WEBVTT

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Good morning. This meeting of the public utility commission

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of texas will come to order to consider matters has

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been duly posted with the secretary of State of texas

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for september 15th 2022. For the record, my name is

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Peter Lake and with me today, are Will McAdams Lori

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Cobos, Jimmy Glotfelty and Kathleen Jackson. By the

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way to the order of the agenda, after our consent agenda

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and then any public comment, we will move directly

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to our closed session to pick up and then pick up our

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normal agenda after closed session. We anticipate a

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somewhat lengthy closed session this morning, at least

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30 or 45 minutes. Uh So just keep that in mind uh as

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a matter of programming for the morning. First up consent

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agenda items Mr. Journeay please. Good morning commissioners

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by individual ballots the following items were placed

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on your consent agenda. 2-4, 6, 8, 9, 11, 12, 16,

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18, 19, 22-26, 32, 35. I need to announce that Commissioner

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Cobos recused herself from um item 18. Thank you sir

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We have a motion to approve the items just describing

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motion a second. All in favor say aye. Aye. Non oppose,

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the motion passes.

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(item:1:Public Comment) This point will begin public comment. Oral comments

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related to a specific agenda item will be heard when

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that item is taken up. This segment is for general

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comments only when we do get to oral comments on specific

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items, stakeholders should not approach the table unless

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oral argument has previously been granted or they have

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been invited by a commissioner as always, speakers

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in public comments segment will be limited to three

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minutes each. Mr Journeay do we have anyone from public

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comment signed up to speak? Yes sir, we have one this

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morning. Mr Cyrus Reed,

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I'll be very brief. Um Cyrus Reed Lone star Chapter

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of the Sierra Club, I'm here to thank you guys uh and

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then do a reminder. So thanking you for starting an

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office of public engagement um it's been put in your

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legislative appropriation request. We and many other

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organizations are in support of that so I wanted to

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publicly thank you for taking that step. Uh second

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um I like yourself and many others were the legislature

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and I think you heard two things from them. One is

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like many folks, they are concerned about rising costs

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and they do want to make sure that on any decision

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that you consider on phase two, that you have adequate

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time for adequate public input, Including you know

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some input from them as well. So just sort of wanted

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to say that publicly and then my reminder is um comments

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on our petition for rulemaking on energy efficiency

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are due tomorrow. Um last night we did submit a letter

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that 26 organizations signed on supporting our petition

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for rulemaking. Um and in that letter It either calls

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on the commission to adopt that rulemaking petition

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which you know, I'm a realist or open up a separate

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project or uh comments on on rulemaking in the near

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future. I know you do have an upcoming meeting an

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EIP meeting on October 18th. I hope that meeting will

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look at all the issues not just the programs but also

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how we pay for them. Um and I think those were the

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points I was going to make and so I'll be quiet. Um

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uh there thank you. Mr Reed, thank you.

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Lights still green. Well done.

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No further public comment. All right, thank you. Mr Journeay

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at this point. Having convened in a duly noticed open

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meeting, the commission will now at 9:38 AM on september

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15th 2020 to hold a closed session, pursuant to chapter

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551 of the texas government code section 551.071 point

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551.074 and 551.076. We'll be back in a bit

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closed session is hereby concluded at 11:31 on september

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15th 2022 the commission will now resume its public

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meeting. Having consulted with our attorneys in closed

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session, we have several motions to consider. First

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Is there a motion to authorize our lawyers to file

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an amicus brief in the Supreme Court of texas in the

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CPS Energy V. ERCOT case number 22-0056. 2nd Motion

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and 2nd on on favour say Aye none opposed motion passes

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I'll entertain a motion to authorize our lawyers to

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file an amicus brief in the Supreme Court of texas

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in ERCOT v. Panda generation case number 22-0196. Got

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a motion to second. All in favor say aye. Aye. Non oppose

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the motion passes. Is there a motion to authorize

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our first counsel to file an answer in support of motions

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to dismiss filed by MISO and Edison Electric Institute

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Inferred docket number E L 22-78 motion is second all

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in favor say aye, non oppose, the motion passes.

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I'll entertain a motion to authorize our lawyers to

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file a brief in support of ERCOTs position in any

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appeal of the adversary proceeding, judgment and interest

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the ERCOT case number 22-03018 in the bankruptcy court

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for the Southern district of texas. Second motion second

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all in favor say aye, aye, none opposed motion passes

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Um Is there a motion to authorize our lawyers to file

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an amicus brief in support of market positions in ERCOT

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V. Just energy in the fifth circuit case number 222-20424

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2nd. Motion to second all in favor say, aye, aye. None

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oppose, the motion passes. Uh and then finally in consideration

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of the discussion in closed session with attorneys

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in the commission, any thoughts on the ongoing proceeding

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of Brazos settlement? Uh Mr Chairman members consistent

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with discussions in closed session, I believe it's

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important to um make some expression uh in terms of

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ongoing uh, discussions about settlement and uh, Brazos

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as such, I would make a motion. I would move to delegate

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authority to the chairman to communicate the PUCs

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participation in settlement negotiations and the PUC

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puc support of ERCOT settlement efforts in the Brasses

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bankruptcy case, in the U. S. Bankruptcy court, in

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the Southern District of Houston case number 2130725.

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Got a motion on the table. A motion to second. All

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in favor say, aye, aye, none opposed the motion passes

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Thank you all for all the work this morning. Thank

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you all for being patient.

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At this point we will move to our regularly scheduled

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programming.

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Mr. Journeay. (item:5:52534) First item is five, docket 52534. Petitioners

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Cisco, central frisco to amend Marilee said CCN

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by expedited release a revised proposed orders filed

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on august 2nd. ALJ recommends no changes in response

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to exceptions. Commissioner McAdams filed a memo. Thank

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you sir. Well, uh, mr Chairman members uh, the petition

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of central frisco limited to amend Merilee Special

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utility utility district certificate of convenience

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and necessity in collin county by expedited release

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bears a final order I filed a memo on this, correcting

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and clarifying a number of findings of fact. Uh, ultimately

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if the parties want to refile this, they need to clarify

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and provide evidence on the question of the meter or

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meters involved. And if there are uh, an inactive meter

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or meters that have the capacity to provide service

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I would think that, um, it or they would need to be

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carved out of the petition. Therefore, I would move

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to that we should adopt the revised proposed order

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that denies central frisco's petition but modify that

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order for accuracy consistent with my memo. Makes sense

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to me. Other thoughts, comments or second of the motion

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on the floor.

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I'll second the motion. Thank you. We've got a motion

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in a second. All in favor say, aye unopposed motion

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passes. Thank you. Thank you. (item:7:53063) Next up Mr. Journeay. Item seven

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is docket 53063 is petitioned by outside city ratepayers

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appealing water rates established by the city of Leander

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A proposal for decision was filed on august 9th

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The ALJ recommended no changes in response for two exceptions

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couple moving pieces here thoughts. I live close to

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this area, so its near and dear to my heart. Um

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as a matter of policy, um, in my view, this type of

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appeal where an outside city or out of district ratepayer

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looks to the commission to appeal a rate change is

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in many cases, the only outlet these ratepayers have

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to seek rate relief. Often they do not get a vote for

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or against those that make the decisions on the rates

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And as they are outside of the city limits as such

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outside, uh, city ratepayers will often bear greater

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burden in rates than those ratepayers inside the district

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or the city limits Since coming to the commission,

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we've all sought ways to make the commission more open

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and responsive to Texans um and to defend the spirit

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of the law. Given this context, I do not believe that

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we should make these appeals more burdensome than they

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already are. The PFD would require that all of the

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informational items listed in 16 TAC 24 103 subsections

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A 1 through 5, be mandatory. This is not how this

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rule has been interpreted in the past and is not consistent

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with our current policy. For example, previously docket

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number 42910, much like in this petition after the

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first page, the signature page did not contain the

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clear uh and concise statement of the appeal. And like

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this, docket the petitioners amended the petition,

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adding the description uh to the subsequent signature

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pages. In response. The SOAH ALJ in ruling against

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the motion to dismiss, stated, the commission's rule

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does not make the inclusion of the information a requirement

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and the rule does not provide that a petition must

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contain the missing information. It only states that

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the signature pages should contain the information

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and this idea that the information in this petition

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is to be viewed prescriptively uh and has been repeated

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in subsequent dockets. So I share that the ALJ's

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opinion and the commission's previous practice, I believe

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that the petition compliance with 16 TAC 24 103

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subsection A, the statutory requirements and that good

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cause exception is unnecessary. We should not make

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it harder for ratepayers that otherwise do not have

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representation to appeal their rates, which is the

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spirit of the law.

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I like most of what I heard. But we do have some

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attorneys who should know better though.

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We shouldn't block the process. But when folks hire

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attorneys that come before this commission frequently

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these folks should have received better counsel. So

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we don't have to even be up here considering this.

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I would say. I mean, I kind of take, you know, a

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little bit different view and that is that uh that

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There is is the word should a must in terms of what

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what appears on all of the documents, uh where all

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the signatures are being requested. Um it's clear that

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they passed the 10% threshold of ratepayers signing

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up for the appeal. Um I just to me, I wonder if

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this um is the one to throw out on a technicality or

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if we grant the good cause exception. Um and you know

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remand to SOAH, we reject the PFD, but you know, I

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I don't know, I just it's not a huge policy issue.

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I'm just um, I'm sympathetic to those that are who

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have signed the document. Um, Mr chairman. I understand

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you know, part of our duty here is to protect the ratepayer

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and that means that they know what they're signing

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So um, you know, I can go both ways, but I just

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I thought in terms of docket management, get this thing

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done and and and and I would for the benefit of the

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commission, I'd also highlight um they did go through

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the secondary effort of correcting the petition and

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going back and having signed affidavits that no, they

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did know what they were signing after the fact. So

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they went back and tried to cure this for the purposes

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of procedural hurdles that they may face. So yeah,

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a little bit, a little bit of grace, I don't think

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we should hold it up, but and perhaps there's a time

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in the future to take a closer look at

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cleaning this up down the road. But the folks that

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come up here, you know, the legal representation that

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comes up here consistently shouldn't have to go back

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for the affidavits like this, this is not one of the

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most complex issues this commission addresses. Let's

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get it. These folks should get better for their money

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So let that serve as a warning, correct. Great. Yeah

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I mean, look, this is a balancing act. I agree with

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a lot of points that comes from McAdams raised in terms

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of not um overly being overly prescriptive with our

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role um as written, I think the role could use some

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clarity in terms of, of just laying out a better framework

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of what our expectations are. But the overarching policy

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goal here is to ensure that there is a pathway for

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outside ratepayers to be able to appeal rates that

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they don't have any vote on um or or any, you know

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be able to voice their concerns. And so weighing that

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against also ensuring that they comply with providing

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the requisite information, because I do agree with

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you chairman Lake, they got to know what they're signing

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You want to be able to at least have these parties

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Um the ratepayers, the outside ratepayers, the organizers

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the attorneys that are putting together these petitions

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to strive to give us to present all that information

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and importantly, the concise statement of what you're

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signing. Um so that um the ratepayers are aware as

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they put their signature on on those blocks, so it's

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a balancing act and and um where I come out on this

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is um, you know, let rejecting the PFD as well, um

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that dismisses the outside ratepayers petition, because

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I do think that an overly prescriptive policy going

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forward would um trump that the purpose of what we're

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trying to do here and that is giving the outside ratepayers

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voice and and ensuring that the public and um has an

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opportunity to voice concerns within the spirit of

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the law. And if our spirit of the law isn't clear well

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today, I think we've heard some warnings and we also

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recognized that the rule needs to be a little bit more

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clear, but, you know, you should strive to meet to

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provide us with all that information. It's important

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um to have that information. The petition

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agreed and this this ability of ratepayers is important

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We shouldn't obstruct it today. But the grace you mentioned

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is not perpetual and between we everybody's quite aware

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of the extensive amount of rule makings ahead of us.

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So safe to say this probably won't be addressed for

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a while. And in the meantime there's there's a shot

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clock on that race. Well, I don't know how long it

00:17:26.130 --> 00:17:29.329
is, but from one commissioner who will be begging for

00:17:29.329 --> 00:17:31.859
it yet another rulemaking later today. No, I won't

00:17:31.859 --> 00:17:35.230
ask for that right now, but it needs to be taking it

00:17:35.349 --> 00:17:37.720
Okay, I think everybody's

00:17:39.400 --> 00:17:46.240
with deference to Mr Smeltzer. Commissioner McAdams we have

00:17:46.240 --> 00:17:48.319
talked about it was important to make clear that this

00:17:48.319 --> 00:17:50.640
commission's jurisdiction established by the legislature

00:17:50.640 --> 00:17:54.509
and statute and by our rules and that to the extent

00:17:54.509 --> 00:17:57.430
this PFD determine this Commission had no jurisdiction

00:17:57.430 --> 00:18:00.160
over this type of complaint. I believe we have jurisdiction

00:18:00.170 --> 00:18:05.029
Um We retain jurisdiction. We will always have jurisdiction

00:18:06.829 --> 00:18:08.970
The other I guess question is, do we want all this

00:18:08.970 --> 00:18:13.390
information um at the time of the signature or upon

00:18:13.390 --> 00:18:18.410
filing of the petition? That was the other,  I guess

00:18:18.410 --> 00:18:21.529
question that we need to. Well, as I heard Commissioner

00:18:21.529 --> 00:18:26.099
McAdams it's the rule is not mandatory on these provisions

00:18:26.710 --> 00:18:31.200
Word should does not mean must, but you should strive

00:18:31.200 --> 00:18:33.259
to give us all the information. We would love it would

00:18:33.269 --> 00:18:37.539
it would make your life easier. Another opportunity

00:18:37.539 --> 00:18:41.470
for clean up. Hence the word should and the ambiguity

00:18:42.809 --> 00:18:47.710
All right. Uh So with that Mr Chairman and I believe

00:18:47.720 --> 00:18:51.170
uh we also need to address the issue of good cause

00:18:51.180 --> 00:18:52.250
Uh

00:18:54.289 --> 00:18:58.130
um so I would move to reject the PFD recommendation

00:18:58.130 --> 00:19:02.789
to dismiss the petition For the reasons discussed consistent

00:19:02.789 --> 00:19:07.250
with our discussion. Second. Got a motion to second.

00:19:07.319 --> 00:19:11.309
All in favor say aye, aye none opposed motion passes

00:19:12.910 --> 00:19:15.339
Thank you all good discussion Next up, Mr Journeay

00:19:16.579 --> 00:19:20.670
(item:10:53262) Item 10 is docket 53262, petition of Blackland

00:19:20.670 --> 00:19:23.980
Water Supply Corporation in the city of Rockwall for

00:19:23.980 --> 00:19:28.369
approval to amend the CCN under Texas water code 13

00:19:28.369 --> 00:19:32.210
255 A. Before the commission is an appeal of order

00:19:32.210 --> 00:19:33.440
number six.

00:19:35.380 --> 00:19:39.720
Another interesting interesting one thoughts, comments

00:19:42.519 --> 00:19:47.329
Yeah. Uh Mr Chairman, I believe motion is in order

00:19:47.339 --> 00:19:50.289
um that we should grant in part and deny in part the

00:19:50.289 --> 00:19:53.460
appeal order number six. Specifically I would grant

00:19:53.460 --> 00:19:55.849
the appeal on the issues of notice of the petition

00:19:55.859 --> 00:19:58.869
and the need to obtain the CCN to provide service.

00:19:58.880 --> 00:20:02.880
Um However, I would ask the petitioners for clarification

00:20:03.250 --> 00:20:06.799
as to where the boundary in the 1989 service agreement

00:20:06.809 --> 00:20:09.809
is in relation to big Texas facilities that are currently

00:20:09.809 --> 00:20:14.369
receiving service from Blackland water WSC. Commissioner

00:20:14.369 --> 00:20:18.019
McAdams apparently you were not informed, I was just

00:20:18.019 --> 00:20:20.950
informed this morning. The judge in this case had asked

00:20:20.950 --> 00:20:26.490
for some clarity. Uh the uh attorneys for Rockwall

00:20:26.500 --> 00:20:31.710
filed a letter stating that while part of Black lands

00:20:31.710 --> 00:20:35.339
property is within the confines of the agreement and

00:20:35.339 --> 00:20:38.579
needs to be decertified that the consuming facility

00:20:38.579 --> 00:20:42.490
on the property of big tex is not within that is so

00:20:42.490 --> 00:20:48.859
it is outside that area. So we uh we would grant so

00:20:48.859 --> 00:20:51.500
our concern here that that we wanted to send it back

00:20:51.500 --> 00:20:54.910
for is I think we have great clarity. I don't know

00:20:54.910 --> 00:20:57.089
that any of this is in the evidence. We need to get

00:20:57.099 --> 00:21:01.119
this cleared up in the evidence uh and the judge can

00:21:01.119 --> 00:21:08.250
take care of that. Okay, so the granting the appeal

00:21:08.259 --> 00:21:11.400
We don't need to re manage grant the appeal. Yeah.

00:21:11.950 --> 00:21:15.420
So I moved to grant the appeal the thoughts comments

00:21:15.420 --> 00:21:20.279
for a second. I'm in agreement as well. 2nd. Great

00:21:20.279 --> 00:21:24.079
glad we had all the info. Again, back to that theme

00:21:24.079 --> 00:21:26.529
of the sooner the better I guess we need to finish

00:21:26.529 --> 00:21:29.670
out that vote. Mr motion is second on the floor. All

00:21:29.670 --> 00:21:34.069
in favor say aye, aye none opposed motion passes. Next

00:21:34.069 --> 00:21:39.019
item please. (item:14:52765) Item 14 is docket 52765. It's the application

00:21:39.019 --> 00:21:43.059
of Daemon systems for SPCOA. Proposal

00:21:43.059 --> 00:21:47.039
for decision was filed on august 2nd. ALJ recommends

00:21:47.039 --> 00:21:50.150
no changes in response to exceptions. Do you want to

00:21:50.150 --> 00:21:51.890
pull up the next item to you or do you wanna take

00:21:51.890 --> 00:21:54.779
it? I'm happy to take both of them the same same concept

00:21:54.779 --> 00:21:57.180
that seemed pretty straightforward. (item:15:53076) Item 15 is docket

00:21:57.180 --> 00:22:00.559
53076. It's the application of earth grid PPC. For

00:22:00.559 --> 00:22:04.069
S. P. C. O. A. Proposal for decision was filed on august

00:22:04.069 --> 00:22:06.839
8th. The A. L. J. Recommends no changes in response

00:22:06.849 --> 00:22:07.829
to exceptions.

00:22:09.630 --> 00:22:14.059
Uh pretty straightforward but wanna hear some thoughts

00:22:14.059 --> 00:22:18.019
and comments. Sure. So we're taking these up together

00:22:18.019 --> 00:22:19.789
because they're addressing the same issue on the S

00:22:19.789 --> 00:22:23.700
P. C. O. A certification. Um Ultimately, I think based

00:22:23.700 --> 00:22:27.450
on our prior precedent interpretation of rules and

00:22:27.460 --> 00:22:30.269
and statute, I think I would be in favor of rejecting

00:22:30.269 --> 00:22:34.240
the PFD in both cases and remanding the case is back

00:22:34.240 --> 00:22:37.809
to docket management. Um For the Damon case, I know

00:22:37.809 --> 00:22:41.309
that Damon has not been participating in the case uh

00:22:41.319 --> 00:22:44.109
for some time and once were remanded back so that the

00:22:44.109 --> 00:22:47.130
commission ALJ can then consider the case under commission

00:22:47.140 --> 00:22:51.099
commission staff's new position. Um If Damon doesn't

00:22:51.099 --> 00:22:53.859
show up, then it's up to the ALJ to then dismiss the

00:22:53.859 --> 00:22:57.410
case for failure to prosecute at that time. With respect

00:22:57.410 --> 00:23:01.440
to the Earth grid case, would deny Earth grid's motion

00:23:01.440 --> 00:23:05.599
to withdraw um that was filed after the PFD was issued

00:23:05.609 --> 00:23:09.329
reject the PFD, remand the case back to docket management

00:23:09.339 --> 00:23:11.569
So the case can be processed with commission staff's

00:23:11.569 --> 00:23:15.380
new position. Um and allow Earth grid to also correct

00:23:15.390 --> 00:23:18.950
Um The form that was appended to their application

00:23:18.960 --> 00:23:23.009
um with respect to question 10 B.

00:23:25.410 --> 00:23:28.549
I agree with that. Mr. Chairman this for the purposes

00:23:28.549 --> 00:23:32.019
of Earth grid. It puts the ball back in their court

00:23:32.029 --> 00:23:36.009
let them decide how they want to proceed. So agree

00:23:36.009 --> 00:23:42.009
on all points. Uh Alright, given the separate separate

00:23:42.019 --> 00:23:45.130
motions, given the nuances between the cases, anybody

00:23:45.130 --> 00:23:51.559
want to start with uh 14 Damon. Sure. uh I would move

00:23:51.559 --> 00:23:53.789
to reject the PFD and remand the case back to docket

00:23:53.789 --> 00:23:56.119
management for further processing.

00:23:59.140 --> 00:24:03.250
Second motion second all in favor say aye, aye, none

00:24:03.250 --> 00:24:07.109
oppose the motion passes. I gotta have a motion first

00:24:07.109 --> 00:24:10.519
grid. Okay. So I would move to deny Earth grids. Motion

00:24:10.519 --> 00:24:13.829
to withdraw, reject the PFD. Remand the case back to

00:24:13.829 --> 00:24:16.130
docket management for further processing and to allow

00:24:16.130 --> 00:24:19.369
Earth grid to correct the form appended to their application

00:24:19.380 --> 00:24:22.980
Second got a motion in a second. All in favor say aye

00:24:23.900 --> 00:24:30.259
not opposed motion passes. Next item please 17 we don't

00:24:30.259 --> 00:24:35.099
have anything on that. (item:20:52195) item 20 is docket 52195. It

00:24:35.099 --> 00:24:38.539
is the application of el paso electric company to change

00:24:38.539 --> 00:24:42.500
rates a proposed order filed on august 26 correction

00:24:42.500 --> 00:24:46.000
memos filed on september 7th and I have a memo with

00:24:46.000 --> 00:24:48.630
proposed changes to the order. All right, thank you

00:24:48.630 --> 00:24:51.819
sir. This was a settlement. I believe. Any thoughts

00:24:51.819 --> 00:24:52.500
comments

00:24:55.900 --> 00:25:01.450
I hate black box settlements. Um Just uh there's been

00:25:01.450 --> 00:25:03.549
a little commission precedent here that these things

00:25:03.549 --> 00:25:06.390
have happened and and I know they're gonna continue

00:25:06.390 --> 00:25:11.009
to happen and that's fine. Um I was gonna do a black

00:25:11.009 --> 00:25:14.490
box memo today, uh Commissioner memo that was gonna

00:25:14.490 --> 00:25:20.400
have um written to you all and from me, I was gonna

00:25:20.400 --> 00:25:23.009
say black box memo, and then it was gonna be totally

00:25:23.019 --> 00:25:26.089
empty until the last line that says, I look forward

00:25:26.089 --> 00:25:29.599
to discussing these details with you with the intent

00:25:29.599 --> 00:25:32.000
that we know nothing about what's inside this thing

00:25:32.009 --> 00:25:35.910
So um I think these are part of the way things happen

00:25:35.920 --> 00:25:39.430
here, We're not going to change it, but you know, they're

00:25:39.440 --> 00:25:42.630
there, it's kind of hard to make a total decision,

00:25:42.640 --> 00:25:44.829
you know, when you're when you don't know all of the

00:25:44.829 --> 00:25:50.859
facts that being said. Um it's uncontested. Um you

00:25:50.859 --> 00:25:52.809
know, the writers and surcharges all have been agreed

00:25:52.809 --> 00:25:56.549
to by the parties. I think most important in this.

00:25:56.559 --> 00:26:01.410
Um this adds to the ring fencing mechanism that we

00:26:01.410 --> 00:26:05.369
put in a in a lot of other um utility areas. We

00:26:05.369 --> 00:26:08.509
prevent commingling of assets and you know, it seems

00:26:08.509 --> 00:26:11.140
that uh what we can see of this, it's a pretty reasonable

00:26:11.140 --> 00:26:15.559
settlement. I have an agreement. Oh, sorry, I look

00:26:15.559 --> 00:26:17.940
forward, I'm sure you'll have an opportunity to file

00:26:17.950 --> 00:26:19.910
such a clever memo in the future and look forward to

00:26:19.910 --> 00:26:20.579
seeing that

00:26:24.359 --> 00:26:29.049
we know how wordy he is. It's very wordy. I'm in

00:26:29.049 --> 00:26:31.549
agreement as well. I think based on my review of the

00:26:31.549 --> 00:26:34.029
settlement agreement pros order, I think the settlement

00:26:34.029 --> 00:26:37.359
is reasonable, I zoomed in towards the back end on

00:26:37.359 --> 00:26:40.650
the cost allocation, great design aspect of it. Um

00:26:40.660 --> 00:26:44.089
I know that there are some sharp decreases in some

00:26:44.089 --> 00:26:48.029
of the charges that the industrials are Um had been

00:26:48.029 --> 00:26:50.849
paying, that had been significantly reduced, but upon

00:26:50.849 --> 00:26:53.539
looking at the net impact of the overall rate case

00:26:53.549 --> 00:26:56.210
you do see that they're actually, their rates are going

00:26:56.220 --> 00:27:00.009
up. So there's no, you know, I was trying to cross

00:27:00.019 --> 00:27:03.069
correlate that back to what actually what was happening

00:27:03.079 --> 00:27:05.640
because I'm very interested in cost allocation rate

00:27:05.640 --> 00:27:08.920
design. I do see that the residentials are incurring

00:27:08.920 --> 00:27:14.670
at 2.9% um increase on their bills and and um you know

00:27:14.670 --> 00:27:17.309
I know OPUC signed onto the settlement agreement um

00:27:17.309 --> 00:27:20.289
and that that gives me some comfort um but you know

00:27:20.289 --> 00:27:22.900
as we look forward just to to be cognizant of the fact

00:27:22.900 --> 00:27:25.660
that, you know, there will be a 2.9% increase to residential

00:27:25.660 --> 00:27:28.529
ratepayers out in el paso and and other charges that

00:27:28.529 --> 00:27:31.480
may be coming down the pike through their AMS surcharge

00:27:31.490 --> 00:27:37.569
in another matters. So, um I would be in favor of approving

00:27:37.579 --> 00:27:42.740
the the agreement um and and the proposed order, but

00:27:42.750 --> 00:27:45.269
I just wanted to note that, you know, those are issues

00:27:45.269 --> 00:27:48.490
that I wanted to focus on in this case, I think the

00:27:48.490 --> 00:27:50.720
rest of the revenue requirement, ready to return and

00:27:50.730 --> 00:27:56.089
big aspects of the case were reasonable, agreed agreed

00:27:56.089 --> 00:27:56.900
on all points.

00:27:59.279 --> 00:28:03.470
Not a huge fan myself, but given the circumstances

00:28:03.470 --> 00:28:07.750
and the fact that OPUC and major consumers of power

00:28:07.759 --> 00:28:13.730
signed on in, in that area and um

00:28:15.319 --> 00:28:20.599
willing to move forward. Thoughts, any other thoughts

00:28:20.599 --> 00:28:22.930
comments or a motion to approve the proposed order

00:28:24.490 --> 00:28:30.329
I would support you in a motion and second it, we've

00:28:30.329 --> 00:28:33.349
got a motion and a second. All in favor say, aye, I

00:28:33.799 --> 00:28:35.509
don't oppose the motion passes

00:28:37.230 --> 00:28:40.450
next item please. We need the most. Sorry, can I?

00:28:42.319 --> 00:28:46.519
We need that motion to be amended uh, to be consistent

00:28:46.519 --> 00:28:48.730
with commission Commission memo,

00:28:51.029 --> 00:28:51.589
do we

00:28:54.240 --> 00:28:55.450
as amended by the commission

00:28:57.640 --> 00:28:58.180
fascinating.

00:29:01.950 --> 00:29:04.440
We don't have a commission memo on that. We just had

00:29:04.440 --> 00:29:07.519
a correction memo from the judge.

00:29:12.460 --> 00:29:13.279
I believe you announced,

00:29:14.849 --> 00:29:17.900
you know, we'll table this to the end of the agenda

00:29:17.910 --> 00:29:21.339
I'm sorry. And I have a memo with proposed changes

00:29:21.339 --> 00:29:26.089
to the proposed order. I move that we propose that

00:29:26.089 --> 00:29:31.430
we approve the uh, the docket item uh, consistent with

00:29:31.440 --> 00:29:34.619
the commission counsel memo. Second motion is that

00:29:34.619 --> 00:29:36.910
correct emotion in a second? All in favor say, aye

00:29:36.920 --> 00:29:43.109
aye, not opposed motion passes. Thank you. Next item

00:29:43.140 --> 00:29:47.839
(item:21:52485) Item 21 is docket 52485 .It's the application of SPS

00:29:47.839 --> 00:29:51.789
to ammend its CCN to convert the Harrington station from

00:29:51.789 --> 00:29:55.670
coal to natural gas. Proposal for decision was filed

00:29:55.670 --> 00:30:00.440
on july 25th. The ALJ does not recommend any changes

00:30:00.450 --> 00:30:03.869
in response to exceptions? I have a memo with proposed

00:30:03.880 --> 00:30:06.289
changes to the proposal for decision.

00:30:07.829 --> 00:30:12.289
Do you have a commission memo? This this made a lot

00:30:12.289 --> 00:30:14.640
of sense to me but of course, happy to hear thoughts

00:30:14.640 --> 00:30:15.559
and comments.

00:30:18.799 --> 00:30:21.740
I'm in favor of adopting the SOAH PFD and granting

00:30:21.740 --> 00:30:24.869
SPS's CCN application to convert all three

00:30:24.869 --> 00:30:27.470
Harrington generation station units from coal to natural

00:30:27.470 --> 00:30:31.160
gas and approve the natural gas pipeline for supplying

00:30:31.160 --> 00:30:34.279
the gas to the converted units based on route number

00:30:34.279 --> 00:30:38.930
two. I'd support you on that commissioner. I mean,

00:30:38.940 --> 00:30:44.410
they did an analysis on the effect of um the retirement

00:30:44.420 --> 00:30:49.829
towards their uh the new 15% reserve margin. Um this

00:30:49.829 --> 00:30:53.400
is going to be important in a sooner rather than later

00:30:53.410 --> 00:30:56.609
in terms of the accredited values of these facilities

00:30:56.619 --> 00:31:01.029
in uh in the next few years. And I'd also highlight

00:31:01.039 --> 00:31:05.440
that um Harrington, the location, the accredited value

00:31:05.440 --> 00:31:09.700
that it can provide will help support that utility

00:31:09.710 --> 00:31:15.890
in um meeting increased obligations under a new capacity

00:31:15.900 --> 00:31:19.630
value assigned to winter months as well. So right now

00:31:19.630 --> 00:31:23.809
it's assigned to summer but active conversations um

00:31:23.819 --> 00:31:29.549
and policy development inside SPP is focused on winter

00:31:29.549 --> 00:31:35.069
PRMs. So these will be invaluable in the next few years

00:31:35.079 --> 00:31:38.230
We're all learning winners just as important as exactly

00:31:38.430 --> 00:31:41.049
and I would say in the back and I know various parties

00:31:41.059 --> 00:31:45.549
OPUC the city's proposed conditions on our approval

00:31:45.549 --> 00:31:48.200
and I will say that those are very important issues

00:31:48.200 --> 00:31:49.900
that they have raised and those are issues that we

00:31:49.900 --> 00:31:53.519
will address in SPS's next rate case um with respect

00:31:53.519 --> 00:31:56.549
to the appreciation and the booking of, you know how

00:31:56.549 --> 00:32:01.849
those pipeline costs are booked and and reviewed. And

00:32:01.849 --> 00:32:04.819
also with respect to, you know, cost caps and capital

00:32:04.819 --> 00:32:07.890
expense caps, those, you know, what would be reviewing

00:32:07.890 --> 00:32:11.740
all those costs in the rate case that SPS will file

00:32:11.750 --> 00:32:15.750
in the future and um for to ensure that they are just

00:32:15.750 --> 00:32:19.099
and reasonable and uh necessary and prudently incurred

00:32:19.099 --> 00:32:22.829
So those issues are important. But with respect to

00:32:22.839 --> 00:32:26.359
our review of the CCN here today, we're focused on

00:32:26.359 --> 00:32:30.359
the criteria for CCN um compliance and we'll review

00:32:30.359 --> 00:32:33.369
those issues in the next rate case huge, hugely important

00:32:33.369 --> 00:32:35.109
point that just because they're not taking up today

00:32:35.119 --> 00:32:39.940
does not mean they are ignored or adjudicated. I would

00:32:39.950 --> 00:32:42.920
uh I would say this case kind of disturbs me a little

00:32:42.920 --> 00:32:46.970
bit but I have to be okay with it. Um I feel

00:32:46.970 --> 00:32:50.869
a little hands tied here with what SPP

00:32:50.869 --> 00:32:54.980
has done. Um We have an older older unit, we've

00:32:54.980 --> 00:33:00.650
got three older units um and SPP or SPS, uh the R

00:33:00.650 --> 00:33:02.900
T. O. Or the art what the R. T. O. Has done

00:33:02.900 --> 00:33:06.829
in resource Adequacy. Um first of all tells me that

00:33:06.839 --> 00:33:11.529
this is the right decision to do this. Um The I just

00:33:11.529 --> 00:33:14.690
don't like upgrading and changing fuels, you know,

00:33:14.690 --> 00:33:17.190
on a very old plan. I would hope that in the future

00:33:17.200 --> 00:33:20.359
that this site could be used for a different type of

00:33:20.359 --> 00:33:23.960
plant, a new type of gas plant rather than conversion

00:33:23.960 --> 00:33:28.000
of an old coal plant. Um that uses old technology um

00:33:28.009 --> 00:33:30.400
that's not where we are today and I think there's a

00:33:30.410 --> 00:33:34.789
there's an issue about uh preserving injection rights

00:33:34.789 --> 00:33:39.150
into uh into SPP so they gotta keep utilizing this

00:33:39.150 --> 00:33:43.470
plant um All those are reasons to do this, but um the

00:33:43.480 --> 00:33:48.779
costs allocated to Texans is pretty limited um and

00:33:48.789 --> 00:33:51.279
you know, again, I feel like it's something that we

00:33:51.279 --> 00:33:53.240
have to do, not, something that I just really wanted

00:33:53.250 --> 00:33:57.529
You told me to vote for that 15%. Pr I'm just kidding

00:33:59.569 --> 00:34:02.170
but there's also a benefit to having the dispatchable

00:34:02.170 --> 00:34:05.900
fuel available now versus having to wait to build a

00:34:06.009 --> 00:34:09.739
new plant conceivably in the future. So there is, as

00:34:09.739 --> 00:34:12.719
you mentioned, there's a timing benefit here. Absolutely

00:34:12.940 --> 00:34:15.480
and a lot of the cost of the pipeline, they are, the

00:34:15.480 --> 00:34:17.829
vast majority of them are, everybody likes efficiency

00:34:18.630 --> 00:34:24.170
Uh we prefer it, but here and now we need to need

00:34:24.170 --> 00:34:28.699
dispatchable and we need it uh in the form of gas uh

00:34:28.710 --> 00:34:30.949
all that being said, agreed with all the very good

00:34:30.949 --> 00:34:35.989
points. Uh do we have a motion to motion to adopt the

00:34:35.989 --> 00:34:39.670
proposal as is modified by the Commission council memo

00:34:40.570 --> 00:34:43.789
We better check, I believe that's what it was and I

00:34:43.789 --> 00:34:48.349
would so move yes sir, Got a motion and a second. All

00:34:48.349 --> 00:34:52.360
in favor say aye, none oppose the motion passes

00:34:53.130 --> 00:34:54.690
next item please sir.

00:34:56.309 --> 00:35:01.699
(item:27:53774) Item 27 is docket 53774 agreed reported violation

00:35:01.699 --> 00:35:05.449
relating to the city of Burnett's violations. PURA

00:35:05.449 --> 00:35:09.139
and commission rules related to power line inspection

00:35:09.139 --> 00:35:11.860
and safety reports. A proposed order was filed july

00:35:11.860 --> 00:35:16.300
13th. No exceptions or corrections were followed. Thank

00:35:16.300 --> 00:35:19.360
you sir. Thoughts, comments I would say mr Chairman

00:35:19.360 --> 00:35:22.829
that we should uh we should support this penalty. Uh

00:35:22.840 --> 00:35:29.559
this agreement um with the um comment that missing

00:35:29.559 --> 00:35:34.500
deadlines on this law um filings are unacceptable.

00:35:34.510 --> 00:35:37.679
We've had Children that have died as a result of non

00:35:37.679 --> 00:35:41.019
compliance, non compliance with the law. The filing

00:35:41.019 --> 00:35:46.750
should be done. Um You know, I'm I'm glad that um these

00:35:46.750 --> 00:35:50.070
are getting cleaned up. Um we haven't agreed to settlement

00:35:50.070 --> 00:35:52.369
but you know, in honor of the brand and son and the

00:35:52.369 --> 00:35:56.550
other child who died that I think we got to uh follow

00:35:56.550 --> 00:35:58.960
the legislature that says that these things have to

00:35:58.960 --> 00:35:59.730
happen.

00:36:01.780 --> 00:36:08.159
Absolutely, thank you for that. Is there a motion I

00:36:08.170 --> 00:36:13.360
moved to support the uh violation uh about the proposed

00:36:13.360 --> 00:36:16.969
order under the proposed order. Got a motion and second

00:36:16.969 --> 00:36:20.699
all in favor say, aye, aye none opposed motion passes.

00:36:20.710 --> 00:36:27.530
(item:28:51603) I believe that brings us to item 28 regarding distributed

00:36:27.539 --> 00:36:30.119
Energy Resources. Commission McAdams has filed a memo

00:36:30.119 --> 00:36:32.750
Would you lay that out or you have some comments. I

00:36:32.750 --> 00:36:34.940
have some comments. You know, I have not filed a memo

00:36:34.940 --> 00:36:39.650
yet, but thank you Mr chairman and thank you for indulging

00:36:39.650 --> 00:36:44.010
me in an update for the commission on issues related

00:36:44.010 --> 00:36:50.289
to uh distributed energy. Uh jeez after that executive

00:36:50.289 --> 00:36:55.889
session, I'm fried storage resources um into the distribution

00:36:55.900 --> 00:37:01.880
system. Uh we are currently underway on a series of

00:37:01.880 --> 00:37:07.380
negotiations on how to streamline processes for interconnection

00:37:07.389 --> 00:37:10.980
of all resources, both that transmission and distribution

00:37:10.980 --> 00:37:14.590
But as a part of this project, 51603, broadly we're

00:37:14.590 --> 00:37:18.920
working on processes to interconnect D E S R S so batteries

00:37:18.929 --> 00:37:24.880
in this case at the distribution level um just as a

00:37:24.889 --> 00:37:29.250
couple of points of background, 350 megawatts of distribution

00:37:29.250 --> 00:37:33.050
level, batteries and ERCOT system are providing transmission

00:37:33.050 --> 00:37:38.670
benefits. Um PUC has provided thus far limited guidance

00:37:38.679 --> 00:37:42.190
on interconnection and how that process should proceed

00:37:42.199 --> 00:37:46.800
Uh Battery developers have petitioned the PUC uh for

00:37:46.800 --> 00:37:51.369
more clarity and transparency and standardization to

00:37:51.380 --> 00:37:54.760
to make it as efficient as possible to bring more resources

00:37:54.760 --> 00:37:58.769
onto the system at any level. TDUs and battery

00:37:58.769 --> 00:38:01.769
developers have been working on a compromise behind

00:38:01.769 --> 00:38:05.840
the scenes um toward the ultimate goal of having a

00:38:05.840 --> 00:38:09.090
straw man for a potential rulemaking that would provide

00:38:09.090 --> 00:38:14.030
that clarity. Um there have been three major points

00:38:14.030 --> 00:38:19.739
of discussion uh process and timelines, cost allocation

00:38:19.750 --> 00:38:23.610
and then the status of ERCOTs non curtailable circuit

00:38:23.610 --> 00:38:27.269
requirements. So the issue of a dedicated feeder for

00:38:27.269 --> 00:38:30.730
those resources participating in ancillary services

00:38:30.739 --> 00:38:36.099
So when a battery or a DESR Interconnects at distribution

00:38:36.110 --> 00:38:40.260
there's a substation and on that substation there's

00:38:40.269 --> 00:38:44.250
headroom and capacity to interconnect that resource

00:38:44.539 --> 00:38:49.510
Um But for the purposes of Load shed planning, um ERCOT

00:38:49.510 --> 00:38:53.019
has to in order to allow that resource to participate

00:38:53.030 --> 00:38:56.380
in Ancillary services. ERCOT has to know that that

00:38:56.389 --> 00:39:00.150
feeder that that circuit that the battery is on will

00:39:00.150 --> 00:39:04.469
not be rotated as a part of an emergency response plan

00:39:04.480 --> 00:39:08.250
A Load shed plan. And so we've been trying to work

00:39:08.250 --> 00:39:13.119
through the nuances uh and and what could become modification

00:39:13.119 --> 00:39:17.179
to ERCOT protocols to allow these resources to come

00:39:17.179 --> 00:39:21.400
on to bid into uh Ancillary services and to have the

00:39:21.409 --> 00:39:24.429
uh for ERCOT to have the security that reliability

00:39:24.429 --> 00:39:27.650
is maintained while also allowing these new valuable

00:39:27.650 --> 00:39:31.280
resources to provide a system wide benefit through

00:39:31.280 --> 00:39:35.000
the ancillary services market. So here's the status

00:39:35.010 --> 00:39:42.030
uh We've made great headway right now, um a draft interconnection

00:39:42.039 --> 00:39:45.929
standardized interconnection process is almost ready

00:39:45.940 --> 00:39:50.429
to be published and to inform this commission published

00:39:50.429 --> 00:39:55.190
for comment from to be filed as as a part of an

00:39:55.190 --> 00:39:59.699
informal agreement keyword informal between the investor

00:39:59.699 --> 00:40:02.820
owned utility transmission, distribution utilities

00:40:02.820 --> 00:40:06.599
T and TVSPs Um and the DESRs

00:40:06.599 --> 00:40:09.230
but the intention for further comment from

00:40:09.230 --> 00:40:11.670
the general public. That's correct. Yes, that's correct

00:40:11.679 --> 00:40:17.980
We are also engaged in discussions on uh interconnection

00:40:17.980 --> 00:40:24.929
cost allocation and the pathway that DESRs may follow

00:40:24.940 --> 00:40:31.110
to um to have cost either shared by others or to pay

00:40:31.110 --> 00:40:34.349
their way to get to interconnected transmission again

00:40:34.349 --> 00:40:37.800
that substation and then to have a bridge built between

00:40:37.800 --> 00:40:41.159
their two transmission to have their energy flow onto

00:40:41.159 --> 00:40:45.800
the main system. And the ERCOT team is working on clarifying

00:40:45.800 --> 00:40:48.389
their requirement and opening up the market to more

00:40:48.389 --> 00:40:51.539
resources as a part of the dedicated feeder issue.

00:40:52.420 --> 00:40:57.300
Um So here here's where we're at and here's where I

00:40:57.300 --> 00:40:58.090
need guidance

00:40:59.869 --> 00:41:02.320
as a part cost allocation was always going to be the

00:41:02.320 --> 00:41:07.530
devil in the details in this policy. Uh There is an

00:41:07.530 --> 00:41:11.800
incentive for uh distributed energy resources to interconnect

00:41:11.809 --> 00:41:16.119
distribution one because of spare capacity on substations

00:41:16.130 --> 00:41:24.059
too, because of a spare uh because of um a view that

00:41:24.059 --> 00:41:27.000
it's quicker to interconnect at distribution rather

00:41:27.000 --> 00:41:31.019
than going through the separate study process at transmission

00:41:31.690 --> 00:41:36.800
Um and then three they they have the real estate already

00:41:36.809 --> 00:41:40.000
locked in real estate is a big issue in terms of resource

00:41:40.000 --> 00:41:42.239
deployment and especially in different areas of the

00:41:42.239 --> 00:41:45.719
state where there's either a lot of transmission congestion

00:41:45.730 --> 00:41:49.619
or uh there's just not room to build a big power plant

00:41:49.619 --> 00:41:51.889
and that's where these batteries become very useful

00:41:51.900 --> 00:41:54.510
and it's in the state's interest of trying to make

00:41:54.519 --> 00:41:57.599
to make it as easy as possible for these resources

00:41:57.599 --> 00:42:00.420
to come in at the locations that they're applying for

00:42:01.219 --> 00:42:05.679
And so um the good news is is that we do not

00:42:05.679 --> 00:42:08.099
believe the standardized interconnection process for

00:42:08.099 --> 00:42:11.409
the major parts of the competitive areas of market

00:42:11.420 --> 00:42:15.519
are gonna be a problem. But on cost allocation batteries

00:42:15.519 --> 00:42:19.070
need certainty in what they're gonna pay in terms of

00:42:19.070 --> 00:42:24.139
interconnection. And there's a the harm the policies

00:42:24.139 --> 00:42:27.309
between transmission level, interconnection and distribution

00:42:27.309 --> 00:42:31.880
level are not harmonized at distribution. They do not

00:42:31.880 --> 00:42:37.489
have to pay uh construction interconnection costs that

00:42:37.500 --> 00:42:41.719
uh that interconnect them into the system and that

00:42:41.719 --> 00:42:47.300
was based on a PUC rule in 2012 that designated

00:42:47.300 --> 00:42:51.489
them a pass through resource, which means they're only

00:42:51.500 --> 00:42:54.860
charging and discharging. So they never actually produced

00:42:54.860 --> 00:42:57.400
the power that they are bringing onto the system. So

00:42:57.400 --> 00:43:01.610
they didn't want them to be penalized by these um pass

00:43:01.610 --> 00:43:05.179
through charges because they're always charging at

00:43:05.179 --> 00:43:07.670
some point and the electrons are always coming through

00:43:07.670 --> 00:43:10.110
So they would be penalized as a basic function of their

00:43:10.110 --> 00:43:13.909
technology and I maybe uh explaining this incorrectly

00:43:13.909 --> 00:43:17.670
but you kind of get the gist at distribution, there

00:43:17.670 --> 00:43:21.409
is no such allowance. And in order for these resources

00:43:21.409 --> 00:43:24.630
to come on in an expeditious way we need to provide

00:43:24.630 --> 00:43:28.780
them certainty. So there's a public interest in uh

00:43:28.789 --> 00:43:31.340
in discussing a rulemaking that would provide them

00:43:31.349 --> 00:43:36.920
that certainty. Now for your information, there are

00:43:36.920 --> 00:43:39.840
two separate kinds of costs that they are subject to

00:43:39.849 --> 00:43:44.980
uh the c i a c costs, which is basically the facility

00:43:44.980 --> 00:43:48.650
cost to build the facilities necessary to bring their

00:43:48.650 --> 00:43:52.789
power to market. Ok. So, to upgrade the substation

00:43:52.800 --> 00:43:56.179
necessary to bring them on and then there's the monthly

00:43:56.179 --> 00:43:59.429
distribution charge that they would be subject to and

00:43:59.429 --> 00:44:04.110
that's on an ongoing basis right now. Um

00:44:06.190 --> 00:44:11.820
there the negotiations are stalled. There is a pathway

00:44:11.820 --> 00:44:15.840
to try to put a square peg in a round hole by

00:44:15.849 --> 00:44:20.130
creating a parallel between the way industrial consumers

00:44:20.139 --> 00:44:23.219
interconnect at distribution, which sometimes happens

00:44:23.849 --> 00:44:27.809
and then bridge themselves to transmission level because

00:44:27.820 --> 00:44:31.260
under that system, with certain utilities and I'll

00:44:31.269 --> 00:44:36.289
name encore as one uh industrial consumers can pay

00:44:36.289 --> 00:44:38.699
for the upgrades that they need. They can essentially

00:44:38.699 --> 00:44:42.550
build their own substation and incur all those costs

00:44:43.280 --> 00:44:47.190
and they'll do that in order to interconnected distribution

00:44:47.199 --> 00:44:51.570
bridge themselves to transmission. And the trade off

00:44:51.570 --> 00:44:56.409
is is that they basically buy their way out of a lot

00:44:56.420 --> 00:45:00.599
of the uh maintenance and operation level, residual

00:45:00.599 --> 00:45:04.980
costs over time on a monthly basis. They are still

00:45:04.980 --> 00:45:10.059
subject to an incremental mm no charge on a monthly

00:45:10.059 --> 00:45:14.860
basis. But it is, it is very dependable. It doesn't

00:45:14.860 --> 00:45:19.559
fluctuate. And so it's that certainty that provides

00:45:19.559 --> 00:45:21.929
them a benefit and that's why they pay for all those

00:45:21.940 --> 00:45:23.769
upfront upfront costs.

00:45:25.289 --> 00:45:30.960
So, um, what I am proposing right now is that all this

00:45:30.960 --> 00:45:34.480
is a lot to take in at this meeting. But I would

00:45:34.489 --> 00:45:37.929
like for the commission to discuss their thoughts about

00:45:37.940 --> 00:45:42.280
a potential compromise uh in the vein of following

00:45:42.280 --> 00:45:47.150
the industrial uh distributed interconnect the distributed

00:45:47.159 --> 00:45:51.300
interconnected industrial consumer template and then

00:45:51.309 --> 00:45:57.699
um, feasibly scheduling a rulemaking based on a memo

00:45:57.710 --> 00:46:02.380
that Commissioner Glotfelty and I may file before the

00:46:02.380 --> 00:46:06.690
next october 6th open meeting, which would outline

00:46:06.699 --> 00:46:11.170
the parameters of where we believe compromise could

00:46:11.170 --> 00:46:16.610
be reached. And uh, that would allow stakeholders including

00:46:16.610 --> 00:46:19.090
the non opt in entities which currently have not been

00:46:19.090 --> 00:46:23.099
involved in the negotiations, but they are, they would

00:46:23.099 --> 00:46:26.949
be considered under the policy to become involved in

00:46:26.949 --> 00:46:33.340
those negotiations um, at a high level as we move forward

00:46:33.340 --> 00:46:38.619
on this. In my opinion, there is no circumstances as

00:46:38.619 --> 00:46:43.230
a part of this review or rulemaking where distribution

00:46:43.230 --> 00:46:47.619
level customers should bear the cost burden of interconnection

00:46:47.630 --> 00:46:52.119
of batteries at distribution. What we are considering

00:46:52.119 --> 00:46:55.719
as a part of this policy is how to allocate costs either

00:46:55.719 --> 00:47:00.070
to the battery themselves, to build the necessary infrastructure

00:47:00.070 --> 00:47:04.750
to get themselves on and on an ongoing basis, potentially

00:47:04.750 --> 00:47:09.769
how to uplift future costs, uh, or share future costs

00:47:09.780 --> 00:47:13.599
at the transmission level, which is what benefits the

00:47:13.610 --> 00:47:18.920
ERCOT system and provides a system wide benefit. And

00:47:18.920 --> 00:47:24.469
so, uh, to put concerns at ease about um, encumbering

00:47:24.480 --> 00:47:27.420
distribution level consumers of which there's a finite

00:47:27.420 --> 00:47:29.889
pool, it's not the entire state of texas, it's not

00:47:29.900 --> 00:47:33.639
ERCOT it's that little distribution system, that is

00:47:33.639 --> 00:47:36.360
not on the table in my view, and I believe Commissioner

00:47:36.360 --> 00:47:40.429
Glotfelty shares that view. So, um,

00:47:42.000 --> 00:47:45.010
at a high level, that's what we're considering, I would

00:47:45.019 --> 00:47:50.559
also file uh if final agreement is reached on a template

00:47:50.570 --> 00:47:53.610
interconnection agreement, I would file that as a part

00:47:53.619 --> 00:47:58.679
of the pre october 6th open meeting memo for your consideration

00:47:58.679 --> 00:48:02.099
so that everybody can then view this and debate it

00:48:02.110 --> 00:48:05.820
and discuss it and uh find whether it's in the public

00:48:05.820 --> 00:48:10.630
interest that this should move forward and then thirdly

00:48:10.639 --> 00:48:17.159
um address ERCOT position on how they would split the

00:48:17.159 --> 00:48:21.900
baby, so to speak on dedicated fears for these D E

00:48:21.900 --> 00:48:27.260
S R s at uh that should participate in ancillary services

00:48:27.269 --> 00:48:30.710
and how they would manage that as a part of emergency

00:48:30.710 --> 00:48:33.760
planning and then that framework could be discussed

00:48:33.760 --> 00:48:37.260
by us and potentially contemplated in a rulemaking

00:48:37.269 --> 00:48:42.090
at some juncture, depending on staff's bandwidth and

00:48:42.090 --> 00:48:45.969
their ability to to process it with that. I know Commissioner

00:48:45.969 --> 00:48:48.869
Glotfelty has thoughts and I'm sorry, that was so complicated

00:48:48.869 --> 00:48:53.480
but welcome to my life for the last, Can you repeat

00:48:53.480 --> 00:49:04.139
point # two. So yeah, so um listen, will has done a

00:49:04.139 --> 00:49:09.360
great job managing this process. Um stakeholders have

00:49:09.360 --> 00:49:13.269
done a great job coming in here and being open to discussion

00:49:13.269 --> 00:49:17.449
on not only uh the value of distributed resources and

00:49:17.449 --> 00:49:22.639
batteries at distribution voltage, um uh their value

00:49:22.639 --> 00:49:25.550
to the entirety of the system and the and the value

00:49:25.550 --> 00:49:29.070
to consumers across the system. They have, they've

00:49:29.079 --> 00:49:31.880
negotiated in good faith from their positions, I think

00:49:31.889 --> 00:49:35.780
um I think the standard interconnect agreement is moving

00:49:35.789 --> 00:49:40.000
um along, I mean it's gotten a lot further with the

00:49:40.010 --> 00:49:42.760
industry negotiating than they would have if we had

00:49:42.760 --> 00:49:45.860
to make a decision on our own, initially in a rulemaking

00:49:45.869 --> 00:49:49.929
so having them work that and then we put this into

00:49:49.929 --> 00:49:54.190
a rulemaking process for others to have views on, I

00:49:54.190 --> 00:49:57.909
think we've shaved months and months off that time

00:49:57.909 --> 00:50:00.969
frame, so I think that's that's very valuable. Um I

00:50:00.969 --> 00:50:03.059
think archives gonna come back with the feeder issue

00:50:03.059 --> 00:50:08.059
and the feeder issue should not be driven by what we've

00:50:08.059 --> 00:50:12.480
heard is um distributed resources cannot play an ancillary

00:50:12.480 --> 00:50:16.659
services if they are required to have a a dedicated

00:50:16.659 --> 00:50:20.099
feeder and we and they have to have a dedicated feeder

00:50:20.110 --> 00:50:22.530
because it's in ERCOT rules. Well, I don't want the

00:50:22.539 --> 00:50:26.400
ERCOT rules issue to dictate that. I want the reliability

00:50:26.400 --> 00:50:31.119
issue to dictate that so, or you can change their rules

00:50:31.130 --> 00:50:33.820
if they think there is a solution on the reliability

00:50:33.820 --> 00:50:37.349
issue. I'm just, I'm just saying that it just shouldn't

00:50:37.349 --> 00:50:40.329
be a language, it's in ERCOT protocols, therefore,

00:50:40.340 --> 00:50:42.480
that's what we have to do. We've got to look at the

00:50:42.480 --> 00:50:45.500
reliability component behind it. The cost allocation

00:50:45.500 --> 00:50:48.530
issues, I would say will um you know, has laid out

00:50:48.539 --> 00:50:52.969
what I believe is is a a plan for us to have

00:50:52.969 --> 00:50:56.239
some final discussions on these things. Um I think

00:50:56.239 --> 00:51:00.760
that um we need resources, we need resources and distribution

00:51:00.760 --> 00:51:02.920
and transmission and we're gonna get them whether we

00:51:02.920 --> 00:51:05.139
want them or not. But what we're trying to do is we're

00:51:05.139 --> 00:51:08.989
trying to give certainty to the distribution companies

00:51:09.000 --> 00:51:12.079
and their and their distribution customers and were

00:51:12.090 --> 00:51:15.320
likewise trying to give certainty to those who are

00:51:15.320 --> 00:51:18.610
investing private capital into our system on what they're

00:51:18.610 --> 00:51:22.909
going to be paying today and in the future. And both

00:51:22.909 --> 00:51:26.179
of them are critically important. Um as we have at

00:51:26.179 --> 00:51:28.869
the, at the transmission level, we have our ERCOT who

00:51:28.869 --> 00:51:32.110
is uh ensuring that we have open and equal access,

00:51:32.119 --> 00:51:36.590
we want open and equal access to the transmission and

00:51:36.590 --> 00:51:40.559
the distribution system for these resources in this

00:51:40.559 --> 00:51:44.480
system. So moving this ball forward is really a good

00:51:44.480 --> 00:51:47.119
thing and and we're gonna get into this obviously more

00:51:47.119 --> 00:51:49.429
here in the in the future with with additional memos

00:51:49.429 --> 00:51:53.559
but uh I think uh will in the industry have done a

00:51:53.559 --> 00:51:58.400
really good job and and mr chairman before other thoughts

00:51:58.739 --> 00:52:01.079
the way this all fits together and the framework that

00:52:01.079 --> 00:52:04.409
we're trying to drive toward for reliability and maximizing

00:52:04.420 --> 00:52:07.059
the amount of the number of the diversity of resources

00:52:07.059 --> 00:52:11.530
to help support system reliability in ERCOT is if we

00:52:11.530 --> 00:52:15.610
blaze a trail to this point that allows sub 10 Megawatt

00:52:15.619 --> 00:52:20.260
D E S Rs. Two interconnected distribution. That same

00:52:20.269 --> 00:52:25.480
framework will be uh will be a building block that

00:52:25.489 --> 00:52:29.409
uh the aggregated distributed energy resources of less

00:52:29.409 --> 00:52:32.880
than a Megawatt will then be able to follow along behind

00:52:32.889 --> 00:52:37.219
eventually you do because eventually that will scale

00:52:37.230 --> 00:52:39.829
and we must be prepared for those type of resources

00:52:39.829 --> 00:52:44.329
and the benefit that they may be able to provide. And

00:52:44.340 --> 00:52:47.929
as always reliability is paramount. And so while the

00:52:47.929 --> 00:52:50.659
interconnection at the distribution level now for smaller

00:52:50.670 --> 00:52:54.050
Megawatt may be shorter and quicker without the studies

00:52:54.059 --> 00:52:58.650
as they scale that make it more complicated because

00:52:58.650 --> 00:53:02.059
it's a bigger, bigger segment of our generation and

00:53:02.059 --> 00:53:04.719
has a bigger impact. And I know, I know y'all were

00:53:04.719 --> 00:53:10.519
always keeping reliability as our North star. I commend

00:53:10.519 --> 00:53:13.039
you all on the progress made so far. Thank you for

00:53:13.039 --> 00:53:17.840
the work. Uh, I'm sure everybody has thoughts, but

00:53:17.840 --> 00:53:20.780
I would ask as we go through procedurally as we go

00:53:20.780 --> 00:53:25.579
through this, uh, tremendous mental progress. I would

00:53:25.579 --> 00:53:30.019
uh, ask that when you start on october 6th or whatever

00:53:30.019 --> 00:53:32.860
to start laying out the different pieces, a couple

00:53:32.860 --> 00:53:36.360
of things, layout. Uh, and if, if y'all can get a,

00:53:37.559 --> 00:53:40.929
an agreement with the initial discussions, that would

00:53:40.929 --> 00:53:44.719
be great. Uh that's only a couple of weeks but that'd

00:53:44.719 --> 00:53:51.219
be fantastic. Uh, also be prepared to discuss the ideas

00:53:51.219 --> 00:53:54.500
or concepts or frameworks that were discarded and not

00:53:54.500 --> 00:53:57.909
considered and why? Why so batteries pay nothing. It's

00:53:57.909 --> 00:53:59.909
easy. Right. Well,

00:54:01.530 --> 00:54:03.949
That's where that's the two

00:54:06.320 --> 00:54:12.900
but, and then also let's make the memo and any initial

00:54:12.900 --> 00:54:16.510
agreement on the six or whenever the right time is

00:54:16.519 --> 00:54:20.679
let's mark that as the starting point of the broader

00:54:20.679 --> 00:54:25.389
public discussion. Uh and, and I mean I would with

00:54:25.389 --> 00:54:28.800
that, I'll defer to staff and their bandwidth on whether

00:54:28.800 --> 00:54:32.090
it should start as a project and then ramp towards

00:54:32.090 --> 00:54:35.449
the rule, making, you know, certain mechanisms start

00:54:36.280 --> 00:54:39.699
So, so with that MR chairman to comply with your intent

00:54:39.710 --> 00:54:44.019
uh we would uh file essentially a framework that would

00:54:44.019 --> 00:54:47.679
serve as the building blocks of a straw man that could

00:54:47.679 --> 00:54:51.730
be harnessed by staff to set those negotiating negotiating

00:54:51.739 --> 00:54:56.630
parameters for negotiation. Um that that all groups

00:54:56.639 --> 00:54:59.579
could focus on and and move forward with hopefully

00:54:59.579 --> 00:55:01.780
again shaving off that time and providing direction

00:55:01.780 --> 00:55:05.099
of staff and helping them. I think your point is that

00:55:05.110 --> 00:55:07.230
this is not the end of it, that we're just gonna take

00:55:07.230 --> 00:55:11.889
the negotiations to rule and this is, you know, this

00:55:11.889 --> 00:55:15.289
is industry coming together, um coming up with a proposed

00:55:15.289 --> 00:55:19.659
rule, we look favorably on it will, and I do, um but

00:55:19.670 --> 00:55:21.889
everybody has a right to look at that and give us their

00:55:21.889 --> 00:55:26.000
input and have those discussions. Absolutely, and very

00:55:26.000 --> 00:55:30.440
much appreciate that you can move quicker with fewer

00:55:30.440 --> 00:55:32.630
people in the room and get more, get more progress

00:55:32.630 --> 00:55:39.309
done. And this is the this isn't the end, this is the

00:55:39.309 --> 00:55:43.469
end of the beginning. Great progress so far. But yes

00:55:43.469 --> 00:55:47.409
we want to make sure there is robust and as much public

00:55:47.420 --> 00:55:50.909
comment and involvement and as much time needed to

00:55:50.920 --> 00:55:55.099
accomplish that accommodate it uh and all I know, as

00:55:55.099 --> 00:55:59.309
always, y'all will keep reliability as our North Star

00:55:59.320 --> 00:56:02.949
and and thanks sir and I and I know mr Carlos, your

00:56:02.960 --> 00:56:05.449
experience with OPUC and experience on transmission

00:56:05.449 --> 00:56:07.940
and distribution planning, it's going to be invaluable

00:56:07.940 --> 00:56:11.500
in this. I will also add another caveat to the policy

00:56:11.500 --> 00:56:14.409
framework. The non option entities are incredibly important

00:56:14.409 --> 00:56:16.860
to the state of texas control vast swaths in terms

00:56:16.860 --> 00:56:20.079
of the regulated transmission and distribution level

00:56:20.090 --> 00:56:24.570
uh utility system. Um They will be involved in this

00:56:24.579 --> 00:56:28.329
I am I have no intent of forcing them into this and

00:56:28.329 --> 00:56:32.630
nobody I think it's gonna force them to do anything

00:56:32.639 --> 00:56:37.050
However if we create a framework that uh they could

00:56:37.050 --> 00:56:40.889
avail themselves of spreading costs from their distribution

00:56:40.889 --> 00:56:45.340
system to transmission in my view. One high level policy

00:56:45.340 --> 00:56:49.309
principle that that I will use is that if you do that

00:56:49.320 --> 00:56:53.059
then those costs would be subject to accomplish a great

00:56:53.059 --> 00:56:57.289
review um by the commission and so that's that's a

00:56:57.289 --> 00:57:02.719
trade off to prevent unintended consequences in a dramatic

00:57:02.719 --> 00:57:07.590
change in terms of who pays and for what and who benefits

00:57:07.599 --> 00:57:11.030
uh in the system. And so commissioner Cobos, do you have any

00:57:11.030 --> 00:57:14.940
thoughts? I know you, no I appreciate it, I appreciate

00:57:14.940 --> 00:57:16.940
the hard work that you and Commissioner Glotfelty have

00:57:16.940 --> 00:57:21.309
put in into this effort. It is a monumental task. Um

00:57:21.320 --> 00:57:24.260
Remember our discussions this past fall on adding virtual

00:57:24.260 --> 00:57:27.809
power plants to the blueprint as phase one action um

00:57:27.809 --> 00:57:30.289
And and the D. G. Work that we wanted to look at

00:57:30.289 --> 00:57:32.179
and so I really do commend you on all the hard work

00:57:32.179 --> 00:57:35.099
I know you've had a lot of task force meetings and

00:57:35.409 --> 00:57:38.710
um it's good to see all this work coming to some, you

00:57:38.710 --> 00:57:43.030
know, actual concrete next steps to get something done

00:57:43.030 --> 00:57:47.170
within our cod and in the snowy space, you know, I

00:57:47.170 --> 00:57:49.960
very much look forward to to your memo that lays out

00:57:49.960 --> 00:57:52.969
the framework based on the agreement thus far and be

00:57:52.969 --> 00:57:55.289
able to see what what has been agreed to and be able

00:57:55.289 --> 00:57:57.480
to provide feedback at that standpoint. I think cost

00:57:57.480 --> 00:58:01.679
allocation is a tremendously important issue um as

00:58:01.679 --> 00:58:03.829
you know, the retail residential consumers bear most

00:58:03.829 --> 00:58:07.880
of that cost and but also ensuring that we open the

00:58:07.880 --> 00:58:10.570
gate for new technologies into ERCOT that can provide

00:58:10.570 --> 00:58:13.469
reliability benefits, but at the same time ensuring

00:58:13.469 --> 00:58:15.719
that we stay on the track for ultimate reliability

00:58:15.719 --> 00:58:20.420
as chairman Lake has noted, uh you know, not having

00:58:20.420 --> 00:58:22.940
been as intricately involved as you have, I I very

00:58:22.940 --> 00:58:25.760
much want to see that the framework to be able to provide

00:58:25.760 --> 00:58:29.239
more feedback um and those will be the issues that

00:58:29.250 --> 00:58:34.480
that I'll be looking at um based on your memo and it

00:58:34.489 --> 00:58:37.119
seems like the agreement that you've come up with just

00:58:37.119 --> 00:58:40.860
to make sure um is based on sort of a similar template

00:58:40.869 --> 00:58:43.440
that you laid out for the industrials in which the

00:58:43.440 --> 00:58:48.000
battery storage folks will pay for some of the um facility

00:58:48.000 --> 00:58:51.489
upgrades and then there'll be some allocation is that

00:58:51.500 --> 00:58:54.269
is that if there's an agreement, there is an agreement

00:58:54.280 --> 00:58:57.670
in possible principle, I don't want to tie anybody

00:58:57.670 --> 00:59:02.210
down to say that there's agreement, but the parties

00:59:02.219 --> 00:59:08.380
have said that in terms of the parameters of this,

00:59:08.389 --> 00:59:11.139
there potentially could be agreement to follow the

00:59:11.139 --> 00:59:15.719
path of the industrials interconnecting at distribution

00:59:15.730 --> 00:59:20.780
and so uh, we're gonna try that. Okay, now that's helpful

00:59:20.780 --> 00:59:23.659
and I was trying to identify kind of what that template

00:59:23.659 --> 00:59:26.510
would look like and it sounded like similar to that

00:59:26.510 --> 00:59:30.409
is correct. I fully support Commissioner Cobos most

00:59:30.409 --> 00:59:33.099
important point of putting all of that in writing you

00:59:33.099 --> 00:59:35.570
can, we're going to do it and we'll do it better than

00:59:35.570 --> 00:59:40.420
that. But there's a lot there. Um, uh Commissioner

00:59:40.429 --> 00:59:44.889
Commissioner Jackson, this is uh, this is what we've

00:59:44.889 --> 00:59:47.789
kind of been, there's so many new technologies as you

00:59:47.789 --> 00:59:50.250
and I have discussed and as you're taking the approach

00:59:50.250 --> 00:59:54.550
of energy efficiency, this is trying to build a comprehensive

00:59:54.550 --> 00:59:59.219
grid where you have a firm grasp of the demand side

00:59:59.219 --> 01:00:02.050
and the supply side at both the trans mission and now

01:00:02.050 --> 01:00:05.780
the distribution level, which is going from the interstate

01:00:05.800 --> 01:00:08.570
to the state farm road system and trying to account

01:00:08.570 --> 01:00:11.119
for everything that we can bring to bear on the system

01:00:11.130 --> 01:00:14.130
for the purposes of reliability. So I do believe once

01:00:14.130 --> 01:00:18.210
you make headway on energy efficiency, um, all of this

01:00:18.210 --> 01:00:20.409
is gonna start to work hand in glove together and it's

01:00:20.409 --> 01:00:23.869
for a more technologically advanced grid, What's important

01:00:23.869 --> 01:00:26.730
to have and be able to utilize all the tools in the

01:00:26.730 --> 01:00:29.409
toolbox and I think in texas that's one of the things

01:00:29.409 --> 01:00:33.289
that we have been um you know, stand out and successful

01:00:33.289 --> 01:00:37.110
in being able to do and you know, I like being first

01:00:37.119 --> 01:00:39.829
I like being jumping out there and doing things that

01:00:41.190 --> 01:00:43.949
other people aren't considering and and getting it

01:00:43.949 --> 01:00:46.650
right and then have everybody else come and ask us

01:00:46.650 --> 01:00:50.449
how we did it. So I have no doubt our resident engineer

01:00:50.449 --> 01:00:53.860
will be valuable contributed to the entire process

01:00:54.599 --> 01:00:56.530
Great, all right, thank you all again for the hard

01:00:56.530 --> 01:00:56.820
work.

01:00:58.719 --> 01:01:06.210
(item:34:53401) I believe this brings us to item 34 regarding electric

01:01:06.219 --> 01:01:12.670
weather preparedness standards. We've got a memo staff

01:01:12.670 --> 01:01:17.510
filed with a proposal for adoption that we will discuss

01:01:17.510 --> 01:01:22.849
but not take up for a vote this meeting. Uh this is

01:01:22.849 --> 01:01:26.030
obviously a big topic, incredibly important topic.

01:01:26.039 --> 01:01:30.659
And so we want to be very deliberate about our making

01:01:30.659 --> 01:01:34.099
sure that all of our stakeholders have adequate time

01:01:34.099 --> 01:01:38.239
for input discussion and our commissioners have sufficient

01:01:38.239 --> 01:01:42.889
time for consideration of all elements of this, especially

01:01:42.889 --> 01:01:47.090
the public comment components. So while we will not

01:01:47.090 --> 01:01:51.639
be taking any action on this item today, I want to

01:01:51.650 --> 01:01:55.489
open up the floor for discussion and of course questions

01:01:55.489 --> 01:01:57.510
from our staff.

01:02:00.000 --> 01:02:04.519
Uh well, thank you mr Chairman for laying it out and

01:02:04.519 --> 01:02:07.920
opening it up. Um I want to commend staff. Uh this

01:02:07.920 --> 01:02:13.539
is an extremely complicated uh, policy that we are

01:02:13.550 --> 01:02:17.190
attempting to implement regarding a weatherization

01:02:17.190 --> 01:02:21.889
standard uh, that would apply to both resources and

01:02:21.889 --> 01:02:24.510
the transmission and distribution system within the

01:02:24.510 --> 01:02:33.460
ERCOT ol statewide. Um My I I do have one concern regarding

01:02:33.469 --> 01:02:37.900
the inputs chosen to inform the 95th percentile standard in

01:02:37.900 --> 01:02:42.769
this rule. Um although ERCOT historical weather study

01:02:42.780 --> 01:02:47.150
includes the calculation of the minimum average windchill

01:02:47.159 --> 01:02:51.820
in each weather zone. That windchill calculation uh

01:02:51.829 --> 01:02:55.710
was not used in the final metric used to determine

01:02:55.719 --> 01:03:01.170
the 95th percentile minimum average 72 hour temperature cold

01:03:01.170 --> 01:03:05.369
weather standard for generators. Um, so I believe that

01:03:05.369 --> 01:03:08.739
failing to factor in wind chill into that average temperature

01:03:08.739 --> 01:03:11.710
we are failing to capture the true risk to our generation

01:03:11.710 --> 01:03:15.670
resources uh, in a cold weather event. This had come

01:03:15.670 --> 01:03:18.650
up in the House State Affairs hearing uh, interest

01:03:18.650 --> 01:03:22.809
was expressed from legislators. Uh, it is, it was certainly

01:03:22.809 --> 01:03:27.050
reasonable considering the uh, the effects of winter

01:03:27.050 --> 01:03:32.239
storm Uri. Um There is, there is an ambient temperature

01:03:32.250 --> 01:03:36.489
standard, but again, we have it on the last page of

01:03:36.489 --> 01:03:39.880
the rule where the minimum average windshield and each

01:03:39.880 --> 01:03:43.190
weather zone would be taken into account by the study

01:03:43.199 --> 01:03:47.070
but it is not finally used in the computation of the

01:03:47.070 --> 01:03:50.969
95th%ile, which at the end of the day is the, that's

01:03:50.969 --> 01:03:55.250
the standard. So, uh, I believe we need wind chill

01:03:55.260 --> 01:04:01.539
in there. Okay, third point, so I have some questions

01:04:01.539 --> 01:04:06.019
just based on Commissioner McAdams um, statements.

01:04:06.030 --> 01:04:12.190
So Barksdale do the NERC draft recommendations on weatherization

01:04:12.190 --> 01:04:15.940
include Windchill, Good afternoon Chairman and commissioners

01:04:15.940 --> 01:04:18.369
this is Barksdale english on behalf of commission staff

01:04:19.280 --> 01:04:24.429
Um, so the, what we know from the Newark drafting process

01:04:24.440 --> 01:04:28.570
is that earlier in the spring they released a proposed

01:04:28.570 --> 01:04:34.489
rule that did consider Windchill uh, in their calculations

01:04:34.500 --> 01:04:38.929
um, recently this week they released another, well

01:04:38.929 --> 01:04:40.769
they didn't release if there was a discussion about

01:04:40.769 --> 01:04:44.550
that draft rule and Windchill continues to be included

01:04:44.550 --> 01:04:48.639
in those discussions. Our latest understanding is that

01:04:48.639 --> 01:04:53.360
we expect a new written draft from Newark sometime

01:04:53.360 --> 01:05:00.389
in november. Do you feel that some of the Phase two

01:05:00.400 --> 01:05:05.170
Well, I guess Phase One and phase two and or both because

01:05:05.170 --> 01:05:10.710
we are, we have Phase one. Right, right. Phase two

01:05:10.710 --> 01:05:13.679
is kind of a statement around here. Oh yes, yes. Um

01:05:13.690 --> 01:05:18.050
right, sorry, Phase Phase One weatherization and or

01:05:18.050 --> 01:05:22.650
Phase Two weatherization preparation standards um would

01:05:23.400 --> 01:05:25.440
address Windchill and if so how

01:05:27.340 --> 01:05:31.039
I'm sorry, I think you're asking if the proposal that

01:05:31.039 --> 01:05:35.750
we have before you right now includes Windchill as

01:05:35.750 --> 01:05:38.110
part of the standard, Is that your question? No, I

01:05:38.110 --> 01:05:40.599
mean what I'm asking is are some of the measures that

01:05:40.610 --> 01:05:44.329
would be required to be taken as a result of the Phase

01:05:44.329 --> 01:05:48.239
one and Phase two um, standards with some of those

01:05:48.239 --> 01:05:52.159
specific measures help mitigate against Windchill,

01:05:52.170 --> 01:05:54.980
thank you for the clarification. So yes, we do staff

01:05:54.980 --> 01:05:58.929
does believe that the specific measures that are enumerated

01:05:58.929 --> 01:06:01.969
in the rule outside of the identification of the ambient

01:06:01.969 --> 01:06:04.739
temperature standard would address the impacts of wind

01:06:04.739 --> 01:06:08.940
chill on generation resource and also a transmission

01:06:08.940 --> 01:06:12.389
substation or switchyard things such as um, you know

01:06:12.389 --> 01:06:15.730
in in style calling enclosures around critical cold

01:06:15.730 --> 01:06:18.780
weather components, insulation, things of that nature

01:06:18.829 --> 01:06:24.889
monitoring the water content inside lines inside the

01:06:24.900 --> 01:06:27.860
power plants. Those things will all help mitigate the

01:06:27.860 --> 01:06:31.840
impact of wind chill on on those resources and facilities

01:06:31.849 --> 01:06:34.949
And I just do want to make sure that it's clear that

01:06:34.949 --> 01:06:38.670
this proposal would impact only those entities inside

01:06:38.670 --> 01:06:41.639
the ERCOT power region, not for the entire state. Okay

01:06:41.650 --> 01:06:45.480
good clarification. So you feel that those specific

01:06:45.480 --> 01:06:48.130
measures like the enclosures and the heat tracing and

01:06:48.130 --> 01:06:50.199
all that would address windshield, I guess what I'm

01:06:50.199 --> 01:06:52.980
trying to figure out here is, you know, if what, what

01:06:52.980 --> 01:06:55.519
more are we asking for by including windshield? Like

01:06:55.519 --> 01:06:58.250
just the lower temperature additional measures, you

01:06:58.250 --> 01:07:01.260
know, kind of scoping that out a little bit more given

01:07:01.260 --> 01:07:05.519
Commissioner McAdams valid concerns. So my understanding

01:07:05.519 --> 01:07:09.829
is that if we were to include windchill as one of the

01:07:09.840 --> 01:07:12.579
parameters that goes into this temperature standard

01:07:12.610 --> 01:07:15.539
it would serve as a ratcheting down effect during the

01:07:15.539 --> 01:07:18.519
winter seasons. So if you can think of it a little

01:07:18.519 --> 01:07:21.309
bit like a math equation we've got, you know, the temperature

01:07:21.309 --> 01:07:24.159
set at, you know, value A and then the wind chill is

01:07:24.159 --> 01:07:26.980
set of value B. Then that gets you a new kind of

01:07:26.989 --> 01:07:30.760
nominal temperature standard served to ratchet down

01:07:30.769 --> 01:07:34.280
that, that lower temperature value that we would expect

01:07:34.280 --> 01:07:36.360
resources and facilities to prepare to.

01:07:38.050 --> 01:07:40.260
So is it fair to say in the weather study that are

01:07:40.260 --> 01:07:43.420
caught, worked with climatologists with that you capture

01:07:43.420 --> 01:07:45.599
some extreme weather center is backward looking, right

01:07:45.599 --> 01:07:51.440
So you have to capture 2011 18 The weather study commissioner

01:07:51.440 --> 01:07:55.369
excuse me for interrupting you. Um dates back to they

01:07:55.380 --> 01:07:59.590
look back to data as far back as 1895. And um

01:07:59.599 --> 01:08:02.539
in some of those years it was a single measurement

01:08:02.550 --> 01:08:05.690
in other years, it was daily measurements in another

01:08:05.690 --> 01:08:09.039
years, it was hourly measurements. So the data set

01:08:09.039 --> 01:08:11.980
that ERCOT used to generate this weather studies is

01:08:11.989 --> 01:08:15.110
pretty robust from, from staff's vantage point,

01:08:16.819 --> 01:08:19.630
but I think what I'm trying to assess here is then

01:08:19.640 --> 01:08:21.720
okay if they're looking backwards and getting all those

01:08:21.720 --> 01:08:25.829
years back to the 18 hundreds, it is capturing winter

01:08:25.829 --> 01:08:29.000
storm Yuri acute issues but it may not be capturing

01:08:29.000 --> 01:08:32.329
the full impact of the windchill. Winter storm Uri

01:08:33.979 --> 01:08:39.319
in ERCOT weather study, they examined minimum, it's

01:08:39.319 --> 01:08:42.829
called the dry bulb temperature So just the actual

01:08:42.840 --> 01:08:46.340
reading of the temperature value without considering

01:08:46.340 --> 01:08:49.970
the moisture in the air or the wind speed. They also

01:08:49.970 --> 01:08:53.310
looked at the wet bulb temperature which is the dry

01:08:53.310 --> 01:08:56.529
bulb temperature impacted by moisture in the air. And

01:08:56.529 --> 01:08:59.979
they also considered wind speed. So all of those values

01:08:59.979 --> 01:09:03.739
are included in our costs weather study that was finally

01:09:03.739 --> 01:09:07.039
published in july and I don't mean finally published

01:09:07.039 --> 01:09:09.020
like it was late. It's just that, that was when the

01:09:09.020 --> 01:09:17.229
last version was filed. And um, staff chose to pursue

01:09:17.239 --> 01:09:20.399
a temperature standard that considers only the dry

01:09:20.399 --> 01:09:26.979
bulb temperature as a balancing point between pushing

01:09:26.979 --> 01:09:31.649
our industry. We think pretty hard to get ready for

01:09:31.649 --> 01:09:35.270
some pretty significant events both in the summer and

01:09:35.270 --> 01:09:39.960
in the winter while also keeping an eye on the overall

01:09:39.970 --> 01:09:47.029
age and economic um efficiency of some of the older

01:09:47.029 --> 01:09:50.760
generating units in the power region because we did

01:09:50.760 --> 01:09:53.880
not want to go so far as to potentially force early

01:09:53.880 --> 01:09:57.859
unit retirement and cause other kinds of capacity issues

01:09:57.869 --> 01:10:00.560
for, you know, in the near term future.

01:10:03.529 --> 01:10:09.960
So that leads to base to market redesign um, not today

01:10:09.960 --> 01:10:14.699
but, but so that's the balance staff. Yes sir. Okay

01:10:14.710 --> 01:10:19.840
fair enough. And and I I support that support reviewing

01:10:19.840 --> 01:10:23.470
that balance but look, spark spreads in the ERCOT power

01:10:23.470 --> 01:10:27.149
region are 100% more at this time than they were last

01:10:27.149 --> 01:10:32.199
year. Those units have the money to invest in their

01:10:32.199 --> 01:10:36.810
systems today and um, they could make that enhancement

01:10:36.819 --> 01:10:40.619
Uh, it's a value judgment on their part and I believe

01:10:40.619 --> 01:10:43.770
the system should impose a standard ultimately look

01:10:43.779 --> 01:10:47.000
in our own rule. We ask that the minimum average windshield

01:10:47.000 --> 01:10:49.920
in each weather zone be accounted for in the weather

01:10:49.920 --> 01:10:56.239
study, What's then included in the 95th percentile include

01:10:56.239 --> 01:11:00.869
the true temperature. Um, and if if it has a ratcheting

01:11:00.869 --> 01:11:04.890
effect and I understand that it may be litigated at

01:11:04.890 --> 01:11:08.090
Nerc, but good luck with that. I mean it's the true

01:11:08.090 --> 01:11:10.579
temperature. If Nerc is asking you to harden to a

01:11:10.579 --> 01:11:13.210
standard that they believe you're going to achieve

01:11:13.220 --> 01:11:15.729
then you need to harden to that standard. It's a part

01:11:15.729 --> 01:11:18.229
of your cost of doing business in the state of texas

01:11:19.779 --> 01:11:23.220
and we have recourse if you seek to retire your units

01:11:25.310 --> 01:11:27.560
So I, I believe we need to look hard at this.

01:11:29.229 --> 01:11:33.970
That that's what we're doing the discussion, not taking

01:11:33.970 --> 01:11:40.250
action today, but oh, there may be certain costs able

01:11:40.250 --> 01:11:43.609
to be included in operations of the company, but things

01:11:43.609 --> 01:11:47.390
like an R M R R a death knell on investment, we

01:11:47.390 --> 01:11:50.920
don't ever want to ask a company or forced use force

01:11:50.920 --> 01:11:54.529
of law to keep a company losing a private sector company

01:11:54.529 --> 01:11:57.699
losing money. And I didn't say I just, that's what

01:11:57.710 --> 01:12:00.800
people here a lot. And so I want to, I don't think

01:12:00.800 --> 01:12:04.529
anybody's intention is to force companies to lose money

01:12:04.989 --> 01:12:10.380
operating in texas if I may Commissioner McAdams the

01:12:10.380 --> 01:12:15.909
reason why we included are asking or cut to study things

01:12:15.920 --> 01:12:19.979
beyond just that dry bulb temperature is precisely

01:12:19.979 --> 01:12:25.539
to TF conversations like this so that you all stakeholders

01:12:25.550 --> 01:12:29.739
staff can provide you with input and insight as to

01:12:29.750 --> 01:12:34.789
what the best standards should be going forward Today

01:12:34.800 --> 01:12:37.939
If you, you know, or on the 29th, if you should choose

01:12:37.939 --> 01:12:41.159
to take this rule up, you could approve this rule as

01:12:41.159 --> 01:12:44.770
drafted and then the next time around we would have

01:12:44.770 --> 01:12:47.699
more information about how windchill is impacting our

01:12:47.699 --> 01:12:51.470
generation resources in particular and continue to

01:12:51.470 --> 01:12:53.949
consider that question. I'm not advocating one way

01:12:53.949 --> 01:12:58.399
or the other, I'm just trying to um well, you know

01:12:58.409 --> 01:13:00.359
we wanted to make sure that you have the information

01:13:00.359 --> 01:13:02.180
available. Steps done an excellent job, you've done

01:13:02.180 --> 01:13:04.770
an excellent job on this. I mean you try to thread

01:13:04.770 --> 01:13:06.640
a needle and I'm just trying to tell you in my view

01:13:06.640 --> 01:13:10.119
that the needles a certain size and there's five opinions

01:13:10.130 --> 01:13:15.479
but no, I appreciate it, I do appreciate your statements

01:13:15.479 --> 01:13:17.899
and and certainly I do want to echo all your hard work

01:13:17.899 --> 01:13:22.050
on this very robust lengthy role. Um it is tremendously

01:13:22.050 --> 01:13:26.590
important um as we move forward to have weatherization

01:13:26.590 --> 01:13:28.859
standards, not only for the winner and and be more

01:13:28.859 --> 01:13:32.850
comprehensive as you move forward, Phase two and certainly

01:13:32.850 --> 01:13:35.899
hear your concerns um and also for the summer as we

01:13:35.899 --> 01:13:39.239
move forward, um you know, one thing you mentioned

01:13:39.239 --> 01:13:43.840
that I think just now with respect to uh you know,

01:13:43.850 --> 01:13:46.329
approving something and then, you know, a little bit

01:13:46.329 --> 01:13:49.060
down the road, factoring in other factors, I think

01:13:49.069 --> 01:13:52.840
this has to be an evolving situation, um as we face

01:13:52.840 --> 01:13:55.909
more volatile extreme weather and we get more data

01:13:55.920 --> 01:13:59.180
that we continue to look at our preparation standards

01:13:59.180 --> 01:14:01.439
not just you know, we got phase one, Phase two down

01:14:01.439 --> 01:14:04.300
let's continue to gather data, let's continue to be

01:14:04.310 --> 01:14:09.329
um proactive in ensuring that we have a resilient power

01:14:09.329 --> 01:14:12.539
system from generation to transmission distribution

01:14:12.550 --> 01:14:14.909
systems and I recognize the companies need certainty

01:14:14.909 --> 01:14:16.699
and we will have certainty with respect to phase one

01:14:16.699 --> 01:14:20.020
and phase two, but at the same time we must remain

01:14:20.020 --> 01:14:23.890
diligent and make sure that we're looking at um the

01:14:23.890 --> 01:14:28.460
evolving the evolving nature of weather and other data

01:14:28.460 --> 01:14:30.439
points that we may collect in the future. We certainly

01:14:30.439 --> 01:14:32.920
have a lot of really good data points looking back

01:14:32.930 --> 01:14:39.729
to 2011 2018 and 21 even in the summer 2011 2019 this

01:14:39.729 --> 01:14:44.239
summer. So I appreciate that statement and I think

01:14:44.239 --> 01:14:46.079
that's something we gotta do. I think we heard a State

01:14:46.079 --> 01:14:47.789
Affairs Committee hearing that, you know, when you

01:14:47.789 --> 01:14:49.880
look at weatherization, sometimes it could be a living

01:14:49.880 --> 01:14:55.020
document, you know, and continue to build upon what

01:14:55.020 --> 01:14:57.789
we have here at the commission and I would say that

01:14:57.789 --> 01:15:00.939
the rule not only considers it from a weather data

01:15:00.939 --> 01:15:03.489
standpoint, but also from a technology and innovation

01:15:03.489 --> 01:15:09.050
standpoint because we chose language um that requires

01:15:09.050 --> 01:15:12.560
the entities to prepare their resources and facilities

01:15:12.569 --> 01:15:15.630
in a manner that could be reasonably expected to ensure

01:15:15.630 --> 01:15:18.479
sustained operation of those resources and facilities

01:15:18.489 --> 01:15:22.119
as technology becomes more widespread and more available

01:15:22.130 --> 01:15:24.859
it becomes more reasonable to expect those technologies

01:15:24.859 --> 01:15:27.159
to be implemented at the resource level and at the

01:15:27.159 --> 01:15:31.699
facility level. So we would hope to see that the entities

01:15:31.699 --> 01:15:34.930
are continuing to look at those innovations and technologies

01:15:34.930 --> 01:15:36.939
and continue to invest in their plans to make sure

01:15:36.939 --> 01:15:39.310
that they can operate through some of the worst weather

01:15:39.310 --> 01:15:42.779
that we get. I think that's an excellent point because

01:15:42.789 --> 01:15:46.510
we kind of focus on the standard but I think what is

01:15:46.520 --> 01:15:51.489
um you know, really such a great work effort of what

01:15:51.500 --> 01:15:55.840
the staff has done on the weatherization is the process

01:15:55.850 --> 01:15:59.170
which is going to help us kind of moving forward manage

01:15:59.170 --> 01:16:04.060
this risk. And so we've been very prescriptive about

01:16:04.060 --> 01:16:09.979
the the expectation going in to prevent a co weather

01:16:09.979 --> 01:16:15.939
event by going in and and very specifically um outlining

01:16:15.939 --> 01:16:19.479
the things that we feel like now our best practices

01:16:19.489 --> 01:16:24.380
and also um you know, stating it in such a way that

01:16:24.380 --> 01:16:26.630
it's clear that it's something that we expect to be

01:16:26.630 --> 01:16:30.109
done prior to the winter season or prior to this summer

01:16:30.109 --> 01:16:33.670
season and that there's an expectation process throughout

01:16:33.670 --> 01:16:37.949
both of those periods as well as you know, in the unlikely

01:16:37.949 --> 01:16:42.590
event that you did have a weather related event and

01:16:42.590 --> 01:16:44.819
you did have a failure whether it was on the transmission

01:16:44.819 --> 01:16:48.189
side or on the generation side that there would be

01:16:48.189 --> 01:16:53.029
a process um you know, that a qualified professional

01:16:53.029 --> 01:16:56.720
engineer would conduct this root cause analysis of

01:16:56.720 --> 01:16:59.220
the failure and then develop what the corrective action

01:16:59.220 --> 01:17:02.390
would be to address the failures kind of going forward

01:17:02.619 --> 01:17:05.560
and that in and of itself I think will drive some of

01:17:05.560 --> 01:17:08.130
the things that you you're kind of talking about, which

01:17:08.130 --> 01:17:11.300
is okay. Do we need to as a result? Maybe if some

01:17:11.300 --> 01:17:15.100
of these um findings that we have from either what

01:17:15.100 --> 01:17:17.869
the company does internally through its own root cause

01:17:17.869 --> 01:17:22.000
analysis, maybe not necessarily driven by the rule

01:17:22.010 --> 01:17:25.630
but if you in effect get the street, the three strikes

01:17:25.630 --> 01:17:28.670
that you refer to in here and you move forward with

01:17:28.670 --> 01:17:33.039
the more formal process, those type of corrective actions

01:17:33.050 --> 01:17:36.420
will come forward and will be documented. Um There

01:17:36.420 --> 01:17:39.689
was one thing though that I kind of noticed was that

01:17:39.699 --> 01:17:42.250
um in the in the rulemaking and this is really just

01:17:42.250 --> 01:17:45.989
for discussion, but um that there is a requirement

01:17:46.270 --> 01:17:50.539
um for uh the generation entity or the or the tSP to

01:17:50.539 --> 01:17:53.050
submit the engineer's assessment to the commission

01:17:53.060 --> 01:17:57.369
and are caught within 15 days, calendar days of receiving

01:17:57.369 --> 01:18:01.090
the assessment. However, there's no timeframe specified

01:18:01.090 --> 01:18:04.489
as to how long the engineer has to conduct the actual

01:18:04.489 --> 01:18:08.609
root cause analysis and uh of course I understand after

01:18:08.609 --> 01:18:10.520
you know, our further discussions that we're giving

01:18:10.520 --> 01:18:12.939
deference as to what this reasonable timeline would

01:18:12.949 --> 01:18:16.899
be um however, kind of given my background as an engineer

01:18:16.899 --> 01:18:19.819
and also in the manufacturing world, my expectation

01:18:19.819 --> 01:18:22.619
would be that the root cause analysis would be submitted

01:18:22.630 --> 01:18:27.489
expeditiously and is recently uh practical as possible

01:18:27.489 --> 01:18:30.529
And you know, the the whole rationale behind that is

01:18:30.529 --> 01:18:32.800
that you do the root cause analysis as quickly as you

01:18:32.800 --> 01:18:35.779
can to garner those benefits, identify the cause, correct

01:18:35.779 --> 01:18:38.890
them and then um hopefully not have the same incident

01:18:38.890 --> 01:18:42.579
happen again. But um and and also given, I guess that

01:18:42.590 --> 01:18:46.670
market must notify uh the generation entity as well

01:18:46.670 --> 01:18:50.760
as T. S. P. And the commission staff of some sort of

01:18:50.770 --> 01:18:53.600
repeated or major rather related forced interruption

01:18:53.600 --> 01:18:57.060
of service. Um, I would expect that this commission

01:18:57.069 --> 01:19:00.359
and our enforcement division uh will be paying close

01:19:00.359 --> 01:19:04.890
attention. And uh I would like to kind of ask you,

01:19:04.899 --> 01:19:07.670
isn't that right? That y'all will be paying close attention

01:19:07.670 --> 01:19:12.189
to 100%. Absolutes. It's an important part of the statute

01:19:12.199 --> 01:19:15.560
that the legislature wants us to require these independent

01:19:15.560 --> 01:19:18.630
analyses to occur if there are significant or repeated

01:19:18.630 --> 01:19:22.930
problems. And my staff will will most definitely be

01:19:22.930 --> 01:19:25.579
paying attention as soon as we receive any kind of

01:19:25.579 --> 01:19:29.000
notification from market about a failure, repeated

01:19:29.000 --> 01:19:33.300
or a major failure. And we will make sure to ride herd

01:19:33.310 --> 01:19:38.079
to get those analyses done and submitted to the appropriate

01:19:38.079 --> 01:19:41.789
folks on time. Just make sure you got it right. You're

01:19:41.800 --> 01:19:45.500
you're acknowledging that we're just because we're

01:19:45.500 --> 01:19:48.220
not putting a hard and fast number on the amount of

01:19:48.220 --> 01:19:51.659
time after the incident and before the root cause analysis

01:19:51.659 --> 01:19:54.470
is initiated, there's, there's a requirement on the

01:19:54.470 --> 01:19:56.710
back end. Once it's completed, you got turned back

01:19:56.789 --> 01:20:00.800
but there's no number of days on the front end, by

01:20:00.800 --> 01:20:03.180
which time it must be initiated we've got different

01:20:03.180 --> 01:20:06.659
types of resources, different technologies and so were

01:20:06.659 --> 01:20:09.819
being deferential to the industry that that's hard

01:20:09.819 --> 01:20:13.819
to put a bracket on what I'm hearing from you is that

01:20:13.829 --> 01:20:18.590
you expect the industry to not use that or abuse that

01:20:18.590 --> 01:20:22.140
privilege to ignore delay root cause analysis after

01:20:22.149 --> 01:20:26.590
an event. Is that fair? Yes, I expect them to act in

01:20:26.590 --> 01:20:30.689
a reasonable manner as I think they've demonstrated

01:20:30.699 --> 01:20:34.199
in the past agreed and wholeheartedly agree with that

01:20:34.199 --> 01:20:36.569
assessment and I know, I know staff will be on top

01:20:36.569 --> 01:20:39.170
of it and I think every think everybody up here agrees

01:20:39.170 --> 01:20:42.659
with the fact that we'll keep a close eye on these

01:20:43.319 --> 01:20:46.229
in the unlikely case we do have an event, we'll be

01:20:46.229 --> 01:20:49.670
watching closely to make sure that Root Cause analysis

01:20:49.680 --> 01:20:53.409
is initiated as soon as reasonably possible.

01:20:56.000 --> 01:20:56.560
Thank you.

01:20:58.289 --> 01:21:01.109
I just had a few things. First of all I wanted to

01:21:01.109 --> 01:21:03.829
say, I've had great discussions with staff on this

01:21:03.829 --> 01:21:07.319
I appreciate the time and effort that uh we, we've

01:21:07.329 --> 01:21:10.319
in the discussions that we've had in these areas, minor

01:21:10.329 --> 01:21:14.239
questions and areas are kind of pretty nuanced. Um

01:21:14.250 --> 01:21:17.720
they're not dealing with the weather number the 99

01:21:17.720 --> 01:21:20.539
through the 95th percentile but um there were a couple

01:21:20.539 --> 01:21:23.250
of things that I just, I wanted to bring up for us

01:21:23.250 --> 01:21:26.140
to think about. Um I've already brought them up with

01:21:26.140 --> 01:21:31.340
staff but one of them would be um our future inspections

01:21:31.340 --> 01:21:37.390
gonna be done by the texas regional entity or ERCOT

01:21:37.609 --> 01:21:42.770
when the federal nerc guideline passes. Okay, so what

01:21:42.770 --> 01:21:45.149
we're gonna do is we're gonna have a Texas standard

01:21:45.159 --> 01:21:48.069
that we're passing that we hadn't have had an effect

01:21:48.079 --> 01:21:53.170
and will have an effect. This Phase two component Nerc

01:21:53.170 --> 01:21:56.890
is a year behind us. Once they pass a federal standard

01:21:56.899 --> 01:22:01.069
then the texas regional entity will be responsible

01:22:01.069 --> 01:22:05.989
for ensuring compliance with that. So what I'm thinking

01:22:06.000 --> 01:22:09.420
um or bringing up is that we want to make sure from

01:22:09.420 --> 01:22:11.869
an industry perspective that they know what to comply

01:22:11.869 --> 01:22:16.109
with and they won't be um having multiple inspections

01:22:16.109 --> 01:22:19.270
from two different levels on two different standards

01:22:19.279 --> 01:22:23.029
and that our consumers don't pay twice. So um just

01:22:23.039 --> 01:22:24.899
I throw that out there for something that we need to

01:22:24.899 --> 01:22:28.520
be thinking about in the future as that works out um

01:22:28.529 --> 01:22:32.260
and they're they're become a state standard and a standard

01:22:33.449 --> 01:22:38.239
for consideration um secondly, um I just wanted to

01:22:38.250 --> 01:22:40.899
for some reason I just felt so strongly about saying

01:22:40.899 --> 01:22:43.350
this and that was, there were a couple of comments

01:22:43.359 --> 01:22:50.319
that we received that were um that said that our rules

01:22:50.319 --> 01:22:54.159
should be consistent with our ERCOT protocols and I

01:22:54.159 --> 01:22:57.130
thought that really believe strongly that that's the

01:22:57.130 --> 01:23:01.600
other way around that ERCOT protocols ought to be consistent

01:23:01.600 --> 01:23:05.539
with our rules and then as we modify and make reliability

01:23:05.539 --> 01:23:09.329
number one, the burden is on them. On ERCOT to make

01:23:09.329 --> 01:23:11.880
it consistent with us, not the other way around that

01:23:11.880 --> 01:23:15.590
tail does not wag. That's right, thank you. Uh, and

01:23:15.590 --> 01:23:19.850
then finally, the point that I wanted to make was that

01:23:19.859 --> 01:23:22.090
this doesn't apply just to cold weather. This applies

01:23:22.090 --> 01:23:26.869
to hot weather too. We have the standards based structure

01:23:26.869 --> 01:23:29.039
that you all have put together I think is really good

01:23:29.039 --> 01:23:33.960
but we have some types of facilities that have hot

01:23:33.960 --> 01:23:37.630
weather challenges as well and they are not exempt

01:23:37.630 --> 01:23:40.529
from understanding what those are and that they ought

01:23:40.539 --> 01:23:45.119
to be um, they need to use their efforts um, to solve

01:23:45.130 --> 01:23:48.720
those problems. Specifically when we had really hot

01:23:48.720 --> 01:23:52.079
weather in july, you all might remember that. Um, we've

01:23:52.079 --> 01:23:54.020
heard, I've heard some stories that wind turbines were

01:23:54.020 --> 01:23:56.010
shut down because the weather, the temperature was

01:23:56.010 --> 01:23:59.130
too hot. Uh, if they're cool weather, if they're cooling

01:23:59.130 --> 01:24:01.909
packages that need to be added inside the vessels,

01:24:01.920 --> 01:24:03.939
that would be a component that would be covered under

01:24:03.939 --> 01:24:06.930
this, under the hot weather component and would be

01:24:06.930 --> 01:24:11.670
required, just like cold weather would um, and I think

01:24:11.670 --> 01:24:16.449
that the last area where I would just request um, a

01:24:16.449 --> 01:24:19.699
discussion with ERCOT or with the state climatologist

01:24:19.699 --> 01:24:23.590
and that deals with wind turbines and that is it. Trying

01:24:23.590 --> 01:24:26.729
to better understand what the difference is between

01:24:26.739 --> 01:24:31.229
the temperature at ground level and 100 meters. uh it's a

01:24:31.229 --> 01:24:35.500
significant difference. But there may be a big temperature

01:24:35.500 --> 01:24:39.520
difference in that there may not be, but we we ought

01:24:39.520 --> 01:24:41.689
to be able to at least understand what that difference

01:24:41.689 --> 01:24:44.939
is, 100 m up versus ground level. So if we can get

01:24:44.939 --> 01:24:47.199
that at some point in time, that would be great. We'll

01:24:47.199 --> 01:24:49.659
certainly speak with their thought about that. I do

01:24:49.670 --> 01:24:53.220
call from some of our prior workshops that there are

01:24:53.220 --> 01:24:57.449
certain newer technologies which include weather stations

01:24:57.449 --> 01:25:01.520
inside the individual cells. So that data would be

01:25:01.520 --> 01:25:06.170
the more relevant data to look at rather than the individual

01:25:06.170 --> 01:25:10.239
weather station inside the larger weather zone. Is

01:25:10.239 --> 01:25:12.649
it is it fair also to take a closer look at the

01:25:12.649 --> 01:25:17.390
language in there and if it's the ambient or anything

01:25:17.390 --> 01:25:20.909
else like whatever, whatever is it assumed that when

01:25:20.909 --> 01:25:26.189
we say the temperature at the operating location means

01:25:26.289 --> 01:25:29.300
100 and 50 ft in the air and that's what they we

01:25:29.300 --> 01:25:33.500
expect them to match. That's that's a question or maybe

01:25:33.500 --> 01:25:37.319
a point of clarification to make 20 29th chairman.

01:25:37.319 --> 01:25:41.729
The rule does specifically say that the resource has

01:25:41.729 --> 01:25:48.270
to be prepared to the hotter of either the data that's

01:25:48.270 --> 01:25:53.189
provided in the ERCOT weather study or The temperature

01:25:53.189 --> 01:25:56.000
at which that resource has previously been able to

01:25:56.000 --> 01:26:00.119
sustain operations may be worth clarifying that, that

01:26:00.119 --> 01:26:04.260
last part means at 150ft off the ground. If that's

01:26:04.260 --> 01:26:09.869
what we wanted to open question, we'll give our rule

01:26:09.869 --> 01:26:12.029
a close reading to make sure that it aligns with that

01:26:12.029 --> 01:26:16.060
intent before next open meeting. I think most of those

01:26:16.060 --> 01:26:22.739
resources have whether data on top Good point, appreciate

01:26:22.739 --> 01:26:28.899
it. I have one just specific question or thought as

01:26:28.899 --> 01:26:33.840
I was looking for wind throughout this entire um proposal

01:26:33.850 --> 01:26:35.579
on page 181.

01:26:40.090 --> 01:26:42.819
Um So the

01:26:45.199 --> 01:26:47.359
and I may be looking at a different version of the

01:26:47.369 --> 01:26:54.029
proposal but it's essentially subsection C subpart

01:26:54.029 --> 01:26:55.640
a little I

01:26:58.520 --> 01:27:00.920
I'm sorry and you all may be looking at what was filed

01:27:00.920 --> 01:27:02.750
I'm looking at the red line version that that helps

01:27:02.750 --> 01:27:08.119
me more but it's subsection C on whether emergency

01:27:08.130 --> 01:27:11.529
preparedness, reliability standards for generation

01:27:11.539 --> 01:27:16.979
generation entity and then it's um subsection star

01:27:16.989 --> 01:27:20.899
I guess one subpart a little I

01:27:22.800 --> 01:27:25.789
where it says installation and maintenance of adequate

01:27:25.800 --> 01:27:29.729
windbreaks. Yes. For resources susceptible to outages

01:27:29.729 --> 01:27:32.520
or d rates caused by wind. There was language in here

01:27:32.520 --> 01:27:38.399
that said installation um basically there was language

01:27:38.399 --> 01:27:41.170
taken out said after windbreaks and other structural

01:27:41.170 --> 01:27:46.090
preparations as needed that was taken out and I'm wondering

01:27:46.090 --> 01:27:48.819
why because I know the wind breaks have been helpful

01:27:48.829 --> 01:27:51.409
and we saw that you know some benefits I guess of it

01:27:51.420 --> 01:27:54.750
um during winter storm landing they're helpful for

01:27:54.760 --> 01:27:56.670
preventing you know obviously wind coming into the

01:27:56.670 --> 01:27:59.340
chill but if there's other structural preparations

01:27:59.340 --> 01:28:01.289
that should be made based on your knowledge of your

01:28:01.289 --> 01:28:03.850
geographic area in the state where you may get a little

01:28:03.850 --> 01:28:07.159
bit more of a chill, then maybe we should leave that

01:28:07.159 --> 01:28:10.319
language in there to provide some flexibility and in

01:28:10.319 --> 01:28:12.649
there. I don't know if you want to provide any thought

01:28:12.649 --> 01:28:14.029
on why you may have taken it out.

01:28:15.720 --> 01:28:19.989
So the specific language was thought by the rulemaking

01:28:19.989 --> 01:28:24.939
team and through consultations with ERCOT weatherization

01:28:24.949 --> 01:28:31.039
team, um, that it was a bit redundant given the specific

01:28:31.039 --> 01:28:36.029
nature of this little I paragraph talking about windbreaks

01:28:36.039 --> 01:28:40.989
that they're windbreaks encompassed the structural

01:28:41.000 --> 01:28:44.010
elements to a windbreak and that there weren't other

01:28:44.010 --> 01:28:50.000
kinds of structures similar to windbreaks that would

01:28:50.000 --> 01:28:55.100
make that little clause meaningful. Okay, so there's

01:28:55.100 --> 01:28:58.020
just not other options besides windbreaks out there

01:28:58.020 --> 01:29:02.920
that would help mitigate wind and windshield. I can't

01:29:02.989 --> 01:29:06.930
answer that question specifically. So as more things

01:29:06.930 --> 01:29:09.949
come out, technology from a technological manufacturing

01:29:09.949 --> 01:29:12.800
standpoint, there could be, I just don't want to, I

01:29:12.810 --> 01:29:14.810
was thinking about wind and wind chill throughout this

01:29:14.810 --> 01:29:17.869
entire proposal, I was really kind of scrubbing down

01:29:17.869 --> 01:29:19.819
the rule and then I saw that language had been taken

01:29:19.819 --> 01:29:22.550
out and I thought, well, I think it'd be helpful to

01:29:22.550 --> 01:29:25.279
have in there just to provide flexibility for the future

01:29:25.279 --> 01:29:27.060
as opposed to just say windbreaks period.

01:29:29.340 --> 01:29:31.300
I know that doesn't address the whole windchill issue

01:29:31.300 --> 01:29:33.689
over here, but it's, you know, something that give

01:29:33.689 --> 01:29:36.340
us flexibility in the future of, there's, you know

01:29:36.350 --> 01:29:40.640
other measures besides windbreaks that can be used

01:29:40.649 --> 01:29:45.329
well. and, and look what what ultimately gives me concerned

01:29:45.340 --> 01:29:51.270
is we're giving a little bit of daylight here and we're

01:29:51.270 --> 01:29:53.590
giving a little bit of cover to the operator and and

01:29:53.590 --> 01:29:55.930
it's stressed in the rule that they need to take reasonable

01:29:55.930 --> 01:30:04.250
efforts to manage against a, uh an event. And um, but

01:30:04.260 --> 01:30:08.529
by by taking out language for redundancy and it's my

01:30:08.529 --> 01:30:12.279
fault, I highlighted the the nuance between including

01:30:12.279 --> 01:30:15.850
in the study and actually incorporating the metric

01:30:15.850 --> 01:30:19.079
in the 95th percentile. It's giving them daylight to

01:30:19.079 --> 01:30:21.739
say, well, I'm not gonna put that foam around that

01:30:21.750 --> 01:30:25.930
thing, or, uh, and it's it's sitting up in DFW where

01:30:25.930 --> 01:30:31.210
it gets really cold or um, you know, uh, out in the

01:30:31.220 --> 01:30:33.399
far flung areas of west texas where I grew up where

01:30:33.399 --> 01:30:37.609
it gets really cold and that wind will freeze it quickly

01:30:37.619 --> 01:30:44.180
So, um, I worry about that. Well, the, at the high

01:30:44.180 --> 01:30:48.420
level make two very good points that one in any of

01:30:48.420 --> 01:30:51.810
our rulemaking want to minimize loopholes and opportunities

01:30:51.810 --> 01:30:55.170
for abuse thereof. And in this particular rule making

01:30:55.930 --> 01:31:00.770
we want to address the most realistic operational reality

01:31:00.779 --> 01:31:09.239
at that location and balance it with the economic reality

01:31:09.279 --> 01:31:11.069
You know, we're not gonna do that. We don't want to

01:31:11.069 --> 01:31:16.229
do that 100 percentile plus 10, you know, so there's

01:31:16.239 --> 01:31:19.489
those are two very fair points. It's most likely scenario

01:31:19.500 --> 01:31:23.010
that they're going to face and that's the it's not

01:31:23.010 --> 01:31:27.970
an easy balance, but those two hugely important parts

01:31:27.970 --> 01:31:31.930
of our job on this road and commissioner, we also do

01:31:31.930 --> 01:31:35.699
have the enforcement mechanism available to us. So

01:31:36.039 --> 01:31:39.149
it's not simply a matter of the entity saying, well

01:31:39.149 --> 01:31:43.180
it's unreasonable for me to do that. It will be verified

01:31:44.119 --> 01:31:48.039
if there is a failure that's caused as a result of

01:31:48.039 --> 01:31:52.020
a weather emergency. And the subsequent investigation

01:31:52.020 --> 01:31:56.369
reveals that that failure occurred due to poor preparations

01:31:56.380 --> 01:32:01.000
or preparations that were unreasonable because they

01:32:01.000 --> 01:32:03.920
didn't install the phone. For example, that's something

01:32:03.920 --> 01:32:06.539
that will be revealed through an investigation and

01:32:06.550 --> 01:32:09.930
we do have the enforcement mechanism to come behind

01:32:09.930 --> 01:32:12.859
and make sure that individual actions and individual

01:32:12.859 --> 01:32:16.319
events are occurring in accordance with the policy

01:32:16.319 --> 01:32:19.319
direction that you all are approving or we hope that

01:32:19.319 --> 01:32:21.739
you will prove at some point. And I didn't raise this

01:32:21.739 --> 01:32:23.609
provision because I think it will address windshield

01:32:23.619 --> 01:32:25.840
I raised it because I just don't want to, you know

01:32:25.840 --> 01:32:29.310
tie our hands. Like, I mean, if you find it just as

01:32:29.310 --> 01:32:32.710
easily as you said right here that, you know, you went

01:32:32.710 --> 01:32:34.470
and did an investigation and they look at the rule

01:32:34.470 --> 01:32:37.010
and said, well, you didn't require anything but a windbreak

01:32:37.710 --> 01:32:40.739
taking out this language would, you know, you know

01:32:40.750 --> 01:32:44.399
we were overly prescribing some things, right? So that's

01:32:44.399 --> 01:32:45.840
why I thought that language would be helpful in there

01:32:45.840 --> 01:32:50.850
So that there is some flexibility in allowing um other

01:32:50.850 --> 01:32:54.050
things besides windbreaks to be used to break against

01:32:54.050 --> 01:32:57.170
wind and wind chill and that way you have more flexibility

01:32:57.170 --> 01:32:59.779
from an enforcement standpoint in the back end, You

01:32:59.779 --> 01:33:03.090
know, I think these are all very valid points of discussion

01:33:03.090 --> 01:33:06.430
and in my mind remain open questions. None of this

01:33:06.430 --> 01:33:11.949
is decided today and accept that MS Jackson's enforcement

01:33:11.949 --> 01:33:14.310
I think everybody's on board with that, that's but

01:33:14.310 --> 01:33:17.130
everything else is an open question, which is why we're

01:33:17.130 --> 01:33:20.000
taking the time to be deliberate and thorough in this

01:33:20.010 --> 01:33:24.479
Um And I think it's also fair on any of the points

01:33:24.479 --> 01:33:27.550
discussed, especially the Windchill still an open question

01:33:27.550 --> 01:33:29.869
in my mind, are there is there any further analysis

01:33:29.869 --> 01:33:33.810
or a B comparison or anything else? Uh You wanna request

01:33:33.810 --> 01:33:37.300
from staff that to provide more context? We're gonna

01:33:37.300 --> 01:33:41.649
be thinking about just any time Enhancements to language

01:33:41.649 --> 01:33:44.460
that could be considered um to reinforce to where there's

01:33:44.460 --> 01:33:47.250
not, there's not the daylight. Uh and again, I know

01:33:47.250 --> 01:33:49.060
you'll catch it on enforcement, I know you'll catch

01:33:49.060 --> 01:33:52.939
it after, but in 2011, remember the whole valve thing

01:33:52.939 --> 01:33:55.329
somebody can go out and bang on a valve, you know,

01:33:55.329 --> 01:33:58.420
at the right time in a very cold, very windy event

01:33:58.420 --> 01:34:03.300
Um and it froze solid, but you've taken great effort

01:34:03.300 --> 01:34:07.069
to try to be proactive rather than reactive. Um So

01:34:07.069 --> 01:34:10.020
we'll try to think of an enhancement that furthers

01:34:10.020 --> 01:34:11.029
that effort.

01:34:12.960 --> 01:34:17.250
And staff of course will be available. Park still throughout

01:34:17.250 --> 01:34:21.390
some A's and B's and formulas and get nervous on that

01:34:21.399 --> 01:34:26.800
But the who knew math was part of the job? No. Um

01:34:26.810 --> 01:34:30.430
All right. Uh unless there any other points of discussion

01:34:30.430 --> 01:34:32.489
I think this is exactly why we're taking the time to

01:34:32.500 --> 01:34:36.789
do this. Most importantly, think Mark smell smells

01:34:36.909 --> 01:34:40.720
and all the staff that dug into this. This is a huge

01:34:41.359 --> 01:34:44.800
huge topic, hugely important for great reliability

01:34:45.380 --> 01:34:49.979
and as we heard Tuesday from the House and frequently

01:34:50.319 --> 01:34:53.899
previously from the Senate our Legislature state leadership

01:34:53.899 --> 01:34:57.949
are watching closely and tens of millions of people

01:34:57.960 --> 01:35:01.289
are relying on this. So thanks all. Thank you very

01:35:01.289 --> 01:35:04.170
much. Look forward to follow discussion a few weeks

01:35:04.189 --> 01:35:05.890
Thank you. Thank you guys.

01:35:08.149 --> 01:35:09.489
All right.

01:35:11.090 --> 01:35:13.640
I think we've got a couple other consent items, but

01:35:13.640 --> 01:35:16.920
after that, I don't have anything else for the remainder

01:35:16.930 --> 01:35:21.229
of agenda. Mr. Anything else on your list?

01:35:24.000 --> 01:35:28.859
Everybody good. Alright. In that case we have no further

01:35:28.859 --> 01:35:32.319
business before the commission today. So this meeting

01:35:32.319 --> 01:35:35.270
the Public Utility Commission of Texas is hereby adjourned