(item:0: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
November 30, 2023. For the record, my name is Kathleen
Jackson and I'm joined by Will McAdams, Lori Cobos
and Jimmy Glotfelty. (item:0:Chairwoman Jackson honors former ERCOT CEO/President Brad Jones) I'd like to take a moment to honor
and remember Brad Jones, former ERCOT President and
CEO. He passed away Wednesday, November 8th with his
family at his side. On behalf of all of us at the
Public Utility Commission of Texas. We're deeply saddened
by Brad's passing. We're forever grateful for his selflessness
and tireless leadership at ERCOT following the February
2021 Winter Storm. Brad took on an incredibly difficult
task with great enthusiasm and urgency. He immediately
rolled up his sleeves working to strengthen the Texas
grid, re-establish confidence in ERCOT and speak to
Texans frankly and honestly about our State's power
needs. Our thoughts and prayers are with Brad's family
during this time of loss. We thank Brad for his service
to Texas. I wonder if my other fellow Commissioners
would like to say anything. I'd like to say. (item:0:Commissioner McAdams honors Brad Jones) Brad did
great service to the state and under extraordinary
circumstances. He uh, he gave it his all and uh it's
all we can ask of any Texan. And uh he came back
in from the sidelines, um brought the organization
together. Helped us pick ourselves up and uh make things
better. And I uh Brad's in a better place. He will
be missed.
(item:0:Commissioner Glotfelty honors Brad Jones) Yeah, I would say many of us in this room have known
him for a long, long time since the restructuring days.
And um you know, there were a few that were um uh
that could bridge the divide between technical engineering,
policy, Legislative language. And he could, and he could
do it fluently and he could do it with ease. And uh
we will miss that. Obviously, he came in and helped
after Winter Storm Uri. Which in my view, there was
zero other choice other than Brad Jones at the time.
And it clearly he's done a great service and he will
be missed. By I know everybody here at this Commission
and ERCOT. But um you know, my prayers are with his family
as well. (item:0:Commissoner Cobos honors Brad Jones) Yes and I just echo everything that's just said.
My prayers are with his family and his, his many friends.
And, you know, we like Jimmy just said. You know, we've
known Brad for a very long time in a lot of different
capacities throughout her career. And, you know, he's
mostly remembered right now because of stepping in
you know, to help ERCOT when no one else will. At
a time of great need for our State. And, you know,
we will always be tremendously thankful for that service.
But he has been a tremendous contributor to our
industry for many years. His uh charisma, his intellect
and um humor will always be missed. I think I made
his day, when I finally told him he reminded me of
Matthew McConaughey. And uh I don't think he was ever
as happy as I've ever seen him, and he was always seemed
to be very happy. So, you know, we will miss Brad.
We'll miss his charisma, his charm, his intellect,
his contributions to our industry. And thoughts and
prayers are with his family during this time of loss.
(item:0:Chairwoman Jackson recognizes Commissioner Glotfelty's new appointment) Next, I'd like to recognize uh Commissioner Glotfelty
He was recently appointed to the National Association
of Regulatory Commissioners uh new gas electric working
group called GEAR, Gas Electric Alignment for Reliability.
Along with representatives of just 5 other states. This
new working group is embarking on a 15 month initiative.
To better harmonize the gas and electric industries.
To improve the reliability of both systems. So congratulations
Jimmy and I know you will represent Texas well. Thank
you.
Congratulations Jimmy. (item:0:Chairwoman Jackson recognizes former IMM, Carrie Bivens) I'd also like to extend a heartfelt appreciation
to Carrie Bivens who has left her role as the Independent
Market Monitor Director for the ERCOT marketplace.
After serving in this role for 3 1/2 years. We wish her
the best and appreciate her expertise and input as
a valued member of the electric industry community.
(item:0:Commissioners recognize Carrie Bivens achievements as IMM) I would like to second that. I think Carrie was not afraid
to give her points. Although they weren't always in
line with everybody else's. And in this dynamic system
we have to have data points more than just one. And
she was bold enough to step out there. And I'm very
appreciative of that. I echo that Madam Chair. This
is a tough role. That is a tough role in responsibility
right now. But it's very important, it's crucial. And
she uh she embraced that, that mantra of independence.
And, and did so um that by maintaining credibility and
enhancing it with key policymakers. And that's something
that is invaluable right now. So we appreciated or
I certainly appreciated her service. Because I believe
it was, it was more than just a contract. It was service
as well. So I applaud Carrie. Yeah. I echo all the sentiments.
I really appreciate Carrie's hard work over the last several
years. I mean, her hard work started I'm sure when
she went to work for Potomac at, at the as ERCOT IMM.
But certainly with Winter Storm Uri and our market
reform discussions. Those are tough issues. They're
complicated and she was a exemplified, very strong
will. To stand behind her positions and whether we agree
or not with all of Carrie's positions. The point is she
made her, she made her independent voice heard. And
it's important um that even if we don't agree, that
you hear um perspectives. And that's what the IMM is
there for. And I really appreciate all of her hard
work and all of her feedback on these issues um over
the last several years. Very good. Many thanks to Carrie.
(item:0:Chairwoman Jackson lays out the planning purpose for today’s agenda) For planning purposes, we will go into Closed Session
as close to 11:30 as possible. If we have not finished
the Agenda by then we'll recess around 11:30. And come back
after Closed Session to finish the remainder of the
agenda and work through lunch. (item:0:Chairwoman Jackson lays out instructions for Public Comments) Public Comments for
general matters will be taken up when we get to Section
2, Item No. 19. Public Comments related to a specific
agenda item will be heard when that item is taken up.
Speakers will be limited to 3 minutes each. Commenters
should not approach the table unless oral argument
has been granted or have been invited by a Commissioner.
Shelah, will you please walk us through the Consent
Items on today's Agenda? Yes. (item:0.1:Shelah Cisneros with Commission Counsel lays out Consent Agenda) Good morning Commissioners.
By individual ballot, the following items were placed
on your Consent Agenda. Items 1-7, 9-15,
17 and 18. (item:0.1:Chairwoman Jackson asks for motion to approve items on Consent Agenda) I'll entertain a motion to approve the
items just described by Shelah. So moved. Second. I have a motion and
a second. All in favor, say aye. Aye. Motion passes. Items
1-7 have been Consented. First up is
Item No. 8. Shelah, will you please lay out
this Item? Yes, ma'am. (item:8:Application of Entergy Texas to revise fixed fuel factor) Item No. 8 is Docket
No. 54674. This is the Application of Entergy Texas
Inc., to revise fixed fuel factor. Before you is a proposal
for decision from SOAH. Entergy Texas filed exceptions. Commission
Staff and OPUC also filed exceptions to the proposal
for decision. The SOAH ALJ filed a letter revising the
proposal for decision. A Commission Counsel memo was
filed recommending changes to the PFD. And Chairman
Jackson filed a memo in this proceeding. (item:8:Commissioner McAdams lays out his memo) I filed a
memo in this docket recommending that Entergy Texas
application be approved. But for reasons other than
those set out in the proposal for decisions. Uh do
we have any thoughts on this one? No, Madam Chair. Thank
you for stepping up on this, I really appreciate it.
(item:8:Commissioner Cobos thoughts on memo) I usually get put on the hot seat for MISO matters
and so you took the weight off me on this very busy
agenda. But you know, you're from Southeast Texas.
You could step up and handle this matter too. Thank
you. (item:8:Commissioner Glotfelty & McAdams thoughts on memo) I agree with what you've laid out in your memo,
and fully support it. As do I, Madam Chair. (item:8:Motion to modify proposed decision concerning both memos) I would move to
modify the proposal for a decision consistent with
my memo and the Commission Counsel memo. Do I have
a second? Second. All in favor, say aye. Aye. Motion passes.
Items 9-15 have been Consented. Next up
is Item No. 16. Shelah, will you please lay out
this Item? Yes, ma'am. (item:16:Application of Oncor Electric Delivery Co., LLC to amend its DCRF) Item number 16 is Docket No.
55525. This is the Application of Oncor Electric Delivery
company LLC to amend its distribution cost recovery
factor. So at the outset, let me just make things a
little bit easier for the Court Reporter. And say that
we may be using the acronym DCRF for Distribution
Cost Recovery Factor. The Commission requested briefing
from the parties on a single threshold issue before
you are briefs from the Alliance of Oncor Cities, the
Steering Committee of Cities served by Oncor, the Alliance
for Retail Markets, TIEC, Commission Staff and Oncor.
The issue that was briefed is the following: For DCRF
applications filed on or after June 18, 2023. All
party is entitled to an opportunity before a hearing
on the merits in DCRF proceedings. That is the issue
before the Commission.
(item:16:Chairwoman Jackson's thoughts on the order) The Legislature recently amended the DCRF statute imposed
a 60 day deadline on DCRF proceedings. However, no
legal authority expressly provided a right to a hearing
in DCRF proceedings due to the new statutory deadline
And because DCRF proceedings are interim rate adjustments
rather than rate changes, the opportunity for a hearing
will occur in the next base rate proceeding. I would
ask that an order on briefing issues be drafted in
accordance with our discussion. Are there any thought?
So I'm happy to go. (item:16:Commissioner Glotfelty's thoughts on the order) I agree with this with what you
say stubbornly. Because I think hearings ought to be
available to as often as we can. But things like this
are fairly unique,
especially because we would have to conduct these hearings
as the Commission. We would have to do them at least
twice a year for every DCRF. For every utility that's
filing a DCRF modification. So that means at least eight
hearings a year. Eight staffs all the time for us,
our staffs and the Commission Staff. To me, that doesn't
seem logical. But what we need to do is we need to
make sure that these DCRF issues remain front and center
when we have base rate proceedings. And that they don't
get buried because they are important. These numbers
will grow. And consumers ought to be, ought to have
the comfort that these numbers are going to be scrutinized.
You know, throughout the time of the rights, so. And
and I agree with that. (item:16:Commissioner McAdams' thoughts on the order) So a little bit of history.
The DCRF has been hotly debated, argued over um
haggled over for a long time and especially in the
Legislature. And at the end of the day, the overarching
policy around DCRF is an expedited recovery mechanism
for our utilities. To timely deploy capital to get plan
in service to support distribution level needs.
The, the absence of a hearing requirement is logical
in that they want timely recovery. The uh, I had a hand
in facilitating negotiations on trying to harmonize
what we're doing through these expedited recovery mechanisms
in Senate Bill 735 in 2015. Which put our investor
owned utility TDSPs on a comprehensive base rate schedule
And that's every four years. And in doing so, that
was the covenant between the utilities and the consumers
is that they would timely recover capital cost through
these expedited recovery mechanisms. But there would
be a full-blown rate case at the end of that schedule
to where prudency would be reviewed to where all these
issues would be litigated. And ultimately, if it was
found deficient funds would be chewed up and clawed
back. And, and so that, that's the system. And I believe
what your position is Madam Chair is consistent with
the policy.
(item:16:Commissioner Cobos' thoughts on the order) I'm in agreement with the um proposed process going
forward um given the legislative um direction that
we got this past session in the 60 day timeline and
all of the um you know, surrounding impacts that would
mean for processing those cases. And I, I do think
that along with um instructing commission advising
to draft an order on, on briefing issues uh consistent
with our discussion that we asked that staff open up
a rule making project to prioritize the implementation
of Senate Bill um 1015. And, and um I know we got
a lot on our plate, but I think we got to get
this process in place so that um we can continue to
uh as a Commission process, these DCRF cases that
are coming in twice a year and these very short expedited
uh time frame 60 day deadline. But also because I,
I think as we address, um you know, in that role, the
processing of the DCRF cases, there's, there's two
types of DCRFs investments that we're looking at now
right? Uh distribution investment. So you've got the
traditional uh dis distribution investment cost to
recoup through DCRF proceedings. But now we have the
um on the mobile DD uh investment costs that are being
processed through DCRF proceedings. And so we've got
to provide some policy direction and how we'll handle
those two types of proceedings going forward under
the DCRF umbrella. Um You know, as you've explained
you know, a hearing um would not be held for traditional
DCRF writers. But when you look at on site Mobile
and the Legislation got passed, the, there's a reasonableness
and necessity determination that would occur on those
investments. So we got, we got to open the rule, implement
the Legislation Senate Bill 1015. But also create
a clear path forward of how we're going to process
the two different types of DCRF cases going forward
and provide that certainty to the utilities and the
stakeholders going forward. And then specifically addressing
that mobile gen individual fact set that is very unique
to mobile generation. And oh, by the way, it was 2017
not 2015 for Senate Bill 735. Senator Hancock could call me
after this. So, uh anyway um but I, I agree. I agree.
So is the motion? (item:16:Motion to direct OPDM to draft briefing order) So I would move to direct OPDM to
draft a briefing order consistent with our discussion.
And Staff to open a rulemaking. That request already
on our schedule for the first quarter of 2024. Thank
you. Great. Thank you. Second. I have a motion and a second.
All in favor, say aye. Aye. Motion passes. Items 17 and 18 were Consented.
We will now transition to Section 2 of our Agenda:
Rules, Projects and Miscellaneous Items. So we'll give
folks a few minutes to clear the room. That just came
for this part of the meeting.
(item:19:Chairwoman Jackson lays out instructions for General Comment) Next up is Item No. 19, General Comments for topics
not specifically posted on this agenda. Speakers will
be limited to 3 minutes each. Shelah, do we have
anyone from the public signed up to speak? No, ma'am,
no one signed up to speak. This completes Item No.
19. (item:20:Chairwoman Jackson lays out Project No. 54453 and gives thoughts on deferment) Next up is Item No. 20, Project No. 54453.
This is the Commission's project for Year-End 2022
Water and Sewer Utility Annual Reports. Shelah, do
we have anyone from the public signed up to speak on
Item No. 20? No, ma'am.
PUC Staff filed a memo and yesterday we received a
request from Undine group to delay our consideration
of Staff's memo.
It would have been helpful for Undine group to have
communicated its plans more than 24 hours before the
Open Meeting. And to have engaged in a dialogue with
rate regulation staff before this week. However, given
that Undine Group has notified us of plans to file a
rate case next month. I'm fine with deferring consideration
of Staff's memo until January. Does this work with everyone,
any thoughts? Works for me if Staff? Staff is ok with it. Great.
We don't need to do a vote or anything? No action. Correct.
Okay. I don't have anything on Item No. 21. (item:22:Chairwoman Jackson lays out Project No. 54589) Next up
is Item No. 22, Project No. 54589. This is the
Commission's rulemaking regarding its review of Chapter
26, Substantive Rules applicable to Telecommunications
Service Providers. Shelah, do we have anyone from the
public signed up to speak on Item No. 22? No ma'am.
PUC Staff filed a recommended order on adoption. David
Smeltzer is here. Um David, could you please state
your name for the record and then provide a brief overview
of Staff's recommendation. (item:22:PUC Staff's David Smeltzer with review of Chapter 26) Sure, David Smeltzer for
Commission Staff. Um, this is our review of Chapter
26. And this was one of our, one of our management actions
from the Sunset Commission was to do a more thorough
review of rules during our regularly scheduled reviews.
This is the first one that's come up. Um, this is our
telecom rules and as part of this, we ended up repealing
modifying or amending 48 different rules in our telecom
section. And um, you know, most of the work was done
by Mack. Who's hiding in the corner and refuses to take
credit for anything. So everyone look and be thankful
for his efforts. I, I can try and enumerate some of
the changes. But I think in briefing, we covered them.
There's not a whole lot of substance that change between
the PFP to PFA. And I will note when you, if
you don't have any questions or want a more thorough
detailing of the, of the contents. I will note that
we've, we've been contacted and there were, there were
two typos in this giant order. And so when you approve
the, if you approve this. We, we would like you to
approve it and give us discretion to change those two
little typos so that it reads accurately. I'm available
for any questions or discussion.
Look good to me,
Madam Chair. Okay. Same. (item:22:Motion to approve Staff's recommendation for adoption) I would entertain a motion to approve Staff's recommendation
for adoption. Consistent with the changes that Staff
has proposed. I would so move. We have a motion and.
Second. A second all in favor, say aye. Aye. Motion passes. I
don't have anything on Item No. 23. (item:24:Chairwoman Jackson lays out Project No. 54451) Next up is Item
No. 24., Project No. 54451. This is the Commission's
project for Year-End 2022 Electric Utility Earnings
reports. Shelah, do we have anyone from the public
signed up to speak on Item No. 24? No, ma'am.
PUC Staff filed a memo with a revision yesterday and
as an outcome of Staff's review of the electric utility
earnings reports filed for the 2022 reporting year.
Staff is not recommending that the Commission require
any of those utilities file an application for a comprehensive
proceeding. Included in Staff's revised memo is also
a summary regarding expected comprehensive rate cases
over the next four years. This is an excellent resource
for planning and our upcoming workload. Do we have
any thoughts on this one?
(item:24:Commissioner Cobos thoughts on Project No. 54451) No, I certainly appreciate the overview of um the rate
cases to come. I think that's important um to understand
what's coming down the pike and rate case proceedings
in the next year or two. And I certainly appreciate
Darryl's work in providing all this information to
us so that we have a sense of where our um not
only our um TDUs or IOUs, but also um the
entities where we um have authority over wholesale
transmission service rates, um the Munis, the Co-ops
uh River Authorities. And so I appreciate the information
Darryl.
I'm, I'm I agree with Staff's recommendation and are
supportive of the path forward. And so again, I just
point everybody to the summary of expected filing dates
of electric utilities comprehensive right proceedings
which is something that we added to this proceeding
I think would be very helpful moving forward. Thank
you. (item:25:Chairwoman Jackson lays out Project No. 55562) Next up is Item No. 25, Project No. 55562.
This is the Commission's project for its RFP for a contractor
to manage the Texas Energy Fund programs. Shelah, do
we have anyone from the public signed up to speak on
Item No. 25? No, ma'am. Commission Staff filed a
memo and a proposed order that would delegate authority
to the Executive Director. To make an award, negotiate
pricing and performance requirements and execute and
administer the contract for the management of the Texas
Energy Fund programs. Do you have any comments?
I think they've done great work here. Expedited timeline
straddle in a whole election. I think you all have
done good work and thank you. Thank you. (item:25:Motion to approve the proposed order) I would entertain
a motion to approve the proposed order.
So moved. Do I have a second? Second. All in favor, say aye. Aye. Motion passes. (item:26:Chairwoman Jackson lays out Project No. 55182) Next
up is Item No. 26, Project No. 55182. This is
the Commission's rulemaking regarding the Texas Energy
Fund Completion Bonus program. Shelah, do we have anyone
from the public sign speak on Item No. 26. No, ma'am.
PUC Staff filed a proposal for publication. We have
PUC Staff here. Do you want to provide a brief overview
of this proposal of publication? Yes thank you, ma'am.
(item:26:PUC Staff's David Gordon on PFP new Rule 25.511) Good morning Commissioners. This is David Gordon with
Commission Staff. This is a Commission Staff's proposal
for publication for a new rule 25.511, which will
establish the completion bonus grant program as part
of the part of the Texas Energy Fund Suite of programs.
The rule here is designed to accomplish three main
things we want to describe who is eligible to receive
a completion bonus grant. We want to establish procedures
for applying for a completion completion bonus grant
and the method for requesting annual grant payments
And then we also want to set the performance standards
that facilities will need to meet to obtain those grant
payments. Um The way this rule will operate is that
the approved facilities will receive a notice of eligibility
that will authorize them to receive data from ERCOT
on how their facility has performed. Then every year
for the 10 year period for which they can receive a
payment, they will submit that data and uh support
their request for a payment. Along with the proposed
rule text, we've also asked specific questions um about
facility arrangements. And so we'd like the the feedback
from commenters when talk about the rule text as well
I have a list of people who I want to thank
for this because this is a little bit new for us and
these people really did help the rule become a better
proposal for comment. And those people are Ramya Ramaswamy,
Floyd Walker, Mac Arthur who worked on everything for
this meeting I think. Mariah Benson and uh especially
Tyler Nicholson for helping me with math that I don't
do very well with. Staff recommends uh approval of
this proposal. But um I'm happy to answer any questions
that you all may have too.
Look good to me. I don't have any questions. Thank
you for all your hard work to you and the team you
just um listed. Thank you so much for your hard work.
(item:26:Motion to approve PFP) I would entertain a motion to approve this proposal
for publication. So moved. Second. I have a motion
and a second. All in favor, say aye. Aye. Motion passes. (item:27:Chairwoman Jackson lays out Project No. 55826) Next
up is Item No. 27, Project No. 55826. This is
the Commission's rulemaking regarding the Texas Energy
Fund In-ERCOT Generation Loan program. Shelah, do we
have anyone from the public signed up to speak on Item
No. 27. No, ma'am. PUC Staff filed a memo and
a revised proposal for publication. We have PUC Staff
here. Could you state your name for the record and
um give us an overview of your memo and the revised
proposal for publication? Yes. (item:27:PUC Staff's Allison Fink on PFP creating Section 25.510) Good morning, Commissioners.
Alison Fink with Commission Staff. This proposal
for publication will create new Section 25.510 and
establish the Texas Energy Fund In-ERCOT Generation loan
program. These are low interest loans for new or upgraded
dispatchable electric generating facilities within
the ERCOT region and it's a loan application. It's
the rule structure is what you'd expect from a loan
application outlines eligibility of applicants.
What they, what documentation they'll need to provide
as part of their application, the evaluation criteria
by which the Commission Staff will determine which
which applications deserve loans um or should be awarded
loans I should say. Ongoing obligations for those successful
applicants who do end up borrowing from this fund.
And then details for how borrowers can receive back
a deposit that they will have to put down as part of
an award of a loan through this program. The deposit
is equal to 3% of the total cost, total estimated cost
of the new plan or upgraded plan.
The same, the same questions are part of this proposal
for publication that are for commenters as in the completion
bonus grant. So we have asked the same sorts of questions
to our for this program as the questions, the directed
questions for commenters in the completion bonus grant
program. Staff recommends that the Commission approve
this proposal and I'm happy to answer any questions.
(item:27:Commissioner Glotfelty on small modular rectors) I
don't have a question. I just have a statement that
as the guy who's kind of leading the effort on small
modular reactors in this state. It's my hope that at
some point in time when they become viable. This program
is still around and will be able to participate in
that program. We know that the date, the timelines
don't match up because this is for dispatchable energy
now. But if it continues in the future and rolls over
if the Legislature deems that. Then we'd love for it
to be available to small modular nuclear reactors.
Good work. Thank you. Thank you for your work. Thanks. (item:27:Motion to approve PFP) I would
entertain a motion to approve the proposal for publication.
So moved. Do I have a second? Second. A motion and a
second. All in favor, say aye. Aye. Motion passes. (item:28:Chairwoman Jackson lays out Project No. 55566) Next up
is Item No. 28, Project No. 55566. This is the
Commission's project for the generation interconnection
allowance. Shelah, do we have anyone from the public
signed up to speak on Item No. 28? No, ma'am. PUC
Staff filed a recommended proposal for publication
and is here to provide an overview. Could you please
state your name for the record? (item:28:PUC Staff's Mariah Benson on PFP for implementation of HB1500, Section 9) Hello, Mariah Benson
Commission Staff. Before you, we have Staff's recommended
proposal for publication which implements HB1500, Section
9. Which requires the Commission develop a transmission
level generation interconnection allowance. Through
that rulemaking we recommending a two tier allowance
based on high transmission voltage and low transmission
voltage. And then we recommend an adjustment need be
done yearly to account for inflation and other potential
changes, other things that would potentially change
the allowance. I'd like to recognize the project
team on this one. We have Eduardo Acosta, Chris Roelse,
John Poole, Tyler Nicholson of course Mackenzie Arthur
again. And if you guys have any questions, we're
here and happy to answer them.
Any thoughts on this one? I do. (item:28:Commissioner Glotfelty's thoughts on PFP) I think you all have
done a great job on this. Yeah it's a, it's a unique
policy that is a change from what's happened since
the late 90's. When we restructured the market
that was the intent of it. But I think that this the
way that you all have defined this works for all different
types of resources equally and nondiscriminating initially
when I read this and I've had a lot of discussions
with staff on this and they've been great bringing
me along and trying to understand it. But these are
not t cost dollars for moving the power beyond the
interconnection. These are just interconnection costs
So we have to keep that in mind that this is that
it's a small portion of, of what that, what that means
for a facility, it may impact some renewables more
But what what this does is, in my opinion, it will
force some financial discipline on citing for renewables
and other facilities. If it moves them closer to interconnecting
facilities, then they're, they're going to be ok. These
numbers will allow them to interconnect. If they move
far away, per their decision, they may have to pay
more, but it's all laid out and these rules if passed
And when we get comments back, if we finally pass a
rule like this, it it won't be, it will be very clear
as to what the price would be that they would have
to pay. So while a, a generator might choose to exceed
the allowance, they will know ahead of time how much
they will be exceeding the allowance and can budget
for that in their in their development costs. And finally
the one thing I would say is I'm interested in hearing
from stakeholders on one part of this and that's the
section on
upgrades to existing facilities. We have a lot of wind
facilities, we have potentially plants that are upgrading
are switching from coal to gas. You know, other types
of resources that may be switching at a single location
And the question becomes, are those interconnection
costs enough or right now they're not included. They
wouldn't get any upgrade costs after 10 years. If I'm
correct on that? They wouldn't get any interconnected
interconnection upgrade costs.
(item:28:Mariah Benson on interconnection allowance) Any costs that are not transmission system upgrade
costs that would benefit the entire grid. After 10
years, they would be eligible for another allowance. Oh, they
would be. In 10 years they need, they only have the
rest of the allowance that they originally used to
interconnect. Okay. Thank you for that clarification
and I will withdraw my comment. But I look forward
to all the comments.
Thanks. (item:28:Commissioner Cobos' thoughts on PFP) Thank you for your work on this that this is a great
work on implementing this Legislation. And Commissioner
Glotfelty mentioned, you know, I think um creates certainty
for um citing and um investment decisions and um look
forward to hearing the uh stakeholder comments on on
this uh PFP or, and um thank you for your work.
(item:28:Motion to approve PFP) I would entertain a motion to approve the proposal
for publication. So moved. Second. A motion and a second. All
in favor, say aye. Aye. Motion passes. And I'm so sorry, I forgot to
mention as well. From rates, we also had Bill Abbott
on this rulemaking.
Well done Mariah. Thank you, Bill. Thank you. (item:29:Chairwoman Jackson lays out Project No. 54585) Next up
is Item No. 29, Project No 54585. This is the
Commission's project for the emergency pricing program.
Shelah, do we have anyone from the public signed up to
speak on Item No 29? No, ma'am. PUC Staff filed
a recommended order for adoption and is here to provide
a brief overview. Could you please state your name
for the record? (item:29:PUC Staff's David Smeltzer on Emergency Pricing Program) Yes, David Smeltzer Commission, Commission
Staff. And up here with me are Julie Blocker and Werner
Roth. And because this is the more efficient way to do
it. Maybe I'll just note that Mac didn't work on this
project. That's just, that's the more orderly way to
go. So we had a good uh discussion on this at the
last open meeting. As we know, this is our SB3
implement, like we're implementing a portion of SB3
from last Session. That requires an Emergency
Pricing Program for when prices have been at the H
cap in any 12 hours in a 24 hour period. Um
last open meeting. I think we had a good discussion
about whether or not the recovery of costs that generator
should be allowed to um you know, they should be able
to recover these costs above the emergency cap and
whether or not, that should be capped at what the cap
would have been had that moved on. And so based on
advice from you guys, the guidance that we received
at the last open meeting. Staff has made a number of
changes to the rule upon final adoption. The first
thing that we did is we defined emergency conditions
which are one of the the termination triggers for leaving
emergency pricing program and where Staff is recommending
a definition of anything anytime we're an EEA because
if we're still in EEA, then the system has not returned
to all, you know, it's not conditions normal. And so
the, the e cap should remain in effect for pricing purposes
until 24 hours after that time to best preserve and
protect the day head market. Um We've also um included
some additional language around the verifiable cost
mechanism and so if they want to require, require costs
above, um what would you know what H cap would have
been if H cap were still in effect? Uh We're gonna
require an additional attestation that any uh fuel
related cost recovery was in fact related to fuel or
services directly associated with that, that fuel recovery
And we've given ERCOT the ability to or we've clarified
an ability that we think they already have, which is
to request uh whatever documents they need to verify
those costs uh including a fuel contracts. Other
changes that were made after, since adoption the most
significant are we added a new Paragraph 7 which
basically provides some holding text for uh to make
sure that ERCOT has all the authority they need to
implement that this winter even if they can't get their
protocols um approved by us in time. And so it just
sets out some uh temporary provisions. Um and, and
now that I think about it, the one other change that
we made uh is that we, we clarified that the costs
that are recovered will be allocated on a load ratio
share basis so that it's, it's, it's even across the
board and everyone shares the burden, which is a slight
deviation from the way that cost recovery works in
other contexts where they use capacity short method
because often individual entities are responsible for
those shorts. So I mean, that is consistent with stakeholder
recommendations. I'm the team and I are happy to answer
any additional questions that you may have. And also
I believe that Commissioner Cobos filed a memo on this
as well. Thank you, David.
(item:29:Commissioner Cobos lays out her memo) Some of the changes made to the uh proposal for adoption
I think um are are good changes that provide additional
safeguards um during the EPP periods, I think number
one changing it from 72 hours to 24 hours uh A period
that uh EPP is in effect um the emphasis on the recovery
of marginal costs, the process you laid out for um
costs above an h cap with respect to requiring the
resource entities to provide an attestation and any
information that ERCOT requests to evaluate their costs
to determine whether they're reasonable, verifiable
costs. And so I, I think that the process you've laid
out and the additional safeguards you've put into the
role um have put me in a more comfortable position
with the proposal. My memos just intended to reinforce
and emphasize that um ERCOT must get the attestation
and any information they need to evaluate the reasonableness
of the, to verify those costs. And that's something
ERCOT is gonna do anyway, but I wanted to get it in
in the rule just to make it clear that we expect that
the resource entities um, would provide this information
to ERCOT and if they don't, then, um, ERCOT wouldn't
approve the recovery of those costs. Excellent. I think
Commission Staff is supportive of the change that you
recommend. We would. If you, if you're not opposed
to it. We might request a little discretion to tweak
it and put it into the rule according to normal drafting
conventions and uh, maybe put it at the, uh, at the
subparagraph level instead of just 1, 2, 3. But I mean,
the substance exactly what you spelled out is perfect
for us. Whatever makes sense from your rulewriting
perspective. But thank you so much. Thank you
(item:29:Commissioner McAdams on memo and EPP) Madam Chair, I agree with the change. I appreciate
Commissioner Cobos following it up. It, it puts iron
in the glove of ERCOT to, to gather this information
It, it reassures the system that somebody is going
to be checking to see what exactly is going on in the
event of an emergency. And it's just one more measure
that allows us to gauge the overall impact to the system
and, and root causes potentially as well. So I applaud
Staff in the way that they've attempted to thread the
needle on this and appreciate the efforts.
(item:29:Chairwoman Jackson on EPP and memo) I agree with the um, with the rule as adopted with
the change from Commissioner Cobos. And um, really
appreciate her taking a look at it and drilling down
and also all the work that Staff did on this one. I
think this is a great, a great outcome and something
that was very much needed and really pleased that we're
moving forward with this at that time. So um, I would
unless you would like to make the motion, Commissioner
Cobos? That's fine with me. (item:29:Motion to approve proposal for adoption) So I would move to adopt Staff's
proposal for adoption with the addition of the language
in my memo.
Second. I have a motion and a second. All in favor, say aye.
Aye. Motion passes.
I don't have anything for Item No. 30. (item:31:Chairwoman Jackson lays out Project No. 55323) Next up is
Item No. 31, Project No. 55323. This is the Commission's
rule making related to its goal for renewable energy
and proposed new Section 25.173 relating to the renewable
energy credit. Shelah do we have anyone from the public
signed up to speak on Item No. 31? No, ma'am. PUC
Staff filed a recommended order for adoption and is
here to provide a brief overview. Could you please
state your name for the record? Yes, ma'am. (item:31:PUC Staff's Zachary Dollar on Renewable Standard Portfolio) Good morning,
Commissioners. Zachary Dollar for Commission Staff. House
Bill 1500 from the 88th Legislative Session repealed
the renewable energy credits trading program under
Section 39.904 of the Public Utility Regulatory
Act. But required the Commission to continue the trading
program and mandatory renewable portfolio standard
for only solar generation until the program's complete
repeal effective September 1, 2025. House Bill 1500 also
required ERCOT to continue to maintain the accreditation
and banking system to award and track all renewable
energy credits on a voluntary basis. In response to
feedback from ERCOT and stakeholders Commission Staff
has modified the proposed rule language to do the following.
One, clarify that ERCOT will continue to use the existing
trading program framework to administer the mandatory
solo RPS and manage the voluntary accreditation and
banking of all recs. Two, add language to state that market
participants previously registered or certified to
participate in the rec trading program under repealed
Section 25.173 continue to be registered and certified
for participation in the rec trading program, program
under new section 25.173. Additionally, Commission
Staff is recommending two changes to the file draft
to correct non substantive editorial errors identified
after the filing. Commission Staff recommends that the
Commission approve the order for adoption as Staff
recommends in the Texas Register. Thank you. And I'm
happy to answer any questions.
Good job.
I think this is the first time presenting before the
Commission, so you did a great job. Thank you. So I appreciate
all the hard work.
Thank you both. Appreciate it. Thank you. Good job. (item:31:Motion to approve Staff's recommendation for adoption) I would entertain a motion to
approve Staff's recommendation for adoption. So moved.
Second. I have a motion and a second. All in favor, say aye.
Aye. Motion passes. (item:32:Chairwoman Jackson lays out Project No. 41155) Next up is Item No. 32, Project
No. 41155. This is the Commission's project for
proposed revisions or additions to ERCOT's transmission
planning guidelines and procedures. ERCOT requested
the Commission provide input regarding the policy impact
of PGRR105. Shelah, do we have anyone from the public
signed up to speak on Item No. 32? No, ma'am. PUC Staff
filed a memo and is here to lay out their recommendation.
Could you please state your name for the record? (item:32:PUC Staff's Floyd Walker on gaining Commission input) Floyd
Walker, Commission Staff. I'm here with Ramya Ramaswamy.
On September 22, ERCOT filed a request pursuant to
16 TAC 25.361(d)(3). To get a Commission input
regarding planning issues and simply relating to PGRR105
which would change some planning transmission policies.
So, um and the Commission has now filed a memo to provide
suggested input that the Commission could provide to
ERCOT in response to it's request. And Ramya will lay
out some of the details. (item:31:PUC Staff's Ramya Ramaswamy lays out policy considerations) Good morning Chair. Good morning,
Commissioners. Ramya Ramaswamy for Commission Staff. I
just want to remind everyone once again, PGRR105
is not in front of us today. We are here just to
talk about some of the policy considerations that Staff
has identified um that should be addressed. Also
because ERCOT has requested input from the Commission.
Staff has identified three different concerns that
we have as laid out in our memo. We have concerns with
reversing directive six. We have and that also leads
has um significant co that could have significant cost
implications in the long run and might have certain
um lack of control issues depending on how the policy
moves forward. We would love to get input from the
Commission and we are here to answer any questions.
Thank you. (item:32:Commissioner Cobos lays out her thoughts) So I, I'm happy to kind of lay out sort
of the, this is the way I'm looking at the issue. So
um
you know, pursuant to Legislation that Commissioner
McAdams was involved in. Apparently that requires D.C.
ties to get a CCN from the Commission. Southern Cross
came to the Commission and filed a CCN application that
was approved in May of 2017. And that, that same and
on that same day May 23, 2017. The Commission issued
a revised order creating and scoping project which
essentially laid out 14 directives for ERCOT to go
look at. And as part of those directives, Directive
No. 6 is one of the applicable directives that
touches on the figure that's before us. But essentially
directive number six states that ERCOT shall study
and determine what transmission upgrades if any are
necessary to manage congestion resulting from power
flows over the Southern Cross tie, make any necessary
visions to its standards, guides systems and protocols
as appropriate. And certified the Commission when it
has completed this action, these actions. So ERCOT
essentially determined that they would zero out the
D.C. ties in their transmission reliability criteria.
You know, there were concerns about the dependability
of the resources on the other side of the fence and
other markets and in countries, I guess. Determined
that um they wouldn't be included in the transmission
reliability criteria and pass payer 77 to affect um
that, that position. And so um Directive No. 11
which touches on the cost allocation for those transmission
upgrades was not addressed because um there was nothing
to allocate because they decided to um zero out the
the D.C. ties into transmission analysis. So ultimately
you know, ERCOT reported this in, in some updates to
the Commission. And um in September of 2022, the Commission
um basically closed out the scoping project uh project
number 463 um 04. stating that they believe Derco had
completed um all the work on the directives. And then
um the following year in I believe, April of '23. Rainbow
filed PGRR105
which essentially says that it makes some changes
to the planning guides to ensure full deliverability
of the DC ties. So essentially the Southern Cross precedent
is zero and the PGRR105 is 100%. So we're like in
between 0 and 100%. And so, um you know, the figure
would essentially reverse course on prior precedent
and um does raise some policy considerations that are
appropriate for the Commission to address from my perspective.
But I think that first and foremost, we got to decide
um from our perspective, whether, you know, is, is
zero, what we want to stick to based on the prior Southern
Cross precedent. Are we comfortable with 100% recognizing
that, you know, in my conversations with ERCOT and
technical experts, you know, there are some the practical
realities of some of our existing ties, like for instance
the ties into Mexico. You know, Mexico will tell us
on a daily basis. You know, will tell ERCOT on a daily
basis. That you know how many megawatts they can actually
provide. And um ERCOT will look and say, well, this
is how much we can accommodate on our side of the fence
based on the transmission that exists on our side um
in ERCOT and so not in every circumstance where you
get the full deliverability of that tie and practical
reality and that's on existing ties and then you have
the new ties where, you know, we, we just don't know
we, we have, you know, we, we'd like to get all of
the power that the tie can bring over, but we don't
know for certain. Um And so do we want to build a
transmission system on our side in ERCOT to accommodate
full deliverability? Um given some of the unknown factors
and uncertainties and then ultimately, how would we
cost allocate those transmission upgrades. You know
there's stakeholders, I think wanna allocate it to
to the D.C. tie. I because there would be generation resources
And then, you know, there's a perspective of these
the flows coming in the imports provide a public good
for the, the whole system. So they should be allocated
on t cost basis. You know I, I have some concerns
with 100% deliverability um given the uncertainties
um that could exist um in other countries and other
neighboring RTOs in building a system to accommodate
100% deliverability, given those uncertainties and
um unknown factors. However I, I think that it would
be helpful to examine whether there's some middle ground
If the Commission wishes to look at, how do we potentially
optimize more imports through D.C. ties? Maybe it's not
100% deliverability but, but doing some kind of analysis
of determining on average how much you're getting over
the existing ties and coming up with some middle ground
to potentially optimize more DC T imports into ERCOT
So, um I'm not comfortable with 100% deliverability
under the PGRR105. But I'm open to examining is, is
there, is there somewhere in between zero and 100 that
we can look at and, and getting feedback from ERCOT
of what, what are some options of, of how we can find
a middle ground and from the stakeholder community
on not only how we can determine a mi middle ground
but also a process for doing that. Um because I'm not
sure that the, the answer is, I mean, I'm not comfortable
with 100% and I'm not sure zero is the complete answer
given some of the um you know, some of the events we've
had, right? And, and um should we try to optimize these
ties? And if so, what is the appropriate middle ground
And how do we get there? And perhaps we can, you know
query ERCOT stakeholders um get some comments.
I'd be happy to develop some questions to, to get me
make sure we get the right information to help us move
forward and then we can determine how we do that if
we decide to move forward. But I, I'm not comfortable
with PGRR105 at this stage.
Thanks, Commissioner. Appreciate it. (item:32:Commissioner Glotfelty's thoughts on ERCOT guidance) First of all,
I think the question on the table is, should we give
ERCOT guidance? That's really the only question on
the table. And I would say that when they came and
released the RFP for capacity, we over here, I will
speak for myself. But I think that it was unanimous
that we raised cane because they didn't come talk to
us ahead of time and ask our opinion and let us give
them advice and thoughts on that. And then when we
get asked to do that, if we say no, we're not willing
to give you our views, we're sending mixed signals
So we have to make sure that we are, I think consistent
in this space. And to me that would mean we give them
direction, that PGRR105 is the right route that
we, we ought to go. I'm the one who made the mistake
when we closed out the directives on the Southern Cross
Project. We, I thought that all of the issues were
resolved. And in fact, this is the one that was not
resolved. And I would have pushed for a discussion
back in 2022 had I known this was, was still there
So, so that's my mistake. And I think we got 90% of
the way there. Our goal for closing out those directives
was to give certainty, financial and regulatory certainty
For DC lines, DC lines are very different than AC lines
You finance a DC line like you do a pipeline, you go
out and you get capacity contracts and when you get
enough capacity contracts, you monetize them and get
enough money to build the project. It's just a different
kind of an animal than a regular DC line is. So we
can't treat them exactly like AC lines. To that
end, I I think the flexibility provided by PGRR105
it does not eliminate the ability for us to determine
how much transmission needs to be built and how much
would go into rates. That is still a decision that
we get to make in the future. This just says in the
planning models, they're going to determine that the
full flow across that line was is going to be considered
and what upgrades would be necessary to to allow that
to happen.
PGRR105 if we pass it, it does not preclude us from
doing a rulemaking on this in the future to really
discuss in totality processes, thoughts theories, operations
of DC lines, both interregional and intra regional
within ERCOT by itself. There are some, there have
been at least two intra regional DC lines. One was
considered during cres, one was considered as a West
Texas export project into San Antonio. But it's very
easy to say that these things can't work in ERCOT because
we don't have anything that really talks about the
process for developing these lines in our region. So
I would be in favor of passing 105. And if we want
to consider a rulemaking, that would be a valuable
certainty for the industry. One comment that I have
that I took issue with, with the Staff's memo and I
put them in touch with one of the HVDC vendors.
The new HVDC lines in their converter stations can
be integrated into SCED.
And when they do that, they become part of the system
they would have to bid into the day ahead market, they
would have to deliver like a generation resource does
just like any other generator does at a DC converter
station. When they're interconnected to the ERCOT system
they look no different than a generator. So Staff has
lined up a discussion with Siemens who is one of the
few builders of converter stations for December to
discuss that issue with them and to better understand
how
energy across these lines can be integrated into SCED
These are for new lines, these aren't for the old lines
The old lines still have a very different process but
new lines provide voltage support, can be integrated
into SCED and can be very, very valuable in terms of
flexibility for the system.
The other thing that I had suggested was with discussions
with ERCOT is if in fact, these upgrades are if, if
we, if PGRR105 is approved. Which I hope it is. That
upgrades will not be put into the planning model until
the converter station has been given. The company has
given notice to proceed for the converter station to
be built. Okay. These converter stations are 5 to 7 years
out and there's no reason to put that number, that
planning model number immediately upon completion of
an interconnection or whenever they put it into the
planning model, it should be when there is certainty
around that facility and the facility of a DC tie becomes
fable when you put in an order and you put money down
for the converter stations which cost a few billion
dollars. So for those reasons, I think that PGRR105
is important to pass. It's important for certainty
We talk about certainty here, HVDC lines are not going
to be a panacea for, we're not going to see billions
of dollars of transmission upgrades for these projects
They just don't make economic sense everywhere. They
have to be a certain distance for them to make sense
because you effectively pay for the billion dollar
converter stations through the minimization of line
losses. That's what makes this technology work. And
again, this is another area I think like batteries
The next issue we'll discuss that we don't have a whole
lot of experience with and we need to learn from and
finding ways to learn again. I think this is just an
administrative issue and I would encourage that we
give guidance to ERCOT to complete the PGRR105 process
to be supportive of it and let it come to us and
and let's get this issue out of the way.
But um, may I pose a hypothetical? Uh,
well, and before the hypothetical? Okay. (item:32:Commissioner McAdams thoughts on possible policy decision) So we kind of
brought up the RFP. Um and we discussed, and in a
matter of fact, I believe you said that this is certainly
a policy decision of such magnitude that it warrants
a rulemaking and decision on the part of the Commission.
And, and so kind of my position on this broadly from
step from first base is one of process. This is a major
policy decision derived from a PGRR. Okay, initiated
by stakeholders that has implications across a panacea
of interrelated policies within the overall framework
of the ERCOT system. And um and so
we, we do not have a rulemaking before us. We've got
a PGRR and it's a hypothetical PGRR and subject to change
So there's a, there's a certain sense of prejudgment
that is going on here about significant policy areas
and that's concerning um that, okay. And that gets the
hypothetical about how you basically accredit the,
the flows across those lines because that's really
what we're after at the end of the day, ERCOT is trying
to ensure reliability. We're trying to efficiently
size our transmission system to ensure the deliverability
of power. And that reliability say Uri went uh the
ground zero of Uri went 300 miles more North and, and
East. Of where it eventually landed right smack dab
over the heart of Texas. And it said that was now Missouri
and Oklahoma and um, Louisiana, north northeast or
northwest Louisiana, the bottom line gas fields in
Oklahoma freeze off. And instead of the Permian in Texas
and MISO and SPP are affected. And we've got 568 whatever
Megawatt capacity of Southern Spirit at that time.
Do we have the flows of 100% electricity happening
at that time? I would assert no, we wouldn't in that
hypothetical. Because MISO would have clawed their power
back. All domestically, all native power generated in
their footprint would have been on call to MISO to
serve their loads. And as such, ERCOT would be left
without that, even though it would be pretty cold here
we know that our demand would be up. Uh It wouldn't
be nearly as, as extreme. So that's what ERCOT is looking
at. That's kind of the magnitude of the decision
we're talking about. How much do we count on it and
thus how, how much do we allow to be paid for it
And, and the cost allocation discussion I get very
nervous about because ultimately, I do not want to
see um
I don't want to see this conversation evolve. Because
this PGRR has already instigated these type conversations
within ERCOT on how generation, if generation ultimately
pays for transmission upgrades. Broadly, the secret
sauce of ERCOT is that load pays for those systems
that help support the system. Um This thing could become
a tangle overnight. It could unwind massive amounts
of the framework that ultimately supports the reliability
of our system and affordability of our system. And
so. Can I ask you a question on your, on your hypothetical?
(item:31:Commissioner Glotfelty's thoughts concerning power or gas generation) So what's the difference between power not coming across
a DC tie during a Winter Storm Uri type event and a
generating facility within ERCOT not generating because
they can't get gas. Is there any difference? At least
we have somebody to talk to. I don't have anybody to
talk to in Missouri.
You know, if you're thinking from a, from a molecule
and a and a electron basis. It doesn't matter where
that those generators are because if, if the electrons
that we're trying to see in ERCOT
come across that converter station,
whether they're there or they're not is the same decision
in my view that we have to look at every day with
every generator that gets interconnected to the system
Is it going to be there or is it not going to
be there? And is it going to be there during the most
critical time? We don't know
if it backs down and if it breaks, I mean, again to
your, to your hypothetical for that storm? One other
thing, Commissioner Cobos. So what if we had 500 megawatts
coming across the southern cross line on September
6th. Would we have had to have an EEA in the
South? Would we have had prices go through the roof?
Probably not because we would have had more generation
in the North. It gives you options, it gives you flexibility
which is what we need. We don't have as, you know,
we don't just have 60 or 80 big generators on our system
anymore. We have hundreds and that exponentially creates
the challenges for operators to anticipate what's going
to happen. So adding more optionality to help them
solve problems in my view is what they need and them
having access to a full line from imports from DC lines
is in my view, is a valuable tool. (item:32:Commissioner McAdams thoughts on control) It is a valuable
tool. And, and that's why ERCOT went through such pains
And I thought we had given Southern now Spirit regulatory
certainty. And that was my hope after all this odyssey
since 2015, you know that they're finally there. And
uh then this PGRR comes out of nowhere and all of
a sudden we go from 0 to 100. Um and it's, it's
whipsawed. And uh but I, I would also say one of the
themes of today on several issues is going to be control.
What do we have control of and how do we control it
Well, I know the things that were are within the boundaries
of the state of Texas, South of the Red River are under
the control of the State of Texas.
And um, and that's an important factor and I don't
I don't think you can argue against that. (item:31:Commissioner dialogue on PGRR105) Oh, I don't
argue against it. I just, I think there's certainty
with the way FERC has given up authority for DC lines
all across. I'm not even talking about jurisdictional
I'm just talking about how you can ultimately call
upon command different assets within the state to behave
I don't think you can do that.
Under laws you can. Well, if they're available and
we have found that most of these, a lot of the units
around the state are having higher force outage rates
and their availability is lower. So again, I'm not
arguing against you. I'm telling you, my view is that
PGRR105 provides optionality that it shouldn't be put
that we should encourage the approval of that because
these lines are valuable that ERCOT can appropriately
determine when those lines should go into their base
planning model, but not before notice to proceed. And
then we've, we've resolved this issue not to 90% as
we had done before, but to 100%. I can't hear you.
Can I add a couple of things? Just clarification points
I think. (item:31:Commissioner Cobos' thoughts on PGRR105) Number one, I think to Commissioner McAdams
point, I mean. We've had the CCN order, the scoping
project feedback from ERCOT updates, extensive updates
on the completion of directives. Our final conclusion
that the directives are completed. So there, there
should be regulatory certainty for Southern Cross,
like you said, based on the bulk of feedback, Southern
Spirit, um that has been uh provided by the Commission
and ERCOT. So, setting that aside now, to your point
Commissioner Glotfelty, on what's the difference between
a DC tie and a generator? And if the flows don't come
in as imports and versus, you know, a forced outage
of a generation unit, ERCOT, the difference in my mind
is with a DC tie, you're building the system to accommodate
the full deliverability and it doesn't come over. And
that's a cost to the system that the ratepayers are
going to pay for. And it could be an extensive cost
because you're building for a capacity that could be
you know, 2000 megawatts, 1000 megawatts. And if you
don't get the import, then you have the transmission
sitting there that arguably as you said, could be used
to facilitate other generation and move around. But
you're talking about transmission infrastructure, sizable
potentially sizable transmission infrastructure to
accommodate a DC tie versus one power plant that you
know, has generation interconnection costs and is part
of the overall ERCOT system already, right? So it's
not as much transmission infrastructure costs um for
a forced outage, forced out generation unit in ERCOT.
My understanding ERCOT is if they were to review
and Woody happy to have you clarify if I'm not capturing
this quite quickly. But if were to review the DC ties
under, you know PGRR105. They're going to go look
at the transmission upgrades and they're just going
to be like, well, these are reliability transmission
upgrades and we're going to get them in reliability
CCNs. And we're going to have a tough time rejecting
any of those CCNs if they're under the auspices of reliability.
I mean, the needs established. I've said that and so
ultimately, yes, we have the ability to reject the
CCN. But if their reliability transmission uh projects
needs established and that, that's a higher hurdle
to reject at the end of the day. So I'd, I'd, I
think that, you know, we, we are facing significant
costs for full liability and to Commissioner mcadam's
point, these are very, there are very broad uh policy
considerations that we have taken into consideration
and I'm not sure that the PGRR is the appropriate avenue
to um you know, have this policy impacts in our market
in um you know, the, the PGRR is a reverse, of course
of the precedent fine. That doesn't, you know, we,
we can move away from precedent and, and look at the
DC ties a little bit differently, but I don't know
that the PGRR is the procedural vehicle to um institute
this policy change. And ultimately, um we, we need
to take a harder look at it and that's why I was
proposing, you know, maybe getting some questions to
see if there was some kind of middle ground between
0 to 100 and so. Commission, Chairman Jackson I'm
happy to hand over the mic to you at this point. Okay.
Do you have any further discussion? I mean, this whole
objective here was just guidance to, to ERCOT. (item:32:Commisioner Glotfelty's additional thoughts on ERCOT guidance) Yeah, I'm
open to, to getting guidance from stakeholders and
from, from ERCOT on this. I think that we can do that
It's funny that we're asking them for guidance on something
that they're asking us for guidance on and then we'll
go back and ask them for guidance on something. But
you know, I think this is from mine, this is just a
policy issue of, of nondiscriminating treatment of
different types of resources. And I, I just think that
that's,
you know, we have resources that come into this system
and go off the system every year and that and the transmission
capacity that was was built into the system for their
use is still there when the generation goes away.
If there was, if there was transmission capacity, excuse
me, built in to the transmission system at an interconnection
point for DC line for 2000 megawatts and the DC line
never came. I guarantee you
that a generator would site there.
I hope that when you cite dispatchable generation mostly
gas, it was you find gas, water transmission and you
cite as close as you can to those three resources because
that's what you need.
And if you get the biggest one, which takes the longest
time to build, which is transmission. You'll find ways
to build pipelines and you'll find ways to move water
(item:32:Commissioner McAdams on regulatory uncertainty) May I interject a thought? I'm staring into the audience
in the eyes of Southern Spirits representatives. And
all this smells like regulatory uncertainty to me.
Now that we're introducing it. They're nodding. Yes.
This has been a long journey. We want the DC tie, we
want it, don't we? I think so. I do. It's made a
true believer out of me. Um And shouldn't this PGRR
just go away for the time being and, and allow them
to
Bruce, I'm staring at you. (item:32:Commissioner Glotfelty on regulatory uncertainty) So what the PGRR does
is the PGRR adds a certainty to the level of imports
to the state into the space. Again, try to understand
this. I do when you build a pipeline,
you sell the capacity of the pipeline. I know, I know
OK, that's the valuable component is the capacity of
the pipeline. There's exporting capacity on a DC line
and there's importing importing capacity on a DC line
and both are you can be, you can monetize them. So
if you monetize both of them to their full potential
it's going to be more likely that you're going to finance
a facility than not. That's why I think the certainty
is important. (item:32:Commissioner Cobos on regulatory uncertainty) But I, I think part of the, the regulatory
uncertainty that the PGRR creates is this sort of background
cost allocation debate, right? I mean,
you know, too much time in SPP and MISO I think you
know, it's a real thing. It's dangerous, you know.
I mean, Southern Spirit has, you know, been involved
in this, in these proceedings and, you know, we finally
closed down, you know, closed the project down with
the directives and I think now they're, you know, based
on my discussions is, you know, they don't want to
get allocated any costs if, if these lines start, you
know, being, you know if, if, if ERCOT start looking
at DC ties from a reliability perspective and transmission
upgrades are needed, um they've invested in their existing
infrastructure for their project to, to provide, you
know, over 500 megawatts of power. If ERCOT starts looking
at DC ties with a different lens and the reliability
and transmission upgrades are needed, you know, their
their concern is like we don't wanna have to pay for
that if cost allocation comes into play and, and I
mean, they're, they can move forward and, and build
their, their line. And ultimately, um you know, to
your point on, on imports, another factor I wanted
to raise was the fact that, you know, there's a lot
that goes into a decision to import, I believe. And
that is well, are you gonna actually make money? Right
in, in true scarcity, right, winter storm area? I mean
if you're able to move power, of course, you're gonna
capture the higher uh scarcity pricing, but there could
be times where, you know, the low cost renewable generation
will undercut the price of imports and it won't be
economically sensible to send the power in and at a
time where we may need it, but there are renewables
in the area that are cheaper and they're going to undercut
the price. So there's just a lot of factors to consider
And I think that's what ultimately, besides, you know
uh regulatory uh governmental control on the other
side of the fence, there's also economic factors on
our end that impact the full deliverability of a DC
tie. And we just don't, we, we, we can't for certain
ensure that we're going to get 100% uh full deliverability
of the DC tie. But we certainly would have to build
a system to ensure that under this PGRR. And that,
that's where I, I have concerns. You know, I mean I
would, I like to optimize them. Do we, do I like DC
ties that to move power and sure, I mean, we, we've
had, we've had some DC ties for a while and I think
if it makes good sense for the DC tie investment in Texas
and bringing more imports, great. But I, I just. I,
I have concerns with the PGRR um and the implications
uh policy implications for our market and also from
a cost perspective. And so I, my guidance would be
um to not move forward with the PGRR for full deliverability
But if the Commission wants to explore a middle ground
then I would be open to exploring a middle ground that
would make sense um to create some option. So some
more optimization of the DC ties if the desire of the
Commission is not to continue to zero out um but find
some, some way of ensuring a little bit more deliverability
than just flat out zero. (item:32:Comissioner Glotfelty on path forward) I'd be happy to work with
you on that. I don't know what the path forward is
on this, but you know, I think that
zero is unacceptable in my opinion. I think 100 in
my opinion, 100% is not different from any other generating
facility. So I don't have a problem with that, but
I'm a believer in DC lines. I'm a believer in the functionality
and the optionality of them. So whatever can get us
closer to their use and benefit in our state. I'm I'm
for so I don't know if we want to delay
a recommendation on this until we can have a discussion
a stakeholder meeting or further discussion with ERCOT.
but I'm open to doing that and deferring a decision
on this or a
a uh
not a direct guidance, guidance on this until we can
have some further discussions. So Commissioner Cobos
didn't you recommend putting, you said you would put
together a list of questions. (item:32:Commissioner Cobos on path forward) I can work with Commissioner Glotfelty
to put, put together some questions. I'm just trying
to think procedurally where we're at with the PGRR
right? It's tabled at TAC. And so if we were to give guidance
on finding a middle ground between zero and 100 ultimately
after stakeholder feedback, that wouldn't fit within
the confines of the bigger um PGRR105 introduced by Rainbow
And I mean, essentially the PGRR doesn't if, if we
were to come up with the middle ground that we were
comfortable with, then the PGRR would need to go away
And ERCOT would probably need to introduce a PGRR
that was requested by the Commission to institute a
middle ground because I don't think the PGRR105 introduced
again by, by a stakeholder would be the appropriate
vehicle to carry our guidance forward. If ultimately
we want to be between zero and 100. Does that make
sense? But weren't you suggesting that maybe the first
step was to put the questions together and see if even
that was an opportunity. (item:32:Ramya Ramaswamy on path forward) With all due respect, I have
not had a chance to talk with Connie. But maybe from
my understanding, from what you're saying is, we could
open a project and post these questions um and see
what the stakeholder process within the Commission
can give us an answer to the questions that you pose
while the PGRR remains stabled at.
(item:32:Commissioner Cobos' thoughts on PGRR) But ultimately, my point is if we come back between
if we get stakeholder comment and we agree in a path
forward, a process forward to explore between zero
and 100. Is that PGRR tabled TAC going to be the
appropriate vehicle to carry our ball forward when
it's been introduced by a stakeholder and it's 100%
deliverability, they would have to agree to go modify
it. And, but is that the appropriate vehicle to carry
I think we'll have to, I think we'll just have to see
I don't think we can prejudge what that is at this
point in time. We can always, you know, them to, to
modify it. We can, you know, approve, we can remand
it with instructions. We can, I mean, we, I think we
have flexibility there. I don't know if we could order
Rainbow to go institute our guidance. But I just feel
that if we found a middle ground, the better, the better
thing to do would be to figure out if we want to
put part of it in roll and part of it in ERCOT
protocol PGRR or if it just needs to go back to an
ERCOT sponsored PGRR to move that ball forward rather
than try to, you know, kind of wedge it into the PGRR105
for Rainbow to carry forward. (item:32:PUC Staff's Connie Corona summarizes the Chairwoman & Commissioners discussion) I think um what we're
hearing today is that you all would like to explore
this policy issue by uh putting out some questions
for stakeholder comment and then developing a Commission
policy and then stakeholders would then react to that
or potentially ERCOT. Um using, using the procedural
uh methods available to them in the ERCOT stakeholder
process. So essentially that's what you've described
Commissioner Cobos. But I would say tabled. I was just gonna say in
your mind, what's the time frame for this? Because
the goal in all of these directives was to create certainty.
If we're creating uncertainty for another three months
six months, nine months I think we're doing a disservice.
Yeah, I hear you. (item:32:Commissioner Cobos' additional thoughts on path forward) And, and you know, that's coupled
with the tremendous work load we have and I mean, we
could put our questions this next month in December.
And then come back and talk about it, you know. But,
but also, you know, the certainty to your point, I
mean,
I know you guys want certainty and, and we're trying
to do that and I think we've done a lot of it
already in the prior dockets. Um but I mean, other
shovel, you know, right now being used to bring in
the DC ties right now, they take years to build. Um
We want to provide policy certainty and, and we can
probably do it in the first quarter of this next year
once we get comments and deliberate, um you know, January
February. But I just want to be mindful of the fact
that, you know, we're trying to provide certainty in
a lot of areas right now. And, and I and I will
commit to developing the questions and getting stakeholder
feedback and taking action as expeditiously as possible
But I, I just, um, can we, can we commit that? We'll
bring this back up at the 1st January meeting
and you'll work on the questions and kind of give us
an idea and then we can go from there. We, we can
start talking about it in January. I'm just wondering
like, you know, we get the comments back and process
them over the holidays, you know, and then we're back
in, I mean, by February, we could start the discussion
on the 18th and maybe continue it to the 2nd. Is
that ok? Because of the intervening holidays and everything.
I think what you were saying is get the questions together
and get them back in January. (item:32:Commissioner Glotfelty's additional thoughts on path forward) I think get them out
I think the, the universal market participants are
probably they've already commented on the PGRR in
the process and they'll comment some more. I don't
think it takes them that long to comment. And I think
that yeah I mean, this is not a huge universe but
we should give them all the opportunity. And if we
say that, you know, comments are due by the end of
December and we evaluate them and have a discussion
about this in January and try to resolve this in January
so we can give our guidance to ERCOT. I think that
would be appropriate. Yeah, I just think that even
though the stakeholders provided comments in the PGRR
what we're asking for is a different sort of process
and a middle ground, right? So it's kind of a new idea
And so, but, you know, we'll get the questions out
in December, we'll get them back. (item:32:Commissoner McAdams additional thoughts on path forward) To the universal
stakeholders is going to grow based on that. I mean
this is now a live issue at the Commission under a
project potentially, potentially. Yes, we'll open
a project. And so I think you're going to hear of concerns
about potential second order effects or don't charge
me money, you're going to get a lot of that. And you're
also going to get other generators that say, oh no
don't build out their capacities because they're going
to be competing against me. And I don't want those
guys competing in my mind. I'm going to see that. So
we know what's going to be said. (item:32:Commissioner Cobos views on ERCOT guidance) Look I mean, I think
that the whole point here I think. I'm, I'm from my
perspective. And Chair Jackson we haven't let you in on this.
But if, if what ERCOT needs today is guidance on how
we feel about PGRR105. My, from my perspective is
I'm not comfortable with it. And so you can do whatever
you want with all our feedback. But it's, but what
I'm trying to do here is provide a path forward to
try to address some of your interests in the middle
ground, right? And try to find a middle ground of how
we can maybe do this in a way where there's a balanced
approach where it's not zero and not 100. But we take
a balanced approach in trying to optimize imports from
DC ties. But why, why shouldn't it be 100? That's what
I don't get is every generator when they interconnect
with our state gets 100 every generator.
But it doesn't include all the transmission infrastructure
potentially that would be required to facilitate a
2000 Megawatt DC tie into Texas. (item:32:Commissioner Glotfelty on deliverability) If you built a 2000 Megawatt
generator in the state and went through the interconnection
process. You would get 2000 megawatts of deliverability.
At all times, at all times. You can't say at all times
on any of these things because there are, there are
too many facets of the system, but you get a large
portion of that deliverability in in other markets
like SPP and MISO you're not buying deliverability
We've said consumers are going to pay for all of that
but you're giving them the ability to inject a large
portion of their project. And as a DC tie developer,
these are the battles that we fought in 11 different
states. What's the difference between a generator and
a converter station? You know, in the eyes of an individual
and a regulator, a lot in the eyes of a electric power
system? Nothing. (item:32:Commissioners dialogue on deliverability) So, so the distinction is
I think it's fair to say when we approve those, we
say we expect you to provide what, what you say the
value. And then you trip off line and there you have
a tube leak and guess what? But, but when it's brand
new and nice and shiny, we expect you to provide that
and that's when you're interconnected. You're right. But listen, I
had, when I was at Calpine, we built a 501 h turban
down at Magic Valley and it didn't work for 9 months
or 10 months. Then law suit, you know.
I mean. The transmission was built and our generator
didn't work, so. I know.
I think what we're looking for here is a path forward
right? (item:32:Connie Corona suggestion to Commissioners concerning 2nd Open Meeting in 2024) So
Commissioners, if I may make a suggestion? The 2nd Open Meeting
of 2024 occurs on February 1st. So that's pretty early
um, in the first quarter as Commissioner Cobos alluded
to. Um, Staff will work with your respective offices
to develop some questions, get some comments back from
stakeholders and prepare an analysis for you to discuss
at that February 1st meeting. Is that acceptable? It's
acceptable to me? Yes. Yes. Okay. Thank you. Okay. So that will. So
does that mean this is tabled right now or just not
I guess it's not. That means we're moving forward with
a with, a with, a with, a policy and some questions.
Okay. (item:59:Chairwoman Jackson pauses Open Meeting, to hold Closed Session) Well, we had kind of said at the top of the
hour that we would go into Closed Session somehow around
1130. Um, the next Item up I think is going to have
considerable discussion. And so I would suggest that
um, we adjourn and go into um Closed Session. Now
and um so having convened in a duly noticed Open Meeting.
The Commission will now at 11:09 on November 30, 2023,
hold a Closed Session to discuss matters pursuant to
Chapter 551 of the Texas Government Code Sections 551.071.
And we'll be back in probably 30 minutes.