Good morning. This meeting of the public utility commission
of texas will come to order to consider matters has
been duly posted with the secretary of State of texas
for september 15th 2022. For the record, my name is
Peter Lake and with me today, are Will McAdams Lori
Cobos, Jimmy Glotfelty and Kathleen Jackson. By the
way to the order of the agenda, after our consent agenda
and then any public comment, we will move directly
to our closed session to pick up and then pick up our
normal agenda after closed session. We anticipate a
somewhat lengthy closed session this morning, at least
30 or 45 minutes. Uh So just keep that in mind uh as
a matter of programming for the morning. First up consent
agenda items Mr. Journeay please. Good morning commissioners
by individual ballots the following items were placed
on your consent agenda. 2-4, 6, 8, 9, 11, 12, 16,
18, 19, 22-26, 32, 35. I need to announce that Commissioner
Cobos recused herself from um item 18. Thank you sir
We have a motion to approve the items just describing
motion a second. All in favor say aye. Aye. Non oppose,
the motion passes.
(item:1:Public Comment) This point will begin public comment. Oral comments
related to a specific agenda item will be heard when
that item is taken up. This segment is for general
comments only when we do get to oral comments on specific
items, stakeholders should not approach the table unless
oral argument has previously been granted or they have
been invited by a commissioner as always, speakers
in public comments segment will be limited to three
minutes each. Mr Journeay do we have anyone from public
comment signed up to speak? Yes sir, we have one this
morning. Mr Cyrus Reed,
I'll be very brief. Um Cyrus Reed Lone star Chapter
of the Sierra Club, I'm here to thank you guys uh and
then do a reminder. So thanking you for starting an
office of public engagement um it's been put in your
legislative appropriation request. We and many other
organizations are in support of that so I wanted to
publicly thank you for taking that step. Uh second
um I like yourself and many others were the legislature
and I think you heard two things from them. One is
like many folks, they are concerned about rising costs
and they do want to make sure that on any decision
that you consider on phase two, that you have adequate
time for adequate public input, Including you know
some input from them as well. So just sort of wanted
to say that publicly and then my reminder is um comments
on our petition for rulemaking on energy efficiency
are due tomorrow. Um last night we did submit a letter
that 26 organizations signed on supporting our petition
for rulemaking. Um and in that letter It either calls
on the commission to adopt that rulemaking petition
which you know, I'm a realist or open up a separate
project or uh comments on on rulemaking in the near
future. I know you do have an upcoming meeting an
EIP meeting on October 18th. I hope that meeting will
look at all the issues not just the programs but also
how we pay for them. Um and I think those were the
points I was going to make and so I'll be quiet. Um
uh there thank you. Mr Reed, thank you.
Lights still green. Well done.
No further public comment. All right, thank you. Mr Journeay
at this point. Having convened in a duly noticed open
meeting, the commission will now at 9:38 AM on september
15th 2020 to hold a closed session, pursuant to chapter
551 of the texas government code section 551.071 point
551.074 and 551.076. We'll be back in a bit
closed session is hereby concluded at 11:31 on september
15th 2022 the commission will now resume its public
meeting. Having consulted with our attorneys in closed
session, we have several motions to consider. First
Is there a motion to authorize our lawyers to file
an amicus brief in the Supreme Court of texas in the
CPS Energy V. ERCOT case number 22-0056. 2nd Motion
and 2nd on on favour say Aye none opposed motion passes
I'll entertain a motion to authorize our lawyers to
file an amicus brief in the Supreme Court of texas
in ERCOT v. Panda generation case number 22-0196. Got
a motion to second. All in favor say aye. Aye. Non oppose
the motion passes. Is there a motion to authorize
our first counsel to file an answer in support of motions
to dismiss filed by MISO and Edison Electric Institute
Inferred docket number E L 22-78 motion is second all
in favor say aye, non oppose, the motion passes.
I'll entertain a motion to authorize our lawyers to
file a brief in support of ERCOTs position in any
appeal of the adversary proceeding, judgment and interest
the ERCOT case number 22-03018 in the bankruptcy court
for the Southern district of texas. Second motion second
all in favor say aye, aye, none opposed motion passes
Um Is there a motion to authorize our lawyers to file
an amicus brief in support of market positions in ERCOT
V. Just energy in the fifth circuit case number 222-20424
2nd. Motion to second all in favor say, aye, aye. None
oppose, the motion passes. Uh and then finally in consideration
of the discussion in closed session with attorneys
in the commission, any thoughts on the ongoing proceeding
of Brazos settlement? Uh Mr Chairman members consistent
with discussions in closed session, I believe it's
important to um make some expression uh in terms of
ongoing uh, discussions about settlement and uh, Brazos
as such, I would make a motion. I would move to delegate
authority to the chairman to communicate the PUCs
participation in settlement negotiations and the PUC
puc support of ERCOT settlement efforts in the Brasses
bankruptcy case, in the U. S. Bankruptcy court, in
the Southern District of Houston case number 2130725.
Got a motion on the table. A motion to second. All
in favor say, aye, aye, none opposed the motion passes
Thank you all for all the work this morning. Thank
you all for being patient.
At this point we will move to our regularly scheduled
programming.
Mr. Journeay. (item:5:52534) First item is five, docket 52534. Petitioners
Cisco, central frisco to amend Marilee said CCN
by expedited release a revised proposed orders filed
on august 2nd. ALJ recommends no changes in response
to exceptions. Commissioner McAdams filed a memo. Thank
you sir. Well, uh, mr Chairman members uh, the petition
of central frisco limited to amend Merilee Special
utility utility district certificate of convenience
and necessity in collin county by expedited release
bears a final order I filed a memo on this, correcting
and clarifying a number of findings of fact. Uh, ultimately
if the parties want to refile this, they need to clarify
and provide evidence on the question of the meter or
meters involved. And if there are uh, an inactive meter
or meters that have the capacity to provide service
I would think that, um, it or they would need to be
carved out of the petition. Therefore, I would move
to that we should adopt the revised proposed order
that denies central frisco's petition but modify that
order for accuracy consistent with my memo. Makes sense
to me. Other thoughts, comments or second of the motion
on the floor.
I'll second the motion. Thank you. We've got a motion
in a second. All in favor say, aye unopposed motion
passes. Thank you. Thank you. (item:7:53063) Next up Mr. Journeay. Item seven
is docket 53063 is petitioned by outside city ratepayers
appealing water rates established by the city of Leander
A proposal for decision was filed on august 9th
The ALJ recommended no changes in response for two exceptions
couple moving pieces here thoughts. I live close to
this area, so its near and dear to my heart. Um
as a matter of policy, um, in my view, this type of
appeal where an outside city or out of district ratepayer
looks to the commission to appeal a rate change is
in many cases, the only outlet these ratepayers have
to seek rate relief. Often they do not get a vote for
or against those that make the decisions on the rates
And as they are outside of the city limits as such
outside, uh, city ratepayers will often bear greater
burden in rates than those ratepayers inside the district
or the city limits Since coming to the commission,
we've all sought ways to make the commission more open
and responsive to Texans um and to defend the spirit
of the law. Given this context, I do not believe that
we should make these appeals more burdensome than they
already are. The PFD would require that all of the
informational items listed in 16 TAC 24 103 subsections
A 1 through 5, be mandatory. This is not how this
rule has been interpreted in the past and is not consistent
with our current policy. For example, previously docket
number 42910, much like in this petition after the
first page, the signature page did not contain the
clear uh and concise statement of the appeal. And like
this, docket the petitioners amended the petition,
adding the description uh to the subsequent signature
pages. In response. The SOAH ALJ in ruling against
the motion to dismiss, stated, the commission's rule
does not make the inclusion of the information a requirement
and the rule does not provide that a petition must
contain the missing information. It only states that
the signature pages should contain the information
and this idea that the information in this petition
is to be viewed prescriptively uh and has been repeated
in subsequent dockets. So I share that the ALJ's
opinion and the commission's previous practice, I believe
that the petition compliance with 16 TAC 24 103
subsection A, the statutory requirements and that good
cause exception is unnecessary. We should not make
it harder for ratepayers that otherwise do not have
representation to appeal their rates, which is the
spirit of the law.
I like most of what I heard. But we do have some
attorneys who should know better though.
We shouldn't block the process. But when folks hire
attorneys that come before this commission frequently
these folks should have received better counsel. So
we don't have to even be up here considering this.
I would say. I mean, I kind of take, you know, a
little bit different view and that is that uh that
There is is the word should a must in terms of what
what appears on all of the documents, uh where all
the signatures are being requested. Um it's clear that
they passed the 10% threshold of ratepayers signing
up for the appeal. Um I just to me, I wonder if
this um is the one to throw out on a technicality or
if we grant the good cause exception. Um and you know
remand to SOAH, we reject the PFD, but you know, I
I don't know, I just it's not a huge policy issue.
I'm just um, I'm sympathetic to those that are who
have signed the document. Um, Mr chairman. I understand
you know, part of our duty here is to protect the ratepayer
and that means that they know what they're signing
So um, you know, I can go both ways, but I just
I thought in terms of docket management, get this thing
done and and and and I would for the benefit of the
commission, I'd also highlight um they did go through
the secondary effort of correcting the petition and
going back and having signed affidavits that no, they
did know what they were signing after the fact. So
they went back and tried to cure this for the purposes
of procedural hurdles that they may face. So yeah,
a little bit, a little bit of grace, I don't think
we should hold it up, but and perhaps there's a time
in the future to take a closer look at
cleaning this up down the road. But the folks that
come up here, you know, the legal representation that
comes up here consistently shouldn't have to go back
for the affidavits like this, this is not one of the
most complex issues this commission addresses. Let's
get it. These folks should get better for their money
So let that serve as a warning, correct. Great. Yeah
I mean, look, this is a balancing act. I agree with
a lot of points that comes from McAdams raised in terms
of not um overly being overly prescriptive with our
role um as written, I think the role could use some
clarity in terms of, of just laying out a better framework
of what our expectations are. But the overarching policy
goal here is to ensure that there is a pathway for
outside ratepayers to be able to appeal rates that
they don't have any vote on um or or any, you know
be able to voice their concerns. And so weighing that
against also ensuring that they comply with providing
the requisite information, because I do agree with
you chairman Lake, they got to know what they're signing
You want to be able to at least have these parties
Um the ratepayers, the outside ratepayers, the organizers
the attorneys that are putting together these petitions
to strive to give us to present all that information
and importantly, the concise statement of what you're
signing. Um so that um the ratepayers are aware as
they put their signature on on those blocks, so it's
a balancing act and and um where I come out on this
is um, you know, let rejecting the PFD as well, um
that dismisses the outside ratepayers petition, because
I do think that an overly prescriptive policy going
forward would um trump that the purpose of what we're
trying to do here and that is giving the outside ratepayers
voice and and ensuring that the public and um has an
opportunity to voice concerns within the spirit of
the law. And if our spirit of the law isn't clear well
today, I think we've heard some warnings and we also
recognized that the rule needs to be a little bit more
clear, but, you know, you should strive to meet to
provide us with all that information. It's important
um to have that information. The petition
agreed and this this ability of ratepayers is important
We shouldn't obstruct it today. But the grace you mentioned
is not perpetual and between we everybody's quite aware
of the extensive amount of rule makings ahead of us.
So safe to say this probably won't be addressed for
a while. And in the meantime there's there's a shot
clock on that race. Well, I don't know how long it
is, but from one commissioner who will be begging for
it yet another rulemaking later today. No, I won't
ask for that right now, but it needs to be taking it
Okay, I think everybody's
with deference to Mr Smeltzer. Commissioner McAdams we have
talked about it was important to make clear that this
commission's jurisdiction established by the legislature
and statute and by our rules and that to the extent
this PFD determine this Commission had no jurisdiction
over this type of complaint. I believe we have jurisdiction
Um We retain jurisdiction. We will always have jurisdiction
The other I guess question is, do we want all this
information um at the time of the signature or upon
filing of the petition? That was the other, I guess
question that we need to. Well, as I heard Commissioner
McAdams it's the rule is not mandatory on these provisions
Word should does not mean must, but you should strive
to give us all the information. We would love it would
it would make your life easier. Another opportunity
for clean up. Hence the word should and the ambiguity
All right. Uh So with that Mr Chairman and I believe
uh we also need to address the issue of good cause
Uh
um so I would move to reject the PFD recommendation
to dismiss the petition For the reasons discussed consistent
with our discussion. Second. Got a motion to second.
All in favor say aye, aye none opposed motion passes
Thank you all good discussion Next up, Mr Journeay
(item:10:53262) Item 10 is docket 53262, petition of Blackland
Water Supply Corporation in the city of Rockwall for
approval to amend the CCN under Texas water code 13
255 A. Before the commission is an appeal of order
number six.
Another interesting interesting one thoughts, comments
Yeah. Uh Mr Chairman, I believe motion is in order
um that we should grant in part and deny in part the
appeal order number six. Specifically I would grant
the appeal on the issues of notice of the petition
and the need to obtain the CCN to provide service.
Um However, I would ask the petitioners for clarification
as to where the boundary in the 1989 service agreement
is in relation to big Texas facilities that are currently
receiving service from Blackland water WSC. Commissioner
McAdams apparently you were not informed, I was just
informed this morning. The judge in this case had asked
for some clarity. Uh the uh attorneys for Rockwall
filed a letter stating that while part of Black lands
property is within the confines of the agreement and
needs to be decertified that the consuming facility
on the property of big tex is not within that is so
it is outside that area. So we uh we would grant so
our concern here that that we wanted to send it back
for is I think we have great clarity. I don't know
that any of this is in the evidence. We need to get
this cleared up in the evidence uh and the judge can
take care of that. Okay, so the granting the appeal
We don't need to re manage grant the appeal. Yeah.
So I moved to grant the appeal the thoughts comments
for a second. I'm in agreement as well. 2nd. Great
glad we had all the info. Again, back to that theme
of the sooner the better I guess we need to finish
out that vote. Mr motion is second on the floor. All
in favor say aye, aye none opposed motion passes. Next
item please. (item:14:52765) Item 14 is docket 52765. It's the application
of Daemon systems for SPCOA. Proposal
for decision was filed on august 2nd. ALJ recommends
no changes in response to exceptions. Do you want to
pull up the next item to you or do you wanna take
it? I'm happy to take both of them the same same concept
that seemed pretty straightforward. (item:15:53076) Item 15 is docket
53076. It's the application of earth grid PPC. For
S. P. C. O. A. Proposal for decision was filed on august
8th. The A. L. J. Recommends no changes in response
to exceptions.
Uh pretty straightforward but wanna hear some thoughts
and comments. Sure. So we're taking these up together
because they're addressing the same issue on the S
P. C. O. A certification. Um Ultimately, I think based
on our prior precedent interpretation of rules and
and statute, I think I would be in favor of rejecting
the PFD in both cases and remanding the case is back
to docket management. Um For the Damon case, I know
that Damon has not been participating in the case uh
for some time and once were remanded back so that the
commission ALJ can then consider the case under commission
commission staff's new position. Um If Damon doesn't
show up, then it's up to the ALJ to then dismiss the
case for failure to prosecute at that time. With respect
to the Earth grid case, would deny Earth grid's motion
to withdraw um that was filed after the PFD was issued
reject the PFD, remand the case back to docket management
So the case can be processed with commission staff's
new position. Um and allow Earth grid to also correct
Um The form that was appended to their application
um with respect to question 10 B.
I agree with that. Mr. Chairman this for the purposes
of Earth grid. It puts the ball back in their court
let them decide how they want to proceed. So agree
on all points. Uh Alright, given the separate separate
motions, given the nuances between the cases, anybody
want to start with uh 14 Damon. Sure. uh I would move
to reject the PFD and remand the case back to docket
management for further processing.
Second motion second all in favor say aye, aye, none
oppose the motion passes. I gotta have a motion first
grid. Okay. So I would move to deny Earth grids. Motion
to withdraw, reject the PFD. Remand the case back to
docket management for further processing and to allow
Earth grid to correct the form appended to their application
Second got a motion in a second. All in favor say aye
not opposed motion passes. Next item please 17 we don't
have anything on that. (item:20:52195) item 20 is docket 52195. It
is the application of el paso electric company to change
rates a proposed order filed on august 26 correction
memos filed on september 7th and I have a memo with
proposed changes to the order. All right, thank you
sir. This was a settlement. I believe. Any thoughts
comments
I hate black box settlements. Um Just uh there's been
a little commission precedent here that these things
have happened and and I know they're gonna continue
to happen and that's fine. Um I was gonna do a black
box memo today, uh Commissioner memo that was gonna
have um written to you all and from me, I was gonna
say black box memo, and then it was gonna be totally
empty until the last line that says, I look forward
to discussing these details with you with the intent
that we know nothing about what's inside this thing
So um I think these are part of the way things happen
here, We're not going to change it, but you know, they're
there, it's kind of hard to make a total decision,
you know, when you're when you don't know all of the
facts that being said. Um it's uncontested. Um you
know, the writers and surcharges all have been agreed
to by the parties. I think most important in this.
Um this adds to the ring fencing mechanism that we
put in a in a lot of other um utility areas. We
prevent commingling of assets and you know, it seems
that uh what we can see of this, it's a pretty reasonable
settlement. I have an agreement. Oh, sorry, I look
forward, I'm sure you'll have an opportunity to file
such a clever memo in the future and look forward to
seeing that
we know how wordy he is. It's very wordy. I'm in
agreement as well. I think based on my review of the
settlement agreement pros order, I think the settlement
is reasonable, I zoomed in towards the back end on
the cost allocation, great design aspect of it. Um
I know that there are some sharp decreases in some
of the charges that the industrials are Um had been
paying, that had been significantly reduced, but upon
looking at the net impact of the overall rate case
you do see that they're actually, their rates are going
up. So there's no, you know, I was trying to cross
correlate that back to what actually what was happening
because I'm very interested in cost allocation rate
design. I do see that the residentials are incurring
at 2.9% um increase on their bills and and um you know
I know OPUC signed onto the settlement agreement um
and that that gives me some comfort um but you know
as we look forward just to to be cognizant of the fact
that, you know, there will be a 2.9% increase to residential
ratepayers out in el paso and and other charges that
may be coming down the pike through their AMS surcharge
in another matters. So, um I would be in favor of approving
the the agreement um and and the proposed order, but
I just wanted to note that, you know, those are issues
that I wanted to focus on in this case, I think the
rest of the revenue requirement, ready to return and
big aspects of the case were reasonable, agreed agreed
on all points.
Not a huge fan myself, but given the circumstances
and the fact that OPUC and major consumers of power
signed on in, in that area and um
willing to move forward. Thoughts, any other thoughts
comments or a motion to approve the proposed order
I would support you in a motion and second it, we've
got a motion and a second. All in favor say, aye, I
don't oppose the motion passes
next item please. We need the most. Sorry, can I?
We need that motion to be amended uh, to be consistent
with commission Commission memo,
do we
as amended by the commission
fascinating.
We don't have a commission memo on that. We just had
a correction memo from the judge.
I believe you announced,
you know, we'll table this to the end of the agenda
I'm sorry. And I have a memo with proposed changes
to the proposed order. I move that we propose that
we approve the uh, the docket item uh, consistent with
the commission counsel memo. Second motion is that
correct emotion in a second? All in favor say, aye
aye, not opposed motion passes. Thank you. Next item
(item:21:52485) Item 21 is docket 52485 .It's the application of SPS
to ammend its CCN to convert the Harrington station from
coal to natural gas. Proposal for decision was filed
on july 25th. The ALJ does not recommend any changes
in response to exceptions? I have a memo with proposed
changes to the proposal for decision.
Do you have a commission memo? This this made a lot
of sense to me but of course, happy to hear thoughts
and comments.
I'm in favor of adopting the SOAH PFD and granting
SPS's CCN application to convert all three
Harrington generation station units from coal to natural
gas and approve the natural gas pipeline for supplying
the gas to the converted units based on route number
two. I'd support you on that commissioner. I mean,
they did an analysis on the effect of um the retirement
towards their uh the new 15% reserve margin. Um this
is going to be important in a sooner rather than later
in terms of the accredited values of these facilities
in uh in the next few years. And I'd also highlight
that um Harrington, the location, the accredited value
that it can provide will help support that utility
in um meeting increased obligations under a new capacity
value assigned to winter months as well. So right now
it's assigned to summer but active conversations um
and policy development inside SPP is focused on winter
PRMs. So these will be invaluable in the next few years
We're all learning winners just as important as exactly
and I would say in the back and I know various parties
OPUC the city's proposed conditions on our approval
and I will say that those are very important issues
that they have raised and those are issues that we
will address in SPS's next rate case um with respect
to the appreciation and the booking of, you know how
those pipeline costs are booked and and reviewed. And
also with respect to, you know, cost caps and capital
expense caps, those, you know, what would be reviewing
all those costs in the rate case that SPS will file
in the future and um for to ensure that they are just
and reasonable and uh necessary and prudently incurred
So those issues are important. But with respect to
our review of the CCN here today, we're focused on
the criteria for CCN um compliance and we'll review
those issues in the next rate case huge, hugely important
point that just because they're not taking up today
does not mean they are ignored or adjudicated. I would
uh I would say this case kind of disturbs me a little
bit but I have to be okay with it. Um I feel
a little hands tied here with what SPP
has done. Um We have an older older unit, we've
got three older units um and SPP or SPS, uh the R
T. O. Or the art what the R. T. O. Has done
in resource Adequacy. Um first of all tells me that
this is the right decision to do this. Um The I just
don't like upgrading and changing fuels, you know,
on a very old plan. I would hope that in the future
that this site could be used for a different type of
plant, a new type of gas plant rather than conversion
of an old coal plant. Um that uses old technology um
that's not where we are today and I think there's a
there's an issue about uh preserving injection rights
into uh into SPP so they gotta keep utilizing this
plant um All those are reasons to do this, but um the
costs allocated to Texans is pretty limited um and
you know, again, I feel like it's something that we
have to do, not, something that I just really wanted
You told me to vote for that 15%. Pr I'm just kidding
but there's also a benefit to having the dispatchable
fuel available now versus having to wait to build a
new plant conceivably in the future. So there is, as
you mentioned, there's a timing benefit here. Absolutely
and a lot of the cost of the pipeline, they are, the
vast majority of them are, everybody likes efficiency
Uh we prefer it, but here and now we need to need
dispatchable and we need it uh in the form of gas uh
all that being said, agreed with all the very good
points. Uh do we have a motion to motion to adopt the
proposal as is modified by the Commission council memo
We better check, I believe that's what it was and I
would so move yes sir, Got a motion and a second. All
in favor say aye, none oppose the motion passes
next item please sir.
(item:27:53774) Item 27 is docket 53774 agreed reported violation
relating to the city of Burnett's violations. PURA
and commission rules related to power line inspection
and safety reports. A proposed order was filed july
13th. No exceptions or corrections were followed. Thank
you sir. Thoughts, comments I would say mr Chairman
that we should uh we should support this penalty. Uh
this agreement um with the um comment that missing
deadlines on this law um filings are unacceptable.
We've had Children that have died as a result of non
compliance, non compliance with the law. The filing
should be done. Um You know, I'm I'm glad that um these
are getting cleaned up. Um we haven't agreed to settlement
but you know, in honor of the brand and son and the
other child who died that I think we got to uh follow
the legislature that says that these things have to
happen.
Absolutely, thank you for that. Is there a motion I
moved to support the uh violation uh about the proposed
order under the proposed order. Got a motion and second
all in favor say, aye, aye none opposed motion passes.
(item:28:51603) I believe that brings us to item 28 regarding distributed
Energy Resources. Commission McAdams has filed a memo
Would you lay that out or you have some comments. I
have some comments. You know, I have not filed a memo
yet, but thank you Mr chairman and thank you for indulging
me in an update for the commission on issues related
to uh distributed energy. Uh jeez after that executive
session, I'm fried storage resources um into the distribution
system. Uh we are currently underway on a series of
negotiations on how to streamline processes for interconnection
of all resources, both that transmission and distribution
But as a part of this project, 51603, broadly we're
working on processes to interconnect D E S R S so batteries
in this case at the distribution level um just as a
couple of points of background, 350 megawatts of distribution
level, batteries and ERCOT system are providing transmission
benefits. Um PUC has provided thus far limited guidance
on interconnection and how that process should proceed
Uh Battery developers have petitioned the PUC uh for
more clarity and transparency and standardization to
to make it as efficient as possible to bring more resources
onto the system at any level. TDUs and battery
developers have been working on a compromise behind
the scenes um toward the ultimate goal of having a
straw man for a potential rulemaking that would provide
that clarity. Um there have been three major points
of discussion uh process and timelines, cost allocation
and then the status of ERCOTs non curtailable circuit
requirements. So the issue of a dedicated feeder for
those resources participating in ancillary services
So when a battery or a DESR Interconnects at distribution
there's a substation and on that substation there's
headroom and capacity to interconnect that resource
Um But for the purposes of Load shed planning, um ERCOT
has to in order to allow that resource to participate
in Ancillary services. ERCOT has to know that that
feeder that that circuit that the battery is on will
not be rotated as a part of an emergency response plan
A Load shed plan. And so we've been trying to work
through the nuances uh and and what could become modification
to ERCOT protocols to allow these resources to come
on to bid into uh Ancillary services and to have the
uh for ERCOT to have the security that reliability
is maintained while also allowing these new valuable
resources to provide a system wide benefit through
the ancillary services market. So here's the status
uh We've made great headway right now, um a draft interconnection
standardized interconnection process is almost ready
to be published and to inform this commission published
for comment from to be filed as as a part of an
informal agreement keyword informal between the investor
owned utility transmission, distribution utilities
T and TVSPs Um and the DESRs
but the intention for further comment from
the general public. That's correct. Yes, that's correct
We are also engaged in discussions on uh interconnection
cost allocation and the pathway that DESRs may follow
to um to have cost either shared by others or to pay
their way to get to interconnected transmission again
that substation and then to have a bridge built between
their two transmission to have their energy flow onto
the main system. And the ERCOT team is working on clarifying
their requirement and opening up the market to more
resources as a part of the dedicated feeder issue.
Um So here here's where we're at and here's where I
need guidance
as a part cost allocation was always going to be the
devil in the details in this policy. Uh There is an
incentive for uh distributed energy resources to interconnect
distribution one because of spare capacity on substations
too, because of a spare uh because of um a view that
it's quicker to interconnect at distribution rather
than going through the separate study process at transmission
Um and then three they they have the real estate already
locked in real estate is a big issue in terms of resource
deployment and especially in different areas of the
state where there's either a lot of transmission congestion
or uh there's just not room to build a big power plant
and that's where these batteries become very useful
and it's in the state's interest of trying to make
to make it as easy as possible for these resources
to come in at the locations that they're applying for
And so um the good news is is that we do not
believe the standardized interconnection process for
the major parts of the competitive areas of market
are gonna be a problem. But on cost allocation batteries
need certainty in what they're gonna pay in terms of
interconnection. And there's a the harm the policies
between transmission level, interconnection and distribution
level are not harmonized at distribution. They do not
have to pay uh construction interconnection costs that
uh that interconnect them into the system and that
was based on a PUC rule in 2012 that designated
them a pass through resource, which means they're only
charging and discharging. So they never actually produced
the power that they are bringing onto the system. So
they didn't want them to be penalized by these um pass
through charges because they're always charging at
some point and the electrons are always coming through
So they would be penalized as a basic function of their
technology and I maybe uh explaining this incorrectly
but you kind of get the gist at distribution, there
is no such allowance. And in order for these resources
to come on in an expeditious way we need to provide
them certainty. So there's a public interest in uh
in discussing a rulemaking that would provide them
that certainty. Now for your information, there are
two separate kinds of costs that they are subject to
uh the c i a c costs, which is basically the facility
cost to build the facilities necessary to bring their
power to market. Ok. So, to upgrade the substation
necessary to bring them on and then there's the monthly
distribution charge that they would be subject to and
that's on an ongoing basis right now. Um
there the negotiations are stalled. There is a pathway
to try to put a square peg in a round hole by
creating a parallel between the way industrial consumers
interconnect at distribution, which sometimes happens
and then bridge themselves to transmission level because
under that system, with certain utilities and I'll
name encore as one uh industrial consumers can pay
for the upgrades that they need. They can essentially
build their own substation and incur all those costs
and they'll do that in order to interconnected distribution
bridge themselves to transmission. And the trade off
is is that they basically buy their way out of a lot
of the uh maintenance and operation level, residual
costs over time on a monthly basis. They are still
subject to an incremental mm no charge on a monthly
basis. But it is, it is very dependable. It doesn't
fluctuate. And so it's that certainty that provides
them a benefit and that's why they pay for all those
upfront upfront costs.
So, um, what I am proposing right now is that all this
is a lot to take in at this meeting. But I would
like for the commission to discuss their thoughts about
a potential compromise uh in the vein of following
the industrial uh distributed interconnect the distributed
interconnected industrial consumer template and then
um, feasibly scheduling a rulemaking based on a memo
that Commissioner Glotfelty and I may file before the
next october 6th open meeting, which would outline
the parameters of where we believe compromise could
be reached. And uh, that would allow stakeholders including
the non opt in entities which currently have not been
involved in the negotiations, but they are, they would
be considered under the policy to become involved in
those negotiations um, at a high level as we move forward
on this. In my opinion, there is no circumstances as
a part of this review or rulemaking where distribution
level customers should bear the cost burden of interconnection
of batteries at distribution. What we are considering
as a part of this policy is how to allocate costs either
to the battery themselves, to build the necessary infrastructure
to get themselves on and on an ongoing basis, potentially
how to uplift future costs, uh, or share future costs
at the transmission level, which is what benefits the
ERCOT system and provides a system wide benefit. And
so, uh, to put concerns at ease about um, encumbering
distribution level consumers of which there's a finite
pool, it's not the entire state of texas, it's not
ERCOT it's that little distribution system, that is
not on the table in my view, and I believe Commissioner
Glotfelty shares that view. So, um,
at a high level, that's what we're considering, I would
also file uh if final agreement is reached on a template
interconnection agreement, I would file that as a part
of the pre october 6th open meeting memo for your consideration
so that everybody can then view this and debate it
and discuss it and uh find whether it's in the public
interest that this should move forward and then thirdly
um address ERCOT position on how they would split the
baby, so to speak on dedicated fears for these D E
S R s at uh that should participate in ancillary services
and how they would manage that as a part of emergency
planning and then that framework could be discussed
by us and potentially contemplated in a rulemaking
at some juncture, depending on staff's bandwidth and
their ability to to process it with that. I know Commissioner
Glotfelty has thoughts and I'm sorry, that was so complicated
but welcome to my life for the last, Can you repeat
point # two. So yeah, so um listen, will has done a
great job managing this process. Um stakeholders have
done a great job coming in here and being open to discussion
on not only uh the value of distributed resources and
batteries at distribution voltage, um uh their value
to the entirety of the system and the and the value
to consumers across the system. They have, they've
negotiated in good faith from their positions, I think
um I think the standard interconnect agreement is moving
um along, I mean it's gotten a lot further with the
industry negotiating than they would have if we had
to make a decision on our own, initially in a rulemaking
so having them work that and then we put this into
a rulemaking process for others to have views on, I
think we've shaved months and months off that time
frame, so I think that's that's very valuable. Um I
think archives gonna come back with the feeder issue
and the feeder issue should not be driven by what we've
heard is um distributed resources cannot play an ancillary
services if they are required to have a a dedicated
feeder and we and they have to have a dedicated feeder
because it's in ERCOT rules. Well, I don't want the
ERCOT rules issue to dictate that. I want the reliability
issue to dictate that so, or you can change their rules
if they think there is a solution on the reliability
issue. I'm just, I'm just saying that it just shouldn't
be a language, it's in ERCOT protocols, therefore,
that's what we have to do. We've got to look at the
reliability component behind it. The cost allocation
issues, I would say will um you know, has laid out
what I believe is is a a plan for us to have
some final discussions on these things. Um I think
that um we need resources, we need resources and distribution
and transmission and we're gonna get them whether we
want them or not. But what we're trying to do is we're
trying to give certainty to the distribution companies
and their and their distribution customers and were
likewise trying to give certainty to those who are
investing private capital into our system on what they're
going to be paying today and in the future. And both
of them are critically important. Um as we have at
the, at the transmission level, we have our ERCOT who
is uh ensuring that we have open and equal access,
we want open and equal access to the transmission and
the distribution system for these resources in this
system. So moving this ball forward is really a good
thing and and we're gonna get into this obviously more
here in the in the future with with additional memos
but uh I think uh will in the industry have done a
really good job and and mr chairman before other thoughts
the way this all fits together and the framework that
we're trying to drive toward for reliability and maximizing
the amount of the number of the diversity of resources
to help support system reliability in ERCOT is if we
blaze a trail to this point that allows sub 10 Megawatt
D E S Rs. Two interconnected distribution. That same
framework will be uh will be a building block that
uh the aggregated distributed energy resources of less
than a Megawatt will then be able to follow along behind
eventually you do because eventually that will scale
and we must be prepared for those type of resources
and the benefit that they may be able to provide. And
as always reliability is paramount. And so while the
interconnection at the distribution level now for smaller
Megawatt may be shorter and quicker without the studies
as they scale that make it more complicated because
it's a bigger, bigger segment of our generation and
has a bigger impact. And I know, I know y'all were
always keeping reliability as our North star. I commend
you all on the progress made so far. Thank you for
the work. Uh, I'm sure everybody has thoughts, but
I would ask as we go through procedurally as we go
through this, uh, tremendous mental progress. I would
uh, ask that when you start on october 6th or whatever
to start laying out the different pieces, a couple
of things, layout. Uh, and if, if y'all can get a,
an agreement with the initial discussions, that would
be great. Uh that's only a couple of weeks but that'd
be fantastic. Uh, also be prepared to discuss the ideas
or concepts or frameworks that were discarded and not
considered and why? Why so batteries pay nothing. It's
easy. Right. Well,
That's where that's the two
but, and then also let's make the memo and any initial
agreement on the six or whenever the right time is
let's mark that as the starting point of the broader
public discussion. Uh and, and I mean I would with
that, I'll defer to staff and their bandwidth on whether
it should start as a project and then ramp towards
the rule, making, you know, certain mechanisms start
So, so with that MR chairman to comply with your intent
uh we would uh file essentially a framework that would
serve as the building blocks of a straw man that could
be harnessed by staff to set those negotiating negotiating
parameters for negotiation. Um that that all groups
could focus on and and move forward with hopefully
again shaving off that time and providing direction
of staff and helping them. I think your point is that
this is not the end of it, that we're just gonna take
the negotiations to rule and this is, you know, this
is industry coming together, um coming up with a proposed
rule, we look favorably on it will, and I do, um but
everybody has a right to look at that and give us their
input and have those discussions. Absolutely, and very
much appreciate that you can move quicker with fewer
people in the room and get more, get more progress
done. And this is the this isn't the end, this is the
end of the beginning. Great progress so far. But yes
we want to make sure there is robust and as much public
comment and involvement and as much time needed to
accomplish that accommodate it uh and all I know, as
always, y'all will keep reliability as our North Star
and and thanks sir and I and I know mr Carlos, your
experience with OPUC and experience on transmission
and distribution planning, it's going to be invaluable
in this. I will also add another caveat to the policy
framework. The non option entities are incredibly important
to the state of texas control vast swaths in terms
of the regulated transmission and distribution level
uh utility system. Um They will be involved in this
I am I have no intent of forcing them into this and
nobody I think it's gonna force them to do anything
However if we create a framework that uh they could
avail themselves of spreading costs from their distribution
system to transmission in my view. One high level policy
principle that that I will use is that if you do that
then those costs would be subject to accomplish a great
review um by the commission and so that's that's a
trade off to prevent unintended consequences in a dramatic
change in terms of who pays and for what and who benefits
uh in the system. And so commissioner Cobos, do you have any
thoughts? I know you, no I appreciate it, I appreciate
the hard work that you and Commissioner Glotfelty have
put in into this effort. It is a monumental task. Um
Remember our discussions this past fall on adding virtual
power plants to the blueprint as phase one action um
And and the D. G. Work that we wanted to look at
and so I really do commend you on all the hard work
I know you've had a lot of task force meetings and
um it's good to see all this work coming to some, you
know, actual concrete next steps to get something done
within our cod and in the snowy space, you know, I
very much look forward to to your memo that lays out
the framework based on the agreement thus far and be
able to see what what has been agreed to and be able
to provide feedback at that standpoint. I think cost
allocation is a tremendously important issue um as
you know, the retail residential consumers bear most
of that cost and but also ensuring that we open the
gate for new technologies into ERCOT that can provide
reliability benefits, but at the same time ensuring
that we stay on the track for ultimate reliability
as chairman Lake has noted, uh you know, not having
been as intricately involved as you have, I I very
much want to see that the framework to be able to provide
more feedback um and those will be the issues that
that I'll be looking at um based on your memo and it
seems like the agreement that you've come up with just
to make sure um is based on sort of a similar template
that you laid out for the industrials in which the
battery storage folks will pay for some of the um facility
upgrades and then there'll be some allocation is that
is that if there's an agreement, there is an agreement
in possible principle, I don't want to tie anybody
down to say that there's agreement, but the parties
have said that in terms of the parameters of this,
there potentially could be agreement to follow the
path of the industrials interconnecting at distribution
and so uh, we're gonna try that. Okay, now that's helpful
and I was trying to identify kind of what that template
would look like and it sounded like similar to that
is correct. I fully support Commissioner Cobos most
important point of putting all of that in writing you
can, we're going to do it and we'll do it better than
that. But there's a lot there. Um, uh Commissioner
Commissioner Jackson, this is uh, this is what we've
kind of been, there's so many new technologies as you
and I have discussed and as you're taking the approach
of energy efficiency, this is trying to build a comprehensive
grid where you have a firm grasp of the demand side
and the supply side at both the trans mission and now
the distribution level, which is going from the interstate
to the state farm road system and trying to account
for everything that we can bring to bear on the system
for the purposes of reliability. So I do believe once
you make headway on energy efficiency, um, all of this
is gonna start to work hand in glove together and it's
for a more technologically advanced grid, What's important
to have and be able to utilize all the tools in the
toolbox and I think in texas that's one of the things
that we have been um you know, stand out and successful
in being able to do and you know, I like being first
I like being jumping out there and doing things that
other people aren't considering and and getting it
right and then have everybody else come and ask us
how we did it. So I have no doubt our resident engineer
will be valuable contributed to the entire process
Great, all right, thank you all again for the hard
work.
(item:34:53401) I believe this brings us to item 34 regarding electric
weather preparedness standards. We've got a memo staff
filed with a proposal for adoption that we will discuss
but not take up for a vote this meeting. Uh this is
obviously a big topic, incredibly important topic.
And so we want to be very deliberate about our making
sure that all of our stakeholders have adequate time
for input discussion and our commissioners have sufficient
time for consideration of all elements of this, especially
the public comment components. So while we will not
be taking any action on this item today, I want to
open up the floor for discussion and of course questions
from our staff.
Uh well, thank you mr Chairman for laying it out and
opening it up. Um I want to commend staff. Uh this
is an extremely complicated uh, policy that we are
attempting to implement regarding a weatherization
standard uh, that would apply to both resources and
the transmission and distribution system within the
ERCOT ol statewide. Um My I I do have one concern regarding
the inputs chosen to inform the 95th percentile standard in
this rule. Um although ERCOT historical weather study
includes the calculation of the minimum average windchill
in each weather zone. That windchill calculation uh
was not used in the final metric used to determine
the 95th percentile minimum average 72 hour temperature cold
weather standard for generators. Um, so I believe that
failing to factor in wind chill into that average temperature
we are failing to capture the true risk to our generation
resources uh, in a cold weather event. This had come
up in the House State Affairs hearing uh, interest
was expressed from legislators. Uh, it is, it was certainly
reasonable considering the uh, the effects of winter
storm Uri. Um There is, there is an ambient temperature
standard, but again, we have it on the last page of
the rule where the minimum average windshield and each
weather zone would be taken into account by the study
but it is not finally used in the computation of the
95th%ile, which at the end of the day is the, that's
the standard. So, uh, I believe we need wind chill
in there. Okay, third point, so I have some questions
just based on Commissioner McAdams um, statements.
So Barksdale do the NERC draft recommendations on weatherization
include Windchill, Good afternoon Chairman and commissioners
this is Barksdale english on behalf of commission staff
Um, so the, what we know from the Newark drafting process
is that earlier in the spring they released a proposed
rule that did consider Windchill uh, in their calculations
um, recently this week they released another, well
they didn't release if there was a discussion about
that draft rule and Windchill continues to be included
in those discussions. Our latest understanding is that
we expect a new written draft from Newark sometime
in november. Do you feel that some of the Phase two
Well, I guess Phase One and phase two and or both because
we are, we have Phase one. Right, right. Phase two
is kind of a statement around here. Oh yes, yes. Um
right, sorry, Phase Phase One weatherization and or
Phase Two weatherization preparation standards um would
address Windchill and if so how
I'm sorry, I think you're asking if the proposal that
we have before you right now includes Windchill as
part of the standard, Is that your question? No, I
mean what I'm asking is are some of the measures that
would be required to be taken as a result of the Phase
one and Phase two um, standards with some of those
specific measures help mitigate against Windchill,
thank you for the clarification. So yes, we do staff
does believe that the specific measures that are enumerated
in the rule outside of the identification of the ambient
temperature standard would address the impacts of wind
chill on generation resource and also a transmission
substation or switchyard things such as um, you know
in in style calling enclosures around critical cold
weather components, insulation, things of that nature
monitoring the water content inside lines inside the
power plants. Those things will all help mitigate the
impact of wind chill on on those resources and facilities
And I just do want to make sure that it's clear that
this proposal would impact only those entities inside
the ERCOT power region, not for the entire state. Okay
good clarification. So you feel that those specific
measures like the enclosures and the heat tracing and
all that would address windshield, I guess what I'm
trying to figure out here is, you know, if what, what
more are we asking for by including windshield? Like
just the lower temperature additional measures, you
know, kind of scoping that out a little bit more given
Commissioner McAdams valid concerns. So my understanding
is that if we were to include windchill as one of the
parameters that goes into this temperature standard
it would serve as a ratcheting down effect during the
winter seasons. So if you can think of it a little
bit like a math equation we've got, you know, the temperature
set at, you know, value A and then the wind chill is
set of value B. Then that gets you a new kind of
nominal temperature standard served to ratchet down
that, that lower temperature value that we would expect
resources and facilities to prepare to.
So is it fair to say in the weather study that are
caught, worked with climatologists with that you capture
some extreme weather center is backward looking, right
So you have to capture 2011 18 The weather study commissioner
excuse me for interrupting you. Um dates back to they
look back to data as far back as 1895. And um
in some of those years it was a single measurement
in other years, it was daily measurements in another
years, it was hourly measurements. So the data set
that ERCOT used to generate this weather studies is
pretty robust from, from staff's vantage point,
but I think what I'm trying to assess here is then
okay if they're looking backwards and getting all those
years back to the 18 hundreds, it is capturing winter
storm Yuri acute issues but it may not be capturing
the full impact of the windchill. Winter storm Uri
in ERCOT weather study, they examined minimum, it's
called the dry bulb temperature So just the actual
reading of the temperature value without considering
the moisture in the air or the wind speed. They also
looked at the wet bulb temperature which is the dry
bulb temperature impacted by moisture in the air. And
they also considered wind speed. So all of those values
are included in our costs weather study that was finally
published in july and I don't mean finally published
like it was late. It's just that, that was when the
last version was filed. And um, staff chose to pursue
a temperature standard that considers only the dry
bulb temperature as a balancing point between pushing
our industry. We think pretty hard to get ready for
some pretty significant events both in the summer and
in the winter while also keeping an eye on the overall
age and economic um efficiency of some of the older
generating units in the power region because we did
not want to go so far as to potentially force early
unit retirement and cause other kinds of capacity issues
for, you know, in the near term future.
So that leads to base to market redesign um, not today
but, but so that's the balance staff. Yes sir. Okay
fair enough. And and I I support that support reviewing
that balance but look, spark spreads in the ERCOT power
region are 100% more at this time than they were last
year. Those units have the money to invest in their
systems today and um, they could make that enhancement
Uh, it's a value judgment on their part and I believe
the system should impose a standard ultimately look
in our own rule. We ask that the minimum average windshield
in each weather zone be accounted for in the weather
study, What's then included in the 95th percentile include
the true temperature. Um, and if if it has a ratcheting
effect and I understand that it may be litigated at
Nerc, but good luck with that. I mean it's the true
temperature. If Nerc is asking you to harden to a
standard that they believe you're going to achieve
then you need to harden to that standard. It's a part
of your cost of doing business in the state of texas
and we have recourse if you seek to retire your units
So I, I believe we need to look hard at this.
That that's what we're doing the discussion, not taking
action today, but oh, there may be certain costs able
to be included in operations of the company, but things
like an R M R R a death knell on investment, we
don't ever want to ask a company or forced use force
of law to keep a company losing a private sector company
losing money. And I didn't say I just, that's what
people here a lot. And so I want to, I don't think
anybody's intention is to force companies to lose money
operating in texas if I may Commissioner McAdams the
reason why we included are asking or cut to study things
beyond just that dry bulb temperature is precisely
to TF conversations like this so that you all stakeholders
staff can provide you with input and insight as to
what the best standards should be going forward Today
If you, you know, or on the 29th, if you should choose
to take this rule up, you could approve this rule as
drafted and then the next time around we would have
more information about how windchill is impacting our
generation resources in particular and continue to
consider that question. I'm not advocating one way
or the other, I'm just trying to um well, you know
we wanted to make sure that you have the information
available. Steps done an excellent job, you've done
an excellent job on this. I mean you try to thread
a needle and I'm just trying to tell you in my view
that the needles a certain size and there's five opinions
but no, I appreciate it, I do appreciate your statements
and and certainly I do want to echo all your hard work
on this very robust lengthy role. Um it is tremendously
important um as we move forward to have weatherization
standards, not only for the winner and and be more
comprehensive as you move forward, Phase two and certainly
hear your concerns um and also for the summer as we
move forward, um you know, one thing you mentioned
that I think just now with respect to uh you know,
approving something and then, you know, a little bit
down the road, factoring in other factors, I think
this has to be an evolving situation, um as we face
more volatile extreme weather and we get more data
that we continue to look at our preparation standards
not just you know, we got phase one, Phase two down
let's continue to gather data, let's continue to be
um proactive in ensuring that we have a resilient power
system from generation to transmission distribution
systems and I recognize the companies need certainty
and we will have certainty with respect to phase one
and phase two, but at the same time we must remain
diligent and make sure that we're looking at um the
evolving the evolving nature of weather and other data
points that we may collect in the future. We certainly
have a lot of really good data points looking back
to 2011 2018 and 21 even in the summer 2011 2019 this
summer. So I appreciate that statement and I think
that's something we gotta do. I think we heard a State
Affairs Committee hearing that, you know, when you
look at weatherization, sometimes it could be a living
document, you know, and continue to build upon what
we have here at the commission and I would say that
the rule not only considers it from a weather data
standpoint, but also from a technology and innovation
standpoint because we chose language um that requires
the entities to prepare their resources and facilities
in a manner that could be reasonably expected to ensure
sustained operation of those resources and facilities
as technology becomes more widespread and more available
it becomes more reasonable to expect those technologies
to be implemented at the resource level and at the
facility level. So we would hope to see that the entities
are continuing to look at those innovations and technologies
and continue to invest in their plans to make sure
that they can operate through some of the worst weather
that we get. I think that's an excellent point because
we kind of focus on the standard but I think what is
um you know, really such a great work effort of what
the staff has done on the weatherization is the process
which is going to help us kind of moving forward manage
this risk. And so we've been very prescriptive about
the the expectation going in to prevent a co weather
event by going in and and very specifically um outlining
the things that we feel like now our best practices
and also um you know, stating it in such a way that
it's clear that it's something that we expect to be
done prior to the winter season or prior to this summer
season and that there's an expectation process throughout
both of those periods as well as you know, in the unlikely
event that you did have a weather related event and
you did have a failure whether it was on the transmission
side or on the generation side that there would be
a process um you know, that a qualified professional
engineer would conduct this root cause analysis of
the failure and then develop what the corrective action
would be to address the failures kind of going forward
and that in and of itself I think will drive some of
the things that you you're kind of talking about, which
is okay. Do we need to as a result? Maybe if some
of these um findings that we have from either what
the company does internally through its own root cause
analysis, maybe not necessarily driven by the rule
but if you in effect get the street, the three strikes
that you refer to in here and you move forward with
the more formal process, those type of corrective actions
will come forward and will be documented. Um There
was one thing though that I kind of noticed was that
um in the in the rulemaking and this is really just
for discussion, but um that there is a requirement
um for uh the generation entity or the or the tSP to
submit the engineer's assessment to the commission
and are caught within 15 days, calendar days of receiving
the assessment. However, there's no timeframe specified
as to how long the engineer has to conduct the actual
root cause analysis and uh of course I understand after
you know, our further discussions that we're giving
deference as to what this reasonable timeline would
be um however, kind of given my background as an engineer
and also in the manufacturing world, my expectation
would be that the root cause analysis would be submitted
expeditiously and is recently uh practical as possible
And you know, the the whole rationale behind that is
that you do the root cause analysis as quickly as you
can to garner those benefits, identify the cause, correct
them and then um hopefully not have the same incident
happen again. But um and and also given, I guess that
market must notify uh the generation entity as well
as T. S. P. And the commission staff of some sort of
repeated or major rather related forced interruption
of service. Um, I would expect that this commission
and our enforcement division uh will be paying close
attention. And uh I would like to kind of ask you,
isn't that right? That y'all will be paying close attention
to 100%. Absolutes. It's an important part of the statute
that the legislature wants us to require these independent
analyses to occur if there are significant or repeated
problems. And my staff will will most definitely be
paying attention as soon as we receive any kind of
notification from market about a failure, repeated
or a major failure. And we will make sure to ride herd
to get those analyses done and submitted to the appropriate
folks on time. Just make sure you got it right. You're
you're acknowledging that we're just because we're
not putting a hard and fast number on the amount of
time after the incident and before the root cause analysis
is initiated, there's, there's a requirement on the
back end. Once it's completed, you got turned back
but there's no number of days on the front end, by
which time it must be initiated we've got different
types of resources, different technologies and so were
being deferential to the industry that that's hard
to put a bracket on what I'm hearing from you is that
you expect the industry to not use that or abuse that
privilege to ignore delay root cause analysis after
an event. Is that fair? Yes, I expect them to act in
a reasonable manner as I think they've demonstrated
in the past agreed and wholeheartedly agree with that
assessment and I know, I know staff will be on top
of it and I think every think everybody up here agrees
with the fact that we'll keep a close eye on these
in the unlikely case we do have an event, we'll be
watching closely to make sure that Root Cause analysis
is initiated as soon as reasonably possible.
Thank you.
I just had a few things. First of all I wanted to
say, I've had great discussions with staff on this
I appreciate the time and effort that uh we, we've
in the discussions that we've had in these areas, minor
questions and areas are kind of pretty nuanced. Um
they're not dealing with the weather number the 99
through the 95th percentile but um there were a couple
of things that I just, I wanted to bring up for us
to think about. Um I've already brought them up with
staff but one of them would be um our future inspections
gonna be done by the texas regional entity or ERCOT
when the federal nerc guideline passes. Okay, so what
we're gonna do is we're gonna have a Texas standard
that we're passing that we hadn't have had an effect
and will have an effect. This Phase two component Nerc
is a year behind us. Once they pass a federal standard
then the texas regional entity will be responsible
for ensuring compliance with that. So what I'm thinking
um or bringing up is that we want to make sure from
an industry perspective that they know what to comply
with and they won't be um having multiple inspections
from two different levels on two different standards
and that our consumers don't pay twice. So um just
I throw that out there for something that we need to
be thinking about in the future as that works out um
and they're they're become a state standard and a standard
for consideration um secondly, um I just wanted to
for some reason I just felt so strongly about saying
this and that was, there were a couple of comments
that we received that were um that said that our rules
should be consistent with our ERCOT protocols and I
thought that really believe strongly that that's the
other way around that ERCOT protocols ought to be consistent
with our rules and then as we modify and make reliability
number one, the burden is on them. On ERCOT to make
it consistent with us, not the other way around that
tail does not wag. That's right, thank you. Uh, and
then finally, the point that I wanted to make was that
this doesn't apply just to cold weather. This applies
to hot weather too. We have the standards based structure
that you all have put together I think is really good
but we have some types of facilities that have hot
weather challenges as well and they are not exempt
from understanding what those are and that they ought
to be um, they need to use their efforts um, to solve
those problems. Specifically when we had really hot
weather in july, you all might remember that. Um, we've
heard, I've heard some stories that wind turbines were
shut down because the weather, the temperature was
too hot. Uh, if they're cool weather, if they're cooling
packages that need to be added inside the vessels,
that would be a component that would be covered under
this, under the hot weather component and would be
required, just like cold weather would um, and I think
that the last area where I would just request um, a
discussion with ERCOT or with the state climatologist
and that deals with wind turbines and that is it. Trying
to better understand what the difference is between
the temperature at ground level and 100 meters. uh it's a
significant difference. But there may be a big temperature
difference in that there may not be, but we we ought
to be able to at least understand what that difference
is, 100 m up versus ground level. So if we can get
that at some point in time, that would be great. We'll
certainly speak with their thought about that. I do
call from some of our prior workshops that there are
certain newer technologies which include weather stations
inside the individual cells. So that data would be
the more relevant data to look at rather than the individual
weather station inside the larger weather zone. Is
it is it fair also to take a closer look at the
language in there and if it's the ambient or anything
else like whatever, whatever is it assumed that when
we say the temperature at the operating location means
100 and 50 ft in the air and that's what they we
expect them to match. That's that's a question or maybe
a point of clarification to make 20 29th chairman.
The rule does specifically say that the resource has
to be prepared to the hotter of either the data that's
provided in the ERCOT weather study or The temperature
at which that resource has previously been able to
sustain operations may be worth clarifying that, that
last part means at 150ft off the ground. If that's
what we wanted to open question, we'll give our rule
a close reading to make sure that it aligns with that
intent before next open meeting. I think most of those
resources have whether data on top Good point, appreciate
it. I have one just specific question or thought as
I was looking for wind throughout this entire um proposal
on page 181.
Um So the
and I may be looking at a different version of the
proposal but it's essentially subsection C subpart
a little I
I'm sorry and you all may be looking at what was filed
I'm looking at the red line version that that helps
me more but it's subsection C on whether emergency
preparedness, reliability standards for generation
generation entity and then it's um subsection star
I guess one subpart a little I
where it says installation and maintenance of adequate
windbreaks. Yes. For resources susceptible to outages
or d rates caused by wind. There was language in here
that said installation um basically there was language
taken out said after windbreaks and other structural
preparations as needed that was taken out and I'm wondering
why because I know the wind breaks have been helpful
and we saw that you know some benefits I guess of it
um during winter storm landing they're helpful for
preventing you know obviously wind coming into the
chill but if there's other structural preparations
that should be made based on your knowledge of your
geographic area in the state where you may get a little
bit more of a chill, then maybe we should leave that
language in there to provide some flexibility and in
there. I don't know if you want to provide any thought
on why you may have taken it out.
So the specific language was thought by the rulemaking
team and through consultations with ERCOT weatherization
team, um, that it was a bit redundant given the specific
nature of this little I paragraph talking about windbreaks
that they're windbreaks encompassed the structural
elements to a windbreak and that there weren't other
kinds of structures similar to windbreaks that would
make that little clause meaningful. Okay, so there's
just not other options besides windbreaks out there
that would help mitigate wind and windshield. I can't
answer that question specifically. So as more things
come out, technology from a technological manufacturing
standpoint, there could be, I just don't want to, I
was thinking about wind and wind chill throughout this
entire proposal, I was really kind of scrubbing down
the rule and then I saw that language had been taken
out and I thought, well, I think it'd be helpful to
have in there just to provide flexibility for the future
as opposed to just say windbreaks period.
I know that doesn't address the whole windchill issue
over here, but it's, you know, something that give
us flexibility in the future of, there's, you know
other measures besides windbreaks that can be used
well. and, and look what what ultimately gives me concerned
is we're giving a little bit of daylight here and we're
giving a little bit of cover to the operator and and
it's stressed in the rule that they need to take reasonable
efforts to manage against a, uh an event. And um, but
by by taking out language for redundancy and it's my
fault, I highlighted the the nuance between including
in the study and actually incorporating the metric
in the 95th percentile. It's giving them daylight to
say, well, I'm not gonna put that foam around that
thing, or, uh, and it's it's sitting up in DFW where
it gets really cold or um, you know, uh, out in the
far flung areas of west texas where I grew up where
it gets really cold and that wind will freeze it quickly
So, um, I worry about that. Well, the, at the high
level make two very good points that one in any of
our rulemaking want to minimize loopholes and opportunities
for abuse thereof. And in this particular rule making
we want to address the most realistic operational reality
at that location and balance it with the economic reality
You know, we're not gonna do that. We don't want to
do that 100 percentile plus 10, you know, so there's
those are two very fair points. It's most likely scenario
that they're going to face and that's the it's not
an easy balance, but those two hugely important parts
of our job on this road and commissioner, we also do
have the enforcement mechanism available to us. So
it's not simply a matter of the entity saying, well
it's unreasonable for me to do that. It will be verified
if there is a failure that's caused as a result of
a weather emergency. And the subsequent investigation
reveals that that failure occurred due to poor preparations
or preparations that were unreasonable because they
didn't install the phone. For example, that's something
that will be revealed through an investigation and
we do have the enforcement mechanism to come behind
and make sure that individual actions and individual
events are occurring in accordance with the policy
direction that you all are approving or we hope that
you will prove at some point. And I didn't raise this
provision because I think it will address windshield
I raised it because I just don't want to, you know
tie our hands. Like, I mean, if you find it just as
easily as you said right here that, you know, you went
and did an investigation and they look at the rule
and said, well, you didn't require anything but a windbreak
taking out this language would, you know, you know
we were overly prescribing some things, right? So that's
why I thought that language would be helpful in there
So that there is some flexibility in allowing um other
things besides windbreaks to be used to break against
wind and wind chill and that way you have more flexibility
from an enforcement standpoint in the back end, You
know, I think these are all very valid points of discussion
and in my mind remain open questions. None of this
is decided today and accept that MS Jackson's enforcement
I think everybody's on board with that, that's but
everything else is an open question, which is why we're
taking the time to be deliberate and thorough in this
Um And I think it's also fair on any of the points
discussed, especially the Windchill still an open question
in my mind, are there is there any further analysis
or a B comparison or anything else? Uh You wanna request
from staff that to provide more context? We're gonna
be thinking about just any time Enhancements to language
that could be considered um to reinforce to where there's
not, there's not the daylight. Uh and again, I know
you'll catch it on enforcement, I know you'll catch
it after, but in 2011, remember the whole valve thing
somebody can go out and bang on a valve, you know,
at the right time in a very cold, very windy event
Um and it froze solid, but you've taken great effort
to try to be proactive rather than reactive. Um So
we'll try to think of an enhancement that furthers
that effort.
And staff of course will be available. Park still throughout
some A's and B's and formulas and get nervous on that
But the who knew math was part of the job? No. Um
All right. Uh unless there any other points of discussion
I think this is exactly why we're taking the time to
do this. Most importantly, think Mark smell smells
and all the staff that dug into this. This is a huge
huge topic, hugely important for great reliability
and as we heard Tuesday from the House and frequently
previously from the Senate our Legislature state leadership
are watching closely and tens of millions of people
are relying on this. So thanks all. Thank you very
much. Look forward to follow discussion a few weeks
Thank you. Thank you guys.
All right.
I think we've got a couple other consent items, but
after that, I don't have anything else for the remainder
of agenda. Mr. Anything else on your list?
Everybody good. Alright. In that case we have no further
business before the commission today. So this meeting
the Public Utility Commission of Texas is hereby adjourned