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MEMBERS OF THE ERCOT RELIABILITY AND MARKETS COMMITTEE AND GUESTS, THIS IS BOB FLEXON, COMMITTEE CHAIR.
[1. Call General Session to Order]
WELCOME TO THE APRIL 17TH, 2023 RELIABILITY AND MARKETS COMMITTEE MEETING.HEREBY CALL THIS MEETING TO ORDER.
THIS MEETING IS BEING WEBCAST LIVE TO THE PUBLIC ON ERCOT WEBSITE.
BEFORE WE BEGIN, I WOULD LIKE TO ASK COMMISSIONER MCADAMS IF HE WOULD LIKE TO CALL AN OPEN MEETING OF THE PUBLIC UTILITY COMMISSION OF TEXAS TO ORDER.
THIS MEETING OF THE PUBLIC UTILITY COMMISSION OF TEXAS WILL COME TO ORDER TO CONSIDER MATTERS THAT HAVE BEEN DULY POSTED WITH THE SECRETARY OF STATE ON APRIL 17TH, 2023.
I'M WILL MCADAMS AND I'M JOINED TODAY BY COMMISSIONERS LORI COBOS AND KATHLEEN JACKSON.
BEFORE MOVING ON TO TODAY'S BUSINESS, I'LL HIGHLIGHT TO COMMITTEE MEMBERS THAT THE ANTITRUST ADMONITION AND SECURITY MAP ARE INCLUDED WITH POSTED MEETING MATERIALS.
THE FIRST ORDER OF BUSINESS ON TODAY'S AGENDA IS ITEM TWO.
NOTICE OF PUBLIC COMMENT IF ANYING.
TODAY'S MEETING AGENDA WAS POSTED PUBLICLY ON APRIL 10TH AND PROVIDED INSTRUCTIONS FOR THE PUBLIC FOR COMMENTING IN PERSON TO DATE NO ONE HAS EXPRESSED IN COMMENTING.
IS THAT STILL CORRECT, CHAD? THAT IS CORRECT.
[3. February 27, 2023 General Session Meeting Minutes]
NEXT IS AGENDA ITEM THREE.GENERAL SESSION MEETING MINUTES.
THERE'S A DRAFT IN THE MEETING MATERIALS.
DOES ANYONE HAVE ANY COMMENTS OR WISH TO MAKE A MOTION? JULIE MOVES.
ANY OPPOSED ABSTENTIONS? MINUTES PASSED.
[4.1 ERCOT Staff Recommendation to Committee]
UH, NEXT UP IS AGENDA ITEM FOUR, RECOMMENDATION REGARDING PHASE TWO MARKET REDESIGN, BRIDGING SOLUTIONS.FIRST, UNDER AGENDA ITEM 4.1, CANAN ALMAN WILL PRESENT THE ERCOT STAFF RECOMMENDATION TO COMMITTEE.
THAT WILL BE FOLLOWED BY AGENDA ITEM 4.2, TECHNICAL ADVISORY COMMITTEE RECOMMENDATION, RECOMMENDATION TO COMMITTEE WITH TAC VICE CHAIR CAITLIN SMITH WILL PRESENT.
AGENDA ITEM 4.3 IS FOR THE COMMITTEE'S DISCUSSION AND TO VOTE ON A RECOMMENDATION TO THE BOARD FOUR CANON PRESENTS.
I'D LIKE TO ACKNOWLEDGE THE BOARD RECEIVED A LETTER FROM RETAIL ELECTRIC PROVIDER HOME CONNECT ENERGY REGARDING THE T RECOMMENDATION, WHICH HAS, UH, BEEN POSTED ON NORCO'S WEBSITE UNDER THE BOARD ITEM FOR THIS MATTER.
CANON, PLEASE PROCEED WITH YOUR PRESENTATION.
SO ON UH, JANUARY 19TH, THE PUBLIC UTILITY COMMISSION INSTRUCTED ERCOT TO EVALUATE, UM, SOME BRIDGE BRIDGING OPTIONS AND TO BRING BACK A RECOMMENDATION, UM, THAT, UH, IT WAS IN PROJECT 53,298.
UH, ADDITIONALLY, AS WE DISCUSSED THIS, UM, ABOUT, UH, TWO MONTHS AGO, UH, BOTH THE PUBLIC UTILITY COMMISSION, BUT THE BOARD HAS ALSO EXPRESSED AN INTEREST IN FINDING WAYS TO REDUCE RELIABILITY UNIT COMMITMENT.
SO, UM, WHAT I'M GONNA SHARE WITH YOU IS US INTERPRETING A LOT OF THAT AND TRYING TO PUT SOMETHING TOGETHER THAT CHECKED AS MANY BOXES AS WE COULD IN TERMS OF A SOLUTION THAT, UM, UH, WORKED WITHIN THE PRINCIPLES DESCRIBED IN PHASE TWO, ALONG WITH TRYING TO REDUCE, UH, RELIABILITY UNIT COMMITMENT.
SO, UM, THE, OUR, OUR RECOMMENDATION IS TO MAKE AN OPERATING RESERVE DEMAND CURVE CHANGE, UH, THAT IS TARGETED FOR ONLINE RESOURCES, AND IT SITS IN A RANGE.
THESE CHANGES WOULD SIT BETWEEN, UH, 3000, UH, MEGAWATTS OF O R D C RESERVES AND 7,000, BUT IT WOULD TAKE THE FORM OF A STEP.
SO BETWEEN 3000 AND 6,500, THIS FLOOR FOR ONLINE RESOURCES IS PROPOSED TO BE AT 20.
AND THEN FROM 6,500 TO 7,000 MEGAWATTS OF ONLINE OF RESERVES, THE ONLINE ADDER WOULD BE $10.
UM, THE GOAL FOR THIS WAS, UH, TO RETAIN EXISTING ASSETS, UH, WHERE POSSIBLE SEND A SIGNAL FOR ADDING NEW GENERATION.
UH, AND THEN, UH, LASTLY, AS I MENTIONED AT THE BEGINNING, TO REDUCE RELIABILITY UNIT COMMITMENT.
UM, THE OTHER BENEFITS OF THIS PROPOSAL ARE THAT, UH, THERE WOULD BE MINIMAL SYSTEM CHANGES, SO WE COULD IMPLEMENT THIS QUICKLY.
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WITHIN THE EXISTING MARKET FRAMEWORK, UH, FROM DAY AHEAD THROUGH SETTLEMENT, WHEN WE TOOK SOME OF THE OTHER OPTIONS TO THE STAKEHOLDERS, UH, THAT WAS A PARTICULAR CONCERN, THAT THERE WAS A SIGNIFICANT MARKET DYNAMIC CHANGE THAT THEY DIDN'T HAVE NECESSARILY TIME TO ADJUST TO.UM, AND THEN THIS PROPOSAL ALSO, THESE PRICES, UH, CONTINUED TO BE HEDGEABLE, UH, THROUGH ENERGY POSITIONS.
SO, UM, WE, UH, DID SOME ANALYSIS TO SEE IF, UH, THIS WOULD, UH, MEET THE CRITERIA THAT WE UNDERSTOOD TO BE IN PLACE.
UM, AND, UH, WE DID THAT BY, UH, A BACKCAST.
AND A BACKCAST DOES HAVE LIMITS, AND, AND I WANNA, UH, DISCLOSE THOSE, UH, PRESENTLY.
UM, THE FIRST IS THAT WHEN I DO A BACKCAST, I DON'T CHANGE BEHAVIOR.
WE TRIED TO PICK A MILD YEAR AND A RELATIVELY HIGH RESERVE, UH, I'M SORRY, A HIGH STRESS YEAR.
UM, AND, UH, WE WENT THROUGH AND LOOKED AT THESE CHANGES AND HOW THEY WOULD AFFECT, UH, PRICES.
UH, WE ORIGINALLY PROPOSED A SINGLE FLOOR, UH, BUT AFTER WORKING WITH, UH, STAKEHOLDERS, A A STEP FLOOR, UH, MADE A LOT MORE SENSE.
UH, WE STUDIED VARIOUS, UH, UH, FLOORS, UM, AND, UH, WE, UM, ALSO AGAIN, UH, LOOKED AT THE LOAD WEIGHTED ENERGY PRICE FOR THESE TWO YEARS.
AND, UH, AS YOU CAN SEE HERE, THAT, UM, 2020, LIKE I SAID, WAS NOT A VERY HIGH PRICED YEAR ON, ON AVERAGE.
AND, UH, 2022 WAS, UM, WE A APPLIED THESE PARAMETERS, UH, THAT, SO TO MAKE, JUST SO YOU KNOW, LIKE IN 2020, THE O R D C IN PLACE WAS NOT THE SAME AS WHAT WAS IN PLACE IN 2022.
SO WE APPLIED THAT, UH, THE SINGULAR O R D C, THAT WAS IN PLACE FOR 2022, BACK TO 2020 AS WELL.
THAT'S WHAT THIS LAST BULLET IS SAYING.
SO THIS IS A VISUAL, UH, REPRESENTATION OF WHAT WE'RE PROPOSING.
SO IF YOU LOOK AT THESE, UH, DOTS, THEY, THESE, THIS IS A DISTRIBUTION OF, UH, RESERVES AND, UH, THE, THE ADDER, UM, AT, UH, VER IN THE RANGE THAT WE'RE LOOKING AT.
SO SOMETIMES ON THEIR OWN, THE PRICE CLEARS, UH, A ABOVE THE CAPS THAT WE'RE PROPOSING.
BUT IN, IN THE INSTANCES, THE, IN THE BLUE SHADED AREA UNDERNEATH THE, UH, TEAL LINE, THOSE ARE THE OBSERVATIONS THAT ARE IMPACTED BY OUR RECOMMENDATION.
SO ALL OF THOSE KIND OF THE GRAY DOTS THAT WERE TURNED TEAL MOVE UP AND ARE AT THE BAR.
THEY WILL CLEAR AT THE BAR, UH, PRICE.
SO THAT'S WHERE THE $20 FLOOR AND THE $10 FULL FLOOR APPLY.
SO, UM, WE WANTED TO LOOK AT, UH, WHAT ADDITIONAL REVENUE, UH, THIS PROPOSAL MIGHT ADD TO THE MARKET, AND WHY DID WE WANT TO DO THAT? WHEN YOU LOOK AT THE E THREE ANALYSIS THAT'S BEEN FILED AT THE, AT THE COMMISSION, WHAT IT'S SAYING IS, IF WE WERE TO JUST STAY WITHIN THE CURRENT O R D C WITHOUT ANY ADJUSTMENT, WE ARE ON A PATH TO, UM, LOSE DISPATCHABLE GENERATION AND HAVE A MIX OF GENERATION WHERE THE RELIABILITY OUTCOME, IT MOVES FROM A ONE EVENT IN 10 YEAR STANDARD TO A 12 EVENTS IN 10 YEAR STANDARD.
AND WHAT E THREE OBSERVED WITH PCM IS THAT THE ADDITIONAL INCREMENTAL, UH, DOLLARS NEEDED ON AVERAGE YEAR OVER YEAR IS AROUND 460 MILLION.
SO THAT GAVE US A LOOSE, UH, TARGET, UH, TO SHOOT FOR TO TRY AND, UH, MAKE A CHANGE.
HOWEVER, I, AGAIN, UH, WHEN I, I, UM, THIS IS ON A BACKCAST BASIS, BEHAVIOR PROBABLY WILL DRIVE SOME OF THIS ADDITIONAL REVENUE DOWN.
UM, BUT THIS WAS THE MOST OBJECTIVE WAY WE COULD LOOK AT
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THIS IN, IN THE TIME PROVIDED.SO WE, WE KNEW FROM THE E THREE ANALYSIS THAT THE MARKET NEEDED ADDITIONAL REVENUE.
IT N IT NEEDS ADDITIONAL REVENUE IN, UH, TOWARDS PARTICULAR RESOURCES, HOWEVER.
SO THAT WAS THE OTHER THING WE WANTED TO LOOK AT IS, OKAY, LET'S SAY WE DO THIS IN THIS RANGE, WHERE DOES THE ADDITIONAL REVENUE GO? AND, UM, I'M GONNA SKIP, I'LL COME BACK TO THAT ONE.
BUT, UM, WHEN WE LOOKED AT THIS, IF WE, UH, LOOKED AT ALL OF THE 2022 INTERVALS, UH, ON THE BACKCAST, YOU SEE THE REVENUE DISTRIBUTION ON THE LEFT BAR.
AND, UH, IF YOU WERE TO MAKE OUR ADJUSTMENT, YOU SEE HOW, UH, THE REVENUE CHANGES, OR THIS MAYBE A BETTER WAY TO SAY THIS, IS HERE'S WHAT'S ONLINE IN THAT, UH, 3000 TO 7,000 WINDOW.
SO THEY'RE THE ONES THAT WOULD BE GETTING, UH, THE ADDITIONAL REVENUE.
SO, UH, THERE'S BEEN A LOT OF CONFUSION, UH, BY THIS SLIDE.
SOME PEOPLE THINK, OH, WIND ACTUALLY GETS LESS REVENUE OR SOLAR GETS LESS.
IT'S THAT OF THE ADDITIONAL REVENUE.
80% GOES TO DISPATCHABLE GENERATION, BUT 20% STILL GOES TO INTERMITTENT GENERATION OR OTHER GENERATION AS WELL.
NOW, HERE'S ANOTHER CHALLENGE OF A BACKCAST.
THIS WAS A 2022 MIX OF RESOURCES.
WE'RE GONNA HAVE A LOT MORE BATTERIES ON THE SYSTEM AS WE GO FORWARD.
YOU SHOULD EXPECT A DECENT AMOUNT OF THESE REVENUES TO GO TO BATTERIES.
BUT THIS WAS TAKING THE EXISTING MIX OF RESOURCES AND CHANGING THE DYNAMICS.
SO WE, WE, AGAIN, DID NOT IMPOSE SOME ERCOT JUDGMENT ON THE MIX OF RESOURCES IN THESE YEARS.
SO I'M GONNA GO BACK NOW AND JUST, SO, UH, IN OUR MORE MILD YEAR, WE HAD ALMOST 500, UH, MILLION DOLLARS OF, UH, INCREASED TOTAL REVENUE.
AND IN THE ACTUALLY SCARCER, UH, UH, SUMMER, WE HAD SLIGHTLY LESS.
AND THAT'S, UH, OUR, OUR ESTIMATE IS THAT THAT'S BECAUSE THERE'S MORE OBSERVATIONS THAT ARE ABOVE THE 20, UH, AND THE 10 IN THAT RANGE THAT, THAT WE WERE LOOKING AT.
OKAY? SO AGAIN, UH, OUR PREFERRED SOLUTION OR OUR RECOMMENDATION FOR THE BOARD, UH, TO ADOPT IS THAT WE DO A MULTI-STEP FLOOR, UH, WHERE FROM 3000 TO 6,500, THE FLOOR BE $20.
AND FROM 6,500 TO 7,000, THE FLOOR IS, UH, $10.
THIS IS ONLY FOR ONLINE RESOURCES.
SO HERE'S WHERE THE RUCK, UH, PART COMES IN.
BECAUSE THE ADDER ONLY APPLIES TO ONLINE RESOURCES, WE ARE CREATING AN INCENTIVE TO SELF COMMIT WHEN THAT DIDN'T EXIST IN THE PAST THAT WE BELIEVE WILL IMPROVE RUCK.
WE WERE UNABLE BECAUSE IT'S A BEHAVIORAL CHANGE.
WE WERE UNABLE TO DO ANY PARTICULAR ANALYSIS TO BE ABLE TO TELL YOU IT WILL.
ALL I CAN TELL YOU IS THE INCENTIVES ARE IMPROVING.
IF I, IF I WANT, UH, A SHARE OF THIS, UH, APPROXIMATELY 500 MILLION I NEED TO BE ONLINE, UM, THOSE INCENTIVES ALIGN WITH REDUCING RELIABILITY UNIT COMMITMENT.
UM, LIKE I SAID BEFORE, UH, WE BELIEVE IT ALIGNS WITH, UH, THE COMMISSION LOOKING TO TARGET RESOURCES THAT ARE THERE WHEN WE ARE HAVING SCARCITY.
SO, UH, THIS ALSO, THIS PROPOSAL ALIGNS WITH, UH, THAT, THAT GOAL THAT WE HEARD.
UM, SO THAT, THAT'S OUR TAKEAWAY.
THAT'S HOW WE KIND OF PACKAGE THIS TOGETHER.
SO THAT'S THE ERCOT, UH, PROPOSAL.
THERE IS, UM, UH, EXPECTATION, I BELIEVE FROM THE BOARD THAT THERE WOULD BE A RECOMMENDATION FROM R AND M, BUT THIS, UH, ULTIMATE PROPOSAL NEEDS TO BE RECOMMENDED BY THE BOARD.
ONE OTHER PROCEDURAL THING I WANT TO SHARE WITH YOU IS THE ULTIMATE DECISION HERE LIES WITH THE COMMISSION.
SO WE WOULD TAKE, UH, WHAT ULTIMATELY IS RECOMMENDED AND FILE AT THE COMMISSION.
UH, THE, THE RECOMMENDATION, WE BELIEVE THAT, UM, UH, COVERS THE ASSIGNMENT THAT WE RECEIVED, BUT THE COMMISSION,
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UH, WILL WEIGH THE POLICY CONCERNS AND, AND MAKE A DECISION AS, UH, THEY'RE CHARGED WITH BY THE STATE.SO, UM, I'M HAPPY TO ANSWER ANY QUESTIONS THAT YOU MIGHT HAVE, AND, UH, PLEASE LET ME KNOW WHAT YOU'D LIKE TO KNOW MORE ABOUT FOR THE DIRECTORS.
ARE THERE QUESTIONS, UH, SPECIFICALLY FOR CANAN? I HAVE, I HAVE A QUESTION.
UM, SO WE KNOW, I, I, I THINK I REMEMBER THESE NUMBERS CORRECTLY, THAT THERE WERE ABOUT 800 MEGAWATTS OF BATTERY ONLINE AT THE END OF 22.
AND I THINK THE NUMBER AT THE END OF 23 IS 8,000, OR THEREABOUTS.
I MIGHT NEED A LIFELINE FROM YOU, BUT
I, I MAY BE EXPECTED IN SOME, THE BATTERY, BATTERY, WHAT'S, WHAT'S IN THE QUEUE FOR INTERCONNECT, BUT WOOD, HE SAYS AROUND 3000.
BUT, BUT WE'RE ON A, YOU KNOW, THIS EXPONENTIAL GROWTH PATH THAT GETS TO THE NUMBER.
YOU DIS YOU MENTIONED 8,000 MAYBE IS WHAT'S IN THE QUEUE FOR, I, I, I THINK THAT'S CORRECT.
HAVE WE TRIED TO MODEL WHAT WOULD HAPPEN OR HOW MUCH OF THAT 500 MILLION INCENTIVE WOULD GO TO BATTERIES IN THAT SCENARIO? I REALIZE IT'S NOT WHAT YOU WERE TRYING TO DO IN THE BACKCAST, BUT IT'S, UH, SO, SO WE HAVEN'T, AND THERE'S SEVERAL COMPLICATING ISSUES WITH TRYING TO MODEL THAT.
UM, SO, UH, THE, THE, THE PRIMARY ONE THAT I WOULD SHARE WITH YOU IS BATTERIES TEND TO BE LIMITED DURATION RESOURCES.
AND IN FACT, BY COMMITTING AND TURNING ON, THEY MAY MOVE THE TIMING OF WHEN WE HIT THESE SCARCE TIME PERIODS.
UM, AND BY DOING THAT, UM, THEY MAY OR MAY NOT BE ABLE TO REALLY, UH, IMPACT THIS ANALYSIS.
THE OTHER THING THAT BATTERIES DO IS, UM, THEY HAVE TO MANAGE THEIR STATE OF CHARGE CURRENTLY, AND THEY TEND TO OFFER, UH, SIGNIFICANTLY ABOVE, UH, UH, THE, THE FLOOR THAT WE'VE SET.
NOW, REMEMBER, THE FLOOR IS AN ADDER MM-HMM.
UM, BUT TO MANAGE THAT STATE OF CHARGE, UH, THEY, UH, OFTEN, UH, OFFER HIGHER THAN THAT SO THAT THEY'RE GETTING DISPATCHED.
SO THEY MAY BE IN THE RECHARGE CYCLE INSTEAD OF A DISCHARGE CYCLE, SEE? CORRECT.
CANON, I THINK ONE OF THE WAYS TO EXPRESS YOUR NUMBERS, WHICH I DIDN'T SEE, I MEAN, WE TALKED ABOUT 400 ON THE BACKCAST, 499 MILLION IN A, A SLACK YEAR AND 490 MILLION IN A, IN A MORE CHALLENGED YEAR.
BUT WHEN YOU LOOK AT THE PERCENTAGES, THEY'RE PRETTY DE MINIMALS.
I MEAN, FOR 2020, THE PERCENTAGE IS ABOUT FOUR PER, LESS THAN 4%, UH, IN TERMS OF TOTAL OVERALL MARKET IMPACT.
AND WHEN YOU LOOK AT 2022, WHICH IS A TIGHT YEAR, IT'S ONLY ONE AND A HALF PERCENT.
SO TO THE EXTENT THAT SOMEBODY WERE TO YELL ABOUT $500 MILLION OF INCREASED COST, I THINK IT'S IMPORTANT TO FRAME IT AS IT'S ONLY ONE AND A HALF PERCENT TO ASSURE RELIABILITY.
AND THAT RELIABILITY HAS IMMENSE VALUE.
JUST SOMETHING THAT'S A, MY 2 CENTS WORTH ON YOUR ANALYSIS, THAT THAT'S AN EXCELLENT POINT.
UM, THAT, I MEAN, WE ARE, WE ARE ON THE MARGINS HERE AND NOT, UM, UH, MOVING RELATIVE TO THE TOTAL MARKET SIZE, HUGE AMOUNTS OF DOLLARS AROUND, UM, I THINK, UH, I THINK YOUR POINT'S WELL TAKEN KAAN, UH, WELL, FIRST OF ALL, VERY GOOD ANALYSIS AS USUAL, WHICH IS, YOU KNOW, THANK CREDIT TO THE TEAM.
ONE IS, AGAIN, WITH RESPECT TO STORAGE RESOURCES, I WOULD REALLY RECOMMEND THAT WE TALK ABOUT, UH, MEGAWATT HOURS, BECAUSE YOU HAVE, OF COURSE, THE, THE NAMEPLATE VALUE, BUT ALSO THE DEPLETION RATE.
SO WHENEVER WE LOOK AT BATTERIES, THAT'S A BIG ISSUE.
IT'S, THAT NUMBER IS VERY TRICKY.
AS YOU SAY, IT MAY JUST MOVE THE PEAK LATER IN THE EVENING OR SOMETHING LIKE THAT.
SO IT'S, WE, WE NEED TO UNDERSTAND THE VALUE OF THAT, FIRST OF ALL.
NUMBER TWO, WITH RESPECT TO THE LETTER FROM, UM, UH, CONNECT.
UM, IS IT TOO LITTLE, TOO MUCH? I MEAN, IT'S ALWAYS VERY DIFFICULT TO GET THAT RIGHT.
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HOW WOULD THIS, THESE RESOURCES THAT WE WANT TO STAY ONLINE CUZ BASICALLY TO PRESERVE SOME PLANTS FROM RETIRING, I BELIEVE THIS IS THE MAIN GOAL OF THIS AS I SEE IT, UM, HOW MANY OF THOSE WOULD BE AFFECTED BY THE EPA MEASURES? UM, AND WITH RESPECT TO NOX? SO THE NUMBER I REMEMBER BY THAT IS IMPACTED BY, I BELIEVE YOU'RE REFERRING TO THE CASPER, UH, UH, ADDITIONS WAS, UH, 6,000 MEGAWATTS PABLO OR WOODY.DO Y'ALL REMEMBER WHAT, WHAT THAT WAS? IT'S ABOUT 6,500 MEGAWATTS.
SO, UH, AND, AND, UH, THIS WILL ON THE MARGIN HELP SOME OF THOSE, BUT I, I CAN'T PROMISE THAT WOULD IMPACT POSITIVELY ALL OF THEM.
IT, UH, AGAIN, THE, THE INCREMENTAL REVENUE IS, IS, UM, RELATIVELY SMALL WHEN YOU THINK ABOUT, UH, LARGE PLANTS.
UM, I, I DO WANNA RESPOND TO ONE OTHER THING.
I ACTUALLY FORGOT TO BRING THIS UP.
UM, ERCOT STAFF WOULD PROPOSE THAT WE BRING, UH, ANNUAL ANALYSIS ON HOW THIS IS PERFORMING BOTH, UM, TO THE BOARD.
AND, UH, WE ALREADY DO ANALYSIS FOR, UM, THE COMMISSION, UH, ON A EVERY OTHER YEAR BASIS.
SO IF YOU THINK ABOUT THIS GOING IN, PROBABLY IN THE SEPTEMBER OCTOBER TIME PERIOD IN 2023, WE WOULD PROPOSE TO BRING AT THE END OF 2024, UH, A REPORT ON, UH, HOW THIS PROGRAM IS, UH, PROGRESSING, BECAUSE THERE'S PROBABLY NOT GONNA BE ENOUGH OBSERVATIONS IN 2023.
JEFF, JULIE CANON, THANK YOU FOR QUICKLY PUTTING TOGETHER WITH YOUR TEAM A POSSIBLE BRIDGE SOLUTION TO ADDRESS RELIABILITY.
UH, MY QUESTION IS KIND OF BUILDING ON CARLOS'S QUESTION.
UH, WHAT HAVE YOU HEARD FROM OTHER CONSUMER GROUPS BESIDES THAT ONE CONSUMER ABOUT THEIR KEY CARE ABOUTS RELATED TO THE BRIDGE AND HOW HAVE YOU ADDRESSED IT IN YOUR SOLUTION? SO, UM, THE CONSUMER GROUPS, UH, FILED A, UH, A LETTER INTO TO TACK AND THEIR, UH, PREFERRED ALTERNATIVE WAS, UH, TO DO AN, A NEW ANCILLARY SERVICE.
UM, AND, UH, AND, AND THAT'S CONSISTENT WITH OTHER POSITIONS THAT THEY'VE TAKEN.
THE ISSUE FOR US WITH THAT WAS THAT, UM, EXPERIENCES SHOWING US THAT IMPLEMENTING A NEW ANCILLARY SERVICE IS APPROXIMATELY A THREE YEAR PROJECT.
AND THAT DIDN'T SEEM TO MEET THE TIMELINE OF, OF THE BRIDGE SOLUTION.
UM, SO, UH, THAT, I THINK THAT THAT WAS, THAT WAS IN THEIR SET OF COMMENTS.
I THINK THEY HAVE CONCERNS ABOUT, UH, PAYING, UH, $500 MILLION MORE, UH, A YEAR.
UM, THERE WAS OTHER DISCUSSIONS WHERE, UH, SOME PREFERENCES WERE EXPRESSED SIMILAR TO, I THINK, OMS CONCERNS WHERE THEY WOULD PREFER TO MOVE.
AND, AND THIS WAS NOT FILED JUST DISCUSSED AT TAX, SO I DON'T WANT TO CLAIM THAT THAT'S THE CONSUMER POSITION, BUT SOME CONSUMERS EXPRESS THE PREFERENCE FOR, UM, MORE OF THE REVENUE COMING AT THE VERY, UH, EDGE OF O R D C, CLOSER TO 3000 MEGAWATTS OF RESERVES, OR 4,000 MEGAWATTS OF RESERVES, BECAUSE THAT GIVES INTERRUPTABLE LOAD A CHANCE TO, UH, UH, AVOID THE, THE CHARGES.
THE CHALLENGE THERE IS THAT IF YOU MAKE THE, UM, THE ADDITIONAL REVENUE THAT CLOSE TO THE EDGE, THE COMMITMENT, UH, INCENTIVE GOES AWAY.
AND THAT WAS, UM, THE DISCUSSION THAT WE HAD, UH, WITH, UM, WITH TAX STAKEHOLDERS.
UM, I WOULD, YOU KNOW, IT'S DIFFICULT FOR ME TO, TO SAY EVERYTHING THAT, ALL THE CONCERNS THAT THE, UH, UH, CONSUMER REPRESENTATIVES EXPRESSED.
UM, I THINK I, I WOULD ENCOURAGE YOU TO ASK THE TACT REPRESENTATIVE AS WELL ON, ON THAT, BUT, UM, I, I, I, THEY DID FILE SOMETHING, SO I, FROM THAT, I, I CAN READ WHAT THEY, WHAT THEY SAID IN THAT LETTER.
UM, THE REST OF IT WAS MORE DISCUSSIONS AND EXPLORATION OF, OF OPTIONS, CANON.
I MEAN, I WOULD THINK THAT, UM, THIS INCREMENTAL REVENUE, THE GENERATORS WOULD LIKELY USE IT FOR MAINTENANCE.
SO, SO IT SHOULD BE DRIVING RELIABILITY
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AS WELL.UM, BUT ALSO, I GUESS MY QUESTION, WOULD THIS HELP THE RETAILERS AND, AND UTILIZING THE O RDC FROM THE STANDPOINT THAT IF THEY HAVE FIXED PRICE CONTRACTS, THIS ISN'T NECESSARILY A CHANGE OR MAKING IT DIFFICULT TO PASS THROUGH, THIS WOULD ACTUALLY BE ABLE TO PASS THROUGH AND NOT PUT STRESS ON THE RETAILERS NOW.
SO THE RETAILERS FELT EXTREMELY STRONGLY THAT, UM, WE NEEDED TO OPERATE WITHIN THE CURRENT MARKET DESIGN AS MUCH AS POSSIBLE.
SO THAT WAS THIS, UM, KIND OF POINT WE HAD, UM, AT THIS VERY LAST BULLET.
UH, SO WHEN, WHEN WE WENT, UH, TO THE, TO AND STARTED OUR WORKSHOPS, UH, WE WERE THINKING ABOUT OTHER, UM, OTHER, UH, OPTIONS THAT WERE NOTICEABLE MARKET DESIGN CHANGES.
IN OTHER WORDS, THERE'S THIS WHOLE NEW STREAM OF REVENUE BEING PROPOSED AND, UM, THAT, UH, BOTH, UM, PURE RETAILERS AND EVEN GENERATORS THAT HAVE A RETAIL BUSINESS FELT REALLY STRONGLY THAT THAT WAS VERY DISRUPTIVE BECAUSE THEY HAD ENTERED INTO A THREE YEAR CONTRACT AND THERE IS THIS KIND OF NEW CHARGE THAT WOULD, WOULD HIT THEM VERSUS THIS WORKED WITHIN THE EXISTING, UH, ENERGY ONLY MARKET.
AND, UH, THEY WERE ABLE TO A, HEDGE IT AND, UH, AND B IT WORKED WITHIN THEIR EXISTING CONTRACTS.
BEFORE TURNING TO THE COMMISSIONERS, COORDINATED YOU WITH ANY COMMENTS? YEAH, JUST A QUICK QUESTION ON THE, UM, THE VALUE FOR THE 500 MILLION.
CAN YOU TALK A LITTLE MORE ABOUT, DO WE HAVE TO GO THAT HIGH? COULD IT BE A LOWER NUMBER? COULD WE LOOK AT IT HALFWAY THROUGH AND SEE HOW IT'S GOING OR ANYTHING LIKE THAT? SO, UH, UH, I THINK, UH, THE NUMBER IS, UH, IS, IS EASILY CHANGEABLE.
UH, I THINK THAT'S, UH, SO, SO IT'S POSSIBLE, UH, TO, TO CHANGE THAT.
UM, AGAIN, THE 500 MILLION CAME FROM THE E THREE ANALYSIS THAT SHOWED THAT THAT ADDITIONAL AVERAGE INCREMENTAL REVENUE WAS NEEDED IN THE MARKET, AND IT WAS NEEDED TO BE FOCUSED, UH, SOMEWHERE.
UM, I THINK THAT GETS YOU TO SOMEPLACE, UH, SOMEPLACE SLIGHTLY LESS RELIABLE, BUT ALSO LESS COSTLY TO THE SYSTEM.
UM, A AGAIN, UM, I AM NOT, UH, I BELIEVE BEHAVIORAL CHANGE WILL BRING THIS 500 MILLION DOWN, BUT I'VE BEEN WRONG BEFORE ABOUT GUESSING AT HOW BEHAVIORAL CHANGES ARE GONNA HAPPEN.
SO, UH, UH, WE ABSOLUTELY COULD ALSO, OR IN ADDITION, EXAMINE HOW THIS IS GOING AND MAKE CHANGES, UH, AFTER, AFTER THAT KIND OF EVALUATION AS WELL.
WHEN, WHEN YOU SAY BEHAVIORAL CHANGE, I THINK YOU'RE REFERRING TO ON THE LOAD SIDE, PRIMARILY A ACTUALLY BOTH.
SO, UM, THERE'S THIS INCENTIVE BECAUSE THE ADDER IS ONLY FOR ONLINE RESOURCES.
THERE IS THIS INCENTIVE TO OVERCOMMIT ON, ON THE SIDE OF GENERATORS.
NOW, I THINK THEY WILL ULTI OVER TIME CONVERGE ON AN OPTIMAL, BUT THERE, EVERYBODY'S GONNA BE GUESSING WHAT EACH OTHER DOES, AND THERE IS A RISK THAT YOU'LL MISS OUT ON, ON THE PREMIUM IF YOU, UH, YOU KNOW, UH, IF EVERYBODY, IF TOO MANY UNITS, MORE UNITS THAN ERCOT REALLY NEEDS COMMITS.
UM, IF YOU UNDER COMMIT, YOU MIGHT MISS OUT ON, UH, SIGNIFICANT REVENUE.
SO THAT'S GOING TO, I THINK, TAKE SOME ITERATION BEHAVIORALLY TO GET TO AN EFFICIENT, OPTIMAL PLACE.
UH, AND CERTAINLY LOAD BEHAVIOR ALSO HAS A, A FACTOR THERE CAN, FOR THE COMMISSIONERS, UM, OPENING THE FLOOR TO YOU FOR QUESTIONS FOR CANON AS WELL, CANON KENAN IN, IN YOUR VIEW.
UM, AND I'LL, AND I'LL FRAME IT THIS WAY, AND I, I THINK IT'S IMPORTANT FOR THE COMMISSIONER TO SORT OF OPEN UP TO A DEGREE WITHOUT PRE PREJUDGING ANY ISSUE, BUT TO HELP IDENTIFY, UH, PROBLEMS THAT WE AS INDIVIDUAL COMMISSIONERS WOULD LIKE THE BOARD AND ERCOT STAFF AND STAKEHOLDERS TO SEEK TO ADDRESS.
I, FOR ONE, AND I BELIEVE WE ALL DID, WE, WE SIGNED ONTO THE PHASE TWO BLUEPRINT, WHICH, UH, CONCURRED WITH COMMISSION STAFF'S ANALYSIS THAT WE HAVE A TWO-PART RELIABILITY PROBLEM.
WE HAVE AN OPERATIONAL FLEXIBILITY
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PROBLEM WITHIN THE ERCOT SYSTEM, AND THEN WE HAVE A RESOURCE ADEQUACY PROBLEM LONG TERM.UM, RESOURCE ADEQUACY STAFF RECOMMENDED THE PCM TO SOLVE FOR THAT, WHICH WE ENDORSED.
AND SO THAT IS STILL MY POSITION, THAT PHASE TWO RESOURCE A ADEQUACY SHOULD BE ADDRESSED BY, UH, THE PERFORMANCE CREDIT MARKET, UH, BEING ESTABLISHED.
BUT IN TERMS OF OPERATIONAL FLEXIBILITY, IT, IT APPEARS THAT THIS BRIDGE HELPS TO TRY TO SOLVE FOR THAT KAAN.
WOULD YOU AGREE WITH THAT? UH, I, I WOULD, I MEAN, AND WE'RE SPEAKING ABOUT THIS RELIABILITY UNIT COMMITMENT YES, SIR.
SO THE WAY THIS ADDRESSES THAT IS IT CREATES AN ADDED INCENTIVE TO BE ONLINE MM-HMM.
SO WHAT IS CURRENTLY HAPPENING OPERATIONALLY IS, UM, ERCOT, UH, IS LOOKING AT THINGS PRETTY CONSERVATIVELY, UH, FROM A RELIABILITY STANDPOINT.
AND WE WILL, UH, UH, OPERATE AND, AND COMMIT RESOURCES THAT DON'T SELF COMMIT BASED ON THE, UH, CONCERNS AND THE RISKS THAT WE FACE.
THIS HOPEFULLY INCENSE GENERATORS TO SELF COMMIT MORE, WHICH WOULD LEAD TO LESS COMMITMENT BY ERCOT, WHICH IS THIS RELIABILITY UNIT COMMITMENT ACTIVITY THAT WE, WE PURSUE.
WHICH, WHICH IN YOUR VIEW, IS ONLY BECOMING MORE PREVALENT, UH, BECAUSE RENEWABLE PENETRATION IN THE SYSTEM IS INCREASING AND WILL INCREASE FOR THE FORESEEABLE FUTURE, CAUSING EVER GREATER RAMPS ON THE SYSTEM.
AND THUS, ERCOT HAS TO PROCURE EVER GREATER QUANTITIES OF ANCILLARY SERVICES LOCKING UP IN THE ANCILLARY SERVICE MARKET, THE MAJORITY OR BULK OF OUR FLEXIBLE GENERATION UNITS.
IS THAT CORRECT? I'M, I'M GONNA ASK FOR HELP FROM DAN, BUT, UH, THAT IS, UH, A MATERIAL PART OF THE ISSUE.
I WOULD SAY IN ADDITION TO THAT, IT'S THE UNCERTAINTY AROUND WHAT'S GOING TO COME FROM INTERMITTENT RESOURCES AND LOAD, UH, AND THEN OUR DESIRE TO PROTECT THE ANCILLARY SERVICES IN CASE SOMETHING DOES HAPPEN.
DAN IS NODDING AND SAYING, I, I GOT THAT.
AND THAT BY DEFINITION IS AN EMERGENCY CONDITION WHICH WE WANT TO STAY OUT OF, CORRECT? THAT'S CORRECT.
SO, UM, AS, AS A RESULT TO MEET OUR CONSERVATIVE OPERATIONS, WHICH WE WANT TO CONTINUE, WE WANT TO STAY OUT OF EMERGENCY SITUATIONS THAT IS IN THE PUBLIC INTEREST ACCORDING TO THE COMMISSION, WHEN WE'VE AFFIRMED THAT RUCKS HAVE HAD TO INCREASE TO COPE WITH THE, UH, THE INCREASES IN BOTH RENEWABLES AND ANCILLARIES.
SO THOSE ARE TIED IN YOUR VIEW? YES.
UM, NOW THIS IS GONNA BE A PIECE, UH, THIS BRIDGE MECHANISM IS A COMPE A PIECE TO A FRAMEWORK IN YOUR VIEW TO HELP DECREASE THE MARKET BASED SIGNALS, UM, THAT DETERMINE RUCKING.
AND WHAT I WOULD ALSO ADD IS, UM, YOU KNOW, THE PCM ALSO HAS BENEFITS TO REDUCING POTENTIALLY RUCK, UM, BECAUSE AGAIN, RESOURCES HAVE TO COMMIT TO CAPTURE THOSE, UH, UH, PC HOURS MM-HMM.
UM, IT, UH, IS PROBABLY NOT, NOT AS EFFECTIVE, UH, BUT IT IS, UH, DOABLE WITH THE TOOLS THAT, THAT WE HAVE ON, ON THE SYSTEM.
SO, I, I, I GUESS THE THING I WOULD SAY IS, UM, THE WAY I LOOK AT IT, ONCE PCMS IN PLACE, WE PROBABLY NEED TO LOOK AT ALL THE INCENTIVES FOR GENERATORS TO SELF COMMIT AND SEE IF WE NEED AN UNCERTAINTY PRODUCT STILL, LIKE THE IMM IS RECOMMENDED, OR, UH, OTHER, OTHER ENHANCEMENTS, UH, ON THE ENERGY SIDE TO MAKE SURE THAT WE'RE GETTING, UH, UH, THE RIGHT SET OF INCENTIVES TO GET THE BEHAVIOR THAT WE WANT FROM RESOURCE OWNERS AND NOT KIND OF DRAGGING THEM INTO THE MARKET WHEN, UH, THEY'RE, THEY'RE NOT PREPARED TO, TO BE THERE.
SO, SO IN, IN YOUR VIEW, THIS WOULD GO AWAY ONCE PCM GOES LIVE, BECAUSE AGAIN, WE'RE INCENTING CAPACITY DRIVEN OUTCOMES, CORRECT? I, I WOULD SAY WE WOULD REEXAMINE THIS OKAY.
UH, I WOULDN'T SAY IT ABSOLUTELY, OR ALL OF IT GOES AWAY.
THERE MAY BE REASONS WHY YOU WANT TO KEEP, UH, AN ASPECT OF IT, BUT I
[00:35:01]
THINK YOU WANNA LOOK AT O R D C IN TOTAL, UH, ONCE PCMS IN PLACE, AND YOU MAY ULTIMATELY GO, I REALLY LIKE THIS, UH, ONLINE INCENTIVE AND I WANT TO KEEP IT.UM, BUT I THINK WE NEED TO HAVE A KIND OF BROAD CONVERSATION, UH, ABOUT ALL THE PIECES AS THEY COME TOGETHER, UH, IN, IN THE FUTURE.
IN, IN TERMS OF YOUR EXPERIENCE ON THE BACKCAST, THIS IS EASILY MODELABLE, IS IT NOT? BY, BY LOADS AND GIN.
SO IN FUTURE YEARS, AS THEY TAKE A LOOK AT ONE, THE NUMBER OF ANCILLARY SERVICES BEING PROCURED, THE AMOUNT OF RENEWABLE PENETRATION, ONCE WE HAVE A BETTER FIX ON BATTERY PERFORMANCE IN THE SYSTEM, WE CAN MODEL THIS INTO THE FUTURE IN TERMS OF THE REVENUES PRODUCED, GIVEN THE RESOURCE MIX.
SO IT'S, IT'S EASY TO MODEL IT ON A BACKCAST BASIS ON A FORWARD BASIS.
YOU REALLY HAVE TO GO THROUGH AN EXERCISE LIKE E THREE DID, WHERE YOU HAVE TO ASSUME THE MIX OF RESOURCES IN THE FUTURE AND THEN DO SOME KIND OF MONTE CARLO SCENARIOS WHERE YOU'RE COVERING KIND OF THE SPECTRUM OF, OF POTENTIAL OUT OUTCOMES.
AND THEN, YOU KNOW, LOOK AT WHAT'S HAPPENING WITHIN THAT CONSTRUCT.
SO THE GOING FORWARD IS THE HARD PART, UH, BACKCAST, UH, IS, IS EASIER, UH, AND LESS TIME CONSUMING.
AND, AND, UH, YOU KNOW, I HAD UNLIMITED AMOUNTS OF TIME.
I WOULD HAVE, UH, DONE MORE OF A MONTE CARLO TYPE SIMULATION TO ANALYZE, UH, OUR PROPOSAL, BUT THAT WAS NOT AN OPTION FOR US.
AT, AT THE END OF THE DAY THOUGH, DO YOU BELIEVE THAT THIS WILL RESULT IN LESS VOLATILITY ON THE SYSTEM? BECAUSE RIGHT NOW THE SYSTEM IS, IS PRETTY VOLATILE BECAUSE OF RUCK.
SO I, I THINK, UM, IT'LL REDUCE THE VOLATILITY DUE TO RUCK.
I WOULD JUST BE A LITTLE UNCOMFORTABLE TO TELL YOU IT'LL REDUCE VOLATILITY BECAUSE THE OTHER PART OF VOLATILITY IS, UM, SCARCITY AND THE O THE TOP END OF SCARCITY, UH, PRICING IS NOT CHANGED BY, BY THIS MODEL.
UM, SO IT WOULD ONLY KIND OF, UH, REMOVE PART OR SO SOME OF THE RUCK IMPACT ON THAT.
SO, SO MARKET DR DRIVEN VOLATILITY WOULD REMAIN, WHICH IS A KEYNOTE OF THE ENERGY ONLY MARKET, CORRECT.
BUT RUCK INDUCED VOLATILITY WOULD DECREASE.
SO WE'VE GOT ABOUT 10 MORE MINUTES BEFORE WE MOVE TO CAITLIN.
SO COMMISSIONER JACKSON OR COBOS.
UM, I REALLY DON'T HAVE MANY QUESTIONS, BUT IT SOUNDS LIKE, UM, WHAT THE INTENDED GOAL HERE IS WITH THE, THE STAFF RECOMMENDATION IS TO PROVIDE SOME LEVEL OF REVENUE STABILITY THROUGH ADDITIONAL RDC CHANGES THAT WILL DRIVE IMPROVED RELIABILITY, AND THEN ALSO HELP DRIVE GENERATION COMMITMENT, UM, IN ORDER TO REDUCE RUCK IN A MANNER THAT CAN BE IMPLEMENTED EXPEDITIOUS AND TIMELY MANNER ACCORDING TO THE, WHAT YOU'VE HEARD BASED ON OUR DISCUSSIONS AT THE COMMISSION AND, AND AT THE BOARD MEETING, THE, THAT'S CORRECT.
UM, I, I DON'T REALLY HAVE ANY QUESTIONS, AND I KNOW YOU, YOU BRIEFED ME BEFORE THE BOARD MEETING, SO, UM, I THANK YOU.
THANK YOU FOR YOUR WORK ON EXAMINING ALL THE OPTIONS.
I THINK THE POINT THAT, UM, YOU, EXCUSE ME, I THINK THE POINT THAT YOU MADE WITH ME WAS, AND THE QUESTION THAT I HAD IS SOMETIMES WHEN YOU COME UP WITH AN INTERIM SOLUTION, YOU KNOW, THE, THE NATURAL QUESTION IS, WELL, WHY CAN'T WE JUST KIND OF KEEP DOING THIS? AND I THINK YOUR RESPONSE WAS, WELL, THIS ADDRESSES OPERATIONAL FLEXIBILITY, BUT NOT, YOU KNOW, THE SECOND PART OF WHAT YOU KIND OF LAID OUT, WHICH IS RESOURCE ADEQUACY.
AND, UM, I THINK THE OTHER QUESTION THAT WE, WE KIND OF TALKED ABOUT WAS THE UNKNOWN THAT YOU BROUGHT UP ABOUT BATTERIES AND, UM, YOU KNOW, THE OPPORTUNITY GOING FORWARD BECAUSE OF THE FACT THAT YOU'LL, YOU'LL SET SOME METRICS YOU'LL ASSESS AFTER A YEAR, AND THAT THE, THE, THE, THE GOING FORWARD, UM, OPTION CAN BE, CAN BE TWEAKED, UH, DEPENDING ON, YOU KNOW, NOT JUST THAT UNKNOWN, BUT MAYBE SOME OTHER KNOWNS AND THE PA BEHAVIOR THAT YOU, YOU, UH, YOU ADDRESSED.
AND SO I GUESS IN, IN YOUR MIND, UM, YOU KNOW, AS COMMISSIONER KAVOS MENTIONED, UM, YOU KNOW, OUR, OUR OBJECTIVE HERE IS TO MAINTAIN RELIABILITY.
AND SO YOU FEEL LIKE THAT WITH THIS, THIS, UH, BRIDGING SOLUTION GOING FORWARD THAT WOULD ACHIEVE THAT, IT, IT, IT MOVES THAT IN THAT DIRECTION AND BOTH, UH, IT MOVES THE BALL FORWARD IN TERMS OF LONG-TERM RESOURCE ADEQUACY.
[00:40:01]
IN TERMS OF, UH, RELIABILITY UNIT COMMITMENT.BUT WHAT I DON'T WANT TO HIDE IS THAT WE'RE STILL RELIANT ON THE ENERGY ONLY MARKET.
AND IF YOU LOOK AT THE E THREE ANALYSIS, THE VARIANCE IN, UH, REVENUES IS SIGNIFICANT IN AN ENERGY ONLY MARKET.
I MEAN, I THINK THAT'S WHY STAFF RECOMMENDED, UH, A DIFFERENT MODEL, UH, TO YOU.
UM, AND, UH, THIS MAINTAINS THE RUNNING BEHIND THE SCENES IS STILL AN ENERGY ONLY MARKET.
I'VE ONLY TWEAKED, UH, A LITTLE BIT OF IT TO, UH, ADDRESS WHAT, UH, WHERE YOU, WHERE WE BELIEVE YOU WANT TO GO, AND IT KIND OF CHECKED OFF THOSE BOXES, BUT IT'S STILL A ENERGY ONLY MARKET.
AND I THINK I WOULD ADD THAT TO ONE OF, TO THE REASONS WHY YOU MAY OR MAY NOT BE COMFORTABLE WITH THIS AS A LONG TERM SOLUTION.
BUT ON A, ON A SIX MONTH BASIS IN TERMS OF STANDING THIS THING UP, IT'S STILL A MARKET DRIVEN APPROACH RATHER THAN AN ADMINISTRATIVE CONTROL APPROACH, WHICH WE ARE CURRENTLY IN.
IT IS LEVERAGING, UH, MARKET BASED, UH, INCENTIVES, UH, IN LIEU OF ERCOT ORDERING RESOURCES ON, ON THE RUCK SIDE.
BEFORE WE, UH, GO TO CAITLIN, OPEN IT UP TO THE COMMITTEE MEMBERS AND THE OTHER DIRECTORS FOR FINAL QUESTIONS.
AND COURTNEY, YOU JUST REAL QUICK, I KNOW Y'ALL DID A STUDY OF VARIOUS DIFFERENT OPTIONS, AND FROM YOUR POINT OF VIEW AND ERCOT POINT OF VIEW, IS THERE A NEED FOR THE BRIDGE SOLUTION OR IS IT JUST SOMETHING YOU FELT YOU NEEDED TO STUDY AND GIVE US OPTIONS ON? I BELIEVE THAT THERE ARE BENEFITS TO THE BRIDGE SOLUTION, UM, WHILE WE WORK ON WHAT, UH, WHAT ULTIMATELY IS THE LONG TERM SOLUTION TO THE, PARTICULARLY THE RESOURCE ADEQUACY PROBLEM.
BUT ALSO AS, UH, COMMISSIONER MCADAMS IS POINTING OUT THIS RELIABILITY UNIT COMMITMENT, UH, UH, CHALLENGE THOUGH THAT WE FACE.
I HAVE A QUESTION IF WE ASSUME WE WANNA GO FORWARD WITH THIS PROPOSAL, BUT WE STILL HAVE SOME QUESTIONS, LIKE THE FORWARD LOOK AT THE BATTERIES WOULD BE, WE WILLING TO INVEST IN THE MONTE CARLO SIMULATION TO DO A FORWARD LOOKING ANALYSIS.
UM, IT WOULD TAKE, UH, UH, MONTHS, MONTHS TO GET DONE.
AND SOMETHING CERTAINLY, UH, AGAIN, I WAS SAYING WE WOULD LIKE TO, UH, DO MORE ANALYSIS AND REVISIT THIS.
SO THAT'S SOMETHING WE WOULD, UH, BE GLAD TO PURSUE.
CARLOS, YEAH, JUST, UH, CONTINUE TO BE CONCERNED ABOUT RETIREMENTS AND, UH, WHAT TOOLS IT IS THAT YOU HAVE AVAILABLE.
AND WOULD YOU, FOR EXAMPLE, CONTINUE TO HAVE, UH, RMR AS A TOOL, AS YOU SEE UNITS THAT YOU NEED, UM, SIGNALING THAT THEY WILL RETIRE SO THAT THAT TOOL EXISTS TODAY? THE CONTRACTS FOR CAPACITY, AND IF WE SAW A OPPORTUNITY, UH, OR A RELIABILITY NEED, MAYBE IS A BETTER WAY TO SAY IT, IF WE SAW A RELIABILITY NEED FOR US TO EXERCISE THE, A CONTRACT FOR CAPACITY, UH, WE WOULD, UH, DO SO AND, AND WE HAVE IN THE PAST.
SO BEFORE WE LET KENAN OFF THE HOT SEAT, PABLO, DO YOU HAVE ANY COMMENTS? THANK YOU, BOB.
YEAH, I, I THINK THIS HAS BEEN A REALLY GOOD DISCUSSION CUZ IT'S GOTTEN TO THE FOCUS OF WHAT IS THE VALUE PROPOSITION FOR WHAT WE'RE SUGGESTING HERE.
AND IT REALLY COMES DOWN TO IS THE BENEFIT, UH, PERCEIVED BENEFIT OR EXPECTED BENEFIT ON THE RELIABILITY SIDE, UH, BALANCED AGAINST THE COST FOR IMPLEMENTING A SOLUTION LIKE THIS.
WHEN YOU LOOK AT WHAT'S AHEAD OF US AND THE IMPORTANCE OF CONTINUING TO MAINTAIN THE CURRENCY OF ALL OF THE UNITS THAT ARE AVAILABLE TO US FOR THE NEXT SEVERAL YEARS AS WE DEVELOP A LONG-TERM MARKET REDESIGN SOLUTION, WHILE AT THE SAME TIME WANTING TO TRY TO LEVERAGE THE MARKET FOR THE PERFORMANCE OF THOSE UNITS IN A WAY THAT DOESN'T, UM, HURT THEM, WHERE RUCK HAS BEEN, UM, NOTED AS HAVING A, A NEGATIVE EFFECT ON THE OPERATING THE LONG-TERM OPERATING PERFORMANCE OF UNITS BECAUSE IT FORCES MORE STARTS THAN THEY ARE ECONOMICALLY, UH, INCLINED TO DO.
AND SO THIS CREATES A MECHANISM TO ALLOW THE ECONOMICS TO SUPPORT, AS YOU POINTED OUT, CONTINUED MAINTENANCE, CONTINUED INVESTMENT INTO UNITS THAT WOULD HAVE THE BENEFIT OF PERFORMING IN THE MARKET AND DOING SO ON THEIR OWN TERMS, NOT ON, UH, A MANDATED TERM, WHICH IS WHAT RUCK, UH, REQUIRES.
[00:45:01]
I THINK WHEN YOU, WHEN YOU BALANCE THOSE, UM, THOSE PERSPECTIVES, THE, THE PERCEIVED BENEFIT ON THE RELIABILITY AND THE EXPECTED BENEFIT, THE REASONABLY LOW COST AS, UH, AS VICE CHAIR FLORES POINTED OUT, I THINK, UH, IN BALANCE, THIS IS A, A SOLID RECOMMENDATION THAT I THINK ADDRESSES THE INTENT AND OF THE PURSUIT TO UNDERSTAND, ARE THERE OPTIONS TO TRY TO MINIMIZE YOUR RELIABILITY IMPACTS WHILE WE ARE DEVELOPING A SOLUTION THAT'S GONNA TAKE SEVERAL YEARS TO DEVELOP.AND SO I THINK THE TEAM IS AT AN OUTSTANDING JOB OF CONSIDERING ALL OF THOSE FACTORS.
THERE CERTAINLY COULD BE MORE ANALYSIS DONE, WE'LL EVALUATE WHETHER WE CAN DO MORE, UM, PROBABILISTIC ANALYSIS GOING FORWARD AS TO THE EFFECT THAT OTHER RESOURCES COMING INTO THE SYSTEM WOULD HAVE.
I THINK THAT'S GOOD USE OF TIME AND EFFORT SO THAT WE CAN CONTINUE TO EVOLVE THIS TOOL IN A WAY THAT REALLY DELIVERS ON ITS INTENDED PURPOSE AND IN THE OPTIMAL, IN THE OPTIMAL COST.
SO, UM, I, I APPRECIATE, UH, THE TEAM'S, UH, EFFORTS HERE AND I APPRECIATE THE DISCUSSION AND THE FEEDBACK FROM THE COMMITTEE.
AND I'LL MAKE SURE TO PASS THAT ON TO THE TEAM.
UH, I'LL LET YOU GO HAVE SOME WATER AND REST UP BEFORE WE ATTACK YOU AGAIN,
[4.2 Technical Advisory Committee (TAC) Recommendation to Committee]
NEXT UP IS TAC CHAIR, VICE CHAIR CAITLIN SMITH'S PRESENTATION.I UNDERSTAND THAT CAITLIN'S ALSO GONNA SHARE SOME OF HER TIME WITH ERIC GOFF, SO WE'LL MOVE TO CAITLIN'S DISCUSSION.
I'M THE VICE CHAIR OF THE TECHNICAL ADVISORY COMMITTEE, AND WE ARE KIND OF FOLLOWING ERCOT PRESENTATION, UM, AS YOU CONSIDER BRIDGING OPTIONS, SAME PROCEDURE AND SAME CONSIDERATIONS FOR YOU GUYS.
WE JUST WANTED TO TAKE THE OPPORTUNITY TO SHARE TAX RECOMMENDATION, IF YOU'D LIKE TO CONSIDER THAT.
UM, SO WE DID, WE CONSIDERED, UH, WHAT, WHAT ERCOT JUST PRESENTED IN THEIR ANALYSIS.
AND WE DID TAKE A VOTE ATTAC AND WE VOTED TO RECOMMEND THE O RDC CHANGES THAT, THAT KENAN JUST DESCRIBED.
THERE WERE SIX OPPOSING VOTES, AND I THINK YOU GUYS HAVE ALREADY NOTED THE, THE CONSUMER OPPOSITION THROUGH SOME COMMENTS IN A LETTER YOU'VE RECEIVED.
UM, THOSE WERE FROM THE CONSUMER MARKET SEGMENT.
THERE WERE TWO FURTHER ABSTENTIONS FROM THE COOPERATIVE IN THE THE REP SEGMENT AS WELL.
UM, WE ALSO WANTED TO NOTE THAT WE WERE SUPPORTIVE OF A ANOTHER ERCOT RECOMMENDATION, WHICH WAS, UH, THE INDICATIVE PCM, BUT WE JUST DIDN'T FEEL IT KIND OF MET THE REQUIREMENTS OF THESE BRIDGING OPTIONS.
SO WE, WE'VE BEEN REALLY BUSY.
UM, ERCOT BROUGHT THOSE SIX BULLET POINT OPTIONS TO YOU GUYS IN FEBRUARY AT THE FEBRUARY RMC.
AND SINCE THEN ERCOT HELD TWO WORKSHOPS FOR US TO PRESENT THEIR BRIDGING SOLUTIONS.
THEY TOOK STAKEHOLDER COMMENTS, STAKEHOLDERS HAD A VARIETY OF COMMENTS ON THOSE SIX OPTIONS.
UM, SOME, SOME NEW SUGGESTIONS, WHICH I THINK AMOUNTED MOSTLY TO OTHER CHANGES TO THE O R D C.
UM, AND WE HAD SOME VERY ROBUST DISCUSSION AS WE CONSIDERED THESE.
WE REALLY TRIED TO FRAME THEM AND ALSO WHAT ERCOT PRESENTED.
SO CONSIDERING, YOU KNOW, INCENTIVIZING NEW GENERATION, KEEPING MA MAINTAINING EXISTING GENERATION AND THEN FURTHERING KIND OF THE COMMISSION GOALS OF THE PCM, WE, WE REFERENCED, OR ERCOT REFERENCED THE E THREE THREE STUDY AND GETTING TO THAT 500 MILLION NUMBER.
UM, AND WE ALSO REALLY CONSIDERED WHAT WOULD NOT, YOU KNOW, DERAIL IMPLEMENTATION OF A FINAL SOLUTION AND BE EASY TO IMPLEMENT.
UM, AFTER THOSE WORKSHOPS THAT WERE ERCOT LED, WE HAD TWO ADDITIONAL TAC MEETINGS.
AND AT THE FIRST OF THOSE ADDITIONAL TECH MEETINGS, ERCOT PRESENTED THE RECOMMENDATION THEY JUST PRESENTED.
UM, WE WERE ABLE TO NARROW THOSE INITIAL SIX BRIDGING OPTIONS DOWN.
AND THOSE WERE BASED ON, AGAIN, WHAT I SAID, THE, THE KIND OF INCENTIVIZING NEW GENERATION, UM, MAINTAINING EXISTING EASY TO IMPLEMENT, FURTHERING THE PCM COMMISSION GOALS.
AND ALSO, YOU KNOW, WHAT WE HAD A ROBUST DISCUSSION ON JUST NOW ABOUT, UH, RUCK, WE, WE KIND OF FELT WE NEEDED TO DO SOMETHING MARKET-BASED TO GET TO THOSE OUTCOMES THAT ARE CURRENTLY ACHIEVED THROUGH RUCK.
UM, SO WE NARROWED THOSE OPTIONS DOWN TO THE O RDC THAT ARE CUT JUST PRESENTED, AND THEN THE ADDITIONAL ANCILLARY SERVICES, WHICH AMOUNTED TO WHAT THE, THE CONSUMERS PROPOSED IN A NEW ANCILLARY SERVICE, SIMILAR TO AN UNCERTAINTY PRODUCT.
UM, AND THEN AGAIN, WE ALSO HAD GENERAL SUPPORT FOR AN INDICATIVE PCM, BUT THAT THAT'S BASICALLY PUBLISHING WHAT THE PCM PRICES WOULD BE.
AND SO WE DIDN'T FEEL THAT PROVIDED A BENEFIT FOR MAINTAINING EXISTING RESOURCES AT THIS TIME.
AND THEN IT ALSO IS NOT KIND OF MINIMAL IMPLEMENTATION.
IT WOULD REQUIRE ACTUALLY FLESHING OUT HOW THAT PCM WOULD LOOK WHEN IMPLEMENTED.
[00:50:04]
AND SO ERCOT WENT THROUGH THIS, I, I DON'T THINK I'LL TALK THROUGH THIS.THIS WAS OUR, OUR RECOMMENDATION.
UM, WE DID HAVE ERCOT RUN SOME ADDITIONAL ANALYSIS ON O R D C CHANGES, UM, AND WHAT, WHAT WE REQUESTED THEY RUN, WE'RE BACKING INTO THAT 500 MILLION NUMBER, BUT HAVING THE, THE STEP ONE BE A LOWER LEVEL OF RESERVES AND THE 6,000, ACTUALLY THE 4,000.
AND THEN THE OTHER REQUEST WAS BACKING INTO THAT 500 MILLION IN REVENUE, BUT GETTING THERE THROUGH A HIGHER VOL.
AND KIND OF WHAT WE FOUND WAS IT, IT CHANGES A LITTLE BIT THE DISTRIBU DISTRIBUTION OF NEW REVENUES BETWEEN, YOU KNOW, NEWER GENERATION AND OLDER GENERATION OR MORE WIND VERSUS MORE GENERATION.
SO I THINK THE CONSENSUS WAS AROUND SORT OF STICKING WITH O RDCS OR ERCOT SPECIFIC STEP CHANGES, UM, AS A WAY TO THO THOSE LEVELS KIND OF WORKING IN THE SAME WAY CONSERVATIVE OPERATIONS WORK.
SO GETTING THAT MARKET BASED OUTCOME FOR WHAT WE USE RUCK FOR RIGHT NOW, AND THEN ALSO KIND OF GETTING THE RIGHT KIND OF GENERATION ON AT THE RIGHT TIME.
SO INCENTIVIZING MORE OF THAT DISPATCHABLE IN THE TIMES YOU NEED IT.
UM, I DO HAVE, WE DO HAVE CONSUMERS HERE TO, TO SPEAK IF YOU'D ALLOW THAT.
UM, BUT I LAID OUT THE CONCERNS THEY EXPRESSED IN INTACT.
THEY, THEY FILED SOME COMMENTS AND I KNOW YOU GUYS RECEIVED A LETTER AS WELL.
UM, SO THE, THE MAIN KIND OF, THEY, THEY DID PRESENT AN ALTERNATIVE TO THE O RDC CHANGES AND THEN SOME SWEEP, SOME TWEAKS TO THE O RDC CHANGES AS WELL.
THE ALTERNATIVE WOULD BE THAT ADDITIONALLY AND SORRY, SERVICE, IT'S BEEN TALKED ABOUT A LOT HERE, NOT THE LEGISLATURE, SIMILAR TO, UM, AN UNCERTAINTY PRODUCT, THE D R S, AGAIN, I THINK THAT'S SOMETHING THAT WOULD OTHER MEMBERS FOUND TO NOT BE A APPROPRIATE BRIDGE OPTION BECAUSE IT'S NOT QUICKLY IMPLEMENTED.
UM, AND THEN WE DID CONSIDER SOME OTHER O R D C OPTIONS.
UM, AS I SAID, WE HAD ERCOT RUN THE OTHER KIND OF BACKCAST LEVELS GETTING TO THE 500 MILLION REVENUE, BUT TRIGGERING THE, THE HIGHER REVENUES OF O RDC AT 4,000 MEGAWATTS INSTEAD OF 6,500.
UM, AND THEN BY CHANGING THE VAULT INSTEAD OF DOING THOSE STEP FLOORS.
AND SO THAT WAS A CONSUMER REQUEST AS WELL.
AND THEN THE THIRD REQUEST FROM CONSUMERS WAS FOR MORE TRANSPARENCY.
AND SO KIND OF KNOWING WHERE THESE REVENUES ARE GOING, UM, I THINK THERE ARE SOME CONCERNS ON THE OPPOSING SIDE DUE TO CONFIDENTIALITY, YOU KNOW, EXISTING FEDERAL REPORTING REQUIREMENTS, UM, AND IT BEING REALLY HARD TO KIND OF ATTRIBUTE WHERE THE REVENUE IS GOING SPECIFICALLY.
UM, AND AS ERCOT INDICATED, I THINK THEY, THEY ARE ACCOMMODATING THAT REQUEST.
THEY CURRENTLY DO AN EVERY OTHER YEAR REPORTING TO THE COMMISSION, AND THEY HAVE SAID THAT THEY WILL DO AN EVERY YEAR REPORTING ON PERFORMANCE.
I'LL ALSO NOTE, BECAUSE SHE DOESN'T HAVE A PRESENTATION HERE AT THE I M M REQUESTED MORE TRANSPARENCY MEASURES AND, AND CONTINUED EVALUATION OF THOSE FLOOR LEVELS AND HOW WE GOT THERE.
AND I WILL LET CONSUMERS SPEAK IF YOU GUYS ARE OPEN TO THAT.
WE HAVE ERIC GOFF ON BEHALF OF CONSUMERS.
I SERVE ON T AS THE RESIDENTIAL CONSUMER.
I SERVE AT THE PLEASURE OF THE PUBLIC COUNCIL.
UM, AND SO I'M A CONSUMER VOICE ATTACK.
UM, I WANTED TO POINT OUT A FEW THINGS FOR YOUR CONSIDERATION.
UH, HAPPY TO ANSWER QUESTIONS.
UH, FIRST OF ALL, A 10 OR $20 FLOOR, UH, AS AN ADDER ON ODC PRICES IS NOT SOMETHING THAT CONSUMERS CAN RESPOND TO.
IT MERELY SERVES TO INCREASED COST.
SO WE WOULD PREFER AND ALREADY SEE CHANGE, UH, THAT HAD FEWER LARGER ADDERS, UH, RATHER THAN MANY SMALLER ADDERS BECAUSE CONSUMERS THAT ARE ABLE TO, TO HAVE DEMAND RESPONSE, WHICH IS NOT ALL OF THEM, BUT SOME COULD DECOMMIT RATHER THAN HAVING TO COMMIT GENERATORS IN EVERY, IN MANY HOURS OF, OF THE AIR.
SO, UM, WE, UM, THINK THIS IS WELL EXPRESSED BY THE HOME CONNECT LETTER, WHICH IS A, A RETAILER THAT, UM, ACTUALLY OFFERS RESIDENTIAL DEMAND RESPONSE PROGRAMS AND PROVIDE THEIR EXPERTISE IN THE LETTER TO YOU.
UH, SECOND, WE SECONDLY, WE THINK THERE ARE BETTER WAYS TO HANDLE THE RUCK ISSUES.
UH, AND WE'RE NOT, UH, CERTAIN THAT THIS WILL ADDRESS THE RUCK ISSUES, UH, ALTHOUGH WE'RE HOPEFUL THAT IT WILL OBVIOUSLY, UH, WE, WE ALL THINK THAT THERE'S TOO MUCH RUCK HAPPENING IN THE SYSTEM REGARDLESS OF OF SEGMENT.
[00:55:01]
GREAT WAY TO HANDLE RUCK, UM, IS AN NPR THAT CONSUMERS RECENTLY FILED THAT WAS ENDORSED BY THE MARKET MONITOR THAT NPR IS 1 1 72.UM, THIS REDUCES THE MOTIVATION THAT EXISTS TODAY FOR, FOR GENERATORS TO WITHHOLD THEIR CAPACITY FROM THE MARKET IN ORDER TO GET RUCKED HAVE A GREATER, WITHOUT A GREATER REVENUE CERTAINTY AND THE OPPORTUNITY TO MAKE MONEY WITHOUT TAKING A RISK OF, OF NOT, OF LOSING MONEY.
SO WE THINK 1172 WILL HELP WITH THAT AND PROVIDE THE INCENTIVES THAT GENERATORS NEED IN ORDER TO, UM, REDUCE THE RS RATHER THAN TRYING TO MOVE MONEY AROUND IN SOMETHING A WAY THAT MAY OR MAY NOT WORK.
UM, WE ALSO ASK, UM, ASK ERCOT IF THEY CAN JUSTIFY THE $500 MILLION REVENUE TARGET.
UM, THERE'S NOT A PARTICULAR JUSTIFICATION FOR THAT.
IT WAS, UH, THE OUTPUT OF THE E THREE REPORT, BUT THE E THREE REPORT RECOMMENDED STRUCTURAL CHANGES AND NOT A REVENUE TARGET.
UM, AND SO WE THINK IT'S IMPORTANT, UH, THAT YOU CONSIDER WHETHER OR NOT IT, IT MIGHT BE BETTER TO CHOOSE A, UM, AN OPTION THAT HAS A LOWER REVENUE AMOUNT.
UM, AND NOTE THAT THE SLIDE THAT YOU HAD UP EARLIER SHOWED TWO OR THREE, UH, FLOORS IF YOU WANT TO GO IN THE DIRECTION THAT ERCOT RECOMMENDED THAT HAVE A LOWER REVENUE TARGET THAT YOU COULD CHOOSE AS, AS THOSE OPTIONS.
UM, MANY OF THE CONSUMERS ALSO LIKE THE, ANOTHER ANCILLARY SERVICE LIKE CAITLIN SUGGESTED AND COMMAND DISCUSSED.
WE ACKNOWLEDGE THAT ER ARCHIVE HAS STATED THAT IT WOULD TAKE THREE YEARS TO IMPLEMENT THAT.
UM, AND SO THEREFORE, TECHNICALLY, UM, IMPLEMENTING THAT NEW ANSWER RATE SERVICE IN IN ITS ENTIRETY WOULD, UH, FALL OUTSIDE OF THE BOUNDS OF HAVING A SHORT TERM PROJECT THAT YOU CAN IMPLEMENT IN THE SCOPE OF A, UH, BRIDGE SOLUTION.
HOWEVER, WE BELIEVE THAT YOU CAN, UM, ANNOUNCE INTENTIONS TO PROCURE A PRODUCT LIKE THAT ARE SIMILAR TO THAT IN THE FUTURE, WITHIN THAT SAME TIMEFRAME.
IT MIGHT TAKE A FEW MONTHS TO DEVELOP THE EXACT PROCUREMENT ANNOUNCEMENT, BUT A PROCUREMENT ANNOUNCEMENT OF A CERTAIN AMOUNT OF A CERTAIN CATEGORY OF FINANCIARY SERVICES, UM, WOULD MOVE MARKETS, UM, IN THE NEAR TERM BECAUSE, UM, ORCA IS PROJECTING AN INCREASED DEMAND FOR RESERVES.
AND SO WE, WE THINK IT'S NOT TRUE TO STATE THAT ANCILLARY SERVICES COULDN'T SERVE AS THE BRIDGE SOLUTION BECAUSE YOU COULD MAKE A, A PROJECTION OF YOUR FUTURE DEMAND FOR THOSE SERVICES WITHOUT FULLY DEVELOPING THE PROGRAM AND ALL THE IT SOLUTIONS.
THAT SAID, UH, THAT CONCLUDES MY REMARKS.
I'M HAPPY TO ANSWER ANY QUESTIONS.
I JUST WANNA REEMPHASIZE THAT THE $500 MILLION IS NOT A MAGIC NUMBER AND, AND YOU COULD CHOOSE TO TARGET ANOTHER MEMBER.
UH, QUESTIONS FOR EITHER CAITLIN OR ERIC? BILL.
ERIC, THANKS FOR BEING HERE TODAY.
I'M, UM, WANT TO LOOK AT A SENTENCE THAT THE OM LETTER INCLUDED THAT WAS THAT, UM, THE PROPOSAL THAT HAS BEEN, UH, PROPOSED TODAY WOULD REDUCE VOLATILITY.
AND SO MY QUESTION IS TO YOU, HOW DOES VOLATILITY HELP THE CONS THE RETAIL CONSUMER SEGMENT? THAT'S A GREAT QUESTION.
UM, SO RIGHT NOW, UM, IF YOU WERE TO JUST INCREASE PRICES ACROSS THE BOARD, UM, I'M OVERSIMPLIFYING THE AIR CAP SUGGESTION WHEN I SAY THAT, BUT INCREASED PRICES IN MANY HOURS, UM, IT WOULD JUST LEAD TO INCREASED COST.
A $10 ADDER, A $20 ADDER IS NOT SOMETHING THAT ANY CONSUMER CAN RESPOND TO AND CHANGE BEHAVIOR IN ORDER TO REDUCE THE DEMAND ON THE SYSTEM.
UM, VOLATILITY, UM, DOES HAVE THAT OPPORTUNITY FOR, FOR PRICE RESPONSE FOR CONSUMERS THAT ARE ABLE TO DO THAT.
AND SO THERE ARE CONSUMERS IN ALL CLASSES THAT CAN RESPOND.
UM, AND, UM, THAT HOME CONNECT LETTER DESCRIBED THAT YOU, YOU CAN'T JUSTIFY EITHER SHUTTING DOWN AN INDUSTRIAL PROCESS OR A PAYING ASSETS OR CONSUMER TO SHUT DOWN UNLESS THE PRICE IS SUFFICIENTLY HIGH TO WARRANT THAT CHANGE OF BEHAVIOR.
AND SO WE WOULD PROPOSE THAT IN THE HOURS THAT YOU ACTUALLY NEED, UH, REDUCED CONSUMPTION, UM, IN ORDER TO AVOID AN ISSUE, CONSUMERS ARE, ARE WELL SITUATED TO AVOIDING PAYING THOSE COSTS AND THEREFORE CAN LEAD TO A LOWER OVERALL SYSTEM COST IN THE SAME LEVEL OF RELIABILITY.
UM, THAT VOLATILITY ON AN AFFORD BASIS ALSO INCREASES THE FIXED PRICE PRO PRICES THAT CONSUMERS ARE WILLING TO PAY THAT WANT TO AVOID THAT VOLATILITY RATHER THAN RESPOND TO IT.
AND SO THAT INCREASE IN FIXED PRICE PRODUCTS COST HELPS WITH GENERATOR REVENUE BECAUSE IT INCREASES THE VALUE OF THEIR SERVICE.
NOT SURE I AGREE WITH THAT, BUT I THANK YOU.
[01:00:01]
IT.OTHER QUESTIONS FOR EITHER CATON, CAITLIN OR ERIC? MR. CHAIRMAN, MAY I RECOGNIZE THAT CHAIRMAN PETER LAKE FOR THE PURPOSES OF OUR OPEN MEETING TODAY? THANK YOU.
SO WE ACTUALLY HAVE SOME ADDITIONAL TIME NOW TO DISCUSS THIS.
UM, BILL, YOU HAVE A, I HAVE A QUESTION FOR CAITLIN, UH, BEFORE SHE GOES TO SIT DOWN, UH, IN YOUR COMMENTS, YOU SAID, OR AT THE T YOU SAID THAT, UH, THE I M M ALSO REQUESTED TRANSPARENCY MEASURES? YEP.
CAN YOU, UH, ELABORATE ON THAT? YEAH, I, I DON'T KNOW IF SHE'S HERE.
THANKS FOR MAKING THE PODIUM SHORTER.
UM, I, I THINK SHE WANTED CONTINUED EVALUATION OF THE APPROPRIATENESS OF THE FLOOR OF THE, THE SECOND FLOOR.
AND SO ONE OF THE OPTIONS WE HAD ERCOT EVALUATE IN BETWEEN TAC MEETINGS WAS CHANGING THE STEP ONE FLOOR, UM, FROM, UH, OH, I DON'T KNOW IF IT'LL DO THIS NOW, FROM THE 6,500 TO 4,000, SO LOWER LEVEL OF RESERVES.
AND I THINK SHE WANTED MORE TRANSPARENCY AROUND, IS THIS FLOOR DOING WHAT WE WANT IT TO, RIGHT? IS IT JUST ADDING INCREASED REVENUES TO A GREATER AMOUNT OF HOURS WITHOUT MAYBE INCENTIVIZING RUCK? AND I THINK SHE WANTED TO EVALUATE THE PERFORMANCE, MAKING SURE THAT THE BENEFITS TO THAT THRESHOLD, UM, COVER THE COST OF IT.
I PRESUME SHE'S TALKING ABOUT AFTER IT'S IMPLEMENTED.
HOW DO YOU DO THAT WITH ANY ACCURACY BEFORE IT'S IMPLEMENTED OTHER THAN THE MODELING THAT THE TEAM HAS ALREADY DONE? YEAH, I SEE KAAN READY TO JUMP IN.
UM, AND I, I DON'T KNOW IF CARRIE'S HERE, BUT I I KNOW THAT SHE, SHE WAS KIND OF WANTING SOME MORE JUSTIFICATION AROUND THAT NUMBER, I BELIEVE.
I BELIEVE RALPH'S HERE, UH, OR I THOUGHT HE WAS GONNA BE HERE, BUT, UH, MY UNDERSTANDING IS THE REQUEST IS TO DO SOME OF THE ANALYSIS THAT WE TALKED ABOUT, UH, YOU KNOW, AFTER WE'VE HAD SOME E EXPERIENCE WITH, WITH THIS.
UM, BUT, UH, IF ANYBODY FROM THE IMM IS HERE AND, UH, WOULD LIKE TO CORRECT ME, I'M HAPPY, HAPPY TO STAND CORRECTED, BUT SEEMS TO ME THAT IT'S COMPLETELY HYPOTHETICAL INCLUDE, SO WE'RE TALKING ABOUT PROSPECTIVE TRANSPARENCY AND NOT ANYTHING TO DO WITH THE STUDIES THAT WE'VE DONE THUS FAR.
YEAH, I MEAN, I, AND AND I, I AGREE WITH THE IMM THAT THIS IS SOMETHING NEW AND, AND, UH, DIFFERENT.
UM, AND, UH, I, I CAN TELL YOU BECAUSE OF ALL THE BEHAVIORAL ASSUMPTIONS SITTING IN THE BACKGROUND ON OUR ANALYSIS, THAT, UH, THINGS ARE NOT GONNA COME OUT EXACTLY THE WAY WE MODELED IT.
AND THAT'S WHY WE ARE ALSO COMMITTED TO REPORTING ON THIS AND GIVING BOTH THE BOARD AND THE COMMISSION THE OPPORTUNITY TO MODIFY PARAMETERS ON THIS TO MEET, UH, THE PUBLIC POLICY GOALS THAT THEY HAVE.
I THINK THAT'S, THAT'S A ABSOLUTE KEY COMPONENT WHEN YOU INTRODUCE SOMETHING NEW INTO THE MARKET.
WOULD QUARTERLY REPORTING BE MORE APPROPRIATE THAN ANNUAL OR BIANNUAL? SO I, I'M, I'M OPEN TO, UH, CRITIQUE, UH, I THINK HAVING LESS THAN A YEAR'S OBSERVATIONS.
UH, IT'S AGAIN, O R D C, SO IT'S VERY DEPENDENT ON SCARCITY, AND I THINK SOME QUARTERS YOU'RE NOT GONNA HAVE ANY AND OTHERS YOU ARE.
UM, SO I'M ACTUALLY OPEN TO, UH, TO ANY, UH, SUGGESTIONS, BUT SINCE WE DID IT ON AN ANNUAL BASIS ON THE BACKCAST, WE WERE THINKING WE WOULD JUST ROLL THIS IN TO OUR NORMAL SCHEDULED REPORTING ON O R D C TO THE COMMISSION.
UH, AND, AND THAT ALL SEEMED TO DOVETAIL TOGETHER NICELY, BUT I AM COMPLETELY OPEN TO, UH, ANY, ANY ALTERNATIVE THAT THE BOARD OR THE COMMISSION MIGHT PREFER.
SO THE, WE'RE NOT, THERE'S NO STATEMENT THAT WE'VE HAD A LACK OF TRANSPARENCY.
IT'S JUST A BETWEEN, SHE'S ASKING THE IMMS ASKING FOR, UH, ADEQUATE TRANSPARENCY MOVING FORWARD.
I, I UNDERSTAND YOUR POINT ABOUT ANNUAL, BUT IT SEEMS TO BE, WELL, THIS WILL BE A STANDING ITEM ON ALL OF OUR AGENDAS FOR THE FORESEEABLE FUTURE.
MORE IS GONNA BE BETTER THAN LESS, I THINK, FOR A YEAR OR TWO ANYWAY.
YEAH, UNTIL WE GET COMFORTABLE, WE'LL, WE'LL BE A STANDING ITEM FOR EACH R AND M MEETING.
CAN I ASK ONE MORE QUESTION TO CANAN? UM, THE 500 MILLION IN ROUND NUMBER TARGET I NOW UNDERSTAND COULD POSSIBLY BE OFFSET BY A REDUCTION IN RUCK REVENUE.
DO YOU HAVE A ORDER OF MAGNITUDE
[01:05:01]
IDEA ABOUT THAT, OR IS THAT SOMETHING WE NEED MORE TIME TO ANALYZE? SO, UH, IT'S IMPORTANT TO REMEMBER THAT RUCK IS, UH, COST PURE COST BASED COMPENSATION.SO, UM, WHILE THE, THE, UH, REVENUE, UH, THAT THE CHARGE OF RUCK MIGHT GO DOWN, ULTIMATELY FOR ME THAT IT, IT SHOULD BE THE, UH, LEAST COST, UH, COMMITMENT BECAUSE ALL YOU DO IS MAKE THEM HOLD TO COST YOU IN FACT CLAW BACK, UH, EXCESS REVENUES, UH, ASSOCIATED WITH, WITH RUCK.
SO, UM, THERE, THERE WILL BE AN OFFSET.
UM, UH, AND I, I, I DON'T HAVE HAVE A NUMBER, BUT I WOULD EXPECT THIS METHODOLOGY TO BE MORE EXPENSIVE THAN, THAN USING RUCK.
THE ONLY EFFICIENCY GAIN HERE IS THAT YOU'LL GET A MARKET-BASED RESPONSE TO THE COMMITMENT NEED.
RUCK IS OPERATORS IDENTIFYING THE MOST STRAIGHTFORWARD RESOURCE TO COMMIT THOSE COULD BE A LOT MORE EXPENSIVE, EVEN THOUGH I ONLY COMMIT, UH, COMPENSATE THEM TO COST.
THAT'S WHERE RUT GETS MORE EXPENSIVE BECAUSE, UH, I, I DON'T LET THE MARKET TRY AND SOLVE THE PROBLEM.
I JUST WANTED TO WRAP UP THE IMM POINT.
I THINK I DID CONFLATE SORT OF TWO REQUESTS AND, AND THAT ONE SENTENCE, IT WAS REQUEST FOR TRANSPARENCY AND, AND ALSO THE CONTINUED EVALUATION.
SO I DON'T THINK THERE'S AN AN ASSERT DISSERTATION OF A LACK OF TRANSPARENCY RIGHT NOW, BUT ONE OF THE BIG DISCUSSIONS WE HAD, UM, FROM THE CONSUMERS AND THE IMM WAS CONTINUED TRANSPARENCY GOING FORWARD.
AND, AND I THINK ERCOT IS SINCE COMMITTED TO COMING BACK EVERY YEAR BEFORE IT WAS A REQUIRED BIENNIAL.
SO THAT'S ALREADY BEEN STEPPED UP.
AND THEN THE, ONE OF THE BIG REASONS TECH WENT WITH THE, THE 6,500 MEGAWATTS STEP ONE THAT, THAT ERCOT SUGGESTED, THERE ARE SEVERAL REASONS, BUT I THINK A BIG PART WAS THE, THE RUCK OUTCOMES GETTING THERE THROUGH A MARKET-BASED MECHANISM, AND THEN THE ANALYSIS THAT ERCOT DID ON AROUND THE DIFFERENT VARIATIONS OF RDC FOR US CENTERED AROUND WHERE THE REVENUES WERE GOING, AGE OF RESOURCES, TYPE OF RESOURCES.
AND SO I THINK WE JUST WANNA MAKE SURE IN THAT EVALUATION THAT THAT STEP LEVEL OF THE 6,500 MEGAWATTS IS ACTUALLY GETTING US THE OUTCOMES THAT WE PREDICTED IN THE BACK BACK CAST GOING FORWARD.
CAN I, I JUST WANNA MAKE SURE, UM, UH, WE'RE ALL TALKING THE SAME THING ABOUT THE TRANSPARENCY AND, AND ALL THAT.
SO, UH, ABSOLUTELY HAPPY TO, UH, COME EVERY BOARD MEETING AND GIVE AN UPDATE ON THIS.
BUT IF WE'RE GONNA DO SOME TYPE OF, YOU KNOW, FORWARD LOOKING MONTECARLO ANALYSIS, I DON'T SEE US BEING ABLE TO DELIVER SOMETHING LIKE THAT WITHOUT A YEAR'S WORTH OF DATA.
UH, AND, AND MULTIPLE MONTHS OF WORK ON IT.
IT, SO I WOULD SAY THAT TYPE OF ANALYSIS WOULD COME IN 2024 SEPARATELY, UH, OR IN ADDITION, I'M HAPPY TO REPORT EVERY MONTH ON HOW THE PROGRAM IS PERFORMED.
YOU KNOW, I THINK THAT'S RIGHT KENON, AND I THINK YOU AND PABLO CAN WORK THROUGH THE TYPE OF DETAILED ANALYTICS WE WANT THAT ARE MORE FAR REACHING.
WE'RE WANT WANNA UNDERSTAND ON EACH MEETING JUST THE PROGRESS OF IMPLEMENTATION AND ANYTHING THAT YOU'VE DISCOVERED ALONG THE WAY THAT MAY BE DIFFERENT.
ARE THERE OTHER QUESTIONS OR COMMENTS FOR ANY OF THE PRESENTERS? SO, CHAD,
[4.3 Committee Recommendation to Board]
I BELIEVE WE'VE GOT A, I CAN MAKE A MOTION HERE FOR THE COMMITTEE TO RECOMMEND TO THE BOARD TO ACCEPT ERCOT RECOMMENDATION.IF THAT'S THE WILL OF THE COMMITTEE OR ANY OTHER RECOMMENDATION TO THE BOARD.
ANY, ANY ABSTENTIONS, COURTNEY, ABSTAINING OR RE ABSTAIN? OKAY.
[5. Recommendation regarding Real-Time Market Price Correction – Generic Transmission Constraint (GTC) Calculation Error]
MOVE ON TO AGENDA ITEM NUMBER FIVE, WHICH AGAIN IS CANAN IS GOING TO PRESENT THE RECOMMENDATION REGARDING REAL TIME, REALTIME MARKET PRICE CORRECTION, GENERIC TRANSMISSION CONSTRAINT, CALCULATION ERROR FOLLOWING CANON'S PRESENTATION.THE COMMITTEE WILL BE ASKED TO VOTE ON THIS ITEM.
[01:10:01]
GETTING A BIG DOSE OF ME TODAY AND, UH,UM, SO, UH, THE BACKGROUND ON THIS IS THAT, UM, FROM, FROM TIME TO TIME, ERCOT FINDS ERRORS, UH, THAT THEY, UH, THAT, THAT WE MAKE, UH, WHEN WE'RE RUNNING THE MARKET.
AND, UM, THAT TRIGGERS A SET OF ANALYSIS ON OUR END TO SEE IF WE NEEDED TO CORRECT, UH, PRICES.
AND WE HAVE FOUND, UH, ERROR THAT, UH, HITS THE MATERIALITY THRESHOLD TO BRING TO THE BOARD A, UH, PROPOSED PRICE CORRECTION.
THE BOARD, UM, WOULD ULTIMATELY DECIDE IF WE MOVE FORWARD WITH THAT.
AND TODAY WE'RE LOOKING AGAIN FOR A RECOMMENDATION TO THE BOARD, UH, ON, UH, WHETHER OR NOT TO MOVE FORWARD WITH THIS PRICE CORRECTION.
UM, SO THE PROBLEM AT HAND WAS THAT, UH, AS, UH, INTERMITTENT RESOURCES, UH, GROW ON THE SYSTEM, WE HAVE BEEN USING, UH, MORE AND, AND MORE, UH, WHAT ARE CALLED GENERIC TRANSMISSION CONSTRAINTS.
AND, UH, WE MANAGED ONE OF THOSE, UH, INCORRECTLY.
SO A GENERIC TRANSMISSION CONSTRAINT IS IN ONE DIRECTION, BUT, UM, UH, SOMETIMES THESE, UH, THE FLOW ACTUALLY REVERSES AND GOES IN THE OTHER DIRECTION.
AND WHEN THAT HAPPENS, WE ARE SUPPOSED TO TURN OFF THE, UH, CONSTRAINT OR DISABLE IT.
UM, AND THAT IS WHAT DID NOT HAPPEN IN THIS INSTANCE.
SO, UM, THE, THE, THE DETAILS OF THE, OF THE CONSTRAINT ARE LISTED HERE.
UM, AND I, I, I DON'T THINK I NEED TO, UH, JUST, UH, SAY EVERYTHING THERE, BUT, UM, UH, THE, UH, OUTCOME IS IF I'M KIND OF KEEPING THIS CONSTRAINT ON THE SYSTEM, BUT THE FLOW HAS REVERSED, PRICES ARE DIFFERENT THAN THEY SHOULD HAVE BEEN.
AND SO THAT IS WHAT TRIGGERED US STUDYING WHETHER IT MET THE MATERIALITY THRESHOLD.
AND, UM, WHEN WE LOOKED AT THAT, UM, SORRY, I'M GONNA GO CUT AHEAD A LITTLE BIT.
UM, WE FOUND THAT THERE WAS A, UH, NOTICEABLE IMPACT ON PRICING.
UM, THE KINDA AMOUNTS THAT WE WERE TALKING, TALKING ABOUT IN THE COUNTERFLOW WAS AROUND, UH, IN, IN THE HUNDREDS OF MEGAWATTS.
UM, SO, UH, BUT THESE NUMBERS DO PASS THAT MATERIALITY THRESHOLD THAT WE HAVE IN THE PROTOCOLS.
SO, UM, AND SO WE IDENTIFIED THE ERROR, WE STUDIED THE RESULT.
UM, UH, WE NOTED THAT IT LED TO, UH, BRINGING A PRICE CORRECTION TO THE BOARD.
I THINK IT'S IMPORTANT TO NOTE THAT THIS IS, UH, THE SECOND TIME THAT THIS HAD HAPPENED.
UM, SO, UH, THAT LED TO US, UH, ALSO AUTOMATING, UH, THIS ISSUE.
BUT I'VE KIND OF TALKED TO, UH, TALKED TO THE TEAMS THAT ARE TRYING TO MANAGE THIS.
AND, UH, ULTIMATELY, UM, IN THIS INSTANCE THAT COUNTERFLOW HAPPENED SO FAST THAT, THAT THEY DIDN'T CATCH IT.
SO THERE, THERE, THERE WAS A PROCESS IN PLACE TO DISABLE THE GTC AND, AND DO A, A, A REVIEW AND, AND A MANUAL PROCESS, UM, WITH CHECKS AND, AND, AND BALANCES.
BUT THE SPEED WITH WHICH THE COUNTERFLOW HAPPENED DID NOT ALLOW THEM TO CATCH IT.
AND AT THAT POINT, UM, UH, EVERYBODY DECIDED THAT SOMETHING AUTOMATED NEEDED TO BE IN PLACE SO THAT THIS DOES NOT HAPPEN, UH, IN THE FUTURE.
UM, CAN I ASK A QUESTION ON THAT? OF COURSE.
IS IT THE OPERATOR WHO'S SUPPOSED TO CATCH IT, OR IS IT SOMETHING IN THE SYSTEM THAT'S SUPPOSED TO CATCH IT? UH, IT'S, IT'S A TEAM THAT STUDIES, UH, STUDIES THE SYSTEM AS I UNDERSTAND IT.
DAN, DO YOU WANNA ADD ANYTHING TO THAT? YEAH, SO I GUESS THE, THE, IT'S REALLY, IN THIS CASE, IT'S THE OP ONE OF THE OPERATORS THEY WOULD, THEY WOULD NEED TO CATCH.
AND BECAUSE IN THIS PARTICULAR INSTANCE, THIS IS THE ONLY PLACE ON THE SYSTEM THAT WE HAVE BIDIRECTIONAL ONE GTC THIS DIRECTION AND ONE IN THE OTHER DIRECTION BECAUSE THERE WAS AN OUTAGE.
NORMALLY, THE, THE, THE LIMITS ARE SEVERAL HUNDRED
[01:15:01]
MEGAWATTS, BUT CAUSE OF AN OUTAGE, IT WAS DOWN IN THE A HUNDRED MEGAWATT RANGE.SO AS THE WIND CHANGED IT SWING, SWING IT AROUND.
AND SO BECAUSE IT WAS SO SMALL, UH, IT SWUNG IT AROUND.
AND SO THEY DIDN'T NOTICE THAT IT HAD GONE FROM, OR I GUESS THEY NOTICED, BUT, YOU KNOW, A HUNDRED MEGAWATTS IN ONE DIRECTION TO A HUNDRED MEGAWATTS IN THE OTHER DIRECTION.
AND SO, LIKE KAAN SAID, WE'VE AUTOMATED IT AND GIVEN THEM MORE SIGNALS.
SO IN CASE, UH, FOLKS DIDN'T HEAR THAT, UM, UH, DAN WAS SAYING THAT AN OPERATOR IS ACTUALLY WATCHING THIS, UM, IN, IN ANSWER TO THE, TO THE QUESTION,
IT, SO IT, I THINK THERE'S A AUTOMATED REPORT THAT, THAT, THAT POPS UP.
DO I HAVE THAT RIGHT? JP? KEN, WHAT? OUT? AND DAN, FEEL FREE TO CORRECT ME.
SO I, I DON'T THINK, DO YOU HEAR ME NOW? YES.
UM, DAN, FEEL FREE TO CORRECT ME.
WHAT WE ARE SAYING IS IT'S NOT LIKE THE AUTOMATICALLY THE CONSTRAINT WILL SWITCH FROM EXPORT TO IMPORT IS THAT IF THE CONSTRAINT IS LEFT ON THE FLOW WILL NOW HAVE A POSITIVE OR NEGATIVE DIRECTION.
SO IT WON'T DO THE OPPOSITE WHAT WAS INTENDED SO EARLIER, BECAUSE THE CONSTRAINT IS DEFINED, THE CAR TRANSMISSION CONSTRAINT HAS A SOURCE AND SYNC IN ITS DEFINITION, YOU DON'T, YOU DIDN'T NEED THAT VALUE.
SO IT IS KIND OF IMPLIED, BUT NOW WE ARE SAYING THAT, OKAY, WE CHANGE OUR REQUIREMENTS A BIT TO SAY THAT EVEN IF THE CONSTRAINT IS THERE AND ENABLED, EVEN IF THE FLOW CHANGES, IT'LL NOT DO THE OPPOSITE OF WHAT IS INTENDED.
SO THAT'S, THAT'S A SOFTWARE CHANGE.
SO YOU STILL NEED AN OPERATOR TO SWITCH ON AND OFF THE CONSTRAINT BECAUSE IT'S THE CONSTRAINTS GOING TO SCATTER IS VERY WELL MANAGED.
JP WOULD ANOTHER WAY TO SAY THAT, BE THAT WHEN THE FLOW REVERSES, NOW THERE'S A SOPHISTICATED ENOUGH, UH, UH, WAY TO PRICE SUCH THAT IT DOESN'T ADVERSELY IMPACT THE PRICE.
SO, UM, JUST FOR REFERENCE, THIS IS THE STANDARD BY WHICH WE BRING, UH, PRICE CORRECTIONS TO THE BOARD.
UM, SO YOU SEE 2%, UH, OR, UH, ALSO GREATER THAN 20,000 OR 20%, ALSO GREATER THAN, UH, 2000.
UM, AND, AND THAT THOSE ARE ORS, UH, AND I SAID 'EM AS ANDS.
SO IT'S, OR, UH, AND LIKE I SAID, UH, THE, WE ALSO HAVE A RECORD OF THE COUNTERPARTIES THAT MET THE CRITERIA, UM, OF, OF BOTH SECTIONS.
UM, WE DID ISSUE MARKET NOTICES AROUND THIS.
UH, AND AS JP POINTED OUT, A FIX WAS IN PLACE ON MARCH 2ND.
UM, UH, I'VE ALREADY GONE OVER THESE, THESE AMOUNTS.
UM, AND THIS IS, UH, BEFORE YOU, THERE IS A MOTION TO, UH, I BELIEVE IT'S FOR R AND M TO RECOMMEND TO THE FULL BOARD, UH, THAT WE MOVE FORWARD WITH THE PRICE CORRECTION.
SO A MOTION TO APPROVE THE CORRECTION.
ANYTHING ELSE ON THAT KENON? UH, NO, I THINK, UM, UH, I THINK THE KEY THINGS WERE THAT WE WERE IMPLEMENTING, UH, TAKING MEASURES SO THAT THIS DID NOT HAPPEN AGAIN.
UM, I, THAT THAT'S AN IMPORTANT THING.
UH, THE WHOLE EXECUTIVE TEAM WOULD LIKE TO COMMUNICATE TO THE BOARD.
I GUESS BEFORE WE GO INTO THE COMMITTEE BRIEFS, WE'RE SCHEDULED TO HAVE A 10 MINUTE BREAK.
I'LL ROUND UP AND SAY IF WE CAN GET BACK BY 10 10, WE'LL START THE COMMITTEE BRIEFS.
THIS IS BOB FLEXON RM COMMITTEE CHAIR, HEREBY RECONVENE THIS MEETING.
[6.1 System Planning and Weatherization Update ]
AGENDA ITEM SIX, COMMITTEE BRIEFS WITH WOODY RICHARDSON'S PRESENTATION OF THE SYSTEM PLANNING AND WEATHERIZATION UPDATE AGENDA ITEM 6.1.AFTER THAT, DAVID KOZEL WILL PRESENT THE NEXT ITEM AGENDA, 6.1 0.1, WEATHERIZATION OF WIND AND SOLAR RESOURCES.
WOODY, GOOD MORNING, WOODY RICKEN THIS MORNING.
I'LL GO OVER THE, UH, SYSTEM PLANNING, WEATHERIZATION UPDATE.
UH, WE'VE GOT SEVERAL KEY TAKEAWAYS HERE.
I'LL COVER THOSE AS WE GO THROUGH THESE SLIDES.
UH, UH, TRANSMISSION PLANNING SUMMARY,
[01:20:01]
UM, AS OF FEBRUARY 1ST THIS YEAR, WE HAD, UH, PROJECTS ENERGIZED IN 23, 20 23.TOTALED ABOUT 149 MILLION, UH, 1.5 BILLION LAST YEAR.
SO WE'RE RUNNING A LITTLE BIT BEHIND WHAT WE DID LAST YEAR.
UM, AS OF FEBRUARY 28TH, THE ENDORSED TRANSMISSION PROJECTS TOTALING 380 MILLION TOTAL ENDORSED, UH, 2022 IS 3.3 BILLION.
SO ONCE AGAIN, WE'RE A LITTLE BIT BEHIND WHAT WE WERE.
AND IF YOU LOOK AT THE TOTAL PACKAGE OF PROJECTS THAT ARE IN ENGINEERING, ROUTING, LICENSING, AND CONSTRUCTION RIGHT NOW, UH, THAT'S ABOUT 11.6 BILLION, WHICH IS SLIGHTLY LESS THAN WHAT WE SAW A COUPLE MONTHS AGO.
SO A LITTLE BIT LESS, NOT A WHOLE LOT.
I THINK IT WAS LIKE 11.8 BILLION OR SOMETHING.
SO THE KEY TAKEAWAY HERE IS JUST THAT SLIGHT DECREASE THAT WE'VE SEEN IN SINCE JANUARY, 2023, UM, ELEMENTS SUBMITTED FOR OPERATIONAL MODELING.
SO THIS IS, UH, A MONTHLY STANDPOINT, AND THAT KIND OF GIVES THIS, I ALWAYS INCLUDE THIS SLIDE CUZ IT KINDA GIVES YOU A FEEL FOR WHAT THE GRID IS DOING.
IT'S KINDA LIKE A, A PULSE OR A HEARTBEAT OF, OF A GRID RIGHT NOW, UH, IN MARCH WE SAW TWO MORE THERMAL UNITS ADDED TO THE GRID.
YOU KNOW, THAT'S, AND LAST MONTH WE HAD SIX.
SO BOTH OF THOSE ARE A LITTLE BIT ABOVE WHAT WE NORMALLY SEE ON AVERAGE.
SO THAT'S, THAT'S A GOOD SIGN.
SO THOSE TWO, TWO, UH, THERMAL UNITS BEING ADDED OR IS THE, IS THE KEY TAKEAWAY HERE? ANY ANYTHING, ANY QUESTIONS ABOUT THAT? YES, SIR.
JUST WHAT TYPES OF RESOURCES, WHAT TYPES OF THEY WERE SMALL GTS OKAY, SO SIMPLE CYCLE.
IN FACT, I THINK THEY WERE, WE HAD SIX LAST TIME.
AND THESE TWO ARE SISTER UNITS AT THE SAME PLANT.
UH, FUTURE GENERATION INTERCONNECTION PROJECTS BY FUEL TYPE.
SO THE KEY TAKEAWAY HERE IS THE GENERATION INTERCONNECTION IN INTEREST CONTINUES TO INCREASE.
SO WE'RE, UH, OVER 1300 PROJECTS NOW BEING PROCESSED.
SO THAT MEANS THERE'S 1300 INDIVIDUAL PROJECTS THAT PEOPLE ARE THINKING ABOUT CONNECTING TO THE GRID.
AND WE SEE THAT GO UP EVERY MONTH AND YOU'LL HEAR IN THE BUDGET DISCUSSION LATER, YOU'LL HEAR, UM, YOU KNOW, THIS IS ONE OF THE MAJOR DRIVERS IN, IN THE, IN THE BUDGET DISCUSSION TOO.
AND THIS INCREASE, UH, NOT ONLY DOES IT TAKE MORE PEOPLE TO PROCESS THESE, TO STUDY THESE, BUT AS MORE SMALLER GENERATORS ARE, ARE, ARE INTERCONNECTED, UH, THE MODELING BURDEN AND THE, THE THE CASE BURDEN ALSO GOES UP AS AS, AS THE GRID BECOMES MORE AND MORE COMPLEX.
I DID WANT TO, UH, GO INTO A LITTLE BIT MORE DETAIL ON THIS.
UM, I LOOKED AT THE LAST 60 DAYS, UH, INTERCONNECTION PROJECTS THAT HAVE BEEN SUBMITTED THE LAST 60 DAYS.
SO THIS IS WHAT WE'RE SEEING COME IN.
IF YOU JUST LOOK AT WHAT WAS SUBMITTED IN THE LAST 60 DAYS, UH, AND THE KEY TAKEAWAY HERE IS MOST OF THE NEW INTERCONNECTION PROJECTS AREN'T NOW SOLAR.
THEY'RE BATTERIES AND, UH, DISPATCHABLE GAS TURBINE TAP GENERATION IS STILL VERY, VERY LOW.
BUT, UH, ALMOST, I MEAN, WIND IS IS TAILED OFF QUITE A BIT.
UH, SOLAR IS NOW NOT YOUR LEADING WIND, BUT, UH, BATTERIES ARE NOW.
AND SO THAT'S FROM THE LAST 60 DAYS.
SO THIS IS A GOOD INDICATION OF WHAT THE CURRENT MARKET IS DRIVING PEOPLE TO INTERCONNECT.
SO HOW WOULD THOSE BATTERY PROJECTS BE UTILIZED? IS IT JUST BE PEAK SHAVING OR ANCILLARY OR HOW WOULD THEY BE UTILIZED? YEAH, I MEAN, WHAT, WHAT PORTION OF THE MARKET? ANCILLARY OR PEAK SHAVING OR, WELL, I THINK THE ANCILLARY SERVICES ARE GONNA START FILLING UP WHERE ROOF THAT'S NOT, IT'S A LOT.
SO IF THIS WOULD BE, UH, PROBABLY BE MOST USEFUL IN THIS SUMMER WILL BE MOST USEFUL IN THOSE HOURS WHEN THE SOLAR RAMPS DOWN.
UM, THE SEASONAL ASSESSMENT OF RESOURCE ADEQUACY, THE SARAH, UH, THIS IS A SLIDE TALKING ABOUT THE, UH, THE CHANGE TO A MONTHLY OUTLOOK.
SO IT'LL GO FROM THE S ACRONYM TO THE, UH, MORA ACRONYM R A RESOURCE ADEQUACY OR MONTHLY OUTLOOK FOR RESOURCE ADEQUACY.
UM, IF YOU LOOK, THE, THE PROPOSAL RIGHT NOW IS
[01:25:01]
YOU'LL HAVE, EACH MONTH YOU'LL HAVE A REPORT THAT COMES OUT THAT LOOKS TWO MONTHS IN ADVANCE.UM, THIS WOULD BE THE SCHEDULE HERE.
SO STARTING IN SEPTEMBER OF THIS YEAR, WE WOULD PUT OUT A REPORT FOR THE MONTH OF NOVEMBER.
AND SO IN OCTOBER YOU'D HAVE ONE FOR DECEMBER.
SO THAT'S, THAT'S WHAT, UH, WE'RE TENTATIVELY SCHEDULING RIGHT NOW.
UH, SO THE, THE KEY TAKEAWAY HERE IS THAT THE SARAH REPORT THAT COMES OUT ON A QUARTERLY BASIS, WE'LL MOVE TO A MONTHLY BASIS AND WE'LL BE ABLE TO FOCUS ON THE RISK THAT ARE INHERENT IN EACH MONTH AND NOT SO MUCH ACROSS THE SEASON.
SO ANY, ANY QUESTIONS ABOUT THAT? UH, WE'VE GOT AN UPDATE HERE ON THE RELIABILITY STANDARD WORK AND ON THE VOLL WORK.
SO WE CONTINUE TO, UH, PROGRESS WITH THE RELIABILITY STANDARD.
UH, THE MAIN THING HERE IS OUR INITIAL MODEL RUN RESULTS, INDUSTRY OUTREACH AND COMMISSION DIRECTION IS LEADING TO FURTHER STUDY REFINEMENT AND WE'LL CONTINUE TO, TO BRIEF THE BOARD ON ON ON THAT.
I DON'T HAVE ANY RESULTS TO SHOW YOU THIS MORNING, BUT, UH, WE DO HAVE SOME RE INITIAL RESULTS THAT WE'RE RUNNING BACK THROUGH OUR CONSULTING COMPANY.
ANY ANY QUESTIONS ABOUT THAT? OKAY.
UH, THE VALUE OF LOSS LOAD STUDY THAT, UH, R F P WENT OUT LAST WEEK.
AND SO ONCE WE START GETTING SOME, SOME, UH, RESPONSES BACK TO THAT, WE CAN EVALUATE THAT AND GET THAT UNDERGOING UN UNDERWAY AS WELL.
SO BOTH OF THESE EFFORTS ARE ON TRACK AND, AND MAKING PROGRESS.
UM, LAST, I THINK IT WAS THE LAST BOARD MEETING OR MAYBE THE, THE MEETING BEFORE THERE WAS SOME QUESTIONS ABOUT FORECASTED WIND COMPARISON METHODS.
SO, UH, WHAT WE'VE GOT HERE IS A TABLE THAT COMPARES THE FORECASTED WIND PRODUCTION IN THE SPRINGER WITH VALUES DERIVED FROM ALTERNATIVE METHODS.
AND SO WHAT YOU SEE IS WE'VE GOT THREE WIND ZONES, COASTAL PANHANDLE AND OTHER, WE'VE GOT, UH, DIFFERENT METHODS OF ESTIMATING WHAT THEIR CAPACITY CONTRIBUTION SHOULD BE.
WHEN YOU LOOK AT SOMETHING LIKE THE ERA, SO IF YOU JUST LOOK AT INSTALLED CAPACITY, YOU SEE 37,000 MEGAWATTS, IF YOU LOOK AT EXPECTED CAPACITY, UM, WITH THE HIGHEST GROSS PEAK LOAD HOURS.
AND SO WHAT THIS IS, IT'S A, IF YOU LOOK BACK, UH, 10 YEAR AVERAGE OF THE HIGHEST 20 GROSS PEAK HOURS, HOW MUCH WIND SHOWED UP DURING THOSE HOURS ON AVERAGE.
AND YOU CAN SEE THE 37,000 DROPS DOWN TO ABOUT 15,800 FOR HIGHEST GROSS PEAK HOURS.
HOW DO YOU DO THAT WHEN 10 YEARS AGO THERE WAS ORIGINALLY NO WIND IN THE SYSTEM PERCENTAGE? YEAH, YOU JUST HAVE TO DO IT BY PERCENTAGE.
WHICH ISN'T, IT'S FLAWED BECAUSE WINDS IN NEW PLACES NOW.
UM, IF YOU LOOK AT THE EXPECTED CAPACITY, UH, OVER HIGHEST NET PEAK HOURS, OKAY, THAT'S A LITTLE DIFFERENT.
LOOK, NET PEAK NET PEAK LOAD HOURS ARE, UH, WHEN THE SYSTEM IS THE SCARCITY, NOT NECESSARILY WHEN THE LOAD IS THE HIGHEST.
YOU SEE THAT IT DROPS DOWN EVEN MORE TO 8,700 MEGAWATTS OUT OF THE 37,000.
AND THEN IF YOU LOOK AT THE E LCC METHOD, WHICH IS WHAT WE CURRENTLY USE, DROPS DOWN TO 6500, 64 AND 49.
SO ANY, ANY QUESTIONS ABOUT, ABOUT HOW WE'RE USING THOSE NUMBERS? HOW DOES E LCC DIFFER FROM THE OTHER TWO? I UNDERSTAND THE OTHER TWO.
SO E LCC IS, UM, IF YOU HAVE A GIVEN SYSTEM, JUST TAKE A GIVEN SYSTEM WITH A, WITH A, WITH A RESERVE MARGIN AND YOU HAVE SOME MIX OF GENERATION IN THAT SYSTEM, AND THAT MIX INCLUDES SOME DISPATCHABLE, SOME WINDS, SOME SOLAR INCLUDES EVERYTHING.
AND YOU HAVE, LET'S SAY YOUR RESERVE MARGIN IS EXACTLY 15%.
IF YOU WERE TO, UH, TAKE A HUNDRED MEGAWATTS OF WIND OUT AND REPLACE IT WITH A GAS TURBINE, HOW MANY MEGAWATTS OF GAS TURINE CAPACITY WOULD YOU HAVE TO ADD BACK INTO THE SYSTEM TO REPLACE 100 MEGAWATTS OF WIND? AND THE ANSWER FOR, UM, FOR THIS IS THE E LCC NUMBER.
SO IF YOU, I THINK THE NEXT SLIDE I'VE GOT, YEAH, SO THE E LCC IS 15, SO YOU'D HAVE TO ADD 15 FOUR.
UH, LIKE FOR COASTAL WIND YOU'D HAVE TO ADD 19.14 MEGAWATTS OF
[01:30:01]
DISPATCHABLE GENERATION BACK IN TO GET TO THE SAME RESERVE MARGIN IF YOU TOOK A HUNDRED MEGAWATTS OF WIND OUT.AND SO THIS IS JUST LOOKING AT THE WIND ECCS, NOT THE OTHER ONES, BUT THE ECCS BY REGION YOU SEE COASTAL WIND, PANHANDLED OTHER 19 18, 15 0.8.
SO IT VARIES BY SIGHT, IT VARIES BY REGION.
UM, AND SO WE CALCULATE IN THES AND IN THE FUTURE MORAL, WE'LL ACTUALLY CALCULATE EACH ONE OF THOSE BY REGION AS WELL.
BUT GO BACK TO THAT EARLIER SLIDE.
DOES THAT IMPLY THAT IF YOU ADDED 6400, 6500 MEGAWATTS OF DISPATCHABLE GENERATION IN LIEU OF ALL OF THE WIND IN THE SYSTEM, YOU WOULD HAVE ROUGHLY EQUIVALENT CAPACITY IN THE SYSTEM? YES.
THAT'S, THAT'S WHAT THAT MEANS.
IF YOU TOOK OUT 37,000 MEGAWATTS OF WIND AND ADDED BACK IN 6,500 MEGAWATT OF DISPATCHABLE, THEN YOU WOULD HAVE THE SAME RESERVE MARGIN, EQUIVALENT RESERVE MARGIN, PRETTY STARK.
ANY OTHER QUESTIONS ABOUT THE E L C C STUFF? UH, HERE'S A FOLLOW UP ON THE WEATHER WINTER WEATHERIZATION.
SO WHEN WE GO OUT AND DO AN INSPECTION ON A UNIT, THERE MAY BE SOMETHING THAT'S A LITTLE BIT SHORT IN THE PREPARATION OF THE UNIT AND WE WORK WITH THE RESOURCE ON A CURE PERIOD FOR THEM TO FIX WHATEVER THAT IS.
AND AT THE TIME THAT THIS WAS, WELL, WE DID 774 INSPECTIONS OVER THE DECEMBER, JANUARY, FEBRUARY PERIOD.
IT RESULTED IN 69 CURE PERIODS.
UM, AT THE TIME THIS WAS, THE SLIDE WAS PUT TOGETHER, THERE WERE NINE GENERATION RESOURCES THAT STILL HAD THEIR CURE PERIOD IN PROGRESS.
THAT'S SINCE DROPPED DOWN TO THREE.
AND, UH, THE TSP FACILITIES WITH CURE PERIODS, THERE WERE 33 AND THAT'S DROPPED DOWN TO 20.
UM, BUT I THINK THE KEY TAKEAWAY HERE IS THAT THAT CURE PERIOD PROCESS IS JUST A REALLY EFFECTIVE WAY TO, UH, TO GET EVERYTHING UP TO SHAPE AND WORK COLLABORATIVELY TO DRIVE SYSTEM RELIABILITY.
I THINK THAT'S BEEN A, IT'S A VERY SUCCESSFUL WAY OF, OF, OF ENFORCING THAT STANDARD.
HOW BIG IS THE WEATHERIZATION TEAM NOW? HOW BIG IS THE WEATHERIZATION TEAM? I THINK IN TOTAL WE HAVE A DIRECTOR, A MANAGER, A UH, DATA ANALYST, AND DAVID, IS IT 11 INSPECTORS? DAVID'S GIVING ME NUMBERS BACK THERE.
SO
HEY WOODY, COULD I TAKE YOU BACK TO THE PRIOR SLIDE JUST FOR ONE SECOND BECAUSE JOHN, YOU BROUGHT UP SOMETHING THAT'S IN, IT'S ALWAYS A DISCUSSION AROUND THIS, UH, POINT HERE AND I THINK IT'S REALLY IMPORTANT TO NOTE THAT E LCC IS NOT A FORECAST, RIGHT? IT'S A MODELING NUMBER, UM, AND WE USE IT FOR MODELING AND THEN WE APPLY THIS NUMBER INTO THE SCENARIO ANALYSIS, WHICH THEN CREATES THOUSANDS OF POTENTIAL OUTCOMES BASED ON VARIABILITY IN WIND AND LOAD, WHICH THEN GIVES US A PERCENTAGE OR A PROBABILITY ON WHEN WOULD YOU HAVE, HOW OFTEN WOULD YOU HAVE SCENARIOS WHERE THE LOAD EXCEEDS THE SUPPLY? SO A LOT OF TIMES IT GETS CONFUSED.
WE, OR WE HAVE DISCUSSIONS AROUND THE FACT THAT WHEN WE SAY THE E LCC FOR WIND IS X, BUT YET HERE WE HAVE ALL THESE EXAMPLES WHERE WIND IS SO MUCH HIGHER THAN THAT OR LOWER THAN THAT.
AND SO IT'S, IT'S NOT INTENDED TO EVER BE UTILIZED AS AN EXPECTED FORECAST.
IT'S INTENDED TO DEFINE A MODELING PARAMETER AS WOODY DESCRIBED, THAT ENABLES US TO EVALUATE A RELIABILITY STANDARD.
AND THEN IT'S THROUGH RUNNING THOUSANDS OF SCENARIOS WITH THAT MODELING ASSUMPTION THAT WE THEN COME UP WITH WHAT ARE THE PROBABILITIES AND THE CHANGES IN PROBABILITIES FROM SEASON TO SEASON THAT WE COULD BE IN A LOAD SHED EVENT.
AND THAT'S WHEN WE TALK ABOUT WHEN THOSE INCREASE FROM ONE SEASON TO THE NEXT OR FROM ONE YEAR TO THE NEXT.
IT'S BECAUSE THE RESERVE MARGIN GETS STRESSED BY, UH, CHANGE IN EITHER THE RESOURCE MIX OR THE LOAD ASSUMPTIONS.
AND SO THEN THE PROBABILITIES INCREASE WHEN YOU RUN MULTIPLE SCENARIOS.
BUT I THINK THAT IT'S A REALLY, WE TALK A LOT ABOUT, THES HAS A LOT OF REALLY IMPORTANT, UH, EYES ON IT THAT, YOU KNOW, TO EVALUATE WHAT, CUZ WE'RE COMMUNICATING WHAT WE THINK FROM A RELIABILITY POINT OF VIEW IS GONNA HAPPEN IN THE SYSTEM USING THIS AS A FRAMEWORK, BUT IT'S NOT A FORECAST.
AND, AND WE DON'T EXPECT THESE NUMBERS TO REFLECT HOW THESE RESOURCES ACTUALLY PERFORM ON ANY GIVEN DAY.
THEY REPRESENT AN ASSUMPTION ACROSS AN ENTIRE PERIOD AGAINST THE MODELING NU BASIS THAT THEN WE USE FOR ALL THE PROBABILITIES.
[01:35:01]
PROB SO THIS IS MORE FOR LONG LONGER TERM PLANNING AS COMPARED TO FORECASTING DAY AHEAD OR THE WEEK AHEAD? EXACTLY.IT HAS VERY LITTLE PURPOSE UTILITY IN, IN REAL TIME FORECASTING OF WHAT WE EXPECT TO ACTUALLY HAPPEN, BUT RATHER CREATES A MODELING BASIS FOR LOOKING AT HOW THE SYSTEM IS SET UP.
AND WHERE WE COULD SEE RISKS BASED ON EXTREME VARIATIONS IN THE, IN THE POTENTIAL SCENARIOS AND OUTCOMES.
WE HAVE DETAILED FORECASTS FOR WIND AND SOLAR BY SITE THAT GO OUT SEVEN DAYS.
WOODY, IF YOU GO BACK TO, UH, PAGE SIX FOR A MINUTE, WHAT WOULD THAT CHART LOOK LIKE IF IT WAS EXPRESSED IN MEGAWATTS? FORGET ABOUT THE TIME CONSTRAINT ON BATTERIES, BUT WHAT, WHAT WOULD THAT LOOK LIKE? THE BATTERY PIECE WOULD DEFINITELY BE SMALLER.
UM, THE BATTERY PROJECTS ARE SMALLER, THE SOLAR PROJECTS AND THE WIND PROJECTS ARE PROBABLY, YOU KNOW, 100, 200 THAT, THAT SIZE MEGAWATTS.
MOST OF THE BATTERY PROJECTS ARE ARE SMALLER THAN THAT.
AND THE GAS TURINE WINDS ARE, UH, THEY'RE PROBABLY, YOU KNOW, ROUGHLY THE EQUIVALENT IN SIZE TO THE WIND AND SOLAR AS WELL.
MAYBE A LITTLE BIT SMALLER, BUT YEAH, THE, THE BATTERY IS DEFINITELY GOING.
IF YOU HAD IT IN MEGAWATTS, IT WOULD DEFINITELY BE LESS.
ANY OTHER QUESTIONS ABOUT ANY OF THIS STUFF? NO, AT THE, UH, THE END OF THIS PRESENTATION THEN THE APPENDIX, THERE'S SOME, UH, RELIABILITY STANDARDS USED IN OTHER AREAS.
I WASN'T GONNA COVER THOSE, BUT IF, IF ANYBODY, IT'S JUST USEFUL REFERENCE AS WE TALK ABOUT RELIABILITY STANDARDS OF WHAT OTHER PEOPLE ARE USING IN OTHER PLACES.
AND, UH, YOU CAN CATCH ME AFTERWARDS OR, OR IF YOU GOT QUESTIONS ABOUT SOME OF THAT, WE CAN TALK ABOUT THAT.
UM, I THINK A COUPLE BOARD MEETINGS AGO WE TALKED ABOUT, UM, OR MAYBE IT WAS IN EMAILS THAT WERE TALKING ABOUT THE, UH, WEATHERIZATION OF OF WIND, WIND RESOURCES IN PARTICULAR AND ICING ISSUES AND
[6.1.1 Weatherization of Wind and Solar Resources]
THINGS LIKE THAT.SO DAVID ZEL, WHO'S OUR DIRECTOR OF WEATHERIZATION INSPECTION, HAS DONE SOME RESEARCH AND HE'S GOT SOME INFORMATION HERE TO TALK ABOUT THE, UH, WEATHERIZATION OF OF WIND TURBINES.
SO I'VE, I'VE GOT SOME INFORMATION TO SHARE AND, UH, WELCOME ANY QUESTIONS YOU MAY HAVE.
SORT OF THE KEY TAKEAWAYS THAT, THAT I'D LIKE TO LEAVE YOU WITH ARE THERE, THERE ARE A NUMBER OF THINGS THAT ARE CURRENTLY BEING DONE ON SOLAR AND WIND FACILITIES TO TRY TO KEEP THEM FUNCTIONAL DURING EXTREME WEATHER CONDITIONS.
THERE ARE SOME THAT MAY BE USED IN DIFFERENT CLIMATES THAT ARE NOT USED IN TEXAS BECAUSE IT'S VERY DIFFICULT TO JUSTIFY THEM ON A COST, UH, A COST BENEFIT BASIS.
AND SO, UH, THINGS LIKE HEATED TURBINE BLADES ARE, ARE VERY RARE IN TEXAS, IF THERE'S ANY AT ALL, UH, DUE TO THE INFREQUENCY OF ICING EVENTS.
SO WHAT ARE COMMON, UH, TAKING CARE OF THE ELECTRONICS IS, IS, IS COMMON.
SO YOU'VE GOTTA HAVE H V A C ON THE CONTROL BUILDING BUILDINGS, CONTROL CABINETS, INVERTERS, ET CETERA TO MAKE SURE THAT THEY STAY WITHIN, UM, THEIR PARAMETERS TO OPERATE PROPERLY.
THE HIGH VOLTAGE ELECTRIC EQUIPMENT IS SIMILAR TO ANY OTHER FACILITY, AND SO MAKING SURE THAT IT HAS APPROPRIATE, UH, GAS PRESSURE FOR THE CONDITIONS IS, IS ALSO DONE.
SEASONAL PREPARATION AND TRAINING OF STAFF IS, IS DONE AND IN, IN ALMOST ALL OF OF THESE FACILITIES, BECAUSE THEY ARE REMOTE, TYPICALLY UNMANNED REMOTE MONITORING IS, IS SOMETHING THAT'S DONE SO THAT THEY CAN HAVE A SENSE OF WHAT'S GOING ON SPECIFICALLY FOR WIND.
UH, YOU CAN HEAT UP GEARBOX OIL, YOU CAN, UH, CHANGE OUT THE GREASE OR OILS THAT ARE USED TO, TO LUBRICATE YOUR MECHANICAL EQUIPMENT TO SOMETHING THAT'S LESS VISCOUS SO THAT IT DOESN'T STIFFEN UP AT COLDER TEMPERATURES.
AND THEN THERE ARE CONTROL ALGORITHMS THAT ARE USED TO, UM, TO MODIFY THE PITCH AND YAW THE BLADES UNDER CERTAIN CIRCUMSTANCES THAT CAN ALLOW THEM TO CONTINUE OPERATING WITHOUT GETTING INTO A DANGEROUS CONDITION FOR SOLAR.
WHAT, WHAT'S PRACTICALLY CAN BE DONE THERE? UH, MOST OF THE SOLAR FIELDS IN ERCOT ARE SINGLE ACCESS TRACKING, WHICH MEANS THAT THEY WILL PIVOT DURING THE DAY FROM EAST
[01:40:01]
TO WEST TO FOLLOW THE SUN AT NIGHTTIME.TYPICALLY, THEY PUT THEM INTO A HORIZONTAL POSITION BECAUSE THEN THEY'RE LESS SUBJECT TO BEING LIFTED BY WIND OR, OR DAMAGED BY WIND.
BUT IF YOU KNOW IT'S GONNA, THEY'RE YOU, YOU'RE LOOKING AT SNOW IN THE FORECAST OR PERHAPS FREEZING RAIN, YOU CAN PIVOT THEM AND STORE THEM AT NIGHT IN AN INCLINE POSITION, WHICH WOULD TEND TO ALLOW, UH, THE MATERIAL TO SHED OFF OF THEM MORE EASILY THAN IF THEY WERE LEFT HORIZONTAL.
SO THAT'S ANOTHER COMMON TECHNIQUE THAT'S USED PROBABLY LESS COMMON, IS IF YOU DO HAVE PERSONNEL NEARBY, YOU CAN GET OUT THERE AND BRUSH THESE THINGS OFF.
A A AS YOU CAN IMAGINE, UH, THESE, THESE FIELDS TAKE UP HUNDREDS AND HUNDREDS OF ACRES.
SO, UM, TH I I I WOULD NOT SAY THAT THIS IS COMMON, BUT IT CAN BE DONE.
SO COLD WEATHER TECHNOLOGIES FOR WIND TURBINES, UH, BUT NOT NECESSARILY GETTING INTO THE ICE.
ANTI-ICING ONES A LOT OF THE SAME STUFF THAT I TALKED ABOUT BEFORE, BUT IF YOU, IF YOU WOULD'VE PUT IN NEW EQUIPMENT TODAY, YOU WOULD PROBABLY BUY ONE WITH A HIGHER DUCTILITY STEEL FOR THE TOWER STRUCTURES THAT ALLOWS IT TO, TO NOT STIFFEN UP SO MUCH WHEN IT GETS COLD.
AND IT CAN TAKE THE STRESSES THAT, THAT ARE INDUCED WHEN YOU'RE OPERATING IT BETTER THAN SOME OF THE OLDER STEEL THAT'S BEEN USED.
THE NELLE IS, IS THE AREA WHERE THE GEAR BOX AND THE GENERATOR ARE SITTING BASICALLY AT THE AXIS OF, OF THE, UH, OF THE TURBINE ITSELF.
SO THERE'S A NUMBER OF THINGS THAT YOU CAN DO, UH, THAT, THAT ARE CURRENTLY AVAILABLE AND, AND SOME OF THEM LIKELY MAKE SENSE FOR TEXAS.
WHAT CAN YOU DO TO EXISTING ONES? IT MAY HAVE BEEN INSTALLED A DECADE AGO.
UH, YOU COULD, THERE'S A COUPLE THINGS YOU CAN DO.
PROBABLY THE LAST, UH, TWO BULLETS OR THE MORE REASONABLE ONES.
UH, HEATING WITHIN THE N CELL COULD HAPPEN WITHOUT, UH, DOING A WHOLE LOT OF, OF RETROFIT OR ADDING A WHOLE LOT OF WEIGHT THAT WOULD, UH, CREATE STRUCTURAL PROBLEMS AND CONTROL SOFTWARE MODIFICATIONS, UH, CAN BE UPGRADED AS WELL.
IT'S NOT REALLY FEASIBLE TO REPLACE THE BLADES OR THE GENERATORS IN THE, THE CELLS.
AND IF YOU WANT IT TO REPLACE THE TOWER STRUCTURE ITSELF, IT IT'S PROBABLY NOT VERY FEASIBLE WHEN YOU DO THAT.
YOU'VE GOTTA DO A COMPLETE STRUCTURAL ANALYSIS OF THE ENTIRE SYSTEM, NOT JUST THE TOWER, BUT ALSO HOW IT'S BOLTED DOWN, HOW BIG IS THE CONCRETE IT'S ATTACHED TO, ET CETERA.
AND SO NOT LIKELY THAT THAT'D BE FEASIBLE TO GO IN AND, AND SWAP THOSE OUT.
SO THESE SLIDES ARE, UH, FROM THE AMERICAN METEOROLOGY METEOROLOGICAL SOCIETY AND GIVE YOU A, A COUPLE OF PICTURES OF ICING EVENTS IN THE UNITED STATES.
THE LEFT PICTURE IS THE MEDIAN ANNUAL FREEZING RAIN HOURS, AND THE ONE, THE ONE ON THE RIGHT IS LONG DURATION AND LONG DURATION IS DEFINED AS GREATER THAN SIX HOURS.
SO AS YOU CAN SEE IN BOTH CASES, MOST OF TEXAS IS RELATIVELY IN A, IN A RELATIVELY LOW IMPACT AREA.
THE NORTHEAST, ON THE OTHER HAND, IF YOU ARE INVESTING IN WIND TURBINES IN THAT AREA, YOU MAY HAVE A DIFFERENT COST BENEFIT ANALYSIS THAN YOU WOULD FOR TEXAS.
SO THIS JUST GIVES YOU AN IDEA OF, OF WHY MAYBE IT DOESN'T MAKE SENSE TO DO CERTAIN THINGS IN TEXAS.
SO THESE ARE ANNUAL AVERAGE DAYS OF FREEZING RAIN, UH, BETWEEN THE YEARS 1948 AND 2000.
SO IT'S A LITTLE BIT DATED, UH, BUT IT'S STILL GOOD DATA.
AND WE ALSO, UH, THAT'S THE, UH, THE BLACK LINES ON BOTH OF THOSE MAPS INDICATE, UH, A THREE DAY AVERAGE WHERE THAT LINE IS TWO DAY OR ONE DAY RESPECTIVELY.
AND IT GIVES YOU AN INDICATION OF WHERE THE WIND FARMS ARE AND WHERE THE SOLAR, UH, RESOURCES ARE.
AND YOU CAN SEE THAT, UH, PRETTY MUCH ALL OF THE RESOURCES ARE OUTSIDE OF THAT THREE, UH, DAY AVERAGE BAND.
SO LIKELY ON AVERAGE AS THE YEARS GO BY, UH, THE VAST MAJORITY OF THE WIND AND SOLAR RESOURCES IN TEXAS WILL EXPERIENCE THREE DAYS OR LESS OF ICING EVENTS.
SO WHAT CAN YOU DO ABOUT ICE MITIGATION? IT'S A BIG QUESTION.
WHEN IT HAPPENS, THERE ARE THINGS THAT CAN BE DONE.
UH, YOU CAN ACTUALLY BUY NEW TURBINES TODAY THAT HAVE BLADE HEATING, UH, EMBEDDED
[01:45:01]
IN HEATING ELEMENTS THAT WILL HELP TO, UH, PREVENT THE ICE FROM FORMING IN THE FIRST, FIRST PLACE.OR IF IT DOES FORM, IT WILL MELT IT OFF MORE QUICKLY THAN WOULD OCCUR NATURALLY.
YOU CAN ALSO BLOW HOT AIR DOWN THE CENTER OF THESE BLADES.
ON SOME OF THEM THERE ARE IS PHOBIC COATINGS THAT YOU CAN APPLY TO THE BLADES.
AND AGAIN, UH, REMOTE MONITORING MONITORING IS ALMOST, UH, IF YOU'RE GONNA BUY A NEW TURBINE TODAY, YOU'RE, YOU'RE LIKELY GONNA GET THAT.
SO THE ECONOMICS DO NOT FAVOR HEAT, HEAT BASED ICE MITIGATION, TEXAS, DUE TO THAT LOW ICING FREQUENCY THAT WE JUST SAW IT COULD BE DONE.
UH, THE THE DIFFICULT PART IS JUSTIFYING IT AND FOR THE AMOUNT OF TIME THAT THEY'RE GONNA BE OUT DUE TO ICING, IT'S VERY DIFFICULT TO, TO MAKE THAT ADDITIONAL CAPITAL.
INVESTMENT CONTROL ALGORITHMS, ON THE OTHER HAND PROBABLY MAKE SENSE TO EVALUATE, UH, ACROSS THE BOARD.
AND THEN FINALLY, ONCE IT DOES ICE UP, SOME OF YOU MAY HAVE HAD THE EXPERIENCE OF, UH, FLYING THROUGH CHICAGO IN, IN THE WINTER, AND BEFORE YOU TAKE OFF, YOU PULL INTO A STATION AND THEY BLAST THE WINGS AND OTHER PARTS OF THE BODY WITH SOMETHING THAT GETS THE ICE OFF OF THE AIRPLANE.
AS SO PEOPLE ASK, WELL, WHY DON'T WE JUST DO THAT TO WIND TURBINES? IT, IT'S REALLY NOT PRACTICAL FOR A NUMBER OF REASONS.
UM, IT'S HARD TO GET SOMETHING OUT THERE THAT COULD ACTUALLY SPRAY IT OUT IN THE MIDDLE OF NOWHERE TEXAS.
AND EACH TIME YOU GO TO THE, TO A SEPARATE TURBINE, YOU'VE GOTTA MOVE PROBABLY A CRANE WITH A HOSE ON IT AND THEN SPRAY DOWN THESE THREE BLADES, THEN MOVE IT AGAIN.
CAPTURING THE FLUID WOULD BE ALMOST IMPOSSIBLE.
AND THERE ARE ENVIRONMENTAL CONCERNS WITH THOSE FLUIDS.
BOTH ETHYLENE AND PROPYLENE GLYCOL, UH, ARE ARE NOT REALLY GOOD FOR THE ENVIRONMENT.
ETHYLENE, UH, GLYCOL IS, IS HIGHLY TOXIC TO ANIMALS.
AND SO IT, IT JUST REALLY DOESN'T MAKE SENSE TO DO IT.
YOU CAN'T COLLECT THE FLUID LIKE YOU CAN AT A NICE STATION AT THE AIRPORT.
SO THIS SLIDE GIVES YOU SOME INDICATION OVER THE LAST FIVE YEARS OF WHAT WE'VE EXPERIENCED IN TEXAS.
AND YOU CAN SEE THAT, UM, THE, THE LEFT CHART DESCRIBES SIGNIFICANT ICING EVENTS.
THOSE ARE ESSENTIALLY ONES THAT ERCOT STUDIED BECAUSE THEY OCCURRED, AND WE WANTED TO SEE WHAT IMPACT THERE WAS.
SO THAT THAT'S THE NUMBER, JUST TOTAL NUMBER OF ICING EVENTS.
AND THEN ON THE RIGHT, WHAT WE WANTED TO DO IS GIVE YOU AN INDICATION OF HOW MANY TERAWATT HOURS ARE GENERATED BY WIND IN TEXAS FOR EACH ONE OF THOSE YEARS.
AND THEN AN ESTIMATE OF HOW MUCH WAS LOST DUE TO ICING.
THE SMALL NUMBER ON THE TOP OF THE BARS FOR ALL YEARS EXCEPT 2021, IS THAT ESTIMATE IN 2021.
THAT'S ACTUALLY A BACKCAST VALUE FOR WIND ENERGY THAT WAS LOST DURING URI.
SO THAT'S ABOUT AS ACCURATE AS WE CAN MAKE THAT ESTIMATE THAT THERE WAS A LOT OF TIME AND EFFORT AND A STUDY THAT WENT INTO GOING BACK TO EVALUATE THAT.
UM, FROM BACK HERE, YOU CAN'T REALLY SEE THE, THE FACT THAT THERE'S A NUMBER ON TOP OF THE ACTUAL PRODUCTION, SO MAYBE YOU COULD GO OVER THOSE YEAH.
LIKE JUST PICK ONE YEAR AND GO OVER THOSE NUMBERS THAT HELP A LITTLE BIT.
SO YOU CAN SEE IT'S A, IT'S A RELATIVELY SMALL FRACTION OF, OF THE AMOUNT OF WIND ENERGY THAT'S GENERATED ON AN ANNUAL BASIS.
AND ULTIMATELY, IF, IF YOU'RE LOOKING AT ALL FIVE YEARS, THE, THE ENERGY LOST DUE TO ICING AS AN ESTIMATE IS ABOUT 0.64%.
IF YOU REMOVE 2021 AND WINTER STORM URI, THEN YOU'RE DOWN TO 0.27% OR LESS THAN THREE TENTHS OF A PERCENT OF, OF THE ENERGY THAT WAS GENERATED WAS LOST DUE TO ICING.
SO THAT REINFORCES THE THOUGHT THAT IT'S JUST NOT SOMETHING THAT OCCURS ON A HIGH FREQUENCY BASIS.
AND IN THE AGGREGATE, THE IMPACT TO THE SYSTEM IS NOT HUGE.
IT'S NOT TO SAY WE WOULDN'T LIKE THAT ENERGY DURING THOSE ICED UP TIMES, WE'D LOVE TO HAVE IT, BUT TO TAKE THE ADDITIONAL STEPS THAT WOULD BE REQUIRED TO MAKE SURE THAT THOSE SYSTEMS REMAIN OPERATIONAL DURING THOSE TIMES IS VERY DIFFICULT TO JUSTIFY ON A COST COST BENEFIT BASIS.
ANY QUESTIONS ON ANY OF THAT? SO, I MEAN, THANKS FOR ALL THE
[01:50:01]
EXPLANATION, BUT UH, I BELIEVE THE CONTEXT OF, UM, THE CONCERN CAME IN DECEMBER BECAUSE WE FORECAST A LEVEL OF GENERATION FROM THESE RESOURCES AND, UH, THEY JUST WERE NOT THERE.AND IT WAS IN THE 10, I THINK 14,000 TOTAL IN THAT RANGE, IF I RECALL CORRECTLY.
SO MISSING A FORECAST BY THAT MUCH IS THE CONCERN.
IT'S NOT WHETHER IT'S COST EFFECTIVE OR NOT ON A YEARLY BASIS, IS THE PUNCTUAL IMPACT THAT YOU HAVE REAL TIME AND, UH, THE IMPACT IT HAS ON OUR ABILITY TO PREDICT, UH, PERFORMANCE.
AND, UM, THE OTHER THING IS YOU, IF YOU CAN, I UNDERSTAND THE ECONOMICS OF THIS, UM, AND YOU KNOW, THE RELATIVELY LOW FREQUENCY OF THE EVENT, BUT IF THE CONSEQUENCES IS THAT'S SIGNIFICANT, THEN WE SHOULD THINK ABOUT IT, RIGHT? IF IT'S MARGINAL RESOURCES THAT WE HAVE IN THE SYSTEM, UM, WITH CAPACITY FACTORS THAT ARE REALLY, REALLY LOW, THEN THAT'S AN ISSUE THAT WE'LL HAVE TO DEAL WITH TOO.
UM, I MEAN, I'VE SEEN WIND FARMS AND THE 30% AND HIGHER, UM, CAPACITY FACTORS NOT IN THE 15 TO 20 OR SO, RIGHT? SO, SO THAT'S A BIT OF A CONCERN.
UM, AND THE SECOND QUESTION IS FOR THE EVENT IN DECEMBER WHEN WE LOST THAT, UM, WELL WE MISSED THAT PROJECTION.
WHAT WERE THE CAUSES? WAS IT THIS OR WAS IT WHAT THE GERMANS CALLED
AND IS, IS THAT SOMETHING THAT, UH, IS HAPPENING PERIODICALLY? SO I, I CAN COMMENT BROADLY.
UH, WE, WE DID NOT LOOK SPECIFICALLY AT, AT THE DECEMBER EVENT AND THE 14,000 MEGAWATTS THAT WERE OUT AT PEAK OF WIND.
SO WE DON'T HAVE ANY SPECIFIC DATA TO, TO GIVE YOU ON THAT.
AND I, IF I UNDERSTAND CORRECTLY, YOUR CONCERN IS PRIMARILY WITH THE, UH, THE FORECASTED ESTIMATE.
WE DIDN'T ANTICIPATE THAT THAT MUCH WOULD BE GONE.
AND WHEN WE LOST THAT MUCH, THAT WAS VERY PAINFUL AND, AND DIFFICULT CIRCUMSTANCES TO, TO ENDURE.
UM, SO CERTAINLY WE, WE CAN LOOK AT, AT OUR FORECASTS AND, YOU KNOW, COULD WE IMPROVE THOSE WHEN WE SEE, UM, AN EVENT COMING, A WEATHER EVENT, UH, TO, TO ASSURE THAT WE GET CLOSER TO THE ACTUAL NUMBER.
THAT'S ABSOLUTELY SOMETHING THAT WE'RE INTERESTED IN DOING.
AND THERE IS WORK GOING ON IN THAT RIGHT NOW.
THE, UM, SO I THINK IN THE DECEMBER EVENT WE DID HAVE, UH, QUITE A, WELL, WE HAD QUITE A BIT OUT FOR ICING, UH, BUT WE, OUR FORECAST ACTUALLY FORECAST, UH, THE VENDORS GIVE US AN ICING FORECAST AND SO THEY BAKE SOME PORTION OF THE ICING IN DEPENDING ON HOW CERTAIN THAT IS.
AND THEN THEY ALSO GIVE US A RISK, UH, ASSESSMENT OF HOW LIKELY IT IS TO GET MORE ICING, UH, ON TOP OF WHAT KIND OF IS BAKED INTO THE FORECAST.
SO HOW MUCH RISK THERE IS THERE.
AND SO THOSE, THOSE KIND OF ISSUES ARE, ARE ACTUALLY BAKED INTO OUR FORECAST MODELS.
UM, AND, AND WE TAKE THOSE INTO ACCOUNT.
AND I THINK, I THINK JEFF SAYS FOR THE DECEMBER EVENT, OUR FORECASTS WERE ACTUALLY NOT FAR OFF FROM WHAT WE, UH, THE, THE TIMING MAY HAVE BEEN A LITTLE OFF.
I THINK IT WAS MORE THE LOAD FORECAST THAT WAS OFTEN THE DECEMBER EVENT, NOT THE, NOT THE WIND GENERATION WAS WHAT I'M RECALLING.
AND IT WAS REALLY THE TIMING OF THE, A LOT OF IT WAS TIMING OF THE, THE HOW FAST THE COLD CAME IN.
PAUL, SO TALK, TALK TO ME A LITTLE BIT ABOUT THE ISOP PHOBIC COATINGS.
I MEAN, IS THAT, UH, LIKE WHAT IS THAT EXACTLY? AND IS, IS IT, IS IT COST, UH, PROHIBITIVE AND IS IT EFFECTIVE? I MEAN, IS THAT, IS THAT SOMETHING THAT WE COULD LOOK AT TO, TO HELP GET US THROUGH ONE OF THESE NEW ROUGH PERIODS? I DON'T THINK I, I CAN SPECIFICALLY TELL YOU WHETHER IT'S COST-PROHIBITED OR NOT.
AND IT, IT AGAIN WOULD COME DOWN TO HOW OFTEN DO YOU ANTICIPATE IT'S GONNA OCCUR? WHAT'S
[01:55:01]
YOUR PAYBACK ON IT, RIGHT? IF, IF I TRY TO GO AND, AND IT ALSO DEPENDS ON WHETHER IT'S AN EXISTING WIND TURBINE OR A NEW ONE.IF YOU'VE GOT A NEW ONE COMING IN AND YOU CAN APPLY THIS NEW COATING TO IT FOR A RELATIVELY SMALL INCREMENTAL COST, YOU MAY DECIDE TO DO SO JUST TO GET THAT ADDITIONAL LAYER OF PROTECTION.
AND EVEN IF IT ONLY GETS YOU 20% LESS ICING PROBLEMS THAT MAY BE WORTH IT OVER TIME TO GO BACK AND RETROFIT EXISTING BLADES WITH AN IS PHOBIC COAT COATING WOULD BE VERY DIFFICULT.
UH, FOR THE SAME REASONS THAT IT'S DIFFICULT TO, TO SPRAY THE OTHER STUFF ON IT, YOU, YOU'D ALMOST HAVE TO TAKE THE THING APART, APPLY IT, IT THEN PUT IT BACK UP, AND, AND WHEN YOU DO THAT, YOU, YOU HAVE ADDED SOME WEIGHT TO THE BLADE.
SO YOU'D HAVE TO GO THROUGH AN ANALYSIS TO SEE IS THE STRUCTURE CAPABLE OF HANDLING IT.
I I WILL ADD ALSO THAT SOME OF THESE TECHNIQUES, WHETHER IT BE THE HEATED, UH, COILS INSIDE THE BLADE OR EVEN A COATING, ADD EXTRA WEIGHT AND, UH, AND, AND, AND THEREFORE WHEN YOU'RE NOT IN AN ICING CONDITION, YOUR TURBINE IS GONNA BE LESS EFFICIENT.
SO FOR THE SAME AMOUNT OF WIND, YOU WILL MAKE LESS POWER OUT OF IT.
AND SO WHEN YOU'RE LOOKING AT THE ECONOMICS, YOU NEED TO TAKE THAT INTO CONSIDERATION AS TO, YOU KNOW, DO I WANT TO GIVE UP A FRACTION OF A PERCENT OF MY OUTPUT ALL YEAR ROUND TO PICK UP SOME OUTPUT WHEN I HAVE THOSE CONDITIONS? SO THERE, THERE'S, THERE'S A LOT OF ANALYSIS THAT NEEDS TO BE DONE WHEN YOU'RE LOOKING AT THESE THINGS.
UH, I'M NOT SAYING THAT IT, IT SHOULDN'T BE DONE AND THAT, UH, ICEPHOBIC COATINGS MAY MAKE GOOD SENSE FOR NEWLY INSTALLED WIND TURBINES.
I DON'T KNOW THAT THEY WOULD TO, TO RETROFIT EXISTING ONES.
DAVID, IS THERE ANY WIND FARMS IN TEXAS CURRENTLY USING ANY TYPE OF THESE METHODS? WHETHER THEY'RE HOT AIR CIRCULATION OR HEATED BLADES OR, OR YOU'RE JUST, THERE AREN'T ANY.
THAT DOESN'T MEAN THAT THEY'RE NOT THERE, BUT I'M NOT AWARE OF THEM.
ANY OTHER QUESTIONS FOR DAVID? DAVID, DO YOU HAVE ANYTHING ELSE OR? NO, THAT'S IT.
OR MAYBE JUST THE COROLLARY QUESTION.
HOW MANY DAYS OF ICING IN A REGION WOULD IT, YOU KNOW, DO YOU UNDERSTANDING THE MARKET WOULD BE ECONOMICALLY BENEFICIAL TO USE SOME OF THESE ALTERNATIVE METHODS? LIKE IS IT CANADA TYPE REGIONS OR SOMEWHERE ELSE? YEAH, AND IT, IT REALLY DEPENDS ON WHAT PART OF CANADA AS WELL, BECAUSE SOME, SOME PARTS OF CANADA, YOU DON'T REALLY GET ICING, IT JUST GETS REALLY COLD AND SO YOU GET SNOW.
UM, IN NORWAY, SWEDEN IS TYPICALLY WHERE YOU SEE A LOT OF THIS APPLICATION.
UH, I DID SEE ONE ANALYSIS THAT ESTIMATED A 10 YEAR PAYBACK FOR THE ADDITIONAL INVESTMENT IF YOU HAD 30 ICING EVENTS PER YEAR.
THAT'S WHAT I WAS LOOKING FOR.
DAVID, HAS ANY ANALYSIS EVER BEEN DONE ON THE KIND OF THE ECONOMIC COMPARISON OF THESE TYPES OF INVESTMENTS VERSUS THE ALTERNATIVES? SO IF WE WANTED TO, ESSENTIALLY GOING BACK TO THE CONVERSATION ABOUT KIND OF RAISING UP THE EFFECTIVE LOAD CARRYING CAPACITY DURING TIMES WHERE THERE MAY BE TAIL EVENTS, UH, THE ALTERNATIVE WOULD BE SOME OTHER TYPE OF GENERATION RESOURCE MEETING THE NEEDS DURING THOSE TAIL EVENTS.
AND SO THE MARKET WOULD HAVE TO FUND EITHER A DIFFERENT TYPE OF A RESOURCE BEING AVAILABLE DURING THOSE TAIL EVENTS BECAUSE THERE'S, EVEN THOUGH THE PERCENTAGES ARE VERY SMALL DURING THOSE EVENTS, WHEN THEY ARE SMALL, SOMETHING ELSE HAS TO FIT THAT, THAT NEED.
HAS THERE BEEN ANALYSIS ON, ON THE OVERALL ECONOMIC KIND OF, UH, WEIGHT BETWEEN THOSE ALTERNATIVES AND THE, UH, INVESTMENTS REQUIRED TO WEATHERIZE A WIND TURBINE OR TO MAKE INVESTMENTS AT A SOLAR FARM? THAT'S A GREAT QUESTION, PABLO.
UH, AND MY SHORTER ANSWER IS I DON'T KNOW.
I, I WOULD THINK THAT IF, IF, UH, THERE WERE A POWER GENERATION COMPANY THAT WERE ABSOLUTELY RESPONSIBLE TO GENERATE ENOUGH POWER FOR ITS AREA, IT WOULD DO THAT TYPE OF ANALYSIS MM-HMM.
I DON'T KNOW THAT ANYONE'S DONE THAT TYPE OF ANALYSIS.
IT, IT, IT JUST SEEMS TO ME, I KNOW THE ECONOMICS OF IT ARE CRITICAL, BUT AVOIDING LOAD SHED IS, IS EVEN MORE CRITICAL.
[02:00:02]
UM, AND, AND THERE MAY BE CIRCUMSTANCES WHERE THE, THE, THE, THE NEED TO NOT HAVE, YOU KNOW, 30% OF YOUR, YOUR RESOURCES GO OFFLINE MAY OUTWEIGH THE ECONOMICS AT SOME POINT.AND, UM, AND SO WE DO NEED TO BE DOING THAT KIND OF ANALYSIS AND FIGURING OUT, YOU KNOW, THE, THE MORE WE DEPEND ON WIND AND SOLAR, THE MORE WE HAVE TO MAKE SURE THAT THEY DON'T GO OFFLINE IN THE MOST CRITICAL TIMES.
AND SO, PARTICULARLY SINCE THE ECONOMICS IS ALREADY BEING DISTORTED BY FEDERAL SUBSIDIES.
SO, SO CAN WE PUT IN PLACE OTHER SUBS OR OTHER, NOT SUBSIDIES, BUT OTHER MITIGATING REGULATIONS THAT FORCE PEOPLE WHO INSTALL NEW TURBINES TO DO SOME AMOUNT OF, OF, OF, UH, YOU KNOW, MITIGATION WORK IN, IN TERMS OF ICING? I DON'T KNOW.
I, I I GET THE FACT THAT YOU'RE NOT GONNA GO AND RETROFIT EVERY OR ANY TERM TO DO THAT.
I, I WILL SAY THAT THE, UH, THE P U C WEATHERIZATION RULE 25 55 THAT YOU'RE ALL FAMILIAR WITH, UH, DOES HAVE, UH, PROVISIONS THAT ARE KICKING IN ON DECEMBER 1ST OF THIS COMING YEAR, UH, THAT REQUIRE, UH, ALL OF THE UNITS WITHIN THE STATE TO BE ABLE TO RUN AT A CERTAIN GIVEN TEMPERATURE ASSOCIATED WITH THEIR WEATHER ZONE.
AND SO THAT COULD, UH, THAT COULD RESULT IN SOME ADDITIONAL ANALYSIS AND, AND, AND PERHAPS SOME, SOME RETROFITTING.
UH, MR. CHAIRMAN, UH, DOES THAT INCLUDE ICING AS WELL? I, I KNOW WE'VE GOT AMBIENT TEMPERATURE, I KNOW WE'VE GOT, UH, WIND CHILL ACCOUNTED FOR, BUT FOR THE PURPOSES OF WIND, DOES THAT INCLUDE ICING? CUZ THAT SEEMS LIKE A VERY SPECIFIC WEATHERIZATION RELATED ISSUE TO A RESOURCE.
I HAVE A FOLLOW UP QUESTION TOO AS WELL.
UM, SO YOU'RE ONE OF THE CHARTS THAT WOODY WENT OVER SHOWED A LOT OF THE, UM, WIND GENERATION MEGAWATTS, THE ONES THAT ARE UM, MORE PRESENT UNDER ALL GROSS PEAK NET PEAK LOAD E LCC BEING IN THE COASTAL REGION, WHICH, YOU KNOW, ICING PROBABLY WOULDN'T BE THE BEST APPROACH THERE, UH, OR, YOU KNOW, WEATHERIZATION FOR ICING.
UM, BUT OTHER, THE OTHER CATEGORY IN PANHANDLE AREAS ARE SEEM TO BE, ESPECIALLY THE PANHANDLE I MY TOO SURE ABOUT THE OTHER REGION.
BUT I MEAN, IS IT, IS IT WORTH, BECAUSE IT SOUNDS LIKE THERE'S A QUESTION OF, WELL, HOW MUCH OF THIS WIND GENERATION THAT CAN BE IMPACTED BY ICING, UM, HOW MUCH OF IT IS ACTUALLY WEATHERIZED IN THE ANSWERS UNCLEAR? IS IT WORTH SURVEYING THE WIND GENERATION RESOURCES OUT THERE TO IN THE AREAS THAT COULD EXPERIENCE ICING TO FIGURE OUT WHETHER OR NOT THEY ARE WEATHERIZED AND IF SO, THROUGH WHAT MEASURES SO THAT WE ARE BETTER INFORMED WHAT WE'RE FACING WITH RESPECT TO, UH, MODELING FUTURE PERFORMANCE? I, I WILL TELL YOU THAT WE ARE CURRENTLY, UH, REQUIRED TO INSPECT EACH GENERATION RESOURCE WITHIN ERCOT AT LEAST ONCE EVERY THREE YEARS.
AND SO WE HAVE BEEN OUT TO A NUMBER OF THESE FACILITIES ALREADY, QUITE A FEW ACTUALLY.
AND AS WE WENT THROUGH EARLIER IN THE SLIDES, THE THINGS THAT ARE COMMON TO DO, YOU KNOW, THE, THE H V A C ON THE CONTROL SYSTEMS, MAKING SURE THAT THE, UH, THE INVERTERS ARE WORKING, THAT KIND OF THING, THAT'S TYPICALLY BEEN DONE, NO QUESTION.
UM, IT'S SOME OF THESE MORE EXTRAORDINARY TECHNIQUES THAT YOU MAY USE THAT HAVE NOT SEEN WIDESPREAD USE.
AND SO, UH, I SUPPOSE THAT A SURVEY COULD BE DONE IF, IF, IF WE WANTED IT TO FIND OUT WHO'S DOING WHAT WE, WE COULD, UH, ISSUE AN RFI FOR EXAMPLE, AND, AND FIND OUT WHAT ARE THE NUMBERS ACTUALLY OUT THERE.
UM, WE HAVE NOT DONE THAT, TO MY KNOWLEDGE.
THAT MIGHT BE A USEFUL MEASURE TO JUST GET MORE SPECIFIC INFORMATION.
YEAH, DAVID, IF I THINK IT'D BE GOOD TO HEAR WHAT ARE SOME OF THE BEST PRACTICES OUT THERE AND UNDERSTANDING WHO'S DOING WHAT.
SO YEAH, AND I THINK I, I WOULD ANSWER A BEST PRACTICES QUESTION WITH MANY OF THE BEST PR BEST PRACTICES THAT CAN PRACTICALLY BE APPLIED IN TEXAS ARE ALREADY IN PLACE AND THEY'RE DOING THEM.
UM, ARE THERE ADDITIONAL PRACTICES, UH, THAT, THAT ARE COSTLY THAT COULD BE DONE? YES, THERE ARE.
[02:05:01]
A COST BENEFIT BASIS? IT'S DIFFICULT TO RECOMMEND THEM ON A COST BENEFIT BASIS, BE I, YOU KNOW, I THINK IT'D BE INTERESTING TO UNDERSTAND IN THE TEXAS MARKET, WHICH WIND FARM IS DEPLOYING THE BEST PRACTICES ON WHAT THEY DO FOR WEATHERIZATION AND ICING EVENTS.CUZ I HAVE, YOU KNOW, NO IDEA WHAT THAT IS RIGHT NOW.
PERHAPS AN RFI IS THE BEST WAY TO GATHER THAT INFORMATION.
AND, AND, AND THE FOLLOW UP QUESTION OF THAT MR. CHAIRMAN AND STAFF IS, UH, CAN WE IDENTIFY ON, AND WE CAN, I BELIEVE, BUT PLEASE ANSWER, WE CAN IDENTIFY IT ON AN OUTAGE BASIS IN TERMS OF AN ICING EVENT, WHICH, UH, WIND UNITS ON A UNIT BASIS ARE GOING OUT, ARE REPORTING AN AN ICING RELATED OUTAGE OVER THE LAST FIVE YEARS? IS THAT ACCURATE? NOT ENTIRELY.
UH, WHEN THEY REPORT OUTAGES IN THE OUTAGE SCHEDULER, LET'S SAY IT'S A HUNDRED MEGAWATT WIND FARM AS, UH, AS WOODY MENTIONED THAT SIZE, IT'S, IT'S A REASONABLE SIZE.
WHAT THEY WILL REPORT IS THEY HAVE ICING PROBLEMS AND MAYBE THEY'VE LOST 25 MEGAWATTS.
UH, BUT WE DO NOT KNOW WHICH INDIVIDUAL TURBINES IT WAS.
UH, NOW WE ALSO KNOW, AND I ASSUME, BUT PLEASE ANSWER THE AMOUNT OF ANCILLARY SERVICES THAT YOU HAVE TO LAY ON IN ANTICIPATION OF AN ELLIOT TYPE, UH, CONDITION THAT IS BEING FORECASTED TO COVER THE VARIABILITY, THE POSSIBLE TAIL EVENT, ICING RELATED OUTAGE FOR THOSE UNITS.
IS THAT ACCURATE? I GUESS WE, WE, WE DON'T NECESSARILY BUY MORE ANCILLARY SERVICES IN THAT KIND OF EVENT, BUT WE'RE GONNA, IN A, IN THE ANTICIPATION OF A EXTREME WINTER EVENT LIKE THAT, WE'RE GONNA ASSUME THAT THERE'S MORE VARIABILITY AROUND THE GENERATION FLEET AS A WHOLE.
AND SO WE'RE GONNA MAKE SURE WE'VE GOT ENOUGH CAPACITY TO COVER A MUCH HIGHER, UH, DEMAND THAN WHAT WE, UM, SO IT'S JUST AT A HIGHER LEVEL.
AND SO YOU'RE COVERING THE VARIABILITY OF THE ENTIRE FLEET, NOT JUST THE RENEWABLE VARIABILITY THAT COULD BE EX EXPERIENCED AS A RESULT OF ICING? CORRECT.
A LOT OF FEEDBACK FOR YOU THERE.
[6.2 System Operations Update]
SO NEXT WE HAVE FRED QUANG, HOPEFULLY I PRONOUNCE THAT CORRECTLY.DIRECTOR OF OPERATIONS SUPPORT WILL PRESENT THE SYSTEM OPERATIONS UPDATE, WHICH IS AGENDA ITEM 6.2.
UH, THIS
UH, TODAY I WILL PROVIDE, UM, OPERATIONS UPDATE AND, UH, KIND OF WITH SOME KEY KEY TAKEAWAYS IN THE FOLLOWING SLIDES.
AND, UH, TODAY THERE IS NO VOTING ITEMS, UH, FOR ALL THIS UPDATE.
SO FOR DEMAND, UM, ER'S, MA PEAK DEMAND FOR THE MONTH OF FEBRUARY WAS SIX 3,500 MEGAWATT, UH, WHICH WAS 6,000, UH, LESS THAN RECORDED.
UH, 2021 FEBRUARY, UH, TIMEFRAME IS ALSO CLOSE TO 5.5, UH, A HUNDRED MEGAWATT, UH, 5,500 MEGAWATT LESS LENDER FEBRUARY, 2022 AS WELL.
SO FOR THE FORECAST, OUR FORECAST PERFORMANCE CONTINUE, UH, DOING WELL.
UH, THIS IS KIND OF TYPICAL FORECAST.
WE INCLUDE A LOW FORECAST, UH, SOLAR FORECAST AND, UH, THE WIND FORECAST.
SO ONE THING I THINK I WANT TO KIND OF, UM, DISCUSS OR KIND OF PROVIDE UPDATE HERE IS I THINK FROM THE FORECAST PERSPECTIVE AS KIND OF DISCUSSED EARLIER, THE NET LOADER IS REALLY THE ONE WE FOCUS.
SO WE PLAN TO INSTEAD OF PRO, UH, PROVIDE THE PERFORMERS FOR THREE FORECAST MOVING FORWARD.
WE TRY TO COMBINE ALL THREE AND, UH, KIND OF FOCUS ON FROM THE NET LOADER PERSPECTIVE WHAT'S OUR FORECAST PERFORMERS.
UH, AND HERE IS KIND OF OUR, THIS ONE WE PLAN TO, UH, PRESENT TO THE BOARD MOVING FORWARD AND LOOKING FOLLOW FEEDBACK AS WELL.
SO THIS ONE IS THE, THE CHART ON THE SLIDES IS THE DAY AHEAD.
UM, NET A LOAD FORECAST ESSENTIALLY IS KIND OF BASED ON THE COMBINATION OF LOW FORECAST WIND FORECAST AND THE SOLAR FORECAST TOGETHER.
AND I WILL MAJOR THE DAY AHEAD AND MAJOR IN THE MAIN ABSOLUTE ERAS PERSPECTIVE.
SO THE BLUE ONE IS A HISTORICAL NET FORECAST, UH, INFORMATION.
AND THE BLACK ONE IS OUR KIND OF, UH, CONSIDERED TOLERANCE, UH, FROM THE NET LOAD FORECAST PERFORMANCE PERSPECTIVE.
[02:10:01]
OUR, EVEN THE NET LOW FORECAST, UH, ALSO PERFORMS WELL OUR FREQUENCY CONTROL, UH, AS KIND OF PREVIOUS UPDATE AS WELL CONTINUE, UH, TO HAVE VERY GOOD PERFORMANCE.AND OUR C P AS CPS ONE SCORE, UH, IS 1 73 PER HUNDRED, UH, ONE 73%, UH, IS KIND OF WAY ABOVE THE, UH, NO REQUIREMENT AS OF, UH, 100%.
SIMILARLY, OUR TRANSMISSION LIMIT CONTROL PERFORMANCE, UH, FOR JANUARY AND FEBRUARY ALSO PERFORMS WELL.
WE DID NOT HAVE, UH, AEDENCE FOR THE, WE CALL IT, UH, IOL INTERCONNECTION WITH, UH, OPERATING LIMIT WITH A LARGE INTERFACE WE TRY TO MAINTAIN, UH, WHICH COULD HAVE, UH, SYSTEM IMPACT AND THE RISK.
SO I'LL SWITCH TO KIND OF HIGH LEVEL UPDATE ABOUT THE ANSWER SERVICE.
SO, UH, AS OF NOW WE HAVE THREE KIND OF ANSWER SERVICE, THE REGULATION, UH, RESPONSE RESERVE AND ANNOUNCE BIN.
SO I'LL PROVIDED, UH, PERFORMANCE FOR EACH, UH, SERVICE FOR THE REGULATION, UH, SIMILAR TO PREVIOUS UPDATE, UH, FOR THE PREVIOUS THREE MONTHS.
UH, THE EX EXHAUSTION RATE FOR THE REGULATION REGULATION UP AND THE DOWN LABEL WITHIN THE 5% OF THE PERFORMANCE TARGET AS WELL FOR, UH, RESPONSIVE RESERVE SERVICE, UH, I THINK WE HAD IN, IN THE PREVIOUS THREE MONTHS, WE HAVE, UH, THREE RESPONSE RESERVE DEPLOYMENT AND THEY WERE WITHIN, UH, KIND OF EXPECTED PERFORMERS AND THE MIDDLE STANDARD AS WELL.
AND WE DID NOT HAVE A RESPOND RESERVE DEPLOYMENT FOR FEBRUARY, UH, 2023.
AND SIMILARLY FOR, FOR THE NOW SPEED, I THINK WE HAD SOME DISCUSSION EARLIER, BUT, UH, CONSIDERED HISTORICAL AND THE PREVIOUS THREE MONTHS WE HAD, UH, PRETTY GOOD NOW SPEED, UH, DEPLOYMENT PERFORMERS.
SO THEY ALL MEET THE 30 MINUTES RE RATE NEEDS AND, UH, THE PERFORMERS ARE WELL, UH, ACCORDING TO THE, THEIR, UH, AVAILABLE HEAD ROOMS. SO I DO WANT TO KIND OF TAKE THIS OPPORTUNITY, PROVIDE, UH, UPDATE ABOUT THE MASS UPDATED RESOURCE, RESOURCE PLAN OUT CAPACITY.
SO THIS CAPACITY IS A NEW PROCESS, UH, APPROVED, UH, LAST YEAR SUMMER, AND WE IMPLEMENTED IN SINCE THE OCTOBER, UH, IS USED FOR
AND THIS NUMBER IS CALCULATED ON A DAILY BASIS FOR THE ROWING 60 MONTH.
AND WE PUBLISH THIS NUMBER, UH, ON A DAILY AND AUDI BASIS JUST TO, FOR THE TRANSPARENCY AND THE INFORMATION PURPOSE THAT ALL THE STAKEHOLDERS AND
AND AT THE SAME TIME WE CAN MAINTAIN A SUFFICIENT CAPACITY FOR FOR REAL TIME.
SO THE SLIDE HERE IS SHOWED, UH, THIS SPRING SEASON KIND OF OVERVIEW ABOUT OUR MASTER NUMBER COMPARED TO THE ACTUAL APPROVED, UH, RESOURCE PLAN OUTAGE.
UH, SO THE SPRING IS A TYPICALLY, UH, OUTG SEASON FOR IN, IN
AND YOU CAN SEE HERE OUR MDR POC, UH, PROVIDED SUFFICIENT MARGIN TO ACCOMMODATE THE REQUIRED RESOURCE PLAN OUTAGES, UH, FOR THIS SPRING.
AND, UH, WE STILL THINK, UH, THIS WILL KIND OF PROVIDED SUFFICIENT MOVING FORWARD AS WELL.
SO THIS IS MY UPDATED FOR SYSTEM, UH, OPERATIONS.
ANY QUESTIONS FOR FRED? REALLY WELL, I JUST APPRECIATE THE FOLLOW UP ON THE NEW RULE IMPLEMENTATION AND ACTUALLY SEEING THE DATA.
WHAT IS THE OTHER TIGHT MONTH WE'RE EXPECTING FOR MDR POC? SO TYPICALLY FOR MDR POC, THE RT SEASON IS SPRING AND THE, THE COMING FALL.
SO THOSE ARE THE ONE WE, UH, WE WORK SPEND A LOT OF, UH, COORDINATION.
AND I PROBABLY SHOULD SAY IN THE BEGINNING, UH, WE DO REALLY APPRECIATE THE RESOURCE ENTITY AND THE, THE GENERATOR OWNERS, THEIR COLLABORATION WITH EARTH KA.
WE TRY TO ACCOMMODATE THE AUDIO SCHEDULE AT THE SAME TIME.
THEY HELP US TO MAINTAIN THE SUFFICIENT CAPACITY, UM, FOR THE, FROM THE METHODOLOGY PERSPECTIVE, FOR THE WINTER AND
[02:15:01]
THE SUMMER.CONSIDER THE SYSTEM CONDITION.
WE THE NUMBER, UH, WILL BELOW BECAUSE WE DO WANT TO MAINTAIN SUFFICIENT CAPACITY DURING THOSE TWO SEASONS.
BUT STILL, UH, WE OVERALL THIS METHODOLOGY UNDER THE CAPACITY CURVE PROVIDED SUFFICIENT REQUIRED RESOURCE PLAN OUT TO BE TAKEN.
[6.3 Commercial Markets Update]
AGENDA ITEM, UH, 6.3.CANON'S GOING TO PRESENT THE COMMERCIAL MARKETS UPDATE.
UM, SO, UH, SINCE I'VE SPENT SO MUCH TIME WITH YOU TODAY, UM, THE REST OF THE, THIS UPDATE IS, IS RELATIVELY BRIEF.
UM, THE MAIN THING WE WANTED TO COVER WAS THAT WE HAD MADE A COMMITMENT TO UPDATE YOU ON THE A D E R UH, UH, PILOT PROJECT, AND THAT, UH, CONTINUES TO GO FORWARD.
UM, THE MAIN THING I WOULD WANT TO SHARE WITH YOU IS, UH, AN UPDATE ON THESE NUMBERS.
UH, IN TERMS OF PARTICIPATION, UH, THESE HAVE CHANGED SLIGHTLY.
I WOULD NOT SAY THERE'S ANY SIGNIFICANT, UH, CHANGE THERE.
UM, BUT, UH, CURRENTLY WE HAVE AROUND TWO MEGAWATTS, UH, IN APPLICATIONS IN, IN THE NORTH ZONE, UH, 3.7 IN THE HOUSTON ZONE AND JUST UNDER A MEGAWATT IN THE SOUTH ZONE.
UM, ERCOT CONTINUES TO WORK WITH, UH, APPLICANTS TO, UH, TAKE, UH, TAKE MORE APPLICATIONS.
UM, THE OTHER THING I, UM, UH, I THOUGHT WAS INTERESTING THAT I WOULD WANT TO HIGHLIGHT HERE IS, UM, THESE AGGREGATED DEVICES INCLUDE SYNCHRONOUS GENERATORS, UH, STATIONARY BATTERIES AND H V A C SYSTEMS, WHICH, UH, JUST KIND OF SHOWS, UM, SOME, SOME BREADTH TO THE APPLICATIONS AND INNOVATIVE THINKING THAT'S GOING ON IN AND AROUND THIS.
SO I WAS A LITTLE WOR WORRIED THAT IT MIGHT BE VERY ONE TECHNOLOGY, UH, CENTRIC AND I THINK WE'RE SEEING A LOT OF, UH, VARYING INTERESTS IN IN THE PROGRAM.
UH, WHICH, WHICH I, I JUST THOUGHT WAS WORTH HIGHLIGHTING TO THE BOARD, UH, TODAY, IS, IS THERE SOLAR AS WELL? UM, THERE IS NOT SOLAR AS A STANDALONE, BUT THERE IS, UM, SOME OF THE, UH, ITEMS THAT ARE, UH, THE STATIONARY BATTERIES ARE COUPLED WITH, UH, ROOFTOP SOLAR C KAAN ON THAT.
UH, DO YOU HAPPEN TO KNOW WHEN WE MIGHT HAVE THE FIRST, UH, EXPORT ONTO THE SYSTEM? UM, DO YOU HAVE AN ESTIMATION ON THAT? UH, I DON'T.
BUT I WILL MAKE SURE, UH, I HAVE THAT THE NEXT TIME WE TALK.
UM, SO, UM, JUST IN TERMS OF, UH, NEXT STEPS, UM, WE WOULD, UH, IN, IN TERMS OF MY AREA COMING, UH, FORWARD, UH, I, WE ERCOT STAFF WOULD FILE, UH, DEPENDING ON WHAT HAPPENS WITH THE BOARD TOMORROW, RECOMMENDATION ON A BRIDGE SOLUTION.
JUST WANTED TO MAKE SURE YOU WERE AWARE OF THAT.
UM, WE ARE ALSO WORKING ON FINISHING THE NEXT STEPS OF FIRM FUEL SERVICE.
UM, WE ARE GETTING VERY CLOSE TO, UH, IMPLEMENTING THE ERCOT CONTINGENCY RESERVE SERVICE.
I JUST SAW DATA, UM, FROM, UH, NCA'S TEAM, UH, WHO WORKS WITH DAN AND JEFF BILLOW, THAT THERE'S AROUND 25,000 MEGAWATTS QUALIFIED.
THAT DOESN'T MEAN THAT THEY'RE GONNA NECESSARILY PARTICIPATE IN THE, IN THE PROGRAM, BUT THEY ARE ELIGIBLE TO PARTICIPATE.
AND, UM, ALSO IN JUNE, WE PLAN TO BRING TO YOU, UH, IMPLEMENTATION DRAFT ON REALTIME CO-OP OPTIMIZATION, WHICH IS, UH, HAD A HIGH LEVEL OF DISCUSSION AT BOTH THE COMMISSION AND THE LEGISLATURE.
SO JUST WANTED TO SHARE WITH YOU THOSE ARE SOME NEXT STEPS COMING YOUR WAY, UH, IN, IN THE UPCOMING COUPLE MONTHS.
ANY QUESTIONS FOR CANAN? OKAY, THANKS KENAN.
[6.4 Market Credit Update]
AUSTIN ROELL WILL NOW PRESENT THE MARKET CREDIT UPDATE, WHICH IS A AGENDA ITEM 6.4.[02:20:03]
IS THERE? SURE.I'M THE NEW DIRECTOR OF SETTLEMENTS RETAIL AND CREDIT HERE AT ERCOT.
I WAS HERE THE LAST MEETING, SO I'M HERE TO GIVE YOU THE REGULAR UPDATE.
I'M PRESSING THE WRONG BUTTON.
SO THERE'S NO VOTING ITEMS TODAY.
THIS IS JUST THE USUAL UPDATE.
IT IS A LITTLE LONGER THAN NORMAL PRESENTATION DUE TO A QUESTION WE GOT FROM MS. ENGLAND.
LAST AT THE LAST MEETING ABOUT GROWTH AND TOTAL POTENTIAL EXPOSURE, AS WELL AS WE ADDED SOME SLIDES ABOUT THE ISSUES WE SAW IN THE BANKING SECTOR IN LAST MONTH.
SO I'M HAPPY TO REPORT THERE'S BEEN NO DEFAULTS OR UNUSUAL COLLATERAL CALL ACTIVITY SINCE WE LAST GOT TOGETHER.
CAN YOU PULL THE MICROPHONE CLOSER, PLEASE? OH, YES, SURE.
AND MAYBE THERE'S A WAY TO MAKE THIS GO HIGHER.
SO THERE'S BEEN NO DEFAULTS OR UNUSUAL COLLATERAL CALL ACTIVITY.
OUR TOTAL POTENTIAL EXPOSURE DECREASE FROM 1.6 BILLION TO 1.2 BILLION FROM JANUARY TO FEBRUARY.
AT THE LAST MEETING, MS. ENGLAND ASKED ABOUT HOW GROWTH COULD AFFECT THESE NUMBERS.
IF WE TOOK, TOOK LOAD GROWTH OUT OF THE EQUATION, WE WOULD SEE THOSE NUMBERS GO DOWN BY ABOUT 0.2 AND 0.5%.
SO IT'S NOT A, NOT A HUGE IMPACT.
AND ACTUALLY HAVE A SLIDE LATER WHERE WE TALK MORE ABOUT, ABOUT THAT.
UM, IT REDUCED MAINLY DUE TO PRICES, WHICH IS PART OF THAT SLIDE AS WELL.
THAT'S, THAT'S WHAT YOU'RE GONNA SEE EFFECT OVER AND OVER AGAIN IS MONTH IS PRICES ARE WHAT MAKE IT GO UP AND DOWN.
UH, THE AVERAGE DISCRETIONARY COLLATERAL SLIGHTLY DECREASED, PRETTY MUCH FLAT FROM 3.34 BILLION IN JANUARY TO 3.31 IN FEBRUARY.
ANY QUESTIONS ON THAT? I HAVE TWO SLIDES HERE COVERING THE NPRS WE HAVE OUT THERE.
UM, SLOW ME DOWN IF I GO THROUGH THESE TOO QUICKLY.
THIS IS A LITTLE MORE DETAIL THAN WHAT WE'VE HISTORICALLY PROVIDED.
NPR 10 67 HAS BEEN OUT THERE FOR QUITE SOME TIME.
THAT'S AN NPR, IT KIND OF HAS TWO, TWO PARTS.
UH, A KYC PORTION, KNOW YOUR CUSTOMER PORTION, WHICH INVOLVES BACKGROUND CHECKS ON PRINCIPLES OF COUNTERPARTIES.
AND IT HAS A SECTION THAT WHERE ERCOT WAS GOING TO BUILD A NEW CREDIT MODEL AND USE THAT TO EVALUATE COUNTERPARTY RISK ABOVE AND BEYOND WHAT'S ALREADY ON THE PROTOCOLS, LOOKING AT QUALITATIVE AND QUANTITATIVE FACTORS, UM, TO SEE IF WE MAY NEED TO MAKE SOME, UH, ADJUSTMENTS TO TPE THAT WOULDN'T MORE QUICKLY THAN YOU'D SEE IF WE FOLLOW THE NORMAL PROCESSES, UH, IN THE PROTOCOLS.
N NPR HAS BEEN OUT THERE FOR A WHILE.
IT WAS ACTUALLY FILED RIGHT BEFORE URI, AND THEN 1112 CAME SHORTLY AFTER THAT.
SO IT HAS BEEN ON THE BACK BURNER, BUT WE'RE BRINGING IT BACK TO THE FRONT BURNER.
YOU SHOULD SEE SOME MOVEMENT ON THAT SOON.
WE'RE ACTUALLY GONNA WITHDRAW THAT NPR R AND BREAK THOSE CONCEPTS INTO NEW NPRS AND START FILING THOSE SOON.
UH, 1146 IS, UH, UH, AN NPR THAT AFFECTS TRADERS ONLY.
IT WAS ACTUALLY FILED BY A MARKET PARTICIPANT.
IT'S BEEN OUT THERE FOR A LITTLE WHILE NOW.
IT'S NOT NEAR AS OLD AS 10 67.
THERE'S BEEN SOME DISCUSSION GOING ON IN THE CREDIT WORK GROUP ABOUT THAT.
NPR R WHEN IT WAS INITIALLY FILED, ERCOT CAME OUT WITH SOME STATEMENTS SAYING WE, WE DIDN'T SUPPORT IT.
THE SPONSOR SINCE THEN MADE SOME EDITS THAT ADDRESSED MOST OF ERCOT CONCERNS, BUT NOT ALL.
SO AT THIS TIME, WE HAVE NOT CHANGED OUR OPINION.
I DON'T, I DON'T THINK WE WILL FORMALLY CHANGE OUR OPINION ON THAT ONE, BUT WE ARE DISCUSSING THAT IN THE CREDIT GROUP.
ANY QUESTIONS ON THESE TWO? NPRS? OKAY.
AND THE, THE NEWEST NPR WE'VE FILED IS NPR 1165 REVISIONS OF PROVIDING AUDITED FINANCIAL STATEMENTS AND PROVIDING INDEPENDENT AMOUNTS.
SO TO JOIN THE ERCOT MARKET, UH, THIS IS RELATED TO NPR 1112 UNSECURED CREDIT.
THAT'S WHY WE FILED THIS FORM.
UH, IN ORDER TO JOIN THE ERCOT MARKET, YOU NEED A MARKET PARTICIPANT NEEDS TO FILE AN INDEPENDENT AMOUNT OF EITHER 200,000 OR 500,000 DEPENDING ON IF THEY'RE GONNA OPERATE IN THE CR MARKETS OR NOT.
SO THAT'S THE REQUIREMENT, AND IT'S BASED ON AUDITED FINANCIALS AND, UH, IT'S A NET WORTH OF THE COUNTERPARTY.
HOWEVER, THERE ARE WAYS TO BE EXEMPT FROM POSTING THAT INDEPENDENT AMOUNT, EITHER PROVING YOUR, UM, IF, IF, IF YOU MEET MINIMUM TANGIBLE NET WORTH OR, AND, UH, TOTAL ASSETS, YOU CAN BE EXEMPT.
[02:25:01]
GUARANTEE AGREEMENT WITH A PARENT OR A THIRD PARTY AND USE THEIR AUDITED FINANCIALS TO BECOME EXEMPT.WE FILL THAT EXEMPTION OF, AND THE GUARANTEED AGREEMENT JUST HAS A FACE VALUE OF $5,000.
SO OUR POSITION RIGHT NOW IS WE FILL THAT, THAT EXEMPTION IS NOT IN LINE WITH, WITH WHAT WE WERE GOING WITH WITH 1112.
SO WE HAVE AN NPR OUT THERE, THERE, UM, REQUIRING ALL MARKET PARTICIPANTS TO FILE THIS INDEPENDENT AMOUNT REGARDLESS OF THEIR NET WORTH OR THEIR RELATIONSHIP WITH, WITH A GUARANTOR.
SO, SO IF THAT MARKET PARTICIPANT IS A SUBSIDIARY OF A LARGER COMPANY, YOU WANT THE AUDITED STATEMENTS OF THE MARKET PARTICIPANT OR THE PARENT COMPANY, OR HOW DO YOU, THE PARENT COMPANY ACTUALLY THE ULTIMATE PARENT IS WHAT, THAT'S HOW HE WORDED IN THE ORIGINAL NPR R AND THERE'S ACTUALLY SOME DISCUSSION ON THAT LANGUAGE TO MAKE SURE WE GET THAT FINE-TUNED JUST RIGHT.
SO WE'RE NOT REQUIRING AUDIT FINANCIALS FROM A, A COMPANY OF SOME SORT OF HOLDING COMPANY OR SOMETHING THAT DOESN'T MAKE SENSE.
UH, UH, DC ENERGY, YOU'VE ACTUALLY FILED SOME COMMENTS ABOUT THAT.
SO THERE'S, THERE'S SOME CONVERSATION GOING ON ABOUT THAT.
BUT NO, WE WOULD, WE, WE WOULD GO UP TO THE PARENT COMPANY.
SO KEY TAKEAWAY IS WE ARE FACILITATING DISCUSSIONS OF THESE NPRS, ET CETERA, AND THE, AND THE CREDIT WORK GROUP, AND WE WILL, UM, DATE YOU ALL ACCORDINGLY.
THIS SLIDE IS, UH, IN REGARDS TO THE QUESTION MS. ENGLAND ASKED ME LAST TIME ABOUT GROWTH AND TPE.
I THINK AT THAT TIME WE SAW TPE GOING UP SLIGHTLY AND MS. ENGLAND WAS WONDERING WHAT, WHAT WOULD HAPPEN IF WE TOOK THE EFFECTS OF GROWTH OUT TO SEE WHAT WOULD, WHAT WOULD TPE BE IF WE TOOK THE EFFECTS OF LOAD GROWTH OUT? DIDN'T HAVE A GOOD ANSWER AT THE TIME.
UM, I THINK IT WAS A GOOD QUESTION.
AND LIKE THE SHORT ANSWER IS IT'S NOT A WHOLE, NOT, NOT A WHOLE LOT OF, UH, DIRECT, UM, IMPACT ON PRICE.
MOST OF THE VOLATILITY WE SEE IN TOTAL POTENTIAL EXPOSURE ACTUALLY COMES FROM PRICES AND LOAD GROWTH WILL ALSO IMPACT PRICES.
SO THAT'S WHAT THIS SLIDE DEMONSTRATES HERE.
THE, THE CHART ON THE LEFT, THE, THE GRAY LINE IS TOTAL POTENTIAL EXPOSURE.
AND THE BLUE LINE IS THE AVERAGE REAL TIME SETTLEMENT POINT PRICE.
SO YOU CAN SEE AS AVERAGE PRICES GO UP, THE TOTAL POTENTIAL EXPOSURE GOES UP, IS IS VERY CORRELATED, UM, THROUGH THE, THROUGH THE SUMMER AND THE, AND THE WINTER MONTHS.
ON THE RIGHT HAND GRAPH, UH, SIMILAR GRAPH, THE, UH, THE UH, GRAY IS THE SAME TOTAL POTENTIAL EXPOSURE YOU SEE ON THE, ON THE LEFT HAND GRAPH.
BUT THE BLUE IS A TOTAL MONTHLY LOAD.
SO YOU SEE THE, THE SUMMER MONTHS COMING IN SOME MONTHS PRICES ARE HIGHER THAN OTHER.
SOME SUMMERS PRICES ARE HIGHER THAN OTHER SUMMERS.
SO YOU CAN SEE, YOU KNOW, THAT FIRST, THAT FIRST HUMP THERE, LOAD WENT UP, TPE WENT UP THE SECOND SUMMER, PRICES WERE NOT NEAR AS IMPACTED.
LOAD GOES UP, EQUIVALENTLY THE SAME, BUT YOU DIDN'T SEE TPE GO UP NEAR AS MUCH.
SO REALLY WHAT'S DRIVING OUR TOTAL POTENTIAL EXPOSURE, WHICH IS DEFINES THE AMOUNT OF COLLATERAL COUNTERPARTIES NEED TO HAVE ON HAND TO COVER THEIR EXPOSURE, REALLY THAT IS DRIVEN BY PRICES, LOAD IMPACTS, PRICES, LOAD IMPACTS, TPE.
BUT THERE'S OTHER PRIMARY DRIVERS DRIVING THIS.
UM, NAMELY, I GOT A LIST HERE, UH, FUEL PRICES.
SO YOU WON'T BE ABLE TO REALLY ROUSE OR SEE THE EFFECTS OF LOAD IN OUR NUMBERS THAT WE REPORT HERE.
YOU KNOW, UH, EVERY TWO MONTHS YOU WON'T BE ABLE TO INFER, UH, GROWTH IMPACTS ON THOSE NUMBERS CAUSE THEY'RE BEING DRIVEN BY PRICES.
SO ANY QUESTIONS ON THAT? OKAY.
I'LL TRY TO BE QUICK CAUSE I KNOW THIS WAS PROBABLY BE TALKED ABOUT TOMORROW AS WELL.
UM, SO IN MARCH, SILICON VALLEY BANK AND SIGNATURE BANK HAD ISSUES.
THAT WAS A, A MANY HANDS ON DECK ISSUE FOR ERCOT, MAINLY JUST TO SEE WHAT OUR EXPOSURE WAS AND TO MAKE SURE WE WEREN'T GONNA HAVE ANY, UH, HORRIBLE IMPACTS FROM IT.
UM, FORTUNATELY WE WERE NOT, OUR IMPACT WAS, WAS PRETTY SMALL.
IT WAS PRETTY MINOR BASED ON, ON THE, THESE SPECIFIC ISSUES.
WE HAD MARKET PARTICIPANTS THAT HAD ACTIVE RELATIONSHIPS WITH SILICON VALLEY BANK, AND THAT WAS IT, THAT WE DIDN'T HAVE ANY LETTERS OF CREDIT ISSUED FROM SVB OR, OR ANYTHING LIKE THAT.
SO MAINLY OUR ISSUES WERE LOOKING TO SEE WHAT ENTITIES HAD, UH, BANKING RELATIONSHIPS, HAD BANKING ACCOUNTS WITH THESE, UH, WITH, WITH SVB AND TO, AND TO REACH OUT TO THEM, COMMUNICATE WITH THEM, TO, TO ENSURE, UM, TO INFORM THEM WE COULD BE MAKING DEPOSITS OR PAYMENTS INTO ACCOUNTS THAT MAYBE, UM, THEY DON'T WANT THE, THE MONEY GOING INTO OR IF THEY OWED US, OWED US FUNDS, HOW ARE THEY GONNA GET THOSE FUNDS TO US? AND THE IMPACT IS ONE OF THOSE THINGS WHERE WE'RE, WE'RE VERY WORRIED THAT THE IS IMPACT COULD BE LARGE, BUT IT, IT GOT SMALLER AND SMALLER.
THE MORE WE LOOKED AT IT, THESE ENTITIES HAD ALREADY CHANGED, HAD ALREADY HANDLED THEIR, UM, UH, THEIR
[02:30:01]
BANK ACCOUNT ISSUES OR THEY WERE WHAT WE CALL GETTING PAID IN AND OUT OF COLLATERAL WHERE WE DIDN'T HAVE TO GO, UH, RELATE WITH THE BANK.WE COULD JUST PAY IN AND OUT OF THE COLLATERAL WE HAD ON HAND AT ERCOT.
UH, CREDIT SWISS WAS LESS OF AN ISSUE, BUT ANOTHER THING THAT WE WERE LOOKING ON THE HORIZON THAT COULD LOOM IN.
WE DO HAVE LETTERS OF CREDIT FROM CREDIT SWISS, WHICH COUNTERPARTIES USE TO, UH, TO COVER THEIR COLLATERAL.
UM, BUT DUE TO THE, THE SWISS GOVERNMENT, UH, STEPPING IN AND, AND, UH, UH, THE, UH, MANAGING THE ACQUISITION BY UBS THAT, UH, THAT HAS NOT RESULTED IN THE ISSUE FOR US.
UM, HOWEVER, WE'RE CONTINUING TO MONITOR THE SITUATION.
I PUT THESE SLIDES TOGETHER IN MARCH.
WE'RE, WE'RE STILL MONITORING, BUT, UM, IT'S, UH, THINGS SEEM TO HAVE DIED DOWN A LITTLE BIT IN THE NEAR TERM.
IS THERE ANY QUESTIONS ON THAT? I HAVE SOME MORE SLIDES JUST TALKING ABOUT THE SAME ISSUE.
IN CASE OF THE INFOR, THIS WAS INF INTERESTING TO YOU ALL, OR YOU ALL WANT YOU WERE, UH, THIS HELPFUL AT ALL? UM, WE ACCEPT LETTERS OF CREDIT FROM A RATED BANKS ONLY, AND WE LIMIT THE OVERALL, WE WOULD NOT TAKE MORE THAN 750 MILLION IN LETTERS OF CREDIT FROM ANY SINGLE BANK, BUT WE'LL LIMIT IT EVEN FURTHER BASED ON THE VALUE OF THAT BANK, THE TANGIBLE NETWORK WORTH OF THAT BANK.
SO IF AN ISSUER BREACHES ITS LIMIT, UM, WE, WE GET, UH, DAILY ALERTS.
I I SAY THEY'RE MORE THAN DAILY, THEY'RE REALTIME ALERTS.
WE WOULD BE NOTIFIED, WE WOULD NOTIFY THE COUNTERPARTY.
WE WOULD NOT ACCEPT ANY MORE LETTERS OF CREDIT FROM THAT ENTITY.
AND, UM, WORK FROM THERES FOR THEM TO GET, UH, THEIR COLLATERAL COVERED BY OTHER MEANS.
THE NEXT SLIDE IS RELATED TO THIS SLIDE, SO I'LL GO AHEAD AND SCROLL ON.
WE, WE DO MONITOR THIS DAILY, LIKE I SAID, WE POST, UH, REPORTS FOR THE MARKET.
PARTICIPANTS CAN SEE REFLECTING THE MAXIMUM ISSUER LIMITS FROM EACH BANK CUZ MULTIPLE COUNTERPARTIES CAN BE USING THE SAME BANK.
AND, UM, IF THERE WAS AN ISSUE WITH ONE OF THESE BANKS, WE WOULD, WE WOULD TAKE ACTION AND REQUIRE THE, UH, COUNTERPARTY TO COVER THEIR COLLATERALS SOME OTHER WAY.
AN LC FROM ANOTHER BANK OR HARD COLLATERAL OR, UH, SURETY BONDS, SOMETHING OF THAT NATURE.
AND I THINK THAT IS MY LAST SLIDE.
YES, THE, THE REST OF THE APPENDICES OF THE USUAL GRAPHS THAT WE, UH, SUPPLY YOU ALL.
ANY QUESTIONS ON THOSE OR THE PREVIOUS SLIDES? NO, ALSO THAT'S VERY GOOD PROACTIVE, UH, INVOLVEMENT WITH SVB AND MAKING SURE THAT, UH, IT DOESN'T CREATE ANY PROBLEMS FOR OUR MARKET.
AND, AND I LIKE THE LIMIT, THE 750 MILLION LIMIT WITH ANY ONE POTENTIAL ISSUER.
SO THAT'S GOOD PROACTIVE WORK, UH, FROM THE CREDIT GROUP.
WISH I COULD TAKE CREDIT FOR ALL THAT, BUT THAT'S, I JUST HAVE ONE REAL QUICK, QUICK QUESTION.
WHAT, WHAT DO YOU, WHAT IS TANGIBLE NET WORTH? IS THAT LIKE BOOK VALUE OR HOW, HOW DO YOU DETERMINE THE TANGIBLE NET WORTH OF AN ENTITY? WELL, TO BE FRANK'S, YEAH, BEEN DOING THIS SHOP FOR ABOUT THREE MONTHS.
I HAVEN'T ACTUALLY CALCULATED THAT.
WE GET THAT FROM THE FINANCIAL STATEMENTS.
WE HAVE SOME CREDIT AND ANALYST THAT PUT THAT TOGETHER FROM THE FINANCIAL STATEMENTS.
UM, I WAS ON THE IMPRESSION IT'S A PRETTY STANDARD FINANCIAL METRIC THEY USE, BUT I DON'T KNOW HOW IT'S, I CAN'T TELL YOU HOW IT'S CALCULATED.
ANY FURTHER QUESTIONS FOR AUSTIN? ALRIGHT, THANK YOU AUSTIN.
[6.5 Technology and Projects Update]
NOW HEAR FROM VECAN TIER POTTY AND MANDY BALD ON AGENDA 6.5, WHICH TECHNOLOGY AND PROJECTS UPDATE VENKAT? LET'S SEE.CAN YOU ALL HEAR ME OKAY? YEP.
AND I WILL PROVIDE A QUICK TECHNOLOGY UPDATE AND, UH, MANDY BALD WILL PROVIDE THE OKAY R UH, PROJECT UPDATE.
SO FROM THE TIME, UH, WE LAST MET AS A COMMITTEE HERE, ERCOT, IT HAD DELIVERED, UH, AN APPLICATION RELEASE IN MARCH.
AND I WANTED TO HIGHLIGHT A COUPLE OF, UH, RELIABILITY RELATED ENHANCEMENTS, UH, THAT THE TEAM HAS DELIVERED.
THE FIRST ONE IS, UH, INTRA HOUR CAPACITY AVAILABILITY TOOL.
IT'S A SITUATIONAL AWARENESS TOOL.
SO RIGHT NOW, THE CONTROL ROOM OPERATORS HAVE ACCESS TO A TOOL CALLED CAPACITY AVAILABILITY TOOL.
IT LOOKS AT THE FORECASTED RAMP CAPACITY AND THE FORECASTED DEMAND FOR THE 48 HOURS, BUT IT IS ONLY, UH, AT A ONE HOUR GRANULARITY LEVEL.
AND THIS NEW TOOL IS INTRA HOUR.
IT LOOKS AT FIVE MINUTE GRANULARITY, BUT IT LOOKS AT, UH, TWO HOURS.
SO THE CAPACITY AVAILABILITY TOOL IS, UH, TWO DAYS, 48 HOURS LOOKING AT HOURLY.
AND THE, THE NEW FUNCTIONALITY THAT WE ADDED IS, UH, INTRA HOUR AND FIVE MINUTES, BUT FOR THE, UH, TWO HOURS.
[02:35:01]
HAS SPENT, UH, QUITE A BIT OF TIME IN COMING UP WITH DETAILED DESIGN FOR THIS AND TESTING DOCUMENTS AND, UH, BUNCH OF, UH, YOU KNOW, DOCUMENTATION THAT HELPS THE, THE CONTROL ROOM OPERATORS.AND I WOULD REALLY LIKE TO, YOU KNOW, THANK ALL THE TEAM MEMBERS WHO WORKED ON THAT, UH, SPECIFIC, UH, RELIABILITY RELATED ENHANCEMENT.
THE SECOND ONE IS, UH, NETTED NETWORK.
AND THIS IS A NEW PRIVATE AREA NETWORK THAT THE BUSINESS TEAMS WANTED US TO IMPLEMENT IN AN, UH, EXPIRATED MANNER.
AND AGAIN, THE IT TEAMS HAVE STEPPED UP AND, UH, DELIVERED THIS NEW, UH, ENUMERATION CALLED NETTED NETWORK, UH, IN A VERY EXPEDITIOUS MANNER.
AND AGAIN, A LOT OF TEAM MEMBERS HAVE, HAVE WORKED HARD TO, TO DELIVER THAT IN A, UH, YOU KNOW, IN A, IN A TIMELY MANNER.
SO WANTED TO HIGHLIGHT THOSE TWO RELIABILITY RELATED ENHANCEMENTS.
AND, UH, TO THE POINT THAT CANAN WAS TALKING ABOUT E C R S, UH, IT IS, YOU KNOW, WORKING HAND IN HAND WITH, UH, UH, THE MARKET PART SPENDS IT OT GROUPS.
WE ARE DEALING WITH LOT OF, UH, VENDORS OF THE MARKET PARTICIPANTS.
YOU KNOW, JUST TODAY I ACTUALLY HAD A CALL WITH COUPLE OF VENDORS FOR OUR MARKET PARTICIPANTS, UH, BECAUSE I HAD SOME QUESTIONS ON E C R S.
SO RIGHT NOW WE ALL ARE WORKING TOGETHER TO MAKE SURE THAT E C R S DOES GET DELIVERED IN A TIMELY MANNER, UH, IN JUNE.
SO THAT'S A QUICK, UH, TECHNOLOGY UPDATE FROM ME.
ANY QUESTIONS FOR VENKAT? OKAY, THANK YOU MANDY.
OKAY, SO THIS MONTH WE ARE REPORTING GREEN ON ALL OF OUR O K R PROJECT STOP LIGHTS.
UM, I'LL START BY CONTINUING THE STORY OF ECR S I KNOW KAAN VANKA BOTH TOUCHED ON IT, BUT, UM, TO PROVIDE A LITTLE MORE CONTEXT, SO APRIL 3RD, THERE WAS A WORKSHOP WITH THE MARKET PARTICIPANTS THAT WERE INTERESTED IN, UH, PROVIDING THE ERCOT CONTINGENCY RESERVE SERVICE THAT WAS VERY WELL ATTENDED.
UM, LAST WEEK, UH, BY THE END OF THAT WEEK, THAT WAS THE DEADLINE FOR QCS TO INDICATE THEIR INTEREST IN, UH, PROVIDING ECR S SERVICE.
AND AS KAAN MENTIONED, WE HAD THOSE RESULTS COME IN AS HE TALKED ABOUT THE APPROXIMATELY 25,000 MEGAWATTS WE EXPECT, UH, THAT WE MAY GET.
AND WHAT WE'LL DO BETWEEN NOW AND GO IS WE'LL BE WORKING WITH, UM, THOSE ENTITIES, JUST AS VENKAT MENTIONED THROUGH THE TESTING.
SO APRIL 20TH, WE OPEN UP OUR MARKET TESTING ENVIRONMENT.
UM, THOSE QSC THEN CAN COME IN AND BEGIN TESTING THEIR DATA SUBMISSIONS WITH ERCOT.
UM, AND THEN WE WILL BEGIN ON MAY 9TH, WE'LL START TO DO, UH, WEEKLY CALLS, UM, TO SUPPORT QUESTIONS AND ANSWERS, JUST WEEKLY SUPPORT CALLS WITH THE MARKET.
AND WE'LL ALSO BEGIN PRODUCING, UM, SCORECARDS, SO SCORECARDS OUT TO TAX SO THAT EVERYONE CAN KIND OF TRACK AND UNDERSTAND THE PROGRESS AS WE'RE WORKING TOWARDS THE ECR R S GO LIVE.
THE, UH, THE WEEKLY PHONE CALLS BEGIN APRIL 25TH.
SO SHORTLY AFTER WE GET INTO THE TEST PERIOD, WE'LL START THOSE, THOSE, UH, PHONE CALLS FOR SUPPORT.
AND AGAIN, THE FIRST OPERATING DAY FOR ECR R S WILL BE JUNE 10TH.
SO WE PUT THE CHANGE INTO OUR SYSTEMS ON A WINDOWS STARTING JUNE 8TH FOR A JUNE 10TH EFFECTIVITY.
OKAY, I'LL MOVE ON TO THE ENERGY MANAGEMENT SYSTEM UPGRADE.
UM, HAPPY TO REPORT THIS CONTINUES TO BE ON TRACK.
I KNOW IN PREVIOUS MEETINGS WE'VE TALKED ABOUT SOME OF THE RISK RELATED TO RESOURCES AND NEEDING TO CATCH UP ON, ON TESTING.
WE ARE SEEING, UH, THAT WE CONTINUE TO MAKE GOOD PROGRESS TOWARDS OUR MILESTONE TO FINISH OUR INTEGRATION TESTING BY THE END OF JULY.
UM, THERE WERE SOME CHANGES MADE TO OUR RESOURCE POOL THAT WE'RE USING.
UM, AND AS WE CONTINUE TO TRACK OUR PROGRESS AND THE SORTS OF DEFECTS WE'RE SEEING WITH THAT PROGRESS, WE ARE SEEING GOOD RESULTS IN TERMS OF LESS DEFECTS.
SOME OF THIS IS THE RESULT OF THE TEAM DID, UM, A GREAT AMOUNT OF TESTING EVEN PRIOR TO THIS PARTICULAR TEST ENVIRONMENT.
SO WE CONTINUE TO SEE GOOD RESULTS THERE AND EXPECT TO MEET OUR MILESTONE, UH, TO FINISH THAT INTEGRATION TESTING BY THE END OF JULY.
ALL RIGHT, MOVING ON TO THE DC FIVE INFRASTRUCTURE REFRESH PROGRAM.
SO IF YOU RECALL, THERE ARE EIGHT PROJECTS UNDERNEATH THIS PARENT PROGRAM.
UM, THOSE ARE ALL TRACKING GREEN RIGHT NOW.
UM, THIS PROGRAM OVERALL HAS FOUR KEY RESULTS THAT IT'S TIED TO.
THOSE ARE ALL ALSO TRACKING GREEN.
I WILL SAY, UH, VERY RECENTLY THERE'S A NEW RISK THAT HAS POPPED UP FOR ONE OF THE PROJECTS RELATED TO OUR DATABASE MIGRATIONS.
WE'RE GONNA CONTINUE TO TRACK THAT.
THAT'S ONE WHERE THE, WE HAVE A KEY RESULT TO, UM, FOR A PROGRESS POINT BY THE END OF YEAR TO BE ROUGHLY 50% COMPLETE BY THE END OF THE YEAR.
SO THAT'S A NEW RISK THAT WE'RE LOOKING AT AND WE'LL MONITOR AND, UM, UNDERSTAND IF WE NEED TO BRING BACK ADDITIONAL DETAIL TO YOU ALL.
WASN'T THERE ALSO A PERFORMANCE CONCERN ON THE AIS, THE LINUX MIGRATION FOR THE DATABASES? SO FAR WE ARE NOT OBSERVING ANY PERFORMANCE ISSUES.
[02:40:01]
WE ARE ACTUALLY LOOKING VERY GOOD.AND THEN FINALLY WE HAVE THE TREASURY MANAGEMENT SYSTEM IMPLEMENTATION.
UM, THIS ONE IS ALSO TRACKING TO ITS SCHEDULE AND IT HAS THE TWO RELEASES.
SO THE FIRST RELEASE IS WHERE WE, UM, TURN ON IN A, A LESS INTEGRATED MANNER, UH, WITH A VENDOR SOLUTION THAT'S GOING TO HELP EVENTUALLY AUTOMATE OUR TREASURY MANAGEMENT PROCESSES.
UM, SO WE ARE TRACKING, WE ARE IN A DEVELOPMENT STAGE FOR AN CONFIGURATION STAGE FOR GETTING THAT VENDOR PRODUCT STOOD UP.
UH, WE'RE LOOKING TO GET THAT TURNED ON AND, AND IN USE, UM, LATE JULY TIMEFRAME.
AND THEN THE SECOND RELEASE THAT WE ARE STILL IN THE PROCESS OF PLANNING FOR IS TO GET THE FULL-BLOWN, FULLY INTEGRATED AND AUTOMATED END-TO-END SOLUTION FOR THESE PROCESSES.
AND WE ARE STILL IN THE PLANNING PHASE FOR THAT.
SO WE DON'T YET HAVE THAT TARGET GO-LIVE DATE.
UH, BUT WE EXPECT TO COME BACK TO YOU IN THE AUGUST BOARD TIMEFRAME WITH MORE DETAILS ON THAT PARTICULAR GO-LIVE TIMEFRAME.
AND I BELIEVE SEAN TAYLOR WILL ALSO BE AN EXECUTIVE SESSION TOMORROW, UM, PROVIDING A LITTLE MORE DETAIL AROUND THESE TREASURY MANAGEMENT SYSTEM IMPLEMENTATION.
ANY QUESTIONS ON ANY OF THESE PROJECTS? QUESTIONS FOR MANDY? NO.
NICE TO SEE ALL GREEN, THANKS TO THE TEAMS FOR SURE.
[6.6 Revision Request Status Update]
COMMITTEE BRIEF IS AGENDA ITEM 6.6, WHICH IS THE REVISION REQUEST STATUS UPDATE, WHICH IS CHRISTIE HOBBS IS GOING TO DO THAT FOR US TODAY.UH, DO A LITTLE PINCH HITTING FOR ANNE HERE TODAY.
UM, JUST WANNA GIVE YOU A QUICK SUMMARY OF THE REVISION REQUEST, UH, ACTIVITY SINCE THE LAST BOARD MEETING REPORT.
UH, AS YOU PREPARED FOR THE MEETING TODAY, YOU SAW THAT THERE'S 12 REVISION REQUESTS THAT ARE COMING TO YOU FROM TACK.
ALL OF THEM, UH, WERE SUBMITTED INTO THE PROCESS BY ERCOT.
UH, ANOTHER I GUESS FUN FACT ABOUT THESE REVISION REQUESTS, UH, NINE OF THEM ACTUALLY HAVE TO DO WITH UPDATING THE DIFFERENT GUIDES TO ALL GET THEM IN SYNC WITH, UH, THE SB TWO PROVISION.
THAT REQUIRES THAT ALL OF THE ERCOT RULES BE APPROVED BY THE COMMISSION.
SO WE'RE JUST CODIFYING THAT WE'VE BEEN FOLLOWING THAT PROCESS.
WE'RE GETTING THAT CODIFIED INTO ALL OF OUR BINDING DOCUMENTS.
SO THAT'S WHY YOU SEE SEVERAL LOWS, UH, WITH THE SAME KIND OF NAME MENTALITY.
UM, I GUESS ONE OTHER ITEM IS THAT OF THESE REVISION REQUESTS, UH, ONLY ONE OF THEM HAS DOLLAR IMPACT TO IMPLEMENT.
UH, THE REST OF THEM HAVE NO IMPACT.
UH, THE ONE THAT DID HAVE AN IMPACT IS, UH, ALSO, UH, IN THE, THE SMALLER CATEGORY OF UNDER A HUNDRED K SINCE YOUR LAST MEETING.
WE CURRENTLY HAVE 48 REVISIONS, UH, THAT ARE IN PROCESS.
AGAIN, MANY OF THOSE, AS YOU CAN SEE, HAVE BEEN SPONSORED BY ERCOT.
UH, SO WORKING THROUGH DIFFERENT CHALLENGES, UH, IN THE MARKET.
ALSO, JUST WANTED TO QUICKLY HIGHLIGHT, UM, ONE OF THE THINGS THAT YOU HAD ASKED US TO ADD WE'VE BEEN TRACKING IS HOW LONG HAVE REVISION REQUESTS BEEN IN THE PROCESS? AND SO JUST A COUPLE OF UPDATES.
UH, SINCE THE LAST MEETING, WE HAD TWO OF THE REVISION AGING REVISION REQUESTS THAT HAVE SINCE GOT MOVEMENT.
UH, NOUR TWO 15, WHICH IS RELATED TO REMEDIAL ACTION SCHEMES, UH, HAD BEEN TABLED FOR OVER TWO AND A HALF YEARS.
UH, WE ARE SEEING THAT ONE MOVE FORWARD THROUGH THE STAKEHOLDER PROCESS NOW, ALSO VERIFIABLE COST MANUAL REVISION REQUEST 31, WHICH CLARIFIES VERIFIABLE COSTS AND FUEL ADDERS, WHICH HAVE BEEN TABLED FOR OVER TWO YEARS.
IT'S ALSO STARTING TO MOVE FORWARD.
AND THEN ONE OTHER MINOR CHANGE, UM, NPR 1143, WHICH HAD AT THE TIME OF PUTTING THIS REPORT TOGETHER HAD QUALIFIED TO BE PUT ON THIS AGING LIST, HAS SINCE, UH, BEEN RECOMMENDED FOR APPROVAL BY PRS.
SO IT WILL BE MOVING FORWARD AS WELL.
SO, UM, PUTTING THIS LIST TOGETHER HAS HELPED GET THE ATTENTION, UM, OF PARTICIPANTS TO HELP KEEP MOVING THINGS FORWARD.
THE REST OF 'EM, UM, KIND OF REMAIN TABLED.
EITHER WE'RE WAITING ON MAYBE SOME DIRECTION FROM THE COMMISSION, UH, OR OTHER THINGS THAT ARE GOING ON IN THE PROCESS.
UM, SO NO CONCERNS ABOUT ANY OF THOSE THAT HAVE BEEN TABLED THAT ARE ON THE LIST.
ANY QUESTIONS? THANKS, CHRISTINE.
I MEAN, IT'S GREAT THAT WE KEEPING AN EYE OUR EYE ON ALL OF THESE AND MAKING SURE THAT PROGRESS IS CONTINUING BEING MADE.
NEXT UP IS AGENDA ITEM SEVEN REPORTS FOR Q AND A.
[02:45:01]
TWO SUB ITEMS. AGENDA 7.1, REVIEW OF DRAFT COMMITTEE, SELF-EVALUATION SURVEY, AND AGENDA ITEM 7.2.FUTURE AGENDA ITEMS. THIS IS AN OPPORTUNITY FOR THE COMMITTEE AND STAFF TO DISCUSS ANY QUESTIONS OR COMMENTS ABOUT EITHER REPORT.
FEEDBACK ON THE DRAFT SURVEY CAN ALSO BE PROVIDED DURING TODAY'S HUMAN RESOURCES AND GOVERNANCE COMMITTEE MEETING.
DO ANY OF THE COMMITTEE MEMBERS HAVE ANY COMMENTS ON THE SELF-EVALUATION FORMAT? NO COMMENTS? NO.
SO THEN THE LAST ITEM BEFORE WE MOVE TO EXECUTIVE SESSION IS, AGENDA ITEM MADE OTHER BUSINESS.
IS THERE ANY OTHER BUSINESS COMMITTEE MEMBERS WISH TO RAISE AT THIS TIME? HEARING NONE.
[Convene Executive Session]
THEN AT THIS TIME, THE COMMITTEE WILL ADJOURN GENERAL SESSION AND CONVENE AN EXECUTIVE SESSION.NO VOTING ITEMS ARE ANTICIPATED DURING EXECUTIVE SESSION, SO GENERAL SESSION WILL NOT RECONVENE AFTER THE CONCLUSION OF EXECUTIVE SESSION.
GENERAL SESSION IS NOW ADJOURNED AND THE WEBCAST WILL BE CONCLUDED.
CHAIRMAN LAKE, THIS MEETING OF THE PUC WILL NOW RECESS.