(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
July 20, 2023. For the record, my name is Kathleen Jackson
and I'm joined by Will McAdams, Lori Cobos and Jimmy
Glotfelty. Before I get started, I just wanted to recognize
our very own Commissioner Cobos as she received a special
recognition this week as one of America's Hispanic
Utility Commissioners and Energy Leaders. Congratulations.
And a very special, congratulations to Jimmy on his
recent engagement to Melissa.
And the Commission is better for it.
We're so happy for you. Um,
Shelah, will you please walk us through the
Consent Items on today's Agenda? (item:0.1:Shelah Cisneros with Commission Counsel lays out Consent Agenda)Yes, ma'am. Good morning
Commissioners by individual ballot. The following items
were placed on your Consent Agenda. Items 3-
6, 8-11, 15, 17-22 and 27. (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 Shelah.
So moved. Second. A second. All in favor, say aye. Aye. Motion passes. Additionally
Item 12 will not be taken up. Let's begin with Item
1, Public Comment. (item:1:Chairwoman Jackson lays out instructions for public comment) Oral comments related to a specific
agenda item will be heard when that item is taken up.
This is for general comments. When we get to oral comments
on specific items, stakeholders should not approach
the table unless oral argument has been granted or
have them or they have been invited by a Commissioner.
Speakers will be limited to 3 minutes each. Shelah,
do we have anyone from the public signed up to speak
(item:1:Shelah Cisneros confirms 1 signed up for public comments) Yes, ma'am. We have 1 person that has signed up to
speak, Mike Peterson. Okay Mike, if you would come on
up.
(inaudible)
speaking to the mic. And then would you please state
your name and organization for the record? (item:1:Mike Peterson with Bridge Studios for Public Comment) Sure. My
name is Mike Peterson and I'm here today on behalf
of Bridge Studios. Um, honorable ladies and gentlemen
thank you for allowing me to speak today. Unfortunately
I wish that this visit was to express my joy and how
easy the PUC has been to work with. Instead, I'm here
to call your attention to a failure to meet your mission
The largest and most advanced movie studios in the
world are about to open here in Texas. Not that far
from where we're now sitting and the cost of the build
out alone is in the billions and just the initial need
for capacity is 20 megawatts of potential power uh
drawn at any time. The problem is that the PUC has
been consistently unable to help me solve problems
relating to which energy companies service, which parts
of the property and has at times been unable to tell
me what your own rules are. As they pertain to service
provider agreements, claim processes and more. This
energy customer will be one of the crown jewels of
Texas, a body that we can point to with pride both
to be able to service for electricity and also as Texans
to have such a prestigious institution in our own backyard
And yet we run the risk of them choosing to go away
entirely with natural gas generation because electricity
has been so hard to nail down for this project core
To all the troubles is the opacity that PUC has hides
Potential devastation rules are unclear. Previous rulings
are obscured and unsearchable and clarity on what the
PUCs rules mean can apparently only be found by time
consuming and costly method of a hearing. Now, hypothetically
the PUC protects the right of generators and balances
the good of the customers. But instead I find myself
in a situation where I've even got two companies in
a state of agreement, but may not be able to proceed
under the current framework because both sides are
worried that the PUC will come down on one or both
of them because of the opacity of the rules. The only
customer in this case is running out of time to know
that the grid is committed to supporting them. But
rather than standing up for a giant of a project here
in Texas that has the support of the Governor. The
PUC is a threat to the generators involved in their
fears, threatening to permanently keep the project
off the grid. Literally, every attempt is being made
to try to comply with all the demands of the PUC. But
unfortunately, it seemed like the PUC would rather
maintain the shadow of destructive power than wield
the sword of fairness and justice. And hopefully next
time I'm here, I can express my appreciation and we
can celebrate together one of the largest and most
successful projects built in Texas, but that's not
today. I apologize. Thank you for your time. (item:1:Chairwoman Jackson closes Public Comment) Thank
you for your comments and taking time to provide your
comments today.
So having no one else signed up for public comment
public comment is now closed. We're going to take up
a couple of items out of order today. First, we'll
take up items 35, 36 and 37 and then we'll proceed with
going down the Regular Agenda. (item:35:Chairwoman Jackson lays out Project 54455 - 2023 Rulemaking Calendar) Let's start with items
35 and 36 together, Project number 54455 - 2023 Rulemaking
Calendar. (item:36:Chairwoman Jackson lays out Project 55156 - 88th Legislative Implementation Activities) And Project 55156, our 88th Legislative
Implementation Activities. PUC Staff filed a memo on
July 18 and identified the initial set of projects
and policy priorities for us to consider. They hosted
a public Legislative Implementation and Policy Priority
Workshop on July 11. Which included three sessions
telecommunications, water and sewer and electric. Staff
allowed for public comment through July 14. We have
David Smeltzer here to provide an overview of his memo.
David, could you at this time please lay out your memo?
(item:35:David Smeltzer, Commission Staff, lays out Staff's memo) Yes, ma'am. Thank you, David Smeltzer for Commission
Staff. Jess here is with me as well from our GR Staff.
As you outlined, we've been working to sort through
all of the Legislation and the different rules that
were required and establish priorities at this open
meeting. We're requesting a sort of green light on
the first set of rulemakings that we would like to
move forward with. As you mentioned, we received commentary
at three different public workshops, which was a really
robust discussion. And we really appreciate everything
that the stakeholders contributed in their filings
and in their verbal comments. That's going to be especially
helpful in establishing these priorities and also ranking
additional rulemakings into the future. As we dedicate
Staff resources, the ones that are on this list in
the memo that I filed are split up by industry, electric
water and telecom. And the criteria that we used is
you know, the first pass was things that had an identifiable
statutory deadline, had to make the list out of necessity.
And then there were other things that had uh sort of
an effective statutory deadline even though it wasn't
specifically listed. But, you know, for instance, uh
the 180 day transmission CCN was effect in effect immediately.
So uh structuring our procedural rules to allow us
to meet those goals was sort of a, a practical deadline.
And so there are several things on here that have practical
deadlines. And then there were a few items that are
chosen because of sort of the high priority that they
face. In the example that I'll say is ERCOT directives
and governance. That's key so that we can structure
and provide more transparency in the interactions that
our agency has with ERCOT. And so there are a couple
of additions on here that were based on either, you
know, high priority like that or just convenience.
If we already had a rule opening, we, we will continue
on with those rather than starting again. And so that's
the high level sort of way we were thinking about this.
We have a list of rules here and uh Jess and I are happy
to answer any questions you guys have.
(item:35:Commissioner Glotfetly's comments on workshops) I don't have a question. I just want to say that uh
I've heard from a lot of people that were very appreciative
of the workshop that you all had. Uh I don't know whose
idea it was, but uh they get a gold star. Because
it really was a uh an opening of the door refreshing
way to uh um get input from the uh from the stakeholders.
And I'm really appreciative that uh that, that's a
a corner that we've turned. (item:35:Commissioner McAdams' thoughts on workshops) Yeah I, I'd echo those
comments. Um, I checked with various Senior Staff
Members of the Legislature, they appreciated it. They
thought it went well. They thought public input,
uh industry input was well taken and taken in.
Ultimately it, it was logic, it was a logic-based
order that Staff pursued and, uh, now I believe we
need to endorse that. And, and follow that as much as
we can subject to change. But, uh, I believe it's a
viable plan.
(item:35:Commissioner Cobos' thoughts on workshops) Great. Um, I'm in agreement with the comments made
by Commissioner Glotfelty and Commissioner McAdams. I think
this is a formidable plan to move forward. And I appreciate
all the work that was put into the rulemaking
workshop and the layout of this memo. (item:36:Thomas Gleeson, PUC Executive Director on memo sent to Governor's Office & Legislative Committee) And Commissioners
I would just add we. Yesterday, we sent this
memo and list to both Committees of Jurisdiction, the
Legislature and to the Governor's Office. And if we
get any input in response to that. I'll, I'll
keep you apprised.
You bet. All right, well done David. Thank you Commissioners.
And, and as per the memo, we'll provide a, a sort
of a progress report at the September 28 Open
Meeting. So you can keep tabs on how it's going.
So very good, outline the things that need to
move forward. And uh, we'll be continuing to have an
eye on it, get input as we need along the way and
then execute to the process so very well done. Thank you. Thank
you for working with the members of the public and
the stakeholders on this and we'll look forward to
your upcoming progress reports. Thank you.
(item:37:Chairwoman Jackson lays out item on agency and administrative issues) Next, we'll take up Item 37. Our standing item for Agency
and Administrative Issues. Connie filed a memo.
So could you please lay out your memo? Thank you.
(item:37:Connie Corona with Commission Staff on 7-day rule for open meeting filings) Good morning, Commissioners. Yes. Last week, um,
eight days ago in case you were counting. I, I filed a memo uh
to our reminding our PUC fans about the 7-day rule
for open meeting filings. Um As you know, the Commission's
work has been proceeding over the past 2 1/2 years at
a pretty rapid pace. That didn't always allow for strict
compliance with that 7-day rule. It seems that
has resulted in some less than ideal habits for filings
on routine matters, non urgent items. And um I know
you all make it look easy, but I urge parties to remember
that for each open meeting, you all are giving thoughtful
and careful consideration to two dozen or more separate
matters. Today, it's 40. And it's simply not appropriate
to routinely ask you to accommodate filings 24 to 48
hours in advance of your deliberations. Thus, the
reason for my memo, um I urge parties to review 16
TAC 22.71 in our procedural rules to determine which
items may be late filed for open meeting consideration.
Um I'd also like to point to two filings made for this
open meeting, one by Mr. Smeltzer and one by ERCOT.
That each clearly state the reason for the information
being late filed. Um I believe in that case, it was
responsive to Commission request and delayed in
order that you have the most recent information available
for the open meeting. This is the type of information
uh that immensely helps you in prioritizing for your
open meeting preparations. And so I just wanted to
call attention to that filing and remind parties accordingly.
(item:37:Chairwoman Jackson on adherence to 7 day rule) So our expectation is that we would adhere to the file
7 days prior to the open meeting. And then of course
acknowledging that sometimes there may be extenuating
circumstances when it's not possible. But if that's
the case to please state, the reason in the memo. So
very good. I think everyone wants to um again, have
a process that is the most efficient and provides the
most information in a timely manner. And gives everybody
the opportunity they need to review it. So that we can
have the absolute best work product possible. So
um thank you very much for the memo and we'll move
forward. (item:37:Thomas Gleeson with a Staff update) Madam Chair, I had one other update for everyone's
edification for a Staff update. So as some of you all
may know, Tom Hunter is retiring for I believe the
5th time from this agency. I don't know if I'm gonna
be able to get him back again. Um, but that leaves
a, you know, a glaring void on Staff um for kind of
an Executive Counsel. And so I want to let everyone
know that David Gordon, formerly of Chairman Lake's
office has agreed to take over that role. And we're,
we're immensely grateful to him for, for being willing
to step into Tom's role. Here, here.
I'm so glad. He'll be busy, very busy. Okay. We'll go back to the
normal order of the Agenda. Now, beginning with Item
No. 2. Shelah, will you please lay out this item?
(item:2:Shelah Cisneros lays out petition of multiple MUDs appealing City of Round Rock's wholesale water & wastewater rates) Yes, ma'am. Item No. 2 is Docket No. 48836.
This is the petition of Paloma Lake Municipal Utility
Districts 1 and 2, Vista Oaks Municipal Utility District,
Williamson County Municipal Utility District No.
10 and Williamson County Municipal Utility District
No. 11. Appealing the wholesale water and wastewater
rates at the City of Round Rock at the April
27 open meeting. The Commission considered the petitioner's
appeal of SOAH Order No. 30. This item was placed
on today's Agenda.
All right. (item:2:Commissioner Cobos asks to defer consideration of item until next meeting) So I'm preparing a memo and need more time
to finalize the memo. So I would ask that we defer
consideration of this item to the next open meeting
I'm really glad she's preparing a memo on.
Thank you, Commissioner McAdams. My pleasure. Okay, very
good. So we will not be taking that the item up on
this today's Agenda. Items 3, 4, 5 and 6 were Consented.
Next up is Item No. 7. Shelah, will you please
lay out this item? (item:7:Shelah Cisneros lays out application of Texas Water Utilities & Creek Water STM certificate rights in Marion County) Yes. Item No. 7 is Docket
No. 53920. The application of Texas Water Utilities
and Creek Water Utility for the sale, transfer or merger
of facilities and certificate rights in Marion County.
Before you is an appeal of Order No. 21 filed by
Texas Water Utilities.
Do we have any thoughts on this one? (item:7:Commissioner McAdam's comments on application) Yeah. Um Madam
Chair, Members. I, I do not agree. First of all with
the assertions made by Texas Water Utilities um that
an STM is not a specific type of CCN amendment.
These dockets are for sale or acquisition of a water
sewer, sewer system only. Concurrent CCN amendments
are allowed in an STM proceeding for efficiency. Uh
but the rules and statutes governing an STM application
did not supplant the rules governing a CCN amendment
uh in such a scenario. As such, I believe notice is
required and, and I would move that the Commission.
For the Commission to issue an order in the interim
appeal, upholding the ALJs required notice and denying
the interim appeal. But would welcome any thoughts.
(item:7:Commissioner Cobos' thoughts on application) I'm in agreement as well with Commissioner McAdams.
That the notice requirements apply to the, the notice
requirements that are related to a CCN amendment apply
to an STM case.
I support it. Got three. Okay. Very good. (item:7:Motion to deny the interim appeal) So I, I would move to
the Commission issue an order on interim appeal, upholding
the ALJs required notice and denying the interim appeal.
Do I have a second? Second. All in favor, say aye. Aye.
Motion passes.
Items 8, 9, 10 and 11 were Consented. Item 12 will not
be taken up. I don't have anything on Item 13 or
14, unless y'all do? No. Item 15 was Consented. Next up
is Item No. 16. Shelah, will you please lay out
this item? (item:16:Shelah Cisneros lays out SWEPCO's rehearing application for a CCN) Yes, ma'am. Item No. 16 is Docket No.
53625. This is the application of SWEPCO for a CCN and
related to lead for the acquisition of generation facilities.
Before you are motions for rehearing filed by SWEPCO, Card
and TIEC.
(item:16:Motion to extend time to act to maximum extent) Madam Chair, I would move to extend the time to act
on the motions for rehearing to the maximum extent
permitted by law. Very good. I support it. Do I have a second? Yes. Second.
All in favor, say aye. Aye. Motion passes. Items 17, 18, 19, 20,
21 and 22 were Consented. I don't have anything on
Items 23 or 24, unless y'all do. (item:25:Chairwoman Jackson lays out Project 53298) Next up is Item No.
25, Project 53298. Our wholesale electric market design
implementation project. Today we're going to discuss
Firm Fuel Supply Service Phase 2. As a reminder,
Harika provided an overview of Staff's memo filed on
June 22 at our last open meeting for the Phase 2
program parameters to be defined.
Harika is already up here in case we have any questions. So
do we have thoughts or discussion on this?
(item:25:Commissioner Cobos' thoughts on Staff's memo) I appreciate, you know, you all waiting for me to come
back to help part be part of the deliberation on this
Firm Fuel Phase 2 initiative. And um I, I don't know
if you all would want Harika to lay out the Staff memo that
would be helpful. But um I'm generally in agreement
with all of the recommendations that Staff provided in their
memo. And um would like to highlight one point of clarification
believe that is on um Page
3 of the memo. Um
Staff talks about that they recommend that generation
resources that use fuel other than natural gas such
as oil and renewable diesel that can be stored on site
would meet all the requirements and should be allowed
to participate in phase two of this product. One point
of clarification. I'd like to highlight is that um
other than natural gas does not include coal and nuclear.
Correct. I'm, I'm in agreement with that. I think
that's helpful. Um clarification to provide to ERCOT
as the issue of the RFP and work on implementing the
procurement for Phase 2. No, we don't want to create
the door. Uh leave the door open for arguments at ERCOT
on this one man. That'd be fun. Uh No, I'm being facetious.
Okay. It's just for fuel oil just to give an example.
Yes.
So just for the record, Harika would you be willing to walk
us through that? Just so everybody hears the, the framework
that we're endorsing today. Yes. (item:25:Harika Basaran with Commission Staff lays out Staff's memo) This is for the
second contract period and has to issue the RFP by
a first. That's why they need these parameters because
these parameters currently are not in the rule or in
the protocol. So the first one is really the uh quantity
and we recommend not specifying any specific limit
and that our decide the quantity because you don't
have a reliability target or the demand curve. The
second one is the budget $54 billion was the cost cap
for the only stand by payments. And we want to keep
that the same to give a certainty to the industry.
And also for the Lord serving entities, they know what
cost maximum can be on the offer cap. That's where
we recommend a change. It's based on the fuel oil index
times a heat rate of 15 which is a generous heat rate
The reason for the to cover for the um compliance risk
or any other thing. And currently the last latest number
I got for the index from was around $12 per MBTU.
And that didn't change as of today. So we are uh the
same formula. It, it gets us $9000 per Megawatt, the
period obligation period, we still recommend 48 hours
But for the future phases, then the gas, they have
a long holiday. So people have to buy gas four day
in advance. You may have to take your guidance. We
want to allocate that $4 million among multiple uh periods.
It just something for you to think for the future periods.
Another thing really requested. Uh clarification is
expansion of technologies, some battery and some settlement
only generators are approaching them to participate
in the program. We really think we need maybe a little
bit more time because has a very specific requirements
for who can participate in this program. But our only
concern is it's not a competitive liquid market. Even
with this phase two, there is only 500 Megawatt capacity
available. So it will be good to think about how we
can make this a more liquid and more competitive market.
And just like with the other services that we've rolled
out, it would be nice to see how this plays a little
bit before we open up
the service. And then ERCOT should also continue to
use a single clearing price and take out any offers
which are at los.
I think this is a policy win. Okay. All right, good. Thank
you Harika for laying that out. And, and thank you again
for waiting for me to get back to help deliberate on
this. And I think this is um good to go for our
PV in by ERCOT on August 1. Okay. So ERCOT is here
Does that give you everything you need? Yes. Okay. They're
nodding. Yes. Okay. So, um, we'll be moving forward and
uh, ERCOT has what we need and so I'm with the show.
Thank you so much.
(item:26:Chairwoman Jackson lays out Project 54444) Next up is Item No. 26, Project 54444. We're going
to discuss the Temperature Standard Preparing for Winter
Weather Windchill. ERCOT submitted another filing
on July 13, to clarify their previous memo discussed
at the last open meeting. We have Woody with ERCOT
here. And Woody, would you come up and lay out your
memo please?
(item:26:Woody Rickerson with ERCOT lays out ERCOT's memo) Good morning Woody Rickerson, ERCOT.
So you want me to lay out the memo? Yes please. Okay. So this
was a clarification to the uh the first memo that we
put out. Um So it's divided into two parts, there's
an A and a B. So the first part is talking about
the adequacy of the weather declarations that we sent
in okay. Okay. So this is uh how do you the initial
determination of the adequacy. So the first paragraph
talks about the fact that uh when market participants
resource owners look at the chart that has weather
zones and a temperature, what do they do with that
temperature? Okay. So market participants or the resource
owners will provide a temperature and a wind speed
to ERCOT when they submit their declaration and they'll
use that temperature and wind speed to calculate a
number that's equivalent to the number on in the chart
A number they can compare against in the chart. So
that's the first requirement. That's what Paragraph
1 talks about. And what are they comparing that to
Woody? They're comparing it to the 95th percentile
minimum, average 72 hour windchill temperature. That's
in the chart. And there's a number associated with
each weather zone and their design specifications.
Right. Right. And so when they send us their Winter
declaration, tell us what they did to prepare for Winter
weather. They'll include a temperature that they use
a design standard temperature and a wind speed.
So we use those two numbers and we provide the calculation
to calculate a number that's equivalent to the 95th
percentile minimum average 72 hour windchill division.
So that's Paragraph 1. Paragraph 2 says that if
that calculated design temperature that they used is
less than the number in the chart,
then we'll consider that preparation to have met the
standard.
So if you take one of these coastal weather zone, the
uh the 95th percentile minimum average 32 hour windchill
temperature is 18.1 degrees. So when they send us their
winter declaration and it has a temperature and a wind
speed plugging into the equation. If it comes out to
be less than 18.1 degrees, then we'll consider the
preparations to have met the standard. So that's Paragraph
2 Paragraph 3 says though, if it comes out to
be 20 degrees, so they're gonna have to do some extra
work. To get that down to something equivalent to 18
degrees. Paragraph 4, just says that we're gonna
add a place in the decoration for them to give us those
numbers. Paragraph 5 says that there, there
may be some places, some plants that may not have that
number, that original design
and so they're gonna have to derive one.
Paragraph um 6. It just says that, you know, we
may request the records and stuff during the inspection.
Paragraph 7, talks about what we're gonna do with
uh uh for new facilities, right? They should have meet
the standard of the new facilities be very conservative.
So that's Section A and then it has to do. Woody,
just real quick. Will you move the microphone closer
Sorry about that.
So that has to do with the uh the preparation standard.
The uh the declaration, what goes into the declaration.
(item:26:Woody Rickerson on 2nd section of ERCOT's memo) So the second area is the evaluation um of failures.
So once the standards have been set, we we would go
into the winner. We'd have done the inspections, looked
at all the decorations. What happens if there is a
failure, cold weather related failure, a pipe freezes
something like that. So, Paragraph 1 says that um
if the facility has a apparent weather related failure
when the ambient temperature, the non wind speed temperature.
The ambient temperature is above the chart value. So
let's say you're in that zone that has 18 degrees and
you have a failure at 19 degrees. Okay. Is another word
for ambient, the actual temperature? The actual temperature
dry bulb temperature. Don't say dry
bulb. Right. That's off limits. Got you.
So that's Paragraph 1. Paragraph 2 says that, um
if so, so if it's above that, if it's below that temperature
then they met, they, they failed at a point that's
beyond the standard. It's above the temperature. We're
gonna have to investigate. Paragraph 2 says if we
go out and investigate and at the time of the failure
the windchill of the wind speed and the temperature
result in a number that is below the standard, they're
probably ok. And that assumes that, you know, the preparations
that they made are actually in place. If the preparations
say they're gonna put a wind break up somewhere and
we go out and it's not there, then that would be different
But if paragraph two says, you know, if the, if the
actual calculated windshield value
at the time of the weather related failure is below
the chart value, we won't consider that to be a violation.
I think that's an important, we won't consider that
to be a violation. However, Paragraph 3 says that
at the time of the failure at the calculated windshield
value is above that standard, then we'll have to do
some more work. And, and you assess it and I'm sure
if you'd uh uh give me some room. (item:26:Commissioner McAdams' summary of ERCOT's memo) I, I would just
uh pose a summary of what we just heard from Woody
and uh in my own language. And um
I think you could tell from our discussion at the last
open meeting that some questions need to be answered.
And I believe they have been by this new uh reformatted
um filing and in ERCOT's interpretation of 25.55. So
for the initial determination of preparedness generators
and transmission operators will report to ERCOT, uh
the temperature rating of a given facility within a
zone. So we have that if that facility's preparations
are for a temperature above the zonal chart um chart
value, additional preparation would be required in
those instances. If it's below, then no additional
preparation would be required under our standard. Now
that sounds right to you. Shaking your head. Yes, good
And we're talking about the calculated combination
of a ambient temperature and the wind. Which is chart
value.
In the event of a failure. ERCOT will determine if
the ambient or actual temperature was above the chart
value. Uh The subsequent evaluation will consider the
effect that windchill had on a generation or transmission
failure. So first, if the actual windchill temperature
at the time of a failure is below the chart value and
weather preparation steps have been maintained, you'll
consider that, then ERCOT would not consider a facility
to be in violation of weatherization standards. And
they have in my words, safe harbor at that point.
And if the actual windchill temperature is above the
chart value, then ERCOT may determine that whether
preparation measures were improper or inadequate. And
I emphasize the word may, it's your discretion to do
that and that of enforcement. Um,
and cures and remedies outlined uh, in Section 25.55
may apply. And so you'll take that two step evaluation.
Now, is that correct? (item:26:Woody Rickerson's follow-up to Commissioner McAdams' memo summary) I would add one, one bit to that in.
Uh, Paragraph 1 in order to try to make this as simple
as possible for a resource owner. And that was our
goal here. Um We said if you're a resource owner and
you're at your facility, look at the thermometer at
the time of the failure. If at the time of the failure
the temperature is below the chart value without even
looking at wind speed. If it's below the chart value
you're, you're okay. This other stuff only applies.
We're only gonna come out and look when it's above
that chart value. And then when we come out and look
when you calculate the wind speed, it may bring it
down below. Barksdale, you have approached and do you
have a view on that? (item:26:Barksdale English with Commission Staff on clarifying language) Thank you, Commissioner. Barksdale
English, on behalf of Commission Staff. Um I, I stood
up because you said the word safe harbor. And as an
enforcement guy that, that makes my ears prick up a
little bit. Sure. And um, so I just want to be clear
that when an entity is reporting its actual temperature
and wind speed values to ERCOT. And the formula results
in a value that is less than the chart value. They
will have passed one of many tests that the rule requires.
I, I hear you. Yeah, there are other parts of the rule
that, that applied this. So you have to evaluate the
entire rule of it, in its entirety. And it's not just stepping across
that one threshold or jumping that one hurdle the. I withdraw the safe
harbor comment, my obligation ends now. Thank you, sir. Okay. (item:26:Commissioner McAdams on reach out to major generators) Um Madam Chair so I, I will tell
you in the, in the background. Um I've reached out
to uh major generators including Vistra, NRG, um LCRA
And our Staff has heard back from Calpine which was
an interested party uh at the, at our last open meeting.
Feedback is they all believe this is a workable
plan. Um and that uh they could work to comply with
this standard. So that gave me confidence that I believe
this may be a workable framework and appreciate the
work of our Staff and ERCOT to articulate that. And
give the system confidence that this is not a gotcha
um system. That there is a uh that there's clarity. And
that our stakeholders have the opportunity to comply
with it. (item:26:Chairwoman Jackson's comments on ERCOT's memo) I think this demonstrates at least to me that
the process is working that we put out. I guess a memo
people had the opportunity to take a look at it. They
maybe noted some things that weren't as clear as they
would have liked them to be Staff and work together
in clarifying that. Again, I think given the direction
to the operator during the design phase. So that's
very clear. So they can be positioned to comply because
we know this is very important. And then secondly,
better clarification and direction in terms of in the
event that there is a failure. Then how does that kind
of fit in, in terms of the of the compliance measures
kind of moving forward? So I kind of see it as a
win on on all fronts. And just again, appreciate the
work of Staff, of ERCOT, and of our compliance team. And
you know, just I think all of this just makes us better
moving forward because we have more clarity.
What do you guys think? (item:26:Commissioner Cobos' thoughts on ERCOT's memo) Agreed. I, I agreed on, on all points.
And thank you, Commissioner McAdams for taking the
lead on this important issue. Um and it, it the whole
concept of weatherization preparation standards is
an evolving process, right? Um You know, we have Phase
1, we have Phase two. You know we, we now have Summer
in place and we have FERC and NERC. That are in the process of
adopting their standard at some point, we'll have to
revisit the standards. But as the process evolves,
what's important as I think Chair Jackson's highlighted.
Is that the industry as a whole evolves with that process
and rises to the standards that we are putting in place.
And, and it's a, it's a working work in progress. But
we have received a lot of great benefits from these
weatherization standards. And um got a lot of good information
from the stakeholders, both the generators and the
transmission owners. On their practical realities and
um in, in their areas of how we can make this all
work. And, and I think that we have come a long way
and as the process continues to evolve, I think we'll
even garner more benefits in the future.
(item:26:Commissioner Glotfetly's thoughts on ERCOT's memo) I think we've ended up in a good spot and I'm eager
to see us go forward. And as in everything here at the
Commission. If it needs to be modified, I know we'll
do it. So I appreciate your hard work Woody with with industry.
Barksdale as well. So, thank you. I'd also like to say this
is a lesson for all Commissioners at the dais. That
if you say one thing at a House Oversight Committee
Hearing, then you've got ownership of an issue. And
um so. I, I appreciate ERCOT working with us through
this. With that Madam Chair, if you would entertain
it. (item:26:Motion to direct ERCOT to adopt memo as it relates to weatherization and Rule 25.55) I would move to direct ERCOT to adopt the methodology
described in their memo dated July 13, 2023, as it
relates to weatherization. And, and Rule 25.55. Second.
Do we need a motion and a second?
We need this tied to their memorandum so that if this
becomes a dispute, we have a record.
(item:26:Shelah Cisneros clarifying motion to adopt memo) So to clarify Commissioners, are you anticipating that
we would have an order after this vote? Barksdale, can you
write an order? How, how does this work? This is new
uncharted ground for us, but we need it tied to that
memorandum, just like we did on Firm Fuel Service
on another topic. It would, it would actually I'll
jump in here. I think that would be in our group. (item:26:Shelah Cisneros and Barksdale English on options for motion to proceed) But
if you, if you want to take a motion to
take a vote on this. And direct us to draft an order
accordingly, we can work on that.
If we could offer an alternative, you also could direct
Staff to memorialize your, your conversation in the
form of a memorandum. That gets filed in the same project
as Woody's memo that summarizes your conversation.
That's a, that's a great alternative. And I think that
establishes a pathway before we start documenting this.
Especially on issues that, that may be contested in
future, which certainly a standard maybe so. (item:26:Motion to direct Staff to provide a memo with directions for ERCOT) I would
move to direct Staff to provide a memo. That is
consistent with our discussion and uh provides direction
to ERCOT. Second.
All in favor, say aye. Aye. Motion passes. Thank you.
Thank you all very much. Item 27 was Consented.
I don't have anything on Item 28 ,unless y'all do? (item:29:Chairwoman Jackson lays out Project 54941) Next
up is Item No. 29, Project No. 54941 - Project Generation
Company and Self-Generator Compliance Updates. PUC
Staff filed a memo. Mariah is up here and she will lay
out her memo. (item:29:Mariah Benson with Commission Staff on market information update) Good morning, Commissioners. Mariah Benson,
Commission Staff. We filed this memo to provide the
market information um in Project No. 52796 - Review
of Market Participant Qualifications and Reporting
Requirements. We updated multiple rules. One of such
rules was 25.109 for Power Generation and Self-Generator
requirements. Of the, of the requirements made in
25.109, we included a requirement for them to demonstrate
compliance with the updated requirements to demonstrate
compliance. They had to file a form demonstrating that
compliance um of the power generation companies and
self generators in the market. Over 280 have not filed
that form which was due June 1. We're recommending
extending the deadline to August 18. To provide the
market more time to file that and to put into reference
280 not filing, that's around 40% of the market.
After August 18, we would, we would send
them to the division of enforcement and compliance
to further investigate and determine potential compliance
actions for those power generation companies and self
generators. Mariah, would you say that 40% non compliance
is not ideal? 40% is definitely not ideal. And to clarify
to um part, part of this form. We're requiring them
to file. It's not owners. It's, it's really just providing
us updated contact information. And so, a lot of
those companies may no longer be in the market. We
just are unaware, they never had to come in and file
a relinquishment. So we're really just trying to get
a sense of what the market is. Think this is a shot
across the bow or a flare in the sky. So if everybody
would take note, please comply.
Or we'll introduced you to Barksdale. Yeah.
(item:29:Chairwoman Jackson surmises next steps) Okay. Thank you very much, Mariah. Just to reiterate noncompliance
will be submitted to our Enforcement Division after
August the 18. Okay. (item:30:Chairwoman Jackson lays out Project 37344) Next up is Item No. 30, Project
No. 37344. Commissioner Cobos, you have an update
that you would like to provide. (item:30:Commissioner Cobos update on action from the Entergy Regional States Committee) Yes, thank you, Chair
Jackson. Just wanted to provide an update on in
action taken by the Entergy Regional States Committee. Um MISO
is currently undertaking a long, long range transmission
planning initiative. And that includes looking at transmission
development across the entire MISO region. Um on a tranche
basis. So starting with North and North Central region
and um those were Tranche 1 and Tranche 2. And now
MISO is focused on um Tranche 3. Which is the South Subregion
and a big um uh very significant topic on, on this
LRTP process that MISO is undertaking is how the costs
of those projects transmission projects will be allocated.
And so, um you know, MISO had encouraged us, us being
the MISO South Subregion to provide feedback on our
perspective on cost allocation for the Tranche 3
projects that would we built in sub South subregion
where Entergy Texas is located and so on. June 30
the Entergy Regional States Committee Board of Directors. Unanimously
adopted a resolution asking MISO to adopt a cost allocation
methodology. For Tranche 3 long range transmission
planning uh in, in the MISO subregion that reflects the
general core principles listed in the resolution. At
a high level the E-RSC's resolution is requesting
that MISO develop cost allocation methodology for the
Tranche 3 projects that is not based on postage stamp cost
allocation and that's what they have approved in the
North and North Central regions. And basically this
would allocate cost. The postage stamp allocation would
allocate cost to entities and customers that they may
not be receiving any benefit from the project. So um
instead, the E-RSC asked that MISO take into consideration
consideration your general core principles in developing
the cost all cost allocation methodology that are based
on better aligning costs with expected beneficiaries
by allocating costs as accurately and granular grandly
as possible based on cost allocation and beneficiaries
pay principles in an equitable, equitable manner to
protect all consumers. And um to interconnecting resources
that receive benefits from the LRTP project. The
E-RSC has requested that MISO's Terra filing at FERC with
the cost allocation methodology for Tranche 3 long
range transmission planning um initiative reflect these
core general principles. We will be in the process
of engaging with my staff um and stakeholders on working
to develop the, the actual detailed and the, the
methodology that would capture those general core principles
Um We expect that to happen throughout this Fall. I
think MISO had wanted to make a terra filing at FERC by the
end of the year but stated at our E-RSC meeting that
they would extend those discussions into the earlier
part of next year if there was, you know, some productive
discussions being had on cost allocation for, for those
three projects. And um I'm reporting on this as the
President of the E=RSC and wanted to bring this to
your attention and have circulated copies of the adopted
resolution to your offices and have or will be filing
the resolution in Project 37344. Very good. Great update.
Commissioner Cobos, how do you think? I mean, given the dynamics
of MISO, MISO North Central versus South? Um how do you
think this will go? (item:30:Commissioner Cobos' thoughts on MISO regions) Well, the two of the regions are
okay with um post stamp allocation and um are, you know
I, I think that they would have liked to have maybe
everybody on the same page that can approve the entire
initiative going forward through the tariff. But unfortunately
we're not like all the other states in the South and
we um are trying to assert our position on these issues
because we just have a different footprint in the South
with different factors impacting um our region, especially
Texas with, you know, the low growth and everything
going on there, the generation plants being built um
just want to ensure that ultimately, if we do need
the transmission, that costs are allocated in a fair
equitable manner so that our companies in, in the South
are not paying for transmission that, you know, our
ratepayers rather are not paying for transmission
that is, is not needed to serve their, they're needed
to be being served by their company. (item:30:Commissioner McAdams' comments on FERC updates) So it's an interesting
dynamic at FERC right now. They just rejected a uh a waiver
process um for SPP uh that, uh basically allowed uh
a smaller LRE to be exempted or reduced in terms of
their um transmission cost allocation. Um And, and
so those costs were uplifted to the rest of the system
you know. So therefore, other LREs had to take a greater
share and they first rejected this waiver process that
allowed that smaller LRE to be exempted from the cost
And uh because they, they wanted to try to find regional
um unanimity, uh was uh a word that Christie uh Commissioner
Christie used. So I don't know that may have been a
signal that hopefully MISO South and the Entergy states will
be heard more within the ISO. (item:30:Commissioner Cobos' comments on major initiatives) Well MISO has really
encouraged um the E-RSC or the MISO South region to provide
feedback on a lot of their major initiatives not only
in transmission in the LRTP process, but also in
the resource aqua reforms. And um you know, we, we
are um our own voice in the South and I work through
the organization of MISO states as well. With a broader MISO
um state regulatory body with many states involved.
And, but I do think that it's important that um we
provide a voice for the South subregion through the
OMS. But more specifically through the Energy Regional
States Committee that was formulated just for that.
And we need to use that process as a voice to represent
the MISO South as on a consensus basis where we can
on these very important topics.
(item:30:Commissioner Glotfelty's thoughts on postage stamp pricing) Um I would uh I appreciate the views of the Commissions
in the, the RSC, especially in the South. I'm not totally
aligned with it. Honestly, I understand it and I recognize
it. But postage stamp pricing works in Texas and it's
very hard to
pin all cost on a cost causation. Um When you're looking
at such a massive system of plants and wires over a
long period of time. So, you know, when we build a
line in North Texas and it goes into those folks in
the Rio Grande Valley don't necessarily get the benefit
of that line in North Texas. But there will be a time
when they're building a line in the South, it's not
going to benefit the North, but it's going to be paid
for in T costs. Unfortunately, in all of these other
regions, we don't have the benefit of a single jurisdiction
like we do in ERCOT under Texas law. You know, we have
different states under different laws and they have
different rules for transmission, retail, transmission
and wholesale transmission. And I think it's unfortunate
but I appreciate that you're bringing this to us. I
know why. Um, it is this way, I think it will change
one day. But while it's still this way, we got to work
for our uh regulated utilities and our ratepayers in
these areas and make them not pay more than their fair
share. (item:30:Commissioner McAdams' thoughts on different regions options) It's also interesting to see with the different
ISOs like ERCOT and I think you'd agree with this
is, is a more integrated system. We have more transfer
capability within regions than core of MISO has this one little
500 mega
that uh it's, it's held together literally by a shoestring
you know, and um so when it gets to cost allocation
you're like, well, what benefit are you truly seeing
in ERCOT you can kind of see that it makes that system
even more integrated and allows regions to share more
um. (item:30:Commissioner Cobos' follow-up to the Commissioner's comments) I appreciate the comments and I, and I think that's
you know, what a distinction, right? Um The ERCOT market
is an integrated system in one state where you can
uh uplift the cost to our rate payers within the state
And arguably, you know, you can make the, the argument
that, you know, everybody benefits within the state
right, within the ERCOT market. But when you um have
you know, only a portion of one subregion that is in
Texas and cost will be allocated to Entergy uh rate
payers for transmission being built in Arkansas or
Mississippi, Louisiana, that, you know, we gotta be
more mindful of cost allocation. And I agree with you
it will be um you know, a little bit more tenuous to
come up with a methodology but invited our feedback
and that's the way we feel and we'll figure out if
we can get there in some formidable way that can be
approved by FERC and, but we got to stand up for our
ratepayers and, and our footprint here in Texas. (item:30:Commissioner Glotfelty on previous Entergy footprint) And
I would say in Entergy, um I mean, we, you, it used
to be a, uh, with an Entergy footprint. It used to all
be cost allocated among all of the Entergy system costs
among all of the states and they unwound that. And
so, um your point is your, your point is right and
uh, it will change when it changes and uh, you're supporting
the position that benefits our ratepayers. So thanks.
Thank you, Commissioner Glotfelty. Thank you for doing me. Okay
very good, good discussion. Uh I don't have anything
on Item 31, um y'all know? (item:32:Chairwoman Jackson lays out Project 41210) Next up is Item No.
32, Project No. 41210. And I believe Commissioner
McAdams, you have an update. Thank you, Madam Chair.
(item:32:Commissioner McAdams update on activities within SPP) I will give a brief update, um, just on uh, activities
within SPP. Um, but I'll give a more comprehensive
update. If, if I may suggest, uh, possibly our
August 3 open meeting. And, uh, there's a great many
activities in SPP right now. Yesterday, um, Austin hosted
uh at the Barbara Jordan Building right across the
the walkway there. Um, a meeting, a in-person meeting
of the Resource and Energy Adequacy Leadership Team
uh for which I chair. And um at this meeting, we discussed
it was a 9 hour meeting uh working lunch. Um It
was a, a crusher of a meeting. But we discussed um flexibility
and ramp uh associated with capacity obligations. As
well as their existing market products uh mechanisms
to increase their supply of generators. Who have the
capabilities of flexibility and ramp. Um They, we also
discussed a policy that is moving its way through the
process which will determine the expected Load carrying
capability of an LRE. Their accreditation for the
purposes of determining our resource adequacy and reliability
standard, as well. As the performance based accreditation
methodology of generators of all resource types within
the region. We discussed value of loss Load, very consistent
with what we've been doing here in ERCOT. And a subsequent
study that should be proceeding and hopefully uh producing
results in Q1 of next year. Which will help inform
a reliability standard um that uh subject to the outcomes
of our group with the real team should be before the
RSC for adoption in Q1 of next year as well. We
also discussed policies to retain generators that have
announced an intention, generation facilities that
have announced intention to possibly retire. Uh As
we've noted in other proceedings that the Commission.
Uh SPP currently does not have an RMR mechanism but
theoretically could develop one in the next year. Um
We also uh we also discuss maintenance outages and
how they relate to capacity obligations. All of this
centers around a central theme of how do we pay for
availability, compensate for availability or penalize
uh LREs for lack of availability during critical hours.
I think we're all familiar with that concept. We've
had a rigorous discussion here. Um Ultimately, all
these uh topics fed into a scheduling and, and
planning work plan, which is uh somewhat consistent
with what uh poor ERCOT trying to devise for us. Um
And uh it's a, it's a lot of ships that we
hope are move. I think we're, that are moving in the
same direction now, but it's a, it's a lot to coordinate.
Um I would like to uh also note that um the real
team, the next in person meeting uh will be in Dallas
in September 7th and 8th of this year. And um it's
going to be a two day, uh two day meeting. The first
day will consist of a resource adequacy summit. Where
uh SPP is inviting adjacent ISOs and reliability leaders.
Uh Jim Robb of NERC has already accepted and will be there.
Arshad Mansoor, President CEO of EPRI will be there. Um We
also have representatives from MISO New England um
plan on attending. As well as interest from at least
two FERC Commissioners um and potentially three. But they're
trying to, you know, trying to devise a way to narrow
that down so that there's not a quorum problem. But
there's heavy interest nationally in trying to um try
to provide forums where the of a reliability standard
concept can be discussed on a national basis and what
that involves and what defines resource adequacy. Um
not just within ISOs but regionally. Um I, I would
also say that uh E3 will be present presenting
at uh the first day of the summit. To talk about valuing
availability. And I think they'll have a very similar
um proposal to what we've seen in Texas with the PCM.
But as it might relate to uh ISOs with more
vertically integrated utilities and capacity obligations.
So I think it'll be a very interesting conversation
ERCOT has been invited. Um but Texas will certainly
have a presence. Uh I, I think uh a PUC Staff is
planning on attending as well and we hope to have a
very rigorous discussion over those two days. And I
just wanted to highlight that for the Commission. I
sure hope ERCOT's there. Well, I mean, I'm not gonna
force 'em. They got a lot of stuff going on but it'll
be a good discussion. I think I bet they could find
one person. Well, maybe so.
But anyway, that concludes my uh summary Madam Chair. Well, very
good. And thanks for all your work and your, um, I
guess marathon efforts yesterday and representing the
Texas interest. (item:32:Commissioner Glotfelty on Commissioners with leadership rules outside PUC) Yeah. you know, it, uh it's actually
great to see, um Will in charge of the REAL team and
Laurie in charge of the, E-RSC, you know. Texas is
known for not really participating in a lot of these
groups outside of ERCOT. So to have you all on leadership
teams and taking positions there is, I think a really
good uh benefit. They're volunteering us now and I
think it speaks to what we've been going through over
the last 2 1/2 years. The detriment of your family and
your personal life. Uh, this only leads to something
else. Yeah. Well, Carly's not watching so.
(item:32:Commissioner McAdams' follow-up comments) I, I also want to highlight yesterday to show how we're
herding cats. Between poor Lori and her resolution.
And yesterday I nearly lost a vote on recommending
a Winter capacity obligation in, in the SVP. It came
down to like, I think two votes, Richard, wasn't it
I mean, it was a hairy deal. And um, Commissioners
were walking away, walking out. And uh, so this will
be taken up this weekend. So after our open meeting
today, Sunday. I'll fly up to Minneapolis, Saint Paul
Minnesota and the RSC will vote on the Winter capacity
obligation. And this thing barely passed the REAL team
and everybody had their own reasons for opposing it
But it's a real shootout just trying to provide the
the mechanisms to ensure resource adequacy is not an
easy thing and these are not easy decision. But.
It's good that you do the uh the Summer resource adequacy
number in the South and you go to the, the North. Don't bring that up
Jimmy and the RSC meeting.
Okay. Very good. (item:33:Chairwoman Jackson lays out item with standing ERCOT discussion) Next up is Item No. 33. Uh
This is our standing item for ERCOT discussion. ERCOT
filed a memo in Projects uh 53298, 54444 and 55156. At
our last open meeting, we asked ERCOT to provide a work
plan for accomplishing the remaining market design
work that was in front of us. We have ERCOT here today
and if y'all could come on up and provide us with the
highlights of your memo.
Thank you.
Thank you Kenan.
(item:33:Kenan Ögelman with ERCOT highlights ERCOT's memo) Good morning Kenan Ögelman with ERCOT. Um So uh we, we laid out a memo
whereby we reviewed the 88th Legislature recommendations
and uh have kind of three components within the memo.
Um I would just say that there's probably gonna be
more work to be done as we discussed after the resource
adequacy requirements. Rulemaking is kind of concluded
that will probably identify some of the next steps
or other paths that you may be interested in pursuing.
But that doesn't appear to be timely to assume anything
from that at this point. So our focus was on an ORDC
change in the memo, we lay out a recommendation
that we proceed with the Board recommendation on the
bridge solution for ORDC. Um So that, that would be
component number one, the second component is around
um the dispatch DRRS uh program. Um We are uh as, as
I spoke. Um I think at the two open meetings ago, we
are laying that out, identifying an option that's deliverable
by the December 2024 deadline. And we plan to have
a workshop. We've, I think, put on the calendar for
July 27. A workshop to, you know, get a stakeholder
feedback on what we're proposing so that um uh we,
we'd like to continue moving forward on that. And then
the last one is uh PCM. Uh in, in the
memo. And uh by statute, there is uh at least uh some
guardrails around um what to, what to do in terms of
moving forward with PCM. The main point we would
make there is that there are, I know you all took a
straw vote or a vote to move forward with PCM, but
there were a lot of components that still were remain
to be defined around, for example, just to illustrate
the forward market and exactly how that would work
Um And uh so, so that, that's just one example, but
there's a variety of components that probably need
to be further defined. And it seems to us that given
our estimate that we need kind of 2 1/2 to 3 years after
we've defined all the rules and parameters of that
to deliver, that we probably need to kick off some
form of workshops or activity to uh kind of solicit
feedback on how to fill in the gaps if that is where
y'all want to move forward. Still. Um So that's kind
of the, the memo again, our conclusion, uh outlines
that we would like to come back and give you regular
updates both on these components and as other decisions
develop what uh follow up that we may have to provide
you. So that that's essentially the memo as it's laid
out. (item:33:Chairwoman Jackson on ERCOT having a workflow process delineated) So part of what you kind of outlined here, I guess
in the first memo and you kind of recognized it that
was there was a need to um you know, do some potentially
some additional work. And I know from my standpoint
I would very much like to see a workflow process delineated.
And set forth and put out at least in, you know what
to me are kind of like the top five top of mind
things kind of moving forward. Which would be the reliability
standard, the real time co-optimization, the ORDC,
the PCM and DRRS. So that we know, you know, what are
those segments of work? What is the expectation from
the PUC? What are those timelines that we have in terms
of what we expect to happen along the way? So we have
a lot of moving parts. But being able to kind of delineate
it in a very concise way that is used within the project
management world. So that we see the elements, we see
the deliverables along the way, we can look for synergies
between the two. And we're very much from the PUC standpoint
as well as from ERCOT standpoint aligned in terms of
what the work efforts are going forward so that we
meet the end game. And so I know I've talked with Christie
about this and as well as Pablo and I know my expectation
would be. To maybe start next week, reaching out to
the PUC Staff. So that PUC staff and ERCOT can kind of
come together and maybe look at what a template might
be. Maybe start with the reliability standard so that
we can get something like this in place. To be able
to kind of again from a project management standpoint.
Better understand the workflow and have something that
in my mind would be, you know, almost uh a diagram
have it in a diagram format. So and we can change it
over time as you mentioned, you know as, as things
arise in terms of continuous improvement. (item:33:Commissioner Glotfelty's thoughts on an ERCOT project management component) Madam Chairman,
you're preaching uh my song. Um He's got the same diagram.
This is Will's. He made me give it to him. That was that this, it's
exactly what I was thinking. Which is if we could show
the industry and the Commission and the Board, uh the
products that are being worked on and when deliverable
and inter deliverables are expected. It would help
uh certainty in the market. Uh So they know uh it will
hold our feet to the fire as well as yours. And something
like that could be a beginning and you can have G
charts underneath each one to show timelines for those
So um I, I love the project management component that
you're talking about. (item:33:Commissioner McAdams' comments on ERCOT having a project management component) Chair Jackson has some great ideas about how to make
that from an engineer's perspective, about how to make
the detail. And again it, it can be uh somewhat
aspirational, but it'll give us targets to hold us
accountable too. (item:33:Commissioner Cobos' thoughts on work flow diagram for ERCOT) Um I think it's a great idea, you
know, the work flow chart diagram will not only help
us and help ERCOT and the stakeholders, but also the
Legislature understand where we're at in this entire
market design reform effort with these key initiatives.
Exactly. So we're not having to constantly answer.
Well, when is something going to be delivered, we have
a general target frame, you know, target timeline that
everybody can see including the public. And and I, I
think that that is a great idea and I'm wondering if
that could be folded into this detailed status update
that's in this in here where you align the blueprint
with the new initiatives from the Legislature? Is that
what you envision this be folded into? (item:33:Kenan Ögelman on working with Commission Staff) I think that's
one one potential uh area. Uh but we would be happy to work
with Staff and, and find the right place or places
where those that, that needs to be presented. Um And
I can tell you that uh we have taken your feedback
to heart and you've already kicked off uh initiative
to lay all that out. It's a two fold process, right
So I'll ask Connie if she's got any thoughts on this
or Thomas if they want to weigh in. Yes, ma'am. Thank
you. (item:33:Connie Corona on creating a Staff Work Team) Uh Staff has, has been discussing this internally
and I think we're going to um create a, a work team.
With uh both market analysis folks and rules and
projects. We have certified project manager now in
our rules and projects group. And um he will be supporting
um both ERCOT and, and PUC Staff and getting you all
to, to a place that um has a tool you can use
to track these projects. Um And the um the next open
meeting being just two weeks from today, I, I don't
think that's a realistic uh timeline to get a, a detailed
tool that you need. So, um we will plan on bringing
that to the August 24th open meeting and that means
we will file it on August 17.
Which is again and that would come from ERCOT.
Yes, ma'am. I have a couple of questions. I'm just
kind of going through and I'll stop at each major point
(item:33:Commissioner Cobos' question on reliability standard) But, uh, the next topic I wanted to talk about was
the reliability standard. Um, in your memo, you don't
outline a time period as to when ERCOT will have their
deliverables completed. Um Can you speak to that um
completion timeline or expected completion timeline
Chrissy's up? Ok. Thank you,
(item:33:Kristi Hobbs with ERCOT on reliability standard) Kristi Hobbs with ERCOT. And so the reliability standard
we've uh laid out some initial milestones and I think
you know, we'll be able to uh as Chair Jackson noted
and get that into the work plan very quickly as we've
got milestones laid out. Um But we'll be working to
bring you some of your, the scenarios we're targeting
the second open meeting in August. We'll start to have
some of that information to be able to share with you
Um But the endgame is that by, I think uh our call
right by uh November is when we should have the ERCOT
work completed. And so we'll be working with Staff
on what the path forward is for rulemaking. Um When
does that start? Um So all that work can be done in
parallel. Does that include the completion of the vol
study? We are just now in finalizing uh the work
with the vendor. Um So I don't have a timeline for
the vol study yet. Have you hired a vendor? We are working
on that with negotiations right now? Yes. Okay. Because
that, that's a very central piece of this entire process
um of the reliability standard. So I think, you know
we, we definitely gotta get that piece going and, and
completed so that we can fold that into our reliability
standard. Um deliberations at the back end. Um you
know, as, as that discussion comes to the PUC.
(item:33:Chairwoman Jackson on workflow being final end goal) And again, you know, demonstrating the value of having
you know, a workflow so that as we have different pieces
that are integral to the final work product that we've
identified with all the, what they are and what the
timeline is and how they're kind of working, um you
know, collectively to make the final end goal. Um you
know, as efficient as a and as um productive and as
valuable as, as possible and um anything else on the
reliability. (item:33:Commissioner McAdams on codifying agency rules) So, so I I agree with that, I, I believe
uh in terms of uh in my view, and I've kind of
been uh trying to say this for sometime and in different
projects, but all roads lead to Christmas for us and
then Christmas and ultimately for Staff having a workable
um strawman at that point for a PFP because some of
this is gonna be an agency rule. I I religiously believe
that that once we center around what that standard
is, we need to codify that an agency rule because then
the market sees that somewhere in agency rule and it
has the force of law and separate. And apart from the
debate about mandatory versus target, um there is a
goal on the part of the State of Texas, um especially
within ERCOT that we will achieve a standard through
either a sum of all part strategy or one big strategy
And, and the Legislature sort of spoke to that during
the session, so I won't open up that can of worms now.
But um I believe this work plan uh approach and, and
delineating how the projects converge toward a, a central
goal will be very useful. And I believe ultimately
by the end of the Fall, uh the Legislature will see
us substantively deliberating with uh independent data
points upon a standard which will help us achieve
reliability and maintain it. Absolutely. (item:33:Commissioner Cobos on enshrining the reliability standard withing the Commission's rules)And I agree
with you on in enshrining the reliability standard
in our rules because as we do with all Legislation,
that's how we implement Legislation and the reliability
standard requirement was in SB3. So thank you
for that. Anything else in the reliability center?
Okay. And, and just to reiterate, I think the point you
made about making sure that if there are studies that
need to be done. So that we have the most recent data
available in order to move forward and get the best
product we can, that's important. And I think you,
you, you pointed that out. Well, the value of Load
study is extremely important because one hasn't been
done in ERCOT. To the extent that, you know, I think Commissioner
McAdams was requesting and I think is important and
other markets conduct throughout the country. (item:33:Commissioner Cobos' comments on real time optimization project) So um
the the next topic I wanted to touch on was the real-time
optimization project. And, and thank you for the timeline
on and in terms of delivery. Well, I know this has
been a topic that has been uh discussed for quite some
time and I know that it remains a priority for the
Commission. I think I can say that on behalf of us
and, ERCOT as a is articulated. Um and, and I think
it needs to remain a priority and when, when you um
just for, so we're all clear on the record. RTC will
be implemented and operationalized before the next
ems upgrade.
That that's the expected timeline, but there is a ems
upgrade currently going on. Just want to make sure
that that's not considered the next up. I'm thinking
about the next one after this one is completed this
it's Fall. And when, when does that start, what year? It's
I believe
2028 isn't it? (item:33:Kristi Hobbs on real time optimization project) We can follow up with you to get you
the exact timelines that are on our road maps. But
the goal was is we've kicked off the real time optimization
project, we initiated that work because we have a window
of opportunity now, as we complete the EMS upgrade
this November, and there's this window of opportunity
before the next EMS upgrade before the next MMS upgrade
Um And that was why it was important to get the effort
kicked off this Summer. Can you explain a little bit
more about why this is a window of opportunity? Uh
Meaning that um we've got the, the, the resources available
to work on the effort because they are not focused
on another uh upgrade of the systems. Well, and you're
getting the, the the work done before another upgrade
hits, which would delay the process if you don't meet
that timeline correct by years potentially. So that
that's kind of what the the goal is right to make sure
we get this big project up and going once and for all
before the next EMS upgrade. Because we don't get there
by the next EMS upgrade, then it will be delayed for
potentially years and. To delay it still further, in
my view would be a strategic problem for the system
given renewable penetration and co optimizing the broad
suite of ancillaries that we have and frankly making
the Legislative framework now as a result of HP1500
work together, right? So HP 1500 speaks to the implementation
of it. Sure does and not that that project needs to
be completed. Um Well, before E Ems freezes us out
again. Um So it, it, it's a problem if it's not so
very good that ERCOT has recognized. Thank you. Yes
And that will be great to see in the workflow chart
as well. Um If anybody doesn't have anything on RTC
anymore, (item:33:Commissioner Cobos' thoughts on ORDC Price Force) I'd like to move to the ORDC Price Force.
Um And thank you for, for um highlighting this, I think
uh you know, we, I wasn't here the last time you
all talked about it. I know we still have to make a
decision on it. I think I just want to reiterate that
the main priority from my perspective continues to
be to in, in self commitment and reduce RUC. Um But
we have to ensure that these price floors that are
added to the ORDC will in fact reduce RUC or it
will need to be a bridged from my perspective. Um I
know DRS is intended to required to reduce rock. And
so, you know, this is, I think it's important that
we start taking steps in that direction to preserve
our long duration assets that help us meet multiday
winter events. And so, you know, I look forward to
moving forward to take action on this at the appropriate
time I believe will be next month.
Well, hold my fire. Do you have any thoughts on? Ok
Um (item:33:Commissioner McAdams' comments on bridge) So many people have said um bridge, what is this
a bridge to and I have an answer for that. Um This
is certainly a bridge to DRRS. Um I, I believe uh this
is something that we can implement uh sooner than DRS
ultimately comes online. This will help the system
um begin to induce self commitment to induce market
driven behavior, which is the point of ERCOT is a free
market uh with independent actors acting in their own
self-interest. Well, this is a signal act in your self
interest, uh commit um committing both day ahead and
committing the energy market. Uh So I am open to the
discussion around constraints ensuring that this is
a bridge to something. But ultimately, DRRS will take
some time um to, to become active. And then once DRRS
is live, just like every other Ancillary, there'll
be kind of a beta testing period where we iron out
the issues related to its activation and engagement
in the system, just like we see now with ECRS, there
will be probably liquidity issues, there will be all
these kind of um
challenges that ERCOT will work through once it goes
live to normalize the process by which it is it is
used and the way the market sees its engagement in
the, in the system. So I'm open to those type of uh
parameters once we do finally um discuss uh which way
we're gonna go on this. But I, I see value in the
bridge and I think the market the loads should see
value in the bridge even though I know it was debated
Um This spring and consumer segments found uh found
it problematic but if it helps reduce the rucking,
it allows the market to function as a market. And that's
I I just don't think we can continue down the road
of, of acting in emergen on emergency conditions for
another year and a half. That, that will be four years
of acting under emergency protocols at that point utilizing
RUC to the extent that we are for capacity. Um I think
we've got to find another solution and I believe this
was a means to do that. (item:33:Commissioner Cobos' follow-up comments) Good point on, you know, obviously
I, I very much consider the consumer perspective in
every decision that we make and what, how I view the
bridging solution is not so much and it will provide
revenue, additional revenue, stability to existing
generation plants. And I think that's a good thing
But from my perspective, it's, it's um you know, first
and increasing self commitment to reduce RUC. And,
and then that will provide a stable revenue stream
and remove distortions that could actually cause more
higher pricing outcomes for consumers. Yes, exactly
And so um you know, to your point about the bridge
the bridge to where I mean, I hear those questions
too and those statements. Um ultimately, I think, you
know, as many people, you know, as we all discussed
it this ORDC price war concept, you know, we asked
ERCOT to evaluate bridging solutions to long term resource
adequacy reform. And so they went back, Canon and team
went back, came up with a bunch of options they vetted
and they presented to the board, the board approved
the RR DC price wars. Um but the bridge was, although
it, you know, has been very much paired with the PCM.
It's really a bridge to long term market reform
changes like the addition of DRS, like the implementation
of RTC, like the implementation ultimately of PCM.
So, um you know, in my opinion, not exactly tied
to one mechanism but tied to long term market reform
change that will ultimately um enhance reliability
and moves in the direction of allowing the market to
work where we don't have to rely on RUC as much.
Well said. (item:33:Commissioner Glotfelty's response to Commissioner Cobos comments) All I hope is that the um so we're creating out of
market actions to solve problems that were created
by out of market actions. And it's my hope that we
ultimately get back to uh with RTC and these other
uh functions, a market structure that can rely on uh
price signals itself to uh to generation. And um we
continue the ORDC since 2017. Has been moved and moved
and moved. And now we're putting a floor and all this
is capacity money in some form. And at some point in
time, you know, we, we just need to let the market
work. And I think we're moving in that direction. But
to me, it just must be noted that all of these actions
are a result, almost all of them are a result of our
initial actions that we, that ERCOT took, you know
with the Commission after the Winter storm. (item:33:Commissioner McAdams on operational capacity) to address
emergency conditions and the subsequent emergency conditions
that have existed since COVID ended, the economy came
back, Load began to increase renewable penetration
increase. All of this was experienced one after a 12
punch Winter Storm Uri. Um And, and then the, the dynamic
economy of the State of Texas and, and uh population
growth. And so I, I do not necessarily agree. Well
my memo just keep pointing back to that memo, it is
capacity but it's operational capacity, it is performance
driven capacity. And that's an important distinction
And uh it's, it's a Texas distinction and III I think
the legislature recognized that. So, um they, they
recognized that a bridge solution may be forthcoming
They did not prevent us from doing it. They certainly
had that opportunity. They wrote a lot of stuff in
the law this session and, and I believe they, they
have allowed us the discretion to, to look at this
as a potential solution. The Legislature took great
interest in RUCing this past Session and, and uh there
was a lot of discussions about the need to reduce RUC
I think there was a recognition that um RUC needed
to be reduced and, and, um, you know, noting how much
you know, it had been used in the past and we understand
right there are emergency conditions after year and
now we're trying to unpack everything and let plan
for the future. And, um, so that's where we are right
now and it's really pretty much all I have to say about
the RDC price boards right now. Sure. I'll, I'll be
quiet too. (item:33:Commissioner Cobos on PCM) Um One more topic I wanted to touch on because
I think it's important uh the PCM um and the I
know noted the um updated cost analysis that, you know
we will have to require as a result of the House Bill
1500 requirements. And um you know, in studying House
Bill 1500 it's clear to me that um that the Legislation
requires an evaluation of the cost of new entry as
we're looking at workflow diagrams and ensuring that
all our key priorities are implemented and everything
Knowing where all the key components of all the major
initiatives are. I think that one, one key study that needs
to be initiated by ERCOT is a cost a new entry study
because you will have to have that in order to complete
the updated cost assessment required by House Bill
1500. And I know that right now, ERCOT has a has a
cone figure in their protocols that was established
in 2012 over a 11 years ago. And my understanding is that
there was no detailed coe study conducted to come up
with that 105K figure, arguably it's outdated, given
all the evolution of our market over the last 11 years
So I don't think any real detailed in depth study of
cone has been conducted in ERCOT to determine what
is the cost of new entry. And for what really, I mean
all the other markets um conduct a detailed cone study
on a, on a cadence. Um I know that a certain specific
cadence, like for instance, PJM, MISO and MISO New England
I believe are on a four year cadence where they hire
an independent consultant that comes in, conducts an
in depth cone study and in the interim does annual
updates because as we all know the market dynamic and
co is ever changing, um I know my conducts one on an
annual basis with their internal staff and the IMM
and um it takes some time and it takes, you know, from
I understand, depending on, on um you know, the level
of engagement, ERCOT and the independent consultant
have with stakeholders and other and the complexities
of the study, it could take up to a year. So I
just would like to understand if, you know, maybe you
don't have the answer right now, but I do think that
ERCOT needs to start um moving towards hiring an independent
consultant to start this study because the figure is
going to be a really important figure in that updated
cost assessment. And I don't believe that ERCOT has
ever done that detailed study. And the unfortunately
the E3 study didn't go to the, it's not the detailed
cone study that all the other markets conduct. So we
need to get that done and I think we need to get
started sooner rather than later because it's going
to take some time to run. And not only is the column
figure important for ultimate implementation of or
or the cost updated cost assessment. And if we move
forward to PCM based on whenever ultimately we get
there, we move forward to PCM, it's gonna be important
for those two factors. But it's also important because
that's the parameter of how we measure whether or not
there's enough revenue in the market to incent cost
of entry. And, and, and as we're developing a reliability
standard, you know, the cost of new entry is important
and the revenue incentives that are associated with
the cost of the entry because that's how we determine
whether what incentives we need if we need to um if
we need to take additional actions to take to, to meet
the reliability standard. So I wanted just to highlight
that because that I think it's important that it's
on ERCOT's radar and, and we, you know, give some direction
at some point if it's now or soon that they move forward
and hiring an independent consultant to conduct this
study. No, it establishes just like in all PUC proceedings
it establishes the need case for any type of reform
or government action. So, II, I think it would be essential
to our evaluation process and uh can tell me if I'm
wrong, but is it part of that the uh suite of decisions
that have to be determined as a part of our PCM
evaluation and frankly for, for other evaluations that
we'll make. (item:33:Kenan Ögelman on cone study or analysis) there, there's lots of ways you could
incorporate cone. But uh to get back to Commissioner
Cobos, uh point about uh the statute requiring uh studies
to be done from my perspective, that kind of that a
cone study or analysis aligns with the requirements
in the stature. So, um we, we are borrowing from a
2012 study, the number that we have currently um and
different numbers are going into studies. So for example
I think I was talking to the imm they're using a different
number than E3, the 105 number is different than
E3 and what the real number is. Um there, there
has not been a recent study. So to me, if you look
at um a requirement to understand the cost benefit
trade off, that is, that is a data point that is important
to making the public policy decisions you're expected
to make. So it sounds like we have alignment there
in terms of the importance of again, data and decision
making and
yeah, absolutely. And thank you for that. And I think
we're on the same page. It's just, you know, maybe
at some point getting an update on where you all are
in terms of issuing out an RFP to hire an independent
consultant to get the study done.
So you'll have it in the work plan. Yes. Great place
to, to share that. Ok. So Lori, I'm glad you're back.
You brought up some uh good issues today and I'm very
glad that you did. She's been thinking. Very, very thoughtful
on everyone's part. Okay. So I found some time. (item:33:Chairwoman Jackson summaries ORDC & DRRS) So to
kind of summarize on the ORDC, what we discussed today
was addressing it at the PUC August Open meeting in
order for ERCOT to develop the revision request in
time for the October ERCOT board meeting and on the
DRRS, ERCOT's moving forward with the stakeholder discussions
including hosting a stakeholder workshop on July 27th
and appropriate revision requests to eventually implement
DRS and then on our workflow. Um My expectation is
that you'll reach out to PPUC staff and start working
next week and then uh present it at the August 24th
open meeting, something that y'all work in conjunction
with staff and bring back to us. So,
thank you.
Thank you. Thank you.
I don't have anything on Item 34, unless y'all do? Um
we already discussed Items 35, 36 and 37. I don't have
anything for the remainder of the Agenda. (item:38:Chairwoman Jackson confirms there is no closed session and adjourns meeting) There is
nothing for closed session. There being no further
business to come before the Commission. This meeting
of the Public Utility Commission of Texas is hereby
adjourned at 11:06.
Well done Madam Chair.