Discussed PUCT sunset bill highlights, including interconnection allowance for generation resources and dispatchable reliability reserve service (DRRS).
DRRS designed to enhance resource adequacy, needing a resource that can run for at least four hours and come online within two hours.
Addressed large virtual currency mining, with 11 companies registered, representing 18 facilities and approximately 3,000 megawatts.
System resiliency plans developed post-Winter Storm Uri, with Oncor and Entergy having approved plans.
Permian Basin Reliability Plan focuses on regional transmission planning due to increasing loads from oil, gas, data centers, and crypto mining.
Texas Energy Fund projects include 18 in due diligence, representing about 9,800 megawatts of capacity.
Anticipation for rule adoption on outside ERCOT grants at upcoming meetings.
Report submitted before legislative sessions to include legislative recommendations for electricity transmission standards.
Conducted an investigation into Hurricane Beryl to improve communication and outage map reliability.
Chairman Gleeson was invited to answer any questions post testimony, with other testimonies to follow before the open questions session.
Honored to be appointed by the Governor in December 2024, bringing experience from working in the Senate since 2015.
OPUC achieved $2.2 billion in savings for residential and small commercial consumers in 2024.
Residential consumers in Texas pay higher rates compared to commercial and industrial users.
Residential and small commercial load growth increased by less than 25% over the past ten years while industrial load surged by 250%.
Transmission cost allocation should reflect usage by each consumer class.
Independent market monitor recommends reexamining the four coincident peak (4CP) methodology annually.
Voluntary demand response programs could benefit residential and small commercial consumers during peak periods, but lack participation due to required smart appliances.
Encourages incentive stacking to help low-income consumers participate in demand response programs.
Discusses the potential benefits of the aggregated distributed energy resource pilot program.
Recommends large loads seeking grid connection to submit deposits to protect residential and small commercial consumers from unexpected closures.
OPUC focuses on litigation to address the impact of rate case legal expenses on consumers.
Exploration of cost-sharing methods between utilities and consumers to reduce rate case expenses.
Emphasized the need for reliable energy transmission at an affordable price as Texas continues to grow.
▶️3 - Chair Schwertner to Woody Rickerson, COO - Load Forecast Accuracy and Growth Trends
The discussion focused on the accuracy of load forecasts and their impact on residential versus industrial consumers.
Concerns about the accuracy of information received from Transmission Distribution Utilities (TDUs) were raised.
There is ongoing work to improve load forecast accuracy, possibly including legislative action.
Questions were posed about whether the current load forecast of 130 to 150 is more solid than last summer or if it is increasing faster.
Load forecast includes a significant amount of data center load, but not all of it is considered in the forecast.
Discussion included a figure of 83 gigawatts for data center load, indicating a large component of the load forecast.
▶️3 - Chair Schwertner to Thomas Gleeson, PUCT, Invited Testimony - Transmission Needs and Funding Challenges
Transmission planning needs to align with rapid load growth, particularly in areas like the Permian where additional capacity is crucial.
Current planning and legislative input do not require urgent changes but transparency and evolving processes are encouraged.
The cost of upgrading to a high voltage backbone is under scrutiny, with emphasis on potential benefits and consideration of cost allocation changes.
Socialization of transmission costs is debated, with a possible move from the traditional 4CP methodology to more direct cost-sharing by beneficiaries.
The impact of large loads connecting directly to generating facilities is discussed in relation to grid reliability and resilience.
Concerns about 'behind the meter' arrangements leading to less electricity on the grid, which could affect reliability during emergencies.
The importance of ensuring reliability in emergencies, with agreements from large consumers to use backup power to maintain grid stability.
Regulatory attention on ensuring grid reliability remains a priority, even as businesses seek rapid access to power.
ERCOT's focus is on reliability and grid resilience, especially following past events like Winter Storm Uri.
▶️3: Chair Schwertner to Woody Rickerson - Legislative Action on Private Load Contracts and Grid Availability
Discussion on large load forecast and operational concerns related to legislative actions.
ERCOT currently lacks differentiation between types of loads; all loads are considered firm load.
There is a need to legislate a distinct definition for certain types of loads, such as private contracts, to improve grid management.
Intent to work closely with experts to ensure legislative actions support the grid's future availability.
▶️3 - Senator Phil King to Thomas Gleeson, PUCT, Invited Testimony - Improving PUC Efficiency to Keep Up with Industry Changes
Concern regarding the slow pace at which the Public Utility Commission (PUC) completes tasks requested by the legislature.
Mention of significant technological advances, including AI, which underscore the need for faster PUC adaptability.
Acknowledgement that many tasks have remained incomplete for years despite being initiated.
Discussion on the challenges faced by the PUC, including resource constraints and bureaucratic bottlenecks.
A current increase in staff size from 60 to 250 post-Uri has been noted, but the workload increase outpaces employee growth.
Advocacy for systematic changes in PUC's operational processes to better address these challenges and improve efficiency.
Concerns raised about opportunities for third-party manipulation due to the slow implementation of changes.
Question regarding the functionality of the competitive retail market in Texas and whether it operates as an oligopoly.
Reassurance given that the market is competitive compared to other regions, though distribution of costs remains a concern.
▶️3 - Senator Phil King to Benjamin Barkley - Concerns Over Cost Overruns in Statewide Transmission Projects
Concerns were raised about past cost overruns experienced during the CREZ project, which ended up costing significantly more than initially estimated.
A 20% additional estimate has been incorporated into current projects to accommodate potential deviations and engineering challenges.
Utilities like Oncor and AEP have the discretion to build transmission using 765 kV if they believe it suits their needs.
Texas is building transmission lines more than any other state currently.
ERCOT serves as a planning authority and coordinates transmission plans across different service providers to avoid overbuilding and ensure efficiency.
The Regional Transmission Plan (RTP) this year compares current voltage levels with potential usage of 765 kV to address increased load and transmission demands.
Statewide planning is suggested to have more efficiencies by optimally balancing transmission needs versus regional planning.
TDUs can use 765 kV voltage if they determine it suits their franchise area.
▶️3 - Dean Zaffirini to Thomas Gleeson, PUCT, Invited Testimony - PUC Actions on Extreme Weather Events and Legislative Needs
The PUC has implemented steps addressing communication and outage monitoring post-extreme weather events, such as hurricanes.
Weatherization standards are enforced on both generation and transmission companies, improving grid performance.
The grid has performed well since 2021, even though it hasn't faced a severe winter storm like Uri.
Commitment to continuous analysis and improvement of the grid's performance, avoiding complacency.
There's a need to review rules concerning large loads and behind-the-meter generation, particularly with the growth of activities like crypto mining.
Concerns exist that behind-the-meter generation in large loads could affect transmission cost allocation and require policy reviews.
Current frameworks like 4CP may need reevaluation to better fit current and future grid goals.
Potential rule gaming by splitting operations into subsidiaries is recognized, but no evidence of this behavior is seen so far.
Large load registration includes ongoing monitoring for transparency and reliability, specifically concerning large crypto miners.
Consideration for expanding registration requirements exists, but depends on policy proposal details.
▶️3 - Dean Zaffirini to Woody Rickerson - Cost Management and Route Planning for Permian Transmission Project
The projected total cost for the Permian transmission project is estimated to be over $30 billion.
The map presented appears to show straight lines for transmission routes.
Question raised about how ERCOT is managing increased costs due to potential disputes over transmission route planning.
Rickerson explained that the straight lines are representations between points.
A 20% cost factor has been added to account for potential routing issues, aiming for a more accurate estimation of the project cost.
▶️3 - Dean Zaffirini Questions for Benjamin Barkley - Overview and Outcomes of PUC Litigated Rate Cases
In fiscal year 2024, 78 contested cases were litigated.
These cases involved disputes that typically reached the State Office of Administrative Hearings or the Public Utility Commission.
Outcomes included either a decision by the PUC or a settlement of the cases.
Approximately 40 cases were closed in the previous year.
About 44 cases were related to electricity, and 34 were related to water and wastewater utilities.
▶️3 - Chair Schwertner to Woody Rickerson - Supply Chain Concerns and Cost Distribution for 765 kV Projects
TDUs have raised concerns about supply chain issues for 765 kV projects, particularly in relation to geographic service territories.
The discussion includes questions on whether supply chain issues are currently affecting the July time frame.
Woody Rickerson mentions past concerns but states that TSPs have reserved equipment and are in line with vendors.
Rickerson suggests that acquiring equipment for 765 kV projects may not be more difficult than for 345 kV projects.
There is indication that there might be greater demand for equipment used in 345 kV projects compared to 765 kV.
▶️3 - Chair Schwertner to Thomas Gleeson, PUCT, Invited Testimony - Cost Allocation of 765 kV Transmission for Large Loads and Ratepayers
Debated whether the cost burden should be on large loads or the geographic region ratepayers, especially for new lines in the Permian Basin.
Emphasized the importance of transparency in cost allocation on bills.
Highlighted the need to adhere to cost causation principles.
Pointed out the flat residential load versus skyrocketing industrial demand, driving transmission needs.
Called for a robust discussion on how the additional transmission should be paid for.
▶️3 - Senator Nathan Johnson for Woody Rickerson - Cost Comparison Between 765 kV and 345 kV Transmission Plans
Negligible cost difference between 765 kV and 345 kV transmission plans.
Familiarity with 345 kV might be a factor for choosing it despite equal costs.
765 kV technology is not new and is used globally.
Potential need to build more 345 kV lines in the future if load growth continues.
765 kV provides higher transfer capability than 345 kV.
765 kV requires fewer lines for large loads compared to 345 kV.
Risk of overbuilding with rapid technology changes considered.
Scalability of 765 kV plan makes it suitable even with reduced load estimates.
765 kV expected to be fully utilized over time.
Load growth seen as a potential market signal to build more generation.
The need for new thermal dispatchable generation is emphasized.
▶️3 - Senator Campbell for Woody Rickerson explaining Benefits and Costs of 765 kV Lines to Texans
Emphasized the need for transparency, flexibility, and the potential to increase electrical load capacity with fewer lines.
Explained the importance of making the information understandable for the general public.
Discussed the possibility of subsidizing the costs across Texas, and how residents would benefit from it.
Highlighted Texas' rich wind and solar resources compared to its current congestion issues.
Stressed that utilizing these high voltage lines could alleviate congestion.
Reduction in congestion is expected to result in lower costs for electricity consumers.
▶️3 - Senator Campbell for Thomas Gleeson, PUCT, Invited Testimony - Explaining High Voltage Line Benefits in Simple Terms
High voltage lines reduce congestion and lower electricity prices.
Investment in infrastructure, such as high voltage lines, supports economic development.
Discussion on connection possibilities with Texas, East, and West grids, and correction that both 765 and 345 lines could be used for connectivity.
Changes in contract vetting processes were implemented for better due diligence, highlighted by lessons from past issues with NextEra and Oncor.
Comparison of high voltage infrastructure to water pipes: bigger lines offer long-term savings.
Importance of planning infrastructure for future state growth, with lessons from past planning oversights such as the I-35 Corridor.
High voltage is recommended for major power transmission corridors, while lower voltage lines might be sufficient for less developed areas.
A decision about adopting 765 vs 345 lines is expected by April, with 345 as the default to maintain the status quo.
Various senators and committee members expressed the need for strategic planning to keep up with state growth and power demands.
