[00:00:06]
COVER, UH, APPRECIATE EVERYONE, UM, WORKING WITH US IN TERMS OF CANCELING THIS LAST WEDNESDAY'S TAC MEETING.
GIVEN, UH, THE INTEREST THAT THERE WAS IN THE HOUSE STATE AFFAIRS MEETING THAT DAY, I KNOW, UH, SEVERAL OF US NEEDED TO BE UP THERE AND, AND I KNOW ERCOT DID AS WELL, AND SO APPRECIATE EVERYONE'S, UH, WILLINGNESS TO WORK WITH US ON THAT.
[1. Antitrust Admonition]
ON THE SCREEN, WE'VE GOT OUR ANTITRUST ADMONITION AND OUR DISCLAIMER THERE.UH, IF YOU WANT TO GO AHEAD AND READ THROUGH THAT, I'LL ANNOUNCE THAT WE'VE GOT, UH, NED BINOWSKI SITTING IN FOR IAN HALEY.
I THINK THAT MIGHT BE PERIODIC TIME TO TIME, IS THAT CORRECT? TEMPORARILY? YES.
UH, WE'VE GOT CHRIS HENDRIX, WHO'S PROVIDED HIS PROXY TO JENNIFER SCHMIDT AND RICHARD ROSS HAS PROVIDED HIS ALTERNATE REP DESIGNATION TO BLAKE GROSS.
THAT BEING SAID, UH, BEFORE WE
[Additional Item]
START INTO OUR AGENDA, UM, I KNOW MANY OF YOU ARE ALREADY AWARE, UH, BUT THIS LAST FRIDAY, UNFORTUNATELY, WE LOST A LONG TIME PARTICIPANT IN THE STAKEHOLDER PROCESS.UH, FOR THOSE THAT DON'T KNOW, WALTER REED, WHO HAS BEEN AN INVALUABLE PART OF THE PROCESS, UH, LONGER THAN I'VE BEEN AROUND, AND I'VE BEEN DOING THIS FOR NEARLY 20 YEARS NOW.
UH, WALTER'S BEEN A FIXTURE IN THIS PROCESS ALL ALONG.
AND OVER THE COURSE OF THE YEARS, UH, YOU KNOW, HE'S HAD A LOT OF CONTRIBUTION.
HE'S PROVIDED US WITH A LOT OF, UH, GOOD INFORMATION AND, AND, AND STUFF FOR US TO WORK WITH IN THAT REGARD.
UM, AND HIS LEGACY WILL BE, UH, FOREVER ETCHED ON, ON THIS MARKET, GIVEN ALL THAT HE'S DONE FOR US OVER THE COURSE OF HIS TENURE, NOT ONLY I BELIEVE WITH L C R A, BUT WITH THE WIND COALITION, THE ADVANCED POWER ALLIANCE, UH, AND SO FORTH.
SO I KNOW KEN DONAHUE'S, UH, REAL GOOD FRIEND OF WALTERS, UM, WANTED TO GIVE HIM A FEW MINUTES TO, TO DISCUSS AND PROVIDE SOME THOUGHTS AND, AND INSIGHT, AND THEN ASK THAT ANYONE ELSE THAT HAS ANYTHING TO SAY, MAY, MAY OFFER THAT UP AS WELL.
YEAH, PRETTY SAD DAY LAST WEEKEND.
I MEAN, UM, YOU GET THAT PHONE CALL AND YOU GO, MY GOSH, YOU JUST CAN'T BELIEVE IT.
HE WAS 80, AND I WILL TELL YOU FIRST TIME I EVER MET HIM WAS IN THE EARLY NINETIES.
SO, AND HE WAS INFLUENTIAL AT ERCOT WHEN HE WAS AT ALL C R A INFLUENTIAL WITH THE WIND COALITION WITH APA.
I MEAN, HE HELPED SHAPE TEXAS AND ERCOT THINK ABOUT THAT MANY, MANY YEARS.
SO, AND I, I'VE KNOWN HIM MY WHOLE CAREER.
AND, UH, IT'S GONNA BE INTERESTING, UM, SEEING, NOT SEEING THAT FACE, NOT HEARING THAT VOICE ON THE PHONE, BUT I THINK WE SHOULD CELEBRATE WHAT WALTER HAS DONE AND THINK ABOUT THE GOOD THINGS AND ALL THE INTERACTIONS WE'VE HAD IN THE PAST WITH HIM.
I MEAN, THE FUNNIEST ONE, BACK WHEN COVID FIRST STARTED, AND WE STARTED HAVING ALL THESE MEETINGS, YOU KNOW, AND I'D BE BACK IN MY OFFICE, YOU KNOW, ON A CONFERENCE CALL OR LISTING, AND THEN WALTER WOULD COME UP AND MY WIFE JUTH WOULD SAY, WHO IS THAT? YOU KNOW, MY GOSH, HIS, HIS VOICE CARRIES ALL THE WAY THROUGH THE HOUSE.
THE DOGS WOULD BARK THE WHOLE BIT.
SO IT WAS, YOU KNOW, THAT'S WHAT I REMEMBER MOST OF.
AND WHEN I HAD TO EXPLAIN WHO PASSED ON SUNDAY, I SAID, REMEMBER THE VOICE TO MY, TO MY WIFE? IT, IT WAS INTERESTING.
BUT THINK ABOUT ALL THE THINGS HE'S DONE, ALL THE INTERACTIONS, GOOD, BAD, UGLY.
BUT WALTER WAS ALWAYS ABLE TO SHARE.
I LEARNED A LOT WHEN I WAS A YOUNG ENGINEER ON MANY OF THE ERCOT WORKING GROUPS, ALSO WORKING ON OS AND ALL THE WAY THROUGH.
HOW DO YOU DO IT? HOW DO YOU DO IT? YOU CAN'T USE PAGE DOWN AS LONG AS THE CURSOR THINKS YOU'RE ON THIS SCREEN.
NOW, YOU CAN USE MOUSE WHEEL OR ARROW OR PAGE DOWN.
THAT'S WHAT I REMEMBER WHEN I FIRST CAME TO WORK AS AN ENGINEER.
WALTER BEING YOUNG, KIND, SAME FACE, YOU KNOW, IT DOESN'T MATTER WHETHER IT'S THE OLDER VERSION, YOU SEE IT SO INTERESTING.
HERE'S EVEN A YOUNGER VERSION OF HIM.
NOW, WALTER ALSO, YOU KNOW, HE LOVED HIS FAMILY.
HE LOVED HIS WORK, HE LOVED WHAT HE WAS DOING, AND HE WAS ALWAYS ACTIVE.
AND, AND WHY I CAME TO SUCH A SHOCK LAST WEEK.
BUT WALTER ALSO HAD SOME HUMOR BEHIND HIM, AND IT WAS KIND OF UNUSUAL, YOU KNOW, PRETTY COOL
SO, AND THINK ABOUT WHAT YOUR INTERACTION WITH HIM WHEN WE WERE GONNA GO FORWARD WITHOUT HIM,
[00:05:01]
UH, ALL HIS VOICES AND ALL HIS INPUTS AND SO ON.AND YES, SOMETIMES WE DIDN'T AGREE WITH WALTER.
YOU KNOW, THERE WERE MANY TIMES I DIDN'T EITHER, BUT THEY'RE GONNA HAVE TO THINK ABOUT THAT.
BUT, UH, AGAIN, BOB, DID YOU WANNA COME UP AND SAY SOMETHING? YEAH, I GOT THE HONOR TO TAKE WALTER TO LUNCH BEFORE THE, THE LAST WORKSHOP WE HAD.
UM, I'VE BEEN TRYING FOR TWO YEARS BECAUSE I WANTED TO TELL HIM HOW IMPORTANT HE WAS IN MY CAREER, AND YOU HAD TO DO THAT.
WHAT A LOT OF YOU DON'T KNOW IS I WORKED FOR WALTER BACK AT L C R A, AND HE WAS A VERY INTERESTING INDIVIDUAL.
HE HAD, I THINK AT ONE POINT 1300 PEOPLE THAT REPORTED UP THROUGH HIM, AND HE WAS DIRECTOR OVER POWER PRODUCTION OR WHATEVER LOFTY TITLE HE HAD.
AND HIS OFFICE WAS RIGHT DOWN THE RIGHT DOWN THE HALL FROM MINE.
AND I REMEMBER ONE PARTICULAR MEETING THAT I CALLED, AND WE HAD ABOUT 30 PEOPLE IN THE ROOM, AND I DON'T REMEMBER WHAT THE DECISION WE NEEDED TO MAKE WAS, BUT IT WAS RIGHT ABOUT A 50 50 THING.
AND MANAGEMENT THUMB ON THE SCALE WOULD'VE HELPED A LOT.
SO WALTER COMES INTO THE MEETING AND HE AGREES TO COME IN, AND HE TALKS FOR FIVE OR 10 MINUTES AND, AND HE GETS UP, AND THEN HE LEAVES.
AND I STOPPED THE MEETING AND I SAID, OKAY, NO ONE SAY A WORD.
WHO THINKS WALTER SAID WE SHOULD DO THIS, AND HALF THE HAND, HALF THE ROOM, RAISE HER HAND.
OKAY, WHO THINKS WALTER SAID, NO, WE SHOULDN'T DO THIS, THE OTHER HALF.
AND I SAID, OKAY, LET'S SIT DOWN AND FIGURE THIS OUT.
SO WE CAME OUT, WE FIGURED IT OUT.
I MARCHED DOWN TO WALTER'S OFFICE AND SAID, OKAY, THIS IS WHAT WE, THIS IS WHAT WE DECIDED TO DO.
AND HE SAID, ALL RIGHT, THAT LOOKS BETTER THAN WHAT I WAS THINKING.
AND I SAID, DO YOU KNOW THAT WHEN YOU LEFT THAT MEETING, HALF THE PEOPLE THOUGHT YOU SAID YES, AND HALF THE PEOPLE THOUGHT YOU SAID NO.
AND HE LOOKS AT ME AND KIND OF SMILES AND SAID, DON'T YOU THINK THAT'S THE RIGHT ANSWER? AND I SAID, NO, SIR, I THINK YOU SHOULD TELL US WHAT YOU WANT.
HE SAID, IS THE ANSWER YOU GAVE ME BETTER THAN WHAT I WOULD'VE GOTTEN OTHERWISE? AND HE JUST SMILED.
HE LET US FIGURE IT OUT, AND HE SET US UP TO FIGURE IT OUT.
SO THAT WAS, THAT WAS BIG LIBERTY BELL IN MY HEAD.
LIKE, THAT IS TRUE LEADERSHIP.
DOES ANYBODY ELSE WANNA SAY ANYTHING, CAITLIN OR ANYBODY ELSE? YEAH, CANAN.
OH, AND BY THE WAY, I THINK WALTER'S FAMILY IS ONLINE LISTENING, SO IT'S REALLY GREAT.
I GUESS, UH, I, THERE'S TWO THINGS I I WANTED TO SHARE FIRST.
UM, AND THIS IS LESS IMPORTANT TO ME, BUT, UH, STILL IMPORTANT, UM, WHAT YOU SEE HERE TRANSPIRE IN TERMS OF THE STAKEHOLDER PROCESS.
UM, WALTER HAS HIS HAND PRINTS ALL OVER THAT, UM, AND WAS, UH, UH, AN AMAZING LEADER IN, IN KIND OF GETTING US, UH, WHERE, WHERE WE ARE TODAY.
UM, AND, UH, SO ON BEHALF OF ERCOT, I WANT TO RECOGNIZE THAT MORE PERSONALLY.
UM, YOU KNOW, UH, I WANTED TO JUST SHARE HOW VALUABLE WORKING WITH WALTER WAS TO ME IN, IN MY VARIOUS ROLES.
HE WAS ALWAYS PATIENT WITH ME.
HE HAD INFINITE OPPORTUNITIES TO EMBARRASS ME AND NEVER TOOK THEM.
HE, UH, COACHED ME, AND, UH, HE ALWAYS LISTENED TO WHAT I HAD TO SAY.
SO I TRULY, UH, APPRECIATE HAVING HIM IN MY LIFE AND GETTING TO WORK WITH HIM.
I THINK ALL THE LOVE GOING OUT TO HIM AND HIS FAMILY IS AMAZING, AND EVERYBODY, WE'RE GONNA REMEMBER THIS FOR A LONG TIME, BUT DID YOU KNOW ST.
PATRICK WAS THE PAINTER AND SAINT OF ENGINEERS? DID YOU KNOW THAT? I JUST HAD THIS FUNNY FEELING THAT WALTER IS UP THERE HELPING SAT AND PATRICK OUT.
CAN YOU HEAR THAT VOICE RIGHT THERE IN HIS EAR? CAN YOU SO THINK ABOUT THAT, AND I THINK WE'RE GONNA REMEMBER THAT VOICE AND HIM FOR A LONG TIME.
SO, ANYBODY ELSE? BILL, THANKS AGAIN.
APPRECIATE THE WORDS CLIFF CANAN, BOB.
UM, I, MY, MY FOND MEMORIES OF WALTER, BESIDES THE BOOMING VOICE, WHICH THERE IS NO COMPARISON.
UM, IT JUST MAKES YOU REFLECT ON HOW YOU GOT TO WHERE YOU ARE.
AND WE ALL KNOW THE MATERIALS THAT WE WORK
[00:10:01]
WITH THIS CONTENT, THERE'S NO TEXTBOOK FOR IT.A LOT OF WHAT WE LEARNED COMES FROM THE KNOWLEDGE OF THOSE THAT CAME BEFORE US, LIKE WALTER, AND FOR HIM TO SHARE HIS KNOWLEDGE WITH US, THAT CARRIES ON, RIGHT? THAT'S, THAT'S HOW WE GROW.
THAT'S HOW WE IMPROVE ON THIS MARKET DESIGN.
AND, UM, AND LEARNING FROM, FROM FOLKS LIKE WALTER.
AND HE WAS ALWAYS GENEROUS WITH HIS KNOWLEDGE.
UM, WHAT I WOULD, MY MEMORIES OF WALTER ARE, I THINK HE WAS PROBABLY THE MOST SUCCESSFUL RENEWABLE ADVOCATE IN THE ERCOT STAKEHOLDER PROCESS.
AND I THINK BACK TO THE 2008 DAYS WHEN THERE ARE A LOT OF TECHNICAL ISSUES REGARDING INTEGRATION OF WIND.
AND HE WAS THE LEADER IN GETTING THOSE CHANGES ADOPTED AND WAS HUGELY SUCCESSFUL IN, UH, THE, THE AMOUNT OF WIND PRODUCTION THAT HAS BEEN DEVELOPED IN THIS STATE AND ALLOWING ERCOT TO BE, TO OPERATE IT RELIABLY.
SO MAJOR CONTRIBUTIONS TO THE MARKET THAT WE'RE IN.
UM, AND WE OWE IT TO FOLKS LIKE WALTER FOR THE SUCCESS THAT WE HAVE TODAY.
SO APPRECIATE THE OPPORTUNITY TO HAVE THE WORDS.
YEAH, JUST TO ECHO A LOT OF WHATEVER ONE SAID HERE TODAY, UH, WALTER HELPED ME, YOU KNOW, I'VE LEARNED A LOT FROM WALTER.
WALTER REALLY IN THE LAST FEW YEARS, HAS HAD MORE, YOU KNOW, A GREAT IMPACT ON, ON WHAT I KNOW AND WHAT I'M DOING.
WHEN I MADE THE TRANSITION FROM THERMAL TO RENEWABLES, YOU KNOW, AS YOU SAID, YOU KNOW, HE WAS THE BEST ADVOCATE AND HE WAS ONE OF THE SMARTEST GUYS I KNOW, AND HE HELPED ME OUT TREMENDOUSLY IN, IN, IN TRYING TO MAKE THAT TRANSITION AND LEARNING.
AND, YOU KNOW, BEFORE THEN, WE'VE ALL HAD OUR UPS AND DOWNS.
AND I THINK THAT EVEN HERE TODAY IN HONORING WALTER, IT SHOWS THAT HE IS A PART OF THIS FAMILY, AND THIS IS A FAMILY.
IT'S UNLIKE A LOT OF PLACES ACROSS THIS COUNTRY.
WE SIT HERE, WE ARGUE, WE DO EVERYTHING, BUT WE COME TOGETHER TO FAMILY TO HONOR SOMEONE AS GREAT AS WALTER.
ANYBODY ELSE? OKAY, I WANT TO, EVERYBODY, LET'S CELEBRATE HIS LIFE, NOT HIS DEATH.
I MEAN, WALTER WAS TRAVELING QUITE A BIT BEFOREHAND.
I LEARNED A LOT FROM HIM JUST ABOUT THAT TOO.
IT'S ABOUT LIVING OKAY, BUT HE'S GONNA BE REMEMBERED AND MISSED FOR A LONG TIME.
UH, FOR THOSE NOT AWARE, THERE IS A CELEBRATION OF LIFE ON APRIL 8TH.
FOR THOSE THAT MAY WANT THE INFORMATION AND HAVEN'T RECEIVED IT ALREADY, PLEASE REACH OUT TO ME OR CAITLIN, UH, KEN GENE RELE.
UH, SO THERE'S A NUMBER OF US HAVE THAT INFORMATION, SO PLEASE LET US KNOW IF, IF YOU NEED IT.
UM, JUST WANTED TO SAY, YOU KNOW, TO THE POINTS THAT HAVE ALREADY BEEN MADE, WE MAY NOT HAVE ALWAYS SEEN THE SAME SIDE OF THE COIN.
UH, WHENEVER WE'VE HAD DISCUSSIONS WHEN WE WERE TALKING WITH WALTER ABOUT THINGS, BUT I WILL SAY ONE THING ABOUT HIM IS HE WAS ALWAYS RESPECTFUL OF YOUR OPINION AND ALWAYS WILLING TO WORK WITH YOU.
AND YOU MAY HAVE GONE DIFFERENT DIRECTIONS IN TERMS OF THE END OF THAT CONVERSATION, BUT IT WAS ALWAYS A RESPECTFUL CONVERSATION.
AND THE ONE THING I DO WANT HIS FAMILY TO KNOW, I KNOW THAT THEY ARE LISTENING.
UH, WE WILL HAVE A HUGE HOLE TO PHIL.
I MEAN, THE FACT THAT HE'S NOT HERE IS A HUGE HOLE FOR US TO FILL WITHIN THIS, WITHIN THIS FAMILY.
UM, AND WE WILL FOREVER BE GRATEFUL FOR HIS CONTRIBUTIONS.
SO WE WANT TO SAY THANK YOU FOR SHARING WITH US OVER THE YEARS AND, AND HOPE YOU UNDERSTAND HOW APPRECIATIVE WE ARE OF THAT.
THANK YOU TACK, JEAN, THANKS VERY MUCH FOR, FOR BRINGING THIS UP TO US.
WE WILL MOVE BACK TO THE BUSINESS, UH, AT THIS POINT NOW.
[2. Credit Finance Sub Group (CFSG) (Possible Vote)]
AND GET STARTED WITH THE CREDIT FINANCE SUBGROUP.UH, IF YOU REMEMBER, UH, LAST MEETING, WE WENT AHEAD AND SET UP OUR CREDIT FINANCE SUBGROUP.
WE WANTED TO GO AHEAD AND START CONFIRMING MEMBERS SO THAT THEY CAN START WITH THE PROCESS OF, UH, ELECTING THEIR OWN LEADER, UH, UH, LEADERSHIP AT THIS POINT.
AND SO THAT BEING SAID, I THINK WE'VE GOT A CAST OF CHARACTERS TO GO AHEAD AND PRESENT.
BRENDAN, ARE YOU AVAILABLE? UH, YES, I AM HERE.
COREY'S GOT YOUR PRESENTATION UP.
SO I'LL SAY AS LITTLE AS POSSIBLE.
UH, I GOT THESE OVER THE PAST COUPLE WEEKS.
[00:15:03]
OKAY, SO WE'VE GOT A COUPLE OF QUESTIONS OR MAYBE A MOTION, UH, BILL.YEAH, JUST I HAD A COUPLE CORRECTIONS, UM, AMME, UH, YEAH, AMIR AND LORETTO ARE INDEPENDENT RETAIL, ELECTRIC PROVIDERS, CHEST ENERGY AND RELIANT.
WANNA MAKE SURE THAT'S REFLECTED PROPERLY.
AND ALSO IT LOOKS LIKE WE GOT A, A LATE NOMINATION FROM CPS.
UH, I WANNA MAKE SURE THAT JIMMY JIMMY'S ON THE LIST AS WELL.
HE, HE SENT IT TO THE CREDIT WORK.
I, I, I GOT A COUPLE, I JUST WANTED TO GET THESE SLIDES IN SO THEY COULD BE POSTED, BUT YEAH, I THINK I, I HAVE THREE OR FOUR MORE AND I'LL, I'LL JUST, UM, OH, SORRY.
I DIDN'T REALIZE YOU HAD SOME EXTRAS TO ADD THAT WE VOTE ON.
I, I'LL, YEAH, I'LL MAKE A MOTION WHENEVER THE TIME'S ARRIVED.
AND, AND MY, AND MY THOUGHT IS, YOU KNOW, WE'LL JUST APPROVE MEMBERS ON A ROLLING BASIS.
I'LL JUST HAVE A SLIDE LIKE THIS, YOU CAN LOOK AT IT AND, UM, OKAY.
SO IS YOUR, IF THAT'S, IS YOUR INTENT, BRENDAN, TO GO AHEAD AND JUST HAVE US APPROVE THOSE AND THEN BRING YOUR NEW ONES TO OUR NEXT MEETING? UH, YEAH, IF THAT'S OKAY, THAT'S FINE WITH ME, IF THAT'S FINE WITH TACK.
YEAH, JUST MORE CLARITY THAT WE HAVE, UH, SOMEBODY WHO APPLIED ALSO TO BE ON THERE, SO I JUST WANNA MAKE SURE THIS WAS NOT THE FINAL LIST.
NO, THIS, YEAH, NO, IT'S NOT GREAT.
I'LL, AND I EXPECT AFTER OUR NEXT MEETING, YOU KNOW, WE'LL LET PEOPLE KNOW TO GET THEIR APPLICATIONS IN TOM AND OKAY.
VERY WELL, YEAH, I WANNA MAKE SURE WE'VE GOT AN ORGANIZED PROCESS, SO I WANNA MAKE SURE WE'RE NOT ADDING PEOPLE ON THE FLY AT THIS POINT.
SO IF WE CAN JUST START WITH THIS LIST, THAT WOULD BE MY RECOMMENDATION, AND THEN WE CAN GO AHEAD AND APPROVE ANY ADDITIONS AT OUR NEXT MEETING AND ON AN ONGOING BASIS, AS BRENDAN POINTED OUT.
SO, SO, LOOKS LIKE THE QUEUE IS EMPTY.
I HAVE A MOTION TO APPROVE OR ADD TO THE COMBO BALLOT.
SECOND, I DON'T KNOW IF WE'LL HAVE A COMBO BALLOT YET, SO WE'LL JUST GO AHEAD AND DO THAT MOTION RIGHT NOW.
SO IS BILL AND WHO'S THE SECOND? UH, WHO'S IAN'S? MY SECOND.
SO, SO BILL MOVES FOR APPROVAL.
ANY COMMENT ON THE MOTION? OKAY.
SEEING NONE, COREY, TAKE IT AWAY.
WE WILL BEGIN UP WITH THE CONSUMERS, WITH MARK.
WHAT ABOUT ERIC? ERIC NARAJ? YES.
UH, SUSIE'S CHECKING FOR THAT SHOULD GO BACK.
UNDER OUR INDEPENDENT GENERATORS.
UNDER OUR IUS, KEITH, KEITH, COLIN? YES.
AND THEN BLAKE FOR RICHARD? YES, THANK YOU.
ONTO OUR MUNIS, JOSE? YES, THANK YOU, DAVID.
YOU TOLD ME ALICIA WASN'T GONNA BE HERE UNTIL RIGHT LATER.
[00:20:01]
LET'S SEE RUSSELL LATER.OKAY, THAT'S HOW EARLY VOTES GO.
LET'S JUMP UP TO THE TOP AGAIN.
ALL RIGHT, COREY, THIS IS SUSIE.
UH, I DID, I DO HAVE THAT, UH, ALT REP DESIGNATION FOR KATIE, FOR MIKE WISE.
AND THEN LAST CALL FOR BILL SMITH OR ERIC GOFF.
ANYTHING ELSE YOU WANNA BRING UP, UH, BEFORE WE CLOSE OUT THIS ITEM? BRENDAN JUST MENTIONED THAT, UM, YOU KNOW, LORETTO AND I ARE GONNA BE THE LEADERSHIP AND, UM, THAT'S, I DON'T KNOW IF YOU NEED TO VOTE ON THAT, BUT WE RAN UNOPPOSED, SO, UH, OKAY.
IAN, WE SHOULD HAVE DONE A COMBO BALLOT.
OH, YEAH,
YEAH, CFS, CF, CFS G ACTUALLY, CFS G COULD NOT VOTE ON IT BECAUSE THEY DID NOT HAVE MEMBERS, SO WE'RE GONNA HAVE TO BRING THIS BACK AT THE NEXT MEETING OR WHATEVER.
WE'LL, UH, WE'LL GO AHEAD AND, UH, GET YOU, GET YOU SWORN IN NEXT NEXT MEETING.
OKAY, SO THAT CLOSES OUT THAT AGENDA ITEM.
UH, WANTED TO SAY THANKS TO EVERYONE TO GETTING THAT TURNED AROUND AND GETTING MEMBERSHIP REGISTRATIONS IN.
SO I HOPE TO SEE THAT LIST GROW VERY RAPIDLY AND GET TO BE A PRETTY FULL LIST OF MEMBERS HERE BEFORE TOO LONG.
[3. Phase 2 Bridging Options (Possible Vote)]
MEAT OF TODAY'S MEETING, UH, PHASE TWO BRIDGING OPTION.SO WE'LL START OUT WITH THE ERCOT RECOMMENDATION, TALK ABOUT HOW WE DEVELOP ATTACK RECOMMENDATION, AND THEN TALK ABOUT HOW WE PRESENT TO THE RELIABILITY AND MARKETS COMMITTEE.
UH, SO THAT BEING SAID, WE'LL START OFF WITH CANON, AND THEN CAITLIN AND I HAVE DEVELOPED WHAT WE THINK MIGHT BE A PLAUSIBLE, WORKABLE SOLUTION FOR TRYING TO DEVELOP ATTACK RECOMMENDATION.
I'M GONNA MOVE THROUGH SOME OF THIS RELATIVELY QUICKLY, UH, CUZ THIS, THIS PART OF THE PRESENTATION'S BEEN AROUND FOR A WHILE.
UM, SO, UH, I THINK THE, THE KEY THING IS THAT WE'VE HAD KIND OF TWO WORKSHOPS TAKING FEEDBACK AND INPUT FROM STAKEHOLDERS.
UH, AND WE, UH, BASED ON THAT DID MAKE SOME MODIFICATIONS TO, TO OUR PROPOSAL.
UM, UH, I JUST WANT YOU TO KEEP IN MIND THAT, UH, KIND OF THE BENEFITS FROM OUR VIEWPOINT ARE, UH, THAT THIS WOULD RETAIN EXISTING ASSETS, UM, POTENTIALLY ADD NEW DISPATCHABLE GENERATION.
UM, AND, UH, LASTLY, UH, REDUCE THE RUCK COMMITMENT.
UM, WE BELIEVE WE'VE CHECKED OFF OUR, UH, UH, GOALS OF, UH, HAVING MINIMAL SYSTEM CHANGES, UH, AND THAT IT FITS WITHIN THE EXISTING, UH, MARKET FRAMEWORK.
AND, UH, THE FEEDBACK THAT YOU GAVE US WAS THAT, UM, YOU KNOW, IT NEEDS TO BE KINDA HEDGEABLE AND, UH, WORK WITHIN MARKET PARTICIPANTS ENERGY POSITIONS.
SO, UM, THIS IS SOME OF THE ANALYSIS THAT WE WERE ASKED, ASKED TO DO.
UM, I DON'T, I DON'T KNOW IF I NEED TO TO WALK THROUGH THE RESULTS, BUT, UM, WE DID CHECK TWO YEARS, UH, AND, UH, WE'RE LOOKING TO, UH, HAVE A YEAR WITH RELATIVELY TIGHT CONDITIONS AND, UM, SOME, SOME STRESS ON THE SYSTEM AS WELL AS A MORE MILD YEAR.
UM, AND SO THAT'S WHY WE CHOSE 2022 AND 2020.
UM, AND YOU CAN SEE THE IMPACTS ON THE LOAD WEIGHTED ENERGY PRICE.
[00:25:01]
UM, SO OUR ORIGINAL, UH, PROPOSAL WAS, UM, UH, BASED ON THIS, BUT THIS IS, YOU KNOW, WHEN WE LOOKED AT 2020, KIND OF THE RESULTS OF, OF THE ORIGINAL PROPOSAL.I'M GONNA SKIP PAST THIS SLIDE UNLESS SOMEBODY HAS A QUESTION THAT THEY'D LIKE TO ASK ON THIS.
JUST TO MAKE SURE WE'RE INTERPRETING THIS CORRECTLY.
THE, WHERE THE BLUE LINE IS, EVERY GRAY DOT WOULD THEN BE INCREASED TO THAT BLUE LINE, THE YES, THAT IN THE SHADED AREA.
I NEED TO BE CAREFUL ABOUT THAT.
UM, SO THE, THE CHANGE THAT WE'RE PROPOSING AFTER CONSIDERING FEEDBACK IS TO, UH, ADJUST FROM JUST ONE FLOOR TO TWO.
SO THE FLOOR WOULD BE $20 BETWEEN, UH, I GUESS 3060 $510, BETWEEN 60 507,000 MEGAWATTS OF O R D C RESERVES.
SO THIS IS, UM, UH, WAS IN COMMENTS MADE THAT, UH, PEOPLE WERE INTERESTED IN MORE OF A CURVE, UH, AND, AND SOME VARIATION IN, IN THE PRICING OUTCOMES AND NOT JUST, UH, KIND OF DROP OFF THE CLIFF WITH, WITH NO ADJUSTMENT.
UM, SO THIS, UH, IS A VISUAL REPRESENTATION OF OUR PROPOSAL.
IT APPLIES TO THE 2020 OBSERVATIONS BELIEVE.
UM, UH, AND, AND WE SHOWED THAT FROM AN ILLUSTRATIVE PURPOSE, THE ULTIMATE, UM, AGAIN, WE DID THE ANALYSIS ON TOTAL REVENUE INCREASE AND THIS, UH, FOR 20, WAIT, I SKIPPED THE 2020, SORRY.
UM, FOR 2020, UH, BASED ON A BACKCAST.
SO, UH, I AM NOT CAPTURING BEHAVIORAL ADJUSTMENTS, UH, IN, IN THIS ANALYSIS.
UH, WE EXPECT AROUND $500 MILLION IN A TOTAL REVENUE INCREASE.
AND IN 2022, WE SAW $490 MILLION OF REVENUE INCREASE WITH THIS.
UM, SO REMEMBER 2020 IS THE LESS SCARCE YEAR, ACTUALLY.
UM, UH, SO I THINK THAT IT, IT MAKES SENSE THAT A FLOOR WOULD HAVE A LARGER IMPACT ON A LESS SCARCE YEAR.
UM, AND THEN, BUT, BUT THE RESULTS, THE, THE KEY THING FOR US WAS THAT THE RESULTS ARE BROADLY SIMILAR IN, IN THE TWO YEARS.
SO, UH, THERE IS SOME INDEPENDENCE FROM, UH, YOU KNOW, A LOT OF SCARCE INTERVALS VERSUS, UH, A LOT OF, UH, UH, RELATIVELY FEW SCARCE INTERVALS IN, IN ANOTHER YEAR.
UM, WE DID, UH, PER, UH, REQUESTS FROM STAKEHOLDERS, UH, DEMONSTRATE WHERE THE ADDITIONAL REVENUE GOES.
UM, SO ABOUT 80% OF THE ADDITIONAL REVENUE WOULD GO TO DISPATCHABLE RE RESOURCES.
UM, UH, WITH THIS CHANGE, THAT DOES NOT MEAN ADDITIONAL REVENUE DOES NOT GO TO OTHER RESOURCES, IT'S JUST PROPORTIONALLY LESS.
SO AGAIN, UM, WE BELIEVE THIS, UH, PROPOSAL ADDRESSES OUR, UH, GOALS AND TARGETS THAT WE LAID OUT AT THE BEGINNING.
AND I'M HAPPY TO TAKE ANY OTHER QUESTIONS ON THE GENERAL.
SO STARTING TO LINE UP A QUEUE.
SO WE GOT SHAMS FOLLOWED BY BILL, FOLLOWED BY BOB, AND CARRIE CARRIE'S IN A QUEUE.
SORRY, CARRIE, I COULDN'T SEE YOUR CARD, SO YEAH, CAN, OOPS.
OH, OH, THAT ONE, THAT ONE, THAT ONE.
UH, COULD YOU REMIND US WHY IT SCATTERS SO MUCH? THE RDC THE ADDER? I CAN'T REMEMBER EXACTLY, YOU KNOW, THE SCATTER GRAPH WE ASK YOU ABOUT THIS ONE? YEAH.
WHAT, WHAT WAS THE QUESTION AGAIN? WHY DOES IT SCATTER SO
[00:30:01]
MUCH? I MEAN, INSTEAD OF LIKE THE FOLLOWING THE RDC CURVE, I CAN'T RECALL NOW EXACTLY WHY THAT HAPPENS.YEAH, SO THE DIFFERENCE RATE THERE IS THIS IS LOOKING AT THE ONLINE ADDERS, SO REALLY WHAT'S DRIVING THE DIFFERENCE, PARTICULARLY THE, I WOULD SAY THE VERTICAL MOVEMENT FOR ANY GIVEN LEVEL OF ONLINE RESERVES IS THE LEVEL OF OFFLINE RESERVES AT THAT PARTICULAR POINT IN TIME.
AND I GUESS ON THAT FUEL MIX PORTION, UM, YOU KNOW, WHEN I LOOKED AT THAT SLIDE, IT WASN'T VERY CLEAR TO ME.
UM, YOU MIGHT WANT TO JUST ADD SOME MORE SAYING THAT THIS IS THE ADDITIONAL REVENUES THAT'S BEING DISTRIBUTED TO THE DIFFERENT FUEL MIXES, JUST AS A FOR FUTURE PRESENTATIONS LIKE THAT, THAT'S ACTUALLY REALLY HELPFUL FEEDBACK.
UM, AND YOU'LL SEE, YOU'LL SEE A RESPONSE TO THAT IN, IN WHAT WE PRESENT TO THE BOARD.
AND I WAS WONDERING WHY THE POWER STORAGE, UM, IS GETTING SO LITTLE.
I MEAN, IT'S JUST BECAUSE THE MEGAWATTS ARE SO SMALL.
SO REMEMBER, THIS IS A BACKCAST ON 2022 AND 2020, WE DIDN'T HAVE ANY, SO I BELIEVE IN 2022 THERE WAS 300 MEGAWATTS OKAY.
THAT SHOULD PLAY OUT DIFFERENTLY IN, IN THE FUTURE.
AND MY FINAL QUESTION IS, YOU KNOW, UM, SO DID YOU GUYS CONSIDER MAYBE A FLOOR AT THE BEGINNING OF THE RDC, YOU KNOW, LIKE, UM, WHERE THE M MCL ENDS AND THEN JUST HAVING A FLOOR MAYBE TO 3,500 MEGAWATTS OR SOMETHING? SO THAT WOULD BE, I GUESS, MORE IN LINE WITH WHAT PCM IS TRYING TO DO.
SO WE, WE DID GO THROUGH THAT.
WE, THERE WERE COMMENTS I THINK FROM, UH, SHELL ON THAT AND, AND MAYBE YOU AS WELL.
AND, UM, ULTIMATELY WE WERE TRYING TO FIT WITHIN THAT THE DOLLAR RANGE THAT I, THAT I SHOWED HERE, AND THAT WOULD PUSH IT, UH, UH, PRE PRETTY HIGH.
UM, THAT MIGHT BE SOMETHING TO KEEP IN MIND, UH, AS, AS WE ANALYZE, AGAIN, THIS IS A BACKCAST, BEHAVIORAL CHANGES ARE LIKELY GONNA CHANGE THESE NUMBERS.
UM, I WOULD EXPECT THAT WE ANNUALLY REVIEW THIS, UM, AND THAT MIGHT BE SOMETHING WE NEED TO RECONSIDER.
UM, WE DID THINK THAT HAVING, PUTTING TWO FLOORS IN PARTIALLY ADDRESSED THAT, BUT IT DID NOT FOCUS AS NEAR, UH, YOU KNOW, THAT M MC AS YOU'RE POINTING OUT.
YEAH, NO, I LIKE THIS PROPOSAL BECAUSE IT DOES ADDRESS THE ANSLEY SERVICE DEMAND CURVE ISSUE, SO IT'S SHOWING SOME VALUE FOR THE NONS SPIN.
UM, BUT I MEAN, IT'S POSSIBLE THAT WE COULD STILL GET THE SAME DOLLARS BY ADJUSTING THESE DOWN AND THAT ADDING THAT PORTION.
BUT JUST A THOUGHT, I, I MEAN, THIS PROPOSAL LOOKS PRETTY DECENT THE WAY IT IS.
I, I, I MEAN, WHAT I WOULD SHARE WITH TACK IN GENERAL IS WE ARE HAPPY TO ENGAGE, UH, AND, UH, I, I THINK WE'RE GONNA HAVE TO REPORT OUT TO THE COMMISSION, SO, UH, ON, ON THIS, ON, ON SOME BASIS.
SO WE WOULD COMMIT TO KEEPING THIS AS SOMETHING WE WOULD WANNA CONSULT WITH YOU ON, UH, IN, IN THE FUTURE.
WE'RE GONNA PAUSE FOR A PROGRAMMING NOTE.
UM, RECEIVED WORD THAT WE, THERE'S A WHITE ACURA SUV WHOSE ALARM KEEPS GOING OFF OUT IN THE PARKING LOT, SO IF THAT'S YOURS, YOU MAY WANNA CHECK.
OKAY, WE WILL MOVE BACK TO THE QUEUE AFTER THAT PAUSE.
SO, BILL AND KENAN, I THINK I KNOW THE ANSWER TO THIS, BUT THE, THE MERITS OF INSTALLING A FLOOR VERSUS, UM, WHAT I WOULD CONSIDER A, MAYBE A MORE PRECISE CHANGE WHERE WE'RE INCREASING VOL, UM, ABOVE CAP, WHICH I THINK IS CONSISTENT WITH SOME PRIOR RECOMMENDATIONS, MAYBE FROM THE IMM IT, THE MERITS OF A FLOOR VERSUS THAT APPROACH IS AT EASE OF SYSTEM IMPLEMENTATION AND TIMING OF SYSTEM IMPLEMENTATION.
I THINK IF WE WENT DOWN THE ROUTE OF INCREASING VOL, WHICH I, I I THINK WE WOULD PROBABLY PREFER AS A BETTER SOLUTION, THEN WE'D HAVE TO GO THROUGH THE PROCESS OF ANALYZING, WELL, WHAT VOL LEVELS DO WE WANT? DO WE WANT 10 20? WHAT'S, WHAT, WHAT DOES THAT SHAPE LOOK LIKE? WELL, THIS IS, IT'S SIMPLER TO UNDERSTAND, BUT I JUST WAS WONDERING WHAT ERCOT, UH, THOUGHT PROCESS WAS, UH, ON A FLOOR VERSUS A VOL INCREASE OF ABOVE CAP.
UM, SO, UH, I, I THINK VOL, UH,
[00:35:01]
UH, CHANGE IS, IS WORTH INVESTIGATING AS FAR AS, UH, IMPLEMENTATION COMPLEXITY.IT, IT'S SIMILAR TO, UM, SIMILAR TO, UH, WHAT, WHAT WE'RE DOING HERE.
AS I UNDERSTAND IT, DAVE, UH, IT SO THAT THAT'S NOT IT.
UM, FOR US, THE IDEA WAS REALLY TO FOCUS ON, ON OF, OF MAINTAINING ONLINE PRICES AT A, UH, AT, AT A PREDICTABLE LEVEL, UH, TO HELP WITH RUCK AND MOVE REVENUE TO, UH, RESOURCES THAT ARE THERE IN, IN THE SCARCE TIME.
SO, UH, VA WOULD ALSO DO THAT, BUT VA WITHOUT SOME ADDITIONAL CHANGES ON THE BACKEND WILL ALSO INCREASE TAIL PRICES A AS WELL.
SO WE REALLY WERE TRYING TO FOCUS ON NEAR SCARCE INTERVALS, UH, AS, AS WE WORKED ON THIS.
AND THEN MY FOLLOW UP QUESTION, WHAT TIMING OF IMPLEMENTATION WOULD YOU EXPECT? OBVIOUSLY WE'RE, IT'S ALMOST APRIL AND WE'VE GOT SUMMER IN A FEW MONTHS, AND THERE'S CONCERNS ABOUT IMPACTING CONTRACTS THAT, UM, EXTEND THROUGH SUMMER.
WOULD THIS BE SOMETHING THAT WE DO AFTER THE SUMMER AND THE FALL, OR WHAT, WHAT ARE YOUR THOUGHTS ON TIMING AND HOW QUICKLY COULD YOU IMPLEMENT IT? WE THINK THIS IS AROUND A THREE TO FOUR MONTH IMPLEMENTATION TIME PERIOD.
AND THE COMMISSION HAS SAID THAT THEY WANNA WAIT AND SEE WHAT THE LEGISLATURE DOES BEFORE MOVING ON A BRIDGE SOLUTION.
SO FOR US, THAT LOOKS LIKE THE SEPTEMBER OCTOBER TIMEFRAME OF DELIVERY.
THAT, THAT WOULD BE OUR STRONG PREFERENCES.
IF WE DO CHANGE THE RDC, WE WAIT UNTIL AFTER SUMMER, SO THANKS.
IS I, I WANNA MAKE SURE THAT'S CAPTURED SOMEWHERE.
IS THAT IN YOUR COMMENTS ANYWHERE? UM, OKAY.
UH, DAVE, MAYBE WE CAN PUT THAT IN SOME NOTE OR SOMETHING AS WE SPEAK WITH THE BOARD, AND I COULD ADD THAT AS A, MAKE A FRIENDLY AMENDMENT TO MY OWN COMMENTS AND ADD A DATE CERTAIN AFTER SUMMER FOR ANY O R D C ENHANCEMENTS.
I, I JUST, I, I, I'M GONNA, WE'LL, WE'LL REMEMBER IT, BUT I, I THINK THAT'S IMPORTANT THAT I OKAY.
THANKS FOR SOME OF THE QUESTIONS ALREADY COME THROUGH.
JUST, JUST REAL QUICKLY, THIS IS REALLY SIMPLE ONE, UH, WITHOUT THE, THE, THE PLOTTING AND EVERYTHING, DO YOU HAVE A SINGLE LINE OF WHAT THE CURVE WOULD ACTUALLY LOOK LIKE? A SINGLE, UH, YOU KNOW, JUST, YOU KNOW, LIKE I I, WE, WE HAVEN'T PRODUCED THAT, BUT WE CAN, OKAY.
YEAH, THAT MIGHT BE SOMETHING JUST SO EVERYBODY COULD SEE EXACTLY THE WAY THE SHAPE LOOKS WHENEVER YOU PUT THAT.
SOUNDS LIKE YOU'RE, YOU'RE SETTING US UP FOR SOMETHING THERE, BOB.
WELL, I MEAN, I GUESS THE, IT'S PRETTY EVIDENT, BUT I JUST THOUGHT, YOU KNOW, FOR A VISUAL WHEN YOU GET TO THE BOARD, THAT MIGHT BE SOMETHING THAT'D BE WORTH HAVING OUT THERE.
YEAH, I, I GUESS I, I, I UNDERSTAND WHAT YOU'D LIKE TO SEE.
I WOULD SAY THAT THAT WOULD BE ENTIRELY ILLUSTRATIVE.
THE KEEPING OBVIOUSLY HAN'S QUESTION BEFORE, THERE'S NO SUCH THING AS SORT OF A SINGLE CURVE DESPITE THE WAY WE LIKE TO TALK ABOUT THE RDC BECAUSE OF THE, THE PARTICULAR OUTCOME AND, AND THE, THESE TWO ADDERS.
BUT, BUT WE CAN PUT TOGETHER SOMETHING ILLUSTRATIVE THAT YEAH, THAT, THAT'S REALLY WHAT I WAS TALKING ABOUT WAS ILLUSTRATIVE, JUST TO KIND OF GET AN IDEA SO THAT EVERYBODY COULD BE ON THE SAME PAGE FOR WHAT THAT ACTUALLY LOOKS LIKE FROM AN ILLUSTRATIVE STANDPOINT.
ALL RIGHT, CARRIE, YOU'RE NEXT.
UH, CARRIE BIVINS WITH POTOMAC ECONOMICS.
UM, I HAVE A COMMENT AND THEN A PROPOSED MODIFICATION.
UM, AND IN READING ALL THE COMMENTS FROM FOLKS AND CONVERSATIONS THAT WE'VE BEEN HAVING, I HEAR A LOT OF THEM OF DISCUSSION ABOUT, UM, MAKING CHANGES SO THAT EVERY YEAR WE HIT NET CONE.
AND I JUST WANT TO BE CLEAR THAT YOU WOULD NOT EXPECT TO CLEAR NET CONE IN A CAPACITY MARKET UNLESS YOU ARE NOT MEETING THE RELIABILITY STANDARD.
AND SO WHAT I WOULD PROPOSE IS TO PUT GUARDRAILS ON THIS, UM, MODIFICATION OF THE RDC.
IF YOU LOOK AT THE E THREE REPORT, UM, WE'RE CURRENTLY MEETING A ONE IN 30 YEAR STANDARD, AND THIS 470 MILLION THAT THEY HAVE IN THEIR LONG RUN EQUILIBRIUM CASE IS MODELING, UH, A SCENARIO IN WHICH SYNERGY ONLY MARKET DOES NOT MEET THE ONE IN 10 STANDARD.
UM, I UNDERSTAND THAT THERE WILL BE PRESUMABLY IN SOME PCM, A SLOPE DEMAND CURVE.
AND SO I WOULD EVEN COMPROMISE AND SAY,
[00:40:01]
PUT SOME GUARDRAILS ON THAT, SAY AT BEGINNING OF THE YEAR OR CUT LOOKS OUT A YEAR AND SEES IF WE ARE MEETING A ONE IN 20 STANDARD, AND IF WE ARE, THEN NOT APPLY THE FLOOR THAT YEAR BECAUSE I DON'T THINK IT'S REASONABLE TO ADD ANOTHER $500 MILLION INTO 2022, WHICH IS YEAR IN WHICH WE'RE MEETING A ONE IN 30 YEAR STANDARD AND WE ARE CLEARING 60% OVER CONE.AND THAT WOULD PUT SOME, UH, PROTECTIONS OVER THIS PROPOSAL SO THAT IT'S NOT JUST A WINDFALL, THAT IT ACTUALLY HAS SOME BEARING ON THE ACTUAL, YOU KNOW, RELIABILITY OF THE SYSTEM.
I GUESS I WOULD, I WOULD HAVE PROBABLY THREE, THREE COMMENTS TO THAT.
UM, THE FIRST THING IS THAT ACTION WOULD, UH, SUSPEND THE RUCK BENEFIT AS WELL.
UM, SO I THINK THAT THAT WOULD BE ONE THAT I WOULD SHARE.
THE SECOND IS THAT, UM, AT LEAST AS I'VE WATCHED THE DISCUSSION, THERE IS A DESIRE TO DO SOMETHING NOW DURING THE BRIDGE.
SO THIS WOULD POTENTIALLY DELAY DOING ANY, UH, UH, ANY, UM, ADJUSTMENTS.
AND THEN THE LAST ONE IS THAT, UH, UH, IF YOU DO WANNA DO SOMETHING FOR DISPATCHABLE RESOURCES THAT WOULD SUSPEND THAT ACTIVITY AS WELL.
UM, I THINK THE DEMAND CURVE PART IS, IS A GOOD, UH, GOOD ADDITION OR FEATURE.
SO IF WE WERE GONNA DO THAT, OR IF TAC WANTS TO DO THAT, I THINK INCLUDING THAT WOULD BE IMPORTANT.
AND I, I THINK SHE SHOULD GET A RIGHT TO REBUT ME
UM, YEAH, I, TWO THINGS, UM, IS THAT ABSOLUTELY, IF WE GET 10,000 MEGAWATTS OF, UH, RETIREMENTS NEXT YEAR, WE HAVE 12% LOAD GROWTH OR SOMETHING IN WHICH, YOU KNOW, WHEN ERCOT IS FORCING OUT AS FORECASTING OUT BASED ON THE MONTE CARLO SIMULATION, THAT WE WOULD NO LONGER BE MEETING A STANDARD, THEN ABSOLUTELY APPLY THE FLOOR, BUT MAKE IT CONDITIONAL UPON SOMETHING LIKE THAT HAPPENING.
UM, AND ON THE R BENEFITS, YOU KNOW, WE, I THINK WE TALKED ABOUT THIS AT THE WORKSHOP IS THAT IT'S NOT CLEAR WHETHER OR NOT THAT IS SUPPOSED TO BE A FEATURE OF THIS BRIDGING SOLUTION OR NOT, BUT REGARDLESS, I WOULD REQUEST, UM, OF ERCOT THAT, UM, OR ALL OF US REALLY, MAYBE WE HAVE A WORKSHOP OR SOMETHING, BUT IF WE'RE GONNA BE TYING 500 MILLION TO THE 6,500 MEGAWATT NUMBER, LET'S PUT SOME DISM MORE DISCUSSION AND RIGOR AROUND THAT NUMBER BECAUSE THAT NUMBER WAS CHOSEN BASED ON A SINGLE OPERATIONAL DAY, 18 MONTHS AGO, AND A LOT HAS CHANGED IN 18 MONTHS, AND WE BELIEVE THAT, UM, LET'S SAY MAYBE THE 6,500 NUMBER IS STILL CORRECT, IT DOESN'T MAYBE NECESSARILY NEED TO BE IN EVERY DAY, EVERY SEASON, EVERY HOUR OF THE DAY.
UM, SO I JUST WOULD LIKE TO OPEN UP THE DISCUSSION THAT NOW IF WE'RE GONNA BE BASING $500 MILLION BASED ON THAT NUMBER, THEN LET'S HAVE MORE CONVERSATION ABOUT WHETHER OR THAT'S THE RIGHT NUMBER FOR RUCKING.
I MEAN, I, I, AS I SAID DURING MY PRESENTATION, I WOULD CAUTION US OF RUNNING AROUND WITH THAT $500 MILLION NUMBER BECAUSE I THINK BEHAVIORAL CHANGES WILL REDUCE THAT.
CARRIE, ANYTHING ADDITIONAL? OKAY, WE CAN ALWAYS ADD YOU BACK TO THE QUEUE GENRES, JOHN GENRES HUBBARD WITH T I C.
UM, I WAS CURIOUS, HAVE Y'ALL DONE IN YOUR BACKCAST, HAVE YOU ALL LOOKED TO SEE WHICH RESOURCES WOULD BE RECEIVING THE PAYMENT TO MAKE SURE THAT THEY WERE NOT DISPATCHABLE, BUT THAT THEY WERE OLDER RESOURCES TO DELAY RETIREMENTS? SO THE, THE RESOURCE MIX WOULD SEE THE, UH, THE AWARDS OR THE ADDITIONAL REVENUE? UH, IT WOULD NOT NECESSARILY BE, IT'S NOT FOCUSED ON OLDER RESOURCES PER SE, BUT ALL OF THIS CATEGORY OF DISPATCHABLE RESOURCES.
AND, AND I UNDERSTAND THIS TO DISPATCHABLE, COULD YOU DO, COULD YOU LOOK, LOOK AT THE BACKCAST AND DETERMINE WHETHER, WHAT RESOURCES IT WOULD BE GOING TO ON A DEEPER LEVEL THAN JUST DISPATCHABLE VERSUS EVERYTHING ELSE WE CAN? UM, I WOULD SAY THAT IS NOT SOMETHING WE COULD DELIVER BY THE BOARD MEETING, UM, BUT COULD PUT THAT IN OUR FILING TO THE COMMISSION.
AND WOULD YOU, AND THAT WOULD THEN BE PROVIDED TO MARKET PARTICIPANTS, CORRECT? IT WOULD BE A PUBLIC FILING.
UM, UNLESS YOU'RE LOOKING FOR SOMETHING MORE THAN THAT.
NO, I MEAN, AS LONG AS IT'S A PUBLIC FILING
[00:45:01]
THAT OTHER MARKET PARTICIPANTS WILL BE ABLE TO EVALUATE AS WELL.UM, AND I, AND I THINK IT WOULD BE HELPFUL TO, YEAH.
UM, AND THEN I WAS ALSO CURIOUS, UM, I GUESS DOES ERCOT FEEL THAT THIS IS A COMPETITIVE METHOD THAT TO THE GREATEST EXTENT FEASIBLE IS SO THAT IT'S CONSISTENT WITH THE THIRD COURT OF APPEALS OPINION? UM, NOT SURE WHAT YOU MEAN BY THE THIRD COURT OF APPEALS.
SO THE THIRD COURT OF APPEALS RECENTLY RULED IN THE REPRICING LAWSUITS THAT ACTIONS TAKEN SHOULD BE COMPETITIVE TO THE GREATEST EXTENT FEASIBLE.
DO YOU FEEL LIKE THIS IS THE BRIDGING SOLUTION THAT IS COMPETITIVE TO THE GREATEST EXTENT FEASIBLE? IT WOULD CHECK THE BOXES OF COMPETITIVE RELATIVE TO IT REWARDS PERFORMANCE.
IT IS NOT, UH, UH, IT HAPPENS IN TIMES OF SYSTEM NEED.
AND IT IS, UH, UH, AGNOSTIC TO RESOURCE TYPES.
I, I DON'T KNOW IF I, I WOULD SAY, I WOULD ALSO SAY THAT THAT'S NOT SETTLED LAW.
THE COMMISSION HAS APPEALED THAT TO THE, UH, STATE SUPREME COURT.
SO, UH, MAKING THAT THE, UH, THE ONLY DETERMINANT, UH, IS A LITTLE PREMATURE.
I'M, I'M STAYING OUT OF THE, THAT DETERMINATION.
I'M JUST ECONOMICALLY DEFINING, YOU KNOW, THE COMPETITIVE FEATURES THAT THIS HAS.
YEAH, I RECOGNIZE COURTS CAN MAKE DIFFERENT DECISIONS THAN, THAN MYSELF.
UH, AND THEN I GUESS MY LAST QUESTION IS, UH, COULD YOU PROVIDE, I GUESS, MORE CLARITY WHY YOU FEEL LIKE THIS WILL ADDRESS RUCKING ISSUES? WHEN THE LAST R D C CHANGE WAS INTENDED TO INCREASE, UH, SELF, UH, SORRY, THE IN TO INCREASE SELF COMMITMENTS AND DECREASE RUCKING, BUT ERCOT STILL CONTINUE TO ROCK RESOURCES.
SO, SO THE LAST O RDC CHANGE MADE NO DISTINCTION BETWEEN ONLINE AND OFFLINE RESOURCES.
UM, AND THIS IS FOCUSED ON ONLINE AND AT THE KIND OF SCARCITY, UH, BANDWIDTH WHERE WE TEND TO TEND TO TAKE R ACTIONS.
SO, UH, THE DIFFERENCE REALLY IS THE FOCUS ON ONLINE RESOURCES ONLY GETTING THE, THE REWARDS.
SO IF IT BRINGS MORE RESOURCES ONLINE, THAT WOULD REDUCE THE NEED FOR US TO RUCK.
UH, AND THEN I GUESS WE JUST HAVE ONE COMMENT THAT I THINK GENERALLY WE'RE CONCERNED ABOUT THIS SUGGEST JIM, UM, BECAUSE THE RDC WAS MEANT TO COMPENSATE RESOURCES FOR RESERVE BASED ON ACTUAL RISK AND NOT MEANT TO BE A REVENUE GUARANTEE, WHICH SEEMS LIKE THAT'S WHAT THIS IS BECOMING.
I, I WILL LET, THAT'S NOT A QUESTION.
UH, NEXT TO THE CUE WE, AGAIN, DAVID FOLLOWED BY SETH, BILL AND EMILY.
UH, I THINK WE ECHO A LOT OF THE SENTIMENTS RAISED ON THE RUCK ISSUES, UH, ESPECIALLY BY THE IMN.
WE FEEL THAT WE SHOULD PROBABLY BE TALKING ABOUT THOSE MORE, UM, AND UNDERSTANDING 'EM, I THINK THE, THE POINT T I C JUST MADE THAT, YOU KNOW, WE'RE THINKING THAT WE'RE GONNA BRING UP PRICES AND IT'S GONNA CREATE THIS COMMITMENT IS, IS A, IS A QUESTION WE HAVE, I THINK, IS THERE ANY WAY, OR I GUESS THE QUESTION FOR YOU, IS THERE ANY WAY TO QUANTIFY THAT A LITTLE BIT? I MEAN, FIGURE OUT WHAT WE EXPECT TO SEE AS FAR AS RUCK RELIEF.
CUZ I THINK THIS IS A CARROT THAT WE'RE KIND OF BEING WAVED IN FRONT OF US, IS WE'RE GONNA GET RID OF THE RUCK IF WE DO THIS, AND I'M NOT SURE THAT WE WILL.
SO LIKE SOME MORE THOUGHTS ON THAT.
SO, UH, I, IT IS NOT POSSIBLE ON A BACKCAST BASIS TO SAY SOMEBODY WOULD'VE COMMITTED MORE OR DIFFERENTLY BECAUSE THAT'S A BEHAVIORAL CHANGE THAT I WOULD HAVE TO MODEL.
SO I THINK THE, THE BEST WAY TO DO THIS, UH, IN A SOME ABSOLUTE TERM IS TO SEE, SEE WHAT HAPPENS.
WHAT I CAN TELL YOU IS THAT THE INCENTIVE TO SELF COMMIT IMPROVES UNDER THIS PROPOSAL.
SO I THINK WE AGREE WITH THAT.
THE INCENTIVES WILL BE THERE, WE JUST DON'T HAVE A GUARANTEE.
I GUESS THAT'S PART OF THE POINT WE'RE TRYING TO GET ACROSS HERE.
I I, I DON'T HAVE A GUARANTEE FOR YOU.
UM, ALSO I THINK WE DO HEAR, UM, THIS, THIS SLIDE UP HERE TALKS ABOUT, UH, WHICH GENERATORS WILL GET THE, WILL GET THE, UH, THE PAYMENTS.
IT IS TARGETED TO WHAT WE THINK ALLIANCES.
I I JUST WANTED TO MAKE A POINT HERE, AND THIS IS NOT FOR A QUESTIONS MORE OF A, JUST A COMMENT THAT, UM, THIS SHOWS HOW A TECHNOLOGY NEUTRAL APPROACH TO ANY TYPE OF PAYMENTS WILL, BASED ON THIS TYPE OF A, OF A, UH, METHODOLOGY IS GONNA
[00:50:01]
HIT WHAT WE WANT.UM, AND WHATEVER DOES PERFORM, EVEN IF IT IS A RENEWABLE GENERATOR, WILL, UM, BE APPROPRIATELY REFLECTED IN IN THE PAYMENTS.
I THINK THAT'S SOMETHING THAT WE SUPPORT.
SO I JUST WANTED TO SHARE THAT.
THANK YOU SETH, WITH DC ENERGY.
I BILL, AND IT MAY BE DIRECTED TO YOU OR MAYBE TO ERCOT, BUT WHEN I HEAR INCREASING THE BALL, UH, WOULD HCAP STILL REMAIN AS THE HIGH PRICE UNDER THAT IDEA? OKAY.
SO WOULD JUST EFFECTIVELY CHANGE THE SHAPE OF THE RDC CURVE.
I, I, I MEAN, I I I CAN CONFIRM THE, THOSE, UH, OBSERVATIONS.
UM, UH, AND, AND I MEAN, I THINK THE REASON WHY I THINK ALSO OTHER PARTIES HAVE BROUGHT THAT UP, INCLUDING THE IMM, IS IT WILL INCREASE THE CURVE, UH, REWARDS IN THOSE TIGHT INSTANCES.
UH, BUT IT CA YOU KNOW, WITHOUT CHANGES IN THE TAIL AND M C, IT WOULD ALSO INCREASE THE TAIL.
UH, BILL FOLLOWED BY EMILY SME AND THEN BOB, WHEN I GET THE THEORY OF HIGHER ENERGY PRICES WILL LEAD TO MORE COMMITMENT, WHICH SHOULD LEAD TO LESS ROCK.
I THAT I THINK WE CAN FEEL CONFIDENT THAT THAT WILL HAPPEN TO SOME EXTENT.
HOW MUCH WE DON'T KNOW? UM, CARRIE'S COMMENT MAY WONDER IS, IS ERCOT PROPOSAL THAT THERE WOULD BE SOME MODIFICATION OF THE FLOORS GIVING A NET CONE MEASUREMENT ON A YEAR BY YEAR BASIS? NO.
UM, I THINK, BUT THE WAY I SEE THIS PLAYING OUT IS THAT, UH, YOU KNOW, THERE'S A LOT OF THE ANALYSIS IS BASED ON BACKCAST AND I THINK THERE'S VALUE TO REVISITING HOW THIS IS WORKING PROBABLY ON SOME KIND OF ANNUAL BASIS.
UH, SO THAT, THAT'S THE WAY I, I WAS RESPONDING, I THINK.
I'LL LET CARRIE SPEAK FOR HER PROPOSAL AND WELL, I WOULD NOT, I WOULD STRONGLY ENCOURAGE US TO NOT MAKE FREQUENT CHANGES TO THE SHAPE OF THE O R D C BECAUSE, I MEAN, 99% OF ALL TRANSACTIONS IN THIS MARKET ARE ENERGY BASED ENERGY, BILATERAL ENERGY TRADES.
UM, I GET THE REASONING BEHIND SETTING FLOORS AT FIXED RESERVE AMOUNTS BECAUSE THAT'S ERCOT PREFERENCE ON HOW MUCH ONLINE RESERVES THEY WANT.
I AGREE WITH CARRIE, WE SH WE SHOULD PROBABLY REVISIT WHETHER THOSE ARE WHAT ERCOT WANTS FROM A LONG-TERM PERSPECTIVE BEFORE WE SET THIS.
MY MODIFICATION TO CARRIE'S MODIFICATION WOULD BE IF WE SEE YEARS WHERE WE HAVE WHAT WE DEEM SUFFICIENT RESERVES OR, UM, INSTALLED CAPACITY OR SOME NET CONE AND WE WANNA MAKE ADJUSTMENTS, MY RECOMMENDATION WOULD THEN WE WOULD STEP DOWN NON SPIN PROCUREMENT.
WE WOULD NOT TOUCH THE RDC SHAPE THAT WOULD STAY AS IT IS.
IF WE SEE THAT THAT IS SUCCESSFUL AT ATTRACTING MORE ONLINE RESERVES THAN WE, WE WOULD MODIF MODIFY ANCILLARY SERVICE PROCUREMENT, PARTICULARLY NONS SPIN THAT WOULD LOWER THE COST, UH, MOVE MORE OF THE COMMITMENT INTO THE ENERGY MARKET, WHICH I THINK IS WHAT WE ALL WANT.
I JUST, I, I GET REALLY NERVOUS ABOUT US CHANGING THE SHAPE OF THE, THE RDC CURVE FREQUENTLY BECAUSE THAT IS LIKE WHAT THIS WHOLE MARKET'S PINNED ON.
SO IT WOULD BE VERY, UH, DISRUPTIVE.
YEAH, I KNOW, I, I I, I TAKE YOUR POINT, UM, I DO THINK THERE'S VALUE IN AN EXERCISE OF LOOKING AT ONCE IMPLEMENTED HOW THIS IS WORKING AND TALKING THROUGH, UM, WHAT IS WORKING, WHAT ISN'T WORKING.
FROM MY PERSPECTIVE, THE ULTIMATE DECISION ON THIS IS, UH, WITH THE COMMISSION, UM, THEY'RE THE ONES WHO INSTRUCTED US TO BRING A BRIDGE RECOMMENDATION.
UM, SO WE WOULD, YOU KNOW, I I, I DON'T SEE ANY, I, I DON'T WANNA SIGNAL ANY AUTOMATIC, UH, ADJUSTMENTS, BUT I DO THINK IT'S WORTHWHILE TO COME BACK TO THIS GROUP AND SAY, LOOK, WE, WE SAID THESE THINGS BASED ON A BACKCAST AND HERE'S HOW IT'S PLAYING OUT.
AND THEN FROM THERE WE CAN, YOU KNOW, I DON'T, I DON'T THINK THERE SHOULD BE ANYTHING AUTOMATIC, BUT I THINK A DISCUSSION IS VALUABLE AF AFTER THAT POINT.
AND CARRIE, DID YOU WANT TO PIN ON ANY OF THAT, OR I JUST, SINCE BILL MENTIONED YOU, I WANTED TO GIVE YOU AN OPPORTUNITY TO HE DID, AND I, I, I DO UNDERSTAND THAT I, I I, I TAKE THAT POINT, UM, I THINK IT IS A GOOD BALANCE TO DO IT ON AN ANNUAL BASIS AND DO IT AHEAD OF THE YEAR.
UM, YOU KNOW, WE ARE ALSO THINKING ABOUT, WE HAD TALKED ABOUT MAYBE DOING A SEASONAL ADJUSTMENT OR SOMETHING LIKE THAT, AND, YOU KNOW, PERHAPS THAT IS TOO MUCH MOVING AROUND FOR,
[00:55:01]
UM, YOU KNOW, BUT I WOULD TAKE ITIT'S LIKE, UM, IF YOU'RE ASKING ME IF, UH, IF I WOULD PREFER MY PROPOSAL, YES.
UM, IF I PREFER ANY OILS AT ALL, INCLUDING ONE OF THEM COULD BE REDUCING NONS SPENT PROCUREMENT, I'LL TAKE IT.
UM, I GUESS, UH, KENAN, I APPRECIATE YOUR RESPONSE TO DAVID AND, AND THE QUESTIONS AROUND R UM, I DO THINK THAT THAT'S HELPFUL FOR US TO UNDERSTAND, UM, THAT IT, IT SEEMS LIKE ERCOT STAFF'S RESPONSE ON THIS IS GONNA BE, YOU KNOW, ANY CHANGES TO OUR, OUR RUCK, UM, BEHAVIOR IS GONNA BE DRIVEN BY GENERATOR BEHAVIOR REGARDLESS OF THE SOLUTION THAT YOU'RE TALKING ABOUT.
IS, IS THAT HOW Y'ALL ARE THINKING ABOUT THAT? BECAUSE WE HAD A LOT OF DISCUSSION AT THE LAST WORKSHOP, UH, IN TERMS OF THAT BEING, YOU KNOW, A, A SEPARATE AND, AND VALID GOAL OF ANY BRIDGING SOLUTION? THAT, THAT'S A REALLY GOOD QUESTION AND, AND, UH, THAT I DON'T THINK THAT I WOULD BE, ER, KAT'S AN ANSWER.
UM, I THINK THERE'S THINGS THAT WE CAN DO QUICKLY THAT IS RESPONSIVE TO THE RUCK ISSUE AND, AND THIS KIND OF FITS WITHIN THAT.
I THINK THERE ARE SOME PROPOSALS OUT THERE THAT WE NEED TO SPEND TIME ON, UH, IN AND AROUND, UH, REDUCING RUCK.
UH, AND SOME OF THOSE ARE A LITTLE DEPENDENT ON HOW ECR S PLAYS OUT AND, AND SOME OTHER THINGS LIKE THAT.
UM, BUT I THINK WE NEED A, AGAIN, THIS IS A BRIDGE SOLUTION.
RUCK ISSUES ARE GONNA PERSIST PAST IF I, WHENEVER I DELIVER PCM.
AND I THINK THAT IT'S GONNA BE IMPORTANT THAT WE EXAMINE PROPOSALS LIKE WHAT THE IMM MADE IN TERMS OF MAYBE PROCURING THOSE RESERVES THROUGH A MORE MARKET BASED MECHANISM.
UM, SO I, I WOULD NOT SAY THIS TAKES ANY OF THAT OFF THE, OFF THE TABLE.
UM, IN TERMS OF A LONG TERM SOLUTION, I THINK THIS IS WHAT I CAN IMPLEMENT IN, IN FOUR MONTHS OR SO.
JUST TO KIND OF CLOSE THE LOOP BEFORE I SHIFT GEARS AND, AND TALK A LITTLE BIT ABOUT THE RDC, UM, BACK AND FORTH BETWEEN CARRIE AND BILL.
UM, I GUESS ON THE, CAN I JUST MAYBE GET, UH, CONFIRMATION THAT ERCOT IS NOT LOOKING AT THE RUCK ISSUE SOLELY AS IT, IT TIES TO THE BRIDGING SOLUTIONS, THAT THAT'S SOMETHING THAT INDEPENDENTLY WE CAN ALL CONTINUE TO WORK ON TOGETHER? YES.
OUR, OUR BELIEF IS THAT WE NEED TO KEEP WORKING ON THE RUCK ISSUE REGARDLESS OF WHAT HAPPENS HERE.
I'M A LITTLE WORRIED THAT SOME OF THE GOOD IDEAS AROUND A LONG-TERM R SOLUTION TAKE A WHILE TO BUILD.
THAT IS MY BIGGEST KIND OF CONCERN AROUND THAT.
AND SO ON RD C, I'M, I APPRECIATE CARRIE'S COMMENTS IN HER PERSPECTIVE.
I THINK ONE CONCERN WE HAVE WITH THAT KIND OF A TRIGGER, UH, AND PULLING THAT BACK IS, YOU KNOW, THE IMPACT THAT'S GONNA HAVE, RIGHT ON REGULATORY CERTAINTY AND THE GOALS OF THE BRIDGING SOLUTIONS BEING TO, UM, PROMOTE INVESTMENT AND, AND THAT KIND OF VARIABILITY, UH, THAT WE COULD SEE THAT KIND OF VOLATILITY IS NOT SUPPORTIVE OF THAT IN OUR VIEW.
UM, BUT THE, THE CONCEPT OF, OF PERHAPS SEASONAL, UM, IMPLEMENTATION OF THE FLOORS ON A FIXED BASIS, NOT VARIABLE, DEPENDING ON MARKET CONDITIONS KNOWING IN ADVANCE, I THINK THAT WOULD BE, UH, A SUPERIOR APPROACH IF WE WERE TO THINK OF IT THAT WAY.
I, I, I MEAN, I, I I TAKE YOUR POINT, I'M NOT SURE, UH, AS A, AS A FAST RESPONSE TO A BRIDGE NEED, WE CAN DO THAT AT THIS TIME, BUT I DON'T SEE ANY REASON WHY WE CAN'T KEEP THAT ON THE TABLE AS SOMETHING TO TO FOLLOW UP ON.
AND, AND ANY OTHER, UH, ISSUE THAT IS OF IMPORT, IMPORT TO STAKEHOLDERS.
UM, I HAD A PROCEDURE QUESTION, SO, UM, UNFORTUNATELY I WAS NOT AVAILABLE LAST, UH, TAX.
SO IS, UH, COURT GOING TO ONLY PRESENT THIS AS THE SOLUTION TO THE, UH, BOARD OR ALL THE DIFFERENT PROCEDURE? UH, ALL THE DIFFERENT SOLUTIONS WILL BE PRESENTED, AND THIS IS JUST AN UPDATE.
WE ARE ONLY GONNA PRESENT THIS, UH, OKAY, THIS SOLUTION.
[01:00:01]
ARE TRYING TO BUILD A FORUM WHERE IF THERE IS ANOTHER SOLUTION THAT, UH, TAC WISHES TO VOTE ON AND PROVIDE OR THERE IS NOT A TAC CONSENSUS, BUT THERE IS SOME PROPOSALS THAT WISH TO BE PUT IN FRONT OF THE BOARD THAT THERE'S AN OPPORTUNITY TO DO THAT.SO, SO ARE WE VOTING TODAY THEN TO, UH, SUPPORT OR OPPOSE THIS THAT, THAT'S RIGHT.
SO WHEN WE GET AFTER CANON'S DONE, THE ERCOT PROPOSAL WILL BE THEIR PROPOSAL.
WE CAN OPT TO COME TO THE BOARD AND WELL REALLY RELIABILITY MARKETS COMMITTEE COME TO THEM WITH AN ALTER ALTERNATE PROPOSAL THAT WE LIKE BETTER, THAT WE THINK IS BETTER.
UM, AND JUST TO SNEAK PREVIEW, WE MAY OPT TO GO AHEAD AND PAIR UP SPECIFIC ITEMS AS OUR RECOMMENDATION AS WELL.
SO WE'LL TALK ABOUT THAT AFTER WE GET THROUGH CANON'S PRESENTATION.
AND IN, IN THAT RECOMMENDATION, IT WOULD BE JUST FOR NEXT YEAR OR AS, UH, CARRIE SAID, IT'S, IT'S A PROCESS FOR THE LONG TERM.
IT, HOW WOULD THAT BE? THIS IS INTENDED TO BE A BRIDGE TO, SO JUST NEXT YEAR? UH, I WOULDN'T SAY JUST NEXT YEAR, BUT, BUT YEAH, NO PCM OKAY.
SO, UM, YEAH, I WOULD JUST ENCOURAGE, UH, Y'ALL TO STAY WITHIN SOMETHING FAST, SOMETHING THAT'S GONNA BE IN PLACE FOR THREE YEARS, UH, AROUND THREE YEARS, MAYBE TWO.
AND, UH, THEN WHATEVER THE COMMISSION'S LONG TERM PHASE TWO SOLUTION IS WOULD KICK IN.
NOW PEOPLE HAVE VOICED AN OPINION THAT SOME O R D C CHANGES MIGHT NEED TO REMAIN IN PLACE.
UH, I THINK THAT'S UP TO THE COMMISSION TO DECIDE.
YEAH, SO WHEN I THINK ABOUT THIS, UM, I LINK IT AS TWO SEPARATING.
ONE IS VALUING THE RESERVES THAT OUR GOD WANTS TO MAINTAIN.
THAT'S, UH, OR A WAY TO ACCOUNT FOR THE SELF-COMMITMENT AND PRICING SO THAT YOU DON'T HAVE TO ROCK THE RESOURCES TO GET IT.
AND ALSO THERE IS SOME DESIRE TO HAVE LIKE X AMOUNT OF MONEY IN THE MARKET, WHICH I'M NOT SAYING THERE SHOULD BE OR SHOULDN'T BE.
I'M GO NOT END DOSING ONE WAY OR THE OTHER, BUT THAT COULD BE SEPARATE ALSO.
AND, UM, SO MY QUESTION WITH THAT IS, WHEN WE ARE THINKING ABOUT THIS SOLUTION, ARE WE TO ASSUME THAT THE, AS GARY AS THE 6,500 OR 8,000 WILL CONTINUE AS THE AMOUNT OF RESERVES THAT OUR GOD WANTS TO MAINTAIN THROUGHOUT THAT BRIDGING TIME? THAT'S, THAT'S A REAL, FIRST OF ALL, THAT'S A REALLY GOOD QUESTION.
SO IT'S NOT, UM, UH, I MEAN, OPERATIONALLY WE'VE DEMONSTRATED A COMMITMENT TO THIS 65,000, 7,000 RANGE.
SO THAT DEFINITELY WAS KIND OF IN OUR, IN OUR CALCULUS, UH, AS THIS, UH, BRIDGING SOLUTION WAS PUT FORWARD.
SO I THINK THAT ANSWERED PART OF YOUR QUESTION.
UM, I MEAN, AND YOU KNOW, UH, THIS IS SOMEWHAT OP OPEN TO INTERPRETATION, BUT WHAT WE TRIED TO DO AS STAFF IS GO BACK TO THE DISCUSSION AROUND THE BRIDGING SOLUTION THAT THE COMMISSION HAD.
UM, THESE WERE, THE, THE FEATURES I HAVE HERE ON THE BOARD WERE THINGS THAT, UM, WE, WE THOUGHT WE HEARD IN THAT DISCUSSION, AND SO WE TRIED TO ADDRESS THOSE.
UM, I THINK, UH, I WOULD SAY, UH, I DON'T RECALL A VERY STRONG DISCUSSION IN AND AROUND RUCK, BUT SEPARATELY THE COMMISSION HAS EXPRESSED CONCERNS ABOUT WHAT WE'RE DOING WITH RUCK AND THINGS LIKE THAT.
SO THAT I, I WOULD SAY THAT'S SOMETHING WE KIND OF BROUGHT IN, UH, ON OUR OWN, BUT WE THOUGHT THAT THERE WAS REAL VALUE THERE.
AND, AND AS I HAD SAID AT THE BEGINNING OF THIS PROCESS, WE DO WANT TO ADDRESS THE RUCK ISSUE.
WE DO SEE THE, UH, R DEPLOYMENTS AND THE COMPENSATION PATH TO BE PROBLEMATIC, UH, FOR, FOR THE LONG-TERM VIABILITY OF THE MARKET.
SO WE WANT TO COME UP WITH BOTH NEAR AND SHORT-TERM SOLUTIONS TO THAT WHEN WE CAN.
SO I WOULD AGREE WITH, I THINK MANY OF US WOULD AGREE THAT WE NEED TO LOOK AT THAT 6,500 IF, OR 7,000 OR WHATEVER IS THE RESERVE THAT WE NEED TO MAINTAIN.
UH, AND IF THAT WE WANT TO MAINTAIN FROM A RELIABILITY PERSPECTIVE, THEN I WOULD AGREE THAT WE NEED TO VALUE THOSE RESERVES.
UH, AND O RDC, YOU COULD VALUE THOSE RESERVES EITHER THROUGH O RDC PRICES
[01:05:01]
OR THROUGH THE, UM, PROCURING THOSE ANCILLARY SERVICE.AND YOU CAN HAVE DEMAND CURVE IN THE ANCILLARY SERVICE ONCE YOU HAVE REALTIME OPTIMIZATION, OR IT'LL BE THROUGH THE PRICING.
SO ONE OF THOSE THROUGH WILL ENSURE THAT THE PRICING IS REFLECTIVE.
UM, GOING BACK TO THE DISCUSSION BETWEEN BILL AND CARRY ON THE REPRI, UH, NOT REPRICING LIKE CHANGING IT, I WOULD SAY IF THERE'S A DESIRE TO MAINTAIN THIS MUCH REVENUE IN THE MARKET AND IT IS FOR DISPATCHABLE RESOURCES, THEN I WOULD SAY IT IS MORE LIKELY TO BE MORE EFFECTIVE IF THE PRICING IS DONE FOR THAT 4,000 MEGAWATT RANGE THAN THE FULL RANGE.
UM, AND IF THAT IS THE CASE, THEN YOU, IT MAKES SENSE TO REVISIT BASED ON WHETHER THERE IS ENOUGH REVENUE IN THE MARKET THAT THAT IF ANYBODY WANTS TO MAINTAIN, IS THERE.
UH, BUT IF IT IS, UM, VALUING THE RESERVES THAT OUR COURT WANTS TO MAINTAIN, WHICH WHATEVER MEGAWATTS WE DECIDE IS THE RIGHT AMOUNT, THEN I WOULD AGREE WITH BILL THAT WE SHOULDN'T KEEP ON CHANGING IT ALL THE TIME IF IT IS VALUING THAT RESERVE, NOT IF IT IS PUTTING MONEY INTO THE MARKET.
TWO DIFFERENT ISSUE IN MY MIND.
UM, I, I, I MEAN, I THINK YOU'VE, YOU'VE SAID A LOT THERE.
UM, UH, I'M, I'M IN A, UH, I THINK WE ARE ALL IN A CHALLENGING POSITION IN THAT WE WANT TO DELIVER SOMETHING TO THE COMMISSION THAT IS RESPONSIVE TO THEIR REQUEST, BUT THERE ISN'T A DOCUMENTED, UH, ORDER AT THIS POINT.
UM, SO I'M SURE THE COMMISSION'S GONNA, YOU KNOW, CONTEMPLATE O OTHER FACTORS AS THEY DECIDE WHAT A BRIDGING SOLUTION SHOULD LOOK LIKE.
UM, SO WE'LL FILE THIS AND I'M, I'M SURE, UH, THERE CAN BE FOLLOW UP ON THAT.
MAYBE TO SAY IT'S SUCCINCTLY
WE HAVE TO LOOK AT WHAT EXACTLY IS THE MEGA AMOUNT OF MEGAWATTS WE NEED FROM AN OPERATIONAL PERSPECTIVE AND VALUE IT.
UM, AND THAT SHOULDN'T KEEP ON CHANGING, BUT THAT SHOULDN'T JUST BE SAYING THAT THAT SHOULD BE ADJUSTED TO GET THIS MUCH REVENUE IN THE MARKET.
IAN GOT A QUESTION FROM ERIC ON THE PHONE.
WE'LL, WE'LL READ THAT HERE IN A MINUTE.
UH, SHAMS AND KEVIN, AND JUST A PROGRAMMING NOTE, WHAT I'D LIKE TO SEE US DO IS TRY TO WRAP UP THE DISCUSSION ON THE ERCOT PROPOSAL BY 11.
I'M GONNA TRY TO HELP YOU WITH THAT.
AND THEN THAT WAY WE CAN MOVE ON TO THE DEVELOPMENT OF THE T UM, IDEAS.
UH, COULD YOU GO TO THE NEXT SLIDE FOR, UM, NO, GO ON.
SEE WHERE IS IT? IT'S A SLIDE THAT TALKS ABOUT ALL THE THINGS THAT IT MEETS IN YOUR, IN THE ERCOT MINE.
THE VERY LAST, VERY LAST SLIDE.
LET ME START BY, YOU KNOW, I BILL'S RIGHT? YOU KNOW, CERTAINTY IN THE MARKET HAS TO BE MAINTAINED AND THAT'S PART OF THE REASON I DON'T SEE THINGS MOVING NOW.
AND THAT'S PART OF THE REASON I DON'T SEE, EVEN THOUGH THERE WAS ADDITIONS PUT INTO THE MARKET THROUGH CHANGES IN THE RDC, THAT THERE HASN'T BEEN BILLED, CUZ THERE'S TOO MUCH UNCERTAINTY OUT THERE TO KNOW WHAT'S GONNA GO ON.
SO I AGREE THAT WE NEED TO PUT SOME CERTAINTY INTO THE MARKET, EVEN IN A BRIDGING SOLUTION.
SO I UNDERSTAND NOT CHANGING THAT.
UH, HOWEVER, THE ONLY THING I WOULD SAY, AND THIS IS NOT TO SAY, LET'S GO BACK, TAKE A LOOK, CHANGE, YOU KNOW, WHAT WE'RE GOING TO, WHAT YOUR RECOMMENDATION IS, BUT WOULD IT BE WORTHWHILE, SINCE WE'RE MAKING THE CHANGES TO THE ER E C R S, WE'LL BE PUTTING THIS IN THAT YOU COME BACK TO TAX IN SIX MONTHS TO JUST SAY, ARE THERE ANY UNINTENDED CONSEQUENCES THAT WE HAVE SEEN IN THIS PROCESS? AND THEN COME IN AND THEN WE CAN DO WHATEVER REVIEW YOU'D LIKE TO DO EVERY YEAR AFTER THAT.
I, I MEAN, I WOULD LIKE TO COME BACK TO TACK WHEN I HAVE SOME OBSERVABLE THAT'S FUNCTIONAL DATA AND, AND PRESENT THAT AND THAT CAN, YOU KNOW, BECAUSE THIS IS GONNA BE IMPLEMENTED MID-YEAR, IT'S SIX MONTHS IS TOO SOON.
YOU KNOW, JUST, I WAS TRYING TO GET SOMETHING THAT WE DON'T WAIT IF WE'VE GOT UNINTENDED, AND I WOULD FULLY EXPECT THAT IF THERE WERE SOME UNINTENDED CONSEQUENCES THAT ERCOT WAS
[01:10:01]
SEEING, THAT YOU'D BRING 'EM TO US, WHETHER IT WAS A SCHEDULED LOOK AT OR NOT.SO I'M NOT REALLY CONCERNED ABOUT THAT.
I WAS JUST TRYING TO GET, YOU KNOW, TO SOME CONSENSUS HERE.
SO WITH THAT NOW, THAT'S JUST ONE PIECE TO SAY, AND OKAY, MAY I JUST SAY ONE THING IN RESPONSE? YEAH.
SO I'D LIKE TO TRY TO BRING SOMETHING BACK IN SIX MONTHS, BUT I MIGHT NEED SOME WIGGLE ROOM AROUND THAT ONE WAY OR THE OTHER.
YEAH, I'M JUST TRYING TO SAY, GIVE US SOME COMFORT THAT WE'RE NOT WAITING IN FULL YEAR.
THEN AFTER THAT, DO WHATEVER WE WOULD LIKE.
TO ME, I AGREE WITH THIS SLIDE THAT IT MEETS ALL OF THE CRITERIA THAT'S OUT THERE FOR WHAT WE'RE LOOKING FOR FOR A BRIDGING SOLUTION.
AND I THINK THIS IS A, A POSITIVE STEP TO GO.
AND I DON'T KNOW ABOUT THE WILL OF THE REST OF TAC BUT I'LL MAKE A MOTION THAT TACK ENDORSED THIS AS ONE, AS A BRIDGING SOLUTION.
WE'VE GOT OTHER THINGS WE'RE GONNA TALK ABOUT, BUT, UH, I WOULD GO AHEAD AND MAKE THAT IF THE CHAIR SO SELECTS THE TAPE, YOU KNOW, IF YOU WANNA DO THAT, THAT WAY WE, WE COULD DEFINITELY TAKE IT ON OR, I, I THINK MY PREFERENCE WOULD BE TO ADDRESS IT HERE IN JUST A LITTLE BIT, IF THAT'S OKAY, BOB? UH, SURE.
BUT YOU'LL BE FIRST IN THE QUEUE, SO, OKAY.
UM, KENAN, FIRST OFF, THANK YOU VERY MUCH FOR PUTTING, FOR YOU AND YOUR TEAM FOR PUTTING THIS ALL TOGETHER, UM, ON SUCH A SHORT TIMELINE.
UM, LIKE BOB JUST SAID, I KEEP GOING BACK TO THIS LAST SLIDE ON WHY I THINK WE, I, WE'RE DEFINITELY STILL DIGGING INTO THIS TO SOME DEGREE, BUT DEFINITELY, UM, THESE THREE POINTS ARE REALLY HELPING US JUMP BEHIND THIS VERY QUICKLY.
SO THANK YOU VERY MUCH FOR SUMMING THIS TOGETHER.
UM, I DO WANT TO SLIGHTLY TOUCH ON WHAT EMILY AND BILL TALKED ABOUT WITH SOME CERTAINTY, UM, THE MORE PIECES THAT SHOPS ARE LOOKING AT, UM, OR THINK WILL MOVE ON THEM, UM, THE LESS LIKELY THEY ARE TO MAKE DECISIONS, THE MORE LIKELY THEY ARE TO JUST TAP THE BRAKES AND HOLD ON, UM, IN A POSITIVE WAY, IN A NEGATIVE WAY.
THERE'S NOT THE, UM, THE MORE PIECES THEY'RE GOING ON GIVES YOU LESS CERTAINTY INTO THE FUTURE, AND THEREFORE YOU MAY, MAY BE LESS, UM, UH, SUPPORTIVE INTERNALLY OF THE CASH FLOWS YOU COULD RECEIVE.
SO THE MORE CERTAINTY, DEFINITELY THE BETTER.
UM, AND THEN, UH, THE THIRD POINT, UM, WE WERE, WE ARE STILL VERY MUCH IN FAVOR OF THE INDICATIVE PCM PRINT.
UM, AND SO, UH, WE WOULD DEFINITELY SUPPORT ERCOT IN DOING THAT, BUT ONLY AFTER THEY FEEL THE O RDC CAN BE IMPLEMENTED AS FAST AS POSSIBLE.
WE WOULDN'T WANT ANY OF THE PCM INDICATIVE, UM, PRINTS TO SLOW DOWN THE BRIDGE SOLUTION AT ALL.
BUT WOULD, UM, DEFINITELY, UH, SUPPORT ERCOT IF THEY WERE STILL WILLING TO DO THAT.
SO, UH, I I'M GLAD YOU BROUGHT THAT UP BECAUSE, UM, WE ARE NOT MAKING INDICATIVE PCM PART OF THIS, UH, PROPOSAL.
UM, HOWEVER, UH, AND, AND, AND THE REASON IS THAT, UM, THAT SEEMS TO JUST, UH, BE A LIGHTNING ROD AT THIS POINT, AND WE WANTED TO FOCUS ON, ON WHAT, UH, UH, YOU KNOW, THE, THAT WE CAN PHYSICALLY DO.
I DON'T THINK THAT IS NECESSARILY OFF THE TABLE, UH, IN, IN THE FUTURE, BUT IT, IT IS NOT SOMETHING THAT WE WOULD PROPOSE THE BOARD RECOMMEND AS PART OF A BRIDGING SOLUTION AT THIS TIME.
UNDERSTAND, AND, AND I UNDERSTAND YOUR INTERESTS, AND I THINK, NOPE, I, IT'S IMPORTANT TO MAKE SURE PEOPLE UNDERSTAND WHY YOU REMAIN INTERESTED IN THAT.
KAAN, I THINK I, I UNDERSTAND WHAT THE WORD YOU SAID AND WHY YOU'RE SAYING 'EM NOW, SO THANK YOU VERY MUCH AND WE DEFINITELY SUPPORT THIS AND WE'LL BE VOTING TO ENDORSE THIS, THIS GOING FORWARD TODAY.
UH, NEXT WE HAD A QUESTION FROM ERIC.
HE, HE WASN'T, HE'S NOT AT A POINT WHERE HE CAN SPEAK ON THE MIC, BUT HE DID WANT TO ASK KENAN IF, UH, Y'ALL ARE LOOKING AT THE VOL HCAP SPLIT COMMENTS, UH, THAT BILL MENTIONED AS AN, AS AN ADDITIONAL ANALYSIS, OR DID YOU JUST, ARE YOU JUST ACKNOWLEDGING THAT AS AN ALTERNATIVE? UH, I WAS MAINLY ACKNOWLEDGING THAT THAT IS, UH, UH, SOMETHING TO, THAT WE NEED TO THINK ABOUT.
I THINK IT PLAYS INTO SOME OF THE POINTS RESUME MADE AROUND PRICING OF RESERVES AND, AND THINGS LIKE THAT.
BUT THAT IS NOT PART OF WHAT WE'RE PROPOSING TO, UH, THE BOARD.
I THINK THAT ANSWERED ALL OF THE QUESTION.
SEANS, YEAH, I THINK, UM, YOU KNOW, WE NEED A CHANGE LIKE THIS JUST FOR THE RDC TO REFLECT THE ANCILLARY SERVICE DEMAND CURVE BECAUSE WHEN WE GO TO RTC, WE'LL BE SPLITTING UP THIS CURVE TO DETERMINE THE ANCILLARY SERVICE DEMAND.
SO I THINK WE NEED THIS CHANGE ANYWAY, UM,
[01:15:02]
ON THE UNCERTAINTY, EVEN IF WE DO CHANGE SOME STUFF, UM, YEAR TO YEAR, UM, I GUESS PEOPLE, EVERYONE SHOULD BE CONCERNED ABOUT THE UNCERTAINTY, BUT THIS IS A BRIDGING TO PCM.IF YOU LOOK AT THE PCM E THREE PROPOSAL, THAT HAS A HUGE AMOUNT OF UNCERTAINTY, WHAT THE PC VALUES ARE GONNA BE AND WHATNOT, UM, BECAUSE OF THE WAY THEY'VE DESIGNED IT, AND IT'S A YEAR AFTER THE FACT.
I MEAN, IT'S, YOU TALK ABOUT UNCERTAINTY, THAT'S HUGE.
SO COMPARED TO THAT, UM, THIS UNCERTAINTY DOESN'T, UH, BOTHER ME AS MUCH.
I, I, UH, I, AND I THINK THAT WAS MORE OF A STATEMENT.
I THINK BILL'S POINT WAS NOT THAT THIS IS MORE UNCERTAIN IF I WAS CHANGING IT EVERY QUARTER OR SOMETHING MORE FREQUENTLY THAT WOULD INTRODUCE UNCERTAINTY.
IS, WAS, WAS, I WAS A POINT I HEARD FROM THAT, THAT SIDE, THE, THE BILL BARN SIDE
KEVIN? YEAH, JUST QUICK QUESTION, I GUESS TO YOU, CLIFF IS, ARE WE NOT DISCUSSING ANY OTHER PROPOSALS TODAY? FOR ONE, THAT'S, THAT'S WHY I WANTED TO HOLD OFF BOB'S MOTION RIGHT NOW, CUZ I DO WANT TO, I DO WANNA MAKE SURE THAT EVERYBODY UNDERSTANDS WHAT PROPOSALS ARE ON THE TABLE AND WE CAN CERTAINLY TAKE THE TIME TO, TO TALK ABOUT THOSE OR WHATEVER.
SO NOT SURE IF WE'RE GONNA GET A CONSENSUS TODAY.
SO THAT'S WHY I WANNA MAKE SURE THAT WE'RE FULLY DEVELOPING THIS.
UM, KAAN QUESTION WITH REGARDS TO, DO YOU, OF THE DIFFERENT MULTI-STEP PROPOSALS, IS ERCO GONNA RECOMMEND ONE OF THOSE THREE ON THE INFERENCE ON YOU HAD DIFFERENT STEP LEVELS? DOES ERCOT HAVE A PREFERRED STEP LEVEL VERSION? THE, OUR RECOMMENDATION IS GOING TO BE $20 FLOOR AT 6,500 AND A $10 FLOOR BETWEEN 6,500.
LESS THAN 6,500, A $20 FLOOR BETWEEN 60 507,000 A $10 FLOOR.
I JUST WASN'T SURE FROM THE PRESENTATION WITH I'M, I'M GLAD YOU ASKED.
AND THE LAST QUESTION I HAVE IS THAT AGAIN, WHATEVER PHASE TWO TURNS INTO THIS WILL BE A HARD STOP, THE MARKET WOULD NO LONGER HAVE THIS IN PLACE.
I THINK THAT IS A DECISION FOR THE COMMISSION TO MAKE.
I THINK THERE'S PEOPLE THAT HAVE ADVOCATED THAT IT STAY IN PLACE.
YOU KNOW, THERE'S, THERE'LL BE OTHER DISCUSSION POINTS ON IT.
RENI, YOU, UM, ANOTHER PROCEDURAL QUESTION.
SO FOR BOARD MEETING ON 17TH, WHEN IS THE LAST DAY THAT WE HAVE TO MAKE THE, UH, BOARD, SO WE NEED TO HAVE THOSE, UH, IS IT THE 10TH THEN? YEAH, SO WE NEED TO WRAP THIS UP BY THE 10TH.
HUH? WE NEED TO WRAP IT UP BY THE 10TH.
AND WE, WE HAVE ANOTHER MEETING SCHEDULED FOR THE 10TH AND WE CANCELED THE ONE WEDNESDAY.
WE INITIALLY HAD THREE SCHEDULED, BUT WE COULD, CLIFF'S SUGGESTION WAS TO ADD ONE, POSSIBLY GOOD FRIDAY.
CUZ CLIFF WANTS US WORKING ON ALL THE FEDERAL HOLIDAYS THIS YEAR,
BUT, UM, YEAH, SO WE WANTED TO KIND OF WRAP THIS DISCUSSION UP ON ERCOT PRESENTATION SOON, THEN KIND OF GO BACK TO THAT SUMMARY SLIDE WITH THE SIX OPTIONS, SEE IF THERE'S ANYTHING WE CAN ELIMINATE ANYTHING, YOU KNOW, WE NEED, I'M HEARING IT'S THIS, ANYTHING THAT NEEDS TO BE IN PAIRS.
AND TRY TO MAYBE GET DOWN TO ONE RECOMMENDATION TODAY, MAYBE IN THE NEXT MEETING, TALK THROUGH HOW WE WOULD PRESENT THAT TO R AND M, YOU KNOW, THE PROS, CONS, ALL THE THINGS WE'VE TALKED ABOUT TODAY IN TERMS OF COST, RELIABILITY, IMPLEMENTATION, AND THEN TAKE THAT TO R M.
DOES THAT MAKE SENSE? THANK YOU.
UH, BILL, YOU STILL WANNA BE LAST OR, WELL, I JUST WANNA CLARIFY, SO THIS IS THE ONLY RECOMMENDATION T'S GONNA MAKE TO THE BOARD.
UM, I'M A LITTLE BIT SURPRISED THAT OPTION FIVE OR FOUR, THE, UH, CAPACITY CON CONTRACT FOR CAPACITY IS, IS THAT, SHOULD WE READ INTO THAT, THAT YOU DO NOT SUPPORT, UM, RM R FOR CAPACITY? IF THERE WERE TO BE A WAVE OF RETIREMENTS, YOU'RE NOT GOING TO INVOKE THAT TOOL? OR IS THAT SOMETHING THAT YOU JUST DON'T SEE AS A BRIDGE? YOU'RE GONNA USE IT ANYWAY? I I THINK IT'S A TOOL THAT WE HAVE AVAILABLE THAT'S IN THE PROTOCOLS AND IF WE NEEDED TO USE IT, WE, WE WOULD USE IT.
AND WITH THE NEW RDC CHANGE, UM, I, WE DO FEEL PRETTY STRONGLY IT SHOULD BE PERMANENT.
WE SUPPORT YOUR 10 $20 FLOOR, UH, CONCEPT BECAUSE IT DOES ALIGN WITH THE RELIABILITY NEEDS THAT, THAT YOUR OBJECTIVES ARE RIGHT NOW IN OPERATIONS.
WHY WE WOULD SUPPORT THE RDC CHANGE BEING PERMANENT IS, YOU KNOW, THERE ARE A LOT OF CONCERNS WITH THE COST OF THE PCM TO THE EXTENT WE STRENGTHEN THE ENERGY AND ANCILLARY SERVICE MARKET
[01:20:01]
THAT REDUCES THE DEPENDENCY, THE DEPENDENCY ON THE PCM FOR REVENUES TO HIT CONE, WHICH I THINK THERE PROBABLY, PROBABLY IS CONSENSUS ON, RIGHT? WE WANT THE PRIORITY TO BE ENERGY AND ANCILLARY SERVICE REVENUES DRIVING THE BUS IN TERMS OF REVENUES.AND THE PC ONLY ACTS AS A BACKSTOP IN CASE WE NEED IT TO HIT A RELIABILITY STANDARD.
SO THAT'S WHY WE WOULD SUPPORT A, IT BEING PERMANENT AND HAVING A STRONG SCARCITY PRICING MECHANISM IN THE ENERGY MARKET.
UM, IN TERMS OF THE T RECOMMENDATION, AND YOU DIDN'T OPPOSE INDICATIVE PCM, IT JUST, YOU DON'T SEE IT AS A BRIDGE, WHICH IT'S, IT'S NOT A BRIDGE, IT'S, IT'S INFORMATIONAL ONLY IS THAT, IT JUST DOES NOT SEEM TO ALIGN WITH SOME OF THE, SOME OF THE DECISIONS BEING IN THE HANDS OF THE LEGISLATURE.
UM, SO WE THOUGHT IT JUST MAKES, CREATES A LIGHTNING ROD AND THERE'S NO REAL VALUE.
I GUESS WE WOULD DO THAT AS A BRIDGING SOLUTION.
I I WAS THINKING WE WOULD, WE WOULD OBVIOUSLY QUALIFY THAT.
SO, UM, MY SUGGESTION FOR THE TAC RECOMMENDATION WOULD BE, UH, ENDORSE AIRCRAFT'S RECOMMENDATION FOR THE RDC CHANGES AND QUALIFY AN INDICATIVE PCM.
IF THAT ENDS UP BEING THE ULTIMATE RESOURCE ADEQUACY SOLUTION, THEN TAC WOULD RECOMMEND AN INDICATIVE PCM.
I WOULD LOVE TO HAVE SOME DISPARAGING COMMENTS IN THE TAC RECOMMENDATION ON RMR CONTRACT, BUT I DON'T KNOW IF EVERYONE AGREES WITH ME ON THAT ONE.
WE'RE GONNA TRY TO CURB THIS CON DISCUSSION HERE IN ANOTHER SEVEN MINUTES.
SO, UM, WE GOT NAVA FOLLOWED BY DAVID AND THEN WE'RE GONNA HAVE TO START CURTAILING THE QUEUE.
SO NAVA, SO I JUST WANT TO SAY THAT CONSUMER CANNOT RESPOND TO SMALL DOLLAR INCREASE AND, UH, WE ARE WORRIED THAT OUR FLOOR JUST FUNCTION TO MOVE MONEY FROM BUYER TO SELLER, AND IT DOES NOT REALLY ALLOW PEOPLE TO RESPOND TO THE PRICE.
SO, UM, I WOULD, I WOULD SAY I CANNOT, I MEAN, SUPPORT THIS PERSON, IN FACT.
CAN I, I, I DIDN'T, SOMETHING HAPPENED TO THE MIC AND I DIDN'T HEAR THE END OF WHAT YOU SAID.
COULD YOU, I I JUST WANNA MAKE SURE I HEAR WHAT YOU HAVE TO SAY.
CONSUMER CANNOT RESPOND TO A SMALL DOLLAR INCREASE AND WE ARE WORRIED THAT THE FLOOR JUST FUNCTION TO MOVE MONEY FROM BUYER TO SELLER, AND IT DOES NOT REALLY ALLOW PEOPLE TO RESPOND TO THE PRICE.
ALL RIGHT, DAVID? YEAH, I'D APPRECIATE A REFRESHER ON THE MECHANICS OF THE SITUATION WHERE WE HAVE A PRICE BLOWOUT.
WE HIT THE, THE THING AND THE THE CAP COMES DOWN THE OFFER CAP, THE, I'M DRAWING A BLANK ON THE NAME, BUT, SO WHAT'S GONNA HAPPEN TO, TO, UM, THE RDC ONCE THAT HAPPENS? ARE WE STILL GONNA SEE HIGH PRICES OR IS THAT GONNA BE CURTAILED WITH THE, UH, THE L CAP? SO THE, UH, MOVEMENT, UM, FROM $5,000, WHICH IS THE H CAP TO, UH, $2,000, WHICH IS THE L CAP HAPPENS IF YOU HIT THREE TIMES PEAKER NET MARGIN, WHICH COMES OUT TO, IF I REMEMBER CORRECTLY, 340 THOU 5,000, UH, IN THAT, UH, PIKER NET MARGIN CALCULATION, THERE WOULD BE, UH, AS THIS IS PROPOSED, NO, UH, CHANGE IN THE FLOORS.
IF THAT WERE TO HAPPEN, MAYBE THERE'LL BE SOMETHING WORTHY OF CONSIDERATION IF WE'VE EXCEEDED KG IN THE GOLD SEEMS TO BE CONE, YOU EXCEED IT THREE TIMES.
AND MAYBE THAT'S SOMETHING YOU THINK ABOUT.
SO MAYBE NOT SOMETHING FOR YOU TODAY, BUT JUST SOMETHING FOR EVERYBODY IN THE ROOM TO THINK ABOUT IS JUST ANOTHER CONTINGENCY WE GOTTA PLAN FOR.
I I, UH, I MEAN WE, WE CAN TAKE THAT.
I THINK THAT'S A VALUABLE DATA POINT.
UM, I BELIEVE THE DECREASE TO 2000 WAS MEANT TO ADDRESS THAT ISSUE, BUT THIS FLOOR DIDN'T EXIST WHEN THAT RULE WAS MADE.
HAVE A COMMENT FROM BOB WHITMEYER.
YEAH, BOB WHITMER SPEAKING ON BEHALF OF BROADREACH POWER.
THAT WAS EXACTLY OUR COMMENT WAS THAT, YOU KNOW, PERHAPS THE COMMISSION COULD LOOK AT LCAP AND RESET IT RATHER THAN PEAK NET MARGIN.
SOMETHING AT A PERCENTAGE OF CONE.
[01:25:01]
THINK THAT'S ALL IN THEIR HANDS.CAN IT BE THAT THERE ARE NO FURTHER CARDS WITH, UH, WE'VE GOT ONE FROM THE PHONE, SO, OH, OKAY.
YEAH, JUST WANTED TO CLARIFY TO SEE IF ALL TECHNOLOGY WOULD BE ELIGIBLE TO RECEIVE THE PERFORMANCE PAYMENTS.
ARE YOU ASKING ABOUT PCM OR ARE YOU ASKING ABOUT OUR BRIDGE SOLUTION? THE BRIDGE SOLUTION.
THE BRIDGE HAS NO, UH, BARRIERS ON, UH, ANY TECHNOLOGY THAT IS ONLINE REC BEING ABLE TO QUALIFY FOR THE FLOOR.
OKAY, SO BY MY CLOCK, WE HAVE THREE MINUTES TO SPARE.
I HAVEN'T HEARD FROM CAITLIN YET, SO MY THOUGHT WAS DO WE THINK WE NEED TO GO AHEAD AND DO ANOTHER CONE STUDY TO BE PREPARED IF WE'RE GONNA USE THE CONE AND THE CALCULATION OF PNET MARGIN AND THAT KIND OF THING? CAUSE WE HAVEN'T, WE DIDN'T DO ONE LAST YEAR, CUZ WE SAID THE WHOLE WORLD HAS CHANGED.
WHAT DO Y'ALL THINK? I DON'T PASS IT TO THE NEW SO CHAIR, I THINK ERCOT NEEDS TO REFRESH ITS CONE STUDY.
YEAH, KAAN, I DON'T, I DON'T KNOW IF YOU HAVE SOMEBODY ON THE LINE TO SPEAK TO THAT.
I I WOULD THINK THAT, YOU KNOW, WE, WE KIND OF DELAYED THAT DUE TO ALL THE OTHER CHANGES WE WERE WORKING ON, UM, AND THE INPUTS.
AND I WOULD JUST THINK THAT MIGHT CHANGE DEPENDENT ON THE, THE ULTIMATE SOLUTION, RIGHT? I THINK CARRIE BROUGHT THAT UP.
HOW YOU USE THAT IN A PCM SITUATION WOULD PROBABLY BE DIFFERENT.
SO I, I DON'T KNOW IF THIS IS THE APPROPRIATE TIME TO DO IT WITH THINGS PENDING.
WELL, I THINK THAT'S THE PERFECT TIME TO DO IT WITH THINGS PENDING AND IT BEING AN IMPOSSIBLE OPTION, YOU NEED TO KNOW WHAT IT IS.
SO IF YOU ARE SAYING ERCOT NEEDS TO REFRESH THE CONE STUDY, THAT'S ONE THING.
THE SUBSTANTIVE RULE, AS I RECALL, UH, POINTS TO THE STAKE STAKEHOLDER PROCESS, UM, CONE WILL BE DE FACTO UPDATED IN ANY KIND OF RESERVE MARGIN RELIABILITY STANDARD STUDY.
SO THERE WILL BE A VALUE IN THAT, WHETHER THAT ALIGNS WITH SOME VOTES AT A STAKEHOLDER PRO THROUGH THE STAKEHOLDER PROCESS.
I, I, I JUST, I, I, I DON'T, I DON'T KNOW HOW THAT WOULD PLAY OUT.
SO IT'S KIND OF BEEN A, A DIFFICULT PROCESS TO MOVE FORWARD.
SO I CAN TELL YOU THAT WE'LL BE LOOKING AT THAT.
I CAN'T TELL YOU HOW THAT PLAYS INTO ALL THE EQUATIONS AND THINGS LIKE THAT.
I I JUST FEEL LIKE WE'RE GONNA GET TO A POINT WHERE IT'S GONNA MATTER AND WE'LL HAVE NOT ADDRESSED IT BETWEEN, ESPECIALLY WITH THE RELIABILITY STANDARD.
UH, WE, WE NEED TO GET THAT, THAT PIECE OF THAT PUZZLE NEEDS TO BE ADDRESSED.
I, YEAH, I I THINK AS WE LEFT IT, IT, IT'S STILL BASICALLY, I THINK ONLY REQUIRES A VOTE AT TECH TO CHANGE THAT CODE NUMBER.
WE HAD BEEN WORKING ON AN EFFORT TO KIND OF IMPLEMENT A REGULAR STUDY PROCESS BEFORE URI.
UM, AND I THINK WHAT ERCOT HAS SUGGESTED IS THE CONE COMING OUT OF THAT RELIABILITY STUDY COULD BE SOMETHING PRESENTED TO WMS AND THEN TAC COULD VOTE ON THAT.
SO IT, IT WOULD BE A RELATIVELY, YOU KNOW, STRAIGHTFORWARD I THINK IMPLEMENTATION PROCESS OF THAT IF, IF EVERYBODY WAS AGREEING ON WHAT CAME OUT OF THE STUDY.
BILL, YOU GOT IN UNDER THE WIRE ON THE 11 O'CLOCK, SO YOU'RE THE LAST COMMENT YES.
SORRY, JUST ON THE, ON THE CONE.
UH, IF WE'RE, IF WE'RE THINKING THAT NEEDS TO BE UPDATED FOR THE PI NET MARGIN CALCULATION, I WOULD JUST REMIND EVERYONE THE COMMISSION HAS A PROJECT OPEN TO IMPLEMENT A PORTION OF SENATE BILL THREE CALLED EMERGENCY PRICING PROGRAM THAT COULD VERY WELL REPLACE THAT.
SO I THINK WE SHOULD PROBABLY LET THAT PROJECT PLAY OUT FIRST TO SEE WHAT, WHERE WE END UP.
WELL, KENAN, THANKS FOR TAKING THE TIME THIS MORNING.
WE SPENT A LITTLE OVER AN HOUR ON THIS ISSUE AND SO I, WHAT I'D LIKE TO DO IS, IS SHIFT GEARS, UM, TO START THINKING ABOUT A TAX SOLUTION.
BUT BEFORE WE DO THAT, LET'S, LET'S TAKE A 10 MINUTE BREAK.
[01:30:01]
1112 AND, UH, START PICKING UP THE PROCESS FOR CREATING ATTACK RECOMMENDATION.OKAY, EVERYONE, SO WE'LL START THE SECOND PHASE OF THIS DISCUSSION.
UM, MAYBE PHASE IT IN THE BEST WORD TO USE, BUT WE'LL, WE'LL START THE SECOND PART OF OUR DISCUSSION IN TERMS OF TRYING TO DEVELOP OUR, OUR RECOMMENDATION HERE.
SO, AND COREY'S PULLING UP THE OPTIONS THAT WERE DISCUSSED IN PRIOR WORKSHOPS HERE, UM, I HAVE HEARD A FEW INDICATIONS THAT FOLKS MAY WANT TO PAIR UP SOME OF THESE, AND SO THAT'S AN OPTION THAT WE CAN, WE CAN DO AS WELL.
WE DON'T NECESSARILY HAVE TO LOOK AT THESE SPECIFIC OPTIONS.
UH, I WOULD ALMOST ARGUE AT THIS POINT THAT ENHANCEMENTS OF THE R R D C THAT'S LISTED ON HERE WERE RELATIVELY GENERALIZED AND NOT NECESSARILY SPECIFIC.
SO I, I WOULD OFFER THAT THE ERCOT PROPOSAL THAT CANAN BROUGHT FORTH A LITTLE BIT AGO MIGHT BE AN ADDITIONAL OPTION IN ADDITION TO THE SIX THAT YOU SEE ON THE SCREEN AS WELL.
SO IF YOU REMEMBER AT OUR LAST TAC MEETING, AND, AND I WANT FOLKS TO KEEP THIS IN MIND AS WE'RE MOVING FORWARD HERE.
AT OUR LAST TAC MEETING, WE HAD A COUPLE OF REVISION REQUESTS WHERE, UH, DECISIONS OF THE BOARD OR RATHER OFT WERE APPEALED TO THE BOARD, UH, PARTICULARLY AS IT PERTAINS TO UNSECURED CREDIT AND TO THE OUTAGE RATIONING PROCESS THAT EXISTED.
ONE OF THE MESSAGES THAT CAME AWAY FROM THOSE APPEALS THAT, THAT I, I GARNERED THROUGH, UM, FEEDBACK FROM THE BOARD WAS THAT THEY WERE REALLY LOOKING FOR OPTIONS.
AND SO WE'VE GOT, I THINK, A, A FAIRLY CLEAR CHOICE TO MAKE, I THINK UP FRONT IN TERMS OF WHETHER WE WANT TO HAVE A SINGULAR ATTACK RECOMMENDATION OR WHETHER WE WANT TO HAVE A RANKED, UH, SET OF RECOMMENDATIONS THAT, THAT WE RECOMMEND TO, TO R AND M.
SO THAT IS NOT TYPICALLY THE WAY WE OPERATE.
THAT IS FAR FROM COMFORTABLE, I WOULD SAY, IN TERMS OF THE WAY THAT WE'VE DONE THINGS HISTORICALLY HERE.
BUT IT'S SOMETHING THAT WE MAY WANT TO CONSIDER IN TERMS OF PROVIDING OUR PREFERENCES, UH, TO THE R AND M AND TO THE BOARD IN THAT REGARD.
WE CAN STILL ENDORSE A, A PREFERRED METHODOLOGY, BUT I, I WOULD THINK WE MIGHT WANT TO DRIVE, UH, MAYBE A, A RANKED ORDERING TO THOSE RECOMMENDATIONS POTENTIALLY AS WE MOVE FORWARD.
SO, SO THAT BEING SAID, WE'VE GOT SIX DIFFERENT OPTIONS UP HERE.
UM, WE'VE GOT A BASIC MANUAL IMPLEMENTATION OF PCM.
WE'VE GOT PROCUREMENT OF ADDITIONAL ANCILLARY SERVICES ENHANCEMENTS TO THE RDC BACKSTOP RESERVE SERVICE CONTRACTS FOR CAPACITY AKIN TO RMR AND THEN INDICATIVE PCM VALUE PUBLISHING.
AND SO THAT BEING SAID, UM, CAITLIN KIND OF LAID OUT THE PROCESS EARLIER AND, AND THAT MAY HELP US WITH OUR DECISION MAKING AS WE MOVE FORWARD.
SO I THINK THE WAY WE WERE LOOKING AT THIS WAS WAS TO TAKE THE THINGS THAT ARE ON THE BOARD RIGHT NOW, DECIDE IF THERE'S ANY OF THOSE THAT WE CAN ELIMINATE, UH, IF WE CAN GENERALLY AGREE THAT THERE'S SOME OF THESE THAT WE THINK ARE, ARE NON-STARTERS THAT WE DON'T WANT TO CONSIDER THAT WOULDN'T GARNER ENOUGH SUPPORT TO MOVE FORWARD.
SECOND THING WE MIGHT WANT TO DO IS DETERMINE WHETHER THERE'S ANY OF THESE THAT ARE MUST HAVES, YOU KNOW, AND, AND, AND I'M JUST THROWING IT OUT THERE, PCM INDICATIVE PCM VALUES.
MAYBE THAT'S SOMETHING FOLKS THINK OR MUST HAVE, AND IF THEY WANT TO WANT IT TO BE PAIRED UP WITH ANY AND ALL RECOMMENDATIONS, THAT'S PERFECTLY FINE.
UM, THE THIRD OPTION, OR THE THIRD STEP WOULD BE TO LOOK AT ANY OF THESE OPTIONS THAT ARE UP HERE AND, AND SEE IF THERE'S ANY OF THEM THAT ARE NATURAL PAIRINGS, THINGS THAT WE SHOULD GO AHEAD AND PAIR UP IMMEDIATELY AND, AND CONSIDER THEM AS, AS AN ALTERNATE TO JUST THESE SIX ON A STANDALONE BASIS.
SO MAYBE WE LOOK AT A PAIRING OF ENHANCED O RDC AND INDICATIVE PCM VALUES TO BORROW FROM, FROM WHAT BOB WAS STATING EARLIER.
AND THEN I, I THINK OUR FOURTH STEP WOULD BE TO SEE IF WE CAN GET A FINALIST, UH, OF THOSE SOLUTIONS OR PAIRS OF SOLUTIONS AT THAT POINT.
ONCE WE HAVE THAT FINAL PAIR, THEN WE START LOOKING AT MAYBE STRAW POLLS TO INDICATE WHICH ARE THE MOST POPULAR, WHICH WE THINK ARE THE BEST OPTIONS TO MOVE FORWARD AT THAT POINT IN TIME AND, AND RANK 'EM IF, IF WE SO DESIRE TO DO SO.
SO THAT WOULD BE KIND OF ONE WAY TO GET THERE.
WE CAN JUST PICK AN OPTION OR PAIR OF OPTIONS AND JUST VOTE ON IT AND NOT DO THE RANKING, BUT JUST WANTED TO PROVIDE A COUPLE DIFFERENT ALTERNATIVES AT THIS POINT FOR FOLKS TO CONSIDER.
SO BEFORE WE GET INTO ANY OF THE DETAILS THERE, I'VE JUST WANTED TO HEAR FEEDBACK MORE SO ON THE PROCESS BEFORE WE DID ANYTHING.
I THINK BOB WAS UP FIRST, FOLLOWED BY KEVIN AND THEN BILL, WELL, MINE WAS MORE ON THE, THE SUBSYSTEM STUFF RATHER THAN ON THE PROCEDURE.
SO IF YOU WANT TO DO THAT FIRST, I MEAN, OR I CAN JUMP IN WHICHEVER YOU PREFER.
[01:35:01]
THE ONLY THING I WAS GONNA ADD WAS I, I THINK WE CAN DECIDE WHETHER WE'RE READY TO TAKE THAT VOTE TODAY OR NOT.AND, AND IF NOT, WE STILL HAVE THAT OTHER MEETING ON THE BOOKS.
AND I CAN BE SHORT AND WEBEX ONLY IF WE WANT, BUT IF EVEN IF WE COALESCE AROUND AN IDEA, WE CAN GIVE PEOPLE TIME TO, TO THINK ABOUT IT.
AND THEN I THINK WE DID WANT TO MAKE SURE IF THAT IDEA IS DIFFERENT THAN ERCOT PROPOSAL THAT WE HAVE THAT FLESHED OUT FOR R AND M AND THE BOARD ON, ON WHY WE'RE PROPOSING IT AND KIND OF ALL THE DETAILS OF IMPLEMENTATION AND BENEFITS TO RELIABILITY.
UH, I WILL SAY ONE THING ON PROCESS, GO AHEAD, BOB.
UH, AND, AND ON THE PROCESS, AND I THINK SOME OF THE THINGS WE NEED TO CONSIDER WHENEVER WE'RE THINKING ABOUT THE PROCESS OF WHAT WE'RE GOING TO POTENTIALLY EITHER FORCE RANK OR WHATEVER, WHICH ACTUALLY IN MY MIND, THAT WOULD BE LIKE GOOD AND THEN ALL BAD.
BUT THAT'S, THAT'S WHAT I'LL TALK ABOUT LATER IS NEED TO THINK ABOUT THE CRITERIA THAT THAT IS ON, WAS ON THE LAST SLIDE OF THE LAST PIECE IS WE GOTTA MAKE SURE THAT WE'RE ABLE TO DO, LIKE, SOME OF THESE MAY TAKE TOO LONG, SOME OF THEM AREN'T GONNA FIX WHAT WE WANT TO FIX, SO WE NEED TO LOOK AND MAKE SURE THAT IF WE'RE GONNA RANK THOSE, THAT AS WE RANK, THEY FIT INTO THE CATEGORY OF DOING WHAT WE ACTUALLY WANT TO DO AS A BRIDGE, NOT AS A LONG-TERM SOLUTION, AS A BRIDGE.
AND THAT I WANNA MAKE SURE THAT'S, I, I AGREE AND I WANT THINK, WE WANNA MAKE SURE THAT'S PART OF THAT PRESENTATION TO R AND M.
UM, ARE WE GONNA DISCUSS OTHER PROPOSALS BEFORE WE DO THE RANKING? YES, WE CAN DEFINITELY DO THAT.
AND THEN, UH, BILL, SO WE'RE STILL ON THE PROCEDURAL PART? YES.
UH, JUST TO BE CLEAR, THE TAC RECOMMENDATION WILL BE DISTINCT AND DIFFERENT FROM ERCOT RECOMMENDATION? IT YES.
IN TERMS OF PRESENTATION, IT MAY BE THE SAME RECOMMENDATION, BUT IT'LL BE DISTINCT AND APART FROM, AND IT WILL BE PRESENTED SEPARATELY AT RMC AND MAYBE THE BOARD, BUT DEFINITELY AT ARM.
UM, SO ON THE PROCESS, I THINK, UM, THERE ARE VERSIONS OF THESE THAT I THINK THE CONSUMERS COULD SUPPORT AND OTHERS THAT WERE RELUCTANT TO SUPPORT.
SO FOR EXAMPLE, ON R D C, YOU HEARD CONCERNS FROM NAA EARLIER ABOUT, OR TECH PROPOSAL, BUT, UM, YOU KNOW, THERE MIGHT BE OTHER CHANGES TO, UM, THE RD CURVE THAT WE COULD SUPPORT.
SO I ONLY BRING THAT DETAIL, BUT COULD SOME NUANCE AND CONS RECAPTURE.
UM, SO BOB, ARE YOU UP FOR PROCESS OR ARE YOU UP FOR, OH, OKAY.
SO I GUESS JUST LOOKING AROUND THE ROOM, WE'RE, WE DON'T NECESSARILY NEED TO VOTE ON THIS, BUT IN TERMS OF PROCESS, DO WE WANT TO DO A RANKED PROCESS OR DO WE WANNA DRIVE TOWARDS A SINGULAR, UM, SINGULAR RECOMMENDATION? IAN CLIFF, UNLESS, SORRY, SORRY, SUSIE, UH, CLIFF IN, UNLESS TACK CAN'T COME TO A SINGULAR, UM, RECOMMENDATION, I, I'D RATHER SEE US GET THERE.
I, I, I LIKE THE IDEA OF DIFFERENT VOICES BEING ABLE TO BE HEARD AT R M C, UM, BUT I ALSO DO THINK THAT TAX RECOMMENDATION, UM, HOLDS A CERTAIN AMOUNT OF WEIGHT AND THEREFORE IT SHOULD BE A, UM, A CLEAR RECOMMENDATION.
UH, EMILY, SO I GUESS I HAVE SOME QUESTIONS ABOUT WHAT A SINGULAR RECOMMENDATION LOOKS LIKE AND HOW THE MINORITY VIEW WOULD BE REPRESENTED.
UM, I DON'T THINK A, YOU KNOW, 51 49 VOTE ON A RECOMMENDATION NECESSARILY HAS THE SAME IMPACT AND, AND MEANING THAT WE WOULD CONVEY TO THE BOARD IS SOMETHING WITH A MUCH BROADER MAJORITY, UM, GIVEN, YOU KNOW, WHERE PEOPLE ARE PLOTTED OUT ON THIS.
UM, I, I, I DON'T KNOW THAT THIS IS REFLECTIVE OF WHERE PEOPLE ARE TODAY BASED ON SUBSEQUENT COMMENTS AND DISCUSSION, EXAMINATION OF THESE PROPOSALS.
UM, DO WE WANNA START WITH A STRAW POLL TO UNDERSTAND WHERE THERE IS THE MOST COALESCENCE AND THEN WE CAN DECIDE WHETHER WE WANT TO MOVE TOWARD A SINGULAR RECOMMENDATION OR A DIFFERENT RANKING SYSTEM? FAIR? YEAH, I, THAT'S FAIR FOR ME.
THAT ELIMINATE SOME FIRST YEAH, WE WERE WONDERING IF WE, THERE WERE SOME, WE COULD TAKE OFF THE BOARD FIRST, BUT I DON'T KNOW, DO IT WITH A STRAW POLL.
[01:40:02]
OKAY.UM, SO YEAH, WE CAN CERTAINLY LOOK AT IT ON A STRAW POLL BASIS.
I, I HAVE NO OBJECTION TO THAT.
SO LET, LET'S MAKE OUR WAY THROUGH THE REST OF THE COMMENTS.
YEAH, I WAS JUST GONNA COMMENT ON, ON SOMETHING EMILY SAID ABOUT A 54 SOMETHING VOTE.
AS FAR AS I'M CONCERNED, IF WE DON'T GET TO TWO THIRDS, WE DON'T HAVE A RECOMMENDATION, SO THERE WOULDN'T BE ANYTHING TO RECOMMEND.
SO I JUST WANTED TO CLARIFY THAT.
BILL, SIMILAR TO BOB'S COMMENT, I THINK THE, THE TACK OPTIONS WILL BE, WILL NATURALLY FLOW OUT OF THE DISCUSSION IN THE ATTEMPT TO REACH CONSENSUS OR A SINGULAR RECOMMENDATION.
FOR EXAMPLE, UH, IF WE SAY ENHANCE O RDC, SOME WILL SUPPORT THAT IF WE SAY ENHANCE O RDC, DO INDICATIVE PCM, SOME MAY SUPPORT THAT.
IF THOSE, IF THERE'S SOME THAT DISAGREE, THEN I THINK THAT BECOMES ANOTHER T OPTION.
LIKE FOR INSTANCE, THE CONSUMERS HAVE, UH, VOICED CONCERN ABOUT ENHANCING THEIR RDC, SO THEY COULD HAVE A, A SEPARATE RECOMMENDATION THAT THEY PRESENT.
UM, BUT I DO AGREE WITH EMILY, IAN IS WORKING TOWARDS A SINGULAR SOLUTION OR RECOMMENDATION, I THINK, UH, IS THE RIGHT APPROACH AND WE WILL NATURALLY, THE OTHER ALTERNATIVES WILL NATURALLY FOLLOW THAT DISCUSSION, I THINK.
UM, AS FAR AS PRESENTATION R AND M, MAYBE THAT'S PROBABLY A GOOD SEGUE AT THIS POINT IN TIME, I'VE HAD SOME DISCUSSION WITH KAAN IN TERMS OF, UH, WHAT, WHAT OUR ABILITY IS GOING TO BE IN TERMS OF HAVING NOT ONLY THE OFFICIAL TAC REPRESENTATION OF OUR POSITION PRESENTED THERE, BUT ALSO ALTERNATE, UH, ALTERNATE VIEWS.
SO KAAN, DID YOU WANNA SPEAK TO THAT? UM, UH, I MEAN, SO I THINK WE ARE, UH, ACCOMMODATING, UH, TIME FOR ERCOT STAFF TO PRESENT FOR, UH, CLIFF OR CAITLIN TO KIND OF DESCRIBE THE PROCESS THAT TACK HAS GONE THROUGH AND POTENTIALLY, UH, YOU KNOW, A COUPLE OF, UH, ALTERNATE VIEWS TO WHAT STAFF, UH, ERCOT STAFF I IS PROPOSING.
UM, IT STARTS, UH, YOU KNOW, IF THERE'S FIVE DIFFERENT PROPOSALS, I THINK THAT'S GONNA BE PROBLEMATIC AT, AT R AND M JUST FROM A TIME CONSUMPTION PERSPECTIVE, BUT THAT, THAT'S WHAT WE'VE BUILT ULTIMATELY, YOU KNOW, UM, WE'RE GONNA TRY AND ACCOMMODATE ANYTHING THAT TACK WANTS TO DO.
IT'S JUST, THAT'S THE WAY THE TIME'S BEEN LAID OUT AND, AND, UH, SO, SO, YOU KNOW, WE'LL, UH, WE'LL RETHINK IT, UH, DEPENDING ON WHAT, WHAT COMES OUT OF THIS.
SO THAT'S, THAT'S WHERE WE'RE AT RIGHT NOW.
THANKS FOR LAYING THAT OUT, KENAN.
SO, OKAY, SO LET'S, LET'S DO THIS.
LET'S SEE IF THERE'S ANY OF THESE RIGHT OFF THE BAT THAT WE CAN PULL OFF FROM A CONSIDERATION STANDPOINT.
UM, I WOULD LOVE TO SEE, UH, THE CONTRACTS FOR CAPACITY PULLED OFF.
UM, LOOKING AT THE NUMBER OF NOS THAT ARE ON THE SCREEN, I THINK THIS IS GONNA BE PROBABLY FAIRLY EASY IN TERMS OF ELIMINATING, BUT GO AHEAD, BILL.
I, I HAVE A VARIATION OF THAT TO POTENTIALLY ADD TO THE TACK RECOMMENDATION.
THAT'S NOT A FULL ON ELIMINATION, BUT PUTS GUARDRAILS, GUARDRAILS, A POPULAR TERM, GUARDRAILS ON THE USE OF THAT TOOL.
UH, BUT I WOULD SUGGEST THAT WE REMOVE, UH, OPTION ONE.
REMOVE WHICH ONE? I'M SORRY? OPTION ONE.
OPTION ONE, WHICH IS IMMEDIATE IMPLEMENTATION OF THE PCM.
SO I, I DON'T WANT TO GET TOO, TOO CARRIED AWAY.
SO IAN BROUGHT UP CONTRACTS FOR CAPACITY.
BILL INDICATED THAT HE THOUGHT THAT THAT NEEDED TO HAVE SOME GUARDRAILS PLACED AROUND IT.
UM, LET'S JUST DO A STRAW POLL HERE JUST REAL QUICK.
UM, JUST TO GET A FEEL FOR CONTRACTS FOR CAPACITY REAL QUICK.
TRYING TO, TRYING TO FIGURE OUT THE BEST WAY TO DO THIS WHEN WE GOT FOLKS ON THE PHONE TOO.
SO, UHT MEMBERS ON ORAL VOTES LIKE WE USED TO.
WHAT'S THAT? JUST ORAL BOATS LIKE WE USED TO.
SO LET'S JUST THE PHONE AND CAN STICK CHAT.
IF YOU'RE ON THE PHONE AND YOU WANT TO, AND, AND YOU'RE A ATTACK MEMBER ONLY FOR TAC MEMBERS, UM, AND YOU WANT TO ENTER YOUR POSITION ON THIS ONE IN THE CHAT, WE CAN, WE CAN TALLY THOSE UP.
UM, SO CONTRACTS FOR CAPACITY, ALL THOSE THAT WOULD LIKE TO ELIMINATE THAT, PLEASE RAISE YOUR HAND.
[01:45:02]
CLIFF, I HAVE A QUESTION ON THAT ONE.GO AHEAD ON, SO THE CONTRACT FOR CAPACITY, IS IT LIKE IF WE ELIMINATED, UM, AIRCO WILL STILL BE ABLE TO R YEAH.
THIS IS NOT AN, NOT RMR, SORRY, RMR. RMR, THIS IS NOT AN ELIMINATION OF RMR. SO, AND, AND THE CONTRACT FOR IS MORE, MUCH MORE THAN RMR. YES.
THAT'S THE WAY I UNDERSTOOD IT WAS THAT THIS WOULD BE BEYOND RMR. SO GO AHEAD.
YEAH, MY THOUGHT WASN'T TO ELIMINATE ANY TOOLS, ERCOT ALREADY HAS.
IT WAS JUST TO SAY THAT CONTRACTS FOR CAPACITY WAS NOT THE PREFERRED BRIDGE SOLUTION.
WELL, LET'S REFRAME THE QUESTION HERE.
DOES ANYBODY OPPOSE ELIMINATING CONTRACTS FOR CAPACITY? IF SO, PLEASE, PLEASE VOICE THAT.
NOW, HOW ABOUT MODIFYING THAT? LIKE INSTEAD OF ELIMINATING, MODIFYING THAT SO THAT IT STAYS IN, UM, I WANT TO HEAR WHAT MODIFICATION THAT, UH, GO AHEAD.
BILL, BILL HAD, SO BEING REALISTIC, KNOWING THAT IF WE DO HAVE SOME MATERIAL AMOUNT OF RETIREMENTS OR CO WAS LIKELY TO INVOKE THAT SECTION OF THE PROTOCOLS, WHAT WE WERE THINKING WOULD BE A REASONABLE GUARDRAIL IS THAT IN THE, IT WOULD BE A RESOURCE ADEQUACY STUDY THAT DETERMINES WHETHER THESE CONTRACTS ARE NEEDED.
IT WOULD HAVE TO SHOW THAT THE RELIABILITY STANDARD THAT WILL BE ADOPTED SOON, I THINK BY MAY, WHERE WE HAVE TO DO THAT IS VIOLATED WITHIN SOME PLANNING HORIZON.
I'M THINKING THREE YEARS OR TWO YEARS OR SOMETHING LIKE THAT.
AND IF THAT'S NOT THE CASE, THEN THAT WOULDN'T MEET A CRITERIA FOR SIGNING THESE CONTRACTS.
SO I WANNA MAKE SURE, I WANNA BE CAREFUL THAT WE'RE NOT, NOT STEPPING OFF INTO TRYING TO MODIFY RMR AT THIS POINT IN TIME, NOT RMR, IT'S THE EMERGENCY CONTRACT SECTION, WHICH RIGHT NOW IS VERY, VERY LOOSE, GIVES ERCOT WIDE DISCRETION, RIGHT? AND I'M SUGGESTING IS WE TIGHTEN THAT DISCRETION SO THAT IT IS TIED TO THE RELIABILITY STANDARD.
AND I THINK THAT'S FAIR, BUT THAT, THAT EXISTS WITHIN THE PROTOCOLS ALREADY, RIGHT? SO I DON'T, I THINK THAT'S, I THINK THAT'S OUTSIDE OF THIS PROCESS, I WOULD ARGUE.
RIGHT? I, I DON'T KNOW THAT IT FALLS WITHIN THE CONTEXT OF BRIDGING AT THIS POINT.
I THINK THAT FALLS OUTSIDE OF A MODIFICATION WE PROBABLY NEED TO MAKE ALREADY.
SO, SO I'M HEARING NO SUPPORT FOR CONTRACTS FOR CAPACITY OR LIMITED SUPPORT.
NOT ENOUGH FOR US TO KEEP IT ON THE LIST.
SO WE WILL GO AHEAD AND ELIMINATE THAT ONE FROM CONSIDERATION.
NEXT ONE I HEARD WAS THE BASIC MANUAL IMPLEMENTATION OF PCM.
UH, THAT BEING SAID, UM, IS THERE ANYONE THAT WANTS TO KEEP THAT ONE ON THE LIST AT THIS POINT IN PO UH, AT THIS POINT? OKAY, SO WE'RE GONNA JETTISON THAT ONE AS WELL.
WE'RE GONNA WORK OUR WAY DOWN THE LIST BASED ON THE NUMBER OF NOS THAT ARE UP THERE ON THE SCREEN.
SO, UH, IT MIGHT BE THE EASIEST WAY TO DO IT.
IS THERE ANYONE THAT OPPOSES, ELIMINATING, ELIMINATING THAT FROM CONSIDERATION? OKAY.
CAN YOU REPEAT THAT ONE AGAIN? YEAH.
WHICH, WHICH ONE ARE YOU TRYING TO BACKSTOP RESERVE SERVICE? IS THERE ANYONE THAT OPPOSES, ELIMINATING, ELIMINATING THAT FROM CONSIDERATION? OKAY.
SO WE'VE GOT, WE'VE GOT THOSE THREE REMOVED FROM CONSIDERATION RIGHT NOW.
WE'VE GOT CONTRACTS FOR CAPACITY REMOVED, BASIC MANUAL IMPLEMENTATION OF PCM REMOVED, UM, BACKSTOP RESERVE SERVICE REMOVED.
SO NOW I SUSPECT THIS IS GONNA GET A LITTLE MORE CHALLENGING AT THIS JUNCTURE.
CAN WE REVERSE GEARS AND SEE IF ANYONE IS OPPOSED TO, UM, SUPPORTING PUBLISHING INDICATIVE PCM VALUES? THAT WAS GONNA BE OKAY.
I, I HAVE A VERSION OF THAT I JUST WANNA BE CLEAR ON.
I, I THINK IN ORDER TO PUBLISH INDICATIVE PCM VALUES, ERCOT WOULD HAVE TO DO THINGS LIKE PUBLISH A DEMAND CURVE.
AND IF, IF THAT'S THE DIRECTION WE'RE GOING, WE'RE, WE'RE PUBLISHING THE DETAILS OF WHAT GOES INTO IT IN ORDER TO DO THIS INDICATIVE, THAT'S SOMETHING I COULD GET COMFORTABLE WITH, EVEN IF WE'RE NOT COMFORTABLE WITH A PCM AT THIS TIME.
BUT, UM, I WANNA MAKE SURE WE THREAD THAT NEEDLE, THAT WHAT THIS DOES IS PUBLISH WHAT GOES INTO THE PCM, UM, SO THAT WAY PEOPLE CAN BETTER UNDERSTAND IT.
[01:50:01]
ERIC.YEAH, I, I THINK WE MIGHT, I DON'T KNOW HOW WE WANNA HANDLE THAT IN DISCUSSION RIGHT NOW, BUT WE MIGHT WANNA NOTE, OH, THAT'S, THAT'S WHERE WE'D NEED TO PROVIDE MORE DETAIL.
UM, TO BOB'S POINT EARLIER, ALL THE THINGS THE BOARD'S GONNA WANT TO SEE ON IMPLEMENTATION, UM, AND, AND MODIFICATIONS MIGHT BE NEEDED, BUT I DON'T KNOW HOW WE DISCUSS THOSE DURING THIS KIND OF POLLING.
WE MIGHT WANNA JUST PUT IN ASTERISKS ON IT.
SO LET'S, I DON'T WANNA LOSE CONTROL OF THE PROCESS HERE.
SO LET'S, LET'S MAKE SH LET'S TRY TO, WE'LL, WE'LL CONTINUE KIND OF BEING METHODICAL ABOUT THIS.
CAUSE I, I WANNA ELIMINATE WHAT WE CAN NOW.
AND FOR THOSE ITEMS THAT ARE LEFT, THEN WE CAN START LOOK AT WHICH ONES WE WANT TO GO AHEAD AND YEAH.
AND OUR DEFINITE ADDITIONS HERE.
SO, SO LET'S BACK UP FOR A SECOND.
SO, PROCUREMENT OF ADDITIONAL ANCILLARY SERVICES.
UM, ARE THERE ANY FOLKS THAT OPPOSE ITS ELIMINATION? FEEL STRONGLY ABOUT THAT? OKAY.
WHAT WAS THAT, BOB? YEAH, I, I'M NOT OPPOSED TO ELIMINATING THAT AS IT IS WRITTEN, BUT I JUST WANTED TO BRING UP, SINCE I BROUGHT IT UP AT THE LAST WORKSHOP, I WOULD NOT BE OPPOSED TO ELIMINATING THAT IF WE MADE THE CHANGE TO NONS SPIN TO, TO WHERE IT WAS, UH, MORE OF THE BACKUP OR THE UNCERTAINTY PRODUCT WHERE WE WENT TO TWO HOUR START AND A, YOU KNOW, AND THE FOUR HOUR DURATION.
AND THEN TO MAKE SURE THAT ERCOT WAS COMFORTABLE, THEY WOULD, COULD ADJUST THEIR AMOUNT OF ECR S TO ENSURE THEY HAD THEIR 30 MINUTE, UH, RESTORATION.
UH, IF, IF THAT WAS ON THE TABLE, I WOULD TEND TO SAY THAT COULD STAY ON AND ACTUALLY I WOULD SAY DO THAT AND THE ALREADY SEE IN THE END.
BUT THE WAY IT'S WRITTEN, I WOULD SAY WE COULD TAKE IT OFF.
EMILY? YEAH, I THINK THIS ONE'S A LITTLE MORE COMPLICATED AND PERHAPS CONDITIONAL ON THE WAY THE REST OF THIS GOES.
AND SO IF WE DON'T HAVE, UH, CONSENSUS ON ANYTHING GOING FORWARD, I DON'T WANT TO ELIMINATE THINGS WHERE THERE COULD BE A WORKABLE SOLUTION THAT COMES OUT OF IT.
I, I WOULD SAY, YOU KNOW, NOT TO UPSET YOUR PROCESS AND CLEAR THE SLATE.
I DON'T KNOW IF WE'RE GONNA BE ABLE TO DO THAT AND LEAVE ANYTHING ON THE TABLE THAT WE ALL AGREE TO.
SO REST ME, UH, MY POSITION IS SIMILAR TO, UH, EMILY'S IT IS CONDITIONAL IN THAT SENSE THAT IF O R D C IS, UH, SETTING THE PRICE TO AVOID THE ROCK, THEN MAYBE YOU DON'T NEED THIS THAT MUCH DURING THE BRIDGING SOLUTION.
IT DEPENDS LIKE WHAT WE CAN HAVE AS THE TAX SOLUTION.
YEAH, I'LL JUST ECHO IN SUPPORT OF BOB AND EMILY'S AND RESUME'S COMMENTS.
LET'S HOLD THAT ONE ON FOR RIGHT NOW AT THIS POINT IN TIME.
UM, OKAY, SO WE'VE GOT GOING DOWN THE LIST HERE AND, AND I'VE ALREADY HEARD OBVIOUS SUPPORT FOR ENHANCEMENTS TO RDC AND PUBLISH INDICATIVE PCM VALUES.
SO, SO WE'VE GOT, UH, WE'VE ELIMINATED A HANDFUL OF 'EM.
WE'RE STILL HOLDING ON TO THREE OF 'EM AT THIS POINT IN TIME.
SO I GUESS THE NEXT STEP IN THE PROCESS, GO AHEAD, IAN, BEFORE I TAKE THAT NEXT STEP, CLIFF, I ACTUALLY WANTED TO SUGGEST THAT WE ELIMINATE, UM, INDICATIVE PCM PRINTS, UM, HAVING SOME CONVERSATIONS AFTERWARDS, BETTER UNDERSTANDING, UM, THIS, I THINK IT MIGHT BE BETTER IF THAT IS SOMETHING WE TAKE UP AFTER THE LEGISLATURE HAS OPINED COMPLETELY.
UM, RATHER THAN, UM, JUMPING IN AT THAT NOW, UM, I THINK IT'S SOMETHING, MY UNDERSTANDING IS IT'S SOMETHING THAT WE COULD DISCUSS LATER IF WE, IF THAT'S THE ROUTE THAT THE COMMISSION'S GOING AND STILL GO DOWN THAT PATH.
UM, BUT I JUST THINK IT'S A LITTLE PREMATURE TO DO THAT TODAY.
GOOD JOB GETTING EXTRA CARDS UP.
RASHANI YE YEAH, SIM SIMILAR TO THAT, THAT IS WHAT I WAS GOING TO ASK IS WHAT ARE THE, UH, PARAMETERS OF STUFF THAT WE ARE GOING TO USE FOR THE PCM? SO IS, UH, END DOSING OR KEEPING THE PCM, UH, INDICATIVE, UH, ARE WE ADDING SOME CLAUSE TO IT THAT IF THAT IS THE DIRECTION GOING, THEN IT'LL BE DONE AFTER ALL OF THE PARAMETERS ARE FINALIZED OR SOMETHING LIKE THAT? OR WHAT IS THE QUALIFICATION? SO INDICATIVE? SO WHEN I, I TRY TO BOIL THIS BACK DOWN TO WHAT IS A BRIDGE SOLUTION, AND WHEN I THINK OF A BRIDGE SOLUTION, WE'RE TRYING TO MAKE SURE THAT WE'RE TRYING TO GET TO A POINT WHERE WE'RE PROVIDING INCENTIVES FOR PEOPLE TO COME INTO THE MARKET TO PROVIDE DISPATCHABLE GENERATION.
AND I'M REFERENCING SENATE BILL THREE.
SO WHEN I LOOK AT A BRIDGING SOLUTION, I'M LOOKING AT IT IN THE CONTEXT OF SENATE BILL THREE, WHICH THE INTENT WAS TO TRY TO PROVIDE ADDITIONAL REVENUES TO DISPATCHABLE GENERATION TO COME INTO THE MARKET.
[01:55:01]
THAT REGARD, DOES PCM CHECK THAT BOX? AND I WOULD ALMOST AR INDICATIVE PCM DOES THAT CHECK THAT BOX? AND I WOULD ALMOST ARGUE NO AT THIS POINT IN TIME, I WOULD URGE TACK TO PROBABLY SIT THIS ONE TO THE SIDE.IT PROBABLY HAS SOME VALUE TO IAN'S POINT ABOUT HOLDING OFF ON IT UNTIL AFTER THE LEGISLATURE MAKES ITS DETERMINATIONS.
THAT'S PROBABLY, I THINK, HELPFUL.
SO IT DOESN'T CONFUSE THINGS AS WE MOVE FORWARD, NOT ONLY FOR THE LEGISLATURE, BUT FOR ANYBODY ELSE THAT'S LOOKING AT THIS FROM THE OUTSIDE.
SO AGAIN, IS THIS REALLY FULFILLING THE FUNCTION OF A BRIDGE? I DON'T THINK SO, BUT WE CAN ALWAYS TAKE IT UP LATER AFTER THE LEGISLATURE PINES AND MAKES THEIR DETERMINATIONS ON THE BILLS THAT ARE OUT THERE.
I I COMPLETELY AGREE WITH THAT BECAUSE IT, IT'S NO VALUE IF THE MARKET BEHAVIOR IS GOING TO CHANGE WITH THE PCM, WHATEVER YOU ARE INDICATING, UH, IS.
SO MAYBE IT COULD BE A, UH, A TOOL THAT CAN BE DEVELOPED BY THE, OR LIKE SIMILAR TO O RDC SIMULATION WHERE PEOPLE CAN, UM, TRY OUT DIFFERENT SCENARIOS AND FIGURE OUT WHAT IS THE PRICE.
SO CREATION OF A TOOL, SOMETHING LIKE THAT MAYBE IS REASONABLE, BUT NOT ON A REGULAR BASIS.
UH, BILL CLIFF, I JUST WANTED TO OFFER, AGAIN, I THINK WE'RE THINKING OF, UM, OPTIONS OR EDUCATIONAL OPPORTUNITIES AT THE RMC.
UM, IF TACT DOES, UH, KIND OF LAND ON A SPECIFIC RECOMMENDATION AND YOU'RE LOOKING FOR, UH, ADVOCATES TO EXPLAIN, UM, ALTERNATIVES SUCH AS WINE INDICATIVE PCM MIGHT MAKE SENSE, UH, AND HOW THAT COULD LOOK, I WOULD RAISE MY HAND FOR THAT.
AND ALSO I WOULD BE HAPPY TO TALK ABOUT CONCERNS WITH CONTRACTS FOR CAPACITY AND IF THAT TOOL IS USED GUARDRAILS.
SO PART OF THE TAC PRESENTATION TO RMC WOULD INCLUDE THE RECOMMENDATION AND THEN MORE CALLER ON THE DISCUSSION AND OTHER THOUGHTS? I WOULD BE, I'D RAISE MY HAND IF YOU'RE LOOKING FOR VOLUNTEERS TO COVER THOSE TOPICS.
UH, SUSPECT WE WILL PROBABLY NOT HAVE ANY OBJECTIONS TO YOU CARRYING THE MANTLE, SO, ALL RIGHT, BOB.
YEAH, UH, WE'VE PRETTY MUCH EVERYBODY AGREES THAT THE PUBLISH THE INDICATIVE PCM IS NOT A BRIDGING OPTION.
IT HAS NOTHING TO DO WITH THE BRIDGING OPTION AT ALL.
HOWEVER, I WILL PUSH BACK SOME ON WHAT RES WAS SAYING ABOUT DO THIS LIKE WE DID WITH, UH, THE RDC AND COME UP WITH THE KEVIN HANSON, UH, MODEL THERE THAT, UH, HE, HE PUT TOGETHER BACK WHATEVER WE WERE DOING, THE RDC THAT THERE IS VALUE AND BILL KIND OF HIT ON IT.
THERE IS VALUE OF SEEING WHAT HOURS THAT WOULD ACTUALLY HIT IN REAL TIME.
UH, AND, AND THE PRICE IS GONNA BE INDICATIVE, IT'S GONNA CHANGE FOR WHATEVER THE CURVE ACTUALLY IS, BUT AT LEAST GIVES YOU AN IDEA.
UH, SO I THINK THERE IS VALUE IN THAT.
AND NOW THE QUESTION IS, IS DO WE, DO WE SAY THAT TO THE BOARD IN AS PART OF THE PRESENTATION, BUT NOT PART OF THE BRIDGE THAT WE LOOK AT THIS AS NOT BEING A BRIDGE.
HOWEVER, IF THE LEGISLATURE MOVES FORWARD WITH, WITH A TYPE OF PCM THAT AN INDICATIVE PRICING, WE WOULD FIND QUITE EDUCATIONAL, FULLY UNDERSTANDING THAT, YOU KNOW, BEHAVIORS WILL CHANGE ACTUAL RESULTS.
I, I THINK WE DO, I THINK IT FITS IN WITH THE TOPIC, AND I THINK WE TAKE THE OPPORTUNITY TO SAY, THIS IS PART OF OUR TECH RECOMMENDATION.
MAYBE IT DOESN'T FIT THE BRIDGING PARAMETERS, BUT IT IS A TECH RECOMMENDATION IN THE COURSE OF DISCUSSION ON BRIDGING SOLUTIONS.
RIGHT? AND THAT'S TO MAKE IT VERY, VERY, VERY, VERY CLEAR THAT THIS IS NOT AN IMPLEMENTATION OF ANY TYPE OF PCM AT ALL.
THIS IS JUST AN INDICATIVE PIECE TO SHOW.
AND THAT'S, AND I THINK THIS WILL BE A AND THAT WOULD NOT BE DONE UNTIL AFTER THE LEGISLATURE HAD MADE A DECISION.
YEAH, I THINK WE'VE GOT YOU UNANIMITY.
CAN CAN I ASK A QUESTION? GO AHEAD.
THAT WHY MAKE, WHY EXPRESS THAT NOW I'M OKAY WITH NOT VALUE TO THAT.
YEAH, I'M OKAY WITH NOT DOING EITHER, SO.
I JUST WANTED MAKE SURE I'M SAYING SURE.
THERE, THERE IS, IF WE WANT, THERE IS AN OPPORTUNITY, WE COULD SAY THAT IT'S A GOOD IDEA IF WE WANNA DO IT, BUT IT'S NOT PART OF WHAT WE'RE DOING, I THINK.
YEAH, THAT'S ALONG THE LINES THOUGH.
I WAS GONNA SUGGEST THAT WE, UM, ACKNOWLEDGE THAT THERE'S VALUE IN DOING THIS, UM, BUT THAT WE DON'T VIEW IT AS A BRIDGING SOLUTION.
DOES ANYONE OPPOSE, UH, TAX POSITION ON THIS OPTION BEING EXPRESSED IN THAT WAY? WATCHING THE CHAT MAY MAYBE MODIFYING IT A LITTLE BIT TO SAY VALUE IN DOING IT.
IF THAT IS THE DIRECTION WE ARE GOING,
[02:00:01]
A AS PART OF IMPLEMENTATION OF PCM, WE THINK THAT'S AN IMPORTANT STEP.I DON'T WANNA ASSUME ANY PARTICULAR OUTCOME.
GET TWO COMMENTS, ONE FROM ERIC AND THEN FOLLOWED BY JOHN RUSS.
UH, I APPRECIATE WHAT YOU'RE TRYING TO DO, EMILY, AND I'M NOT TRYING TO DERAIL THAT WHEN I SAY THIS, SO PLEASE DON'T INTERPRET IT THAT WAY.
BUT LIKE, IN ORDER TO DO THAT AS A, I AGREE, THAT WOULD BE A NECESSARY STEP TO IMPLEMENT PCM AND AS A NECESSARY, NECESSARY STEP TO DO AN INDICATIVE PCM, YOU'D FIRST HAVE TO COME UP WITH THINGS LIKE THE DEMAND CURVE AND PARTICIPATION REQUIREMENTS, ANY CREDIT REQUIREMENTS, THINGS LIKE THAT.
AND SO I, I WOULDN'T WANT TO DO IT IF WE'RE JUST TRYING TO, UH, RERUN THE E THREE REPORT, BECAUSE I DON'T KNOW IF THERE'S ENOUGH DETAIL IN THAT TO ACTUALLY DO A, A VALUABLE INDICATIVE PCM.
SO CONDITIONALLY TO THE EXTENT THAT THE LEGISLATURE AND THE COMMISSION BUREAU OF PCM, WE THINK THAT WE'D HAVE TO DO MULTIPLE STEPS IN ORDER TO DO AN INDICATIVE PCM AND I, I WOULDN'T WANT TO MISS THOSE AND JUST LIKE READ, REDO THE EASY REPORT.
I THINK WE ALL UNDERSTAND THAT, ERIC, AND, AND I DON'T HAVE ANY CONCERN WITH THAT BEING EXPRESSED TO THE BOARD AS WELL.
UH, JOHN, I THINK FROM TI C'S PERSPECTIVE, WE'RE HESITANT TO SUPPORTING THAT OPTION ONLY BECAUSE WE DON'T WANT TO ENDORSE PCM.
I MEAN, WE'VE FILED COMMENTS AND, AND SPOKEN PUBLICLY THAT WERE OPPOSED TO PCM AND WHILE THIS IS NOT THE IMPLEMENTATION OF PCM, IT IS ENDORSING IT TO SOME DEGREE.
AND SO THAT'S WHERE OUR HESITANCE HESITANCY IS.
CAN I FOLLOW UP? YEAH, GO AHEAD EMILY.
UM, WOULD T I U C BE OKAY WITH TAX SAYING WE DON'T ENDORSE THIS AS A BRIDGING SOLUTION? I, I THINK IT'S NOT ONLY AS A BRIDGING, OH, I DON'T, I THINK IT'S NOT ONLY A PCM AS A BRIDGING SOLUTION, BUT ENDORSING PCM AS A NO, WE, WE, YEAH, WE UNDERSTAND T I C POSITION
UM, WOULD, WOULD T I C OBJECT TO TAC REPORTING TO THE BOARD THAT WE DO NOT ENDORSE PUBLISHING INDICATIVE PCM VALUES AS A BRIDGING SOLUTION? I NEED TO THINK ON THAT.
SO PROCEDURAL QUESTION, UM, ABOUT HOW THIS IS GONNA BE PRESENTED TO RMC, I GUESS WHAT I WAS THINKING IS THAT THERE'S THE OFFICIAL TAC POSITION.
AND THEN TO THE EXTENT THERE ARE ALTERNATIVES OR VARIATIONS THAT ARE DISCUSSED, THAT IS NOT THE TAC POSITION, THAT IS THE POSITION OF THE COMPANY THAT'S CHAMPIONING THAT AT RMC AND EXPLAINING, UM, CUZ I WOULD NOT WANT TO REPRESENT THE WILL OF TAC WHEN IT THERE IS AN AGREEMENT, RIGHT? SO TO THE EXTENT THAT, THAT WE ARE ENTERTAINING THE IDEA OF CLIFF MAYBE PRESENTING THE OFFICIAL TAC POSITION IN OTHER, UH, YOU KNOW, FOLKS THAT RAISE THEIR HAND, LIKE I WOULD TALK ABOUT THE INDICATIVE PCM IF THAT WERE TO BE, UH, EVENTUALLY IMPLEMENTED AS THE LONG-TERM RESOURCE ADEQUACY SOLUTION, THERE IS VALUE IN PUBLISHING THE DATA BEHIND THE, THE HIGH, THE TIGHTEST HOURS.
AND WE COULD LOOK AT DIFFERENT WAYS TO DO THAT AND THE NUMBER OF PCS THAT ARE CALCULATED DURING THOSE TIGHTEST HOURS WITHOUT A DEMAND CURVE, WITHOUT ANYTHING ELSE THAT'S VALUE IN UNDERSTANDING HOW THAT LOOKS.
AND ALSO OBVIOUSLY THE CONTRACTS FOR CAPACITY, WE HAVE THOUGHTS ON THAT, BUT I WOULD BE REP, I WOULD BE PRESENTING THAT VIEW FROM RELIANCE PERSPECTIVE, NOT ON BEHALF OFT THAT WOULD BE CORRECT.
SO THERE'S ONLY GONNA BE ONE TACK POSITION THAT'S GONNA BE STATED IN THAT REGARD.
SO I, I DON'T WANT TO TERM THIS TO LOOK, WELL, I GOTTA BE CAREFUL ABOUT THIS.
I DON'T WANT THIS TO LOOK LIKE WE HAVE SOME SORT OF APPEAL WITHOUT AN ACTUAL APPEAL IN THAT REGARD.
AND I DON'T THINK THAT'S THE DIRECTION YOU'RE HEADED.
SO, UM, SO THAT BEING SAID, I MEAN TO THE EXTENT THAT WE HAVE ENTITY OR ENTITIES THAT WANT TO SPEAK IN FRONT OF THE R AND M, AS I UNDERSTAND AND CANON CAN CORRECT ME, THESE ARE LARGELY ALL AL ALTERNATIVE IDEAS OR ALTERNATIVE INFORMATION THAT WE WANT TO PROVIDE THE BOARD, BUT I DON'T BELIEVE IT NECESSARILY HAS TO BE FROM A TECH PERSPECTIVE.
I MEAN IF THERE'S, UH, IF IF SOMEBODY FEELS EXTREMELY STRONGLY THAT THERE IS A PROPOSAL THAT STAFF IS OR CUT STAFF IS NOT RECOMMENDING THAT THEY WANT BOTH R AND M AND THE BOARD TO CONSIDER, THAT'S THE VENUE BY WHICH TO DO THAT, WHAT I WOULD WORRY ABOUT IS HAVING ANOTHER TAC MEETING POP
[02:05:01]
UP AT R AND M.SO YOU REALLY WANT TO JUDICIOUSLY MANAGE THE NUMBER OF ALTERNATIVE VIEWS, RIGHT? UH, BUT I, I CANNOT MANAGE THAT FOR YOU.
THAT HAS TO HAPPEN WITHIN THIS GROUP.
SO LET'S, LET'S PLACE GO AHEAD, BILL.
AND YEAH, IT WAS MY THOUGHT THAT THE DISCUSSION AT THE RMC ISN'T, IS INTENDED TO BE AN EDUCATIONAL OPPORTUNITY FOR STAKEHOLDERS TO SHARE THEIR VIEW AND I JUST FEEL LIKE THEY COULD MISS A LOT OF THIS VALUABLE DISCUSSION IF CLIFF SHOWS UP AND SAYS TACK WANTS TO ENHANCE THE RDC DONE.
THERE ARE A LOT OF GOOD THOUGHTS BEHIND SOME OF THESE OTHER OPTIONS CONCERNS, UM, AND POINTS IN FAVOR THAT I THINK WOULD BE VALUABLE FOR THE RMC TO HEAR.
I AGREE WE DON'T WANT ATTACK MEANING TO BREAK OUT, BUT IF THERE ARE FOLKS THAT FEEL STRONGLY ENOUGH THAT THERE SHOULD BE POINTS HEARD BY THE RMC, THEN THINK THERE SHOULD BE AN OPPORTUNITY TO DO SO THAT WOULD, THAT DOES NOT NECESSARILY REFLECT THE WILL OF ATTACK.
QUESTION TO FULFILL THAT AND NOT PUT IT INTO A, UH, AN ALTERNATIVE SUGGESTION, AND I'M JUST THINKING OUT LOUD HERE.
WHICH SOMETIMES GETS REALLY FREAKING DANGEROUS, UH, IS WHEN WE MAKE THE, YOU MAKE THE PRESENTATION TO THE BOARD THAT WE COULD EXPRESS TO THE BOARD THAT THERE ARE ATTACK MEMBERS AVAILABLE AND IN THE R AND M MEETING, THAT IF THE R AND M HAS ANY SPECIFIC QUESTIONS ON ALTERNATIVE RECOMMENDATIONS OR NOT ON ALTERNATIVE RECOMMENDATIONS, ANY OTHER QUESTIONS ON ANY OF THE OTHER OPTIONS THAT THOSE INDIVIDUALS FROM TECH, LIKE BILL WAS TALKING ON THOSE PARTICULAR ONES.
IF SOMEBODY ASKED SOMETHING ABOUT, WELL WHY DIDN'T YOU LOOK AT, YOU KNOW, CONTRACTS OR CAPACITY, WHAT WAS THE PROBLEM? BILL WOULD BE A PERSON THAT COULD DO THAT.
SO I MEAN, THAT'S A ONE WAY OF GETTING THE INTERPLAY THERE IF NEEDED, BUT IF NOT NEEDED IT WOULDN'T BE YEAH, UNDERSTAND.
I THINK WE SHOULD HAVE A DECK, A PRESENTATION THAT HAS BULLETS ON THIS AND REFLECTS WHERE WE'RE COMING FROM AS OPPOSED TO A VERY, UM, SIMPLIFIED, YOU KNOW, TACK, CLIFF SAYS TACK LIKE TO ALREADY SEE CHANGES.
AND SO I THINK WE CAN GET SOME OF THAT CONTEXT.
UH, AND, AND PROVIDE THAT COLOR WITHOUT, YOU KNOW, HAVING 18 DIFFERENT PEOPLE STAND UP AND TALK TO THE BOARD.
I DON'T THINK THAT'S WHAT THEY WANT.
I THINK THAT'S WHAT KON TO EXPRESS CONCERN ABOUT.
SO, YEAH, AND I, I, I THINK I'M SEEING SOME SOLIDIFICATION AROUND SOME OPTIONS AND IF WE DO, IF WE'RE FAIRLY SOLID IN WHAT OUR RECOMMENDATION IS, I THINK THAT'S GONNA MAKE IT A LOT EASIER FOR US TO CARRY IT FROM A LEADERSHIP PERSPECTIVE TO R AND M WITHOUT NECESSARILY HAVING TO HAVE SOMEBODY ELSE, UM, BUTTRESS, YOU KNOW, OUR POSITION OR WHATEVER.
SO NOT, NOT, NOT TO, UH, NOT TO DAMN THE IDEA ABOUT HAVING SOMEONE COME IN SECONDARILY TO PROVIDE ADDITIONAL OPINION, BUT IT MAY, IT MAY NOT BE NECESSARY LOOKING AT THE PATH THAT WE'RE ON AT THIS POINT.
SO, BUT WE'RE NOT CLOSING THE DOOR ON THAT.
SO LET'S, SO I THINK WE'RE DOWN TO, IN ESSENCE TWO OPTIONS.
SO WE'VE GOT ENHANCEMENTS TO RDC PROCUREMENT OF ADDITIONAL ANCILLARY SERVICES, WHICH MAY OR MAY NOT REMAIN PART OF OUR RECOMMENDATION DEPENDING UPON HOW WE WANT TO INTERPRET THAT.
AND I WOULD ALMOST SUBDIVIDE THE ENHANCEMENTS TO RDC INTO EITHER THE BROADER TOPIC THAT WAS PRESENTED IN THE WORKSHOPS OR THE ERCOT POSITION THAT WAS LAID OUT TODAY.
AND THERE MAY BE ALTERNATE POSITIONS THAT WE WANT TO TALK ABOUT WITH O R D C, BUT LET'S MAYBE FOCUS ON THAT FOR JUST A SECOND.
SO I THINK WE'RE GETTING SOME COALESCENCE THERE.
HOW DO WE WANT TO PROCEED? DO WE WANT, DO WE WANT TO PRO UH, EN ENHANCE, UH, I'M SORRY, DO WE WANNA ENDORSE ERCOT VERSION OF THAT.
DO WE WANT TO LOOK AT SOMETHING ALTERNATE? UM, BILL HAD MENTIONED AN ADJUSTMENT TO VA UH, YOU KNOW, WE, WE, WE MAY WANT TO LOOK AT THAT AS BEING OUR RECOMMENDATION.
I, I THINK I'M ALMOST, I HATE TO SAY IT, WE MAY HAVE A WIDE OPEN DOOR HERE AND I MAY HAVE JUST OPENED IT TOO WIDE, SO, BUT BOB, GO AHEAD AND WANT TO HEAR WHAT YOUR POSITION IS.
WELL, WHAT ABOUT THIS? WELL, THE ALL THING, JUST TO SAY, I'M NOT SURE.
[02:10:01]
WAS SAYING, WE COULD DO THAT RELATIVELY QUICKLY CAUSE THE STUDIES WOULD'VE TO BE DONE ON BALL.JUST SOME THOUGHTS, BUT WHAT ABOUT THE, FROM A PROCESS STANDPOINT, WHAT IF WE VOTE ON THE BASIC, ENHANCE THE O RDC, LET'S VOTE NUMBER ONE, AND THEN WE CAN HAVE A VOTE UNDERNEATH THAT ON VARIOUS PIECES AND SEE WHERE WE STAND.
UH, I WAS GOING TO SUGGEST SOMETHING SIMILAR TO SAY, LIKE, THERE IS, WE CAN VOTE ON O RDC ENHANCEMENTS BEING THE PREFERRED SOLUTION, AND THEN HAVE MAYBE MORE DISCUSSION OR, UH, OPTIONS UNDER THIS.
WHICH WE COULD VOTE MAYBE ON 10TH.
I GOT A COUPLE MORE COMMENTS BEFORE WE GO TO STRAW POLL.
SO, ERIC GOFF, FOLLOWED BY JOHN ROSS.
YEAH, I THINK WE JUST NEED TO DIVIDE RDC INTO THE, I THINK THREE, TWO OR THREE DIFFERENT IDEAS BECAUSE I'M RELUCTANT FOR THE A VOTE ON GENERALLY WE'RE, WE'RE OKAY WITH OUR ABOUT RDC APPEAR AS THOUGH WE'RE OKAY WITH OUR PROPOSAL.
UM, THE, AS AS NAVA KIND OF DESCRIBED EARLIER, UH, A $10 ADD IS JUST, LOOKS LIKE A TAX TO US.
SO IT'S NOT SOMETHING THAT PEOPLE CAN RESPOND TO ECONOMICALLY.
UH, AND, AND SO WE WOULDN'T WANT TO VOTE FOR SOMETHING THAT, UM, COULD LEAVE US DOWN THAT PATH.
YEAH, I JUST WANNA THROW OUT THERE THAT YOU GOTTA REMEMBER WHEN YOU'RE EVALUATING THESE, WHAT IS THE PURPOSE, THE STATED PURPOSE OF THE BRIDGE? WE MAY NOT UNDERSTAND THAT.
WE MAY NOT AGREE WITH WHAT THE PURPOSE OF THE BRIDGE IS, BUT WE'RE EVALUATING THESE FOR FULFILLING THE PURPOSE OF THE BRIDGE.
DOES THAT MAKE ANY SENSE? FOR INSTANCE, I'M, I'M KIND OF, ERIC, KIND OF WHAT I'M SAYING IS I UNDERSTAND WHAT YOU'RE CO WHAT YOU'RE CONCERNED ABOUT.
I UNDERSTAND YOU THINK THIS IS JUST A CHECK, BUT IF YOU THINK ABOUT WHAT'S BEING SAID, THAT MAY BE EXACTLY WHAT THEY'RE ASKING FOR.
AND I THINK THAT THERE ARE OTHER VERSIONS OF THE RDC, EVEN SOME THAT WERE TALKING ABOUT IN THE WORKSHOP THAT WOULDN'T JUST BE A CHECK.
BUT, UM, COULD STILL, COULD STILL ACCOMPLISH THE GOAL OF THE BRIDGE.
WE'RE NOT A, WE UNDERSTAND THE CONTEXT.
THIS IS GONNA MOVE SOME MONEY AROUND IT.
I, I THINK CLARIFICATION ON WHAT ENHANCING THE RDC MEANS, BECAUSE I THINK THERE WAS A NUMBER OF THINGS DISCUSSED IN THE WORKSHOPS, UM, WHICH IN WHICH, YOU KNOW, VARIED GREATLY.
AND SO, UM, I THINK UNDERSTANDING THAT PRIOR TO VOTING IS IMPORTANT.
SO, AND, AND I THINK THAT'S A GOOD, GOOD POINT.
AND IN TERMS OF ENHANCEMENTS TO RDC, I THINK WE PROBABLY ALL AGREE, AND MAYBE I'M, MAYBE I'M WRONG.
AND THIS IS REALLY TO BOB'S POINT, THAT ANY MODIFICATION TO THE O RDC IS REALLY INTENDED AND STRUCTURED TO GENERATE ADDITIONAL REVENUES THAT ARE GONNA GO INTO THE, YOU KNOW, INTO GENERATE.
I THINK THE OVERALL, I THINK THE OVERALL PLAN OR EXPECTATION IS THAT WITH AN ENHANCEMENT TO THE R RDC, THAT MONIES ARE GONNA BE GENERATED, THAT ARE GONNA BE USED AND, AND, AND LARGELY TO TRY TO PUSH THOSE MONIES TOWARDS DISPATCHABLE GENERATION.
AGAIN, KEEPING IN MIND THE INTENT OF SENATE BILL THREE IN THAT REGARD.
SO, SO I THINK THERE'S PROBABLY GENERAL CONSENSUS IN, IN THIS ROOM ON THAT.
AND, AND IF ANYBODY SEES IT OTHERWISE, PLEASE LET US KNOW.
BUT I, I THINK WE DO HAVE CONSENSUS IN THAT REGARD.
SO DOES THAT ANSWER YOUR CONCERN, JOHN, OR YOU'RE LOOKING FOR SOMETHING A LITTLE MORE NUANCED? Y YES AND NO.
I MEAN, I, I THINK WE DO UNDERSTAND THAT IT'S MOVING MONEY.
I THINK WHAT'S CHALLENGING IS AT WHAT, YOU KNOW, AT WHAT POINT IS IT GONNA START MOVING MONEY? IS IT SOMETHING THAT'S ABLE TO BE HEDGED? BECAUSE ERCOT PROPOSAL ISN'T, BUT OTHER POTENTIALS COULD.
HOW CAN R T S P P NOT BE HEDGED WITH THE, WITH ERCOT PROPOSAL? WHEN, WHEN YOU'RE SHIFTING THE CURVE OUT SO FAR, WHEN YOU'RE SHIFTING THE PAYMENTS OUT SO FAR WITH THE FLOOR, IT'S NEXT TO IMPOSSIBLE TO HEDGE BECAUSE IT, I'M SORRY, BUT THAT'S INCORRECT.
IT'S A PART OF R TS P P AND THEREFORE IT FLOWS INTO IT AUTOMATICALLY.
IF ANY CONTRACT THAT'S WRITTEN FOR R T SBP WILL AUTOMATICALLY FLOW INTO IT.
IAN, CAN YOU PULL IT UP CLOSER? PULL IT CLOSER.
[02:15:01]
I CAN OFFER SOME HELP HERE.YEAH, I THINK WHEN HE'S SAYING HEDGED, HE'S MEANING HEDGED BY CONTROLLING DEMAND RESPONSE.
AND YOU'RE SAYING I CAN CONTRACTUALLY HEDGE TO THAT PRICE AND GET PRICE CERTAINTY.
JUST D DIFFERENT MEANING DIFFERENT MEANINGS FOR HEDGED, I THINK IS, IS GOING BACK AND FORTH.
SO, ALL RIGHT, SO THAT, THAT BEING SAID, WE'VE GOT GENERAL CONSENSUS IN TERMS OF MOVING IN THE DIRECTION OF ENHANCING THE RDC.
SO THE NEXT QUESTION IS, IS WHAT FORM OF THE RDC DO WE WANNA LOOK AT? AND, AND I THINK THIS IS WHERE WE GET A LITTLE BIT MORE NUANCED.
WE'VE GOT ERCOT RECOMMENDATION IN TERMS OF THE FLOORED STEP CHANGES TO THE O R D C.
DO WE WANT TO ENDORSE THAT DIRECTLY OR DO WE WANNA LOOK AT OTHER OPTIONS THAT FOLKS ARE WILLING TO LAY OUT TODAY? OKAY, GO AHEAD KEVIN.
YEAH, I GUESS I LIKE TO BE GIVEN A CHANCE TO LAY OUT OUR PROPOSAL JUST FOR INFORMATION FOR THE, FOR THE GROUP.
UM, CAN YOU PULL UP OUR COMMENTS THAT WE FILED, PLEASE? IT'S THE NATIONAL GRID, UH, COMMENTS, SIR.
UH, I HAVE TO GO DOWN TO PAGE THREE PLEASE.
DOWN A LITTLE BIT MORE PLEASE.
OH, GO BACK UP A LITTLE BIT MORE.
SO, UM, I WOULD CALL THIS A, A, UM, ANNUAL CONE TRUEUP PROPOSAL WITH THE, THE, THE CONCEPTS BEING THAT THE, UH, CONE VALUE IS DETERMINED PRIOR TO THE START OF THE YEAR FOR THIS YEAR.
WE COULD USE THE PRIOR IDENTIFIED CONE VALUE OF 93,500, WHICH WAS PRESENTED IN THE LAST, UM, RELIABILITY STUDY THAT WAS PUT TOGETHER.
UM, AFTER EACH YEAR, THE PEAK MARGIN WE CALCULATE USING THE IRON MYTHOLOGY WE'VE BEEN USING TO, UH, AND GET SOLVED VERSUS THE CONE.
UM, SIMILAR TO THE PCM, THE TOP 30 HOURS OR 360 SKID INTERVALS, WE GET RESETTLED UP OR DOWN BASED ON, UM, WHAT THE VALUE OF THE, OF THE PEAK MARGIN IS VERSUS CONE.
AND THEN, SO WHAT WE'LL SEE IN URI TYPE OF YEARS, MONEY TO GET CLOGGED BACK AND RETURN TO LOADS BY LOW
AND DURING NON-EVENT YEARS, SIMILAR TO WHAT SAW 2013 THROUGH 2018, THERE'D BE PAYOUTS BY LOAD
SO KEVIN, IS THAT OFFERED UP AS A BRIDGE SOLUTION? THAT'S BRIDGE SOLUTION? YES, BECAUSE AGAIN, WE CAN USE THE PREEXISTING, WHAT WE HAVE IDENTIFIED AS CONE FOR THIS YEAR.
BOB, I HAVE A QUESTION PROBABLY FOR CANON OR SOMEONE FROM ERCOT, BASED ON SOME SETTLEMENT CHANGES HERE, CAN THAT BE DONE AS A, AS A, UH, BRIDGE SOLUTION? I GUESS AS, THIS IS DAVE, I GUESS AS I TAKE IT, THIS WOULD BE EFFECTIVELY A MANUAL RESETTLEMENT.
IS IS THAT THE CONCEPT? UM, PROBABLY SO INITIALLY FOR FOR INITIAL YEAR, YES.
COULD IT BE AUTOMATED AFTER THAT? POSSIBLY, BECAUSE TO THE DEGREE, I'M UNDERSTANDING IT TO BE SORT OF AN, AN AFTER THE FACT RESETTLEMENT, THERE'D BE AS ALL RESETTLEMENT TO FAIR AMOUNT OF MANUAL WORK TO DO THAT.
BUT, UH, NOT NECESSARILY A, A CHANGE FROM THAT POINT OF VIEW.
SO I THINK, BOB, IF YOUR QUESTION IS, IS IT AN IMPLEMENTATION CONCERN FROM THE EIGHT TO 12 MONTHS I THAT WE'VE SORT OF TARGETED
[02:20:01]
AROUND A BRIDGE SOLUTION, I WOULDN'T SAY THAT THAT WOULD, THAT PARTICULAR PART WOULD BE A CONCERN.AND IN SOME WAYS IT'S SIMILAR TO THE PCM PROCESS THAT AFTER THE FACT TRUEUP IS WHAT WE'RE DOING WITH PCM TWO, SO RIGHT.
I UNDERSTAND THERE'S A, UH, AN AFTER THE FACT TRUEUP WITH THE PCM.
UH, ANOTHER QUESTION, SINCE THIS IS IN THE, KEVIN, YOU HELPED ME WITH THIS CAUSE I'M JUST FEELING IT OUT.
I'M NOT SAYING I'M AGAINST OR OPPOSED OR WITH, OR WHAT.
UM, COULD THERE BE A A BASICALLY SUPPLIER'S REMORSE, SINCE WE'RE TRYING TO SOLVE A RUCK ISSUE HERE TO WHERE, UH, UNITS LOOK OUT AND THEY SAY, OKAY, IT LOOKS LIKE I'M GONNA COMMIT BASED ON WHAT I SEE FOR THE RUCK.
THEY DO THAT AND IT WORKS FOR THEM, AND THEN LATER ON THEY GET THAT CLAWED BACK FROM THEM AND THEY WISH THEY WOULDN'T HAVE BEEN ONLINE AND SHOULD HAVE BEEN OFFLINE.
AND I'M JUST, I'M JUST TRYING TO FEEL OUT FOR EVERYBODY'S IDEA.
I MEAN, UM, YOU KNOW, WE COULD DISCUSS REVISIONS TO IT, BUT THIS IS LIKE THE BASIC FRAMEWORK BEING LAID OUT AS SUCH.
UH, SO THIS IS SIMILAR TO THE PROPOSAL THAT SHAMS HAD AND I HAD, UH, AND WE HAD DISCUSSED IT AT THE WORKSHOP.
AND THE, UH, AS BOB SAID, UH, THAT IS ONE OF THE PROBLEMS IN ANOTHER IS THERE IS A LOT OF CONTRACTS AND BILATERAL TRADES THAT HAPPEN WHICH SETTLE IN REAL TIME.
ALL OF THOSE, UH, WILL HAVE PROBLEMS WITH AFTER THE FACT SETTLEMENTS.
AND THAT'S WHY, UH, WE HAD DISCUSSIONS DURING THE WORKSHOP TO SAY IF WE WANT TO, UM, SIMULATE PCM THROUGH O RDC, THEN A BETTER METHOD WOULD BE TO DO IT AT THE BEGINNING OF THE YEAR TO CHANGE O RDC CURVE.
SO THAT IS AGAIN, AN ENHANCEMENT TO THE O RDC AND WHAT LEVEL OF O RDC CHANGE CAN BE DECIDED.
AND TO SIMULATE PCM, YOU WOULD, UH, CHANGE THE ODC ONLY AT THE TI TEST TOWER, SO 4,000 OR 5,000.
AND THAT WOULD ADDRESS SOME OF THE CONCERNS THAT T I E C WAS SAYING.
UM, SO IF THIS IS THE DIRECTION TO GO TO GET SOME COST LEVEL FROM THE O RDC, THEN THAT ALSO ADDRESSES THE CONCERN THAT ERIC WAS SAYING.
SO THAT'S WHY I WAS SAYING WE COULD HAVE AN O RDC WHAT THE ORDC CHANGE THAT DISCUSSION LATER, BUT HAVE O RDC ENHANCEMENTS AS THE PREFERRED SOLUTION FROM TECH.
WE'VE GOT ERIC FROM THE PHONE.
UH, KEVIN, I APPRECIATE YOU COMING UP WITH NOVEL IDEAS HERE.
UM, BUT ONE CONCERN I HAVE FROM A RESIDENT PERSPECTIVE IS HOW THE, AFTER THE FACT SETTLEMENT WOULD IMPACT FIXED PRICE CONTRACTS.
UH, THAT'S AN ISSUE FOR THE PCM TOO.
UM, BUT I, I'M WORRIED THAT RETAILERS WOULD, OR, UM, YOU KNOW, LSCS WOULD TRY TO PASS THOSE COSTS THROUGH ON A LATER BASIS.
UM, MAYBE THE CUSTOMERS THAT DIDN'T HAVE EARLIER IN THE YEAR.
UM, AND UM, AND, AND SO I THINK THEY NEED SOME MORE THOUGHT AND, AND A REVIEW THIS AND THE PCM WOULD, WOULD NEED A REVIEW OF THE, THE RETAIL CAPITAL PROTECT RULE.
UM, LOOKS LIKE YOU, YOU WANNA REPLY SPECIFICALLY TO THAT BOB, OR NO? NO, NO.
WE GOT, IT'S ALL THE, THE SAME ISSUE.
WE'VE GOT YOU IN THE QUEUE THEN.
UH, SETH, YEAH, I WAS THINKING ABOUT THIS IN THIS RESETTLEMENT CONCEPT.
SO BASICALLY PEOPLE COULD HAVE A URI TYPE YEAR COLLECT A BUNCH OF RENTS, AND THEN THE END OF THE YEAR YOU GO TO SEEK THE CLOT BACK.
THAT GIVES ME A LITTLE BIT OF PAUSE, JUST THINKING OUT LOUD, IS, IS THERE COLLATERAL HELD, UH, FOR THE POTENTIAL CLOT BACK THAT COULD HAPPEN? UM, AND IT SEEMS LIKE YOU WOULD MAYBE PERFORMED A CALLBACK RIGHT AWAY INSTEAD OF WAITING, SAY NINE MONTHS.
I, I DON'T KNOW WHEN YOU ENVISION THAT HAPPENING, BUT, AND THEN THE OTHER THING IS, WHAT IF SOMEONE PACKS UP AND LEAVES AND THEY'RE NO LONGER THERE TO GET THE CLAW BACK FROM JUST THINGS TO THINK ABOUT.
I DON'T THINK THOSE ARE DEAL KILLERS WITHIN THE PROPOSAL, BUT THINGS TO THINK ABOUT IN TERMS OF, UM, HOW YOU GET THAT MONEY BACK.
YEAH, I, I GUESS WITH THOUGHT, THOUGHT PROCESS, THERE WAS, UM, I GUESS HE DIDN'T THINK ABOUT THE MECHANISM YOU'RE TALKING ABOUT THERE IN TERMS OF IMPLEMENTATION THERE SPECIFICALLY, BUT ALSO, YOU KNOW, IF THEY EVENTUALLY DECIDE TO IMPLEMENT THE PCM, THERE'S GONNA BE ALSO CREDIT REQUIREMENTS ON PARTIES AS WELL LEADING INTO IT AS WELL.
[02:25:01]
NOTE THE ONLY REASON I'M, THIS WAS ON MY MIND CUZ IN PGM THEY RECENTLY HAD A RECE RECESSION OF, UH, CAPACITY MARKET PAYMENTS ON THE ORDER OF LIKE 2 BILLION FOR NON-PERFORMANCE.AND THAT'S CREATING QUITE A STERN PJM AND IT'S NOT QUITE CLEAR IF EVERYONE'S GONNA BE ABLE TO MAKE GOOD ON THAT.
IF YOU DON'T MIND, THIS IS, I THINK DIRECTLY RELATED TO THAT, JUST GOING BACK AND THINKING ABOUT THAT QUESTION OF IMPLEMENTATION, YOU KNOW, THAT'S SOMETHING WE HAD THOUGHT ABOUT TO THE DEGREE WE THOUGHT ABOUT HOW WE WOULD DO PCM IS THE IDEA OF SORT OF MANAGING THAT, THAT THAT POTENTIAL CREDIT EXPOSURE, SOMEONE WAS WAITING FOR A CLAW BACK OR, OR IN FACT IF WE HAD MORE MONEY DUE FROM LOAD AFTER THE FACT, HOW WE SORT OF DEAL WITH MARKET EXIT.
UM, AND JUST HOW WE, ANYWAYS, THOSE ARE SOME THINGS TOO THAT, THAT ADDED THE COMPLEXITY.
SO IF YOU WANTED TO TRY AND CAPTURE ALL THAT, GIVEN THE FACT THAT THIS IS SOMETHING THAT HAPPENS AFTER THE FACT, UM, THAT WOULD HAVE TO FEED INTO IMPLEMENTATION AND, AND JUST SORT OF EXPANDS UPON.
I THINK MY, MY ANSWER BEFORE, THINKING SPECIFICALLY AROUND THE SETTLEMENT MECHANISM, YOU NEED TO ALSO THINK ABOUT THE RISK POOL.
WHO'S THE ULTIMATE BACKER OF THAT MONEY? SO IN PJM WHEN SOMEONE DEFAULTS ON THAT, IT'S THE OTHER PARTICIPANTS IN THE CAPACITY MARKET.
SO YOU HAVE TO THINK ABOUT YOUR DEFAULT RISK POOL AS WELL.
UM, I GUESS A COMMENT AND A QUESTION.
SO APPRECIATE THE NOVEL APPROACH AND I THINK THAT THERE'S SOME INTERESTING CONCEPTS HERE.
WE SHARE SOME OF THE CURRENT CONCERNS THAT HAVE BEEN EXPRESSED.
UM, AND, AND SPECIFICALLY SOME OF THE ISSUES THAT WE THINK ARE IMPORTANT TO WORK OUT IN, IN THE PCM THIS SHARES SOME OF THOSE, UM, CHALLENGES.
UM, SPECIFICALLY THE TOP 30 HOURS, UM, AND HOW THOSE ARE DEFINED.
SO I, I REALLY, I GUESS I DON'T SEE THIS PERHAPS AS A BRIDGING SOLUTION CUZ I THINK THAT IT, IT INVOLVES A LOT OF THE SAME IMPLEMENTATION CHALLENGES AS THE PCM ITSELF IN TERMS OF WORKING OUT THOSE PARAMETERS.
BUT, UM, I WANNA GO BACK TO RASHMI'S COMMENT, UM, THAT WHEN WE'RE TALKING ABOUT, UM, TAX SUPPORTING O RDC ENHANCEMENTS THAT, YOU KNOW, THE UNIVERSE OF POTENTIAL CHANGES INCLUDING THIS ONE WOULD BE SUBSUMED WITHIN THAT RECOMMENDATION.
AND I'M NOT SURE I'M COMFORTABLE WITH THAT, ESPECIALLY GIVEN THE COMMENTS FROM ERCOT TODAY ABOUT IMPLEMENTATION.
SO CAN WE GET SOME CLARIFICATION ON THAT IN TERM IN TERMS OF ERCOT OR IN TERMS OF THE RECOMMENDATION? WOULD ERCOT HAVE A RESPONSE SAY IF WE WERE TO AND, AND DAVE'S WAVING HIS CARD BEHIND ME, I'LL LET HIM RESPOND.
I GUESS THE, GOING BACK TO MY RESPONSE ABOUT THE, SOME OF THE ADDITIONAL COMPLEXITIES, ALL OF THE THINGS THAT WE HAD TALKED ABOUT IN TERMS OF RDC ENHANCEMENTS WERE SORT OF CHANGES TO THE SHAPES OF THE CURVE.
THAT BEING DISTINCT FROM UM, SORT OF OTHER PROCESSES THAT, YOU KNOW, TALKING ABOUT DYNAMIC CURVES OR SORT OF AFTER THE FACT SETTLEMENT.
MAYBE THAT'S A BIT OF A DISTINCTION THAT WOULD BE HELPFUL FOR TACT TO LAY OUT AS, AS YOU THINK ABOUT WHAT YOU WOULD WANT TO ENDORSE.
IN MY VIEW, THOSE ARE DIFFERENT SETS OF SOLUTIONS AND SO I WANT, I WANT THAT TO BE CLEAR WHEN WE DISCUSS THIS, THAT IF WE'RE ENDORSING ALREADY SEE ENHANCEMENTS, WE'RE NOT TALKING ABOUT THINGS THAT INVOLVE THOSE OTHER COMPONENTS AS DAVE LAID THEM OUT.
VERY WELL, REMI, UH, JUST WANTED TO CLARIFY.
I, I MEANT THAT O R D C CURVED CHANGE, SHAPE CHANGE, NOT, UH, NOT LIKE RE RESETTLEMENT.
YEAH, I THINK THE SETTLEMENT ON THIS IS QUITE, EVEN THOUGH IT'S TRYING TO DO THE SAME THING AS THE PCM, I THINK THERE'S A DIFFERENCE WITH THE PCM.
YEAH, I COULD BUY FORWARD AND IF I DIDN'T, I KNOW I GOT A BILL COMING, UH, OR NOT SO I COULD PLAN FOR THAT IN THIS, THE ENERGY MARKET'S GONNA BE WHAT THE ENERGY MARKET IS AND THAT'S ALL GONNA GET PAID.
AND IF YOU GET TO THAT AND TELL ME IF I'M OFF HERE AND THIS IS AFTER THE END OF THE YEAR, YOU GO BACK AND LOOK AND YOU TAKE THOSE TOP 30 HOURS AND IF IT'S A URI, LIKE YOU GET CLAWBACK AND THEN IF IT'S NOT, THEN THEY'LL, YOU GET TO KEEP THOSE PAYMENTS.
THE QUESTION IS THEN IS LET'S GO ONE LEVEL DOWN.
ARE WE GETTING INTO A CONSUMER PROTECTION ISSUE TO WHERE THE NEXT QUESTION'S GONNA GET ASKED IS IF I'M, UH, AND I'M NOT GONNA PICK, THIS IS NOT A PICKING ON A COMPANY.
LET'S SAY I'M, I'M AN NRG OR A OR A VIRA.
NOW, DO I HAVE TO MAKE SURE THAT I HAVE FILTERED DOWN ALL OF THAT TO EACH INDIVIDUAL CUSTOMER ON THEIR BASIS TO MAKE SURE THAT EVERYTHING IS FUNNELING BACK TO THE CONSUMER? CAUSE I, I CAN SEE THAT QUESTION COMING.
WELL YOU'RE GETTING THIS MONEY BACK, IS THAT A WINDFALL TO THE LSCS OR DOES THAT GET FILTERED ALL THE WAY BACK DOWN
[02:30:01]
AND, YOU KNOW, I COULD SEE THAT QUESTION COMING UP.LOOKS LIKE THE QUEUE IS EMPTY AT THIS POINT.
ANY, ANY CLOSING COMMENTS ON THAT KEVIN? OR, UM, THE, I GUESS THE MAIN CONCEPT THAT WAS DRIVEN BY THE MAIN THOUGHT BEHIND THIS PROCESS IS THAT, YOU KNOW, A LOOKING AT BRIDGE AND SOLUTION B HEARING COMMENTS CONSTANTLY SAYING WE NEED TO HAVE, I WANNA SAY GUARANTEED RETURN TO GENERATION, BUT BASICALLY THAT'S BEING PROPOSED AND DISCUSSED WITH, WITH THE PC AND OTHER THINGS.
RIGHT NOW, THIS WOULD SORT OF ACCOMPLISH BOTH IN MY MIND IN TERMS OF THE, UM, SECURITY, LET'S CALL IT, FOR GENERATION TO GET BUILT CUZ THEY SEE THIS CONSTANT SIGNAL OUT THERE.
PART OF THE ARGUMENTS AND DEBATES GOING ON RIGHT NOW IS THAT WERE OFF.
SO LIKE IF YOU LOOK AT, YOU KNOW, 2013 THROUGH 2018, I DON'T THINK WE BROKE ABOVE, UH, $60,000 A, UH, MAKE MY YEAR THERE.
SO IT'S, YOU KNOW, UM, IT'S A WAY OF MOVING THAT THROTTLE UP WHERE IT'S ALSO STILL A MARKET-BASED APPROACH WHEN IT TURNS THE MARKET WITHOUT INTRODUCING A PERCEIVED CAPACITY MARKET ON TOP OF THAT.
OKAY, SO THAT BEING SAID, I'D PROBABLY LIKE TO TAKE A STRAW HOLE ON THIS ONE IN TERMS OF ADDING THIS AS A POTENTIAL, AS AN OPTION THAT WE WANT TO CONSIDER.
SO, UM, LIKE TO SEE IF THERE'S ANY SORT OF MASS SUPPORT FOR THIS PARTICULAR ITEM IN THAT REGARD.
SO, UM, IF ANYONE FOR THE, UH, IF I'M TRYING TO THINK OF THE EASIEST WAY TO DO THIS, THOSE IN FAVOR OF ADDING THIS SOLUTION TO THE LIST OF THOSE THAT WE CONSIDER AS A T SOLUTION, IF YOU'D RAISE YOUR HAND OR COMMENT IN THE CHAT.
THIS LOOKS LIKE DE MINIMUS IN THAT REGARD, SO, OKAY.
SO WE'LL, WE'LL PULL THAT IN TERMS OF ATTACK RECOMMENDATION AT THIS POINT.
SO WE'LL ROLL BACK TO LOOKING AT THE O R D C.
IT'S A QUICK QUESTION, I GUESS SINCE THIS WAS BROUGHT UP AND, UM, THERE WAS SOME IDEAS HERE, MAYBE IT COULD BE DOCUMENTED SOMEWHERE.
THIS IS SOMETHING WE CONSIDERED EVEN THOUGH WE DIDN'T APPROVE IT.
ALL RIGHT, SO LET'S ROLL BACK TO THE O R D C MODIFICATIONS THERE.
I THINK THERE'S GENERAL CONSENSUS ON OVERALL O RDC MODIFICATIONS THERE.
UM, I GUESS WE NEED TO LOOK AT HOW WE WANT TO SEPARATE AND DISCUSS WHAT SPECIFICALLY THOSE O RDC MODIFICATIONS LOOK LIKE, UM, SO THAT WE CAN TRY TO NARROW THIS DOWN TO, TO THE RECOMMENDATION WE WANT TO PROVIDE.
UM, I SEE WE'VE GOT A QUESTION FROM MARK DREYFUS, SO WE'LL START THERE.
I, I JUST WANNA MAKE SURE, IS THE END VERSUS OPTION STILL ON THE TABLE? CUZ I DID NOT HEAR THAT ELIMINATED AND I JUST WANNA MAKE SURE THAT'S STILL OPEN.
THANKS FOR ANCILLARY SERVICES.
MARK, IS THAT, DID I HEAR YOU RIGHT? YES.
THE ADDITIONAL ANCILLARY SERVICES OPTION THAT'S, YEAH, THAT'S NOT BEEN ELIMINATED.
I THINK, I THINK WE HAVE TWO ON THE TABLE, RIGHT? THE ANCILLARY SERVICES AND THEN THE O R D C AND THEN WE'RE SPLITTING OR D C INTO TWO A AND TWO B ERCOT PROPOSAL AND THEN KIND OF BROADER CONSIDERATIONS.
IS THAT RIGHT CLIFF? YEAH, THAT'S RIGHT.
SO MAYBE WE DO A STRAW POLL LOOKING AT ERCOT MODIFICATIONS FIRST OF ALL, AND, UM, TRY TO GAUGE SUPPORT FOR THAT PARTICULAR ITEM RIGHT NOW.
AND, AND THIS WHOLE PROCESS IS DESIGNED TO TRY TO NARROW THINGS DOWN REAL QUICK.
SO THAT BEING SAID, THOSE THAT SUPPORT THE ERCOT MODIFICATIONS TO THE O R D C, CAN WE HAVE A SHOW OF HANDS IN THAT REGARD? GO AHEAD.
UH, SO ARE, ARE WE NOT SAYING LIKE O RDC ENHANCEMENTS, BUT JUST GOING TO SAY, UH, O ERCOT PROPOSAL PROPOSAL I THAT? YEAH, SO I THINK THE CONCERN IS IF WE JUST SAY ENHANCE O RDC AND WE DON'T HAVE SOMETHING SPECIFIC TO TAKE TO THE BOARD, I DON'T KNOW THAT THAT'S GONNA BE A VERY HELPFUL PROPOSAL IN THAT REGARD.
SO, BUT WE HAVE ANOTHER MEETING ON 10TH, RIGHT? WE DO, YEAH.
BUT WE NEED TO COALESCE IF WE WANT ERCOT, AND I DON'T KNOW IF ERCOT CAN DO THIS, DAVE.
[02:35:01]
I THINK YOU'RE STANDING IN FOR CANON AT THIS POINT, SO, SO I MEAN, IF WE HAD A SEPARATE RECOMMENDATION WE WOULD PROBABLY WANT SOME ANALYSIS TO SUPPORT THAT AS WE MOVED IT TO THE BOARD.AND I DON'T, DO YOU HAVE TIME TO LOOK AT SEPARATE ANALYSIS AT THIS POINT? I MEAN, IT'S CERTAINLY GOING TO BE BE MORE LIMITED.
UH, YOU KNOW, I GUESS WE WOULD BE TALKING ABOUT PRESUMABLY A, A WEEK TO TRY TO GET SOME MATERIAL TOGETHER.
UH, IF WE CAME TO SOME RESOLUTION ON, ON A SCENARIO YOU WOULD LIKE US TO LOOK AT IN TERMS OF, AGAIN, TALKING ABOUT, UM, PARTICULARLY THINKING ABOUT IF IT WAS AROUND O RDC SHAPES AND THINGS LIKE THAT, THAT WERE, WERE FAIRLY WELL UNDERSTOOD, WE, WE WOULD DO OUR BEST TO PROVIDE SOME ADDITIONAL ANALYSIS FOR THE APRIL 10TH MEETING.
UH, HOW MANY DIFFERENT SCENARIOS DO YOU THINK YOU MIGHT BE ABLE TO ACCOMPLISH? NOT TO PUT YOU ON THE SPOT THERE.
I, I, LET'S, UM, AGAIN, I THINK IT HAS TO DO WITH THE, THE LEVEL OF SIMPLICITY.
I MEAN, IF THEY WERE SORT OF SIMILAR INSTEAD OF THIS FLOOR, WE WANT TO TRY THAT FLOOR PROBABLY A COUPLE, BUT, OR, YOU KNOW, BUT IF WE, IF IF YOU WANT TO GET MORE COMPLEX AND TRY TO GET INTO SOME SORT OF EXAMPLES, SOME DYNAMIC NATURE OF IT THAT IT'S GONNA BE MUCH MORE LIMITED.
VERY WELL, IN TERMS OF MODIFYING JUST SIMPLE MO MODIFICATIONS TO THE LEVERS THAT YOU HAVE IN TERMS OF VOL AND SO FORTH, ARE THOSE, IS THAT ANALYSIS THAT CAN BE DONE FAIRLY QUICKLY AND EASILY IN TERMS OF KIND OF THE, JUST DOING SOME ANALYSIS IF WE HAD THE, THE DECOUPLED VOL? YEP.
I I THINK WE COULD DO, WE COULD, I THINK WE WOULD HAVE A GOOD SHOT OF GETTING SOME ANALYSIS TOGETHER FOR THE APRIL 10TH MEETING LOOKING AT A DECOUPLED VOL SCENARIO.
IT, I, I GUESS WE'D LIKE TO OBVIOUSLY SHARE, SHARE THE, THE SPECIFIC VOLUME YOU'D LIKE US TO GIVE A SHOT TOO.
SO I SEE GENERAL SUPPORT FOR ERCOT PROPOSED O RDC METHODOLOGY.
I THINK IT MIGHT BE HELPFUL IF WE CAN TAKE A SHOT AT SOME ADDITIONAL INFORMATION, MAYBE ON AN ALTERNATE, JUST SO TACK CAN MAKE A, DO YOU WANNA ASK FOR NO VOTES? I'M SORRY, I DIDN'T MEAN TO INTERRUPT YOU.
SO HOLD ON JUST A SECOND, ERIC.
SO IF WE COULD LOOK AT, I GUESS EVERYBODY, IF YOU DON'T MIND THINKING FOR JUST A MINUTE OR TWO IN TERMS OF WHAT YOU MIGHT, WHAT WE MIGHT WANT TO ASK DAVE TO LOOK AT IN TERMS OF ALTERNATES AND THEN WE CAN CIRCLE BACK HERE IN JUST A SECOND.
BUT ERIC, IF YOU DON'T MIND, UH, YEAH, I, I'M SORRY TO INTERRUPT YOU.
UM, I, I THOUGHT THE CONVERSATION WAS MOVING MORE QUICKLY AND WHEN YOU SAID THAT YOU SAW GENERAL SUPPORT FOR ER'S COMMENTS, I DIDN'T HEAR AN OPPORTUNITY TO SAY A LACK OF SUPPORT.
SO, UM, LACK OF SUPPORT FOR THE ERCOT VERSION.
WELL, I THINK IT'S OPPOSITION, RIGHT? OR OPPOSITION TO THE ERCOT VERSION.
NOT SEEING ANY IN THE ROOM AT THIS POINT IN TIME.
ERIC AND NO COMMENTS ON THE CHAT.
I'M SORRY? UM, BILL SMITH WITH ERIC LAED.
AND I, I EXPECT, UH, THE CONSUMER HANDS THAT, UH, YEAH, WE SEE GARRETT NOW OPPOSED AS WELL.
SO WE'VE GOT CONS, CONSUMER, CONSUMER MEMBERS THAT ARE, THAT ARE OPPOSING THE ERCOT VERSION IN LOOKING AT THE CHAT, SO, OKAY.
OKAY, THAT BEING SAID, LET'S GO BACK TO THE CARDS REAL QUICK, KEVIN.
YEAH, I GUESS THINK ONE ADDITIONAL THING TO LOOK AT, MAYBE LOOKING AT 2019 IN ADDITION TO, WE LOOKED AT 2022 AND 2020 WITH REGARDS TO THE PROPOSAL.
CAUSE THAT'S WHERE WE SAW, UM, I THINK WE WERE DEFINITELY, UH, I'M TRYING TO REMEMBER IF 2019 WAS ZERO, WE WENT BEYOND A THREE TIMES CONE AND SOME DISCUSSION AROUND THE HCAP L CAP.
DID WE GO WITH THAT? UH, I GUESS WE DID NOT GO, DID NOT.
WE DID NOT GO BEYOND THE 20, 20 TIMES 20 OF THE YEAR.
UM, I MEAN, I GUESS, UH, IT FEELS LIKE BY SORT OF 20, SO TO YOUR POINT, AROUND 2019, THAT WAS THE YEAR IN AUGUST WE DID HAVE THE TWO DAYS IN WHICH PRICES WENT TO THE CAP.
I THINK WE WERE IN A, THE EARLIER LEVELS OF EEA ON, WHAT WAS IT, UH, AUGUST, UH, 13TH AND 15TH MM-HMM.
UM, MY, MY GUT IS, WELL, I WOULD PERHAPS SUGGEST IF, IF, IF THE GROUP WOULD LIKE TO LOOK AT ADDITIONAL SCENARIOS THAT WE FOCUS ON SOME ADDITIONAL SCENARIOS, NOT NECESSARILY WORRY ABOUT ADDITIONAL USE, I THINK THAT WOULD DISTRACT THE TEAM FROM TRYING TO GET YOU ALL SOME NEW SCENARIOS.
I THINK YOU'RE PROBABLY RIGHT.
WE'VE GOT A DATA SET AND A LIMITED AMOUNT OF TIME THAT NEED, WE NEED TO BE WORKING WITH.
SO I THINK THAT'S, THAT'S FAIR
[02:40:01]
THERE.COULD YOU GO BACK TO THE, THE CURVES? YEAH.
NOW WHERE ARE THE FLOORS IN THIS, IN THIS GRAPHIC? THE FLOORS ARE REPRESENTED BY THE DARK TURQUOISE LINE.
UH, I JUST WANNA TO HEAR YOU SAM.
SO, SO THE, THE PREFERRED SCENARIO IS THE MIDDLE ONE, RIGHT BETWEEN 6,007, OR I'M SORRY, BECAUSE 60 FOLD, ANYTHING BELOW 6,500 WE'RE APPLYING A FLOOR OF $20 PER MEGAWATT HOUR, RIGHT? AND THEN BETWEEN 60 507,000 MEGAWATTS OF ONLINE RDC RESERVES, THERE'S AN ERROR OF $10 PER MEGAWATT, RIGHT? THE, THE, YEAH, THE, THE POINT I WAS TRYING TO MAKE IS, IS THERE'S NOT GONNA BE ANY DEMAND RESPONSE THERE.
AND YOU'RE RIGHT IN THE ASPECT THAT THIS WILL BE ADDING FUNDS INTO IT, BUT YOU WOULDN'T EXPECT ANY AT THAT POINT.
SO WE DO HAVE TO RECOGNIZE THAT THIS ISN'T BUILT TO, TO LOOK FOR DEMAND RESPONSE TO HELP IN, IN, IN SOLVING ANY ISSUES AT THESE LEVELS.
SO I JUST WANTED TO CLARIFY THAT, THAT YOU WOULD EXPECT IT.
SO THERE WOULD BE NO WAY OF, OF HEDGING EXCEPT FOR, YOU KNOW, CONTRACTING FURTHER OUT TO SOME DEGREE, BUT I UNDERSTAND, BUT I'VE NEVER LIKED THAT CUZ HEDGING AGAINST THESE, THIS STRAIGHT UP AND DOWN AT THE END OF THAT CURVE, YOU CAN'T DO THAT EITHER.
SO, UH, THAT WAS A RAMBLE, BUT THAT'S OKAY.
DAVE, I WANT TO, I WANNA MAYBE CIRCLE BACK AND, AND MAYBE PUT THE ONUS ON YOU.
DO YOU HAVE ANY SUGGESTED VOL LEVELS, FOR EXAMPLE, THAT WE SHOULD LOOK AT OR ANY ADDITIONAL PARAMETERS THAT YOU THINK WE SHOULD LOOK AT THAT MIGHT TARGET THE SAME $500 MILLION THAT YOU WERE ORIGINALLY, THAT CANON ORIGINALLY LAID OUT BY CHANCE? UH, I GUESS WE HAVEN'T LOOKED ANY SPECIFIC AROUND IF WE WANTED TO DO SOME BACKCAST IN, LIKE, FOR EXAMPLE, I DON'T KNOW, A, A DECOUPLED BALL WITH AVOL OF $20,000 PER MEGAWATT HOUR AND GETS YOU IN THE BALLPARK OF, OF SOME OF THE VALUES.
SO, SO THAT SORT OF DIRECT LINKAGE I CAN'T PROVIDE TODAY.
I MEAN, IF FOLKS WANTED TO, I, I KNOW SOME FOLKS HAVE POINTED TO THE, AT LEAST A PORTION OF THE IMMS PROPOSAL IS, IS THAT THEY HAD, I THINK, USED THE VA AND SOME OF THEIR FILINGS, I DON'T REMEMBER THE EXACT NUMBER NOW, UM, OF COURSE THAT WAS ONLY A PORTION OF THEIR OVERALL PROPOSAL
UM, BUT YOU KNOW, IF YOU, IF YOU WANTED TO USE A VALUE, I THINK MY MEMORY IS THAT IT WAS MAYBE $30,000 PER MEGAWATT HOUR WAS THE, WAS THE PROPOSED VOL AS PART OF THEIR OVERALL.
UM, BUT THAT MAY NOT BE APPROPRIATE IF IT, IF YOU'RE ONLY LOOKING AT THAT PORTION OF IT.
UM, SO I'M SORRY THAT THAT'S A TERRIBLE ANSWER TO, TO YOUR QUESTION, BUT I DON'T HAVE A, A DIRECT VALUE TO GIVE YOU TODAY.
SO MY, MY INITIAL INCLINATION IS TO, TO ASK YOU TO LOOK AT SOMETHING THAT'S RELATIVELY SIMPLIFIED.
I THINK, YOU KNOW, SHIFTING, SHIFTING CURVES I THINK BECOMES A PROBLEM FOR NOT ONLY LOADS TO HEDGE, BUT ALSO FOR GENERATORS TO UNDERSTAND AND MANAGE AS WELL.
SO I, I WOULD THINK THAT SOMETHING FAIRLY STRAIGHTFORWARD AND SIMPLE THAT TARGETS, YOU KNOW, THE SAME $500 MILLION THAT, THAT YOU, THAT WHERE IT'S INDICATED EARLIER IN THIS PRESENTATION'S PROBABLY THE MOST PALATABLE I WOULD, I WOULD EXPECT.
BUT, YOU KNOW, WITHOUT GETTING OVERLY COMPLICATED OR FANCY IN THAT REGARD, BUT I'M, I MAY BE SPEAKING OUTTA LINE IN THAT, UM, WE'LL GO TO THE CARDS REAL QUICK, SO WE'LL GO TO REST ME AND THEN BOB.
UM, SO WHEN YOU LOOKED AT THE $10 AND $20, IT IS, UM, I GUESS IT IS BASED ON THE, UH, STUDY BRA STUDY WHERE LIKE $10 FOR FOUR HOURS OR SOMETHING IS REQUIRED TO START UP A GENERATION OR SOMETHING, RIGHT? SO IF WE LOOK AT HOW MANY HOURS ARE THERE, UM, IN THIS 6,000, 7,000 RANGE, YOU MAY SEE THAT IT MAY BE MORE THAN FOUR HOURS EVERY, UM, CONTINUOUS RUN.
UH, BUT IF WE JUST SAY $10 IS WHAT IS NEEDED, HOW MUCH ADDITIONAL HIGHER UP YOU NEED TO MAKE THE, SAY A 4,000 MEGAWATT JUMP TO GET THIS 500 MILLION.
SO INSTEAD OF THE $20 AT 6,500, IF WE CREATE ANOTHER JUMP AT, UH, 4,000 MEGAWATTS, WHAT WOULD THAT LEVEL BE TO GET THE SAME LEVEL OF PRICING, SAME LEVEL OF OUTCOME,
[02:45:03]
I GUESS.WELL, WHICH, WHICH OF THE FLOORS ARE WE GETTING RID OF TO ADD A $4,000 MEGAWATT FOR? SO INSTEAD OF THE $20 ALL THE TIME, IF WE GET THE, UM, UH, JUMP AT 4,000.
OKAY, SO YOU'D, THE IDEA, AND I'M HOPING SOMEONE'S TAKING SOME NOTES FOR ME, BUT THE IDEA WOULD BE A $10 FLOOR AT 7,000 OR BELOW AND THEN AN ADDITIONAL FLOOR AT 4,000 MEGAWATTS IN BELOW WITH A VALUE TUNE TO GET US SOMETHING SIMILAR TO WHAT WE SAW WITH OUR PREFERRED APPROACH ANALYSIS SO FAR.
YEAH, AND I DON'T KNOW, $10 IS THE RIGHT NUMBER.
I THINK YOU GUYS DID SOME ANALYSIS TO SAY THAT IS WHAT IS NEEDED FOR THE COMMITMENT, RIGHT? THAT WOULD AVOID THE ROCK.
IS THAT CORRECT? YEAH, THAT THERE WAS SOMETHING ELSE'S DONE WELL, LIKE A YEAR AND A HALF AGO NOW THAT WAS LOOKING AT, YOU KNOW, WITH SOME PRESUMPTION AROUND A FOUR HOUR DURATION AND THINGS LIKE THAT.
NOW CERTAINLY THE, AND THIS THIS MAY LINK TO KIND OF KIND OF WHAT YOU'RE BRINGING UP, CERTAINLY THE LOWER RESERVE LEVELS ARE HAVING, ARE LESS LIKELY TO HAVE THAT FOUR HOUR DURATION.
I I THINK THAT'S UNDERSTOOD, BUT WANTED TO BRING THAT UP.
BUT, UH, I I, I DO UNDERSTAND THAT THIS SCENARIO YOU'RE, YOU'RE TALKING ABOUT AND, AND YEAH, IF THAT, IF THAT'S WANTS TO BE SORT OF ONE OF THE SCENARIOS WE CAN TAKE A STAB AT, WE CAN DO THAT.
SO YEAH, SO A LONGER, UH, DURATION WILL BE THERE FOR THAT 7,000.
SO YOU COULD LOOK AT THAT TO SAY IS LESS THAN 10, OH, WILL LESS THAN 10 GET YOU THE SAME LEVEL OF COMMITMENT YOU NEED? AND, UH, BUT IT MAY BE TOO MUCH WORK.
BUT IF, IF THAT IS THE $10 THAT YOU WANT TO MAINTAIN, KEEP THAT AT THAT $10, BUT CHANGE THE OTHER ONE TO A MUCH, UH, UH, SMALLER MEGAWATT OR DC RESERVE LEVEL TO GET THE SAME LEVEL OF PRICING OUTCOME THAT YOU WANT OR THE REVENUE OUTCOME THAT YOU WANT.
AND AGAIN, THE, I DON'T SEE THAT BEING OUR PREFERRED SCENARIO.
SO JUST TO, TO RAISE IT UP FRONT, MAYBE THE ONE OTHER THING TO NOTE AND WE'RE HAPPY TO LOOK AT THAT.
OKAY, MY INTUITION IS THAT BECAUSE THERE'S LESS FREQUENT PERIODS IN WHICH YOU'RE AT 4,000 OR LESS, THANKFULLY, RIGHT? THAT'S HOW WE'RE TRYING TO OPERATE.
BUT, UM, THAT IS GOING TO RESULT IN MORE YEAR TO YEAR VARIATION IN WHAT YOU MIGHT SEE IN, IN OUTCOMES.
SO THAT, THAT, SO THIS, AS WE DO THE ANALYSIS, UM, AS WE TRY AND SORT OF TUNE THAT TO SORT OF BE SOMETHING EQUIVALENT TO THE NUMBERS YOU WERE SEEING WITH OUR PREFERRED APPROACH, I THINK YOU'LL SEE MORE YEAR TO YEAR VARIATION IN THAT.
ERIC GOFF, UH, CLIFF, I APPRECIATE WHERE YOU'RE GOING EARLIER ABOUT THE ALTERNATIVE WAYS TO MODIFY THE RDC TO GET TO THE 500 MILLION.
UM, AND SO RATHER THAN PROPOSING A SPECIFIC BIG COUPLE BALL, I WONDER IF T COULD, YOU KNOW, FIGURE OUT, YOU KNOW, WHAT IS A POSSIBLE RANGE OF ALL THAT COULD LEAD TO THAT OUTCOME? UM, RATHER THAN TRYING TO LIKE PROPOSE A NUMBER AND, AND, AND SEE, UH, YOU KNOW, OH, THAT ONE THERE'S ONLY 200 AND THAT ONE'S, YOU KNOW, 2 BILLION.
I JUST, I'LL LEAVE IT THERE AND SEE WHAT YOU THINK, DAVE.
YEAH, AND, AND I, AND I, I WAS THINKING A LITTLE BIT MORE ABOUT WHAT CLIFF SAID.
I GUESS HOW I'M UNDERSTANDING THE REQUEST IS HAVE AN O R D C THAT THE, THE EFFECTIVELY THE O RDC THAT WAS IN EFFECT FOR 2022 WITHOUT ANY FLOORS AND CHANGE THE VALUE OF ALL TO SEE WHAT VALUE OF ALL GIVES YOU SOME VALUE SIMILAR TO THE BACK TASK WE'VE ALREADY PRODUCED FOR OUR PREFERRED APPROACH.
SO INSTEAD OF THE, THE $10 ADDERS, IT'S, IT'S A SHIFTED CURVE BECAUSE OF A HIGHER, UM, BALL, RIGHT? YEAH.
AND, AND JUST FOR ANYONE LISTENING THAT DOESN'T UNDERSTAND WHAT WE'RE TALKING ABOUT, IT'S PROBABLY IMPORTANT WHEN WE'RE TALKING ABOUT LIKE THE 30 VAULT, THAT DOESN'T MEAN THE PRICE GETS $30,000, IT'S JUST IMPORTANT OF THE CURVE, BUT THE CAP IS STILL 5,000 LISTENING.
SO I GUESS THE, AND THEN WE'RE AT OUR TWO SCENARIOS.
SO AS FOLKS ARE THINKING
BUT I THINK WE CAN PUT TOGETHER BOTH THOSE SCENARIOS.
YEAH, IF YOU CAN DO THAT, DAVE.
[02:50:01]
LET'S BRING THAT BACK TO OUR, OUR NEXT MEETING AND, AND HAVE THAT AS AN OPTION TO LOOK AT IAN CLIFF.I WAS JUST GONNA SAY, UM, I THINK THERE'S ONLY ONE OPTION THAT TACK COULD ENDORSE TODAY CUZ IT'S THE ONLY ONE THAT'S COMPLETELY FLESHED OUT.
IT SOUNDS LIKE WE'RE GONNA NEED TO COME BACK FOR A SECOND MEETING IF WE ACTUALLY WANT TO TAKE THESE THINGS UP.
YEAH, I DON'T THINK WE'RE GONNA BE ABLE TO DRIVE TO A CONCLUSION TODAY.
SO I THINK WE'VE GOT A GENERAL DIRECTION, BUT I, I DON'T THINK WE'RE GONNA HAVE A CONCLUSION TODAY, UH, SHAMS. YEAH.
UM, I WOULD SUPPORT WHAT REMI IS SAYING, YOU KNOW, I THINK BY HAVING A TIER AROUND 3,500 OR 4,000 MEGAWATTS, YOU KNOW, THAT REALLY IS CLOSER TO PCM WHERE YOU'RE PAYING, SO YOU'LL HAVE MORE DOLLARS TO PAY THE DISPATCHABLE.
WHEREAS RIGHT NOW, IF YOU HAVE THIS MUCH UP TO 7,000 MEGAWATTS, YOU'RE ACTUALLY PAYING A LOT OF THE RENEWABLES AND EVERYTHING ELSE.
SO I THINK BY TIGHTENING IT, YOU'RE GETTING MUCH CLOSER TO GETTING TO PCM.
I KNOW IT'S MORE VARIABLE FROM YEAR TO YEAR, BUT YOU KNOW, YOU HAVE 2020 AND 2022 THAT YOU'RE LOOKING AT.
SO, UM, SO YEAH, LET'S GET THAT.
UM, AS RASHMI SAID, YOU KNOW, THAT 7,000, MAYBE WE DON'T NEED 7,000, PROBABLY LESS THAN 7,000, MAYBE 6,000, UH, BECAUSE WE ARE ARGUING WHETHER EVEN 6,500 IS NEEDED.
NOW THAT IS THE PROBLEM, RIGHT? THEY, UH, THEY WANT MORE RESERVES, 8,000 MEGAWATTS.
SO, AND YOU NEED COMMITMENT AND SO YOU NEED THAT PRICE, UH, WHATEVER RESERVE LEVEL COURT NEEDS THAT NEEDS TO HAVE THAT PRICE LEVEL TO GET THAT COMMITMENT.
BUT THEN SHOULD THE REVENUE STREAM BE THEN AGAIN SPREAD ACROSS EVERYTHING? OR SHOULD THE REST BE PUT AT THE SCARCITY LEVEL IS THE QUESTION, RIGHT? SO AT THE SCARCITY LEVEL, YOU KNOW, UM, THE TIGHTER YOU MAKE IT, THE MORE DOLLARS YOU HAVE.
SO CAN WE DO LIKE 3,504,000 IS TWO LOOKS, JUST SEE WHAT 3000 A FLOOR AT 3,500, WHAT THAT WOULD LOOK LIKE VERSUS 4,000? THE DATA? YEAH, I'M GONNA SAY NO.
LET'S, I WANT, I WANT FOLKS TO PICK ONE AT THIS POINT.
I THINK, YOU KNOW, WE WE'RE HAPPY TO DO A COUPLE OF SCENARIOS, BUT I'D, I'D LIKE, I'D LIKE WAS THE, TO PICK ONE AND, AND YOU CAN INFER SOME INFORMATION FROM THEM.
IAN? WHAT? I'M SORRY, I, I DID JUST WANT TO PUT IN A VOTE FOR DAVE'S PERSONAL LIFE.
UM, HE DOES HAVE SOME BANK THINGS GOING ON TOO, IS MY UNDERSTANDING.
SO I I I'M IN, IN FAVOR OF LIMITING WHAT WE, UH, WHAT WE CRAM ON DAVE RIGHT NOW.
I HAVE PERSONAL LIFE THINGS GOING ON TOO,
AND THEN, AND AGAIN, I'M, I ALSO JUST WANT TO KIND OF, UH, HELP PART OF SORT OF, UH, PROTECTING THE TEAM IN TERMS OF MAKING SURE WE'RE GETTING YOU ALL GOOD ANALYSIS AND I'M ALSO HOPEFUL THAT THAT WILL, UH, HELP FOCUS THE CONVERSATION AS WELL.
CAUSE I KNOW YOU ALL HAVE SOME TOUGH DECISIONS TO MAKE, UH, IN A SHORT PERIOD OF TIME.
UH, JUST WANTED TO FLAG, UH, ENCHANTED ROCK FILED COMMENTS EARLIER WITH, UM, PROPOSED STEPS SIMILAR TO RESUME'S CONCEPT OF HAVING HIGHER, POTENTIALLY A COUPLE STEPS AT, UM, HIGHER FLOOR LEVELS AT LOWER RESERVE MARKS.
UM, IF IT'S, IF IT'S HELPFUL FOR CONSIDERATION, JUST WANNA PUT IT OUT THERE.
YOU WANT YOU PULLING THOSE UP, COREY, BY CHANCE? OH, THANKS FOR PULLING THAT UP.
I GUESS, UM, WE HAD, WE HAD SUGGESTED SOMETHING LIKE, UH, A HUNDRED DOLLARS AT, UH, THE 6,000 MEGAWATT LEVEL AND THEN A HIGHER FLOOR AT THE, UH, 5,500 MEGAWATT LEVEL.
UM, BUT I GUESS WITHOUT BEING ABLE TO RUN, RUN OUR OWN ANALYSIS ON, ON THE DATA THAT ERCOT WAS MODELING, UM, YOU KNOW, THOSE ARE NUMBERS THAT I GUESS ARE, WE'RE, WE'RE NOT WED TO, I GUESS IF THERE'S A BETTER RATIONALE FOR, FOR DIFFERENT NUMBERS ON THE FLOORS,
[02:55:01]
I THINK OUR PRIMARY INTENT WAS JUST TO GET SOME CONSIDERATION FOR POTENTIAL STEPS AT LOWER RESERVE LEVELS THAT ALIGN BETTER WITH THE, UM, TIGHT CONDITIONS THAT WE'RE, WE'RE TRYING TO ADDRESS WITH DISPATCHABLE CAPACITY UNDER PCM.SO DAVE, DO YOU HAVE ENOUGH INSTRUCTION IN TERMS OF SCENARIO AND GIVEN THE TIGHT AMOUNT OF TIME TO GET THIS TURNED AROUND OR, YEAH, SO WHAT I, WHAT I, I GUESS WHAT I'M HEARING, AND, AND I'M GONNA, I'LL LOOK FOR HEADS TO NOD.
CAUSE I THINK THERE WAS A COUPLE OF, A LITTLE BIT OF DISTINCTION BETWEEN WHAT JOHNS AND ROSHMI ARE IN TERMS OF NUMBER, BUT WHAT I'D LIKE TO DO IS ONE SCENARIO WILL BE TO LOOK AT A, WE'LL, WE'LL ONLY HAVE THE FLOOR OF $10 AT 7,000 RELATIVE TO OUR CURRENT PROPOSAL AT, AT, WELL THE $10 PER MEGAWATT HOUR FLOOR FOR 7,000 AND BELOW.
AND WE WILL ADD AN ADDITIONAL FLOOR AT 4,000 MEGAWATTS AND BELOW AND TUNE THAT SUCH TO THAT IT GIVES SIMILAR BACK CASS RESULTS TO WHAT WE, WE SHOWED.
SCENARIO TWO WILL BE TO REMOVE THE FLOORS BUT DO THIS VOL HCAP DECOUPLING AND INCREASING THE VOL SUCH THAT SIMILARLY WE'LL GET SOMETHING THAT PROVIDES RESULTS THAT SIMILAR TO THE BACKCAST RESULTS THAT WE SHOWED FOR OUR PREFERRED APPROACH.
SO I'M GONNA START WITH THOSE TWO SCENARIOS, UH, AND SEE HOW, SEE HOW THEY'RE COMING IF THEY, IF THOSE ARE GOING WELL.
AND WE CAN TRY AND, AND DO MAYBE, UH, AN ADDITIONAL REPLACE THE 4,000 MEGAWATT VALUE WITH 3,500 TO, TO SHAMS REQUEST.
UH, AND WE CAN THINK AS SORT OF A, AS A, UH, PLAN B IS NOT THE RIGHT TERM, BUT THE, AS IN SOME ADDITIONAL STUDIES, IF TIME ALLOWS TO DO SOMETHING SIMILAR TO, TO WHAT ENCHANTED ROCK SHARED, WE AND JOEL JUST SORT OF WALK TO, WE'LL, WE'LL HAVE THOSE AS POTENTIALS, BUT AT LEAST THOSE FIRST TWO, WE'LL, WE WILL DO OUR BEST TO BRING SOMETHING TO THE APRIL 10TH MEETING.
IF WE'RE SHOOTING AND WE'RE GOING TO USE THE 400 AND SOME ODD MILLION DOLLARS, DAVE FOR, UH, FOR OUR TARGET TO ADD TO THE MARKET, DO ANY OF THE CURVES THAT YOU'RE GOING TO PUT TOGETHER TO SHOW US WHAT THEY LOOK LIKE, DO THEY FUNDAMENTALLY CHANGE THE ABILITY TO HEDGE OR NOT TO HEDGE FOR ANY OF THOSE COSTS? OR IS IT BASICALLY GONNA BE THE SAME, JUST A DIFFERENT LOOKING, LOOKING CURVE GIVING IN AT DIFFERENT LEVELS? WELL, I THINK WE'VE BEEN DISCUSSING SORT OF TWO DISTINCT WAYS OF HEDGING FROM A, FROM A CONTRACTUAL COMPONENT.
I, I, I DON'T SEE THERE BEING ANY CHANGE ABOUT WHAT WE'RE, WE'VE BEEN TALKING ABOUT RIGHT NOW.
THERE WAS THIS OTHER IDEA OF, WELL, THESE, THESE THAT THE LEVEL, THE LEVEL OF FLOORS WE'RE TALKING ABOUT ARE NOT NECESSARILY WHERE WE WOULD SEE LOAD RESPONDING.
THE ONE CASES WHERE THAT MAY BE APPLICABLE IS IN THE HAVING A FLOOR AT 3000 OR 3,500 MEGAWATTS.
I WOULD GUESS THAT IN ORDER TO MOVE THE NEEDLE BECAUSE OF THE INFREQUENCY AND TIMES WE'RE THERE, WE WILL ACTUALLY SEE FLOORS THAT ARE IN THE HUNDREDS OF DOLLARS, IF NOT IN THE THOUSANDS OF DOLLARS.
AND THAT BEING THE CASE, YEAH, THAT WOULD CERTAINLY BE LEVELS AT WHICH I WOULD EXPECT DEMAND RESPONSE AND PEOPLE ARE PASSIVELY RESPONDING, RESPONDING TO THE PRICES.
YEAH, JUST WANTED TO CHECK TO SEE WHAT YOU WERE LOOKING AT.
ALL RIGHT, SO I THINK WE'RE GETTING SOME COALESCENCE HERE ON THE VA WHEN WE COME BACK ON APRIL 10TH.
UH, NOT ON THE VA ON THE, UH, O R D C, BUT WHEN WE COME BACK ON APRIL 10TH, WE'LL REVIEW THE DATA, UM, THAT DAVE HAS FOR US.
DAVE, IF THERE'S ANY OPPORTUNITY TO PUSH THAT OUT EARLY, THAT WOULD BE GREAT, BUT UNDERSTAND THE TIME CONSTRAINTS.
SO ANYHOW, UH, BUT CERTAINLY APPRECIATE, UH, YOUR STAFF TAKING A LOOK AT THIS.
SO, UM, LET'S CIRCLE BACK TO ONE MORE AND LOOK AT THE PROCUREMENT OF ANCILLARY SERVICES IN THAT REGARD.
I THINK, UH, THAT WAS THE ONLY OTHER OPTION THAT WE LEFT ON THE TABLE THERE.
WANTED TO HEAR IF ANYONE HAD ANY SPECIFIC IDEAS OR OPTION OPTIONS THAT THEY WANTED US TO CONSIDER, OR IF THIS IS STILL SOMETHING THAT WE WANNA MOVE FORWARD.
EMILY? YEAH, CAN WE HEAR FROM ERCOT
[03:00:01]
ON WHAT THEY, UM, CONSIDERED EVALUATED, UH, IF ASKED BY THE BOARD WHAT THEY'LL SAY ABOUT THIS OPTION IN TERMS OF IF ASKED ABOUT THE, THE ADDITIONAL NCI SERVICE PROCUREMENT? I MEAN, AS IT STANDS RIGHT NOW, I, I THINK WE, WE'VE OBVIOUSLY MADE CHANGES TO THAT AS A BRIDGING APPROACH.REALLY THE ONLY THING WE COULD REALLY DO IS INCREASE THE EXISTING QUANTITIES OF ANCILLARY SERVICES.
UM, IT, IT IS BOTH FROM INTERNAL DISCUSSION AND BASED ON FEEDBACK.
IT'S, IT'S, IT IS NOT ONE OF OUR PREFERRED APPROACHES.
WE REALLY WOULD PREFER TO GO WITH SOMETHING, UH, THAT'S THE, THE RDC BASED
I MEAN, I THINK PART OF THE REASON IS, UH, IT, IT'S, IT'S MUCH LESS CLEAR TO US HOW THAT HELPS TO, TO BRIDGE THE GAP AND SORT OF MEET SOME OF THE CRITERIA THAT I THINK WE'VE LISTED OUT ABOUT WHY, UM, WE HAVE THE PREFERRED APPROACH WITH, UH, THE RDC.
SO I, I, I DON'T THINK IT HAS SOME OF THE, I KNOW THIS IS SORT OF A SECONDARY BENEFIT.
I DON'T THINK IT HAS ANY OF THE, THE SAME BENEFITS THAT WE'VE BEEN TALKING ABOUT WITH AT LEAST INCENTING THE NEED FOR FEWER RS.
IT'S ALSO, UM, NOT AS CLEAR IN TERMS OF THAT WE WOULD HAVE THE SORT OF SAME TARGETED, UH, CHANGE IN REVENUES, UH, AS WE WERE SEEING WITH THE, THE R E C.
SO, UM, IT JUST SEEMS TO DO THE THINGS THAT WE LISTED OUT AS OUR, AS OUR JUSTIFICATION FOR THE VALUES WE PICKED.
IT DOESN'T SEEM TO DO ANY OF THOSE AS, AS WELL AS THE PREFERRED SOLUTION THAT WE HAVE.
GO AHEAD, BOB, JUST REAL QUICKLY.
AND THEN ALSO GOES FOR REPURPOSING NON SPIN TO THE TWO HOUR UNCERTAINTY ALSO.
YOU GUYS ARE COMFORTABLE WITH THAT STILL YET, ARE YOU? NO, I'M, YOU KNOW, I THINK CANON EXPRESSED THIS, BUT THERE'S SORT OF TWO COMPONENTS TO THAT IS THERE'S A, THERE'S A, EVEN IF WE WERE OKAY WITH IT, HOW FAST CAN THAT, CAN IT BE DONE? I MEAN, THAT'S, THAT'S, THAT'S EASIER THAN A WHOLE NEW ANSLEY SERVICE, BUT IT'S NOT, IT'S NOT NECESSARILY FREE.
UM, BUT I THINK THE OTHER BIG SIDE OF IT IS, AND, AND JUST DISCUSSION WITH OPERATIONS, THEY REALLY WANT TO MUCH BETTER UNDERSTAND HOW E C R S IS WORKING BEFORE WE CAN REALLY CONSIDER THAT.
OKAY, SO THAT BEING SAID, ARE WE HEARING ANY, ANY DESIRE TO ADDRESS ANYTHING WITH ANCILLARY SERVICES? I DON'T SEND THIS TO DETROIT.
SO I THINK WE, WE WILL MORE THAN LIKELY DROP THAT FROM OUR RECOMMENDATION.
SORRY, WHAT, WHAT WERE YOU ASKING? SORRY, WHO'S SPEAKING? OH, SORRY.
SO IN TERMS OF WHETHER THERE WAS ANYTHING SPECIFIC ON ANCILLARY SERVICES THAT WE WANTED TO ROLL INTO THE T RECOMMENDATION IN THAT REGARD, I'M NOT HEARING ANY, ANY SPECIFIC SUPPORT FOR INCREASES TO, IN THE QUEUE ANCILLARY SERVICES IN THAT REGARD.
UM, SORRY, WE'VE GOT BILL SMITH IN THE QUEUE THAT JUST DROPPED IN.
SO DID YOU HAVE ANYTHING TO ADD, JOHN, OR NO, JUST THAT WE'RE SUPPORTIVE OF CONTINUING THAT ON THE TABLE AS A POTENTIAL SOLUTION.
I DON'T HAVE ANYTHING TO ADD TO WHAT JOHN HAS INDICATED.
OKAY, ERIC? YEAH, I JUST WANTED TO SAY THAT WE WANNA KEEP IT ON THE TABLE FOR NOW, UM, BECAUSE WE, WE MIGHT SUPPORT IT DEPENDING ON THE O OUTCOMES.
EMILY? YEAH, SIMILAR TO THE CONVERSATION WE HAD EARLIER AROUND INDICATIVE, UH, PCM, I'M, I THINK THERE'S A LOT OF GOOD IDEAS OUT THERE AROUND A, UM, AND UNDERSTANDING THAT ERCOT IS NOT VIEWING THOSE AS VIABLE BRIDGING SOLUTIONS GIVEN THE IMPLEMENTATION CHALLENGES AND THE TIMING.
UM, BUT I, I WANT TO BE CLEAR THAT WE'RE NOT SUGGESTING THOSE, UM, POTENTIAL IMPROVEMENTS, RIGHT? NOT BRIDGING SOLUTIONS, BUT IMPROVEMENTS SHOULDN'T ALSO BE CONSIDERED PERHAPS ON A SEPARATE TRACK, RIGHT? OKAY.
SO I MEAN, IF AGAIN, KEEPING IN MIND AN, YOU KNOW, THAT THESE ARE SUPPOSED TO BE BRIDGE SOLUTIONS OR WHATEVER, I THINK IF THERE'S ANY SPECIFIC PROPOSALS ON ANCILLARY SERVICES THAT ANYBODY WANTS TO ADDRESS OR POTENTIALLY WRAP INTO THE T RECOMMENDATION, I WANNA MAKE SURE THAT WE'RE VERY EXPLICIT ABOUT WHAT THOSE ARE.
NOT A NEBULOUS, NOT A NEBULOUS, UM, ARGUMENT FOR INCREASING ANCILLARY SERVICES IN GENERAL.
I DON'T, DON'T KNOW THAT THAT'S
[03:05:01]
HELPFUL.WE REALLY PROBABLY NEED SOME ADDITIONAL ANALYSIS BEHIND IT TO HELP STUDY IT.
AND I'M NOT TRYING TO PUSH ANYTHING OVER TO DAVE, BUT, UH, JUST TRYING TO INDICATE THAT WE DO WANNA, WE DO WANNA MAKE SURE THAT THE ANALYSIS AND THE INFORMATION THAT WE BRING TO RMC AND TO THE BOARD, UM, IS GONNA BE ROOTED IN, IN SOMETHING THAT'S, THAT'S GOT SOME BASIS TO IT THERE.
OH, I WAS GONNA MAKE A COMMENT.
SO I THINK JOHN, AND I KNOW ERIC'S IN THE QUEUE, THAT MIGHT BE SOMETHING FOR CONSUMERS TO BE PREPARED TO SPEAK ABOUT, AT LEAST AT NEXT TECH, KIND OF WHY YOU DON'T SUPPORT THE RDC APPROACH AND WHAT YOU ENVISION IN THIS AS KIND OF YOUR LIKE ALTERNATIVE APPROACH.
I THINK WE'D PROBABLY RELY ON YOU GUYS TO DEVELOP THAT OUT A LITTLE BIT MORE, MORE STRAIGHTFORWARD THAN I WAS.
I GUESS MY COMMENT IS JUST IN GENERAL RIGHT NOW WITH REGARDS TO LEAVING IT ON THE TABLE, AT LEAST FOR UNTIL AT LEAST NEXT, NEXT WORKSHOP AS A POT POTENTIAL OPTION.
SO REPEAT THAT AGAIN, I'M SORRY.
UH, THE SECURING AND AS ADDITIONAL AS LEAVE THAT ON THE TABLE FOR NOW UNTIL THE NEXT WORKSHOP.
YEAH, UM, I APPRECIATE YOUR COMMENTS AND UM, I, I DON'T THINK THAT THE CONSUMER SEGMENT IS NECESSARILY UNITED ON THIS PARTICULAR SOLUTION, BUT I THINK WE, YOU KNOW, IT'S WORTH TALKING ABOUT IT IN ORDER TO FURTHER CLARIFY IT.
HOWEVER, UH, ONE OF THE THINGS I WANNA GET INTO IS WHAT DRIVES ORCAS ASSUMPTIONS AND OPERATIONS BASED TO WHY THEY BELIEVE THAT PROCURING ADDITIONAL ANCILLARY SERVICES DOESN'T LET YOU MEET A TARGET ONLINE, UH, RESERVE AMOUNT.
UM, AND I KNOW THERE'S SOME TECHNICAL THINGS THERE AS TO WHAT THE ANSWER WILL BE, BUT, UM, ANSWERING SOME OF THOSE TECHNICAL QUESTIONS MIGHT LEAD YOU YOU TO GETTING A HIGHER, UM, RE ONLINE RESERVES.
UM, AND IT CAN BE DONE AT SIMPLY AS A PROTOCOL CHANGE.
SO I, I'D LIKE TO CONSIDER SOME OF THOSE DISCUSSIONS ABOUT, YOU KNOW, WHY DOESN'T PROCURING MORE RESERVES LEAD TO MORE RESERVES, BECAUSE THAT'S SOMETHING THAT'S DIFFICULT TO UNDERSTAND AT A, A HIGH LEVEL, EVEN IF YOU UNDERSTAND THE DETAILS.
ANY OTHER COMMENTS OR QUESTIONS? WE WILL KEEP ANCILLARY SERVICES ON THE TABLE WOULD ASK TO BE VERY STRAIGHTFORWARD.
WE ARE GONNA BE RELYING ON THOSE FOLKS THAT WANT THAT ON THE TABLE TO, TO PREVENT, UH, PRESENT SOME SUPPORTING EVIDENCE AND INFORMATION FOR THAT AT OUR NEXT MEETING THERE.
ANY OTHER COMMENTS OR QUESTIONS? NOW HERE'S SOMETHING FROM THE PHONE.
SO WE'VE GOT A LITTLE BIT OF HOMEWORK FOR EVERYONE AT THIS POINT, SO WE NEED TO START, WE'RE GONNA BE VERY MUCH AGAINST, UM, A HARD DEADLINE IN, IN TERMS OF GETTING OUR INFORMATION TOGETHER AND GETTING OUR INFORMATION PUBLISHED FOR THE RELIABILITY AND MARKETS COMMITTEE IN THAT REGARD.
AND SO I THINK NOW THAT WE'RE COALESCING AROUND A COUPLE OF DIFFERENT IDEAS THERE, I THINK WHAT I'D LIKE TO HAVE EVERYONE DO, UH, AS, AS PART OF YOUR HOMEWORK ASSIGNMENT, IS HELP US DEVELOP THE REASONS WHY WE WANT TO TAKE STEPS TOWARDS A SPECIFIC POSITION.
WHAT ARE THE PROS? WHAT ARE THE CONS FOR THOSE ITEMS THAT WE'VE DISMISSED IN TERMS OF NOT BEING VIABLE OPTIONS? I WOULD LOVE TO HAVE SOME ADDITIONAL INFORMATION THERE AS TO WHY WE DISMISSED IT.
I THINK WE DEVELOPED A PRETTY GOOD RECORD OF THAT TODAY.
BUT I WOULD LIKE TO HAVE VERY SPECIFIC INFORMATION THAT WE CAN INCLUDE IN A SLIDE DECK AND PRESENTATION TO RMC AND TO THE BOARD.
SO, UM, WOULD WELCOME AND INVITE AND WOULD ACTUALLY EXPECT TO GET COMMENTS FROM TAC MEMBERS, UM, AND OTHER FOLKS AS WELL ON THOSE PARTICULAR ITEMS SO THAT WE CAN HAVE A FULLY DEVELOPED RECORD AND MAKE SURE THAT WE'RE BEING, BEING VERY COMPREHENSIVE IN TERMS OF BRINGING THAT INFORMATION TO THE BOARD.
SO THAT BEING SAID, UM, ANY, WE ALREADY DISCUSSED ABOUT TAC COMMUNICATION TO THE RELIABILITY AND MARKETS COMMITTEE.
WE'LL TALK A LITTLE BIT MORE ABOUT THAT AT THE NEXT MEETING AND MAKE A A, A MORE DETAILED PLAN IN THAT REGARD.
ANY OTHER BUSINESS THAT WE WANT TO BRING IN FRONT OF THE COMMITTEE? I, I JUST HAVE TWO KIND OF POINTS OF CLARIFICATION.
WHEN YOU SAY COMMENTS, I THINK WE'RE, WE'RE NOT DOING WRITTEN COMMENTS ANYMORE, WE'RE JUST GONNA PREPARE FOR DISCUSSION AT NEXT TECH MEETING.
AND THEN, UM, I THINK OUR, IT'S APRIL 10TH.
DOES THAT GIVE US ENOUGH TIME TO GET THAT TO RMC? WE JUST HAVE TO GET IT THAT DAY.
SO WE'D HAVE THIS MEETING IN THE MORNING AND THEN THAT PRESENTATION WOULD HAVE TO BE GOOD TO GO BY C O B.
[03:10:01]
SO IT'S IMPERATIVE WE GET THOSE COMMENTS AND THAT FEEDBACK AS SOON AS WE CAN.YOU CAN SEND 'EM IN BULLET POINT FORMATS TO CAITLIN AND I, OR IF YOU WANNA SEND 'EM OUT TO THE WHOLE EXPLODER, THAT'S PERFECTLY FINE TOO.
BUT IF YOU CAN GET THOSE TO US AS SOON AS WE CAN, AS SOON AS YOU CAN, SO WE CAN DEVELOP THE RECORD AND HAVE THE SLIDE DECK PRETTY MUCH POPULATED, READY TO GO, SO THAT WE CAN DROP IN OUR RECOMMENDATION AND SEND THAT ON TO THE BOARD, THAT WOULD BE VERY MUCH APPRECIATED.
[4. Other Business]
COMMENTS? ANY OTHER BUSINESS, ANY OTHER SUGGESTIONS FOR TODAY'S MEETING? I SUGGEST THAT OUR NEXT MEETING WE CAN JUST DO VIA WEBEX IF THAT'S OKAY.IF THERE'S NO OBJECTIONS TO THAT.
WELL, THANKS AGAIN, APPRECIATE EVERYBODY'S TIME ON A FRIDAY AND WE WILL TALK TO YOU ON THE 10TH.