Meeting Summary - 05/15/2025 Open Meeting

▶️0 - Chairman Gleeson calls meeting to order

▶️0 - Commissioner Jackson on Internal Audit Awareness Month

• Governor Abbott proclaimed May as Internal Audit Awareness Month, praising commitment to excellence, transparency, and efficiency.
• Auditors play a crucial role in risk management and promoting operational integrity by identifying requirements and evaluating processes.
• Internal audit processes focus on continuous improvement and addressing areas for growth.
• There is a cultural embrace of internal audits across the state that supports operational integrity.

▶️0.1 - Commission Counsel Shelah Cisneros lays out Consent Agenda

• Recusal memos were filed in Project No. 52761.
• Chairman Gleeson is recused from Item No. 2.
• Commissioner Hjaltman is recused from Item No. 6.
• Items placed on consent agenda include: 3, 4, 7-12, 14, 17, 18, 21-23, 28 and 31.
• Item No. 6 will not be addressed in the current meeting.
• Motion to approve consent agenda passed unanimously.

▶️1 - Public comment for matters that are under the Commission’s jurisdiction, but not specifically posted on this agenda

• No individuals signed up for public comment on this agenda item.
• There were no public comments for other items on the agenda.

▶️2 - Docket No. 48836; SOAH Docket No. 473-19-1422.WS – Petition of Paloma Lake MUD No. 1, Paloma Lake MUD No. 2, Vista Oaks Municipal Utility District, Williamson County Municipal Utility District No. 10, and Williamson County Municipal Utility District No. 11 Appealing the Wholesale Water and Wastewater Rates Imposed by the City of Round Rock

• SOAH proposal for decision is presented.
• Exceptions to the PFD were filed by petitioners and Commission Staff.
• SOAH Administrative Law Judge does not recommend changes to the PFD.
• Commissioner Hjaltman filed a memo related to this docket.

▶️2 - Commissioner Hjaltman lays out her memo

• The case has been ongoing since 2018.
• Commissioner Hjaltman expresses appreciation for Staff handling the case.
• The memo provides clarifications due to the long duration of the case.
• Some interim orders require clarification.
• Recommendations include removing certain findings of fact and unnecessary policy statements.
• Clarification requested for finding of fact 44 regarding municipal guides.
• Agreement with the memo proposals.
• A motion to proceed with the recommendations is suggested.
• Motion to adopt the PFD with changes passed unanimously.

▶️5 - Docket No. 55627 – Application of CSWR-Texas Utility Operating Company, LLC and City of Quinlan for Sale, Transfer, or Merger of Facilities and Certificate Rights in Hunt County

• There were some concerns around the notice requirement for the application.
• One participant expressed comfort with approving the revised proposed order, seeking others' thoughts.
• A suggestion was made to modify the order to include a good cause exception on the notice requirement.
• General agreement among participants to move forward with the order and grant the good cause exception.
• Participants noted the importance of aiding a struggling small community in achieving adequate water supply through the sale transfer merger.
• Motion to approve the revised proposed order passed unanimously.

6

• Not Discussed

▶️13 - Docket No. 57306 – Petition of Michael Kohlenberg, Patricia Kohlenberg, Meredith Leigh Urban Hartl, Deborah Jackson, and Travis Baker to Amend Springs Hill Water Supply Corporation’s Certificate of Convenience and Necessity in Guadalupe County by Streamlined Expedited Release

• The revised proposed order is presented for approval with modifications as per the Chairman's memo.
• The modifications mainly involve recognizing Spring Hill SUD as the CCN holder and addressing mapping issues.
• All participants in the discussion agreed with the proposed order and the modifications in the memo.
• Similar issues are expected to be addressed in agenda items 15 and 16.
• A motion was entertained to approve the revised proposed order. The changes discussed were consistent with the memo.
• Motion to approve the revised proposed order passed unanimously

▶️15 - Docket No. 57421 – Petition of Deborah Jackson, Michael Kohlenberg, and Patricia Kohlenberg to Amend Springs Hill Water Supply Corporation’s CCN in Guadalupe County by Streamlined Expedited Release

• Chairman filed a memo similar to the one in item 13.
• Applied the same approach as in item 13 for the current petition.
• Consensus in agreement with the proposed actions.
• A motion was entertained to approve the revised proposed order with changes as per the memo.
• Motion to approve the revised proposed order passed unanimously

▶️16 - Docket No. 57424 – Petition of Bruce Harborth, Jeffrey Harborth, and Vicki Hartwick, Trustees of the Irma Randow Trust, to Amend Springs Hill Water Supply Corporation’s Certificate of Convenience and Necessity in Guadalupe County by Streamlined Expedited Release

• A revised proposed order was presented for this docket.
• The Chairman submitted a memo concerning the docket.
• This is the third SER related to similar issues.
• There was an expression of agreement among members present.
• Motion to approve the revised proposed order was considered.
• Motion to approve the revised proposed order passed unanimously

▶️19 - Docket No. 57259; SOAH Docket No. 473-25-06083 – Application of Southwestern Electric Power Company for Approval of a System Resiliency Plan

• A proposed order addressing a unanimous agreement was presented.
• The Chairman filed a memo concerning the document.
• SWEPCO was asked to present their System Resiliency Plan.

▶️19: Melissa Gage - SWEPCO VP of Reg. & Finance - Presentation of SRP

• Melissa Gage introduced herself and team members involved in the resiliency plan, highlighting SWEPCO's service area and customer distribution.
• The resiliency plan aims to address the primary cause of outages, which is linked to weather and vegetation.
• SWEPCO's territory is subject to severe weather events and increased wildfire risks, necessitating a robust resiliency strategy.
• SWEPCO has ongoing programs such as pole replacement, asset hardening, and vegetation management to enhance system reliability.
• The plan is developed around three primary vulnerabilities: vegetation, aging infrastructure, and right-of-way integrity.
• Iapetus Infrastructure Services was engaged due to their expertise in vegetation management and right-of-way integrity.
• Nearly half of the $180 million resiliency plan budget is allocated to enhanced vegetation management.
• Negotiations led to modifications in the plan, including the removal of SCADA investments and extending the vegetation enhancement timeline.

▶️19- Adam Keith - SWEPCO Director of Distribution Engineering - SRP Benefits

• SWEPCO's SRP aims to improve avoided CMI, avoided restoration costs, and economic benefits through reducing outage frequency and duration.
• The benefit-cost ratio is utilized for prioritizing projects based on value and impact.
• Emphasis is placed on reducing outage frequency and duration to enhance customer experience.
• SWEPCO's resiliency strategy includes right of way integrity, asset integrity, and operational integrity, with enhanced vegetation management as the foundation.
• The enhanced vegetation management program covers 3,400 miles of lateral segments affecting 99,000 customers.
• Distribution storm hardening is a key practice at SWEPCO, addressing legacy systems without resilient construction standards.
• Aging infrastructure, specifically through the lateral hardening program, focuses on replacing small copper wires susceptible to damage.
• DACR is part of SWEPCO's grid modernization, enhancing outage mitigation and system control.
• SWEPCO plans to reach 21% DACR penetration across the Texas distribution system.
• Evaluation metrics include reporting CMI and system restoration cost ratios, and the status of DACR project execution.
• SWEPCO plans a three to four-year execution plan for hardening, DACR, and vegetation management initiatives, guided by benefit-cost ratios.
• Concerns raised about vegetation management coverage and existing annual management, considering existing 2,800 miles of vegetation management miles done yearly.

▶️19 - Brian Sprinkle - Director of Consulting, Iapetus Infrastructure Services - Base Plan Rate

• The current base plan involves an annual expenditure of just under $15,000,000.
• The expenditure is divided into three main activities: proactive mechanized trimming on main feeder zones, reactive hot spotting reliability-based trimming, and herbicide application.
• Each of these activities accounts for approximately one-third of the total budget.
• The herbicide application focuses on branches, limbs, and trees but not aggressive removal.
• There is a reported mileage associated with the herbicide application, but it cannot be broken down further at this moment.

▶️19 - Melissa Gage - SWEPCO - Mileage Breakdown

• The 2,800 miles mentioned in testimony are based on current reliability trimming efforts.
• There is a need to achieve right of way integrity, which is not yet attained with current practices.
• Current efforts are more reactive, while a new resiliency plan aims to be proactive.
• The objective is to move from reactive hotspotting to maintaining right of way integrity proactively.

▶️19 - Brian Sprinkle - Iapetus Consultant - Cost of Vegetation Management

• Clarification sought on vegetation management cost estimates: $2.37/foot for some activities and $2.75/foot for others.
• Discussion centered on collaborating with Iapetus Infrastructure Services, which specializes in vegetation management. Analysis was conducted using historical data and projects familiar to them as well as ERCOT's own reliability-based program.
• The estimates discussed were $5.12 per foot per mile, totaling over $27,000 per mile. There was a question whether the planned 2800 miles of vegetation management equaling $14.57 million is correct, given the request for a little over $5,000 per mile.
• A request was made for ERCOT to verify the calculations and provide an update, with the next possible meeting being June 5th. There was acknowledgement of a holiday on May 27th.
• Mr. Sprinkle spoke about service territory specific to Childress, Texas, emphasizing the plan's focus on vegetation management in areas sparsely populated with people but densely populated with trees.
• Mr. Sprinkle described the stepwise process for vegetation management, adapted to different regions like Childress, Texas, which could have different requirements compared to East Texas.

▶️19 - Melissa Gage - SWEPCO - Vegetation Plan for Childress, TX

• The vegetation work is perceived to be occurring mostly in East Texas, but some is also happening in the Panhandle.
• The pole replacement program targets wildfire areas, with a significant portion in the Panhandle.
• Previous discussions have occurred regarding vegetation presence in East Texas vs. the Panhandle, with system-wide rates supporting different costs across regions.
• Efforts aim to improve resiliency equally across both regions, despite different focuses—more pole replacement in Childress, more vegetation management in Northeast Texas.
• The plan includes strategies to manage risk and improve resilience based on three key criteria.
• Attention is needed on maintaining performance levels after initial improvements in all territories, including Childress.

▶️19 - Brian Sprinkle - Iapetus Consultant - Pole replacements in Childress, TX

• An accelerated inspection program is in place to inspect all poles in the ten-year inspection plan for Childress by the end of the year.
• To date, over 4,000 poles have been replaced, with 92% located in wildfire-prone areas, mainly in the Panhandle.
• The vegetation management program involves 17 distribution circuits in Childress; seven are part of an enhanced program to handle tree issues better.
• A feeder hardening project is underway, with one of the 12 circuits, the Shamrock circuit, located in the Panhandle.
• Resiliency efforts are seen as a down payment toward an optimized management cycle for reliability and performance.
• Concern was raised about managing systems across different states, ensuring investment in Texas does not have negative effects elsewhere.
• There is an ongoing discussion on holistic management of risk to ensure the overall performance is not adversely affected by areas outside the immediate influence.

▶️19 - Melissa Gage - SWEPCO - Investment in Risk Management

• Filing of a resiliency plan in Texas is known as the system improvement plan.
• Similar plans are being filed in Arkansas (pending rate case) and in development for Louisiana.
• Pole replacements and system upgrades are part of the resiliency strategy across the network, not just in Texas.
• Attempt to improve systems is underway before regulators in two other states.

▶️19 - Brian Sprinkle - Iapetus Consultant - Strategic Pillars of Integrity

• Emphasis on right of way integrity, asset integrity, and operational integrity, originating from the Texas plan in 2023.
• Initial discussions with Commission and Commission Staff in Austin to improve operations.
• Strategic pillars have been applied beyond Texas to Arkansas and Louisiana.
• Strategies differ based on regional challenges; modeling for hurricanes in Louisiana and ice storms in Arkansas.
• Adoption of region-specific strategies leads to positive unintended outcomes.
• Interest in adopting technologies like LIDAR and satellite imagery for efficiency and enhanced performance.
• Inquiry about integrating advanced technologies into the vegetation management program.

▶️19 - Brian Sprinkle - Iapetus Consultant - Data

• Consideration of data as a critical component of the utility's distribution system equivalent to physical assets like poles and wires.
• Aim to have comprehensive data on rights of way through boots-on-the-ground planning and other technologies.
• Initiated a pilot project using satellite imagery to identify hazard trees in a state east of Texas.
• Potential to expand successful pilot projects.
• Discussion on regionalizing metrics for Texas regions like East Texas and Panhandle to prevent overlap.
• Acknowledgment of the need to provide supplemental information requested by the Commissioner.
• Plan to present updates in the June 5 open meeting.

▶️20 - Docket No. 57263; SOAH Docket No. 473-25-11564 – Application of Oncor Electric Delivery Company LLC to Amend Its CCN for the Hartring – Upland 138-kV Transmission Line in Reagan & Upton Counties

• SOAH made a proposal for decision which included exceptions filed by Oncor and the Commission Staff.
• The SOAH ALJs have not responded to the exceptions.
• The Chairman filed a memo regarding the proposal for decision.
• There was a discussion about clarifying language in the memo related to the basis of the Commission's determination of need.
• It was suggested that the approval should be based on both the RPG submittal and the information submitted within the application, not solely on the RPG submittal.
• The discussion concluded with a consensus to make changes to the consideration language to reflect the inputs from Oncor's exceptions.
• There was agreement among attendees about the clarifications and changes proposed.
• Motion to adopt the proposal for decision with mentioned changes was initiated.
• Motion to adopt the proposal passed unanimously

▶️24 - Docket No. 57816 – Application of Texas-New Mexico Power Company to Amend Its Distribution Cost Recovery Factor

▶️24 - Commissioner Hjaltman's recommendation to modify proposed order

• Clarification needed for the proposed order regarding rate case expenses.
• Proposed order recommends authorizing TNMP to record rate case expenses.
• Discrepancy noted between proposed order amount and affidavit amount.
• Affidavit states expenses as $12,746.50 for Alliance of Texas, New Mexico Power Municipality.
• Commissioner Hjaltman recommends modifying the order to reflect the correct amount of $12,746.50 as per the affidavit.

▶️24 - Shelah Cisneros confirming agreement of change to proposed order

• Recommendation to modify an ordering paragraph and possibly other sections due to the proposed changes.

▶️24 - Motion to approve proposed order with recommendations

• A motion was made to approve the proposed order with recommendations.
• Motion to approve proposed order passed unanimously.

25-26

• Not Discussed

▶️27 - Project No. 55999 – Reports of the Electric Reliability Council of Texas

▶️27 - Kristi Hobbs - ERCOT - Lays out ERCOT's filing from 05/01/25

• Kristi Hobbs discussed ERCOT's filing from May 1, 2025, which aimed to translate their adjusted load forecast into the regional transmission plan and requested a good cause exception from a protocol.
• Historically, ERCOT performed a long-term load forecast using an econometric base forecast with added signed contract letters. New requirements from HB 56 and NPRR1180 now include TSP attested officer letter loads.
• ERCOT identified an adjusted load forecast projecting over 200 gigawatts, with 86 gigawatts attributed to data centers, requiring adjustments for resource adequacy and transmission planning.
• Adjustments included a 180-day shift to loads based on historical performance and applying a 49.8% realization rate to data center loads, based on historical data and comparisons with peers.
• Officer letter loads were reduced by 55.4% based on recent experiences with these loads materializing.
• ERCOT removed loads for which they lacked model information or officer letters, and loads from transmission-only TSPs, requiring the retail-capable utility to provide an agency letter.
• A third-party forecast from CenterPoint was included, deemed credible in parts.
• Future regional transmission plan loads will include full contracted loads without a 180-day shift, maintaining a planning guide process starting from the base case and building on necessary projects.
• ERCOT sought a good cause exception to handle TSP officer letter loads by applying discussed percentage criteria, aiming to reduce the projected over 200 gigawatt total closer to 145-160 gigawatts.

▶️27 - Chairman Gleeson & Commissioner's thoughts

• Concerns were raised about the current methodology used and the need for refinement to ensure accuracy.
• There's an agreement to explore alternative methodologies and present them at the next open meeting.
• The necessity for standardization among TDSPs in how they count loads was highlighted.
• Legislation in process may assist with standardization, but there's an emphasis on prioritizing this task regardless.
• The importance of taking time to ensure an accurate and effective plan for ERCOT's future load and growth needs was stressed.
• Compliance with statutory requirements, such as HB5066, for signed contract numbers was noted as mandatory.
• The committee discussed the balancing act between granting a good cause exception and meeting legal obligations.
• A long-term aim is set to develop a standardized process to ensure that all key metrics and incentives are aligned towards ERCOT's goals.

▶️27 - Matthew Arth - ERCOT - Numbers presented in the RPG process

• Discussion on House Bill 5066.
• Bill requires the Commission to consider actual numbers submitted by TSP.
• ERCOT believes numbers could be presented in the RPG process.
• Consideration of numbers also possible in subsequent CCN proceedings at the Commission.

▶️27 - Kristi Hobbs - ERCOT - RTP remaining a pathway

• RTP is intended to remain a foundational pathway for meeting future needs.
• RTP is considered a road map rather than a binding contract.
• TSPs must follow additional processes including RPG process, ERCOT independent review, and policy decisions on CCN.
• RTP provides a "no regrets" foundation to build upon.
• Opportunity exists for TSPs to validate their proposals through the RPG process in their CCN filing and rate making requests.
• Adjustments do not mark the end for these projects.

▶️27 - Kristi Hobbs - ERCOT - Data

• Review of transmission service providers' performance concerning contracted loads.
• Analysis of data center loads over time.
• Evaluation of officer letter performance, noting its shorter nature.
• Discussion on the lack of a standardized process for data applications.
• Suggestion to gather more detailed data from TSPs, including initial numbers and adjustments.
• Monitoring of officer letter loads to assess their status as current contracted loads or changes in location.
• Plan to bring back the good cause exception request with potential methodology options for the next meeting.

▶️29 - Project No. 56896 – Texas Energy Fund In-ERCOT Loan Program Reports and Filings

• The main topic is the In-ERCOT loan program reports and filings.

▶️29 - Tracie Tolle - Commission Staff - Application recommendation to move into due diligence portfolio

• Staff recommends one more application to move into the due diligence portfolio.
• The project is 23 megawatts.
• Authority will be delegated to the Executive Director to enter into a loan agreement if the due diligence process is successfully completed.
• Selection process is similar to previous rounds.
• Applicant has undergone enhanced due diligence, has a binding equity agreement, and has accepted the term sheet.
• Project would increase the due diligence portfolio to 19 applications.
• Total megawatts of portfolio would be 9,592 if the project advances.
• Confidentiality prevents disclosing individual application megawatts publicly.
• Loan amounts in megawatts will be communicated at the time of loan agreement execution.
• Proposed order exists for this recommendation.
• A motion was presented to approve the proposed order.
• Motion to approve proposed order passed unanimously.

30, 32-33

• Not Discussed

▶️34 - Project No. 58049 – Management Audit of CenterPoint Energy, LLC. Under PURA § 14.202

▶️34 - Tammy Lohr-Schweitzer - Moss Adams, Director - Presentation of CenterPoint audit

• Focus on procurement and distribution of mobile generation units.
• Audit initiated following concerns after Hurricane Beryl in July 2024.
• CenterPoint provides electric transmission and distribution services in the Houston area.
• Began leasing mobile generation units in 2021, authorized by Texas House Bill 2483.
• Entered agreements with two vendors to lease 33 mobile generation units.
• Large mobile units not deployed during Hurricane Beryl.
• Assessment of CenterPoint's procurement practices and potential conflicts of interest.
• Evaluation of planning for customer needs and operability of mobile units under various weather scenarios.

▶️34 - Maria Stroth - Moss Adams, Sr. Manager - Audit phases

• The audit was conducted between January and March 2025, covering several phases such as project initiation, fact-finding, analysis, and reporting.
• Site visit to CenterPoint's Houston campus for mobile generation facilities inspection.
• Interviews with staff to understand procurement and planning for mobile generation units and emergency planning.
• Analysis included procurement policies, leasing documents, communications, and best practice comparisons.

• CenterPoint's policies generally aligned with best practices but lacked formal documentation in vendor risk assessments and consideration of conflicts of interest.

• Ensure vendor risk assessments are completed, improve documentation, and implement a detailed framework for managing conflicts of interest.

• CenterPoint aligned with best practices but lacked formal corrective action plans from after-action reviews.

• Establish formal corrective action programs, enhance maintenance requirements in leasing agreements, and develop a comprehensive communication strategy.
• Communication issues during Hurricane Beryl highlighted, including misleading initial communications and outage tracker failure

• Improve communication strategies and maintain outage tracker functionality.
• Acknowledgment of CenterPoint's improvements in communication by hiring a communication leader and enhancing the outage tracker.

▶️34 - Commissioner Jackson's thoughts

• CenterPoint has promptly responded to the Moss Adams report.
• Importance of having requirements and documentation for processes mentioned.
• Need for validation of implemented recommendations highlighted.
• Some audit findings have been closed, while others are still in progress.
• Commissioner Jackson emphasizes good audit practices, including verifying evidence of implemented processes.
• Proposal for CenterPoint to provide status updates on implementing recommendations.
• Importance of tracking implementation progress to completion reiterated.
• CenterPoint to collaborate with staff to determine suitable update iterations and present progress in open meetings.

35-42

• Not Discussed

▶️42 - Chairman Gleeson adjourns meeting