Commissioner Hjaltman recused from items 5, 14, and 15.
Items placed on consent agenda through individual ballot: 3, 6, 7, 10 through 15, 17, 18, 20, and 36
Item 4 will not be removed from the consent agenda.
Chairman Gleeson requested a motion to approve the consent agenda.
The motion to approve the consent agenda with unanimous approval.
▶️ 1 - Public comment for matters that are under the Commission’s jurisdiction, but not specifically posted on this agenda
▶️ Cyrus Reed - Lone Star Chapter, Sierra Club - Petition to Governor Abbott
The petition has over 1100 signatures from Texans across the state since its launch in October.
The petition outlines four demands for a clean, reliable, resilient, and affordable energy grid.
Invest in a modern electric grid, including the development of regional microgrids, local clean energy, energy storage, and strengthening transmission systems.
Pay Texans the same as wealthy corporations for using less electricity during energy conservation calls.
Increase funding and efficiencies for energy savings programs to lower electric bills and reduce stress on the grid.
Remove anti-renewable policies that hinder solar energy and energy storage development.
Reed reminded the Commissioners about the need for rulemaking on backup power packages and energy efficiency programs, which are within ERCOT's purview.
▶️ Joe Jimenez - Former President of Windermere Oaks WSC
Judges acknowledged Texas Business Code requirements for financial defense of volunteers, contrasting with PUC commissioners and staff.
A rate payer representative's comment was discussed regarding acceptance of a rate increase under 25%, which was not offered as a resolution during the rate process.
On April 11, 2023, a PUC staff attorney expressed a subjective preference for finite financial limits on legal debts incurred by Windermere, though no legal basis for such limits exists.
Jimenez suggested considering financial limits on plaintiff attorney fees to balance legal costs, questioning how this would be received by Texas plaintiff attorneys.
Highlighted inconsistency between PUC actions and Texas legislature's goals for public utility financial solvency.
▶️ 2 - Docket No. 52370; SOAH Docket No. 473-22-07686.WS – Application of East Houston Utilities, Inc. for Authority to Change Rates
No corrections or exceptions were filed in the docket.
The Chairman filed a memo expressing concerns over the lack of record support for the settlement, especially concerning affiliate expenses.
The recommendation was made to deny the application due to insufficient evidence supporting the settlement.
Guidance was provided for future base rate cases for East Houston Utilities.
The case has been ongoing for three and a half years, attributed not to staff error but to challenges in settlement.
A motion was introduced to deny the application of East Houston Utilities for the reasons cited in the memo and previous discussion.
Document management was directed to draft an order in line with the Commission's decision.
The motion to deny the application was with unanimous approval.
4
Not Discussed
▶️ 5 - Docket No. 55577; SOAH Docket No. 473-24-15740.WS – Application of Aqua Texas, Inc. to Amend Its System Improvement Charges under 16 TAC § 24.76
A proposal for decision (PFD) was presented by the State Office of Administrative Hearings (SOAH).
Aqua Texas filed exceptions to the PFD.
The Administrative Law Judge (ALJ) declined to make changes to the PFD.
The Chairman filed a memo disagreeing with the burden of proof met by Aqua Texas.
The Chairman agrees with the ALJ's conclusions and provided modifications and clarifications.
Lack of sufficient documentation by Aqua Texas was a key issue.
One participant was recused from the discussion.
Motion to adopt the PFD with changes outlined in the memo and discussion.
Motion was approved with unanimous approval.
▶️ 8 - Docket No. 56350 – Application of Quadvest, LP to Amend Its Certificates of Convenience and Necessity in Harris County
The meeting discussed Quadvest's application to amend its certificates in Harris County, specifically regarding the appeal of Order No. 8.
The Chairman recommended granting the appeal and lifting the abatement on the case.
The Chairman filed a memo to clarify differences between this case and a previous case involving Crescent MUD.
A motion was entertained to grant the appeal of Order No. 8 as discussed in the preceding memo and discussion.
Motion was approved with unanimous approval.
▶️ 9 - Docket No. 56535 – Petition of Maurice Williams, Kimberly Williams Barnett, and Kristi Williams Neyes to Amend City of Royse City’s Certificates of Convenience and Necessity in Collin County by Stream
A proposed order was presented with no corrections or exceptions filed.
The Chairman filed a memo to address a finding of fact and propose delegation to the Office of Docket Management.
Acknowledgment of the usefulness of the memo in clarifying considerations in similar cases.
Motion to approve the proposed order was introduced.
Motion was approved with unanimous approval.
▶️ 19 - Docket No. 57244; SOAH Docket No. 473-25-04144 – Application of Southwestern Public Service Company for Approval of a Purchased Power Agreement with Wildcat Ranch Energy Storage, LLC and for Related Relief Severed from PUC Docket No. 55849
A SOAH proposal for decision (PFD) was presented.
SPS filed exceptions to the PFD.
The SOAH Administrative Law Judge (ALJ) declined to make changes to the PFD.
The Chairman filed a memo proposing changes to the findings of fact.
The recommendation is to adopt the PFD with the Chairman's proposed changes.
The recommendation includes denying SPS's request for approval of the PPA.
Motion to approve PFD with the outlined modifications was moved and seconded.
Motion was approved with unanimous approval.
Permission granted to defer Item 16 to a future meeting.
21-22
Not Discussed
▶️ 23 - Project No. 55999 – Reports of the Electric Reliability Council of Texas
▶️Chad Seely – ERCOT Sr. VP of Regulatory Policy - Update on work with CPS Energy
Continued collaboration with CPS Energy on finalizing the unit 3 RMR agreement, which has not yet been executed.
Budget costs for unit 3 increased by $8 million, and overall costs for all three units increased by $11 million, due to inspection, equipment, and compliance costs.
Despite increased costs, unit 3's benefits outweigh the value of loss load from potential rotating outages.
Finalizing RMR agreement with CPS by addressing inspection process, communications, and emissions issues.
Plan to execute the RMR agreement with CPS in February to begin outage inspections in March.
For units 1 and 2, working with partners to relocate mobile generation units from Houston to San Antonio with a cost estimate of $50 to $55 million.
Scrutinizing costs for relocating mobile generation assets to ensure high service levels for ERCOT in San Antonio.
Seeking a special board meeting in late February or early March for final analysis on units 1 and 2 versus mobile generation solutions.
RFP for competing solutions mostly unsuccessful due to eligibility or cost issues.
Ongoing efforts to accelerate South Texas Project No. 2 transmission projects anticipated completion in 2029.
Obligation to provide an exit solution within 90 days after entering an RMR agreement.
Mobile generation units are targeted to be available by early summer, potentially in stages.
The release of the capacity demand and reserve report was delayed last December due to new rule changes.
The report presentation is being revamped to meet the new reporting requirements.
ERCOT plans to come out with a market notice announcing a release date for the report.
Expected time frame for the report release is the week of February 10th, with an exact date provided in the market notice.
24
Not Discussed
▶️ 25 - Project No. 55718 – Reliability Plan for the Permian Basin under PURA §39.167
▶️ Kristi Hobbs – ERCOT VP of System Planning & Weatherization - Study & Cost Comparison Filed Document
Emphasis on the importance of transmission planning due to increasing renewable energy penetration, generation retirements, and substantial load growth in Texas.
Historical context of Texas' voltage system changes, noting the last change from 138 kV to 345 kV in the 1960s.
Permian Basin study initiated in December 2023 showed a 43% increase in energy needs compared to major urban areas, signifying significant transmission investment requirements.
Comparison between 345 kV and 765 kV transmission plans: the 765 kV requires fewer upgrades, offers greater efficiency, and projects lower energy costs in the long term.
Discussion of live/hot work for transmission upgrades and its increased cost and difficulty due to system dependency and limited outages.
Cost estimates for new construction: approximately $31 billion for the 345 plan and $33 billion for the 765 plan, narrowing to a $1 billion difference with live work considerations.
Economic analysis highlights: the 765 kV plan promises annual energy cost savings of approximately $229 million and $28 million in production cost savings.
Line loss reductions with the 765 kV plan are significant, equating to reduced energy loss equivalent to a 128 MW generation resource, saving $16.2 million annually.
The 765 kV plan increases transfer capability and improves system stability, especially in regions like West Texas, with a noted 13% improvement.
Sensitivity study on load forecasts shows 765 kV as optimal even with lower-than-expected load materialization, continuing to provide substantial benefits.
Discussions on flexibility of 765 kV in adapting to unknown future load and generation locations, acting as a 'power highway'.
Considerations of supply chain issues highlighted, with 765 kV supply ramp-ups in line with industry trends and anticipations for Texas.
▶️Barksdale English – PUC Deputy Executive Director - Stakeholders Workshop, 55718
Staff plans to hold a workshop with stakeholders focusing on supply chain discussions.
Discussion on using MISO for cost comparisons and whether different data is needed.
Feedback from stakeholders indicates some TSPs believe costs could be lower than estimated.
Exploration of lessons learned from MISO's 765 kV preparations and potential adoption of procedures.
Importance of setting standards for higher voltage utilities to ensure efficiency and interconnectivity.
Comparisons between the prior CREZ project and the current statewide plan to highlight differences and benefits.
Advantages of a 765 kV system over a 345 kV system regarding efficiency in moving power to regions like the Permian Basin.
The 765 kV system may have faster build-out potential compared to 345 kV due to fewer required new miles.
Clarification on the size and structure of 765 kV towers compared to 345 kV towers.
Discussed reaching out to other regions with 765 kV systems for insights on system resiliency and benefits.
The necessity of building a comprehensive 765 kV loop instead of piecemeal sections for optimal power transfer and future scalability.
Urgency highlighted due to current system capacity limitations and rising congestion costs, suggesting immediate action is ideal.
▶️Prabhu Gnanam – ERCOT Grid Planning Director - Building transmission for system demand, 55178
Building transmission now at 345 kV is crucial to meet current system demand and avoiding higher costs later.
Delaying the construction of 765 kV lines will result in added expenses in the future.
Investing in infrastructure today is both for current and future system capabilities.
Early construction is akin to building a larger highway initially, preventing future congestion and additional costs.
The approach involves balancing immediate needs with long-term infrastructure planning.
▶️Harika Basaran – Commission Staff - Update on ERCOT analysis
Staff compiled questions for ERCOT based on the draft and meeting discussions.
Questions will be posted this afternoon with responses requested by February 14.
A workshop is planned for March 7 to discuss responses.
Recommendations will be made for the April Open Meeting, with potentially two meetings in April.
Discussion included considerations for supply chain impacts, scheduling factors, and examples of system resiliency.
Stakeholder feedback on immediate vs. future implementation of 765 kV systems was also highlighted.
▶️Chairman confirms Commissioner Jackson as point of contact for Permian Basin, 55178
Commissioner Cobos is leaving, creating a need for a new point of contact.
Commissioner Jackson has been confirmed as the new point of contact for the Permian Basin.
The focus is on ensuring Texas has adequate generation and transmission capacity for the future.
Strong communication with PUCT is crucial for Texas RE's activities, with quarterly meetings being instrumental.
NERC and Texas RE identified eight risk priorities for 2025, split between energy and security issues.
Energy risk priorities focus on transmission planning, inverter-based resources, and validating generator model data.
Emphasis is on extreme weather preparations, including new federal winterization requirements.
Focus continues on facility ratings and ensuring entities have robust programs.
Security priorities include cybersecurity vulnerabilities, remote connectivity, and supply chain security.
Low impact resources have become a focal point due to potential security threats.
White House’s energy modernization plan highlights supply chain risk for new energy technologies.
Increased attention to physical security of critical infrastructure due to uptick in events.
▶️ Mark Henry – Texas RE Chief Engineer & Director of Reliability Outreach - Long term reliability assessment
The LTRA is a cooperative effort conducted since the early 1990s.
Distinction between the LTRA and ERCOT's capacity demand reserve (CDR) report, with LTRA having a broader scope and using older data.
The LTRA highlights elevated risk for ERCOT in 2026 due to increasing demand growth.
Observations include a national upward trend in demand growth and shifts from dispatchable generation to solar, batteries, and wind.
Concerns about supply chain issues affecting transmission and construction outside ERCOT.
Growth in transmission nationally with an addition of 9,000 miles reported.
ERCOT is experiencing significant demand growth, projecting 4.6% growth from 2025 to 2029.
ERCOT's generation mix heavily reliant on solar and batteries, necessitating awareness of limitations.
Emphasis on planning methods, demand response, and use of batteries in ERCOT.
Recommendations focus on policy changes for retirement management, streamlining generation and transmission permits, and coordination between gas and electric industries.
Importance of maintaining essential reliability services amid changes in the resource mix.
NERC's ongoing efforts in reliability standards development, monitoring, and enforcing activities.
▶️ 28 - Project No. 57004 – Texas Energy Fund Grants for Facilities Outside of the ERCOT Region
▶️ Allison Fink – Commission Staff - Recommendation of adoption for TX Energy Fund, 57004
The staff recommends that the program should not allow new generation projects as eligible types.
The program will only cover capital investments, excluding operations or maintenance costs.
Subcategories under subsection b 3 (a through d) are defined as exclusive lists, not examples.
The legislative authorization focuses on modernization, weatherization, reliability and resiliency enhancements.
New generation is not included as an objective in the statutory language.
A $1,000,000,000 allocation was made to this program, less than amounts allocated for new generation in other programs.
Battery projects are considered eligible if they support transmission and distribution rather than act as stand-alone new generation assets.
▶️ David Smeltzer – Commission Staff - Standards on Existing Facilities, 57004
Emphasis on using existing facilities and enhancements like storage for resiliency without high costs or creating new facilities.
Proposal to rework the draft for fair and consistent application to technologies like small generators.
Clarification that small generators or batteries shouldn't be used for backup in non-grid assets like town halls or hospitals.
Intent to use technologies in ways that support grid resiliency in accordance with the statute.
Consideration of wording adjustments to ensure clear guidelines for funding applications related to these technologies.
Discussion on implementing reporting measurements and metrics for grant recipients to ensure funds for energy storage and mobile generation are used appropriately for resiliency.
Clarification that grant funds are intended only for backup, resiliency, and reliability, not for ERCOT market activities.
Suggestion to add further clarification on the CCN applicability in the language of the rules for the benefit of future program participants.
Maximum amount per applicant for funding capped at $200 million, regardless of the number of projects.
Discussion on ensuring that smaller entities have access to funding by not carving out specific funds for them but relying on the distribution of available funds after larger entities.
The subcategories of grant programs are exclusive, driven by legislative intent to prioritize quick implementation for mitigation and enhanced resiliency.
