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Item 0 - Chairman Gleeson calls meeting to order
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This meeting of the Public Utility Commission of
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Texas will come to order. To consider matters
00:00:20
that have been duly posted with the Secretary
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of State for January 31st 2025. Good morning,
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everybody. Davida, Shelah, Connie, Barksdale. Good morning. Good
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morning. Hope everybody is doing well. So just
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real quick housekeeping. I think I'll propose we
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take everything in order today. We don't have
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a closed session. And then just for everyone
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listening, our February 13th open meeting, we're gonna
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have a start time of no earlier than
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11 AM instead of our typical 9:30. We
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have a legislative hearing that, Connie and I
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have to be at. So that starts no
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earlier than 11. So as soon as we're
00:01:00
done there, we'll hustle back over here and,
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start our meeting, but no earlier than 11.
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That works for everybody. Your face says it
00:01:09
all. You're good. I like it. Okay. Maybe
00:01:12
later. Hopefully not then. Alright. Shelah, good morning.
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Will you take us through the consent agenda,
Item 0.1 - Commission Counsel Shelah Cisneros lays out Consent Agenda
00:01:19
please? Yes. Good morning, Commissioners. Let's see, Commissioner
00:01:23
Hjaltman filed a memo in Project No. 52761
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stating that she's recused from items 5, 14
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and 15. By individual ballot. Boy, this microphone
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sounds loud today. By individual ballot, the following
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items were placed on your consent agenda, Items
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3, 6, 7, 10 through 15, 17, 18,
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and 20. Also by individual ballot, the Commissioners
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voted to place item 36 on the consent
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agenda. No one signed up to speak on
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this project. And, additionally, item 4 will not
Item 0.1 - Chairman Gleeson asks for motion to approve items on Consent Agenda
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be taken out. Thank you, Shelah. I'll entertain
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a motion to approve the consent agenda as
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laid out by Shelah. So moved. Second. I have a motion
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and a second. All those in favor, say aye.
Item 1 - Public comment for matters that are under the Commission’s jurisdiction, but not specifically posted on this agenda
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Aye. Opposed? Motion prevails. Alright. That'll take us
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to Item No. 1. Shelah, has anyone signed
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up for Public Comment today? Yes. We have
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2 people that have signed up for public
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comment. The first person is Cyrus Reed. Good
Item 1 - Cyrus Reed - Lone Star Chapter, Sierra Club - Petition to Governor Abbott
00:02:23
morning, Cyrus. Good morning, Commissioners. For the record,
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Cyrus Reid, Lone Star chapter the Sierra Club.
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I will likely be at the same meeting
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you're at on, February 13th. Your budget is
00:02:34
very important to us. We appreciate all the
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support we can get. Thank you. I am
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here with a petition. It's not to you
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guys. It's to Governor Abbott. So I have
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copies of the petition, not a petition for
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rulemaking, just a petition to the governor, with
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4 items on it. And we launched it
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in October, and we have over 1100 signatures
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from Texans all over the state. And it
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says, Governor Abbott, keep the power on. We
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demand a clean, reliable, resilient, and affordable energy
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grid. And it's got 4 things we want.
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And some of those are in your purview.
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Some of them may require legislative action, but
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some of them are certainly within your purview.
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Number 1, invest in a modern electric grid
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by developing regional microgrids, expanding use of local
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clean energy and energy storage resources, batteries, I
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e backup power, bearing power lines where it
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makes sense, and making high voltage transmission systems
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stronger. Number 2, pay Texans the same way
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wealthy corporations are paid to use less electricity
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when energy conservation calls are made. Number 3,
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you'll appreciate this, increase funding and efficiencies for
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energy savings programs to lower electric bills, make
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homes more livable, and reduce stress on the
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grid. And 4, remove any anti renewable policies
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that have made it harder to develop solar
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energy and energy storage. I have copies for
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each of the Commissioners, and we will be
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dropping a a copy of this petition, to
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the governor's office after this meeting with those
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names, and I will also file it as
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a PDF. And in terms of what you
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guys have control over, just a reminder, we
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still need to do a rule making on
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the backup power packages, which is something in
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your purview and I know is something on
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your agenda. And number 2, as we've discussed
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many times, commissioner Jackson, y'all made a promise
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that at some point, we would do a
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rule making on the energy efficiency, the energy
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savings programs at the utilities. I know it's
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somewhere in your calendar, but it's in our
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petition, and we're again asking that you move
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forward on those items. And with that, I'm
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happy to take any questions that you might
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have. Thank you, Cyrus. Commissioners? Alright. And I
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will leave. Thank you for being here. We
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look forward to to reading your proposal. Thank
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you. The next person to speak is Joe
Item 1 - Joe Jimenez - Former President of Windermere Oaks WSC
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Jimenez. Good morning. Good morning. I am Joe
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Jimenez, former volunteer president of the wind of
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the board of directors for the Windermere Oaks
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Water Supply Corporation from March 2019 until April
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2023. My 3 years of testimony in the
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50788 rate case is on the PUC
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interchange. Please allow me 2 clarifications to prior
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public comments. On January 16th, I said Windermere
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directors, when they implemented the appealed rates in
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2020 to defend off wild lawfare allegations, believe
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defense against unjust and unreasonable lawsuits to be
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a valid expense. Courts agree that Texas legislature
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agrees that PUC did not. My clarification, Judges
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Ciano and Wiseman in their June 29, 2023
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PFD acknowledged Texas Business Code chapter 8's mandatory
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requirement for financial defense of volunteers. It was
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the commissioners and staff who did not. My
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second clarification, 50788 rate payers representative Patty Flunker
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made public comment here on December 19th last
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year that rate payers likely would have been
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okay with less than a 25% increase. That's
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likely. The the Oncor should reflect that miss
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Flunker throughout the 3 year rate process, rate
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appeal, never said or offered that either as
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a talking point or possible resolution. My comment
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now, on April 11, 2023, PUC staff attorney,
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ERCOT Lander, wrote in brief for 50 788
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that, quote, there must be a finite financial
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limit put in place for this small water
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system that serves fewer than 300 people, and
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she was referring to Windermere continuing to incur
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a quarter million quarter of a $1,000,000 in
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legal debt per year. Miss Lander did not
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did not cite or reference Texas Water Code
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or PUC rules for such a finite financial
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limit. It does not exist. It did not
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exist in 2020 when the rates were made.
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Instead, Miss Lander was voicing her subjective
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preference for a post facto application of a
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finite financial limit. If the PUC were ever
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to go through a rule making process to
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establish legally such a finite financial limit, I
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would suggest that there's public interest in establishing
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a similar finite finite financial limit constraint on
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plaintiff's attorney's legal fees to balance any lawfare
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equally within budgets. But ask yourselves, how would
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they go over with Texas's plaintiff's attorneys? And
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not well, I'm sure, But the legislature is
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in session so the Commission can make an
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attempt to legitimize miss Lander's post facto preference.
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Otherwise, the PUC should begin a rulemaking process
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to make miss Lander's extralegal preferences legitimate. In
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view of the judge's PFD and then the
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Cobos memorandum's 180 degree reversal, it is hard
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not to observe that the PUC implemented an
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unpublished extralegal finite financial limit akin to we
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know it when we see it preferences of
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ratepayer representatives, PUC Staff, and Commissioners. Again, Judges
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Ciano and Wiseman's PFD should be noted as
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having separated themselves from that subjective extralegal process.
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One more sentence, please. In conclusion, in Windermere's
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case, Commission action has run counter to the
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Texas legislature's goal of enabling financially solvent public
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utilities to deliver water and sewer services through
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published, objective, transparent laws or rules. Thank you
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for your time. Thank you for being here.
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Shelah, is anyone else signed up for Public
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Comment? No. No one has signed up for
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comment for any other items on the agenda.
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Alright. Thank you. Alright. That'll take us to
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Item No. 2 on the agenda. Shelah, will
Item 2 - Docket No. 52370; SOAH Docket No. 473-22-07686.WS – Application of East Houston Utilities, Inc. for Authority to Change Rates
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you lay out Item No. 2 please? Item
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No. 2 is Docket No. 52370, the
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application of East Houston Utilities for authority to
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change rates. Before you is a proposed order
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that addresses an unopposed agreement. No corrections or
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exceptions were filed, and the Chairman filed a
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memo in this docket. So I I hope
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it's clear from the memo I filed that
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that I wrestled with this one a lot,
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but ultimately came down on the side that
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I don't think the record supports the settlement
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or the application. And so, you know, particularly
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regarding affiliate expenses. And so I I think
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the best kind of way forward on on
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this is is to deny the application, and
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my memo provides guidance for what I'd like
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to see in a future base rate case,
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that that I think will be helpful going
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forward. The other thing I would say is
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we we've been dealing with this case, I
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know we mentioned this last time, for three
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and a half years. I don't put that
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on staff. I wanna be clear about it.
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That is not staff's fault. I'm I think,
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you know, when I was on staff, I
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would have done the same thing and tried
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really hard to settle this. And if I
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could have found a settlement, I would have
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been good with it. I just don't think
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the record supports it. So so I think
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that's really the best way forward on this
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case and, and hope that they've we see
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a base rate case pretty soon from this
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company, but happy to hear y'all's thoughts. I'm
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in agreement. I feel like that the record
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should support, the settlement, and in this case,
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it did not. And so I'm in agree
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with your, with your finding in your memo.
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I too am in agreement to deny the
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application. I am struggle just like yourself, but
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without the evidence there to make that recommendation,
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I cannot get to the right point, and
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I don't think pushing it to would guarantee
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we get that evidence. And I agree with
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the recommendations you give them to to come
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back with in the right case and make
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sure that those are followed. So great. Okay.
Item 2 - Motion to deny the application of East Houston Utilities, 52370
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Then I'll entertain a motion to deny the
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application of East Houston Utilities for the reasons
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cited in my memo in our discussion and
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direct document management to draft an order consistent
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with the Commission's decision. So moved. Second. I
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have a motion and a second. All those
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in favor, say aye. Aye. Opposed? Motion prevails.
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Alright. Shelah, that'll bring us to Item No.
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5. Will you lay out item 5, please?
Item 5 - Docket No. 55577; SOAH Docket No. 473-24-15740.WS – Application of Aqua Texas, Inc. to Amend Its System Improvement Charges under 16 TAC § 24.76
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Yes. This is Docket No. 55577, the application
00:10:59
of Aqua Texas to amend its system improvement
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charges. Before you is a SOAH proposal for
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decision. Aqua Texas filed exceptions. So ALJ has
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filed a letter declining to make changes to
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the PFD. The Chairman filed a memo in
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this docket as well. So as my memo
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says, I don't think I think this is
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another case where the, the applicant did not
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meet its burden of proof. I agree with
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the ALJ's ultimate conclusions in this case. And,
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my memo really lays out some modifications and
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clarifications, to those thoughts, but happy to hear
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any any of y'all's feelings on this one
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as well. I agree as well. I don't
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feel like that they presented sufficient documentation. And
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one of the things that was pointed out
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in your memo was that there had been
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some direction previously, in terms of how they
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needed to organize the information by project and
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put it in an organized manner. So I
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feel like that is that's absolutely imperative that
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we have that so that we can so
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that we can have the information and the
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data that we need to find an application
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sufficient. But in this particular case, that was
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not presented, and so I'm in agreement with
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your memo. I am recused, Mr. Chairman. Alright.
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You're the only one with recusals left, I
Item 5 - Motion to adopt PFD with changes, 55577
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think. So congratulations. Alright. Then I would move
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that we adopt the PFD with the changes
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outlined in my memo and with our discussion.
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I second. The motion is second. All those
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in favor, say aye. Aye. Opposed? Motion prevails.
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Alright. Shelah, that'll take us to Item No.
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8. We lay out Item No. 8 on
Item 8 - Docket No. 56350 – Application of Quadvest, LP to Amend Its Certificates of Convenience and Necessity in Harris County
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the agenda. This is Docket No. 56350, the
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application of Quadvest to amend its certificates of
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convenience and necessity in Harris County. Before you
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is an appeal of Order No. 8 filed
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by Quadvest, and the Chairman filed a memo.
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So on this one, I'm I'm gonna recommend
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that we grant the appeal of Order No.
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8 and lift the abatement on this case.
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I filed the memo in large part because
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I think a a previous memo I filed,
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for Crescent MUD in a different docket, had
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some confusion. I wanted to file the memo
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so that I could kinda outline my thoughts
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on why these cases were different and a
00:13:13
and a path forward. So, again, I think
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I think we should grant this appeal of
00:13:17
Order No. 8. Happy to hear your thoughts.
00:13:20
Yeah. I'm in agreement with their memo. I
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think it does lay out. I I wonder,
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and I wanna get y'all's feedback on if
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you think a project would be helpful to
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get more clarification Oncor if you think that
00:13:30
it is provided enough for guidance for future
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cases going forward? So I think for me,
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there's there's enough clarification in the memo. I
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think maybe I'd ask staff if you think
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there's any benefit in this case to to
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having a project. I know we have a
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lot on our on our plates at this
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point. So is the is the benefit there
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for the for the cost and resource time,
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or or is this clear enough? I I'm
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very comfortable with the direction, that was in
00:13:58
your memo, Mr. Chairman, as long as that's
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the will of the commission. I I feel
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like that we have the information that we
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need here. I agree with abating this proceeding.
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It's important, again, that we move forward with,
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making sure that these facilities are provided in
00:14:20
a timely manner. And I think that you
00:14:23
did a good job in your memo deciphering
00:14:26
between the 2 different cases and, giving direction
00:14:30
in terms of moving forward. Yeah. And I
00:14:33
I guess one last thing I wanna say.
00:14:35
I appreciate the effort in in the process
00:14:37
in this, you know, where we had some
00:14:39
confusion. This is how the process is supposed
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to work out where people bring this to
00:14:44
our attention, and we we remedy any any
00:14:46
confusion. So appreciate all the work on this
Item 8 - Motion to grant appeal of Order No. 8, 56350
00:14:48
and the process that led us here. So
00:14:51
with that, I will entertain a motion to
00:14:53
grant the appeal of Order No. 8 consistent
00:14:55
with my memo and our discussion. So moved.
00:14:58
Second. I have a motion and a second. All
00:14:59
those in favor, say aye. Aye. Opposed? Motion
00:15:02
prevails. Alright. Shelah, that'll take us to Item
00:15:06
number 9 on the agenda. We lay out
Item 9 - Docket No. 56535 – Petition of Maurice Williams, Kimberly Williams Barnett, and Kristi Williams Neyes to Amend City of Royse City’s Certificates of Convenience and Necessity in Collin County by Streamlined Expedited Release
00:15:08
Item No. 9, please. Yes. This is Docket
00:15:11
No. 56535. The petition of Maurice Williams, Kimberly
00:15:16
Williams Barnett, and Christy Williams Neyes to amend
00:15:20
the City of Royce's CCN in Collin County
00:15:24
by streamline expedited release. Before you is the
00:15:27
proposed order. No corrections or exceptions were filed,
00:15:30
and the Chairman filed a memo. So here,
00:15:33
you know, I I think we should approve
00:15:36
the proposed order. My memo is really to
00:15:38
to speak to a finding of fact and
00:15:40
to offer delegation to the Office of Docket
00:15:42
Management. I'm happy to hear your thoughts. I'm
00:15:45
in agreement with your memo and, appreciate the
00:15:48
clarification that you put here. We have a
00:15:49
number of these cases that come through, and
00:15:51
I think this is, this is helpful in
00:15:53
terms of of this this consideration in matters
00:15:57
such as these. I I'm in agreement as
00:16:00
well and, would approve with the the change
Item 9 - Motion to approve proposed order, 56535
00:16:04
in the order. Okay. I'll entertain a motion
00:16:06
to approve the proposed order consistent with my
00:16:09
memo. So moved. I second. Motion is second.
00:16:11
All those in favor, say aye. Aye. Opposed?
00:16:14
Motion prevails. Alright. Finally Shelah, I think that'll
00:16:18
take us to Item No. 19 on the
Item 19 - Docket No. 57244; SOAH Docket No. 473-25-04144 – Application of Southwestern Public Service Company for Approval of a Purchased Power Agreement with Wildcat Ranch Energy Storage, LLC and for Related Relief Severed from PUC Docket No. 55849
00:16:21
agenda. This is Docket No. 57244. The application
00:16:27
of SPS for approval of a purchase power
00:16:30
agreement with Wildcat Ranch Energy Storage. Before you
00:16:34
is the SOAH proposal for decision. SPS filed
00:16:37
exceptions. The SOAH ALJ filed a letter declining
00:16:40
to make changes to the PFD, and the
00:16:42
Chairman filed a memo. So the memo proposes
00:16:45
two changes to finding a fax. I think
00:16:48
the ALJ made the right call in this
00:16:50
case recommending and I'd recommend that we adopt
00:16:53
the, the PFD consistent with the changes in
00:16:56
my memo and deny SPS's request for, the
00:17:00
approval of the PPA. I'm in agreement as
00:17:03
well. I'm in agreement with the modifications. Okay.
Item 19 - Motion to approve PFD with modifications, 57244
00:17:07
I'll entertain a motion to approve the PFD
00:17:09
with the modifications outlined in my memo. So
00:17:12
moved. 2nd. I have a motion and a
00:17:15
second. All those in favor, say aye. Aye.
00:17:17
Opposed? Motion prevails. Alright. That will take us
00:17:22
to the end of the contested case portion
00:17:24
of the agenda. Chairman. Yes, ma'am. May I
00:17:27
interrupt for just a moment? Barksdale pointed out,
00:17:29
an important point, which is that, item 16
00:17:33
is also on the agenda. This is Docket
00:17:36
No. 56972. And for this item, OPDM is
00:17:40
requesting some additional time to bring this to
00:17:43
you at a future of a meeting in
00:17:44
February with your permission. Okay. Yeah. That's fine.
00:17:47
So even though it's not an item, it's
00:17:48
not to be taken up, we'll we won't
00:17:50
take it out. Alright. I'm fine with that.
00:17:51
Time as well. As well. Okay. Thank you,
Item 23 - Project No. 55999 – Reports of the Electric Reliability Council of Texas
00:17:54
Barksdale. Alright. That'll take us to Item
00:18:00
No. 23 on the agenda. That is Project
00:18:03
No. 55999, reports of the Electric Reliability Council
00:18:08
of Texas. I think we have an update
Item 23 - Chad Seely – ERCOT Sr. VP of Regulatory Policy - Update on work with CPS Energy, 55999
00:18:10
from ERCOT. Morning, Chad. Good morning Chairman, Commissioners.
00:18:21
Chad Seeley with ERCOT. I wanted to just
00:18:23
spend a few minutes to provide you all
00:18:25
an update on our continued work with CPS
00:18:27
Energy on the 3 resources. We will be
00:18:32
talking about this as an update at our
00:18:34
board meeting on Tuesday, but I know there's
00:18:36
also a a committee hearing going on at
00:18:38
the same time over the legislature, and some
00:18:40
people may have to leave and miss out
00:18:42
on that update. So where we are right
00:18:45
now is that we're continuing to work with
00:18:47
CPS on finalizing the unit 3 RMR agreement.
00:18:51
We have not executed that yet. 2 main
00:18:54
things have happened since the board made a
00:18:56
decision in December. The first is, the overall
00:19:01
cost for unit 3 has gone up. CPS
00:19:03
has revised the budget cost. Now that cost
00:19:07
has gone up another $8,000,000. They've also gone
00:19:10
up for units 1 and 2 as well, and we
00:19:14
did issue a a notice earlier this week
00:19:17
revising the budget cost. The so the overall
00:19:20
$11,000,000 for all three units has kinda contributed
00:19:22
to 3 buckets, which is the inspection cost
00:19:25
has gone up, the equipment cost has gone
00:19:28
up, and some compliance costs have gone up.
00:19:32
So it's a moving target on on the
00:19:34
budgets, but, overall, that the the increased cost
00:19:37
for unit 3 still shows a benefit relative
00:19:40
to the the value of loss load that
00:19:42
we would experience if we had to move
00:19:44
into rotating outages not having unit 3. So
00:19:48
I wanted to make sure that the commission
00:19:49
is is aware of the the budget cost
00:19:51
continues to go up for those 3 units
00:19:53
as we evaluate whether we even need units
00:19:55
1 and 2 in in light of our continued work
00:19:57
on the mobile gen solution. The other thing
00:20:00
that we're working on to finalize the RMR
00:20:02
agreement is some addendums really dealing with, how
00:20:06
the inspection process would work with, communications with
00:20:09
ERCOT and CPS, both, in the immediate inspection
00:20:13
that would start in March, but then any
00:20:15
other outage inspections that would be taken over
00:20:17
the 2 year period. And then there's emissions
00:20:20
related issues that we're working with,
00:20:23
CPS Energy and TCEQ as well, and that'll
00:20:26
be noted as part of the overall RMR
00:20:28
agreement. Of course, we plan to execute the
00:20:30
agreement, here in February so that CPS can
00:20:33
move forward with the outage inspection process in
00:20:36
March for unit 3. So that's unit 3.
00:20:40
For units 1 and 2, of course, the board deferred
00:20:44
its decision on that, and we're continuing to
00:20:47
work with CenterPoint, CPS Energy, and Lifecycle Power
00:20:51
on relocating the mobile generation units from Houston
00:20:55
to San Antonio. There's been a tremendous amount
00:20:57
of work with, CPS Energy and and life
00:21:00
cycle to fully understand kind of the all
00:21:03
in cost. Right now, the estimated all in
00:21:06
cost, which is really the life cycle cost
00:21:09
and the CPS Energy cost, is around 50
00:21:13
to $55,000,000. And and I wanna reiterate that
00:21:16
that's the incremental cost to provide a higher
00:21:20
level service that ERCOT needs for the availability
00:21:22
of those mobile gen solutions in the San
00:21:25
Antonio area versus what they may be offering
00:21:27
in the Houston area under the CenterPoint arrangement.
00:21:31
None of the cost associated with the CenterPoint
00:21:33
arrangement that currently is in effect with life
00:21:35
cycle would be shifted over under this arrangement.
00:21:39
So these truly are incremental cost for what
00:21:43
ERCOT needs to relocate the assets, have them
00:21:45
connected into the San Antonio area, and provide
00:21:48
the kinda ERCOT service level agreement for reliability,
00:21:51
which would be 247 capability remote start capability.
00:21:56
So that's that's the all in cost, which
00:21:58
does include CPS' cost to interconnect and provide
00:22:01
QSE services. We're obviously continuing to scrub those
00:22:04
numbers, and we'll have more information as we
00:22:08
move over the next couple weeks on comparing
00:22:11
that to units 1 and 2. Again, units
00:22:13
1 and 2 have gone up a a
00:22:15
little bit more as well as as CPS
00:22:16
fine tunes their budget costs. We are not
00:22:20
asking for a vote on Tuesday at the
00:22:22
board. This is just an update. We will
00:22:25
be seeking a special board meeting in late
00:22:27
February or early March, and that's when we'll
00:22:30
bring our full analysis on the comparative benefits
00:22:34
of units 1 and 2 versus the the
00:22:36
mobile gen solution. So that's what we're targeting
00:22:38
for a final decision by the board. Couple
00:22:41
other things that that I would highlight is
00:22:44
the, we did go out for an RFP
00:22:47
to see if anything could compete against units
00:22:49
1 and 2 in life cycle. We got a couple
00:22:51
of offers, but, ultimately, none of them met
00:22:54
the eligibility requirements or they were way more
00:22:57
costly than the current solutions that we're looking
00:22:59
at. And, again, we are also working with
00:23:02
the utilities for accelerating the transmission projects that
00:23:07
are supposed to come in in 29 and
00:23:09
whether those can come in earlier. That's the
00:23:11
South Texas project number 2. We'll have more
00:23:14
information on that in the coming weeks to
00:23:16
provide to the commission and board as the
00:23:19
overall exit solution. Oncor we enter in to
00:23:22
an RMR agreement, we're on the clock within
00:23:24
90 days to come back with an exit
00:23:26
solution. So we're targeting the the April board
00:23:29
for that discussion because, obviously, we will have
00:23:31
entered into the unit 3 RMR agreement here
00:23:34
in the next week or so. And so
00:23:36
that would put us on the clock to
00:23:37
come back and fully describe what the exit
00:23:39
solution is to get out of the unit
00:23:41
3 RMR agreement or, and or the alternative
00:23:45
solutions that we're looking at with units 12
00:23:47
and the mobile gen solution. And as far
00:23:50
as timing with the mobile gen solution, if
00:23:52
we're we believe that's the most cost effective
00:23:55
and ultimately reliable solution. We're still targeting to
00:23:58
have those units available in the early part
00:24:00
of the summer, and it may be a
00:24:03
staged approach to get them. But, ultimately, the
00:24:06
goal is to try to have those megawatts
00:24:08
available for the summer in addition to the
00:24:10
unit 3 megawatts that the board has already
00:24:12
set to move forward with. Happy to answer
00:24:15
any questions. Thank you, Chad, and and thank
00:24:18
you for all you've done to keep this
00:24:20
Commission apprised of of the work on this.
00:24:23
A lot of really good work. Concerning what
00:24:25
you said about unit 3, talked about the
00:24:29
costs changing. At this point, do we feel
00:24:32
like this is close to a final cost
00:24:35
for that unit, or can we anticipate these
00:24:38
costs to continue to change? These are estimated
00:24:42
budget costs. There's obviously a risk that it
00:24:44
can change. I mean, one of the the
00:24:46
big risk factors that we talked about with
00:24:47
the Commission and the board is, you know,
00:24:50
CPS has given us their best estimate on
00:24:52
what they think the state of that resource
00:24:53
is as they go into the outage inspection
00:24:56
period. But there is obviously a significant risk
00:25:00
of uncertainty once you get into the the
00:25:03
inspection starting in March that there could be
00:25:05
something that that wasn't identified early on, from
00:25:09
CPS' Intel working with their vendor that could
00:25:12
show up in the middle of that inspection,
00:25:14
and and, obviously, that could add a lot
00:25:15
of cost. As you go through the RMR
00:25:18
period, there could be other things that contribute
00:25:20
to that cost. So I would say this
00:25:22
is the best estimate that we have at
00:25:24
this point, recognizing because these are really old
00:25:27
units that there is substantial risk that the
00:25:30
cost can continue to increase. Okay. Commissioners, any
00:25:34
questions for Chad? None at this time. I'm
00:25:38
good. Thank you for your work on this.
Item 25 - Project No. 55718 – Reliability Plan for the Permian Basin under PURA §39.167
00:25:40
Thank you. Alright. Nothing else on 23. That
00:25:46
will take us to Item No. 25. That's
00:25:49
Project No. 55718, reliability plan for the
00:25:54
Permian Basin under PURA Section 39.167.
Item 25 - Kristi Hobbs – ERCOT VP of System Planning & Weatherization - Study & Cost Comparison filed document
00:25:59
Good morning. Alright. Good morning Commissioners. Kristi Hobbs
00:26:06
with ERCOT. Good morning, Commissioners. Prabhu Gnanam. Sorry.
00:26:10
Prabhu Gnanam. All right. So I understand what a
00:26:16
a pivotal and important decision this is for
00:26:19
the consumers of Texas, and so, hopefully, you'll
00:26:22
allow me a little bit of time today
00:26:24
to kinda walk through how we got to
00:26:27
doing the study that we performed, and then
00:26:29
I'd like to walk through the cost comparison
00:26:32
document that we filed with you last week
00:26:35
so that we make sure, we provide you
00:26:39
information as you start, your deliberations, and you
00:26:42
have the opportunity to ask us any questions,
00:26:45
that you're starting to see that we can
00:26:47
help with. As we think about the facts
00:26:55
of what we see on the system today,
00:26:58
we see increasing penetration of inverter based resources.
00:27:02
So solar, batteries, as well as wind. And
00:27:06
when I look out to the future, what
00:27:07
do I see in our generation interconnection queue?
00:27:10
About 83% of that is made up of
00:27:12
solar and batteries, so we have to keep
00:27:14
that in mind. What we are also observing
00:27:17
is as time goes by, we continue to
00:27:19
see generation retirements, and that the generation is
00:27:23
being developed farther away from the load centers.
00:27:27
Transmission is required to bring that power to
00:27:29
the consumers where they need it. We are
00:27:34
also seeing substantial load growth in the state.
00:27:38
It's coming from people moving to Texas, the
00:27:40
great economy we have, and a lot of
00:27:43
economic development. And so just because of those
00:27:46
facts alone, no matter which voltage plan you
00:27:50
consider going forward, I wanna set the stage
00:27:52
that it's gonna require an investment in the
00:27:54
future of Texas to build the transmission to
00:27:58
meet consumers' needs reliably. Now I wanna take
00:28:03
us a little bit further back in history.
00:28:06
We did a little bit of digging to
00:28:08
see when was the last time Texas considered
00:28:10
making a voltage step change. At least in
00:28:16
my lifetime, it's always been at the 345
00:28:19
system. You have to go back over 65
00:28:22
years to the early 19 sixties, when Texas
00:28:25
decided to make the step change from going
00:28:27
from 138 kv to 345. In 1961, 4
00:28:33
utilities came together, and they started planning a
00:28:35
series of 345 kv lines. In doing a
00:28:39
little bit of research about what the media
00:28:41
was reporting at the time, I found it
00:28:43
very interesting that a lot of the the
00:28:45
topics they were discussing are topics that we're
00:28:47
discussing today. They were talking about building a
00:28:51
power highway to meet the needs of the
00:28:52
consumers, having a superpower backbone, needing to build
00:28:58
the higher voltage transmission to benefit Texas consumers
00:29:03
and to make power available to meet the
00:29:05
growing needs of the state. And then it
00:29:08
was needed to boost security of the system.
00:29:14
As time has evolved, the system has continued
00:29:16
to grow. And if you think about our
00:29:18
historic planning rules and how we got here
00:29:20
today, prior to the last legislative session when
00:29:24
we looked at transmission planning, we took in
00:29:27
forecast from the transmission service providers, but we
00:29:29
only allowed them to add load for those
00:29:33
that they had signed interconnection agreements on. That
00:29:37
worked for many years because the system they
00:29:41
were adding to had a lot of capability.
00:29:44
We had a lot of excess margin. But
00:29:48
over time, if we've seen the state continue
00:29:51
to grow, economic boom, what we've seen over
00:29:54
time is that margin has continued to diminish.
00:29:58
We no longer have that headroom that we
00:30:00
enjoyed many years ago, and so that's why
00:30:03
we're at a pivotal point to decide, do
00:30:04
we wanna continue building the system the way
00:30:06
we always did, or do we wanna consider
00:30:08
a higher voltage that'll set us up for
00:30:10
the future? Back in December of 2023, the
00:30:16
PUC directed us to begin a Permian Basin
00:30:18
study. As we started that study, we also
00:30:24
began seeing increased load growth across the system.
00:30:28
When we filed the Permian Basin Plan with
00:30:30
you in July of 2024, we saw incredible
00:30:33
load growth in the Permian region alone. And
00:30:35
just for comparison, just as a reminder, we
00:30:37
saw a 43% increase in the needs for
00:30:40
energy in the Permian Basin. Their load was
00:30:44
becoming comparable to what we see in the
00:30:46
DFW area, what we see in the Houston
00:30:48
Galveston area. The difference is is there is
00:30:51
not a lot of conventional generation to meet
00:30:54
those needs, which required substantial transmission investment to
00:30:58
move power across the state to be able
00:30:59
to serve the customers in the Permian. At
00:31:03
that same time, we also saw incredible load
00:31:06
growth in the other load centers, the Dallas
00:31:09
Fort Worth area, the Corpus area, and through
00:31:12
the Central Texas corridor. That's what led us
00:31:16
to start looking of how do we best
00:31:18
meet those needs, not only for now, but
00:31:20
for the future. And so when you approve
00:31:24
that plan, you approve several options for looking
00:31:27
at the import pass. And we finished in
00:31:31
late last year. We did our annual regional
00:31:34
transmission plan where we look out 6 years
00:31:36
in the future, and we provided you not
00:31:38
1, but 2. So I think now is
00:31:40
a good time to take a pause and
00:31:42
really thank my team that's probably listening in
00:31:45
for all the extra hours, the overtime, working
00:31:48
on the weekends, working on the holidays so
00:31:51
that we could provide you with the information
00:31:53
you need for consideration. Once those plans were
00:31:58
filed, we also began doing additional analysis comparing
00:32:01
the 2 plans, which led to us last,
00:32:04
week filing with you a comparison document that
00:32:07
looked at the analysis. And we tried to
00:32:10
present it in a way so that you
00:32:12
could see the options side by side. So
00:32:16
we'll walk through the different analysis that we
00:32:18
did, share with you some of those results.
00:32:23
We'll compare that for the 345 plan and
00:32:25
what we're calling the Texas 765 step, strategic
00:32:29
transmission expansion plan. The first topic that's easy
00:32:34
to really take a look at is how
00:32:37
many miles of transmission are needed, new right
00:32:40
of way miles. We also looked at what's
00:32:45
the impact to the existing system. Because to
00:32:48
meet that demand for either system voltage, you're
00:32:51
gonna have to have an additional lot of
00:32:53
upgrades to the current system to be able
00:32:55
to support it. Because, again, as you saw,
00:32:58
we began the 345 network in the sixties.
00:33:01
There are some facilities, again, being built over
00:33:05
time that need upgrades or improvements to them.
00:33:09
While the 345 plan had about 400 fewer
00:33:12
new right of way miles compared to the
00:33:14
765 step, What we found, very eye opening
00:33:21
was the number of upgrade miles that were
00:33:23
needed for the 345 plan. So if you're
00:33:27
gonna continue at 345 backbone, there's a lot
00:33:30
of upgrades that you need to the lines
00:33:32
that are in place today. And why do
00:33:34
I highlight that for you? Our operations outage
00:33:38
coordination teams work daily with transmission service providers,
00:33:42
trying to find ways that they can take
00:33:44
outages on the system so that transmission service
00:33:47
providers can upgrade lines that or do maintenance,
00:33:50
or cut in new lines, or add generation
00:33:52
of the system. And it's become increasingly difficult
00:33:56
to find those opportunities to be able to
00:33:58
do that work on the system. We're also
00:34:01
finding they've had to relook at how they
00:34:03
do that work. Often, they have to do
00:34:05
it, what we call, live or hot, because
00:34:08
we can't afford to have that line taken
00:34:09
out of the system and be able to
00:34:11
meet the needs of consumers of Texas, Because,
00:34:13
again, we've maxed out the capability of the
00:34:15
current system we have. That also translates into
00:34:19
more cost. So we made some estimates based
00:34:23
off of what we've seen in recent projects
00:34:25
where work has had to be done live.
00:34:28
We've estimated that about 50%, which that could
00:34:33
be low, of the upgrade miles would need
00:34:35
to be done with hot work, and that
00:34:38
it would be an increased cost. So overall
00:34:43
cost, we did estimate between the two plans
00:34:46
for and I guess, also, I should have
00:34:49
set the stage as a start of the
00:34:50
comparison. When we are looking at the comparison,
00:34:53
it's for the entire state. It includes the
00:34:55
Permian Basin within it. So Permian Basin wouldn't
00:34:59
be incremental cost above what we're talking about
00:35:02
today. It's included in our analysis, and we
00:35:05
used what you approved, late last year for
00:35:07
that. New construction costs we estimated were about
00:35:14
31,000,000,000 for the 345 plan and almost 33,000,000,000
00:35:20
for the 765 plan. So that's about a
00:35:23
$2,000,000,000 difference between the plan. We use cost
00:35:27
estimates for the 765. We base those off
00:35:32
of publicly available estimates from MISO that were
00:35:37
available last year in their planning studies. For
00:35:41
the 345 system changes, we based those off
00:35:44
of estimates we had received and used an
00:35:46
average from the Permian Basin cost estimates that
00:35:49
we did. When we took into account the
00:35:52
live hot reconductoring work, it really it narrowed
00:35:54
that gap to just over $1,000,000,000 between the
00:35:57
two plans. I realize a $1,000,000,000 sounds like
00:36:03
a lot here, and I understand, that concern.
00:36:07
But what I'd like you to think about
00:36:08
now is as we shift into the economic
00:36:10
analysis we did. That's an investment in today
00:36:14
for the future needs of the state. And
00:36:18
the 765 plan provides a lot of benefits
00:36:21
going forward that would more than pay for
00:36:24
those cost differences upfront. I would also highlight
00:36:29
that I recognize the shock and awe of
00:36:31
the $30,000,000,000 cost tag. As we've done historically,
00:36:36
our regional transmission plans looking out 6 years,
00:36:39
we've never put a price tag on those
00:36:41
plans. Those have been road maps, and then
00:36:43
the transmission service providers come forward with projects
00:36:48
as reliability need dictates, and those go through
00:36:51
the process for approval. When I look back
00:36:54
over the last 3 years, as the transmission
00:36:57
service providers have come in and proposed plans
00:37:00
that move through the planning process and were
00:37:02
endorsed by the board to move forward, the
00:37:04
average investment each year required based off those
00:37:08
endorsements was over $3,000,000,000 a year. And in
00:37:11
fact, last year, in 2024, the ERCOT board
00:37:14
endorsed almost $4,000,000,000 worth of projects. So when
00:37:19
you take that $30,000,000,000 and you consider that's
00:37:22
gonna be investments over the next 5 to
00:37:24
6 years to build the infrastructure, I don't
00:37:26
think we're that far off from what we've
00:37:28
been doing in the recent years, but it
00:37:31
gives us an opportunity at this juncture to
00:37:36
make a decision for the investment in the
00:37:38
future and the future benefits it could bring.
00:37:41
For example, in our economic analysis, and we
00:37:44
did 2 economic analysis tests. This was also
00:37:47
something that came out of previous sessions that
00:37:49
gave us additional economic tools, to be able
00:37:53
to look at the need for projects. When
00:37:55
we look at consumer energy cost savings, so
00:37:58
that's thinking about what does the load the
00:38:00
consumer pay? And it measures that change in
00:38:04
what the consumers pay for energy due to
00:38:07
transmission that's added to the system. And what
00:38:10
we found is the 765 step plan provides
00:38:13
on an annual basis, so that's year after
00:38:15
year going forward, we estimated $229,000,000 worth of
00:38:19
energy cost savings. When we looked at the
00:38:23
production cost savings test, which is another economic
00:38:26
test that looks in the change in the
00:38:28
cost to produce energy due to transmission adds
00:38:31
on the system and how, generation may be
00:38:34
re dispatched, we saw $28,000,000 more annual production
00:38:38
cost savings per year. Now as you go
00:38:42
even more technical and you look at the
00:38:43
higher voltage lines and how they're more efficient
00:38:46
in transmitting energy across the state, especially over
00:38:49
long distances, we looked at what are the
00:38:53
line loss reductions and what are the savings
00:38:56
between the two plans. The 765 plan showed
00:39:00
about a 5% improvement, so less line losses
00:39:05
means more energy making it from the generator
00:39:09
to the consumer. And we estimated that at
00:39:11
about 560 gigawatts of energy per year or
00:39:16
less energy loss per year. That's equivalent to
00:39:20
having a new 128 megawatt dispatchable generation resource
00:39:26
put on the system. And when you equate
00:39:29
that 560 gigawatts on an annual basis, we
00:39:33
used an average real time price that we
00:39:35
saw across 2024 for the ERCOT system. Potential
00:39:40
savings is $16,200,000 annually just by making the
00:39:44
step change. We also saw improvements in transfer
00:39:48
capability from the load center. So that's as
00:39:50
you're moving power across long distances. And we
00:39:52
saw from different scenarios anywhere from 300 or
00:39:56
excuse me, 600 to 3000 megawatts of increased
00:39:59
capacity. Again, moving more power from the generation
00:40:03
to the load where it's needed. As you
00:40:06
get even more technical, system stability improvement, system
00:40:10
strength, we saw those across the board. And,
00:40:13
specifically, we did a focus study looking at
00:40:15
the West Texas area where we've had to
00:40:19
make improvements and focus on, increasing the stability
00:40:22
in those regions just based off of the
00:40:24
dynamics of the system. We saw a 13%
00:40:26
improvement with the 765 plan. We also recognize
00:40:37
that there's been a lot of discussion about
00:40:40
what if the load doesn't materialize. You took
00:40:43
in a load forecast. You made a study
00:40:46
at that. What if that load doesn't materialize?
00:40:50
So the team did a sensitivity study. And
00:40:53
last year, we took in our load forecast
00:40:57
that we received from the transmission service providers
00:40:59
with our base load increases that we saw
00:41:01
in the system, the transmission service providers had,
00:41:06
and the officer letters that they attested to
00:41:08
that they believe this load was coming to
00:41:11
the system was a 150 gigawatts. So we
00:41:14
did a study. We assumed half of the
00:41:17
officer letters actually materialized. So that meant we
00:41:22
did a study of about a 130 gigawatts.
00:41:24
Why did we do half? Well, from discussions
00:41:27
with the TSPs, they provided those back early
00:41:30
last year. They've continued to have discussions with
00:41:33
consumers. They've got examples of where those officer
00:41:37
letters have converted to materialized load, so we
00:41:41
didn't think it was fair to back out
00:41:43
all of that officer letter load. And what
00:41:46
we saw is that the 765 is still
00:41:48
the optimal plan for meeting the needs of
00:41:50
the consumers of Texas, providing them not only
00:41:53
benefits today, but benefits in the future. I
00:42:00
know there's also, been some concern about 765.
00:42:04
It's a new technology. Well, it's not a
00:42:06
new technology. It would just be new to
00:42:08
Texas. And in fact, it's being used, in
00:42:12
many other states across the US as well
00:42:15
as in other countries, and it's been in
00:42:17
place for since the sixties. I would also
00:42:21
note, the SPP approved last year, 765 plan
00:42:26
that would move power from New Mexico into
00:42:28
the non ERCOT areas of the Panhandle. So
00:42:32
folks are looking at that and moving that
00:42:34
forward. As we so I kinda close out
00:42:42
here, I wanna make sure we have time
00:42:45
for for any of the questions you all
00:42:47
may have. The thing that I would like
00:42:49
to reinforce is the teams really try to
00:42:52
do the due diligence to look at what
00:42:54
are the reliability needs. And because we have
00:42:57
maximized the use of the current system, we
00:43:01
can either continue building transmission as we have,
00:43:06
and it's almost like playing a game of
00:43:08
of catch up with the load because the
00:43:10
load is moving to the system faster, or
00:43:14
we can make this decision for now and
00:43:17
for the benefits of the future. There are
00:43:20
questions that we can answer. Thank you, Kristi.
00:43:25
So you talked about your modeling the lower
00:43:28
limit of a 130 gigs. Does ERCOT believe
00:43:33
if you had modeled, say, in a lower
00:43:35
number, say, a 100, 110, 120, that the
00:43:39
benefits you found from 765 kV would be
00:43:43
appreciably diminished at those levels? Or do you
00:43:47
all believe you'd see the same benefits even
00:43:49
at those lower load numbers? So I we
00:43:56
chose that number, but as we were doing
00:43:58
studies, once you get over a certain point
00:44:01
in the system with the load increases, as
00:44:04
I stated, you have to add so many
00:44:06
more upgrades to the current system. You start
00:44:09
to lose the the benefits of just doing
00:44:14
the the normal upgrades as you've seen before.
00:44:16
It becomes more costly, and so I do
00:44:19
believe that, at a certain point, which would
00:44:24
probably be somewhere over a 100 gigawatts 100
00:44:28
and 10. 110, that we would still see
00:44:33
the same benefits from the plan. Okay. Commissioners,
00:44:38
questions for Christie or Pablo? I have a
00:44:42
few. Yes. Just to kinda start with, unfortunately,
00:44:48
we we all expect the load to come.
00:44:51
We all are wanting and hoping new generation
00:44:54
is going to build. We don't know where
00:44:55
that's gonna be. Right? Which of the systems,
00:44:59
either the 345 or the 765, which one
00:45:03
will give us the most flexibility without having
00:45:05
that crystal ball of knowing where items are
00:45:07
going to locate? Absolutely. So the 765 plan
00:45:10
definitely gives you more of that flexibility if
00:45:13
you do not know exactly where those loads
00:45:14
are gonna locate, where the generation is gonna
00:45:17
locate. If you think about, again, generation or
00:45:21
transmission's point is to move power from where
00:45:24
the generation of the load is. So I
00:45:27
like to think about 765 as the superhighway.
00:45:30
It's transmitting that power from generation areas to
00:45:34
the load centers. Then as the load would
00:45:37
materialize, then being connected at the lower voltage
00:45:41
system, then you can more surgically build out
00:45:43
to exactly where those loads or generators are
00:45:47
located. But this allows the 765 backbone allows
00:45:51
you to efficiently move power no matter where
00:45:55
the load or generation ends up locating because
00:45:58
you've built that highway. Okay. I and this
00:46:05
some of these might be more TSP related.
00:46:06
So if that's the case, obviously, please say.
00:46:10
And, mister chairman, that might I don't know
00:46:12
if that's something we can have as an
00:46:14
option in one of the meetings is to
00:46:15
have TSPs available to ask questions of them
00:46:18
about, you know, supply chain issues. I don't
00:46:21
know if you can address those. I know
00:46:22
that's a concern for many people as regards
00:46:24
to do we have what's needed for 765
00:46:28
versus 345? Are they both the same issues
00:46:31
as far as supply? Do we know the
00:46:33
TSPs what they would be expecting? So I
00:46:36
can tell you what we've heard anecdotally from
00:46:38
both discussions with, vendors as well as transmission
00:46:43
service providers. The vendors are definitely ramping up
00:46:47
production because 765 has been proposed in both
00:46:51
the Southwest Power Pool and in MISO. So
00:46:54
one could say it's gonna be a transmission
00:46:56
race, between the regions. That's one good benefit
00:47:00
of Texas. If we make a decision now,
00:47:02
we can be ahead of that race. I've
00:47:05
also been told by several transmission service providers,
00:47:09
and I don't think they would mind me
00:47:10
generalizing here, is that as they're planning for
00:47:12
the Permian, they're preparing for either 345 or
00:47:16
765, and so they have begun those processes
00:47:20
so that they're ready to go when a
00:47:21
decision's made so that they're not to hold
00:47:23
up on moving forward for getting the transmission
00:47:27
built for the consumers in the Permian. And
00:47:29
at this point, I have not heard that
00:47:31
they've had any issues, with the supply chain
00:47:35
procurements. Okay. Yeah. And Commissioner, I'd say that
00:47:38
tracks with what I've been told. A a
00:47:40
number of companies have told me that you're
00:47:44
what they're really doing is getting in the
00:47:46
queue in line. And then once they need
00:47:49
their equipment, they can kinda decide which voltage
00:47:52
they need. I'm not opposed to hearing from
00:47:55
from TSPs. I would say, you know, if
00:47:58
if anyone is hearing something they disagree with,
00:48:01
maybe reach out to staff. And as we
00:48:02
go through this process, we can we can
00:48:05
line that up to hear from them if
00:48:06
there's if their experience is different than than
00:48:08
what we've heard. Okay. That's helpful. And I
00:48:11
guess what I'm hearing too on the supply
00:48:13
chain issues is, I think part of that
00:48:15
concern is something that might impact the overall
00:48:18
supply chain, that it would those type of
00:48:21
instances would be applicable to either 765 or
00:48:25
345, which I think is, you know, something
00:48:29
that kind of when people, I think, typically
00:48:31
think about supply chain issues, they think of
00:48:33
a of some sort of major interruption. And
00:48:36
so, again, what I'm hearing is that it
00:48:37
would be equally impacted one versus the other.
Item 25 - Barksdale English – PUC Deputy Executive Director - Stakeholders Workshop, 55718
00:48:41
Mr. Chairman, I just wanna note for this
00:48:44
part of the conversation that and I don't
00:48:46
wanna steal Harika's thunder, but, staff is preparing
00:48:49
to hold a a workshop to, with stakeholders
00:48:53
to continue to discuss this, and supply chain
00:48:55
will certainly be part of that discussion. And
00:49:01
then just maybe a few more questions to
00:49:02
follow-up. But I know you used MISO a
00:49:04
great deal on the cost comparison. Is that
00:49:11
enough applicable? Do we need to think about
00:49:12
it being different? Is that, you know, the
00:49:15
correct data? And then also, as far as
00:49:18
what MISO did prep work for going forward
00:49:21
with 765, are there lessons to learn from
00:49:24
that? Do we need to follow some of
00:49:26
those procedures that we have not done yet?
00:49:28
Can you tell us more, or have you
00:49:29
looked into any of those? Alright. So let's
00:49:32
let's take the cost one first. So we
00:49:35
we chose to use the generic ones, so
00:49:36
that way we'd be consistent with what we
00:49:38
had done with the Permian Basin and the
00:49:40
and the effort of getting timely information to
00:49:43
you all to begin considering. What we did
00:49:47
here, we hosted a workshop, it seems like
00:49:50
last month, but it was only on Monday
00:49:52
of this week, where we worked with stakeholders
00:49:55
to share with them, the the comparison and
00:49:58
go through the technical analysis. And some of
00:50:01
the feedback that we got during those discussions
00:50:03
is that, first for some areas, those cost
00:50:07
estimates that we utilized, TSPs believe maybe they
00:50:10
could be done cheaper. So I think we've
00:50:14
taken in some of the numbers they provided
00:50:16
us, and I think at a high level,
00:50:17
what I can tell you is if I
00:50:18
utilized, the numbers that one TSP provided me,
00:50:22
it would actually show that the 765 plan
00:50:25
is cheaper. So I think we're within the
00:50:27
margin of the error of the numbers that
00:50:30
we're using. I also know, I recall when
00:50:34
commissioner Glotfelty was still here, he challenged us
00:50:38
on the Permian plan because we had a
00:50:40
20% adder that we added to the the
00:50:43
lines, the mileage for the import pass. And
00:50:47
the reason why is is if you look
00:50:48
at our map, you see those as a
00:50:49
straight line. And we know transmission lines aren't
00:50:54
always built in a straight line, so we
00:50:56
we have some contingency in for that build
00:50:59
as well. And then as far as is
00:51:03
that the trying to think of outside the
00:51:07
box, like, or learning from what MISO did
00:51:09
as well? Or Absolutely. I know we we
00:51:12
had held a workshop earlier Oncor late last
00:51:16
year as we were working through trying to
00:51:18
gather more information. There's always gonna be lessons
00:51:22
learned. As you know, AEP is a builder
00:51:26
of 765 in other regions of the US,
00:51:29
and I know they have been working with
00:51:31
the transmission service provider community here to share
00:51:34
the standards that they use. If we can
00:51:38
agree upon a set of standards, which I
00:51:40
think they're working towards as a community, that'll
00:51:43
really help with how the system gets built
00:51:46
out. I mean, we have a great opportunity
00:51:48
here because we're going to that higher voltage
00:51:52
to set standards for how the utilities build
00:51:55
those so that they can have, spare parts
00:52:00
that could be interchangeable that they could share
00:52:02
with each other if they needed to do,
00:52:05
some emergency repair work to align. So I
00:52:08
think those are things that we'll wanna do,
00:52:12
to keep this moving forward and to make
00:52:13
it the the best efficiency as possible. Okay.
00:52:17
And then just one kind of final thing
00:52:19
you made me think of of obviously, crez
00:52:23
is still something many people think about, and
00:52:26
that cost got kind of it grew as
00:52:29
the project went on. How does that not
00:52:32
become what we are here, and how is
00:52:33
it different as far as that was building
00:52:36
renewable side, and this is a statewide plan.
00:52:40
Right. So I'm glad you brought that up.
00:52:42
A lot of times, when folks talk about
00:52:45
CREZ, they they may have a negative image
00:52:48
in their their brain about how it may
00:52:50
have impacted the end use customer's bill, and
00:52:53
it's a great opportunity to share why this
00:52:56
is different. So CREZ was built out as
00:52:58
an opportunity to move generation across the state.
00:53:04
We didn't see increased load growth at that
00:53:07
same time. It was just our traditional load
00:53:09
growth. So if you think about how, those
00:53:12
costs get translated into the consumer's cost, how
00:53:16
they get spread out over time, you are
00:53:20
spreading those out, those costs over the same
00:53:22
amount of users. The reason we're looking at
00:53:25
making this change today is because the system
00:53:27
is increasing. There's gonna be more customers on
00:53:30
the system. There's gonna be large users of
00:53:33
energy on the system, so there's gonna be
00:53:36
more businesses, more consumers to spread that money
00:53:40
or excuse me, spread those costs across, so
00:53:43
you shouldn't see that same type of impact
00:53:45
to the consumers' bill. So, one of the
00:53:52
things that's that's kind of come up with
00:53:54
the 765 and and related specifically, I think,
00:53:57
to the Permian and to the Permian endpoints
00:54:00
is the importance of getting it to the
00:54:03
Permian Basin. And, also I guess with, other
00:54:07
large loads that have announced. Can you kind
00:54:11
of speak to what you see as different
00:54:13
opportunities with the 765 and the 345 in
00:54:17
that particular scenario Absolutely. Where, again, we're trying
00:54:20
to get that that power to the Permian.
00:54:23
Sure. So I wanna take that in 2
00:54:25
parts. I wanna talk about getting the power
00:54:27
there, and then I wanna talk about the
00:54:28
schedule. So if you think about a 765
00:54:33
line, I like to use the analogy. It's
00:54:34
like a again, just like they use in
00:54:36
the sixties. It's a superhighway. It would have
00:54:40
limited on and off ramps. Think about driving
00:54:42
down the toll road. There's limited on and
00:54:44
off ramps as you move down the highway.
00:54:49
That's the 765 system. If you use a
00:54:53
345 system, there are multiple opportunities for new
00:54:58
load, especially large loads, to come in and
00:55:00
interconnect to those. So it's more like building
00:55:04
a county road to move power from one
00:55:07
region of the state and think about how
00:55:09
many on and off ramps could be how
00:55:11
many driveways could be built to that county
00:55:13
road. So as we see more and more
00:55:16
load materialize in the west region, there's an
00:55:20
opportunity for diminishing the power transfer out to
00:55:25
the far west. So that's why the 765
00:55:27
solution provides more assurance for moving that power
00:55:31
to the Permian region. And it's basically because
00:55:33
the 345 capable load is able to access
00:55:37
that power more quickly than having it kind
00:55:40
of move all the way through the 765.
00:55:43
Correct. The other thing that I think, I
00:55:47
know we have been con or we've heard
00:55:50
concerns about from those oil and gas customers
00:55:53
is schedule timing, making sure that going to
00:55:57
the 765 doesn't slow down them getting the
00:56:01
power that they need. And I think we
00:56:04
would need probably some more information from the
00:56:06
transmission service providers that maybe have some metrics
00:56:09
on how they built. But I think to
00:56:12
highlight for you, if we we go back
00:56:14
to that Permian plan, what would we recommend?
00:56:17
We recommended 3765 import pass that required 1255
00:56:23
miles of new right of way. The 345
00:56:27
plan required 5 345 import pass into the
00:56:30
Permian. 1653 miles of transmission to be built.
00:56:36
So just from that statistic alone, more miles
00:56:39
will need to be built, more miles will
00:56:41
need to go through the CCN process, more
00:56:44
miles of right of way will need to
00:56:46
be purchased. And so that could have an
00:56:48
impact on the schedule, because you're just dealing
00:56:51
with more miles of buildout. So to your
00:56:56
point, the in this particular case, in the
00:56:58
scenario that you gave, the 765, you feel
00:57:01
like from a schedule standpoint might be something
00:57:05
that could be built out quicker. That's potential.
00:57:08
But I'd wanna get some, you know, statistics
00:57:10
from the transmission service providers. But when I
00:57:12
look at it from a pure mileage perspective
00:57:14
and the work that's gonna be needed for
00:57:16
either plan, you definitely have less miles of
00:57:19
new build to deal with on the the
00:57:21
higher voltage. So I guess that could be
00:57:23
one of the questions that we pose to
00:57:26
the DSPs. Which brings in, another, just one
00:57:31
other nugget of information. I know, people probably
00:57:35
have an image. They think 765, twice as
00:57:38
big. That means the towers are gonna be
00:57:40
twice as big. The statistics, the the structure,
00:57:45
information that's available shows that a 765 tower
00:57:49
is actually shorter than a 345 double circuit
00:57:53
tower. So you're not in setting expectations. Just
00:57:58
because it's double the voltage doesn't mean it's
00:58:00
gonna be double the size and structure. And
00:58:03
the configurations are somewhat different. I I guess
00:58:06
I saw a picture of 1 in Ohio,
00:58:09
and it's actually more of an arc than
00:58:11
it is a tower. So I think what
00:58:16
was really interesting that you you covered was,
00:58:20
you know, in in kind of this assessment,
00:58:23
you laid out not only the cost side,
00:58:26
but the benefit side. Because again, in terms
00:58:29
of determining and thinking about what's the best
00:58:33
path forward for project analysis, you wanna make
00:58:37
sure that you you feel pretty comfortable about
00:58:39
the cost, but at the same time that
00:58:42
you, are are truly, you know, have a
00:58:46
good handle on what the benefits are. So
00:58:50
one of the things that kind of occurred
00:58:51
to me is that we do have other
00:58:53
places in the country where they have built
00:58:55
out 765. And so there might be some
00:58:58
opportunities for us to reach out to them
00:59:01
and actually kind of ground truth what some
00:59:04
of those benefits might be. A particularly, you
00:59:09
know, resiliency of the system, against some sort
00:59:13
of disruption. So someone that maybe has been
00:59:15
through an extreme weather event, what is the
00:59:19
resiliency that they have experienced, and and maybe
00:59:22
share that with us so that obviously we've
00:59:24
done a lot of modeling, we've done a
00:59:26
lot of evaluation based on, the information that
00:59:30
we have. But if we could get some
00:59:32
of that actual data from some of the
00:59:34
folks who've actually, you know, built and operated
00:59:37
the 765, that would, you know, give us
00:59:40
more confidence and and also maybe, you know,
00:59:42
identify potentially some of the benefits or the
00:59:44
magnitudes of the benefits that, that that we
00:59:48
just didn't have the data or ability to
00:59:51
do that. So I do know, and we
00:59:53
can point you to, there's several, comparison documents
00:59:57
that are available publicly. That does have
01:00:00
some of that information. So as I mentioned,
01:00:02
both SPP and MISO in 2024 move forward
01:00:06
with recommending plans for 765 build out. And
01:00:10
so there's a lot of good information, that
01:00:13
provides those cost benefit ratios, that you're discussing.
01:00:17
So we can definitely share that with you.
01:00:19
And I think, you know, one of the
01:00:20
good points that you made was, you know,
01:00:21
referencing the existing 345 system. And, you know,
01:00:26
that I mean, maybe it's something we don't
01:00:28
necessarily talk about, but it it makes it
01:00:31
makes good sense that if you're thinking about
01:00:33
aging infrastructure in a system that's been around
01:00:36
since the sixties, then a large portion of
01:00:39
it would have to be upgraded to continue
01:00:42
to kind of accommodate that 345 system, particularly
01:00:45
if you if that's your decision moving forward.
01:00:48
So that's a definite benefit in, considering the
01:00:52
765 is. So I appreciate y'all looking at
01:00:56
that and including that as well. And I
01:01:00
guess maybe the last comment is, you know,
01:01:02
when we talk 765 versus 345. I mean,
01:01:05
765 is actually 765 plus 345, right? That's
01:01:10
correct. And so, it's it's like we're gonna
01:01:13
have almost theoretically or potentially, the benefits of
01:01:18
of both. And so we just wanna make
01:01:20
sure as we go through and we do
01:01:21
our evaluation that, you know, we've got a
01:01:24
sharp pencil on the cost. You know, we're,
01:01:27
we're looking and and evaluating and, the benefits
01:01:31
associated with it. Taking those together as we
01:01:34
make this analysis and, asking all the questions
01:01:38
that we can, getting all the data and
01:01:39
the information that, as Courtney mentioned, that we
01:01:42
can reach out and get. And, and looking
01:01:45
at that so that, you know, we've we're
01:01:48
we're really making a a good forward thinking
01:01:50
decision, I think, for for Texas. So really
01:01:52
appreciate all the work that you did and
01:01:54
your team. And I think you thank them
01:01:56
earlier for their time and their hard work
01:01:59
and, you know, working on holidays and weekends.
01:02:02
But, I think, you know, I kinda sense
01:02:05
in your in your testimony and kind of
01:02:07
in your passion how important this is for
01:02:09
the state. So we spend a lot of
01:02:11
time talking about generation, and, I think it's
01:02:14
really good that we've we've we're taking and
01:02:17
we're thoughtfully thinking about something that is equally
01:02:20
equally important because the 2, you know, to
01:02:22
be successful, the 2 have to be addressed
01:02:24
and and and work together. So thank you
01:02:27
for this, and thanks for answering the questions.
01:02:31
Christie, one of the one of the questions
01:02:33
I hear a lot pertaining to this is
01:02:36
why do we have to build the whole
01:02:38
loop, the whole backbone? Why can't we just
01:02:40
put 765 in certain areas where we think
01:02:43
it would be acutely beneficial? So can you
01:02:45
talk to kind of the benefits and and
01:02:48
why it it makes sense to build out
01:02:50
an entire backbone as opposed to just kinda
01:02:52
piecemealing 765 in certain areas of the state?
01:02:56
Absolutely. So what we did is when we
01:02:58
did our studies, we looked at where the
01:03:00
needs are in the system. And so if
01:03:03
you take a look, the endpoints are located
01:03:06
strategically where we're getting close to the load
01:03:09
center, so where the power is needed. And
01:03:11
what we provided you is what our optimal
01:03:14
solution is for what we know now about
01:03:16
the generation, what we know about the load,
01:03:19
and giving you that flexibility for that future
01:03:21
generation and load that may may come. You
01:03:25
could build out just pieces of it, but
01:03:27
it wouldn't be the optimal solution. What you
01:03:29
lose from that is, as as you've networked
01:03:33
the system, the way we've set out the
01:03:35
core plan so it's networked in how it
01:03:38
better transfers the power across the state into
01:03:41
the different load centers. So you could move
01:03:43
forward with just portions of it, but your
01:03:46
goal should be to move forward to that
01:03:48
network core plan that gives you the optimal
01:03:51
solution and brings you, for almost the same
01:03:54
cost, all the additional benefits, that we've outlined.
01:03:59
I think it's probably likely if we endeavor
01:04:03
to start this, we're gonna end up building
01:04:05
it out, and future costs are gonna exceed
01:04:07
what costs are today. So if we can
01:04:10
maximize the benefit today of this plan, it's
01:04:13
probably less expensive to do it now than
01:04:15
wait to do it in the future. Absolutely.
01:04:18
So, I don't know how y'all get to
01:04:21
work, but when I come here, I have
01:04:23
to drive down I 35. Can you imagine
01:04:27
trying to put I 35 in after everything
01:04:30
had shown up? We've got people that are
01:04:32
moving the state. We've got businesses to moving
01:04:34
the state. So not only the cost, but
01:04:37
being able to find, land to be able
01:04:41
to move that power. It's like doing a
01:04:43
master planned community. We have an opportunity to
01:04:45
build out the roadways of that master planned
01:04:49
community. You wouldn't put all the houses there
01:04:51
and then put the roads in, So that's
01:04:54
another reason that we're giving you the strategic
01:04:56
option to to expand the plan now. Okay.
01:05:01
Any other questions for ERCOT? So you're talking
01:05:03
about building it with today's dollars, which I
01:05:05
think is an excellent point. And, you know,
01:05:09
the question was, you know, do we build
01:05:12
out, you know, a portion of it or
01:05:14
build out the whole thing? What about, you
01:05:17
know, do we do it now? I mean,
01:05:20
what is what's the advantage of of doing
01:05:22
it now versus it's a good idea, but
01:05:26
we sit back and we we wait a
01:05:27
little bit? The reason to do it now
01:05:30
is you look at the current capability of
01:05:35
the system, how we've maxed out all of
01:05:37
that headroom, how it's becoming increasingly difficult to
01:05:41
take outages on the system to do work
01:05:43
because we need those lines intact to move
01:05:45
power across the system to meet the needs
01:05:48
of Texas consumers. That causes congestion cost. So
01:05:52
today's consumers, every time we try to take
01:05:54
an outage, it's increasing potentially congestion cost to
01:05:57
those consumers. Those problems are only gonna continue
01:06:02
as you see more and more load moving
01:06:04
to the state, as you see generation being
01:06:07
built farther and farther away from the load
01:06:08
centers. So with the load growth that we
01:06:13
see, I think now, now is the time.
01:06:18
Yeah. (item:25:Prabhu Gnanam – ERCOT Grid Planning Director - Building transmission for system demand, 55178)So if I, if I may add
01:06:20
something. So I I think the other part
01:06:22
other thing to consider is also, you know,
01:06:25
if we wait longer, you need to still
01:06:27
build the transmission at 345 keep building 345,
01:06:31
and when you make the switch in the
01:06:32
later time, it'll be it'll be more expensive
01:06:34
to do that switch. Right? So you need
01:06:37
to meet the system demand still. You get
01:06:39
the plan, either as, you know, robust 765
01:06:42
or a better plan. So there is an
01:06:44
added cost if you wait longer. So build
01:06:49
it with today's dollars and also start reaping
01:06:53
the benefits of the system now. And then
01:06:55
to your point, if we wait, there's actually
01:06:57
gonna be an added cost later. So go
01:06:59
back to that comparison document. It's cost today,
01:07:03
investment for future for capability today, but also
01:07:08
future capability. We talked about the increased transfer
01:07:12
capability. So, you build a 345 line now,
01:07:15
it's just meeting current needs. But if we're
01:07:19
building that bigger highway, it's just like the
01:07:22
toll road. They built it 2 lanes. Would
01:07:24
have been great if they would have built
01:07:26
it at 3 when they started so that
01:07:28
we didn't have to sit in traffic and
01:07:29
wait for them to build the 3rd lane.
01:07:32
We have that opportunity to build the superhighway
Item 25 - Harika Basaran – Commission Staff - Update on ERCOT analysis, 55178
01:07:35
now. Good morning, Harika. Good morning. Can you
01:07:41
hear me? Harika Basaran for Commission Staff. So
01:07:46
as soon as ERCOT shared us with the
01:07:48
draft comparison, we started working ERCOT analysis and
01:07:51
infrastructure. We already compiled some questions, so I'm
01:07:55
just gonna talk about our process. So we
01:07:58
are planning, based on our draft questions and
01:08:01
the discussion you had today, post these questions
01:08:04
this afternoon, late afternoon. It's gonna be a
01:08:07
short turnaround. It's gonna be I'm gonna give
01:08:10
them maybe until, February 14 for the answers.
01:08:14
And then based on those answers, we are
01:08:17
gonna, hold a workshop on March 7. And
01:08:21
then after that, our goal is to bring
01:08:23
you recommendations have to move forward for the
01:08:26
April open meeting. So you can have 2
01:08:28
open meetings in April. So that's really staff
01:08:32
plan. I'm good with that timeline. Appreciate giving
01:08:35
us the opportunity to discuss it in one
01:08:37
open meeting and then make a decision at
01:08:39
at a subsequent open meeting. Commissioners, any questions,
01:08:42
comments for staff? I had a few things
01:08:47
that I think we've already discussed here in
01:08:49
in in terms of what staff might consider
01:08:53
in terms of put putting in your questions.
01:08:56
One, we had the discussion about supply chain
01:08:59
and, you know, again if both were equally
01:09:01
impacted. In terms of the, I think we
01:09:05
talked about the schedule, what the factors were
01:09:07
that would influence the relative timing. And, you
01:09:12
know, and I think we talked about that
01:09:13
as one inherently faster than the other. And
01:09:18
then this concept of going out and maybe
01:09:21
talking with folks who'd already built and operated
01:09:25
765, getting some of those examples of the
01:09:28
resiliency of the system against disruption, congestion, severe
01:09:34
weather, line loss, stability, which we didn't talk
01:09:37
a lot about. But, and and then just,
01:09:40
you know, what we talked about earlier, you
01:09:42
know, stakeholder input in terms of, the pros
01:09:46
and cons of doing, the 765 now versus
01:09:50
sometime in the future. But, again, just to
01:09:53
be considered Yes. By staff. We will incorporate
01:09:55
as much as we can. And just remember,
01:09:57
we will also have the workshop, questions for
01:09:59
the workshops. If we cannot get all of
01:10:01
it now, we have another chance, absolutely, to
01:10:03
get every information you need before you make
01:10:06
a decision. Thank you, Harika. And before we
01:10:10
leave this item, just a a quick note.
Item 25 - Chairman confirms Commissioner Jackson as point of contact for Permian Basin, 55178
01:10:13
So with Commissioner Cobos leaving, I've had some
01:10:16
questions about who's gonna be the Commissioner point
01:10:19
of contact to kinda usher this through to
01:10:21
the end. And Commissioner Jackson has graciously, offered
01:10:25
to to take up the mantle there, so
01:10:27
thank you for that. Thank you. I look
01:10:29
forward to working with everyone, and it's an
01:10:31
exciting opportunity. And I think it's gonna give
01:10:34
us the one two punch. I mean, we're
01:10:36
we're focused on, you know, making sure Texas
01:10:38
has the generation we need, and we also
01:10:40
need to kinda pair that up with making
01:10:42
sure that we have the, the transmission that
01:10:45
we need, for the future. So excited to
01:10:47
be able to do this. Thank you. Thanks
01:10:49
for being here. Great. Appreciate it. Before I
01:10:52
leave the mic, one last thing not related,
Item 23 - Kristi Hobbs – ERCOT VP - Release of capacity demand & reserve report, 55999
01:10:55
to the transmission plan. We, you may recall,
01:11:01
in December, we let you all know that
01:11:04
we were gonna be delaying, the release of
01:11:07
the capacity demand and reserve report. Last year,
01:11:12
there were some new rule changes. We were
01:11:14
totally revamping the way that we present the
01:11:16
information. Do you need to change dockets? And
01:11:22
maybe suggest that we bring up Item 23
01:11:24
as well to to have this discussion, which
01:11:28
is the reports of ERCOT. We'll call back
01:11:30
up Item 23, Project No. 55999, reports of
01:11:34
the Electric Reliability Council of Texas. Alright. So
01:11:39
as you recall, we had to delay that
01:11:41
because of some of the changes that were
01:11:43
being made. We needed additional time, to get
01:11:46
those reporting requirements correct. I just wanted to
01:11:49
share with you all we've made good progress
01:11:51
on that. We'll be coming out with a
01:11:53
market notice as we had highlighted, in our
01:11:56
our last market notice, with a date. We're
01:11:59
expecting that time frame somewhere in the the
01:12:02
week of February 10th, but our market notice
01:12:04
will have the exact date, and we could
01:12:06
plan to be available, if you wish, at
01:12:09
the, February open meeting to be able to
01:12:12
discuss what we saw in that report. Yeah.
01:12:15
I think that would be helpful to to
01:12:17
be here to discuss it. Alright? Alright. Thank
Item 27 - Project No. 56022 – Reports of Texas Reliability Entity, Inc
01:12:20
you. Thank you. Okay. That will bring us
01:12:27
to Item No. 27. That's Project No. 56022,
01:12:32
reports of the Texas Reliability Entity. Good morning,
Item 27 - Joseph Younger – Texas RE VP & COO - Priority risk areas, 56022
01:12:51
everyone. My name is Joseph Younger. I'm the,
01:12:54
Vice President and Chief Operating Officer at Texas
01:12:57
RE. And with me is Mark Henry, who
01:12:59
is our Chief Engineer and Director of Reliability
01:13:02
Outreach. Just to kinda start off, I just
01:13:06
wanted to, mention kinda what our role is
01:13:09
in the interconnection. We serve as the independent
01:13:12
voice for reliability and security, for the bulk
01:13:16
power system in in ERCOT. And we perform
01:13:19
that role in a lot of different ways,
01:13:21
whether it's, doing outreach around risk or trends
01:13:25
that we're seeing, assessing reliability performance, or auditing
01:13:29
and enforcing the NERC reliability standards. But an
01:13:33
important part of us being successful in those
01:13:35
activities and that mission is maintaining, robust communications
01:13:39
with the PUCT. So we really appreciate the
01:13:42
opportunity to be able to present today. Thank
01:13:45
the Commissioners for allowing us some time here
01:13:48
at the open meeting. And I also want
01:13:50
to thank, Connie and Barksdale for taking the
01:13:53
time with all the stuff that they have
01:13:55
going on to meet with us once a
01:13:56
quarter, and have some conversations and and share
01:13:59
notes about, you know, what we're seeing and
01:14:01
what they're seeing. And those have been, really
01:14:03
fruitful and important for us, as we emphasize
01:14:06
that state outreach and connection. So just wanted
01:14:09
to start with that. In a couple of
01:14:11
minutes, Mark is gonna speak to the long
01:14:15
term reliability assessment, that was put together by
01:14:18
NERC and the staffs from the 6 regional
01:14:21
entities across North America that looks at the
01:14:24
reliability grid over a 10 year window out
01:14:26
till 2,034. But before he touches on that,
01:14:29
I just wanted to briefly talk about the
01:14:32
risk priority areas that NERC and the regions,
01:14:35
including us, Texas RE, are have identified for
01:14:39
2025. And, you know, really what, what what
01:14:44
we're how we're gonna approach our enforcement and
01:14:46
auditing activities. Those risk priorities are set forth
01:14:49
in a document, called the compliance monitoring enforcement
01:14:53
program implementation plan, that was released at the
01:14:57
end of October. It's a public document. It's
01:14:59
available on the NERC website, on our website
01:15:02
as well, just, for your review. I think
01:15:04
we also may have filed it in our
01:15:06
project, and if we haven't, we we can
01:15:09
certainly can, but it's all publicly available. Those
01:15:13
identified risks are developed through a collaborative process,
01:15:17
between NERC, the regional staffs, as well as
01:15:20
industry. And it it it's based on data
01:15:23
that we have around compliance trends, event analysis,
01:15:27
reliability assessments, all that, all those materials go
01:15:30
into what, shaping our priorities for the year
01:15:33
and what we're gonna touch on. The 2025
01:15:36
plan include includes 8 risk priorities for the
01:15:40
coming year, and they're divided really into 2
01:15:42
buckets. There's 4 that are focused on energy
01:15:44
issues. That would be more your ops and
01:15:46
planning, type activities. And there are 4 that
01:15:49
are focused on security issues, so looking at
01:15:51
cyber and fiscal security concerns. To highlight the
01:15:55
energy risk priorities, there's one new risk element,
01:15:59
for 2025, which centers on transmission planning and
01:16:03
modeling. And this year's plan highlights the fact
01:16:07
that, and we've already heard a little bit
01:16:09
about it this morning, that the increased, penetration
01:16:12
of inverter based resources, flexible resources like batteries,
01:16:17
because of that, there's really a growing need
01:16:19
to, have the processes and tools to better
01:16:22
model, these types of resources and how they
01:16:25
behave on the system. FERC has also directed
01:16:28
NERC to develop reliability standards to, assure that
01:16:32
appropriate performance data is being provided to system
01:16:35
planners, and NERC in the regions, as well
01:16:38
as industry, are working on those standards now,
01:16:42
to meet FERC's deadline of November of this
01:16:44
year, to provide those. But while that work
01:16:47
is underway, this year, we'll be looking at
01:16:50
steps that generators are taking under the existing
01:16:53
rules to validate that their their model data,
01:16:56
what they've submitted, matches their actual system behavior,
01:17:00
and also meets the various planning specifications among
01:17:03
other requirements. So that's something we'll be prioritizing.
01:17:07
In addition to to that modeling data focus,
01:17:10
we'll also be looking at inverter based resource
01:17:13
performance, generally, looking at the various interconnection requirements
01:17:18
that are in place, how they making sure
01:17:19
they're reliably interconnected, and also that they're implementing
01:17:23
appropriate voltage and frequency ride through, settings, as
01:17:28
well as testing all their, protection systems and
01:17:31
maintaining them properly, which is just a kind
01:17:33
of a core function, but something that needs
01:17:36
to be looked at. The goal of all
01:17:39
these activities is basically to ensure that these
01:17:42
resources are gonna be available when we need
01:17:44
them. So that's the the goal of looking
01:17:46
at all of these programs. Like last year,
01:17:50
we're gonna continue to focus again on extreme
01:17:52
weather, responses. You know, I just point out
01:17:56
that the, the new federal winterization requirements that
01:18:00
require generators to develop, and implement plans to
01:18:03
mitigate extreme cold temperatures, extreme cold weather, those
01:18:07
became effective, this past October. NERC is actually
01:18:11
currently in the process of revising those standards
01:18:14
again in response to some additional NERC directives.
01:18:17
That revised standard is actually out for comment
01:18:20
right now, and should be adopted by the
01:18:22
NERC board at their meeting in a couple
01:18:24
weeks. And so and will be submitted to
01:18:27
FERC in March. So all that, is to
01:18:30
say the federal standards are starting to kinda
01:18:32
catch up with where, Texas has been over
01:18:35
the past few years. And one of the
01:18:37
things that we're doing is as these federal
01:18:40
standards come online, then what we're gonna enforce
01:18:42
is we've been working with ERCOT and collaborating
01:18:45
with them on what they're they're doing to,
01:18:47
try and minimize duplication of efforts, focus on
01:18:51
our priorities, while we accomplish what we're gonna
01:18:54
need to do around our standards, and what
01:18:56
our expectations are from NERC and FERC. Finally,
01:19:00
and I I think I've said this a
01:19:01
couple of times when we've talked about this,
01:19:03
we're gonna continue to focus on, facility ratings,
01:19:06
this year, and making sure that entities have
01:19:09
strong and sustainable programs in that area. That's
01:19:12
been a consistent focus of our auditing and
01:19:14
enforcement processes over the last several years. Something
01:19:17
we're we're gonna be doing again this year.
01:19:20
In terms of security, this, I think I
01:19:24
say this every time I talk about it.
01:19:26
We're just continuing to see cybersecurity vulnerabilities, threats,
01:19:31
evolve at an unceasing pace. I mean, it's
01:19:33
something you can read in the newspaper, but
01:19:36
it's, it's very prevalent and, ranging from hackers
01:19:41
for hire to to state actors, and very
01:19:45
sophisticated, threat programs. The security risk that we're
01:19:49
prioritizing, again, those 4 really focus on remote
01:19:53
connectivity, supply chain security, incident response, and then
01:19:57
physical security. Those are the same risk elements
01:20:01
that we've had, over the past years. One
01:20:04
of the important changes though this year within
01:20:06
those risk priorities is we're gonna focus more
01:20:09
this year around on on assets that are
01:20:12
basically termed low impact resources. We're primarily talking
01:20:17
in the generation context here, and those would
01:20:19
be resources that are a single plant or
01:20:22
location is, has the capability of of less
01:20:25
than 1500 megawatts of generation output, or a
01:20:29
control center that controls less than 1500 megawatts
01:20:33
within a single interconnection, so within the ERCOT
01:20:36
interconnection. Those would be low impact resources. So
01:20:40
we're gonna focus on the risks related to,
01:20:43
particularly, remote access, for these types of low
01:20:46
impact resources. One of the things that we've
01:20:49
seen is a noticeable trend as it relates
01:20:52
to, low impact resource compliance, with the with
01:20:56
the SIP standards of cyber infrastructure protection standards,
01:21:01
and that's been occurring across, North America. So
01:21:05
while the individual, facilities have a low reliability
01:21:09
impact on the overall system, one of the
01:21:11
things that we've observed is these resources can
01:21:15
serve as a channel of attack, for other
01:21:17
resources, or they can just simply be used
01:21:19
to conduct reconnaissance on the system. So there
01:21:22
is a threat, that we wanna take a
01:21:24
look at, and then so that's gonna be
01:21:25
a priority for us. As we look at
01:21:28
these types of disperse risks and look at
01:21:31
the way that, resources are, protecting their logical
01:21:34
and physical access, to their systems as well
01:21:38
as their response plans, if an incident was
01:21:41
to occur. Regarding, supply chain risk, I just
01:21:45
point out that the White House recently released
01:21:47
its own, this is kind of a a
01:21:50
mouthful, but it's their energy modernization cybersecurity implementation
01:21:54
plan, and that document focuses heavily on supply
01:21:58
chain risk, really, for newer, energy technologies and
01:22:03
developing strategies around better integrating security principles into
01:22:06
the overall energy supply chain. This is another
01:22:10
area where there's been a lot of work
01:22:11
at the state level, particularly through the Lone
01:22:13
Star Infrastructure Protection Act and securing the supply
01:22:16
chain there. And as you know, we've been
01:22:20
having quarterly meetings with Chuck Bondurant, regarding security
01:22:24
issues, and our security folks have been talking,
01:22:27
with with Chuck a lot about this document,
01:22:30
as well as, really, the broader security perspectives
01:22:33
and what we're seeing. I'll just end on
01:22:36
physical security. That's another area that we're continuing
01:22:40
to closely monitor, particularly around threats with threats
01:22:43
around, critical infrastructure. Every year, we put out
01:22:47
a regional risk assessment. We released, our our
01:22:51
most recent one this past June, and we
01:22:53
noted there was an uptick in physical security
01:22:55
events, and that's something that's continued. None of
01:22:58
them are really having a reliability impact, but
01:23:00
it's it's still a trend that we're watching.
01:23:02
So we're gonna focus on, again, this year
01:23:04
on the steps that transmission owners and operators
01:23:07
are doing to mitigate those risks. What plans
01:23:10
do they have in place? Are they doing
01:23:12
the necessary studies to identify, their significant, critical
01:23:16
infrastructure, but, really, vulnerable substations under our physical
01:23:21
security requirements and those types of steps. So
01:23:24
as I mentioned at the outset, the 2025,
01:23:27
implementation plan, that's publicly available. I encourage everyone
01:23:31
to to review it. I'm happy to take
01:23:34
any questions on that, or I can take
01:23:37
them after Mark talks for a couple of
01:23:39
minutes about the, reliability assessment. Yeah. Why don't
01:23:42
we have Mark make his presentation? Okay. (item:27:Mark Henry – Texas RE Chief Engineer & Director of Reliability Outreach - Long term reliability assestment, 56022)Thank
01:23:45
you Joseph, Commissioner Hjaltman, Jackson, Chair Gleeson. Let
01:23:48
me give you a brief overview about NERC's
01:23:50
long term reliability assessment, LTRA, I'll call it.
01:23:54
And it's, US and Canada wide review of
01:23:57
preparations, trends, risks, emerging issues, and some recommendations
01:24:01
to help ensure electric reliable supply across the
01:24:03
whole of that footprint. It's a cooperative effort
01:24:06
that Joseph mentioned. It's been going on since
01:24:08
the early nineties. You can still find old
01:24:10
ones on the website, and it's been continually
01:24:13
evolving too. Miss Hobbs mentioned the ERCOT capacity
01:24:18
demand reserve report is gonna be coming out.
01:24:20
This I'd like y'all to think of this
01:24:22
as complimentary. Our scope is a little broader.
01:24:25
We're gonna have little vignettes on each of
01:24:27
the 20 assessment areas, as well as overall
01:24:30
and overarching concerns that go across the entire
01:24:33
network footprint. Our data is gonna be a
01:24:36
little bit older. Data we collected for this
01:24:38
came from the summer. So when you get
01:24:40
that new CDR, you're gonna see a bunch
01:24:42
of changes in in some of these figures
01:24:44
because as you all know, a lot has
01:24:47
happened, in the past 7, 8 months, and
01:24:49
it will continue to happen, I believe. So,
01:24:52
our version came out on December 19th. It
01:24:54
was filed last year, and you will again
01:24:57
see details, on each of the regions, MISO,
01:25:00
SPP, and WEC, where El Paso Electric is,
01:25:03
as well as, of course, ERCOT, which is
01:25:05
mostly what I'll be talking about, when I
01:25:08
get into one of those areas. But the
01:25:10
thing I wanted to bring up first of
01:25:11
all is that this does get a lot
01:25:13
of national attention. In particular, there's a map
01:25:16
that comes out. It shows elevated risk areas
01:25:18
in orange, high risk areas in red. And
01:25:22
ERCOT, in 2026, through the, probabilistic calculations that
01:25:28
were behind this report, shows up with an
01:25:30
elevated risk. Again, this is attributed mostly to
01:25:34
all the demand growth that's coming in, and
01:25:36
it's gonna be a lot more that shows
01:25:38
up in next year's LTRA. SPP, just for
01:25:41
comparisons, they also were in that same category
01:25:43
this year because of the loss of dispatchable
01:25:48
generation. And, MISO is in the red. And
01:25:53
MISO, of course, includes MISO South, but we
01:25:55
tend to think more about the ones up
01:25:57
north. And it's their generator retirement pace is
01:26:01
what's getting them they're actually below their plan
01:26:03
reserve margin, which is a figure that we
01:26:06
have usually been able to meet handily now
01:26:08
associated with peak electric demands. NERC's observations, though,
01:26:13
go beyond the peak demand. Certainly, it starts
01:26:17
with all the demand growth that's happening across
01:26:19
the country. Since 2022, there's been a trend
01:26:23
upward in demand even though over probably the
01:26:26
preceding decade, things were declining somewhat. The overall
01:26:31
cumulative annual growth rate, was 1.67% across all
01:26:35
of NERC. It's much higher here, but it
01:26:38
was 1.24% in the LTRA that was prepared
01:26:42
for last year. So that's a pretty stout
01:26:44
increase considering the entirety of the country and
01:26:47
Canada. And on the supply side, again, we
01:26:51
are seeing, growth, but it's almost all in
01:26:55
solar, batteries, and some extent wind. It's the
01:26:59
non dispatchable. And I'd like to use the
01:27:01
term energy limited. So, certainly they're useful for
01:27:05
us. We're blessed that the sun shines during
01:27:07
peak, and we generally will meet peaks handily
01:27:10
now, but rest of the country may not
01:27:12
work out quite as well. We're seeing that
01:27:15
the queues for this has issues, particularly outside.
01:27:20
We have some advantages, I believe, under your
01:27:22
direction and ERCOT's administration of interconnection queues. But
01:27:27
we're seeing a lot of delays in construction
01:27:29
outside. Some here, I think batteries are a
01:27:32
success story for us relative. But, again, there's
01:27:35
supply chain issues when you were talking about
01:27:37
transmission 765 kV. It affects everything nowadays. So
01:27:41
those are things that NERC will continue to
01:27:42
monitor. It is a fortunate thing too. NERC
01:27:45
reports that transmission nationwide and Canada Canada is
01:27:49
up. They said there's about 9,000 more miles
01:27:53
in this year's report than it was last
01:27:56
year. And matter of fact, it's 9,000 more
01:27:58
than a decade average. So we are seeing
01:28:00
a lot of interest in that. Of course,
01:28:01
that may have some bearing on supply chain
01:28:03
too. So, those are things that this report
01:28:06
kinda gives you an overview of. Focusing a
01:28:08
little bit on the ERCOT section, again, the
01:28:11
demand figures that we use are are gonna
01:28:13
be lower in this report, but we still
01:28:15
are seeing much higher growth, one of the
01:28:17
fastest growing of the 20 assessment areas. We
01:28:21
see that, 4.6%, growth from 2025 through 2029.
01:28:28
It was 1.1% in the report we prepared
01:28:31
last year. So that's huge. And, of course,
01:28:34
our generation mix is very heavy with solar
01:28:37
and batteries. It's amazing what's going on there.
01:28:41
But again, there are the limitations that we
01:28:43
have to be aware of with that. So
01:28:45
we go into one section finally with ERCOT
01:28:48
and talk about some of the various issues
01:28:50
that we're dealing with specifically here. Planning methods
01:28:54
and activities, we go all the way from
01:28:56
demand response, things going on there with aggregation
01:28:59
are mentioned, distributed energy resources, IBR performance that
01:29:03
Joseph mentioned a little bit about, how we're
01:29:06
using batteries here, and the Texas Energy Fund
01:29:09
is mentioned, but we don't include any of
01:29:11
that generation yet. So that's the good news
01:29:13
is we're gonna see some more dispatchable generation,
01:29:15
I think, showing up in future reports. So,
01:29:18
again, my hope is that if you take
01:29:20
a look at the ERCOT section of our
01:29:22
report before the CDR, you'll be impressed with
01:29:26
all the changes that are going on, but
01:29:27
still have an idea of the leadership that
01:29:30
this part of the country is having and
01:29:31
some of these issues that are really affecting
01:29:33
the entire country. And last thing LTERA itself
01:29:36
ends with methods and assumptions so we can
01:29:38
understand there are some differences in how this
01:29:40
is prepared versus the ERCOT reports. There are
01:29:43
gonna be some recommendations and the ongoing actions.
01:29:45
We'd like to stress that the NERC is
01:29:48
working these things to the extent that we
01:29:50
can. And the priority recommendations actually aim more
01:29:54
at policy. Managing that pace of retirements that's
01:29:57
affecting LISO so much is a key thing
01:30:00
for policy makers to consider. Streamline deciding and
01:30:03
permitting for both generation and transmission. It's gonna
01:30:06
be extremely important going forward. Another thing is
01:30:09
trying to think about our gas and electric
01:30:12
industries together as an energy industry. It's important
01:30:16
that we have that coordination because natural gas
01:30:19
is critical for us to be able to
01:30:21
integrate all of our energy limited resources. And
01:30:24
then the last, was, NERC's mention that's, again,
01:30:29
because of the resource mix, it's very important
01:30:31
that we keep what we call the essential
01:30:34
liability services at NERC. We like to call
01:30:36
them ancillary services here for the most part,
01:30:39
that we keep up with what those needs
01:30:41
are. Certainly with the inverter based resource performance
01:30:44
issues that we've seen, voltage and frequency ride
01:30:46
through, things come into play now that we
01:30:49
haven't had to deal with in the past.
01:30:51
And, NERC itself is recommending that they continue
01:30:55
to revamp how we look at the LTRA
01:30:58
to build more consistency from each of these
01:31:00
20 areas. They're all independent, and enhance our
01:31:04
consideration of those essential liability services, and look
01:31:08
at expanding the wide area analysis. And in
01:31:11
this case, I'm thinking about all the NERC
01:31:14
footprint. We did a transfer study, looking hypothetically
01:31:18
at increasing transfers, mostly in the Eastern interconnect,
01:31:22
but we looked at what we might be
01:31:23
able to do here as well. So those
01:31:25
things will be recurring parts of our report,
01:31:27
and we hope that they'll be useful to
01:31:29
you all as you go through, all the
01:31:31
various deliberations and decisions that you have to
01:31:33
make. And the last piece, of course, is
01:31:35
I say that NERC will continue with its
01:31:38
studies, assessments, guidelines, industry alerts, various forms of
01:31:42
outreach, and strategic engagements with industry and with
01:31:46
the regulating community. But, of course, we're also
01:31:48
going to continue working with the things Joseph
01:31:51
talked about, which are risk prioritized, reliability standards
01:31:54
development, monitoring, and enforcement activity. So I appreciate
01:31:58
your time today. If you have any questions
01:31:59
for Joseph and I, I'd be happy to
01:32:01
take them an hour later. Thank you, Mark.
01:32:03
Commissioners, questions for Texas RE? I guess, I
01:32:08
feel like this is something that's said a
01:32:10
lot. You know, every the the grid is
01:32:12
changing. Everything's changing very quickly, and we need
01:32:14
to change how we think and operate differently.
01:32:18
What from y'all's perspective, what does that mean
01:32:20
that we need to be thinking about the
01:32:22
most? It's very interesting that you've you've had
01:32:27
the 765 kv discussion right before us. There's
01:32:31
there's so much change going on, with load,
01:32:36
and with the types of resources that we
01:32:37
have and where they're located is, you know,
01:32:39
just to think about things more on that
01:32:42
that wide area basis, you know, within ERCOT
01:32:46
region. And again, as the opportunities come up
01:32:49
nationally as to how we work there, and
01:32:52
it's just the characteristics, it takes a lot
01:32:55
more sophisticated modeling now to try and understand
01:32:58
how these pieces of equipment are gonna play
01:33:01
together. And, you know, the emphasis on that,
01:33:04
in in the work that we do and
01:33:07
then the things that ERCOT ISO is extremely
01:33:09
involved in with industry and manufacturers and all
01:33:12
that are are very critical to how we
01:33:14
move forward. Yeah. And I'll just add, you
01:33:17
know, one one of the things and this
01:33:18
this won't be news for for y'all, but,
01:33:21
you know, one of the things that the
01:33:23
discussions that we're we're having nationally is around,
01:33:26
you know, moving from, a capacity based, system
01:33:30
modeling to an energy based modeling. So the
01:33:32
type of the reliability standard that you all
01:33:35
have been developing with ERCOT that looks at
01:33:37
loss of load probabilities and, magnitude, duration, those
01:33:41
types of know, developing reliability stand around that.
01:33:44
That's a really fundamental shift that reflects the
01:33:47
evolving grid. So that's an area where, again,
01:33:50
that's not that's not news for you all
01:33:52
because you've been working that. But in other
01:33:54
places, that's they're still, you know, they're not
01:33:56
as far along on that that transition. They're
01:33:59
no longer those capacity numbers no longer have
01:34:01
the meaning that they did. And that's a,
01:34:03
you know, that's a a very different way
01:34:05
of thinking about the system. It's just something
01:34:08
that we're a little further along on here
01:34:10
in terms of getting comfortable with how we
01:34:12
model and understand, you know, what a reliable
01:34:14
system looks like with all these different types
01:34:16
of resources. Yeah. That work is recognized in
01:34:19
the LTRA report, and those figures that I
01:34:22
mentioned in the map, they're based on a
01:34:24
similar type of analysis. Peak is not the
01:34:26
issue anymore. It's off peak in many cases,
01:34:29
and we're also seeing a shift from summer
01:34:31
peaking to winter peaking, across the country or
01:34:34
dual peak where it's, you know, kind of
01:34:36
a grab as to which one will be
01:34:37
the highest number you deal with. I'm glad
01:34:43
to hear that the, our federal counterparts are,
01:34:45
adopting our weatherization standards, which have benefited us
01:34:48
greatly over the last couple of winters. So
01:34:50
thank you for for letting us know. And,
01:34:52
Mark, Joseph, thanks for being here this morning.
01:34:53
Thank you. (item:27:Chairman Gleeson recesses open meeting)Thank you as well. Okay. As
01:34:56
we are always mindful of the work of
01:34:58
our court reporter, why don't we take a
01:35:00
short break and come back at 11:20? (item:27:Chairman Gleeson reconvenes open meeting)We'll
01:35:03
stand in recess until 11:20. We'll resume the
01:35:20
open meeting at 11:21. Next up on the
01:35:25
agenda is Item No. 28. (item:28:Project No. 57004 – Texas Energy Fund Grants for Facilities Outside of the ERCOT Region)That is Project
01:35:28
57004, Texas Energy Fund Grants for Facilities Outside
01:35:33
of the ERCOT Region. We have staff here.
Item 28 - Allison Fink – Commission Staff - Recommendation of adoption for TX Energy Fund, 57004
01:35:40
Good morning. Good morning. Allison Fink with Commission
01:35:45
Staff. Before you for this item is a
01:35:49
staff recommended adoption order for the Texas Energy
01:35:52
Fund outside ERCOT grant program, and I wanted
01:35:56
to quickly go over the significant features of
01:35:59
this draft as, compared to the proposal for
01:36:03
publication. This draft also does not allow new
01:36:08
generation as an eligible project type. Second, no
01:36:13
operations or maintenance costs are eligible either. Only
01:36:18
capital investments are eligible for a grant under
01:36:21
this program. And lastly, the subcategories of the
01:36:25
objectives under subsection b 3, so that would
01:36:28
be a through d, b 3, a through
01:36:30
d, are exclusive lists. They are not examples
01:36:34
of project types. That is in that is
01:36:37
the, staff recommended adoption order for this, rule,
01:36:43
and I'm happy to take questions and elaborate
01:36:45
on anything I've said. Thank you, Allison. So,
01:36:48
one thing I just wanna be clear on,
01:36:50
the legislation that passed enumerated what were authorized
01:36:54
to be funded from this program. Right? Correct.
01:36:58
And but the rule goes a little further
01:37:00
and, talks about some things like new generation
01:37:04
that are not allowed, that are prohibited. Can
01:37:06
you talk through staff's thoughts on why why
01:37:09
you do that as opposed to just enumerating
01:37:12
what are the authorized expenses? Sure. So I
01:37:15
can I'll speak specifically to new generation itself.
01:37:22
The plain language of the utilities act of
01:37:25
PURA chapter sorry. Slow down. 34.0103, which is
01:37:31
the the section for this program, allows modernization,
01:37:39
weatherization, reliability and resiliency enhancements, and vegetation management
01:37:43
for facilities for electric generated facilities and transmission
01:37:46
distribution infrastructure. That is the plain language of
01:37:50
the statute. Staff believes this plain language of
01:37:55
the statute assumes the existence of these facilities
01:37:58
and infrastructure prior to them being modernized, weatherized,
01:38:03
etcetera. Secondly, like you said, new generation is
01:38:08
not an explicitly named objective of the statute,
01:38:11
whereas, again, modern modernization, weatherization, etcetera, are enumerated
01:38:17
in the statute. And lastly, the dollar amount
01:38:20
allocated to this program in statute is a
01:38:23
1,000,000,000 a $1,000,000,000 out of the total of
01:38:26
10,000,000,000 authorized under prop 7. And a $1,000,000,000
01:38:32
is significantly less than the $7,200,000,000 allocated collectively
01:38:36
to both the inner ERCOT loan generation loan
01:38:39
program and the inner cut completion bonus grant
01:38:43
program, both of which were exclusively for new
01:38:47
generation electric generating facilities. So taking the comparison
01:38:52
of the dollar amounts allocated to both programs,
01:38:56
staff recommends that this program exclude new generation,
01:38:59
which is orders of magnitude more expensive than
01:39:02
the fixes that we believe are authorized under
01:39:05
statute. Okay. Commissioners, questions for staff? Yeah. Kind
01:39:10
of following on the subcategories that you have
01:39:12
listed in b three c, you you include
01:39:18
batteries in the language, but then we're talking
01:39:21
about not having new generation. So can you
01:39:24
what was the thinking in having that included?
01:39:27
Yeah. Reliability and resiliency enhancements, which are subsection
01:39:33
b three c, it stops understanding that battery
01:39:39
storage can be used as a as a
01:39:41
tool for transmission and distribution rather than as
01:39:47
a stand alone new generation asset. It can
01:39:50
be used for either one, but staff has
01:39:54
had chosen to draw the line between a
01:39:56
battery project that is a stand alone, new
01:39:59
generation type, selling into the wholesale market versus
01:40:02
something that can support reliability and resiliency of
01:40:07
a transmission line. And would you like to
Item 28 - David Smeltzer – Commission Staff - Standards on existing facilities, 57004
01:40:11
add anything? Yeah. I think one of the
01:40:13
themes that and I think, Allison, I agree
01:40:15
with everything she said. She hit all those
01:40:16
points, brilliantly. And I think one of the
01:40:18
themes that we've gotten questions from stakeholders and
01:40:22
then I, understand you guys have gotten some
01:40:24
similar questions from stakeholders as well, is how
01:40:27
this draft navigates, storage and generation concepts. And
01:40:32
so I think that the the the line
01:40:34
in the standards that Allison reflected are, you
01:40:36
know, these should be existing facilities, There should
01:40:38
be enhancements if there are things like storage
01:40:41
that, if there are things like storage that
01:40:44
can, you know, like, back up a substation
01:40:45
or something, support resiliency measures. That's fine. That
01:40:49
that meets the test of not being prohibitively
01:40:51
expensive, not, not being a new facility. One
01:40:57
reasonable question you might ask is, why would
01:41:00
we draw the line like that with storage
01:41:02
and not with other types of energies that
01:41:04
could, play that same role such as, small
01:41:08
generators could serve the same, purpose as storage
01:41:11
in terms of, like, backing up a substation
01:41:12
or resiliency on the transmission grid type asset.
01:41:15
And I think that, candidly, that that's just
01:41:18
not a question that we consider, and I
01:41:21
think the staff is, willing to concede that
01:41:23
there might have been in staff's recommended, draft
01:41:26
that we filed. That might have been a
01:41:29
a inconsistency between the technology. So to the
01:41:32
extent that it's amenable to you all, we
01:41:33
would, not be opposed to going back and
01:41:35
reworking the draft a little bit to make
01:41:37
sure that we're being even handed in applying
01:41:39
that same standard across all technologies. And so,
01:41:42
to to more specifically say what I interpret
01:41:45
myself to be saying is, for small generators
01:41:47
and things like that, we wouldn't this wouldn't
01:41:49
be like teeth again, where you would maybe
01:41:53
use generators to go serve as a backup
01:41:57
for facilities like, town halls or hot hospital.
01:42:02
So that that's that's using generation or batteries
01:42:06
for their generation characteristics. We don't think that's
01:42:08
what the statue is talking about. But to
01:42:10
the extent those technologies can be deployed in
01:42:13
other ways consistent with the mission of supporting
01:42:16
the resiliency of of of the grid. We
01:42:18
we think that that's a consistent reading with
01:42:20
statute and, probably worth taking a little bit
01:42:23
of time to make sure we're threading the
01:42:25
needle properly on those things. And will there
01:42:28
be a way, I mean, to thread that
01:42:29
needle? I think wording wise, obviously, yes, clear
01:42:32
if we can clean that up, but also,
01:42:34
I mean, how to when the plans come
01:42:36
forward, how we can make sure that that's
01:42:38
what we are providing the funds for if
01:42:40
that's something they put forth. Right? I I
01:42:44
believe so. I'm not an engineer, but if
01:42:46
there's I don't know if Mark's not something.
Item 28 - Barksdale English – Commission Staff - Reporting measurements & metrics, 57004
01:42:48
Barksdale's not an engineer. Commissioner, thanks for the
01:42:51
question. I am decidedly not an engineer. However,
01:42:55
I can, let you know that our, TEF,
01:42:59
program staff, is already thinking about what kinds
01:43:02
of reporting measurements and and metrics we would
01:43:05
impose on any grant recipients, including ones that
01:43:09
would, potentially receive funds for, energy storage or,
01:43:14
mobile generation to serve as a resiliency measure
01:43:17
for transmission or distribution infrastructure to ensure that
01:43:20
the grant funds are being used, in accordance
01:43:24
with our rule and the statute. Okay. So
01:43:27
for clarification, that would only be used for
01:43:29
backup, resiliency and reliability, and not for any,
01:43:35
play in the ERCOT? That's correct, ma'am. Thank
01:43:37
you. And then one additional kind of clarification
01:43:42
in subsection c paragraph 1 in that same
01:43:45
area. You talk about the CCN being applicable.
01:43:49
And in the preamble, you kinda talk through
01:43:51
it, but you don't necessarily add it throughout.
01:43:55
Is that something we need to clarify from
01:43:57
y'all standpoint, or would that be beneficial so
01:44:00
that it's in the language itself? Yes, Commissioner.
01:44:06
For the benefit of those who may not
01:44:07
be reading the preamble in the future for
01:44:09
this program, we believe it would make sense
01:44:11
to add some more clarification to that section
01:44:13
for, for different application types. I think that'd
01:44:18
be helpful. And then, a question I got
01:44:20
so I just wanna make sure that this
01:44:22
is clarified from here. The maximum amount for
01:44:25
an applicant is to be 200,000,000 no matter
01:44:29
how many projects they put forth. That is
01:44:31
going to be our max per applicant. Correct?
01:44:34
Correct. Okay. And I think on on that
01:44:37
point, it's worth noting. I think folks have
01:44:38
reached out to me. We know we got
01:44:40
commenters that were interested in making sure that
01:44:42
there were funds left for smaller entities. And
01:44:46
I think that in the the discussion and
01:44:49
in the rule, we didn't do a carve
01:44:50
out for those smaller entities, but based on
01:44:52
the number of larger entities that they are,
01:44:55
an even application of the $200,000,000 presuming we
01:44:58
get a, you know, a full $1,000,000,000 funding,
01:45:01
an even application of the 200,000,000 across large
01:45:04
entities would leave a pot, beyond our 4
01:45:06
big regulatory utilities that would be necessarily, functionally
01:45:10
reserved for others. And that's not to say
01:45:12
everyone would get their full capped amount, but
01:45:14
even if even if they were to get
01:45:15
close, that would functionally serve as the, reserve
01:45:19
that that was requested. I know one of
01:45:23
the things that you brought up that you
01:45:24
said was different and maybe was kind of
01:45:26
a policy call was, the fact that the
01:45:29
subcategories were exclusive lists. And I know, you
01:45:32
know, sometimes when you are considering grant programs,
01:45:36
you wanna think about, okay, is, you know,
01:45:38
is there a need to make sure that
01:45:40
I am maybe being more inclusive than exclusive?
01:45:48
I think in this particular case though, the
01:45:51
intent of the legislature was not just to
01:45:54
provide the funding for the mitigation and for
01:45:58
the enhanced resiliency, but it was also to
01:46:00
get these projects out quickly. And and I
01:46:04
think this is I think this was actually
01:46:06
a really good idea by staff to to
01:46:11
take this approach. Because again, I think it's
01:46:13
a little bit different than what you traditionally
01:46:15
see in these kind of grant programs. But
01:46:18
I think in this particular case, it makes
01:46:21
sense, and it keeps those projects that we
01:46:26
want very well defined and directed. And also,
01:46:30
I think it also helps us in terms
01:46:32
of again, the quicker you can get the
01:46:36
grants awarded, the quicker you can get them
01:46:40
executed, and the quicker you can start receiving
01:46:42
the benefits. So I wanted to thank you
01:46:44
for thinking about that and and putting that
01:46:46
as a part of this program. Thank you,
01:46:48
commissioner. That that was our thought as well.
01:46:51
Alright. Thank you for all the work. Appreciate
01:46:53
you all recognizing it needs needs a little
01:46:56
more fine tuning, and, look forward to seeing
01:46:58
you back at a future open meeting. Thank
Item 33 - Project No. 56000 – Firm Fuel Supply Service
01:47:00
you. Thank you. That'll bring us to Item
01:47:05
33, Project No. 56000, firm fuel supply service.
Item 33 - Matthew Arth – ERCOT Electric Regulatory Attorney - Update on firm fuel supply service project, 56000
01:47:17
Good morning, chairman and commissioners. Matthew Arth for
01:47:19
ERCOT. Last week, we filed an update in
01:47:23
the firm fuel supply service project. The primary
01:47:27
purpose of that update was to present the
01:47:30
results of the survey that we recently conducted
01:47:33
to investigate. Well, it's a it's a survey
01:47:37
that, ERCOT has performed in the past in
01:47:40
advance of, firm fuel supply service seasons to,
01:47:44
make sure that we have a good understanding
01:47:46
of the resources that are potentially available to
01:47:49
offer that service. So, in this survey, we
01:47:55
included, really 2 additional questions Oncor one modification
01:47:59
of a question and one additional question to
01:48:01
get at, potential ways to, introduce, additional liquidity
01:48:07
into that market of of, identifying additional resources
01:48:10
that could could offer that. And so the
01:48:13
primary way, that we asked about that was
01:48:15
to ask, resource entities that, represent, generation resources
01:48:23
powered by natural gas. If they were if
01:48:26
the definition of qualifying pipelines were to be,
01:48:32
adopted that was, recommended by the technical advisory
01:48:36
committee in the past, NPRR and NPRR1169
01:48:39
back in 2023, how that might, expand the
01:48:44
pool of eligible, resources to offer into that
01:48:48
service. And so, the results of that survey
01:48:51
indicated that we could expect, up to approximately
01:48:55
maybe 57, additional, generation resources that could provide,
01:49:01
firm fuel supply service under that alternative, definition
01:49:04
of of, qualifying pipelines if that were to
01:49:08
be, adopted. So I think our our goal
01:49:11
in presenting this report, the the RFP for,
01:49:15
the upcoming 2025 to 2026 firm fuel supply
01:49:18
service season would go out in early August.
01:49:21
I believe late July, early August. So, we
01:49:25
wanted to present this information to y'all with
01:49:26
with sufficient time for you to consider whether
01:49:29
you, would like changes to be made to
01:49:31
the firm fuel supply service. And if so,
01:49:35
we can, ERCOT can sponsor an NPRR to,
01:49:38
to move that through the process, expeditiously. So,
01:49:44
we don't need a decision on that today,
01:49:46
but, did wanna make sure to send the
01:49:48
information to you. So happy to answer any
Item 33 - Tyler Nicholson – Commission Staff - Expanding program & increased risk, 56000
01:49:50
questions. Thanks, Matt. Staff? Tyler Nicholson, Commission Staff.
01:49:55
So staff is on board with getting this
01:49:57
NPRR, started in the stakeholder process as we've
01:50:01
been looking for ways to expand the program
01:50:02
now for a few years. So there would
01:50:05
be an increased risk as opposed to something
01:50:08
like currently using only on-site fuel oil or
01:50:11
a pipeline that's directly owned only by that
01:50:14
utility. We believe that the increase in risk
01:50:17
is marginal due to the three criteria that
01:50:17
were a part of the TAC approved NPRR.
01:50:18
The primary one TAC approved NPRR, the primary
01:50:22
one being that they may not have been
01:50:24
curtailed during Uri. So we already have a
01:50:28
past precedence of them giving the gas as
01:50:31
needed during. Staff will work closely with ERCOT
01:50:35
and the IMM or IMM in development of
01:50:38
the NPRR, and you all have a chance
01:50:40
to, pine again at this when it comes
01:50:42
forward in front of the commission. Currently, there
01:50:46
are limited restrictions on the procurement of FSSS.
01:50:49
So in combination, we'll be looking at ways
01:50:53
to incorporate that, if this is included. One
01:50:57
of which could be a separate, offer cap
01:51:02
for fuel oil versus gas because both of
01:51:04
those are quite different in prices. So in
01:51:08
conclusion, we believe that the, expansion of eligible
01:51:11
pipeline will at the cost of a very
01:51:13
marginal increase in risk, increased competition from the
01:51:16
low thirties as we've seen the last couple
01:51:17
years worth of resources, offering in to roughly
01:51:22
90. So likely resulting in overall increase in
01:51:25
resiliency as we should be able to procure
01:51:28
more for the same cost as the result
01:51:29
of competition. Any questions? Thank you, Tyler. I
01:51:36
think I've been pretty vocal that I think
01:51:38
we need to look to expand this. I'm
01:51:41
I'm glad we did the survey. Happy with
01:51:43
the analysis. I agree with staff. And, like
01:51:47
Matt said, they don't need an answer today,
01:51:49
but I can say I'm comfortable moving forward
01:51:51
with expanding this today. But I understand if
01:51:53
you all want more time to, deliberate and
01:51:56
discuss it. I'm comfortable moving forward today. I
01:52:00
think all of the points that you made
01:52:02
are those that, you know, I'd like to
01:52:03
see, which is, you know, we want to
01:52:05
be able to provide, more for less cost.
01:52:09
And so increasing the pool is definitely a
01:52:12
good thing, but also the fact that we're
01:52:14
doing it in such a way that the
01:52:16
risk is very small in terms of being
01:52:18
marginal. So, I think I'm good with this.
01:52:23
I appreciate the work of ERCOT, as well
01:52:25
as the review that staff made, but, I'm
01:52:28
good moving forward. Yeah. I think my only
01:52:31
question is, obviously, I know when this was
01:52:33
first adopted, it was take the conservative approach.
01:52:36
Let's see what happens. And you mentioned that
01:52:38
you will not there's a provision with the
01:52:41
new language with, you know, if you were
01:52:43
curtailed during Uri, you would not be bid
01:52:45
again. So of those 90 that could now,
01:52:47
if this was adopted, would bid in, none
01:52:48
of those were curtailed during Yuri? According to
01:52:51
the self reporting of the survey, no. Correct.
01:52:53
Okay. And from staff's perspective, you know, it's
01:52:56
obviously, we firm fuel had a purpose of
01:52:59
closing that gap so that we can know
01:53:01
that services will get to the generator. You
01:53:04
feel that this second provision does that adequately
01:53:08
above the human risk, and we will have
Item 33 - Harika Basaran – Commission Staff - Budget & caps, 56000
01:53:10
I believe so. And also, I just
01:53:13
wanna mention as well that you will have
01:53:15
another chance also setting the budget and offer
01:53:18
caps, and it will go through stakeholder process.
01:53:20
We will be engaged talking with IMM, ERCOT,
01:53:23
and stakeholders. So if anything comes up, we
01:53:25
will definitely brief you. So are you comfortable?
01:53:30
Yes. I I see the benefits of driving
01:53:32
those costs down hopefully. So Okay. Matt, do
01:53:34
you need anything else to get going? I
01:53:37
don't believe so. Thank you. Okay. Thanks, Matt.
01:53:39
Thank you to staff as well. Okay. Connie,
01:53:43
Shelah, do we have anything else to take
01:53:46
up? I don't believe so. No, sir. Alright.
Item 43 - Chairman Gleeson adjourns meeting
01:53:51
With there being no further business before us,
01:53:53
this meeting of the Public Utility Commission of
01:53:55
Texas is hereby adjourned.

Chairman Gleeson calls meeting to order

Starts at 00:00:16

Commission Counsel Shelah Cisneros lays out Consent Agenda

Starts at 00:01:19

Chairman Gleeson asks for motion to approve items on Consent Agenda

Starts at 00:01:54

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

Starts at 00:02:05

1 - Cyrus Reed - Lone Star Chapter, Sierra Club - Petition to Governor Abbott

Starts at 00:02:23

1 - Joe Jimenez - Former President of Windermere Oaks WSC

Starts at 00:04:50

2 - Docket No. 52370; SOAH Docket No. 473-22-07686.WS – Application of East Houston Utilities, Inc. for Authority to Change Rates

Starts at 00:08:39

2 - Motion to deny the application of East Houston Utilities, 52370

Starts at 00:10:31

5 - Docket No. 55577; SOAH Docket No. 473-24-15740.WS – Application of Aqua Texas, Inc. to Amend Its System Improvement Charges under 16 TAC § 24.76

Starts at 00:10:55

5 - Motion to adopt PFD with changes, 55577

Starts at 00:12:15

8 - Docket No. 56350 – Application of Quadvest, LP to Amend Its Certificates of Convenience and Necessity in Harris County

Starts at 00:12:35

8 - Motion to grant appeal of Order No. 8, 56350

Starts at 00:14:48

9 - Docket No. 56535 – Petition of Maurice Williams, Kimberly Williams Barnett, and Kristi Williams Neyes to Amend City of Royse City’s Certificates of Co

Starts at 00:15:08

9 - Motion to approve proposed order, 56535

Starts at 00:16:04

19 - Docket No. 57244; SOAH Docket No. 473-25-04144 – Application of Southwestern Public Service Company for Approval of a Purchased Power Agreement with W

Starts at 00:16:21

19 - Motion to approve PFD with modifications, 57244

Starts at 00:17:07

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

Starts at 00:17:54

23 - Chad Seely – ERCOT Sr. VP of Regulatory Policy - Update on work with CPS Energy, 55999

Starts at 00:18:10

25 - Project No. 55718 – Reliability Plan for the Permian Basin under PURA §39.167

Starts at 00:25:40

25 - Kristi Hobbs – ERCOT VP of System Planning & Weatherization - Study & Cost Comparison filed document

Starts at 00:25:59

25 - Barksdale English – PUC Deputy Executive Director - Stakeholders Workshop, 55718

Starts at 00:48:41

25 - Prabhu Gnanam – ERCOT Grid Planning Director - Building transmission for system demand, 55178

Starts at 01:06:18

25 - Harika Basaran – Commission Staff - Update on ERCOT analysis, 55178

Starts at 01:07:35

25 - Chairman confirms Commissioner Jackson as point of contact for Permian Basin, 55178

Starts at 01:10:13

23 - Kristi Hobbs – ERCOT VP - Release of capacity demand & reserve report, 55999

Starts at 01:10:55

27 - Project No. 56022 – Reports of Texas Reliability Entity, Inc

Starts at 01:12:20

27 - Joseph Younger – Texas RE VP & COO - Priority risk areas, 56022

Starts at 01:12:51

27 - Mark Henry – Texas RE Chief Engineer & Director of Reliability Outreach - Long term reliability assestment, 56022

Starts at 01:23:42

27 - Chairman Gleeson recesses open meeting

Starts at 01:34:53

27 - Chairman Gleeson reconvenes open meeting

Starts at 01:35:00

28 - Project No. 57004 – Texas Energy Fund Grants for Facilities Outside of the ERCOT Region

Starts at 01:35:25

28 - Allison Fink – Commission Staff - Recommendation of adoption for TX Energy Fund, 57004

Starts at 01:35:40

28 - David Smeltzer – Commission Staff - Standards on existing facilities, 57004

Starts at 01:40:11

28 - Barksdale English – Commission Staff - Reporting measurements & metrics, 57004

Starts at 01:42:48

33 - Project No. 56000 – Firm Fuel Supply Service

Starts at 01:47:00

33 - Matthew Arth – ERCOT Electric Regulatory Attorney - Update on firm fuel supply service project, 56000

Starts at 01:47:17

33 - Tyler Nicholson – Commission Staff - Expanding program & increased risk, 56000

Starts at 01:49:50

33 - Harika Basaran – Commission Staff - Budget & caps, 56000

Starts at 01:53:10

43 - Chairman Gleeson adjourns meeting

Starts at 01:53:51

Commissioner Memos

Control	Item	Filing Date	Party	Description
52370	144	January 30, 2025	CHAIRMAN THOMAS GLEESON	CHAIRMAN THOMAS GLEESON MEMORANDUM
55577	1059	January 30, 2025	CHAIRMAN THOMAS GLEESON	CHAIRMAN THOMAS GLEESON MEMORANDUM
56350	42	January 30, 2025	CHAIRMAN THOMAS GLEESON	CHAIRMAN THOMAS GLEESON MEMORANDUM
56535	24	January 30, 2025	CHAIRMAN THOMAS GLEESON	CHAIRMAN THOMAS GLEESON MEMORANDUM
57244	14	January 30, 2025	CHAIRMAN THOMAS GLEESON	CHAIRMAN THOMAS GLEESON MEMORANDUM