[00:00:02]
BEFORE WE GET STARTED WITH THE SPECIAL TECH MEETING THIS MORNING, LET ME JUST GO THROUGH THE BRIEF MEETING REMINDERS.
BRITTANY'S ALREADY GOT THIS INFORMATION IN THE CHAT, BUT, UM, WE ARE USING THE CHAT TO FUNCTION, UH, THE CHAT FUNCTION TO QUEUE FOR QUESTIONS AND COMMENTS.
PLEASE WAIT FOR THE CHAIR TO RECOGNIZE YOU BEFORE YOU BEGIN SPEAKING.
AS WE BEGIN THE BALLOTING PROCESS, PLEASE REMEMBER IF YOU'RE A SEATED REPRESENTATIVE, TO UNMUTE YOURSELF AS WE APPROACH YOURSELF.
AND THEN AFTER YOU HAVE CAST YOUR BALLOT, PLEASE MUTE YOURSELF.
AND THEN AT THE WEBEX END FOR ANY REASON, PLEASE GIVE US JUST A FEW MINUTES.
YOU SHOULD BE ABLE TO LOG BACK IN, UH, WITH THE SAME MEETING DETAILS.
AND WITH THAT CLIFF, WE DO HAVE A QUORUM AND ARE READY TO GET STARTED.
GOOD MORNING EVERYONE, AND HAPPY MONDAY TO YOU.
I HOPE EVERYONE HAD A GREAT MEMORIAL DAY WEEKEND.
UH, JUST TO RECAP, UH, WELL START
[1. Antitrust Admonition]
OUT WITH OUR ANTITRUST ADMONITION AND OUR DISCLAIMER THERE.UH, COREY'S GOT THOSE ON THE SCREEN.
WHILE YOU'RE READING THROUGH THOSE, I WANTED TO POINT OUT THAT WE DO HAVE, UH, THREE ALTERNATE REPS TODAY.
WE'VE GOT, UH, BLAKE HOLT HERE FOR EMILY JOLLY OF L C R A.
WE'VE GOT BOB WHITMEYER STANDING IN FOR JOSE GATAN OF DENTON, AND WE'VE GOT DIANA COLEMAN STANDING IN FOR DAVID KEY WITH UH, C P S, SO, ALRIGHT.
WELL CONSIDER YOURSELF ADMONISHED.
[2. NPRR1177, Enhance Exceptional Fuel Cost Process – URGENT (Vote)]
UP THE AGENDA REAL QUICK JUST TO RECAP WHERE WE WERE AT, UH, AS YOU RECALL, UH, A LET NPR R 1177, WE HAD SOME, UH, PRETTY ROBUST DISCUSSION ON THAT SPECIFIC NPR R AT OUR LAST TECH MEETING.UH, THAT BEING SAID, WE WERE PRETTY CLOSE TO COMING TO A SOLUTION, BUT I THINK IT, UH, DESERVED A LITTLE BIT MORE TIME FOR US TO, UM, KIND OF CHEW ON IT A LITTLE BIT AND TO TRY TO, UH, COME UP TO A RESOLUTION THAT I THINK WAS ACCEPTABLE TO ALL THE PARTIES THAT HAD A REAL KEEN INTEREST IN THAT PARTICULAR ITEM.
SINCE THAT TIME, WE'VE HAD A COUPLE OF COMMENTS FILED.
FIRST ONE FROM CONSUMERS, UH, AND THEN FOLLOWED BY COMMENTS FROM CONSTELLATION THERE.
SO WE'LL GO AHEAD AND START OFF WITH THE CONSUMER COMMENTS.
UM, I ASSUME, ERIC, THAT YOU WANTED TO GO AHEAD AND, UH, SPEAK TO THOSE FIRST, UH, IF THAT'S OKAY, OR DID YOU WANNA DEFER TO SOMEONE ELSE? NO, I, I'M HAPPY TO DO IT.
JUST WANNA MAKE SURE YOU CAN HEAR ME.
UM, AND ACTUALLY I'D, UH, LIKE TO, UH, PREVIEW FOR PEOPLE THAT WE HAVE, I THINK WORKED THIS OUT, UM, SO THAT THE LATEST CONSOLATION COMMENTS ARE ON TOP OF CONSUMER COMMENTS.
SO IF IT WOULD BE HELPFUL FOR PEOPLE'S SCHEDULES ON THE MONDAY MORNING, I'D BE HAPPY TO START THE MEETING BY MOVING FOR THE LATEST CONSOLATION COMMENTS, THAT WOULD BE FINE WITH ME.
DID YOU WANNA TALK THROUGH THOSE FIRST OR DID YOU WANNA LET ANDY TALK THROUGH 'EM? UH, SURE.
SO WHAT I THINK THE, SOME OF THESE COMMENTS DO IS TO, UH, CREATE, UH, A VERSION OF ONE OF THE GUARDRAILS THAT CONSUMERS ASKED FOR, UM, AS WELL AS, UH, ESTABLISH A, UH, SUNSET DATE, UH, FOR US TO WORK OUT A MORE PERMANENT SOLUTION.
UM, AND THEN THE, THE CONSUMER COMMENTS THAT WERE FILED HAVE ONE THING THAT'S NOT IN THE LANGUAGE, BUT IN THE INTRODUCTORY, UH, SECTION, WHICH IS A REQUEST THAT WE REFER, UM, FUEL SUPPLY CONTRACT, UH, STANDARDIZATION AS A CONCEPT TO ERCOT TO MAKE IT EASIER FOR ERCOT TO DETERMINE WHAT COSTS ARE ALLOWABLE AND WHAT COSTS ARE NOT.
SO THAT GENERATORS THAT VOLUNTARILY CHOOSE TO USE STANDARDIZED CONTRACT LANGUAGE AND THEIR GAS SUPPLY CONTRACTS OR FUEL SUPPLY CONTRACTS COULD HAVE MORE CERTAINTY ABOUT COST RECOVERY.
UM, SO THAT, THAT'S AN ISSUE THAT IS OBVIOUSLY COMPLEX, UM, BUT WE THINK IT WOULD BENEFIT EVERYBODY IF THERE WAS SOME, UM, SOME CERTAINTY THERE AND, AND SOME STANDARDIZATION.
AND SO WE'RE ASKING THAT THAT ISSUE JUST MERELY BE REFERRED TO WS FOR DISCUSSION.
UM, AND OBVIOUSLY WE CAN'T DO THAT AS PART OF A MOTION ANYMORE, AS WE'VE DISCUSSED MANY TIMES.
SO I'M HAPPY TO REFER THAT TO WMS. I DON'T KNOW IF, UH, ERIC IS ON THE PHONE, BUT, UM, WELL, IF HE'S NOT, THEN WE'LL, UH, MAKE SURE WE GET THAT TO HIM.
SO, UH, THAT'S, THAT'S REALLY IT.
I'M HAPPY TO ANSWER ANY QUESTIONS.
UM, BUT I THINK WE HAVE, UH, LANDED IN A GOOD PLACE AND I APPRECIATE TACK GIVING US THIS TIME TO NEGOTIATE.
ERIC, I'LL DEFER TO, UH, ANDY REAL QUICK, DID YOU HAVE ANYTHING YOU WANTED TO ADD ON THIS PARTICULAR ITEM? Y YES, CLIFF, UH, CAN YOU HEAR ME? YES, SIR, I SURE CAN.
[00:05:01]
YEAH, JUST REALLY BRIEFLY, THANK YOU EVERYONE, UH, ER COTTON FOR ACCOMMODATING THIS, THIS SPECIAL TAG MEETING.UH, LIKE ERIC SAID, UM, WE'RE SUPPORTIVE OF THE CONSUMER COMMENTS IN INCLUDING THE GUARDRAILS.
WE DID HAVE TWO MINOR EDITS THAT YOU JUST WANTED TO SHOWCASE FOR THIS GROUP IN CASE YOU DIDN'T HAVE A CHANCE TO SEE IT YET.
UH, THE FIRST IS AROUND THE, UM, SUNSET DATE.
I BELIEVE THE, UM, ORIGINALLY PROPOSED 2027 SUNSET DATE.
UH, THE CONSUMERS PROPOSED CHANGE TO 2025.
UH, WE JUST ADDED LANGUAGE THAT SAYS IN THE BUSINESS CASE THAT IT'S, IT'S THE 2025 LANGUAGE OR AS EXTENDED BY AN NPR TO, UM, LEAVE THE ROOM IN CASE THAT A MORE HOLISTIC LONG-TERM SOLUTION, UH, TAKES LONGER THAN WE EX ANTICIPATED.
OR IT DE IT'S DETERMINED THAT AN IMPLEMENTATION TIMELINE EXCEEDS THE SUNSET DATE.
SO THAT, UM, I THINK IF WE'RE ALL WORKING IN GOOD FAITH, UH, STAKEHOLDERS WILL AGREE TO EXTEND THIS SO THAT WE, WE, UH, DON'T HAVE A GAP IN THE PROTOCOLS FOR RECOGNIZING THOSE COSTS.
UH, THE SECOND EDIT THAT CONSTELLATION PROPOSES HERE IS AROUND THE ATTESTATION LANGUAGE.
ORIGINALLY, WE HAD PUT ADDED ADDITIONAL ATTESTATION LANGUAGE THAT FUEL CONTRACTUAL CAUSE MUST STATE THAT THEY'RE KNOWN AND ACTUAL, UM, THE CONSUMERS, UH, PROPOSED AN EDIT TO SAY THAT THEY WILL BE ACCURATE AND VARIABLE.
UM, CONSOLATION IS SUPPORTIVE OF THAT AS LONG AS WE ADD THAT THE ATTESTATION FOR THE COSTS THAT ARE ACCURATE AND VARIABLE ARE BASED ON THE DISPATCH OF THE RESOURCE.
UM, IF, IF MANY OF YOU RECALL AT W M W G, WE WENT OVER WHY THAT'S THE CASE, WHICH IS, UM, YOU KNOW, THERE ARE MANY INSTANCES WHERE WE MAY NOT KNOW UNTIL, UH, DAYS AFTER THE OPERATING DAY WHAT THE FINAL COSTS ARE GONNA BE.
UM, BUT WHAT WE DO KNOW IS BASED ON A, UM, EXPECTED DISPATCH OF THE UNIT AND THE CONTRACTUAL COSTS, WHAT THOSE COSTS ARE GOING TO BE.
UM, SO WE CAN'T PREDICT HOW SCD IS GONNA DISPATCH THE UNIT IN REAL TIME, BUT WHAT WE CAN DO IS MAKE SURE THAT THE EOCS ALIGN WITH THE EXPECTED COST WITHIN THE FUEL CONTRACT.
AND SO WITH THAT EDIT, WE'D, WE'D BE COMFORTABLE WITH MAKING THAT AT ADAPTATION.
UH, THE LAST COMMENT I'D LIKE TO MAKE IS THAT, UM, MPR R 1177 IS A VAST IMPROVEMENT TO WHAT WE HAVE TODAY, WHICH TODAY THERE REALLY ISN'T ANY PROTECTIONS OR THE ABILITY TO RECOGNIZE YOUR COSTS IN REAL TIME WITHOUT THE RISK OF MITIGATION.
UH, HOWEVER, THERE'S STILL A, A GAP IN THE PROTOCOLS WHERE, UM, A MITIGATED UNIT THAT IS DISPATCHED UN ECONOMICALLY DOESN'T HAVE ANY POTENTIAL MAKE OR OR COST RECOVERY MECHANISMS. UH, THIS WAS DISCUSSED AT P R S THAT EVERY OTHER ISO HAS THAT PARTICULAR COST RECOVERY MECHANISM.
AND SO I JUST WANTED TO HIGHLIGHT THAT AND, AND, AND LOOK FORWARD TO THE DISCUSSION ON A LONG-TERM SOLUTION AS WE LOOK TO ADDRESS ISSUES AROUND, UH, AROUND THIS.
UM, SO WITH THAT, I MEAN, WE'RE SUPPORTIVE WITH THESE MINOR EDITS.
AND CLIFF, I'LL HAND IT BACK TO YOU UNLESS ANYONE HAS ANY QUESTIONS.
THANKS FOR THE ADDITIONAL COLOR COMMENTARY THERE, ANDY.
UM, I SEE NO ONE IN THE QUEUE.
DOES ANYONE HAVE ANY QUESTIONS FOR EITHER ERIC OR ANDY? WE'VE GOT BLAKE HOLT WITH L C R A.
AND THIS QUESTION MAY BE DIRECTED MOSTLY TO ERCOT.
UH, I NOTICED THAT THE SUNSET DATE IS ONLY STATED IN THE BUSINESS CASE AND NOT IN PROTOCOL LANGUAGE.
DOES ERCOT HAVE WHAT IT NEEDS TO ENFORCE THE SUNSET DATE, OR DOES THERE NEED TO BE A GRAY BOX OR A HARD CODED DATE IN THE LANGUAGE TO, TO HELP OUT WITH THIS? HEY, CLIFF, THIS IS ANNE BORIN.
YEAH, IF, IF WE THE SUNSET, THAT WOULD BE INCLUDED IN THE MOTION.
AND THEN WHEN WE PUT THIS IN THE PROTOCOLS, WE WOULD CAPTURE IT IN A GRAY BOX.
AND, AND JUST FOR ANYONE THAT WANTS TO DRAFT A FUTURE SUNSET, WHEN WE FIRST DRAFTED IT, WE TRIED TO CREATE OUR OWN GRAY BOX AND ANN'S TEAM TOLD US THAT WASN'T THE WAY TO DO IT AND TO DO IT THIS WAY INSTEAD.
UM, SO SAVE US US SOME TIME AND LET THEM DO ALL THE GRAY BOXES.
BLAKE, DOES THAT ANSWER YOUR QUESTION, SIR? THANKS GUYS, APPRECIATE IT.
ANY OTHER COMMENTS OR QUESTIONS FOR, UH, ERIC OR, UH, ANDY OR, OR ANN FOR THAT MATTER? ALL RIGHT, THE QUEUE IS EMPTY, SO I HEAR NO HERE AND SEE NO COMMENTARY OR QUESTIONS FROM ANYONE.
SO WE'LL GO AHEAD AND TAKE THIS ONE UP.
UM, A ASSUMING WE'LL HAVE A MOTION HERE IN JUST A MINUTE, BUT WE'LL TAKE THIS ONE UP AS A SEPARATE BALLOT AS FAR AS THAT'S CONCERNED.
SO YOU SEE A PROPOSED MOTION ON THE SCREEN THERE, UM, AS CRAFTED BY, UH, THE ERCOT, UM, STAKEHOLDER SERVICES FOLKS.
[00:10:02]
UM, GIVE YOU A SECOND TO READ THROUGH THAT, AND THEN I'LL BE LOOKING FOR A MOTION ON THAT.SO WE'VE GOT A MOTION FROM ERIC.
WE'VE GOT A SECOND FROM BOB HILTON.
ANY ANY COMMENTS OR QUESTIONS ON THE MOTION? ALL RIGHT, HEARING NONE, COREY, IT'S ALL YOURS.
ALRIGHTY, THANK YOU VERY MUCH.
SO ON THE MOTION, WE WILL START UP WITH THE CONSUMER SEGMENT WITH MARK.
CHRISTIAN, ACTUALLY DOESN'T LOOK LIKE CHRISTIAN'S WITH US JUST YET ABOUT CLIFF.
ONTO OUR INDEPENDENT GENERATORS.
ON OUR IPMS. JEREMY? YES, THANK YOU.
UH, I THINK SETH HAS SENT PROXY FORM TO ME.
I WILL PAUSE A SECOND FOR SUSIE TO CONFIRM SHE'S GOT WHAT SHE NEEDS FOR ME TO FLAG THAT AS SUCH.
I'M SORRY, I, I DON'T BELIEVE I HAVE IT.
COULD YOU CONFIRM SETH HAS THE PROXY TO WHO, UH, REMI IS SPEAKING UP REMI? I, I DON'T BELIEVE I HAVE THAT.
UM, YEAH, I HAVE FOR A WMS MEETING, BUT I DON'T HAVE FOR ATTACK MEETING.
UM, I'LL FORWARD YOU THE EMAIL RIGHT NOW.
UH, BOB, JOSE, YOU WITH US? BOB, I SAW YOU COME OFF MUTE, BOB, BUT I STILL, I'M NOT HEARING YOU.
AND COREY, I DO HAVE THE, UH, PROXY DESIGNATION FOR, UH, SETH TO REMI, SO THAT IS VALID.
AND TO DOUBLE CHECK THAT WOULD A YES FOR SETH? YES.
AND I WANTED TO SAY THANKS TO TACK FOR INDULGING HAVING A SEPARATE MEETING TO ADDRESS THIS SPECIFIC NPR R WANTED ALSO, UH, LET YOU KNOW THAT, UH, SINCE THAT NPR R WAS APPROVED TODAY, UH, IT WILL, OR IT CAN GO TO THE JUNE 29TH P C T OPEN MEETING, ALONG WITH THE OTHER URGENT REVISION REQUESTS THAT WE RECENTLY, UH, SENT ALONG TO R AND M AND TO THE BOARD.
[3. TAC Comments - NPRR1169, Expansion of Generation ResourcesQualifi ed to Provide Firm Fuel Supply Service in Phase 2 of the Service - URGENT (Possible Vote)]
ON THERE WAS NOT A PART OF OUR DISCUSSION, UH, AT, AS, AS A TOPIC OF THIS PARTICULAR MEETING WHEN WE OPTED TO SET THIS PARTICULAR MEETING, UH, A COUPLE WEEKS AGO.THAT BEING SAID, NPR R 1169, UH, WE'VE GONE AHEAD AND ADDED TO THE AGENDA FOR DISCUSSION TODAY.
UM, FOR THOSE OF YOU THAT ARE PROBABLY ALREADY AWARE, THERE WAS A PRETTY LENGTHY DISCUSSION AT THE MAY 25TH OF P U C T OPEN MEETING TO TALK SPECIFICALLY
[00:15:01]
ABOUT, UH, THIS PARTICULAR ISSUE AND FIRM FUEL SUPPLY SERVICE BEING PROVIDED BY QUALIFYING PIPELINES.UM, THERE WAS SOME CONCERN THAT THERE MAY BE AN ABILITY FOR STORAGE TO BE EFFICIENTLY USED AND EFFECTIVELY USED TO SERVE, UH, POWER PLANTS IN ONE REGION OF THE STATE, BUT THEY WOULD MAYBE UNNECESSARILY BE DISQUALIFIED FROM PROVIDING THE FIRM FUEL SERVICE IF THEY, UH, REPRESENTED OR RATHER, UH, SERVED A L D C POTENTIALLY IN ANOTHER PART OF THE STATE, UH, AND MAY BE PART OF THE SAME PIPELINE SYSTEM THERE.
AND I'LL, I'LL ASK OTHERS TO CLARIFY THIS DISCUSSION A LITTLE BIT MORE BASED ON WHAT THEIR UNDERSTANDING OF IT WAS AS WELL.
BUT THE, UH, PUBLIC UTILITY COMMISSION URGED US, THE COMMISSIONERS URGED US TO, TO TALK ABOUT THIS.
UM, THEY WANTED TO MAKE SURE THAT, UH, THEIR INTENTION, AS I UNDERSTOOD IT, WAS THAT IF THERE WAS SUCH A DISTINCTION AS I DESCRIBED IT A LITTLE BIT AGO, WHERE YOU COULD HAVE SOMEONE IN A, OR A PIPELINE IN A SPECIFIC PORTION OF THE STATE THAT WOULD NOT BE AFFECTED BY CURTAILMENT, UH, DUE TO HAVING AN LDC THAT'S LOCATED ELSEWHERE IN THE STATE, UM, THEY WANTED TO MAKE SURE THAT, THAT THERE WERE SOME REPS AND WARRANTIES THAT WERE PUT IN PLACE SO THAT IF, IF THERE WA THAT POSSIBILITY OCCURRED SO THAT THEY COULD EFFECTIVELY SERVE A POWER PLANT, UH, FROM STORAGE THROUGH THEIR PIPELINE SYSTEM WITHOUT CURTAILMENT, UM, THAT THEY COULD DO SO.
UM, BUT THEY ALSO URGED, THE COMMISSION ALSO URGED THAT THAT ABILITY TO, TO PROVIDE THAT SERVICE, UH, WOULD NEED TO BE VERIFIABLE.
AND SO ERCOT WOULD NEED TO BE ABLE TO HAVE A MEANS OF GOING IN THERE AND VERIFYING THAT THAT TYPE OF SERVICE WAS TRULY AVAILABLE, THAT IT WAS NOT, UH, POTENTIALLY THE SUBJECT OF CURTAILMENT OR A VERY HIGH UNLIKELY DEGREE OF CURTAILMENT.
AND SO WE'RE GONNA, WE'VE, WE'VE GOT NPR R 1169 THAT WE'VE ALREADY PASSED, UH, THROUGH TAC WITH THE RECOMMENDATION FOR APPROVAL.
UM, THAT ONE WILL, WE ARE EXPECTING THAT ONE TO GO TO R AND M, UH, NEXT WEEK AND, OR TWO WEEKS FROM NOW, I GUESS IT IS.
AND SO ANYWAYS, WE CAN'T AT THIS POINT IN TIME, RECONSIDER NPR R 1169, BUT WHAT WE CAN DO IS FILE ADDITIONAL COMMENTS ON NPR R 1169 THAT MAY CLARIFY, UH, OUR UNDERSTANDING OR CLARIFY OUR UNDERSTANDING BASED ON THE COMMISSION'S DISCUSSION AND SO FORTH.
UM, I KNOW WE DO HAVE A PRESENTATION FROM JOHN ARNOLD WITH LOCK, LORD, UM, I'VE GOT A FEW PEOPLE IN THE QUEUE.
AND SO I WAS GONNA ASK, UM, UH, BRIAN SAMS FOLLOWED BY BOB WHITMEYER, UM, TO GO AHEAD AND, AND, AND, AND SPEAK AND, AND TRY TO CLARIFY ANYTHING THAT I MAY HAVE MISSED THERE.
UH, DEVITA, IF YOU HAVE ANYTHING ADDITIONAL THAT YOU'D LIKE TO OFFER, I'D ENCOURAGE YOU TO, TO OFFER THAT AS WELL.
BUT WE'LL START WITH BRIAN, UH, AND THEN MOVE TO BOB.
CAN YOU ALL HEAR ME? YES, SURE CAN.
IT'S BEEN A REALLY BUSY MONTH FOR OUR INDUSTRY, AND I THINK THIS ISSUE HAS BEEN KIND OF A TERTIARY THING FOR A LOT OF US.
AND SO WE REALLY APPRECIATE THE OPPORTUNITY TO PROVIDE SOME ADDITIONAL DETAILS THIS MORNING.
AS CLIFF NOTED, I'VE GOT JOHN ARNOLD HERE WITH US.
HE'S OUTSIDE COUNCIL FOR KINDER MORGAN AND ENTERPRISE AND JOHN PRACTICES BOTH AT THE COMMISSION AND THE RAILROAD COMMISSION, AND IS AN EXPERT REGARDING RAILROAD COMMISSION PRACTICES.
UM, ESSENTIALLY WE'RE OFFERING AN ALTERNATIVE DEFINITION OF QUALIFYING PIPELINE THAT MEETS THE STANDARD, WE THINK THAT WAS OUTLINED BY THE COMMISSION.
WE SUGGEST PERFORMANCE STANDARDS FOR THE INTERNET STATE SYSTEM THAT REMOVE RISK, AND ALSO EXPLAIN HOW THE RAILROAD COMMISSION RULE ON CURTAILMENT ISN'T APPLICABLE TO THIS ARRANGEMENT, WHICH I THINK ANSWERS ONE OF THE COMMISSION'S MAIN CONCERNS.
AND SO THE GOAL HERE REALLY IS TO ANSWER ANY QUESTIONS FROM, FROM TACK AND, UH, FOR OUR ENDORSED DEFINITION TO MOVE FORWARD TO THE RMC AND BOARD HERE IN A COUPLE WEEKS.
AND, UM, WITH THAT, I WAS GONNA TURN IT OVER TO JOHN TO KIND OF WALK THROUGH THIS PRESENTATION, BUT I KNOW THAT BOB HAS A, A Q2 AND MAYBE, UM, UH, WE CAN ANSWER THAT AS PART OF THE PRESENTATION, IF THAT'S OKAY.
BOB, BOB, DO YOU YIELD YOUR, YOUR TIME OR WOULD YOU RATHER COMMENT NOW? SO I THINK HE'S HAVING MICROPHONE PROBLEMS HERE, SO WE'LL GO AHEAD AND GO MOVE ON TO JOHN ARNOLD THEN, AND BOB WILL COME BACK TO YOU AFTER THAT.
UM, SO I, IF, IF YOU AS A GROUP WILL INDULGE ME A BIT, I WANNA TAKE A STEP BACK FROM THE, THE PREFACE THAT CLIFF OFFERED, UM, BECAUSE IT'S IMPORTANT I THINK, TO UNDERSTAND WHY THIS, UM, HAS BEEN DIFFICULT TO, TO DO FOR THE P U C.
[00:20:01]
MENTIONED, I KNOW THAT THERE HAVE BEEN SORT OF LARGER, MORE EXISTENTIAL ISSUES CHALLENGING THE P U C, UM, AND, AND THAT PROBABLY HAS CONTRIBUTED TO, UM, ITS SORT OF, UM, SLOW GRASP OF SOME OF THESE CONCEPTS THAT COME FROM A DIFFERENT REGULATORY ENVIRONMENT IN TEXAS.UM, THAT'S NOT FOR LACK OF TRYING.
WE'VE BEEN ENGAGED WITH THE COMMISSION AND WITH ERCOT FOR WELL IN EXCESS OF A YEAR ON THESE ISSUES.
AND SO HOPEFULLY, UM, SOME OF THIS IS NOT TOO REMEDIAL FOR YOU, BUT I THINK IT CULMINATES IN, IN MEETING WHAT I BELIEVE IS THE STANDARD THAT THE PUBLIC UTILITY COMMISSION IS TRYING TO ACHIEVE.
UM, CAN YOU MOVE TO THE FIRST LINE, PLEASE? SO THIS ALL IS, AS YOU WELL KNOW, IS TRIGGERED BY A CONCERN ABOUT THE QUALIFYING PIPELINE DEFINITION.
THE, THE CONCERN WITH WHICH FROM THE STANDPOINT OF THE INTRASTATE GAS PIPELINE AND STORAGE RESOURCES IS THAT IT PROHIBITS A UTILITY PIPELINE.
SO THAT'S THAT WHEN YOU SAY UTILITY, UM, THAT'S THE SPECIFIC REGULATORY AND STATUTORY DEFINITION, EVEN FOR THESE LONG HAUL PIPELINES THAT DELIVER HIGH VOLUMES OF GAS TO GENERATORS.
UM, IT PROHIBITS UTILITY PIPELINES WITH FIRM CONTRACTS TO HUMAN NEEDS AND LDC CUSTOMERS FROM PARTICIPATING.
UM, THE PROBLEM WITH THAT IS THE WAY IN WHICH THE INTERSTATE PIPELINE AND STORAGE SYSTEM IS DEVELOPED, AND, AND THAT IS THAT IT IS DEVELOPED TO SERVE BOTH HUMAN NEEDS AND THE LARGE GENERATORS.
AND MORE PARTICULARLY WITH RESPECT TO THE WORD UTILITY IN MANY CASES.
AND CERTAINLY IT, IT'S THE CASE WITH KINDER MORGAN'S PIPELINE.
THE UTILITY IS ACTUALLY THE OWNER OF THE WHOLE SYSTEM.
SO AN OBLIGATION ON ONE PORTION OF THE SYSTEM, UH, IS ENOUGH TO ELIMINATE THAT PIPELINE SYSTEM AS A WHOLE BY VIRTUE OF ITS OWNERSHIP AT THE UTILITY LEVEL, UH, FROM PARTICIPATING IN THE FIRM FUEL SUPPLY SERVICE, THE RESULT OF WHICH IS THAT IT ELIMINATES A SIGNIFICANT AMOUNT OF THE GAS THAT COULD OTHERWISE SUPPORT GENERATION RESOURCES OFFERS INTO THE FIRM FUEL SUPPLY SERVICE.
YOU, YOU SEE, 85% OF ERCOT GENERATION RESOURCES ARE SERVED BY INTERSTATE PIPELINES.
UH, 63% OF THE WITHDRAWAL CAPACITY FROM STORAGE IS INTRASTATE IN TEXAS.
AND BY VIRTUE OF THE WAY THEY, THAT THEY DEVELOP, AND IT MAKES SENSE IF YOU THINK ABOUT IT, ALL THE SIGNIFICANT INTRASTATE PIPELINE SYSTEMS THAT SERVE GENERATORS ALSO SERVE LDCS.
BUT WE HAVE WORKED TO CREATE A FAR MORE SECURE DELIVERY PATH, IF YOU WILL.
AND I THINK THAT DELIVERY PATH IS KEY, UM, IN EVALUATING WHAT THE PUBLIC UTILITY COMMISSION WANTS WITH RESPECT TO NPR R R 1169 AS APPROVED BY TAC AND THEN WITH ONE MINOR MODIFICATION THAT WE'LL, UM, DISCUSS TODAY.
SO TURNING SPECIFICALLY TO THE DISCUSSION AT THE OPEN MEETING, UM, AGAIN, IT'S BEEN DIFFICULT AND I KNOW THAT THE COMMISSIONERS HAVE HAD JUST, YOU KNOW, TREMENDOUS, UM, DEMANDS ON THEIR TIME.
UM, THE DISCUSSIONS ARE SORT OF FAR RANGING AND HIGHLY SPECULATIVE, AND THEY'RE OFTEN VERY INACCURATE FROM THE STANDPOINT OF THE WAY THAT THE SYSTEM ACTUALLY WORKS.
UM, THE, THE GUIDANCE THAT YOU HEARD IF YOU WERE FOLLOWING WAS THAT THEY WANT NO HUMAN NEEDS SERVICE CUSTOMER FIRM CONTRACT INTERPOSED BETWEEN THE STORAGE RESOURCE AND THE, AND THE GENERATION RESOURCE TO AVOID THE IMPACT OF CURTAILMENT THAT W THAT ARISES, UM, BASED ON THE COMMISSION'S PERSPECTIVE FROM THE RAILROAD COMMISSION'S CURTAILMENT RULE, IT'S CLEAR FROM THE STANDPOINT OF MY CLIENTS AND VERY LIKELY OTHERS, THAT THIS CONFIGURATION OF IMAGINING A STRAIGHT LINE BETWEEN STORAGE AND A GENERATION RESOURCE BETWEEN WHICH THERE ARE NO HUMAN NEEDS CUSTOMERS, OR EVEN AFTER WHICH THERE ARE NO HUMAN NEEDS CUSTOMERS, IT VERY LIKELY DOESN'T EXIST.
SO AGAIN, WE FIND THE PROBLEM OF BASICALLY ELIMINATING THE GAS RESOURCES THAT ARE PRINCIPALLY AVAILABLE TO SUPPORT THE FIRM FUEL SUPPLY SERVICE.
SO AGAIN, JUST BY WAY OF, OF OF UNDERSTANDING THE MAGNITUDE OF THIS, KINDER MORGAN ALONE SERVES 24,000 MEGAWATTS OF GENERATION RESOURCES.
THAT'S 43% OF THE GAS FIRE GENERATION RESOURCE CAPACITY.
AND THEY JUST ANNOUNCED THAT KEN AND MORGAN, THAT IS A, A SIX AND A HALF B, C, F EXPANSION OF THEIR STORAGE CAPACITY, WHICH MEANS THAT BY THE END OF 2024, THEY WILL OPERATE A QUARTER OF THE INTRASTATE STORAGE CAPACITY IN TEXAS.
SOME OF THE, THE CONCERNS THAT I AM, AM DISCUSSING NOW HAVE BEEN, UH, ADDRESSED BY, UH, THE SUGGESTION THAT, WELL, WHAT ABOUT THE ROLE OF THE INTERSTATE PIPELINES? AND, AND THERE'S TWO RESPONSE, WELL, THERE'S REALLY THREE.
AT THE END OF THE DAY, AN INTERSTATE PIPELINE IS INTERSTATE BECAUSE IT IS DESIGNED TO TAKE GAS ELSEWHERE.
IT'S DESIGNED TO TAKE GAS OUT OF THE STATE FOR REASONS THAT ARE WELL UNDERSTOOD HERE.
UM, BUT MORE SPECIFICALLY WITH RESPECT TO THE WAY THAT THEY OPERATE.
AN INTERSTATE PIPELINE IS PERCEIVED AS, AS LOW RISK BECAUSE IT'S NOT SUBJECT TO THE CURTAIL RULE OF THE COMMISSION.
BUT THAT DOES NOT MEAN IT'S NOT SUBJECT, SUBJECT TO CURTAIL RISK.
[00:25:01]
SAME OPERATIONAL CURTAILMENT RISKS AS AN INTRASTATE PIPELINE WITH THE SOMEWHAT PARADOXICAL RESULT, THOUGH THAT BECAUSE IT'S NOT SUBJECT TO THE CURTAILMENT RULE OF THE RAILROAD COMMISSION, WHICH PLACES GENERATION RESOURCES IN THE SECOND HIGHEST PRIORITY, THEY ACTUALLY CURTAIL ON A PRO RATTA BASIS, WHICH MEANS THAT IF THERE IS CURTAILMENT ON AN INTERSTATE PIPELINE, THE GENERATION RESOURCES WOULD BE LESS WELL SERVED THAN IF THEY WERE TAKING DELIVERY FROM AN INTERSTATE PIPELINE.THE OTHER ISSUE IN RESPONSE TO THE, THE ROLE THAT INTERSTATE PIPELINES PRESUMABLY WOULD PLAY IS THAT A LOT OF THE COMMISSION DISCUSSION YOU HEARD RELIES UPON THE ERCOT SURVEY RESULTS WITH RESPECT TO GENERATORS IDENTIFYING, UH, THE POSSIBILITY OF SERVICE FROM INTERSTATE PIPELINES.
ERCOT ITSELF, IF YOU READ THE MEMORANDUM THAT THEY PREPARED, AND THE DISCUSSION THAT THEY'VE HAD IN FRONT OF THE COMMISSIONERS, HAVE BEEN VERY CLEAR THAT THOSE RESULTS ARE VERY LIMITED.
THEY DO NOT REFLECT AVAILABILITY OF CAPACITY.
THEY DO NOT REFLECT WILLINGNESS ON, ON BEHALF OF THE INTERSTATES.
AND I WOULD SAY THAT WITH RESPECT TO, FOR EXAMPLE, KEN, UH, KENTER MORGAN, THEY ARE A MAJOR OPERATOR OF INTERSTATE PIPELINES AND, AND THEY DO NOT BELIEVE THAT INTERSTATE PIPELINES ARE THE SOLUTION HERE.
A COUPLE OF QUICK NEXT SLIDE PLEASE.
I'D LIKE TO SORT OF ILLUSTRATE THIS.
SOME OF YOU MAY HAVE SEEN THESE MAPS BEFORE.
THE FIRST SLIDE HERE IS THE INTERSTATE PIPELINE SYSTEM IN TEXAS.
AND WHAT YOU SEE QUITE NOTICEABLY IS THE I 35 CORRIDOR.
THIS ALSO REFLECTS THE LOCATIONS OF GENERATION RESOURCES AND STORAGE FACILITIES.
AND IN THE MIDDLE OF THE STATE, YOU BASICALLY HAVE NO INFRASTRUCTURE TO SUPPORT.
SO THIS SORT OF BACKS UP SOME OF THE, THE NUMBERS THAT I'M DESCRIBING, BUT HERE YOU CAN SEE IT VISIBLY THAT THE, THE WHOLE MIDDLE CORRIDOR OF THE STATE, THERE IS NOT MEANINGFUL INTERSTATE PIPELINE GAS DELIVERY.
THIS IS THE INTRASTATE SYSTEM.
YOU CAN SEE THE INTERCONNECTEDNESS OF GAS, STORAGE, GAS, TRANSPORTATION, AND GENERATION RESOURCES.
AND I PROMISE IF YOU, IF YOU BLOW THIS UP, I THINK IT ACTUALLY, IT KEEPS THE, THE, UH, UM, THE VISIBILITY.
SO YOU CAN ACTUALLY READ THE LOCATIONS FROM THE KEY.
AND I APOLOGIZE, IT'S NOT, UH, PARTICULARLY VISIBLE HERE, BUT THIS ALSO INDICATES THE CONUNDRUM THAT WE HAVE WITH RESPECT TO THAT INTERCONNECTEDNESS.
IT MEANS THAT THIS SAME SYSTEM ALSO SERVES LDCS.
BUT, BUT, SO LET'S THEN TURN TO WHY THE 1169 APPROVED BY TACK IN THE, AT AT ITS LAST MEETING ON THIS SUBJECT, UM, PROVIDES THE ASSURANCES AND THE CERTAINTY THAT THE COMMISSION, I BELIEVE IS LOOKING FOR.
SO IN THAT PROPOSAL, IT, IT, IT VERY MUCH IS DESIGNED TO ELIMINATE RISK THAT WE STARTED FROM THAT STANDPOINT.
AND WHEN I SAY WE, WE KINDER MORGAN ENTERPRISE PRODUCTS, WE'VE WORKED VERY CLOSELY WITH CALPINE AND NRG.
WE'VE ALSO COLLABORATED VERY CLOSELY WITH ERCOT.
THE, THE FIRST PRINCIPLE WAS TO LIMIT RISK, BUT AT THE SAME TIME, TO MAKE SURE THAT THERE WERE AVAILABLE GAS RESOURCES TO ACTUALLY SUPPORT THE GROWTH OF THIS PRODUCT.
UM, BUT WE ALSO TOOK FROM THE DISCUSSION AT THE COMMISSION THE NOTION THAT IT'S VERY IMPORTANT TO LIMIT RISK ON THE TRANSPORT PATH BETWEEN THE STORAGE AND THE GENERATION RESOURCE.
BUT WHAT WE DID IS WE ELIMINATED CURTAILMENT RISK FROM THE OPERATION OF THE RAILROAD COMMISSION RULE AS A PROXY FOR PERFORMANCE, CUZ THAT WE KEEP HEARING ABOUT THIS BEING A PERFORMANCE STANDARD.
AND WHAT WE DID INSTEAD IS IMPOSED ACTUAL PERFORMANCE REQUIREMENTS.
SO NUMBER ONE, WE ONLY TRANSMISSION PIPELINES ARE ELIGIBLE FOR THIS DISTRIBUTION PIPELINES, WHICH TYPICALLY SERVE LDCS, THOSE ARE NO LONGER ELIGIBLE.
THE PIPELINE HAS TO PROVIDE CONTRACTUAL ASSURANCES TO, TO THE GENERATION RESOURCE THAT HAS SUFFICIENT TRANSPORT CAPACITY EVEN IN THE EVENT OF CURTAILMENT.
SO THE, SO IT'S MODELED ON WHAT HAPPENS IN CURTAILMENT.
I'VE PRESENTED THESE STATISTICS TO THE PUBLIC UTILITY COMMISSION.
ONLY 15% OF KINDER MORGAN'S TOTAL LOAD IS LDC.
32% IS GENERATION RESOURCE, WHICH MEANS UP TO 53% OF THE TOTAL CAPACITY OF THE PIPELINE COULD BE CURTAILED BEFORE YOU EVEN GOT TO THE CRITICAL GENERATION RESOURCE.
AND, AND LDC LOAD, THE PIPELINE ALSO HAS TO MAKE A SPECIFIC CONTRACTUAL ASSURANCE OF SUFFICIENT PIPELINE PRESSURE TO MAKE THOSE DELIVERIES.
AND THAT ADDRESSES ANOTHER OF THE CONCERN THAT THE COMMISSIONERS HAVE RAISED.
A, A NEWER ELEMENT OF THIS, AND THIS IS ONE THAT'S IN PART IN THE APPROVED 1169, IS A WARRANTY THAT THE PIPELINE DID NOT CURTAIL GAS DELIVERY TO GENERATION RESOURCES DURING WINTER STORM URI.
IT'S IMPORTANT TO REMEMBER, WE KEEP HEARING SORT OF THIS POLICY BY APHORISM PAST PERFORMANCE AS NO MEASURE OF FUTURE RESULTS.
I, I FRANKLY DON'T BELIEVE THAT HERE, UM, DURING WINTER STORM URI UNDER AN IMPOSED CURTAILMENT ORDER FROM THE RAILROAD COMMISSION, BOTH KINDER MORGAN AND ENTERPRISE PRODUCTS MET 100% OF THEIR GAS DELIVERY OBLIGATIONS TO GENERATION RESOURCES THAT HAD FIRM STORAGE AND WITHDRAWAL RIGHTS.
UH, THEY DID NOT CURTAIL GAS TO THOSE GENERATION RESOURCES AND THERE WERE NO FORCED MAURA NOTICES.
[00:30:01]
IN THE POLICY ENVIRONMENT.IF WE, IF WE DICTATE POLICY BY NARRATIVE AS OPPOSED TO BREAKING THINGS DOWN AND LOOKING AT THE FACTS, SOMETIMES WE GET IT WRONG.
AND HERE THE NARRATIVE HAS BEEN IN MANY, MANY, MANY CASES WRONG ABOUT GAS DELIVERY FROM STORAGE AND INTRASTATE PIPELINES.
WHAT'S NEW, AND THIS IS SOMETHING I THINK WE BELIEVE WE NEED TO ADD BASED ON THE, THE PREFACE AND CLIFF STATED IT, UM, THE, THE NEED TO VERIFY THAT THE ABOVE WARRANTY WAS IN FACT TRUE.
WELL, WHAT WE DO NOW IS HAVE THE GR VERIFY THAT WITH RESPECT TO THE PERFORMANCE OF THE CONTRACTING PIPELINE, THAT THEY IN FACT DID NOT CURTAIL DURING WINTER STORM URIE.
SO THAT'S, THAT'S SOMETHING THAT WE WOULD ADD HERE.
UM, AND, AND THIS IS IMPORTANT BECAUSE THIS HAS BEEN SO FUNDAMENTALLY OVERLOOKED.
AND, AND FRANKLY I EVEN THINK I HAVE UNDER UNDER EMPHASIZED THIS, UNDER THE RAILROAD COMMISSION'S CURTAILMENT RULE, THE, THE, THE PIPELINE CANNOT CURTAIL A SUPPLY OF GAS THAT IT DOES NOT OWN UNDER THE FIRM FUEL SUPPLY SERVICE, THE GR THE GENERATION RESOURCE HAS TO OWN THE GAS.
AND IN THAT CASE, IT IS IMPOSSIBLE FOR THE PIPELINE TO CURTAIL THAT GAS LOAD ABSENT SOME OPERATIONAL LIMITATION ON THE PIPELINE.
THE PIPELINE WOULD, IF IT OWNED, THE GAS WOULD HAVE TO CURTAIL, BUT BECAUSE THE GENERATION RESOURCE WILL OWN THE GAS, IT CANNOT CURTAIL THAT GAS.
AND THAT HAS BEEN EMPHASIZED OVER AND OVER AND OVER BY THE RAILROAD COMMISSION.
THE FINAL POINT HERE, WITH RESPECT TO THE ACTUAL RISK, AND AGAIN, THIS IS ANOTHER VERY, VERY IMPORTANT POINT THAT IS NOT WELL UNDERSTOOD UNDER THE RAILROAD COMMISSION'S NEW CURTAILMENT RULE, IT IS THE UTILITY, NOT THE RAILROAD COMMISSION THAT DECIDES WHEN IT NEEDS TO CURTAIL THE UTILITY PIPELINE INVOKES A CURTAILMENT EVENT.
THE CURTAILMENT CANNOT BE IMPOSED ON IT FOR CIRCUMSTANCES THAT OCCUR ON OTHER SYSTEMS IN OTHER AREAS OF THE STATE.
AND IT CANNOT BE IMPOSED ON IT BY THE RAILROAD COMMISSION.
IT IS THE PIPELINE ITSELF THAT MAKES THE DECISION THAT IT NO LONGER HAS THE TRANSPORTATION CAPACITY TO MEET ITS FIRM CAPACITY COMMITMENTS.
AND WITH THAT, I'M HAPPY TO ANSWER ANY QUESTIONS.
ALL RIGHT, JOHN, THANKS VERY MUCH FOR THE PRESENTATION.
SO WE'VE GOT, UH, BOB WHITMEYER AND THE QUEUE FOLLOWED BY DAVITA.
BOB, DID YOU GET YOUR MIC ISSUES IRONED OUT? BOB WHITMEYER? NOT YET.
BOB, THAT MAY WORK JUST AS WELL.
UH, IN THE MEANTIME, WE'LL GO AHEAD, GO AHEAD AND JUMP OVER TO DAVITA.
CAN ANYONE CONFIRM THAT THEY HEAR ME? SURE CAN.
I'LL, I'LL START WITH, UM, THANKING YOU, CLIFF FOR THE, THE GREAT INTRODUCTION.
UM, I AGREED WITH ALL OF THE POINTS THAT YOU WERE MAKING AFTER THE P C'S OPEN MEETING.
SOME OF THE HOMEWORK THAT ERCOT INTERPRETED FROM THE COMMISSION'S DISCUSSION WAS TO EXPLORE WHETHER OR NOT WE COULD REVISE THE DEFINITION IN, IN A MATTER TO PROHIBIT, UM, HAVING CUSTOMERS THAT HAVE A HIGHER PRIORITY AGAINST CURTAILMENT UNDER THE COM RAILROAD COMMISSION'S CURTAILMENT RULE, WHO I'LL, I'LL JUST REFER TO AS HIGHER PRIORITY CUSTOMERS FOR PURPOSES OF THIS DISCUSSION.
UM, WHETHER WE COULD PROHIBIT THOSE HIGHER PRIORITY CUSTOMERS, UM, SOLELY ON THE PATH BETWEEN THE STORAGE AND THE GENERATION RESOURCE.
UM, WE TALKED WITH, UM, SOME GENERATORS AND, UM, JOHN ARNOLD, WHO REPRESENTS SOME INTERESTED PIPELINES.
AND OUR UNDERSTANDING IS THAT, THAT THAT WOULDN'T REALLY SOLVE, UM, THE, THE CHALLENGES THAT WE'RE TRYING TO, TO, UM, ADDRESS HERE, UM, FOR A COUPLE OF REASONS.
ONE, BECAUSE, UM, AS, AS JOHN MENTIONED IN HIS PRESENTATION, UH, THE INTRASTATE PIPELINE SYSTEM WAS, WAS DEVELOPED TO SERVE MULTIPLE CUSTOMERS.
IT'S, IT'S KIND OF A WEB AND YOU'RE UNLIKELY TO HAVE, UM, PIPELINES QUALIFY IF YOU INCLUDE THAT, THAT REQUIREMENT, OR AT LEAST ANY MORE PIPELINES QUALIFY UNDER THAT ADDITIONAL REQUIREMENT THAN YOU WOULD HAVE UNDER, UNDER THE CURRENT OR ORIGINAL DEFINITION THAT ERCOT PROPOSED THAT OUTRIGHT, UM, PROHIBITED PIPELINES, I'M SORRY, UM, GAS UTILITIES THAT SERVE THESE HIGHER PRIORITY CUSTOMERS ON THE PIPELINE AT ALL.
UM, ALSO OUR UNDERSTANDING IS THAT EVEN IF THE CUSTOMERS, THE HIGHER PRIORITY CUSTOMERS AREN'T LOCATED BETWEEN THE STORAGE AND THE RESOURCE, THEY MAY, THERE MAY STILL BE, UM, CURTAILMENTS, UM, IF, UH, THE UTILITY DOESN'T HAVE THE ABILITY TO SERVE HIGHER PRIORITY CUSTOMERS ELSEWHERE ON THE SAME PIPELINE SYSTEM.
SO BOTH OF THE, THE, THE, THE CHALLENGES THAT WOULD BE ATTEMPTED TO BE SOLVED BY PUTTING IN PLACE THAT NEW REQUIREMENT AREN'T REALLY MET BY IT.
NOW, WE THINK THAT IN ORDER TO ACHIEVE THE MOST COMMON
[00:35:01]
PRINCIPLE FROM THE COMMISSION DISCUSSION, WHICH WAS TO PRIMARILY REMOVE THE, WHAT I'LL CALL THE PRI PRIORITY CURTAILMENT RISK, WE BELIEVE THE ORIGINAL QUALIFYING PIPELINE DOES THAT.IF, IF YOU DO NOT HAVE, UH, GAS UTILITIES WHERE A PARTICULAR PIPELINE SERVES THOSE HIGHER PRIORITY CUSTOMERS, THEN YOU NEVER HAVE THE RISK THAT, UH, THE GENERATION RESOURCE WILL BE CURTAILED UNDER THE COMMISSION'S RULE BECAUSE THERE ISN'T ENOUGH TO SERVE BOTH THE HIGHER PRIORITY CUSTOMERS AND THE GENERATION RESOURCE.
UM, WE THINK THAT A LOT OF THE PROPOSALS THAT HAVE BEEN PROPOSED BY CALPINE AND, AND SUPPORTED BY BY OTHERS, THOSE ARE REASONABLE ATTEMPTS AT ACCOMMODATING, BUT THEY DON'T FULLY RESOLVE THE RISK.
THEY, THEY LOWER THE RISK AND THEN THEY ALSO DON'T, UM, ADDRESS ONE OF THE OTHER GOALS THAT THE RAILROAD, UH, THAT THE P U C HAS GIVEN US IN, IN EXPLAINING THEIR DECISION, WHICH WAS THAT THEY REALLY WANT TO MAKE SURE THAT THIS PRODUCT IS DESIGNED TO INCENT NEW BEHAVIOR AS OPPOSED TO JUST PAYING ENTITIES FOR, UM, WHAT THEY CURRENTLY DO, THEIR CURRENT PRACTICES.
FINALLY, I'LL NOTE THAT IF, UM, W WE WERE TO ADOPT PROTOCOLS THAT HAVE THE MORE RESTRICTIVE, UM, DEFINITION THAT I, I BELIEVE MORE CLOSELY USED TO THE, THE POLICY GOALS OF THE COMMISSION, WE WILL HAVE THE ABILITY TO SEE WHAT HAPPENS AND, AND IN, IN THE FUTURE FURTHER EXPAND THE PROGRAM IF, IF THAT IS DETERMINED THAT IT'S NEEDED.
UM, FINALLY, I DID WANT TO, UM, RAISE A COUPLE OF POINTS WITH WHICH I, I DISAGREE WITH JOHN IN HIS PRESENTATION.
I LARGELY AGREE WITH ALL OF THE FACTS THAT HE WAS PUTTING FORWARD.
UM, ONE, HOWEVER, WAS THAT THE, THE DEFINITION THAT ERCOT ORIGINALLY PROPOSED BASED ON COMMISSION, UH, DIRECTIVES UNINTENTIONALLY EXCLUDED CERTAIN PIPELINES.
THAT IS, THAT IS NOT THE CASE.
THAT WAS THE DECISION, AND IT WAS BECAUSE, UM, OF HOW THE RAILROAD COMMISSION CURTAILMENT RULE OPERATES, IF YOU SERVE THOSE HIGHER PRIORITY CUSTOMERS, UM, UNDER THE RAILROAD COMMISSION RULE, YOU ARE REQUIRED BY LAW TO FIRST CURTAIL YOUR GENERATION RESOURCE CUSTOMERS IF YOU DON'T HAVE THE ABILITY TO SERVE BOTH TYPES OF CUSTOMERS AT ONCE.
UM, SECOND, UM, THE INTERCONNECTED NATURE OF THE VARIOUS PIPELINES INDICATED WHY IT'S IMPORTANT TO LOOK AT THE PIPELINE AS A WHOLE.
AND, UM, FINALLY, JOHN'S POINT ABOUT, UM, THE, THE DEFINITION THAT ERCOT HAS BEEN ADVOCATING FOR, EXCLUDING AN ENTIRE GAS UTILITY.
I, I WOULD RESPECTFULLY DISAGREE WITH THAT.
IF YOU LOOK AT THE DEFINITION, UM, IT, IT EXCLUDES A GAS UTILITY WHERE ON THAT PIPELINE, THEY SERVE HIGHER PRIORITY CUSTOMERS.
SO IF THERE IS A GAS UTILITY WITH MULTIPLE PIPELINES, UM, ONLY THOSE PIPELINES THAT SERVE HIGHER PRIORITY CUSTOMERS WOULD BE EXCLUDED.
SO IF, FOR EXAMPLE, YOU HAVE A DIFFERENT PIPELINE THAT SERVES CUSTOMERS 200 MILES AWAY, UM, YOU WOULD NOT BE EXCLUDED.
AND, AND I'M HAPPY TO PAUSE AND TAKE ANY QUESTIONS AND, AND I KNOW THAT CANAN HAS COMMENTS AS WELL.
SO, UH, WE'LL ROLL THROUGH THE COMMENTS IN ORDER IN THE ORDER THAT THEY CAME IN.
SO WE'LL START WITH CANAN AND THEN FOLLOWED BY BILL BARNES.
UH, CLIFF, CAN YOU HEAR ME? THIS IS KENAN.
UM, SO I, I GUESS IN GOING THROUGH, UH, JOHN'S PRESENTATION, UM, SOME OF THE DATA THAT HE, HE'S SHARED WITH, UH, IN, IN THE PRESENTATION, THERE'S THIS ARGUMENT THAT WELL, UH, ON THE INTRA INTERSTATE, UH, I BELIEVE HE'S, THE ARGUMENT'S BEING MADE THAT, WELL, INTER-STATE IS GONNA GET CURTAILED ALSO, UM, UH, IN, IN, IN SOME OF THESE CIRCUMSTANCES.
AND TO ME, THAT JUST RAISES THE QUESTION OF WHETHER OR NOT THIS PRODUCT ACTUALLY MEETS OUR NEEDS.
SO, UH, I MEAN, THE LEGISLATIVE REQUIREMENT WAS ONSITE FUEL STORAGE, AND THEN THE COMMISSION WAS INTERESTED IN EXPANDING THIS.
BEYOND THAT POINT, I'M NOT SEEING ANYTHING IN THE PRESENTATION THAT, UH, IS, IS SAYING, OH, LET'S, THERE, THERE'S A GOOD REASON TO ROLL IN INTRA, IT'S REALLY THAT ENTER IS IN QUESTION ALSO.
UM, SO I, I'D LIKE TO HEAR JOHN'S REPLY TO THAT, UM, B BEFORE I ASK THE SECOND QUESTION, WHICH IS, UH, A LITTLE BIT MORE DOWN IN THE DETAILS.
[00:40:01]
KON, I, SO WITH RESPECT TO WHEN WE REFER TO THAT CURTAILMENT RISK, WE'RE NOT REFERRING TO, YOU KNOW, BY, BY THE OPERATION OF A LAW OR OTHERWISE.WHAT WE'RE SAYING IS WHAT, THIS IS MECHANICAL FAILURE, AND IT'S THE SAME MECHANICAL FAILURE RISK THAT APPLIES TO ANY PART OF THESE MACHINE DRIVEN PROCESSES TO MAKE ENERGY.
THEY, THEY APPLY AN EQUAL MEASURE TO, UH, A TURBINE.
UM, THEY APPLY AN EQUAL MEASURE TO TRANSMISSION AND DISTRIBUTION INFRASTRUCTURE.
UM, NONE OF THIS HAS TO DO WITH A SPECIFIC EXTERNAL, UH, CURTAILMENT RISK.
IT IS RATHER THE SAME OPERATIONAL RISK THAT EVERYBODY HAS.
WHAT I WOULD SAY THOUGH IS THAT WITH RESPECT TO THAT OPERATIONAL RISK, WE HAVE DRAMATICALLY LESSENED IT BY VIRTUE OF, SO IF YOU TAKE WINTER STORM URI WHEREIN, YOU KNOW, MY CLIENTS HAD A VERY SUCCESSFUL TRACK RECORD OF DELIVERY GAS FROM STORAGE, TWO GENERATION RESOURCES, CALPINE AND ENERGY HAVE JOINED MY CLIENTS IN FILING COMMENTS TO THAT EFFECT AT THE PUBLIC UTILITY COMMISSION, PUTTING THEMSELVES ON RECORD AS IDENTIFYING THAT HAPPENED.
UM, WE NOW HAVE A SYSTEM IN WHICH WE HAVE HAD TO VERIFY SUBJECT TO INSPECTION ON THE, THE GAS PIPELINE SIDE, SIGNIFICANT NEW WEATHERIZATION STANDARDS.
WE HAVE THE CRITICAL INFRASTRUCTURE DESIGNATIONS THAT ARE ENSURING THAT THE LOAD SHOULD, EVENTS THAT CONTRIBUTE TO SOME OF THE GAS DELIVERY PROBLEMS WILL NOT OCCUR AGAIN.
SO UNDER A FAR LESS, WHAT I REGARD IS A FAR LESS ROBUST SITUATION DURING URI, MY CLIENTS PERFORM PERFECTLY IN DELIVERING GAS FROM STORAGE.
NOW WE HAVE A MORE ROBUST SYSTEM.
SO E EVERYTHING I SEE, AND, AND IT'S BEEN INCREMENTAL AND IT'S BEEN COLLABORATIVE, HAS COMP, HAS, HAS WORKED TO LOWER THE OVERALL RISK, BUT SUCH, SUCH AS THAT RISK IS IT'S OPERATIONAL RISK, WHICH APPLIES TO EVERY PIECE OF MECHANICAL EQUIPMENT REQUIRED TO ULTIMATELY DELIVER POWER.
UM, I, I'M NOT SURE I, UH, I DIDN'T PIECE TOGETHER, UH, YOUR REPLY ON THE INTRA INTRA STATE.
I MEAN, IT SEEMS LIKE THE RISKS EXISTS WITH BOTH, BUT THAT'S NOT A CASE TO DO THE, EXPAND THE SERVICE TO COVER THIS IF YOU'RE MAKING THE ARGUMENT THAT THE RISKS EXIST IN BOTH AREAS.
WELL, THE, THERE'S, THERE'S A, THIS IS A POLICY CHOICE, RIGHT? KENAN.
SO IT, THE, THE, YES, THE NOTION IS WITH RESPECT TO THE MOST AVAILABLE, THE LEAST EXPENSIVE, UM, THE, THE RESOURCE WITH A TRACK RECORD OF FIRM DELIVERABILITY DURING A WINTER WEATHER EVENT, UM, AND THEREBY HAVING A MORE SIGNIFICANT AND SCALABLE FIRM FUEL SUPPLY SERVICE PRODUCT, YOU CAN'T DO THAT WITH ONSITE.
UM, SO I MEAN, I'M LOOKING THIS AS LIKE KIND OF RISK COMPOUNDING AND BUILDING UP.
UH, I SEE A COMMENT FROM BRIAN.
I GUESS I, I DISAGREE WITH THAT.
AT LEAST THE FUEL IS, HAS MADE IT ONSITE.
UM, SO, SO I I, I SEE THAT DIFFERENTLY.
UM, BUT, UH, AND I THINK KENAN, THERE ARE IN THE WEEDS, THERE ARE DERATING ISSUES AS BETWEEN GAS AND, AND FUEL.
FUEL OF COURSE IS, YOU KNOW, EXPENSIVE.
IT, IT, IT TOO HAS OP THE SAME SORT OF OPERATIONAL MECHANICAL RISKS THAT, THAT OTHER PIECES OF EQUIPMENT HAVE THAT THAT'S NOT, YOU KNOW, INSULATED FROM THAT, NO PUN INTENDED.
SO, UM, YEAH, I MEAN IT'S, I, I APPRECIATE, UH, YOUR ANSWERS.
UH, I'LL, I'LL GO AHEAD AND MOVE DOWN TO THE, TO THE NEXT THING I WAS JUST TRYING TO ORGANIZE IN, IN MY MIND IS, UM, SO, UH, IT'S, IT'S ABOUT YOUR KEY OVERLOOKED, UH, UH, CONSIDERATIONS.
UM, SO I, I JUST WANNA MAKE SURE I, I UNDERSTAND THIS BECAUSE IT SEEMS THAT THIS IS IMPLYING, UH, THAT THINGS WOULD BE DIFFERENT UNDER, UH, YURI IF THESE RULES HAD BEEN IN PLACE.
BUT I'M NOT FOLLOWING THAT, AND I WAS HOPING MAYBE YOU COULD HELP ME BRIDGE THE GAP THERE.
WELL, THE, THE F THE, YEAH, IT, THE FIRST POINT HAS ALWAYS BEEN THE CASE.
THAT, AND THAT'S CONSISTENT WITH THE, THE LAW IN TEXAS.
I WILL SAY IT IS A POINT THAT HAS NOT BEEN WELL UNDERSTOOD SO MUCH SO THAT IN, IN PROMULGATING THE NEW CURTAILMENT RULE, THE RAILROAD COMMISSION MADE A POINT OF EMPHASIZING IN THE, THE PREAMBLE TO THE ENACTMENT OF THAT RULE THAT THEY DO NOT HAVE THE ABILITY TO CURTAIL THIRD PARTY GAS.
THAT, IN OTHER WORDS, THEY, THEY DON'T HAVE THE ABILITY TO ORDER A UTILITY CUZ IT'S THE UTILITY THAT'S WITHIN THEIR JURISDICTION, NOT THE, THE ENTITY THAT HOLDS TITLE.
UM, IT IS THE, IT IS ONLY THE, THE ENTITY
[00:45:01]
THAT HOLDS TITLE WHEN THAT ENTITY IS THE UTILITY.SO THAT HAS AL THE, THE FIRST BULLET POINT THERE.
CANON HAS ALWAYS BEEN THE CASE.
IT'S ONLY THAT MORE RECENTLY THE RAILROAD COMMISSION HAS EMPHASIZED THAT IT'S THE CASE AND PARTICULARLY BECAUSE OF SOME OF THE ISSUES WE HAD TO CONFRONT DURING WINTER STORM ERIE.
THE SECOND POINT IS THAT THE, THE COMMISSION MADE A SPECIFIC AND DELIBERATE EFFORT KNOWING THAT THE GAS DELIVERY SYSTEM SUCH AS IT IS, IS REALLY COMPOSED OF MULTIPLE SYSTEMS OPERATED BY MULTIPLE OPERATORS THAT YOU CAN'T CURTAIL ACROSS AN ENTIRE STATE SYSTEM WHEN YOU MAY HAVE LOCALIZED ISSUES.
MORE IMPORTANTLY, IF ONE GAS UTILITY PIPELINE SYSTEM HAS MANAGED, WHETHER IT'S SUPPLY OR WHETHER IT'S DELIVERABILITY SUCH THAT IT DOES NOT NEED TO, IT HAVE A CURTAILMENT EVENT.
IF IT CAN CONTINUE TO MEET ALL OF ITS FIRM DELIVERY OBLIGATIONS, IT NEED NOT INVOKE A CURTAILMENT EVENT.
AND IT IS IN UNDER THE RULES, IT IS ENTIRELY THE UTILITIES DECISION.
IT CANNOT BE IMPOSED BY THE COMMISSION.
UH, AND THANK YOU FOR BEARING WITH ME ON, ON THOSE QUESTIONS.
NO, I, I THINK, I THINK THEY'RE WORTHY OF, OF ADDITIONAL, UM, ELABORATION, SO HAPPY TO.
AND REALLY APPRECIATE, UM, THE WORK BOTH ERCOT STAFF, DEVITA, I KNOW'S, PUT A LOT OF WORK ON, UH, ON THIS.
AND JOHN SHOWING UP TODAY WITH THIS PRESENTATION THAT HELPS FURTHER EXPLAIN AND JUSTIFY TAX DECISION, WHICH WE STILL STRONGLY SUPPORT.
WE THINK IT'S THE RIGHT POLICY DECISION.
I THINK IT'S WELL-CHARACTERIZED WHEN WE TALK ABOUT ERCOT COMMENTS, WHICH ARE REALLY FOCUSED ON ELIMINATING ALL CURTAILMENT RISK VERSUS THE ATTACK APPROVED COMMENTS, WHICH REDUCE SUBSTANTIALLY REDUCE RISK IN THE MOST REASONABLE WAY THAT I MEET, I BELIEVE MEETS ONE OF THE KEY OBJECTIVES THAT WE'RE TRYING TO ACCOMPLISH HERE THAT WE HAVEN'T REALLY TALKED A LOT ABOUT, WHICH IS EXPAND PARTICIPATION IN THIS PRODUCT SO THAT WE HAVE A MORE DIVERSE MIX OF FIRM FUEL PRODUCTS HAVE LOWER COSTS FOR CONSUMERS.
IT'S UNDOUBTEDLY ON, UH, OFFSITE NATURAL GAS STORAGE IS THE MOST ECONOMIC WAY TO FIRM UP OUR, OUR FUEL SUPPLY, UH, AS IT COMPARED TO ONSITE FUEL.
SO UNDER TAX APPROVED DEFINITION, THAT WILL GREATLY ENHANCE INCREASED PARTICIPATION IN THIS PRODUCT.
AND TO DAVITA'S POINT, WELL, WE COULD TAKE A HALF STEP MOVE FORWARD WITH ERCOT COMMENTS, SEE WHAT HAPPENS.
BUT UNDER THE, THE ATTACK APPROVED COMMENTS WE HAVE, WE HAVE SUBSTANTIALLY REDUCED THE RISK SO MUCH THAT WE JUST BELIEVE THAT IS THE RIGHT STEP.
WHY WAIT ANOTHER YEAR, UM, LET'S MOVE FORWARD WITH, WITH THAT POLICY DECISION, UH, GET MORE EXPERIENCE UNDER THIS PRODUCT.
AND SO WE STILL STAND BY TAX DECISION.
WE THINK THAT IS THE RIGHT CALL, THE RIGHT POLICY CALL REASONABLY REDUCE THE RISK, UH, FOR PROVIDING THIS PRODUCT RE REDUCE THE RISK OF CURTAILMENT AND EXPAND PARTICIPATION SO WE CAN LOWER THE COSTS.
THAT, THAT PART HASN'T REALLY BEEN DISCUSSED VERY MUCH.
UM, SO, UH, WE'RE STILL STRONGLY SUPPORTIVE OF THE 1169 COMMENTS ATTACK APPROVED.
UH, COMMENTS FROM ERIC GOFF, DAVITA DWYER AND KAAN OMAN, UH, ERIC? SURE.
UM, YOU KNOW, BUT FOR THE STATUTORY OBLIGATION FOR THIS PRODUCT TO EXIST, I PERSONALLY WOULD QUESTION WHETHER OR NOT, UH, FOLKS WOULD DO, UH, SIMILAR BEHAVIOR ON THEIR OWN AFTER THEIR EXPERIENCES IN WINTER STORM URI.
UH, HOWEVER, IT DOES EXIST IN STATUTE AND, UM, THE COMMISSION HAS THE AUTHORITY TO CREATE THE, THE PRODUCT THAT THEY WANT TO CREATE HERE.
AND, UH, I THINK THAT, YOU KNOW, ALTHOUGH I VOTED FOR THE T COMMENTS LAST TIME, UM, GIVEN THE COMMISSION'S INTEREST IN, UH, CREATING A, A PRODUCT, UH, OF, OF THEIR OWN DESIGN, I'M NOT SURE THAT THE TACK COMMENTS, UM, REFLECT THAT PARTICULARLY IN ONE EXAMPLE.
UH, IF THE COMMISSION IS TRYING TO GET, UM, NEW, UH, BEHAVIOR AND A NEW INVESTMENT, UM, THEN AN OBLIGATION TO CERTIFY THAT A PIPELINE, UH, DID NOT, UH, HAVE ANY FAILURES IN WINTER STORM URI COULD, WOULD ACTUALLY PROHIBIT THAT IF THEY MAKE SOME SORT OF CHANGE.
[00:50:01]
PIPELINE WERE TO MODIFY WHO THE CUSTOMERS WERE IN ORDER TO ONLY SERVE A GENERATOR, UM, BUT THEY FAILED TO WIN A STORM URI, UM, THEY THEY COULDN'T DO THAT.UM, SO I, I DO THINK THAT, YOU KNOW, THIS IS SOMETHING THAT IS IN THE DISCRETION OF, OF THE COMMISSION, AND IF WE'RE TRY, IF THE GOAL IS FOR THEM TO CREATE CHANGES IN BEHAVIOR, UM, FOCUSING ON WHAT'S ALREADY HAPPENED DOESN'T SEEM TO ACCOMPLISH THAT.
SO I, I'VE BEEN LOOKING AT THIS LAST SLIDE IN, IN JOHN'S PRESENTATION, AND, AND THE FIRST BULLET REGARDING THE PIPELINE ONLY HAVING THE ABILITY TO CURTAIL FOR CAPACITY.
I THINK PART OF WHY THIS POINT HADN'T BEEN DISCUSSED MUCH IS BECAUSE FROM MY PERSPECTIVE, UNDER EITHER DEFINITION OF, UM, QUALIFYING PIPELINE, THAT'S, THAT'S BEFORE T THIS IS TRUE.
THE, THE PIPELINE CANNOT CURTAIL FOR SUPPLY ONLY FOR CAPACITY.
UM, THAT IS INTENTIONALLY PART OF THE DESIGN OF THIS PRODUCT IS THAT THE, UM, GENERATION ENTITY OR AN AFFILIATE HAS TO HAVE PREED THE FUEL THAT IS STORED OFFSITE.
AND SO, UH, WHILE I UNDERSTAND THIS POINT, I, I DON'T SEE IT AS, UM, ADVOCATING EITHER WAY FOR THE QUALIFYING PIPELINE DEFINITION.
AND, AND JOHN, IF, IF YOU HAVE ANOTHER PERSPECTIVE, I I WELCOME YOU, YOU KNOW, EXPLAINING, BUT I DID WANT TO HELP, UM, PROVIDE SOME CLARITY ON THAT POINT TO THE EXTENT THAT IT IS HELPFUL.
JOHN, SHE OPENED IT UP FOR YOU IF YOU WANTED TO REPLY.
YEAH, I, I THINK, UM, SOME OF THIS IS, UH, SOME OF, SOME OF THE CONTENT OF THE PRESENTATION IS PROBABLY FAIRLY CHARACTERIZED AS BEING DIRECTED AT, UM, PULLING BACK SOME OF THE FUNDAMENTAL, UM, MISIMPRESSIONS THAT HAVE PUT US WHERE WE ARE.
UM, AND, AND SO THEY MAY NOT BE REGARDED AS SPECIFICALLY SUPPORTING THE, UH, PAC APPROVAL, UM, IN TERMS OF ITS LANGUAGE AND CONTENT, BUT RATHER WITH RESPECT TO UNDERSTANDING THE NATURE OF THE BROADER MACRO RISKS HERE, THEY DO PLAY INTO THAT.
AND I THINK UNDERSTANDING, UM, THE, THE SYSTEM IS SOMETHING THAT I'VE BEEN CHARGED WITH GIVEN, UM, SORT OF THE WAY IN WHICH THESE TWO REGULATORY ENVIRONMENTS DON'T SEEM TO FULLY UNDERSTAND EACH OTHER'S LANGUAGE, THE OPERATION AND ASSOCIATED RISKS.
YEAH, I, UM, I JUST WANTED TO FOLLOW UP ON SOMETHING, BILL.
BILL SAID DAVITA, UH, WHEN SHE WAS ASKING TO KIND OF GO DOWN THE PATH THAT WE WERE SUGGESTING, WASN'T JUST SAYING, LET'S TAKE MORE TIME.
THAT APPROACH ALSO ALLOWS FOR A NEW PRODUCT TO BE DE DEVELOPED VERSUS PAYING FOR KIND OF EXISTING OR, UH, SLIGHTLY MODIFIED PRODUCTS.
SO I THINK THERE'S A SIGNIFICANT DIFFERENCE THAN JUST SAYING, OH, WE'RE GONNA, UH, YOU KNOW, WE'RE, WE'RE GONNA TAKE MORE TIME.
THE, THE GOAL IS TO ACTUALLY HAVE A MORE ROBUST PRODUCT THAT COMES OUT OF THAT OR, UH, SAY, YOU KNOW, IT DOESN'T MEET THE, THE GOAL FOR WHAT WE'RE TRYING, WHERE WE'RE TRYING TO GET.
SO I, I THINK THAT'S A SIGNIFICANT ADDITION, AND IT'S NOT JUST ABOUT TAKING A YEAR OR SOMETHING LIKE THAT.
I MEAN, ULTIMATELY, I, I SEE THIS AS A BINARY OUTCOME.
YOU KNOW, ERCOT QUALIFYING PIPELINE DEFINITION, I DON'T THINK RESULTS REALLY IN ANY PARTICIPATION FROM THE INTRASTATE SYSTEM.
AND, UM, IF THIS IS THE, ULTIMATELY THE, THE DECISION OF RMC AND THE BOARD AND THEY GO THIS DIRECTION, UM, THIS CONVERSATION I THINK IS GONNA HAVE A TON OF VALUE BECAUSE THEY'RE GONNA SAY, WELL, WHY DIDN'T ANYONE PARTICIPATE? AND I THINK IT'S BECAUSE THERE WON'T BE ANY DEFINITE, THERE, THERE WON'T BE ANY PIPELINE THAT CAN QUALIFY.
UM, YOU KNOW, WE'VE PROPOSED, UH, I THINK A VERY, UH, YOU KNOW, GOOD DEFINITION THAT RESULTS IN A, IN A LOT OF RELIABILITY BENEFITS, AND CALPINE REALLY HAS EXPANDED.
[00:55:01]
ITS PROCUREMENT OF, OF, UM, FT FROM STORAGE, UH, SINCERE JUST BASED ON THE PERFORMANCE.AND THE REASON FOR THAT IS BECAUSE WE THINK IT, YOU KNOW, RESULTS IN A MORE RESILIENT SYSTEM TO THE POINT THAT ERIC WAS MAKING, YOU KNOW, WOULD THIS HAPPEN ANYWAY, THAT, THAT, THAT TYPE OF, UH, PROCUREMENT, IT, IT COSTS MONEY AND, UM, WE HAVE A DESIRE TO PROCURE MORE, AND I DON'T WANNA GET, YOU KNOW, INTO TOO MANY COMMERCIAL DETAILS, BUT WE HAVE PROJECTS IN THE NORTH ZONE THAT WE'RE INTERESTED IN TO, UH, SUPPLEMENT OUR NORTH ZONE PLANTS.
AND SO THIS IS SOMETHING THAT'S NEW, UH, THAT COULD BE PAID FOR WITH, UM, WITH THIS TYPE OF QUALIFYING DEFINITION.
YEAH, TO KENNAN'S, POINT OF DAVITA MENTIONED, AS WELL AS ONE OF THE OTHER GOALS OF, UM, THE ERCOT COMMENTS AND THE COMMISSION DIRECTION TO SOME EXTENT IS TO, UM, HOPEFULLY ENCOURAGE BEHAVIOR CHANGE ON THE GAS PIPELINE SIDE.
UM, AND I CAN TELL YOU WE HAVE HAD DISCUSSIONS, OBVIOUSLY WITH OUR GAS PROVIDERS, UM, BASED ON THE QUALIFYING PIPELINE DEFINITION, ERCOT COMMENTS, AND IT'S NOT CLEAR THAT THAT IS GOING TO HAPPEN.
UM, AND SO I JUST WONDER IF, LET'S SAY THE RMC CHANGES DIRECTION AND APPROVES THE
UM, I JUST, AGAIN, I THINK IT'S, WE'RE TRYING TO STRIKE THE BALANCE OF ELIMINATING THE CURTAILMENT RISK TO THE GREATEST EXTENT POSSIBLE IN A REASONABLE WAY TO EXPAND PARTICIPATION IN THE PRODUCT.
AND I THINK THAT'S, WE HAVE MET THAT GOAL, UM, WITH THE T APPROVED COMMENTS.
IT'S IMPORTANT THAT THE RMC AND THE BOARD SEE BOTH SETS OF COMMENTS AND WEIGH THESE IMPORTANT POLICY DECISIONS.
UM, BUT I, I, I DO SUPPORT AND BELIEVE WE'VE MADE THE RIGHT DECISION HERE, UH, AND IT'S, IT'S GONNA RESULT IN A BETTER PRODUCT.
THE, DO I NEED TO REPLY TO THAT? I'M, I'M NOT, YEAH, GO AHEAD, KENAN.
UM, I, I MEAN, MY PERSPECTIVE IS THAT WE NEED TO REVISIT THIS WITH SOME REGULARITY.
UM, SO, UH, RE REGARDLESS OF WHICH WAY WE GO, I THINK THERE'S GONNA BE GAPS THAT WE'RE GONNA HAVE TO FILL AND, UH, JUST, UH, ANALYSIS THAT WE'RE GONNA HAVE TO DO IN TERMS OF WHAT'S WORKING.
AND ALSO THE MARKET ON THE OTHER SIDE IS GONNA EVOLVE OVER TIME.
UH, AND IT HAS ALREADY PER, UH, JOHN'S SOME JOHN'S POINT.
SO, UM, I, I DON'T SEE, UH, THIS, UH, WHICHEVER WAY, UH, THE COMMISSION AND, UM, THE BOARD DECIDE TO GO THAT WE WOULD KIND OF STOP WORKING ON IT.
UM, I, I'M NOT A BIG FAN OF THIS SERVICE AND I NEVER HAVE BEEN.
UM, I'VE VOTED AGAINST A SIMILAR POLICY IN 2005, A VOTE FOR WHICH BRAD JONES IS STILL MAD AT ME.
UM, I NOTE THAT WE PAID 52 MILLION IN RESERVATION FOR THIS SERVICE FOR THIS PAST WINTER, WHICH SEEMS EXCESSIVE TO ME FOR A RESPONSIBILITY THAT I THINK THESE COMPANIES OUGHT TO BE CARRYING OUT ON THEIR OWN, JUST DUE TO MARKET INCENTIVES.
UM, AND I NOTE THAT WE, WE CLAWED BACK HALF OF THAT FOR REASONS I'M, I'M CURIOUS ABOUT NEVERTHELESS, UM, WE'RE OBLIGATED TO PROVIDE THE SERVICE NOW, AND IF WE'RE OBLIGATED TO PROVIDE THE SERVICE, I THINK IT OUGHT TO WORK AS WELL AS POSSIBLE.
AND WE OUGHT TO HAVE CONFIDENCE IN A WIDE VARIETY OF RESOURCES THAT ARE AVAILABLE TO PROVIDE THIS SERVICE.
AND I, I'M MOSTLY CONVINCED BY THE COMMENTS THAT HISTORICAL RECORD SHOWS, THESE ARE PATHS THAT HAVE NOT BEEN INTERRUPTED IN THE PAST.
SO I, I'M MOSTLY SUPPORTIVE OF THE NPR R AS WE PASSED IT.
I'D LOVE TO SEE SUGGESTIONS FOR MORE REVIEWS AND COMMITMENTS THAT WE COULD PUT INTO THE LANGUAGE TO
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PROVIDE ERCOT GREATER ASSURANCE THAT THESE RESOURCES WILL BE AVAILABLE WHEN WE NEED THEM.BUT IT MAKES SENSE TO ME THAT IF WE'RE GONNA PROVIDE THIS SERVICE, WHICH I'M NOT CONVINCED PROVIDES THE VALUE FOR THE MONEY WE'RE PAYING FOR IT, WE SHOULD HAVE A WIDER SET OF RESOURCES AVAILABLE TO PROVIDE THIS SERVICE THAT HAVE A REASONABLE, UH, UH, EXPECTATION THAT THEY'LL BE THERE WHEN WE NEED 'EM.
THE QUEUE IS EMPTY AT THIS POINT IN TIME.
ANY OTHER COMMENTS OR QUESTIONS ON THE PRESENTATION THAT JOHN PROVIDED, OR ANY OTHER COMMENTS THAT, UH, HAVE BEEN MADE SO FAR TODAY? ALL RIGHT, SEEING NONE, UM, WE'VE GOT A COUPLE DIFFERENT OPTIONS.
UM, FIRST OPTION IS WE DO NOTHING AT WHICH POINT IN TIME THE TECH, UM, VERSION OF NPR R 1169 THAT WAS PASSED FORTH A COUPLE WEEKS AGO MOVES ON TO R AND M AND TO THE BOARD, UH, WITHOUT ANY SORT OF MODIFICATION.
THE OTHER OPTION IS TO OFFER UP LANGUAGE OR SOME SORT OF COMMENTS THAT WE WOULD LIKE TO HAVE R AND M AND THE BOARD CONSIDER, UM, AND, AND OTHERWISE, OTHERWISE AUGMENT OUR, OUR PRIOR COMMENTS.
SO I'M SEEING NOTHING AT THIS POINT IN TIME IN TERMS OF ADDITIONAL COMMENTS THAT WE WOULD LIKE TO PASS FORWARD TO THE BOARD, OR NO ONE, UH, AT LEAST HAS INDICATED THAT THEY'VE GOT ANYTHING THAT THEY WOULD LIKE TO PASS FORWARD AT THIS POINT IN TIME.
UM, ANNE, AM I, AM I HEADING IN THE RIGHT DIRECTION WITH THIS, OR DO YOU HAVE ANY RECOMMENDATIONS? YEAH, THAT'S RIGHT, CLIFF.
IF NO MOTION IS MADE OR TACTIC DECIDE THEY DON'T WANNA FILE COMMENTS, THEN WE WOULD JUST, UH, MOVE FORWARD WITH THE T RECOMMENDATION FROM THE LAST MEETING.
ALL RIGHT, SO I'LL, UH, MAKE ONE LAST PASS AT IT.
ANY, ANY COMMENTS OR QUESTIONS OR ANY MOTIONS THAT WE WOULD LIKE TO MAKE BEFORE WE CLOSE OUT THIS ITEM? OKAY.
SEEING NOBODY IN THE QUEUE, OH, WE'VE GOT DAVITA IN THE QUEUE.
I, I JUST WANTED TO SAY IF, IF KATH MOVES FORWARD WITH NO NEW COMMENTS, UM, OUR CUT'S INTENTION IS TO FILE COMMENTS BEFORE THE BOARD SO THAT THEY'LL HAVE, UH, A CLEAN WAY TO CONSIDER BOTH OPTIONS.
THANK YOU, DEVITA, I APPRECIATE YOU TELEGRAPHING THAT.
UH, I, UM, WOULD, I'M CURIOUS IF, IF, UM, ERCOT CAN ALSO SPECIFY THE PIPELINES THAT THEY BELIEVE WOULD QUALIFY UNDER THEIR PROPOSED DEFINITION FOR BOARD CONSIDERATION.
LIKE WHAT PATHS COULD ACTUALLY EASILY WORK.
SO WHAT, WHAT WE DO HAVE THE ABILITY TO DO IS WE'VE PUT OUT A NEW SURVEY THAT ATTEMPTS TO DETERMINE WHAT AMOUNT OF CAPACITY, GENERATION CAPACITY MIGHT BE AVAILABLE UNDER THE, THE TAC RECOMMENDED DEFINITION OF A QUALIFYING PIPELINE.
AND, UM, THE, THE DEFINITION THAT ERCOT HAS BEEN ADVOCATING FOR, UM, THAT IS, IS ADDITIONAL INFORMATION THAT WE HOPE TO HAVE AVAILABLE TO, TO THE BOARD SO THAT THEY CONSIDER, UM, WHAT CAPACITY MIGHT BE AVAILABLE.
ALL RIGHT, GUYS, SEEING NO DESIRE SO FAR ON THE PART ATTACK TO, TO MAKE ANY AMENDMENTS OR ADDITIONAL COMMENTS TO OUR PREVIOUS VERSION OF 1169, WE'LL GO AHEAD AND CLOSE OUT THIS AGENDA ITEM AND, UH, THE COMMENTS THAT WERE PREVIOUSLY PASSED WILL SPEAK FORT, UM, AND THAT IS WHAT WE WILL PRESENT TO R AND M AND TO THE BOARD.
THAT BEING SAID, UH, WE'LL MOVE ON TO AGENDA ITEM NUMBER FOUR.
IS THERE ANY OTHER BUSINESS? OKAY, HEARING DONE.
UH, OUR NEXT MEETING WILL BE JUNE 27TH.
UH, SO WE WILL TALK TO YOU ALL THEN.
UH, Y'ALL HAVE A HAPPY MONDAY AND ENJOY THE REST OF YOUR WEEK.