Permian Basin is a priority area for the commission due to its critical importance and growing electricity demand.
ERCOT forecasts more than 150 gigawatts total load by 2030, with 26 gigawatts from the Permian Basin region.
Texas Legislature passed 88R-HB5066 to address electricity needs of the Permian Basin region.
Commission directed ERCOT to develop a Permian Basin reliability plan, with ERCOT's final plan submitted in July and commission approval expected in September.
Encouragement for feedback on infrastructure buildout through 2038, consideration of EHV transmission lines, and cost impacts.
1 - What is the best approach to approve a plan that gives the Commission flexibility to consider and benefit from ERCOT' s EHV study that will be completed by the end of 2024?
PBPA is one of the largest regional oil and gas associations in the U.S.
The current plan is critical for PBPA members facing load issues in the region.
The region is about a decade behind in infrastructure.
PBPA supports the plan for the full 2038 load and endorses the 345 plan as it seems fully developed. Requests that the Commission approve a full plan in their order this fall.
PBPA members present include Endeavor Energy, ConocoPhillips, Coterra Energy, Diamondback Energy, and Targa.
PBPA has been collaborating with ERCOT and appreciates their efforts.
Griffiths emphasizes the importance of a full and complete plan for serving the load.
Kamran Ali, VP of Transmission Planning for AEP Texas.
Discussed a projected load increase of 24,000 megawatts in the Permian Basin and an expected total increase of 60,000 megawatts across Texas.
Highlighted the need for significant high voltage transmission at 765 kV to manage uncertainties around generation locations.
Believes that a 765 kV system will be the solution to their lack of a regional backbone overlay interstate system to allow power transmission between different regions.
Emphasized AEP's experience with operating roughly 2200 miles of 765 kV lines in the PGM region.
Recommended holding a workshop with manufacturers, vendors, and construction companies to discuss the feasibility of the 765 kV plan by 2030.
Emphasized the benefit of seeing results from the RTP analysis expected to be published by the end of the year.
Concluded by stating that this long-term planning would be more beneficial for ratepayers compared to temporary solutions.
WETT is open to phasing in extra high voltage projects so they can be studied as part of the ERCOT larger plan. Emphasized the importance of extra high voltage to WETT.
WETT agrees with consumer groups to initially approve a 345 kV plan that can be upgraded later.
Oncor has filed comments in both the extra high voltage inquiry and the current project.
Oncor has been heavily involved in developing ERCOT's load forecast for the Permian Basin reliability plan.
There is concern that bifurcating the plan as suggested by ERCOT will create bottlenecks, impacting the ability to serve customers.
Primary recommendation is to proceed with the 345 plan.
Secondary recommendation is to designate certain 345 paths as 765 paths and to direct utilities to begin preparation of a CCN addressing both 345 and EHV alternatives.
Certainty needed for customers and maintained optionality for infrastructure options.
Consideration to build at 765 and operate at 345, introducing complexity.
Hope that between Commission's Permian Basin order and key CCN decisions, voltage upgrade determinations will be made.
Advocate for oil and gas customers who supported HB5066.
Brett Desayo addressed the issue about whether the load will be there in 2032, affirming that the majority of the load is expected and projects are planned accordingly.
Mentioned that several hundred megawatts of load have been pending for multiple years and are currently needed.
2 - Would there be any permanent, negative impacts to any stakeholder if the Commission were to approve a phased approach where a complete 2030 plan would be approved in September of 2024 , and a future plan for 2038 would be approved at a no later than date explicitly specified in the Final Order when Commission approves the 2030 phase of the plan?
Michael McMillin expressed concerns that a phased approach would not provide the certainty intended by HB 5066 to consumers in the Permian Basin.
Emphasized the need to include import paths to the Permian Basin in the current plan to avoid delays due to potential contentious policy decisions on EHV.
Believes import paths will be needed before 2038 and delays would force customers to wait longer to interconnect, affecting electrification in historically underserved areas.
Stressed that facilities take 4-6 years to complete, meaning approval today results in operational status by 2029-2031.
Noted significant load growth expected between now and 2031, which requires immediate action to meet demand.
Cited the S&P study showing high load production from renewable assets, which may not meet the demand for high load factor activities such as oil and gas in the Permian Basin.
Stressed the need for a way to get power from the rest of the grid into the Permian Basin, as renewables may not always be reliable.
Discussed that assumptions in the S&P study might underestimate load growth as they assume load constraints due to transmission availability.
Advocated for the commission to approve a complete 345 plan now and retain the option to add or substitute EHV later after thorough evaluation.
Impacts of approving a 2030 plan with import lines: There are two import paths identified for 2030 at 345 kV.
Impact of proceeding with the next phase later: ERCOT is currently working on the 2024 regional transmission plan, considering several alternatives including 345 kV, EHV options, 500 kV, and 765 kV.
Potential delay or change in future transmission needs in the Permian region with EHV if parts of the projects are approved could lead to mixed options combination. This could delay the overall review and increase costs.
Mixed options might increase costs compared to moving forward with a 765 kV holistic plan.
3 - Is the Network Open Season (NOS) concept proposed by NRG1 and used in the natural gas industry a viable option to consider for transmission buildout in ERCOT for new large loads?
Emphasized the importance of transmission expansion for load growth and the need for policies that address future load growth, especially in the Permian Basin.
Identified significant load growth in the Permian Basin, with projections almost equivalent to major metropolitan areas, and noted additional growth in other regions.
Raised issues about lack of transparency and proper sizing in transmission development, especially for non-oil and gas load growth.
Proposed a network open season concept to help verify investment needs, drawing parallels to the CREZ process.
Stressed that this proposal does not intend to delay transmission needs for oil and gas customers in West Texas.
Suggested that the proposed concept would need detailed discussions, stakeholder input, possibly separate projects, and statutory changes.
Highlighted the need to revisit cost allocation methodologies to avoid negative financial impacts on consumers.
Called for studying the impact on consumer classes and having discussions on cost allocation.
Acknowledged Bill's point on network open season concept requiring changes in protocols, rules, and possibly statutes.
Emphasized the importance of HB5066 which mandates specific provisions for the Permian Basin under 39.167(b), focusing on extending transmission service, increasing capacity for forecasted load, and reducing interconnection timelines.
Stated that current issues with transmission in the Permian Basin are more immediate and should not be mixed with new concepts.
Confirmed no strong position or detailed knowledge on network open seasons and their impact on existing PUC rules and regulations.
Cory Allen of South Texas Electric Coop (STEC) believes the concept is potentially viable and suggests that the commission should advance it further.
Warren mentioned that industrial customers are paying their share of transmission, but some can reduce their load during peak times and avoid significant transmission charges.
Urges the Commission to ensure that the large build-outs to loads, capable of avoiding these costs, have a method for paying for the service.
Liz Jones from Oncor emphasized the absence of a reservation capacity system in ERCOT unless Bill's proposal is adopted.
Stressed the importance of considering all types of loads, not just oil and gas, in the HB5066 analysis.
Highlighted the problem of inadequate capacity to serve differing loads if only specific types are reserved capacity.
Cyrus Reid from Sierra Club suggested having a separate proceeding for the load capacity topic.
Discussed the need for better transparency to understand the reality of different loads and required transmission projects.
Proposed further requirements to make certain loads controllable during peak times.
Raised a question about the approval and implementation plan sequencing of projects for the commission's meeting on September 26, 2024.
4 - Should the Commission approve a plan at the September 26,2024 open meeting, by what date can TSPs, with input from ERCOT, provide an implementation plan-including sequencing of projects-for use by the Commission to establish a schedule to sequence priority projects and subsequent projects?
Staff's capacity to plan and process CCN applications is crucial and should be disclosed.
It is important to balance the number of Brownfield versus Greenfield projects.
Brownfield projects reuse existing infrastructure but can be delayed by difficulty in scheduling outages, especially in high-demand regions like Permian.
Greenfield and straightforward Brownfield projects need clear assignment to the right TSPs.
Oncor recommends a second phase process post-September 26 to handle TSP assignments and contested issues.
ERCOT and TSPs should collaborate on the sequencing of projects to avoid delays.
More optionality in CCN applications leads to longer preparation times.
Customer demand for information on project timelines and locations is high.
Discussion on customer fairness in cost allocation is acknowledged but deemed a separate issue from today’s discussion.
Nabaraj Pokharel introduced himself as the Director of Market and Revenue Policy from the Office of Public Unity Council.
He addressed the question of whether the commission should approve the plan at the September 26 open meeting.
He stated his quick answer is 'no' because ERCOT is planning to file the full analysis by the end of September, requiring more time for stakeholders to read and study the report.
Pokharel emphasized that approving the plan on September 26 does not fit the timeline.
He mentioned that HB5066 requires the commission to direct ERCOT to develop the reliability plan but does not mandate immediate implementation approval.
Pokharel indicated that their office filed a comment on 55718, recommending that the commission's deliberation and recommendations be submitted to the Texas Legislature.
He highlighted the significant cost involved, particularly impacting residential and small commercial consumers who are not the primary drivers behind these investments.
Discussion on CCN applications consolidation and its impact on staff.
Provision that required consolidation of applications with a common endpoint was stricken last session.
Policy rationale for not requiring consolidation is related to import paths, which can cover hundreds of miles with different impacted communities.
Historical context involving Oncor and El CIA highlighted issues with non-consolidated CCN proceedings.
Current impact: Consolidating multiple projects could slow down processes, create bottlenecks, and make processing more challenging for the commission.
Oncor filed comments on this issue, indicating potential flexibility in the process.
5 - What methodology should be used to prioritize and sequence the individual CCN applications to fulfill the objectives of PURA section 39.167 to optimize efficient transmission build-out?
ERCOT has introduced a new economic test consistent with the 2021 legislature but it hasn't been thoroughly tested yet.
Liz Jones compares this economic analysis to the NOS proposal from NRG, indicating that it might require significant adjustments before it becomes fully operational.
All projects discussed are crucial for reliability and customer service, thus prioritizing one over another based on specific benefits is challenging.
Asking ERCOT to conduct a comprehensive analysis is considered a challenging task.
Potential delay in the construction of all transmission projects if ERCOT takes up the task, rather than accelerating priority projects.
Acknowledgment of the phased sequencing of projects, noting that completion is not necessarily tied to the initial order date.
Recognized need from the load side and new generation from the Texas energy fund.
Stressed that customers have been waiting for years for the transmission build-out.
Acknowledged the question of sequencing or prioritizing projects but emphasized the need for immediate action on all fronts.
Highlighted the potential negative impact of delaying or reordering projects on different customers.
Expressed the importance of getting a complete approval for the entire project rather than a phased approach.
Raised concern about the feasibility of handling numerous CCN cases within a tight timeframe.
6 - Due to the large scope of the Permian Basin Reliability Plan, are there any additional outreach efforts the Commission should consider outside of what is required by PURA and Commission rule?
PBPA is not advocating for any change in the notice process.
TSPs in the area have cooperated well with oil and gas loads to reach the current plan.
Ongoing communication efforts between TSPs and oil and gas loads are important and expected to continue.
PBPA has invited TSPs and the commission to the region for CCN cases, which they have accepted.
It is important for TSPs to work with impacted pipelines and oil and gas interests from the beginning.
TXOGA members are committed to participating in the process to expedite CCN cases.
A question was raised about whether publishing the endpoints of projects and ownership entities would suffice for TSPs to move forward with filing CCNs or contested cases over project ownership.
7 - If ERCOT publishes the end points of all the projects along with which entity owns each endpoint, would that information suffice for TSPs to move forward with filing CCNs or contested cases over project ownership?
Liz Jones addressed the need for regional planning groups to function differently in high growth areas.
She highlighted that this issue might be out of scope for the current proceeding due to its complexity.
She expressed hope that the commission's order would align with the first order, noting that additional RPG review of projects is unnecessary.
Jones emphasized that ERCOT has already undertaken the review, and it now falls under the commission's jurisdiction through the order and subsequent CCNs.
She acknowledged that there is some debate about the necessity of further review but noted that the RPG process is fundamentally advisory.
Jones stated that ERCOT is ultimately responsible for the plan, whether it is the Permian plan, RTP, or another independent review.
She suggested that protocol improvements could be better addressed separately.
Meghan Griffiths, on behalf of PBPA, agrees with Liz that no protocol changes are needed and does not believe the plan needs to go back to RPG.
Griffiths advocates for moving forward with an order without further delays.
Cory Allen mentioned working on an NPRR for large load study processes and suggested the commission ensure RPG's involvement in validating loads and expressed concerns about potentially duplicative loads and urged further investigation.
ERCOT was asked if they needed any protocol changes; ERCOT confirmed none were needed.
9 - Is there anything else the Commission should consider already not addressed?