03/07/2024 09:30 AM
Advertisement
Current Time 1:38:27
Duration 1:44:51
Loaded: 94.03%
Stream Type LIVE
Remaining Time 6:24
1x
  • Chapters
  • descriptions off, selected
  • captions off, selected
  • default, selected
x
ZOOM HELP
Drag zoomed area using your mouse.
100%
Search
  • Item 0 - Chairman Gleeson calls meeting to order
    00:00:07
    This meeting of the Public Utility Commission of Texas
  • 00:00:10
    will come to order. To consider matters that have been
  • 00:00:12
    duly posted with Secretary of State for today, March
  • Item 0 - Chairman & Commissioners offer condolences and support to the Panhandle community
    00:00:15
    7, 2024. Before we get started, I just want to um
  • 00:00:20
    acknowledge you know all the, the pain that's going
  • 00:00:23
    on in the Panhandle right now. As I'm sure all of y'all
  • 00:00:25
    are aware over a million acres of land has been burned
  • 00:00:29
    up in the Panhandle. Two lives have been lost. Somewhere
  • 00:00:33
    between 4 and 500 structures have been destroyed.
  • 00:00:36
    And um you know, thousands of cattle and other livestock
  • 00:00:40
    have been impacted and killed. And so just let them
  • 00:00:43
    know that our thoughts and prayers are with them. This
  • 00:00:45
    is going to take an entire effort. I hope they find
  • 00:00:47
    comfort and strength in their community, in their family
  • 00:00:50
    and in their friends. And um Connie, I'd ask that
  • 00:00:54
    you and the Office of Public Engagement, CPD. Kind of
  • 00:00:58
    keep us apprised of any, any input you get from customers.
  • 00:01:02
    You know, I think we need to be ready to work with
  • 00:01:04
    customers to help them recover from this. Absolutely.
  • 00:01:08
    We'll do that and we'll continue our, our ongoing communication
  • 00:01:12
    with utilities in the area about the effects of, of
  • 00:01:16
    the fires on their system. And also thank you too, I
  • 00:01:19
    know the the first responder effort has been immense
  • 00:01:22
    and so thank you to them as well. Commissioners,
  • 00:01:25
    if y'all have any other comments? Same. I, I just my
  • 00:01:30
    thoughts and prayers are with the families that have
  • 00:01:32
    lost loved ones in the wildfire. It is uh very devastating
  • 00:01:36
    um that the wildfire is as Chairman has noted is the
  • 00:01:39
    largest one in Texas history. And um also with all
  • 00:01:42
    the residents that are impacted by this wildfire. Just
  • 00:01:46
    to know that we're there. We're here for them and anything
  • 00:01:49
    and everything that we can do. We certainly
  • 00:01:52
    stand ready to do that. I appreciate your comments
  • 00:01:55
    on behalf of us all.
  • 00:01:57
    All right. Good morning, Shelah. Good morning, Connie.
  • 00:02:00
    Shelah, will you take us through the Consent Agenda?
  • Item 0.1 - Shelah Cisneros with Commission Counsel lays out Chairman's recusals and Consent Agenda
    00:02:03
    Good morning Commissioners. Um, first an update on
  • 00:02:06
    recusals. The Chairman filed a memo in Project No.
  • 00:02:10
    52761. Stating that he is recused from the following
  • 00:02:14
    items: 1, 4, 5, 9, 11, 12, 14 and 15 and 17-20. And
  • 00:02:22
    Chairman Gleeson, I expect there'll be interest in
  • 00:02:24
    your recusal memos. So I just want to note that Project
  • 00:02:27
    No. 52761 is Item No. 38 on today's agenda. It
  • 00:02:32
    is going to be a standing item going forward. Because
  • 00:02:35
    I believe you'll be filing your memos in that Project
  • 00:02:38
    to identify any items you'll be recused from. So then
  • 00:02:41
    that takes us to the Consent Agenda. By individual ballot,
  • 00:02:45
    the following items were placed on your Consent Agenda:
  • 00:02:48
    Items 3, 4, 6-8, 10, 12-14, 16, 18 and 19.
  • 00:02:57
    And I'll note that by individual ballot, Item No.
  • 00:02:59
    1 was identified as an item that will not be taken
  • Item 0.1 - Chairman Gleeson asks for motion to approve items on Consent Agenda
    00:03:01
    up. Thank you, Shelah. I'd entertain a motion to approve
  • 00:03:05
    the Consent Agenda. So moved. Second. I have a motion and a second. All
  • 00:03:09
    those in favor, say aye. Aye. Opposed? Motion prevails. Okay. Item
  • 00:03:13
    1 will not be taken up. So we'll move Shelah to Item
  • 00:03:16
    No. 2.
  • 00:03:18
    Item No. 2. I'm going to jump in and just make
  • 00:03:21
    a note here. We do have several people that have
  • 00:03:24
    signed it for Public Comment to speak about Docket
  • 00:03:28
    No. 50788, which is Item No. 1. It is up to
  • 00:03:32
    the presiding officer because there these are, this is a
  • 00:03:34
    contested case. And typically that's done by request
  • 00:03:37
    for oral argument. It is up to the presiding officer whether
  • 00:03:39
    or not um to speak. But since we've done that. I thought
  • 00:03:43
    it would be helpful to let people in the room know
  • 00:03:44
    whether they'll be allowed to speak during the General
  • 00:03:46
    Comment section. Yeah. My preference would be if we
  • 00:03:49
    have people that showed up to speak on that Item, even
  • 00:03:51
    though we're not taking it up. We shouldn't allow them
  • 00:03:53
    to speak, if that's okay with everybody? Yes. Absolutely. Okay. They'll
  • 00:03:56
    be taken up during the General Comments, Item No.
  • 00:03:59
    21. Perfect.
  • Item 2 - Complaint of Muneer Ahmed against Fredd Apartments
    00:04:03
    So Item No. 2. Item No. 2 is Docket No. 51198.
  • 00:04:07
    This is the complaint of Muneer Ahmed against Fredd
  • 00:04:11
    Apartments. Before you as a proposal for decision. No
  • 00:04:15
    exceptions or corrections were filed and Chairman Gleeson
  • 00:04:18
    filed a memo in this docket. So Commissioners, my memo
  • 00:04:22
    just modified a few conclusions of law. I think this
  • 00:04:24
    is pretty straightforward. So happy to hear your thoughts
  • 00:04:28
    if you have any? I'm in agreement with your proposed
  • 00:04:31
    changes in your memo. And um, would be in favor of moving
  • Item 2 - Motion to approve PFD as modified by Chairman Gleeson's memo
    00:04:37
    forward with the approval. I am as well. Okay, then I
  • 00:04:42
    would entertain a motion to adopt the PFD as modified
  • 00:04:45
    by my memo.
  • 00:04:49
    Second. So moved. I have a motion and a second. Those in favor, say aye.
  • 00:04:52
    Aye. Opposed? The motion prevails. All right. Well, that
  • 00:04:57
    concludes my part of the contested case portion of
  • 00:04:59
    this. So again, I'll thank Lori for uh for handling
  • 00:05:03
    the, uh the rest of this and doing so much work. Well
  • 00:05:06
    thank you. I won't you know bang this,
  • 00:05:13
    the gavel down. I think it's more ceremonial. More ceremonial, yep. Just to have it next to you, definitely so. I don't have anywhere to slam it down on. But anyway,
  • 00:05:18
    okay, so Item No. 3 and 4 were consented. That
  • 00:05:20
    brings us to Item No. 5. Shelah, please lay that
  • Item 5 - Application of CSWR-Texas Utility Operating Company, LLC for authority to change rates
    00:05:22
    item out for us. Yes, ma'am. Item No. 5 is Docket
  • 00:05:25
    No. 54565. This is the application of CSWR-Texas
  • 00:05:31
    Utility Operating Company, LLC for authority to change
  • 00:05:34
    rates. Before you is a proposal for decision from SOAH.
  • 00:05:38
    CSWR, the Office of Public Utility Council and Commission
  • 00:05:42
    Staff all filed exceptions to the PFD. The SOAH ALJ's
  • 00:05:46
    filed a letter recommending the adoption of certain
  • 00:05:48
    changes to the PFD. To add a finding of fact in ordering
  • 00:05:51
    paragraph. Commission Counsel, I filed a memo recommending
  • 00:05:55
    changes to the final order. And Commissioner Cobos
  • 00:05:57
    filed a memo in this docket. Thank you, Shelah. So
  • 00:06:02
    I filed a memorandum that lays out the areas where
  • 00:06:06
    I believe the Commission should reject or modify the
  • 00:06:09
    PFD. I'm in agreement with the majority of the PFD.
  • 00:06:12
    And so um, I've laid out the issues in the memo where
  • 00:06:16
    I think there are some changes that need to be made.
  • 00:06:18
    Generally speaking, there's a lot of information in
  • 00:06:21
    my memo. I think um with respect to the Texas Water
  • 00:06:24
    Code, Section 13.145 and, and the repeal of that statute
  • 00:06:29
    um by House Bill 2373. I, I don't believe that the
  • 00:06:34
    section applies to this case. I would modify the basis
  • 00:06:40
    for that finding. However, from what the PFD has in
  • 00:06:44
    there. I think that the ALJs made a general conclusion.
  • 00:06:47
    That no prior action was taken in a contested case
  • 00:06:50
    until the Commission issues a final non appealable
  • 00:06:52
    order. Instead, I would recommend the Commission find
  • 00:06:55
    that in this proceeding. The case, the Commission has
  • 00:06:59
    not taken prior action until the general savings clause,
  • 00:07:02
    under the general savings clause. At the time of the
  • 00:07:04
    repeal of TWC 13.145 became effective on June 2, 2023.
  • 00:07:12
    With respect to the annualized data in this proceeding.
  • 00:07:16
    I think it's appropriate to allow CSWR to use that
  • 00:07:19
    data in this case. But would clarify that the application
  • 00:07:22
    or use of that data should be done on a case by
  • 00:07:25
    case basis. And again, CSWR uh provided a basis for
  • 00:07:30
    us to be able to use that data in this case. Acquisition
  • 00:07:34
    adjustments for systems acquired through the fair market
  • 00:07:37
    value process. I believe should not be included
  • 00:07:40
    in rate base. The Commission's already had a definitive
  • 00:07:44
    position on this issue and the supplemental preliminary
  • 00:07:46
    order issued on May 25, 2023. That acquisition adjustments
  • 00:07:50
    for systems approved under the FMB process are expressly
  • 00:07:53
    disallowed under the Commission's rules. An upward
  • 00:07:57
    0.5% adjustment for business risk should not be applied
  • 00:08:01
    to the rate on the return on equity in this case.
  • 00:08:04
    The issues that CSWR raised with respect to business
  • 00:08:09
    risk will be mitigated and addressed with, after we
  • 00:08:12
    approve the rates in this case. They'll be able to
  • 00:08:14
    recover their investment based on our ruling in this
  • 00:08:17
    case. So I would recommend that the Commission reject
  • 00:08:20
    the PFD's recommendation to apply the 0.5% upward
  • 00:08:24
    adjustment to CSWR's ROE. The cost of debt should be
  • 00:08:29
    in my opinion, um 5.03% and that is what Commission
  • 00:08:34
    Staff recommended. I believe the range in the PFD uh
  • 00:08:37
    is not supported. Um the uh, the lower end and the higher
  • 00:08:40
    end. And so if we were to choose um a midpoint based
  • 00:08:45
    on that range. I believe that the decision would be
  • 00:08:48
    arbitrary and capricious. I would recommend deleting
  • 00:08:53
    finding of fact number 79 regarding CSWR-Texas affiliates
  • 00:08:57
    because the finding does not speak to the affiliates
  • 00:09:00
    regulatory business environment. Which is necessary
  • 00:09:02
    for the finding to be meaningful. I would also recommend
  • 00:09:06
    deleting in finding a fact 81 and replacing it with
  • 00:09:08
    a finding. That although CSWR-Texas might not qualify
  • 00:09:12
    for a BAA rating. The 2022 average bond yield data
  • 00:09:17
    for utilities with a BAA bond rating is the most reasonable
  • 00:09:20
    evidence on cost of debt in the evidentiary record.
  • 00:09:24
    With respect to pass through provisions for groundwater
  • 00:09:28
    production fees. I believe that separate pass through
  • 00:09:30
    provisions, um that separate pass through provisions
  • 00:09:34
    to be charged to each applicable system for groundwater
  • 00:09:37
    production fees. Assessed by the opportunity groundwater
  • 00:09:39
    conservation should be approved. The separate passthroughs
  • 00:09:45
    for each distinct system that would cover the um subdivisions
  • 00:09:49
    laid out in my memo. And then um with respect to the
  • 00:09:54
    rate case expenses. I would recommend that the Commission
  • 00:09:57
    authorize CSWR-Texas to establish a surcharge to recover
  • 00:10:00
    $419,459 in rate case expenses. As supported by the
  • 00:10:05
    affidavit that was submitted into the record. And any
  • 00:10:09
    um expenses incurred after um outside of that amount.
  • 00:10:15
    The trailing expenses would be uh booked to regulatory
  • 00:10:18
    asset. The rest of the memo just lays out um changes
  • 00:10:22
    to the findings of fact in conclusions of law and ordering
  • 00:10:26
    paragraphs. That I believe should be deleted or modified
  • 00:10:32
    in the PFD in a final order.
  • 00:10:37
    So that's a very high level summary. And there's a
  • 00:10:39
    lot of information in here. And at this time, I'd open
  • 00:10:42
    you know, the floor to any feedback that you all may
  • 00:10:44
    have on any of these issues laid out in my memo. I'm
  • 00:10:49
    in agreement with your uh assessment. There are a couple
  • 00:10:51
    of other points that you made in the memo. That I think
  • 00:10:54
    would be kind of noteworthy to bring out at this time.
  • 00:10:56
    And one had to do with um what the uh the operation
  • 00:11:01
    the annually test your data for the six months of operational
  • 00:11:04
    data. What they actually demonstrated that uh it
  • 00:11:07
    was accurate and with when within 1% of their actual
  • 00:11:10
    cost. So um they actually provided some data and information
  • 00:11:15
    to substantiate their request. Which was to use, you
  • 00:11:19
    know, annualized test year data that was, you know
  • 00:11:21
    less than the typical 12 months that is required. And
  • 00:11:26
    then also just wanted to point out, which I thought
  • 00:11:31
    was a very good decision. To actually use the actual
  • 00:11:35
    line laws for each system in determining what was reasonable.
  • 00:11:39
    Rather than to approve a line loss that was
  • 00:11:44
    the average of all of the systems. I think this is
  • 00:11:47
    much more appropriate and provides the separate pass
  • 00:11:51
    through provisions for each of the three distinct systems.
  • 00:11:53
    So just those were good catches and good changes. And
  • 00:11:59
    agree with what you're proposing. Commissioner Glotfelty? I, I appreciate
  • 00:12:05
    your memo. It's, it's obviously very thorough on this
  • 00:12:08
    case. I agree with almost everything in your memo, but
  • 00:12:12
    would like to just discuss a few things. One of them
  • 00:12:16
    is the business risk adjustment and the other one is
  • 00:12:20
    cost of debt. I think the my view is that business risk
  • 00:12:25
    it does go down as these rates get approved and these
  • 00:12:30
    acquisitions happen. But that does nothing for the
  • 00:12:33
    encouragement of utilities to take the risk to begin
  • 00:12:36
    this process. To take over smaller poorly capitalized
  • 00:12:40
    utilities that need a lot of capital investment. And
  • 00:12:42
    I think that the business risk adjustment should be
  • 00:12:46
    um, uh within the range. It may not need to be 1.5%.
  • 00:12:52
    But um I do think that there should be some percentage
  • 00:12:56
    or partial percentage in there for business risk. Um
  • 00:13:00
    consolidation in this industry is really important.
  • 00:13:03
    I think for the consumers long term. And um this would
  • 00:13:06
    help send the signal at a low cost that uh we, we
  • 00:13:10
    think consolidation will help consumers over the long
  • 00:13:12
    run. Cost of debt.
  • 00:13:17
    The cost of debt is changing as we know. And to me
  • 00:13:21
    I think the midrange cost of debt of 6.06 is the right
  • 00:13:25
    number. And believe that they laid out their reasons
  • 00:13:30
    for that. And believe that that's the number we should
  • 00:13:34
    go with.
  • 00:13:40
    Okay. Commissioner Jackson, do you have any feedback on that? Well
  • 00:13:44
    um I do believe that they tied the cost of debt to
  • 00:13:47
    the, to the bond to the BAA bond rating. And um
  • 00:13:52
    and that in my mind, kind of gives a data point to
  • 00:13:55
    which you can tie the decision to. Um they would I
  • 00:13:59
    believe have opportunity to come back later and recover
  • 00:14:02
    more if that's the case. Um in terms of um you know
  • 00:14:07
    the, the other issue that you um that you brought up.
  • 00:14:12
    Which had to do with the. The business risk adjustment. The business
  • 00:14:16
    risk adjustment. Um I did ask the Staff to kind of
  • 00:14:20
    pull the data on what the rate increases would be.
  • 00:14:24
    And also um the entity did um calculate the cost of
  • 00:14:28
    service for all of the various um entities that are
  • 00:14:32
    going to be consolidated. And so in, in my mind that
  • 00:14:37
    that really kind of again covers what they need moving
  • 00:14:42
    forward and they presented the data associated with
  • 00:14:44
    doing that. So I would lean to um
  • 00:14:50
    not award the additional business risk um in, in this
  • 00:14:56
    particular case. And I, and I concur with um Commissioner
  • 00:15:00
    Jackson. Because I, I believe the utility has um
  • 00:15:04
    the ability to avail themselves to other rate recovery
  • 00:15:07
    mechanisms like the system improvement charge. And
  • 00:15:09
    now they can apply their uh a tariff rate to their
  • 00:15:12
    acquired system. So there's other ways for them to
  • 00:15:15
    um to avail themselves to, to more revenue. So I, I
  • 00:15:19
    am in agreement that I would not provide the upward
  • 00:15:21
    adjustment on the ROE. With respect to cost of debt.
  • 00:15:25
    So Commissioner Jackson, my hearing that because of
  • 00:15:29
    the um incurring to the BAA bond rating. That you
  • 00:15:34
    would still continue to support the 5.03%? Yes.
  • 00:15:39
    Okay. Commissioner Glotfelty, any feedback? Y'all can out vote
  • 00:15:44
    me if you want. I uh I, I mean. I think my
  • 00:15:48
    reasons are sound. And my reasons are um I'm gonna
  • 00:15:51
    stick with them. So if we, if y'all want to go with
  • 00:15:54
    your the changes proposed in your um memo. I'm fine
  • 00:15:58
    with that but uh I'm, I'm not. I, I have a different
  • 00:16:02
    opinion. Okay. All right, I respect that. Um, okay. So
  • 00:16:07
    I, I think that's what we'll do um is just move forward.
  • 00:16:10
    And, and recognize your dissent I guess on the two
  • 00:16:12
    items? And so um. Commissioner, can I offer a point? Before you speak, let me just jump
  • 00:16:18
    in. Just want to note that no parties requested
  • 00:16:21
    oral argument in this docket. This Commission in
  • 00:16:25
    the recent past has not encouraged folks to approach
  • 00:16:28
    unless they're invited. And it is up to the presiding
  • 00:16:31
    officer to decide whether to let people speak.
  • 00:16:35
    There's two. One minute.
  • 00:16:38
    Two clarifications just on issues addressed in your
  • 00:16:41
    memo. We do not have any acquisition adjustments above
  • 00:16:44
    and beyond what's allowed by the fair market value
  • 00:16:46
    rule. We refer to acquisitions and adjustments from
  • 00:16:49
    an accounting standpoint. So that's just a point of
  • 00:16:51
    clarification. We just complied with the statute. And
  • 00:16:55
    then with regards to the rate case expense issue you
  • 00:16:57
    raised. We were asked to file additional briefing in
  • 00:16:59
    our reply brief that updates those numbers. So that's
  • 00:17:02
    the number the ALJ is pulling from. That's
  • 00:17:05
    all. Okay, the $459 something like that. Okay. The updated number
  • 00:17:10
    I guess $419, $449 in the rate case. The updated the number in our reply
  • 00:17:16
    briefing, I think it's $459. The PFD got it correctly.
  • 00:17:21
    Just to clarify, Commissioner Cobos. Subject to check
  • 00:17:27
    that data that is being referenced may not be in the
  • 00:17:30
    evidentiary record. Because it was, it was filed after
  • 00:17:33
    the PFD was issued. Okay, all right. Well our ruling
  • 00:17:37
    stands in. Okay, so let's move forward. Thank you.
  • Item 5 - Motion to adopt PFD in part & reject in part, consistent with Commission Cobos & Commission Counsel's memos
    00:17:42
    Um ok, so with that. I would entertain a motion
  • 00:17:47
    to adopt the PFD in part and reject the PFD in part.
  • 00:17:50
    Consistent with the proposed changes in my memo and
  • 00:17:53
    in Commission Counsel's memo. And uh the Commission's
  • 00:17:59
    discussion and authorize OPDM to direct Commission
  • 00:18:01
    Staff to conduct a number run, consistent with my memo
  • 00:18:04
    and Commission Counsel's memo. And um I guess I would
  • 00:18:08
    entertain that motion and then, then we would reflect
  • 00:18:11
    Commissioner Glotfelty's dissent.
  • 00:18:14
    Yeah. I mean, I feel like my dissent is verbally here
  • 00:18:19
    and that's, that's acceptable. I don't necessarily
  • 00:18:21
    need to dissent on the order. But I just wanted to
  • 00:18:26
    to voice my concern with these two points. I will vote
  • 00:18:30
    for the, the
  • 00:18:34
    yeah, the final passage of this. I just needed to voice
  • 00:18:38
    my concerns on those two issues. Okay. So I have a motion.
  • 00:18:42
    Do I have a second? I second. All right. We've got
  • 00:18:46
    a motion and a second. All in favor, say aye. Aye. All right.
  • 00:18:51
    this motion prevails. Thank you. All right. Moving
  • 00:18:54
    on to uh let's see here. Item No. 6, 7 and 8
  • 00:18:58
    were consented.
  • 00:19:01
    Brings us to Item No. 9. Shelah, would you please
  • Item 9 - Petition to determine failure to act in TWC provisions by Windermere Oaks WSC
    00:19:04
    lay out that? Yes, ma'am. Item No. 9 is Docket
  • 00:19:07
    No. 55454. This is the petition to determine failure
  • 00:19:12
    to act in accordance with Texas Water Code provisions
  • 00:19:15
    67.007 and 13.002, Subsections 11 and 24 by Windermere
  • 00:19:22
    Oaks Water Supply Corporation. Before you is a revised
  • 00:19:26
    proposed order. I filed a memo recommending changes
  • 00:19:29
    to the order and Commissioner Jackson filed a memo
  • 00:19:31
    in this docket. All right. Commissioner Jackson will
  • 00:19:33
    you please lay out your memo? Yes, I did file a memo.
  • 00:19:36
    The purpose of my memo is to make changes to the
  • 00:19:38
    revised proposed order. So as to broadly address procedural
  • 00:19:42
    requirements for minor tariff change and rate change
  • 00:19:45
    applications, while Windemere is under the Commission's
  • 00:19:48
    jurisdiction. I'm also proposing changes to provide
  • 00:19:51
    more flexibility as to when Commission Staff may request
  • 00:19:54
    to relinquish jurisdiction over Windermere. All right,
  • 00:19:58
    great. I'm in agreement with your changes. Commissioner
  • Item 9 - Motion to approve revised proposed order consistent with Commissioner Jackson's memo
    00:20:00
    Glotfelty? I'm in agreement. Okay. Do I have a motion to approve
  • 00:20:04
    the revised proposed order consistent with Commissioner
  • 00:20:07
    Jackson's memo?
  • 00:20:09
    So moved. I second. All right, I got a motion and a second. All in
  • 00:20:12
    favor, say aye. Aye. Motion prevails. Okay. Number 10 is consented.
  • 00:20:18
    That takes us to Item No. 11. I believe we have
  • 00:20:23
    granted oral argument on this item. That is correct.
  • 00:20:27
    Would you like me to lay, the lay the item out
  • 00:20:29
    or do that after we, after we finished the oral argument?
  • 00:20:32
    Please lay out the item and then we will address the
  • Item 11 - Application of the City of College Station to change rates for wholesale transmission service
    00:20:35
    oral argument. Sure. Item 11 is Docket No. 52728.
  • 00:20:40
    This is the application of the City of College Station
  • 00:20:42
    to change rates for wholesale transmission service.
  • 00:20:45
    At the February 15th meeting, the Commission adopted
  • 00:20:48
    in part and rejected in part the proposal for decision
  • 00:20:51
    filed by the SOAH ALJs. The Commission delegated responsibility
  • 00:20:55
    to OPDM to obtain a number run consistent with the
  • 00:20:58
    Commission's decision. And uh OPDM, we filed the number
  • 00:21:03
    run on February, the number run memo on February 16th.
  • 00:21:07
    Per our usual practice, the memo stated that Commission
  • 00:21:11
    Staff should file any clarifying questions that they
  • 00:21:13
    may have, and Commission Staff took us up on that offer.
  • 00:21:17
    So before you as a memo from Commission Staff, with
  • 00:21:19
    clarifying questions regarding the number run to be
  • 00:21:21
    performed for the final order. Commissioner Cobos
  • 00:21:25
    filed a memo. And as you noted, the Commission um
  • 00:21:29
    a request for oral argument was filed. And by individual
  • 00:21:32
    ballot, the Commission voted to grant oral argument.
  • 00:21:34
    Right now we have two parties that have signed
  • 00:21:37
    up for oral argument. And if anyone else wants to
  • 00:21:43
    participate in oral argument, this would be the time
  • 00:21:44
    to say something. Otherwise we can, I can start calling
  • 00:21:47
    up the parties. Um and Commissioner Cobos uh, what
  • 00:21:51
    is the determined amount of time to speak for this?
  • 00:21:54
    Three minutes per party. Three minutes per party All
  • 00:21:56
    right. The first party that has signed up to speak
  • 00:21:59
    is um City of College Station and Thomas Brocato.
  • Item 11 - Thomas Brocato provides oral argument on behalf of the City of College Station
    00:22:15
    Good morning Commissioners. Thomas Brocato appearing on
  • 00:22:17
    behalf of the City of College Station. Thank you for
  • 00:22:20
    the opportunity to address you today. I'm here respectfully
  • 00:22:24
    to request that you reconsider your February the 15th
  • 00:22:26
    order, because the city has not done anything improper
  • 00:22:30
    in this matter. Before you today is a staff memo seeking
  • 00:22:33
    guidance with respect to the number running instructions.
  • 00:22:36
    Internally, we've run the scenario reflected in Commissioner
  • 00:22:40
    Cobos memo. If adopted, it would result in the city
  • 00:22:43
    refunding approximately $40 million. Now to put that
  • 00:22:46
    in perspective, College Station's total annual revenue
  • 00:22:49
    requirement is $6 million. Moreover if approved, this
  • 00:22:53
    would be the largest t cost refund in the Commission's
  • 00:22:56
    history and one of only two t cost refunds that I'm
  • 00:22:59
    aware of. The other being a settled case. Over nearly
  • 00:23:02
    three decades, the city took transparent good faith
  • 00:23:05
    steps to ensure that it was compliant with the Commission's
  • 00:23:07
    rules. Despite those efforts, the utility is being
  • 00:23:10
    penalized retroactively for actions it took in the
  • 00:23:13
    direction of the Commission Staff and later approved
  • 00:23:15
    by the Commission in three separate orders. At the
  • 00:23:19
    February 15th Open Meeting, the Commission concluded
  • 00:23:21
    that the city violated the t cost rule by including
  • 00:23:24
    a GFT in its three interim cases. Because the inclusion
  • 00:23:28
    of a GFT was not first approved in a full t cost
  • 00:23:31
    case. However, there is nothing in 25192 that establishes
  • 00:23:35
    such a requirement or even addresses the situation.
  • 00:23:39
    True, College Station did not include a GFT in its initial
  • 00:23:43
    t cost case. Even though all parties agreed that
  • 00:23:46
    it could have done so. Because of this, the ERCOT market
  • 00:23:50
    has benefited from 1997 to 2007. By paying rates that
  • 00:23:55
    included no GFT for the city. The staff's witness confirmed
  • 00:24:00
    during the hearing that the Commission has routinely
  • 00:24:02
    allowed MOUs to update their GFTS and interim filings.
  • 00:24:07
    Further, there is no logical reason for making inclusion
  • 00:24:10
    of a GFT in a full t cost case a condition for including
  • 00:24:13
    one in an interim. What is perhaps most troubling to
  • 00:24:17
    the city however. Is that last September, the Commission
  • 00:24:20
    voted to send this case back for the ALJs to issue
  • 00:24:23
    a PFD. Uninhibited by the Commission's rescinded remand
  • 00:24:26
    order. Notably neither the staff witness, Ms. Starr
  • 00:24:30
    who originally raised this issue nor the ALJs support
  • 00:24:33
    a $40 million refund. By comparison, the second PFD
  • 00:24:37
    recommends a $900,000 refund based upon several very
  • 00:24:41
    significant mitigating factors. For example, College
  • 00:24:44
    Station only included the GFT in its interim filing
  • 00:24:47
    at the repeated direction of the Staff. And as I noted
  • 00:24:49
    the Commission approved three separate interim orders.
  • 00:24:53
    To be transparent, College Station provided testimony
  • 00:24:55
    in each case detailing the inclusion of the request.
  • 00:24:59
    Despite this, there was no mention of the 70 page PFD
  • 00:25:02
    or the mitigating factors on February the 15th. And
  • 00:25:05
    for these reasons, the city request that the Commission
  • 00:25:07
    reconsider its February decision and reverse this injustice.
  • 00:25:12
    Lastly, I have four brief comments related to Commissioner
  • 00:25:15
    Cobos' memo that will inform your discussion on carrying
  • 00:25:18
    charges, if you still believe a refund is appropriate.
  • 00:25:22
    Thank you.
  • 00:25:27
    Happy to answer any questions. All right. The next
  • 00:25:31
    party that is signed for all oral arguments is uh
  • 00:25:34
    TIEC and Michael McMillan.
  • Item 11 - Michael McMillan provides oral argument on behalf of TIEC
    00:25:42
    Good morning, Commissioners. Michael McMillan for TIEC.
  • 00:25:45
    As you know, TIEC's members and other customers
  • 00:25:49
    in Texas have been overpaying College Station for transmission
  • 00:25:53
    service for uh, for many years now since at least
  • 00:25:56
    2007. And that overpayment continues today until your
  • 00:25:59
    order goes final. That overpayment has gone on
  • 00:26:02
    so long because College Station hasn't been in for
  • 00:26:06
    a full rate case in about 25 years. And TIEC appreciates
  • 00:26:10
    the, the Commission recognizing that the need to refund
  • 00:26:15
    those over collections to customers. Because customers
  • 00:26:18
    haven't done anything wrong here either. TIEC believes
  • 00:26:22
    the approach in Commissioner Cobos' memo. And in the
  • 00:26:25
    the discussion that you had at the last uh open meeting
  • 00:26:27
    when this, that this came up in. And uh, reasonably balances
  • 00:26:31
    the interests of College Station and ratepayers in
  • 00:26:33
    light of the Commission's rules. And uh, the facts
  • 00:26:36
    in this record.
  • 00:26:40
    Thank you. All right. That concludes oral argument in this docket.
  • 00:26:43
    Okay, thank you. So at this point, I'll open up the
  • 00:26:48
    floor back again. To um obtain any additional comments
  • 00:26:52
    that anybody has regarding the oral argument and, and
  • 00:26:57
    this proceeding. And then after that, I'll lay out
  • 00:27:00
    my memo, if needed.
  • 00:27:04
    Okay. So um, all right. So um based on, on
  • 00:27:10
    that. I think the Commission reaffirms its position
  • 00:27:13
    taken at the February 15th Open Meeting and I will
  • Item 11 - Commissioner Cobos lays out her memo
    00:27:16
    lay out the memo. The memo um, is intended to provide
  • 00:27:19
    the clarification that uh Commission Staff, Darryl
  • 00:27:23
    um requested, um in the February 26 memo. To be able
  • 00:27:27
    to conduct the number run. Darryl, I just wanna make
  • 00:27:30
    sure that um you have everything you need to conduct
  • 00:27:33
    the number run, based on the memo recommendations that
  • 00:27:36
    are provided? Good morning Commissioners. Commissioner
  • 00:27:40
    Cobos, thank you very much for the memo. It was very
  • 00:27:42
    thorough, very informative. With the Commission's
  • 00:27:45
    indulgence, I do have one follow-up, clarifying question
  • 00:27:48
    if that's ok? And if you, if the Commissioners have
  • 00:27:52
    their your memo, your memo, Commissioner Cobos before
  • 00:27:56
    them. I can direct you to a specific bullet point.
  • 00:28:01
    It is on Page 2 of your memo under the section
  • 00:28:05
    entitled total over collected amount.
  • 00:28:09
    And more specifically is the last bullet point in that
  • 00:28:12
    section. And just for the sake of completeness, I will
  • 00:28:16
    go ahead and read that bullet point. Again, Page 2
  • 00:28:19
    total over collected amount. The last bullet point
  • 00:28:22
    in that section. That bullet point reads the total
  • 00:28:25
    over collected amount through February 15, 2024 should
  • 00:28:28
    then be reduced by the approximately $3 million in
  • 00:28:32
    understated depreciation expense. The follow-up question
  • 00:28:36
    that or the clarifying question that we have on that
  • 00:28:39
    clarification. Is that Staff would just note that the
  • 00:28:43
    $3 million balance of that under collected depreciation
  • 00:28:48
    expense is also as of June of 2022. And so we on
  • 00:28:53
    Staff believe that it would be appropriate to incorporate
  • 00:28:57
    into our number running calculations. The effects of
  • 00:29:00
    that under recovery at that point in time. That is
  • 00:29:03
    June 20, June of 2022. And that would appropriately
  • 00:29:07
    reflect the sort of the net effects of the overcovered
  • 00:29:09
    amount, as well as the under recovered amount. And that
  • 00:29:12
    would be the remaining clarification that we would
  • 00:29:14
    we would ask. Um I, I think that makes sense. If we're
  • 00:29:18
    going to go ahead and, and revise the updated. The total
  • 00:29:23
    over collected amount to all the way up until I guess
  • 00:29:25
    the 15th. Then we should do that for the depreciation
  • 00:29:29
    expense as well. Thank you. That's the only thing we
  • 00:29:31
    needed.
  • 00:29:33
    Commissioners, may I add something to this?
  • 00:29:37
    I think it will help. I think oral argument is closed now.
  • 00:29:40
    Okay.
  • 00:29:43
    All right.
  • Item 11 - Motion to adopt clarification in Commissioner Cobos' memo concerning Commission's final decision
    00:29:46
    Okay. At this point um I would entertain a motion to
  • 00:29:51
    adopt the clarification, uh clarification in my
  • 00:29:55
    memo into the Commission's final decision in this docket.
  • 00:29:59
    And um request that Commission Staff move forward with
  • 00:30:03
    their number run based on the clarifications provided
  • 00:30:05
    in my memo.
  • 00:30:07
    And what Mr. Tietjen just
  • 00:30:11
    requested? And the additional feedback we provided to uh Darryl
  • 00:30:15
    Tietjen, Commission Staff.
  • 00:30:18
    So moved. I second. All right. I got a motion and a second. All in favor,
  • 00:30:20
    say aye. Aye. All right. Motion prevails. Okay. 12, 13
  • 00:30:27
    and 14 were consented. That brings us to Item No.
  • Item 15 - Application of TNMP to adjust its system average interruption duration & frequency indexes
    00:30:30
    15. Shelah, will you please lay out that item? Item
  • 00:30:33
    15 is Docket No. 55437. The application of Texas
  • 00:30:38
    New Mexico Power Company to adjust its system average
  • 00:30:41
    interruption duration index and system average interruption
  • 00:30:45
    frequency index. Before you is the proposal for decision.
  • 00:30:49
    Exceptions were followed by cities served by Texas
  • 00:30:52
    New Mexico Power and by TNMP.
  • 00:30:56
    Okay, thank you so much. I, I was good with the PFD.
  • 00:30:59
    But at this time I, I'd like to get any feedback that
  • 00:31:02
    um, either of the Commissioners have on this item.
  • 00:31:05
    Yeah, I appreciate that. I'm, I feel the PFD should
  • 00:31:11
    be approved or needs to be approved. For lack of a,
  • 00:31:15
    a standard by which we should judge these going, you
  • 00:31:19
    know, historically and going forward. Sadie and safety
  • 00:31:23
    are very important metrics. And I think this sets some
  • 00:31:28
    precedent that they are going to be meaningless, by
  • 00:31:31
    setting them too high. And that
  • 00:31:37
    I take issue with Texas New Mexico Power saying that
  • 00:31:40
    they've installed new technology on their system to
  • 00:31:44
    identify outages earlier. Yet this has raised, you
  • 00:31:49
    know, more problems. It actually has benefited the
  • 00:31:52
    consumer. To me what this, this docket does is it
  • 00:31:59
    gives a free pass. It lightens reliability efforts
  • 00:32:03
    on behalf of utilities. I don't think this order is
  • 00:32:07
    the place to resolve it. Because sadie and safety ought
  • 00:32:10
    to be considered for all utilities and how we apply
  • 00:32:14
    that across all utilities in the state. To me um
  • 00:32:18
    the appropriate mechanism would be for staff to open
  • 00:32:20
    up a docket. And have a, have a, uh a workshop
  • 00:32:23
    on that. And try to understand the effects of loosening
  • 00:32:28
    sadie and safety. Um and the effects of technology
  • 00:32:33
    on sadie and safety. And the effects of on consumers
  • 00:32:37
    um and costs and rates. On how uh these numbers um
  • 00:32:43
    and when these numbers should be updated. Not waiting
  • 00:32:47
    25 years. So sadie and safety is, you know, an important
  • 00:32:51
    metric. We need to keep it important. I think unfortunately
  • 00:32:55
    this, this order makes it less important. And I think
  • 00:32:58
    that's the wrong way to go. This is not the place to
  • 00:33:01
    address that. It's in a, it's in a workshop or opening
  • 00:33:06
    a rulemaking to discuss that with all of the utilities,
  • 00:33:08
    not just one. Thank you, Commissioner Glotfelty. I
  • 00:33:12
    appreciate the, the feedback on, on this issue. I think
  • 00:33:15
    you know you've, you've been a very strong um proponent
  • 00:33:17
    and advocate for strong sadie safety metrics. And, and
  • 00:33:21
    I think it's important that we continue to monitor
  • 00:33:25
    um, these standards. And, and have a, a more robust
  • 00:33:28
    conversation with, with the um utilities. To make
  • 00:33:31
    sure that we're, we're at the right place that we need
  • 00:33:34
    to be with respect to those metrics. And um, appreciate
  • 00:33:37
    all that feedback. Commissioner Jackson, do you have?
  • 00:33:40
    I think um point well taken. I mean the message
  • 00:33:43
    should be that we want reliability to increase. And
  • 00:33:47
    certainly that's what we've heard from the Legislature
  • 00:33:51
    and that's what we're working on. I mean pointing
  • 00:33:53
    back the um, um the, the resiliency plans. That we're
  • 00:33:58
    you know, anxiously awaiting and are being in and developed
  • 00:34:02
    in the rule that we just passed. So um you know, very
  • 00:34:06
    much need to be um cognizant of this. I think in my
  • 00:34:10
    mind this is as you said kind of a one off. We've
  • 00:34:14
    got to do something now to probably address it. They
  • 00:34:16
    are saying that they did have an upgrade in that technology.
  • 00:34:19
    But I mean to your point, they didn't really provide
  • 00:34:22
    any direct data. That says okay, with this technology
  • 00:34:26
    upgrade that impact save you to safety in these particular
  • 00:34:29
    measures. And here's how we measure that impact, right?
  • 00:34:33
    So um, you know, with that. I, I feel as you do.
  • 00:34:37
    We need to definitely, you know, be serious about this
  • 00:34:41
    and be thoughtful about it. However in this particular
  • 00:34:43
    case, um we probably need to move on and, and approve
  • 00:34:47
    the PFD.
  • 00:34:49
    Okay. So would you be open to directing Staff to.
  • 00:34:54
    I know we're directing Staff to do a lot. But uh you
  • 00:34:58
    know, as they find time and appropriate um Staff and
  • 00:35:01
    technology and uh to uh to put this on the list of
  • 00:35:05
    things to look at over the next 12 months? Absolutely,
  • 00:35:10
    we'll do that. I know uh some time back uh Barksdale
  • 00:35:15
    English, the Director of Compliance and Enforcement.
  • 00:35:18
    Filed a memo detailing some of our, um some of our
  • 00:35:21
    recommendations, as they relate to looking at these
  • 00:35:24
    measures. And we will certainly uh keep that on our
  • 00:35:28
    list and um bump it up at, as staffing allows. That's
  • Item 15 - Motion to adopt PFD
    00:35:33
    great, thank you Connie. Um okay. With that do I
  • 00:35:36
    have a motion to adopt the PFD? So moved. I second. All
  • 00:35:42
    right, I got a motion and a second. All in favor, say aye. Aye.
  • 00:35:46
    All right. Motion prevails. Okay, so let's see here.
  • 00:35:51
    So that takes us, Item No. 16 is consented. That
  • 00:35:53
    takes us to Item No. 17. Shelah, will you please lay out
  • Item 17 - Joint petition at TX Energy Assoc. for Marketers & Alliance for Retail Markets for designation under 16 TAC 25.475(b)(5)
    00:35:57
    that item? Yes, ma'am. Item 17 is Docket No. 55959.
  • 00:36:02
    The joint petition at Texas Energy Association for
  • 00:36:05
    Marketers and Alliance for Retail Markets for designation
  • 00:36:09
    under Commission Rule 25.475, Subsection (b)(5). Before
  • 00:36:14
    you is an appeal of Order No. 4 was filed by
  • 00:36:17
    team and arm. By individual ballot, the Commission voted
  • 00:36:21
    to place this agenda to consider an extension of time
  • Item 17 - Motion to grant extension
    00:36:24
    to act on the appeal. Okay. I would grant an extension
  • 00:36:29
    of time to the maximum extent allowed by law. To act
  • 00:36:32
    on the rep coalition's appeal of interim Order No.
  • 00:36:34
    4. I would second. We got a motion and a second.
  • 00:36:40
    All in favor, say aye. Aye. All right. Motion prevails. Okay,
  • 00:36:45
    so let's see. Item No. 18 and 19 were consented.
  • 00:36:48
    that brings us to Item No. 20. Shelah, please lay
  • Item 20 - Commission Staff’s Petition for a declaratory order interpreting 16
    TAC 25.475(b)(5)
    00:36:52
    out that item. Item 20 is Docket No. 56168. Commission
  • 00:36:57
    Staff's petition for a declaratory order interpreting
  • 00:36:59
    Commission Rule 25.475, Subsection (b)(5). The ALJ
  • 00:37:04
    filed Order No. 1. Certifying the following two
  • 00:37:08
    issues to the Commission. The first issue is who are
  • 00:37:11
    the persons and entities that may be affected by the
  • 00:37:13
    declaratory order sought by Commission Staff's petition?
  • 00:37:17
    And issue two is to whom and by what method or methods
  • 00:37:21
    should Commission Staff be required to provide notice
  • 00:37:24
    of its petition? And Commissioner Cobos filed a
  • 00:37:26
    memo in this docket.
  • 00:37:29
    All right, thank you Shelah. So Commission Staff filed a motion
  • 00:37:33
    to a debate in this proceeding. Because they have reached
  • 00:37:35
    a settlement agreement with the parties. And I believe
  • 00:37:39
    that consistent with my memo, I would like to move
  • 00:37:42
    forward with providing feedback on the certified issues.
  • 00:37:47
    Because I think it's important to, for the Commission
  • 00:37:50
    to um state a position on these issues because it would
  • 00:37:53
    provide certainty to the retail market. This is a much
  • 00:37:56
    broader issue. Then the um the, the specific sort
  • 00:38:01
    of enforcement piece that, that led to this petition
  • 00:38:03
    for declaratory order. And so, uh consistent with my
  • 00:38:07
    memo I, I would like to answer the certified issues.
  • 00:38:10
    And I believe that the any, any sort of discussion
  • 00:38:14
    settlement agreement on an enforcement matter should
  • 00:38:17
    be conducted in a separate docket. It, this is not
  • 00:38:20
    the venue. Um, the Declaratory Order forum is not the
  • 00:38:24
    venue for a settlement agreement on an enforcement
  • 00:38:27
    matter. It, it's not what how, how this Declaratory
  • 00:38:31
    Order process works. So that needs to be handled in
  • 00:38:33
    a separate docket. And then in this, in this docket
  • 00:38:38
    I believe it's important to move forward. To act on
  • 00:38:41
    to respond to the certified issues. So that we can provide
  • 00:38:45
    the um notice as stated in my memo, but also more broadly
  • 00:38:49
    address the legal question before us. So the retail
  • 00:38:52
    market has certainty moving forward per our securitization
  • 00:38:55
    orders.
  • 00:38:58
    Commissioners,
  • 00:39:01
    do y'all have any feedback? I'm in agreement with your
  • 00:39:03
    memo. With, with the way that you've resolved the two,
  • 00:39:07
    the two issues? Thank you. Yeah, I agree as well. All
  • Item 20 - Motion to direct OPDM to draft an order, consistent with Commissioner Cobos' memo & Commission's discussion
    00:39:10
    right, great. Um okay. So do I have a motion to direct
  • 00:39:15
    OPDM to draft an order on certified issues consistent
  • 00:39:17
    with my memo and the Commission's discussion.
  • 00:39:19
    Specifically finding that the declaratory order can
  • 00:39:23
    affect all reps currently serving residential and,
  • 00:39:26
    or small commercial customers under fixed rate contracts.
  • 00:39:29
    And that notice should be provided to
  • 00:39:32
    ERCOT, OPUC, ERCOT's retail market subcomittee and all
  • 00:39:35
    parties that participated in Docket No. 52322.
  • 00:39:40
    So moved. I second. Got a motion and second. All in favor, say
  • 00:39:42
    aye. Aye. All right, motion prevails. And that brings us to
  • 00:39:46
    the end of the contested case docket and I will turn
  • 00:39:49
    over the meeting back to Chairman Gleeson.
  • Item 19 - Chairman Gleeson lays out instructions for Public Comment
    00:39:54
    Thank you, Commissioner Cobos. So Item No. 21 on
  • 00:39:57
    the docket is Public Comment. So Shelah, if you'll
  • 00:40:01
    ask those that have signed up for Public Comment to
  • 00:40:03
    come up one at a time. And we'll do 3 minutes per
  • 00:40:07
    speaker. Yes, this is Item 21. We have four people
  • 00:40:11
    that have signed up to discuss Docket No. 50788.
  • 00:40:16
    And just to note um, I do not see that we have
  • 00:40:19
    public that we have anyone signed up to speak on any
  • 00:40:21
    other items for the remainder of the agenda. So the
  • 00:40:25
    first person that signed him to speak, I'm not sure
  • 00:40:27
    if I can read this name. Is it Josie Fuller perhaps?
  • 00:40:32
    Yes. Josie, if you step up. And when everyone comes up,
  • 00:40:38
    if you'll just state your name for the record for the
  • 00:40:39
    court reporter, that would be helpful. Josie Fuller.
  • Item 21 - Public Comment by Josie Fuller on behalf of Windermere ratepayers
    00:40:46
    Good morning Commissioners. My name is Josie Fuller
  • 00:40:49
    and I'm a ratepayer representative for Windemere. I'm
  • 00:40:52
    here on behalf of the uh Docket 50788. I know we haven't
  • 00:41:00
    had a final order here. Um I wanted to thank the Commissioners
  • 00:41:04
    for allowing me to speak today. As one of the ratepayers
  • 00:41:08
    representatives, our goal has always been to do right
  • 00:41:12
    by our community. We've been up against attorneys,
  • 00:41:18
    our own water company. Who has mismanaged and robbed
  • 00:41:23
    us for hundreds of thousands of dollars for legal fees,
  • 00:41:28
    for no reason. It's mismanagement. Um, while this continues
  • 00:41:33
    to go on. Um, I am concerned
  • 00:41:39
    that, and that I understand it takes some time. While
  • 00:41:44
    I appreciate the Commissioner's ruling on the case.
  • 00:41:48
    We are perplexed as to why there hasn't been a final
  • 00:41:52
    judgment on this ruling. Um, it's been four long years.
  • 00:42:01
    Um,
  • 00:42:03
    and the members would like some closure on this
  • 00:42:08
    matter. Thank you for your time and consideration.
  • 00:42:12
    Thank you, ma'am.
  • 00:42:17
    We have two people who decided to speak next, with the
  • 00:42:19
    same last name. Uh, I don't know if they want to put
  • 00:42:21
    it together or separately. Uh, the first person is
  • 00:42:23
    Patty. And I'm sorry, I can't read the last name. Flunker. Flunker? Is
  • 00:42:27
    it F. L. U. N. K. E. R? Okay.
  • Item 21 - Public Comment by Patty Flunker on behalf of Windermere ratepayers
    00:42:41
    Good morning, Chairman Gleeson, Commissioner Glotfelty,
  • 00:42:44
    Commissioner Jackson and Commissioner Cobos. Thank
  • 00:42:47
    you for giving me the opportunity to speak today. My
  • 00:42:50
    name is Patty Flunker and I stand before you not just
  • 00:42:54
    as a ratepayer representative in the rate appeal. The
  • 00:42:57
    Windermere Oaks WSE rate appeal Docket 50788. But also
  • 00:43:02
    as the newly appointed Board Member of the Windermere Oaks
  • 00:43:06
    Water Supply Corporation. Who has felt deeply defeated
  • 00:43:10
    by the regulatory process for a rate appeal, for the
  • 00:43:13
    ratepayer to bring a rate appeal before the Public
  • 00:43:15
    Utility Commission. It has been over four years since
  • 00:43:18
    the ratepayers began paying the appealed rates that
  • 00:43:21
    were initiated in March of 2020. At the onset of this
  • 00:43:25
    journey, we never imagined that we would be, that we
  • 00:43:28
    would still be without a resolution four years after
  • 00:43:30
    the rates were increased. While we were hopeful for
  • 00:43:33
    the we, we're hopeful for today that we would have a
  • 00:43:36
    resolution. We learned late last night that our rate
  • 00:43:38
    appeal listed on the agenda will not be taken up. To
  • 00:43:42
    say this is disappointing is an understatement. Over
  • 00:43:45
    the past 48 months the small utility, just 300 customers
  • 00:43:49
    of this member owned and member control utility have
  • 00:43:52
    overpaid nearly $5,000 each. And the likelihood of recovering
  • 00:43:56
    these funds seem increasingly slim. The process has
  • 00:44:00
    been marred by misinformation and unnecessary complications.
  • 00:44:03
    That have done little more than confuse the truth and
  • 00:44:06
    delay our pursuit of just and reasonable rates. The
  • 00:44:10
    challenges we have faced have been both unexpected
  • 00:44:13
    and frankly unwarranted. From being bombarded with voluminous
  • 00:44:17
    documents to find the needle in the haystack to navigating
  • 00:44:21
    twists of language and have that have clouded transparency.
  • 00:44:24
    Our journey has been anything but straightforward. Such
  • 00:44:27
    tactics, not only diverge from the spirit and fairness
  • 00:44:32
    but also from the PUC's own standards of conduct. Which
  • 00:44:35
    call for dignity, courtesy and the respect and proceedings
  • 00:44:39
    by all parties. Sending the parties on a wild goose
  • 00:44:42
    chase to retrieve simple things. Like what was the revenue
  • 00:44:44
    used to determine the rates, should have not taken
  • 00:44:48
    four years. And now because this process has taken four
  • 00:44:52
    years when Windermere has undergone significant changes.
  • 00:44:55
    Former Board Members who raised our rates are all gone.
  • 00:44:58
    The attorneys who benefited from the rate increases
  • 00:45:01
    and represented the utility in this rate appeal have
  • 00:45:03
    moved on. Allowing the ratepayers now and the members
  • 00:45:07
    of this nonprofit to steer this ship right. In the direction
  • 00:45:11
    of providing water and sewer rates at the cost of
  • 00:45:14
    service according to our bylaws and the provisions
  • 00:45:17
    of a 501C12 nonprofit. As we come before you today
  • 00:45:22
    our plea is straightforward. We urgently seek a prompt
  • 00:45:25
    and conclusive resolution to this rate appeal. A process
  • 00:45:28
    that has extended far beyond what any of us could have
  • 00:45:31
    reasonably anticipated. The resolution to closure and
  • 00:45:34
    this rate appeal is not only critical for Windermere
  • 00:45:37
    and its ratepayers but all ratepayers in the State
  • 00:45:39
    of Texas. Who seek to have just and reasonable rates
  • 00:45:42
    through a regulatory process at the PUC in a timely
  • 00:45:46
    fashion. It is essential that the PUC embraces ethos.
  • 00:45:49
    Ensuring that the regulatory process not only serves
  • 00:45:52
    the utilities but also champions the rights and interests
  • 00:45:56
    of the public it is designed to protect. I thank you
  • 00:45:59
    for your time this morning. We hope to see this rate
  • 00:46:01
    appeal on the next open meeting for a final order.
  • 00:46:04
    Thank you. Thank you, ma'am. The next person that signed
  • 00:46:08
    up to speak is Danny Flunker.
  • 00:46:13
    (silence)
  • 00:46:15
    That about sums it up. Um
  • 00:46:20
    hi.
  • 00:46:23
    Okay.
  • 00:46:26
    Um I just I, I mean
  • 00:46:29
    four plus years. Sir, if you could state your name.
  • Item 21 - Public Comment by Danny Flunker on behalf of Windermere ratepayers
    00:46:32
    Danny Flunker. Thank you. Account No. 358.
  • 00:46:37
    What in the world is happening here? Our rate case
  • 00:46:40
    kicked off 4.5, 4 years ago due to a 71% increase to
  • 00:46:44
    cover legal fees for directors. One of whom was later
  • 00:46:47
    found guilty of breaching their fiduciary duties and
  • 00:46:49
    conspiracy. Throughout this ordeal, it became evident
  • 00:46:52
    that the former board and Roy Gosling attorneys intentionally
  • 00:46:55
    distorted crucial facts in this case. While the law
  • 00:46:58
    firm made off like bandits. To add to the confusion
  • 00:47:01
    Judge Serrano at SOAH made several errors in his PFD.
  • 00:47:05
    The uh rates for your approval were presented by uh
  • 00:47:10
    presented by staff several months ago.
  • 00:47:14
    Our community is entitled to relief here. And y'all
  • 00:47:18
    all have it in your hands, please. The uh
  • 00:47:23
    the established rates, it was in the order that were
  • 00:47:26
    unjust and unreasonable a long time ago.
  • 00:47:30
    Thank you. Thank you, sir.
  • 00:47:34
    The next person that signed up to speak is Allen Hicks.
  • 00:47:43
    Mr. Hicks if you'll, if you'll say your name for the
  • 00:47:45
    record and also spell it for the, the court reporter.
  • Item 21 - Public Comment by Allen Hicks on behalf of Windermere ratepayers
    00:47:48
    My name is Allen Hicks. A. L. L. E. N. H. I. C. K. S. All right, go
  • 00:47:53
    ahead. Thank you, uh Commissioners for allowing me
  • 00:47:55
    to speak this morning. I'm gonna take just a little
  • 00:47:58
    bit different approach than my neighbors did. A
  • 00:48:02
    personal approach to it. Four years ago when our
  • 00:48:06
    rates were raised uh 71%. We, our community is
  • 00:48:12
    made of a lot of retired folk and uh they took a
  • 00:48:17
    big hit. As myself I'm retired a few years ago,
  • 00:48:22
    we're on fixed incomes. And when that rate went up over
  • 00:48:25
    right around $100 a month, it put a pretty big strain
  • 00:48:30
    on our budgets. And uh I've been living in our community
  • 00:48:34
    for 29 years. I served on the first Board when Windermere
  • 00:48:38
    Oaks Water Supply Corporation Incorporated. Uh, and
  • 00:48:42
    we made our water corporation, a lot has changed in
  • 00:48:45
    our community since that time. Um, and we still remain
  • 00:48:50
    kind of a retirement community of folks living on fixed
  • 00:48:53
    income. Um, we have to learn how to take GI showers.
  • 00:48:58
    Now we wash our clothes once a week, we wash our dishes
  • 00:49:03
    once a week. Because our rates have gotten to a point
  • 00:49:06
    where um it's, it's getting tough to make ends meet
  • 00:49:09
    especially with the way our economy has turned. And
  • 00:49:13
    uh we've due to this rate increase uh in the last
  • 00:49:18
    four years, we've had almost 20 of our neighbors move
  • 00:49:21
    out of our neighborhood. Who cited that is the main
  • 00:49:25
    reason or one of the reasons is they couldn't afford
  • 00:49:28
    their water bills anymore. It took such a toll on their
  • 00:49:31
    budgets that they had to move out. Um, I have two elderly
  • 00:49:36
    widowers, widows who live next door to me. Who moved
  • 00:49:41
    out there just about a year after I did and their husbands
  • 00:49:45
    passed away a few years ago Their own fixed incomes.
  • 00:49:49
    They have put their houses up for, one's put their
  • 00:49:52
    house up for sale. The other has told me she can't
  • 00:49:55
    put her house up for sale because the market and the
  • 00:49:57
    housing. She can't sell no one come in right now and
  • 00:50:01
    buy these things because of the interest rates.
  • 00:50:04
    So we have more of our good neighbors who are wanting
  • 00:50:07
    to move out of our neighborhood. Because of these rates
  • 00:50:10
    are just, you know. If you take $100 a month times
  • 00:50:13
    12 months. $1200 a year times four years. $4800 is
  • 00:50:18
    a big chunk of someone who's on a fixed incomes budget.
  • 00:50:22
    My neighbor loved to, she used to love to garden.
  • 00:50:26
    She can't garden and do her flowers anymore because
  • 00:50:28
    she can't afford her water rates. So I just come to
  • 00:50:31
    you this morning. I know y'all seen dozens and dozens
  • 00:50:34
    and tons of uh briefs, filings, RFIs. I just wanted
  • 00:50:41
    to put a little personal spin on what it's doing to
  • 00:50:43
    our community and our good neighbors. And none of us
  • 00:50:45
    want to see any more of our good neighbors leave. So
  • 00:50:48
    we just urge you guys to uh make your decision ASAP.
  • 00:50:53
    And give our poor community, our little community out
  • 00:50:55
    here some relief. Thank you. Thank you, sir. That concludes
  • 00:51:00
    the Public Comment period. Thank you, Shelah. Can we
  • 00:51:03
    add one? Sure. The presiding officer? Yeah, absolutely.
  • Item 21 - Public Comment by Bruce Sorgen on behalf of Windermere ratepayers
    00:51:10
    I'll keep this brief. My name is Bruce Sorgen. I live
  • 00:51:13
    in Windermere. My mother. Can you spell your last name
  • 00:51:16
    please? S. O. R. G. E. N. Thank you. This is our 4th or 5th
  • 00:51:20
    trip down here and I understand it's a process. It
  • 00:51:22
    takes time but come on four years? My mother's 81 she
  • 00:51:26
    predicted this would happen two days ago. And I said
  • 00:51:28
    oh, you're so negative. Guess what? She was right.
  • 00:51:31
    You'll put us off again.
  • 00:51:34
    It's time to make a decision. That's all. Thank you,
  • 00:51:38
    sir.
  • 00:51:40
    That includes Public Comment. Thanks, Shelah.
  • Item 27 - Chairman Gleeson lays out Project No. 55000
    00:51:44
    So uh I don't have anything on 22, 23, 24, 25, 26. Item
  • 00:51:50
    No. 27 is Project No. 55000, performance credit
  • 00:51:55
    mechanism. I filed a memo in this project and um if
  • 00:52:01
    ERCOT would come up and Commission Staff.
  • 00:52:18
    So before I lay out my memo, maybe ERCOT if you want
  • 00:52:21
    to go through the filing that you made um on February
  • 00:52:24
    29th, uh that might be helpful.
  • Item 27 - ERCOT's Ryan King on ERCOT's design memo filing
    00:52:31
    Ryan King with ERCOT.
  • 00:52:33
    So um last week a made a filing um the import of
  • 00:52:39
    which consisted of a design memo prepared uh in concert
  • 00:52:46
    with E3 and in close collaboration with ERCOT
  • 00:52:50
    Staff and with Commission Staff. It essentially outlines
  • 00:52:55
    the 37 design uh parameters that are uh part of the
  • 00:53:00
    PUCM design.
  • 00:53:04
    And it also includes a set of default values. Now,
  • 00:53:08
    just to be clear, these default values aren't necessarily
  • 00:53:11
    recommendations or final decisions. They're merely
  • 00:53:14
    a means when it comes to looking at the study of the
  • 00:53:19
    different variables to establish a reasonable baseline
  • 00:53:22
    And it also allow um the study of individual variables
  • 00:53:27
    while holding the others constant.
  • 00:53:30
    The um filing also outlines the process by which uh
  • 00:53:34
    ERCOT plans to consult with stakeholders on the design
  • 00:53:37
    of this. So this will consist of three contemplated
  • 00:53:43
    workshops over the course of three months. Uh The first
  • 00:53:47
    one will really be one that uh E3 will be leading.
  • 00:53:51
    It will be meant to be kind of a level set to
  • 00:53:54
    understand the PUCM framework, uh some of the parameters.
  • 00:53:58
    And uh an initial look at at the study of these different
  • 00:54:02
    um options and their, their impacts to ERCOT customers
  • 00:54:06
    and systems.
  • 00:54:08
    Then there will be sort of two contemplated workshops
  • 00:54:13
    to kind of iterate through that discussion. Look at
  • 00:54:16
    the results of the design uh parameters, the studies
  • 00:54:20
    that, that ERCOT's pardon me that the E3 is doing
  • 00:54:23
    with their serve and model. And uh hopes of, of finding
  • 00:54:27
    maybe some common ground when it comes to uh presenting
  • 00:54:30
    these to TAC for discussion. And then a subsequent
  • 00:54:34
    filing uh in July at the Commission.
  • 00:54:39
    So I think a big point. Sorry, Rebecca Zerwas for ERCOT.
  • 00:54:43
    A big part of this filing is knowing there's a lot
  • 00:54:46
    of information being provided. And that this is the
  • 00:54:48
    third kind of iteration of that market initiative document
  • 00:54:52
    and you kind of shifting of the timelines. This is
  • 00:54:55
    the stage where looking at what we've proposed before
  • 00:54:58
    looking back at the statute. Getting the first, you
  • 00:55:01
    know, consultant report out. There will be a more detailed
  • 00:55:04
    white paper we're anticipating for the workshop.
  • 00:55:08
    But really looking at that process and where we are
  • 00:55:11
    and asking the Commission if this is the right direction
  • 00:55:13
    for the process. And where we need to go we built
  • 00:55:16
    all of those looking at kind of January of getting
  • 00:55:18
    that analysis that's required by HB1500 done. So this
  • 00:55:23
    is this is the process that we were working on getting
  • 00:55:25
    a straw man. And we had shifted with this version, the
  • 00:55:27
    workshops before the strawman of that framework design.
  • 00:55:31
    So we could get the TAC and Commission feedback
  • 00:55:34
    in advance. Okay. Commission Staff? Werner, Chris?. Do you
  • 00:55:38
    y'all have anything? Okay. So I think just as far as far
  • 00:55:43
    as our procedure. Why don't we run through the three
  • 00:55:45
    issues I brought up in my memo and I'm sure you all
  • 00:55:47
    might have some questions for Staff and ERCOT as well.
  • Item 27 - Chairman Gleeson lays out out his memo
    00:55:49
    So um take them up a little out of order. I think
  • 00:55:53
    the engagement timing, the first one we can take at
  • 00:55:55
    the end. Just because um probably have some a broader
  • 00:55:58
    discussion on timeline generally. Um So as far as the
  • 00:56:02
    billion dollar cap should be an absolute annual cap
  • 00:56:04
    or an average annual net cost cap. In my opinion, the
  • 00:56:07
    intent of the Legislation and the, the plain reading
  • 00:56:12
    of the language is that this has to be a firm, absolute
  • 00:56:14
    $1 billion cap. I don't think the Legislature really
  • 00:56:17
    left us much wiggle room on that. While I appreciate
  • 00:56:20
    the optionality and ERCOT trying to give us options for that.
  • 00:56:23
    For a myriad of reasons, I think that we don't really
  • 00:56:27
    have an option there. I think the, the Legislature
  • 00:56:29
    was clear in what their desire is and the bill is clear
  • 00:56:33
    to me. But I'm happy to hear any, any thoughts you'll
  • 00:56:35
    have. I am in agreement with you as well, Chairman
  • 00:56:38
    Gleeson. There, there is no room for interpretation.
  • 00:56:41
    It's, it's a hard annual um $1 billion net cost cap.
  • 00:56:45
    And um you know I, I think ERCOT knew that during
  • 00:56:49
    the Legislative discussions. There was a lot of talk
  • 00:56:51
    about rolling averages and averages and that clearly
  • 00:56:54
    was rejected by the Legislature. So I'm a little bit
  • 00:56:56
    perplexed as to why that's even an option, especially
  • 00:56:58
    a default option in this paper.
  • 00:57:02
    I, I would say uh, in the words of uh former Chairman
  • 00:57:05
    Peter Lake. Firm is firm. Annual is annual.
  • 00:57:10
    I, I concur as well. I think um absolute annual cost
  • 00:57:13
    cap was um was specified. And was also the intent
  • 00:57:18
    and it's what we've always discussed in terms of the
  • 00:57:21
    billion dollars. And you know, and I know we'll talk
  • 00:57:23
    about it later. But um, the need to address that early
  • 00:57:28
    in the process.
  • 00:57:32
    So number three around the implementation plan. So
  • 00:57:34
    we have an order that requires an implementation plan
  • 00:57:38
    to be filed.
  • 00:57:41
    On the question of whether or not this meets that requirement
  • 00:57:44
    I would say no. As ERCOT laid out, this is really a
  • 00:57:47
    product of theirs and E3. And so I think to really
  • 00:57:50
    call anything an implementation plan, we need broader
  • 00:57:53
    input. Not just from, you know, Commissioners but
  • 00:57:56
    also from stakeholders. And so I think further along
  • 00:57:59
    in the process, we'll have something that we can develop
  • 00:58:01
    to call an implementation plan. But I don't believe
  • 00:58:03
    that this falls in line with that. I'm in agreement as well.
  • 00:58:07
    And I just want to quote the blueprint that we adopted
  • 00:58:09
    on January 19, 2023. It says the Commission will develop
  • 00:58:14
    an implementation plan with categories. To determine
  • 00:58:17
    which entity whether the Commission, ERCOT, the IMM or some
  • 00:58:20
    combination thereof is responsible for the analysis
  • 00:58:23
    related to each of the decision points below. Skip
  • 00:58:27
    down a little bit. And it says the ultimate authority
  • 00:58:28
    for all of these and any additional decision points
  • 00:58:31
    lies with the Commission. So no, this is not an implementation
  • 00:58:33
    plan.
  • 00:58:37
    So I guess I'm even perplexed by the question. Because
  • 00:58:41
    it looks to me like, you know, this was just in ERCOT's
  • 00:58:44
    mind kind of the first step. Which was sending over
  • 00:58:46
    the results of the study that um and the work that
  • 00:58:50
    E3 put together.
  • 00:58:55
    General comments or? Just, mean. I mean, would you agree
  • 00:58:58
    with that? I agree, I agree with you. That this doesn't
  • 00:59:01
    satisfy the goals of the the language of an implementation
  • 00:59:07
    plan. This is a process document that you all begun
  • 00:59:09
    to lay out with questions that I think are important.
  • 00:59:12
    But this doesn't create the implementation plan as
  • 00:59:14
    if we have. Okay.
  • 00:59:16
    And our number one around PUC and stakeholder engagement
  • 00:59:20
    and timing. You know, I will note that the timeline
  • 00:59:23
    is, is truncated and and short. My biggest takeaway
  • 00:59:28
    was all three workshops being at ERCOT. I think at least
  • 00:59:32
    one of those needs to be held here is a work session,
  • 00:59:34
    similar to what we did during market design. Um based
  • 00:59:38
    on how you kind of laid out the order of operation.
  • 00:59:40
    I would say whenever we have that first workshop at
  • 00:59:43
    ERCOT and then we ask for stakeholders to file comment.
  • 00:59:45
    I think in my mind it makes sense to have that subsequent
  • 00:59:48
    workshop as a work session here. So that we can call
  • 00:59:52
    up and hear directly from those stakeholders that file
  • 00:59:55
    comments. Um But I'm sure we have other thoughts on
  • 00:59:58
    the timeline broadly. So happy to hear y'all's thoughts.
  • 01:00:01
    Yeah I, I guess I would say. I'm in agreement that
  • 01:00:05
    the uh market participants need to have a bigger role
  • 01:00:08
    in this. Here's the place for that to happen. I
  • 01:00:11
    think we've had that discussion, we had it in the January
  • 01:00:14
    19th order that we signed. I, I think um ERCOT's doing
  • 01:00:20
    what they need to do. Which is what, what, what they
  • 01:00:22
    think is right. But I think most of those decisions
  • 01:00:25
    in this document are policy efforts that need to be
  • 01:00:27
    decided here. And with the uh, the input of uh of our
  • 01:00:31
    market participants here through our process. I agree
  • 01:00:34
    as well. Um I think the market participants as we've
  • 01:00:37
    seen in the past, you know, provide value. I would
  • 01:00:40
    only add that they also need um the, the tools that
  • 01:00:44
    that are going to help them to kind of make those decisions.
  • 01:00:47
    So we have 37, I guess proposed uh design parameters.
  • 01:00:53
    And so kind of working through the process we need
  • 01:00:56
    to make sure. That we have, you know, the modeling that's
  • 01:00:59
    available. And that can be called upon as we kind of
  • 01:01:04
    move forward and, and have, you know, not only those
  • 01:01:07
    base cases. But if we want to run additional cases
  • 01:01:10
    to see what the impact is. That that's done in my mind
  • 01:01:14
    in conjunction with the market participants. So I, I
  • 01:01:18
    recognize that we need to start somewhere. And, and
  • 01:01:20
    you guys have um retained the E3 to kind of start
  • 01:01:23
    evaluating the, the uh design parameters. But from
  • 01:01:27
    my perspective, this timeline that's laid out in our
  • 01:01:29
    in, in your filing it is very compressed. It's very
  • 01:01:32
    rushed and it completely leaves out the Commission
  • 01:01:35
    in terms of workshops and engagement in any kind of
  • 01:01:38
    stakeholder feedback over here. So I, I think we need
  • 01:01:40
    to sort of unpack the initial steps of, of this process.
  • 01:01:44
    So that um we can become involved like Chairman
  • 01:01:47
    Gleeson, noted. You know it's a very, it's a very
  • 01:01:51
    defined timeline with specific dates of workshops.
  • 01:01:53
    And I, I just don't know that we can just like tie
  • 01:01:56
    ourselves to this right now. Um given the complexities
  • 01:02:00
    of these issues and the importance of the policy calls
  • 01:02:03
    that will need to be made by, um by the Commission with
  • 01:02:07
    uh feedback from ERCOT and E3 and the stakeholders.
  • 01:02:11
    So um you know from my perspective, I think that
  • 01:02:14
    we need to, to kind of unpack the first few steps. And,
  • 01:02:18
    and then decide how we move forward based on the information
  • 01:02:21
    flow after those 1st, 1st few steps. In terms of workshops
  • 01:02:26
    the venue, the sort of um approach to those,
  • 01:02:31
    to those future workshops. So I, I don't know that
  • 01:02:33
    it's three, it could be more. And so with respect to
  • 01:02:38
    how we unpack the first initial steps, I think, you
  • 01:02:41
    know, today is about process. So we're gonna give you
  • 01:02:43
    feedback about process and how we, we can move forward.
  • 01:02:46
    And um but I do believe that,
  • 01:02:51
    you know we would, I would recommend that we ask Commission
  • 01:02:53
    Staff um Harika and team. To file a memo uh prior to
  • 01:02:58
    the March 21st Open Meeting. That provides their, their
  • 01:03:02
    input on the design parameters. The options and the
  • 01:03:05
    default um options that have been inserted into the
  • 01:03:08
    paper. Um so that we can have to have a deeper look
  • 01:03:13
    at these design parameters at the March 21st Open Meeting.
  • 01:03:17
    And as you know Chairman Gleeson has highlighted,
  • 01:03:20
    you know, the issue with the hard cap is one issue.
  • 01:03:22
    But there could be other issues in there that we need
  • 01:03:24
    to pine on. To make sure that we get our input
  • 01:03:29
    in there on our reading of the law in our blueprint
  • 01:03:32
    before ERCOT has their first workshop. So, um I would
  • 01:03:36
    say that staff files the memo. Um and, and we, we evaluate
  • 01:03:40
    those recommendations at the 21st. Provide feedback
  • 01:03:43
    on staff's recommendations and our own feedback as
  • 01:03:46
    well. Outside of that, if we have any additional
  • 01:03:49
    feedback after further review of the paper. And then
  • 01:03:53
    um staff will then file another memo prior to the April
  • 01:03:58
    11th Open Meeting. That will summarize our feedback
  • 01:04:02
    um from the March 21st Open Meeting on the technical
  • 01:04:05
    um decision the, the technical parameters. And
  • 01:04:09
    then we could provide additional feedback if we have
  • 01:04:11
    any. And then we hand over that feedback from the Commission
  • 01:04:15
    to ERCOT. So they can put that into the straw man or
  • 01:04:19
    you know, amend the straw man. And then they and then
  • 01:04:22
    ERCOT can have their first workshop after April 11th.
  • 01:04:26
    And get feedback uh from the stakeholders on that,
  • 01:04:30
    you get the initial first round of feedback from the
  • 01:04:32
    stakeholders in, in an April workshop.
  • 01:04:36
    And then file the strawman with the stakeholder feedback
  • 01:04:40
    at the Commission. And then we request stakeholder
  • 01:04:43
    comment on that straw man and have the second workshop.
  • 01:04:47
    And then after that, then depending on the information
  • 01:04:52
    flow and, and how the two workshops have evolved. Then
  • 01:04:56
    we determine what are the next steps? What were, you
  • 01:04:59
    know, when will we have another workshop? What venue
  • 01:05:01
    will it be at? Will it be back at ERCOT? Will it
  • 01:05:04
    be back at the Commission? And, and move forward um
  • 01:05:09
    from there? Because I, I think this, this timeline
  • 01:05:11
    is just too compressed. It's, it's very defined. We
  • 01:05:14
    we need to kind of open it up at the front. And
  • 01:05:16
    the other issue that I want to point out, that I have
  • 01:05:20
    raised before. Is you know once we get through the
  • 01:05:23
    workshop center and, and we, and ERCOT comes up
  • 01:05:25
    with a final draft straw man. And, and we
  • 01:05:29
    have that before us. Then ERCOT recommends that we start
  • 01:05:32
    codifying um that strawman into our rules. At the same
  • 01:05:37
    time that we're running the updated cost assessment.
  • 01:05:40
    That, that frankly it that, that's just. I don't even
  • 01:05:43
    think that's compliant with the law. Like what is the
  • 01:05:46
    purpose of conducting an updated cost assessment, if
  • 01:05:48
    you're codifying the design parameters at the same
  • 01:05:51
    time? And I've raised this before um at an open meeting.
  • 01:05:54
    And I was told oh no we'll, we'll run the updated
  • 01:05:56
    cost assessment first and then you all can decide what
  • 01:05:59
    you're gonna do. And then you can codify the rules if
  • 01:06:01
    we move forward. But every single filing that I've
  • 01:06:03
    seen from ERCOT up until this point. And in fact, in
  • 01:06:06
    the actual filing says that in parallel. We're gonna
  • 01:06:09
    be running an updated cost assessment and codifying
  • 01:06:11
    the PUCM into the rules. That, that just doesn't give
  • 01:06:14
    credence to the whole point of the updated cost assessment.
  • 01:06:16
    They have to be separated out. We need to be able to
  • 01:06:19
    take that final straw man and, and, and we got to build
  • 01:06:24
    it to run the cost assessment. I get it. Uh but we
  • 01:06:27
    have to um run the cost assessment and figure out what
  • 01:06:30
    we're doing before we start codifying the PUCM and
  • 01:06:33
    our rules. That, that just puts the cart before the
  • 01:06:36
    horse. And, and that I don't think it's compliant with
  • 01:06:39
    with the law. So that needs to be disentangled um from
  • 01:06:43
    my, from my perspective once and for all. And um the
  • 01:06:49
    other piece of that is, you know, we kind of, we get
  • 01:06:52
    to a place if we, if this, if we're going to implement
  • 01:06:55
    the PCM. Then there are um requirements that we still
  • 01:07:01
    have to comply with that, I believe are not only enshrined
  • 01:07:04
    in 1500 but in our PUC budget order to ERCOT. And that
  • 01:07:08
    is that the PUCM and RTC plus B need to
  • 01:07:11
    be implemented around the same time. Because if they're
  • 01:07:14
    not, then ERCOT needs to run a cost analysis. That takes
  • 01:07:17
    into consideration the fact that the PUCM will stand
  • 01:07:20
    on its own for a year, a year and a half if
  • 01:07:22
    they're not. You know, I'm just saying, you know. Estimate
  • 01:07:24
    they, they have to be done together. Otherwise the
  • 01:07:26
    cost assessment is not correct. And, and that's in
  • 01:07:29
    our budget order to the, to, to ERCOT. And so I'm a
  • 01:07:33
    little bit unclear on the back end as to what's going
  • 01:07:36
    on. Because it doesn't like we feel, I feel like we're
  • 01:07:39
    moving super fast on the PUCM. And then I, at the
  • 01:07:43
    board meeting, there was an update that the RTC plus
  • 01:07:45
    B will not be implemented until December 31, 2026.
  • 01:07:49
    So I'd like to understand what the expectations are
  • 01:07:51
    there, because our expectation for our order is that
  • 01:07:55
    they be bundled together. Um, in terms of implementation
  • 01:07:59
    if, if you know if we're going to move forward with
  • 01:08:01
    the implementation of PUCM.
  • 01:08:05
    Can I add uh just two things? One of them, I
  • 01:08:08
    want to piggyback on what you're saying about, uh,
  • 01:08:10
    the in the independent cost studies. Um I firmly believe
  • 01:08:14
    we've talked about this before up here as well. That
  • 01:08:17
    the IMM study and the ERCOT study ought to be completely
  • 01:08:21
    independent of each other. We need to have two data
  • 01:08:23
    points, two views of how PUCM is gonna um, cost. And
  • 01:08:27
    affect the market and the value of that, not one combined
  • 01:08:32
    study uh overly managed by one party or another.
  • 01:08:36
    So I would hope that the IMM can begin that process
  • 01:08:39
    now or can begin that process soon as well. And that
  • 01:08:42
    can help us inform these parameters. As, as you have
  • 01:08:47
    said. I have a couple of other issues that are, I think
  • 01:08:51
    more specific about where they're going. That I'll,
  • 01:08:55
    that I'll say for further in the discussion or in the
  • 01:08:58
    workshop. Yeah, I think that's probably appropriate.
  • 01:09:00
    So sounds like we, we all kind of agree the process
  • 01:09:03
    we need to slow down a little bit. So um if you
  • 01:09:07
    felt the need to respond to anything, please go ahead.
  • Item 27 - ERCOT's Chad Seely on market initiative timeline
    01:09:11
    Chad Seeley with ERCOT. No appreciate the comments
  • 01:09:13
    on the process. You know, as Rebecca indicated, this
  • 01:09:15
    is kind of our third iteration of the market initiative
  • 01:09:18
    timeline. So we're looking for that feedback. What
  • 01:09:20
    we're really trying to do with those timelines is just
  • 01:09:22
    forecast future work. It's all adaptable by the Commission
  • 01:09:27
    working with Commission Staff, which is what we've
  • 01:09:29
    been doing uh routinely on all these market initiatives.
  • 01:09:33
    And we're just kind of forecasting the work to move
  • 01:09:36
    the product along. And we started these market initiatives
  • 01:09:40
    in August of last year and this is the third iteration
  • 01:09:43
    of the PUCM. It's very consistent uh for the most
  • 01:09:46
    part on the front end. But obviously, there's flexibility
  • 01:09:48
    on the back end. Once we come back with and straw man may
  • 01:09:52
    not be the right term. But the the recommendation on
  • 01:09:55
    the design parameters. that is a handoff to the Commission
  • 01:09:59
    to move forward with however you all want to proceed.
  • 01:10:03
    Either a strawman rulemaking or you know do you
  • 01:10:06
    want the cost benefit analysis done before you even
  • 01:10:10
    open up a strawman rulemaking? I think that's all part
  • 01:10:13
    of the process engagement discussion, but we're obviously
  • 01:10:17
    not at that point yet. We're still in the, the first
  • 01:10:20
    quarter. Here is what I would say on taking the design
  • 01:10:23
    parameters. Having a list of options under those design
  • 01:10:27
    parameters. Starting to do the modeling analysis that
  • 01:10:29
    will give you some of those cost benefits. That will
  • 01:10:32
    ultimately feed into either a joint IMM/ERCOT analysis
  • 01:10:37
    or independent. However, that we have not spent a lot
  • 01:10:40
    of time talking to the IMM around that study because
  • 01:10:43
    it's not there yet to move forward with that. So we
  • 01:10:47
    appreciate the process feedback. If, if the Commission
  • 01:10:49
    wants to, you know, slow down on the on the workshops
  • 01:10:53
    we're perfectly fine with that. We'll continue to work
  • 01:10:56
    with Commission Staff, take that feedback and, and
  • 01:10:58
    adapt that into the the process changes. Yeah. And
  • 01:11:02
    and to that point Chad, I think you all filed uh the most
  • 01:11:05
    recent before this timeline update was maybe October.
  • 01:11:08
    And I think at that point, you had getting the straw
  • 01:11:11
    man to us in January. So we have kind of delayed and
  • 01:11:14
    slowed down. Um But I think, you know, new information
  • 01:11:18
    we continue to iterate and update as we need. So, but
  • 01:11:21
    based on the fact that timeline keeps changing, if
  • 01:11:24
    I could just throw out maybe your recommendation. Staff,
  • 01:11:26
    Connie. If you're good with Commissioner Cobos' dates
  • 01:11:29
    of coming with memos on the 21st and the 11th. Perhaps
  • 01:11:33
    we do that and then try to hold that first workshop.
  • 01:11:38
    I know there's an ERCOT board meeting in that, in April as
  • 01:11:40
    well. But maybe that following week subject to uh E3's
  • 01:11:43
    availability and, and room to do that. And then
  • 01:11:47
    kind of leave the rest of the timeline somewhat open.
  • 01:11:49
    Because I feel like we're going to get into this cadence
  • 01:11:52
    where we think there may be a commitment to something.
  • 01:11:55
    And then we get new information and we have to continually
  • 01:11:57
    change it. So maybe committing to something that long
  • 01:12:00
    term is not advisable. Um So I think that may be one
  • 01:12:04
    way we can address this. And then have staff and ERCOT
  • 01:12:08
    come back to us kind of iteratively. And tell us, you
  • 01:12:11
    know, what the next step is and we can just kind of
  • 01:12:13
    set it going forward like that. Because I don't, I don't
  • 01:12:15
    want to just get on this um you know, in this cycle.
  • 01:12:18
    Of having them file timelines and then saying, well
  • 01:12:21
    no, slow it down again and then that changes everything.
  • 01:12:24
    And I appreciate honestly, I do appreciate y'all's
  • 01:12:26
    effort. Because trying to get something that we can
  • 01:12:29
    once again this Legislative Session in '25 kind of deliver.
  • 01:12:32
    Is here's how we plan to go forward and let the Legislature
  • 01:12:34
    speak to that I think is important, but the process
  • 01:12:37
    is also important too. So I appreciate the effort.
  • 01:12:39
    But yeah, I think slowing down is probably advisable
  • 01:12:42
    at this point. And so, you know, happy to hear y'all's
  • 01:12:46
    thoughts, but maybe doing it that way. So we're just
  • 01:12:48
    not constantly on this cycle of changing the time,
  • 01:12:50
    the back end of the timeline over and over again. Um
  • 01:12:53
    without any real meaning to, it would be helpful.
  • 01:12:57
    You would still need an expectation as folks are gonna
  • 01:13:00
    ask. I mean, when will you make an end? And so you're
  • 01:13:04
    not proposing that we just leave it totally off, right?
  • 01:13:07
    I'm saying that I think as we kind of make a decision.
  • 01:13:10
    We kind of address the next step. I mean, even in the
  • 01:13:13
    timeline they submitted, the last entry is just kind
  • 01:13:15
    of open ended. And so that wasn't a completion timeline
  • 01:13:19
    there's still work to be done at ERCOT through their protocols,
  • 01:13:22
    through their system upgrades. I mean, this
  • 01:13:24
    this is going to take even longer than what. Even if
  • 01:13:26
    we held to their timeline, the actual implementation
  • 01:13:29
    of this would still be much further. So I just don't
  • 01:13:32
    know that we have enough information now. To have a
  • 01:13:35
    timeline somewhere in the 2026/2027. Actually mean
  • 01:13:39
    anything at this point.
  • 01:13:42
    I was just gonna say. I think the first workshop, I
  • 01:13:45
    know Ryan talked about it. That is really what we see
  • 01:13:47
    as the educational level set. I think the a lot of
  • 01:13:51
    the even working through the E3 document would
  • 01:13:54
    be help, would be helpful to have that and inform really
  • 01:13:57
    the high ground, high level background on PUCM. Um how
  • 01:14:00
    we got there um taking that framework document from
  • 01:14:04
    October these points. How they plan to perform the
  • 01:14:08
    analysis of these different design decisions. So when
  • 01:14:10
    you make your decision, how they will analyze um those
  • 01:14:13
    individual elements. I think it'll be really helpful
  • 01:14:16
    to have that as a base. In April? Yeah, I think April
  • 01:14:21
    works, I think that's just going to be really helpful
  • 01:14:23
    for. We did a little version of that with Commission
  • 01:14:26
    Staff, I believe in December or early January. So I
  • 01:14:28
    think having um that for the broader market and stakeholders
  • 01:14:32
    and Commission will be very helpful.
  • 01:14:35
    Connie? Thank you, Chairman and Commissioners. I, I appreciate
  • 01:14:40
    the, the timeline that Commissioner Cobos has, has laid
  • 01:14:43
    out. And it's um pretty consistent with what staff had
  • 01:14:47
    in mind upon reviewing uh ERCOT's filing. And we, we
  • 01:14:54
    will uh support ERCOT in preparing for that mid April
  • 01:14:58
    workshop, following the April 11th Open Meeting.
  • 01:15:02
    And I think you know as, as Rebecca just noted um
  • 01:15:06
    a, a level set for the stakeholders is a good idea.
  • 01:15:10
    I think the paper they filed has, you know, fairly
  • 01:15:14
    extensive amount of, of history. Um that folks can
  • 01:15:17
    refer to, to, to prepare for the workshop. And um at
  • 01:15:22
    that workshop will then have the benefit of the Commission
  • 01:15:25
    weighing in on um the initial uh design parameters,
  • 01:15:31
    the baseline.
  • 01:15:35
    Does that work for everyone? Yeah, it does. Absolutely.
  • 01:15:39
    You don't need anything else from us. No. Okay, thanks, y'all
  • 01:15:42
    appreciate it.
  • Item 29 - Chairman Gleeson lays out Project No. 55826
    01:15:48
    I don't have anything on 28. Item No. 29 is Project
  • 01:15:52
    No. 55826, Texas Energy Fund in ERCOT generation
  • 01:15:56
    loan program. I filed a memo in this docket as well.
  • 01:16:00
    Just through my discussions both at the Black Rock
  • 01:16:03
    event that was held a couple of weeks ago with staff
  • 01:16:06
    and and other interested parties. These, these questions
  • 01:16:09
    kind of were the ones thematically that kept coming
  • 01:16:12
    up. And so wanted to, to tee these up and then obviously
  • 01:16:16
    any other questions that you all may have or in your
  • 01:16:19
    discussions. Come up and, and would like Staff's input
  • 01:16:22
    as well. So on Item No. 1, eligibility criteria
  • 01:16:26
    for industrial loads and puns to participate in the
  • 01:16:28
    TEF loan program. My feeling is this program should
  • 01:16:31
    absolutely allow that. Um You know, I know there may
  • 01:16:34
    be some barriers around, you may want to talk uh David
  • 01:16:37
    about kind of definitions that are in the Bill and
  • 01:16:40
    how we're reading them. But for me, one of the things
  • 01:16:43
    that's come up continually is the need for geographic
  • 01:16:46
    diversity. And I've talked to some interested parties
  • 01:16:50
    for the TEF who have told me that they'll, you know
  • 01:16:53
    they'll probably have projects that will be around
  • 01:16:55
    the Permian area. Where they would, you know, one anecdote
  • 01:16:58
    I got was a 1200 Megawatt facility that 500 of those
  • 01:17:02
    1200 megawatts would be used to serve their native
  • 01:17:05
    load. And then 700 would be locally used on the grid
  • 01:17:09
    there. And, you know, our generation there is very
  • 01:17:12
    important, you know, they need a lot of electricity
  • 01:17:14
    we're constantly chasing that area with transmission.
  • 01:17:17
    And so I think projects like that are of high value
  • 01:17:19
    and I think absolutely should be considered eligible
  • 01:17:22
    for this program.
  • 01:17:25
    Yes, Mr. Chairman. Yeah, thank you for that comment.
  • 01:17:27
    And I think that project is exactly the kind of project
  • 01:17:30
    that makes sense for a pun who's participating. I will
  • 01:17:33
    say that, you know, this, this rule had a lot of challenges
  • 01:17:37
    because we were, we were boxed in. And so the the statutory
  • 01:17:41
    provision you're referring to is there's a prohibition
  • 01:17:44
    on us giving any loans to an entity that primarily
  • 01:17:48
    serves an an industrial loader, a pun. And as we sort
  • 01:17:53
    of joked about behind the scenes, the P in pun is for
  • 01:17:55
    private use, right? And so it's been a challenge defining
  • 01:17:58
    what the criteria would be and how we are going to
  • 01:18:00
    look at primarily. But I think the facility that you
  • 01:18:02
    managed is exactly or that you referenced is almost
  • 01:18:05
    a new kind of pun. Like we don't see today where it's
  • 01:18:07
    they're, they're purposely overbuilt so that they can
  • 01:18:10
    serve the grid too. And I think one of the, the standards
  • 01:18:13
    that you'll, that you'll see in the staff's recommendation
  • 01:18:15
    that we try and carry on throughout is the primary
  • 01:18:18
    purpose of this program generally is to infuse new
  • 01:18:21
    dispatchable generation into the ERCOT market. So we
  • 01:18:24
    try and hold that line across the board. And I think
  • 01:18:27
    with regards to pun as you refer, I can like staff's
  • 01:18:30
    current interpretation of pun is that, you know, I
  • 01:18:32
    mean, by the provisions of the bill, we always want
  • 01:18:35
    to see at least 100 megawatts of new nameplate capacity
  • 01:18:38
    that's dedicated to the ERCOT market at a minimum. And
  • 01:18:41
    the word, if the primary, if the word primarily means
  • 01:18:44
    anything, it means most. And so, um I think that we're
  • 01:18:47
    looking for, uh uh you know, more of the more of the
  • 01:18:52
    installed generation to be committed to ERCOT than
  • 01:18:55
    to the pun. And so the facility that you're referring
  • 01:18:57
    to fits those criteria exactly. Um And so that's how
  • 01:19:01
    we're looking at it. Um And we also, we want to, uh
  • 01:19:05
    it's been emphasized to us that these are, these are
  • 01:19:07
    public funds and we need to protect the way that they're
  • 01:19:10
    spent. So we're taking that very seriously. And so
  • 01:19:12
    uh we are going to staff the recommendation that you'll
  • 01:19:15
    see in the, in the draft that's filed at this time
  • 01:19:17
    is that the 60% financing is for 60% of the, of the
  • 01:19:21
    percentage of the project that is dedicated to ERCOT.
  • 01:19:24
    So that is uh the, the position that is currently driving
  • 01:19:28
    staff's thinking and how we are advising
  • 01:19:32
    you to handle the pun issue.
  • 01:19:36
    Thoughts? And for clarification, 50% of the plant itself would
  • 01:19:40
    need to be available to ERCOT. Yes, ma'am.
  • 01:19:44
    I'm in agreement. I think the um
  • 01:19:48
    allowing the puns to participate or to apply for these
  • 01:19:52
    funds under the framework that's been laid out, seems
  • 01:19:56
    to optimize the use of these cogeneration facilities
  • 01:19:59
    in a way that would not only benefit us by putting
  • 01:20:03
    more megawatts on the grid but also reducing the demand
  • 01:20:07
    uh from these large consumers. Um And, and so as they
  • 01:20:11
    they rely on their uh cogeneration facility to feed
  • 01:20:14
    their electricity needs, um they're also putting megawatts
  • 01:20:18
    on the grid. And I think that is a good way to
  • 01:20:21
    optimize the puns. And also so, um you know, especially
  • 01:20:25
    in areas like the Permian as Chairman Gleeson just
  • 01:20:28
    noted. Where we need a lot of power generation to serve
  • 01:20:31
    the needs of those oil and gas and non oil and gas
  • 01:20:33
    load out there. We're, we're looking to build a transmission
  • 01:20:36
    out there, but we also need the, the dispatchable generation
  • 01:20:39
    So I, I view this as a way to optimize um the
  • 01:20:45
    the uh the funds to benefit us in, in multiple ways.
  • 01:20:51
    I'm in agreement there as well. I think we need to
  • 01:20:55
    recognize a few things. First of all,
  • 01:20:59
    we're writing words that are kind of black and white
  • 01:21:01
    that have one answer or another. But the way these
  • 01:21:04
    generation facilities really work, it's very about
  • 01:21:06
    very much about optionality. Um Cogen plants um for
  • 01:21:11
    the most part, they build two combustion turbines,
  • 01:21:13
    one steam turbine and many times they put in a uh an
  • 01:21:16
    additional steam source so that all of the so that
  • 01:21:21
    they can produce steam for their steamhouse and all
  • 01:21:23
    of the steam goes into the steam turbine to produce
  • 01:21:25
    electricity. Um We would be not allowing some of that
  • 01:21:30
    if a combined cycle plant were to, to be eligible here
  • 01:21:35
    My point in that is that the engineering and the optionality
  • 01:21:41
    won't always get picked up in our rules. We need to
  • 01:21:43
    do the, you know, satisfy the Legislation as best as
  • 01:21:47
    we possibly can now. And that I think that the other
  • 01:21:52
    recognition is that we have an industrial facility
  • 01:21:55
    on our 100% on the market right now and they're actually
  • 01:21:59
    ended up building a Cogen plant or another facility
  • 01:22:03
    to satisfy their load. They actually, there is some
  • 01:22:05
    benefit to the ERCOT market. But again, I, I think
  • 01:22:09
    the law is clear on that. I, I hope that um we
  • 01:22:13
    can take um your, your propose, your proposed way.
  • 01:22:17
    I think it makes sense. Um Also one thing I would add
  • 01:22:21
    I, I continue to toot the nuclear horn um as I can.
  • 01:22:24
    But uh as we see these plants get smaller, we're going
  • 01:22:28
    to see these plants in parallel and we've heard from
  • 01:22:31
    industrial customers refineries that many times they
  • 01:22:35
    will. They're looking at three or four units, three
  • 01:22:39
    of them dedicated to the pond and one dedicated to
  • 01:22:42
    the market to take advantage of the infrastructure
  • 01:22:45
    that they're going to build. So hoping that we can
  • 01:22:47
    do that, that drives down the cost and we provide optionality
  • 01:22:51
    to the market. Excellent point on an economy of scale
  • 01:22:55
    And then the other thing I would point out is that
  • 01:22:57
    you know, MOUs, coops and river authorities. We've
  • 01:23:00
    got experience with building out infrastructure in
  • 01:23:03
    the past and they do a good job. So I think they
  • 01:23:05
    would be, you know, potentially excellent participants
  • 01:23:08
    in the program. Yeah, no number two in my memo, you
  • 01:23:13
    know, and co-ops may not have actually, you know, I may have
  • 01:23:15
    not needed to put them in here. But yeah, I mean, my
  • 01:23:18
    feeling is MOU's uh co-ops and river authorities absolutely
  • 01:23:21
    need to be able to participate. I know just in talking
  • 01:23:23
    to David. Um just some of the ways that the the uh
  • 01:23:27
    bill were written, may, may, may have made that a little
  • 01:23:29
    challenging to see how they could participate. But
  • 01:23:31
    I think we need to do what we can to ensure that
  • 01:23:33
    that those types of entities can participate in this
  • 01:23:36
    program.
  • 01:23:39
    Uh David Gordon with Commission Staff. Chairman Gleeson
  • 01:23:41
    I'll pick up on that a little bit to give you staff's
  • 01:23:43
    current thinking around those entities. The Bill restricts
  • 01:23:48
    electric utilities from participating but not co-ops,
  • 01:23:52
    river authorities and munis and that's how we intended
  • 01:23:54
    to write our PFP. Um I want to talk about sort of
  • 01:23:58
    two issues that may have been seen as exclusionary
  • 01:24:01
    related to that PFP. The first is the requirement to
  • 01:24:05
    register as a power generation company is a question
  • 01:24:07
    that we asked about. We think that for most applicants
  • 01:24:12
    it's going to be appropriate to do that. But those
  • 01:24:15
    three types of entities are unable to register as PGC.
  • 01:24:18
    So our current thinking is that we would include a
  • 01:24:21
    carve out for those co-ops, munis and river authorities.
  • 01:24:26
    Because they do perform the same types of services
  • 01:24:30
    that a PGC does and meet the safety criteria. The one
  • 01:24:34
    that is uh a little bit more complicated is uh some
  • 01:24:37
    of the language in Senate Bill 2627 talks about how
  • 01:24:40
    to secure a TEF loan. And Section 34.0104(b)(3)
  • 01:24:47
    states that the loan is to be the senior, excuse me,
  • 01:24:51
    senior debt secured by the facility. So when we offered
  • 01:24:55
    our proposal for publication, we included loan structure
  • 01:24:58
    that would require a borrower to grant a lien interest
  • 01:25:02
    in those facilities. Um After receiving comments from
  • 01:25:06
    LCRA and CPS, we recognized that those entities are
  • 01:25:10
    prohibited from granting a lien interest in their uh
  • 01:25:14
    utility assets because of other law outside of PURA.
  • 01:25:18
    Um We have been reviewing their comments and, and working
  • 01:25:21
    with those entities and we think that there is a possibility
  • 01:25:25
    for an alternative which would require uh the public
  • 01:25:28
    power entities to grant a pledge of their revenues
  • 01:25:32
    from the utility system as an alternative to a lien
  • 01:25:36
    on the assets. I think that's offers a credible reading
  • 01:25:39
    of the law that would give the Commission a fair amount
  • 01:25:42
    of security and we just wanted to run down the traps
  • 01:25:45
    on that proposal so we can offer you all a workable
  • 01:25:50
    way to manage the loan program while allowing those
  • 01:25:55
    entities to participate in that way. So we will circulate
  • 01:25:59
    a draft to you all that, that has that thinking um
  • 01:26:03
    and um includes the the mechanisms that are specific
  • 01:26:07
    to those entities.
  • 01:26:10
    Yeah, I agree with that approach. So
  • 01:26:16
    I'm in agreement as well. And then the final thing
  • 01:26:19
    in the memo, ensuring that loan recipients are incentivized
  • 01:26:22
    to complete their proposed generation projects. So
  • 01:26:25
    I believe the law states at any point in the application
  • 01:26:28
    process, an entity can withdraw its application. I
  • 01:26:30
    know we plan to do a notice of intent to apply. So
  • 01:26:34
    you know, entities that want these funds have to let
  • 01:26:37
    us know, give us certain specifications that are yet
  • 01:26:39
    to be determined about what the facility is going to
  • 01:26:40
    be. One concern has been brought to me and, and actually
  • 01:26:43
    I had thought about was the concern that um, entities
  • 01:26:48
    may have us encumber funds to go to them. And then
  • 01:26:51
    very late in the process, say right before they have
  • 01:26:54
    to put up their 3% escrow pull out and then make it
  • 01:26:57
    very difficult for us to then reallocate those funds
  • 01:26:59
    to other entities.
  • 01:27:02
    You know, I don't know what we can do to avoid that
  • 01:27:04
    There may be situations where something like that is
  • 01:27:06
    necessary. But I would say if, if a situation like
  • 01:27:10
    that arises and it makes it difficult for us to actually
  • 01:27:12
    get out all the funds that won't be looked upon kindly
  • 01:27:17
    by me. Because the Legislature was clear that this is
  • 01:27:20
    one of the landmark pieces of Legislation from the
  • 01:27:22
    last Session. That they are very intent on getting out
  • 01:27:26
    to help build dispatchable generation in the state.
  • 01:27:28
    And so that types of game manship, gamesmanship should
  • 01:27:31
    not be used and we'll be looking for it.
  • 01:27:36
    Alison Fink with Commission Staff. And to respond
  • 01:27:39
    to your, to your concerns. Um Staff, here is your
  • 01:27:42
    concern loud and clear and the the process as envisioned
  • 01:27:46
    so far in, you know, that was also even in our proposal
  • 01:27:50
    for publication includes a set of required documents
  • 01:27:55
    that applicants have to provide just as a part of the
  • 01:27:57
    application that are, that will require a quite a bit
  • 01:28:02
    of effort to put together. We think that this, that
  • 01:28:05
    the process as envisioned with requiring those types
  • 01:28:09
    of documents and then moving into a due diligence phase
  • 01:28:13
    where they will be required to submit further evidence
  • 01:28:17
    of their commitment to the project.
  • 01:28:21
    These will help weed out those participants that may
  • 01:28:26
    that are considering that you pulling out of the late
  • 01:28:29
    process in, you know, maybe bad faith or, or for whatever
  • 01:28:33
    reason. But we're hopeful that our process is geared
  • 01:28:37
    toward avoiding that type of behavior, um, and not
  • 01:28:40
    incentivizing it. And we'll do, we'll also scrub our
  • 01:28:44
    language to make sure that if there's other places
  • 01:28:46
    where we can address that, that your concern, we'll
  • 01:28:49
    do that as well. And I would say if you see instances
  • 01:28:52
    like that, just keep us apprised.
  • 01:28:56
    I'm in agreement. Thank you for not identifying that
  • 01:28:58
    issue. I think it's really important. Um, you know
  • 01:29:01
    these, these funds are, are very important to incenting
  • 01:29:04
    dispatchable generation investment for the Legislature's
  • 01:29:07
    direction. I recognize we're in a competitive market
  • 01:29:11
    and, um, a competitive wholesale market. And so it's
  • 01:29:16
    important that applicants don't, you know, sort of
  • 01:29:20
    apply in, in, you know, kind of do a foot dance to
  • 01:29:24
    block out competitors. I mean, that, that's just not
  • 01:29:26
    acceptable. And I think what you've proposed is an
  • 01:29:30
    appropriate process to move forward and please keep
  • 01:29:32
    us informed. And I would even say that if there is
  • 01:29:35
    obvious engagement going on that. I mean, I don't know
  • 01:29:39
    if we have enforcement authority over it, but I wouldn't
  • 01:29:42
    look upon those situations very kindly either. Yeah
  • 01:29:46
    I'm sure that the Legislature would be interested to
  • 01:29:48
    know if we see things like that. So there's, there's
  • 01:29:50
    probably a way to, to address it. I know you, you're
  • 01:29:54
    talking about expectations and, um, you know, one of
  • 01:29:57
    the things I think is important to me and, you know
  • 01:30:01
    you, you talked about the, the, the various documentation
  • 01:30:05
    and um due diligence that's gonna go into the application
  • 01:30:08
    and the kind of the formulation of the initial design
  • 01:30:11
    and that kind of thing. Um I in my mind, the spirit
  • 01:30:15
    uh and also the intent of the Legislation was not just
  • 01:30:19
    to fund the facility. But it was to put in place a
  • 01:30:22
    resource, a reliable resource that's gonna be good
  • 01:30:25
    and participate in the ERCOT market for 20 years. And
  • 01:30:29
    so in, in developing our um you know, guidance and
  • 01:30:33
    in, in the rulemaking for the Texas Energy Fund. Again
  • 01:30:37
    it's not just about planting the facility, it's that
  • 01:30:41
    long term commitment to be a reliable, dispatchable
  • 01:30:46
    generation source in the market for 20 years. And so
  • 01:30:50
    we just, it seems like we're taking that into account
  • 01:30:53
    and just would want to continue, to see that
  • 01:30:56
    within the rule making. And in that kind of frame of
  • 01:30:59
    reference.
  • 01:31:01
    I, I think the one I I'm uh pleased with, with the
  • 01:31:05
    direction that y'all are going on all of these issues.
  • 01:31:08
    The one thing, uh I would say is that, um, as
  • 01:31:12
    you get closer to the end, um, having some discussions
  • 01:31:16
    with bankers, if you haven't already done, so, might
  • 01:31:18
    be advisable. Um, very quirky. Um, but if they're putting
  • 01:31:23
    up, uh, not uh tens of millions of dollars, but hundreds
  • 01:31:26
    of millions of dollars to pair with the state, we don't
  • 01:31:29
    want, we don't want to have something in the rule that
  • 01:31:31
    basically says, well, we can't fund around that. So
  • 01:31:33
    just having a discussion with some would probably be
  • 01:31:36
    um a good due diligence if you can keep it quiet or
  • 01:31:40
    however you want to do it. But, uh, they are, um, I
  • 01:31:44
    mean, I think Commissioner Jackson knows, you know
  • 01:31:46
    when you're funding these big facilities, it's not
  • 01:31:48
    like you're getting one check, you're getting multiple
  • 01:31:50
    checks and you're getting multiple checks and balances
  • 01:31:52
    and, you know, there, it, it, it's just not, uh, like
  • 01:31:55
    buying a loaf of bread. It's much more in depth than
  • 01:31:57
    that. So,
  • 01:32:00
    and the commitment process doesn't stop with the, with
  • 01:32:03
    the loan commitment. It, it's really just the beginning
  • 01:32:06
    And so we also need to be thinking about the outlay
  • 01:32:09
    process. You know, what, what we're gonna require in
  • 01:32:11
    terms of our notice to proceed, what we're gonna be
  • 01:32:14
    looking at in terms of benchmarks as we move forward
  • 01:32:17
    for those specific outlays to occur, how that's gonna
  • 01:32:21
    be handled so that, you know, they don't feel like
  • 01:32:24
    they're waiting on this because, I mean, this is not
  • 01:32:26
    just about putting the dispatchable generation in place
  • 01:32:29
    it's about getting it quickly. And so we want to make
  • 01:32:31
    sure that we're very, uh, efficient and diligent and
  • 01:32:35
    um, and thoughtful on the process now so that we can
  • 01:32:39
    be as efficient as possible. You solve any other issues
  • 01:32:43
    while they're up here. No, go ahead, David. I just
  • 01:32:47
    wanted to make a couple of closing remarks. Because
  • 01:32:49
    I know that sometimes folks are waiting with bated
  • 01:32:53
    breath on what the outcomes are gonna be. And I think
  • 01:32:55
    uh Commissioner Glotfelty, when you were talking about
  • 01:32:58
    the, the small nuclear reactors. I do think that um
  • 01:33:00
    that is an interesting area that we need to pay attention
  • 01:33:02
    to. And I know that one policy question that a lot
  • 01:33:06
    of stakeholders had is um you know, whether or not
  • 01:33:09
    these facilities can be distributed or if they have
  • 01:33:11
    to be clustered together. And I think right now staff
  • 01:33:13
    is thinking of it as a sort of from the perspective
  • 01:33:16
    of a point of interconnection where, you know, I mean
  • 01:33:18
    it doesn't have to, a project doesn't have to just
  • 01:33:20
    be one big turban, it can be multiple generating items
  • 01:33:24
    but we're sort of looking at it from a single point
  • 01:33:27
    of interconnection perspective. And so truly distributed
  • 01:33:30
    resources are we we don't think are contemplated by
  • 01:33:32
    this Legislation, but I think, you know, there would
  • 01:33:35
    be flexibility behind the meter. Um The next point
  • 01:33:38
    I want to make that you mentioned about talking to
  • 01:33:40
    banking. Um I, I actually haven't been in all the meetings
  • 01:33:43
    and I will say that this is the one rule making where
  • 01:33:45
    sometimes we have upwards of 20 or 30 members of Commission
  • 01:33:48
    Staff from different angles. But I do want to reassure
  • 01:33:50
    that we've benefited immensely from um the expertise
  • 01:33:53
    of our consultant Deloitte and the specific members
  • 01:33:56
    on the team have specific experience funding similar
  • 01:33:58
    projects working with the DOE and other states. And
  • 01:34:01
    so um we will of course continue to seek expertise
  • 01:34:04
    from anyone who has it. But uh this, this hasn't just
  • 01:34:07
    been us doing our best to figure it out behind the
  • 01:34:09
    scenes on, on that front. So I want to provide that
  • 01:34:11
    reassurance and then the last from a project management
  • 01:34:15
    standpoint, we are committed to filing a draft a week
  • 01:34:20
    or more early for public feedback. And I would say
  • 01:34:22
    that sometimes if you're a stakeholder and you see
  • 01:34:24
    something that you don't know in a file draft, you
  • 01:34:28
    don't always know what your first course of action
  • 01:34:30
    should be. And my, my recommendation would be this
  • 01:34:32
    is a complicated draft. So we are hoping that we get
  • 01:34:34
    on it from members of the public to point out things
  • 01:34:36
    And I would say that this front table right now, David
  • 01:34:40
    Gordon, David Smeltzer and Alison Fink. This should
  • 01:34:42
    be that should be in your two line in the email for
  • 01:34:45
    questions and last minute suggestions and we will send
  • 01:34:48
    those questions to other members of the team as necessary
  • 01:34:51
    or pass them, you know, any recommendations on to the
  • 01:34:53
    Commissioners. You're, you're always welcome to reach
  • 01:34:56
    out to anyone on staff. But that, that is your get
  • 01:34:58
    an answer quick group that I would that I would recommend
  • 01:35:02
    reaching out to. Thanks. But David to your right was
  • 01:35:04
    very pleased that you just said to be
  • 01:35:08
    put on.
  • 01:35:10
    We're gonna make Allison do all the work. Everyone
  • 01:35:12
    knows that right. I mean, it's no, no surprise. Send
  • 01:35:14
    it to me.
  • 01:35:17
    Connie? Thank, thank you, Commissioners for your feedback.
  • 01:35:20
    This has been extremely helpful as we finalize staff's
  • 01:35:24
    draft recommendation. Um We expect to file that um
  • 01:35:27
    on Monday the 11th, which is 10 days in advance of
  • 01:35:31
    the next open meeting. And um that will as uh David
  • 01:35:35
    Smeltzer suggested, give folks an opportunity to look
  • 01:35:39
    through this rule which um to say is complex and a
  • 01:35:43
    vast understatement. Um And so again, to the extent
  • 01:35:49
    that um you have any specific feedback on what is in
  • 01:35:54
    staff's recommendation, um Please do reach out to the
  • 01:35:58
    three project leaders that you see here at the table
  • 01:36:01
    Um I would note though that, you know, the Commissioners
  • 01:36:06
    have spoken on um certain issues that we asked them
  • 01:36:10
    about in, in this open meeting and to the extent that
  • 01:36:13
    you want to um reargue a policy call. Um That's not
  • 01:36:19
    something that staff um is particularly prepared to
  • 01:36:22
    entertain during that 10 day period. OK. That makes
  • 01:36:27
    sense. Yeah. And then just to, and you know, thank
  • 01:36:30
    you, like you said, David, to the entire PUCT team
  • 01:36:33
    this has been a large undertaking to all the stakeholders
  • 01:36:35
    who have participated. Obviously, this Bill 2627 was
  • 01:36:39
    you know, hotly debated in May of the last Legislative
  • 01:36:42
    Session. The timelines are short and it's only gonna
  • 01:36:46
    be successful because all the input and work of everybody
  • 01:36:48
    And so thank you to everyone as we uh hopefully get
  • 01:36:51
    this rule across the finish line at the next open meeting.
  • 01:36:54
    I, I do have one more thing that uh I'd like to
  • 01:36:56
    add and that is um Connie, I'd like to forward you
  • 01:37:00
    um a document if you can provide it to the other Commissioners.
  • 01:37:03
    Um uh I, I asked Woody um Rebecca and Christy at ERCOT.
  • 01:37:08
    If they would help me understand the facilities
  • 01:37:12
    that are in the interconnection process that would
  • 01:37:14
    be eligible for this and those that are in the interconnection
  • 01:37:18
    process and included in the CDR that are ineligible
  • 01:37:21
    for this. And they provided me two lists within a spreadsheet
  • 01:37:25
    Um And I just want to make sure that everybody knows
  • 01:37:28
    those facilities that they are thinking uh there are
  • 01:37:31
    1, 2, 3, 4, 5, 6 facilities that would be ineligible because
  • 01:37:35
    they are currently in the CDR. Okay. That's helpful,
  • 01:37:39
    thank you. Great to know. Ok, will do. Thanks y'sll, appreciate
  • 01:37:44
    it. Thank you. Thank you.
  • Item 30 - Chairman Gleeson lays out Project No. 56253
    01:37:47
    So, the next item is Item 30, Project No. 56253
  • 01:37:52
    review of 22.104. Before us is a proposal for publication
  • 01:37:59
    to reduce the CCN intervention deadline from 45 to
  • 01:38:02
    30 days to accommodate the new law that has 180 day
  • 01:38:06
    deadline. This seemed straightforward to me. I didn't
  • 01:38:11
    have any questions unless you all did.
  • Item 30 - Motion to approve PFP
    01:38:15
    Okay. Then I'd entertain a motion to approve the PFP.
  • 01:38:21
    So moved. Second. I have a motion and a second. All those in favor, say
  • 01:38:23
    aye. Aye. Opposed? Motion prevails. I don't have anything on
    EditCreate clip
  • Item 34 - Chairman Gleeson lays out Project No. 55421
    01:38:27
    31 through 33. 34 is Project No. 55421, Texas Advanced
  • 01:38:34
    Nuclear Reactor Working Group. Commissioner Glotfelty
  • Item 34 - Commissioner Glotfelty's update on Nuclear Rector Working Group
    01:38:36
    has an update. Thank you very much, Mr. Chairman.
  • 01:38:39
    Um I very quickly uh full meetings of the nuclear committee
  • 01:38:44
    and their subcommittees are continuing at full force
  • 01:38:46
    with great attendance and discussions. Um very, very
  • 01:38:50
    specific issues that we're discussing uh in the context
  • 01:38:54
    of um what we can do here in the state and how
  • 01:38:57
    we are in competition with other states. Um Last week
  • 01:39:01
    uh in our full committee meeting, we hosted the President
  • 01:39:04
    of NEI, the Nuclear Energy Institute. She participated
  • 01:39:08
    with us for over an hour on, with cues and questions
  • 01:39:11
    and answers among the members on what's going on in
  • 01:39:14
    Washington. What are the funds up there that might
  • 01:39:16
    be available and how do we get ahead of, of other um
  • 01:39:19
    other states? She, she is a believer if I, if I can
  • 01:39:22
    put words in her mouth. That uh that we have a great
  • 01:39:25
    opportunity here in Texas to really, really lead on
  • 01:39:27
    this um in this area. Last week in NARUC. Um there
  • 01:39:33
    were, there were nuclear discussions um that uh I'm
  • 01:39:38
    I'm part of a group up there with NASEO and NARUC. Um
  • 01:39:41
    And we participated in an all day Sunday event. There
  • 01:39:45
    point is nuclear is becoming a word that seems to infiltrate
  • 01:39:53
    every form. So with that being said, I wanted to also
  • 01:39:57
    note there are four events that are coming up within
  • 01:40:00
    the next month that are nuclear related that folks
  • 01:40:04
    can attend. There's a Sunday event this coming Sunday
  • 01:40:09
    Nuclear Texas at South by Southwest, uh zero week in
  • 01:40:14
    Houston, um which is a big energy conference there.
  • 01:40:18
    There's a nuclear panel and I'm working on a nuclear
  • 01:40:21
    podcast. Um That's like the um if you aren't familiar
  • 01:40:27
    with that's really the global leaders of primarily
  • 01:40:30
    oil and gas, but electricity has now really infiltrated
  • 01:40:34
    in that. Uh The US Nuclear Industry Council is expecting
  • 01:40:38
    over 300 attendees. Uh April 15th to 17th in Houston
  • 01:40:43
    Um They've asked the Governor to come and speak. I
  • 01:40:46
    don't know if he's gonna be able to do that in his
  • 01:40:48
    schedule. But um if not, we are putting a good face
  • 01:40:51
    forward for him. And uh UT Energy Week is having a nuclear
  • 01:40:56
    symposium as well, March 25th through 28. So the point
  • 01:41:00
    is this stuff is, is moving, it's on the tip of everybody's
  • 01:41:05
    tongue as a future opportunity. Uh And then the last
  • 01:41:09
    thing I would just say is um Congress, you know, the
  • 01:41:13
    House of Representatives passed the Atomic Energy Advancement
  • 01:41:16
    Act, HR6544. Which um fixes some of the challenges of
  • 01:41:21
    the Nuclear Regulatory Commission. And then last week
  • 01:41:24
    the Nuclear Regulatory Commission uh uh approved uh
  • 01:41:28
    no, no, no directed the staff to promulgate a rule
  • 01:41:30
    on what's called part 53 which is the new licensing
  • 01:41:34
    effort for small modular reactors. So they are moving
  • 01:41:38
    as well. These things are really important to get done
  • 01:41:40
    before reactor could get cited in the state, but it's
  • 01:41:43
    showing certainty and it's showing direction that these
  • 01:41:46
    are uh desired facilities going forward. A lot of work
  • 01:41:50
    going on and, and a lot of work to get your report
  • 01:41:53
    finished by, by December of this year. And let me just
  • 01:41:56
    say one last thing. And that's thank you. Thank you
  • 01:41:58
    to V.A. For, for spearheading and, and corralling this.
  • 01:42:02
    Um UT has also been um a, a lifesaver. They have developed
  • 01:42:07
    um teams, web pages, they have developed spreadsheets
  • 01:42:12
    they've developed uh all sorts of things which is uh
  • 01:42:15
    really, really beneficial for organization. And I really
  • 01:42:18
    appreciate the efforts of the folks at UT.
  • 01:42:23
    Thanks for the update. That's, I'm sorry, that's the
  • 01:42:25
    University of Texas, the University of Texas. Yeah
  • 01:42:27
    that's right. We, we didn't have to go over it. It's
  • 01:42:29
    all right. It's a good baseball game this week. That
  • 01:42:31
    the Longhorns hosted the Aggies for. 12 and 0, TCU
  • 01:42:35
    is that right?
  • 01:42:37
    So, I don't have anything, by the way. A&M is
  • 01:42:41
    uh, is a leader in the state as well on nuclear. And
  • 01:42:44
    actually may be moving out on some things even quicker
  • 01:42:48
    than, than the University of Texas. We don't settle
  • 01:42:50
    until we're the leader
  • 01:42:53
    and even then we really don't settle.
  • Item 40 - Chairman Gleeson opens up item for update from Interim Executive Director
    01:42:57
    I don't have anything on the rest of the agenda until
  • 01:42:59
    we get to Item 41 an update from our Executive Interim
  • 01:43:03
    Executive Director, Connie. Thank you Commissioners.
  • 01:43:08
    Um This is a brief but important update. Um I'm delighted
  • 01:43:12
    to inform you that beginning, March 1st, we established
  • 01:43:17
    our new energy efficiency division um by the hiring
  • 01:43:21
    of a director. And that director um has been promoted
  • 01:43:28
    from within um it will be Ramya Ramaswami leading our
  • 01:43:33
    energy efficiency effort.
  • 01:43:39
    And um she will be of course being transitioning
  • 01:43:45
    from her market analysis duties and, and mentoring
  • 01:43:48
    some folks who we hope to be on boarding there in the
  • 01:43:52
    near future. So um please have patience and grace
  • 01:43:57
    as we make that transition. Congratulations Ramya and
  • 01:44:02
    I I'm sure you'll still probably be pulling double
  • 01:44:04
    duty. I I don't think Harkia is just gonna let you go
  • 01:44:07
    to another division that easily. So yeah, I would
  • 01:44:10
    say totally bittersweet. She's helping us on, helped
  • 01:44:13
    us in my office on so many different things and uh
  • 01:44:15
    in such a professional way. I think energy efficiency
  • 01:44:18
    will be um uh the bar will be raised as a result
  • 01:44:21
    of it, but you're not going to get away from us. That's
  • 01:44:23
    for sure.
  • 01:44:26
    Yeah. So excited that she's coming to the group to
  • 01:44:29
    be a leader and, uh, she's already a leader in our
  • 01:44:31
    heart and uh, in the agency. And so looking forward
  • 01:44:35
    to working with you. Congratulations Ramya, well deserved.
  • 01:44:40
    All right. I don't have anything on 42 or 43 and we
  • Item 44 - Chairman Gleeson adjourns meeting
    01:44:43
    do not have Closed Session today. So this meeting of
  • 01:44:46
    the Public Utility Commission is adjourned.

Help Desk