Frame

Meeting Summary - 02/20/2025 Public Hearing - Exemption Process for ERCOT Technical Standards Rulemaking

Grid Monitor AI
02/20/2025

<div class="news-image-container"><img src="/storage/docs/2025/02/02-20-2025-PUC_Hearing_hero.png" /></div> <h3><a href="/sharing/?token=72c1834f-3ba6-444b-9511-c25b5eb3b7ef">▶️</a>1 - Allison Fink - Commission Staff - Welcome</h3> <ul> <li style="font-weight: 400;" aria-level="1">Public hearing for project 57374, Rule 25, 16 TAC 25.517 and amendments to 16 TAC 22.251.</li> <li style="font-weight: 400;" aria-level="1">Comments from this hearing will be summarized and considered equally with written comments in the final order.</li> </ul> <h3><a href="/sharing/?token=96b55fe5-85c3-4633-8474-53859d98c9aa">▶️</a>2 - Eric Goff - NextEra</h3> <ul> <li style="font-weight: 400;" aria-level="1">Eric Goff addresses the complexity and potential unforeseen implications of the proposed rule.</li> <li style="font-weight: 400;" aria-level="1">He questions the necessity of the rule and encourages the Commission and Staff to reconsider its implementation.</li> <li style="font-weight: 400;" aria-level="1">The rule's timing is linked to proceedings at ERCOT and discussions in NOGRR245.</li> <li style="font-weight: 400;" aria-level="1">Resource entities are already required to maximize their capabilities, which might resolve underlying reliability concerns.</li> <li style="font-weight: 400;" aria-level="1">NextEra has found ways to maximize wind resources unexpectedly, which could address concerns.</li> </ul> <h3><a href="/sharing/?token=fa002080-1c8d-418c-87fb-aa6ed235245f">▶️</a>3 - Meghan Griffiths - Invenergy Renewables</h3> <ul> <li style="font-weight: 400;" aria-level="1">Invenergy has developed around 5 GW of solar and wind capacity in ERCOT.</li> <li style="font-weight: 400;" aria-level="1">Comments were submitted with other energy sector players, expressing concerns over proposed rules 25.517 and 22.251.</li> <li style="font-weight: 400;" aria-level="1">Concerns include potential negative market impacts and loss of generation capacity, especially as ERCOT anticipates peak load demand reaching 50 GW by 2030.</li> <li style="font-weight: 400;" aria-level="1">The proposed rule lacks justification under the Administrative Procedure Act and no study has shown that existing resources pose a reliability risk.</li> <li style="font-weight: 400;" aria-level="1">The rule suggests a paradigm shift in regulations, conflicting with existing PUC rules protecting legacy resources.</li> <li style="font-weight: 400;" aria-level="1">Current rules exempt resources from compliance that risks equipment damage, and new regulations shouldn't retroactively apply.</li> <li style="font-weight: 400;" aria-level="1">The Commission's rules should comply with PURA, avoiding unnecessary regulations on industrial generation facilities.</li> <li style="font-weight: 400;" aria-level="1">No legal basis exists for retroactively applying new reliability standards on existing resources.</li> </ul> <h3><a href="/sharing/?token=2d4ca1c4-c838-4ae9-89eb-ea15e088e32a">▶️</a>4 - Juliana Sersen - Avangrid Renewables</h3> <ul> <li style="font-weight: 400;" aria-level="1">Clarified that not all retroactive rules are unconstitutional, and retroactivity doesn't invalidate a rule if a Texas statute allows it.</li> <li style="font-weight: 400;" aria-level="1">Cited Texas Code Construction Act presumption that statutes are prospective unless made retroactive explicitly.</li> <li style="font-weight: 400;" aria-level="1">Highlighted that a rule is retroactive if it impairs a vested right and needs statutory support for retroactive application.</li> <li style="font-weight: 400;" aria-level="1">Argued there is no statutory support for the proposed exemption process.</li> <li style="font-weight: 400;" aria-level="1">Mentioned existing resources with technical limitations have intrinsic exemptions under current rules.</li> <li style="font-weight: 400;" aria-level="1">Pointed out the lack of statutory authority to deny or qualify exemptions suggests nothing to appeal.</li> <li style="font-weight: 400;" aria-level="1">Requested consideration of these concerns to assess if the rulemaking is necessary and appropriate.</li> </ul> <h3><a href="/sharing/?token=a031a5fa-46cf-4636-92fe-4aefcfdb6216">▶️</a>5 - Laurie Block - TSSA/Solar Energy Industries Assoc.</h3> <ul> <li style="font-weight: 400;" aria-level="1">The associations support effective standards for preventing grid instability and exemptions based on technical and economic concerns.</li> <li style="font-weight: 400;" aria-level="1">They recommend deferring action on the rule due to issues with retroactive application of reliability requirements.</li> <li style="font-weight: 400;" aria-level="1">The proposal conflicts with the precedent of applying new standards prospectively.</li> <li style="font-weight: 400;" aria-level="1">Retroactive standards could create regulatory uncertainty and affect investments in generation assets.</li> <li style="font-weight: 400;" aria-level="1">The proposal contradicts recent NERC recommendations and could lead to reliability concerns if resources cannot comply.</li> <li style="font-weight: 400;" aria-level="1">Emphasized the need for ERCOT to study the impact of NOGRR245 before imposing new requirements.</li> <li style="font-weight: 400;" aria-level="1">Recommended waiting for a detailed reliability risk assessment from ERCOT before proceeding further.</li> <li style="font-weight: 400;" aria-level="1">If moving forward, they propose changes to ensure a reasonable and measured exemption process, including defining unacceptable reliability risks and considering compliance costs.</li> </ul> <h3><a href="/sharing/?token=ca36ab87-11c1-4c7a-8013-66a484ff63a5">▶️</a>6 - Jean Ryall - Advanced Power Alliance</h3> <ul> <li style="font-weight: 400;" aria-level="1">Concerns over regulatory uncertainty potentially leading to legal disputes over denied exemption requests.</li> <li style="font-weight: 400;" aria-level="1">Proposed process could negatively impact investment signals crucial for Texas grid development.</li> <li style="font-weight: 400;" aria-level="1">Exemption process should favor IBR owners to align with NERC's approach.</li> <li style="font-weight: 400;" aria-level="1">Retroactive compliance should allow exemptions for hardware limitations, following NERC and other markets' standards.</li> <li style="font-weight: 400;" aria-level="1">Exemption process should address situations where new standards cannot be supported by existing equipment.</li> <li style="font-weight: 400;" aria-level="1">Consideration of costs is crucial if resources can't be retrofitted and are disconnected, per Texas Private Real Property Rights Preservation Act.</li> <li style="font-weight: 400;" aria-level="1">Emphasis on ERCOT's role in addressing potential legal and policy shifts in the proposed rule.</li> </ul> <h3><a href="/sharing/?token=31cda8f5-9daa-4d74-9422-ce02476349ad">▶️</a>7 - Dane McConn - Southern Power</h3> <ul> <li style="font-weight: 400;" aria-level="1">Expressed concerns about the pace of current actions without awaiting results from maximization processes.</li> <li style="font-weight: 400;" aria-level="1">Moving forward prematurely could result in significant impacts on IBR resources.</li> <li style="font-weight: 400;" aria-level="1">This could lead to numerous appeals to the Commission regarding ERCOT's decisions.</li> <li style="font-weight: 400;" aria-level="1">The Commission may face challenges overturning ERCOT's decisions due to cost considerations, placing them in a politically difficult position.</li> <li style="font-weight: 400;" aria-level="1">Recommends awaiting maximization process results to reduce the number of affected entities and streamline the process.</li> </ul> <h3><a href="/sharing/?token=cc0395d2-fb7d-4434-a44c-3c99d6abc201">▶️</a>8 - Blake Holt - LCRA</h3> <ul> <li style="font-weight: 400;" aria-level="1">Exemption requests granted to one market participant can transfer some risk to others. Affected entities should have the opportunity to participate in the decision-making process.</li> <li style="font-weight: 400;" aria-level="1">A cost component should be included in evaluating reliability risk. The methodology for assessing this cost needs transparency for all affected parties.</li> <li style="font-weight: 400;" aria-level="1">A proposal for a 'line in the sand' on exemption requests was introduced, suggesting a 90-day period post-reliability requirement rule adoption to understand all exemption requests at once for better decision-making.</li> </ul> <h3><a href="/sharing/?token=6c892f00-8cb3-4b1a-a5ea-52fb2ac9cd09">▶️</a>9 - Katie Rich - Vistra</h3> <ul> <li style="font-weight: 400;" aria-level="1">Vistra suggests combining definitions for technical feasibility into one.</li> <li style="font-weight: 400;" aria-level="1">Vistra agrees with concerns about ERCOT's ability to revoke exemptions under certain conditions and supports a case-by-case review rather than automatic triggers.</li> <li style="font-weight: 400;" aria-level="1">Vistra is concerned about Oncor's suggestion for mandatory revocation of exemptions if system conditions materially change.</li> <li style="font-weight: 400;" aria-level="1">The emphasis is on prospective standards, following statutory language, case law, and precedents from NERC, FERC, and other RTOs.</li> <li style="font-weight: 400;" aria-level="1">Vistra agrees with TCPA on narrowing the definition of 'unacceptable reliability risk' to address specific catastrophic problems.</li> <li style="font-weight: 400;" aria-level="1">Comments pointed out the need for additional guidance on the evaluation of exemption requests and concerns about the review process and ERCOT’s discretion.</li> <li style="font-weight: 400;" aria-level="1">There is concern about the procedure requiring ERCOT involvement in cost-based exemptions, despite ERCOT not being empowered to grant them.</li> <li style="font-weight: 400;" aria-level="1">Vistra supports allowing parties with justiciable interest to intervene in appeals of exemption denials to ensure due process.</li> <li style="font-weight: 400;" aria-level="1">Vistra highlights the importance of regulatory certainty for investment and preventing unnecessary early retirements.</li> </ul> <h3><a href="/sharing/?token=66fb2753-db3a-4f5e-9d4a-a0e263a6e62f">▶️</a>10 - Adjournment</h3>