WEBVTT
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Good morning.
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This meeting of The Public
Utility Commission of Texas
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will come to order
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to consider matters that
have been duly posted
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with the Secretary of State of
Texas for December 2nd, 2021.
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For the record, my name is Peter Lake,
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and with me today, are Will McAdams,
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Lori Cobos and Jimmy Glotfelty.
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Today, we have several
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contested case items
rulemaking projects to attend to.
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We will then go into
closed session, take a break.
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And after that break,
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we will reconvene for the second half
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of today's programming,
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which is our work session
to discuss market redesign
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under agenda item 18.
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So, that is our game plan for the day.
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And Mr. Janae,
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could you please walk us
through today's Consent Agenda?
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Good morning, Commissioners
by individual Gallup.
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The following items were
placed on your Consent Agenda.
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7, 27 and 28.
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Commissioner Cobos is
recused from item seven.
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Thank you, sir.
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Is there a motion to approve the items
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just described by Mr. Janae?
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So moved.
Second
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All in favor, say aye.
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Aye.
Aye.
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None opposed, the
motion passes at this time.
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Like to open for public comment,
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or comments related to a
specific agenda item will be heard
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when that item is taken up,
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this is for general comments only.
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Speakers will be limited
to three minutes each.
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Mr. Janae, do we have
anyone from the public
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signed up to speak?
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No one signed
on the sheet, sir.
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Thank you, sir.
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In that case, public
comment is now closed,
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we will not be taking up
items four, 11, 14, 16, and 17,
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which brings us to our regular agenda.
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Mr. Janae, could you
lay out our first item.
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Item one is Docket 50404,
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Petition Of Sterling Deason O'donnell
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and/or related entity to
amend the Marilee SUD CCN
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by expedited release
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the Commission issued
an order on October 12th.
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Marilee SUD filed a motion
for rehearing on November 5th,
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we've asked y'all to extend time to act.
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Thank you, sir, seems
pretty straightforward.
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Any thoughts, comments,
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or motion to extend time to
act on the motion for rehearing
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before the maximum period about Labella?
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Yes, sir, I would
move to extend time.
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Is there a second?
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Second.
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All in favor, say aye.
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Aye.
Aye.
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None opposed, motion
passes, next item, please.
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Item two is Docket 51545,
Petition of Compass Datacenters
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to amend Rockett SUD
CCN by expedited release
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the Commission issued
an order on October 12th.
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The Rockett SUD filed
a motion for rehearing
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on the November 5th,
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we've asked y'all to extend
time to act on the motion.
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Thank you, sir.
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Who has comments
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or a motion similar set up,
thoughts, comments, or motion
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to extend time to act on
the motion for rehearing?
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I would allow it and
move to extend time.
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And is there a second?
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Second.
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All in favor, say aye.
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Aye.
Aye.
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None opposed, the motion passes.
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Item number three please. Mr.-
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Item three is Docket 52090,
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Petition of Redbird Development
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to Amend Dobbin
Plantersville WFC certificate
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by expedited release
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the Commission issued
an order on October 12th,
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Dobbin Plantersville WFC
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filed a motion rehearing on the 5th,
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we've asked you to extend
time to act on the motion.
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Similar set up, thoughts,
comments, motion
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to extend time to maximum rehearing
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to the maximum extent, blah, blah, blah.
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Same thing here on this
one, I would need to extend.
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Is there a second.
Second.
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All in favor, say aye.
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Aye.
Aye.
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Aye.
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None opposed, motion passes.
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Getting the hang of this.
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All right, nothing on five and
six, seven was consented,
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it brings us to item number eight.
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Item eight is Docket 52689,
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is the Expedited Petition
of CenterPoint and others
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for a load management
program and an accounting order.
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I will note that a revised agreement
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and other documents
filed by the utility yesterday.
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Thank you, sir.
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As is something we've discussed before,
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you got a lot of feedback on that
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as much as you may know, Janae noted,
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a lot of the feedback
was received yesterday
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leaving little time to fully vet.
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I know there were budget
caps put in part of your requests.
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Yes, sir.
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But that being said a
lot of things around here
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moving fast and furious,
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so far from the only ones falling things
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with little time to review.
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Two big things to consider,
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establishing establishment
of the regulatory asset
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and then approval of the plans,
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I think we certainly
want to, well, first of all,
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thank you for the feedback
the TDUs and especially voltage
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and also ERCOT for their feedback
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and the input in response to
the questions from the dyes.
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I think the regulatory asset
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certainly needs to be established.
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We need all the tools
we can get this winter.
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The plans,
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I'm really curious to hear
y'all's thoughts on today,
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I can see going both ways on those
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given the new nature of
this and the tight timelines,
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but I certainly,
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think it's something the pricing
is consistent with the IRS,
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it's similar to the framework,
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similar to our summer program,
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so, I think it's been helpful
to see all of that laid out,
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well, clearly, it's helpful
to have the budget caps,
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but would welcome your
thoughts and comments.
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Yep, thank you, Chairman Lake.
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And I think your layout of
the two main decision points
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is well set forth.
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With respect to the approval
of the accounting order
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to establish a regulatory asset,
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I think that is an action we
can take today, and should,
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as you described to allow the utilities
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to implement this program
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as sort of a testing bed
for this upcoming winter.
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I would stop there.
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I think ultimately they
will have to come in
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in their next rate case
and justify their costs.
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And I don't know if I would get involved
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in actually approving all the specifics
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in their plan at this time.
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Okay, any thoughts, comments?
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Boy, that sounds
like a prudent action.
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I like it.
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Just thought.
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The action part
or the prudent part?
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Both.
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(members laughing)
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All right.
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I'm kind of the naysayer
here, I don't like it.
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Any other?
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Prudence or the action?
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Well, I think it was
thrown in at the last minute.
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We're trying to look at ECRF next year,
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we're trying, in my opinion,
the market ought to be moving
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to a lot of these
demand-response programs
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and the utilities
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ought to be using ECRF
for energy efficiency.
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And I just feel if this
was a real pilot program,
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it would be one and a half megawatts,
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10 megawatts and 20 megawatts.
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But what we have is one
and a half, 10 and 300,
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that's a lot of megawatts.
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And I know service
territories are very different.
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But I struggle that I don't think
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this is really just a pilot program.
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Does this become a full program
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that we end up integrating
into something else
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without full discussion?
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Is it something that we
change in three months,
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which doesn't really give certainty?
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So, those are the questions
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that I'm kind of wrangling with here
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on this kind of dropped, I
think it was 11, when was this?
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When did we get this?
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Less than 30 days ago.
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So.
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All very fair concerns.
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Can I highlight something
you said at the very beginning?
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You may.
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The demand response
should be moving to the market,
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I think, is that the- <v
->That's what I said.
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And ECRF should
be at the TDU level?
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That's what I believe.
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So, I wanna highlight that,
I think that's exactly right,
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and I think that's where we
need to move philosophically
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across the board.
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So, that's an, I think that's
an incredibly important point
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that shouldn't go by the wayside.
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So, I agree with that, thank
you for highlighting that.
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As for overgrown pilot program,
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that just becomes part of
the, absorbed into the mass.
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I guess I'm thinking of
this less as a pilot program
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than an effort to use every
tool we've got this winter
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until we can get the
broader reforms in place
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and implement it.
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So, I certainly don't think of this
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as something that is ongoing forever.
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Right.
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I don't recall,
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we've obviously all read a
lot in the last couple of days,
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papers flying around.
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I also, if I recall, ERCOT
had a problem implementing it.
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So, I have some question about that,
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but also would wonder
if that is the case.
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And if they have a
trouble implementing it,
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then again, how do we justify doing it?
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So, I noticed that as well,
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and if any action we take,
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I think we need to include
ordering paragraphs
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to address that information,
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I think it's an information
challenge for ERCOT.
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Right.
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Certainly to address that.
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Is that settlement
issue as well?
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There's a pricing
issue involved there.
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Yeah.
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Can that be addressed,
or is that a lost order?
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That's why I have concerns,
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'cause I don't know if it
can be addressed or not.
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I haven't heard anything from-
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I'm gonna ask, or whoever
appropriate from ERCOT can.
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Kanaan Gallman with ERCOT.
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So, we currently
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don't digest the magnitude
of these programs,
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and there's a request that
we do a price adjustment
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for their deployment,
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and that's the area that
we have a challenge in.
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So, it's a pricing issue
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as well as will flow all the
way through to settlements.
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And I also think that doing
the price correction by,
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say, January,
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really is not in our scope
of work at this point.
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So, that would also be a challenge.
00:11:16.250 --> 00:11:19.707
So, I think that's the
extent of the comments
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as I remembered them.
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Can't be done or would
be really hard to do?
00:11:26.930 --> 00:11:29.300
Can't be done, okay.
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Just being honest
there, Gallman,
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I mean, we're building a
car at 60 miles per hour here,
00:11:32.260 --> 00:11:33.800
moving into this winter.
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Yeah, I mean that price
adjustment component either,
00:11:37.030 --> 00:11:41.350
it's not that you can't
implement what's been asked,
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it's the pricing adjustment
that can't be done for January.
00:11:48.630 --> 00:11:50.210
Yeah.
00:11:50.210 --> 00:11:52.100
Can it be known if
you had more time?
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Could you do it after January?
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We could, so, it is
absolutely doable,
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it's technically doable,
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it's a matter of moving
resources to implement that.
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Where are you gonna
move resources from?
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I'm sorry, Commissioner.
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No.
Don't apologize.
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So.
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Whatever the next thing is.
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It is not something we
have designed at this point,
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that adjustment, and the
resources that it would move
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are off of the settlement team
00:12:29.388 --> 00:12:31.750
and the market design
team on that front.
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Which are focused
on securitization
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and variety of other matters.
00:12:36.080 --> 00:12:36.913
Correct.
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Where does that leave you?
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That leaves me struggling
with how we take resources
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off these more important
projects to do something like this.
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And maybe there's another,
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a couple hundred megawatts
we can find somewhere
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if we need it.
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But I struggle with implementing
a new program very quickly
00:13:00.110 --> 00:13:01.710
knowing what we know from ERCOT.
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That's where I am.
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Can it be implemented?
00:13:06.530 --> 00:13:09.600
Can we get those megawatts
without the price adjustment?
00:13:09.600 --> 00:13:13.653
Yeah, I mean, the
proposal does not,
00:13:14.580 --> 00:13:18.300
in any way, tie itself
to the price adjustment.
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I may be able to make a
very clunky adjustment,
00:13:22.060 --> 00:13:26.440
but that might not
align market conditions
00:13:26.440 --> 00:13:28.503
to the actual price.
00:13:29.460 --> 00:13:32.120
But you could get those
megawatts, we just wouldn't be,
00:13:32.120 --> 00:13:34.370
the price adjustment
would need to come later
00:13:34.370 --> 00:13:38.913
and the project schedule.
00:13:43.060 --> 00:13:44.570
Wait a moment,
is that something-
00:13:44.570 --> 00:13:46.760
That would move me
in the direction of saying,
00:13:46.760 --> 00:13:48.660
yeah, this is great, let's go forward.
00:13:49.738 --> 00:13:51.570
Okay, so, there's no scenario
00:13:51.570 --> 00:13:56.570
where this should move
forward on this timeframe?
00:13:57.270 --> 00:13:59.490
Well, there could be,
but I haven't heard it yet,
00:13:59.490 --> 00:14:00.770
to satisfy me.
00:14:00.770 --> 00:14:01.603
Okay, what.
00:14:02.760 --> 00:14:04.560
Well, I mean, the settlement
issues are concerned,
00:14:04.560 --> 00:14:07.260
I don't know if we may need
to hear from center point.
00:14:08.500 --> 00:14:10.140
So, and the key thing here,
00:14:10.140 --> 00:14:14.290
is it's not about settling the program,
00:14:14.290 --> 00:14:16.230
it's the price adjustment
00:14:16.230 --> 00:14:19.210
and settling the rest of
the market, that is the issue.
00:14:19.210 --> 00:14:20.240
Yeah, absolutely.
00:14:20.240 --> 00:14:24.580
So, the proposals from the
TDUs could all get implemented,
00:14:24.580 --> 00:14:28.243
that's not, we wouldn't
be in the way of doing that.
00:14:30.090 --> 00:14:31.600
So, you've noted this issue
00:14:31.600 --> 00:14:33.220
from an implementation standpoint,
00:14:33.220 --> 00:14:35.540
and a TCPA has noted this
00:14:35.540 --> 00:14:38.923
from a impact on pricing for generation.
00:14:40.030 --> 00:14:42.170
Those are the two angles on this issue
00:14:42.170 --> 00:14:44.120
that I think have been presented to us.
00:14:48.380 --> 00:14:49.213
Good morning,
00:14:49.213 --> 00:14:51.000
Commissioner Sam Chang
with CenterPoint Energy.
00:14:51.000 --> 00:14:52.880
Commissioner Glotfelty,
just one clarification,
00:14:52.880 --> 00:14:55.160
as part of the revised
settlement, we did agree
00:14:55.160 --> 00:14:58.920
to lower the 300 megawatt
upper boundary to 150.
00:14:58.920 --> 00:15:00.550
Oh, okay, thank you.
00:15:00.550 --> 00:15:04.160
As it relates to information
that ERCOT needs,
00:15:04.160 --> 00:15:06.720
I have been conferring
with ERCOT's counsel
00:15:06.720 --> 00:15:08.300
regarding specific language.
00:15:08.300 --> 00:15:11.380
And I believe our caught
provided some sample language
00:15:11.380 --> 00:15:14.403
in its comments and
analysis, and we're happy
00:15:14.403 --> 00:15:16.220
to have the Commission
incorporate that kind of language
00:15:16.220 --> 00:15:18.203
as it relates to information sharing.
00:15:19.080 --> 00:15:21.300
With regard to pricing
those and price formation,
00:15:21.300 --> 00:15:23.910
that's really not ordeal,
that's not part of our program,
00:15:23.910 --> 00:15:26.563
that's more of something KCPA raised.
00:15:29.670 --> 00:15:32.210
Which goes to demand
response in the market.
00:15:32.210 --> 00:15:33.345
Right.
00:15:33.345 --> 00:15:34.262
And TDUs.
00:15:38.680 --> 00:15:40.833
Thoughts on how to resolve this?
00:15:42.950 --> 00:15:43.850
Yes, sir.
00:15:43.850 --> 00:15:46.030
Non-negotiable, I think,
and I believe we're all there,
00:15:46.030 --> 00:15:48.300
we don't wanna siphon resources away
00:15:48.300 --> 00:15:52.143
from real-time, operational mechanics
00:15:53.990 --> 00:15:55.280
that are being worked through
00:15:55.280 --> 00:15:56.970
for the purposes of the winter.
00:15:56.970 --> 00:15:58.920
Because we need those megawatts
00:15:58.920 --> 00:16:02.540
that we know how they
perform to perform as expected.
00:16:02.540 --> 00:16:03.373
Regular marking function.
00:16:03.373 --> 00:16:04.206
Yes, sir.
00:16:04.206 --> 00:16:05.500
Okay.
00:16:05.500 --> 00:16:08.380
So again, if, if
Kanaan can tell us,
00:16:08.380 --> 00:16:11.570
which I believe he is,
you can move forward
00:16:11.570 --> 00:16:14.030
to where this program and project
00:16:14.030 --> 00:16:17.050
will not disrupt the functions
00:16:17.050 --> 00:16:21.160
of the personnel associated
with market operations.
00:16:21.160 --> 00:16:23.030
It will not siphon away resources,
00:16:23.030 --> 00:16:25.550
because I wanna count on
the megawatts that I know
00:16:25.550 --> 00:16:27.160
are gonna be able to be there.
00:16:27.160 --> 00:16:30.170
So, I mean, I think the
programs can go forward,
00:16:30.170 --> 00:16:31.610
it's just the price adjustment.
00:16:31.610 --> 00:16:35.800
Yeah.
That was requested by TCPA,
00:16:35.800 --> 00:16:40.260
would not be able to go
forward in the January timeframe.
00:16:40.260 --> 00:16:42.290
Later, and maybe clunky.
00:16:42.290 --> 00:16:43.123
Yes.
00:16:43.123 --> 00:16:47.630
And they've requested a
series of other price corrections,
00:16:47.630 --> 00:16:49.660
and it could delay that,
00:16:49.660 --> 00:16:50.670
those are some other issues
00:16:50.670 --> 00:16:53.490
we'd have to have to talk through.
00:16:53.490 --> 00:16:58.490
But I think January
is not a possibility,
00:16:59.640 --> 00:17:03.360
it puts at risk some of
the other price corrections
00:17:03.360 --> 00:17:05.633
that were asked for this summer.
00:17:06.850 --> 00:17:08.730
Given the small
amount of megawatts
00:17:08.730 --> 00:17:09.670
that we're talking about,
00:17:09.670 --> 00:17:13.230
I mean, how big of an impact
is it on a price correction?
00:17:13.230 --> 00:17:16.423
Is it something significantly large?
00:17:18.020 --> 00:17:21.823
We're looking at maybe
170 megawatts or less.
00:17:22.900 --> 00:17:25.160
Well, low reserves
that counts for a lot.
00:17:25.160 --> 00:17:29.680
Yeah, I would say if I'm
far away from the steep part
00:17:29.680 --> 00:17:32.190
of the operating reserve demand curve,
00:17:32.190 --> 00:17:36.610
the impact is small, but
these programs are most likely,
00:17:36.610 --> 00:17:40.630
gonna be deployed at the very edge
00:17:40.630 --> 00:17:42.790
of the operating reserve demand curve
00:17:42.790 --> 00:17:44.980
where the curve is extremely steep.
00:17:44.980 --> 00:17:49.980
So, even 100 megawatts can
make a dramatic price change.
00:17:50.940 --> 00:17:55.160
Now, there's other
price adjustments at play,
00:17:55.160 --> 00:17:58.260
and they may be sufficient
00:17:58.260 --> 00:18:03.160
to override what these programs do.
00:18:03.160 --> 00:18:08.160
And the proposal before
you to change ORDC,
00:18:10.800 --> 00:18:13.763
may diminish that amount.
00:18:14.610 --> 00:18:19.203
So, you're thinking about increasing MCL
00:18:21.340 --> 00:18:24.820
and lowering HCAP,
00:18:24.820 --> 00:18:28.350
those things might make
that impact much smaller,
00:18:28.350 --> 00:18:32.230
I have not studied those impacts.
00:18:32.230 --> 00:18:35.660
We can try and take a
very quick look at that
00:18:35.660 --> 00:18:37.033
if it's helpful.
00:18:38.940 --> 00:18:43.157
Input from staff, and I suspect
you've got some thoughts.
00:18:45.640 --> 00:18:47.340
Good morning,
Chairman, Commissioners,
00:18:47.340 --> 00:18:49.310
Rustin Tawater for Commission staff,
00:18:49.310 --> 00:18:50.990
we continue to support the programs
00:18:50.990 --> 00:18:55.990
and echo what ERCOT and
Mr. Chang from CenterPoint had said,
00:18:56.017 --> 00:18:58.130
that was one of the reasons
why we couldn't agree
00:18:58.130 --> 00:19:01.980
to include the language
the TPCA had suggested,
00:19:01.980 --> 00:19:04.130
because we weren't able
to confirm with ERCOT
00:19:04.130 --> 00:19:05.920
that it would be workable,
00:19:05.920 --> 00:19:07.200
which is why ultimately,
00:19:07.200 --> 00:19:10.203
it didn't make it into the
settlement that we signed on to.
00:19:11.990 --> 00:19:13.540
Rebecca, the Redbird
Commission staff,
00:19:13.540 --> 00:19:17.090
there is an NPR that has been
approved several years ago
00:19:17.090 --> 00:19:18.300
that would implement this.
00:19:18.300 --> 00:19:21.110
And through the ERCOT
stakeholder PRS Project,
00:19:21.110 --> 00:19:23.690
I don't think it's something
ERCOT has prioritized
00:19:23.690 --> 00:19:25.300
for implementation this time.
00:19:25.300 --> 00:19:27.130
It is dated and staff would support
00:19:27.130 --> 00:19:31.280
having that implemented
ASAP as resources permit.
00:19:31.280 --> 00:19:33.190
I don't know if that's
something y'all wanna consider
00:19:33.190 --> 00:19:35.590
delaying the capacity
available for this winter.
00:19:38.000 --> 00:19:41.160
Thank you, Andreas
Madrona for TCPA.
00:19:41.160 --> 00:19:43.350
And these are exactly
the concerns we've raised,
00:19:43.350 --> 00:19:46.440
and the ERCOT just
says exactly our concern.
00:19:46.440 --> 00:19:48.190
We don't know what the impact is,
00:19:48.190 --> 00:19:50.017
we don't know what
the pricing impact is,
00:19:50.017 --> 00:19:52.110
and there hasn't been
any analysis of that
00:19:52.110 --> 00:19:53.690
incorporated into this settlement,
00:19:53.690 --> 00:19:55.290
and that's what our concern was.
00:19:56.460 --> 00:19:59.310
We know we still have
serious concerns about this
00:19:59.310 --> 00:20:01.210
because we don't know how
it's gonna impact the prices,
00:20:01.210 --> 00:20:02.043
we don't know
00:20:02.043 --> 00:20:04.660
how it's gonna impact
degeneration going forward,
00:20:04.660 --> 00:20:07.000
and the willingness to come in
00:20:07.000 --> 00:20:08.430
and further invest in this market
00:20:08.430 --> 00:20:09.997
if we keep on putting these programs
00:20:09.997 --> 00:20:12.640
where you have rate
payer funded capacity
00:20:12.640 --> 00:20:14.940
essentially being paid in,
00:20:14.940 --> 00:20:16.460
as opposed to letting the market
00:20:16.460 --> 00:20:19.070
provide for this it's demand response.
00:20:19.070 --> 00:20:21.420
That said, we're, not gonna
oppose the settlement,
00:20:21.420 --> 00:20:23.950
we want to leave this to the Commission,
00:20:23.950 --> 00:20:26.130
this is exactly the
concerns that we have.
00:20:26.130 --> 00:20:28.700
And Director (indistinct)
was completely correct
00:20:28.700 --> 00:20:32.850
that if NPR 1006 had been implemented,
00:20:32.850 --> 00:20:34.660
this would have been
able to been accounted for.
00:20:34.660 --> 00:20:37.120
And that's, we had
asked that that be done,
00:20:37.120 --> 00:20:39.410
and that this program and these programs
00:20:39.410 --> 00:20:41.880
could then be incorporated
to that and we could know
00:20:41.880 --> 00:20:45.134
and tell you what we think the
actual price impact would be.
00:20:45.134 --> 00:20:47.830
Unfortunately, because it
hasn't been done, we can't.
00:20:47.830 --> 00:20:51.000
Perhaps one salient point
that we need to focus on here,
00:20:51.000 --> 00:20:53.110
is that these pricing issues
00:20:53.110 --> 00:20:54.830
and pricing impacts will come into play
00:20:54.830 --> 00:20:57.897
if the load management
programs are actually deployed.
00:20:57.897 --> 00:20:59.070
EA2.
And EA2.
00:20:59.070 --> 00:21:01.350
So, we know we're
doing everything we can
00:21:01.350 --> 00:21:03.257
to avoid emergency conditions, so.
00:21:04.285 --> 00:21:06.610
Which would be
after the right payer
00:21:06.610 --> 00:21:09.680
funded ERs load management-
That's right.
00:21:09.680 --> 00:21:11.720
Which we already do.
00:21:11.720 --> 00:21:13.693
Right.
Very similar mechanism.
00:21:14.900 --> 00:21:17.120
So, in terms of
distorting price formation,
00:21:17.120 --> 00:21:19.370
again, which we are going to depend on
00:21:19.370 --> 00:21:20.930
to incent the right behavior
00:21:20.930 --> 00:21:24.816
building into scarcity conditions
that is less of a concern
00:21:24.816 --> 00:21:27.640
other than the impacts on forwards
00:21:27.640 --> 00:21:30.713
and how people are
hedging, is that accurate?
00:21:31.900 --> 00:21:35.950
Break glass in case of
emergency at 3000 PRC.
00:21:35.950 --> 00:21:37.400
Less.
00:21:37.400 --> 00:21:38.420
Lower.
00:21:38.420 --> 00:21:42.103
We're distorting the hell
out of prices at 3000 MCL.
00:21:43.600 --> 00:21:44.970
And then when we deploy ERs,
00:21:44.970 --> 00:21:47.185
and then if EA2 is even lower than that,
00:21:47.185 --> 00:21:48.893
we've kind of crossed.
00:21:50.230 --> 00:21:52.770
As you often say, we
were crossed that Rubicon
00:21:52.770 --> 00:21:53.920
well before we get EA2.
00:21:56.620 --> 00:21:59.070
Could I.
00:21:59.070 --> 00:21:59.903
I think.
00:22:02.160 --> 00:22:06.880
We have already said
that if there is an EA2,
00:22:06.880 --> 00:22:08.190
there's load shed,
00:22:08.190 --> 00:22:11.490
and when there is load
shed, the price is at the max.
00:22:11.490 --> 00:22:13.210
So, on the front end,
00:22:13.210 --> 00:22:15.580
you will get the price
formation you need
00:22:15.580 --> 00:22:17.250
without an adjustment.
00:22:17.250 --> 00:22:20.950
Where this ends up being
an issue, is on the backend.
00:22:20.950 --> 00:22:25.830
As the load is returning,
it's not instantaneous,
00:22:25.830 --> 00:22:29.590
and that's where the
adjustment would happen.
00:22:29.590 --> 00:22:34.590
So, we are halfway there already,
00:22:34.600 --> 00:22:37.673
it's that back half that
there's some concern around.
00:22:42.670 --> 00:22:44.093
Somebody new stepped up.
00:22:45.802 --> 00:22:47.220
I just won't have all
the resources at hand,
00:22:47.220 --> 00:22:48.820
if you have any other questions.
00:22:51.913 --> 00:22:52.963
Additional thoughts.
00:22:57.530 --> 00:22:59.090
Mr. Chairman,
just, sorry to interrupt,
00:22:59.090 --> 00:23:00.340
just briefly on another point
00:23:00.340 --> 00:23:02.760
that Commissioner Glotfelty had made,
00:23:02.760 --> 00:23:06.090
we did have concerns about these costs
00:23:06.090 --> 00:23:08.570
and being able to review
them for prudence later.
00:23:08.570 --> 00:23:11.330
We did include that term in
the settlement and stipulation
00:23:11.330 --> 00:23:14.000
that any cost associated
with these programs
00:23:14.000 --> 00:23:15.520
would be reviewed for reasonableness
00:23:15.520 --> 00:23:17.750
in the next base-rate proceeding.
00:23:17.750 --> 00:23:20.650
So, we will have an
opportunity to go back and look
00:23:20.650 --> 00:23:22.550
after the programs have been deployed,
00:23:22.550 --> 00:23:24.720
if they are, which we hope.
00:23:24.720 --> 00:23:27.136
It's the only thing that
makes me sleep at night.
00:23:27.136 --> 00:23:28.610
(members laughing)
00:23:28.610 --> 00:23:29.773
You sleep at night?
00:23:30.850 --> 00:23:33.635
Too much to do.
A lot of dreams.
00:23:33.635 --> 00:23:34.487
Yes, ma'am.
00:23:34.487 --> 00:23:35.640
Hi, Carrie Collier-Brown
00:23:35.640 --> 00:23:37.490
with the Alliance for Retail Markets.
00:23:38.730 --> 00:23:42.110
We also signed on to the settlement,
00:23:42.110 --> 00:23:44.370
and thank everybody for working with us
00:23:44.370 --> 00:23:46.190
on the issues that had raised.
00:23:46.190 --> 00:23:49.120
And just wanted to
bring to your attention
00:23:49.120 --> 00:23:52.780
that the three TDUs were
part of this particular docket,
00:23:52.780 --> 00:23:55.980
but Oncor already also has a program
00:23:55.980 --> 00:23:57.750
that was within their EECRF
00:23:57.750 --> 00:24:00.300
that you guys approved
at the last open meeting.
00:24:00.300 --> 00:24:02.230
And I think that you expressed,
00:24:02.230 --> 00:24:05.333
or we expressed, and
we talked about last time,
00:24:06.520 --> 00:24:07.353
that it would be helpful
00:24:07.353 --> 00:24:10.180
if all of those programs are
as consistent as possible.
00:24:10.180 --> 00:24:13.380
And for the reps, I think
there's only one area
00:24:13.380 --> 00:24:17.810
where the three programs
from AEP Oncor, or I'm sorry,
00:24:17.810 --> 00:24:21.850
AEP TNMP and CenterPoint
differ from Oncor's program,
00:24:21.850 --> 00:24:25.370
is that Oncor's program
does not provide for notification
00:24:25.370 --> 00:24:28.210
to the rep of record when
their customer enrolls
00:24:28.210 --> 00:24:30.660
or is deployed under this program.
00:24:30.660 --> 00:24:33.880
And just wanted, I'd had
some conversations with Oncor
00:24:35.150 --> 00:24:38.400
and I think that they
probably need some guidance,
00:24:38.400 --> 00:24:41.110
or it'd be helpful to get
some guidance from y'all
00:24:41.110 --> 00:24:45.310
on whether Oncor should
also provide notification
00:24:45.310 --> 00:24:46.373
to the rep of record.
00:24:49.510 --> 00:24:53.500
Thank you, one
more thing to work on.
00:24:53.500 --> 00:24:54.333
Yes, sir.
00:24:54.333 --> 00:24:56.303
Good morning, I'm
Garry Jones with Oncor.
00:24:57.180 --> 00:24:59.030
If ordered by the Commission,
00:24:59.030 --> 00:25:02.780
we'll be happy to notify the reps
00:25:02.780 --> 00:25:04.600
and follow the side protocol.
00:25:04.600 --> 00:25:06.310
Do you have to be ordered?
00:25:06.310 --> 00:25:07.143
Yes.
00:25:11.610 --> 00:25:12.860
We'll make it.
Okay.
00:25:15.370 --> 00:25:19.090
We'll put Mr. Janae, but
for belts and suspenders,
00:25:19.090 --> 00:25:20.030
I think we'd all be comfortable
00:25:20.030 --> 00:25:23.143
ordering that notification
of rep of record.
00:25:24.770 --> 00:25:28.583
All things considered with an order,
00:25:30.069 --> 00:25:32.670
a belt insist the Janae
belt and suspenders order
00:25:32.670 --> 00:25:35.540
for notice of rep of record,
00:25:35.540 --> 00:25:40.350
including ordering paragraphs
of notification to ERCOT,
00:25:40.350 --> 00:25:44.020
as ERCOT, the information
sharing as ERCOT requested,
00:25:44.020 --> 00:25:49.020
we added those ordering
paragraphs along those lines of,
00:25:50.360 --> 00:25:54.033
and I've got some language
here that I'll lay out for you.
00:25:55.160 --> 00:25:57.810
With those two considerations initially,
00:25:57.810 --> 00:26:00.260
I'm okay moving forward with this
00:26:00.260 --> 00:26:02.910
with a third condition to your concerns
00:26:02.910 --> 00:26:07.050
that the Commission
considers this winter only,
00:26:07.050 --> 00:26:12.050
and that ERCOT and staff work together
00:26:13.260 --> 00:26:18.260
to bring back a debrief
on what timeframe.
00:26:24.160 --> 00:26:27.273
I could see how it worked by next July.
00:26:28.280 --> 00:26:30.220
I think that's workable.
00:26:30.220 --> 00:26:31.223
So, we can.
00:26:33.410 --> 00:26:36.580
And I mean, I almost want
to say a kill switch like this.
00:26:36.580 --> 00:26:37.900
I don't know if we can
put that in the ordering,
00:26:37.900 --> 00:26:41.850
but this is authorized
for one time only,
00:26:41.850 --> 00:26:45.390
pending farther, I guess
there's some (indistinct)
00:26:46.590 --> 00:26:47.423
I love this.
00:26:50.863 --> 00:26:52.010
How does that set?
00:26:52.010 --> 00:26:52.843
That works for me.
00:26:52.843 --> 00:26:55.770
I think the main thing
that I was focused on,
00:26:55.770 --> 00:26:57.490
is just approving the accounting order,
00:26:57.490 --> 00:26:58.910
setting up the regulatory asset,
00:26:58.910 --> 00:27:00.910
letting the TDUs move forward
00:27:00.910 --> 00:27:04.190
as sort of a test
run for this inter only,
00:27:04.190 --> 00:27:06.763
and then having a post-mortem.
00:27:08.485 --> 00:27:10.248
Yeah, that's it actually.
00:27:10.248 --> 00:27:11.413
I don't know
where it came from.
00:27:11.413 --> 00:27:13.550
But, okay, so, doing that afterwards,
00:27:13.550 --> 00:27:17.373
the analysis to make sure
that, just see how it worked out,
00:27:18.410 --> 00:27:20.300
and see if that's a program
00:27:20.300 --> 00:27:22.943
that I think that we can
benefit from in the future,
00:27:24.840 --> 00:27:27.770
with respect to ordering
Oncor to provide notice,
00:27:27.770 --> 00:27:29.856
I am happy to do that as well.
00:27:29.856 --> 00:27:30.689
Okay.
00:27:30.689 --> 00:27:33.540
Yes, so, approve
the regulatory asset,
00:27:33.540 --> 00:27:35.090
establish the regulatory asset,
00:27:36.980 --> 00:27:39.960
not approve the plan was
brutal part of the action.
00:27:39.960 --> 00:27:41.102
That's right.
00:27:41.102 --> 00:27:42.027
That's right.
00:27:42.027 --> 00:27:42.960
And who do you wanna order
00:27:42.960 --> 00:27:45.203
to give us something
to do a post-mortem?
00:27:46.471 --> 00:27:48.520
I think the request
was to Commission staff
00:27:48.520 --> 00:27:51.370
to work with ERCOT to
provide that post-mortem,
00:27:51.370 --> 00:27:53.430
let's say June 1st.
00:27:53.430 --> 00:27:55.030
So, we'll have to work
for going to the summer.
00:27:55.030 --> 00:27:55.863
Sure.
00:27:55.863 --> 00:27:57.330
Well, maybe the
TDUs too, right?
00:27:57.330 --> 00:27:58.963
Since we'll have the data.
00:28:00.126 --> 00:28:03.760
Yeah, I think staff can work
with ERCOT and the TDUs
00:28:03.760 --> 00:28:08.470
to provide an update and
review of the program performance
00:28:08.470 --> 00:28:12.040
and capacity procured
and pricing by June.
00:28:12.040 --> 00:28:13.330
Yeah, I think
that's a good point,
00:28:13.330 --> 00:28:15.130
I'll hope that they would staff in ERCOT
00:28:15.130 --> 00:28:17.780
would receive all but
cooperation and help they need.
00:28:20.700 --> 00:28:21.600
How does that sit?
00:28:22.520 --> 00:28:23.353
I know you don't like it,
00:28:23.353 --> 00:28:25.439
but would at least make you feel better?
00:28:25.439 --> 00:28:27.435
It makes me feel
better when you pass it.
00:28:27.435 --> 00:28:30.352
(members laughing)
00:28:32.019 --> 00:28:35.131
All right, as for
the paragraphs,
00:28:35.131 --> 00:28:39.640
awarding paragraphs related
to notification to ERCOT,
00:28:39.640 --> 00:28:43.081
I'd offer for y'all's consideration,
00:28:43.081 --> 00:28:45.570
the first paragraph that
each TDU must notify ERCOT
00:28:45.570 --> 00:28:47.950
the TDUs total procured
load management capacity
00:28:47.950 --> 00:28:50.850
at least one business day
before the start of the program.
00:28:51.940 --> 00:28:54.890
And each TDU must update ERCOT
00:28:54.890 --> 00:28:57.950
as to the impact on the
TDU initiative deployments
00:28:57.950 --> 00:28:59.840
on the amount of load
management capacity
00:28:59.840 --> 00:29:01.750
and deployment hours remaining.
00:29:01.750 --> 00:29:05.980
So, our God knows what's
going on when it's going on.
00:29:05.980 --> 00:29:08.170
Does that language work for you?
00:29:08.170 --> 00:29:09.170
Agreeable.
Yes.
00:29:10.950 --> 00:29:12.258
And.
00:29:12.258 --> 00:29:15.470
All right, is there a motion
00:29:15.470 --> 00:29:18.250
to issue an order to authorize the TDUs
00:29:18.250 --> 00:29:20.960
to establish a regulatory
asset to record reasonable costs
00:29:20.960 --> 00:29:24.010
associated with their
respective load managements
00:29:24.010 --> 00:29:27.500
with the inclusion of the
two ordering paragraphs
00:29:27.500 --> 00:29:28.713
as I just laid out?
00:29:29.620 --> 00:29:34.080
And in order to Oncor to
provide a notice of rep of record
00:29:35.560 --> 00:29:38.700
and direction to staff
to work with ERCOT
00:29:38.700 --> 00:29:42.183
to provide a postmortem
analysis by June 1st, 2022
00:29:44.020 --> 00:29:49.020
with acknowledgement
that this is a one-time
00:29:49.690 --> 00:29:53.040
this-winter-only deployment,
00:29:53.040 --> 00:29:56.000
and in the absence of further
action from the Commission
00:29:56.000 --> 00:30:00.640
will not be an ongoing program.
00:30:01.810 --> 00:30:04.470
So, I would suggest
you modify your motion
00:30:04.470 --> 00:30:05.740
to limit the costs
00:30:05.740 --> 00:30:07.750
that can be included
in a regulatory asset
00:30:07.750 --> 00:30:09.233
to cost incurred before.
00:30:11.730 --> 00:30:14.330
I believe they said this
was going to February 28th.
00:30:15.240 --> 00:30:16.760
So that no cost after that day
00:30:16.760 --> 00:30:18.290
can be included in the regulatory asset,
00:30:18.290 --> 00:30:21.823
I think that will stop the
program moving forward.
00:30:24.040 --> 00:30:27.450
We'll include that
in any motion offered,
00:30:27.450 --> 00:30:29.700
is there such a motion?
00:30:29.700 --> 00:30:30.533
So moved.
00:30:30.533 --> 00:30:31.500
Second.
00:30:31.500 --> 00:30:32.680
All in favor, say, aye.
00:30:32.680 --> 00:30:33.513
Aye.
00:30:33.513 --> 00:30:34.720
Aye.
Aye, any opposed?
00:30:34.720 --> 00:30:35.553
No.
00:30:36.900 --> 00:30:38.053
Motion passes.
00:30:39.449 --> 00:30:40.449
Thank you very much.
00:30:46.290 --> 00:30:50.570
Next up, item number nine, Mr. Janae.
00:30:50.570 --> 00:30:52.960
Item nine is project 38533.
00:30:52.960 --> 00:30:55.690
It's the PUC review of ERCOT budget,
00:30:55.690 --> 00:30:58.470
Commission staff has filed a
memo with a proposed order
00:30:58.470 --> 00:31:00.383
on the November 30th.
00:31:03.010 --> 00:31:04.340
Thank you, sir.
00:31:04.340 --> 00:31:05.763
We've got a,
00:31:07.207 --> 00:31:09.970
as Mr. Janae has said,
we gotta a memo file,
00:31:09.970 --> 00:31:14.803
addresses 2022, 2023 budget
system administration fee,
00:31:15.790 --> 00:31:18.250
any updates cases,
00:31:18.250 --> 00:31:21.110
any questions, comments
on the side of that.
00:31:22.294 --> 00:31:23.127
There you go.
00:31:24.540 --> 00:31:25.373
Comments here.
00:31:25.373 --> 00:31:26.206
Yes, sir.
00:31:26.206 --> 00:31:30.300
So, I support the
budget approval
00:31:31.340 --> 00:31:34.893
with a caveat that since
I'm fairly new at this,
00:31:36.210 --> 00:31:37.910
but have spent time with RTOs
00:31:37.910 --> 00:31:40.410
all across the country for many years,
00:31:40.410 --> 00:31:43.130
I believe that they get bloated
00:31:43.130 --> 00:31:45.560
and get extraordinary expenses
00:31:45.560 --> 00:31:48.530
and have a very poor
record of doing metrics
00:31:48.530 --> 00:31:51.440
to determine their
success for the market,
00:31:51.440 --> 00:31:56.090
for doing timelines for
individual processes.
00:31:56.090 --> 00:31:59.430
And hope that we can
work with a new board
00:32:00.450 --> 00:32:03.490
in an effort to find some set of metrics
00:32:03.490 --> 00:32:05.420
that we can all agree to
00:32:05.420 --> 00:32:08.760
that can be better informative
to us and to all stakeholders
00:32:08.760 --> 00:32:11.710
on not only the market metrics,
00:32:11.710 --> 00:32:13.390
which I think they do a good job of,
00:32:13.390 --> 00:32:15.110
but the ERCOT performance metrics
00:32:15.110 --> 00:32:18.340
that I think are important
for me to understand,
00:32:18.340 --> 00:32:20.140
that's a pretty important input
00:32:20.140 --> 00:32:21.840
into budgets going forward for me.
00:32:23.480 --> 00:32:25.407
Well put, couldn't
say it better,
00:32:25.407 --> 00:32:26.960
and I'm glad that we're keeping
00:32:26.960 --> 00:32:30.083
the system administration
fee flat for the time being,
00:32:30.950 --> 00:32:33.130
and I know the new board
00:32:33.130 --> 00:32:38.130
would welcome your input on
sorting out all of those issues
00:32:39.380 --> 00:32:41.833
and working to
optimize the organization.
00:32:43.600 --> 00:32:45.080
Any other thoughts, comments?
00:32:45.080 --> 00:32:48.580
Yeah, so, I support the
approval of the budget.
00:32:48.580 --> 00:32:53.580
And I also would like to
make some comments
00:32:53.810 --> 00:32:56.080
with respect to the
tremendous amount of work
00:32:56.080 --> 00:32:59.840
that ERCOT has on their
plate, a growing amount of work.
00:32:59.840 --> 00:33:01.580
Not only through all of the projects
00:33:01.580 --> 00:33:03.063
that they prioritize now,
00:33:04.020 --> 00:33:06.070
finishing the implementation
of securitization,
00:33:06.070 --> 00:33:08.380
any market design, implementation
00:33:08.380 --> 00:33:12.200
that we direct them to complete.
00:33:12.200 --> 00:33:16.550
And I just really wanted
to stay mindful and vigilant
00:33:16.550 --> 00:33:18.737
that we cannot let the ERCOT budget
00:33:18.737 --> 00:33:22.540
and their lack of resources
or inability to hire staff
00:33:22.540 --> 00:33:27.540
get in the way of our
tremendous, consistent
00:33:28.080 --> 00:33:32.520
and strong efforts to
maintain grid reliability.
00:33:32.520 --> 00:33:35.210
And so, that we've
had ongoing discussions
00:33:35.210 --> 00:33:40.210
about the impacts on
settlement staff, the EMS upgrade,
00:33:40.980 --> 00:33:44.840
we're keeping this
staff fee flat, that's great.
00:33:44.840 --> 00:33:49.840
But at the same time, if there
is a need to hire more staff,
00:33:50.780 --> 00:33:53.738
if there is a need to hire contractors,
00:33:53.738 --> 00:33:57.290
I really would like to
strongly encourage ERCOT
00:33:57.290 --> 00:34:01.510
to continue to communicate
with their board and with us
00:34:01.510 --> 00:34:06.510
because we cannot let
you know staff shortages
00:34:07.150 --> 00:34:08.600
or anything get in the way
00:34:08.600 --> 00:34:11.020
of us maintaining rigor liability.
00:34:11.020 --> 00:34:12.530
Because we heard over and over,
00:34:12.530 --> 00:34:14.416
the EMS upgrade it's taken a while,
00:34:14.416 --> 00:34:16.170
it's on time, it's under budget,
00:34:16.170 --> 00:34:19.660
but it's got to stay on time,
it has to stay under budget,
00:34:19.660 --> 00:34:23.540
it is essentially a big project
00:34:23.540 --> 00:34:25.050
in the middle of our market redesign
00:34:25.050 --> 00:34:26.700
that we're having to work around,
00:34:27.950 --> 00:34:30.640
any other proposals
that we ultimately adopt
00:34:30.640 --> 00:34:32.787
will have an impact on settlement staff
00:34:32.787 --> 00:34:34.950
and that's going to cause delays too.
00:34:34.950 --> 00:34:37.040
So, I just want to make sure
00:34:37.040 --> 00:34:41.910
that ERCOT is doing everything
they can to get resources,
00:34:41.910 --> 00:34:43.770
to address these high,
00:34:43.770 --> 00:34:46.750
extremely, critically
important high-priority items.
00:34:46.750 --> 00:34:47.583
The other thing,
00:34:47.583 --> 00:34:49.070
kind of a minor issue
that I wanted to bring up,
00:34:49.070 --> 00:34:51.810
I noted in the correspondence
00:34:51.810 --> 00:34:53.510
that we reviewed for this meeting
00:34:53.510 --> 00:34:56.230
that ERCOT experiencing new demands
00:34:56.230 --> 00:34:58.240
related weatherization
stability assessments
00:34:58.240 --> 00:34:59.760
for interconnecting generators,
00:34:59.760 --> 00:35:02.483
interconnection study
increases in grid forecasting.
00:35:03.547 --> 00:35:05.570
As a matter of due diligence
00:35:05.570 --> 00:35:10.570
to look for other streams of revenue,
00:35:10.650 --> 00:35:12.530
I would like for ERCOT to evaluate
00:35:12.530 --> 00:35:16.360
whether the interconnection
study fees should be increased
00:35:16.360 --> 00:35:18.800
and any fees that should be increased,
00:35:18.800 --> 00:35:20.670
because if they're under a
tremendous amount of pressure
00:35:20.670 --> 00:35:23.920
to conduct interconnection studies,
00:35:23.920 --> 00:35:27.083
we wanna make sure
that that fee is appropriate.
00:35:27.930 --> 00:35:28.763
Yeah, absolutely.
00:35:28.763 --> 00:35:31.297
I have heard that
they are low in ERCOT.
00:35:31.297 --> 00:35:32.840
More barriers to entry,
00:35:32.840 --> 00:35:34.952
we don't want too high barrier to entry.
00:35:34.952 --> 00:35:35.785
Right.
00:35:35.785 --> 00:35:37.171
But we want some
barrier to the entry.
00:35:37.171 --> 00:35:38.630
But we wanna make
sure that we're up to parody
00:35:38.630 --> 00:35:40.983
with the other ISOs and RTOs.
00:35:42.570 --> 00:35:43.403
Agreed.
00:35:44.750 --> 00:35:45.680
Like any organization,
00:35:45.680 --> 00:35:48.020
it's a balance between
having the resources you need
00:35:48.020 --> 00:35:51.723
without being bloated and inefficient,
00:35:53.854 --> 00:35:55.280
that's challenging the organization,
00:35:55.280 --> 00:35:58.870
and I agree that that
needs to be looked at,
00:35:58.870 --> 00:36:02.090
and I'm sure the new board
would also welcome your input
00:36:02.090 --> 00:36:04.253
on that kind of improvement.
00:36:05.650 --> 00:36:10.573
And like we've all got a
board meeting next week.
00:36:11.820 --> 00:36:15.130
So, I know the new board
will welcome all of this input
00:36:15.130 --> 00:36:19.660
and we'll work to
optimize that organization.
00:36:19.660 --> 00:36:21.513
We don't wanna gut it,
and we don't want it bloat it,
00:36:21.513 --> 00:36:22.346
we need to make it
00:36:22.346 --> 00:36:24.980
the highest performing
organization it can be
00:36:24.980 --> 00:36:28.653
to deliver the services
required for citizens in ERCOT.
00:36:30.960 --> 00:36:32.560
All right.
00:36:32.560 --> 00:36:34.490
One last comment, Mr. Shawn,
00:36:34.490 --> 00:36:35.580
I appreciated the opportunity
00:36:35.580 --> 00:36:37.410
to be able to speak to the ERCOT budget.
00:36:37.410 --> 00:36:40.460
I think that the fact that
we are discussing it here
00:36:40.460 --> 00:36:43.070
signals that the Commission
is going to be more active,
00:36:43.070 --> 00:36:44.990
especially in this period
00:36:44.990 --> 00:36:47.260
where the board is orienting itself
00:36:47.260 --> 00:36:50.550
to the governance of
ERCOT, subject to SB 2.
00:36:50.550 --> 00:36:52.053
So, this budget,
00:36:53.380 --> 00:36:57.280
gratefully, ERCOT staff
has organized it in a way
00:36:57.280 --> 00:37:00.120
where we can maintain
the current feed levels,
00:37:00.120 --> 00:37:02.820
but in the future, make
a good faith assessment
00:37:02.820 --> 00:37:04.700
of what those needs
need to be moving forward,
00:37:04.700 --> 00:37:08.524
especially in light of
any type of redesign
00:37:08.524 --> 00:37:13.470
and reform effort directed
from the Commission.
00:37:13.470 --> 00:37:16.510
I think we need to be diligent
00:37:16.510 --> 00:37:20.621
and proactive with ERCOT staff
00:37:20.621 --> 00:37:22.960
and what those individual programs are
00:37:22.960 --> 00:37:25.890
and those individual
costs associated with them.
00:37:25.890 --> 00:37:27.730
We have all been active in this process,
00:37:27.730 --> 00:37:31.883
leading up on those top-line
issues that they look at EMS,
00:37:32.940 --> 00:37:34.970
all of the settlement functions
00:37:34.970 --> 00:37:36.380
in the settlement
engine, moving forward.
00:37:36.380 --> 00:37:39.120
Anything that would delay
any type of reform effort,
00:37:39.120 --> 00:37:42.690
but we're about to go into
the weeds of reform now.
00:37:42.690 --> 00:37:44.680
I mean, we're gonna
transition to phase two,
00:37:44.680 --> 00:37:46.120
which is implementation.
00:37:46.120 --> 00:37:48.210
So, I appreciate the opportunity
00:37:48.210 --> 00:37:51.050
to be diligent about what
they need moving forward
00:37:51.050 --> 00:37:52.860
and how much this is really gonna cost.
00:37:52.860 --> 00:37:56.303
But in the past, under
the deregulated construct,
00:37:57.210 --> 00:38:02.210
we were able to bless
more in the ERCOT budget,
00:38:02.670 --> 00:38:03.690
but now, we're talking
00:38:03.690 --> 00:38:08.690
about un-bundling a
lot of regulatory functions
00:38:09.020 --> 00:38:14.020
into more granular, specific
ancillary service functions.
00:38:14.290 --> 00:38:15.950
So, that's gonna incur costs,
00:38:15.950 --> 00:38:18.470
that's gonna incur staff
time to manage that.
00:38:18.470 --> 00:38:21.370
Because again, the system
becomes more proactive
00:38:21.370 --> 00:38:23.150
rather than just reactive
00:38:23.150 --> 00:38:26.180
to the way market participants behave
00:38:26.180 --> 00:38:29.140
and the way all these
products act together.
00:38:29.140 --> 00:38:33.080
So, with that, I am
comfortable with this budget,
00:38:33.080 --> 00:38:35.770
appreciate the work that
has gone into it at staff level
00:38:35.770 --> 00:38:39.477
in both agencies, both ERCOT and PUC,
00:38:39.477 --> 00:38:41.490
and look forward to it's approval.
00:38:41.490 --> 00:38:42.323
Thank you.
00:38:44.373 --> 00:38:47.950
Is there a motion to
approve the proposed order?
00:38:47.950 --> 00:38:49.100
So moved.
00:38:49.100 --> 00:38:50.460
Second.
00:38:50.460 --> 00:38:51.293
All in favor, say, aye.
00:38:51.293 --> 00:38:52.900
Aye.
Aye.
00:38:52.900 --> 00:38:55.200
None opposed, motion
passes, thank you, Casey.
00:38:56.200 --> 00:38:57.603
Next item, please.
00:39:00.200 --> 00:39:03.700
Item 10 is project
501830, is review
00:39:03.700 --> 00:39:07.990
of certain retail electric
customer protection rules,
00:39:07.990 --> 00:39:11.423
I believe the memo
was filed 2nd November.
00:39:15.620 --> 00:39:16.453
Mr. Smeltzer.
00:39:18.031 --> 00:39:18.864
Good morning, Commissioners,
00:39:18.864 --> 00:39:20.130
David Smeltzer, Commission staff.
00:39:23.180 --> 00:39:25.130
This is, as you know, the rulemaking
00:39:25.130 --> 00:39:28.850
that started off with the
premise of implementing HB 16,
00:39:28.850 --> 00:39:32.020
which is the ban on wholesale
index prices in our market
00:39:32.020 --> 00:39:35.100
As part of developing this
rulemaking, you asked us to,
00:39:35.100 --> 00:39:38.870
and we did include a few
additional customer protections
00:39:38.870 --> 00:39:40.570
and also a few briefing questions.
00:39:41.840 --> 00:39:43.790
With the tight schedule we've had,
00:39:43.790 --> 00:39:45.330
this rule's a little bit behind
00:39:45.330 --> 00:39:46.440
where we would like it to have been,
00:39:46.440 --> 00:39:47.880
but if we're going to
change the polar rate,
00:39:47.880 --> 00:39:52.690
it would be good to do that
by next year when it resets.
00:39:52.690 --> 00:39:55.380
And so, and able to allow us
00:39:55.380 --> 00:39:57.650
to get it right on the first
try for next open meeting,
00:39:57.650 --> 00:39:58.960
we filed a few brief questions.
00:39:58.960 --> 00:40:01.980
Should you have any
input on any of them?
00:40:01.980 --> 00:40:02.813
We're happy to hear it,
00:40:02.813 --> 00:40:06.210
if not, we can proceed
under our best judgment.
00:40:06.210 --> 00:40:08.180
But these were sort of
the big policy questions
00:40:08.180 --> 00:40:09.360
that Commissioner Cobos
00:40:09.360 --> 00:40:10.890
in particular assets
to file questions on,
00:40:10.890 --> 00:40:14.930
but willing to hear input
from anyone who may have it.
00:40:14.930 --> 00:40:16.210
I'm happy to walk you
guys through those,
00:40:16.210 --> 00:40:17.943
or you have the memo.
00:40:18.880 --> 00:40:19.713
Yeah.
00:40:19.713 --> 00:40:21.700
I don't know if this is
something you've spent a lot of,
00:40:21.700 --> 00:40:22.960
or this area of the market
00:40:22.960 --> 00:40:24.510
is something you spent a lot of time on,
00:40:24.510 --> 00:40:27.530
so, happy to defer to you
to take the lead on this.
00:40:27.530 --> 00:40:28.800
Okay.
00:40:28.800 --> 00:40:31.990
David, I think would be most
helpful to go issue by issue
00:40:31.990 --> 00:40:34.240
and just kind of give us the context
00:40:34.240 --> 00:40:35.860
and then we can have a discussion
00:40:35.860 --> 00:40:38.270
and give you direction
on issue by issue,
00:40:38.270 --> 00:40:39.500
or question by question there.
00:40:39.500 --> 00:40:40.620
Sure.
00:40:40.620 --> 00:40:43.620
So, the first issue is when we,
00:40:43.620 --> 00:40:46.350
staff's proposal for what
the polar rate should be
00:40:46.350 --> 00:40:51.220
was to get out the realtime
price component of it
00:40:52.150 --> 00:40:54.160
the project team had proposed
00:40:54.160 --> 00:40:56.350
going back and looking at the prior year
00:40:56.350 --> 00:40:58.650
and getting an average of the
wholesale price for that year.
00:40:58.650 --> 00:40:59.790
So, it was still somewhat key
00:40:59.790 --> 00:41:02.190
to what's going on in the market,
00:41:02.190 --> 00:41:04.070
but then give a 20% increase on that
00:41:04.070 --> 00:41:06.020
for the added risk that a rep takes
00:41:06.020 --> 00:41:09.180
for the potential that
they could have to assume
00:41:09.180 --> 00:41:10.880
a large customer base all at once.
00:41:11.986 --> 00:41:14.020
The first, one of the questions
that you'd asked us to ask
00:41:14.020 --> 00:41:16.440
was, well, if there spikes or anything,
00:41:16.440 --> 00:41:18.430
do we need a year-over-year protection
00:41:18.430 --> 00:41:21.730
to prevent it from increasing
more than a certain amount?
00:41:21.730 --> 00:41:24.130
Should that be the case?
00:41:24.130 --> 00:41:25.743
That's the policy issue.
00:41:27.806 --> 00:41:29.710
And I think, so, on one side of it,
00:41:29.710 --> 00:41:31.190
the customer protection aspect of it,
00:41:31.190 --> 00:41:33.750
on the other side of it, I think
that the would argue, hey,
00:41:33.750 --> 00:41:36.110
the customers are
only here for one month
00:41:36.110 --> 00:41:37.240
and they can change
if they don't like it.
00:41:37.240 --> 00:41:41.320
So, I think this is a
just sort of a high-level
00:41:41.320 --> 00:41:42.350
sort of policy question
00:41:42.350 --> 00:41:44.573
for how we want polar rates to function.
00:41:45.600 --> 00:41:46.433
So, yes.
00:41:46.433 --> 00:41:47.500
And as I had explained
00:41:47.500 --> 00:41:49.900
at the prior open meeting back in July,
00:41:49.900 --> 00:41:53.530
this issue is a balance
between protecting customers
00:41:53.530 --> 00:41:55.210
and helping to ensure that the reps
00:41:55.210 --> 00:41:57.430
who have to bring on new customers
00:41:57.430 --> 00:41:59.550
as a result of a mass transition
00:42:01.930 --> 00:42:04.900
are not financial impacted
by serving as a polar,
00:42:04.900 --> 00:42:06.020
provider of last resort.
00:42:06.020 --> 00:42:07.540
And so, what I had suggested,
00:42:07.540 --> 00:42:09.340
was including a safety threshold
00:42:10.200 --> 00:42:13.010
so that we can further protect consumers
00:42:13.010 --> 00:42:15.220
from swings and real-time
settlement point prices.
00:42:15.220 --> 00:42:17.760
As you may recall from Winter Storm Uri,
00:42:17.760 --> 00:42:18.880
that was a tremendous impact
00:42:18.880 --> 00:42:21.490
because of the wholesale
price index plans
00:42:21.490 --> 00:42:25.340
that were being delivered at the time.
00:42:25.340 --> 00:42:28.750
And so, the safety
threshold that I had presented
00:42:28.750 --> 00:42:30.160
would provide additional protections
00:42:30.160 --> 00:42:32.570
to help ensure that
consumers are further protected
00:42:32.570 --> 00:42:35.600
from significant swings in
time settlement point prices.
00:42:35.600 --> 00:42:37.210
So, I had thought about putting,
00:42:37.210 --> 00:42:39.090
maybe like some kind of a percentage.
00:42:39.090 --> 00:42:42.420
At the time, I didn't have an exact one,
00:42:42.420 --> 00:42:46.070
I think for example, I put
one out there, maybe 5%,
00:42:46.070 --> 00:42:49.150
just as an added protection
in case we were to have a year
00:42:49.150 --> 00:42:52.253
where real-time settlement
point of prices were very high.
00:42:54.150 --> 00:42:55.790
So, that's the way I laid out the issue.
00:42:55.790 --> 00:42:59.890
I continued to support
a safety threshold,
00:42:59.890 --> 00:43:01.520
I think is as a matter of due diligence
00:43:01.520 --> 00:43:03.150
for further protection
for the consumers,
00:43:03.150 --> 00:43:05.013
and I'd be happy to hear your thoughts.
00:43:05.950 --> 00:43:07.563
So, which threshold are you?
00:43:09.200 --> 00:43:13.478
I mean, we could start
it at 5% from year to year,
00:43:13.478 --> 00:43:15.160
that was sort of what
I had put out there,
00:43:15.160 --> 00:43:18.963
it's a percentage safety threshold.
00:43:20.250 --> 00:43:21.083
And staffs.
00:43:23.310 --> 00:43:26.300
The staff have a benchmark.
00:43:26.300 --> 00:43:30.910
I think the cap
that was discussed
00:43:30.910 --> 00:43:33.530
quite a bit in the comments was 20%.
00:43:33.530 --> 00:43:34.363
And now I guess,
00:43:34.363 --> 00:43:38.040
to the price premium
for the polar calculation.
00:43:38.040 --> 00:43:41.540
And so, that's what we were working with
00:43:41.540 --> 00:43:44.530
and would put in our
recommendation absent
00:43:44.530 --> 00:43:45.850
for other direction.
00:43:45.850 --> 00:43:46.683
Okay.
00:43:46.683 --> 00:43:49.490
And that's based on stakeholder
comment and your analysis,
00:43:49.490 --> 00:43:53.200
and I'm happy to consider
that as a good point.
00:43:53.200 --> 00:43:54.033
Okay.
00:43:54.033 --> 00:43:57.033
And that seems like
a good starting point,
00:43:57.960 --> 00:43:59.250
thank you for laying that out.
00:43:59.250 --> 00:44:02.803
Other thoughts and comments
on the first issue at hand?
00:44:03.860 --> 00:44:05.250
Yeah.
00:44:05.250 --> 00:44:10.240
So, it'll come up later as we
move through the questions,
00:44:10.240 --> 00:44:15.240
but I think the bill was
specifically designed,
00:44:15.620 --> 00:44:18.880
and I've engaged
with one of the authors,
00:44:18.880 --> 00:44:22.573
I'm not gonna say which,
to perceive legislative intent.
00:44:25.420 --> 00:44:28.960
They want us to continue to
have flexibility in the market
00:44:28.960 --> 00:44:29.793
to an extent.
00:44:29.793 --> 00:44:31.630
They want us to address the problems
00:44:31.630 --> 00:44:34.000
that were identified certainly,
00:44:34.000 --> 00:44:36.330
but they don't want
everything to be a nail
00:44:36.330 --> 00:44:39.610
to where we tack it down so rigidly
00:44:39.610 --> 00:44:41.400
that there is no flexibility
00:44:41.400 --> 00:44:46.400
for the retail middlemen
to negotiate better value
00:44:46.650 --> 00:44:51.430
for the consumer disclosed
value, known value,
00:44:51.430 --> 00:44:53.510
rather than fixed means fixed.
00:44:53.510 --> 00:44:57.280
But as long as you sign off
00:44:57.280 --> 00:44:59.010
and you kind of
understand the parameters
00:44:59.010 --> 00:45:01.960
of what you're agreeing to,
is transparency in contracting.
00:45:03.980 --> 00:45:07.910
But let's stay on topic
one and we'll debate that.
00:45:07.910 --> 00:45:12.910
So, my point is caps
sometimes have a distorting effect
00:45:13.060 --> 00:45:15.353
in retail markets.
00:45:17.250 --> 00:45:21.140
And again, it wasn't addressed
necessarily in the statute.
00:45:21.140 --> 00:45:25.450
So, at this time, but again,
Commissioner, I bow,
00:45:25.450 --> 00:45:29.540
your interest in protecting
the consumer is paramount,
00:45:29.540 --> 00:45:32.213
but at this time,
00:45:33.700 --> 00:45:36.650
if it's not in the directive
from the legislature,
00:45:36.650 --> 00:45:38.280
should we impose this cap now,
00:45:38.280 --> 00:45:40.283
or readdress it moving forward?
00:45:41.580 --> 00:45:42.490
What are your thoughts?
00:45:42.490 --> 00:45:46.250
Well, and thank you for
speaking to legislative intent.
00:45:46.250 --> 00:45:48.860
When I look at legislation,
I read the letter of the law,
00:45:48.860 --> 00:45:50.480
that that's what we have to do.
00:45:50.480 --> 00:45:54.610
And so, with respect to HB 16,
00:45:54.610 --> 00:45:57.440
there is specific language in there
00:45:57.440 --> 00:46:00.900
that states that no
provision in Piera 391110
00:46:00.900 --> 00:46:02.650
shall be construed to
prohibit the Commission
00:46:02.650 --> 00:46:03.850
from adopting rules
00:46:03.850 --> 00:46:06.250
that would provide a greater
degree of customer protection.
00:46:06.250 --> 00:46:07.160
That's true.
00:46:07.160 --> 00:46:10.403
And under Piera 39101,
00:46:12.130 --> 00:46:14.870
the Commission will ensure
that retail customer protections
00:46:14.870 --> 00:46:17.160
are established that entitled
customer to say for liable
00:46:17.160 --> 00:46:19.450
and reasonably priced
electricity and protections.
00:46:19.450 --> 00:46:23.320
So, we have brought it
already under existing 39101
00:46:23.320 --> 00:46:26.600
and HB 16 itself says that
we can go above and beyond
00:46:26.600 --> 00:46:28.820
the wholesale price
index plan prohibition.
00:46:28.820 --> 00:46:31.990
And so, based on my experience at OPEC,
00:46:31.990 --> 00:46:33.840
I believe that we should
do everything we can
00:46:33.840 --> 00:46:35.250
to protect consumers in the future
00:46:35.250 --> 00:46:38.310
should we have another major storm
00:46:38.310 --> 00:46:40.730
that busts the seams
in our retail market,
00:46:40.730 --> 00:46:43.870
and we have consumers
that are exposed to costs
00:46:43.870 --> 00:46:48.283
that we can help to close
the door on right now today.
00:46:49.237 --> 00:46:50.070
Right, I hear you.
00:46:50.070 --> 00:46:53.520
I'm trying to, at the minimum,
00:46:53.520 --> 00:46:56.240
follow the clear
directives of the statute.
00:46:56.240 --> 00:46:57.100
Anything over and above,
00:46:57.100 --> 00:47:00.380
we can absolutely certainly
do and should consider it.
00:47:00.380 --> 00:47:02.360
So, I bound that argument.
00:47:02.360 --> 00:47:03.193
Jeremy.
00:47:06.155 --> 00:47:06.988
Oh, boy.
00:47:09.550 --> 00:47:10.810
Not totally the issue
00:47:10.810 --> 00:47:12.800
that I have spent a whole lot of time
00:47:12.800 --> 00:47:14.890
focusing on this week, I apologize.
00:47:14.890 --> 00:47:16.900
No, we've all
got a lot going on.
00:47:16.900 --> 00:47:18.050
Yes, ma'am.
00:47:18.050 --> 00:47:19.150
If it's helpful,
00:47:19.150 --> 00:47:23.680
and it may be helpful to those
watching and the public too,
00:47:23.680 --> 00:47:26.850
this particular question is focused
00:47:26.850 --> 00:47:31.790
solely on the calculation of
the maximum allowed polar price
00:47:31.790 --> 00:47:35.770
and wouldn't affect any
general prices in the retail market.
00:47:35.770 --> 00:47:37.790
So, that might be helpful
00:47:38.684 --> 00:47:42.493
as you work through your
discussion to keep that in mind.
00:47:43.476 --> 00:47:46.150
And 20% is a
significant percentage,
00:47:46.150 --> 00:47:49.970
I mean, that's not a
very tight threshold.
00:47:49.970 --> 00:47:53.190
I mean, there's still
some flexibility there.
00:47:53.190 --> 00:47:54.943
That's right.
It's not 5%.
00:47:56.850 --> 00:47:57.925
Exactly.
00:47:57.925 --> 00:48:00.040
I mean, I just threw that
out there as an example.
00:48:00.040 --> 00:48:04.357
I guess the first
question is cap,
00:48:09.890 --> 00:48:11.060
Should there be a cap?
00:48:11.060 --> 00:48:14.520
If so, and I think, I
mean, I think, yes,
00:48:14.520 --> 00:48:16.160
what should that number be?
00:48:16.160 --> 00:48:18.293
20%, 50%?
00:48:19.350 --> 00:48:22.210
I mean, if prices don't move
much in a year, 20% is a lot,
00:48:22.210 --> 00:48:24.859
if they double in a year,
20% is not nearly enough.
00:48:24.859 --> 00:48:26.095
Right.
00:48:26.095 --> 00:48:27.873
And the reps getting,
00:48:29.276 --> 00:48:30.109
are losing money.
00:48:30.109 --> 00:48:33.841
And that's driven primarily
by probably gas prices here,
00:48:33.841 --> 00:48:35.040
is that right?
00:48:35.040 --> 00:48:38.960
Now, it's 50% of the
fleet that can change.
00:48:38.960 --> 00:48:40.483
Gas prices can go,
00:48:41.910 --> 00:48:43.650
they were a dollar, 50 two years ago.
00:48:43.650 --> 00:48:44.698
That's my point.
00:48:44.698 --> 00:48:45.531
Yeah.
00:48:45.531 --> 00:48:48.890
So, I would rather
base the percentage
00:48:48.890 --> 00:48:53.320
on actual submitted stakeholder
comments and documentation
00:48:53.320 --> 00:48:54.220
that's in,
00:48:54.220 --> 00:48:56.260
it's not a contested
case, but it's in the record.
00:48:56.260 --> 00:48:58.060
So, that's why I would lean towards 20%
00:48:58.060 --> 00:49:00.230
because I'd rather not
pick an arbitrary number.
00:49:00.230 --> 00:49:01.063
I'm okay with that.
00:49:01.063 --> 00:49:01.896
Me too.
Yeah.
00:49:01.896 --> 00:49:03.580
And knowing that you
guys are interested in this,
00:49:03.580 --> 00:49:04.640
I mean, the way we would implement it,
00:49:04.640 --> 00:49:08.250
sort of a lesser of 20% of,
00:49:08.250 --> 00:49:11.440
above the average prices from last year,
00:49:11.440 --> 00:49:13.730
but it would also be capped.
00:49:13.730 --> 00:49:14.650
So, it would just be a cap,
00:49:14.650 --> 00:49:16.290
it wouldn't always go up 20% each year,
00:49:16.290 --> 00:49:17.257
is what I'm trying to say.
00:49:17.257 --> 00:49:20.160
And the average
reduces a lot of the volatility.
00:49:20.160 --> 00:49:21.907
Correct.
As well.
00:49:21.907 --> 00:49:24.730
And we will go back
through the comments
00:49:24.730 --> 00:49:29.730
and ensure that we've fully
captured and considered,
00:49:31.940 --> 00:49:34.150
in the draft order,
00:49:34.150 --> 00:49:36.130
all of the comments
related to this topic
00:49:36.130 --> 00:49:40.980
so that you may select a
number based on that record,
00:49:40.980 --> 00:49:44.750
but our recommendation
will come in at 20%.
00:49:44.750 --> 00:49:45.630
Good deal.
00:49:45.630 --> 00:49:46.463
Thank you.
00:49:46.463 --> 00:49:47.640
Next item, Mr. Smeltzer.
00:49:49.248 --> 00:49:52.360
So, another item
that we had decided,
00:49:52.360 --> 00:49:54.500
this was the fixed
means, fixed conversation,
00:49:54.500 --> 00:49:57.210
it's whether or not
ancillary services charges
00:49:57.210 --> 00:50:00.600
are a component of the
price for a fixed-rate product.
00:50:00.600 --> 00:50:01.860
And so, the issue there
00:50:01.860 --> 00:50:05.150
is typically if they are under the rule,
00:50:05.150 --> 00:50:09.240
if there are new charges
that reps are not aware of,
00:50:09.240 --> 00:50:11.260
they often are allowed to vary prices,
00:50:11.260 --> 00:50:13.420
even in fixed rate
contracts based on that,
00:50:13.420 --> 00:50:14.500
I think staff's interpretation
00:50:14.500 --> 00:50:16.500
has always been that ancillary services
00:50:16.500 --> 00:50:18.670
are not one of those
things that count as new.
00:50:18.670 --> 00:50:22.010
But I think in a world where
we're increasing the amount
00:50:22.010 --> 00:50:23.240
of ancillary service that we purchase,
00:50:23.240 --> 00:50:24.310
and there's also the possibility
00:50:24.310 --> 00:50:26.480
that new ancillary
services could be adopted,
00:50:26.480 --> 00:50:28.130
the retail provider community
00:50:28.130 --> 00:50:31.480
argues that they want
flexibility to adjust prices
00:50:31.480 --> 00:50:32.750
based on these new charges
00:50:32.750 --> 00:50:34.490
would not have been predicted to them.
00:50:34.490 --> 00:50:36.950
The other side of that
argument broadly speaking,
00:50:36.950 --> 00:50:41.110
is that our market design
is trying to rest the risk
00:50:41.110 --> 00:50:42.510
in public entities
00:50:42.510 --> 00:50:44.300
and that the retail
electric product community
00:50:44.300 --> 00:50:47.070
sort of position a shield
against consumers,
00:50:47.070 --> 00:50:48.480
against that risk for consumers.
00:50:48.480 --> 00:50:49.910
And so, I guess the question here,
00:50:49.910 --> 00:50:53.910
is if new ancillary services
are adopted or increased,
00:50:53.910 --> 00:50:55.450
we want the risk of that price
00:50:55.450 --> 00:50:58.360
to rest with the end consumers
00:50:58.360 --> 00:51:00.950
or with the retail electric providers.
00:51:00.950 --> 00:51:02.320
Thank you, Mr. Smeltzer again,
00:51:02.320 --> 00:51:04.510
or former OPEC, I'll defer to you to.
00:51:04.510 --> 00:51:07.000
Well, I was going to
say that I was gonna defer
00:51:07.000 --> 00:51:08.930
to Chairman Lake and
Commissioner McAdams
00:51:08.930 --> 00:51:09.890
to state where they are today
00:51:09.890 --> 00:51:12.090
since they're the ones
that introduced this concept.
00:51:12.090 --> 00:51:14.810
And then I'll follow back
up and- Sure.
00:51:14.810 --> 00:51:17.060
As I've said, I mean, we've
discussed many times,
00:51:17.060 --> 00:51:20.933
fixed means fixed, and as
Mr. Smeltzer nicely laid out,
00:51:22.270 --> 00:51:27.120
price risk should lie on
the private financial entity,
00:51:27.120 --> 00:51:29.630
not on individual
customers and households
00:51:30.660 --> 00:51:33.350
and companies that are better
at managing financial risks
00:51:33.350 --> 00:51:35.313
will be rewarded with market share.
00:51:38.090 --> 00:51:40.217
I agree, I agreed the
last time we discussed it,
00:51:40.217 --> 00:51:43.623
and I agree now, fixed means fixed.
00:51:44.690 --> 00:51:46.100
Okay.
00:51:46.100 --> 00:51:47.200
I would like to note something
00:51:47.200 --> 00:51:49.670
that I think OPEC
filed in their comments
00:51:49.670 --> 00:51:51.920
and I've gone back and reviewed,
00:51:51.920 --> 00:51:54.340
and that is an order
that was issued in 2009,
00:51:54.340 --> 00:51:56.323
adopting rule 25475.
00:51:57.270 --> 00:52:01.380
The Commission's response
to comments that were filed,
00:52:01.380 --> 00:52:06.380
specifically stated that the
Commission clarified basically
00:52:07.390 --> 00:52:08.920
that fixed-rate product
00:52:08.920 --> 00:52:10.940
or fees include fees
approved by the Commission
00:52:10.940 --> 00:52:12.270
and charges to load
00:52:12.270 --> 00:52:15.430
such as ERCOT
administrative fees and nodal fee
00:52:15.430 --> 00:52:16.970
should it be charged
with loads in the future.
00:52:16.970 --> 00:52:19.220
Under that definition
of fixed rate product,
00:52:19.220 --> 00:52:22.083
ERCOT fees would not
include ancillary services,
00:52:23.210 --> 00:52:26.280
losses, or unaccounted for
energy charges for TRE penalties.
00:52:26.280 --> 00:52:30.620
So, the order adopting
25475 that we are replacing,
00:52:30.620 --> 00:52:32.020
that was their position back then,
00:52:32.020 --> 00:52:32.853
that fixed rate product
00:52:32.853 --> 00:52:35.470
did not include
ancillary service charges.
00:52:35.470 --> 00:52:38.130
And so, those would not be able
00:52:38.130 --> 00:52:40.160
to patent past through
a fixed rate product.
00:52:40.160 --> 00:52:41.410
Right, it's consistent.
00:52:43.450 --> 00:52:45.200
Yes, Commission
staff understands,
00:52:45.200 --> 00:52:46.535
this as just providing a clarification
00:52:46.535 --> 00:52:48.480
on what we already
interpreted the lot to be,
00:52:48.480 --> 00:52:50.430
but I guess there was enough ambiguity.
00:52:52.250 --> 00:52:54.910
The stakeholders
raised questions of him.
00:52:54.910 --> 00:52:56.410
Yes, sir.
Yeah.
00:52:56.410 --> 00:52:58.700
Does this affect existing
fixed-rate products,
00:52:58.700 --> 00:53:00.123
or is this just perspective?
00:53:01.350 --> 00:53:02.720
Sir, again, I think
00:53:02.720 --> 00:53:05.160
that if that Commission
staff's perspective
00:53:05.160 --> 00:53:07.730
is that this is already what
our interpretation of the law
00:53:07.730 --> 00:53:08.563
would have been,
00:53:08.563 --> 00:53:09.510
ancillary services are not something
00:53:09.510 --> 00:53:11.790
that reps can vary the price
of the contracts based on,
00:53:11.790 --> 00:53:13.029
but this would clarify.
00:53:13.029 --> 00:53:16.850
So, to the extent that we
could be wrong about that,
00:53:16.850 --> 00:53:17.720
this clarification
00:53:17.720 --> 00:53:21.660
would only affect
contracts moving forward,
00:53:21.660 --> 00:53:24.860
but our interpretation is that
it that's already the law now
00:53:24.860 --> 00:53:28.350
with what we would argue
if it ever came up in a case.
00:53:28.350 --> 00:53:29.713
And I will say that,
00:53:30.800 --> 00:53:33.950
recognizing the actions
that we're taking this summer,
00:53:33.950 --> 00:53:36.340
that I've had conversations
with reps myself.
00:53:36.340 --> 00:53:40.490
And the goal here is
to try work really hard
00:53:40.490 --> 00:53:41.370
to provide transparency
00:53:41.370 --> 00:53:44.020
in ancillary service costs in
the future work with ERCOT
00:53:44.020 --> 00:53:47.513
as they look to approve their
ancillary service methodology,
00:53:48.440 --> 00:53:51.240
to ensure that we're
providing as much transparency
00:53:51.240 --> 00:53:53.740
going forward on the ancillary services
00:53:53.740 --> 00:53:55.390
that ERCOT is procuring in the future.
00:53:55.390 --> 00:53:57.830
I mean, we are expected to
stay in conservative operations
00:53:57.830 --> 00:54:00.100
so that that should
provide some transparency
00:54:00.100 --> 00:54:01.700
as to where we're headed.
00:54:01.700 --> 00:54:04.040
ECRS has not been scoped out yet,
00:54:04.040 --> 00:54:09.040
but as we reach the final
stages of ECRS go-live,
00:54:10.530 --> 00:54:12.730
making sure that we're
providing more transparency
00:54:12.730 --> 00:54:13.640
to the retail market
00:54:13.640 --> 00:54:16.390
so they can adjust and
hedge appropriately their costs.
00:54:17.630 --> 00:54:19.470
Yeah, the one other thing
that I would cite on this,
00:54:19.470 --> 00:54:24.470
is if ancillary services
are not, or are outside,
00:54:25.619 --> 00:54:26.940
or we're making sure
00:54:26.940 --> 00:54:29.570
that they go inside the
component of the fixed rate,
00:54:29.570 --> 00:54:31.664
these rates will be adjusted
00:54:31.664 --> 00:54:34.280
at some point in time in
the future with a risk premium
00:54:34.280 --> 00:54:37.410
associated for ancillary
services that are not included.
00:54:37.410 --> 00:54:39.760
It's ultimately, the
consumer is gonna pay this,
00:54:39.760 --> 00:54:42.420
whether it is ancillary services
00:54:42.420 --> 00:54:43.710
outside the fixed-rate contract
00:54:43.710 --> 00:54:45.580
or within the fixed-rate contract.
00:54:45.580 --> 00:54:50.580
And it's my view that the
retail providers won't eat this,
00:54:51.110 --> 00:54:53.320
these are market costs
that are put on them
00:54:53.320 --> 00:54:55.330
that will ultimately get passed
through to the customer,
00:54:55.330 --> 00:54:56.750
whether they do it now
00:54:56.750 --> 00:54:59.010
or with prospective
contracts going forward.
00:54:59.010 --> 00:55:02.670
So, my point is, let's not
go into this with blinders
00:55:02.670 --> 00:55:05.080
that the reps are gonna eat this cost.
00:55:05.080 --> 00:55:08.420
It's not gonna happen that way,
these are system-wide costs,
00:55:08.420 --> 00:55:11.400
ancillary services are system-wide costs
00:55:11.400 --> 00:55:13.360
that go to all consumers.
00:55:13.360 --> 00:55:17.360
Yes, but this does protect
individual households
00:55:17.360 --> 00:55:21.730
from extraordinary price spikes
at certain moments in time.
00:55:21.730 --> 00:55:23.740
Agreed, which
we saw in February.
00:55:23.740 --> 00:55:24.640
Right.
Absolutely.
00:55:24.640 --> 00:55:26.950
So, that's the
consumer protection,
00:55:26.950 --> 00:55:29.880
I think is so important here.
00:55:29.880 --> 00:55:32.650
And there's a, as you pointed out,
00:55:32.650 --> 00:55:35.900
there's an entire universe
of financial markets,
00:55:35.900 --> 00:55:38.073
risk products, options,
00:55:39.520 --> 00:55:42.380
there's an entire universe of products
00:55:42.380 --> 00:55:46.670
to help these retail provider
companies mitigate that risk.
00:55:46.670 --> 00:55:47.503
Call New York,
00:55:47.503 --> 00:55:50.060
they've got all sorts
of things they'll tell you.
00:55:50.060 --> 00:55:52.170
Individual households
don't have that ability,
00:55:52.170 --> 00:55:54.600
and they shouldn't be expected to.
00:55:54.600 --> 00:55:57.820
So, yes, some element
of this will be passed on,
00:55:57.820 --> 00:56:01.920
but the benefit to the
consumer is eliminating the risk
00:56:01.920 --> 00:56:06.920
of discrete extraordinary
financial costs,
00:56:07.450 --> 00:56:08.673
which is important.
00:56:09.550 --> 00:56:12.323
All right, so, we got
that issue addressed.
00:56:13.653 --> 00:56:15.380
Do you have everything you need on that?
00:56:15.380 --> 00:56:20.320
Yes, so, the answer to
that is, yes, it should include,
00:56:20.320 --> 00:56:22.030
fixed is fixed.
Fixed is fixed.
00:56:22.030 --> 00:56:23.610
Okay.
Yes.
00:56:23.610 --> 00:56:24.620
The next one is,
00:56:24.620 --> 00:56:28.850
HB 16 specifically prohibited
wholesale index products
00:56:28.850 --> 00:56:31.230
for residential and small
commercial customers
00:56:31.230 --> 00:56:32.580
that allow these
products to move forward
00:56:32.580 --> 00:56:34.940
for large commercial
and industrial customers
00:56:34.940 --> 00:56:36.590
with the acknowledgement of risk.
00:56:37.780 --> 00:56:39.890
Last time, we were asked to explore
00:56:39.890 --> 00:56:41.900
additional customer protections,
00:56:41.900 --> 00:56:42.770
one that we came up with
00:56:42.770 --> 00:56:47.770
was maybe we would apply this
acknowledgment of risk format
00:56:47.850 --> 00:56:49.520
to residential small
groups from customers
00:56:49.520 --> 00:56:51.060
with a number of products,
00:56:51.060 --> 00:56:53.870
like any index product, for instance.
00:56:53.870 --> 00:56:55.010
But in the comments,
00:56:55.010 --> 00:56:56.960
and I think it's one of
the briefing questions,
00:56:56.960 --> 00:57:00.130
it was suggested that
perhaps these index products
00:57:00.130 --> 00:57:01.040
are across the board,
00:57:01.040 --> 00:57:04.940
more risky than customers
should be exposed to.
00:57:04.940 --> 00:57:06.720
So, there was the proposal.
00:57:06.720 --> 00:57:09.730
So, our proposed
PFP did not include this,
00:57:09.730 --> 00:57:13.520
but one idea is that
that just index products
00:57:13.520 --> 00:57:14.687
should not be a part of the residential
00:57:14.687 --> 00:57:15.990
and small commercial market.
00:57:15.990 --> 00:57:19.130
And so, that is one that we
did not necessarily receive
00:57:19.130 --> 00:57:21.840
far from direction from you
guys on one way or the other,
00:57:21.840 --> 00:57:24.230
and one that I would not fame
00:57:24.230 --> 00:57:26.131
to guess where you guys were on on it,
00:57:26.131 --> 00:57:27.590
if I was writing an order.
00:57:27.590 --> 00:57:28.850
All right, thank you, David.
00:57:28.850 --> 00:57:31.920
And I believe a lot of the
comments that were filed
00:57:31.920 --> 00:57:34.460
expressed concern about
prohibiting index products,
00:57:34.460 --> 00:57:36.570
because many times,
00:57:36.570 --> 00:57:39.900
a time of use products are
often considered index products.
00:57:39.900 --> 00:57:41.930
I think there's two ways
of looking at this issue,
00:57:41.930 --> 00:57:43.880
one is we add in a rule
00:57:43.880 --> 00:57:46.480
that time of use
products are still allowed
00:57:48.240 --> 00:57:50.363
and index products are not.
00:57:52.084 --> 00:57:54.490
But my concern is that I don't think
00:57:54.490 --> 00:57:57.053
there are very many other
types of index products
00:57:57.053 --> 00:57:59.330
outside of time of
use products out there,
00:57:59.330 --> 00:58:01.060
I haven't heard of any really.
00:58:01.060 --> 00:58:05.110
And Connie, please elaborate if you.
00:58:05.110 --> 00:58:07.840
No, that's correct, I don't
believe it's widely used,
00:58:07.840 --> 00:58:09.410
it's mostly used for time of use,
00:58:09.410 --> 00:58:13.010
which can arguably fall
00:58:13.010 --> 00:58:14.940
into either the fixed or the variable,
00:58:14.940 --> 00:58:16.550
depending on how it's structured,
00:58:16.550 --> 00:58:18.943
it does not have to be an index product.
00:58:20.030 --> 00:58:21.412
So, I would not wanna get,
00:58:21.412 --> 00:58:24.150
I would not wanna prohibit
time of use products.
00:58:24.150 --> 00:58:28.540
And I think in our role, if we agree,
00:58:28.540 --> 00:58:30.830
we could insert some language in there
00:58:30.830 --> 00:58:32.780
that time of use
products are still allowed.
00:58:32.780 --> 00:58:34.920
We still wanna have innovation,
00:58:34.920 --> 00:58:38.343
we still wanna have
options for consumers,
00:58:39.300 --> 00:58:43.320
but knowing what we saw with
the wholesale price index plans
00:58:43.320 --> 00:58:47.330
and knowing that even
if an EFL has details in it
00:58:47.330 --> 00:58:52.090
or an AOR that states how it works,
00:58:52.090 --> 00:58:54.830
many residential and
small commercial consumers
00:58:54.830 --> 00:58:56.260
are still not gonna understand
00:58:56.260 --> 00:58:57.772
what they're signing themselves up for.
00:58:57.772 --> 00:58:58.605
Right.
00:58:58.605 --> 00:59:03.280
And I wanna close the
door on it, is my preference,
00:59:04.920 --> 00:59:07.970
but I don't wanna close the
door in time of use products,
00:59:07.970 --> 00:59:11.760
but I'd be happy to hear
your thoughts on the issue.
00:59:11.760 --> 00:59:15.690
Yeah, I know we'll hear
from our guests in a second,
00:59:15.690 --> 00:59:19.170
I think, yes, index
should not be allowed
00:59:19.170 --> 00:59:22.313
for small residential, small commercial.
00:59:24.470 --> 00:59:26.870
Index can be anything, right?
00:59:26.870 --> 00:59:30.763
It can be a weighted average
of Bitcoin in LIBOR, right?
00:59:32.830 --> 00:59:37.060
But we do wanna accommodate
that, the innovative product.
00:59:37.060 --> 00:59:39.710
So, I would even expand the exception,
00:59:39.710 --> 00:59:41.610
it's an exception for time of use,
00:59:41.610 --> 00:59:46.610
to say any product based
on your time calendar,
00:59:48.670 --> 00:59:51.380
or any other finite metric, right?
00:59:51.380 --> 00:59:53.850
Like you can't put more
than 24 hours in the day,
00:59:53.850 --> 00:59:58.850
but Bitcoin can go, who knows where.
00:59:59.151 --> 01:00:03.360
So, expand, make sure we
accommodate future products
01:00:03.360 --> 01:00:05.420
that nobody's thought of yet.
01:00:05.420 --> 01:00:06.600
Sure.
For future retailers.
01:00:06.600 --> 01:00:08.870
As long as it's in a fixed universe
01:00:08.870 --> 01:00:10.550
or fixed some sort of fixed battery,
01:00:10.550 --> 01:00:12.210
I don't know what the
right language for that is,
01:00:12.210 --> 01:00:15.610
but I wouldn't limit the
exception to time of use,
01:00:15.610 --> 01:00:17.820
I would open it up, okay.
01:00:17.820 --> 01:00:20.130
Liberty, time of use
in some language,
01:00:20.130 --> 01:00:21.810
but we gotta be careful too,
01:00:21.810 --> 01:00:23.440
'cause we can open the door to something
01:00:23.440 --> 01:00:24.940
by just some general language,
01:00:25.810 --> 01:00:28.147
but I'm willing to have
that discussion with-
01:00:28.147 --> 01:00:30.320
We can ask them
to think about it.
01:00:30.320 --> 01:00:34.810
Yeah, so, again, my
initial comments on flexibility,
01:00:34.810 --> 01:00:39.810
I just wanna make sure
ERCOT has those innovative tools
01:00:40.020 --> 01:00:43.240
that are coming online, time of use,
01:00:43.240 --> 01:00:45.120
great examples for small commercial,
01:00:45.120 --> 01:00:48.380
those freezers, and stuff
like that, if they can sign up,
01:00:48.380 --> 01:00:52.820
we can help manage
these reliability constraints
01:00:52.820 --> 01:00:53.900
in the near term.
01:00:53.900 --> 01:00:55.290
And I just don't,
01:00:55.290 --> 01:00:56.920
I wanna make sure we
get that language right.
01:00:56.920 --> 01:00:58.400
And I concur with you, Mr. Chairman,
01:00:58.400 --> 01:01:00.460
we wanna make sure we leave it
01:01:01.720 --> 01:01:03.730
broad enough to envision the future
01:01:03.730 --> 01:01:05.260
of where the market's headed.
01:01:05.260 --> 01:01:06.310
Stuff that we
have thought of yet.
01:01:06.310 --> 01:01:07.351
Yeah.
01:01:07.351 --> 01:01:08.325
So, what I'm hearing,
01:01:08.325 --> 01:01:10.220
is there's a sort of a line in the sand
01:01:10.220 --> 01:01:13.520
and indexing to re real-time prices
01:01:13.520 --> 01:01:15.400
and indexing to something like the NYMEX
01:01:15.400 --> 01:01:17.470
is probably on one side of the line,
01:01:17.470 --> 01:01:21.750
whereas time of use prices
and other things like that
01:01:21.750 --> 01:01:24.590
that are more structured
to have less spiky risks
01:01:24.590 --> 01:01:26.087
associated with them around
the other side of the line,
01:01:26.087 --> 01:01:28.150
and you want us to try and find-
01:01:28.150 --> 01:01:29.173
More transparency,
01:01:30.060 --> 01:01:33.960
more understand that are better
understood by the consumers.
01:01:33.960 --> 01:01:34.923
Okay, and so.
01:01:37.050 --> 01:01:39.100
Volatility based,
not like historically,
01:01:39.100 --> 01:01:42.430
it's been just fine,
I'd fix it on a quantity,
01:01:42.430 --> 01:01:43.900
like I fixed universe,
01:01:43.900 --> 01:01:45.190
I don't know the right language, right?
01:01:45.190 --> 01:01:48.480
Like, I mean, past performance
of health and wellness,
01:01:48.480 --> 01:01:50.250
like turkey has
extraordinary performance
01:01:50.250 --> 01:01:55.250
until Thanksgiving, so, we
wanna stay away from that.
01:01:55.420 --> 01:01:57.720
But as long as-
Is in the NYMEX category.
01:01:58.800 --> 01:02:01.503
But like time of use
is, or time of day is,
01:02:02.365 --> 01:02:03.510
it was 24 hours in a day.
01:02:03.510 --> 01:02:06.723
We know that's a
fixed universe that can't,
01:02:08.703 --> 01:02:11.065
that has no volatility, right?
01:02:11.065 --> 01:02:12.520
It can't have volatility.
01:02:12.520 --> 01:02:16.430
And Commissioner, I think
we can work on rural language
01:02:16.430 --> 01:02:18.130
to effectuate this
01:02:18.130 --> 01:02:23.130
and also the concept
between fixed and variable.
01:02:24.830 --> 01:02:27.113
So, for example,
01:02:28.290 --> 01:02:33.290
a fixed price is one that for certain,
01:02:33.350 --> 01:02:37.670
that you'll be paying for
the next X number of months
01:02:37.670 --> 01:02:41.110
and that price during
the course of a day
01:02:41.110 --> 01:02:44.300
may be different in
one hour than the next.
01:02:44.300 --> 01:02:47.590
But you know, ahead of
time that in the morning,
01:02:47.590 --> 01:02:52.590
you're paying 6 cents and
at peak you're paying 8 cents,
01:02:53.620 --> 01:02:54.730
something like that,
01:02:54.730 --> 01:02:58.760
that is a fixed product,
it's also time of use.
01:02:58.760 --> 01:03:02.163
So, I think we can work
with language there.
01:03:03.840 --> 01:03:06.293
Full fight staff and come
up with something appropriate
01:03:06.293 --> 01:03:07.860
that protects the customer
01:03:07.860 --> 01:03:10.650
while also allowing innovative products
01:03:10.650 --> 01:03:12.457
and future innovative products.
01:03:12.457 --> 01:03:13.910
And variable,
01:03:13.910 --> 01:03:17.100
having that variable
month-to-month product out there
01:03:17.100 --> 01:03:18.880
available in our definitions
01:03:18.880 --> 01:03:21.443
covers a wide range
of innovative products.
01:03:22.700 --> 01:03:25.014
I'm suggesting we
leave turkeys out of it
01:03:25.014 --> 01:03:26.180
in the next iteration, please.
01:03:26.180 --> 01:03:27.430
Yes.
Yes, sir.
01:03:28.939 --> 01:03:29.772
Thank you.
01:03:29.772 --> 01:03:30.605
Yes ma'am.
01:03:30.605 --> 01:03:33.490
Carrie Collier-Brown with
the lions for retail markets
01:03:33.490 --> 01:03:36.573
just wanted to make a
couple of clarifications.
01:03:37.764 --> 01:03:40.920
So, the rules have three
different types of products,
01:03:40.920 --> 01:03:44.470
fixed variable or indexed.
01:03:44.470 --> 01:03:48.170
And to the time-of-use plans,
01:03:48.170 --> 01:03:52.420
those could be fit in any
of those three categories
01:03:53.350 --> 01:03:54.610
depending on how it's going.
01:03:54.610 --> 01:03:56.830
You know exactly what
your price is gonna be
01:03:56.830 --> 01:04:01.830
at certain times of the
day, that would be fixed.
01:04:02.180 --> 01:04:05.020
The different times of
the day could be variable,
01:04:05.020 --> 01:04:08.410
or it could be indexed to something.
01:04:08.410 --> 01:04:11.823
And on index products,
01:04:12.940 --> 01:04:15.410
my understanding, is that generally,
01:04:15.410 --> 01:04:18.930
the index products offered
to residential customers
01:04:18.930 --> 01:04:20.810
are only time-of-use-type products,
01:04:20.810 --> 01:04:24.440
but what their index to
could be different things.
01:04:24.440 --> 01:04:27.570
And I think my understanding
from our members-
01:04:27.570 --> 01:04:28.637
Example.
01:04:28.637 --> 01:04:30.070
Is the most common,
01:04:30.070 --> 01:04:33.750
is the products that
are index to the NYMEX
01:04:33.750 --> 01:04:35.470
so they would use the closing price
01:04:35.470 --> 01:04:38.630
of the monthly NYMEX
Natural Gas Futures Contract.
01:04:38.630 --> 01:04:41.150
And this is a couple of months outdated
01:04:41.150 --> 01:04:42.800
when I looked at this last time.
01:04:42.800 --> 01:04:44.020
But for 2021,
01:04:44.020 --> 01:04:48.443
that value range from
between $2 and 50 cents to $4.
01:04:49.430 --> 01:04:52.220
So, it's a type of indexed product
01:04:52.220 --> 01:04:55.000
that is not particularly volatile
01:04:55.000 --> 01:04:57.210
and does not have the same
issues that were identified
01:04:57.210 --> 01:04:58.380
by the legislatures,
01:04:58.380 --> 01:05:01.920
the reason why they
took, pretty bold action
01:05:01.920 --> 01:05:04.270
to ban an entire product
for certain customers.
01:05:06.400 --> 01:05:07.850
Thank you.
01:05:07.850 --> 01:05:09.696
I think Connie's point,
01:05:09.696 --> 01:05:13.550
it's the nail on the head
by saying that the fixed part
01:05:13.550 --> 01:05:17.100
is the financial component, the cost.
01:05:17.100 --> 01:05:20.230
When each of those
finite costs are applied
01:05:21.090 --> 01:05:23.290
is that can be variable,
01:05:23.290 --> 01:05:25.483
but the amount of
money the customer pays,
01:05:26.590 --> 01:05:28.340
I think we don't want that to vary.
01:05:30.550 --> 01:05:35.550
And that's the bottom
line, I'm sure the staff can,
01:05:35.693 --> 01:05:36.999
I know 'cause that makes sense.
01:05:36.999 --> 01:05:38.350
Okay, I think we
understand you.
01:05:38.350 --> 01:05:39.870
My goal is to have language
01:05:39.870 --> 01:05:43.940
that does not get in the
way of time of use products.
01:05:43.940 --> 01:05:47.810
I know your example, Carrie
is NYMEX, I'm not sure that,
01:05:47.810 --> 01:05:49.490
I don't know how much
enrollment is out there
01:05:49.490 --> 01:05:50.323
on that product.
01:05:50.323 --> 01:05:51.920
I'm not sure that we're
really causing any harm
01:05:51.920 --> 01:05:53.410
by batting something like that,
01:05:53.410 --> 01:05:55.650
but I don't wanna cause
harm on his time of use product.
01:05:55.650 --> 01:05:57.490
So, we could set it up in a way
01:05:57.490 --> 01:05:59.966
where there's just through the EFL,
01:05:59.966 --> 01:06:02.470
through customer information
01:06:02.470 --> 01:06:04.970
that is transparent of
how those are used.
01:06:04.970 --> 01:06:07.420
I'm comfortable with that, I
don't wanna stop innovation,
01:06:07.420 --> 01:06:09.840
I don't wanna limit
options for customers,
01:06:09.840 --> 01:06:13.293
but I don't wanna have
obscure indexes in the market.
01:06:14.590 --> 01:06:16.920
And we totally understand
that and agree with that.
01:06:16.920 --> 01:06:21.920
The rules already provide,
the EFL provide disclosures
01:06:22.280 --> 01:06:25.200
even on the index time of use products
01:06:25.200 --> 01:06:29.220
and the are requiring the
reps to provide information
01:06:29.220 --> 01:06:30.053
say on their website
01:06:30.053 --> 01:06:31.830
where they can see exactly
what that's going to be
01:06:31.830 --> 01:06:34.773
based on that for that index.
01:06:36.369 --> 01:06:38.970
I think the timing can be
variable, the price can't be.
01:06:38.970 --> 01:06:40.860
And the concern we're
trying to address today,
01:06:40.860 --> 01:06:43.220
is that natural gas in the U.K.
01:06:43.220 --> 01:06:46.810
used to be $2 to $4 pretty
regularly, now it's $40.
01:06:46.810 --> 01:06:48.360
Understood.
Those things change.
01:06:48.360 --> 01:06:50.993
And that's what, is that
pesky turkey, Jimmy?
01:06:52.750 --> 01:06:55.830
So, I think that's what
we're protecting against.
01:06:55.830 --> 01:06:57.640
So, the second
piece to that issue,
01:06:57.640 --> 01:07:00.580
is so, how the issue of whether or not
01:07:00.580 --> 01:07:03.010
we wanna have index
products in the market,
01:07:03.010 --> 01:07:04.120
I think the second piece
01:07:04.120 --> 01:07:06.960
is whether we still wanna
go without an AOR to it,
01:07:06.960 --> 01:07:09.760
is that bear, or is it either or?
01:07:09.760 --> 01:07:10.593
If we don't.
01:07:10.593 --> 01:07:12.001
Yeah, if we don't have
the products in the market,
01:07:12.001 --> 01:07:14.880
then we would need an
acknowledgement of risk.
01:07:14.880 --> 01:07:17.260
But I think that that's sort of your,
01:07:17.260 --> 01:07:20.040
I would suggest that you retain
the acknowledgement of risk
01:07:20.040 --> 01:07:22.190
if you are going to
continue to allow them.
01:07:23.736 --> 01:07:24.830
So, yeah.
01:07:24.830 --> 01:07:27.860
But it is, sorry, isn't it a
question of semantics though?
01:07:27.860 --> 01:07:30.797
I mean, as long as we iron
out the details on time abuse
01:07:30.797 --> 01:07:35.797
and those allowable flexible
plans, you still need an AOR.
01:07:36.030 --> 01:07:37.260
I mean, I don't wanna Tucker Carlson
01:07:37.260 --> 01:07:39.850
talking about people dialing
down their thermostat again,
01:07:39.850 --> 01:07:40.900
without their knowledge,
01:07:40.900 --> 01:07:43.123
they need to know what
they're signing up for all that.
01:07:43.123 --> 01:07:46.023
Don't say that.
I know, but he did.
01:07:47.040 --> 01:07:49.300
The reps are
required to provide.
01:07:50.330 --> 01:07:54.960
Yes, Commissioner
Cobos, the retail providers
01:07:54.960 --> 01:07:59.370
provide sort of three documents
to every enrolling customer.
01:07:59.370 --> 01:08:00.850
You get an electricity facts label,
01:08:00.850 --> 01:08:03.030
which is supposed to
be the apples to apples,
01:08:03.030 --> 01:08:07.190
nutritional label idea of the
most important contract terms,
01:08:07.190 --> 01:08:10.500
the actual contract,
the terms of service,
01:08:10.500 --> 01:08:11.810
and then your rights as a customer,
01:08:11.810 --> 01:08:15.440
which is a summary of the
customer protection rules.
01:08:15.440 --> 01:08:18.500
The EFL is the thing that we've all,
01:08:18.500 --> 01:08:20.300
the Commissioner has
always encouraged customers
01:08:20.300 --> 01:08:22.800
to use to compare plans.
01:08:22.800 --> 01:08:25.110
And when they're shopping
on power to choose website,
01:08:25.110 --> 01:08:27.250
that's the thing that they
can bring up in a PDF
01:08:27.250 --> 01:08:28.860
and compare them side by side,
01:08:28.860 --> 01:08:30.440
and that's where the disclosures are.
01:08:30.440 --> 01:08:35.100
So, should you retain some ability
01:08:35.100 --> 01:08:37.610
for reps to offer indexed products
01:08:37.610 --> 01:08:40.173
if it's time of user or
however you wanna do that,
01:08:40.173 --> 01:08:43.730
and you want to provide
customers and acknowledgment risk.
01:08:43.730 --> 01:08:46.900
We suggest that a
place that makes sense,
01:08:46.900 --> 01:08:51.850
is to put that language in
the electricity facts label,
01:08:51.850 --> 01:08:53.300
because that's the thing customers see
01:08:53.300 --> 01:08:54.865
when they're shopping.
01:08:54.865 --> 01:08:56.740
And the other thing I'd point out,
01:08:56.740 --> 01:09:00.180
is that's the rule that's
open in this particular project,
01:09:00.180 --> 01:09:03.353
is the disclosure rule 25.475.
01:09:04.580 --> 01:09:06.460
I think that there've been
some other suggestions
01:09:06.460 --> 01:09:09.290
to put in as part of
the enrollment process,
01:09:09.290 --> 01:09:13.810
but that rule is 25.474,
and it's really detailed
01:09:13.810 --> 01:09:18.120
about exactly what the
reps have to get consent for
01:09:18.120 --> 01:09:21.310
and provide acknowledgement
for in each type of enrollment,
01:09:21.310 --> 01:09:24.110
whether it's door to
door, or over the phone,
01:09:24.110 --> 01:09:25.393
voice recordings,
01:09:26.350 --> 01:09:28.980
electronic, where they'd have
to actually click something.
01:09:28.980 --> 01:09:30.870
If that's something that you wanna do,
01:09:30.870 --> 01:09:33.420
my understanding, I mean
we'd have to work with staff,
01:09:33.420 --> 01:09:35.770
but that's not actually
in this rulemaking,
01:09:35.770 --> 01:09:39.150
but you could require
the disclosure in the EFL,
01:09:39.150 --> 01:09:40.860
which is in this rule-making.
01:09:40.860 --> 01:09:42.960
Sure, and I think
for fixed means fixed,
01:09:42.960 --> 01:09:44.880
we don't need to worry about disclosure
01:09:44.880 --> 01:09:46.205
for the price component.
01:09:46.205 --> 01:09:47.038
Right.
01:09:47.038 --> 01:09:50.430
If there can be variability
on time as a metric,
01:09:50.430 --> 01:09:53.390
volume, I suspect their play plans,
01:09:53.390 --> 01:09:56.470
or it will be plans
where you price varies
01:09:56.470 --> 01:09:58.050
by how much you've used,
01:09:58.050 --> 01:10:01.700
that's something that can that's,
01:10:01.700 --> 01:10:05.140
those are the metrics or the variables
01:10:05.140 --> 01:10:08.860
that we want to continue
to allow to be adjusted
01:10:08.860 --> 01:10:10.920
by individual companies.
01:10:10.920 --> 01:10:13.110
Like we would want an
acknowledgement of risk
01:10:13.110 --> 01:10:15.370
on those variability.
01:10:15.370 --> 01:10:16.760
And I think it's covered,
01:10:16.760 --> 01:10:19.560
but also remember we heard testimony.
01:10:19.560 --> 01:10:21.550
People are fine at two hours
01:10:21.550 --> 01:10:23.410
when they get throttled for two hours,
01:10:23.410 --> 01:10:27.370
it's when they get throttled
for 10 hours on time of use
01:10:27.370 --> 01:10:31.180
or where the pricing
scheme or the usage scheme
01:10:31.180 --> 01:10:33.000
is oriented to them.
01:10:33.000 --> 01:10:35.720
They need to know what
they're signing up for.
01:10:35.720 --> 01:10:36.590
I agree with your point.
01:10:36.590 --> 01:10:37.970
I think for a fixed rate product,
01:10:37.970 --> 01:10:40.460
you don't need that
extra language in the EFL,
01:10:40.460 --> 01:10:41.400
that's straightforward.
01:10:41.400 --> 01:10:43.370
I think even for a variable,
01:10:43.370 --> 01:10:45.550
regular variable rate
product it might make sense.
01:10:45.550 --> 01:10:46.920
I think EFL will have some language
01:10:46.920 --> 01:10:48.220
on how the price can vary.
01:10:49.930 --> 01:10:52.430
And then for time of use,
01:10:52.430 --> 01:10:54.940
having maybe some additional information
01:10:54.940 --> 01:10:58.467
to explain how the time of use product,
01:10:58.467 --> 01:11:00.030
and some kind of acknowledgement
01:11:00.030 --> 01:11:02.343
of risk language in the EFL,
01:11:02.343 --> 01:11:05.263
I think I'd be comfortable with that.
01:11:06.550 --> 01:11:08.220
And I think as we
designed Commissioners,
01:11:08.220 --> 01:11:10.120
the sort of how to thread the needles
01:11:10.120 --> 01:11:12.390
we discussed it on the
different types of products,
01:11:12.390 --> 01:11:13.223
I think we can try
01:11:13.223 --> 01:11:16.350
and come up with a
coherent proposal as well
01:11:16.350 --> 01:11:18.960
on what additional
language might be in the EFL.
01:11:18.960 --> 01:11:20.480
I think what would be
most useful for staff,
01:11:20.480 --> 01:11:22.070
is if you think there are occasions
01:11:22.070 --> 01:11:23.330
when we would want the customer
01:11:23.330 --> 01:11:27.080
to take a sort of
discreet affirmative action
01:11:27.080 --> 01:11:27.913
to acknowledge it.
01:11:27.913 --> 01:11:31.030
So, you can put additional texts in EFL
01:11:31.030 --> 01:11:32.510
or in terms of service document.
01:11:32.510 --> 01:11:34.560
Or for instance, with the
large commercial customers,
01:11:34.560 --> 01:11:35.570
the legislature made it clear
01:11:35.570 --> 01:11:37.930
that they had to sign an
acknowledgement of risk
01:11:37.930 --> 01:11:38.810
as a separate statement.
01:11:38.810 --> 01:11:40.600
And so, for some of these products,
01:11:40.600 --> 01:11:41.550
do we like the idea of the customer
01:11:41.550 --> 01:11:43.870
would have to proactively
acknowledge the risk
01:11:43.870 --> 01:11:46.800
as suggested by the name
acknowledgement of risk
01:11:46.800 --> 01:11:48.610
with a signature or digital stamp
01:11:48.610 --> 01:11:50.860
or affirmation on a phone call.
01:11:50.860 --> 01:11:52.510
So, that's sort of the
guidance that we need,
01:11:52.510 --> 01:11:54.350
whether or not you think just
a written disclosure is enough
01:11:54.350 --> 01:11:57.770
versus a proactive action on
half of behalf of the customer.
01:11:57.770 --> 01:12:01.010
Okay, so, I'm hearing
that you would prefer
01:12:01.010 --> 01:12:03.093
a separate acknowledgement of risk.
01:12:04.140 --> 01:12:05.180
Or a proactive one,
01:12:05.180 --> 01:12:08.507
we can't just scroll through
the texts, the final print.
01:12:08.507 --> 01:12:11.224
And even the box checking,
you know what I mean?
01:12:11.224 --> 01:12:12.960
Proactively, you say,
01:12:12.960 --> 01:12:16.470
yes, I acknowledged the
price of my power changes.
01:12:16.470 --> 01:12:17.593
Okay.
01:12:17.593 --> 01:12:18.426
Kind of like when you're going
01:12:18.426 --> 01:12:19.963
through that rental
agreement and stuff like that.
01:12:19.963 --> 01:12:21.247
Okay.
01:12:21.247 --> 01:12:23.900
Right, and it's a
pain in the tail, but.
01:12:23.900 --> 01:12:25.950
Okay, so, not just baking
01:12:25.950 --> 01:12:28.710
in the inner energy
electricity facts label
01:12:28.710 --> 01:12:30.740
would be sufficient,
you'd want an actual-
01:12:30.740 --> 01:12:32.170
Proactive affirmation.
01:12:32.170 --> 01:12:34.340
That makes sense,
that makes sense.
01:12:34.340 --> 01:12:36.210
I was trying to strike a balance here,
01:12:36.210 --> 01:12:38.930
but I think if obviously
going a step further
01:12:38.930 --> 01:12:40.530
to ensure, even with time of use,
01:12:40.530 --> 01:12:43.520
what you might be getting
yourself into would be prudent.
01:12:44.487 --> 01:12:45.940
Yeah, and to be clear,
01:12:45.940 --> 01:12:48.363
we've moved on to
question four of the memo.
01:12:49.620 --> 01:12:50.520
I saw the light.
01:12:54.270 --> 01:12:56.890
So, anything else you
need from us, Mr. Smeltzer?
01:12:56.890 --> 01:13:00.260
No, sorry, I think that
does it on this, thank you.
01:13:00.260 --> 01:13:02.650
I think your third question
01:13:02.650 --> 01:13:06.010
asked about whether or
not ancillary service charges
01:13:06.010 --> 01:13:09.513
could be passed through to
residential and small commercial,
01:13:10.560 --> 01:13:12.670
that piece I think we
might've already answered,
01:13:12.670 --> 01:13:13.503
is that correct?
01:13:13.503 --> 01:13:17.350
I believe the question is if,
01:13:17.350 --> 01:13:20.240
so, we've we got fixed is fixed,
01:13:20.240 --> 01:13:21.870
that would mean any product
01:13:21.870 --> 01:13:24.470
that had an ancillary
services passed through
01:13:24.470 --> 01:13:26.610
would be variable.
01:13:26.610 --> 01:13:29.440
And in that case, for a variable product
01:13:29.440 --> 01:13:31.570
with ancillary services passed through,
01:13:31.570 --> 01:13:34.103
would you require the
acknowledgement of risk?
01:13:35.160 --> 01:13:36.410
With the
crisis to the answer,
01:13:36.410 --> 01:13:37.860
your service is not variable,
01:13:40.550 --> 01:13:43.183
just the time or the
quantity is variable.
01:13:45.000 --> 01:13:47.410
This is a, okay, so I
think what Connie's saying,
01:13:47.410 --> 01:13:49.310
it's a regular variable rate plan,
01:13:49.310 --> 01:13:52.850
and not a time of use
necessarily, not a fixed-rate product,
01:13:52.850 --> 01:13:55.650
but if a residential small
commercial consumer
01:13:55.650 --> 01:13:58.750
signed up for a variable
rate plan, could the rep
01:13:58.750 --> 01:14:02.290
pass through ancillary
service charges to them?
01:14:02.290 --> 01:14:04.540
No, because doesn't
that make it an index plan
01:14:04.540 --> 01:14:05.640
when you shoot in your-
01:14:05.640 --> 01:14:06.770
Verbal residential ranch.
01:14:06.770 --> 01:14:07.603
Yeah.
01:14:10.000 --> 01:14:11.393
What are we answering here?
01:14:12.470 --> 01:14:17.470
So, conceivably, a
rep could design a plan
01:14:19.760 --> 01:14:21.350
and bill it as variable,
01:14:21.350 --> 01:14:23.260
because it's a month-to-month plan
01:14:23.260 --> 01:14:25.750
and the price changes month to month.
01:14:25.750 --> 01:14:28.470
And the basis of that price change
01:14:28.470 --> 01:14:32.373
would be ancillary services.
01:14:36.518 --> 01:14:38.240
So, yeah, so there's three
types of products, right?
01:14:38.240 --> 01:14:39.500
There's the fixed-rate product,
01:14:39.500 --> 01:14:43.160
there's a regular variable rate product
01:14:43.160 --> 01:14:45.970
that's been in the market,
that's been month a month, right?
01:14:45.970 --> 01:14:47.793
And then now we've sort of,
01:14:49.250 --> 01:14:52.370
what I'm hearing is
eliminated index products,
01:14:52.370 --> 01:14:54.120
but created sort of a separate category
01:14:54.120 --> 01:14:56.640
for time-of-use products.
01:14:56.640 --> 01:14:58.513
And so, I think what staff is asking,
01:14:59.651 --> 01:15:02.380
is that regular variable rate product,
01:15:02.380 --> 01:15:04.910
if you're a small commercial consumer
01:15:04.910 --> 01:15:08.050
or a residential
consumer kind of rep pass
01:15:08.050 --> 01:15:09.620
through those ancillary service charges,
01:15:09.620 --> 01:15:12.310
through those regular
variable rate plans.
01:15:12.310 --> 01:15:14.050
And I think with a
variable rate plan,
01:15:14.050 --> 01:15:15.680
usually, they can do
whatever they want with it
01:15:15.680 --> 01:15:16.970
on a month to month.
01:15:16.970 --> 01:15:18.750
And so, this question framed in the way
01:15:18.750 --> 01:15:19.930
that a trim made more sense
01:15:19.930 --> 01:15:23.738
when we were still allowing
all the index price plans.
01:15:23.738 --> 01:15:24.571
But we're not.
01:15:24.571 --> 01:15:25.404
But we're not,
01:15:25.404 --> 01:15:27.840
but they're still with
the variable rate plan,
01:15:27.840 --> 01:15:29.220
with the reps.
01:15:29.220 --> 01:15:30.200
Unlike a fixed rate plan,
01:15:30.200 --> 01:15:31.500
a variable rate plan
plan has the escape patch
01:15:31.500 --> 01:15:32.333
where it's month to month
01:15:32.333 --> 01:15:33.930
and the customer can
get out if they want to,
01:15:33.930 --> 01:15:35.840
'cause they have to resign each month.
01:15:35.840 --> 01:15:38.890
But it's whether or not
for a type of plan like that,
01:15:38.890 --> 01:15:41.380
do we still want this
acknowledgement of Fritz concept
01:15:41.380 --> 01:15:43.360
involved for residential class?
01:15:43.360 --> 01:15:46.010
Great, I think even based
on my experience at OPEC,
01:15:47.864 --> 01:15:50.010
the residential consumers have no idea
01:15:50.010 --> 01:15:52.340
what ancillary service charges
are. I mean, they just won't,
01:15:52.340 --> 01:15:54.493
even with an acknowledgement of risk.
01:15:56.750 --> 01:15:58.980
Because of the fact
that a lot of consumers
01:15:58.980 --> 01:16:02.430
were getting very
high electricity bills,
01:16:02.430 --> 01:16:05.833
they were calling us to
ensure that their high bill,
01:16:05.833 --> 01:16:09.060
that it include ancillary
services in there
01:16:09.060 --> 01:16:10.320
and trying to understand
01:16:10.320 --> 01:16:12.413
what ancillary service charges were.
01:16:14.640 --> 01:16:17.770
Our primary experience
during the winter storm,
01:16:17.770 --> 01:16:19.980
was the pastor of
ancillary service charges
01:16:19.980 --> 01:16:22.523
to larger commercial consumers.
01:16:24.460 --> 01:16:27.180
I would not allow
ancillary service charges
01:16:27.180 --> 01:16:28.347
to be passed through to residential
01:16:28.347 --> 01:16:30.963
and small commercial
consumers even with an AOR.
01:16:31.860 --> 01:16:33.560
Agreed.
Agreed.
01:16:33.560 --> 01:16:34.710
Thank you.
01:16:34.710 --> 01:16:37.050
Yeah, Commissioner,
just for clarification,
01:16:37.050 --> 01:16:39.300
maybe one way to think
about it how it helps me,
01:16:39.300 --> 01:16:42.240
is the difference between
variable and indexed,
01:16:42.240 --> 01:16:47.240
is that variable has a
set rate for that month.
01:16:47.250 --> 01:16:48.450
That rate could change
01:16:48.450 --> 01:16:52.680
based on whatever the criteria is
01:16:52.680 --> 01:16:55.330
that the customer agreed
to for the next month.
01:16:55.330 --> 01:16:57.420
So, the month to month,
it's like a month to month,
01:16:57.420 --> 01:17:00.973
but what your rate's going to
be for each upcoming month.
01:17:02.110 --> 01:17:05.130
Index has some kind of formula in it
01:17:06.050 --> 01:17:10.660
where the rate can change
based on what that formula is.
01:17:10.660 --> 01:17:13.300
And that can be as we
talked about the time of use,
01:17:13.300 --> 01:17:17.753
where that rate is based on
gas prices or something else.
01:17:18.938 --> 01:17:23.827
So, just wanna make sure
that you think that variable plans
01:17:27.980 --> 01:17:29.170
that have always been in he market
01:17:29.170 --> 01:17:32.280
that are essentially just
a month-to month-rate
01:17:32.280 --> 01:17:33.880
that the customer can
get out of at any time
01:17:33.880 --> 01:17:36.130
if they don't like what
that upcoming rate is.
01:17:36.130 --> 01:17:37.277
Is not up for discussion.
01:17:37.277 --> 01:17:39.780
So, a key nuance is,
01:17:39.780 --> 01:17:42.010
when do you pay for
the ancillary services?
01:17:42.010 --> 01:17:43.520
When you renew for the next month?
01:17:43.520 --> 01:17:45.220
Is that baked into that point?
01:17:45.220 --> 01:17:48.410
Or do you get the hit at the end?
01:17:48.410 --> 01:17:50.320
When do you get the hit of
the ancillary services charge?
01:17:50.320 --> 01:17:51.379
Well, I'll say my
understanding,
01:17:51.379 --> 01:17:54.670
is that I'm not aware
of residential customers
01:17:54.670 --> 01:17:57.773
getting any pass-throughs
of ancillary services.
01:17:58.720 --> 01:17:59.570
Yeah, as I understand it,
01:17:59.570 --> 01:18:02.040
I think that the customer
knows what the rate is gonna be
01:18:02.040 --> 01:18:03.263
for each upcoming month.
01:18:04.350 --> 01:18:06.730
So, it would be, you wouldn't
have paid a higher rate
01:18:06.730 --> 01:18:08.283
than you anticipated for,
01:18:09.270 --> 01:18:11.020
the month that you already
use the electricity for it.
01:18:11.020 --> 01:18:12.110
That's the question,
01:18:12.110 --> 01:18:14.720
you would see it when you're
renegotiating that next month,
01:18:14.720 --> 01:18:15.890
because you're on month to month
01:18:15.890 --> 01:18:17.130
and you're gonna see
that ancillary service
01:18:17.130 --> 01:18:18.960
and you have the ability
to, it's like, hey, I'm out,
01:18:18.960 --> 01:18:21.650
I'm going and I'm gonna get
on a fixed rate plan somewhere.
01:18:21.650 --> 01:18:22.483
Right, and I think-
01:18:22.483 --> 01:18:23.970
How long do you have to choose?
01:18:23.970 --> 01:18:25.180
Yeah, I don't know.
01:18:25.180 --> 01:18:26.390
I mean, it's a
month-to-month, right?
01:18:26.390 --> 01:18:28.160
You can get out at any time
01:18:28.160 --> 01:18:32.131
before that next month's
different rate goes into it.
01:18:32.131 --> 01:18:32.964
But does it matter?
01:18:32.964 --> 01:18:34.880
When you see the
next price for next month,
01:18:34.880 --> 01:18:37.300
like, do you get it on
the 31st at midnight,
01:18:37.300 --> 01:18:38.747
or do you get 15th?
01:18:39.998 --> 01:18:42.410
There, I forget
the exact timeline,
01:18:42.410 --> 01:18:47.160
but there's already requirements
for how much of a heads up
01:18:47.160 --> 01:18:49.615
that the reps have to
provide the customers.
01:18:49.615 --> 01:18:54.133
And Christina, has the
exact timelines really quickly.
01:18:55.860 --> 01:18:57.920
Hey, Christina
Rollins with NRG.
01:18:57.920 --> 01:18:59.840
So, for a variable rate
product in the market,
01:18:59.840 --> 01:19:03.350
a rep is obligated to show
the customer the current rate
01:19:03.350 --> 01:19:06.530
and make that rate available
to the customer at all times.
01:19:06.530 --> 01:19:08.820
They also have to show
the one-year historical price
01:19:08.820 --> 01:19:11.540
of that product, so that way,
the customer can see, well,
01:19:11.540 --> 01:19:13.300
what does that product do
over the course of a year,
01:19:13.300 --> 01:19:14.470
so I can better understand
01:19:14.470 --> 01:19:16.460
what it means to sign
up for that product?
01:19:16.460 --> 01:19:19.120
So, they should be able
to go either call their rep,
01:19:19.120 --> 01:19:21.070
or access their current price online
01:19:21.070 --> 01:19:22.670
so they can see that to determine,
01:19:22.670 --> 01:19:23.980
do I wanna stay on this product
01:19:23.980 --> 01:19:25.920
or do I wanna move to something else?
01:19:25.920 --> 01:19:27.380
And like Carrie said,
01:19:27.380 --> 01:19:28.970
the price where a variable rate product
01:19:28.970 --> 01:19:31.640
holds true for the entire billing cycle.
01:19:31.640 --> 01:19:33.870
So, it's not the scenario
like what the index products
01:19:33.870 --> 01:19:37.100
where the price literally
was changing hour by hour
01:19:37.100 --> 01:19:39.283
or every 15 minutes, day by day
01:19:39.283 --> 01:19:41.800
during the course of a Winter Storm Uri.
01:19:41.800 --> 01:19:44.300
So, that's what the index
price formula lets you do,
01:19:44.300 --> 01:19:45.680
is you can have a different price
01:19:45.680 --> 01:19:47.830
from a day-to-day perspective.
01:19:47.830 --> 01:19:50.350
And so, that's kind
of the real difference.
01:19:50.350 --> 01:19:53.163
But when, so, if in January,
01:19:54.775 --> 01:19:57.013
the oil's price is gonna be eight cents,
01:19:58.759 --> 01:20:00.683
but it can change in February.
01:20:01.580 --> 01:20:03.100
When does he find out
01:20:03.100 --> 01:20:06.780
that it's gonna be 15 cents in February?
01:20:06.780 --> 01:20:08.970
So, reps approach
that differently.
01:20:08.970 --> 01:20:13.593
Some reps we'll let the
customer know for quite some time
01:20:13.593 --> 01:20:16.640
what the price will
be for their next bill.
01:20:16.640 --> 01:20:19.550
And some reps I guess, could in theory,
01:20:19.550 --> 01:20:21.330
based on what the rule says today,
01:20:21.330 --> 01:20:24.080
wait until right before
that billing cycle
01:20:24.080 --> 01:20:25.170
to change the price.
01:20:25.170 --> 01:20:28.240
So, if you were looking
at how long in advance,
01:20:28.240 --> 01:20:31.840
you want the person to know that price,
01:20:31.840 --> 01:20:33.030
that is something you could look at
01:20:33.030 --> 01:20:35.260
probably in this existing rule.
01:20:35.260 --> 01:20:38.330
So, the regular variable rate product
01:20:38.330 --> 01:20:40.160
that's in our current rule.
01:20:40.160 --> 01:20:41.183
One thing to note,
01:20:42.890 --> 01:20:45.643
it's existed in our
role for a long time.
01:20:46.620 --> 01:20:49.450
The month-to-month
aspect of the rate product
01:20:49.450 --> 01:20:54.250
is actually there are a lot
of low-income consumers
01:20:54.250 --> 01:20:56.840
that sign up for month to
month variable rate products.
01:20:56.840 --> 01:21:00.210
And that's one benefit
that I think of the product,
01:21:00.210 --> 01:21:02.990
even though it can vary
from month to month.
01:21:02.990 --> 01:21:07.120
My understanding based on
prior review of these products,
01:21:07.120 --> 01:21:08.960
so, when we were looking
at them back at OPEC
01:21:08.960 --> 01:21:10.020
after the storm,
01:21:10.020 --> 01:21:12.680
is that they have their
place in the market
01:21:12.680 --> 01:21:15.990
because of the sort of
flexibility to provide customers
01:21:15.990 --> 01:21:17.930
and low-income customers.
01:21:17.930 --> 01:21:19.410
I personally not trying to get rid
01:21:19.410 --> 01:21:21.130
of the variable rate product,
01:21:21.130 --> 01:21:23.190
I just don't want ancillary
service charges pass through
01:21:23.190 --> 01:21:25.340
to residential, small
commercial customers.
01:21:27.770 --> 01:21:29.460
I think that's clear,
01:21:29.460 --> 01:21:31.250
and we'll prepare a draft consistent
01:21:31.250 --> 01:21:33.630
with your discussion today.
01:21:33.630 --> 01:21:34.671
No, it works for me.
01:21:34.671 --> 01:21:35.580
It works for me.
01:21:35.580 --> 01:21:37.120
If we also a staff
01:21:37.120 --> 01:21:41.803
to consider some requirement
of next month notification,
01:21:42.870 --> 01:21:45.600
so that in theory, on a variable rate,
01:21:45.600 --> 01:21:50.600
you can't get your next month
price at midnight on the 31st.
01:21:54.090 --> 01:21:54.923
The other thing too,
01:21:54.923 --> 01:21:57.410
I think there was
legislation that was passed
01:21:57.410 --> 01:22:00.100
that created a default renewal product
01:22:00.100 --> 01:22:02.360
because of this situation
with variable rate products
01:22:02.360 --> 01:22:04.488
that there was some protective
measures put in place to,
01:22:04.488 --> 01:22:07.327
and Connie, do you wanna
speak to that a little bit?
01:22:08.730 --> 01:22:09.590
Yes.
01:22:09.590 --> 01:22:11.870
We'll go back through the
comments and take a look.
01:22:11.870 --> 01:22:15.250
This is not a part of the rule
01:22:15.250 --> 01:22:18.980
that we received
comments on necessarily,
01:22:18.980 --> 01:22:21.300
and was not noticed in our proposal,
01:22:21.300 --> 01:22:23.743
but we'll go back
and take a look at that.
01:22:24.860 --> 01:22:27.830
And again, I just wanna
remind all of our guests
01:22:27.830 --> 01:22:30.850
that before I'm here today,
01:22:30.850 --> 01:22:34.040
is for staff to dialogue
with the Commissioners
01:22:34.040 --> 01:22:35.810
and make sure staff
is producing the work
01:22:35.810 --> 01:22:37.220
Commissioners expect,
01:22:37.220 --> 01:22:41.380
not to rework shop the
entire customer protection rule.
01:22:41.380 --> 01:22:42.920
Yeah, we'll go
through all the comments
01:22:42.920 --> 01:22:44.190
that were already filed.
01:22:44.190 --> 01:22:45.023
Yes.
01:22:45.023 --> 01:22:46.162
Thank you.
01:22:46.162 --> 01:22:47.579
What type of the.
01:22:49.640 --> 01:22:50.473
Yes, sir.
01:22:50.473 --> 01:22:52.930
Thank you, Michael Juul
on behalf of Octopus Energy.
01:22:52.930 --> 01:22:53.763
And Chairman Lake,
01:22:53.763 --> 01:22:55.900
we would strongly encourage
your recommendation
01:22:55.900 --> 01:22:59.060
that there be prior notice
with regard to variable rates.
01:22:59.060 --> 01:23:01.460
So, the customers know
before the month starts,
01:23:01.460 --> 01:23:03.320
what they're going to be charged.
01:23:03.320 --> 01:23:04.153
Thank you, sir.
01:23:04.153 --> 01:23:04.986
Thank you.
01:23:04.986 --> 01:23:06.840
That's not in the scope of this boat.
01:23:06.840 --> 01:23:07.673
Something we'll take up-
01:23:07.673 --> 01:23:10.380
We've put comments
on that in this as well.
01:23:10.380 --> 01:23:12.227
We'll look at it, thank
you, sir, thank you.
01:23:13.690 --> 01:23:14.590
Anything else, Mr.
01:23:15.520 --> 01:23:16.620
I think that's good.
01:23:17.510 --> 01:23:21.197
I think that the next thing (indistinct)
01:23:22.460 --> 01:23:26.923
That'll conclude business
on 10, and we're not doing 11.
01:23:29.833 --> 01:23:34.013
I don't have anything, there's
nothing on 12 through 17.
01:23:36.762 --> 01:23:41.762
That brings us to 19, 18
will be after the break, 19.
01:23:41.925 --> 01:23:43.008
Mr. Smeltzer.
01:23:43.920 --> 01:23:48.500
Hello, this is coming
back to our proposal
01:23:48.500 --> 01:23:50.990
for adoption for review of 25.505.
01:23:50.990 --> 01:23:53.510
This is the HCAP rule
01:23:53.510 --> 01:23:58.510
staff has prepared the $5,000 cap draft
01:23:58.690 --> 01:24:02.033
as directed using some very
Pythian and genius language
01:24:02.033 --> 01:24:04.180
for the justification
01:24:04.180 --> 01:24:06.640
that we've incorporated into
the analysis in the preamble.
01:24:06.640 --> 01:24:09.049
And it is prepared for your adoption.
01:24:09.049 --> 01:24:12.632
I would just note,
this is project 52631.
01:24:15.243 --> 01:24:17.202
We covered this
earlier this week,
01:24:17.202 --> 01:24:19.869
other than the Pythian language.
01:24:20.760 --> 01:24:23.690
I love the number,
it works for me.
01:24:23.690 --> 01:24:24.523
There you go.
01:24:24.523 --> 01:24:25.356
Any other thoughts on this,
01:24:25.356 --> 01:24:29.370
or a motion to approve
the proposal for adoption?
01:24:29.370 --> 01:24:30.203
So moved.
01:24:30.203 --> 01:24:31.036
Second.
01:24:31.036 --> 01:24:32.000
All in favor, say aye.
01:24:32.000 --> 01:24:32.833
Aye.
Aye.
01:24:32.833 --> 01:24:36.940
Chairman, I just wanted to
be very clear on the record,
01:24:36.940 --> 01:24:38.750
that is your expectation,
01:24:38.750 --> 01:24:43.483
this HCAP will be
implemented on January 1st.
01:24:44.530 --> 01:24:45.363
Yes.
01:24:45.363 --> 01:24:47.800
At the request of
ERCOT for clarification.
01:24:47.800 --> 01:24:48.633
Yes.
01:24:48.633 --> 01:24:49.860
Yes, great.
Thank you.
01:24:49.860 --> 01:24:51.610
All intend this
to be implemented
01:24:52.860 --> 01:24:57.360
on, or before January
1st motion has passed.
01:24:57.360 --> 01:25:00.573
Thank all of you all,
and especially staff.
01:25:01.820 --> 01:25:05.320
This was a very, very quick
turnaround in order to make sure
01:25:05.320 --> 01:25:07.170
that it could be
implemented by January 1st
01:25:07.170 --> 01:25:11.354
before the price, the
HCAP resets to 9,000.
01:25:11.354 --> 01:25:14.268
Like, many, many, thanks
for all the work on this.
01:25:14.268 --> 01:25:15.410
Thank you.
01:25:15.410 --> 01:25:16.660
Thank you.
01:25:16.660 --> 01:25:19.977
Nothing on items 23, 26,
01:25:21.074 --> 01:25:25.393
and it brings us to,
01:25:25.393 --> 01:25:28.010
I think that brings
us to item number 29,
01:25:28.010 --> 01:25:29.073
project number 52805.
01:25:31.609 --> 01:25:33.573
And Mr. Smeltzer, you're back up.
01:25:37.270 --> 01:25:39.073
I thought there might've
been one in there.
01:25:40.720 --> 01:25:44.130
This is a proposal for
publication that we have for you
01:25:44.130 --> 01:25:47.743
for review of 16 PAC 27.170.
01:25:49.790 --> 01:25:51.090
We refer to it as the Jay rule.
01:25:51.090 --> 01:25:53.030
As far as we know, it
just affects Jay Stone
01:25:53.030 --> 01:25:53.863
and no one else.
01:25:53.863 --> 01:25:56.340
So, this is to pull our
advanced contracting
01:25:56.340 --> 01:25:59.100
monitoring practices
in line with statute,
01:25:59.100 --> 01:26:00.440
excuse me, to pull our rule
01:26:00.440 --> 01:26:03.280
in line with statute in
our current practices.
01:26:03.280 --> 01:26:05.580
This is just a codified
current practices sort of deal,
01:26:05.580 --> 01:26:08.670
there's not too much to
say, but Jay's available
01:26:08.670 --> 01:26:09.807
should we have any questions.
01:26:09.807 --> 01:26:10.807
All right.
01:26:13.415 --> 01:26:14.733
I think this conforms to,
01:26:16.271 --> 01:26:19.340
we go to any thoughts, comments,
01:26:19.340 --> 01:26:21.810
or a motion to approve
the proposal for publication?
01:26:21.810 --> 01:26:23.010
So moved.
01:26:23.010 --> 01:26:24.060
Second.
01:26:24.060 --> 01:26:24.983
All right.
01:26:26.500 --> 01:26:27.333
All in favor, say, aye.
01:26:27.333 --> 01:26:28.720
Aye.
Aye.
01:26:28.720 --> 01:26:31.060
None opposed, motion passes.
01:26:31.060 --> 01:26:32.140
All right, thank you, sir.
01:26:32.140 --> 01:26:33.363
Thank you.
Thank you, Jay.
01:26:34.420 --> 01:26:38.393
Item 30, we've got an update
from our executive director.
01:26:39.320 --> 01:26:40.480
Thank you, Mr. Chairman.
01:26:40.480 --> 01:26:42.740
Commissioners, just a
couple updates this morning.
01:26:42.740 --> 01:26:44.710
First, I am happy to report
01:26:44.710 --> 01:26:47.900
that we have filled our director
of communications position,
01:26:47.900 --> 01:26:50.490
Rich Parsons has accepted the job,
01:26:50.490 --> 01:26:53.260
he has a wealth of experience,
01:26:53.260 --> 01:26:55.420
he's a former newscaster
01:26:55.420 --> 01:26:58.149
and previously worked at
the Railroad Commission
01:26:58.149 --> 01:26:59.390
and currently works
01:26:59.390 --> 01:27:02.109
as the Director of
Communications at HHSC.
01:27:02.109 --> 01:27:05.130
We hit a home run with
this hire, I'm glad to say
01:27:05.130 --> 01:27:08.630
this is the equivalent of
getting a five-star recruit,
01:27:08.630 --> 01:27:11.420
which for those of you
who follow Texas football,
01:27:11.420 --> 01:27:12.800
explain what a five-star recruit is,
01:27:12.800 --> 01:27:14.650
it's someone who comes in
01:27:14.650 --> 01:27:18.239
and really helps our teams
succeed in the near and longterm.
01:27:18.239 --> 01:27:22.080
So, yeah, we're blessed to have him come
01:27:22.080 --> 01:27:24.110
and be a part of our team,
01:27:24.110 --> 01:27:26.220
he he'll begin at the
beginning of January.
01:27:26.220 --> 01:27:27.053
You should get used to,
01:27:27.053 --> 01:27:29.960
you should look to
baseball, or football.
01:27:29.960 --> 01:27:30.831
No, it's a great analogy,
01:27:30.831 --> 01:27:31.664
I'm just glad
01:27:31.664 --> 01:27:33.840
he doesn't have to sit out
a year before transferring.
01:27:33.840 --> 01:27:36.150
That's true, we
couldn't handle that,
01:27:36.150 --> 01:27:39.353
I don't think my co
would've let me do that, so.
01:27:40.700 --> 01:27:42.390
And the second item of note,
01:27:42.390 --> 01:27:44.360
is dealing with our mapping committee.
01:27:44.360 --> 01:27:46.740
As you know, I chair that committee,
01:27:46.740 --> 01:27:49.830
we have a report due on January 1st
01:27:49.830 --> 01:27:51.900
that that's a statutory deadline.
01:27:51.900 --> 01:27:54.320
We'll be preparing that
and getting it approved,
01:27:54.320 --> 01:27:56.190
hopefully at our December meeting,
01:27:56.190 --> 01:27:59.120
which I think will be on
the 17th of this month.
01:27:59.120 --> 01:28:00.930
And then I wanna publicly thank
01:28:00.930 --> 01:28:01.960
the members of that committee.
01:28:01.960 --> 01:28:04.040
I asked that we have our January meeting
01:28:04.040 --> 01:28:04.880
be a public meeting,
01:28:04.880 --> 01:28:06.780
even though it's not
required by statute.
01:28:06.780 --> 01:28:09.670
I think it's important for us
to publicly update everyone
01:28:09.670 --> 01:28:11.520
on what our work has been.
01:28:11.520 --> 01:28:12.353
So, at that meeting,
01:28:12.353 --> 01:28:14.620
which will be sometime
in the middle of January,
01:28:14.620 --> 01:28:15.690
we'll go over the report
01:28:15.690 --> 01:28:18.310
and get updates from our project teams
01:28:18.310 --> 01:28:20.180
on everything that's been going on
01:28:20.180 --> 01:28:22.270
and what we hope to do going forward.
01:28:22.270 --> 01:28:24.830
And one of the other requests
that I wanna thank them for,
01:28:24.830 --> 01:28:26.440
is there's a statutory deadline
01:28:26.440 --> 01:28:29.360
at the first map be
completed September 1st.
01:28:29.360 --> 01:28:32.593
I've asked our staff, Railroad
staff, Tetum and ERCOT
01:28:32.593 --> 01:28:36.050
that we produced that
first map no later than April,
01:28:36.050 --> 01:28:38.390
there are a number of
other items in Senate Bill 3
01:28:38.390 --> 01:28:40.570
that are pegged to that first map,
01:28:40.570 --> 01:28:43.120
including some weatherization
rules at other agencies.
01:28:43.120 --> 01:28:46.050
And so, everyone
agreed that the first map
01:28:46.050 --> 01:28:48.310
would be out no later than April 1st,
01:28:48.310 --> 01:28:51.363
and I wanna thank them for
agreeing to what I asked for.
01:28:52.610 --> 01:28:54.560
Outstanding on all
fronts, but the higher,
01:28:54.560 --> 01:28:57.150
the accelerated pace of work
on the mapping committee,
01:28:57.150 --> 01:28:59.190
I appreciate all of that work,
01:28:59.190 --> 01:29:02.855
except y'all's
(indistinct) for that joke.
01:29:02.855 --> 01:29:07.130
Oh no, no, I appreciate.
01:29:07.130 --> 01:29:08.506
Mr. Janae, we'll get to see,
01:29:08.506 --> 01:29:10.920
when his team joined CSCC,
01:29:10.920 --> 01:29:12.107
what five-start recruiting looks like.
01:29:12.107 --> 01:29:13.720
That's a good skid
01:29:13.720 --> 01:29:17.010
to talk about trading dads
and families analogies
01:29:17.010 --> 01:29:18.787
to trading coaches and football.
01:29:18.787 --> 01:29:21.095
All right, thank you.
What are you saying.
01:29:21.095 --> 01:29:23.689
(members laughing)
01:29:23.689 --> 01:29:27.400
That concludes
business, sir, I am sorry.
01:29:27.400 --> 01:29:32.400
We have convened in a
duly notice open meeting.
01:29:32.740 --> 01:29:33.930
So, the Commission will now,
01:29:33.930 --> 01:29:38.930
at 11:02 a.m. on December
2nd, 2021, hold a closed session
01:29:39.950 --> 01:29:42.380
pursuant to Chapter 501 of
the Texas Government code,
01:29:42.380 --> 01:29:45.707
the section 551.071,
551.074 and 551.076.
01:29:48.220 --> 01:29:50.280
In that time, we will rearrange the room
01:29:50.280 --> 01:29:55.280
and prepare for our second
half of programming today
01:29:55.660 --> 01:29:57.860
at our work session,
01:29:57.860 --> 01:30:01.150
or to make sure we have
adequate time for all of the above,
01:30:01.150 --> 01:30:03.233
let's plan on reconvening at noon.
01:30:04.500 --> 01:30:05.333
Thank y'all.