays out his memo) Thank you, Madam Chairman. Uh my memo was perhaps too
simple um on a policy that is not simple. Um I filed the
a memo basically that said uh, that I believe. We should
affirm um that ERCOT is on the right path on weatherization.
But uh it is a complex topic. One, it is technical
in nature and two words carry great weight. Uh when
you're dealing with the the technicality of uh attributed
to the policy. Um issues surrounding dry bold and ambient
temperature uh have certainly arisen. Um and concerns
over the last 12 hours have arisen. Not necessarily
through filings but certainly discussions that have
made their way to our office and I believe other offices,
as well. And those concerns are well taken. It I, I
believe there's a certain amount of fear that is um
not appropriately justified. Um that can be worked
through as we look at the language of the filing. And
um Madam Chair, just for so we can have some substantive
discussion. I, I believe we should not act on this
today um because of the concerns raised. I believe
there's still work to be done on clarifying language
that we could achieve in ERCOT's filed framework. And
um especially as it relates to the table and what is
uh involved in the table of, of the filing. At a high
level as my last year's memo indicated. I believe we
need a clear standard that it, that does um account
for wind chill and the effect of wind chill in the
standard. But it needs to be uh a number
that uh on a zonal basis. That facilities can look to
and thus begin planning their mitigation strategies
around and it needs to be unambiguous. And um
just like everyone you can read a three page document,
and everybody may have a different take. And so when
I crafted my memo, I looked at certain sections and
sentences and I'm like eureka, they captured me. Um
and, and this is what we need. Uh and then the generator
community has read it and they see significant problems.
And there is something to be said about the enforceability
of the policy that that is uh envisioned in the document.
And so with that Madam Chair, if you'll entertain it
just for a couple of minutes. May I uh invite Woody
Rickerson from ERCOT and possibly Barksdale English.
Just to talk through the themes in the filed version.
That may be uh better clarified uh over the coming
weeks.
Good morning, Woody. Good morning Barksdale. Um and
as I ask questions, please identify yourself for
the record. Um
all right, Woody. I'm gonna ask you a broad question.
Um
what's in that table in this filing? Okay. (item:34:Woody Rickerson with ERCOT, responds to Commissioner McAdams question) Uh Woody Rickerson
with ERCOT. And pull that mic close so everybody can
hear you, please. So what's in that table?
So the table is calculated based on um.
If you look at all the weather data we have available
for a particular area, particular weather zones, that
hourly data. And you look at what the temperature and
the wind chill is on an hourly basis. And you string
all that data out from the very first one, hourly all
the way to the most recent one. And you have this long
string of data. Now, imagine a 72 hour window that
slides up and down that data. And it looks for the
minimum average temperature, which would include wind chill.
Because we're looking at wind chill data here. (item:34:Commissoner McAdams question for Woody Rickerson) And so
when you say the minimum average temperature. And I'm
gonna engage with you, just to try and pull facts forward. Sure. Is that
an ambient temperature? No. What are we calling that? Okay.
(item:34:Woody Rickerson's response to question) So this, this string of, of temperatures has wind
chill associated with it. So we're looking at a string
of hourly wind chill temperatures for a weather zone.
And now we're gonna take a 72 hour window and we're
gonna slide it up and down and try to find the minimum
in that. And when we find that minimum, we're gonna
throw that one out because that would be like the 99th
percentile. And then we're gonna slide it again and
try to find the next coldest 72 hour average. And we'll
keep throwing those out till we get down to the 95th
percentile. The 95th percentile average wind chill
temperature for that weather zone. And that's what's
in
the table. (item:34:Commissioner McAdams question on ambient temperature and dry bulb) So, explain the distinction between ambient
temperature and dry bulb and the interplay that's in
that table? Well, the dry bulb temperature would be
without any wind and it would be a higher temperature
if there's wind. And so wind speed will decrease that
temperature. And so this string of numbers we're looking
at already encompasses a
ambient or dry bulb temperature and a wind speed at
that time, that occurred at that time. So maybe the
the minimum 72 hour average was in 1960. And so that
would be the wind that occurred on that date in,
on during those hours in 1960, plus the temperature.
So that the wind speed is incorporated already in that
number that appears in the table.
Um so do, do you have the, the filing in front of
you? Do you have that? I have our filing. Great. That's
what I'm talking about. Okay. Page 2 below the table,
first sentence.
Sorry, I don't have that one. I have the other one in front of
me here. Barksdale slide it over to him. Appreciate it. Page
2. Okay. First sentence after the table. ERCOT interprets
the rule to refer to the temperatures in the table
as ambient, dry bulb temperatures, not as wind
chill values. That could be calculated through myriad
combinations of wind speed and ambient temperature
values. Right. Okay.
I am trying to um square a circle with that sentence
and then down to the last sentence of the paragraph.
Where it says that is by incorporating some of the
effects of wind into a temperature standard. The adopted
standard provides a single temperature serving as a
reasonable proxy. For a combination of low temperatures
and associated wind speeds observed in each weather
zone. Over a 72 hour period without incorporating all
of the combinations of temperature and wind speed as
the actual standard. Right. So help me tie that first sentence
and that last sentence together. Okay. (item:34:Woody Rickerson responds to question on table) So the, the table
has two purposes. The table, the first purpose is for
the weatherization declarations. So the preparation,
the preparation. The second purpose of the table
is when enforcement actions would occur. During first
of all, it would have to be an EEA and you
and the unit in question would have to have a forced
outage that's weather related. So you've got those
two sides that the table is used in. So let's talk
about the first one. The first one is for the weatherization
declaration. So how should a resource apply this number
when they get ready to do their weatherization declaration?
And so what we've expected resources to do and it wasn't
spelled out very well. But what we would expect a resource
to do is to tell us that. Let's say that they're in
the they're in the uh the, the east zone and the number
says 4.4.
So we would expect a resource to tell us that we weatherize.
Our weatherization program looks at 10 degrees and
20 miles an hour.
And if you plug those two numbers into the NOAA equation
it will give you a single number. And if that single
number is equal to or less than the number in the table
then we expect that that weatherization declaration,
adequately predict the reliability. And that's a reasonable
expectation for reliability. So that's the, that's
on the preparation side.
And that part maybe wasn't very clear. Because I think
resources were thinking they have to take this number
and then apply their own wind speed. Which is going
to take it even further down. That is correct. They
have asserted that. So our expectation was not that.
Our expectation was that the resources would take the
combination of a temperature and a wind speed. The
two of those together would be equal to or less than
what we put in the table for the 72 hour, 95th percentile
windshield average. But the table is the controlling policy
driver. That's right. The table gives the resources
a single point to tune their weatherization declarations
too. And that's on the preparation side. Now during.
(item:34:Chairwoman Jackson's question for Woody Rickerson) So further to the preparation side. Okay. So the work
effort here is to make sure that they have the information
they need to go out and do the design work. So that
it matches with the level of protection that we feel
like is appropriate. That's right. And so is does this protocol this
method do that? Yes, ma'am, I think it will. Um I think
there was some confusion though because resources and
rightly so. Look at that number and said well, what's
the wind speed that we're supposed to put with that.
Because of the way this is written, it's hard to tell.
And I admit that it is hard to tell, I've had some
conversations with them. And so that is how we would
interpret their weatherization declaration when they
give it to us. If those two numbers, they give us.
Give us a number at or below the standard, then we
will assume that, that declaration is a reasonable uh
standard for, for reliability. And that gets to the
the core principle uh, uh of the assumption of risk,
uh correct? (item:34:Commissioner McAdams question on generator failure responsibility) And let me clarify that question. Who is
the risk of failure on? Is it on the generator or ERCOT
to have accounted for the potential, for the failure
of that generator? Because again, they know what the
likelihood of wind speeds are for that particular facility.
Because there's too many permutations of possibilities
on an individual basis on a facility by facility basis.
And so therefore, that's on them. The risk is on them
to have that accounted for and then to not fail uh
at that temperature. And thus you will not be subject
to any type of enforcement or even a remediation uh
strategy at this point. Um unless you fail under those
conditions. Right. (item:34:Chairwoman Jackson's comments on generator weatherization) As importantly, I mean. It gives us, it
gives the generators the guidance that they need to
implement the weatherization. To make sure that they
don't fail, right? It, it's giving them the guidance
they need. Because that's the whole point here is that
we want to, we want to go in and weatherize to avoid
a failure. And so we're, we're setting a standard that
we want the weatherization to occur to from a technical
engineering standpoint. That is adequate to meet our
expectation. That's right. And I think it's important
for, for resources to realize in the application of
this. That we're not expecting them to double count
wind speed. We don't expect them to count it in the
stand in the, in the table and then add another
wind chill factor on top of that. That wasn't our expectation.
Our expectation was if we refile this, could we specify
that? We certainly can. We'll, we'll make that very
clear. Now, I think the other half of the use of the
table is on the performance side. So let's use that
same example for a uh someone in the east, in the east
weather zone, where their number is 4.4. So if ERCOT
declares an EEA then that's by rule. And if that resource
in the east weather zone has a forced outage that is
weather related. They have a frozen instrumentation
have shut the plant down. Obviously, weather related
okay. If those two things happen and if the temperature
is above 4.4 degrees, then they're subject to ERCOT
coming in and asking more questions and evaluating
that outage. Now in that investigation,
if the wind is blowing 50mph. And obviously the combined
wind chill temperature would be far below 4.4. Then we'd
have to take that into consideration as well. Under
a reasonable standard. Under a reasonable standard.
But the 4.4 serves as the dry bulb, non-wind chill
temperature that a plant operator could look at. He
could see okay it's, it's 6 degrees. We still have
we're not we're, we're above the performance standard.
Or he could look at it and say it's 0 degrees. We're
now below that weather standard without worrying about
what the wind is at the moment the force outage occurs.
And that gives a very clear uh, a clear number for
plant operators to look at. And a very clear number
for ERCOT to look at on what we need to follow up
with. And which, which force outages we need to follow
up with and which ones we don't need to.
Any questions on that? Uh well, I just. Uh I, I think this needs
to be written better, quite frankly. Granted. But any
any kind of so. (item:34:Commissioner McAdams' concerns on the Winter of 2024) Let me ask you this.
In terms of uh timely implementation for the Winter
of 2024. By taking another 3 weeks to work on this
in terms of the language of the filing. Which will
be the guiding star for the industry, I believe. They
certainly indicate it will. Um, what does that do to
us for the Winter of '24? So from an ERCOT perspective, it's
not gonna be a problem. I would think you resources
would really need to tell us if that's gonna put them
at a point. Where they can't get the engineering assessments
and the materials ordered and things like that in time
for a December 1st implementation. I mean that's,
I can't answer that. But they've already been uh remediating
their facilities to the Phase 1 standards. So it'd
be a compounding effort. It would just be building
upon what they've already set up. (item:34:Woody Rickerson on rewriting file) As far as writing
clarification, I've got that on my phone right now.
I could. Don't do it right now. I mean it is, it's
easy to clarify. I think uh what I just said, we can
put in words and can easily clarify this and refile
it. So that's not gonna be an issue. Um as soon as
you guys
put a check mark on that. We'll hold workshops to make
sure we go through the formulas and everyone understands
the application. We'll talk through any of the outlying
issues and so we can schedule a workshop early or,
or late in July. And we can make sure we go through
all that kind of stuff. So we could conceivably have
all this wrapped up by
into July and have a workshop already completed. Okay.
Um.
(item:34:Commissioner Glotfelty's thoughts on clarification) Well, the one thing that I would just say is. You know
as we uh. Many years ago uh, when no compliance rules
became mandatory uh, at the very beginning. It was
uh as some would say, clear as mud on how to comply.
And over time, we have uh um made that very specific
and I think the goodwill of the companies to comply
is, is what makes that happen. Um uh you know, in this
space. A clarification is appropriate because we, we
need to ensure that we understand what they're complying
with. And the workshops are critical so they understand
what they have to comply with. But if that clears it
up I, I'm ready to, to support it. And, and get down
the road and you know, modify next year if we need
to. But um get this uh in the books and, and be
ready for this Winter. (item:34:Commissioner McAdams comments on expectation of clear definitions) So as an expectation, I believe
what should we, we should be able to have in July, for
us to deliberate upon. Is a clear definition, a more
clear um and artfully worded definition. Of what is
in that box, what is in that table? Because I believe
that table, as from an engineering perspective. Is the
driving force behind the industry wide efforts to weatherize.
And, and I would point out that this is, this has been
a highly successful policy for the ERCOT system. Um and
frankly for, for uh uh others to follow and, and use
as a model. And uh I believe we have in this policy
a more stringent level of uh weatherization security
than even ERCOT contemplates. And that's a victory for
ERCOT. And we are an example. And so I believe what
needs to come back to us is just a more refined definition
of the numbers that are on the table. Which will be
the guiding force for weather, weatherization efforts
and enforcement. Something that we can enforce to.
Uh and, and, and I believe our Staff and our Staff,
Commission Staff and ERCOT Staff. Can work together
to make sure as that definition comes forward. That
we do contemplate the enforceability of the definition
of those numbers and how we account for them. Um but
I, I too believe more time is, is needed. And, and
if I may Madam Chair, I'm sure I would say uh.
The two, the last two years have been great for me.
Um but this was the equivalent of being mugged as a
regulator. Um last night after my memo dropped, it
was astounding um the level of engagement, not necessarily
through filings all back channel um concerns raised.
Even though ERCOT had filed this document on Friday
of last week it had been out there. Um we've been working
on this for how long Woody? Long time. Nine
months. Oh, that's, that's a great number. Um and,
and so we do need the uh stakeholder segments to engage
on this. And to provide that, that technical feedback
that gives them comfort. That they know what the rules
of the road are. Um so I would urge them to do
so and that we need to try to head uh something like
this off in the future. We need to try to prevent that
so that we can collaborate more fully uh on the front
end rather than the back end. Um but I appreciate the
work you put into this. I think I understand it. Uh
and I think it's good policy. It's just a matter of
words and they give uh they give market participants
comfort as well as regulators.
(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
to go back and clarify the memo um as you mentioned.
Uh we did hear from the um generator community kind
of at the last, the last hour. And I very much want
their engagement, but um would encourage them going
forward to do it in a different manner. Um so that
again, we're all aligned, we're all kind of marching
down and achieving the same goal I think. Which we
all share, which is we want better reliability and
we want the standards to be very clear. So that as
we go in again on the front end and we design these
facilities. That we will get the objective that we are
seeking. So I think a lot of times we talk about the
enforcement side and that is very important and it
needs to be there. But again, it everything kind of
starts with making sure we have good alignment so that
we get those facilities um, um standards established
very quick, very clearly. So that we can um design them
and build them as robustly as they need to be as they
need to be constructed. So I would be in agreement
that we need to go back and get clear clarification.
And again um in, in terms of the, of the return date
we're very much thinking that it would be at our next
board meeting. That we would have this and be able to
um finalize the direction. That would, that would be
my sincere hope. We can certainly do that. And if I
file a memo, it'll be much more detailed about what
I actually support. Um again on this topic. If or when?
No, if.
Thank you Madam Chair.
Item No. 35 was consented. (item:36:Chairwoman Jackson lays discussion on reliability standard) Next up is Item No.
36, Project No. 54584. And we're going to discuss
the reliability standard. As a reminder at our last
open meeting, we gave ERCOT the green light to move
forward with their analytical approach. The proposed
treatment of low probability events using the exceedance
probability methodology. ERCOT has since filed a memo
and is requesting confirmation regarding the initial
resource mix scenarios and direction to proceed with
the model runs. I think Woody is here to discuss the
memo and we'd like for him to come up and walk us
through it, through his presentation.
(item:36:Woody Rickerson, ERCOT on 48 scenarios) Woody Rickerson, ERCOT.
Okay. So we view these uh these 48 scenarios as kind
of the next logical step to provide information that
will enable you guys to ask questions on that will
direct where the study goes next. So to us, this seemed
like using the framework we kind of agreed on before
the frequency duration and magnitude
these next 48 scenarios. And then there's some behind
those as well. But this will give some information
as to cost an amount of generation that has to be added.
And it just it, it will help fill out the information
overall so that the next steps can be determined. So
that's what uh we're looking for confirmation to go
ahead with these 48.
(item:36:Chairwoman Jackson's question on scenarios) So again, we would run the initial 48 we get, we get
those results back. We could take a look at them, decide
going from there kind of narrow down and what scenarios
might make sense to run and get that feedback information.
So we start to kind of if you will kind of narrow
in on the the answer. Yeah, potentially. But I would
say that the final answer that you come up with may
be outside these 48 scenarios. I mean, the information that comes
out of this may direct us into a place where it's beyond.
This isn't meant to be limiting in what you decide.
This is just meant for information at this point. And
we may end up going down a road that's not in these
48 that goes somewhere else. Or there may be something
that comes out of these that leads to questions that
we haven't anticipated yet. But this is these 48 seem
like the next logical step. And the path that we're
taking to try to provide information. And this will
be a more the, the preliminary results you saw were
uh were preliminary. This will, these will be more
robust. Uh there will be more Monte Carlo simulations
behind them, things like that. So this is we're, we're
we're tuning the model as we go. And this is, these
are better and better results. (item:36:Commissioner Glotfelty clarifies scenarios) And I, I'm a little unclear
on the 48 versus the 42. So the 2nd set, the 2nd
42. I'm sorry, it is 42. Okay, go ahead. So the, the
so we have two charts here, one of them has 48, one (inaudible).
And I'm, I'm assuming the 4 top 48 are the same. And
then the, the bottom 42 are, are different.
And I, I just don't understand what the difference
is between the 48 and the 42. The loss of Load expectation
is that accurate, Woody?
(item:36:Woody Rickerson gives clarification on scenerios) The 1 in 30. Yeah, we took the 1 and 30 out.
Because it was in the initial ones just because it
seemed like it was pretty, that's a pretty high reserve
margin. It's pretty extreme. Got it. It doesn't mean we can't
go back and redo that. And that demonstrates that what
was excluded under the 1 and 30. Therefore, that's
what you left.
But that was the, we're trying to cut the work so that
we can give you back results, iterative that you can
look at and not just. Yeah.
(item:36:Commissioner Glotfelty's question on LOE/LE and EUE) And, and when you bring this back or is
the only standard you're gonna bring in, be bringing
it back in is
lost a Load expectation? I mean, is LOE/LE the only
metric or can that be translated into a EUE or something
else? Um next time I mean, when you bring this back
again. Obviously the, we've said this before up here
and you all have been parts of this. That, that this
industry is changing in terms of what is the primary
standard. And as we have that discussion, it would
be helpful to me if you could just make that translation
in terms of EUE as well. Okay. (item:36:Woody Rickerson's follow-up) So the way like
if you just, if we just look at like the very first
scenario. It will be based on 3 pillars of the framework.
It'll have an LOE/LE or a frequency of 1 in 5 years,
a duration of 15 hours and a magnitude of 14,000 Megawatts.
So those 3 things will. The first scenario will
capture those 3 metrics. Um now we're gonna make
two assumptions when we do that and the assumptions
will vary as well. The assumptions are that 900 megawatts
gets retired and that any additional capacity that
has to be added are 100% CTs that get added. And we'll
vary those two things in similar scenarios. But for
the first scenario, you have those 3 pillars and
those two assumptions and then we get back four results.
We will get back the expected unserved energy for that
scenario. So that scenario will meet those 3 pillars
You'll have those two assumptions in it and then we'll
get back expected, unserved energy. We'll get back
the number of megawatts that have to be added. We'll
get back a cost to add those megawatts. And we'll have
an exceedance probability associated with those three
numbers. And so the exceedance probability may be 1%
or 3% or 5%. Got it. And so those numbers will give you information
to say, I really like scenario number one. But I'm
not comfortable with the exceedance probability, that's
way too high. And so you can look down the chart and
find those same parameters, those those framework parameters.
And find one with an exceedance, probability less.
And you'll see a different amount of generation that
has to be added. And if the thing you're looking for
is not in those scenarios, then that's obviously something
we would add in the next round. Like I really like
scenario 31 but this is a little bit too high and we
wanna add something here or take something away here.
Or I wanna see it with this variation instead of what
you put in there. That'll help design the next steps
that you look at. This is almost like a menu and we
framework the menu around those three things, magnitude
duration, uh and frequency. And then varying the megawatts
retired for nearly large. We did, we did. That's right. And you know
we have uh 900 and 3300 as 2 options. I mean, obviously
if we think there's a reason you need to do 2000 or
zero, then we could do that as well. And is that net
I assume? That's just straight retirement, a straight
retirement. So the, the base stands, the base
is what's in the, the 2026 expectation. That includes
any new generation that's already coming online stuff
that isn't there today, but will be. So we've included
all of that. And then from that number, we subtract
out 900 megawatt or 3300 megawatts. And if those aren't
the right numbers and there's some analysis behind
that. But if those aren't the right numbers. And we
want to look at something else. That's, that's just
another scenario to look at. And we can certainly add
those. But for these initial ones, we felt like those
were two good markers to look at. And by the same token
you'll have the 100% combined cycle, but then you'll
also run that same case, uh with a different mix.
That's right, that's right. So the whole idea is to just get a wide variety of
scenarios. Look at the outcomes and then you can kind
of go on to the next step. So the point here is
to just make sure that we've got um as much um breadth
of information to kind of. Exactly right. So, so the one other question
that I have is. So when you get these outcomes uh and
you create the capital cost for a new generation. Is
that done using an old cone number or a new cone number
or a CT cone number or a battery cone number or is
there a menu there as well? There isn't a menu there.
(item:36:Woody Rickerson's response to cone questions) We'll use the cone that we have the most recent uh
numbers for. But that's certainly something we can
report of what cone we use to, to put that new generation
in. That be good. It obviously, if it's a CT there's
a capital cost for CT. If it's a mix of combustion
turbines, wind and solar and batteries. Then we'll
use the mix that we expect in the CDR. So 20%
this, 30% that. And we have industry numbers for what
those cost as well. So the capital cost for the new
generation is uh industry numbers. Okay.
(item:36:Commissioner McAdams asks for IMM's thoughts) Madam Chairman uh I, I'd like to try to start a habit
of. So I personally agree with what Woody's saying
and the direction he's heading. But I, I think as he
has alluded to, there's going to be some economic analysis
that begins to go into this as well. And the associated
costs with each uh standard. Um I'd like to hear the
independent market monitors thoughts on 1 the framework.
That's being associated with the reliability standard
right now. And then two, the analysis uh components or
or the uh the metrics that are being fed into this
and um and the economic consequences of that. Could,
could we invite her up? Yes.
So, so really we're just talking about the process
here. Because obviously we don't have any numbers yet
because we haven't run any models. Good morning, Carrie
Bivens with Potomac Economics. Carrie, uh this process
do you have thoughts? (item:36:Carrie Bivens with Potomac Economics' thoughts around the analysis) Uh I, yeah, I do have thoughts.
And I, I've engaged a little bit with Woody and his
team on some questions around the analysis. Um I would
say my number one concern at this point is the base
case year using a 2026 value for that. Um I could see
how perhaps that's okay as a starting point. But as we
move forward into future market design. As far as using
the outcome of these studies, in order to do a preserve
margin. You should always use the prompt year for that.
And there's a number of reasons for that. But the biggest
is that by using 2026 you're introducing quite a bit
of error into the study because there's a lot of things
that are going in the interconnection key, You have
to make assumptions about what's gonna be added and
what's not going to be added. Versus if you use right
now, we know what our generation mix is and we can
use our generation mix um to perform these studies.
And so, um that's just something I think we should
continue to discuss. Is both for this initial um reliability
standard process, but also going forward as the reliability
standard gets used for market processes. Woody, what's
your view on that, current year versus forward? (item:36:Woody Rickerson's thoughts on current year versus forward) I think
it's useful to, to do it. In uh what you call a
prompt year? I think that is useful. Um unfortunately
it is a uh a lot of we have to go back
and reset the entire model. So we're already in the
process of doing that. So we, we have looked at staffing
and we've looked at contracting and stuff. And so we
are gonna go back and try to do a prompt here. It
may lag behind these results a little bit. But we are
gonna try to reset all the inputs to the model and
do a prompt year. So we'll do that. I think that's
half of what you were talking about. The other half
though, is in the future when we do this, is it a
two part study or is it just a one year study? Do
we do a prompt year and a future year always or do
we just do a, uh the future year? So when we do
this for future 2027-2028 and moving forward. Are we
always gonna do a prompt here or not? And uh I think
it's good for this study that we have a baseline. That
is, that has a prompt here. So we can see where we
are versus where we wanna go. I think that's useful
and we can do that and we're already starting the process
to do that. Um I think we need to talk a bit
more about the usefulness of doing that on all future
studies. Carrie, what your so at Potomac has experience
in another ISOs as well and they go forward. I mean
to the extent where that enters into slope, demand
curve conversations and stuff like that. So what's
your view on? (item:36:Carrie Bivens thoughts on ISOs) Yeah. So if, if they're running another
ISOs it depends on the market design. I understand. But for, for
ones that have prompt capacity markets, then they use
the prompt year for that reserve margin study. In order
to set the target megawatt quantity that you need to
procure.
Yeah, okay. (item:36:Chairwoman Jackson's comments on timeline) So I think what I'm hearing is that you're already
kind of considering this prompt year. Um but again
time is of the essence, we need to move forward. And
so, um looking at the scenarios that we have before
us, um in order to kind of move forward expeditiously.
We would need to continue to, I guess, do what we're
proposing here, which is um go, go on to the next step.
(item:36:Commissioner McAdams question on confirmation model discussion) It, it sounds like Woody, what is describing is.
That they have initiated work on, on this confirmation
uh model uh which is using the prompt uh data. And
then uh as a part of our process, by the time the
board gets these new refined um model results. And
then ultimately, the Commission. We'll also have the
value of lost Load study uh information coming back.
So there will be a, a window to where uh all processes
catch back up and then we'll have a more complete picture.
Is that your view, Woody? By the time we make that ultimate
value judgment. Yeah, it's kind of a two track process.
That we continue with the 2026 analysis and we will
start trying to, we've already decided to do the prompt
year. But we'll, it's gonna be behind the other one.
Because there's a lot of, of. Because we did not
we didn't consider that originally as part of the the
project. And so we're gonna have to do some catch up
there and we're not staffed exactly to do that at this
point. So we're gonna have to, to spin that up and
and catch it back up. And so it'll be a two track
process for a while until it gets caught up. So, um
working on the prompt year but still still on the critical
path and not slowing down, kind of waiting on the prompt
year.
That's right. Carrie, anything else? (item:36:Carrie Bivens final thoughts) Yeah, just the other items um
that will become very important to this process as
you already mentioned vol study. So I think it's really
important to get those that information back. Um I
don't know what if it will be a single number or a
range of numbers. And you know, it's gonna be interesting
to see how, how that those results come back in and
how that can feed into this model. Um in addition to
that, I think the Commission will need to consider
what cone values to use. Um we've experienced quite
a bit of inflation on labor and parts. And I think that
the most likely scenario is that cone is higher than
the official cone that we have right now. And so those
two things are gonna, those two levers are gonna make
a big difference and, and what the cost benefit of
the various reliability standard options are. And the
economic cost, right? Correct. Okay. Thank you. That's
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
we're all in agreement with, um moving forward with
ERCOT's um initial scenarios, the 48 scenarios. That
is correct. Thank you very much.
Thank you, Carrie. Um we don't have anything on Items
37, 38 or 39. Unless y'all do?
Next up is Item No. 40. Sheila, will you please lay
out this item? Yes. (item:40:Discussion concerning petition by ERCOT on compensation for eligible Board of Directors) For Item No. 40, ERCOT filed
a petition in Project No. 54444. Requesting that
the Commission review and approve the compensation
for eligible members of ERCOT Board of Directors.
(item:40:Chairwoman Jackson lays out why compensation should be approved) Compensation levels have remained unchanged for over
a decade. We should approve the ERCOT petition outlining
the Board of Directors compensation as referenced in
Attachment A. There have been a lot of changes and
a lot has happened at ERCOT over the last decade and
we should compensate appropriately. I'd like to open
it up for discussion. (item:40:Commissioner Glotfelty's comments on compensation) I, I have a few comments on
this. Uh based upon my background um in starting up
these organizations, we called RTOs and ISOs around
the country. Um uh back in the late 90s and the
early 2000s, um they have taken on a life of
their own. We have asked them to do more in every single
market including ERCOT. Um but they started out as
entities that uh ran markets and ensured open access
to the transmission system for, for generators. Um
like I said, they are being asked to do more and more.
Um I struggle with this. Um I, I struggle with um
the compensation of the executives of RTOs and ISOs
around the country and the Board Members. Um I think
the comparisons are that um they're being compared
to um publicly traded companies. And I'm not sure that's
a correct comparison, at least as the ERCOT Board.
Um they're recommending, their consultant recommended
um a 75th percentile um of their peer group. Um I'm
just not sure that their peer group was right. And
I, and I brought this up at the board meeting. Um,
if they studied um, nonprofits. Um and the comment
was that, you know, most of the nonprofit uh IRS
990 filings are behind uh due to COVID. And there is
a process. There was a lag before that. They just posted
on a lag. They
posted a lag. Yeah, I know. Um,
you know, I find it hard that in this, you know, in
this Summer and this week.
That we're breaking records yet again and we're having
to move this to the top. That this is the most important
thing that we're considering. I don't know. I just
I, I accept the fact that they're, um their current
compensation is lower than the other RTOs and ISOs
around the country. I don't know if they need to be
at 100% of them or 75% of them or 50% of them.
Um so I, I just struggle with this. I mean, I think
it's um we have to protect ratepayers. And what we've
seen, what I have seen over the years and other not
in ERCOT, but in our other RTOs. Is executive compensation
goes up, Board compensation goes up. Executive compensation
goes up, Board compensation goes up and nobody has
any say over it. And while we have a say over ERCOT's
budget and we ultimately have a say over ERCOT's Board
compensation. I just hope that in time we, we set this
and we leave it. If we find it acceptable then fine
But we can't,
this can't be a spiraling issue. Where costs go unchecked
for the consumers of the, of this state. So um with
that I'll, I'll follow your lead. I really just wanted
to make a statement here. That we can't um let these
get out of control. Yeah, absolutely. (item:40:Commissioner McAdams thoughts on ERCOT Board compensation) I mean, just
to, to add to the discussion. Oh, over the last 2
years, as we've uh discussed market design. We talk
a lot about boom bust cycles. And um it, it seems like
it applies to everything with ERCOT. Um and the PUC,
the PUC was asked and I was guilty of this. Um when
I was staffing committees in the Legislature with oversight
of the PUC. PUC was a starved agency uh for a long time
of resources, essential resources to beef up their
capabilities. I mean they, they were like the Marine
Corps. They were asked to do more with less all the
time. And um, and ERCOT was in a similar situation
compared to other ISOs. And um, and we have the benefit
of, of having representation on other ISOs. And now
they're, they're watching what I'm telling them about
the actions in ERCOT. And they're like, wow, we wish
we could get that, you know, because they're gonna
need it in the very near future. Given the, the dynamism
of those grids. So I, I wanna highlight some facts
and establish a fact pattern. Um as we, as we think
about this. Uh as the Chairman alluded to, this has
not been changed since 2011. Um that's 12 years and
since then, the entire nature of ERCOT governance has
changed. I think that's an absolute fact. Um it's been
restructured and reformed by no less than Senate Bill
2, elements of Senate Bill 3. And now as of this
last Session, House Bill 1500 which are coming as of
September 1. Directors are now fully independent
uh from the industry and industry stakeholder segments.
Which was a feature of the, of the last governance
design that allowed us to compensation, the compensate
them at a lesser level. Because they're individual companies
were compensating them accordingly to their roles and
duties in ERCO. We don't have that anymore and rightly
so. The Legislature deemed that was inappropriate. Um
statute also imposes significant restrictions on who
can serve on the Board that also restricts what they
can do after they serve. This is uh it's, it's a hard
rule. Um namely, directors cannot have worked within
the energy industry within years of joining the Board.
Uh they must divest all energy related investments.
And that's, that makes this a fairly restrictive um
uh framework around finding qualified people who can
serve.
In principle, I want a system managed by individuals
who can dedicate the time and focus. To a grid that
is in the midst of the most significant energy transition
since. Throw out a number of dates, 1935 the Rural Electrification
Act and FDR 1950. Air conditioning happening in the
US or 1997 or 99, in deregulation. You can take your
pick, but we need to account for that as well as inflation
since 2011. Which I would argue has been significant
especially in the last few years. And as a policy consideration
we need to account for ERCOT budget cycles that we're
attempting to establish now. Um and how often director
compensation should be reviewed and set and they like
we need certainty there. Um we beg the Legislature
for that and they asked us similarly for it. Um since
there is a lag in our evaluation of the system administration
fee, if we put them on a two year cycle. Um that
that has an impact on that review. And for these reasons
I believe director compensation should be based on
not just pure organization comparisons that you have
so ably noted. But also on levels sufficient to attract
uh the necessary and retain the qualified candidates that
we want, that we need, that we're gonna have to have.
And these candidates know full well that there are
mountains of work ahead of them. I mean this, I can
guarantee and that's not a threat, that's just a promise.
And we all knew what we were getting into when we joined
the Commission and they knew what they were volunteering
for when they joined ERCOT. Um but in some I, I support
the proposed compensation level recommended by the
Board. And believe this will allow us to recruit and
retain dedicated, a dedicated governing body. Um for
the system, independent of the industry, which was
the Legislature's intent.
And to be able to execute the reforms that we are required
to implement. Along the timetables that we are required
to implement them by. Um so I, I believe we can, we
should move forward now. I would say that the relationship
between PUC and ERCOT has changed somewhat. In that
uh Brad Jones said it, we're partners. Um I believe
the Courts are saying that we're the senior partner.
And, and we're gonna have to write the rules of the
road. And uh and I have comments on another agenda item
related to rules later. But I, I believe this framework
has to be harmonized to work together and we need the
rules of the road to do it. And I think there are
vehicles that are moving, that it should address all
of our concerns. And I share your concerns on cost
containment, not allowing this to spiral, spiral. Accountability
within the system and something we can take back to
the Legislature. And say hey, look we have created
a framework that is going to work. (item:40:Motion to approve ERCOT submitted petition on director compensation) Um but anyway, Madam
Chairman, I have a motion and I would move to approve
the ERCOT submitted petition on director compensation
and I hope I have a second. Second. We have a motion and
we have a second. Um all in favor, say aye. Aye. Motion
passes.
(item:41:Chairman Jackson lays out reliability, reserve service discussion) Next up is Item No. 41. Let's take up the dispatch
reliability, reserve service discussion here. ERCOT
filed a memo in Project 54444. House Bill 1500 requires
ERCOT to develop it, implement an ancillary service
program to procure DRRS by December 1, 2024. ERCOT has
been evaluating options for development of AD RRS project
We have Canon with ERCOT here today, I believe to
discuss it. And could you please come up and provide
us with the highlights of your memo.
(item:41:Kenan Ögelman with ERCOT on memo) Kenan Ögelman, with ERCOT um good morning. So uh, uh I I can walk you
through the, the slide deck. Or, or just kind of focus
on some highlights. Is there a preference in terms
of. I think we've all seen the slide deck. Sure have. Okay,
um, so let me lay it out. I, I think there are
uh, within the statute uh some uh, design requirements
that, that are spelled out. So we're trying to work
within those parameters. Um some of the key items are
that we deliver the service by December 1, 2024. That
puts us on a, a relatively tight time frame. And uh
helps define some of the feasible options that, that
are out there. Um, a couple of the other uh items that
I would highlight is that uh a resource has to be two
hours or less away. Um and capable of running at its
uh, uh high end high
sustainable limit for, for 4 hours. Um uh lastly,
there is a requirement that there be a uh commiserate
reduction in the reliability unit commitment. Relative
to the procured amount of this service. Um uh I, I
do want to make one observation there um for local
issues, local reliability issues. Reliability unit
commitment is one of our kind of backstops that lets
us uh align and meet NERC requirements. So that's, and
that part of it, which is not uh the not the, the
segment of RUC that you've been hearing lots of complaints
about. But that part is gonna probably remain in, in
in some form. Now, there's overlap with some of these
things so that uh that'll be something we work to analyze
and, and, and work through. (item:41:Commissioner McAdams question on implementation decisions) So, so would that be a
implementation feature that could be adjusted? I mean
we've all everybody in the room probably read the statute
a couple times, you always find something new. Um but
would that be a feature of implementation decisions?
Where again the RUC capabilities for congestion are
separate and apart, in terms of the calculation applied
to the DRRS equivalent reduction. I believe that we're
gonna have to try and track that. Federal policy and
state policy have to be harmonized. So we have to,
and, and by the way, I mean, the statute doesn't require
complete elimination of, of reliability unit commitment.
So I think all of these things align. It's just uh
just wanted to set the stage with you in terms of how
we were looking at it. Um so essentially we uh found
two potential paths that, that would work. And
ultimately um the, the second one I'll go over uh
doesn't meet the timeline. But I did wanna make sure
you knew that we tried to look at as many options uh
as, as we could. I would also uh you know, qualify
what I'm about to share with you that. Uh you know,
we we're still working with both stakeholders and
internally to see if we miss something. Uh that, that
is also a viable option. But as of right now, what
we put in our presentation is are, are the options
that we're aware of. So, um if the Option A is to
use nonspin as a replacement for uh, uh for uh DRRS.
So you are, you kind of either say I'm not procuring
nonspin anymore in the, in the current fashion and
procure DRRS in its place. Or you segment, add another
segment into nonspin. And uh do it and, and that is
meets the DRRS requirements. There are pros and cons
to both of these uh approaches. So completely uh vacating
nonspin and putting DRRS in its place will require
us to lean more on the ERCOT contingency reserve service
and that's a very new service. Um and the market is
still kind of adjusting to our procurement of that
service. Um so uh that's something definitely we wanna
keep an eye on. Um the other uh approach. Uh adding
another segment means that there are kind of almost
three products within nonspin. But it would have to
price out at one price. So there's some real inefficiencies
in terms of market design um going down that path.
So those are the, those are some of the flavors of
uh what we're trying to uh wrestle with. Um then if
I go to Option B. What um happens there, unfortunately
when we did a very high level impact assessment, it
doesn't look like we can bring that in until uh the
first or second quarter of 2025. So to me, that means
I'm not in compliance with, with the statute. But I
did wanna uh kind of share all the work that we did
with the Commission. And in that instance, what we
would do is almost kind of use our experience from
ECRS to almost cut and paste uh additional protocol
language and requirements into our systems. And uh and
and deliver uh, uh additional ancillary service that
was called DRRS going down that path. However, as I
said, that does not seem to meet the timeline that
we've been instructed to deliver. Uh a couple of other
observations that I think are material to share with
you. Is that um whatever path we go with nonspin to
achieve a uh aligning reduction in RUC. The service
needs to be provided by offline resources and not online
resources. And I raise that for two reasons. One, currently
nonspin has an online component. Um it automatically
kicks in at $75. Uh and um it allows uh QSCs
to move responsibilities around relative to day ahead
awards within their portfolio. Um that uh feature is
gonna have to be limited or eliminated to ensure we
get a reduction in RUC. The other reason why you,
you will be interested in this and this is coming out
as we look at ECRS, which is an offline resource. Is
those reserves, make less energy available to our security
constrained economic dispatch engine until ERCOT releases
those reserves. Um and that is one of the drivers for
some of the um uh higher prices that you're seeing
in, in the energy market. Um when once ERCOT releases
the reserves, when we've hit the reliability requirements
to do so that energy is available to the security constrained
economic dispatch. But prior to that, it's not. Now
real time optimization solves this. But that's there
there will be this interim time period where uh less
energy is available to SCAD. So, so as we um kind of
engage stakeholders and try and move forward with this.
Um the, these are some of the themes I think you're
gonna hear as folks prefer one outcome over another.
Um so I thought that those were important uh items
to share with you. Um the last thing that I did want
to talk about is kind of our, our timeline. And um our
goal is to uh bring uh. And, and let me make sure
I get these dates right. But um our goal is to, you
know, continue discussions through the end of this
month. Um and uh, then uh work on protocol development.
Uh we'd like to do that in the August time period.
Then once the protocols are developed, we would bring
that to the stakeholder process and move that through
the stakeholder process probably through October. With
a goal of delivering uh a voting set of protocols to
the board in October. And um that would give the Commission
time to review and do its due diligence and consider
whether it would like to approve uh the the protocols
in the kind of November time period. And then we would
start turning those protocols into um requirements.
Those requirements would then be system changes that
we need to implement. And we believe we can meet the
December 1, 2024 deadline in the statute.
(item:41:Commissioner McAdams comments to memo) Kenan, you, you lose a bit by uh taking option uh A1.
Um and it's the repurposing of, of nonspin as one single.
I mean, all of nonspin capabilities that are being
supplanted by the statutorily required DERS. And moving
those megawatts uh procurement over to ECRS. That, that
really eliminates the 30 minute online. Correct. That
you lose. Um, I mean, the 30 minute would qualify for
uh DRRS since it's inside the, the two hours. Yeah
you would just be paying for really efficient units.
Correct, I just didn't wanna. Not efficient unit as
efficient units. Correct. Um
and um,
and you believe on A, uh A2. Because you're doing
an A-B thing. Um, you believe you could meet the statutory
deadline with A2? (item:41:Kenan Ögelman on timeline) We, we believe we. Kristi is shaking her head
no.
Oh, I. The, the team has actually since uh done some
more work. And I think A, I'd like to reserve the right
to come back and update you on that. But, but the team
does believe A2 is in play. It's, it's more B that
is really off the table. And I, I know Kristi is shaking,
shaking her head. I had this conversation yesterday
evening.
So your thought is that you want to have some stakeholder
engagement. Um that would in the event that there is
potentially another idea out there that could enter
into this Option A. That that could be, that could
be considered. Is that true? (item:41:Kenan Ögelman on engaging with stakeholders) Yes, we would like to
engage stakeholders for two reasons. One are, we may
have missed something that's good or bad in the options
we're considering. But we may have also missed some
alternative that, that works better or an enhancement
that would uh work better. And the stakeholder process
has been very valuable to provide that kind of feedback.
Um so, so I think there's a lot of value to having
some workshops, getting feedback. Um of course, there
can be additional feedback when we drop the uh protocol
revisions as well, the nodal protocol revisions. But
we really wanna um engage stakeholders before we kind
of choose a path and start writing protocols. What
do we believe the lag time is uh between real time
co-optimization and the statutory deadline?
There is uh I believe around a uh 1.5 to 2 year
lag. Between uh real time delivery of real time co-optimization
and the December 1, 2024 date.
Okay. Meaning RTC happens after the 2024 date. Yes sir.
Two years later though. It, it can I ask you? So we
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
created by the Legislature. Um do y'all feel comfortable
how these are working together? Uh and will you be
able to tell us at some point in time where you see
gaps?
(item:41:Kenan Ögelman on ancillary services and gaps) Uh so a, a absolutely. I uh because um and we're experience
this with EECRS, this contingency reserve service.
But with every um uh new ancillary service, there is
a market side adjustment. Um you know so we're, we're
just kind of getting comfortable uh with that. I, I
think it's gonna take a little bit more time. Uh we
discussed uh this TAC. There was a lot more information
that stakeholders wanted. So, um there's a learning
process with everyone. And I wouldn't say I'm comfortable
until, you know, we've gotten through the shakedown.
And, and really uh, uh closed all the gaps and, and
and made sure we, you know, uh if something was missing
we didn't adjust for it. So uh unknowns are, are never
comfortable, I guess would be maybe the short answer
that I should have started off with. (item:41:Commissioner Glotfelty's comments on ancillary services and gaps) Well I, I clearly
these uh the, the kind of the runway for understanding
how these are playing in the market is. Everybody has
to have some time to understand that. But I hope that
as you implement the DRS and continue to understand
how ECRS is working and interplay with RUCing. And
I mean, all of these things, you'll come back to us
and say as well as the IMM. Come back and say, you
know, this is too expensive here because of, let's
think about this or we've got a huge ramping gap here.
ECRS was supposed to solve it, but it's not why. Uh
we need to add storage into it for some reason or take
storage out of the, you know. I, I don't know. I'm
just saying that uh we got to be flexible, these things
are and then we got to lock it down. I mean, the
market needs to understand that we, that we mean certainty.
Um and I'm, I'm hoping that we can get to a
place in this market where we provide certainty for
a long time. Um so we just look to you all for
uh or I look to you for, for giving us these gaps
here in the future. (item:41:Commissioner McAdams thoughts on certainty) No I, I think, I think it's a
great segway. We do need certainty and, and frankly
with the breadth of the Legislation. The effective
policies in the Legislation. We need ERCOT's help to
help, along with our Staff. To help frame this out in
a consistent framework um to make sure it's all harmonized.
(item:41:Chairwoman Jackson reviews discussion) So, so I believe, I believe what I'm hearing is that
it's important for ERCOT to comply with the 12-1-24
statutory deadline. We don't have a choice, yes ma'am. And that
should work with the stakeholders in July and August.
On the best way to meet the DERS requirement including
um developing protocol changes that meet the statutory
requirements of HB1500. Um it'll be important to have
decisions made before the end of the year. So that
system changes can be timely implemented. But in addition
to DRRS, HB1500 also requires the PUC and ERCOT to work
on a number of additional market design elements. I
think it would be helpful for ERCOT to return to our
next open meeting on July 20. With a road map for accomplishing
the remaining market design work that is in front of
us.
We will be prepared to do that. I think that will be
very helpful Madam Chair. And Kenan I think that'll synchronize
with our own Staff's efforts on a rulemaking calendar.
And then the market we'll be able to see on an iterative
basis how all this rolls out together. And so we look
forward to hearing from you all on July 20th. Thank
you.
I don't have anything on Items 42 and 43. Uh Madam Chair,
if, if I could take this opportunity on Item 43. Um
Let's bring it the item. Oh, yes. Oh, sorry. The project.
(item:43:Chairwoman Jackson lays out discussion for the rulemaking calendar) Yes, I'm now bringing up Item 43, Project No. 54455
Perfect. (item:43:Commissioner McAdams comments on rulemaking calendar) Um and that's the discussion for the rulemaking
calendar. And I wanted to take this opportunity um as
I had mentioned before. Uh in the context of ERCOT and
PUC relationship. I believe um much has happened uh
especially since SB2, SB3 and now, HB1500.
To that, that certainly warrants us establishing, we're
codifying the relationship and the interaction and
the processes associated with the decision making. Uh
process for both ERCOT and PUC in substantive rule.
I, I think one of the takeaways I'm hearing from the
market and other places. Is that we need rules of the
road and um and it, it helps level set the relationship
uh for both, for both entities. Um both the organization
of ERCOT and the PUC. It helps hold us accountable
if we have some type of uh parameters, some type of
uh clarification of, of our own review and substantive
rule. And it allows for a defined process of public
input, uh stakeholder input and um that, that will
benefit both organizations. And um I think the rule
making framework that Staff is working on. Um it's
been 2 years since House Bill 2 and uh I believe
I've heard from Staff that they believe it's time to
to start working on this type of relationship. And
um frankly, I think ERCOT does too. I mean, it might
help just to have words on paper. I know Chad believes
in that. And um especially as we consider the budget
and it, it's now uh over to us as a recommendation
from the ERCOT Board. Um it will significantly expand
the scope and capabilities of the organization. And
um and I'll be interested to hear uh the market's feedback
on that. But as such, we need to harness uh within
our own processes, how to use such capabilities. And
and that way we can consider it in the Fall. As we
evaluate both organizations together and the resources
needed to, to make them work most efficiently for the
system. And so I guess uh that's a long winded way
of saying, I think a rulemaking on um PUC processes
as it relates to ERCOT and ERCOT processes as it relates
to PUC is warranted. And I believe, um it'll be in
the framework that we see in July. And um and I just
want to reassure the system that we're trying to harmonize
all efforts. That it's nothing is going to spiral out
of control because there will be checks and balances
associated with the path forward. And, and hopefully
that begins assuaging the concerns that are being expressed
to the Legislature, to the Courts. Um and to let people
know that we are listening my view. (item:43:Commissioner Glotfelty's thoughts on rulemaking calendar) I, I agree. Um
We, we, we have to put it on paper for everyone to
understand including ourselves and our Staff. When we
get things that come in late, when we get things that
this won't resolve that. But having discussion items
or filing deadlines or something before an open meeting.
Gives us and our Staff uh the ability to ask questions
appropriately here from other stakeholders. I've been
uncomfortable for, you know, how we're processing all
the NPRRs and things. Just because they're coming
and, you know, we get what the, the Board proposes
or passes and then our committee, our Commission Staff
looks at it. And gives us a recommendation, but there's
no other input, you know, and I, and I think, you know
as we go down this process. Uh things like that are
ripe for laying out a framework for and uh I appreciate
you bringing it up and uh totally support it. It makes
total and complete sense. It's really operational integrity
management. So we define what the requirements are.
We set the processes in place to meet those requirements
we audit, we make sure that we have evidence and then
we look for opportunities for continuous improvement.
And that is all my discussion. So thank you for entertaining.
So, so I have one other question about the rule making
calendar and that would be uh I guess David Smeltzer
I thought you left. Um he's wearing a tie. You don't recognize him.
That's right. Um So if, if we, if there are other
rulemaking that we think we want to propose discussion
items on or bringing up in the process, should we just
talk to you about it or file a memo or Connie? Let's
tell me between y'all what we. (item:43:David Smeltzer with Commission Staff on rulemaking calendar) I, I think that, you
know, to the extent that you wanna share it with your
colleagues filing a memo is always appropriate. But
conferring with either Connie and I, as you're before
you do or alongside your preparations is always helpful.
So that we can, you know, sometimes we might already
have something in the works in the area that you're
contemplating. Other times we might not, but Staff
always appreciates the heads up either through, either
through me or Connie. And we,
one that I'm thinking about is transmission planning
and, and how we work on that. So I just want to
make sure that we continue to think about that in the
mix of all of these rulemakings. And um I know this
isn't your first time to hear it. And Commissioner
Glotfelty. I'll say so our plan is to bring a rulemaking calendar
to the 20th, July 20th open meeting on Staff. We're
still prioritizing and getting our timelines together.
We will preview that with you beforehand. When we come
back to your office, that would be a good time for
you to let us know if there are any additional rule
making you'd like us to add. And just for everyone's
edification, our plan is, is to do that. We'll also
preview it with Legislature and the Governor's office.
And then the week of July 10th right now, tentatively
we're planning to have what I'll call a workshop. Where
we can get input from stakeholders to see uh and ensure
that, that we're not missing anything that uh the projects
that we kind of have paired together are congruent
So we get their input as well as we move forward. I
think that's great. Bringing stakeholders in to get
their opinion. Thanks, me too.
That's it. All right. Uh I don't have anything on Items
42 and um excuse me. Uh Items 44 and 45 were consented.
(item:46:Chairwoman Jackson on memo providing a summary of the 88th Legislative) Next up is Item No. 46, Project No. 55156. Jess
filed a memo providing a summary of the 88th Legislative
Session. Uh could you come up and briefly lay out your
memo? Thank you.
(item:46:Jess Heck on memo providing a summary of the 88th Legislative) Jess Heck, Director of Government Relations here at
the PUC. Thank you all for having me this morning.
Ok. I'm gonna read some prepared remarks. Um, good
morning Commissioners. Thank you for the opportunity
to briefly discuss my memo summarizing the 88th Legislative
session. It was filed last Thursday in Project No.
55156. I wanna begin by congratulating Interim Chair
Kathleen Jackson for her unanimous confirmation by
the Texas Senate. this past Session. On a high level,
there were 8046 Bills filed this Legislative Session.
490 with potential impacts on the Commission's operations
and regulated entities. Of the 490 agency relevant Bills
72 passed into law, the larger theme of these Bills
was the streamlining of agency processes and modification
of the Commission's statutory authority. Including additional
parameters on a market design program.
This was a historic budget session for the PUC while
the Commission maintained its same base appropriation
as last biennium of 42.6 million. There was an addition
of 19 million exceptional items. These exceptional
items had much needed personnel and retention to address
the agency's existing work Load, expand the Office
of Public Engagement and increase efforts around market
data analysis and energy efficiency.
In the PUCs Biannual agency report released in January
of 2023. The Commission approved six legislative recommendations
of those six recommendations. Four were signed into
law including the authority for the PUC to conduct
background checks on their personnel, registration
of virtual currency, mining facilities, parameters
and customer protections for aggregate distributed
energy resources and the bolstering of the Texas electricity
supply chain map. The PUC also went through sunset
this Session the 3rd time the agency has gone through
sunset since 2010. HB1500 extended the PUC ERCOT and
OPEC for six years through 2029. On a high level, the sunset
bill reflects agency governance and organizational
best practices, electricity and water reforms, improvements
to public communication and enhanced contract and data
management practices. Also included our guard rails
on a market design program.
Other Legislation of note includes SB2627 and SJR
93 creating a low interest loan program to support
the construction maintenance, modernization and operation
of electric generating facilities. And the creation
of the Texas Energy Fund. I conclude my memo by discussing
additional Legislation on matters under the Commission's
authority, although not exhaustive. The list reflects
key Legislation relating to the Commission and its
regulated entities. Next steps, the agency's focus
turns to rulemakings as discussed earlier. The GR
team will be providing consistent updates to the Legislature
and future implementation updates will be filed in
Project No. 55156. I'd like to end by thanking the
Commission leadership and Staff for their tireless
efforts this Session. Specifically Thomas Gleeson, Connie
Corona, Maddie Heath, Carol Maxwell and Brooke Comet. I'd
also like to thank our division leaders many working
late nights and weekends attending and monitoring hearings
doing bill analysis and answering questions. Harika Basaran
Tammy Benter, Chuck Bonderate, Chris Burch, Barksdale English,
Casey Feldman, Terse Harris, Darryl Tegen, Jay Stone,
Mariah Benson, Seely Eves and Floyd Walker. We appreciate
your commitment to the mission of the PUC to protect
customers, foster competition and promote high quality
infrastructure. I'm happy to answer my questions. Thank
you. I'm sure I'd just like to say, uh I'm not that
old. (item:46:Commissioner McAdams thank you to Staff) But I've watched a few Sessions and that was one
for the books. Uh
and uh kudos to Staff. Um you know, worked extremely
hard and um a lot to track a lot to deal with
and a lot to implement now. But um this agency couldn't
have done it without the competence and uh energy for
which you put into it. And I just wanna say how much
uh I for one and I believe the, the Commissioners,
how much. We appreciate that and um, thank you for
the work. Thank y'all. We appreciate it. (item:46:Commissioner Glotfelty's thanks to Staff) I, I would say
the same thing. Um, you know, having been in this uh
fish bowl uh of the Legislative Session a long, long
time ago. It was kind of nice keeping my head down.
Um, but we, uh we had great folks there, so I appreciate
the time and effort. You all took a lot of time away
from your families. Uh which is required in this role
at that time every two years. And um, um while we didn't
know what was going to happen until the very end, we
we now know the direction. And we've got a lot of work
to do. So, thank you for the time and effort that you
all took to, to work on behalf of the Staff uh to
help the Staff to advocate for the Staff and for this
agency. Thank you. (item:46:Chairwoman Jackson's thanks to Staff) Just echo what they said, a great
job and of course, so important moving forward that
as you mentioned, we keep the Legislature informed.
Uh We have our direction as we get every two years
and a monumental task before us. But one that is so
you know, vitally, um important, you know, for each
and every Texan and so, um I know as a Commissioner
um I'm very honored to, to have the opportunity to
work with such a tremendous and talented, uh energetic
Staff. Uh who is, is thinking about this each and every
day. And so it is in many ways a marathon and we
will cross the finish line and we will along the way
out and get those little cups of water as we run past.
But, uh, we've got the end goal, uh, you know, uh ahead
of us and, uh, everybody has kind of like the eye on
the goal and we're all working towards the same thing.
So I just want to thank the Commissioners for your
engagement throughout the Session. We appreciate all
your input and guidance. So thank you all for your
help. And Commissioners one thing, I'll add to Jess'
memo one bit of information. So we spent a lot of the
Session, especially in finance and appropriations talking
about the need for new resources uh because we were
engaged in, you know, mid 20s, uh number of rule
making and project. Which is about three times what
we normally do in an interim. And by David's calculation
we're looking at mid 30s to low 40s this time.
So you've exceeded the number from last the last. Yes
Yes, sir. By quite a bit. So just, just for your context
a lot of work ahead of us. Yeah, it's not a threat
It's a promise.
The David Smeltzer Full Employment Act, I think.
And he needs it.
Okay. I don't have anything for Item 47 or the remainder
of the Agenda. Um there is nothing for closed session.
(item:28:Chairwoman Jackson adjourns meeting) There being no further business to come before the
Commission. This meeting of the Public Utility Commission
of Texas is hereby adjourned at 11:28 a.m.