Meeting Summary - 09/26/24 Open Meeting

0 - Chairman Gleeson calls meeting to order

0.1 - Commission Counsel Shelah Cisneros lays out Consent Agenda

• Commission Counsel Shelah Cisneros addressed the Commissioners.
• Commissioners voted by individual ballot to place Items 6 and 8 on the consent agenda.
• No one signed up to speak on either Item 6 or Item 8.

• Chairman Gleeson asked for a motion to approve the consent agenda.
• A motion was made and approved.

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

• Only one person, Jeff Walker, signed up for Public Comment.

1.1 Jeff Walker, member of Windermere Oaks Water Supply Corporation

• Jeff Walker, a board member since 2003, reports on the status of WOWSC's rate appeal six months post-approval.
• Initial reduction in Walker's bill from $165.11 to $7.21, excluding a $39.21 surcharge for legal fees.
• Unforeseen financial impact leads to an 80% revenue reduction, creating significant operational challenges.
• WOWSC has been running a deficit since the rate appeal and is currently operating with approximately $10,000 in debt each month.
• Lack of revenue affects the ability to comply with a concurrent compliance order, particularly financial audits.
• Walker requests the Commission's attention and possible action to address the financial burdens.

Items 2-4

• Items 2-4 were Not Discussed

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

• Chairman acknowledges receipt on the Braunig CPS issue, submitted on the 19th.
• Mention of a potential change in the notice of suspension of operation date to March 1, 2025, which is seen as beneficial.
• Request for any updates on the ongoing negotiations or willingness of CPS to adhere to the new proposed date.
• Deadline for receiving an answer from CPS is noted to be sometime next week.

5.1 - ERCOT's Davida Dwyer with updates on report

• Under the protocols, NSOs had to be provided at least 150 days before the proposed retirement date by our calculation, that's October 2.
• CPS has been receptive to the question about whether or not they're willing to do it.
• CPS is investigating whether or not they have the ability to change.
• Based on the filing, it would be a good outcome, and hope CPS can find a way to accommodate that.

5.2 - Commissioner Glotfelty's thoughts on ERCOT's report

• Addressed the interrelation of RMR and IROL issues in the same general location.
• Emphasized the need for a coordinated solution rather than treating the issues as separate.
• Suggested reconductoring lines to reduce congestion as a potential quick solution.
• Acknowledged that while ERCOT cannot implement these solutions alone, utility involvement is necessary.
• Proposed comprehensive discussions and solutions rather than piecemeal approaches.
• Mentioned recent discussions and speeches about the benefits of reconductoring lines.
• Requested updates on ongoing negotiations with CPS.

Item 6

• Item 6 was Not Discussed

7 - Project No. 34677 – Reports of the Independent Market Monitor for the ERCOT Region

• Reports of the Independent Market Monitor for the ERCOT region
• Staff filed a memo in this docket

7.1 - Commission Staff's Harika Basaran on IMM report & memo, 34677

• Harika Basaran presented the state of the market report, which includes 15 or 16 recommendations.
• A table was created summarizing whether the staff supports, is neutral, or disagrees with each recommendation and the reasoning behind these positions.
• Recommendations are categorized into multiple 'buckets':

• Policy:
• Involves Commission-level decisions.
• Includes topics like net metering and deadlines for certain initiatives.
• Answer Reserves:
• Ongoing discussions between IMM and ERCOT.
• Multi Interval and Load Zone Changes:
• Significant changes to the market system that require more data and should not be rushed before RTC is stable.
• Minor Issues:
• Progress is already being made on these with current NPRRs.
• Can proceed if they do not delay RTC and have agreement from ERCOT and stakeholders.

• Comfort with staff determining the schedule for these changes and addressing issues.

7.2 - Commissioner Glotfelty's thoughts on IMM report & memo, 34677

• Commissioner Glotfelty agrees with working on how issues are addressed.
• Acknowledges the IMM report as an improvement, with thoughtful, model-based insights aimed at market efficiency. Finds report beneficial for market efficiency.
• Expresses some disagreement with parts of the memo but appreciates the overall effort.
• Highlights the importance of modifying TCOS away from the 4-CP method, predicting significant discussion around this point.
• Emphasizes the need to address allocation of costs and rate design proactively, due to load growth from crypto miners, AI data centers, and other infrastructure needs.
• Voices concern that future transmission infrastructure costs could be disproportionately borne by small business and residential consumers without early discussions.

7.3 - Commissioner Jackson's thoughts on IMM report & memo, 34677

• Commissioner Jackson emphasized the importance of establishing a process for managing data and information.
• Discussed the concept of continuous improvement and evaluating data to identify potential challenges.
• Stressed the need for successful organizations to manage risk and change effectively.

7.4 - Deputy Executive Director, Barksdale English gives clarification on Commission Staff's memo, 34677

• Commission Staff is supportive of opening the dialogue about 4-CP.
• There isn't a uniform opinion among the Commission Staff on moving away from 4-CP.
• Commission Staff has not taken a formal position on the issue.
• It's a good time to review the decision made 20 years ago regarding 4-CP.
• The goal is to determine if the decision remains correct or if there should be a shift to a new approach.

Item 8

• Item 8 was Not Discussed

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

• Focus on reliability plan for Permian Basin under PURA section 39.167.
• Commissioner Cobos and Commissioner Hjaltman have memos related to this project.
• Commissioner Cobos is invited to present her memo first by Chairman Gleeson.

9.1 - Commissioner Cobos lays out her memo, 55718

• Commissioner Cobos filed a memo with a modified recommendation for the Permian Basin reliability plan.
• The primary goal is to preserve optionality on import paths into the Permian Basin and continue evaluation of EHV, particularly 765 kV transmission lines.
• Clarification that prior assumptions of interchangeable import paths were incorrect; further engineering analysis would be needed for interchangeability.
• ERCOT's updated recommendation involves authorizing TSPs to prepare eight CCN applications: 5 for 345 kV and 3 for 765 kV import paths.
• Recommendation aims to provide TSPs certainty and prioritize critically important import paths to mitigate delays, landowner impacts, and consumer costs.
• Mandatory date of May 1, 2025, is set for an automatic pivot: if no EHV decision by then, proceed with 345 kV applications for the five import paths.
• Identification and prioritization of import paths to serve 2030 load will mitigate potential delays and ensure readiness by day one of 2030.
• Setting three critical deadlines post final order to ensure efficient proceedings and transparency:
• ERCOT must file notice within 10 business days,
• TSPs must respond within 15 business days,
• TSPs and ERCOT to file a final report post-negotiation within 15 days.
• Two projects to be opened by Commission staff:
• Identification of TSPs,
• Oversight of Permian Basin reliability plan.
• Recommendation for a third-party consultant to monitor completion of the plan, paid for by TSPs, based on a successful model from a previous large infrastructure build out.

9.2 - Commissioner Hjaltman lays out her memo, 55718

• Memo has three components: cost, landowner involvement, and the process outlined by Commissioner Cobos.
• Concern about the costs of the eight lines; TSPs should be mindful of costs and expenses should be recorded as regulatory assets, though recovery is not guaranteed.
• Landowner involvement should not be eliminated as an option.
• Ensure that final determinations are made through a contested case to provide finality and decisive decisions.
• Requested Commission Staff to develop a process for the outlined items and bring it back for discussion in a future meeting.

9.3 - Commissioner Glotfelty's thoughts on the Commissioner's memos, 55718

• Commissioner Glotfelty expressed a continued preference for implementing 765 kV lines over 345 kV lines.
• Emphasized that utilities, not ERCOT, have the expertise in routing, siting, building, and energizing lines.
• Warned against over-involvement of ERCOT in the process, which could cause delays.
• Highlighted economic benefits, estimating savings between $100 and $300 million per year in West Texas congestion reduction.
• Discussed line efficiency, noting that 345 kV lines have four times more line losses compared to 765 kV lines.
• Presented a case for visionary thinking, mentioning historical discussions about 765 kV lines since early 2000s and CREZ in 2010.
• Addressed cost concerns, emphasizing that global steel price fluctuations impact project costs more significantly than application costs.
• Supported moving forward with the project, seeing long-term benefits and potential to boost economic development and wages in the Permian Basin.
• Advocated for 765 kV lines due to using less right of way, which impacts fewer landowners.

9.4 - Commissioner Jackson's thoughts on Commissioner's memos, 55718

• Supportive of preserving optionality.
• Opportunity for Texas to envision the future grid.
• Texas' growth presents unique opportunities.
• Importance of gathering comprehensive data and stakeholder engagement.
• Better data leads to better science, policy, and opportunities.
• Focus on evaluating benefits of EHV (extra-high voltage).
• Emphasis on starting with local transmission projects.
• Commended Texas for potentially having the grid of the future.
• Looking forward to working on 765 kV and 345 kV transmission lines.
• Overall, in favor of the proposed plans.

9.5 - Commissioner Cobos' thoughts on Commissioner's memos, 55718

• Importance of completing the EHV study by ERCOT.
• Need for comprehensive data on grid infrastructure, including costs and benefits.
• Significance of ERCOT's statewide plan and its impact.
• The role of EHV in the Permian Basin reliability plan.
• Importance of keeping EHV on the table while ensuring imports for the Permian.
• Permian Basin's critical importance to the state's economy.
• Approval of a plan to get local projects started for the Permian.
• Balancing the need for future-proof infrastructure with the immediate needs of the Permian Basin.
• Concern about costs incurred by ratepayers for preliminary project preparations.
• Tracking expenses through regulatory assets to ensure reasonableness and prudency.
• Prioritizing projects to mitigate landowner impacts.
• Recognizing the importance of landowner engagement in the process.
• Comparison of electrical infrastructure planning with pipeline construction in terms of long-term economics.
• Importance of timely completion of high voltage lines to meet the Permian's immediate needs.

9.6 - Chairman Gleeson's thoughts on Commissioner's memos, 55718

• Chairman Gleeson emphasized the importance of balancing growth with meeting demand.
• Acknowledged the need to be accountable to timelines, ensuring plans work for all customers.
• Customers have expressed willingness for 765 kV if data supports it, with a primary concern on timing.
• Plan ensures desired build out regardless of the chosen path (i.e., 765 kV or other).
• Chairman Gleeson aimed to confirm agreement on key points from Commissioner’s memos.
• Confirmed agreement on Commissioner Cobos' memo with the May 1 deadline.
• Confirmed agreement on Commissioner Hjaltman's memo allowing TDUs to book the regulatory asset.
• Agreement on moving forward with ERCOT's last addendum modifications on the plan.
• Chairman sought clarification on Commissioner Hjaltman’s preference for a contested docket versus a project.

9.7 - Commissioner Hjaltman gives clarification on her memo, 55718

• Staff to report back with recommendations after steps five, six, and seven as specified in the memo.
• Clarification that steps five through seven are pending the final Commission Order.

9.8 - Motion to Direct OPDM to Draft Order Consistent with Commissioner's Memos, 55718

• Motion to direct OPDM to draft an order consistent with Commissioner Cobos and Commissioner Hjaltman's memos and the discussion.
• Motion was made and approved.

Items 10-20

• Items 10-20 were Not Discussed

21 - Project No. 56793 – Issues Related to the Disaster Resulting from Hurricane Beryl

• Chairman Gleeson called up Agenda Items 21 and 22 together.

21.1 - Executive Director, Connie Corona gives update on Houston workshop, 56793

• Finalizing agenda for October 5 workshop in Houston.
• Workshop to be held at Harris County Department of Education, Ronald Reagan building, starting at 9:00 am. 
• Public invited to attend and provide verbal comments.
• Will hear from subject matter experts on storm preparation and response best practices.
• Importance of conducting the workshop in Houston to understand local perspectives on resiliency and reliability.

22 - Project No. 56822 – Investigation of Emergency Preparedness and Response by Utilities in Houston and Surrounding Communities

22.1 - Connie Corona on RFI response, 56822

• Collection of RFI information nearly complete with a few items left to finalize.
• Preparation of the investigation report will begin, with completion expected by November.

22.2 - Chairman Gleeson Adjourns Meeting

• Chairman Gleeson adjourned the meeting as there was no further business to discuss