WEBVTT 00:04.000 --> 00:07.198 (item:0:Chairman Gleeson calls meeting to order) This meeting of the Public Utility Commission of Texas will come to order. To consider 00:07.254 --> 00:10.574 matters that have been duly posted with the Secretary of State for 00:10.622 --> 00:14.462 July 25, 2024. Good morning 00:14.486 --> 00:17.210 Shelah, Connie, Barksdale. (item:0:Chairman Gleeson lays out the flow for today’s agenda) So 00:17.710 --> 00:22.038 Commissioners, what I'd like to do this morning is start 00:22.094 --> 00:26.528 with Public Comment. I don't know if we have anyone signed up, but we're 00:26.544 --> 00:30.260 going to let Shelah run through the Consent Agenda. And then 00:30.720 --> 00:34.824 start with public comment and then bring up the Beryl 00:34.872 --> 00:38.312 related items first. This way, anyone that's here for that can get 00:38.336 --> 00:40.712 through that and then leave, and then we'll take up the rest of the agenda 00:40.736 --> 00:44.128 in order, if that works for everybody? Okay. 00:44.304 --> 00:47.800 Shelah, will you run us through the Consent Agenda please? Yes. 00:47.840 --> 00:51.216 Good morning. Commissioners recusal memos were filed in project 00:51.288 --> 00:55.208 No. 52761. The Chairman is recused from Items 00:55.344 --> 00:58.808 3, 4, 5, 9 and 10. Commissioner Hjaltman is 00:58.824 --> 01:02.400 recused from Items 2 and 7. By individual ballot, 01:02.440 --> 01:05.328 the following items are placed on your Consent Agenda: 01:05.464 --> 01:08.832 Items 1, 3, 4, 5 and 8. 01:09.016 --> 01:12.528 Also by individual ballot, the Commissioners voted to place Items on 01:12.544 --> 01:15.936 the Consent Agenda, and no one signed up to speak on these Items. 01:16.088 --> 01:20.340 Those are Items 13, 14, 16 and 24. 01:21.130 --> 01:24.306 Thank you, Shelah. (item:0.1:Chairman Gleeson asks for motion to approve items on Consent Agenda) I'd entertain a motion to approve the consent items 01:24.378 --> 01:27.314 just laid out by Shelah. So moved. Second. 01:27.402 --> 01:29.850 Have a motion and second. All those in favor say aye. Aye. 01:29.930 --> 01:33.746 Opposed? Motion prevails. All right. I'll call up 01:33.778 --> 01:37.322 Item No. 11 for General Public Comment. Shelah, do we have anyone signed 01:37.346 --> 01:41.050 up? (item:11:Shelah Cisneros confirms 1 person has signed up for General Public Comments) Yes Chairman, one person signed up to speak under Item number 01:41.090 --> 01:46.690 11. I believe it's Savant Moore. 01:49.580 --> 01:53.260 And one question is that, are we sticking with the three minute time limit? 01:53.340 --> 01:56.756 Yes, we'll do three minutes. All right. Good morning, sir. If you could state your 01:56.788 --> 02:00.652 name and who you represent. (item:11:Houston resident Savant Moore gives Public Comments concerning CenterPoint's response to Hurricane Beryl) Good morning Commissioner. Hopefully governor 02:00.676 --> 02:04.212 of you watching this? My name is Savant Moore. I'm a public servant for the 02:04.236 --> 02:07.972 city of Houston. Today I come on behalf of everyone in my city 02:07.996 --> 02:11.684 of Houston, asking you to do the impossible, holding american 02:11.772 --> 02:15.004 corporation accountable, ensure they show us the same respect 02:15.092 --> 02:19.178 they give their shareholders. We are their customers. I stand before 02:19.234 --> 02:22.434 you to highlight a grave injustice my city endured after 02:22.482 --> 02:25.802 Hurricane barrel. While the CEO of Centerpoint and the 02:25.826 --> 02:29.594 VP of utilities went a few hours to two days without 02:29.762 --> 02:33.026 power, my community suffered nine to 14 02:33.138 --> 02:36.710 days, and some on northeast Houston still do not have power. 02:37.370 --> 02:41.266 Our seniors, who depend on electricity for oxygen and insulin, 02:41.378 --> 02:44.976 were left vulnerable and struggling. We must remember the 24 lives 02:45.048 --> 02:48.368 lost, half of which were directly due to power loss. 02:48.504 --> 02:51.544 Let us take a moment to honor their memory. Rest in peace, 02:51.592 --> 02:55.696 Maria Laredo Russell, Richardson Sarah Elizabeth Elston 02:55.808 --> 02:59.368 Johnny Courtney J. Michael Taylor Charles 02:59.424 --> 03:03.432 Richard Anderson Sr. Candy York Oscar Rodriguez James 03:03.496 --> 03:06.904 Edward Butcher Brian Keith Taylor Pamela Jarrett 03:06.952 --> 03:10.640 Thomas Fermin Vergara William Carreras Judy agreed 03:10.760 --> 03:13.846 to Leroy Lyons Michael Lehrer David Smith 03:13.918 --> 03:17.614 Rebecca Smith Charles Yanez Ethel Carter Michael 03:17.662 --> 03:21.182 Pervette Rachel Ross electricity was created 03:21.206 --> 03:24.934 in the late 18 hundreds, yet we still haven't figured out power outage 03:24.982 --> 03:28.238 solutions. This situation reveals a severe lack 03:28.254 --> 03:31.998 of vegetation management and disaster preparedness. By Centerpoint, 03:32.134 --> 03:35.814 I asked, what will this board and the governor do to protect Texans lives 03:35.942 --> 03:39.432 from such mismanagement? To prevent further tragedies and 03:39.456 --> 03:42.792 prolonged power outages, I propose the following immediate 03:42.856 --> 03:46.296 actions. Enhanced vegetation management increase the 03:46.328 --> 03:49.648 frequency and scope of tree trimming and vegetation clearance 03:49.744 --> 03:53.760 around power lines to reduce the risk of outages caused by fallen 03:53.800 --> 03:57.528 branches. Deployment of mobile power units. Strategically position 03:57.624 --> 04:01.460 mobile generators in temporary power units in high risk areas. 04:01.760 --> 04:05.168 Priority restoration for critical needs establish a clear, 04:05.264 --> 04:08.616 prioritized restoration plan that focuses first on areas with 04:08.648 --> 04:11.916 hospitals, senior centers and individuals relying on medical 04:11.988 --> 04:16.196 equipment. Improve communication systems. Implement robust 04:16.267 --> 04:20.084 real time communication channels to keep residents informed. 04:20.212 --> 04:23.836 Pre storm inspections. Conduct thorough pre storm 04:23.868 --> 04:27.356 inspections of infrastructure to identify and address potential 04:27.428 --> 04:30.036 weak points that could fail during severe weather. 04:30.188 --> 04:33.716 Lastly, pre stage restoration teams have teams ready 04:33.748 --> 04:38.422 and pre stage in strategic locations to quickly begin power restoration. 04:38.596 --> 04:42.442 This is a bipartisan issue and a Texas issue, and we 04:42.466 --> 04:46.178 need to find a solution to quickly, because it's not a question if 04:46.194 --> 04:49.714 the next storm is coming, if there will be another power outage, 04:49.762 --> 04:53.426 it's when and when will we be prepared. We must act swiftly 04:53.458 --> 04:56.578 to protect our communities and prevent further loss of life. 04:56.714 --> 05:00.146 Let's honor the memory of those we lost by ensuring this never happens 05:00.178 --> 05:03.850 again. In closing, I leave you with the scripture. Do not 05:03.890 --> 05:07.278 merely listen to the word and so deceive yourselves. 05:07.454 --> 05:10.846 Do what it says. James 122 the 05:10.878 --> 05:14.222 purpose of human life is to serve and to show compassion and the 05:14.246 --> 05:17.878 will to help others. May God bless you, and may God bless Texas. 05:17.934 --> 05:20.558 Thank you. Thank you for being here this morning. Thank you for your comments, 05:20.614 --> 05:21.210 sir. 05:25.190 --> 05:27.598 We have no one else signed up. That's correct. Thank you, 05:27.614 --> 05:31.462 Sheila. So I think the way 05:31.566 --> 05:35.102 I talk to Connie, I think the, and Sheila, I think the best way to 05:35.166 --> 05:39.142 do this, I'm going to call up items number, items 32 and seven together, 05:39.326 --> 05:43.050 and then we'll take up item 33 directly after that. 05:43.430 --> 05:48.302 (item:32:Chairman Gleeson lays out Project No. 56793) So I would call up Item 32, that's Docket 56793: 05:48.366 --> 05:51.622 Issues related to disaster resulting from Hurricane Beryl. 05:51.766 --> 05:55.934 (item:7:Chairman Gleeson lays out Application of CenterPoint Energy Houston Electric, LLC for approval of Transmission Distribution System Resiliency Plan) And Item 7, that is Docket No. 56548, 05:56.062 --> 05:59.486 Application of CenterPoint Energy Houston Electric, LLC for 05:59.518 --> 06:03.576 approval of its Transmission Distribution System Resiliency Plan. And 06:03.608 --> 06:07.360 ask CenterPoint to come up. I would also 06:07.400 --> 06:10.456 like to thank just a few people who submitted letters in 06:10.488 --> 06:13.980 this. So we received letters related to barrel from 06:14.400 --> 06:17.984 a joint letter from Senator Miles, Senator Alvarado, and Senator 06:18.032 --> 06:21.792 Cook. And we also received a letter from Houston's Mayor, 06:21.896 --> 06:25.552 John Whitmire. So I want to thank them for their input as well. Mr. Chairman, 06:25.576 --> 06:28.540 may I say something about Docket 7 06:30.540 --> 06:34.028 which is what we just brought up? Is that right? So we brought up 32 06:34.084 --> 06:37.300 and Item 7. Yeah. Oh, Item 7. 06:37.340 --> 06:40.160 Okay, I'll wait on Docket No. 7 until that time. Jason? 06:44.300 --> 06:47.676 (item:32:CenterPoint's Executive VP Jason Ryan gives update on Project 56793) Good morning, Chairman Gleeson and Commissioners. I'm Jason Ryan, 06:47.708 --> 06:51.844 Executive Vice President at CenterPoint Energy. I have with me today Jason 06:51.892 --> 06:56.650 Wells, our CEO. Tony Gardner, our Chief Customer Officer 06:56.990 --> 07:00.686 and Randy Pryor, VP of our Electric Operations. 07:00.758 --> 07:04.038 Who was also Incident Commander during the 07:04.174 --> 07:07.742 response to Hurricane Beryl. Let me 07:07.766 --> 07:10.570 before I turn it over to our CEO, 07:11.230 --> 07:14.622 provide a little bit of information to you, but more importantly, 07:14.646 --> 07:18.366 the public who's watching. On some information that we filed yesterday 07:18.558 --> 07:22.840 in Project 56793. 07:23.340 --> 07:27.156 So Item No. 16 in that Project is 07:27.188 --> 07:31.132 the presentation that you all have before you, and that, I understand will be 07:31.236 --> 07:34.652 on the screen for the public that's watching, but for people that want a copy 07:34.676 --> 07:38.380 of it, it's in Project 56793, and it's 07:38.420 --> 07:40.040 Item No. 16 there. 07:42.180 --> 07:46.222 We also provided our initial set 07:46.246 --> 07:50.214 of factual documents to help aid in the Commission's 07:50.262 --> 07:53.478 review of what happened during the storm, 07:53.574 --> 07:57.850 leading up to the storm and after during restoration. 07:58.150 --> 08:01.854 That is Item No. 17 in that same Project, 08:01.942 --> 08:05.646 in Project 56793. And I'd 08:05.678 --> 08:09.686 call your attention maybe to a couple of things just to orient the 08:09.718 --> 08:13.650 material. In Tab No. 3 of that document 08:14.370 --> 08:18.074 is a timeline of relevant 08:18.122 --> 08:21.762 facts. It's the beginning of our production 08:21.786 --> 08:25.178 of those relevant facts to the Commission. Things like how many 08:25.354 --> 08:29.370 mutual assistance crews did we call on, when did they show 08:29.410 --> 08:33.130 up in the Houston area to begin work, how many agents 08:33.169 --> 08:36.418 we had in our call center day by day. That kind of 08:36.433 --> 08:38.669 factual information is under Tab 3. 08:39.370 --> 08:42.030 Then under Tabs 7 through 19, 08:42.770 --> 08:46.570 we lay out a day by day with both 08:46.610 --> 08:50.546 those factual statistics of call center agents and outages, 08:50.618 --> 08:54.322 and how many customers we've restored, how much of the emergency generation was used day 08:54.346 --> 08:57.522 by day, but also our communications to our customers 08:57.586 --> 09:00.870 broken up day by day, both in our press releases, 09:01.170 --> 09:04.640 other public information posted on our website, social media. 09:04.810 --> 09:08.080 So you have all that content there in tabs seven through 19. 09:08.940 --> 09:12.292 Under Tab 20 is how our incident 09:12.356 --> 09:15.452 command is structured, again to orient you to 09:15.476 --> 09:18.080 the work that Randy led as Incident Commander. 09:19.380 --> 09:23.500 Going back to the front part, though, relevant to what we'll present 09:23.660 --> 09:28.156 today, is some of our go forward information. Under tab 09:28.348 --> 09:32.422 one is the new communications program that 09:32.486 --> 09:36.130 we will have in place for the next storm. And going forward, 09:36.470 --> 09:40.094 under tab two is our screenshots of the new outage 09:40.142 --> 09:43.450 tracker that will be going live by August 1. 09:43.950 --> 09:48.330 So that gives a little bit of information about what we provided yesterday. 09:49.190 --> 09:52.462 We hope that providing that information early will allow 09:52.646 --> 09:55.830 the fact finding and after action report to proceed quicker, 09:55.870 --> 09:59.496 because I know that the schedule you have laid out in your report to the 09:59.528 --> 10:02.648 Legislature is going to require us to move with some urgency. So we wanted to 10:02.664 --> 10:05.928 provide this information now, and I know that we'll 10:06.024 --> 10:09.664 keep providing information going forward. So with that 10:09.712 --> 10:13.400 if it's okay with you Chairman, I'll turn it over to our CEO. That's perfect. 10:13.440 --> 10:17.432 Thank you, Jason. I think just for. So this goes somewhat smoothly, if we 10:17.536 --> 10:20.688 could withhold our questions until they finish their presentation. I've told them they have 10:20.704 --> 10:24.472 about 30 minutes or so to lay out their presentation. 10:24.616 --> 10:28.552 Mr. Chairman, I do have a comment about the resiliency plan docket. I'm happy 10:28.576 --> 10:32.144 to go whenever you want at the end. Yeah, let's let them lay it 10:32.152 --> 10:35.216 out, and then we can bring, we can talk through those dockets. Okay. Good morning, 10:35.248 --> 10:38.400 Jason. (item:32:CenterPoint's CEO Jason Wells gives apology to CenterPoint's customers and their Pillars of Action) Good morning Chairman Gleeson, Commissioners. I'm Jason 10:38.440 --> 10:42.008 Wells, CEO of Centerpoint Energy. Thank you for the opportunity to 10:42.024 --> 10:45.620 be here in front of you this morning. It is my privilege, 10:45.920 --> 10:49.024 the privilege of all of our leaders and employees to serve our customers in 10:49.032 --> 10:51.920 the greater Houston area. As you all know, 10:51.960 --> 10:55.960 Hurricane Beryl left widespread devastation in the greater Houston 10:56.000 --> 10:59.020 region. Including extensive power outages, 10:59.480 --> 11:02.776 with many of our customers experiencing uncertain wait times for 11:02.808 --> 11:06.736 restoration. In times of emergency, our responsibility 11:06.808 --> 11:10.220 is to respond quickly, to communicate clearly, 11:10.640 --> 11:14.424 to provide accurate information, and to restore power 11:14.552 --> 11:17.330 as rapidly and safely as we can. 11:18.310 --> 11:21.726 I take personal accountability for the areas where we fell 11:21.758 --> 11:25.638 short of our customers expectations. Most importantly, 11:25.694 --> 11:29.370 I want to apologize to our customers for the frustration we caused. 11:29.990 --> 11:33.558 We will do better. While we cannot 11:33.734 --> 11:37.782 erase the frustrations and difficulties so many of our customers endured, 11:37.926 --> 11:41.770 I and my entire leadership team will not make excuses. 11:43.260 --> 11:48.284 We will improve and act with a sense of urgency before 11:48.372 --> 11:51.788 turning to our commitments to improve. I do want to take a moment 11:51.924 --> 11:55.068 to acknowledge and thank all of the incredible work of 11:55.084 --> 11:58.036 our vegetation line and support employees, 11:58.188 --> 12:01.988 as well as our local contractors and mutual assistance crews who worked 12:02.044 --> 12:06.228 in incredibly challenging conditions to restore power in 12:06.244 --> 12:10.212 terms of areas for improvement. I commit that starting immediately, 12:10.396 --> 12:13.644 we will improve our communications with our customers and will take 12:13.692 --> 12:17.012 specific actions to build the most resilient coastal grid in the 12:17.036 --> 12:20.812 country. Slide three summarizes our 12:20.836 --> 12:24.480 initial plan. Additional details can be found on slide 15. 12:26.020 --> 12:28.960 Our pillars of action fall into three categories, 12:29.340 --> 12:32.612 improvements in resiliency, improvements in communication, 12:32.796 --> 12:36.528 and greater collaboration with local partners and emergency 12:36.584 --> 12:39.896 responders. Each pillar of action is designed to 12:39.928 --> 12:43.696 specifically address issues for the remainder of this hurricane season 12:43.808 --> 12:47.232 and beyond to improve the resiliency 12:47.256 --> 12:50.536 of our system, which my colleague Randy will expand on shortly. 12:50.728 --> 12:55.128 We are especially focused on enhancing our vegetation management efforts 12:55.304 --> 12:59.344 and as of July 16, we had nearly doubled our vegetation 12:59.392 --> 13:02.928 management workforce to immediately address the higher risk areas of 13:02.944 --> 13:05.800 vegetation throughout the rest of this calendar year. 13:07.100 --> 13:10.340 To improve our communications with our customers and to address one of 13:10.840 --> 13:14.676 the primary criticisms we received in our response to Hurricane barrel, 13:14.748 --> 13:17.960 we will launch a new cloud based outage tracker on August 1. 13:19.460 --> 13:22.948 Tony will provide more details about this new tool and other actions we 13:22.964 --> 13:24.480 will take in just a minute. 13:25.820 --> 13:29.400 To strengthen our community partnerships and improve on our emergency response coordination 13:29.500 --> 13:33.192 year round. We will be hiring a new senior leader to 13:33.216 --> 13:36.392 join our executive team whose expertise is intended to help 13:36.416 --> 13:40.048 us make the necessary improvements in every aspect of our 13:40.064 --> 13:41.620 emergency and storm response. 13:43.000 --> 13:46.264 We'll also be taking additional actions based on internal reviews, 13:46.432 --> 13:50.032 independent analysis and counsel from emergency 13:50.096 --> 13:52.580 response and communications experts, 13:53.320 --> 13:57.500 as well as through additional feedback from this body, our customers, 13:57.960 --> 14:00.460 our elected officials and our community leaders. 14:01.520 --> 14:05.240 Going forward, our most important priority today in the months ahead 14:05.400 --> 14:09.664 will be to improve our emergency response with a sense of urgency to 14:09.832 --> 14:13.528 re earn your trust, as well as the trust of the millions of people who 14:13.544 --> 14:17.288 depend on us. Our company and the thousands 14:17.384 --> 14:20.976 of men and women of CenterPoint will remain tireless in our efforts 14:21.088 --> 14:24.532 to strengthen our system and better serve the community that 14:24.556 --> 14:28.228 we are all proud to call home. I'll now turn it over to Tony 14:28.284 --> 14:31.844 to cover our action plan. (item:32:CenterPoint's Sr. VP Chief Customer Officer Tony Gardner gives CenterPoint's Action Plan) Good morning Commissioners. 14:32.012 --> 14:35.028 My name is Tony Gardner. I'm the Senior Vice President Chief Customer Officer here at 14:35.044 --> 14:38.876 CenterPoint. As Chief Customer Officer, it's a critical part of my job to 14:38.908 --> 14:42.760 represent the voice of the customers in how we plan and conduct our business. 14:43.180 --> 14:47.324 Since Beryl made landfall, I've personally reviewed hundreds of customer complaints 14:47.492 --> 14:50.786 and hurt their frustrations that they shared with us in the ways 14:50.818 --> 14:53.470 in which we communicated and did not meet their expectations. 14:54.090 --> 14:57.938 I'll personally carry forward those voices as we execute actions 14:57.994 --> 15:01.698 that Jason summarized my entire organization will be 15:01.714 --> 15:05.778 laser focused on improving our overall customers experience for 15:05.794 --> 15:09.330 our communities that we have the privilege to serve. Slide 5 15:09.410 --> 15:13.150 lists the five key areas we've identified for improvement in our customer communications, 15:13.610 --> 15:16.402 and I want to use Slide 6 to focus on the actions we will take 15:16.426 --> 15:18.560 to address in some of those areas. 15:19.220 --> 15:23.000 First, you heard Jason talk about the launch of our 15:23.420 --> 15:26.812 new cloud based outage tracker by August 1, which will accommodate 15:26.836 --> 15:30.680 the new level of increased traffic that we can expect during significant storm events. 15:30.980 --> 15:35.028 This is where our prior outager failed. It was a physical, 15:35.084 --> 15:39.180 server based system which simply could not handle the traffic during elevated 15:39.220 --> 15:42.908 storm level events. Our new outage tracker will allow customers to 15:42.924 --> 15:46.950 see outages based on their counting city or by their zip code. 15:47.410 --> 15:50.870 The application will be mobile friendly and mobile responsive. 15:51.250 --> 15:54.002 After we've launched a new outage tracker, we will continue to make sure that we 15:54.026 --> 15:57.498 engage with our customers and community leaders to get feedback so that we 15:57.514 --> 16:01.670 can continually make sure that we improve on that application. 16:02.610 --> 16:06.114 Second, as a part of our effort to dramatically improve our public 16:06.162 --> 16:09.722 communications, we brought in industry experts to help us develop 16:09.786 --> 16:14.280 an at emergency preparedness and response communications playbook. 16:14.740 --> 16:17.828 This communication playbook will include daily press briefings, 16:18.004 --> 16:22.292 press releases, public advertising, social media and 16:22.316 --> 16:26.404 other tools to engage and inform our customers more effectively during times 16:26.532 --> 16:29.120 or major storms when they need to hear from us the most. 16:29.980 --> 16:33.428 While these specific communications will be led by our corporate communications 16:33.484 --> 16:36.956 arm and our organization, it will be closely coordinated with the customer 16:36.988 --> 16:40.792 communications to ensure that we maximize every possible tool to 16:40.816 --> 16:42.700 keep our customers informed and updated. 16:44.080 --> 16:47.416 Third, we are committed to making sure that we provide our 16:47.448 --> 16:51.008 customers restoration guidance to our impacted service territories 16:51.064 --> 16:54.220 24 hours after a storm has left our service territory. 16:54.600 --> 16:58.712 That guidance will be refined and communicated daily and 16:58.816 --> 17:04.392 our customers will know, based on our situational awareness, where we are in our 17:04.536 --> 17:08.217 restoration efforts. In addition, we will also continue to 17:08.233 --> 17:11.361 drive the adoption of power alert service to increase our ability to push 17:11.505 --> 17:15.887 information to our customers in a timely manner. We recognize that some customers 17:15.929 --> 17:19.169 experienced delays receiving their power alert service messages during Hurricane 17:19.209 --> 17:23.209 Beryl and we're taking the necessary measures to make sure that we can provide 17:23.289 --> 17:27.097 the appropriate capacity to accommodate the use of that 17:27.193 --> 17:30.361 tool during our storms. One thing I would like to 17:30.385 --> 17:33.588 stress to this body is that because our marketplace, 17:33.684 --> 17:37.292 the way our marketplace is structured, we only have contact information for 17:37.316 --> 17:39.360 about 42% of our customers. 17:42.140 --> 17:45.380 That's because we only have direct contact if those customers 17:45.420 --> 17:49.180 sign up for power alert services through us or if the reps pass 17:49.220 --> 17:52.908 that information on to us to help increase the effectiveness of 17:52.924 --> 17:56.732 our direct communications, we may ask you all to 17:56.756 --> 18:00.092 change policy so that we can get contact information from 18:00.116 --> 18:03.452 our reps so that we can improve upon the number of 18:03.476 --> 18:06.732 customers that we can push power alert service notifications to 18:06.756 --> 18:08.240 during storm level events. 18:10.660 --> 18:14.884 Fifth, to address the lengthy hold times that our customers endured 18:14.932 --> 18:18.428 during Hurricane Beryl, we'll increase our call center staffing by more than 18:18.444 --> 18:22.388 165% compared to our normalized levels. To make 18:22.404 --> 18:25.400 sure that we can reduce our wait times for our customers. 18:26.060 --> 18:29.428 Each of our call center agents will continue to go through additional training 18:29.484 --> 18:32.940 during storm season to make sure that they can provide customers 18:32.980 --> 18:36.680 the level of service that they've come to expect and that they deserve. 18:37.580 --> 18:41.004 In addition, we'll be leveraging speech analytics to monitor 18:41.052 --> 18:44.764 our customers experience while they're dealing with our contact center agents during 18:44.812 --> 18:48.068 storms so that we can make sure we provide them the right level of the 18:48.084 --> 18:51.170 right level of customer support and meet their expectations. 18:52.230 --> 18:55.390 In closing, this is just the start of our efforts to rearn our customers 18:55.430 --> 18:58.438 trust. We know that we have a long way to go to make sure that 18:58.454 --> 19:02.490 we can meet our customers expectations, but we're definitely committed to doing so. 19:02.790 --> 19:05.598 And with that, I'd like to turn things over to Randy and he'll talk to 19:05.614 --> 19:08.758 you about how we went through making sure that we restored our power for our 19:08.774 --> 19:10.210 customers during the storm event. 19:13.910 --> 19:16.756 Good morning and thank you, Tony. 19:16.868 --> 19:20.452 (item:32:CenterPoint's VP of Operations & Incident Commander Randy Pryor on the restoration of power after Hurricane Beryl) My name is Randy Pryor and I oversee our distribution projects and 19:20.476 --> 19:24.412 grid modernization programs here at Centerpoint. I thank you for the 19:24.436 --> 19:28.260 chance to speak here today. I served as the incident commander during 19:28.300 --> 19:32.560 the storm, overseeing our preparation, response and restoration efforts. 19:32.900 --> 19:36.204 So let's begin with what happened. We began tracking 19:36.252 --> 19:39.996 Hurricane Beryl, prepping for impact nine days before Beryl made 19:40.028 --> 19:43.682 landfall as a storm began approaching Texas. 19:43.826 --> 19:46.430 Can you speak into the microphone a little more? I'm sorry. 19:49.330 --> 19:52.962 As a storm approached Texas, forecast initially showed that 19:52.986 --> 19:56.802 our service area and Greater Houston would be spared a direct 19:56.946 --> 19:59.470 impact by the worst of the hurricane. 19:59.810 --> 20:03.950 Nonetheless, we remain vigilant. We plan for impact 20:04.890 --> 20:08.598 and secured 3000 mutual assistant crew members, all of 20:08.614 --> 20:12.510 whom would be arriving from locations safely outside of the projected 20:12.550 --> 20:15.622 path of the storm. We also coordinated with 20:15.646 --> 20:19.518 utilities across Texas and our regions to ensure resources 20:19.614 --> 20:23.446 would be available if need be. As the forecast 20:23.598 --> 20:27.350 trajectory changed, we quickly called on additional 20:27.390 --> 20:30.582 mutual assistance crews under agreements that are in 20:30.606 --> 20:34.550 place well before any major event to substantially increase 20:34.630 --> 20:38.070 our crews. As shown on page eight. 20:39.090 --> 20:42.650 Early in the morning on Monday, July 8, Hurricane Beryl 20:42.770 --> 20:45.830 made landfall as a powerful category one hurricane. 20:46.170 --> 20:51.178 It brought heavy rains and flooding. Winds up to 97 20:51.194 --> 20:54.030 knocked out power to over 2 million of our customers. 20:54.570 --> 20:58.122 The powerful combination of extreme winds, along with the 20:58.146 --> 21:01.458 weakened trees and other vegetation, caused significant damage to 21:01.474 --> 21:04.748 our communities. Along with the company's electrical lines, 21:04.884 --> 21:07.560 distribution poles and other equipment. 21:10.100 --> 21:13.460 And with Burl, the extent of trees falling was greater 21:13.540 --> 21:17.780 than what might have been anticipated in previous storms due to additional stress 21:17.900 --> 21:21.520 from winter freezes and droughts. Over the last several years, 21:22.260 --> 21:26.252 the greater Houston area was hit directly by the dirty side of 21:26.276 --> 21:29.760 the hurricane and sustained strong winds for an extended period 21:29.800 --> 21:32.976 of time and far inland. To put the 21:33.008 --> 21:37.160 impact in context, Beryl had peak wind gusts of 97 21:37.200 --> 21:42.952 mph winds recorded along the coast of 91 21:42.976 --> 21:46.340 Bush Intercontinental Airport at 83 mph. 21:46.880 --> 21:50.040 Once the storm had passed through the area and it was safe to do so, 21:50.160 --> 21:53.296 we began immediately dispatching our crews to respond and 21:53.328 --> 21:56.420 assess the damage in accordance with our protocols. 21:57.590 --> 22:00.966 Now let me talk about our response and restoration efforts. 22:01.158 --> 22:04.590 As shown on slide nine, we activated 22:04.630 --> 22:08.214 and deployed over 15,000 centerpoint and mutual assistance 22:08.262 --> 22:11.430 crew members. These incredible men and 22:11.470 --> 22:15.302 women worked 16 hours shifts in hot, humid and 22:15.326 --> 22:19.374 at times stormy conditions. I want to thank these frontline workers 22:19.502 --> 22:22.918 from here in Houston and across our state and 22:22.934 --> 22:26.694 the nation for the service and dedication in restoring power 22:26.742 --> 22:30.222 to our communities. We also coordinated with the 22:30.246 --> 22:33.798 Texas Division of Emergency Management and other local partners 22:33.854 --> 22:37.158 to prioritize hospitals, assisted living centers, 22:37.334 --> 22:41.566 cooling centers and water treatment facilities over 22:41.598 --> 22:45.110 the course of restoration. We ultimately set up 22 22:45.150 --> 22:48.770 staging sites to coordinate and direct our restoration efforts, 22:49.190 --> 22:52.902 although we had to shut one down due to threats of violence against our 22:52.926 --> 22:56.678 crews. We deployed mobile generators at 28 22:56.734 --> 23:00.110 sites across Greater Houston to various critical facilities, 23:00.270 --> 23:03.678 including those I mentioned before going on 23:03.694 --> 23:07.350 to page ten. During our restoration efforts, we replaced 23:07.390 --> 23:09.810 over 3000 distribution poles, 23:10.270 --> 23:14.060 walked over 8500 circuit miles to repair damage, 23:14.230 --> 23:17.776 and removed or trimmed more than 35,000 trees and 23:17.808 --> 23:20.936 or other vegetation. As we turn 23:20.968 --> 23:24.048 to slide eleven, in terms of the 23:24.064 --> 23:28.120 pace of our restoration, we restored over 1 million customers 23:28.200 --> 23:31.648 within the first 48 hours. While the thousands on 23:31.664 --> 23:35.136 the ground worked incredibly hard to restore power and achieve significant 23:35.248 --> 23:39.288 impact in the first 48 hours, it is clear we must 23:39.344 --> 23:42.696 continue to enhance the resiliency of our system to 23:42.728 --> 23:44.820 support faster restoration times. 23:45.880 --> 23:49.664 We have engaged in industry experts in emergency response 23:49.752 --> 23:53.536 to conduct an extensive review of our emergency response 23:53.568 --> 23:58.024 programs. This effort is intended to develop key learnings 23:58.152 --> 24:01.340 to support rapid restoration of critical customers, 24:01.840 --> 24:05.820 improve the speed which we resolve public safety issues, 24:06.200 --> 24:09.662 and improve end to end processes from mutual assistance, 24:09.726 --> 24:13.730 crew activation to crew and work dispatch. 24:14.710 --> 24:18.190 Once this study is complete, we will share these learnings and 24:18.230 --> 24:21.806 recommendations with the commission and other relevant local and 24:21.838 --> 24:25.766 state stakeholders. More immediately, we will 24:25.798 --> 24:29.990 use innovative damage modeling to assist and strategically deploy 24:30.110 --> 24:33.758 our crews and overhaul our processes for work assignments 24:33.894 --> 24:36.650 and staging site selections. 24:37.230 --> 24:40.822 The goal here is very simple we intend to 24:40.846 --> 24:44.422 enhance and have available tools to restore power to 24:44.446 --> 24:48.450 as many people as quickly as we can and as safely as possible. 24:49.830 --> 24:53.062 Given the effect of the vegetation that had on our system, 24:53.246 --> 24:56.974 one of the core programs we will be immediately expanding 24:57.102 --> 25:00.510 is our vegetation management work. Over the past 25:00.550 --> 25:04.624 five years, we have spent over 220 million in vegetation management, 25:04.792 --> 25:07.660 covering more than 25,000 circumahs. 25:08.240 --> 25:11.288 Given the impact that extreme weather is having on 25:11.304 --> 25:15.312 our vegetation, it is clear than ever before that 25:15.336 --> 25:18.760 we must expand this effort. And that is 25:18.800 --> 25:22.368 what we will most urgently do in terms of 25:22.384 --> 25:26.192 the critical role of mutual assistance and the invaluable relationships we 25:26.216 --> 25:29.260 have with utilities across the state and the region. 25:29.570 --> 25:33.550 We will be evaluating how we can better mobilize these critical assets. 25:34.130 --> 25:38.390 And lastly, given the impact the storm had on our essential services, 25:38.930 --> 25:42.626 we will be adding temporary generation units to deploy 25:42.738 --> 25:46.082 and provide power to critical care facilities and 25:46.106 --> 25:50.122 other critical infrastructure. These critical facilities and 25:50.146 --> 25:53.746 essential services depend on us, and we will work 25:53.778 --> 25:57.282 closely with them over the coming days and weeks to identify how 25:57.306 --> 26:00.416 we can best ensure that they have the backup power that 26:00.448 --> 26:03.816 they need. We will work tirelessly 26:03.968 --> 26:07.260 to strengthen the resiliency of our grid, 26:08.280 --> 26:11.184 take further steps to address vegetation risk, 26:11.312 --> 26:15.460 and better coordinate and improve our emergency restoration efforts. 26:16.160 --> 26:20.020 My commitment to the community that I am so proud to serve 26:20.480 --> 26:23.600 is that we will learn, we will take action, 26:23.760 --> 26:27.286 and we will get better. Thank you, and I'll turn 26:27.318 --> 26:30.702 things back over to Jason for some final words. Thank you, 26:30.726 --> 26:34.006 Tony and Randy. (item:32:CenterPoint's CEO Jason Wells gives commitment to strengthen their system & best serve the community) Commissioners, you have my commitment 26:34.038 --> 26:38.390 that our leadership team will work urgently to strengthen our system and 26:38.430 --> 26:41.530 best serve the community we love and are proud to call our home. 26:42.070 --> 26:46.182 As shown on Slide 13, we will be taking these messages from here to our 26:46.206 --> 26:50.290 communities to engage with them on ways we will improve our service moving forward. 26:50.920 --> 26:54.168 We have already started the small group listening sessions and 26:54.184 --> 26:57.784 I look forward to personally being involved in more of these and other 26:57.832 --> 27:01.112 activities over the next few months. Thank you for your 27:01.136 --> 27:04.768 time today and we will update you on the status of our initial action plan 27:04.824 --> 27:08.048 every month and provide a copy of the independent after action 27:08.104 --> 27:11.808 review before the end of October. We're happy to answer any questions you 27:11.824 --> 27:15.048 may have about this material, about our plan to create the most resilient 27:15.104 --> 27:19.452 coastal grid in the country. Thank you all for being here. 27:19.636 --> 27:22.480 Commissioner Glotfelty, I know you had questions on resiliency. 27:23.100 --> 27:27.220 (item:7:Commissioner Glotfelty's thoughts on recalling CenterPoint's Resiliency Plan)Yeah. So I wanted to say something about Docket No. 7, 27:27.260 --> 27:30.532 the resiliency plan. And that is, I was prepared 27:30.556 --> 27:34.116 today to propose that we call recall the CenterPoint Resiliency 27:34.148 --> 27:36.600 Plan from SOAH and hear it at the Commission. 27:38.540 --> 27:42.268 Because of this storm and because of the urgency of the 27:42.324 --> 27:45.842 issue with which we face 27:45.906 --> 27:49.194 here, I feel like the focus of the 27:49.282 --> 27:52.586 resiliency measures. The specific projects contained in the resiliency 27:52.618 --> 27:56.018 plan should be looked at by us very specifically and very 27:56.074 --> 27:59.482 clearly. We must be able to satisfy the timelines of the 27:59.506 --> 28:03.602 Governor and the state leadership to ensure that this resiliency plan 28:03.666 --> 28:07.482 is correct and achieves the goal that they have set out and we 28:07.506 --> 28:10.910 have set out for this territory. 28:12.150 --> 28:16.094 I understand that there's a request from parties to continue 28:16.222 --> 28:18.930 negotiations on this to come to a settlement. 28:19.230 --> 28:22.094 And instead of asking for us to recall that today, 28:22.182 --> 28:25.462 I would suggest that we let them play out and see what we get from 28:25.486 --> 28:29.014 a settlement. I know Mr. Chairman, you as, you said at the last meeting 28:29.062 --> 28:32.638 settlements are good. Let's see if we can find a 28:32.654 --> 28:36.198 settlement here. I want to ensure that we have 28:36.214 --> 28:39.700 the right, as in the law, to modify any plan that's presented to 28:39.740 --> 28:43.212 us. Even if there's a settlement, we must be 28:43.236 --> 28:46.924 willing to bring this back to the Commission to get deeper into the specifics 28:47.012 --> 28:50.572 of how we will ensure resiliency on the CenterPoint system and all 28:50.596 --> 28:53.924 of the systems and all of the resiliency plans to ensure 28:53.972 --> 28:57.292 that the goals of our Legislature and our reliability are set. 28:57.356 --> 29:01.092 So let's let it go forward, let it see 29:01.116 --> 29:05.330 how it comes back to us. But we should be very diligent 29:05.410 --> 29:08.938 about taking these on ourselves as a Commission and hearing the hearings 29:08.994 --> 29:12.562 here as opposed to SOAH. (item:7:Chairman Gleeson to Jason Ryan concerning abatement) I completely agree with 29:12.586 --> 29:15.850 you. Before the request to abate came, 29:15.930 --> 29:19.682 I had a similar sentiment that we probably need to bring this here so we 29:19.706 --> 29:22.830 could hear the case and preside over it. 29:23.530 --> 29:27.466 One question I have, I assume part of the request for abatement is also will 29:27.498 --> 29:31.316 you all be amending the provisions that are 29:31.348 --> 29:34.836 in the resiliency plan that you filed? That's correct. 29:35.028 --> 29:38.540 So what is the thought process behind asking to abate 29:38.580 --> 29:42.260 it, rather than just withdraw it and come up with a new 29:42.420 --> 29:44.760 plan and submitting something new? 29:46.300 --> 29:50.180 So we're certainly open to either. I think as we have discussions 29:50.220 --> 29:53.812 with parties over the next couple of days, let us land on 29:53.836 --> 29:57.034 an agreed path with the parties. I think obviously there are going to 29:57.042 --> 30:00.466 be learnings from our after action. There can be 30:00.658 --> 30:04.306 information and learnings coming out of your own report that 30:04.378 --> 30:07.642 we should incorporate in that, and so we'll work with the 30:07.666 --> 30:11.450 parties. Maybe there are some things that should move forward immediately, 30:11.530 --> 30:15.990 and we can reach an agreement on that and maybe file an amended 30:16.530 --> 30:20.216 plan for the things that maybe should be informed by the work that 30:20.298 --> 30:23.716 our independent assessment is going to show, and that your assessment will show, 30:23.748 --> 30:28.468 too. Okay. (item:7:Commissioner Cobos' thoughts on recalling CenterPoint's Resiliency Plan) So, if you will. So I 30:28.484 --> 30:33.000 came in sort of thinking that the company should withdraw their application and 30:33.540 --> 30:37.556 wait to hear feedback from the Commission, from the Texas Legislature, from your independent 30:37.588 --> 30:41.372 consultant, so that your resiliency plan is robust 30:41.436 --> 30:44.640 based on lessons learned from the Beryl. 30:45.140 --> 30:48.580 And the reason that I believe that it's important to do that is 30:48.620 --> 30:52.200 because you know under your CCN, you have an obligation to serve. 30:52.360 --> 30:55.080 You have an obligation to provide continuous and adequate service. 30:55.240 --> 30:58.568 Getting a resiliency plan approved does not stop you from doing what you should be 30:58.584 --> 31:02.464 doing already to maintain continuous and adequate service for your customers 31:02.512 --> 31:05.592 in your service territory. So in my opinion, 31:05.736 --> 31:09.260 you can move forward with the actions you're already taking, and you list it out 31:09.720 --> 31:13.328 to provide enhanced resiliency for your service territory and 31:13.424 --> 31:17.450 come back and refile a a more robust resiliency plan 31:17.490 --> 31:20.910 that takes into consideration all of the feedback from 31:21.530 --> 31:25.138 the Commission, the Legislature, and your independent consultant. That's my opinion. 31:25.274 --> 31:28.858 I think if we move forward right now, we're not doing a 31:28.874 --> 31:32.150 service to what all the information, 31:32.610 --> 31:35.378 all the work that we're doing, we're going to be doing at the commission through 31:35.394 --> 31:38.706 the investigation, the feedback from the Legislature. You just 31:38.738 --> 31:42.182 hired an independent consultant. We want to make sure we get this right. 31:42.306 --> 31:47.614 But at the same time, you move forward with your resiliency measures and immediately, 31:47.782 --> 31:51.646 and ultimately, when you do file a resiliency 31:51.678 --> 31:55.610 plan, then I'm open to the commission hearing the hearing. But at this time, 31:57.230 --> 32:00.966 I don't see that it provides us any real benefit other than 32:01.158 --> 32:04.910 not taking all the information that we'll get in the coming months into 32:04.950 --> 32:06.770 account when we consider your plan. 32:11.000 --> 32:14.900 Any other questions on the resiliency plan aspect of this? 32:15.800 --> 32:18.328 (item:7:Chairman Gleeson to Jason Ryan on abatement timeline) So I think in your request for abatement, one of the things you put in 32:18.344 --> 32:21.100 there was you provide an update in October. 32:23.240 --> 32:26.688 I'd submit that October may be too long for an 32:26.704 --> 32:30.232 update. If the abatement moves forward and you don't withdraw, I think 32:30.336 --> 32:32.942 probably need to communicate a little more frequently than that. 32:33.136 --> 32:36.978 Leave that out there as some food for thought. Yes, sir. We appreciate 32:37.034 --> 32:40.722 the feedback. We will work with parties over 32:40.746 --> 32:43.990 the next couple of days and provide an update next week. 32:44.730 --> 32:48.810 I completely agree with the assessments that we need to see amendments 32:48.850 --> 32:52.058 to this plan based on our independent review and based on 32:52.074 --> 32:55.258 y'all's review as well. So message heard on that. 32:55.354 --> 32:58.738 We'll update you next week. Okay, thank you. Commissioners, any general 32:58.794 --> 33:00.700 questions about Beryl? 33:01.600 --> 33:04.808 Thoughts, maybe? (item:7:Commissioner Cobos general thoughts on Hurricane Beryl response) So, 33:04.944 --> 33:08.088 you know, I think it's great that y'all came with a bunch 33:08.104 --> 33:10.976 of information is what you're going to do next. A lot of what I heard 33:11.008 --> 33:14.104 seems like things y'all should have already been doing, right? I mean, you know, 33:14.192 --> 33:17.992 you're the second largest utility in the state, operating in multiple states, 33:18.136 --> 33:21.392 have a lot of experience with hurricanes. These are all things that I think, 33:21.456 --> 33:23.872 you know, some of the things that I heard today are things that the company 33:23.936 --> 33:26.898 should have already been thinking about and doing. You know, as you know, 33:26.914 --> 33:30.470 I went down to Houston and towards some of the aftermath 33:30.810 --> 33:34.390 and it was devastating. Right. And y'all know, y'all were firsthand there. 33:35.490 --> 33:38.930 So, you know, the processes and procedures that 33:38.970 --> 33:42.410 are laid out in the presentation, they're great to hear. But ultimately, 33:42.490 --> 33:45.418 at the end of the day, I think that your performance will be judged by 33:45.434 --> 33:49.162 your actions and the results from those actions. And, you know, 33:49.226 --> 33:53.070 accountability is very important. I think that y'all have all experienced express the desire 33:53.110 --> 33:56.302 to be held accountable and to take the actions and to 33:56.326 --> 33:59.934 start building and regaining trust with your community, with state and local 33:59.982 --> 34:03.918 leaders, the Commission. So I appreciate all of 34:03.934 --> 34:07.230 that. But at the end of the day, actions speak louder than words. 34:07.310 --> 34:10.542 So we need to get through the hurricane season and that's what needs to 34:10.565 --> 34:14.118 happen, and these actions need to be taken. And we hope that 34:14.134 --> 34:17.277 you do. But I think in general Chairman, if you will. 34:17.333 --> 34:22.217 I think, you know, CenterPoint is here before us today. But there 34:22.234 --> 34:26.018 are utilities in hurricane prone areas that 34:26.114 --> 34:30.242 I think should, should be taking some of these lessons that CenterPoint 34:30.266 --> 34:33.786 has laid out today into account as well. You know, and everybody, 34:33.858 --> 34:37.210 you know, all these utilities in this hurricane prone area should be thinking about 34:37.370 --> 34:41.389 what are they doing right now to prepare for the next hurricane and storm? 34:41.850 --> 34:45.330 What process and procedures work to prepare for Beryl? 34:45.790 --> 34:48.942 What can they do that they didn't do to prepare for Beryl to be 34:48.966 --> 34:51.170 better prepared for the next storm and hurricane? 34:52.190 --> 34:56.254 What are you doing to accelerate and adequately fund vegetation 34:56.302 --> 34:59.886 management and what is the status of 34:59.998 --> 35:04.262 that post barrel in your service territories and 35:04.446 --> 35:08.170 ensuring you have the appropriate manpower and funding to get that done? 35:09.150 --> 35:12.090 What are you doing to accelerate distribution, pole replacement? 35:12.850 --> 35:16.310 And if you have transmission lines that were impacted, I know you all didn't. 35:16.610 --> 35:19.874 What are you doing to ensure that the transmission lines 35:19.962 --> 35:23.402 are hardened and able to withstand the next 35:23.426 --> 35:26.930 storm or hurricane? What are you doing to proactively plan for pre 35:26.970 --> 35:31.258 staging and deployment of mutual assistance crews? What measures can be taken 35:31.434 --> 35:34.946 to restore more power, to restore power more quickly? 35:34.978 --> 35:38.568 From a manpower standpoint, if you lease mobile generation units, 35:38.634 --> 35:42.020 what are you doing to optimize the use of those existing mobile generation units? 35:42.140 --> 35:46.292 They're units that the Commission authorized 35:46.396 --> 35:48.920 and the utilities are earning a rate of return. So 35:49.260 --> 35:54.652 I mean, we approved at least CenterPoint's based on the notion that CenterPoint 35:54.676 --> 35:58.508 is in hurricane prone area, and these units would help with restoration of 35:58.524 --> 36:02.484 power. And so we 36:02.532 --> 36:06.132 need for the utilities that own the mobile generation units to develop a plan to 36:06.156 --> 36:09.948 optimize the use of the units and take lessons learned. 36:10.044 --> 36:13.000 If they're too big, get smaller ones. I mean, 36:13.980 --> 36:17.960 make sure you have the right sizes to address your critical care facilities and other 36:18.420 --> 36:21.836 customers that are critical, including water utilities and districts. 36:21.988 --> 36:25.588 What are you doing to ensure that your outage trackers are working 24/7 36:25.764 --> 36:28.876 CenterPoint's gone to a cloud based system. I think that's 36:28.908 --> 36:32.156 great. You know, you need redundancy. You need the ability to stay still, 36:32.228 --> 36:35.468 continue to have access to that outage tracker if the Internet goes down. I know 36:35.524 --> 36:38.860 during the storm, Xfinity and Spectrum went down. 36:38.900 --> 36:42.080 So what can you do to ensure that your outage tracker continues to work? 36:42.420 --> 36:45.748 What are you doing to ensure you communicate with your customers and the 36:45.764 --> 36:48.908 public prior to, during and after the storm? Because as you 36:48.924 --> 36:52.196 noted, only 42% of your customers are signed 36:52.228 --> 36:55.444 up to be on your power alert service. So what are you 36:55.452 --> 36:59.108 doing to get the word out? And you. Not every customer has the 36:59.124 --> 37:02.972 ability to sign up for the power service. And so how 37:02.996 --> 37:06.700 do you communicate to them? The daily press calls. 37:06.740 --> 37:10.516 The daily calls. Information to push out in multiple language, 37:10.708 --> 37:14.268 I think is really important. English, Spanish, and whatever other predominant languages 37:14.324 --> 37:18.828 in your service territory. And what 37:18.844 --> 37:22.404 are you doing to increase your emergency response? And so 37:22.492 --> 37:25.958 CenterPoint laid out steps that they're taking and implementing through a 37:25.974 --> 37:29.110 plan. I think that's important for all utilities in hurricane prone 37:29.150 --> 37:33.030 areas. What are you doing to ensure you communicate with water utilities and districts 37:33.150 --> 37:36.422 during a power outage? And, you know, 37:36.486 --> 37:39.838 ensuring that you understand what their needs are. If they 37:39.854 --> 37:42.966 have backup power, they don't have backup power, etcetera. 37:43.158 --> 37:46.710 If you're a utility in ERCOT like CenterPoint, what are you doing to ensure 37:46.750 --> 37:50.170 you communicate with your reps in your service territory to get customer information? 37:51.040 --> 37:54.768 And duly noted on the suggested change on the rule language, that's something for 37:54.784 --> 37:57.976 us to take into consideration as you don't have a direct relationship with 37:58.008 --> 38:02.020 customers. In the meantime, what can you do to coordinate 38:02.320 --> 38:06.152 with reps to get that customer information? And so all of these, 38:06.216 --> 38:09.632 all of these measures that I've laid out today 38:09.736 --> 38:13.392 are not just important for CenterPoint, they're important for all of the electric utilities that 38:13.416 --> 38:17.042 serve customers in hurricane prone areas. And maybe 38:17.066 --> 38:20.690 there's an opportunity as CenterPoint moves forward with lessons learned and 38:20.810 --> 38:24.322 implementing best practices and procedures for these utilities 38:24.386 --> 38:28.354 to engage in sort of a collaborative group to learn from each other 38:28.522 --> 38:32.498 and prepare. I mean, if you did well during this 38:32.514 --> 38:36.562 hurricane, that doesn't mean you'll do well the next hurricane. And so what 38:36.586 --> 38:39.314 can you learn from each other? To be better prepared in the future is going 38:39.322 --> 38:42.920 to be critically important as we move forward to get through this hurricane season 38:43.260 --> 38:46.844 and for the future. So that's my general 38:46.892 --> 38:51.160 comments. Thank you. 38:52.340 --> 38:56.316 (item:7:Commissioner Jackson's thoughts on Hurricane Beryl response and infrastructure) I'd just like to speak to the process, and I guess from my background and 38:56.348 --> 39:00.252 management of risk, I kind of see it as 39:00.396 --> 39:03.684 kind of twofold. One is, you know, 39:03.732 --> 39:07.200 shoring up that infrastructure, hardening so 39:07.240 --> 39:12.000 that in the event of an incident, the infrastructure 39:12.080 --> 39:15.176 is strong so that it could sustain the event. 39:15.248 --> 39:18.100 So that's one aspect of management of risk. 39:18.680 --> 39:21.968 The other is that, you know, we don't know what's going to 39:21.984 --> 39:25.152 come at us, whether it's a tornado or a hurricane or some 39:25.176 --> 39:28.800 other type of event, but we also need to be prepared 39:28.840 --> 39:31.660 to respond and recover quickly. 39:32.130 --> 39:35.310 And so oftentimes after an event, 39:35.890 --> 39:39.554 one of the things that an entity will take responsibility for 39:39.642 --> 39:43.866 themselves. And I noticed that you are doing an independent 39:43.978 --> 39:48.010 review. And although there's not a scope provided of 39:48.050 --> 39:51.194 the folks who are actually going to do the review, it talks about some of 39:51.202 --> 39:54.938 the work that they did in other areas and that they 39:54.994 --> 39:58.350 focused on evaluating the root causes 39:58.850 --> 40:01.510 of the outage, response delays, 40:02.050 --> 40:05.178 and really kind of did that at 40:05.194 --> 40:09.218 the front end of the investigation. And so I 40:09.234 --> 40:13.330 guess my expectation would be that you would take ownership 40:13.450 --> 40:17.550 of that, recognizing that, yes, it's important that we get input from 40:17.850 --> 40:21.322 customers, that we meet their expectation, that we meet public expectation, 40:21.386 --> 40:24.810 but also expect that there be, there would be an expectation 40:24.890 --> 40:28.666 from the utility that 40:28.858 --> 40:33.042 you would want to define and understand the 40:33.066 --> 40:36.506 root causes, whether they are a need 40:36.538 --> 40:40.602 to better harden your infrastructure from a physical standpoint or if 40:40.626 --> 40:43.858 there are things that can be done in order to better, 40:43.914 --> 40:48.642 to be able to better respond quickly. And oftentimes 40:48.666 --> 40:52.816 at kind of the front end of that root cause analysis is 40:53.008 --> 40:56.984 looking at the system and asking that question, you know, how well 40:57.152 --> 41:00.328 am I able to feel like I have a good map, 41:00.384 --> 41:04.216 a good identification of the system? How well are 41:04.248 --> 41:07.696 my it systems able to communicate with themselves 41:07.768 --> 41:11.488 so that we can go out, gather information quickly, 41:11.664 --> 41:13.900 analyze it and triage it, 41:14.800 --> 41:17.944 either. And that benefits you, whether it's on an ongoing 41:17.992 --> 41:21.504 basis or whether it's something that you're doing in response 41:21.552 --> 41:25.048 to an incident like this. And so I guess I 41:25.064 --> 41:29.152 did have a direct question, and that is, do you expect 41:29.216 --> 41:32.656 to do a root cause analysis as part of this independent 41:32.688 --> 41:36.168 review? Yes, ma'am. And then I 41:36.184 --> 41:37.900 guess as a follow up to that, 41:40.600 --> 41:43.056 in terms of the things that you've kind of laid out. And I know that 41:43.088 --> 41:46.672 this is kind of just at the beginning stages, and you're totally focusing on, 41:46.816 --> 41:50.456 you know, the outcome of barrel. But the expectation, I would think, 41:50.488 --> 41:53.472 would be that this would be for the system as a whole, you know, 41:53.496 --> 41:56.872 that going forward as an outcome of this root cause 41:56.896 --> 42:00.864 analysis, it wouldn't just be the part of the distribution system that 42:00.912 --> 42:04.384 is pointed towards Beryl. You would be looking at everything. You would be doing a 42:04.392 --> 42:08.832 very comprehensive review in 42:08.976 --> 42:12.460 kind of like the area of communications. 42:13.210 --> 42:16.754 I know that passive communications is good. 42:16.802 --> 42:18.698 You want to be able to go in and you want to be able to 42:18.714 --> 42:22.114 look at the outage tracker. But I think what we've seen in some other 42:22.162 --> 42:25.450 areas is that you kind of need that one two punch. 42:25.610 --> 42:29.314 You need something that's not just passive, but it's also active that 42:29.362 --> 42:33.538 provides information to the customers. And you 42:33.554 --> 42:37.306 kind of mentioned one of the challenges that you have in terms of getting 42:37.498 --> 42:40.978 directly the information of your customers. And I 42:40.994 --> 42:44.906 think that's something that would very much needs 42:44.938 --> 42:49.154 to be addressed and needs to be resolved. But there's 42:49.202 --> 42:52.482 also additional communication that's ongoing with emergency 42:52.546 --> 42:55.986 management. And so I would suggest 42:56.058 --> 42:59.474 and ask you as kind of a leadership role if 42:59.562 --> 43:03.370 you might be willing to work with emergency management in some 43:03.410 --> 43:07.102 sort of overall comprehensive ring down 43:07.206 --> 43:10.334 emergency alerting system that could be used not 43:10.382 --> 43:14.078 just for power outages, but for other things that might impact 43:14.134 --> 43:17.486 a community. And I think there are other parts of Texas where that has been 43:17.518 --> 43:20.598 done successfully that you could take a look at, 43:20.654 --> 43:23.770 particularly the Southeast Texas Alerting Network. 43:24.230 --> 43:27.598 Which has been in place, you know, for probably, you know, 43:27.614 --> 43:29.010 for over ten years, 43:30.930 --> 43:34.610 having multiple ways of being able to get out information, not only 43:34.650 --> 43:38.234 going directly to your side and looking at the outage tracker, 43:38.322 --> 43:41.762 but also being able to work directly with emergency 43:41.826 --> 43:45.146 management. Because at the end of the day, they are the ones that are 43:45.178 --> 43:48.978 obligated to tell the public what they need to do to be protective of 43:48.994 --> 43:51.750 their own safety. So I think that partnership would be valid. 43:52.610 --> 43:57.846 I would just kind of end with, you know, something that was 43:57.878 --> 44:02.310 put in place and a report that was done after 44:02.390 --> 44:06.614 Hurricane Harvey, and it was done by the Texas 44:06.662 --> 44:10.062 section of the American Society of Civil Engineers, the eye of the 44:10.086 --> 44:14.050 Storm report, and I was always so proud of our Texas section because, 44:14.750 --> 44:18.390 as you know, ASCE does this infrastructure report card. 44:18.550 --> 44:22.246 And yes, they do go out and they grade how well the 44:22.278 --> 44:26.014 infrastructure is in a given state and particularly in Texas. 44:26.142 --> 44:30.022 But they have taken, you know, many measures moving forward to improve 44:30.126 --> 44:33.622 the grade. And I think that's what we expect here is we expect an 44:33.646 --> 44:37.690 improvement in the grade. And one of the quotes 44:38.270 --> 44:41.422 that was in this report, in the eye of the storm 44:41.446 --> 44:45.142 report after Harvey came from Governor Abbott and 44:45.166 --> 44:48.606 he said, we need to future proof Texas. We don't know what's coming at 44:48.638 --> 44:51.586 us, but we need to be for whatever it is. And I think that's my 44:51.618 --> 44:55.426 expectation here, is this needs to be a part of future proofing our 44:55.458 --> 44:59.522 state moving forward. It's not just about barrel. It's about all the things 44:59.586 --> 45:04.410 that impact us. Putting in a very robust system 45:04.490 --> 45:08.130 by which we can not only strengthen and harden the 45:08.170 --> 45:12.106 physical assets, but we can also be prepared from a response standpoint 45:12.138 --> 45:15.898 to be able to utilize technology, utilize partnerships, to be 45:15.914 --> 45:19.030 able to quickly. So it really doesn't 45:19.070 --> 45:22.702 matter what the event is. Texas is prepared and we future 45:22.766 --> 45:26.358 proof start. So thank you for the work that you've done so far, 45:26.454 --> 45:30.262 and I look forward to seeing your updates, and I look forward to seeing the 45:30.286 --> 45:34.038 progress that we're going to be making. (item:7:Jason Wells' response to the Commissioners on CenterPoint incorporating their recommendations) Thank you, Commissioner. We couldn't agree more. 45:34.174 --> 45:38.110 You know, we manage a system that faces numerous natural 45:38.150 --> 45:41.934 hazards, and we have to mitigate and harden our system to 45:41.982 --> 45:45.690 all of those risks, as well as be much better at responding to emergencies 45:45.730 --> 45:49.306 when they occur and communicating throughout. We will conduct a thorough root cause 45:49.338 --> 45:52.950 analysis across the full spectrum of our responsibility, 45:53.490 --> 45:56.590 and we'll incorporate those recommendations. Thank you, 45:57.930 --> 46:01.186 Commissioners. (item:7:Commissioner Hjaltman to Jason Wells concerning CenterPoint's new system and critical infrastructure) Looking at 46:01.218 --> 46:05.082 Tab 20, and it looks like your incident kind of Command 46:05.186 --> 46:08.936 Flow Chart. Is this what the new system 46:08.968 --> 46:12.312 will be looking like? Is that correct? No, Commissioner. 46:12.336 --> 46:15.740 this, this was a system that we implemented last year. 46:17.040 --> 46:20.144 You know, one of the things that I recognized when we stepped in, 46:20.192 --> 46:24.104 when I stepped in the role last year as COO is that we hadn't fully 46:24.232 --> 46:28.304 implemented the National Incident management system incident command structure across 46:28.432 --> 46:32.104 the company. That was an improvement we put in place in 2023. 46:32.192 --> 46:36.258 There is still a lot more work we need to do, which is why we 46:36.354 --> 46:40.210 have initiated and will search for and will hire a 46:40.250 --> 46:44.034 senior executive emergency management professional to continue to accelerate the 46:44.122 --> 46:47.586 adoption of the ICS structure. Okay. And will that include 46:47.698 --> 46:51.714 more point contacts for particular critical 46:51.762 --> 46:55.098 infrastructure or to try to narrow 46:55.154 --> 46:58.906 so, you know, you don't have so many people going different directions? It's going to 46:58.938 --> 47:02.580 one point contact to help eliminate that confusion. Yes, 47:02.620 --> 47:05.892 Commissioner, we know we frustrated our critical facility 47:05.956 --> 47:09.444 partners with chaotic communication 47:09.532 --> 47:12.780 around restoration times, coordination with when they could expect service, 47:12.860 --> 47:16.828 coordination with when, and if we could provide mobile generation 47:16.884 --> 47:21.244 backup, all of that will be immediately streamlined for this hurricane 47:21.292 --> 47:25.148 season, and we will continue to improve on 47:25.204 --> 47:28.030 preparation for future storm seasons. 47:30.970 --> 47:32.910 (item:7:Commissioner Hjaltman to Jason Wells on vegetation) One final question on the vegetation. 47:34.530 --> 47:38.146 Houston is a very different city from most in Texas and has 47:38.178 --> 47:42.210 different rules. Do y'all run into issues with the city 47:42.290 --> 47:45.666 on tree management and then municipalities as well, 47:45.698 --> 47:49.258 and then cities within Houston itself? Is that an issue that needs to 47:49.274 --> 47:52.474 be addressed? I do think it. Thank you for that question, 47:52.522 --> 47:56.480 Commissioner. I do think we do need to look at vegetation management broadly. There's clearly 47:56.520 --> 47:59.660 more we can do. We've proposed more to do here. 48:00.120 --> 48:03.260 We will have more recommendations about what we can do in this process. 48:03.600 --> 48:07.936 But trees, as you know, are personal property of 48:07.968 --> 48:10.832 homeowners, local, state government. 48:11.016 --> 48:14.320 Right. We do not have the ability to trim 48:14.360 --> 48:18.100 trees outside of our right of way. You know, we worked with 48:18.680 --> 48:21.580 one of our largest vegetation management companies. 48:22.760 --> 48:25.944 Their calculation was nearly 60% of 48:25.992 --> 48:29.608 the vegetation they removed were trees or full trees 48:29.784 --> 48:32.992 that had fallen from outside of the right of way. So I do think 48:33.096 --> 48:37.024 the issue of vegetation management is broader and requires 48:37.072 --> 48:40.512 the attention of everybody that will be impacted by 48:40.536 --> 48:43.980 this. (item:7:Chairman Gleeson to Jason Wells on vegetation) Jason, just a quick follow up to that. 48:44.280 --> 48:47.778 But you all do have a program, correct, that if 48:47.794 --> 48:50.122 there are dead trees outside of your right of way that you think could be 48:50.146 --> 48:54.026 hazardous, you go contact that landowner and then work 48:54.058 --> 48:56.634 with them to see if they'll allow you to cut down those trees, correct? 48:56.762 --> 49:00.670 That's correct, Chairman. You know, historically, the utilities 49:01.010 --> 49:04.170 have conducted vegetation management on annual cycles. 49:04.330 --> 49:07.466 I don't think that's reflective of the risk that our system faces. Last year, 49:07.498 --> 49:11.322 we implemented a high hazard tree program and significantly expanded 49:11.346 --> 49:15.052 the scope. It was part of the nearly 30% increase in 49:15.076 --> 49:18.652 vegetation management spend that we initiated last year. 49:18.796 --> 49:22.956 And we are going to use that program and accelerate 49:22.988 --> 49:27.116 it as we reduce this risk going forward. But we have to work with landowners 49:27.228 --> 49:30.900 and get their consent on those trees. Yeah. You know, when I went out 49:31.060 --> 49:34.640 with Jason to, I think we were in Bellaire. 49:35.180 --> 49:38.984 I was actually somewhat shocked to see that there was maybe 49:39.032 --> 49:42.120 18 inches of span between a distribution line 49:42.200 --> 49:46.056 on either side and these 25 foot trees and 49:46.088 --> 49:49.664 hedges everywhere. And so I think that's good to expand that because I think you 49:49.672 --> 49:53.320 have an opportunity here, you know, coming off of an event like this where landowners 49:53.360 --> 49:57.088 will probably be more willing in response to this event to work with you to 49:57.184 --> 50:00.472 take down those trees. Yes, sir. Commissioner Glotfelty? 50:00.616 --> 50:02.780 (item:7:Commissioner Glotfelty to Jason Wells concerning vegetation management) Yeah, I have a bunch of questions here. 50:05.090 --> 50:08.834 I'll follow up on vegetation management. My issue 50:08.882 --> 50:12.706 that I've espoused 50:12.738 --> 50:16.070 on since I became a Commissioner, the first rate case 50:16.610 --> 50:21.938 was SWEPCO, and they got 50:21.994 --> 50:25.030 dinged by me because of the vegetation management practices. 50:25.850 --> 50:29.418 I think the mindset of vegetation 50:29.474 --> 50:32.780 management has to be we use every technology, 50:34.000 --> 50:37.824 we find every crew that we can and that 50:37.872 --> 50:41.432 we don't skimp on this. I know that there's an 50:41.456 --> 50:45.080 issue between capital costs and o and m costs, 50:45.160 --> 50:48.424 and it always impacts vegetation management. 50:48.592 --> 50:52.296 But I'd like you all to become a leader in 50:52.328 --> 50:55.368 this. You all do have a very compact 50:55.424 --> 50:58.034 territory and you can lead. 50:58.202 --> 51:01.634 So I hope you all take technologies, I hope you become 51:01.682 --> 51:05.418 a leader in this and show the rest of the country the best 51:05.474 --> 51:08.618 practices on this. There are a lot of them there, and you all can implement 51:08.674 --> 51:12.050 them. And then tell us that because you can not only lead 51:12.130 --> 51:16.274 for your service territory, you can be the leader and show every other utility and 51:16.322 --> 51:19.562 every other co op and every other muni in this state how 51:19.626 --> 51:23.270 best to be, how to be the best vegetation management company 51:23.450 --> 51:27.654 in the state. And with that comes a challenge, 51:27.702 --> 51:31.566 which is vegetation management crews are not easy to 51:31.598 --> 51:34.686 get. I understand that. So I would 51:34.718 --> 51:38.982 ask that you all look at is it economic to bring some more in house 51:39.086 --> 51:42.942 and have them be part of your system, of your team so 51:42.966 --> 51:46.206 that you're not just hiring out crews? And I would say the 51:46.238 --> 51:49.504 same with linemena. If you look around, 51:49.552 --> 51:52.660 if you drive around Houston, as I know you all do, I do. 51:53.840 --> 51:58.800 I see more contractor trucks than I see Centerpoint 51:58.840 --> 52:03.144 trucks. And I know historically there has been a long term 52:03.312 --> 52:07.408 reason for that, and that is to share costs between utilities when 52:07.464 --> 52:10.744 these crews are not being used on your system. 52:10.832 --> 52:14.260 So in other words, another company can pick up some of those costs. 52:15.090 --> 52:18.990 It's my belief that many of your contractors have 52:20.930 --> 52:24.670 their employees on your system 365 days a year. 52:25.770 --> 52:29.210 And that ought to be an area where you all look at bringing those in 52:29.250 --> 52:33.322 house so you have control over them and 52:33.346 --> 52:36.830 we have oversight over them. Otherwise, it's just another contract. 52:37.490 --> 52:41.910 That's the way I see it. So I know you all have big contractors there, 52:42.310 --> 52:45.526 but I think you should look to bring some of those in house if it's 52:45.558 --> 52:49.086 economic to do so, you all should bring them in house so they're directly under 52:49.118 --> 52:52.526 your control. Thank you, Commissioner. We hear 52:52.558 --> 52:59.246 the charge and intend to rise to the occasion with 52:59.278 --> 53:03.222 respect to vegetation management. It offers no relief to our customers who 53:03.246 --> 53:06.250 experience the anger and frustration with Hurricane Beryl, 53:06.550 --> 53:10.298 we recognize the need to move move from annual cycles to more targeted 53:10.394 --> 53:13.150 technology based tree trimming. 53:14.050 --> 53:18.130 We had implemented a predictive modeling system using 53:18.170 --> 53:23.058 the latest technology with lidar weather 53:23.114 --> 53:27.658 stations at a granular level that track ground 53:27.714 --> 53:30.666 saturation, rainfall levels, 53:30.698 --> 53:34.420 canopy growth to target trees of highest risk. 53:35.240 --> 53:39.096 Unfortunately, that system is available after hurricane 53:39.128 --> 53:43.112 Beryl passed through, but that system will be utilized 53:43.256 --> 53:46.320 to inform the vegetation that we've outlined in our commitments today, 53:46.440 --> 53:50.016 as well as our vegetation moving forward. And we continue to intend 53:50.048 --> 53:53.176 to learn from others with respect to 53:53.288 --> 53:56.740 bringing vegetation and line crews in house. 53:57.320 --> 54:01.168 We are actively working that process a little over three 54:01.224 --> 54:05.548 years ago when I joined the company. We recognize the need to significantly 54:05.644 --> 54:09.052 increase our level of investment in our Houston electric system. 54:09.236 --> 54:12.920 We nearly doubled our capital investment overnight. 54:13.500 --> 54:16.796 The only way that we could conduct that work efficiently at that time 54:16.868 --> 54:20.356 was to utilize the support of outside contractors. 54:20.508 --> 54:23.804 As we look forward and see the need for 54:23.892 --> 54:27.092 continued investment well into the future, it is time 54:27.196 --> 54:30.432 to look at bringing more of those resources in house. And so we will come 54:30.456 --> 54:33.940 back to you with a specific recommendation on that front. 54:34.640 --> 54:38.616 Thank you. Thank you for the commitment on vegetation management 54:38.688 --> 54:41.832 as well. I know there are new technologies out there that you all 54:41.856 --> 54:45.376 are using. It's also important to be the 54:45.408 --> 54:48.888 best user of the best technology. So I believe that you 54:48.904 --> 54:50.060 all have that commitment. 54:53.080 --> 54:56.424 (item:7:Commissioner Glotfelty to Jason Wells concerning smart meters) You all have, you all 54:56.472 --> 55:00.160 spent a few hundred million dollars a couple years ago, a decade ago, 55:00.200 --> 55:03.480 on smart meters. Were they any value in this 55:03.560 --> 55:07.160 hurricane? I mean, I continue to hear that people say the outage 55:07.200 --> 55:10.100 tracker was out. I had no clue when it was coming back on. 55:11.280 --> 55:14.728 Wasn't the plan for smart meters many 55:14.784 --> 55:18.504 years ago that you could help track outages and help provide information 55:18.592 --> 55:21.820 to customers? And was that a total failure? 55:23.870 --> 55:27.478 Commissioner, the smart meters were useful in our restoration efforts. 55:27.574 --> 55:31.170 However, they were not useful to our customers, and for that, I apologize. 55:32.870 --> 55:36.654 As Tony outlined, we experienced 55:36.742 --> 55:40.718 significant demand on our outage tracker during 55:40.734 --> 55:43.250 the de Racho restoration response, 55:44.150 --> 55:47.442 demand that our own internal servers couldn't handle. 55:47.566 --> 55:50.674 We committed to bringing cloud based outage tracker 55:50.722 --> 55:54.466 online by August 1, which has historically been the 55:54.498 --> 55:58.386 start of hurricane season. And that two month implementation 55:58.498 --> 56:01.786 is faster than what has happened in the industry previously. 56:01.858 --> 56:04.786 That's why we can make the commitment sitting in front of all of you today 56:04.858 --> 56:08.242 that we will have an outage tracker on August 1. When we do have 56:08.266 --> 56:12.430 that outage tracker, the meters will provide benefit. 56:13.020 --> 56:16.440 In the interim. We knew our customers needed some form of information 56:16.980 --> 56:20.972 as we were building this new outage tracker, and we used maps that 56:20.996 --> 56:24.916 were more tied to the circuit level. That created frustration 56:25.068 --> 56:28.788 at the address or meter level. 56:28.924 --> 56:32.116 And that was a reflection of this period of 56:32.148 --> 56:35.844 time between when we had to take down our old outage tracker before we 56:35.852 --> 56:39.210 can bring our new outage tracker up. As I said, at this start of August. 56:40.910 --> 56:44.530 (item:7:Commissioner Glotfelty to Jason Wells on outage trackers) Yeah, I think we saw a lot of online folks say, 56:44.990 --> 56:48.086 your outage tractor says, tracker says, my house is 56:48.118 --> 56:51.510 online and I'm not. And the nesting problem there, 56:51.550 --> 56:55.390 as you all call it, I hope that gets fixed in this 56:55.510 --> 57:00.462 outage tracker. The other thing is, so in 57:00.526 --> 57:04.142 this new world of technology, I can't 57:04.166 --> 57:08.044 help but think about things like ways, 57:08.172 --> 57:11.412 ways for traffic and accidents. Everybody that's a 57:11.436 --> 57:15.012 crowdsourced tool that everybody can input information 57:15.116 --> 57:18.884 in. And if there's a technology like that that can 57:18.932 --> 57:22.708 help you all figure out, you all have to do the assessments before you 57:22.724 --> 57:26.172 can send crews out. But if you could crowdsource that and 57:26.196 --> 57:29.532 get the customers who have 57:29.556 --> 57:33.000 the meters to help you do that, it might speed up the process. 57:33.310 --> 57:36.670 I'm thinking differently here. I don't know if that works or not. 57:36.790 --> 57:40.966 But the fact is, you know, for you all to walk 8000 57:41.038 --> 57:45.942 miles of distribution lines is hard and 57:46.126 --> 57:49.654 it delays some of the restoration. 57:49.742 --> 57:53.190 Not all of it, but some of it. And if there was a better way 57:53.230 --> 57:57.078 to use the community in that process, it might be kind 57:57.094 --> 58:00.320 of a leading edge technology that you can show the world. 58:00.780 --> 58:04.360 Yes, Commissioner. We hear the charge and fully agree. 58:04.660 --> 58:08.572 We've begun to use aerial resources, whether they 58:08.596 --> 58:12.044 are helicopter or drone. We are, 58:12.132 --> 58:15.956 as we think forward to our customer platforms, looking at 58:16.068 --> 58:19.524 ways for customers to report and send photos of damage 58:19.612 --> 58:23.684 so that we can prioritize lines down and other 58:23.852 --> 58:27.054 safety related items that come up in, in a restoration 58:27.102 --> 58:30.422 response. And so we will be opening the aperture as wide 58:30.446 --> 58:33.758 as possible to bring the latest technology to bear to accelerate restorations 58:33.814 --> 58:37.670 moving forward. Great. Thank you. (item:7:Commissioner Glotfelty to Jason Wells concerning mutual assistance and prestaging of crews) I wanted to 58:37.830 --> 58:44.110 shift topics here a little bit to mutual 58:44.150 --> 58:47.646 assistance and pre staging of crews. 58:47.758 --> 58:51.406 I think there's, you know, I've said this 58:51.558 --> 58:55.232 to y'all individually, that there are a lot of things that 58:55.256 --> 58:57.940 went wrong here and a lot of things that you all need to fix. 58:58.800 --> 59:02.380 I don't think that you all were 100% wrong. I think there are some things 59:03.480 --> 59:09.008 that were done to industry standard and that would 59:09.024 --> 59:12.192 be challenges for every utility in every community in a 59:12.216 --> 59:16.016 situation like this, the pre staging of 59:16.048 --> 59:19.792 crews and mutual assistance. So it's my understanding that 59:19.816 --> 59:23.496 mutual assistance is you 59:23.528 --> 59:27.040 have to call a regional mutual assistance group, 59:27.120 --> 59:31.376 which everyone's a member of, and request crews and 59:31.408 --> 59:34.696 they make a determination as to whether the storm 59:34.728 --> 59:38.640 is actually going to happen in your territory and that they release them off 59:38.680 --> 59:42.280 their system. So if that's 59:42.320 --> 59:46.216 correct, there are there a lot of variables that are not in your control when 59:46.248 --> 59:48.800 you try to recover crews for mutual assistance? 59:49.900 --> 59:53.836 Commissioner, there is competition for resources, but one of the great hallmarks 59:53.868 --> 59:55.920 of this industry is the cooperation. 59:57.140 --> 01:00:00.740 You know, as Randy had mentioned, we were coordinating 01:00:00.780 --> 01:00:04.396 with our Texas Gulf coast peers pre staging 01:00:04.428 --> 01:00:07.876 nearly 15,000 mutual assistance crews along the Gulf coast. 01:00:07.988 --> 01:00:11.316 There is variability to a path of a storm. It is 01:00:11.348 --> 01:00:14.920 important to pre stage crews out of harmony, harm's way so they're not negatively 01:00:14.960 --> 01:00:19.144 impacted. And that coordination 01:00:19.272 --> 01:00:23.704 continues all the way up until landfall, which is why we can redirect 01:00:23.872 --> 01:00:27.272 to where they're most needed very efficiently. Now, that's not to say 01:00:27.296 --> 01:00:30.672 that there's room for improvement and that will be a focus of 01:00:30.696 --> 01:00:34.528 ours, but the coordination is widespread so that 01:00:34.624 --> 01:00:37.900 the industry can respond to where it's needed most. 01:00:38.970 --> 01:00:42.522 But isn't it right that you have to request those crews and they 01:00:42.546 --> 01:00:46.098 have to be released from the utility that they're working on in 01:00:46.114 --> 01:00:49.490 order to help you respond? That is a correct 01:00:49.530 --> 01:00:52.354 statement, but I will say at the same time, 01:00:52.522 --> 01:00:55.954 not only are we in coordination with the regional mutual 01:00:56.002 --> 01:01:00.230 assistance providers, I was in close coordination with the national EEI 01:01:00.570 --> 01:01:04.194 mutual assistance team as well. And there 01:01:04.242 --> 01:01:07.456 is a procedure to releasing those crews, 01:01:07.528 --> 01:01:10.740 but there is also means in which we can 01:01:11.280 --> 01:01:15.104 request and get additional crews 01:01:15.192 --> 01:01:16.740 to help with the restoration process. 01:01:18.320 --> 01:01:22.192 Randy, did you want to add something? (item:7:Randy Pryor's response to Commissioner Glotfelty's question requesting of resources & prestaging of crews) Well, I was just going to 01:01:22.376 --> 01:01:25.180 confirm exactly what Jason just conveyed. 01:01:26.880 --> 01:01:29.984 The requesting utility, in this case us 01:01:30.152 --> 01:01:34.162 CenterPoint, did make our request for the resource and then 01:01:34.266 --> 01:01:38.314 the providing. Utilities do have to make decisions 01:01:38.362 --> 01:01:42.498 based on potential weather threats that they're seeing either currently or 01:01:42.554 --> 01:01:45.482 forecasted to see in the next few days. Right. 01:01:45.586 --> 01:01:49.506 To be able to provide that availability and then there's a matching 01:01:49.698 --> 01:01:53.426 that's provided there. And then, of course, outside of our rmags, 01:01:53.458 --> 01:01:57.442 we do have other agreements with utility providers to secure resources that 01:01:57.466 --> 01:02:00.170 we did do as well in advance of this event. 01:02:01.510 --> 01:02:05.038 And am I right to say that there is competition for crews when you have 01:02:05.054 --> 01:02:08.534 a storm such as this? Yeah, I would say early on in the pre 01:02:08.582 --> 01:02:11.974 staging. Right. I mean, because everybody's kind of anticipating, 01:02:12.062 --> 01:02:15.518 you know, what the impacts are going to be and of course, 01:02:15.614 --> 01:02:18.766 you know, everybody's predictive models are, you know, 01:02:18.878 --> 01:02:22.830 have variables. Right. So in the likelihood of any major events, 01:02:22.910 --> 01:02:26.070 you know, those, those impacted utilities, and you just can't 01:02:26.110 --> 01:02:29.854 think of the immediate Gulf coast because these storms do have pass, 01:02:30.022 --> 01:02:33.526 you know, through Texas, through the midwest, et cetera. 01:02:33.638 --> 01:02:37.414 So, you know, that's what folks have to consider when they're considering. 01:02:37.502 --> 01:02:41.662 While there may be devastation along the Gulf Coast, Midwest utilities two 01:02:41.686 --> 01:02:45.446 and three days later are also dealing with tornadic activities from the 01:02:45.478 --> 01:02:48.950 same storm event. So those considerations are made. 01:02:49.110 --> 01:02:52.796 But, you know, getting back to initially, yes, I would 01:02:52.828 --> 01:02:55.548 say typically the resources are there, 01:02:55.604 --> 01:02:58.940 but after the event is 01:02:58.980 --> 01:03:02.452 where we really aggregate based on the impacts, the customers 01:03:02.516 --> 01:03:05.676 impacted and the number of events and then be able to work through 01:03:05.708 --> 01:03:10.160 those resources to be able to allocate to where the most specific needs are. 01:03:10.580 --> 01:03:14.380 And is it true that if you have a crew that drives in from, 01:03:14.540 --> 01:03:17.574 so as I understand, mutual assistance, what you want to do is you get, 01:03:17.622 --> 01:03:20.750 you want to get the closest crews to come help you first. And then, 01:03:20.790 --> 01:03:24.550 so you say 100 miles, you get whatever and then 200 miles and then 500 01:03:24.590 --> 01:03:28.014 miles in 1000 miles. If you get crew, if it's a big enough storm and 01:03:28.022 --> 01:03:31.718 you get crews from 1000 miles and they're driving 12 hours to 01:03:31.734 --> 01:03:33.250 get to Houston, Texas, 01:03:35.230 --> 01:03:38.690 they cannot drive into Houston. Come to your staging yard, 01:03:39.670 --> 01:03:43.636 pick up a ticket and just go out on your system. Is that correct? 01:03:43.828 --> 01:03:47.052 There are rules that require required rest periods if 01:03:47.076 --> 01:03:50.972 that's what you're referencing. So if crews are driving, let's say 1000 01:03:51.036 --> 01:03:54.532 miles, typically that's a two day drive, right? On average it's 01:03:54.556 --> 01:03:58.324 about 500 miles a day. These are large trucks compared 01:03:58.372 --> 01:04:02.480 to smaller vehicles. So on average, the utility 01:04:02.900 --> 01:04:05.932 looks at about 500 miles per day. 01:04:05.996 --> 01:04:10.190 So 1000 miles out, meaning they arrive two days depending 01:04:10.230 --> 01:04:13.406 on that time of day that they arrive. Right. I mean, if they arrive 01:04:13.478 --> 01:04:17.446 in at later in the day after 608:00 01:04:17.518 --> 01:04:20.710 they are required to have, you know, a rest period to be able to start 01:04:20.750 --> 01:04:24.598 the next day. So in that case, we will utilize our onboarding 01:04:24.734 --> 01:04:28.406 and we have brief training, safety orientation 01:04:28.478 --> 01:04:31.750 for those crews to be able to utilize that. And then they require 01:04:31.790 --> 01:04:35.728 their respiratory. And are those rules, OSHA rules? Is that governed by 01:04:35.744 --> 01:04:39.352 the, there are OSHA rules applied to that. So the 01:04:39.376 --> 01:04:42.192 complaint that I've heard is that, you know, we saw a bunch of trucks sitting 01:04:42.216 --> 01:04:45.496 there. We couldn't put them out on the system right away. Some of 01:04:45.528 --> 01:04:49.112 that may be because assessments weren't done yet. 01:04:49.176 --> 01:04:52.296 Some of it may be because of OSHA rules. I mean, there's more 01:04:52.328 --> 01:04:54.020 than just a, 01:04:57.160 --> 01:05:00.180 they're sitting there because, because you don't have anything for them to do. 01:05:01.530 --> 01:05:04.630 (item:7:Jason Wells' response to Commissioner Glotfelty's question on restoration and crews response times) Commissioner, they come to help with restoration. I mean, 01:05:06.050 --> 01:05:11.010 this is what they do. This is what they live to do. And there 01:05:11.050 --> 01:05:13.910 are a variety of reasons why trucks can be parked. 01:05:14.890 --> 01:05:19.762 A specific job site may still require incremental 01:05:19.786 --> 01:05:23.790 vegetation work before it's made safe to begin the construction. 01:05:24.090 --> 01:05:27.920 There are incidences where maybe the construction 01:05:28.260 --> 01:05:31.436 is more profound than what was originally 01:05:31.468 --> 01:05:33.680 assessed and they waiting on materials. 01:05:35.420 --> 01:05:38.692 But these crews get to work as quickly 01:05:38.716 --> 01:05:41.640 and as safely as we can to deploy them on our system. 01:05:42.020 --> 01:05:46.100 They work tirelessly to bring service back 01:05:46.140 --> 01:05:50.700 online for our customers, and they were working hard immediately 01:05:50.740 --> 01:05:53.802 in this storm, which is why I, we were able to restore more than a 01:05:53.826 --> 01:05:57.430 million customers within the first 24 or 48 hours. 01:05:58.690 --> 01:06:00.110 Just have a couple more. 01:06:03.290 --> 01:06:06.666 When you do your storm 01:06:06.698 --> 01:06:10.010 drills, do you have third party evaluators there that give 01:06:10.050 --> 01:06:13.578 you real third party evaluations as 01:06:13.594 --> 01:06:17.034 to how you're doing and what you think? The room for improvement? Or do 01:06:17.042 --> 01:06:20.612 you all just pat each other on the back and say, 01:06:20.716 --> 01:06:24.748 we did good this time? (item:7:Jason Wells' response to Commissioner Glotfelty's question on 3rd party assessments) No, sir. We don't currently utilize 01:06:24.804 --> 01:06:28.680 third parties to assess. We have hired emergency 01:06:29.580 --> 01:06:33.516 management experts to come in and offer best practices, 01:06:33.668 --> 01:06:37.164 help shape the drills, 01:06:37.332 --> 01:06:41.068 provide feedback, but it's not as formal as 01:06:41.084 --> 01:06:44.690 a third party assessment, and that is something we're considering moving forward. 01:06:45.070 --> 01:06:48.486 I was appreciate, I appreciate the team members that 01:06:48.518 --> 01:06:51.822 you brought on board, former FEMA people Manny Miranda 01:06:51.846 --> 01:06:55.550 from Florida Power and light. I think they provide a very, 01:06:55.630 --> 01:06:59.542 very valuable view that can be hopefully incorporated 01:06:59.606 --> 01:07:03.330 quickly to the benefit of the consumers and the company 01:07:03.990 --> 01:07:07.326 so that these things are dealt 01:07:07.358 --> 01:07:10.108 with a little bit better in the future. Yes, 01:07:10.124 --> 01:07:14.140 sir. (item:7:Commissioner Glotfelty to Tony Gardner on communication) I think I have one 01:07:14.180 --> 01:07:21.520 last thing, and that is communications 01:07:22.860 --> 01:07:26.804 was poor. I don't know how else to put it, but I 01:07:26.812 --> 01:07:29.800 think you all know that. I think you all have committed to changing it. 01:07:33.340 --> 01:07:36.612 The fact that you all don't have contact with 01:07:36.636 --> 01:07:44.532 all of the customers, I think, is you 01:07:44.556 --> 01:07:47.240 all have equipment on their premises, 01:07:47.700 --> 01:07:51.620 so they are your customers. And if you don't have the information 01:07:51.700 --> 01:07:55.284 to your customers, then that's your fault. And I know you want 01:07:55.292 --> 01:07:58.940 to change that. And I know as we've restructured this 01:07:58.980 --> 01:08:02.256 industry, most of the contact has gone to the retail electricity 01:08:02.278 --> 01:08:05.708 provider. You all are still the bread and butter of 01:08:05.724 --> 01:08:08.932 Houston, Texas, distributing electricity. So I 01:08:08.956 --> 01:08:14.480 hope you all find the way to become 01:08:18.420 --> 01:08:22.036 critical to your customers. So as a chief customer officer 01:08:22.108 --> 01:08:26.323 and you only know 40% of your customers, that's a challenging 01:08:26.412 --> 01:08:30.502 role to fill. You know the way we've structured the industry. 01:08:30.645 --> 01:08:34.398 Yeah. Absolutely, Commissioner. We make sure 01:08:34.412 --> 01:08:37.270 that we continue to reach out to our customers, trying to get some more contact 01:08:37.350 --> 01:08:40.518 information. We're constantly making sure that we encourage our customers to 01:08:40.533 --> 01:08:43.590 sign up for power services. But we're at the mercy of the market. 01:08:43.670 --> 01:08:47.126 Right. And that's why I'm asking you guys today to help us 01:08:47.158 --> 01:08:50.326 change policy so that we can reach out and get more information 01:08:50.398 --> 01:08:53.814 from our retail electric providers. As you all may very well know, 01:08:53.942 --> 01:08:57.390 we do reach out to them constantly and ask for permission to get 01:08:57.430 --> 01:09:00.518 customer contact information, but we may need a little bit more 01:09:00.533 --> 01:09:03.486 of a push from a policy perspective so that we can contain more of that 01:09:03.518 --> 01:09:06.902 information. And we'll only use it during emergency procedures. 01:09:06.966 --> 01:09:10.478 Right. We won't market things to customers. We won't do anything inappropriate. We just 01:09:10.493 --> 01:09:12.798 want to make sure that we can communicate with our customers and share with them 01:09:12.814 --> 01:09:16.358 the right level of information so that they can take action and respond and 01:09:16.374 --> 01:09:19.689 make sure they can do things to secure their families during strong level events. 01:09:20.279 --> 01:09:21.220 Thank you. 01:09:24.920 --> 01:09:29.928 (item:7:Commissioner Glotfelty to Jason Wells on CenterPoint's system terms of wind speed) I think the one other thing is, I won't get into this, but understanding 01:09:29.984 --> 01:09:33.439 what you design your system to in terms of wind speed, 01:09:33.560 --> 01:09:37.376 things like that, I'd love to hear in the future if it's 01:09:37.448 --> 01:09:40.368 150 miles an hour wind speed, if it's 120 miles an hour, 01:09:40.424 --> 01:09:43.640 and what the difference is, what's the difference in cost, what's the difference in value 01:09:43.680 --> 01:09:47.758 to the consumers? And so I think, as Jason, 01:09:47.814 --> 01:09:51.126 you have said, the canopy grows, we've got a lot of trees. The storm 01:09:51.158 --> 01:09:55.050 was obviously, we were on the dirty side of the storm. This hasn't happened before. 01:09:55.710 --> 01:09:59.334 But understanding that our weather 01:09:59.382 --> 01:10:02.606 is changing, we have to be more diligent 01:10:02.638 --> 01:10:06.078 in that. And I encourage you to reach out to me and 01:10:06.174 --> 01:10:09.690 let me know what you're, how you all are dealing with that piece. 01:10:09.990 --> 01:10:13.488 Commissioner, we proactively took the steps in 01:10:13.504 --> 01:10:17.272 2022 to move to constructing at 01:10:17.296 --> 01:10:20.896 the national standard for high wind and extreme ice 01:10:20.928 --> 01:10:24.656 loading. So new construction does meet those 01:10:24.688 --> 01:10:28.816 new standards moving forward. We can provide the detail around that. And the 01:10:28.848 --> 01:10:32.504 plans that we've put in place with respect to the resiliency investments 01:10:32.592 --> 01:10:36.472 are addressing the historical investments 01:10:36.496 --> 01:10:39.880 we have made in our system prior to making that proactive change. 01:10:41.940 --> 01:10:45.476 (item:7:Commissioner Glotfelty gives his concerns to all providers in hurricane prone zones) I guess I'll close with, I know this storm hurt. 01:10:45.508 --> 01:10:48.948 It hurt a lot of people. I think we had, you know, 01:10:49.084 --> 01:10:51.948 folks died as a result, 01:10:52.004 --> 01:10:55.680 just like in Winter Storm Uri. I think that's, 01:10:56.900 --> 01:11:00.852 it's horrible that it happened. I think this is 01:11:00.876 --> 01:11:03.916 not just a wake up call to Centerpoint. This is a wake up call to 01:11:03.948 --> 01:11:07.532 Entergy. This is a wake up call to TNMP. This is a wake up 01:11:07.556 --> 01:11:12.028 call to TXU. This is a wake up call to every utility 01:11:12.204 --> 01:11:15.560 around our state that they have to take serious. 01:11:16.260 --> 01:11:19.500 The storms that are facing their system, the challenges that are facing their 01:11:19.540 --> 01:11:22.884 systems, whether it be a wildfire that's going to let their customers go out, 01:11:22.972 --> 01:11:26.564 or a big storm, or a de Racho, I don't care what it is, 01:11:26.692 --> 01:11:29.998 you all know your system the best, but you all have to 01:11:30.014 --> 01:11:33.798 do better. The customers deserve better, and we all are giving 01:11:33.854 --> 01:11:37.210 you a return that expects better. 01:11:38.390 --> 01:11:40.958 I know you all can do it, I really do, and I hope you all 01:11:40.974 --> 01:11:43.970 will lead in that regard. You have my commitment. Thank you. 01:11:45.150 --> 01:11:48.558 (item:7:Commissioner Cobos to Jason Wells on CenterPoint's presentation) I have a couple of specific questions that I want to ask. 01:11:48.734 --> 01:11:51.570 So, in your presentation on page 15, 01:11:53.550 --> 01:11:56.990 under the phase two near term actions, 01:11:58.530 --> 01:12:02.226 you lay out that you're going to target the 01:12:02.258 --> 01:12:05.634 first 350 of 2000 incremental distribution 01:12:05.682 --> 01:12:09.510 line miles with higher risk vegetation. 01:12:10.490 --> 01:12:13.350 And on the next page you break out, 01:12:15.530 --> 01:12:19.450 or you state that vegetation management or vegetation is a major driver of long duration 01:12:19.490 --> 01:12:22.956 outages during barrel approximately 2000, or, I'm sorry, 01:12:22.988 --> 01:12:26.932 1900 total distribution circuits. So is 01:12:26.956 --> 01:12:30.508 the 20 1900 total distribution circuits that you've identified, 01:12:30.564 --> 01:12:33.960 those are the higher vegetation, vegetation risk 01:12:34.380 --> 01:12:37.800 circuits? Those are our total circuits on our system. 01:12:38.140 --> 01:12:42.044 What we're targeting is the 2000 miles on 01:12:42.132 --> 01:12:45.644 those circuits that present the highest or highest risk, 01:12:45.772 --> 01:12:49.550 which we've tried to demonstrate 01:12:49.590 --> 01:12:53.430 here on slide 16. This is the new technology I referenced earlier 01:12:53.510 --> 01:12:57.490 with the LIDAR scan that looks at the density of 01:12:58.750 --> 01:13:02.166 vegetation in and around our lines. 01:13:02.318 --> 01:13:05.810 The darker green is the heavier density, 01:13:06.390 --> 01:13:09.662 and also overlay. As I said, there's multiple variables that lead 01:13:09.686 --> 01:13:13.270 to tree failure, and you can see that the three month cumulative 01:13:13.350 --> 01:13:17.238 rainfall in some cases was 400% of historical totals. 01:13:17.294 --> 01:13:20.170 You could see kind of the concentration of that, 01:13:20.790 --> 01:13:24.662 the darker blue over the, and if you sort of marry it 01:13:24.686 --> 01:13:27.902 up with the vegetation that is the most dense, 01:13:28.086 --> 01:13:31.758 those are the trees that are most susceptible to failure in 01:13:31.774 --> 01:13:35.614 the wind. And we saw that as we back tested the results 01:13:35.742 --> 01:13:39.738 of Hurricane Beryl. The largest intensity of outages were in 01:13:39.754 --> 01:13:42.990 that area. We're using that, those analytics 01:13:43.290 --> 01:13:46.370 to address the highest risk 01:13:46.410 --> 01:13:49.230 vegetation on those 2000 miles before the end of the year. 01:13:49.970 --> 01:13:53.530 Okay. Okay, so the 350 is a portion 01:13:53.570 --> 01:13:57.538 of that highest risk? That's correct. What we can accomplish by August 31. 01:13:57.674 --> 01:14:01.146 Okay, and then the 01:14:01.178 --> 01:14:04.394 remainder will be by December 31. 01:14:04.562 --> 01:14:05.910 That's right. Okay. 01:14:09.770 --> 01:14:12.914 I'm wondering if you could add a little bit more than 350 01:14:12.962 --> 01:14:16.306 years, that just the maximum amount you all determined right now through 01:14:16.338 --> 01:14:19.498 your capabilities, by the end of August, I want 01:14:19.514 --> 01:14:23.186 to exceed expectations. Our intention is to do more. 01:14:23.338 --> 01:14:26.746 This is also a time though where we have to respond to storms 01:14:26.778 --> 01:14:30.050 in the interim. And so we're balancing what we think is 01:14:30.090 --> 01:14:33.558 a very aggressive target with one that we can achieve. 01:14:33.654 --> 01:14:37.502 Okay. (item:7:Commissioner Cobos to Jason Wells on mobile generation units) So with respect to acquiring more 01:14:37.606 --> 01:14:41.726 mobile generation units in the past, prior to you assuming your 01:14:41.758 --> 01:14:45.310 role as CEO, I visited with your prior CEO and he 01:14:45.350 --> 01:14:49.654 stated that it's sometimes difficult to get mobile DG 01:14:49.702 --> 01:14:54.750 units because you're in competition with other various 01:14:54.790 --> 01:14:57.888 stakeholders like the oil and gas industry, other utilities 01:14:57.944 --> 01:15:01.392 that are in hurricane prone areas. Do you believe that 01:15:01.416 --> 01:15:05.296 you'll be able to get the increased smaller mobile 01:15:05.328 --> 01:15:09.296 gen units that you're recommending or 01:15:09.408 --> 01:15:13.440 proposing to do? I mean, is this in the works right now? 01:15:13.600 --> 01:15:17.184 Is there really that competition out there through, you know, 01:15:17.232 --> 01:15:20.176 mobile DG acquisition still? Yes, 01:15:20.208 --> 01:15:23.274 Commissioner, I do think we can continue and we're committed to increasing 01:15:23.322 --> 01:15:27.630 the size of our small mobile gen facility for restorations. 01:15:28.370 --> 01:15:31.618 I think our previous CEO was referring to competition for 01:15:31.634 --> 01:15:35.170 the larger mobile gen units that are often are really dedicated 01:15:35.210 --> 01:15:38.990 to load shed type events. You know, in this storm, 01:15:39.290 --> 01:15:43.026 we utilized 18 of our own, the full fleet of 01:15:43.058 --> 01:15:46.898 the small mobile generation units that we have. We were able to 01:15:46.914 --> 01:15:50.908 secure another twelve from our neighboring utilities and 01:15:50.924 --> 01:15:55.280 we think we can and are committed to securing more for future restorations. 01:15:55.780 --> 01:15:59.452 Okay, back to the critical care customers 01:15:59.476 --> 01:16:02.924 and at risk customers. That's an area that just 01:16:02.972 --> 01:16:07.996 resonates with me. And I know in your proposed next 01:16:08.028 --> 01:16:11.428 steps for communications, I really do hope that they are involved 01:16:11.484 --> 01:16:15.644 in the critical care customers. At risk customers 01:16:15.692 --> 01:16:19.160 like nursing homes, hospitals, assisted living, 01:16:19.460 --> 01:16:23.236 all of those type of facilities that have the 01:16:23.268 --> 01:16:27.164 critical care and at risk customers are involved in the communication efforts going 01:16:27.212 --> 01:16:31.044 forward. It's just critically important that we restore 01:16:31.092 --> 01:16:34.972 these types of customers in an accelerated, prioritized manner and 01:16:35.076 --> 01:16:37.680 maintain communication with them during storms, 01:16:38.020 --> 01:16:41.534 prior to, during and after storms. And I know you all 01:16:41.542 --> 01:16:44.878 have made that commitment, but I just want to stress that one more time 01:16:44.934 --> 01:16:48.774 and, you know, whether it's through your communication channels 01:16:48.862 --> 01:16:53.038 or preparation through mobile DG, whatever it is that you 01:16:53.054 --> 01:16:56.822 can do to make sure these types of customers don't lose power or quickly 01:16:56.846 --> 01:16:59.918 restore the power. Commissioner, 01:16:59.934 --> 01:17:03.078 you have my commitment. Our performance was not where 01:17:03.094 --> 01:17:06.980 it needs to be and we will get better. We have 8600 01:17:07.520 --> 01:17:11.184 critical facility customers on our system. We started working 01:17:11.232 --> 01:17:14.712 with them on 01:17:14.736 --> 01:17:18.264 July 7 before the storm. That's insufficient. 01:17:18.352 --> 01:17:22.140 We need to be working with them year round on preparation and coordination. 01:17:22.720 --> 01:17:25.688 And you have my commitment that we will do that moving forward. 01:17:25.824 --> 01:17:29.336 Yeah, coordinated may be with the city as well. Like if there's something that 01:17:29.368 --> 01:17:33.190 they can do to help, you know, if they are without power, maybe getting water, 01:17:33.530 --> 01:17:37.030 oxygen, whatever it is, that they need there to sustain the 01:17:37.570 --> 01:17:39.870 short duration power outage. 01:17:43.370 --> 01:17:46.706 (item:7:Commissioner Glotfelty's thoughts on mobile generation units) Can I just, I hope we can have that discussion about mobile 01:17:46.738 --> 01:17:50.242 general a little bit more in the future. I don't want to use this form 01:17:50.306 --> 01:17:53.522 for that, but for you all 01:17:53.546 --> 01:17:57.178 to own the responsibility to provide mobile and for every 01:17:57.314 --> 01:18:00.750 critical customer in the region I think is not 01:18:02.210 --> 01:18:05.670 perhaps what was intended with the mobile generation language. 01:18:06.130 --> 01:18:09.510 And I hope that's not what you're striving to be the best, 01:18:12.970 --> 01:18:14.790 the savior to everybody there. 01:18:16.090 --> 01:18:20.110 You all know that I have a difference of agreement on how mobile general 01:18:20.610 --> 01:18:23.906 happens and why I think that it should be to the folks 01:18:23.938 --> 01:18:27.338 that do generation and not the t and D folks. But I hope we can 01:18:27.354 --> 01:18:30.426 have a deeper discussion about that and how it's used and why 01:18:30.458 --> 01:18:34.482 it's used and how 01:18:34.506 --> 01:18:37.882 it's, obviously, it's paid for in rates, but I would really like to 01:18:37.906 --> 01:18:41.370 dig into that a little bit more. (item:7:Chairman Gleeson to Jason Wells concerning mobile gen and CenterPoint's moratorium) Yeah, I think we have to. 01:18:41.450 --> 01:18:44.890 We allowed them to rate base hundreds of millions of dollars in mobile general. 01:18:44.930 --> 01:18:48.710 So I think it's incumbent on us to dig deep into and how it's performing 01:18:49.460 --> 01:18:53.100 in the storm. Jason, just a couple 01:18:53.140 --> 01:18:57.228 things really quickly. So I think you put out publicly a DNP 01:18:57.284 --> 01:19:00.572 moratorium until the 29th, until Monday. Yes, sir. 01:19:00.596 --> 01:19:03.692 Can you talk through how you came up with that date and if you've had 01:19:03.716 --> 01:19:07.560 any consideration about potentially extending that moratorium? 01:19:08.100 --> 01:19:13.316 Yes, sir. We originally came up with that date assuming 01:19:13.348 --> 01:19:17.348 that the full recovery of Hurricane barrel would 01:19:17.364 --> 01:19:20.492 be completed. Restoration has occurred, but our communities and 01:19:20.516 --> 01:19:24.388 customers are still recovering, and so we intend 01:19:24.524 --> 01:19:27.828 to extend that moratorium through the end 01:19:27.844 --> 01:19:31.200 of next week. I think that's advisable. 01:19:32.100 --> 01:19:35.948 (item:7:Chairman Gleeson to Jason Wells on transmission concerns) So, you know, during the direct show, you had some transmission issues 01:19:36.124 --> 01:19:39.884 during this storm. Some transmission issues. Do you know the issue? 01:19:40.012 --> 01:19:43.152 The facility, facilities that had issues during the directo, 01:19:43.256 --> 01:19:47.020 are those the same facilities that you saw go down during barrel? 01:19:47.640 --> 01:19:51.264 Chairman, thanks for the question. And no, there were no structural issues 01:19:51.352 --> 01:19:54.552 with respect to the facilities that were 01:19:54.576 --> 01:19:57.872 impacted by Beryl and de Racho. When we put 01:19:57.896 --> 01:20:01.168 up temporary transmission poles, as we had to after de 01:20:01.184 --> 01:20:04.296 Racho, temporary is a bit of a misnomer. 01:20:04.488 --> 01:20:07.682 Those structures are built to a high wind standard 01:20:07.866 --> 01:20:11.202 and worked without issue in 01:20:11.226 --> 01:20:15.034 Hurricane Beryl. We did have one circuit lockout 01:20:15.122 --> 01:20:19.650 in both Hurricane Beryl and in the derecho. 01:20:19.810 --> 01:20:23.098 The lockout in that case was, in both instances, 01:20:23.194 --> 01:20:26.338 a tree coming in contact with our line that was outside of our right of 01:20:26.354 --> 01:20:29.402 way. But as soon as we cleared that, that vegetation, 01:20:29.466 --> 01:20:31.230 we were able to re energize the line. 01:20:33.260 --> 01:20:36.468 (item:7:Chairman Gleeson to Jason Wells concerning CenterPoint having a Town Hall and unacceptable violence) You know, you talked about communication I know last time you all were in front 01:20:36.484 --> 01:20:40.068 of us. I advise that at some point in the near future doing 01:20:40.164 --> 01:20:43.420 a town hall to communicate directly with your customers. I still hope that's under 01:20:43.460 --> 01:20:46.652 consideration and you plan to do that. And I'm glad you talked about 01:20:46.676 --> 01:20:50.068 the reps, you know, in the aftermath of the storm. I talked to a 01:20:50.084 --> 01:20:53.300 number of reps in the association. I mean, they're there to help. 01:20:53.380 --> 01:20:57.002 You know, they have their own call centers that if you provide them material, 01:20:57.076 --> 01:20:59.894 you know, they can help and calls can be directed to them. 01:21:00.022 --> 01:21:03.534 They have those customer relationships. So I'm glad to hear that you're 01:21:03.662 --> 01:21:05.982 going to try to work with them, because I know in the middle of the 01:21:06.006 --> 01:21:09.262 storm, in the middle of the crisis, is not the time to be trying 01:21:09.286 --> 01:21:12.566 to figure out the systems for dealing with crisis communication. 01:21:12.638 --> 01:21:16.014 The time for that's, you know, between the storms, because we know another one's coming. 01:21:16.062 --> 01:21:19.302 So I'd say, you know, work on those systems. They're there to 01:21:19.326 --> 01:21:22.476 help. And I'd like an update on that piece. Yes, sir. For my office. 01:21:22.558 --> 01:21:26.840 definitely. Violence, 01:21:26.960 --> 01:21:30.760 you know, we saw, we read a lot of stories 01:21:30.840 --> 01:21:34.584 about line, you know, line workers being attacked. Can you. 01:21:34.752 --> 01:21:37.016 I don't know that I have a full picture of that. I know at one 01:21:37.048 --> 01:21:40.584 point, I think in the presentation, you said you'd actually take down 01:21:40.672 --> 01:21:44.224 one of your staging sites because of violence. I know another one was, 01:21:44.312 --> 01:21:48.102 I think, moved farther out, which caused some delays. Can you talk through just 01:21:48.176 --> 01:21:51.290 what the lineworker's experience was during this? 01:21:51.370 --> 01:21:54.946 Thank you, Chairman. You know, the vast majority of our customers 01:21:55.018 --> 01:21:59.026 that came in contact with our linemen offered 01:21:59.058 --> 01:22:01.630 grace and patience and appreciation. 01:22:01.930 --> 01:22:05.354 Unfortunately, there were numerous instances of 01:22:05.402 --> 01:22:08.870 threats and acts of violence against our line workers. 01:22:09.290 --> 01:22:13.030 As Randy mentioned, we had to demobilize the staging site 01:22:13.580 --> 01:22:17.440 because of the very credible threat of drive by shootings. 01:22:18.020 --> 01:22:21.348 We had multiple instances of guns being pulled and put 01:22:21.364 --> 01:22:23.560 in the chest of our line workers. 01:22:24.780 --> 01:22:28.244 We had very active threats around the community, sometimes throwing 01:22:28.292 --> 01:22:31.996 rocks. I want to acknowledge the 01:22:32.028 --> 01:22:35.444 work of law enforcement. They did an incredible job 01:22:35.532 --> 01:22:38.652 of keeping our lineworker safe. But I think what's 01:22:38.676 --> 01:22:42.200 important here is not only is that behavior not tolerable 01:22:42.980 --> 01:22:46.532 in society, it's counterproductive to the restoration, 01:22:46.676 --> 01:22:49.400 but it jeopardizes future restorations. 01:22:49.820 --> 01:22:53.660 These crews that come to help our communities through mutual assistance 01:22:53.780 --> 01:22:57.800 don't have to be here. They come because they want to help. 01:22:58.540 --> 01:23:01.972 And I think there's more we can do collectively to keep these 01:23:01.996 --> 01:23:05.504 crews safe as they perform this vital work to restore service 01:23:05.572 --> 01:23:08.992 to our customers. Absolutely and I think that experience is 01:23:09.016 --> 01:23:12.488 something you need to make sure you communicate to your customers as well, that it 01:23:12.504 --> 01:23:15.904 is counterproductive to what you all are trying to do in 01:23:15.912 --> 01:23:19.232 the restoration effort. (item:7:Chairman Gleeson's thoughts on upcoming hearings) I think that would be really helpful as well. The last thing 01:23:19.256 --> 01:23:23.112 I'll say is we have two hearings coming up next week. 01:23:23.256 --> 01:23:26.984 We have a legislative session in less than six months that's going to start. 01:23:27.152 --> 01:23:30.696 I would look at those as opportunities. We have a few 01:23:30.848 --> 01:23:34.370 legislative staffers here from the House and the Senate. 01:23:35.150 --> 01:23:38.890 Please bring forth items that need to be addressed in statute. 01:23:40.030 --> 01:23:43.254 You know, anything that's there that could have helped during this, 01:23:43.342 --> 01:23:46.534 let us know, let the legislature know. Talk about that, because I think you 01:23:46.542 --> 01:23:50.510 have a real opportunity here to get some statutory change and regulatory change, 01:23:50.590 --> 01:23:53.038 but we need to know what those things are. So I'd urge you to look 01:23:53.054 --> 01:23:56.374 at those as opportunities to communicate what those changes might be 01:23:56.422 --> 01:23:59.130 and then continue to work with us to get those done. 01:23:59.250 --> 01:24:02.514 Absolutely. Thank you, chairman. All right. Any other questions, 01:24:02.562 --> 01:24:06.418 comments? Thank you. (item:7:Commissioner Glotfelty's questions on injuries or fatalities) Just one. And that is, did y'all have 01:24:06.434 --> 01:24:10.242 any serious accidents on the system, or did everybody make 01:24:10.266 --> 01:24:11.670 it home to their families? 01:24:13.890 --> 01:24:16.750 Fortunately, we had no significant injuries and fatalities. 01:24:17.410 --> 01:24:21.298 We had a handful of illnesses and motor vehicle incidents, 01:24:21.394 --> 01:24:24.790 but no significant injuries and fatalities during the entire restoration, 01:24:25.250 --> 01:24:29.234 and that should be applauded. Yes, absolutely. Thank you 01:24:29.242 --> 01:24:30.950 y'all for being here. Thank you. 01:24:38.810 --> 01:24:43.066 All right Commissioners, like I said. I'll bring up next Item 33. 01:24:43.098 --> 01:24:46.378 Just a bit of housekeeping, you know, and we 01:24:46.394 --> 01:24:49.716 did this last time too. In conversations with our, with our Court Reporters who work really 01:24:49.748 --> 01:24:53.460 hard for us. We'll be taking breaks anywhere between, after every 01:24:53.500 --> 01:24:56.924 hour and a half to 2 hours. To make sure that they have time to 01:24:57.052 --> 01:25:00.396 recover from this. So my plan is to probably 01:25:00.428 --> 01:25:03.100 try to go, if we can get through a couple items in the next 15 01:25:03.180 --> 01:25:05.880 minutes or so, and then take a 10 or 15 minute break. 01:25:06.780 --> 01:25:10.708 (item:33:Chairman Gleeson lays out Project No. 56822) So next I'd call up Item 33. That's Docket 56822, 01:25:10.764 --> 01:25:13.964 Investigation of Emergency Preparedness and Response by Utilities 01:25:14.012 --> 01:25:18.094 in Houston and the surrounding communities. Connie, you filed a memo. 01:25:18.262 --> 01:25:21.486 (item:33:PUC Executive Director Connie Corona lays out her memo on Staff's proposed scope & approach to the investigation) I did. Good morning Commissioners. On Monday, I filed 01:25:21.518 --> 01:25:25.930 a memo outlining staffs proposed scope and approach to the investigation. 01:25:26.230 --> 01:25:30.062 It identifies 7 primary focus areas for investigation. 01:25:30.246 --> 01:25:34.230 And notes that one of our objectives will be to develop recommendations for 01:25:34.310 --> 01:25:37.090 utilities and to share with the Legislature. 01:25:37.630 --> 01:25:41.432 We'll also be looking to see what changes we can make to Commission Rules. 01:25:41.616 --> 01:25:45.128 And if we identify actions that we can take in the short term 01:25:45.184 --> 01:25:48.504 before the December 1 deadline, we will certainly bring 01:25:48.552 --> 01:25:52.224 those to you. Our timeline contemplates spending 01:25:52.272 --> 01:25:55.580 the month of August, collecting data through requests for information 01:25:56.080 --> 01:26:00.016 which we'll issue to electric and water service providers in the Greater 01:26:00.048 --> 01:26:03.416 Houston area. We also will invite 01:26:03.488 --> 01:26:08.114 other impacted entities like retail electric providers, communications providers 01:26:08.282 --> 01:26:11.946 and industry groups. To respond to RFIs and tell us 01:26:11.978 --> 01:26:15.642 about the impact of the storm on their services and operations, 01:26:15.826 --> 01:26:19.950 on their response and any recommendations to inform the investigation. 01:26:20.730 --> 01:26:24.922 Our timeline also contemplates a workshop in October. For 01:26:24.946 --> 01:26:28.402 the purpose of collecting best practices from SME, 01:26:28.466 --> 01:26:32.850 subject matter experts, regarding the storm preparedness and response. 01:26:33.270 --> 01:26:36.854 And finally, I want to announce that Staff is in the process 01:26:36.942 --> 01:26:40.494 of developing an online portal. To invite 01:26:40.542 --> 01:26:43.782 public comment from residents and businesses in the 01:26:43.806 --> 01:26:47.142 Houston area. That will be live in the 01:26:47.166 --> 01:26:51.130 next couple of weeks. So that folks can go online, 01:26:51.870 --> 01:26:55.518 sort of fill out an online form to share their 01:26:55.654 --> 01:26:58.936 experiences and perspectives with staff 01:26:59.128 --> 01:27:02.300 for the investigation. (item:33:Chairman Gleeson's thoughts on PUC Executive Director Connie Corona's memo) I think that's all good. 01:27:02.800 --> 01:27:06.512 You know, I think we do a pretty good job of communicating with our state 01:27:06.576 --> 01:27:09.980 elected officials, obviously the Houston delegation in this case. 01:27:10.400 --> 01:27:13.896 I also urge you all our Governmental Relations Staff, you know, 01:27:13.968 --> 01:27:17.704 we received a letter from Mayor Whitmire. To reach out to local 01:27:17.832 --> 01:27:21.272 elected officials as well to make sure we get their input. You know, they're the 01:27:21.296 --> 01:27:25.074 closest on the ground to those constituents. And so I think it's important that we 01:27:25.082 --> 01:27:28.242 hear from them as well. We will certainly do that. Thank you. 01:27:28.386 --> 01:27:32.390 Commissioners? (item:33:Commissioner Cobos' thoughts on PUC Executive Director Connie Corona's memo) Yeah, I'm in agreement with the Chairman. Pursuant to 01:27:32.690 --> 01:27:36.162 Mayor Whitmeyer's letter, I think it's important that you send RFIs 01:27:36.226 --> 01:27:40.070 to the cities and the critical care facility operators. 01:27:41.290 --> 01:27:42.990 Will do. Thank you. 01:27:44.730 --> 01:27:45.950 Questions or comments? 01:27:50.380 --> 01:27:54.252 Okay. Thank you, Connie. You know, continue to keep us apprised of 01:27:54.316 --> 01:27:57.396 how it's going. Thank you. All right, 01:27:57.428 --> 01:28:01.588 Shelah. That brings us to our contested case dockets. 01:28:01.764 --> 01:28:04.996 So Item 1 was consented. 01:28:05.188 --> 01:28:08.820 So that will bring us to Item 2. If you'll lay out Item 2, 01:28:08.860 --> 01:28:12.460 please? Yes, Chairman. (item:2:Application of Southwestern<br />Public Service Company to amend its CCN to construct generation facilities in Lamb County, TX and Lea County, NM) Item 2 is Docket 01:28:12.500 --> 01:28:16.016 No. 55255. This is the application 01:28:16.088 --> 01:28:19.752 of Southwestern Public Service Company to amend its certificate of 01:28:19.776 --> 01:28:23.680 convenience and necessity to construct generation facilities in Lamb 01:28:23.720 --> 01:28:27.160 County, Texas and Lea County, New Mexico. Before you 01:28:27.200 --> 01:28:30.576 is a proposal for decision from SOAH. All the parties filed 01:28:30.608 --> 01:28:33.848 exceptions and the SOAH ALJ filed a response. 01:28:33.984 --> 01:28:37.488 That recommended adding one ordering paragraph to the PFD. The Commission 01:28:37.544 --> 01:28:41.088 heard oral argument in this proceeding at the July 11 meeting and 01:28:41.104 --> 01:28:44.776 Chairman Gleeson filed a memo in this docket. (item:2:Chairman Gleeson lays out his memo) So as I noted 01:28:44.808 --> 01:28:48.088 in my memo, you know, this is a hard case. I agreed with the 01:28:48.104 --> 01:28:51.580 ALJ in a number of places. There are a few where I didn't. 01:28:52.360 --> 01:28:56.100 You know, I disagree with the ALJ's conclusion that 01:28:56.680 --> 01:29:00.288 SPS adequately considered alternatives to 01:29:00.304 --> 01:29:03.640 the solar facility. I honestly do. And that the process was 01:29:03.680 --> 01:29:05.460 necessarily fair and reasonable. 01:29:07.050 --> 01:29:10.482 I agreed with the conditions that the ALJ 01:29:10.546 --> 01:29:14.350 put forth. As I said in my memo, I'd recommend, 01:29:14.690 --> 01:29:18.190 if we're going to go with the third party consultant review. That we 01:29:18.690 --> 01:29:24.150 ask the parties for more detailed language to include in that order concerning 01:29:24.450 --> 01:29:28.402 favored nation clause. I think we need one in here as well. I think 01:29:28.426 --> 01:29:31.962 it's important that we get our ratepayers get the same considerations 01:29:32.026 --> 01:29:35.120 that you New Mexico customers do. I think, 01:29:35.160 --> 01:29:38.420 you know, they've agreed to the NERC weatherization standards. 01:29:38.720 --> 01:29:42.112 I think that's appropriate in this case. And the 01:29:42.136 --> 01:29:44.848 one that I keep going back and forth on that we heard about was the 01:29:44.864 --> 01:29:48.656 cost cap. When I wrote the memo, I was leaning 01:29:48.688 --> 01:29:53.208 in favor of a cost cap. Probably vacillated a 01:29:53.224 --> 01:29:55.340 time or two since then on it. 01:29:58.570 --> 01:30:01.890 I'm happy to hear y'all's thoughts on the memo. And, you know, 01:30:01.930 --> 01:30:05.282 particularly on the cost cap. I can go either way on 01:30:05.306 --> 01:30:08.746 it. So, you know, where I land will 01:30:08.778 --> 01:30:11.230 definitely be informed by what you all think. 01:30:13.050 --> 01:30:16.722 Okay. (item:2:Commissioner Cobos' thoughts on Chairman Gleeson's memo) Chairman Gleeson, I'm in general agreement with your 01:30:16.866 --> 01:30:20.362 memo. I ultimately, I tend to agree that the 01:30:20.386 --> 01:30:23.834 RFP process could have been handled a little bit better with respect 01:30:23.922 --> 01:30:28.200 to taking a more broad view 01:30:28.240 --> 01:30:30.952 of resources out there in the all source RFP. 01:30:31.136 --> 01:30:35.120 I think just on its face, looking at the language in the RFP, 01:30:35.280 --> 01:30:39.160 it seemed to really favor renewable resources and 01:30:39.200 --> 01:30:43.200 resources that ultimately were constrained by the timeline 01:30:43.320 --> 01:30:46.580 that they were under, that the utility was under to be able to 01:30:47.000 --> 01:30:51.042 effectively interconnect resources in time to meet a capacity need. 01:30:51.226 --> 01:30:55.150 The capacity need was on the radar for a while. These utilities, 01:30:55.570 --> 01:30:59.074 the generation units, rather, that the utility was 01:30:59.122 --> 01:31:04.202 seeking to retire, have been known for a while. So the 01:31:04.226 --> 01:31:07.506 competitive RFP process and spss 01:31:07.698 --> 01:31:12.138 identification of a capacity need could 01:31:12.154 --> 01:31:16.480 have been done better. But I understand that the 01:31:16.940 --> 01:31:20.148 company needs the solar facilities to be able to comply with 01:31:20.164 --> 01:31:24.124 the Summer PRM requirements, not only the existing 15%, 01:31:24.212 --> 01:31:28.360 but also upcoming Summer PRM requirements from SPP. 01:31:29.380 --> 01:31:33.148 So I got to a place where I was comfortable with the three proposed 01:31:33.204 --> 01:31:37.548 solar projects. I would agree that the 01:31:37.604 --> 01:31:41.200 company hasn't carried the burden proof on the battery facility. 01:31:41.830 --> 01:31:45.410 I do believe that battery storage provides 01:31:45.750 --> 01:31:49.094 reliability benefits during 01:31:49.142 --> 01:31:52.130 critical hours of the day. We've seen that in ERCOT, 01:31:52.550 --> 01:31:56.510 but unlike in ERCOT, when a vertically integrated utility comes 01:31:56.550 --> 01:32:00.686 before the Commission with the CCN to get 01:32:00.718 --> 01:32:04.846 approval for a facility to meet a capacity need, 01:32:04.998 --> 01:32:08.858 we have to establish that additional that that facility will 01:32:08.874 --> 01:32:12.330 result in probable improvement of additional service and 01:32:12.410 --> 01:32:15.930 lowering of cost for consumers. In this case, since it's so small and 01:32:15.970 --> 01:32:19.442 expensive, I don't believe that they've established their case 01:32:19.506 --> 01:32:23.030 for additional that it will result in the probable improvement of 01:32:23.410 --> 01:32:25.510 service and lowering a cost. 01:32:26.010 --> 01:32:30.178 So, in your place, with respect 01:32:30.234 --> 01:32:33.590 to the review of the PFD, 01:32:34.340 --> 01:32:37.764 and agree with the conditions, with the addition of 01:32:37.852 --> 01:32:41.468 the most favored nations clause and the 01:32:41.484 --> 01:32:46.036 weatherization standards that the company is committed to comply with from 01:32:46.068 --> 01:32:49.708 NERC, I think that is appropriate. We can have a 01:32:49.804 --> 01:32:53.640 cost cap deliberation in a minute, but I do want to provide some 01:32:54.100 --> 01:32:57.320 guidance as a commissioner covering SPP. 01:32:58.820 --> 01:33:02.332 Serving on the RSC for SPP over 01:33:02.356 --> 01:33:06.084 the course of last year. We've been having many discussions 01:33:06.132 --> 01:33:09.868 about increasing SPP or 01:33:09.924 --> 01:33:14.100 Summer PRM and the establishment of a Winter PRM and SPP. 01:33:14.260 --> 01:33:17.988 In a couple of weeks, I will have to go to an RSC meeting 01:33:18.084 --> 01:33:21.716 in St. Louis to vote on whether 01:33:21.828 --> 01:33:25.308 the whether SPP should increase their Summer PRM from 15% 01:33:25.364 --> 01:33:28.490 to 16% starting in the Summer of '26 01:33:28.830 --> 01:33:32.686 and whether they should establish a Winter PRM of 01:33:32.718 --> 01:33:36.318 36% starting in the Winter seasons of '26-'27 01:33:36.494 --> 01:33:40.654 and '27-'28. And I 01:33:40.662 --> 01:33:43.734 think it's really important that the utility starts planning 01:33:43.782 --> 01:33:47.030 now, immediately in their next RFP, to start complying 01:33:47.070 --> 01:33:50.846 with these PRMs. Because I will say that whether Texas opposes those PRMs 01:33:50.878 --> 01:33:54.162 or nothing, they're very likely to be approved by the 01:33:54.186 --> 01:33:58.266 SPP RSC. And right after that, the SPP is already starting 01:33:58.298 --> 01:34:02.290 to discuss going from to 17% 01:34:02.410 --> 01:34:06.418 Summer PRM and about a 44% Winter PRM 01:34:06.554 --> 01:34:09.710 for the two next Winter seasons. So, 01:34:10.010 --> 01:34:13.258 you know, the PRMs are increasing. The demands 01:34:13.274 --> 01:34:16.490 of meeting those planning reserve margin requirements 01:34:16.530 --> 01:34:19.796 in SPP are increasing. So the LSEs, 01:34:19.828 --> 01:34:23.160 the load serving entities, and SPP, like SP's, 01:34:23.460 --> 01:34:27.460 will either have to build the capacity or go buy the capacity from 01:34:27.540 --> 01:34:31.028 another merchant generator out there that has excess capacity to 01:34:31.044 --> 01:34:35.396 sell to them. And that's going to be more and more difficult as many LSEs 01:34:35.588 --> 01:34:38.956 start to compete to buy that excess capacity. 01:34:39.148 --> 01:34:42.924 So, you know, solar is certainly very helpful to meet 01:34:42.972 --> 01:34:46.162 Summer PRMs, and at times it 01:34:46.186 --> 01:34:50.350 is helpful in the Winter. But ultimately you need to get accredited 01:34:50.850 --> 01:34:54.882 capacity to meet the Winter PRMs. 01:34:55.066 --> 01:34:58.554 So more dispatchable generation is going to 01:34:58.562 --> 01:35:02.018 be very important. And battery storage is dispatchable. But if you're going 01:35:02.034 --> 01:35:05.802 to look at battery storage, it needs to be big enough to actually 01:35:05.866 --> 01:35:09.226 help meet those 01:35:09.258 --> 01:35:12.754 Winter PRMs, but also cost effective. And given the fact 01:35:12.802 --> 01:35:16.658 that the generation fleet is aging and some of it's retiring, 01:35:16.714 --> 01:35:20.190 you know, thermal dispatchable generation is definitely 01:35:21.530 --> 01:35:25.106 you know, an area that the company needs to prioritize in their next 01:35:25.138 --> 01:35:28.674 RFP and upcoming RFPs, because those Winter PRMs are coming. They're coming 01:35:28.722 --> 01:35:33.010 fast, and the Winter seasons overall 01:35:33.050 --> 01:35:37.202 are just riskier. SPPs taking that in consideration as they look 01:35:37.226 --> 01:35:40.744 at their I accredited accreditation 01:35:40.832 --> 01:35:44.456 methodologies that they're putting forth for us, we feel assurance at the next 01:35:44.488 --> 01:35:47.976 ERCOT meeting. So the company needs to start planning. 01:35:48.048 --> 01:35:51.816 Right? They need to start planning. These PRMs are coming in. 01:35:51.928 --> 01:35:54.696 And I get it. Y'all are under pressure. You know, you have, 01:35:54.848 --> 01:35:58.216 and you're not the only company that has parent companies that want cleaner 01:35:58.248 --> 01:36:02.040 energy. There's many companies out there that want that. Right? And so you're under 01:36:02.080 --> 01:36:05.568 pressure from your potentially your parent company. 01:36:05.744 --> 01:36:09.240 You have other states that you operate in that want. That have 01:36:09.280 --> 01:36:13.216 clean energy goals, like New Mexico and large customers out 01:36:13.248 --> 01:36:16.536 there. You know, they have corporate sustainability goals and they want to meet them. 01:36:16.568 --> 01:36:19.512 And you as a utility, they're your customers. You want to provide them with these 01:36:19.536 --> 01:36:23.056 types of resources. And ultimately, you know, 01:36:23.168 --> 01:36:25.580 you want to take advantage of federal incentives, 01:36:26.280 --> 01:36:30.008 you know, that money that's out there and. But you 01:36:30.024 --> 01:36:33.774 can't lose sight of that. We have to focus on maintaining reliability and meeting those 01:36:33.822 --> 01:36:37.518 Winter PRMs. And so I really, you know, to put it 01:36:37.534 --> 01:36:41.094 simply, I think, as I've said, you know, you need to make sure that you 01:36:41.102 --> 01:36:45.010 have enough dispatchable generation to keep the lights on during the Winter and 01:36:45.670 --> 01:36:49.366 keep moving forward with that in consideration. As you move forward with 01:36:49.398 --> 01:36:53.350 your upcoming RFPs, make sure they're competitive. Make sure that, 01:36:53.510 --> 01:36:56.558 you know, there's no perception that they're just intended 01:36:56.654 --> 01:36:59.958 to be for renewable generation. But I have faith that 01:36:59.974 --> 01:37:03.078 y'all will move forward in looking at those options. 01:37:03.174 --> 01:37:07.110 And I just wanted to provide that perspective. 01:37:07.150 --> 01:37:10.806 As the SPP RSC member, I know y'all are fully aware 01:37:10.838 --> 01:37:14.310 of these upcoming PRMs, but just as a reminder, 01:37:14.430 --> 01:37:17.982 it's important not only for SPP maintain reliability there, 01:37:18.046 --> 01:37:20.742 but that is the expectation we have in Texas. We got to keep the lights 01:37:20.766 --> 01:37:23.780 on in the Winter. Thank you, Commissioner. 01:37:25.160 --> 01:37:28.260 (item:2:Commissioner Glotfelty's thoughts on Chairman Gleeson's memo) Yeah, I would appreciate your memo. 01:37:28.560 --> 01:37:31.808 I think you laid out all the issues quite well. Kind of 01:37:31.824 --> 01:37:36.060 where I've landed on this is approve the solar, deny the batteries. 01:37:36.640 --> 01:37:40.256 I'm not supportive of the minimum 01:37:40.288 --> 01:37:43.620 production guarantee and the cost cap. 01:37:43.920 --> 01:37:47.608 I think. I mean, I want to. I want to be there because 01:37:47.664 --> 01:37:50.978 I think the RFP process for utilities is always 01:37:51.034 --> 01:37:54.722 flawed. Utilities always pick themselves. So let's not, 01:37:54.906 --> 01:37:58.194 you know, fool ourselves. But the place 01:37:58.242 --> 01:38:01.790 to solve that issue is in their rate base, in their rate case. 01:38:02.370 --> 01:38:06.346 And if they. If we. I just 01:38:06.378 --> 01:38:09.586 think that's the decision should be yes or no, 01:38:09.778 --> 01:38:12.570 and then hold their feet to the fire when the rate case comes around. 01:38:12.650 --> 01:38:16.442 So I think the weatherization guarantee should actually be 01:38:16.466 --> 01:38:19.170 the ERCOT standard, not the NERC standard. 01:38:21.190 --> 01:38:25.670 I know we don't have much leg to stand on here, but it's 01:38:25.710 --> 01:38:28.838 further up north than where our ERCOT standard goes. 01:38:28.894 --> 01:38:31.838 And those people are no less important to us as a commission. 01:38:31.934 --> 01:38:35.206 So that, and the most favored nation, you know, 01:38:35.238 --> 01:38:38.970 guarantee, I think, is important. So all of these issues, 01:38:40.630 --> 01:38:43.170 I'm not totally beholden to. 01:38:44.560 --> 01:38:48.472 They are bigger than just this one case. They're issues that this Commission 01:38:48.576 --> 01:38:50.580 has to discuss at some point in time. So, 01:38:52.000 --> 01:38:55.336 you know, wherever that leads us today, I'm happy to 01:38:55.528 --> 01:38:59.504 find that common ground. Absolutely. And, you know, in my briefing, I discussed, 01:38:59.592 --> 01:39:03.020 you know, an ERCOT standard. Since we do that kind of by region, 01:39:03.480 --> 01:39:06.760 I ended up getting to a place where I felt like, I don't know what 01:39:06.800 --> 01:39:10.482 standard we would actually apply to, to everything. And so I think 01:39:10.506 --> 01:39:13.306 this is a good. Since they've agreed to this, I think this is a good 01:39:13.338 --> 01:39:17.470 step. (item:2:Commissioner Jackson's thoughts on Chairman Gleeson's memo) Well, I'm in 01:39:18.290 --> 01:39:21.786 agreement with your memo for the most part. I also wanted to hear 01:39:21.818 --> 01:39:25.430 what other thoughts and ideas folks had on the cost cap. 01:39:25.730 --> 01:39:29.538 I feel like that's kind of a big step. But in this particular and 01:39:29.554 --> 01:39:33.330 unique case, because of the background, and I think what, 01:39:33.450 --> 01:39:37.206 you know, has been mentioned is, in terms of the planting reserve 01:39:37.238 --> 01:39:39.850 margin and how we anticipate that growing over time, 01:39:40.870 --> 01:39:44.718 there's likely some 01:39:44.894 --> 01:39:48.190 reason to protect the consumer in terms 01:39:48.230 --> 01:39:51.942 of the investment. And so the cost cap may 01:39:51.966 --> 01:39:55.850 be a good idea. I know a lot of times we want to 01:39:56.350 --> 01:40:00.254 reserve a lot of these actions to the right 01:40:00.302 --> 01:40:03.060 case. But in this particular situation, 01:40:04.600 --> 01:40:08.680 you know, the answer could likely have been, you didn't follow 01:40:08.720 --> 01:40:11.976 the process. And the answer is no. I don't think we want that 01:40:12.008 --> 01:40:15.856 to be the case because we know that they actually need the 01:40:15.888 --> 01:40:20.128 generation, they need it in a given timeframe. And so 01:40:20.304 --> 01:40:24.080 solar is, at this point in time, the option 01:40:24.120 --> 01:40:28.368 moving forward. But I do think that it's reasonable because 01:40:28.424 --> 01:40:32.000 we do want to protect the ratepayer because 01:40:32.080 --> 01:40:35.928 of the fact that they didn't necessarily follow 01:40:35.984 --> 01:40:39.224 the process, that a cost cap 01:40:39.272 --> 01:40:43.648 might be appropriate, and that 01:40:43.664 --> 01:40:47.528 would enable them to go ahead and get the solar reserve, the battery 01:40:47.664 --> 01:40:51.320 for another determination on down the road and then 01:40:51.360 --> 01:40:53.390 protect the consumer with the cost cap. 01:40:56.210 --> 01:40:59.594 So Commissioner Glotfelty, if we didn't have a cost 01:40:59.642 --> 01:41:03.146 cap, could you get behind the production 01:41:03.178 --> 01:41:03.990 guarantee? 01:41:07.690 --> 01:41:14.434 So I 01:41:14.442 --> 01:41:16.714 guess part of the challenge is I don't know how it works. I don't know 01:41:16.722 --> 01:41:20.298 how it takes into consideration forced and unforced outages. I don't 01:41:20.314 --> 01:41:23.898 know how it takes into consideration weather. So those are 01:41:23.914 --> 01:41:28.450 the challenges that I have. If we have an appropriate accommodation and 01:41:28.610 --> 01:41:32.530 a fairness component to that. Yes, I can deal 01:41:32.570 --> 01:41:36.162 with that. I don't think, I just feel like we're dealing 01:41:36.186 --> 01:41:40.250 with mechanical systems here. Solar is not necessarily mechanical. I understand 01:41:40.330 --> 01:41:43.070 that. But mechanical systems fail. 01:41:45.270 --> 01:41:48.690 We have to have that recognition. We want them to maintain them. But, 01:41:49.390 --> 01:41:52.982 so, yeah, I mean, I can do that. I mean, 01:41:53.006 --> 01:41:56.806 (item:2:Chairman Gleeson's thoughts on cost cap) I agree. For me in this case, you know, in the trade off 01:41:56.838 --> 01:42:00.342 between risk, between the different parties, I think 01:42:00.486 --> 01:42:03.414 I feel like more of the risk has to be on SPS. 01:42:03.542 --> 01:42:07.614 And so I'm okay if we don't implement 01:42:07.782 --> 01:42:11.046 a cost cap and we deal with, with that in the prudence in the base 01:42:11.078 --> 01:42:14.702 rate case, if everyone's okay with everything, 01:42:14.806 --> 01:42:18.494 with the rest of the memo, I can support that. 01:42:18.582 --> 01:42:22.470 (item:2:Commissioner Cobos' thoughts on 100% production tax credit guarantee) Yeah, and I think that the 100% production tax credit guarantee 01:42:22.510 --> 01:42:25.854 is critically important because that's one of the underpinnings for 01:42:25.902 --> 01:42:29.230 making the solar projects cost effective because of the fuel savings and the tax 01:42:29.270 --> 01:42:32.650 savings. And so 01:42:33.150 --> 01:42:37.140 I think that's a critical component of the conditions. And the minimum 01:42:37.220 --> 01:42:40.644 production guarantee is also very important 01:42:40.732 --> 01:42:44.044 because those can flow through, back through the customers. And I think in the past, 01:42:44.092 --> 01:42:47.428 when SPS came in for their big WIM projects 01:42:47.564 --> 01:42:50.652 several years ago. There was similar language put in through the 01:42:50.716 --> 01:42:53.636 Commission order that approved those projects. 01:42:53.668 --> 01:42:56.924 So it's a framework that I think we've had in place before in 01:42:56.932 --> 01:43:00.412 the past, and it was put in place to make sure that those 01:43:00.476 --> 01:43:04.726 PTC benefits flow back through to 01:43:04.758 --> 01:43:07.050 the customers. And, 01:43:08.670 --> 01:43:11.694 you know, we want to make sure that they flow through 01:43:11.742 --> 01:43:15.030 to all customers because there are some back end issues and I won't get into 01:43:15.070 --> 01:43:18.654 them right now, that sometimes 01:43:18.742 --> 01:43:23.094 ends up being sort of more of the PTC benefits 01:43:23.142 --> 01:43:26.094 flow through to larger customers rather than residential customers. 01:43:26.142 --> 01:43:29.776 But I, I want to make sure that we get that framework 01:43:29.808 --> 01:43:32.912 in place and I could go either way on the cost cap. I hear you, 01:43:32.936 --> 01:43:36.264 Commissioner Jackson. We have a mixed precedent 01:43:36.392 --> 01:43:39.100 at the commission on cost caps. And, 01:43:40.040 --> 01:43:43.752 you know, SPS in the past has agreed to one in the WIM projects 01:43:43.776 --> 01:43:47.664 through settlement agreement. So it's not like a new first 01:43:47.712 --> 01:43:50.912 case of impression for SPS. I would 01:43:50.936 --> 01:43:53.622 just say that if we do put one in, 01:43:53.776 --> 01:43:57.070 that AFUDC has to be included. 01:43:58.650 --> 01:44:02.242 So I'm okay without imposing the cost cap if you know, like you say, 01:44:02.266 --> 01:44:05.586 we can have the production 01:44:05.778 --> 01:44:06.750 guarantee. 01:44:11.330 --> 01:44:14.634 Okay, so I 01:44:14.722 --> 01:44:17.762 think we have agreement. Sounds like we have agreement. Okay. 01:44:17.906 --> 01:44:21.394 (item:2:Motion to deny & modify parts of the PFD consistent with memo and discussion) Then I will entertain a motion to deny in part and modify in 01:44:21.402 --> 01:44:24.522 part the PFD consistent with my memo in our discussion, 01:44:24.666 --> 01:44:27.722 and delegate to OPDM the authority to issue an 01:44:27.746 --> 01:44:31.070 order regarding the third party prudence reviews discussed in my memo. 01:44:31.570 --> 01:44:35.402 So moved. I second. Have a motion and second. All those 01:44:35.426 --> 01:44:38.790 in favor say aye. Opposed? Motion prevails. 01:44:41.690 --> 01:44:45.710 (item:2:Chairman Gleeson recesses open meeting) So Shelah, I think this is probably a good point to take a little recess. 01:44:46.210 --> 01:44:49.156 So 10, 15 minutes. 01:44:49.308 --> 01:44:53.092 So why don't we come back at 11:30? So we'll 01:44:53.116 --> 01:44:54.880 stand in recess till 11:30. 01:44:58.580 --> 01:45:02.080 (item:2:Chairman Gleeson reconvenes open meeting) We will reconvene our open meeting at 11:33. 01:45:02.940 --> 01:45:06.476 Shelah, I believe that brings us to Item No. 6. Will lay out 01:45:06.508 --> 01:45:10.268 Item No. 6, please? Yes, sir. (item:6:Application of Southwestern Electric Power Company to amend its distribution cost recovery factor) Item 6 is Docket No. 01:45:10.324 --> 01:45:14.134 56511. The application of Southwestern Electric 01:45:14.182 --> 01:45:18.246 Power Company to amend its distribution cost recovery factor. 01:45:18.398 --> 01:45:21.950 Before you as a proposal for decision. Let's see. 01:45:21.990 --> 01:45:25.918 Cities advocating reasonable deregulation filed exceptions. The ALJ 01:45:25.974 --> 01:45:29.638 filed a letter in response to the exception stating that no changes to 01:45:29.654 --> 01:45:32.730 the PFD are warranted. And Chairman Gleeson filed a memo. 01:45:33.350 --> 01:45:36.638 So simple correction memo. Happy to 01:45:36.654 --> 01:45:39.992 hear any thoughts or answer any questions? Good catch. 01:45:40.016 --> 01:45:43.944 I'm in agreement. I'm in agreement as well. Okay. (item:6:Motion to approve proposed order consistent with Chairman Gleeson's memo) I would entertain 01:45:43.992 --> 01:45:48.056 a motion to approve the proposed order consistent with my memo. So moved. 01:45:48.168 --> 01:45:51.176 I second. Motion and a second. All those in favor say aye. Aye. 01:45:51.248 --> 01:45:54.656 Opposed? Motion prevails. Okay, so the 01:45:54.688 --> 01:45:58.384 next Items up are 9 and 10. I'm recused from those, so I 01:45:58.392 --> 01:46:01.792 will turn this over to Commissioner Cobos. Thank you, Chairman Gleeson. 01:46:01.856 --> 01:46:05.528 Shelah, will you please lay out Item No. 9? Yes, ma'am. (item:9:Application of Energywell Texas, LLC for a Retail Electric Provider Certificate) Item 9 01:46:05.584 --> 01:46:09.056 is Docket No. 5651. The application of 01:46:09.088 --> 01:46:13.480 Energywell Texas, LLC for Retail Electric Provider 01:46:13.520 --> 01:46:17.500 Certificate. Before you is an appeal of Order No. 2. 01:46:18.400 --> 01:46:21.760 Finding the application deficient, establishing deadlines, and an 01:46:21.800 --> 01:46:25.460 opportunity to cure and denying request for good cause exception. 01:46:26.200 --> 01:46:28.980 And the appeal is before the Commission now. 01:46:30.010 --> 01:46:32.950 (item:9:Motion for extension of time to act on appeal) I would move to extend time to act on the appeal. 01:46:34.770 --> 01:46:38.910 I agree as well. All right. Do I 01:46:39.450 --> 01:46:42.670 have a motion? Do I have second? Second. Okay. 01:46:42.970 --> 01:46:46.790 All in favor? Say aye. Aye. Great. Motion passes. 01:46:47.490 --> 01:46:50.750 Okay. Item No. 10. Shelah, please lay that one out. 01:46:52.010 --> 01:46:56.512 (item:10:Investigation of Berkshire Communities, LLC for violations of PURA and Commission Rules) Item No. 10 is Docket No. 56786. This is the investigation 01:46:56.576 --> 01:47:00.576 of Berkshire Communities, LLC for violations of PURA 01:47:00.608 --> 01:47:04.216 and Commission rules. Before you is a motion from Commission Staff to 01:47:04.248 --> 01:47:07.784 open a formal investigation of Berkshire Communities, LLC. 01:47:07.952 --> 01:47:11.208 Commission Staff has opened an informal investigation 01:47:11.344 --> 01:47:14.592 for possible violations. Related to the unauthorized 01:47:14.656 --> 01:47:18.312 resell of electricity and denial of tenants rights to choose a 01:47:18.336 --> 01:47:21.694 retail provider in areas of the state that are subject to 01:47:21.742 --> 01:47:24.862 retail customer choice. Commission Staff requests that the 01:47:24.886 --> 01:47:28.878 commission issue an order to open a formal investigation. So 01:47:28.894 --> 01:47:32.134 that they may determine which affiliated business entity is the proper 01:47:32.222 --> 01:47:34.838 respondent in this docket. All right. Thank you, 01:47:34.854 --> 01:47:38.566 Shelah. (item:10:Motion to grant Commission Staff's authorization to institute a formal investigation) I would grant Commission Staff's motion to authorize Commission 01:47:38.638 --> 01:47:42.062 Staff to institute a formal investigation of Berkshire for possible 01:47:42.126 --> 01:47:46.102 violation of PURA and the Commission's rules. And direct OPDM 01:47:46.126 --> 01:47:50.034 to develop and order consistent with the Commission's decision to grant the relief 01:47:50.082 --> 01:47:53.554 requested in Commission Staff's motion. I'm supportive. 01:47:53.722 --> 01:47:56.630 I'm supportive as well. Okay. Same. All right. 01:47:57.170 --> 01:48:01.590 Do I have a motion? I so moved. So moved. A second? 01:48:01.890 --> 01:48:04.746 I second. All right. All in favor say aye. 01:48:04.818 --> 01:48:07.906 Aye. Motion passes, thank you. I will 01:48:07.938 --> 01:48:11.178 now hand the gavel back to Chairman Gleeson. Thank you, 01:48:11.194 --> 01:48:15.220 Commissioner Cobos. So that concludes the contested 01:48:15.260 --> 01:48:19.600 case portion of our agenda. So we'll move into Rules and Projects. 01:48:20.540 --> 01:48:23.372 (item:11:Shelah Cisneros confirms no one has signed up to speak on Rules & Projects) Shelah, I think you said no one signed up to speak on any rules or 01:48:23.396 --> 01:48:27.452 projects. That's correct. Okay, so based on consents 01:48:27.516 --> 01:48:31.188 and where we don't have anything to discuss. (item:18:Chairman Gleeson lays out Project No. 54445) I think that'll take us to 01:48:31.244 --> 01:48:34.476 Item No. 18. That is Docket 01:48:34.508 --> 01:48:38.930 54445, Review of protocols adopted by the independent organization. 01:48:40.710 --> 01:48:44.366 So, you know, we have 13 revisions 01:48:44.398 --> 01:48:48.302 in front of us. Twelve of them, I would say. Not a 01:48:48.326 --> 01:48:52.770 lot, if anything, to discuss. Then we have NPRR1224. 01:48:53.590 --> 01:48:57.310 So I think the way I'd like to do this is if we end up 01:48:57.350 --> 01:49:00.446 at a place where we approve 1224, 01:49:00.518 --> 01:49:04.152 we can just have one motion for. For all the 01:49:04.176 --> 01:49:07.792 approvals. If we end up taking a different action, then we'll 01:49:07.816 --> 01:49:11.080 probably need two motions. One to approve the other twelve, and then 01:49:11.120 --> 01:49:14.900 another for whatever action we take on 1224. Does that work for everybody? 01:49:15.800 --> 01:49:18.192 Didn't quite understand it. We're going to do all of the other ones in one 01:49:18.216 --> 01:49:21.584 motion, and then. So I don't want to do anything yet, because if 01:49:21.632 --> 01:49:25.528 we end up approving 1224, we can just add that to the existing. 01:49:25.704 --> 01:49:27.620 To the existing. To that motion. 01:49:29.360 --> 01:49:32.776 So we asked for ERCOT staff, 01:49:32.968 --> 01:49:36.640 for the IMM-Dr. Patton's here, and for PUC Staff 01:49:36.680 --> 01:49:40.220 to come up and go over their comments. 01:49:40.640 --> 01:49:44.384 The way we're going to run this, we'll have ERCOT go first, then Dr. Patton, 01:49:44.432 --> 01:49:47.712 then PUC Staff. And then if ERCOT 01:49:47.736 --> 01:49:51.376 has anything to close on, we'll allow them time. We've read 01:49:51.408 --> 01:49:55.008 everything, so I'd say five minutes is preferable. No more than ten, if that 01:49:55.024 --> 01:49:58.478 works for everybody. Okay, so if y'all want to come up. 01:49:58.614 --> 01:49:59.410 Woody? 01:50:15.510 --> 01:50:17.130 (item:18:ERCOT's Woody Rickerson on ECRS, NPRR1224, $750 floor and working with IMM) Woody Rickerson with ERCOT. 01:50:19.310 --> 01:50:22.280 All right, so I want to start with some background information. Try to go quickly 01:50:22.320 --> 01:50:26.312 here. ECRS isn't a new idea concept was included 01:50:26.336 --> 01:50:29.820 in a future ancillary service paper released back in 2012. 01:50:30.160 --> 01:50:34.832 The need for ECRS was recognized over a decade ago and 01:50:34.856 --> 01:50:38.760 is anchored in ERCOT. Being a relatively small grid with high penetration 01:50:38.840 --> 01:50:42.784 levels of renewables. Prior to June 2023, 01:50:42.832 --> 01:50:46.064 ECRS capacity was actually being purchased within 01:50:46.232 --> 01:50:49.812 responsive reserve ancillary service. Fundamentally, 01:50:49.996 --> 01:50:53.412 ECRS is a reliability tool. When ERCOT 01:50:53.436 --> 01:50:57.188 buys ECRS, it's buying a capability, not necessarily a capacity, 01:50:57.244 --> 01:51:00.676 although it comes with a capacity. When ERCOT holds ECRS, 01:51:00.708 --> 01:51:04.140 it holds a guarantee of ten minute ramping capability. 01:51:04.300 --> 01:51:08.400 When we release that ECRS, we're also releasing that guarantee. 01:51:09.140 --> 01:51:12.520 The market may or may not have that capability. 01:51:13.430 --> 01:51:16.838 The immune analysis shows that over the last twelve 01:51:16.894 --> 01:51:20.142 months, ECRS was deployed. The resulting system 01:51:20.326 --> 01:51:23.810 was short ten minute ramping 15% of the time. 01:51:24.790 --> 01:51:28.398 So keep in mind, that was even with a more conservative 01:51:28.454 --> 01:51:32.382 release of ECRS. So 15% of the time, that ten 01:51:32.406 --> 01:51:36.410 minute ramping wasn't there. So why is that important? 01:51:37.550 --> 01:51:40.054 First of all, ERCOT doesn't have synchronous ties, 01:51:40.182 --> 01:51:43.838 interconnections. Other regions like MISO, 01:51:43.894 --> 01:51:48.534 New York, New England, all of which are monitored by Potomac Economics 01:51:48.662 --> 01:51:52.022 all have those ties. Those areas can lean 01:51:52.046 --> 01:51:56.210 on those import capability. ERCOT doesn't have that luxury. ERCOT provides 01:51:58.270 --> 01:52:01.902 or ECRS provides much of that function that synchronous 01:52:01.926 --> 01:52:05.690 ties provide. Secondly, ERCOT's an island. 01:52:06.240 --> 01:52:09.872 It's actually one of the smallest of the three major interconnections. So a 01:52:09.896 --> 01:52:13.864 1200 megawatt forced outage has a much bigger impact 01:52:13.992 --> 01:52:17.860 on ERCOT frequency than it would have in a larger interconnect. 01:52:18.160 --> 01:52:22.256 Therefore, ERCOT has to protect that frequency more so than 01:52:22.288 --> 01:52:25.728 other regions. And lastly, 01:52:25.784 --> 01:52:28.380 ERCOT has a high penetration level of solar and wind, 01:52:28.960 --> 01:52:32.524 so those resource types come with more variability in output. 01:52:32.672 --> 01:52:35.680 ERCOT depends heavily on wind and solar forecast. 01:52:36.740 --> 01:52:40.724 An example would be just a wind ramp that we expect that 01:52:40.772 --> 01:52:44.636 arrives 30 minutes late that can cause significant 01:52:44.748 --> 01:52:48.252 operational problems. ECRS is one of 01:52:48.276 --> 01:52:51.720 the tools that helps us mitigate that risk of forecast errors. 01:52:52.500 --> 01:52:55.852 Those risks don't exist to that same level in 01:52:55.876 --> 01:52:59.062 other regions as well. So that's a another risk that's unique 01:52:59.086 --> 01:53:02.850 to ERCOT. At a high level. 01:53:03.430 --> 01:53:07.142 What the immune system has proposed reduces the 01:53:07.166 --> 01:53:11.250 amount of time ERCOT has access to ECRS. 01:53:11.870 --> 01:53:14.130 It puts more risk on system operations. 01:53:14.830 --> 01:53:17.810 And really, if you think about it, holding any ancillary service product, 01:53:18.190 --> 01:53:22.730 holding any ancillary service product out of the market, is withholding. 01:53:23.720 --> 01:53:28.304 But when we talk about responsive reserve withholding, responsive reserve withholding 01:53:28.432 --> 01:53:31.928 regulation, that's deemed okay because of the high 01:53:31.984 --> 01:53:35.380 need for reliability. 01:53:35.800 --> 01:53:38.540 ERCOT would put ECRS in that same category. 01:53:39.240 --> 01:53:43.860 ECRS is a high need reliability tool, 01:53:44.680 --> 01:53:48.900 and the reliability trade off is worth some cost of withholding. 01:53:49.930 --> 01:53:53.670 Now, we agree with the IMM that there's room for improvement, 01:53:54.490 --> 01:53:58.550 and we think improvement can be made without some significant risk 01:53:58.930 --> 01:54:02.626 in reliability. The NPRR1224 01:54:02.658 --> 01:54:06.866 40 megawatt threshold for release provides 01:54:06.898 --> 01:54:10.562 some of that improvement. And just keep in 01:54:10.586 --> 01:54:13.850 mind, too, that the 40 megawatt trigger is actually the 01:54:13.890 --> 01:54:17.880 third trigger. It's a new third trigger for 01:54:18.000 --> 01:54:21.220 releasing ECRS. Two triggers already exist. 01:54:21.680 --> 01:54:25.360 ERCOT will already release ECRS if frequency deviations 01:54:25.400 --> 01:54:29.168 are seen, and ERCOT also will release ECRS if 01:54:29.184 --> 01:54:33.272 the forecasted ramp deficiencies are known. So if we look into the future and see 01:54:33.296 --> 01:54:36.448 your ramp deficiency, we'll release ECRS. And that's a lot 01:54:36.464 --> 01:54:39.584 of what IMM wants us to do more of. And I think 01:54:39.632 --> 01:54:42.782 in the Summer of 2023, that was not as established as it 01:54:42.806 --> 01:54:46.610 is now. So there already have been improvements made to. 01:54:47.110 --> 01:54:50.454 To release ECRS, as we see forecasted ramp 01:54:50.502 --> 01:54:54.822 problems. So NPRR1224 sets 01:54:54.846 --> 01:54:59.046 up that third trigger with a 40 megawatt deficiency after ten minutes. 01:54:59.198 --> 01:55:02.502 I think if you were to move that trigger down to something like 5 MW 01:55:02.526 --> 01:55:06.734 or no megawatts, it would result in a substantial number of unnecessary 01:55:06.782 --> 01:55:10.568 deployments. So, as a system operator, 01:55:10.624 --> 01:55:15.100 we don't want our operators deploying manually deploying ECRS 01:55:15.880 --> 01:55:19.496 every day or twice a day, and then having to bring it back 01:55:19.528 --> 01:55:23.072 in. We want to make sure the ECRS is deployed during material 01:55:23.136 --> 01:55:26.184 shortages, not during small ramp periods, which the five 01:55:26.232 --> 01:55:29.220 megawatt trigger would force us to deploy more often. 01:55:30.120 --> 01:55:34.012 As a grid operator, we just don't want our operators in the situation where we're 01:55:34.036 --> 01:55:38.440 doing that repeatedly every day. Concerning the $750 floor, 01:55:39.340 --> 01:55:42.836 ERCOT did rely on market participant input and attack processes 01:55:42.868 --> 01:55:47.020 for setting that floor. We continue to believe that there 01:55:47.060 --> 01:55:50.200 is some risk in demand fluctuations 01:55:51.060 --> 01:55:54.260 if a low floor is 01:55:54.340 --> 01:55:57.788 coupled with a low trigger. So those two things together 01:55:57.884 --> 01:56:01.770 could cause demand fluctuations. As you release ECRS, 01:56:02.550 --> 01:56:05.790 demand that has responsive to prices, 01:56:05.830 --> 01:56:10.062 comes back on, prices go up, it goes off. You have these fluctuations 01:56:10.086 --> 01:56:13.342 that could occur during critical periods of the day. We want 01:56:13.366 --> 01:56:15.970 to avoid that. So we do think there is some risk there. 01:56:19.910 --> 01:56:23.130 The IMM has argued that releasing ECRS, 01:56:23.910 --> 01:56:26.650 and you see this a lot in the comments, in most cases, 01:56:27.580 --> 01:56:31.812 doesn't mean ERCOT will lose ECR's capability, or generally 01:56:31.996 --> 01:56:36.044 doesn't result. Those comments are. 01:56:36.212 --> 01:56:37.680 You find those throughout. 01:56:39.020 --> 01:56:42.772 I think in the most recent comments, we see 85% of the time when 01:56:42.796 --> 01:56:46.420 ECRS is released. There isn't a problem with retaining 01:56:46.460 --> 01:56:50.640 the ten minute ramp, but that means 15% of the time there is, 01:56:51.950 --> 01:56:55.398 and we can't operate the system. Looking back at 01:56:55.414 --> 01:56:58.850 what happened, we operate the system going forward. 01:57:00.190 --> 01:57:03.022 So I didn't need car insurance yesterday because I didn't get in a wreck, 01:57:03.126 --> 01:57:06.610 but I had it and I'll carry it going forward as well. 01:57:06.910 --> 01:57:09.010 And ECRS is much like that. 01:57:10.030 --> 01:57:13.566 We don't know what's going to happen tomorrow. That's why we 01:57:13.598 --> 01:57:17.206 carry that ecrs as an insurance policy. If we could 01:57:17.238 --> 01:57:20.780 buy ancillary services for what we needed yesterday, 01:57:21.120 --> 01:57:24.512 we could run a very efficient market. But that's just not the way the 01:57:24.536 --> 01:57:25.500 system works. 01:57:28.840 --> 01:57:31.968 Having said all that, I mean, we agree with 01:57:31.984 --> 01:57:35.600 the IMM, the deployment could be improved, especially when compared against the performance 01:57:35.680 --> 01:57:39.472 from 2023. So, no doubt about it, and we're 01:57:39.496 --> 01:57:43.504 willing to work on that. And I think we've already made improvements to improve 01:57:43.592 --> 01:57:47.656 that. We've been working with the IMM and 01:57:47.688 --> 01:57:51.500 market participants on those improvements for the last six months. 01:57:52.400 --> 01:57:56.224 TAC asked ERCOT to review the ECRS quantities in December 01:57:56.272 --> 01:57:59.952 2023. So we started that several months 01:57:59.976 --> 01:58:03.984 ago. ERCOT determined that the quantities being procured were appropriate 01:58:04.032 --> 01:58:07.960 for the risk. Those risks are the things I talked about for isolated grid 01:58:08.000 --> 01:58:12.050 with high penetration renewables, no synchronous connections. 01:58:13.150 --> 01:58:16.090 During this review, ERCOT met with IMM's staff. 01:58:16.630 --> 01:58:20.850 In fact, many of the concepts in 2024 were originally proposed 01:58:21.430 --> 01:58:24.130 by the IMM. So, 01:58:24.870 --> 01:58:28.930 ultimately, the framework laid out in 1224 01:58:29.230 --> 01:58:33.370 represents a balanced improvement over what happened in the past 01:58:33.710 --> 01:58:36.680 that can be used as ERCOT gets ready for. For RTC. 01:58:37.260 --> 01:58:40.996 So that's what I got. Thank you, Woody. And before 01:58:41.028 --> 01:58:44.276 we get into questions. Woody, I would want to recognize and thank 01:58:44.308 --> 01:58:48.868 Senator Menendez and Zafarini for sending us a letter relating 01:58:48.924 --> 01:58:51.980 to NPRR1224. (item:18:Chairman and Commissioners questions to Woody Rickerson, NPRR1224) So, 01:58:52.100 --> 01:58:56.040 when this was initially proposed, there was no offer floor. 01:58:56.700 --> 01:59:00.316 Can you talk to me why? Talk me through kind of why not? 01:59:00.468 --> 01:59:05.006 Why there was no offer floor originally? So we 01:59:05.038 --> 01:59:08.374 left a space, there was an anticipation 01:59:08.422 --> 01:59:11.542 there would be an offer floor, but we wanted to get market participant feedback on 01:59:11.566 --> 01:59:15.326 what the offer floor would be. So the NPRR 01:59:15.438 --> 01:59:18.950 was written so that that offer floor could be filled 01:59:18.990 --> 01:59:21.090 in after market participant input. 01:59:21.830 --> 01:59:25.702 So just one piece, maybe, of constructive feedback 01:59:25.886 --> 01:59:28.874 that wasn't apparent to me, I would say, and honestly, you know, 01:59:28.882 --> 01:59:31.706 I'm not going to follow this as closely as everyone who's in every you know, 01:59:31.738 --> 01:59:35.850 committee meeting. I thought you all were completely agnostic 01:59:35.930 --> 01:59:40.082 to that, to be honest. And is it still fair to say. Fair for 01:59:40.106 --> 01:59:43.698 me to say that the part of this revision 01:59:43.834 --> 01:59:46.962 that is most important to ERCOT is the 01:59:46.986 --> 01:59:48.990 trigger? That's correct. Okay, 01:59:49.930 --> 01:59:53.202 Commissioners, questions for Woody? (item:18:Commissioner Cobos' thoughts and question for Woody Rickerson on offer floor & working with IMM) Yeah, and thank you for 01:59:53.266 --> 01:59:56.236 emphasizing that. It wasn't clear to me either, 01:59:56.348 --> 01:59:59.900 Chairman Gleason. It seems to me like the offer floor 01:59:59.940 --> 02:00:03.412 came up discussion because there was some discussion 02:00:03.436 --> 02:00:06.596 of potentially lower offer floor that the IMM put out there. 02:00:06.628 --> 02:00:10.300 And so the market sort of reacted and came up with a 02:00:10.340 --> 02:00:13.628 different offer floor if there was going to 02:00:13.644 --> 02:00:17.428 be an offer floor. So, you know, as the 02:00:17.484 --> 02:00:21.008 conversation sort of evolved to the board, it became unclear. 02:00:21.044 --> 02:00:24.720 Clear where. You know, at least now 02:00:24.760 --> 02:00:28.272 we're clear where ERCOT really stood in terms of what's most 02:00:28.336 --> 02:00:32.300 important from this entire exercise, because from my perspective, 02:00:32.680 --> 02:00:36.760 based on where we left off, when ERCOT got their 2024 ancillary 02:00:36.800 --> 02:00:39.816 service methodology approved, ERCOT committed to 02:00:39.848 --> 02:00:43.440 work with the IMM and the stakeholders to improve 02:00:43.520 --> 02:00:47.118 the deployment of ecrs to better balance, you know, 02:00:47.214 --> 02:00:50.446 making sure you still have resources when you need 02:00:50.478 --> 02:00:54.566 them for the reliability risks that you laid out, but also 02:00:54.718 --> 02:00:58.430 releasing ecrs a little bit earlier, 02:00:58.510 --> 02:01:01.742 a little bit more, to mitigate 02:01:01.806 --> 02:01:05.686 any potential artificial pricing in the market. And that was the 02:01:05.718 --> 02:01:09.438 exercise. Right? That was the exercise that I 02:01:09.454 --> 02:01:13.432 believe that the group collectively, ERCOT, IMM, our Staff. 02:01:13.536 --> 02:01:17.800 Embarked on to try to rebalance the ECRS deployment, 02:01:17.840 --> 02:01:21.936 where you're still getting your reliability tool, but, you know, 02:01:22.088 --> 02:01:25.340 consumer costs, pricing concerns are mitigated. 02:01:25.720 --> 02:01:29.168 And so the deployment trigger was really where I thought 02:01:29.264 --> 02:01:32.984 our focus was. And somewhere along the way, given potential, 02:01:33.072 --> 02:01:36.672 probably, back and forth discussions on an offer floor, is how 02:01:36.696 --> 02:01:41.636 we ended up with the seven offer floor. And ERCOT seemed 02:01:41.668 --> 02:01:43.360 to really, 02:01:44.940 --> 02:01:49.052 really advocate for the $750 offer floor. But what I'm hearing from you today 02:01:49.196 --> 02:01:53.076 is that the deployment trigger, as you just said, is the most important piece 02:01:53.108 --> 02:01:55.980 of this NPRR for ERCOT. That's correct. 02:01:56.060 --> 02:01:56.760 Okay. 02:01:59.140 --> 02:02:00.080 Commissioners? 02:02:06.990 --> 02:02:10.970 Actually, I'll wait for my comments till after Dr. Patton goes and Staff goes. 02:02:11.630 --> 02:02:12.930 I might do the same thing. 02:02:16.230 --> 02:02:18.250 Dr. Patton, thank you for being here this morning. 02:02:19.350 --> 02:02:21.850 You're welcome. It's on. Okay. 02:02:22.430 --> 02:02:27.302 (item:18:IMM & Potomac Economics President Dr. David Patton, NPRR1224) Well, I appreciate the invitation to come, and I 02:02:27.326 --> 02:02:31.002 apologize in advance for the 02:02:31.026 --> 02:02:35.290 difficulty. This is a complex issue, and you're 02:02:35.330 --> 02:02:39.346 hearing things from ERCOT. You're hearing things that are diametrically opposed 02:02:39.458 --> 02:02:40.350 from me. 02:02:42.730 --> 02:02:46.842 It may surprise you to say there are a lot of things that ERCOT 02:02:46.906 --> 02:02:51.114 and I agree on in this issue, but at the outset, I think it's important 02:02:51.202 --> 02:02:54.688 to acknowledge. Just to put this, 02:02:54.794 --> 02:02:59.340 this into context, the market performance that impacted 02:02:59.380 --> 02:03:03.920 by the deployment of ECRS in 2023 was calamitous. 02:03:04.500 --> 02:03:08.520 I've never seen something as bad as what happened in 2023. 02:03:10.220 --> 02:03:13.320 This one issue doubled energy prices. 02:03:13.860 --> 02:03:17.260 It would have been hard for me to suggest something that would have 02:03:17.300 --> 02:03:21.206 that magnitude of an impact on the market 02:03:21.278 --> 02:03:24.582 performance, the competitiveness and the efficiency of prices. And so the 02:03:24.606 --> 02:03:28.326 priority has to be to fix this, not just iterate 02:03:28.398 --> 02:03:31.530 and improve and make it a little bit better. 02:03:32.190 --> 02:03:36.254 And we know how to fix this. And so that's why we 02:03:36.302 --> 02:03:39.566 disagree with what's in the NPRR, both elements, the deployment 02:03:39.598 --> 02:03:43.174 trigger and the offer floor, because what the NPRR would do 02:03:43.222 --> 02:03:47.276 is institutionalize a fairly large share of the dysfunction 02:03:47.308 --> 02:03:50.916 that we saw in 2023. And in some respects, 02:03:51.108 --> 02:03:54.900 there are conditions under which the NPRR could result in worse 02:03:54.940 --> 02:03:58.308 performance of the markets than occurred in 2023. Because in 02:03:58.324 --> 02:04:01.640 2023, we didn't have a $750 offer floor. 02:04:02.100 --> 02:04:05.964 And that offer floor, under a lot of conditions, could do more to distort prices 02:04:06.012 --> 02:04:09.040 than failing to deploy ECRS. 02:04:09.780 --> 02:04:13.160 So I want to talk about the things that have really confused people. 02:04:13.960 --> 02:04:17.280 I've said multiple times that refusing to deploy 02:04:17.400 --> 02:04:22.104 ECRS demonstrably undermines 02:04:22.152 --> 02:04:25.712 reliability. We've been evaluating 02:04:25.896 --> 02:04:29.760 the operations of the ERCOT market since the early two thousands. In fact, 02:04:29.800 --> 02:04:32.888 that's when we first started working with ERCOT and with the PUC, 02:04:32.984 --> 02:04:36.592 is the very first big report we did was on operations. 02:04:36.656 --> 02:04:40.466 And I think we had 15 recommendations for, for how to improve operations 02:04:40.538 --> 02:04:44.098 and reliability of the system. And we do the same sort of evaluation in all 02:04:44.114 --> 02:04:47.450 the other markets, because the operating actions, 02:04:47.570 --> 02:04:51.110 and this is one of them, the decision to deploy 02:04:51.730 --> 02:04:55.338 reserves has a huge impact on the performance of the market and 02:04:55.394 --> 02:04:58.034 how cost effectively you're maintaining reliability. 02:04:58.202 --> 02:05:02.266 Now, this is a new product, so it's not surprising that people are confused 02:05:02.378 --> 02:05:05.498 about whether deploying ECRS is good 02:05:05.514 --> 02:05:09.466 for reliability or bad for reliability. The assumption is 02:05:09.658 --> 02:05:13.442 when you deploy ECRS, somehow you've lost access to 02:05:13.466 --> 02:05:17.090 resources and you've diminished reliability. And so 02:05:17.210 --> 02:05:20.426 from an operator perspective, I can understand the 02:05:20.458 --> 02:05:24.098 appeal of having a bank of resources sitting there that you can deploy 02:05:24.194 --> 02:05:28.042 when. When you really feel like you need it. The problem with 02:05:28.066 --> 02:05:31.522 that is that if 02:05:31.546 --> 02:05:34.850 you don't deploy ECRS before, 02:05:35.010 --> 02:05:38.842 the real time market can no longer do its job, which we 02:05:38.866 --> 02:05:41.590 refer to as SCAD sked, has one job, 02:05:42.130 --> 02:05:45.306 to send dispatch instructions to the generators that will 02:05:45.338 --> 02:05:48.190 meet the demand on the system optimally. 02:05:49.250 --> 02:05:52.562 What the trigger in this NPRR does is say, we're going to let 02:05:52.586 --> 02:05:56.394 the SCAD run out of resources, and for up to ten 02:05:56.442 --> 02:06:00.596 minutes, by at least 40 mw. So we're going to intentionally prevent 02:06:00.668 --> 02:06:03.840 SCAD from doing its job if we adopt this trigger. 02:06:04.380 --> 02:06:07.800 And when you do that, a couple things happen. One is 02:06:09.420 --> 02:06:13.140 you're no longer sending dispatch instructions to generators that are 02:06:13.180 --> 02:06:17.164 adequate. And so now you're leaning on regulation to 02:06:17.212 --> 02:06:20.172 keep supply and demand imbalance. That's not the purpose of regulation. 02:06:20.276 --> 02:06:23.356 Regulation is intended to address situations 02:06:23.388 --> 02:06:27.290 where maybe generators are running lower than the instruction you gave them. 02:06:27.410 --> 02:06:31.338 Like, it's no. RTO should design their real time market 02:06:31.394 --> 02:06:34.850 to run out of resources so that you then have to lean on regulation, 02:06:34.930 --> 02:06:37.630 because then you're closer to a frequency event. 02:06:38.370 --> 02:06:42.170 The regulation keeps you out of the frequency event by incrementing 02:06:42.210 --> 02:06:45.530 up generation when supply and demand are in balance. 02:06:45.690 --> 02:06:49.434 So the number one priority should, from a reliability standpoint, 02:06:49.482 --> 02:06:53.520 should be not to let sched run out of resources. Now, when sched does 02:06:53.560 --> 02:06:57.696 run out of resources, it has the very unappealing side effect that 02:06:57.888 --> 02:07:01.416 you get price spikes, because sched thinks the lights are about to go 02:07:01.448 --> 02:07:06.240 out. And so that's why in 2023, we repeatedly saw $5,000 02:07:06.280 --> 02:07:09.260 prices that were sustained for a very long period of time. 02:07:09.560 --> 02:07:12.856 Because to sched, it looks like 02:07:12.888 --> 02:07:16.632 the system is going down, but it only looks like that because we're 02:07:16.656 --> 02:07:20.320 not giving it additional resources so that it can meet the load. 02:07:22.100 --> 02:07:25.716 Now, one of the reasons for the 02:07:25.748 --> 02:07:30.084 offer floor is, I think there's a concern that if you release ECRS 02:07:30.132 --> 02:07:33.828 resources and allow sched to 02:07:33.924 --> 02:07:37.220 meet the load, that obviously prices are going to be much lower 02:07:37.340 --> 02:07:40.740 and maybe they'll be too low. But there's 02:07:40.780 --> 02:07:44.188 been no analysis by anybody that suggests that prices are going 02:07:44.204 --> 02:07:47.638 to be too low if we release ECRS resources. 02:07:47.694 --> 02:07:51.894 In fact, we, in our rebuttal comments, did an analysis showing what ORDC 02:07:51.942 --> 02:07:56.654 would do in these intervals where we're actually short of reserves and 02:07:56.822 --> 02:08:00.470 the prices are efficient. If you're significantly short 02:08:00.510 --> 02:08:04.206 of ten minute reserves, price would average dollar 900 and go 02:08:04.238 --> 02:08:08.174 all the way up to $5,000. So there's 02:08:08.222 --> 02:08:12.300 no evidence that ORDC will not do its job and needs to be supplemented somehow 02:08:12.340 --> 02:08:16.196 by an offer floor that would bolster prices. Now, the important 02:08:16.268 --> 02:08:20.140 thing with the 85% number that ERCOT 02:08:20.180 --> 02:08:23.620 mentioned is that 85% of the time when 02:08:23.660 --> 02:08:26.120 we released ECRS, there was no shortage. 02:08:26.540 --> 02:08:30.436 And when there is no shortage, there should be no shortage pricing. 02:08:30.588 --> 02:08:34.164 So any price effect you get from the $750 offer 02:08:34.212 --> 02:08:37.324 floor is a pure distortion, and that's 85% of 02:08:37.332 --> 02:08:41.890 the time. Now, 15% of the time there is a shortage. And Woody 02:08:42.390 --> 02:08:45.646 just mentioned that the 15% is 02:08:45.678 --> 02:08:49.110 because we released ECRS. That's not true. The 15% 02:08:49.270 --> 02:08:52.582 is a shortage that existed because of supply and demand. 02:08:52.646 --> 02:08:56.606 And whether you release ECRS or don't, you're going to see those shortages. And those 02:08:56.638 --> 02:09:00.770 are the periods where we demonstrated that the ORDC sets prices 02:09:01.070 --> 02:09:04.262 adequately. So I was encouraged that 02:09:04.286 --> 02:09:08.024 the Staff recommendation was not to accept the $750 02:09:08.072 --> 02:09:12.128 offer floor because that's the most unambiguously unreasonable 02:09:12.184 --> 02:09:15.680 part of the NPRR. But the deployment trigger is very, 02:09:15.720 --> 02:09:20.300 very important, and it's important to understand why 02:09:20.600 --> 02:09:24.664 adopting a deployment trigger that lets get go short hurts 02:09:24.712 --> 02:09:27.860 reliability. And there's two reasons. 02:09:28.320 --> 02:09:31.572 When you release ECRS, you're not losing reserves. 02:09:31.736 --> 02:09:35.484 And you heard that over and over that we need reserves. 02:09:35.532 --> 02:09:38.412 We need to hold these things. We don't want to deploy them because we need 02:09:38.436 --> 02:09:41.540 to have them so that we can deploy them. When you deploy them, 02:09:41.580 --> 02:09:44.844 you get spinning reserves on the system. There's no way you lose 02:09:44.892 --> 02:09:48.212 reserves. You have to ramp when you deploy these resources. 02:09:48.276 --> 02:09:52.276 If they turn on some gas turbines, let's say you 02:09:52.308 --> 02:09:55.716 ramp down other resources on the system who provide you spinning 02:09:55.748 --> 02:09:59.504 reserves. Now, why is that a good thing from a reliability standpoint, 02:09:59.552 --> 02:10:03.416 that's a good thing because then when unexpected things happen on the system, 02:10:03.608 --> 02:10:07.168 SCAD can immediately start ramping those resources up. Like you 02:10:07.184 --> 02:10:10.672 get response right away if you hold them 02:10:10.696 --> 02:10:14.088 as ECRS and wait for the operator to press the button. 02:10:14.264 --> 02:10:17.000 If it's a gas turbine, you have to wait ten minutes for it to come 02:10:17.040 --> 02:10:20.672 on. So it provides less reliability value, which is why the 02:10:20.696 --> 02:10:23.816 demand curves for spinning reserves are always higher than 02:10:23.848 --> 02:10:28.256 for non spinning. They provide more value to the system. And when you deploy ECRS, 02:10:28.408 --> 02:10:32.780 you're creating spinning reserves. So it's a good thing from a reliability standpoint. 02:10:33.440 --> 02:10:37.112 But there's two other very important things, and these are nuanced, and I'm 02:10:37.136 --> 02:10:40.736 not sure people recognize that this is going on. One thing we 02:10:40.768 --> 02:10:44.616 saw when we looked at what units will ramp down 02:10:44.768 --> 02:10:48.112 if you deploy ECRS. Most of 02:10:48.136 --> 02:10:51.658 those resources are gas turbines that are fast ramping 02:10:51.754 --> 02:10:55.610 and batteries. Now, that should scare you that batteries 02:10:55.690 --> 02:10:59.890 are the ones ramping down when you deploy ECRS. What that means is 02:11:00.050 --> 02:11:03.746 when we don't deploy ECRS and sched gets really tight and 02:11:03.778 --> 02:11:07.418 prices go up, we start dispatching our batteries. We don't want 02:11:07.434 --> 02:11:10.834 to be dispatching our batteries under those circumstances. If we're not short, 02:11:10.922 --> 02:11:14.394 we want to preserve the state of charge of the batteries. So when prices jump 02:11:14.442 --> 02:11:17.912 up to 3000 and $4,000 load curtails 02:11:17.936 --> 02:11:21.144 that shouldn't be curtailing, which Woody mentioned. Batteries start 02:11:21.192 --> 02:11:24.816 running that shouldn't be running. And all of this is being done to 02:11:24.848 --> 02:11:28.920 preserve gas turbines that are sitting there that are 02:11:28.960 --> 02:11:32.312 much better suited to provide SCAd the flexibility that 02:11:32.336 --> 02:11:35.824 it needs. And ultimately, if you keep doing that, if you keep 02:11:35.872 --> 02:11:38.500 not deploying the ECRS, you think, 02:11:39.280 --> 02:11:43.144 I can see how it appears that the system is more reliable because I'm looking 02:11:43.192 --> 02:11:46.956 at resources that. That I can press a button and deploy, but the system is 02:11:46.988 --> 02:11:50.900 less reliable if I've diminished my supply by running 02:11:50.940 --> 02:11:53.440 batteries out of their state of charge in the meantime. 02:11:56.220 --> 02:12:00.436 So that hopefully explains why our 02:12:00.468 --> 02:12:03.560 reliability conclusion about this deployment trigger is. 02:12:04.820 --> 02:12:08.716 We come to a very different conclusion than ERCOT operators. And it's just that 02:12:08.908 --> 02:12:12.388 I think we're looking at the secondary and tertiary effects of 02:12:12.484 --> 02:12:15.796 deploying or not deploying, rather than just simply do I have 02:12:15.828 --> 02:12:18.520 resources that I can turn to. 02:12:20.860 --> 02:12:24.280 So the last thing I would say is, 02:12:27.260 --> 02:12:28.600 on this trigger, 02:12:30.540 --> 02:12:34.540 you may wonder why it was on the list of potential triggers that 02:12:34.580 --> 02:12:37.728 we produced. We never proposed a ten minute delay, 02:12:37.924 --> 02:12:40.540 but the trigger that we, 02:12:41.800 --> 02:12:44.864 that we preferred was a price based trigger, which, 02:12:44.952 --> 02:12:47.300 which would trigger before your short, 02:12:48.080 --> 02:12:51.952 a very small shortage, we thought would. Would not have 02:12:51.976 --> 02:12:55.224 a big distortion. The problem with that is, once we started doing 02:12:55.272 --> 02:12:58.920 simulation, the simulations, the effects of 02:12:58.960 --> 02:13:02.544 waiting until sched goes short became clear. It was 02:13:02.632 --> 02:13:05.290 much larger than. Than my intuition, 02:13:05.710 --> 02:13:09.662 which is why we're now opposed to it. And ERCOT has 02:13:09.686 --> 02:13:12.766 a deployment trigger right now that when it forecasts it can't meet the ramp in 02:13:12.798 --> 02:13:16.222 sched, it will deploy ECRS in concept. And they said this 02:13:16.246 --> 02:13:19.798 in their comments, in concept, that's pretty similar to 02:13:19.814 --> 02:13:23.870 the trigger I would like you to impose in this NPRR, which is 02:13:24.030 --> 02:13:27.838 if SCAD sees five or ten minutes from now that it's going short to 02:13:27.934 --> 02:13:30.462 release the ECRS to avoid the shortage. 02:13:30.646 --> 02:13:34.446 But for some reason, that trigger has not worked 02:13:34.518 --> 02:13:37.774 like we've even this year. We've already incurred over 02:13:37.822 --> 02:13:41.414 half a billion dollars of cost by having sched 02:13:41.462 --> 02:13:45.062 go short and remain short for extended periods of time when 02:13:45.086 --> 02:13:48.382 ECRS is not being released. And I 02:13:48.406 --> 02:13:51.790 can't tell you why that trigger doesn't ensure 02:13:51.870 --> 02:13:55.010 that SCED doesn't go short, but it doesn't. 02:13:55.480 --> 02:13:58.696 And this new trigger, if you move 02:13:58.728 --> 02:14:02.160 it back, basically 15 minutes, so you deploy the ECR 02:14:02.200 --> 02:14:05.500 s before you're short, it'd make a huge 02:14:06.040 --> 02:14:09.640 difference. And if you don't believe you should be, 02:14:09.800 --> 02:14:12.952 if you don't believe you should be deploying ECRS early. 02:14:13.056 --> 02:14:16.544 I don't understand how you can think the next 02:14:16.592 --> 02:14:20.342 NPRR, which would permanently deploy ECRS, is a good idea, 02:14:20.456 --> 02:14:23.978 which ERCOT has supported or has said positive 02:14:24.034 --> 02:14:28.270 things about, because that would make ECRS available 02:14:29.330 --> 02:14:32.786 when it doesn't even look like sched needs it. So what I'm 02:14:32.818 --> 02:14:36.050 proposing is I feel like a much less aggressive 02:14:36.090 --> 02:14:39.970 approach than the next NPRR, which would 02:14:40.010 --> 02:14:43.362 permanently deploy ECRS. So with 02:14:43.386 --> 02:14:46.760 that, I'm going to. I'll wrap up, and I'm happy to take 02:14:46.850 --> 02:14:50.200 questions. Thank you, Dr. Patton. Commissioners, questions? 02:14:50.700 --> 02:14:54.160 Doctor Patton, are you referring to NPRR1232 as the next NPRR? 02:14:54.460 --> 02:14:55.840 Yes. Okay. 02:14:58.860 --> 02:15:02.560 I have a question, and it's for Woody and Dr. Patton. 02:15:03.820 --> 02:15:07.428 ECRS. What percentage of ECRS now is 02:15:07.484 --> 02:15:09.564 batteries going into the system? Woody? 02:15:09.652 --> 02:15:13.132 30%. Okay. And how does that play? If you're moving 02:15:13.196 --> 02:15:16.920 over, like Dr. Patton's notes show, 02:15:16.960 --> 02:15:20.416 and you move it over when it's triggered so that it's 02:15:20.448 --> 02:15:23.980 seen, how does that work? Because if you're turning on a battery, aren't you? 02:15:25.960 --> 02:15:28.020 The charge is now being used. 02:15:30.000 --> 02:15:33.560 Yeah. So this is another confusing part of this equation. 02:15:33.720 --> 02:15:37.056 When you deploy ECRS, it doesn't mean anything's going to turn on. It just 02:15:37.088 --> 02:15:40.898 makes it visible to SCED, and then SCAD makes the economic 02:15:40.994 --> 02:15:44.714 decision, do I want to turn that on or not? And the portion of the 02:15:44.722 --> 02:15:48.298 ECRS that's deployed, that's batteries, probably won't turn on because their offer 02:15:48.354 --> 02:15:52.550 prices tend to be high. The portion of the ECRS that are gas turbines, 02:15:52.890 --> 02:15:57.250 those are the ones that probably will turn on because their 02:15:57.290 --> 02:16:00.882 costs are much, much lower than the batteries. So that's 02:16:00.906 --> 02:16:04.776 why when I talk about deploying ECRS, I skip 02:16:04.938 --> 02:16:08.244 a couple of steps and go straight to, we're going to see some gas turbines 02:16:08.292 --> 02:16:12.560 turn on as a result. Okay. Is that 02:16:13.020 --> 02:16:15.640 in your agreement, too? Yes. Okay. 02:16:18.060 --> 02:16:19.520 I'm totally confused. 02:16:21.860 --> 02:16:25.420 I apologize. But as much as I've known 02:16:25.460 --> 02:16:29.020 and learned about the system, this coming to us at the 02:16:29.060 --> 02:16:32.368 end, I thought I could get my head around 02:16:32.424 --> 02:16:36.456 it. I believe 50% 02:16:36.486 --> 02:16:39.191 of what Woody says and 50% of what you say, 02:16:39.334 --> 02:16:41.299 but I can't reconcile the two. 02:16:43.600 --> 02:16:46.860 I believe Woody and agree with Woody on reliability, 02:16:47.558 --> 02:16:51.136 that the frequency is an issue, we're not connected to other systems, 02:16:51.208 --> 02:16:54.704 that this might be a tool that's needed. Dr. Patton, I don't know 02:16:54.752 --> 02:16:57.992 why it matters to anybody about when batteries 02:16:58.056 --> 02:17:01.549 discharge. Our market is a market, and it's intended to 02:17:01.589 --> 02:17:05.227 discharge when the price is right for that battery and 02:17:05.349 --> 02:17:08.741 or that resource. And I sense 02:17:08.843 --> 02:17:12.261 what we have done, what we've created over time. You all 02:17:12.365 --> 02:17:16.004 please comment on this. It is so damn many 02:17:16.037 --> 02:17:20.021 ancillary services that we've created and we 02:17:20.045 --> 02:17:23.647 pull from them and we don't stand within strict guidelines of them. 02:17:24.308 --> 02:17:28.191 So the market doesn't know we're giving operators flexibility to 02:17:28.216 --> 02:17:31.520 this because of reliability challenges like last Summer, 02:17:31.638 --> 02:17:35.272 which is not this Summer. In terms of temperature, in terms 02:17:35.296 --> 02:17:37.780 of resources, in terms of forced outages. 02:17:38.400 --> 02:17:42.500 And we need to use this ancillary service study 02:17:43.280 --> 02:17:46.848 to define what these markets are for and why they are being 02:17:46.904 --> 02:17:50.959 used. So that's my statement. I have 02:17:51.000 --> 02:17:54.420 no clue where I stand on this. I really don't. 02:17:54.799 --> 02:17:58.446 Can I answer your question? Yeah. Okay. The batteries 02:17:58.598 --> 02:18:01.388 and I, I mean, to be honest, 02:18:01.468 --> 02:18:05.540 I'm not surprised that, that this is why I apologize 02:18:05.606 --> 02:18:08.894 first thing I said when I got up here, because this, this is, this is 02:18:08.902 --> 02:18:10.170 a very difficult issue. 02:18:12.670 --> 02:18:16.302 The batteries are, it's important to think 02:18:16.325 --> 02:18:19.662 about what did we do before ERCOT and why weren't we seeing outages 02:18:19.726 --> 02:18:23.110 and so forth. What happened before ERCOT is these gas turbines 02:18:23.150 --> 02:18:26.814 that are being procured as ERCOT were held by market participants 02:18:26.861 --> 02:18:30.606 who would self commit them as they saw prices go up. So we 02:18:30.638 --> 02:18:34.308 did not see SCAD routinely run out of resources because we relied 02:18:34.350 --> 02:18:37.910 on participants acting in their own best interest to make more 02:18:37.950 --> 02:18:41.118 supply available when the real time market needs it. But now we're buying so much 02:18:41.134 --> 02:18:44.325 of this and sequestering it that that response is 02:18:44.358 --> 02:18:47.558 hindered. And so now we're seeing SCAD start to run out of resources. Now, 02:18:47.574 --> 02:18:52.120 the reason running the batteries is bad from a reliability standpoint is 02:18:52.940 --> 02:18:56.972 if a battery's opportunity costs are $1,000 or $1,500 or 02:18:57.036 --> 02:19:00.276 whatever it is, there is a point in time where 02:19:00.348 --> 02:19:03.876 it's worthwhile to discharge the battery, 02:19:04.066 --> 02:19:07.441 use it up, and then you don't have it anymore because it's really 02:19:07.492 --> 02:19:11.180 needed at that point in time. But that's not what's 02:19:11.218 --> 02:19:15.000 happening here. What's happening here is prices should be $80. 02:19:15.480 --> 02:19:19.200 We shouldn't be running the batteries, but we're printing $1,000 02:19:19.240 --> 02:19:22.799 price or 2000 or 3000 solely because we've let sched 02:19:22.840 --> 02:19:26.672 run out of resources. So we've created the illusion that this is 02:19:26.696 --> 02:19:30.263 a dire circumstance where we should be running the batteries. 02:19:30.392 --> 02:19:32.660 But it's a manufactured. 02:19:33.200 --> 02:19:36.976 Why is the ORDC flat? Because isn't that 02:19:37.008 --> 02:19:40.366 the trigger that's supposed to encourage people to 02:19:40.528 --> 02:19:44.575 put more resources into SCED? Yes, it's flat 02:19:44.634 --> 02:19:48.066 because by our operating procedure, 02:19:48.178 --> 02:19:51.426 we are allowing SCED to run out of resources so 02:19:51.458 --> 02:19:55.030 that the SCED price is shooting up, 02:19:56.130 --> 02:19:59.402 and it's completely out of sync with how many reserves we had. 02:19:59.506 --> 02:20:03.082 See, ORDC can see all of the resources, and it's 02:20:03.106 --> 02:20:06.964 going to, the prices in ORDC are going to go up when we 02:20:07.012 --> 02:20:10.572 are truly running out of resources. SCED can only see what we let 02:20:10.596 --> 02:20:13.788 it see. So SCED can't see the ECRS resources. 02:20:13.844 --> 02:20:17.428 It can't see anything that's offline 02:20:17.564 --> 02:20:20.612 longer than ten minutes. It doesn't even know it's there. 02:20:20.756 --> 02:20:24.716 And so our job should be to allow SCED 02:20:24.748 --> 02:20:28.092 to do its job, to give it resources when it needs resources. And then if 02:20:28.116 --> 02:20:32.166 we start to run out of resources, the ORDC will let prices rise and 02:20:32.238 --> 02:20:36.246 get the market response. That's why I keep calling these 02:20:36.278 --> 02:20:39.742 things artificial shortages, because you look at ORDC and 02:20:39.766 --> 02:20:43.170 ORDC says everything's fine, and SCED says, 02:20:44.190 --> 02:20:48.078 we're about to go into a blackout. Prices are $5,000. 02:20:48.134 --> 02:20:51.850 It's just one of those two is right and one is wrong. 02:20:53.550 --> 02:20:56.930 So I think, I agree with a lot of what's going on here. 02:20:59.390 --> 02:21:03.330 There are things that happen on the system where you need ECRS. 02:21:04.510 --> 02:21:07.166 You need to be able to have it in your pocket as an insurance policy 02:21:07.238 --> 02:21:10.690 to deploy it. It's happened twice in the last two weeks. 02:21:12.390 --> 02:21:16.558 So we had fire at a large plant, 02:21:16.654 --> 02:21:19.930 caused some problems, deployed ECRS. 02:21:20.390 --> 02:21:24.740 We also had a failover problem with the software where 02:21:25.400 --> 02:21:28.460 base points were having problems, and we deployed ECRS. 02:21:28.800 --> 02:21:32.424 And so the basic high level rub 02:21:32.472 --> 02:21:36.456 we have with the IMM is that under what the IMM 02:21:36.488 --> 02:21:39.608 is proposing, we would run without ECRS more 02:21:39.664 --> 02:21:42.584 often. We wouldn't have ECRS. 02:21:42.632 --> 02:21:46.032 We would deploy it more often under your rules than what we have now. 02:21:46.216 --> 02:21:49.472 Now the argument is, it's okay, ERCOT, because you're going to have 02:21:49.496 --> 02:21:53.200 all that stuff on existing resources. But it's not 02:21:53.240 --> 02:21:56.808 all the time. It's most of the time, but not all 02:21:56.824 --> 02:22:00.192 the time. So I don't want to sit here and have 02:22:00.216 --> 02:22:04.296 to explain to the PUC we're going 02:22:04.328 --> 02:22:07.340 into why we went into emergency operations last week, 02:22:09.200 --> 02:22:12.512 and that part of the time, 02:22:12.696 --> 02:22:16.502 that's why we need to keep it. There's a, there's an argument to say 02:22:16.566 --> 02:22:19.918 that any ancillary service that you hold is withholding from 02:22:19.934 --> 02:22:24.606 the market, and yet we withhold responsive reserve regulation 02:22:24.678 --> 02:22:28.542 to some extent. Those are always held in 02:22:28.566 --> 02:22:32.302 reserve, and that's artificial, that's an artificial shortage. That's a, 02:22:32.326 --> 02:22:37.014 that's withholding from the market. And we would count ECRS in that same category. 02:22:37.182 --> 02:22:40.768 Now, 1232 doesn't release all of ECRS. It's only a 02:22:40.784 --> 02:22:44.536 portion of it. So it's not the super aggressive 02:22:44.688 --> 02:22:47.440 dump it all out into the market that we agreed to, it's only a portion 02:22:47.480 --> 02:22:50.952 of it. And so to characterize it as all of ECRS, 02:22:51.056 --> 02:22:54.816 that's not correct either. So. But that's the. I think 02:22:54.888 --> 02:22:59.160 at the highest level, it's ECRS 02:22:59.200 --> 02:23:03.256 is a reliability tool. We need to keep it as 02:23:03.448 --> 02:23:07.926 there's a point where it makes sense to 02:23:07.998 --> 02:23:11.814 cash it in for reliability, for more resources. 02:23:11.982 --> 02:23:15.806 But the point is different between what the IMM is suggesting 02:23:15.838 --> 02:23:18.942 and what we are. We want to hold on to it longer and use it 02:23:18.966 --> 02:23:22.102 longer. And the IMM argument is you really don't 02:23:22.126 --> 02:23:26.262 need to hold on to it that long. You can rely on the market to 02:23:26.286 --> 02:23:29.750 provide that. Just real quick, let's try to just constrain our comments to 02:23:29.830 --> 02:23:32.744 this NPRR and not talk about things that are in front of us, if you 02:23:32.752 --> 02:23:36.304 may ask. And I don't want to get into just this endless point counterpoint 02:23:36.352 --> 02:23:39.872 here. I still want to hear from Staff, and then we 02:23:39.896 --> 02:23:43.232 still need to discuss, so. (item:18:Dr. David Patton's additional thoughts on ECRS) Can I just 02:23:43.296 --> 02:23:46.500 connect the dots between what he said and what I said briefly, please? 02:23:48.840 --> 02:23:52.216 It's virtually the case that you have these reserves all the 02:23:52.248 --> 02:23:55.432 time after you deploy them. And that's the 02:23:55.456 --> 02:23:58.798 part that's confusing. There's no way you lose them. 02:23:58.934 --> 02:24:02.302 The worst case scenario is you 02:24:02.326 --> 02:24:05.990 turn on gas turbines and you ramp down one slow ramping 02:24:06.030 --> 02:24:10.166 steam unit, and it takes longer than ten minutes to get those megawatts 02:24:10.198 --> 02:24:13.566 when you need them. But the point of the analysis we 02:24:13.598 --> 02:24:16.890 provided you is that never happens. 02:24:17.710 --> 02:24:21.518 We have many marginal units that will turn down, so you 02:24:21.534 --> 02:24:24.858 can get those resources within ten minutes. And the resources that are 02:24:24.874 --> 02:24:28.722 ramping down are combined cycles, gas turbines and 02:24:28.786 --> 02:24:32.274 batteries. So I would say I 02:24:32.282 --> 02:24:35.650 would be surprised if we could find any instances where we've lost 02:24:35.690 --> 02:24:38.970 the reserves because we've deployed them. And I think that's a 02:24:39.010 --> 02:24:42.538 super important part of your thought process when 02:24:42.554 --> 02:24:46.442 you think about should we allow for these resources 02:24:46.506 --> 02:24:51.004 not to be deployed, because they will still be there. They'll be more valuable 02:24:51.172 --> 02:24:54.316 to respond to every of the contingencies that Woody listed than 02:24:54.348 --> 02:24:58.120 they are sitting offline in the form of gas turbines. 02:24:58.500 --> 02:25:01.240 You don't lose the reserve, you may lose the capability. 02:25:03.860 --> 02:25:06.480 There's a difference. Other questions of Dr. Patton? 02:25:08.740 --> 02:25:11.548 Just an observation. You know, 02:25:11.684 --> 02:25:15.116 there's this issue with, as both of you all are highlighting, 02:25:15.148 --> 02:25:18.604 you know, all ancillary services are reserving capacity out of the market. 02:25:18.652 --> 02:25:21.628 Right. And I know, you'd want to get into things that are not before us, 02:25:21.644 --> 02:25:24.844 but I'm just wondering, we're talking about ECRS today, and in the future, 02:25:24.892 --> 02:25:28.600 we're going to have DRRS even more capacity held out of the market. 02:25:29.020 --> 02:25:32.892 So are we going to be back here in, you know, another year 02:25:32.916 --> 02:25:36.972 or year and a half, whenever that is, and be having the same discussion? 02:25:37.076 --> 02:25:40.892 So back to Commissioner Glotfelty. His broader point is we 02:25:40.916 --> 02:25:44.794 really need to get to a place through the ancillary service study 02:25:44.962 --> 02:25:48.978 and obviously with the ultimate implementation of RTC. 02:25:49.154 --> 02:25:52.842 But in the meantime, to start really thinking about, you know, 02:25:52.986 --> 02:25:56.530 what are the triggers for deploying all of the ancillary services 02:25:56.610 --> 02:26:00.202 and have a real clear map going forward, because it 02:26:00.226 --> 02:26:04.310 sounds like as we stack on more ancillaries, 02:26:05.170 --> 02:26:08.670 that we're going to end up in the same conundrum, 02:26:09.140 --> 02:26:12.716 potentially. And I know we want to hear from 02:26:12.748 --> 02:26:15.244 Staff, but could you expound a little bit more on what you just said? 02:26:15.292 --> 02:26:19.004 Which was you're not losing capacity, but you're losing capability? 02:26:19.172 --> 02:26:22.000 Yeah. I mean, if you, when you deploy ECRS 02:26:22.580 --> 02:26:26.000 the amount of capacity that you have is the same. 02:26:26.860 --> 02:26:30.068 You were holding it, now you let it go. The total amount of capacity is 02:26:30.084 --> 02:26:33.436 the same. But what you may be giving up is 02:26:33.468 --> 02:26:37.736 the ten minute ramp that ERCOT comes with a guarantee that 02:26:37.768 --> 02:26:41.112 it is ten minute rampable when you release it 02:26:41.136 --> 02:26:43.340 into the wild, into the, into the market. 02:26:44.520 --> 02:26:47.992 It resides in other places. It resides on units that 02:26:48.016 --> 02:26:51.824 may not ramp in ten minutes. And there may be some combination 02:26:51.992 --> 02:26:55.392 out there that means that you've lost the capability that 02:26:55.416 --> 02:26:58.896 you wanted to buy. We buy it for the capability, 02:26:59.088 --> 02:27:02.624 not for the capacity. And so why is that capability so important 02:27:02.752 --> 02:27:06.456 in the environment that we have today, which is the 02:27:06.528 --> 02:27:10.224 resource mix that you talked about? Well, I mean, it's forced outages, 02:27:10.312 --> 02:27:13.928 large force outages for ramp problems 02:27:13.984 --> 02:27:16.880 when you have wind or solar ramps that don't occur when you expect. So, 02:27:16.920 --> 02:27:20.840 things like that, when you need to respond quickly with some capacity. You can't rely 02:27:20.920 --> 02:27:24.424 on a slow ramping capacity that 02:27:24.472 --> 02:27:28.408 lives out on some units. You need to rely on fast 02:27:28.464 --> 02:27:30.768 ramping ERCOT capable, 02:27:30.864 --> 02:27:34.688 qualified capacity. And by keeping it longer, 02:27:34.744 --> 02:27:37.340 you maintain that guarantee that you have that. 02:27:38.400 --> 02:27:42.096 But isn't just releasing it, it allows it to just be there 02:27:42.128 --> 02:27:44.180 when you need it, not actually deploy it, 02:27:46.920 --> 02:27:49.740 but reserves. I mean, it may actually run. 02:27:50.560 --> 02:27:54.072 So the ECRS capacity with that capability may 02:27:54.096 --> 02:27:58.080 actually start running and the reserves that it 02:27:58.120 --> 02:28:00.660 displaces move to slower moving units. 02:28:03.120 --> 02:28:06.400 Now, I would agree with the IMM that in a lot of cases that 02:28:06.440 --> 02:28:10.544 doesn't occur. In a lot of cases, you have high priced batteries that sit there 02:28:10.712 --> 02:28:14.460 and provide that ten minute capability, and that's great. 02:28:15.200 --> 02:28:18.804 But I'm concerned, and I think all of our concerned, 02:28:18.852 --> 02:28:22.396 that it's not true all the time. And the 02:28:22.428 --> 02:28:25.732 times when it's not true are the ones that will burn us, 02:28:25.796 --> 02:28:29.532 potentially. And that's the reason we 02:28:29.556 --> 02:28:32.572 would like to hold onto it longer. Not all the time, 02:28:32.636 --> 02:28:36.204 but hold on to it longer. And like I 02:28:36.212 --> 02:28:39.012 said, there are a lot of improvements that we can make. We can use our 02:28:39.036 --> 02:28:43.316 triggers more effectively. We can not 02:28:43.388 --> 02:28:47.536 have the problems we had last year, but there is a fundamental 02:28:47.568 --> 02:28:50.420 disagreement here on how we're doing this. 02:28:52.840 --> 02:28:56.216 So David, I just want to walk through your comments. Just a thought exercise 02:28:56.248 --> 02:28:59.488 just real quickly. So one of the things you talk about is, you know, 02:28:59.504 --> 02:29:03.648 one of the justifications for this is the reduction in your own numbers from 12.5 02:29:03.704 --> 02:29:06.680 billion down to 5.7 if this had been in place last year. 02:29:06.800 --> 02:29:10.636 And I think on the previous page you talk about you ran last year 02:29:10.728 --> 02:29:14.548 with the new deployment trigger with $100 02:29:14.644 --> 02:29:18.380 offer floor, and that got you down to 3.6 billion. 02:29:18.420 --> 02:29:22.100 Is that all correct? And so you have a statement here that you say, 02:29:22.180 --> 02:29:25.324 we shouldn't do this simply that that is a dubious exercise 02:29:25.372 --> 02:29:28.560 and we shouldn't do that simply because it's a perceived improvement. 02:29:29.540 --> 02:29:33.348 If we had had costs that were either 5.7 02:29:33.404 --> 02:29:37.192 or 3.6 billion, compared to 12.5, 02:29:37.356 --> 02:29:39.940 that's a perceived. That's not an actual improvement? 02:29:41.720 --> 02:29:46.272 Yeah, I've been searching for the right analogy. It's like your 02:29:46.296 --> 02:29:49.672 house is on fire, so you put some water in it, now your kitchen's 02:29:49.696 --> 02:29:53.040 on fire. And so you say, well, this is a big improvement, so we'll stop 02:29:53.080 --> 02:29:56.392 at that. You know, we'll be happy with that. 02:29:56.536 --> 02:29:59.320 Well, no, I mean, you should put the fire out in your kitchen, 02:29:59.360 --> 02:30:03.032 too. If I can't think 02:30:03.056 --> 02:30:07.368 of a market dysfunction that is produced a $3.6 billion 02:30:07.544 --> 02:30:11.072 inefficiency in any market, I mean, 02:30:11.096 --> 02:30:14.960 I could be overlooking something. But if all we ever saw in this 02:30:15.000 --> 02:30:19.912 market was a $3.6 billion artificial set 02:30:19.936 --> 02:30:23.540 of prices, we would have said, this is horrible. 02:30:23.960 --> 02:30:27.400 And so, I mean, the only reason anybody thinks that's an improvement 02:30:27.440 --> 02:30:30.828 is because last year was so much worse. 02:30:30.944 --> 02:30:34.964 And. But it's not hard to drive the 3.6 02:30:35.012 --> 02:30:38.268 down to zero. We just have to make the resources 02:30:38.324 --> 02:30:42.028 available. And I do think it's important to say 02:30:42.124 --> 02:30:46.200 we have analysis in the rebuttal comments to ERCOT showing that 02:30:47.340 --> 02:30:51.116 the megawatts that you've deployed are there and are more 02:30:51.148 --> 02:30:55.052 available to the system to respond to every contingency that ERCOT 02:30:55.076 --> 02:30:58.490 is worried about. He says he wants to guarantee it will be there in ten 02:30:58.530 --> 02:31:01.786 minutes. But if you turn on a turbine and distribute 02:31:01.898 --> 02:31:05.162 those megawatts among combined cycles, turbines and 02:31:05.186 --> 02:31:08.714 batteries, you're going to be able to get that ten minute capability 02:31:08.802 --> 02:31:12.314 in two minutes. There's only 02:31:12.362 --> 02:31:16.002 one scenario where it may not be there, where it all shows up 02:31:16.026 --> 02:31:19.250 on an old steam unit, like a single steam 02:31:19.290 --> 02:31:22.480 unit, and then maybe it'll take 15 minutes to get it, rather than ten minutes 02:31:22.530 --> 02:31:25.000 to get it, but that just doesn't happen. 02:31:28.220 --> 02:31:31.772 So I would say, from a reliability perspective, there's no argument 02:31:31.836 --> 02:31:35.800 for delaying the deployment of ECRS. 02:31:36.220 --> 02:31:39.836 And if you don't delay the deployment and 02:31:39.868 --> 02:31:43.516 let sched go into shortage, that's where the $3 billion are 02:31:43.548 --> 02:31:48.026 coming from, is the price spikes that SCAD is 02:31:48.148 --> 02:31:51.230 producing, that the ORDC is not producing, 02:31:51.350 --> 02:31:54.886 or sched thinks it's short, but you're not actually short. 02:31:54.958 --> 02:31:58.814 And so the way to drive that to zero is to 02:31:58.862 --> 02:32:03.246 deploy the ERCOT more further 02:32:03.318 --> 02:32:06.974 ahead of time. Is it fair to say, in that analysis, 02:32:07.022 --> 02:32:10.758 if you had run last year with the new deployment trigger, 02:32:10.854 --> 02:32:14.392 but with an offer of zero instead of 100, it would even be less 02:32:14.416 --> 02:32:16.020 than $3.6 billion? 02:32:19.200 --> 02:32:22.400 It would be less, but I suspect 02:32:22.440 --> 02:32:24.960 it would probably just go down to, like, 3 billion, 02:32:25.040 --> 02:32:28.880 because the impact of $100, 02:32:28.960 --> 02:32:33.300 when conditions are tight and prices would probably otherwise be $70, 02:32:33.720 --> 02:32:36.872 that impact is probably a pretty small share of 02:32:36.896 --> 02:32:40.212 the $3.6 billion. So, just to recap, 02:32:40.316 --> 02:32:43.480 it would have gone potentially from 12.5 down to three 02:32:43.780 --> 02:32:47.260 last year. Yeah. Okay. And are those 02:32:47.300 --> 02:32:51.156 real dollars paid for by consumers, or are those wholesale 02:32:51.188 --> 02:32:54.628 market? I mean, where do they kind of reside in this wholesale retail 02:32:54.764 --> 02:32:58.680 picture? That's a great question, because there's been a lot of 02:32:59.500 --> 02:33:01.400 misreporting of this number. 02:33:04.990 --> 02:33:08.110 You know, are consumers going to pay that cost this year? 02:33:08.270 --> 02:33:11.810 No, they'll pay part of it. So the 02:33:12.750 --> 02:33:16.382 settlements that are happening through the ERCOT markets are going to generate 02:33:16.486 --> 02:33:20.462 real cost immediately. But if you think about how 02:33:20.486 --> 02:33:24.250 we're serving customers, we have retail 02:33:24.870 --> 02:33:28.326 LSEs that are serving most of our customers, and they're 02:33:28.358 --> 02:33:31.924 contracting for electricity forward. 02:33:32.092 --> 02:33:35.120 They don't want to just be buying in the spot market for the most part. 02:33:35.620 --> 02:33:39.508 And if you look at what happened to the forward prices, they doubled for 02:33:39.524 --> 02:33:42.460 the next two summers. Once you got into, like, 02:33:42.500 --> 02:33:46.520 July and August, and people saw these price spikes being caused by this problem. 02:33:47.060 --> 02:33:50.188 All of the forward prices skyrocketed. 02:33:50.324 --> 02:33:52.600 So the customers, 02:33:53.300 --> 02:33:57.062 they're not going to bear it contemporaneously. But their 02:33:57.126 --> 02:34:01.022 rates, when the LSEs have to sign new 02:34:01.046 --> 02:34:04.182 bilateral contracts, are all going to be much, much higher 02:34:04.366 --> 02:34:07.662 because those forward prices are all triggered based on the 02:34:07.686 --> 02:34:11.270 spot prices in ERCOT. So it's hard to say how much of this 02:34:11.310 --> 02:34:14.542 cost would eventually arrive on consumers. But the longer the 02:34:14.566 --> 02:34:18.210 problem goes on, the larger the share of the costs 02:34:18.510 --> 02:34:22.332 hit Texas consumers. And that's even with the addition of 02:34:22.526 --> 02:34:25.568 ten gigawatts of batteries and solar. I mean, 02:34:25.704 --> 02:34:29.820 that's where I have this one disconnect. And that is if 02:34:31.080 --> 02:34:34.544 I get that. So, like, if you're in a fixed price 02:34:34.592 --> 02:34:37.968 contract, if your rep, they're going to go procure power in 02:34:37.984 --> 02:34:40.820 a fixed price, you know, PPA, 02:34:44.440 --> 02:34:47.448 that's not going to deviate, and their price to the consumer is not going to 02:34:47.464 --> 02:34:51.200 deviate during that year. But what you're saying is, well, when that contract runs 02:34:51.240 --> 02:34:54.992 out, if you continue to show these higher costs 02:34:55.016 --> 02:34:58.500 in the market, they're going to be included in the next contract price. 02:34:59.560 --> 02:35:02.872 But that's assuming that's everything static, is that right? I mean, 02:35:02.896 --> 02:35:06.104 that's where. So if we're adding all of these 02:35:06.152 --> 02:35:10.512 resources, we should be driving down the price in 02:35:10.536 --> 02:35:14.208 those out years. And totally agree with you. Historically, that would 02:35:14.224 --> 02:35:17.506 be right if it took two years, 18 months to 24 02:35:17.538 --> 02:35:20.738 months to build a gas turbine. But these plants are coming 02:35:20.794 --> 02:35:24.506 on in six months. So I'm 02:35:24.538 --> 02:35:27.594 just wondering, you know, as these contracts go out further and further, 02:35:27.762 --> 02:35:31.190 is it realistic to think that they're actually going to see that same thing? 02:35:31.970 --> 02:35:35.778 Yeah, so that. So the way the forward prices are 02:35:35.794 --> 02:35:39.554 going to move is they're going to be based on expectations, and expectations are 02:35:39.562 --> 02:35:43.182 going to be driven by what people just saw, which is the 02:35:43.206 --> 02:35:46.918 volatile prices. And we're still seeing some of those volatile prices in 2024. 02:35:46.974 --> 02:35:49.450 But conditions are milder, so not as much. 02:35:50.710 --> 02:35:54.478 And the expectations are going to be informed by the new resources coming in. 02:35:54.654 --> 02:35:58.102 Where a problem like this really affects the 02:35:58.126 --> 02:36:02.126 performance of the market is when things get tight. And it's important 02:36:02.278 --> 02:36:05.850 to utilize your resources, all of your resources, 02:36:06.550 --> 02:36:10.096 to avoid, you know, price volatility. Then it. 02:36:10.128 --> 02:36:14.660 Then it really hits you now with the solar coming in and 02:36:15.720 --> 02:36:18.784 not having, whatever, 90 days of 02:36:18.832 --> 02:36:22.380 over 100 temperatures and more batteries, 02:36:22.800 --> 02:36:25.440 we're going to have a little bit of surplus and we're not going to see 02:36:25.480 --> 02:36:29.968 conditions where it becomes critical to 02:36:30.024 --> 02:36:33.328 use every megawatt you have. And sked is not going to 02:36:33.344 --> 02:36:37.038 run out of resources nearly as often. So the problem with 02:36:37.054 --> 02:36:40.510 this NPRR will diminish, I believe, 02:36:40.590 --> 02:36:44.010 except if we see, like really unusual weather conditions. 02:36:46.270 --> 02:36:49.886 But that is not to say we shouldn't plan 02:36:49.918 --> 02:36:53.526 to operate the system in a way that when we do get into conditions like 02:36:53.558 --> 02:36:57.010 this, we don't see costs spike and prices spike. 02:36:58.510 --> 02:37:02.080 Those forward prices are also going to be driven by the load. 02:37:02.580 --> 02:37:05.844 I mean, the tremendous load growth that has started being 02:37:05.892 --> 02:37:09.052 reported in the last six, eight months, it's got to have a big factor 02:37:09.076 --> 02:37:12.668 in what those forward prices are. And so that may move you in 02:37:12.684 --> 02:37:16.028 the other direction. If that load growth eats up 02:37:16.044 --> 02:37:19.564 a lot of the growth that we're seeing in solar that serves the peak, 02:37:19.612 --> 02:37:23.732 then we could be back into situations where the 02:37:23.756 --> 02:37:27.092 deployment makes a much bigger difference. Just, it's very, 02:37:27.196 --> 02:37:30.388 it's highly uncertain, you know, this, what the costs 02:37:30.404 --> 02:37:33.828 are likely to be. That's one of my nervousness about the scenarios. 02:37:33.884 --> 02:37:37.172 You were asking me about where we were looking at 2023, 02:37:37.236 --> 02:37:40.860 like what we may actually see in 2025, 02:37:40.980 --> 02:37:42.520 if you approve this is, 02:37:44.540 --> 02:37:47.160 I'd have a hard time telling you what that number may be. 02:37:47.500 --> 02:37:51.436 So I don't want people to bank on the 02:37:51.468 --> 02:37:55.686 analysis of 2023 and as 02:37:55.718 --> 02:37:59.670 if there's some certainty around those costs. Because your 02:37:59.710 --> 02:38:03.398 number is not actually what it was to procure ECRS, it was 02:38:03.494 --> 02:38:06.742 what it did to the market, correct? Which is why your numbers were 02:38:06.766 --> 02:38:10.310 always two different numbers. Yeah. So we spent $600 02:38:10.350 --> 02:38:12.250 million to buy ECRS 02:38:13.590 --> 02:38:17.286 and then there was the effect on the deployment decisions on 02:38:17.318 --> 02:38:21.380 the energy price. So. Yeah, two different buckets 02:38:21.420 --> 02:38:24.908 of cost. So Dr. Patton, your combined cost then comes 02:38:24.964 --> 02:38:28.676 from not only the procurement of the ECRS, the $600 million. 02:38:28.868 --> 02:38:32.480 But as you spend $600 million and 02:38:32.940 --> 02:38:36.300 you have more power reserved in ancillary 02:38:36.340 --> 02:38:40.348 services, including ECRS. That creates higher 02:38:40.404 --> 02:38:43.944 energy prices. So now the opportunity costs 02:38:44.012 --> 02:38:47.752 that you lose or the opportunity cost of not being available 02:38:47.816 --> 02:38:51.128 to the real time market causes ancillary service prices 02:38:51.184 --> 02:38:54.648 to go up. So, right? Because you're going to pay, 02:38:54.704 --> 02:38:58.448 or maybe pay more for ancillaries because the opportunity cost 02:38:58.504 --> 02:39:01.984 is now higher because the energy prices are higher. So that's how you came up 02:39:01.992 --> 02:39:05.912 with your combined. Yes, I didn't 02:39:06.016 --> 02:39:09.858 cost impact. My numbers aren't combined, they're simply the, 02:39:10.024 --> 02:39:13.702 the energy impacts. So I don't include the 02:39:13.726 --> 02:39:14.810 600 million. 02:39:16.670 --> 02:39:19.838 But you're right. I mean, the ancillary service study is going to be 02:39:19.854 --> 02:39:23.022 really important. We've developed a probabilistic model to 02:39:23.046 --> 02:39:26.342 try to quantify based on the risks that are being managed on the 02:39:26.366 --> 02:39:29.158 system, how much of this do we really need? And I think we're going to 02:39:29.174 --> 02:39:32.930 come to a conclusion that we need less than what's currently being procured. 02:39:33.870 --> 02:39:35.610 And as you procure less, 02:39:37.890 --> 02:39:41.338 and that's based upon what? That you think we're going to have 02:39:41.354 --> 02:39:44.650 to procure less. That's based on a probabilistic 02:39:44.690 --> 02:39:48.870 analysis of all of the issues 02:39:49.250 --> 02:39:53.750 that create reliability risks, contingencies, forced outages on the system, 02:39:54.130 --> 02:39:57.906 forecast errors for wind, for solar, forecast errors for 02:39:57.938 --> 02:40:01.346 load. It puts all those things together and then 02:40:01.378 --> 02:40:03.110 says, you know, 02:40:05.770 --> 02:40:09.858 how much reserve do we need to procure to meet a reliability requirement 02:40:09.914 --> 02:40:12.590 like the one that you all are considering? 02:40:13.730 --> 02:40:17.082 But you're right. As you buy more, the price for 02:40:17.106 --> 02:40:21.866 that reserve product will go up exponentially because there 02:40:21.898 --> 02:40:25.394 aren't a lot of suppliers who are capable of providing 02:40:25.442 --> 02:40:29.098 it. And as that pool of resources gets tighter and 02:40:29.114 --> 02:40:32.456 tighter, the price goes up sharply, which is why we 02:40:32.488 --> 02:40:36.160 paid 600 million much higher than what most RTO's are paying 02:40:36.200 --> 02:40:39.552 for their ten minute reserves. But then the consequence 02:40:39.576 --> 02:40:43.000 of that is we have more resources being held out of the energy market, 02:40:43.080 --> 02:40:46.952 and that's really what we're more concerned about and what this NPRR is 02:40:47.016 --> 02:40:50.860 focused on. Okay. Harika thank you for waiting patiently 02:40:51.240 --> 02:40:53.832 through this. Why don't you go ahead and lay out the memo that you all 02:40:53.856 --> 02:40:59.294 filed earlier this week? (item:18:Commission Staff's Harika Basaran lays out Staff's memo, NPRR1224) Harika Basaran from Staff. so 02:40:59.382 --> 02:41:03.222 I just want to first go over the process and Staff understanding. 02:41:03.326 --> 02:41:06.250 So ECRS was implemented last Summer, 02:41:06.590 --> 02:41:09.918 then IMM raised. Harika, would you speak into the microphone a little more? Thank you. 02:41:09.974 --> 02:41:13.862 Then IMM raised significant concerns and then stakeholders. 02:41:13.926 --> 02:41:18.050 Staff, ERCOT. This issue was discussed. 02:41:18.470 --> 02:41:23.064 Our understanding when we talk with IMM and ERCOT was 02:41:23.152 --> 02:41:26.416 there were three solutions based on the time to take to 02:41:26.448 --> 02:41:30.160 implement them. One of them really, I think IMM's preferred 02:41:30.200 --> 02:41:33.856 solution was, like David said. Long term, revisit the whole 02:41:33.888 --> 02:41:37.728 methodology, the quantity of that $600 million. 02:41:37.864 --> 02:41:41.288 But however, ERCOT did not agree to that. But I think at 02:41:41.304 --> 02:41:44.496 the end, parties agreed that let's take this up 02:41:44.528 --> 02:41:48.322 under as study, which we will. Another tool, solutions, 02:41:48.426 --> 02:41:52.002 again provided by IMM was as 02:41:52.026 --> 02:41:55.626 an idea concept, a medium term solution, 02:41:55.698 --> 02:41:59.610 maybe a standing deployment of ECRS in SCAD 02:41:59.650 --> 02:42:03.098 all the time with an overflow. But this could have system 02:42:03.154 --> 02:42:06.682 changes at that time when this was discussed by ERCOT or by the 02:42:06.706 --> 02:42:10.074 cuisis. In the short term, I think ERCOT 02:42:10.122 --> 02:42:14.188 agreed to explore further. IMM's proposal 02:42:14.244 --> 02:42:17.600 was release portion of it based on under generation. 02:42:18.220 --> 02:42:22.052 So then ERCOT agreed to explore those solutions and 02:42:22.076 --> 02:42:26.180 then they submitted NPRR1224. And when they submitted it. 02:42:26.300 --> 02:42:30.124 There was no overflow and the trigger was 30 megawatt. 02:42:30.172 --> 02:42:34.332 And ten minutes in the stakeholders 02:42:34.396 --> 02:42:38.372 process, the 30 megawatt was increased 02:42:38.396 --> 02:42:42.436 to 40. And then floor added thousand. 02:42:42.628 --> 02:42:46.236 And that new addition of the floor really changed the whole discussions. 02:42:46.308 --> 02:42:49.556 Like all what we are discussing here about the trigger, I think that 02:42:49.588 --> 02:42:52.440 got lost. The focus became more on the floors. 02:42:56.100 --> 02:42:59.364 So Staff's position is on the 02:42:59.412 --> 02:43:02.588 trigger. We did not hear much discussion 02:43:02.644 --> 02:43:06.798 or objections to that trigger in the stakeholders process. 02:43:06.934 --> 02:43:09.490 Except IMM. I may be wrong, but. 02:43:09.790 --> 02:43:13.902 And on that one, we really wanted the first ERCOT and the stakeholders, 02:43:14.086 --> 02:43:17.838 if it was acceptable for them. So ERCOT gets more experience 02:43:17.934 --> 02:43:22.030 with ECRS and then they can adjust it like incremental improvements. 02:43:22.190 --> 02:43:25.622 So that's what we want Commission to balance reliability 02:43:25.686 --> 02:43:29.382 needs ERCOT Woody says with economics. However, on the 02:43:29.406 --> 02:43:33.224 offer floor, we don't think any floor is necessary. 02:43:33.312 --> 02:43:37.300 That was not one of the concepts at the origin. 02:43:37.640 --> 02:43:41.860 And we think ORDC should take care of the scarcity. 02:43:42.480 --> 02:43:45.896 And also we lots of 02:43:46.048 --> 02:43:50.544 estimation were based ASDCs demand curves under RTC. 02:43:50.712 --> 02:43:54.336 However, we think that if you can take only one part of 02:43:54.488 --> 02:43:57.690 RTC as if it's in effect which the, you know, 02:43:57.770 --> 02:44:01.266 value of the reserves, but you don't look the efficiencies it will bring. 02:44:01.378 --> 02:44:04.794 It's not really one sided. So that's why we have problems with that 02:44:04.842 --> 02:44:08.082 approach. And we 02:44:08.106 --> 02:44:11.906 also think that ORDC was adjusted again with the floors regarding 02:44:11.938 --> 02:44:15.906 the bridge solution. So it was made really to add more revenue 02:44:16.058 --> 02:44:19.018 to the system. And it's going to be in effect all this summer. So there 02:44:19.034 --> 02:44:22.456 is another tool already there. So we did it on the think 02:44:22.488 --> 02:44:26.620 any floor is necessary. So staff preferred option is 02:44:27.360 --> 02:44:31.032 just implement the trigger without any overflows. So it can be 02:44:31.056 --> 02:44:34.920 implemented as soon as possible. The provided option 02:44:34.960 --> 02:44:38.712 too, if you want. Not preferred option, but if 02:44:38.736 --> 02:44:42.200 there is a floor, it will be between nonspin 75 and RAC. That was 02:44:42.240 --> 02:44:45.648 brought up in the stakeholder discussions as well. So that's why I 02:44:45.664 --> 02:44:49.194 am making it. And then I don't want 02:44:49.202 --> 02:44:52.110 to talk about the next NPRR. You don't want to discuss that? Okay. 02:44:53.490 --> 02:44:57.218 That's all I have. (item:18:Chairman Gleeson's thoughts on Commission Staff's memo) So Harika, in my discussions with 02:44:57.234 --> 02:45:01.670 ERCOT, they would like to see this done by August 1. 02:45:02.370 --> 02:45:05.030 That's a date that's important to them. 02:45:05.370 --> 02:45:09.762 So why, why not just reject this NPRR 02:45:09.906 --> 02:45:13.820 and just tell them that we think it's appropriate to use that 02:45:13.860 --> 02:45:17.100 trigger so that they can meet their date. If you're, 02:45:17.140 --> 02:45:20.548 if you don't think the floor is appropriate. That brings us the 02:45:20.564 --> 02:45:23.732 same solution, so we are okay. Yeah. If that's the will of the 02:45:23.756 --> 02:45:27.044 Commission. Woody, could you implement this without the NPRR, 02:45:27.092 --> 02:45:30.268 with that kind of guidance from the, from the dais? 02:45:30.364 --> 02:45:33.480 Yes. Any questions of Harika? 02:45:35.980 --> 02:45:38.800 Okay. All right, thanks, y'all. Appreciate it. 02:45:44.270 --> 02:45:47.694 So, as they step away, I'm going to talk a little bit about 02:45:47.742 --> 02:45:51.478 process. The process for this NPRR 02:45:51.614 --> 02:45:55.062 did not work for me at all. So I know this 02:45:55.086 --> 02:45:59.790 came up under NPRR1186. Where Commissioners 02:45:59.830 --> 02:46:03.382 at the time felt that a lot of information came in post 02:46:03.446 --> 02:46:06.942 board decision. I would argue that some of the most pertinent 02:46:07.006 --> 02:46:09.570 information I heard came in post board decision. 02:46:09.870 --> 02:46:12.918 And I don't know how Commissioner Cobos feels as a 02:46:12.934 --> 02:46:16.182 Board Member. But as the Chair of this Commission and a Board Member, 02:46:16.366 --> 02:46:20.102 that doesn't work for me. I need to have all the information 02:46:20.246 --> 02:46:24.182 that I can have at the Board. Because I think it is important for me 02:46:24.326 --> 02:46:27.662 to be able to tell the Board what I think so that 02:46:27.686 --> 02:46:31.054 if they pass something they know well, perhaps it 02:46:31.102 --> 02:46:33.530 may get rejected at the PUC. 02:46:34.110 --> 02:46:37.970 I didn't have all the information. Not one of us said a word 02:46:38.390 --> 02:46:41.198 about this NPRR in the Board Meeting, 02:46:41.334 --> 02:46:45.718 except for Courtney as the OPUC. And I 02:46:45.734 --> 02:46:49.278 think, for me, that does a disservice to the board process. If I 02:46:49.294 --> 02:46:52.982 were them, I would be upset if we don't approve this 02:46:53.046 --> 02:46:57.416 today. And I don't think we're solving for what 02:46:57.448 --> 02:47:01.152 the Board, how the Board feels necessarily. But I think 02:47:01.176 --> 02:47:04.672 it is important for me to make sure I have full information when 02:47:04.696 --> 02:47:08.856 I go to that Board Meeting. So I've talked to Connie, I've talked to ERCOT. 02:47:08.928 --> 02:47:12.280 I've talked to some stakeholders. We have got to figure this out, 02:47:12.360 --> 02:47:15.632 because in the last two weeks, I've heard the one thing that's 02:47:15.656 --> 02:47:19.072 been consistent from everyone is there are parts of this process, 02:47:19.176 --> 02:47:23.152 from a protocol getting sponsored or revision getting sponsored, 02:47:23.256 --> 02:47:26.744 to the day we adopt, reject or remand. 02:47:26.872 --> 02:47:28.620 That doesn't work for someone. 02:47:29.600 --> 02:47:33.200 So I don't know what you all feel about 02:47:33.240 --> 02:47:37.136 how this worked, but if I had had the information I have today 02:47:37.328 --> 02:47:40.456 at the Board last month. I would have said some things 02:47:40.568 --> 02:47:44.512 in response to what was before the Board, and I 02:47:44.536 --> 02:47:48.320 need that going forward. So I've asked Connie to engage with everyone, 02:47:48.400 --> 02:47:51.962 with stakeholders, with ERCOT, with the ERCOT board, 02:47:52.106 --> 02:47:55.562 with us. We've got to figure out a way to fix this because this is 02:47:55.586 --> 02:47:59.106 not working for me. And what I'm really concerned about is I've started 02:47:59.138 --> 02:48:02.866 to hear some rumblings. That there's concerns 02:48:02.898 --> 02:48:06.498 about the way RTC is being done. And 02:48:06.594 --> 02:48:11.010 we have held RTC up as the panacea 02:48:11.050 --> 02:48:14.386 that is going to save us from so many things. We have got to get 02:48:14.418 --> 02:48:18.308 that right. We've got it. Whatever that looks like, it has got to be right. 02:48:18.484 --> 02:48:22.124 And if we're here in 2026 and we're in the exact same 02:48:22.172 --> 02:48:25.548 spot on any part of RTC, that's going to be a 02:48:25.564 --> 02:48:28.972 failure, in my view. So I don't know what it looks like. 02:48:29.076 --> 02:48:32.420 I'm asking everyone in this audience to help us figure this 02:48:32.460 --> 02:48:35.044 out, because I've heard from a lot of you that I'm looking at right now 02:48:35.132 --> 02:48:38.880 that there are parts of this that don't work. I've heard zero solutions. 02:48:39.180 --> 02:48:43.218 So if you're going to come and say there's a problem, I need thoughts 02:48:43.274 --> 02:48:46.786 on how to fix it. And again, we're not solving for giving people what 02:48:46.818 --> 02:48:50.770 they want. We're solving to give everyone an opportunity to have full information 02:48:50.930 --> 02:48:54.522 and have a voice in this process so the Board and the Commission 02:48:54.666 --> 02:48:57.634 can make a proper decision. So, 02:48:57.802 --> 02:49:01.178 you know. With that, I will say where the reason I 02:49:01.194 --> 02:49:04.290 didn't file a memo on this is. Because, honest to God, until yesterday, 02:49:04.330 --> 02:49:07.590 I didn't really know where I, where I sat on it. 02:49:08.550 --> 02:49:12.382 Based on this conversation, you know, I would say a 02:49:12.406 --> 02:49:15.958 reduction from 12.5 billion down to 3 02:49:16.014 --> 02:49:20.678 billion is not, is a 02:49:20.694 --> 02:49:23.702 good move. I think if you're out, if one of the rooms in your house 02:49:23.726 --> 02:49:26.558 is on fire and one of them has people in it and the others don't, 02:49:26.694 --> 02:49:29.326 you know, you put the fire out in the one where the people are. 02:49:29.398 --> 02:49:33.054 And so I wouldn't view that $3 billion as 02:49:33.222 --> 02:49:37.078 inefficiency for ERCOT. I view that as the cost of reliability. 02:49:37.134 --> 02:49:40.454 And I'm going to rely on them, the people 02:49:40.502 --> 02:49:43.970 who operate the grid, to tell us what they need. 02:49:44.270 --> 02:49:47.622 And so, for me, I think the proper way to move forward is 02:49:47.646 --> 02:49:51.078 to reject this NPRR. And I'm okay 02:49:51.174 --> 02:49:54.670 with the trigger at 40 mw for ten 02:49:54.710 --> 02:49:58.070 minutes. And if they can implement that without this, 02:49:58.230 --> 02:50:02.252 that's kind of where I stand. But again, the process to 02:50:02.276 --> 02:50:05.040 get here was inadequate. 02:50:05.460 --> 02:50:08.920 So happy to hear your thoughts. Chairman Gleeson, 02:50:09.700 --> 02:50:13.548 you know, the process is tough, right? I mean, it's an 02:50:13.564 --> 02:50:17.588 evolving process. I feel like information becomes available leading up to the board, 02:50:17.764 --> 02:50:21.920 after the board. And so with NPRR1186, 02:50:22.300 --> 02:50:25.520 I felt like it was the same information all the way through, 02:50:25.910 --> 02:50:29.126 in some respects, from stakeholder comments all the way till they got to us. 02:50:29.158 --> 02:50:33.470 The only difference was we accepted comments here from the stakeholders versus, 02:50:33.590 --> 02:50:37.090 you know, 11 or 1224 in this instance. 02:50:37.390 --> 02:50:40.206 But to your point, 02:50:40.358 --> 02:50:44.662 you know, hearing more from the stakeholders, you know, I know our staff 02:50:44.726 --> 02:50:48.390 works very hard in digging into these policy 02:50:48.470 --> 02:50:52.054 matters over at ERCOT, and they certainly have opinions and I think 02:50:52.182 --> 02:50:56.158 having more engagement with them, I know I certainly do on my 02:50:56.294 --> 02:50:59.814 SPP and formerly miso matters, it would be good. 02:50:59.982 --> 02:51:03.462 But also, you know, from ERCOT as well. I mean, it was 02:51:03.486 --> 02:51:06.822 unclear to me where they stood on the offer floors 02:51:06.966 --> 02:51:10.102 up until, like, I got briefed this week. 02:51:10.286 --> 02:51:13.798 And so, you know, I came to find out that 02:51:13.814 --> 02:51:17.182 the offer floors wasn't really as important as a deployment trigger, but it seemed 02:51:17.206 --> 02:51:21.228 like the offer were important to them. And so I 02:51:21.244 --> 02:51:25.228 just feel like we need to get very candid feedback all the 02:51:25.244 --> 02:51:28.148 way leading to the board and all the way over here. Otherwise we're going to 02:51:28.164 --> 02:51:31.520 end up in these, you know, again, conundrums over and over again. Right. 02:51:31.820 --> 02:51:34.796 And so the board did what they did. 02:51:34.948 --> 02:51:38.644 They had the information that they had before them at the time and took 02:51:38.692 --> 02:51:41.900 action on the information that was presented to them 02:51:41.940 --> 02:51:45.802 at the time of the board meeting. And since then, the information has continued to 02:51:45.826 --> 02:51:49.274 evolve and we have to make a decision at 02:51:49.282 --> 02:51:52.706 the back end as sort of the judges of approving, 02:51:52.818 --> 02:51:56.338 rejecting or remanding these NPRRs based on the best available 02:51:56.434 --> 02:52:00.034 information we have before us. And oftentimes, I think that even at the board 02:52:00.082 --> 02:52:03.722 meetings, we're still processing, like for 02:52:03.746 --> 02:52:07.434 this one, it sounded like you were and I still was for NPRR1224 still 02:52:07.482 --> 02:52:10.428 processing the information. And, 02:52:10.604 --> 02:52:13.988 you know, not to mention we have a lot of other things. 02:52:14.044 --> 02:52:17.356 We're still processing a lot of other work that we're still working on. 02:52:17.468 --> 02:52:20.012 So this NPRR is not the only thing we're working on. We have a lot 02:52:20.036 --> 02:52:23.100 going on. And sometimes at board meetings, we still have to process 02:52:23.260 --> 02:52:26.956 what's being presented to us and come to a conclusion of where we 02:52:26.988 --> 02:52:30.308 sit as Commissioners on these NPRRs 02:52:30.364 --> 02:52:34.204 and market rules that come before us for final approval 02:52:34.292 --> 02:52:37.506 or I rejection or remand. So it's 02:52:37.538 --> 02:52:41.098 tough, you know, and but I think to your point, I'm in 02:52:41.114 --> 02:52:44.026 agreement. We have to have the best available information we can. 02:52:44.178 --> 02:52:48.122 We had attack recommended NPRR 02:52:48.306 --> 02:52:50.670 and the board. That's what they had before them. 02:52:50.970 --> 02:52:54.658 And but, you know, I think just having more candid conversations 02:52:54.714 --> 02:52:57.946 as to where people really sit and what they really want versus what they don't 02:52:57.978 --> 02:53:01.404 really need is very important so that we could decipher 02:53:01.452 --> 02:53:04.508 these issues and not end up in these situations over and over again in the 02:53:04.524 --> 02:53:07.668 future to the actual decision on the 02:53:07.684 --> 02:53:11.292 NPRR. I'm with you. We need to make a decision 02:53:11.436 --> 02:53:14.572 that actually has an impact this summer, 02:53:14.676 --> 02:53:18.084 and that's the exercise that we embarked in. And somehow, 02:53:18.132 --> 02:53:21.600 along the way, we went off into the pastures. And so 02:53:22.220 --> 02:53:25.956 we need to get back on track and get a meaningful change 02:53:26.028 --> 02:53:29.468 in place by August. And that meaningful change needs to 02:53:29.484 --> 02:53:33.484 come by way of a deployment trigger, a modified, an additional 02:53:33.532 --> 02:53:37.340 trigger. So a third trigger for ERCOT 02:53:37.380 --> 02:53:41.084 to use as its discretion. And I'm open 02:53:41.172 --> 02:53:44.332 to. I hear the IMM's concerns on the 02:53:44.356 --> 02:53:47.476 40 megawatt under generation. Our staff is saying 02:53:47.548 --> 02:53:50.788 this started as 30 megawatt under generation. I kind 02:53:50.804 --> 02:53:54.822 of, in some ways, I may want to consider the 30 megawatt 02:53:54.886 --> 02:53:59.290 under generation as an incremental improvement 02:54:00.510 --> 02:54:04.094 towards, you know, deploying the ECRS 02:54:04.142 --> 02:54:07.566 a little bit earlier. So 40, 30 megawatt under generation, 02:54:07.638 --> 02:54:11.022 I think, is on the table for me. But whatever we ultimately decide needs 02:54:11.046 --> 02:54:13.926 to be implemented by August 1. And I don't think we need an offer floor. 02:54:14.038 --> 02:54:17.646 The offer floor is, my understanding, was introduced because potentially, 02:54:17.678 --> 02:54:20.900 as I kind of understand, is because the IMM was 02:54:21.520 --> 02:54:26.100 proposing 100. But the offer floor really serves no purpose. The ORDC 02:54:26.480 --> 02:54:30.104 is what values are operating reserves during scarcity 02:54:30.152 --> 02:54:33.848 conditions. And we have taken really aggressive action with the ORDCs in the 02:54:33.864 --> 02:54:37.456 last two years with the ORDC in the last two years by not 02:54:37.488 --> 02:54:41.432 only implementing the price floors, but also implementing 02:54:41.456 --> 02:54:45.120 the shifts that we implemented during our market reform discussion. So we 02:54:45.160 --> 02:54:48.306 have made the ORDC more aggressive 02:54:48.378 --> 02:54:53.538 in pricing scarcity conditions and lack 02:54:53.554 --> 02:54:57.098 of reserves, operating reserve shortages during 02:54:57.194 --> 02:55:00.746 scarcity conditions. So, in my opinion, 02:55:00.858 --> 02:55:04.122 that's the tool we've relied on. That's the tool we've been modifying. 02:55:04.306 --> 02:55:07.810 And I don't see why we have to have another 02:55:07.930 --> 02:55:15.038 mechanism to price the value of reserves through an offer floor for 02:55:15.214 --> 02:55:18.646 ECRS. So I think the main 02:55:18.678 --> 02:55:22.102 focus here is a deployment trigger, and those two options are what I would put 02:55:22.126 --> 02:55:24.886 on the table as long as we get something done by August 1. And so 02:55:24.918 --> 02:55:29.782 that means that, like you, it would mean rejecting the 02:55:29.806 --> 02:55:32.990 NPRR so we can get something in place. And maybe, you know, 02:55:33.030 --> 02:55:36.414 like Harika mentioned, you know, we're making improvements 02:55:36.462 --> 02:55:39.948 along the way until we get more information from the ancillary service study in RTC. 02:55:40.004 --> 02:55:43.412 Maybe we start at. Maybe we start at 40, maybe we start 02:55:43.436 --> 02:55:47.612 at 30, but maybe next year we come back and see how it's performing 02:55:47.796 --> 02:55:51.012 and see if there's any modifications that need to be done 02:55:51.036 --> 02:55:54.628 to the deployment trigger that we can, you know, have ERCOT do, because it is 02:55:54.644 --> 02:55:57.948 a new ancillary service product, and they're learning along the way, and we want to 02:55:57.964 --> 02:56:01.588 make sure they have it as a reliability tool, but we also want to make 02:56:01.604 --> 02:56:04.798 sure that it's being used efficiently as well. 02:56:04.894 --> 02:56:08.534 And so we're going to have this issue too, with other ancillary services we 02:56:08.582 --> 02:56:12.782 introduce into the market. So I see this as a continued conversation 02:56:12.846 --> 02:56:16.510 until we get to RTC. 02:56:16.550 --> 02:56:19.214 And I'm in agreement with you as well on the fact that we need to 02:56:19.222 --> 02:56:22.454 have more visibility into RTC. It's such a massive project, 02:56:22.542 --> 02:56:26.094 and I know ERCOT's full steam ahead in implementing, and that's great, 02:56:26.262 --> 02:56:30.254 but I myself have heard concerns about the ancillary service demand 02:56:30.302 --> 02:56:33.240 curves and where it's headed, and we need to kind of know where it's at, 02:56:33.280 --> 02:56:35.496 because we don't want to get saddled at the back end with a bunch of 02:56:35.528 --> 02:56:38.800 controversy with what they look at when we've been, you know, 02:56:38.840 --> 02:56:42.592 like you said, telling everyone, this is, this is the holy grail, 02:56:42.736 --> 02:56:46.448 you know, for having a more efficient market, and it's going to solve problems like 02:56:46.464 --> 02:56:50.380 getting rid of ruck and better pricing ancillaries and, 02:56:50.680 --> 02:56:54.016 you know, all of that. So having a process for more 02:56:54.048 --> 02:56:57.202 visibility into the RTC implementation, 02:56:57.266 --> 02:57:01.130 I think at this stage is important, as ERCOT sort of rounds the corner 02:57:01.170 --> 02:57:04.618 in their final stretch to getting RTC off the 02:57:04.634 --> 02:57:05.190 ground. 02:57:09.410 --> 02:57:12.778 You've heard what I think. I support you Mr. Chairman, 02:57:12.834 --> 02:57:16.802 and your solution. And we'll follow 02:57:16.866 --> 02:57:20.282 your lead on that. I think it's a 02:57:20.306 --> 02:57:23.516 great idea. I made it at the board when I was on there, 02:57:23.548 --> 02:57:25.320 so I'm all for it. 02:57:28.860 --> 02:57:31.324 I'm supportive of, I guess, 02:57:31.412 --> 02:57:35.000 rejecting and, you know, putting the 02:57:35.740 --> 02:57:39.124 trigger in place, as ERCOT had recommended in doing it by August 02:57:39.172 --> 02:57:43.040 1. Recognizing that, you know, we have RTC 02:57:44.300 --> 02:57:47.372 that's coming and we need something to be in place, 02:57:47.436 --> 02:57:50.568 this is definitely an improvement. Improvement. I'd like 02:57:50.584 --> 02:57:54.352 to speak more to, I think, what you talked about in terms 02:57:54.416 --> 02:57:58.580 of the need for information, for decision making 02:57:59.200 --> 02:58:03.024 earlier in the process, and to me, the word 02:58:03.072 --> 02:58:06.192 process is the key. I mean, everything that 02:58:06.216 --> 02:58:10.060 we do, we need to make our decisions 02:58:10.360 --> 02:58:13.400 based on good data and good science. Because the better the data, 02:58:13.440 --> 02:58:16.080 the better the science. The better the science, the better the policy. 02:58:16.660 --> 02:58:19.748 And having a process that's well 02:58:19.804 --> 02:58:23.684 defined, that has, you know, every once in a while, it's just 02:58:23.772 --> 02:58:26.004 good to go in and review that process, 02:58:26.132 --> 02:58:29.916 particularly if we see in this particular situation, and we've seen it 02:58:29.948 --> 02:58:33.748 maybe in NPRR1186 as well, that it's not working 02:58:33.924 --> 02:58:37.732 in the way that we feel like it should. And it 02:58:37.756 --> 02:58:40.922 could be that just times are changing. It could be that we have 02:58:41.076 --> 02:58:44.934 more initiatives that we are trying to execute at the same time. 02:58:45.102 --> 02:58:49.110 And so we need to go in and we need to evaluate 02:58:49.270 --> 02:58:52.790 and maybe change the process. And I think that's not just incumbent 02:58:52.830 --> 02:58:57.438 on us, but it's also incumbent on our 02:58:57.494 --> 02:59:00.614 market participants and our stakeholders to help in that. 02:59:00.782 --> 02:59:04.090 And so I think you're definitely on point 02:59:04.550 --> 02:59:07.750 that we need to take a look at the process, 02:59:08.770 --> 02:59:12.410 the way that things move through TAC, the way that we get 02:59:12.450 --> 02:59:15.866 information, the way that we do the evaluation. Recognizing, 02:59:15.898 --> 02:59:20.074 again, that it's not just one issue, that all of them are interrelated 02:59:20.162 --> 02:59:23.986 and the outcomes of all of them impact the 02:59:24.098 --> 02:59:28.554 performance of the system as a whole as we move forward. So very 02:59:28.602 --> 02:59:32.452 much agree with you that we need to evaluate 02:59:32.476 --> 02:59:37.028 the process. We need to make that a top priority. And in 02:59:37.044 --> 02:59:40.300 this particular decision, I do agree that we should 02:59:40.460 --> 02:59:44.000 reject and then have the 02:59:44.340 --> 02:59:48.080 40 mw for the two scattered rolls implemented. 02:59:49.300 --> 02:59:50.520 There's no floor. 02:59:52.100 --> 02:59:55.684 Okay, sorry. I think we have agreement. 02:59:55.732 --> 02:59:59.280 So. Okay. So what I think I'm going to do 02:59:59.360 --> 03:00:03.384 is make, like I said, make two motions. So the first one 03:00:03.432 --> 03:00:07.304 would we have, you know, we have a filing from, from yesterday. 03:00:07.392 --> 03:00:11.248 So I think we vote on those first and 03:00:11.264 --> 03:00:14.744 then we can vote on 1224 separately severed out. (item:18:Motion to approve the proposed order file by Staff on 07/18/24, NPRR1224) So I 03:00:14.752 --> 03:00:18.480 entertain a motion to approve the proposed order filed on this project by Staff 03:00:18.560 --> 03:00:22.192 on July 18, 2024. So moved. I 03:00:22.216 --> 03:00:25.114 second. Have a motion and a second. All those in favor say aye. Aye. 03:00:25.282 --> 03:00:29.178 Opposed? Motion prevails. (item:18:Motion to reject NPRR1224 for reasons discussed, NPRR1224) I'd entertain 03:00:29.234 --> 03:00:32.626 a motion to reject NPRR1224 for the 03:00:32.658 --> 03:00:36.698 reasons we have discussed. So moved. Second. 03:00:36.794 --> 03:00:39.314 Have a motion and a second. Those in favor say aye. 03:00:39.402 --> 03:00:42.230 Aye. Opposed? Motion prevails. 03:00:46.330 --> 03:00:50.172 (item:18:Executive Director Connie Corona confirms instructions from Commission, NPRR1224) Chairman, if I may echo back the instruction I heard. 03:00:50.346 --> 03:00:54.616 And that is staff is 03:00:54.688 --> 03:00:58.704 to engage with the stakeholders in an effort 03:00:58.752 --> 03:01:02.840 to improve the information flow to the Board and 03:01:02.880 --> 03:01:06.456 to the Commission without porting the 03:01:06.488 --> 03:01:09.380 entire stakeholder process over here. 03:01:10.160 --> 03:01:14.440 Correct, yes. So we 03:01:14.480 --> 03:01:18.412 look forward to hearing, hearing from folks on their ideas. 03:01:18.596 --> 03:01:23.820 We would certainly entertain any 03:01:23.900 --> 03:01:28.532 solutions that are brought forward by a 03:01:28.556 --> 03:01:32.196 joint effort among the stakeholders. So that 03:01:32.228 --> 03:01:36.520 would be an instruction to go off and brainstorm, 03:01:37.140 --> 03:01:40.492 bring some potential solutions back to staff that 03:01:40.516 --> 03:01:44.046 we can then share with the Commission. You know, perhaps that's 03:01:44.078 --> 03:01:47.610 something that can be undertaken at TAC. 03:01:48.230 --> 03:01:51.934 Okay, thank you, Connie and I will apologize to everybody. 03:01:52.022 --> 03:01:54.878 We have a workshop after this on PCM, 03:01:54.934 --> 03:01:58.370 so we're going to keep pushing through today. so. 03:01:58.710 --> 03:02:02.406 All right. (item:19:Chairman Gleeson lays out Project No. 54584) I think that brings us to Item 19. That's Docket 03:02:02.438 --> 03:02:06.250 No. 54584, Reliability standard for the ERCOT market. 03:02:08.520 --> 03:02:11.936 Werner? I think ERCOT 03:02:11.968 --> 03:02:14.460 staff is perhaps also coming up. 03:02:33.050 --> 03:02:36.834 Go ahead, Werner. Thanks. (item:19:Commisison Staff's Werner Roth on redefining the recommendation of rejecting the Brattle study) Werner Roth, Commission Staff. 03:02:36.962 --> 03:02:41.234 No long prepared remarks this month. But last 03:02:41.282 --> 03:02:45.426 month or during the last open meeting, Commission Staff had recommended rejecting 03:02:45.458 --> 03:02:48.706 the Brattle default technology of an error derivative 03:02:48.778 --> 03:02:51.962 combustion turbine. We felt that the justification for doing so had not 03:02:51.986 --> 03:02:55.106 been well presented and recommending sticking with the frame CT that was used 03:02:55.138 --> 03:02:58.248 in the 2012 cone study. Since then, ERCOT's 03:02:58.434 --> 03:03:02.076 filed a couple like, filed the Brattle study and filed an additional 03:03:02.148 --> 03:03:05.732 memorandum on top of that. And we would like to refine 03:03:05.796 --> 03:03:09.316 our recommendation to capture everything that went into the 2012 study and carry that 03:03:09.348 --> 03:03:12.708 over to the 2024 recommendation. Namely maintain the 03:03:12.724 --> 03:03:16.276 use of the frame combustion turbine, sticking with the 20 year 03:03:16.388 --> 03:03:20.668 life of the. For the recovery of costs, and using 03:03:20.764 --> 03:03:23.956 level real dollars. So that would make the 03:03:23.988 --> 03:03:27.268 new staff recommendation with, as was filed in the ERCOT memo, 03:03:27.324 --> 03:03:30.200 of $140 per kilowatt year. 03:03:31.980 --> 03:03:34.200 Okay. Commissioners, thoughts? 03:03:36.220 --> 03:03:40.444 (item:19:Commisisoner Cobos' thoughts on Commission Staff's recommendation) I appreciate ERCOT filing the supplemental information regarding 03:03:40.492 --> 03:03:44.164 the frame CT and also appreciate staff's analysis of 03:03:44.212 --> 03:03:47.756 the frame CT. I think that the cost 03:03:47.788 --> 03:03:51.350 of new entry is based on the 03:03:51.430 --> 03:03:55.890 least cost of entering the market. Right. And so I 03:03:56.990 --> 03:04:01.454 have a lot of concerns with using the new era derivative, LM 6000, 03:04:01.542 --> 03:04:05.062 because that's just not what's being built right now. We don't have the 03:04:05.086 --> 03:04:08.614 discounted refurbished rates because that's not information 03:04:08.702 --> 03:04:12.810 that brattle is able to get from the generators. But ultimately, 03:04:13.270 --> 03:04:16.726 our. Our cone figure has been 03:04:16.758 --> 03:04:19.932 based on a frame CT because it's a. The least cost of entry into the 03:04:19.956 --> 03:04:23.668 market. And so from my perspective, I would hinge 03:04:23.684 --> 03:04:28.468 our cone on a frame CT and I 03:04:28.484 --> 03:04:31.876 would stay with a 20 year amortization because that's the industry 03:04:31.948 --> 03:04:36.164 standard of sort of amortizing 03:04:36.332 --> 03:04:40.212 not only not the life of the unit, but when generators expect to get their 03:04:40.236 --> 03:04:42.120 money back. And I think that's reasonable. 03:04:43.710 --> 03:04:47.118 But with respect to the dollars, I would go with level real. That's kind 03:04:47.134 --> 03:04:49.910 of where I would start. I'm open to discussion on it only because that is 03:04:49.950 --> 03:04:53.662 the actual cost per year of that 03:04:53.766 --> 03:04:57.430 unit, rather than using nominal, because nominal could 03:04:57.470 --> 03:05:00.982 add cost to the earlier years of the unit that don't actually 03:05:01.046 --> 03:05:05.170 exist, like inflation. And so I would 03:05:05.590 --> 03:05:08.862 start with a frame CT 20 year 03:05:08.886 --> 03:05:12.610 amortization on real dollars, which would put you at 140. 03:05:17.550 --> 03:05:18.610 Any thoughts? 03:05:23.550 --> 03:05:26.810 Commissioner Jackson, anything to add? (item:19:Commisisoner Jackson's thoughts on Commission Staff's recommendation) So, 03:05:27.910 --> 03:05:31.614 I guess in ERCOT's evaluation, because they went back to Brattle. 03:05:31.782 --> 03:05:35.470 Okay. And you said, okay, what would Brattle come up with 03:05:35.550 --> 03:05:38.970 in terms of, you know, if this were a cone CT. 03:05:39.270 --> 03:05:42.886 I guess you actually presented a 25 year life, 03:05:43.038 --> 03:05:46.470 but then added in the real realization, 03:05:46.590 --> 03:05:51.610 and so your capture was 134. 03:05:52.030 --> 03:05:55.370 Okay. And then if you backed out 03:05:57.150 --> 03:06:00.966 what the impact would be on the 25 back 03:06:00.998 --> 03:06:03.970 to the 20 year life, you would land at 140. 03:06:04.350 --> 03:06:08.174 So 140 would be for the cone frame 03:06:08.222 --> 03:06:11.846 CT for real levelization and for 03:06:11.878 --> 03:06:14.966 20 year life? Yes. 03:06:15.038 --> 03:06:18.542 And so your evaluation 03:06:18.646 --> 03:06:20.770 is consistent with that? 03:06:21.910 --> 03:06:25.774 Yes. And so I 03:06:25.782 --> 03:06:29.020 guess, from my perspective, that that's a good starting point. 03:06:31.160 --> 03:06:35.648 I think we've had a number of different evaluations 03:06:35.824 --> 03:06:39.464 that have come up with some different ranges, and I think this falls within that 03:06:39.512 --> 03:06:42.552 range. And so, to me, 03:06:42.696 --> 03:06:45.792 20 year life makes sense. We've heard that that 03:06:45.816 --> 03:06:49.152 was favored by the financial community. 03:06:49.336 --> 03:06:51.968 I think, for some of the reasons that we've talked about, if you're going to 03:06:51.984 --> 03:06:55.374 do this more frequently, that the real levelization makes more 03:06:55.422 --> 03:06:59.342 sense. And then, of course, continuing to use the 03:06:59.366 --> 03:07:03.278 frame CT, I think, I think makes sense at 03:07:03.294 --> 03:07:07.470 this particular time as we kind of establish 03:07:07.510 --> 03:07:12.774 the cone and utilize it in the kind of activities 03:07:12.822 --> 03:07:16.382 that we're talking about and the references that we're talking about for 03:07:16.406 --> 03:07:17.810 the rest of the market design. 03:07:19.800 --> 03:07:23.120 (item:19:Commisisoner Hjaltman's thoughts on Commission Staff's recommendation) I agree with Commissioner Jackson's thinking. I think I was looking 03:07:23.160 --> 03:07:27.032 at kind of providing a range of 146 to 03:07:27.056 --> 03:07:30.872 150 or a little higher with 03:07:30.896 --> 03:07:34.528 the most recent data coming from ERCOT. I was going to go a 03:07:34.544 --> 03:07:38.940 little lower afterwards. So, in the same area. 03:07:42.920 --> 03:07:44.060 Thank you, Jimmy. 03:07:45.990 --> 03:07:48.690 (item:19:Chairman Gleeson's' question and thoughts on Commission Staff's recommendation) So Werner, just to be clear. 03:07:49.350 --> 03:07:52.942 Your recommendation as you sit here now is use the frame CT value of 03:07:52.966 --> 03:07:56.094 140 and to look at this next 03:07:56.142 --> 03:07:59.950 in 2026? Yes, that is correct. In the reliability 03:07:59.990 --> 03:08:03.686 standard rulemaking, which we will have for you, the BFA next month. 03:08:03.798 --> 03:08:07.030 We do have something in there that would, in 2026, 03:08:07.070 --> 03:08:09.810 would require an update to the cost of new entry. 03:08:10.160 --> 03:08:14.472 Okay. I'm comfortable as well with the frame CT and 03:08:14.496 --> 03:08:18.040 reviewing this in two years in 2026 and using the 140 03:08:18.080 --> 03:08:21.648 for planning purposes. So do 03:08:21.664 --> 03:08:24.900 you need anything else? Can you provide one more comment? 03:08:26.160 --> 03:08:30.032 (item:19:Commisisoner Cobos' additional thoughts on Commission Staff's recommendation) So, I know that we're going to use this configure for the reliability 03:08:30.096 --> 03:08:33.416 standard and the updated cost assessment for PCM, but I think 03:08:33.448 --> 03:08:36.786 that we should also consider, consider the impact 03:08:36.858 --> 03:08:40.874 that this new cone figure has on peaker net margin. And I say that because, 03:08:41.042 --> 03:08:44.794 you know, as you all know, Chairman Gleason, we sit at the board meetings 03:08:44.882 --> 03:08:48.322 and, you know, and get these updates from the IMM. And the 03:08:48.346 --> 03:08:51.470 IMM has, you know, 03:08:51.850 --> 03:08:55.338 continuously said, well, we've been exceeding cone for, you know, three, four years in a 03:08:55.354 --> 03:08:58.850 row. Whatever has been provided to us. And there's always a question of, well, 03:08:58.890 --> 03:09:02.420 why aren't we seeing new build? Well, we know that for one, 03:09:02.500 --> 03:09:06.124 the 105 was, you know, hasn't been updated in twelve years. 03:09:06.292 --> 03:09:09.716 And so, and that, that's not what we're 03:09:09.748 --> 03:09:12.500 seeing in the market in terms of the cost of new entry. So I'm just 03:09:12.540 --> 03:09:15.812 wondering, in order to have a true, at least a better, 03:09:15.876 --> 03:09:19.836 more updated perspective of the cost of new entry 03:09:19.948 --> 03:09:23.460 as we get these updates from the IMM, if we should 03:09:23.500 --> 03:09:27.342 actually use the, the updated number in the peaker net margin. I know that 03:09:27.436 --> 03:09:29.962 that has impacts to the LCAP and all that. I'm not trying to get into 03:09:29.986 --> 03:09:33.602 that. I just feel like that the peaker net margin from the perspective 03:09:33.626 --> 03:09:38.242 of revenue in the market to incent new build and retention of existing generation 03:09:38.386 --> 03:09:42.146 is our barometer of where things sit. And we as 03:09:42.178 --> 03:09:45.778 policy makers, board members use that kind 03:09:45.794 --> 03:09:49.338 of think about that barometer as we 03:09:49.514 --> 03:09:52.898 think about or assess how our market is looking in 03:09:52.914 --> 03:09:56.288 terms and sending new build. And so that's 03:09:56.304 --> 03:09:59.128 just one thing I wanted to kind of put in there is, you know, 03:09:59.264 --> 03:10:02.816 something to consider. Yeah. So as I understand what we're doing today, this, 03:10:02.848 --> 03:10:06.472 this is just for planning purposes as we move forward, as Warner said, and there 03:10:06.496 --> 03:10:09.900 will be a different process to work through pternet margin. 03:10:12.680 --> 03:10:16.460 Good afternoon, Rebecca. (item:19:ERCOT's Rebecca Zerwas on protocol revision request) Rebecca Zerwas for ERCOT. 03:10:17.400 --> 03:10:20.880 We have been discussing the possibility of a protocol revision request, 03:10:20.960 --> 03:10:24.648 one to implement. We asked for the feedback and I know you'll provided earlier on 03:10:24.664 --> 03:10:28.736 the every five year cadence. And the other item is to cone right 03:10:28.768 --> 03:10:32.168 now stops at the board and to bring it in front of the commission if 03:10:32.184 --> 03:10:36.112 we did change cone. So I think that's something we could consider adding 03:10:36.296 --> 03:10:39.672 the conversation for the peaker net margin use of cone in the protocol. 03:10:39.776 --> 03:10:42.952 Yeah. And that's an important point, I think. And I think what I've gotten 03:10:42.976 --> 03:10:46.642 from staff is that we really need to be involved in the cone updates 03:10:46.706 --> 03:10:50.434 and, you know, the two year and the five 03:10:50.482 --> 03:10:54.026 year, that's where we ultimately go. That's something that, 03:10:54.058 --> 03:10:57.030 I mean, the cone figure drives so many different, 03:10:58.610 --> 03:11:02.362 you know, areas of our market that the commission has to absolutely be involved 03:11:02.386 --> 03:11:04.190 in that. Okay. 03:11:06.050 --> 03:11:09.590 All right, you good Werner? Perfect. Thanks, y'all. Appreciate it. 03:11:11.460 --> 03:11:15.156 So before we call up Texas RE on 23. 03:11:15.268 --> 03:11:19.396 I'm going to just quickly call up Item No. 28. Commissioner Glotfelty 03:11:19.428 --> 03:11:23.012 has a nuclear update. (item:28:Chairman Gleeson lays out Project No. 55421) So I would call 28. That's Project 03:11:23.076 --> 03:11:26.620 No. 55421, Texas Advanced Nuclear Reactor 03:11:26.660 --> 03:11:30.564 Working Group. And I was told it's a brief update, so we'll do that now. Very 03:11:30.612 --> 03:11:33.800 brief. (item:28:Commisisoner Glotfelty gives his Nuclear Working Group update) Since October, our 18 members have been working, 03:11:34.580 --> 03:11:38.526 meeting often. Getting a lot of work done. Hearing from guest speakers 03:11:38.718 --> 03:11:42.158 and delegating ideas to four subcommittees. The four subcommittees that have 03:11:42.174 --> 03:11:46.382 been working through are regulatory and ERCOT market design, demand and end users, 03:11:46.446 --> 03:11:49.090 higher ed, development and manufacturing. 03:11:49.670 --> 03:11:53.650 They've each met monthly, sometimes weekly, over the last ten months. 03:11:54.950 --> 03:11:58.078 With the help of over with hundreds 03:11:58.094 --> 03:12:02.050 of people. Well, I wouldn't say hundreds, but well over 100 03:12:03.000 --> 03:12:04.020 each week. 03:12:05.760 --> 03:12:09.344 The numbers of hours of brain power to create 03:12:09.472 --> 03:12:12.960 and come to some ideas at this level, 03:12:13.040 --> 03:12:17.100 at the subcommittee level has been great. We've got forms 03:12:17.480 --> 03:12:21.352 created for different ideas. They have all been submitted from 03:12:21.536 --> 03:12:25.580 this ad hoc subcommittee level to the final, to the committee. 03:12:26.600 --> 03:12:29.692 That this Commission set up, approved as requested 03:12:29.716 --> 03:12:33.180 by the Governor. We'll be providing discussions 03:12:33.220 --> 03:12:37.068 with each one of the members. We'll be filing more information 03:12:37.244 --> 03:12:41.276 in the docket number. But I just want you to know the subcommittee process is 03:12:41.308 --> 03:12:45.236 concluding and we're getting more towards this funnel of actual 03:12:45.308 --> 03:12:49.600 ideas and the writing of a report. So you'll see these ideas at ASAP. 03:12:49.900 --> 03:12:52.828 (item:28:Chairman Gleeson's thoughts on Commissioner Glotfelty's nuclear update) Like I said last time you gave an update, the advancement of nuclear seems to 03:12:52.844 --> 03:12:55.970 be one of the few things that everyone I talk to agrees about. So, 03:12:56.790 --> 03:13:00.478 great work. Look forward to seeing what comes out of it. And as 03:13:00.494 --> 03:13:04.198 we've talked about before, you know, if anything coming out of 03:13:04.374 --> 03:13:08.174 the report needs to be added to our agency report and 03:13:08.182 --> 03:13:12.530 our legislative recommendations, you know, please let Staff know. Absolutely perfect. Staff has been 03:13:13.070 --> 03:13:16.690 helping us on this, so. Absolutely. Great, thank you. 03:13:17.230 --> 03:13:21.228 All right, now. (item:23:Chairman Gleeson lays out Project No. 56022) We will cycle back to Item 23. That's Docket No. 03:13:21.284 --> 03:13:24.924 56022, Calendar year 2024 03:13:24.972 --> 03:13:27.840 reports of the Texas Reliability Entity. 03:13:33.900 --> 03:13:37.680 Joseph, go ahead. (item:23:Texas RE's VP & COO Joseph Younger gives an overview of the 2023 Reliability, Performance & Regional Risk Assessment Report) Good afternoon Chair, Commissioners. 03:13:38.820 --> 03:13:42.412 Joseph Younger, I'm the Vice President and Chief Operating 03:13:42.476 --> 03:13:45.740 Officer at Texas RE. With me is 03:13:45.820 --> 03:13:49.660 David Penney, who's our Director of Reliability Services. 03:13:50.640 --> 03:13:54.544 We're here to provide you with a brief overview of our 03:13:54.672 --> 03:13:58.832 2023 reliability, performance and regional risk assessment 03:13:59.016 --> 03:14:03.152 report. Which we filed in the project, along with 03:14:03.296 --> 03:14:07.104 some slides from the presentation that David's going to talk to in a little bit. 03:14:07.272 --> 03:14:10.192 But before I did that, I did want to just take the opportunity to, 03:14:10.216 --> 03:14:14.250 again, thank you all for, for providing 03:14:14.290 --> 03:14:17.442 us this opportunity to continue this collaboration. A couple 03:14:17.466 --> 03:14:20.150 of years ago, Commissioner Glotfelty was very, 03:14:21.010 --> 03:14:24.754 very influential in starting and growing this relationship. 03:14:24.802 --> 03:14:28.114 And giving us opportunities not just to come here to the open meeting, 03:14:28.162 --> 03:14:32.130 but also interact with Staff. And collaborate 03:14:32.170 --> 03:14:36.130 on all the things that we're seeing and on our shared reliability 03:14:36.170 --> 03:14:39.756 and security mission. So that's been really important and fruitful and has 03:14:39.788 --> 03:14:43.364 continued with you now on our Board, Chair Gleeson. So we really 03:14:43.412 --> 03:14:47.036 appreciate that. Turning to the report just 03:14:47.068 --> 03:14:50.160 to kind of briefly set the stage before David walks through it. 03:14:50.460 --> 03:14:54.060 This report is an annual report that Texas RE 03:14:54.220 --> 03:14:58.196 produces. It's done solely by our region, and it focuses 03:14:58.308 --> 03:15:01.572 on providing an independent look at reliability and 03:15:01.596 --> 03:15:05.028 security metrics of the bulk power system in the ERCOT 03:15:05.084 --> 03:15:08.482 interconnection. There's two aspects to the report 03:15:08.626 --> 03:15:12.138 that I want to highlight, and David's going to touch on in more detail. 03:15:12.314 --> 03:15:15.882 First, it looks at, we take a lot of data in, and so it looks 03:15:15.906 --> 03:15:19.074 at trends in the data and how the system, 03:15:19.162 --> 03:15:22.546 the bulk power system, is performing and focuses 03:15:22.578 --> 03:15:26.034 on trends in that data. And then we use that data to 03:15:26.122 --> 03:15:29.482 identify and assess known and emerging risks for 03:15:29.506 --> 03:15:33.148 our region and provide that information. And for us, this assessment, 03:15:33.204 --> 03:15:37.252 along with other documents like the CMEP IP that we talked about back 03:15:37.276 --> 03:15:41.676 in January when we were here. There are key input into our 03:15:41.708 --> 03:15:44.548 risk based compliance programs, our outreach programs, 03:15:44.604 --> 03:15:47.640 all that we do. So it's a fundamental part of our work. 03:15:48.220 --> 03:15:51.276 So, as I mentioned, we filed this in the project along 03:15:51.308 --> 03:15:54.916 with David's slides. So with that, I'll turn it over to David 03:15:54.948 --> 03:15:58.206 to kind of talk through the details of the report and then take any questions 03:15:58.238 --> 03:16:00.970 you may have. Thank you. It's a pleasure to be here today. 03:16:02.030 --> 03:16:05.438 (item:23:Texas RE's Director of Reliability Services David Penney gives information on 10 year report on ERCOT's interconnection) As Joseph mentioned my name is David Penney, Director of Reliability 03:16:05.494 --> 03:16:09.270 Services. And with the help of Mark Henry and other folks on my team, 03:16:09.310 --> 03:16:12.662 were largely responsible for the data collection 03:16:12.686 --> 03:16:16.366 and the analysis of that data in relation to this report. So, I guess 03:16:16.398 --> 03:16:20.574 a little bit of a background for you. There's NERC committee called the RISC, 03:16:20.622 --> 03:16:23.810 the Reliability Issues Steering Committee. That's composed 03:16:23.850 --> 03:16:27.498 of NERC and industry executives that go through a process every two 03:16:27.554 --> 03:16:30.738 years or so to identify key risks to the 03:16:30.754 --> 03:16:34.538 bulk power system. In their most recent report, they identified five 03:16:34.594 --> 03:16:38.602 risk areas. Grid transformation, resilience to 03:16:38.626 --> 03:16:41.470 extreme events, cyber and physical security, 03:16:42.010 --> 03:16:45.458 critical infrastructure, interdependencies and energy 03:16:45.514 --> 03:16:49.620 policy. And so what we do, and the way we try to format 03:16:49.660 --> 03:16:52.876 this report and the analysis related to it. Is we take 03:16:52.988 --> 03:16:57.020 all the data that we collect from transmission, outage and performance data 03:16:57.100 --> 03:17:01.012 generation, outage performance data protection system performance 03:17:01.116 --> 03:17:05.156 data, frequency data, event analysis, and so forth, 03:17:05.268 --> 03:17:08.804 we cast a wide net, and then we look at that data 03:17:08.852 --> 03:17:12.660 and analyze it to see how it answers the question of how is the grid 03:17:12.700 --> 03:17:15.798 performing in relation to the these risk areas? And that's kind of 03:17:15.814 --> 03:17:20.078 the way the report is structured. As Joseph mentioned, 03:17:20.214 --> 03:17:23.742 we're one of, we've been writing this report for ten 03:17:23.806 --> 03:17:27.302 years, and it's a solely focused on the ERCOT interconnection. And it's 03:17:27.326 --> 03:17:31.182 kind of a companion report to the NERC state of reliability 03:17:31.246 --> 03:17:35.410 report, which looks at similar assessments nationwide. 03:17:36.430 --> 03:17:39.638 So, with that being said, I kind of want to step you through some of 03:17:39.654 --> 03:17:43.416 the performance metrics that we look at and how we rated them and 03:17:43.488 --> 03:17:47.632 where things are trending. When we look at different indicators, 03:17:47.776 --> 03:17:51.400 we try to sign it a basic rating. Whether it's improving, 03:17:51.480 --> 03:17:54.352 whether it's stable, if it's something we need to monitor, 03:17:54.496 --> 03:17:57.848 or if, in worst cases, if it's actionable, if we're foreseeing multi 03:17:57.904 --> 03:18:01.432 years of declining trends. So, a few 03:18:01.456 --> 03:18:05.654 things to highlight for you is in the significant improvement 03:18:05.712 --> 03:18:09.150 areas we've seen. One of the big ones is around resource weatherization. 03:18:09.930 --> 03:18:13.282 In the post Uri world. A lot of activity was undertaken with 03:18:13.306 --> 03:18:16.722 Senate Bill 3. ERCOT's activities related to their site 03:18:16.786 --> 03:18:19.770 visits. Now, last year, 03:18:19.930 --> 03:18:23.426 the dirt weather station EOP standards were approved. So there's 03:18:23.458 --> 03:18:26.738 been a lot of activity in relation to that. And we're seeing the fruits of 03:18:26.754 --> 03:18:30.290 all that labor. If you look at the actual grid performance during 03:18:30.410 --> 03:18:34.566 Winter Storm Elliott, Winter Storm Heather most recently. The fleet is responding 03:18:34.598 --> 03:18:37.970 and we're seeing the improvements that are necessary. 03:18:38.470 --> 03:18:41.758 That does not mean we need to rest on our laurels and stop, but we 03:18:41.774 --> 03:18:45.350 are seeing the improvements related to that. Another area 03:18:45.390 --> 03:18:48.974 we're seeing significant improvement is in the area of primary frequency 03:18:49.022 --> 03:18:53.422 response. Primary frequency response is a 03:18:53.446 --> 03:18:57.094 function of when we have a major grid disturbance, like a significant 03:18:57.182 --> 03:19:00.956 loss of generation, the grid has to respond by arresting 03:19:00.988 --> 03:19:04.380 that frequency decay, and that's how we measure it using PFR. 03:19:04.500 --> 03:19:08.076 And that's mandated by a couple of the NERC standards, the Bowel 0031 03:19:08.108 --> 03:19:11.612 in particular. It's interesting to see the improvement in the 03:19:11.636 --> 03:19:16.396 PFR numbers, especially in light of the 03:19:16.468 --> 03:19:19.924 changes in the resource mix that we're seeing as we get further and further away 03:19:19.972 --> 03:19:22.852 from conventional units and migrate towards the renewable fleet. 03:19:22.956 --> 03:19:25.830 And I think a lot of the credit that we're seeing due to those improvements 03:19:25.870 --> 03:19:29.926 is how ERCOT has looked at performance requirements for batteries 03:19:29.958 --> 03:19:33.550 in particular, because that is what's providing a large tranche of the 03:19:33.670 --> 03:19:37.038 ancillary services that are providing this improvement. And we're seeing the fruits of 03:19:37.054 --> 03:19:40.390 that as well. We had lots of discussions 03:19:40.430 --> 03:19:43.886 earlier today about resilience, and a couple of the resilience metrics. 03:19:43.918 --> 03:19:47.630 We look at the numbers. We're seeing one of the big drivers in 03:19:47.670 --> 03:19:51.346 transmission outage rates and events pares down to two main areas, 03:19:51.478 --> 03:19:53.350 weather and equipment failures. 03:19:54.610 --> 03:19:57.830 The numbers we're seeing, if you look at the year over year trends, 03:19:58.850 --> 03:20:02.186 the rates are fairly stable, which is probably both good and 03:20:02.218 --> 03:20:05.962 bad, because we're not improving, but we're also not 03:20:05.986 --> 03:20:09.778 getting any worse. But we are still seeing fairly level trends in 03:20:09.834 --> 03:20:13.390 relation to weather caused outages and equipment failure type outages. 03:20:14.450 --> 03:20:16.430 A couple areas we're monitoring, 03:20:17.700 --> 03:20:21.156 again, we've had lots of discussion earlier today about solar ramps being 03:20:21.188 --> 03:20:24.404 one of the big ones. As the commission well knows, 03:20:24.452 --> 03:20:27.396 our summer risk hours are no longer at peak. 03:20:27.508 --> 03:20:31.092 They're during those solar down ramp periods and the 03:20:31.276 --> 03:20:34.972 mora. And the other reports that ERCOT puts out show 03:20:34.996 --> 03:20:38.956 that some of those same numbers, that the probability of EEA, or capacity 03:20:39.028 --> 03:20:42.444 deficiencies, are during those solar down ramp periods. And if you 03:20:42.452 --> 03:20:46.888 look at the raw numbers from last year, we were seeing downramp magnitudes 03:20:47.024 --> 03:20:50.048 of 7500 mw or more per hour. 03:20:50.224 --> 03:20:53.576 This year, they've gone even higher. We've seen some 03:20:53.608 --> 03:20:56.928 hours that are close to 10,000 mw an hour. And so 03:20:57.024 --> 03:21:00.336 I think ERCOT's taking the appropriate steps through the changes they're 03:21:00.368 --> 03:21:04.060 making, the ancillary service methodologies, and what they're procuring 03:21:04.400 --> 03:21:08.382 to mitigate those risks. But it's something that's going to have to 03:21:08.536 --> 03:21:12.530 continue to be monitored, because it's only getting worse as the solar penetration 03:21:12.610 --> 03:21:16.442 increases. Another area we're looking at, or monitoring 03:21:16.466 --> 03:21:19.698 very closely, is related to human error. When you, 03:21:19.754 --> 03:21:23.554 when you look at some of the raw data for protection system 03:21:23.602 --> 03:21:27.034 miss operations and events, a large 03:21:27.082 --> 03:21:31.106 percentage, more than 50% or higher, of the cause 03:21:31.138 --> 03:21:35.028 code, the root cause analysis, and contributing cause analysis we do, those events 03:21:35.124 --> 03:21:38.956 has a human performance or human error component to them. And I think 03:21:38.988 --> 03:21:43.220 it goes back to discussions we've had many times around the 03:21:43.260 --> 03:21:47.476 aging of the utility personnel, the new technologies we're implementing, 03:21:47.508 --> 03:21:51.200 there's a lot of human error aspects, and it's something we have to monitor closely. 03:21:52.180 --> 03:21:56.324 Another area we're monitoring pretty closely is around generation, conventional generation 03:21:56.372 --> 03:22:01.068 forced outage rates. We've seen an increasing trend for 03:22:01.124 --> 03:22:04.556 both simple cycle gas units, but more importantly, 03:22:04.588 --> 03:22:08.180 with our coal and lignite fleet. Look at the year over year trends. 03:22:08.220 --> 03:22:11.596 Those horse tide rates are increasing. And I think from 03:22:11.628 --> 03:22:14.676 the analysis we've done in the background related to that, 03:22:14.788 --> 03:22:18.356 a lot of that has to do goes back to the changing resource mix, 03:22:18.428 --> 03:22:22.012 because those units, when they were built back in the seventies and eighties, 03:22:22.156 --> 03:22:25.758 were designed to be base loaded. That's not how we're operating them today. 03:22:25.814 --> 03:22:29.166 They get cycled up and down every night. That creates 03:22:29.198 --> 03:22:32.350 wear and tear on the mechanical systems, changes their capacity 03:22:32.390 --> 03:22:35.478 factors, and that's resulting in the increase in forced outage rates. So that's 03:22:35.574 --> 03:22:39.806 what we're seeing is happening there. One last area that we're monitoring 03:22:39.838 --> 03:22:43.982 pretty closely is around physical security. We saw a very large uptick 03:22:44.046 --> 03:22:47.230 in 2023 with physical security type reported 03:22:47.310 --> 03:22:50.486 events, in particularly particular ballistic events, 03:22:50.598 --> 03:22:54.466 gunfire type accidents. And if you look at the 2024 numbers 03:22:54.498 --> 03:22:58.338 to date, we've already exceeded the 03:22:58.354 --> 03:23:01.714 count so far in 2024, has already exceeded what we saw all of last year. 03:23:01.802 --> 03:23:05.226 So it's definitely not going away. It's getting worse. It's something we have to keep 03:23:05.258 --> 03:23:08.866 hold on. The one area that we addressed is 03:23:08.898 --> 03:23:13.130 actionable, is well known. It's IBR 03:23:13.250 --> 03:23:16.658 voltage ride through issues. And I know the commission is well aware 03:23:16.674 --> 03:23:20.342 of what's happening with NOGRR245, as well as the 03:23:20.486 --> 03:23:24.134 NERC standards that are being developed under FERC order 901. 03:23:24.262 --> 03:23:27.030 So I don't want to go into a lot of details there, but there's definitely 03:23:27.070 --> 03:23:31.010 activity going on that's going to hopefully address this stuff in the future. 03:23:31.990 --> 03:23:35.398 So, as Joseph mentioned, we take this analysis and 03:23:35.414 --> 03:23:38.810 the trends that we do, and we look at it. We identify 03:23:39.150 --> 03:23:42.930 risk focus areas that we want to address. 03:23:43.840 --> 03:23:46.904 And a couple of the things that we identified this year that I 03:23:46.912 --> 03:23:50.360 want to just highlight real quickly. IBR voltage ride through 03:23:50.400 --> 03:23:53.352 issues is one. Physical security, which I mentioned. 03:23:53.536 --> 03:23:57.072 Remote access is another area that's highly critical to 03:23:57.096 --> 03:24:01.184 us. Gas, electric interdependencies, supply chain. 03:24:01.312 --> 03:24:04.400 And then a new one that we added this year was the integration of large, 03:24:04.440 --> 03:24:07.976 flexible loads. When we look at these risk areas, 03:24:08.048 --> 03:24:11.838 we try to evaluate them on two basic criteria. One is 03:24:11.854 --> 03:24:15.198 the likelihood of it, and we're basing that likelihood 03:24:15.254 --> 03:24:19.046 rating on are the number of occurrences we're seeing increasing 03:24:19.118 --> 03:24:22.726 or decreasing. Are there any documented cases of risk? 03:24:22.878 --> 03:24:26.710 Or. And most important, are there any existing controls in place to mitigate 03:24:26.750 --> 03:24:29.998 that risk? And then the consequence or impact of 03:24:30.014 --> 03:24:33.558 that risk focus area is fairly simple. Is it localized to 03:24:33.574 --> 03:24:37.896 a small geographic area or to one entity entity, or is it widespread 03:24:38.088 --> 03:24:41.140 or potentially involving multiple entities? 03:24:42.040 --> 03:24:45.376 So the basic question around these risk focus areas is, what are we doing about 03:24:45.408 --> 03:24:48.704 it? So over the past year and 03:24:48.872 --> 03:24:51.896 previously, we conduct multiple webinars. 03:24:51.928 --> 03:24:55.808 We had over a dozen webinars in 2023, and we planned a similar number 03:24:55.824 --> 03:24:59.144 of webinars this year on one or more of these risk focused 03:24:59.232 --> 03:25:03.208 risk topics. There's been two, two NERC alerts that 03:25:03.224 --> 03:25:07.408 have been issued, one related to cold weather and one related to IBR data 03:25:07.464 --> 03:25:10.460 collection of settings for voltage and frequency ride through. 03:25:10.800 --> 03:25:14.336 We've had multiple workshops, an IBR 03:25:14.408 --> 03:25:18.820 workshop last year and our, we have our ongoing winter weatherization workshop 03:25:19.560 --> 03:25:22.800 also this month or next month, excuse me. We have a physical and cybersecurity 03:25:22.840 --> 03:25:26.780 workshop that we're working on. And then through our compliance monitoring program 03:25:27.690 --> 03:25:32.338 in 2023, we had well over 200 entity 03:25:32.394 --> 03:25:36.354 engagements on specific requirements related to these risk focus areas, 03:25:36.402 --> 03:25:39.030 and we're planning a similar number for this year. 03:25:39.650 --> 03:25:43.538 A couple of other things to mention real quickly on 03:25:43.554 --> 03:25:47.010 the data collection side is we recently 03:25:47.170 --> 03:25:51.594 have completed a questionnaire on the remote access issue to 03:25:51.682 --> 03:25:55.810 all the dark entities nationwide, worldwide. Where we ask them, the specific question 03:25:55.930 --> 03:26:00.026 is, do you allow entities or companies outside of your organization 03:26:00.098 --> 03:26:04.034 to access your systems for the purposes of monitoring, 03:26:04.162 --> 03:26:08.150 operational control or maintenance of the system? And the results are 03:26:09.090 --> 03:26:12.986 interesting to say the least, as far as the number that 03:26:13.018 --> 03:26:16.466 shows up. And the other thing real quickly to 03:26:16.498 --> 03:26:19.694 mention is there's currently a project going on at the NERC 03:26:19.742 --> 03:26:23.118 level. It's called the Interregional Transmission Capability Study. It's kind 03:26:23.134 --> 03:26:26.302 of an outfall of winter storm Elliott, where they're looking at 03:26:26.326 --> 03:26:30.198 transfer capabilities between regions and between the interconnections to see 03:26:30.214 --> 03:26:33.862 if we can mitigate or eliminate the risk that Winter Storm Elliot and Winter 03:26:33.886 --> 03:26:37.558 Storm Uri posed. So that's kind of it in 03:26:37.574 --> 03:26:40.690 a nutshell of what's in the report. Again, 03:26:41.150 --> 03:26:44.302 as Joseph mentioned, it's available for the Commissioner if you have any questions. 03:26:44.326 --> 03:26:48.176 Just feel to reach out. Thanks for that. Just one quick question. Yes sir. 03:26:48.288 --> 03:26:51.712 (item:23:Chairman Gleeson's question on electric gas coordination) You talked about electric gas coordination. One of the things I think we've 03:26:51.736 --> 03:26:55.432 been lauded for is our electric supply chain map, and we've 03:26:55.456 --> 03:26:59.200 talked to federal officials about that. To your knowledge, when you talk to other 03:26:59.240 --> 03:27:03.064 REs, has anyone else adopted something similar to that map? I have not seen that 03:27:03.112 --> 03:27:06.864 with the companies I've talked to. I know we do. When we look at 03:27:07.032 --> 03:27:10.354 infrastructure interdependencies, I know gas electric has gotten a lot of 03:27:10.362 --> 03:27:14.282 the press and the conversation, but we can't lose sight of the other 03:27:14.466 --> 03:27:18.030 industries that depend on that. We depend on in particular 03:27:18.330 --> 03:27:21.730 because we collect through the GAD system, we collect outage 03:27:21.770 --> 03:27:25.002 data related to fuel, lack of fuel issues, but we also look 03:27:25.026 --> 03:27:28.610 at water supply issues that can affect a plant on or offline, 03:27:28.650 --> 03:27:32.762 and also telecom issues that can affect an entity's ability to control 03:27:32.826 --> 03:27:36.018 or monitor their system. So we're looking at a wide breadth of things and not 03:27:36.034 --> 03:27:39.202 just focused on gas. Commissioners, 03:27:39.266 --> 03:27:42.946 questions? Thank you. Thanks, y'all. Appreciate it. 03:27:43.018 --> 03:27:43.990 Thank you very much. 03:27:47.450 --> 03:27:51.178 All right, Shelah. I think that brings us to Item 34. 03:27:51.354 --> 03:27:55.386 Is that right? Okay. (item:34:Chairman Gleeson lays out Project No. 50664) So Item 34 is Docket No. 03:27:55.458 --> 03:27:59.946 50664, Issues related to the state of disaster 03:28:00.018 --> 03:28:03.468 for coronavirus disease 2019. So this came up in 03:28:03.484 --> 03:28:07.268 our discussions around El Paso last time that went into it. 03:28:07.444 --> 03:28:12.480 I had questions about regulatory assets being booked for COVID. 03:28:13.100 --> 03:28:16.612 So what we have. We have a second draft order filed in this docket 03:28:16.636 --> 03:28:20.444 today. That would require utilities 03:28:20.492 --> 03:28:23.572 to stop booking COVID related expenses as of the 03:28:23.596 --> 03:28:26.548 date of this order. And I think we talked about it in terms of El 03:28:26.564 --> 03:28:29.588 Paso. So everyone was in agreement with this? 03:28:29.684 --> 03:28:32.860 Agreed. Okay. (item:34:Motion to approve the proposed order filed on this project on July 24) Then I will entertain a motion 03:28:32.900 --> 03:28:36.572 to approve the proposed order filed in this project on July 24. 03:28:36.676 --> 03:28:40.212 So moved. I second. I have a motion and a second. All those in favor 03:28:40.236 --> 03:28:43.280 say aye. Aye. Opposed? Motion prevails. 03:28:43.700 --> 03:28:47.852 Okay. (item:38:Chairman Gleeson opens up item for update from Executive Director, Deputy Executive Director or Commission Counsel) The last thing I have is No. 38, an update 03:28:47.916 --> 03:28:51.124 from our Executive Director, Deputy Executive 03:28:51.212 --> 03:28:53.620 Director and Commission Counsel. 03:28:55.280 --> 03:28:58.616 (item:38:PUC Deputy Executive Director Barksdale English gives updates on TX Energy Funds, New Director of DCE and workshop that follows the Open Meeting) Thank you, Chairman. Three quick updates. 03:28:58.768 --> 03:29:03.216 First, just a brief reminder that the loan 03:29:03.248 --> 03:29:06.408 applications for the Texas Energy Funds in ERCOT 03:29:06.464 --> 03:29:10.472 loan program are due on Saturday, July 27 03:29:10.496 --> 03:29:13.616 at 11:59 p.m. Central daylight time. 03:29:13.688 --> 03:29:18.182 So to all the eligible applicants, please get those applications in. 03:29:18.376 --> 03:29:21.650 Last time I looked, which was probably about 50 hours ago now, 03:29:21.770 --> 03:29:25.258 we had somewhere around ten or twelve applications submitted. 03:29:25.394 --> 03:29:29.950 Another 60 in flight. So we're hoping that these last 03:29:30.450 --> 03:29:33.906 72 hours or so, we'll see a good flurry of activity 03:29:33.978 --> 03:29:37.506 on the TEF portal. The second 03:29:37.618 --> 03:29:40.994 thing that really gives me a lot of pleasure to announce. 03:29:41.082 --> 03:29:45.112 is that Connie and I have decided on 03:29:45.176 --> 03:29:48.936 who the next Director for the Division of Compliance and Enforcement 03:29:48.968 --> 03:29:53.180 will be. And I'm very pleased to announce that our very own John Lajzer 03:29:53.640 --> 03:29:56.700 will be elevated to that position starting August 1. 03:29:57.320 --> 03:30:00.976 JB's been with the PUC for about 6 months now in the Enforcement 03:30:01.008 --> 03:30:04.864 Division. He's been a great asset. He comes from a long 03:30:04.912 --> 03:30:08.472 line of enforcement jobs prior to the PUC. So he's going to bring 03:30:08.496 --> 03:30:11.258 a lot of experience and knowledge in that regard on both sides of the table, 03:30:11.314 --> 03:30:14.682 which is great. And he also has the added benefit of 03:30:14.826 --> 03:30:18.234 being a PUC baby. As his dad was an employee 03:30:18.282 --> 03:30:21.178 here back in the days when Daryl Teigen still had a mustache. 03:30:21.314 --> 03:30:24.906 So I'd like to just welcome JB 03:30:25.058 --> 03:30:28.442 to the position and thank you for 03:30:28.506 --> 03:30:31.510 stepping up. That's amazing. Congratulations. 03:30:33.370 --> 03:30:37.060 I will say just real quick. You know, it's hard to take a job 03:30:37.100 --> 03:30:40.556 like that, because the last guy that had it was amazing at it. Big shoes 03:30:40.588 --> 03:30:43.988 to fill, so. That was you 03:30:44.004 --> 03:30:48.092 Barksdale. Oh, that was me? I mean, you're talking 03:30:48.116 --> 03:30:51.260 to the guy who's got the world's best boss coffee mug out here, 03:30:51.300 --> 03:30:54.668 so. And then the last thing to announce 03:30:54.724 --> 03:30:58.404 is as you mentioned, Chairman. There is a workshop following 03:30:58.492 --> 03:31:01.806 this meeting. And given the time and and how long we think 03:31:01.838 --> 03:31:05.566 that workshop will start. If assuming there's not much more 03:31:05.718 --> 03:31:09.550 to occur here in this meeting. Then perhaps we can all gather here 03:31:09.630 --> 03:31:12.870 back at 2:00pm to start that 03:31:12.910 --> 03:31:16.454 workshop, if that's okay with everybody? We expect somewhere between 03:31:16.502 --> 03:31:19.182 two and a half and 3 hours for that. So, trying to get everybody out 03:31:19.206 --> 03:31:22.558 on time. Our agenda is posted online for anybody 03:31:22.574 --> 03:31:25.686 who wants to follow the bouncing ball at home. And that's it. 03:31:25.758 --> 03:31:29.768 Perfect. Thank you, Barksdale. (item:38:Chairman Gleeson adjourns meeting) Okay, I don't have anything else. 03:31:29.904 --> 03:31:32.304 With there being no further business in front of us. This meeting of the Public 03:31:32.352 --> 03:31:34.280 Utility Commission of Texas is hereby adjourned.