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  • 00:00:07
    This meeting of the Public Utility Commission of Texas will come to order to consider
  • 00:00:10
    matters that have been duly posted with the secretary of state for today,
  • 00:00:14
    July 11, 2024. Good morning,
  • 00:00:17
    everybody. Good morning, Sheila. Connie Barksdale.
  • 00:00:20
    So we're going to do things a little different.
  • 00:00:24
    We're going to take up item a first,
  • 00:00:27
    but then we're going to take up item 19 after that.
  • 00:00:31
    And we're also going to break at 1130.
  • 00:00:34
    We have to go into closed session. So we're going to break at 1130 for
  • 00:00:38
    that and most likely come back, adjourn closed session,
  • 00:00:42
    then recess the public meeting until 01:00 I think this will be a
  • 00:00:45
    longer open meeting. So we'll come back at one, assuming we get there
  • 00:00:49
    first order of business, as you all can count.
  • 00:00:52
    12345. So,
  • 00:00:55
    Commissioner Yaltman, welcome.
  • 00:00:58
    It's already on. Thank you. We had to practice his counting
  • 00:01:02
    in the hallway. By the way,
  • 00:01:05
    he is an aggie. He is. He kept skipping
  • 00:01:09
    a number. So excited to be here. Thank you,
  • 00:01:12
    Courtney. We're excited to have you here. So first up, we, you know,
  • 00:01:16
    we're going to call up item a, which is a review of ERCOT.
  • 00:01:20
    And, Connie, I'll have you lay out your memo first. But, you know, again,
  • 00:01:23
    for everybody, as everyone knows, you know, this area of Texas,
  • 00:01:26
    and Texas is dealing with a lot, you know, human tragedy, human loss and property
  • 00:01:31
    loss as well. You know, I talked to the governor's office.
  • 00:01:34
    I've talked to lieutenant governor. You know, we're going to figure
  • 00:01:38
    this out. You'll hear from all the utilities this morning.
  • 00:01:41
    They'll lay out what they have gone through and their efforts
  • 00:01:45
    to assess and restore their systems. We'll ask them questions.
  • 00:01:48
    But I want to assure everybody this will be the first step in this process,
  • 00:01:52
    not the last step. And we will probably end up
  • 00:01:55
    filing a report as we head into the legislative session about
  • 00:01:59
    our learnings and potentially some legislative solutions that we may need.
  • 00:02:03
    So with that, Connie, unless anyone else would like to
  • 00:02:06
    say anything. All right, Connie,
  • 00:02:10
    would you like to lay out your memo? Good morning, chairman and commander.
  • 00:02:13
    Commissioners. First, for those who are interested
  • 00:02:17
    in following along some of the discussions today,
  • 00:02:20
    items related to Hurricane ERCOT are filed in project number 56793.
  • 00:02:26
    Centerpoint filed their presentation last night,
  • 00:02:29
    and it's available to view online as they give it in just a
  • 00:02:33
    few minutes. Also in that project yesterday,
  • 00:02:37
    I filed a memo advising impacted utilities that staff
  • 00:02:41
    intends to exercise limited enforcement discretion on certain
  • 00:02:44
    administrative rules and deadlines so that the utilities
  • 00:02:48
    can focus on service restoration. The discretion
  • 00:02:51
    applies to the prescribed timelines for certain routine matters,
  • 00:02:55
    such as deadlines for filing reports and responding to new
  • 00:02:59
    requests for new service. The enforcement discretion applies
  • 00:03:03
    through July 26, as specified in the memo,
  • 00:03:06
    and list the rules to which it applies. Again,
  • 00:03:09
    the purpose of this is to ensure restoration efforts take precedence over routine
  • 00:03:13
    matters inconsistent with what we've done historically in similar
  • 00:03:17
    situations. That is correct. Any questions for
  • 00:03:20
    Connie? Okay. Then we'll go
  • 00:03:24
    ahead and start calling up the utilities. So first we're going to hear from AEP.
  • 00:03:39
    Good morning, Chad. Good morning.
  • Item A - Chad Burnett, AEP Texas, Beryl Efforts, 56937
    00:03:44
    SSo I think you know my name is Chad Burnett. I'm the vice president of
  • 00:03:47
    regulatory and finance for AP Texas. I am
  • 00:03:51
    excited to come here today to share with you an
  • 00:03:54
    update on our storm recovery efforts and the preparations that we made in anticipation
  • 00:03:59
    of Hurricane barrel. As you know, AP Texas has
  • 00:04:03
    the greatest coastal exposure of any utility in the state of Texas.
  • 00:04:06
    Our footprint goes all the way down to Brownsville,
  • 00:04:10
    basically at the southern tip of the Rio Grande Valley, all the way up to
  • 00:04:14
    Bay City El Campo area, which is just southwest of Houston.
  • 00:04:18
    And so, you know, what was unique about barrel is the fact
  • 00:04:21
    that it posed a threat to our entire coastal service
  • 00:04:25
    territory as it changed course throughout its development.
  • 00:04:29
    So before I talk about how our storm recovery progress is going, I'd like to
  • 00:04:32
    start by giving you a timeline of the preparations that we
  • 00:04:36
    did going into this. So before every hurricane season,
  • 00:04:39
    we do hurricane drills with our staff to
  • 00:04:43
    make sure that they're prepared for the season. And we did that this year on
  • 00:04:46
    April 23. And again, that was an opportunity
  • 00:04:49
    for everybody to kind of practice what it would be like during a catastrophic event,
  • 00:04:54
    to be ready to coordinate and all of those things.
  • 00:04:57
    But coming back to Barrel, starting on Wednesday, July 3,
  • 00:05:01
    which was five days before landfall, we initiated
  • 00:05:04
    the level one incident command system in accordance with the FEMA
  • 00:05:08
    national Incident management system guidelines.
  • 00:05:12
    Anticipating that bear would make landfall somewhere on our coast, we alerted
  • 00:05:16
    the commission as well as our community leaders that we had initiated this structure and
  • 00:05:20
    began making preparations for what would be the first hurricane of the 2024
  • 00:05:24
    season on Friday, July 5, three days before landfall.
  • 00:05:29
    The weather projection was assuming that barrel would make landfall near
  • 00:05:33
    the Brownsville area, and we started making preparations
  • 00:05:37
    for that. And so we did some estimations,
  • 00:05:40
    assuming what kind of damage we would take, what it would take
  • 00:05:43
    resources to restore power, get equipment back in store.
  • 00:05:47
    And we were planning for, again, three days before we
  • 00:05:51
    were assuming it was going to hit down in the valley area.
  • 00:05:55
    At this point, we also started coordinating with our state and local emergency operations centers
  • 00:05:59
    and working with our community leaders to ensure that we had the
  • 00:06:02
    latest list of cooling centers and critical care facilities to help prioritize
  • 00:06:06
    our restoration efforts. By Saturday,
  • 00:06:10
    which was two days before landfall, the weather projections had shifted
  • 00:06:13
    and barrel was now expected to make landfall just north of Corpus Christi,
  • 00:06:18
    still impacting the rest of our Laredo and RGV districts.
  • 00:06:22
    By this time, we had secured approximately 4500 resources,
  • 00:06:26
    or about 1200 crews that would be coming in from Ohio,
  • 00:06:29
    Indiana, Michigan, Oklahoma, Arkansas, Louisiana and across
  • 00:06:33
    the state of Texas to help. By Sunday morning,
  • 00:06:37
    one day before landfall, the weather projections had once again changed,
  • 00:06:41
    and this time it shifted, and it looked like barrel was going to make landfall
  • 00:06:44
    somewhere between Palacios and Matagora in
  • 00:06:48
    our northern Corpus Christi district. By this time, we had already established a gateway
  • 00:06:52
    center at the regional fairgrounds in Robstown and had checked in
  • 00:06:56
    approximately 2700 personnel that had come in
  • 00:06:59
    to help work the storm. When Hurricane barrel
  • 00:07:02
    finally made landfall Monday morning, we had approximately 35,000
  • 00:07:07
    customers out of service who had lost power,
  • 00:07:10
    and the biggest impacts were near Bay City, Palacios and El Campo.
  • 00:07:14
    I'm happy to report to you that as of this morning,
  • 00:07:18
    we now have 94% of our customers restored and
  • 00:07:23
    we're still working today and throughout until we get power restored to
  • 00:07:26
    everybody. Now, earlier this week, I had the opportunity to
  • 00:07:30
    tour the damage in the communities of Palacios, Bay City and El Campo,
  • 00:07:34
    and to visit the mobile command centers that we set up in the Bay City
  • 00:07:37
    Fairgrounds and the El Campo service center. I was shocked
  • 00:07:40
    by some of the damage that I had seen, but I was impressed by the
  • 00:07:44
    restoration operations that were taking place. I saw sections
  • 00:07:48
    of lines with poles snapped in, two lines on the
  • 00:07:51
    ground, and evidence of flooding. I also saw roofs damaged,
  • 00:07:55
    signs destroyed, and significant tree debris.
  • 00:07:58
    But one thing that caught my eye was the fact that even in the midst
  • 00:08:01
    of all of that, there were several lines that had recently been reconstructed
  • 00:08:05
    using our modern design standards that were still intact and
  • 00:08:09
    appeared to have weathered the storm just fine.
  • 00:08:12
    And this is a preview of what you will see in our upcoming resiliency plan
  • 00:08:15
    filing, because it really does show that some of the newer designs that we're seeing
  • 00:08:19
    coming out can make a difference in making the system more resilient.
  • 00:08:24
    At the staging center in Bay City, I also saw a steady
  • 00:08:28
    stream of trucks and crews coming in to pick up poles,
  • 00:08:30
    materials and supplies needed for their assignments before heading back out
  • 00:08:34
    to the field. I saw coordination and collaboration between
  • 00:08:38
    the service crews, assessment teams, construction crews and
  • 00:08:41
    vegetation crews with a clear focus on one mission,
  • 00:08:45
    which is to restore power as quickly and safely as possible.
  • 00:08:49
    This occurred despite the communication challenges that they
  • 00:08:52
    encountered due to poor cellular service in the area. So before I
  • 00:08:56
    close, I just wanted to share with you one story that happened during our restoration
  • 00:09:00
    operations that I hope will stick with you. I know as commissioners you will
  • 00:09:03
    likely hear everything that goes wrong in a storm restoration event.
  • 00:09:07
    I think it's important to balance that with a story of something that went right.
  • 00:09:12
    So on Monday, after barrel hit, we learned that the city of El Campo's
  • 00:09:15
    water treatment center, as well as their hospital had lost power from
  • 00:09:20
    the storm. AP Texas crews worked well into the night and
  • 00:09:24
    were able to restore power to both locations before there was a loss of water
  • 00:09:28
    pressure in the town or any backup issues from their sewage system.
  • 00:09:32
    After finishing that job around 10:00 p.m. the crew still
  • 00:09:35
    had to drive nearly 2 hours back to Corpus for their hotel because there
  • 00:09:39
    wasn't any available lodging near that site.
  • 00:09:43
    So on Tuesday morning's EOC call, the city manager and
  • 00:09:46
    the public works director shared their great appreciation for our line workers
  • 00:09:50
    late night efforts which allowed them to avoid having to pay for
  • 00:09:54
    a temporary generator that would have needed had they not been restored
  • 00:09:58
    by Tuesday afternoon. Municipal Judge Michelle Roy reached out
  • 00:10:01
    and asked if they could provide a lunch to our line workers
  • 00:10:06
    to show their appreciation. So yesterday, the local
  • 00:10:09
    Rotary club and approximately 3000
  • 00:10:13
    citizens arranged a lunch to serve 300 line workers
  • 00:10:17
    on national line Worker Appreciation Day.
  • 00:10:21
    One quote I wanted to share, El Campo City manager Courtney
  • 00:10:24
    Sladek said, I can't give enough props to your linemen for cranking it
  • 00:10:27
    out today. AEP's response to the storm was very much appreciated
  • 00:10:31
    and there are pictures and videos of this event on our social media accounts.
  • 00:10:36
    And it's stories like this that remind us of the dedication and commitment that our
  • 00:10:39
    line crews make every single day despite working in these dangerous conditions.
  • 00:10:44
    So overall, I am so proud of the team and the efforts that went
  • 00:10:48
    into restoring electricity to our communities and our customers.
  • 00:10:51
    We were fortunate this time. Barrel just clipped the northern
  • 00:10:55
    part of our service territory, but again, we were under threat for
  • 00:10:58
    the entire coastline. So even though we were lucky
  • 00:11:02
    with this storm, I want to leave you with the message that we were prepared.
  • 00:11:05
    We had made a lot of preparations before the
  • 00:11:08
    event even happened, and that's due to the large efforts
  • 00:11:11
    of our planning and logistics team. So with that, I want
  • 00:11:15
    to thank you for giving me the opportunity to share that and happy to take
  • 00:11:18
    any questions you might have. Thank you, Chad. Commissioners questions
  • Item A - Commissioner's Questions to Chad Burnet, AEP TEXAS, Beryl, 56793
    00:11:22
    Chad, you mentioned that 94% have already been restored. How many
  • 00:11:25
    customers are left that are without power.
  • 00:11:28
    It's, it's just over 2000 customers are left without power
  • 00:11:32
    right now. Okay. When, when do you expect to have them restored? We have an
  • 00:11:35
    ETR. We're shooting for the, by the end of the day we'll have 95%.
  • 00:11:39
    There may still be some 95%, I guess, of all the customers that
  • 00:11:42
    can take power. We hope that will happen today, but there may still
  • 00:11:46
    be a little bit of cleanup that our crews will stick around afterwards. Thank you.
  • 00:11:53
    In a look back,
  • 00:11:57
    will you all be able to tell us what
  • 00:12:00
    types of polls you had problems with? We're going to get into this
  • 00:12:04
    discussion with resiliency a lot more again and again.
  • 00:12:07
    Is it spun concrete poles? Is it composite
  • 00:12:11
    structures? I think it would be good for us to
  • 00:12:14
    know that if we are going to continue to have problems with wood poles along
  • 00:12:18
    the coast or in these hurricane prone areas. You know what the cost differential
  • 00:12:22
    is, what the resiliency story is to get polls that
  • 00:12:26
    you don't have to put up every single time. So as you all are
  • 00:12:29
    going through that post analysis, will you make sure that
  • 00:12:32
    you let us know and let the staff know on our project the types of
  • 00:12:36
    poles that you're seeing damaged and the voltages of those.
  • 00:12:39
    Yeah, we'll be happy to do that. I'll tell you that just real quickly.
  • 00:12:42
    What we're learning is that by putting in our new standards, have bigger poles,
  • 00:12:46
    obviously, and putting them closer together. But like you said, there's a material component
  • 00:12:50
    to that as well. And all of that we'll certainly be happy to share with
  • 00:12:52
    you and will be included in our resiliency plan filing. One other
  • 00:12:56
    thing, and that is when you all were preparing on Friday and
  • 00:13:00
    Saturday, you said you had crews coming in from all of these other states.
  • 00:13:03
    Were those primarily AEP companies that were providing that
  • 00:13:08
    mutual assistance? It was not only AEP. We did pull a
  • 00:13:11
    lot from the AEP, but we used a lot of business partners across the mutual
  • 00:13:15
    systems system. And I know there were a lot of business partners that came in
  • 00:13:18
    from other parts as well. And I just want to point out, I mean,
  • 00:13:22
    mutual assistance is an imperfect but
  • 00:13:26
    very, very well oiled machine, the way
  • 00:13:30
    it works across these systems. And somehow
  • 00:13:34
    it just, it kind of happens. The people that know how to deal with mutual
  • 00:13:37
    assistance, actually it works. I went out to one
  • 00:13:40
    of our center points, mutual assistance centers, and they were
  • 00:13:44
    just getting set up. But there's a
  • 00:13:48
    reason for everything, and the reason is how
  • 00:13:51
    do you get people in? How do you get them lined up? How do you
  • 00:13:54
    get them safety procedures, how do you get them assigned to teams?
  • 00:13:57
    How do you get them fed? How do you get them sleeping
  • 00:14:02
    per OSHA rules? And then how do you get them out?
  • 00:14:05
    And it may be at some
  • 00:14:09
    point in time again in this process, good to have EEI
  • 00:14:13
    or the utilities come in and really explain how that is
  • 00:14:16
    driven. Give the staff a good understanding of that because it's
  • 00:14:22
    hard to do, it's hard to plan, but when it happens, it's pretty
  • 00:14:26
    amazing. And I
  • 00:14:29
    spent many, I had many text messages with Judith,
  • 00:14:33
    and they were great. She was great on giving us information there.
  • 00:14:37
    So thank you. Thanks.
  • 00:14:41
    Just a quick question on materials and supplies.
  • 00:14:44
    You know, we've seen that that's been an issue just across the
  • 00:14:48
    system in terms of infrastructure maintenance and development.
  • 00:14:51
    So any issues with getting the supplies in
  • 00:14:55
    order to affect the restoration?
  • 00:14:58
    We didn't with our storm, and I should have said this earlier, when we do
  • 00:15:02
    getting into hurricane season, our procurement folks build up an
  • 00:15:05
    inventory anticipation of our storm needs. And so
  • 00:15:09
    we had kind of built up, you know, a material supply
  • 00:15:13
    inventory already. But yeah, through this storm, we had enough
  • 00:15:16
    of what we needed to be able to restore. And again,
  • 00:15:20
    candidly, we got lucky that we only had a portion of our service territory
  • 00:15:23
    that were, that was exposed by this. But we did have the
  • 00:15:27
    materials we needed. One question, and it's
  • 00:15:30
    one I'll ask, of all the utilities coming forth, you mentioned
  • 00:15:33
    the water treatment center, and I know those are definitely on your list of critical.
  • 00:15:37
    Do you have water districts in your service area?
  • 00:15:40
    Yes, and we were coordinating with those as well. That was one of
  • 00:15:43
    the first things we do, you know, making sure that we've got, you know,
  • 00:15:46
    our local contacts with the local community. So you have an accurate list of what
  • 00:15:50
    those are? Yeah, our community affairs managers are actively
  • 00:15:53
    at keeping that updated. Thank you, Thomas.
  • 00:15:57
    I would just ask one other thing, and that is as all the utilities that
  • 00:16:01
    talk, and that is as staff is working
  • 00:16:05
    on our next project on this for
  • 00:16:08
    the utilities who really give us an idea, I hope we can get
  • 00:16:12
    this from cities and munis and co ops as well.
  • 00:16:15
    But how many of the fallen
  • 00:16:18
    trees were in the right of way and how many were outside the right of
  • 00:16:21
    way? It's going to be really important for us to understand that and the
  • 00:16:25
    effectiveness of vegetation management,
  • 00:16:29
    these plans, and if we can actually do anything about some of
  • 00:16:32
    those trees. I think I was astonished in Houston about the
  • 00:16:36
    number of large trees that were pulled up by the root ball as
  • 00:16:40
    opposed to broken at the top. And it
  • 00:16:43
    was, it's just pretty amazing. These are, you know, these aren't ones that
  • 00:16:47
    just require chainsaws. You know, you have to have cranes to get them out of
  • 00:16:51
    the road. And so it's kind of a different kind of storm from my
  • 00:16:54
    perspective. Absolutely. And I think, you know,
  • 00:16:57
    as we talk about kind of the next phase of our review and
  • 00:17:01
    assessment of everyone, we'll cast a wide net initially. You know, we got
  • 00:17:04
    to figure out what went wrong, what can be improved. And a lot of that's
  • 00:17:07
    going to be talking to folks who do this well, both in the state
  • 00:17:11
    and out of the state because I'm sure there are other places,
  • 00:17:14
    you know, there are other places Florida that deals with this a lot and,
  • 00:17:18
    you know, we can probably learn a lot from, from other places as well.
  • 00:17:21
    Thank you, Chad. Thanks. All right,
  • 00:17:25
    TNMP, do you want me to bring that up right now? What's that?
  • 00:17:28
    Florida. Florida. Yeah. So just, I had
  • 00:17:32
    put a, for everybody in the audience, I had put a
  • 00:17:35
    PowerPoint presentation that FPL had given me about resiliency
  • 00:17:39
    on their system. They started in 2024
  • 00:17:45
    or 25, five after they had
  • 00:17:48
    26, after they had four. They had two category four
  • 00:17:52
    hurricanes. And this is not
  • 00:17:55
    an inexpensive and it's not a short term fix
  • 00:17:59
    on the system, but resiliency works. And,
  • 00:18:03
    you know, this has some significant
  • 00:18:07
    reductions in the time and
  • 00:18:11
    expense to get systems back up if you harden them the correct way, if you
  • 00:18:14
    put in the right poles in the right places, spacing different
  • 00:18:18
    types of poles other than just wood poles, I think it would be great to
  • 00:18:21
    have them at least part of our discussion. But this was something that I
  • 00:18:25
    had had for months and was going to
  • 00:18:29
    share it with you all during our resiliency discussion. But clearly
  • 00:18:32
    that's here. Definitely. And I'm sure there are things that work there
  • 00:18:36
    that maybe wouldn't work here. We'll find a Texas solution, obviously. But, yeah, we can
  • 00:18:39
    learn a lot from other places and further, too, I guess the, the presentation that
  • 00:18:43
    you gave everybody, and I think a point that's well made is,
  • 00:18:47
    you know, they're reporting that along with better hurricane performance, their investments
  • 00:18:51
    improve their daily reliability and they're staying here by over 40%.
  • 00:18:56
    So shoring up the system in anticipation that
  • 00:19:00
    management of risk for that critical
  • 00:19:03
    event that you're trying to pay for that worst case scenario also
  • 00:19:07
    helps shore up your ongoing reliability, which is something we
  • 00:19:10
    can always use. Very good point.
  • Item A - Stacy Whitehurst, TNMP, Beryl Efforts, 56793
    00:19:14
    Good morning, Stacy. Good morning. Thank you. For the record, my name is Stacey Whitehurst.
  • 00:19:17
    I'm the vice president of regulatory affairs for TNP.
  • 00:19:20
    Good morning. Chairman, commissioners and congratulations on your appointment.
  • 00:19:25
    First of all, our hearts and prayers go out to all Texans that have been
  • 00:19:28
    impacted by Hurricane Barrel. I wish to outline our preparedness and restoration
  • 00:19:32
    efforts during this challenging time leading
  • 00:19:36
    up to Hurricane Barrel. TNP took comprehensive steps to prepare for potential
  • 00:19:39
    impacts, including having our hurricane drill in May.
  • 00:19:44
    TNP subscribes to an advanced weather analytics service that provides
  • 00:19:47
    weather analysis on potential weather events that could impact our service territory.
  • 00:19:52
    We received notifications when a tropical disturbance is identified
  • 00:19:55
    in the Caribbean, Gulf of Mexico or the Atlantic Ocean and we received one
  • 00:19:59
    for when Barrel was just a disturbance. We closely monitor
  • 00:20:03
    the weather forecast and the development of Hurricane Barrel.
  • 00:20:06
    In addition, TNP participated in the early situational weather call
  • 00:20:09
    set up by the Texas Department of Energy Management to ensure readiness
  • 00:20:17
    after the tietum call on Friday, TNP activated its
  • 00:20:21
    emergency operations plan on Saturday.
  • 00:20:24
    In addition to our Gulf coast area employees, we had arranged for additional transmission
  • 00:20:28
    and distribution line crews to be deployed on
  • 00:20:32
    Sunday afternoon. Furthermore,
  • 00:20:36
    as vegetation management crews were staged strategically within our service territory
  • 00:20:40
    as part of our preparedness strategy, we began mobilizing internal resources
  • 00:20:44
    from other service areas and had additional contractor crews on standby
  • 00:20:48
    expecting Hurricane Barrel to intensify or shift closer to our service
  • 00:20:52
    territory. While initial projections in the previous
  • 00:20:56
    week had Hurricane Barrel making landfall further south, Hurricane Barrel
  • 00:21:00
    may landfall in Matagora Hurricane Barrel's path moved towards TNP
  • 00:21:04
    service territory. TNP's service territory is approximately 23
  • 00:21:08
    miles from where Barrel made landfall, but swiftly turned to our service
  • 00:21:11
    territory, hitting the Sweeney in west Columbia areas and
  • 00:21:15
    then moving northeasterly through Angleton, Dixonson and Texas
  • 00:21:18
    City area. Once the wind speeds dropped to a level that
  • 00:21:22
    allowed damage assessments to begin, TNP mobilized
  • 00:21:25
    to assess damages and initiate restoration efforts.
  • 00:21:28
    Our dedicated crews are working tirelessly under difficult conditions to
  • 00:21:32
    restore power as quickly and safely as possible.
  • 00:21:36
    We deploy resources strategically to address critical infrastructure needs
  • 00:21:39
    and prioritize restoration in affected areas. We had a peak
  • 00:21:43
    customer outage of approximately 116,000 customers on Monday.
  • 00:21:47
    We had eight transmission outages and had all but two restored
  • 00:21:50
    on Tuesday, with the remaining two restored on Wednesday.
  • 00:21:54
    The number of restoration workers that were on site were as follow. We had
  • 00:21:59
    74 internal T and P linemen. We brought
  • 00:22:02
    in 192 contract linemen and
  • 00:22:06
    had 250 mutual assistant linemen
  • 00:22:10
    contracted VM workers. We brought in 176
  • 00:22:14
    contracted VM and mutual assistant VM
  • 00:22:17
    102 contract damage
  • 00:22:21
    assessors. We had 50 of those
  • 00:22:25
    and we had internal damage assessors of 20 and
  • 00:22:28
    we had used drone to help
  • 00:22:32
    survey the area. We continue to add additional
  • 00:22:35
    vegetation management and alignment over the last two days we've added an additional 120
  • 00:22:40
    vegetation management ftes and we've seen that significant number
  • 00:22:43
    of the damages were caused by falling and uprooted trees that have
  • 00:22:47
    been brought down our infrastructure,
  • 00:22:50
    broken and down poles, broken cost arms and down conductor.
  • 00:22:54
    We are able to start repair the work but
  • 00:22:58
    the vegetation management must be cleared out first.
  • 00:23:02
    We have approximately 57,000 customers being reported out
  • 00:23:05
    on our website. We are having to mainly close outage tickets in
  • 00:23:09
    our AMS when received from outside assistance. We have
  • 00:23:12
    been analyzing our AMS meter data and based on that data
  • 00:23:15
    we can tell you that we have 75% of the customers
  • 00:23:19
    with power to the meter. This morning. TNP is able to
  • 00:23:23
    communicate with the meter and has been able to retrieve nightly interval data.
  • 00:23:28
    Our main staging area is in Texas City at the Tanger mall with
  • 00:23:31
    multiple material being staged throughout our service territory.
  • 00:23:39
    TNP restorations are going on 24 hours a day with
  • 00:23:42
    crews working 16 hours shifts. We continue to
  • 00:23:46
    provide update on social media and our website.
  • 00:23:49
    Customers can contact us through our IVR, talk to an
  • 00:23:53
    agent, report an outage through tnp.com dot.
  • 00:23:55
    Once we determined that there were external phone service issues throughout
  • 00:24:00
    our service territory make it impossible for customers to call
  • 00:24:03
    TNP directly and report through our IVR, we determined that
  • 00:24:07
    customers could email us TMP, set up a new email address hurricanemp.com
  • 00:24:12
    and posted this on social media and notify local officials
  • 00:24:16
    of this TNP is providing regular updates on
  • 00:24:20
    the tedium calls, provided updates to state local leaders,
  • 00:24:24
    including having someone staffed at the state operations center.
  • 00:24:28
    We understand that the restoration efforts affect our retail electric providers
  • 00:24:31
    as well. We have provided the following information to our retail providers.
  • 00:24:36
    We have stopped disconnects for nonpayment in the Gulf coast at this time.
  • 00:24:40
    For non AMS service orders we continue to complete
  • 00:24:43
    in our Gulf coast service territory where safety is not an issue.
  • 00:24:48
    For AMS service orders, we're trying to complete all AMS
  • 00:24:51
    service orders in our Gulf coast service area.
  • 00:24:55
    All service orders that do not complete through this automated automated
  • 00:24:58
    system will be dispatched to the field and complete if technicians are able
  • 00:25:02
    to access the area and completely work and complete the
  • 00:25:05
    work safely. For billing and usage.
  • 00:25:10
    TMP has been is attempting to generate billing and usage transactions
  • 00:25:14
    and files for all the AMSI easy
  • 00:25:17
    ids in our Gulf coast area. If actual data is not available,
  • 00:25:21
    we are we are estimating where available
  • 00:25:25
    when we know we use our outage information to prevent
  • 00:25:29
    normal estimation and generating files and when we
  • 00:25:32
    generate those files, we're actually inserting zero
  • 00:25:36
    readings in those 15 minutes intervals.
  • 00:25:40
    We will attempt to obtain actual data and send replacement files if and
  • 00:25:44
    when it becomes available. We know that our customers
  • 00:25:47
    want and need their power back on as soon we understand
  • 00:25:51
    their frustrations. Our employees are some of these same customers
  • 00:25:56
    that have no power. Our goal is to have the bulk of the customers
  • 00:25:59
    up this weekend, but understand areas with significant
  • 00:26:03
    damage may go into next week. We are constantly
  • 00:26:07
    discussing real time needs with our field supervisors and making sure the needs for
  • 00:26:11
    additional resources, materials or other needs are being addressed as a top
  • 00:26:14
    priority. The restoration and leadership team is in constant communication
  • 00:26:18
    with each other and are in the Gulf coast right now. TMP is
  • 00:26:21
    working hard to get everyone restored as soon as possible. I want
  • 00:26:25
    to thank all the men and women at TNP, our mutual assistant partners and
  • 00:26:29
    contractors that are assisting. I appreciate the opportunity to talk to
  • 00:26:32
    you and open for questions. Thank you, (item:A: Commissioner's Questions to Stacy Whitehurst, AEP Texas, Beryl, 56793)
  • 00:26:35
    Stacey. Something that caught my attention. So you were talking about crews generally,
  • 00:26:39
    but then you talked about vegetation management crews. So I think that's an
  • 00:26:42
    important point. So when you send crews out,
  • 00:26:45
    that's not like a crew of different folks
  • 00:26:49
    that can address different issues. That's why the assessment phase is so important,
  • 00:26:52
    because you have to assess the situation first, what needs to be addressed so
  • 00:26:56
    you can send the proper type of crew to address that issue. That's correct.
  • 00:26:59
    I know there's frustration that people will see our linemen on the
  • 00:27:03
    side of the road and just in their vehicles, but the problem is
  • 00:27:07
    they're having to wait for our vegetation management to clear all the
  • 00:27:10
    trees that are maybe in the road or causing
  • 00:27:14
    issues that they can't, that keeps them from going into and,
  • 00:27:18
    you know, setting new poles, setting fixing cross arms,
  • 00:27:22
    or pulling conductor. Did the assessment
  • 00:27:25
    phase this time take about as much as it typically does
  • 00:27:29
    historically? Did something cause it to take longer? It was about
  • 00:27:33
    the same time. The problem was, is the amount
  • 00:27:37
    of vegetation, uprooted trees was a lot
  • 00:27:42
    more than we expected. With these types of winds,
  • 00:27:46
    you know, with all the weather that's been down there between freezes and,
  • 00:27:50
    you know, pinchot, drought and heavy rains, some of these
  • 00:27:54
    shallow rooted trees that are very large just kind
  • 00:27:58
    of tumbled over into our service territory and trying to
  • 00:28:01
    understand from our vegetation guys, how long it takes
  • 00:28:05
    to actually cut some of these large trees to make path is
  • 00:28:09
    hard to estimate. Thank you, commissioners. That might be
  • 00:28:12
    good to ask the Forest Service for a little help in understanding that a little
  • 00:28:15
    bit more. So, Stacey, you said that
  • 00:28:19
    75% of your customers are restored today. Yes,
  • 00:28:22
    ma'am. So how many customers are out and how
  • 00:28:25
    many will be restored by this weekend and how many will be left till next
  • 00:28:29
    weekend? So we have 30,000 that are still out and
  • 00:28:33
    working on trying to get the final numbers
  • 00:28:37
    on when those customers can be out. But we're expecting,
  • 00:28:41
    we're bringing additional crews and we're trying to get the majority of those back
  • 00:28:44
    on this weekend with some left to next weekend.
  • 00:28:48
    So for the customers that are left to next week that
  • 00:28:52
    can't be restored, what are, like, the general reasons
  • 00:28:56
    why they can't be restored till next week?
  • 00:28:59
    So we have extensive damage on our backbone
  • 00:29:02
    of our primary. Our primary distribution system, where we've had a significant
  • 00:29:06
    number of poles that we're having to clear trees
  • 00:29:10
    from. Then we've had issues. We're trying to get line spotters,
  • 00:29:15
    the mark line, so when we go replace poles, we're not hitting
  • 00:29:19
    natural gas lines or. Or telephone cables and stuff like that.
  • 00:29:22
    And so obviously, there's a significant need for line spotting
  • 00:29:26
    and marking right now. Yeah. Is there a way,
  • 00:29:29
    or have you all been communicating with those
  • 00:29:33
    customers that they may be out till next week? We're looking
  • 00:29:36
    at trying to get that accomplished right now.
  • 00:29:39
    Okay. Again, and I didn't
  • 00:29:42
    ask this of Chad with AEP, but y'all, do you all have mobile
  • 00:29:48
    DG? We do not have mobile generation. We're waiting for the roles
  • 00:29:52
    to be final. Yeah, that was my understanding. But I would be interested in knowing
  • 00:29:57
    for the utilities that do have mobile DG,
  • 00:29:59
    how many they have and how many they've deployed and where.
  • 00:30:03
    Thank you. We know Centerpoint has mobile general, so I'm
  • 00:30:07
    sure we can cover that with them. Yes.
  • 00:30:10
    Commissioners, the same question. Do y'all have the water
  • 00:30:13
    districts in your area or no? We do. And as part of
  • 00:30:16
    our EOP, we identify critical loads,
  • 00:30:19
    and that does include water and
  • 00:30:24
    wastewater. And obviously, we do serve some of those customers at
  • 00:30:27
    the distribution and transmission level, so those are prioritized.
  • 00:30:35
    So same question. Any problem getting any kind of materials and
  • 00:30:38
    do you have a system? We have an integrated material supplier
  • 00:30:43
    named Irby, and they work very closely, making sure that we
  • 00:30:46
    have access to all the additional materials that we need.
  • 00:30:50
    And they're providing deliveries on a
  • 00:30:53
    constant basis throughout our service territory or our staging areas for our materials.
  • 00:30:57
    Staging areas. So not really waiting on materials either because
  • 00:31:01
    of the delivery or the system in terms of identifying
  • 00:31:04
    where it is or actually getting the. That's correct. Basically kind
  • 00:31:08
    of what, as AEP said, during getting ready for this
  • 00:31:11
    type of season, we do increase our material supply
  • 00:31:15
    stock so that we're ready. Obviously, there are certain
  • 00:31:18
    items that take a little longer to get that we try to such a transformers
  • 00:31:23
    that we try to go ahead and have as many as we can because
  • 00:31:27
    it's obviously a hard time to get during transformers and things like that
  • 00:31:31
    in certain materials when all the utilities are trying to get the
  • 00:31:34
    same material at the exact same time.
  • 00:31:40
    Thank you, Stacey. Thank you. We'll call up entergy.
  • 00:31:58
    Morning, Ellie. It's been requested that I put the,
  • 00:32:01
    the Florida power and light document that I handed you all
  • 00:32:05
    in the docket number so we will get that filed today. That's a good suggestion.
  • 00:32:08
    Your staff always on top of it for you. There you go. (item:A: Eliecer Viamontes, Entergy, Beryl Efforts, 56793)
  • 00:32:12
    Morning, Alan. Good morning, Chairman, commissioners. Good morning.
  • 00:32:17
    Olivia Montez, president CEO of Enterd Texas.
  • 00:32:21
    Thank you for the opportunity for me to be
  • 00:32:25
    here today. Before I say anything else, I want to thank first
  • 00:32:29
    and foremost our customers for their understanding and let them
  • 00:32:32
    know how much we appreciate serving them. We know that Hurricane
  • 00:32:36
    barrel disrupted their lives and businesses and damaged their properties.
  • 00:32:40
    We, too, live in the communities that we serve. In those communities have been
  • 00:32:44
    supportive. At the peak of the storm, we had 252,000
  • 00:32:48
    customers without power. And today, less than three days since the
  • 00:32:52
    hurricane cleared our territory, we've been able to reduce that to 105,000
  • 00:32:56
    with 60% restored. I am truly grateful
  • 00:33:00
    for our hardworking crews. Their dedication and commitment are the
  • 00:33:04
    reasons why we can safely restore power as quickly as possible
  • 00:33:07
    after a severe weather event. I'm happy to report that
  • 00:33:11
    there have been zero injuries while responding to
  • 00:33:14
    this event. Hurricanes, as you know, can create many unsafe conditions,
  • 00:33:18
    and there is a lot of pressure to move quickly. Safety is a way
  • 00:33:22
    of life at Entergy, and it's integrated in everything that we do.
  • 00:33:25
    I want to touch on the actions we took in preparation for the storm.
  • 00:33:29
    As you know, Entergy, Texas is a non ERCOT utility that serves
  • 00:33:33
    27 counties in southeast Texas. As a Gulf coast
  • 00:33:36
    utility, we are storm ready year round and storm
  • 00:33:40
    response is part of our culture. Prior to Hurricane
  • 00:33:44
    Burroughs landfall on July 8, we activated our emergency plans on July
  • 00:33:48
    3 and our storm command center on July 6.
  • 00:33:52
    Additionally, we readied our employees pre stage resources,
  • 00:33:55
    and throughout the year, we ensure we have sufficient supplies up
  • 00:33:59
    to a category for a major storm.
  • 00:34:02
    Now I want to move to the storm itself
  • 00:34:06
    and the impacts to our service area. So, first of all, every storm is
  • 00:34:09
    unique. We experience sustained winds of 60
  • 00:34:14
    gusts that were north of 85, even had a tornado that
  • 00:34:18
    touched down on the edge of our service area near Jasper.
  • 00:34:21
    The eye of the storm passed directly through Montgomery county,
  • 00:34:24
    specifically the woodlands and the Conroe areas.
  • 00:34:28
    These are the most densely populated parts of our service area and
  • 00:34:32
    are heavily wooded. In areas where lines are not underground,
  • 00:34:36
    flying vegetation due to winds and trees falling, especially from outside
  • 00:34:39
    of the right of way, were especially impactful across
  • 00:34:43
    the service area. We experienced the following 385
  • 00:34:47
    poles, 190 transformers over 2000 spans of
  • 00:34:50
    wire 44 substation, many of these
  • 00:34:54
    affecting industrial facilities, but notably none affect any
  • 00:34:58
    major refineries or any major chemical plants.
  • 00:35:02
    And then seven out of eight major transmission ties between the western
  • 00:35:06
    and eastern portion of our service territory
  • 00:35:09
    were lost, leaving one tie line from the north remaining to
  • 00:35:13
    our western region load pocket. And finally,
  • 00:35:16
    none of our generation facilities were forced out as a result of
  • 00:35:19
    the storm. Now let's talk about storm response.
  • 00:35:23
    I want to start first of all with an incredible example of
  • 00:35:27
    how our employees are keeping the lights on for customers. Monday night after the
  • 00:35:30
    storm had passed, we lost our last tie into our western region,
  • 00:35:33
    which includes the Woodlands and Conroe. This required a significant
  • 00:35:38
    amount of communication, coordination and precision for
  • 00:35:42
    the teams to manually balance a 60 hz frequency in the region
  • 00:35:45
    and during the overnight hours to avoid a load shed event while
  • 00:35:48
    our crews work to get the tie line restored and achieve system
  • 00:35:52
    stability. I'm extremely proud of that outcome.
  • 00:35:55
    Starting on Monday afternoon of the storm, we began damage assessment
  • 00:35:59
    and restoration efforts. Once a was safe to do so, we had
  • 00:36:02
    a goal of restoring 50% by the end of
  • 00:36:05
    the day yesterday, which we were able to surpass and we're at 60%.
  • 00:36:09
    As mentioned earlier, we have a workforce of over 2400
  • 00:36:13
    working on restoration efforts, which includes entergy employees,
  • 00:36:17
    embedded contractors and mutual assistance crews as well.
  • 00:36:20
    We continue to restore power around the clock and expect to have the
  • 00:36:24
    last set of customers in the most heavily affected areas restored by Sunday
  • 00:36:28
    night, with few exceptions. From a customer communication standpoint,
  • 00:36:32
    we know that it's important to provide trusted and timely information during emergency situations
  • 00:36:36
    so that customers can plan and make important decisions for their households
  • 00:36:39
    and businesses. This is why we stayed in contact
  • 00:36:43
    with customers prior, throughout and after the storm,
  • 00:36:46
    using direct calls, text messages, alerts on the entergy app,
  • 00:36:49
    and multiple updates on our website and social media platforms. Prior to
  • 00:36:53
    the storm, we had multiple press releases on the planning, preparation and
  • 00:36:57
    also safety reminders, down wires, generators,
  • 00:37:00
    etcetera. We held daily calls with elected and local officials to provide detailed
  • 00:37:04
    updates and information to pass on to their constituents and communities.
  • 00:37:08
    We held multiple media interviews, several of which I did personally, both in English
  • 00:37:12
    and in Spanish. We consistently updated our view outage map on the
  • 00:37:15
    Entergy website, which kept customers informed not
  • 00:37:19
    only the extent of the damage and estimated restoration
  • 00:37:22
    times, but it also helped customers understand the general progress and
  • 00:37:26
    where other resources might be available in terms of having power
  • 00:37:30
    generally restored geographically.
  • 00:37:33
    And we also had our call center available 24/7 during
  • 00:37:36
    and after the storm. So clearly the restoration
  • 00:37:40
    is still underway. We have a lot of work to do and as you can
  • 00:37:43
    see from my attire, I'll be headed back in the field after
  • 00:37:47
    the open meeting to support our field workers and continue to lead
  • 00:37:50
    the restoration effort. Looking back where we are right
  • 00:37:54
    now, and we also have a process where
  • 00:37:58
    we from a continuous improvement go through, what could we
  • 00:38:01
    have done better that is part of our culture and something that we will plan
  • 00:38:04
    to do after the storm. What stands out to me is that this
  • 00:38:09
    storm is further evidence of why hardening the grid is so
  • 00:38:12
    important, because that investment serves to reduce the extent and
  • 00:38:16
    duration of outages and reduces overall storm costs during
  • 00:38:20
    the event its clear transmission was affected.
  • 00:38:23
    It's imperative that we focus on efforts to enhance the transmission
  • 00:38:26
    system. Down trees and flying vegetation,
  • 00:38:30
    which damage lines, often from outside of the right of way, as mentioned
  • 00:38:33
    earlier, are a major contributor of the outages,
  • 00:38:37
    and we should continue to explore how best to manage that risk,
  • 00:38:40
    which can affect even hardened facilities.
  • 00:38:44
    And lastly, and it's clear once again that adequate local generation
  • 00:38:48
    is critical to maintaining the system reliability
  • 00:38:52
    and stability, especially in the case that I mentioned where you
  • 00:38:55
    had transmission lines compromised. Without Montgomery
  • 00:39:00
    county power station in the region, we would have not
  • 00:39:03
    had any other alternatives and likely would have experienced a significant load
  • 00:39:07
    shed event. So, commissioners, I am proud of the response
  • 00:39:11
    that the men and women of enterd Texas have undertaken.
  • 00:39:14
    I appreciate that what
  • 00:39:18
    southeast Texans have experienced with the storm.
  • 00:39:21
    I know it's extremely challenging and frustrating to be without power,
  • 00:39:26
    especially during the summer heat, and safely restoring
  • 00:39:29
    service for our customers is and will continue to be our top priority.
  • 00:39:33
    So with that, thank you for your time today and happy to answer any questions.
  • Item A - Comissioner's Questions to Eliecer Viamontes, Entergy, Beryl, 56793
    00:39:37
    Thank you. Ellie. So you talked about local generation. Did any of your generating
  • 00:39:41
    facilities have sustained any damage or have any issues? No damage
  • 00:39:45
    at all. Not even Orange county, which was the one. There were no
  • 00:39:48
    damages. Thank you, commissioners. Ellie,
  • 00:39:52
    so you mentioned, just as I've been asking, the prior
  • 00:39:55
    company, 60% have been restored today,
  • 00:39:58
    105,000 are still without power. But you're thinking by
  • 00:40:01
    this weekend everybody will be back to restored power? Yeah. Our goal was
  • 00:40:05
    50% yesterday, which we're at 60% now Friday to be
  • 00:40:08
    roughly 75% or better, and then have the
  • 00:40:12
    vast majority over 90% by the end of this week and there's always carryover.
  • 00:40:17
    As mentioned earlier, you can have multiple poll damages. Multiple trees
  • 00:40:20
    will certainly double up and triple up on crews, whatever it takes.
  • 00:40:24
    Once you get to that last set of customers that have extreme
  • 00:40:28
    damage, there is a balance in terms of making sure we do
  • 00:40:31
    it safely. As you know, expediting that work
  • 00:40:35
    can cause more issues and can actually prolong the restoration event,
  • 00:40:39
    which is the last thing we want to do. So, yes, it could be minimal
  • 00:40:42
    carryover, but we expect by Sunday night I have to be essentially restored.
  • 00:40:46
    Thank you. I saw online it looks like
  • 00:40:49
    you all put out information for your customers to know when
  • 00:40:52
    they were going to get back online by area. Does that just started yesterday
  • 00:40:57
    or when was that first posted? We did that, I believe, and I apologize
  • 00:41:00
    because the night you're getting, I think it was the previous night that
  • 00:41:04
    we did that. And, you know, you don't have all the
  • 00:41:07
    information available, but we understand customers needed
  • 00:41:11
    information to make decisions and that's why they're estimated no later than times.
  • 00:41:16
    As we complete the damage assessment, as we get more
  • 00:41:20
    refined information, we make those adjustments and then
  • 00:41:23
    we directly communicate to customers after we have established
  • 00:41:27
    those general estimated restoration times. It's a dynamic.
  • 00:41:30
    I think those customers are appreciative of that knowledge.
  • 00:41:35
    So you mentioned that there was significant damage
  • 00:41:38
    in the transmission system.
  • 00:41:41
    Tree related. When I think about the structures that were impacted,
  • 00:41:45
    we know about half a dozen or so over the 25,000 transmission
  • 00:41:49
    structures that we have. But there were a lot of line sections that were impacted,
  • 00:41:53
    many due to vegetation. Five out of the six transmission poles
  • 00:41:57
    that were compromised were due to vegetation
  • 00:42:01
    outside of the right of way. So of course,
  • 00:42:05
    energy service area is sometimes in rural areas and
  • 00:42:08
    particularly the transmission that serves the more populated areas.
  • 00:42:12
    And one of the things that we saw in north
  • 00:42:16
    Texas and was kind of reported to us is that you bring in
  • 00:42:19
    lots of folks from outside the area to
  • 00:42:23
    help, but you need to have that experienced team
  • 00:42:26
    member with them, particularly when they're going out in
  • 00:42:30
    areas where they're not familiar with. And there could be, you know,
  • 00:42:34
    different challenges. So has that proven to be any
  • 00:42:40
    challenge in this restoration in terms of having the adequate number
  • 00:42:44
    of entergy folks with our outside people
  • 00:42:48
    that are coming in to help? The majority that of
  • 00:42:52
    resources that we secured early on in the storm were entergy
  • 00:42:57
    employees and contractors who know our system very well.
  • 00:43:01
    We did not need to process them or safety onboard them because they
  • 00:43:05
    already know the standards that we abide to. And that provided a
  • 00:43:09
    significant amount of efficiencies early on in the restoration process.
  • 00:43:13
    Thank you.
  • 00:43:16
    Ellie. How significant is it that
  • 00:43:21
    when the storm hit landfall came across
  • 00:43:25
    centerpoint territory and still in entergys territory that it was still
  • 00:43:28
    a hurricane? So that's, I mean, for those that
  • 00:43:32
    aren't familiar with that area, it's 120 miles from the coast
  • 00:43:35
    or something like that. Commissioner, I was surprised. I've seen
  • 00:43:38
    many storms in my career coming from south Florida,
  • 00:43:42
    and the sustained winds keeping
  • 00:43:46
    up that far inland was surprising.
  • 00:43:49
    And the
  • 00:43:52
    northeast quadrant of the storm was the section that hit,
  • 00:43:56
    which is the one that carries the biggest punch. That's the dirty side
  • 00:43:59
    of the storm from my experience. So you combine
  • 00:44:03
    that fact with the most densely area of our service territory
  • 00:44:07
    that also happens to be one of the most densely vegetated areas
  • 00:44:10
    as well. You literally have that perfect combination that
  • 00:44:14
    has caused the numbers to certainly
  • 00:44:17
    seem higher given a category one, but the damage is real.
  • 00:44:21
    You've seen pictures and have seen firsthand the vegetation. I've seen
  • 00:44:25
    it throughout this week myself. I think it was
  • 00:44:28
    a combination of factors that contributed to the number of outages.
  • 00:44:32
    Thank you. I hope you'll be personally involved as we look at this coming
  • 00:44:36
    from Florida power and light and having experience on the ground there.
  • 00:44:41
    Your experience will be great. Happy to help.
  • 00:44:45
    Thanks, Ellie. Appreciate it. Thank you.
  • 00:44:47
    And finally, we'll hear from Centerpoint.
  • 00:44:52
    Good morning, Jason. Good morning.
  • 00:44:57
    Good morning. Chairman Gleason and commissioners and the newest commissioner.
  • Item A - Jason Ryan, CenterPoint, Beryl Efforts, 56793
    00:45:00
    Congratulations. My name is Jason Ryan, executive vice
  • 00:45:04
    president with Centerpoint Energy. We are still in
  • 00:45:07
    emergency operations, but I think it's important that we appear today
  • 00:45:11
    and appreciate the time to update you and the public on
  • 00:45:15
    the status of restoration at Centerpoint Energy.
  • 00:45:19
    We have the privilege to serve almost 3 million homes and
  • 00:45:23
    businesses in the Houston area. And I mean the privileged
  • 00:45:26
    word intentionally. So. Let me start off by talking to
  • 00:45:30
    our customers that are still out. We know that we
  • 00:45:33
    still have a lot of work to do and we will not stop the work
  • 00:45:37
    until it is done to our customers that not only have
  • 00:45:41
    power out but have significant property damage,
  • 00:45:45
    damage from the trees that we've talked about coming up from the roots.
  • 00:45:48
    Our hearts go out to you. Our hearts go out to our community.
  • 00:45:52
    And we know that after restoration is done, we have a lot of work to
  • 00:45:55
    do to support the community to get back on their feet.
  • 00:45:59
    I also want to say that since yesterday was national line Workers Appreciation
  • 00:46:03
    Day, call out the line workers that have done a tremendous job
  • 00:46:07
    with the restoration efforts so far, and I'll detail that work.
  • 00:46:13
    So far, no serious incidents or fatalities.
  • 00:46:17
    And with the number of mutual assistance crews and the dangerous
  • 00:46:20
    conditions that we've got. I think that's a feat of worth mentioning at the beginning.
  • 00:46:26
    Also, I'll mention at the beginning as it relates to customers so that they're aware.
  • 00:46:30
    We did early on stop processing disconnection
  • 00:46:34
    requests from the retail electric providers and we'll continue to assess
  • 00:46:38
    when that should begin under the terms of our tariff going forward.
  • 00:46:43
    So let me detail a little bit
  • 00:46:47
    of the, the event and then I'll go into
  • 00:46:51
    our preparation and restoration work. You do have a slide deck that
  • 00:46:55
    I prepared to give you some hopefully
  • 00:46:59
    helpful visuals as we have the discussion.
  • 00:47:06
    First, I guess we've heard a little bit about the storm, but it
  • 00:47:10
    was unique in a couple of different ways and the
  • 00:47:14
    visual on page two helps to provide that. You know, it was a
  • 00:47:17
    storm that formed very east
  • 00:47:21
    in the Atlantic. It formed early, it strengthened
  • 00:47:26
    quickly, was one of the stronger hurricanes ever to form this
  • 00:47:30
    early in the hurricane season and was clearly unpredictable.
  • 00:47:35
    We'll talk to meteorological experts after
  • 00:47:39
    this event and get their take on it, too. But I think one of the
  • 00:47:42
    things to point out that the map shows is the significant hurricane
  • 00:47:46
    force winds that were felt throughout the entirety of our service
  • 00:47:50
    territory. As Commissioner Glatfelty has already referenced,
  • 00:47:54
    you know, we were on the path
  • 00:47:57
    that is probably one of the worst paths a hurricane could take,
  • 00:48:01
    which is coming onshore
  • 00:48:05
    in the Matagorda area, very close to our service territory.
  • 00:48:08
    Our service territory is outlined in the black there,
  • 00:48:12
    which means that the entirety of the greater Houston area
  • 00:48:15
    was on the dirty side of the storm. And that what that means is as
  • 00:48:19
    the storm swirls from right to left, you've got
  • 00:48:22
    the strongest winds, most of the tornadic activity
  • 00:48:27
    and the most severe weather coming up on the right side of the
  • 00:48:31
    eye wall. So that was happening throughout the
  • 00:48:34
    entirety of our service territory. What the map shows is that
  • 00:48:38
    the entire 5000 square mile service territory of
  • 00:48:41
    Houston was in that dirty side of the storm.
  • 00:48:45
    And the one thing I'll point out, I know it's a little hard to see,
  • 00:48:49
    but there are wind speeds that are there on the various dots.
  • 00:48:52
    The wind speed at Intercontinental Airport was 83 miles an
  • 00:48:56
    hour. That is higher than Hurricane Ike.
  • 00:49:00
    Wind speed at Intercontinental airport. Right. So Hurricane Ike
  • 00:49:04
    being a major category two storm versus this being category
  • 00:49:07
    one, the wind speeds were higher further inland.
  • 00:49:12
    As the hurricane continued to go through Entergy's area into
  • 00:49:15
    east Texas, there was more cyclonic activity with the
  • 00:49:19
    storm than the entirety of some storm
  • 00:49:22
    seasons, hurricanes. There were 67 tornado
  • 00:49:26
    watches issued by the National Weather Service. As that storm continued
  • 00:49:29
    to push inland. So again, it was a hurricane.
  • 00:49:33
    I'll set aside whether it was a category one, two, three or four hurricane.
  • 00:49:37
    It was a significant hurricane as it came ashore.
  • 00:49:42
    As it left our system midday on Monday,
  • 00:49:46
    we had 2.26 million customers out of our,
  • 00:49:49
    almost 3 million customers that we serve.
  • 00:49:53
    Let me talk a little bit about the planning in advance of the
  • 00:49:57
    storm. So as the other utilities have described,
  • 00:50:00
    we also have a comprehensive planning process at Centerpoint Energy.
  • 00:50:05
    It doesn't start only in the event
  • 00:50:08
    of a storm. We do comprehensive training every
  • 00:50:12
    year. Your staff is involved many times in
  • 00:50:15
    that training process as well. We did that earlier
  • 00:50:19
    this year. As the
  • 00:50:23
    storm formed, we started tracking it about nine
  • 00:50:27
    days out, knowing that
  • 00:50:31
    there was great uncertainty in the path, that it was something that we should
  • 00:50:35
    keep our eyes on. As the path started
  • 00:50:39
    to shift, especially after the 4 July,
  • 00:50:43
    we started calling on mutual assistance crews.
  • 00:50:46
    We started with about 3000 mutual assistance
  • 00:50:49
    crews that we asked to come and pre position in
  • 00:50:52
    the greater Houston area. And what I mean by that, it's important
  • 00:50:57
    we don't ask those crews to come into the direct
  • 00:51:01
    path of the storm. So I'm not saying we ask them to pre position at
  • 00:51:05
    different places in Houston. That wouldn't be what we
  • 00:51:08
    ever asked them to do. They pre positioned outside of our service
  • 00:51:12
    territory. So as soon as it was safe to do so, they could come into
  • 00:51:15
    our staging sites. As the
  • 00:51:19
    path looked like it was one of those worst case scenarios, we upped that
  • 00:51:23
    mutual assistance request to a little bit greater than
  • 00:51:26
    10,000 crews. To give you an order of magnitude,
  • 00:51:30
    that's about eight times the workforce of Centerpoint
  • 00:51:34
    energy on any given day.
  • 00:51:39
    That brought our total workforce up to
  • 00:51:43
    about 12,000 men and women that could
  • 00:51:47
    address this storm. We also opened 18 staging sites
  • 00:51:53
    that were located strategically throughout our service territory where
  • 00:51:57
    they could be closest to the work when they end their work every
  • 00:52:00
    day and they start their work every morning.
  • 00:52:04
    I'll talk a little bit more about the staging sites in a little bit.
  • 00:52:08
    We also immediately started to deploy our temporary
  • 00:52:12
    emergency generation. I would have brought a list
  • 00:52:17
    if I knew you were going to ask that question about where they were deployed.
  • 00:52:19
    I'll get you a list to your offices. But they are in facilities
  • 00:52:23
    like cooling centers, hospitals, senior living facilities
  • 00:52:27
    and water facilities. We continue to look for ways
  • 00:52:32
    to deploy those assets and the way they can best
  • 00:52:35
    help our community going forward.
  • 00:52:39
    Also on the slide, I mentioned that we have very limited
  • 00:52:43
    issues with materials availability.
  • 00:52:46
    I unfortunately was speaking to you a little less than two months
  • 00:52:49
    ago about the May 16 de Racho that hit
  • 00:52:53
    the greater Houston area as well. We are able to replenish supplies
  • 00:52:58
    from that storm to be prepared for this one.
  • 00:53:02
    So there are no material issues causing any delays with restoration.
  • 00:53:06
    The one thing that we have asked for help with are for braces
  • 00:53:09
    for poles. So not every pole that has some damage
  • 00:53:13
    needs to be replaced in real time. You can brace it
  • 00:53:17
    and come back later. And so we have asked for some assistance having
  • 00:53:21
    more braces for poles during this event.
  • 00:53:26
    Let me talk a little about the damage that we saw from
  • 00:53:30
    the storm. Slides four and
  • 00:53:33
    five show some of that. We did not have
  • 00:53:37
    material damage to our transmission system, nor did
  • 00:53:40
    we see material damage to substations. We did not
  • 00:53:44
    see flooding of substations like we've seen in some
  • 00:53:47
    past storms. This was a storm
  • 00:53:51
    that was largely debris on the distribution system.
  • 00:53:55
    So you see some pictures that show that on
  • 00:54:05
    page five you see some of our work
  • 00:54:08
    to date. We have completed the vast
  • 00:54:12
    majority of our damage assessment work and expect to finish
  • 00:54:15
    that today. Let me pause a little bit about the
  • 00:54:19
    importance of that damage assessment work that's done in
  • 00:54:22
    the first couple of days post storm.
  • 00:54:26
    In order to effectively utilize not only Centerpoint's crews,
  • 00:54:29
    but the more than 10,000 crews that we brought in from
  • 00:54:33
    other places. We need to know what kind of crews to send
  • 00:54:37
    where. That's what our damage assessment workers do in the
  • 00:54:41
    early days after a storm. Not every crew
  • 00:54:45
    is the same. If I have substantial damage to distribution
  • 00:54:48
    poles, if I've got poles on the ground, I need to send a construction
  • 00:54:52
    crew. If I've got 250 poles on the ground like we
  • 00:54:56
    do in some places, I need to send significant construction crews.
  • 00:55:00
    If I have trees on lines, I need to send vegetation
  • 00:55:04
    management crews to go in and clear those trees. If I can
  • 00:55:08
    quickly restore service by
  • 00:55:12
    doing minor work on facilities, I can send much smaller
  • 00:55:15
    crews out to do that. We can't start sending
  • 00:55:19
    crews out until we get that damage assessment done. That damage
  • 00:55:23
    assessment looks like people walking,
  • 00:55:26
    literally walking. As of the end of yesterday,
  • 00:55:29
    8500 miles of distribution lines.
  • 00:55:33
    We have flown distribution lines with helicopters.
  • 00:55:37
    We have used drones to help us with that assessment as well.
  • 00:55:41
    So I know it's incredibly frustrating to see mutual assistance
  • 00:55:44
    crews in the early days waiting to do the work,
  • 00:55:48
    but we can't effectively rely on that
  • 00:55:52
    workforce if we don't know where to send them. If we send a
  • 00:55:55
    construction crew somewhere where a smaller crew could do the work, we're ineffectively
  • 00:56:00
    using that workforce. So I'm happy to report that
  • 00:56:04
    by the end of the day yesterday, we're 85% complete with that damage assessment work.
  • 00:56:07
    We'll finish it today. And we are restoring customers
  • 00:56:11
    actively with our mutual assistance crews. You see
  • 00:56:15
    on the next page some of the staging sites.
  • 00:56:18
    You see the dots on the map, exactly where those staging sites are.
  • 00:56:24
    Commissioner Glotfield, he mentioned he came to a staging site on Tuesday, the day after
  • 00:56:27
    the storm. That is where we do our initial
  • 00:56:30
    intake of crews that are coming onto our system.
  • 00:56:34
    It's where they get safety briefings. It's where they learn about different
  • 00:56:38
    design specifications for the work that they're going to be doing.
  • 00:56:42
    Things like how much clearance
  • 00:56:45
    on a roadway crossing do they need to do to comply with local
  • 00:56:49
    or state regulations? Right. They're coming in from out of state. They're not used to
  • 00:56:53
    working on our system, so we brief them on all of that. This is where
  • 00:56:56
    they come every evening when they're done with work, park their
  • 00:56:59
    trucks, get their food, get bused to a
  • 00:57:03
    hotel. The next day they're bused back to that staging site,
  • 00:57:06
    they get their food for the day, they get their work plans, and they exit.
  • 00:57:10
    So these staging sites are fairly significant logistical hubs.
  • 00:57:16
    We had the initial staging site set up less than half a day,
  • 00:57:20
    or about half a day after the storm cleared our system. So a lot of
  • 00:57:24
    work goes into putting those together. You can't put them together before
  • 00:57:28
    the storm hits. Right. So the big tents where crews
  • 00:57:32
    get briefings and get their food can't be put up before the
  • 00:57:36
    hurricane. So you see a lot of that activity, right, in those early
  • 00:57:40
    hours after the storm leaves.
  • 00:57:44
    On the next page, you see just a
  • 00:57:47
    list of our significant mutual assistance crews. I wanted you
  • 00:57:51
    to have the names of those companies. We're very thankful that they
  • 00:57:54
    send their men and women to help the greater
  • 00:57:57
    Houston area. Finally, let me get into restoration stats.
  • 00:58:02
    You see that on page eight. So as
  • 00:58:06
    of today, we have restored more
  • 00:58:10
    than 50% of the outages. So we've restored
  • 00:58:15
    about 1.2 million homes and businesses.
  • 00:58:18
    There's a little over 1 million homes and businesses
  • 00:58:22
    left to be restored. So I
  • 00:58:26
    like to rely on data as a good way to
  • 00:58:29
    judge readiness. We have never restored more
  • 00:58:34
    than a million customers a little over two days after a
  • 00:58:38
    hurricane before. And you can only do that with significant
  • 00:58:42
    readiness. We know we still have a lot of work to
  • 00:58:45
    do. We communicated to our customers last night.
  • 00:58:49
    We expect to have another 400,000 customers on by the end
  • 00:58:53
    of the day tomorrow. We expect to
  • 00:58:56
    have another 350,000 customers on, on by
  • 00:59:00
    the end of the day on Sunday. That takes you to
  • 00:59:03
    about 80% restoration by the end
  • 00:59:07
    of the weekend. We continue to assess
  • 00:59:11
    our workforce needs. If we believe that
  • 00:59:15
    we can effectively onboard additional crews in
  • 00:59:18
    order to speed up the work, we will.
  • 00:59:22
    That leaves about 500,000 customers that we currently
  • 00:59:26
    expect to have outages that go into next
  • 00:59:29
    week. We issued a communication to customers
  • 00:59:34
    today that said that by noon we
  • 00:59:37
    will start providing estimated restoration times for those customers
  • 00:59:41
    that are going to have outages that go into next week.
  • 00:59:45
    We will update those estimated restoration times
  • 00:59:49
    as we get better information on what those customers
  • 00:59:53
    should expect.
  • 00:59:57
    Let me talk a little bit about communications with our customers.
  • 01:00:02
    We did, as of the end of the day yesterday,
  • 01:00:06
    27 media interviews.
  • 01:00:09
    We had 72 social media posts keeping customers
  • 01:00:14
    advised of the work that we were doing, the process
  • 01:00:18
    that we were going through, where they
  • 01:00:22
    were in the process, in an outage map that
  • 01:00:25
    we posted. Are you in the assessment phase? Are you
  • 01:00:29
    in the phase where your outage is being assigned to accrue
  • 01:00:33
    for that work? We also encouraged
  • 01:00:37
    customers to sign up for our power alert service so that they could
  • 01:00:41
    personally get these estimated restoration times when we push
  • 01:00:44
    them out by either phone call, text or
  • 01:00:49
    email so they're no longer relying on just press
  • 01:00:52
    releases to understand when their estimated
  • 01:00:56
    restoration times are.
  • 01:00:59
    So again, we know
  • 01:01:03
    that some of the hardest hit areas are along the
  • 01:01:07
    coast and up the I 45
  • 01:01:11
    corridor, up to the Woodlands. So we will be communicating to
  • 01:01:15
    customers so they have situational awareness as we go into next week
  • 01:01:19
    where they are with that estimated restoration time in
  • 01:01:25
    the spirit of continuous improvement. We always do. After action
  • 01:01:29
    reviews, we have started to document
  • 01:01:33
    our lessons learned and I'm happy to talk
  • 01:01:37
    about that either today, Orlando, as this process continues.
  • 01:01:40
    I know, Chairman Gleason, this is not the first and last time we'll have this
  • 01:01:43
    discussion, but know that we
  • 01:01:48
    are undertaking that process as we speak and we will do a full after action
  • 01:01:51
    review at the end. Let me go ahead
  • 01:01:54
    and close again by acknowledging to the customers
  • 01:01:59
    that are out as we speak and especially to those customers that
  • 01:02:03
    will have outages for an extended period of time past
  • 01:02:06
    this weekend. We know we have a lot of work to do. Our crews
  • 01:02:10
    are working around the clock, 16 hours work shifts.
  • 01:02:14
    We will continue to assess whether or not we have the right number of
  • 01:02:17
    crews and whether we should bring additional ones in. And we will not
  • 01:02:21
    stop our work until the work is done.
  • Item A - Commissioner's Questions to Jason Ryan, CenterPoint, Beryl, 56793
    01:02:25
    Thanks, Jason. Just before questions, just made one comment.
  • 01:02:29
    At the outset, you talked about rebuilding the infrastructure,
  • 01:02:32
    rebuilding the community. I'd say a third leg
  • 01:02:37
    of that stool is rebuilding trust a little bit. And I think that really
  • 01:02:40
    starts with effective communication. You touched a little on communication.
  • 01:02:44
    As I've thought about this. I would strenuously urge you all to
  • 01:02:48
    get out. Once everything is restored, get out into the community.
  • 01:02:51
    I don't know if that's town halls or what it looks like,
  • 01:02:55
    but go talk to your customers. Go talk to those residents about
  • 01:02:58
    what happened, about, you know, ways that you feel you all can improve.
  • 01:03:02
    Get feedback from them about their view on what
  • 01:03:05
    can be improved. I think that will make the next time that there's a storm,
  • 01:03:09
    make this go a lot better, because as we learned at this commission,
  • 01:03:13
    you know, after Yuri, communication is the key
  • 01:03:16
    to everything. I mean, you know, the infrastructure is going to break. Things are going
  • 01:03:19
    to happen, but if people feel they're being effectively communicated
  • 01:03:23
    with, it makes it a lot easier to go
  • 01:03:27
    through it. And so I'd say get out in the community and go talk to
  • 01:03:30
    your customers. I appreciate that. We're fully supportive of that.
  • 01:03:34
    And we'll make sure we coordinate with your office so you know what we're doing.
  • 01:03:37
    Thank you, commissioners. Yeah, Jason.
  • 01:03:40
    So you laid out the statistics that I've been asking for from the
  • 01:03:44
    other companies, and essentially what you're saying is that you
  • 01:03:49
    still have over 50% of the power outages out right
  • 01:03:52
    now when you provided a timeline through the end of the weekend, about half a
  • 01:03:55
    million extending into next week. Constant communication with
  • 01:03:58
    them, I think is important, as you've laid out, y'all are doing so they can
  • 01:04:02
    plan accordingly to get to a safe place if
  • 01:04:05
    they need to. And so what
  • 01:04:08
    are some of the reasons why that you're seeing, based on
  • 01:04:12
    your damage assessments, that it's taking longer to get to these half a
  • 01:04:15
    million customers? So those are in
  • 01:04:19
    areas where we are having to rebuild the infrastructure.
  • 01:04:23
    So in areas where it's removing
  • 01:04:28
    debris on the distribution system, what I mean by that is largely
  • 01:04:32
    vegetation, trees,
  • 01:04:36
    limbs, some in the right of way, some outside the right of
  • 01:04:39
    way. Commissioner, I will request that our folks keep good records on
  • 01:04:44
    what's what so that we can give order of magnitude where that was.
  • 01:04:50
    That is the kind of restoration that we will accomplish
  • 01:04:53
    by the end of this weekend, where we have to rebuild
  • 01:04:58
    large spans of infrastructure with
  • 01:05:01
    poles that snapped in half laying on the ground. You've got
  • 01:05:05
    a couple pictures of that kind of damage. That is
  • 01:05:08
    the kind of work that's going to lead to those extended
  • 01:05:12
    power outages. So as we,
  • 01:05:16
    again, as we continue to assess
  • 01:05:20
    our workforce needs and whether or not we
  • 01:05:23
    need to bring more people in. We will accelerate those
  • 01:05:27
    estimated restoration times, and we're going to start
  • 01:05:30
    communicating with customers today that are going to experience those
  • 01:05:34
    extended outages. Based on your review of your pre hurricane
  • 01:05:38
    inventory for materials and equipment, do you think that you have enough
  • 01:05:42
    equipment and materials to rebuild this infrastructure?
  • 01:05:46
    We do. The one thing,
  • 01:05:49
    and I know we're working with Tietum on this as of this morning, we want
  • 01:05:52
    to make sure we have sufficient diesel fuel for our emergency
  • 01:05:56
    generation because we expect this
  • 01:05:59
    extended outages in certain areas.
  • 01:06:03
    I don't want to say that we have a concern about it right now because
  • 01:06:06
    we are working through the appropriate channels there as we,
  • 01:06:09
    we don't have any material concerns. There's that fuel
  • 01:06:13
    concern that we're working through. But certainly, as we have
  • 01:06:16
    any unmet needs, we will work with our mutual assistant partners
  • 01:06:20
    and through state and federal channels to make sure those
  • 01:06:23
    unmet needs get met. Okay. With respect to the fuel
  • 01:06:26
    concerns, is there anything that can be done by
  • 01:06:30
    the commission, anything that can help you get
  • 01:06:34
    those resources so we're working the right channels. If we end up with some roadblocks,
  • 01:06:38
    we'll be back in touch with your office for sure. Fantastic. And back to the
  • 01:06:41
    mobile DG discussion. So I understand.
  • 01:06:45
    How many mobile DG units do you all have?
  • 01:06:48
    So we have 17 large ones. And what I mean
  • 01:06:51
    by that is either 30 megawatt or five
  • 01:06:55
    megawatt units. Those are best used
  • 01:07:00
    during load shed, but we are looking for
  • 01:07:03
    opportunities to use those units to pick up
  • 01:07:07
    parts of circuits where there may
  • 01:07:11
    still be damage going up to the substation. But you can mid
  • 01:07:16
    circuit and pick homes up. So as we
  • 01:07:19
    make progress on our restoration work, we will continue
  • 01:07:22
    to look for opportunities to use those mid circuit.
  • 01:07:27
    We then have more than a dozen smaller units,
  • 01:07:31
    two and a half megawatt units.
  • 01:07:34
    1. We have a vendor that allows
  • 01:07:38
    us to bulk up on that on a
  • 01:07:41
    temporary basis when we need them for storms like this, so that those smaller units
  • 01:07:45
    aren't just sitting in a yard somewhere. So we are working
  • 01:07:49
    with that vendor. As we identify homes
  • 01:07:54
    or businesses or critical facilities that can use those
  • 01:07:58
    smaller units, we will bulk up as the
  • 01:08:02
    need requires. We have also requested,
  • 01:08:06
    through mutual assistance, some additional generation.
  • 01:08:10
    So we've got sufficient generation for
  • 01:08:14
    the needs that have been identified so far. We continue to work
  • 01:08:17
    with critical facilities like water facilities
  • 01:08:22
    to avoid boil water notices. You know,
  • 01:08:25
    a lot of facilities like that that are critical have
  • 01:08:28
    their own backup generation,
  • 01:08:31
    but in extended outages, we have to be concerned about whether that
  • 01:08:35
    backup generation will be sufficient to power through the entire
  • 01:08:38
    event. So we're working very closely with those critical facilities,
  • 01:08:43
    working very closely with our government officials to make
  • 01:08:46
    sure that we're aware of what the status is of
  • 01:08:50
    any generation that they may have as backup for those facilities
  • 01:08:54
    that they're concerned about. I have
  • 01:08:57
    members of my team embedded in the emergency operations centers of many
  • 01:09:00
    cities and many counties right now, so that the information flow
  • 01:09:04
    in that regard is seamless. We have a
  • 01:09:08
    priority desk in our emergency operations center
  • 01:09:11
    that exists solely to take those
  • 01:09:15
    kinds of requests and work them. Whether we can accelerate
  • 01:09:19
    restoration of our facilities, if there's
  • 01:09:23
    a concern about those backup generation facilities
  • 01:09:27
    failing, or whether or not we can use our own
  • 01:09:31
    backup generation to go and augment what they have.
  • 01:09:35
    So, Jason, you mentioned the large ones can only be used when there's load shed.
  • 01:09:39
    Per the commission's rules. Are the twelve smaller ones subject
  • 01:09:43
    to the same? So it's not really rule
  • 01:09:47
    based, commissioner. It's really more just that a 30 megawatt
  • 01:09:52
    unit is more likely to be useful at a substation to
  • 01:09:56
    pick up entire circuits during load shed.
  • 01:10:00
    When there's damage on those circuits from a storm like this,
  • 01:10:03
    they are less useful in that scenario. But again,
  • 01:10:07
    we look to make sure that we can utilize all of our assets.
  • 01:10:11
    So if this storm, which didn't happen
  • 01:10:14
    this time, if this storm had caused
  • 01:10:17
    significant transmission level damage
  • 01:10:21
    and left substations without power,
  • 01:10:25
    but circuits that could take power,
  • 01:10:28
    that's when these 30 megawatt units could be used in a storm scenario,
  • 01:10:33
    that's not this storm. Okay. Yeah. I just asked because,
  • 01:10:36
    you know, there's a lot of frustration, as you said, and there's
  • 01:10:40
    a lot of discussion about out there, about the mobile gen units that your company
  • 01:10:44
    has, like 30 of them. I think it's going to be really important to
  • 01:10:47
    really explain, you know, why you
  • 01:10:51
    can't use some of them right now. When you deployed
  • 01:10:54
    the mobile gen units, it sounds like based on your damage assessments of
  • 01:10:58
    where strategically you can actually use them. But I think it's
  • 01:11:01
    going to be really important to provide that information in the after action report,
  • 01:11:06
    as you know, the issues with not
  • 01:11:09
    being able to use all of them when
  • 01:11:12
    they were deployed, where they were deployed, and,
  • 01:11:16
    you know, it's all in your presentation that amongst the critical care customers,
  • 01:11:20
    there's education centers. Did I read that correctly?
  • 01:11:25
    That's correct. So we have,
  • 01:11:29
    even though school is out, you have some facilities that
  • 01:11:33
    might be serving as daycares in the community or
  • 01:11:37
    providing other services in the community.
  • 01:11:40
    So we are looking at how
  • 01:11:44
    to lessen the impact on the community of power outages
  • 01:11:48
    and how to get the community back to normal quicker.
  • 01:11:52
    And so opening up facilities like that that provide those
  • 01:11:56
    kinds of services are critically important as well.
  • 01:12:01
    Jason, just real quick on a follow up to the mobile gen comments. So if
  • 01:12:05
    some of your units aren't really made for something like this,
  • 01:12:09
    can you, through mutual assistance, use other
  • 01:12:12
    tdus mobile gen units? Yes, sir. Did you do that in this case?
  • 01:12:17
    We did that in the May de Racho, and we've done it here, too,
  • 01:12:20
    I believe. I don't know how many Oncor has sent, but we have
  • 01:12:23
    asked for mutual assistance from Oncor. In that regard. I think it would be
  • 01:12:27
    helpful, as you're showing where you located these,
  • 01:12:31
    to differentiate between your assets and then Oncor assets
  • 01:12:34
    would be helpful. We'll do.
  • 01:12:38
    You mentioned the water districts. Sorry, Jimmy.
  • 01:12:43
    As the length of time prolongs, if they did have their own generation,
  • 01:12:47
    do they then contact you? Do you reach out? Cause I think after Directo was
  • 01:12:51
    some miscommunication. Has that gap been filled from your side?
  • 01:12:54
    Yes. So some are reaching out to us. We are also proactively reaching
  • 01:12:58
    out. So we have a way for
  • 01:13:03
    our local governments, water districts
  • 01:13:06
    included, to submit to us proactively
  • 01:13:10
    their critical facilities. That list
  • 01:13:13
    is long. And so in a storm like this, we keep track
  • 01:13:17
    of which of those critical facilities has
  • 01:13:21
    power, which one doesn't. As you could imagine, oftentimes when
  • 01:13:25
    they don't have power and they proactively call us,
  • 01:13:29
    we are also proactively reaching out to them. And like
  • 01:13:32
    I said, we've got people embedded in all of the local
  • 01:13:36
    emergency operations centers, and that's where that information can bubble up
  • 01:13:40
    as well. I won't say that the gap is perfectly closed,
  • 01:13:44
    but we're in active communication with that group
  • 01:13:47
    of customers.
  • 01:13:51
    Hi, Jason. Good morning, commissioner.
  • 01:13:55
    A couple things. First of all,
  • 01:13:59
    again, I think a lot of this is after
  • 01:14:03
    action. Like when we're looking back, how do we make sure that this is
  • 01:14:06
    better next time? I know the lieutenant governor, the governor,
  • 01:14:09
    the mayor have all, they're all going to be able to
  • 01:14:14
    voice their views to you all. There's a lot of displeasure in
  • 01:14:17
    west Houston and east Houston and in north Houston,
  • 01:14:21
    and I'm not,
  • 01:14:25
    you know, I think that comes with the territory, so to speak.
  • 01:14:28
    It's hard to plan for these when you don't know if they're coming,
  • 01:14:31
    and it's expensive if you plan for them and they
  • 01:14:34
    don't come, it's expensive for right payers.
  • 01:14:39
    What I hope you all can do on a hurricane
  • 01:14:43
    like this one is,
  • 01:14:46
    I don't understand how you get, how you ensure you have
  • 01:14:50
    the right mix of vegetation management folks versus linemen.
  • 01:14:55
    It's great to say we have 10,000 linemen, but if you need 10,000 vegetation
  • 01:14:58
    management folks and $5,000, 5000 linemen,
  • 01:15:03
    it'd be great to try to understand that in the context of a storm
  • 01:15:06
    like this, with all of this vegetation challenge as
  • 01:15:10
    we go forward to think about that, is that the
  • 01:15:14
    right mix? Might be, might not be, but I'd
  • 01:15:17
    like to explore that with you all. Yes, sir. Fully support
  • 01:15:20
    that. So the other one is Mark,
  • 01:15:24
    Stellen county. As we go through this, the one thing that
  • 01:15:28
    we cannot lose sight of is the fact
  • 01:15:31
    that these linemen are people and that I
  • 01:15:36
    haven't heard of a single incident, at least a death,
  • 01:15:40
    which would tell me that that's a good
  • 01:15:43
    thing. If we get through this storm and
  • 01:15:47
    the restoration with maybe 20,000
  • 01:15:51
    additional people touching the system every single
  • 01:15:55
    day for a week and a half or two weeks, we are
  • 01:15:58
    actually very blessed that nobody has an incident. And we
  • 01:16:02
    need to keep that in mind. And I think as we write up our report
  • 01:16:06
    and our story to the legislature, the human life toll that
  • 01:16:10
    the storm took is important, but also on the restoration because they're the ones who
  • 01:16:13
    are climbing the poles every day.
  • 01:16:17
    So if you have incidents on that or you have ideas or
  • 01:16:20
    thoughts on how to include that, how you can do safety briefings better
  • 01:16:24
    or how they've worked versus other utilities, I think all of that is important
  • 01:16:28
    in our after action report. Yes, sir. We'll work with your
  • 01:16:32
    office and staff on that as well. You know, again, I know customers
  • 01:16:36
    are frustrated at how long it may take,
  • 01:16:39
    especially in these prolonged outage areas. Safety is
  • 01:16:42
    our top priority. As you mentioned, these men and
  • 01:16:45
    women are working 16 hours shifts. It's important that they take the other
  • 01:16:49
    eight to rest because these are dangerous
  • 01:16:52
    conditions. It's hot out there. That's a
  • 01:16:56
    safety issue as well. A lot of these crews don't come from places where
  • 01:17:00
    it feels like 110 degrees. So if
  • 01:17:03
    our customers see crews standing on the side of
  • 01:17:06
    the road or in their trucks, it may be to cool
  • 01:17:10
    off, take break, stay safe. That's what we stress with
  • 01:17:14
    these crews that come in from, not the Gulf coast area,
  • 01:17:18
    to make sure that we can end this event with no serious
  • 01:17:22
    injuries or fatalities.
  • 01:17:27
    Certainly want to make sure that people get their power on as quickly
  • 01:17:30
    as possible. And you talked about about a half a million people
  • 01:17:34
    would go into next week any
  • 01:17:39
    idea geographically, where that is? Is it across the surface area
  • 01:17:42
    or is it in specific areas?
  • 01:17:45
    So some of the harder hit areas are
  • 01:17:50
    the Magorda County,
  • 01:17:53
    Brazoria county, parts of Galveston county where
  • 01:17:57
    the storm originally came ashore with
  • 01:18:02
    those high sustained winds that went
  • 01:18:05
    across the I 45 corridor or up the I 45
  • 01:18:09
    corridor. Once you get kind of inside the loop, I have a
  • 01:18:12
    map that I'm happy to share with you that shows that.
  • 01:18:16
    And that is going to be how we communicate
  • 01:18:20
    these estimated restoration times with customers. If they're in these particular
  • 01:18:24
    harder hit areas, they're going to be out the longest.
  • 01:18:28
    Most likely there will be small pockets
  • 01:18:32
    throughout the 5000 sq mi of our service territory that have
  • 01:18:36
    some prolonged outages. But the
  • 01:18:40
    vast majority of them are going to be in those areas that I just described.
  • 01:18:44
    So in terms of restoration, and again, going back
  • 01:18:49
    and doing the after action report, one of the things that
  • 01:18:53
    I'd be interested and you talked about how we have to get in and do
  • 01:18:56
    the assessment first. Right. But obviously
  • 01:19:00
    we're doing, I would think, many assessments.
  • 01:19:04
    And so, you know, what is that process in terms of,
  • 01:19:07
    you know, how do we carve out the service area to determine,
  • 01:19:11
    you know, how many assessments we should be doing at one time and then,
  • 01:19:14
    or progressively, and then as soon as that part of the assessment is
  • 01:19:18
    done, being able to get in and actually start the restoration work.
  • 01:19:21
    So a little bit more detail on the process and if there
  • 01:19:25
    is opportunities there, you know, for continuous
  • 01:19:28
    improvement. Yes, ma'am. And I also think that,
  • 01:19:32
    again, going back to the communication, we can
  • 01:19:36
    communicate earlier with our customers in advance of these storms,
  • 01:19:39
    the process that we'll use so that they understand it a bit
  • 01:19:43
    more. We have a process that we use.
  • 01:19:46
    We implemented our plans. That's what allowed us to achieve
  • 01:19:50
    50% restoration within two
  • 01:19:54
    days after the storm. But we can do better to communicate customers
  • 01:19:58
    for what they should expect to see and expect to not see.
  • 01:20:03
    That assessment is critically important to be done
  • 01:20:06
    to effectively use our crews, but it has added
  • 01:20:10
    some confusion by our customers of what
  • 01:20:14
    it is that we're doing when they don't see crews actively working because they're
  • 01:20:17
    waiting on those assessments to be completed. So that is part of the better
  • 01:20:21
    communication that we can do with our customers so they know what to expect.
  • 01:20:26
    When Hurricane Ike was the last major hurricane to hit our system
  • 01:20:30
    from a wind event hurricane, that was in 2008,
  • 01:20:34
    more than 15 years ago. And our service territory has grown a
  • 01:20:38
    lot, population wise, since then.
  • 01:20:41
    So we need to take that into account in terms of how we communicate and
  • 01:20:45
    to make sure that we're clearly explaining to customers what they should expect,
  • 01:20:50
    especially in the early days when
  • 01:20:53
    there are still so many customers out. I think people can accommodate
  • 01:20:57
    just about anything if they know what's going on. And so,
  • 01:21:00
    so important that we talk about the types of communication that
  • 01:21:04
    you're addressing as well as that ongoing real
  • 01:21:08
    time communication that's available through the
  • 01:21:12
    tracker, which I know you're working on as well. Agreed.
  • 01:21:15
    Thank you. Yeah, I'd say, I mean, you know, we've been fortunate. Like you
  • 01:21:19
    said, we had Harvey in before that we haven't had anything since then.
  • 01:21:23
    But, you know, and I think as we had discussed, you know, using the same
  • 01:21:27
    kind of playbook for communications, probably outdated. You know,
  • 01:21:31
    folks, the public expects more communication,
  • 01:21:35
    more frequent communication, different modes of communication. And so I think
  • 01:21:39
    it's definitely incumbent on all of us to look at the way we communicate going
  • 01:21:42
    forward because this commission,
  • 01:21:46
    the governor, legislative leadership, the speaker
  • 01:21:49
    and the lieutenant governor expect improvements in all of this. And I know
  • 01:21:53
    the residents deserve and demand it.
  • 01:21:56
    We'll be working very closely with you and all the utilities and other folks
  • 01:22:00
    that we can help bring their expertise and understanding to bear to make
  • 01:22:04
    sure that we help mitigate the impact of future storms like this.
  • 01:22:08
    Yes, sir. Anything else for Jason? Thank you,
  • 01:22:11
    Jason. Thanks for being here.
  • 01:22:15
    So I'd say to all the companies, reiterate those thanks
  • 01:22:19
    to the line workers and those crews, both from Texas and those that came
  • 01:22:23
    in from other states for their efforts in restoring the
  • 01:22:26
    system as quickly as possible. And I'd also be remiss if
  • 01:22:30
    I didn't thank all the folks at the state operations center. That's our staff,
  • 01:22:33
    that's all the staff from the utilities, from other sister agencies
  • 01:22:37
    that have been working 24 hours shifts since last weekend
  • 01:22:41
    or maybe even before to prepare for this.
  • 01:22:44
    And so we thank them for all their efforts as well.
  • 01:22:48
    Mister chairman, I have one thing to say, and that is each
  • 01:22:55
    utility service territory in the state of Texas has its
  • 01:22:58
    own unique weather challenges. And we've seen
  • 01:23:01
    hurricanes, we've seen fires, we've seen other
  • 01:23:06
    types of tornadoes and other things that affect the
  • 01:23:10
    citizens of Texas in a similar way, but a different
  • 01:23:14
    type of event. You know, I think about this in terms of
  • 01:23:18
    the fires up in the panhandle, and I
  • 01:23:21
    hope that as we are looking at this event, we can maybe put
  • 01:23:25
    in place some kind of structure that we can look at all of those events.
  • 01:23:28
    I think all of the citizens kind of understand, you know, deserve that.
  • 01:23:31
    If we're looking into something that's causing havoc, wreaking havoc
  • 01:23:35
    on the Gulf coast that in other parts of the state they get the same
  • 01:23:38
    benefit. Absolutely. You know, we'll have to address kind of
  • 01:23:41
    the acute onset issues that this brought forth.
  • 01:23:44
    I think a comprehensive look at all the different types of issues that
  • 01:23:48
    different tdus deal with in various areas of the state is well
  • 01:23:51
    worth our time. Thank you. Okay.
  • 01:23:55
    All right, so now we'll move on to the agenda. So,
  • 01:23:58
    like I said, we're going to take up item number 19 1st. But before
  • 01:24:02
    that, Sheila, will you take us through the consent agenda and the
  • 01:24:06
    recusal list, which for the first time, I do not lead.
  • 01:24:10
    I'm not the leader in the clubhouse on the number of recusals.
  • 01:24:17
    Good morning. Commissioners recusal memos were filed in project
  • 01:24:21
    number 52761. The chairman
  • 01:24:24
    is recused from items 18 and 19, and commissioner Yaltman is
  • 01:24:28
    recused from items 816,
  • 01:24:31
    1819, and 24 through 27.
  • 01:24:35
    By individual ballot, the following items are placed on your
  • 01:24:38
    consent agenda. Items 13, 11,
  • 01:24:42
    13, 14, 17, 23,
  • 01:24:45
    24, and 26, and also by individual ballot,
  • 01:24:49
    the commissioners voted to place items on the consent agenda for the
  • 01:24:53
    rolls and project section. No one signed up to speak on those items,
  • 01:24:57
    and so the commissioner is voted to also place items
  • 01:25:00
    39 and 42 on the consent agenda. Thank you,
  • 01:25:03
    Sheila. I'd entertain a motion to approve the consent agenda as described
  • 01:25:07
    by Sheila. So moved. Aye. Second. I have a motion. A second. All those in
  • 01:25:10
    favor say aye. Opposed. Motion prevails.
  • 01:25:15
    So item 19 I am recused from. So I will turn
  • 01:25:19
    the meeting over to Commissioner Kobos. All right, thanks,
  • 01:25:23
    chair Gleason. Sheila, can you please lay out item number 19?
    EditCreate clip
  • Item 19 - Sheila lays out Docket 54657
    01:25:26
    Yes, ma'am. Item 19 is docket number
  • 01:25:30
    54657. This is the application of the
  • 01:25:33
    city of Lubbock, acting by and through Lubbock power and light to change
  • 01:25:37
    rates for wholesale transmission service. Before you is a
  • 01:25:41
    SOA proposal for decision. Lubbock power and Light and the
  • 01:25:44
    Office of Public Utility, council and commission staff each filed exceptions
  • 01:25:48
    to the PFD. The SOA ALJ filed a letter in response to
  • 01:25:51
    the exceptions and did not recommend any changes to the PFD. The commission voted
  • 01:25:55
    to grant oral argument in this docket, and commissioner Copas
  • 01:25:59
    filed a memo in the Stockholm. Thank you, Sheila. Before we move
  • 01:26:02
    forward with laying out the party's oral argument,
  • 01:26:06
    I would like to recognize city councilman from district number six in
  • 01:26:10
    Lubbock, Tim Collins, who's here with us today.
  • 01:26:16
    Thank you for being here.
  • 01:26:19
    And various members of the Lubbock Power and Light board
  • 01:26:23
    of directors. So as my memo lays out,
  • 01:26:27
    I voted to hear oral argument in this case. I propose that we give
  • 01:26:30
    each party ten minutes to provide their arguments, and that
  • 01:26:34
    given the complexity of the issues in this case,
  • 01:26:38
    that my preference would be to defer the ultimate decision on this case to a
  • 01:26:41
    future open, open meeting date.
  • 01:26:44
    Are you good with this path forward, Commissioner Jackson? Yes, I am.
  • 01:26:48
    Okay, great. Sheila, can you please call up the parties?
  • 01:26:52
    Yes, ma'am. And for this, for oral arguments
  • 01:26:55
    for both Lubbock and. I'll just. I'll just preview this for SP's
  • 01:26:59
    as well. We're going to do this a little bit differently. Rather than calling up
  • 01:27:02
    the parties individually, we're going to have all the parties come up at once just
  • 01:27:06
    for a more efficient way of conducting oral argument.
  • 01:27:09
    So at this time, will the representatives for OPUC,
  • 01:27:12
    LPNL and commission staff come up? And just for
  • 01:27:16
    order of oral argument, under our procedural rules, the party
  • 01:27:19
    that bears the burden of proof can open
  • 01:27:23
    and close the argument. So we will start with the applicant,
  • 01:27:27
    followed by OPUC and then commission staff in order for oral
  • 01:27:31
    arguments.
  • 01:27:34
    All right, so we will
  • 01:27:38
    start with Lubbock power and light, if possible. Chairman and commissioners,
  • 01:27:42
    I'd like to reserve three minutes for rebuttal.
  • 01:27:46
    Sorry, Rosalind Duberstein, on behalf of Lubbock power and light.
  • 01:27:48
    Yeah, we won't have rebuttal. We're just giving ten minutes for all argument.
  • 01:27:51
    Okay, thank you. Commissioner,
  • 01:27:55
    is it possible to close per the commission's rules?
  • 01:27:59
    Yes. So, under our procedural rules, the party with burden
  • 01:28:02
    of proof is allowed to both open and close.
  • 01:28:06
    And so with the presiding
  • 01:28:10
    officers permission, would you be reserving
  • 01:28:13
    time at the tail end of that for that? Yes, that's fine. All right.
  • Item 19 - Rosalind Duberstein, LP&L, 54657
    01:28:16
    Thank you, commissioner. Good morning. Chairman and commissioners.
  • 01:28:20
    Rosalind Duberstein, counsel for Lubbock power and light. On several
  • 01:28:24
    issues presented in this proceeding, the ALJ reached correct conclusions supported
  • 01:28:28
    by the evidence. However, the PFD's recommendation regarding the debt
  • 01:28:32
    service coverage ratio used to calculate the return is incorrect
  • 01:28:36
    and unreasonable. In its application, LPNL requested
  • 01:28:40
    a 1.5 debt service coverage, or DSC ratio, to calculate the
  • 01:28:44
    rate of return. This request is lower than LPNL's
  • 01:28:48
    current commission approved DSC ratio of 1.75.
  • 01:28:53
    A 1.5 DSC ratio is supported by the record evidence,
  • 01:28:57
    specifically by LPNL's bond covenants, and by the criteria of
  • 01:29:01
    the RFP. Despite this, the ALJ recommends limiting
  • 01:29:04
    LP's DSC ratio to 1.25.
  • 01:29:08
    The most crucial takeaway I have for you today is that a
  • 01:29:11
    1.25 DSC ratio will create severe
  • 01:29:15
    financial risk for LP and L and will cause LP and L to
  • 01:29:19
    operate at a loss. A 1.25 DSC ratio
  • 01:29:23
    is the minimum required by LPNL's bond covenants.
  • 01:29:26
    Use of this minimum to calculate the return would
  • 01:29:29
    provide no room for error. It would put LPNL
  • 01:29:33
    at risk of violating its bond covenants and incurring a
  • 01:29:36
    credit rating downgrade. This would jeopardize LPNL's
  • 01:29:39
    ability to borrow in the future and to continue contributing
  • 01:29:43
    to transmission build out in Texas. Like any MoU,
  • 01:29:47
    LP and L needs sufficient return dollars or margin over
  • 01:29:51
    and above its actual operating expenses to meet its debt service needs.
  • 01:29:56
    This is taken directly from staff's testimony in this case,
  • 01:29:59
    and it is widely known as a fundamental standard for
  • 01:30:03
    determining the appropriate rate of return for an MoU.
  • 01:30:06
    In fact, the PFD emphasizes this fundamental standard and
  • 01:30:10
    then contradicts itself by recommending a DSC ratio that
  • 01:30:14
    would be insufficient to cover LPNL's debt service costs and its
  • 01:30:18
    O and M by $3.4 million.
  • 01:30:21
    LPNL outlines this calculation and its exceptions.
  • 01:30:25
    This $3.4 million deficit based purely on
  • 01:30:28
    an inability to cover debt service and O and M does
  • 01:30:31
    not meet the fundamental standard for an appropriate rate of return.
  • 01:30:36
    Adopting a 1.25 DSC ratio will put put only more of a
  • 01:30:39
    penalty on Lubbock customers than they already bear
  • 01:30:43
    with that 3.4 million necessary to maintain transmission assets.
  • 01:30:47
    The ALJ also erred in not applying a 0.25 adder
  • 01:30:51
    to the DSC ratio. The RFP permits a
  • 01:30:54
    0.25 adder if a utility can show the cost effective
  • 01:30:58
    utilization of short term debt as a reasonable alternative to
  • 01:31:02
    long term financing. Since its last TCOSP proceeding,
  • 01:31:05
    LPNL's use of a form of short term debt saved transmission
  • 01:31:09
    ratepayers $3 million in debt service. No party
  • 01:31:13
    disputes this key fact. The ALJ focuses on
  • 01:31:16
    the conversion from short term to long term to disallow the adder,
  • 01:31:20
    but that conversion was the strategic utilization of short term debt.
  • 01:31:24
    It resulted in cost savings, and that would not have been possible but for
  • 01:31:29
    the short term debt. This evidence, in combination
  • 01:31:32
    with the financial insufficiency of the ALJ's DSC,
  • 01:31:35
    is an unreasonable and financially harmful result
  • 01:31:38
    for LP and L. As you know, the opportunity for an
  • 01:31:42
    adder is a recent revision to the RFP and a deviation from
  • 01:31:45
    many years of precedent where a 0.25 adder was presumed reasonable for
  • 01:31:49
    mous. LPNL has presented sufficient evidence to meet
  • 01:31:53
    the criteria of the adder in the most up to date RFP however,
  • 01:31:57
    if the commission finds LPNL's cost effective use of a short term debt alternative
  • 01:32:02
    does not satisfy that criteria, it begs the question,
  • 01:32:05
    what will qualify for the adder? The RFP change has far
  • 01:32:09
    reaching implications for mous and may warrant clarification.
  • 01:32:13
    As a final and crucial point, LPNL's projected $3.4
  • 01:32:17
    million deficit does not include the hold harmless credit required
  • 01:32:21
    by the settlement in docket number 47576.
  • 01:32:24
    Staff and OPEC's focus on that credit is a red herring.
  • 01:32:28
    The claim that LPNL's requested DSC ratio is based on
  • 01:32:31
    the credit is blatantly false. As opux witness specifically
  • 01:32:35
    conceded in testimony, the hold harmless credit is not included
  • 01:32:39
    in LPNL's requested tcoss. In this case, the hold harmless
  • 01:32:43
    credit is not and has never been funded out of tcos revenues.
  • 01:32:47
    The credit is only paid by LPNL's native load customers
  • 01:32:51
    in Lubbock. Here are the key facts for the
  • 01:32:54
    hold harmless credit. LP and L has been paying it in compliance
  • 01:32:58
    with the settlement. This is easily verifiable.
  • 01:33:01
    LPNL has never recovered that credit in tcost and it is
  • 01:33:05
    not proposing to do so in this docket. This is equally
  • 01:33:08
    verifiable in the last commission approved tcoas rates and
  • 01:33:12
    the rates requested in this proceeding. Discussion of the hold harmless
  • 01:33:16
    credit in the application has been misconstrued throughout this proceeding.
  • 01:33:20
    The concern that's mentioned in LPNL's direct testimony is not
  • 01:33:23
    that the hold harmless credit is in any way recovered through TCOS rates.
  • 01:33:27
    The concern is that LPNL does not have if LPNL,
  • 01:33:31
    excuse me, does not have tcos rates that are based on a
  • 01:33:35
    sufficient DSC ratio, then its retail customers
  • 01:33:38
    will be forced to subsidize subsidize. But those same customers are
  • 01:33:42
    already funding the hold harmless. This will increase the penalty
  • 01:33:45
    those customers already have to pay. LPNL respectfully urges
  • 01:33:49
    the commission to evaluate these verifiable facts regarding the hold harmless
  • 01:33:53
    credit and approve an appropriate DSC ratio that will
  • 01:33:56
    not impose this deficit on LP and L. I will
  • 01:34:00
    note that there are additional concerns about the consequences of this decision,
  • 01:34:04
    which are addressed in the letter from the chair of LPNL's board, Gwen Stafford.
  • 01:34:07
    It was filed in the stock in on June 10 and in summary,
  • 01:34:12
    LPNL contends that adopting the 1.5 DSC ratio that's
  • 01:34:16
    substantiated in the application is a reasonable outcome. It will
  • 01:34:19
    give LP and l appropriate financial protection and will not impose unfair costs
  • 01:34:23
    on transmission ratepayers. LPNL respectfully asks the
  • 01:34:27
    commission to reject the ALJ's DSC recommendation
  • 01:34:31
    and instead approve a ratio that will not risk LPNL's financial
  • 01:34:35
    stability or harm its retail customers. I'm available
  • 01:34:39
    for questions and I have representatives from LPNL here with me today as
  • 01:34:42
    well. Thank you.
  • 01:34:46
    All right, let me pause for just a moment and record. You'll have three minutes
  • 01:34:50
    and 335. Thank you. All right,
  • 01:34:56
    the next party that senator speak is the office of Public Utility Council.
  • 01:35:00
    If you'll state your name for the record, please. Good morning commissioners.
  • Item 19 - Julie Davis, OPUC, 54657
    01:35:03
    Julie Davis, special counsel with the Office of Public Utility Council.
  • 01:35:08
    I'll keep my comments brief. I have two points that I'd
  • 01:35:11
    like to address. The first, speaking to the debt service coverage ratio, we agree
  • 01:35:14
    with the ALJ that the 1.25 is appropriate.
  • 01:35:18
    I believe we and staff are aligned on this. The direct testimony of Mister Harvey
  • 01:35:22
    hall clearly identifies the hold harmless payment as a category of debt.
  • 01:35:26
    And despite what council would have you think, our statement continues.
  • 01:35:31
    While we admit that the hold harmless payment is not a specific line
  • 01:35:34
    item in the requested revenue requirement, LPNL is requesting
  • 01:35:38
    a DSE of 1.5 to provide sufficient revenues to meet the cash
  • 01:35:41
    obligation that the hold harmless payment supposedly
  • 01:35:45
    is included in. So we do believe that that hold harmless payment
  • 01:35:48
    is being a basis for that debt, and we think that's inappropriate to make
  • 01:35:52
    the recipients of a benefit pay for that benefit.
  • 01:35:56
    This was a condition of settlement and docket number 47576
  • 01:36:00
    and we believe that the commission's decision in this case, along with the
  • 01:36:04
    ALJ, should uphold that settlement as it is.
  • 01:36:07
    Further, the ALJ's recommendation in the PFD won't cause a
  • 01:36:10
    perverse use of short term debt by other agencies, as LPNL would have everyone
  • 01:36:14
    think. The rate filing package clearly requires a
  • 01:36:17
    showing that the debt was a reasonable alternative to long term financing,
  • 01:36:21
    and while we don't contest that at the time it was, it no longer is
  • 01:36:25
    being used as that. Utilities that use short term debt
  • 01:36:28
    as a mechanism to simply achieve a higher DSE ratio will
  • 01:36:32
    not be in a difficult position to prove that that funding was reasonable.
  • 01:36:36
    Adopting LPNL's position in this case would mean that
  • 01:36:39
    any utility that has ever used short term debt could argue for the
  • 01:36:42
    additional 0.25%, which undercuts the change
  • 01:36:46
    to that policy. The second point I'd like to make
  • 01:36:49
    goes to the ALJ's recommendations regarding the recovery of
  • 01:36:52
    pilot in this case. We disagree with the ALJ on that point, and I'd like
  • 01:36:56
    to speak a bit to that. Generally, the law does recognize
  • 01:37:00
    allowances for mous like LPNL to collect general fund transfers,
  • 01:37:04
    but unlike the other cases LPNL relies on in its briefing, the LJ
  • 01:37:08
    found that public Utility Regulatory act section 35.009
  • 01:37:12
    instead applies in this case, and that's because LPNL is required to have
  • 01:37:16
    a CCN for transmission facilities in ERCOT.
  • 01:37:19
    This section creates a specific condition when mous can recover payments
  • 01:37:23
    in lieu of taxes, just as some background those pilot fees
  • 01:37:27
    compensate municipalities for property tax revenue they otherwise can't
  • 01:37:30
    collect from an entity due to some tax exempt status.
  • 01:37:35
    35.009 says in relevant part that Maus can recover pilot
  • 01:37:39
    fees it pays to cities through wholesale taxes, unless their governing
  • 01:37:43
    body is also the governing body of that taxing entity. And in this case,
  • 01:37:47
    it's undisputed that LPNL is governed by the city of Lubbock.
  • 01:37:51
    The ALJ's recognize that LPNL's governing body is the governing
  • 01:37:55
    body of that taxing entity. However, determine the
  • 01:37:58
    outcome, which is the natural occurrence of this statute would be absurd
  • 01:38:02
    because it does exactly what it's designed to do. We recognize that
  • 01:38:05
    change is difficult in this, LPNL's first rodeo on this,
  • 01:38:08
    but this is the natural result of applying that statute.
  • 01:38:12
    So this argument really turns on whether or not the absurdity doctrine is being
  • 01:38:16
    properly applied. And we argue that case law, not only from the United
  • 01:38:20
    States Supreme Court, but the Texas Supreme Court, weighs in favor of finding that
  • 01:38:23
    the absurdity doctrine should not apply in this case.
  • 01:38:27
    The absurdity doctrine itself sets a high bar to counter the natural
  • 01:38:30
    outcome of legislation that, while inconvenient, broad, or even unattended, is nonetheless
  • 01:38:34
    clear. Further, the ALJ found that no ambiguity
  • 01:38:38
    in the statute existed, and LPNL did not argue that such an ambiguity existed.
  • 01:38:43
    As a result, this may be an unanticipated outcome,
  • 01:38:45
    particularly at the time the statute was passed, but it is the application
  • 01:38:49
    of law, and we would caution the commission from
  • 01:38:52
    reading into the statute rules or words that do
  • 01:38:56
    not exist that would change its meaning.
  • 01:38:59
    So we urge the commission to find that this pilot should not be
  • 01:39:03
    recovered and should also be removed from the cash working capital.
  • 01:39:07
    I'll conclude my statements there, but I'm happy to take any questions. Thank you.
  • 01:39:13
    All right, the last party to Senate for oral argument is commissioned staff.
  • 01:39:18
    Will you state your name for the record? Yes.
  • Item 19 - Andrew Aus, Comission Staff, 54657
    01:39:22
    Andy Ous for commission staff. Good morning,
  • 01:39:25
    chairman and commissioners. My name is Andy Aus. I am a one of the attorneys
  • 01:39:29
    who had the pleasure to work on this very complex and important docket for commission
  • 01:39:32
    staff. Just by way of introduction.
  • 01:39:36
    I went to tech for law school, so I did spend three
  • 01:39:39
    years in Lubbock. I think it's a great city with even better people.
  • 01:39:43
    But staff does find themselves at odds with
  • 01:39:47
    LPNL and Lubbock regarding a couple of issues with this
  • 01:39:50
    docket. You've already heard both parties before
  • 01:39:54
    me talk about the debt service coverage ratio. I'll talk about
  • 01:39:57
    that first, with the hold harmless payment being up.
  • 01:40:00
    I'll mention the hold harmless payment first and then move into the short term
  • 01:40:04
    debt issue afterwards. And then I will touch briefly on the
  • 01:40:07
    assignment of debt to transmission function, that is
  • 01:40:11
    before the commission today. With regard to the hold harmless
  • 01:40:15
    payment agreed upon in docket number 47,576,
  • 01:40:18
    the company stated that it needs the additional 25 x coverage in order to
  • 01:40:22
    recover the 22 million a year payment. It pays
  • 01:40:26
    for the hold harmless payment and accordingly, this was the reason why LP
  • 01:40:29
    and L requested a 1.5 x dsc ratio
  • 01:40:33
    because this payment was an integral part of the commission order in docket number 47576.
  • 01:40:38
    The hold harness payment is in no way a cost of LP
  • 01:40:41
    providing transmission service. It is a payment to ERCOT
  • 01:40:44
    transmission customers to mitigate the increased cost those customers would face
  • 01:40:49
    as a result of LP and L transferring load into the ERCOT system.
  • 01:40:52
    Accordingly, the hold harmless payment should not be used as a justification for
  • 01:40:56
    LP and L to increase rates for the very customers it
  • 01:41:00
    agreed to hold harmless. Moving on to the short term debt
  • 01:41:03
    issue for the debt service coverage ratio,
  • 01:41:07
    we believe that the SOA ALJ's decision in the PFD
  • 01:41:10
    regarding the treatment of short term debt is correct. LP and L and
  • 01:41:14
    there are exceptions to the proposal for the decision, states that by adopting
  • 01:41:18
    the rule as set forth in the PFD, it would create an artificial
  • 01:41:21
    requirement that every MoU always must employ a short
  • 01:41:25
    term debt during the test year to qualify for the 0.25
  • 01:41:28
    x adder staff does not agree with this assessment.
  • 01:41:31
    Staff evaluates an MoU's use of short term debt and whether the MoU
  • 01:41:35
    utilized such debt prudently and in cost effective manner
  • 01:41:38
    during the test year. LPNL's direct revolving note program,
  • 01:41:42
    otherwise known as DRNP, which staff agrees was short term debt,
  • 01:41:46
    ended in August of 2021. If LPNL is
  • 01:41:49
    allowed to rely on past instances of prudent short term debt use,
  • 01:41:53
    LPNL is effectively arguable that any past non current short
  • 01:41:57
    term debt should allow an MoU to qualify for this 0.25
  • 01:42:00
    x adder. Staff again reiterates that a 1.25 x DSC
  • 01:42:05
    ratio leaves LP with the ability to cover 100% of
  • 01:42:08
    its debts while maintaining a 25% cushion,
  • 01:42:11
    simply because LPNL's bond covenants require a
  • 01:42:14
    1.25 DSC ratio does not mean that LPNL
  • 01:42:18
    lacks a financial cushion. A DSC ratio of of 1.25 x
  • 01:42:22
    would allow LPL to cover more than 100% of its debts.
  • 01:42:25
    In other words, the 25% cushion is already contemplated here.
  • 01:42:29
    LPNL next argues that by adopting a 1.25 DSC
  • 01:42:33
    ratio, it will be forced to operate at a loss staff know. So the
  • 01:42:37
    result of this rate proceeding will be a commission authorized revenue requirement and the
  • 01:42:40
    LPNL, and that LPNL has a number of tools available,
  • 01:42:44
    including the filing of interim tcost proceedings up to two times per year,
  • 01:42:48
    that would allow to adjust and timely recover transmission costs.
  • 01:42:52
    I'm going to move on briefly to another issue before the
  • 01:42:56
    commission for consideration, and that is the assignment of debt to the
  • 01:42:59
    transmission function. Specifically in this case,
  • 01:43:02
    staff respectfully disagrees with the SOA ALJ regarding the decision
  • 01:43:06
    to allow LPNL to assign higher cost debt service to
  • 01:43:09
    the transmission function, which would result in different rates of
  • 01:43:13
    for different utility functions. The PFD misapplies the burden of
  • 01:43:17
    proof, resulting in a proposal that violates pura 35.004
  • 01:43:20
    A and 16 TAC section 25 192 C,
  • 01:43:24
    and it would interfere with the competitive market and conflicts with commission's
  • 01:43:28
    rate filing package. A. Utilities financing cost is a system
  • 01:43:32
    wide cost properly applied on a total company basis when setting
  • 01:43:36
    rates, and neither LPNL nor the PFD cites to any exception
  • 01:43:40
    to this practice. It is undisputed that LPNL's debt obligations,
  • 01:43:44
    which consist of general obligation and revenue bonds, are financing
  • 01:43:48
    cost for the LPNL system as a whole, with these bonds
  • 01:43:51
    being backed by LPNL revenues from any source in the LPNL system,
  • 01:43:55
    not just revenues originating either from transmission or from distribution
  • 01:43:59
    services. LPNL's debt issuances are still
  • 01:44:02
    backed by the revenues from its entire system. They are system wide cost and
  • 01:44:06
    the cost of repayment cannot reasonably be associated with any single function
  • 01:44:11
    as LPNL and the PFD propose. Pura section 35004
  • 01:44:15
    A requires a utility to provide wholesale transmission service
  • 01:44:19
    at rates comparable to its own use of its system. By allowing
  • 01:44:23
    LPNL to assign higher cost debt to the transmission function and lower cost
  • 01:44:27
    debt to the distribution function. LPNL's transmission service customers
  • 01:44:31
    across ERCOT would be burdened by rates that are based on a higher
  • 01:44:34
    rate of return than rates for LPNL's distribution customers.
  • 01:44:38
    The effects of this is to inappropriately and inequitably shift the
  • 01:44:42
    system wide financing costs from LPNL's local distribution
  • 01:44:45
    customers onto all other customers in the ERCOT system,
  • 01:44:48
    which is unreasonably discriminatory on its face because LPNL,
  • 01:44:52
    acting as a distribution service provider, essentially pays itself
  • 01:44:56
    for the transmission service it receives from LPNL acting as
  • 01:45:00
    a transmission service provider. Using the LPNL system,
  • 01:45:03
    rate of return for transmission and distribution service, as recommended
  • 01:45:07
    by staff, produces a wholesale transmission rate for LPNL that
  • 01:45:11
    are comparable to the LPNL's own use of its system, as the same
  • 01:45:15
    overall rate of return is applied for both transmission and
  • 01:45:18
    distribution services. Further, of note, many tsps are
  • 01:45:22
    non opt in entities that own and operate generation resources
  • 01:45:25
    in the competitive wholesale market. Adopting the precedent proposed in the PFD
  • 01:45:30
    would open the door to allowing these entities to shift the higher cost of financing
  • 01:45:34
    associated with the generation resources into regulated transmission rates,
  • 01:45:38
    effectively subsidizing their competitive operations through
  • 01:45:41
    their regulated rates. Such an outcome would clearly harm
  • 01:45:45
    competitive generation providers who have no captive customers to
  • 01:45:49
    shift cost onto and theme, and it would impair
  • 01:45:52
    the healthy functioning of the wholesale market as a whole. If adopted,
  • 01:45:57
    the PFD proposal might also open the door to allowing investor owned
  • 01:46:00
    utilities to assign higher cost equity financing to transmission
  • 01:46:04
    customers outside of their distribution footprint. This could result in an entire
  • 01:46:08
    new avenue of disputes as parties review and litigate the financing
  • 01:46:12
    situation associated with each and every utility project,
  • 01:46:16
    a burdensome and I contentious process that is unnecessary
  • 01:46:19
    if these financing costs are properly recognized and treated
  • 01:46:23
    as the system wide cost that they are. And with that,
  • 01:46:27
    I thank you for your time.
  • 01:46:39
    Give me just a moment.
  • 01:46:43
    Are you ready? All right. Roslyn Duberstein,
  • 01:46:46
    LPNL I'll start with the assignment of debt. In responding to
  • 01:46:50
    that issue, staff has not relied on any precedent or citation for
  • 01:46:54
    the total company basis rationale, and the ALJ correctly acknowledged
  • 01:46:57
    this. Whereas LPNL's direct assignment of the transmission
  • 01:47:01
    debt to the transmission function correlates to the projects that the debt
  • 01:47:05
    has funded. This is in line with direct assignment
  • 01:47:09
    and the cost causation principles that are outlined in the RFP and
  • 01:47:12
    generally accepted in rate making commission staff
  • 01:47:15
    makes the claim that LPNL is assigning higher cost debt to the transmission function.
  • 01:47:20
    This is plainly incorrect. The evidence has shown that the 2.76
  • 01:47:25
    interest rate that's assigned to the transmission function for the test year
  • 01:47:29
    is actually lower cost of debt than LPNL's last five issuances
  • 01:47:32
    since 2014, and that is available in the record evidence.
  • 01:47:36
    LPNL cannot selectively assign higher cost
  • 01:47:39
    debt. ERCOT must issue debt when their larger infrastructure
  • 01:47:43
    projects and capital needs are present. I'll move on
  • 01:47:47
    to the pilot issue raised by OPEC.
  • 01:47:52
    If the commission were to find against the ALJ
  • 01:47:56
    on this issue, it would overturn a longstanding practice
  • 01:48:00
    of ERCOT, including a pilot transfer in their TCR rates.
  • 01:48:04
    While the legislative history is of course not binding, it is highly
  • 01:48:08
    informative in this situation. It shows that
  • 01:48:12
    this was designed to be a completely separate taxing jurisdiction
  • 01:48:15
    and that it's for projects that are outside of the city limits.
  • 01:48:20
    This would be an overhaul of the types of
  • 01:48:23
    transfers that have been routinely included in TCR
  • 01:48:27
    rates, and an application of a statute that we've never seen before.
  • 01:48:32
    I will say that the ALJ, and in a different recent
  • 01:48:36
    TCR proceeding 52715 found
  • 01:48:39
    against this argument and that the commission affirmed that decision.
  • 01:48:44
    Also, OPEC's witness in this case has historically promoted
  • 01:48:48
    the inclusion of pilot even after this legislation was enacted. So I think
  • 01:48:52
    the position seems inconsistent, consistent with precedent and the routine
  • 01:48:56
    inclusion of pilot in TCR rates. Finally, on the debt service
  • 01:49:00
    coverage ratio,
  • 01:49:03
    the hold harmless credit is a consideration in the overall finances
  • 01:49:07
    for LPNL for both its retail customers and its TCR.
  • 01:49:11
    It is not the basis for the DSC ratio.
  • 01:49:14
    Request 1.25 is the minimum required
  • 01:49:18
    by the bond covenants, and if LPNL has
  • 01:49:22
    any error or anything that slips up, they risk violating
  • 01:49:26
    those bond covenants. That is the number one rationale.
  • 01:49:30
    The adder is supported by the short term debt, as I
  • 01:49:33
    mentioned earlier.
  • 01:49:36
    Excuse me, sorry. As I mentioned earlier,
  • 01:49:40
    it may warrant some clarification as to the recent RFP change
  • 01:49:44
    because LPNL has shown that they've used short
  • 01:49:47
    term debt and they've done so in a cost effective manner. No party
  • 01:49:51
    has disputed this fact. So it is unclear how that is not a
  • 01:49:55
    reasonable and cost effective use of short term debt. It is inherently
  • 01:49:59
    in lieu of long term debt because LPNL specifically utilized
  • 01:50:03
    short term debt at that time instead of long term financing.
  • 01:50:06
    I would also say that staffs argument with regard to
  • 01:50:10
    maybe limiting the short term debt to use during the test year or
  • 01:50:14
    any other timeliness limitation. There's no such thing in the language of the
  • 01:50:18
    RFP that's reading in something that is not there,
  • 01:50:21
    and they have conceded that
  • 01:50:24
    it was the cost effective use of short term debt. So we
  • 01:50:28
    would ask the commission not to impose any test year
  • 01:50:32
    time requirements when they do not exist in the RFP.
  • 01:50:36
    That's not in line with the general financing that would
  • 01:50:39
    be required. There's an overall financing strategy
  • 01:50:43
    over the course of many years. It couldn't possibly be limited. So we ask that
  • 01:50:47
    you grant the 1.5. Thank you.
  • 01:50:52
    All right, that concludes oral arguments. Okay.
  • 01:50:57
    And I would request that we defer decision to
  • 01:51:01
    future open meeting. Y'all are good with that?
  • 01:51:04
    Yes. All right, thank you all.
  • 01:51:18
    So, Sheila, it is 1128 and 32 seconds.
  • 01:51:22
    So I think that's all we're going to get through before we meet
  • 01:51:25
    with the attorney general at 1130. So like
  • 01:51:29
    I said at the outset, we have a time certain to meet with our outside
  • 01:51:32
    attorneys at 1130, and then we'll take a lunch.
  • 01:51:36
    So what we'll do is we'll convene our closed session,
  • 01:51:40
    then come back out and start the open meeting back
  • 01:51:44
    up, but not take. Not start back up on the contested case
  • 01:51:48
    docket until 01:00 time certain. Does that work for everybody?
  • 01:51:51
    Okay, then. Having convened a duly noticed
  • 01:51:54
    open meeting, the commission will now, at 11:29 a.m.
  • 01:51:59
    on July 11, 2024, hold a closed session pursuant
  • 01:52:02
    to chapter 551 of Texas Government Code.
  • 01:52:05
    It will consult with its attorney pursuant to section 551.071
  • 01:52:10
    of the Code, deliberate personnel matters pursuant to section 551.074
  • 01:52:15
    of the Code, and deliberate security matters pursuant to section 551.076
  • 01:52:20
    of the Code. We'll be back at 01:00 okay,
  • 01:52:32
    we will reconvene our open meeting at 01:05
  • 01:52:35
    p.m. so just a bit of procedural
  • 01:52:39
    stuff to cover. We have some folks
  • 01:52:42
    that want to comment on item number number 16.
  • 01:52:45
    So I'm going to take that out of order so we can hear from them
  • 01:52:49
    and then deliberate that docket so they don't have to sit here
  • 01:52:53
    the rest of the time. And then because we grant oral
  • 01:52:57
    argument on the SP's case, and we are going
  • 01:53:00
    to give them 15 minutes, I'm going to take that up at the end of
  • 01:53:04
    the contested case dockets. End of the contested case dockets. Got it.
  • 01:53:07
    Okay. All right. Sheila, will you call up
  • 01:53:11
    item number 14, please? Item number 16, please.
  • Item 16 - Sheila lays out Docket 56354
    01:53:14
    Yes, sir. Item 16 is ducat number 56354.
  • 01:53:18
    This is the application of undying, LLC for authority
  • 01:53:21
    to change rates. Commission staff filed an appeal of order number three. The commission
  • 01:53:26
    heard oral argument from the parties at the June 13 meeting, but did
  • 01:53:29
    not take action on the appeal at that time. The appeal
  • 01:53:32
    is before you now, and Chairman Gleason filed a memo in this document.
  • 01:53:35
    And as you mentioned, we have two members from the public,
  • 01:53:38
    or perhaps parties that signed up to speak on this item.
  • 01:53:42
    Ed, I also believe is the mayor from League city here
  • 01:53:46
    as well,
  • 01:53:49
    and the mayor from the. Nice to have you, sir. All right,
  • 01:53:52
    so since this is a bit untraditional, do you want.
  • 01:53:56
    At what time limit do you want to set for public comments on this.
  • 01:53:58
    Let's do two minutes. Two minutes. All right. And just so everybody
  • 01:54:02
    knows, typically we don't take public comment on contested cases, but I know you
  • 01:54:05
    all were told to show up today and so happy to hear from you.
  • 01:54:09
    Yes, sir. Yes, sir. Would you like to start with the mayor? Yes, sir.
  • 01:54:13
    All right, if you'll come up with.
  • 01:54:33
    I'm Ken Panton and I'm the mayor of Beach City.
  • 01:54:36
    And I do appreciate,
  • 01:54:40
    mister chairman and commissioners, for allowing us to speak.
  • 01:54:43
    It's just really nice of you to do that for
  • 01:54:47
    us. As you're aware,
  • 01:54:51
    Undyne used test year April 20 April 1,
  • 01:54:55
    2022 to March 31,
  • 01:54:57
    2023 for proposed rate increase.
  • 01:55:02
    And Undyne stated this test period was
  • 01:55:05
    to reduce time and expense required to prepare
  • 01:55:09
    new rate code. In order to change rates,
  • 01:55:13
    the commission requires that the application
  • 01:55:16
    be based on a test year as the most recent
  • 01:55:20
    twelve month period beginning
  • 01:55:24
    on the first day of a calendar or fiscal year quarter
  • 01:55:28
    for which operating data for a retail public utility
  • 01:55:32
    are available. It is clear that the test year
  • 01:55:36
    that Undyne used does not meet this requirement.
  • 01:55:40
    And on April 29, as per the April
  • 01:55:44
    29, 2024, as per the record, commission staff
  • 01:55:48
    filed a recommendation that Undyne should cover the period
  • 01:55:51
    from January 1 through December 31,
  • 01:55:55
    2023, unless operating
  • 01:55:58
    data is not available and that Undine
  • 01:56:02
    has not sufficiently demonstrated that operating data
  • 01:56:06
    for the period covering April 1 through December 31,
  • 01:56:11
    2023, was unavailable.
  • 01:56:16
    On behalf of the residents of Bay Ridge
  • 01:56:19
    Oaks, Houston Point and Ocean park
  • 01:56:23
    in Beach City, that Undyne, we ask
  • 01:56:27
    that Undyne's application be denied.
  • 01:56:32
    So I appreciate it, and thank you very much that
  • 01:56:35
    you all let us speak today. Thank you, sir. Thank you for being here.
  • 01:56:38
    Thank you, sir. Thank you.
  • 01:56:42
    All right, there's one other person that signed up to speak, and I'm
  • 01:56:46
    trying to butcher this name, but the first name is Anders. The last
  • 01:56:49
    name may be Moomoolitus. Said it
  • 01:56:53
    perfect. Welcome. How do you do?
  • 01:56:58
    My name is Anders Dimitri Moomilitas. I am a resident
  • 01:57:01
    down in Beach City and we've had a
  • 01:57:05
    never ending list of troubles with this particular utility.
  • 01:57:10
    And it wasn't just them. There was the utility before them as well.
  • 01:57:13
    The last price increase that came was, I believe, in 2017
  • 01:57:17
    or 2018 when it was still owned by
  • 01:57:22
    Niro. I believe Niro utility.
  • 01:57:26
    Now, the price increase came and we were
  • 01:57:29
    expecting, you know, that to be put towards capital improvements.
  • 01:57:33
    We've had a distressed water system for
  • 01:57:37
    many decades now. It's been triaged
  • 01:57:41
    with patch after patch after patch, but never a
  • 01:57:44
    fix. And definitely never a change. And now
  • 01:57:48
    they've come across and they're asking for another price increase to
  • 01:57:52
    bring this up. And we were told very specifically and pointedly
  • 01:57:56
    on that first price increase with Niro that if we came
  • 01:58:00
    and appealed to the Public Utilities Commission, that they
  • 01:58:03
    were going to jack our rates even higher and
  • 01:58:07
    to not come here. So it was kind of an intimidation tactic. And now
  • 01:58:11
    we've been told by undying directly that
  • 01:58:15
    they are not. They're not bound to do
  • 01:58:19
    these things. You know, this increase is coming one way or another.
  • 01:58:23
    They're not very interested in bringing that up. And I
  • 01:58:26
    have problems with this because in my job, you know,
  • 01:58:30
    I do work in compliance and accounting.
  • 01:58:33
    And seeing some of the numbers that have come through,
  • 01:58:36
    we found three different sets of numbers
  • 01:58:40
    about their test, their test year numbers. We noticed.
  • 01:58:45
    We got our notice that came to us,
  • 01:58:48
    which was drastically different, much higher.
  • 01:58:51
    And then Undine had sent a representative out, Rick Melcher
  • 01:58:55
    was senior vice president of
  • 01:59:00
    PR, I believe, who came to our community and tried to
  • 01:59:03
    tell our community that this is going to be a very small,
  • 01:59:06
    effective rate increase, and it does not seem
  • 01:59:10
    that way. So thank you. Thank you for being here, sir.
  • 01:59:15
    Okay, so, as Sheila said, I filed a memo in this
  • 01:59:18
    docket, you know, really focusing on the burden of proof
  • 01:59:22
    that undine has. And so,
  • 01:59:26
    you know, and not feeling like we can grant the good
  • 01:59:29
    cause exception to the test year requirement. Do you have any thoughts on the memo?
  • 01:59:34
    I'm in agreement with your recommendations. Your memo.
  • 01:59:38
    I'm also in agreement with your recommendations,
  • 01:59:43
    and I will entertain a motion to grant, in part, staff's appeal of order
  • 01:59:46
    number three, consistent with my memo in this discussion. So moved.
  • 01:59:50
    Aye. Second. Have a motion? A second. All those in favor say aye.
  • 01:59:53
    Opposed. Motion prevails. Thank you both for being here today.
  • 01:59:59
    All right, Sheila, let's start back over at the top. So I think that
  • 02:00:03
    item one was consented. So that brings us to item number two. Will you lay
  • 02:00:06
    that out for us? Yes, sir (item:2: Sheila lays out Docket 54662). Item two is docket number 54662.
  • 02:00:11
    This is the petition of Highlander SM one LLC
  • 02:00:15
    to amend crystal clear special utility districts CCN
  • 02:00:19
    in Hays county by streamlined expedited release. Before you
  • 02:00:23
    is a motion by the petitioner requesting to withdraw the application.
  • 02:00:26
    No responses were filed to the motion, but the petitioner stated in their
  • 02:00:30
    motion that they had conferred with crystal Clear said, and that crystal clear does
  • 02:00:33
    not oppose the withdrawal. And Chairman Gleason filed a memo in this docket.
  • 02:00:37
    So same thing in this memo. I recommended that the commission find good
  • 02:00:41
    cause exception to allow the petitioner to withdraw its petition.
  • 02:00:45
    Thoughts? Agreed? I agree as well.
  • 02:00:51
    Then I will entertain a motion to find that good cause exists to grant
  • 02:00:54
    the motion to withdraw and dismiss this petition without prejudice,
  • 02:00:58
    consistent with my memo. So moved.
  • 02:01:01
    Aye. Second motion a second. All those in favor say aye.
  • 02:01:04
    Opposed. Motion prevails. Thank you.
  • 02:01:11
    So item that takes us to
  • 02:01:14
    item twelve. Item twelve is not going to be taken up,
  • 02:01:18
    so that'll bring us to item 15. Sheila,
  • 02:01:22
    you weigh out item 15, please?
  • 02:01:25
    Yes, sir. And just may I add one thing?
  • 02:01:29
    Can we go back to twelve for just a moment so I can give the
  • 02:01:30
    commissioners an update? Commissioner advising filed a draft preliminary
  • 02:01:34
    order in this docket. We would like some additional time just to review
  • 02:01:37
    that and bring it back to you at a future of a meeting. I just
  • 02:01:40
    want to put that out there in case there are any questions from the parties.
  • 02:01:43
    Thank you for that clarification. And then we'll go back to 15, if that's all
  • 02:01:46
    right with you. Absolutely. All right.
  • Item 15 - Sheila lays out Docket 56328
    02:01:50
    Docket number 15 is 56328. The ratepayers
  • 02:01:54
    appeal of the decision by crossroads utility services
  • 02:01:58
    and south puta water control and improvement district number one
  • 02:02:01
    to change rates. Before you is a proposal for decision that
  • 02:02:05
    recommends dismissal of this appeal. No corrections or exceptions were
  • 02:02:08
    filed if filed, a memo recommending changes to the order.
  • 02:02:11
    And Chairman Gleason also filed a memo. So,
  • 02:02:15
    memo, basically to adopt the PFD consistent with commission
  • 02:02:18
    council's memo. Thoughts? Approved.
  • 02:02:21
    Agreed? Yeah, I'm agreed with that. Then I will entertain a motion to adopt the
  • 02:02:25
    PFD consistent with my memo and commission council's memo. So moved.
  • 02:02:29
    Second. Have a motion. A second. All those in favor say aye. Aye. Opposed?
  • 02:02:33
    Motion prevails.
  • 02:02:37
    Okay, so that'll take us to item 20.
  • Item 20 - Sheila lays out Docket 54812
    02:02:40
    Sheila, will you lay out item 20, please? Item 20
  • 02:02:44
    is docket number 54812. The application of El
  • 02:02:47
    Paso electric to update schedule number Covid-19 in
  • 02:02:52
    compliance with docket number 52195.
  • 02:02:55
    Before you is a SOA proposal for decision. The city of El Paso
  • 02:02:59
    filed exceptions to the PFD. The SOA ALJ filed
  • 02:03:03
    a letter stating that she does not recommend any changes to the PFD.
  • 02:03:06
    and I filed a memo recommending changes to the order. Thank you, Sheila.
  • 02:03:10
    So I initially will say I
  • 02:03:13
    thought about consenting this, and then as I talked about it and thought about it
  • 02:03:16
    more, I know another one of these is either going to be filed
  • 02:03:20
    or has been filed. I was a little struck as odd
  • 02:03:23
    that we were going to keep booking Covid-19 expenses.
  • 02:03:26
    I thought that was a little strange. And so we worked through it in
  • 02:03:30
    my briefing, and I know that there's. It's authorized in an order,
  • 02:03:35
    but I really think we need to talk about how long and
  • 02:03:39
    in the order that was signed. There's no end
  • 02:03:42
    date for this, which I thought was odd as well.
  • 02:03:46
    And so, you know, after the briefing, I think we're in a position that
  • 02:03:50
    I'm going to say we should approve this, but I think we need to
  • 02:03:54
    have commission, council, and staff look at how long we
  • 02:03:57
    should be doing this, and if there's a way that we can
  • 02:04:01
    go back into that project potentially and have an end date to this,
  • 02:04:04
    because I don't know, going into 23,
  • 02:04:09
    24, 25, what kind of COVID related expenses we're
  • 02:04:12
    going to have. And so, like I
  • 02:04:15
    said, I'm in favor of moving forward with this, but I think we
  • 02:04:19
    need to maybe look at this expense going forward and
  • 02:04:22
    how appropriate it is. I'm in agreement.
  • 02:04:26
    I think that's prudent. I had the same thoughts as well as where's
  • 02:04:29
    the end date? I'm good.
  • 02:04:33
    So I don't know what the right path forward for this. I know,
  • 02:04:36
    Sheila, we talked about posting project number
  • 02:04:39
    50664 for a future open meeting once you
  • 02:04:43
    all kind of look into what a path forward might be for us to address
  • 02:04:46
    that order. The initial. Yes, sir. We will work on that and confer
  • 02:04:51
    with you on bringing this back to the future. But meaning for project number 50664.
  • 02:04:55
    Okay. Thank you. I might say that this is also another reason not to settle,
  • 02:04:59
    not to have black box settlements. You're almost going to
  • 02:05:02
    get me to agree with you.
  • 02:05:05
    Okay. And just to clarify and taking
  • 02:05:09
    action on the PFD at this point. Correct. So with that,
  • 02:05:13
    I'd entertain a motion to adopt the PFD with the changes to the order
  • 02:05:17
    recommended by commission council. So moved. A second.
  • 02:05:21
    A motion. A second. All those in favor say aye. Aye.
  • 02:05:24
    Opposed? Motion prevails.
  • 02:05:28
    All right, we're going to skip over 21
  • 02:05:31
    and save that for the end. So, Sheila, that'll bring us to item number 22.
  • 02:05:35
    Will you lay out item number 22, please?
  • Item 22 - Sheila lays out Docket 55995
    02:05:38
    Item number 22 is second number 55995,
  • 02:05:42
    the compliance filing for Centerpoint concerning rider,
  • 02:05:46
    SRC and ADFEt refund of system restoration
  • 02:05:49
    charges before you as a proposed order. No corrections or
  • 02:05:53
    exceptions were filed. Chairman Gleason filed a memo in this docket.
  • 02:05:57
    Follow another memo. Thoughts, comments on the memo?
  • 02:06:01
    I'm in agreement with your recommendations in your memo.
  • 02:06:04
    I am as well, supportive.
  • 02:06:07
    Okay. I'll entertain a motion to modify
  • 02:06:10
    the proposed order consistent with my memo. So move
  • 02:06:14
    a motion a second. All those in favor say aye. Aye. Opposed?
  • 02:06:18
    Motion prevails.
  • 02:06:21
    All right, Sheila, I think that'll take us to item
  • 02:06:24
    number 25. We lay
  • Item 25 - Sheila lays out Docket 56225
    02:06:27
    out item number 25, please. Item 25 is ducat
  • 02:06:31
    number five. 6225, the application of El Paso to
  • 02:06:35
    update its generation cost recovery rider
  • 02:06:38
    related to Newman. Unit six before you, is it draft preliminary order.
  • 02:06:42
    And chairman Gleason filed a memo in this docket as well. Filed a
  • 02:06:46
    memo in this docket. Thoughts, comments on the memo?
  • 02:06:50
    I'm in agreement with your findings on the briefing issues.
  • 02:06:54
    I am as well. I think that you're filing
  • 02:06:58
    each one of these memos consistent with the number of recusals
  • 02:07:03
    that you have. And I think that's great. I'm trying to carry my weight.
  • 02:07:07
    That's what I'm trying to do. That's what we do in my office. Totally supportive.
  • 02:07:11
    Supportive of your memo. Thank you. I will entertain a motion
  • 02:07:15
    to approve the preliminary order consistent with my memo.
  • 02:07:18
    So move aye. Second. I have a motion in a second. All those in favor
  • 02:07:21
    say aye. Aye. Opposed? Motion prevails.
  • 02:07:25
    26 was consented, Sheila. That will bring us to item
  • Item 27 - Sheila lays out Docket 56693
    02:07:28
    number 27. Yes. Item 27 is docket number 56693.
  • 02:07:33
    The application of Entergy Texas to amend its
  • 02:07:37
    certificate of convenience and necessity to construct a portfolio of dispatchable
  • 02:07:41
    generation resources. Before you is a draft preliminary order.
  • 02:07:46
    So I was okay with the draft preliminary order and
  • 02:07:50
    would approve it. Happy to hear any thoughts.
  • 02:07:53
    I was okay with it as well. Yeah, I'm in agreement as well.
  • 02:07:57
    Very much need the generation. I think we should
  • 02:08:00
    approve it. It's incumbent upon the competitors in this market out
  • 02:08:04
    there and everybody else to prove that the costs are warranted and the generation
  • 02:08:07
    is needed. And I expect them to do it. Okay. All right,
  • 02:08:11
    then I'd entertain a motion to approve the preliminary order consistent
  • 02:08:14
    with our discussion. So moved. Second. I have a motion. A second.
  • 02:08:17
    All those in favor say aye. Aye. Opposed?
  • 02:08:20
    Motion prevails. Okay, so we are going to
  • 02:08:24
    go back to item number 18,
  • 02:08:28
    an item which I'm recused, and I will turn it over to Commissioner
  • 02:08:31
    Kobos. All right, thank you. Sheila. Can you please lay out item
  • Item 18 - Sheila lays out Docket 52728
    02:08:35
    number 18? Item number 18 is docket 52728,
  • 02:08:40
    the application of the city of college station to change
  • 02:08:43
    rates for wholesale transmission service. The commission's order on
  • 02:08:47
    rehearing in this docket was filed on May 23.
  • 02:08:50
    The city of College Station filed a timely second motion
  • 02:08:54
    for rehearing, and Commissioner Kobos filed a memo in this docket.
  • 02:08:58
    Yes. So the memo essentially would grant the second
  • 02:09:02
    motion for a hearing for limited purposes and making the clarifying changes in the memo.
  • 02:09:07
    I think the clarifications are right on. I agree as well.
  • 02:09:12
    All right. With that, I would entertain a motion to grant
  • 02:09:16
    the second motion for rehearing to make the clarifications set
  • 02:09:20
    forth in my memo and issue out an order on rehearing. Shall move
  • 02:09:23
    aye. Second. All in favor say aye.
  • 02:09:26
    Aye. Any opposed? All right,
  • 02:09:29
    motion passes. All right then,
  • 02:09:33
    next we will finish out by calling up item number
  • 02:09:37
    21. Sheila, will you lay out item 21, please?
  • Item 21 - Sheila lays out Docket 55255
    02:09:40
    This is docket number five 5255. The application
  • 02:09:44
    of Southwestern Public Service Company to amend its CCN
  • 02:09:47
    to construct generation facilities in Lamb County, Texas and
  • 02:09:51
    Lea County, New Mexico. Let's see before
  • 02:09:54
    you is a SOA proposal for decision. All the parties filed exceptions.
  • 02:09:58
    The SOA ALJ filed a response that recommended Anhejdehe recommended
  • 02:10:02
    adding one ordering paragraph to the PFD. The commission voted to hear
  • 02:10:06
    oral argument in this docket. Chairman Gleason filed a memo
  • 02:10:09
    in the stocket. I'll leave
  • 02:10:13
    it to you there. Thank you, Sheila. So follow the
  • 02:10:16
    memo on this one. You know, we spent a lot of time, my briefing on
  • 02:10:19
    this pretty complex issue. So my
  • 02:10:23
    request would be that we hear oral argument today
  • 02:10:26
    and then I make a decision on this at a future open meeting,
  • 02:10:29
    if you are good with that. Yes. Sheila,
  • 02:10:33
    will you call up everyone for oral argument, please?
  • 02:10:36
    Yes. We have six parties that have signed up for oral argument
  • 02:10:40
    as we did previously for the LP nautical. We'll have all the parties come up
  • 02:10:44
    for the order. We will start with the party that bears the burden
  • 02:10:48
    of proof. In this case, the applicant commission staff traditionally goes last
  • 02:10:52
    hope for the parties know the order in between those. So let's see
  • 02:10:57
    parties go ahead and come on up to the table.
  • 02:11:23
    All right, we'll start with the company.
  • Item 21 - Andrea Stover, SPS, Docket 55255
    02:11:27
    Good morning. Andrea Stover, on behalf of SP's and with
  • 02:11:30
    me today is Adrian Rodriguez, president of
  • 02:11:33
    SP's and Brooke Trammell, vice president,
  • 02:11:36
    regional vice president of regulatory and pricing.
  • 02:11:43
    Mister chairman and commissioners, SP's appreciates the opportunity
  • 02:11:46
    to speak to you today about the merits of its CCN application pending
  • 02:11:50
    in docket 55255 and to answer
  • 02:11:53
    any questions the commissioners may have. Like much of the rest of Texas
  • 02:11:57
    in the country, SP's is facing significant load growth on its system
  • 02:12:01
    and it must also meet the requirements of the Southwest power pool,
  • 02:12:04
    including complying with the planning reserve margin instituted
  • 02:12:08
    recently. SP's takes its obligation to
  • 02:12:11
    serve its customers safely and reliably very seriously.
  • 02:12:15
    And it keeps that obligation top of mind
  • 02:12:18
    as it plans its future capacity needs in 2022.
  • 02:12:22
    As impacts from the pandemic were receding, the extent of SPSS future
  • 02:12:26
    load growth began to crystallize. Its load projections for 2026
  • 02:12:30
    and 2027, coupled with SPP's increased planning reserve margin
  • 02:12:34
    from 12% to 15%, spurred SP's into action,
  • 02:12:38
    and it issued a request for proposal for generation capacity.
  • 02:12:42
    Ultimately, SP's conducted an
  • 02:12:46
    RFP overseen by an independent evaluator, which was open
  • 02:12:50
    to all types of generation resources to evaluate
  • 02:12:53
    the bids. SP's used quantitative and qualitative criteria and
  • 02:12:57
    analyzed the potential solutions using a sophisticated power planning model
  • 02:13:01
    called encompass. SP's selected
  • 02:13:04
    the most reliable and economic options among the beds,
  • 02:13:08
    and its recommended portfolio includes the life extension of two existing
  • 02:13:12
    gas plans, the three self build solar projects,
  • 02:13:16
    a single self build battery project, and two ppas, one with an existing
  • 02:13:20
    generation, a gas natural gas generation, and one with a
  • 02:13:24
    new battery project. Each of
  • 02:13:28
    the resources in the recommended portfolio reflect different benefits,
  • 02:13:31
    including dispatchability, zero fuel costs,
  • 02:13:34
    and significant tax credits that will be passed directly back to customers.
  • 02:13:40
    The SP's selected the recommended portfolio based on the available alternatives
  • 02:13:45
    that were provided in response to the RFP.
  • 02:13:48
    It did not compare the bids to other hypothetical resources
  • 02:13:51
    that were not available to build. We appreciate the
  • 02:13:55
    hard work of the administrative law judges, and we support the PFDs recommendation
  • 02:13:58
    to approve the SP's billed solar projects and to grant SP's a good cause exception
  • 02:14:02
    so that it may flow those tax credits back to customers as
  • 02:14:05
    soon as possible. However, we disagree with the PFD's
  • 02:14:09
    conclusions on three issues. First, we request that
  • 02:14:13
    the commission approve the proposed self build battery project.
  • 02:14:17
    This project provides critically needed dispatchable energy to
  • 02:14:21
    serve SP's customers and to meet the SPP planning reserve margin.
  • 02:14:25
    SPSS selection of the battery involved rigorous analysis of the resources bid
  • 02:14:28
    into the RFP and was a reasonable choice among the available options.
  • 02:14:33
    Second, we asked the commission to reject the imposition of performance guarantees for
  • 02:14:37
    the solar projects, which are unprecedented, unnecessary, and not
  • 02:14:40
    supported by the record.
  • 02:14:43
    The guarantees are particularly problematic because there's no provision to address force majeure
  • 02:14:48
    scenarios in which SP's has no control.
  • 02:14:52
    The removal of these guarantees will not relieve SP's of its obligation to ensure
  • 02:14:56
    the solar projects are operated prudently and available to the greatest extent
  • 02:14:59
    possible. And finally, we request
  • 02:15:03
    the commission reject the requirement that SP's flow tax credits to
  • 02:15:06
    customers before it begins recovering its costs for these projects.
  • 02:15:10
    SP's proposed to flow tax credits to customers through its fuel clause so that
  • 02:15:14
    customers would realize those benefits as quickly as possible
  • 02:15:18
    because SP's will likely have to transfer credits in order to realize their
  • 02:15:22
    benefits. Because of its current tax position, it's doing so,
  • 02:15:25
    and it's flowing those credits to customers before it
  • 02:15:29
    will be able to realize it themselves.
  • 02:15:33
    But the tax credits are benefits intended to offset the cost. The projects
  • 02:15:37
    themselves and to credit customers before those costs are reflected in SP's rates
  • 02:15:40
    would be inequitable. I'm going to reserve the balance of my time to close
  • 02:15:45
    as the applicant. Thank you.
  • 02:15:51
    All right, which party is going to go next?
  • Item 21 - Jule Davis, OPUC, Docket 55255
    02:15:58
    Good afternoon commissioners. Julie Davis, special counsel with the Office of
  • 02:16:01
    Public Utility Council. I appreciate the opportunity to speak today on
  • 02:16:05
    these issues. While we understand where the ALJ was coming from and agree with
  • 02:16:09
    several of the findings, we disagree with the overall conclusion and urge the commission
  • 02:16:12
    to reject the application in its entirety. As a preliminary matter,
  • 02:16:16
    though, I do want to address the letter issued by President Adrian
  • 02:16:19
    Rodriguez. This letter should not be included in the record for the case and should
  • 02:16:23
    not be considered by the commission. One it is procedurally
  • 02:16:26
    inappropriate. No puck joined the letter filed late last night in response.
  • 02:16:30
    Mister Rodriguez is a licensed attorney in the state of Texas and has practiced
  • 02:16:34
    before. This commission is fully aware of the procedural requirements
  • 02:16:38
    when a party is allowed to give exceptions to the PFD.
  • 02:16:41
    Reply to the exceptions to the PFD and we
  • 02:16:44
    see that this letter is nothing more than adding arguments
  • 02:16:48
    outside the bounds of the procedural schedule set. For that reason, we ask
  • 02:16:52
    that this letter be clearly kept out of the official record and precludes from being
  • 02:16:55
    offered as evidence or considered by the commission pursuant to section
  • 02:16:59
    20010 60 of the Texas Government Code and under 16
  • 02:17:03
    tact 22.226.
  • 02:17:07
    Going to the substance of the case before us today, the RFP
  • 02:17:10
    clearly favored renewable resources and was fundamentally flawed.
  • 02:17:14
    As a result. While it was technically open to
  • 02:17:17
    all resources, it was placed on Excel's webpage for renewable developers.
  • 02:17:21
    Every page listed this as a renewable RFP.
  • 02:17:25
    So while it was technically open to all resources, it was clearly
  • 02:17:29
    indicative of a preference for renewable energy.
  • 02:17:32
    Further, SP's did not propose any self build thermal projects for
  • 02:17:35
    consideration, nor did it solicit bids from thermal developers
  • 02:17:39
    to counteract influential statements favoring renewables from its
  • 02:17:42
    leadership on its webpage and again in the RFP itself.
  • 02:17:46
    So it's no surprise today that thermal resources are not before us
  • 02:17:49
    and were not seriously considered by SP's in developing this renewable
  • 02:17:54
    recommended portfolio. Conveniently, it also meant that it didnt
  • 02:17:58
    compare the cost of potential thermal development to the relatively high prices
  • 02:18:01
    of the resources in the CCN today.
  • 02:18:05
    To my second point, SP's has not shown that the self build solar projects
  • 02:18:09
    will improve service to customers. SPSS load forecast
  • 02:18:13
    has load forecasts have changed throughout
  • 02:18:16
    this proceeding. Initially, they showed a need starting in
  • 02:18:20
    2024, increasing to 947 mw in 2027.
  • 02:18:25
    That was later adjusted to start in 2026 up to
  • 02:18:28
    606 mw. That was the number used in the RFP.
  • 02:18:32
    Further adjusted showing a need starting in 2025 up to 948
  • 02:18:37
    mw in 2027. So in pinning down the improvement
  • 02:18:40
    to service, it's been hard to get a baseline for more than a couple months.
  • 02:18:45
    To this point, though, OPEC does not believe there will be an improvement in
  • 02:18:48
    service, particularly when the projected capacity need is at its highest.
  • 02:18:52
    In looking at the data SP's provided, opux expert lined
  • 02:18:56
    up the hours from both sets of data and looked at when the load was
  • 02:18:59
    at least 95% the annual peak demand for
  • 02:19:02
    76 hours. SPSs own data showed that the net generation of
  • 02:19:06
    the solar facilities will be at or below zero megawatt
  • 02:19:09
    output for 162 hours. Net generation will
  • 02:19:12
    be at or below 25% of rated capacity.
  • 02:19:17
    Opex expert also looked at the hours when SPSs firm load obligations
  • 02:19:21
    were within 606 SPSs annual peak for 2027.
  • 02:19:25
    And again, that's the number used in the RFP. We found that
  • 02:19:29
    net generation of the solar facilities will be at 0 mw for
  • 02:19:32
    552 hours and at or below 25%
  • 02:19:36
    of rated capacity for 759 hours.
  • 02:19:40
    So if you think about it, if you had a car that didn't start three
  • 02:19:44
    times out of the ten you needed to, even if you had another vehicle,
  • 02:19:47
    you'd probably reconsider that car. To my third point,
  • 02:19:51
    SP's has not proven that the resources are economical and will lower consumer
  • 02:19:55
    costs. SP's cannot definitively support its position because
  • 02:19:59
    it again did not consider any thermal resources in this RFP.
  • 02:20:04
    Even as a comparison, in looking at the cost per credit
  • 02:20:07
    capacity, the solar facilities cost well above $2,000 per kilowatt
  • 02:20:11
    each, and in one case reaching almost 3000 kilowatt, or $3,000
  • 02:20:15
    per kilowatt. And as the ALJ agreed, the battery is
  • 02:20:18
    very expensive at roughly $2,700 per kilowatt.
  • 02:20:23
    Even accounting for the ITCs, the battery cost is at
  • 02:20:28
    $1,900 per kilowatt of equipment credit capacity.
  • 02:20:32
    Finally, SBS suggests that the avoidance of fines for having
  • 02:20:36
    lower capacity than required is somehow a savings to consumers.
  • 02:20:40
    And in the same way, I would save money today by not running a red
  • 02:20:43
    light. Only if it was true that I budget for bad driving. There's a
  • 02:20:47
    difference between a savings and avoiding a new cost. Because the
  • 02:20:51
    RFP was flawed, SP's did not and could not prove the economics of the self
  • 02:20:54
    build projects. And the data SP's provided shows
  • 02:20:58
    that consumer would bear significant financial burden for resources that
  • 02:21:01
    will disproportionately underperform. And for these reasons,
  • 02:21:05
    OPEC respectfully requests that the commission reversed
  • 02:21:08
    the findings of the ALJ as appropriate and denied the application in
  • 02:21:11
    its entirety. Thank you.
  • 02:21:16
    All right, which party will go next?
  • 02:21:20
    (item:21:Ben Hallmark, TIEC, Docket 55255)Ben Hallmark for TIEC. Thank you for the opportunity to provide oral argument.
  • 02:21:24
    This is a complex case, as the chairman noted, and we
  • 02:21:28
    appreciate you giving it the time that it deserves. Now, you're going to hear a
  • 02:21:31
    lot of arguments today back and forth about potential costs and potential benefits.
  • 02:21:35
    And I think it can be at some level easy to get lost in the
  • 02:21:38
    clutter in a big case like this. So I think it's important to
  • 02:21:41
    start at the sort of bedrock place which is
  • 02:21:45
    what the legislature has told us that a CCNA requires.
  • 02:21:48
    The commission may only grant an amendment, a CCN amendment
  • 02:21:53
    if the commission finds that the certificate is necessary for
  • 02:21:56
    the service, accommodation, convenience or safety of the public.
  • 02:22:00
    SP's has unequivocally failed to show that
  • 02:22:03
    the battery is necessary and should be approved. It's a
  • 02:22:07
    purchase of a 36 megawatt battery,
  • 02:22:10
    but given where they're putting it, it will only be able to
  • 02:22:14
    provide 24 accredited capacity. It would
  • 02:22:18
    be about 2.5 times the cost of a CT
  • 02:22:22
    per kilowatt of accredited capacity, even assuming the
  • 02:22:26
    full investment tax credit. And it would only have half
  • 02:22:30
    the useful life of a CT 20 years versus 40 years.
  • 02:22:34
    Glaringly, SP's, despite stating that they would run
  • 02:22:37
    the battery to provide energy arbitrage savings, has not provided
  • 02:22:42
    any energy savings analysis in this case whatsoever.
  • 02:22:45
    To be clear, this is not the case where you usually see, which is
  • 02:22:49
    someone like me arguing with the utility that your energy savings analysis
  • 02:22:53
    is flawed. This is a case where there is no energy savings
  • 02:22:56
    analysis. SP's selection so there
  • 02:23:00
    is simply in our view, no basis in the record to
  • 02:23:03
    support certificating this battery as the ALJ is found
  • 02:23:06
    now, SPSS selection of the solar project also suffers from
  • 02:23:10
    flaws, including a failure to consider adding any
  • 02:23:13
    new thermal resources to its system to meet the need.
  • 02:23:17
    The result is three solar facilities that would provide accredited
  • 02:23:20
    capacity at a cost that is roughly 4.5
  • 02:23:24
    times spss estimate of the cost of a CT,
  • 02:23:27
    again on a per kilowatt hour basis.
  • 02:23:30
    This type of purchase places substantial risk
  • 02:23:34
    on ratepayers but given its heavy rate based cost,
  • 02:23:37
    it could also be a boon to shareholders. And of course the solar facilities are
  • 02:23:41
    not dispatchable and will only provide capacity when the sun is
  • 02:23:45
    shining. However, given the potential for the
  • 02:23:48
    benefits of production tax credits and avoided energy costs from the solar
  • 02:23:52
    plants, we come down differently than ERCOT. While we appreciate
  • 02:23:56
    their concerns, we believe that with the proper rate making protections,
  • 02:24:00
    ratepayer protections, the solar plants can be approved and meet
  • 02:24:04
    CCN muster.
  • 02:24:07
    You heard earlier a comment that it would be unprecedented
  • 02:24:10
    to have a performance guarantee applied.
  • 02:24:14
    But I'd like to point out also that it would be completely unprecedented
  • 02:24:17
    for this commission to approve a capital intensive renewable
  • 02:24:21
    project without ratepayer protections, including a cost cap
  • 02:24:25
    and a minimum production guarantee. This commission has also in the past
  • 02:24:29
    adopted a cost cap or capacity resource over the
  • 02:24:32
    utilities objection. So we believe that our recommendations,
  • 02:24:36
    which were partially adopted by the PFD, are well within the bounds of commission
  • 02:24:40
    policy.
  • 02:24:44
    Before I move on, there is one particular assertion
  • 02:24:49
    in Mister Rodriguez's letter from yesterday that I'd like to address. He referenced a
  • 02:24:52
    partial stipulation in SPSS parallel PPA case.
  • 02:24:57
    I just wanted to clarify that it's partial because while the parties
  • 02:25:00
    agreed to the extension of the natural gas PPA in that case,
  • 02:25:03
    the parties did not agree to the battery PPA, in that case the
  • 02:25:07
    interveners in that case, at least the retail ratepayer interveners
  • 02:25:12
    all opposed that battery, just like all of the interveners.
  • 02:25:16
    Retail rate payers in this case oppose the battery. In fact,
  • 02:25:20
    it's worth taking a step back to reflect on the fact that you have a
  • 02:25:23
    pretty broad cross section of interveners in this case. You have OPEC
  • 02:25:26
    representing residential and small commercial, you have AXM representing
  • 02:25:30
    the cities and the affected territory, and you have tiec.
  • 02:25:34
    None of us want this battery approved and none of
  • 02:25:37
    us are asking you to approve the solar facility without the conditions.
  • 02:25:44
    So how did we get here? One of the most important issues in
  • 02:25:47
    this case that was flagged in the preliminary order is how these proposed
  • 02:25:51
    facilities compare to all viable alternatives when
  • 02:25:55
    it comes to providing reliability on a cost effective basis.
  • 02:25:59
    It's in the preliminary order of paragraph 22,
  • 02:26:02
    but we don't know how the proposed facilities compare to adding
  • 02:26:05
    new thermal capacity to spss system. That evidence is just
  • 02:26:09
    not in this case. SP's didn't consider any new thermal options
  • 02:26:14
    as part of the RFP process. We have discussed in detail
  • 02:26:18
    how that came to be in our brief, but the bottom line is
  • 02:26:22
    that SP's and their self bell team could
  • 02:26:25
    have offered natural gas resources out of the RFP. They admit that,
  • 02:26:29
    after all, they like to tout that this is an all source solicitation. So yes,
  • 02:26:33
    they could have offered a natural gas options at their existing sites,
  • 02:26:37
    but they didn't do that. They only offered solar and batteries.
  • 02:26:41
    So what you have before you is an application requesting
  • 02:26:44
    to spend $770 million in ratepayer money on additions
  • 02:26:48
    that are for capacity, where the utility never modeled a single
  • 02:26:53
    new thermal addition as an alternative.
  • 02:26:56
    There is no economic analysis in this case showing that solar and
  • 02:26:59
    battery resources are better fits than natural gas options.
  • 02:27:03
    None. Instead, we just have conclusory arguments
  • 02:27:07
    that it made sense to grab the solar and batteries because tax credits
  • 02:27:10
    made them attractive. There's not an analysis that actually
  • 02:27:13
    shows they're more economic. And we know that utilities continue
  • 02:27:17
    to build natural gas resources like the CT. This commission recently
  • 02:27:21
    certificated for El Paso Electric, but SP's didn't consider those
  • 02:27:25
    options. We've also seen conclusory arguments that it may have
  • 02:27:28
    been difficult to get air permits, but we have not seen an analysis
  • 02:27:32
    showing that that couldn't happen. And again, utilities are building
  • 02:27:35
    plants, and we know that the cited provisions of the Clean
  • 02:27:38
    Air act do not even apply to cts in most cases.
  • 02:27:42
    So we think that that's a problem and that feeds
  • 02:27:45
    directly into the need for conditions on the solar plants
  • 02:27:48
    under the facts of this case. So we end up with these three solar facilities
  • 02:27:53
    selected as capacity resources. But they constitute a
  • 02:27:57
    very expensive method of obtaining a relatively small amount of
  • 02:28:00
    accredited capacity, if you view them as capacity resources.
  • 02:28:04
    If we go down that frame that SP's wants us to go down, they are
  • 02:28:07
    providing accredited capacity again, counting degradation
  • 02:28:10
    at over four times the per kilowatt of a CT.
  • 02:28:14
    So in isolation, you would never do that, right? No,
  • 02:28:17
    but there is the potential for offsetting PTC and energy savings,
  • 02:28:21
    which are not something you get out of a CT. However, the extent
  • 02:28:25
    to which those benefits will accrue, I should say not to the
  • 02:28:28
    extent with respect to energy savings. However, the extent to which
  • 02:28:32
    those benefits will accrue cannot be reliably predicted in the future.
  • 02:28:35
    It turns on how much output these plants are actually going to provide.
  • 02:28:39
    It turns with respect to energy savings on what lnps they're
  • 02:28:42
    going to avoid years and years and years into the future. So absent
  • 02:28:46
    conditions, there is a risk that the plants won't perform is
  • 02:28:51
    the risk that the plants don't perform is purely on
  • 02:28:55
    the ratepayers. If the plants are approved and put in rate base, SBS will
  • 02:28:58
    earn a hefty return on them estimated at over 833 million,
  • 02:29:03
    regardless of performance. Now this
  • 02:29:06
    is the risk that comes from choosing a capital intensive method of
  • 02:29:09
    obtaining capacity. Given these asymmetric risks,
  • 02:29:13
    and given that potentially cheaper options were not adequately considered,
  • 02:29:17
    conditions are necessary here. The PFD recognized
  • 02:29:21
    this in adopting a minimum production guarantee. However,
  • 02:29:24
    it did not recommend a cost cap. We believe a cost
  • 02:29:28
    cap is necessary for the same reasons that the PFD adopted the
  • 02:29:31
    minimum production guarantee. Here, the projects pose an unreasonable risk
  • 02:29:35
    to ratepayers of being an unreasonably expensive
  • 02:29:38
    option to provide capacity, and the prospect of cost overruns
  • 02:29:42
    just pushes that risk even higher. And for the same reasons,
  • 02:29:46
    it's not adequate. As I imagine SP's will argue
  • 02:29:50
    that you can have an after the fact prudence review.
  • 02:29:53
    SP's is the one that chose this extremely expensive way of
  • 02:29:57
    obtaining capacity, and its shareholders stand to gain from that choice.
  • 02:30:01
    Therefore, it it should not matter, especially given the absence of consideration
  • 02:30:05
    of alternatives, whether the reason if these plants are to underperform
  • 02:30:09
    or have cost overruns was outside of SBS's control or
  • 02:30:13
    not. Certainly it's not in ratepayer control, and our argument is
  • 02:30:17
    that we should not bear 100% of the risk for this type of acquisition.
  • 02:30:25
    As I noted, all of the previous renewable projects this commission is approved
  • 02:30:29
    were agreed to under settlements with conditions.
  • 02:30:33
    We would also note that the conditions that TIEC
  • 02:30:36
    and AXM are proposing here would not shift all of the
  • 02:30:39
    risk to shareholders. SP's would still be able to put the full estimated
  • 02:30:43
    cost of the plants, including the contingency, into rate base,
  • 02:30:46
    and it would only be on the hook for the minimum production guarantee.
  • 02:30:50
    If it failed to reach an output level that it projects, it will meet in
  • 02:30:53
    90% of the modeled cases. This is about balancing risk
  • 02:30:58
    and trying to find a win win on a renewable project.
  • 02:31:03
    With respect to the battery. However, we believe there are no conditions
  • 02:31:07
    that can save that. The battery was added at the end of the process
  • 02:31:11
    after SP's had already selected the solar facilities. SP's forced
  • 02:31:15
    the battery into its model based on its theory at the time that it
  • 02:31:19
    needed about 70 extra capacity or so, which I'll get
  • 02:31:23
    to in a minute. When the battery was forced into the model, it was compared
  • 02:31:27
    only to other batteries, no other types of resources.
  • 02:31:30
    The battery cost almost 3.5 times as much as a CT per kilowatt
  • 02:31:35
    hour of capacity without the ITC. And even if you treat the
  • 02:31:38
    ITC as an offset to capital cost, as I mentioned, it's nearly
  • 02:31:42
    2.5 times with the ITC and
  • 02:31:45
    the battery only lasts 20 years. SP's has provided again
  • 02:31:49
    no energy savings to justify the battery, even though it
  • 02:31:52
    says it will operate it for energy arbitrage.
  • 02:31:55
    SP's can't tell you what they think the battery would provide in terms of
  • 02:31:58
    energy savings therefore. But what we do know is that whatever that number
  • 02:32:02
    would be, SP's would seek to retain 10% of it under the
  • 02:32:05
    off system sales margin sharing as an additional issue.
  • 02:32:09
    Further, SPSS decision to add the battery was based on
  • 02:32:12
    a load forecast that it no longer considers accurate.
  • 02:32:15
    So as I mentioned, they evaluated the RFP
  • 02:32:19
    using the spring 2023 forecast, and after they had
  • 02:32:22
    selected the batteries, they decided that under that forecast they needed
  • 02:32:26
    an additional 70 capacity or so. So this was
  • 02:32:29
    the rationale to sort of reach out and pick these batteries as opposed to using
  • 02:32:33
    the modeling process. They were right sized according to
  • 02:32:36
    SP's at that time. However, then comes
  • 02:32:40
    the summer 2023 forecast in which SP's now has a much greater
  • 02:32:44
    need. So they are no longer right sized to meet that need.
  • 02:32:47
    And SP's is now planning a ten RFP for
  • 02:32:51
    this year of up to ten gigawatts. Which obviously raises substantial
  • 02:32:57
    concerns that there may be additional costs coming down the pipe for
  • 02:33:00
    ratepayers, making it more important that we get this right and nothing
  • 02:33:04
    acquire extremely expensive small batteries.
  • 02:33:07
    Now to take a step back, as you may have seen in our briefing,
  • 02:33:10
    we don't believe that SP's has actually proven up their need
  • 02:33:14
    conditions, their need contentions with respect to the
  • 02:33:18
    battery. We think there's been a problem with a lack of transparency around
  • 02:33:21
    those load forecasts. But as the PFD recognized,
  • 02:33:24
    you don't really need to reach the details of that issue because
  • 02:33:28
    there's simply no support work for the battery under any of these forecasts
  • 02:33:32
    in the record.
  • 02:33:36
    Again, just to make clear, in addition to
  • 02:33:39
    these other issues with the battery, it is a 36
  • 02:33:43
    megawatt battery that they're putting at a location where it can only provide
  • 02:33:46
    24 capacity, assuming you also approve the solar.
  • 02:33:50
    So that's an additional problem. So we would submit that under
  • 02:33:53
    these facts, the only way that SPSs battery could be approved is
  • 02:33:57
    if the CCN test was the utility has a need, it should be
  • 02:34:01
    allowed to acquire any resource it wants, regardless of whether
  • 02:34:04
    the size or economics makes sense and regardless
  • 02:34:08
    of what alternatives were considered. But that is not the CCN
  • 02:34:11
    standard. Indeed, as I mentioned, with the ten gigawatt
  • 02:34:15
    RFP coming down the pike, it's especially important
  • 02:34:19
    that ratepayers not be stuck with with unduly expensive resources in
  • 02:34:23
    this case. If SP's believes that batteries are part of a
  • 02:34:26
    solution going forward, we would urge them to bring those back
  • 02:34:30
    as part of that next RFP process, support them with adequate
  • 02:34:34
    analysis, and let the commission and the parties take a look at them at that
  • 02:34:37
    time. But this battery does not pass muster under the
  • 02:34:40
    CCN test and we ask that you deny it. Thank you
  • 02:34:44
    very much.
  • 02:34:48
    All right, which party is next?
  • Item 21 - Sergio Herrera, AXM, Docket 55255
    02:34:52
    Mister chairman. Commissioner Sergio Herrera for
  • 02:34:56
    AXM AXM echoes the points and the
  • 02:34:59
    concerns raised by Mister Hallmark and Miss Davis in regards to the letter
  • 02:35:03
    filed with Mister Rodriguez yesterday, so I won't repeat those
  • 02:35:06
    same arguments. My main focus today is to
  • 02:35:10
    stress what the PMD largely got right and the
  • 02:35:13
    one critical thing that it got wrong. First, the PFD correctly recommended
  • 02:35:18
    that the proposed battery project should be denied. The battery project
  • 02:35:21
    is simply too expensive for providing only 24
  • 02:35:25
    accredited capacity. I would like to add that the cities
  • 02:35:28
    that comprise AXM and SBS have
  • 02:35:32
    a very good working relationship, something that we work towards and we're very proud
  • 02:35:36
    of, so we don't take the recommended denial of this project
  • 02:35:39
    lightly. However, the commission serves as a substitute for
  • 02:35:43
    competition, and regardless of whether SP's is proposing the
  • 02:35:47
    battery project to meet a capacity need or for an economic
  • 02:35:50
    reason, costs must always be considered.
  • 02:35:54
    For these reasons, Aggs emerges the commission to adopt the PFD's recommendation
  • 02:35:58
    to deny spss proposed battery project in
  • 02:36:02
    regards to the solar project outside of the PFD's failure to
  • 02:36:05
    recommend a cost gap, the PFD correctly recommends what the record
  • 02:36:09
    evidence in this case demonstrates, and that is that approval of the solar projects
  • 02:36:13
    is reasonable if approval is conditioned upon certain
  • 02:36:17
    customer safeguards. Specifically, the PFD correctly
  • 02:36:20
    recommended that approval of the solar projects should be conditioned
  • 02:36:25
    upon a minimum output guarantee to protect ratepayers
  • 02:36:28
    against asymmetric risks presented in the event SBS's objections
  • 02:36:32
    proved incorrect and the PFD correctly recommended that
  • 02:36:37
    approval should be conditioned upon a production tax credit or PTC guarantee
  • 02:36:42
    so that customers receive 100% of the ptcs earned by the solar
  • 02:36:45
    project, and that there is no delay in crediting ptcs
  • 02:36:49
    to customers. Any delay in crediting customers with the benefit
  • 02:36:53
    of these ptcs would result in customer forgoing the
  • 02:36:56
    benefit of these initial ptcs because the ptcs
  • 02:36:59
    are only available for ten years. Moreover, the benefit
  • 02:37:03
    of the ptcs is largely what makes the solar
  • 02:37:07
    projects potentially more economic than alternative and
  • 02:37:10
    dispatchable sources of generation that have significantly lower
  • 02:37:14
    upfront capital costs.
  • 02:37:18
    What the PFD got wrong is that it failed to recommend a cost
  • 02:37:21
    gap as a third condition for approval for the solar
  • 02:37:24
    projects. During the hearing, SBS admitted that a cost contingency
  • 02:37:29
    is already built into its projected $702 million construction
  • 02:37:33
    cost for the solar project. Therefore, AXM's recommended $720
  • 02:37:37
    million cost cap for the solar projects would provide SBS with
  • 02:37:41
    additional breathing room in the event that the company incurred additional
  • 02:37:45
    cost pressures not covered by its contingency that's already
  • 02:37:48
    built into its cost projection. Ultimately,
  • 02:37:52
    ratepayers must be able to rely upon SBS's expertise in
  • 02:37:55
    constructing any type of generation resource, and to do so on budget,
  • 02:37:59
    but especially ones such as the solar project that has such high upfront capital
  • 02:38:03
    costs. It's important to remember,
  • 02:38:07
    and Mister Hallmark touched on this as well, that even if SBS misses the
  • 02:38:10
    mark on its projections and the solar projects fail to provide the
  • 02:38:14
    ptcs, the energy benefits and the fuel savings
  • 02:38:17
    that the company projects they will provide, SBS will still earn
  • 02:38:21
    a return of and on its investment. For this reason,
  • 02:38:25
    a cost cap in conjunction with the PTC and
  • 02:38:28
    output guarantee that is recommended to the PFD is crucial.
  • 02:38:33
    At bottom, none of the conditions that AXM is urging the
  • 02:38:37
    commission to adopt, not the outlet guarantee, not the PTC guarantee,
  • 02:38:41
    and not the cost cap, hold SP's to a higher or some
  • 02:38:45
    unfair standard. AXMS recommended conditions wouldn't
  • 02:38:49
    require SP's to construct the solar projects at a lower
  • 02:38:52
    cost than the company projected. They wouldn't require for the solar projects
  • 02:38:56
    to produce more energy than SP's projected,
  • 02:38:59
    nor would they require the solar projects to produce more ptcs
  • 02:39:03
    than SBS projected. The conditions AXM has advocated for,
  • 02:39:07
    and is advocating for, are simply there to safeguard against the fact that if
  • 02:39:11
    SPSS projections miss the mark and prove wrong,
  • 02:39:14
    rate payers will be stuck footing the bill for a very
  • 02:39:17
    expensive and potentially underperforming non dispatchable generation
  • 02:39:21
    resource. At the end of the day, the cities that comprise
  • 02:39:24
    AXM rely upon the commission to hold the utilities accountable.
  • 02:39:29
    These conditions for approval of the solar projects will help do just that, and in
  • 02:39:32
    a fair manner. For these reasons, AXM urges the commission to
  • 02:39:36
    adopt a $720 million cost cap as
  • 02:39:40
    outlined in the direct testimony of Mister Scott Norwood.
  • 02:39:43
    AXM also urges the commission to adopt the PFD's recommendation to deny
  • 02:39:47
    the battery project and to adopt the PFD's recommendation
  • 02:39:50
    to condition approval of the solar projects on an output and PTC guarantees.
  • 02:39:55
    Thank you.
  • 02:39:59
    All right, is the next party going to be golden spread? Yes. All right.
  • Item 21 - Todd Kimbrough, GSEC, Docket 55255
    02:40:03
    Good afternoon, Mister chairman. Commissioners Todd Kimbrough here
  • 02:40:07
    today on behalf of Golden Spread electric cooperative golden
  • 02:40:10
    spread's perspective on these proposed projects differs somewhat
  • 02:40:14
    from TIC, AXM and OPEC simply
  • 02:40:19
    because we are uniquely situated as a neighboring utility
  • 02:40:23
    to SP's and come with that
  • 02:40:26
    perspective in mind. And as a result, Golden Spread's
  • 02:40:29
    focus has been particularly heavy on the operational impacts of the proposed projects.
  • 02:40:34
    Golden spread does not address the questions of economics or the
  • 02:40:38
    proposed projects or cahps, or any of the things that you've been hearing about
  • 02:40:42
    prior.
  • 02:40:45
    Probably somewhat obviously, as a member of SPPA,
  • 02:40:49
    Golden Sprite is particularly interested in the issues of planning, reserve margins
  • 02:40:52
    and some of the things that were outlined by Mister Rodriguez's letter yesterday,
  • 02:40:56
    and we'll want to spend some time talking about that in the course
  • 02:41:00
    of this afternoon. It's probably best to
  • 02:41:03
    actually start by just walking through the unusual chronology of the
  • 02:41:07
    selection of the proposed projects. The proposed projects use
  • 02:41:11
    old sites at Planx in Cunningham, where 60 to 70
  • 02:41:14
    year old plants experienced unplanned outages in the summer of 2022.
  • 02:41:19
    In the docket, we learned that SP's had considered retiring these units
  • 02:41:23
    several years prior, 20 17 20 18 20 19,
  • 02:41:27
    something like that, but chose not to do so. We also learned that SP's
  • 02:41:31
    engineering reports began identifying problems at those plants
  • 02:41:35
    decade or more prior. SP's did not issue rfps
  • 02:41:40
    or file a CCN application for new generation at those
  • 02:41:43
    points in time in the past passed. It only came after
  • 02:41:46
    the units failed in the summer of 2022,
  • 02:41:51
    about four months after the unplanned outages of those old units.
  • 02:41:54
    This would have been in November of 22, SP's issued
  • 02:41:57
    the RFP for the replacement capacity and
  • 02:42:01
    for previously unforecasted load growth. The proposed projects
  • 02:42:04
    are the result of that RFP. About seven
  • 02:42:08
    months later, summer of 2023,
  • 02:42:11
    SP's had evaluated the RFPs and filed the
  • 02:42:14
    application that is underlying this docket in
  • 02:42:18
    the course of the hearing. In this docket, SP's actually testified,
  • 02:42:22
    though, that a proper resource planning time
  • 02:42:25
    horizon is something more in the line of five to ten years,
  • 02:42:29
    not 18 months. This is especially noteworthy
  • 02:42:33
    again when we think about the fact that those
  • 02:42:37
    60 to 70 year old plants at plant X and Cunningham had
  • 02:42:41
    known problems and SP's itself had begun considering retirement.
  • 02:42:46
    About five years ago,
  • 02:42:49
    about two months after filing the CCN, SP's began
  • 02:42:53
    the SPP interconnection study processes for the proposed projects.
  • 02:42:58
    So at the time of the application, the potential transmission interconnection
  • 02:43:01
    costs for the projects were unknown and the application assumed
  • 02:43:05
    them to be zero.
  • 02:43:08
    Some, but not all, of the SPP interconnection studies have
  • 02:43:12
    been completed by the time of the SOA hearing. There are in fact still a
  • 02:43:16
    few SPP studies that remain incomplete, and the potential for
  • 02:43:19
    interconnection costs remains. If upgrades and
  • 02:43:23
    other interconnection costs are required, it is possible that some of those may actually get
  • 02:43:27
    assigned to SP's neighbors, including golden sprout.
  • 02:43:32
    I think it's fair to say the process of selecting the proposed projects
  • 02:43:36
    and the related diligence likely would have been quite different
  • 02:43:39
    had the five to ten year planning horizon been used instead
  • 02:43:42
    of the roughly twelve month process that was actually used
  • 02:43:46
    here. It's noteworthy in the PFD, the ALJ's note
  • 02:43:50
    I'm quoting here, the ALJ's find that SP's provided little
  • 02:43:53
    explanation for why it was only in 2022 that SP's
  • 02:43:57
    discovered a need for capacity as early as 2024.
  • 02:44:04
    Had a five to ten year planning horizon been used instead,
  • 02:44:08
    there would have been a lot more options and a lot more information available in
  • 02:44:12
    the course of the selection process here.
  • 02:44:15
    SP's in the course of this docket testified that thermal projects
  • 02:44:18
    and projects at other sites outside of the old plant X and Cunningham
  • 02:44:22
    locations could not be used because the interconnection process would
  • 02:44:26
    have taken too long, given the quick process and quick turn
  • 02:44:29
    around for their need. Somewhat obviously,
  • 02:44:33
    with a five to ten year planning horizon, there would have been time for these
  • 02:44:37
    interconnection studies to have occurred, and that would have opened the door to potential
  • 02:44:40
    thermal projects and potential projects from other third party entities.
  • 02:44:47
    Going back to the SPP aspect of that, and going
  • 02:44:50
    back to Mister Rodriguez's letter from yesterday, that's particularly
  • 02:44:54
    noteworthy because different types of technology and different projects get
  • 02:44:57
    different capacity credits for purposes of the planning reserve margin.
  • 02:45:01
    As a rough shorthand, you should expect a higher capacity
  • 02:45:05
    credit for a nuclear plant than you should for a solar, and so on,
  • 02:45:08
    and it's going to vary technology to technology.
  • 02:45:14
    A five to ten year planning horizon also would have given SPP
  • 02:45:18
    enough time to give us comprehensive analyses of the interconnection
  • 02:45:21
    costs. It would have given some surety to neighbors like golden spread
  • 02:45:25
    that there wouldn't be potential interconnection costs shifted
  • 02:45:28
    onto the neighbors.
  • 02:45:33
    All of this has actually then led golden spread to recognize the
  • 02:45:37
    need for certain conditions. If these projects are approved
  • 02:45:42
    first, SP's should accept all risks and costs associated
  • 02:45:46
    with the upgrades derived from the SPP interconnection
  • 02:45:50
    facility studies for each of the proposed projects.
  • 02:45:54
    SP's should also accept all costs associated with
  • 02:45:59
    compliance with pending NERC and IEEE standards for
  • 02:46:02
    new ibrs. Each of these projects are inverter based resources that
  • 02:46:07
    are pursuant to FERC order 901. That's the new
  • 02:46:10
    order related to voltage ride through and frequency ride through for
  • 02:46:13
    these proposed projects, lest there be any sort of transmission
  • 02:46:17
    solution that then again is shifted on to neighboring utilities.
  • 02:46:22
    And then lastly, SP's should be required to submit
  • 02:46:25
    periodic reports to the commission on the status of the interconnection of
  • 02:46:28
    the generation facilities, the determination of costs for
  • 02:46:32
    any potentially needed modifications related to the interconnection costs,
  • 02:46:37
    and then also with compliance with SPP, NERC and IEEE
  • 02:46:41
    standards for those proposed projects.
  • 02:46:45
    Again, golden spread does not dispute the fact that
  • 02:46:49
    SP's, and frankly, utilities all through the region are needing new capacity.
  • 02:46:55
    That I think is a truism. The question is, how do
  • 02:46:58
    you do it in a way that doesn't have an adverse effect on your neighbors?
  • 02:47:02
    And with that, I'm more than happy to answer any questions.
  • 02:47:05
    Thank you.
  • 02:47:08
    All right, and the last party or
  • 02:47:12
    argument before we go back to the company is commission Stan.
  • Item 21 - David Hrncir, Comission Staff, Docket 55255
    02:47:16
    Good afternoon, commissioners. Thank you for providing staff with the opportunity to lay out
  • 02:47:20
    some of the major issues that we've had throughout this document. While staff
  • 02:47:23
    does not take a position on whether the commission should approve SBS's
  • 02:47:27
    application, staff recommends that the commission impose certain conditions on these projects
  • 02:47:31
    if they are approved. There are five major issues I want to go through today.
  • 02:47:35
    The first is the weatherization standard. The second is the cost cap.
  • 02:47:39
    The third the prudence review. The fourth,
  • 02:47:42
    the treatment of production tax credits, or ptcs. And the final
  • 02:47:46
    issue is how this commission treats the other rate
  • 02:47:49
    making issues requested by SP's for the
  • 02:47:53
    weatherization standard. Staff respectfully disagrees with the PFD.
  • 02:47:57
    SP's proposes designing facilities to adhere to NERC reliability
  • 02:48:01
    standard EOP 0121.
  • 02:48:05
    Staff recommends that the commission require SP's to incorporate
  • 02:48:09
    the ERCOT weatherization standards as laid out in our testimony
  • 02:48:13
    and briefing into the design of the plant X located in
  • 02:48:16
    land county. Generally, it benefits the public
  • 02:48:20
    interest to have the most resilient and weatherized grid
  • 02:48:23
    in Texas as possible. This can be achieved through following
  • 02:48:27
    these ERCOT weatherization standards, which are the established parameters
  • 02:48:30
    for most of the state. ERCOT sets these
  • 02:48:34
    guidelines because Texas is a region that has its own unique
  • 02:48:38
    extreme weather patterns and although Plan X is not included
  • 02:48:42
    in the ERCOT weather zone, it borders the zone directly and
  • 02:48:46
    would be relying on weatherization standards that were established
  • 02:48:50
    based off of the weather in the county right next door,
  • 02:48:53
    rather than relying on solely federal government standards, as argued by
  • 02:48:58
    SP's staff urges this commission to apply
  • 02:49:01
    the ERCOT weatherization standards as they're developed in Texas.
  • 02:49:05
    The second issue is on the cost captain.
  • 02:49:09
    Staff respectfully disagrees with the PFD regarding the cost cap.
  • 02:49:12
    Specifically, staff recommends that a cost cap of 100%
  • 02:49:16
    of the total estimated costs of the four projects be applied.
  • 02:49:20
    As identified by TIEC.
  • 02:49:23
    Staff's recommendations for cost cap aligns with commission precedent established
  • 02:49:27
    in previous capacity cases. Ultimately, staff's recommendation
  • 02:49:31
    aims to establish a guardrail that would prevent SP's from overspending
  • 02:49:35
    on a project at the expense of its customers, and imposing such
  • 02:49:39
    a cap should be seen as a necessary precaution in this case.
  • 02:49:44
    The third issue is the prudence review. Staff agrees with the PFD
  • 02:49:47
    and appreciates spss lack of opposition to staff's recommendation
  • 02:49:51
    that the commission select a third party consultant to conduct a prudence
  • 02:49:54
    review. Fourth issue is the production tax credits.
  • 02:49:58
    Here, commission staff agrees with PFDEM that flowing
  • 02:50:02
    the grossed up ptcs to ratepayers as eligible fuel expenses
  • 02:50:06
    as they are earned is the most efficient method
  • 02:50:09
    to ensure that ratepayers receive the full benefits of any
  • 02:50:13
    approved facilities in a timely fashion. This recommendation is consistent
  • 02:50:17
    with what this commission has done with the hale and Sagamore wind projects.
  • 02:50:22
    If the commission agrees with SP's and determines that customers should receive
  • 02:50:25
    credits once cost recovery commences, then the
  • 02:50:29
    commission should ensure that any or SP's should ensure that any credits
  • 02:50:32
    earned prior to commencement of cost recovery are preserved in a regulatory liability
  • 02:50:37
    for the benefit of the ratepayers and not kept by
  • 02:50:40
    SP's for its own benefit. Staff further recommends that
  • 02:50:44
    the commission should not impose a condition on approval that SP's must not
  • 02:50:48
    place the facilities into service until the commission has issued a final order in
  • 02:50:52
    a rate proceeding. The treatment of these ptcs staff
  • 02:50:56
    also recommends that the commission should not pre approve recovery of
  • 02:51:00
    any transaction costs associated with the transfer of unused ptcs
  • 02:51:04
    in this proceeding. The rules for implementing the iras
  • 02:51:08
    new transfer provisions are still under development, so doing
  • 02:51:11
    so would be premature. Instead, this commission should preserve
  • 02:51:15
    its right to review the reasonableness of any transfer costs actually
  • 02:51:19
    occurred in a future proceeding. And finally,
  • 02:51:23
    the rate making issues SP's asked this commission to
  • 02:51:26
    address several rate making issues in its application and staff supports the
  • 02:51:30
    commission's determination during the discussions of the preliminary order in
  • 02:51:33
    this case that, with the exception of ensuring ratepayers receive the
  • 02:51:37
    full benefit of the ptcs and renewable energy
  • 02:51:40
    credits in a timely fashion, that this commission will not address rate making
  • 02:51:44
    issues in this proceeding as requested by SP's staff reiterates
  • 02:51:48
    that rate making issues should generally be left to rate proceedings where actual
  • 02:51:52
    costs are known and not addressed. In CCN proceedings like
  • 02:51:57
    this one, where costs are only estimated, that's the conclusion
  • 02:52:00
    of staff's issues. Thank you for giving me the time. Could you please put your
  • 02:52:03
    name on the record? Oh, David Berlin for commission staff.
  • 02:52:08
    All right, we will go back to SP's for the remaining time.
  • Item 21 - Andrea Stover, SPS, Docket 55255, Closing Remarks
    02:52:13
    Thank you, chairman and commissioners, for this opportunity. First, I'd like
  • 02:52:16
    to start with the discussion that a lot of the intermediaries
  • 02:52:20
    were addressing related to the identification of the need
  • 02:52:24
    and the timing by SP's. As I mentioned in
  • 02:52:27
    my opening statement, SP's during the pandemic
  • 02:52:31
    and shortly thereafter, like a lot of utilities, was seeing a drop in load
  • 02:52:35
    and was, as it came out of the pandemic,
  • 02:52:39
    its load projections started to change. And in 2022
  • 02:52:43
    that change became acute and it coincided with
  • 02:52:46
    the SPP's change to its planning reserve margin, which it up from twelve
  • 02:52:50
    to 15%. SP's does resource planning
  • 02:52:53
    on a long term basis, five to ten years out.
  • 02:52:57
    The issue is its load projections were changing rapidly
  • 02:53:01
    given the conditions in the country after the pandemic. So the idea that
  • 02:53:05
    they could have anticipated what was happening not only with its load growth,
  • 02:53:09
    but with what was happening at SBP in 2019 is
  • 02:53:13
    not realistic as it relates to the RFP
  • 02:53:16
    process and the concerns that were raised by TIC and OPEC,
  • 02:53:20
    primarily during the proceeding. The idea
  • 02:53:24
    that some of the statements that were made by the,
  • 02:53:28
    the company, the parent company of SP's and
  • 02:53:31
    other folks at the company were
  • 02:53:35
    somehow influencing what happened during the RFP process
  • 02:53:39
    was dealt with during the proceeding, and there was no
  • 02:53:42
    evidence to support that at all. In fact, when you look
  • 02:53:46
    at the response to the RFP process, which was open to all resources,
  • 02:53:49
    as I previously described, SP's received bids for natural
  • 02:53:53
    gas, hydrogen, as well as batteries,
  • 02:53:56
    solar and wind. It received bids from all types of resources and
  • 02:54:00
    ultimately selected a PPA with a thermal resource
  • 02:54:04
    and extended the lives of two natural gas plants. So this recommended
  • 02:54:08
    portfolio includes thermal resources and other
  • 02:54:11
    new dispatchable technologies like the batteries as well.
  • 02:54:15
    Some of the criticism from the from the interviters has to do with SP's
  • 02:54:20
    not proposing a natural gas facility in this proceeding.
  • 02:54:24
    This goes back to what we were discussing before,
  • 02:54:27
    where, because this need arrived
  • 02:54:31
    on a very quick timeline. In order to be sure that they
  • 02:54:34
    had the capacity in place by 2026 and 2027,
  • 02:54:38
    they had to look at resources that they could build and have interconnected
  • 02:54:42
    in a timely manner to meet those needs,
  • 02:54:45
    natural gas facilities can take longer because of permitting
  • 02:54:49
    issues, construction issues. And in SPP,
  • 02:54:53
    the interconnection process takes up to seven
  • 02:54:57
    years. So if you were to build a new gas plant at a
  • 02:55:00
    greenfield site on a new interconnection point,
  • 02:55:04
    there was extreme concern about being able to get that capacity
  • 02:55:08
    online and serving its customers and meeting the
  • 02:55:11
    needs of the PRM in time for the 2026 and 2027
  • 02:55:16
    years.
  • 02:55:22
    You know, the other issue is that the criticisms about
  • 02:55:26
    the RFP, the PFD actually found that the RFP process
  • 02:55:29
    was fair and reasonable. It took issue with SPSs selection of
  • 02:55:33
    the battery, but it did not take issue with RFP process
  • 02:55:36
    overall. And in fact, no party pointed to any part of the
  • 02:55:40
    process, save the selection of the battery, as being unfair
  • 02:55:44
    and reasonable. Or it also, you know, this process included
  • 02:55:47
    an independent evaluator who oversaw everything that the company
  • 02:55:51
    did in reviewing bids and making the selections.
  • 02:55:55
    And no party took any issue with the independent evaluators assessment,
  • 02:55:59
    which was that the RFP process was fair and reasonable.
  • 02:56:06
    You know, Golden Spread has mentioned interconnection
  • 02:56:09
    issues and concerns about costs that will be applied to it.
  • 02:56:13
    To golden spread, should there be some further analysis from SPP
  • 02:56:17
    related to interconnection?
  • 02:56:21
    We've filed the reports from SPP that were associated
  • 02:56:24
    with the cost of interconnection. There are
  • 02:56:27
    no costs that are going to be uplifted to other customers.
  • 02:56:31
    And the PFD recognized that and did not agree with
  • 02:56:34
    golden spreads proposals related to those issues as
  • 02:56:40
    it relates to the selection of the battery. The party's criticism
  • 02:56:44
    of SPSs selection of the self build battery assumes that there was
  • 02:56:47
    only one way to select resources and that it must be spit
  • 02:56:51
    out of the model that SP's used to evaluate the different resources
  • 02:56:55
    that it got through the RFP process. But the model is a
  • 02:56:58
    tool. It is a tool to evaluate the projects,
  • 02:57:02
    to see how they fit within the larger portfolio of resources that
  • 02:57:05
    SP's has, and to determine whether or not they were economic.
  • 02:57:10
    For example, in reviewing the RFP results,
  • 02:57:13
    SP's took the bid. I'm sorry. The bid evaluation team discovered
  • 02:57:17
    that the model was required to select more costly and lower scoring projects
  • 02:57:21
    to fill a small capacity need in 2026. This would
  • 02:57:25
    have resulted if they had just let the model run that way. It would have
  • 02:57:27
    resulted in much higher cost projects being proposed.
  • 02:57:31
    So they looked at that. The team included, then decided to include
  • 02:57:34
    an assumption for a Mattix two life extension and re
  • 02:57:38
    optimize the model. This lowered total systems cost substantially,
  • 02:57:42
    about $43 million in the present value revenue requirement cost.
  • 02:57:48
    The team then re optimized the model to assume short term capacity purchases
  • 02:57:52
    as a proxy for the life extension of Cunningham two. This further
  • 02:57:56
    lowered the system costs for SP's. Those were actions
  • 02:58:00
    that the SP's bid evaluation team took in managing the
  • 02:58:03
    model. They did not just let the model make those decisions on its own.
  • 02:58:08
    No party complained about the choice of the life extensions
  • 02:58:12
    as part of the recommended portfolio. Those were very
  • 02:58:16
    economic decisions to make. They're gas, they're thermal.
  • 02:58:19
    Plants that the companies now allow will continue to run and provide
  • 02:58:23
    good service to its customers.
  • 02:58:27
    After it made those decisions to extend the lives of Cunningham two
  • 02:58:31
    and Maddox two, SP's then directed the model to evaluate
  • 02:58:34
    the battery resources after the model had selected a
  • 02:58:39
    much larger solar and battery project that was located in the northern part of SP's
  • 02:58:43
    service territory, so a good distance away from the load
  • 02:58:46
    growth that it's seeing on its system and would likely
  • 02:58:50
    be subject to congestion. It decided
  • 02:58:53
    that so that project had low qualitative scores
  • 02:58:57
    in terms of whether or not that project was going to serve SP's needs.
  • 02:59:02
    The evaluation team identified the battery resources as an alternative
  • 02:59:05
    because they were of a comparable cost. So the battery resources
  • 02:59:08
    did not cost more than the other. The other project that the model
  • 02:59:13
    would have selected and then used that
  • 02:59:17
    and re optimized the model again and
  • 02:59:21
    evaluated the battery project in that context.
  • 02:59:25
    Although the parties argued that the only right way to select a resource
  • 02:59:28
    was the for the model to choose the resource, no party argued that
  • 02:59:31
    SP's should have proposed the larger solar and battery project if they
  • 02:59:35
    were so convinced that the model needed to choose the projects that
  • 02:59:39
    SP's brought forward, one would think that that's what they would have
  • 02:59:43
    proposed. The fact that SP's made judgment calls
  • 02:59:46
    about how and when to optimize the model so that the portfolio best meets SP's
  • 02:59:49
    needs was evaluated and selected does not mean that the selection of the battery
  • 02:59:53
    project was unreasonable. Instead, it indicates that SP's team was thorough
  • 02:59:57
    and thoughtful about right sizing the project. Mister Hallmark
  • 03:00:01
    brought up the right sizing issue and both OPEC
  • 03:00:05
    and TiUC had mentioned the load forecast issue again.
  • 03:00:09
    I think we're all familiar with the fact that load forecasts are increasing exponentially
  • 03:00:13
    every time they are performed. Given electrification and
  • 03:00:17
    other economic forces
  • 03:00:20
    that are affecting the amount of load that utilities are seeing on the system,
  • 03:00:25
    SP's wanted to be forthcoming about its load projections.
  • 03:00:28
    So it obviously presented its load projections that
  • 03:00:32
    it was relying on when it issued the RFP and made
  • 03:00:36
    the selection of the resources it did, and during that time it
  • 03:00:40
    chose the recommended portfolio because it met those
  • 03:00:43
    needs without, you know, being oversized.
  • 03:00:48
    We, during the proceeding, we were forthcoming about
  • 03:00:51
    our updated load projections which indicated
  • 03:00:54
    a greater need. The parties would have you believe that because we now
  • 03:00:58
    have a greater need, that means that the load projections
  • 03:01:02
    no longer justify the projects that we're coming forward to ask
  • 03:01:05
    for approval of, which seems to be illogical.
  • 03:01:10
    If our need continues to get greater, how is it that it's appropriate
  • 03:01:14
    to reject these resources that will help us meet this growing need?
  • 03:01:18
    The company has plans to come forward with another RFP as
  • 03:01:22
    mentioned, and it intends to do
  • 03:01:26
    everything it can and continue to
  • 03:01:30
    make robust analyses to choose the right projects to
  • 03:01:33
    bring before the commission. It would really appreciate guidance
  • 03:01:37
    from all of you and the best way to do that. It believes
  • 03:01:41
    that it had done so in this application and
  • 03:01:45
    does not believe that what the parties have proposed, which is to compare
  • 03:01:49
    the resources that were bid into this RFP to projects
  • 03:01:53
    that were not available to it, there were no thermal, there were no
  • 03:01:57
    large thermal resources that were proposed besides the ones
  • 03:02:00
    that we selected. And there was not any indication
  • 03:02:04
    that we would have been able to build any thermal resources in time to
  • 03:02:07
    meet the need that we identified. I think I'm out of time,
  • Item 21 - Chairman Gleeson to Hallmark & Herrera, Cheaper Alternatives, Docket 55255
    03:02:11
    sso thanks to
  • 03:02:14
    each of you for your comments. Before I open it up, just really
  • 03:02:18
    quickly. So Mister Hallmark,
  • 03:02:22
    Mister Herrera, just real quick, help me understand your
  • 03:02:26
    position on the solar facilities. So if
  • 03:02:30
    a cost cap was put in place in addition to what's
  • 03:02:33
    in the, in the, what came in the PFD from the ALJ,
  • 03:02:37
    you'd be okay with the solar facility,
  • 03:02:40
    but you still say that there would be
  • 03:02:44
    cheaper alternatives? A CT would still be cheaper, is that correct?
  • 03:02:47
    Well, a CT could potentially be cheaper.
  • 03:02:51
    We don't know because there's not an analysis in the case, but it could potentially
  • 03:02:54
    be cheaper, at least on, I'm talking about the capital cost component
  • 03:02:59
    of it, the sort of the installed cost versus solar. If you compare
  • 03:03:02
    the amount of accredited capacity you're getting,
  • 03:03:05
    but you know, like I've said, there is the potential for the ptcs
  • 03:03:10
    and energy savings to sort of make up the difference.
  • 03:03:13
    And we understand that and we understand that's why SP's proposed them.
  • 03:03:17
    And our view is, is that if the protections
  • 03:03:20
    are in place, that these would be acceptable resources,
  • 03:03:24
    the solar facilities, to provide
  • 03:03:28
    capacity, even though the CT may ultimately be cheaper?
  • 03:03:33
    Under the facts of this case, we think so, yes. And we have
  • 03:03:36
    a similar view. Our cost cap is a little bit different.
  • 03:03:39
    But in general along the lines, if we can take advantage
  • 03:03:43
    of the PTC and the fuel savings,
  • 03:03:46
    and put those as ratepayer protections in the form of conditions along
  • 03:03:50
    with a cost cap, then AXM would
  • 03:03:53
    be comfortable with the approval of the solar project.
  • 03:03:56
    Commissioners? Yes, Andrea, I have a couple of questions
  • 03:04:01
    for SP's. So there's two
  • 03:04:05
    reasons why you feel you have a capacity. One is the
  • 03:04:08
    load growth that is changing since the pandemic and
  • 03:04:11
    is increasing as time goes
  • 03:04:15
    on. Is that load growth that you're talking about?
  • 03:04:18
    Is it SP's Texas specific, or is
  • 03:04:22
    it the whole system? For SP's, the load
  • 03:04:25
    growth is occurring across the system. There is maybe
  • 03:04:29
    more market increase on the New Mexico side, but it is, they are experiencing load
  • 03:04:33
    growth across the system, and they're receiving large
  • 03:04:38
    interconnection requests from customers, as well as just generalized
  • 03:04:41
    increased load growth. So the
  • 03:04:46
    SPP prms, at least the one that applies to this case, is the
  • 03:04:50
    increase from where SPP took action to increase the summer
  • 03:04:53
    PRM from 12% to 15%. That happened in October
  • 03:04:56
    of 22. And so when
  • 03:05:00
    the company looks to meet SPP's planning reserve margin requirements,
  • 03:05:04
    does it look to meet those requirements on
  • 03:05:07
    a system wide basis like SP's
  • 03:05:11
    system wide basis, or on sort of a jurisdictional basis?
  • 03:05:15
    Texas, New Mexico, the company looks to
  • 03:05:18
    meet those requirements on a system wide basis.
  • 03:05:22
    You know, it. I don't know if you're referring to the fact that there's been
  • 03:05:26
    some discussion in the proceeding about the fact that we've got
  • 03:05:29
    certain resources that were not approved in Texas but
  • 03:05:33
    were approved in New Mexico. And it
  • 03:05:37
    was the company's position in the proceeding that,
  • 03:05:40
    you know, when it initially did the analysis of what its needs were,
  • 03:05:44
    it looked, looked at it from a New Mexico
  • 03:05:47
    basis, mainly to include those resources that had not been previously
  • 03:05:51
    approved in Texas. But then it also looked at it from a
  • 03:05:55
    Texas basis as well.
  • 03:05:57
    And it's the company's position that it's not appropriate
  • 03:06:02
    to attribute capacity from resources that are
  • 03:06:05
    not being recovered from customers in the jurisdiction
  • 03:06:09
    in Texas. But overall, when it
  • 03:06:13
    has concerns or when it's interacting with SPP
  • 03:06:17
    and there's a determination of the planning reserve margin, it's on a system
  • 03:06:21
    wide basis.
  • 03:06:24
    Okay. Thank you. Sure.
  • 03:06:31
    Would it be possible for me to speak to the cost cap questions
  • 03:06:35
    that you asked? Tic and axm?
  • 03:06:38
    Sure appreciate it. I just want to note,
  • 03:06:42
    you know, this commission has, the last time it
  • 03:06:45
    instituted a cost cap, it did so in,
  • 03:06:49
    I think it was a SWepco case. It was related to, it was a capacity
  • 03:06:53
    case, but it was related to wholesale capacity.
  • 03:06:57
    And most recently, in docket 42487,
  • 03:07:01
    the commission decided that a cost cap was not appropriate.
  • 03:07:04
    And in part because there was concerns about whether if
  • 03:07:08
    the cost cap was set too low, that entergy might not
  • 03:07:12
    proceed with the plant. And that plant was very sorely needed.
  • 03:07:16
    This is a similar situation here. This capacity is sorely needed on the
  • 03:07:19
    SP's system. And if there's a cost cap,
  • 03:07:23
    it's not suggesting that that would necessarily be the case.
  • 03:07:26
    But we wouldn't want to be in a situation where it might turn
  • 03:07:30
    into something that the company wouldn't be able to pursue.
  • 03:07:32
    Because cost increase. SP's is very concerned about the cost to customers.
  • 03:07:37
    And in fact, in the case, its projections are
  • 03:07:40
    that customers are not going to pay anything for the recommended
  • 03:07:43
    portfolio, likely until 2036.
  • 03:07:46
    And even then resident the impact to residential customers is going to be
  • 03:07:50
    $1.78. So a lot
  • 03:07:54
    of the cost discussion that was happening today was surrounding
  • 03:07:58
    was quoting costs that don't account for the PTCs
  • 03:08:02
    or the energy savings from the solar.
  • 03:08:05
    From the solar project. So I just wanted to make that clear.
  • 03:08:09
    Mister chairman, May. I'm sorry, I did have one question.
  • 03:08:13
    The whole subject of weatherization came up and I guess there was a recommendation
  • 03:08:19
    that we follow ERCOT standards. Would you be agreeable to that?
  • 03:08:23
    You know, I think SP's opposed that during the proceeding.
  • 03:08:26
    Mainly because it believes that the NARC requirements
  • 03:08:30
    are sufficient. But I don't. You know, I don't know if either
  • 03:08:34
    Mister Rodriguez or Mister want to speak to that on the ERCOT
  • 03:08:38
    weatherization standards.
  • 03:08:46
    May I ask something related to that too? Because in
  • 03:08:50
    a prior docket, in Entergy's OCAP's docket, we applied
  • 03:08:53
    the ERCOT weatherization standardization. And I'm noticing
  • 03:08:57
    had been through my reading that three of the proposed plants are
  • 03:09:01
    in two of the solar and one of them one of the batteries that do
  • 03:09:04
    Betsy go. So I'm wondering how we can extrapolate ERCOT
  • 03:09:09
    standards into New Mexico. Right. I think.
  • 03:09:13
    May I provide a clarification on staff's position for
  • 03:09:17
    the weatherization standards? So staff's
  • 03:09:20
    position is just for plant x, which is the one located in
  • 03:09:23
    Texas. So those weatherization standards we. But not for
  • 03:09:26
    the ones in New Mexico. Thank you Mister
  • 03:09:32
    Homer. I think I understand. I'm good with your position.
  • 03:09:35
    It was kind of on a different. I was looking for something different
  • 03:09:39
    when I asked you to what Miss Stover provides. So I think I'm
  • 03:09:42
    good on this. Actually, I just wanted to clarify one thing on the SWEpcO case,
  • 03:09:45
    if that's okay. I think it was misstated. I think we're okay. I think we're
  • 03:09:48
    okay. Appreciate it. Any other questions?
  • 03:09:52
    Okay. Thanks to each of you. So, yeah,
  • 03:09:55
    like I said, a lot going on in this case,
  • 03:09:59
    obviously. And so I think another meeting
  • 03:10:04
    to kind of delve through all this would be helpful for me and, I think
  • 03:10:07
    for everybody.
  • 03:10:11
    All right, so that'll take us to the end of the contested
  • 03:10:14
    case proceedings. That will move us to rules and projects.
  • Item 28 - Public Comment
    03:10:19
    Item number 28, Sheila. Is anyone signed up to
  • 03:10:22
    give public comment? Yes, we have several people that have signed
  • 03:10:26
    up for public comment. We'll see if everyone's still
  • 03:10:29
    in the room. Let's start with.
  • 03:10:32
    I don't know if that's the first name. Correct. It looks like Camille.
  • 03:10:36
    Cool.
  • 03:10:39
    Did I mispronounce it? Cook. Cook. I'm sorry?
  • 03:10:44
    Cook. C o o k e? No. C o o k. Got it.
  • 03:10:47
    All right.
  • 03:10:51
    Yeah. Thank you. And just before you start, just clarify three minutes for each
  • 03:10:54
    person, all right? Yeah. My name is Camille Cook.
  • 03:10:58
    Thank you. Good afternoon, commissioners. My name is Camille
  • 03:11:01
    Cook, and I work with public citizens Texas office. I'm here to speak
  • 03:11:04
    about Hurricane Barrel and center point. What's been happening in Houston
  • 03:11:08
    since Monday morning has been an absolute disaster, a disaster that could
  • 03:11:11
    have been avoided. Centerpoint had days to prepare for barrel's approach,
  • 03:11:15
    and even before that, months and years of evidence of
  • 03:11:18
    weak resilience and had months and years of evidence of weak resiliency in their
  • 03:11:22
    infrastructure. With each new storm, Texans are losing more
  • 03:11:25
    and more confidence in center point. It seems like every year there is another
  • 03:11:29
    storm that wreaks more havoc on the city than the last storm. I mean,
  • 03:11:32
    at this point, it is becoming a monthly thing. People are still recovering from the
  • 03:11:35
    thunderstorms that knocked out power in May. The third largest city in the country should
  • 03:11:39
    not be plagued by resiliency issues like this. What may be
  • 03:11:42
    the most reprehensible, though, is the lack of communication with the many Texans who rely
  • 03:11:45
    on Centerpoint. I get it. It's difficult to fully weatherize every
  • 03:11:49
    single wire and poll in Houston, but the kind of communication we've seen
  • 03:11:52
    has been absolutely too low. 72 social media posts does not replace
  • 03:11:56
    the lack of a working outage map. Why hadn't it been up on Monday?
  • 03:12:00
    And why hadn't it been up before this storm? This lack of accountability to
  • 03:12:04
    the people for something as pivotal to modern american life as electricity is
  • 03:12:07
    a shame. And the weakest and most vulnerable in our society will pay for this
  • 03:12:10
    lack of accountability with their lives. Y'all commissioners exist
  • 03:12:14
    to protect the weakest and most vulnerable Texans from utility incompetence.
  • 03:12:18
    Y'all have the power to ensure that reliability and resiliency standards
  • 03:12:21
    are methadone upheld. Advanced and ready, y'all can
  • 03:12:25
    ensure that homes in Texas are more energy efficient, that wires and poles
  • 03:12:28
    in sugar land and Manchester are more resilient, and that
  • 03:12:31
    centerpoint is communicating to Texans in a clear and responsible way.
  • 03:12:35
    Chairman Gleason and all of y'all, I appreciate y'all's comments on the importance of
  • 03:12:39
    communication. I want to end by asking one question. If Centerpoint
  • 03:12:43
    is not beholden to the public, to the average texan seeking a better life,
  • 03:12:46
    who is centerpoint beholden to? Thank you. Thank you
  • 03:12:49
    for being here. You're welcome. The next
  • 03:12:53
    person that signed up to speak is Dave Cortez.
  • 03:12:58
    No, Hendeli. All right. The next person is,
  • 03:13:02
    I believe, is it Michelle Christensen?
  • 03:13:17
    Yes. Good afternoon, I'm Michelle Christensen.
  • 03:13:24
    Thank you for allowing me the opportunity to speak before the commission today.
  • 03:13:28
    As a concerned rate payer and member of the Windermere Oaks Water Supply
  • 03:13:31
    Corporation, I feel compelled to bring to your attention the ongoing
  • 03:13:35
    mismanagement of our small utility, which serves just 300 taps.
  • 03:13:39
    Without immediate intervention, we face a very real prospect of bankruptcy.
  • 03:13:44
    Currently, Windermere has four open cases with the PUC and
  • 03:13:48
    has recently hired a new law firm, John Carlton,
  • 03:13:51
    incurring significant legal expenses for unnecessary matters.
  • 03:13:55
    Despite the final order of the rate appeal, setting the legal budget at $3,000,
  • 03:14:00
    Windermere has already exceeded this amount by $48,000
  • 03:14:04
    this year and is on track to spend a over $100,000.
  • 03:14:08
    This mirrors the previous situation where rates were raised
  • 03:14:11
    to cover excessive legal fees. While significant resources
  • 03:14:15
    are spent on paying attorneys, crucial upgrades to the utility continue
  • 03:14:19
    to be neglected. During a recent board meeting,
  • 03:14:23
    the contract operators of the utility reported that although the
  • 03:14:27
    water quality meets all requirements, the nearly 40 year old
  • 03:14:30
    pipes are in dire need of maintenance. It stands to reason why
  • 03:14:34
    over the past three years we have repeatedly faced line breaks and water shutoffs.
  • 03:14:39
    In March, the IR's initiated an investigation into the
  • 03:14:42
    practices of Windermere Oaks Water Supply Corporation,
  • 03:14:45
    specifically scrutinizing their non member income and financial
  • 03:14:49
    management. Subsequently, the president and another
  • 03:14:53
    board member resigned, followed by the secaret treasurer and an additional
  • 03:14:57
    board member, leaving only the vice president in place.
  • 03:15:01
    The vice president, the last remaining member of the board who was
  • 03:15:04
    a board member that signed an agreement between the PUC staff and the utility
  • 03:15:08
    in PUC docket 56 167,
  • 03:15:12
    which was about Windermere failing to operate as a nonprofit corporation
  • 03:15:16
    in compliance with Texas Water code section 13.00,211
  • 03:15:21
    and section 24 included in the final commission order
  • 03:15:25
    that Windemere was required to sub file various reports by
  • 03:15:29
    June 1. However, to date, none of these required
  • 03:15:33
    reports have been filed with Windermere, opting instead
  • 03:15:36
    to repeatedly request extensions.
  • 03:15:40
    On June 26, 2024, the ALJ in
  • 03:15:43
    this case denied Windermere's latest extension request, finding the
  • 03:15:47
    corporation out of compliance. Despite this,
  • 03:15:50
    the vice president, who had agreed to the terms, failed to ensure
  • 03:15:54
    the reports were filed by the additional deadline of July 8,
  • 03:15:57
    2024, thereby causing the water system to miss
  • 03:16:01
    this deadline. So not only did we
  • 03:16:04
    fail to meet the agreed deadlines, but the new deadlines set by the
  • 03:16:07
    ALJ. Finally, in PUC
  • 03:16:11
    docket 56272, the compliance docket,
  • 03:16:15
    the rate appeal related to refunds and surcharges Windermere failed
  • 03:16:19
    to file an accurate report as they incorrectly reported refunds
  • 03:16:24
    to customers who were not entitled to them and not charging surcharges
  • 03:16:27
    to customers who should pay for them. In closing
  • 03:16:31
    at can I do go ahead? Yes, please.
  • 03:16:35
    In closing, at the most recent board meeting, the vice president stated that
  • 03:16:39
    they have only four months of income left to pay their bills.
  • 03:16:42
    This situation is dire and underscores a severe mismanagement
  • 03:16:46
    and lack of direction in this member owned and controlled water system, putting this
  • 03:16:49
    future at serious risk. Putting its future at serious risk thank
  • 03:16:53
    you for allowing me to speak today and for any assistance you can provide us,
  • 03:16:57
    including appointing a temporary manager. Thank you.
  • 03:17:00
    Thank you for being here. The next person that signed up is
  • 03:17:04
    Jamette Rosas.
  • 03:17:18
    Good afternoon. Thank you for allowing me the opportunity
  • 03:17:21
    to speak with the commission today on the issues with the Windermere Oaks
  • 03:17:24
    Water Supply Corporation pursuant to Texas
  • 03:17:28
    Water Code section 13.4132
  • 03:17:31
    A and 16 Texas Administrative Code section
  • 03:17:35
    24.355 a, one that the
  • 03:17:38
    commission is vested with the authority to appoint a willing person to
  • 03:17:42
    temporarily manage and operate a utility in instances where
  • 03:17:46
    the utility has effectively abandoned its operations.
  • 03:17:50
    Under 16 Texas Administrative Code section 24.355,
  • 03:17:55
    actions constituting abandonment, but are
  • 03:17:59
    not limited to a utility's failure to
  • 03:18:03
    adequately maintain its facilities, failure to provide
  • 03:18:06
    sufficient facilities leading to potential health hazards,
  • 03:18:10
    extended outages or repeated service interruptions and
  • 03:18:15
    demonstrating a pattern of hostility towards or repeatedly
  • 03:18:18
    failing to respond to directives from the commission or
  • 03:18:22
    inquiries from the utility's customers. The Windermere
  • 03:18:26
    Board of directors has fiduciary responsibilities to
  • 03:18:30
    act in the best interest of its members who are also its
  • 03:18:33
    customers. Their continued neglect and mismanagement are
  • 03:18:37
    not only a breach of these responsibilities, but will inevitably burden
  • 03:18:41
    the members with additional unnecessary expenses and
  • 03:18:45
    potential fines while jeopardizing the utility's ability to
  • 03:18:49
    provide continuous service. This situation cannot continue.
  • 03:18:54
    We believe it's necessary that the commission initiate proceedings
  • 03:18:58
    to appoint a temporary manager to protect the assets of the corporation
  • 03:19:02
    and ensure the reliable provision of utility services before
  • 03:19:06
    the situation deteriorates further and leads to a potential bankruptcy.
  • 03:19:11
    Thank you for allowing me to speak today. Thank you for being here.
  • 03:19:16
    Person that signed up is Danny. And is it plunker?
  • 03:19:19
    Yes. Okay.
  • 03:19:29
    If I mispronounced it, please state your name for the record. It's Danny Flunker.
  • 03:19:33
    F l u n k e r. Good afternoon,
  • 03:19:37
    commissioners. My name is Danny Flunker, and I'm here today as a concerned member of
  • 03:19:40
    Windham Roaks Water Supply Corporation and here to address serious issues
  • 03:19:44
    that have affected our community and to request your urgent intervention.
  • 03:19:48
    As some of you all may know, that we just had the PUC rate
  • 03:19:52
    case 50788, and the commission found that the 71% rate hike was
  • 03:19:56
    unjust and unreasonable. Over the past several years, our community
  • 03:20:00
    has endured a tumultuous period where board members
  • 03:20:03
    have spent millions to defend and conceal their misdeeds.
  • 03:20:07
    Today, the board continues to violate the Text Public Information act.
  • 03:20:11
    One of the new directors even admitted to deleting texts claiming they were personal,
  • 03:20:15
    when in fact, they were business related. I requested the financial information
  • 03:20:19
    in December of 2023 to assess the co op's financial health.
  • 03:20:23
    In response, the board spent over $4,000 merely reviewing this request.
  • 03:20:27
    To date, I have not received the requested information, and the board has
  • 03:20:31
    recently engaged the Texas attorney general to once again conceal other
  • 03:20:34
    public information from us. I would be remiss if I
  • 03:20:38
    did not mention that this has been an unsuccessful and very costly approach
  • 03:20:41
    to our board over the last several years.
  • 03:20:45
    In closing, regarding Docket 55454,
  • 03:20:49
    Windemere entered into an agreement with the commission staff acknowledging
  • 03:20:52
    its failure to comply with several statutory requirements and,
  • 03:20:57
    as the others had mentioned, that they've missed their deadlines
  • 03:21:00
    for submitting the class D annual Report 2023 annual report for
  • 03:21:04
    both June 1 and July 8, and they have
  • 03:21:08
    not had an audit. In fact, I don't believe Winter has ever had a financial
  • 03:21:11
    audit.
  • 03:21:14
    The lack of financial transparency is alarming and raises significant concerns
  • 03:21:19
    about the management of our resources.
  • 03:21:21
    The current board has also spent over $48,000 in legal fees,
  • 03:21:25
    March, April and May alone. I have requested
  • 03:21:28
    January and February and have not. They have
  • 03:21:32
    not been made available, and I request in June, and that has not been made
  • 03:21:35
    available to me either. So they
  • 03:21:39
    are on track at the $48,000 to spend more
  • 03:21:43
    than any previous board in this fiscal year.
  • 03:21:47
    Therefore, we formally request the appointment of an emergency manager to
  • 03:21:51
    oversee the operations of our water out. Thank you.
  • 03:21:54
    Thank you, sir. And the
  • 03:21:58
    next person is Bruce Sorgen.
  • 03:22:08
    Hello, commissioners. My name is Bruce Sorjen. In 2016,
  • 03:22:12
    the Windermere Oaks Water Supply Corporation sold four acres that it owned in the Spicewood
  • 03:22:16
    airport. The board sold it to a sitting director, who was also a realtor for
  • 03:22:19
    $203,000. It was never marketed.
  • 03:22:23
    She produced an extremely undervalued appraisal for $185,000
  • 03:22:28
    by an appraiser who later testified in court that he never laid eyes on the
  • 03:22:31
    land. Nor did he mention the word appraisal.
  • 03:22:36
    Nor did he mention the word airport in the appraisal. He appraised it as farmland.
  • 03:22:40
    This entire transaction was never mentioned on any
  • 03:22:44
    agenda. The board claimed it was simply a clerical error. The next board
  • 03:22:47
    spent more than $2 million of our money fighting not to get the land
  • 03:22:51
    back. I ask you, why would they not want this land back?
  • 03:22:55
    The four acres has since sold for more than $1.1 million. The said
  • 03:22:59
    director was found guilty in district court, breach of fiduciary duty and
  • 03:23:02
    conspiracy to harm the water company. As you
  • 03:23:06
    know, this said about a four year rate appeal.
  • 03:23:09
    Meanwhile, many struggle just to pay their water bill.
  • 03:23:13
    Our current board is headed down the same road. We have six acres
  • 03:23:16
    left that appraised in a 2016 forensic
  • 03:23:20
    appraisal for $760,000. Now, today,
  • 03:23:24
    the board is suddenly in a mad rush to sell this six acres. No appraisal,
  • 03:23:28
    no marketing. Why? Last month, a buyer
  • 03:23:32
    showed up at a WWSC board meeting, handed the directors
  • 03:23:36
    three offers and walked out. The first offer was for
  • 03:23:39
    a million dollars, and if signed in the next 19 hours,
  • 03:23:43
    it was valid. After that, it was void. The second offer for $800,000,
  • 03:23:47
    was good for 30 days if signed, and the third offer for $600,000
  • 03:23:52
    for the 60 days if signed. It was a setup.
  • 03:23:55
    The board knew what the details of the offer offers
  • 03:23:59
    were before evening, opening envelopes. Without even opening
  • 03:24:02
    the envelopes, did the board sign an offer.
  • 03:24:05
    Who knows? They're blowing through legal fees like a teenager with a credit card,
  • 03:24:10
    even engaging the attorney general in an attempt to block releasing information.
  • 03:24:15
    The $3,000 annual budget that you gave them lasted about five minutes.
  • 03:24:19
    They've spent $48,000, as others have said, in legal
  • 03:24:22
    fees for March, April and May alone.
  • 03:24:27
    I have here an anonymous letter sent to me last week by
  • 03:24:30
    the vice president of the water board, claiming that we,
  • 03:24:34
    quote, dissenters, have cost this community $1 million.
  • 03:24:38
    More than ten people have resigned from the board in recent months.
  • 03:24:41
    Recently, it was down to one director, who ran it for two months
  • 03:24:44
    alone by himself. This lone director has since hand
  • 03:24:48
    picked the replacements, refusing to have an election.
  • 03:24:52
    This community has proven time and time again that there are too many bad actors
  • 03:24:56
    that can't be trusted to run this water supply corridor corporation.
  • 03:24:59
    It's time for this commission to step up and stop this dysfunction. I am asking
  • 03:25:03
    this commission to install a temporary manager. Thank you.
  • 03:25:07
    Thank you, sir.
  • 03:25:11
    And the last person that signed up to speak is Norma Cortez.
  • 03:25:25
    That concludes the public comment section. Thank you, Sheila. I want to thank each
  • 03:25:28
    of you that showed up today, waited through the morning, through lunch,
  • 03:25:32
    and sat through this. Thank you for coming.
  • 03:25:41
    All right, so 29 will not be taken
  • 03:25:45
    up. I don't have anything on 30 or
  • 03:25:50
    31, so that'll bring us to item 32,
  • Item 32 - Chairman Gleeson lays out Project 55999
    03:25:53
    project number 5599, reports of ERCOT.
  • 03:25:58
    So I think, Davita, if you'd like to come up.
  • 03:26:07
    Good afternoon. Good afternoon, chairman and
  • 03:26:10
    commissioners, the vita de wire with ERCOT.
  • 03:26:15
    One topic that we wanted to remind you all
  • 03:26:18
    of, and provide a public update on was the cancellation
  • 03:26:22
    of the summer contract for capacity. ERCOT issued
  • 03:26:26
    a market notice on June 21 announcing the cancellation.
  • 03:26:30
    As I'm sure you'll all recall, we had been seeking up to 500
  • 03:26:34
    capacity demand response capacity to provide relief on
  • 03:26:37
    certain transmission constraints. In response
  • 03:26:41
    to the RFP that we issued, we received submissions
  • 03:26:45
    totaling 21.5 mw. Based on the
  • 03:26:48
    size of the response and the operational complexity and expense
  • 03:26:52
    that would have been incurred, we decided to cancel the RFP.
  • 03:26:56
    And I'm here available to answer any questions or take back any questions
  • 03:26:59
    that I'm unable to answer, if you have any,
  • 03:27:03
    commissioners. Debbie,
  • 03:27:06
    does the expectation still that ERCOT
  • 03:27:10
    will work with the stakeholders to come up with some kind of a framework using
  • 03:27:14
    the lessons learned from the prior two demand response RFPs?
  • 03:27:18
    Yes, ma'am. Absolutely. And I'll note that
  • 03:27:21
    some of the lessons learned from the winter RFP,
  • 03:27:25
    particularly with respect to process and making sure that
  • 03:27:28
    you all were informed and involved from before the get go,
  • 03:27:32
    were ones that we tried to incorporate in the summer. And we intend,
  • 03:27:35
    when we have the resources to do so, to put those in the protocols so
  • 03:27:39
    that everybody has a better understanding of the process going forward.
  • 03:27:42
    And we will follow up with you all to make sure that if there are
  • 03:27:45
    other lessons learned, that you want to make sure that we're incorporating, that we do
  • 03:27:48
    so. Yeah, I think this process was much better
  • 03:27:51
    this time around. Thank you. Thank you.
  • 03:27:56
    All right. The other topic is earlier this week,
  • 03:27:59
    and I apologize for the timing of the filing. We filed it as
  • 03:28:02
    soon as we were able. We filed an update
  • 03:28:06
    regarding the good cause exception that you all graciously
  • 03:28:09
    granted us with respect to the timelines for issuing a request for
  • 03:28:13
    proposal for must run alternatives to the CPS Bronag
  • 03:28:17
    units one through three that CPS
  • 03:28:21
    announced they were planning to retire at the end of March of next
  • 03:28:25
    year. We filed a timeline consistent with the order that
  • 03:28:28
    you all issued, and I am available to answer any questions or
  • 03:28:32
    address any comments that you have, commissioners questions,
  • 03:28:35
    comments on the timeline.
  • 03:28:39
    Glad you're doing it. Thank you.
  • 03:28:43
    Thank you, Divia. Thank you. We'll submit a market notice with this
  • 03:28:47
    timeline as well as the filing that we've already made. Thank you.
  • 03:28:50
    Thank you. So next,
  • Item 33 - Chairman Gleeson lays out Project 54445
    03:28:55
    so I know we don't have any protocols to adopt, but I'm going to call
  • 03:28:58
    up project number 54,445, review of protocols adopted by
  • 03:29:02
    the independent organization. Rebecca, you want to come up?
  • 03:29:12
    So I know in response to the board
  • 03:29:15
    adopting 1224 PotoMac, the IMM
  • 03:29:19
    filed comments earlier this week. I don't want to
  • 03:29:23
    get into a back and forth between ERCOT and Potomac,
  • 03:29:26
    but I did want to offer up. If ERCOT feels
  • 03:29:29
    it's appropriate and would like to respond to those filed comments, please do so.
  • 03:29:34
    ERCOT can work on a response and follow before the next open meeting.
  • 03:29:38
    Rebecca is there was for ERCOT.
  • 03:29:42
    And I know typically we ask for things to be filed a week out.
  • 03:29:47
    Show some grace on this. Try, I would
  • 03:29:50
    say try to get it a week out, but if you can, it's understandable as
  • 03:29:54
    well. Now that you
  • 03:29:57
    brought this up, Chairman Gleason, I'm wondering because we're, I guess, on the
  • 03:30:00
    way to consider this NPRR at the July 25 open
  • 03:30:04
    meeting. I'm wondering if we should allow stakeholders
  • 03:30:09
    respond to the IMM or provide any additional comments
  • 03:30:12
    that we may want to consider over here before we take up the protocol.
  • 03:30:17
    Yeah, I mean, my feeling, I'll just say my feeling, personally, I, you know,
  • 03:30:21
    a lot of what was raised in that filing, I think is ERCOT specific.
  • 03:30:25
    And so I think my preference. You know, we had the whole stakeholder
  • 03:30:29
    process out at ERCOT. I think if everyone's okay with that, I think my preference
  • 03:30:33
    would be to let ERCOT respond to the.
  • 03:30:37
    And leave it at that. I'm with you.
  • 03:30:41
    That's okay. That's fine. Okay.
  • 03:30:44
    Okay. We will file comments in response. Thank you.
  • Item 34 - Chairman Gleeson lays out Project 54584
    03:30:50
    Next. Up is item 34, project 54,584
  • 03:30:54
    reliability standard for the ERCOT market. The discussion on cost
  • 03:30:58
    of new entry Chris
  • 03:31:02
    good afternoon. You all follow the memo.
  • 03:31:09
    Good afternoon commissioners. I'm Warner Roth with commission staff.
  • 03:31:13
    At the request of the commission, during a previous open meeting,
  • 03:31:16
    staff filed a memo providing our recommendation on the cone study
  • 03:31:20
    results for this open meeting. In this assessment,
  • 03:31:23
    Brattle used a reveal preference methodology to identify
  • 03:31:27
    which generation resource technologies have been built recently in ERCOT and
  • 03:31:31
    which resources are in the interconnection queue and will be built in the foreseeable future.
  • 03:31:36
    From this, Brattle identified an aero derivative combustion
  • 03:31:39
    turbine located in Harris county as the recommended reference
  • 03:31:43
    technology. Through its analysis,
  • 03:31:46
    Brattle calculated that the cone for this arrow derivative CT
  • 03:31:49
    would be approximately $293 per kilowatt year.
  • 03:31:53
    They provided a couple of alternative calculations, including cone values
  • 03:31:56
    that have been used in PJM, an alternative reference technology with
  • 03:32:00
    a solar plus battery hybrid, and the sensitivity around a conventional
  • 03:32:04
    combustion turbine. The values for all these technologies are included in
  • 03:32:07
    staffs memo adjusted the 2020 $6 given
  • 03:32:11
    the current uses for this cone value, staff recommends that
  • 03:32:15
    the reference technology not be changed from a conventional frame turbine at this time,
  • 03:32:19
    and we recommend that you use the $162 per kilowatt year value
  • 03:32:23
    for a conventional combustion turbine that Brattle used as a comparison point
  • 03:32:26
    in its cone assessment. So there are currently two
  • 03:32:30
    primary uses for cone in this context. First, it's tied to
  • 03:32:34
    peakernet margin. If the reference technology is
  • 03:32:37
    changed, we believe that this formula would need to be
  • 03:32:41
    reviewed thoroughly. Currently, the Peakernet margin accumulates
  • 03:32:45
    for any settlement interval where the real time energy price exceeds ten
  • 03:32:48
    times the natural gas price index. Essentially, this aligns when
  • 03:32:52
    a conventional CT would expect earned revenues
  • 03:32:56
    in excess of the cost for that unit to operate.
  • 03:32:59
    Copying this formula over to a different technology without a thorough review would not be
  • 03:33:03
    appropriate. And as an easy to understand example, a solar
  • 03:33:07
    storage hybrid would have different operating costs and would earn different revenues at
  • 03:33:11
    different times of the year. So simply copying a
  • 03:33:15
    solar storage hybrid into this speakernet margin calculation would not be appropriate.
  • 03:33:19
    The differences between an error derivative ct and conventional frame CT are
  • 03:33:23
    less extreme, but they still need to be fully understood. All else being equal,
  • 03:33:27
    if both technologies are earning similar margins over their operating costs,
  • 03:33:31
    the industry should be picking the cheaper technology.
  • 03:33:34
    The reference technology will also play an important role in the market design discussions
  • 03:33:39
    around the reliability standard and the performance credit mechanism. Picking a
  • 03:33:43
    more expensive technology would impact the analysis of the PCM,
  • 03:33:46
    as the outcome would need to provide for the necessary price signal to incentivize investment
  • 03:33:50
    that builds the new reference technology to achieve the reliability standard.
  • 03:33:54
    This should not be done without explicit commission direction. To do so,
  • 03:33:58
    and to end the memo, staff provided several considerations for future
  • 03:34:02
    iterations of the cone study. First, staff recommends
  • 03:34:06
    that the study should include the determination of cone values for
  • 03:34:09
    several technologies as recommended by ERCOT at the last open meeting,
  • 03:34:13
    within the context of the broader market design review, this should also
  • 03:34:17
    include an assessment on the expected revenues each technology would expect to
  • 03:34:20
    earn in an energy only market. To better inform the commission on
  • 03:34:24
    whether the current market design is providing necessary investment incentives and
  • 03:34:27
    if not, what targeted adjustments would be needed.
  • 03:34:31
    Next, we believe that geographic diversity absolutely needs
  • 03:34:34
    to be considered in future cone studies, even if the current interconnection
  • 03:34:38
    queue shows a high concentration of resources being built within a single
  • 03:34:41
    area. This cone value is being used to assign
  • 03:34:45
    a cone for the entire ERCOT footprint. And so having a cone established based off
  • 03:34:49
    of a technology located within a specific zone may not show
  • 03:34:54
    the true cost of new entry for the entire ERCOT footprint.
  • 03:35:00
    And just as a couple of examples, miso calculates the
  • 03:35:04
    cone each year for each of the local resource zones, so it has ten different
  • 03:35:07
    cone values that it uses. And then, looking at Brattle's
  • 03:35:11
    most recent cone assessment for PJM, they provided four cone values that capture
  • 03:35:14
    differences in the constrained areas of the PJM footprint, so it is common
  • 03:35:18
    to have multiple geographic areas when determining cone
  • 03:35:21
    for different isos. Next,
  • 03:35:25
    when the commission conducts its system wide offer cAp program review in 2026,
  • 03:35:29
    staff recommends that the commission consider whether the low system wide offer cap
  • 03:35:33
    is further needed. During the emergency
  • 03:35:37
    pricing program rulemaking, some stakeholders provided comments that recommended the
  • 03:35:41
    elimination of peaker net margin and the LCAP, as they felt these efforts
  • 03:35:44
    will be duplicative of the consumer protection value that the emergency pricing program
  • 03:35:49
    provides. And to be clear, staff is not recommending the elimination
  • 03:35:52
    of the LCAP at this time. But given its ties to cone, we recommend
  • 03:35:55
    that the ongoing need be considered during the review of the commission's system wide offer
  • 03:35:59
    cap programs. And as a last note, ERCOT has requested guidance
  • 03:36:03
    on the timeframe for updating cone. Staff recommends
  • 03:36:06
    that, at a minimum, that a cone study should be conducted every five years
  • 03:36:09
    to align with the review of the system wide offer cat programs and the broader
  • 03:36:13
    market design, if approved in the current reliability standard rulemaking.
  • 03:36:16
    And with that, I'm happy to take any questions. Thanks, Werner. Appreciate it.
  • 03:36:21
    Just quickly. So, to the reference technology,
  • 03:36:23
    Brattle's recommended technology, they're a derivative,
  • 03:36:27
    so the thinking behind that is that's what's currently being built is what you
  • 03:36:31
    said, correct? Yes, that's correct. That is the cost for a new
  • 03:36:34
    era derivative to be built. Yes. To your knowledge,
  • 03:36:38
    are new era derivatives actually being built in Texas.
  • 03:36:41
    And while I can't speak to every single era derivative CT that's out there
  • 03:36:45
    in the interconnection queue, my understanding that they are primarily refurbished technologies
  • 03:36:49
    and Brattle was not able to ascertain
  • 03:36:53
    the cost of that, as that is some competitively sensitive information for those
  • 03:36:57
    that are building those. So that is not the technology that's
  • 03:37:01
    being prevalently built? I would say no. Okay. I do think some
  • 03:37:04
    were bid into the TEF application. So that
  • 03:37:08
    goes to, you know, and I talked to a number of stakeholders about this as
  • 03:37:12
    we talk about timing, of updating this. I think, I don't want to do this
  • 03:37:16
    too often, but I think perhaps after we set
  • 03:37:19
    the first one, maybe the next time we shorten that because we'll have TEF,
  • 03:37:24
    but we'll also have the build of facilities
  • 03:37:29
    that are not TEF, but are looking to get the completion bonus.
  • 03:37:32
    So we'll have a wide breadth of information that will come not too
  • 03:37:36
    soon after we have to adopt this. So I think the way I sit right
  • 03:37:39
    now, and I'll be honest, and, you know, I'm not ready to make a decision
  • 03:37:43
    on all this today. I still have. I want to talk to ERCOT some more
  • 03:37:45
    and staff and some stakeholders. But I think, as I said today,
  • 03:37:50
    you know, we are going to get a lot more information. So I think the
  • 03:37:53
    first iteration of update may need to come sooner than we
  • 03:37:57
    would, you know, on an ongoing basis. And I'm in agreement,
  • 03:38:00
    based on my discussions with ERCOT and Brattle, their snapshot
  • 03:38:05
    that they took for the preferred or the reveal preference
  • 03:38:09
    technology only looks back three years. And what's in the interconnection queue
  • 03:38:13
    right now, they have no visibility into the TEF. So I think that
  • 03:38:16
    that's important to have a broader snapshot of
  • 03:38:19
    what's actually being built more into the future.
  • 03:38:25
    I think the other thing you're going to see is we have an aging fleet,
  • 03:38:28
    right? And so a lot of your baseload generation would
  • 03:38:32
    not necessarily be the peakers. It might be the
  • 03:38:36
    alternative technology that staff is recommending.
  • 03:38:41
    And also, I think there was some work that was done by Brattle on
  • 03:38:46
    the alternative costs that kind of supports what staff
  • 03:38:50
    is recommending on the.
  • 03:38:54
    Not the roct, but the frame Ct.
  • 03:38:59
    Werner, as far as in the analysis, the useful
  • 03:39:03
    life of these facilities was pegged at. What was
  • 03:39:08
    it 20 years. I believe it was 20 years, yes. And typically,
  • 03:39:11
    we do this on 30 years. Is that correct?
  • 03:39:15
    Correct. I know different parts of the country
  • 03:39:18
    do it in different ways. The last assessment I saw was 25 years,
  • 03:39:22
    but I would need to go back and confirm that. So what I got from
  • 03:39:26
    ERCOT and Brattle was that they recognized that
  • 03:39:30
    power generation plants, their life cycle is like 30,
  • 03:39:33
    40 years plus, but they set the amortization period
  • 03:39:36
    at 20 years because that's when the generators want to be able to recover their
  • 03:39:40
    costs of the plant.
  • 03:39:43
    So it's not necessarily the life of the plant, but when the generator want
  • 03:39:46
    to recover their costs,
  • 03:39:53
    I think you start to see. I think that's right. I think you have,
  • 03:39:57
    once you get beyond 20 years, you have banks that increase
  • 03:40:00
    financing costs. If you're going beyond 20 years for facilities, you also
  • 03:40:04
    have outages that you increase beyond 20 years.
  • 03:40:07
    But also remember that the plant that you put in in
  • 03:40:10
    year one is not the same plant that you're running in year 20 because
  • 03:40:14
    of maintenance that's happened over those 20 years. Sure,
  • 03:40:17
    I think. But shortening it is just, I think, is more indicative
  • 03:40:21
    of changing that variable is going to
  • 03:40:24
    have an impact on the analysis if we've done different timelines in the past.
  • 03:40:28
    So comparing those to previous assessments, you're not necessarily
  • 03:40:32
    comparing apples to apples. I think that's fair. Yeah. And in
  • 03:40:36
    fact, that is something that I requested from Arkady and Brattle is to provide us.
  • 03:40:40
    I won't get into the preferred technology just yet,
  • 03:40:44
    but my thoughts on that. But with respect to the amortization
  • 03:40:48
    period, to look at something like between 20
  • 03:40:51
    and 30 years, like a 25 year period, just to kind of get an
  • 03:40:55
    idea for competitive purposes, of the magnitude of the impact of just
  • 03:40:59
    extending it a little bit out because the
  • 03:41:03
    amortization period has a direct dollar impact
  • 03:41:07
    on the ultimate cone figure.
  • 03:41:12
    So I would like to see 25 years.
  • 03:41:16
    You'd like to see what it looked like, but yes. And then
  • 03:41:19
    make the decision whether it makes sense, whether it's 20 or 25 years.
  • 03:41:24
    Yeah, because I think we're seeing the plants stay out there for, like,
  • 03:41:27
    more than 40 years. Actually, a lot of the plants I've toured recently are like
  • 03:41:30
    50 to 60 years old. So, I mean,
  • 03:41:35
    I just like to see the figure.
  • 03:41:39
    Other questions for Warner.
  • 03:41:44
    One other thing that I like, maybe not so much of a question. Well,
  • 03:41:47
    a question and then a request. Did y'all look at the
  • 03:41:52
    impacts of levelized real versus nominal dollar
  • 03:41:59
    analysis? Chris Brown
  • 03:42:03
    Commission staff so all the values recorded in this table are in constant
  • 03:42:07
    2020, $6. So there's.
  • 03:42:10
    They're all adjusted and updated for inflation pegged to 2026.
  • 03:42:15
    Yeah, I'd like to see the. Once we figure out what reference technology
  • 03:42:19
    that we're going to use, whether, you know, I know you all recommended a frame
  • 03:42:23
    CT, I would like to see what the
  • 03:42:27
    real levelized real dollar impact is for frame CT,
  • 03:42:31
    because the way I understand real versus nominal is that nominal is
  • 03:42:35
    taking, you know, you're looking out to the longer horizon,
  • 03:42:39
    and that's capturing inflation, inflation that could be out there in the future and
  • 03:42:43
    applying it earlier in the period of the life of the plant.
  • 03:42:46
    So real is actually the actual cost of the plant, year by
  • 03:42:50
    year inflation or not. So it
  • 03:42:53
    seems to be a little bit more accurate
  • 03:42:58
    on what the costs are on an annual basis, the real,
  • 03:43:01
    the levelized real dollar figure.
  • 03:43:03
    So I would like to see that. And I requested that from ERCOT and Brattle
  • 03:43:07
    as well, on whatever reference technology, or we could apply it to
  • 03:43:11
    the CT frame you all proposed, just for comparative analysis.
  • 03:43:15
    We'll take that back and we'll be sure to come to the next open meeting
  • 03:43:18
    ready to discuss that.
  • 03:43:22
    So I'm going to, you know, I'll take the next two weeks. Like I said,
  • 03:43:25
    talk to staff, talk to ERCOT. I'm going to reach out to certain stakeholders to
  • 03:43:29
    talk to. I think it's probably, probably also
  • 03:43:33
    something to think about if we would want to hear from any stakeholders next
  • 03:43:37
    time, so. But I'd like to give them
  • 03:43:40
    an appropriate amount of time to get prepared to actually come speak. So I'd ask
  • 03:43:45
    if you want to hear from anyone, please let everyone know,
  • 03:43:48
    maybe by the 18th week out. I don't want
  • 03:43:52
    to just spring this on, folks, so we have a good discussion.
  • 03:43:55
    Does that work? Warner,
  • 03:43:59
    Chris, thank you. Appreciate it.
  • Item 35 - Chairman Gleeson lays out Project 55826
    03:44:07
    Next up is item 35 55, project number 5862.
  • 03:44:12
    Texas Energy fund in ERCOT generation
  • 03:44:16
    loan program.
  • 03:44:22
    David, good afternoon. Good afternoon, commissioners.
  • 03:44:25
    David Smeltzer, commission staff this should be
  • 03:44:29
    an easy rulemaking. As you know, we previously adopted a rule
  • 03:44:32
    for the Texas Energy fund in ERCOT loan program.
  • 03:44:36
    When that rule was posted to the secretary of state's website, there was an administrative
  • 03:44:40
    error leaving off some of that text. So the staff is proposing a
  • 03:44:45
    rulemaking to readopt the rule exactly as we adopted
  • 03:44:48
    it before. But we have to go through the formal rulemaking process. So this
  • 03:44:52
    is the proposal for publication for that. And I would emphasize this does not affect
  • 03:44:56
    any ongoing applications, application processes,
  • 03:44:59
    and should result in no changes to the rule as adopted. We are just working
  • 03:45:05
    to correct this quick error. Thank you.
  • 03:45:09
    Will result in no changes. Well, obviously you
  • 03:45:12
    can adopt staff recommends no changes. Yeah.
  • 03:45:15
    Yeah. Okay. I just like said, I wanted to have
  • 03:45:19
    you up here just so we'd make that clear so no one got nervous that
  • 03:45:21
    we were making changes. Correct. And for clarification for stakeholders,
  • 03:45:24
    the version of the rule that is posted that, you know,
  • 03:45:27
    that was signed and in the interchange and is posted on the commission's
  • 03:45:31
    website is the correct version of the rule that
  • 03:45:35
    you should look to. And then when we complete this rulemaking,
  • 03:45:39
    the version on the secretary's website will align with the rule that we previously adopted
  • 03:45:43
    and everyone will be on the same page.
  • 03:45:45
    Okay. Thank you. Thank you.
  • 03:45:50
    I don't have anything on 3637.
  • 03:45:53
    Sorry. I need the commission to vote to approve publication
  • 03:45:57
    in the register. I would entertain a motion to approve publication.
  • 03:46:02
    So moved. Second. A motion. A second. All those in favor say aye.
  • 03:46:07
    Opposed? Motion prevails. Thanks, David. Thank you. Appreciate you.
  • 03:46:11
    I don't have anything on 3637-3839. Was consented.
  • Item 40 - Chairman Gleeson lays out Project 55718
    03:46:15
    That brings us to item 45 5718,
  • 03:46:18
    reliability plan for the Permian Basin. Yes, chairman,
  • 03:46:22
    I was going to call Arkada, too. Commissioner Kobos.
  • 03:46:33
    Hi, Christy. All right. Good afternoon, commissioners.
  • 03:46:36
    Christy Hopps with ERCOT.
  • 03:46:41
    Christy? Yes. If you can, please lay out your July monthly report,
  • 03:46:45
    some of the highlights that have happened recently since the last report.
  • 03:46:49
    Absolutely. So it's been a little bit since we've given you an update.
  • 03:46:52
    Just want to kind of recap where we've been
  • 03:46:56
    and the progress that's been made of. So, as you recall,
  • 03:46:59
    you directed us late last year in the direction
  • 03:47:03
    from HB 5066 to do a transmission reliability
  • 03:47:07
    study for the Permian Basin region.
  • 03:47:10
    I'd like to take a moment here to really thank my staff for the
  • 03:47:14
    amount of work that they've done. It's been a fast and furious
  • 03:47:17
    six months for them to get to where we are today.
  • 03:47:20
    Also appreciate the cooperation with the TSPs and the. The consumers
  • 03:47:24
    of the region providing us the information that we needed to get this
  • 03:47:28
    study timely provided for you.
  • 03:47:31
    We did a study scope that was laid out earlier
  • 03:47:35
    this year. We studied load growth forecasted for
  • 03:47:38
    2030 and 2038.
  • 03:47:41
    And just to put that kind of in perspective,
  • 03:47:44
    the previous load forecast that we had studied based on
  • 03:47:47
    purely assigned interconnection and I.
  • 03:47:51
    The last study we've done was just over 16,000
  • 03:47:56
    information we received from the S and P global study as well as
  • 03:47:59
    the TSP's in the area. The amount of load that we studied
  • 03:48:03
    grew over 40% to just under 24,000
  • 03:48:07
    mw for 2030 and just over 26,000
  • 03:48:11
    mw for 2038.
  • 03:48:14
    To put that in perspective, what does that mean?
  • 03:48:17
    The Permian Basin is now about the size of the
  • 03:48:20
    coast region, which has cities like Houston, Galveston and Victoria,
  • 03:48:25
    as well as the north central zones, Dallas Fort Worth
  • 03:48:29
    area and Waco. So we're talking about a large
  • 03:48:32
    amount of load in the Permian Basin region. And that region also
  • 03:48:36
    does not have a lot of conventional generation located in it.
  • 03:48:40
    What that brings us to is the need for a lot of both local
  • 03:48:44
    improvements to the transmission system as well as import pass to
  • 03:48:48
    transfer power across the state to the region.
  • 03:48:52
    We have had numerous meetings with TSP's.
  • 03:48:56
    It's been monthly updates to the regional planning group. We most
  • 03:48:59
    recently held a workshop where we went back through the entire kind
  • 03:49:03
    of study process. The assumptions that were made, decisions that were made,
  • 03:49:07
    reviewed that at the end of June and then opened
  • 03:49:11
    up for one last comment period with the stakeholder process and
  • 03:49:15
    that closed yesterday. So we're processing any final comments that
  • 03:49:19
    we received. We're now working to finalize
  • 03:49:22
    our report, which we are on track to file by the end of the
  • 03:49:26
    month. We're right now getting target filing that by July 25
  • 03:49:30
    here at the commission. So we're just over two weeks out
  • 03:49:34
    from getting that report finalized for you. Some of
  • 03:49:37
    the highlights as I mentioned,
  • 03:49:41
    quite a bit of transmission needs both in the local area as
  • 03:49:44
    well as those import pass. Because of the incredible
  • 03:49:48
    low growth not only in that region but as well as across the state.
  • 03:49:52
    We have expanded our study planning process to also look at higher
  • 03:49:56
    voltage transmission. Currently the highest voltage that's operated in the
  • 03:50:00
    IS 345. Our planners took a look at options
  • 03:50:03
    for 500 kv as well as 765 kv.
  • 03:50:07
    And we've got information related to all
  • 03:50:10
    of those that we'll be including in our report for you,
  • 03:50:14
    for your consideration. Thank you.
  • 03:50:16
    Christy, if I could just real quick. I was just told that
  • 03:50:20
    our court reporter would really appreciate a 15 minutes break. I know we're
  • 03:50:23
    near the end but want to take care of our court reporter and so maybe
  • 03:50:26
    thank you for your layout and then if we could just take a 15 minutes
  • 03:50:29
    break. So let's take a recess until 318.
  • 03:50:41
    We will reconvene our open meeting at 320
  • 03:50:45
    and continue our discussion on item 40,
  • 03:50:48
    reliability plan for the permit.
  • 03:50:51
    Christy, were you done with your report? Right. I was just, you know, kind of
  • 03:50:54
    what's, what's next? So we. As I said,
  • 03:50:57
    we just closed comment. The final comment period yesterday.
  • 03:51:00
    The team will be taking a look at those addressing any of those questions,
  • 03:51:04
    we'll be finalizing our report. We,
  • 03:51:07
    the project is on the agenda one last
  • 03:51:10
    time at the July RPG meeting, just really so we can address any
  • 03:51:14
    questions or comments that came in that we need to address.
  • 03:51:17
    And we'll be filing our report with you all and then be prepared to
  • 03:51:21
    help answer questions, participate in your workshops.
  • 03:51:24
    The next steps here. Great. And so are you anticipating
  • 03:51:28
    that the plan will still be filed no later than July 25? That's correct.
  • 03:51:31
    Okay. And so you'll have an rpg discussion one
  • 03:51:35
    last time, collect some stakeholder feedback. My understanding from our
  • 03:51:39
    staff is that we'll provide feedback to the stakeholders at that rpg meeting on what
  • 03:51:42
    our next steps will be here at the commission once the plan is filed
  • 03:51:46
    here. So, you know,
  • 03:51:51
    we received a filing recently from Texoga
  • 03:51:54
    on ERCOT's division of the plan into
  • 03:51:58
    2030 and 2038. Can you touch
  • 03:52:02
    on that again as to why the plan was divided into those phases?
  • 03:52:06
    That was a part of the initial scope and that was the way the forecast
  • 03:52:09
    data was provided to us. And so we,
  • 03:52:12
    we took that study approach, which we communicated
  • 03:52:16
    since the beginning. What we see in
  • 03:52:21
    the 2030 plan is,
  • 03:52:24
    you know, a need for a substantial amount of the local transmission
  • 03:52:28
    to serve the local needs. As we extend
  • 03:52:32
    that into the 2038 forecast, that's when we start adding additional
  • 03:52:36
    import path capability into the region for the additional load growth
  • 03:52:40
    that we see.
  • 03:52:42
    Okay,
  • 03:52:46
    so you allude
  • 03:52:49
    to some information on the high voltage lines in Miso.
  • 03:52:54
    And is that, are those, are those cost estimates for
  • 03:52:59
    the current 765 in Miso, or are they for the long range transmission
  • 03:53:03
    planning discussions that are happening right now in tranche? I believe it's the long range,
  • 03:53:07
    but I will confirm that and get back to you. Another thing that we've
  • 03:53:10
    been doing in the interim that was, you know, just initial
  • 03:53:13
    estimates. We've also reached out to different providers
  • 03:53:17
    that have been working in 765,
  • 03:53:21
    development or implementation, and getting additional cost estimates
  • 03:53:25
    that we'll be able to provide a range to help validate
  • 03:53:29
    that information that we obtained from ISO.
  • 03:53:35
    In your presentation for the various options, 345, 765,
  • 03:53:39
    500, you include an addition that says
  • 03:53:42
    additional new dynamic reactive devices required in
  • 03:53:46
    your report that you filed the final plan at the commission.
  • 03:53:50
    Can you provide us any kind of an average cost that that may
  • 03:53:53
    be? Because I would hate to have any, you know,
  • 03:53:57
    surprise costs added to the overall total cost
  • 03:54:00
    of the plan. Right. That would be a part of the report. Okay,
  • 03:54:05
    great.
  • 03:54:09
    Let's see here.
  • 03:54:14
    Also as part of your cost estimates, and I
  • 03:54:18
    understand you're providing the high voltage aspect as an additional option
  • 03:54:22
    to consider to complete that last leg to
  • 03:54:26
    get to 2038.
  • 03:54:30
    I know you're going to provide some data on that and I guess some of
  • 03:54:33
    the information you've gotten so far from Miso and whatever you can
  • 03:54:37
    at this point because you're still in the process of completing the higher voltage study.
  • 03:54:40
    That will be done a few months after we
  • 03:54:44
    approve a plan. I don't know about
  • 03:54:47
    in this plan that you file, but definitely in
  • 03:54:51
    the study that you file. I think it's going to be really important to
  • 03:54:54
    understand what supporting transmission infrastructure,
  • 03:54:58
    facilities, equipment will be needed to take
  • 03:55:03
    the system from 345 to 500 or 765.
  • 03:55:07
    What are those additional components to help us step
  • 03:55:10
    up to the higher voltage and what is that cost?
  • 03:55:15
    And that's all I have. I'll open it up to any questions that you all
  • 03:55:18
    may have commissioned. Yeah, I got a couple. I got, I do
  • 03:55:21
    have a couple. One of them is on your slide number eleven. You talk
  • 03:55:25
    about 765. I see that you have it on the other slides as
  • 03:55:29
    well. But you say that total new right away is approximately
  • 03:55:32
    1200. A 20% adder was included for the new
  • 03:55:36
    lines. Why did you add 20% for
  • 03:55:40
    the new right away? A 20% adder? So the reason
  • 03:55:43
    for, and we did that on each of
  • 03:55:47
    the options that's included and the reason for that is right
  • 03:55:51
    now we're giving you estimates from, you know, point a to point b.
  • 03:55:56
    Right. Recognizing that after the, once land is approved,
  • 03:55:59
    then the transmission service providers have to go through their routing
  • 03:56:02
    process, acquiring land. And what we've
  • 03:56:05
    been observing is the days of building straight transmission
  • 03:56:09
    lines are no longer. And that helps to account for variations
  • 03:56:13
    that the TSP's may have to accommodate. I would say that that
  • 03:56:17
    is probably right in most of Texas. But as you get out into West Texas
  • 03:56:21
    where there are less trees, less structures, there's less impediments,
  • 03:56:28
    it might, 20% may be high when you get out there.
  • 03:56:32
    It's not a big deal. But I note that because
  • 03:56:36
    the 765 line, which I'm totally in favor of,
  • 03:56:40
    could be as little as 1000 miles. The 20%
  • 03:56:43
    additional adds 250 miles of 765.
  • 03:56:46
    So 1000 miles quite a bit.
  • 03:56:51
    Do you all in your study, are you going to have the
  • 03:56:58
    total capacity volume?
  • 03:57:01
    I don't know if that's the right word of import or
  • 03:57:04
    export. We're working through that. Okay.
  • 03:57:08
    On a per voltage basis. Right. So what we're trying to
  • 03:57:11
    lay out is as much information as possible. Now some of it may
  • 03:57:16
    not be all in this report. Right as we start taking
  • 03:57:19
    a look at the broader system. But the benefits of
  • 03:57:23
    higher voltage are not just, you know, reduced right aways in the
  • 03:57:26
    cost. There are a lot of additional benefits, as you're
  • 03:57:30
    alluding to that we need to take a look at for the whole
  • 03:57:33
    picture right now.
  • 03:57:37
    I guess the final question that I have is I
  • 03:57:43
    expect you all to come back with a 345 solution. Do you all.
  • 03:57:47
    We will have a. So are you talking about for the permian or
  • 03:57:50
    are you talking about for the entire state, the Permian? Yes,
  • 03:57:54
    we have a 345 solution.
  • 03:57:57
    And I guess, let me back up the way we're laying out the report.
  • 03:58:01
    There are, if you think about a menu, no matter
  • 03:58:04
    what decision you make about the import pass, they are common
  • 03:58:08
    amongst all. And so we'll lay that out for you. No matter which
  • 03:58:12
    option you take, these are definite routes
  • 03:58:15
    that are needed. And then if
  • 03:58:19
    you stay with 345, you need this additional piece to be added.
  • 03:58:23
    Or if you go to a higher voltage, you need less 345
  • 03:58:27
    and underbuild and this additional
  • 03:58:31
    build for the higher voltage. So we're going to lay out those options so
  • 03:58:35
    it hopefully will make it easier for you as you're reviewing through those.
  • 03:58:39
    And will you have a final recommendation or will you just be laying out the
  • 03:58:42
    options for us to look at? We will be laying out
  • 03:58:46
    the options for you to consider. Okay.
  • 03:58:49
    So it sounds very similar to a prior process we've had.
  • 03:58:52
    Yes. So I have one question. Sorry. On the.
  • 03:58:56
    On the 345, the 500 and then the 765.
  • 03:59:00
    So you'll have the capital cost. Okay. But you alluded
  • 03:59:03
    to there are other benefits. So you also going to define
  • 03:59:07
    what those other benefits are to the best of our ability in
  • 03:59:10
    this plan, but that is ongoing work for the entire state.
  • 03:59:14
    So we recognize this is new
  • 03:59:18
    territory for the last time, a step up change in
  • 03:59:22
    the system. You know, we're, before many folks in this room were probably
  • 03:59:26
    even born. So we want
  • 03:59:30
    to make sure we're laying out all of the information that you need
  • 03:59:34
    both, you know, right of ways, miles costs
  • 03:59:39
    and a whole host of other benefits. There's stability,
  • 03:59:42
    voltage benefits between the different voltages as well.
  • 03:59:46
    So line loss. Yes, exactly. Resiliency.
  • 03:59:49
    Right. Okay. So you're going to try to quantify that. Yes.
  • 03:59:52
    Okay. So do you have anybody at ERCOT
  • 03:59:55
    that's really supporting 500,
  • 03:59:58
    765 or do you have most engineers that are, like,
  • 04:00:02
    falling back, like. Well, 345 is a safe solution?
  • 04:00:06
    I would say if I had to survey an informal
  • 04:00:10
    survey based off of discussions, I've had. At first there was some
  • 04:00:14
    hesitancy. But once we're starting to see the results and
  • 04:00:18
    the potential savings and benefits, there's excitement
  • 04:00:22
    about being a part of this opportunity to provide a better
  • 04:00:25
    solution for the consumers of Texas. Okay. And at this point
  • 04:00:29
    in time, HVDC is not being considered.
  • 04:00:32
    You looked at it initially, but for this, it's not an
  • 04:00:36
    application you're considering. It is not. And the reason why?
  • 04:00:39
    One was because. Because of several reasons.
  • 04:00:43
    The main one being the market design changes that would have to
  • 04:00:47
    come along with it. And we're seeing the need for this
  • 04:00:50
    increased transmission in the near term.
  • 04:00:54
    And so knowing the process needed
  • 04:00:58
    to go through market design changes to be able to operate that in the ERCOT
  • 04:01:01
    market, we felt would be longer.
  • 04:01:05
    The bigger issue would be actually getting converter stations. So I've
  • 04:01:09
    recently heard that the supply
  • 04:01:12
    chain backlog on those is quite some.
  • 04:01:16
    It's like over 22,033.
  • 04:01:19
    So I yielded my questions and now I have more.
  • 04:01:22
    So you've done your due diligence on looking at
  • 04:01:27
    supply chain to some degree for the converters
  • 04:01:31
    that Jimmy just referred to. Have you looked at what
  • 04:01:35
    supply chain looks like for 500, 345 kv auto
  • 04:01:38
    transformers versus 765
  • 04:01:42
    345 auto transformers? We are looking at that.
  • 04:01:45
    So far, I've gotten feedback from one utility and
  • 04:01:49
    we've got outreach to a vendor, some vendors
  • 04:01:53
    and additional utilities to try and get different information
  • 04:01:57
    so we can give you a good range,
  • 04:02:00
    maybe a good idea to understand how many vendors there are.
  • 04:02:04
    Because I've heard that there's only two vendors that actually make those
  • 04:02:08
    two manufacturers that make those higher voltage auto transformers.
  • 04:02:12
    So which leads me to kind of
  • 04:02:16
    just, you know, in your exchange with Commissioner Glotfield. Just so
  • 04:02:19
    I understand. So your plan will have a baseline
  • 04:02:22
    set of common transmission projects that will be 345
  • 04:02:27
    kv transmission projects and the local projects that will be needed,
  • 04:02:31
    you know, just to support the heart of the plan.
  • 04:02:34
    And then there will be optionality for
  • 04:02:39
    the imports. Correct. But the imports from
  • 04:02:42
    the top of coming in from the north side, those have always been 345
  • 04:02:47
    kv. Are you looking at higher voltage coming in from
  • 04:02:50
    the top or is it just 345 kv? I guess. Are we
  • 04:02:53
    just only looking at higher voltage for the long line coming into the permian for
  • 04:02:57
    the long lines? Okay. Water needed. Okay.
  • 04:03:02
    All right. I think that's all the questions I really have this time.
  • 04:03:09
    All right, thank you. I'll get your report soon. Thank you. Thank you,
  • Item 41 - Chairman Gleeson lays out Project 56000
    04:03:13
    Chrissy. That will take us
  • 04:03:16
    to item 41, project number 5600.
  • 04:03:20
    Firm fuel supply service, Harka.
  • 04:03:31
    Good afternoon, Harika. Basaran commission staff and I have Tyler Nicholson
  • 04:03:35
    with me. He will go over the core of the memo
  • 04:03:39
    and I will talk about the process and the next steps.
  • 04:03:43
    Good afternoon, commissioners. So last week,
  • 04:03:47
    staff filed a memo providing its recommendations for
  • 04:03:50
    the firm fuel supply service program parameters for the 2024 to
  • 04:03:54
    2025 contract period, which is the third such
  • 04:03:57
    period. In consultation with
  • 04:04:01
    the independent market monitor in ERCOT, staff recommends the following
  • 04:04:04
    for the upcoming contract period. Basically,
  • 04:04:08
    we recommend keeping the status quo from the last two contract periods of
  • 04:04:12
    the megawatt procurement quantity having a no megawatt limit,
  • 04:04:16
    the budget cap being 54 million, the obligation
  • 04:04:20
    period being a max of 48 hours and a single clearing price
  • 04:04:23
    mechanism. The big change is the offer cap price
  • 04:04:28
    changing to 12,240 /mw based off
  • 04:04:32
    current fuel oil prices compared to the previous years.
  • 04:04:36
    And another thing we are recommending to ERCOT, and we already started
  • 04:04:40
    discussion to maybe perform a new survey. We think
  • 04:04:43
    that this market now in the third year, it's still the same players
  • 04:04:48
    and it has not been any new entrance or any
  • 04:04:51
    new thing. We really think that we concerned about the competitiveness
  • 04:04:55
    of this market. So we just want to ERCOT
  • 04:04:58
    to do another survey. How can we expand it? How can we
  • 04:05:02
    have new solutions and just look at the
  • 04:05:06
    program again overall.
  • 04:05:09
    So I'm in favor of the recommendation. I'm good with everything.
  • 04:05:13
    I do think we need to look at ways to expand this program.
  • 04:05:16
    So I think a survey is a good idea to do that again,
  • 04:05:20
    to see what barriers we may have and how we may be able to expand
  • 04:05:24
    this for the next procurement period.
  • 04:05:28
    I think. I would disagree
  • 04:05:32
    with that. I mean, I think the question. I mean, it's been less than
  • 04:05:35
    a year since we went through this discussion about how we get
  • 04:05:40
    in the first firm fuel procurements, and there was
  • 04:05:44
    one issue about the.
  • 04:05:49
    On the gas supply system, you know, where the resource resides on
  • 04:05:52
    that system and is there interruptible power between them and the
  • 04:05:57
    resource? I think we found that when we
  • 04:06:00
    made that decision that there
  • 04:06:04
    couldn't be anything in between the resource and
  • 04:06:08
    the firm fuel storage facility.
  • 04:06:11
    We got zero responses. And the question becomes,
  • 04:06:15
    if those are the responses that we want in
  • 04:06:19
    the system, do we need to go back and do a whole new survey to
  • 04:06:23
    do that, or do we need to adjust? Adjust what? We thought
  • 04:06:27
    we just adjust what we had done
  • 04:06:31
    before and say, look, there are other
  • 04:06:34
    natural gas facilities that can provide firm fuel service in
  • 04:06:38
    addition to just diesel or fuel oil.
  • 04:06:41
    And can we do that today without a
  • 04:06:45
    survey? Is really, I guess what my question is. I think we can.
  • 04:06:49
    I think we know this is out there, and I
  • 04:06:53
    think a survey would just help us confirm that.
  • 04:06:55
    Okay. And I guess I would add, because we had a
  • 04:06:58
    pretty extensive conversation, and I think to your point, Commissioner Glotfield,
  • 04:07:04
    we made a decision not to have certain, you know, you know,
  • 04:07:08
    resources behind LDC's because the fact of the matter,
  • 04:07:11
    what hasn't changed is that the rover commission prioritizes residential gas.
  • 04:07:14
    Electric plants are not prioritized. What hasn't changed either is that
  • 04:07:18
    ERCOT doesn't have visibility into the natural gas system. So there
  • 04:07:21
    were some clear issues that came up when
  • 04:07:25
    we went through this entire deliberation that resulted in us ultimately
  • 04:07:30
    not looking at those types of supply arrangements that we
  • 04:07:33
    spend a lot of time looking at. So unless we're going to be okay with
  • 04:07:36
    moving resources out from behind LDC's or we're going to get some
  • 04:07:40
    additional visibility into the gas system that we don't
  • 04:07:43
    have now, then I'm not sure what a survey is going to get us.
  • 04:07:46
    At the end of the day, we're going to end up at .1 unless we're
  • 04:07:48
    willing to take on more risk, willing to
  • 04:07:52
    take on more risk to get more firm fuel out there. But,
  • 04:07:55
    you know, I just feel that at the end of the day, we have
  • 04:07:58
    to kind of take a step back and look at the fact that even
  • 04:08:02
    with the amount of firm fuel we have right now, we've never even used all
  • 04:08:05
    of it. And that's because it's been very
  • 04:08:09
    actually strategic, the use of it because of
  • 04:08:13
    the curtailment with the pipeline that runs through the center of Texas and that it's
  • 04:08:16
    been like clockwork and it's worked well,
  • 04:08:19
    I think, you know, I'm not opposed to expanding. Expanding is fine.
  • 04:08:24
    But to what? And for what? And how when
  • 04:08:28
    there's additional risk that we're going to take on that we clearly saw from all
  • 04:08:31
    of ERCOT analysis that went on for months. And so
  • 04:08:35
    my thing is, you know, I don't know what a survey is
  • 04:08:39
    going to get us other than, you know, there's still interest out
  • 04:08:42
    there from firm fuel supply arrangements that we.
  • 04:08:46
    That can't comply with ERCOT's existing process. And if we
  • 04:08:50
    modify the process, then what does that look like? And what
  • 04:08:53
    risks are we going to shoulder as the regulators over here at the end of
  • 04:08:57
    the day for this very important product
  • 04:09:01
    that is still. I get it. No liquidity,
  • 04:09:05
    you know, it's not competitive enough. I'm wondering if there's changes that could be
  • 04:09:09
    made within the existing product. Right now that can be made,
  • 04:09:12
    that can make the product more competitive, because I
  • 04:09:16
    just feel like. I feel like we've had this circular sort of
  • 04:09:20
    situation going on for the last two years, and I'm
  • 04:09:23
    just wondering, like, what the survey gets us
  • 04:09:27
    at the end of the day. But back to .1 and debating this out and
  • 04:09:30
    trying to figure out how we're going to make this work or Jimmy this in.
  • 04:09:33
    So we're going to be okay. From a risk standpoint,
  • 04:09:38
    maybe what end up is changing the program. Maybe just become
  • 04:09:42
    a cost based program just for certain specific units
  • 04:09:46
    and it's not a competitive product. So we don't have to
  • 04:09:50
    go through this. Maybe that will be an option if we, again,
  • 04:09:53
    after the survey, and again, we will run the survey before
  • 04:09:57
    it goes out with every office and we'll get your feedback about questions
  • 04:10:01
    we may be asking. But at the end, then we can make a decision.
  • 04:10:04
    And this could be a more like a course based program.
  • 04:10:11
    So cost based program for the existing dual fuel capability
  • 04:10:15
    would make it more competitive within what we have now.
  • 04:10:19
    But I think my broader comments were just on trying to
  • 04:10:23
    go out beyond. It would be great to do
  • 04:10:26
    that. Right. I mean, but, I mean, it's tough.
  • 04:10:30
    I think what we found, the information we got the last time around, is that
  • 04:10:34
    there's a lot we don't know and a lot we just don't have
  • 04:10:38
    jurisdiction over certain things that put us, the commission
  • 04:10:42
    and ERCOT, in a tough position to, you know,
  • 04:10:46
    go and pay for those arrangements. And at the end of the day,
  • 04:10:50
    we may have no control over any of it. So I
  • 04:10:53
    think just a couple things. A survey would help me, just as another data point.
  • 04:10:58
    When that last decision, when the risk tolerance was talked about last time, I wasn't
  • 04:11:01
    up here. And so I think it would be helpful to me to know what
  • 04:11:05
    else is out there. I think there's a chance we may be able to get
  • 04:11:08
    more for less money than we're currently paying potentially. And so
  • 04:11:12
    I'd like to know that, because I think risk is a trade off.
  • 04:11:15
    And so for me personally, I think a survey is
  • 04:11:19
    worth it to get that data point to know what's out there and what we
  • 04:11:22
    could avail ourselves of, and then we can make another determination about the risk profile
  • 04:11:26
    that we're willing to take on. And is that something that we can do for
  • 04:11:30
    this winter? No, no, no. This is for the following.
  • 04:11:34
    So I guess that begs the question, if we have winter storm
  • 04:11:37
    URi number two this winter,
  • 04:11:41
    the risk that I see is that we don't take the pipeline
  • 04:11:44
    storage piece of this as firm fuel, and because
  • 04:11:48
    we're doing a survey and. Sounds kind of
  • 04:11:52
    administrative, but it's, you know, it's part of the bar process.
  • 04:11:58
    I mean, I will. I think we know what the universe is out
  • 04:12:02
    there. I totally respect that. You weren't sitting
  • 04:12:06
    up here. You were sitting right there, though,
  • 04:12:09
    and I was. My vote didn't count down there.
  • 04:12:13
    True. So I just. Again, I would
  • 04:12:17
    say that I think we know what going to get in this. You know,
  • 04:12:20
    I know you want that information. I appreciate that. I'm not
  • 04:12:23
    totally dead set. I just. I'm a little weary that if we go on
  • 04:12:27
    this new survey, then we're going to lose a whole nother
  • 04:12:31
    year. You know? I don't know.
  • 04:12:34
    I don't. I don't know that we. Why would we lose another year, David?
  • 04:12:37
    I can't tell you. Surveys. I don't think it takes that long. I don't think
  • 04:12:40
    we lose another year. Hello again.
  • 04:12:44
    David Dwyer with ERCOT. I did want to point out that
  • 04:12:48
    currently in the protocols, the protocols specify what resources
  • 04:12:52
    are qualified to provide the service. So if you
  • 04:12:55
    wanted to expand for this next year, we would have to get a good cause
  • 04:12:59
    exception to the existing protocols and all that that entails.
  • 04:13:04
    We've already started talking with staff about potential timing for the
  • 04:13:07
    survey. If you all want to move forward with that, we think we could
  • 04:13:10
    conduct it likely in the October to November timeframe,
  • 04:13:14
    get y'all results in November and December for you all to decide whether or not
  • 04:13:17
    you'd want to change the qualifications. If so, we'd be able
  • 04:13:21
    to pull out a protocol and have it through the stakeholder process before
  • 04:13:26
    the issuance of the RFP for next year, next year
  • 04:13:29
    being the next winter obligation period after the upcoming one.
  • 04:13:36
    Listen, mister chairman, I appreciate that you
  • 04:13:40
    want that information, and I'll defer to you on this. I just.
  • 04:13:45
    I think we're going to get 80
  • 04:13:48
    or 90% of what we already know.
  • 04:13:52
    But I'm happy to defer to you and let you get the survey
  • 04:13:55
    and let you get the data that you need to make the decision. Yeah.
  • 04:13:58
    And like I said, I think you're right. I'd just like to confess to.
  • 04:14:01
    I'd like to know the University of what's out there. If we
  • 04:14:04
    redo the survey, is there additional information
  • 04:14:08
    or questions that we'd ask after being, as we've
  • 04:14:12
    operated it for a couple of years, is there any different questions
  • 04:14:17
    that we might ask that we didn't think about asking at the onset?
  • 04:14:21
    That's actually a topic that we've raised with staff. They talked
  • 04:14:25
    about barriers to entry. Our past surveys were kind of
  • 04:14:28
    asking what resources exist and are interested in providing
  • 04:14:32
    the service. Exploring what barriers to entry there are
  • 04:14:36
    would involve different questions, and we're happy to develop those. And as staff mentioned,
  • 04:14:40
    I'm sure there will be a process to run those by you all.
  • 04:14:43
    I think we are thinking more than just what's out there. Like,
  • 04:14:46
    thinking more creatively, thinking more out of the box. I think
  • 04:14:50
    there's value to that.
  • 04:14:58
    I think a survey is a great idea, mister chairman.
  • 04:15:02
    Thank you, commissioner.
  • 04:15:07
    And I'm fine with that. Yeah. I mean, I am, but it's
  • 04:15:11
    just, you know, having gone through this a few times, I'm like, kind of like
  • 04:15:15
    Commissioner Gotfeldy. I'm like, I don't know we're gonna get. But I respect the fact
  • 04:15:18
    that you want to kind of see, and we'll just kind of figure it out
  • 04:15:20
    as long as it's not applying for this winner. Yeah, plenty of time. And we
  • 04:15:23
    will work with all of you before we publish the survey and get your
  • 04:15:26
    feedback as well. You said risk tolerance. That's a good idea.
  • 04:15:31
    In that concept of. Let's ask about the barriers.
  • 04:15:33
    Exactly. Thank you, Haru.
  • 04:15:37
    Thanks, Tyler. Thank you, David, for coming up.
  • 04:15:41
    All right, item number 42 is consented. I don't have
  • 04:15:45
    anything until item 53. That would
  • Item 53 - Update from Executive Director Connie Corona
    04:15:48
    be an update from our commission council and executive director.
  • 04:15:55
    Good afternoon, commissioners. Just one brief item.
  • 04:16:00
    Staff will be hosting a staff led workshop on
  • 04:16:04
    the performance credit mechanism parameters that recently.
  • 04:16:09
    That we recently received comment on. That will be on
  • 04:16:13
    July 25 after the next open meeting.
  • 04:16:18
    Thank you, Connie. All right.
  • 04:16:21
    And for me, as we discussed at previous
  • 04:16:25
    HIPAA meeting, we scheduled additional meetings this year to give us maximum
  • 04:16:29
    flexibility, particularly for the many rules and projects
  • 04:16:32
    that are in front of the commission in addition to the tested cases.
  • 04:16:35
    Right now, we have two meetings in July. Today's meeting, the 25th.
  • 04:16:39
    We have three scheduled for August, the first, the 15th
  • 04:16:43
    and 29th. I've converted Connie and Barksdale,
  • 04:16:46
    and we agree that while there's a lot of upcoming work for the commission,
  • 04:16:50
    that in the next two months, it's best to just have two meetings in
  • 04:16:53
    August. We can accomplish the work in two meetings. And so with
  • 04:16:57
    your agreement, we'll cancel the August 1 meeting but keep the August
  • 04:17:01
    15 and August 29 meetings.
  • 04:17:04
    I think we're probably all okay with that. All right.
  • 04:17:08
    Jimmy will be here. That's the way
  • 04:17:11
    to end Sheila on a high note. All right. Something everybody likes.
  • 04:17:16
    Okay. With there being no further business before us today this May. And the public
  • 04:17:19
    Utility commission of Texas is hereby adjourned.
A - Chad Burnett, AEP Texas, Beryl Efforts, 56937
Starts at 00:03:44
A - Commissioner's Questions to Chad Burnet, AEP TEXAS, Beryl, 56793
Starts at 00:11:22
A - Stacy Whitehurst, TNMP, Beryl Efforts, 56793
Starts at 00:19:14
A - Commissioner's Questions to Stacy Whitehurst, AEP Texas, Beryl, 56793
Starts at 00:26:32
A - Eliecer Viamontes, Entergy, Beryl Efforts, 56793
Starts at 00:32:08
A - Comissioner's Questions to Eliecer Viamontes, Entergy, Beryl, 56793
Starts at 00:39:37
A - Jason Ryan, CenterPoint, Beryl Efforts, 56793
Starts at 00:45:00
A - Commissioner's Questions to Jason Ryan, CenterPoint, Beryl, 56793
Starts at 01:02:25
19 - Sheila lays out Docket 54657
Starts at 01:25:26
19 - Rosalind Duberstein, LP&L, 54657
Starts at 01:28:16
19 - Julie Davis, OPUC, 54657
Starts at 01:35:03
19 - Andrew Aus, Comission Staff, 54657
Starts at 01:39:22
16 - Sheila lays out Docket 56354
Starts at 01:53:14
2 - Sheila lays out Docket 54662
Starts at 02:00:06
15 - Sheila lays out Docket 56328
Starts at 02:01:50
20 - Sheila lays out Docket 54812
Starts at 02:02:40
22 - Sheila lays out Docket 55995
Starts at 02:05:38
25 - Sheila lays out Docket 56225
Starts at 02:06:27
27 - Sheila lays out Docket 56693
Starts at 02:07:28
18 - Sheila lays out Docket 52728
Starts at 02:08:35
21 - Sheila lays out Docket 55255
Starts at 02:09:40
21 - Andrea Stover, SPS, Docket 55255
Starts at 02:11:27
21 - Jule Davis, OPUC, Docket 55255
Starts at 02:15:58
21 - Ben Hallmark, TIEC, Docket 55255
Starts at 02:21:20
21 - Sergio Herrera, AXM, Docket 55255
Starts at 02:34:52
21 - Todd Kimbrough, GSEC, Docket 55255
Starts at 02:40:03
21 - David Hrncir, Comission Staff, Docket 55255
Starts at 02:47:16
21 - Andrea Stover, SPS, Docket 55255, Closing Remarks
Starts at 02:52:13
21 - Chairman Gleeson to Hallmark & Herrera, Cheaper Alternatives, Docket 55255
Starts at 03:02:11
28 - Public Comment
Starts at 03:10:19
32 - Chairman Gleeson lays out Project 55999
Starts at 03:25:53
33 - Chairman Gleeson lays out Project 54445
Starts at 03:28:55
34 - Chairman Gleeson lays out Project 54584
Starts at 03:30:50
35 - Chairman Gleeson lays out Project 55826
Starts at 03:44:07
40 - Chairman Gleeson lays out Project 55718
Starts at 03:46:15
41 - Chairman Gleeson lays out Project 56000
Starts at 04:03:13
53 - Update from Executive Director Connie Corona
Starts at 04:15:48

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