WEBVTT

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(item:0.1:Chairwoman Jackson calls meeting to order) Good morning. This meeting of the Public Utility Commission

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of Texas will come to order. To consider matters that

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have been duly posted with the Secretary of State for

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August 24, 2023. For the record, my name is Kathleen

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Jackson and I'm joined by Will McAdams, Lori Cobos and

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Jimmy Glotfelty. Before we get started, I just wanted

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to recognize Commissioner Glotfelty. For being selected

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by Governor Abbott to lead a new advanced nuclear reactors

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working group. Uh the PUC will establish which we will

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be discussing later in the, in the Agenda. So congratulations

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so much.

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Also for planning purposes, we'll be going into Closed

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Session at 11:30. If we have not finished the Agenda

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by then, we'll recess at 11:30, come back after Closed

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Session to finish the remainder of the Agenda. Shelah, 

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please walk us through the Consent Items on today's

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Agenda. (item:0.1:Shelah Cisneros with Commission Counsel lays out Consent Agenda) Good morning Commissioners. By individual ballot

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the following Items are placed on your Consent Agenda

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Items: 2, 3, 5, 7, 8, 15, 18, 20, 21, 22 and 38. (item:0.1:Chairwoman Jackson asks for motion to approve items on Consent Agenda) I will entertain

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a motion to approve the items just described by Shelah.

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So moved. Second. We have a motion and a second. All in favor, say

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aye. Aye. Motion passes. Additionally, Items 6 and 9

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will not be taken up. (item:1:Chairwoman Jackson lays out instructions for Public Comment) Let's begin with Item 1, Public

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Comment. Oral comments related to a specific Agenda

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Item will be heard when the item is taken up. This

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is for general comments. We, when we get to oral comments

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on specific items, stakeholders should not approach

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the table unless oral argument has been granted or

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they have been invited by a Commissioner. Speakers

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will be limited to three minutes each. Shelah, do we

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have anyone from the public signed up to speak? (item:1:Shelah Cisneros confirms members of the public who signed up for Public Comments) Yes

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ma'am, we have two people that have signed up to speak.

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The first person is the first initial, S. Smith. Okay.

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Would you please come up and state your name and organization

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for the record? (item:1:Stacey Smith for Public Comment) How you doing? Stacey Smith, can you

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hear me? Um, I'm not with an organization. I'm a customer

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uh, here in Texas. Wanted to um approach the Commission

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because I've been having a little bit of challenge

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trying to get one more data point um, before I file

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a complaint with the uh PUC. And um, I'd rather not

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rely on my rabbit's foot and just simply turn in the

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complaint. Um I've, I've learned some years ago that

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the rabbit's foot tend not to really come through when

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you really need it. So, um I'm being told that I have

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2 meters associated with my usage and one Easy ID.

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And that both meters were installed at the same time.

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So if it's possible um through the Chair. If you could

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uh help me by putting me together with some Staff member

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that could help me figure this out. I sure would appreciate

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it. Um I do understand from 10 minutes before the meeting

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started uh upstairs on the 8th floor. There's a

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records department and they have some information that

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may be useful. Um I understand tariffs is one place

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where it may explain some of this. But um I'm not sure

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yet because I haven't had a chance to look at that.

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So that's pretty much it. (item:1:Thomas Gleeson, PUC Executive Director's guidance and information for Mr. Smith) Commissioners, um we'll connect

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Mr. Smith with Mike Hoke, our Director of Public Engagement

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and uh we'll lead him to down the right path. Great. Okay, thank

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you. Thank you for being here. Thanks for coming forward. Thank

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you. Thank you.

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All right, the next person who decided to speak is

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Stephanie Mace.

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Woud you please state your name and organization for the

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record? (item:1:Stephanie Mace with AARP Texas for Public Comment) Thank you. My name is Stephanie Mace. I am

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with a AARP Texas. Good morning. Thank you for allowing

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me to be here an opportunity to speak. On July 26,

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the Texas Consumer Association AARP Texas submitted

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an emergency petition in Project # 55286. In which

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we respectfully requested that the PUC immediately

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suspend the current provisions of substantive Rule

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25.295. Pertaining to disconnection of electric service

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during extreme weather. Instead, we asked the Commission

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to impose a complete moratorium on all electric service

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disconnections of residential premises. For the past

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due bills until at least September 15, 2023. With the

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extreme heat our state is experiencing a complete

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disconnection moratorium is a matter of public safety.

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Living in low quality, inefficient housing with no air

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conditioning or refrigeration for food and medicine.

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Could be a death sentence for seniors, young children, medically

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vulnerable citizens and others. It is also difficult

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for customers to know when a disconnection ban is in

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effect. And impossible to predict when the ban might

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be lifted and the power could be shut off. For example

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last Wednesday morning, ERCOT indicated that disconnections

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due to non payment could resume in at least 73 Texas

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counties. Later that evening just 8 hours later

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extreme weather advisories were reissued and disconnections

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were halted again in the majority of these counties.

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In those 8 hours potentially thousands were left

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without electricity right before temperatures and the

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heat index went back into the triple digits. In emergency

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petition number, Project # 55286. We also urged the Commission

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to direct the state's transmission and distribution

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utilities and retail electric providers. To report the

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number of current residential electric accounts disconnected

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for a lack of payment. So we have a better idea of

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the magnitude of households impacted throughout the

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state. I'm here today to remind you of our request

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since no action has been taken. I have also brought

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the names of 7,700 AARP members throughout the state

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that are in support of our petition. Um once again

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we encourage you to please support our, our petition.

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And consider a complete moratorium on disconnections.

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We appreciate your consideration and thank you for

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your service. Madam Chair, may I ask you a question?

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Please. What happens on October 1, if there's a sudden

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heat wave? That's a great question. I think that is

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exactly the question that we have in front of us. We

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know that potentially the weather the hot water, hot

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weather could continue on past September 15. And we

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think that is something that should continue on, but

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we think the rule definitely needs to be changed.

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So you would ask us to rescind our rule. Um

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place a broad-based moratorium through a date certain.

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Or it could be extended past that date. That is just

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a, a set date for right now, knowing that potentially

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that's generally where the weather is cooler. But knowing

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that the weather could continue to be hot past that

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date. But if we're wrong and some sort of snap heat

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wave does happen beyond the date certains. Those consumers

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would be exposed, would they not?

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(item:1:Stephanie Mace responds to Commissioner McAdams' question of a certain date) Yes. But I think the, the question is right now

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we have 100 degree weather. And, and even if the weather

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goes down to 90. Um, those disconnections are

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still in place. Um, and disconnections are continuing

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to happen and there's just unknown when those disconnections

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are going to be halted. And so at least during this

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extreme weather, we are hoping action will be taken.

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And then items could be reconsidered once weather is

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cooler or if a heat wave continues on past 

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September 15 date. We're looking at kind of the immediate

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weather right now.

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(item:1:Commissioner Cobos' comments to Stephanie Mace on moratoriums) Can I ask a question as well? Um, so it sounds like

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what I'm hearing from you is there's a communication

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problem. Like you don't really know like you know

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you. There's a moratorium that we have um our rules

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require moratoriums under certain conditions. But you're

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also kind of having trouble keeping up with when they're

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in place, when they're not in place. Um is there a way

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that we can better communicate with you, so you can

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communicate with your customers, and we can communicate

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with customers. Because you know it, it's sort of

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you know, you got to meet certain criteria to have

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a weather moratorium in place and not have disconnections.

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And it sounds like we're in the moratorium, and then we're

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out of the moratorium, and then we're back in it fairly

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quickly so. (item:1:Commissioner McAdams' thoughts on moratoriums) And, and this will apply to cold weather

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as well. It's not about this heat wave, it's about

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February. I mean I, I worry about uh snap. So date

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date certain conditions are, are problematic. I mean

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you, you can't you can't adapt to the unknown at that

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point in shoulder months. And we're in an El Nino pattern,

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uh it could be a warmer than average Fall. Um, I mean

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this, this is what we're all doing up late at night

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is checking weather forecasts. Trying to figure out

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okay when's this gonna stop? And I just, I worry that

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we're gonna get caught and these consumers could be

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harmed.

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(item:1:Commissioner Cobos' response to Commissioner McAdams comments) So we've done periods of, of disconnections during

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the pandemic, right? Um for x amount of months where

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it ends at sort of a date certain. Um And, and so

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I think that's your request? Correct. Okay.

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Thank you for your consideration. I'm happy to talk

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offline, if that would be helpful. Um thank you for

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your reconsideration. Okay. (item:1:Connie Corona with Commission Staff on moratoriums) Commissioners, if I may add to

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your conversation. Um some of the vulnerable populations

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that our speaker mentioned. Um can, can be assisted

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through numerous programs that we have available for

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financial assistance, for bill payment plans, things

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like that. And they should contact their electric provider.

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They can call 211 for social services that are specific

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to their local area. And of course they can call our

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customer protection division um for help navigating

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those resources. (item:1:Commissioner Cobos comments on where customers gain information for resources) But they gotta really know to call

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211 and to be able to. Many people out there don't have

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social media and don't have, just have no idea who

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we are right? And so how do they find those resources?

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We've got to push the information out via you know

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social media outlets for the ones that do have it.

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But how else can we get that information out um to

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the consumers is, is the question, right? Because it

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it is difficult to get out to just, you know, certain

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populations, certain consumer populations. So that's

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something we still need to continue to work on. Um

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not only through social media but you know, maybe sending

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information to community action agencies or. And possibly

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to organizations like TDHCA who handles rent

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assistance programs, uh weatherization programs also

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on homes. Um yeah that's, that's the exact information

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that Connie is referring to. It's the LIHEP money, which

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is the Low Income Heating and Electricity Program.

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So that's federal funding that comes to the state um

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to TDHCA and they have those programs. But getting

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the information out about those programs and also 211.

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Has local organizations that are able to provide um

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assistance as well through nonprofits in the community.

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(item:1:Stephaine Mace's comments on assistance programs) If I can may also say. I think a lot of those utilities

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system assistance um programs are all tapped out. Just because

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so many individuals have needed them. So many individuals

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have been struggling over the past year with the high

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cost of food and the rising cost of affordable housing.

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Um there, there's very little funding and opportunities

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out there. (item:1:Connie Corona's comments on Commission's rules on assistance during emergency conditions) And, and to be clear our, our rules require

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um payment extensions and payment plans during times

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of emergency weather conditions. Um and, and the reason

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the items that you mentioned Commissioner Cobos. Um

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as you recall, that's one of the primary reasons we

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created our Office of Public Engagement this time last

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year. I believe Mr. Hoke will be meeting with AARP um next

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week to discuss those details. Yeah, but getting out

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that information on our rule requirements from the

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Commission. But also maybe the REPs would be important

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right? Because how do you really reach the customer

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is, is the kind of question so. Thank you. Thank you.

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Thank you so much. Okay. Moving on Items 2 and 3

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were Consented. Next up is Item No. 4. Shelah, 

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will you please lay out this Item? Yes, ma'am. (item:4:Application of Oak Bend Homeowners Water Supply Corp. for authority to change rates) Item

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No. 4 is Docket No. 54153. This is the application

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of Oak Bend Homeowners Water Supply Corporation for

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authority to change rates. Before you is proposed order

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that was filed on June 29. No corrections or exceptions

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were filed by the parties. A Commission Counsel memo

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was filed recommending changes to the proposed order.

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And Commissioner Glotfelty filed a memo on this docket.

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So Commission Staff filed a memo requesting the Commissioners

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delay the discussion of this docket. And reschedule

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it to the next open meeting. So Staff can determine

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the best manner to address the issue of the name change.

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Commissioner Glotfelty, you filed a memo. Do you have

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thoughts on this? (item:4:Commissioner Glotfelty's thoughts on the memo and delay until next open meeting) Yeah, I believe that, that's the right

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thing to do and would encourage us to pass this time.

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And let the Staff and other parties figure out what

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the best route is to get this name corrected, consistent.

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And I'm happy to delay it. Okay, very good. Okay, that

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takes care of that, we can delay that to the next meeting.

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Yes, ma'am. Okay. Item 5 was Consented. Item 6 will

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not be taken up. Item 7 and 8 were Consented.

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Item 9 will not be taken up, but I don't have anything

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on 10 or 11 unless y'all do. No ma'am. Uh, next up is Item

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No. 12. Uh Shelah, will you please lay out this

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Item? Yes, ma'am. (item:12:Application of Oncor Electric Delivery Co. for authority to change rates ) Item 12 is Docket # 53601.

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This is the application of Oncor Electric Delivery

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Company for authority to change rates. Before you are

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two motions for rehearing on the order. On rehearing

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that was filed on June 30. The two motions were filed

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by Hunt Energy Network and a joint filing by team and

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ARM. The Commission voted to place the motions for

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rehearing on the Agenda. For the sole purpose of considering

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whether to extend time to act on the motions for rehearing.

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So, do we have any thoughts on this one?

00:14:39.509 --> 00:14:43.460
(item:12:Commissioner Glotfelty's thoughts on rehearing) I guess my view is that I would hope that we could

00:14:43.469 --> 00:14:48.619
extend time to act on a motion for rehearing. Extend

00:14:48.629 --> 00:14:51.658
to the maximum extent permitted by law. I'm a little

00:14:51.668 --> 00:14:56.229
confused on some of the things here. I really what

00:14:56.239 --> 00:15:01.168
we discussed in this specific rate case was not trying

00:15:01.178 --> 00:15:04.658
to piecemeal all of the issues that.

00:15:06.190 --> 00:15:10.070
What we really said was that rate cases aren't the

00:15:10.080 --> 00:15:14.139
best place to make policy across the Board. Which I'm

00:15:14.149 --> 00:15:17.989
consistent with. What I'm having a hard time understanding

00:15:18.000 --> 00:15:21.460
is where we are in the process on all of those issues?

00:15:21.469 --> 00:15:24.450
In its independent docket in the independent process

00:15:24.460 --> 00:15:28.379
And just want to, I want to use this as a little

00:15:28.389 --> 00:15:32.058
bit of pressure that we get these issues resolved. Because

00:15:32.070 --> 00:15:35.509
it's important that we get as much generation on the

00:15:35.519 --> 00:15:39.558
system as possible. So my view would be, if we could

00:15:39.570 --> 00:15:43.109
vote to extend, I'd be appreciative. I think it's just

00:15:43.119 --> 00:15:47.038
for another month or so. And, but I'm open to discussion

00:15:47.048 --> 00:15:52.629
with other Commissioners. (item:12:Commissioner McAdams thoughts on placing a hold on rates) Uh but again uh um so one

00:15:52.639 --> 00:15:58.019
that those impacts uh ongoing rulemakings and projects

00:15:58.029 --> 00:16:03.048
at the Commission. Uh where we are attempting to resolve

00:16:03.058 --> 00:16:07.359
controversies around those policies. Um so would you

00:16:07.369 --> 00:16:13.288
hold up the uh finalization of, of an order on rates

00:16:13.298 --> 00:16:16.750
for our largest utility? I don't really want to. But

00:16:16.759 --> 00:16:21.879
I, I want to um I, I mean. That's the obviously

00:16:21.889 --> 00:16:27.960
the, the uh this doesn't stop their business. Um certainly

00:16:27.969 --> 00:16:31.239
is the definition of regulatory lag is lagging the

00:16:31.250 --> 00:16:35.918
the flow through of was it 9.7% rate? (item:12:Commissioner Glotfelty's comments on rulemaking for generation and storage) Listen, and I can be

00:16:36.070 --> 00:16:38.250
I can be happy doing this if we get the commitment

00:16:38.259 --> 00:16:40.298
that we're gonna continue to push for the rulemaking

00:16:40.599 --> 00:16:44.500
on generation and storage at the distribution system

00:16:44.509 --> 00:16:49.009
be worked on very quickly. It is a, you know, when

00:16:49.019 --> 00:16:51.889
we have these challenges, our system is changing dramatically

00:16:52.070 --> 00:16:54.869
we need all of these resources available and we need

00:16:54.879 --> 00:16:57.690
the rules of the road to be defined specifically and

00:16:57.700 --> 00:17:03.099
statewide or across ERCOT. And we need to do this expeditiously.

00:17:03.109 --> 00:17:07.969
It's already been over a year and that's not acceptable

00:17:07.979 --> 00:17:13.009
to me. So if we can get among the Commissioners a commitment

00:17:13.019 --> 00:17:16.078
that we will continue to push for this on ERCOT wide

00:17:16.088 --> 00:17:18.459
basis in this rulemaking. Then I'm happy to

00:17:20.009 --> 00:17:24.699
not extend time on this and to complete the, this rate

00:17:24.709 --> 00:17:27.500
case. (item:12:Commissioner McAdams on rulemaking for generation and storage) Well, I'm looking down that side of the dais because

00:17:27.509 --> 00:17:30.180
you know, where I am on that and I'm driving hard. And

00:17:30.390 --> 00:17:33.759
our Staff still doing good work and, and we're having products

00:17:33.769 --> 00:17:37.608
come out of that um but anyway. (item:12:Commissioner Cobos thoughts on rulemaking for generation and storage) Well um, Commissioner

00:17:37.920 --> 00:17:40.400
Glotfelty, I certainly appreciate your perspective.

00:17:40.410 --> 00:17:43.400
I know you have been leading the charge on these policy

00:17:43.410 --> 00:17:45.269
issues and they're important to you. And they, they

00:17:45.279 --> 00:17:48.199
are important for, for the State, for the Commission

00:17:48.209 --> 00:17:50.529
and ERCOT to be considering. As, you know, we evolve

00:17:50.539 --> 00:17:53.799
into um sort of a different market with a lot of

00:17:53.930 --> 00:17:58.348
you know, battery storage facilities on it. Um, and

00:17:59.088 --> 00:18:01.789
my concern is, is yes, kind of what I think Commissioner

00:18:01.799 --> 00:18:04.848
McAdams was saying is holding up the rate case. Um

00:18:04.989 --> 00:18:08.059
you know, while Oncor can continue to operate. We,

00:18:08.068 --> 00:18:11.328
we do have to get them going in a place where um

00:18:11.338 --> 00:18:14.189
they're, you know, starting to recoup their costs that

00:18:14.199 --> 00:18:16.769
they've invested in the state. Um and over the last

00:18:16.779 --> 00:18:19.449
several years and, and so during the historical test

00:18:19.459 --> 00:18:21.989
period. So I, I don't want to hold up the rate case.

00:18:22.209 --> 00:18:24.689
I feel like, you know, your issues are important. They

00:18:24.699 --> 00:18:27.890
need to be looked at in a rulemaking. I'm also sensitive

00:18:27.900 --> 00:18:31.098
to Staff's um workload right now. We've got so much

00:18:31.108 --> 00:18:34.259
on our plate. Um and quite frankly, what we do on those

00:18:34.269 --> 00:18:37.390
issues at the Staff, you know, the rulemaking process

00:18:37.400 --> 00:18:40.269
level is, is also potentially being impacted what ERCOT

00:18:40.358 --> 00:18:43.289
is doing on, on issues with NPRR. So this is a

00:18:43.299 --> 00:18:46.910
pretty complex issue. That I'm, I'm concerned may not

00:18:46.920 --> 00:18:50.689
be um resolved any time soon because it's complex and

00:18:50.699 --> 00:18:53.420
there's a lot of moving parts. And I wouldn't want to

00:18:53.430 --> 00:18:57.459
hold up the rate case um to let those issues, you know

00:18:57.469 --> 00:19:00.348
kind of get. I, I hear what you're saying, you're not

00:19:00.358 --> 00:19:02.430
asking for them to be fully resolved. You're just asking

00:19:02.439 --> 00:19:05.868
for them to continue to be a priority. And I think

00:19:05.880 --> 00:19:08.979
that we need to look at that those policy issues holistically.

00:19:08.989 --> 00:19:12.539
And um you know, have continue to do the good work

00:19:12.549 --> 00:19:15.259
you guys are doing. And, and try to manage that with

00:19:15.269 --> 00:19:17.789
all of the work flow we have going on right now. But

00:19:18.309 --> 00:19:22.009
um I feel that just looking at it on a, on a

00:19:22.049 --> 00:19:24.469
you know, on its face right now You know, the parties

00:19:24.479 --> 00:19:26.789
did not raise any new arguments that we haven't already

00:19:26.799 --> 00:19:29.130
considered in our final order and last order we're

00:19:29.140 --> 00:19:34.890
hearing. So I, I would not extend time to act in and

00:19:35.318 --> 00:19:38.828
today's jurisdictional deadline. So not take any action

00:19:38.838 --> 00:19:41.439
and um go ahead and let those motions for a hearing

00:19:43.358 --> 00:19:48.750
be handled through operation of law. And we can continue

00:19:48.759 --> 00:19:49.750
to ask Staff to

00:19:51.500 --> 00:19:55.549
um work through those those policy rulemaking projects.

00:19:55.559 --> 00:20:00.039
Um You know, in some kind of a reasonable fashion.

00:20:00.049 --> 00:20:02.078
I think because of everything we have on our plate.

00:20:04.709 --> 00:20:07.588
(item:12:Chairwoman Jackson on rulemaking for generation and storage) Obviously, those policy decisions are important to

00:20:07.598 --> 00:20:10.049
all of us. And you know, as Commissioner Cobos said

00:20:10.059 --> 00:20:12.650
we do have a lot moving forward. That we are trying

00:20:12.660 --> 00:20:17.108
to work and I personally think we're doing a really

00:20:17.118 --> 00:20:19.328
good job managing a lot of the things that we have

00:20:19.338 --> 00:20:22.578
out there Staff is. But I do think that there is a

00:20:22.588 --> 00:20:25.739
need to move forward with this rate case. And I would

00:20:25.750 --> 00:20:28.910
be in favor of moving forward and not extending time.

00:20:29.400 --> 00:20:33.170
(item:12:Commissioner Glotfelty's follow-up to the Commissioners thoughts) Listen, I think I made my point which is. You always

00:20:33.180 --> 00:20:35.930
do you are good at that Jimmy. We got to get this stuff

00:20:35.939 --> 00:20:39.088
moving. We need megawatts, we need kilowatts, we need

00:20:39.098 --> 00:20:41.559
all of it on the system. In a way that we the

00:20:41.568 --> 00:20:43.818
market understands what's happening. The operators

00:20:43.828 --> 00:20:46.039
in the control room know what resources they have.

00:20:46.098 --> 00:20:50.868
And I'm ok with finalizing this and not extending.

00:20:51.180 --> 00:20:54.390
But we've got, I'm going to keep pushing on that, on

00:20:54.400 --> 00:20:57.680
that effort. Me too. And every time we have an opportunity

00:20:57.689 --> 00:21:00.759
I'll continue to push. But I'm hoping I'm okay not extending.

00:21:01.549 --> 00:21:04.098
(item:12:Motion to approve not extending time on the motions for rehearing) Okay so do I have a motion that the Commission should

00:21:04.108 --> 00:21:07.799
not extend time on the motions for rehearing? So moved. Second. I

00:21:07.809 --> 00:21:11.130
have a motion and a second. All in favor, say aye. Aye. Motion

00:21:11.140 --> 00:21:11.719
passes.

00:21:13.818 --> 00:21:17.019
Next up is Item No.13. Shelah, will you please

00:21:17.199 --> 00:21:20.180
lay out this item. (item:13:Application of Sam Houston Electric Co-op to amend its CCN in Polk and Tyler counties) Yes, Item 13 is Docket No.

00:21:20.189 --> 00:21:24.019
53602. This is the application of Sam Houston Electric

00:21:24.029 --> 00:21:27.640
Co-op to amend its CCN for a transmission line in Polk

00:21:27.650 --> 00:21:31.000
and Tyler counties. So before you is a proposed order

00:21:31.009 --> 00:21:34.189
that was filed on August 1, that addresses a unanimous

00:21:34.199 --> 00:21:37.568
agreement between the parties, no corrections or exceptions

00:21:37.578 --> 00:21:40.539
were filed by the parties. Any thoughts on

00:21:40.549 --> 00:21:40.969
this one?

00:21:42.588 --> 00:21:47.209
(item:13:Commissioner McAdams' question to Commission Cobos on the MISO line) Just my first blush. Um, I see that this uh line

00:21:47.219 --> 00:21:49.868
is a MISO reliability line. So I'm really looking to

00:21:49.880 --> 00:21:53.469
Commissioner Cobos you know on, on how you're, how

00:21:53.479 --> 00:21:55.479
are you looking at this? (item:13:Commissioner Cobos' thoughts on the application) Well, I would have consented

00:21:55.489 --> 00:21:58.469
this and approved the proposed order. Um, that adopts

00:21:58.479 --> 00:22:00.858
the agreed route number based on.

00:22:02.618 --> 00:22:05.318
(item:13:Commission Glotfelty & McAdams agreement with Commissioner Cobos' thoughts) I'm agreed. That carries great weight, weight with me and I, I would

00:22:05.328 --> 00:22:08.539
support that as well so.

00:22:10.059 --> 00:22:12.838
All right. (item:13:Motion to adopt proposed order) Um, I would move to adopt the proposed order.

00:22:13.868 --> 00:22:17.108
Second. We have a motion and a second. All in favor,

00:22:17.118 --> 00:22:19.529
say aye. Aye. Motion passes.

00:22:21.229 --> 00:22:23.880
Next up is Item No. 14. Shelah, will you please

00:22:23.890 --> 00:22:28.328
lay out this item? (item:14:Application of SWEPCO for a CCN & relief for acquisition of generation facilities) Yes, Item 14 is Docket No. 53625

00:22:28.338 --> 00:22:32.118
This is the application of SWEPCO for a CCN and related

00:22:32.130 --> 00:22:35.078
relief for the acquisition of generation facilities.

00:22:35.108 --> 00:22:37.608
Before you are three motions for a hearing on the Commission's

00:22:37.618 --> 00:22:41.130
order that was filed on June 7th. The motions for a

00:22:41.140 --> 00:22:45.199
hearing were filed by SWEPCO, TIEC and CARD. The Commission

00:22:45.209 --> 00:22:47.500
voted to add the motions for rehearing to this submitting

00:22:47.509 --> 00:22:50.729
agenda for consideration of the merits of the motion.

00:22:51.078 --> 00:22:53.180
And Commissioner, I'm sorry. Commissioner McAdams

00:22:53.189 --> 00:22:55.900
filed a memo in this docket. So Commissioner McAdams

00:22:55.910 --> 00:22:58.709
will you please um, lay out your memo? Yes, ma'am.

00:22:58.719 --> 00:23:02.189
(item:14:Commissioner McAdams’ lays out his memo) Uh so Commissioners I, I filed a memo um to really

00:23:02.199 --> 00:23:06.779
clean up in nature uh, on this order. Um I would grant

00:23:06.789 --> 00:23:10.150
uh, rehearing limited to the modifications to the order

00:23:10.160 --> 00:23:13.338
that I discussed in the memo. Uh, the findings of fact

00:23:13.348 --> 00:23:17.500
condition uh the references to uh Louisiana proceedings.

00:23:17.769 --> 00:23:20.439
Um, and I would move that we grant rehearing to modify

00:23:20.449 --> 00:23:22.039
the order consistent with my memo.

00:23:23.769 --> 00:23:28.338
I'm in agreement. Okay, thanks. (item:14:Commissioner Cobos' question on rehearing for SWEPCO) What, what is your recommendation

00:23:28.348 --> 00:23:31.750
on SWEPCO's um motion for rehearing? Say it again, bad ear.

00:23:32.269 --> 00:23:34.660
What is your recommendation on SWEPCO's motion for

00:23:34.670 --> 00:23:39.880
rehearing? No, I would not take that up. Okay, so denied?

00:23:40.049 --> 00:23:40.799
Yes ma'am. Okay.

00:23:42.608 --> 00:23:46.739
(item:14:Motion to grant rehearing & modify order consistent with memo) So uh I would move to, to grant rehearing and modify

00:23:46.750 --> 00:23:49.559
the order consistent with my memo. We have a motion,

00:23:49.568 --> 00:23:52.949
we have a second? Second. Second. We have a motion and a second. All

00:23:52.959 --> 00:23:58.608
in favor, say aye. Aye. The motion passes. Item 15 was Consented.

00:23:58.618 --> 00:24:02.209
Next up is Item 16. Shelah, will you please lay out

00:24:02.219 --> 00:24:06.838
this item? Yes, ma'am. (item:16:Application of SWEPCO for authority to reconcile fuel costs) Item 16 is Docket No. 53931

00:24:06.848 --> 00:24:08.979
This is the application of SWEPCO for authority

00:24:08.989 --> 00:24:12.469
to reconcile fuel costs. Before you were two items,

00:24:12.479 --> 00:24:14.618
an unopposed agreement between the parties that was

00:24:14.630 --> 00:24:18.420
filed on June 22nd and also a SOAH PF proposal for

00:24:18.430 --> 00:24:21.900
decision that was filed on July 25. Several parties

00:24:21.910 --> 00:24:25.118
fought exceptions to the proposal for decision card.

00:24:25.130 --> 00:24:28.118
Commission Staff, East Texas Electric Co-op and North

00:24:28.130 --> 00:24:33.608
Texas Electric Co-op and TIEC. Let's see, the SOAH 

00:24:33.630 --> 00:24:36.739
ALJ's filed a memo on August 16th declining to make

00:24:36.750 --> 00:24:39.729
changes to the proposal for decision. And Commissioner

00:24:39.739 --> 00:24:42.479
McAdams filed a memo on this docket. It was a short

00:24:42.500 --> 00:24:47.699
one. Okay. Would you please lay out your memo? Yes, ma'am. (item:16:Commissioner McAdams’ lays out his memo) Uh Madam

00:24:47.709 --> 00:24:50.838
Chair, Members. I, I think the memo speaks for itself.

00:24:50.848 --> 00:24:54.219
Um I, I'll just say that I do have significant concerns

00:24:54.229 --> 00:24:58.259
about the settlement. But um I don't think we should

00:24:58.269 --> 00:25:01.229
take time and look at the PFDs findings of prudence

00:25:01.239 --> 00:25:05.368
of retirement here. Um I would ask that we take this

00:25:05.380 --> 00:25:09.039
up at the next open meeting so it can be better synchronized

00:25:09.049 --> 00:25:13.250
on an Agenda with uh with Items. So we can take a

00:25:13.259 --> 00:25:18.559
holistic look and, and deliberative approach to uh to

00:25:18.568 --> 00:25:25.219
the various perkey related projects and proceedings.

00:25:26.848 --> 00:25:31.699
Are you okay delaying until the next meeting? (item:16:Commissioner Cobos thoughts on delaying) I am. The only request

00:25:31.709 --> 00:25:34.868
I have and this kind of goes to your comments about

00:25:34.880 --> 00:25:39.979
the settlement agreement. Is that um I guess I'm, I'm

00:25:39.989 --> 00:25:42.809
good with delaying it. It might have to be the second

00:25:42.818 --> 00:25:46.709
open meeting if possible in September. Because I think

00:25:46.719 --> 00:25:50.959
that we can benefit from getting testimony that supports

00:25:50.969 --> 00:25:54.420
and explains the settlement agreement. In the meantime

00:25:54.430 --> 00:25:58.180
so that when we do finally deliberate on this case.

00:25:58.189 --> 00:26:00.549
We have all the information that we need that better

00:26:00.559 --> 00:26:03.818
explains the settlement agreement. And of course, also

00:26:03.828 --> 00:26:06.828
the information on the PFD. And what I mean by that

00:26:07.289 --> 00:26:12.828
is um getting information on why this had been mine

00:26:12.838 --> 00:26:17.150
cost that SWEPCO incurred through February 2023. Are being

00:26:17.160 --> 00:26:19.509
addressed in this proceeding when the fuel reconciliation

00:26:19.519 --> 00:26:24.000
period is from January 1, 2020 through December 31,

00:26:24.009 --> 00:26:29.279
2021. So there's about a 14 month, you know, additional

00:26:29.289 --> 00:26:32.269
uh timeline added in there and, and the parties agreed

00:26:32.279 --> 00:26:36.068
to it. But getting more information on, on why they

00:26:36.078 --> 00:26:41.019
support it, why they agreed to it. Also how the um,

00:26:42.098 --> 00:26:46.189
the sort of the, the party segregated the, the Oxbow

00:26:46.199 --> 00:26:50.809
and Sabine mine costs um into a separate surcharge is

00:26:50.818 --> 00:26:53.578
my understanding. And, and maybe understanding how that

00:26:53.588 --> 00:26:57.529
meets the surcharge calculation requirements in our

00:26:57.539 --> 00:27:02.769
Commission Rule. Um And supporting that and then also

00:27:02.779 --> 00:27:07.670
um, you know, explaining why carrying costs. You know

00:27:07.680 --> 00:27:13.219
why, why um SWEPCO wouldn't be able to. What's the, what

00:27:13.229 --> 00:27:16.799
our decision on prudency? If we find, if we find that

00:27:17.078 --> 00:27:21.209
SWEPCO decision to retire Pirkey was not prudent. The

00:27:21.219 --> 00:27:23.189
parties have agreed to well they'll still recover

00:27:23.199 --> 00:27:25.739
costs but just not their carrying cost. And that's

00:27:25.750 --> 00:27:29.900
just a new concept in a field rate case. So explaining why

00:27:29.910 --> 00:27:33.000
carrying costs is the linchpin on, on you know what

00:27:33.229 --> 00:27:38.088
why is, why is that sufficient? On um if we find that

00:27:38.098 --> 00:27:41.598
the plant is, was not prudently retired. Like what's

00:27:41.608 --> 00:27:45.479
the genesis of the carrying cost being the focus area

00:27:45.489 --> 00:27:48.979
here? So it sounds like you're okay with black box settlements

00:27:48.989 --> 00:27:53.059
to it as long as they're not so black. Uh it's pitch

00:27:53.068 --> 00:27:57.299
dark sometimes. So just getting more information would

00:27:57.309 --> 00:27:59.880
be helpful for us to properly evaluate the settlement

00:27:59.890 --> 00:28:03.000
agreement. And as a matter of historical practice,

00:28:03.009 --> 00:28:06.108
the Commission has asked the parties to, to file testimony

00:28:06.118 --> 00:28:10.000
supporting settlement agreements. So this is consistent

00:28:10.009 --> 00:28:13.799
with our historical practice and would help us in this

00:28:13.809 --> 00:28:17.410
situation. So we can properly adjudicate the fuel rate case

00:28:17.420 --> 00:28:20.529
as a whole. (item:16:Commissioner McAdams thoughts on delaying) I, I for one agree with everything you

00:28:20.539 --> 00:28:23.430
just said. Um so I, I think these are all very good

00:28:23.439 --> 00:28:28.729
things to ask. Uh I my priority as a part of my

00:28:28.739 --> 00:28:32.979
memo here was to better synchronize this proceeding

00:28:32.989 --> 00:28:38.088
again with the other uh prudence question. So that

00:28:38.098 --> 00:28:44.539
we can uh more appropriately order our decisions to

00:28:44.549 --> 00:28:46.989
produce an outcome that's in the public interest. So

00:28:47.000 --> 00:28:49.750
everything you're asking for, I believe furthers that goal.

00:28:50.838 --> 00:28:54.199
So then in order to give the parties time to file testimony.

00:28:55.509 --> 00:28:58.078
Its support and explaining the settlement agreement.

00:28:59.009 --> 00:29:01.828
Um and allowing us to adjudicate both, you know, look

00:29:01.838 --> 00:29:04.459
at the whole case as a whole. It sounds like probably

00:29:04.469 --> 00:29:06.799
maybe the second open meeting in September would give

00:29:06.809 --> 00:29:09.469
us enough time, right? So that the parties can submit

00:29:09.479 --> 00:29:14.699
the testimony, you have time to prepare the PFD analysis.

00:29:14.709 --> 00:29:18.459
It sounds, that sounds like that's probably more reasonable.

00:29:18.769 --> 00:29:23.368
I, I agree. And look for everybody in the momentum

00:29:23.380 --> 00:29:25.380
on this has been building for a while. So I think we

00:29:25.390 --> 00:29:27.670
need to do this, right? I, I don't think it hurts the

00:29:27.680 --> 00:29:29.150
overall um

00:29:31.019 --> 00:29:35.299
timeliness of adjudicate uh, adjudication of the issues

00:29:35.309 --> 00:29:39.568
at hand. So um if, if that requires you know a little

00:29:39.578 --> 00:29:44.029
further down our calendar uh I, I agree with it. Okay.

00:29:44.039 --> 00:29:46.348
So it sounds like we're all in agreement to delaying

00:29:46.358 --> 00:29:49.650
acting on this item until the second open meeting in

00:29:49.660 --> 00:29:51.608
September. Yes, ma'am. And I don't think any formal

00:29:51.618 --> 00:29:54.868
action is required at this point. Do you know any direction

00:29:54.900 --> 00:29:58.039
to get the testimony? Have OPDM get testimony? Like what

00:29:58.049 --> 00:30:03.608
how, how do we um enact that direction? (item:16:Shelah Cisneros give guidance on delaying) Right. So if

00:30:03.618 --> 00:30:05.828
this, if the Commission would like for this to be brought

00:30:05.838 --> 00:30:08.568
back to the second open meeting in September. We certainly

00:30:08.578 --> 00:30:10.969
want to look at sort of, you know, dates to file the

00:30:10.979 --> 00:30:14.759
testimony by. To give you enough time to review it for

00:30:14.769 --> 00:30:18.939
that. Um I don't have my, I. I'm not sure I can

00:30:18.949 --> 00:30:21.529
do that calculation um off the top of my head. But

00:30:21.539 --> 00:30:23.828
what you could possibly do is let me just think about

00:30:23.838 --> 00:30:24.588
this for a moment.

00:30:26.368 --> 00:30:31.348
You could delegate authority to us to just uh to draft

00:30:31.358 --> 00:30:34.269
an order that would set a deadline for supplemental

00:30:34.279 --> 00:30:36.549
testimony that would fit within the time mailing you

00:30:36.559 --> 00:30:38.618
requested for the second of a meeting in September

00:30:39.358 --> 00:30:42.650
consistent with the questions uh articulated from.

00:30:43.130 --> 00:30:46.348
Yes. Yes. I think that would be clear unless, unless

00:30:46.358 --> 00:30:48.670
you have a date in mind when you would like the parties

00:30:48.680 --> 00:30:50.390
to follow up the supplemental testimony you're asking

00:30:50.400 --> 00:30:53.380
about. No, I'll leave that up to y'all. Okay. All right

00:30:53.390 --> 00:30:55.828
We'll look at that and then uh we'll draft in order

00:30:55.838 --> 00:30:57.259
to bring around for you to, for your signature. So that

00:30:57.269 --> 00:30:59.199
does require a motion, I believe since we're directing.

00:30:59.309 --> 00:31:02.189
Yes, yes. Um so, um.

00:31:03.799 --> 00:31:09.309
(item:16:Motion to direct Staff to gain a certain date and comport with the second meeting) I, I would move to direct Staff um to uh set to

00:31:09.539 --> 00:31:12.858
to request of parties information consistent with our

00:31:12.868 --> 00:31:16.969
discussion from the dais uh by a date certain. And uh

00:31:16.979 --> 00:31:19.779
to comport with the second meeting and to comport with

00:31:19.789 --> 00:31:22.910
the second meeting in September. Yes. All right. Second. We

00:31:22.920 --> 00:31:25.420
have a motion and a second. All in favor, say aye. Aye.

00:31:25.430 --> 00:31:26.598
Motion passes.

00:31:28.170 --> 00:31:30.868
And next up is Item No. 17. Shelah, will you please

00:31:30.880 --> 00:31:36.680
lay out this item? (item:17:Statement of intent and application of El Paso Electric Co. for approval of EVs-Ready Pilot Programs and tariffs) Yes, Item 17 is Docket No. 54614.

00:31:37.250 --> 00:31:40.358
This is the statement of intent and application of

00:31:40.368 --> 00:31:44.338
El Paso Electric for approval of Texas electric vehicle

00:31:44.348 --> 00:31:47.949
ready pilot programs and tariffs. There are two requests

00:31:47.959 --> 00:31:51.199
for referral to SOAH in this docket. Uh before bringing

00:31:51.209 --> 00:31:54.009
you a draft preliminary order for your consideration

00:31:54.059 --> 00:31:56.108
we teed up this item to get guidance from the Commission

00:31:56.118 --> 00:32:01.959
on how to proceed. (item:17:Chairwoman Jackson gives reference to SB1002 concerning proceeding) So in light of Senate Bill 1002, there

00:32:01.969 --> 00:32:04.400
are new statutory requirements that may impact this

00:32:04.410 --> 00:32:07.250
proceeding. Before the Commission refers its docket

00:32:07.259 --> 00:32:10.209
to SOAH and in order to scope the issues properly.

00:32:10.239 --> 00:32:14.328
It would be helpful if El Paso Electric would file

00:32:14.338 --> 00:32:17.500
an update on whether it would like to amend its application,

00:32:17.699 --> 00:32:20.598
to withdraw its application and file at a later date.

00:32:20.608 --> 00:32:23.588
Or to continue forward with its application as filed.

00:32:23.848 --> 00:32:26.729
Um I would recommend that El Paso Electric file a response

00:32:26.739 --> 00:32:30.130
within 30 days identifying which path forward it will

00:32:30.140 --> 00:32:33.279
pursue. Uh do we have any thoughts on this? No, I agree

00:32:33.289 --> 00:32:35.459
with that. The mechanics of that. Agreed.

00:32:37.189 --> 00:32:40.959
(item:17:Motion to direct OPDM make a filing requesting El Paso Electric amend or refile application) So if you need a motion, I would move to direct OPDM

00:32:40.969 --> 00:32:43.759
to make a filing request for El Paso Electric to amend

00:32:43.769 --> 00:32:46.779
or refile its application within the next 30 days.

00:32:47.598 --> 00:32:51.049
Do I have a second? Second. All in favor, say aye. Aye.

00:32:51.059 --> 00:32:52.328
Motion passes

00:32:55.410 --> 00:32:59.618
Item 18 was Consented. Next up is Item No. 19. Shelah,

00:32:59.630 --> 00:33:02.729
will you please lay out this Item. (item:19:Application of Wind Energy Transmission Texas for wholesale transmission rates) Item 19 is Docket

00:33:02.739 --> 00:33:06.729
number 55029. The application of Wind Energy Transmission

00:33:06.739 --> 00:33:09.868
Texas for an interim update of wholesale transmission

00:33:09.880 --> 00:33:13.588
rates. Before you is an appeal of Order No. 6.

00:33:13.858 --> 00:33:18.289
The appeal was filed jointly by TIEC and um steering

00:33:18.299 --> 00:33:20.479
cities of committees served by Oncor.

00:33:23.338 --> 00:33:24.969
Okay. Do you have any thoughts on this one?

00:33:27.130 --> 00:33:31.939
So I jump off, go ahead. (item:19:Commissioner Glotfelty's thoughts Wind Energy's application) I was just gonna say kind

00:33:31.949 --> 00:33:35.910
of what our, our my thoughts here are. Um, well, this

00:33:35.920 --> 00:33:38.689
is, uh, procedural. The heart of this is that uh,

00:33:40.348 --> 00:33:43.299
Wind Energy Transmission Texas has not been in for

00:33:43.309 --> 00:33:46.140
a base rate proceeding since 2015. You've given an

00:33:46.150 --> 00:33:47.309
extension on that.

00:33:49.358 --> 00:33:55.759
I think that we should grant the appeal. Overturn the

00:33:55.769 --> 00:34:00.229
ALJ and allow the cost to be examined by parties in

00:34:00.239 --> 00:34:03.650
the best interest of determining what rates should

00:34:03.660 --> 00:34:09.949
be considered in this effort. So I would uh, would

00:34:09.958 --> 00:34:15.239
move that, that we take that effort. (item:19:Commissioner McAdams on consistent rules) Yeah and so on on that

00:34:15.590 --> 00:34:18.389
I do not believe ordering Paragraph No. 5 in

00:34:18.398 --> 00:34:21.800
the Commission's April 5, 2023, order limits parties

00:34:21.809 --> 00:34:24.530
to only looking at the face of the earnings monitoring

00:34:24.539 --> 00:34:27.849
report. I believe our, our Rules are consistent. Precedent

00:34:27.860 --> 00:34:33.260
is consistent. I mean, once we do this, they can, they

00:34:33.269 --> 00:34:34.309
can look at stuff.

00:34:36.369 --> 00:34:38.898
(item:19:Commissioner Cobos thoughts on granting the appeal) I, I'm in agreement with Commissioner Glotfelty, I think

00:34:38.909 --> 00:34:41.179
we're on the same page, but basically where I came

00:34:41.188 --> 00:34:43.989
out on this was that. Um, I would grant the appeal

00:34:44.000 --> 00:34:47.699
of Order No. 6 based on the language and Ordering

00:34:47.708 --> 00:34:52.438
Paragraph No. 5. I looked at the Rules, the DCRF

00:34:52.449 --> 00:34:57.070
and the Rule, the DCRF Rule clearly contemplates

00:34:57.079 --> 00:35:00.728
that you can look behind the EMR. Um and, and

00:35:00.739 --> 00:35:08.659
that's driven by PURA uh 36.210. And so um there's

00:35:08.668 --> 00:35:11.360
a clear process for looking behind the EMR in the DCRF

00:35:11.369 --> 00:35:15.168
Rule. The interim T cost rule does not create that

00:35:15.179 --> 00:35:17.898
process, right? Um And it doesn't exist within the

00:35:17.909 --> 00:35:20.849
rule. So the reason I say this is because I want to

00:35:20.860 --> 00:35:23.760
make it clear that we're granting this appeal based

00:35:23.769 --> 00:35:29.559
on the Ordering Paragraph language in um in Ordering

00:35:29.570 --> 00:35:32.510
Paragraph No. 5 rather than the Rule. And that's

00:35:32.519 --> 00:35:36.179
important because, you know, we want to be able to

00:35:36.188 --> 00:35:39.418
ensure that these cases are processed according to

00:35:39.429 --> 00:35:41.750
our existing rules in an efficient manner. Because that's

00:35:41.760 --> 00:35:45.938
the whole point of interim rate relief. But in this

00:35:45.949 --> 00:35:50.039
situation, given our order and the background that

00:35:50.050 --> 00:35:52.949
we found ourselves in as Commissioner Glotfelty highlighted.

00:35:53.250 --> 00:35:55.889
I would grant the appeal and let the parties examine

00:35:55.898 --> 00:35:58.530
whether or not they should be in here for an interim

00:35:58.539 --> 00:36:02.039
T cost proceeding at this time. The bottom line is

00:36:02.050 --> 00:36:04.829
they can go beyond the EMR. Yes, based on the Ordering

00:36:04.840 --> 00:36:07.559
Paragraph language. Okay. I just want to be real clear

00:36:07.570 --> 00:36:09.340
on it's based on the Order Okay.

00:36:12.329 --> 00:36:16.050
(item:19:Motion to grant appeal of Order No. 6) So do I have a motion um to grant the appeal of

00:36:16.059 --> 00:36:19.260
Order No. 6, consistent with our discussion. So

00:36:19.269 --> 00:36:23.610
moved. Second. Gotta have a motion and a second. All in favor, say aye. Aye.

00:36:23.619 --> 00:36:24.719
Motion passes.

00:36:28.789 --> 00:36:34.079
Items 20, 21 and 22 were Consented. I don't have anything

00:36:34.090 --> 00:36:40.280
on Item 23 unless y'all do. Um next up is item No.

00:36:40.289 --> 00:36:46.110
24, Project No. 52301, ERCOT Governance. (item:24:Chairwoman Jackson lays out Project 52301, ERCOT Governance) On September 1,

00:36:46.119 --> 00:36:50.099
the requirement of HB1500 on Commission directives

00:36:50.110 --> 00:36:53.179
to ERCOT will go into effect. Staff is working on a

00:36:53.188 --> 00:36:56.878
Rule to address these new requirements. Staff has filed

00:36:56.889 --> 00:36:59.389
a memo recommending an interim process to comply with

00:36:59.398 --> 00:37:02.139
the new mandates for ERCOT directives based on the

00:37:02.148 --> 00:37:05.398
language in the statute. Commissioner McAdams has also

00:37:05.409 --> 00:37:09.159
filed a memo. Let's hear Staff's proposal and then

00:37:09.168 --> 00:37:12.699
we'll discuss Commissioner McAdams' memo. David Gordon

00:37:12.750 --> 00:37:16.719
with PUC Staff is here. And David, would you please

00:37:16.728 --> 00:37:18.699
lay out your memo? (item:24:Dave Gordon with Commission Staff on ERCOT directives starting September 1st) Thank you, Chair Jackson and good

00:37:18.708 --> 00:37:21.969
morning Commissioners. Dave Gordon with Commission Staff.

00:37:22.030 --> 00:37:25.510
As you all know, HB1500 included new requirements related

00:37:25.519 --> 00:37:28.360
to ERCOT directives that will go into effect on September

00:37:28.369 --> 00:37:31.389
1. The Commission will adopt a Rule on those new

00:37:31.398 --> 00:37:34.168
directives but it will not be adopted before the law's

00:37:34.179 --> 00:37:37.489
effective date. In the meantime, Staff has developed

00:37:37.500 --> 00:37:39.599
the interim process prepped in our memo to meet the

00:37:39.610 --> 00:37:42.019
new requirements with respect to ERCOT directives.

00:37:42.360 --> 00:37:45.050
Um  beginning on September 1, the Commission can no

00:37:45.059 --> 00:37:48.510
longer instruct ERCOT to take official action through

00:37:48.519 --> 00:37:51.599
oral directives. Um instead, the Commission can issue

00:37:51.610 --> 00:37:55.909
directives by written memo or order. Or for those directives

00:37:55.918 --> 00:37:59.409
that carry a cost or a significant uh significant uh

00:37:59.429 --> 00:38:02.898
operational impact. Uh through the contested case or

00:38:02.909 --> 00:38:04.010
rulemaking process.

00:38:07.059 --> 00:38:09.438
Uh the memo includes Staff's interpretations of the

00:38:09.449 --> 00:38:12.199
terms directive and official action. To aid determining

00:38:12.208 --> 00:38:16.309
when the new requirements will come into play. And

00:38:16.320 --> 00:38:18.579
our recommendation is that the Commission determine

00:38:18.590 --> 00:38:22.909
whether, whether a directive imposes a new or increased

00:38:22.918 --> 00:38:27.168
cost or imposes a significant operational burden on

00:38:27.179 --> 00:38:30.719
a case by case basis. We are also recommending a process

00:38:30.728 --> 00:38:33.369
for directives in which a Commissioner or Commission

00:38:33.378 --> 00:38:37.398
Staff files proposed directive. No fewer than 9 days

00:38:37.418 --> 00:38:39.610
before the open meeting at which the directive will

00:38:39.619 --> 00:38:42.619
be taken up for deliberation. And I want to be clear

00:38:42.628 --> 00:38:46.128
here that it is only Commission Staff or a Commission

00:38:46.139 --> 00:38:49.898
Office. That has the ability to file a proposed directive.

00:38:50.208 --> 00:38:53.590
Uh this process will give interested persons an, an

00:38:53.599 --> 00:38:56.179
opportunity to file written comments on a proposed

00:38:56.188 --> 00:38:59.878
directive. Dave uh the audience and the viewing public

00:38:59.889 --> 00:39:02.119
um would love you to move that microphone a little

00:39:02.128 --> 00:39:05.139
closer because they are intent on. My voice does not carry very far anyway.

00:39:05.148 --> 00:39:06.929
Thank you. No, you're good. Appreciate that Commissioner

00:39:06.938 --> 00:39:10.708
McAdams. So we think that this will give an opportunity

00:39:10.719 --> 00:39:14.179
to interested persons to respond with written comments

00:39:14.188 --> 00:39:17.659
to any proposed directive. The Commission can then

00:39:17.668 --> 00:39:20.978
consider the proposed directive at an open meeting

00:39:20.989 --> 00:39:24.898
and take appropriate action on that directive. Of course

00:39:24.909 --> 00:39:28.398
Staff is available to work with and advise the Commissioners

00:39:28.570 --> 00:39:33.000
on this process as we move forward. It is our hope

00:39:33.010 --> 00:39:36.289
that this interim period will serve as a learning opportunity

00:39:36.300 --> 00:39:39.829
that will inform how we implement the rule and adopt

00:39:39.840 --> 00:39:42.500
the rule. And so I'm happy to answer any questions

00:39:42.510 --> 00:39:45.849
that you all might have. And also you had a memo if

00:39:45.860 --> 00:39:48.639
you wanna lay out. Yes, ma'am. (item:24:Commissioner McAdams’ lays out his memo) Um and look, the

00:39:50.269 --> 00:39:54.438
my memo is pretty self explanatory. Um the issue is

00:39:54.449 --> 00:39:59.228
I see it as this um as per this process which on

00:39:59.239 --> 00:40:02.010
its face, I do not disagree with. I, I believe it's

00:40:02.769 --> 00:40:07.599
broadly a route we must go down um on both an interim

00:40:07.659 --> 00:40:12.208
interim basis and uh as a template for a potential

00:40:12.219 --> 00:40:16.260
rulemaking. If we have to file a memo as in us

00:40:16.269 --> 00:40:19.500
uh that might lead to an ERCOT directive at least nine

00:40:19.510 --> 00:40:24.119
days before an open meeting. Then I know I need uh

00:40:24.128 --> 00:40:28.168
information from ERCOT as early as possible. And, and

00:40:28.179 --> 00:40:32.280
I believe we will need time to deliberate on the information

00:40:32.289 --> 00:40:36.639
that is provided to us. Both for ourselves to consider

00:40:36.648 --> 00:40:40.590
and our PUC Staff. Because much of what ERCOT does has

00:40:40.599 --> 00:40:43.820
strategic ramifications at both a policy level and

00:40:43.829 --> 00:40:44.969
an operational level.

00:40:46.639 --> 00:40:50.869
And um and look, I don't want there to be instances

00:40:50.878 --> 00:40:54.570
where the night before um our deadline to file any

00:40:54.579 --> 00:40:59.860
type of uh memo. Uh implying a directive we get the

00:40:59.869 --> 00:41:04.389
information all of a sudden we've got a make a decision

00:41:04.809 --> 00:41:09.590
of strategic importance. So uh any filing for ERCOT

00:41:10.438 --> 00:41:13.909
in my view should be taken up. Uh not until the open

00:41:13.918 --> 00:41:17.139
meeting that follows the 30th day after the filing.

00:41:17.898 --> 00:41:20.269
And I think Staff should strongly consider this timeline

00:41:20.280 --> 00:41:24.570
in the upcoming rulemaking. Um therefore you know

00:41:24.579 --> 00:41:26.688
I, I certainly feel strongly about a motion. That we

00:41:26.699 --> 00:41:29.228
direct Staff to adopt an interim process described

00:41:29.239 --> 00:41:32.128
in this memo and is modified by potential discussion.

00:41:32.139 --> 00:41:35.208
But I am all ears if you have concerns. But, but I

00:41:35.219 --> 00:41:39.898
think this is a matter of a prudent uh enhancement

00:41:39.938 --> 00:41:41.250
to the proposed process.

00:41:42.918 --> 00:41:45.559
(item:24:Commissioner Cobos thoughts on ERCOT directives) Commissioner McAdams thank you for your feedback on

00:41:45.570 --> 00:41:48.208
this. So, um so I wanna make sure that we kind of

00:41:48.219 --> 00:41:50.648
separate this. And, and it sounds like I just wanna

00:41:50.659 --> 00:41:53.119
make sure I understand. Um so there's two buckets.

00:41:53.128 --> 00:41:57.809
There's the, the areas of Commission directives

00:41:57.820 --> 00:42:00.780
to ERCOT that Staff's memo has addressing and laying out

00:42:00.789 --> 00:42:04.039
a process for right? And sort of putting us on a deadline

00:42:04.050 --> 00:42:09.280
of at least nine days before an open meeting. And then

00:42:09.289 --> 00:42:12.958
there's a second bucket of filings we get from ERCOT

00:42:12.989 --> 00:42:18.349
like protocols that are approved by the Board. Um and

00:42:18.360 --> 00:42:20.829
it sounds like what you're saying is that, and I just

00:42:20.840 --> 00:42:25.219
wanna make sure I understand. Is that um when the Board

00:42:25.228 --> 00:42:30.320
approves protocols, we have 30 days from the day ERCOT

00:42:30.458 --> 00:42:33.659
files those Board approved protocols. Which are filed

00:42:33.668 --> 00:42:39.369
in Project No. 54445. We have 30 days, at least

00:42:39.378 --> 00:42:42.250
th the, the open meeting after the 30 days, 30 days

00:42:42.260 --> 00:42:45.769
30 days for the protocols. But I think I also heard

00:42:45.780 --> 00:42:49.320
you say that if we follow a directive uh nine days

00:42:49.329 --> 00:42:56.519
before that and ERCOT files. (item:24:Commissioner McAdams follow-up to Commissioner Cobos' question) No. Uh so if we get anything

00:42:56.590 --> 00:43:01.539
from ERCOT that requires PUC to take action. Uh I want

00:43:01.550 --> 00:43:06.659
us to be able to uh consider that no earlier than 30

00:43:06.750 --> 00:43:11.188
days uh before the next open meeting. (item:24:Commissioner Cobos continuing in her thoughts on ERCOT directives) Okay. So then I

00:43:11.199 --> 00:43:15.199
I think in my mind in the Commission directives. Subject

00:43:15.208 --> 00:43:19.519
to good cause exception in a Rule of course. Um the way

00:43:19.530 --> 00:43:23.250
I see it is we have the Staff memo that addresses an

00:43:23.260 --> 00:43:26.300
interim process for Commission directives to ERCOT. As laid

00:43:26.309 --> 00:43:28.898
out and you're good with that process. It's the when

00:43:29.119 --> 00:43:33.780
ERCOT files items here. That they need action on like protocols

00:43:33.789 --> 00:43:35.969
or anything else. But what I think about immediately

00:43:35.978 --> 00:43:38.579
is the protocols, right? That, that's the kind of standard

00:43:38.619 --> 00:43:41.639
status um approval process we have ongoing. And so

00:43:41.648 --> 00:43:46.179
your recommendation would be that if, for instance

00:43:46.188 --> 00:43:51.239
um the ERCOT Board approves protocols on August 31 and

00:43:51.250 --> 00:43:54.699
they get filed here on September 1. Then you have

00:43:54.708 --> 00:43:58.610
at least 30 days to process to for us to take

00:43:58.619 --> 00:44:01.719
up those protocols. So that those protocols wouldn't

00:44:01.728 --> 00:44:04.510
be taken up to the uh at the earliest, the first open

00:44:04.519 --> 00:44:07.989
meeting in October. (item:24:Commissioner McAdams follow-up the ERCOT directives) Yeah, and we do things, we approve

00:44:08.000 --> 00:44:11.219
things that are not just protocols or DC was on the

00:44:11.228 --> 00:44:17.039
protocol, right? So any uh ERCOT um

00:44:19.429 --> 00:44:22.639
recommendation that would require PUC approval or

00:44:22.648 --> 00:44:24.280
action 30 days.

00:44:26.449 --> 00:44:28.969
I want to have a deliberative window imposed.

00:44:31.728 --> 00:44:36.500
(item:24:Commissioner Glotfelty's thoughts on ERCOT directives) Uh so, so we are in this um I'll call it a

00:44:36.510 --> 00:44:41.128
dance with how we structure the communications between

00:44:41.139 --> 00:44:44.728
us and ERCOT since Senate Bill 3. And since governance

00:44:44.739 --> 00:44:50.628
changes and I think that while this might seem restricted

00:44:50.829 --> 00:44:54.438
on its face. I don't think it is at all. I think

00:44:54.449 --> 00:44:58.739
if we pass this, this becomes the standard. Everybody

00:44:58.750 --> 00:45:02.369
adopts and adopts and adapts to this standard and we

00:45:02.378 --> 00:45:05.219
will build that into our timeline. So that we are not

00:45:05.228 --> 00:45:08.559
forced. We are the decision makers here. We are the

00:45:08.570 --> 00:45:11.398
ones that these orders are bound by law. So that we

00:45:11.409 --> 00:45:13.989
have the appropriate time to have those discussions.

00:45:14.000 --> 00:45:18.579
And so I support this effort with good cause exceptions.

00:45:18.590 --> 00:45:23.820
And other things that are can modify when we have emergencies

00:45:23.829 --> 00:45:27.639
and other issues, right on. But 30 days is not that

00:45:27.648 --> 00:45:33.530
long in this industry. To let a proceeding uh or a discussion

00:45:33.539 --> 00:45:38.159
item sit out there for parties to discuss. Uh to come

00:45:38.168 --> 00:45:41.898
talk to us and to have discussions with Staff to ensure

00:45:41.909 --> 00:45:44.949
that we are following the law and our own. (item:24:Commissioner McAdams on policy of expectation management) Our overall

00:45:44.958 --> 00:45:47.969
I believe this helps enshrine a policy of expectation

00:45:47.978 --> 00:45:51.449
management for both organizations. For us, for them.

00:45:51.860 --> 00:45:56.429
Um and uh in emergency and accident situations. On

00:45:56.438 --> 00:45:59.179
a case by case basis, we can take that up and fast

00:45:59.188 --> 00:46:01.898
track it if need be. Um but at the end of the

00:46:01.909 --> 00:46:04.898
day, we'll know what we're doing and you don't want

00:46:05.179 --> 00:46:08.418
the Commission or Commission Staff making a recommendation

00:46:08.429 --> 00:46:12.110
or ultimate policy decision that is not well thought

00:46:12.119 --> 00:46:15.989
out. (item:24:Commissioner Cobos comments on evolving processes) And to your point, Commissioner Glotfelty, I think

00:46:16.000 --> 00:46:18.168
you, you highlighted something that's very important.

00:46:18.179 --> 00:46:21.958
Uh our evolving uh processes since Senate Bill 2.

00:46:22.429 --> 00:46:25.820
That created the yeah, the independent Board governance

00:46:25.829 --> 00:46:28.878
of ERCOT. But also created a process for us to approve

00:46:29.579 --> 00:46:32.478
and reject protocols. But now that has been amended

00:46:32.489 --> 00:46:36.699
with House Bill 1500 that creates um two very distinct

00:46:36.708 --> 00:46:39.389
you know, um processes on Commission directives to

00:46:39.458 --> 00:46:44.909
ERCOT. And our ultimate um approval denial or reman with

00:46:44.918 --> 00:46:48.119
suggested modifications to. And the reason it's important

00:46:48.128 --> 00:46:50.760
I think to set expectations at this time is because

00:46:50.769 --> 00:46:54.510
we are at a different place now where our approval

00:46:54.519 --> 00:46:59.610
denial or suggestions on a remand. And have much broader

00:46:59.619 --> 00:47:04.780
ramifications. And so having this these expectations

00:47:04.789 --> 00:47:08.889
set so that we do have the time to receive the MPRRs.

00:47:09.208 --> 00:47:13.510
To evaluate the NPRRs and the comments associated with

00:47:13.539 --> 00:47:17.148
them and have an opportunity for us to meet with stakeholders

00:47:17.159 --> 00:47:21.539
and get feedback before we deliberate on market rules

00:47:21.550 --> 00:47:24.309
that are subject to our approval, I think is an important

00:47:24.320 --> 00:47:29.579
part of our deliberative due diligence process. So

00:47:29.590 --> 00:47:32.458
I would support Commissioner McAdams, um, addition

00:47:32.469 --> 00:47:37.039
to the um, processes that we're gonna have in the interim.

00:47:38.820 --> 00:47:41.019
(item:24:Chairwoman Jackson's thoughts on a path forward) And I think you mentioned that there would be uh still

00:47:41.030 --> 00:47:43.478
the good cause exception that could be utilized if

00:47:43.489 --> 00:47:47.139
we needed to. Okay. So based on what I'm hearing, I think

00:47:47.148 --> 00:47:49.898
we have a good sense of our path forward. And uh, I'd

00:47:49.909 --> 00:47:52.780
like to thank Staff for their guidance on this matter

00:47:52.789 --> 00:47:55.329
and we look forward to seeing a draft rule and when

00:47:55.340 --> 00:47:57.829
it's ready. Thank you. Did you have anything on the

00:47:57.840 --> 00:48:03.070
rest of it? Oh, on the rest of the process. Um so

00:48:03.079 --> 00:48:06.530
we've, we've covered my, my area of the process.

00:48:06.579 --> 00:48:07.309
Um.

00:48:10.719 --> 00:48:13.159
(item:24:Commissioner Glotfelty's question on past directives) No, I mean. I think we're going to have to go through

00:48:13.168 --> 00:48:16.349
this. I think I'm hoping that the process that we laid

00:48:16.360 --> 00:48:19.500
out makes sense. The only question that I do have is

00:48:20.320 --> 00:48:22.389
if there are directives that are still out there from

00:48:22.398 --> 00:48:24.489
the past that don't apply to this. How are they going

00:48:24.500 --> 00:48:27.869
to be taken up in the future or not? I look to

00:48:27.878 --> 00:48:31.320
Staff to have that discussion between now and in the

00:48:31.329 --> 00:48:36.418
future and uh but otherwise I, I think this is a good

00:48:36.429 --> 00:48:40.128
draft and a good uh process with your, with your one

00:48:40.139 --> 00:48:43.530
petition. Good catch. Thanks for adding your comments

00:48:43.639 --> 00:48:48.019
on this. All right. (item:24:Chairwoman Jackson lays up changes to the order of the agenda )Well um next, we're gonna go out

00:48:48.030 --> 00:48:51.769
of order a little bit. And uh we have uh Pablo here 

00:48:51.780 --> 00:48:55.949
who's the CEO of ERCOT. And um he's going to, we're

00:48:55.958 --> 00:48:58.019
going to take up Item 35.

00:49:00.219 --> 00:49:05.039
And then also we'll be taking up Items 26 and 30 together.

00:49:05.050 --> 00:49:08.809
Project No 53298, Wholesale Electric Market Design

00:49:08.820 --> 00:49:13.530
Implementation and Project No. 54584, Reliability

00:49:13.539 --> 00:49:16.918
Standard for the ERCOT market. Um then we'll be proceeding

00:49:16.929 --> 00:49:20.728
down the Regular Agenda. Um as requested in our July

00:49:20.739 --> 00:49:24.110
20 Open Meeting, ERCOT has filed overviews of market

00:49:24.119 --> 00:49:27.148
design initiatives for ORDC reliability standard,

00:49:27.159 --> 00:49:32.635
DRRS, PCM and real time cooptation, including the background

00:49:32.824 --> 00:49:35.675
the scope of the initiatives framework, key milestones

00:49:35.684 --> 00:49:38.603
implementation and evaluation and a section on

00:49:38.614 --> 00:49:42.344
current updates. ERCOT included visual timelines and

00:49:42.353 --> 00:49:45.925
draft work flow diagrams as well. So uh Pablo if you

00:49:45.934 --> 00:49:48.793
could, you know, take it away with your presentation?

00:49:49.054 --> 00:49:51.144
(item:35:Pablo Vegas, ERCOT CEO on current operating conditions) Good morning Chair and good morning Commissioners.

00:49:51.155 --> 00:49:55.610
Can you hear me? Yes. Okay, great. Thank you. Before I get

00:49:55.619 --> 00:50:00.280
started going through our market design suite of initiatives

00:50:00.300 --> 00:50:03.820
I wanted to brief the Commission on current operating

00:50:03.829 --> 00:50:08.739
conditions that is seen today. We are expecting as

00:50:08.750 --> 00:50:11.050
we move through the peak this evening and into the

00:50:11.059 --> 00:50:14.398
solar ramp down to have extremely tight conditions

00:50:14.409 --> 00:50:17.110
this evening. What we're seeing is conditions that

00:50:17.119 --> 00:50:19.289
are more tight than what we have seen at any other

00:50:19.300 --> 00:50:23.469
day this Summer at this time. It's a high likelihood

00:50:23.478 --> 00:50:26.280
that we expect to be in emergency operations this evening.

00:50:27.039 --> 00:50:30.559
The issues going on today are very similar to what

00:50:30.570 --> 00:50:33.639
we have seen in prior tight periods. We have very, very

00:50:33.648 --> 00:50:36.148
high heat today again, across the state of Texas.

00:50:36.449 --> 00:50:39.539
The demand is expected to be at near record levels

00:50:39.550 --> 00:50:44.590
today and the challenge that complicates that or compounds

00:50:44.599 --> 00:50:47.619
that is that we are going to see low wind performance

00:50:47.628 --> 00:50:50.958
throughout the solar ramp down. The way wind has performed

00:50:50.969 --> 00:50:54.570
throughout the Summer has historically been getting

00:50:54.579 --> 00:50:58.239
to a very low level around noon, uh middle of the day

00:50:58.309 --> 00:51:01.059
and then beginning a ramp up through the afternoon

00:51:01.070 --> 00:51:04.500
and supporting the solar ramp down by ramping up during

00:51:04.510 --> 00:51:07.769
that solar ramp down. What we're seeing today is a

00:51:07.780 --> 00:51:10.628
very different profile for the wind. It's going to

00:51:10.639 --> 00:51:14.019
remain flat through most of the afternoon. It's not

00:51:14.030 --> 00:51:16.168
going to dip as low as it historically has. It's going

00:51:16.179 --> 00:51:19.090
to get to about 5000 or so, but it only goes up

00:51:19.099 --> 00:51:22.070
to about 6000 throughout the afternoon and into and

00:51:22.079 --> 00:51:25.510
through the solar ramp, which is several 1000 megawatts

00:51:25.519 --> 00:51:28.280
lower than what we have historically experienced during

00:51:28.289 --> 00:51:31.449
the tight days that we've had this Summer. The thermal

00:51:31.458 --> 00:51:35.409
dispatchable fleet today is operating at or near normal

00:51:35.418 --> 00:51:38.199
forced outage levels. So there's nothing unusual with

00:51:38.208 --> 00:51:40.929
the performance of the dispatchable fleet today. It's

00:51:40.938 --> 00:51:43.668
really the combination of the very high heat, the very

00:51:43.679 --> 00:51:49.139
high demand and the the expected output of wind there

00:51:49.148 --> 00:51:52.438
in the solar ramp. So we are doing everything we can

00:51:52.449 --> 00:51:55.320
at this point to make sure that people will be clear

00:51:55.329 --> 00:51:58.750
conservation will be important today during the afternoon

00:51:58.760 --> 00:52:02.978
and into the, into the early evening. And we are coordinating

00:52:02.989 --> 00:52:05.039
with the other ISOs and letting them know that to the

00:52:05.050 --> 00:52:08.188
extent possible if any of the dispatchable resources

00:52:08.199 --> 00:52:12.590
that are operated by those, those systems and that

00:52:12.599 --> 00:52:14.918
are switch into ERCOT, if they can be available to be

00:52:14.929 --> 00:52:18.219
back to us, that we would to have those later today

00:52:18.260 --> 00:52:20.599
But that's really at the discretion of the other ISOs

00:52:20.619 --> 00:52:23.289
because they are primarily dedicated to those to

00:52:23.300 --> 00:52:26.570
those is ISOs. (item:35:Commissioner McAdams on regional conservative operations) Pablo, if I could jump in here. I'd like

00:52:26.579 --> 00:52:29.250
to point out that uh Southwest Power Pool is operating

00:52:29.260 --> 00:52:33.119
under conservative operations as well today. So in

00:52:33.128 --> 00:52:36.059
terms of the other adjacent is ISOs, this is one of those

00:52:36.070 --> 00:52:39.289
situations where this is not occurring just in ERCOT

00:52:39.309 --> 00:52:46.619
this is a region wide impact event. Um So and in addition

00:52:47.179 --> 00:52:50.769
MISO has communicated that they expect to be in emergency

00:52:50.909 --> 00:52:54.099
operations beginning at noon today from noon to 10

00:52:54.110 --> 00:52:57.219
pm at emergency level two. So I think it's important

00:52:57.228 --> 00:52:59.469
for the public to understand that this is regional

00:52:59.478 --> 00:53:03.340
now that all grids are trying to manage through this

00:53:03.349 --> 00:53:08.628
Is it fair to say that likelihood of an EEA condition

00:53:08.639 --> 00:53:11.329
is more likely when you say emergency condition, we

00:53:11.340 --> 00:53:14.320
are talking about an EEA condition. (item:35:Pablos Vegas and Commissioner McAdams on EEA conditions) That's energy emergency

00:53:14.329 --> 00:53:17.438
alert and it is likely that we would be an energy emergency

00:53:17.449 --> 00:53:20.349
alert this evening. So for the press this is a real

00:53:20.360 --> 00:53:24.639
deal real world exercise. If we enter EEA it means

00:53:24.648 --> 00:53:29.398
something. Uh we will have um, exercised our market

00:53:29.409 --> 00:53:33.179
driven solutions and therefore Load responsive behavior

00:53:33.188 --> 00:53:35.059
is, is important. That's correct.

00:53:38.860 --> 00:53:41.619
Any other questions on today, we'll keep you all abreast

00:53:41.628 --> 00:53:45.070
as the day progresses and if anything changes and,

00:53:45.590 --> 00:53:48.530
and appreciate the opportunity to brief you this morning

00:53:48.539 --> 00:53:48.938
on that.

00:53:51.360 --> 00:53:54.789
(item:26:Pablo Vegas on Big 5 initiatives in market design) All right. Um, what I'd like to do is briefly review

00:53:54.800 --> 00:54:00.570
um we have a suite of market design and market improvement

00:54:00.579 --> 00:54:04.648
initiatives that we are working on and we, what I wanted

00:54:04.659 --> 00:54:08.898
to do today. Is to go through briefly those five, what

00:54:08.909 --> 00:54:10.918
we call the big five initiatives that deal with the

00:54:10.929 --> 00:54:15.168
market design. Those five initiatives are making the

00:54:15.179 --> 00:54:18.059
floor changes to the or DC, the operating reserve demand

00:54:18.070 --> 00:54:22.239
curve, the establishment of the reliability standard

00:54:22.958 --> 00:54:26.148
the development of the new Ancillary service D RRS

00:54:26.159 --> 00:54:29.269
S which is the dispatchable reliability reserve service

00:54:29.840 --> 00:54:33.090
the development of PCM, the performance credit mechanism

00:54:33.360 --> 00:54:36.639
And then lastly, the development of the real time co

00:54:36.648 --> 00:54:41.539
optimization engine for ERCOT. Those five initiatives

00:54:41.550 --> 00:54:44.829
together make up a suite of changes that are going

00:54:44.840 --> 00:54:49.059
to help to drive reliability and and make changes to

00:54:49.070 --> 00:54:51.898
the market constructs that are designed to improve

00:54:51.909 --> 00:54:54.869
both operational flexibility as well as long term resource

00:54:54.878 --> 00:54:58.260
adequacy. All five of those are going to be moving

00:54:58.269 --> 00:55:00.079
in parallel to some degree and that's why I wanted

00:55:00.090 --> 00:55:01.708
to talk through a little bit with you today, how those

00:55:01.719 --> 00:55:05.750
are working, what we have filed as part of this discussion

00:55:06.199 --> 00:55:10.750
is two separate memos, one specifically in the docket

00:55:10.760 --> 00:55:13.728
for the reliability standard, and then the other four

00:55:13.739 --> 00:55:17.478
initiatives the ORDC, PCM, DRRS and RTC and a separate

00:55:17.489 --> 00:55:21.300
memo. And within those memos, we have essentially what

00:55:21.309 --> 00:55:24.769
we're calling a initiative overview or summary. That

00:55:24.780 --> 00:55:28.398
captures the background in terms of what has led to

00:55:28.409 --> 00:55:31.070
those initiatives, moving forward the scope of those

00:55:31.079 --> 00:55:34.559
initiatives, key milestones and the timeline expectations

00:55:34.570 --> 00:55:36.478
for them and where appropriate where there's a current

00:55:36.489 --> 00:55:39.728
update on each of those initiatives. So what we have

00:55:39.739 --> 00:55:41.929
filed is kind of that starting document framework.

00:55:41.938 --> 00:55:44.489
It's something that we plan to use going forward to

00:55:44.500 --> 00:55:47.188
help keep the Commission and the public informed as

00:55:47.199 --> 00:55:49.829
these initiatives progress. In addition, we're also

00:55:49.840 --> 00:55:52.820
working on developing some process flows that show

00:55:52.829 --> 00:55:56.869
at a more detailed and visual way steps in terms of

00:55:56.878 --> 00:56:02.050
how we are coordinating with state agencies, with the

00:56:02.059 --> 00:56:04.769
Public Utility Commission and with ERCOT. On what needs

00:56:04.780 --> 00:56:07.469
to happen between the organizations at points in time

00:56:07.530 --> 00:56:09.590
So it's clear where hand offs are going to be, where

00:56:09.599 --> 00:56:12.449
key decisions are going to be made. And it's a visual

00:56:12.458 --> 00:56:15.269
representation of helping to bring to life the work

00:56:15.280 --> 00:56:17.840
plan at a high level for each of these initiatives

00:56:18.378 --> 00:56:20.550
So my intention is to briefly give you an update on

00:56:20.559 --> 00:56:23.139
where we are with those five initiatives and then close

00:56:23.148 --> 00:56:25.329
with a market notice that we filed this morning related

00:56:25.340 --> 00:56:26.269
to the Barney Davis.

00:56:28.820 --> 00:56:31.659
(item:26:Pablo Vegas on ORDC initiative) So I'll start, I'm going to do this in order of kind

00:56:31.668 --> 00:56:34.128
of completion for each of these initiatives. So I'll

00:56:34.139 --> 00:56:37.458
start with the ORDC. So a quick reminder, the ORDC

00:56:37.688 --> 00:56:41.639
is a change to the floor adders where we're proposing

00:56:41.648 --> 00:56:46.809
to develop a $10 floor. When reserves are between 7,000 and 6,500

00:56:46.820 --> 00:56:49.679
megawatts on the system And then when reserves fall

00:56:49.688 --> 00:56:54.949
below 6500 that floor adder would jump to $20. We are

00:56:54.958 --> 00:56:57.219
going to be presenting our other binding documents

00:56:57.228 --> 00:56:59.489
our impact analysis to the Board in October related

00:56:59.500 --> 00:57:01.728
to this. And then we'll be bringing that to the Commission

00:57:01.739 --> 00:57:04.159
following for approval sometime in an October Open

00:57:04.168 --> 00:57:06.659
Meeting. We would then be ready at that point to make

00:57:06.668 --> 00:57:09.300
the adjustments to the ORDC. And we could have that in

00:57:09.309 --> 00:57:12.688
place in November of this year if those approvals are

00:57:12.699 --> 00:57:16.360
agreed to. So that's a very short window and we'll

00:57:16.369 --> 00:57:18.860
have the opportunity to see the benefit of that um

00:57:19.219 --> 00:57:22.918
before the Winter season ideally. Any questions on

00:57:22.929 --> 00:57:26.260
that? (item:26:Commissioner Glotfelty's question if ORDC is needed) I was just gonna ask, uh this was an issue that

00:57:26.269 --> 00:57:28.769
I had brought up when we were in the discussion about

00:57:28.780 --> 00:57:32.188
market design. Um do you think the ORDC is still needed

00:57:32.199 --> 00:57:36.369
if we move towards a PCM and some other type of capacity

00:57:36.378 --> 00:57:40.610
paying for capacity value? Um I know that the,

00:57:40.619 --> 00:57:44.840
the creation of the ORDC came about in that discussion

00:57:44.849 --> 00:57:48.449
to begin with a number of years ago, it was a mechanism

00:57:48.458 --> 00:57:50.349
to try to get more people into the market into the

00:57:50.360 --> 00:57:54.800
day ahead market and by paying for resources early

00:57:54.949 --> 00:57:59.030
when we have scarcity. But as we move towards, you

00:57:59.039 --> 00:58:01.110
know, these other discussions, is it still going to

00:58:01.119 --> 00:58:04.800
be relevant or is it we continue to make modifications

00:58:04.809 --> 00:58:08.148
for it? And I'm just wondering what your thoughts are

00:58:08.219 --> 00:58:12.579
(item:26:Pablo Vegas' response to question of ORDC relevance) So I think at this point in time before having a really

00:58:12.750 --> 00:58:15.340
let's say, clear design on how the performance credit

00:58:15.349 --> 00:58:17.199
mechanism is going to work. And there's some really

00:58:17.208 --> 00:58:19.289
important parameters that are going to need to be determined

00:58:19.300 --> 00:58:20.909
in the work ahead of us. I'll talk a little bit about

00:58:20.918 --> 00:58:24.320
that shortly but absent in understanding that design.

00:58:24.550 --> 00:58:27.090
I think what I, the way I would answer that is we

00:58:27.099 --> 00:58:29.510
should always be looking at the combination of tools

00:58:29.519 --> 00:58:32.320
we have to incentivize the goals of the ERCOT grid.

00:58:32.510 --> 00:58:36.250
Which is to provide a very efficient and reliable service

00:58:36.340 --> 00:58:38.929
and to be very transparent and clear to all market

00:58:38.938 --> 00:58:42.219
participants throughout doing that, it's possible there

00:58:42.228 --> 00:58:45.449
could be changes to the ORDC that would be beneficial

00:58:45.458 --> 00:58:48.168
to the market once we have implemented the other suite

00:58:48.179 --> 00:58:50.139
of tools that we're talking about here. But I think

00:58:50.148 --> 00:58:52.619
it's a little early to say that we won't necessarily

00:58:52.628 --> 00:58:54.800
need the ORDC or that we would modify it in a

00:58:54.809 --> 00:58:58.128
specific way. But I think we should be evaluating all

00:58:58.139 --> 00:59:01.099
of these market incentives that we are developing and

00:59:01.110 --> 00:59:05.769
putting forward while we are, you know as we, as we

00:59:05.780 --> 00:59:08.688
complete a design, put it in, we should pause and do

00:59:08.699 --> 00:59:11.300
a reflection and say, OK, as an example, when or DC

00:59:11.309 --> 00:59:14.260
goes in and then which is scheduled to go in in December

00:59:14.309 --> 00:59:17.090
we should look and see how are these resources, I mean

00:59:17.099 --> 00:59:19.688
how are these services and products performing? What

00:59:19.699 --> 00:59:21.840
impact is it having to some of the key metrics on the

00:59:21.849 --> 00:59:26.159
grid? How is it driving resource interconnection intentions

00:59:26.168 --> 00:59:27.958
as we see that through the generation interconnection

00:59:27.969 --> 00:59:31.250
queue, how is it driving real time pricing? How is

00:59:31.260 --> 00:59:33.398
it supporting, you know, the underlying goals of the

00:59:33.409 --> 00:59:35.579
grid? If we do that at each step as we start to

00:59:35.590 --> 00:59:38.909
layer in this portfolio solutions, I think we should

00:59:38.918 --> 00:59:41.949
have a mindset of continuously improving that suite

00:59:41.958 --> 00:59:44.543
of tools in order to achieve exactly what you described

00:59:44.554 --> 00:59:47.534
only have the tools services that are necessary and

00:59:47.543 --> 00:59:49.954
valuable in order to deliver on those mandates. Well

00:59:49.965 --> 00:59:52.614
I just want to make sure that as we layer in new

00:59:52.625 --> 00:59:56.003
things we consider to take out other things that may

00:59:56.014 --> 00:59:58.514
not be necessary. Evaluate the whole portfolio,

00:59:58.523 --> 01:00:00.833
not just what we put in. (item:26:Commissioner Glotfelty's comments on ancillary service review) That gets me to the point

01:00:00.844 --> 01:00:03.313
that I mean, we still haven't really done an ancillary

01:00:03.324 --> 01:00:06.394
service review as required in Senate Bill 3. And

01:00:06.648 --> 01:00:08.409
that's something that I'd like to bring up at some

01:00:08.418 --> 01:00:11.938
point in time. I mean, I know we continue to implement

01:00:12.119 --> 01:00:18.188
House Bill 1500 which has changed some of the parameters

01:00:18.199 --> 01:00:20.599
of that. But I think it's really important that we

01:00:20.610 --> 01:00:23.860
get an understanding and we give an understanding to

01:00:23.869 --> 01:00:27.148
this market. What are the ancillary services and why

01:00:27.159 --> 01:00:30.128
we are using them? And what they can bid into and what

01:00:30.139 --> 01:00:35.780
they can't. Ancillary services are not a capacity construct

01:00:36.628 --> 01:00:42.500
uh according with PUC Rules, PURA, NERC you know. Ancillary

01:00:42.510 --> 01:00:45.530
services are help are designed to help uh ensure that

01:00:45.539 --> 01:00:49.039
the transmission system stays um adequate and the power

01:00:49.050 --> 01:00:51.619
can flow reliably across the system. They're operationally

01:00:51.628 --> 01:00:53.909
focused, operationally focused. That's right. So I

01:00:53.918 --> 01:00:58.300
just, you know, as we go forward. I, I'm uh you know

01:00:58.699 --> 01:01:02.804
I think we have to work even closer to, to determine

01:01:02.813 --> 01:01:06.204
this. Um and to figure out which of those Ancillary

01:01:06.215 --> 01:01:10.485
services are necessary as our uh system changes, as

01:01:10.494 --> 01:01:12.715
our demand changes. And as our generation changes,

01:01:12.724 --> 01:01:15.244
we, we have to be flexible enough to do that. And y'all

01:01:15.253 --> 01:01:20.050
have to be flexible enough to um admit when, as do

01:01:20.099 --> 01:01:23.398
we, when this service isn't needed anymore or that

01:01:23.409 --> 01:01:26.050
it needs to be modified. (item:26:Pablo Vegas on flexibility) Really the term, the term

01:01:26.059 --> 01:01:28.590
that's the operating term in grid operators today is

01:01:28.599 --> 01:01:31.349
flexibility. Flexibility is becoming a more critical

01:01:31.360 --> 01:01:34.809
element in how we structure the services, how we run

01:01:34.820 --> 01:01:37.550
operations because of the need to adapt very quickly

01:01:37.559 --> 01:01:40.159
to change in conditions in real time, the rapidly changing

01:01:40.168 --> 01:01:43.539
in resource mix, the rapidly changing. So flexibility

01:01:43.550 --> 01:01:45.659
is really critical. And so we have to be in a mindset

01:01:45.668 --> 01:01:48.168
of change is going to be the norm. And we got to

01:01:48.179 --> 01:01:50.739
continue to evaluate ways to continue to improve. (item:26:Commissioner McAdams thoughts on real time co-optimization) But

01:01:50.750 --> 01:01:56.139
again, not to cruise right past the obvious event that

01:01:56.148 --> 01:01:59.949
would change the analysis on whether it's needed real

01:01:59.958 --> 01:02:03.300
time co-optimazation is supposed to harmonize our robust

01:02:03.309 --> 01:02:05.260
suite of ancillary service and the dispatch of those

01:02:05.269 --> 01:02:08.739
services. And thus the negate the impact ultimately

01:02:08.750 --> 01:02:11.728
of ORDC. It will still have value but not to the

01:02:11.739 --> 01:02:13.619
degree that we are accustomed to today. And we won't

01:02:13.628 --> 01:02:16.780
know what that's like until we get there and analyze

01:02:16.789 --> 01:02:19.139
it. (item:26:Chairwoman Jackson on holistic view of the Big 5) And I think that's one of the reasons why you call

01:02:19.148 --> 01:02:21.208
it kind of the big five is that we're not just looking

01:02:21.219 --> 01:02:24.378
at one separately, but the whole idea here is to look

01:02:24.389 --> 01:02:27.340
at them all, as you said, holistically. How does it

01:02:27.349 --> 01:02:30.010
impact the system as a whole. And then of course, along

01:02:30.019 --> 01:02:33.559
the way, look for continuous improvement driven by

01:02:33.570 --> 01:02:38.340
data and analysis. Thank you. Thank you for those comments.

01:02:40.110 --> 01:02:42.329
(item:30:Pablo Vegas on reliability standard effort) So I'm going to move on to the reliability standard

01:02:42.340 --> 01:02:46.398
effort. So this work is really has three core components

01:02:46.409 --> 01:02:49.199
to it. The first is the development development of

01:02:49.208 --> 01:02:52.219
the actual reliability standard and the parameters

01:02:52.228 --> 01:02:55.110
that will make up the definition of it. We've talked

01:02:55.119 --> 01:02:57.994
about in prior open meetings that we're working on

01:02:58.003 --> 01:03:02.054
parameters that are designed to not only identify what

01:03:02.063 --> 01:03:04.744
would be a reasonable loss of Load expectation in terms

01:03:04.753 --> 01:03:08.014
of frequency. But adding to that a definition of the

01:03:08.023 --> 01:03:10.333
magnitude, if there were to be a loss of Load event

01:03:10.344 --> 01:03:13.610
what that limit should be and if there was to be and

01:03:13.619 --> 01:03:16.128
what the duration of a loss of Load event could be

01:03:16.139 --> 01:03:19.300
and establishing limits for those. And then a probability

01:03:19.309 --> 01:03:22.449
exceedance criteria that we should design the system

01:03:22.458 --> 01:03:25.199
to achieve as it relates to those three parameters

01:03:25.208 --> 01:03:27.269
So those are the components of the reliability standard

01:03:27.280 --> 01:03:30.000
itself. But in addition, in the work of developing

01:03:30.010 --> 01:03:32.139
a reliability standard, there are two important studies

01:03:32.148 --> 01:03:34.949
that have to be done to help inform the decision making

01:03:34.958 --> 01:03:37.728
around the reliability standard. And that includes

01:03:37.800 --> 01:03:43.019
the value of loss loadl and the cost of new entrants

01:03:43.030 --> 01:03:46.989
cone. Those two are studies that can be done, the value

01:03:47.000 --> 01:03:50.579
of lost loads is effectively serving customers across

01:03:50.590 --> 01:03:55.519
differing classes to determine what the value of energy

01:03:55.530 --> 01:03:57.289
would be at a point in time when it would not be

01:03:57.300 --> 01:04:00.750
available in order to help assess how much should be

01:04:00.760 --> 01:04:03.918
invested to achieve a reliability standard. So as you

01:04:03.929 --> 01:04:06.409
look at, you know, the cost of achieving a reliability

01:04:06.418 --> 01:04:08.639
standard, what's on the other side of the equation

01:04:08.648 --> 01:04:12.000
is an assessment of the value of los loads. And so

01:04:12.010 --> 01:04:14.628
this study is an important factor in order to come

01:04:14.639 --> 01:04:17.219
up with a good recommendation on a reliability standard

01:04:18.159 --> 01:04:20.579
And then another the cone is one of the underlying

01:04:20.590 --> 01:04:23.260
drivers around the cost of achieving a reliability

01:04:23.269 --> 01:04:26.010
standard. Because the reliability standard will effectively

01:04:26.019 --> 01:04:29.418
describe a resource mix needed in the ERCOT grid in

01:04:29.429 --> 01:04:32.409
order to achieve whatever that standard comes out to

01:04:32.668 --> 01:04:35.369
And then the cost to get to that resource mix is informed

01:04:35.378 --> 01:04:38.958
by the cost of new entrants cone. So that value would

01:04:38.969 --> 01:04:41.878
say what it would cost to build the next lowest cost

01:04:41.889 --> 01:04:44.599
generating capacity in order to achieve that reliability

01:04:44.610 --> 01:04:47.958
standard. So having a current view on cone is important

01:04:47.969 --> 01:04:50.719
to having a good cost profile for the reliability standard

01:04:51.369 --> 01:04:55.510
where we stand today is we have proposed 48 scenarios

01:04:55.519 --> 01:04:59.219
that model variations of the loss of Load expected

01:04:59.228 --> 01:05:01.889
the duration and the magnitude along with differing

01:05:01.898 --> 01:05:04.878
resource mixes. Our team is working through running

01:05:04.889 --> 01:05:08.039
those scenarios and so that we can bring those the

01:05:08.050 --> 01:05:11.269
outcomes of goes back to the Commission for discussion

01:05:11.280 --> 01:05:13.780
as to what it tells us in terms of the resource mixes

01:05:13.789 --> 01:05:16.059
and differing scenarios. And at which point, we would

01:05:16.070 --> 01:05:18.719
expect to get, you know, narrow down the funnel and

01:05:18.728 --> 01:05:21.449
focus the conversation more towards, you know, let's

01:05:21.458 --> 01:05:25.360
focus in on these set of these sets of parameters to

01:05:25.369 --> 01:05:28.489
see how those would work. Our hope is to have those

01:05:28.500 --> 01:05:31.239
outputs available for the September 14th open meeting

01:05:31.250 --> 01:05:35.019
coming up next month. In parallel, we're working with

01:05:35.030 --> 01:05:38.110
the Lawrence Berkeley National Lab. They have been

01:05:38.119 --> 01:05:40.719
working on doing some study work and in fact, they're

01:05:40.728 --> 01:05:43.679
working with a utility company here in Texas, AEP Texas

01:05:43.688 --> 01:05:46.570
on some work related to that. And so we want to see

01:05:46.579 --> 01:05:49.119
if we could leverage some of their existing study development

01:05:49.128 --> 01:05:51.898
work and apply broadly across the ERCOT grid to jump

01:05:51.909 --> 01:05:54.378
start and accelerate that work with ball. So we're

01:05:54.389 --> 01:05:57.590
in conversations with them and we will, we will be

01:05:57.599 --> 01:05:59.849
reporting back on the outcomes of that. And if we're

01:05:59.860 --> 01:06:02.179
able to leverage that information to move forward more

01:06:02.188 --> 01:06:05.530
quickly with that work here. And right now, we're also

01:06:05.539 --> 01:06:09.510
initiating an RFP for the Cohn study. Across all three

01:06:09.519 --> 01:06:13.849
of those we expect to have the iterations worked through

01:06:13.860 --> 01:06:16.728
over the next quarter with the Commission. And then

01:06:16.739 --> 01:06:19.780
we would expect to be able to have the results of all

01:06:19.789 --> 01:06:22.889
of the analysis with preliminary input sometime in

01:06:22.898 --> 01:06:25.409
the first quarter of next year. And then depending

01:06:25.418 --> 01:06:28.320
on the timetable for rule making, we could have a reliability

01:06:28.329 --> 01:06:30.449
standard sometime established sometime in the middle

01:06:30.458 --> 01:06:33.769
of next year, which would be very helpful in evaluating

01:06:33.969 --> 01:06:38.010
the cost benefit of the various other tools that we're

01:06:38.019 --> 01:06:41.389
going to be rolling out the DRRS, the performance

01:06:41.398 --> 01:06:43.398
credit mechanism as two of those.

01:06:46.289 --> 01:06:49.590
(item:30:Commissioner Cobos on cone study) Pablo, thank you for that overview. And, and um I thought

01:06:49.599 --> 01:06:52.349
you were following on the reliability standard, did

01:06:52.360 --> 01:06:56.478
provide a lot of detail on the robust process that

01:06:56.489 --> 01:07:01.760
ERCOT is undergoing to help us establish a um robust

01:07:01.769 --> 01:07:06.639
reliability standard. And um, so, you know, I, I, and

01:07:06.648 --> 01:07:09.628
I'm glad that you know you have the, the boll study seems

01:07:09.639 --> 01:07:12.239
to be go you know proceeding in a fashion that that's

01:07:12.250 --> 01:07:14.769
um holistic with respect to the literature review and

01:07:14.780 --> 01:07:16.809
the customer survey that I know Commissioner McAdams

01:07:16.820 --> 01:07:21.208
had sort of um, been asking for. Which is very good.

01:07:21.750 --> 01:07:25.780
It's the, the boll study layout good on you Staff.

01:07:25.789 --> 01:07:28.708
Thanks Woody. Um I'm gonna get it to SPP they'll probably

01:07:28.719 --> 01:07:29.699
use it as a template.

01:07:31.898 --> 01:07:34.269
The cone study thank you for that. Um I, I think the

01:07:34.280 --> 01:07:36.628
cone studies as I've articulated before is, is important

01:07:36.639 --> 01:07:39.228
for two reasons. One is sort of a parameter for the

01:07:39.239 --> 01:07:42.958
market that, you know, stakeholders ERCOT the independent

01:07:42.969 --> 01:07:45.378
market, monitor others look at to see if you know how

01:07:45.389 --> 01:07:47.489
much revenue is being put into the market. And have

01:07:47.500 --> 01:07:49.909
we achieved the cost of new entry and updating that

01:07:49.918 --> 01:07:55.610
to um today's um market dynamics is important. I it

01:07:55.619 --> 01:07:58.398
secondly, I think the cone study is even more critically

01:07:58.409 --> 01:08:01.849
important. Well, it's maybe not even more but also

01:08:01.860 --> 01:08:06.128
required by House Bill 1500 in our assessment of the

01:08:06.139 --> 01:08:11.530
PUC M. And so, um I think overall, I think, you know

01:08:11.539 --> 01:08:15.789
that study will provide multiple uh benefits. I have

01:08:15.800 --> 01:08:19.208
just one point of clarification um on page three of

01:08:19.220 --> 01:08:20.159
the filing.

01:08:23.039 --> 01:08:24.418
And I'll let you pull it up. So,

01:08:26.587 --> 01:08:29.969
excuse me, one second let me grab it. Is this on

01:08:29.979 --> 01:08:33.898
the, the word that's used on page three? Yes. Okay.

01:08:49.878 --> 01:08:52.180
It's not the reliability standard. Yeah, yes, sir.

01:09:12.409 --> 01:09:15.418
Okay. Lori, I can just tell him if he, it's the word

01:09:15.430 --> 01:09:18.489
mandatory. I mean, I just didn't want to just read

01:09:18.500 --> 01:09:20.159
him some. You know, I didn't want to just read out

01:09:20.168 --> 01:09:23.430
to you Pablo. So hopefully that's helpful. I, I'm not trying

01:09:23.439 --> 01:09:25.529
to, you know, put you on the spot here. But I mean

01:09:25.539 --> 01:09:27.918
the way I understand these filings are there, you know

01:09:27.930 --> 01:09:32.239
your your initial sort of response on some of the tasks

01:09:32.250 --> 01:09:34.770
that we were looking at on market reform and they were

01:09:34.779 --> 01:09:37.909
gonna be living documents, right? So, you know, this

01:09:37.918 --> 01:09:40.689
is your first iteration and I just wanna make sure

01:09:40.699 --> 01:09:44.659
that we, you know, we kind of keep sort of um making

01:09:44.668 --> 01:09:47.020
sure you get our feedback and, and we're all sort of

01:09:47.029 --> 01:09:50.958
moving on with this living document and the same um

01:09:50.970 --> 01:09:53.649
in the same fashion. (item:30:Commissioner Cobos' question on mandatory reliability standard) So the the one sentence that I

01:09:53.659 --> 01:09:56.128
read was that it says these market initiatives will

01:09:56.140 --> 01:09:58.729
implement under scope, these market initiatives will

01:09:58.739 --> 01:10:02.109
implement a mandatory reliability standard and determine

01:10:02.119 --> 01:10:05.208
updated input values for vol and cone to inform that

01:10:05.220 --> 01:10:09.229
standard, the word mandatory. And, and I know there's

01:10:09.239 --> 01:10:11.430
people in the audience that quiver at that right? Um

01:10:11.439 --> 01:10:15.109
mandatory versus target, target means for most people

01:10:15.119 --> 01:10:17.588
in our market, competitive market versus capacity market

01:10:18.458 --> 01:10:19.140
And

01:10:21.220 --> 01:10:23.729
I just think right now, you know, SB3 requires

01:10:23.739 --> 01:10:26.579
us to establish a reliability standard, but it doesn't

01:10:26.588 --> 01:10:31.548
say that we must mandate it. And so I think that right

01:10:31.560 --> 01:10:33.649
now where we're gonna get to that decision, it's in

01:10:33.659 --> 01:10:36.418
the back end and it may be even a decision that we

01:10:36.430 --> 01:10:40.770
ourselves don't make. Um because of the mass market

01:10:40.779 --> 01:10:43.640
structure implications that the word mandatory often

01:10:43.649 --> 01:10:47.239
brings with it. So um I just wanted to highlight that

01:10:47.250 --> 01:10:50.329
and, and kind of get, I mean, are you all suggesting

01:10:50.338 --> 01:10:54.548
that we mandate the reliability standard or like? Is

01:10:54.560 --> 01:10:57.479
it just, can you explain that sentence?

01:10:59.600 --> 01:11:01.819
(item:30:Pablo Vegas with ERCOT on mandatory reliability standard) Well, I guess I can look at it from two points of

01:11:01.829 --> 01:11:04.399
view. One, it's mandatory that we develop it. So it's

01:11:04.409 --> 01:11:06.548
a mandatory reliability standard because mandated by

01:11:06.560 --> 01:11:10.029
legislation. But then the real value in a liability

01:11:10.039 --> 01:11:12.220
standard is what happens when you have one. And so

01:11:12.229 --> 01:11:14.159
if the reliability standard indicates that we're going

01:11:14.168 --> 01:11:17.548
to have shortfalls in reliability, my expectation would

01:11:17.560 --> 01:11:19.319
be that this Commission would look at that standard

01:11:19.329 --> 01:11:22.449
as something we need to try to drive the market to

01:11:22.458 --> 01:11:24.350
achieve that reliability standard. And that, that would

01:11:24.359 --> 01:11:28.000
be a mandate in terms of our collective mandates for

01:11:28.009 --> 01:11:30.659
our accountabilities. So that's how I look at it. Okay.

01:11:30.890 --> 01:11:33.430
So semantically mandatory that we have to create it

01:11:33.439 --> 01:11:36.418
it's a required, I appreciate that. (item:30:Commissioner Cobos' thoughts on a tool to meet the mandatory reliability standard) The second part

01:11:36.430 --> 01:11:41.079
is I think, you know, because we're in a market where

01:11:41.088 --> 01:11:44.128
there's a variety of tools that help us achieve our

01:11:44.140 --> 01:11:47.640
reliability standard, both on the demand side. Right

01:11:47.649 --> 01:11:50.418
and the supply side. And there's just so many tools

01:11:50.430 --> 01:11:52.869
it, it's, you know, I'm wondering how we're gonna

01:11:52.878 --> 01:11:55.729
be able to mandate that we meet the reliability standard

01:11:55.739 --> 01:11:58.659
with all of the tools that, you know, there's not one

01:11:58.668 --> 01:12:00.869
set tool that's going to get us there. Right. Right

01:12:00.878 --> 01:12:03.189
It's a complicated market and we have to be looking

01:12:03.199 --> 01:12:05.739
at supply side solutions, we have to look at transmission

01:12:05.750 --> 01:12:07.640
solutions. We have to look at loads side solutions

01:12:07.649 --> 01:12:10.329
demand side solutions. There are some tools that are

01:12:10.338 --> 01:12:13.060
more in the purview of the commission under current

01:12:13.069 --> 01:12:16.539
statute than others. And I guess I would look at this

01:12:16.878 --> 01:12:18.850
once we have our liability standard and if we know

01:12:18.859 --> 01:12:20.529
that there's a reasonable expectation that we can't

01:12:20.539 --> 01:12:22.770
achieve it, then we would look to leverage all the

01:12:22.779 --> 01:12:25.180
tools that we have available in order to achieve it

01:12:25.399 --> 01:12:27.829
and then advocate for changes in policy in order to

01:12:27.838 --> 01:12:30.979
be able to do so if we needed to. And that that

01:12:30.989 --> 01:12:33.640
would be a mandate on each of our respective accountabilities

01:12:33.649 --> 01:12:39.640
to do so. Okay. Um All right. I mean it, it are

01:12:39.649 --> 01:12:42.819
you all good with? (item:30:Commissioner McAdams' on target reliability standard) Yeah I, I, there, there is a there

01:12:42.829 --> 01:12:47.310
is a bright line uh between a reliability standard

01:12:47.319 --> 01:12:51.829
that we are going to mandate some single mechanism

01:12:51.859 --> 01:12:54.708
to achieve. And I, I believe the Legislature spoke

01:12:54.720 --> 01:12:57.310
to that and, and we certainly don't want to relitigate

01:12:57.539 --> 01:13:02.798
the Session, um policy parameters were clarified in

01:13:03.159 --> 01:13:07.069
um I've said it to, to policy makers. My interpretation

01:13:07.079 --> 01:13:09.430
of legislative action was that they ordered us to pursue

01:13:09.439 --> 01:13:12.770
a sum of all parts approach where there were uh a,

01:13:12.779 --> 01:13:17.220
a diverse menu of um resource adequacy, reliability

01:13:17.229 --> 01:13:22.890
driven um tools that we were to use to try to uh

01:13:22.949 --> 01:13:30.458
channel uh a um a policy of achieving a target reliability

01:13:30.470 --> 01:13:33.668
standard and, and it is a target because we know where

01:13:33.680 --> 01:13:35.378
we've got to get to and we've got to try to make

01:13:35.390 --> 01:13:38.819
all this work together in a harmonized framework to

01:13:38.829 --> 01:13:42.088
achieve it. And uh I think that's what poor Paulo is

01:13:42.100 --> 01:13:45.119
trying to put together right now um in five different

01:13:45.128 --> 01:13:48.088
paths. And, and I think we're on the same page. It's

01:13:48.100 --> 01:13:50.088
just the word mandatory made it seem like we already

01:13:50.100 --> 01:13:52.180
made a decision, it's going to be mandated. (item:30:Pablo Vegas on clarifying language) Yeah, I

01:13:52.189 --> 01:13:54.250
don't think the word supersedes any of the authorities

01:13:54.259 --> 01:13:56.810
that uh the Commission has or that ERCOT has. It's

01:13:56.819 --> 01:13:59.869
just, I think intended to um establish the fact that

01:13:59.878 --> 01:14:02.239
one, it's a Legislative requirement to have one and

01:14:02.250 --> 01:14:04.239
that once established that we should be using all measures

01:14:04.250 --> 01:14:07.140
available to us to achieve it. Okay. All right. Thank

01:14:07.149 --> 01:14:09.739
you. (item:30:Chairwoman Jackson on path forward with a reliability standard) You know, you talked a little bit about kind of

01:14:09.750 --> 01:14:12.430
the path forward. But I think part of the value of

01:14:12.739 --> 01:14:16.359
your overviews and also your work flow diagrams is

01:14:16.369 --> 01:14:20.060
that we can kind of see the whole picture and not only

01:14:20.069 --> 01:14:23.798
see the work that is before us, but also what we have

01:14:23.810 --> 01:14:27.628
accomplished. So from the reliability, standard standpoint

01:14:27.640 --> 01:14:30.949
I mean, that first little box was, well, do we do what's

01:14:30.958 --> 01:14:34.020
been traditional, which is the 1D or do we look

01:14:34.029 --> 01:14:39.479
at duration, frequency and uh intensity? And so that

01:14:39.489 --> 01:14:42.680
came to the Commission, we made that determination

01:14:42.930 --> 01:14:45.859
went back to ERCOT, they said, OK, the next step is

01:14:45.869 --> 01:14:48.659
let's look at the resource mix and we want to get the

01:14:48.668 --> 01:14:52.479
data together that provides the best information that

01:14:52.489 --> 01:14:56.600
we can for the input that's needed. And so you recommended

01:14:56.609 --> 01:14:59.529
the scenarios, we took a look at it said yes, that

01:14:59.539 --> 01:15:02.699
looks good. You're on to the next step. So I think

01:15:02.708 --> 01:15:05.689
uh you know, part of this work effort moving forward

01:15:05.979 --> 01:15:10.048
and what you're presenting today and the real value

01:15:10.060 --> 01:15:12.720
sometimes is the process because you're successful

01:15:12.729 --> 01:15:16.390
because you execute to a process and you get engagement

01:15:16.399 --> 01:15:19.418
from the public and stakeholders. So we have alignment

01:15:19.668 --> 01:15:25.458
we have transparency and we have a workflow plan that

01:15:25.470 --> 01:15:30.020
you presented both schematically as well as factually

01:15:30.100 --> 01:15:32.649
So I think it's really particularly for the reliability

01:15:32.659 --> 01:15:35.668
standards. It's a great starting point. And then, of

01:15:35.680 --> 01:15:38.628
course, as you, as you mentioned, the whole idea is

01:15:38.640 --> 01:15:41.298
that it's a living document. And so as we move forward

01:15:41.310 --> 01:15:44.819
on continuous improvement, we'll be able to add things

01:15:44.829 --> 01:15:47.789
to the document, but it'll, it'll kind of keep us all

01:15:47.798 --> 01:15:50.369
I think accountable because we're very much accountable

01:15:50.378 --> 01:15:52.930
to make sure that all of these work efforts happen

01:15:52.939 --> 01:15:57.088
and move forward. Pablo one more thing. Um in, in

01:15:57.100 --> 01:16:00.869
terms of the uh contractor who will manage the ball

01:16:00.878 --> 01:16:05.109
survey, when do we think that will be um uh publicly

01:16:05.119 --> 01:16:07.600
available? And the reason I ask is I'm trying to shuttle

01:16:07.609 --> 01:16:11.708
pass information to SPP, so that again, there's a regional

01:16:11.720 --> 01:16:14.869
uh type effort underway. So that ERCOT and the Greater

01:16:14.878 --> 01:16:19.689
Midwest has a, a similar uh approach. Yeah, we're uh

01:16:19.699 --> 01:16:22.208
looking over my shoulder, phoning a friend here. Uh

01:16:22.220 --> 01:16:25.619
they're not picking up. The um. Understand that happens

01:16:25.628 --> 01:16:30.000
to me all the time. The um it's soon where we, we're

01:16:30.009 --> 01:16:32.810
pretty deep into the negotiations. So it's just confidential

01:16:32.819 --> 01:16:35.609
until we can, you know, get that contract in. But um

01:16:35.619 --> 01:16:37.489
I expect it to be, you know, probably in the coming

01:16:37.500 --> 01:16:39.939
weeks. So anyway, your Staff will be in Dallas at the

01:16:39.949 --> 01:16:43.430
Resource Adequacy Summit uh where MISO, SPP will be in

01:16:43.439 --> 01:16:47.729
attendance as well as FERC. Um if, if you could just ensure

01:16:47.739 --> 01:16:50.069
to cross talk with them about, I mean, this is a great

01:16:50.079 --> 01:16:52.729
layout to let them know kind of what your plan is.

01:16:52.739 --> 01:16:55.359
So that hopefully that influences their decisions on

01:16:55.369 --> 01:16:57.708
how to move forward and, and get their own ball studies

01:16:57.720 --> 01:17:01.409
underway as well. Thank you for that. (item:30:Pablo Vegas on progress of initiatives) We will, we will

01:17:01.418 --> 01:17:03.909
definitely do that and I appreciate your comments to

01:17:03.918 --> 01:17:06.609
Chair Jackson because there is, there really has been

01:17:06.619 --> 01:17:09.149
a lot of progress made on these initiatives. There

01:17:09.159 --> 01:17:11.529
was a lot of things that came out of the last legislative

01:17:11.539 --> 01:17:13.529
session, we have been working and making progress,

01:17:13.600 --> 01:17:15.930
progress on moving the reliability standard forward

01:17:15.939 --> 01:17:19.640
getting that RDC change ready to go as soon as possible

01:17:19.750 --> 01:17:22.298
and starting to make progress on DRRSs as I'll describe

01:17:22.310 --> 01:17:27.319
as well. So there's a lot of these initiatives fall

01:17:27.329 --> 01:17:30.079
on the resources between our collective organizations

01:17:30.088 --> 01:17:33.930
on the similar resources. And so it's a pancaking effect

01:17:33.939 --> 01:17:35.859
of multiple things that have to be moved together.

01:17:35.869 --> 01:17:37.699
But a lot of progress has been made and these tools

01:17:37.708 --> 01:17:40.399
help to illustrate where we are and how that progress

01:17:40.409 --> 01:17:43.390
is moving forward and um and to communicate that clearly

01:17:43.399 --> 01:17:47.739
So thank you. (item:30:Commissioner Glotfelty on bringing in external views) Uh Pablo, I wanted to say, um I'm appreciative

01:17:47.750 --> 01:17:50.439
that you all are engaging with Lawrence Berkeley National

01:17:50.449 --> 01:17:53.979
Lab. Um I'm actually on the project advisory committee

01:17:53.989 --> 01:17:56.878
for updating the ice calculator. I have been for a

01:17:56.890 --> 01:17:59.239
year and a half or so since they began the effort.

01:17:59.250 --> 01:18:02.739
Um I'm uh I'm happy to see. I know AEP has been

01:18:02.750 --> 01:18:05.609
uh supportive of using that tool, other utilities I

01:18:05.619 --> 01:18:09.640
think are perhaps still evaluating it. But I think

01:18:09.649 --> 01:18:13.279
as I've said in numerous settings that bringing in

01:18:13.289 --> 01:18:18.399
some external views should inform us, help inform us

01:18:18.409 --> 01:18:21.838
to make the right decisions and we shouldn't be afraid

01:18:21.850 --> 01:18:25.989
to have other views and other mindsets that should

01:18:26.000 --> 01:18:29.819
be helpful to be informing us. And the folks at LBL

01:18:29.829 --> 01:18:33.128
I think are fantastic. They helped me from hour one

01:18:33.140 --> 01:18:37.329
on the 2003 blackout investigation and they are fantastic

01:18:37.338 --> 01:18:39.979
as are many of the other labs. But the ice calculators

01:18:39.989 --> 01:18:43.819
is something that could be very valuable going forward

01:18:43.979 --> 01:18:46.640
I agree. And I think for clarity, that's the interruption

01:18:46.979 --> 01:18:50.753
interruption cost estimator. Right. So, and it could

01:18:50.765 --> 01:18:54.664
be valuable in uh evaluating uh resiliency plans and

01:18:54.673 --> 01:18:58.083
other things that it may have a lot of uh value uh

01:18:58.095 --> 01:19:00.784
to this Commission and other Commissions. But I'm glad

01:19:00.793 --> 01:19:03.854
that you all have, have engaged them at least uh informally

01:19:03.864 --> 01:19:05.814
hopefully, formally. Thank you for your, thank you

01:19:05.824 --> 01:19:07.503
for your encouragement and suggestion on that part

01:19:07.515 --> 01:19:08.524
too. That was very helpful.

01:19:10.369 --> 01:19:14.039
Okay. So we have DRRS. (item:26:Pablo Vegas on DRRS) We have DRRS ahead of us. So the

01:19:14.048 --> 01:19:17.338
dispatchable reliability reserve service quickly as

01:19:17.350 --> 01:19:19.699
a background for definition, that is a new ancillary

01:19:19.708 --> 01:19:23.430
service that was mandated in House Bill 1500. It has

01:19:23.439 --> 01:19:26.588
operating requirements that the resources that deliver

01:19:26.600 --> 01:19:30.390
that whether they be loaded or supply have to be available

01:19:30.399 --> 01:19:33.680
to come online in two hours. And they have to be able

01:19:33.689 --> 01:19:36.890
to run and operate for a minimum of four hours. And

01:19:36.899 --> 01:19:39.279
additionally, they have, we have to ERCOT needs to

01:19:39.289 --> 01:19:41.970
reduce RUC by an equivalent amount of DRRS that

01:19:41.979 --> 01:19:44.939
we acquire. So, one of the stated goals of this Ancillary

01:19:44.949 --> 01:19:48.899
service is to help reduce the RUC incidents in ERCOT

01:19:49.819 --> 01:19:53.439
We evaluated early on several approaches on how to

01:19:53.449 --> 01:19:56.458
make this deliver this Ancillary service under a very

01:19:56.470 --> 01:19:59.720
quick timeline. For context. The last Ancillary service

01:19:59.729 --> 01:20:02.409
we developed was the ERCOT Contingency Reserve Service

01:20:02.708 --> 01:20:05.509
It took a full three years of development and testing

01:20:05.520 --> 01:20:08.708
before that was rolled out. So delivering a new Ancillary

01:20:08.720 --> 01:20:11.689
service by next December is a very, very quick timeline.

01:20:12.159 --> 01:20:15.640
So as we looked at the of the potential ways to develop

01:20:15.649 --> 01:20:18.979
this, it limited us in some ways the options that we

01:20:18.989 --> 01:20:21.560
had in order to make it by that date, by that timeline

01:20:21.949 --> 01:20:24.729
we looked at three approaches. One of them was a traditional

01:20:24.739 --> 01:20:27.699
standalone, new Ancillary service similar to how we

01:20:27.708 --> 01:20:31.279
developed the ECRS. We looked at potentially replacing

01:20:31.289 --> 01:20:34.369
our current Nonspin product. And then we looked at

01:20:34.378 --> 01:20:37.109
a third way of doing it which is creating a subtype

01:20:37.119 --> 01:20:40.119
of the Nonspin product. In the end, after getting a

01:20:40.128 --> 01:20:42.750
lot of input from our operations team and how they

01:20:42.759 --> 01:20:45.789
utilize our current Ancillary services suite, we felt

01:20:45.798 --> 01:20:49.539
it would be operationally more reliable and safer to

01:20:49.548 --> 01:20:52.449
preserve the value of the Nonspin product. And to add

01:20:52.458 --> 01:20:55.659
a sub type that would allow for products between the

01:20:55.668 --> 01:20:58.338
30 minutes and two hours to come online to meet that

01:20:58.350 --> 01:21:01.588
requirement for DRRS and then deliver on the four

01:21:01.600 --> 01:21:04.270
hour delivery capacity requirement. And then we would

01:21:04.279 --> 01:21:06.970
independently have to manage our RUC strategy in terms

01:21:06.979 --> 01:21:10.009
of rucing based on how much the DRRS we purchased in

01:21:10.020 --> 01:21:12.789
conjunction with Nonspin. Will, will those settle the

01:21:12.798 --> 01:21:17.770
same Pablo? Again, those two subcategories I know Kenan is

01:21:17.779 --> 01:21:20.989
leaning forward. Okay.

01:21:23.750 --> 01:21:26.229
One single clearing price for the ancillary. (item:26:Pablo Vegas on a single clearing price for the ancillary) Right.

01:21:26.239 --> 01:21:28.878
Because it would be essentially a subtype of the existing

01:21:28.890 --> 01:21:31.779
Nonspin. We would be able to segment the resources

01:21:31.789 --> 01:21:34.779
out and identify them independently, but they would

01:21:34.789 --> 01:21:37.220
settle at one common price. You're gonna pay a peaker

01:21:37.229 --> 01:21:39.789
the same as you're going to pay something that ramps

01:21:39.798 --> 01:21:41.640
really slow. Potentially,

01:21:43.310 --> 01:21:45.449
it's not optimal. As we said, the optimal would be

01:21:45.458 --> 01:21:48.109
to develop a standalone Ancillary service that would

01:21:48.119 --> 01:21:51.189
be able to be co-optimized in its own way with the

01:21:51.199 --> 01:21:54.668
SCAD engine. But it's not possible to achieve a Legislative

01:21:54.680 --> 01:21:56.208
date by doing it that way.

01:21:57.909 --> 01:22:00.270
The Staff made the final decision or y'all still debating

01:22:00.279 --> 01:22:02.279
it. We're still working through workshops right now

01:22:02.289 --> 01:22:04.029
but that's the direction we're planning to move forward

01:22:04.039 --> 01:22:05.319
on at this point. Okay.

01:22:10.298 --> 01:22:15.289
(item:26:Pablo Vegas on DRRS timing) So that, so from a timing on DRRS between September

01:22:15.298 --> 01:22:17.319
and November. We're going to file the NPRR through

01:22:17.329 --> 01:22:20.720
the stakeholder process related to the revision to

01:22:20.729 --> 01:22:23.369
create this product. We'll plan to present a goal to

01:22:23.378 --> 01:22:26.048
present this to the Board in December and then to this

01:22:26.060 --> 01:22:28.909
Commission in January for approval. So we've got a

01:22:28.918 --> 01:22:31.579
little bit of time just a couple of months to get the

01:22:31.588 --> 01:22:34.430
NPRR established and then the development of the actual

01:22:34.439 --> 01:22:37.060
product would be between January and November. So the

01:22:37.069 --> 01:22:39.250
development and testing with an intention to go live

01:22:39.259 --> 01:22:44.810
by December 1. Okay. So again, chart with all of the

01:22:44.819 --> 01:22:48.119
dates on it. And then also, I guess there's going to

01:22:48.128 --> 01:22:51.458
be an evaluation period um six months or a year that

01:22:51.470 --> 01:22:54.500
you've already kind of put in your overview to take

01:22:54.509 --> 01:22:56.409
a look at it as we would with the other.

01:22:58.009 --> 01:22:59.859
(item:26: Pablo Vegas on a schedule for various services to confirm performance) And back to Commissioner Glotfelty Point. I think that

01:22:59.869 --> 01:23:02.489
needs to be something that we on a scheduled basis

01:23:02.500 --> 01:23:04.909
And with your input, when you'd like to see feedback

01:23:04.918 --> 01:23:07.109
in terms of how these various services and products

01:23:07.119 --> 01:23:09.689
are performing so that we can evaluate them in conjunction

01:23:09.699 --> 01:23:13.048
with the impacts on the market overall. (item:26:Commissioner Glotfelty on using an outside consultant) I also think

01:23:13.060 --> 01:23:16.399
third party analysis of that would be good. So obviously

01:23:16.409 --> 01:23:19.229
your internal view is critical for how you're operating

01:23:19.239 --> 01:23:22.918
the system, but an external view of that and how these

01:23:22.930 --> 01:23:26.439
Ancillary services are working together or not together

01:23:27.000 --> 01:23:30.069
and where there are being challenges seen in the market

01:23:30.079 --> 01:23:33.930
for solving these ramping problems or whatever. So

01:23:33.939 --> 01:23:37.140
it might be something that we consider hiring an outside

01:23:37.149 --> 01:23:40.289
consultant to help us understand how these things work

01:23:40.298 --> 01:23:44.270
together as well. Okay.

01:23:46.189 --> 01:23:48.149
All right. I'll keep moving if uh there's no other

01:23:48.159 --> 01:23:49.119
questions, comments.

01:23:50.750 --> 01:23:53.159
I, I do have one other question here. Uh And I just

01:23:53.168 --> 01:23:56.140
uh I wanna bring this up uh because it's listed under

01:23:56.149 --> 01:24:00.930
DRRS as yours. (item:26:Commissioner Glotfelty on ancillary service methodology) And that's um I've had discussions

01:24:00.939 --> 01:24:04.100
with other folks that ERCOT about the Ancillary service

01:24:04.109 --> 01:24:08.909
methodology and the timeline by which we procure Ancillary

01:24:08.918 --> 01:24:14.259
services once a year. And I just want to raise that

01:24:14.270 --> 01:24:19.069
I'm concerned that as the system changes, the way that

01:24:19.079 --> 01:24:21.949
we do, that method doesn't change. And I know we've

01:24:21.958 --> 01:24:26.548
had discussions with your Staff and within the PUC

01:24:26.770 --> 01:24:30.259
that at some point in time, maybe it's not this methodology

01:24:30.350 --> 01:24:34.869
but we have to move to something that's more, I believe

01:24:34.878 --> 01:24:39.199
we have to move to something that's more specific to

01:24:39.208 --> 01:24:42.279
that season or that month, ultimately to that week

01:24:42.289 --> 01:24:46.878
and to that day. And these are not short term transitions

01:24:46.890 --> 01:24:49.449
but they are longer term transitions. But having one

01:24:49.458 --> 01:24:53.279
Ancillary service methodology method discussion per

01:24:53.289 --> 01:24:56.289
year, I don't think really cuts it in. So hopefully

01:24:56.298 --> 01:25:00.279
we can bring that up and have that discussion, either

01:25:00.289 --> 01:25:04.000
the PUC T it up or ERCOT teas it up as to

01:25:04.009 --> 01:25:09.560
what the best time frame is for that on a long term

01:25:09.819 --> 01:25:14.750
basis for both the retail providers so that they don't

01:25:14.759 --> 01:25:17.759
get put in a position and the operators and the service

01:25:17.770 --> 01:25:18.500
providers.

01:25:20.100 --> 01:25:22.770
(item:26:Pablo Vegas on ancillary service methodology) Appreciate that feedback and would love to take that

01:25:22.779 --> 01:25:25.270
up because that gets right back to the point of, you

01:25:25.279 --> 01:25:27.850
know, flexibility, needing to be flexible at points

01:25:27.859 --> 01:25:29.708
in time based on what we're seeing based on what we're

01:25:29.720 --> 01:25:31.890
seeing in actual performance, based on what we're seeing

01:25:31.899 --> 01:25:34.958
in changes on the grid, which don't wait for years

01:25:34.979 --> 01:25:38.060
on an annual basis. They happen, season to season,

01:25:38.069 --> 01:25:39.779
month to month. So I think that point is well taken.

01:25:41.659 --> 01:25:45.418
(item:26:Commissioner McAdams' on nonspin) And, and man I hate to keep harping on this. But, um

01:25:46.279 --> 01:25:48.449
and we're gonna have more discussions. You, you, you're

01:25:48.458 --> 01:25:51.890
not set in stone on some of this. Dan Woodfin, Kenan,

01:25:52.100 --> 01:25:55.739
Woody are still thinking about these things as I understand

01:25:55.750 --> 01:25:58.479
DRRS, but paying a peak are the same as you're gonna

01:25:58.489 --> 01:26:02.458
pay a combined cycle to ramp into a, an ancillary.

01:26:04.088 --> 01:26:08.509
ECRS wouldn't have been a better home for the 30 minute

01:26:08.838 --> 01:26:11.029
I mean, if you're gonna create a subset, I know y'all

01:26:11.039 --> 01:26:14.048
thought about that, but ultimately, you decided against

01:26:14.060 --> 01:26:18.489
to keep it in Nonspin. Do we know the reason? If, if

01:26:18.500 --> 01:26:21.310
you want to come up and join that might be helpful.

01:26:22.819 --> 01:26:30.020
Thanks. Thanks Kenan. Name for the record. (item:26:Kenan Ögelman with ERCOT on nonspin) Kenan Ögelman with ERCOT. Um so we, we did

01:26:30.029 --> 01:26:34.020
consider that uh the issue with ECRS is that it does

01:26:34.029 --> 01:26:39.199
not have a unit specific ability to dispatch and Nonspin

01:26:39.208 --> 01:26:45.329
does. So uh moving into moving more things into the

01:26:45.338 --> 01:26:49.029
ECRS bucket did, did not work um in terms of

01:26:49.039 --> 01:26:53.439
covering the other reliability benefits that Nonspin

01:26:53.449 --> 01:26:58.338
offers. Okay. So is that why we're seeing you all call

01:26:58.350 --> 01:27:02.250
blocks of ECRS and Nonspin at the same time or

01:27:02.259 --> 01:27:06.359
within certain blocks of time? The combinations. It

01:27:06.369 --> 01:27:10.109
has been on certain instances in other instances. It's

01:27:10.119 --> 01:27:14.890
purely system reliability. So there's been been unique

01:27:14.899 --> 01:27:21.149
cases um for, for both. What about calling RRS um

01:27:21.159 --> 01:27:25.949
that's obviously, to me that's like the, the last straw

01:27:25.958 --> 01:27:28.930
before we get into rolling blackouts. But uh well.

01:27:28.939 --> 01:27:32.199
But that's NERC governed though, isn't it? (item:26:Kenan Ögelman on RRS) So, so yeah I mean

01:27:32.208 --> 01:27:38.319
RRS has very kind of specific uh requirements around

01:27:38.350 --> 01:27:43.958
uh uh shocks to the, to the grid. Um So

01:27:43.970 --> 01:27:48.208
that tends to sit more within the NERC uh requirements

01:27:48.399 --> 01:27:51.949
but also what we describe in our Ancillary service

01:27:51.958 --> 01:27:57.270
methodology. Um Generally speaking, RRS comes in after

01:27:57.279 --> 01:28:01.020
we're below 3000 megawatts of reserves. And it's required

01:28:01.029 --> 01:28:02.600
to respond to a contingency.

01:28:04.819 --> 01:28:07.949
(item:26:Commissioner Cobos on various ancillary services) Yeah, RRS is more prescriptive, right? In how you deploy

01:28:07.958 --> 01:28:10.159
it, you have to release the generation first and then

01:28:10.168 --> 01:28:13.029
the Load um and they're driven by NERC requirements but

01:28:13.039 --> 01:28:18.149
is, is the um peaker participation in Nonspin and ECRS

01:28:18.159 --> 01:28:20.289
that's driven by the technology of the Peaker, right

01:28:20.298 --> 01:28:22.708
Some of them respond faster, I mean, could is that

01:28:22.720 --> 01:28:25.699
one component of it? I mean, it's the generators decision

01:28:25.708 --> 01:28:29.270
on which one which, which um I guess Ancillary service

01:28:29.279 --> 01:28:32.979
they want to bid into. And it's contingent I think

01:28:32.989 --> 01:28:35.680
probably to, to some large degree on the function,

01:28:35.689 --> 01:28:38.560
the the operational design characteristics of the Peaker

01:28:38.569 --> 01:28:43.989
plant. (item:26:Kenan Ögelman on various services) Yes. So um there is uh for example, uh it, it

01:28:44.000 --> 01:28:48.369
it varies from resource to resource. But for combustion

01:28:48.378 --> 01:28:50.949
turbines, there's usually a quick start mode which

01:28:50.958 --> 01:28:55.310
brings them uh in, in and around 10 minute, but their

01:28:55.319 --> 01:28:59.338
normal startup time tends to be 30 minutes. There's

01:28:59.350 --> 01:29:02.159
an expense and somewhere and tear around quick start

01:29:02.168 --> 01:29:07.989
mode. So the owners make decisions to optimize as to

01:29:08.000 --> 01:29:14.220
which uh service. But also, um you know, as a co-optimized 

01:29:14.569 --> 01:29:20.069
offer, uh we would fill those buckets um relative to

01:29:20.079 --> 01:29:23.918
the values we needed and the price for each would clear

01:29:24.458 --> 01:29:30.140
uh correspondingly a as well. So I might you be willing

01:29:30.149 --> 01:29:33.939
to be 10 minutes away or 30 minutes away and I'll accept

01:29:33.949 --> 01:29:37.770
the co-optimized offer for that between Nonspin and ECRS.

01:29:40.338 --> 01:29:44.159
I'm sorry Chair to go down that rabbit trail. Okay. Very

01:29:44.168 --> 01:29:46.569
good. (item:26:Chairwoman Jackson recaps discussions) Glad we had those discussions and it just sounds

01:29:46.579 --> 01:29:48.850
like, you know, the the path forward is to make sure

01:29:48.859 --> 01:29:51.430
that we can maintain as much flexibility as we can

01:29:51.439 --> 01:29:54.418
and then go back from time to time and evaluate which

01:29:54.430 --> 01:29:57.319
very much is what ERCOT is doing. So I want to talk

01:29:57.329 --> 01:30:01.298
about PCM. Yes. So a PCM. (item:26:Pablo Vegas on PCM) So PCM is the initiative

01:30:01.310 --> 01:30:04.798
to develop the performance credit mechanism. The commission

01:30:04.810 --> 01:30:07.970
approved a framework for that back in January this

01:30:07.979 --> 01:30:10.359
year. Then through the legislative session, there were

01:30:10.369 --> 01:30:13.838
some modifications made in House Bill 1500 to parameters

01:30:13.850 --> 01:30:16.930
around how PCM would operate. And so what we're working

01:30:16.939 --> 01:30:20.439
on right now is we are working on a framing document

01:30:20.449 --> 01:30:24.579
to help develop the kind of key definitions and what

01:30:24.588 --> 01:30:27.149
decisions are going to need to be made in the early

01:30:27.159 --> 01:30:30.859
stages of developing PCM. Examples of that would include

01:30:30.869 --> 01:30:33.069
the definition of the scarcity hours that would be

01:30:33.079 --> 01:30:37.708
used. How many of them there would be what periodicity

01:30:37.720 --> 01:30:41.069
we would use for evaluating those scarce hours if there

01:30:41.079 --> 01:30:43.418
were performance or non performance issues, whether

01:30:43.430 --> 01:30:46.140
there would be penalties, things like that. Very fundamental

01:30:46.149 --> 01:30:49.750
decisions around how the product would work in order

01:30:49.759 --> 01:30:52.338
to be able to move forward into some of the subsequent

01:30:52.350 --> 01:30:54.789
requirements, which is to evaluate the cost for the

01:30:54.798 --> 01:30:58.569
product. So from a state, from a from a phasing perspective

01:30:58.819 --> 01:31:01.668
we expect to develop this, this this framing document

01:31:01.680 --> 01:31:04.798
in September and October and to get feedback on that

01:31:04.810 --> 01:31:06.918
framing document from the commission. Sometime later

01:31:06.930 --> 01:31:10.329
in October, we would begin workshops in the 3rd and

01:31:10.338 --> 01:31:13.149
4th quarter. This year. Also getting input in parallel

01:31:13.159 --> 01:31:16.140
with the market on these, on these various issues.

01:31:16.369 --> 01:31:19.298
Then with the input from the Commission on the framing

01:31:19.310 --> 01:31:22.208
document, we would input from the market participants

01:31:22.239 --> 01:31:25.750
we would develop an initial proposal on how the PCM

01:31:25.759 --> 01:31:28.359
would work. And then we would, we would work on doing

01:31:28.369 --> 01:31:31.699
workshops in conjunction with the PUC during the 1st

01:31:31.708 --> 01:31:34.819
and 2nd quarter of next year to really design how the

01:31:34.829 --> 01:31:38.479
PCM would work based on that proposal. Then once we've

01:31:38.489 --> 01:31:41.168
got that design that would describe those definitions

01:31:41.180 --> 01:31:43.180
that would describe those parameters, and we would

01:31:43.189 --> 01:31:45.659
be able to evaluate the cost, then we would do the

01:31:45.668 --> 01:31:49.180
cost study that is mandated by the legislation in conjunction

01:31:49.189 --> 01:31:52.378
with the IMM to evaluate whether it's worthwhile to

01:31:52.390 --> 01:31:55.890
implement a PCM product for the reliability benefits

01:31:55.899 --> 01:31:58.529
that we would expect to get from it. So that cost study

01:31:58.539 --> 01:32:00.918
we expect to take some time in the 3rd and 4th quarter

01:32:00.930 --> 01:32:03.109
And these, these are fairly large windows of time,

01:32:03.119 --> 01:32:06.310
but just anticipating, you know, potential priorities

01:32:06.319 --> 01:32:08.048
and things that might happen. And so we want to try

01:32:08.060 --> 01:32:10.109
to give broader swaths of time for when we would do

01:32:10.119 --> 01:32:12.979
this. But the overarching goal would be to be complete

01:32:12.989 --> 01:32:15.829
with that cost study by the end of next year so that

01:32:15.838 --> 01:32:18.020
we could come back to the Commission have all of that

01:32:18.029 --> 01:32:21.409
together for evaluation. We have a design, we'd have

01:32:21.418 --> 01:32:23.659
the cost implications and a recommendation on whether

01:32:23.668 --> 01:32:25.739
we would want to move forward or not. That would then

01:32:25.750 --> 01:32:28.208
time coincidentally with when the next legislature

01:32:28.220 --> 01:32:31.079
would be coming in January of 2025. Notice that and

01:32:31.088 --> 01:32:33.140
we could present to the legislature. Here's what the

01:32:33.149 --> 01:32:36.338
findings are, the result of the studies that were mandated

01:32:36.359 --> 01:32:38.548
And here's what our recommendation is in terms of moving

01:32:38.560 --> 01:32:42.048
forward, then we would have to go forward assuming

01:32:42.060 --> 01:32:44.989
all of that were to proceed as planned. Uh and, and

01:32:45.000 --> 01:32:47.500
a successful with review of the legislature, then we

01:32:47.509 --> 01:32:50.859
would develop the techno the protocols and the technology

01:32:50.869 --> 01:32:54.180
at that point. So beginning in 2025 so we'd be looking

01:32:54.189 --> 01:32:58.189
at delivery probably sometime late 26 into 27 eventually.

01:32:58.199 --> 01:33:01.739
That, that's what it was. I was missing the uh technology

01:33:01.750 --> 01:33:05.390
development protocol, the settlement development. Um

01:33:05.418 --> 01:33:08.878
that's the back end. So it does match up with a 3

01:33:08.890 --> 01:33:12.548
to 4 year process, which is what I'm hearing from SPP

01:33:12.560 --> 01:33:13.149
as well.

01:33:16.350 --> 01:33:19.088
So we'll get the framing document? In the next couple

01:33:19.100 --> 01:33:21.338
of months and no. Yes. In September and October, we're

01:33:21.350 --> 01:33:23.159
gonna be developing that. And that gives everybody something

01:33:23.168 --> 01:33:27.168
to shoot at and then we start the, the decision evaluation

01:33:27.180 --> 01:33:31.649
process. That's right. Do, do you all. (item:26:Commissioner Glotfelty on resource adequacy mechanism) Uh I, I've heard

01:33:31.659 --> 01:33:35.829
two different thoughts on this. Um the, the Legislature

01:33:35.838 --> 01:33:39.319
charged the charged ERCOT and the IMM with doing a cost

01:33:39.329 --> 01:33:44.229
study on this um uh this resource adequacy mechanism

01:33:44.729 --> 01:33:47.439
Do you think are those two independent studies that

01:33:47.449 --> 01:33:49.418
should be compared or are you feeling like those are

01:33:49.430 --> 01:33:54.069
together as one document? Um I'm hoping that they're

01:33:54.079 --> 01:33:56.930
separate to get two data points, but I want to know

01:33:56.939 --> 01:34:00.529
what your thoughts are. (item:26:Pablo Vegas on resource adequacy mechanism) Well I, I actually my initial

01:34:00.539 --> 01:34:03.079
thinking was the opposite. I wanted them to be together

01:34:03.088 --> 01:34:07.048
because I, I think it's difficult to make decisions

01:34:07.060 --> 01:34:10.628
with two independent points of view that are going

01:34:10.640 --> 01:34:13.659
to potentially have con contradictory elements to it

01:34:13.918 --> 01:34:16.829
That being said, my expectation is we would work very

01:34:16.838 --> 01:34:19.119
closely with the imm on the underlying assumptions

01:34:19.128 --> 01:34:22.140
that go into each of our conclusions. And what we could

01:34:22.149 --> 01:34:25.529
do is present one study that has variations in maybe

01:34:25.539 --> 01:34:28.770
conclusions that comes from the analysis and maybe

01:34:28.779 --> 01:34:33.119
some variations in the assumptions because my my guess

01:34:33.128 --> 01:34:35.588
is that assumptions and analysis are going to be where

01:34:35.600 --> 01:34:40.060
there may be some differences perhaps between two independent

01:34:40.069 --> 01:34:42.189
studies. But if we could come together and present

01:34:42.199 --> 01:34:44.649
one document that says, here's where we see differences

01:34:44.659 --> 01:34:47.759
but ideally where we see where we have a common recommendation

01:34:47.770 --> 01:34:50.739
that I think would allow us to move forward. But I

01:34:50.750 --> 01:34:54.100
I don't think that's really clear based on how technically

01:34:54.109 --> 01:34:55.729
that needs to get done. So I think we need to work

01:34:55.739 --> 01:34:57.989
through that and let's work on that.

01:35:00.439 --> 01:35:03.140
(item:26:Commissioner Cobos' question on framing document) So you the framing document Pablo as you described

01:35:03.149 --> 01:35:05.270
would have the definitions, the decision points that

01:35:05.279 --> 01:35:10.009
you would submit to us next October. Um and then from

01:35:10.020 --> 01:35:15.088
there, um would that contemplate like we go over it

01:35:15.100 --> 01:35:18.199
and, and actually like direct you to say, you

01:35:18.208 --> 01:35:22.350
know, move forward with. (item:26:Pablo Vegas on framing document) Developing a proposal based

01:35:22.359 --> 01:35:24.659
on these kind of assumption based on this framing document

01:35:24.668 --> 01:35:27.479
develop a proposal for how PCM would work. So then

01:35:27.489 --> 01:35:29.720
we would be charged with going and working with market

01:35:29.729 --> 01:35:32.159
participants and through the tax process to develop

01:35:32.168 --> 01:35:34.668
with workshops, the actual proposal that then we would

01:35:34.680 --> 01:35:37.350
bring back to the Commission. And do you envision that

01:35:37.359 --> 01:35:40.024
happening at one open meeting where we be like, you

01:35:40.125 --> 01:35:42.204
know. Is it gonna be a big bang or is it gonna

01:35:42.213 --> 01:35:44.645
be a slow rollout series? I think this, this should

01:35:44.654 --> 01:35:47.173
be a series of conversations because there's gonna

01:35:47.185 --> 01:35:48.875
be so many critical issues that we're gonna want to

01:35:48.884 --> 01:35:51.503
delve into. So I would and some of them will be evaluated

01:35:51.515 --> 01:35:53.625
more extensively than others, right? You know, what

01:35:53.634 --> 01:35:56.524
are the hours of highest reliability risk? Um The,

01:35:56.534 --> 01:35:59.899
the number of hours and things, I mean, yeah, it just

01:35:59.909 --> 01:36:02.680
wasn't clear like we get the framing document and then

01:36:02.689 --> 01:36:06.140
we deliberate with you and tell you like what, what

01:36:06.149 --> 01:36:08.310
components we want you to study. But I expect even

01:36:08.319 --> 01:36:10.289
potentially some iterations on the framing document

01:36:10.298 --> 01:36:12.069
potentially. Because as we come up with some assumptions

01:36:12.079 --> 01:36:13.838
around here are the things that we need to define here

01:36:13.850 --> 01:36:16.250
are the decisions you may think. Well, what about this

01:36:16.259 --> 01:36:18.009
What about that? So then we'll come back, revise it

01:36:18.020 --> 01:36:20.289
and make sure we've got a good starting point to begin

01:36:20.298 --> 01:36:22.220
developing that proposal. So we'll probably expect

01:36:22.229 --> 01:36:24.430
a couple of passes even on that first document. OK

01:36:24.989 --> 01:36:26.850
(item:26:Chairwoman Jackson's thoughts on framing) And I think when, when you were explaining it too,

01:36:26.859 --> 01:36:29.208
you talked about, you know, within one of the boxes

01:36:29.220 --> 01:36:31.520
or whatever that there would be different work efforts

01:36:31.529 --> 01:36:33.939
that would come out of it. So the idea I think is

01:36:33.949 --> 01:36:37.250
that there will be multiple decisions along the way

01:36:37.399 --> 01:36:40.859
and opportunities to have input in. That's right. (item:26:Commissioner Glotfelty on TAC involvement) Yeah, I would

01:36:40.869 --> 01:36:43.689
say one thing and that is on your timeline for PCM

01:36:43.699 --> 01:36:47.729
development tasks and milestones. There's no uh TAC

01:36:47.739 --> 01:36:51.020
involvement here. Um I, I know this, this is probably

01:36:51.029 --> 01:36:54.000
just a preliminary document, but I hope that uh TAC

01:36:54.009 --> 01:36:56.489
and the other subcommittees are involved in those discussions

01:36:56.500 --> 01:36:56.970
as well.

01:36:59.958 --> 01:37:02.359
(item:26:Commissioner Cobos on iterative process) Well, it sounds like an iterative process, right. ERCOT

01:37:02.369 --> 01:37:05.458
comes with the framing document, we get feedback, they

01:37:05.470 --> 01:37:08.000
go and have some workshops on the feedback, maybe come

01:37:08.009 --> 01:37:10.829
back with with more information and, and so it's kind

01:37:10.838 --> 01:37:13.729
of just an iterative process going forward. Um And

01:37:13.739 --> 01:37:20.810
then um ultimately, this this next year um at the beginning

01:37:20.819 --> 01:37:24.000
of the year would be ERCOT and PUC workshops to evaluate

01:37:24.009 --> 01:37:27.819
the strawman proposal is, is the complete strawman

01:37:27.829 --> 01:37:31.168
proposal. But somewhere underlying all this process

01:37:31.180 --> 01:37:33.789
in parallel will be a cone study happening, right?

01:37:33.798 --> 01:37:37.899
That you'll ultimately have, that's gonna be a plug

01:37:37.909 --> 01:37:40.390
in for the updated cost assessment when you finally

01:37:40.399 --> 01:37:45.298
design the PCM and as you have envisioned, um the

01:37:45.430 --> 01:37:48.430
the PCM will be designed, there'll be an updated cost

01:37:48.439 --> 01:37:51.859
assessment. You'll, we'll hand that over to the, that

01:37:51.869 --> 01:37:54.109
will be handed over to us in the, in the legislature

01:37:54.119 --> 01:37:56.439
And then there'll be some deliberation, I guess beginning

01:37:56.449 --> 01:37:59.289
of 25 on whether we move forward because I think that

01:38:00.250 --> 01:38:03.850
and then we'll put it in rule and protocol, right?

01:38:04.199 --> 01:38:06.409
OK. I just wanted to be clear on that because when

01:38:06.418 --> 01:38:08.970
I was reading the document, it, it, it said something

01:38:08.979 --> 01:38:11.600
about ERCOT and the IMM will analyze the cost and market

01:38:11.609 --> 01:38:15.149
effects of the PCM proposal in parallel to the Commission's

01:38:15.159 --> 01:38:17.949
rule making process and that it needs to be an input

01:38:17.958 --> 01:38:20.869
Okay. Yeah, I just wanna make sure we're complying with

01:38:20.878 --> 01:38:25.229
1500 requires us that before we move forward with

01:38:25.239 --> 01:38:29.259
adoption, we have to do the cost assessment. So, um

01:38:29.270 --> 01:38:32.009
I think your process aligns with what I think we've

01:38:32.020 --> 01:38:32.970
been discussing. So,

01:38:34.579 --> 01:38:38.680
so three minutes for real-time optimization. Uh I've

01:38:38.689 --> 01:38:41.699
I know I've read what's on the paper. Um uh Could I

01:38:41.708 --> 01:38:43.560
get something in with Pablo? Because I assume we're

01:38:43.569 --> 01:38:46.770
gonna cut him loose so he can go manage the grid going

01:38:46.779 --> 01:38:50.479
into uh tight conditions, is that? We are going into close session. Yes

01:38:50.489 --> 01:38:55.168
ma'am. So one thing I'd like to bring up Pablo, RTC.

01:38:55.180 --> 01:38:57.298
But yeah, sorry. I, I have comments here as well.

01:38:57.310 --> 01:39:00.439
So okay, and I'll make it quick. (item:26:Commisisoner McAdams on RTC and NPRR 1186) RTC plus B uh

01:39:00.449 --> 01:39:05.588
framework uh outlined in the filing referred to uh

01:39:05.600 --> 01:39:09.409
NPRR 1186. NPRR 1186 has a number of

01:39:09.418 --> 01:39:12.829
policies packaged inside of it. One, the Commission

01:39:12.838 --> 01:39:15.958
has not approved NPRR 1186. It is the subject of

01:39:15.970 --> 01:39:19.588
controversy with in TAC that just happened. There were

01:39:19.600 --> 01:39:22.649
posing votes. Um There are certainly some strategic

01:39:22.659 --> 01:39:26.220
considerations in NPRR 1186. If we could refine this

01:39:26.229 --> 01:39:29.168
document at all, moving forward, I would advise to

01:39:29.180 --> 01:39:33.878
strike the, the linkage between NPRR 1186 as envisioned

01:39:33.890 --> 01:39:37.548
here and ultimate implementation of real time cooptation

01:39:37.560 --> 01:39:40.489
That is not to say that you strike the linkage between

01:39:40.500 --> 01:39:43.838
a resolution of state of charge policy because that's

01:39:43.850 --> 01:39:46.680
what you got to get to is define what your state of

01:39:46.689 --> 01:39:50.109
charge looks like so that you can co-optimize that. But

01:39:50.119 --> 01:39:54.720
NPRR 1186 is a big policy. (item:26:Pablo Vegas on NPRR 1186 and RTC) It's a standalone interim

01:39:54.729 --> 01:39:57.939
state of charge solution that is not necessarily going

01:39:57.949 --> 01:40:00.810
to be the end solution that's in real time RTC plus

01:40:00.819 --> 01:40:03.390
B. Correct, sir. So if we could massage that language

01:40:03.399 --> 01:40:06.759
to make it a more neutral approach on that, I would

01:40:06.770 --> 01:40:10.048
sincerely appreciate it. (item:26:Commissioner Glotfelty on NPRR 1186) Can I tell you? Uh, I'm a

01:40:10.060 --> 01:40:12.250
little bit more harsh than that. I don't want to be. He always is.

01:40:13.918 --> 01:40:18.489
I, I think um the 1186 is a big challenge. We're

01:40:18.500 --> 01:40:21.659
trying to make a resource of a battery look like a

01:40:21.668 --> 01:40:25.418
coal plant in the operations world and we can't do

01:40:25.430 --> 01:40:29.069
that if we are going to get the benefit of the attributes

01:40:29.079 --> 01:40:32.390
of a battery on a sub second basis on our system, we

01:40:32.399 --> 01:40:36.319
need to let it act the way it acts and we need

01:40:36.329 --> 01:40:41.029
to adapt ERCOT to that, not the other way around. And I think

01:40:41.039 --> 01:40:46.259
we historically in this system driven by regulators

01:40:46.270 --> 01:40:49.560
and utilities force everything that's new to act like

01:40:49.569 --> 01:40:53.168
an old piece of equipment. And I do not believe that

01:40:53.180 --> 01:40:55.289
we are going to get the benefit of batteries by doing

01:40:55.298 --> 01:40:58.439
that. We should let the batteries, we shouldn't be

01:40:58.449 --> 01:41:00.939
charging batteries in the middle of an event requiring

01:41:00.949 --> 01:41:04.020
them to have, you know, if they bid into Ancillary

01:41:04.029 --> 01:41:06.159
services for an hour, why should they have an hour

01:41:06.168 --> 01:41:09.659
left over at the end of the end of the charge in

01:41:09.668 --> 01:41:13.199
accordance with your rules, it's increasing the prices

01:41:13.319 --> 01:41:16.909
and we are creating problems for consumers here. I

01:41:16.918 --> 01:41:21.060
encourage you all to take this, not pass it at the

01:41:21.069 --> 01:41:23.979
next Board meeting. Go back to the drawing board and

01:41:23.989 --> 01:41:27.859
think about it. It has to be done either in your process

01:41:27.869 --> 01:41:31.009
or in ours. But I just don't believe that we are going

01:41:31.020 --> 01:41:35.458
to finalize this in its current form to get to where

01:41:35.470 --> 01:41:39.319
you want to go. So I encourage us to have those discussions

01:41:39.520 --> 01:41:44.079
before we get into a real impact here. Moderate position,

01:41:44.088 --> 01:41:48.239
not so moderate. (item:26:Pablo Vegas on performance of any resource and ancillary service) So I'll just share where I'm landing

01:41:48.250 --> 01:41:51.289
is that the underlying driver for the performance of

01:41:51.298 --> 01:41:53.640
any resource and an Ancillary service is to ensure

01:41:53.649 --> 01:41:57.079
operational reliability. There are a lot of drivers

01:41:57.088 --> 01:42:00.539
that are also in place to try to maximize economic

01:42:00.548 --> 01:42:04.159
opportunity. They are not mutually exclusive. I recognize

01:42:04.168 --> 01:42:07.539
that. But the priority from my point of view is always

01:42:07.548 --> 01:42:10.270
going to be reliability. I'm not suggesting that we

01:42:10.600 --> 01:42:16.509
try to fit a round peg into a square slot, but I'm

01:42:16.520 --> 01:42:20.079
always going to lean on the expertise of our operators

01:42:20.088 --> 01:42:22.409
that say if we need an Ancillary service to perform

01:42:22.418 --> 01:42:24.680
a certain way in order to keep the grid reliable, we

01:42:24.689 --> 01:42:27.119
have to weigh that judgment heavily in these discussions

01:42:27.128 --> 01:42:29.729
(item:26:Commissioner Glotfelty's response to Pablo Vegas) And I would love for you to bring up all of those

01:42:29.739 --> 01:42:33.189
discussions that your operators tell you about to us

01:42:33.199 --> 01:42:36.079
to have that discussion in an open format so that it's

01:42:36.088 --> 01:42:39.569
not your operators making a decision in a vacuum that

01:42:39.579 --> 01:42:42.864
the market can actually operate. I mean, I believe

01:42:42.875 --> 01:42:45.884
in markets, markets can solve many of these problems

01:42:45.895 --> 01:42:48.984
on a reliability basis as well as an economic basis

01:42:48.994 --> 01:42:51.134
for the good of consumers. If we don't know what the

01:42:51.145 --> 01:42:55.043
operators are doing, then we have, then we get outcomes

01:42:55.055 --> 01:42:58.034
that are more expensive and more challenging for the

01:42:58.043 --> 01:43:00.845
industry to operate and they're not price signals to

01:43:00.854 --> 01:43:02.604
build new resources.

01:43:04.449 --> 01:43:08.628
(item:26:Pablo Vegas on speed of interim state of charge) Happy to bring those concerns into a more open conversation

01:43:08.930 --> 01:43:11.529
There is there's been some critique in terms of the

01:43:11.539 --> 01:43:13.539
speed at which we move forward with this. There's a

01:43:13.548 --> 01:43:16.289
very urgent issue related to the speed of being able

01:43:16.298 --> 01:43:18.100
to get this interim state of charge in place because

01:43:18.109 --> 01:43:21.810
we have limits in terms of when we can put these changes

01:43:21.819 --> 01:43:26.119
into the EMS and the grid management systems in between

01:43:26.168 --> 01:43:29.739
the update before the lockout and before the upcoming

01:43:29.750 --> 01:43:32.489
RTC development, that's going to be following it. So

01:43:32.500 --> 01:43:35.359
we're trying to slot this in to a landing zone that

01:43:35.369 --> 01:43:37.609
can work and if we don't get it into that landing zone

01:43:37.619 --> 01:43:39.909
then we don't get anything. So we need to figure out

01:43:39.918 --> 01:43:42.279
how to get some improvement to where we are today to

01:43:42.289 --> 01:43:44.979
try to deal with the state of charge issue and then

01:43:45.220 --> 01:43:48.409
have we will have the bandwidth as you point out Commissioner

01:43:48.829 --> 01:43:52.270
McAdams that RTC solution is potentially different

01:43:52.279 --> 01:43:54.739
than obviously the 1186 solution. I would say that

01:43:54.750 --> 01:43:58.369
landing zone is secondary to ensuring that the policy

01:43:58.378 --> 01:44:02.750
is right. Um And let's have these conversations. Um

01:44:02.759 --> 01:44:06.779
but we've got to be because high level, we don't want

01:44:06.789 --> 01:44:10.628
to disincentivize longer duration batteries while incentivizing

01:44:10.640 --> 01:44:15.088
shorter duration batteries. Lockout issue aside, that's

01:44:15.100 --> 01:44:18.759
a strategic consideration for the system over not just

01:44:18.770 --> 01:44:20.659
this year but for the next 20 years.

01:44:24.970 --> 01:44:28.009
(item:26:Pablo Vegas on RTC state of charge) So from an RTC perspective, so putting aside 1186

01:44:28.020 --> 01:44:32.289
for a second. What we expect is to have the essentially

01:44:32.298 --> 01:44:36.470
the RTC state of charge RTC battery and all of

01:44:36.479 --> 01:44:39.989
that at the Board, at the Commission at the end of this

01:44:40.000 --> 01:44:42.140
year, start of next year, the development timetable

01:44:42.149 --> 01:44:46.310
for this is over the next two years, '24-'25. With an

01:44:46.319 --> 01:44:49.720
expected delivery in '26 in between the EMS and MMS upgrades

01:44:49.729 --> 01:44:52.470
in 2026. So we've got quite a bit of development still

01:44:52.479 --> 01:44:55.560
ahead of us on this on the RTC plus B. 

01:44:57.250 --> 01:44:59.548
Want to thank you for being here today. (item:35:Pablo Vegas on Barney Davis Gas Facility) I do have one

01:44:59.560 --> 01:45:01.418
more issue that I needed to bring up. There was a market

01:45:01.430 --> 01:45:03.520
there was a market notice that we filed this morning

01:45:03.529 --> 01:45:06.989
related to the Barney Davis Gas Facility down in Corpus

01:45:07.000 --> 01:45:12.869
Christi. They have submitted a notice to cease operations

01:45:12.878 --> 01:45:16.319
beginning in November of this year. ERCOT has done

01:45:16.329 --> 01:45:20.140
it as required by protocol to evaluate their local

01:45:20.149 --> 01:45:24.069
reliability impacts of the retirement of a unit. In

01:45:24.079 --> 01:45:28.208
that area. The reliability analysis does not show that

01:45:28.220 --> 01:45:32.140
there would be local reliability issues if this unit

01:45:32.149 --> 01:45:34.689
were to retire. And that's really focused primarily

01:45:34.699 --> 01:45:37.810
on transmission reliability and transmission stability

01:45:37.819 --> 01:45:42.329
at that point. But we are looking at more broadly the

01:45:42.338 --> 01:45:45.009
needed capacity as we get into this Winter season,

01:45:45.020 --> 01:45:47.649
there have been multiple units that have indicated

01:45:47.659 --> 01:45:50.569
a cease operations, a mouth falling status or retirement

01:45:50.579 --> 01:45:53.659
like in the case of Barney Davis. And so what we noted

01:45:53.668 --> 01:45:55.869
in that market notice is that we are going to take

01:45:55.878 --> 01:45:58.739
a look at the capacity issues for this coming Winter

01:45:58.750 --> 01:46:01.680
season when we get to that point and if necessary would

01:46:01.689 --> 01:46:05.479
consider evaluating units that would not be available

01:46:05.489 --> 01:46:08.359
for capacity contracts if needed to ensure we have

01:46:08.369 --> 01:46:12.569
adequate capacity this Winter. (item:35:Commissioner Cobos' question on performance history on unit) Pablo as part of your

01:46:12.579 --> 01:46:15.939
analysis for this Winter, will you be looking at this

01:46:15.949 --> 01:46:19.404
specific unit, its performance history and outage history

01:46:19.713 --> 01:46:22.333
is particularly in the Winter and, and even, I

01:46:22.345 --> 01:46:24.614
mean, I know you're looking at it for, for I guess

01:46:24.625 --> 01:46:27.753
this season would be the Fall and the Winter, right

01:46:28.134 --> 01:46:31.253
And so I think that would be beneficial to, to just

01:46:31.265 --> 01:46:34.774
look at the performance history um outage history on

01:46:34.784 --> 01:46:40.324
the unit um also per your protocols will ERCOT evaluate

01:46:40.333 --> 01:46:45.088
a demand side solution. (item:35:Pablo Vegas on performance history of unit) Yes, if we move down this pathway

01:46:45.100 --> 01:46:48.859
The requirement would be to evaluate any sort of capacity

01:46:48.869 --> 01:46:51.548
options, including loads, side, demand side. In addition

01:46:51.560 --> 01:46:55.039
to supply side and so effectively, we would be seeking

01:46:55.159 --> 01:46:57.729
the most cost effective solution in order to close

01:46:57.739 --> 01:47:02.449
a risk if we identify one on capacity. And so mechanically

01:47:02.458 --> 01:47:06.009
speaking, you'll conduct the analysis. (item:35:Commissioner Cobos on RMR contracts) Um do you anticipate

01:47:06.020 --> 01:47:08.199
bringing this uh if you decide to move forward with

01:47:08.208 --> 01:47:12.220
an RMR for capacity like contract, is this something

01:47:12.229 --> 01:47:15.479
you will bring to the October Board Meeting for approval

01:47:15.869 --> 01:47:18.119
We would be bringing it forward in October. That's

01:47:18.128 --> 01:47:21.659
correct. That would be our intention. Okay. Um And that

01:47:21.668 --> 01:47:24.319
and the buck stops at the Board, right? Because that's

01:47:24.329 --> 01:47:27.789
we don't approve the RMR contracts. The, the Board approves

01:47:27.798 --> 01:47:30.369
them. That's where the buck stops just to be clear

01:47:30.378 --> 01:47:33.970
for the, for our own Commission Rules. But um all right

01:47:33.979 --> 01:47:38.378
I mean. Do y'all have anything? It's gonna be an expensive decision.

01:47:40.239 --> 01:47:43.739
Okay. You did say that there will be a least cost evaluation

01:47:43.750 --> 01:47:46.088
done associated. (item:35:Pablo Vegas on formal conservation notice) There will, there will be a cost evaluation

01:47:46.100 --> 01:47:50.720
done that and just to close. We just issued a formal

01:47:50.729 --> 01:47:55.149
conservation notice today for the hours between I believe

01:47:55.159 --> 01:47:59.838
it's 3 p.m. and 10 p.m. in order to try to ask

01:47:59.850 --> 01:48:03.479
Texans if it's safe to voluntarily reduce energy demand

01:48:03.489 --> 01:48:05.220
during those periods of time to help manage this very

01:48:05.229 --> 01:48:07.180
tight crude condition that we're going to be experiencing

01:48:07.600 --> 01:48:10.529
throughout this afternoon and into the early evening

01:48:10.539 --> 01:48:12.729
So I just wanted to know that public notice did go

01:48:12.739 --> 01:48:16.289
out just now. And so we'll be keeping you apprised

01:48:16.298 --> 01:48:18.819
as the day progresses and we'll be doing everything

01:48:18.829 --> 01:48:21.489
that we can within our, within our control to help

01:48:21.500 --> 01:48:23.128
ensure the reliability throughout the day.

01:48:25.579 --> 01:48:28.088
(item:35:Chairwoman Jackson's final thoughts to Pablo Vegas) Thanks very much for being here. Thanks for the work

01:48:28.100 --> 01:48:30.829
you probably bet you did on putting together the overviews

01:48:30.838 --> 01:48:34.069
and the work flows. And we look forward to, you know

01:48:34.079 --> 01:48:37.270
continuing to kind of track our progress as we move

01:48:37.279 --> 01:48:41.668
forward and the collaborative work between um ERCOT

01:48:41.918 --> 01:48:45.689
and Commission with our Staff and making sure that

01:48:45.699 --> 01:48:48.838
again, we have alignment along the way so that we reach

01:48:48.850 --> 01:48:51.439
that end goal. So I appreciate you putting this together

01:48:51.449 --> 01:48:55.199
and also the call for people across Texas to conserve

01:48:55.208 --> 01:48:58.378
on this very tight day. Thank you Madam Chair, I appreciate

01:48:58.390 --> 01:48:58.708
it. Thank you Commissioners.

01:49:00.569 --> 01:49:04.909
Okay with that um we are scheduled to go into um Closed

01:49:04.918 --> 01:49:08.020
Sessions, so let's go ahead. Uh the time is currently

01:49:08.029 --> 01:49:12.100
11:37. (item:42:Shelah Cisneros clarifies Item) Chairman, I'll just jump into, I think you may

01:49:12.109 --> 01:49:17.810
want to take up Item 42 to do that. (item:42:Chairwoman Jackson pauses Open Meeting, to hold Closed Session) Um oh yes

01:49:17.819 --> 01:49:21.759
we need um next is this brings us to Item 42, Closed

01:49:21.770 --> 01:49:27.949
Session. The time is currently 11:38. Having convened

01:49:27.958 --> 01:49:30.829
in a duly noticed Open Meeting. The Commission will

01:49:30.838 --> 01:49:35.878
now at 11:38 on August 24, 2023 hold a Closed

01:49:35.890 --> 01:49:39.500
Session pursuant to Chapter 551 of the Texas Government

01:49:39.509 --> 01:49:47.729
Code Sections 551.071, 551.074 and 551.076. We'll be back

01:49:47.739 --> 01:49:48.899
in a few minutes. Thank you.

01:49:52.680 --> 01:49:55.039
Jimmy. I am.

01:49:57.039 --> 01:50:00.720
(item:33:Chairwoman Jackson concludes Closed Session, Open Meeting resumed) The Closed Session is hereby concluded at 12:42 on

01:50:00.729 --> 01:50:05.369
August 24, 2023 and the Commission will resume its Public

01:50:05.378 --> 01:50:08.279
Meeting. (item:42:Motion to approve mediated settlement agreement) Having met in Closed Session. I would move

01:50:08.289 --> 01:50:11.319
to approve the mediated settlement agreement and dial

01:50:11.329 --> 01:50:14.628
tone services LP versus Public Utility Commission of

01:50:14.640 --> 01:50:21.239
Texas and Cause No. D1-GN2-2002883 and authorize

01:50:21.250 --> 01:50:24.048
the Attorney General's office to enter into the agreement

01:50:24.060 --> 01:50:28.470
on behalf of the PUC. Second. I have a motion and a second.

01:50:28.479 --> 01:50:34.239
All in favor, say aye. Aye. The motion passes. Having also

01:50:34.250 --> 01:50:37.359
discussed personnel matters in Closed Session. (item:42:Motion to name Shelah Cisneros as Commission Counsel for OPDM) I will

01:50:37.369 --> 01:50:40.890
entertain a motion for the following action: Shelah,

01:50:40.899 --> 01:50:47.009
name Shelah Cisneros as Commission Counsel of OPDM

01:50:47.069 --> 01:50:50.798
with an annual salary of $205,000 effective September

01:50:50.810 --> 01:50:56.279
1, 2023. So moved. Second. Gotta a motion and a second. All in favor,

01:50:56.289 --> 01:51:00.000
say aye. Aye. Motion passes. Congratulations.

01:51:03.509 --> 01:51:06.000
She had to move in seconds before she could back out.

01:51:10.939 --> 01:51:16.220
(item:27:Chairwoman Jackson lays out Project No. 53911) Okay. Next up is Item No. 27. Project No. 53911,

01:51:16.739 --> 01:51:20.750
our ADER ERCOT Pilot Project. Uh Commissioner McAdams

01:51:20.759 --> 01:51:24.199
and Commissioner Glotfelty filed a joint memo. Uh,

01:51:24.239 --> 01:51:28.079
will you please walk us through it? Uh, absolutely

01:51:28.088 --> 01:51:32.079
(item:27:Commissioner McAdams lays out joint memo with Commissioner Glotfelty) Um Madam Chairman, I invited uh, leadership from the

01:51:32.088 --> 01:51:35.439
ADER Task Force here today and we have great news to

01:51:35.449 --> 01:51:39.729
share. Uh yesterday, we announced the first uh two

01:51:40.369 --> 01:51:43.640
ADERs, aggregated distributed energy resources have been

01:51:43.649 --> 01:51:46.579
approved to participate in the ERCOT energy market

01:51:46.588 --> 01:51:50.329
and it can now provide Nonspin services. The two ADERs

01:51:50.369 --> 01:51:54.069
are bundles of Tesla electric residential customers

01:51:54.079 --> 01:51:56.899
and are separated in the north Load zone in Oncor's

01:51:57.069 --> 01:52:00.560
territory. And in the Houston Load zone in CenterPoint's

01:52:00.569 --> 01:52:04.239
territory. This announcement is almost exactly one

01:52:04.250 --> 01:52:08.970
year from the ADER Task Force when it was formed last

01:52:08.979 --> 01:52:11.899
August. This has been a massive achievement on the

01:52:11.909 --> 01:52:14.899
part of our system. And I want to thank the Task Force

01:52:14.909 --> 01:52:19.039
members uh and especially ERCOT Staff for all the hard

01:52:19.048 --> 01:52:21.100
work that the. And our own Commission Staff for all

01:52:21.109 --> 01:52:24.020
the hard work that has been put into this project in

01:52:24.029 --> 01:52:27.739
such a short amount of time. As well as uh our compliments

01:52:27.750 --> 01:52:30.659
to our partners at the Office of Public Utility Counsel.

01:52:30.668 --> 01:52:33.479
For being so understanding with some of the uncertainties

01:52:33.489 --> 01:52:36.619
around the policy that have come up. Uh I've asked

01:52:36.628 --> 01:52:40.298
Jason Ryan and Arushi Sharma Frank, as well as Kenan Ögelman.

01:52:40.680 --> 01:52:43.708
To tell us about the milestones that have been achieved,

01:52:43.720 --> 01:52:46.979
lessons learned over the past year and hurdles to moving

01:52:46.989 --> 01:52:52.350
forward. Um And may I invite them to approach please.

01:52:55.229 --> 01:52:59.890
(item:27:Commissioner Glotfelty's thoughts on the joint memo) I would just say I echo your thoughts. I'm glad we

01:52:59.899 --> 01:53:03.128
did this together. I'm glad that we had such an able

01:53:03.140 --> 01:53:08.529
team. Um And we should all be excited about this as

01:53:08.539 --> 01:53:10.569
to what it means going forward and the fact that we

01:53:10.579 --> 01:53:15.048
can, uh we, we, we, we and you all tackled a lot

01:53:15.060 --> 01:53:16.279
of milestones very quickly.

01:53:18.668 --> 01:53:21.369
And before you begin, will you make sure to state your

01:53:21.378 --> 01:53:23.029
name for the record for the court reporter, please.

01:53:24.548 --> 01:53:27.119
(item:27:Jason Ryan, Executive VP with CenterPoint Energy on leading in power plant implementation) Absolutely. Uh Jason Ryan, Executive Vice President

01:53:27.128 --> 01:53:30.039
for CenterPoint Energy. Uh and I have the privilege

01:53:30.048 --> 01:53:34.708
of being the Chair of the Task Force. Uh so um I'll

01:53:34.720 --> 01:53:37.520
be brief given, given the hour. But I think it's always

01:53:37.529 --> 01:53:40.918
important when we have good news to celebrate that

01:53:40.930 --> 01:53:45.000
we pause and celebrate it and then continue on to tackle

01:53:45.009 --> 01:53:47.529
uh the good work in front of us. So I'll just start

01:53:47.539 --> 01:53:51.958
out by saying that Texas is a leader in virtual power

01:53:51.970 --> 01:53:55.619
plant implementation. And when I say that I'm not talking

01:53:55.628 --> 01:53:59.548
about just a leader among states in this country, but

01:53:59.560 --> 01:54:02.279
really in the world. And you'll hear a little bit more

01:54:02.289 --> 01:54:06.890
about that today. So I give a lot of credit to you

01:54:06.899 --> 01:54:10.239
all for uh leading in this space because when I say

01:54:10.250 --> 01:54:13.449
Texas is a leader and it, it really is, you are a

01:54:13.458 --> 01:54:17.500
leader in virtual power plant implementation. Uh It

01:54:17.509 --> 01:54:22.119
really changes how customers are using the distribution

01:54:22.128 --> 01:54:24.359
grid. And again, we'll get in to a little bit of that

01:54:24.628 --> 01:54:27.020
I was responsible for process. So I'm gonna talk a

01:54:27.029 --> 01:54:31.479
little bit about the process and how it worked because

01:54:31.489 --> 01:54:34.680
when, if you go back to the beginning of August of

01:54:34.689 --> 01:54:39.659
last year, uh, we had no real answer to how we were

01:54:39.668 --> 01:54:43.649
going to do this and no real clear path forward. Uh

01:54:43.659 --> 01:54:47.850
and then on August 12th, we got that, we got your vision

01:54:48.600 --> 01:54:51.770
uh, through the memo that was filed, we got, uh, your

01:54:51.779 --> 01:54:56.878
clear expectations, including timing. Uh, and we'll

01:54:56.890 --> 01:55:00.759
get to that. It was short timing. Uh, and, uh we also

01:55:00.770 --> 01:55:05.930
got the working team that you assigned your memo named

01:55:05.939 --> 01:55:10.128
names and held us all accountable to making sure that

01:55:10.140 --> 01:55:13.918
we could do this work. So you told us what the when

01:55:13.930 --> 01:55:17.628
and the how and, and held us accountable. And so the

01:55:17.640 --> 01:55:21.359
way that you did that is that the charter that governed

01:55:21.369 --> 01:55:25.088
our work set out that it needed to be done incredibly

01:55:25.100 --> 01:55:29.199
transparently. So every meeting that we had every presentation

01:55:29.208 --> 01:55:31.319
that was made at those meetings was posted in this

01:55:31.329 --> 01:55:34.829
project. Uh Every meeting that wasn't in this room

01:55:34.838 --> 01:55:38.088
and broadcast online and archived on your website is

01:55:38.100 --> 01:55:41.378
on a YouTube channel open to the public. So we not

01:55:41.390 --> 01:55:44.970
only had meetings with entire room full of people.

01:55:44.979 --> 01:55:49.350
Uh We often had 100 or more people participating online.

01:55:49.500 --> 01:55:55.229
Uh So it was an incredibly transparent process. You

01:55:55.239 --> 01:55:58.640
in the charter also told us that when we had disagreements

01:55:58.649 --> 01:56:02.250
that would be critical to the pilot program moving

01:56:02.259 --> 01:56:05.369
forward to bring those to your attention. And that

01:56:05.378 --> 01:56:09.270
if we could not reach consensus on any issue to also

01:56:09.279 --> 01:56:11.979
bring those to your attention. I'm proud to say that

01:56:12.128 --> 01:56:15.470
with the group of 20 people that you appointed to the

01:56:15.479 --> 01:56:18.680
task force and our friends at ERCOT and Commission

01:56:18.689 --> 01:56:23.079
staff, we never made such a filing so to do something

01:56:23.088 --> 01:56:27.220
First of its kind where there wasn't a clear road map

01:56:27.229 --> 01:56:29.750
to how we were going to do it. To never have made

01:56:29.759 --> 01:56:32.649
one of those filings I think is a success in the process

01:56:32.659 --> 01:56:35.199
that you laid out for us. Let me talk a little bit

01:56:35.208 --> 01:56:40.159
about time because the charter set out that in the

01:56:40.168 --> 01:56:44.520
August filing that we wanted to have ERCOT board approval

01:56:44.569 --> 01:56:48.319
of the pilot program in October, which realistically

01:56:48.329 --> 01:56:51.918
gave us between 30-45 days to figure out how to get

01:56:51.930 --> 01:56:57.390
off, go and make this happen. So to not have a disagreement

01:56:57.399 --> 01:57:00.838
or failure of consensus working on an aggressive but

01:57:00.850 --> 01:57:04.509
doable timeline, I think is a milestone to bring to

01:57:04.520 --> 01:57:07.829
your attention. The governing document was approved

01:57:07.838 --> 01:57:11.689
on time both by ERCOT and by you all. Uh we then

01:57:11.779 --> 01:57:16.000
uh took a step back as a Task Force and let the

01:57:16.009 --> 01:57:19.918
marketplace work on implementation of the, the programs

01:57:19.930 --> 01:57:23.449
under the governing document. And while we did that

01:57:23.458 --> 01:57:26.588
uh while while the marketplace did that, we worked

01:57:26.600 --> 01:57:32.359
on um some business processes um along with our colleagues

01:57:32.369 --> 01:57:36.279
at ERCOT, and we also worked on some clarifications

01:57:36.289 --> 01:57:41.140
through legislation that we then worked as task force

01:57:41.149 --> 01:57:43.878
members to support this last legislative session and

01:57:44.039 --> 01:57:46.359
uh, Chairman Hunter and, um,

01:57:47.958 --> 01:57:53.009
carried that Bill in the house and it did pass. And

01:57:53.020 --> 01:57:55.289
we're very thankful that we now have some clarification.

01:57:55.298 --> 01:58:00.088
So we not only worked to create alongside ERCOT, the

01:58:00.100 --> 01:58:03.199
governing document, we worked to do some clarification

01:58:03.208 --> 01:58:07.060
in the law, work on some business processes. And we

01:58:07.069 --> 01:58:10.458
appreciate the opportunity to talk today about those

01:58:10.470 --> 01:58:13.479
successes and appreciate the clarification in the memo

01:58:13.489 --> 01:58:17.220
that was filed this week with what we need to do next

01:58:17.229 --> 01:58:20.798
Because I do think that when you give us the what and

01:58:20.810 --> 01:58:25.750
the how with some clear expectations this group can

01:58:25.759 --> 01:58:29.329
accomplish that mission. And I agree with the press

01:58:29.338 --> 01:58:31.310
release you issued yesterday that this process can

01:58:31.319 --> 01:58:34.850
be used as a model for other things that the commission

01:58:34.859 --> 01:58:38.619
wants to accomplish. So this is not all done by the

01:58:38.628 --> 01:58:40.979
folks sitting up in front of you today. It's done by

01:58:40.989 --> 01:58:43.668
a number of folks that are sitting behind me and watching

01:58:43.680 --> 01:58:48.989
online. It truly was a good team effort. I started

01:58:49.000 --> 01:58:51.859
out by saying that this is going to change the way

01:58:51.909 --> 01:58:55.659
customers use the distribution grid and just to tie

01:58:55.668 --> 01:58:59.899
a couple of dots together. The work that you and your

01:58:59.909 --> 01:59:03.739
Staff are doing to implement the resilience plan. Legislation

01:59:04.279 --> 01:59:08.668
is incredibly important as the next step as customers

01:59:08.680 --> 01:59:12.180
rely on generation coming from the distribution grid

01:59:12.399 --> 01:59:16.359
not the other way around, only uh it's incredibly important

01:59:16.369 --> 01:59:18.829
that we have greater resilience on the distribution

01:59:18.838 --> 01:59:21.859
grid. So I appreciate your work on that too. I'm gonna

01:59:21.869 --> 01:59:24.588
stop talking and uh turn it over to the Vice Chair

01:59:24.750 --> 01:59:28.798
Arushi. (item:27:Arushi Sharma Frank with Tesla on customer investment) Thank you, Jason. Good morning Commissioners.

01:59:28.810 --> 01:59:31.798
Arushi Sharma Frank with Tesla and Vice Chair of the

01:59:31.810 --> 01:59:36.109
ADER Task Force. So, first of all uh I'd like to

01:59:36.119 --> 01:59:39.069
thank you all and congratulate you all for launching

01:59:39.079 --> 01:59:42.989
this incredible market design pilot yesterday with

01:59:43.000 --> 01:59:46.509
the first two ADERs which are Tesla aggregations

01:59:46.520 --> 01:59:49.239
operating in the Houston and Dallas uh Load zones with

01:59:49.250 --> 01:59:51.649
Oncor and CenterPoint customers. Who are customers

01:59:51.659 --> 01:59:55.659
of Tesla Electric. Uh later today, Tesla Electric customers

01:59:55.668 --> 01:59:58.970
will be here at, at the Commission talking about their

01:59:58.979 --> 02:00:02.539
experience and I've got prepared remarks of course

02:00:02.548 --> 02:00:05.168
but I I have to lead with this because I think it's

02:00:05.180 --> 02:00:07.458
the most important from the context of what we have

02:00:07.470 --> 02:00:10.649
heard and discussed today at this meeting. Uh The first

02:00:10.659 --> 02:00:14.079
one is that um as the Commission and ERCOT looks at

02:00:14.088 --> 02:00:17.609
the creation of a reliability standard. The most important

02:00:17.619 --> 02:00:21.009
piece of the ADER pilot for reliability is the fact

02:00:21.020 --> 02:00:23.829
that every single one of the customers that participates

02:00:23.890 --> 02:00:27.378
through this model is a customer that arrived to this

02:00:27.390 --> 02:00:31.759
pilot as an expression of the value of loss loads and

02:00:31.770 --> 02:00:34.708
a private investment that they already made for themselves.

02:00:35.229 --> 02:00:39.529
It is a weight off of the cost to the state and

02:00:39.539 --> 02:00:43.289
to the consumers of the state for creating a reliability

02:00:43.298 --> 02:00:47.770
standard to have more customers incented by this opportunity

02:00:48.159 --> 02:00:51.720
to spend their own private money plus or minus incentives

02:00:51.729 --> 02:00:55.048
that they get from local utilities. Federal government

02:00:55.250 --> 02:00:59.789
um from OEMs who themselves are participating in sustainability

02:00:59.798 --> 02:01:02.289
or funded initiatives to be able to sell these products

02:01:02.298 --> 02:01:05.569
to customers. Customers come to the table with an investment

02:01:05.579 --> 02:01:09.189
that is already made by them every one of those customers

02:01:09.199 --> 02:01:12.989
by investing in whole home backup and then being participatory

02:01:13.000 --> 02:01:16.949
in the grid is providing additional reliability services

02:01:16.958 --> 02:01:20.289
from a private investment and taking off the socialized

02:01:20.298 --> 02:01:23.859
value of the reliability standard. As the VRL study

02:01:23.869 --> 02:01:27.539
progresses, the growth of this pilot is also an incredibly

02:01:27.548 --> 02:01:29.659
important data point and this is something that Tesla

02:01:29.668 --> 02:01:32.489
has said in the reliability standard docket as well.

02:01:32.779 --> 02:01:36.159
That you have to be able to see a resource. It needs

02:01:36.168 --> 02:01:38.149
to be visible in the system, it needs to be visible

02:01:38.159 --> 02:01:41.628
to team, it needs to be visible to the distribution

02:01:41.640 --> 02:01:45.128
service providers um who are operating the local system

02:01:45.720 --> 02:01:48.189
and it needs to be understood and it needs to be a

02:01:48.199 --> 02:01:51.859
part of wholesale price formation. I get asked a lot

02:01:51.869 --> 02:01:54.699
about why we're doing this pilot when there's already

02:01:54.708 --> 02:01:59.350
solar buyback. Uh There are various net energy equivalent

02:01:59.359 --> 02:02:02.000
metering, net energy meter equivalent options for how

02:02:02.009 --> 02:02:04.770
people can return the energy to the grid. But those

02:02:04.779 --> 02:02:07.850
are all passive demand response options. They are not

02:02:07.859 --> 02:02:10.729
the incorporation of command and control megawatts

02:02:10.739 --> 02:02:14.539
dispatchable and SCED from the distributed system. One

02:02:14.548 --> 02:02:17.000
of the most critical accomplishments of the pilot in

02:02:17.009 --> 02:02:20.548
this one year where Tesla has worked very hard on getting

02:02:20.560 --> 02:02:22.918
to a point where we are close to operational, not one

02:02:22.930 --> 02:02:26.970
not two, but six in the state. We're so close

02:02:27.020 --> 02:02:30.298
But over that time, um we've had both successes and

02:02:30.310 --> 02:02:32.829
lessons learned and you asked for that in your memo

02:02:32.838 --> 02:02:34.970
So if you wouldn't mind, I'll spend a minute on those

02:02:35.819 --> 02:02:38.239
One of the most important successes is the fact that

02:02:38.250 --> 02:02:42.069
we are through this pilot sharing information between

02:02:42.079 --> 02:02:44.470
three sets of entities that never shared information

02:02:44.479 --> 02:02:51.369
before ever about the scope, the scale and the specific

02:02:51.378 --> 02:02:54.409
system capacities of distributed energy resources in

02:02:54.418 --> 02:02:57.439
the state. What I'm talking about is that the pilot

02:02:57.449 --> 02:03:00.439
has enabled the exchange of information at an incredibly

02:03:00.449 --> 02:03:04.208
granular level about every single device that is participating

02:03:04.220 --> 02:03:08.759
in an ADER between an ADER uh registrant or an OEM

02:03:08.878 --> 02:03:12.750
or the whatever party is actually aggregating those

02:03:12.759 --> 02:03:16.668
customers, the QSC and qualified scheduling entity

02:03:17.109 --> 02:03:20.869
the distribution service provider and ERCOT Staff over

02:03:20.878 --> 02:03:23.979
the year as the do form has changed. One of the reasons

02:03:23.989 --> 02:03:26.270
that form has changed and we published new versions

02:03:26.279 --> 02:03:28.750
of it is that when all those parties get together,

02:03:28.759 --> 02:03:31.458
we talk about what is the expectation of the device

02:03:31.470 --> 02:03:33.729
how will it actually operate in a virtual power plant

02:03:33.739 --> 02:03:36.189
capacity? All of these questions really, these are

02:03:36.199 --> 02:03:38.378
questions that would it would have been nice to know

02:03:38.390 --> 02:03:42.958
already. Uh the answer to simply on the on the predicate

02:03:42.970 --> 02:03:47.168
of solar buyback being such an important part of 

02:03:47.180 --> 02:03:51.199
DER focused retail plans. So now we have a mechanism

02:03:51.239 --> 02:03:54.520
through this Task Force and through this work to actually

02:03:54.529 --> 02:03:57.119
pass information that is so meaningful to all of these

02:03:57.128 --> 02:04:00.189
parties, that it becomes a critical input to designing

02:04:00.430 --> 02:04:03.319
any sort of reliability standard? Is it distribution

02:04:03.329 --> 02:04:05.359
planning you're looking for? Is it figuring out what

02:04:05.369 --> 02:04:08.029
loaded will look like in the future? Is it figuring

02:04:08.039 --> 02:04:11.319
out retail offers and whether customers will be able

02:04:11.329 --> 02:04:14.208
to drive uh cost control in those offers? Because a

02:04:14.220 --> 02:04:16.560
certain percentage of those customers will be capable

02:04:16.569 --> 02:04:19.798
of hedging their own risk. Um What is it, what are

02:04:19.810 --> 02:04:22.319
the different pieces of how de I will help the whole

02:04:22.329 --> 02:04:25.350
system? This pilot is a critical piece of that. And

02:04:25.359 --> 02:04:28.399
to me that is the biggest success of where we have

02:04:28.409 --> 02:04:31.699
come today. It's not how many megawatts or kilowatts

02:04:31.708 --> 02:04:34.689
are dispatching an Nonspin today. It is all of these

02:04:34.699 --> 02:04:38.310
things and all of these things happening in nine months

02:04:38.439 --> 02:04:41.569
is progress on top of progress, on top of progress

02:04:41.579 --> 02:04:44.509
of the kind that it is taking other in this country

02:04:44.520 --> 02:04:48.509
years to implement years and it will take years and

02:04:48.520 --> 02:04:51.338
hopefully in the three years that this pilot progresses

02:04:51.350 --> 02:04:53.810
you know the information that Texas will have collected

02:04:54.189 --> 02:04:58.009
on three disparate systems, retail energy distribution

02:04:58.020 --> 02:05:02.520
service and the wholesale grid will be incredibly valuable

02:05:02.789 --> 02:05:05.539
to the national labs. You'll be in the opposite position

02:05:05.548 --> 02:05:08.930
where instead of LBNL coming to you to help you, you

02:05:08.939 --> 02:05:11.720
will be going to the national labs and helping them

02:05:11.729 --> 02:05:15.628
figure out how to monetize DERs and put them into wholesale

02:05:15.640 --> 02:05:17.439
price formation for the country.

02:05:19.000 --> 02:05:21.720
Last but not least you asked in your memo also for

02:05:21.729 --> 02:05:24.949
recommendations and challenges and struggles that we

02:05:24.958 --> 02:05:30.000
have had. Excuse me and how we move forward. Uh The

02:05:30.009 --> 02:05:32.609
the biggest challenge I think right now is that on

02:05:32.619 --> 02:05:35.609
day one, informing the governing document, we really

02:05:35.619 --> 02:05:38.789
thought about everything from an abstract perspective

02:05:38.798 --> 02:05:41.750
which means that we are really focused on the idea

02:05:41.759 --> 02:05:45.689
of getting quantity in the pilot over the past year

02:05:45.699 --> 02:05:49.470
It's become clear to me in my capacity as a leader

02:05:49.479 --> 02:05:53.250
of the task force that we haven't spent as much time

02:05:53.259 --> 02:05:57.640
on quality. We need to have a high quality pilot. This

02:05:57.649 --> 02:06:01.119
thing started as a crowdsourced investment. It needs

02:06:01.128 --> 02:06:04.270
to become investment grade. We're going to drive companies

02:06:04.279 --> 02:06:07.000
to enter into commercial agreements. We're going to

02:06:07.009 --> 02:06:10.079
drive federal funding for low income housing. We're

02:06:10.088 --> 02:06:13.088
going to drive investments from noe that need to build

02:06:13.100 --> 02:06:16.819
not only capacity to do the ADER work but everything

02:06:16.829 --> 02:06:18.850
that comes to court which is literally designing the

02:06:18.859 --> 02:06:22.159
storage time of use tariff and having that be an economic

02:06:22.168 --> 02:06:26.159
value proposition on which a becomes a second piece

02:06:26.168 --> 02:06:28.720
and all of that becomes dispatchable, usable capacity

02:06:28.729 --> 02:06:32.338
for ERCOT as well to get there, there needs to be some

02:06:32.350 --> 02:06:36.509
quality control topics that we have to fix. One of

02:06:36.520 --> 02:06:40.739
them is the uh the caps that get allocated across Load

02:06:40.750 --> 02:06:45.180
zones. So right now, for example, the caps that are

02:06:45.189 --> 02:06:49.588
operative on a QSE, which are 20% of the total market

02:06:49.819 --> 02:06:52.100
they were put in place under the assumption that there

02:06:52.109 --> 02:06:55.020
would be so much, so much, you know, race to get to

02:06:55.029 --> 02:06:58.109
the front of the line that we would need some sort

02:06:58.119 --> 02:07:03.399
of um you know, anti um anti monopoly type standard

02:07:03.628 --> 02:07:07.439
The reality is that a and this segment of the retail

02:07:07.449 --> 02:07:09.878
market or the smallest segment of the retail market

02:07:10.048 --> 02:07:12.390
we don't have a competition problem. We have an innovation

02:07:12.399 --> 02:07:14.588
problem. We need to actually drive investment to show

02:07:14.600 --> 02:07:18.430
up. So the, the cap right now for Tesla, in particular

02:07:18.439 --> 02:07:21.239
as we try to think about making some of these aggregations

02:07:21.250 --> 02:07:23.409
big enough so that we can achieve other objectives

02:07:23.418 --> 02:07:25.779
with the pilot. One of these objectives is figuring

02:07:25.789 --> 02:07:28.140
out, figuring out the impact on the distribution system

02:07:28.298 --> 02:07:30.539
And now Ds B has come to us and has come to

02:07:30.548 --> 02:07:33.159
public open meetings and talked about how they need

02:07:33.168 --> 02:07:35.208
to see a scale to be able to study what's happening

02:07:35.220 --> 02:07:37.708
in the system. We literally will not be able to get

02:07:37.720 --> 02:07:40.159
there with those caps. So that is one issue that we

02:07:40.168 --> 02:07:44.189
will address and wish to recommend be revisited. Another

02:07:44.199 --> 02:07:47.009
issue is standards that are in the governing document

02:07:47.020 --> 02:07:50.899
which work really well. If we were trying to do validation

02:07:50.909 --> 02:07:53.989
of information being provided by a resource that is

02:07:54.000 --> 02:07:57.378
a large resource. But uh with ERCOT, in collaboration

02:07:57.390 --> 02:08:01.180
with we learned through the process of attempting to

02:08:01.369 --> 02:08:05.149
validate telemetry um and take the resource live in

02:08:05.159 --> 02:08:08.119
the market. But some of these pro those standards just

02:08:08.128 --> 02:08:10.708
don't make sense because they're designed for a large

02:08:10.720 --> 02:08:14.239
resource with a large margin of error. And these resources

02:08:14.250 --> 02:08:18.149
are so small and so incredibly precise in their operation

02:08:18.329 --> 02:08:21.509
that those tiny deviations measured against a large

02:08:21.520 --> 02:08:24.939
percentage of error as a standard look way larger than

02:08:24.949 --> 02:08:27.168
we actually are. And we're actually penalizing their

02:08:27.180 --> 02:08:30.154
success instead of penal on performance. So that was

02:08:30.164 --> 02:08:33.034
sort of a, a funny ironic outcome from um some of the

02:08:33.043 --> 02:08:36.314
recent efforts to commission our first aiders. And

02:08:36.324 --> 02:08:38.475
uh we've all agreed that it needs to be fixed in the

02:08:38.484 --> 02:08:41.824
second version. And um we will come, come back work

02:08:41.833 --> 02:08:45.333
with collaboratively with cott on fixing that standard

02:08:45.659 --> 02:08:48.449
other things that popped up too. Um They are more technical

02:08:48.458 --> 02:08:52.048
in nature, for example, um in the first few months

02:08:52.060 --> 02:08:54.390
after the governing document was published, and we

02:08:54.399 --> 02:08:59.430
approached ERCOT to actually put the ADER customers

02:08:59.439 --> 02:09:03.390
grouped up into their individual areas into ERCOT's model.

02:09:03.720 --> 02:09:06.890
Um We learned or rather we verified that the way this

02:09:06.899 --> 02:09:10.119
would work is that every ADER needs to be registered

02:09:10.239 --> 02:09:13.949
has a controllable road resource from a monitor perspective

02:09:13.958 --> 02:09:16.970
So it can be modeled in the system, which means that

02:09:17.128 --> 02:09:20.418
had to be broken up, can't be registered by Load

02:09:20.449 --> 02:09:22.819
but they have to be registered by TTSB and Load zone.

02:09:23.128 --> 02:09:25.689
There's two challenges there, one is that in large

02:09:25.699 --> 02:09:29.009
Load zones with small volumes of customers raking those

02:09:29.020 --> 02:09:33.199
two resources up. So for example, TNMP South, APE South

02:09:33.208 --> 02:09:35.369
breaking them up and making these aggregations even

02:09:35.378 --> 02:09:38.338
smaller runs up against the issue of fixed cost to

02:09:38.350 --> 02:09:41.119
operationalize both with the QSC. So it's double the

02:09:41.128 --> 02:09:43.869
fixed cost for two very small and that's the value

02:09:43.878 --> 02:09:46.338
proposition we talked about that it's a difficulty

02:09:46.350 --> 02:09:49.829
for us. Um And it sort of violates the principle of

02:09:49.838 --> 02:09:52.869
getting the pilot to break you in point where the cost

02:09:52.878 --> 02:09:57.279
of operating these resources is um is lower than the

02:09:57.289 --> 02:09:59.779
revenue opportunity for operating them, right? We can't

02:09:59.789 --> 02:10:02.890
have the reverse. It can't be economic loss proposition

02:10:03.199 --> 02:10:06.319
Tesla is doing it because we need to experiment and

02:10:06.329 --> 02:10:08.729
push and innovate and make this work for everyone,

02:10:08.979 --> 02:10:10.918
but it's not gonna work for anyone. If it's a money

02:10:10.930 --> 02:10:13.699
loser, we know that and everyone else knows that, right

02:10:13.708 --> 02:10:15.479
We need to make this thing investment, great to make

02:10:15.489 --> 02:10:19.350
it work for the state. Um In addition to that problem

02:10:19.359 --> 02:10:23.168
um another kind of learning is that by having a resource

02:10:23.180 --> 02:10:25.819
participate as a controllable Load resource, there's

02:10:25.829 --> 02:10:28.409
certain parameters around the resource actually operating

02:10:28.418 --> 02:10:30.680
in real time and my colleague is actually capable of

02:10:30.689 --> 02:10:33.560
operating in front his phone right now. Um That's Greg

02:10:33.569 --> 02:10:36.350
back there responsible for commissioning our first

02:10:36.359 --> 02:10:41.369
yesterday. And um well, this particular is

02:10:41.378 --> 02:10:45.119
a homogenous aggregation of energy storage devices

02:10:45.128 --> 02:10:49.149
that are two hour energy limited, fast response devices

02:10:49.430 --> 02:10:52.539
What is it great at? It's great at doing every single

02:10:52.548 --> 02:10:56.020
thing that a front of the meter ESR can do. That's

02:10:56.029 --> 02:10:58.720
not just staying a theoretical proposition. That is

02:10:58.729 --> 02:11:01.989
literally what batteries do everywhere in the grid

02:11:02.000 --> 02:11:04.048
where we have both mega pack and parallel deployed

02:11:04.060 --> 02:11:07.779
today. Um power wells in Australia have saved their

02:11:07.789 --> 02:11:10.270
horns. Dale uh the the grid just like the horns, Dale

02:11:10.279 --> 02:11:13.189
battery has which is 100 now a 200 Megawatt system

02:11:13.298 --> 02:11:16.029
from the same types of frequency events, ironing events

02:11:16.039 --> 02:11:18.890
et cetera, etcetera. And the value proposition is

02:11:18.899 --> 02:11:21.208
the same. But it also means though that on the market

02:11:21.220 --> 02:11:24.168
side, the batteries can behave similarly and can update

02:11:24.180 --> 02:11:27.449
their bids similar to how front to the meter resources

02:11:27.458 --> 02:11:30.229
scan. So there are some bidding issues about how we

02:11:30.239 --> 02:11:32.958
would like to actually put information into the system.

02:11:33.100 --> 02:11:36.279
Where we have already worked out with staff that some

02:11:36.289 --> 02:11:37.958
of those things look like. Oh, wait a minute. This

02:11:37.970 --> 02:11:40.009
should, looks a little more like an ESR. It doesn't

02:11:40.020 --> 02:11:42.390
look like a CLR when you're actually going to the system

02:11:42.399 --> 02:11:45.289
and putting in a revised bid. So we've come up with

02:11:45.298 --> 02:11:49.109
these kind of technical rules that are more just expectations

02:11:49.119 --> 02:11:51.659
Like, OK, we've agreed that these things are the things

02:11:51.668 --> 02:11:54.500
that make sense. And now in the next phase of the governing

02:11:54.509 --> 02:11:57.119
document, what we're gonna try to figure out. And Jason

02:11:57.128 --> 02:11:59.298
and I have talked about this too is like, how do you

02:11:59.310 --> 02:12:01.859
how do you write all these down in a way that can

02:12:01.869 --> 02:12:04.680
be good guidance for the market. So the next aggregator

02:12:04.689 --> 02:12:07.569
that shows up with a storage only aggregation and they're

02:12:07.579 --> 02:12:11.229
going through all this technical work of operational

02:12:11.399 --> 02:12:14.159
their bidding strategy. What what do they look like

02:12:14.168 --> 02:12:16.479
to ERCOT? And what is their, what are, what are the

02:12:16.489 --> 02:12:21.430
technical coding pieces that go into how that asset

02:12:21.439 --> 02:12:24.500
will operate? And QLCs also kind of need to learn

02:12:24.509 --> 02:12:27.220
that as well. So we've done a lot of learning with

02:12:27.298 --> 02:12:29.739
ERCOT and we tried to memorialize some of that in our

02:12:29.750 --> 02:12:32.220
filings, but at the end of the day, we want to socialize

02:12:32.229 --> 02:12:36.060
it um through ERCOT, either in an operating document

02:12:36.069 --> 02:12:38.140
or something that really explains. Like here are all

02:12:38.149 --> 02:12:40.838
the little details of the minutia of how we really

02:12:40.850 --> 02:12:43.140
got from point A to point Z doing something that is

02:12:43.149 --> 02:12:45.329
completely new and you don't have to come up with the

02:12:45.338 --> 02:12:48.159
answers along the way and that's why it's a pilot.

02:12:48.600 --> 02:12:50.539
Um so I kind of want to end there, you know, I

02:12:50.548 --> 02:12:52.949
think I've taken up more than my fair share of three

02:12:52.958 --> 02:12:55.338
minutes. Uh one more thing I want to end on though.

02:12:55.350 --> 02:13:00.588
Is um just uh the tests hat for a second and focusing

02:13:00.600 --> 02:13:03.789
on the next steps of what's happening nationally. Uh

02:13:03.798 --> 02:13:07.989
(item:27:Arushi Sharma Frank on next steps) Low growth was anemic 20 years ago and utilities were

02:13:08.000 --> 02:13:11.789
not looking at DERs as a value proposition for their

02:13:11.798 --> 02:13:15.838
system. And now VPP is a concept that is quite literally

02:13:15.850 --> 02:13:19.020
everywhere. And the reason for that is that we spent

02:13:19.029 --> 02:13:21.149
a lot of time thinking about the supply side of the

02:13:21.159 --> 02:13:24.739
system as divested from the demand side. And that is

02:13:24.750 --> 02:13:27.958
changing very quickly. You are ahead of it in Texas

02:13:27.970 --> 02:13:30.890
by actually taking an active step to put both pieces

02:13:30.899 --> 02:13:34.399
together in whole sell price formation. Um At the same

02:13:34.409 --> 02:13:37.029
time, the customers are going to keep adopting these

02:13:37.039 --> 02:13:39.529
devices and they're going to do it under a bunch of

02:13:39.539 --> 02:13:42.250
different market models. So over the past year, I've

02:13:42.259 --> 02:13:44.640
given some thought to why it is that we can't get more

02:13:44.779 --> 02:13:46.930
participation. There are some issues that we've talked

02:13:46.939 --> 02:13:49.619
about like third party access, Tesla has actually made

02:13:49.628 --> 02:13:51.739
a filing about to uh mentioned that in our most recent

02:13:51.750 --> 02:13:53.720
filing too that we're trying to enable that standard

02:13:54.109 --> 02:13:56.338
but that standard is only just one piece of the puzzle

02:13:56.350 --> 02:14:00.140
The other piece is really understanding the no e payback

02:14:00.149 --> 02:14:04.029
structure and making sure that programs exist that

02:14:04.039 --> 02:14:07.628
allow their customers to optimize the value of storage

02:14:07.640 --> 02:14:10.699
per good solar, which is essentially a time of use

02:14:10.708 --> 02:14:13.798
tariff, making sure that if there are incentives for

02:14:13.810 --> 02:14:16.548
people to adopt those types of technologies that they

02:14:16.560 --> 02:14:20.208
exist, if there is a model where a no wishes to either

02:14:20.220 --> 02:14:23.668
outright own or wishes to allow third party ownership

02:14:23.680 --> 02:14:26.979
and leasing of resiliency solutions for either low

02:14:26.989 --> 02:14:30.310
income communities or for multi family dwellings which

02:14:30.319 --> 02:14:32.250
have, you know, people move in and out of. So their

02:14:32.259 --> 02:14:34.489
tenements, they're not permanently owned and operated

02:14:34.500 --> 02:14:37.680
systems by a private individual. They want to get there

02:14:37.720 --> 02:14:40.579
there needs to be a model for them to get there to

02:14:40.588 --> 02:14:44.958
the level of investment in the technology. And then

02:14:44.970 --> 02:14:48.458
that can get operationalized in an A and then a company

02:14:48.470 --> 02:14:50.979
like Tesla that enabling a third party standard to

02:14:50.989 --> 02:14:53.579
operationalize in the market makes sense. It works

02:14:53.979 --> 02:14:57.069
So one of my recommendations for phase two of what

02:14:57.079 --> 02:14:59.918
the task forces work should be is to I can make a

02:14:59.930 --> 02:15:02.310
recommendation to you Commissioners who have sponsored

02:15:02.319 --> 02:15:06.128
the task force to add an additional goal to help no

02:15:06.189 --> 02:15:11.079
e explore storage tariffs. Um and D er tariffs that

02:15:11.088 --> 02:15:15.000
propose are, are more sensible revenue models for how

02:15:15.009 --> 02:15:18.759
they as LSEs manage and value low reduction on their

02:15:18.770 --> 02:15:21.500
system. Because those, those are sort of the predicate

02:15:21.509 --> 02:15:24.560
steps that you need to operationalize the next part

02:15:24.569 --> 02:15:27.119
which is having that value monetize itself in the wholesale

02:15:27.128 --> 02:15:27.659
market.

02:15:29.449 --> 02:15:32.489
So she just said a lot Kenan and this is a

02:15:32.500 --> 02:15:36.939
happy day. We are celebrating. So um I will, I will

02:15:36.949 --> 02:15:39.909
only. You can try to unpack some of that or just talk

02:15:39.918 --> 02:15:42.798
about good things. (item:27:Kenan Ögelman on next steps) But I'm gonna, I'm gonna talk about

02:15:42.810 --> 02:15:46.899
uh some good things and some next steps that she kind

02:15:46.909 --> 02:15:50.229
of laid out. Um I think the first thing to recognize

02:15:50.239 --> 02:15:54.338
is that to be able to have an aggregation follow base

02:15:54.350 --> 02:15:59.298
points such that it can provide Nonspin is uh absolutely

02:15:59.310 --> 02:16:05.319
uh accomplishment to celebrate. And um to me that has

02:16:05.329 --> 02:16:08.259
not been done anywhere else, there are VPPs all over

02:16:08.270 --> 02:16:11.729
the place, but they're clearing capacity markets, clearing

02:16:11.949 --> 02:16:16.899
uh other constructs and not there in kind of a day

02:16:16.909 --> 02:16:21.100
to day operational posture. Uh So, and, and that's

02:16:21.109 --> 02:16:25.189
not easy. Um And in fact, uh some of the lessons learned

02:16:25.199 --> 02:16:29.020
come from there. So the biggest lesson learned I just

02:16:29.029 --> 02:16:32.409
want to share with you is when we were trying to validate

02:16:32.418 --> 02:16:37.649
data, we discovered that we applied like a 24 hour

02:16:37.659 --> 02:16:42.968
standard and that then starts capturing behavior that

02:16:42.979 --> 02:16:48.049
is on a single watt level. And we found uh things failing

02:16:48.058 --> 02:16:52.069
on that basis. Cell phone charging. Exactly. So

02:16:52.079 --> 02:16:57.940
um to move away from that uh was one of the keys

02:16:57.950 --> 02:17:01.579
to get folks qualified in terms of the data moving

02:17:01.989 --> 02:17:06.399
um that will require a change in the governing document

02:17:06.409 --> 02:17:10.280
on the pilot. And we have already started drafting

02:17:10.290 --> 02:17:13.099
that change. Thank you. And at that point. I'm gonna

02:17:13.110 --> 02:17:17.690
stop that. That's great madam chair, if you'll humor

02:17:17.700 --> 02:17:22.847
me. Um this is really for, for and just food for thought

02:17:22.859 --> 02:17:26.789
for the future. (item:27:Commissioner McAdams thoughts on program evolution) Now that we have operationalized this

02:17:26.798 --> 02:17:30.939
this energy resource and we've cleared a hurdle subject

02:17:30.949 --> 02:17:33.408
to refinements of the governing document. So that again

02:17:33.417 --> 02:17:37.109
we have, we have clear containment around the sandbox

02:17:37.119 --> 02:17:39.280
to experiment. Um

02:17:41.818 --> 02:17:45.548
How, how do, how does this program evolve? Um I think

02:17:45.558 --> 02:17:50.609
you're learning more day by day. We now have ECRS that

02:17:50.619 --> 02:17:55.619
is live. The ECRS is proving to be a very useful and

02:17:55.628 --> 02:17:59.468
invaluable tool to your operations room to your ability

02:17:59.477 --> 02:18:04.048
to manage through a day like today. Um We have repurposed

02:18:04.058 --> 02:18:08.068
the aggregated Load response program and protocol that

02:18:08.078 --> 02:18:13.379
ERCOT built uh long ago um to house demand response

02:18:13.388 --> 02:18:16.168
capabilities. But now we're, we're harnessing that

02:18:16.179 --> 02:18:20.509
for virtual power plant purposes. How do we start looking

02:18:20.519 --> 02:18:23.808
toward the next step on allowing resources like this

02:18:23.819 --> 02:18:27.280
to participate in services like ECRS to give you that

02:18:27.290 --> 02:18:32.109
flexibility granted after we have that base point modeling

02:18:32.119 --> 02:18:36.968
after we have that operational experience, how far

02:18:36.977 --> 02:18:39.227
out in the future are we talking here from an Acott

02:18:39.289 --> 02:18:43.950
staff perspective? (item:27:Kenan Ögelman on program evolution) So um I, I think we definitely need

02:18:43.959 --> 02:18:47.799
to start talking about what uh is feasible around 

02:18:47.808 --> 02:18:52.909
ECRS. But remember um we're just now accumulating

02:18:52.918 --> 02:18:54.899
data in terms of how this is performed

02:18:56.479 --> 02:18:59.929
to Nonspin, but I think that conversation should start

02:19:00.229 --> 02:19:05.250
and um uh it's, it's the thing that will be kind of

02:19:05.259 --> 02:19:08.679
the area we push back on will be, are we achieving

02:19:08.690 --> 02:19:12.808
our reliability objectives? And do we have uh the data

02:19:12.819 --> 02:19:17.030
or the, the comfort with that? And um I don't, I don't

02:19:17.040 --> 02:19:21.459
see a reason to, to stop discussing that as a next

02:19:21.468 --> 02:19:26.138
step. The one other thing I would add is uh we have

02:19:26.149 --> 02:19:31.338
one entity that has qualified, I'd like to see many

02:19:31.349 --> 02:19:37.069
more. Um And the uh I mean, some of this is again

02:19:37.079 --> 02:19:40.838
celebrating the accomplishment. It's not easy to move

02:19:40.849 --> 02:19:46.468
the data around like uh Tesla has achieved. I want

02:19:46.479 --> 02:19:50.950
to make sure other entities have understanding of how

02:19:50.959 --> 02:19:55.620
that works. What is kind of good practice, what is

02:19:55.629 --> 02:20:01.069
uh uh doesn't work um So that we can increase the participation

02:20:01.489 --> 02:20:05.329
uh that, that we have uh and add additional entities

02:20:05.338 --> 02:20:06.099
over time.

02:20:07.968 --> 02:20:15.239
(item:27:Commissioner Glotfelty on program evolution) What I'd say to that is um I'm appreciative that ERCOT

02:20:15.649 --> 02:20:19.759
came to the table and said yes to this at the beginning

02:20:20.069 --> 02:20:24.360
It wasn't a big amount, but it was yes. And I think

02:20:24.370 --> 02:20:27.489
RTOs and ISOs historically come to a table and say we

02:20:27.500 --> 02:20:31.849
can't do that because, and you all have done the effort

02:20:32.190 --> 02:20:35.739
and sat at the table and made it work and I think

02:20:36.058 --> 02:20:39.569
um we may be taking baby steps here and we may have

02:20:39.579 --> 02:20:43.500
bigger challenges to solve in the future. But I'm proud

02:20:43.509 --> 02:20:46.079
that you all did that. I'm proud that you all have

02:20:46.088 --> 02:20:49.700
seen that there can be value in this. And that's going

02:20:49.709 --> 02:20:53.040
to continue to grow in our system. (item:27:Commissioner McAdams on enhancements to the program) So I, I I've got

02:20:53.049 --> 02:20:56.058
a number of asks that I think because I know the the

02:20:56.069 --> 02:21:01.540
hour is late. But um enhancements to the mission and

02:21:01.549 --> 02:21:04.759
deliverables of our task force and both with the assistance

02:21:04.769 --> 02:21:08.479
of and with the assistance of ERCOT. I, I think we're

02:21:08.489 --> 02:21:11.940
already doing this, but I think I need, we need the

02:21:11.950 --> 02:21:16.088
task force to start collecting the reasons and systematically

02:21:16.099 --> 02:21:19.129
providing solutions to incentivize competition and

02:21:19.138 --> 02:21:22.620
attract broad participation. Um

02:21:24.239 --> 02:21:29.009
Along with that, I think ERCOT, if bandwidth permits

02:21:29.468 --> 02:21:33.729
uh over the next quarter should try to outline how

02:21:33.739 --> 02:21:37.229
the program could evolve as you learn, especially as

02:21:37.239 --> 02:21:40.950
we get through this peak um crossing through September

02:21:40.959 --> 02:21:46.138
into a shoulder month of uh October and November. Um

02:21:46.149 --> 02:21:48.808
how this program could evolve and what steps and metrics

02:21:48.819 --> 02:21:53.849
we need to have met to unlock other services that ars

02:21:53.860 --> 02:21:57.209
theoretically could participate in because we need

02:21:57.218 --> 02:22:02.009
that as that is the goal. Um and the market will respond

02:22:02.129 --> 02:22:04.950
with new innovations and technologies to satisfy the

02:22:04.959 --> 02:22:07.110
concerns of ERCOT. But we need ERCOT to be able to

02:22:07.120 --> 02:22:10.019
articulate those concerns so we can solve for them

02:22:10.819 --> 02:22:11.388
Um

02:22:13.659 --> 02:22:16.668
a comment that's been mentioned is that the concentration

02:22:16.679 --> 02:22:20.250
of these, these devices are not at scale uh that they

02:22:20.259 --> 02:22:23.918
would cause notable noticeable impacts to the transmission

02:22:23.929 --> 02:22:27.808
and distribution systems. I'd like the TDU and policy

02:22:27.819 --> 02:22:30.229
and research segments of the task force along with

02:22:30.239 --> 02:22:33.338
ERCOT to start considering what information we can

02:22:33.349 --> 02:22:37.250
extract from the pilot pilot today uh or from the systems

02:22:37.259 --> 02:22:42.058
to support the ADER program. Um We've got to start

02:22:42.069 --> 02:22:45.099
identifying, okay, what is that critical mass threshold

02:22:45.110 --> 02:22:48.588
that can be met to give us these lessons that we can

02:22:48.599 --> 02:22:51.799
start incorporating into our infrastructure processes

02:22:51.808 --> 02:22:54.989
and programs here at the Commission uh especially in

02:22:55.000 --> 02:22:59.099
light of ongoing projects around cost allocation interconnection

02:22:59.110 --> 02:23:03.418
standards. Um Those will be start to become very informative

02:23:03.610 --> 02:23:07.099
in strategic policy development that will allow this

02:23:07.110 --> 02:23:08.040
to come to market.

02:23:10.860 --> 02:23:14.110
Um one, one last thing Madam Chair if you'll humor me uh

02:23:14.120 --> 02:23:17.718
for continuity. (item:27:Commissioner McAdams on keeping membership same for Task Force) Uh while we have the Commission here

02:23:17.899 --> 02:23:20.349
I would like for the task force membership to remain

02:23:20.360 --> 02:23:23.200
the same uh over the next year. We've celebrated the

02:23:23.209 --> 02:23:25.829
anniversary as a part of our governing documents. We

02:23:25.838 --> 02:23:28.239
called for a reevaluation of the composition of the

02:23:28.250 --> 02:23:33.450
task force since we have finally uh operationalized

02:23:33.459 --> 02:23:37.468
the uh program. I think it is invaluable to keep the

02:23:37.479 --> 02:23:40.379
current composition if at all possible, so that we

02:23:40.388 --> 02:23:44.659
can better refine these uh near term lessons and then

02:23:44.668 --> 02:23:48.200
start talking about how to scale to that next level

02:23:48.599 --> 02:23:51.759
Um I understand the task force members may have delegated

02:23:51.769 --> 02:23:54.379
responsibility to someone else on their team, but I

02:23:54.388 --> 02:23:57.750
would ask that they uh update the membership and submit

02:23:57.759 --> 02:24:00.610
those in Project 53911.

02:24:02.819 --> 02:24:05.418
Do you guys have anything else? I know we'll spend

02:24:05.429 --> 02:24:09.099
a lot of time together this afternoon. Ok, great. Thank

02:24:09.110 --> 02:24:10.200
you very much for being here.

02:24:11.888 --> 02:24:16.500
Great update and um I guess happy birthday to the ADER

02:24:18.668 --> 02:24:23.819
Task Force. Yeah. Okay. I don't have anything on Items uh 28 or 29

02:24:23.829 --> 02:24:29.579
y'all. You already took up uh Item 30. (item:31: Chairwoman Jackson lays out Project No. 55323) Next up is Item

02:24:29.588 --> 02:24:34.989
31, Project No. 55323, Review of renewable standard

02:24:35.000 --> 02:24:39.629
portfolio. PUC Staff filed a memo. Iliana, uh do you

02:24:39.638 --> 02:24:42.540
want to come up and please lay out your memo? Iliana De La Fuente 

02:24:52.679 --> 02:24:57.049
Is this a good volume? Gotcha. (item:31:Iliana De La Fuente with Commission Staff on their memo on Renewable Portfolio Standard Program) Uh well, good morning Commissioners.

02:24:57.058 --> 02:25:01.019
Um it's Iliana De La Fuente for Commission Staff. I'm talking

02:25:01.030 --> 02:25:05.149
about our memo regarding the Renewable Portfolio Standard

02:25:05.159 --> 02:25:09.888
program and its repeal. Uh Section 39.904 of the Public

02:25:09.899 --> 02:25:13.950
Utility Regulatory Act enacted by the 75th Legislative

02:25:14.013 --> 02:25:17.405
Session. Required the Commission to establish a renewable

02:25:17.415 --> 02:25:22.183
energy credit or REC trading program. With goals for increased

02:25:22.194 --> 02:25:25.724
renewable energy generating capacity. In response,

02:25:25.735 --> 02:25:28.584
the Commission created a mandatory renewable portfolio

02:25:28.593 --> 02:25:34.718
standard or RPS under 16 TAC Section 25.173 House

02:25:34.729 --> 02:25:37.929
Bill 1500 from the 88th Legislative Session. Restricts

02:25:37.940 --> 02:25:41.940
the REC trading program to solar only generations starting

02:25:41.950 --> 02:25:45.929
September 1, 2023 and repeals the program completely

02:25:45.940 --> 02:25:50.349
on September 1, 2025. Additionally, House Bill 1500

02:25:50.360 --> 02:25:54.280
requires ERCOT to maintain an accreditation and banking system

02:25:54.290 --> 02:25:57.959
to award and track voluntarily renewable energy credits.

02:25:58.179 --> 02:26:02.329
Because of the repeal of Section 39.904 PURA becomes

02:26:02.338 --> 02:26:06.694
effective on September 1. The man for renewable portfolio

02:26:06.704 --> 02:26:10.735
standard obligations imposed on retail entities under

02:26:10.745 --> 02:26:15.165
Section 25.173, lack statutory support. To comply with

02:26:15.174 --> 02:26:17.864
the statute, Commission Staff recommends that the Commission

02:26:17.875 --> 02:26:21.084
direct ERCOT to follow the five directives that we

02:26:21.093 --> 02:26:25.019
laid out in our memo. (item:31:Chairwoman Jackson reiterates Staff's memo and presents motion) Okay so just to reiterate. Staff

02:26:25.030 --> 02:26:28.360
is recommending we direct ERCOT to suspend allocating

02:26:28.370 --> 02:26:31.870
renewable portfolio portfolio standard obligations

02:26:31.879 --> 02:26:36.329
to retail entities. Effective August 31, 2023 established

02:26:36.338 --> 02:26:40.718
a modified 2023 compliance period and maintain an accreditation

02:26:40.729 --> 02:26:44.138
and banking system to award and track renewable energy

02:26:44.149 --> 02:26:47.940
credits. I agree with Staff's memo and agree for ERCOT

02:26:47.950 --> 02:26:50.769
to take the actions as described in the memo. Do

02:26:50.780 --> 02:26:56.509
we have any thoughts or a motion? So moved. (item:31:Commissioner Glotfelty on REC) I, I have I

02:26:56.519 --> 02:26:59.168
have one thing. And, and that is uh on No. 5.

02:26:59.179 --> 02:27:01.709
which was to maintain accreditation and banking system

02:27:01.718 --> 02:27:04.769
to award and track RECs really, really important.

02:27:04.780 --> 02:27:06.808
I don't know the, that the Legislature thinks about

02:27:06.819 --> 02:27:09.569
this. They were thinking about this from a renewable

02:27:09.579 --> 02:27:13.049
portfolio standard perspective, but as we move into

02:27:13.058 --> 02:27:16.918
green hydrogen and other things like that, it's critically

02:27:16.929 --> 02:27:21.979
important that those attributes come from. If it's

02:27:21.989 --> 02:27:25.058
considered green, that there is a REC associated

02:27:25.069 --> 02:27:29.360
with that component. It it is a certification to prove

02:27:29.370 --> 02:27:32.709
that that's green hydrogen. So um tracking banking

02:27:32.718 --> 02:27:36.649
these are critically important as we go forward and

02:27:36.659 --> 02:27:38.838
um we'll see how it evolves. But I think that that's

02:27:38.849 --> 02:27:41.049
a really important piece and I appreciate y'all keeping

02:27:41.058 --> 02:27:43.959
it in there. (item:31:Motion passes) Yeah. Yeah.

02:27:45.718 --> 02:27:51.629
I'll second. Okay. We have a motion and a second. All

02:27:51.638 --> 02:27:54.690
in favor, say aye. Aye. Motion passes.

02:28:00.549 --> 02:28:04.519
(item:32:Chairwoman Jackson lays out both Projects Nos. 37344 and 41211 to be presented together) Next up is Item 32. We're going to take up Items 32

02:28:04.530 --> 02:28:11.968
and 33 together. Projects Nos. 37344 and 41211. Information

02:28:11.979 --> 02:28:15.929
related to the Entergy Regional State Committee and information

02:28:15.940 --> 02:28:19.360
related to the organization of MISO states. Commissioner

02:28:19.370 --> 02:28:22.530
Cobos you filed a memo, would you lay that out? (item:33:Commissioner Cobos lays her memo) Yes,

02:28:22.540 --> 02:28:25.679
um thank you Chair Jackson. So essentially this is

02:28:25.690 --> 02:28:28.218
just an update on some activity that we recently had

02:28:28.229 --> 02:28:31.940
through the ERSE and OMS and the MISO market. Um

02:28:32.319 --> 02:28:36.459
As early as this next month in September, MISO is expected

02:28:36.468 --> 02:28:42.509
to file a tariff revision at FERC to uh implement its

02:28:42.519 --> 02:28:47.239
reliability based demand curve proposal, which is essentially

02:28:47.250 --> 02:28:50.509
a downward sloping curve that in that also includes

02:28:50.519 --> 02:28:53.968
as part of the uh change to the curve from a vertical

02:28:53.979 --> 02:28:57.049
demand curve to a downward sloping curve. It also includes

02:28:57.058 --> 02:29:04.079
an opt-out mechanism. And so, um the, the, the opt-out

02:29:04.088 --> 02:29:08.870
mechanism is, is what our ERSC even uh adopted a resolution

02:29:08.879 --> 02:29:12.069
that largely focuses on the opt-out mechanism, proposed

02:29:12.079 --> 02:29:15.168
opt-out mechanism process that MISO has laid out. And

02:29:15.179 --> 02:29:18.588
essentially MISO current proposed opt-out mechanism

02:29:18.599 --> 02:29:24.849
um requires that um an LSEs that elects to opt out of

02:29:24.860 --> 02:29:29.659
MISO's planning resource action is required to make a

02:29:29.668 --> 02:29:32.159
showing of additional capacity beyond their current

02:29:32.168 --> 02:29:34.750
resource adequacy requirement. So, what they're exploring

02:29:34.759 --> 02:29:39.750
right now is planning reserve margin plus x percent

02:29:39.759 --> 02:29:43.338
and we don't know what that is right now, um which

02:29:43.349 --> 02:29:47.138
could result in LSEs having a larger resource adequacy

02:29:47.149 --> 02:29:52.679
requirement if they opt out of the MISO PRA. So we're

02:29:52.690 --> 02:29:56.000
looking at this issue from a um you know, not only

02:29:56.009 --> 02:29:58.168
reliability standpoint where you're making, you know

02:29:58.179 --> 02:30:02.620
potentially by making the MISO opt out process. Um

02:30:02.929 --> 02:30:06.888
not as attractive of getting all of the LSEs to put

02:30:06.899 --> 02:30:10.218
all their capacity into the PRA and, and then also

02:30:10.229 --> 02:30:12.299
from a cost perspective because if you are, if you

02:30:12.308 --> 02:30:15.679
opt out of the pr A currently under my opt out mechanism

02:30:15.690 --> 02:30:17.808
proposal, if you opt out of the PRA. The plan and

02:30:17.819 --> 02:30:21.418
resource auction, you have extra requirements, you

02:30:21.429 --> 02:30:23.899
have to meet right now, the, the planning reserve margin

02:30:23.909 --> 02:30:26.468
plus and X factor. And if you can't meet that, then

02:30:26.479 --> 02:30:30.588
you're subject to penalties. (item:32:Commissioner Cobos on Entergy Regional States Committee adopting a resolution) So on August 9, the

02:30:30.599 --> 02:30:33.418
Entergy Regional States Committee adopted a resolution requesting

02:30:33.429 --> 02:30:36.259
that MISO filed an opt out mechanism in their tera

02:30:36.269 --> 02:30:39.319
filing to FERC. That is consistent with the principles

02:30:39.329 --> 02:30:43.450
laid out in the Entergy operating companies. AFRA proposal

02:30:43.459 --> 02:30:45.838
and a standing for advanced fixed resource adequacy

02:30:45.849 --> 02:30:53.019
plan. And based on our review, Entergy's proposal allows LSEs

02:30:53.030 --> 02:30:57.159
to self supply a set amount of their, of their Load

02:30:57.729 --> 02:31:01.388
you know, it could be 60%, 70% you know. There's no

02:31:01.399 --> 02:31:04.379
set amount yet, but just provides the LSE some flexibility

02:31:04.388 --> 02:31:07.739
as to how much they're required to put into MISO's PRA

02:31:07.750 --> 02:31:11.870
and how much they can self supply. So to mitigate the

02:31:12.610 --> 02:31:15.269
the reliability potentially, but also cost impact of

02:31:15.280 --> 02:31:17.250
not being exposed to all those penalties if you're

02:31:17.259 --> 02:31:22.739
not able to meet PRM plus x percent. Um so, essentially

02:31:22.750 --> 02:31:26.009
um we laid out our position. (item:33:Commissioner Cobos on ERC) ERC laid out our and,

02:31:26.019 --> 02:31:29.620
and the ERC again, consisting of all of the MISO self regulators

02:31:29.629 --> 02:31:32.780
that um are within Entergy's footprint. Um laid out our

02:31:32.790 --> 02:31:36.780
reasoning as to why we wanted MISO to consider in terra

02:31:36.790 --> 02:31:43.729
filing to FERC Entergy's um AFRA proposal. And, and so ultimately, um

02:31:43.739 --> 02:31:47.069
we've sent that to MISO leadership and then on August

02:31:47.079 --> 02:31:50.399
14, the organization of MISO States. Which is comprised

02:31:50.409 --> 02:31:54.759
of a much broader um group of regulatory bodies, uh

02:31:55.120 --> 02:31:59.638
17 actually. And but only 16 voted on sending the

02:31:59.649 --> 02:32:03.360
letter to MISO. So um ultimately, OMS the organization

02:32:03.370 --> 02:32:07.829
of state submit a letter to MISO, supporting MISO's RBDC

02:32:07.838 --> 02:32:11.159
proposal and their proposed opt out mechanism. And

02:32:11.168 --> 02:32:15.569
so the vote was basically 11 to 5. Um 11 being the

02:32:15.579 --> 02:32:19.218
state supporting MISO RBDC proposal. That includes their

02:32:19.229 --> 02:32:23.429
opt out mechanism. And the five being the ERSC, the

02:32:23.440 --> 02:32:26.899
states that comprise the, ERSC which is Texas, Mississippi,

02:32:26.909 --> 02:32:30.159
Arkansas, Louisiana. And um also the City of New Orleans.

02:32:30.610 --> 02:32:33.808
So essentially really what's going on here is, you

02:32:33.819 --> 02:32:35.909
know, we're trying to start a position here so that

02:32:35.918 --> 02:32:39.200
MISO can take that into consideration and we can start

02:32:39.540 --> 02:32:43.929
um, laying out our position so that if ultimately MISO follows

02:32:43.940 --> 02:32:46.668
the tariff provisions at FERC. We have stayed in our

02:32:46.679 --> 02:32:49.679
position and can then, um, examine what next steps

02:32:49.690 --> 02:32:53.149
would be at the federal level on this issue. Because

02:32:53.159 --> 02:32:57.209
as you know, Commissioner McAdams and I are constantly

02:32:57.218 --> 02:33:03.049
working on making sure that in these other multi state

02:33:03.308 --> 02:33:07.620
um ISO RTOs that the interests of our ratepayers,

02:33:07.629 --> 02:33:11.079
both from reliability and and cost perspective is protected

02:33:11.479 --> 02:33:14.110
um on all of these initiatives, whether they be from

02:33:14.120 --> 02:33:16.218
transmission planning, which that was my last update

02:33:16.229 --> 02:33:18.620
on the long range transmission planning, cost allocation

02:33:18.629 --> 02:33:22.649
concept, but also from a wholesale market design perspective

02:33:22.659 --> 02:33:26.009
(item:33:Commissioner Cobos on resource adequacy) As MISO is also facing the same challenges that all the

02:33:26.019 --> 02:33:29.280
ISOs across the country are, which is looking at resource

02:33:29.290 --> 02:33:32.429
adequacy. How do you ensure resource adequacy and evolving

02:33:32.440 --> 02:33:35.418
um generation portfolio makes with more renewables

02:33:35.429 --> 02:33:38.349
on the system, retirements of dispatchable generation

02:33:38.599 --> 02:33:41.200
It's all pretty much the same situation that, that

02:33:41.209 --> 02:33:44.000
everybody's in, right, especially with more extreme

02:33:44.009 --> 02:33:47.780
um winter and hot weather. And so as part of their

02:33:47.790 --> 02:33:51.569
wholesale market design or resource adequacy, wholesale

02:33:51.579 --> 02:33:55.129
market evaluation, they have been looking to make changes

02:33:55.138 --> 02:33:59.838
to the PRA. Um but it's, it's really not just the

02:33:59.849 --> 02:34:02.138
PRA that we're looking at, it's what's underneath

02:34:02.149 --> 02:34:04.929
that hood and underneath that hood is an opt out process

02:34:04.940 --> 02:34:09.299
that could result in costs for our ratepayers. And

02:34:09.308 --> 02:34:13.058
that's, that's ultimately where I was able to engage

02:34:13.069 --> 02:34:17.659
the rest of the MISO South Regulators in developing a consensus

02:34:17.668 --> 02:34:22.549
position on this very important topic. Has Dr. Patton

02:34:22.558 --> 02:34:26.149
have a view on, I know he does on the slope demand

02:34:26.159 --> 02:34:29.790
curve, but in terms of a fairness question around this?

02:34:29.799 --> 02:34:33.110
(item:32:Commissioner Cobos on downward sloping curve) Um I think he's, he's uh from what I understand, he

02:34:33.120 --> 02:34:36.259
supports a downward sloping curve, right? And um I

02:34:36.269 --> 02:34:41.120
think from what I understand is that, you know, from

02:34:41.129 --> 02:34:43.399
a pure economic perspective, standpoint, he would like

02:34:43.409 --> 02:34:47.838
to see all capacity in the auction. And so, um I don't

02:34:47.849 --> 02:34:50.918
know about the fairness aspect of it, but I do know

02:34:50.929 --> 02:34:55.360
from his, you know, um economic markets perspective

02:34:55.370 --> 02:34:58.239
I think um he has been supporting or, or advocating

02:34:58.250 --> 02:35:01.989
for a downward demand sloping curve in my for quite

02:35:02.000 --> 02:35:05.479
some time. And because MISO's PRA when they, you know

02:35:05.489 --> 02:35:08.030
they have a vertical demand curve when, when they run

02:35:08.040 --> 02:35:11.200
it last year and it went from, you know, low pricing

02:35:11.209 --> 02:35:15.690
straight to color everybody, you know, sort of um reacted

02:35:15.700 --> 02:35:18.629
to that and started looking at how can we better set

02:35:18.638 --> 02:35:23.909
up the PRA auction, the auction to um have more effective

02:35:23.918 --> 02:35:28.838
um capacity pricing to ince and retain generation and

02:35:28.849 --> 02:35:31.338
and that may be a good concept in general, right? We

02:35:31.349 --> 02:35:34.209
we try to do that with or DC, it's just the opt

02:35:34.218 --> 02:35:37.519
out process and having all of your capacity be put

02:35:37.530 --> 02:35:41.120
in the auction is problematic. Um, you know, and, and

02:35:41.129 --> 02:35:45.379
so, but is that capacity in fact deliverable? I mean

02:35:46.610 --> 02:35:51.418
is it no? Right. I mean, so this is just a arithmetic

02:35:51.429 --> 02:35:56.459
exercise for a workbook certification that means nothing

02:35:56.468 --> 02:35:59.690
in terms of operational capability. Well, and, and

02:35:59.700 --> 02:36:02.849
I think it's, it's about, I think different states

02:36:02.860 --> 02:36:04.629
are in different positions, right? Some are long on

02:36:04.638 --> 02:36:08.638
capacity, some are short. And so if you have more uh

02:36:08.649 --> 02:36:11.418
this downward sloping demand curve, if you're long

02:36:11.429 --> 02:36:14.269
it can be quite beneficial to your book versus if you're

02:36:14.280 --> 02:36:19.179
short and you're potentially subject to the um penalties.

02:36:19.588 --> 02:36:22.799
So you know every, every state is in a different

02:36:22.808 --> 02:36:25.099
position and they're advocating for their position

02:36:25.110 --> 02:36:28.929
Some states lean almost 100% if not 100% on the PRA

02:36:28.940 --> 02:36:32.549
uh because they have very aggressive clean energy

02:36:32.558 --> 02:36:36.558
uh renewable standard goals. (item:32:Commissioner Cobos on dispatchable generation portfolio) And so what I know from

02:36:36.780 --> 02:36:40.319
our work on Entergy is that energy has an all dispatchable

02:36:40.329 --> 02:36:42.838
generation portfolio right now that our ratepayers

02:36:42.849 --> 02:36:44.940
are paying for will be paying for. And we got to make

02:36:44.950 --> 02:36:48.668
sure that those investments and those ratepayer monies

02:36:48.679 --> 02:36:51.610
are used to maintain reliability in Texas in Southeast

02:36:51.620 --> 02:36:57.030
Texas. And that ultimately, that impacts reliability

02:36:57.040 --> 02:36:57.819
and cost again.

02:37:01.700 --> 02:37:07.149
These are complex matters, lots of acronyms RBDC, ORDC

02:37:07.159 --> 02:37:12.540
you know. I live in a world of acronyms and hopefully

02:37:12.549 --> 02:37:15.968
you guys can appreciate this now. Well, we appreciate

02:37:15.979 --> 02:37:18.479
you looking out for Texas and particularly ratepayers

02:37:18.489 --> 02:37:23.540
in Texas. So, um thank you. Um I don't have anything

02:37:23.549 --> 02:37:27.540
on Item 34 unless y'all do. (item:35:Chairwoman Jackson lays out Commissioner Glotfelty's new appointment) Uh next up is Item No.

02:37:27.549 --> 02:37:31.819
35. This is our standing item for the electric reliability

02:37:31.829 --> 02:37:35.500
discussion, as we mentioned at the top of the agenda

02:37:35.509 --> 02:37:38.918
Commissioner Glotfelty is going to be leading a new

02:37:38.929 --> 02:37:43.549
advanced nuclear reactors working group in Texas. For

02:37:43.558 --> 02:37:46.429
those of you who may not know Commissioner Glotfelty

02:37:46.440 --> 02:37:49.718
serves on the advanced nuclear state collaborative

02:37:49.729 --> 02:37:53.338
supported by the US Department of Energy that was initiated

02:37:53.409 --> 02:37:58.724
by NARUC and the National Association of State Energy officials.

02:37:58.864 --> 02:38:02.155
This is a collaborative effort of state utility regulators

02:38:02.165 --> 02:38:05.665
and state energy officials from across the US to enhance

02:38:05.674 --> 02:38:09.054
a collective understanding of the unique regulatory

02:38:09.065 --> 02:38:11.784
and policy questions surrounding the consideration

02:38:11.884 --> 02:38:15.849
and deployment of nuclear generation. Jimmy has a lot

02:38:15.860 --> 02:38:19.450
of experience and expertise and you will be a huge

02:38:19.459 --> 02:38:23.329
asset to Texas by leading this effort. And with that

02:38:23.338 --> 02:38:28.569
you filed a memo in Project 54446. Would you want to

02:38:28.579 --> 02:38:31.429
lay out your memo? (item:35:Commissioner Glotfelty lays out his memo under Project No. 54446) I would thank you Madam Chairman.

02:38:31.959 --> 02:38:37.168
merely this is requesting a new project number to be

02:38:37.179 --> 02:38:40.860
the catch all for for this new task force that we're

02:38:40.870 --> 02:38:44.329
creating to look at the issues surrounding advanced

02:38:44.338 --> 02:38:48.790
nuclear in Texas. We will have much more information

02:38:48.799 --> 02:38:52.250
coming forth at the September meeting but most importantly

02:38:52.259 --> 02:38:54.588
that people know that there's a docket where they can

02:38:54.599 --> 02:38:57.614
look and they can file comments. We'll be asking questions

02:38:57.625 --> 02:38:59.944
we'll be putting potential members in there. We'll

02:38:59.954 --> 02:39:02.263
have all sorts of meeting notices in there. But that

02:39:02.274 --> 02:39:06.013
would, it, it's primary that we get uh a single repository

02:39:06.024 --> 02:39:08.013
for this going forward. And that's what we requested

02:39:08.024 --> 02:39:11.713
at. Is this gonna follow sort of like uh the paradigm

02:39:11.724 --> 02:39:15.495
of the ADER Task Force uh governing document, set number

02:39:15.504 --> 02:39:18.343
of members? Uh we are working through that right now.

02:39:18.683 --> 02:39:22.668
We are working through that right now. So I think people

02:39:22.679 --> 02:39:25.588
across Texas are asking about nuclear and specifically

02:39:25.599 --> 02:39:29.168
this new technology. And so really, really happy to

02:39:29.179 --> 02:39:31.989
have been given this task and to have you leading it

02:39:32.000 --> 02:39:32.218
So

02:39:33.950 --> 02:39:36.299
I don't have any. And, and let me just say we also.

02:39:36.308 --> 02:39:40.549
Um clearly you all will have um we're creating this

02:39:40.558 --> 02:39:43.979
docket. Um you all will be part of this as well. I

02:39:43.989 --> 02:39:48.509
mean, we're gonna have lots of these won't be docketed

02:39:48.519 --> 02:39:54.019
items for uh for formal decisions, but clearly you

02:39:54.030 --> 02:39:57.909
all have roles in this and to have your views and inputs

02:39:57.918 --> 02:39:59.280
at these meetings is really important.

02:40:00.979 --> 02:40:03.418
I, I think he's looking for a co-pilot on joint.

02:40:05.700 --> 02:40:06.668
Oh, I can draft you.

02:40:08.629 --> 02:40:10.739
Well, I think you'll have, you know, all of us helping

02:40:10.750 --> 02:40:10.829
you..

02:40:12.459 --> 02:40:16.030
Uh I don't have anything for items 36 or 37 unless

02:40:16.040 --> 02:40:20.959
y'all do. Uh Item 38 was Consented. (item:39:Chairwoman Jackson lays out the agency administrative issues) And now we'll take

02:40:20.968 --> 02:40:24.739
up Item No. 39 our standing item for agency administrative

02:40:24.750 --> 02:40:27.729
issues. Uh Thomas, I believe you have an update. Yes

02:40:27.739 --> 02:40:29.918
ma'am. (item:39:Thomas Gleeson, PUC Executive Director on modification on taking public comments in open meetings) Thank you Madam Chair, Commissioners. Just real

02:40:29.929 --> 02:40:34.019
briefly, um a modification to one of our processes

02:40:34.030 --> 02:40:36.588
the process around taking public comment in our open

02:40:36.599 --> 02:40:39.940
meetings with the passage of House Bill 1500. We are

02:40:39.950 --> 02:40:42.940
now required to include public comment as a meeting

02:40:42.950 --> 02:40:46.620
agenda item during our open meetings. And so we've

02:40:46.629 --> 02:40:51.138
developed a process that I think is in alignment with

02:40:51.149 --> 02:40:54.229
the requirements of the Bill and also conforms to the

02:40:54.239 --> 02:40:57.979
intent of the Legislature. As I've had numerous conversations

02:40:57.989 --> 02:41:00.500
with folks over in the Capitol about what the plan

02:41:00.509 --> 02:41:05.569
is for this and with Sunset Staff. So regarding Items

02:41:05.579 --> 02:41:10.500
that are regarding public comment on general items

02:41:10.509 --> 02:41:14.308
and those things that are not on our Agenda. The process

02:41:14.319 --> 02:41:16.718
will remain the same all the sign up sheet and we'll

02:41:16.729 --> 02:41:20.040
take those up under Item No. 1. For items that

02:41:20.049 --> 02:41:22.280
are on the agenda to be taken up. We're going to do

02:41:22.290 --> 02:41:25.229
that in two different ways. If an item is on the Consent

02:41:25.239 --> 02:41:27.780
Agenda, we're going to take all those comments up at

02:41:27.790 --> 02:41:31.079
the very beginning before the Consent Agenda is approved.

02:41:31.088 --> 02:41:34.088
For items that are up for your consideration that are

02:41:34.099 --> 02:41:36.860
not on the consent agenda. We're going to have commission

02:41:36.870 --> 02:41:39.759
counsel lay out that item and then call a public comment

02:41:39.769 --> 02:41:41.588
on each of those items individually.

02:41:43.120 --> 02:41:45.579
I like I said, I think this conforms to, to what the

02:41:45.588 --> 02:41:49.519
intent and the letter of the law is. It is also very

02:41:49.530 --> 02:41:53.138
closely mirrored to what TCEQ currently does. And so

02:41:53.149 --> 02:41:55.739
when we were formulating this, we looked to a sister

02:41:55.750 --> 02:41:59.049
agency and what they already do. So that's our plan

02:41:59.058 --> 02:42:02.530
happy to take any feedback. Um But this will start

02:42:02.579 --> 02:42:05.058
at our next open meeting in September. We're working

02:42:05.069 --> 02:42:08.209
on a guidance document um from the Office of Public

02:42:08.218 --> 02:42:12.079
Engagement. And if we come to our next open meeting

02:42:12.088 --> 02:42:15.049
before that document is completed, um I've recruited

02:42:15.069 --> 02:42:17.239
our Office of Public Engagement to stand outside the

02:42:17.250 --> 02:42:19.989
open meeting to assist people with signing up.

02:42:22.129 --> 02:42:25.019
Okay. (item:39:Chairwoman Jackson reiterates public comments modifications format) So just to reiterate since the format for the public

02:42:25.030 --> 02:42:27.950
comment will be different at our next open meeting.

02:42:28.000 --> 02:42:30.700
We wanted to provide the public and stakeholders advance

02:42:30.709 --> 02:42:33.190
notification that the change is coming. That's correct.

02:42:33.329 --> 02:42:36.790
Thank you. Uh I don't have anything for Items 40 or

02:42:36.799 --> 02:42:40.979
41, unless y'all do. We've already done 42 which brings

02:42:40.989 --> 02:42:45.030
us to the end of our Agenda. (item:42:Chairwoman Jackson adjourns meeting) There being no further

02:42:45.040 --> 02:42:47.409
business to come before the Commission. This meeting

02:42:47.418 --> 02:42:50.168
of the Public Utility Commission of Texas is hereby

02:42:50.179 --> 02:42:52.729
adjourned at 1:34 p.m.