Apr 18, 2023 Board of Directors Meeting

GOOD AFTERNOON.

[00:00:01]

WELCOME

[1. Call General Session to Order]

ALRIGHT.

APRIL 18TH, 2023 BOARD OF DIRECTORS MEETING.

I HEREBY CALL THIS MEETING TO ORDER.

THIS MEETING IS BEING WEBCAST LIVE TO THE PUBLIC ON ERCOT WEBSITE.

BEFORE WE BEGIN, I'D LIKE TO ASK PUC CHAIRMAN PETER LAKE, IF HE WOULD LIKE TO CALL AN OPEN MEETING OF THE COMMISSION TO ORDER.

THANK YOU, CHAIR FOSTER.

THIS MEETING OF THE PUBLIC UTILITY COMMISSION OF TEXAS WILL COME TO ORDER TO CONSIDER MATTERS HAVE BEEN DULY POSTED WITH THE SECRETARY OF STATE FOR APRIL 18TH, 2023.

FOR THE RECORD, MY NAME IS PETER LAKE.

I'M JOINED TODAY BY WILL MCADAMS AND LORI COBOS.

THANK YOU.

ALL RIGHT.

BEFORE MOVING ON TO TODAY'S BUSINESS, I'D LIKE TO HIGHLIGHT THAT THE ANTITRUST ADMONITION AND SECURITY MAP ARE INCLUDED WITH POSTED MEETING MATERIALS.

UH, THE FIRST ORDER OF BUSINESS IS AGENDA ITEM TWO.

UH, NOTICE OF PUBLIC COMMENT, IF ANY.

TODAY'S MEETING AGENDA WAS POSTED PUBLICLY ON APRIL 11TH AND PROVIDED INSTRUCTIONS FOR THE PUBLIC FOR COMMENTING IN PERSON.

TO DATE, NO ONE HAS EXPRESSED INTEREST IN COMMENTING.

IS THAT STILL THE CASE? THAT IS CORRECT.

THANK YOU, CHAD.

MOVING ON

[3. Consent Agenda]

I WILL TURN IT OVER TO CHAD TO PROVIDE THE BUDGET IMPACTS OF THE REVISION REQUESTS.

THANK YOU.

CHAIR, FOSTER.

UH, THERE ARE 12 REVISION REQUESTS ON THE CONSENT AGENDA.

NINE OF THOSE REVISION REQUESTS RELATE TO THE SAME ISSUE, WHICH IS INCORPORATING, UH, THE PC APPROVAL PROCESS INTO THE REVISION REQUEST PROCESS.

UH, ONLY NPR 1145 HAS A BUDGETARY IMPACT OF 50,000 TO 80,000, AND THERE ARE NO STAFFING IMPACTS TO ANY OF THE REVISION REQUESTS.

HAPPY TO ANSWER ANY QUESTIONS.

OKAY, THANK YOU CHAD.

UM, WITH THAT, DOES ANY BOARD MEMBER WISH TO DISCUSS OR REMOVE ANY ITEM FROM THE CONSENT AGENDA? IF NOT, AND IF THERE'S NO FURTHER DISCUSSION, I'LL ENTERTAIN A MOTION TO APPROVE THE CONSENT AGENDA.

SO MOVED.

NO, SIR.

THANK YOU, JULIE.

SECOND BY BILL.

ALL IN FAVOR? ANY OPPOSED? THAT PASSES.

[4. February 28, 2023 General Session Meeting Minutes]

GENERAL SESSION MEETING MINUTES.

THERE'S A DRAFT IN THE MEETING MATERIALS.

DOES ANYONE HAVE ANY COMMENTS OR WISH TO MAKE A MOTION? I MOVE TO APPROVE.

THANK YOU.

PEGGY.

SECOND BY COURTNEY.

UH, ALL IN FAVOR? AYE.

ANY OPPOSED? THANK YOU.

[5. CEO Update]

SO BMA.

GOOD AFTERNOON EVERYBODY.

THANK YOU VERY MUCH CHAIRMAN.

AND THANK YOU EVERYBODY FOR, UH, JOINING TODAY, UM, FOR TODAY'S UPDATE ON GET A LITTLE BIT OF HELP HERE IS THE, I THOUGHT IT WAS A DOWN ARROW.

OH, OVER HERE.

OKAY.

THANK YOU VERY MUCH.

APPRECIATE THAT.

UM, SO OVERALL OPERATIONS SINCE OUR LAST, UH, UPDATE IN FEBRUARY HAVE GONE VERY WELL.

THANKFULLY, WE HAVE BEEN BENEFITING FROM NOT, UH, HAVING ANY SIGNIFICANT OR SEVERE WEATHER EVENTS OVER THE LAST COUPLE OF MONTHS.

OUR FOCUS ACROSS ERCOT HAS BEEN AND CONTINUES TO BE OPERATING THE SYSTEM RELIABLY.

WE HAVE BEEN AVAILING OUR TEAM TO THE LEGISLATURE AS, UH, MULTIPLE ENERGY AND MARKET RELATED BILLS HAVE BEEN PROPOSED AND FILED AND RECENTLY HAVE BEEN MOVING OUT OF COMMITTEES.

THIS HAS BEEN ONE OF THE MORE ACTIVE SESSIONS WHEN IT COMES TO THE NUMBER OF BILLS THAT, UH, APPLY TO THE ENERGY SEGMENT SECTOR.

AND SO WE HAVE BEEN, UH, HIGHLY ENGAGED THROUGHOUT, UH, THE, THE SESSION WITH BOTH THE HOUSE AND THE SENATE ON, ON HELPING TO PROVIDE FEED FEEDBACK AND PR BE A RESOURCE FOR THOSE DISCUSSIONS.

WE REMAIN LASER FOCUSED ON ASSESSING THE MARKET ALTERNATIVES THROUGH THE LENS OF IMPROVING LONG-TERM SYSTEM ADEQUACY AND DRIVING COST EFFICIENCY WHILE WE IMPROVE RELIABILITY.

IN ADDITION, A VERY IMPORTANT TOPIC THAT IS, UH, BEEN MOVING IN THE LAST COUPLE OF MONTHS THAT WE'RE, UM, HIGHLY FOCUSED ON IS THE RECENT FEDERAL ACTIONS THAT ARE RELATED TO THE CROSS THAT STATE AIR POLLUTION RULE OR THE GOOD NEIGHBOR RULE.

THIS FINAL RULE WAS APPROVED BY THE EPA ON MARCH 15TH, 2023, AND WITHOUT INTERVENTION WOULD LIKELY GO INTO EFFECT BY JUNE OF THIS SUMMER.

WE'VE ASSESSED THAT THIS RULE COULD POTENTIALLY HAVE A SIGNIFICANT AND DETRIMENTAL

[00:05:01]

WE HAVE FILED COMMENTS IN THE MULTIPLE AVENUES THAT ARE AVAILABLE TO US TO DO SO.

WHAT THE RULE EFFECTIVELY DOES IS IT RESTRICTS SUMMER NOX EMISSIONS DURING THE OZONE SEASON, WHICH IS FROM MAITA SEPTEMBER FROM COAL AND GAS POWER PLANTS IN TEXAS AND 21 OTHER STATES BEGINNING THIS SUMMER WITH LIMITS THAT DECREASE THROUGH 2030.

THERE WILL BE A DETAILED REPORT ON THIS A LITTLE BIT LATER THIS AFTERNOON, BUT I JUST WANTED TO HIGHLIGHT A FEW OF THE IMPORTANT ELEMENTS OF THIS THAT WE ARE FOCUSED ON.

THE STATE OF TEXAS HAS PROPOSED ITS OWN IMPLEMENTATION PLAN, WHICH IS REFERRED TO THE STATE IMPLEMENTATION PLAN OR SIP.

AND THIS IS IN CONTRAST TO WHAT THE EPA HAS APPROVED, WHICH IS THE FEDERAL IMPLEMENTATION PLAN.

THE FIP, THE STATE'S IMPLEMENTATION PLAN WAS REJECTED BY THE EPA AND WE HAVE FILED TWO DECLARATIONS SUPPORTING THE STATE'S APPEAL TO OVERTURN THAT STAIN IF THE FIP, THE FEDERAL PLAN IS IMPLEMENTED AS APPROVED.

WE ARE FORECASTING BASED ON INPUT THAT WE HAVE RECEIVED FROM GENERATORS AROUND THE STATE THAT UP TO 6,500 MEGAWATTS OF CAL GAS AND COAL GENERATION COULD REACH THEIR NOX LIMITS BY AUGUST 1ST THIS SUMMER, WHICH THAT MEANS IT WOULD LIMIT THEIR ABILITY TO SERVE PEAK LOAD AFTER THAT POINT IN TIME.

THIS IS ESTIMATED TO INCREASE THE RISK OF A LOAD SHED EVENT BY 400% AS COMPARED TO NOT HAVING THESE LIMITS IN PLACE.

SO WE ARE CONTINUING TO EVALUATE THE OPERATIONAL AND THE MARKET IMPACTS OF THIS, INCLUDING IF AND WHEN THE FIT BECOMES EFFECTIVE AND WHAT KIND OF CONSTRAINTS IT WOULD HAVE IN OUR DISPATCH AND WHAT IT WOULD MEAN IN TERMS OF OUR ONGOING MARKET DESIGN DISCUSSIONS.

AS WELL AS THIS COULD HAVE A SIGNIFICANT IMPACT IN THE CONSIDERATIONS OF DISPATCHABLE GAS RESOURCES THAT WILL CONSIDER BEING BUILT IN THE TEXAS MARKET UNDER THIS NEW REGIME.

WE'LL KNOW MORE ON THE PROGRESS OF THIS LEGAL ACTION IN THE COMING WEEKS AND WE'LL KEEP THIS BOARD INFORMED.

UH, AS WE DO, AS PART OF OUR, UH, RELIABLE OPERATIONS, WE ARE CONSTANTLY ASSESSING THE NEED AND THE AVAILABILITY OF TIME FOR THE GENERATORS TO TAKE OUTAGES.

AND WHEN WE GET TO A PLACE, WHEN WE LOOK AHEAD SEVERAL DAYS AND WE SEE THE PLANNED OUTAGES THAT ARE SCHEDULED, AND IF WE THINK THERE COULD BE A RISK IN TERMS OF GRID TIGHTNESS AND RELIABILITY DURING THAT PERIOD OF TIME, WE HAVE A TOOL THAT WE USE CALLED ADVANCED ACTION NOTICE AANS, THAT WE WOULD ISSUE DAYS IN ADVANCE, WHICH SIGNALS TO THE MARKET THAT WE MAY NEED TO ASK GENERATORS TO MOVE THEIR SCHEDULED OUTAGES IN ORDER TO IMPROVE THE RELIABILITY FORECAST FOR THAT PERIOD.

WE ARE SEEING A HIGHER FREQUENCY OF THESE AANS BEING ISSUED, AND IT'S STEMMING FROM THE FACT THAT ONE, WE ARE MAINTAINING THE OUTAGE WINDOW THAT WE HAVE AUTHORIZED A COUPLE YEARS BACK.

WE HAVE MADE NO CHANGES TO THAT PROCESS.

SO WE ARE ALLOWING THE SAME CAPACITY IN THOSE WINDOWS FOR REGENERATORS TO TAKE, AND WE ARE SEEING A SHRINKING, UH, SUPPLY RESERVE IN RELATION TO THE GROWTH AND DEMAND THAT IS SQUEEZING THOSE PERIODS OF TIME ON A MORE FREQUENT BASIS.

TO MAKE THE POINT TODAY, WE JUST ISSUED OUR THIRD ONE, UH, AT NINE 30 THIS MORNING, WE ISSUED AN ADVANCED ACTION NOTICE FOR THIS THURSDAY OF THIS WEEK, SIGNALING THAT UP TO 2,500 ISH, UH, OR SO MEGAWATTS MAYBE NEED TO BE MOVED OR RESCHEDULED IF THE WIND FORECAST COMES IN AT A LO AT, UM, A LOWER PERFORMANCE LEVEL THAN OUR 50 50 FORECAST.

SO HAVING THESE COME IN EVERY COUPLE OF WEEKS DURING A SHOULDER MONTH IS NOT THE NORM.

AND IT RE IT REFLECTS BASICALLY OUR MOVEMENT FROM ONE PEAK SEASON TO THEN WHAT WAS TYPICALLY A SHOULDER SEASON WHERE THERE WERE LESS, UH, PRESSURES ON THE GRID.

BUT THOSE PRESSURES ARE COMING IN NOW BECAUSE OF THE OUTAGE PLANNING THAT WE DO DURING THOSE SHOULDER MONTHS AND THAT SHRINKING RESERVE MARGIN CAUSING A CONTINUAL NEED TO POTENTIALLY MOVE AND CHANGE.

SO WE HAVE ENOUGH AVAILABLE RESERVES TO MEET THE RELIABILITY EXPECTATIONS DURING THESE TIMES.

OUR PROCESS ALLOWS US TO DELAY OR WITHDRAW THESE, UH, OUTAGES.

WE HAVE A, A FIXED AMOUNT OF TIME THAT WE HAVE TO GIVE THE MARKET LETTING THEM KNOW WE PLAN TO DO THAT AFTER WHICH POINT IF A, A MARKET OP, A MARKET PARTICIPANT CAN OPT OUT OF BEING MOVED EARLY IN THAT PROCESS.

BUT AFTER WE REACH A THRESHOLD POINT, THEY CANNOT, AND THEN THEY WOULD HAVE TO BE OBLIGATED TO MOVE.

WE'LL CONTINUE TO EVALUATE THE SIZE AND SCALE OF OUR, UH, THE, UM, MDR POC.

THE MDR POC IS THE PROCESS WE USE THAT CREATES THE, UM, WINDOWS OF TIME FOR OUTAGES.

AND SO WE ARE GONNA CONTINUE TO EVALUATE WHETHER THE CURRENT APPROACH THAT WE HAVE IS STILL MEETING THE NEEDS FOR RELIABLE OPERATIONS

[00:10:01]

OUR SHORT TERM OPERATIONAL CHALLENGES REMAIN FORECAST VARIABILITY COUPLED WITH POTENTIAL UNPLANNED OUTAGES.

WE HAVE ADEQUATE TOOLS TO ADDRESS THE SHORT TERM OPERATIONAL CHALLENGES.

I'D LIKE TO REVIEW BRIEFLY AGAIN WHAT THESE AN, WE CALL THEM ANCILLARY SERVICES.

THESE ANCILLARY SERVICES HELP US MANAGE THE RISKS IN REAL TIME ON A DAY-TO-DAY BASIS.

WE HAVE A SERVICE CALLED REGULATION SERVICE.

THIS IS FOCUSED ON MAINTAINING THE FREQUENCY ON THE GRID, THAT 60 HERTZ FREQUENCY, IT IS CAPACITY THAT GETS DEPLOYED EVERY FOUR SECONDS IN ORDER TO MAINTAIN THAT FREQUENCY BETWEEN OUR FIVE MINUTE SKI RUNS.

SO IT'S INCREDIBLE FAST ACTING ONLINE, CONSTANTLY SHIFTING UP AND DOWN IN ORDER TO MAINTAIN THAT FREQUENCY AS CLOSE AS POSSIBLE.

THAT'S OUR REGULATION SERVICE.

THEN WE KEEP A RESPONSIVE RESERVE SERVICE, WHICH IS CAPACITY THAT CAN RESPOND VERY QUICKLY IF WE HAVE A SUDDEN CHANGE IN DEMAND OR IN SUPPLY.

TYPICALLY, THIS IS NEEDED IF A UNIT TRIPS OFFLINE.

AND SO WHAT WE HAVE TO PLAN FOR IS THE LARGEST SINGLE CONTINGENCY IN THIS CASE, WHICH WOULD BE OUR SOUTH TEXAS PROJECT NUCLEAR UNIT TRIPPING OFFLINE.

SUDDENLY WE'D HAVE TO HAVE ENOUGH RESPONSIVE RESERVE TO BE ABLE TO MAINTAIN FREQUENCY WITHOUT GOING INTO A RISK OF LOAD SHED SHOULD THAT LARGEST CONTINGENCY TAKE PLACE.

AND SO WE HAVE ADEQUATE RESERVES ALWAYS ONLINE READY TO JUST RAMP UP INSTANTLY TO FILL THAT GAP IN SUPPLY SHOULD SOMETHING LIKE THAT HAPPEN.

THAT'S OUR R R S ANCILLARY SERVICE.

THEN I'M GONNA SKIP THIS OUT, THE THIRD ONE FOR A SECOND AND GO TO NONS SPIN.

NONS SPIN IS OUR RESERVE SERVICE THAT CAN BE EITHER ONLINE OR OFFLINE.

AND IT IS THE TOOL THAT WE CAN USE THAT HAS TO START UP INSIDE OF 30 MINUTES.

AND IT'S IN ORDER TO COVER FORECAST ERRORS IN THE FORECAST, TYPICALLY EITHER A LOAD FORECAST ERROR OR A SUPPLY FORECAST ERROR RELATED TO RENEWABLES OR INTERMITTENT SUPPLY.

IT HAS TO COME UP IN 30 MINUTES.

IT HAS TO BE ABLE TO RUN AT LEAST FOUR, FOUR HOURS.

THAT'S THE MINIMUM.

THERE IS NOT AN ASSOCIATED MAXIMUM.

IF WE NEED IT TO RUN LONGER, WE CAN MANDATE THAT IT RUNS LONGER, BUT IT HAS TO BE ABLE TO RUN AND QUALIFY TO RUN FOR AT LEAST FOUR HOURS.

AND THEN THE THIRD ONE, WHICH IS THE ERCOT CONTINGENCY RESERVE SERVICE, E C R S.

THIS IS THE NEW PRODUCT THAT WE HAVE BEEN DEVELOPING FOR THE LAST THREE YEARS.

IT IS READY TO GO LIVE THIS SUMMER ON OR ON ABOUT JUNE 8TH.

AND THIS HAS A PERFORMANCE CHARACTERISTIC THAT'S A LITTLE BIT, UH, MORE STRINGENT THAN OUR NONS SPIN.

THE UNITS HAVE TO BE ABLE TO RAMP UP TO FULL, UH, LOAD, UH, IN 10 MINUTES, AND THEY HAVE TO BE ABLE TO STAY ONLINE FOR A MINIMUM OF TWO HOURS.

THERE'S NOT A MAXIMUM WITH THIS EITHER.

SO THERE WE CAN, UH, REQUEST THEM TO RUN LONGER IF NECESSARY, BUT THERE'S A MINIMUM OF TWO HOURS ON ECR S SO THESE ANCILLARY SERVICES GIVE US DIFFERING TYPES OF FLEXIBILITY FOR DIFFERING TYPES OF PROBLEMS THAT HAPPEN IN REAL TIME.

AND I, AND I TALK ABOUT THIS BECAUSE THERE'S A LOT OF CONVERSATION AS WE'RE DISCUSSING THE MARKET DESIGN INTO NEW ANCILLARY SERVICES POTENTIALLY BEING PART OF THAT SOLUTION.

ANCILLARY SERVICES ARE PART OF OUR OPERATIONAL FLEXIBILITY SOLUTION THAT WHICH IS NEEDED TO COVER THE GROWING UNCERTAINTY THAT HAPPENS AS WE'RE SERVING MORE AND MORE ENERGY WITH RENEWABLE AND INTERMITTENT RESOURCES.

SO THESE TOOLS CAN BE ADAPTED AND CHANGED.

THE TIME PARAMETERS ON THEM COULD BE CHANGED THROUGH A RULEMAKING PROCESS AND A PROCESS THAT WOULD WORK THROUGH TACK.

WE COULD REDEFINE THE LANES, THE DURATIONS, THINGS ALONG THOSE LINES IF WE SAW A NEED TO CHANGE THESE TOOLS.

BUT I THINK WHAT, WHAT I'M THE MAIN POINT HERE IS WE'VE GOT, UH, AN ABUNDANCE OF TOOLS AVAILABLE TO US THAT WE BELIEVE ARE GONNA MEET THE OPERATIONAL FLEXIBILITY NEEDS FOR THE NEXT SEVERAL YEARS FOR ERCOT.

AND IF WE DID HAVE A NEED TO EITHER CREATE A NEW ONE OR TO MODIFY ONE OF THESE EXISTING ONES, WE HAVE THE PROCESS IN PLACE WITHIN ERCOT AND WITH THE PUC TO MAKE THOSE CHANGES TODAY.

SO THEN AS WE THINK ABOUT THAT IN THE CONTEXT OF THE CONVERSATIONS GOING ON MORE BROADLY AROUND MARKET REDESIGN, I BRING UP THIS SLIDE AGAIN BECAUSE I WANNA FOCUS ON THE FACT THAT THIS IS NOT INDICATING AN OPERATIONAL FLEXIBILITY ISSUE.

THIS IS, UH, THIS IS INDICATING A LONG-TERM RESOURCE ADEQUACY ISSUE.

AND SO BECAUSE THERE HAS BEEN A LOT OF DISCUSSION AROUND NEW ANCILLARY SERVICES AS SOLUTION, I WANNA BE VERY CLEAR THAT AN ANCILLARY SERVICE SOLUTION ALONE WILL NOT ADDRESS THE MARKET DESIGN DEFICIENCIES THAT WE ARE ARE SEEING THAT IS LEADING TO A SHRINKING DISPATCHABLE GENERATION RESERVE MARGIN AS COMPARED TO OUR GROWING LOAD.

WE HAVE THE TOOLS TODAY TO DEAL WITH THAT OPERATIONAL

[00:15:01]

WHAT WE NEED IS A MARKET-WIDE SOLUTION THAT'S GONNA HELP TO ADDRESS THIS DIMINISHING MARGIN OVER TIME.

WE ARE SEEING THIS ISSUE ACROSS THE COUNTRY AND IT'S IMPORTANT TO NOTE, WE ARE NOT TRYING TO SOLVE SOMETHING UNIQUELY THAT UNIQUELY EXISTS IN TEXAS.

WE ARE SEEING THIS IN EVERY OTHER ISO AROUND THE COUNTRY TRYING TO DEAL WITH THIS EXACT TYPE OF PICTURE THAT IS GROWING IN THEIR AREAS.

THE REASON IT'S A LITTLE MORE URGENT, I THINK, IN TEXAS TODAY IS BECAUSE WE ARE A LITTLE FURTHER ALONG IN TERMS OF THIS, THIS PROGRESSION OF A DIMINISHING RESERVE AND WE HAVE A SMALLER, UH, CAPACITY, UH, OR SMALLER SERVICE AREA TO LEAN ON TO SUPPORT THE CAPACITY AND RELIABILITY NEEDS OF OUR MARKET.

WHEREAS OTHER ISOS CAN LEAN ON THE ENTIRE EASTERN OR WESTERN INTERCONNECT.

TEXAS MANAGES THEIR RELIABILITY WITHIN ERCOT ALONE.

AND SO THAT HAS MORE CONSEQUENTIAL AND DYNAMIC IMPLICATIONS BECAUSE OF THE SIZE OF THE MARKET THAT WE OPERATE.

TO GIVE YOU AN EXAMPLE OF WHAT IS GOING ON AROUND THE REST OF THE COUNTRY, JUST IN THE LAST TWO WEEKS, PJM HAS MADE PROVIDED NOTICE THAT THEY PLAN TO SUSPEND THEIR UPCOMING AUCTION FOR THE 20 25 20 26 CAPACITY YEAR BECAUSE THEY WANNA REVISIT THE CAPACITY PERFORMANCE TOOLS THAT THEY HAVE AVAILABLE TO TRY TO INCENTIVIZE DEALING WITH A SHRINKING RESERVE MARGIN OF A DISPATCHABLE CAPACITY GROWTH.

THEY ARE FORECASTING POTENTIALLY TO LOSE 40 GIGAWATTS OF THE THERMAL TYPE GENERATION BY 2030 WITH MOST OF THE REPLACEMENT IN THEIR QUEUES LOOKING LIKE RQ FILLED WITH RENEWABLES AND INTERMITTENT RESOURCES.

S P P IS TRYING TO DEAL WITH SOME OF THEIR RISK ISSUES BY LOOKING AT THEIR RELIABILITY STANDARD AND MAKING SURE THAT THE RELIABILITY STANDARD IS ESTABLISHED IN SUCH A WAY THAT CONTINUES TO DELIVER RELIABILITY FOR THE S P P REGION.

MESO RECENTLY JUST PUT IN A CHANGE TO THEIR CAPACITY MODEL THAT BROKE OUT THEIR CAPACITY PICTURE INTO SEASONS TO TRY TO MORE, TO BETTER ALIGN THE CAPACITY PLANNING PROCESS AND THE CAPACITY PROCESS, THE THE CAPACITY OUTCOMES WITH WHAT'S NEEDED IN THE WINTER VERSUS THE SUMMER PEAKS, AND BEING ABLE TO BE MORE GRANULAR ON THE NEEDS IN EACH OF THOSE SEASONS.

SO THOSE ARE THE, THE THREE OTHER LARGEST, UH, ISOS IN THE COUNTRY RIGHT NOW, AND THEY ARE DEALING WITH THE EXACT SAME TYPE OF ISSUES WE'RE DEALING WITH.

AND THEY'RE ALL TRYING TO SOLVE THEM WITH MARKET WIDE SOLUTIONS.

THEY'RE ALL TRYING TO DEAL WITH THEM WITH THE TOOLS THAT THEY HAVE AVAILABLE, EITHER THE RELIABILITY STANDARDS THAT WOULD APPLY TO THE BROAD MARKET WITH CAPACITY MARKET TOOLS, WHETHER THEY IF THEY HAVE FORWARD CAPACITY MARKETS, BUT THEY'RE DEALING WITH THEM WITH MARKET-WIDE SOLUTIONS, WHICH IS EXACTLY WHAT TEXAS NEEDS TO DO AND IS DOING BY LOOKING AT TOOLS AND OPTIONS LIKE THE PERFORMANCE CREDIT MECHANISM AS AN EXAMPLE.

IT'S A MARKET-WIDE SOLUTION THAT WOULD AFFECT THE BROADER LONG-TERM RESOURCE ADEQUACY ISSUE THAT WE'RE DEALING WITH.

SO LET ME PAUSE THERE.

UH, BEFORE I CLOSE WITH MY THANK YOUS, IF THERE'S ANY QUESTIONS OR ANY, UM, FEEDBACK ON WHAT I'VE COVERED SO FAR.

OKAY.

WELL, AS I OFTEN, UH, TRY TO DO CONSISTENTLY, I'D LIKE TO CLOSE WITH WITH THANKS AND WITH APPRECIATION TO OUR TEAMS WHO CONTINUE TO, UH, EXECUTE AND DELIVER ON MEANINGFUL CHANGE THAT'S HAVING A VERY SIGNIFICANT IMPACT ACROSS THE MARKET.

OUR AGGREGATED DISTRIBUTION, UH, ENERGY RESOURCE PILOT PROJECT, AS YOU HEARD, AN UPDATE FROM KENAN YESTERDAY HAS GONE FROM AN APPROVAL IN OCTOBER TO BEING READY TO HAVE RESOURCES ONLINE, EITHER LATER THIS MONTH OR IN MAY.

AND A VERY RAPID, UH, RAMP UP AND GETTING READY TO LOOK AT WHAT COULD BE A VERY SIGNIFICANT INNOVATION AND CHANGE IN THE WAY WE CONSIDER RESOURCES ON THE GRID TO HELP IMPROVE RELIABILITY, RESILIENCY AS WELL AS EFFICIENCY.

SO A BIG THANK YOU TO THE ADA ER PILOT PROJECT TEAM THAT REALLY RAN AFTER THIS PRO, THIS PILOT AND GOT IT UP AND RUNNING AND IS GONNA POSITION US FOR SOME GREAT LEARNING THERE.

I ALSO WANNA THANK THE INTRANET, SHAREPOINT FINAL MIGRATION TEAM.

IT'S A VERY SIGNIFICANT, UH, MIGRATION THAT TOOK PLACE AT ADDRESSED, YOU KNOW, COMPLETING THE MIGRATION OF OVER 150 DEPARTMENTAL SITES TO THE NEW PLATFORM, ENHANCING THE USER EXPERIENCE IN DOING THAT BY MODERNIZING SITE NAVIGATION AND SEARCH FUNCTIONALITY.

WE'VE BEEN ABLE TO STRENGTHEN OUR INFORMATION GOVERNANCE BECAUSE OF THE NEW PLATFORM THAT WE'VE ROLLED OUT AND WE'VE ALSO FUTURE, FUTURE-PROOF.

THIS PLATFORM BY PUTTING THIS INTO THE SHAREPOINT ONLINE POSITION, WILL ALLOW US TO CONTINUE TO INNOVATE AND CHANGE MORE EASILY THIS PLATFORM AS NEW, AS NEW SOLUTIONS AND NEW SERVICES COME INTO THE ONLINE PRODUCT.

AND THEN LAST, I'D LIKE TO CALL OUT AN UH, AND THANK THE QUARTERLY STABILITY ANALYSIS TEAM.

THE QUARTERLY SYS, UH, STABILITY ANALYSIS TEAM IS ONE OF THE FINAL TESTS THAT A NEW RESOURCE HAS TO GO THROUGH BEFORE IT CAN BECOME COMMERCIAL AND OPERATE IN THE ERCOT MARKET.

THE FEBRUARY QSA ISN'T

[00:20:01]

AND SO THE TEAM OF PEOPLE THAT COMPLETED THIS QSA SPAN SEVERAL DIFFERENT DEPARTMENTS AS YOU SEE HERE.

AND THIS YEAR'S FEBRUARY Q S A WAS ESPECIALLY BUSY BECAUSE OF SO MANY PROJECTS TRYING TO MAKE THE DEADLINE TO BE READY TO COME ONLINE, UH, THIS SUMMER.

SO I JUST WANNA RECOGNIZE THE LONG HOURS AND THE EXTRA TIME THAT THIS TEAM AND THE OTHER TEAMS ALL EXECUTED OVER THE LAST COUPLE OF MONTHS TO PUSH THESE PROJECTS AND INITIATIVES TO A STATE OF READINESS TO HELP SUPPORT THE CONTINUED OPERATIONS OF THE GRID.

SO THANK YOU TO ALL OF YOU THAT I WILL TURN IT BACK, UH, OVER TO YOU, PAUL.

THANK YOU.

ALL RIGHT, ANY QUESTIONS FOR PABLO BEFORE WE LET HIM SIT BACK NOW? THANK YOU VERY MUCH.

NEXT UP IS AGENDA ITEM SIX, THE INDEPENDENT MARKET MONITOR REPORT.

UH, THERE IS NO REPORT PLANNED FOR FOR TODAY, SO WE WILL MOVE ON.

UM, AND TO AGENDA

[7. TAC Report]

CAITLIN, THANK YOU.

THEY HAVE TO MAKE THE PODIUM A LITTLE SHORTER THAN FOR CLIFF.

I'M CAITLIN SMITH.

I'M THE VICE CHAIR OF THE TECHNICAL ADVISORY COMMITTEE COVERING FOR CLIFF LANGY TODAY.

HE'S IN DC FOR A NATIONAL ELECTRIC CO-OP EVENT.

I THINK SO UHOH, I WAS LOOKING FOR THE LIST OF THE UNOPPOSED RECOMMENDED ITEMS. YEP.

ALL RIGHT.

SO HERE IS THE SUMMARY OF OUR MARCH TECH.

WE, UH, APPROVE THE GOALS FOR TWO OF OUR SUBCOMMITTEES FOR THE PROTOCOL REVISION SUBCOMMITTEE AND THE RELIABILITY AND OPERATIONS SUBCOMMITTEE.

I UNDERSTAND THAT THE WHOLESALE MARKET SUBCOMMITTEE APPROVED THEIR GOALS AT THEIR APRIL MEETING, SO THOSE SHOULD BE ON BOARD FOR THE NEXT, UM, TECH MEETING.

THIS SEEMS TO HAVE A MIND OF ITS OWN.

WE ALSO, UH, FORMED THE CREDIT FINANCE SUBGROUP AND APPROVE THEIR CHARTER.

THIS SUBGROUP IS REPLACING THE OLD CREDIT WORKING GROUP.

UH, THEY ARE A VOTING GROUP.

UM, THEY WILL PROVIDE COMMENTS TOT WHEN NPRS OR OTHER ACTIONS HAVE CREDIT IMPLICATIONS.

THEY'LL PROVIDE INPUT ON CREDIT WORTHINESS STANDARDS.

ALL OF THIS IS IN THE CHARTER THAT WE APPROVED.

UM, THERE ARE SOME QUALIFICATIONS FOR MEMBERS OF THIS GROUP, AND THEY ARE A VOTING GROUP, AND SO THEY HAVE TO HAVE A BACKGROUND IN CREDITOR FINANCE TOPICS AND TECH WILL APPROVE MEMBERS ON KIND OF A ROLLING BASIS AS THEY'RE ADDED.

WE ALSO HAD TWO ADDITIONAL TECH MEETINGS AFTER OUR REGULAR MARCH TECH MEETING ON THE PHASE TWO BRIDGING OPTIONS.

WE PRESENTED THIS IN DETAIL AT THE RELIABILITY AND MARKETS COMMITTEE YESTERDAY.

UM, WE DID VOTE TO ENDORSE ERCOT BRIDGING SOLUTION ON THE O RDC ENHANCEMENT.

UH, THE, THE REASONS FOR THAT WERE KIND OF STICKING TO THE PARAMETERS OF A BRIDGE OPTION.

TECH MEMBERS FELT IT WAS THE SOLUTION THAT, UH, BEST MET THE GOALS OF INCENTIVIZING NEW GENERATION WHILE MAINTAINING EXISTING GENERATION, UH, A SHORT IMPLEMENTATION TIME WHILE STILL FUR FURTHERING THE COMMISSION'S GOALS OF THE PCM.

THERE WERE SIX OPPOSING VOTES FROM THE CONSUMER MARKET SEGMENT.

TWO ABSTENTIONS FROM THE, THE CO-OP AND THE REP SEGMENT.

UH, THE, THE CONSUMER SEGMENT SEEM TO PREFER AN ADDITIONAL ANCILLARY SERVICE LIKE THE, UH, D R S OR UNCERTAINTY PRODUCT.

THEY ALSO RAISE CONCERNS ABOUT TRANSPARENCY OF THE O RDC REVENUES AND MAYBE LOOKING AT SOME OTHER OPTIONS FOR O RDC CHANGES.

AND FINALLY, WE DID APPROVE, UH, THE LOAD PROFILING GUIDE REVISION REQUEST.

UH, THAT REDUCES THE REQUIRED LEAD TIME FOR, UH, OPT-IN ENTITY TO PROVIDE OR COD THE MONTHLY USAGE AND DEMAND VALUES FOR ITS EASY IDS FROM ONE 20 DAYS TO, UH, 60 DAYS.

THIS IS, UH, PENDING PUC APPROVAL AND I WILL CLOSE UNLESS THERE'S ANY OTHER QUESTIONS.

THANK YOU.

OKAY, THANK YOU VERY MUCH.

UH,

[8. Finance and Audit (F&A) Committee Report]

FIRST, BILL FLORES WILL PRESENT AGENDA ITEM EIGHT, WHICH IS FINANCE AND AUDIT COMMITTEE.

UH, THANK YOU CHAIRMAN.

THE INTEREST OF TIME SINCE ALL THE BOARD MEMBERS PARTICIPATED IN, UM, ALL OF THE COMMITTEE MEETINGS.

[00:25:01]

UM, WE NEED TO ACCEPT THE ERCOT CONSOLIDATED FINANCIAL STATEMENTS AUDIT REPORT.

MM-HMM.

, WHICH IS BOARD ITEM 8.1.

UH, IT'S NOTEWORTHY THAT WE, UH, RECEIVED AN UNMODIFIED OUR CLEAN OPINION FROM OUR AUDITORS BAKER TILLEY.

UH, WE NEED TO ACCEPT THE ERCOT TEXAS MAR ELECTRIC MARKET STABILIZATION FUNDING, M L C FINANCIAL STATEMENTS AND AUDIT REPORT.

IT ALSO RECEIVED AN UNMODIFIED OR CLEAN OPINION.

AND THEN LASTLY, ACCEPTANCE OF THE ERCOT TEXAS MARKET STABILIZATION FUNDING AND FINANCIAL STATEMENTS AUDIT REPORT, WHICH RECEIVED AN UNMODIFIED OR CLEAN OPINION.

SO ON BEHALF OF THE FINANCE AND AUDIT COMMITTEE, I MOVE APPROVAL OF THE THREE FINANCIAL STATEMENT AUDIT REPORTS.

MR. MOVED.

ALL RIGHT.

SECOND BY CARLOS.

ALL IN FAVOR? AYE.

AYE.

ANY OPPOSED? THAT PASSES.

THAT'S THE CONCLUSION OF MY REPORT.

THANK YOU.

THANK YOU.

UM, NEXT

[9. Human Resources and Governance (HR&G) Committee Report]

THANK YOU, CHAIRMAN FOSTER, THE COMMITTEE RECEIVED REPORTS ON THE RETIREMENT PLAN COMMITTEE'S, UH, WORK THE STATUS ON THE HEALTH AND WELFARE ACTIVITIES OF THE ORGANIZATION, AND A HU HUMAN RESOURCES OPERATIONS REPORT.

THE COMMITTEE ALSO AND IMPORTANTLY, REVIEWED THE ERCOT, UH, OKRS AND DISCUSSED WITH STAFF THE PROGRESS THAT THEY'RE MAKING ON THIS.

THE NEXT STRATEGIC PLAN, WHICH COVERS THE YEARS 2004, 24 TO 28, AND WE DISCUSSED WITH STAFF THE PROCESS MOVING FORWARD AND THE TIMELINE.

UH, I WOULD LIKE TO MENTION THAT BASED ON THE IMPORTANCE OF THE STRATEGIC PLAN AND THE NEED TO GET, UH, INPUT FROM THE MARKET, WE'RE ASKING THE, UH, COMMITTEE SEG SEGMENT REPRESENTED REPRESENTATIVES TO HELP US WITH THIS PROCESS AND WORK WITH THEIR SEGMENTS SO THAT THEY CAN COME TO THE MEETINGS THAT ARE GONNA TAKE PLACE ON THE STRATEGIC PLAN, UH, WITH ERCOT STAFF AND PROVIDE TRULY STRATEGIC, UH, ADVICE ON WHAT THE GOALS SHOULD BE AND INPUT, UH, AND ASK THAT YOU, UH, NOT BRING UP THE DAY-TO-DAY OPERATIONAL ISSUES AS OTHER FORUMS FOR THAT.

AND SO WE REALLY NEED THE SEGMENT LEADERS TO HELP HELP US IN THAT PROCESS.

UH, WE ALSO, UH, VOTED TO RECOMMENDED TO THE BOARD THE 2020 BOARD AND MEETING DATES, UH, FOR ERCOT.

AND SO AT THAT, I WILL MAKE A MOTION TO APPROVE THOSE 2024 MEETING DATES, UH, AS SET FORTH IN THE MATERIALS.

OKAY.

DO I HEAR A SECOND? OKAY.

UH, BOB, UH, ALL IN FAVOR? AYE.

ANY OPPOSED? SO THAT PASSES.

AND DOES THAT CONCLUDE YOUR REPORT? YES.

THANK YOU.

THANK YOU.

ALL RIGHT.

FOR

[10. Reliability and Markets (R&M) Committee Report]

THANK YOU.

HANG ON ONE SECOND.

ALL RIGHT.

THANK YOU, CHAIRMAN.

TWO VOTING ITEMS HERE REGARDING THE FIRST OF THESE I, UH, VOTING ITEMS. PHASE TWO, MARKET REDESIGN.

BRIDGET SOLUTIONS.

I'D LIKE TO ACKNOWLEDGE THE BOARD RECEIVED A LETTER FROM RETAIL ELECTRIC PROVIDER ON CONNECT ENERGY REGARDING THE TECHNICAL ADVISORY COMMITTEE'S RECOMMENDATION ON THIS MATTER.

BOB, PLEASE PROCEED.

THANK YOU, CHAIRMAN.

PICKING UP ON THAT, UH, THE FIRST TOPIC THAT WE COVERED IN DEPTH WAS THE ERCOT STAFF RECOMMENDATION, UH, TO THE COMMITTEE ON THE BRIDGING SOLUTION, TO WHICH, UM, WE APPROVE THE COMMERCIAL SOLUTION AS PRESENTED BY KONAN AS DESCRIBED IN THE MATERIALS HERE.

WE ALSO HEARD FROM TACK ON THEIR VIEWPOINTS, WHICH ALSO ENDORSED THE COMMERCIAL SOLUTION AS WELL.

SO THE RECOMMENDATION TO THE FULL BOARD IS APPROVAL OF THE COMMERCIAL SOLUTION FOR THE BRIDGING SOLUTION OF THE ORRC, UH, O C R D.

UM, RECOGNIZING ALSO THAT THERE IS A REGULATORY SOLUTION THAT MAY COME INTO PLAY, WHICH COULD BE SOMETHING LIKE AN RMR. SO DEPENDING ON WHICH PATH IS TAKEN, WHETHER IT'S REGULATORY OR COMMERCIAL, IF IT'S COMMERCIAL, IT WOULD BE THE O R D C AS PRESENTED BY CANON.

WE ALSO TALKED ABOUT, UH, REAL TIME PRICE CORRECTION REGARDING THE GENERIC TRANSMISSION CONSTRAINT CALCULATION, AND THE COMMITTEE ALSO RECOMMENDS TO THE FULL BOARD TO APPROVE THAT.

AFTER WE HAD A FULL DISCUSSION ON THAT, WE HAD COMMITTEE BRIEFS TALKING ABOUT SYSTEM PLANNING AND WEATHERIZATION UPDATE, UH, INFORMATIVE TOPIC ON WEATHERIZATION

[00:30:01]

WE ALSO COVERED TECHNOLOGY, TALKED ABOUT AUTOMATED TESTING, AND THEN KEY PROJECTS UPDATE, ALL OF WHICH HAVE A GREEN STATUS.

UH, WE WENT THROUGH A REVIEW OF THE REVISION REQUEST THAT ARE OUTSTANDING, AND, UH, THE ORGANIZATION CONTINUES TO STAY ON TOP OF THE, UH, NPRS THAT ARE OUT THERE AND, AND ADDRESS THEM ON A TIMELY BASIS.

AND THEN WE WENT THROUGH A DRAFT OF THE SELF-EVALUATION SURVEY, SO THAT I'D LOOK FOR THE APPROVAL FOR THE COMMERCIAL SOLUTION TO THE BRIDGING SOLUTIONS AND THE MARKET PRICE CORRECTION FOR THE TRANSMISSION CONSTRAINT.

ALL RIGHT.

MOTION BY BOB.

SECOND BY JOHN.

ALL IN FAVOR? ANY OPPOSED? SO THAT PASSES.

AND WAS THERE ANY, JUST TO MAKE SURE, OKAY, SO I THINK WE, LET'S SEE IF WE CAN TAKE 'EM SEPARATELY BECAUSE THERE ARE KIND OF THE DISCRE ISSUES.

SO WE'LL GO WITH BOB'S MOTION ON 10.1, WHICH IS TO RECOMMEND THE ERCOT STAFF RECOMMENDATION ON THE BRIDGING SOLUTION.

OKAY.

SO THAT, THAT WAS THE MOTION THAT JOHN SECOND.

AND ALL IN FAVOR? ALL RIGHT.

ANY OPPOSED? ALL RIGHT.

AND THEN THE, AND WE HAVE ONE ABSTENTION FROM COURTNEY.

OKAY.

COURTNEY ABSTAINS, THE SECOND ONE FOR THE TRANSMISSION CONSTRAINT, UH, PRICE ADJUSTMENT.

OKAY.

SO AGAIN, JOHN SECONDS.

ALL IN FAVOR? AYE.

ANY OPPOSED? ABSTAIN? NO.

OKAY.

SO THAT PASSES BOTH OF THOSE PASS.

THANK YOU.

UM, THE LAST ITEM BEFORE WE MOVE INTO EXECUTIVE SESSION IS AGENDA ITEM AT 11, WHICH IS OTHER BUSINESS.

WOULD ANY BOARD MEMBER LIKE TO RAISE ANY OTHER BUSINESS? OKAY.

UH,

[Convene Executive Session]

WE'LL TAKE A FIVE MINUTE BREAK BEFORE CONVENING AN EXECUTIVE SESSION.

THERE ARE THREE VOTING ITEMS BEING DISCUSSED IN EXECUTIVE SESSION.

SO GENERAL SESSION WILL RECONVENE AT THE CONCLUSION OF EXECUTIVE SESSION.

CHAIRMAN LAKE, THIS MEETING OF THE PUC IS HEREBY RECESS.

THANK YOU.

ALL RIGHT.

GENERAL SESSION IS NOW RECESSED.

OKAY.

GOOD AFTERNOON.

I'M PAUL FOSTER, ERCOT, BOARD CHAIR.

THE GENERAL SESSION OF THIS MEETING IS NOW RECONVENED THIS MEETING THAT HE USED TO USE HEREBY RECONVENED.

OKAY.

UH, THIS MEANS THE PUBLIC.

OH, HELLO.

[12. Vote on Matters from Executive Session]

THE THREE ITEMS ARE RELATED.

SO I'D LIKE TO ADDRESS THESE ITEMS IN ONE MOTION.

IF POSSIBLE.

I'LL ENTERTAIN A MOTION TO APPROVE THE SELECTION OF BAKER TILLEY AS THE INDEPENDENT FINANCIAL AUDITOR TO PERFORM THE FOLLOWING FOR THE YEAR ENDING DECEMBER 31ST, 2023.

FIRST, FINANCIAL STATEMENTS, AUDIT, SERVICERS, CERTIFICATE, REPORT, AND FORM 99, A REVIEW FOR ERCOT.

SECOND, THE FINANCIAL STATEMENTS AUDIT AND CONSOLIDATION PROCEDURES FOR TEXAS ELECTRIC MARKET STABILIZATION FUNDING M L L C.

AND THIRD, THE FINANCIAL STATEMENTS AUDIT AND CONSOLIDATION PROCEDURES FOR TEXAS ELECTRIC MARKET STABILIZATION FUNDING.

N L C.

DO I HEAR A MOTION? MS. CHAIRMAN, ON BEHALF OF THE FINANCE AND AUDIT COMMITTEE, I MOVE APPROVAL OF THOSE ITEMS. OKAY, SECOND, THE MOTION.

JULIE, THANK YOU.

ALL IN FAVOR? AYE.

AYE.

ANY OPPOSED? THAT PASSES.

UM, AND THANK YOU.

THIS MEETING AND THE ERCOT BOARD OF DIRECTORS IS NOW ADJOURNED AND THE WEBCAST WILL BE CONCLUDED.

CHAIRMAN LEE, THIS MEETING, THE PUBLIC UTILITY COMMISSION OF TEXAS IS HERE BY ADJOURNED.

THANK YOU.

THANK YOU ALL.