[00:00:03]
[1. Call General Session to Order]
UM, GOOD MORNING.TO THE MEMBERS OF THE ERCOT BOARD OF DIRECTORS AND GUESTS, THIS IS PAUL FOSTER ERCOT, BOARD CHAIR.
WELCOME TO THE FEBRUARY 28TH, 2023 BOARD OF DIRECTORS MEETING.
UH, HEREBY CALL THIS MEETING TO ORDER.
THIS MEETING IS BEING WEBCAST LIVE TO THE PUBLIC ON ER COP'S WEBSITE.
BEFORE WE BEGIN, I'D LIKE TO ASK PUC CHAIRMAN PETER LAKE, IF HE WOULD LIKE TO CALL AN OPEN MEETING OF THE COMMISSION TO ORDER.
THIS MEETING OF THE PUBLIC UTILITY COMMISSION OF TEXAS WILL COME TO ORDER TO CONSIDER MATTERS THAT HAVE BEEN DULY POSTED WITH THE SECRETARY OF STATE FOR FEBRUARY 28TH, 2023.
FOR THE RECORD, MY NAME IS PETER LAKE.
WITH ME TODAY ARE COMMISSIONERS, MC ADAMS AND COBOS AND GLOCK.
BEFORE WE GET GOING, I'D LIKE TO HIGHLIGHT THAT THE ANTITRUST ADMONITION AND SECURITY MAP ARE INCLUDED WITH POSTED MEETING MATERIALS.
THE FIRST ORDER OF BUSINESS IS AGENDA ITEM TWO, NOTICE OF PUBLIC COMMENT, IF ANY.
TODAY'S MEETING AGENDA WAS POSTED PUBLICLY ON FEBRUARY 21ST AND PROVIDED INSTRUCTIONS FOR THE PUBLIC FOR COMMENTING IN PERSON TODAY.
NO ONE HAS EXPRESSED INTEREST IN COMMENTING.
IS THAT STILL THE CASE, CHAD? YES, IT IS.
[3. Confirmation of Technical Advisory Committee (TAC) Chair and Vice Chair for 2023]
TO AGENDA ITEM THREE, CONFIRMATION OF TECHNICAL ADVISORY COMMITTEE CHAIR AND VICE CHAIR FOR 2023.AS NOTED IN THE MEETING MATERIALS AT ITS JANUARY MEETING TACK ELECTED CLIFF LANGY, SOUTH TEXAS ELECTRIC COOPERATIVE, AND CAITLIN SMITH, JUPITER POWER AS CHAIR AND VICE CHAIR OF THE T A C RE, RESPECTIVELY FOR THE 2023 YEAR.
UNLESS THERE'S ANY DISCUSSION, I'LL ENTERTAIN A MOTION TO, UH, TO CONFIRM THEIR CONFIRMATION.
[4. Consent Agenda]
ITEM FOUR, CONSENT AGENDA.I WILL TURN IT OVER TO CHAD TO PROVIDE THE BUDGET IMPACTS OF THE REVISION REQUESTS.
YOU HAVE NINE REVISION REQUESTS ON THE CONSENT AGENDA.
THERE ARE NO STAFFING IMPACTS ASSOCIATED WITH THESE REVISION REQUESTS.
ONLY TWO OF THE REVISION REQUESTS HAVE A BUDGET IMPACT.
THE LARGEST BUDGET IMPACT IS ASSOCIATED WITH NPR 1149 WITH A RANGE FROM 120,000 TO 160,000.
MOST OF THAT WORK BEING ASSOCIATED WITH CHANGES TO OUR SETTLEMENTS AND BILLING SYSTEMS AND OUR MARKET OPERATIONS SYSTEMS. OKAY, THANK YOU CHAD.
UH, WITH THAT, DOES ANY BOARD MEMBER WISH TO DISCUSS OR REMOVE ANY ITEM FROM THE CONSENT AGENDA? UH, HEARING NONE.
I'LL ENTERTAIN A MOTION TO APPROVE THE CONSENT AGENDA AS PRESENTED.
[5. December 20, 2022 General Session Meeting Minutes]
ITEM FIVE, DECEMBER 20TH, 2020, UH, 2022, GENERAL SESSION MEETING MINUTES.THERE'S A DRAFT IN THE MEETING MATERIALS.
DOES ANYONE HAVE ANY COMMENTS OR WISH TO MAKE A MOTION? BOB? SECOND BY BILL.
[6. CEO Update]
SIX IS THE C E O UPDATE, AND, UH, PABLO IS READY TO GO.ALL RIGHT, THANK YOU VERY MUCH, CHAIRMAN.
GOOD MORNING AND WELCOME EVERYBODY.
IT'S A PLEASURE TO BE HERE WITH YOU ALL THIS MORNING.
WE HAVE, UH, HAD A STRONG START TO THE YEAR IN, UH, 2023.
A LOT OF ACTIVITY, A LOT OF PROGRESS CONTINUES TO BE MADE ON, UH, ON MANY FRONTS.
THIS IS THE, UH, FIRST BOARD MEETING THAT WE'VE HAD SINCE TWO SIGNIFICANT WEATHER EVENTS OCCURRED IN TEXAS, WINTER STORMS, ELLIOT AND MARA, BOTH OF WHICH SAW STRONG GRID PERFORMANCE.
AND I'LL TALK A LITTLE BIT ABOUT SOME OF THE SPECIFICS ABOUT THOSE STORMS IN MY DISCUSSION THIS MORNING.
OUR, UM, GRID CONTINUES TO BE TESTED AND, UM, BOTH THE PEOPLE THAT SUPPORT THE GRID ACROSS ERCOT AND ALL OF THE MARKET, THE GENERATORS, TRANSMISSIONS, DISTRIBUTION COMPANIES AND RETAILERS AND EVERYBODY IN BETWEEN HAVE STOOD UP TO THAT TEST.
AND, UH, IT'S SOMETHING THAT WE CAN BE PROUD OF, BUT IT'S NOT SOMETHING THAT WE CAN SIT BACK AND REST ON.
WE HAVE A LOT OF WORK AHEAD OF US STILL, AND WE CONTINUE TO SHOW THE PROGRESS THAT'S BEING MADE.
OUR FOCUS CONTINUES TO BE FIRST AND FOREMOST EVERY DAY ON RELIABLE OPERATIONS.
THAT WILL ALWAYS BE WHAT ACOD WAKES UP EVERY DAY THINKING ABOUT AND WILL CONTINUE TO BE FOCUSING ON.
[00:05:01]
WE ARE WORKING ON IMPROVING OUR COMMUNICATIONS, MAKING THEM MORE TRANSPARENT, MAKING THEM MORE PROACTIVE, AND WE'RE ALSO LOOKING TO REMAIN ACTIVE IN THE DIALOGUE AND IN THE DEBATES THAT ARE HAPPENING ACROSS THE STATE ABOUT THE FUTURE OF THE ERCOT GRID AND THE MARKETS THAT WE OPERATE THIS YEAR ALSO HAPPENS TO BE A SUNSET HERE.AND SO WE ARE LOOKING AT THE OPPORTUNITY TO MAKE IMPROVEMENTS TO SOME OF OUR INTERNAL BUSINESS PROCESSES BASED ON RECOMMENDATIONS THAT HAVE COME FROM FORWARD, FROM THE SUNSET COMMISSION AND, UH, ITS COMMITTEE.
SO WE LOOK FORWARD TO, UH, TO WORKING THROUGH THAT AND SEEING WHAT THE, THE FINAL LEGISLATION, UH, RECOMMENDS FOR US.
SO TURNING TO THE PERFORMANCE DURING THE, UM, THE WINTER STORMS, FIRST OFF, I WANT TO ACKNOWLEDGE THAT THESE STORMS IMPACTED HUNDREDS AND THOUSANDS OF TEXANS ACROSS THE STATE AND SOME VERY, VERY SEVERELY, THE, THE ICE STORM THAT WE HAD HAD MOST RECENTLY CAUSED SIGNIFICANT OUTAGES ACROSS MU MUCH PARTS OF, UH, CENTRAL TEXAS.
AND SO IT WAS, UH, IT WAS NOT SOMETHING THAT WAS EASY FOR TEXANS TO ENDURE.
AND WHILE WE TALKED ABOUT IT FROM THE PERSPECTIVE OF THE ERCOT GRID, HAVING HAD GOOD PERFORMANCE DURING THOSE TIMES, I DOT ACKNOWLEDGE THE DIFFICULTY THAT A LOT OF TEXANS EXPERIENCE BECAUSE OF THOSE STORMS. THE, UM, THE GRID DURING BOTH OF THE STORMS PERFORMED VERY WELL.
THE FIRST ONE WAS A REAL TEST IN TERMS OF MORE EXTREME WEATHER, AND THE FIRST STORM WAS CHARACTERIZED BY A VERY EXTREME WEATHER EVENT MOVING ACROSS THE UNITED STATES.
AGAIN, THIS IS ONE WHERE TEMPERATURES DROPPED VERY, VERY LOW, VERY LOW FOR THE STATE OF TEXAS.
IT COVERED THE MAJORITY OF THE STATE, SO FROM THE NORTH ALL THE WAY TO THE SOUTH.
AND WE SAW AND EXPERIENCED TWO NEW RECORD PEAKS IN THE ERCOT GRID DURING THAT STORM.
SO THE, THE PEAK PEAK THAT WE HIT WAS A LITTLE OVER 74,000 MEGAWATTS ON DECEMBER 23RD.
AT THAT TIME, THERE WERE ENOUGH RESERVES ON THE SYSTEM.
WE, UM, WE HAD FORECASTED LOWER, UH, LOAD DURING THE, THAT STORM, BUT WE PLANNED FOR MORE.
AND THAT'S SOMETHING THAT WE ALWAYS DO BECAUSE THERE'S ALWAYS UNCERTAINTY BASED ON A LOT OF DIFFERENT FACTORS THAT CAN HAPPEN DURING A WEATHER EVENT.
SOME OF THOSE UNCERTAINTIES CAN BE THE DEGREE TO WHICH TEMPERATURES CHANGE.
AND, AND THAT TURNED OUT TO BE ONE OF THE MORE IMPACTFUL ISSUES DURING THE WINTER STORM ELLIOT, THE DEGREE TO WHICH WE WENT FROM MODERATE TEMPERATURES IN THE AFTERNOON THAT THE, THE STORM COMING IN, IN THE THIRTIES AND FORTIES AND AND FIFTIES AND MANY PARTS OF THE STATE ALL THE WAY DOWN TO SINGLE DIGITS AND TEENS ACROSS MOST OF THE STATE.
AND THAT RAPID REDUCTION CAUSED A VERY INCRE, UH, FAST INCREASE IN SPIKE IN LOAD ACROSS THE STATE.
NOT ONLY DID WE EXPERIENCE THAT, BUT WE SAW GRID OPERATORS ACROSS THE UNITED STATES EXPERIENCED THAT AS WELL AND, AND STRUGGLED WITH THAT, WITH THAT DELTA.
SO IT WAS A LEARNING FOR US, SOMETHING THAT WE, WHEN THAT KIND OF POTENTIAL EVENT CAN MOVE THROUGH THE STATE, WE NEED TO BE ANTICIPATING THE IMPACT THAT THAT CAN HAVE TO OUR LOAD.
AND WE'VE ADJUSTED OUR MODELING BASED ON THE LEARNINGS THAT WE'VE EXPERIENCED AS WELL AS OTHER GRID OPERATORS EXPERIENCED AS WELL.
BUT LIKE I SAID, WHAT WE DO DURING THAT EVENT, WE ALWAYS ANTICIPATE THAT THERE COULD BE VARIATIONS IN OUR LOAD.
AND SO WE PLAN FOR THE RESOURCES ON THE SUPPLY SIDE TO HAVE ADEQUATE CUSHION AND, AND RESERVE IN ORDER TO BE ABLE TO MEET THE EXPECTATIONS DURING THOSE EVENTS.
WINTER STORM MARA WAS DIFFERENT.
WINTER STORM MARA WAS A MUCH WETTER EVENT.
IT BROUGHT IN ICE AND FREEZING RAIN ACROSS, UH, LARGE PORTIONS OF THE STATE, BUT IT DIDN'T COME WITH, IT DIDN'T COME WITH VERY EXTREME COLD TEMPERATURES.
AND SO DURING THAT EVENT, WE SAW LOWER PEAKS, AS YOU SEE AROUND 65,000 MEGAWATT, UH, AT ITS PEAK ON JANUARY 31ST.
AND THE OUTAGES WERE MORE SIGNIFICANT DURING, UH, WINTER STORM MAR BECAUSE OF ICING THAT TOOK PLACE AC ON POWER LINES AS WELL AS ON TREES.
AND THE TREES THAT FELL INTO POWER LINES CAUSED A LOT OF OUTAGES.
AND SO THE MAJORITY OF, UH, THE IMPACT, UH, FROM THAT EVENT WAS BECAUSE OF THE ICING.
ONE OF THE THINGS I WANNA CALL OUT IS A MUCH, I THINK, IMPROVED COMMUNICATION, UH, OUTCOME DURING THAT STORM ERCOT AS WELL AS THE MEDIA DID A, I THINK A VERY GOOD JOB AND, AND WITH THE PUC IN SUPPORT AS WELL, EXPLAINING WHAT WAS THE UNDERLYING DRIVERS OF WHAT WAS HAPPENING ON THE GRID AND WHY OUTAGES WERE OCCURRING.
AND I THINK IT WAS CLEAR TO CONSUMERS THROUGH BOTH OF THESE EVENTS, WHAT WAS HAPPENING WITH THE GRID AND WHAT WAS HAPPENING IN TERMS OF LOCAL OUTAGES AND WHAT WAS CAUSING THEM.
AND I THINK THAT IMPROVED COMMUNICATION IS SOMETHING THAT, UM, IS GONNA CONTINUE TO BE A FOCUS FOR US SO THAT AS WE MOVE FORWARD AND FUTURE EVENTS HAPPEN, WE'LL HAVE THE BENEFIT OF HAVING BOTH THE MEDIA WORKING ALONGSIDE OF THE P U C AND ERCOT TO KEEP, UH, TEXANS INFORMED AS TO WHAT'S ACTUALLY HAPPENING ON THE GRID.
DURING THE, UM, DURING THE EVENT, WE SAW AN INCREDIBLE AMOUNT OF, UH, INTEREST IN OUR WEBSITE AND IN THE INFORMATION THAT WE'RE STARTING TO PUT FORWARD, MORE THAN 258,000 PEOPLE VIEWED VARIOUS DASHBOARDS ACROSS 770,000 UNIQUE EVENTS DURING, UH, THESE EVENTS.
THAT'S, UH, THAT'S A PRETTY SIGNIFICANT, UH, PERFORMANCE FOR OUR, OUR WEBSITE.
[00:10:01]
MORE INFORMATION ON, ON OUR WEBSITE.AND YOU CAN SEE, YOU KNOW, WE'RE COMMUNICATING MORE VIA FACEBOOK.
WE'RE COMMUNICATING VIA TWITTER.
UH, WE'RE REALLY TRYING TO, YOU KNOW, FIND EVERY CHANNEL THAT WE CAN UTILIZE TO HELP KEEP PEOPLE INFORMED AS TO AS TO WHAT'S HAPPENING.
A BIG FOCUS FOR US CONTINUES TO BE TO IMPROVE OUR COMMUNICATIONS, BE CLEAR, BE TRANSPARENT, HELP PEOPLE UNDERSTAND WHAT'S HAPPENING ON THE GRID, AND WITH THE DIFFERENCES BETWEEN WHAT'S HAPPENING ON THE GRID THAT WE'RE MANAGING VERSUS WHAT COULD BE HAPPENING LOCALLY ON THE LOCAL DISTRIBUTION SYSTEM.
ONE OF THE NEW TOOLS THAT WE JUST RECENTLY ROLLED OUT IS A NEW SIX DAY SUPPLY AND DEMAND FORECAST DASHBOARD.
AND SO WE'RE CONTINUING TO LOOK FOR WAYS TO IMPROVE, YOU KNOW, HOW WE CAN COMMUNICATE WHAT'S HAPPENING.
AND THIS IS A VIEW, IT'S ACTUALLY NOT THAT SIMILAR TO ONE THAT I WAKE UP EVERY DAY AND LOOK AT EVERY MORNING.
I'VE GOT A VIEW THAT IS, UH, THAT VERY MUCH LIKE THIS.
IT TAKES A LOOK AT WHAT WE CAN EXPECT OVER THE NEXT WEEK IN TERMS OF THE DEMAND FOR ENERGY, WHAT WE EXPECT IN TERMS OF THE AVAILABLE SUPPLIES FOR ENERGY.
AND AS THE THOSE LINES GET CLOSER, THAT'S WHEN WE HAVE TIGHTER RESERVE MARGINS AND WE'RE AT, UH, TIMES OF TIGHTER PEAKS.
AND SO THIS IS SOMETHING THAT WE WANT TEXANS TO BE AWARE OF BECAUSE WE KNOW THAT WITH MORE INFORMATION, THEY CAN MAKE, UH, DECISIONS.
YOU OFTEN MAKE DECISIONS ABOUT HOW YOU WANNA CONSUME ENERGY AT TIMES WHEN THINGS ARE TIGHT OR, OR THINGS ARE GONNA BE MORE DIFFICULT ON THE GRID.
THIS RELEASE FOLLOWS A RELEASE THAT WE DID A COUPLE OF MONTHS AGO, WHICH WAS THE FUEL MIX DASHBOARD, WHICH WE RELEASED IN DECEMBER.
THAT'S PROBABLY HAD THE MOST POSITIVE FEEDBACK OF ANY NEW CHANGE WE'VE PUT ON THE ERCOT WEBSITE.
IT IS GETTING LOOKED AT AND COMMENTED ON BY MEDIA AND STAKEHOLDERS ACROSS THE STATE AND OUTSIDE THE STATE ON A REGULAR BASIS.
AND ESSENTIALLY WE'RE PUBLISHING WHAT TYPE OF FUEL IS RUNNING THE GRID AT EVERY GIVEN MOMENT OF THE DAY.
AND SO YOU CAN SEE HOW MUCH WIND AND SOLAR AND NATURAL GAS AND COAL AND NUCLEAR IS CONTRIBUTING TO THE POWER SYSTEM AT ANY GIVEN TIME, AND HOW THAT CHANGES OVER THE COURSE OF THE DAY.
AND IT'S VERY INFORMATIVE AND INSTRUCTIVE TO HELP UNDERSTAND KIND OF WHERE SOME OF THE CHALLENGES ARE THAT WE'RE WORK WORKING TO DEAL WITH BECAUSE OF THE DIFFERENT RESOURCE MIX THAT WE'RE, THAT WE'RE DEALING WITH IN OUR OPERATIONS.
SO I WANNA TALK A LITTLE BIT ABOUT THE MARKET PHASE TWO REDESIGN AND WHERE WE ARE HEADED.
THERE, THERE ARE CONVERSATIONS ACROSS EVERY CORNER OF THE CAPITAL RIGHT NOW ACROSS ALL OF THE INDUSTRY AS TO REALLY WHAT'S HAPPENING IN THE GRID, UH, AND WHAT'S HAPPENING WITH THE, IN TERMS OF THE, THE MARKET REDESIGN AND, AND WHAT'S NECESSARY.
AND I WANT, I WANNA JUMP AHEAD FIRST TO, TO THIS SLIDE, TO, TO EXPLAIN A LITTLE BIT OF THE BACKGROUND TO WHY I THINK THIS MARKET REDESIGN IS SO IMPORTANT AND, AND WHY THE WORK THAT'S TAKING PLACE AT THE LEGISLATURE IS SO CRITICAL FOR TEXANS RIGHT NOW.
THIS SHOWS A PICTURE OF, OF A LONG-TERM RESOURCE ADEQUACY ISSUE.
WHAT I, WHAT I WANNA START WITH IS, IS THERE'S ESSENTIALLY TWO PROBLEMS THAT WE'RE TRYING TO SOLVE WHEN IT COMES TO THIS MARKET REDESIGN.
THE FIRST PROBLEM IS ONE THAT WE REFER TO AS AN OPERATIONAL FLEXIBILITY CHALLENGE.
AND THAT IS THE CHALLENGE THAT EXISTS BECAUSE AS WE SEE A LARGER INCREASE OF OUR ENERGY BEING DELIVERED FROM RENEWABLES, THE POTENTIAL FOR SWINGS IN THE AVAILABILITY OF RENEWABLES ON ANY GIVEN DAY CREATES OPERATIONAL RISKS TO THE GRID.
AND WHEN WIND AND SOLAR RAMP UP AND DOWN, AND IF THEY RAMP UP AND DOWN DIFFERENTLY THAN WHAT WE FORECASTED, WHICH HAPPENS SOMETIMES, THEN THERE HAS TO BE AVAILABLE STUDIES SUPPLIED TO CLOSE THAT GAP IMMEDIATELY.
AND THE MORE ENERGY THAT WE CARRY WITH RENEWABLES AS THE FLEET OF RENEWABLES HAS BEEN GROWING MEANINGFULLY ACROSS THE STATE OF TEXAS, THE RISK ASSOCIATED WITH THOSE REAL-TIME OPERATIONS GROWS AT THE SAME TIME.
AND SO WE NEED TO HAVE SOLUTIONS TO BE ABLE TO SUPPORT THE GRID DURING THOSE RAPID CHANGES IN THE SUPPLY RESOURCES THAT ARE SERVING ENERGY.
NOW WE HAVE TOOLS TODAY TO DO THAT.
ONE OF THE CORE TOOLS THAT WE HAVE IN OUR MARKET IS CALLED ANCILLARY SERVICES.
AND ANCILLARY SERVICES ARE ESSENTIALLY GENERATION RESOURCES THAT WE HAVE PROCURED AND WE KEEP ON STANDBY, READY TO UTILIZE.
IN THE CASE OF SOMETHING CHANGING IN THE OPERATIONAL NEEDS OF THE GIVEN OF, UH, ANY GIVEN HOUR, WE HAVE ONE TOOL TODAY CALLED NONS SPIN, WHICH IS A PRODUCT THAT HAS TO BE ABLE TO RAMP UP IN 30 MINUTES AND BE ABLE TO RUN FOR ABOUT FOUR HOURS TO HELP SUPPORT A CHANGE IN THE FORECAST THAT'S NEEDED.
AND WE'RE INTRODUCING A BRAND NEW TOOL THIS SUMMER CALLED ERCOT CONTINGENCY RESERVE SERVICE, OR ECR S IT'S REFERRED TO.
THAT ONE HAS A FASTER PERFORMING CARE, UH, PROFILE.
IT NEEDS TO BE ABLE TO RAMP UP IN 10 MINUTES AND IT NEEDS TO BE ABLE TO OPERATE FOR TWO HOURS.
SO IT'S A MORE FLEXIBLE TOOL THAT CAN MOVE MORE QUICKLY AND IS MORE RESPONSIVE TO THE DYNAMIC NATURE OF THE CHANGES THAT ARE COMING ONTO OUR GRID BECAUSE OF THE AMOUNT OF RENEWABLES THAT ARE SERVING ENERGY.
SO WE HAVE TOOLS TODAY TO DEAL WITH THE OPERATIONAL FLEXIBILITY AND I THINK WE NEED TO LET THOSE TOOLS START TO WORK.
WE HAVEN'T YET LAUNCHED C R S, SO ONCE THAT TOOL STARTS WORKING, WE'RE GONNA SEE HOW
[00:15:01]
DOES THAT IN COMBINATION WITH THE NONS SPIN AND OUR OTHER ANCILLARY SERVICES SUPPORT THE OPERATIONAL FLEXIBILITY NEEDS OF THE GRID.SO I THINK WE'VE GOT A PATHWAY TO ADDRESS THAT AND WE'RE MAKING CHANGES TO BE ABLE TO ADDRESS THAT NEED.
THE SECOND PROBLEM THAT'S OUT THERE IS THE PROBLEM THAT'S ILLUSTRATED ON THIS SLIDE.
IT'S A LONG-TERM RESOURCE ADVOCACY ISSUE.
AND I WANT TO SHOW HERE KIND OF AN IMPORTANT PART OF THIS GRAPH AND I THINK IS GONNA BE ILLUSTRATIVE TO, UH, TO HELP MAKE THIS POINT.
SO WHAT I'M POINTING OUT HERE, THIS RED LINE IS THE DEMAND CURVE FOR HOW MUCH DEMAND.
THIS IS ESSENTIALLY THE PEAK DEMAND IN THE STATE OF TEXAS ACROSS EACH YEAR, STARTING IN THE YEAR 2000.
AND YOU CAN SEE IT'S STEADILY GROWING.
AND THIS IS FOR THE SUMMER, BY THE WAY.
I'M SHOWING A PICTURE OF THE SUMMER.
THERE'S A PICTURE OF THE WINTER THAT WOULD LOOK DIFFERENT BECAUSE THE PEAKS IN THE SUMMER AND THE WINTER OBVIOUSLY ARE DIFFERENT.
AND AS THIS HAS GROWN, WE'RE GETTING TO A PLACE WHERE IT CROSSES OUT OF THIS GRAY KIND OF, UH, UH, SECTION HERE AT THE BOTTOM.
THIS GRAY SECTION IS RE WHAT THIS REPRESENTS IS THE AMOUNT OF DISPATCHABLE GENERATION THAT EXISTS IN THE TEXAS GRID.
SO DISPATCHABLE GENERATION YOU CAN THINK OF TRADITIONALLY AS COAL, NATURAL GAS, NUCLEAR THAT MAKES UP OUR DISPATCHABLE GENERATION FLEET.
AND WHAT YOU SEE IS KIND OF A STEADY, KIND OF A STEADY LEVEL OF DISPATCHABLE GENERATION AND THIS LARGE KIND OF CUSHION HERE THAT HAS EXISTED ABOVE THE DEMAND, UH, OVER THE COURSE OF MANY, MANY YEARS.
WE ARE NOW AT A POINT HERE, AS YOU LOOK DOWN HERE IN 20 22, 20 23, AND YOU MOVE UP, YOU SEE THIS DEMAND LINE IS NOW MOVING INTO THE COLORED SECTION OF GREEN.
AND SO WHAT WE'RE BUILDING ON TOP OF HERE, GREEN SHOWS HOW MUCH WIND HAS BEEN DEVELOPED IN TEXAS OVER THE LAST 20 YEARS.
YELLOW SHOWS HOW MUCH SOLAR HAS BEEN DEVELOPED, AND BLUE SHOWS HOW MUCH BATTERY STORAGE HAS BEEN DEVELOPED.
WE'RE NOW GETTING TO A PLACE WHERE THE PEAK DEMANDS REQUIRE THE AVAILABILITY OF RENEWABLES IN ORDER TO MEET THE ENERGY NEEDS OF TEXANS.
AND THAT'S GONNA CONTINUE TO GROW INTO THE RENEWABLE SPACE, MEANING THAT THIS GAP BELOW THE DEMAND BETWEEN THE RED LINE AND THE GRAY LINE MEANS THAT WE ARE FULLY DEPENDENT TO HAVE SOME FORM OF RENEWABLES AVAILABLE DURING THOSE TIMES.
THE REALITY IS WE CANNOT ALWAYS PREDICT AND PLAN FOR WHEN RENEWABLES WILL BE AVAILABLE.
UNFORTUNATELY, THAT'S JUST NOT PART OF THE CONTROL THAT OUR COT CAN, CAN OFFER.
SO IF WE GET TO A PERIOD OF TIME WHERE WE HAPPEN TO COINCIDE WITH BOTH A CORRELATION OF EXTREME PEAK AND VERY LOW PERFORMANCE ON RENEWABLES, THEN WE COULD BE AT AN AREA OF RISK OF SIGNIFICANT RISK.
AND THIS TREND IS JUST CONTINUING BECAUSE AS I POINT OUT IN MY TAKEAWAYS HERE, W WHY IS THIS STAIN FLAT AND, AND KIND OF CHANGING, NOT REALLY CHANGING OVER TIME? AND WHAT HAPPENED HERE? YOU CAN SEE THE TEXAS MARKET WORKED VERY EFFECTIVELY, THIS UNREGULATED MARKET IN THE FIRST EIGHT YEARS.
WE SAW A NET INCREASE OF 20,000 MEGAWATTS OF NEW THERMAL GENERATION DEVELOPED IN TEXAS FROM 2000 TO 2008.
AND THIS IS BASED ON ACTUAL DEVELOPMENT IN, YOU KNOW, HISTORICAL FROM 2008 TO 2022.
OVER THE LAST 15 YEARS, WE'VE ONLY SEEN 1,500 MEGAWATTS OF NET NEW DISPATCHABLE GENERATION BUILT.
NOW THERE'S BEEN MUCH MORE ACTUALLY BUILT BUT ALLOWS RETIRE DURING THAT SAME TIME PERIOD.
AND WHAT GETS TALKED ABOUT OFTEN WHEN WE TALK ABOUT, YOU KNOW, THE PERFORMANCE AND THE SUCCESS OF THE MARKET IS THAT, WELL THE MARKET HAS BUILT TENS OF THOUSANDS OF NEW GENER UH, DISPATCHABLE GENERATION.
EVEN IN THE LAST, YOU KNOW, 15, 20 YEARS I'VE HEARD 40,000, YOU KNOW, NEW, UH, MEGAWATTS OF GENERATION HAS BEEN BUILT.
BUT TENS OF THOUSANDS OF MEGAWATTS OF GENERATION HAVE RETIRED AT THE SAME TIME.
SO THE NET INCREASE OVER THE LAST 15 YEARS, 1,500 MEGAWATTS OF NEW DISPATCHABLE AT THAT SAME TIME, MORE THAN 48,000 NET NEW MEGAWATTS OF SOLAR AND WIND WERE DEVELOPED 48,000.
SO RENEWABLES ARE, ARE OFFERING A TREMENDOUS SERVICE TO THE GRID.
THEY OFFER A LOW COST ENERGY SOURCE BECAUSE WIND AND SUN ARE FREE.
IT IS GROWING AND HAS INCENTIVES.
THE FEDERAL GOVERNMENT IS INCENTIVIZING THEM TO DEVELOP ACROSS THE COUNTRY.
AND AS PART OF THAT, TEXAS HAS SEEN VERY SIGNIFICANT DEVELOPMENT OF RENEWABLES, WHICH IS HELPFUL IN SERVING ENERGY ON, ON A LOT OF SCENARIOS.
HOWEVER, THERE'S A CHALLENGE IN THE MARKET DESIGN.
THE WAY THE MARKET IS DESIGNED IS THAT IT ALLOWS FOR ESSENTIALLY THE ZERO COST OF THOSE RENEWABLES TO SUPPRESS PRICING IN THE OVERALL MARKET.
AND THAT'S JUST A MARKET DESIGN ISSUE.
IT'S NOTHING, THERE'S NO FUNDAMENTAL ISSUE WITH RENEWABLES THEMSELVES.
A RENEWABLE RESOURCES ARE PROVIDING ENERGY AND THEY DO IT IN A CLEAN FA FASHION AND THEY DO IT AT A LOW COST, BUT THEY SUPPRESS PRICING IN THE CURRENT MARKET DESIGN.
AND SO WHAT THAT HAS DONE IS IT'S MADE IT VERY DIFFICULT FOR DISPATCHABLE GENERATORS WHICH HAVE TO RECOVER A MORE SIGNIFICANT COST PROFILE WHEN THEY BUILD THOSE LARGE POWER PLANTS AND THEY DON'T HAVE ANY FEDERAL SUBSIDIES TO HELP THEM DO THAT.
IT MAKES IT DIFFICULT FOR THEM TO MAKE INVESTMENTS IN THE STATE.
AND WE SEE THE EVIDENCE OF THAT 15 YEARS A NET INCREASE OF 1,500 MEGAWATTS.
AND SO WE HAVE TO DO SOMETHING ABOUT THE MARKET DESIGN BECAUSE WE WANT TO CONTINUE TO AVAIL OURSELVES OF THE BENEFITS THAT RENEWABLES OFFERS,
[00:20:01]
BUT WE HAVE TO FIX THE MARKET SO THAT WE CONTINUE TO SUPPORT THE LONG-TERM RELIABILITY OF THE GRID AND, AND, AND CAN LOOK TO THE FUTURE AND FEEL CONFIDENT THAT IT'LL ALWAYS BE ABLE TO MEET THE NEEDS OF TEXANS REGARDLESS OF WHAT'S HAPPENING WITH THE WEATHER.AND SO THAT'S WHY THIS IS SUCH A FUNDAMENTAL ISSUE.
COMMISSIONER AND PABLO, THIS IS A GREAT SLIDE.
THANK YOU SO MUCH FOR LAYING THIS OUT.
I GUESS A COUPLE OF QUESTIONS ON, ON YOUR, UM, GRAPH ON THE LEFT, WHAT, WHAT PEAK DEMAND ARE YOU ASSUMING? I CAN'T SEE READ VERY FAR, UM, RIGHT NOW, UM, ON YOUR SLIDE, BUT WHAT PEAK DEMAND ARE YOU ASSUMING FOR, UM, THE HIGH RIGHT HERE ON THE FAR RIGHT, I GUESS OVER HERE IN THIS SECTION? YES.
SO THESE ARE THE YEARLY PEAK DEMANDS IN THE SUMMER FOR THE GRID LOOKING ACROSS A FULL YEAR.
SO IT'S THE SINGULAR TOP PEAK NUMBER THAT WE'VE SEEN ON THE TEXAS GRID.
AND THEN GOING FORWARD, WE'RE USING OUR CDR INFORMATION IN ORDER TO FORECAST WHAT WE EXPECT THE PEAK DEMANDS TO GROW TO.
AND THEN THESE BECOME THE BASELINE INFORMATION THAT WE TALK ABOUT WHEN WE DO OUR SARAH REPORTS, WHAT WE EXPECT A PIECE TO BE IN THE SPRING, THE SUMMER, THE WINTER.
EVERY TIME WE RELEASE THOSE, WE FORECAST A PEAK FOR THAT SEASON.
WE'RE USING THAT SIMILAR METHODOLOGY TO FORECAST THESE PEAKS GOING OVER THE NEXT FEW YEARS.
UM, MY SECOND QUESTION ON YOUR RIGHT, UM, BLUE CHART, THE NET 1500 MEGAWATTS OF NET NEW DISPATCHABLE THERMAL GENERATION YES.
DOES THAT INCLUDE THE THOUSANDS OF MEGAWATTS THAT WERE RETIRED AS A RESULT OF THE EPA REGULATIONS THAT WOULD ALL IN OLD GAS TEAM? YEAH, IT WOULD, IT WOULD INCLUDE ALL OF THE RETIREMENTS THAT TOOK PLACE DURING THAT TIME PERIOD ASKING FUTURE ONE.
AND SO, UM, YOU KNOW, GOING BACK IN TIME, IT, IT FEELS LIKE, YOU KNOW, BACK THEN THE EPA HAD THE CLEAN AIR ACT AND VARIETY OF REGULATIONS THAT CAME OUT THAT CAUSED COAL AND OLD GAS STEAM GENERATION TO RETIRE THOUSANDS OF MEGAWATTS IN ACOT AND, AND THOUSANDS OF MEGAWATTS NATIONALLY.
AND SO I THINK, YOU KNOW, I I SPENT SOME TIME LOOKING AT THAT, AN E THREE S REPORT, AND I THINK YOU WOULD EVEN, YOU KNOW, IN A GAS RICH, UH, MARKET CAPACITY RICH MARKET LIKE PJM, THEY WOULD ONLY HAVE A NET ONE GIGAWATT, UH, IF YOU TOOK OUT THE COAL AND GAS OLD GAS THEME UNITS, THE RETIREMENT.
SO, YOU KNOW, I I I THINK THOSE ARE REGULATORY DRIVEN ACTIONS.
I'M, I'M NOT SURE IF I WOULD CLASSIFY 'EM AS MARKET DESIGN DRIVEN ACTIONS, BUT I THINK IT'S IMPORTANT TO JUST KIND OF TAKE INTO CONSIDERATION THAT THE 1500 NET DISPATCHABLE THERMO GENERATION IS, INCLUDES THOSE, THOSE SIGNIFICANT AMOUNT OF RETIREMENTS THAT RESULTED FROM EPA REGULATIONS THAT HAPPEN IN TEXAS AND AND NATIONALLY.
WELL, AND, AND I THINK THERE'S A, THERE'S A, A GOOD DATA POINT THAT SUPPORTS THAT I THINK WE'RE HAVING THIS CHALLENGE NOT ONLY IN TEXAS BUT ACROSS THE COUNTRY IN PJM AND MY O SBP, ALL OF THEM I THINK ARE DEALING WITH THIS.
BUT, UH, FOR 2023, THE EIA, WHICH IS THE ENERGY INFORMATION ADMINISTRATION, THEY PUBLISHED THEIR FORECAST FOR WHAT'S GONNA HAPPEN THIS YEAR IN TERMS OF NEW GENERATION THAT'LL BE BUILT IN GENERATION THAT'LL BE RETIRED.
THEY HAVE FORECASTED ABOUT 55,000 MEGAWATTS, 55 GIGAWATTS OF NEW GENERATION WILL BE BUILT ACROSS THE UNITED STATES.
OF THAT 55,000, ABOUT 9,700 MEGAWATTS ARE DISPATCHABLE GENERATION COMBINATION OF NATURAL GAS AND THEN THE NEW, UH, VOG UNITS THAT ARE COMING ONLINE NUCLEAR UNITS, UM, IN THE, UH, SOUTHERN COMPANY, UH, REGION AT THE SAME TIME IN 2023, THEY'RE FORECASTING A RETIREMENT OF ABOUT 15,000 MEGAWATTS OF GENERATION, ALL OF IT DISPATCHABLE GENERATION.
AND SO THE UNITED STATES HAS SEEN A NET DECREASE OF OVER 5,000 MEGAWATTS OF DISPATCHABLE GENERATION IN 2023 ALONE.
SO WE'RE SEEING THIS ISSUE HAPPENING TODAY, WE'RE SEEING THAT HAPPEN IN TEXAS.
WE'RE SEEING IT HAPPEN IN ALL OVER THE COUNTRY.
AND I THINK THE FUNDAMENTAL ISSUE THAT ALL MARKETS ARE DEALING WITH IS THERE ARE SIGNIFICANT SUBSIDIES AND INCENTIVES FOR DEVELOPING LOWER COST RENEWABLE RESOURCES.
THEY'RE PROVIDING BENEFITS INTO THE REGIONS THAT THEY'RE SERVING, BUT IN MARKET DESIGNS THERE THAT HAVE NOT ANTICIPATED THOSE COST IMPACTS FROM, UH, HAVING THAT, THAT, UH, SUBSIDIZED RESOURCE TO COMPETE WITH HAS MADE IT VERY DIFFICULT FOR DISPATCHABLE GENERATION TO BE BUILT IN ANY PART OF THE COUNTRY.
AND TEXAS IS EXPERIENCING THAT ISSUE TOO.
PABLO, JUST FOR CLARIFICATION, I WOULD SAY THAT THE, WHAT DROVE MORE COAL RETIREMENTS THAN ANYTHING ELSE IN THIS COUNTRY IS NATURAL GAS.
YOU THINK ABOUT PGM, YOU'RE BUYING MARCELLUS GAS AT 95 CENTS OR A DOLLAR WITH A HEAT RATE OF 8,000.
YOU KNOW, THAT'S, THAT'S, YOU KNOW, MEGAWATT HOUR, RIGHT? COAL PLANT NEEDS OVER $20 A MEGAWATT HOUR JUST TO BREAK EVEN.
SO THE MOST DEVASTATING IMPACT TO COAL WAS FRACKING.
AND THAT, THAT THE ECONOMICS HAVE ALWAYS DRIVEN THE MARKET DYNAMICS AROUND THE COUNTRY.
AND, UH, NA LOW, THE LOAN NATURAL GAS PRICING WAS THE, UH, END OF, UH, THE POTENTIAL FOR COAL DEVELOPMENT.
AND, UH, WE'RE SEEING THE SAME DYNAMIC IN PLAY WITH SUBSIDIZED RENEWABLES PROVIDING A LOT OF PRESSURE ON THE NATURAL
[00:25:01]
GAS FLEET.SO ECONOMIC DYNAMICS DRIVE WHAT GETS BUILT IN IN MARKETS.
AND SO YOU HAVE TO TAKE THOSE ECONOMIC FORCES AND THEN LOOK AT RELIABILITY REQUIREMENTS AND FIND AN INTERSECTION BETWEEN THE TWO IN A DESIGN FOR A MARKET.
THAT'S THE TRICK THAT WE'RE TRYING TO WORK THROUGH.
THAT'S THE CHALLENGE THAT WE'RE TRYING TO WORK THROUGH AND THAT EVERY MARKET IN THE COUNTRY IS TRYING TO WORK THROUGH TODAY.
HOW DO YOU MARRY THE ECONOMICS THAT ARE OUT THERE WITH THE RELIABILITY NEEDS OF CONSUMERS IN A WAY THAT MAKES SENSE.
SO WITH THAT, I WANNA GO BACK TO THE PRIOR SLIDE AND TALK A LITTLE BIT ABOUT THIS PERFORMANCE CREDIT MECHANISM.
HEY, PABLO, BEFORE, BEFORE YOU DO ON, ON THAT VERY GOOD SLIDE, JUST FOR THE PUCS PURPOSES, CUZ THIS IS EXCELLENT.
UM, A AS WE START TO TALK ABOUT RELIABILITY STANDARD AND THE OVERALL GOAL THAT WE'RE TRYING TO SHOOT FOR, ESPECIALLY WITH THE PCM, THE DURATION OF THE EVENTS IS, IS ALSO GONNA START TO BECOME A, A KEY QUESTION THAT WE'LL HAVE TO ADDRESS.
AND SO FOR THE BATTERY COLUMN, WHICH IS A NEW COLUMN WHICH WILL BE ADDRESSED IN THE CDR AND NOW THE THE UPCOMING S WE'RE STARTING TO SEE THE INTERPLAY OF BATTERIES IN THE MARKET THAT'S RIGHT AS THEY PLAY IN ANCILLARIES, BUT ALSO THE ENERGY, UH, MARKET COULD WE GET A BREAKOUT OF IN TERMS OF COLORS OF THE ONE TWO HOUR AND THEN ULTIMATELY FOUR HOUR BATTERIES AS THEY'RE COMING IN SO THAT THE BOARD AND THE PUC KNOWS ON WHAT OUR MAXIMUM COVERAGE IS IN TERMS OF THAT DISPATCHABLE RESOURCE AND THEN WHEN IT ULTIMATELY DISCHARGES AND RUNS OUT.
YEAH, THAT'S A, THAT'S A REALLY GOOD POINT.
COMMISSIONER AND, AND BATTERIES INTRODUCE A WHOLE NEW TECHNOLOGY AND CAPABILITY TO GRIDS TODAY THAT HAVE NOT REALLY BEEN, UM, AVAILABLE BEFORE AND THEY'RE NOW BECOMING COST EFFECTIVE.
UM, AND, AND WE HAVE TO START TALKING ABOUT MEGAWATTS IN PERFORMANCE WITH A NEW, WITH A NEW TERM MEGAWATT HOURS, MEGAWATT HOURS IS THE AMOUNT OF ENERGY THAT'S ACTUALLY BEING PUT INTO THE GRID IN A, IN A DIFFERENT MEASURE, NOT AT JUST A A PEAK POINT AT A POINT IN TIME, BUT OVER TIME.
AND THAT'S A REALLY IMPORTANT MEASURE WHEN YOU START FACTORING IN BATTERIES BECAUSE OTHER RESOURCES, TYPICALLY YOU LOOK AT THE CAPACITY THAT THEY CAN OFFER AND HOW THEY MEET THE PEAKS BATTERIES YOU HAVE TO PLAN WHEN YOU USE THEM IN THE RIGHT WAY IN ORDER TO OPTIMIZE THEIR EFFECTIVENESS IN MANAGING THE RELIABILITY FOR THE GRID.
SO THAT'S AN EXCELLENT POINT, COMMISSIONER, THAT WE'LL LOOK FOR WAYS TO REPRESENT, UH, THESE TYPES OF VIEWS TO GIVE YOU POINTS IN TIME IN TERMS OF MEGAWATT HOURS THAT ARE AVAILABLE TO SERVE LOAD DURING THOSE TIMES.
I, I WOULD SAY ONE OTHER THING, WHICH IS THE DEMAND SIDE, WHICH IS OBVIOUSLY THE OTHER PART OF THIS, UH, SUPPLY DEMAND EQUATION, WHICH IS, UM, HOW ARE WE TRYING TO GROW THE DEMAND SIDE, UH, IN A WAY THAT WE CAN UNDERSTAND IT TO AFFECT BOTH PRICES AND AND DEMAND OF ELECTRICITY.
AND, AND WE SHOULD BE LOOKING AT DEMAND IN THE SAME WAY AS WE LOOK AT SUPPLY.
IT HAS THE POTENTIAL TO TAKE THIS RIGHT HERE AND WE CAN MAYBE REPRESENT THAT WITH KIND OF A GROWING SHADE BELOW THE DEMAND CURVE TO SAY THE POTENTIAL TO REDUCE THOSE PEAKS IN THE FUTURE BASED ON A GROWING DEMAND RESPONSE CAPABILITY.
CAN YOU ALSO CONVERT THIS DATA TO, UM, SHOW THE MEGAWATT RESOURCE VALUE VERSUS WINTER PEAK LOAD? YES, WE HAVE A CHART.
IT'S EXACTLY LIKE THIS FOR WINTER PEAK LOAD AS WELL.
JUST WANTED TO USE THIS ILLUSTRATIVELY FOR THE POINT AROUND TWO PROBLEMS WE'RE TRYING TO SOLVE WITH THIS MARKET REDESIGN.
YOU KNOW, THE OPERATIONAL FLEXIBILITY AS WELL AS THE LONG-TERM RESOURCE ADEQUACY.
AND JUST WANNA MAKE IT VERY CLEAR, THERE IS A LONG-TERM RESOURCE ADEQUACY ISSUE IN THE TEXAS MARKET.
IT HAS TO BE ADDRESSED, IT'S URGENT TO BE ADDRESSED.
AND THE WORK THAT THE LEGISLATURE IS DEALING WITH TODAY IS SO CRITICAL IN DEALING WITH THAT, UH, THAT CRITICAL AND CONSEQUENTIAL ISSUE GOING FORWARD.
SO THE PERFORMANCE CREDIT MECHANISM, I'M NOT GONNA SPEND A LOT OF TIME DELVING INTO DETAILS, BUT WANNA JUST KIND OF, YOU KNOW, TALK A LITTLE BIT ABOUT THE OVERALL STRUCTURE DOWN HERE AT THE BOTTOM, AS YOU SEE, THE CURRENT TEXAS MARKET HAS TWO CORE COMPONENTS, ENERGY SERVICES AND ANCILLARY SERVICES.
I'VE TALKED ABOUT BOTH OF THOSE.
THE RESOURCES THAT PROVIDE POWER TODAY, THEY GET PAID ONLY WHEN THEY DISPATCH INTO THE ENERGY MARKET AND WHEN THEY'RE ACTUALLY SERVING ENERGY, WHEN THEY'RE NOT BEING DISPATCHED FOR WHATEVER REASON.
BECAUSE WE, WE ALWAYS WILL DISPATCH THE LOWEST COST ENERGY BEFORE HIGHER COST ENERGY.
SO THERE ARE POINTS IN TIME WHEN MANY RESOURCES ARE SITTING ON THE SIDELINE BECAUSE ECONOMICALLY THEY ARE NOT AT THE RIGHT PRICE IN ORDER TO DISPATCH AT THAT POINT IN TIME.
AND SO THEY ONLY EARN IN THE ENERGY MARKET WHEN THEY'RE ACTUALLY PRODUCING ENERGY AND SELLING AND THEY DON'T GET PAID FOR HAVING THE POTENTIAL TO DO SO.
AND THEN ANCILLARY SERVICES ARE THOSE RESOURCES WE KEEP ON THE SIDE IN ORDER TO MAKE SURE IF THERE'S A PROBLEM, WE CAN MAKE SURE FILL IN THOSE PROBLEMS AND GAPS WITH, WITH RESOURCES.
SO WE HAVE THOSE TWO COMPONENTS IN THE TEXAS MARKET.
OTHER MARKETS ARE, THE COUNTRY OFTEN HAVE A THIRD COMPONENT AND IT'S CALLED A CAPACITY MARKET.
AND THAT CAPACITY MARKET IS INTENDING TO PAY GENERATORS IN ORDER TO HAVE CAPACITY AVAILABLE TO SERVE ENERGY WHEN IT'S NEEDED DURING THOSE PEAK PERIODS.
AND SO WHAT WE'RE TALKING ABOUT HERE IS, IS ESSENTIALLY TRYING TO CLOSE THE GAP THAT, THAT WE TALKED, THAT WE SHOWED ON THE, ON THE NEXT SLIDE AND WHAT WE, WE WANNA DO IT HERE IN TEXAS A LITTLE DIFFERENTLY.
WE WANT TO HAVE IT IN STRUCTURED A WAY WHERE WE DON'T JUST PAY, UM, A COMPANY OR GENERATOR TO HAVE A RESOURCE AVAILABLE AND HAVE POTENTIAL TO DELIVER, BUT WE WANNA PAY THEM TO HAVE THAT RESOURCE AND TO PERFORM WHEN THE GRID NEEDS AT MOST.
[00:30:01]
A PERFORMANCE MARKET AND IT ADDS A NEW REVENUE STREAM THAT'S SEPARATE FROM THE ENERGY MARKET.IT'S SEPARATE FROM THE ANCILLARY SERVICES MARKET AND IT'S SPECIFICALLY CREATED TO INCENTIVIZE GENERATORS THAT HAVE AN ON OR OFF SWITCH THAT CAN PERFORM WHEN NEEDED AND CAN DO SO WHEN THE GRID IS TIGHTEST.
SO IT ONLY WILL PAY FOR GENERATORS WHEN THEY ARE PERFORMING AT THOSE TITUS MOMENTS.
THAT NEW REVENUE STREAM CAN CREATE A CONSISTENT PLANTABLE AND FORECASTABLE REVENUE STREAM THAT WOULD ENABLE THE GROWTH OF NEW AND NEW INVESTMENT IN DISPATCHABLE GENERATION.
WHAT WE SAW IN THE EARLY PERIODS OF THE MARKET WAS SIGNALS THAT GENERATORS COULD PLAN AROUND AND THEY COULD BUILD NEW POWER PLANTS BECAUSE THEY SAW THOSE SIGNALS.
AND WE SAW 20,000 NET NEW MEGAWATTS BUILT DURING THE TIME WHEN THE MARKET FUNCTIONED WITHOUT ANY OTHER DISTORTIONS.
BY INTRODUCING A NEW PLANTABLE REVENUE STREAM THAT GENERATORS CAN PLAN AROUND, WE'RE GONNA, WE'RE GONNA BRING A NEW ELEMENT TO THE MARKET THAT WILL ENABLE THE MARKET TO WORK AND ENABLE THE MARKET TO DELIVER THE RESOURCES THAT ARE NEEDED TO MEET THESE REQUIREMENTS.
NOW THE COST ESTIMATES FOR THIS ARE A SMALL MODEST COST INCREASE, TWO TO 3%, UH, AVERAGE 460 MILLION A YEAR, TWO TO 3% ON, ON A CUSTOMER'S BILL, WHICH I THINK IS A REASONABLE INVESTMENT IN ORDER TO SHORE UP WHAT IS A SIGNIFICANT RISK TO THE ENERGY MARKET OVERALL.
WE ESTIMATE IT'LL TAKE BETWEEN TWO AND FOUR YEARS TO IMPLEMENT IT.
AND SO THE TIMING AND THE CRITICALITY OF MAKING DECISIONS TODAY DURING THIS SESSION THIS YEAR ARE REALLY IMPORTANT IN ORDER TO GET MOVING AND TO PROGRESS TOWARDS GETTING THIS MARKET REDESIGN IN PLACE.
WHAT'S AHEAD FOR THIS IS, UM, WE'RE LOOKING TO WORK, CONTINUE TO WORK WITH THE LEGISLATURE AND TO DEBATE THE VARIOUS ALTERNATIVES ON HOW WE CAN MEET BOTH THE OPERATIONAL FLEXIBILITY AND THE LONG-TERM RESOURCE ADEQUACY NEEDS.
WE ARE CONSIDERING BRIDGING SOLUTIONS, AS I NOTED IT'LL TAKE TWO TO FOUR YEARS TO DEVELOP A FULL LONG-TERM MARKET REDESIGN PRODUCT.
AND SO WE WANNA LOOK AT WHAT OPTIONS CAN WE DO TODAY TO CONTINUE TO OPERATE THE GRID AS RELIABLY AS WE HAVE BEEN, AND WHAT CAN WE DO TO TRY TO SEND SIGNALS TO THE MARKET TO POTENTIALLY START DEVELOPING RESOURCES TODAY AND WHAT SIGNALS CAN WE BE SENDING TO MAKE SURE WE PRESERVE THOSE DISPATCHABLE RESOURCES THAT ARE IN THE MARKET TODAY.
AND SO WE'LL BE TALKING MORE ABOUT THE POTENTIAL FOR BRIDGE SOLUTIONS IN OUR UPCOMING APRIL MEETING WHERE WE'LL BRING A SUITE OF OPTIONS.
WE WILL DESCRIBE WHAT WE THINK ARE THE PROS AND CONS OF THEM, WE'LL MAKE A RECOMMENDATION TO THIS BOARD AND IT'LL ASK THE BOARD THEN TO, UH, VOTE AND SUPPORT WHAT THEY BELIEVE IS THE RIGHT ANSWER FOR HOW TO MOVE FORWARD WITH BRIDGING SOLUTIONS.
WHILE THE LEGISLATURE CONTEMPLATES THE BROADER LONG-TERM MARKET REDESIGN, WE ARE, UM, ALSO, UH, AS I MENTIONED IN THE SUNSET, UH, COMMISSION PORTION OF, UH, OUR CYCLE THIS YEAR, BOTH, UH, THE P U C T AS WELL AS ERCOT IS WE ARE VERY SUPPORTIVE OF THE RECOMMENDATIONS THAT HAVE COME FORTH FROM THE, UH, SUNSET STAFF.
FUNDAMENTALLY, I THINK SOME OF THE CORE CHANGES CAN BE SUMMARIZED AS IMPROVEMENTS TO COMMUNICATION, MAKING SURE THAT WHEN WE COMMUNICATE INFORMATION AND REPORTS TO THE LEGISLATURE AND REPORTS TO STAKEHOLDERS THAT WE'RE CLEAR, WE'RE TRANSPARENT, WE TAKE OUT ENGINEERING JARGON, WE MAKE IT EASY TO UNDERSTAND WHAT ERCOT IS SAYING ABOUT THE MARKET AND THE FUTURE AND WHAT WE'RE RECOMMENDING NEEDS TO HAPPEN IN ORDER TO KEEP RELIABILITY AT THE FOREFRONT.
ALWAYS THEY'VE LOOKED TO, UH, LIKE TO SEE SOME FOCUS ON IMPROVED PERFORMANCE METRICS AND CLARITY AROUND PERFORMANCE METRICS BETWEEN THE PUC AND ERCOT AS WELL AS, UH, WE'VE SEEN RECOMMENDATIONS TO DIRECT RESOURCING AND FUNDING TO IMPROVE AREAS WHERE WE THINK WE NEED TO SHORE UP RESOURCES AND CAPABILITIES ACROSS BOTH ORGANIZATIONS.
ALL I THINK VERY REASONABLE RECOMMENDATIONS AND RECOMMENDATIONS THAT WE LOOK FORWARD TO COMPLYING WITH ONCE THE FINAL LEGISLATION HAS PASSED.
AND THEN LASTLY, I'D LIKE TO ALWAYS CLOSE WITH THANKS AND YOU KNOW, AS I NOTED, THIS YEAR HAS STARTED OUT FAST AND FURIOUS WITH A LOT OF ACTIVITY ACROSS THE BOARD.
AND WHENEVER WE HAVE, UH, EXTREME OR CHALLENGING WEATHER CONDITION, THERE ARE SO MANY PEOPLE THAT ARE INVOLVED INSIDE OF ERCOT AND ACROSS MULTITUDES OF AGENCIES AND PARTNERS ACROSS THE STATE THAT HELP TO DEAL WITH THE NEGATIVE EFFECTS FROM THOSE EVENTS.
AND WHILE MOST OF THE PEOPLE THAT ARE NOTED ON THIS, UH, THIS SHEET ARE IN OPERATIONS AND IN PUBLIC AFFAIRS, UH, WHERE THEY, WHO CLEARLY CARRIED A VERY HEAVY LOAD DURING THE RECENT WELL WEATHER EVENTS, NEARLY EVERY PART OF OUR ORGANIZATION LEANED IN TO HELP ENSURE THE 24 7 OPERATIONS THAT OCCUR AT ERCOT AND AT THE PUC WERE WELL SUPPORTED THROUGHOUT ALL OF THESE EVENTS.
AND THAT WE DID EVERYTHING WE COULD TO ENSURE THE RELIABILITY AND THAT THE GRID WAS GONNA BE SAFE AND RELIABLE FOR TEXANS.
AND SO I WANNA SAY THANK YOU TO ALL OF THESE PEOPLE.
AND I ALSO WANNA SAY THANK YOU TO THE MANY AGENCIES THAT WE WORKED WITH VERY CLOSELY DURING THAT EVENT.
AND ONE, UH, THAT IS NOT ON HERE THAT I, THAT I I OMITTED AND MISSED IS THE OFFICE OF PUBLIC UTILITY COUNCIL.
I'D LIKE TO ADD THAT TO THIS LIST AS WELL.
AND SO THE PUBLIC UTILITY COMMISSION, THE RAILROAD COMMISSION DEPARTMENT OF, UH, ENERGY OF EMERGENCY MANAGEMENT AND TURK, THE NEW, UH, COUNCIL THAT WAS PUT TOGETHER TO HELP MANAGE ENERGY RISK EVENTS ALL WORKED VERY
[00:35:01]
EFFECTIVELY DURING BOTH OF THESE STORMS. I PARTICIPATED AS WELL AS MANY ON MY TEAM AND ALL OF THESE WITH ALL OF THESE ORGANIZATIONS.AND IT'S CLEAR WE DON'T OPERATE IN A VACUUM.
WE CAN ONLY BE SUCCESSFUL TOGETHER.
ALL OF THE WORK THAT WE DO REQUIRES A VERY TIGHT PARTNERSHIP.
AND I WANNA THANK ALL OF THE AGENCIES FOR THEIR SUPPORT DURING THESE, UH, THESE EVENTS.
SO I'LL, I'LL OPEN UP TO ANY OTHER QUESTIONS, OTHERWISE I'LL SAY THANK YOU VERY MUCH FOR YOUR TIME THIS MORNING.
SO BACK TO THE, TO THE CHART THAT KIND OF CAPTURED EVERYBODY'S IMAGINATION.
UM, THE, YEAH, THAT ONE, THE, THE INCREASE IN DEMAND BEGINNING IN, UH, LOOKS LIKE IN 22 PROBABLY OR 23 RIGHT HERE IS, IS PRETTY DRAMATIC.
WHAT, WHAT'S, WHAT'S DRIVING THAT FIRST OF ALL, AND IS, IS THAT RATE OF INCREASE EXPECTED TO CONTINUE? CUZ THIS ONLY GOES OUT TWO YEARS AND, AND SO IT'S, I ASSUME THE PROBLEM IS, IS MUCH MORE STARK THAN EVEN WHAT WE'RE SEEING ON THIS CHART.
AND, AND I I WILL, I AGREE A HUNDRED PERCENT WITH THAT, WITH THAT POINT AND, AND SOMETHING THAT, UH, COMMISSIONER COBOS BROUGHT UP, YOU KNOW, LEGIS, YOU KNOW, LEGISLATION, FEDERAL LEGISLATION AROUND EPA STANDARDS EMISSIONS, THERE ARE MORE STANDARDS BEING CONSIDERED THAT WOULD CONTINUE TO HAVE AN EFFECT ON GENERATING FLEETS AROUND THE COUNTRY.
THIS DOES NOT FACTOR IN THE POTENTIAL IMPACT OF THAT LEGISLATION THAT'S OUT THERE.
THE IMPACT OF THAT LEGISLATION COULD RESULT IN THOUSANDS OF MORE MEGAWATTS BEING REDUCED FROM THE DISPATCHABLE GENERATION FLEET THAN WHAT IS FORECASTED HERE.
AND SO, TO YOUR POINT, WHAT'S DRIVING THIS, THERE'S A COUPLE THINGS THAT ARE GOING ON.
ONE OVER THE LAST COUPLE OF YEARS AND FORESEEABLE INTO THE FUTURE, TEXAS ECO, THE TEXAS ECONOMY IS EXPECTED TO CONTINUE TO GROW VERY STRONGLY.
WE ARE ADDING IN THE STATE OF TEXAS, A CITY THE SIZE OF CORPUS CHRISTI EQUIVALENT IN PEOPLE EVERY SINGLE YEAR THAT GROWTH IN PEOPLE IS BRINGING BUSINESSES.
WE'RE SEEING FORTUNE 500 HEADQUARTERS MOVE TO THE STATE OF TEXAS AT A RAPID PACE.
WE'RE SEEING DEVELOPMENT OF HIGH ENERGY USE BUSINESSES COME TO TEXAS BECAUSE OF THE STRONG ECONOMY AND THE LOW COST AND EFFICIENT AND RELIABLE MARKET THAT WE OPERATE.
ALL OF THAT IS COMPOUNDING OVER THE LAST FEW YEARS TO ACCELERATE THE GROWTH IN DEMAND.
AND THEN YOU COUPLE WITH THAT, WHAT'S HAPPENING ACROSS THE COUNTRY, ELECTRIFICATION IS CONTINUING TO OCCUR AND WE'RE SEEING A TREND IN ELECTRIC VEHICLE GROWTH.
AND WHILE TEXAS HASN'T SEEN ELECTRIC VEHICLE GROWTH AS MUCH AS SOME STATES HAVE, IT'S STILL A A GROWING PART OF THE ELECTRIC PROFILE.
AND IN THE TRANSPORTATION SECTOR HERE AND ACROSS THE BOARD, YOU KNOW, IN HOUSES AND HOMES, WE'RE SEEING ELECTRIFICATION CONTINUE TO OCCUR.
SO THE DEMAND BASED ON JUST APPLIANCES AND USE IS ALSO GROWING AT THE SAME TIME THAT THE POPULATION AND THE ECONOMY IS GROWING.
ALL OF THOSE FACTORS CONTINUE TO COMBINE.
AND THEN THE LAST LAYER IS EXTREME AND ERRATIC WEATHER EVENTS.
AND SO WHEN, SO BECAUSE THESE REPRESENT PEAKS, AND SO WHEN YOU COMBINE THE GROWTH, YOU COMBINE THE HIGHER USE AND THEN YOU COM AND YOU PUT ON TOP OF THAT AN EXTREME EVENT, YOU'RE GONNA SEE THESE PEAKS START TO MOVE HIGHER AND HIGHER AT THE RATE THAT WE'RE SEEING RIGHT HERE.
AND I THINK ALL THREE OF THOSE ARE CONTRIBUTING TO THE RATE OF INCREASE ACCELERATING AS MUCH AS IT HAS IN THE LAST FEW YEARS.
THANK YOU VERY MUCH, CHAIRMAN.
[7. Review of Winter Storm Elliott]
IS AGENDA ITEM SEVEN, WHICH IS REVIEW OF WINTER STORM ELLIOT.UH, AND SO, UH, DAN WOODFIN IS GONNA PRESENT THIS AND GIVE US EVEN MORE COLOR.
WANTED TO DO MORE OF A DEEP DIVE ON, UH, WINTER STORM.
ELLIOT, UH, PABLO GAVE YOU KIND OF AN OVERVIEW, BUT WE WANTED TO DIG INTO A FEW THINGS ON THIS, UM, BECAUSE THERE'S SOME INTERESTING LESSONS LEARNED AND WE ALWAYS WANT TO BE DOING THAT WITH WHEN WE DO HAVE A, UH, EVEN A SUCCESSFUL EVENT LIKE ELLIOT WAS.
UM, AND SO WE ISSUED A OPERATING CONDITION NOTICE OR OCN ABOUT FIVE DAYS BEFORE THE WINTER STORM.
SO THIS KIND OF GIVES YOU THE BOOK ENDS OF THE TIMEFRAME.
UH, WE HIT, HIT THE NEW TWO NEW PEAKS THAT PABLO TALKED ABOUT ON THE EVENING AND THEN THE, THE, THE MORNING AND OF THE 23RD.
AND THEN WE, UM, UH, ULTIMATELY ENDED THE WATCH ON ON CHRISTMAS.
AND SO THE, THAT WAS KIND OF THE BOOK ENDS OF THIS EVENT.
AND AS I MENTIONED, IT WAS, IT WAS A FAIRLY SUCCESSFUL EVENT, UH, FROM A, FROM A GRID PERSPECTIVE.
[00:40:02]
IT WAS ALSO ONE OF THE COLDEST EVENTS THAT WE'VE, WE'VE SEEN IN THE LAST 15 YEARS.UH, IN FACT, ONLY THE, UH, DURING URI DID WE SEE MINIMUM TEMPERATURES THAT WERE LOWER THAN WHAT WE SAW DURING, UH, DURING WINTER STORM ELLIOT.
NOW OF COURSE, MINIMUM TEMPERATURES DON'T TELL YOU THE WHOLE STORY.
IT'S ALSO A MATTER OF HOW WINDY IT IS, HOW LONG THE DURATION OF THE EVENT IS AND SO FORTH.
BUT IT'S ONE, ONE GOOD INDICATOR AND THAT THIS WAS ONE OF THE STRONGEST EVENTS THAT WE'VE SEEN.
UH, THERE WAS SOME DISCUSSION IN THE R AND M YESTERDAY ABOUT THE, OUR LOAD FORECAST AND IT WAS ABSOLUTELY TOO LOW IN THE DAYS LEADING UP TO THE EVENT.
UM, WE'VE LOOKED AT THAT, UH, TO A NAUSEOUS LEVEL OF DETAIL AND, UH, WE, UH, UH, LOOKED AT WHAT WAS REALLY GOING ON THERE.
AND THERE WERE, AND THERE WAS AS, AS MOST TIMES WHEN THERE'S SOMETHING THAT IS OFF LIKE THAT, IT'S NOT JUST ONE THING, IT'S A COMBINATION OF THINGS.
UH, AND THE COMBINATION IN THIS CASE WAS THAT THE NATIONAL WEATHER MODELS, UH, UNDERESTIMATED HOW QUICKLY AND HOW DEEP THE COLD WAS GOING TO ARRIVE IN, IN TEXAS.
UM, AND SO THAT, THAT'S ONE PIECE OF IT.
UM, ON A HOLIDAY YOU TEND TO ALL OF THE THINGS BEING EQUAL, YOU TEND TO HAVE LESS LOAD, ESPECIALLY A LONG HOLIDAY WEEKEND LIKE THIS WAS, UH, BECAUSE BUSINESSES SHUT DOWN AND THERE'S NOT AS MUCH INDUSTRIAL LOAD AND THOSE KIND OF THINGS.
UM, OUR MODELS IN COMBINATION WITH THE, SO THE SOFTWARE UPGRADE THAT WAS DONE DOUBLE COUNTED THE HOLIDAY EFFECT.
AND SO THAT ALSO LOWERED THE LOAD FROM WHAT WE WERE SEEING THAT THAT ONE'S, UH, UH, OBVIOUSLY SOMETHING THAT, THAT, THAT, UH, SHOULDN'T RECUR.
AND THEN THE THIRD THING IS JUST BECAUSE THIS WAS ONE OF THE MORE SEVERE, UM, UH, TEMPERATURE EVENTS, UM, WE DON'T GET MANY OPTIONS TO TUNE THE MODELS FOR THAT KIND OF, UM, UH, SITUATION.
AND SO WE'VE DONE, WE'RE WE'RE STARTING SEVERAL INITIATIVES TO, TO REALLY PERHAPS EVEN, I THINK WHAT THE INTENT IS TO DEVELOP A ALTERNATIVE MODEL THAT'S FOCUSED JUST ON FORECASTING THESE EXTREME COLD EVENTS.
UM, BUT KIND OF THE, THE KEY MESSAGE HERE IS THAT, UH, WE'VE, WE'VE, UH, THIS REALLY, THIS UNDER FORECASTING HAD NO IMPACT ON RELIABILITY BECAUSE PRETTY MUCH ALL THE GENERATION WAS ONLINE.
AND SO WE WERE PREPARED FOR A MUCH HIGHER LOAD THAN WHAT, UH, ACTUALLY OCCURRED.
CAUSE WE, THERE'S, AS PABLO MENTIONED, THERE'S, THERE'S SO MANY VARIABLES THAT CAN, CAN, UH, UH, CAUSE YOU TO NEED MORE GENERATION RELATIVE TO THE LOAD DURING A COLD WEATHER EVENT.
AND SO WE WERE WELL PREPARED FOR THAT IN SPITE OF THE FORECAST, THE WIND AND SOLAR FORECAST.
UH, WE USED OUR MORE CONSERVATIVE WIND AND SOLAR FORECASTS GOING INTO THE EVENT AND THOSE, UH, WERE VERY ACCURATE, UH, IN TERMS OF PREDICTING WHAT THE WIND AND SOLAR WOULD BE.
SO THERE, THERE WERE NO ISSUES THERE DURING ELLIOTT, UM, AS YOU CAN SEE HERE, SO THIS IS THE SIMILAR KIND OF CHART THAT I SHOWED TO THE R AND M YESTERDAY.
THE RED, UH, LINE IS THE LOAD THAT OCCURRED DURING THE EVENT.
THE AREA, KIND OF THE SHADED AREA DESCRIBES THE AMOUNT OF GENERATION THAT WAS AVAILABLE OF, OF DIFFERENT TYPES.
UM, AND SO YOU CAN SEE THAT ON THE EVENING OF THE MORNING OF THE 23RD AND THE EVENING OF THE, THE 23RD WERE KIND OF THE TIGHTEST TIMES.
THOSE WERE THE TIMES WHEN THE DEMAND MOST CLOSELY APPROACHED THE, UH, GENERATION LEVELS THERE.
UM, THE OTHER THING YOU CAN SEE HERE IS THAT THAT, UH, KIND OF GRAY LINE IS THE AMOUNT OF, UH, GEN, UH, THERMAL GENERATION FORCED OUTAGES THAT WERE GOING ON DURING THE EVENT.
YOU SEE THAT WE HAD SOME GOING INTO THE EVENT AND THEN THEY WENT UP SIGNIFICANTLY ON THE EVENING OF THE, OR I'M SORRY, THE OVERNIGHT I GUESS ON THE 22ND GOING INTO THE 23RD.
AND THEN THEY CAME BACK DOWN FOR THE EVENING PEAK ON THE, ON THE 23RD.
REALLY, THOSE WERE THE TWO TIGHTEST TIMES.
THE THE, EVEN THOUGH THE LOAD MAY HAVE BEEN HIGH ON THE EVENING OF THE 22ND, THERE WERE A LOT, THERE WAS A LOT OF WIND GENERATION AT THAT TIME, LESS, UH, DURING THE TWO PEAKS ON, ON THE 23RD.
AND YOU CAN SEE THAT IN THE, THE WHOLESALE MARKET PRICING.
UM, THE, UH, YOU SEE THE SPIKE THERE ON THE MORNING OF THE 23RD, AND THEN ALSO IN THE EVENING OF THE 23RD WHEN WE GOT INTO THOSE TIGHTER CONDITIONS, PRICES TEND TO GO HIGH, DRIVE MORE GENERATION TO COME ONLINE AND, AND BE AVAILABLE.
AND THAT'S, THAT'S EXACTLY WHAT WE WANNA SEE HAPPEN.
UM, HAVE ALL THE GENERATION AVAILABLE DURING, DURING THOSE CONDITIONS.
UM, THIS IS THE SAME CHART I GUESS THAT WOODY SHOWED YESTERDAY DURING HIS R AND M PRESENTATION.
SO WE SENT OUT, UH, TO ALL THOSE GENERATORS THAT WENT, UH, ON FORCED OUTAGE DURING THE EVENT.
[00:45:01]
REQUEST FOR INFORMATION TO DESCRIBE WHAT HAPPENED, UH, GIVE US INFORMATION ABOUT THAT.AND THIS IS THE RESULT OF THAT, THAT IT SHOWS, UH, THE DIFFERENT AREA CHARTS THERE SHOW THE, UH, UH, FOR WIND FOR, UH, GAS FIRE GENERATION AND FOR COAL FIRE GENERATION, UH, ALL THAT OUTAGES THAT WERE EITHER DUE TO FUEL OR TO, UH, UM, WEATHER RELATED ISSUES.
UM, AND YOU CAN SEE THAT THAT WENT UP, UH, DURING THAT EVENING AS I, AS I TALKED ABOUT.
UM, AND SO THOSE, THOSE, THAT NUMBER OF OUTAGES WEREN'T INSIGNIFICANT, UH, IT REALLY ILLUSTRATES AS, AS YOU'RE PROBABLY AWARE, THE COMMISSION PASSED UP PHASE TWO, UH, WEATHERIZATION STANDARDS, THOSE WILL GO INTO PLACE FOR THIS UPCOMING WINTER.
AND IT REALLY EMPHASIZES THE IMPORTANCE OF, OF THOSE THAT, UH, PUTTING THOSE IN PLACE.
AND AS WOODY TALKED ABOUT YESTERDAY, WE'RE OUT INVESTIGATING THE ROOT CAUSE OF ALL OF THOSE OUTAGES THAT THAT STARTED DURING, DURING THIS EVENT.
SO THESE ARE THE, THE LARGE LOADS THAT, UM, UM, A LOT OF THEM ARE BITCOIN MINERS THAT, THAT ARE PRICE SENSITIVE.
AND YOU CAN SEE THAT DEFINITELY OCCURRED DURING THIS EVENT WHEN THE PRICES WENT HIGH, WHICH IS THE, THE, THE BLUE LINE HERE.
YOU CAN SEE THAT THE USAGE, WHICH IS THE ORANGE LINE, WENT DOWN TO KIND OF A MINIMAL AMOUNT, UM, BOTH IN THE MORNING AND THE EVENING.
NOW IT STAYED HIGH DURING THE TIME PERIODS WHEN WE HAD MORE CAPACITY AVAILABLE.
THAT DEFINITELY GOT DOWN DURING THOSE, UH, HIGH PRICED PERIODS.
MI TALKED EARLIER ABOUT BATTERIES AND, AND WHAT YOU CAN SEE FROM THIS GRAPH, THE, UM, UM, THE LINE GRAPHS, I GUESS ARE THE PERCENTAGES OF OUR, SOME OF OUR DIFFERENT ANCILLARY SERVICES THAT ARE BEING PROVIDED BY BATTERIES, BY ENERGY STORAGE DEVICES.
AND YOU CAN SEE THAT THOSE PERCENTAGES ARE PRETTY HIGH.
THEY WERE, UH, THE, UM, UH, RESPONSIVE RESERVE, FOR EXAMPLE, WAS OVER RIGHT AROUND 50% WAS BEING MET CONSISTENTLY DURING THE, THIS TIME PERIOD, UH, BY BATTERIES.
SO THEY'RE REALLY CARRYING A, A LARGE AMOUNT OF THOSE ANCILLARY SERVICES AT THIS POINT.
UH, NATURAL GAS LIMITATIONS, WE HAD, UH, THE KIND OF THE TYPICAL GAS RESTRICTIONS THAT OCCUR, PARTICULARLY IN NORTH TEXAS DURING COLD WEATHER, WE DEPLOYED SOME OF THOSE UNITS UP TO 950 MEGAWATTS ON, UM, OUR, THE NEW FIRM FUEL SUPPLY SERVICE.
AND UM, THAT WAS REALLY HELPFUL IN KEEPING THAT AMOUNT OF GENERATION AVAILABLE THAT WOULD'VE OTHERWISE BEEN OUT BECAUSE OF THE GAS RESTRICTIONS.
AND THEN FROM AN ENVIRONMENTAL PERSPECTIVE, WE ASK FOR, UH, ENFORCEMENT, THE, THE T C Q TO PROVIDE ENFORCEMENT DISCRETION TO THE GENERATORS SO THAT GENERATORS WOULDN'T BECOME UNAVAILABLE, UH, CAUSE OF, OF SOME KIND OF EMISSIONS RESTRICTION OR SOMETHING LIKE THAT DURING THE EVENT, KIND OF MAXIMIZE THE AMOUNT OF GENERATION THAT WE HAD AVAILABLE.
WE ALSO, UH, ASKED FOR A, UH, SECTION 2 0 2 C ORDER FROM DOE THAT SAYS IF WE HAD GONE INTO AN EMERGENCY, THIS IS JUST BEING PREPARED.
IF WE HAD GONE INTO AN EMERGENCY THAT THEY WOULD, UH, ALLOW A GENERATION EMISSIONS EXCEEDANCE IS DURING THAT IF WE WERE IN AN EMERGENCY THAT WOUND UP, WE DID, WE DID NOT GO INTO EMERGENCY, WE DIDN'T NEED THAT.
AND REALLY THE, THE GOAL OF THE BOTH OF THESE ACTIONS IS TO MAXIMIZE THE AMOUNT OF A GENERATION THAT'S AVAILABLE DURING THESE COLD WEATHER TYPE EVENTS.
SO WITH THAT, I'LL CLOSE AND SEE IF YOU HAVE ANY QUESTIONS.
WE APPRECIATE HOW YOU'VE UNPACKED EVERYTHING THAT HAPPENED DURING THE WINTER STORM.
IF YOU GO BACK TO YOUR PRICE SLIDE FOR A MINUTE, WHAT BACK ONE.
WHAT I SAW IN TERMS OF IMPACT OF THE THOSE TWO PEAKS AND PRICING WAS, UM, THAT THE LARGE FLEXIBLE LOADS DROPPED AND THAT THE, UM, BATTERY, UH, CAPABILITIES KICKED IN.
BUT CAN YOU TELL ME HOW MUCH OF A RESPONSE WE HAD FROM OUR TRADITIONAL GENERATORS? HOW MUCH DID WE HAVE FROM WIND AND SOLAR AND, AND THERMAL? YEAH, SO, UM, SEE THIS WORKS.
SO, SO THIS IS BASICALLY THAT TIME PERIOD.
IT'S RIGHT BEFORE THE SUN CAME UP IN THE MORNING OF, UH, THE 23RD AND THEN RIGHT AFTER THE SUN WENT DOWN, THAT WAS THE TWO, TWO KIND OF SPIKES THERE.
AND SO PRETTY MUCH ALL THE GENERATION, THE GRAY LINE HERE, THE TWO LITTLE GRAY AREAS ARE, ARE, UH, NONS, SPIN RESERVE AND THE QUICK START GENERATORS.
AND THAT'S KIND OF YOU TYPICALLY SOME OF THE LAST GENERATION IN THIS KIND
[00:50:01]
OF CONDITIONS THAT WOULD BE COMMITTED.AND YOU CAN SEE THAT A LOT OF THEM ARE ONLINE.
THERE'S VERY LITTLE STILL IN RESERVE THERE.
UM, SO IT'S DOWN IN THE BLUE PART.
SO PRETTY MUCH EVERYTHING WAS ONLINE DURING THOSE.
SEE THAT'S THE POINT I'M GETTING TO IS THAT, UM, IT DOESN'T LOOK TO ME LIKE THE PRICE SIGNAL REALLY BROUGHT MORE OF OUR, OUR THERMAL GENERATION BACK ONLINE.
IS IS THAT A A GOOD ANALOGY? BECAUSE IT WAS ALREADY ONLINE.
IT WAS ALREADY ONLINE, RIGHT? YES.
THAT'S, THAT'S THE POINT I WAS TRYING TO GET ACROSS IS THAT THE PRICE, WE NEED A NEW PRICING SIGNALING MECHANISM TO BE ABLE TO DEAL WITH OCCURRENCES LIKE THIS AND, AND, AND TO BRING MORE CAPACITY INTO THE MARKET SO THAT WE'VE GOT, UH, MORE AVAILABLE, MORE RESERVE MARGIN AVAILABLE DURING THESE KIND OF CONDITIONS.
I THINK ANOTHER WAY OF SAYING THAT IS WHEN THERE'S NO SUPPLY, PRICING DOESN'T HELP.
THAT'S EXACTLY WHAT THE POINT WE'RE TRYING TO GET ACROSS.
YEAH, JOHN, TO FOLLOW UP ON YOUR POINT AT ABOVE AND BILL'S POINT, VERY, VERY IMPORTANT POINT ABOVE A CERTAIN PRICE POINT.
EVERY GENERATOR'S ON BEYOND THAT, THAT PRICE IS JUST PAYING PEOPLE TO STOP CONSUMING ELECTRICITY.
UM, SO IT'S A HUGELY IMPORTANT POINT, RIGHT? SO WHAT THAT PRICE CHANGES DEPENDING ON THE GAS PRICE AND HEAT RATE, IT'S, YOU KNOW, CALL IT 500 $800 A MEGAWATT HOUR OR $300 MEGA, EVERYTHING IS ON AT THAT POINT.
AND FROM $500 A MEGAWATT HOUR TO 5,000, IT'S JUST PAYING PEOPLE TO STOP CONSUMING ELECTRIC.
YEAH, I THINK WE NEED TO DO MORE WORK ON THE DEMAND SIDE.
CAUSE THE ONLY PEOPLE WHO SEEM TO BE REALLY RESPONSIVE ARE THESE LARGE FLEXIBLE LOAD GUYS.
UM, AND YOU KNOW, ARE THERE MORE THINGS THAT WE CAN DO TO GET DEMAND TO RESPOND TO PRICE SIGNALS? WE TALKED ABOUT THIS YESTERDAY.
THE MORE WE CAN DO TO GET DEMAND RESPOND, SUPPLY AND DEMAND, IT IS GOOD.
UM, WE, WE TYPIC A LOT OF TIMES WHEN WE HAVE A SUMMER PEAK TYPE EVENT, WE WILL GO BACK AND LOOK AT THE KIND OF THE OVERALL PRICE RESPONSIVE DEMAND, NOT JUST THE FLS BECAUSE THERE ARE OTHER OTHER THINGS THAT RESPOND.
UH, WE HAVEN'T NOT DONE THAT FOR THIS EVENT.
UM, OKAY, SO ONE, ONE ISSUE, AND THIS MAY NOT BE THE CASE ON THIS SLIDE, BUT THAT I THINK IS DEFINITELY WORTH CONTINUING TO EXAMINE.
UM, IN TERMS OF GENERATION COMMITMENT DECISIONS.
I KNOW, YOU KNOW, PABLO AND UM, HAS PROVIDED FEEDBACK TO US IN JANUARY THAT PART OF THE REASON YOU DON'T GET THE GENERATION COMMITMENT, UM, IS BECAUSE OF THE HIGH AMOUNT OF ANCILLARIES THAT ERCOT HAS CARRIED.
AND SO I THINK IT'S IMPORTANT TO CONTINUE TO EXAMINE AS WE ADD ECR S UM, TO THE ANCILLARY SERVICE PORTFOLIO, UM, ON HOW WE CAN REBALANCE THAT OUT.
I'M NOT SAYING REDUCE NECESSARILY, OR, OR I'M JUST SAYING WE, IF THE HIGHER AMOUNT OF ANCILLARIES IS DRIVING GENERATION COMMITMENT DECISIONS THAT ULTIMATELY RESULT IN ERCOT HAVING TO R CUZ THE GENERATORS AREN'T COMMITTING, THEN I THINK THAT'S AN ISSUE THAT WE ALSO NEED TO BE MINDFUL OF, UM, WITH RESPECT AND NOT JUST PRICING, UM, BUT ALSO GENERATION COMMITMENT RESULTING FROM ANCILLARIES AND, AND, UM, NOT NOT COMMITTING AND R UM, SO, SO DURING THIS EVENT WE HAD TO DO VERY LITTLE RUCKING BECAUSE OF THE EXPECTATIONS OF THOSE HIGH PRICES.
IT DROVE ALL THE GENERATION TO BE ONLINE.
THE, UM, AND IN FACT THE, THE, THE DARKER GRAY SHADED AREA THERE IS THE UNDEPLOYED NONS SPIN RESERVE.
SO YOU CAN SEE THAT THAT GETS DOWN VERY LOW DURING THOSE TWO PEAK TIME PERIODS.
SO PRETTY MUCH WE WERE THE, ALL OF THAT NONS SPIN WAS BEING DEPLOYED DURING THAT TIME.
SO WE ACTUALLY USED IT FOR THOSE.
YEAH, AND DAN, THAT'S A, AND LIKE THE FORECAST ERROR ON THE NIGHT OF THE 22ND IS A GOOD REASON, IS A GOOD EXAMPLE OF WHY WE HAVE SO MANY RESERVES BECAUSE I MEAN, WE WERE, WE WERE WATCHING THAT IN REAL TIME, UH, JUST LIKE EVERY OTHER GRID OPERATOR AS THE LOAD SHOT, RIGHT? RIGHT THROUGH OUR FORECAST.
UH, AND THE MARKET USES THESE FORECASTS TOO.
AND SO WE NEEDED AN EXTRA SIX, 7,000 MEGAWATTS BEYOND WHAT WE FORECAST.
AND THAT'S EX THAT'S THE OPERATIONAL CHALLENGE THAT, THAT PABLO WAS TALKING ABOUT VERSUS THE RESOURCE ADEQUACY.
AND, AND DAYS LIKE THAT ARE EXACTLY WHY WE HAVE THOSE EXTRA RESERVES AND THAT'S WHY WE R UNITS AND THAT'S WHY WE HAVE THAT MARGIN OF SAFETY.
UH, CAUSE WE, WE, WE DON'T KNOW EXACTLY WHAT MOTHER NATURE IS GONNA THROW AT US, BUT WE HAVE TO HAVE THOSE RESERVES IN PLACE.
WE HAVE TO THROW UP THOSE UNITS TO MAKE SURE WE HAVE THE GENERATION WE NEED TO KEEP THE LIGHTS ON.
AND THIS IS A GREAT EXAMPLE OF WHEN THAT WORKED EXACTLY THE WAY IT'S SUPPOSED TO.
BUT I THINK THIS IS A GREAT EXAMPLE OF THE DEPENDENCY WE NOW HAVE ON RENEWABLES BECAUSE FOR MOST OF THE 22ND AND 23RD, WE WERE PART OF, PART OF THE 22ND, 23RD WE WERE IN, WE WERE IN RENEWABLE TERRITORY.
IF WIND DID STOP BLOWING, WE WOULD'VE BEEN IN DEEP S**T.
[00:55:01]
GOOD EXAMPLE OF THE GRAPHIC.PABLO SHOWED
UH, DAN WAS, UH, WAS MARA A SIMILAR EXPERIENCE TO THIS? DID YOU SEE THE SAME KIND OF PERFORMANCE PROFILE IN, IN TERMS OF COMMITMENT DECISIONS AND, UH, BECAUSE THAT, THAT FEBRUARY, THAT LATE JANUARY, FEBRUARY EXPERIENCE, WE DID HAVE TO R MORE, UM, IT, IT WAS A GLANCING BLOW THAT TEXAS HAD ON THAT STORM BUT IT WAS STILL GONNA BE COLD.
AND SO EVERYONE WASN'T SURE IF, IF THE LOADS WERE GONNA LIVE UP TO THE ELLIOT STANDARD.
AND SO THERE WAS THIS BIG, THERE WAS AN AMBU AMBIGUOUS TIME IN TERMS OF EVERYBODY'S COMMITMENT DECISIONS.
WHAT WAS YOUR OBSERVATION THERE? YEAH, SO WE DID HAVE TO DO MORE LIABILITY UNIT COMMITMENTS GOING INTO, UH, MARA.
UM, A LOT OF IT WAS BECAUSE OF THE INCREASED UNCERTAINTY, AS YOU MENTIONED, AROUND THE LOAD FORECAST, ALSO AROUND THE WIND FORECAST BECAUSE OF THE ICING CONDITIONS THAT, THAT, UH, TOOK OUT, UM, A LOT OF THE WIND GENERATION.
AND DID YOU SEE ANOTHER, SO, SO IN THAT CASE, OUR SWING PRODUCER WAS TAKEN OUT OF THE EQUATION.
AND SO THE, ALTHOUGH THE, THE WE, WE WERE NOT AS TIGHT DURING MAREZ, WE WERE DURING THIS EVENT, BUT THE LOAD WAS ALSO, UH, NEARLY 10,000 MEGAWATTS LESS.
BUT BECAUSE WE LOST THAT MUCH WIND GENERATION, IT WOUND UP BEING SOMEWHAT TIGHT.
SO YOU HAD GENERATION COMMITTED BASED ON PRICING, AND EVEN THE LOAD WAS A LOT LOWER AND EVERYTHING JUST WORKED AS, AS USUAL.
BUT ELLIOT WAS MORE OF A, I THINK THE LOAD SHOT OUT, AS THE CHAIRMAN SAID, AND THE PRICING SIGNALED ALL THE GENERATION TO GET ON.
[8. Independent Market Monitor (IMM) Report]
IS AGENDA ITEM EIGHT, WHICH IS THE INDEPENDENT MARKET MONITOR REPORT, AND CARRIE BIVINS IS WITH US.CARRIE BIENS WITH POTOMAC ECONOMICS.
I HAVE A SHORT PRESENTATION FOR YOU TODAY.
I DO WANT TO CONTINUE THIS CONVERSATION A BIT MORE ABOUT THE PRICING EVENT ON THE 22ND OF DECEMBER.
UM, IT WAS FAIRLY SIGNIFICANT PRICING EVENT, AND WHAT I FIND INTERESTING ABOUT IT IS THE MORNING PEAK IN WHICH THE PRICES WERE, UM, UP TO $4,500.
YOU CAN SEE IN THE BOTTOM THERE, THERE'S VERY LITTLE OPERATING RESERVE DEMAND CURVE ATER.
UM, AND THERE WAS, THE REASON FOR THAT IS THERE WAS A LOT OF ONLINE CAPACITY, AND SO WE WERE NOT ONLINE CAPACITY SHORT BY ANY STRETCH IN THAT MORNING.
AND THE REASON THE PRICES WERE HIGH WERE, I'LL SAY THE PRICE SETTING RESOURCE WERE ENERGY STORAGE RESOURCES DURING THAT TIME.
AND THEY TYPICALLY HAVE HIGH OPPORTUNITY COSTS AND HIGH OFFERS, AND THEY WERE MOSTLY SETTING THE PRICE DURING THAT TIME.
AND THAT IS A REFLECTION OF THE ISSUE DURING THAT TIME WAS, YOU KNOW, AS DAN WAS SHOWING ABOUT THE THERMAL FORCED OUTAGES DURING THAT TIME WAS MORE AN ISSUE OF SHORTAGE, OF RAMPS OF RAMP CAPACITY.
AND THAT'S WHEN YOU TYPICALLY NEED TO USE YOUR ENERGY STORAGE RESOURCES.
SO THESE ARE RESOURCES BEING DISPATCHED FOR ENERGY.
THIS IS NOT THE ANCILLARY SERVICES THAT DAN WAS TALKING ABOUT.
THIS IS THE SECURITY CONSTRAINT.
ECONOMIC DISPATCH DISPATCHING THE ENERGY STORAGE RESOURCES IN ORDER TO PROVIDE ENERGY TO MEET THE DEMAND.
I HAVEN'T DONE A SIMULATION, BUT THIS IS AN EXAMPLE OF A CASE IN WHICH REALTIME CO-OP OPTIMIZATION WOULD'VE HAD AN IMPACT ON, UH, PRICING OUTCOMES.
NOW, IN THE EVENING TIME, THE PRICES WERE NOT AS SIGNIFICANT AND THERE WERE, UM, OPERATING RESERVE DEMAND CURVE ADDERS DURING THAT TIME A LITTLE BIT MORE SHORT.
AND ALSO THE PRICES WERE LOWER, UH, MORE AROUND THE $1,500 MARK.
AND WHAT I WANTED TO SHOW TO SUPPORT THAT HERE IS THAT, UM, YOU KNOW, IT WASN'T A SIGNIFICANT NUMBER OF MEGAWATTS, BUT IT WAS SIGNIFICANT MORE THAN ENERGY STORAGE RESOURCES ARE USUALLY DISPATCHED FOR ENERGY.
SO THEY NORMALLY ARE KIND OF AROUND THE ZERO, UH, MEGAWATT MARK AS THEY'RE CHARGING, DISCHARGING, PROVIDING REGULATION UP, REGULATION DOWN, DOING THEIR ANCILLARY SERVICES.
IN THESE CHUNKS THAT I'VE HIGHLIGHTED, THEY WERE DISPATCHED UP AS MUCH AS 400 MEGAWATTS TO PROVIDE ENERGY TO SUPPORT THE, UH, THE RAMPING NEEDS OF THE GRID.
AND THEN IN THE OFF PEAK TIMES, YOU CAN SEE THEY GO BACK DOWN UNDER ZERO AND, AND CHARGE IN ORDER TO MEET THE EVENING PEAK.
AND THE LAST THING I WANNA DISCUSS IS THE FIRM FUEL.
JUST ON THAT POINT, WHAT PERCENTAGE OF A TOTAL OF AVAILABLE CAPACITY WOULD THAT BE? THE 400? A VERY SMALL NUMBER.
I DON'T, I DON'T KNOW OFF THE TOP OF MY HEAD, BUT I MEAN, ONLINE CAPACITY WAS, YOU KNOW, PROBABLY 80,000.
NO, NO, BUT OF, OF, OF ENERGY STORAGE RESOURCE FOUR.
I MEAN, THEY HAVE A CAPACITY SOMEWHERE AROUND 2000 MEGAWATTS.
[01:00:01]
2000 MEGAWATTS DIVIDED BY FOUR.AND, AND THEY WERE, UM, YOU KNOW, ABLE TO MEET THOSE, UM, THOSE BASE POINTS DURING THAT TIME.
SO JOHN, JUST SO YOU KNOW, IN THE, IN, UH, THE TEXAS MARKET, I THINK THIS IS TRUE FOR MOST MARKETS, ABOUT 90% OF THE, UH, DISPATCH IS ONE TO TWO HOURS.
SO A THOUSAND MIGHT BE A BETTER NUMBER FOR THE MAX.
AND THIS WAS IN ABOUT A THREE HOUR EVENT PRICING EVENT, UH, THE FIRM FUEL SUPPLY SERVICE.
SO I WANTED TO SHOW HERE THE FIRM FUEL SUPPLY, UH, MEGAWATTS THAT WERE DISPATCHED BY ERCOT, AS WELL AS THE AVERAGE REALTIME PRICE.
YOU CAN SEE THAT, OF COURSE, WE DID HAVE HIGH PRICES ON THE 23RD, UM, BUT WE HAD MODERATE PRICES ON THE REST.
UM, THIS IS BOTH ELLIOT AND MARA.
AND WHAT I WANT TO HIGHLIGHT IS THAT I HAD AN ASSUMPTION, AND I THINK I'M NOT ALONE IN THIS, THAT THESE FIRM FUEL SUPPLY RESOURCES WOULD BE DEPLOYED IN A TIME IN WHICH THERE WAS A WIDESPREAD SHORTAGE OF NATURAL GAS SUPPLY AND WE WERE IN SHORTAGE CONDITIONS.
AND THAT HAS NOT TURNED OUT TO BE THE CASE.
AND SO WHAT THAT INDICATES TO ME IS THAT I WANT TO GO BACK AND LOOK AT SOME OF THE PRICING RULES AROUND THE FIRM FUEL SUPPLY SERVICE, BECAUSE THEY'RE BEING DEPLOYED IN A MANNER THAT, UM, THEY'RE GONNA BE DEPLOYED IN TIMES IN WHICH THERE'S NOT SHORTAGE CONDITIONS AND THE FIRM FUEL SUPPLY RESOURCES, THEY ALREADY HAVE THEIR FUEL COSTS COVERED.
THAT'S PART OF THE PAYMENT THAT THEY GET FOR THE FF SS.
AND SO THAT MEANS THERE ARE ZERO MARGINAL COST RESOURCES WHEN THEY'RE BEING DEPLOYED, AND THAT CAN UNDERCUT THE OTHER, UH, RESOURCES THAT ARE BEING DEPLOYED AND BURNING NATURAL GAS AND HAVING TO PAY FOR IT.
SO, UM, I ALSO WANTED TO POINT OUT THAT THE STORAGE RESOURCES, THE FUEL WAS RESTOCKED AFTER BOTH DEPLOYMENTS AND THAT, YOU KNOW, WILL HAVE SOME COST.
UM, SO ESPECIALLY DURING MARA, THE, THE, WHAT I UNDERSTAND FROM ERCOT OPERATIONS IS THAT THOSE WERE DEPLOYED FOR THE POTENTIAL OF TRANSMISSION CONSTRAINTS LOCALLY IN THE DALLAS AREA.
UM, THAT DID NOT MATERIALIZE, BUT THAT WAS THE, THE CONCERN THAT FOR THOSE DEPLOYMENTS.
SO, UM, THIS IS JUST TO HIGHLIGHT THAT I MIGHT HAVE RECOMMENDATIONS HERE FOR YOU IN THE FUTURE, WHETHER THAT'S THROUGH AN N P R OR THROUGH OUR STATE OF THE MARKET REPORT AROUND HOW WE PRICE THESE FIRM FUEL SUPPLY RESOURCES IN REAL TIME, JU JUST AS A PUBLIC SERVICE MESSAGE FROM JUST ONE COMMISSIONER NOT REPRESENTING THE REST OF THE COMMISSION, THAT DOES HIGHLIGHT THE DISPARITY BETWEEN RAILROAD COMMISSION POLICY AND PUC, UH, ERCOT RELATED POLICY IN TERMS OF THE CUR CURTAILMENT RULES AND THE PRIORITIZATION OF CURTAILMENT.
AND SO ERCOT IS FORCED TO BE ANTICIPATING WHEN CURTAILMENT ACTIONS ON, UH, LDCS WILL GO INTO EFFECT.
THUS THERE'S UNCERTAINTY THERE AFFECTING OUR DEPLOYMENT OF FIRM FUEL SUPPLY SERVICE.
SO JUST WANNA MAKE SURE THAT'S IN THE RECORD.
AND OPERATING THE GRID REQUIRES US TO WORK WITH IMPERFECT INFORMATION AHEAD OF THE OPERATING DAY, NOT PERFECT INFORMATION RETROACTIVELY.
SO THERE'S A BIG DIFFERENCE BETWEEN KEEPING THE LIGHTS ON, UH, AHEAD OF POTENTIAL WEATHER EVENTS AHEAD OF SHORTAGES.
UH, AND I BELIEVE AT LEAST ATMOS WAS, UH, HAD SOME ISSUE ATMOS WAS CURTAILED, DID GIVE NOTICE OF CURTAILMENT, UH, DURING THAT EVENT.
SO THAT WAS NOT A HYPOTHETICAL CONCERN THAT WAS A DEPLOYMENT BASED ON OPERATIONAL INFORMATION FROM THAT GAS COMPANY DURING THAT OPERATING EVENT.
YOU MEAN YOU CAN'T RESTART? I I BELIEVE WE'RE OPERATING ON IMPERFECT INFORMATION, AND I JUST WANT THAT IN THE RECORD.
ONE IS I NEED TO CORRECT THE STATEMENT THAT THIS WAS CAUSED BY TRANSMISSION CONSTRAINTS.
IT WAS NOT CAUSED BY CONSTRICT TRANSMISSION CONSTRAINTS.
IT WAS BECAUSE WE WERE PLANNING FOR, UH, THE VULNERABILITIES THAT WE MAY HAVE IN THE EVENT OF GAS CURTAILMENT.
NUMBER TWO, THIS CALCULATION DOESN'T SHOW, I MEAN, IT SHOWS THE COST OF THE FIRM FUEL SERVICE THAT WAS USED DURING THIS EVENT, BUT IT DOESN'T SHOW THE COST, THE AVOIDED COST IF WE HAD HAD SOME SORT OF CURTAILMENT OF ELECTRON FLOW.
AND SO, AND WE'VE LEARNED FROM PAST EVENTS THAT THAT CAN BE SUBSTANTIAL.
UH, SO I THINK THIS, EVEN THOUGH IT, IT DID REFLECT A, AN EXPENDITURE OF, OF, UH, CONSUMER DOLLAR RETAIL DOLLARS TO TRY TO PAY FOR THE SERVICE, IT DOESN'T REFLECT THE AVOIDED COST OF WHAT WOULD'VE HAPPENED HAD WE NOT DONE THIS AND HAD AN EVENT A DISRUPTION.
SO I, I WAS JUST POINTING OUT WHAT WAS SHARED WITH ME BY ERCOT OPERATIONS FOR WINTER STORM MARA.
UM, MY TAKEAWAY FROM THIS IS THAT WE MAY NEED TO HAVE SOMETHING LIKE AN OFFER FLOOR ON FIRM FUEL SUPPLY RESOURCES.
I'M POINTING OUT THE PRICE FORMATION ISSUES WITH HAVING A COMPENSATION FOR GENERATORS BEING ABLE TO BURN FREE FUEL AND BE ZERO MARGINAL COST RESOURCES UNDERCUTTING THEIR COMPETITORS THAT HAVE TO PAY FOR THEIR FUEL.
CARRIE, IF I MIGHT BE ABLE TO ADD JUST, UM, I MEAN, I, I THINK OPERATIONALLY WHAT WHAT WE DID WAS SPOT ON.
[01:05:01]
THINK THIS IS A REALLY GOOD ONE, IS, UM, THE OFFER CURVES, ONCE YOU'VE COMMITTED THE UNITS, THEY, THEY CAN RUN AT THEIR LOW SUSTAINABLE LIMIT, BUT YOU WANT THEM TO RAMP UP BEHIND THE MARKET UNITS.YOU DON'T WANT TO PUT THEM AHEAD OF THE MARKET UNITS.
AND, UM, I, I WOULD JUST SAY THAT WE HAVE SOME WORK TO DO ON, ON THAT DESIGN SIDE ON, ON MY END.
I, I, I TAKE HER POINT TO HEART AND, UH, UH, I, I THINK THAT IS GOOD FEEDBACK RELATIVE TO HOW THIS PLAYED OUT FROM A RELIABILITY STANDPOINT.
EVERYTHING WORKED, UH, THE WAY IT SHOULD.
IT'S THAT MERIT ORDER, UH, OF HOW THE FLEET SITS.
UM, AND I DON'T KNOW IF YOU WANT TO ADD ANYTHING TO THAT.
NO, THAT'S EXACTLY RIGHT, KON.
IS THAT SOMETHING THAT WE CAN ADDRESS IN THIS PHASE TWO THROUGH, YOU KNOW, I, I DON'T THINK IT'S A PHASE TWO THING, BUT I MEAN, IT, IT'S, IT'S SOMETHING I THINK THAT WE HAVE TO, WE HAVE TO ADDRESS FOR PHASE ONE, REGARDLESS OF WHAT HAPPENS IN, IN PHASE TWO.
IT, IT'S, UH, I THINK THERE NEEDS TO BE SOME RULES AROUND WHAT THE OFFER CURVE LOOKS LIKE FOR THESE UNITS.
IS THAT SOMETHING YOU WOULD WANT DIRECTION FROM US ON DURING OUR, THE SECOND DISCUSSION ON FIRM FUEL? OR IS THAT SOMETHING YOU CAN HANDLE TECHNICALLY OVER HERE? YOUR, YOUR, UH, INSTRUCTIONS ARE ALWAYS HELPFUL.
UH, BUT I I I, THIS SEEMS TO FIT MORE WITHIN THE NORMAL PROTOCOL CHANGE PROCESS TO ME.
UH, I THINK CARRIE AGREES WITH THAT, BUT YES, UH, YEAH, I THINK THAT'S A FAIR POINT.
UH, AND, AND THE SOME SORT OF OFFER FLOOR TO OFFSET THE ADVANTAGE OF FREE, FREE FUEL IN THAT INTERVAL IS, IS A PERFECTLY FAIR CONSIDERATION.
THE, THE, THE STATUS OF PIPELINES DURING THE EVENT IS, IS A DIFFERENT ISSUE.
BUT THAT'S SOMETHING, UH, THE, THE OFFER FLOOR CONCEPT TO, TO BALANCE AND, AND APPROPRIATELY ALIGN THE MERIT ORDER OF DISPATCH IS SOMETHING I THINK WE SHOULD LET, LET KERRY WORK WITH ERCOT STAFF COME UP WITH THIS, THE, UH, PARAMETERS, UH, OF THE ISSUE DEFINE THE PROBLEM AND POTENTIAL SOLUTIONS THAT WE CAN GO FROM THERE.
AND IF THEY CAN HANDLE IT QUICKLY AT ERCOT, UH, AND THE BOARD CAN HANDLE THAT, GREAT.
IF IT NEEDS PUC DIRECTION, THEN WE'LL TAKE THAT LONGER AND MORE, UH, A BIT MORE CUMBERSOME PROCESS.
BUT LET'S, LET'S START WITH DEFINING THE PROBLEM QUANTITATIVELY AND GETTING SOME GUARDRAILS AROUND THAT.
AND THEN WE'RE LEARNING AS WE GO, RIGHT? THAT'S RIGHT.
THE MOST EFFICIENT WAY TO HANDLE IT, I THINK IS WHAT I WAS TRYING TO FIGURE OUT.
CUZ THE OTHER, THE OTHER QUESTION THAT I HAD WAS, YOU SAID THAT, UM, STORAGE WAS RESTOCKED AFTER BOTH DEPLOYMENTS AND OBVIOUSLY IT WAS EARLY IN THE WINTER AND YOU WANNA RESTOCK THAT STORAGE.
YES, THE, THE FUEL, BECAUSE YOU MIGHT NEED TO DEPLOY THOSE FIRM FUEL PRODUCTS AGAIN, AT LEAST FOR WINTER STORM ELLIOTT, AND I THINK THEY WERE DEPLOYED DURING MARA.
UM, SO REPLENISHING IS A GOOD THING AND, AND ERCOT WILL USE JUDGMENT ON DOING THAT DEPENDING ON WHEN FIRM FUEL PRODUCTS ARE DEPLOYED IN THE WINTER SEASON.
MY ONLY, THE, THE OTHER QUESTION THAT I HAVE IS JUST TRYING TO MAKE SURE WE'RE KEEPING AT LEAST SOME KIND OF ACCOUNTING ON, ON WHAT THOSE COSTS ARE, BECAUSE THOSE ARE ADDITIONAL COSTS THAT WEREN'T INCLUDED IN THE FIRM FUEL BUDGET.
LIKE, FOR INSTANCE, PHASE ONE WAS 52 MILLION MM-HMM.
SO UNDERSTANDING HOW MUCH ADDITIONAL COST THE REPLENISHMENT WAS, JUST SO WE HAVE JUST AN ACCOUNTING OF, OF, OF THAT, UM, COST IS IMPORTANT.
UM, AND I'M NOT SURE HOW MUCH THAT WAS STILL, SO YEAH, ABSOLUTELY.
I THINK THE SETTLEMENTS ARE STILL ONGOING AND, UM, MY UNDERSTANDING IS ERCOT HAS AN ACTION ITEM TO TAKE THAT INFORMATION TO TACK.
[9. TAC Report]
LIKE TO INVITE CLIFF LANGY CHAIR OF THE TECHNICAL ADVISORY COMMITTEE TO PRESENT AGENDA ITEM NINE, TACK REPORT.GOOD TO BE WITH YOU THIS MORNING.
SO FIRST OF ALL, I WANTED TO SAY, UH, THAT I APPRECIATE THE CONFIRMATION THIS MORNING OF BOTH CAITLIN AND I FOR THE VICE CHAIR AND CHAIR POSITION.
FOR THOSE THAT DON'T KNOW, CAITLIN, SHE'S SITTING BACK OVER HERE IF SHE'LL WAVE REAL QUICK, SO, UM, SHE DOESN'T BITE REALLY.
SO ANYHOW, SHE IS NICE, BUT, SO REALLY APPRECIATE THAT.
UM, WE DID HAVE A COUPLE OF ATTACK MEETINGS THAT HAVE OCCURRED SINCE, UH, THE LAST, UH, BOARD UPDATE TO YOU.
SO WE DID HAVE A NUMBER OF REVISION REQUESTS THAT WERE APPROVED.
THESE WERE ON YOUR, UH, CONSENT AGENDA, AND SO WE REALLY DON'T HAVE ANYTHING TO SPEAK OF, UH, PERTAINING TO THOSE PARTICULAR ITEMS. UH, IN TERMS OF THE JANUARY AND FEBRUARY ATTACK MEETING HEADLIGHT, UH, HEADLIGHTS HIGHLIGHTS RATHER, UH, WE DID CONFIRM OUR 2023 TAP TAX SUBCOMMITTEE LEADERSHIP.
[01:10:01]
WE DO HAVE A FEW NEW FOLKS IN THERE THIS YEAR.DIANA COLEMAN'S REPRISING HER ROLE.
UH, SHE'S FROM CPS ENERGY, SHE'S REPRISING HER ROLE IN LEADERSHIP THIS TIME AS VICE CHAIR FOR PRS, UH, UNDER RETAIL MARKET SUBCOMMITTEE.
JOHN SHOTS AND DEBBIE MCKEEVER HAVE SWAPPED, UH, THEIR ROLES THERE.
IN TERMS OF THE CHAIR AND VICE CHAIR ROLES, UH, RELIABILITY AND OPERATIONS SUBCOMMITTEE, UH, WE'RE REPRISING OUR ROLES THERE WITH BOTH CHASE SMITH AND KATIE RICH AS CHAIR AND VICE CHAIR.
AND THEN FOR WMS, WE ACTUALLY HAVE A NEW VICE CHAIR AND A CHAIR THIS YEAR.
UH, ERIC LAKEY, UH, WITH PERTON ELLIS, THIS CHAIR JIM LEE WITH CENTERPOINT AS VICE CHAIR.
ALTHOUGH THOSE GUYS ARE NEW TO THE WHOLESALE MARKET SUBCOMMITTEE LEADERSHIP, UH, THEY'RE NOT NEW TO LEADERSHIP ROLES WITHIN THE STAKEHOLDER PROCESS AS THEY'VE PARTICIPATED IN THERE BEFORE.
UH, WE DID HAVE SOME DISCUSSIONS PERTAINING TO THE NEW CREDIT GROUP.
UM, AS YOU REMEMBER, YOU DISBANDED THE CREDIT WORKING GROUP IN DECEMBER AND ASKED TACK TO GO AHEAD AND TAKE ON THAT ROLE.
AND SO WE'VE STARTED THAT PROCESS.
OUR MARKET CREDIT WORKING GROUP THAT EXISTS UNDER, UH, THE AUSPICES OF THE WHOLESALE MARKET SUBCOMMITTEE ARE CURRENTLY DEVELOPING THE CHARTER.
THINK WE'RE MAKING SOME VERY GOOD PROGRESS ON THE CHARTER THERE AND, AND, UH, DETERMINING WHAT THE QUALIFICATIONS ARE FOR MEMBERSHIP AS PART OF THIS NEW CREDIT GROUP.
UH, WE'RE, WE'RE CONTINUING TO WORK THROUGH THAT.
WE FULLY EXPECT AT THIS POINT IN TIME THAT AT OUR MARCH MEETING THE MARKET CREDIT WORKING GROUP, WE'LL GO AHEAD AND BRING FORTH AN, UH, FULL CHARTER.
UH, WE CAN DEBATE THAT AND WE SHOULD HAVE AN UPDATE FOR YOU AT THE APRIL MEETING.
UH, THAT BEING SAID, ONCE THAT'S COMPLETED, WE WILL DISBAND OUR MARKET CREDIT WORKING GROUP, AND THIS NEW GROUP WILL TAKE ON THE ROLES THAT THE FORMER CREDIT WORKING GROUP HAD TAKEN CARE OF.
THE LAST THING WE HAD WAS OUR T GOALS AND STRATEGIC INITIATIVES.
AND, UM, THOSE ARE LISTED ON THE NEXT TWO SLIDES.
WE VOTED UNANIMOUSLY, UH, VIA ROLL CALL TO APPROVE OUR 2023 T GOALS.
WE DIDN'T REMOVE ANYTHING FROM OUR GOALS LIST THIS YEAR, BUT WE DID ADD A COUPLE.
IF WE LOOK AT, UH, BULLETS 18 AND 19 IN PARTICULAR, UH, BOTH OF THOSE WERE, WERE DESIGNED AND, AND PLACED IN THERE FOLLOWING SOME OF THE MARKET ENHANCEMENTS THAT HAVE OCCURRED OVER THE COURSE OF THE LAST, UH, YEAR OR SO, YEAR AND A HALF.
AND SO WE WANTED TO MAKE SURE THAT WE'RE LOOKING AT THOSE, REVIEWING THOSE, UH, AND LOOKING TO MAKE SURE THAT THAT THEY'RE RELEVANT, VALID, AND IF WE NEED TO MAKE ANY ADDITIONAL CHANGES, WE CAN GO AHEAD AND DO SO TO MAKE SURE THAT THEY'RE ENHANCED AND, AND OPERATING IN THE WAYS THAT WE MEN MEAN FOR THEM TO DO SO.
AND THEN THE LAST ONE, I KNOW THERE'S BEEN PLENTY OF TALK ABOUT BRIDGING SOLUTIONS OVER THE COURSE OF THE LAST COUPLE DAYS, SO WE'RE PREPARED TO GO AHEAD AND SUPPORT THAT INITIATIVE TO, UH, SUPPORT THE DEVELOPMENT AND IMPLEMENTATION OF THOSE IF IT'S DECIDED TO MOVE FORWARD WITH THOSE.
AND THOSE ARE, ARE OUR GOALS FOR 2023.
UH, THAT IS ALL WE HAVE FOR OUR TAX REPORT FOR THIS MONTH.
ANY QUESTIONS, CLIFF? I'VE GOT A QUESTION.
UH, IN ADDITION TO LIKE SUPPORTING WHATEVER RULEMAKING HAPPENS, WHAT, WHAT ARE THE TOP THREE GOALS? TOP THREE GOALS I THINK RIGHT NOW, UM, ARE, I THINK FIRST OF ALL, I THINK ARE PCM IMPLEMENTATION.
IF, IF THAT'S ULTIMATELY WHAT IS DECIDED.
UM, I THINK SECONDLY IS REVIEWING THOSE MARKET CHANGES.
I THINK 18 IS IS REALLY IMPORTANT TO US AS WELL.
UM, AND THEN LASTLY, I THINK, UM, IMPLEMENTATION OF, OF ECR S UM, AND IMPLEMENTATION OF THE OTHER MARKET.
CHANGES THAT ARE ON ONGOING SEEM TO BE OUR HIGHEST PRIORITIES AT THIS POINT IN TIME.
CLIFF, I WOULD JUST ADD THAT THE TIMEFRAME FOR THIS BRIDGING SOLUTION STUFF IS BEING DICTATED BY P C AND DOESN'T NE NECESSARILY CONFORM TO OUR NORMAL PROCESS.
UM, YOUR FLEXIBILITY AND ENGAGE, YOU KNOW, WE WANT YOU TO ENGAGE CLEARLY WITH US ON THAT, BUT YOU'RE GONNA HAVE TO BE A LITTLE FLEXIBLE BECAUSE IT'S NOT GONNA FALL INTO THE NORMAL SORT OF MINUTES OR MEETING SCHEDULE THAT YOU WOULD UNDERSTAND.
SO, YEAH, AND I AGREE WHOLEHEARTEDLY.
UM, THE ONE THING THAT WE'VE LEARNED PARTICULARLY OVER THE COURSE OF THE LAST COUPLE YEARS IS THAT WE NEED TO BE EXTREMELY FLEXIBLE IN TERMS OF OUR MEETING ARRANGEMENTS AND SO FORTH.
AND SO, UH, WE HAVE CALLED, UM, SPECIAL MEETINGS FROM TIME TO TIME.
AND I THINK, UH, THESE ISSUES AS IT PERTAINS TO THE BRIDGING SOLUTIONS AND SO FORTH, IS SOMETHING THAT WE'RE PREPARED TO MEET WITH ON A MORE REGULAR BASIS IF, IF NEED BE, UM, SET UP SEPARATE WORKING GROUPS AND SO FORTH AS AS NECESSARY.
SO I BELIEVE WE'RE, WE'RE SET UP ANTICIPATING THE NEED TO BE FLEXIBLE AND, UH, READY TO ENGAGE, UH, HOWEVER WE NEED TO IN ORDER TO PROVIDE THE, THE ADDITIONAL INSIGHT AND INFORMATION TO THE BOARD.
THANK YOU, CLIFF, YOUR QUESTION.
[10. Finance and Audit (F&A) Committee Report]
COMMITTEE REPORTS.FIRST, UH, BILL FLORES WILL RE WILL PRESENT AGENDA ITEM 10, FINANCE AND AUDIT COMMITTEE REPORT, WHICH HAS THREE ASSOCIATED VOTING ITEMS. BILL.
[01:15:01]
AS, UH, EVERYONE ON THE BOARD KNOWS THE, UH, FINANCE AND AUDIT COMMITTEE HAD FIVE VOTING ITEMS ON THE AGENDA, PLUS SOME OTHER, UH, ITEMS AS WELL, WHICH I'LL GO THROUGH.UH, THREE OF THOSE VOTING ITEMS WILL REQUIRE, UM, AFFIRMING VOTES FROM THE, UH, BOARD.
SO I'D LIKE TO COVER THOSE FIRST.
THE, UM, INITIAL VOTING ITEM WAS TO, UH, UPDATE THE FINANCE AND AUDIT COMMITTEE CHARTER, AND THERE WERE SOME MINOR REVISIONS THAT WERE DISCUSSED DURING THE MEETING.
THOSE HAVE BEEN INCORPORATED INTO THE MATERIALS THAT ARE ON YOUR DILIGENT DECK NOW.
UH, WE ALSO, UH, APPROVED AN UPDATE TO OUR FINANCIAL CORPORATE STANDARD AND WE APPROVED AN UPDATE TO THE INVESTMENT CORPORATE STANDARD.
AND SO TO TAKE CARE OF THE, UH, BOARD ACTIVITIES WITH RESPECT TO THOSE, FIRST I'D LIKE TO MOVE ON BEHALF OF THE FINANCE AND AUDIT COMMITTEE.
APPROVAL OF THE THREE DOCUMENTS AS AMENDED IMPROVED DURING THE F AND A COMMITTEE MEETING.
SO I WOULD ENTERTAIN A MOTION.
I THINK YOU ALREADY HAD THE BILL THAT MOVED.
UH, WE ALSO TOOK TWO ADDITIONAL VOTING ITEMS THAT DON'T REQUIRE BOARD ADAM, UH, BOARD ACTION, BUT I THINK THE, UH, BOARD SHOULD BE AWARE OF THOSE.
WE APPROVED THE DESIGNATION OF THE COMMITTEE SECRETARY AS CHAD SEALY, UH, WHO IS ERCOT, SENIOR VICE PRESIDENT, GENERAL COUNSEL AND CORPORATE SECRETARY, SECRETARY OR HIS DESIGNEE.
WE ALSO REVIEWED AND APPROVED AN UPDATED INTERNAL AUDIT DEPARTMENT CHARTER.
UH, THERE WERE MINOR PROVISIONS, UH, RELATED TO, UH, CHANGING THE REPORTING FOR THE CHIEF AUDIT EXECUTIVE, UM, AS WELL AS SOME OTHER MINISTERIAL CHANGES.
WE THEN, AFTER WE MOVED BEYOND THE VOTING ITEMS, WE REVIEWED THE, UH, FORECAST ADEQUACY OF THE BUDGETED SYSTEM ADMINISTRATION FEE FOR 2024.
UH, ERCOT IS GOING, IS FORECASTING A FEE INCREASE FOR 2024, UH, WHICH WE WILL, UH, CONTINUE REVIEW AS PART OF THE 20 24 20 25 BUDGET PROCESS.
WE'LL HAVE MORE UPDATES ON THAT AS WE HAVE OUR APRIL AND JUNE MEETINGS MOVING FORWARD.
UH, WE ALSO RECEIVED, UH, THE, THE, UH, STANDARD REPORTS.
WE, UH, SEAN AND THE FINANCE TEAM PRESENTED THEIR 2022 FINANCIAL SUMMARY, UH, WHICH INCLUDED PRELIMINARY UNAUDITED FINANCIAL RESULTS.
UH, WE ALSO TALKED ABOUT THE, UH, CONGESTION, REVENUE RIGHTS, AUCTION RECEIPTS, UM, UH, BALANCE.
UH, I THINK IT'S NOTEWORTHY TO KNOW THAT THOSE THAT ERCOT FULLY REFUNDED, THOSE FULLY REPLENISH THOSE, EXCUSE ME.
DURING THE MONTH OF DECEMBER, UH, WE LOOKED AT INVESTMENT COMPLIANCE.
UH, ERCOT IN INVESTMENTS ARE IN COMPLIANCE WITH OUR POLICIES, OUR DEBT.
UH, WE LOOKED AT OUR DEBT COMPLIANCE ERCOT AND, UH, THE TWO, UH, UH, SPECIAL PURPOSE ENTITIES IN AND M ARE IN COMPLIANCE WITH THEIR DEBT COVENANTS.
AND THEN WE ALSO LOOKED AT A ACTIVITIES THAT WE'VE GOT COMING UP THE REST OF THE YEAR.
UH, AND SO THAT CONCLUDES MY REPORT.
UM, NEXT IS HUMAN RESOURCES AND GOVERNANCE, H R G COMMITTEE REPORT.
UH, H R G COMMITTEE, CHARTER ELECTION OF CHIEF EXECUTIVE OFFICER.
UH, ACTUALLY I DON'T NEED TO GO THROUGH ALL THAT.
[11. Human Resources and Governance (HR&G) Committee Report]
PRESENT AGENDA ITEM 11, H R AND G COMMITTEE REPORT, WHICH HAS SEVERAL ASSOCIATED VOTING ITEMS. THANK YOU.IN ADDITION TO HEARING HUMAN RESOURCES, UH, REPORT AND DISCUSSING THAT AS WELL AS RISK, RISK DISCUSSION ASSOCIATED WITH MATTERS, WHICH UNDER THE H RRG COMMITTEE PUR PURVIEW, WE TOOK UP SEVERAL, AS YOU MENTIONED, UH, MOTIONS AND TO RECOMMEND TO THE BOARD THAT THEY APPROVE TODAY.
AND IF, UH, IF IN THE INTEREST OF THE TIME, I WOULD PROPOSE THAT I WOULD BRING 'EM ALL UP IN ONE MOTION.
AND IF ANY BOARD MEMBERS WANNA TALK ABOUT THEM, WE CAN DISCUSS IT AFTER.
SO THE FIRST IS THE HR AND G COMMITTEE PROPOSES, UH, THAT THE BOARD APPROVED THE REVISED HUMAN RESOURCES AND GOVERNANCE COMMITTEE CHARTER.
UH, THESE, THESE WERE MINOR CH CHANGES TO THE CHARTER.
UH, SECOND THAT THE BOARD ELECT PABLO VEGAS, UH, TO THE, TO SERVE AS ERCOT CEO AND RATIFICATION OF THE OFFICERS OF ERCOT IS SET FORTH IN THE RESOLUTION AND THE BOARD MATERIALS.
UH, THIRD, THAT THE BOARD RATIFIED THE OFFICERS, UH, LISTED IN THE, UH, IN THE RESOLUTIONS FOR BOTH THE SPECIAL PURPOSES ENTITIES, M ANDM RELATED TO IZATION.
AND, UH, THE LAST ITEM IS THAT THE BOARD APPROVE THE REVISED ETHICS AGREEMENT FOR DIRECTORS.
[01:20:01]
CHANGES, UH, THE MATERIALS ARE IN THE, THE, UH, IN THE BOARD PACKET RELATED TO THE ETHICS AGREEMENT.THERE'S A LOT OF RED LINE, BUT THE SUBS REALLY NONS, SUBSTATIVE CHANGES.
THEY'RE JUST TO, UH, REFER TO THE DOCUMENTS THAT, THAT, UH, AND THEY GIVE US THE UNDERLYING OBLIGATION.
SO IT JUST REFERENCES THE BYLAWS AS OPPOSED TO REPEATING THE BYLAWS.
SO IF, IF THERE'S NOT ANY DISCUSSION, I WOULD, UH, MAKE A MOTION THAT WE APPROVE THOSE FIVE ITEMS. THANK, THANK YOU.
DO I HAVE A SECOND? SECOND, COURTNEY, THANK YOU.
THANK YOU FOR, DOES THAT CONCLUDE YOUR OKAY, SEE THAT FOR AGENDA ITEM
[12. Reliability and Markets Committee Report]
12, BOB FLEXON WILL PRESENT THE RELIABILITY AND MARKETS COMMITTEE REPORT.UH, THERE ARE TWO VOTING ITEMS HERE, BOB, PLEASE PROCEED.
WE HAD TWO VOTING ITEMS THAT YOU JUST MENTIONED AT THE COMMITTEE LEVEL THAT ARE BRINGING FORWARD TO THE BOARD.
UH, FIRST ONE DEALT WITH THE COMMITTEE CHARTER, WHICH WAS PRIMARILY JUST FORMATTING CHANGES.
SO NOTHING, UH, OF ANY MATERIAL CHANGED SINCE WE REVIEWED IT AT OUR LAST MEETING.
AND THE MARKET CREDIT RISK CORPORATE STANDARD, THERE WERE JUST CHANGES TO THAT TO REFLECT CHANGE IN TITLE OF THE, OF THE PERSON RESPONSIBLE.
SO AGAIN, NOT A MATERIAL CHANGE.
SO THOSE ARE, ARE THE TWO ITEMS THAT ARE BEING BROUGHT FORWARD TO THE BOARD FOR APPROVAL.
THE OTHER MATTERS DISCUSSED DURING THE MEETING PRIMARILY WERE THE BRIDGING SOLUTION OPTIONS FOR WHICH WE'LL BE LOOKING FOR, UH, MORE RECOMMENDATIONS FROM THE, UH, FROM ERCOT AND BRINGING IT FORWARD TO THE BOARD AT THE APRIL MEETING.
AND THE REMAINDER OF THE SESSION WAS DEALT WITH OUR COMMITTEE BRIEFS DEALING WITH WEATHERIZATION RELIABILITY STANDARD, WHICH, UH, WOODY IS WORKING ON THE SYSTEMS OPERATIONS, UPDATE, COMMERCIAL MARKETS, UPDATES MARKET, AND THEN TECHNOLOGY PROJECTS, UH, UPDATE AND THE REVISION REQUEST STATUS.
AGAIN, THERE'S TWO ITEMS FOR APPROVAL AT THE BOARD LEVEL, DEALING WITH THE CHARTER AND THE MARKET CREDIT RISK STANDARD.
SO I NEED A MOTION TO APPROVE THOSE, THOSE TWO.
[13. 2022 Internal Revenue Service Form 990 Questionnaire]
SEAN TAYLOR.WE'LL PRESENT AGENDA ITEM 13, THE 2022 INTERNAL REVENUE SERVICE FORM NINE 90 QUESTIONNAIRE.
THIS IS OUR ANNUAL REMINDER THAT TAX DAY IS RAPIDLY APPROACHING FOR ERCOT PART, WE NEED TO FILE OUR FORM NINE 90 INFORMATION ON TAX RETURN.
THAT WILL BECOME A PUBLICLY AVAILABLE DOCUMENT ONCE IT IS FILED.
IT CONTAINS A HIGH LEVEL DETAIL OF ER ARCHIVE, OPERATIONS AND GOVERNANCE.
WHAT WE REQUEST OF THE BOARD IS TO COMPLETE A QUESTIONNAIRE THAT YOU'LL SOON RECEIVE THAT WILL ALLOW US TO COMPLETE THE FORM NINE 90 COMPREHENSIVELY.
PLEASE RETURN THE COMPLETED FORM TO US BY THE NEXT BOARD MEETING, APRIL 18TH, LATER IN THE YEAR, WE WILL PRESENT THE COMPLETED FORM NINE 90 TO THE BOARD FOR REVIEW.
BEFORE WE FILE IT, IF YOU HAVE ANY QUESTIONS, PLEASE FEEL FREE TO CONTACT JOHN LEVINE OR ME.
[14. Other Business]
UH, THE LAST ITEM BEFORE WE MOVE INTO EXECUTIVE SESSION IS AGENDA ITEM 14, OTHER BUSINESS.WOULD ANY BOARD MEMBER LIKE TO RAISE ANY OTHER BUSINESS? OKAY.
HEARING NONE, UH, AT THIS TIME, THE
[Convene Executive Session]
BOARD WILL ADJOURN GENERAL SESSION AND CONVENE AN EXECUTIVE SESSION.THERE ARE TWO VOTING ITEMS BEING DISCUSSED IN EXECUTIVE SESSION.
WE WILL RECESS EXECUTIVE SESSION AFTER MOST BUSINESS IS DONE TO RETURN TO GENERAL SESSION AND VOTE ON THOSE ITEMS. THE BOARD WILL THEN RECONVENE EXECUTIVE SESSION FOR AN ADDITIONAL MATTER BEFORE ADJOURNING WITHOUT RETURNING GENERAL SESSION.
AGAIN, UH, GENERAL SESSION IS NOW RECESSED AND THE WEBCAST WILL BE SUSPENDED.
SO COMMISSIONER MCADAMS, YOU WANNA HANDLE? UH, W W WE WILL NOW RECESS, UH, THIS SESSION OF THE PUBLIC UTILITY COMMISSION AND RECONVENE, UH, AFTER EXECUTIVE SESSION.
I'M PAUL FOSTER, ERCOT, BOARD CHAIR.
THE GENERAL SESSION OF THIS MEETING IS NOW RECONVENED.
BEFORE WE MOVE ON TO OUR BUSINESS, I WOULD LIKE TO ASK, UM, IS HE HERE? NO.
[01:25:34]
ALL RIGHT.RECON, UH, BEFORE WE BEGIN, I WOULD LIKE TO ASK COMMISSIONER MCADAMS IF HE WOULD LIKE TO RECONVENE THE PUC OPEN MEETING.
AT THIS TIME, THE, THE MEETING OF THE PUBLIC UTILITY COMMISSION IS HEREBY RECONVENED, AND ATTENDANCE IS MYSELF.
[15. Vote on Matters from Executive Session]
YOU.UH, WE HAVE TWO VOTING ITEMS FROM EXECUTIVE SESSION.
FIRST, I'LL ENTERTAIN A MOTION TO APPROVE THE CONTRACT MATTER, DISCUSS AN EXECUTIVE SESSION UNDER AGENDA ITEM E S 2.2 0.1.
AND SECOND, I'LL ENTERTAIN A MOTION TO APPROVE THE LITIGATION REGULATORY MATTER, DISCUSS AN EXECUTIVE SESSION UNDER AGENDA ITEM 7.2 OR E S 7.2.
AT THIS TIME WE WILL ADJOURN GENERAL SESSION.
THE BOARD WILL BE RECONVENING EXECUTIVE SESSION FOR A PERSONNEL MATTER.
THERE ARE NO FURTHER VOTING ITEMS BEING DISCUSSED IN EXECUTIVE SESSION.
SO THE MEETING CAN, CAN ADJOURN AT THE CONCLUSION OF EXECUTIVE SESSION WITHOUT RETURNING TO GENERAL SESSION.
GENERAL SESSION IS NOW ADJOURNED AND THE WEBCAST WILL BE CONCLUDED.
COMMISSIONER MCCANNS, AT THIS TIME, THIS MEETING OF THE PUBLIC UTILITY COMMISSION IS HEREBY ADJOURNED.