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    • Item 1 - Welcome & Workshop Overview
      00:00:05
      Started here. Hello, and welcome to the Texas
    • 00:00:35
      Energy Fund's backup power package workshop. My name
    • 00:00:39
      is Crystal Smith. I'm with the PUCT and
    • 00:00:41
      will be leading this workshop today. Here with
    • 00:00:44
      me is Laurie Hobbs with the PUCT. Please
    • 00:00:48
      make sure you sign in today so that
    • 00:00:50
      the sign and the sign in sheet's in
    • 00:00:52
      the hallway. Please fill out all fields so
    • 00:00:54
      we have accurate information for future communications. To
    • 00:00:58
      start, let's review the high level details of
    • 00:01:00
      the Texas Backup Power Package program, also known
    • 00:01:03
      as the TBPP program, and the goal of
    • 00:01:06
      today's workshop. The Texas Backup Power Package program
    • 00:01:11
      provides up to $1,800,000,000 in grants and loans
    • 00:01:14
      to qualifying entities to design, procure, or install
    • 00:01:18
      backup power packages at facilities necessary to support
    • 00:01:22
      community health, safety, and well-being. The tech the
    • 00:01:26
      Public Utility Commission of Texas operates in full
    • 00:01:29
      compliance with all applicable legislation and regulatory compliance
    • 00:01:33
      governing the Texas Energy Fund. This workshop is
    • 00:01:37
      designed to facilitate a thorough discussion of industry
    • 00:01:40
      perspectives, including stakeholder feedback or concerns with the
    • 00:01:44
      findings outlined in the Texas Backup Power Package
    • 00:01:47
      final report. The final report prepared by Patrick
    • 00:01:50
      Engineering was submitted on 01/23/2025. This serves as
    • 00:01:56
      a critical reference document for this discussion. Commission
    • 00:02:00
      staff is seeking stakeholder input on specific questions
    • 00:02:05
      listed in the workshop agenda. Interested parties are
    • 00:02:09
      encouraged to submit their comments in writing to
    • 00:02:12
      the interchange using project number five seven two
    • 00:02:15
      three six. In addition to any verbal comments
    • 00:02:18
      provided during today's session. If you don't plan
    • 00:02:21
      to make any comment today, you may still
    • 00:02:24
      submit those written comments via the PUCT's interchange
    • 00:02:28
      in project number 57236. The deadline for written
    • 00:02:32
      comments is April 2025. This workshop is not
    • 00:02:38
      the appropriate forum for legislative changes. Today's agenda
    • 00:02:42
      topics are based on stakeholder input received during
    • 00:02:45
      the stakeholder in input comment period and the
    • 00:02:48
      findings of the Patrick Engineering final report. The
    • 00:02:51
      PUCT will continue to engage stakeholders throughout the
    • 00:02:55
      rulemaking process. Now let's look at today's agenda.
    • 00:02:59
      First, we'll provide an overview of the workshop,
    • 00:03:02
      including instructions on how to provide your input.
    • 00:03:05
      Then the bulk of our time will be
    • 00:03:06
      spent listening to public comment on each of
    • 00:03:09
      the three topic areas listed here. The topics
    • 00:03:14
      discussed today will include cost offsets, flexibility and
    • 00:03:18
      applicability of technical specifications, and supply chain deployment.
    • 00:03:23
      There are multiple questions under each topic to
    • Item 3.1 - Cost Offsets
      00:03:26
      (item:3.1:Cost Offsets) be addressed. First topic, cost offsets, includes questions
    • 00:03:31
      related to optimizing TBPP specifications for cost savings
    • 00:03:36
      and effectiveness, providing and or quantifying added value
    • 00:03:41
      for TBPP features, structuring compliant contracts for alternative
    • 00:03:46
      ownership and financial models. The second topic we
    • 00:03:51
      cover was flexibility and applicability of technical specifications,
    • 00:03:57
      including questions for incorporating performance based factors in
    • 00:04:01
      TPPP specifications, varying specifications based on facility type
    • 00:04:06
      or size, considering specifications to include alternative technologies
    • 00:04:11
      and fuels. And lastly, we will cover supply
    • 00:04:14
      chain and deployment. This includes questions related to
    • 00:04:18
      expanding vendor eligibility and business models for TBPPs,
    • 00:04:22
      reducing deployment constraints for critical facilities, and managing
    • 00:04:26
      supply chain disruptions for timely deployment and emergency
    • 00:04:30
      preparedness. Before we begin the comment process, let's
    • 00:04:35
      go through our guidelines for making public comment
    • 00:04:37
      through during this workshop. We request that comments
    • 00:04:42
      are about the questions in group by topic,
    • 00:04:44
      starting with topic area one. For each topic
    • 00:04:47
      area, we ask for comments on one question
    • 00:04:51
      at a time. For example, we'll start with
    • 00:04:54
      question question and topic one a question and
    • 00:04:58
      topic one sorry. Question and one a. Once
    • 00:05:01
      all comments are heard related to the question,
    • 00:05:04
      we will move on to question one b.
    • 00:05:07
      Once we move on from that question, we
    • 00:05:09
      will not return to that question. If you
    • 00:05:12
      would like to make comment further on that
    • 00:05:14
      question that has already been covered, we ask
    • 00:05:16
      that you file a written comment on the
    • Item 2 - Instructions for Providing Public Comment
      00:05:17
      interchange. You would like to make public comment
    • 00:05:21
      on the question, please approach the front table
    • 00:05:24
      and take a a table in the take
    • 00:05:26
      a seat in the front, and when I
    • 00:05:28
      announce and read the question that you wish
    • 00:05:30
      to address. To avoid interruptions during the discussion,
    • 00:05:34
      please wait to your turn to speak. Remember
    • 00:05:37
      that all the mics are live throughout today's
    • 00:05:39
      workshop, so refrain from side conversations to minimize
    • 00:05:43
      background noise for online participants. And we will
    • 00:05:46
      call on each participant one by one in
    • 00:05:49
      order they are seated going from left to
    • 00:05:51
      right, starting with the participant closest to me.
    • 00:05:56
      When making public comment, please start by introducing
    • 00:05:58
      yourself, your full name, and the organization you
    • 00:06:01
      represent. And we encourage companies with multiple participants
    • 00:06:05
      to select one representative to make a comment
    • 00:06:08
      on our on your company's behalf. Please be
    • 00:06:11
      considerate of, others and manage your time for
    • 00:06:14
      your comment. After making your comment, please return
    • 00:06:18
      to your seat in the audience and allow
    • 00:06:20
      others the opportunity to come up and speak.
    • 00:06:23
      You may return to the table to make
    • 00:06:25
      comments on other questions. Whether or you're providing
    • 00:06:28
      a comment during today's workshop, we encourage you
    • 00:06:31
      to submit your comment in writing, and you
    • 00:06:33
      can do that by, using the interchange filing
    • 00:06:36
      project number 57236. Okay. So as mentioned, today's
    • 00:06:43
      agenda, topics are based on the stakeholder input
    • 00:06:47
      received during the stakeholder input comment period in
    • 00:06:50
      the findings of the Patrick Engineering report. So
    • 00:06:53
      for this first topic, we're seeking input on
    • 00:06:56
      cost offsets, and we'll start with question a.
    • 00:07:00
      How can specifications be refined to prioritize cost
    • 00:07:04
      do is to allow custom designed projects that
    • 00:07:08
      backup power and resilience goals. If you'd like
    • 00:07:11
      to make comment, please come up. Good afternoon.
    • 00:07:20
      Good afternoon. Can I say a little bit
    • 00:07:26
      about myself, my organization? Name of the organization,
    • 00:07:28
      please. Okay. Oh, yeah. Right. Thank you. I'm
    • 00:07:34
      used to seeing the green light. Good afternoon.
    • Item 3.1.1 - Brian Kaufman, Mainspring Energy
      00:07:38
      I'm Brian Kaufman. I am director of wholesale
    • 00:07:40
      market development with Mainspring Energy. Mainspring Energy is
    • 00:07:44
      a manufacturer of linear generation technologies, which essentially
    • 00:07:48
      are like a souped up genset. It's fuel
    • 00:07:50
      flexible, high efficiency, low emissions, and modular, so
    • 00:07:55
      we can put together in stacks of two
    • 00:07:56
      fifty kilowatts up to 100 plus megawatts. So,
    • 00:08:01
      in terms of this question here, from our
    • 00:08:04
      company's perspective, what we'd really encourage you to
    • 00:08:07
      do is to allow custom designed projects that
    • 00:08:11
      flexibly operate. In particular, do not set rules
    • 00:08:15
      that require a microgrid operator to only operate
    • 00:08:18
      during grid failure. That's the most important comment
    • 00:08:21
      I really have today, but I will offer
    • 00:08:23
      comments on every topic, probably. So, you know,
    • 00:08:28
      from a technical basis, grid parallel mode is
    • 00:08:30
      permitted, we see, under the statute. I think
    • 00:08:32
      there's different views on this, but for us,
    • 00:08:35
      a very clear reading says that it must
    • 00:08:37
      have the capability to run islanded, which we
    • 00:08:41
      agree is important, but there's no prohibition on
    • 00:08:43
      grid parallel. So, there's no legislative change here
    • 00:08:46
      that we're talking about. What kind of getting
    • 00:08:51
      into more of the details of kind of
    • 00:08:53
      the value here. So, economics really drive why
    • 00:08:56
      customers invest in microgrids. You can just buy
    • 00:09:00
      a dirt cheap genset if you just care
    • 00:09:02
      about islanding during emergencies. And when we look
    • 00:09:06
      at the numbers, the benefits from economics help
    • 00:09:10
      a customer way more than if you put
    • 00:09:13
      in economic terms what happens when there's a
    • 00:09:15
      grid outage. Know, ERCOT estimates $35,000 per megawatt
    • 00:09:20
      hour is the value of lost load. Whereas
    • 00:09:24
      when we put we did our estimate looking
    • 00:09:26
      at the last year, if if we can
    • 00:09:28
      run our generators whenever the power is over
    • 00:09:30
      $40 per megawatt hour, for instance, we'd be
    • 00:09:33
      saving a customer $144,000 on their bills. So,
    • 00:09:38
      5,000 when there's outage, 144,000 just based on
    • 00:09:42
      the economics of how to save money on
    • 00:09:45
      when you own these microgrids. So, it would
    • 00:09:48
      make incredible sense to allow customers to do
    • 00:09:52
      that, particularly in the face of load growth
    • 00:09:54
      that's anticipated to grow from 90 gigawatts to
    • 00:09:57
      140 gigawatts over the next four years. We
    • 00:10:00
      can only imagine the kind of dangers that
    • 00:10:02
      will bring to customers, particularly those like critical
    • 00:10:07
      facilities. So, thank you very much. Thank you.
    • Item 3.1.1 - Alison Silverstein, Independent consultant
      00:10:12
      Hi. My name is Alison Silverstein. I'm an
    • 00:10:14
      independent consultant. I work with Senator Johnson designing
    • 00:10:17
      and writing the statute. There are a number
    • 00:10:21
      of flaws in the Patrick Engineering report. The
    • 00:10:25
      first one goes to the cost estimates themselves.
    • 00:10:28
      There is no explanation of where those cost
    • 00:10:32
      estimates came from. There is no clarification with
    • 00:10:35
      respect to so there's no clarification with respect
    • 00:10:39
      to what package sizes the component costs were
    • 00:10:45
      based on, because the initial they started collecting
    • 00:10:50
      the cost data in October, and yet we
    • 00:10:54
      don't know when they actually got and they
    • 00:10:57
      had very different cost number package sizes in
    • 00:11:01
      the initial report than they came out with
    • 00:11:03
      in the final, although they did not explain
    • 00:11:05
      their work on what the final package sizes
    • 00:11:08
      were based on. Happily, those package sizes comport
    • 00:11:11
      with a recommendation on most of the sizes
    • 00:11:15
      that I and, Taba offered, but we showed
    • 00:11:19
      our work at least. They have more data
    • 00:11:21
      than we do, and we don't know what
    • 00:11:23
      was the basis for how they designed package
    • 00:11:26
      sizes. Getting back to the cost estimates themselves,
    • 00:11:29
      we don't know not only the component sizes
    • 00:11:31
      that they asked about, we don't know who
    • 00:11:36
      they asked and when they asked it. For
    • 00:11:38
      instance, some of the companies in this room
    • 00:11:41
      did not receive a request for component costs
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      or for package costs until the week before
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      the report was submitted. And we don't know
    • 00:11:49
      whether they were asking for cost estimates on
    • 00:11:54
      a component by component basis, if you buy
    • 00:11:57
      one or if you buy a hundred. So
    • 00:11:59
      so there is no way to tell whether
    • 00:12:01
      their cost estimates are legit. And the cost
    • 00:12:04
      estimates and they're also based on flawed assumptions
    • 00:12:07
      with respect to the packages and their operating
    • 00:12:11
      scenarios. The flaws with respect to the operation
    • 00:12:17
      and design of these packages, the foremost important
    • 00:12:20
      are the following: first off, they assume that
    • 00:12:24
      there must be instantaneous islanding and switch over
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      into operation. That means that they require grossly
    • 00:12:31
      oversized batteries. They require a significantly higher set
    • 00:12:36
      of PV in order to feed the grossly
    • 00:12:39
      oversized battery, and it means that there is
    • 00:12:42
      a more expensive transfer switch. If you, instead
    • 00:12:45
      of assuming instantaneous islanding, assume that you can
    • 00:12:49
      have a one or two or five or
    • 00:12:51
      ten second switch over, as is what happens
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      with most of the back generator gensets that
    • 00:12:58
      are in operation day for backup power, that
    • 00:13:01
      would significantly reduce operational costs. And for it
    • 00:13:06
      would reduce the package cost because the entire
    • 00:13:08
      set of components would be less expensive. Second,
    • 00:13:11
      they assume that there's something called storm anticipation.
    • 00:13:14
      There's nothing for that in the statute. We
    • 00:13:16
      don't know what that means. We don't know
    • 00:13:18
      what it requires. Third, you cannot limit. There
    • 00:13:21
      is nothing in the statute that says they
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      can only operate during grid failure or storm
    • 00:13:26
      anticipation, whatever that is. In fact, there it
    • 00:13:30
      should be entirely possible for these backup power
    • 00:13:35
      packages to operate behind the meter to provide
    • 00:13:39
      relief, such as what, my colleague Mr. Kaufman
    • 00:13:42
      talked about. They could be doing this to
    • 00:13:45
      lower their operational costs, their power bills, and
    • 00:13:51
      any number of other things. So, And they
    • 00:13:53
      could also be potentially aggregated by a third
    • 00:13:57
      party aggregator by doing without ever doing injection
    • 00:14:01
      into the grid, they could be lowering their
    • 00:14:03
      operation and going on to the backup power
    • 00:14:06
      for a very limited period of time. And
    • 00:14:10
      then, there is a requirement for roof mounted
    • 00:14:12
      photovoltaics, which seems unnecessary and unjustified. So those
    • 00:14:17
      are what I wanted to say with respect
    • 00:14:20
      to costs. Thank you. Hi. Good afternoon. Ned
    • Item 3.1.1 - Ned Bonskowski, Vistra
      00:14:26
      Bonskowski with Vistra. I I do want to,
    • 00:14:30
      offer some comments that respectfully disagree with, what,
    • 00:14:33
      my colleague from, Mainspring offered, and and ask
    • 00:14:38
      that the commission be mindful in establishing the
    • 00:14:42
      requirements around the Texas backup power package, non
    • 00:14:45
      backup use cases, in order to coordinate policies
    • 00:14:49
      more broadly and holistically across the commission that
    • 00:14:52
      aligns with the state's interests. The state's priorities
    • 00:14:56
      are have have been pretty clearly set as
    • 00:14:58
      investment in generation resources on the bulk power
    • 00:15:01
      system, which I think is demonstrated by the
    • 00:15:03
      the majority of the the funding allocation within
    • 00:15:06
      the Texas Energy Fund. And so the backup
    • 00:15:10
      power package used outside of those backup kit
    • 00:15:13
      use cases, that's necessarily going to interfere with
    • 00:15:17
      market operations and market price formation, which those
    • 00:15:20
      bulk power system resources rely on in order
    • 00:15:23
      to make their investment case. And so there's
    • 00:15:26
      a natural tension between those two objectives. And
    • 00:15:30
      so I think in order to meet both,
    • 00:15:32
      the commission would be wise to, to make
    • 00:15:35
      sure that they don't work at odds with
    • 00:15:37
      with each other. So nothing prevents customers from
    • 00:15:44
      engaging with, providers of backup power packages for
    • 00:15:47
      commercial uses. That's that's, I think, fairly well
    • 00:15:50
      established. And so, you know, the value opportunity
    • 00:15:52
      there is, you know, as as you heard
    • 00:15:54
      from my colleague, can can work out quite
    • 00:15:57
      significantly. But when we're talking about state subsidized,
    • 00:16:00
      assets and their utilization in a way that
    • 00:16:03
      might run counter to other state priorities, I
    • 00:16:05
      wanted to flag that for the commission's consideration.
    • 00:16:08
      You. You. It's our All right. Joel Yu
    • Item 3.1.1 - Joel Yu, Enchanted Rock
      00:16:15
      with Enchanted Rock. I'd like to offer support
    • 00:16:19
      for comments by Mainspring and by Allison on
    • 00:16:23
      need for flexibility in sizing packages for customer
    • 00:16:31
      needs, being in the business of resiliency microgrids.
    • 00:16:35
      A customer can come with or customers can
    • 00:16:38
      come with very different needs. If they have
    • 00:16:42
      five 9s of availability as a requirement, they
    • 00:16:45
      may require additional redundant assets on-site to account
    • 00:16:49
      for failure. So you may oversize a package.
    • 00:16:52
      You may have customers who can tolerate some
    • 00:16:55
      small amount of interruption before they need the
    • 00:16:58
      backup power to kick in, that can create
    • 00:17:00
      flexibility. There there needs to be room there,
    • 00:17:03
      versus having an overspecified package. The use of
    • 00:17:10
      the backup power packages for non outage use
    • 00:17:16
      cases, we think, is critically important for the
    • 00:17:20
      program to succeed. When we talk about cost
    • 00:17:22
      savings, effectiveness and affordability, the benchmark is really
    • 00:17:27
      what are the available solutions for backup power
    • 00:17:30
      on the market today and why have some
    • 00:17:33
      of these critical facilities not deployed those solutions.
    • 00:17:36
      It's because they're too expensive or too difficult.
    • 00:17:40
      The backup power incentive needs to get the
    • 00:17:44
      net cost of the solution below the cost
    • 00:17:47
      of existing solutions on the market in order
    • 00:17:50
      for this program to succeed with critical facilities.
    • 00:17:54
      With the cap on the incentive being $500
    • 00:17:57
      per KW, it's clear that based on the
    • 00:18:02
      cost estimates from the Patrick Engineering report, we
    • 00:18:06
      can speak for Enchanted Rock on with respect
    • 00:18:09
      to the larger end of the scale, 500
    • 00:18:11
      kW and up. The cost estimates are not
    • 00:18:14
      that far off. With $500 per kW, we
    • 00:18:18
      do not beat the cost of solutions that
    • 00:18:22
      are on the market today without behind the
    • 00:18:25
      meter services. I think we recognize Vishra's concerns
    • 00:18:31
      about the market and the price signals that
    • 00:18:36
      are delivered to merchant generators. And part of
    • 00:18:40
      the business model for microgrids like our own
    • 00:18:43
      is to take on market risk, and so
    • 00:18:45
      we're sensitive to that as well. But I
    • 00:18:48
      think we have parallel discussions about market reform
    • 00:18:54
      that we need to address seriously to send
    • 00:18:57
      those right signals. But with respect to this
    • 00:18:59
      program and protecting critical facilities, it's an urgent
    • 00:19:02
      need today, and every month we wait to
    • 00:19:06
      deploy the program is another extreme weather event
    • 00:19:12
      that we may not be able to cover
    • 00:19:14
      in the next twelve, twenty four months, however
    • 00:19:17
      long it takes to deploy projects. So I
    • 00:19:21
      think we'd like to see this move forward
    • 00:19:23
      quickly and expeditiously, but we're sensitive to vicious
    • 00:19:28
      comments and would like to work together on
    • 00:19:31
      broader solutions. We just think when the state
    • 00:19:34
      needs every megawatt and wants to protect critical
    • 00:19:36
      facilities, it's important to make the program work
    • 00:19:39
      today. Thank you. Thank you. Hi. Good afternoon.
    • Item 3.1.1 - Matthew Boms, TABA
      00:19:43
      Matt Boms from TABA, Texas Advanced Energy Business
    • 00:19:46
      Alliance. Agreeing with most of my colleagues that
    • 00:19:50
      previously spoke, I want to speak quickly to
    • 00:19:52
      the importance of this program. I serve on
    • 00:19:54
      the advisory committee with Alison Silverstein and want
    • 00:19:57
      to thank her and the rest of the
    • 00:19:58
      committee members for their hard work on this
    • 00:19:59
      program. We'll get to the answers to some
    • 00:20:02
      of these questions, I think, part C when
    • 00:20:04
      we talk about alternative ownership models. I don't
    • 00:20:06
      want to skip ahead there. I did want
    • 00:20:08
      to mention that respectfully. I do disagree with
    • 00:20:10
      my colleague from Bistra as far as what
    • 00:20:12
      the state's priorities are. The number one priority
    • 00:20:14
      for our state should be protecting our vulnerable
    • 00:20:16
      populations. And that's what this program does. So
    • 00:20:18
      I think the legislature sent a pretty clear
    • 00:20:20
      mandate to the Public Utility Commission by passing
    • 00:20:22
      this into law. And signaling that what happened
    • 00:20:24
      during winter storm Uri and similar events is
    • 00:20:26
      unacceptable, and we have to protect those populations.
    • 00:20:29
      That's exactly what this program does. As far
    • 00:20:32
      as how it helps on the demand side
    • 00:20:33
      of things, we're entering a period of load
    • 00:20:35
      growth, and I think that's pretty much what
    • 00:20:37
      everyone is talking about these days. Rightfully so,
    • 00:20:39
      because we're going need every megawatt we can
    • 00:20:41
      get moving forward into this new era of
    • 00:20:42
      load growth. So this is going to be
    • 00:20:44
      a really important program knowing that ERCOT has
    • 00:20:48
      a set of critical facilities that can island
    • 00:20:50
      and already have their backup power is going
    • 00:20:52
      to be fundamental moving forward to protect our
    • 00:20:54
      grid. So I'll leave it there. Know we
    • 00:20:56
      got plenty of plenty of questions to get
    • 00:20:57
      through, but thanks so much for holding this
    • 00:20:59
      workshop. Thank you. May I offer one additional
    • 00:21:04
      comment? Yes. Thank you. One of the most
    • Item 3.1.1 - Alison Silverstein, Independent consultant
      00:21:07
      this is Allison Silverstein. One of the most
    • 00:21:10
      important opportunities that we can use for with
    • 00:21:14
      the an installed fleet of Texas backup power
    • 00:21:17
      packages at critical facilities goes straight to the
    • 00:21:20
      issue of behind the meter operation and the
    • 00:21:22
      need for more capacity in the event of
    • 00:21:27
      emergencies. Very specifically, we need to be able
    • 00:21:32
      to have ERCOT when when we are in
    • 00:21:35
      an EA one situation facing EA two because
    • 00:21:40
      we don't have enough supply side resources. We
    • 00:21:43
      need ERCOT to be able to pick up
    • 00:21:44
      the bat phone and call out the TBPP
    • 00:21:48
      fleet of critical facilities and ask them to
    • 00:21:50
      go into islanded mode and operate using their
    • 00:21:54
      backup facilities that could get us an extra
    • 00:21:57
      gigawatt of power at the time when we
    • 00:21:58
      most need it. Having spent a few decades
    • 00:22:02
      working on market design, I am sympathetic to
    • 00:22:04
      Vistra's concerns about the importance of price signals
    • 00:22:11
      and price formation. I will point out, however,
    • 00:22:14
      that when you and your colleagues are asking
    • 00:22:19
      the state for subsidized big gas plants that
    • 00:22:26
      will affect price formation. It's a little hypocritical
    • 00:22:29
      to go complaining about a set of small
    • 00:22:33
      resources that aren't going to take away your
    • 00:22:37
      price formation or your profits in probably five
    • 00:22:43
      thousand eight hundred hours of the year or
    • 00:22:46
      more, with luck we will only have to
    • 00:22:49
      use this kind of backup power for a
    • 00:22:51
      couple hours. And they will these guys are
    • 00:22:53
      not allowed to inject into the grid. And
    • 00:22:56
      most of them are never gonna turn these
    • 00:22:58
      on for any purpose other than protecting their
    • 00:23:01
      own facilities when they need to do so
    • 00:23:03
      or occasionally to protect themselves from very high
    • 00:23:07
      prices. So we cannot have any kind of
    • 00:23:12
      restrictions that say you can only use this
    • 00:23:15
      in the event of grid failure. And if
    • 00:23:17
      we get to the point where we're entering
    • 00:23:19
      EEA2, being able to call these prices are
    • 00:23:22
      already screwed up in the market and having
    • 00:23:24
      one megawatt of backup relief isn't going to
    • 00:23:28
      change prices in a significant way. Thank you.
    • Item 3.1.1 - Zach Stephenson, TEC
      00:23:31
      Hi. Zach Stephenson, Texas Electric Cooperatives. We share
    • 00:23:36
      Vistra's concerns with the ability to sell, into
    • 00:23:41
      the market and that potential to kinda distort
    • 00:23:43
      those market signals, coming from subsidized generation resources.
    • 00:23:48
      We also are, concerned with how these facilities
    • 00:23:52
      would operate in NOE areas if you allow
    • 00:23:54
      them to, sell into the market in such
    • 00:23:57
      a way because the NOE service territories are
    • 00:24:00
      vertically integrated territories. And so that would need
    • 00:24:03
      to be considered if we do allow that.
    • Item 3.1.1 - Ned Bonskowski, Vistra
      00:24:06
      You. Thanks. Ned Bonskowski again. Called back up
    • 00:24:12
      in response to some of the comments from
    • 00:24:13
      my colleagues. I I do want to to
    • 00:24:16
      appreciate the difference between emergency operations and, you
    • 00:24:20
      know, regular economic operations, and so I wanted
    • 00:24:23
      to call that out. And in the comments
    • 00:24:25
      that we filed, we did, make a distinction
    • 00:24:27
      between that. You know, if you are going
    • 00:24:29
      to allow utilization outside of a grid failure,
    • 00:24:32
      then that is where having ERCOT coordinating that
    • 00:24:36
      activity as miss Silverstein referred to is actually
    • 00:24:39
      very critical. And that way, you can address
    • 00:24:41
      the price formation impacts and and manage to
    • 00:24:44
      both support reliability while at the same time
    • 00:24:47
      not undermining the market structure that we have
    • 00:24:53
      for ERCOT. So I wanted to highlight that
    • 00:24:56
      difference and also the difference between that use
    • 00:25:01
      case versus the economics. That really is where
    • 00:25:05
      you're supporting both reliability and resiliency at these
    • 00:25:08
      facilities, whereas economic uses that that does have
    • 00:25:12
      a direct conflict, and that that's really the
    • 00:25:13
      more of the spirit of my original comments.
    • Item 3.1.1 - Mandy Kimbrough, NRG
      00:25:15
      Thank you. Thank you. Hi. Mandy Kimbrough, representing
    • 00:25:20
      NRG. Just wanted to respond to a couple
    • 00:25:23
      of points on the issues that Vistra was
    • 00:25:26
      raising. In our view, this particular we agree
    • 00:25:30
      with the other commenters that this particular program
    • 00:25:32
      is intended to benefit these critical loads that
    • 00:25:34
      provide a public safety or health benefit and
    • 00:25:37
      allowing them to use the backup power packages
    • 00:25:41
      outside of emergency conditions enables them to get
    • 00:25:44
      more you know, a higher value out of
    • 00:25:46
      the packages and puts the taxpayer dollars to
    • 00:25:51
      better use if they're able to use them
    • 00:25:53
      outside of just, you know, the hopefully very
    • 00:25:56
      rare times that they would actually be have
    • 00:25:57
      to be disconnected from the grid and using
    • 00:25:59
      them in an emergency. We think that can
    • 00:26:02
      be done consistently with the statute, which just
    • 00:26:04
      requires that they not sell electricity into the
    • 00:26:07
      market for energy or ancillary services and that
    • 00:26:09
      they be able to immediately island. Disagree with
    • 00:26:14
      the characterization, by the gentleman representing the electric
    • 00:26:17
      cooperatives that their use in that circumstance outside
    • 00:26:20
      of emergency would be a sale into the
    • 00:26:23
      market that would just offset their consumption from
    • 00:26:25
      the grid. So it would just lower their
    • 00:26:27
      bill from, you know, their retail provider, whoever
    • 00:26:30
      that is, whether it's a co op and
    • 00:26:31
      if they're in a co op area or
    • 00:26:33
      a retail electric provider if they're in a
    • 00:26:35
      competitive territory. That's all. Thanks. Thank you. Thank
    • 00:26:44
      you. Are there any, remaining comments on question
    • Item 3.1.1 - Brian Kauffman, Maine Spring Energy
      00:26:47
      a? Brian Kaufman again with Maine Spring Energy.
    • 00:27:01
      I really appreciate the conversations here. I think
    • 00:27:05
      there is some respectful disagreement still with my
    • 00:27:08
      colleague from Vistra. Think the point about ERCOT
    • 00:27:11
      is interesting and certainly I think we're big
    • 00:27:14
      advocates of grid services and participating through markets
    • 00:27:17
      where feasible. When it comes to reductions of
    • 00:27:21
      load, as my colleague Alison Silverstein mentioned, if
    • 00:27:26
      it was in terms of a service who
    • 00:27:28
      was delivering like a demand response service, I
    • 00:27:31
      could see that making sense. But if you're
    • 00:27:34
      participating through the grid just to modulate your
    • 00:27:36
      own demand from the grid, that's what we
    • 00:27:39
      all do every day. And it's hard to
    • 00:27:40
      imagine how that could be done efficiently, particularly
    • 00:27:44
      with a customer, say it's a hundred kilowatt
    • 00:27:47
      customer, through ERCOT. So, I think it's an
    • 00:27:51
      interesting concept and we definitely agree that price
    • 00:27:54
      formation is critical. When there's not enough generation
    • 00:27:58
      to serve load, there is the price formation
    • 00:28:01
      leads towards extremely high prices. And clearly, it's
    • 00:28:09
      an important signal to generation to be available.
    • 00:28:12
      But likewise customers should have the ability to
    • 00:28:17
      decide to use power how they want. And
    • 00:28:21
      think it's an interesting idea that maybe should
    • 00:28:23
      be explored in future phases of this program,
    • 00:28:26
      but while we're trying to really just get
    • 00:28:28
      a project program off the ground, we have
    • 00:28:30
      to think about how to prioritize. And as
    • 00:28:34
      was said before, this program in total could
    • 00:28:36
      be say a gigawatt of customer demand, which
    • 00:28:40
      is relatively small when you compare it to
    • 00:28:42
      the 140 gigawatts of load that are anticipated
    • 00:28:45
      by the end of this decade. So I'll
    • 00:28:49
      just stop there and appreciate the conversation. Thank
    • 00:28:53
      you. Are there any remaining questions on question
    • 00:28:57
      a? Remember, we will not return to the
    • 00:29:01
      question for live comment, once we've moved on
    • 00:29:03
      from the question, you are encouraged. Oh, here
    • Item 3.1.1 - Allison Silverstein - independent consultant
      00:29:06
      we go. Allison Silverstein, yet again. Thank you.
    • 00:29:17
      This question asks about effectiveness for Texas Back
    • 00:29:20
      Up Power projects. It is very important for
    • 00:29:23
      us to recognize that the point of setting
    • 00:29:26
      up this program is not merely to give
    • 00:29:29
      critical facilities backup power, although that is essential.
    • 00:29:33
      The other thing that this is intended to
    • 00:29:36
      do is to prevent another recurrence of a
    • 00:29:38
      winter storm URI condition when millions of Texans
    • 00:29:45
      sat in the dark for multiple days at
    • 00:29:47
      a time because the utilities were unable to
    • 00:29:49
      rotate loads and manage outages by rotating so
    • 00:29:53
      that every set of customers was outage for
    • 00:29:56
      a limited number of hours at a time.
    • 00:29:59
      The reason that we want tech critical facilities
    • 00:30:03
      to have backup power packages of this nature
    • 00:30:06
      is so that critical facilities can act like
    • 00:30:09
      they're critical and they can stand on their
    • 00:30:11
      own, which means that the utility is no
    • 00:30:14
      longer limited by the existence of a backup
    • 00:30:19
      of a critical facility and cannot island cannot
    • 00:30:24
      outage the feeder that the facility is sitting
    • 00:30:26
      on. So the when we talk about effectiveness
    • 00:30:30
      of this program, part of that effectiveness is
    • 00:30:33
      to be able to to enable the utilities
    • 00:30:36
      who have reported that 90 of Texas distribution
    • 00:30:40
      feeders have a critical facility on them. To
    • 00:30:43
      enable the utilities to do better outage management
    • 00:30:46
      and more equitable outage management that doesn't leave
    • 00:30:49
      a bunch of people sitting in the dark
    • 00:30:52
      for three or four days straight. So we
    • 00:30:56
      cannot ignore the effect of in discussing effectiveness.
    • 00:31:00
      We must pay attention to the importance of
    • 00:31:03
      getting these out so that the utilities can
    • 00:31:06
      do a better job of managing feeders to
    • 00:31:08
      protect the rest of us from being outaged
    • 00:31:11
      for extended periods of time. Thank you. Thank
    • 00:31:15
      you. Are there any remaining comments? Hello, everyone.
    • 00:31:25
      Yeah. Lori Hobbs here. We just wanted to,
    • 00:31:29
      just make a little note so we can
    • 00:31:30
      be sure to have enough time for everyone
    • 00:31:32
      to comment on all the various questions. So
    • 00:31:35
      so perhaps, kind of with the rebuttals, we
    • 00:31:38
      appreciate the the lively discussion, but, we may
    • 00:31:41
      try to keep those to a minimum. And
    • 00:31:43
      if you have sort of additional comments to
    • 00:31:46
      offer, after, we may allow, like, one follow-up
    • 00:31:50
      or something, but, maybe you can offer those
    • 00:31:52
      in writing on the on the interchange. And
    • 00:31:56
      what's that project number again? Five seven two
    • 00:31:58
      three six. So, yeah, we just wanna make
    • 00:32:01
      sure we can we can kind of get
    • 00:32:03
      a more comprehensive, feedback on all the questions.
    • 00:32:07
      So we appreciate it. Thank you, Laurie. Thanks
    • 00:32:09
      so much. Now you may come up to
    • 00:32:13
      the table if you would like to comment
    • 00:32:14
      on our second question of this topic. Question
    • 00:32:17
      B. How can features of a TBPP provide
    • 00:32:20
      added value for critical facilities compared to purchasing
    • 00:32:23
      and installing a generator set? How can this
    • 00:32:27
      value be quantified relative to the cost of
    • 00:32:29
      additional CVPP features? I'm to comment. Joel Yu
    • Item 3.1.2 - Joel Yu, Enchanted Rock
      00:32:46
      with Enchanted Rock again. Brief thought on this.
    • 00:32:50
      I wasn't completely sure how to understand the
    • 00:32:55
      question. I guess, kind of as a segue
    • 00:33:00
      it seems like it could be a segue
    • 00:33:02
      to the second or third question, so I
    • 00:33:04
      don't want to get ahead of the discussion.
    • 00:33:07
      Would you be able to provide a little
    • 00:33:09
      bit of clarification? Yes. So what are the
    • 00:33:12
      benefits of a TBPP versus a regular generator?
    • 00:33:16
      How would you quantify the value and the
    • 00:33:18
      difference between the two? Okay. I guess from
    • 00:33:24
      a technical standpoint, like the the hybrid deployment,
    • 00:33:31
      you know, depending on what criteria the commission
    • 00:33:34
      sets besides the forty eight hour duration requirement
    • 00:33:38
      in terms of performance from the TBPP will
    • 00:33:42
      really dictate that. I guess, our perspective, and
    • 00:33:48
      this is where we kind of get into
    • 00:33:50
      the as a service model, as an alternative
    • 00:33:54
      structure, the customers, the critical facilities that we've
    • 00:33:59
      worked with that have historically bought backup power
    • 00:34:04
      equipment and then taken over O and M
    • 00:34:07
      for themselves. There are challenges with that, expertise
    • 00:34:12
      challenges, efficiencies that are lost when they're managing
    • 00:34:17
      their own asset versus having a standardized unit
    • 00:34:21
      that a third party has expertise, spare parts,
    • 00:34:25
      capability to address O and M issues quickly.
    • 00:34:31
      That appears in the form of, increased availability
    • 00:34:36
      from something like a TBPP if it's backed
    • 00:34:41
      by a long term, O and M, agreement.
    • 00:34:47
      The I guess there's a tie in also
    • 00:34:50
      with the behind the meter services where, at
    • 00:34:55
      least in our case, running gas generators, the
    • 00:35:00
      non outage run hours end up serving as
    • 00:35:04
      exercise for the units to ensure operational availability
    • 00:35:08
      during an outage. There are cases where backup
    • 00:35:12
      generators are sold and deployed and they do
    • 00:35:16
      sometimes go through testing procedures. Sometimes those testing
    • 00:35:21
      procedures are not kept up with. And when
    • 00:35:23
      you need them for an outage, they're not
    • 00:35:25
      ready. So there is some value there as
    • 00:35:28
      well. That is quantified through whatever offsetting revenues
    • 00:35:34
      we're able to generate from load management and,
    • 00:35:38
      in our case, participation in emergency response service
    • 00:35:41
      at ERCOT. Not ready to change seats yet.
    • Item 3.1.2 - Brian Kaufman, Mainspring Energy
      00:35:54
      Brian Kaufman with MainSpring. I agree with basically
    • 00:35:58
      everything Joel just said and I think hopefully
    • 00:36:02
      my comments prior helped tee up that additional
    • 00:36:05
      features element. So, gensets are only running during
    • 00:36:10
      emergency uses. They're only permitted for that. They
    • 00:36:14
      have higher emissions. The features of a TBPP
    • 00:36:20
      should enable the units to run more hours
    • 00:36:22
      by offsetting some of that upfront CapEx that's
    • 00:36:26
      higher than a low cost backup like, diesel
    • 00:36:31
      gen set. So, for instance, our and so
    • 00:36:35
      that's really you really need a more efficient
    • 00:36:38
      and lower emission resource that can run more
    • 00:36:41
      hours to add more value. And that's where
    • 00:36:45
      the example I offered of we've done the
    • 00:36:48
      back of the envelope math, we could run
    • 00:36:51
      several hundreds, if not a thousand hours a
    • 00:36:54
      year offsetting costs, assuming a customer is on
    • 00:36:57
      an index rate where they're paying, they're seeing
    • 00:37:00
      the wholesale cost of energy, OMP, they would
    • 00:37:03
      save about $140,000 off their bill per megawatt.
    • 00:37:09
      And in contrast, the value of lost load
    • 00:37:13
      according to ERCOT, dollars thirty five thousand per
    • 00:37:17
      megawatt hour. So there's roughly four times the
    • 00:37:21
      benefit that is added if this is a
    • 00:37:26
      real if if the performance features of the
    • 00:37:28
      BBB include the ability to run economically and
    • 00:37:35
      also that are designed to ensure that it
    • 00:37:39
      can get those permits to run more frequently.
    • 00:37:44
      And also to Joel's point, I had this
    • 00:37:47
      prepared and he said it better than I
    • 00:37:49
      could, but maintenance on these units is important,
    • 00:37:54
      but is not is a minimum standard. A
    • 00:37:56
      lot of the problems that you see with
    • 00:37:58
      generators that run only once or twice a
    • 00:38:00
      year, they're not actually available when they're most
    • 00:38:02
      needed. And so if the unit is running
    • 00:38:06
      economically and putting in hundreds, thousands of hours
    • 00:38:11
      a year, it's going to be ready and
    • 00:38:14
      you won't have the case where now you
    • 00:38:16
      really needed this product that you invested all
    • 00:38:18
      this money in but it's not going to
    • 00:38:20
      be operating. Obviously there's also an environmental aspect.
    • 00:38:26
      I mean the law requires PV and so
    • 00:38:29
      if you're only running emergency essentially you'd be
    • 00:38:32
      forcing that PV to be off the entire
    • 00:38:35
      year. It's just sitting there even though the
    • 00:38:37
      operational cost for PV is basically zero. And
    • 00:38:42
      so you're obviously getting some environmental value of
    • 00:38:45
      having a backup power package. So you have
    • 00:38:49
      the value of the solar, which should reduce
    • 00:38:52
      the overall emissions factor of the microgrid, and
    • 00:38:55
      then you also have if the performance sets
    • 00:38:58
      a standard for criteria pollutants and others, have
    • 00:39:01
      better environmental footprint than you'd see from a
    • 00:39:05
      traditional genset. Matt Baums, TEBA. I agree with Brian,
    • Item 3.1.2 - Matt Baums, TEBA
      00:39:10
      I agree with Joel. Just to add some
    • 00:39:12
      more color here, I would say that, we
    • 00:39:14
      have member companies across the whole range of
    • 00:39:17
      technologies that are covered in the Texas Backup
    • 00:39:19
      Power Program. And that's where the real value
    • 00:39:22
      comes from is the diversity of technologies within
    • 00:39:24
      the backup power packages. So we've had issues
    • 00:39:27
      with gas supply in the past during these
    • 00:39:29
      winter storms. What the backup power packages do
    • 00:39:33
      is guarantee because you've got the mix of
    • 00:39:35
      generator, solar and batteries. Just makes them more
    • 00:39:39
      reliable because it means whatever kind of storm
    • 00:39:42
      we're going through, whatever the conditions are, these
    • 00:39:44
      critical facilities will be able to rely on
    • 00:39:46
      those technologies. And let's not forget the electric
    • 00:39:49
      school bus portion of the backup power packages,
    • 00:39:52
      which also allows for school buses to discharge
    • 00:39:55
      if the if that critical facility needs it,
    • 00:39:57
      during a grid emergency. Thank you. Allison Silverstein.
    • Item 3.1.2 - Alison Silverstein, Independent consultant
      00:40:04
      The feature the TBPP was designed as a
    • 00:40:09
      compound or hybrid supply source specifically because and
    • 00:40:16
      and that it had to run for forty
    • 00:40:18
      eight hours specifically because Texas is ground zero
    • 00:40:21
      for extreme weather events, hurricanes, floods, wildfires, etcetera.
    • 00:40:27
      And, we are also appear to be ground
    • 00:40:31
      zero for drunks in cars who hit power
    • 00:40:34
      poles or attack transmission lines and and for
    • 00:40:38
      people with guns who like to shoot at
    • 00:40:40
      stuff, like electrical equipment. A lot of the
    • 00:40:43
      critical 31,000 plus critical facilities in Texas are
    • 00:40:48
      very small, and they are in rural parts
    • 00:40:51
      of the state where it is difficult to
    • 00:40:53
      get restoration service and where a small facility
    • 00:40:56
      is rarely going to be the first priority
    • 00:40:59
      for restoration services compared to critical facilities in
    • 00:41:03
      urban areas. Therefore, we needed to be sure
    • 00:41:07
      that by having battery and PV to supplement
    • 00:41:12
      the fuel source, assuming and and by the
    • 00:41:15
      way, not all of, not all parts of
    • 00:41:17
      Texas have gas service like the areas that
    • 00:41:21
      that Enchanted Rock serves. And that was why
    • 00:41:25
      we we included the definition that it had
    • 00:41:27
      to run for forty eight hours without refueling
    • 00:41:30
      so that these small facilities in the middle
    • 00:41:33
      of nowhere could make it through many of
    • 00:41:37
      the threats that they face long enough to
    • 00:41:41
      get help in a in a situation where
    • 00:41:44
      there's a lot of people and a lot
    • 00:41:45
      of facilities who need help. So the whole
    • 00:41:48
      point of the compounding was when you have
    • 00:41:52
      entire communities and human health and safety depending
    • 00:41:56
      on these small facilities, they would be able
    • 00:42:00
      to have enough power to stand for two
    • 00:42:04
      days before they needed to be rescued. Two
    • 00:42:07
      days may not be long enough, but it's
    • 00:42:09
      a pretty long time compared to a lot
    • 00:42:11
      of what happens in Texas. So that is
    • 00:42:13
      the rationale for why the features of the
    • 00:42:16
      TBPP provide added value compared to a genset
    • Item 3.1.2 - Ned Bonskowski, Vistra
      00:42:21
      alone. Thank you. You. Ned Bonskowski, Vistra again.
    • 00:42:26
      I actually really appreciate the comments that Ms.
    • 00:42:28
      Silverstein just made, which I think highlights that
    • 00:42:31
      there are multiple value streams for backup power
    • 00:42:35
      packages beyond the economic utilization that some of
    • 00:42:39
      my colleagues have been advocating for here this
    • 00:42:43
      afternoon. So I wanted to highlight that and
    • 00:42:46
      then also, you know, just to come back
    • 00:42:48
      to this point, I'll be as judicious as
    • 00:42:51
      I can in making this. You know, to
    • 00:42:54
      the extent that there are tensions between the
    • 00:42:56
      economic utilization and the incentives for, bulk power
    • 00:43:01
      system, electric generation facilities, the more that you
    • 00:43:05
      utilize a that utilize backup generation in an
    • 00:43:09
      economic sense, that can create a spiral where
    • 00:43:13
      then you have to rely on it more
    • 00:43:14
      frequently because it undermines investment incentives for for
    • 00:43:19
      large scale generation, all else equal, in the
    • 00:43:22
      current market structure. And I know my colleague
    • 00:43:24
      from Enchanted Rock made a comment that there
    • 00:43:27
      are parallel paths for that and we certainly
    • 00:43:29
      support those paths and would like to see
    • 00:43:33
      market design changes that are supportive of that
    • 00:43:36
      outcome. But we don't have those currently. And
    • 00:43:40
      so we have to think about the market
    • 00:43:42
      as it exists today. And so that's the
    • 00:43:45
      basis for those comments. Thank you. Thank you.
    • 00:43:51
      Are there any remaining questions on question b?
    • 00:43:58
      Alright. Moving on, we are now going to
    • 00:44:01
      this third topic. The third question in this
    • 00:44:05
      topic, question c. How can contracts for alternative
    • 00:44:08
      ownership models and financing mechanisms be structured to
    • 00:44:12
      comply with statutory requirements? If these models and
    • 00:44:15
      mechanisms are considered, what metrics could be effective
    • 00:44:19
      effectively measured, measure value, performance, and compliance for
    • Item 3.1.3 - Zach Stephenson, Texas Electric Cooperatives
      00:44:24
      (item:3.1.3:Zach Stephenson - Texas Electric Cooperatives) the TPPP program? Hi. Zach Stephenson with Texas
    • 00:44:28
      Electric Cooperatives. Just a general comment on the,
    • 00:44:32
      ownership model. Specific to NOE territories because we
    • 00:44:35
      are the exclusive providers in our service territories,
    • 00:44:40
      in our in our framework, it would need
    • 00:44:45
      to either be member owned, so it have
    • 00:44:47
      to be owned by the facility itself, or
    • 00:44:50
      it would need to be contracted and negotiated
    • 00:44:53
      with the NOE involved in the process. Thank
    • Item 3.1.3 - Joel Yu, Enchanted Rock
      00:44:58
      (item:3.1.3:Joel Yu from Enchanted Rock) you. Joel Yu from Enchanted Rock. On alternative
    • 00:45:16
      ownership models, third party ownership models, including resilience
    • 00:45:24
      as a service type models, can be very
    • 00:45:27
      attractive for critical facilities because it takes capital
    • 00:45:33
      burden off of them and ensures long term
    • 00:45:37
      system performance through a long term O and
    • 00:45:40
      M agreement. In terms of metrics, I guess
    • 00:45:45
      we have the forty eight hour duration requirement
    • 00:45:48
      for the package and, you know, some type
    • 00:45:51
      of performance against actual outages, performance metric against
    • 00:45:56
      actual outages is probably important or track to
    • 00:46:02
      to look at how these packages are performing
    • 00:46:04
      but you know, coinciding with this idea that
    • 00:46:09
      we are looking to provide additional emergency services
    • 00:46:14
      for the grid. We see the ERS model
    • 00:46:18
      for a minimum availability metric as a helpful
    • 00:46:23
      performance metric for backup power packages. That ensures
    • 00:46:30
      that resources that are committing to be there
    • 00:46:32
      and perform during outages and emergencies do appear
    • 00:46:38
      and you know, 95% availability is significantly higher
    • 00:46:43
      than forced outage rates that you see from
    • 00:46:46
      traditional grid resources. So it's pretty stringent and
    • 00:46:51
      I think very workable because the I guess
    • 00:46:56
      backup power coverage that a customer is looking
    • 00:46:58
      for is coming from a combination of the
    • 00:47:04
      service they're receiving from the utility on the
    • 00:47:06
      grid plus the backup power package. So in
    • 00:47:10
      our business case, a gas generator with electric
    • 00:47:14
      utility service, we can get to five nines
    • 00:47:18
      of reliability. So 99.999% availability for a customer.
    • 00:47:24
      And that's with the generators taking their maintenance
    • 00:47:28
      outages and rolling on and off as needed.
    • 00:47:32
      It's the hybrid availability of the grid plus
    • 00:47:35
      backup power package that makes that that coverage
    • 00:47:39
      work. Thank you. Are there any remaining comments
    • 00:47:48
      on question c? Well, thank you. That concludes
    • Item 3.2 - Flexibility and Applicability of Technical Specifications
      00:47:55
      the comment period for topic one. In moving
    • Item 3.2 - Flexibility and Applicability of Technical Specifications
      00:47:58
      to our second topic, flexibility and applicability of
    • 00:48:01
      technical specifications. You may now come to the
    • 00:48:04
      front table if you would like to make
    • 00:48:06
      comment on the first question in the topic
    • 00:48:08
      area for this topic. Once we finish with
    • 00:48:13
      comments for question A, we will not return
    • 00:48:15
      to comments on this question. How can specifications
    • 00:48:21
      include performance based factors for design, installation, or
    • 00:48:25
      operation without overly burdening a critical facility by
    • 00:48:29
      installing and maintaining a TBPP? You may not
    • Item 3.2.1 - Brian Kaufman, Mainspring Energy
      00:48:35
      come for comment. Hello again. Brian Kaufman with
    • 00:48:52
      Meanspring Energy. This was an interesting homework assignment.
    • 00:48:55
      I think we have a few things to
    • 00:48:59
      say here and hopefully you can tell me
    • 00:49:00
      if I'm being too long winded. The first
    • 00:49:03
      is that this is really getting at the
    • 00:49:06
      question of whether there should just be specifications
    • 00:49:09
      that everyone has to follow or some kind
    • 00:49:11
      of custom option. And I previously worked in
    • 00:49:14
      the energy efficiency industry and that industry has
    • 00:49:16
      long struggled with that question, like, Can you
    • 00:49:19
      only replace a CFL with an LED, or
    • 00:49:22
      are there other options? In that industry, nationally,
    • 00:49:27
      there's this concept of prescriptive solutions and custom
    • 00:49:30
      solutions. It gets at the point that there
    • 00:49:33
      should be an easy menu of options, but
    • 00:49:35
      then there should also be cases where you
    • 00:49:38
      don't have to fit into one of those
    • 00:49:40
      buckets. And in those cases, there should be
    • 00:49:42
      some kind of performance that a project is
    • 00:49:44
      measured on, and it still is eligible for
    • 00:49:48
      these programs. So, as an overarching theme, advocating
    • 00:49:53
      for the Commission to come out with if
    • 00:49:55
      you want to go down the route with
    • 00:49:57
      set designs as the law does entail some
    • 00:50:00
      description of doing that analysis, also have this
    • 00:50:04
      custom option pathway. So, that's part one. The
    • 00:50:09
      second part is answering the specific question about
    • 00:50:12
      performance based items, we're thinking about both the
    • 00:50:16
      design, installation, and operation. So, across those, would
    • 00:50:22
      recommend a few. So, design, the capability for
    • 00:50:25
      significant run time, as I've talked about, that's
    • 00:50:28
      what makes the projects cost effective. Second, have
    • 00:50:33
      a low environmental footprint. Again, that's what's necessary
    • 00:50:37
      to permit projects for the long run time.
    • 00:50:40
      For instance, NOx below 2.5 parts per million.
    • 00:50:45
      Economic savings, you could actually require a pro
    • 00:50:47
      form a that shows that, hey, this is
    • 00:50:49
      going to create economic savings and have some
    • 00:50:52
      benchmark to make sure the project has done
    • 00:50:55
      its homework. Maintenance and fuel flexibility. I'll save
    • 00:51:02
      some more of that for later. And then
    • 00:51:04
      in terms of install, some metrics there. You
    • 00:51:08
      ask later about this topic, so I'll just
    • 00:51:10
      mention also now, but a mutually agreed upon
    • 00:51:12
      construction and commercial operation timeframe. Not necessarily setting,
    • 00:51:17
      like, a specific has to be within six
    • 00:51:19
      months of signing a contract or something, but
    • 00:51:21
      mutually agreed upon. And then operation, my colleague
    • 00:51:28
      already said generator availability, so I think that's
    • 00:51:31
      an important one. The number of starts or
    • 00:51:34
      run time per year. As we've talked about,
    • 00:51:37
      units that have more run time are likely
    • 00:51:39
      to be available when they're most needed during
    • 00:51:42
      a grid outage. And then, maintenance review. Obviously,
    • 00:51:46
      we know Texas and cold weather are, difficult
    • 00:51:50
      friends, so making sure it's cold weather ready
    • 00:51:55
      is going to be an important feature. And
    • 00:51:58
      then for my third and last main point,
    • 00:52:00
      incentive design. We see in other states that
    • 00:52:06
      have had programs like this in the past.
    • 00:52:09
      It really works well to have an incentive
    • 00:52:12
      tied to commercial operation, but then also repeated
    • 00:52:15
      incentives related to performance. You're not just paying
    • 00:52:18
      somebody to build something that's not going be
    • 00:52:20
      available and operating. The law limits grants to
    • 00:52:24
      $500 per kilowatt, but it doesn't describe when
    • 00:52:27
      the grants should be delivered, and so the
    • 00:52:30
      Commission has tough work there. It also doesn't
    • 00:52:33
      clearly state that this is a one time
    • 00:52:35
      grant. If the Commission interprets the grant as
    • 00:52:38
      a one time grant, it should be delivered
    • 00:52:39
      at the time of commercial operation. That's really
    • 00:52:41
      the only thing that's going to drive a
    • 00:52:43
      market at all. But I think we saw
    • 00:52:46
      in the Patrick Engineering report, I think one
    • 00:52:48
      thing everyone has agreed on is that microgrids
    • 00:52:51
      are way more expensive than $500 per kilowatt,
    • 00:52:55
      under almost every option. I mean, there might
    • 00:52:58
      be some folks who disagree with looking at
    • 00:53:00
      a very specific size of a microgrid. So,
    • 00:53:03
      you should also consider multiple rounds of those
    • 00:53:05
      grants, for instance, like yearly, if a project
    • 00:53:10
      is reaching its, operational goals. And finally, I'll
    • 00:53:15
      say that we filed comments back in February
    • 00:53:17
      about the oversizing of batteries and how that
    • 00:53:20
      adds significant costs and is unnecessary. So that
    • 00:53:23
      is a key specification issue that we're, wanting
    • 00:53:27
      to offer and put on. Thank you. Thank
    • 00:53:30
      you. Are there any remaining comments on question
    • 00:53:37
      a? You may now come to the front
    • Item 3.2 - Flexibility and Applicability of Technical Specifications
      00:53:42
      for, the second question in this topic, question
    • Item 3.2.2 - Should the specifications vary based on the size, type of critical facility, or other
      00:53:44
      b. Should the specifications vary based on size,
    • 00:53:48
      type of critical facility, or other criteria? If
    • 00:53:52
      so, how and for what reasons? How can
    • 00:53:55
      the specifications be refined to encourage participation from
    • 00:53:58
      integration or integration with existing backup facilities? Sorry
    • Item 3.2.2 - Allison Silverstein - independente consultant
      00:54:18
      about that. Allison Silverstein. There should be a
    • 00:54:27
      the specifications may vary based on size. There
    • 00:54:32
      is no reason to vary them by the
    • 00:54:34
      type of critical facility. The entire goal of
    • 00:54:39
      the TBPP was to lower the costs of
    • 00:54:43
      these packages by maximizing to the degree feasible,
    • 00:54:47
      standardizing and commoditizing these packages, so that vendors
    • 00:54:52
      could compete and use different technologies that yet
    • 00:54:56
      met the specs in order to create competition.
    • 00:55:02
      That's I mean, the entire Texas electric system
    • 00:55:06
      is designed around competition. And what we wanted
    • 00:55:10
      to do was let all of these fine
    • 00:55:13
      vendors in the room compete against each other
    • 00:55:16
      on the basis of quality and price in
    • 00:55:18
      order to serve Texas critical facilities more effectively.
    • 00:55:23
      The more that we that you allow customization,
    • 00:55:30
      and the more that we make room for
    • 00:55:35
      every critical facility to be different and customized,
    • 00:55:39
      the more that you raise the prices effectively
    • 00:55:43
      for every critical facility because they no longer
    • 00:55:47
      can choose easily between vendor a and vendor
    • 00:55:50
      b. And the more that you put at
    • 00:55:53
      risk the possibility that all of these things
    • 00:55:56
      are perfectly interoperable so that you can gang
    • 00:56:00
      together multiple packages in order to serve the
    • 00:56:03
      needs of the facility at one time or
    • 00:56:06
      over time as the facility grows. So, yes,
    • 00:56:13
      specifications should vary based on size. Clearly, you're
    • 00:56:16
      going to have a different kind of design
    • 00:56:19
      and components for a 25 kilowatt rather than
    • 00:56:22
      a one megawatt package. But there should be
    • 00:56:27
      very few other reasons to change that. I
    • 00:56:31
      will point out that specification should absolutely not
    • 00:56:34
      vary for controls, communications, and cyber security. And
    • 00:56:41
      I want to make a point of asking
    • 00:56:44
      everybody in the room here, please raise your
    • 00:56:47
      hand if your technical people actually looked in
    • 00:56:50
      the back 800 pages at the cyber comms
    • 00:56:53
      and control specs and and did a technical
    • 00:56:57
      assessment of whether those are gonna meet do
    • 00:56:59
      the job, because I'm certainly not qualified to
    • 00:57:02
      look at those. And and we cannot have
    • 00:57:05
      this set of specs or any other set
    • 00:57:07
      of specs go through unless you are all
    • 00:57:09
      confident that the comms controls and cyber requirements
    • 00:57:14
      and the specifications are excellent and will meet
    • 00:57:17
      the needs of these facilities. So did anybody
    • 00:57:21
      look at those? And it would be pretty
    • 00:57:23
      great if you all actually asked that question
    • 00:57:25
      explicitly and invited comment on whether cyber comms
    • 00:57:29
      and control specs, as in the Patrick report,
    • 00:57:32
      are adequate and effective. Thank you very much.
    • 00:57:35
      (item:3.2.2:Joel Yu, Enchanted Rock)Thank you. Joel Yu with Enchanted Rock. I
    • 00:57:49
      guess one one thought on this. There are,
    • 00:57:57
      I guess, there are a number of, like,
    • 00:57:59
      situations that may require unique evaluations for critical
    • 00:58:08
      facilities. There was an issue raised in comments
    • 00:58:11
      about, for example, the protection of critical loads
    • 00:58:17
      within a critical facility, so isolating certain circuits.
    • 00:58:21
      You know, we see this in the hospital
    • 00:58:23
      sector. They have red plugs. Their critical load
    • 00:58:26
      within the facility might be 20 to 35%
    • 00:58:29
      of load. So there may be existing ineligible
    • 00:58:35
      generation already deployed there. Can we deploy a
    • 00:58:40
      TBPP for the critical facility that falls into
    • 00:58:44
      the category of a critical facility to back
    • 00:58:47
      up noncritical circuits, I think it's an important
    • 00:58:52
      consideration to make because when we look at
    • 00:58:59
      going back to the issue of affordability and
    • 00:59:02
      making the program attractive to critical facilities, you
    • 00:59:05
      know, the calculation that the they're making is
    • 00:59:10
      whether the investment is going to give them
    • 00:59:15
      additional benefit or cost savings on losses avoided
    • 00:59:20
      and those types of issues. Where we work
    • 00:59:23
      with critical facilities, almost all of our customers
    • 00:59:27
      actually, all of our customers decide to go
    • 00:59:29
      with whole facility backup. And so they're not
    • 00:59:32
      parsing out within their facility what's critical more
    • 00:59:37
      critical or less critical, and there are business
    • 00:59:40
      considerations they're making to value the system appropriately.
    • 00:59:46
      Having some flexibility to deploy TBPPs that wrap
    • 00:59:51
      around existing backup facilities could be interesting. But
    • 00:59:55
      on the flip side, if customer would like
    • 00:59:57
      to size their TBPP for just critical loads,
    • 01:00:03
      I think that should be an option as
    • 01:00:04
      well. I think all going towards the high
    • 01:00:08
      level principle that we're advocating for, which is
    • 01:00:13
      flexibility because customers have unique needs and unique
    • 01:00:19
      tolerances for what their specific resiliency risks are,
    • 01:00:26
      the failure modes and the impacts to their
    • 01:00:30
      operations in surrounding communities can vary significantly depending
    • 01:00:33
      on sector and type of customer. I guess
    • 01:00:38
      with respect to, like, the standardization of comms
    • 01:00:42
      and cybersecurity as well, I understand Allison's concern
    • 01:00:49
      about standardization, and there is some merit there
    • 01:00:53
      to thinking about specific standards. But on the
    • 01:00:57
      flip side, customers have different risk profiles and
    • 01:01:02
      different modes of, protecting themselves. And distributed resources,
    • 01:01:10
      for example, are not currently subject to NERC
    • 01:01:15
      critical infrastructure protection standards. You know, the reliability
    • 01:01:20
      organization hasn't deemed that to rise to that
    • 01:01:23
      level of protection. The kind of customers that
    • 01:01:27
      Enchanted Rock protects demand that level of protection.
    • 01:01:31
      So we proactively work towards cybersecurity standards that
    • 01:01:37
      are compliant with NERC level protections for bulk
    • 01:01:40
      power generators. Not every DER provider is doing
    • 01:01:44
      that, and not every customer demands that level
    • 01:01:47
      of protection or has risks severe risks related
    • 01:01:52
      to that type of failure mode with their
    • 01:01:56
      backup power. Comms as well, I think, in
    • 01:02:02
      various contexts around DERs, we we see on
    • 01:02:06
      behalf of, like, the broader DER community very
    • 01:02:10
      differing levels of investment in, like the communications
    • 01:02:13
      infrastructure. We, as Enchanted Rock, want to be
    • 01:02:16
      market integrated. So we're investing to communicate with
    • 01:02:20
      ERCOT at the same level that bulk generators
    • 01:02:23
      do bulk power generators do. But not every
    • 01:02:26
      DER requires that type of communication with the
    • 01:02:30
      grid either. There are other mechanisms that are
    • 01:02:34
      less expensive, less intensive for different capabilities. Flexibility,
    • 01:02:43
      I think, is very important to be able
    • 01:02:45
      to right size the investment, right size the
    • 01:02:49
      solution for different customers. Thank you. Are there
    • 01:02:58
      any remaining comments on question b. Allison Silverstein
    • 01:03:10
      just a reminder to my friend Mister you
    • 01:03:12
      that the statute specifies the use of interconnection
    • 01:03:16
      technology. Interconnection comes and controls. They should be
    • 01:03:21
      spent standard So he may not need to
    • 01:03:25
      do it for the clients he is serving
    • 01:03:27
      today, but if he wants to do Texas
    • 01:03:29
      backup power packages, these specs are supposed to
    • 01:03:33
      have standards for these things. Thank you. Thank
    • 01:03:36
      you. Are there any remaining questions? Comments. Sorry.
    • 01:03:46
      Comments. We'll now move to question c. Considering
    • 01:03:52
      that access to natural gas or propane may
    • 01:03:54
      be limited in different geographic areas of the
    • 01:03:56
      state, how, if at all, can specifications be
    • 01:03:59
      expanded to include alternative technologies and fuels? Brian
    • Item 3.2.3 - Brian Kaufman, MainSpring
      01:04:20
      (item:3.2:Brian Kaufman - MainSpring) Kaufman with MainSpring. This was an interesting one
    • 01:04:23
      and something that we spent a lot of
    • 01:04:25
      time thinking about. Fuel flexibility is definitely one
    • 01:04:29
      of the cores of the MainSpring linear generator.
    • 01:04:33
      Our technology can run on any gaseous fuel
    • 01:04:35
      without any hardware changes and was designed with
    • 01:04:38
      that, intending that there's customers we work with
    • 01:04:42
      biogas, hydrogen, propane, natural gas, customers that want
    • 01:04:46
      to have backup fuel as well on-site that's
    • 01:04:49
      different than their primary fuel, that's primarily because
    • 01:04:54
      of the reliability attributes and also increasingly because
    • 01:04:57
      of the environmental benefits of some of these
    • 01:05:00
      fuels. So, in general, we think that what's
    • 01:05:06
      in the law about running on these gaseous
    • 01:05:09
      fuels, propane and natural gas, should be considered
    • 01:05:12
      a minimum and not, you know, a maximum.
    • 01:05:17
      Technologies that can run on multiple fuels have
    • 01:05:20
      arguably more reliability, and we think deserve a
    • 01:05:26
      larger incentive. The technologies that can do this
    • 01:05:31
      cost more money. And so if you want
    • 01:05:33
      if Texas wants customers to be able to
    • 01:05:36
      do that in case of emergency because of
    • 01:05:38
      concerns of wanting to solidify critical facilities, then
    • 01:05:42
      that's coming with a price. As you're thinking
    • 01:05:45
      about incentive levels, something to consider. In particular,
    • 01:05:52
      could consider some kind of sliding scale based
    • 01:05:55
      on specific performance goals. Certain assets could receive
    • 01:06:00
      one level of incentive, probably more affordable technologies
    • 01:06:04
      to begin with. And then technologies that could
    • 01:06:07
      reach more range of performance goals could receive
    • 01:06:09
      more incentive commensurate with what they're contributing. So
    • 01:06:14
      that's something to consider. And then also, finally,
    • 01:06:19
      very specifically, so the law states natural gas
    • 01:06:22
      and propane. We know that, you know, landfills,
    • 01:06:27
      wastewater, dairies, these are all generating biogas and
    • 01:06:31
      that is the operable ingredient is methane, so
    • 01:06:35
      we should also it would be useful if
    • 01:06:37
      the Commission clarified that biogas was considered or
    • 01:06:41
      RNG, which is just more refined biogas, was
    • 01:06:45
      considered, one of those fuels that's eligible. And
    • 01:06:49
      then finally, I think you should take a
    • 01:06:52
      closer look at whether the law requires the
    • 01:06:55
      actual operation of those two fuels, natural gas
    • 01:06:57
      and propane, or that they have to be
    • 01:06:59
      designed to run on the fuels. So, like
    • 01:07:01
      I'm saying, some technologies like linear generators can
    • 01:07:04
      run on those fuels, so if the check
    • 01:07:08
      the box was in the design stage, it
    • 01:07:12
      could check that box, but then if the
    • 01:07:14
      customer wanted to run off of a different
    • 01:07:16
      fuel, like green ammonia, green hydrogen, that would
    • 01:07:22
      also be something they could use that backup
    • 01:07:24
      power package for. And so it would be
    • 01:07:27
      important to keep that clear as well so
    • 01:07:30
      there's not an open question of whether this
    • 01:07:33
      customer could do what with it. Thank you.
    • 01:07:36
      Thank you. Are there any remaining comments on
    • 01:07:43
      question C? Thank you. This concludes the comment
    • 01:07:52
      period for topic two, and we'll move to
    • 01:07:54
      our final topic, supply chain and deployment. You
    • 01:07:58
      may now come to the front table if
    • 01:07:59
      you would like to make comment on the
    • 01:08:00
      first question of the third topic, question a.
    • 01:08:03
      Once we have finished comments on question A,
    • 01:08:06
      we will not return to the comments set
    • Item 3.3 - Supply Chain & Deployment
      01:08:07
      for this question. Considering vendors that may utilize
    • 01:08:12
      alternative fuel sources or other components that can
    • 01:08:16
      meet performance criteria, how can the Commission consider
    • 01:08:22
      adapting the specifications to increase the number of
    • 01:08:24
      vendors eligible to participate in the program and
    • Item 3.3.1 - Allison Silverstein
      01:08:27
      support other business models? Allison Silverstein. This question
    • 01:08:41
      puzzles me because there is nothing in the
    • 01:08:43
      statute about qualifying vendors. The point of the
    • 01:08:46
      statute is to certificate packages that meet the
    • 01:08:50
      specifications. And so any vendor that can produce
    • 01:08:54
      a package that meets the specifications for that
    • 01:08:57
      package should be able to participate, and it
    • 01:09:01
      is not about the vendor qualifications per se.
    • 01:09:04
      The only qualification is, have you got a
    • 01:09:06
      good package, and are you selling it for
    • 01:09:08
      a good price? And are you willing to
    • 01:09:10
      stand behind that package in its operation? And
    • 01:09:15
      you all should be imposing the kind of
    • 01:09:18
      warranty requirements that assure that vendors will be
    • 01:09:22
      there for their customers if there's a problem
    • 01:09:25
      with these packages, rather than saying, we are
    • 01:09:29
      going to qualify vendors and only vendors who
    • 01:09:31
      jump through these hoops get to sell. Again,
    • 01:09:35
      the point is to create competition for packages
    • 01:09:38
      that are known, high quality, get the job
    • 01:09:42
      done, not to have only a limited number
    • 01:09:46
      of vendors do that. Limiting the number of
    • 01:09:48
      vendors is absolutely contrary to the spirit of
    • 01:09:51
      what we were trying to do with this
    • Item 3.3.1 - Matthew Boms, TAEBA
      01:09:52
      policy. Thank you. Thank you. Matthew Boms, TAEBA
    • 01:10:09
      but just as a point of clarification, the
    • 01:10:11
      question might be on the preapproved vendors that
    • 01:10:14
      were in the Patrick Engineering final report. Is
    • 01:10:16
      that what you're aiming for here? We we
    • 01:10:18
      would just wanna know how how would you
    • 01:10:21
      suggest we encourage vendor participation. Right. Uh-huh. Okay.
    • 01:10:25
      That's fair. So I just echo Allison's comments.
    • 01:10:27
      I think that the more competition, the better
    • 01:10:29
      for these backup power packages, and I don't
    • 01:10:31
      think that the list of preapproved vendors in
    • 01:10:33
      the Patrick final report was meant to be
    • 01:10:36
      exhaustive list of all possible vendors. Brian Kauffman
    • Item 3.3.1 - Brian Kauffman, Mainspring Energy
      01:10:55
      with Mainspring Energy. To kind of reiterate some
    • 01:11:00
      things I said before and go off to
    • 01:11:01
      some other folks, If you want to be
    • 01:11:04
      more inclusive, then thinking about kind of a
    • 01:11:07
      range of performance abilities is important. If you're
    • 01:11:10
      just able to accomplish the minimum of what's
    • 01:11:12
      in the law, for instance, perhaps you can
    • 01:11:17
      receive an incentive, but perhaps it's at a
    • 01:11:19
      lower level than if a microgrid could achieve
    • 01:11:23
      higher level of availability, for instance, than some
    • 01:11:26
      others. This would enable a broader range of
    • 01:11:29
      technologies that may be at different ranges of
    • 01:11:34
      the cost scale to participate, and likewise vendors
    • 01:11:39
      who are equipped to sell those technologies. Another
    • 01:11:43
      feature to say is, while I agree with
    • 01:11:47
      my colleague that bringing down the cost of
    • 01:11:51
      microgrids is a really important part of this,
    • 01:11:55
      as you've heard from me, we are concerned
    • 01:11:57
      that it will that there should be options
    • 01:12:01
      going into this and we're honestly scared that
    • 01:12:05
      there may be features of these prescriptive, microgrids
    • 01:12:10
      that aren't going to fit easily to what
    • 01:12:12
      a customer wants or what we could deliver,
    • 01:12:14
      and therefore we can't participate at all in
    • 01:12:16
      the program. I recently spent, hours looking through
    • 01:12:20
      a program in Pennsylvania, over 100 pages of
    • 01:12:24
      description of what is necessary to participate, and
    • 01:12:28
      was all geared up to participate in it,
    • 01:12:29
      and found one sentence, and now we can't
    • 01:12:32
      participate in the program. And which is too
    • 01:12:36
      bad, because the program has repeatedly sent me
    • 01:12:38
      emails that they want more participants. And it's
    • 01:12:42
      a shame because the policymakers have a lot
    • 01:12:46
      of good intention, but it's obviously going to
    • 01:12:49
      be really important to not scare away the
    • 01:12:54
      people who could benefit from the program. And
    • 01:12:57
      that's where they're having some custom projects and
    • 01:13:00
      performance guarantees so that they are reaching it.
    • 01:13:02
      I think you'll see supply and demand, if
    • 01:13:05
      you have prescriptive concepts, there should be some
    • 01:13:08
      element of supply and demand. If these are
    • 01:13:09
      bringing down the cost of microgrids, you'll see
    • 01:13:12
      more customers and vendors moving in that direction,
    • 01:13:17
      and folks who want something different will also
    • 01:13:20
      be able to be served through a custom
    • 01:13:22
      approach. Thank you. Thank you. Are there any
    • 01:13:29
      remaining questions on comments on question a? Joel
    • Item 3.3.1 - Joel Yu, Enchanted Rock
      01:13:42
      Yu from Enchanted Rock. Again, we think it
    • 01:13:48
      is important, for the program to think about
    • 01:13:53
      vendor qualification and approval, and that is in
    • 01:13:56
      this statute about keeping an approved list of
    • 01:13:59
      vendors. The packages are, you know, intended to
    • 01:14:03
      be designed, for a purpose, but, it isn't
    • 01:14:07
      as specific as here is one single standard
    • 01:14:12
      package that every vendor must use, but that
    • 01:14:16
      there are criteria, forty eight hour duration, three
    • 01:14:19
      technologies for for capable of islanding. Those are
    • 01:14:26
      pretty high level criteria, and I think in
    • 01:14:32
      order to track the a broad number of
    • 01:14:34
      vendors, having flexibility and making some very clear
    • 01:14:40
      clarifications on some of these critical issues upfront,
    • 01:14:44
      around the behind meter services will will be
    • 01:14:47
      very important. You know, otherwise, I think it
    • 01:14:52
      becomes difficult to if the vision is for
    • 01:14:59
      the commission to market the backup power packages
    • 01:15:02
      to critical facilities, then it may not be
    • 01:15:10
      as critical. But if vendors are going to
    • 01:15:12
      be involved in reaching out through their own
    • 01:15:17
      networks and marketing capabilities to recruit previously untapped
    • 01:15:23
      critical facilities that were perhaps out of range
    • 01:15:26
      economically who become capable of investing in backup
    • 01:15:30
      power because of the state incentive, then we
    • 01:15:34
      do need some certainty to be able to
    • 01:15:36
      go out and make certain claims and price
    • 01:15:39
      packages and produce solutions that work for customers.
    • 01:15:47
      Thank you. Are there any remaining questions on
    • 01:15:55
      question A? We're going to move to question
    • 01:16:04
      b. How might other business models enable TBPP
    • 01:16:08
      deployment by reducing potential limitations or constraints that
    • 01:16:12
      a critical facility may face when installing or
    • 01:16:15
      maintaining a TPP. What would the implications be
    • 01:16:18
      if a critical facility exits the program? Thank
    • 01:16:36
      you. These were good questions again. And Brian
    • Item 3.3.2 - Brian Kauffman, Mainspring Energy
      01:16:39
      Kauffman with Mainspring Energy. So, I think I
    • 01:16:42
      agree with other statements that lease models can
    • 01:16:45
      be very advantageous to a program like this
    • 01:16:48
      for reducing the cost, install and maintain, and
    • 01:16:51
      just making sure that the units are available.
    • 01:16:55
      It's definitely a difficult question about exiting. I
    • 01:16:59
      think nobody would want a project to exit,
    • 01:17:02
      you know, that has gone through this. Of
    • 01:17:05
      course, we can't all control the future of
    • 01:17:08
      in so many ways, but, you know, I
    • 01:17:12
      think it's, you know, ideally these projects would
    • 01:17:17
      be around and operating and useful for years,
    • 01:17:20
      if not decades. I think creating a minimum
    • 01:17:23
      term is probably reasonable. If I were in
    • 01:17:26
      the policymaker seat, I would I would be
    • 01:17:28
      thinking about that. I would, though, kind of
    • 01:17:32
      caution about setting an overly ambitious term, I
    • 01:17:35
      think that especially if it comes with a
    • 01:17:38
      lot of financial penalties, essentially reduces the incentive
    • 01:17:43
      level. If you see an incentive level that's
    • 01:17:45
      $500 but it's saying you have to be
    • 01:17:46
      around for ten years, you might say, Well,
    • 01:17:48
      what's the risk that I won't be available?
    • 01:17:50
      What's the penalty? And then you have to
    • 01:17:52
      drop the 500 by some portion. And it
    • 01:17:57
      might be a very significant portion, depending on
    • 01:17:59
      the timeline. So, a term like three to
    • 01:18:02
      five years, I think, would be something that
    • 01:18:06
      probably a customer and a vendor would see
    • 01:18:09
      as reasonable. And like I've said before, if
    • 01:18:13
      this was along with an incentive that happened
    • 01:18:16
      over each year of operation, that would make
    • 01:18:19
      a lot of sense. It's a lot easier
    • 01:18:22
      to not give somebody money than try to
    • 01:18:25
      claw back an incentive, and I don't think
    • 01:18:28
      anybody wants to get involved in litigation around
    • 01:18:30
      something like that. I've seen other states like
    • 01:18:32
      California under the S CHIP program, they give
    • 01:18:35
      an upfront incentive and then every year for
    • 01:18:37
      four years I believe there's an incentive attached
    • 01:18:40
      as well for a distributed asset so long
    • 01:18:43
      as it's meeting certain performance goals. That may
    • 01:18:47
      serve as a useful model. Thank you. Thank
    • Item 3.3.2 - Alison Silverstein, ERCOT
      01:18:51
      (item:3.2.2:Alison Silverstein) you. Alison Silverstein. We should I hope that
    • 01:18:57
      you will allow maximum business model flexibility for
    • 01:19:02
      vendors and other kinds of businesses to allow
    • 01:19:09
      the critical facilities to apply. Most of the
    • 01:19:12
      critical facilities don't have backup power today because
    • 01:19:14
      they can't afford it, because they're busy paying
    • 01:19:17
      their bills and serving their customers and not
    • 01:19:19
      don't have the extra cash to go out
    • 01:19:21
      and buy a genset. And they also don't
    • 01:19:25
      have the technical expertise to figure out what
    • 01:19:27
      to buy and how to install it. So,
    • 01:19:30
      the more that you can do to enable
    • 01:19:33
      vendors and others to act as agents and
    • 01:19:37
      financial enablers through measures such as resilience as
    • 01:19:41
      a service, through different financing arrangements, letting the
    • 01:19:46
      vendor be the owner rather than the critical
    • 01:19:49
      facility, and letting the vendor apply as an
    • 01:19:52
      agent on behalf of a critical facility. All
    • 01:19:55
      of those measures will make it easier for
    • 01:19:57
      small, unsophisticated, critical facilities to get into this
    • 01:20:01
      business and to I'm sorry to get backup
    • 01:20:05
      power packages that will enable them to be
    • 01:20:08
      better and safer at their primary business, which
    • 01:20:11
      is taking care of people and doing whatever
    • 01:20:13
      they are doing in their communities. I think
    • 01:20:17
      it unlikely that most critical facilities will exit
    • 01:20:20
      the program. It is more likely that a
    • 01:20:22
      critical facility that gets a bless you. That
    • 01:20:25
      gets a backup power package, has other business
    • 01:20:29
      problems, and goes belly up than it is
    • 01:20:33
      that they say, I don't want my backup
    • 01:20:35
      power package anymore. So and and I think
    • 01:20:39
      those are going to be normal business casualties,
    • 01:20:43
      and the relationship between the critical facility and
    • 01:20:48
      its owner should be or, you know, its
    • 01:20:52
      vendor or agent or whoever it is they
    • 01:20:54
      have a financial arrangement with is the problem.
    • 01:20:58
      This state is throwing money hand over fist
    • 01:21:01
      at a bunch of stuff, trying to get
    • 01:21:02
      back a $500 per kilowatt grant from somebody
    • 01:21:06
      who's got bigger business problems doesn't strike me
    • 01:21:08
      as a useful I think it's something that
    • 01:21:10
      the commission and the state should write off
    • 01:21:12
      rather than getting all huffy and pursuing legal
    • 01:21:16
      protections and action against somebody who was trying
    • 01:21:20
      to do a good job. So I would
    • 01:21:23
      encourage you guys to not get all wigged
    • 01:21:26
      out about if a critical facility exits the
    • 01:21:29
      program until that occurs. And the first entity
    • 01:21:33
      that will be affected by that will be
    • 01:21:35
      if they have a vendor or some other
    • 01:21:38
      business entity with whom they have a contract.
    • 01:21:40
      That's their problem, not your problem. And the
    • 01:21:44
      amount the $500 per kilowatt, life's short. Just
    • Item 3.3.2 - Matthew Boms, TAEBA
      01:21:48
      move on. You. Matthew Boms. I think the
    • 01:21:55
      way we would answer this question, particularly the
    • 01:21:57
      first part of the question would be, we've
    • 01:21:59
      advocated for this in all the written comments
    • 01:22:01
      that we've submitted, but we think that resilience
    • 01:22:05
      as a service and lease to own models
    • 01:22:07
      are beneficial for the backup power program. So
    • 01:22:10
      this is kind of going back to the
    • 01:22:12
      first topic area, but I think it's relevant
    • 01:22:14
      for this question too, because those are models
    • 01:22:16
      that are currently working in the free market
    • 01:22:18
      and thinking specifically about the electric school bus
    • 01:22:21
      portion of this program because we don't necessarily
    • 01:22:23
      have those stakeholders in the room today, unfortunately.
    • 01:22:26
      That's how a lot of school districts across
    • 01:22:28
      the state of Texas are affording electric school
    • 01:22:30
      buses, which can be very expensive. So by
    • 01:22:32
      opening up the possibility of those models for
    • 01:22:36
      critical facilities, I think you're just making the
    • 01:22:39
      upfront costs a lot more accessible for critical
    • 01:22:42
      facilities that frankly don't have the resources for
    • 01:22:44
      some of these technologies. And then the last
    • 01:22:48
      thing I would say is that I've advocated
    • 01:22:50
      for this on the advisory committee is that
    • 01:22:52
      we should really think about the technical assistance
    • 01:22:54
      that we can offer to critical facilities as
    • 01:22:56
      part of these grants. So thinking about, well,
    • 01:22:59
      what is the maintenance going to cost them
    • 01:23:01
      over the course of the lifespan of this
    • 01:23:04
      TBPP? And then can we assume that these
    • 01:23:07
      critical facilities right off the bat will know
    • 01:23:09
      how to choose the best backup power package
    • 01:23:12
      that works for them? Right? So is there
    • 01:23:14
      some technical assistance that can be provided to
    • 01:23:16
      the critical facility that would help them choose
    • 01:23:18
      between different vendors and between different packages when
    • 01:23:20
      they first sign up for the program? Thank
    • 01:23:22
      you. Thank you. Are there any remaining comments
    • 01:23:28
      on question b? Now you may come up
    • 01:23:35
      to the table to comment on the third
    • 01:23:37
      question. Question c. How can vendors, including those
    • 01:23:41
      with alternative business models, address supply chain disruptions
    • 01:23:44
      to ensure timely deployment and adequate preparedness for
    • Item 3.3.3 - Brian Kauffman, Mainspring Energy
      01:23:49
      emergencies? I don't know if there'll be another
    • 01:24:03
      chance, I want to say thank you for
    • 01:24:05
      having us, and including this group and ourselves
    • 01:24:09
      in particular at Mainspring. It's been a very
    • 01:24:12
      productive session, think, hearing everyone's comments. So in
    • 01:24:17
      terms of this question, definitely supply chains are
    • 01:24:20
      on everyone's mind, and a colleague from Enchanted
    • 01:24:24
      Rocks spoke about the timelines for projects. I
    • 01:24:26
      mean, the longer this program gets delayed, the
    • 01:24:30
      more likelihood there's going be another major event
    • 01:24:33
      where this project program could have been, an
    • 01:24:37
      enabler to save lives and potentially billions of
    • 01:24:40
      dollars. So, we strongly support, finalizing the program
    • 01:24:47
      in light especially that there are supply chain
    • 01:24:50
      issues and we have to think out multiple
    • 01:24:53
      periods. Our company is based in The U.
    • 01:24:56
      S, and we're booking units that we will
    • 01:24:58
      deliver this year. So, while supply chain issues
    • 01:25:02
      are affecting a ton of members of this
    • 01:25:05
      industry, it's thankfully not something that we have
    • 01:25:08
      faced at Mainspring Energy. However, we can't all
    • 01:25:13
      predict the future. And rather than say, hey,
    • 01:25:18
      under this program you have to install your
    • 01:25:22
      project within certain months of signing an agreement
    • 01:25:25
      or something, I think that's where at the
    • 01:25:28
      very beginning I said something about a performance
    • 01:25:29
      thing where there should be a mutually agreed
    • 01:25:32
      upon delivery schedule because the timelines of what's
    • 01:25:36
      realistic can change. Obviously, when you're manufacturing something,
    • 01:25:40
      you might have back orders certain periods. You
    • 01:25:42
      might have plenty of supply. It's not something
    • 01:25:46
      that you want to ordain. And then draconian
    • 01:25:50
      policy could really scare participation away from this
    • 01:25:55
      program. But it would be reasonable to track
    • 01:25:59
      the metrics and depending on what the delivery
    • 01:26:02
      schedule is to make that a performance metric
    • 01:26:04
      about what portion of your projects were delivered
    • 01:26:08
      on time, for instance. So, our company is
    • 01:26:12
      also planning to build our first U. S.-based
    • 01:26:15
      manufacturing for about $200,000,000 in Pittsburgh, Pennsylvania. So
    • 01:26:20
      that should be breaking ground in 2026. And
    • 01:26:24
      so we're very optimistic and like to be
    • 01:26:27
      delivering domestically produced projects through a backup power
    • 01:26:32
      package. Thank you. Thank you. Are there any
    • 01:26:41
      remaining comments for question c? Thank you. That
    • 01:26:49
      concludes the comment period for this topic, topic
    • 01:26:52
      three. And thank you all for your participation
    • 01:26:55
      in this valuable feedback. We appreciate you for
    • Item 4 - Closing
      01:26:58
      your for your time and your input. If
    • 01:27:01
      you have any further comments following this workshop,
    • 01:27:04
      please file them on the PUC interchange using
    • 01:27:06
      project number 57236 by April. And make sure
    • 01:27:11
      you're signed in to the sign in sheet,
    • 01:27:13
      for the workshop. It's in the hallway, there's
    • 01:27:15
      one here on the table. And make sure
    • 01:27:18
      you fill out all fields so that we
    • 01:27:19
      have accurate information for further communications. Hope everyone
    • 01:27:23
      has a great rest of their day, and
    • 01:27:25
      thank you for participating in this workshop. Thank
    • 01:27:28
      you.

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