WEBVTT

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(item:0:Chairman Gleeson calls meeting to order) This meeting of the Public Utility Commission of Texas will come to order. To consider

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matters that have been duly posted with the Secretary of State for

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August 15, 2024. Good morning,

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Shelah, Connie, Barksdale.

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Connie, did you ask to have the air

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conditioning turned off or what's going on here? I've been freezing all week.

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Okay, so this is your fault. Absolutely. I just want to confirm. Melanie

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just took care of it and it should be cooling down soon.

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Okay. Well as I see it, if that clock back there is correct.

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It's about 75 degrees and 49% humidity. So I would say

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if people want to take their jackets off if they're wearing them, feel free.

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I saw Barksdale leading the charge. Then I saw Eric didn't know what to do.

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He took it off, then he put it back on. We don't want to confuse

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anybody. Yeah. So feel free,

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folks. It's rather uncomfortable in here.

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So, good morning everyone. I think Commissioners, if it's okay

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I know we've got Centerpoint here. I think maybe take things out of order again

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like we've done in previous open meetings. Maybe take up

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51, 52, and 58 first so that they

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can come up and we can ask questions. I know they filed a lot of

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information about mobile gen. And then I propose we take up

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43 and 44 of the two rules related to the storm response.

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That we have up at this open meeting, if that's all right with y'all?

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Okay. (item:51:Chairman Gleeson lays out Project No. 56793) Then I would call up Items

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51, 52, and 58. That is Project

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No. 56793, Issues related to the disaster

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resulting from Hurricane Beryl. (item:52:Chairman Gleeson lays out Project No. 56822) Project number 56822,

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investigation of emergency preparedness and response by utilities

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in Houston and surrounding communities. (item:58:Chairman Gleeson lays out discussion & possible action regarding customer service issues) And then 58 is discussion and

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possible action regarding customer service issues, including, but not limited

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to, correspondence and complaint issues. Jason,

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if you want to come up and whomever else you brought.

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(item:51:Jason Ryan, CenterPoint's Executive VP's update on action plan, 56793) Good morning and thank you, Chairman Gleason and Commissioners. I'm Jason

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Ryan, Executive Vice president at CenterPoint Energy.

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Thank you for the opportunity to speak with you today about how we use

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temporary emergency generation during Hurricane Beryl. With me

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today is Eric Easton. Eric is an Officer and part of

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our Electric Operations, including these assets that we're going to

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be talking about today. Many of you may have met Eric before

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he operated our system during Winter Storm Uri and executed

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the ERCOT load shed orders at that time.

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Now, part of his responsibility is bringing Texans back on

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line with power with these temporary emergency generation assets.

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I wanted to cover three things with you today before

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taking questions, if that's okay. Thought I'd provide an update

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of where we are on our action plan since we

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last visited on July 25. I thought then

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I could provide a little bit of background on these

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temporary emergency generation assets and the risks that we mitigate

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with them. And then I'll provide a walkthrough

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of the material that we filed on Monday in response to Miss

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Corona's questions. That was filed in Project

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56793, and it's Item 24

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there. We did file a letter this morning. It's item

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25 in that same project that does a little bit of that walkthrough.

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But I thought I'd provide some context to you and the public

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on what that information is. So I'll cover those three things, if that's okay.

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Perfect. All right. So first, let me start with the update. Since we

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were in front of you on the July 25,

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we presented at that point our

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action plan to address the remainder of the hurricane

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season and take us to the end of the year with some field

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activity, better communications, better operations more

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generally. Shortly after that, we accelerated

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that work. So we are now completing

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most of that work instead of by end of year this

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month. So we had some deadlines that we

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hit on August 9, some deadlines that are today,

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August 15, many more deadlines by

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end of the month. And then a couple of things that continue

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beyond that. I know that we need to provide

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to you a complete set of

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information on how we mark some of those activities.

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Complete. And, and so we're also pulling that information together to

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provide to you in this project. Let me

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give you a couple of examples of some of the work that we're completing

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this month. I'll focus on some of the stuff that's out in the communities that's

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most visible to our customers and to our

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communities. So, for example, we decided

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to trim trees along 2000 miles of

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distribution line and complete that this month instead of complete it by end

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of year. We are 943

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miles into that work as of end of

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day yesterday. So we are on track to

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meet that goal of trimming the 2000 miles of distribution lines

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by end of month. Those were the highest risk miles.

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So these are the miles where you

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get the most bang for your buck, so to speak, on trimming

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vegetation. To put that in perspective, you know, the distance between

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Houston and El Paso is a

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little, you know, 750 miles or so.

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So 2000 miles of distribution line that's trimmed

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this month is the equivalent of our line workers going from

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Houston to El Paso and back to Houston and then some more.

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So it's a lot of work that

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the men and women out in the field are completing every day,

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again proud of what they've accomplished so far with zero

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safety incidents and look forward to continuing

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to complete that work again with that same safety track record.

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The other major thing that we're doing out in the field is replacing

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1000 distribution poles that are wooden that

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are scheduled for replacement this year. We're replacing those

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wooden poles with composite poles and we are

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640 poles into it as of end of day yesterday.

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So again, well on track to complete that work.

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But like I said, with respect to the 40 plus commitments in

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our August work plan, we will pull together the

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documentation of how we consider those complete.

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Just an example, as of today is our deadline to

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relaunch our right tree right place initiative. That's the initiative where

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we educate the public about not

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putting trees that grow really tall right under our power lines. Instead provide

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them with information about planting the right tree in the right place

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if they want something closer to the, to the power lines.

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We need to show you guys how, how we are marking that

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complete. And so like I said, we will pull that information

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together and file it in Project 56793 in

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the coming days. So as

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part of our commitment to transparency, we've been providing your office and

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members of the Legislature and the Governor's Office some updates

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on that activity. We will provide you another update

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tomorrow on where we are, and we'll provide an update every

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Friday until the end of the month.

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We then will quickly pivot to our next phase

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of this work so we know that we're not done at the end of

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August when we complete this work. So we'll be sharing with you our

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work plan for the remainder of hurricane season,

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how we're going to be prepared for the Winter season

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and what we're going to do leading up to next hurricane season, and then

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longer term after that for greater resilience.

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Before I address the main topic of today,

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the temporary emergency generation, I want to pause and see if there are any questions

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at this point on that August work plan or our plan to

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continue to update you and provide transparency on the complete items.

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Sure, Commissioners? (item:51:Commissioners comments on CenterPoint's action plan, 56793) Jason, thank you for that update.

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I've been working with Connie on the creating this framework

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for showing the how the action items have

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been completed, and I think that that'll make a lot

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of sense so that the public and we and

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the legislature know the how and the completion of the action items. So I

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think it'll ultimately be a positive effect to show

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if, you know, you say you're out there doing a lot of hard work and

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getting all this stuff done and we're all moving to, you know,

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we're all on the same mission. Right. You want to provide continuous

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and adequate service for your customers. You want to sort of fix the issues that

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happen after the hurricane. And we want the same thing. So this

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is, this is your action plan you came up with and the,

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showing the, how I think is going to be very important for everybody. So I

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appreciate you working with Connie. And Connie, thank you for getting the center point and

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creating this process. Thank you.

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I just have one question. So on your action plan,

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and you've given us a progress report on the field activity,

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the trimming of the trees and then the conversion from the

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wooden poles to the composite poles. And you mentioned that

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these were the highest,

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I guess, priority risk associated miles.

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And so my question was, okay, we've obviously had those areas that were impacted

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in the path of barrel, but the concern,

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of course, is that we have the remainder of hurricane season. And so there

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are some areas that would be at risk beyond just

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that path that happened previously. And so in

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this action plan, is this something that is addressing,

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you know, your service area as a whole?

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Yes, ma'am. And so, and that gets to the, to the point of we

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need to share with you all and the public what our

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plan is after August. You know, we targeted the 2000 riskiest

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miles of our distribution lines. There is

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more work to do after that. And we need to lay that out

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transparently so that everybody knows what we're going to be doing.

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And we've been engaging with customers that are impacted by that work

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in a better way than we have in the past in terms of letting them

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know that we're going to be in their neighborhood, that they could experience

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some outages with some of this field work. And so we

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can, when we provide the next phase of

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work starting in September, we will be addressing

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the entire area as we continue

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to trim the riskiest miles that are left after these first 2000.

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So the riskiest miles were beyond just the,

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this initial 2000 miles was

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beyond just the barrel impact as well as the poles.

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So when would you anticipate? I guess again,

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thinking about, you know, wanting to make sure during this hurricane season

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that the entire service area, as much as we can,

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has, you know, we've mitigated that risk or y'all have

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mitigated that risk. So what would you anticipate in

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terms of meeting that expectation during this hurricane

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season? Yes, ma'am. And I may ask Eric,

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he's been pulling together the next phase of our action plan to see

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if he has something that he can share on that right now. I know we

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plan to finalize that by next

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week, but if there's anything early to share, I'll let Eric do that.

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Sure. (item:51:Eric Easton, CenterPoint's VP of Grid Transformation Investment Strategy, 56793) Eric Easton, Vice President of Grid Transformation Investment Strategy,

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so let me go back to just how we selected the risky

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miles. So we looked at vegetation and its proximity to

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our circuits. We also looked at the outage

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concentrations that occurred during Hurricane Beryl and

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also kind of consider where in the service territory

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those outages occurred. Were they on critical circuits?

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Do we have critical customers on those circuits? So that's the

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prioritization process that will continue when you

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look at the miles that we're trimming. So the 2000 miles are really

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across our entire service territory. That's not just one particular area.

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And some of that is going to continue as we go into

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the next phase. So we look at how many

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instances there are of vegetation encroachment for a given circuit

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mile and that helps us to prioritize. So we'll keep working down that,

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listen. And expanding out to the less risky circuits,

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but really prioritizing across all 1800 feeders

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that we have. Yeah, I think my concern is that, you know, we've obviously

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had, you know, a four court press here, right. In terms

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of, you know, the recovery process, but want to make sure

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that we are kind of continuing that during this current hurricane

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season so that we can mitigate as much risk as we can outside

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of the area that was recently impacted. That's correct. And really we had

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impacts across our entire footprint. So when we talk about the

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path of the storm, it impacted all

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of our system. It's just that some had higher concentrations

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and that was usually where we saw higher concentrations

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of vegetation and then also where we had higher soil

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moisture. And so in those areas we saw more trees that

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actually blew over because of those two conditions.

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The result of the droughts that were stressing the trees and

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then winter storm yury that stressed the trees and then the excess

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rainfall this year. And so those are some of the areas that we focused on,

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but we are continuing to prioritize those

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locations. And then we are also from a resource perspective,

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evaluating how many of the resources that we have on hand today

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will stay and that's what's going, going to come out in the next portion of

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the plan that Jason was talking about. Good. I think that's

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very important that we, you know, we continue to focus on this and

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that we get, you know, as resilient as we can in

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this current hurricane season. Right. For the areas

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that are potentially impacted, that are kind of left over after the

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action plan is resolved in the first phase. Thank you.

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Are we asking about anything except for mobilegen right now?

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So I think, yeah, anything private that they've gone over. And if it's not a

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part, I would say if it's not a part of their prepared remarks and you

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want to touch on it, go ahead and talk about it. Now.

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(item:51:Commissioners questions for CenterPoint on rate payer costs, 56793) Couple questions.

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I'm worried a little bit about how the costs

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that right payers are going to see are

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validated, audited, understood to be

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fair, and that

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might be as a result of if you all are going

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to file a securitization or your next base rate

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proceeding, how do

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you all audit these third party costs? So if you're hiring,

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if you've got 3000 veg management crews out

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there, how are you auditing that to make sure that

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those costs are within the parentheses that you put

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on that? Or is that a blank check that says

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trim, go trim, we'll pay whatever.

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Yes, sir. So maybe I'll address it in two different contexts.

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One, mutual assistance for a storm,

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and then maybe the current activity that

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continues to use crews external to our own.

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So, and I'll speak directly

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to the de Racho in May and to Beryl. So as

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we get invoices in from the men and women that

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came into the Houston area to help us restore power,

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our internal audit department will

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help us come up with the right process to review

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that. We will review it for things that

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look excessive to us and

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we won't pay those costs that look excessive to us. But you have to realize

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in that situation, there could be hotel rooms that were more expensive,

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things that might, in an emergency context,

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you might spend money on that you wouldn't in a normal context.

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So we take that into account, but we won't pay unreasonable

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costs to those men and women that came and I

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in to help us. So we will have our internal audit department

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leading a process. We will also hire an external audit firm

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to look at our work and provide

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testimony in the proceeding to determine

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what costs are reasonable ultimately. So you'll have that two

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layer check. Our internal audit team, which reports

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to our board, not to, only to management,

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and then the external audit firm as well, that we're going through

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a process right now to select as

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it relates to things like food and lodging

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for those crews where we provide that,

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we will scrutinize any food or lodging expenses

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beyond that and whether or not we should pay that

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and whether that was reasonable. So that's an example of some of

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the things that our folks will look at. We do

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have some mutual assistance crews that are self contained

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where they provide their own lodging, their own food. It's important

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that we have both types of mutual

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assistance crews. And so for those crews that we do not provide lodging

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and provide food, we would expect them to submit

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invoices for that. And we will look at that tomorrow, make sure that we think

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that those were reasonable costs. Ultimately, it's not our judgment,

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though, on what's reasonable. Even though we're going to have internal audit, external audit.

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We will then have a process here at the commission for

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intervening parties and the staff to look over that and

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get their opinion on what's reasonable in this work

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that we're doing right now.

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Some work that we're doing is still related

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to hurricane barrel. So, for example,

19:01.260 --> 19:05.292
you could have a distribution pole that's leaning but didn't cause

19:05.316 --> 19:09.116
an outage, but we need to fix that work. So we

19:09.148 --> 19:12.476
did continue some external

19:12.508 --> 19:14.480
crews to help us complete that work.

19:15.540 --> 19:19.000
But maybe let me speak to the vegetation work that we're doing right now.

19:22.080 --> 19:25.624
A very similar process to mutual assistance during a storm.

19:25.672 --> 19:29.984
We have staging sites set up. We have arranged hotels

19:30.032 --> 19:33.420
for some of them. We have arranged meals for some of them,

19:33.880 --> 19:37.336
but not all of them. Right. So you're still going to have those two types

19:37.368 --> 19:40.896
of crews, some that are self contained, some that we're providing things

19:40.928 --> 19:44.940
for. And so we will go through that same process to

19:45.840 --> 19:49.546
review costs before we pay them. And then to

19:49.578 --> 19:53.190
the extent that any of these costs are recoverable, most of them will not be.

19:54.090 --> 19:57.186
To the extent these costs are recoverable, they would go through that same kind of

19:57.218 --> 20:01.042
review process. And what I mean by that, we know that

20:01.226 --> 20:05.186
there is not a vegetation management tracker that

20:05.218 --> 20:08.634
exists right now. And so for a lot of the vegetation

20:08.682 --> 20:12.298
management work, that is on our dime. So that's

20:12.314 --> 20:15.674
why I say for the stuff that's ongoing, that's recoverable, there'll be

20:15.682 --> 20:19.336
a process for the stuff that's ongoing that's not recoverable. We're paying

20:19.368 --> 20:23.060
that. I appreciate that.

20:26.120 --> 20:30.920
I hope the audits are separate

20:30.960 --> 20:34.416
for like the directo and

20:34.488 --> 20:38.720
barrel so we can look at those in terms of very specific amounts

20:38.760 --> 20:41.220
associated with those events.

20:43.600 --> 20:47.334
I have heard twice that that mutual assistance

20:47.382 --> 20:50.750
companies have created their own man camps and brought in their own

20:50.790 --> 20:54.302
food and all of that. And I'm not here

20:54.326 --> 20:57.598
to say whether that's right or wrong, but I think the

20:57.614 --> 21:01.118
ratepayers deserve to know if those costs are in line with

21:01.294 --> 21:04.422
what you're expecting from the guys that come in from Michigan and the guys that

21:04.446 --> 21:07.790
come in from Louisiana. And so I hope

21:07.830 --> 21:11.530
that you all will be looking at holistically.

21:11.860 --> 21:15.332
We don't. When we want mutual assistance, folks, gosh knows we need

21:15.356 --> 21:18.772
them now. So we don't

21:18.796 --> 21:22.948
want to do things that make mutual assistance harder.

21:23.004 --> 21:26.436
But the ratepayers deserve every audited, every component,

21:26.508 --> 21:29.988
every nickel scrutinized so that we

21:30.004 --> 21:33.212
can ensure that they're getting the best service. Yes,

21:33.236 --> 21:37.092
sir. And we do plan to file separately the

21:37.196 --> 21:40.786
Mayenne de Racho costs versus

21:40.858 --> 21:44.750
the hurricane barrel costs. So we won't be

21:45.570 --> 21:47.510
conflating the two events.

21:49.130 --> 21:52.750
Most likely that de Racho storm cost

21:53.050 --> 21:56.870
proceeding occurs or begins

21:57.330 --> 22:01.106
Q4. But we're still getting invoices from that

22:01.218 --> 22:04.670
event. So it will take us a while

22:04.850 --> 22:08.478
longer to get the invoices and go through the audit process,

22:08.574 --> 22:11.742
both internal and external, for the. For hurricane barrel.

22:11.886 --> 22:15.358
So I wouldn't expect that to be until well into next

22:15.414 --> 22:19.038
year. I'm sorry, I think I cut you off. Oh,

22:19.054 --> 22:22.494
no, no. I was. But I do have a follow up question,

22:22.542 --> 22:25.838
actually, because Commissioner Glotfelty, he did raise a good point on the cost

22:25.894 --> 22:28.702
impact of all the actions in the plan. Obviously, they need to be taken to

22:28.726 --> 22:32.260
get us through hurricane season safely.

22:32.420 --> 22:36.396
And so. But with respect to costs for

22:36.468 --> 22:39.884
technologies like the automated

22:39.932 --> 22:43.804
devices, AI, all of that, are you following a similar process

22:43.892 --> 22:47.660
and ensuring that, you know, you're evaluating costs and picking

22:47.780 --> 22:51.840
the most effective but also cost effective solution from that standpoint?

22:52.300 --> 22:56.252
Yes, ma'am. And then that will also be the subject of, you know,

22:56.276 --> 22:59.284
we have the burden of proving that what we're doing

22:59.332 --> 23:02.440
there and investing in technology wise is prudent.

23:02.980 --> 23:06.260
And so the time that we come in to seek

23:06.300 --> 23:09.596
recovery of those investments, we bear that burden of proof.

23:09.748 --> 23:13.988
Folks like my colleague Eric will be providing testimony to explain

23:14.164 --> 23:17.812
how we chose, what we chose, why we think that was the

23:17.836 --> 23:21.240
right solution, and what the benefits are

23:21.580 --> 23:25.770
versus the costs of adopting those solutions.

23:26.270 --> 23:30.010
So typically, you don't do that in a DCRF unless

23:31.070 --> 23:34.198
the presiding officer orders that the prudence

23:34.254 --> 23:37.630
be determined in that case. So it could be as early as

23:37.790 --> 23:41.486
a DCRF filing. It would be no later than,

23:41.598 --> 23:45.142
you know, the next rate case where all that capital

23:45.326 --> 23:48.278
is looked up for prudence and the actual cost.

23:48.334 --> 23:52.828
Right. So the actual cost of all of these measures that

23:52.844 --> 23:56.732
will ultimately be read for prudence. That's right. I think it'd also be good to,

23:56.796 --> 24:00.756
if you included in that cost that you denied in

24:00.788 --> 24:04.588
some way. So if you found excessive,

24:04.644 --> 24:08.044
it doesn't have to be line item. But, you know,

24:08.212 --> 24:13.612
it would be good to have an understanding of how maybe

24:13.636 --> 24:17.710
it's a metric on thoroughness of the audit function that you're finding some things

24:17.830 --> 24:22.126
I don't know, but that might be a good thing to add.

24:22.238 --> 24:26.390
Yes, sir. So this entire process ought to be very transparent,

24:26.430 --> 24:30.478
and I think that it's consistent with what you just said. We should line

24:30.534 --> 24:34.102
item the things that we did not pay because we didn't think it was reasonable.

24:34.206 --> 24:37.854
We should then make sure our external auditor is doing the same thing

24:38.022 --> 24:41.990
when they're reviewing our homework internally so that

24:42.070 --> 24:45.328
everybody can see the work that's already done. You don't have to trust us

24:45.384 --> 24:49.096
that that work was done and we agree.

24:49.168 --> 24:51.860
We'll be very transparent in those proceedings. Thank you.

24:54.480 --> 24:58.096
Okay, Jason, go ahead. And before I move on to the emergency generation topic.

24:58.128 --> 25:01.616
(item:51:Jason Ryan gives information on CenterPoint Open Houses, 56793) Let me just do a plug, if I could, for the open houses that

25:01.768 --> 25:05.016
are starting this Saturday. We're hosting 16 of

25:05.048 --> 25:09.544
them around the greater Houston area to get customer feedback,

25:09.672 --> 25:13.248
to demonstrate our new outage tracker, to help people sign up

25:13.264 --> 25:16.860
for power alert service if they're not already, and get a lot of other information

25:17.640 --> 25:21.624
at the same time that we're getting their feedback. I appreciate

25:21.672 --> 25:24.260
the Commission seeking feedback as well.

25:24.720 --> 25:28.240
And so I think all of that feedback brought together will help

25:28.280 --> 25:31.904
us ensure that it's not just our ideas that we're implementing,

25:31.952 --> 25:36.536
but we're getting that feedback from our customers so that 16 town

25:36.568 --> 25:40.904
halls open house events in

25:41.032 --> 25:44.060
August and September and so we'll report back.

25:44.520 --> 25:48.272
I know that many of you will attend as well. We'll report

25:48.336 --> 25:52.288
back in our status reports how those are going and

25:52.344 --> 25:56.064
obviously make any changes that are needed. If this is not convenient

25:56.112 --> 25:59.432
times for our customers. We did split them, some on the weekends,

25:59.456 --> 26:03.616
some on weekdays, some during the day, some in the evenings. We will

26:03.808 --> 26:07.080
pivot if we need to, if this is not meeting the needs of our customers,

26:07.120 --> 26:10.528
to make sure that they can give us that feedback. And the locations are spread

26:10.584 --> 26:14.720
throughout your service territory? Yes, sir. There's at least one open

26:14.760 --> 26:18.368
house in every county, so we cover twelve counties

26:18.544 --> 26:21.808
and then we're doing a number of them in Harris county. As you

26:21.824 --> 26:25.296
would expect, we may decide

26:25.328 --> 26:28.608
that we need to add some over time.

26:28.664 --> 26:32.344
So I wouldn't take this list as a

26:32.392 --> 26:35.878
set list. That is never going to change. If we need to

26:36.014 --> 26:39.862
continue doing them past September, we will. If we need to add

26:39.966 --> 26:43.370
more coverage in particular areas, we will.

26:43.870 --> 26:47.814
And we will report on that along with our other activities

26:47.862 --> 26:52.166
that we report on. Can I ask a question about that just

26:52.198 --> 26:56.182
real quick kind, did you have something you want to add? Before we go

26:56.246 --> 26:59.950
into the mobile general discussion, I'd like to recap

26:59.990 --> 27:02.570
the work that we're doing with Centerpoint on their commitment list.

27:03.670 --> 27:07.930
I was just going to ask, so when you have these open meetings

27:08.630 --> 27:12.638
and a customer comes up and complains or

27:12.774 --> 27:16.638
says, tells their story, what do you do

27:16.654 --> 27:20.742
with that afterwards? Do you like Chevy

27:20.766 --> 27:24.550
Chase at the Grand Canyon and go, okay. Or do you take

27:24.590 --> 27:28.462
that and have their address and tie it into a system where you

27:28.486 --> 27:32.358
know what their challenges were and you can geo reference that and

27:32.374 --> 27:36.342
go back and talk to them? Or do you aggregate all that

27:36.366 --> 27:40.046
and try to figure it out and normalize it? What do you do after that?

27:40.158 --> 27:44.054
Yeah, so I suspect we'll get feedback

27:44.102 --> 27:47.070
in at least three different ways at these events.

27:47.110 --> 27:50.406
Some of them will be through more informal discussions as

27:50.438 --> 27:53.886
we interact with our customers. Our entire leadership

27:53.918 --> 27:57.166
team and several hundred of our employees will be

27:57.198 --> 28:00.814
attending the to help both guide customers

28:00.862 --> 28:04.174
through the various

28:04.222 --> 28:07.990
stations to get information and also the various places to provide their feedback.

28:08.030 --> 28:11.742
So I suspect it'll come up in conversation that's less formal. But there

28:11.766 --> 28:15.662
will be at least two different ways of formally providing

28:15.846 --> 28:20.182
feedback at those open houses. One through actually

28:20.366 --> 28:24.634
writing down or entering in comments if they want to formally

28:24.782 --> 28:28.750
lodge comments. There will also be

28:31.130 --> 28:35.194
a less formal but still documented way of providing

28:35.242 --> 28:40.106
feedback in a more interactive way at

28:40.138 --> 28:44.154
some of these stations. And we will obviously,

28:44.322 --> 28:47.922
for the conversations, we will be following up with our

28:47.946 --> 28:51.662
employees and our leadership to get downloads of

28:51.726 --> 28:55.438
generally, what was the topic, what were the ideas?

28:55.574 --> 28:59.730
But these more formal ways clearly are documenting addresses,

29:00.510 --> 29:03.758
more information about the customers. Those are more formal ways, very similar to

29:03.774 --> 29:06.930
what you all are doing in terms of formal written comments.

29:07.390 --> 29:10.990
We want to make sure that we're getting all of that. We also will

29:11.030 --> 29:14.950
have interpreters at many of these open

29:14.990 --> 29:18.716
houses so that for people that speak Spanish or Vietnamese,

29:18.878 --> 29:22.060
Houston is a very diverse community. We want to make sure we're not leaving out

29:23.240 --> 29:26.984
members of our community, so we'll have that

29:27.032 --> 29:30.740
option as well at many of the locations.

29:33.040 --> 29:37.080
I think back at my time when we were building transmission lines and we were

29:37.120 --> 29:40.272
doing right away work, talking with different landowners or having

29:40.376 --> 29:44.616
public open houses, and we

29:44.728 --> 29:47.580
strived or strove, I don't know what the word is,

29:49.080 --> 29:52.640
to get as much information as we possibly could from everybody,

29:52.720 --> 29:55.968
and we geo referenced that in a database so that we

29:55.984 --> 29:59.576
could go back and actually look at them and see if we solve their

29:59.608 --> 30:02.180
problem and then let them know if we solve their problem.

30:03.320 --> 30:06.448
I just. I hope that you all can be thinking forward like that in a

30:06.464 --> 30:10.672
way that keeps that customer involved and

30:10.736 --> 30:13.848
up to date. Yes, sir. As opposed to just they come

30:13.864 --> 30:17.292
and complain and don't hear anything. Understood. And very similar to

30:17.316 --> 30:21.308
how we run these kinds of feedback sessions

30:21.364 --> 30:25.332
for transmission lines. We do want our customers feedback,

30:25.396 --> 30:28.636
just like we want landowner feedback when we're

30:28.668 --> 30:32.676
talking about transmission lines, so that we can change our

30:32.708 --> 30:36.164
route based on that landowner feedback. So we really do want

30:36.212 --> 30:39.668
that feedback. That's why we make sure that we have both

30:39.724 --> 30:43.196
informal ways. If somebody doesn't want to actually write something out or type

30:43.228 --> 30:46.676
something out, but if they do, we welcome that. And if they

30:46.748 --> 30:49.080
do these more interactive ways as well,

30:49.740 --> 30:52.972
and one of the good things about helping them

30:52.996 --> 30:56.500
sign up for things like power alert services, then we will have their contact

30:56.580 --> 30:59.732
information and can follow back up with them. So we

30:59.756 --> 31:03.028
definitely. One of the reasons why I want to pitch this while I have the

31:03.044 --> 31:06.764
microphone is to make sure that people know about these.

31:06.892 --> 31:10.950
There's been some local media coverage today about these kicking off,

31:11.110 --> 31:14.862
and we'll continue to use our social media channels to make sure our

31:14.886 --> 31:19.222
customers stay aware. Nextdoor apps, things like that. Stay aware

31:19.286 --> 31:22.970
as these things occur over the next 45 days. Thank you.

31:24.630 --> 31:28.046
(item:51:Connie Corona, PUC Executive Director gives recap of their work with CenterPoint) Thank you. So, just to recap what we're working

31:28.118 --> 31:31.574
on, we've heard testimony from

31:31.662 --> 31:36.180
Mr. Ryan and others here at the Commission, at the Legislature.

31:36.340 --> 31:39.980
They provided some progress reports

31:40.100 --> 31:42.320
in writing. There's a website,

31:42.780 --> 31:46.840
and all of that is a lot of information.

31:47.300 --> 31:52.324
And what we are seeking is to have it compiled

31:52.372 --> 31:55.716
into a single list with an

31:55.748 --> 31:58.640
expected completion date, a progress report,

31:58.990 --> 32:02.610
and a description of how

32:02.990 --> 32:06.310
the progress was made and how the completion was

32:06.350 --> 32:10.406
measured. So our Staff is working on that with

32:10.438 --> 32:13.662
Mr. Ryan and the company. (item:51:Chairman Gleeson confirms the Commission's Open Meeting in Houston) Thank you,

32:13.686 --> 32:17.126
Connie. And now is probably maybe a good time to mention we

32:17.158 --> 32:20.566
too are going to hold an open meeting, a Commission

32:20.638 --> 32:24.536
led work session in Houston. I believe, Saturday, October 5.

32:24.638 --> 32:28.700
I think at this point, after all of your open houses are done, where we'll

32:28.740 --> 32:32.040
hear from invited guests as well as the public

32:33.300 --> 32:36.460
relating to the issues from barrel. I know.

32:36.540 --> 32:40.092
Do you know Barksdale or Connie? Do you know how many responses we've

32:40.116 --> 32:43.652
gotten from the public at this point in the portal we

32:43.676 --> 32:47.012
opened? Good morning, Commissioners. The last

32:47.036 --> 32:49.200
time I checked, it was approaching 15,000.

32:50.950 --> 32:54.166
So firm agenda and date and

32:54.198 --> 32:57.838
time still to be determined. I think we're working with the Mayor's office in Houston

32:57.934 --> 33:01.918
to figure all that out, but we'll be providing that information as it

33:01.934 --> 33:05.806
becomes available. All right. Jason, if you want to continue.

33:05.958 --> 33:09.678
Yes, sir. Thank you. (item:51:Jason Ryan on CenterPoint's temporary emergency generation assets) And I'll be brief, but I do think it'd

33:09.694 --> 33:13.294
be helpful to give a little bit of background about

33:13.342 --> 33:17.162
the temporary emergency generation assets that we have and the

33:17.186 --> 33:20.762
risks that we're mitigating with them.

33:20.946 --> 33:24.830
So, as you know, we've leased small,

33:25.130 --> 33:29.426
medium and large temporary emergency generation

33:29.578 --> 33:32.946
units to mitigate a number of

33:32.978 --> 33:37.106
risks that I'll go through subsequent to legislation that passed

33:37.138 --> 33:41.030
in 2021 in the aftermath of Winter Storm Uri,

33:41.740 --> 33:44.988
and then that legislation was clarified in

33:45.044 --> 33:48.492
2023. So one of the

33:48.516 --> 33:52.404
risks, obviously, that we mitigate with primarily the large

33:52.452 --> 33:56.140
units is load shed. Again, this legislation came

33:56.220 --> 33:59.040
in the aftermath of Winter Storm Uri,

33:59.420 --> 34:02.876
where we in Houston had to

34:02.948 --> 34:07.160
turn off 5000 customer usage

34:07.750 --> 34:11.909
during that event. There are a couple of unique characteristics

34:11.989 --> 34:15.414
of Houston that I think are important to

34:15.502 --> 34:19.214
understand the fleet of generation assets

34:19.262 --> 34:22.446
that we do have. One of them is we have the largest

34:22.478 --> 34:26.422
petrochemical complex on the planet in Houston, and we

34:26.446 --> 34:30.054
do not rotate outages to those large

34:30.101 --> 34:33.570
industrial customers for public safety and other reasons.

34:34.409 --> 34:38.585
So when we have to shed 5000

34:38.617 --> 34:42.889
load, that burden falls completely on residential

34:42.929 --> 34:46.281
and small commercial customers. So you've got a fairly large

34:46.385 --> 34:50.449
number of amount of usage that is not subject to load

34:50.489 --> 34:54.072
shed. Right. We don't load shed transmission level customers, and we have a

34:54.081 --> 34:57.361
lot of those. So that

34:57.385 --> 35:00.644
helps to explain, to some extent,

35:00.692 --> 35:04.280
the amount of these assets that we have. And Eric can speak to

35:05.060 --> 35:08.892
how we reanalyze how many megawatts of these

35:08.956 --> 35:13.036
large units we need to have to mitigate the risk of another

35:13.108 --> 35:15.200
load shed like winter Storm Uri.

35:16.580 --> 35:20.164
We'll talk a little bit about how we used our smaller and medium sized units

35:20.252 --> 35:23.500
during barrel, but maybe I'll talk about

35:23.540 --> 35:26.918
how some of the other risks that we

35:26.934 --> 35:30.398
mitigate with these large units, because that's been the focus of

35:30.534 --> 35:35.086
a lot of attention. So we're

35:35.118 --> 35:38.606
relatively small, right. We cover less than 3% of the area of

35:38.638 --> 35:41.782
Texas, but we consume 25% of the

35:41.806 --> 35:45.126
power in ERCOT in Houston,

35:45.318 --> 35:48.050
and there's not enough power in Houston to power Houston.

35:48.670 --> 35:52.794
We have to import power from other parts of the state and

35:52.842 --> 35:56.762
bring it into the Houston area because there's not sufficient generation

35:56.866 --> 36:01.442
in Houston to power Houston. Those large

36:01.506 --> 36:04.786
transmission lines go well outside of the greater

36:04.818 --> 36:07.826
Houston area. So to the North,

36:08.018 --> 36:11.122
we go more than halfway to Dallas. To the

36:11.146 --> 36:14.350
Southwest, we go well past the Colorado River.

36:14.930 --> 36:18.074
And so if there were a tornado,

36:18.122 --> 36:21.802
a wildfire, a de Racho, even a hurricane that

36:21.826 --> 36:25.282
didn't hit directly into Houston, that took out

36:25.346 --> 36:29.310
those large transmission paths into Houston,

36:30.490 --> 36:34.362
we would have a Houston area problem.

36:34.426 --> 36:37.930
ERCOT might have enough generation to serve Houston, but if you take

36:37.970 --> 36:41.898
out those transmission lines that we used to import about 60% of

36:41.914 --> 36:45.050
the power that that Houston consumes, we've got a problem.

36:45.130 --> 36:48.430
These large units mitigate against that risk as well.

36:50.650 --> 36:54.314
So what this means in reality, is that when these

36:54.362 --> 36:58.154
extreme events happen, you're not

36:58.202 --> 37:01.442
likely to ever use every asset in our

37:01.466 --> 37:05.410
fleet of temporary emergency generation during each

37:05.450 --> 37:08.594
one event. Just like you don't use every

37:08.642 --> 37:12.142
tool in your toolbox at home to do a project, but you

37:12.166 --> 37:15.790
need all of the tools because you might do a different project the next

37:15.830 --> 37:19.878
weekend, right? So if we think about these as tools in our toolbox,

37:19.934 --> 37:23.310
they're all there to mitigate different risks. Some of them are quite

37:23.350 --> 37:26.782
substantial in terms of the impact,

37:26.886 --> 37:30.270
if they occurred because of some of those unique characteristics

37:30.310 --> 37:33.526
of the Houston area, in terms of a

37:33.558 --> 37:37.296
disproportionate number of our residential customers bearing load shed

37:37.328 --> 37:41.600
because we can't turn industrial customers off, the fact that we import 60%

37:41.640 --> 37:45.220
of our power on power lines that extend well beyond

37:45.800 --> 37:48.780
our area. So we have not,

37:49.720 --> 37:53.432
and I guess maybe one other risk is if we

37:53.456 --> 37:57.056
can't import 100% of the power into Houston on these transmission lines,

37:57.088 --> 38:01.296
we don't have enough capacity. If there was a significant loss of generation in Houston,

38:01.448 --> 38:04.688
a fire at a traditional generation facility,

38:04.744 --> 38:08.416
for example, again, you could have a localized load shed

38:08.448 --> 38:12.320
event in Houston that could

38:12.360 --> 38:16.472
last for some time if that's a catastrophic loss of a

38:16.496 --> 38:19.616
generation asset. So we have not done

38:19.648 --> 38:23.016
a good enough job of articulating these various

38:23.088 --> 38:26.280
risks that these assets are there to mitigate.

38:26.440 --> 38:30.490
So I wanted to lay those out here today, and as we do

38:30.530 --> 38:34.810
our work to communicate

38:34.850 --> 38:38.466
better and more transparently, you'll see

38:38.498 --> 38:42.474
us talking more about this in a more consumable

38:42.522 --> 38:43.110
way.

38:45.850 --> 38:49.130
We are constantly assessing the risks and

38:49.170 --> 38:52.826
making sure that we have the right sized fleet. Again, ERCOT can

38:52.858 --> 38:59.206
go into more detail about that as

38:59.238 --> 39:02.766
we go forward. We make a filing every year to adjust the

39:02.798 --> 39:06.350
cost of these assets, but we don't include this analysis

39:06.390 --> 39:09.638
that we constantly do to determine what size of the

39:09.654 --> 39:13.054
fleet. It's our commitment to start including

39:13.142 --> 39:16.294
that, and along with an independent

39:16.342 --> 39:20.046
assessment, if stakeholders think that that would be helpful as

39:20.078 --> 39:23.486
well. ERCOT and his team does look at this,

39:23.678 --> 39:27.488
but we don't share that. So we

39:27.504 --> 39:30.672
can't assume that people will believe us, that we look at it and have the

39:30.696 --> 39:33.816
right size fleet to manage all of these risks, we need to start sharing that.

39:33.888 --> 39:36.904
So it's our commitment to start doing that on a

39:36.912 --> 39:40.620
go forward basis. Including, like I said, with the independent analysis.

39:41.280 --> 39:45.232
And then as the Texas Energy Fund generators

39:45.296 --> 39:48.000
start to come online, you know,

39:48.160 --> 39:52.220
it's our hope that we won't need the same size fleet of

39:52.560 --> 39:55.272
large generation assets that we currently have.

39:55.456 --> 39:58.312
This lease ends in 2029.

39:58.496 --> 40:02.848
These energy fund generators should be coming online before

40:02.904 --> 40:06.528
then around that time. And so we

40:06.544 --> 40:10.280
need to take that into account in our periodic analysis

40:10.320 --> 40:14.048
as well. And if we need to end those leases early, that's what

40:14.064 --> 40:17.420
the analysis shows, then we'll work to do that.

40:18.940 --> 40:23.120
Also, since affordability of

40:24.100 --> 40:27.880
what you can think of as an insurance policy with some of these larger units,

40:28.660 --> 40:32.620
affordability is something that we always

40:32.740 --> 40:36.880
want to continue to have a dialogue about. So we

40:37.420 --> 40:40.532
extended the recovery period of these assets,

40:40.636 --> 40:44.606
I think, twice now, to again lower the monthly payment

40:44.788 --> 40:48.282
that's impacting customer bills. And we

40:48.306 --> 40:51.850
continue to remain willing to engage

40:51.890 --> 40:54.390
in those conversations if we need to. Again,

40:55.490 --> 40:59.450
based on all of the storm costs and other costs

40:59.490 --> 41:03.218
impacting customer bills, if we need to address the amortization period of this

41:03.274 --> 41:06.602
cost recovery for these larger assets, very willing

41:06.626 --> 41:10.202
to engage in that discussion in our next periodic update

41:10.266 --> 41:13.748
as well. We're also supportive of having a

41:13.764 --> 41:17.156
policy discussion on whether or not we should be the ones to continue to mitigate

41:17.188 --> 41:21.120
this risk. Obviously, post Winter Storm Uri,

41:21.540 --> 41:24.640
we were given the ability to have these tools in our toolbox.

41:25.780 --> 41:29.236
We think we have the right tools in the toolbox for the various risks that

41:29.268 --> 41:32.532
we uniquely face in Houston, but we're open to having that

41:32.556 --> 41:36.854
dialogue on whether or not we should continue to mitigate those

41:36.902 --> 41:39.530
risks with these tools. So,

41:40.310 --> 41:43.930
in summary, and then I'll move on to the material that we provided.

41:45.230 --> 41:48.806
We want to be more transparent about why we have what we have. We will

41:48.838 --> 41:52.410
file our periodic analysis every time

41:53.030 --> 41:57.150
we adjust the rider that is associated with this or on whatever frequency

41:57.310 --> 42:01.518
you all think is helpful. Happy to have an independent assessment

42:01.614 --> 42:05.534
as well to validate or contest what we think

42:05.622 --> 42:09.656
about. Happy to continue to update that

42:09.688 --> 42:13.440
as energy fund assets come online or get greater clarity

42:13.480 --> 42:17.216
on when they will come online. Happy to talk

42:17.248 --> 42:20.832
about the amortization period, and then happy to talk about more holistically,

42:20.936 --> 42:24.936
should we be in this business of filling

42:24.968 --> 42:28.144
the gap to mitigate these risks? With that,

42:28.312 --> 42:31.624
I do want to talk about what we filed on Monday, but happy to

42:31.632 --> 42:35.594
pass pause there. First, why don't you go into what you filed and we

42:35.602 --> 42:39.466
can finish up with questions. Yes, sir. (item:51:Jason Ryan on their filing under Project 56793) So again, in Project 56793,

42:39.498 --> 42:43.098
Item No. 24 is

42:43.154 --> 42:46.986
about 250 pages of information that we filed in response to Miss

42:47.018 --> 42:50.586
Corona's five questions. And then Item No.

42:50.618 --> 42:54.002
25 is a letter that we filed today to make

42:54.026 --> 42:57.230
that information a little bit more consumable. It is a lot of information.

42:57.840 --> 43:01.120
So let me walk through what's there. Most of

43:01.160 --> 43:05.320
the 250 pages relates to question one, so I promise

43:05.360 --> 43:09.032
not to spend as much time on each of the five questions. It'll go pretty

43:09.056 --> 43:11.100
quickly after I walk through question one.

43:12.400 --> 43:16.536
But the initial 232 pages

43:16.648 --> 43:19.936
of that are the leases for the assets that we've been talking

43:19.968 --> 43:24.128
about. The first pages,

43:24.224 --> 43:28.060
four through 52, are the short term

43:28.560 --> 43:32.112
lease and any amendments to that lease that

43:32.136 --> 43:35.800
we entered into right as the law became effective

43:35.840 --> 43:40.192
in 2021 for the large and medium sized

43:40.336 --> 43:43.720
units, we wanted to make sure before

43:43.760 --> 43:47.896
we went through a full long term lease process that

43:47.928 --> 43:51.662
we had units in place that could be helpful both during the

43:51.686 --> 43:55.222
remainder of the 2021 hurricane season and as we

43:55.246 --> 43:58.758
got ready to be prepared for the next winter

43:58.814 --> 44:02.850
season, which was the one immediately following Yuri. And so

44:03.350 --> 44:07.450
that short term lease allowed us to start getting these assets

44:08.550 --> 44:12.414
in hand. We used one of them a

44:12.422 --> 44:16.478
couple weeks later, Hurricane Nicholas hit. In mid September of

44:16.614 --> 44:19.806
2021. We used one of the first assets that we took possession

44:19.838 --> 44:22.850
of down in Brazoria County,

44:23.350 --> 44:26.726
and then we took possession of some of these larger units and got them ready

44:26.798 --> 44:31.558
at our substations in the event there was another load shed event

44:31.614 --> 44:35.430
like Winter Storm Uri, we then entered into a longer term

44:35.470 --> 44:39.302
lease. That's what's on pages 53

44:39.366 --> 44:41.250
to 174.

44:42.720 --> 44:45.792
That long term lease is the lease that I mentioned that goes to

44:45.816 --> 44:50.224
2029. You will see a

44:50.272 --> 44:54.040
number of amendments to both the short term lease and the long term lease,

44:54.200 --> 44:58.260
and I'm happy to walk through any questions around that.

44:58.600 --> 45:02.576
But I'll give you an overview of what was going on that caused so many

45:02.728 --> 45:06.660
amendments. There were really two key things.

45:07.690 --> 45:11.730
Number one, the units

45:11.770 --> 45:15.282
that were leased under the short term lease ultimately needed to

45:15.306 --> 45:18.946
move to the long term lease. And so sometimes there

45:18.978 --> 45:22.870
are amendments to the short term lease removing assets,

45:23.570 --> 45:26.978
and then there's a corresponding amendment to the long term lease

45:27.034 --> 45:30.586
adding those assets to the long term lease. So we essentially took that short term

45:30.618 --> 45:33.906
fleet over time and moved it under the long term

45:33.938 --> 45:37.680
lease as the vendor that we leased from was

45:37.720 --> 45:41.820
able to prove to us that they had clear title to those units

45:42.240 --> 45:46.520
because we wanted to make sure that we and our customers had the protection

45:46.600 --> 45:49.776
that these units were going to be there when they were needed

45:49.808 --> 45:53.480
and that the vendor had clear title to them. So as they provided

45:53.520 --> 45:56.888
clear title, we amended the short term lease to take it out from there,

45:57.024 --> 46:00.504
added it to the long term lease there are a number of other

46:00.552 --> 46:03.990
protections, letters of credit, escrow accounts,

46:04.410 --> 46:08.346
things like that, where we were holding the vendor financially

46:08.378 --> 46:12.522
accountable to make sure that they could perform to

46:12.586 --> 46:16.514
our expectations. So you see various amendments over

46:16.562 --> 46:20.570
time, increasing or decreasing those

46:20.610 --> 46:24.070
letter of credit and escrow amounts

46:24.650 --> 46:29.040
to make sure that this vendor could financially

46:29.080 --> 46:33.440
perform and operationally perform, because we had remedies

46:33.480 --> 46:37.100
under the contract that allowed us to draw on that letter of credit

46:37.640 --> 46:41.456
or take money out of the escrow account and even seize

46:41.488 --> 46:45.440
the assets ourselves if the vendor didn't

46:45.480 --> 46:48.880
perform. So that, at a high

46:48.920 --> 46:52.488
level, explains why there are so many amendments and some

46:52.504 --> 46:55.040
of the topics that they, that they cover.

46:57.900 --> 47:01.772
The third set of leases is for the smaller units that

47:01.796 --> 47:05.580
we entered into when the legislation

47:05.620 --> 47:08.780
was amended in 2023 to make clear that these could be

47:08.820 --> 47:12.820
used for storm response. So that starts at page 175

47:12.860 --> 47:16.444
and goes to 232. These are

47:16.452 --> 47:20.198
the much smaller units that we'll talk about that did use

47:20.254 --> 47:24.062
during Hurricane Beryl. We also used a

47:24.086 --> 47:27.790
number of the medium sized units that are under both that short term and long

47:27.830 --> 47:32.142
term lease. So I know it

47:32.206 --> 47:35.974
takes me a while to get oriented with all of the leases and the amendments

47:36.022 --> 47:39.006
and follow all the paper trails. So happy to talk about any of that,

47:39.038 --> 47:42.918
but that gives you an idea of the first 232 pages.

47:42.974 --> 47:47.210
And then it gets easier from there. Starting on page 233,

47:47.840 --> 47:51.300
we answer the questions that Miss Corona asked,

47:51.680 --> 47:56.096
unit by unit, for certain information about

47:56.248 --> 47:59.776
all of the fleet. And so there's a spreadsheet that starts at

47:59.808 --> 48:03.456
page 233 that provides the answers to

48:03.488 --> 48:06.960
those questions. Those questions

48:07.040 --> 48:11.096
include the duration of the lease, the date we actually took possession

48:11.128 --> 48:15.284
of the unit, the costs associated with each

48:15.332 --> 48:19.020
unit, and whether

48:19.060 --> 48:22.440
we used that unit in response to Hurricane Beryl.

48:23.180 --> 48:26.228
So a lot of information on that spreadsheet.

48:26.364 --> 48:29.860
We did also upload the native version of that spreadsheet. I know

48:29.900 --> 48:32.892
my eyes can't read it very well in the PDF form,

48:32.956 --> 48:36.796
so the native Excel spreadsheet is in the

48:36.828 --> 48:40.714
folder in Item 24, in Project 56793

48:40.802 --> 48:44.618
as well. After that,

48:44.674 --> 48:48.194
question two asks for the same kind of information for

48:48.242 --> 48:52.242
any of these units that we own, and we

48:52.266 --> 48:55.242
don't own any of these units. Under the law, we have to lease them.

48:55.306 --> 48:59.290
So that answer is pretty straightforward. And that's on

48:59.450 --> 49:03.882
page 239. On page 241,

49:03.986 --> 49:08.310
we answer question three, which asks us for the same kind of information for

49:08.970 --> 49:12.450
any unit that we got through mutual assistance. For Hurricane

49:12.490 --> 49:16.266
Beryl, we did get twelve additional

49:16.298 --> 49:19.630
units through mutual assistance during the hurricane.

49:20.010 --> 49:23.750
Eight came from Oncor, four came from AEP.

49:24.650 --> 49:29.402
And so on page 241, we provide the details of when

49:29.426 --> 49:32.786
did we get them? Who did we get them from? What were the sizes and

49:32.818 --> 49:33.950
how we used them?

49:35.980 --> 49:40.360
Question four, which we answer on page 243,

49:41.060 --> 49:44.972
asks for incremental costs associated with using

49:45.036 --> 49:49.020
these units during Hurricane Beryl. We are still

49:49.100 --> 49:52.380
awaiting some of those final invoices, things like

49:52.420 --> 49:56.120
fuel. So most of these units,

49:56.500 --> 50:00.000
while they may be dual fuel, primarily run on diesel.

50:01.220 --> 50:05.440
And so we are awaiting the final cost. But we did show you on page

50:05.940 --> 50:10.120
243 the internal labor costs that we have

50:10.620 --> 50:14.164
associated with these units that were used during barrel.

50:14.292 --> 50:18.372
And as we get the final invoices from all of the costs

50:18.516 --> 50:22.476
associated with these units, we'll update this answer. But we provided

50:22.508 --> 50:26.324
you what we've got right now. And then question five asks

50:26.372 --> 50:29.844
for more details around the process generally

50:29.892 --> 50:33.900
for deploying these assets, where generally

50:33.940 --> 50:37.580
we deployed them during Hurricane Beryl. So starting on page 245

50:37.660 --> 50:41.956
and then completing the packet all the way to 250 is

50:42.108 --> 50:45.780
narrative information about that. That again, we can go into great

50:45.820 --> 50:48.724
detail. Eric provided that response,

50:48.772 --> 50:51.600
so we can walk through that as well.

50:53.540 --> 50:57.384
That last spreadsheet shows that we operated these units for about

50:57.432 --> 51:01.352
3000 hours in total during Hurricane Beryl.

51:01.496 --> 51:06.904
So definitely made a difference

51:07.032 --> 51:11.800
in the lives of those people that were served by these assets during

51:11.840 --> 51:16.264
the event. So maybe with that, again, I'll reintroduce

51:16.392 --> 51:20.094
Eric, as the executive at our company that

51:20.232 --> 51:23.514
manages these assets, deploys them during

51:23.602 --> 51:26.030
events like Beryl deployed them during Beryl,

51:26.970 --> 51:30.710
and pause to see if there are any questions about this particular part.

51:31.050 --> 51:33.666
Thank you. Commissioners? Eric,

51:33.778 --> 51:38.114
so based on Jason's update about

51:38.202 --> 51:41.722
the URI and the 5000 MW that were

51:41.746 --> 51:45.650
rotated out, I guess, ERCOT's direction during

51:45.730 --> 51:50.010
Winter Storm Uri. CenterPoint received direction or rotate out 5000 MW.

51:51.350 --> 51:55.574
Since Uri, I've visited with the company multiple

51:55.622 --> 51:59.342
times and I think with you yourself about the

51:59.366 --> 52:02.662
improvements that have been made to the distribution system and the

52:02.686 --> 52:06.510
company's ability to rotate more customers effectively.

52:06.590 --> 52:10.566
Since Uri, how many customers can you effectively

52:10.638 --> 52:13.882
rotate now based on all the improvements and investments you've

52:13.906 --> 52:17.610
made on your distribution system? (item:51:Eric Easton on CenterPoint's circuit segmentation, 56793) Are you including the use

52:17.650 --> 52:21.178
of the temporary generation in that? No. Okay. Without,

52:21.274 --> 52:24.906
without the generation. Okay. So one of the major

52:25.018 --> 52:29.274
changes that we've done is around the circuit segmentation

52:29.322 --> 52:33.530
or ability to use intelligent grid switching devices to

52:33.610 --> 52:36.962
segment off parts of our system that

52:36.986 --> 52:40.780
we couldn't during Winter Storm Uri. A lot of that was

52:40.860 --> 52:44.280
attempted manually and we did successfully do that in some cases,

52:44.660 --> 52:48.652
however, with the road conditions, that made it very difficult to

52:48.676 --> 52:51.964
do on a wider scale. So we have

52:52.052 --> 52:56.556
installed intelligent grid switching devices that allow us to autonomously

52:56.748 --> 53:00.036
rotate that load that we couldn't before that

53:00.068 --> 53:03.212
gives us about 400 capacity.

53:03.276 --> 53:06.342
Obviously, it depends on load conditions at the

53:06.396 --> 53:09.230
time. It's going to be a very dynamic number,

53:09.970 --> 53:13.426
but roughly additional 400 MW

53:13.458 --> 53:17.306
that come through that part of the automation

53:17.378 --> 53:20.634
process. We continue to study those.

53:20.722 --> 53:24.498
So we have the upcoming circuit segmentation study

53:24.554 --> 53:28.842
that we're doing for ERCOT. And through that study, we identified

53:28.946 --> 53:32.088
another set of devices, I think about another 40 devices

53:32.194 --> 53:36.196
that we would install. I don't have the megawatt number that's associated

53:36.268 --> 53:39.948
with those devices, but we can follow up with that. So that'll be

53:39.964 --> 53:43.412
a further enhancement. Some of the other things that

53:43.436 --> 53:46.716
we've looked at. So that's what's implemented. So we've added

53:46.828 --> 53:52.596
about another 400

53:52.628 --> 53:57.218
load. And to put that into context, the load that we can typically

53:57.404 --> 54:00.662
rotate manually is about 3000 MW. So that left us

54:00.686 --> 54:04.822
about a 2000 megawatt deficit during winter storm yuri.

54:05.006 --> 54:09.190
So we've closed into that deficit

54:09.270 --> 54:12.570
by about 400 MW, depending on system conditions.

54:14.390 --> 54:17.526
Okay. And the reason I'm asking is because, you know,

54:17.558 --> 54:20.610
based on the premise that Jason has provided,

54:22.390 --> 54:25.770
the decision to acquire that many mobile generation units

54:25.870 --> 54:29.762
was largely based on preventing a load

54:29.786 --> 54:33.018
shed or ensuring customers have power during a load shed event. Should you have to

54:33.034 --> 54:36.330
rotate 5000 mw? Since Uri, there have

54:36.370 --> 54:39.642
been tremendous improvements, both from

54:39.666 --> 54:43.482
the company side with investments in the distribution system to

54:43.506 --> 54:50.018
be able to more effectively rotate customers out through

54:50.114 --> 54:52.562
intelligent grid switching or devices,

54:52.626 --> 54:56.262
technologies that, you know, the company has made investments in, the ratepayers

54:56.286 --> 54:59.758
are paying for. And on our end,

54:59.814 --> 55:03.382
we have made improvements through weatherization and

55:03.526 --> 55:07.438
dual fuel capability, and overall winter reliability

55:07.614 --> 55:10.734
and resiliency has tremendously improved since

55:10.782 --> 55:14.750
Erie. So that

55:14.830 --> 55:18.702
I think that we all recognize, and we

55:18.726 --> 55:24.030
have to rethink about how we approach this

55:24.070 --> 55:27.982
entire dialogue because of the fact that there

55:28.006 --> 55:31.050
have been a lot of significant

55:31.430 --> 55:35.638
facts that have changed. And so I

55:35.654 --> 55:38.210
think it's going to be important to understand those megawatts,

55:39.510 --> 55:43.010
a total megawatt amount. Yeah, no, I agree.

55:43.430 --> 55:46.790
We have typically used Winter Storm Uri's benchmark,

55:47.490 --> 55:50.866
and then this year, we will also be redoing that analysis based

55:50.898 --> 55:54.922
on the 19,000 megawatt number that ERCOT is studying.

55:55.106 --> 55:58.858
So it's a slight change, doesn't affect our

55:58.954 --> 56:02.330
calculations significantly. The other thing

56:02.370 --> 56:06.010
is that our load ratio share changes on an annual basis. So we also

56:06.050 --> 56:09.530
have to factor that in. And then with the potential

56:09.610 --> 56:12.990
for large industrial loads coming into our footprint,

56:13.490 --> 56:17.110
we also obviously factor that in as well. So there's

56:17.650 --> 56:20.866
some level of uncertainty. And what we're

56:20.898 --> 56:24.090
also seeing is that some of these larger loads are able to come on much

56:24.130 --> 56:27.322
faster than what they could in the past.

56:27.506 --> 56:31.002
And so, because the industrial load is still counted

56:31.026 --> 56:34.842
in our load ratio share, we include that in our analysis when

56:34.866 --> 56:38.548
we're looking at how many megawatts do we need need. And then,

56:38.604 --> 56:42.028
as Jason mentioned, the other scenarios that we have looked at

56:42.084 --> 56:46.300
are the tie line capacity challenges

56:46.340 --> 56:50.204
that we could experience. We're seeing increases in

56:50.292 --> 56:53.556
wildfire risk. And so those wildfires,

56:53.668 --> 56:57.076
similar to 2011, where they threaten the north

56:57.108 --> 57:00.652
to Houston interface, could drive a load shed

57:00.716 --> 57:04.592
condition in the Houston area, even though the rest of ERCOT

57:04.736 --> 57:08.040
may not be affected. So those are some of the things

57:08.080 --> 57:12.180
that are going into the calculations that we're making to try to determine

57:12.960 --> 57:16.616
if we still have the right number of units and

57:16.728 --> 57:20.224
also the speed at which we need to be prepared to deploy those units,

57:20.272 --> 57:23.860
which could require either changes to our processes,

57:24.600 --> 57:27.860
where those units are located, the staff that we have available.

57:28.530 --> 57:32.258
So those are things that we're doing on an ongoing basis and

57:32.314 --> 57:34.070
evaluating those continually.

57:37.450 --> 57:40.890
One thing I would ask. So, Jason, you committed to providing

57:40.930 --> 57:44.018
those analyses on a go forward basis. I think it's also important to know how

57:44.034 --> 57:47.458
we got to where we are today. So I think it would be helpful to

57:47.474 --> 57:51.106
also provide the previous analyses that Eric and his group have done. So

57:51.138 --> 57:54.098
we can see how the initial decision was made and how the subsequent decisions.

57:54.114 --> 57:57.190
got us to where we are today. Yes, sir.

57:59.410 --> 58:02.842
And to add to that, because we have heard in

58:02.866 --> 58:06.682
prior discussions that the decisions were made based on load shed and

58:06.746 --> 58:10.722
hurricanes and localized outages, but we

58:10.746 --> 58:14.674
need to understand if your analysis took into consideration the loss of major transmission

58:14.722 --> 58:18.110
lines into the Houston area as part of your analysis of low shed.

58:18.690 --> 58:22.396
Yes, ma'am. (item:51:Commissioner Hjaltman's question to CenterPoint on stackable generators, 56793) Are these generators

58:22.468 --> 58:26.620
stackable? Like you said, you purchased the big figures

58:26.700 --> 58:29.908
for loadshed, and you couldn't necessarily

58:29.964 --> 58:33.276
use those to go power something smaller.

58:33.428 --> 58:36.516
But now that you have the smaller, could you get rid of the bigger and

58:36.548 --> 58:39.040
you can add them together? Is that a possibility?

58:40.220 --> 58:44.180
So we can parallel units, the five megawatt

58:44.220 --> 58:48.178
units, we have multiple five megawatt units at

58:48.194 --> 58:51.170
a given substation. So the 32 megawatt units,

58:51.250 --> 58:54.858
each one is at its own substation. It's connected to the bus,

58:54.914 --> 58:58.354
and it's ready in case we have a generation adequacy

58:58.402 --> 59:00.910
or any of the other scenarios that we just talked about.

59:01.210 --> 59:04.906
The five megawatt units, we can parallel those units

59:05.058 --> 59:09.026
through the substation bus. For the smaller units, there's a

59:09.058 --> 59:13.546
significant drop off. We go for from 5,

59:13.578 --> 59:16.610
quote unquote small would start about 1 mw.

59:16.770 --> 59:19.994
So one of the challenges with trying to parallel

59:20.042 --> 59:24.230
that many units is, it's going to be the physical space. So the units.

59:25.050 --> 59:29.634
We wouldn't have enough space in the substation to

59:29.682 --> 59:33.418
parallel that many units and connect them to

59:33.594 --> 59:37.524
our distribution system. So in that case,

59:37.652 --> 59:41.420
it's not very feasible to parallel

59:41.460 --> 59:43.920
the smaller units for those use cases.

59:47.380 --> 59:51.116
Yeah. Just for context, the smaller units are about the size of a U Haul

59:51.148 --> 59:54.572
truck. The five megawatt units are kind

59:54.596 --> 59:58.460
of a tractor trailer, and then by the time you get to the 32 megawatt

59:58.500 --> 01:00:02.494
units, those are requiring us to use a crane to assemble

01:00:02.542 --> 01:00:03.130
them.

01:00:07.350 --> 01:00:10.014
Are you finished? For now. For now.

01:00:10.142 --> 01:00:12.410
Okay. A couple questions here.

01:00:13.710 --> 01:00:16.770
(item:51:Commissioner Glotfelty's question on canceling lease agreements, 56793) I read all 200 and some odd pages.

01:00:18.230 --> 01:00:21.470
I didn't have, like, a map to figure

01:00:21.510 --> 01:00:24.862
out which way was which, but there are some things that stuck out

01:00:24.886 --> 01:00:27.010
at me that I wanted to ask you about.

01:00:27.880 --> 01:00:31.832
One of them is amendment five to the

01:00:31.856 --> 01:00:34.860
lease agreement. Now, I don't know if this is to the long or the short,

01:00:35.440 --> 01:00:39.008
but it talks about termination

01:00:39.064 --> 01:00:42.296
of the lease. It's on page 145.

01:00:42.488 --> 01:00:46.088
Yes, sir. Termination of the lease. And it talks about a

01:00:46.104 --> 01:00:49.740
regulatory proceeding. And if we disallowed it,

01:00:51.040 --> 01:00:54.424
what would happen? And I've seen in two different places in these documents,

01:00:54.472 --> 01:00:58.086
one of them say that you would pay something like this,

01:00:58.278 --> 01:01:01.050
says that you would pay $53 million.

01:01:01.510 --> 01:01:04.918
And there's another place that talks about 25% of the total cost,

01:01:04.974 --> 01:01:08.486
which I think was $125 million. And I'm trying to get my

01:01:08.518 --> 01:01:12.090
understanding of this. If you canceled these leases today,

01:01:13.670 --> 01:01:15.610
what would be the consequence?

01:01:17.550 --> 01:01:21.292
Got it. So I'm looking at 145 and 146 of

01:01:21.316 --> 01:01:24.880
the packet. And this is an amendment to the long term lease.

01:01:26.140 --> 01:01:29.548
The long term lease had a termination provision in

01:01:29.564 --> 01:01:32.876
it in the event that when we

01:01:32.908 --> 01:01:36.120
went through the prudence determination here at the commission,

01:01:36.460 --> 01:01:39.972
this was determined to not be prudent in

01:01:39.996 --> 01:01:44.160
whole or in part. And that was the six months that they gave you two?

01:01:44.860 --> 01:01:48.854
That was on page 55, termination of release. Yes, sir. 2a. So,

01:01:48.972 --> 01:01:53.194
yes sir. Originally, I believe that that termination provision

01:01:53.282 --> 01:01:57.610
expired in March of

01:01:57.690 --> 01:02:00.562
2023. Correct? March 31.

01:02:00.666 --> 01:02:04.870
And this amendment extends that termination

01:02:05.210 --> 01:02:08.510
right through, I believe, the end of 2023.

01:02:09.610 --> 01:02:13.098
And so once the prudence determination

01:02:13.154 --> 01:02:16.734
proceeding was over and nobody appealed

01:02:16.782 --> 01:02:17.810
that decision,

01:02:20.230 --> 01:02:23.870
it's my understanding that this provision is no longer a

01:02:23.910 --> 01:02:27.214
live provision of the contract that would allow us to terminate

01:02:27.302 --> 01:02:31.650
under a determination by the commission that these were not prudent

01:02:32.430 --> 01:02:35.982
had there been an appeal. And so we extended it,

01:02:36.006 --> 01:02:39.430
because that prudence determination case was still pending.

01:02:39.590 --> 01:02:42.982
So we worked with the vendor to make sure that that right that we negotiated

01:02:43.006 --> 01:02:47.450
at the beginning, remained through that proceeding

01:02:47.790 --> 01:02:51.710
had that proceeding been appealed. We're talking about speculation at this point,

01:02:51.870 --> 01:02:55.246
but we would have attempted to continue to maintain the right

01:02:55.278 --> 01:02:58.530
to terminate under this provision that you're pointing out,

01:02:58.910 --> 01:03:02.278
since there's not a live appeal of that.

01:03:02.334 --> 01:03:05.766
We did not ask to continue this termination right.

01:03:05.838 --> 01:03:10.542
Based on prudence of the assets. So it's my understanding that

01:03:10.646 --> 01:03:12.730
we could not trigger this clause today.

01:03:14.190 --> 01:03:18.690
Is there any other termination provision that you could claim?

01:03:22.110 --> 01:03:25.486
Let me turn to the long term lease itself,

01:03:25.558 --> 01:03:29.574
because there are events

01:03:29.622 --> 01:03:33.366
of default if the

01:03:33.438 --> 01:03:36.010
vendor did not perform,

01:03:37.000 --> 01:03:40.616
that would allow us to exercise certain rights.

01:03:40.688 --> 01:03:44.464
So if you look at

01:03:44.512 --> 01:03:47.140
page 76 of the packet,

01:03:49.400 --> 01:03:53.576
there are certain things that would lead to an event of default by

01:03:53.688 --> 01:03:57.240
our vendor, including failure

01:03:57.280 --> 01:04:01.504
to provide 94% availability

01:04:01.632 --> 01:04:06.536
of these assets. So if they do not operationally perform when

01:04:06.568 --> 01:04:10.808
these assets are needed, that triggers an event of default.

01:04:10.944 --> 01:04:14.216
There are other things that trigger this, too, right? It's a through g

01:04:14.288 --> 01:04:17.736
on that list. I won't go through them all. But in the event that the

01:04:17.768 --> 01:04:21.460
vendor defaults on its obligations under this lease,

01:04:22.280 --> 01:04:25.980
that would trigger remedies that are on page 78

01:04:27.360 --> 01:04:31.340
that allow us to draw on the letter of credit,

01:04:32.030 --> 01:04:34.250
take all the money in the escrow account,

01:04:35.630 --> 01:04:37.970
take possession of these assets ourselves,

01:04:39.350 --> 01:04:42.142
and execute a number of other remedies as well.

01:04:42.246 --> 01:04:44.170
It's not the same as termination,

01:04:45.830 --> 01:04:49.890
but it's pretty close to it. And so that's the only real,

01:04:50.550 --> 01:04:54.490
my understanding is that's the real remedy that's left

01:04:54.790 --> 01:04:59.088
once we got past that regulatory provision

01:04:59.264 --> 01:05:02.712
that expired at the end of last year. So,

01:05:02.736 --> 01:05:06.688
Jason, are you basically saying that Centerpoint entered into a lease contract that

01:05:06.704 --> 01:05:10.580
they can't terminate at this point unless there's vendor non performance?

01:05:11.800 --> 01:05:15.808
That's right. The termination provision expired

01:05:15.944 --> 01:05:19.312
once the proceeding at the commission was over. I mean,

01:05:19.376 --> 01:05:22.728
I don't. I mean, I personally have never heard of a

01:05:22.744 --> 01:05:25.130
lease contract I can't terminate. Have you?

01:05:27.510 --> 01:05:31.050
I mean, it seems like the contract is. I mean,

01:05:33.590 --> 01:05:37.210
you entered into a contract you can't terminate unless there's a vendor on performance.

01:05:37.710 --> 01:05:41.606
And of course, these large units seems like largely

01:05:41.638 --> 01:05:45.038
haven't been run, so we'd have to. It may not ever be run, so we

01:05:45.054 --> 01:05:48.758
don't even know they'll not perform. So it

01:05:48.774 --> 01:05:52.490
just seems like we're in this circular place where I,

01:05:53.380 --> 01:05:56.720
y'all are coming across like, your hands are tied to this contract,

01:05:57.660 --> 01:06:01.228
but yet there's been so many changes that have occurred,

01:06:01.284 --> 01:06:03.420
and I think, and I don't know if you were asking this,

01:06:03.460 --> 01:06:06.636
Commissioner Hjaltman? But like,

01:06:06.708 --> 01:06:10.628
can you switch units in and out? Like, can you go take the

01:06:10.644 --> 01:06:14.600
big ones back and get some smaller ones, like, trade them out?

01:06:15.540 --> 01:06:18.676
Yes. So we do. And Eric can

01:06:18.828 --> 01:06:22.820
talk about this greater than I can in terms of the testing that's required.

01:06:22.980 --> 01:06:27.056
So these units, assets aren't sitting idle and never tested.

01:06:27.128 --> 01:06:30.856
So. And that counts towards the performance of the vendor as well.

01:06:31.008 --> 01:06:34.560
So I let him talk about that. We obviously

01:06:34.600 --> 01:06:38.072
can reach commercial terms with the vendor on

01:06:38.216 --> 01:06:42.248
changing out assets if we believe we don't have the right asset

01:06:42.304 --> 01:06:46.088
mix. That's not a right. We have

01:06:46.224 --> 01:06:49.752
to terminate the deal. Right. But we can always

01:06:49.816 --> 01:06:53.490
work commercially with our vendor to

01:06:53.610 --> 01:06:57.482
reach a constructive outcome that works for both of us.

01:06:57.666 --> 01:07:01.354
Again, this is. It's not exactly like this,

01:07:01.402 --> 01:07:04.706
but the way I view it is we made

01:07:04.738 --> 01:07:08.130
an investment in a relatively long term

01:07:08.170 --> 01:07:11.338
asset with kind of

01:07:11.354 --> 01:07:14.490
like we do with transmission lines. Right. Once you determine that it's

01:07:14.530 --> 01:07:18.220
needed and it's prudent and we build it, we have it.

01:07:19.560 --> 01:07:22.700
And so that's the same construct under these leases.

01:07:23.440 --> 01:07:26.660
Once it's determined that this is the right thing for us to have,

01:07:27.240 --> 01:07:30.752
we made the payment and

01:07:30.816 --> 01:07:34.900
we prepaid this lease to get a discount on what it costs.

01:07:35.920 --> 01:07:38.900
So financially, we have made the payment,

01:07:40.560 --> 01:07:43.738
we have the asset that after we went through

01:07:43.754 --> 01:07:47.266
the prudence determination, then we don't

01:07:47.298 --> 01:07:50.498
have the right to terminate anymore. We have the asset for the term of the

01:07:50.514 --> 01:07:53.594
lease. We do. Eric can talk about

01:07:53.642 --> 01:07:57.250
the performance obligations of the testing, which is how we know that these

01:07:57.330 --> 01:08:00.858
would work or not during the

01:08:00.874 --> 01:08:04.234
load shed event. Yes. I think there's a couple ways that

01:08:04.282 --> 01:08:08.270
we evaluate performance. The same

01:08:09.280 --> 01:08:12.520
folks that would be helping us to deploy the 30 mw,

01:08:12.600 --> 01:08:16.319
also help us deploy the five megawatt units. And so they did

01:08:16.359 --> 01:08:19.872
do that successfully during Hurricane Beryl.

01:08:20.015 --> 01:08:23.660
So we did deploy some of the five megawatt units.

01:08:24.000 --> 01:08:27.631
And so from that regard, we did get an opportunity to see how they would

01:08:27.656 --> 01:08:31.380
perform in a live situation, how they

01:08:31.800 --> 01:08:35.657
transport the unit, how they get it connected and

01:08:35.832 --> 01:08:39.176
up and running. And then in addition to kind of

01:08:39.193 --> 01:08:42.709
that live scenario with Hurricane Beryl,

01:08:43.209 --> 01:08:46.825
as Jason mentioned. We also pull maintenance on the units to ensure that they

01:08:46.857 --> 01:08:50.729
are ready. So they've done that. And then

01:08:50.769 --> 01:08:55.109
also we have readied the units in preparation for deployment.

01:08:56.169 --> 01:08:59.694
And that's something that we typically, if there is maintenance

01:08:59.777 --> 01:09:03.508
that's upcoming, we coordinate that with any type of

01:09:03.684 --> 01:09:07.292
readying of the units for an ERCOT

01:09:07.356 --> 01:09:11.220
potential EEA event. And so we've seen the performance that

01:09:11.260 --> 01:09:14.348
they have provided in those three scenarios.

01:09:14.524 --> 01:09:18.020
And that's what's really giving us the ability to evaluate whether

01:09:18.060 --> 01:09:21.884
or not we think the units would be ready to perform. Yeah, but I

01:09:21.892 --> 01:09:25.100
think we're all talking here about the large 15 that weren't used during barrel.

01:09:25.140 --> 01:09:29.390
Right. We know the midsize, smaller ones were deployed.

01:09:29.535 --> 01:09:32.839
You didn't have enough of them. You borrowed about

01:09:32.879 --> 01:09:36.099
twelve or so from other utilities.

01:09:36.519 --> 01:09:39.751
So it's the 15 units we're talking about here. So.

01:09:39.935 --> 01:09:43.158
And to be clear, that's the 15 are the ones that I'm referring to.

01:09:43.198 --> 01:09:47.310
So we readied the 1532

01:09:47.335 --> 01:09:51.359
megawatt units. Not all of them, but we readied some of those units

01:09:51.439 --> 01:09:55.114
in preparation of ERCOT eevtainous events, because that's the scenario

01:09:55.162 --> 01:09:59.002
that those units would be dispatched for. So those were conditions where

01:09:59.026 --> 01:10:03.430
ERCOT had said, we have a potential for an EEA event

01:10:04.330 --> 01:10:07.630
as part of being ready for that. We do

01:10:08.410 --> 01:10:11.990
ready those units so that they can be utilized.

01:10:13.210 --> 01:10:16.738
Are these the 115 instances you're referring to that ERCOT has come close to

01:10:16.754 --> 01:10:20.502
EEA events that we know is nothing factually on

01:10:20.526 --> 01:10:24.166
point, because that would include every OCN and AAN that's ever

01:10:24.198 --> 01:10:27.622
been issued in the last since Uri. Yeah. When I'm talking about. Eric, real quick,

01:10:27.646 --> 01:10:31.062
will you move the microphone a little closer? Yeah. (item:51:Eric Easton on CenterPoint readying units, 56793) When I talk about readying

01:10:31.126 --> 01:10:34.414
the units, it's really for those that progressed all the way to

01:10:34.462 --> 01:10:38.166
EEA level that we may not have gone into load shed.

01:10:38.278 --> 01:10:41.890
So it's not the totality of the 115,

01:10:42.350 --> 01:10:47.156
but it's where we got closer to an

01:10:47.188 --> 01:10:50.412
EEA event, which has been

01:10:50.436 --> 01:10:53.844
how many times since Uri? I can think of one in September.

01:10:53.972 --> 01:10:59.268
Yeah, I don't. I don't have that. But we can. We can pull that in

01:10:59.284 --> 01:11:02.532
terms of how many times we ready the units. I do know that was four.

01:11:02.676 --> 01:11:06.692
It was four. So we've got a process of readying the units which can

01:11:06.716 --> 01:11:09.940
contribute towards their performance. But you

01:11:09.980 --> 01:11:13.570
also, you know, talked a long time about this

01:11:14.750 --> 01:11:17.942
initiative to go out and kind of see what's the right mix and to do

01:11:17.966 --> 01:11:21.598
it on a continual, ongoing basis,

01:11:21.734 --> 01:11:25.470
and also to bring in this third party consultant.

01:11:25.590 --> 01:11:29.670
So what's the line of sight if you get this assessment?

01:11:29.790 --> 01:11:33.350
It says you need a different mix. So how are you going to get

01:11:33.390 --> 01:11:37.038
there within your current commitment to this

01:11:37.094 --> 01:11:39.770
larger, I guess, asset?

01:11:42.550 --> 01:11:45.982
Yes. So, obviously, if you

01:11:46.006 --> 01:11:50.206
take the scenario of Texas Energy Fund

01:11:50.398 --> 01:11:53.686
generation coming online in the latter

01:11:53.718 --> 01:11:57.126
part of this decade, it corresponds pretty well with the

01:11:57.158 --> 01:11:58.530
end of this lease already.

01:11:59.990 --> 01:12:04.064
And again, we don't have the right to terminate

01:12:04.182 --> 01:12:07.480
early, but we can reach a commercial

01:12:08.100 --> 01:12:11.852
arrangement under with

01:12:11.876 --> 01:12:15.300
the vendor. If we needed a fewer number

01:12:15.340 --> 01:12:17.280
of the 32 megawatt units,

01:12:18.220 --> 01:12:21.636
maybe for a longer period of time, you could reach

01:12:21.668 --> 01:12:24.940
an agreement where there was no incremental cost. You return

01:12:25.020 --> 01:12:29.332
some, have some for a longer period of time. Right. This is just a

01:12:29.356 --> 01:12:32.868
hypothetical scenario that could occur. So we

01:12:32.884 --> 01:12:36.740
do have the ability to take action after that

01:12:36.780 --> 01:12:39.844
analysis, short of returning all

01:12:39.852 --> 01:12:43.844
of them. But I don't think the analysis would be that

01:12:43.892 --> 01:12:47.412
that's the right way to mitigate these risks. Now, again,

01:12:47.516 --> 01:12:51.108
we're happy to have the conversation from a policy perspective if we should not be

01:12:51.124 --> 01:12:55.092
mitigating these risks. But under current law, we have that

01:12:55.276 --> 01:12:58.924
ability to mitigate the risk. We don't see others mitigating

01:12:58.972 --> 01:13:02.476
the risk in all of these situations, but we're happy to have

01:13:02.508 --> 01:13:05.780
that conversation more holistically.

01:13:05.860 --> 01:13:09.444
That might include us getting out of this altogether. And again,

01:13:09.492 --> 01:13:14.036
then we'd have to figure out what the right path forward is for that based

01:13:14.068 --> 01:13:18.284
on where we are. Jason, I'm just having a hard time understanding

01:13:18.332 --> 01:13:21.852
how all of a sudden the lease that ends in 2029 is

01:13:21.876 --> 01:13:24.650
somehow correlated with the Texas Energy Fund power plants.

01:13:25.230 --> 01:13:28.490
Yeah, and I shouldn't suggest that.

01:13:29.110 --> 01:13:31.170
I'm just using that as the example.

01:13:33.190 --> 01:13:36.886
Another thing you'd have to take into account in various scenario planning

01:13:36.918 --> 01:13:40.518
that we do take into account is the growth in our

01:13:40.614 --> 01:13:41.970
load ratio share.

01:13:43.150 --> 01:13:46.878
And again, a lot of that growth comes from industrial

01:13:46.934 --> 01:13:51.100
facilities as they electrify. As that occurs,

01:13:52.640 --> 01:13:56.552
we get a greater amount of load shed from ERCOT in the event we're

01:13:56.576 --> 01:14:00.304
in that situation. But we have an even greater amount of customers

01:14:00.352 --> 01:14:04.512
now that we can't rotate outages across. So again,

01:14:04.576 --> 01:14:08.800
you continue to disproportionately impact our residential

01:14:08.840 --> 01:14:12.816
and commercial customers in load shed events as the industrial

01:14:13.008 --> 01:14:16.638
sector gets bigger. And that should

01:14:16.694 --> 01:14:19.638
impact also our determination on how many assets.

01:14:19.694 --> 01:14:23.526
So I mentioned the energy fund as just an example of a scenario to

01:14:23.558 --> 01:14:27.038
think about, because I think that will impact how much we

01:14:27.054 --> 01:14:30.606
should have. It's not the only moving part, because as

01:14:30.638 --> 01:14:33.974
those units come online, we've got growth in the industrial sector,

01:14:34.022 --> 01:14:37.902
we've got growth in the residential sector. When we talk about the analysis and

01:14:37.926 --> 01:14:41.286
being more transparent about what Eric's team does, we will

01:14:41.318 --> 01:14:44.654
show all of those scenarios. So I apologize for focusing on the energy

01:14:44.702 --> 01:14:48.710
fund. That's not the. All these correlations being made to

01:14:52.330 --> 01:14:55.870
potential load shed events. And I understand that's part of the law

01:14:56.210 --> 01:15:00.082
that you all went out and bought those units for, but I guess

01:15:00.106 --> 01:15:03.402
what I'm trying to get at is there's I mean, if you want to think

01:15:03.426 --> 01:15:06.554
of Armageddon for why you need the load shed events, we could sit here and

01:15:06.562 --> 01:15:09.578
come up with a list of why you might need them for a load shed

01:15:09.594 --> 01:15:13.242
event. But the fact of the matter is, again, there have been tremendous improvements on

01:15:13.266 --> 01:15:17.238
reliability and resiliency both. Bye. The state effort of legislation that

01:15:17.254 --> 01:15:20.318
was passed by the legislature, signed into law by the

01:15:20.334 --> 01:15:23.130
Governor, we implemented all of that Legislation,

01:15:24.270 --> 01:15:27.742
and tremendous improvements and investments have

01:15:27.766 --> 01:15:31.742
been made by the transmission, distribution utilities on their distribution and transmission

01:15:31.806 --> 01:15:34.222
systems. We're in a different place now.

01:15:34.406 --> 01:15:38.118
And, I mean, you're not in the business of power

01:15:38.174 --> 01:15:41.596
generation, right? So the Texas Energy Fund, I mean,

01:15:41.668 --> 01:15:44.940
yeah, we all want those power plants built. We need that for load

01:15:44.980 --> 01:15:48.600
growth. But we really need to think about

01:15:49.300 --> 01:15:52.916
what's the optimal fleet that you should have in

01:15:52.948 --> 01:15:56.508
mobile generation fleets at this day and time, given all of these factors?

01:15:56.644 --> 01:16:02.812
And what are some pragmatic ways of moving forward given

01:16:02.956 --> 01:16:07.392
your lease contracts? What do we have to work with from

01:16:07.416 --> 01:16:11.272
a practical, pragmatic standpoint at this time? Because there's obviously,

01:16:11.296 --> 01:16:15.224
as you know, there's tremendous concern about the mobile generation units,

01:16:15.272 --> 01:16:19.140
this 15 units that cost a lot of money and were not used and

01:16:19.440 --> 01:16:22.408
the ratepayers are paying for it. And so how are we going to get to

01:16:22.424 --> 01:16:25.912
a place where, you know,

01:16:25.976 --> 01:16:29.592
we have the inadequate, you know, either there's a law change, you know, like you

01:16:29.616 --> 01:16:33.260
said, maybe there's, there's a paradigm shift in the policy.

01:16:33.690 --> 01:16:37.602
But in the meantime, you know, until then, we have to do

01:16:37.626 --> 01:16:41.778
our due diligence and understand, like, what do we have practically at

01:16:41.794 --> 01:16:46.162
our disposal right now to rethink what we're doing here? Because it's

01:16:46.186 --> 01:16:50.186
just not like you just said, you guys really

01:16:50.258 --> 01:16:53.146
went out of your way to plan for load shed events. The other utilities did

01:16:53.178 --> 01:16:56.450
not, right? The other TDUs

01:16:56.490 --> 01:16:59.788
that went out and bought mobile DGD seem to be

01:16:59.804 --> 01:17:03.012
a little bit more pragmatic. I mean, and so in

01:17:03.036 --> 01:17:06.796
terms of. But you're saying you have unique circumstances in your service territory

01:17:06.828 --> 01:17:10.188
to justify these big units. But the fact of the matter

01:17:10.244 --> 01:17:13.772
is facts have changed and we're trying

01:17:13.796 --> 01:17:16.588
to assess, like, what do we have at our disposal right now, and what does

01:17:16.604 --> 01:17:19.940
these contracts say that can, that can help us out? But it doesn't sound

01:17:19.980 --> 01:17:22.680
like there's much flexibility in the contracts is what you're saying.

01:17:22.980 --> 01:17:26.478
So we're just trying to understand that that's right.

01:17:26.574 --> 01:17:29.726
Maybe the right next step is for us to provide that

01:17:29.838 --> 01:17:32.090
past and current analysis.

01:17:33.230 --> 01:17:36.846
Transparency should start now. Is what I'm taking from your comments

01:17:36.918 --> 01:17:40.374
and so we can work with staff to

01:17:40.422 --> 01:17:44.142
figure out the right place to make that filing so that

01:17:44.206 --> 01:17:47.690
I think that will help us advance the discussion.

01:17:48.470 --> 01:17:51.926
Reasonable minds will differ with our analysis and I think

01:17:51.958 --> 01:17:55.558
we welcome that discussion with the right stakeholders.

01:17:55.614 --> 01:17:59.214
So we'll work to figure out where to start providing that

01:17:59.262 --> 01:18:02.686
information. I have a couple more

01:18:02.718 --> 01:18:03.530
questions.

01:18:07.070 --> 01:18:10.302
Could you find out what the market

01:18:10.406 --> 01:18:14.550
rate for an SMT 60 generating unit

01:18:14.590 --> 01:18:18.198
is today? I've been told by folks in the market that

01:18:18.214 --> 01:18:21.704
it's 145 to 160,000 per

01:18:21.752 --> 01:18:25.544
month, but the CNP contract says 220,000

01:18:25.592 --> 01:18:27.900
a month. So I'm just wondering,

01:18:29.760 --> 01:18:33.032
was there, it makes me believe that there

01:18:33.056 --> 01:18:36.728
was a, we got to get this done quickly. And whatever cost it is,

01:18:36.784 --> 01:18:40.392
the cost was there. So if you would please just get

01:18:40.416 --> 01:18:43.552
us that as best you can. You don't have to do another RFP, but if

01:18:43.576 --> 01:18:47.698
you picked three or four folks, okay. Now the

01:18:47.714 --> 01:18:50.270
other thing in this contract that I don't understand,

01:18:50.890 --> 01:18:52.510
who is Goldfinch Energy?

01:18:57.610 --> 01:19:01.314
I may, we have other resource witnesses that might. So let

01:19:01.322 --> 01:19:03.818
me tell you what I think, and you all can come back and tell me

01:19:03.834 --> 01:19:08.706
at a later date. So I think that in

01:19:08.738 --> 01:19:14.372
these contracts, lifecycle power was

01:19:14.396 --> 01:19:18.084
owned by a private equity firm and they

01:19:18.132 --> 01:19:21.572
didn't have the resources to go procure the generators that you needed

01:19:21.596 --> 01:19:24.948
them to procure. So they went and created this.

01:19:25.044 --> 01:19:29.324
They either life cycle or the private equity farm created another

01:19:29.412 --> 01:19:32.520
entity to backstop that.

01:19:33.620 --> 01:19:36.708
And then your prepayment of 460 million

01:19:36.764 --> 01:19:40.012
or whatever it was, became the collateral for them to go for

01:19:40.036 --> 01:19:43.444
their loan to their private equity firm, that they went and bought the generators and

01:19:43.452 --> 01:19:44.560
then gave them to you.

01:19:47.460 --> 01:19:51.764
It seems kind of strange. I'm not convinced that I

01:19:51.772 --> 01:19:55.356
don't know Goldfinch. I hope you can confirm that

01:19:55.388 --> 01:19:58.600
for me because it was a new name in there that didn't,

01:19:58.980 --> 01:20:02.524
that kind of stuck out. But that's what I see. I don't know

01:20:02.532 --> 01:20:06.972
if that's right. (item:51:Commissioner Glotfelty's question to CenterPoint on performance metrics, 56793) And then

01:20:07.156 --> 01:20:10.760
I get, there are a lot of performance

01:20:11.460 --> 01:20:14.828
metrics in here that Lifecycle Power has

01:20:14.884 --> 01:20:18.428
to abide by in order for these to happen.

01:20:18.484 --> 01:20:21.720
And I just, what I've looked at online,

01:20:22.020 --> 01:20:25.560
be it, it's online, Lifecycle Power didn't have that many employees.

01:20:25.940 --> 01:20:29.516
I don't know how they're going to perform unless they have contracts

01:20:29.548 --> 01:20:33.604
behind them that are going to set

01:20:33.652 --> 01:20:37.484
up, move all of the things that you required in the contract

01:20:37.572 --> 01:20:40.680
for these generators, whether they be small or large.

01:20:41.700 --> 01:20:45.556
And was there any exploration of that behind

01:20:45.748 --> 01:20:49.444
Lifecycle Power on? Would they be able to perform, or is it

01:20:49.452 --> 01:20:52.680
just a commitment like we got it?

01:20:54.260 --> 01:20:57.718
Yeah. We have not had those performance

01:20:57.814 --> 01:21:01.750
issues with them in the times that we've used the units.

01:21:01.830 --> 01:21:05.222
I know that was one of the reasons why we had the letter

01:21:05.246 --> 01:21:09.054
of credit, the escrow account, and the various other protections

01:21:09.222 --> 01:21:12.558
for us and customers in the event they weren't able to perform. I don't know,

01:21:12.574 --> 01:21:16.158
Eric, if you know the size of their employees that help us

01:21:16.174 --> 01:21:20.062
with this. No, I do not. I know that they have brought in resources

01:21:20.166 --> 01:21:23.984
from out of town when we've needed them. So in terms of having

01:21:24.032 --> 01:21:27.528
the resources in Houston when we needed them, they've been able to

01:21:27.544 --> 01:21:30.752
fulfill those obligations. I know that they've flown people in at times.

01:21:30.816 --> 01:21:34.024
So where are those resources? What the contractual

01:21:34.072 --> 01:21:37.936
agreements are, I don't know, but we would

01:21:37.968 --> 01:21:41.232
tell them how many units we needed to be ready to operate and

01:21:41.256 --> 01:21:44.808
they would have the resources available to operate those units.

01:21:44.904 --> 01:21:48.458
Okay. If you would just get me some better

01:21:48.514 --> 01:21:51.922
understanding of how that transaction works, because it leads

01:21:51.946 --> 01:21:55.322
me to believe that you did a transaction with a company that didn't actually

01:21:55.386 --> 01:21:58.594
have enough revenue or enough resources to actually

01:21:58.722 --> 01:22:01.962
buy the generators without you giving them the money to

01:22:01.986 --> 01:22:04.190
satisfy that lease. Got it.

01:22:05.610 --> 01:22:09.562
The other question that I have is, again, a little

01:22:09.706 --> 01:22:12.842
research here on the Internet. We don't know if that's always true or

01:22:12.866 --> 01:22:16.762
nothing. It seems like the CEO of

01:22:16.866 --> 01:22:19.990
Life Cycle Power is in litigation with his old firm.

01:22:20.450 --> 01:22:24.030
Are you all involved in that? So, John Tuma versus

01:22:24.610 --> 01:22:27.870
Life Cycle Power? Are you involved in that litigation?

01:22:30.890 --> 01:22:34.122
I'm aware of the litigation. I don't know whether

01:22:34.186 --> 01:22:37.370
we're a party to it, but can follow up with you

01:22:37.450 --> 01:22:41.032
on that. And can you let us know if

01:22:41.096 --> 01:22:44.400
any of that has to do with any of this mobile

01:22:44.440 --> 01:22:48.340
gen contract and if so, how that might

01:22:48.840 --> 01:22:52.328
interplay? Yes, we'll follow up.

01:22:52.344 --> 01:22:55.160
And let me just turn to make sure none of our colleagues know whether we're

01:22:55.200 --> 01:22:56.660
party to that. I just don't.

01:22:58.920 --> 01:23:01.904
Okay. Okay. Yeah.

01:23:02.032 --> 01:23:05.184
The head of our procurement tells me that we're not a party to that litigation,

01:23:05.232 --> 01:23:08.742
but we'll get a, we'll pull information about it.

01:23:08.926 --> 01:23:12.142
I am aware that it exists. I don't know the current status, but we'll pull

01:23:12.166 --> 01:23:15.850
that information and provide it. Okay, I think I just have one more question,

01:23:16.310 --> 01:23:19.542
and that is no, two more questions. No, three more questions.

01:23:19.566 --> 01:23:22.310
No kidding. One day we're going to hold you to that number.

01:23:22.390 --> 01:23:25.606
Yeah, these are kind of

01:23:25.638 --> 01:23:28.650
yes no answers, so they're fairly quick.

01:23:29.230 --> 01:23:34.496
One of them is so,

01:23:34.648 --> 01:23:38.020
isn't it? Right. That you all went and procured these generators,

01:23:38.680 --> 01:23:42.220
these generation leases prior to the Commission

01:23:42.560 --> 01:23:46.144
completing a rule on how and what is

01:23:46.192 --> 01:23:49.260
prudent in that under that program?

01:23:49.600 --> 01:23:53.776
Yes, sir. Okay. Is that a normal practice for

01:23:53.848 --> 01:23:58.026
a utility across the

01:23:58.058 --> 01:24:01.590
country that gets their rates paid for?

01:24:02.530 --> 01:24:06.562
Do they normally say $800 million? Oh, we'll go spend it and figure

01:24:06.586 --> 01:24:10.242
out the rules later. I think it depends on

01:24:10.386 --> 01:24:13.150
the type of asset.

01:24:14.170 --> 01:24:17.790
And we operated under the expectation that

01:24:18.490 --> 01:24:21.674
if the tool was available, we should

01:24:21.722 --> 01:24:24.964
have it, especially before the next

01:24:25.012 --> 01:24:29.172
winter. And that's why we had the protections

01:24:29.196 --> 01:24:33.972
in there of, we can undo this if

01:24:34.076 --> 01:24:36.840
there's a determination that it was imprudent.

01:24:37.660 --> 01:24:41.060
It's one of the reasons why we wanted that provision in the contract,

01:24:41.140 --> 01:24:45.396
because we were doing this not in necessarily

01:24:45.548 --> 01:24:49.240
the ideal order, but didn't want to have

01:24:49.380 --> 01:24:53.112
a repeat of load shed where we couldn't

01:24:53.176 --> 01:24:54.540
rotate outages.

01:24:56.080 --> 01:24:59.768
And we had a tool that we could have had and we didn't have it.

01:24:59.904 --> 01:25:03.300
Okay, so two very quick things. One of them is,

01:25:04.160 --> 01:25:07.584
I think ERCOT told me that your load ratio share is now determined twice

01:25:07.632 --> 01:25:10.500
a year. Can you all make sure that that is right?

01:25:11.080 --> 01:25:15.184
And if it doesn't include, if it includes

01:25:15.232 --> 01:25:18.866
all of your industrial generation that can't

01:25:18.898 --> 01:25:22.802
be shed, maybe we should look at that and consider that as it's,

01:25:22.906 --> 01:25:26.874
as a fairness component across the state for load share ratios for

01:25:26.962 --> 01:25:30.522
load shed. So it is calculated twice a year and

01:25:30.546 --> 01:25:34.354
it does include our industrial load. It does include all the industrial load.

01:25:34.442 --> 01:25:37.754
Maybe we should consider that and see the components

01:25:37.802 --> 01:25:41.842
there. I think the

01:25:41.866 --> 01:25:45.590
final question that I have is it deals with

01:25:47.960 --> 01:25:50.020
distributed resources on your system.

01:25:51.680 --> 01:25:54.780
In light of this, and actually, prior to the event,

01:25:55.120 --> 01:25:59.180
we've seen a lot of distributed resources that want to connect to the distribution system.

01:25:59.920 --> 01:26:03.380
We have, quite frankly, heard of very good

01:26:03.880 --> 01:26:07.808
tdus and very mediocre tdus. And I hate

01:26:07.824 --> 01:26:11.504
to say it, but you all are in the mediocre category. Not because.

01:26:11.592 --> 01:26:15.386
Well, primarily because of some of the things that you all are

01:26:15.418 --> 01:26:18.470
doing and costs that you incur on that that are not uniform.

01:26:19.250 --> 01:26:26.114
One of them that I've been told about is a transfer

01:26:26.162 --> 01:26:29.530
trip device. Okay, I understand a transfer trip device.

01:26:29.570 --> 01:26:34.170
There's no argument that they're needed because they're required for safety

01:26:34.210 --> 01:26:37.562
of linemen. But the question is, at what level

01:26:37.626 --> 01:26:41.636
and how is that a fourth level of protection or not? Can you

01:26:41.668 --> 01:26:45.404
all educate us a little bit on this? Why they're needed,

01:26:45.452 --> 01:26:48.924
what the component is, and why people

01:26:48.972 --> 01:26:52.292
that want to put generators on their own system or in

01:26:52.316 --> 01:26:55.932
the system are having a problem with

01:26:55.956 --> 01:26:59.404
you all on this issue? (item:51:Eric Easton on distributed generation, 56793) Yeah, I can

01:26:59.492 --> 01:27:03.412
speak to that a little bit. So the transport trip is put

01:27:03.436 --> 01:27:06.700
in place, as you mentioned, safety concern.

01:27:07.160 --> 01:27:10.568
If you have a distributed energy resource that's connected to

01:27:10.584 --> 01:27:14.624
the network and we trip that circuit, that resource

01:27:14.672 --> 01:27:18.016
could then go ahead and back feed that circuit.

01:27:18.168 --> 01:27:22.072
So typically, depending on the load. So what that means is

01:27:22.216 --> 01:27:27.200
you all take a line out of service in order to be not

01:27:27.240 --> 01:27:30.460
energized. And if there's a generator on it

01:27:30.930 --> 01:27:34.954
somewhere, it could still be generated. It still could be energized.

01:27:35.082 --> 01:27:38.426
Yeah, it could be that we don't take the line out of service. It could

01:27:38.458 --> 01:27:41.786
be a faulted condition. So you could have a line that was

01:27:41.818 --> 01:27:45.258
down, and our relay would have potentially

01:27:45.354 --> 01:27:49.138
isolated that circuit, isolating the down power line.

01:27:49.314 --> 01:27:53.162
And then this generator could back feed the circuit and continue to

01:27:53.186 --> 01:27:56.106
keep that energized. So now it's not only a risk for.

01:27:56.138 --> 01:27:58.826
For folks that might be working on our system,

01:27:58.978 --> 01:28:02.978
it's also a potential risk for the public. And it could cause

01:28:03.034 --> 01:28:06.394
other unintended consequences, such as wildfires,

01:28:06.442 --> 01:28:09.882
et cetera. So as a result,

01:28:10.066 --> 01:28:13.762
typically there's a ratio between the load on the circuit and

01:28:13.786 --> 01:28:16.826
the size of the generator. Depending on

01:28:16.858 --> 01:28:20.482
that ratio, the generator may trip offline on

01:28:20.506 --> 01:28:23.972
its own because there's too much load for that generator

01:28:24.036 --> 01:28:26.520
to sustain itself. And therefore,

01:28:27.100 --> 01:28:30.964
in some cases, people will accept not

01:28:31.012 --> 01:28:34.652
having transfer trip based on that ratio.

01:28:34.836 --> 01:28:39.068
And the assumption that that generator is going to trip off at

01:28:39.084 --> 01:28:42.348
centerpoint. We don't make that assumption. And we say

01:28:42.404 --> 01:28:45.652
if the generator is of a certain size and we still look

01:28:45.676 --> 01:28:49.374
at some of those conditions, but then we want to provide transfer

01:28:49.422 --> 01:28:53.086
trips so that we can ensure a signal has been sent

01:28:53.278 --> 01:28:57.094
to that generator to isolate it such that public

01:28:57.142 --> 01:29:00.526
safety and our crews are safe. So I think this is an issue,

01:29:00.678 --> 01:29:04.030
obviously not an investigation issue, but I want to talk to you all about it.

01:29:04.110 --> 01:29:07.582
I understand that it's even more challenging as more and more folks are

01:29:07.606 --> 01:29:10.766
looking to put their own resources at their

01:29:10.798 --> 01:29:13.930
locations, at commercial sites in Houston.

01:29:14.950 --> 01:29:18.918
That the load numbers get changed and varied

01:29:18.974 --> 01:29:22.974
with recloser devices and things

01:29:23.022 --> 01:29:26.250
as you go further down. And that means what used to be a whole line

01:29:26.830 --> 01:29:30.382
at, say, 50, you put a recloser on

01:29:30.406 --> 01:29:33.814
it, or whatever the device is, and now it's 25. Then it gets lower and

01:29:33.822 --> 01:29:37.494
lower and lower, creating a problem. I would like to solve this as part of

01:29:37.542 --> 01:29:41.368
the effort here, as we

01:29:41.384 --> 01:29:44.736
are trying to create resiliency in this system

01:29:44.808 --> 01:29:48.720
and in your system and in all the utility systems to allow consumers

01:29:48.800 --> 01:29:52.960
and businesses to do what they want to ensure that their businesses can function.

01:29:53.120 --> 01:29:57.336
So, yes, sir. I think on as

01:29:57.368 --> 01:30:01.140
we have that discussion, we should include,

01:30:01.560 --> 01:30:05.056
you know, if we, if in our judgment and

01:30:05.168 --> 01:30:08.398
you all agree to we need to have these devices, I think we

01:30:08.414 --> 01:30:12.254
could talk about how do you remove the barrier to individual customers,

01:30:12.302 --> 01:30:15.310
then, you know, who pays for it, essentially. That's right.

01:30:15.390 --> 01:30:19.526
Especially as we think about the societal

01:30:19.558 --> 01:30:23.210
benefits of these local distributed generation

01:30:23.830 --> 01:30:27.590
assets. If there are societal benefits,

01:30:27.670 --> 01:30:31.760
then perhaps society pays for these devices.

01:30:31.910 --> 01:30:36.052
And so I think we're happy to have that conversation. We should have that

01:30:36.236 --> 01:30:39.332
not part of their investigation, but part of the other distributed

01:30:39.356 --> 01:30:43.000
resource discussions that we have and we'll have more of. Thank you.

01:30:43.820 --> 01:30:48.076
Yeah, and I want to come back because chairman Gleason asked for

01:30:48.148 --> 01:30:52.260
previous and ongoing analysis of your decisions. I really

01:30:52.300 --> 01:30:55.364
want that number of how many megawatts you can rotate out today. You've made a

01:30:55.372 --> 01:30:58.836
lot of investments in your system. I had an answer

01:30:58.868 --> 01:31:01.676
that Eric, you gave me an answer that was a non answer. I want the

01:31:01.708 --> 01:31:04.320
total amount of megawatts you can rotate out today.

01:31:05.060 --> 01:31:08.924
Not by ERCOT direction, not just how many can you rotate out effectively

01:31:08.972 --> 01:31:12.924
today. And I want to also reemphasize

01:31:12.972 --> 01:31:15.960
this, Jason. Because you've talked a lot about load shed today.

01:31:16.380 --> 01:31:20.800
But the fact of the matter is, is that CenterPoint did a significant testimony.

01:31:21.180 --> 01:31:24.460
And from my understanding, I wasn't at the legislature

01:31:24.500 --> 01:31:27.226
at the time or staff or anything like that. I was actually at the Commission.

01:31:27.298 --> 01:31:30.770
But you guys really sold this mobile

01:31:30.810 --> 01:31:34.730
generation at the legislature and submitted a lot of testimony

01:31:34.810 --> 01:31:37.954
here in your DCRF docket, the underlying docket.

01:31:38.002 --> 01:31:41.470
Talking about how these mobile generation units could be used for hurricanes.

01:31:41.930 --> 01:31:45.138
And the fact of the matter is the majority of them

01:31:45.274 --> 01:31:49.098
cannot be used for hurricanes. So, you know, you can focus on

01:31:49.114 --> 01:31:52.482
loadshed all you want, but you guys made the case for hurricanes. And now

01:31:52.506 --> 01:31:56.722
we're at a place after Hurricane barrel where there's been devastating

01:31:56.786 --> 01:32:00.510
impacts in the service territory. People died.

01:32:00.890 --> 01:32:04.466
And so like, we're having to understand,

01:32:04.578 --> 01:32:09.082
I'm trying to understand why we're so focused on load shed today when hurricanes

01:32:09.106 --> 01:32:12.950
was a big part of your testimony, your position

01:32:13.530 --> 01:32:16.546
in various venues. So I just wanted to say that,

01:32:16.618 --> 01:32:19.950
and I don't expect you to have an answer, but that's.

01:32:20.410 --> 01:32:24.506
I just find it, you know, I feel like there's

01:32:24.538 --> 01:32:28.002
a lot of kind of talking out of both

01:32:28.026 --> 01:32:31.026
sides of your mouth on this issue, doing little dances,

01:32:31.098 --> 01:32:34.474
pointing to different facts to justify your decision. But the fact of

01:32:34.482 --> 01:32:37.138
the matter is, we're here and we need to figure out what we're going to

01:32:37.154 --> 01:32:40.890
do with this fleet. Sure. Now, I can provide a couple of responses.

01:32:40.930 --> 01:32:44.298
So, on the. I don't want an answer. I'm done. I just.

01:32:44.354 --> 01:32:47.266
I'm done with the discussion. It's just the last statement I wanted to. I thought

01:32:47.298 --> 01:32:50.938
you were asking. No, I just want the megawatts from you. How much? Okay.

01:32:50.994 --> 01:32:55.474
1700. That's all you. Even rotation is 1700.

01:32:55.562 --> 01:32:57.790
The mobile gen makes up the rest of it.

01:33:00.410 --> 01:33:04.066
Because in order, as I said earlier, the 3000 mw that

01:33:04.098 --> 01:33:07.186
we have is the manual load shed number. And then

01:33:07.218 --> 01:33:10.514
we added to that about roughly 400 more megawatts

01:33:10.562 --> 01:33:14.412
with the IGSD devices. So that gives you

01:33:14.596 --> 01:33:18.196
roughly 3400. And so if you take half

01:33:18.228 --> 01:33:21.796
of that in order to do even rotation, so that's a predictable

01:33:21.868 --> 01:33:25.284
rotation, so that we can tell customers how many,

01:33:25.412 --> 01:33:28.812
how long they're going to be out before they come back on. It has to

01:33:28.836 --> 01:33:32.320
be a 50 50 ratio. So that's how you get to the 1700.

01:33:32.700 --> 01:33:36.532
And then if we had a URI type event

01:33:36.636 --> 01:33:40.012
or deeper load shed than that. Then that's where the

01:33:40.036 --> 01:33:43.012
temporary generation fills that void. Okay,

01:33:43.116 --> 01:33:47.172
well, I. I don't

01:33:47.196 --> 01:33:49.960
know that that completely answers what I'm saying.

01:33:50.860 --> 01:33:54.588
What I'm trying to get here is how many thousands of megawatts

01:33:54.604 --> 01:33:57.732
can you now rotate out? You can rotate out more than 5000. Now,

01:33:57.796 --> 01:34:01.220
when you say rotate out, do you mean shed? Shed. Yeah, we can drop

01:34:01.260 --> 01:34:05.112
as many as we have. I mean, that's the honest is, if ERCOT

01:34:05.136 --> 01:34:08.368
directs us to shed all of our load, we'd have to shed all of

01:34:08.384 --> 01:34:11.552
our load. Well, but you can't. Right? Because of certain restrictions with

01:34:11.576 --> 01:34:15.096
critical load. So there's a difference between the shedding of load

01:34:15.168 --> 01:34:18.424
and the rotating of load. So when we shed load,

01:34:18.592 --> 01:34:23.128
that's where ERCOT gives a directive in order to maintain system frequency.

01:34:23.264 --> 01:34:26.968
And whatever number that they give us is what we shed. They give

01:34:26.984 --> 01:34:30.260
you 5000 last time. Our ability to rotate

01:34:31.160 --> 01:34:34.744
necessitates that we have some load still online so that we can rotate

01:34:34.792 --> 01:34:38.936
that load. And so during Winter Storm Uri, the issue was that

01:34:39.128 --> 01:34:43.304
we had a directive to shed more than that 50% ratio.

01:34:43.472 --> 01:34:46.840
And so that's why we could no longer rotate the load, but we could still

01:34:46.880 --> 01:34:50.072
shed. If ERCOT had told us to continue shedding, we would have

01:34:50.096 --> 01:34:54.224
had to continue shedding. Otherwise we would have had a blackout across the entire

01:34:54.272 --> 01:34:57.720
ERCOT region. And so we continued to shed even

01:34:57.760 --> 01:35:00.912
though we could no longer rotate. And the

01:35:00.976 --> 01:35:04.220
temporary generation is what solves the rotation problem.

01:35:04.520 --> 01:35:08.216
But the shed is the shed. We would shed whatever ERCOT

01:35:08.248 --> 01:35:12.368
directs us to shed. Well, I want something in writing that explains this in

01:35:12.504 --> 01:35:15.728
the issues related project. We will definitely have it. Because I want to make

01:35:15.744 --> 01:35:19.128
sure that the information you all have been providing ERCOT in

01:35:19.144 --> 01:35:22.736
various forums on your ability to rotate matches what you provide us

01:35:22.768 --> 01:35:26.018
in this record. Thank you. Yeah. And I think one thing

01:35:26.034 --> 01:35:29.338
that might be helpful, I think, you know, the large units.

01:35:29.434 --> 01:35:32.842
I think, were procured in large part because we have an order that says,

01:35:32.906 --> 01:35:36.186
don't rotate any customer for more than 12 hours. And so that's

01:35:36.218 --> 01:35:39.722
part of that determination. So I think what would be helpful is,

01:35:39.866 --> 01:35:43.138
given that order, has that number changed?

01:35:43.234 --> 01:35:46.154
And so I think it would be helpful to talk to staff and come by

01:35:46.162 --> 01:35:49.386
and brief the offices. Because I think that was a large reason as to

01:35:49.418 --> 01:35:53.642
why those large, those larger units were procured. And so has that number changed

01:35:53.746 --> 01:35:55.390
since that initial procurement?

01:35:56.450 --> 01:35:59.978
Happy to do that. Okay. I think those large generators, the way

01:35:59.994 --> 01:36:03.750
that they propose to use them, from an engineering perspective,

01:36:04.130 --> 01:36:07.650
increase the flexibility for all the consumers in Texas on how to shed

01:36:07.690 --> 01:36:10.070
load, especially those in your territory.

01:36:11.850 --> 01:36:15.770
It's just a solution to one problem

01:36:15.850 --> 01:36:19.400
that's been superimposed on another problem. And I think that

01:36:20.100 --> 01:36:23.820
the discussion, like you said, Jason, needs to happen on,

01:36:23.900 --> 01:36:27.868
is this your role in the system that

01:36:27.884 --> 01:36:30.080
was set up by the legislature, or is it not?

01:36:31.140 --> 01:36:34.668
(item:51:Commissioner Jackson's question on managing risk, 56793) But either way, we need to manage the risk. Right. And so what I'd be

01:36:34.684 --> 01:36:37.940
interested in, because you mentioned, or you laid out, like,

01:36:38.020 --> 01:36:41.372
three areas that you are, three distinct areas that you have to

01:36:41.396 --> 01:36:44.988
manage the risk on. So it's not only what you're dictated

01:36:45.044 --> 01:36:49.420
to do by ERCOT, but also the fact that you have 60%

01:36:49.460 --> 01:36:52.852
of your powers input to Houston,

01:36:52.996 --> 01:36:56.516
as well as any risk associated with your traditional

01:36:56.548 --> 01:36:59.868
facilities that are now operating in the Houston area.

01:36:59.924 --> 01:37:04.236
So it's three areas with

01:37:04.268 --> 01:37:07.148
different levels of risk that at some point in time, you have to come together.

01:37:07.204 --> 01:37:10.556
And I'm assuming that's part of what is going to be part of this study

01:37:10.628 --> 01:37:14.648
and this independent an

01:37:14.704 --> 01:37:17.888
assessment that's going to be done. And so, I mean, at the end of

01:37:17.904 --> 01:37:21.704
the day, we want to make sure that the lights stay on in Houston,

01:37:21.872 --> 01:37:24.584
but we want to do it in a way that, you know,

01:37:24.632 --> 01:37:28.624
manages risk effectively and in

01:37:28.632 --> 01:37:31.448
the most cost effective way we can. You're absolutely correct.

01:37:31.504 --> 01:37:35.256
And those three don't even cover the electrification issue

01:37:35.328 --> 01:37:39.910
that Jason brought up earlier. So our residential

01:37:40.810 --> 01:37:44.602
customer growth is not going to parallel

01:37:44.706 --> 01:37:49.170
the load growth from electrification of industrial

01:37:49.210 --> 01:37:53.626
facilities in the Houston footprint. And so to Commissioner

01:37:53.658 --> 01:37:57.282
Glotfelty's point, we've got to think about how

01:37:57.306 --> 01:38:00.550
do we handle industrial load in the load ratio share?

01:38:00.890 --> 01:38:04.232
As we talk to our industrial partners in the Houston footprint,

01:38:04.386 --> 01:38:08.200
we could see two to three times the industrial load that we have today,

01:38:08.620 --> 01:38:12.084
which means essentially the residential customers that are left

01:38:12.172 --> 01:38:15.468
are going to have an even detrimental position from a

01:38:15.484 --> 01:38:19.476
load shed perspective if we don't address the

01:38:19.548 --> 01:38:22.360
inclusion of industrial load in the load ratio share.

01:38:26.060 --> 01:38:28.480
One last thing. Going back to the lease,

01:38:29.990 --> 01:38:33.262
it is odd that there is no way for you to terminate it. I think

01:38:33.286 --> 01:38:36.294
you can always go back and renegotiate. I think you should look at those options

01:38:36.342 --> 01:38:40.086
and see what is available, see if subleasing them to others

01:38:40.158 --> 01:38:43.558
is available, because I think you need to have those options ready to present to

01:38:43.574 --> 01:38:46.590
the Commission and the Legislature most likely as well.

01:38:46.670 --> 01:38:49.926
Understood. I just have three more questions.

01:38:49.998 --> 01:38:52.530
I'm kidding. I'm done.

01:38:54.150 --> 01:38:57.426
So Jason and Eric, thank you for being here. Thank you for answering our questions.

01:38:57.458 --> 01:39:00.362
You know, there's some follow up to do. Work with staff in the offices to

01:39:00.426 --> 01:39:03.658
get the information and we'll continue to be in contact. Yes,

01:39:03.674 --> 01:39:07.338
sir. Thank you. Thank you. So we are

01:39:07.434 --> 01:39:10.818
getting dangerously close to needing to give our court reporter a break. I think we're

01:39:10.834 --> 01:39:14.562
still waiting for a second court reporter to arrive. That is right. So let's

01:39:14.586 --> 01:39:17.350
try to at least get through. Let's go to public testimony,

01:39:18.130 --> 01:39:21.564
and if we have public comment, which I think we do try

01:39:21.572 --> 01:39:24.692
to get through that, and then we'll take a break so we can give our

01:39:24.716 --> 01:39:28.596
court reporter a much deserved break. That sounds

01:39:28.628 --> 01:39:32.108
good. So then you would like to take up Item No. 1

01:39:32.124 --> 01:39:35.348
is that correct? Yes, take up Item No. 1. Shelah, do we have anyone signed up

01:39:35.364 --> 01:39:38.668
for Public Comment? (item:1:Shelah Cisneros, Commission Counsel,  confirms 3 people have signed up for Public Comment) Yes, sir. We have three people that have signed

01:39:38.684 --> 01:39:42.260
up for Public Comment. The first person that signed up is Bruce

01:39:42.340 --> 01:39:43.320
Sorgen.

01:39:45.460 --> 01:39:47.600
And just to clarify, is it the usual three minutes? 3 minutes.

01:39:53.190 --> 01:39:56.490
(item:1:Bruce Sorgen, TX citizen, concerning Windermere Oaks WSC) Hello, Commissioners. My name is Bruce Sorgen. As you may remember,

01:39:57.070 --> 01:39:59.718
they're looking for a job opening. Maybe I'm down here so much.

01:39:59.774 --> 01:40:03.610
But anyway. Windermere Water Supply is a

01:40:03.990 --> 01:40:06.670
water co op in the Spicewood area,

01:40:06.710 --> 01:40:08.610
285 water meters,

01:40:09.750 --> 01:40:14.150
since for the last nine years, it's been in full turmoil

01:40:14.190 --> 01:40:17.198
mode. In 2020,

01:40:17.334 --> 01:40:21.198
a rate appeal that you are quite familiar with was centered around a 71%

01:40:21.254 --> 01:40:24.662
rate increase. This increase was implemented for

01:40:24.686 --> 01:40:28.286
one purpose, so the board could spend over $2 million in legal fees.

01:40:28.478 --> 01:40:32.606
Legal fees to cover an outrageous land deal where the previous board sold 3.8

01:40:32.638 --> 01:40:37.494
acres of water co op land to a sitting director who

01:40:37.502 --> 01:40:41.394
is a realtor for one 6th of its value, mind you, that the board chose

01:40:41.562 --> 01:40:44.870
to aggressively insert themselves into this legal battle.

01:40:46.010 --> 01:40:49.506
Why am I here today? I am here today to ask this

01:40:49.538 --> 01:40:53.070
Commission, where is our PUC ordered audit?

01:40:53.770 --> 01:40:55.910
I am here today to ask this Commission,

01:40:56.930 --> 01:41:00.634
where is our PUC ordered $886,000

01:41:00.722 --> 01:41:03.150
rate refund that you guys ordered?

01:41:04.450 --> 01:41:07.990
We have many retired people in our community that need this money just to live.

01:41:08.360 --> 01:41:12.088
I have yet to find one member of our community who has received any of

01:41:12.104 --> 01:41:15.912
this money. I'm here today to ask this Commission

01:41:16.016 --> 01:41:19.216
how it is that a water board, a water commit.

01:41:19.248 --> 01:41:23.928
A WSC board can spend $75,898

01:41:23.984 --> 01:41:26.860
on legal fees in the last four months alone.

01:41:28.760 --> 01:41:30.460
We've yet to see Julys.

01:41:32.400 --> 01:41:36.010
Mister Carleton is a law firm who has billed our

01:41:36.050 --> 01:41:38.790
community 75,000 plus dollars.

01:41:40.250 --> 01:41:43.458
July is going to be even worse anyway. For the

01:41:43.474 --> 01:41:46.762
last four months, I mean, for four months

01:41:46.786 --> 01:41:52.826
alone, this Commission ordered

01:41:52.858 --> 01:41:56.090
$3,000 a year legal budget for the. For the entire year

01:41:56.250 --> 01:42:00.266
anyway. The wind. Tomorrow, the Windermere Oaks Water

01:42:00.298 --> 01:42:04.330
Board is paying a lawyer to write boards, agendas and minutes.

01:42:04.870 --> 01:42:08.410
In the last 16 months, there have only been one set of minutes produced.

01:42:09.670 --> 01:42:13.030
If we're going to pay a lawyer to do this for this kind of outrageous

01:42:13.070 --> 01:42:16.614
waste, why do we need a board? Why is there no system

01:42:16.662 --> 01:42:19.726
in place for this great state of ours to make a board comply with this

01:42:19.758 --> 01:42:20.970
Commission's orders?

01:42:23.270 --> 01:42:27.054
The current board is not concerned with anything this Commission has ordered.

01:42:27.182 --> 01:42:30.242
The proof of that is can easily be seen in their filings

01:42:30.306 --> 01:42:33.802
to the Commission. Oh, wait, they don't bother to do

01:42:33.826 --> 01:42:37.098
their required filings, do they? Instead, they are

01:42:37.114 --> 01:42:40.826
focused on one thing only. The quick sale of a remaining six acres

01:42:40.898 --> 01:42:44.410
of co op land. They've even

01:42:44.450 --> 01:42:48.282
fired the entire real estate committee because these ladies were pushing

01:42:48.306 --> 01:42:51.898
them to slow down and property market the land

01:42:52.034 --> 01:42:55.836
and get an appraisal. In closing, I am asking this Commission

01:42:55.908 --> 01:43:00.068
to install a manager to run this co op. We are quickly approaching a

01:43:00.124 --> 01:43:02.320
decade of this three ring circus.

01:43:03.020 --> 01:43:06.348
Thank you for being here. The next person that signed up

01:43:06.364 --> 01:43:07.720
is Danny Flunker.

01:43:19.670 --> 01:43:24.010
(item:1:Danny Flunker, TX citizen, on behalf of rate payers of Windermere Oaks WSC) How are y'all doing this morning? It is morning still

01:43:24.510 --> 01:43:27.630
alright, you know. Here we are again. We're back. Thank you for having

01:43:27.670 --> 01:43:31.558
us. I'm here on behalf of many of the ratepayers

01:43:31.694 --> 01:43:35.374
in our community who feel utterly voiceless on the ongoing issues

01:43:35.422 --> 01:43:38.606
with Windermere Oaks Water Supply Corporation. And as

01:43:38.638 --> 01:43:42.530
Bruce mentioned, for 16 months, they have one set of minutes produced.

01:43:42.990 --> 01:43:45.530
The lack of transparency is unacceptable.

01:43:46.260 --> 01:43:49.580
At the last WWC meeting, Windermere Water Supply Corp.

01:43:49.660 --> 01:43:53.292
Meeting with the new attorney being present, the members were

01:43:53.316 --> 01:43:57.044
left outside in the scorching heat while the board and the attorney went

01:43:57.092 --> 01:44:00.724
down the street to the directors house in their air conditioned home for nearly 3

01:44:00.772 --> 01:44:04.308
hours in executive session. Upon the return, they voted

01:44:04.324 --> 01:44:07.516
on only one of five agenda items and

01:44:07.548 --> 01:44:11.674
adjourned, completely ignoring the other agenda items.

01:44:11.812 --> 01:44:15.130
Among those disregarded items were critical issues.

01:44:16.070 --> 01:44:19.770
The IR's investigation. Nothing. They didn't table it.

01:44:20.190 --> 01:44:23.342
PUC compliance matter 56167.

01:44:23.486 --> 01:44:25.982
Didn't table it, didn't talk about it.

01:44:26.166 --> 01:44:30.326
PUC enforcement compliance matter Docket 56272 didn't

01:44:30.358 --> 01:44:33.510
talk about it. Didn't table it. And then the

01:44:33.590 --> 01:44:38.392
CCN application. PUC application Docket 55840

01:44:38.496 --> 01:44:42.296
didn't talk about it. Didn't table it. Nothing. And again,

01:44:42.368 --> 01:44:45.912
despite spending nearly $76,000 in legal fees in just four months,

01:44:45.936 --> 01:44:49.860
and they haven't given us July's invoices yet and I've requested them,

01:44:50.520 --> 01:44:54.472
these matters all remain unaddressed. Furthermore,

01:44:54.536 --> 01:44:58.256
the water co op has been operating without a president, secretary or

01:44:58.288 --> 01:45:02.096
treasurer since March, and they have three directors,

01:45:02.208 --> 01:45:05.778
so that each one of them could take one of those roles, which is a

01:45:05.794 --> 01:45:09.170
serious governance failure. We're just

01:45:09.250 --> 01:45:13.170
asking for relief, some form relief. This is an untenable situation.

01:45:13.250 --> 01:45:17.018
And as Bruce mentioned, we have a decade of corruption and it

01:45:17.034 --> 01:45:20.858
just continues. That's it. Thank you. Thank you,

01:45:20.874 --> 01:45:21.430
sir.

01:45:23.650 --> 01:45:26.270
And the last person to sign up was Allen Hicks.

01:45:39.620 --> 01:45:42.800
(item:1:Allen Hicks, TX citizen, concerning Windermere Oaks WSC) Good morning Commissioners and thank you for allowing me to speak.

01:45:43.100 --> 01:45:46.700
I spoke before y'all, right, before y'all ruled on our rate

01:45:46.740 --> 01:45:50.596
appeal. Just giving y'all a little bit of a personal touch to

01:45:50.748 --> 01:45:55.038
the hardships that. That 71% rate appeal

01:45:55.214 --> 01:45:58.478
or the 71% increase

01:45:58.534 --> 01:46:02.646
they put on us to pay the legal fees. After y'all's ruling,

01:46:02.798 --> 01:46:06.050
I wanted to come for you all first to thank y'all for that.

01:46:06.430 --> 01:46:10.270
I'm a retired police officer with fixed

01:46:10.310 --> 01:46:14.574
income. And as a result of y'all reducing our rates,

01:46:14.702 --> 01:46:18.270
I'm seeing $130 more a month on my.

01:46:18.430 --> 01:46:22.504
Less on my month, $130 more a month less on my water

01:46:22.552 --> 01:46:26.720
bill, which is coming in pretty handy right now in these hard economic times.

01:46:26.880 --> 01:46:30.128
And I'm not using any more water than I was using before.

01:46:30.304 --> 01:46:33.288
Y'all ruled for them to roll our rates.

01:46:33.384 --> 01:46:37.000
And our community is a group of. There's quite a few

01:46:37.040 --> 01:46:40.984
retired people, and I'm sure they really appreciated

01:46:41.152 --> 01:46:45.032
y'all lowering our rates down because it's helped us all, because we

01:46:45.056 --> 01:46:48.294
all are on the. Well, a lot of strong fixed incomes out there.

01:46:48.462 --> 01:46:52.062
But going to just touching on what Danny and Bruce have said,

01:46:52.206 --> 01:46:55.850
however, this current board, under the leadership of Jeff Walker,

01:46:57.190 --> 01:47:00.894
they're going down the same path. The land sale that Bruce just talked about,

01:47:00.942 --> 01:47:05.470
not only are they trying to emulate

01:47:05.510 --> 01:47:09.422
this original land sale, that char that started the lawsuit

01:47:09.446 --> 01:47:13.300
that caused the rate appeal, there's a lift station on the there.

01:47:13.460 --> 01:47:16.636
And against advice from attorneys, they have

01:47:16.668 --> 01:47:20.268
not surveyed the land. They have not got an appraisal of the land. So we

01:47:20.284 --> 01:47:24.108
don't know what the plan is with the lift station for our water corporation,

01:47:24.164 --> 01:47:27.868
if that property is sold. And at

01:47:27.884 --> 01:47:32.452
this point, I don't even know if we do have a legitimate board because since

01:47:32.516 --> 01:47:35.908
February, when we had our board elections, we had a full board.

01:47:35.964 --> 01:47:39.642
Then folks started leaving the board. There was

01:47:39.666 --> 01:47:43.602
a lot of disagreement on the way things were run.

01:47:43.786 --> 01:47:47.042
We've had several meetings where members were picked

01:47:47.226 --> 01:47:50.530
from the meeting

01:47:50.650 --> 01:47:54.538
to come up and set to be a board member so we'd have a quorum,

01:47:54.674 --> 01:48:01.794
so they could talk about things and vote on things. That's how I

01:48:01.802 --> 01:48:04.938
don't even know the correct word to say. But that's how bad things have gotten

01:48:04.954 --> 01:48:08.806
involved. Windermere, that we are asking

01:48:08.838 --> 01:48:12.550
for volunteers to come up and set it so we'll have a quorum

01:48:12.590 --> 01:48:16.022
to cover agenda items. And the reason folks don't

01:48:16.046 --> 01:48:19.430
want to sit on the board is, as Danny and Bruce

01:48:19.470 --> 01:48:22.854
had said, I think they're afraid to

01:48:22.862 --> 01:48:26.370
sit on it because there's a continued violation of the

01:48:26.670 --> 01:48:30.670
Texas Open Meetings act. They're ignoring your

01:48:30.710 --> 01:48:33.060
PC, PCU filings.

01:48:34.080 --> 01:48:37.432
They haven't made any of the PCU filings, the deadlines on those,

01:48:37.536 --> 01:48:41.072
just a couple of those has been mentioned is

01:48:41.096 --> 01:48:43.696
the compliance filing, the CCN filing.

01:48:43.888 --> 01:48:47.912
And so a lot of folks don't want to get saddled with possibly

01:48:48.096 --> 01:48:51.736
doing something illegal. And there

01:48:51.768 --> 01:48:55.500
has also been talk about coming before you all to ask for an emergency

01:48:56.080 --> 01:48:59.328
rate of bill to raise the rates and set assessment.

01:48:59.384 --> 01:49:02.960
So we're back to paying the rates that we were. So I just echo

01:49:03.000 --> 01:49:07.312
Danny and Bruce's thoughts and asked you

01:49:07.456 --> 01:49:10.632
step in and help with possibly an emergency manager.

01:49:10.696 --> 01:49:13.984
Thank you, sir. Did you say you're on a fixed income as a retired police

01:49:14.032 --> 01:49:18.048
officer? Yes. Yes, sir. Thank you for your public service to your local community and

01:49:18.064 --> 01:49:19.660
thank you for being here today. Thank you,

01:49:22.690 --> 01:49:26.290
Shelah. I think maybe a 20 minutes recess so

01:49:26.330 --> 01:49:29.810
we can switch out Court Reporters? I am just looking

01:49:29.850 --> 01:49:33.870
around the room. I'm not sure the court reporter has arrived yet. She has not.

01:49:34.610 --> 01:49:37.866
You're welcome to take a recess for a break. Or we could do the consent

01:49:37.898 --> 01:49:41.250
agenda. Why don't we roll through the consent

01:49:41.290 --> 01:49:44.178
agenda then? (item:0.1:Shelah Cisneros lays out Consent Agenda) Okay. All right.

01:49:44.234 --> 01:49:49.208
Commissioners recusal memos were filed in Project No. 527611.

01:49:49.344 --> 01:49:52.760
Chairman Gleeson is recused from Items 817,

01:49:52.880 --> 01:49:56.368
20, 22, and 28. Commissioner Hjaltman is

01:49:56.384 --> 01:50:00.440
recused from Items 5, 20, 21, and 22.

01:50:00.600 --> 01:50:04.600
By individual ballot, the following items were placed on your consent agenda:

01:50:04.720 --> 01:50:08.952
Items 2, 4, 7-16.

01:50:09.136 --> 01:50:12.872
Let me back up. Hold on. I think there's a discrepancy here.

01:50:13.056 --> 01:50:16.330
2, 4, 5, 7-16,

01:50:16.710 --> 01:50:20.294
18, 21, 24-27.

01:50:20.462 --> 01:50:24.358
And also by individual ballot, the Commissioners voted to place Items

01:50:24.374 --> 01:50:27.902
on the consent agenda where no one signed up to speak in those Items,

01:50:28.046 --> 01:50:32.370
and those Projects are 30, 31, and 56.

01:50:33.350 --> 01:50:37.350
(item:0.1:Chairman Gleeson asks for motion to approve items on Consent Agenda) I would entertain a motion to approve the consent items as laid out by Shelah.

01:50:37.430 --> 01:50:41.810
So moved. I second. Motion and second. All those in favor say aye. Aye.

01:50:42.160 --> 01:50:44.700
Opposed? Motion prevails.

01:50:46.240 --> 01:50:49.008
And sir, if you'd like to take the 20 minutes break? I think during that

01:50:49.024 --> 01:50:51.840
time period, the court reporter is expected to arrive. And we can do the switch

01:50:51.880 --> 01:50:55.168
out and be ready when we resume. Perfect. (item:0.1:Chairman Gleeson recesses open meeting) We'll stand in recess until

01:50:55.224 --> 01:50:56.380
11:45.

01:51:00.640 --> 01:51:04.860
(item:0.1:Chairman Gleeson resumes open meeting) We will call the meeting back to order at 11:47.

01:51:05.680 --> 01:51:08.930
So I was informed I made a mistake.

01:51:09.010 --> 01:51:12.110
I prematurely closed down our Beryl discussion.

01:51:12.610 --> 01:51:16.194
(item:52:Chairman Gleeson recalls Project No. 56822) So we're going to call back up Items 52 and

01:51:16.242 --> 01:51:19.578
58. So that's Project No. 56822,

01:51:19.634 --> 01:51:23.258
investigation of emergency preparedness. (item:58:Chairman Gleeson lays out discussion & possible action regarding customer service issues) And 58, discussion and

01:51:23.274 --> 01:51:26.546
possible action regarding customer service issues, including, but not limited to,

01:51:26.578 --> 01:51:29.830
correspondence and complaint issues. Connie, go ahead.

01:51:30.690 --> 01:51:35.004
(item:58:Connie Corona speaks on customer complaints concerning CenterPoint, 56822) Thank you. So since Hurricane

01:51:35.052 --> 01:51:38.868
Beryl, our call volume and the

01:51:39.004 --> 01:51:44.164
informal complaints that our consumer protection division has taken roughly

01:51:44.212 --> 01:51:51.252
doubled. We had 1320

01:51:51.356 --> 01:51:54.772
complaints against CenterPoint as of

01:51:54.876 --> 01:51:58.912
the close of business yesterday. 65 of

01:51:58.936 --> 01:52:02.820
those are what I'd like to talk about today.

01:52:04.760 --> 01:52:08.368
They were related to meter reads that were estimated

01:52:08.504 --> 01:52:11.180
while customers were actually not receiving service.

01:52:12.040 --> 01:52:16.264
In general, the pattern is that the customer cease

01:52:16.312 --> 01:52:20.096
usage was recorded on days when they still had

01:52:20.128 --> 01:52:24.340
not yet been restored. I'd like to ask CenterPoint to walk through

01:52:25.960 --> 01:52:29.336
how this problem was identified and resolved, and then

01:52:29.368 --> 01:52:33.144
I'd like to hear from one of the reps

01:52:33.192 --> 01:52:37.008
who experienced this issue with their customers. I'd like

01:52:37.024 --> 01:52:40.464
to invite Christina Rollins with NRG to address this from the rep

01:52:40.512 --> 01:52:44.340
perspective and for Centerpoint to sit the appropriate personnel.

01:52:50.730 --> 01:52:54.706
Good morning Chairman Gleeson and Commissioners. Jason Ryan, Executive Vice President with CenterPoint

01:52:54.738 --> 01:52:57.930
Energy. I have with me today Tony Gardner, our Chief Customer

01:52:57.970 --> 01:53:01.554
Officer. I'll turn it over to Tony. (item:52:Tony Gardner, CenterPoint's SVP Chief Customer Officer on the estimated meter process, 56822) Good morning, Commissioners. I think it's

01:53:01.602 --> 01:53:05.250
still morning. And mister chairman, my name is Tony Gardner. I'm senior vice

01:53:05.290 --> 01:53:08.522
president and chief customer officer at Centerpoint. Energy. I guess

01:53:08.546 --> 01:53:12.202
I'd like to start by providing some context to you all about how our estimated

01:53:12.226 --> 01:53:15.408
meter process works and its totality.

01:53:15.514 --> 01:53:19.116
So, if a customer has power on at their

01:53:19.148 --> 01:53:22.996
home, and we're unable to communicate with their meter, what we do is

01:53:23.028 --> 01:53:27.036
we look at our meter data at a 15 minutes interval

01:53:27.068 --> 01:53:30.240
level. So, think 96 intervals in a 24 hours time frame.

01:53:30.700 --> 01:53:34.356
If a customer's power is on, our system says the power is on, and we're

01:53:34.388 --> 01:53:37.676
not able to communicate with our meter. We will estimate

01:53:37.788 --> 01:53:42.372
a customer's usage at the 15 minutes interval level every

01:53:42.396 --> 01:53:45.956
day that the power, it shows that it's on, and we don't get

01:53:45.988 --> 01:53:48.620
a meter read, meaning we can't communicate with the meter.

01:53:48.780 --> 01:53:52.412
The second part of that scenario is, if our system shows that a

01:53:52.436 --> 01:53:56.076
customer does not have power at their premise, and we cannot communicate

01:53:56.108 --> 01:53:59.436
with their meter, we do not estimate usage for

01:53:59.468 --> 01:54:02.876
that timeframe that the customer shows that they did not have power.

01:54:03.068 --> 01:54:06.636
So any customer that our system shows that they did not have

01:54:06.668 --> 01:54:10.556
power, we put in zeros in those intervals

01:54:10.708 --> 01:54:14.236
and transmit that information over to ERCOT, which sends it to our retail electric

01:54:14.268 --> 01:54:17.812
providers. To provide you some additional context, for the

01:54:17.836 --> 01:54:21.532
month of July's billing period, we issued more than

01:54:21.556 --> 01:54:25.380
2.9 million transmittals, or inverse invoice

01:54:25.420 --> 01:54:29.400
data, over to our ERCOT and our retail electric providers.

01:54:29.820 --> 01:54:33.360
Of that 2.9 million meter usage

01:54:34.020 --> 01:54:37.652
interval data that we sent over to our retail lecture providers,

01:54:37.796 --> 01:54:41.172
96,000 of those showed some form of estimation,

01:54:41.236 --> 01:54:44.900
whether it was an estimated meter read because we couldn't communicate with the meter,

01:54:45.020 --> 01:54:48.820
or we zeroed out information in the interval

01:54:48.860 --> 01:54:51.956
level so that customers would not receive inaccurate bills.

01:54:52.108 --> 01:54:55.308
Of that 96,000, we looked at 74,000

01:54:55.364 --> 01:54:58.692
of those meter reads where our usage for that

01:54:58.716 --> 01:55:01.474
30 day timeframe was 30%,

01:55:01.602 --> 01:55:04.922
on average, lower than it was at this time

01:55:05.066 --> 01:55:10.310
last year. So far, we've received 1300

01:55:12.290 --> 01:55:15.762
meters dispute requests that have come from our retail providers.

01:55:15.826 --> 01:55:19.266
We've done our due diligence and make sure that we have reviewed each and every

01:55:19.298 --> 01:55:22.642
one of those requests. Turns out there have

01:55:22.666 --> 01:55:26.370
been 16 of those requests that needed

01:55:26.410 --> 01:55:29.906
to have the charges reversed and rebuild for

01:55:29.938 --> 01:55:33.506
customers. So we reversed out the charges, we sent back

01:55:33.538 --> 01:55:36.810
new meter reads through ERCOT to the rep, so that they could

01:55:36.850 --> 01:55:40.954
re invoice customers at that point. But that is the extent

01:55:41.002 --> 01:55:44.906
of how our estimation process works and kind of what we've experienced

01:55:44.938 --> 01:55:48.710
during Beryl so far, and I'm open to any questions that you guys may have.

01:55:51.010 --> 01:55:51.990
Commissioners?

01:55:56.900 --> 01:56:01.532
(item:52:Connie Corona's question for CenterPoint concerning the modification of their standard operating procedure, 56822) So what you've described sounds

01:56:01.676 --> 01:56:05.020
like the process that staff understood

01:56:05.100 --> 01:56:08.080
to be the standard operating procedure.

01:56:09.180 --> 01:56:13.340
But we're curious at what caused some of these anomalies and

01:56:13.380 --> 01:56:17.148
whether you're able to modify your processes to prevent

01:56:17.204 --> 01:56:20.636
this from occurring in the future. For example,

01:56:20.788 --> 01:56:24.680
in some cases upon our investigators found

01:56:24.980 --> 01:56:28.916
that usage was not only attributed

01:56:28.988 --> 01:56:32.316
to customers while they were out of service,

01:56:32.468 --> 01:56:36.440
but that estimate was actually higher than their reads for the previous month.

01:56:37.220 --> 01:56:41.036
Yeah, absolutely. So we'll continue to fine tune the equation

01:56:41.148 --> 01:56:44.916
that we built in, which is a model. So our system takes a look at

01:56:44.988 --> 01:56:49.130
a customer's usage from the past three months, and typically it would

01:56:49.210 --> 01:56:52.058
create an exception that would come out to my team. We would take a look

01:56:52.074 --> 01:56:55.546
at the exception before we released that billing usage to make

01:56:55.578 --> 01:56:59.010
sure that it did not exceed what we expected

01:56:59.090 --> 01:57:02.626
that customer to see or wouldn't cause an issue in the next month

01:57:02.658 --> 01:57:06.394
when they had a true up for their estimated usage. We'll continue to

01:57:06.402 --> 01:57:10.026
fine tune the model, but like I stated, so far we've seen 16 of

01:57:10.058 --> 01:57:13.018
those. But we always look for a way to make sure that we can always

01:57:13.074 --> 01:57:16.144
refine and fine tune that model. Some of the degree days

01:57:16.192 --> 01:57:19.448
when you have storms that push in that create some of these anomalies,

01:57:19.584 --> 01:57:23.032
that the model just needs more time to digest and continue to

01:57:23.056 --> 01:57:26.100
evolve and grow and make sure that it catches more of these.

01:57:27.120 --> 01:57:30.100
Thank you for that explanation. No problem.

01:57:32.320 --> 01:57:36.352
Christina, I have a couple questions for reps.

01:57:36.456 --> 01:57:40.056
Can you just describe for us how NRG,

01:57:40.128 --> 01:57:43.664
as a rep can communicated with its customers who receive

01:57:43.712 --> 01:57:45.540
the types of bills we're talking about?

01:57:46.600 --> 01:57:50.408
Sure. And I think it might be helpful to start with kind

01:57:50.424 --> 01:57:54.032
of where customers were first seeing this issue that y'all were talking about.

01:57:54.096 --> 01:57:57.616
So, Christina, will you say your name and who you are? Oh, sorry. (item:52:Christina Rollins, NRG's Assistant General Counsel of Reg. Affairs on communication with customer, 56822) Christina Rollins,

01:57:57.648 --> 01:58:00.768
assistant general counsel of regulatory affairs for NRG.

01:58:00.944 --> 01:58:05.312
And so the TDUs send usage to reps,

01:58:05.336 --> 01:58:09.152
which are also known as lses, in more than one way. So there's a daily

01:58:09.216 --> 01:58:12.780
interval usage file that the TDU send us. They also upload

01:58:12.820 --> 01:58:16.180
that to the smart meter Texas portal. And that's really where customers can

01:58:16.220 --> 01:58:19.880
see their daily usage consumption, what they're using during different intervals.

01:58:20.300 --> 01:58:23.836
Reps also use that information for, you know, customer tools like

01:58:23.868 --> 01:58:27.520
weekly summary usage emails, which customers, you know, find helpful.

01:58:27.940 --> 01:58:31.780
And so customers can see their usage history. That's pretty much where customers

01:58:31.820 --> 01:58:35.516
were first starting to see an issue. Right? So Hurricane Beryl makes landfall on July

01:58:35.588 --> 01:58:39.102
8. Customers start seeing usage on the portal, or they

01:58:39.126 --> 01:58:42.382
start seeing usage in these weekly summary emails when their

01:58:42.406 --> 01:58:46.222
power was out. And so once we realized that was occurring,

01:58:46.286 --> 01:58:49.382
we contacted the tdus, and I think Centerpoint,

01:58:49.406 --> 01:58:52.878
it was really mostly an issue that Centerpoint, I think, also already knew about.

01:58:53.054 --> 01:58:56.470
But it took about a week for that gap to close

01:58:56.630 --> 01:59:00.182
where customers were then seeing zeros on the SMT portal

01:59:00.326 --> 01:59:04.896
when they actually were out of power. So that took roughly

01:59:04.928 --> 01:59:08.552
by July 29, I think that was fully resolved by the time

01:59:08.576 --> 01:59:12.112
you go to bill a customer. There's also an 867

01:59:12.216 --> 01:59:15.672
transaction, and that's like the periodic monthly meter read that you get

01:59:15.696 --> 01:59:18.880
from the TDU. And if there are estimates in

01:59:18.920 --> 01:59:22.944
that, then the bill that the rep issues to a customer based upon

01:59:22.992 --> 01:59:26.144
that 867 will indicate that it's based on estimated

01:59:26.192 --> 01:59:28.980
usage from the TDU. So kind of with that background,

01:59:29.280 --> 01:59:32.472
by the time you got to the 867, I think most of

01:59:32.496 --> 01:59:35.960
these issues largely had been resolved. But we did know that customers

01:59:36.040 --> 01:59:38.984
had questions from that daily usage file.

01:59:39.112 --> 01:59:42.624
So we prepared our call center agents to be able to explain what was going

01:59:42.672 --> 01:59:46.256
on. We let them know that the TDU is aware of the issue and

01:59:46.288 --> 01:59:50.064
that they would be correcting it and that they would not be charged for usage

01:59:50.112 --> 01:59:53.496
for the time periods in which their power was actually

01:59:53.568 --> 01:59:57.386
off. And in addition, we made an update to their online

01:59:57.458 --> 02:00:00.642
account maintenance portal, which is where some customers prefer to

02:00:00.666 --> 02:00:04.410
interact with us instead of calling the call center so they could receive

02:00:04.450 --> 02:00:07.674
information electronically. Additionally, we have

02:00:07.722 --> 02:00:11.242
weekly summary emails, which we included that information on as well to let them know

02:00:11.266 --> 02:00:15.186
that there was an issue. We're aware of it. As far as the call center's

02:00:15.218 --> 02:00:19.226
ability to field calls, we're happy to say

02:00:19.258 --> 02:00:22.538
that during the period of the crisis, our average wait time to get to

02:00:22.554 --> 02:00:25.678
a live agent, less than a minute. In that we

02:00:25.694 --> 02:00:28.822
fielded a large number of calls during the

02:00:28.846 --> 02:00:32.086
hurricane barrel recovery effort. I think the highest call

02:00:32.118 --> 02:00:35.410
volume we had in a single day was something like 44,000 calls.

02:00:37.910 --> 02:00:41.214
Thank you both for that update. Commissioners, do you

02:00:41.222 --> 02:00:45.530
have any questions? I think one question.

02:00:45.910 --> 02:00:49.776
Have we seen this before with estimated meter reads in

02:00:49.808 --> 02:00:53.272
previous hurricanes or like during Uri? I can't remember. Yes,

02:00:53.376 --> 02:00:56.792
we have. And our investigators

02:00:56.936 --> 02:01:00.500
were on the lookout for it as customer complaints came in.

02:01:03.800 --> 02:01:07.096
(item:58:Commissioner Hjaltman's question to CenterPoint & NRG on communication with customers) Is there anything you can do as

02:01:07.128 --> 02:01:11.192
CenterPoint and or as the rep to allow the

02:01:11.216 --> 02:01:14.448
customer to know this might be occurring so they don't immediately have that concern

02:01:14.544 --> 02:01:17.802
of, I can't believe they're going to be charging me. I had no power.

02:01:17.906 --> 02:01:20.842
Yeah, absolutely. We can do a better job of making sure that we educate our

02:01:20.866 --> 02:01:24.338
customers on kind of what they see to the point they

02:01:24.354 --> 02:01:27.722
were making earlier. We upload those files daily to Smart Meter

02:01:27.746 --> 02:01:31.386
Texas. So customers have gotten prone to go out and look at Smart Meter Texas,

02:01:31.418 --> 02:01:34.946
but sometimes it can take up to two to five days to true

02:01:34.978 --> 02:01:38.482
up some of that meter usage in smart meter Texas as customers are

02:01:38.506 --> 02:01:41.722
going out and looking for that information. So absolutely we can do a better job

02:01:41.746 --> 02:01:46.218
of educating customers to be on the lookout for some of this on

02:01:46.234 --> 02:01:49.802
top of the preventive measures that we take as a TDU and a retail

02:01:49.826 --> 02:01:52.874
electric provider to make sure that they know that we're going to

02:01:52.882 --> 02:01:56.470
make sure we do the best job of getting them accurate invoices.

02:01:57.890 --> 02:02:00.870
Commissioner Hjaltman, we have a few ideas on that one as well.

02:02:01.250 --> 02:02:04.470
I think we could shorten the time it takes to move from

02:02:05.450 --> 02:02:08.784
the communication between the TDU use estimated reporting

02:02:08.832 --> 02:02:13.616
sequence to their outage recovery sequence. Right, because rightly

02:02:13.648 --> 02:02:16.992
so. I believe the TDUs all have a different method of doing this, that when

02:02:17.016 --> 02:02:20.560
you're missing an interval, they'll estimate it for smart meter Texas

02:02:20.600 --> 02:02:23.616
because it's really by and large you don't have a large scale outage happening.

02:02:23.648 --> 02:02:26.808
So that makes sense that you would do an estimate that when there is a

02:02:26.824 --> 02:02:30.040
large scale outage happening, closing that gap from

02:02:30.080 --> 02:02:33.376
which you continue to estimate to reporting zeros would be really

02:02:33.408 --> 02:02:37.028
helpful because here that gap stayed open for several days, which caused some

02:02:37.044 --> 02:02:40.700
of the communication issues, having more frequent market calls

02:02:40.740 --> 02:02:44.364
about what's going on. So we can also help communicate with customers.

02:02:44.412 --> 02:02:47.788
You know, we're in this market together and we're in these communities together.

02:02:47.884 --> 02:02:51.772
And so armed with information, reps can also help communicate. We have

02:02:51.796 --> 02:02:55.380
extensive call centers, we have lots of resources. We communicate with customers

02:02:55.420 --> 02:02:58.596
every day. So we're definitely here to help. So yes,

02:02:58.628 --> 02:03:02.022
with information and we're going to be able to communicate with

02:03:02.046 --> 02:03:05.358
customers together. Yeah. Good comment,

02:03:05.414 --> 02:03:08.982
we appreciate that. During Beryl we hosted, we do

02:03:09.006 --> 02:03:12.422
try to host a call every day with all of our reps just to let

02:03:12.446 --> 02:03:15.702
them know where we were in the restoration effort, what was happening, those types

02:03:15.726 --> 02:03:18.518
of things. But I'm gladly to work with them to see what else we can

02:03:18.534 --> 02:03:20.890
add to that agenda to make sure that we get out the right information.

02:03:22.510 --> 02:03:26.150
Thank you Commissioners for allowing staff to, to bring this

02:03:26.190 --> 02:03:29.638
discussion where folks can

02:03:29.694 --> 02:03:33.014
hear about this issue and understand it a

02:03:33.022 --> 02:03:36.718
little bit better. (item:58:Connie Corona recaps discussion) And I would just recap it by

02:03:36.774 --> 02:03:40.810
saying for the vast majority of customers,

02:03:44.270 --> 02:03:47.950
when you go online to check how much you've used so far this

02:03:47.990 --> 02:03:50.730
week or this day,

02:03:51.800 --> 02:03:55.704
you know, that's where the vast majority of customers saw the problem.

02:03:55.832 --> 02:03:59.472
But by the time the monthly bill was calculated and

02:03:59.496 --> 02:04:03.380
sent out, by the retail electric provider. It was fully resolved.

02:04:04.080 --> 02:04:07.504
So if you still have any concerns about your bill, please call

02:04:07.552 --> 02:04:11.176
the retail electric provider that sent you that bill or you can always get

02:04:11.208 --> 02:04:13.460
assistance from our Consumer Protection Division.

02:04:16.080 --> 02:04:31.544
Perfect. Thank you. Thanks. Thank you all. (item:52:Barksdale English, PUC's Deputy Executive Director concerning reports due to the Legislature & RFIs, 56822) Commissioners,

02:04:31.592 --> 02:04:35.552
last week Commission Staff issued a series of

02:04:35.576 --> 02:04:39.920
voluntary requests for information from folks

02:04:40.000 --> 02:04:44.446
who were participating in the recovery

02:04:44.478 --> 02:04:47.974
from Hurricane Beryl so that we could inform the reports of

02:04:47.982 --> 02:04:51.974
the Legislature. That's due at the beginning of December and

02:04:52.142 --> 02:04:55.502
those responses are due at the end of the month. Earlier this week,

02:04:55.566 --> 02:04:59.422
we issued mandatory requests for information to

02:04:59.566 --> 02:05:03.390
about 90 different utilities that were in the impacted

02:05:03.430 --> 02:05:06.942
area, which was kind of defined as any county in

02:05:06.966 --> 02:05:10.690
which disaster declaration declaration was issued by the acting governor.

02:05:13.470 --> 02:05:17.198
The 90 utilities received those requests for

02:05:17.254 --> 02:05:20.990
information directly from us and we also posted

02:05:21.030 --> 02:05:24.422
those RFIs online in our

02:05:24.486 --> 02:05:28.606
interchange. Unfortunately, we had about 10%

02:05:28.678 --> 02:05:32.590
of the utilities. Their contact information was

02:05:32.630 --> 02:05:36.472
not good. And so this might be a

02:05:36.496 --> 02:05:41.168
nice little public service announcement to

02:05:41.224 --> 02:05:44.624
just have all of those utilities make sure that your contact information

02:05:44.712 --> 02:05:49.096
is up to date so that we can be in touch and get the information

02:05:49.208 --> 02:05:52.700
that our citizens and residents really need.

02:05:53.320 --> 02:05:57.176
Of the 90 utilities, we sent RFIs to

02:05:57.208 --> 02:06:00.074
about 30 co ops, about 30 cities,

02:06:00.272 --> 02:06:03.894
17 water utilities and nine telecommunications

02:06:03.982 --> 02:06:08.782
utilities. As those

02:06:08.886 --> 02:06:11.998
utilities review the questions. You know,

02:06:12.054 --> 02:06:15.374
staff just wants to reiterate that if there are questions

02:06:15.462 --> 02:06:18.518
in those RFIs that don't appear to apply

02:06:18.574 --> 02:06:21.878
to your operations, to your business model, then simply you

02:06:21.894 --> 02:06:25.730
can respond with this does not apply. And that's a

02:06:26.470 --> 02:06:30.366
also, there have been some questions about if a

02:06:30.398 --> 02:06:34.010
utility did not receive a direct communication from our staff,

02:06:34.350 --> 02:06:37.886
whether or not they need to proactively respond to those rfis.

02:06:37.958 --> 02:06:41.734
And I just want to confirm for anybody out there who was maybe

02:06:41.862 --> 02:06:45.198
hoping to get rfis, who didn't get them, you are

02:06:45.254 --> 02:06:48.590
not responsible to answer questions if you did not receive a direct

02:06:48.630 --> 02:06:51.090
communication from Commission Staff.

02:06:52.800 --> 02:06:56.392
I guess the last two things that I wanted to update you all on are

02:06:56.536 --> 02:07:00.176
the responses to those mandatory rfis are due on August 30.

02:07:00.368 --> 02:07:03.584
And like everything that we've committed in this investigation,

02:07:03.712 --> 02:07:07.440
all those responses will be filed publicly under Project No.

02:07:07.480 --> 02:07:11.080
56822. And my

02:07:11.120 --> 02:07:14.848
last note here is to thank the investigation

02:07:14.904 --> 02:07:18.186
team that's been working really, really hard overdose the last

02:07:18.218 --> 02:07:21.410
two weeks to get this investigation stood up and moving

02:07:21.490 --> 02:07:25.466
very quickly with a tremendous amount of information that's being

02:07:25.618 --> 02:07:29.442
researched and sought for. We've got nearly

02:07:29.466 --> 02:07:33.354
a score of individuals in the Commission, from Cisrom

02:07:33.402 --> 02:07:37.418
to Consumer Protection, our enforcement group, infrastructure group,

02:07:37.474 --> 02:07:40.750
public engagement, and the rules and projects team.

02:07:41.330 --> 02:07:45.100
It's a great effort that they've undertaken.

02:07:45.220 --> 02:07:46.080
Undertaken.

02:07:47.860 --> 02:07:51.452
And I know hopefully

02:07:51.476 --> 02:07:55.120
I can speak for Connie, but I'm certainly thankful for their work and

02:07:55.540 --> 02:07:58.732
we've got a lot more work to do and we'll

02:07:58.756 --> 02:08:01.972
be leaning on them heavily to do that, as well as all

02:08:01.996 --> 02:08:05.148
their kind of normal day to day stuff. So thanks for that. And I'm happy

02:08:05.164 --> 02:08:08.836
to answer any questions about the status of the investigation. Absolutely. A tremendous

02:08:08.868 --> 02:08:12.316
amount of work done already, but as you said, a lot more to do.

02:08:12.468 --> 02:08:15.980
And so if any companies that received rfis have questions or

02:08:16.020 --> 02:08:20.020
concerns, feel like there are portions that they might have problems

02:08:20.060 --> 02:08:23.460
filling out, this is a staff led effort. So their

02:08:23.540 --> 02:08:27.092
best course of action would be to contact staff. That's correct. Perfect.

02:08:27.276 --> 02:08:30.400
Commissioners, any questions for Barksdale? Just one.

02:08:30.900 --> 02:08:34.812
So if I happen to be one of these utilities in the area

02:08:34.876 --> 02:08:38.112
that was canvassed, which was at least for some of

02:08:38.136 --> 02:08:43.648
the RFIs, I think were in the extended declaration

02:08:43.744 --> 02:08:47.064
area. Yes. Okay. So,

02:08:47.152 --> 02:08:51.048
and if my, my utility was not impacted,

02:08:51.184 --> 02:08:54.480
do I need to respond? My utility was not impacted. What's your

02:08:54.520 --> 02:08:57.872
expectation there for that utility? Right. So if,

02:08:57.936 --> 02:09:01.490
if your utility received a direct

02:09:01.530 --> 02:09:05.186
communication from Commission Staff asking for responses to the request

02:09:05.218 --> 02:09:08.738
for information, we expect you to answer the questions.

02:09:08.794 --> 02:09:11.986
And if the questions imply that there was some sort of

02:09:12.018 --> 02:09:15.442
impact to your area, simply just, you can respond that there

02:09:15.466 --> 02:09:18.762
was no impact to my area or, no, I did not

02:09:18.786 --> 02:09:22.066
use mobile generation or, you know,

02:09:22.138 --> 02:09:25.666
you know, the questions that you're asking are not applicable and that's

02:09:25.698 --> 02:09:28.678
okay. But we do need a response. Okay. Thank you.

02:09:28.774 --> 02:09:31.990
Thanks. Okay. Thank you.

02:09:32.030 --> 02:09:35.010
Thanks, y'all. Okay,

02:09:35.710 --> 02:09:40.190
(item:43:Chairman Gleeson lays out Project No. 56897) So now let's go ahead and call up Items 43

02:09:40.230 --> 02:09:43.910
and 44 together. That's Project No. 56897,

02:09:44.070 --> 02:09:47.606
electric utility outage trackers and hazardous condition reporting.

02:09:47.718 --> 02:09:51.750
(item:44:Chairman Gleeson lays out Project No. 56898) And Project No. 56898, provision of emergency contact

02:09:51.830 --> 02:09:55.110
information to transfer transmission, distribution utilities by retail

02:09:55.150 --> 02:09:58.158
electric providers. So I think these are two,

02:09:58.254 --> 02:10:01.214
the reason I wanted to bring these up. I think these are two good examples

02:10:01.262 --> 02:10:04.966
of what we committed to that issues that we could deal with quickly,

02:10:05.118 --> 02:10:08.430
we would look to deal with quickly. And so I want to thank staff

02:10:08.510 --> 02:10:12.430
for getting to these two, which came up in both legislative

02:10:12.470 --> 02:10:15.758
hearings that I testified in. So, David, with that, if you want

02:10:15.774 --> 02:10:18.912
to lay out the PFPs. Yeah. (item:43:Commission Staff's David Smeltzer on communication & outage trackers, 56897) Thank you,

02:10:18.936 --> 02:10:22.368
Commissioners and Thomas. I think that our first

02:10:22.424 --> 02:10:26.592
slate of rulemakings that will come out of the Beryl investigation

02:10:26.736 --> 02:10:30.488
focuses on attempting to increasing and addressing some communications

02:10:30.544 --> 02:10:33.976
and coordination issues that came out of barrel and other

02:10:34.008 --> 02:10:38.060
incidents. The first of these is to require

02:10:38.480 --> 02:10:42.080
tdus to have an online electricity

02:10:42.120 --> 02:10:46.160
power outage tracker. This is an essential tool that allows customers

02:10:46.200 --> 02:10:49.432
to go online and find out updates about, you know,

02:10:49.456 --> 02:10:52.448
power outages in their area, how it could affect their community and neighbors,

02:10:52.584 --> 02:10:55.864
maybe check on relatives. And so we've laid out some basic

02:10:55.912 --> 02:10:59.608
requirements that we think that these trackers should have,

02:10:59.784 --> 02:11:03.620
and we're interested in comments on additional features and functionalities

02:11:04.000 --> 02:11:07.232
that they could and should have. This rulemaking also

02:11:07.416 --> 02:11:11.416
addresses another coordination issue that can occur where electric

02:11:11.448 --> 02:11:15.620
utilities have the ability to temporarily

02:11:16.000 --> 02:11:20.248
stop providing electric service if it's needed to address a dangerous or hazardous condition.

02:11:20.384 --> 02:11:23.968
And so, of course, with any situation like this, they need reliable

02:11:24.024 --> 02:11:27.488
information that's accurate. And one

02:11:27.544 --> 02:11:30.920
way to get that is from state agencies with areas of expertise in this,

02:11:30.960 --> 02:11:34.648
such as the Railroad Commission or the State Fire Marshall,

02:11:34.704 --> 02:11:38.118
the Public Utility Commission. So we're working on coordinating between

02:11:38.174 --> 02:11:41.822
those agencies on a staff level. And what this rulemaking asks

02:11:41.846 --> 02:11:45.142
utilities to do is to establish a process, to be

02:11:45.166 --> 02:11:49.230
able to work with staff, to establish a process to be able to receive

02:11:49.310 --> 02:11:53.302
information efficiently from these state agencies so

02:11:53.326 --> 02:11:57.014
that they can determine whether or not they need to shut off power so that

02:11:57.142 --> 02:11:59.490
a hazardous condition can be safely addressed.

02:12:00.030 --> 02:12:03.612
(item:44:Commission Staff's David Smeltzer on emergency contact to TDUs by REPs, 56898) The second rulemaking that we have to do has to do

02:12:03.636 --> 02:12:07.268
with individual communications that customers receive during these outages.

02:12:07.324 --> 02:12:10.780
And I know that one of the frustrations that folks had during

02:12:10.860 --> 02:12:14.828
Hurricane Beryl was lack of reliable information

02:12:14.964 --> 02:12:18.960
about what was happening to them in particular. And so essentially,

02:12:19.300 --> 02:12:22.852
we are going to sort of flip the script on this. And right

02:12:22.876 --> 02:12:27.180
now, customers have the ability to opt in to receiving communications

02:12:27.300 --> 02:12:30.826
from their TDU. And essentially, we're going to change the default to opt

02:12:30.858 --> 02:12:34.634
out. And the way that we do this in the rule is we're requiring

02:12:34.762 --> 02:12:38.530
retail electric providers, who are the primary folks

02:12:38.570 --> 02:12:42.258
who interact with customers today. You know, they handle most of the customer relationships.

02:12:42.274 --> 02:12:46.274
So they have all the information to provide this information to

02:12:46.362 --> 02:12:49.626
the transmission and distribution utilities so that they can issue

02:12:49.698 --> 02:12:53.234
emergency contacts. And so we're very sensitive whenever

02:12:53.282 --> 02:12:56.402
a customer, private customer information is involved.

02:12:56.506 --> 02:12:59.898
And so we're very narrowly tailoring the uses that this can be

02:12:59.914 --> 02:13:04.030
put to. It can only be used for communication of power outage

02:13:04.370 --> 02:13:09.070
statuses and restoration timelines and updates across

02:13:09.490 --> 02:13:12.938
both of these rules, you know, whenever, just because we want to move quick to

02:13:12.954 --> 02:13:16.074
address these problems doesn't mean that we don't really want to get it right.

02:13:16.122 --> 02:13:19.866
And so, you know, we really welcome comments from all the entities that would be

02:13:19.898 --> 02:13:23.726
involved in the exchange of these information. And one favor that I have

02:13:23.758 --> 02:13:27.166
is if you're a utility or a rep, that's responding

02:13:27.198 --> 02:13:29.850
on either of these rules. If you file comments,

02:13:30.550 --> 02:13:34.334
include in those comments a short description of your current capabilities.

02:13:34.422 --> 02:13:37.838
So you know, this is how we currently share information. This is what our electric

02:13:37.894 --> 02:13:41.158
outage tracker is currently capable of, just so that

02:13:41.174 --> 02:13:42.570
we can make sure that we are,

02:13:44.230 --> 02:13:47.728
have all the correct facts and we can present you all those facts so that

02:13:47.744 --> 02:13:51.008
we can adopt the rule, the best possible rule,

02:13:51.144 --> 02:13:54.392
you know, in another month or two when we get to it. Very good,

02:13:54.456 --> 02:13:57.592
and thank you to you and again to the rule team for getting this done

02:13:57.656 --> 02:14:00.488
and this PFP put together so quickly. Commissioners,

02:14:00.544 --> 02:14:04.768
any comments? Questions? (item:43:Commissioner Cobos lays out her memo, 56897) I had a memo in each of those projects.

02:14:04.824 --> 02:14:08.512
And so with respect to Project No. 56897 related to

02:14:08.536 --> 02:14:11.744
the electric utility outage tracker, I proposed

02:14:11.792 --> 02:14:15.604
two changes for our consideration. The first one being that the outage

02:14:15.652 --> 02:14:19.280
tracker provide information both in English and Spanish where applicable.

02:14:20.140 --> 02:14:23.468
The second one being that the utility would

02:14:23.484 --> 02:14:27.572
be required to immediately notify the commission of the outage tracker unexpectedly goes

02:14:27.596 --> 02:14:31.036
offline. And those are the

02:14:31.068 --> 02:14:35.200
two changes that I think would help enhance the rule for better

02:14:35.500 --> 02:14:39.086
communication with the public and also

02:14:39.158 --> 02:14:42.918
so that we're aware when the audit tracker's down with

02:14:42.934 --> 02:14:46.374
the utilities. Commission Staff

02:14:46.422 --> 02:14:49.822
agrees with these recommendations. They're very thoughtful and fantastic and so

02:14:49.846 --> 02:14:52.450
we would, we would advise today that you,

02:14:53.750 --> 02:14:57.990
that you would approve us to publish the rules as filed,

02:14:58.030 --> 02:15:01.134
but with the added concepts,

02:15:01.222 --> 02:15:04.350
we'll go back and put them into the draft before we, before we publish.

02:15:04.510 --> 02:15:08.050
Perfect. Thank you David. One thing you mentioned

02:15:08.430 --> 02:15:11.646
about asking the commenters,

02:15:11.718 --> 02:15:15.290
the utilities, to provide information about their current outage tracker.

02:15:15.590 --> 02:15:19.462
It would be helpful to get a link so that you can click

02:15:19.486 --> 02:15:23.062
on it and go look at the outage tracker as they

02:15:23.086 --> 02:15:27.142
provide that information or comments. (item:44:Commissioner Cobos lays out her memo, 56898) So the

02:15:27.166 --> 02:15:31.168
next project, Project No. 56898, related to the provision of emergency

02:15:31.224 --> 02:15:34.760
contact information to the TDUs. I propose one change,

02:15:34.800 --> 02:15:38.224
and that is to recommend the proposal be

02:15:38.232 --> 02:15:42.200
amended to require the tdus to provide the affected customers

02:15:42.360 --> 02:15:46.216
with information about power outages, estimated restoration times and

02:15:46.248 --> 02:15:50.220
restoration updates in both English and Spanish. And I'll

02:15:50.760 --> 02:15:54.032
leave the flexibility there for you to coordinate with the

02:15:54.096 --> 02:15:57.690
reps and the tdus to figure out what the best practices

02:15:57.770 --> 02:16:01.602
are there. It's my understanding that sometimes the

02:16:01.626 --> 02:16:05.706
Reps customers state that they have a preferred language and

02:16:05.778 --> 02:16:09.450
maybe it's more feasible in that regard. But I think that

02:16:09.570 --> 02:16:12.386
to the extent we can get to a place where we can provide the information

02:16:12.458 --> 02:16:16.082
in both languages, that would be helpful. I think that's a great idea.

02:16:16.106 --> 02:16:19.962
So under our consumer protection rules, a rep has

02:16:19.986 --> 02:16:23.542
to provide communications to a customer in the language in which they were

02:16:23.566 --> 02:16:27.102
enrolled. So this makes sure that, you know, whatever you solicit their

02:16:27.126 --> 02:16:30.870
business in, they get all the communications from that. I think we're interested in

02:16:30.950 --> 02:16:35.209
comments from retailers and customers on whether or not that practice should be extended

02:16:35.870 --> 02:16:38.950
through to the way they receive information here, and then whether or

02:16:39.450 --> 02:16:42.870
not tdus are, you know, to what extent they're logistically capable of that. So comments

02:16:42.950 --> 02:16:46.214
on how to appropriately handle these issues, I think,

02:16:46.262 --> 02:16:50.540
would be well received. Anything else? (item:43:Motion to approve proposal for publication, 56897)

02:16:51.240 --> 02:16:55.520
Okay. (item:44:Motion to approve proposal for publication, 56898)Then I would entertain a motion to approve the proposals for publication

02:16:55.638 --> 02:16:59.464
in Project No. 56897 and 56898,

02:16:59.592 --> 02:17:02.752
consistent with Commissioner Cobos memos and our discussion.

02:17:02.936 --> 02:17:06.168
So moved. Second. I have a motion and a second. All those in

02:17:06.183 --> 02:17:09.808
favor say aye. Aye. Opposed? All right. Motion prevails.

02:17:09.984 --> 02:17:13.320
Thank you. Thank you, David. Okay, so now

02:17:13.360 --> 02:17:16.886
we're going to go back to the top of the agenda with the contested

02:17:16.918 --> 02:17:20.236
cases. So item two

02:17:20.294 --> 02:17:23.454
was consented. So Shelah, will you lay out Item No. 3

02:17:23.502 --> 02:17:26.790
please? Yes, sir. (item:3:Petition by Outside City Ratepayers appealing the water rates by the City of Leander, 53063) Item No. 3 is Docket

02:17:26.830 --> 02:17:30.468
No. 53063. Petition by outside

02:17:30.549 --> 02:17:33.941
city ratepayers appealing the water rates established by the

02:17:33.966 --> 02:17:37.570
city of Leander. Before you is a SOAH proposal for decision.

02:17:38.070 --> 02:17:41.645
The ratepayers and Commission Staff each filed exceptions. The ALJ's

02:17:41.677 --> 02:17:45.501
declined to make changes to the PFD. The Commission heard oral argument

02:17:45.525 --> 02:17:48.933
from the parties at the June 13 meeting. And Commissioner Gleeson

02:17:48.981 --> 02:17:52.261
filed a memo in this docket. (item:3:Chairman Gleeson lays out his memo, 53063) So in my memo, I think,

02:17:52.325 --> 02:17:55.929
in summary, you know, I agreed with the result of the

02:17:56.269 --> 02:17:59.450
proposal by the ALJ just for slightly different reasons that are outlined in

02:17:59.459 --> 02:18:02.901
the memo. Happy to take any comments or questions

02:18:03.084 --> 02:18:06.409
on the memo. I'm in agreement with your memo.

02:18:09.329 --> 02:18:12.825
Okay. (item:3:Motion to adopt PFD with modifications & deny appeal, 53063) Then I would entertain a motion to adopt the PFD

02:18:12.897 --> 02:18:15.913
with modifications, and deny the appeal as outlined in my memo

02:18:15.959 --> 02:18:19.489
inconsistent with our discussion. So moved. Second. I have a motion and a second.

02:18:19.529 --> 02:18:23.308
All those in favor say aye. Aye. Opposed? Motion prevails.

02:18:27.129 --> 02:18:30.566
Shelah, that'll take us to Item No. 6. We lay out Item No. 6,

02:18:30.609 --> 02:18:33.633
please. Yes. (item:6:Application of Onalaska Water Supply Corporation to amend CCN in Polk County, 54820) Item 6 is Docket No. 54820.

02:18:33.721 --> 02:18:37.580
The application of Onalaska Water Supply

02:18:37.620 --> 02:18:41.540
Corporation to amend its certificate of convenience and necessity in Polk

02:18:41.580 --> 02:18:45.370
County. Before you as a proposed order. No parties filed exceptions

02:18:45.436 --> 02:18:49.480
or corrections. And Commissioner Gleeson also filed a memo in this docket. (item:6:Chairman Gleeson lays out his memo, 54820)

02:18:49.980 --> 02:18:53.252
So I believe we should grant the good cause exception for the reasons outlined in

02:18:53.276 --> 02:18:57.308
my memo. Happy to take any questions or comments. I agree.

02:18:57.404 --> 02:19:00.781
I'm in agreement. Okay. (item:6:Motion to approve the good cause exception, 54820) I will entertain a motion to

02:19:00.805 --> 02:19:04.061
approve the good cause exception as discussed in my memo in direct OPDM to

02:19:04.084 --> 02:19:07.849
modify the order approving the application consistent with my memo.

02:19:08.189 --> 02:19:11.459
So moved. I second. Motion and a second. All those in favor

02:19:11.485 --> 02:19:14.769
say aye. Aye. Opposed? Motion prevails.

02:19:17.709 --> 02:19:21.141
Shelah, that will take us for my portion before I hand

02:19:21.165 --> 02:19:24.209
it over to Commissioner Cobos. That will take us to Item No. 19.

02:19:25.040 --> 02:19:28.760
Will you lay out Item No. 19, please? Yes. (item:19:Petition by residents of Grand Lakes M.U.D. No. 2 appealing water rates by the District’s Board of Directors, 56589) Item 19 is Docket

02:19:28.799 --> 02:19:32.136
number 56589. Petitioned by

02:19:32.168 --> 02:19:36.096
residents of Grand Lakes Municipal Utility District number two.

02:19:36.248 --> 02:19:40.088
Appealing the water rates established by the district's board of directors.

02:19:40.224 --> 02:19:42.495
Before you as a proposal for decision.

02:19:42.688 --> 02:19:46.536
Exceptions to the PFD were filed. The ALJ filed

02:19:46.566 --> 02:19:50.192
a response that did not recommend any changes to the PFD. And Commissioner

02:19:50.216 --> 02:19:53.434
Gleeson filed a memo in this docket. (item:19:Chairman Gleeson lays out his memo, 56589) So I agreed with the outcome in

02:19:53.442 --> 02:19:56.874
the, in the PFD. But really filed the memos to make changes

02:19:56.922 --> 02:20:01.002
to the order to provide guidance and more fully explain what

02:20:01.026 --> 02:20:04.378
I think the right decision is, which is to say we have a lack of

02:20:04.394 --> 02:20:08.550
jurisdiction, therefore should dismiss. Happy to answer any questions.

02:20:09.090 --> 02:20:12.110
I'm in agreement with your memo. I'm as well.

02:20:13.490 --> 02:20:17.590
Okay. (item:19:Motion to modify the PFD, 56589) I will entertain a motion to modify the PFD consistent with my memo.

02:20:18.050 --> 02:20:21.506
So moved. I second. Motion and a  second. All those in favor

02:20:21.538 --> 02:20:25.030
say aye. Opposed? Motion prevails.

02:20:26.690 --> 02:20:30.362
Shelah, I think that takes us then to Item No. 23. Will you lay

02:20:30.386 --> 02:20:34.114
out Item No. 23, please. Yes. (item:23:Joint Application of Southwestern Public Service Co. and City of Lubbock, acting by and through Lubbock P&L to Transfer CCN, 56142) Item 23

02:20:34.162 --> 02:20:37.426
is Docket No. 56142.

02:20:37.618 --> 02:20:41.298
The joint application of Southwestern Public Service Company and the

02:20:41.314 --> 02:20:45.316
city of Lubbock, acting by and through Lubbock power and light to transfer

02:20:45.388 --> 02:20:48.700
certificate of convenience and necessity right. Before

02:20:48.740 --> 02:20:52.040
he is a revised proposed order. And Commissioner Gleeson.

02:20:52.740 --> 02:20:56.788
Chairman Gleeson filed a memo in this docket. You could

02:20:56.804 --> 02:21:00.480
have gone with what David Smeltzer did and just call me Thomas. Yes.

02:21:04.980 --> 02:21:08.004
(item:23:Chairman Gleeson lays out his memo, 56142) So you know the way I feel on this.

02:21:08.132 --> 02:21:11.740
I want to grant this application. I thought. I thought the record was a little

02:21:11.780 --> 02:21:15.852
light and unclear. And since the applicant bears the

02:21:15.876 --> 02:21:19.580
burden of proof to explain compliance with the statute, I think we should remand this

02:21:19.620 --> 02:21:22.596
back to OPDM as outlined in my memo.

02:21:22.668 --> 02:21:24.440
So happy to answer any questions.

02:21:26.540 --> 02:21:29.820
Supportive. Supportive. Supportive. Okay. (item:23:Motion to remand proceeding to OPDM, 56142) I will entertain

02:21:29.860 --> 02:21:33.572
a motion to remand the proceeding to OPDM as outlined in my memo.

02:21:33.756 --> 02:21:37.238
So moved. I second. Have a motion and a second. All those in

02:21:37.254 --> 02:21:40.850
favor say aye. Aye. Opposed? Motion prevails.

02:21:41.310 --> 02:21:45.294
Okay. With that, I will hand it over to Commissioner Cobos.

02:21:45.462 --> 02:21:48.966
All right. Thank you, Chairman Gleeson. Shelah, can you please lay out Item

02:21:48.998 --> 02:21:51.370
No. 17? Yes, ma'am.

02:21:52.350 --> 02:21:56.246
(item:17:Rate-Case Expense severed from Docket No. 50788, 56273) Item 17 is Docket No. 56273.

02:21:56.398 --> 02:22:00.854
Rate case expenses severed from Docket No. 50788.

02:22:00.982 --> 02:22:04.936
Before you as a proposal order. No parties filed exceptions or

02:22:04.968 --> 02:22:08.380
corrections. Commissioner Cobos filed a memo in this docket.

02:22:09.320 --> 02:22:13.152
Thank you, Shelah. (item:17:Commissioner Cobos lays out her memo, 56273) So my memo basically sets forth the

02:22:13.176 --> 02:22:16.928
basis for modifying the proposed order to

02:22:16.984 --> 02:22:21.060
grant Windermere's request to recover zero and rate case expenses.

02:22:21.400 --> 02:22:25.056
Windermere is the applicant seeking to recover reasonable rate

02:22:25.088 --> 02:22:28.362
case expenses that incurred in the underlying appeal in Docket

02:22:28.386 --> 02:22:31.498
No. 50788 and

02:22:31.674 --> 02:22:35.562
granting Windermere's amended request to recover zero instead

02:22:35.586 --> 02:22:38.910
of denying their request. And so

02:22:40.130 --> 02:22:43.570
if you agree with me, that would mean that we would also

02:22:43.650 --> 02:22:46.830
amend ordering paragraph number one to reflect that decision.

02:22:47.490 --> 02:22:51.866
I think you've done this in a good way. Thank you. And move

02:22:51.898 --> 02:22:55.530
this even further towards certain. So I support the memo. I support

02:22:55.570 --> 02:22:58.510
the docket consistent with the memo.

02:22:59.730 --> 02:23:03.602
I do as well. Agreed. All right. (item:17:Motion to approve proposed order with changes, 56273) I move to approve

02:23:03.626 --> 02:23:07.150
the proposed order with the changes that are laid out in my memo.

02:23:08.010 --> 02:23:11.394
So moved. I second. All right. All in

02:23:11.402 --> 02:23:15.870
favor, say aye. Aye. All right, no opposed. Motion passes.

02:23:17.690 --> 02:23:21.062
Okay, that moves us to Item No. 19. Shelah, can you please lay that one

02:23:21.086 --> 02:23:24.702
out? I believe it

02:23:24.726 --> 02:23:28.342
was. Oh, No. 20. I think Chairman Gleeson already did that.

02:23:28.486 --> 02:23:31.742
We're off to Item No. 20. Can you please lay out that item? Yes,

02:23:31.766 --> 02:23:35.494
ma'am. (item:20:Application of the City of Lubbock acting by and through Lubbock P&L to change rates for wholesale transmission service, 54657) Item 20 is Docket No. 54657.

02:23:35.662 --> 02:23:39.630
The application of the city of Lubbock, acting by and through Lubbock power

02:23:39.670 --> 02:23:43.326
and light, to change rates for wholesale transmission service.

02:23:43.478 --> 02:23:46.656
Before you is a SOAH proposal for decision. The parties

02:23:46.688 --> 02:23:50.120
filed exceptions and the SOAH ALJ filed a response,

02:23:50.240 --> 02:23:53.784
declining to make changes to the PFD. Commissioner Cobos filed a memo in

02:23:53.792 --> 02:23:56.552
this docket. All right. Thank you, Shelah.

02:23:56.616 --> 02:24:00.440
(item:20:Commissioner Cobos lays out her memo, 54657) So, as explained in my memo, I would move

02:24:00.480 --> 02:24:03.752
to adopt, or my recommendation is to adopt the

02:24:03.776 --> 02:24:06.380
PFD in part and reject the PFD in part.

02:24:08.120 --> 02:24:11.488
The changes to the PFD that I would make are with respect

02:24:11.544 --> 02:24:15.020
to the debt service coverage ratio and the payments in lieu of taxes.

02:24:15.560 --> 02:24:19.088
With respect to the debt service coverage ratio, I would

02:24:19.104 --> 02:24:24.032
be in favor of approving a 1.5 ratio

02:24:24.136 --> 02:24:27.728
for the reasons set forth in my memo. I agree that the whole

02:24:27.824 --> 02:24:32.864
harmless payment should not be included in the company's calculation

02:24:33.032 --> 02:24:36.630
of the debt service coverage ratio, but for other reasons

02:24:36.800 --> 02:24:40.950
set forth in my memo, I believe that the commission should

02:24:41.810 --> 02:24:45.710
approve a 1.5 debt service coverage ratio so that the

02:24:46.130 --> 02:24:49.650
utility has the ability to make their payments for

02:24:49.690 --> 02:24:52.770
expenses and debt owed

02:24:52.810 --> 02:24:56.210
and not violate their bond covenants. And then the second area that

02:24:56.250 --> 02:25:00.122
I would modify the PFD on would be

02:25:00.146 --> 02:25:03.676
to reject the ALJ's recommendation that LP&L's

02:25:03.708 --> 02:25:07.760
payment in lieu of property taxes are appropriately included in tcost.

02:25:08.540 --> 02:25:11.892
I believe that these payments should

02:25:11.916 --> 02:25:14.840
be disallowed under PURA 35.009.

02:25:15.820 --> 02:25:19.200
Based on the reading of that statutory language,

02:25:20.020 --> 02:25:23.800
the utility should not be able to recover those payments

02:25:24.660 --> 02:25:27.880
as they are, you know, governed in by the city of Lubbock.

02:25:29.150 --> 02:25:33.086
So with that, I'll open it up for any questions, comments, additional feedback?

02:25:33.198 --> 02:25:36.790
Just one question, maybe clarification. There also

02:25:36.830 --> 02:25:40.830
was the issue of whether they could recover their franchise fee under

02:25:40.870 --> 02:25:44.246
pura 35.09. I'm assuming,

02:25:44.278 --> 02:25:47.662
since that's in the order, that an agreement that that's

02:25:47.686 --> 02:25:50.958
approved. Yeah. I would be in favor of adopting the ALJ's recommendation on

02:25:50.974 --> 02:25:53.490
that issue. I am as well.

02:25:55.160 --> 02:25:57.340
Okay. All right.

02:25:58.000 --> 02:26:01.540
If I don't have any more comment on that one. (item:20:Motion to adopt in part & reject in part the ALJ's PFD, 54657) I would move to

02:26:02.000 --> 02:26:06.472
adopt in part and reject in part the ALJ's PFD,

02:26:06.576 --> 02:26:10.580
consistent with the recommendations I made in my memo.

02:26:10.960 --> 02:26:14.256
Second. So moved. I second. All right. All in favor,

02:26:14.288 --> 02:26:19.600
say aye. Aye. None opposed. Motion passed.

02:26:21.850 --> 02:26:25.162
Takes us to Item No. 22. Shelah,

02:26:25.186 --> 02:26:27.030
can you please lay that item out?

02:26:32.010 --> 02:26:36.690
Yes, ma'am. (item:22:Commission Staff’s Petition for Declaratory Order regarding opt out of securitization uplift charges by Transmission-Voltage Customers, 56125) Item No. 22 is Docket No. 56125.

02:26:36.850 --> 02:26:40.570
Commission Staff's petition for declaratory order regarding opt out

02:26:40.610 --> 02:26:44.666
of securitization uplift charges by transmission voltage

02:26:44.698 --> 02:26:48.102
customer. Before you is a proposed declaratory order that

02:26:48.126 --> 02:26:51.622
addresses the request for relief in this proceeding. And Commissioner

02:26:51.646 --> 02:26:54.838
Cobos filed a memo. Thank you, Shelah.

02:26:54.894 --> 02:26:58.166
(item:22:Commissioner Cobos lays out her memo, 56125) So my memo would recommend that

02:26:58.198 --> 02:27:01.926
we approve the proposed declaratory order with

02:27:01.958 --> 02:27:05.574
the modifications set forth to remove a conclusion of

02:27:05.622 --> 02:27:09.142
whether TIEC's issue should be addressed

02:27:09.166 --> 02:27:12.568
in the declaratory order. And so

02:27:12.664 --> 02:27:16.432
that would essentially lead to making a determination that

02:27:16.496 --> 02:27:20.024
or a clarification that the opt out by transmission voltage

02:27:20.072 --> 02:27:23.824
customers is not transferable to another entity and not address

02:27:23.912 --> 02:27:25.820
TIEC's issue at this time.

02:27:26.920 --> 02:27:30.112
(item:22:Commissioner Glotfelty asks to delay decision until next open meeting, 56125) Madam Chairman, this issue's a little confusing to

02:27:30.136 --> 02:27:33.660
me about how and when these uplift charges

02:27:35.240 --> 02:27:39.726
should be and when they can be passed

02:27:39.758 --> 02:27:41.890
on. I'm wondering.

02:27:44.150 --> 02:27:47.742
I'm a little torn on this, and I'm wondering if we could delay a

02:27:47.766 --> 02:27:51.294
final decision on this until the next meeting, if that's

02:27:51.462 --> 02:27:53.850
acceptable, Shelah?

02:27:55.270 --> 02:27:58.862
Yes. The other Commissioners are amenable to that? No,

02:27:58.926 --> 02:28:01.850
if you need more time, I'm fine with that. I'd appreciate that.

02:28:04.000 --> 02:28:06.296
All right, we'll put a pause on that and defer it to the next open

02:28:06.328 --> 02:28:08.940
meeting. Okay,

02:28:09.520 --> 02:28:14.060
moving on I guess, to Item No. 28.

02:28:16.640 --> 02:28:19.432
Shelah, can you please lay out that memo? Yes,

02:28:19.456 --> 02:28:24.992
ma'am. (item:28:Application of Energywell Texas, LLC for a Retail Electric Provider Certificate, 56651) Item 28 is docket number 56651.

02:28:25.136 --> 02:28:28.424
the application of Energy well, Texas, LLC,

02:28:28.592 --> 02:28:32.240
for a retail electric provider certificate. Before you is an appeal

02:28:32.280 --> 02:28:35.800
of Order No. 2 filed by Energywell. And Commissioner Cobos

02:28:35.880 --> 02:28:40.096
filed a memo in this docket. All right. Thank you, Shelah. (item:28:Commissioner Cobos lays out here memo, 56651) So my memo

02:28:40.208 --> 02:28:43.664
is just straightforward in respect to.

02:28:43.832 --> 02:28:47.220
I would recommend that we deny energy wells appeal of order number two,

02:28:48.760 --> 02:28:51.952
which denies energy wells motion for a good cause,

02:28:52.096 --> 02:28:55.682
to 16 TAC 25.107(g)1 for the

02:28:55.706 --> 02:29:00.546
reason set forth in my memo. And those reasons are the fact that after

02:29:00.578 --> 02:29:05.330
winter Storm Erie, we adopted the rule that

02:29:05.410 --> 02:29:09.034
put out very straightforward language that said

02:29:09.122 --> 02:29:11.666
that in no instance, and we went out of our way to add that language

02:29:11.698 --> 02:29:14.970
in there. And so I think, based on the rule

02:29:15.010 --> 02:29:18.682
language in this particular circumstance,

02:29:18.786 --> 02:29:22.560
that we would not be able to grant a good cause exception,

02:29:22.900 --> 02:29:26.244
and that would result in the denial of

02:29:26.292 --> 02:29:27.520
energy wells appeal.

02:29:30.140 --> 02:29:33.772
(item:28:Commissioner Glotfelty's thoughts on the memo, 56651) Madam Chairman, I think I

02:29:33.796 --> 02:29:37.300
find myself coming down a little bit different place on this. There's only

02:29:37.340 --> 02:29:40.960
two sides to it. One, either you grant the good cause exception or you don't.

02:29:41.580 --> 02:29:43.480
One of my questions was,

02:29:45.630 --> 02:29:50.086
were these rules in 25

02:29:50.118 --> 02:29:54.446
107 promulgated after or

02:29:54.478 --> 02:29:58.726
as a result of the legislation that prohibited

02:29:58.798 --> 02:30:00.730
companies like gritty from forming?

02:30:02.110 --> 02:30:04.918
That was as a result of Winter Storm Uri and in the incidents that happened

02:30:04.934 --> 02:30:09.130
with gritty at the time. And I think my heartburn here is just that.

02:30:10.900 --> 02:30:14.140
We're doing a look back. We're basically saying, no,

02:30:14.180 --> 02:30:17.708
you can't. Let me just tell you, I talked to a lot of people who

02:30:17.724 --> 02:30:21.396
were customers of gritty, and they loved gritty up until winter

02:30:21.428 --> 02:30:24.876
storm Yuri, and a lot of people want it back. That's not going to happen,

02:30:24.948 --> 02:30:28.956
obviously, because of legislation. The question becomes to

02:30:28.988 --> 02:30:32.400
me, if you are doing this,

02:30:36.460 --> 02:30:40.272
if we put the rule in that prohibited

02:30:40.456 --> 02:30:43.952
anybody from participating as

02:30:43.976 --> 02:30:47.488
an rep who had been in that spot before we did that after the

02:30:47.504 --> 02:30:51.640
gritty experience, should we not give that exception

02:30:51.680 --> 02:30:56.360
to allow these folks in it? This is not, I don't believe, a widespread

02:30:56.400 --> 02:30:59.020
issue. And I don't know, I just,

02:30:59.360 --> 02:31:03.344
I sense that we need more competition in the retail electric market,

02:31:03.392 --> 02:31:07.096
not less. And I just throw that out for discussion

02:31:07.128 --> 02:31:10.940
of thought. Yeah, I hear what you're saying, Commissioner Glotfelty.

02:31:13.080 --> 02:31:16.288
After Uri, we took a lot of actions to

02:31:16.384 --> 02:31:19.800
ensure that we fixed issues that occurred during

02:31:19.840 --> 02:31:22.896
Yuri. And this was one area that we focused

02:31:22.928 --> 02:31:26.392
on. And our commission found that, you know,

02:31:26.496 --> 02:31:29.654
griddy violated some protocols and rules. And that's why ultimately,

02:31:29.672 --> 02:31:33.330
ultimately, there was language added to that rule

02:31:33.370 --> 02:31:37.418
that said if you're a rep that has to go through a polar and your

02:31:37.514 --> 02:31:41.830
standard form agreement at ERCOT gets terminated. That under those specific circumstances,

02:31:43.570 --> 02:31:47.578
if you're a principal within the last six months to the

02:31:47.754 --> 02:31:51.050
transition and the specific facts there, that in no instance

02:31:51.090 --> 02:31:54.634
would you be able to come back into the market. And maybe

02:31:54.762 --> 02:31:58.112
we. Right now, the rules are written the way it is.

02:31:58.256 --> 02:32:02.152
And I don't think there's a whole lot

02:32:02.176 --> 02:32:05.712
of will room, but we can go back and

02:32:05.736 --> 02:32:09.552
reconsider kind of, you know, now we're past Yuri and

02:32:09.656 --> 02:32:12.880
think about role amendments in the future that might make sense.

02:32:12.960 --> 02:32:17.768
But, you know, at that time we

02:32:17.864 --> 02:32:21.392
went through extraordinary measures to add that specific language

02:32:21.456 --> 02:32:24.560
to prohibit principals from reps under those

02:32:24.600 --> 02:32:27.140
specific facts from being able to reenter the market.

02:32:27.760 --> 02:32:31.220
And I believe ERCOT has taken action on their end

02:32:31.920 --> 02:32:35.528
with protocols, et cetera, to not allow that

02:32:35.584 --> 02:32:39.504
sort of, you know, reentering of the market, too. So that's where I came

02:32:39.672 --> 02:32:42.940
down on it. You know,

02:32:44.400 --> 02:32:49.292
we put that language in there for a reason. And that's. That's basically

02:32:49.356 --> 02:32:52.620
where I think that I would go

02:32:52.660 --> 02:32:56.548
because of the specific language we put in there that added a

02:32:56.564 --> 02:32:59.988
strict prohibition. Madam Chair?

02:33:00.084 --> 02:33:03.468
Yes. (item:28:Barksdale English with clarification on memo, 56651) If it's okay, I'd like to just provide a quick clarification.

02:33:03.524 --> 02:33:07.092
And it's not appropriate for me to weigh in on the deliberation,

02:33:07.156 --> 02:33:09.480
but just as a clarification.

02:33:10.020 --> 02:33:14.504
Commissioner Glotfelty, you're correct that the wholesale index rule did come about

02:33:14.632 --> 02:33:16.540
after Winter Storm Uri.

02:33:18.240 --> 02:33:22.660
The retail electric provider rule 25.107

02:33:23.280 --> 02:33:26.632
did contain provisions prior to Winter Storm Uri

02:33:26.696 --> 02:33:30.960
that would prohibit a principal whose rep

02:33:31.040 --> 02:33:34.912
certificate had been revoked from serving as a

02:33:34.936 --> 02:33:37.686
principal or a controlling member of a new rep.

02:33:37.848 --> 02:33:42.410
Following that revocation, the amendments to 25.107

02:33:42.570 --> 02:33:46.274
did contain some clarifications, or I think staff

02:33:46.322 --> 02:33:50.150
would call them clarifications about what control means.

02:33:50.890 --> 02:33:55.114
But the concept that principals whose

02:33:55.202 --> 02:33:59.018
certificates had been revoked should not come back into the market that

02:33:59.114 --> 02:34:02.910
existed prior to Winter Storm Uri. Okay, that's helpful. Thank you very much.

02:34:03.780 --> 02:34:06.996
Okay, any more comments? Is this the first time this rule has

02:34:07.028 --> 02:34:10.200
been brought before the Commission thus far after Uri?

02:34:11.260 --> 02:34:15.028
I think so, but I would ask staff if they recall any other instances.

02:34:15.164 --> 02:34:19.220
I don't believe we've had another set of principles from a company that

02:34:19.380 --> 02:34:23.788
was subject to those facts. Come back before to try to get a

02:34:23.804 --> 02:34:27.660
rep certificate with a different rep. I believe thats

02:34:27.700 --> 02:34:30.450
correct. This is the only such application we've received.

02:34:33.590 --> 02:34:36.570
Okay. Any more feedback, Mister Jackson?

02:34:37.510 --> 02:34:40.886
Okay. (item:28:Motion to deny Energywell's Appeal of Order No. 2, 56651) With that, I would move

02:34:40.918 --> 02:34:43.450
to deny Energywell's Appeal of Order No. 2.

02:34:44.950 --> 02:34:49.358
Second. All in favor? Or

02:34:49.374 --> 02:34:52.102
do I need to move? Did you move it? Well, I moved to. Yeah,

02:34:52.126 --> 02:34:56.122
please. It's been a long day. Go for it. I moved that

02:34:56.286 --> 02:34:59.722
we deny the appeal consistent with your memo, or for the reasoning behind your

02:34:59.746 --> 02:35:03.090
memo? I second. All right. All in favor, say aye.

02:35:03.170 --> 02:35:06.710
Aye. All right, none opposed. Motion passes. Thank you.

02:35:16.930 --> 02:35:20.122
All right, I think that takes us through the end of the contested case docket.

02:35:20.146 --> 02:35:23.116
Now, we'll now hand the gavel back over to Chairman Gleeson.

02:35:23.308 --> 02:35:25.040
Thank you, Commissioner Cobos.

02:35:26.580 --> 02:35:30.276
So that'll take us. So, 30 and 31 were consented.

02:35:30.308 --> 02:35:33.120
(item:33:Chairman Gleeson lays out Project No. 55999) So I'll take us to Item No. 33.

02:35:33.620 --> 02:35:37.812
Docket No. 55999, reports of ERCOT.

02:35:37.876 --> 02:35:42.052
And I believe ERCOT has an update on the RMR

02:35:42.196 --> 02:35:46.172
MRA. And I think we also have representatives from CPS here as

02:35:46.196 --> 02:35:49.350
well. If they'd like to come forward, if they have any comments.

02:35:56.810 --> 02:35:59.230
Good morning or good afternoon, everyone.

02:36:00.010 --> 02:36:03.602
So, I don't think anything's being asked of us today. This is really

02:36:03.626 --> 02:36:06.634
just informational to talk about the RMR associated with

02:36:06.642 --> 02:36:09.270
the Braun egg plants. So, Davita,

02:36:09.610 --> 02:36:13.184
if you'd like to begin? (item:33:Davita Dwyer, ERCOT's Sr. Corporate Counsel on the RMR process & ERCOT workshop, 55999) Davita Dwyer with ERCOT.

02:36:13.262 --> 02:36:16.852
And with me is Woody Rickerson. And thank

02:36:16.876 --> 02:36:20.116
you  Chairman, Commissioners for the opportunity to come and speak with you

02:36:20.148 --> 02:36:23.700
all. I'm amending my comments to be a little bit shorter

02:36:23.780 --> 02:36:27.556
in the interest of time. I'll note that we filed

02:36:27.708 --> 02:36:31.772
in Project No. 5999. Two updates

02:36:31.836 --> 02:36:35.588
for you all regarding the RMR process. There are interchange

02:36:35.644 --> 02:36:38.780
Items 52 and 53, and an issue

02:36:38.820 --> 02:36:42.368
that we wanted to bring to your attention was a timing issue with respect

02:36:42.464 --> 02:36:46.152
to potential RMR service by CPS Energy's

02:36:46.176 --> 02:36:50.080
Braunig Units 1 through 3. CPS Energy gave

02:36:50.120 --> 02:36:54.128
us advanced notice about their intention to indefinitely suspend

02:36:54.184 --> 02:36:58.648
these units, which we've appreciated that

02:36:58.704 --> 02:37:02.544
retirement is proposed to take place on March 31 of

02:37:02.592 --> 02:37:06.032
next year, which poses a timing issue because we understand

02:37:06.136 --> 02:37:09.780
that the unit cannot be run after

02:37:09.820 --> 02:37:13.916
their proposed retirement date unless and until they are inspected

02:37:13.988 --> 02:37:17.228
and potentially repaired. And ERCOT is

02:37:17.244 --> 02:37:20.260
proactively planning ahead for next Spring,

02:37:20.340 --> 02:37:24.084
next Summer and all of the following seasons as well. And we are

02:37:24.132 --> 02:37:27.600
evaluating whether or not we should

02:37:28.420 --> 02:37:32.220
contract with CPS Energy to have them take earlier outages

02:37:32.340 --> 02:37:36.496
before potential RMR service in order to potentially

02:37:36.528 --> 02:37:39.992
have those units in place if the board determines that they are

02:37:40.016 --> 02:37:44.008
needed for RMR service, and also give the board better information for

02:37:44.024 --> 02:37:47.624
at least one of those units when making the decision whether or not to enter

02:37:47.672 --> 02:37:51.344
into agreements for RMR service, must run alternative service

02:37:51.472 --> 02:37:54.420
or address this reliability need in other ways.

02:37:55.280 --> 02:37:59.080
And I'll note that each unit is anticipated to take

02:37:59.120 --> 02:38:02.896
approximately 60 days, barring unforeseen circumstances,

02:38:03.088 --> 02:38:06.296
and each unit has to be done separately. So part of the

02:38:06.328 --> 02:38:09.848
issue is the need to thoughtfully plan

02:38:10.024 --> 02:38:13.520
for this service. We also highlighted for you all some

02:38:13.560 --> 02:38:17.580
cost considerations, and CPS Energy provided

02:38:18.240 --> 02:38:22.280
a letter and attached cost estimates that we attached

02:38:22.320 --> 02:38:26.140
to our filings to help you all understand some of the important considerations.

02:38:28.250 --> 02:38:31.346
Davita, you are hosting a workshop this afternoon?

02:38:31.458 --> 02:38:34.586
Yes, sir. Thank you for raising that. So, we're holding a workshop on the must

02:38:34.618 --> 02:38:37.826
run alternatives. That's the process in which we are seeking,

02:38:37.858 --> 02:38:41.962
under the Commission's rule and under the ERCOT protocols. Lower cost alternatives

02:38:41.986 --> 02:38:45.350
to potentially entering into RMR service with the Braunig units.

02:38:45.650 --> 02:38:49.346
And hopefully, we get active engagement participation in

02:38:49.378 --> 02:38:52.946
that as well, to help drive down costs. Yes, sir. We're seeking all

02:38:52.978 --> 02:38:56.456
sorts of. Of different types of little r resources, including demand

02:38:56.528 --> 02:39:00.560
response, including other types of entities that are smaller

02:39:00.600 --> 02:39:04.048
than large generation resources, registered with ERCOT. And we're hopeful to

02:39:04.064 --> 02:39:06.340
find some lower cost alternatives.

02:39:10.920 --> 02:39:14.416
(item:33:Carolyn Shellman, Law Firm of Enoch Kever, Lawyer for CPS Energy concerning RMRs, 55999) Good afternoon. My name is Carolyn Shellman. I'm a lawyer

02:39:14.448 --> 02:39:17.600
with the law firm of Enoch Kever and I'm here today representing

02:39:17.640 --> 02:39:21.002
CPS Energy. And I have Gabriel Garcia here with

02:39:21.026 --> 02:39:23.990
me, who's Regulatory Counsel for CPS.

02:39:24.330 --> 02:39:28.178
And my law partner, Andy Kever is here. And we have

02:39:28.274 --> 02:39:32.026
several of the CPS Energy executives

02:39:32.058 --> 02:39:36.058
who've been working on this project with Davita

02:39:36.114 --> 02:39:39.570
and the ERCOT team. To try to figure out whether there's a way that these

02:39:39.610 --> 02:39:42.270
units, if called upon could be available.

02:39:43.530 --> 02:39:46.832
So, I don't want to repeat the what Davita has said. But I want to

02:39:46.856 --> 02:39:50.240
make sure that the Commission is aware that CPS Energy is

02:39:50.280 --> 02:39:54.272
here, ready to support ERCOT if

02:39:54.296 --> 02:39:57.660
it's determined to be necessary and there's a feasible way to do it.

02:39:58.360 --> 02:40:01.856
The units that she has described, the three

02:40:01.888 --> 02:40:05.216
Braunig units, have been part of a

02:40:05.248 --> 02:40:09.360
long, broad, long term plan that CPS Energy has.

02:40:09.520 --> 02:40:13.256
They are aging fossils units. The decision was made

02:40:13.408 --> 02:40:17.120
over a period of time to retire them next

02:40:17.200 --> 02:40:20.808
year at the end of March. And so they made an announcement of

02:40:20.824 --> 02:40:24.376
that and notified ERCOT with plenty

02:40:24.408 --> 02:40:27.768
of time, knowing that it's a lot of capacity to retire.

02:40:27.824 --> 02:40:30.860
This is a total of 859 mw.

02:40:31.400 --> 02:40:35.704
These are old plants, 50 plus years old, and gas

02:40:35.752 --> 02:40:39.246
fired projects that CPS no

02:40:39.278 --> 02:40:43.110
longer needs, but does plan

02:40:43.150 --> 02:40:46.542
to run them until their planned retirement date in

02:40:46.566 --> 02:40:50.566
March. And so that's what we have worked with ERCOT on,

02:40:50.638 --> 02:40:54.518
how this could be done. And we commit that. We will be prepared

02:40:54.574 --> 02:40:58.414
to coordinate with ERCOT as

02:40:58.462 --> 02:41:01.810
needed if the plants are selected for an RMR contract.

02:41:02.180 --> 02:41:05.840
But what I want you to understand is that CPS has been

02:41:06.260 --> 02:41:10.044
done everything that's necessary to keep these plants running safely

02:41:10.092 --> 02:41:14.028
and reliably. But we have not undertaken

02:41:14.124 --> 02:41:17.412
the major repairs that you would do if you

02:41:17.436 --> 02:41:21.500
were going to extend the plant life beyond that

02:41:21.580 --> 02:41:24.844
planned retirement date. So our engineers,

02:41:24.932 --> 02:41:28.132
I think, are very comfortable that the plants can continue to

02:41:28.156 --> 02:41:32.502
run through the time plan to operate them. But prudence dictates

02:41:32.566 --> 02:41:35.942
that if we're going to commit to run them after that,

02:41:36.126 --> 02:41:40.262
and not just prudence, just engineering practice, it dictates that

02:41:40.286 --> 02:41:44.582
we would need to inspect those units. And that's a big process, opening up

02:41:44.726 --> 02:41:48.518
each of the three units separately, inspecting them, doing whatever

02:41:48.574 --> 02:41:52.198
maintenance is necessary, and making decisions about major

02:41:52.254 --> 02:41:56.008
repairs that would need to be done. So that is what we

02:41:56.064 --> 02:41:59.440
have tried to estimate and

02:41:59.480 --> 02:42:02.776
explain to ERCOT all the details of that.

02:42:02.928 --> 02:42:06.376
And I know that there's information that they are sharing with you so that

02:42:06.488 --> 02:42:10.248
you can understand what we believe our best estimate

02:42:10.304 --> 02:42:13.552
is of what's going to need to be done and the

02:42:13.576 --> 02:42:17.128
cost that would be involved in doing that. And so we, Gabriel and I,

02:42:17.144 --> 02:42:20.016
are prepared to answer questions if you have them. And if we need to,

02:42:20.048 --> 02:42:23.696
we'll call. Call on our folks who can get down in the weeds on it.

02:42:23.888 --> 02:42:28.208
(item:33:Chairman Gleeson's question concerning notice of suspension of operations, 55999) Do you know when you all provided ERCOT with a notice of suspension of operations?

02:42:28.384 --> 02:42:31.980
Yes. March. Gabriel knows.

02:42:35.440 --> 02:42:38.672
Was it March of this year? It was

02:42:38.696 --> 02:42:42.104
a year prior to even the requirement, is that right?

02:42:42.232 --> 02:42:45.540
March 13 of this year.

02:42:46.090 --> 02:42:49.970
So you said, you know, you stopped doing kind of the big maintenance

02:42:50.090 --> 02:42:53.018
that you would do if you were going to keep this going. How far in

02:42:53.034 --> 02:42:56.634
advance of that notice of suspension of operations did you stop doing the required

02:42:56.682 --> 02:42:58.390
maintenance on these units?

02:43:02.250 --> 02:43:05.898
I think, I wouldn't describe it that way and subject to

02:43:05.914 --> 02:43:09.330
being corrected by my counsel here, but I think

02:43:09.370 --> 02:43:14.270
that what we have done is all the necessary planned

02:43:14.610 --> 02:43:18.670
work that you would do to keep plants running. We have

02:43:19.690 --> 02:43:23.090
since looked at some life extension studies to

02:43:23.130 --> 02:43:26.350
see what it would take to extend them longer.

02:43:26.890 --> 02:43:30.562
But I think that this has been part of a plan to close

02:43:30.626 --> 02:43:33.482
those plants over several years,

02:43:33.546 --> 02:43:36.930
but nothing has happened that would

02:43:37.090 --> 02:43:40.980
decrease their reliability and safety. Up till now,

02:43:41.100 --> 02:43:44.400
we just haven't done any major life extension.

02:43:44.900 --> 02:43:48.124
I would add that five years ago, we did

02:43:48.252 --> 02:43:52.652
an investment to extend their lives for five years through March

02:43:52.796 --> 02:43:56.572
of next year, hence their retirement date

02:43:56.596 --> 02:43:59.880
of March 31, 2025. Okay.

02:44:00.180 --> 02:44:03.844
Well, Commissioner Jackson, I think really what we're talking about here is risk

02:44:03.892 --> 02:44:07.640
mitigation. I know you're big on identifying and mitigating risks.

02:44:08.220 --> 02:44:11.948
One thing I think I would also say is, depending on how

02:44:12.124 --> 02:44:14.520
the MRA process goes,

02:44:15.460 --> 02:44:18.972
it may be worth looking at having staff work with ERCOT to look

02:44:18.996 --> 02:44:22.388
to see if there can be improvements to this process

02:44:22.484 --> 02:44:26.052
to provide low cost alternatives. I think we're going to see, with our

02:44:26.076 --> 02:44:29.200
aging fleet, our dispatchable fleet, we're going to continue to see

02:44:30.090 --> 02:44:34.042
notice of suspension of operations. And so I think that probably deserves a look

02:44:34.066 --> 02:44:37.230
at what that process is and see if there can be any improvements.

02:44:39.530 --> 02:44:43.266
(item:33:Commissioner Jackson's question on management of risk, 55999) And I guess, just from a management of risk standpoint and

02:44:43.418 --> 02:44:47.314
looking at all the alternatives, one of the things that I

02:44:47.322 --> 02:44:50.418
think ERCOT is thinking about is, you know, going in

02:44:50.434 --> 02:44:53.778
and doing an early look see, maybe trying to see if there's an opportunity to

02:44:53.794 --> 02:44:57.668
take it down in the Fall so that at least we have a better idea

02:44:57.764 --> 02:45:00.480
prior to, you know, getting into,

02:45:01.700 --> 02:45:06.252
you know, the Summer months or the next Winter, and possibly

02:45:06.316 --> 02:45:09.484
considering taking it down in the Fall. And as you noted,

02:45:09.612 --> 02:45:12.732
it would take 60 days, and the strategy would

02:45:12.756 --> 02:45:16.340
be to look at the newest unit first, which would be unit number

02:45:16.380 --> 02:45:19.116
three. The largest unit. The newest, yeah, exactly.

02:45:19.148 --> 02:45:22.816
412. You know, one of the questions

02:45:22.848 --> 02:45:26.840
I had was, you know, knowing kind of like the

02:45:26.920 --> 02:45:30.336
history that you've laid out in terms of the maintenance, the fact that

02:45:30.368 --> 02:45:33.340
you didn't do the life extension repairs five years ago,

02:45:33.760 --> 02:45:37.216
you probably, you know, have somewhat of an idea of what you're going

02:45:37.248 --> 02:45:40.440
to go in and find, whether you would do the look see

02:45:40.560 --> 02:45:43.656
early in the Fall or whether you would wait and do it, you know,

02:45:43.688 --> 02:45:47.360
closer, you know, or after the March 31 time

02:45:47.400 --> 02:45:50.668
frame. But is there a way to go in and,

02:45:50.764 --> 02:45:54.164
you know, not necessarily take the whole 60 days,

02:45:54.332 --> 02:45:57.692
but do like a cursory view, particularly if you're

02:45:57.716 --> 02:46:01.200
going to find something major to help you make that decision

02:46:01.940 --> 02:46:05.604
quickly, because I guess the option would be, you go in, you take a look,

02:46:05.652 --> 02:46:08.916
you say, okay, this is major. This is x number of dollars. You weigh that

02:46:08.948 --> 02:46:12.268
cost versus the benefit, and you'd say, you know, that's probably not

02:46:12.284 --> 02:46:15.526
the option we want to take, going to look at going down a different path.

02:46:15.638 --> 02:46:19.710
But that might give you an opportunity to make the decision quicker, get back

02:46:19.750 --> 02:46:23.718
online and still have it available until the

02:46:23.774 --> 02:46:26.490
end of the commissioning date, which would be March 31.

02:46:27.350 --> 02:46:30.918
I think we would meet the assistance of one

02:46:30.934 --> 02:46:34.470
of our experts to answer that question in

02:46:34.970 --> 02:46:38.326
an accurate manner today. But, I mean, I think that that might be something we

02:46:38.358 --> 02:46:41.064
should. We can certainly provide that information.

02:46:41.232 --> 02:46:44.088
And I know that ERCOT is,

02:46:44.224 --> 02:46:47.768
you know, is looking at this as well, and looking at

02:46:47.784 --> 02:46:51.440
it from the standpoint of, you know, come March 31,

02:46:51.600 --> 02:46:54.640
you know, we've had the option. We either make the investment or March 31,

02:46:54.680 --> 02:46:58.208
we have to do something else. Oh, I'm sorry.

02:46:58.344 --> 02:47:01.900
Aren't there some opportunity, you know, what is the benefit of getting an early

02:47:02.280 --> 02:47:05.576
look at what we're dealing with and then having more

02:47:05.728 --> 02:47:09.728
time to do some of the things that you talked about with having,

02:47:09.784 --> 02:47:13.780
you know, alternative sources again to

02:47:14.240 --> 02:47:17.704
meet a pretty significant shortfall in dispatchable?

02:47:17.792 --> 02:47:21.344
Yes, I agree with Gabriel. I think exactly

02:47:21.392 --> 02:47:24.760
what we could do when we opened them up and whether we could do just

02:47:24.800 --> 02:47:28.192
a little bit is something that we'd need somebody else to

02:47:28.216 --> 02:47:31.460
speak to. But I would, you know, one of the things that I think CPS

02:47:31.760 --> 02:47:35.616
is concerned about is that in order to get this done

02:47:35.728 --> 02:47:39.540
in the fall and not wait until next April,

02:47:40.640 --> 02:47:44.380
contracts would need to be, the contractor would need to be

02:47:45.200 --> 02:47:48.696
procured. And there is a cost in getting everything ready

02:47:48.728 --> 02:47:52.384
and getting the crane there and getting. Opening it up. So there are

02:47:52.552 --> 02:47:56.296
probably significant expenses just in doing that.

02:47:56.368 --> 02:47:59.828
But I do nothing. I can't answer whether you

02:47:59.844 --> 02:48:03.004
could get in and just look at it a little bit and we will explore

02:48:03.052 --> 02:48:06.284
that, make a quick decision, you know?

02:48:06.372 --> 02:48:09.900
Yeah. Yeah. It sounded

02:48:09.940 --> 02:48:13.588
like it was up to 60 days. So you might be able to

02:48:13.724 --> 02:48:17.196
go in there after the plan is open and have a really good

02:48:17.228 --> 02:48:20.644
idea. Yes. Earlier than 60 days. Because I think

02:48:20.692 --> 02:48:24.452
that the concern I have is the, you know, obviously it's

02:48:24.516 --> 02:48:27.982
going to be expensive. Expensive. Right. Just to even open up the plant and go

02:48:28.006 --> 02:48:31.662
in there. But also the lost opportunity costs

02:48:31.686 --> 02:48:35.702
that we're having, you know, the repairs, the loads are having to

02:48:35.726 --> 02:48:39.038
pay for the plant being down. I understand it's a

02:48:39.054 --> 02:48:42.450
necessary part of this whole evaluation because of the.

02:48:43.190 --> 02:48:47.206
For safety reasons, but ensuring that we

02:48:47.238 --> 02:48:49.050
minimize that if we can.

02:48:51.420 --> 02:48:54.276
If there's an opportunity to get in there and get it done in 30 days,

02:48:54.388 --> 02:48:57.132
if there is. Right. We don't want to rush through something like that, but if

02:48:57.156 --> 02:49:00.596
there is, and also to make sure that

02:49:00.788 --> 02:49:04.436
the lost opportunity cost is

02:49:04.588 --> 02:49:08.360
calculated in a manner that everybody feels comfortable

02:49:09.060 --> 02:49:15.260
with, the amount of money that would be paid for that. Yes. So we

02:49:15.300 --> 02:49:17.450
understand that. Certainly agree.

02:49:18.430 --> 02:49:21.662
(item:33:Commissoner Hjaltman's question on outages, 55999) Have the outages you've taken in the past five years that you've come

02:49:21.686 --> 02:49:24.822
up with the plan differed? Have you stopped taking as

02:49:24.846 --> 02:49:28.038
many outages because you thought you were going to not be

02:49:28.054 --> 02:49:31.518
using these plants anymore so that we would be expecting to see more damage to

02:49:31.534 --> 02:49:34.534
the plants coming forth? I don't think that would be the case.

02:49:34.582 --> 02:49:37.742
From my understanding of it, I think that we

02:49:37.766 --> 02:49:42.086
have done all the maintenance that would be usual and planned

02:49:42.158 --> 02:49:46.254
in order to keep those plants running in accordance

02:49:46.302 --> 02:49:49.686
with the five year extension. And, you know, if you

02:49:49.718 --> 02:49:53.638
go in and find out you have to replace rotor blades and a

02:49:53.654 --> 02:49:57.166
lot of tubing in a plant, we wouldn't be opening up to

02:49:57.198 --> 02:50:01.198
do that. But, yes, I think we have done the safety of those plants,

02:50:01.374 --> 02:50:05.246
both for the operational necessity and just the employees that work.

02:50:05.278 --> 02:50:09.416
There is something that CPS pays a lot of attention to. So I'm

02:50:09.448 --> 02:50:13.432
sure that what has been done has been prudent and necessary all

02:50:13.456 --> 02:50:16.552
along. I would add that of the three plants,

02:50:16.736 --> 02:50:19.580
unit three is the one that runs the most.

02:50:21.160 --> 02:50:24.632
We've had problems, you know, with unplanned

02:50:24.656 --> 02:50:28.080
outages because of the age

02:50:28.120 --> 02:50:30.380
of the units, you know, which is to be expected,

02:50:31.960 --> 02:50:35.756
so. But unit number three is the one that is

02:50:35.788 --> 02:50:39.036
utilized the most of the three units, and it's the

02:50:39.068 --> 02:50:39.840
largest.

02:50:45.100 --> 02:50:48.436
Do you know anybody who has some mobile generation for

02:50:48.468 --> 02:50:49.120
lease?

02:50:52.820 --> 02:50:56.560
I say that in jest, but I don't know, maybe it's.

02:50:57.860 --> 02:51:00.280
We can introduce you to Jason Ryan behind you.

02:51:01.940 --> 02:51:05.480
Woody, I have a question for you on this. And that is this.

02:51:06.220 --> 02:51:10.764
The total cost of this RMR package, including the

02:51:10.932 --> 02:51:15.044
future or the potential maintenance, is like $150

02:51:15.092 --> 02:51:18.868
million, is that right? (item:33:Woody Rickerson, ERCOT's SVP & COO on RMR analysis, 55999) Yes. That's Woody

02:51:18.884 --> 02:51:22.076
Rickerson with ERCOT. Yeah, that was the estimate,

02:51:22.228 --> 02:51:23.080
roughly.

02:51:25.830 --> 02:51:29.598
That's hard. I mean, this is one of those hard decisions that

02:51:29.614 --> 02:51:33.094
we got to make for the good of the system or, you know, to spend,

02:51:33.222 --> 02:51:37.770
you know, that much money on old plants. It's not easy.

02:51:38.150 --> 02:51:41.270
I just wonder, you know,

02:51:41.390 --> 02:51:45.382
I know this

02:51:45.406 --> 02:51:49.270
is a transmission issue. We've had these discussions. The question becomes,

02:51:49.430 --> 02:51:53.656
how does the system look

02:51:53.848 --> 02:51:57.072
today and over the next twelve months,

02:51:57.136 --> 02:52:00.320
with the addition of more solar and more batteries on the north

02:52:00.360 --> 02:52:03.500
side of the constraint? Are these,

02:52:04.240 --> 02:52:08.256
does any of this transmission

02:52:08.368 --> 02:52:12.392
issue get solved as a result of that, or does

02:52:12.416 --> 02:52:15.424
it continue to fester?

02:52:15.592 --> 02:52:19.560
Yeah. So the analysis we used took into account all

02:52:19.640 --> 02:52:23.200
known new resources that were coming online. So if something's coming

02:52:23.240 --> 02:52:26.736
online next Summer, it's already in the interconnection queue. That has already

02:52:26.768 --> 02:52:29.544
been factored in into the RMR analysis.

02:52:29.712 --> 02:52:35.592
Even with those factored in, we still show IROL

02:52:35.696 --> 02:52:41.280
overloads on that Pawnee to spruce line. So there

02:52:41.320 --> 02:52:44.522
could be new generation show up that we haven't

02:52:44.546 --> 02:52:48.506
accounted for. And you don't know what. You don't know yet,

02:52:48.698 --> 02:52:52.110
but that could happen. And anything north would help.

02:52:53.730 --> 02:52:56.946
A new big data center north of the constraint would

02:52:56.978 --> 02:53:00.274
hurt. And those can come online just about as fast as

02:53:00.402 --> 02:53:05.190
the new generation. So additional

02:53:05.690 --> 02:53:09.520
resources in the south will make the problem worse.

02:53:10.220 --> 02:53:12.800
And the IROL is.

02:53:14.100 --> 02:53:18.356
I don't claim to know a whole lot about that. But is

02:53:18.388 --> 02:53:22.160
that like, when that is designated?

02:53:22.460 --> 02:53:24.960
Right. So it's basically a,

02:53:25.740 --> 02:53:29.080
it's basically a line that if you let it overload

02:53:29.380 --> 02:53:33.020
and the contingency were to happen, it would result in cascading

02:53:33.060 --> 02:53:37.366
outages. So you have to avoid the cascading outages so

02:53:37.398 --> 02:53:38.970
you don't let the line overload.

02:53:41.750 --> 02:53:45.230
Right. Obviously, we don't want cascading outages,

02:53:45.310 --> 02:53:49.622
nor do we want an overload on that line, according to, according to ERCOT.

02:53:49.726 --> 02:53:54.090
I guess the question, I just, maybe I should

02:53:54.990 --> 02:53:59.110
just table this and talk a little bit more with you about it later

02:53:59.150 --> 02:54:01.936
on this week. I guess we're not going to finalize anything today.

02:54:02.048 --> 02:54:05.264
No. I think this is going to come up at the ERCOT board meeting next

02:54:05.312 --> 02:54:08.856
week. And then I think you all indicated you may

02:54:08.888 --> 02:54:12.968
need to take the fall outage. You may need some exceptions

02:54:13.024 --> 02:54:16.352
to your own, your rules, some of what we've done in the past. So that

02:54:16.416 --> 02:54:19.920
I think might come up at the August 29 open meeting. So we'll have other

02:54:19.960 --> 02:54:22.832
opportunities to talk about this as well. So I'll reserve everything else for you.

02:54:22.856 --> 02:54:26.442
(item:33:Gabriel Garcia, CPS Energy's Regulatory Counsel on costs, 55999) Commissioner Glotfelty, I'd like to provide a little more context. Gabriel Garcia, for CPS

02:54:26.506 --> 02:54:30.354
Energy, regarding cost. With regards

02:54:30.402 --> 02:54:33.858
to what we call the pre RMR cost, which are

02:54:33.954 --> 02:54:37.602
taking these outages in order to inspect them, we estimate

02:54:37.666 --> 02:54:41.226
those costs to be about 22

02:54:41.258 --> 02:54:43.230
million for unit three,

02:54:45.130 --> 02:54:48.282
about 15.8 for unit

02:54:48.346 --> 02:54:52.390
two, and 17.3 million for unit one.

02:54:52.780 --> 02:54:56.620
And that would, that includes the outage opportunity

02:54:56.660 --> 02:55:00.356
cost and also some repairs to

02:55:00.388 --> 02:55:04.180
extend the life of the unit. So the

02:55:04.220 --> 02:55:08.932
larger number that Woody referred to are

02:55:08.956 --> 02:55:12.820
the best estimates right now, which clearly are,

02:55:12.940 --> 02:55:16.000
without doing an inspection for,

02:55:16.900 --> 02:55:20.606
you know, for entering into an RMR contract. But the pre

02:55:20.638 --> 02:55:24.358
RMR outage inspections are the numbers

02:55:24.374 --> 02:55:28.438
that I, that's, that's our best estimate of what those costs would be.

02:55:28.614 --> 02:55:32.542
Thank you. But you would only take one unit at a time and your

02:55:32.686 --> 02:55:36.326
thoughts take the newest one and the largest one first.

02:55:36.398 --> 02:55:41.366
Correct. So if the one

02:55:41.398 --> 02:55:45.400
idea would be to do one unit, unit three this fall,

02:55:47.180 --> 02:55:51.188
and we may or may not do others after

02:55:51.244 --> 02:55:54.476
March or sometime into next year, but just

02:55:54.508 --> 02:55:57.780
want to give you an idea of, those are our best

02:55:57.820 --> 02:56:01.440
estimates right now. Of course, once you open them up for inspection,

02:56:02.580 --> 02:56:06.800
then we'll have a much better idea as to what

02:56:07.300 --> 02:56:10.764
the repairs would cost and also how

02:56:10.812 --> 02:56:15.140
long it would take to conduct those repairs.

02:56:17.320 --> 02:56:20.856
I mean like Chairman Gleeson, I would really encourage

02:56:20.888 --> 02:56:24.632
you all to, and resources out there. To take

02:56:24.656 --> 02:56:28.224
advantage of the MRA process. I know you all are having a workshop this afternoon.

02:56:28.392 --> 02:56:31.976
I don't know how many resources you all ultimately get. And I think

02:56:32.008 --> 02:56:35.832
that looking for ways to help mitigate costs

02:56:35.856 --> 02:56:39.536
is really important. The MRA is one. One avenue on

02:56:39.568 --> 02:56:41.864
doing that. The other one is,

02:56:42.032 --> 02:56:45.344
and this may be more of a question for you, Woody and

02:56:45.392 --> 02:56:48.800
David. So CPS has provided

02:56:48.840 --> 02:56:52.180
their lost opportunity costs based on their calculation.

02:56:54.600 --> 02:56:59.060
Are you all in agreement, or are you all looking for ways to

02:56:59.760 --> 02:57:03.656
further explore how lost opportunities should be caught

02:57:03.728 --> 02:57:08.512
calculated? We're still working on understanding

02:57:08.616 --> 02:57:12.312
the assumptions that were made and what elements

02:57:12.376 --> 02:57:16.016
of those assumptions might be things that would be subject to true

02:57:16.048 --> 02:57:20.220
up after the fact versus what are things that are essentially unknown.

02:57:21.040 --> 02:57:24.920
And we're talking with CPS about their calculations

02:57:25.080 --> 02:57:28.552
because obviously that's an important component of this. Yeah,

02:57:28.576 --> 02:57:31.928
I think that that's really important to look

02:57:31.944 --> 02:57:35.336
at that specific cost component like you described.

02:57:35.368 --> 02:57:39.780
Maybe some kind of an ex post review or a clawback provision

02:57:40.120 --> 02:57:43.008
evaluating the capacity factors of the plants,

02:57:43.184 --> 02:57:46.020
just to make sure that we're not, you know,

02:57:46.400 --> 02:57:50.104
want to be fair here in terms of opportunity costs, because you're taking the plan

02:57:50.152 --> 02:57:53.752
out, but we also have to be cognizant of, you know,

02:57:53.776 --> 02:57:56.972
the load cost as well. So I encourage you all to

02:57:56.996 --> 02:58:00.620
continue to work on a process that makes

02:58:00.660 --> 02:58:04.460
sense on addressing both issues. I'll note that's consistent with the RMR

02:58:04.500 --> 02:58:07.852
construct. For example, it includes estimates of

02:58:07.876 --> 02:58:11.124
what the costs of repairs would be after the fact.

02:58:11.172 --> 02:58:14.760
We would know what the actual costs were, and those could be trued up.

02:58:15.660 --> 02:58:17.200
All right, thank you.

02:58:19.300 --> 02:58:23.048
Hey, Woody, can I ask you one other question? When you all do the

02:58:23.224 --> 02:58:26.340
IROL limit, is it based upon certain.

02:58:27.720 --> 02:58:31.624
Does it look at 8760 hours of the year? Or is it just

02:58:31.792 --> 02:58:35.536
like, between certain times when there's the likelihood that that line

02:58:35.608 --> 02:58:38.944
could trip and then create a

02:58:38.952 --> 02:58:41.656
cascading outage? So,

02:58:41.808 --> 02:58:45.248
first of all, we're calculating it in real time, obviously, right?

02:58:45.344 --> 02:58:48.332
So we're controlling to a real time limit,

02:58:48.476 --> 02:58:52.420
but when we do the analysis, it's an 8760 type analysis. So we're looking

02:58:52.460 --> 02:58:55.900
at. We're doing it a summer. It's going to have a summer rating, a winter

02:58:55.940 --> 02:58:58.828
rating, that kind of thing. Okay,

02:58:58.964 --> 02:59:01.828
thanks. Okay,

02:59:01.924 --> 02:59:04.160
thanks, y'all. Thanks for being here. Thank you very much.

02:59:07.740 --> 02:59:11.308
So I don't have anything on 34. (item:35:Chairman Gleeson lays out Project No. 54584) So that will bring us to 35.

02:59:11.364 --> 02:59:15.106
That's Project No. 54584, reliability standard for the ERCOT

02:59:15.138 --> 02:59:19.106
market. Werner and Chris. Werner,

02:59:19.138 --> 02:59:22.442
I want to thank you for following a memo that elicited no calls from any

02:59:22.466 --> 02:59:24.150
market participants to my office.

02:59:25.610 --> 02:59:27.510
Very much appreciated.

02:59:33.930 --> 02:59:37.338
Yeah. (item:35:Commission Staff's Werner Roth on changes to final rule and memo, 54584) Werner Roth for Commission Staff. And I'm sure all of

02:59:37.354 --> 02:59:40.692
you received plenty of phone numbers, calls. I know our leadership on staff side received

02:59:40.756 --> 02:59:43.160
phone calls on this, and I received a couple myself. So,

02:59:43.980 --> 02:59:47.020
yes. Anyway, so what about the commission staff? So,

02:59:47.140 --> 02:59:50.708
ahead of filing the proposal for adoption that will be up for approval at the

02:59:50.724 --> 02:59:54.300
August 29 open meeting, staff has identified several key issues

02:59:54.380 --> 02:59:57.772
that were raised in the comments. Responding to the approved proposal

02:59:57.796 --> 03:00:00.908
for publication, staff member provides a brief summary on each of

03:00:00.924 --> 03:00:04.132
these issues or initial recommendations, and today we seek guidance

03:00:04.156 --> 03:00:07.956
from the Commission for any direction as we work to incorporate the necessary changes

03:00:07.988 --> 03:00:11.772
into the final rule. So the first one

03:00:11.916 --> 03:00:15.052
in the topic that prompted most of the phone calls, I would imagine, was the

03:00:15.076 --> 03:00:18.388
application of the reliability standard. As there's always been

03:00:18.404 --> 03:00:22.460
on this topic, there was a split within the comments, with some parties advocating

03:00:22.500 --> 03:00:25.268
for the standard to be a target and serve as the report card of the

03:00:25.284 --> 03:00:28.900
health of the market, and other parties stating that the standard should be boarding that

03:00:28.980 --> 03:00:33.054
requiring action when the ERCOT region is deficient of meeting the reliability standard.

03:00:33.222 --> 03:00:37.030
But more than anything, commenters were insisting that the commission needed to provide clarity

03:00:37.070 --> 03:00:40.526
on how this standard would be applied in the PFP.

03:00:40.638 --> 03:00:44.526
The current language requires that ERCOT performs its assessment every two year or

03:00:44.558 --> 03:00:47.790
every five years, and if it finds that the region is deficient at

03:00:48.290 --> 03:00:52.238
the reliability standard, they would provide recommendations to the Commission on actions that would alleviate

03:00:52.294 --> 03:00:55.718
this deficiency. However, within the rule, while the

03:00:55.734 --> 03:00:59.392
commission would be expected to review the assessment, the rule language does

03:00:59.416 --> 03:01:02.600
not require the Commission to take any specific action on these recommendations.

03:01:02.760 --> 03:01:06.392
And that was done intentionally. In staff's view, requiring the

03:01:06.416 --> 03:01:09.912
commission to take immediate action on the results of the assessment absent

03:01:09.936 --> 03:01:13.208
allowing for the Commission to consider potential cost implications and review

03:01:13.264 --> 03:01:17.104
alternatives, including non generation alternatives, is not consistent with the requirements

03:01:17.152 --> 03:01:19.660
to balance reliability and costs.

03:01:21.960 --> 03:01:24.680
And I'm happy to go through the others if you want? Yeah. Why don't

03:01:24.760 --> 03:01:27.768
you lay out the whole memo and then we can go back. Perfect. Okay.

03:01:27.944 --> 03:01:31.360
So, second, there were requests around establishing the standard

03:01:31.520 --> 03:01:35.032
through either expected unserved energy or normalized expected unserved

03:01:35.056 --> 03:01:38.624
energy, EUE or MEUE. The positions of

03:01:38.632 --> 03:01:42.184
these commoners included that an EUE metric alone effectively captures

03:01:42.312 --> 03:01:45.848
all of the three metrics, frequency, duration and the magnitude

03:01:45.864 --> 03:01:50.062
of events, and that using the newly updated estimates for cone and volume would

03:01:50.086 --> 03:01:53.730
allow for an EUE standard to be set at the economically optimal value.

03:01:54.750 --> 03:01:58.494
Staff continues to recommend the three metric reliability standard that has been reviewed through

03:01:58.502 --> 03:02:02.318
the ERCOT process for the last year. Having individual metrics for each

03:02:02.334 --> 03:02:05.998
of the three criteria provides a clear policy objective that can be understood by

03:02:06.014 --> 03:02:09.478
the broader public. Like the rest of the industry, we aim to

03:02:09.654 --> 03:02:13.262
avoid loss load events, the frequency one in ten standard, but on top

03:02:13.286 --> 03:02:16.742
of that, we are putting additional emphasis on avoiding long duration and high magnitude

03:02:16.766 --> 03:02:20.340
events well. Additionally, staff continues to oppose

03:02:20.420 --> 03:02:23.892
establishing a reliability standard where it would be possible for the target to be

03:02:23.916 --> 03:02:27.700
less reliable than the industry one in ten standard, and basing the standard solely

03:02:27.740 --> 03:02:31.108
on the economically optimal amount of EUE would result in

03:02:31.124 --> 03:02:34.916
that happening. Third, the PFP

03:02:34.948 --> 03:02:38.388
included a question about whether the explicit exceedance tolerances

03:02:38.484 --> 03:02:41.860
should be enshrined in the rule. Again, commenters were split on this,

03:02:41.900 --> 03:02:45.806
with some preferring clarity around the defined risk thresholds and others

03:02:45.878 --> 03:02:48.850
wanting the flexibility in evaluating future assessments.

03:02:49.310 --> 03:02:52.950
Ultimately, staff believes that there is value in continuing to have the exceedance

03:02:52.990 --> 03:02:56.670
tolerances of the tried in the rule. The tolerance provide a clear policy goal

03:02:56.710 --> 03:03:00.598
to limit how frequently high magnitude and high duration events are

03:03:00.614 --> 03:03:04.118
expected to occur. And because they are in the rule, they would be set by

03:03:04.134 --> 03:03:08.170
the Commission and would require a formal rulemaking with input from public comments to change.

03:03:09.000 --> 03:03:12.488
Fourth was the allowance for public comments. While the commission

03:03:12.544 --> 03:03:16.220
always has the ability to allow windows for comments,

03:03:16.640 --> 03:03:19.944
several parties pointed out there wasn't anything explicitly in here. Staff agrees that

03:03:19.952 --> 03:03:23.168
that probably should be enshrined, and so we've recommended 230 day

03:03:23.224 --> 03:03:26.752
comment windows. One after ERCOT provides the list of assumptions that would

03:03:26.776 --> 03:03:30.688
go into the assessment that they perform, and then a 30 day comment window

03:03:30.744 --> 03:03:34.714
after ERCOT has provided the results and recommendations to allow for public comments

03:03:34.762 --> 03:03:38.282
on the results as well. Fifth was

03:03:38.306 --> 03:03:42.010
the frequency of the review of the assessment. Again, not much to talk about here.

03:03:42.050 --> 03:03:45.682
We originally proposed five years aligning with the what's already in our

03:03:45.826 --> 03:03:48.898
rules requiring the system wide offer cap programs

03:03:48.914 --> 03:03:52.714
to be reviewed every five years beginning in 2026. Because system wide offer caps

03:03:52.802 --> 03:03:56.098
could be something that could be changed to meet the

03:03:56.194 --> 03:03:59.722
or beat the reliability standard, most commenters expressed concern that this

03:03:59.746 --> 03:04:03.170
was too infrequent, and staff agrees and we are proposing

03:04:03.210 --> 03:04:06.682
to modify this to a review every two years, as we believe this

03:04:06.706 --> 03:04:10.234
would provide a sufficient snapshot of the resource adequacy picture while

03:04:10.322 --> 03:04:14.002
not overburdening ERCOT or Commission Staff with an annual review as was requested

03:04:14.026 --> 03:04:17.350
by some parties. All right, just two more.

03:04:18.050 --> 03:04:21.282
All right. 6th there were concerns around the magnitude metric.

03:04:21.386 --> 03:04:24.842
Some of these concerns included a lack of clarity and transparency on how

03:04:24.906 --> 03:04:28.606
the sum value was determined and how this metric was the most

03:04:28.638 --> 03:04:32.086
sensitive to the modeling assumptions, where a few extreme hours could drive high

03:04:32.158 --> 03:04:35.502
cost outcomes. Staff acknowledges the concerns around the

03:04:35.526 --> 03:04:39.478
volatility and the sensitivity to the modeling assumptions, and we've proposed relaxing the

03:04:39.494 --> 03:04:43.190
exceedance tolerance on the magnitude metric from the original 0.25

03:04:43.230 --> 03:04:46.862
proposed in the PFP to 1%. We believe this strikes a more

03:04:46.886 --> 03:04:50.606
fair balance between the continuing to express the importance of planning to

03:04:50.638 --> 03:04:53.838
avoid these really high impact events while avoiding expensive

03:04:53.894 --> 03:04:57.806
outcomes driven by modeling assumptions. Staff also recommends

03:04:57.838 --> 03:05:01.182
adding a requirement for ERCOT to file an updated megawatt value

03:05:01.286 --> 03:05:04.238
for the amount of load shed that can be safely and effectively rotated, which would

03:05:04.254 --> 03:05:07.382
set this magnitude metric at least annually. And then prior to

03:05:07.406 --> 03:05:11.166
2026, the first assessment, we're encouraging ERCOT

03:05:11.198 --> 03:05:14.758
to work with the transmission operators and other stakeholders to memorialize the

03:05:14.774 --> 03:05:18.566
detail on how this number is calculated to provide better clarity and transparency

03:05:18.718 --> 03:05:23.056
within this protocols or wherever else is appropriate. And then lastly,

03:05:23.128 --> 03:05:26.328
but certainly not least, there were concerns around balancing

03:05:26.384 --> 03:05:30.040
reliability cost. And I admit this was an oversight on my part.

03:05:30.160 --> 03:05:33.744
The PFP did not include an explicit requirement for including costs

03:05:33.792 --> 03:05:37.584
estimates in the results of the assessment. So to address

03:05:37.632 --> 03:05:41.112
this, we will be adding a requirement to the rule for ERCOT to include

03:05:41.176 --> 03:05:43.944
their estimate of the cost to comply with the reliability standard.

03:05:44.072 --> 03:05:48.004
And because we will allow public comments on the results of the assessment and recommendations,

03:05:48.152 --> 03:05:52.076
there will be an opportunity for parties to provide alternative estimates of the costs

03:05:52.108 --> 03:05:55.772
if they disagree with their cost methodology. So that summarizes the

03:05:55.836 --> 03:05:59.116
current staff recommendations on those issues. Again, no formal action is

03:05:59.148 --> 03:06:02.556
going to be needed today, but I'll be diligently taking

03:06:02.588 --> 03:06:05.652
notes during this discussion, and I'm happy to answer any questions. Thank you for

03:06:05.676 --> 03:06:09.160
that layout. Commissioners. Questions, comments?

03:06:11.060 --> 03:06:14.740
(item:35:Commissioners thoughts and questions on memo, 54584) I have a couple. Just appreciate

03:06:14.900 --> 03:06:19.444
the hard work. You know, these things since Winter Storm Uri

03:06:19.612 --> 03:06:22.924
are confusing, commingled. A lot

03:06:22.932 --> 03:06:26.320
of them work together and I appreciate all the staff.

03:06:27.660 --> 03:06:31.360
Just two things. One of them is, I'm totally supportive of the target.

03:06:31.900 --> 03:06:35.932
I think tying our hands on what the levers we change

03:06:35.996 --> 03:06:41.270
to add capacity or to understand how

03:06:41.310 --> 03:06:45.238
we address market mechanisms to add generation

03:06:45.374 --> 03:06:48.830
should be left up to us, not totally triggered

03:06:48.950 --> 03:06:52.250
by this standard. So I'm totally supportive of the target.

03:06:52.550 --> 03:06:55.926
And then the other one is on EUE. I continue

03:06:55.998 --> 03:06:59.398
to look at things at NERC. NERC is moving

03:06:59.454 --> 03:07:03.062
away from one in ten. They say that one

03:07:03.086 --> 03:07:06.526
in ten does not create a reliable system.

03:07:06.678 --> 03:07:10.750
Let's move to the next metric. So all

03:07:10.790 --> 03:07:14.262
I would. I'm not trying to move away from the three legged stool that has

03:07:14.286 --> 03:07:18.014
been created. All I'm trying to do is see if we can, when we talk

03:07:18.062 --> 03:07:21.774
about that standard we can add an EUE number with it,

03:07:21.822 --> 03:07:25.502
since it's just math from. It's a mathematical equation

03:07:25.566 --> 03:07:29.526
from the three legged stool. So we can calculate the EUE

03:07:29.558 --> 03:07:32.656
as well. Yes, that was included in the PFP

03:07:32.688 --> 03:07:36.016
language originally, where EUE would be a reported result from the assessment

03:07:36.048 --> 03:07:39.368
for each of the system configurations they're looking at. So, yes, we will absolutely make

03:07:39.384 --> 03:07:40.380
sure that is included.

03:07:42.760 --> 03:07:46.792
Since we referenced the word target, I really think. Can you

03:07:46.816 --> 03:07:50.768
give some definition to what that would look like if we

03:07:50.784 --> 03:07:54.224
were to run and adopt this target,

03:07:54.312 --> 03:07:57.778
which we already have, sort of a target set? So how is that different than

03:07:57.794 --> 03:08:01.786
what we're doing now? What happens if we find that that target is not

03:08:01.818 --> 03:08:05.242
being met? What will the commission then do? Game plan that out is what

03:08:05.266 --> 03:08:09.778
that looks like. So the difference between what

03:08:09.794 --> 03:08:13.610
we do now and what this would do is that it would effectively require

03:08:13.690 --> 03:08:16.882
a review every two years. And ERCOT. Report back to us.

03:08:16.906 --> 03:08:19.850
Okay, this is like. This is the current health of the market. This is what

03:08:19.890 --> 03:08:22.758
the resource adequacy picture looks like now. This is what we expected it like in

03:08:22.774 --> 03:08:26.118
three years that is currently absent from the process here.

03:08:26.134 --> 03:08:29.614
So we do have the CDR and we do have the SARA reports.

03:08:29.662 --> 03:08:32.518
We do have certain documents that do come over here every so often. But this

03:08:32.534 --> 03:08:36.254
is a targeted report on this, just showing. Do you meet this reliability standard,

03:08:36.302 --> 03:08:39.958
yes or no? If no, ERCOT would

03:08:39.974 --> 03:08:43.990
be required to provide recommendations. It could be moving levers on

03:08:44.070 --> 03:08:47.950
different ancillary service products, increasing volume. I mean, there's. I'm not.

03:08:47.990 --> 03:08:51.326
I can't give an entire list of all the possible solutions, but essentially

03:08:51.358 --> 03:08:55.770
providing the commission with possible ways to address that deficiency,

03:08:56.150 --> 03:08:59.330
the commission would consider that they could decide,

03:09:00.110 --> 03:09:03.454
okay, we like that solution, that we can move forward with that. If we

03:09:03.502 --> 03:09:07.006
look at the solutions, the costs associated with all of them to address a small

03:09:07.038 --> 03:09:11.198
shortfall is billions of dollars. It might say, okay, that's not reasonable.

03:09:11.254 --> 03:09:14.798
We can defer it a couple of years to the next and see if

03:09:14.814 --> 03:09:17.502
the issue persists and address it. Then.

03:09:17.646 --> 03:09:21.238
There's. We're trying to provide some flexibility in how the

03:09:21.254 --> 03:09:24.686
commission would address these deficiencies without tying the commission's hands on how they would

03:09:24.798 --> 03:09:28.478
necessarily resolve it. I think that's appreciated. I'm just wondering if

03:09:28.494 --> 03:09:32.250
there's word different than target we might be able to

03:09:32.550 --> 03:09:36.254
identify, get out Arthasaurus

03:09:36.302 --> 03:09:39.778
and see if there's something different. So I.

03:09:39.894 --> 03:09:43.082
I'm fairly certain we did not put the words target or mandatory or anything like

03:09:43.106 --> 03:09:46.538
that in the rules. We just had the request and the,

03:09:46.634 --> 03:09:50.066
when we had got the comments on the PFP and we wanted

03:09:50.178 --> 03:09:53.314
clarity on the staff position on what this currently is. I mean, we would not

03:09:53.402 --> 03:09:56.658
put target anywhere in the rule and there's no plan to do so at

03:09:56.674 --> 03:10:00.650
this time. And I think everyone I talked to agreed for

03:10:00.770 --> 03:10:04.426
95% of this process until if

03:10:04.498 --> 03:10:07.558
the analysis shows that we are short generation,

03:10:07.754 --> 03:10:11.382
I think there's one camp that believes that we get

03:10:11.406 --> 03:10:14.846
those options and then we decide if

03:10:15.038 --> 03:10:18.414
through a cost benefit analysis or whatever, whether or

03:10:18.422 --> 03:10:22.526
not we want to do anything. I think there's another side that believes if

03:10:22.598 --> 03:10:26.170
the equation doesn't work out and we are short generation,

03:10:26.470 --> 03:10:30.014
this rule needs to say we will take action and we will

03:10:30.062 --> 03:10:33.406
make the math, math. And if we're 3000 mw short,

03:10:33.478 --> 03:10:37.534
will find a way to incent the building of those 3000 mw.

03:10:37.662 --> 03:10:41.134
So I think, you know, I don't know what y'all's calls were like, but that's

03:10:41.182 --> 03:10:43.330
basically the gist of where I think a lot of this,

03:10:43.670 --> 03:10:47.502
again, the way you just talked about that, that's building of

03:10:47.526 --> 03:10:50.718
capacity. And as we move towards what ERCOT has

03:10:50.734 --> 03:10:53.490
said, as we're moving towards an energy based system,

03:10:53.990 --> 03:10:57.710
that adding that capacity is not always the

03:10:57.830 --> 03:11:01.446
way. We've seen that one in ten. It hasn't worked in TVA

03:11:01.478 --> 03:11:05.302
and PJM. Last winter, I think during winter Storm

03:11:05.326 --> 03:11:08.318
Yuri, we were probably well over a one in ten standard.

03:11:08.374 --> 03:11:11.830
So I'm with you on that.

03:11:11.950 --> 03:11:15.502
I feel like we should have the discretion to figure out what the tools are

03:11:15.526 --> 03:11:17.850
that we utilize. Besides,

03:11:18.190 --> 03:11:22.038
ORDC is already in there as a mechanism that can

03:11:22.134 --> 03:11:25.564
help solve this issue. And, you know, Dr.

03:11:25.702 --> 03:11:28.808
And others that will be coming in the future if we don't even know what

03:11:28.864 --> 03:11:31.460
tools we have yet, what they look like,

03:11:31.880 --> 03:11:35.096
I'd say keep the target until we know what the toolbox looks like.

03:11:35.248 --> 03:11:38.624
Chairman, excuse me, please. Yeah,

03:11:38.792 --> 03:11:42.720
so I agree with Commissioner Glotfelty that we should

03:11:42.840 --> 03:11:45.580
also use the EUE as a metric,

03:11:46.480 --> 03:11:50.040
not surpassing the three legged stool, as he called it,

03:11:50.160 --> 03:11:53.622
with duration and magnitude. But EUE is important. I think

03:11:53.686 --> 03:11:57.702
other markets are looking at it. SPP looks

03:11:57.726 --> 03:12:01.710
at expected unserved energy, normalized expected unserved

03:12:01.750 --> 03:12:05.478
energy might be a little bit better of a metric, just so that

03:12:05.534 --> 03:12:09.166
we know what EUE is as the system load changes.

03:12:09.358 --> 03:12:13.182
So I think it is a helpful additional perspective on the

03:12:13.206 --> 03:12:17.896
reliability standard with respect to Chairman

03:12:17.928 --> 03:12:19.900
Gleason's comments about,

03:12:20.840 --> 03:12:24.024
you know, what are the two camps saying and some of

03:12:24.032 --> 03:12:27.860
the questions from the other two commissioners.

03:12:29.720 --> 03:12:32.900
It's complicated, right. Because if you're deficient.

03:12:33.880 --> 03:12:37.064
And we're required to go out there

03:12:37.152 --> 03:12:40.712
and move around ancillaries or the ORDC,

03:12:40.816 --> 03:12:44.520
or the ancillary service demand. I mean,

03:12:44.640 --> 03:12:48.720
we could go do that. And we've done that, right? We've made

03:12:48.760 --> 03:12:52.088
changes to the LRDC to try to incent investment in

03:12:52.224 --> 03:12:55.608
generation. We added a new ancillary

03:12:55.664 --> 03:12:58.896
service, ecrs, that's put, you know, additional money

03:12:58.928 --> 03:13:01.608
in the market. We're going to have drs,

03:13:01.744 --> 03:13:06.728
obviously, real time popularization. But the fact of the matter is that

03:13:06.824 --> 03:13:10.436
even if we go make these adjustments to whatever

03:13:10.508 --> 03:13:13.588
existing market mechanism we have in the market, currently in our energy

03:13:13.644 --> 03:13:17.444
only market, and we add more revenue, that does not

03:13:17.492 --> 03:13:20.000
necessarily mean we're going to get more capacity.

03:13:20.860 --> 03:13:25.120
And I know that the answer is, well, in that case, you want a regulated

03:13:25.780 --> 03:13:29.180
market, but not even in a regulated market can we force capacity

03:13:29.220 --> 03:13:32.668
to be built. So I guess that's the part where

03:13:32.684 --> 03:13:36.290
it's like, and I appreciate your statement. Your statements is like, we can't tie our

03:13:36.330 --> 03:13:39.426
hands because we often do go

03:13:39.458 --> 03:13:43.114
in and make changes and all the changes have

03:13:43.202 --> 03:13:46.730
some kind of consequence, right? So we start turning the ancillary

03:13:46.770 --> 03:13:50.698
service market into a capacity market because all of a sudden we're deficient 2000.

03:13:50.714 --> 03:13:54.610
We're just going to start buying more ancillaries and removing more

03:13:54.650 --> 03:13:58.266
megawatts out of the market. Then the real time energy prices

03:13:58.298 --> 03:14:01.430
will increase. There's just, there's a lot, a lot there.

03:14:01.860 --> 03:14:05.520
If you just turn to the ancillaries ORDC,

03:14:07.300 --> 03:14:10.988
we've done a lot to the ORDC in the last several years. And the ancillary

03:14:11.084 --> 03:14:15.236
service demand curves, they're still in flight right now. So I'm

03:14:15.268 --> 03:14:18.476
not real sure and open to hearing about

03:14:18.628 --> 03:14:21.720
what some of those changes could be or

03:14:23.180 --> 03:14:26.520
how it could be implemented in a way that makes sense.

03:14:26.950 --> 03:14:30.094
But I come at it from the perspective of like,

03:14:30.142 --> 03:14:35.010
I don't want to tie our hands in a process either.

03:14:36.030 --> 03:14:39.438
And, you know, tie our hands, tie future

03:14:39.494 --> 03:14:42.990
commission's hands. And we need to remain cognizant

03:14:43.030 --> 03:14:46.502
of the fact that it's tough in this,

03:14:46.606 --> 03:14:51.182
you know, in a capacity market. You know, and I've

03:14:51.206 --> 03:14:55.216
covered MISO and SPP, different versions of capacity markets

03:14:55.368 --> 03:14:59.152
than PJM. If you're wanting to try

03:14:59.176 --> 03:15:02.368
to create an opportunity to get more capacity built, well,

03:15:02.384 --> 03:15:06.080
then you go and increase

03:15:06.160 --> 03:15:08.560
or add planning reserve margin requirements,

03:15:08.720 --> 03:15:12.392
or create a demand curve like the reliability

03:15:12.456 --> 03:15:15.616
demand base curve. We have what we have in our market with

03:15:15.688 --> 03:15:19.732
more tools to come. But it's just, I don't

03:15:19.756 --> 03:15:23.428
know that we can be in a position where we're just constantly turning levers

03:15:23.484 --> 03:15:27.220
with the existing tools and expecting to get that deficiency

03:15:27.260 --> 03:15:31.220
because it is a competitive market and we can't,

03:15:31.340 --> 03:15:34.636
even if we put more money in the market, that doesn't necessarily mean we're just

03:15:34.668 --> 03:15:38.156
going to get more power generation. It doesn't always equal

03:15:38.188 --> 03:15:42.120
that. So, anyway, just some comments.

03:15:44.350 --> 03:15:47.702
So, you know, for me, it's a process, and I look at it from

03:15:47.806 --> 03:15:51.358
a process standpoint. And, you know, our starting point,

03:15:51.454 --> 03:15:54.830
you know, further to your question, you know, about what's changed and what's

03:15:54.870 --> 03:15:59.078
different is, you know, the standard that we are developing,

03:15:59.214 --> 03:16:02.622
you know, is 3d. It's much more robust with

03:16:02.646 --> 03:16:06.182
the intent of not having the big fluctuations

03:16:06.206 --> 03:16:09.300
that we saw in the past, the scarcity market, something that is,

03:16:09.430 --> 03:16:12.856
you know, is more stable.

03:16:13.048 --> 03:16:16.712
So our starting place is better. You know, the staff putting

03:16:16.736 --> 03:16:20.340
the two year timeframe in, which provides that

03:16:21.120 --> 03:16:24.792
appropriate amount of time to gather a data set that

03:16:24.856 --> 03:16:28.904
is representative and something that we feel confident that we can look at

03:16:28.992 --> 03:16:32.240
and get a good timeframe and a good representative

03:16:32.320 --> 03:16:38.736
sample, if you will. And then, of course, the ERCOT

03:16:38.768 --> 03:16:42.192
then would go and publish the

03:16:42.216 --> 03:16:46.384
proposed modeling assumptions, but then the staff

03:16:46.552 --> 03:16:50.576
interjecting the next step, which is providing

03:16:50.608 --> 03:16:55.504
the opportunity for the market participants to come in and have

03:16:55.552 --> 03:16:59.232
input over those modeling assumptions, which impacts the

03:16:59.256 --> 03:17:03.284
final outcome. ERCOT does the assessment,

03:17:03.452 --> 03:17:06.720
and then, of course, as part of this assessment,

03:17:07.300 --> 03:17:11.100
ERCOT would look to see, okay, are we meeting the standard?

03:17:11.260 --> 03:17:16.316
And if not as part of that assessment, we'll then provide the recommendations and

03:17:16.348 --> 03:17:20.260
then interjecting another opportunity for stakeholder

03:17:20.340 --> 03:17:23.956
comment on the recommendations. And then with all that,

03:17:24.028 --> 03:17:27.258
including now reporting the, the unserved

03:17:27.314 --> 03:17:30.682
energy, which is another data point,

03:17:30.746 --> 03:17:34.754
it comes to the commission. And, you know, from my standpoint,

03:17:34.922 --> 03:17:38.698
you know, that is the human intervention part, that is the part

03:17:38.754 --> 03:17:42.594
of engagement and leadership by the commissioners.

03:17:42.642 --> 03:17:45.970
And what, quite frankly, I see as my

03:17:46.010 --> 03:17:49.190
job to be able to take, you know,

03:17:49.570 --> 03:17:53.720
this data that has been established, that has been gathered,

03:17:54.020 --> 03:17:58.196
the assessment that's been done, the recommendations that have been provided,

03:17:58.388 --> 03:18:02.692
and take thoughtful and deliberate action. And so,

03:18:02.796 --> 03:18:07.188
you know, I'm more focused on the process. Is the process

03:18:07.364 --> 03:18:09.480
robust, which I feel like it is,

03:18:10.420 --> 03:18:14.044
is the process something that is clearly outlined

03:18:14.172 --> 03:18:17.600
and has all of the necessary steps, which I feel like it does,

03:18:18.430 --> 03:18:21.774
and, you know, use that

03:18:21.862 --> 03:18:25.406
as, you know, what we are really kind of

03:18:25.438 --> 03:18:28.870
focusing on as the key to our success. Now,

03:18:28.990 --> 03:18:33.158
I have heard, as many of you all have, from a lot of people who

03:18:33.254 --> 03:18:37.566
have commented on this, and some of the stakeholders have

03:18:37.598 --> 03:18:41.118
said that they are concerned that if this last

03:18:41.214 --> 03:18:45.000
step, this requirement that we actually take

03:18:45.040 --> 03:18:46.500
it up and look at it,

03:18:48.400 --> 03:18:52.728
it needs to be something that is specifically

03:18:52.784 --> 03:18:55.660
required by the rule. And so,

03:18:56.080 --> 03:18:59.460
I mean, my only suggestion at this point would be,

03:18:59.880 --> 03:19:03.800
do we need to maybe clarify

03:19:03.840 --> 03:19:06.992
this final step in the process and the rule? I know that we've got the

03:19:07.016 --> 03:19:12.066
language in there right now that we typically use in terms of when the Commission

03:19:12.258 --> 03:19:15.978
will consider something and then determine whether or not they want to take action,

03:19:16.034 --> 03:19:19.410
but that would be my only thought. And again, it is, because that is

03:19:19.450 --> 03:19:22.554
what some of the folks that I've talked with have said,

03:19:22.642 --> 03:19:26.466
at least in their mind, would give them more confidence,

03:19:26.658 --> 03:19:30.082
I guess, in the process. (item:35:David Smeltzer gives clarification on memo, 54584) Yeah, that's correct

03:19:30.106 --> 03:19:33.986
Commissioner. When we were discussing this in briefing, I think you were asking

03:19:34.098 --> 03:19:37.148
if there were different words we needed to use. And I think that right now

03:19:37.164 --> 03:19:41.284
it says the commission will determine whether or not market changes are necessary.

03:19:41.332 --> 03:19:45.372
And I think that folks that are used to reading statutory language

03:19:45.476 --> 03:19:49.468
might like to see a shall clause in there. And so with the commission's

03:19:49.644 --> 03:19:53.500
drafting practices, we use may and must when we're talking about other folks,

03:19:53.540 --> 03:19:56.480
and we use may and will when we're talking about ourselves.

03:19:57.140 --> 03:20:00.340
If we can do something, we use may if we are going to do

03:20:00.380 --> 03:20:04.356
something, we use will to reflect fact that the Commission intends to do

03:20:04.388 --> 03:20:07.636
something we don't use must or shall with regards

03:20:07.668 --> 03:20:10.676
to ourselves, because you guys could always just good cause accept out of the requirement

03:20:10.708 --> 03:20:14.284
on yourself anyway. And so when folks read, the Commission will

03:20:14.332 --> 03:20:18.228
determine that is read in the same way that you

03:20:18.244 --> 03:20:21.828
would read some other party shall determine or whatever. So to

03:20:21.844 --> 03:20:25.668
the extent that there's concern that the numbers would just come in and we would

03:20:25.684 --> 03:20:29.712
never look at them, this rule is designed to have the Commission at

03:20:29.736 --> 03:20:33.088
the end make a proactive determination about whether or not

03:20:33.144 --> 03:20:36.820
market changes are going to be required in response to

03:20:37.200 --> 03:20:40.440
recommendations from our CoD if there's a shortfall. So commission

03:20:40.520 --> 03:20:44.640
staff believes that it's taken care of, but we are happy to take another

03:20:44.800 --> 03:20:48.840
look at the language and provide any recommended edits to really

03:20:48.880 --> 03:20:52.000
button that up by next session if we, if we think, or by next open

03:20:52.040 --> 03:20:55.386
meeting if we think that it's necessary. Thank you. And as part of that

03:20:55.418 --> 03:20:59.370
process, you talked about, you know, cost benefit

03:20:59.410 --> 03:21:03.122
analysis, I guess, being done by ERCOT. Right. And that being subject

03:21:03.186 --> 03:21:05.390
to stakeholder comment as well.

03:21:06.290 --> 03:21:10.630
I think it's important that the IMM is also involved in the cost benefit analysis

03:21:11.490 --> 03:21:14.550
evaluation in that process.

03:21:15.450 --> 03:21:19.298
Just to clarify, are you wanting a joint cost benefit study from ERCOT?

03:21:19.314 --> 03:21:22.792
And IMM, or separate, like, two separate views on the cost of the

03:21:22.816 --> 03:21:26.528
different solutions. I mean,

03:21:26.584 --> 03:21:29.792
in some ways, I feel like you need another pair of eyes looking at the

03:21:29.816 --> 03:21:33.232
cost in that analysis that's being prepared. So,

03:21:33.256 --> 03:21:36.656
yes, joint. I mean, we're having them do a joint for the

03:21:36.688 --> 03:21:38.980
PCM cost updated cost assessment.

03:21:41.120 --> 03:21:44.616
The cost benefit analysis is a critical component of this

03:21:44.648 --> 03:21:49.766
entire process. So I want to make sure that it's a developed

03:21:49.838 --> 03:21:53.170
in a robust manner and the opportunity for. Stakeholder comment.

03:21:55.990 --> 03:21:58.854
I will say, you know, we have a lot of changes happening in the market,

03:21:58.902 --> 03:22:02.262
a lot of loads coming on, and the market's in flux. So I think

03:22:02.446 --> 03:22:06.230
two years makes sense to be going through this exercise. But I'm just

03:22:06.270 --> 03:22:09.694
wondering if ultimately, the commission's going

03:22:09.702 --> 03:22:13.280
to end up on a two year resource

03:22:13.320 --> 03:22:17.020
adequacy on a cadence of a two year resource adequacy debate

03:22:17.600 --> 03:22:21.160
going forward, you know, because, I mean,

03:22:21.240 --> 03:22:25.088
I could see that happening. And if. I'm just wondering if that's

03:22:25.104 --> 03:22:28.728
the ultimate result of this process, I have

03:22:28.744 --> 03:22:32.040
that question, too. Just how long these studies will they take

03:22:32.200 --> 03:22:35.920
to. Will you finish one and start immediately again?

03:22:36.080 --> 03:22:37.660
Are you going to be constantly tied?

03:22:39.530 --> 03:22:42.434
So, I mean, I'm happy to punt that question to ERCOT if they have someone

03:22:42.482 --> 03:22:46.626
here, but my understanding is that, I mean, this entire cycle would be completed

03:22:46.818 --> 03:22:49.730
well within a year. It's not as if it would roll over into the next

03:22:49.770 --> 03:22:52.850
year. I'm almost envisioning if we started this in 2026,

03:22:52.930 --> 03:22:56.274
we would have final results and something that could even be included in the legislative

03:22:56.322 --> 03:23:00.146
report, in particular,

03:23:00.218 --> 03:23:03.110
for the first cycle, I would think you'd want to do two years.

03:23:05.860 --> 03:23:08.996
(item:35:Barksdale English on PCM cost benefit analysis, 54584) Excuse me, Commissioner Cobos. Just want to clarify

03:23:09.028 --> 03:23:12.716
something. The PCM cost benefit analysis are being

03:23:12.748 --> 03:23:16.572
run concurrently, but independently by the IMM and

03:23:16.596 --> 03:23:19.916
ERCOT. So we'll get two sets of analyses from that. And so,

03:23:19.948 --> 03:23:23.428
just for clarification, for our edits here,

03:23:23.604 --> 03:23:26.812
are you seeking to have ERCOT and IMM

03:23:26.916 --> 03:23:30.326
collaborate together on one analysis, or are you asking

03:23:30.358 --> 03:23:33.290
for two separate analyses? That same process sounds right,

03:23:34.430 --> 03:23:38.430
yeah. The parallel. Okay, thank you. The same process you're using for PCM. I appreciate

03:23:38.470 --> 03:23:42.238
that clarification, and thank you for the clarification. It's been a

03:23:42.254 --> 03:23:46.046
while since I thought about that, and we'll have time between now

03:23:46.078 --> 03:23:49.606
and next open meeting when we have to adopt something. We can talk to IMM

03:23:49.678 --> 03:23:52.930
as well and see what their thoughts are.

03:23:56.640 --> 03:23:59.180
Anything else? Not on this one.

03:24:00.240 --> 03:24:03.380
Werner, Chris, David do you all need anything else from us?

03:24:04.000 --> 03:24:07.576
No, I think we have what we need to get a PGRR drafted.

03:24:07.688 --> 03:24:11.260
Okay. Thank you, all of you, for your work on this.

03:24:11.560 --> 03:24:12.460
Truly.

03:24:17.720 --> 03:24:22.646
Okay. (item:36:Chairman Gleeson lays out Project No. 55837) That'll bring us to Item No. 36, Docket 55837,

03:24:22.718 --> 03:24:26.142
review of value of lost load in the ERCOT market.

03:24:26.326 --> 03:24:29.542
I will just note we'll probably have to take another short break

03:24:29.606 --> 03:24:33.718
here, like 130 ish for

03:24:33.734 --> 03:24:36.838
a few minutes, probably 10 or 15 minutes, and then we'll pick it back up

03:24:36.854 --> 03:24:38.050
if we're not done by then.

03:24:43.510 --> 03:24:47.900
Hello again. (item:36:Commission Staff's Chris Brown with update on VOLL study, 55837) Chris Brown, Commission Staff.

03:24:48.280 --> 03:24:51.940
Just a very quick verbal update on the ongoing VOLL study.

03:24:52.520 --> 03:24:56.216
So, the survey of customers in the ERCOT region wrapped up earlier this

03:24:56.248 --> 03:24:59.968
summer. Brattle has been working on the report

03:25:00.104 --> 03:25:03.736
and the results of that survey. Staff has received a draft of this and we're

03:25:03.768 --> 03:25:07.000
working through it. And we'll plan to file a memo

03:25:07.040 --> 03:25:10.712
next week for the August 29 open meeting, reviewing the results

03:25:10.816 --> 03:25:14.178
of the survey and providing some recommendations on where to

03:25:14.194 --> 03:25:17.818
go with the volume value that will

03:25:17.834 --> 03:25:22.510
be used for ongoing studies and cost benefit analyses,

03:25:22.890 --> 03:25:26.082
planning models, things of that nature. In kind

03:25:26.106 --> 03:25:29.834
of your first look at what came in, was there anything surprising, or did it

03:25:29.922 --> 03:25:32.270
pretty much fall in line with our expectations?

03:25:33.010 --> 03:25:37.106
Nothing surprising. We're still working through more, some of the more

03:25:37.138 --> 03:25:40.832
technical details, but we'll definitely have a

03:25:40.856 --> 03:25:42.860
better review at the next open meeting.

03:25:45.160 --> 03:25:48.336
Questions? Okay,

03:25:48.488 --> 03:25:51.992
thank you. Thanks, Chris. (item:37:Chairman Gleeson lays out Project No. 55000) So,

03:25:52.016 --> 03:25:55.420
Item No. 37 is Docket No. 55000.

03:25:56.160 --> 03:25:59.096
Performance credit mechanism. Werner?

03:25:59.208 --> 03:25:59.980
Welcome.

03:26:02.840 --> 03:26:06.388
(item:37:Werner Roth on PCM design parameters, 55000) So, because my reliability standard memo didn't cause enough controversy and

03:26:06.404 --> 03:26:09.644
phone calls. I figured we would also file recommendations on some

03:26:09.652 --> 03:26:11.964
of the PCM design parameters for this open meeting.

03:26:12.132 --> 03:26:15.980
So, to allow for the Commission to have multiple meetings to discuss

03:26:16.060 --> 03:26:19.748
the design parameters, staff has provided its initial recommendations on what the

03:26:19.764 --> 03:26:22.320
final values for these design parameters should be.

03:26:22.660 --> 03:26:26.188
I don't plan to walk through all 37 design parameters today,

03:26:26.324 --> 03:26:30.080
but I did want to flag one recommendation in particular that will have notable

03:26:30.460 --> 03:26:34.206
ramifications on the outcomes of the PCM, namely design parameter number

03:26:34.238 --> 03:26:37.650
20, which is the framework utilized to comply with the net cost cap.

03:26:38.430 --> 03:26:41.646
So, throughout this process and in the workshop that E3 held

03:26:41.678 --> 03:26:45.886
at ERCOT, E3 has been determining the net cost by calculating

03:26:45.918 --> 03:26:50.166
the difference between a world where the PCM is in place to incentivize sufficient capacity

03:26:50.198 --> 03:26:53.662
to meet a reliability standard, and a non PCM world

03:26:53.726 --> 03:26:57.278
that has been that where we've added or retired enough capacity to be

03:26:57.294 --> 03:27:01.030
at the long run market equal of the market design as it currently exists.

03:27:01.490 --> 03:27:04.986
From a peer modeling perspective, it's a reasonable way to determine

03:27:05.058 --> 03:27:07.978
the net difference between the cost of the PCM and one without it. And if

03:27:07.994 --> 03:27:11.430
I were in their position, I probably would have recommended a similar methodology.

03:27:12.010 --> 03:27:15.538
However, the very first PCM guardrail statute requires that

03:27:15.554 --> 03:27:19.138
the commission ensure that the net costs to the ERCOT market

03:27:19.194 --> 03:27:22.110
of the PCM does not exceed $1 billion annually.

03:27:22.890 --> 03:27:26.946
Any counterfactual non PCM world will rely on several assumptions

03:27:27.058 --> 03:27:30.642
which make will make ensuring compliance with this provision and statute extremely

03:27:30.666 --> 03:27:34.306
difficult in staff's view. The only way that we can ensure

03:27:34.418 --> 03:27:38.106
that we are able to satisfy this provision is to cap the compensation for

03:27:38.138 --> 03:27:42.154
performance credits at a firm $1 billion annually, with the allowed adjustments

03:27:42.202 --> 03:27:44.510
for increases in that peak and inflation.

03:27:45.370 --> 03:27:48.938
This does come with a couple of downsides. It does potentially leave

03:27:48.994 --> 03:27:52.114
money on the table, as we are not accounting for the energy and ancillary service

03:27:52.162 --> 03:27:55.570
savings from having the PCM versus not having it. And most notably,

03:27:55.650 --> 03:27:59.242
it would limit the ability of the PCM to achieve the reliability standard by itself.

03:27:59.306 --> 03:28:02.190
So further actions may be needed to do that in the future.

03:28:02.890 --> 03:28:06.058
Again, no formal action is required today, but we will need

03:28:06.074 --> 03:28:09.562
for the Commission to make its final decision on the 37 design parameters at the

03:28:09.586 --> 03:28:12.858
next open meeting so that we can give ERCOT and the IMM sufficient time to

03:28:12.874 --> 03:28:15.270
conduct their respective benefits cost assessments.

03:28:15.690 --> 03:28:19.266
My understanding is that ERCOT and E3 will be filing their report at their

03:28:19.298 --> 03:28:22.742
recommendations soon, within the next week or so, and commission

03:28:22.806 --> 03:28:26.150
staff will file its final recommendations prior to the August 29 open

03:28:26.190 --> 03:28:29.622
meeting. With that, I'm happy to take any questions. So I'll say that

03:28:29.646 --> 03:28:32.878
in the last week I've heard the term counterfactual more than I

03:28:32.894 --> 03:28:36.038
had heard in the previous rest of my life, and so

03:28:36.134 --> 03:28:39.494
appreciate that. So just to talk about the statute.

03:28:39.542 --> 03:28:43.342
So the statute requires us to ensure that the net cost does

03:28:43.366 --> 03:28:47.036
not exceed $1 billion, and what you're saying is the best

03:28:47.068 --> 03:28:49.988
way to do that is to put a gross cap on the PCs of a

03:28:50.004 --> 03:28:54.012
billion dollars. I'm saying that from the staff position right now, that is the only

03:28:54.036 --> 03:28:57.572
way to ensure that we are complying with that, because any counterfactual is

03:28:57.596 --> 03:29:00.876
going to have assumptions that could be people

03:29:00.908 --> 03:29:03.964
can poke and prod at and pull apart, and then, oh, is that really what

03:29:03.972 --> 03:29:08.640
the world would have looked like if the MPCM hadn't been in place? And while

03:29:08.980 --> 03:29:12.676
the report isn't finally at, I just look at the counterfactual from the market

03:29:12.708 --> 03:29:16.148
equilibrium and what e three's final report is going to be. That assumes the energy

03:29:16.204 --> 03:29:20.236
only world results in a lole of 3.0.

03:29:20.268 --> 03:29:24.116
Not 0.3, but 3.0, essentially resulting in about 30 loss

03:29:24.148 --> 03:29:27.700
of load events per decade. I cannot envision any world where the Commission

03:29:27.780 --> 03:29:31.564
would allow the market to achieve that level of reliability in

03:29:31.572 --> 03:29:34.956
the long run. And so the idea that we wouldn't make any changes to

03:29:35.028 --> 03:29:38.790
avoid that outcome makes it more that quick. That counterfactual

03:29:38.830 --> 03:29:42.118
example is questionable, and I

03:29:42.134 --> 03:29:45.742
think that would come with any counterfactual example where you're comparing what

03:29:45.766 --> 03:29:48.450
we have versus what we might have had if this hadn't been in place.

03:29:54.510 --> 03:29:58.910
Can I just ask, like procedural? So, next meeting,

03:29:58.990 --> 03:30:02.530
we're going to approve these. Are we going to approve them as a,

03:30:04.440 --> 03:30:07.712
like, take staff recommendations and do we approve it like that,

03:30:07.736 --> 03:30:10.140
or are we going to go piece by piece, or how are we.

03:30:10.480 --> 03:30:13.544
Yeah, I think my preference would be, we'll have their recommendation.

03:30:13.592 --> 03:30:16.872
If there needs to be any change to what they're recommending, I think that's where

03:30:16.896 --> 03:30:19.220
we'd focus our conversation. Thanks.

03:30:21.280 --> 03:30:26.344
Yeah, I mean, I don't have any real specific feedback.

03:30:26.392 --> 03:30:30.408
I think two areas that I discussed with staff was just the allocation of 12

03:30:30.464 --> 03:30:33.696
hours to both the Winter and the Spring. It seems like you'd want to allocate

03:30:33.728 --> 03:30:37.312
more hours to the Winter, and that's just something we can

03:30:37.336 --> 03:30:40.768
talk about next open meeting. You know, Winter seems to

03:30:40.784 --> 03:30:44.344
be the riskier part of the year and having the

03:30:44.352 --> 03:30:47.576
same allocation there. Just had some questions

03:30:47.608 --> 03:30:51.128
about that and then the hours

03:30:51.224 --> 03:30:55.162
with the metric used to determine the PC hours. Hours with

03:30:55.186 --> 03:30:59.350
lowest surplus of total available generation capacity relative to load.

03:31:01.210 --> 03:31:05.070
You know, that's an area that I had some questions about as well, just because

03:31:06.370 --> 03:31:09.906
our blueprint really focused on net peak

03:31:09.938 --> 03:31:13.658
load. And I'm just wondering if there's any unintended consequences.

03:31:13.714 --> 03:31:17.362
If you're looking at the

03:31:17.386 --> 03:31:21.310
lowest surplus of total available capacity is, you know, you have

03:31:23.330 --> 03:31:26.418
maybe some potential power or power plants that are not available.

03:31:26.514 --> 03:31:29.666
What does that mean? For various reasons, but, you know, we can

03:31:29.698 --> 03:31:33.490
have a conversation about that. Those were two areas that I just had some questions

03:31:33.530 --> 03:31:36.498
on and with staff.

03:31:36.634 --> 03:31:39.834
But other than that, the rest of my commentary can wait till next

03:31:39.882 --> 03:31:40.630
opening.

03:31:45.980 --> 03:31:47.000
Thanks y'all.

03:31:56.180 --> 03:32:02.004
Do we need to take a break or are we? 30

03:32:02.052 --> 03:32:02.640
minutes?

03:32:05.260 --> 03:32:08.200
(item:38:Chairman Gleeson lays out Project No. 56896) So that will bring us to Item 38,

03:32:08.820 --> 03:32:12.510
Docket 56896. Texas Energy Fund,

03:32:12.590 --> 03:32:15.950
an ERCOT loan program reports and filings. We have an update

03:32:15.990 --> 03:32:19.190
from Staff. (item:38:Barksdale English with update on Texas Energy Fund 56896) Good morning Commissioners. Oh wait,

03:32:19.230 --> 03:32:20.570
it's not morning anymore.

03:32:23.310 --> 03:32:27.462
So staff filed a memo laying out its process for

03:32:27.566 --> 03:32:30.650
how we will bring to you at the next open meeting.

03:32:30.950 --> 03:32:34.742
Recommended Portfolio of Applications for the Texas Energy

03:32:34.806 --> 03:32:38.670
Fund in ERCOT loan program for your

03:32:38.790 --> 03:32:42.318
consideration to invite those applications

03:32:42.374 --> 03:32:47.126
into the due diligence process. In the memo, we outlined

03:32:47.318 --> 03:32:51.406
that we've received more than 70 applications seeking

03:32:51.438 --> 03:32:56.182
more than $24 billion of funding, with over 38,000

03:32:56.246 --> 03:33:00.090
potential new generation. As we go through those applications,

03:33:00.630 --> 03:33:04.220
we will be assessing them on the each application on

03:33:04.260 --> 03:33:08.120
the more than 60 questions that they had to answer through the application process.

03:33:08.620 --> 03:33:12.404
We've kind of compiled those 60 questions into

03:33:12.452 --> 03:33:16.388
four basic categories, the first being related

03:33:16.444 --> 03:33:19.476
to project technical and regional attributes, the second,

03:33:19.548 --> 03:33:22.692
project financial attributes, the third,

03:33:22.756 --> 03:33:26.652
application sponsor history, and fourth, the application

03:33:26.716 --> 03:33:30.028
sponsor financial characteristics. We will assess

03:33:30.084 --> 03:33:33.564
each of those applications individually, relative to all the other

03:33:33.612 --> 03:33:36.972
applications on each of those four metrics. And then,

03:33:37.036 --> 03:33:40.172
in individual conversations that we've had with each

03:33:40.196 --> 03:33:44.524
of your offices, we've gleaned some common

03:33:44.572 --> 03:33:47.732
overlaps in public policy priorities that your

03:33:47.756 --> 03:33:51.740
offices have identified, which will include the diversity

03:33:51.780 --> 03:33:55.110
of the applicant types. Diversity and I siting location,

03:33:55.610 --> 03:33:58.950
the speed to market that the project is proposing,

03:33:59.450 --> 03:34:02.994
the ability of that project to relieve known transmission constraints,

03:34:03.122 --> 03:34:06.666
and the diversity of generation technology types.

03:34:06.818 --> 03:34:10.642
And so we will take each of those five policy priorities and layer

03:34:10.666 --> 03:34:13.866
them on top of those four basic categories in order to develop

03:34:13.938 --> 03:34:17.810
the recommended portfolio. Next week, we will present

03:34:17.890 --> 03:34:20.932
you individually with binders,

03:34:20.996 --> 03:34:23.748
either in paper or in electronic format,

03:34:23.924 --> 03:34:27.932
that will show you the assessment of this information. And I will note

03:34:27.956 --> 03:34:31.332
that all the information that's been provided in those applications are

03:34:31.356 --> 03:34:34.364
confidential by law. And so we're not,

03:34:34.532 --> 03:34:38.100
you know, able to disclose a whole lot of information publicly about

03:34:38.140 --> 03:34:40.920
the, about those applications at this time.

03:34:41.620 --> 03:34:45.004
But we'll go through and gauge your feedback

03:34:45.052 --> 03:34:48.890
on, on the recommended portfolio that we'll present to you next week.

03:34:49.990 --> 03:34:54.782
And then at the August 29 meeting, we'll consolidate

03:34:54.806 --> 03:34:58.406
all the feedback that you've provided and present publicly the

03:34:58.438 --> 03:35:02.102
portfolio for your consideration. Happy to talk about

03:35:02.126 --> 03:35:05.310
any other process questions that you'd like and any

03:35:05.350 --> 03:35:08.926
other questions that I can answer. So, at the 29th

03:35:08.958 --> 03:35:13.112
Open Meeting, how do you envision the approval process going? Will we be

03:35:13.256 --> 03:35:16.424
to Commissioner Glotfelty's previous point.

03:35:16.552 --> 03:35:19.688
Obviously, a lot of this is confidential, so I imagine we

03:35:19.704 --> 03:35:22.808
won't be going project by project. So how do you envision that process on the

03:35:22.824 --> 03:35:26.184
29th working? Thank you. So we will have

03:35:26.272 --> 03:35:29.620
a portfolio of applications presented for your approval

03:35:30.320 --> 03:35:33.860
in the meeting. We'll disclose the name of the applicant,

03:35:34.360 --> 03:35:38.718
the megawatts that the project represents,

03:35:38.894 --> 03:35:42.798
the general location of that project designated

03:35:42.854 --> 03:35:45.290
by load zone, the ERCOT load zone.

03:35:45.750 --> 03:35:49.590
And then we'll also have some basic kind of ranking criteria

03:35:49.710 --> 03:35:53.542
and just kind of how that application satisfies each

03:35:53.566 --> 03:35:57.502
of the kind of four basic criteria, as well as the remaining

03:35:57.646 --> 03:36:00.930
policy priorities that you all have identified for us.

03:36:01.270 --> 03:36:04.870
Our hope is that you'll be very happy with the portfolio

03:36:04.910 --> 03:36:08.502
that we present to you and that you can approve an order that

03:36:08.526 --> 03:36:13.014
would delegate to connie the ability to enter

03:36:13.062 --> 03:36:16.318
into a loan agreement with those applications,

03:36:16.414 --> 03:36:20.422
provided that the project and the applicant satisfies

03:36:20.526 --> 03:36:23.662
the due diligence requirements that they will be

03:36:23.686 --> 03:36:26.930
invited to enter into following that vote.

03:36:27.310 --> 03:36:31.006
So a delegation, similar to what we do for contracting purposes, it would be exactly

03:36:31.038 --> 03:36:34.526
like that. And I was just to clarify

03:36:34.558 --> 03:36:38.410
for the public, once we go through this process,

03:36:39.310 --> 03:36:43.006
the other applicants that were not selected are not just sitting

03:36:43.038 --> 03:36:46.238
there waiting. If one of them falls out, this is the

03:36:46.294 --> 03:36:50.342
end of this process. If the commission

03:36:50.526 --> 03:36:54.230
would have excess money or the legislature asked us to do it again,

03:36:54.350 --> 03:36:58.444
we would go through another RFP process. Correct. So the

03:36:58.492 --> 03:37:02.116
action that we contemplate you all taking at the August 29

03:37:02.148 --> 03:37:07.404
open meeting would not make a formal designation

03:37:07.452 --> 03:37:11.236
or declaration on any of the applicants that wouldn't be invited to

03:37:11.268 --> 03:37:14.828
due diligence. So because the legislature

03:37:14.884 --> 03:37:17.680
has appropriated five of the $10 billion,

03:37:19.580 --> 03:37:23.630
we're looking for the most amount of flexible, both from the

03:37:23.670 --> 03:37:27.150
applicants as well as from the commission, in order to

03:37:27.230 --> 03:37:31.014
kind of keep the trains moving as quickly as possible, because we

03:37:31.022 --> 03:37:34.062
have a lot of statutory deadlines that we're trying to hit here, as well as

03:37:34.086 --> 03:37:38.134
a lot of legislative intent

03:37:38.222 --> 03:37:42.326
to try to optimize the number of megawatts that

03:37:42.358 --> 03:37:45.290
we're getting into the ERCOT region through this program.

03:37:46.070 --> 03:37:49.226
So, Barsdale, on that, you know, we've been

03:37:49.258 --> 03:37:52.362
given, I would say, some guidance that I think

03:37:52.386 --> 03:37:56.066
it's likely we'll get the other 5 billion. Is there a timeline

03:37:56.138 --> 03:37:59.810
for where, you know, approving the most,

03:37:59.930 --> 03:38:04.106
the maximum amount of megawatts and dollar amount? We would need to know that

03:38:04.138 --> 03:38:07.190
that money is coming to the commission in order to make those awards.

03:38:07.850 --> 03:38:11.378
Thanks, chairman. It's probably

03:38:11.434 --> 03:38:15.282
the end of February. Beginning of March is probably about the last

03:38:15.426 --> 03:38:18.938
time that we can really make any substantive pivots.

03:38:19.074 --> 03:38:22.474
And I arrive at that date for the following

03:38:22.562 --> 03:38:26.258
reason. We know that the due diligence process could take up

03:38:26.274 --> 03:38:30.250
to eight months, and our consultant

03:38:30.290 --> 03:38:34.106
has advised us to leave about 60 days

03:38:34.218 --> 03:38:37.554
for execution of a loan agreement, as well

03:38:37.602 --> 03:38:41.990
as kind of the back end administrative processing in order for the

03:38:42.030 --> 03:38:45.406
first loan distributions to be made by the end of the year. So that really

03:38:45.478 --> 03:38:49.678
kind of backs us into that end of February, beginning of March

03:38:49.734 --> 03:38:50.530
timeline.

03:38:53.150 --> 03:38:57.250
Okay. Any other questions? Thank you Barksdale.

03:38:59.670 --> 03:39:03.086
(item:41:Chairman Gleeson lays out Project No. 53911) So that will bring us to Item 41. That's Docket

03:39:03.118 --> 03:39:06.790
No. 53911, aggregate distributed energy

03:39:06.870 --> 03:39:09.950
resources ERCOT pilot project. And Commissioner Glotfelty,

03:39:09.990 --> 03:39:13.010
you filed a memo. (item:41:Commissioner Glotfelty lays out his memo on ADER ERCOT pilot project, 53911) I just wanted to say,

03:39:13.590 --> 03:39:17.810
obviously Commissioner McAdams is not here anymore. We are.

03:39:18.150 --> 03:39:22.454
This is a valuable, potentially a really valuable product

03:39:22.502 --> 03:39:25.862
in the market. This is. This memo is to keep

03:39:25.886 --> 03:39:29.806
the trains running. We don't know what on time is. This is not a directive

03:39:29.838 --> 03:39:33.056
of staff. This is a directive of like, how are we going to keep this

03:39:33.088 --> 03:39:36.776
thing going? So I put these questions out there, not for

03:39:36.928 --> 03:39:40.912
resolution today, but really for the

03:39:41.016 --> 03:39:44.632
task force to keep working, to come back to us with answers to these questions

03:39:44.656 --> 03:39:48.860
and to figure out how we could, you know, keep utilizing

03:39:49.800 --> 03:39:53.900
this pilot project or have it become an official part of the market.

03:39:54.400 --> 03:39:57.774
Okay. Yeah. Just kind of keep us apprised of what you may need from us.

03:39:57.822 --> 03:39:59.250
Yeah. All right. Thank you.

03:40:01.790 --> 03:40:05.290
So next, I think that takes us to item 49.

03:40:05.710 --> 03:40:09.958
There's no docket number. It's discussion possible action on electric reliability,

03:40:10.054 --> 03:40:14.054
market development, power to choose, ERCOT oversight, transmission planning, construction and cost

03:40:14.102 --> 03:40:17.694
recovery. So Connie, I think you

03:40:17.702 --> 03:40:21.710
had an update maybe on Permian. (item:49:Connie Corona gives update on Permian workshop) Yes, there just

03:40:21.750 --> 03:40:25.600
a reminder of workshop on August 22,

03:40:26.060 --> 03:40:30.452
one week from today in this room at 9:30 to

03:40:30.516 --> 03:40:32.680
review the plan for the Permian basin.

03:40:33.780 --> 03:40:39.068
Okay, thank you for that. Did you have a 47?

03:40:39.244 --> 03:40:42.680
(item:47:Chairman Gleeson lays out Project No. 41210) Okay, we'll go back to Item No. 47.

03:40:42.980 --> 03:40:46.396
That is Project No. 41210.

03:40:46.468 --> 03:40:49.854
Information related to the Southwest Power Region State Committee.

03:40:50.022 --> 03:40:53.130
All right. (item:47:Commissioner Cobos provides update on SPP RSC, 41210) Thank you, Chairman Gleeson. I just wanted to provide a brief update.

03:40:53.590 --> 03:40:58.454
On August 5, the SPP RSC meeting or

03:40:58.502 --> 03:41:02.590
committee met, and the RSC and ultimately

03:41:02.630 --> 03:41:06.070
the board of SPP approved an increase

03:41:06.150 --> 03:41:09.798
in the summer PRM that would take effect in summer

03:41:09.934 --> 03:41:14.012
26 from 15% to 16%,

03:41:14.166 --> 03:41:17.960
and then established a winter PRM of 36%

03:41:18.080 --> 03:41:21.936
that would take effect the Winter of '26-'27

03:41:22.048 --> 03:41:25.020
and would apply to '27-'28 Winter seasons.

03:41:26.320 --> 03:41:30.488
These PRM decisions were

03:41:30.544 --> 03:41:33.780
passed overwhelmingly by the majority of the RSC.

03:41:34.640 --> 03:41:39.326
Texas and Oklahoma opposed. And the.

03:41:39.488 --> 03:41:43.906
The SBP staff is expected to quickly,

03:41:44.098 --> 03:41:48.066
probably by the end of this year, early next year, start moving towards a discussion

03:41:48.098 --> 03:41:52.226
of increasing the summer PRM from 16% to 17%

03:41:52.338 --> 03:41:55.986
and establishing around a 44%

03:41:56.178 --> 03:41:59.802
PRM. So those are very large percentages.

03:41:59.906 --> 03:42:03.618
And they, you know, it's got

03:42:03.634 --> 03:42:07.442
a lot of concerns by our LSEs, or LREs, as they call

03:42:07.466 --> 03:42:11.602
them, an SPP, about the ability to comply

03:42:11.706 --> 03:42:15.190
with not only the 36 and 16 that were approved by the SPP,

03:42:16.250 --> 03:42:20.010
but definitely for the 17 and 44%.

03:42:20.130 --> 03:42:24.482
And so the way you meet them is by making investments in your existing generation

03:42:24.546 --> 03:42:28.910
to ensure they're available to perform, building new capacity

03:42:29.890 --> 03:42:33.868
or buying excess capacity from another LSE,

03:42:34.004 --> 03:42:39.068
LRE, or merchant generator and SPP to comply. So there's,

03:42:39.124 --> 03:42:42.716
there's impacts, I think, cost,

03:42:42.828 --> 03:42:46.452
and also, and I say cost in

03:42:46.476 --> 03:42:49.692
terms of, you know, spending money to add

03:42:49.716 --> 03:42:52.572
new plants, but also costs. If you don't come, if you're not able to meet

03:42:52.596 --> 03:42:56.084
the PRM, then you have to pay a deficiency payment. And SPP

03:42:56.132 --> 03:42:59.700
did create sort of a curve to try the. So that you're not paying outsize

03:42:59.740 --> 03:43:03.040
deficiencies. It's based on the actual deficiency amount that

03:43:03.460 --> 03:43:06.764
you are actually short. So they did make some improvements

03:43:06.812 --> 03:43:10.236
in that area. But ultimately,

03:43:10.388 --> 03:43:14.452
it's a lot of pressure on our LREs that are operating in SPP in

03:43:14.476 --> 03:43:17.572
Texas. And then also, you know,

03:43:17.636 --> 03:43:20.932
it will have a downward impact on the switchability of

03:43:20.956 --> 03:43:24.610
the generation units, that switch between ERCOT and SPP.

03:43:25.990 --> 03:43:30.090
So I just want to provide that update. Any questions?

03:43:31.270 --> 03:43:35.030
Okay, thank you for that update. (item:57:Chairman Gleeson opens up item to PUC's COO, Hayley Hall) So I

03:43:35.070 --> 03:43:38.598
think then the last item we have will be Item No.

03:43:38.734 --> 03:43:42.502
57, which is normal, where we get an update from our Executive

03:43:42.566 --> 03:43:46.662
Director or Deputy Executive Director. But today our Chief Operating Officer,

03:43:46.806 --> 03:43:50.542
Hayley Hall, has an update. Believe our appropriations request

03:43:50.606 --> 03:43:54.398
is due tomorrow. And this is the first appropriations

03:43:54.454 --> 03:43:57.614
request since 2010 that I've had absolutely nothing to do with. So I'm in a

03:43:57.622 --> 03:44:00.494
bit of mourning. So no pressure.

03:44:00.662 --> 03:44:04.366
(item:57:Hayley Hall, Commission Staff's COO on Legislative appropriations request for FY '26-'27) Good afternoon, Hayley Hall for Commission Staff. We are putting the finishing

03:44:04.398 --> 03:44:08.838
touches on our legislative appropriations request for FY '26-'27,

03:44:08.894 --> 03:44:11.330
which starts a year from September.

03:44:12.030 --> 03:44:15.636
Thank you to Jay Stone, Nathaniel Lilly, Jess Heck,

03:44:15.668 --> 03:44:18.400
and Casey Green for their contributions to the report.

03:44:18.940 --> 03:44:22.660
The legislature did not ask state agencies to make an across the board cut this

03:44:22.700 --> 03:44:26.508
year. So our baseline budget is basically the same as our FY

03:44:26.564 --> 03:44:29.844
'25 budget, more or less. And then we're asking for five

03:44:29.892 --> 03:44:33.260
exceptional items in addition to the baseline budget.

03:44:33.420 --> 03:44:36.452
One is for additional staffing kind of across the

03:44:36.476 --> 03:44:39.738
agency, but really concentrated on the contested case process to deal with,

03:44:39.764 --> 03:44:43.022
with kind of demand for services and our caseload

03:44:43.086 --> 03:44:46.798
growth across the board. The second is to develop

03:44:46.854 --> 03:44:50.542
a case management system. This was a recommendation from the Sunset Commission

03:44:50.726 --> 03:44:54.318
to gather better data across the contested case process,

03:44:54.414 --> 03:44:58.170
automate where we can, and provide kind of an across the board tool to

03:44:58.790 --> 03:45:02.366
have a chance to analyze our data, look for trends,

03:45:02.398 --> 03:45:06.620
and kind of make sure our resources are allocated efficiently.

03:45:07.200 --> 03:45:10.424
The third is related to infrastructure,

03:45:10.512 --> 03:45:14.032
reliability and resiliency. We have a lot of additional work in

03:45:14.056 --> 03:45:17.980
that area. So it's a request for additional staff for

03:45:18.360 --> 03:45:21.736
additional CCN volumes, a lot related to

03:45:21.888 --> 03:45:25.520
permian basin reliability plans and other reliability plans and

03:45:25.640 --> 03:45:28.816
reports on resiliency and those types of things. As part

03:45:28.848 --> 03:45:32.646
of that exceptional item, we're asking for funds to create

03:45:32.718 --> 03:45:36.006
a Texas version of the federal eagle eye system. That's the

03:45:36.038 --> 03:45:39.622
outage tracking database. That would provide a lot more detail

03:45:39.686 --> 03:45:42.982
than what the federal system provides in the event of an outage

03:45:43.166 --> 03:45:47.518
event. The fourth is related to.

03:45:47.654 --> 03:45:48.970
What is the fourth one?

03:45:50.950 --> 03:45:54.486
The TEF expansion. So a few additional staff for TEF.

03:45:54.558 --> 03:45:57.872
As noted earlier, the response has been a lot more than

03:45:57.896 --> 03:46:01.288
what we had anticipated. So it's just a handful of extra staff to

03:46:01.304 --> 03:46:04.344
deal with those volumes. We'll be in the monitoring phase of kind of all four

03:46:04.392 --> 03:46:08.180
programs at that point and just staffing up for that eventuality.

03:46:08.480 --> 03:46:12.376
And the fifth is a replacement of power to choose. That resource

03:46:12.408 --> 03:46:16.224
was developed in the early two thousands. The last significant update to that

03:46:16.272 --> 03:46:19.472
was in 2015. So it's just time for a

03:46:19.496 --> 03:46:23.150
refresh with kind of an updated modern architecture user interface.

03:46:24.210 --> 03:46:28.130
Do you know offhand what our current FTE cap is and

03:46:28.170 --> 03:46:31.842
what these exceptional items would take it to? Our current FTE cap

03:46:31.906 --> 03:46:35.962
is 283, and this would add an additional 53

03:46:35.986 --> 03:46:39.314
FTEs to that. Do we have

03:46:39.402 --> 03:46:42.746
all those FTEs filled at 283? I think right now

03:46:42.778 --> 03:46:46.042
we're at about 253. So we've added about

03:46:46.106 --> 03:46:49.342
50 FTEs during this past year. Year. And we're continuing to staff

03:46:49.406 --> 03:46:52.902
up in the coming years with the FTEs that we got during the

03:46:52.926 --> 03:46:56.702
last legislative session. So this would be in addition to that. Okay.

03:46:56.726 --> 03:46:59.846
So. And we would go from 283 to. I'm sorry,

03:46:59.878 --> 03:47:03.102
what number again, if you's total.

03:47:03.206 --> 03:47:07.414
Okay. Okay. So, yeah. Like over 300, 330 something.

03:47:07.582 --> 03:47:11.494
So I am glad you're doing a review of the contested case side

03:47:11.542 --> 03:47:14.592
of our business. The just.

03:47:14.656 --> 03:47:18.904
The Permian basin alone will have a litany of CCEM proceedings

03:47:18.952 --> 03:47:22.720
that our staff has to process within 180 days, not to mention

03:47:22.840 --> 03:47:26.456
the other contestant cases that were under expedited timelines on.

03:47:26.488 --> 03:47:29.580
So I appreciate you taking a look at that. And,

03:47:30.360 --> 03:47:33.808
you know, if you need to add more than 53, you may want to consider

03:47:33.864 --> 03:47:36.720
that because that's a lot of work, even just on the CCN side of it.

03:47:36.840 --> 03:47:40.528
Thank you. Thank you. And I'll say Commissioner Jackson, from the

03:47:40.544 --> 03:47:44.008
first day she got here, was well ahead of the Sunset Commission on wanting us

03:47:44.024 --> 03:47:47.752
to have a case management system. So. Yes,

03:47:47.896 --> 03:47:49.700
I'm happy to hear we're doing that.

03:47:50.880 --> 03:47:54.040
Okay. Do you know, do we have any joint

03:47:54.080 --> 03:47:57.300
budget hearings or any other hearings coming up this fall that we know yet?

03:47:58.040 --> 03:48:00.832
I'm sure there will be hearings. I think they're in the process of being scheduled.

03:48:00.856 --> 03:48:04.540
Okay. Okay. Any questions.

03:48:05.000 --> 03:48:08.300
All right. Thank you, Hayley. Thank you. All right, I'm going to look to Connie

03:48:08.340 --> 03:48:11.852
since I skipped, like, four things this meeting. So I think at this point we're

03:48:11.876 --> 03:48:15.636
clear. All right. (item:57:Chairman Gleeson adjourns meeting) This meeting of the Public Utility Commission of Texas is hereby

03:48:15.668 --> 03:48:15.980
adjourned.