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  • Clip 0 - Chairman Gleeson calls meeting to order
    00:00:04 This meeting of the Public Utility Commission of Texas will come to order. To consider
  • 00:00:08matters that have been duly posted with the Secretary of State for
  • 00:00:12August 15, 2024. Good morning,
  • 00:00:15Shelah, Connie, Barksdale.
  • 00:00:18Connie, did you ask to have the air
  • 00:00:21conditioning turned off or what's going on here? I've been freezing all week.
  • 00:00:24Okay, so this is your fault. Absolutely. I just want to confirm. Melanie
  • 00:00:29just took care of it and it should be cooling down soon.
  • 00:00:32Okay. Well as I see it, if that clock back there is correct.
  • 00:00:36It's about 75 degrees and 49% humidity. So I would say
  • 00:00:40if people want to take their jackets off if they're wearing them, feel free.
  • 00:00:44I saw Barksdale leading the charge. Then I saw Eric didn't know what to do.
  • 00:00:47He took it off, then he put it back on. We don't want to confuse
  • 00:00:50anybody. Yeah. So feel free,
  • 00:00:52folks. It's rather uncomfortable in here.
  • 00:00:56So, good morning everyone. I think Commissioners, if it's okay
  • 00:00:59I know we've got Centerpoint here. I think maybe take things out of order again
  • 00:01:03like we've done in previous open meetings. Maybe take up
  • 00:01:0651, 52, and 58 first so that they
  • 00:01:09can come up and we can ask questions. I know they filed a lot of
  • 00:01:12information about mobile gen. And then I propose we take up
  • 00:01:1643 and 44 of the two rules related to the storm response.
  • 00:01:21That we have up at this open meeting, if that's all right with y'all?
  • Clip 51 - Chairman Gleeson lays out Project No. 56793
    00:01:24Okay. Then I would call up Items
  • 00:01:2851, 52, and 58. That is Project
  • 00:01:32No. 56793, Issues related to the disaster
  • Clip 52 - Chairman Gleeson lays out Project No. 56822
    00:01:36resulting from Hurricane Beryl. Project number 56822,
  • 00:01:40investigation of emergency preparedness and response by utilities
  • Clip 58 - Chairman Gleeson lays out discussion & possible action regarding customer service issues
    00:01:43in Houston and surrounding communities. And then 58 is discussion and
  • 00:01:47possible action regarding customer service issues, including, but not limited
  • 00:01:50to, correspondence and complaint issues. Jason,
  • 00:01:53if you want to come up and whomever else you brought.
  • Clip 51 - Jason Ryan, CenterPoint's Executive VP's update on action plan, 56793
    00:02:08 Good morning and thank you, Chairman Gleason and Commissioners. I'm Jason
  • 00:02:11Ryan, Executive Vice president at CenterPoint Energy.
  • 00:02:14Thank you for the opportunity to speak with you today about how we use
  • 00:02:18temporary emergency generation during Hurricane Beryl. With me
  • 00:02:22today is Eric Easton. Eric is an Officer and part of
  • 00:02:25our Electric Operations, including these assets that we're going to
  • 00:02:29be talking about today. Many of you may have met Eric before
  • 00:02:32he operated our system during Winter Storm Uri and executed
  • 00:02:35the ERCOT load shed orders at that time.
  • 00:02:39Now, part of his responsibility is bringing Texans back on
  • 00:02:42line with power with these temporary emergency generation assets.
  • 00:02:47I wanted to cover three things with you today before
  • 00:02:51taking questions, if that's okay. Thought I'd provide an update
  • 00:02:55of where we are on our action plan since we
  • 00:02:58last visited on July 25. I thought then
  • 00:03:02I could provide a little bit of background on these
  • 00:03:06temporary emergency generation assets and the risks that we mitigate
  • 00:03:10with them. And then I'll provide a walkthrough
  • 00:03:13of the material that we filed on Monday in response to Miss
  • 00:03:17Corona's questions. That was filed in Project
  • 00:03:2156793, and it's Item 24
  • 00:03:25there. We did file a letter this morning. It's item
  • 00:03:2925 in that same project that does a little bit of that walkthrough.
  • 00:03:32But I thought I'd provide some context to you and the public
  • 00:03:36on what that information is. So I'll cover those three things, if that's okay.
  • 00:03:40Perfect. All right. So first, let me start with the update. Since we
  • 00:03:43were in front of you on the July 25,
  • 00:03:47we presented at that point our
  • 00:03:51action plan to address the remainder of the hurricane
  • 00:03:54season and take us to the end of the year with some field
  • 00:03:58activity, better communications, better operations more
  • 00:04:02generally. Shortly after that, we accelerated
  • 00:04:06that work. So we are now completing
  • 00:04:09most of that work instead of by end of year this
  • 00:04:13month. So we had some deadlines that we
  • 00:04:17hit on August 9, some deadlines that are today,
  • 00:04:21August 15, many more deadlines by
  • 00:04:25end of the month. And then a couple of things that continue
  • 00:04:29beyond that. I know that we need to provide
  • 00:04:34to you a complete set of
  • 00:04:37information on how we mark some of those activities.
  • 00:04:41Complete. And, and so we're also pulling that information together to
  • 00:04:44provide to you in this project. Let me
  • 00:04:48give you a couple of examples of some of the work that we're completing
  • 00:04:51this month. I'll focus on some of the stuff that's out in the communities that's
  • 00:04:55most visible to our customers and to our
  • 00:04:58communities. So, for example, we decided
  • 00:05:02to trim trees along 2000 miles of
  • 00:05:06distribution line and complete that this month instead of complete it by end
  • 00:05:09of year. We are 943
  • 00:05:14miles into that work as of end of
  • 00:05:17day yesterday. So we are on track to
  • 00:05:21meet that goal of trimming the 2000 miles of distribution lines
  • 00:05:25by end of month. Those were the highest risk miles.
  • 00:05:30So these are the miles where you
  • 00:05:33get the most bang for your buck, so to speak, on trimming
  • 00:05:36vegetation. To put that in perspective, you know, the distance between
  • 00:05:40Houston and El Paso is a
  • 00:05:44little, you know, 750 miles or so.
  • 00:05:47So 2000 miles of distribution line that's trimmed
  • 00:05:50this month is the equivalent of our line workers going from
  • 00:05:54Houston to El Paso and back to Houston and then some more.
  • 00:05:57So it's a lot of work that
  • 00:06:02the men and women out in the field are completing every day,
  • 00:06:04again proud of what they've accomplished so far with zero
  • 00:06:09safety incidents and look forward to continuing
  • 00:06:13to complete that work again with that same safety track record.
  • 00:06:16The other major thing that we're doing out in the field is replacing
  • 00:06:211000 distribution poles that are wooden that
  • 00:06:24are scheduled for replacement this year. We're replacing those
  • 00:06:28wooden poles with composite poles and we are
  • 00:06:33640 poles into it as of end of day yesterday.
  • 00:06:36So again, well on track to complete that work.
  • 00:06:40But like I said, with respect to the 40 plus commitments in
  • 00:06:44our August work plan, we will pull together the
  • 00:06:48documentation of how we consider those complete.
  • 00:06:52Just an example, as of today is our deadline to
  • 00:06:56relaunch our right tree right place initiative. That's the initiative where
  • 00:07:00we educate the public about not
  • 00:07:03putting trees that grow really tall right under our power lines. Instead provide
  • 00:07:08them with information about planting the right tree in the right place
  • 00:07:11if they want something closer to the, to the power lines.
  • 00:07:15We need to show you guys how, how we are marking that
  • 00:07:19complete. And so like I said, we will pull that information
  • 00:07:23together and file it in Project 56793 in
  • 00:07:28the coming days. So as
  • 00:07:32part of our commitment to transparency, we've been providing your office and
  • 00:07:35members of the Legislature and the Governor's Office some updates
  • 00:07:40on that activity. We will provide you another update
  • 00:07:43tomorrow on where we are, and we'll provide an update every
  • 00:07:47Friday until the end of the month.
  • 00:07:51We then will quickly pivot to our next phase
  • 00:07:55of this work so we know that we're not done at the end of
  • 00:07:58August when we complete this work. So we'll be sharing with you our
  • 00:08:02work plan for the remainder of hurricane season,
  • 00:08:05how we're going to be prepared for the Winter season
  • 00:08:09and what we're going to do leading up to next hurricane season, and then
  • 00:08:13longer term after that for greater resilience.
  • 00:08:19Before I address the main topic of today,
  • 00:08:23the temporary emergency generation, I want to pause and see if there are any questions
  • 00:08:26at this point on that August work plan or our plan to
  • 00:08:30continue to update you and provide transparency on the complete items.
  • Clip 51 - Commissioners comments on CenterPoint's action plan, 56793
    00:08:34Sure, Commissioners? Jason, thank you for that update.
  • 00:08:39I've been working with Connie on the creating this framework
  • 00:08:43for showing the how the action items have
  • 00:08:46been completed, and I think that that'll make a lot
  • 00:08:50of sense so that the public and we and
  • 00:08:54the legislature know the how and the completion of the action items. So I
  • 00:08:58think it'll ultimately be a positive effect to show
  • 00:09:02if, you know, you say you're out there doing a lot of hard work and
  • 00:09:05getting all this stuff done and we're all moving to, you know,
  • 00:09:08we're all on the same mission. Right. You want to provide continuous
  • 00:09:12and adequate service for your customers. You want to sort of fix the issues that
  • 00:09:15happen after the hurricane. And we want the same thing. So this
  • 00:09:18is, this is your action plan you came up with and the,
  • 00:09:22showing the, how I think is going to be very important for everybody. So I
  • 00:09:27appreciate you working with Connie. And Connie, thank you for getting the center point and
  • 00:09:31creating this process. Thank you.
  • 00:09:35I just have one question. So on your action plan,
  • 00:09:39and you've given us a progress report on the field activity,
  • 00:09:43the trimming of the trees and then the conversion from the
  • 00:09:47wooden poles to the composite poles. And you mentioned that
  • 00:09:51these were the highest,
  • 00:09:54I guess, priority risk associated miles.
  • 00:09:59And so my question was, okay, we've obviously had those areas that were impacted
  • 00:10:04in the path of barrel, but the concern,
  • 00:10:07of course, is that we have the remainder of hurricane season. And so there
  • 00:10:11are some areas that would be at risk beyond just
  • 00:10:16that path that happened previously. And so in
  • 00:10:19this action plan, is this something that is addressing,
  • 00:10:23you know, your service area as a whole?
  • 00:10:28Yes, ma'am. And so, and that gets to the, to the point of we
  • 00:10:31need to share with you all and the public what our
  • 00:10:35plan is after August. You know, we targeted the 2000 riskiest
  • 00:10:39miles of our distribution lines. There is
  • 00:10:42more work to do after that. And we need to lay that out
  • 00:10:47transparently so that everybody knows what we're going to be doing.
  • 00:10:51And we've been engaging with customers that are impacted by that work
  • 00:10:57in a better way than we have in the past in terms of letting them
  • 00:11:00know that we're going to be in their neighborhood, that they could experience
  • 00:11:04some outages with some of this field work. And so we
  • 00:11:07can, when we provide the next phase of
  • 00:11:11work starting in September, we will be addressing
  • 00:11:15the entire area as we continue
  • 00:11:18to trim the riskiest miles that are left after these first 2000.
  • 00:11:22So the riskiest miles were beyond just the,
  • 00:11:25this initial 2000 miles was
  • 00:11:28beyond just the barrel impact as well as the poles.
  • 00:11:32So when would you anticipate? I guess again,
  • 00:11:35thinking about, you know, wanting to make sure during this hurricane season
  • 00:11:39that the entire service area, as much as we can,
  • 00:11:43has, you know, we've mitigated that risk or y'all have
  • 00:11:46mitigated that risk. So what would you anticipate in
  • 00:11:50terms of meeting that expectation during this hurricane
  • 00:11:54season? Yes, ma'am. And I may ask Eric,
  • 00:11:57he's been pulling together the next phase of our action plan to see
  • 00:12:00if he has something that he can share on that right now. I know we
  • 00:12:04plan to finalize that by next
  • 00:12:08week, but if there's anything early to share, I'll let Eric do that.
  • Clip 51 - Eric Easton, CenterPoint's VP of Grid Transformation Investment Strategy, 56793
    00:12:12Sure. Eric Easton, Vice President of Grid Transformation Investment Strategy,
  • 00:12:17so let me go back to just how we selected the risky
  • 00:12:20miles. So we looked at vegetation and its proximity to
  • 00:12:24our circuits. We also looked at the outage
  • 00:12:28concentrations that occurred during Hurricane Beryl and
  • 00:12:32also kind of consider where in the service territory
  • 00:12:36those outages occurred. Were they on critical circuits?
  • 00:12:40Do we have critical customers on those circuits? So that's the
  • 00:12:43prioritization process that will continue when you
  • 00:12:47look at the miles that we're trimming. So the 2000 miles are really
  • 00:12:50across our entire service territory. That's not just one particular area.
  • 00:12:55And some of that is going to continue as we go into
  • 00:12:58the next phase. So we look at how many
  • 00:13:02instances there are of vegetation encroachment for a given circuit
  • 00:13:06mile and that helps us to prioritize. So we'll keep working down that,
  • 00:13:09listen. And expanding out to the less risky circuits,
  • 00:13:14but really prioritizing across all 1800 feeders
  • 00:13:17that we have. Yeah, I think my concern is that, you know, we've obviously
  • 00:13:21had, you know, a four court press here, right. In terms
  • 00:13:25of, you know, the recovery process, but want to make sure
  • 00:13:28that we are kind of continuing that during this current hurricane
  • 00:13:32season so that we can mitigate as much risk as we can outside
  • 00:13:36of the area that was recently impacted. That's correct. And really we had
  • 00:13:40impacts across our entire footprint. So when we talk about the
  • 00:13:44path of the storm, it impacted all
  • 00:13:47of our system. It's just that some had higher concentrations
  • 00:13:51and that was usually where we saw higher concentrations
  • 00:13:54of vegetation and then also where we had higher soil
  • 00:13:58moisture. And so in those areas we saw more trees that
  • 00:14:02actually blew over because of those two conditions.
  • 00:14:06The result of the droughts that were stressing the trees and
  • 00:14:09then winter storm yury that stressed the trees and then the excess
  • 00:14:13rainfall this year. And so those are some of the areas that we focused on,
  • 00:14:16but we are continuing to prioritize those
  • 00:14:20locations. And then we are also from a resource perspective,
  • 00:14:23evaluating how many of the resources that we have on hand today
  • 00:14:27will stay and that's what's going, going to come out in the next portion of
  • 00:14:31the plan that Jason was talking about. Good. I think that's
  • 00:14:34very important that we, you know, we continue to focus on this and
  • 00:14:37that we get, you know, as resilient as we can in
  • 00:14:40this current hurricane season. Right. For the areas
  • 00:14:44that are potentially impacted, that are kind of left over after the
  • 00:14:47action plan is resolved in the first phase. Thank you.
  • 00:14:52Are we asking about anything except for mobilegen right now?
  • 00:14:56So I think, yeah, anything private that they've gone over. And if it's not a
  • 00:15:00part, I would say if it's not a part of their prepared remarks and you
  • 00:15:02want to touch on it, go ahead and talk about it. Now.
  • Clip 51 - Commissioners questions for CenterPoint on rate payer costs, 56793
    00:15:06 Couple questions.
  • 00:15:12I'm worried a little bit about how the costs
  • 00:15:17that right payers are going to see are
  • 00:15:21validated, audited, understood to be
  • 00:15:24fair, and that
  • 00:15:28might be as a result of if you all are going
  • 00:15:32to file a securitization or your next base rate
  • 00:15:35proceeding, how do
  • 00:15:39you all audit these third party costs? So if you're hiring,
  • 00:15:43if you've got 3000 veg management crews out
  • 00:15:46there, how are you auditing that to make sure that
  • 00:15:50those costs are within the parentheses that you put
  • 00:15:54on that? Or is that a blank check that says
  • 00:15:58trim, go trim, we'll pay whatever.
  • 00:16:02Yes, sir. So maybe I'll address it in two different contexts.
  • 00:16:06One, mutual assistance for a storm,
  • 00:16:10and then maybe the current activity that
  • 00:16:13continues to use crews external to our own.
  • 00:16:17So, and I'll speak directly
  • 00:16:21to the de Racho in May and to Beryl. So as
  • 00:16:25we get invoices in from the men and women that
  • 00:16:28came into the Houston area to help us restore power,
  • 00:16:32our internal audit department will
  • 00:16:36help us come up with the right process to review
  • 00:16:39that. We will review it for things that
  • 00:16:43look excessive to us and
  • 00:16:47we won't pay those costs that look excessive to us. But you have to realize
  • 00:16:51in that situation, there could be hotel rooms that were more expensive,
  • 00:16:55things that might, in an emergency context,
  • 00:16:59you might spend money on that you wouldn't in a normal context.
  • 00:17:03So we take that into account, but we won't pay unreasonable
  • 00:17:07costs to those men and women that came and I
  • 00:17:11in to help us. So we will have our internal audit department
  • 00:17:15leading a process. We will also hire an external audit firm
  • 00:17:19to look at our work and provide
  • 00:17:23testimony in the proceeding to determine
  • 00:17:26what costs are reasonable ultimately. So you'll have that two
  • 00:17:30layer check. Our internal audit team, which reports
  • 00:17:34to our board, not to, only to management,
  • 00:17:38and then the external audit firm as well, that we're going through
  • 00:17:42a process right now to select as
  • 00:17:46it relates to things like food and lodging
  • 00:17:51for those crews where we provide that,
  • 00:17:56we will scrutinize any food or lodging expenses
  • 00:17:59beyond that and whether or not we should pay that
  • 00:18:03and whether that was reasonable. So that's an example of some of
  • 00:18:06the things that our folks will look at. We do
  • 00:18:09have some mutual assistance crews that are self contained
  • 00:18:14where they provide their own lodging, their own food. It's important
  • 00:18:17that we have both types of mutual
  • 00:18:21assistance crews. And so for those crews that we do not provide lodging
  • 00:18:25and provide food, we would expect them to submit
  • 00:18:28invoices for that. And we will look at that tomorrow, make sure that we think
  • 00:18:31that those were reasonable costs. Ultimately, it's not our judgment,
  • 00:18:35though, on what's reasonable. Even though we're going to have internal audit, external audit.
  • 00:18:38We will then have a process here at the commission for
  • 00:18:42intervening parties and the staff to look over that and
  • 00:18:46get their opinion on what's reasonable in this work
  • 00:18:49that we're doing right now.
  • 00:18:53Some work that we're doing is still related
  • 00:18:57to hurricane barrel. So, for example,
  • 00:19:01you could have a distribution pole that's leaning but didn't cause
  • 00:19:05an outage, but we need to fix that work. So we
  • 00:19:09did continue some external
  • 00:19:12crews to help us complete that work.
  • 00:19:15But maybe let me speak to the vegetation work that we're doing right now.
  • 00:19:22A very similar process to mutual assistance during a storm.
  • 00:19:25We have staging sites set up. We have arranged hotels
  • 00:19:30for some of them. We have arranged meals for some of them,
  • 00:19:33but not all of them. Right. So you're still going to have those two types
  • 00:19:37of crews, some that are self contained, some that we're providing things
  • 00:19:40for. And so we will go through that same process to
  • 00:19:45review costs before we pay them. And then to
  • 00:19:49the extent that any of these costs are recoverable, most of them will not be.
  • 00:19:54To the extent these costs are recoverable, they would go through that same kind of
  • 00:19:57review process. And what I mean by that, we know that
  • 00:20:01there is not a vegetation management tracker that
  • 00:20:05exists right now. And so for a lot of the vegetation
  • 00:20:08management work, that is on our dime. So that's
  • 00:20:12why I say for the stuff that's ongoing, that's recoverable, there'll be
  • 00:20:15a process for the stuff that's ongoing that's not recoverable. We're paying
  • 00:20:19that. I appreciate that.
  • 00:20:26I hope the audits are separate
  • 00:20:30for like the directo and
  • 00:20:34barrel so we can look at those in terms of very specific amounts
  • 00:20:38associated with those events.
  • 00:20:43I have heard twice that that mutual assistance
  • 00:20:47companies have created their own man camps and brought in their own
  • 00:20:50food and all of that. And I'm not here
  • 00:20:54to say whether that's right or wrong, but I think the
  • 00:20:57ratepayers deserve to know if those costs are in line with
  • 00:21:01what you're expecting from the guys that come in from Michigan and the guys that
  • 00:21:04come in from Louisiana. And so I hope
  • 00:21:07that you all will be looking at holistically.
  • 00:21:11We don't. When we want mutual assistance, folks, gosh knows we need
  • 00:21:15them now. So we don't
  • 00:21:18want to do things that make mutual assistance harder.
  • 00:21:23But the ratepayers deserve every audited, every component,
  • 00:21:26every nickel scrutinized so that we
  • 00:21:30can ensure that they're getting the best service. Yes,
  • 00:21:33sir. And we do plan to file separately the
  • 00:21:37Mayenne de Racho costs versus
  • 00:21:40the hurricane barrel costs. So we won't be
  • 00:21:45conflating the two events.
  • 00:21:49Most likely that de Racho storm cost
  • 00:21:53proceeding occurs or begins
  • 00:21:57Q4. But we're still getting invoices from that
  • 00:22:01event. So it will take us a while
  • 00:22:04longer to get the invoices and go through the audit process,
  • 00:22:08both internal and external, for the. For hurricane barrel.
  • 00:22:11So I wouldn't expect that to be until well into next
  • 00:22:15year. I'm sorry, I think I cut you off. Oh,
  • 00:22:19no, no. I was. But I do have a follow up question,
  • 00:22:22actually, because Commissioner Glotfelty, he did raise a good point on the cost
  • 00:22:25impact of all the actions in the plan. Obviously, they need to be taken to
  • 00:22:28get us through hurricane season safely.
  • 00:22:32And so. But with respect to costs for
  • 00:22:36technologies like the automated
  • 00:22:39devices, AI, all of that, are you following a similar process
  • 00:22:43and ensuring that, you know, you're evaluating costs and picking
  • 00:22:47the most effective but also cost effective solution from that standpoint?
  • 00:22:52Yes, ma'am. And then that will also be the subject of, you know,
  • 00:22:56we have the burden of proving that what we're doing
  • 00:22:59there and investing in technology wise is prudent.
  • 00:23:02And so the time that we come in to seek
  • 00:23:06recovery of those investments, we bear that burden of proof.
  • 00:23:09Folks like my colleague Eric will be providing testimony to explain
  • 00:23:14how we chose, what we chose, why we think that was the
  • 00:23:17right solution, and what the benefits are
  • 00:23:21versus the costs of adopting those solutions.
  • 00:23:26So typically, you don't do that in a DCRF unless
  • 00:23:31the presiding officer orders that the prudence
  • 00:23:34be determined in that case. So it could be as early as
  • 00:23:37a DCRF filing. It would be no later than,
  • 00:23:41you know, the next rate case where all that capital
  • 00:23:45is looked up for prudence and the actual cost.
  • 00:23:48Right. So the actual cost of all of these measures that
  • 00:23:52will ultimately be read for prudence. That's right. I think it'd also be good to,
  • 00:23:56if you included in that cost that you denied in
  • 00:24:00some way. So if you found excessive,
  • 00:24:04it doesn't have to be line item. But, you know,
  • 00:24:08it would be good to have an understanding of how maybe
  • 00:24:13it's a metric on thoroughness of the audit function that you're finding some things
  • 00:24:17I don't know, but that might be a good thing to add.
  • 00:24:22Yes, sir. So this entire process ought to be very transparent,
  • 00:24:26and I think that it's consistent with what you just said. We should line
  • 00:24:30item the things that we did not pay because we didn't think it was reasonable.
  • 00:24:34We should then make sure our external auditor is doing the same thing
  • 00:24:38when they're reviewing our homework internally so that
  • 00:24:42everybody can see the work that's already done. You don't have to trust us
  • 00:24:45that that work was done and we agree.
  • 00:24:49We'll be very transparent in those proceedings. Thank you.
  • 00:24:54Okay, Jason, go ahead. And before I move on to the emergency generation topic.
  • Clip 51 - Jason Ryan gives information on CenterPoint Open Houses, 56793
    00:24:58 Let me just do a plug, if I could, for the open houses that
  • 00:25:01are starting this Saturday. We're hosting 16 of
  • 00:25:05them around the greater Houston area to get customer feedback,
  • 00:25:09to demonstrate our new outage tracker, to help people sign up
  • 00:25:13for power alert service if they're not already, and get a lot of other information
  • 00:25:17at the same time that we're getting their feedback. I appreciate
  • 00:25:21the Commission seeking feedback as well.
  • 00:25:24And so I think all of that feedback brought together will help
  • 00:25:28us ensure that it's not just our ideas that we're implementing,
  • 00:25:31but we're getting that feedback from our customers so that 16 town
  • 00:25:36halls open house events in
  • 00:25:41August and September and so we'll report back.
  • 00:25:44I know that many of you will attend as well. We'll report
  • 00:25:48back in our status reports how those are going and
  • 00:25:52obviously make any changes that are needed. If this is not convenient
  • 00:25:56times for our customers. We did split them, some on the weekends,
  • 00:25:59some on weekdays, some during the day, some in the evenings. We will
  • 00:26:03pivot if we need to, if this is not meeting the needs of our customers,
  • 00:26:07to make sure that they can give us that feedback. And the locations are spread
  • 00:26:10throughout your service territory? Yes, sir. There's at least one open
  • 00:26:14house in every county, so we cover twelve counties
  • 00:26:18and then we're doing a number of them in Harris county. As you
  • 00:26:21would expect, we may decide
  • 00:26:25that we need to add some over time.
  • 00:26:28So I wouldn't take this list as a
  • 00:26:32set list. That is never going to change. If we need to
  • 00:26:36continue doing them past September, we will. If we need to add
  • 00:26:39more coverage in particular areas, we will.
  • 00:26:43And we will report on that along with our other activities
  • 00:26:47that we report on. Can I ask a question about that just
  • 00:26:52real quick kind, did you have something you want to add? Before we go
  • 00:26:56into the mobile general discussion, I'd like to recap
  • 00:26:59the work that we're doing with Centerpoint on their commitment list.
  • 00:27:03I was just going to ask, so when you have these open meetings
  • 00:27:08and a customer comes up and complains or
  • 00:27:12says, tells their story, what do you do
  • 00:27:16with that afterwards? Do you like Chevy
  • 00:27:20Chase at the Grand Canyon and go, okay. Or do you take
  • 00:27:24that and have their address and tie it into a system where you
  • 00:27:28know what their challenges were and you can geo reference that and
  • 00:27:32go back and talk to them? Or do you aggregate all that
  • 00:27:36and try to figure it out and normalize it? What do you do after that?
  • 00:27:40Yeah, so I suspect we'll get feedback
  • 00:27:44in at least three different ways at these events.
  • 00:27:47Some of them will be through more informal discussions as
  • 00:27:50we interact with our customers. Our entire leadership
  • 00:27:53team and several hundred of our employees will be
  • 00:27:57attending the to help both guide customers
  • 00:28:00through the various
  • 00:28:04stations to get information and also the various places to provide their feedback.
  • 00:28:08So I suspect it'll come up in conversation that's less formal. But there
  • 00:28:11will be at least two different ways of formally providing
  • 00:28:15feedback at those open houses. One through actually
  • 00:28:20writing down or entering in comments if they want to formally
  • 00:28:24lodge comments. There will also be
  • 00:28:31a less formal but still documented way of providing
  • 00:28:35feedback in a more interactive way at
  • 00:28:40some of these stations. And we will obviously,
  • 00:28:44for the conversations, we will be following up with our
  • 00:28:47employees and our leadership to get downloads of
  • 00:28:51generally, what was the topic, what were the ideas?
  • 00:28:55But these more formal ways clearly are documenting addresses,
  • 00:29:00more information about the customers. Those are more formal ways, very similar to
  • 00:29:03what you all are doing in terms of formal written comments.
  • 00:29:07We want to make sure that we're getting all of that. We also will
  • 00:29:11have interpreters at many of these open
  • 00:29:14houses so that for people that speak Spanish or Vietnamese,
  • 00:29:18Houston is a very diverse community. We want to make sure we're not leaving out
  • 00:29:23members of our community, so we'll have that
  • 00:29:27option as well at many of the locations.
  • 00:29:33I think back at my time when we were building transmission lines and we were
  • 00:29:37doing right away work, talking with different landowners or having
  • 00:29:40public open houses, and we
  • 00:29:44strived or strove, I don't know what the word is,
  • 00:29:49to get as much information as we possibly could from everybody,
  • 00:29:52and we geo referenced that in a database so that we
  • 00:29:55could go back and actually look at them and see if we solve their
  • 00:29:59problem and then let them know if we solve their problem.
  • 00:30:03I just. I hope that you all can be thinking forward like that in a
  • 00:30:06way that keeps that customer involved and
  • 00:30:10up to date. Yes, sir. As opposed to just they come
  • 00:30:13and complain and don't hear anything. Understood. And very similar to
  • 00:30:17how we run these kinds of feedback sessions
  • 00:30:21for transmission lines. We do want our customers feedback,
  • 00:30:25just like we want landowner feedback when we're
  • 00:30:28talking about transmission lines, so that we can change our
  • 00:30:32route based on that landowner feedback. So we really do want
  • 00:30:36that feedback. That's why we make sure that we have both
  • 00:30:39informal ways. If somebody doesn't want to actually write something out or type
  • 00:30:43something out, but if they do, we welcome that. And if they
  • 00:30:46do these more interactive ways as well,
  • 00:30:49and one of the good things about helping them
  • 00:30:52sign up for things like power alert services, then we will have their contact
  • 00:30:56information and can follow back up with them. So we
  • 00:30:59definitely. One of the reasons why I want to pitch this while I have the
  • 00:31:03microphone is to make sure that people know about these.
  • 00:31:06There's been some local media coverage today about these kicking off,
  • 00:31:11and we'll continue to use our social media channels to make sure our
  • 00:31:14customers stay aware. Nextdoor apps, things like that. Stay aware
  • 00:31:19as these things occur over the next 45 days. Thank you.
  • Clip 51 - Connie Corona, PUC Executive Director gives recap of their work with CenterPoint
    00:31:24 Thank you. So, just to recap what we're working
  • 00:31:28on, we've heard testimony from
  • 00:31:31Mr. Ryan and others here at the Commission, at the Legislature.
  • 00:31:36They provided some progress reports
  • 00:31:40in writing. There's a website,
  • 00:31:42and all of that is a lot of information.
  • 00:31:47And what we are seeking is to have it compiled
  • 00:31:52into a single list with an
  • 00:31:55expected completion date, a progress report,
  • 00:31:58and a description of how
  • 00:32:02the progress was made and how the completion was
  • 00:32:06measured. So our Staff is working on that with
  • Clip 51 - Chairman Gleeson confirms the Commission's Open Meeting in Houston
    00:32:10Mr. Ryan and the company. Thank you,
  • 00:32:13Connie. And now is probably maybe a good time to mention we
  • 00:32:17too are going to hold an open meeting, a Commission
  • 00:32:20led work session in Houston. I believe, Saturday, October 5.
  • 00:32:24I think at this point, after all of your open houses are done, where we'll
  • 00:32:28hear from invited guests as well as the public
  • 00:32:33relating to the issues from barrel. I know.
  • 00:32:36Do you know Barksdale or Connie? Do you know how many responses we've
  • 00:32:40gotten from the public at this point in the portal we
  • 00:32:43opened? Good morning, Commissioners. The last
  • 00:32:47time I checked, it was approaching 15,000.
  • 00:32:50So firm agenda and date and
  • 00:32:54time still to be determined. I think we're working with the Mayor's office in Houston
  • 00:32:57to figure all that out, but we'll be providing that information as it
  • 00:33:01becomes available. All right. Jason, if you want to continue.
  • Clip 51 - Jason Ryan on CenterPoint's temporary emergency generation assets
    00:33:05Yes, sir. Thank you. And I'll be brief, but I do think it'd
  • 00:33:09be helpful to give a little bit of background about
  • 00:33:13the temporary emergency generation assets that we have and the
  • 00:33:17risks that we're mitigating with them.
  • 00:33:20So, as you know, we've leased small,
  • 00:33:25medium and large temporary emergency generation
  • 00:33:29units to mitigate a number of
  • 00:33:32risks that I'll go through subsequent to legislation that passed
  • 00:33:37in 2021 in the aftermath of Winter Storm Uri,
  • 00:33:41and then that legislation was clarified in
  • 00:33:452023. So one of the
  • 00:33:48risks, obviously, that we mitigate with primarily the large
  • 00:33:52units is load shed. Again, this legislation came
  • 00:33:56in the aftermath of Winter Storm Uri,
  • 00:33:59where we in Houston had to
  • 00:34:02turn off 5000 customer usage
  • 00:34:07during that event. There are a couple of unique characteristics
  • 00:34:11of Houston that I think are important to
  • 00:34:15understand the fleet of generation assets
  • 00:34:19that we do have. One of them is we have the largest
  • 00:34:22petrochemical complex on the planet in Houston, and we
  • 00:34:26do not rotate outages to those large
  • 00:34:30industrial customers for public safety and other reasons.
  • 00:34:34So when we have to shed 5000
  • 00:34:38load, that burden falls completely on residential
  • 00:34:42and small commercial customers. So you've got a fairly large
  • 00:34:46number of amount of usage that is not subject to load
  • 00:34:50shed. Right. We don't load shed transmission level customers, and we have a
  • 00:34:54lot of those. So that
  • 00:34:57helps to explain, to some extent,
  • 00:35:00the amount of these assets that we have. And Eric can speak to
  • 00:35:05how we reanalyze how many megawatts of these
  • 00:35:08large units we need to have to mitigate the risk of another
  • 00:35:13load shed like winter Storm Uri.
  • 00:35:16We'll talk a little bit about how we used our smaller and medium sized units
  • 00:35:20during barrel, but maybe I'll talk about
  • 00:35:23how some of the other risks that we
  • 00:35:26mitigate with these large units, because that's been the focus of
  • 00:35:30a lot of attention. So we're
  • 00:35:35relatively small, right. We cover less than 3% of the area of
  • 00:35:38Texas, but we consume 25% of the
  • 00:35:41power in ERCOT in Houston,
  • 00:35:45and there's not enough power in Houston to power Houston.
  • 00:35:48We have to import power from other parts of the state and
  • 00:35:52bring it into the Houston area because there's not sufficient generation
  • 00:35:56in Houston to power Houston. Those large
  • 00:36:01transmission lines go well outside of the greater
  • 00:36:04Houston area. So to the North,
  • 00:36:08we go more than halfway to Dallas. To the
  • 00:36:11Southwest, we go well past the Colorado River.
  • 00:36:14And so if there were a tornado,
  • 00:36:18a wildfire, a de Racho, even a hurricane that
  • 00:36:21didn't hit directly into Houston, that took out
  • 00:36:25those large transmission paths into Houston,
  • 00:36:30we would have a Houston area problem.
  • 00:36:34ERCOT might have enough generation to serve Houston, but if you take
  • 00:36:37out those transmission lines that we used to import about 60% of
  • 00:36:41the power that that Houston consumes, we've got a problem.
  • 00:36:45These large units mitigate against that risk as well.
  • 00:36:50So what this means in reality, is that when these
  • 00:36:54extreme events happen, you're not
  • 00:36:58likely to ever use every asset in our
  • 00:37:01fleet of temporary emergency generation during each
  • 00:37:05one event. Just like you don't use every
  • 00:37:08tool in your toolbox at home to do a project, but you
  • 00:37:12need all of the tools because you might do a different project the next
  • 00:37:15weekend, right? So if we think about these as tools in our toolbox,
  • 00:37:19they're all there to mitigate different risks. Some of them are quite
  • 00:37:23substantial in terms of the impact,
  • 00:37:26if they occurred because of some of those unique characteristics
  • 00:37:30of the Houston area, in terms of a
  • 00:37:33disproportionate number of our residential customers bearing load shed
  • 00:37:37because we can't turn industrial customers off, the fact that we import 60%
  • 00:37:41of our power on power lines that extend well beyond
  • 00:37:45our area. So we have not,
  • 00:37:49and I guess maybe one other risk is if we
  • 00:37:53can't import 100% of the power into Houston on these transmission lines,
  • 00:37:57we don't have enough capacity. If there was a significant loss of generation in Houston,
  • 00:38:01a fire at a traditional generation facility,
  • 00:38:04for example, again, you could have a localized load shed
  • 00:38:08event in Houston that could
  • 00:38:12last for some time if that's a catastrophic loss of a
  • 00:38:16generation asset. So we have not done
  • 00:38:19a good enough job of articulating these various
  • 00:38:23risks that these assets are there to mitigate.
  • 00:38:26So I wanted to lay those out here today, and as we do
  • 00:38:30our work to communicate
  • 00:38:34better and more transparently, you'll see
  • 00:38:38us talking more about this in a more consumable
  • 00:38:42way.
  • 00:38:45We are constantly assessing the risks and
  • 00:38:49making sure that we have the right sized fleet. Again, ERCOT can
  • 00:38:52go into more detail about that as
  • 00:38:59we go forward. We make a filing every year to adjust the
  • 00:39:02cost of these assets, but we don't include this analysis
  • 00:39:06that we constantly do to determine what size of the
  • 00:39:09fleet. It's our commitment to start including
  • 00:39:13that, and along with an independent
  • 00:39:16assessment, if stakeholders think that that would be helpful as
  • 00:39:20well. ERCOT and his team does look at this,
  • 00:39:23but we don't share that. So we
  • 00:39:27can't assume that people will believe us, that we look at it and have the
  • 00:39:30right size fleet to manage all of these risks, we need to start sharing that.
  • 00:39:33So it's our commitment to start doing that on a
  • 00:39:36go forward basis. Including, like I said, with the independent analysis.
  • 00:39:41And then as the Texas Energy Fund generators
  • 00:39:45start to come online, you know,
  • 00:39:48it's our hope that we won't need the same size fleet of
  • 00:39:52large generation assets that we currently have.
  • 00:39:55This lease ends in 2029.
  • 00:39:58These energy fund generators should be coming online before
  • 00:40:02then around that time. And so we
  • 00:40:06need to take that into account in our periodic analysis
  • 00:40:10as well. And if we need to end those leases early, that's what
  • 00:40:14the analysis shows, then we'll work to do that.
  • 00:40:18Also, since affordability of
  • 00:40:24what you can think of as an insurance policy with some of these larger units,
  • 00:40:28affordability is something that we always
  • 00:40:32want to continue to have a dialogue about. So we
  • 00:40:37extended the recovery period of these assets,
  • 00:40:40I think, twice now, to again lower the monthly payment
  • 00:40:44that's impacting customer bills. And we
  • 00:40:48continue to remain willing to engage
  • 00:40:51in those conversations if we need to. Again,
  • 00:40:55based on all of the storm costs and other costs
  • 00:40:59impacting customer bills, if we need to address the amortization period of this
  • 00:41:03cost recovery for these larger assets, very willing
  • 00:41:06to engage in that discussion in our next periodic update
  • 00:41:10as well. We're also supportive of having a
  • 00:41:13policy discussion on whether or not we should be the ones to continue to mitigate
  • 00:41:17this risk. Obviously, post Winter Storm Uri,
  • 00:41:21we were given the ability to have these tools in our toolbox.
  • 00:41:25We think we have the right tools in the toolbox for the various risks that
  • 00:41:29we uniquely face in Houston, but we're open to having that
  • 00:41:32dialogue on whether or not we should continue to mitigate those
  • 00:41:36risks with these tools. So,
  • 00:41:40in summary, and then I'll move on to the material that we provided.
  • 00:41:45We want to be more transparent about why we have what we have. We will
  • 00:41:48file our periodic analysis every time
  • 00:41:53we adjust the rider that is associated with this or on whatever frequency
  • 00:41:57you all think is helpful. Happy to have an independent assessment
  • 00:42:01as well to validate or contest what we think
  • 00:42:05about. Happy to continue to update that
  • 00:42:09as energy fund assets come online or get greater clarity
  • 00:42:13on when they will come online. Happy to talk
  • 00:42:17about the amortization period, and then happy to talk about more holistically,
  • 00:42:20should we be in this business of filling
  • 00:42:24the gap to mitigate these risks? With that,
  • 00:42:28I do want to talk about what we filed on Monday, but happy to
  • 00:42:31pass pause there. First, why don't you go into what you filed and we
  • Clip 51 - Jason Ryan on their filing under Project 56793
    00:42:35can finish up with questions. Yes, sir. So again, in Project 56793,
  • 00:42:39Item No. 24 is
  • 00:42:43about 250 pages of information that we filed in response to Miss
  • 00:42:47Corona's five questions. And then Item No.
  • 00:42:5025 is a letter that we filed today to make
  • 00:42:54that information a little bit more consumable. It is a lot of information.
  • 00:42:57So let me walk through what's there. Most of
  • 00:43:01the 250 pages relates to question one, so I promise
  • 00:43:05not to spend as much time on each of the five questions. It'll go pretty
  • 00:43:09quickly after I walk through question one.
  • 00:43:12But the initial 232 pages
  • 00:43:16of that are the leases for the assets that we've been talking
  • 00:43:19about. The first pages,
  • 00:43:24four through 52, are the short term
  • 00:43:28lease and any amendments to that lease that
  • 00:43:32we entered into right as the law became effective
  • 00:43:35in 2021 for the large and medium sized
  • 00:43:40units, we wanted to make sure before
  • 00:43:43we went through a full long term lease process that
  • 00:43:47we had units in place that could be helpful both during the
  • 00:43:51remainder of the 2021 hurricane season and as we
  • 00:43:55got ready to be prepared for the next winter
  • 00:43:58season, which was the one immediately following Yuri. And so
  • 00:44:03that short term lease allowed us to start getting these assets
  • 00:44:08in hand. We used one of them a
  • 00:44:12couple weeks later, Hurricane Nicholas hit. In mid September of
  • 00:44:162021. We used one of the first assets that we took possession
  • 00:44:19of down in Brazoria County,
  • 00:44:23and then we took possession of some of these larger units and got them ready
  • 00:44:26at our substations in the event there was another load shed event
  • 00:44:31like Winter Storm Uri, we then entered into a longer term
  • 00:44:35lease. That's what's on pages 53
  • 00:44:39to 174.
  • 00:44:42That long term lease is the lease that I mentioned that goes to
  • 00:44:452029. You will see a
  • 00:44:50number of amendments to both the short term lease and the long term lease,
  • 00:44:54and I'm happy to walk through any questions around that.
  • 00:44:58But I'll give you an overview of what was going on that caused so many
  • 00:45:02amendments. There were really two key things.
  • 00:45:07Number one, the units
  • 00:45:11that were leased under the short term lease ultimately needed to
  • 00:45:15move to the long term lease. And so sometimes there
  • 00:45:18are amendments to the short term lease removing assets,
  • 00:45:23and then there's a corresponding amendment to the long term lease
  • 00:45:27adding those assets to the long term lease. So we essentially took that short term
  • 00:45:30fleet over time and moved it under the long term
  • 00:45:33lease as the vendor that we leased from was
  • 00:45:37able to prove to us that they had clear title to those units
  • 00:45:42because we wanted to make sure that we and our customers had the protection
  • 00:45:46that these units were going to be there when they were needed
  • 00:45:49and that the vendor had clear title to them. So as they provided
  • 00:45:53clear title, we amended the short term lease to take it out from there,
  • 00:45:57added it to the long term lease there are a number of other
  • 00:46:00protections, letters of credit, escrow accounts,
  • 00:46:04things like that, where we were holding the vendor financially
  • 00:46:08accountable to make sure that they could perform to
  • 00:46:12our expectations. So you see various amendments over
  • 00:46:16time, increasing or decreasing those
  • 00:46:20letter of credit and escrow amounts
  • 00:46:24to make sure that this vendor could financially
  • 00:46:29perform and operationally perform, because we had remedies
  • 00:46:33under the contract that allowed us to draw on that letter of credit
  • 00:46:37or take money out of the escrow account and even seize
  • 00:46:41the assets ourselves if the vendor didn't
  • 00:46:45perform. So that, at a high
  • 00:46:48level, explains why there are so many amendments and some
  • 00:46:52of the topics that they, that they cover.
  • 00:46:57The third set of leases is for the smaller units that
  • 00:47:01we entered into when the legislation
  • 00:47:05was amended in 2023 to make clear that these could be
  • 00:47:08used for storm response. So that starts at page 175
  • 00:47:12and goes to 232. These are
  • 00:47:16the much smaller units that we'll talk about that did use
  • 00:47:20during Hurricane Beryl. We also used a
  • 00:47:24number of the medium sized units that are under both that short term and long
  • 00:47:27term lease. So I know it
  • 00:47:32takes me a while to get oriented with all of the leases and the amendments
  • 00:47:36and follow all the paper trails. So happy to talk about any of that,
  • 00:47:39but that gives you an idea of the first 232 pages.
  • 00:47:42And then it gets easier from there. Starting on page 233,
  • 00:47:47we answer the questions that Miss Corona asked,
  • 00:47:51unit by unit, for certain information about
  • 00:47:56all of the fleet. And so there's a spreadsheet that starts at
  • 00:47:59page 233 that provides the answers to
  • 00:48:03those questions. Those questions
  • 00:48:07include the duration of the lease, the date we actually took possession
  • 00:48:11of the unit, the costs associated with each
  • 00:48:15unit, and whether
  • 00:48:19we used that unit in response to Hurricane Beryl.
  • 00:48:23So a lot of information on that spreadsheet.
  • 00:48:26We did also upload the native version of that spreadsheet. I know
  • 00:48:29my eyes can't read it very well in the PDF form,
  • 00:48:32so the native Excel spreadsheet is in the
  • 00:48:36folder in Item 24, in Project 56793
  • 00:48:40as well. After that,
  • 00:48:44question two asks for the same kind of information for
  • 00:48:48any of these units that we own, and we
  • 00:48:52don't own any of these units. Under the law, we have to lease them.
  • 00:48:55So that answer is pretty straightforward. And that's on
  • 00:48:59page 239. On page 241,
  • 00:49:03we answer question three, which asks us for the same kind of information for
  • 00:49:08any unit that we got through mutual assistance. For Hurricane
  • 00:49:12Beryl, we did get twelve additional
  • 00:49:16units through mutual assistance during the hurricane.
  • 00:49:20Eight came from Oncor, four came from AEP.
  • 00:49:24And so on page 241, we provide the details of when
  • 00:49:29did we get them? Who did we get them from? What were the sizes and
  • 00:49:32how we used them?
  • 00:49:35Question four, which we answer on page 243,
  • 00:49:41asks for incremental costs associated with using
  • 00:49:45these units during Hurricane Beryl. We are still
  • 00:49:49awaiting some of those final invoices, things like
  • 00:49:52fuel. So most of these units,
  • 00:49:56while they may be dual fuel, primarily run on diesel.
  • 00:50:01And so we are awaiting the final cost. But we did show you on page
  • 00:50:05243 the internal labor costs that we have
  • 00:50:10associated with these units that were used during barrel.
  • 00:50:14And as we get the final invoices from all of the costs
  • 00:50:18associated with these units, we'll update this answer. But we provided
  • 00:50:22you what we've got right now. And then question five asks
  • 00:50:26for more details around the process generally
  • 00:50:29for deploying these assets, where generally
  • 00:50:33we deployed them during Hurricane Beryl. So starting on page 245
  • 00:50:37and then completing the packet all the way to 250 is
  • 00:50:42narrative information about that. That again, we can go into great
  • 00:50:45detail. Eric provided that response,
  • 00:50:48so we can walk through that as well.
  • 00:50:53That last spreadsheet shows that we operated these units for about
  • 00:50:573000 hours in total during Hurricane Beryl.
  • 00:51:01So definitely made a difference
  • 00:51:07in the lives of those people that were served by these assets during
  • 00:51:11the event. So maybe with that, again, I'll reintroduce
  • 00:51:16Eric, as the executive at our company that
  • 00:51:20manages these assets, deploys them during
  • 00:51:23events like Beryl deployed them during Beryl,
  • 00:51:26and pause to see if there are any questions about this particular part.
  • 00:51:31Thank you. Commissioners? Eric,
  • 00:51:33so based on Jason's update about
  • 00:51:38the URI and the 5000 MW that were
  • 00:51:41rotated out, I guess, ERCOT's direction during
  • 00:51:45Winter Storm Uri. CenterPoint received direction or rotate out 5000 MW.
  • 00:51:51Since Uri, I've visited with the company multiple
  • 00:51:55times and I think with you yourself about the
  • 00:51:59improvements that have been made to the distribution system and the
  • 00:52:02company's ability to rotate more customers effectively.
  • 00:52:06Since Uri, how many customers can you effectively
  • 00:52:10rotate now based on all the improvements and investments you've
  • Clip 51 - Eric Easton on CenterPoint's circuit segmentation, 56793
    00:52:13made on your distribution system? Are you including the use
  • 00:52:17of the temporary generation in that? No. Okay. Without,
  • 00:52:21without the generation. Okay. So one of the major
  • 00:52:25changes that we've done is around the circuit segmentation
  • 00:52:29or ability to use intelligent grid switching devices to
  • 00:52:33segment off parts of our system that
  • 00:52:36we couldn't during Winter Storm Uri. A lot of that was
  • 00:52:40attempted manually and we did successfully do that in some cases,
  • 00:52:44however, with the road conditions, that made it very difficult to
  • 00:52:48do on a wider scale. So we have
  • 00:52:52installed intelligent grid switching devices that allow us to autonomously
  • 00:52:56rotate that load that we couldn't before that
  • 00:53:00gives us about 400 capacity.
  • 00:53:03Obviously, it depends on load conditions at the
  • 00:53:06time. It's going to be a very dynamic number,
  • 00:53:09but roughly additional 400 MW
  • 00:53:13that come through that part of the automation
  • 00:53:17process. We continue to study those.
  • 00:53:20So we have the upcoming circuit segmentation study
  • 00:53:24that we're doing for ERCOT. And through that study, we identified
  • 00:53:28another set of devices, I think about another 40 devices
  • 00:53:32that we would install. I don't have the megawatt number that's associated
  • 00:53:36with those devices, but we can follow up with that. So that'll be
  • 00:53:39a further enhancement. Some of the other things that
  • 00:53:43we've looked at. So that's what's implemented. So we've added
  • 00:53:46about another 400
  • 00:53:52load. And to put that into context, the load that we can typically
  • 00:53:57rotate manually is about 3000 MW. So that left us
  • 00:54:00about a 2000 megawatt deficit during winter storm yuri.
  • 00:54:05So we've closed into that deficit
  • 00:54:09by about 400 MW, depending on system conditions.
  • 00:54:14Okay. And the reason I'm asking is because, you know,
  • 00:54:17based on the premise that Jason has provided,
  • 00:54:22the decision to acquire that many mobile generation units
  • 00:54:25was largely based on preventing a load
  • 00:54:29shed or ensuring customers have power during a load shed event. Should you have to
  • 00:54:33rotate 5000 mw? Since Uri, there have
  • 00:54:36been tremendous improvements, both from
  • 00:54:39the company side with investments in the distribution system to
  • 00:54:43be able to more effectively rotate customers out through
  • 00:54:50intelligent grid switching or devices,
  • 00:54:52technologies that, you know, the company has made investments in, the ratepayers
  • 00:54:56are paying for. And on our end,
  • 00:54:59we have made improvements through weatherization and
  • 00:55:03dual fuel capability, and overall winter reliability
  • 00:55:07and resiliency has tremendously improved since
  • 00:55:10Erie. So that
  • 00:55:14I think that we all recognize, and we
  • 00:55:18have to rethink about how we approach this
  • 00:55:24entire dialogue because of the fact that there
  • 00:55:28have been a lot of significant
  • 00:55:31facts that have changed. And so I
  • 00:55:35think it's going to be important to understand those megawatts,
  • 00:55:39a total megawatt amount. Yeah, no, I agree.
  • 00:55:43We have typically used Winter Storm Uri's benchmark,
  • 00:55:47and then this year, we will also be redoing that analysis based
  • 00:55:50on the 19,000 megawatt number that ERCOT is studying.
  • 00:55:55So it's a slight change, doesn't affect our
  • 00:55:58calculations significantly. The other thing
  • 00:56:02is that our load ratio share changes on an annual basis. So we also
  • 00:56:06have to factor that in. And then with the potential
  • 00:56:09for large industrial loads coming into our footprint,
  • 00:56:13we also obviously factor that in as well. So there's
  • 00:56:17some level of uncertainty. And what we're
  • 00:56:20also seeing is that some of these larger loads are able to come on much
  • 00:56:24faster than what they could in the past.
  • 00:56:27And so, because the industrial load is still counted
  • 00:56:31in our load ratio share, we include that in our analysis when
  • 00:56:34we're looking at how many megawatts do we need need. And then,
  • 00:56:38as Jason mentioned, the other scenarios that we have looked at
  • 00:56:42are the tie line capacity challenges
  • 00:56:46that we could experience. We're seeing increases in
  • 00:56:50wildfire risk. And so those wildfires,
  • 00:56:53similar to 2011, where they threaten the north
  • 00:56:57to Houston interface, could drive a load shed
  • 00:57:00condition in the Houston area, even though the rest of ERCOT
  • 00:57:04may not be affected. So those are some of the things
  • 00:57:08that are going into the calculations that we're making to try to determine
  • 00:57:12if we still have the right number of units and
  • 00:57:16also the speed at which we need to be prepared to deploy those units,
  • 00:57:20which could require either changes to our processes,
  • 00:57:24where those units are located, the staff that we have available.
  • 00:57:28So those are things that we're doing on an ongoing basis and
  • 00:57:32evaluating those continually.
  • 00:57:37One thing I would ask. So, Jason, you committed to providing
  • 00:57:40those analyses on a go forward basis. I think it's also important to know how
  • 00:57:44we got to where we are today. So I think it would be helpful to
  • 00:57:47also provide the previous analyses that Eric and his group have done. So
  • 00:57:51we can see how the initial decision was made and how the subsequent decisions.
  • 00:57:54got us to where we are today. Yes, sir.
  • 00:57:59And to add to that, because we have heard in
  • 00:58:02prior discussions that the decisions were made based on load shed and
  • 00:58:06hurricanes and localized outages, but we
  • 00:58:10need to understand if your analysis took into consideration the loss of major transmission
  • 00:58:14lines into the Houston area as part of your analysis of low shed.
  • Clip 51 - Commissioner Hjaltman's question to CenterPoint on stackable generators, 56793
    00:58:18Yes, ma'am. Are these generators
  • 00:58:22stackable? Like you said, you purchased the big figures
  • 00:58:26for loadshed, and you couldn't necessarily
  • 00:58:29use those to go power something smaller.
  • 00:58:33But now that you have the smaller, could you get rid of the bigger and
  • 00:58:36you can add them together? Is that a possibility?
  • 00:58:40So we can parallel units, the five megawatt
  • 00:58:44units, we have multiple five megawatt units at
  • 00:58:48a given substation. So the 32 megawatt units,
  • 00:58:51each one is at its own substation. It's connected to the bus,
  • 00:58:54and it's ready in case we have a generation adequacy
  • 00:58:58or any of the other scenarios that we just talked about.
  • 00:59:01The five megawatt units, we can parallel those units
  • 00:59:05through the substation bus. For the smaller units, there's a
  • 00:59:09significant drop off. We go for from 5,
  • 00:59:13quote unquote small would start about 1 mw.
  • 00:59:16So one of the challenges with trying to parallel
  • 00:59:20that many units is, it's going to be the physical space. So the units.
  • 00:59:25We wouldn't have enough space in the substation to
  • 00:59:29parallel that many units and connect them to
  • 00:59:33our distribution system. So in that case,
  • 00:59:37it's not very feasible to parallel
  • 00:59:41the smaller units for those use cases.
  • 00:59:47Yeah. Just for context, the smaller units are about the size of a U Haul
  • 00:59:51truck. The five megawatt units are kind
  • 00:59:54of a tractor trailer, and then by the time you get to the 32 megawatt
  • 00:59:58units, those are requiring us to use a crane to assemble
  • 01:00:02them.
  • 01:00:07Are you finished? For now. For now.
  • 01:00:10Okay. A couple questions here.
  • Clip 51 - Commissioner Glotfelty's question on canceling lease agreements, 56793
    01:00:13 I read all 200 and some odd pages.
  • 01:00:18I didn't have, like, a map to figure
  • 01:00:21out which way was which, but there are some things that stuck out
  • 01:00:24at me that I wanted to ask you about.
  • 01:00:27One of them is amendment five to the
  • 01:00:31lease agreement. Now, I don't know if this is to the long or the short,
  • 01:00:35but it talks about termination
  • 01:00:39of the lease. It's on page 145.
  • 01:00:42Yes, sir. Termination of the lease. And it talks about a
  • 01:00:46regulatory proceeding. And if we disallowed it,
  • 01:00:51what would happen? And I've seen in two different places in these documents,
  • 01:00:54one of them say that you would pay something like this,
  • 01:00:58says that you would pay $53 million.
  • 01:01:01And there's another place that talks about 25% of the total cost,
  • 01:01:04which I think was $125 million. And I'm trying to get my
  • 01:01:08understanding of this. If you canceled these leases today,
  • 01:01:13what would be the consequence?
  • 01:01:17Got it. So I'm looking at 145 and 146 of
  • 01:01:21the packet. And this is an amendment to the long term lease.
  • 01:01:26The long term lease had a termination provision in
  • 01:01:29it in the event that when we
  • 01:01:32went through the prudence determination here at the commission,
  • 01:01:36this was determined to not be prudent in
  • 01:01:39whole or in part. And that was the six months that they gave you two?
  • 01:01:44That was on page 55, termination of release. Yes, sir. 2a. So,
  • 01:01:48yes sir. Originally, I believe that that termination provision
  • 01:01:53expired in March of
  • 01:01:572023. Correct? March 31.
  • 01:02:00And this amendment extends that termination
  • 01:02:05right through, I believe, the end of 2023.
  • 01:02:09And so once the prudence determination
  • 01:02:13proceeding was over and nobody appealed
  • 01:02:16that decision,
  • 01:02:20it's my understanding that this provision is no longer a
  • 01:02:23live provision of the contract that would allow us to terminate
  • 01:02:27under a determination by the commission that these were not prudent
  • 01:02:32had there been an appeal. And so we extended it,
  • 01:02:36because that prudence determination case was still pending.
  • 01:02:39So we worked with the vendor to make sure that that right that we negotiated
  • 01:02:43at the beginning, remained through that proceeding
  • 01:02:47had that proceeding been appealed. We're talking about speculation at this point,
  • 01:02:51but we would have attempted to continue to maintain the right
  • 01:02:55to terminate under this provision that you're pointing out,
  • 01:02:58since there's not a live appeal of that.
  • 01:03:02We did not ask to continue this termination right.
  • 01:03:05Based on prudence of the assets. So it's my understanding that
  • 01:03:10we could not trigger this clause today.
  • 01:03:14Is there any other termination provision that you could claim?
  • 01:03:22Let me turn to the long term lease itself,
  • 01:03:25because there are events
  • 01:03:29of default if the
  • 01:03:33vendor did not perform,
  • 01:03:37that would allow us to exercise certain rights.
  • 01:03:40So if you look at
  • 01:03:44page 76 of the packet,
  • 01:03:49there are certain things that would lead to an event of default by
  • 01:03:53our vendor, including failure
  • 01:03:57to provide 94% availability
  • 01:04:01of these assets. So if they do not operationally perform when
  • 01:04:06these assets are needed, that triggers an event of default.
  • 01:04:10There are other things that trigger this, too, right? It's a through g
  • 01:04:14on that list. I won't go through them all. But in the event that the
  • 01:04:17vendor defaults on its obligations under this lease,
  • 01:04:22that would trigger remedies that are on page 78
  • 01:04:27that allow us to draw on the letter of credit,
  • 01:04:32take all the money in the escrow account,
  • 01:04:35take possession of these assets ourselves,
  • 01:04:39and execute a number of other remedies as well.
  • 01:04:42It's not the same as termination,
  • 01:04:45but it's pretty close to it. And so that's the only real,
  • 01:04:50my understanding is that's the real remedy that's left
  • 01:04:54once we got past that regulatory provision
  • 01:04:59that expired at the end of last year. So,
  • 01:05:02Jason, are you basically saying that Centerpoint entered into a lease contract that
  • 01:05:06they can't terminate at this point unless there's vendor non performance?
  • 01:05:11That's right. The termination provision expired
  • 01:05:15once the proceeding at the commission was over. I mean,
  • 01:05:19I don't. I mean, I personally have never heard of a
  • 01:05:22lease contract I can't terminate. Have you?
  • 01:05:27I mean, it seems like the contract is. I mean,
  • 01:05:33you entered into a contract you can't terminate unless there's a vendor on performance.
  • 01:05:37And of course, these large units seems like largely
  • 01:05:41haven't been run, so we'd have to. It may not ever be run, so we
  • 01:05:45don't even know they'll not perform. So it
  • 01:05:48just seems like we're in this circular place where I,
  • 01:05:53y'all are coming across like, your hands are tied to this contract,
  • 01:05:57but yet there's been so many changes that have occurred,
  • 01:06:01and I think, and I don't know if you were asking this,
  • 01:06:03Commissioner Hjaltman? But like,
  • 01:06:06can you switch units in and out? Like, can you go take the
  • 01:06:10big ones back and get some smaller ones, like, trade them out?
  • 01:06:15Yes. So we do. And Eric can
  • 01:06:18talk about this greater than I can in terms of the testing that's required.
  • 01:06:22So these units, assets aren't sitting idle and never tested.
  • 01:06:27So. And that counts towards the performance of the vendor as well.
  • 01:06:31So I let him talk about that. We obviously
  • 01:06:34can reach commercial terms with the vendor on
  • 01:06:38changing out assets if we believe we don't have the right asset
  • 01:06:42mix. That's not a right. We have
  • 01:06:46to terminate the deal. Right. But we can always
  • 01:06:49work commercially with our vendor to
  • 01:06:53reach a constructive outcome that works for both of us.
  • 01:06:57Again, this is. It's not exactly like this,
  • 01:07:01but the way I view it is we made
  • 01:07:04an investment in a relatively long term
  • 01:07:08asset with kind of
  • 01:07:11like we do with transmission lines. Right. Once you determine that it's
  • 01:07:14needed and it's prudent and we build it, we have it.
  • 01:07:19And so that's the same construct under these leases.
  • 01:07:23Once it's determined that this is the right thing for us to have,
  • 01:07:27we made the payment and
  • 01:07:30we prepaid this lease to get a discount on what it costs.
  • 01:07:35So financially, we have made the payment,
  • 01:07:40we have the asset that after we went through
  • 01:07:43the prudence determination, then we don't
  • 01:07:47have the right to terminate anymore. We have the asset for the term of the
  • 01:07:50lease. We do. Eric can talk about
  • 01:07:53the performance obligations of the testing, which is how we know that these
  • 01:07:57would work or not during the
  • 01:08:00load shed event. Yes. I think there's a couple ways that
  • 01:08:04we evaluate performance. The same
  • 01:08:09folks that would be helping us to deploy the 30 mw,
  • 01:08:12also help us deploy the five megawatt units. And so they did
  • 01:08:16do that successfully during Hurricane Beryl.
  • 01:08:20So we did deploy some of the five megawatt units.
  • 01:08:24And so from that regard, we did get an opportunity to see how they would
  • 01:08:27perform in a live situation, how they
  • 01:08:31transport the unit, how they get it connected and
  • 01:08:35up and running. And then in addition to kind of
  • 01:08:39that live scenario with Hurricane Beryl,
  • 01:08:43as Jason mentioned. We also pull maintenance on the units to ensure that they
  • 01:08:46are ready. So they've done that. And then
  • 01:08:50also we have readied the units in preparation for deployment.
  • 01:08:56And that's something that we typically, if there is maintenance
  • 01:08:59that's upcoming, we coordinate that with any type of
  • 01:09:03readying of the units for an ERCOT
  • 01:09:07potential EEA event. And so we've seen the performance that
  • 01:09:11they have provided in those three scenarios.
  • 01:09:14And that's what's really giving us the ability to evaluate whether
  • 01:09:18or not we think the units would be ready to perform. Yeah, but I
  • 01:09:21think we're all talking here about the large 15 that weren't used during barrel.
  • 01:09:25Right. We know the midsize, smaller ones were deployed.
  • 01:09:29You didn't have enough of them. You borrowed about
  • 01:09:32twelve or so from other utilities.
  • 01:09:36So it's the 15 units we're talking about here. So.
  • 01:09:39And to be clear, that's the 15 are the ones that I'm referring to.
  • 01:09:43So we readied the 1532
  • 01:09:47megawatt units. Not all of them, but we readied some of those units
  • 01:09:51in preparation of ERCOT eevtainous events, because that's the scenario
  • 01:09:55that those units would be dispatched for. So those were conditions where
  • 01:09:59ERCOT had said, we have a potential for an EEA event
  • 01:10:04as part of being ready for that. We do
  • 01:10:08ready those units so that they can be utilized.
  • 01:10:13Are these the 115 instances you're referring to that ERCOT has come close to
  • 01:10:16EEA events that we know is nothing factually on
  • 01:10:20point, because that would include every OCN and AAN that's ever
  • 01:10:24been issued in the last since Uri. Yeah. When I'm talking about. Eric, real quick,
  • Clip 51 - Eric Easton on CenterPoint readying units, 56793
    01:10:27will you move the microphone a little closer? Yeah. When I talk about readying
  • 01:10:31the units, it's really for those that progressed all the way to
  • 01:10:34EEA level that we may not have gone into load shed.
  • 01:10:38So it's not the totality of the 115,
  • 01:10:42but it's where we got closer to an
  • 01:10:47EEA event, which has been
  • 01:10:50how many times since Uri? I can think of one in September.
  • 01:10:53Yeah, I don't. I don't have that. But we can. We can pull that in
  • 01:10:59terms of how many times we ready the units. I do know that was four.
  • 01:11:02It was four. So we've got a process of readying the units which can
  • 01:11:06contribute towards their performance. But you
  • 01:11:09also, you know, talked a long time about this
  • 01:11:14initiative to go out and kind of see what's the right mix and to do
  • 01:11:17it on a continual, ongoing basis,
  • 01:11:21and also to bring in this third party consultant.
  • 01:11:25So what's the line of sight if you get this assessment?
  • 01:11:29It says you need a different mix. So how are you going to get
  • 01:11:33there within your current commitment to this
  • 01:11:37larger, I guess, asset?
  • 01:11:42Yes. So, obviously, if you
  • 01:11:46take the scenario of Texas Energy Fund
  • 01:11:50generation coming online in the latter
  • 01:11:53part of this decade, it corresponds pretty well with the
  • 01:11:57end of this lease already.
  • 01:11:59And again, we don't have the right to terminate
  • 01:12:04early, but we can reach a commercial
  • 01:12:08arrangement under with
  • 01:12:11the vendor. If we needed a fewer number
  • 01:12:15of the 32 megawatt units,
  • 01:12:18maybe for a longer period of time, you could reach
  • 01:12:21an agreement where there was no incremental cost. You return
  • 01:12:25some, have some for a longer period of time. Right. This is just a
  • 01:12:29hypothetical scenario that could occur. So we
  • 01:12:32do have the ability to take action after that
  • 01:12:36analysis, short of returning all
  • 01:12:39of them. But I don't think the analysis would be that
  • 01:12:43that's the right way to mitigate these risks. Now, again,
  • 01:12:47we're happy to have the conversation from a policy perspective if we should not be
  • 01:12:51mitigating these risks. But under current law, we have that
  • 01:12:55ability to mitigate the risk. We don't see others mitigating
  • 01:12:58the risk in all of these situations, but we're happy to have
  • 01:13:02that conversation more holistically.
  • 01:13:05That might include us getting out of this altogether. And again,
  • 01:13:09then we'd have to figure out what the right path forward is for that based
  • 01:13:14on where we are. Jason, I'm just having a hard time understanding
  • 01:13:18how all of a sudden the lease that ends in 2029 is
  • 01:13:21somehow correlated with the Texas Energy Fund power plants.
  • 01:13:25Yeah, and I shouldn't suggest that.
  • 01:13:29I'm just using that as the example.
  • 01:13:33Another thing you'd have to take into account in various scenario planning
  • 01:13:36that we do take into account is the growth in our
  • 01:13:40load ratio share.
  • 01:13:43And again, a lot of that growth comes from industrial
  • 01:13:46facilities as they electrify. As that occurs,
  • 01:13:52we get a greater amount of load shed from ERCOT in the event we're
  • 01:13:56in that situation. But we have an even greater amount of customers
  • 01:14:00now that we can't rotate outages across. So again,
  • 01:14:04you continue to disproportionately impact our residential
  • 01:14:08and commercial customers in load shed events as the industrial
  • 01:14:13sector gets bigger. And that should
  • 01:14:16impact also our determination on how many assets.
  • 01:14:19So I mentioned the energy fund as just an example of a scenario to
  • 01:14:23think about, because I think that will impact how much we
  • 01:14:27should have. It's not the only moving part, because as
  • 01:14:30those units come online, we've got growth in the industrial sector,
  • 01:14:34we've got growth in the residential sector. When we talk about the analysis and
  • 01:14:37being more transparent about what Eric's team does, we will
  • 01:14:41show all of those scenarios. So I apologize for focusing on the energy
  • 01:14:44fund. That's not the. All these correlations being made to
  • 01:14:52potential load shed events. And I understand that's part of the law
  • 01:14:56that you all went out and bought those units for, but I guess
  • 01:15:00what I'm trying to get at is there's I mean, if you want to think
  • 01:15:03of Armageddon for why you need the load shed events, we could sit here and
  • 01:15:06come up with a list of why you might need them for a load shed
  • 01:15:09event. But the fact of the matter is, again, there have been tremendous improvements on
  • 01:15:13reliability and resiliency both. Bye. The state effort of legislation that
  • 01:15:17was passed by the legislature, signed into law by the
  • 01:15:20Governor, we implemented all of that Legislation,
  • 01:15:24and tremendous improvements and investments have
  • 01:15:27been made by the transmission, distribution utilities on their distribution and transmission
  • 01:15:31systems. We're in a different place now.
  • 01:15:34And, I mean, you're not in the business of power
  • 01:15:38generation, right? So the Texas Energy Fund, I mean,
  • 01:15:41yeah, we all want those power plants built. We need that for load
  • 01:15:44growth. But we really need to think about
  • 01:15:49what's the optimal fleet that you should have in
  • 01:15:52mobile generation fleets at this day and time, given all of these factors?
  • 01:15:56And what are some pragmatic ways of moving forward given
  • 01:16:02your lease contracts? What do we have to work with from
  • 01:16:07a practical, pragmatic standpoint at this time? Because there's obviously,
  • 01:16:11as you know, there's tremendous concern about the mobile generation units,
  • 01:16:15this 15 units that cost a lot of money and were not used and
  • 01:16:19the ratepayers are paying for it. And so how are we going to get to
  • 01:16:22a place where, you know,
  • 01:16:25we have the inadequate, you know, either there's a law change, you know, like you
  • 01:16:29said, maybe there's, there's a paradigm shift in the policy.
  • 01:16:33But in the meantime, you know, until then, we have to do
  • 01:16:37our due diligence and understand, like, what do we have practically at
  • 01:16:41our disposal right now to rethink what we're doing here? Because it's
  • 01:16:46just not like you just said, you guys really
  • 01:16:50went out of your way to plan for load shed events. The other utilities did
  • 01:16:53not, right? The other TDUs
  • 01:16:56that went out and bought mobile DGD seem to be
  • 01:16:59a little bit more pragmatic. I mean, and so in
  • 01:17:03terms of. But you're saying you have unique circumstances in your service territory
  • 01:17:06to justify these big units. But the fact of the matter
  • 01:17:10is facts have changed and we're trying
  • 01:17:13to assess, like, what do we have at our disposal right now, and what does
  • 01:17:16these contracts say that can, that can help us out? But it doesn't sound
  • 01:17:19like there's much flexibility in the contracts is what you're saying.
  • 01:17:22So we're just trying to understand that that's right.
  • 01:17:26Maybe the right next step is for us to provide that
  • 01:17:29past and current analysis.
  • 01:17:33Transparency should start now. Is what I'm taking from your comments
  • 01:17:36and so we can work with staff to
  • 01:17:40figure out the right place to make that filing so that
  • 01:17:44I think that will help us advance the discussion.
  • 01:17:48Reasonable minds will differ with our analysis and I think
  • 01:17:51we welcome that discussion with the right stakeholders.
  • 01:17:55So we'll work to figure out where to start providing that
  • 01:17:59information. I have a couple more
  • 01:18:02questions.
  • 01:18:07Could you find out what the market
  • 01:18:10rate for an SMT 60 generating unit
  • 01:18:14is today? I've been told by folks in the market that
  • 01:18:18it's 145 to 160,000 per
  • 01:18:21month, but the CNP contract says 220,000
  • 01:18:25a month. So I'm just wondering,
  • 01:18:29was there, it makes me believe that there
  • 01:18:33was a, we got to get this done quickly. And whatever cost it is,
  • 01:18:36the cost was there. So if you would please just get
  • 01:18:40us that as best you can. You don't have to do another RFP, but if
  • 01:18:43you picked three or four folks, okay. Now the
  • 01:18:47other thing in this contract that I don't understand,
  • 01:18:50who is Goldfinch Energy?
  • 01:18:57I may, we have other resource witnesses that might. So let
  • 01:19:01me tell you what I think, and you all can come back and tell me
  • 01:19:03at a later date. So I think that in
  • 01:19:08these contracts, lifecycle power was
  • 01:19:14owned by a private equity firm and they
  • 01:19:18didn't have the resources to go procure the generators that you needed
  • 01:19:21them to procure. So they went and created this.
  • 01:19:25They either life cycle or the private equity farm created another
  • 01:19:29entity to backstop that.
  • 01:19:33And then your prepayment of 460 million
  • 01:19:36or whatever it was, became the collateral for them to go for
  • 01:19:40their loan to their private equity firm, that they went and bought the generators and
  • 01:19:43then gave them to you.
  • 01:19:47It seems kind of strange. I'm not convinced that I
  • 01:19:51don't know Goldfinch. I hope you can confirm that
  • 01:19:55for me because it was a new name in there that didn't,
  • 01:19:58that kind of stuck out. But that's what I see. I don't know
  • Clip 51 - Commissioner Glotfelty's question to CenterPoint on performance metrics, 56793
    01:20:02if that's right. And then
  • 01:20:07I get, there are a lot of performance
  • 01:20:11metrics in here that Lifecycle Power has
  • 01:20:14to abide by in order for these to happen.
  • 01:20:18And I just, what I've looked at online,
  • 01:20:22be it, it's online, Lifecycle Power didn't have that many employees.
  • 01:20:25I don't know how they're going to perform unless they have contracts
  • 01:20:29behind them that are going to set
  • 01:20:33up, move all of the things that you required in the contract
  • 01:20:37for these generators, whether they be small or large.
  • 01:20:41And was there any exploration of that behind
  • 01:20:45Lifecycle Power on? Would they be able to perform, or is it
  • 01:20:49just a commitment like we got it?
  • 01:20:54Yeah. We have not had those performance
  • 01:20:57issues with them in the times that we've used the units.
  • 01:21:01I know that was one of the reasons why we had the letter
  • 01:21:05of credit, the escrow account, and the various other protections
  • 01:21:09for us and customers in the event they weren't able to perform. I don't know,
  • 01:21:12Eric, if you know the size of their employees that help us
  • 01:21:16with this. No, I do not. I know that they have brought in resources
  • 01:21:20from out of town when we've needed them. So in terms of having
  • 01:21:24the resources in Houston when we needed them, they've been able to
  • 01:21:27fulfill those obligations. I know that they've flown people in at times.
  • 01:21:30So where are those resources? What the contractual
  • 01:21:34agreements are, I don't know, but we would
  • 01:21:37tell them how many units we needed to be ready to operate and
  • 01:21:41they would have the resources available to operate those units.
  • 01:21:44Okay. If you would just get me some better
  • 01:21:48understanding of how that transaction works, because it leads
  • 01:21:51me to believe that you did a transaction with a company that didn't actually
  • 01:21:55have enough revenue or enough resources to actually
  • 01:21:58buy the generators without you giving them the money to
  • 01:22:01satisfy that lease. Got it.
  • 01:22:05The other question that I have is, again, a little
  • 01:22:09research here on the Internet. We don't know if that's always true or
  • 01:22:12nothing. It seems like the CEO of
  • 01:22:16Life Cycle Power is in litigation with his old firm.
  • 01:22:20Are you all involved in that? So, John Tuma versus
  • 01:22:24Life Cycle Power? Are you involved in that litigation?
  • 01:22:30I'm aware of the litigation. I don't know whether
  • 01:22:34we're a party to it, but can follow up with you
  • 01:22:37on that. And can you let us know if
  • 01:22:41any of that has to do with any of this mobile
  • 01:22:44gen contract and if so, how that might
  • 01:22:48interplay? Yes, we'll follow up.
  • 01:22:52And let me just turn to make sure none of our colleagues know whether we're
  • 01:22:55party to that. I just don't.
  • 01:22:58Okay. Okay. Yeah.
  • 01:23:02The head of our procurement tells me that we're not a party to that litigation,
  • 01:23:05but we'll get a, we'll pull information about it.
  • 01:23:08I am aware that it exists. I don't know the current status, but we'll pull
  • 01:23:12that information and provide it. Okay, I think I just have one more question,
  • 01:23:16and that is no, two more questions. No, three more questions.
  • 01:23:19No kidding. One day we're going to hold you to that number.
  • 01:23:22Yeah, these are kind of
  • 01:23:25yes no answers, so they're fairly quick.
  • 01:23:29One of them is so,
  • 01:23:34isn't it? Right. That you all went and procured these generators,
  • 01:23:38these generation leases prior to the Commission
  • 01:23:42completing a rule on how and what is
  • 01:23:46prudent in that under that program?
  • 01:23:49Yes, sir. Okay. Is that a normal practice for
  • 01:23:53a utility across the
  • 01:23:58country that gets their rates paid for?
  • 01:24:02Do they normally say $800 million? Oh, we'll go spend it and figure
  • 01:24:06out the rules later. I think it depends on
  • 01:24:10the type of asset.
  • 01:24:14And we operated under the expectation that
  • 01:24:18if the tool was available, we should
  • 01:24:21have it, especially before the next
  • 01:24:25winter. And that's why we had the protections
  • 01:24:29in there of, we can undo this if
  • 01:24:34there's a determination that it was imprudent.
  • 01:24:37It's one of the reasons why we wanted that provision in the contract,
  • 01:24:41because we were doing this not in necessarily
  • 01:24:45the ideal order, but didn't want to have
  • 01:24:49a repeat of load shed where we couldn't
  • 01:24:53rotate outages.
  • 01:24:56And we had a tool that we could have had and we didn't have it.
  • 01:24:59Okay, so two very quick things. One of them is,
  • 01:25:04I think ERCOT told me that your load ratio share is now determined twice
  • 01:25:07a year. Can you all make sure that that is right?
  • 01:25:11And if it doesn't include, if it includes
  • 01:25:15all of your industrial generation that can't
  • 01:25:18be shed, maybe we should look at that and consider that as it's,
  • 01:25:22as a fairness component across the state for load share ratios for
  • 01:25:26load shed. So it is calculated twice a year and
  • 01:25:30it does include our industrial load. It does include all the industrial load.
  • 01:25:34Maybe we should consider that and see the components
  • 01:25:37there. I think the
  • 01:25:41final question that I have is it deals with
  • 01:25:47distributed resources on your system.
  • 01:25:51In light of this, and actually, prior to the event,
  • 01:25:55we've seen a lot of distributed resources that want to connect to the distribution system.
  • 01:25:59We have, quite frankly, heard of very good
  • 01:26:03tdus and very mediocre tdus. And I hate
  • 01:26:07to say it, but you all are in the mediocre category. Not because.
  • 01:26:11Well, primarily because of some of the things that you all are
  • 01:26:15doing and costs that you incur on that that are not uniform.
  • 01:26:19One of them that I've been told about is a transfer
  • 01:26:26trip device. Okay, I understand a transfer trip device.
  • 01:26:29There's no argument that they're needed because they're required for safety
  • 01:26:34of linemen. But the question is, at what level
  • 01:26:37and how is that a fourth level of protection or not? Can you
  • 01:26:41all educate us a little bit on this? Why they're needed,
  • 01:26:45what the component is, and why people
  • 01:26:48that want to put generators on their own system or in
  • 01:26:52the system are having a problem with
  • Clip 51 - Eric Easton on distributed generation, 56793
    01:26:55you all on this issue? Yeah, I can
  • 01:26:59speak to that a little bit. So the transport trip is put
  • 01:27:03in place, as you mentioned, safety concern.
  • 01:27:07If you have a distributed energy resource that's connected to
  • 01:27:10the network and we trip that circuit, that resource
  • 01:27:14could then go ahead and back feed that circuit.
  • 01:27:18So typically, depending on the load. So what that means is
  • 01:27:22you all take a line out of service in order to be not
  • 01:27:27energized. And if there's a generator on it
  • 01:27:30somewhere, it could still be generated. It still could be energized.
  • 01:27:35Yeah, it could be that we don't take the line out of service. It could
  • 01:27:38be a faulted condition. So you could have a line that was
  • 01:27:41down, and our relay would have potentially
  • 01:27:45isolated that circuit, isolating the down power line.
  • 01:27:49And then this generator could back feed the circuit and continue to
  • 01:27:53keep that energized. So now it's not only a risk for.
  • 01:27:56For folks that might be working on our system,
  • 01:27:58it's also a potential risk for the public. And it could cause
  • 01:28:03other unintended consequences, such as wildfires,
  • 01:28:06et cetera. So as a result,
  • 01:28:10typically there's a ratio between the load on the circuit and
  • 01:28:13the size of the generator. Depending on
  • 01:28:16that ratio, the generator may trip offline on
  • 01:28:20its own because there's too much load for that generator
  • 01:28:24to sustain itself. And therefore,
  • 01:28:27in some cases, people will accept not
  • 01:28:31having transfer trip based on that ratio.
  • 01:28:34And the assumption that that generator is going to trip off at
  • 01:28:39centerpoint. We don't make that assumption. And we say
  • 01:28:42if the generator is of a certain size and we still look
  • 01:28:45at some of those conditions, but then we want to provide transfer
  • 01:28:49trips so that we can ensure a signal has been sent
  • 01:28:53to that generator to isolate it such that public
  • 01:28:57safety and our crews are safe. So I think this is an issue,
  • 01:29:00obviously not an investigation issue, but I want to talk to you all about it.
  • 01:29:04I understand that it's even more challenging as more and more folks are
  • 01:29:07looking to put their own resources at their
  • 01:29:10locations, at commercial sites in Houston.
  • 01:29:14That the load numbers get changed and varied
  • 01:29:18with recloser devices and things
  • 01:29:23as you go further down. And that means what used to be a whole line
  • 01:29:26at, say, 50, you put a recloser on
  • 01:29:30it, or whatever the device is, and now it's 25. Then it gets lower and
  • 01:29:33lower and lower, creating a problem. I would like to solve this as part of
  • 01:29:37the effort here, as we
  • 01:29:41are trying to create resiliency in this system
  • 01:29:44and in your system and in all the utility systems to allow consumers
  • 01:29:48and businesses to do what they want to ensure that their businesses can function.
  • 01:29:53So, yes, sir. I think on as
  • 01:29:57we have that discussion, we should include,
  • 01:30:01you know, if we, if in our judgment and
  • 01:30:05you all agree to we need to have these devices, I think we
  • 01:30:08could talk about how do you remove the barrier to individual customers,
  • 01:30:12then, you know, who pays for it, essentially. That's right.
  • 01:30:15Especially as we think about the societal
  • 01:30:19benefits of these local distributed generation
  • 01:30:23assets. If there are societal benefits,
  • 01:30:27then perhaps society pays for these devices.
  • 01:30:31And so I think we're happy to have that conversation. We should have that
  • 01:30:36not part of their investigation, but part of the other distributed
  • 01:30:39resource discussions that we have and we'll have more of. Thank you.
  • 01:30:43Yeah, and I want to come back because chairman Gleason asked for
  • 01:30:48previous and ongoing analysis of your decisions. I really
  • 01:30:52want that number of how many megawatts you can rotate out today. You've made a
  • 01:30:55lot of investments in your system. I had an answer
  • 01:30:58that Eric, you gave me an answer that was a non answer. I want the
  • 01:31:01total amount of megawatts you can rotate out today.
  • 01:31:05Not by ERCOT direction, not just how many can you rotate out effectively
  • 01:31:08today. And I want to also reemphasize
  • 01:31:12this, Jason. Because you've talked a lot about load shed today.
  • 01:31:16But the fact of the matter is, is that CenterPoint did a significant testimony.
  • 01:31:21And from my understanding, I wasn't at the legislature
  • 01:31:24at the time or staff or anything like that. I was actually at the Commission.
  • 01:31:27But you guys really sold this mobile
  • 01:31:30generation at the legislature and submitted a lot of testimony
  • 01:31:34here in your DCRF docket, the underlying docket.
  • 01:31:38Talking about how these mobile generation units could be used for hurricanes.
  • 01:31:41And the fact of the matter is the majority of them
  • 01:31:45cannot be used for hurricanes. So, you know, you can focus on
  • 01:31:49loadshed all you want, but you guys made the case for hurricanes. And now
  • 01:31:52we're at a place after Hurricane barrel where there's been devastating
  • 01:31:56impacts in the service territory. People died.
  • 01:32:00And so like, we're having to understand,
  • 01:32:04I'm trying to understand why we're so focused on load shed today when hurricanes
  • 01:32:09was a big part of your testimony, your position
  • 01:32:13in various venues. So I just wanted to say that,
  • 01:32:16and I don't expect you to have an answer, but that's.
  • 01:32:20I just find it, you know, I feel like there's
  • 01:32:24a lot of kind of talking out of both
  • 01:32:28sides of your mouth on this issue, doing little dances,
  • 01:32:31pointing to different facts to justify your decision. But the fact of
  • 01:32:34the matter is, we're here and we need to figure out what we're going to
  • 01:32:37do with this fleet. Sure. Now, I can provide a couple of responses.
  • 01:32:40So, on the. I don't want an answer. I'm done. I just.
  • 01:32:44I'm done with the discussion. It's just the last statement I wanted to. I thought
  • 01:32:47you were asking. No, I just want the megawatts from you. How much? Okay.
  • 01:32:501700. That's all you. Even rotation is 1700.
  • 01:32:55The mobile gen makes up the rest of it.
  • 01:33:00Because in order, as I said earlier, the 3000 mw that
  • 01:33:04we have is the manual load shed number. And then
  • 01:33:07we added to that about roughly 400 more megawatts
  • 01:33:10with the IGSD devices. So that gives you
  • 01:33:14roughly 3400. And so if you take half
  • 01:33:18of that in order to do even rotation, so that's a predictable
  • 01:33:21rotation, so that we can tell customers how many,
  • 01:33:25how long they're going to be out before they come back on. It has to
  • 01:33:28be a 50 50 ratio. So that's how you get to the 1700.
  • 01:33:32And then if we had a URI type event
  • 01:33:36or deeper load shed than that. Then that's where the
  • 01:33:40temporary generation fills that void. Okay,
  • 01:33:43well, I. I don't
  • 01:33:47know that that completely answers what I'm saying.
  • 01:33:50What I'm trying to get here is how many thousands of megawatts
  • 01:33:54can you now rotate out? You can rotate out more than 5000. Now,
  • 01:33:57when you say rotate out, do you mean shed? Shed. Yeah, we can drop
  • 01:34:01as many as we have. I mean, that's the honest is, if ERCOT
  • 01:34:05directs us to shed all of our load, we'd have to shed all of
  • 01:34:08our load. Well, but you can't. Right? Because of certain restrictions with
  • 01:34:11critical load. So there's a difference between the shedding of load
  • 01:34:15and the rotating of load. So when we shed load,
  • 01:34:18that's where ERCOT gives a directive in order to maintain system frequency.
  • 01:34:23And whatever number that they give us is what we shed. They give
  • 01:34:26you 5000 last time. Our ability to rotate
  • 01:34:31necessitates that we have some load still online so that we can rotate
  • 01:34:34that load. And so during Winter Storm Uri, the issue was that
  • 01:34:39we had a directive to shed more than that 50% ratio.
  • 01:34:43And so that's why we could no longer rotate the load, but we could still
  • 01:34:46shed. If ERCOT had told us to continue shedding, we would have
  • 01:34:50had to continue shedding. Otherwise we would have had a blackout across the entire
  • 01:34:54ERCOT region. And so we continued to shed even
  • 01:34:57though we could no longer rotate. And the
  • 01:35:00temporary generation is what solves the rotation problem.
  • 01:35:04But the shed is the shed. We would shed whatever ERCOT
  • 01:35:08directs us to shed. Well, I want something in writing that explains this in
  • 01:35:12the issues related project. We will definitely have it. Because I want to make
  • 01:35:15sure that the information you all have been providing ERCOT in
  • 01:35:19various forums on your ability to rotate matches what you provide us
  • 01:35:22in this record. Thank you. Yeah. And I think one thing
  • 01:35:26that might be helpful, I think, you know, the large units.
  • 01:35:29I think, were procured in large part because we have an order that says,
  • 01:35:32don't rotate any customer for more than 12 hours. And so that's
  • 01:35:36part of that determination. So I think what would be helpful is,
  • 01:35:39given that order, has that number changed?
  • 01:35:43And so I think it would be helpful to talk to staff and come by
  • 01:35:46and brief the offices. Because I think that was a large reason as to
  • 01:35:49why those large, those larger units were procured. And so has that number changed
  • 01:35:53since that initial procurement?
  • 01:35:56Happy to do that. Okay. I think those large generators, the way
  • 01:35:59that they propose to use them, from an engineering perspective,
  • 01:36:04increase the flexibility for all the consumers in Texas on how to shed
  • 01:36:07load, especially those in your territory.
  • 01:36:11It's just a solution to one problem
  • 01:36:15that's been superimposed on another problem. And I think that
  • 01:36:20the discussion, like you said, Jason, needs to happen on,
  • 01:36:23is this your role in the system that
  • 01:36:27was set up by the legislature, or is it not?
  • Clip 51 - Commissioner Jackson's question on managing risk, 56793
    01:36:31 But either way, we need to manage the risk. Right. And so what I'd be
  • 01:36:34interested in, because you mentioned, or you laid out, like,
  • 01:36:38three areas that you are, three distinct areas that you have to
  • 01:36:41manage the risk on. So it's not only what you're dictated
  • 01:36:45to do by ERCOT, but also the fact that you have 60%
  • 01:36:49of your powers input to Houston,
  • 01:36:52as well as any risk associated with your traditional
  • 01:36:56facilities that are now operating in the Houston area.
  • 01:36:59So it's three areas with
  • 01:37:04different levels of risk that at some point in time, you have to come together.
  • 01:37:07And I'm assuming that's part of what is going to be part of this study
  • 01:37:10and this independent an
  • 01:37:14assessment that's going to be done. And so, I mean, at the end of
  • 01:37:17the day, we want to make sure that the lights stay on in Houston,
  • 01:37:21but we want to do it in a way that, you know,
  • 01:37:24manages risk effectively and in
  • 01:37:28the most cost effective way we can. You're absolutely correct.
  • 01:37:31And those three don't even cover the electrification issue
  • 01:37:35that Jason brought up earlier. So our residential
  • 01:37:40customer growth is not going to parallel
  • 01:37:44the load growth from electrification of industrial
  • 01:37:49facilities in the Houston footprint. And so to Commissioner
  • 01:37:53Glotfelty's point, we've got to think about how
  • 01:37:57do we handle industrial load in the load ratio share?
  • 01:38:00As we talk to our industrial partners in the Houston footprint,
  • 01:38:04we could see two to three times the industrial load that we have today,
  • 01:38:08which means essentially the residential customers that are left
  • 01:38:12are going to have an even detrimental position from a
  • 01:38:15load shed perspective if we don't address the
  • 01:38:19inclusion of industrial load in the load ratio share.
  • 01:38:26One last thing. Going back to the lease,
  • 01:38:29it is odd that there is no way for you to terminate it. I think
  • 01:38:33you can always go back and renegotiate. I think you should look at those options
  • 01:38:36and see what is available, see if subleasing them to others
  • 01:38:40is available, because I think you need to have those options ready to present to
  • 01:38:43the Commission and the Legislature most likely as well.
  • 01:38:46Understood. I just have three more questions.
  • 01:38:49I'm kidding. I'm done.
  • 01:38:54So Jason and Eric, thank you for being here. Thank you for answering our questions.
  • 01:38:57You know, there's some follow up to do. Work with staff in the offices to
  • 01:39:00get the information and we'll continue to be in contact. Yes,
  • 01:39:03sir. Thank you. Thank you. So we are
  • 01:39:07getting dangerously close to needing to give our court reporter a break. I think we're
  • 01:39:10still waiting for a second court reporter to arrive. That is right. So let's
  • 01:39:14try to at least get through. Let's go to public testimony,
  • 01:39:18and if we have public comment, which I think we do try
  • 01:39:21to get through that, and then we'll take a break so we can give our
  • 01:39:24court reporter a much deserved break. That sounds
  • 01:39:28good. So then you would like to take up Item No. 1
  • 01:39:32is that correct? Yes, take up Item No. 1. Shelah, do we have anyone signed up
  • Clip 1 - Shelah Cisneros, Commission Counsel, confirms 3 people have signed up for Public Comment
    01:39:35for Public Comment? Yes, sir. We have three people that have signed
  • 01:39:38up for Public Comment. The first person that signed up is Bruce
  • 01:39:42Sorgen.
  • 01:39:45And just to clarify, is it the usual three minutes? 3 minutes.
  • Clip 1 - Bruce Sorgen, TX citizen, concerning Windermere Oaks WSC
    01:39:53 Hello, Commissioners. My name is Bruce Sorgen. As you may remember,
  • 01:39:57they're looking for a job opening. Maybe I'm down here so much.
  • 01:39:59But anyway. Windermere Water Supply is a
  • 01:40:03water co op in the Spicewood area,
  • 01:40:06285 water meters,
  • 01:40:09since for the last nine years, it's been in full turmoil
  • 01:40:14mode. In 2020,
  • 01:40:17a rate appeal that you are quite familiar with was centered around a 71%
  • 01:40:21rate increase. This increase was implemented for
  • 01:40:24one purpose, so the board could spend over $2 million in legal fees.
  • 01:40:28Legal fees to cover an outrageous land deal where the previous board sold 3.8
  • 01:40:32acres of water co op land to a sitting director who
  • 01:40:37is a realtor for one 6th of its value, mind you, that the board chose
  • 01:40:41to aggressively insert themselves into this legal battle.
  • 01:40:46Why am I here today? I am here today to ask this
  • 01:40:49Commission, where is our PUC ordered audit?
  • 01:40:53I am here today to ask this Commission,
  • 01:40:56where is our PUC ordered $886,000
  • 01:41:00rate refund that you guys ordered?
  • 01:41:04We have many retired people in our community that need this money just to live.
  • 01:41:08I have yet to find one member of our community who has received any of
  • 01:41:12this money. I'm here today to ask this Commission
  • 01:41:16how it is that a water board, a water commit.
  • 01:41:19A WSC board can spend $75,898
  • 01:41:23on legal fees in the last four months alone.
  • 01:41:28We've yet to see Julys.
  • 01:41:32Mister Carleton is a law firm who has billed our
  • 01:41:36community 75,000 plus dollars.
  • 01:41:40July is going to be even worse anyway. For the
  • 01:41:43last four months, I mean, for four months
  • 01:41:46alone, this Commission ordered
  • 01:41:52$3,000 a year legal budget for the. For the entire year
  • 01:41:56anyway. The wind. Tomorrow, the Windermere Oaks Water
  • 01:42:00Board is paying a lawyer to write boards, agendas and minutes.
  • 01:42:04In the last 16 months, there have only been one set of minutes produced.
  • 01:42:09If we're going to pay a lawyer to do this for this kind of outrageous
  • 01:42:13waste, why do we need a board? Why is there no system
  • 01:42:16in place for this great state of ours to make a board comply with this
  • 01:42:19Commission's orders?
  • 01:42:23The current board is not concerned with anything this Commission has ordered.
  • 01:42:27The proof of that is can easily be seen in their filings
  • 01:42:30to the Commission. Oh, wait, they don't bother to do
  • 01:42:33their required filings, do they? Instead, they are
  • 01:42:37focused on one thing only. The quick sale of a remaining six acres
  • 01:42:40of co op land. They've even
  • 01:42:44fired the entire real estate committee because these ladies were pushing
  • 01:42:48them to slow down and property market the land
  • 01:42:52and get an appraisal. In closing, I am asking this Commission
  • 01:42:55to install a manager to run this co op. We are quickly approaching a
  • 01:43:00decade of this three ring circus.
  • 01:43:03Thank you for being here. The next person that signed up
  • 01:43:06is Danny Flunker.
  • Clip 1 - Danny Flunker, TX citizen, on behalf of rate payers of Windermere Oaks WSC
    01:43:19 How are y'all doing this morning? It is morning still
  • 01:43:24alright, you know. Here we are again. We're back. Thank you for having
  • 01:43:27us. I'm here on behalf of many of the ratepayers
  • 01:43:31in our community who feel utterly voiceless on the ongoing issues
  • 01:43:35with Windermere Oaks Water Supply Corporation. And as
  • 01:43:38Bruce mentioned, for 16 months, they have one set of minutes produced.
  • 01:43:42The lack of transparency is unacceptable.
  • 01:43:46At the last WWC meeting, Windermere Water Supply Corp.
  • 01:43:49Meeting with the new attorney being present, the members were
  • 01:43:53left outside in the scorching heat while the board and the attorney went
  • 01:43:57down the street to the directors house in their air conditioned home for nearly 3
  • 01:44:00hours in executive session. Upon the return, they voted
  • 01:44:04on only one of five agenda items and
  • 01:44:07adjourned, completely ignoring the other agenda items.
  • 01:44:11Among those disregarded items were critical issues.
  • 01:44:16The IR's investigation. Nothing. They didn't table it.
  • 01:44:20PUC compliance matter 56167.
  • 01:44:23Didn't table it, didn't talk about it.
  • 01:44:26PUC enforcement compliance matter Docket 56272 didn't
  • 01:44:30talk about it. Didn't table it. And then the
  • 01:44:33CCN application. PUC application Docket 55840
  • 01:44:38didn't talk about it. Didn't table it. Nothing. And again,
  • 01:44:42despite spending nearly $76,000 in legal fees in just four months,
  • 01:44:45and they haven't given us July's invoices yet and I've requested them,
  • 01:44:50these matters all remain unaddressed. Furthermore,
  • 01:44:54the water co op has been operating without a president, secretary or
  • 01:44:58treasurer since March, and they have three directors,
  • 01:45:02so that each one of them could take one of those roles, which is a
  • 01:45:05serious governance failure. We're just
  • 01:45:09asking for relief, some form relief. This is an untenable situation.
  • 01:45:13And as Bruce mentioned, we have a decade of corruption and it
  • 01:45:17just continues. That's it. Thank you. Thank you,
  • 01:45:20sir.
  • 01:45:23And the last person to sign up was Allen Hicks.
  • Clip 1 - Allen Hicks, TX citizen, concerning Windermere Oaks WSC
    01:45:39 Good morning Commissioners and thank you for allowing me to speak.
  • 01:45:43I spoke before y'all, right, before y'all ruled on our rate
  • 01:45:46appeal. Just giving y'all a little bit of a personal touch to
  • 01:45:50the hardships that. That 71% rate appeal
  • 01:45:55or the 71% increase
  • 01:45:58they put on us to pay the legal fees. After y'all's ruling,
  • 01:46:02I wanted to come for you all first to thank y'all for that.
  • 01:46:06I'm a retired police officer with fixed
  • 01:46:10income. And as a result of y'all reducing our rates,
  • 01:46:14I'm seeing $130 more a month on my.
  • 01:46:18Less on my month, $130 more a month less on my water
  • 01:46:22bill, which is coming in pretty handy right now in these hard economic times.
  • 01:46:26And I'm not using any more water than I was using before.
  • 01:46:30Y'all ruled for them to roll our rates.
  • 01:46:33And our community is a group of. There's quite a few
  • 01:46:37retired people, and I'm sure they really appreciated
  • 01:46:41y'all lowering our rates down because it's helped us all, because we
  • 01:46:45all are on the. Well, a lot of strong fixed incomes out there.
  • 01:46:48But going to just touching on what Danny and Bruce have said,
  • 01:46:52however, this current board, under the leadership of Jeff Walker,
  • 01:46:57they're going down the same path. The land sale that Bruce just talked about,
  • 01:47:00not only are they trying to emulate
  • 01:47:05this original land sale, that char that started the lawsuit
  • 01:47:09that caused the rate appeal, there's a lift station on the there.
  • 01:47:13And against advice from attorneys, they have
  • 01:47:16not surveyed the land. They have not got an appraisal of the land. So we
  • 01:47:20don't know what the plan is with the lift station for our water corporation,
  • 01:47:24if that property is sold. And at
  • 01:47:27this point, I don't even know if we do have a legitimate board because since
  • 01:47:32February, when we had our board elections, we had a full board.
  • 01:47:35Then folks started leaving the board. There was
  • 01:47:39a lot of disagreement on the way things were run.
  • 01:47:43We've had several meetings where members were picked
  • 01:47:47from the meeting
  • 01:47:50to come up and set to be a board member so we'd have a quorum,
  • 01:47:54so they could talk about things and vote on things. That's how I
  • 01:48:01don't even know the correct word to say. But that's how bad things have gotten
  • 01:48:04involved. Windermere, that we are asking
  • 01:48:08for volunteers to come up and set it so we'll have a quorum
  • 01:48:12to cover agenda items. And the reason folks don't
  • 01:48:16want to sit on the board is, as Danny and Bruce
  • 01:48:19had said, I think they're afraid to
  • 01:48:22sit on it because there's a continued violation of the
  • 01:48:26Texas Open Meetings act. They're ignoring your
  • 01:48:30PC, PCU filings.
  • 01:48:34They haven't made any of the PCU filings, the deadlines on those,
  • 01:48:37just a couple of those has been mentioned is
  • 01:48:41the compliance filing, the CCN filing.
  • 01:48:43And so a lot of folks don't want to get saddled with possibly
  • 01:48:48doing something illegal. And there
  • 01:48:51has also been talk about coming before you all to ask for an emergency
  • 01:48:56rate of bill to raise the rates and set assessment.
  • 01:48:59So we're back to paying the rates that we were. So I just echo
  • 01:49:03Danny and Bruce's thoughts and asked you
  • 01:49:07step in and help with possibly an emergency manager.
  • 01:49:10Thank you, sir. Did you say you're on a fixed income as a retired police
  • 01:49:14officer? Yes. Yes, sir. Thank you for your public service to your local community and
  • 01:49:18thank you for being here today. Thank you,
  • 01:49:22Shelah. I think maybe a 20 minutes recess so
  • 01:49:26we can switch out Court Reporters? I am just looking
  • 01:49:29around the room. I'm not sure the court reporter has arrived yet. She has not.
  • 01:49:34You're welcome to take a recess for a break. Or we could do the consent
  • 01:49:37agenda. Why don't we roll through the consent
  • Clip 0.1 - Shelah Cisneros lays out Consent Agenda
    01:49:41agenda then? Okay. All right.
  • 01:49:44Commissioners recusal memos were filed in Project No. 527611.
  • 01:49:49Chairman Gleeson is recused from Items 817,
  • 01:49:5220, 22, and 28. Commissioner Hjaltman is
  • 01:49:56recused from Items 5, 20, 21, and 22.
  • 01:50:00By individual ballot, the following items were placed on your consent agenda:
  • 01:50:04Items 2, 4, 7-16.
  • 01:50:09Let me back up. Hold on. I think there's a discrepancy here.
  • 01:50:132, 4, 5, 7-16,
  • 01:50:1618, 21, 24-27.
  • 01:50:20And also by individual ballot, the Commissioners voted to place Items
  • 01:50:24on the consent agenda where no one signed up to speak in those Items,
  • 01:50:28and those Projects are 30, 31, and 56.
  • Clip 0.1 - Chairman Gleeson asks for motion to approve items on Consent Agenda
    01:50:33 I would entertain a motion to approve the consent items as laid out by Shelah.
  • 01:50:37So moved. I second. Motion and second. All those in favor say aye. Aye.
  • 01:50:42Opposed? Motion prevails.
  • 01:50:46And sir, if you'd like to take the 20 minutes break? I think during that
  • 01:50:49time period, the court reporter is expected to arrive. And we can do the switch
  • Clip 0.1 - Chairman Gleeson recesses open meeting
    01:50:51out and be ready when we resume. Perfect. We'll stand in recess until
  • 01:50:5511:45.
  • Clip 0.1 - Chairman Gleeson resumes open meeting
    01:51:00 We will call the meeting back to order at 11:47.
  • 01:51:05So I was informed I made a mistake.
  • 01:51:09I prematurely closed down our Beryl discussion.
  • Clip 52 - Chairman Gleeson recalls Project No. 56822
    01:51:12 So we're going to call back up Items 52 and
  • 01:51:1658. So that's Project No. 56822,
  • Clip 58 - Chairman Gleeson lays out discussion & possible action regarding customer service issues
    01:51:19investigation of emergency preparedness. And 58, discussion and
  • 01:51:23possible action regarding customer service issues, including, but not limited to,
  • 01:51:26correspondence and complaint issues. Connie, go ahead.
  • Clip 58 - Connie Corona speaks on customer complaints concerning CenterPoint, 56822
    01:51:30 Thank you. So since Hurricane
  • 01:51:35Beryl, our call volume and the
  • 01:51:39informal complaints that our consumer protection division has taken roughly
  • 01:51:44doubled. We had 1320
  • 01:51:51complaints against CenterPoint as of
  • 01:51:54the close of business yesterday. 65 of
  • 01:51:58those are what I'd like to talk about today.
  • 01:52:04They were related to meter reads that were estimated
  • 01:52:08while customers were actually not receiving service.
  • 01:52:12In general, the pattern is that the customer cease
  • 01:52:16usage was recorded on days when they still had
  • 01:52:20not yet been restored. I'd like to ask CenterPoint to walk through
  • 01:52:25how this problem was identified and resolved, and then
  • 01:52:29I'd like to hear from one of the reps
  • 01:52:33who experienced this issue with their customers. I'd like
  • 01:52:37to invite Christina Rollins with NRG to address this from the rep
  • 01:52:40perspective and for Centerpoint to sit the appropriate personnel.
  • 01:52:50Good morning Chairman Gleeson and Commissioners. Jason Ryan, Executive Vice President with CenterPoint
  • 01:52:54Energy. I have with me today Tony Gardner, our Chief Customer
  • Clip 52 - Tony Gardner, CenterPoint's SVP Chief Customer Officer on the estimated meter process, 56822
    01:52:57Officer. I'll turn it over to Tony. Good morning, Commissioners. I think it's
  • 01:53:01still morning. And mister chairman, my name is Tony Gardner. I'm senior vice
  • 01:53:05president and chief customer officer at Centerpoint. Energy. I guess
  • 01:53:08I'd like to start by providing some context to you all about how our estimated
  • 01:53:12meter process works and its totality.
  • 01:53:15So, if a customer has power on at their
  • 01:53:19home, and we're unable to communicate with their meter, what we do is
  • 01:53:23we look at our meter data at a 15 minutes interval
  • 01:53:27level. So, think 96 intervals in a 24 hours time frame.
  • 01:53:30If a customer's power is on, our system says the power is on, and we're
  • 01:53:34not able to communicate with our meter. We will estimate
  • 01:53:37a customer's usage at the 15 minutes interval level every
  • 01:53:42day that the power, it shows that it's on, and we don't get
  • 01:53:45a meter read, meaning we can't communicate with the meter.
  • 01:53:48The second part of that scenario is, if our system shows that a
  • 01:53:52customer does not have power at their premise, and we cannot communicate
  • 01:53:56with their meter, we do not estimate usage for
  • 01:53:59that timeframe that the customer shows that they did not have power.
  • 01:54:03So any customer that our system shows that they did not have
  • 01:54:06power, we put in zeros in those intervals
  • 01:54:10and transmit that information over to ERCOT, which sends it to our retail electric
  • 01:54:14providers. To provide you some additional context, for the
  • 01:54:17month of July's billing period, we issued more than
  • 01:54:212.9 million transmittals, or inverse invoice
  • 01:54:25data, over to our ERCOT and our retail electric providers.
  • 01:54:29Of that 2.9 million meter usage
  • 01:54:34interval data that we sent over to our retail lecture providers,
  • 01:54:3796,000 of those showed some form of estimation,
  • 01:54:41whether it was an estimated meter read because we couldn't communicate with the meter,
  • 01:54:45or we zeroed out information in the interval
  • 01:54:48level so that customers would not receive inaccurate bills.
  • 01:54:52Of that 96,000, we looked at 74,000
  • 01:54:55of those meter reads where our usage for that
  • 01:54:5830 day timeframe was 30%,
  • 01:55:01on average, lower than it was at this time
  • 01:55:05last year. So far, we've received 1300
  • 01:55:12meters dispute requests that have come from our retail providers.
  • 01:55:15We've done our due diligence and make sure that we have reviewed each and every
  • 01:55:19one of those requests. Turns out there have
  • 01:55:22been 16 of those requests that needed
  • 01:55:26to have the charges reversed and rebuild for
  • 01:55:29customers. So we reversed out the charges, we sent back
  • 01:55:33new meter reads through ERCOT to the rep, so that they could
  • 01:55:36re invoice customers at that point. But that is the extent
  • 01:55:41of how our estimation process works and kind of what we've experienced
  • 01:55:44during Beryl so far, and I'm open to any questions that you guys may have.
  • 01:55:51Commissioners?
  • Clip 52 - Connie Corona's question for CenterPoint concerning the modification of their standard operating procedure, 56822
    01:55:56 So what you've described sounds
  • 01:56:01like the process that staff understood
  • 01:56:05to be the standard operating procedure.
  • 01:56:09But we're curious at what caused some of these anomalies and
  • 01:56:13whether you're able to modify your processes to prevent
  • 01:56:17this from occurring in the future. For example,
  • 01:56:20in some cases upon our investigators found
  • 01:56:24that usage was not only attributed
  • 01:56:28to customers while they were out of service,
  • 01:56:32but that estimate was actually higher than their reads for the previous month.
  • 01:56:37Yeah, absolutely. So we'll continue to fine tune the equation
  • 01:56:41that we built in, which is a model. So our system takes a look at
  • 01:56:44a customer's usage from the past three months, and typically it would
  • 01:56:49create an exception that would come out to my team. We would take a look
  • 01:56:52at the exception before we released that billing usage to make
  • 01:56:55sure that it did not exceed what we expected
  • 01:56:59that customer to see or wouldn't cause an issue in the next month
  • 01:57:02when they had a true up for their estimated usage. We'll continue to
  • 01:57:06fine tune the model, but like I stated, so far we've seen 16 of
  • 01:57:10those. But we always look for a way to make sure that we can always
  • 01:57:13refine and fine tune that model. Some of the degree days
  • 01:57:16when you have storms that push in that create some of these anomalies,
  • 01:57:19that the model just needs more time to digest and continue to
  • 01:57:23evolve and grow and make sure that it catches more of these.
  • 01:57:27Thank you for that explanation. No problem.
  • 01:57:32Christina, I have a couple questions for reps.
  • 01:57:36Can you just describe for us how NRG,
  • 01:57:40as a rep can communicated with its customers who receive
  • 01:57:43the types of bills we're talking about?
  • 01:57:46Sure. And I think it might be helpful to start with kind
  • 01:57:50of where customers were first seeing this issue that y'all were talking about.
  • Clip 52 - Christina Rollins, NRG's Assistant General Counsel of Reg. Affairs on communication with customer, 56822
    01:57:54So, Christina, will you say your name and who you are? Oh, sorry. Christina Rollins,
  • 01:57:57assistant general counsel of regulatory affairs for NRG.
  • 01:58:00And so the TDUs send usage to reps,
  • 01:58:05which are also known as lses, in more than one way. So there's a daily
  • 01:58:09interval usage file that the TDU send us. They also upload
  • 01:58:12that to the smart meter Texas portal. And that's really where customers can
  • 01:58:16see their daily usage consumption, what they're using during different intervals.
  • 01:58:20Reps also use that information for, you know, customer tools like
  • 01:58:23weekly summary usage emails, which customers, you know, find helpful.
  • 01:58:27And so customers can see their usage history. That's pretty much where customers
  • 01:58:31were first starting to see an issue. Right? So Hurricane Beryl makes landfall on July
  • 01:58:358. Customers start seeing usage on the portal, or they
  • 01:58:39start seeing usage in these weekly summary emails when their
  • 01:58:42power was out. And so once we realized that was occurring,
  • 01:58:46we contacted the tdus, and I think Centerpoint,
  • 01:58:49it was really mostly an issue that Centerpoint, I think, also already knew about.
  • 01:58:53But it took about a week for that gap to close
  • 01:58:56where customers were then seeing zeros on the SMT portal
  • 01:59:00when they actually were out of power. So that took roughly
  • 01:59:04by July 29, I think that was fully resolved by the time
  • 01:59:08you go to bill a customer. There's also an 867
  • 01:59:12transaction, and that's like the periodic monthly meter read that you get
  • 01:59:15from the TDU. And if there are estimates in
  • 01:59:18that, then the bill that the rep issues to a customer based upon
  • 01:59:22that 867 will indicate that it's based on estimated
  • 01:59:26usage from the TDU. So kind of with that background,
  • 01:59:29by the time you got to the 867, I think most of
  • 01:59:32these issues largely had been resolved. But we did know that customers
  • 01:59:36had questions from that daily usage file.
  • 01:59:39So we prepared our call center agents to be able to explain what was going
  • 01:59:42on. We let them know that the TDU is aware of the issue and
  • 01:59:46that they would be correcting it and that they would not be charged for usage
  • 01:59:50for the time periods in which their power was actually
  • 01:59:53off. And in addition, we made an update to their online
  • 01:59:57account maintenance portal, which is where some customers prefer to
  • 02:00:00interact with us instead of calling the call center so they could receive
  • 02:00:04information electronically. Additionally, we have
  • 02:00:07weekly summary emails, which we included that information on as well to let them know
  • 02:00:11that there was an issue. We're aware of it. As far as the call center's
  • 02:00:15ability to field calls, we're happy to say
  • 02:00:19that during the period of the crisis, our average wait time to get to
  • 02:00:22a live agent, less than a minute. In that we
  • 02:00:25fielded a large number of calls during the
  • 02:00:28hurricane barrel recovery effort. I think the highest call
  • 02:00:32volume we had in a single day was something like 44,000 calls.
  • 02:00:37Thank you both for that update. Commissioners, do you
  • 02:00:41have any questions? I think one question.
  • 02:00:45Have we seen this before with estimated meter reads in
  • 02:00:49previous hurricanes or like during Uri? I can't remember. Yes,
  • 02:00:53we have. And our investigators
  • 02:00:56were on the lookout for it as customer complaints came in.
  • Clip 58 - Commissioner Hjaltman's question to CenterPoint & NRG on communication with customers
    02:01:03 Is there anything you can do as
  • 02:01:07CenterPoint and or as the rep to allow the
  • 02:01:11customer to know this might be occurring so they don't immediately have that concern
  • 02:01:14of, I can't believe they're going to be charging me. I had no power.
  • 02:01:17Yeah, absolutely. We can do a better job of making sure that we educate our
  • 02:01:20customers on kind of what they see to the point they
  • 02:01:24were making earlier. We upload those files daily to Smart Meter
  • 02:01:27Texas. So customers have gotten prone to go out and look at Smart Meter Texas,
  • 02:01:31but sometimes it can take up to two to five days to true
  • 02:01:34up some of that meter usage in smart meter Texas as customers are
  • 02:01:38going out and looking for that information. So absolutely we can do a better job
  • 02:01:41of educating customers to be on the lookout for some of this on
  • 02:01:46top of the preventive measures that we take as a TDU and a retail
  • 02:01:49electric provider to make sure that they know that we're going to
  • 02:01:52make sure we do the best job of getting them accurate invoices.
  • 02:01:57Commissioner Hjaltman, we have a few ideas on that one as well.
  • 02:02:01I think we could shorten the time it takes to move from
  • 02:02:05the communication between the TDU use estimated reporting
  • 02:02:08sequence to their outage recovery sequence. Right, because rightly
  • 02:02:13so. I believe the TDUs all have a different method of doing this, that when
  • 02:02:17you're missing an interval, they'll estimate it for smart meter Texas
  • 02:02:20because it's really by and large you don't have a large scale outage happening.
  • 02:02:23So that makes sense that you would do an estimate that when there is a
  • 02:02:26large scale outage happening, closing that gap from
  • 02:02:30which you continue to estimate to reporting zeros would be really
  • 02:02:33helpful because here that gap stayed open for several days, which caused some
  • 02:02:37of the communication issues, having more frequent market calls
  • 02:02:40about what's going on. So we can also help communicate with customers.
  • 02:02:44You know, we're in this market together and we're in these communities together.
  • 02:02:47And so armed with information, reps can also help communicate. We have
  • 02:02:51extensive call centers, we have lots of resources. We communicate with customers
  • 02:02:55every day. So we're definitely here to help. So yes,
  • 02:02:58with information and we're going to be able to communicate with
  • 02:03:02customers together. Yeah. Good comment,
  • 02:03:05we appreciate that. During Beryl we hosted, we do
  • 02:03:09try to host a call every day with all of our reps just to let
  • 02:03:12them know where we were in the restoration effort, what was happening, those types
  • 02:03:15of things. But I'm gladly to work with them to see what else we can
  • 02:03:18add to that agenda to make sure that we get out the right information.
  • 02:03:22Thank you Commissioners for allowing staff to, to bring this
  • 02:03:26discussion where folks can
  • 02:03:29hear about this issue and understand it a
  • Clip 58 - Connie Corona recaps discussion
    02:03:33little bit better. And I would just recap it by
  • 02:03:36saying for the vast majority of customers,
  • 02:03:44when you go online to check how much you've used so far this
  • 02:03:47week or this day,
  • 02:03:51you know, that's where the vast majority of customers saw the problem.
  • 02:03:55But by the time the monthly bill was calculated and
  • 02:03:59sent out, by the retail electric provider. It was fully resolved.
  • 02:04:04So if you still have any concerns about your bill, please call
  • 02:04:07the retail electric provider that sent you that bill or you can always get
  • 02:04:11assistance from our Consumer Protection Division.
  • Clip 52 - Barksdale English, PUC's Deputy Executive Director concerning reports due to the Legislature & RFIs, 56822
    02:04:16Perfect. Thank you. Thanks. Thank you all. Commissioners,
  • 02:04:31last week Commission Staff issued a series of
  • 02:04:35voluntary requests for information from folks
  • 02:04:40who were participating in the recovery
  • 02:04:44from Hurricane Beryl so that we could inform the reports of
  • 02:04:47the Legislature. That's due at the beginning of December and
  • 02:04:52those responses are due at the end of the month. Earlier this week,
  • 02:04:55we issued mandatory requests for information to
  • 02:04:59about 90 different utilities that were in the impacted
  • 02:05:03area, which was kind of defined as any county in
  • 02:05:06which disaster declaration declaration was issued by the acting governor.
  • 02:05:13The 90 utilities received those requests for
  • 02:05:17information directly from us and we also posted
  • 02:05:21those RFIs online in our
  • 02:05:24interchange. Unfortunately, we had about 10%
  • 02:05:28of the utilities. Their contact information was
  • 02:05:32not good. And so this might be a
  • 02:05:36nice little public service announcement to
  • 02:05:41just have all of those utilities make sure that your contact information
  • 02:05:44is up to date so that we can be in touch and get the information
  • 02:05:49that our citizens and residents really need.
  • 02:05:53Of the 90 utilities, we sent RFIs to
  • 02:05:57about 30 co ops, about 30 cities,
  • 02:06:0017 water utilities and nine telecommunications
  • 02:06:03utilities. As those
  • 02:06:08utilities review the questions. You know,
  • 02:06:12staff just wants to reiterate that if there are questions
  • 02:06:15in those RFIs that don't appear to apply
  • 02:06:18to your operations, to your business model, then simply you
  • 02:06:21can respond with this does not apply. And that's a
  • 02:06:26also, there have been some questions about if a
  • 02:06:30utility did not receive a direct communication from our staff,
  • 02:06:34whether or not they need to proactively respond to those rfis.
  • 02:06:37And I just want to confirm for anybody out there who was maybe
  • 02:06:41hoping to get rfis, who didn't get them, you are
  • 02:06:45not responsible to answer questions if you did not receive a direct
  • 02:06:48communication from Commission Staff.
  • 02:06:52I guess the last two things that I wanted to update you all on are
  • 02:06:56the responses to those mandatory rfis are due on August 30.
  • 02:07:00And like everything that we've committed in this investigation,
  • 02:07:03all those responses will be filed publicly under Project No.
  • 02:07:0756822. And my
  • 02:07:11last note here is to thank the investigation
  • 02:07:14team that's been working really, really hard overdose the last
  • 02:07:18two weeks to get this investigation stood up and moving
  • 02:07:21very quickly with a tremendous amount of information that's being
  • 02:07:25researched and sought for. We've got nearly
  • 02:07:29a score of individuals in the Commission, from Cisrom
  • 02:07:33to Consumer Protection, our enforcement group, infrastructure group,
  • 02:07:37public engagement, and the rules and projects team.
  • 02:07:41It's a great effort that they've undertaken.
  • 02:07:45Undertaken.
  • 02:07:47And I know hopefully
  • 02:07:51I can speak for Connie, but I'm certainly thankful for their work and
  • 02:07:55we've got a lot more work to do and we'll
  • 02:07:58be leaning on them heavily to do that, as well as all
  • 02:08:01their kind of normal day to day stuff. So thanks for that. And I'm happy
  • 02:08:05to answer any questions about the status of the investigation. Absolutely. A tremendous
  • 02:08:08amount of work done already, but as you said, a lot more to do.
  • 02:08:12And so if any companies that received rfis have questions or
  • 02:08:16concerns, feel like there are portions that they might have problems
  • 02:08:20filling out, this is a staff led effort. So their
  • 02:08:23best course of action would be to contact staff. That's correct. Perfect.
  • 02:08:27Commissioners, any questions for Barksdale? Just one.
  • 02:08:30So if I happen to be one of these utilities in the area
  • 02:08:34that was canvassed, which was at least for some of
  • 02:08:38the RFIs, I think were in the extended declaration
  • 02:08:43area. Yes. Okay. So,
  • 02:08:47and if my, my utility was not impacted,
  • 02:08:51do I need to respond? My utility was not impacted. What's your
  • 02:08:54expectation there for that utility? Right. So if,
  • 02:08:57if your utility received a direct
  • 02:09:01communication from Commission Staff asking for responses to the request
  • 02:09:05for information, we expect you to answer the questions.
  • 02:09:08And if the questions imply that there was some sort of
  • 02:09:12impact to your area, simply just, you can respond that there
  • 02:09:15was no impact to my area or, no, I did not
  • 02:09:18use mobile generation or, you know,
  • 02:09:22you know, the questions that you're asking are not applicable and that's
  • 02:09:25okay. But we do need a response. Okay. Thank you.
  • 02:09:28Thanks. Okay. Thank you.
  • 02:09:32Thanks, y'all. Okay,
  • Clip 43 - Chairman Gleeson lays out Project No. 56897
    02:09:35 So now let's go ahead and call up Items 43
  • 02:09:40and 44 together. That's Project No. 56897,
  • 02:09:44electric utility outage trackers and hazardous condition reporting.
  • Clip 44 - Chairman Gleeson lays out Project No. 56898
    02:09:47 And Project No. 56898, provision of emergency contact
  • 02:09:51information to transfer transmission, distribution utilities by retail
  • 02:09:55electric providers. So I think these are two,
  • 02:09:58the reason I wanted to bring these up. I think these are two good examples
  • 02:10:01of what we committed to that issues that we could deal with quickly,
  • 02:10:05we would look to deal with quickly. And so I want to thank staff
  • 02:10:08for getting to these two, which came up in both legislative
  • 02:10:12hearings that I testified in. So, David, with that, if you want
  • Clip 43 - Commission Staff's David Smeltzer on communication & outage trackers, 56897
    02:10:15to lay out the PFPs. Yeah. Thank you,
  • 02:10:18Commissioners and Thomas. I think that our first
  • 02:10:22slate of rulemakings that will come out of the Beryl investigation
  • 02:10:26focuses on attempting to increasing and addressing some communications
  • 02:10:30and coordination issues that came out of barrel and other
  • 02:10:34incidents. The first of these is to require
  • 02:10:38tdus to have an online electricity
  • 02:10:42power outage tracker. This is an essential tool that allows customers
  • 02:10:46to go online and find out updates about, you know,
  • 02:10:49power outages in their area, how it could affect their community and neighbors,
  • 02:10:52maybe check on relatives. And so we've laid out some basic
  • 02:10:55requirements that we think that these trackers should have,
  • 02:10:59and we're interested in comments on additional features and functionalities
  • 02:11:04that they could and should have. This rulemaking also
  • 02:11:07addresses another coordination issue that can occur where electric
  • 02:11:11utilities have the ability to temporarily
  • 02:11:16stop providing electric service if it's needed to address a dangerous or hazardous condition.
  • 02:11:20And so, of course, with any situation like this, they need reliable
  • 02:11:24information that's accurate. And one
  • 02:11:27way to get that is from state agencies with areas of expertise in this,
  • 02:11:30such as the Railroad Commission or the State Fire Marshall,
  • 02:11:34the Public Utility Commission. So we're working on coordinating between
  • 02:11:38those agencies on a staff level. And what this rulemaking asks
  • 02:11:41utilities to do is to establish a process, to be
  • 02:11:45able to work with staff, to establish a process to be able to receive
  • 02:11:49information efficiently from these state agencies so
  • 02:11:53that they can determine whether or not they need to shut off power so that
  • 02:11:57a hazardous condition can be safely addressed.
  • Clip 44 - Commission Staff's David Smeltzer on emergency contact to TDUs by REPs, 56898
    02:12:00 The second rulemaking that we have to do has to do
  • 02:12:03with individual communications that customers receive during these outages.
  • 02:12:07And I know that one of the frustrations that folks had during
  • 02:12:10Hurricane Beryl was lack of reliable information
  • 02:12:14about what was happening to them in particular. And so essentially,
  • 02:12:19we are going to sort of flip the script on this. And right
  • 02:12:22now, customers have the ability to opt in to receiving communications
  • 02:12:27from their TDU. And essentially, we're going to change the default to opt
  • 02:12:30out. And the way that we do this in the rule is we're requiring
  • 02:12:34retail electric providers, who are the primary folks
  • 02:12:38who interact with customers today. You know, they handle most of the customer relationships.
  • 02:12:42So they have all the information to provide this information to
  • 02:12:46the transmission and distribution utilities so that they can issue
  • 02:12:49emergency contacts. And so we're very sensitive whenever
  • 02:12:53a customer, private customer information is involved.
  • 02:12:56And so we're very narrowly tailoring the uses that this can be
  • 02:12:59put to. It can only be used for communication of power outage
  • 02:13:04statuses and restoration timelines and updates across
  • 02:13:09both of these rules, you know, whenever, just because we want to move quick to
  • 02:13:12address these problems doesn't mean that we don't really want to get it right.
  • 02:13:16And so, you know, we really welcome comments from all the entities that would be
  • 02:13:19involved in the exchange of these information. And one favor that I have
  • 02:13:23is if you're a utility or a rep, that's responding
  • 02:13:27on either of these rules. If you file comments,
  • 02:13:30include in those comments a short description of your current capabilities.
  • 02:13:34So you know, this is how we currently share information. This is what our electric
  • 02:13:37outage tracker is currently capable of, just so that
  • 02:13:41we can make sure that we are,
  • 02:13:44have all the correct facts and we can present you all those facts so that
  • 02:13:47we can adopt the rule, the best possible rule,
  • 02:13:51you know, in another month or two when we get to it. Very good,
  • 02:13:54and thank you to you and again to the rule team for getting this done
  • 02:13:57and this PFP put together so quickly. Commissioners,
  • Clip 43 - Commissioner Cobos lays out her memo, 56897
    02:14:00any comments? Questions? I had a memo in each of those projects.
  • 02:14:04And so with respect to Project No. 56897 related to
  • 02:14:08the electric utility outage tracker, I proposed
  • 02:14:11two changes for our consideration. The first one being that the outage
  • 02:14:15tracker provide information both in English and Spanish where applicable.
  • 02:14:20The second one being that the utility would
  • 02:14:23be required to immediately notify the commission of the outage tracker unexpectedly goes
  • 02:14:27offline. And those are the
  • 02:14:31two changes that I think would help enhance the rule for better
  • 02:14:35communication with the public and also
  • 02:14:39so that we're aware when the audit tracker's down with
  • 02:14:42the utilities. Commission Staff
  • 02:14:46agrees with these recommendations. They're very thoughtful and fantastic and so
  • 02:14:49we would, we would advise today that you,
  • 02:14:53that you would approve us to publish the rules as filed,
  • 02:14:58but with the added concepts,
  • 02:15:01we'll go back and put them into the draft before we, before we publish.
  • 02:15:04Perfect. Thank you David. One thing you mentioned
  • 02:15:08about asking the commenters,
  • 02:15:11the utilities, to provide information about their current outage tracker.
  • 02:15:15It would be helpful to get a link so that you can click
  • 02:15:19on it and go look at the outage tracker as they
  • Clip 44 - Commissioner Cobos lays out her memo, 56898
    02:15:23provide that information or comments. So the
  • 02:15:27next project, Project No. 56898, related to the provision of emergency
  • 02:15:31contact information to the TDUs. I propose one change,
  • 02:15:34and that is to recommend the proposal be
  • 02:15:38amended to require the tdus to provide the affected customers
  • 02:15:42with information about power outages, estimated restoration times and
  • 02:15:46restoration updates in both English and Spanish. And I'll
  • 02:15:50leave the flexibility there for you to coordinate with the
  • 02:15:54reps and the tdus to figure out what the best practices
  • 02:15:57are there. It's my understanding that sometimes the
  • 02:16:01Reps customers state that they have a preferred language and
  • 02:16:05maybe it's more feasible in that regard. But I think that
  • 02:16:09to the extent we can get to a place where we can provide the information
  • 02:16:12in both languages, that would be helpful. I think that's a great idea.
  • 02:16:16So under our consumer protection rules, a rep has
  • 02:16:19to provide communications to a customer in the language in which they were
  • 02:16:23enrolled. So this makes sure that, you know, whatever you solicit their
  • 02:16:27business in, they get all the communications from that. I think we're interested in
  • 02:16:30comments from retailers and customers on whether or not that practice should be extended
  • 02:16:35through to the way they receive information here, and then whether or
  • 02:16:39not tdus are, you know, to what extent they're logistically capable of that. So comments
  • 02:16:42on how to appropriately handle these issues, I think,
  • Clip 43 - Motion to approve proposal for publication, 56897
    02:16:46would be well received. Anything else?
  • Clip 44 - Motion to approve proposal for publication, 56898
    02:16:51Okay. Then I would entertain a motion to approve the proposals for publication
  • 02:16:55in Project No. 56897 and 56898,
  • 02:16:59consistent with Commissioner Cobos memos and our discussion.
  • 02:17:02So moved. Second. I have a motion and a second. All those in
  • 02:17:06favor say aye. Aye. Opposed? All right. Motion prevails.
  • 02:17:09Thank you. Thank you, David. Okay, so now
  • 02:17:13we're going to go back to the top of the agenda with the contested
  • 02:17:16cases. So item two
  • 02:17:20was consented. So Shelah, will you lay out Item No. 3
  • Clip 3 - Petition by Outside City Ratepayers appealing the water rates by the City of Leander, 53063
    02:17:23please? Yes, sir. Item No. 3 is Docket
  • 02:17:26No. 53063. Petition by outside
  • 02:17:30city ratepayers appealing the water rates established by the
  • 02:17:33city of Leander. Before you is a SOAH proposal for decision.
  • 02:17:38The ratepayers and Commission Staff each filed exceptions. The ALJ's
  • 02:17:41declined to make changes to the PFD. The Commission heard oral argument
  • 02:17:45from the parties at the June 13 meeting. And Commissioner Gleeson
  • Clip 3 - Chairman Gleeson lays out his memo, 53063
    02:17:48filed a memo in this docket. So in my memo, I think,
  • 02:17:52in summary, you know, I agreed with the result of the
  • 02:17:56proposal by the ALJ just for slightly different reasons that are outlined in
  • 02:17:59the memo. Happy to take any comments or questions
  • 02:18:03on the memo. I'm in agreement with your memo.
  • Clip 3 - Motion to adopt PFD with modifications & deny appeal, 53063
    02:18:09Okay. Then I would entertain a motion to adopt the PFD
  • 02:18:12with modifications, and deny the appeal as outlined in my memo
  • 02:18:15inconsistent with our discussion. So moved. Second. I have a motion and a second.
  • 02:18:19All those in favor say aye. Aye. Opposed? Motion prevails.
  • 02:18:27Shelah, that'll take us to Item No. 6. We lay out Item No. 6,
  • Clip 6 - Application of Onalaska Water Supply Corporation to amend CCN in Polk County, 54820
    02:18:30please. Yes. Item 6 is Docket No. 54820.
  • 02:18:33The application of Onalaska Water Supply
  • 02:18:37Corporation to amend its certificate of convenience and necessity in Polk
  • 02:18:41County. Before you as a proposed order. No parties filed exceptions
  • Clip 6 - Chairman Gleeson lays out his memo, 54820
    02:18:45or corrections. And Commissioner Gleeson also filed a memo in this docket.
  • 02:18:49So I believe we should grant the good cause exception for the reasons outlined in
  • 02:18:53my memo. Happy to take any questions or comments. I agree.
  • Clip 6 - Motion to approve the good cause exception, 54820
    02:18:57I'm in agreement. Okay. I will entertain a motion to
  • 02:19:00approve the good cause exception as discussed in my memo in direct OPDM to
  • 02:19:04modify the order approving the application consistent with my memo.
  • 02:19:08So moved. I second. Motion and a second. All those in favor
  • 02:19:11say aye. Aye. Opposed? Motion prevails.
  • 02:19:17Shelah, that will take us for my portion before I hand
  • 02:19:21it over to Commissioner Cobos. That will take us to Item No. 19.
  • Clip 19 - Petition by residents of Grand Lakes M.U.D. No. 2 appealing water rates by the District’s Board of Directors, 56589
    02:19:25Will you lay out Item No. 19, please? Yes. Item 19 is Docket
  • 02:19:28number 56589. Petitioned by
  • 02:19:32residents of Grand Lakes Municipal Utility District number two.
  • 02:19:36Appealing the water rates established by the district's board of directors.
  • 02:19:40Before you as a proposal for decision.
  • 02:19:42Exceptions to the PFD were filed. The ALJ filed
  • 02:19:46a response that did not recommend any changes to the PFD. And Commissioner
  • Clip 19 - Chairman Gleeson lays out his memo, 56589
    02:19:50Gleeson filed a memo in this docket. So I agreed with the outcome in
  • 02:19:53the, in the PFD. But really filed the memos to make changes
  • 02:19:56to the order to provide guidance and more fully explain what
  • 02:20:01I think the right decision is, which is to say we have a lack of
  • 02:20:04jurisdiction, therefore should dismiss. Happy to answer any questions.
  • 02:20:09I'm in agreement with your memo. I'm as well.
  • Clip 19 - Motion to modify the PFD, 56589
    02:20:13Okay. I will entertain a motion to modify the PFD consistent with my memo.
  • 02:20:18So moved. I second. Motion and a second. All those in favor
  • 02:20:21say aye. Opposed? Motion prevails.
  • 02:20:26Shelah, I think that takes us then to Item No. 23. Will you lay
  • Clip 23 - Joint Application of Southwestern Public Service Co. and City of Lubbock, acting by and through Lubbock P&L to Transfer CCN, 56142
    02:20:30out Item No. 23, please. Yes. Item 23
  • 02:20:34is Docket No. 56142.
  • 02:20:37The joint application of Southwestern Public Service Company and the
  • 02:20:41city of Lubbock, acting by and through Lubbock power and light to transfer
  • 02:20:45certificate of convenience and necessity right. Before
  • 02:20:48he is a revised proposed order. And Commissioner Gleeson.
  • 02:20:52Chairman Gleeson filed a memo in this docket. You could
  • 02:20:56have gone with what David Smeltzer did and just call me Thomas. Yes.
  • Clip 23 - Chairman Gleeson lays out his memo, 56142
    02:21:04 So you know the way I feel on this.
  • 02:21:08I want to grant this application. I thought. I thought the record was a little
  • 02:21:11light and unclear. And since the applicant bears the
  • 02:21:15burden of proof to explain compliance with the statute, I think we should remand this
  • 02:21:19back to OPDM as outlined in my memo.
  • 02:21:22So happy to answer any questions.
  • Clip 23 - Motion to remand proceeding to OPDM, 56142
    02:21:26Supportive. Supportive. Supportive. Okay. I will entertain
  • 02:21:29a motion to remand the proceeding to OPDM as outlined in my memo.
  • 02:21:33So moved. I second. Have a motion and a second. All those in
  • 02:21:37favor say aye. Aye. Opposed? Motion prevails.
  • 02:21:41Okay. With that, I will hand it over to Commissioner Cobos.
  • 02:21:45All right. Thank you, Chairman Gleeson. Shelah, can you please lay out Item
  • 02:21:48No. 17? Yes, ma'am.
  • Clip 17 - Rate-Case Expense severed from Docket No. 50788, 56273
    02:21:52 Item 17 is Docket No. 56273.
  • 02:21:56Rate case expenses severed from Docket No. 50788.
  • 02:22:00Before you as a proposal order. No parties filed exceptions or
  • 02:22:04corrections. Commissioner Cobos filed a memo in this docket.
  • Clip 17 - Commissioner Cobos lays out her memo, 56273
    02:22:09Thank you, Shelah. So my memo basically sets forth the
  • 02:22:13basis for modifying the proposed order to
  • 02:22:16grant Windermere's request to recover zero and rate case expenses.
  • 02:22:21Windermere is the applicant seeking to recover reasonable rate
  • 02:22:25case expenses that incurred in the underlying appeal in Docket
  • 02:22:28No. 50788 and
  • 02:22:31granting Windermere's amended request to recover zero instead
  • 02:22:35of denying their request. And so
  • 02:22:40if you agree with me, that would mean that we would also
  • 02:22:43amend ordering paragraph number one to reflect that decision.
  • 02:22:47I think you've done this in a good way. Thank you. And move
  • 02:22:51this even further towards certain. So I support the memo. I support
  • 02:22:55the docket consistent with the memo.
  • Clip 17 - Motion to approve proposed order with changes, 56273
    02:22:59I do as well. Agreed. All right. I move to approve
  • 02:23:03the proposed order with the changes that are laid out in my memo.
  • 02:23:08So moved. I second. All right. All in
  • 02:23:11favor, say aye. Aye. All right, no opposed. Motion passes.
  • 02:23:17Okay, that moves us to Item No. 19. Shelah, can you please lay that one
  • 02:23:21out? I believe it
  • 02:23:24was. Oh, No. 20. I think Chairman Gleeson already did that.
  • 02:23:28We're off to Item No. 20. Can you please lay out that item? Yes,
  • Clip 20 - Application of the City of Lubbock acting by and through Lubbock P&L to change rates for wholesale transmission service, 54657
    02:23:31ma'am. Item 20 is Docket No. 54657.
  • 02:23:35The application of the city of Lubbock, acting by and through Lubbock power
  • 02:23:39and light, to change rates for wholesale transmission service.
  • 02:23:43Before you is a SOAH proposal for decision. The parties
  • 02:23:46filed exceptions and the SOAH ALJ filed a response,
  • 02:23:50declining to make changes to the PFD. Commissioner Cobos filed a memo in
  • 02:23:53this docket. All right. Thank you, Shelah.
  • Clip 20 - Commissioner Cobos lays out her memo, 54657
    02:23:56 So, as explained in my memo, I would move
  • 02:24:00to adopt, or my recommendation is to adopt the
  • 02:24:03PFD in part and reject the PFD in part.
  • 02:24:08The changes to the PFD that I would make are with respect
  • 02:24:11to the debt service coverage ratio and the payments in lieu of taxes.
  • 02:24:15With respect to the debt service coverage ratio, I would
  • 02:24:19be in favor of approving a 1.5 ratio
  • 02:24:24for the reasons set forth in my memo. I agree that the whole
  • 02:24:27harmless payment should not be included in the company's calculation
  • 02:24:33of the debt service coverage ratio, but for other reasons
  • 02:24:36set forth in my memo, I believe that the commission should
  • 02:24:41approve a 1.5 debt service coverage ratio so that the
  • 02:24:46utility has the ability to make their payments for
  • 02:24:49expenses and debt owed
  • 02:24:52and not violate their bond covenants. And then the second area that
  • 02:24:56I would modify the PFD on would be
  • 02:25:00to reject the ALJ's recommendation that LP&L's
  • 02:25:03payment in lieu of property taxes are appropriately included in tcost.
  • 02:25:08I believe that these payments should
  • 02:25:11be disallowed under PURA 35.009.
  • 02:25:15Based on the reading of that statutory language,
  • 02:25:20the utility should not be able to recover those payments
  • 02:25:24as they are, you know, governed in by the city of Lubbock.
  • 02:25:29So with that, I'll open it up for any questions, comments, additional feedback?
  • 02:25:33Just one question, maybe clarification. There also
  • 02:25:36was the issue of whether they could recover their franchise fee under
  • 02:25:40pura 35.09. I'm assuming,
  • 02:25:44since that's in the order, that an agreement that that's
  • 02:25:47approved. Yeah. I would be in favor of adopting the ALJ's recommendation on
  • 02:25:50that issue. I am as well.
  • 02:25:55Okay. All right.
  • Clip 20 - Motion to adopt in part & reject in part the ALJ's PFD, 54657
    02:25:58If I don't have any more comment on that one. I would move to
  • 02:26:02adopt in part and reject in part the ALJ's PFD,
  • 02:26:06consistent with the recommendations I made in my memo.
  • 02:26:10Second. So moved. I second. All right. All in favor,
  • 02:26:14say aye. Aye. None opposed. Motion passed.
  • 02:26:21Takes us to Item No. 22. Shelah,
  • 02:26:25can you please lay that item out?
  • Clip 22 - Commission Staff’s Petition for Declaratory Order regarding opt out of securitization uplift charges by Transmission-Voltage Customers, 56125
    02:26:32Yes, ma'am. Item No. 22 is Docket No. 56125.
  • 02:26:36Commission Staff's petition for declaratory order regarding opt out
  • 02:26:40of securitization uplift charges by transmission voltage
  • 02:26:44customer. Before you is a proposed declaratory order that
  • 02:26:48addresses the request for relief in this proceeding. And Commissioner
  • 02:26:51Cobos filed a memo. Thank you, Shelah.
  • Clip 22 - Commissioner Cobos lays out her memo, 56125
    02:26:54 So my memo would recommend that
  • 02:26:58we approve the proposed declaratory order with
  • 02:27:01the modifications set forth to remove a conclusion of
  • 02:27:05whether TIEC's issue should be addressed
  • 02:27:09in the declaratory order. And so
  • 02:27:12that would essentially lead to making a determination that
  • 02:27:16or a clarification that the opt out by transmission voltage
  • 02:27:20customers is not transferable to another entity and not address
  • 02:27:23TIEC's issue at this time.
  • Clip 22 - Commissioner Glotfelty asks to delay decision until next open meeting, 56125
    02:27:26 Madam Chairman, this issue's a little confusing to
  • 02:27:30me about how and when these uplift charges
  • 02:27:35should be and when they can be passed
  • 02:27:39on. I'm wondering.
  • 02:27:44I'm a little torn on this, and I'm wondering if we could delay a
  • 02:27:47final decision on this until the next meeting, if that's
  • 02:27:51acceptable, Shelah?
  • 02:27:55Yes. The other Commissioners are amenable to that? No,
  • 02:27:58if you need more time, I'm fine with that. I'd appreciate that.
  • 02:28:04All right, we'll put a pause on that and defer it to the next open
  • 02:28:06meeting. Okay,
  • 02:28:09moving on I guess, to Item No. 28.
  • 02:28:16Shelah, can you please lay out that memo? Yes,
  • Clip 28 - Application of Energywell Texas, LLC for a Retail Electric Provider Certificate, 56651
    02:28:19ma'am. Item 28 is docket number 56651.
  • 02:28:25the application of Energy well, Texas, LLC,
  • 02:28:28for a retail electric provider certificate. Before you is an appeal
  • 02:28:32of Order No. 2 filed by Energywell. And Commissioner Cobos
  • Clip 28 - Commissioner Cobos lays out here memo, 56651
    02:28:35filed a memo in this docket. All right. Thank you, Shelah. So my memo
  • 02:28:40is just straightforward in respect to.
  • 02:28:43I would recommend that we deny energy wells appeal of order number two,
  • 02:28:48which denies energy wells motion for a good cause,
  • 02:28:52to 16 TAC 25.107(g)1 for the
  • 02:28:55reason set forth in my memo. And those reasons are the fact that after
  • 02:29:00winter Storm Erie, we adopted the rule that
  • 02:29:05put out very straightforward language that said
  • 02:29:09that in no instance, and we went out of our way to add that language
  • 02:29:11in there. And so I think, based on the rule
  • 02:29:15language in this particular circumstance,
  • 02:29:18that we would not be able to grant a good cause exception,
  • 02:29:22and that would result in the denial of
  • 02:29:26energy wells appeal.
  • Clip 28 - Commissioner Glotfelty's thoughts on the memo, 56651
    02:29:30 Madam Chairman, I think I
  • 02:29:33find myself coming down a little bit different place on this. There's only
  • 02:29:37two sides to it. One, either you grant the good cause exception or you don't.
  • 02:29:41One of my questions was,
  • 02:29:45were these rules in 25
  • 02:29:50107 promulgated after or
  • 02:29:54as a result of the legislation that prohibited
  • 02:29:58companies like gritty from forming?
  • 02:30:02That was as a result of Winter Storm Uri and in the incidents that happened
  • 02:30:04with gritty at the time. And I think my heartburn here is just that.
  • 02:30:10We're doing a look back. We're basically saying, no,
  • 02:30:14you can't. Let me just tell you, I talked to a lot of people who
  • 02:30:17were customers of gritty, and they loved gritty up until winter
  • 02:30:21storm Yuri, and a lot of people want it back. That's not going to happen,
  • 02:30:24obviously, because of legislation. The question becomes to
  • 02:30:28me, if you are doing this,
  • 02:30:36if we put the rule in that prohibited
  • 02:30:40anybody from participating as
  • 02:30:43an rep who had been in that spot before we did that after the
  • 02:30:47gritty experience, should we not give that exception
  • 02:30:51to allow these folks in it? This is not, I don't believe, a widespread
  • 02:30:56issue. And I don't know, I just,
  • 02:30:59I sense that we need more competition in the retail electric market,
  • 02:31:03not less. And I just throw that out for discussion
  • 02:31:07of thought. Yeah, I hear what you're saying, Commissioner Glotfelty.
  • 02:31:13After Uri, we took a lot of actions to
  • 02:31:16ensure that we fixed issues that occurred during
  • 02:31:19Yuri. And this was one area that we focused
  • 02:31:22on. And our commission found that, you know,
  • 02:31:26griddy violated some protocols and rules. And that's why ultimately,
  • 02:31:29ultimately, there was language added to that rule
  • 02:31:33that said if you're a rep that has to go through a polar and your
  • 02:31:37standard form agreement at ERCOT gets terminated. That under those specific circumstances,
  • 02:31:43if you're a principal within the last six months to the
  • 02:31:47transition and the specific facts there, that in no instance
  • 02:31:51would you be able to come back into the market. And maybe
  • 02:31:54we. Right now, the rules are written the way it is.
  • 02:31:58And I don't think there's a whole lot
  • 02:32:02of will room, but we can go back and
  • 02:32:05reconsider kind of, you know, now we're past Yuri and
  • 02:32:09think about role amendments in the future that might make sense.
  • 02:32:12But, you know, at that time we
  • 02:32:17went through extraordinary measures to add that specific language
  • 02:32:21to prohibit principals from reps under those
  • 02:32:24specific facts from being able to reenter the market.
  • 02:32:27And I believe ERCOT has taken action on their end
  • 02:32:31with protocols, et cetera, to not allow that
  • 02:32:35sort of, you know, reentering of the market, too. So that's where I came
  • 02:32:39down on it. You know,
  • 02:32:44we put that language in there for a reason. And that's. That's basically
  • 02:32:49where I think that I would go
  • 02:32:52because of the specific language we put in there that added a
  • 02:32:56strict prohibition. Madam Chair?
  • Clip 28 - Barksdale English with clarification on memo, 56651
    02:33:00Yes. If it's okay, I'd like to just provide a quick clarification.
  • 02:33:03And it's not appropriate for me to weigh in on the deliberation,
  • 02:33:07but just as a clarification.
  • 02:33:10Commissioner Glotfelty, you're correct that the wholesale index rule did come about
  • 02:33:14after Winter Storm Uri.
  • 02:33:18The retail electric provider rule 25.107
  • 02:33:23did contain provisions prior to Winter Storm Uri
  • 02:33:26that would prohibit a principal whose rep
  • 02:33:31certificate had been revoked from serving as a
  • 02:33:34principal or a controlling member of a new rep.
  • 02:33:37Following that revocation, the amendments to 25.107
  • 02:33:42did contain some clarifications, or I think staff
  • 02:33:46would call them clarifications about what control means.
  • 02:33:50But the concept that principals whose
  • 02:33:55certificates had been revoked should not come back into the market that
  • 02:33:59existed prior to Winter Storm Uri. Okay, that's helpful. Thank you very much.
  • 02:34:03Okay, any more comments? Is this the first time this rule has
  • 02:34:07been brought before the Commission thus far after Uri?
  • 02:34:11I think so, but I would ask staff if they recall any other instances.
  • 02:34:15I don't believe we've had another set of principles from a company that
  • 02:34:19was subject to those facts. Come back before to try to get a
  • 02:34:23rep certificate with a different rep. I believe thats
  • 02:34:27correct. This is the only such application we've received.
  • 02:34:33Okay. Any more feedback, Mister Jackson?
  • Clip 28 - Motion to deny Energywell's Appeal of Order No. 2, 56651
    02:34:37Okay. With that, I would move
  • 02:34:40to deny Energywell's Appeal of Order No. 2.
  • 02:34:44Second. All in favor? Or
  • 02:34:49do I need to move? Did you move it? Well, I moved to. Yeah,
  • 02:34:52please. It's been a long day. Go for it. I moved that
  • 02:34:56we deny the appeal consistent with your memo, or for the reasoning behind your
  • 02:34:59memo? I second. All right. All in favor, say aye.
  • 02:35:03Aye. All right, none opposed. Motion passes. Thank you.
  • 02:35:16All right, I think that takes us through the end of the contested case docket.
  • 02:35:20Now, we'll now hand the gavel back over to Chairman Gleeson.
  • 02:35:23Thank you, Commissioner Cobos.
  • 02:35:26So that'll take us. So, 30 and 31 were consented.
  • Clip 33 - Chairman Gleeson lays out Project No. 55999
    02:35:30 So I'll take us to Item No. 33.
  • 02:35:33Docket No. 55999, reports of ERCOT.
  • 02:35:37And I believe ERCOT has an update on the RMR
  • 02:35:42MRA. And I think we also have representatives from CPS here as
  • 02:35:46well. If they'd like to come forward, if they have any comments.
  • 02:35:56Good morning or good afternoon, everyone.
  • 02:36:00So, I don't think anything's being asked of us today. This is really
  • 02:36:03just informational to talk about the RMR associated with
  • 02:36:06the Braun egg plants. So, Davita,
  • Clip 33 - Davita Dwyer, ERCOT's Sr. Corporate Counsel on the RMR process & ERCOT workshop, 55999
    02:36:09if you'd like to begin? Davita Dwyer with ERCOT.
  • 02:36:13And with me is Woody Rickerson. And thank
  • 02:36:16you Chairman, Commissioners for the opportunity to come and speak with you
  • 02:36:20all. I'm amending my comments to be a little bit shorter
  • 02:36:23in the interest of time. I'll note that we filed
  • 02:36:27in Project No. 5999. Two updates
  • 02:36:31for you all regarding the RMR process. There are interchange
  • 02:36:35Items 52 and 53, and an issue
  • 02:36:38that we wanted to bring to your attention was a timing issue with respect
  • 02:36:42to potential RMR service by CPS Energy's
  • 02:36:46Braunig Units 1 through 3. CPS Energy gave
  • 02:36:50us advanced notice about their intention to indefinitely suspend
  • 02:36:54these units, which we've appreciated that
  • 02:36:58retirement is proposed to take place on March 31 of
  • 02:37:02next year, which poses a timing issue because we understand
  • 02:37:06that the unit cannot be run after
  • 02:37:09their proposed retirement date unless and until they are inspected
  • 02:37:13and potentially repaired. And ERCOT is
  • 02:37:17proactively planning ahead for next Spring,
  • 02:37:20next Summer and all of the following seasons as well. And we are
  • 02:37:24evaluating whether or not we should
  • 02:37:28contract with CPS Energy to have them take earlier outages
  • 02:37:32before potential RMR service in order to potentially
  • 02:37:36have those units in place if the board determines that they are
  • 02:37:40needed for RMR service, and also give the board better information for
  • 02:37:44at least one of those units when making the decision whether or not to enter
  • 02:37:47into agreements for RMR service, must run alternative service
  • 02:37:51or address this reliability need in other ways.
  • 02:37:55And I'll note that each unit is anticipated to take
  • 02:37:59approximately 60 days, barring unforeseen circumstances,
  • 02:38:03and each unit has to be done separately. So part of the
  • 02:38:06issue is the need to thoughtfully plan
  • 02:38:10for this service. We also highlighted for you all some
  • 02:38:13cost considerations, and CPS Energy provided
  • 02:38:18a letter and attached cost estimates that we attached
  • 02:38:22to our filings to help you all understand some of the important considerations.
  • 02:38:28Davita, you are hosting a workshop this afternoon?
  • 02:38:31Yes, sir. Thank you for raising that. So, we're holding a workshop on the must
  • 02:38:34run alternatives. That's the process in which we are seeking,
  • 02:38:37under the Commission's rule and under the ERCOT protocols. Lower cost alternatives
  • 02:38:41to potentially entering into RMR service with the Braunig units.
  • 02:38:45And hopefully, we get active engagement participation in
  • 02:38:49that as well, to help drive down costs. Yes, sir. We're seeking all
  • 02:38:52sorts of. Of different types of little r resources, including demand
  • 02:38:56response, including other types of entities that are smaller
  • 02:39:00than large generation resources, registered with ERCOT. And we're hopeful to
  • 02:39:04find some lower cost alternatives.
  • Clip 33 - Carolyn Shellman, Law Firm of Enoch Kever, Lawyer for CPS Energy concerning RMRs, 55999
    02:39:10 Good afternoon. My name is Carolyn Shellman. I'm a lawyer
  • 02:39:14with the law firm of Enoch Kever and I'm here today representing
  • 02:39:17CPS Energy. And I have Gabriel Garcia here with
  • 02:39:21me, who's Regulatory Counsel for CPS.
  • 02:39:24And my law partner, Andy Kever is here. And we have
  • 02:39:28several of the CPS Energy executives
  • 02:39:32who've been working on this project with Davita
  • 02:39:36and the ERCOT team. To try to figure out whether there's a way that these
  • 02:39:39units, if called upon could be available.
  • 02:39:43So, I don't want to repeat the what Davita has said. But I want to
  • 02:39:46make sure that the Commission is aware that CPS Energy is
  • 02:39:50here, ready to support ERCOT if
  • 02:39:54it's determined to be necessary and there's a feasible way to do it.
  • 02:39:58The units that she has described, the three
  • 02:40:01Braunig units, have been part of a
  • 02:40:05long, broad, long term plan that CPS Energy has.
  • 02:40:09They are aging fossils units. The decision was made
  • 02:40:13over a period of time to retire them next
  • 02:40:17year at the end of March. And so they made an announcement of
  • 02:40:20that and notified ERCOT with plenty
  • 02:40:24of time, knowing that it's a lot of capacity to retire.
  • 02:40:27This is a total of 859 mw.
  • 02:40:31These are old plants, 50 plus years old, and gas
  • 02:40:35fired projects that CPS no
  • 02:40:39longer needs, but does plan
  • 02:40:43to run them until their planned retirement date in
  • 02:40:46March. And so that's what we have worked with ERCOT on,
  • 02:40:50how this could be done. And we commit that. We will be prepared
  • 02:40:54to coordinate with ERCOT as
  • 02:40:58needed if the plants are selected for an RMR contract.
  • 02:41:02But what I want you to understand is that CPS has been
  • 02:41:06done everything that's necessary to keep these plants running safely
  • 02:41:10and reliably. But we have not undertaken
  • 02:41:14the major repairs that you would do if you
  • 02:41:17were going to extend the plant life beyond that
  • 02:41:21planned retirement date. So our engineers,
  • 02:41:24I think, are very comfortable that the plants can continue to
  • 02:41:28run through the time plan to operate them. But prudence dictates
  • 02:41:32that if we're going to commit to run them after that,
  • 02:41:36and not just prudence, just engineering practice, it dictates that
  • 02:41:40we would need to inspect those units. And that's a big process, opening up
  • 02:41:44each of the three units separately, inspecting them, doing whatever
  • 02:41:48maintenance is necessary, and making decisions about major
  • 02:41:52repairs that would need to be done. So that is what we
  • 02:41:56have tried to estimate and
  • 02:41:59explain to ERCOT all the details of that.
  • 02:42:02And I know that there's information that they are sharing with you so that
  • 02:42:06you can understand what we believe our best estimate
  • 02:42:10is of what's going to need to be done and the
  • 02:42:13cost that would be involved in doing that. And so we, Gabriel and I,
  • 02:42:17are prepared to answer questions if you have them. And if we need to,
  • 02:42:20we'll call. Call on our folks who can get down in the weeds on it.
  • Clip 33 - Chairman Gleeson's question concerning notice of suspension of operations, 55999
    02:42:23 Do you know when you all provided ERCOT with a notice of suspension of operations?
  • 02:42:28Yes. March. Gabriel knows.
  • 02:42:35Was it March of this year? It was
  • 02:42:38a year prior to even the requirement, is that right?
  • 02:42:42March 13 of this year.
  • 02:42:46So you said, you know, you stopped doing kind of the big maintenance
  • 02:42:50that you would do if you were going to keep this going. How far in
  • 02:42:53advance of that notice of suspension of operations did you stop doing the required
  • 02:42:56maintenance on these units?
  • 02:43:02I think, I wouldn't describe it that way and subject to
  • 02:43:05being corrected by my counsel here, but I think
  • 02:43:09that what we have done is all the necessary planned
  • 02:43:14work that you would do to keep plants running. We have
  • 02:43:19since looked at some life extension studies to
  • 02:43:23see what it would take to extend them longer.
  • 02:43:26But I think that this has been part of a plan to close
  • 02:43:30those plants over several years,
  • 02:43:33but nothing has happened that would
  • 02:43:37decrease their reliability and safety. Up till now,
  • 02:43:41we just haven't done any major life extension.
  • 02:43:44I would add that five years ago, we did
  • 02:43:48an investment to extend their lives for five years through March
  • 02:43:52of next year, hence their retirement date
  • 02:43:56of March 31, 2025. Okay.
  • 02:44:00Well, Commissioner Jackson, I think really what we're talking about here is risk
  • 02:44:03mitigation. I know you're big on identifying and mitigating risks.
  • 02:44:08One thing I think I would also say is, depending on how
  • 02:44:12the MRA process goes,
  • 02:44:15it may be worth looking at having staff work with ERCOT to look
  • 02:44:18to see if there can be improvements to this process
  • 02:44:22to provide low cost alternatives. I think we're going to see, with our
  • 02:44:26aging fleet, our dispatchable fleet, we're going to continue to see
  • 02:44:30notice of suspension of operations. And so I think that probably deserves a look
  • 02:44:34at what that process is and see if there can be any improvements.
  • Clip 33 - Commissioner Jackson's question on management of risk, 55999
    02:44:39 And I guess, just from a management of risk standpoint and
  • 02:44:43looking at all the alternatives, one of the things that I
  • 02:44:47think ERCOT is thinking about is, you know, going in
  • 02:44:50and doing an early look see, maybe trying to see if there's an opportunity to
  • 02:44:53take it down in the Fall so that at least we have a better idea
  • 02:44:57prior to, you know, getting into,
  • 02:45:01you know, the Summer months or the next Winter, and possibly
  • 02:45:06considering taking it down in the Fall. And as you noted,
  • 02:45:09it would take 60 days, and the strategy would
  • 02:45:12be to look at the newest unit first, which would be unit number
  • 02:45:16three. The largest unit. The newest, yeah, exactly.
  • 02:45:19412. You know, one of the questions
  • 02:45:22I had was, you know, knowing kind of like the
  • 02:45:26history that you've laid out in terms of the maintenance, the fact that
  • 02:45:30you didn't do the life extension repairs five years ago,
  • 02:45:33you probably, you know, have somewhat of an idea of what you're going
  • 02:45:37to go in and find, whether you would do the look see
  • 02:45:40early in the Fall or whether you would wait and do it, you know,
  • 02:45:43closer, you know, or after the March 31 time
  • 02:45:47frame. But is there a way to go in and,
  • 02:45:50you know, not necessarily take the whole 60 days,
  • 02:45:54but do like a cursory view, particularly if you're
  • 02:45:57going to find something major to help you make that decision
  • 02:46:01quickly, because I guess the option would be, you go in, you take a look,
  • 02:46:05you say, okay, this is major. This is x number of dollars. You weigh that
  • 02:46:08cost versus the benefit, and you'd say, you know, that's probably not
  • 02:46:12the option we want to take, going to look at going down a different path.
  • 02:46:15But that might give you an opportunity to make the decision quicker, get back
  • 02:46:19online and still have it available until the
  • 02:46:23end of the commissioning date, which would be March 31.
  • 02:46:27I think we would meet the assistance of one
  • 02:46:30of our experts to answer that question in
  • 02:46:34an accurate manner today. But, I mean, I think that that might be something we
  • 02:46:38should. We can certainly provide that information.
  • 02:46:41And I know that ERCOT is,
  • 02:46:44you know, is looking at this as well, and looking at
  • 02:46:47it from the standpoint of, you know, come March 31,
  • 02:46:51you know, we've had the option. We either make the investment or March 31,
  • 02:46:54we have to do something else. Oh, I'm sorry.
  • 02:46:58Aren't there some opportunity, you know, what is the benefit of getting an early
  • 02:47:02look at what we're dealing with and then having more
  • 02:47:05time to do some of the things that you talked about with having,
  • 02:47:09you know, alternative sources again to
  • 02:47:14meet a pretty significant shortfall in dispatchable?
  • 02:47:17Yes, I agree with Gabriel. I think exactly
  • 02:47:21what we could do when we opened them up and whether we could do just
  • 02:47:24a little bit is something that we'd need somebody else to
  • 02:47:28speak to. But I would, you know, one of the things that I think CPS
  • 02:47:31is concerned about is that in order to get this done
  • 02:47:35in the fall and not wait until next April,
  • 02:47:40contracts would need to be, the contractor would need to be
  • 02:47:45procured. And there is a cost in getting everything ready
  • 02:47:48and getting the crane there and getting. Opening it up. So there are
  • 02:47:52probably significant expenses just in doing that.
  • 02:47:56But I do nothing. I can't answer whether you
  • 02:47:59could get in and just look at it a little bit and we will explore
  • 02:48:03that, make a quick decision, you know?
  • 02:48:06Yeah. Yeah. It sounded
  • 02:48:09like it was up to 60 days. So you might be able to
  • 02:48:13go in there after the plan is open and have a really good
  • 02:48:17idea. Yes. Earlier than 60 days. Because I think
  • 02:48:20that the concern I have is the, you know, obviously it's
  • 02:48:24going to be expensive. Expensive. Right. Just to even open up the plant and go
  • 02:48:28in there. But also the lost opportunity costs
  • 02:48:31that we're having, you know, the repairs, the loads are having to
  • 02:48:35pay for the plant being down. I understand it's a
  • 02:48:39necessary part of this whole evaluation because of the.
  • 02:48:43For safety reasons, but ensuring that we
  • 02:48:47minimize that if we can.
  • 02:48:51If there's an opportunity to get in there and get it done in 30 days,
  • 02:48:54if there is. Right. We don't want to rush through something like that, but if
  • 02:48:57there is, and also to make sure that
  • 02:49:00the lost opportunity cost is
  • 02:49:04calculated in a manner that everybody feels comfortable
  • 02:49:09with, the amount of money that would be paid for that. Yes. So we
  • 02:49:15understand that. Certainly agree.
  • Clip 33 - Commissoner Hjaltman's question on outages, 55999
    02:49:18 Have the outages you've taken in the past five years that you've come
  • 02:49:21up with the plan differed? Have you stopped taking as
  • 02:49:24many outages because you thought you were going to not be
  • 02:49:28using these plants anymore so that we would be expecting to see more damage to
  • 02:49:31the plants coming forth? I don't think that would be the case.
  • 02:49:34From my understanding of it, I think that we
  • 02:49:37have done all the maintenance that would be usual and planned
  • 02:49:42in order to keep those plants running in accordance
  • 02:49:46with the five year extension. And, you know, if you
  • 02:49:49go in and find out you have to replace rotor blades and a
  • 02:49:53lot of tubing in a plant, we wouldn't be opening up to
  • 02:49:57do that. But, yes, I think we have done the safety of those plants,
  • 02:50:01both for the operational necessity and just the employees that work.
  • 02:50:05There is something that CPS pays a lot of attention to. So I'm
  • 02:50:09sure that what has been done has been prudent and necessary all
  • 02:50:13along. I would add that of the three plants,
  • 02:50:16unit three is the one that runs the most.
  • 02:50:21We've had problems, you know, with unplanned
  • 02:50:24outages because of the age
  • 02:50:28of the units, you know, which is to be expected,
  • 02:50:31so. But unit number three is the one that is
  • 02:50:35utilized the most of the three units, and it's the
  • 02:50:39largest.
  • 02:50:45Do you know anybody who has some mobile generation for
  • 02:50:48lease?
  • 02:50:52I say that in jest, but I don't know, maybe it's.
  • 02:50:57We can introduce you to Jason Ryan behind you.
  • 02:51:01Woody, I have a question for you on this. And that is this.
  • 02:51:06The total cost of this RMR package, including the
  • 02:51:10future or the potential maintenance, is like $150
  • Clip 33 - Woody Rickerson, ERCOT's SVP & COO on RMR analysis, 55999
    02:51:15million, is that right? Yes. That's Woody
  • 02:51:18Rickerson with ERCOT. Yeah, that was the estimate,
  • 02:51:22roughly.
  • 02:51:25That's hard. I mean, this is one of those hard decisions that
  • 02:51:29we got to make for the good of the system or, you know, to spend,
  • 02:51:33you know, that much money on old plants. It's not easy.
  • 02:51:38I just wonder, you know,
  • 02:51:41I know this
  • 02:51:45is a transmission issue. We've had these discussions. The question becomes,
  • 02:51:49how does the system look
  • 02:51:53today and over the next twelve months,
  • 02:51:57with the addition of more solar and more batteries on the north
  • 02:52:00side of the constraint? Are these,
  • 02:52:04does any of this transmission
  • 02:52:08issue get solved as a result of that, or does
  • 02:52:12it continue to fester?
  • 02:52:15Yeah. So the analysis we used took into account all
  • 02:52:19known new resources that were coming online. So if something's coming
  • 02:52:23online next Summer, it's already in the interconnection queue. That has already
  • 02:52:26been factored in into the RMR analysis.
  • 02:52:29Even with those factored in, we still show IROL
  • 02:52:35overloads on that Pawnee to spruce line. So there
  • 02:52:41could be new generation show up that we haven't
  • 02:52:44accounted for. And you don't know what. You don't know yet,
  • 02:52:48but that could happen. And anything north would help.
  • 02:52:53A new big data center north of the constraint would
  • 02:52:56hurt. And those can come online just about as fast as
  • 02:53:00the new generation. So additional
  • 02:53:05resources in the south will make the problem worse.
  • 02:53:10And the IROL is.
  • 02:53:14I don't claim to know a whole lot about that. But is
  • 02:53:18that like, when that is designated?
  • 02:53:22Right. So it's basically a,
  • 02:53:25it's basically a line that if you let it overload
  • 02:53:29and the contingency were to happen, it would result in cascading
  • 02:53:33outages. So you have to avoid the cascading outages so
  • 02:53:37you don't let the line overload.
  • 02:53:41Right. Obviously, we don't want cascading outages,
  • 02:53:45nor do we want an overload on that line, according to, according to ERCOT.
  • 02:53:49I guess the question, I just, maybe I should
  • 02:53:54just table this and talk a little bit more with you about it later
  • 02:53:59on this week. I guess we're not going to finalize anything today.
  • 02:54:02No. I think this is going to come up at the ERCOT board meeting next
  • 02:54:05week. And then I think you all indicated you may
  • 02:54:08need to take the fall outage. You may need some exceptions
  • 02:54:13to your own, your rules, some of what we've done in the past. So that
  • 02:54:16I think might come up at the August 29 open meeting. So we'll have other
  • 02:54:19opportunities to talk about this as well. So I'll reserve everything else for you.
  • Clip 33 - Gabriel Garcia, CPS Energy's Regulatory Counsel on costs, 55999
    02:54:22 Commissioner Glotfelty, I'd like to provide a little more context. Gabriel Garcia, for CPS
  • 02:54:26Energy, regarding cost. With regards
  • 02:54:30to what we call the pre RMR cost, which are
  • 02:54:33taking these outages in order to inspect them, we estimate
  • 02:54:37those costs to be about 22
  • 02:54:41million for unit three,
  • 02:54:45about 15.8 for unit
  • 02:54:48two, and 17.3 million for unit one.
  • 02:54:52And that would, that includes the outage opportunity
  • 02:54:56cost and also some repairs to
  • 02:55:00extend the life of the unit. So the
  • 02:55:04larger number that Woody referred to are
  • 02:55:08the best estimates right now, which clearly are,
  • 02:55:12without doing an inspection for,
  • 02:55:16you know, for entering into an RMR contract. But the pre
  • 02:55:20RMR outage inspections are the numbers
  • 02:55:24that I, that's, that's our best estimate of what those costs would be.
  • 02:55:28Thank you. But you would only take one unit at a time and your
  • 02:55:32thoughts take the newest one and the largest one first.
  • 02:55:36Correct. So if the one
  • 02:55:41idea would be to do one unit, unit three this fall,
  • 02:55:47and we may or may not do others after
  • 02:55:51March or sometime into next year, but just
  • 02:55:54want to give you an idea of, those are our best
  • 02:55:57estimates right now. Of course, once you open them up for inspection,
  • 02:56:02then we'll have a much better idea as to what
  • 02:56:07the repairs would cost and also how
  • 02:56:10long it would take to conduct those repairs.
  • 02:56:17I mean like Chairman Gleeson, I would really encourage
  • 02:56:20you all to, and resources out there. To take
  • 02:56:24advantage of the MRA process. I know you all are having a workshop this afternoon.
  • 02:56:28I don't know how many resources you all ultimately get. And I think
  • 02:56:32that looking for ways to help mitigate costs
  • 02:56:35is really important. The MRA is one. One avenue on
  • 02:56:39doing that. The other one is,
  • 02:56:42and this may be more of a question for you, Woody and
  • 02:56:45David. So CPS has provided
  • 02:56:48their lost opportunity costs based on their calculation.
  • 02:56:54Are you all in agreement, or are you all looking for ways to
  • 02:56:59further explore how lost opportunities should be caught
  • 02:57:03calculated? We're still working on understanding
  • 02:57:08the assumptions that were made and what elements
  • 02:57:12of those assumptions might be things that would be subject to true
  • 02:57:16up after the fact versus what are things that are essentially unknown.
  • 02:57:21And we're talking with CPS about their calculations
  • 02:57:25because obviously that's an important component of this. Yeah,
  • 02:57:28I think that that's really important to look
  • 02:57:31at that specific cost component like you described.
  • 02:57:35Maybe some kind of an ex post review or a clawback provision
  • 02:57:40evaluating the capacity factors of the plants,
  • 02:57:43just to make sure that we're not, you know,
  • 02:57:46want to be fair here in terms of opportunity costs, because you're taking the plan
  • 02:57:50out, but we also have to be cognizant of, you know,
  • 02:57:53the load cost as well. So I encourage you all to
  • 02:57:56continue to work on a process that makes
  • 02:58:00sense on addressing both issues. I'll note that's consistent with the RMR
  • 02:58:04construct. For example, it includes estimates of
  • 02:58:07what the costs of repairs would be after the fact.
  • 02:58:11We would know what the actual costs were, and those could be trued up.
  • 02:58:15All right, thank you.
  • 02:58:19Hey, Woody, can I ask you one other question? When you all do the
  • 02:58:23IROL limit, is it based upon certain.
  • 02:58:27Does it look at 8760 hours of the year? Or is it just
  • 02:58:31like, between certain times when there's the likelihood that that line
  • 02:58:35could trip and then create a
  • 02:58:38cascading outage? So,
  • 02:58:41first of all, we're calculating it in real time, obviously, right?
  • 02:58:45So we're controlling to a real time limit,
  • 02:58:48but when we do the analysis, it's an 8760 type analysis. So we're looking
  • 02:58:52at. We're doing it a summer. It's going to have a summer rating, a winter
  • 02:58:55rating, that kind of thing. Okay,
  • 02:58:58thanks. Okay,
  • 02:59:01thanks, y'all. Thanks for being here. Thank you very much.
  • Clip 35 - Chairman Gleeson lays out Project No. 54584
    02:59:07So I don't have anything on 34. So that will bring us to 35.
  • 02:59:11That's Project No. 54584, reliability standard for the ERCOT
  • 02:59:15market. Werner and Chris. Werner,
  • 02:59:19I want to thank you for following a memo that elicited no calls from any
  • 02:59:22market participants to my office.
  • 02:59:25Very much appreciated.
  • Clip 35 - Commission Staff's Werner Roth on changes to final rule and memo, 54584
    02:59:33Yeah. Werner Roth for Commission Staff. And I'm sure all of
  • 02:59:37you received plenty of phone numbers, calls. I know our leadership on staff side received
  • 02:59:40phone calls on this, and I received a couple myself. So,
  • 02:59:43yes. Anyway, so what about the commission staff? So,
  • 02:59:47ahead of filing the proposal for adoption that will be up for approval at the
  • 02:59:50August 29 open meeting, staff has identified several key issues
  • 02:59:54that were raised in the comments. Responding to the approved proposal
  • 02:59:57for publication, staff member provides a brief summary on each of
  • 03:00:00these issues or initial recommendations, and today we seek guidance
  • 03:00:04from the Commission for any direction as we work to incorporate the necessary changes
  • 03:00:07into the final rule. So the first one
  • 03:00:11in the topic that prompted most of the phone calls, I would imagine, was the
  • 03:00:15application of the reliability standard. As there's always been
  • 03:00:18on this topic, there was a split within the comments, with some parties advocating
  • 03:00:22for the standard to be a target and serve as the report card of the
  • 03:00:25health of the market, and other parties stating that the standard should be boarding that
  • 03:00:28requiring action when the ERCOT region is deficient of meeting the reliability standard.
  • 03:00:33But more than anything, commenters were insisting that the commission needed to provide clarity
  • 03:00:37on how this standard would be applied in the PFP.
  • 03:00:40The current language requires that ERCOT performs its assessment every two year or
  • 03:00:44every five years, and if it finds that the region is deficient at
  • 03:00:48the reliability standard, they would provide recommendations to the Commission on actions that would alleviate
  • 03:00:52this deficiency. However, within the rule, while the
  • 03:00:55commission would be expected to review the assessment, the rule language does
  • 03:00:59not require the Commission to take any specific action on these recommendations.
  • 03:01:02And that was done intentionally. In staff's view, requiring the
  • 03:01:06commission to take immediate action on the results of the assessment absent
  • 03:01:09allowing for the Commission to consider potential cost implications and review
  • 03:01:13alternatives, including non generation alternatives, is not consistent with the requirements
  • 03:01:17to balance reliability and costs.
  • 03:01:21And I'm happy to go through the others if you want? Yeah. Why don't
  • 03:01:24you lay out the whole memo and then we can go back. Perfect. Okay.
  • 03:01:27So, second, there were requests around establishing the standard
  • 03:01:31through either expected unserved energy or normalized expected unserved
  • 03:01:35energy, EUE or MEUE. The positions of
  • 03:01:38these commoners included that an EUE metric alone effectively captures
  • 03:01:42all of the three metrics, frequency, duration and the magnitude
  • 03:01:45of events, and that using the newly updated estimates for cone and volume would
  • 03:01:50allow for an EUE standard to be set at the economically optimal value.
  • 03:01:54Staff continues to recommend the three metric reliability standard that has been reviewed through
  • 03:01:58the ERCOT process for the last year. Having individual metrics for each
  • 03:02:02of the three criteria provides a clear policy objective that can be understood by
  • 03:02:06the broader public. Like the rest of the industry, we aim to
  • 03:02:09avoid loss load events, the frequency one in ten standard, but on top
  • 03:02:13of that, we are putting additional emphasis on avoiding long duration and high magnitude
  • 03:02:16events well. Additionally, staff continues to oppose
  • 03:02:20establishing a reliability standard where it would be possible for the target to be
  • 03:02:23less reliable than the industry one in ten standard, and basing the standard solely
  • 03:02:27on the economically optimal amount of EUE would result in
  • 03:02:31that happening. Third, the PFP
  • 03:02:34included a question about whether the explicit exceedance tolerances
  • 03:02:38should be enshrined in the rule. Again, commenters were split on this,
  • 03:02:41with some preferring clarity around the defined risk thresholds and others
  • 03:02:45wanting the flexibility in evaluating future assessments.
  • 03:02:49Ultimately, staff believes that there is value in continuing to have the exceedance
  • 03:02:52tolerances of the tried in the rule. The tolerance provide a clear policy goal
  • 03:02:56to limit how frequently high magnitude and high duration events are
  • 03:03:00expected to occur. And because they are in the rule, they would be set by
  • 03:03:04the Commission and would require a formal rulemaking with input from public comments to change.
  • 03:03:09Fourth was the allowance for public comments. While the commission
  • 03:03:12always has the ability to allow windows for comments,
  • 03:03:16several parties pointed out there wasn't anything explicitly in here. Staff agrees that
  • 03:03:19that probably should be enshrined, and so we've recommended 230 day
  • 03:03:23comment windows. One after ERCOT provides the list of assumptions that would
  • 03:03:26go into the assessment that they perform, and then a 30 day comment window
  • 03:03:30after ERCOT has provided the results and recommendations to allow for public comments
  • 03:03:34on the results as well. Fifth was
  • 03:03:38the frequency of the review of the assessment. Again, not much to talk about here.
  • 03:03:42We originally proposed five years aligning with the what's already in our
  • 03:03:45rules requiring the system wide offer cap programs
  • 03:03:48to be reviewed every five years beginning in 2026. Because system wide offer caps
  • 03:03:52could be something that could be changed to meet the
  • 03:03:56or beat the reliability standard, most commenters expressed concern that this
  • 03:03:59was too infrequent, and staff agrees and we are proposing
  • 03:04:03to modify this to a review every two years, as we believe this
  • 03:04:06would provide a sufficient snapshot of the resource adequacy picture while
  • 03:04:10not overburdening ERCOT or Commission Staff with an annual review as was requested
  • 03:04:14by some parties. All right, just two more.
  • 03:04:18All right. 6th there were concerns around the magnitude metric.
  • 03:04:21Some of these concerns included a lack of clarity and transparency on how
  • 03:04:24the sum value was determined and how this metric was the most
  • 03:04:28sensitive to the modeling assumptions, where a few extreme hours could drive high
  • 03:04:32cost outcomes. Staff acknowledges the concerns around the
  • 03:04:35volatility and the sensitivity to the modeling assumptions, and we've proposed relaxing the
  • 03:04:39exceedance tolerance on the magnitude metric from the original 0.25
  • 03:04:43proposed in the PFP to 1%. We believe this strikes a more
  • 03:04:46fair balance between the continuing to express the importance of planning to
  • 03:04:50avoid these really high impact events while avoiding expensive
  • 03:04:53outcomes driven by modeling assumptions. Staff also recommends
  • 03:04:57adding a requirement for ERCOT to file an updated megawatt value
  • 03:05:01for the amount of load shed that can be safely and effectively rotated, which would
  • 03:05:04set this magnitude metric at least annually. And then prior to
  • 03:05:072026, the first assessment, we're encouraging ERCOT
  • 03:05:11to work with the transmission operators and other stakeholders to memorialize the
  • 03:05:14detail on how this number is calculated to provide better clarity and transparency
  • 03:05:18within this protocols or wherever else is appropriate. And then lastly,
  • 03:05:23but certainly not least, there were concerns around balancing
  • 03:05:26reliability cost. And I admit this was an oversight on my part.
  • 03:05:30The PFP did not include an explicit requirement for including costs
  • 03:05:33estimates in the results of the assessment. So to address
  • 03:05:37this, we will be adding a requirement to the rule for ERCOT to include
  • 03:05:41their estimate of the cost to comply with the reliability standard.
  • 03:05:44And because we will allow public comments on the results of the assessment and recommendations,
  • 03:05:48there will be an opportunity for parties to provide alternative estimates of the costs
  • 03:05:52if they disagree with their cost methodology. So that summarizes the
  • 03:05:55current staff recommendations on those issues. Again, no formal action is
  • 03:05:59going to be needed today, but I'll be diligently taking
  • 03:06:02notes during this discussion, and I'm happy to answer any questions. Thank you for
  • 03:06:05that layout. Commissioners. Questions, comments?
  • Clip 35 - Commissioners thoughts and questions on memo, 54584
    03:06:11 I have a couple. Just appreciate
  • 03:06:14the hard work. You know, these things since Winter Storm Uri
  • 03:06:19are confusing, commingled. A lot
  • 03:06:22of them work together and I appreciate all the staff.
  • 03:06:27Just two things. One of them is, I'm totally supportive of the target.
  • 03:06:31I think tying our hands on what the levers we change
  • 03:06:35to add capacity or to understand how
  • 03:06:41we address market mechanisms to add generation
  • 03:06:45should be left up to us, not totally triggered
  • 03:06:48by this standard. So I'm totally supportive of the target.
  • 03:06:52And then the other one is on EUE. I continue
  • 03:06:55to look at things at NERC. NERC is moving
  • 03:06:59away from one in ten. They say that one
  • 03:07:03in ten does not create a reliable system.
  • 03:07:06Let's move to the next metric. So all
  • 03:07:10I would. I'm not trying to move away from the three legged stool that has
  • 03:07:14been created. All I'm trying to do is see if we can, when we talk
  • 03:07:18about that standard we can add an EUE number with it,
  • 03:07:21since it's just math from. It's a mathematical equation
  • 03:07:25from the three legged stool. So we can calculate the EUE
  • 03:07:29as well. Yes, that was included in the PFP
  • 03:07:32language originally, where EUE would be a reported result from the assessment
  • 03:07:36for each of the system configurations they're looking at. So, yes, we will absolutely make
  • 03:07:39sure that is included.
  • 03:07:42Since we referenced the word target, I really think. Can you
  • 03:07:46give some definition to what that would look like if we
  • 03:07:50were to run and adopt this target,
  • 03:07:54which we already have, sort of a target set? So how is that different than
  • 03:07:57what we're doing now? What happens if we find that that target is not
  • 03:08:01being met? What will the commission then do? Game plan that out is what
  • 03:08:05that looks like. So the difference between what
  • 03:08:09we do now and what this would do is that it would effectively require
  • 03:08:13a review every two years. And ERCOT. Report back to us.
  • 03:08:16Okay, this is like. This is the current health of the market. This is what
  • 03:08:19the resource adequacy picture looks like now. This is what we expected it like in
  • 03:08:22three years that is currently absent from the process here.
  • 03:08:26So we do have the CDR and we do have the SARA reports.
  • 03:08:29We do have certain documents that do come over here every so often. But this
  • 03:08:32is a targeted report on this, just showing. Do you meet this reliability standard,
  • 03:08:36yes or no? If no, ERCOT would
  • 03:08:39be required to provide recommendations. It could be moving levers on
  • 03:08:44different ancillary service products, increasing volume. I mean, there's. I'm not.
  • 03:08:47I can't give an entire list of all the possible solutions, but essentially
  • 03:08:51providing the commission with possible ways to address that deficiency,
  • 03:08:56the commission would consider that they could decide,
  • 03:09:00okay, we like that solution, that we can move forward with that. If we
  • 03:09:03look at the solutions, the costs associated with all of them to address a small
  • 03:09:07shortfall is billions of dollars. It might say, okay, that's not reasonable.
  • 03:09:11We can defer it a couple of years to the next and see if
  • 03:09:14the issue persists and address it. Then.
  • 03:09:17There's. We're trying to provide some flexibility in how the
  • 03:09:21commission would address these deficiencies without tying the commission's hands on how they would
  • 03:09:24necessarily resolve it. I think that's appreciated. I'm just wondering if
  • 03:09:28there's word different than target we might be able to
  • 03:09:32identify, get out Arthasaurus
  • 03:09:36and see if there's something different. So I.
  • 03:09:39I'm fairly certain we did not put the words target or mandatory or anything like
  • 03:09:43that in the rules. We just had the request and the,
  • 03:09:46when we had got the comments on the PFP and we wanted
  • 03:09:50clarity on the staff position on what this currently is. I mean, we would not
  • 03:09:53put target anywhere in the rule and there's no plan to do so at
  • 03:09:56this time. And I think everyone I talked to agreed for
  • 03:10:0095% of this process until if
  • 03:10:04the analysis shows that we are short generation,
  • 03:10:07I think there's one camp that believes that we get
  • 03:10:11those options and then we decide if
  • 03:10:15through a cost benefit analysis or whatever, whether or
  • 03:10:18not we want to do anything. I think there's another side that believes if
  • 03:10:22the equation doesn't work out and we are short generation,
  • 03:10:26this rule needs to say we will take action and we will
  • 03:10:30make the math, math. And if we're 3000 mw short,
  • 03:10:33will find a way to incent the building of those 3000 mw.
  • 03:10:37So I think, you know, I don't know what y'all's calls were like, but that's
  • 03:10:41basically the gist of where I think a lot of this,
  • 03:10:43again, the way you just talked about that, that's building of
  • 03:10:47capacity. And as we move towards what ERCOT has
  • 03:10:50said, as we're moving towards an energy based system,
  • 03:10:53that adding that capacity is not always the
  • 03:10:57way. We've seen that one in ten. It hasn't worked in TVA
  • 03:11:01and PJM. Last winter, I think during winter Storm
  • 03:11:05Yuri, we were probably well over a one in ten standard.
  • 03:11:08So I'm with you on that.
  • 03:11:11I feel like we should have the discretion to figure out what the tools are
  • 03:11:15that we utilize. Besides,
  • 03:11:18ORDC is already in there as a mechanism that can
  • 03:11:22help solve this issue. And, you know, Dr.
  • 03:11:25And others that will be coming in the future if we don't even know what
  • 03:11:28tools we have yet, what they look like,
  • 03:11:31I'd say keep the target until we know what the toolbox looks like.
  • 03:11:35Chairman, excuse me, please. Yeah,
  • 03:11:38so I agree with Commissioner Glotfelty that we should
  • 03:11:42also use the EUE as a metric,
  • 03:11:46not surpassing the three legged stool, as he called it,
  • 03:11:50with duration and magnitude. But EUE is important. I think
  • 03:11:53other markets are looking at it. SPP looks
  • 03:11:57at expected unserved energy, normalized expected unserved
  • 03:12:01energy might be a little bit better of a metric, just so that
  • 03:12:05we know what EUE is as the system load changes.
  • 03:12:09So I think it is a helpful additional perspective on the
  • 03:12:13reliability standard with respect to Chairman
  • 03:12:17Gleason's comments about,
  • 03:12:20you know, what are the two camps saying and some of
  • 03:12:24the questions from the other two commissioners.
  • 03:12:29It's complicated, right. Because if you're deficient.
  • 03:12:33And we're required to go out there
  • 03:12:37and move around ancillaries or the ORDC,
  • 03:12:40or the ancillary service demand. I mean,
  • 03:12:44we could go do that. And we've done that, right? We've made
  • 03:12:48changes to the LRDC to try to incent investment in
  • 03:12:52generation. We added a new ancillary
  • 03:12:55service, ecrs, that's put, you know, additional money
  • 03:12:58in the market. We're going to have drs,
  • 03:13:01obviously, real time popularization. But the fact of the matter is that
  • 03:13:06even if we go make these adjustments to whatever
  • 03:13:10existing market mechanism we have in the market, currently in our energy
  • 03:13:13only market, and we add more revenue, that does not
  • 03:13:17necessarily mean we're going to get more capacity.
  • 03:13:20And I know that the answer is, well, in that case, you want a regulated
  • 03:13:25market, but not even in a regulated market can we force capacity
  • 03:13:29to be built. So I guess that's the part where
  • 03:13:32it's like, and I appreciate your statement. Your statements is like, we can't tie our
  • 03:13:36hands because we often do go
  • 03:13:39in and make changes and all the changes have
  • 03:13:43some kind of consequence, right? So we start turning the ancillary
  • 03:13:46service market into a capacity market because all of a sudden we're deficient 2000.
  • 03:13:50We're just going to start buying more ancillaries and removing more
  • 03:13:54megawatts out of the market. Then the real time energy prices
  • 03:13:58will increase. There's just, there's a lot, a lot there.
  • 03:14:01If you just turn to the ancillaries ORDC,
  • 03:14:07we've done a lot to the ORDC in the last several years. And the ancillary
  • 03:14:11service demand curves, they're still in flight right now. So I'm
  • 03:14:15not real sure and open to hearing about
  • 03:14:18what some of those changes could be or
  • 03:14:23how it could be implemented in a way that makes sense.
  • 03:14:26But I come at it from the perspective of like,
  • 03:14:30I don't want to tie our hands in a process either.
  • 03:14:36And, you know, tie our hands, tie future
  • 03:14:39commission's hands. And we need to remain cognizant
  • 03:14:43of the fact that it's tough in this,
  • 03:14:46you know, in a capacity market. You know, and I've
  • 03:14:51covered MISO and SPP, different versions of capacity markets
  • 03:14:55than PJM. If you're wanting to try
  • 03:14:59to create an opportunity to get more capacity built, well,
  • 03:15:02then you go and increase
  • 03:15:06or add planning reserve margin requirements,
  • 03:15:08or create a demand curve like the reliability
  • 03:15:12demand base curve. We have what we have in our market with
  • 03:15:15more tools to come. But it's just, I don't
  • 03:15:19know that we can be in a position where we're just constantly turning levers
  • 03:15:23with the existing tools and expecting to get that deficiency
  • 03:15:27because it is a competitive market and we can't,
  • 03:15:31even if we put more money in the market, that doesn't necessarily mean we're just
  • 03:15:34going to get more power generation. It doesn't always equal
  • 03:15:38that. So, anyway, just some comments.
  • 03:15:44So, you know, for me, it's a process, and I look at it from
  • 03:15:47a process standpoint. And, you know, our starting point,
  • 03:15:51you know, further to your question, you know, about what's changed and what's
  • 03:15:54different is, you know, the standard that we are developing,
  • 03:15:59you know, is 3d. It's much more robust with
  • 03:16:02the intent of not having the big fluctuations
  • 03:16:06that we saw in the past, the scarcity market, something that is,
  • 03:16:09you know, is more stable.
  • 03:16:13So our starting place is better. You know, the staff putting
  • 03:16:16the two year timeframe in, which provides that
  • 03:16:21appropriate amount of time to gather a data set that
  • 03:16:24is representative and something that we feel confident that we can look at
  • 03:16:28and get a good timeframe and a good representative
  • 03:16:32sample, if you will. And then, of course, the ERCOT
  • 03:16:38then would go and publish the
  • 03:16:42proposed modeling assumptions, but then the staff
  • 03:16:46interjecting the next step, which is providing
  • 03:16:50the opportunity for the market participants to come in and have
  • 03:16:55input over those modeling assumptions, which impacts the
  • 03:16:59final outcome. ERCOT does the assessment,
  • 03:17:03and then, of course, as part of this assessment,
  • 03:17:07ERCOT would look to see, okay, are we meeting the standard?
  • 03:17:11And if not as part of that assessment, we'll then provide the recommendations and
  • 03:17:16then interjecting another opportunity for stakeholder
  • 03:17:20comment on the recommendations. And then with all that,
  • 03:17:24including now reporting the, the unserved
  • 03:17:27energy, which is another data point,
  • 03:17:30it comes to the commission. And, you know, from my standpoint,
  • 03:17:34you know, that is the human intervention part, that is the part
  • 03:17:38of engagement and leadership by the commissioners.
  • 03:17:42And what, quite frankly, I see as my
  • 03:17:46job to be able to take, you know,
  • 03:17:49this data that has been established, that has been gathered,
  • 03:17:54the assessment that's been done, the recommendations that have been provided,
  • 03:17:58and take thoughtful and deliberate action. And so,
  • 03:18:02you know, I'm more focused on the process. Is the process
  • 03:18:07robust, which I feel like it is,
  • 03:18:10is the process something that is clearly outlined
  • 03:18:14and has all of the necessary steps, which I feel like it does,
  • 03:18:18and, you know, use that
  • 03:18:21as, you know, what we are really kind of
  • 03:18:25focusing on as the key to our success. Now,
  • 03:18:28I have heard, as many of you all have, from a lot of people who
  • 03:18:33have commented on this, and some of the stakeholders have
  • 03:18:37said that they are concerned that if this last
  • 03:18:41step, this requirement that we actually take
  • 03:18:45it up and look at it,
  • 03:18:48it needs to be something that is specifically
  • 03:18:52required by the rule. And so,
  • 03:18:56I mean, my only suggestion at this point would be,
  • 03:18:59do we need to maybe clarify
  • 03:19:03this final step in the process and the rule? I know that we've got the
  • 03:19:07language in there right now that we typically use in terms of when the Commission
  • 03:19:12will consider something and then determine whether or not they want to take action,
  • 03:19:16but that would be my only thought. And again, it is, because that is
  • 03:19:19what some of the folks that I've talked with have said,
  • 03:19:22at least in their mind, would give them more confidence,
  • Clip 35 - David Smeltzer gives clarification on memo, 54584
    03:19:26I guess, in the process. Yeah, that's correct
  • 03:19:30Commissioner. When we were discussing this in briefing, I think you were asking
  • 03:19:34if there were different words we needed to use. And I think that right now
  • 03:19:37it says the commission will determine whether or not market changes are necessary.
  • 03:19:41And I think that folks that are used to reading statutory language
  • 03:19:45might like to see a shall clause in there. And so with the commission's
  • 03:19:49drafting practices, we use may and must when we're talking about other folks,
  • 03:19:53and we use may and will when we're talking about ourselves.
  • 03:19:57If we can do something, we use may if we are going to do
  • 03:20:00something, we use will to reflect fact that the Commission intends to do
  • 03:20:04something we don't use must or shall with regards
  • 03:20:07to ourselves, because you guys could always just good cause accept out of the requirement
  • 03:20:10on yourself anyway. And so when folks read, the Commission will
  • 03:20:14determine that is read in the same way that you
  • 03:20:18would read some other party shall determine or whatever. So to
  • 03:20:21the extent that there's concern that the numbers would just come in and we would
  • 03:20:25never look at them, this rule is designed to have the Commission at
  • 03:20:29the end make a proactive determination about whether or not
  • 03:20:33market changes are going to be required in response to
  • 03:20:37recommendations from our CoD if there's a shortfall. So commission
  • 03:20:40staff believes that it's taken care of, but we are happy to take another
  • 03:20:44look at the language and provide any recommended edits to really
  • 03:20:48button that up by next session if we, if we think, or by next open
  • 03:20:52meeting if we think that it's necessary. Thank you. And as part of that
  • 03:20:55process, you talked about, you know, cost benefit
  • 03:20:59analysis, I guess, being done by ERCOT. Right. And that being subject
  • 03:21:03to stakeholder comment as well.
  • 03:21:06I think it's important that the IMM is also involved in the cost benefit analysis
  • 03:21:11evaluation in that process.
  • 03:21:15Just to clarify, are you wanting a joint cost benefit study from ERCOT?
  • 03:21:19And IMM, or separate, like, two separate views on the cost of the
  • 03:21:22different solutions. I mean,
  • 03:21:26in some ways, I feel like you need another pair of eyes looking at the
  • 03:21:29cost in that analysis that's being prepared. So,
  • 03:21:33yes, joint. I mean, we're having them do a joint for the
  • 03:21:36PCM cost updated cost assessment.
  • 03:21:41The cost benefit analysis is a critical component of this
  • 03:21:44entire process. So I want to make sure that it's a developed
  • 03:21:49in a robust manner and the opportunity for. Stakeholder comment.
  • 03:21:55I will say, you know, we have a lot of changes happening in the market,
  • 03:21:58a lot of loads coming on, and the market's in flux. So I think
  • 03:22:02two years makes sense to be going through this exercise. But I'm just
  • 03:22:06wondering if ultimately, the commission's going
  • 03:22:09to end up on a two year resource
  • 03:22:13adequacy on a cadence of a two year resource adequacy debate
  • 03:22:17going forward, you know, because, I mean,
  • 03:22:21I could see that happening. And if. I'm just wondering if that's
  • 03:22:25the ultimate result of this process, I have
  • 03:22:28that question, too. Just how long these studies will they take
  • 03:22:32to. Will you finish one and start immediately again?
  • 03:22:36Are you going to be constantly tied?
  • 03:22:39So, I mean, I'm happy to punt that question to ERCOT if they have someone
  • 03:22:42here, but my understanding is that, I mean, this entire cycle would be completed
  • 03:22:46well within a year. It's not as if it would roll over into the next
  • 03:22:49year. I'm almost envisioning if we started this in 2026,
  • 03:22:52we would have final results and something that could even be included in the legislative
  • 03:22:56report, in particular,
  • 03:23:00for the first cycle, I would think you'd want to do two years.
  • Clip 35 - Barksdale English on PCM cost benefit analysis, 54584
    03:23:05 Excuse me, Commissioner Cobos. Just want to clarify
  • 03:23:09something. The PCM cost benefit analysis are being
  • 03:23:12run concurrently, but independently by the IMM and
  • 03:23:16ERCOT. So we'll get two sets of analyses from that. And so,
  • 03:23:19just for clarification, for our edits here,
  • 03:23:23are you seeking to have ERCOT and IMM
  • 03:23:26collaborate together on one analysis, or are you asking
  • 03:23:30for two separate analyses? That same process sounds right,
  • 03:23:34yeah. The parallel. Okay, thank you. The same process you're using for PCM. I appreciate
  • 03:23:38that clarification, and thank you for the clarification. It's been a
  • 03:23:42while since I thought about that, and we'll have time between now
  • 03:23:46and next open meeting when we have to adopt something. We can talk to IMM
  • 03:23:49as well and see what their thoughts are.
  • 03:23:56Anything else? Not on this one.
  • 03:24:00Werner, Chris, David do you all need anything else from us?
  • 03:24:04No, I think we have what we need to get a PGRR drafted.
  • 03:24:07Okay. Thank you, all of you, for your work on this.
  • 03:24:11Truly.
  • Clip 36 - Chairman Gleeson lays out Project No. 55837
    03:24:17Okay. That'll bring us to Item No. 36, Docket 55837,
  • 03:24:22review of value of lost load in the ERCOT market.
  • 03:24:26I will just note we'll probably have to take another short break
  • 03:24:29here, like 130 ish for
  • 03:24:33a few minutes, probably 10 or 15 minutes, and then we'll pick it back up
  • 03:24:36if we're not done by then.
  • Clip 36 - Commission Staff's Chris Brown with update on VOLL study, 55837
    03:24:43Hello again. Chris Brown, Commission Staff.
  • 03:24:48Just a very quick verbal update on the ongoing VOLL study.
  • 03:24:52So, the survey of customers in the ERCOT region wrapped up earlier this
  • 03:24:56summer. Brattle has been working on the report
  • 03:25:00and the results of that survey. Staff has received a draft of this and we're
  • 03:25:03working through it. And we'll plan to file a memo
  • 03:25:07next week for the August 29 open meeting, reviewing the results
  • 03:25:10of the survey and providing some recommendations on where to
  • 03:25:14go with the volume value that will
  • 03:25:17be used for ongoing studies and cost benefit analyses,
  • 03:25:22planning models, things of that nature. In kind
  • 03:25:26of your first look at what came in, was there anything surprising, or did it
  • 03:25:29pretty much fall in line with our expectations?
  • 03:25:33Nothing surprising. We're still working through more, some of the more
  • 03:25:37technical details, but we'll definitely have a
  • 03:25:40better review at the next open meeting.
  • 03:25:45Questions? Okay,
  • Clip 37 - Chairman Gleeson lays out Project No. 55000
    03:25:48thank you. Thanks, Chris. So,
  • 03:25:52Item No. 37 is Docket No. 55000.
  • 03:25:56Performance credit mechanism. Werner?
  • 03:25:59Welcome.
  • Clip 37 - Werner Roth on PCM design parameters, 55000
    03:26:02 So, because my reliability standard memo didn't cause enough controversy and
  • 03:26:06phone calls. I figured we would also file recommendations on some
  • 03:26:09of the PCM design parameters for this open meeting.
  • 03:26:12So, to allow for the Commission to have multiple meetings to discuss
  • 03:26:16the design parameters, staff has provided its initial recommendations on what the
  • 03:26:19final values for these design parameters should be.
  • 03:26:22I don't plan to walk through all 37 design parameters today,
  • 03:26:26but I did want to flag one recommendation in particular that will have notable
  • 03:26:30ramifications on the outcomes of the PCM, namely design parameter number
  • 03:26:3420, which is the framework utilized to comply with the net cost cap.
  • 03:26:38So, throughout this process and in the workshop that E3 held
  • 03:26:41at ERCOT, E3 has been determining the net cost by calculating
  • 03:26:45the difference between a world where the PCM is in place to incentivize sufficient capacity
  • 03:26:50to meet a reliability standard, and a non PCM world
  • 03:26:53that has been that where we've added or retired enough capacity to be
  • 03:26:57at the long run market equal of the market design as it currently exists.
  • 03:27:01From a peer modeling perspective, it's a reasonable way to determine
  • 03:27:05the net difference between the cost of the PCM and one without it. And if
  • 03:27:07I were in their position, I probably would have recommended a similar methodology.
  • 03:27:12However, the very first PCM guardrail statute requires that
  • 03:27:15the commission ensure that the net costs to the ERCOT market
  • 03:27:19of the PCM does not exceed $1 billion annually.
  • 03:27:22Any counterfactual non PCM world will rely on several assumptions
  • 03:27:27which make will make ensuring compliance with this provision and statute extremely
  • 03:27:30difficult in staff's view. The only way that we can ensure
  • 03:27:34that we are able to satisfy this provision is to cap the compensation for
  • 03:27:38performance credits at a firm $1 billion annually, with the allowed adjustments
  • 03:27:42for increases in that peak and inflation.
  • 03:27:45This does come with a couple of downsides. It does potentially leave
  • 03:27:48money on the table, as we are not accounting for the energy and ancillary service
  • 03:27:52savings from having the PCM versus not having it. And most notably,
  • 03:27:55it would limit the ability of the PCM to achieve the reliability standard by itself.
  • 03:27:59So further actions may be needed to do that in the future.
  • 03:28:02Again, no formal action is required today, but we will need
  • 03:28:06for the Commission to make its final decision on the 37 design parameters at the
  • 03:28:09next open meeting so that we can give ERCOT and the IMM sufficient time to
  • 03:28:12conduct their respective benefits cost assessments.
  • 03:28:15My understanding is that ERCOT and E3 will be filing their report at their
  • 03:28:19recommendations soon, within the next week or so, and commission
  • 03:28:22staff will file its final recommendations prior to the August 29 open
  • 03:28:26meeting. With that, I'm happy to take any questions. So I'll say that
  • 03:28:29in the last week I've heard the term counterfactual more than I
  • 03:28:32had heard in the previous rest of my life, and so
  • 03:28:36appreciate that. So just to talk about the statute.
  • 03:28:39So the statute requires us to ensure that the net cost does
  • 03:28:43not exceed $1 billion, and what you're saying is the best
  • 03:28:47way to do that is to put a gross cap on the PCs of a
  • 03:28:50billion dollars. I'm saying that from the staff position right now, that is the only
  • 03:28:54way to ensure that we are complying with that, because any counterfactual is
  • 03:28:57going to have assumptions that could be people
  • 03:29:00can poke and prod at and pull apart, and then, oh, is that really what
  • 03:29:03the world would have looked like if the MPCM hadn't been in place? And while
  • 03:29:08the report isn't finally at, I just look at the counterfactual from the market
  • 03:29:12equilibrium and what e three's final report is going to be. That assumes the energy
  • 03:29:16only world results in a lole of 3.0.
  • 03:29:20Not 0.3, but 3.0, essentially resulting in about 30 loss
  • 03:29:24of load events per decade. I cannot envision any world where the Commission
  • 03:29:27would allow the market to achieve that level of reliability in
  • 03:29:31the long run. And so the idea that we wouldn't make any changes to
  • 03:29:35avoid that outcome makes it more that quick. That counterfactual
  • 03:29:38example is questionable, and I
  • 03:29:42think that would come with any counterfactual example where you're comparing what
  • 03:29:45we have versus what we might have had if this hadn't been in place.
  • 03:29:54Can I just ask, like procedural? So, next meeting,
  • 03:29:58we're going to approve these. Are we going to approve them as a,
  • 03:30:04like, take staff recommendations and do we approve it like that,
  • 03:30:07or are we going to go piece by piece, or how are we.
  • 03:30:10Yeah, I think my preference would be, we'll have their recommendation.
  • 03:30:13If there needs to be any change to what they're recommending, I think that's where
  • 03:30:16we'd focus our conversation. Thanks.
  • 03:30:21Yeah, I mean, I don't have any real specific feedback.
  • 03:30:26I think two areas that I discussed with staff was just the allocation of 12
  • 03:30:30hours to both the Winter and the Spring. It seems like you'd want to allocate
  • 03:30:33more hours to the Winter, and that's just something we can
  • 03:30:37talk about next open meeting. You know, Winter seems to
  • 03:30:40be the riskier part of the year and having the
  • 03:30:44same allocation there. Just had some questions
  • 03:30:47about that and then the hours
  • 03:30:51with the metric used to determine the PC hours. Hours with
  • 03:30:55lowest surplus of total available generation capacity relative to load.
  • 03:31:01You know, that's an area that I had some questions about as well, just because
  • 03:31:06our blueprint really focused on net peak
  • 03:31:09load. And I'm just wondering if there's any unintended consequences.
  • 03:31:13If you're looking at the
  • 03:31:17lowest surplus of total available capacity is, you know, you have
  • 03:31:23maybe some potential power or power plants that are not available.
  • 03:31:26What does that mean? For various reasons, but, you know, we can
  • 03:31:29have a conversation about that. Those were two areas that I just had some questions
  • 03:31:33on and with staff.
  • 03:31:36But other than that, the rest of my commentary can wait till next
  • 03:31:39opening.
  • 03:31:45Thanks y'all.
  • 03:31:56Do we need to take a break or are we? 30
  • 03:32:02minutes?
  • Clip 38 - Chairman Gleeson lays out Project No. 56896
    03:32:05 So that will bring us to Item 38,
  • 03:32:08Docket 56896. Texas Energy Fund,
  • 03:32:12an ERCOT loan program reports and filings. We have an update
  • Clip 38 - Barksdale English with update on Texas Energy Fund 56896
    03:32:15from Staff. Good morning Commissioners. Oh wait,
  • 03:32:19it's not morning anymore.
  • 03:32:23So staff filed a memo laying out its process for
  • 03:32:27how we will bring to you at the next open meeting.
  • 03:32:30Recommended Portfolio of Applications for the Texas Energy
  • 03:32:34Fund in ERCOT loan program for your
  • 03:32:38consideration to invite those applications
  • 03:32:42into the due diligence process. In the memo, we outlined
  • 03:32:47that we've received more than 70 applications seeking
  • 03:32:51more than $24 billion of funding, with over 38,000
  • 03:32:56potential new generation. As we go through those applications,
  • 03:33:00we will be assessing them on the each application on
  • 03:33:04the more than 60 questions that they had to answer through the application process.
  • 03:33:08We've kind of compiled those 60 questions into
  • 03:33:12four basic categories, the first being related
  • 03:33:16to project technical and regional attributes, the second,
  • 03:33:19project financial attributes, the third,
  • 03:33:22application sponsor history, and fourth, the application
  • 03:33:26sponsor financial characteristics. We will assess
  • 03:33:30each of those applications individually, relative to all the other
  • 03:33:33applications on each of those four metrics. And then,
  • 03:33:37in individual conversations that we've had with each
  • 03:33:40of your offices, we've gleaned some common
  • 03:33:44overlaps in public policy priorities that your
  • 03:33:47offices have identified, which will include the diversity
  • 03:33:51of the applicant types. Diversity and I siting location,
  • 03:33:55the speed to market that the project is proposing,
  • 03:33:59the ability of that project to relieve known transmission constraints,
  • 03:34:03and the diversity of generation technology types.
  • 03:34:06And so we will take each of those five policy priorities and layer
  • 03:34:10them on top of those four basic categories in order to develop
  • 03:34:13the recommended portfolio. Next week, we will present
  • 03:34:17you individually with binders,
  • 03:34:20either in paper or in electronic format,
  • 03:34:23that will show you the assessment of this information. And I will note
  • 03:34:27that all the information that's been provided in those applications are
  • 03:34:31confidential by law. And so we're not,
  • 03:34:34you know, able to disclose a whole lot of information publicly about
  • 03:34:38the, about those applications at this time.
  • 03:34:41But we'll go through and gauge your feedback
  • 03:34:45on, on the recommended portfolio that we'll present to you next week.
  • 03:34:49And then at the August 29 meeting, we'll consolidate
  • 03:34:54all the feedback that you've provided and present publicly the
  • 03:34:58portfolio for your consideration. Happy to talk about
  • 03:35:02any other process questions that you'd like and any
  • 03:35:05other questions that I can answer. So, at the 29th
  • 03:35:08Open Meeting, how do you envision the approval process going? Will we be
  • 03:35:13to Commissioner Glotfelty's previous point.
  • 03:35:16Obviously, a lot of this is confidential, so I imagine we
  • 03:35:19won't be going project by project. So how do you envision that process on the
  • 03:35:2229th working? Thank you. So we will have
  • 03:35:26a portfolio of applications presented for your approval
  • 03:35:30in the meeting. We'll disclose the name of the applicant,
  • 03:35:34the megawatts that the project represents,
  • 03:35:38the general location of that project designated
  • 03:35:42by load zone, the ERCOT load zone.
  • 03:35:45And then we'll also have some basic kind of ranking criteria
  • 03:35:49and just kind of how that application satisfies each
  • 03:35:53of the kind of four basic criteria, as well as the remaining
  • 03:35:57policy priorities that you all have identified for us.
  • 03:36:01Our hope is that you'll be very happy with the portfolio
  • 03:36:04that we present to you and that you can approve an order that
  • 03:36:08would delegate to connie the ability to enter
  • 03:36:13into a loan agreement with those applications,
  • 03:36:16provided that the project and the applicant satisfies
  • 03:36:20the due diligence requirements that they will be
  • 03:36:23invited to enter into following that vote.
  • 03:36:27So a delegation, similar to what we do for contracting purposes, it would be exactly
  • 03:36:31like that. And I was just to clarify
  • 03:36:34for the public, once we go through this process,
  • 03:36:39the other applicants that were not selected are not just sitting
  • 03:36:43there waiting. If one of them falls out, this is the
  • 03:36:46end of this process. If the commission
  • 03:36:50would have excess money or the legislature asked us to do it again,
  • 03:36:54we would go through another RFP process. Correct. So the
  • 03:36:58action that we contemplate you all taking at the August 29
  • 03:37:02open meeting would not make a formal designation
  • 03:37:07or declaration on any of the applicants that wouldn't be invited to
  • 03:37:11due diligence. So because the legislature
  • 03:37:14has appropriated five of the $10 billion,
  • 03:37:19we're looking for the most amount of flexible, both from the
  • 03:37:23applicants as well as from the commission, in order to
  • 03:37:27kind of keep the trains moving as quickly as possible, because we
  • 03:37:31have a lot of statutory deadlines that we're trying to hit here, as well as
  • 03:37:34a lot of legislative intent
  • 03:37:38to try to optimize the number of megawatts that
  • 03:37:42we're getting into the ERCOT region through this program.
  • 03:37:46So, Barsdale, on that, you know, we've been
  • 03:37:49given, I would say, some guidance that I think
  • 03:37:52it's likely we'll get the other 5 billion. Is there a timeline
  • 03:37:56for where, you know, approving the most,
  • 03:37:59the maximum amount of megawatts and dollar amount? We would need to know that
  • 03:38:04that money is coming to the commission in order to make those awards.
  • 03:38:07Thanks, chairman. It's probably
  • 03:38:11the end of February. Beginning of March is probably about the last
  • 03:38:15time that we can really make any substantive pivots.
  • 03:38:19And I arrive at that date for the following
  • 03:38:22reason. We know that the due diligence process could take up
  • 03:38:26to eight months, and our consultant
  • 03:38:30has advised us to leave about 60 days
  • 03:38:34for execution of a loan agreement, as well
  • 03:38:37as kind of the back end administrative processing in order for the
  • 03:38:42first loan distributions to be made by the end of the year. So that really
  • 03:38:45kind of backs us into that end of February, beginning of March
  • 03:38:49timeline.
  • 03:38:53Okay. Any other questions? Thank you Barksdale.
  • Clip 41 - Chairman Gleeson lays out Project No. 53911
    03:38:59 So that will bring us to Item 41. That's Docket
  • 03:39:03No. 53911, aggregate distributed energy
  • 03:39:06resources ERCOT pilot project. And Commissioner Glotfelty,
  • Clip 41 - Commissioner Glotfelty lays out his memo on ADER ERCOT pilot project, 53911
    03:39:09you filed a memo. I just wanted to say,
  • 03:39:13obviously Commissioner McAdams is not here anymore. We are.
  • 03:39:18This is a valuable, potentially a really valuable product
  • 03:39:22in the market. This is. This memo is to keep
  • 03:39:25the trains running. We don't know what on time is. This is not a directive
  • 03:39:29of staff. This is a directive of like, how are we going to keep this
  • 03:39:33thing going? So I put these questions out there, not for
  • 03:39:36resolution today, but really for the
  • 03:39:41task force to keep working, to come back to us with answers to these questions
  • 03:39:44and to figure out how we could, you know, keep utilizing
  • 03:39:49this pilot project or have it become an official part of the market.
  • 03:39:54Okay. Yeah. Just kind of keep us apprised of what you may need from us.
  • 03:39:57Yeah. All right. Thank you.
  • 03:40:01So next, I think that takes us to item 49.
  • 03:40:05There's no docket number. It's discussion possible action on electric reliability,
  • 03:40:10market development, power to choose, ERCOT oversight, transmission planning, construction and cost
  • 03:40:14recovery. So Connie, I think you
    PauseEditCreate clip
  • Clip 49 - Connie Corona gives update on Permian workshop
    03:40:17had an update maybe on Permian. Yes, there just
  • 03:40:21a reminder of workshop on August 22,
  • 03:40:26one week from today in this room at 9:30 to
  • 03:40:30review the plan for the Permian basin.
  • 03:40:33Okay, thank you for that. Did you have a 47?
  • Clip 47 - Chairman Gleeson lays out Project No. 41210
    03:40:39 Okay, we'll go back to Item No. 47.
  • 03:40:42That is Project No. 41210.
  • 03:40:46Information related to the Southwest Power Region State Committee.
  • Clip 47 - Commissioner Cobos provides update on SPP RSC, 41210
    03:40:50All right. Thank you, Chairman Gleeson. I just wanted to provide a brief update.
  • 03:40:53On August 5, the SPP RSC meeting or
  • 03:40:58committee met, and the RSC and ultimately
  • 03:41:02the board of SPP approved an increase
  • 03:41:06in the summer PRM that would take effect in summer
  • 03:41:0926 from 15% to 16%,
  • 03:41:14and then established a winter PRM of 36%
  • 03:41:18that would take effect the Winter of '26-'27
  • 03:41:22and would apply to '27-'28 Winter seasons.
  • 03:41:26These PRM decisions were
  • 03:41:30passed overwhelmingly by the majority of the RSC.
  • 03:41:34Texas and Oklahoma opposed. And the.
  • 03:41:39The SBP staff is expected to quickly,
  • 03:41:44probably by the end of this year, early next year, start moving towards a discussion
  • 03:41:48of increasing the summer PRM from 16% to 17%
  • 03:41:52and establishing around a 44%
  • 03:41:56PRM. So those are very large percentages.
  • 03:41:59And they, you know, it's got
  • 03:42:03a lot of concerns by our LSEs, or LREs, as they call
  • 03:42:07them, an SPP, about the ability to comply
  • 03:42:11with not only the 36 and 16 that were approved by the SPP,
  • 03:42:16but definitely for the 17 and 44%.
  • 03:42:20And so the way you meet them is by making investments in your existing generation
  • 03:42:24to ensure they're available to perform, building new capacity
  • 03:42:29or buying excess capacity from another LSE,
  • 03:42:34LRE, or merchant generator and SPP to comply. So there's,
  • 03:42:39there's impacts, I think, cost,
  • 03:42:42and also, and I say cost in
  • 03:42:46terms of, you know, spending money to add
  • 03:42:49new plants, but also costs. If you don't come, if you're not able to meet
  • 03:42:52the PRM, then you have to pay a deficiency payment. And SPP
  • 03:42:56did create sort of a curve to try the. So that you're not paying outsize
  • 03:42:59deficiencies. It's based on the actual deficiency amount that
  • 03:43:03you are actually short. So they did make some improvements
  • 03:43:06in that area. But ultimately,
  • 03:43:10it's a lot of pressure on our LREs that are operating in SPP in
  • 03:43:14Texas. And then also, you know,
  • 03:43:17it will have a downward impact on the switchability of
  • 03:43:20the generation units, that switch between ERCOT and SPP.
  • 03:43:25So I just want to provide that update. Any questions?
  • Clip 57 - Chairman Gleeson opens up item to PUC's COO, Hayley Hall
    03:43:31Okay, thank you for that update. So I
  • 03:43:35think then the last item we have will be Item No.
  • 03:43:3857, which is normal, where we get an update from our Executive
  • 03:43:42Director or Deputy Executive Director. But today our Chief Operating Officer,
  • 03:43:46Hayley Hall, has an update. Believe our appropriations request
  • 03:43:50is due tomorrow. And this is the first appropriations
  • 03:43:54request since 2010 that I've had absolutely nothing to do with. So I'm in a
  • 03:43:57bit of mourning. So no pressure.
  • Clip 57 - Hayley Hall, Commission Staff's COO on Legislative appropriations request for FY '26-'27
    03:44:00 Good afternoon, Hayley Hall for Commission Staff. We are putting the finishing
  • 03:44:04touches on our legislative appropriations request for FY '26-'27,
  • 03:44:08which starts a year from September.
  • 03:44:12Thank you to Jay Stone, Nathaniel Lilly, Jess Heck,
  • 03:44:15and Casey Green for their contributions to the report.
  • 03:44:18The legislature did not ask state agencies to make an across the board cut this
  • 03:44:22year. So our baseline budget is basically the same as our FY
  • 03:44:26'25 budget, more or less. And then we're asking for five
  • 03:44:29exceptional items in addition to the baseline budget.
  • 03:44:33One is for additional staffing kind of across the
  • 03:44:36agency, but really concentrated on the contested case process to deal with,
  • 03:44:39with kind of demand for services and our caseload
  • 03:44:43growth across the board. The second is to develop
  • 03:44:46a case management system. This was a recommendation from the Sunset Commission
  • 03:44:50to gather better data across the contested case process,
  • 03:44:54automate where we can, and provide kind of an across the board tool to
  • 03:44:58have a chance to analyze our data, look for trends,
  • 03:45:02and kind of make sure our resources are allocated efficiently.
  • 03:45:07The third is related to infrastructure,
  • 03:45:10reliability and resiliency. We have a lot of additional work in
  • 03:45:14that area. So it's a request for additional staff for
  • 03:45:18additional CCN volumes, a lot related to
  • 03:45:21permian basin reliability plans and other reliability plans and
  • 03:45:25reports on resiliency and those types of things. As part
  • 03:45:28of that exceptional item, we're asking for funds to create
  • 03:45:32a Texas version of the federal eagle eye system. That's the
  • 03:45:36outage tracking database. That would provide a lot more detail
  • 03:45:39than what the federal system provides in the event of an outage
  • 03:45:43event. The fourth is related to.
  • 03:45:47What is the fourth one?
  • 03:45:50The TEF expansion. So a few additional staff for TEF.
  • 03:45:54As noted earlier, the response has been a lot more than
  • 03:45:57what we had anticipated. So it's just a handful of extra staff to
  • 03:46:01deal with those volumes. We'll be in the monitoring phase of kind of all four
  • 03:46:04programs at that point and just staffing up for that eventuality.
  • 03:46:08And the fifth is a replacement of power to choose. That resource
  • 03:46:12was developed in the early two thousands. The last significant update to that
  • 03:46:16was in 2015. So it's just time for a
  • 03:46:19refresh with kind of an updated modern architecture user interface.
  • 03:46:24Do you know offhand what our current FTE cap is and
  • 03:46:28what these exceptional items would take it to? Our current FTE cap
  • 03:46:31is 283, and this would add an additional 53
  • 03:46:35FTEs to that. Do we have
  • 03:46:39all those FTEs filled at 283? I think right now
  • 03:46:42we're at about 253. So we've added about
  • 03:46:4650 FTEs during this past year. Year. And we're continuing to staff
  • 03:46:49up in the coming years with the FTEs that we got during the
  • 03:46:52last legislative session. So this would be in addition to that. Okay.
  • 03:46:56So. And we would go from 283 to. I'm sorry,
  • 03:46:59what number again, if you's total.
  • 03:47:03Okay. Okay. So, yeah. Like over 300, 330 something.
  • 03:47:07So I am glad you're doing a review of the contested case side
  • 03:47:11of our business. The just.
  • 03:47:14The Permian basin alone will have a litany of CCEM proceedings
  • 03:47:18that our staff has to process within 180 days, not to mention
  • 03:47:22the other contestant cases that were under expedited timelines on.
  • 03:47:26So I appreciate you taking a look at that. And,
  • 03:47:30you know, if you need to add more than 53, you may want to consider
  • 03:47:33that because that's a lot of work, even just on the CCN side of it.
  • 03:47:36Thank you. Thank you. And I'll say Commissioner Jackson, from the
  • 03:47:40first day she got here, was well ahead of the Sunset Commission on wanting us
  • 03:47:44to have a case management system. So. Yes,
  • 03:47:47I'm happy to hear we're doing that.
  • 03:47:50Okay. Do you know, do we have any joint
  • 03:47:54budget hearings or any other hearings coming up this fall that we know yet?
  • 03:47:58I'm sure there will be hearings. I think they're in the process of being scheduled.
  • 03:48:00Okay. Okay. Any questions.
  • 03:48:05All right. Thank you, Hayley. Thank you. All right, I'm going to look to Connie
  • 03:48:08since I skipped, like, four things this meeting. So I think at this point we're
  • Clip 57 - Chairman Gleeson adjourns meeting
    03:48:11clear. All right. This meeting of the Public Utility Commission of Texas is hereby
  • 03:48:15adjourned.
Chairman Gleeson calls meeting to order
Starts at 00:00:04
51 - Chairman Gleeson lays out Project No. 56793
Starts at 00:01:24
52 - Chairman Gleeson lays out Project No. 56822
Starts at 00:01:36
58 - Chairman Gleeson lays out discussion & possible action regarding customer service issues
Starts at 00:01:43
51 - Jason Ryan, CenterPoint's Executive VP's update on action plan, 56793
Starts at 00:02:08
51 - Commissioners comments on CenterPoint's action plan, 56793
Starts at 00:08:34
51 - Eric Easton, CenterPoint's VP of Grid Transformation Investment Strategy, 56793
Starts at 00:12:12
51 - Commissioners questions for CenterPoint on rate payer costs, 56793
Starts at 00:15:06
51 - Jason Ryan gives information on CenterPoint Open Houses, 56793
Starts at 00:24:58
51 - Connie Corona, PUC Executive Director gives recap of their work with CenterPoint
Starts at 00:31:24
51 - Chairman Gleeson confirms the Commission's Open Meeting in Houston
Starts at 00:32:10
51 - Jason Ryan on CenterPoint's temporary emergency generation assets
Starts at 00:33:05
51 - Jason Ryan on their filing under Project 56793
Starts at 00:42:35
51 - Eric Easton on CenterPoint's circuit segmentation, 56793
Starts at 00:52:13
51 - Commissioner Hjaltman's question to CenterPoint on stackable generators, 56793
Starts at 00:58:18
51 - Commissioner Glotfelty's question on canceling lease agreements, 56793
Starts at 01:00:13
51 - Eric Easton on CenterPoint readying units, 56793
Starts at 01:10:27
51 - Commissioner Glotfelty's question to CenterPoint on performance metrics, 56793
Starts at 01:20:02
51 - Eric Easton on distributed generation, 56793
Starts at 01:26:55
51 - Commissioner Jackson's question on managing risk, 56793
Starts at 01:36:31
1 - Shelah Cisneros, Commission Counsel, confirms 3 people have signed up for Public Comment
Starts at 01:39:35
1 - Bruce Sorgen, TX citizen, concerning Windermere Oaks WSC
Starts at 01:39:53
1 - Danny Flunker, TX citizen, on behalf of rate payers of Windermere Oaks WSC
Starts at 01:43:19
1 - Allen Hicks, TX citizen, concerning Windermere Oaks WSC
Starts at 01:45:39
0.1 - Shelah Cisneros lays out Consent Agenda
Starts at 01:49:41
0.1 - Chairman Gleeson asks for motion to approve items on Consent Agenda
Starts at 01:50:33
0.1 - Chairman Gleeson recesses open meeting
Starts at 01:50:51
0.1 - Chairman Gleeson resumes open meeting
Starts at 01:51:00
52 - Chairman Gleeson recalls Project No. 56822
Starts at 01:51:12
58 - Chairman Gleeson recalls discussion & possible action regarding customer service issues
Starts at 01:51:19
58 - Connie Corona speaks on customer complaints concerning CenterPoint, 56822
Starts at 01:51:30
52 - Tony Gardner, CenterPoint's SVP Chief Customer Officer on the estimated meter process, 56822
Starts at 01:52:57
52 - Connie Corona's question for CenterPoint concerning the modification of their standard operating procedure, 56822
Starts at 01:55:56
52 - Christina Rollins, NRG's Assistant General Counsel of Reg. Affairs on communication with customer, 56822
Starts at 01:57:54
58 - Commissioner Hjaltman's question to CenterPoint & NRG on communication with customers
Starts at 02:01:03
58 - Connie Corona recaps discussion
Starts at 02:03:33
52 - Barksdale English, PUC's Deputy Executive Director concerning reports due to the Legislature & RFIs, 56822
Starts at 02:04:16
43 - Chairman Gleeson lays out Project No. 56897
Starts at 02:09:35
44 - Chairman Gleeson lays out Project No. 56898
Starts at 02:09:47
43 - Commission Staff's David Smeltzer on communication & outage trackers, 56897
Starts at 02:10:15
44 - Commission Staff's David Smeltzer on emergency contact to TDUs by REPs, 56898
Starts at 02:12:00
43 - Commissioner Cobos lays out her memo, 56897
Starts at 02:14:00
44 - Commissioner Cobos lays out her memo, 56898
Starts at 02:15:23
43 - Motion to approve proposal for publication, 56897
Starts at 02:16:46
44 - Motion to approve proposal for publication, 56898
Starts at 02:16:51
3 - Petition by Outside City Ratepayers appealing the water rates by the City of Leander, 53063
Starts at 02:17:23
3 - Chairman Gleeson lays out his memo, 53063
Starts at 02:17:48
3 - Motion to adopt PFD with modifications & deny appeal, 53063
Starts at 02:18:09
6 - Application of Onalaska Water Supply Corporation to amend CCN in Polk County, 54820
Starts at 02:18:30
6 - Chairman Gleeson lays out his memo, 54820
Starts at 02:18:45
6 - Motion to approve the good cause exception, 54820
Starts at 02:18:57
19 - Petition by residents of Grand Lakes M.U.D. No. 2 appealing water rates by the District’s Board of Directors, 56589
Starts at 02:19:25
19 - Chairman Gleeson lays out his memo, 56589
Starts at 02:19:50
19 - Motion to modify the PFD, 56589
Starts at 02:20:13
23 - Joint Application of Southwestern Public Service Co. and City of Lubbock, acting by and through Lubbock P&L to Transfer CCN, 56142
Starts at 02:20:30
23 - Chairman Gleeson lays out his memo, 56142
Starts at 02:21:04
23 - Motion to remand proceeding to OPDM, 56142
Starts at 02:21:26
17 - Rate-Case Expense severed from Docket No. 50788, 56273
Starts at 02:21:52
17 - Commissioner Cobos lays out her memo, 56273
Starts at 02:22:09
17 - Motion to approve proposed order with changes, 56273
Starts at 02:22:59
20 - Application of the City of Lubbock acting by and through Lubbock P&L to change rates for wholesale transmission service, 54657
Starts at 02:23:31
20 - Commissioner Cobos lays out her memo, 54657
Starts at 02:23:56
20 - Motion to adopt in part & reject in part the ALJ's PFD, 54657
Starts at 02:25:58
22 - Commission Staff’s Petition for Declaratory Order regarding opt out of securitization uplift charges by Transmission-Voltage Customers, 56125
Starts at 02:26:32
22 - Commissioner Cobos lays out her memo, 56125
Starts at 02:26:54
22 - Commissioner Glotfelty asks to delay decision until next open meeting, 56125
Starts at 02:27:26
28 - Application of Energywell Texas, LLC for a Retail Electric Provider Certificate, 56651
Starts at 02:28:19
28 - Commissioner Cobos lays out here memo, 56651
Starts at 02:28:35
28 - Commissioner Glotfelty's thoughts on the memo, 56651
Starts at 02:29:30
28 - Barksdale English with clarification on memo, 56651
Starts at 02:33:00
28 - Motion to deny Energywell's Appeal of Order No. 2, 56651
Starts at 02:34:37
33 - Chairman Gleeson lays out Project No. 55999
Starts at 02:35:30
33 - Davita Dwyer, ERCOT's Sr. Corporate Counsel on the RMR process & ERCOT workshop, 55999
Starts at 02:36:09
33 - Carolyn Shellman, Law Firm of Enoch Kever, Lawyer for CPS Energy concerning RMRs, 55999
Starts at 02:39:10
33 - Chairman Gleeson's question concerning notice of suspension of operations, 55999
Starts at 02:42:23
33 - Commissioner Jackson's question on management of risk, 55999
Starts at 02:44:39
33 - Commissoner Hjaltman's question on outages, 55999
Starts at 02:49:18
33 - Woody Rickerson, ERCOT's SVP & COO on RMR analysis, 55999
Starts at 02:51:15
33 - Gabriel Garcia, CPS Energy's Regulatory Counsel on costs, 55999
Starts at 02:54:22
35 - Chairman Gleeson lays out Project No. 54584
Starts at 02:59:07
35 - Commission Staff's Werner Roth on changes to final rule and memo, 54584
Starts at 02:59:33
35 - Commissioners thoughts and questions on memo, 54584
Starts at 03:06:11
35 - David Smeltzer gives clarification on memo, 54584
Starts at 03:19:26
35 - Barksdale English on PCM cost benefit analysis, 54584
Starts at 03:23:05
36 - Chairman Gleeson lays out Project No. 55837
Starts at 03:24:17
36 - Commission Staff's Chris Brown with update on VOLL study, 55837
Starts at 03:24:43
37 - Chairman Gleeson lays out Project No. 55000
Starts at 03:25:48
37 - Werner Roth on PCM design parameters, 55000
Starts at 03:26:02
38 - Chairman Gleeson lays out Project No. 56896
Starts at 03:32:05
38 - Barksdale English with update on Texas Energy Fund 56896
Starts at 03:32:15
41 - Chairman Gleeson lays out Project No. 53911
Starts at 03:38:59
41 - Commissioner Glotfelty lays out his memo on ADER ERCOT pilot project, 53911
Starts at 03:39:09
49 - Connie Corona gives update on Permian workshop
Starts at 03:40:17
47 - Chairman Gleeson lays out Project No. 41210
Starts at 03:40:39
47 - Commissioner Cobos provides update on SPP RSC, 41210
Starts at 03:40:50
57 - Chairman Gleeson opens up item to PUC's COO, Hayley Hall
Starts at 03:43:31
57 - Hayley Hall, Commission Staff's COO on Legislative appropriations request for FY '26-'27
Starts at 03:44:00
57 - Chairman Gleeson adjourns meeting
Starts at 03:48:11

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