* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.
          THANK YOU. 
          [00:00:02]
UH, GOOD MORNING, MEMBERS OF THE ERCOT BOARD OF DIRECTORS AND GUESTS, I AM PAUL FOSTER, ERCOT, BOARD CHAIR. 
          WELCOME TO THE JUNE 20TH, 2023 BOARD OF DIRECTORS MEETING. 
          I HEREBY CALL THIS MEETING TO ORDER. 
          THE MEETING 
          [1. Call General Session to Order]
IS BEING BROADCAST LIVE TO THE PUBLIC ON ERCOT WEBSITE. 
          BEFORE WE BEGIN, I'D LIKE TO WELCOME NEW P U C INTERIM CHAIR KATHLEEN JACKSON TO HER FIRST ERCOT BOARD MEETING AS CHAIR. 
          UH, UPON HER APPOINTMENT AS INTERIM CHAIR, SHE ALSO BECAME AN EXOFFICIO MEMBER OF THE ERCOT BOARD ON BEHALF OF THE BOARD. 
          WELCOME. 
          AND WE WEL WE LOOK FORWARD TO CONTINUING TO WORK WITH YOU. 
          NOW, I'D LIKE TO WELCOME PUC CHAIR JACKSON, OR SORRY, ASK PUC, CHAIR JACKSON IF SHE'D LIKE TO CALL AN OPEN MEETING OF THE COMMISSION TO ORDER. 
          THANK YOU VERY MUCH. 
          THANK YOU VERY MUCH. 
          UH, THIS MEETING OF THE PUBLIC UTILITY COMMISSION OF TEXAS WILL COME TO ORDER TO CONSIDER MATTERS THAT HAVE BEEN DULY POSTED WITH THE SECRETARY OF STATE FOR THE STATE OF TEXAS FOR JUNE 20TH, 2023. 
          HERE TODAY IS, UH, COMMISSIONER WILL MCADAMS AND COMMISSIONER JIMMY GOFF LTY ALSO PARTICIPATING. 
          OKAY. 
          UH, BEFORE MOVING ON TO TODAY'S BUSINESS, I WANTED TO TAKE A MOMENT TO THANK FORMER PUC CHAIR PETER LAKE, BOTH FOR HIS SERVICE AS PUC CHAIR DURING THE DIFFICULT PERIOD FOLLOWING WINTER STORM URI, AND ALSO FOR HIS SERVICE AS AN EX-OFFICIO ERCOT BOARD MEMBER ON BEHALF OF THE ENTIRE BOARD. 
          UH, WE APPRECIATE HIS LEADERSHIP AND HARD WORK AND WISH HIM THE BEST OF LUCK GOING FORWARD. 
          PABLO, WOULD YOU LIKE TO ADD ANYTHING ON BEHALF OF ERCOT? I WOULD. 
          THANK YOU, CHAIR. 
          UM, SO COMMISSIONER AND CHAIRMAN LAKE HAS BEEN A PARTNER TO ERCOT OVER THE LAST COUPLE OF YEARS, HELPING TO CARRY THE MANTLE OF DRIVING RELIABILITY IMPROVEMENTS, IMPROVING OUR COMMUNICATIONS, AND HELPING TO, UH, BUILD THE SUPPORT ACROSS THE STATE FOR THE IMPORTANT WORK THAT WE'VE BEEN DOING OVER THE LAST COUPLE OF YEARS. 
          UH, I WANNA EXPRESS MY DEEPEST THANKS. 
          HE WAS A SIGNIFICANT HELP TO ME AS I TRANSITIONED INTO THIS ROLE, UH, HELPING ME TO UNDERSTAND THE, THE INCREDIBLE WORK THAT HAD BEGUN AND THAT WAS ONGOING AND, UH, WILL MISS HIS PARTNERSHIP. 
          BUT, UH, WE KNOW THAT THE LEGACY THAT HE LEAVES AND THE STRONG COMMISSION THAT, UH, HAS BEEN BUILT UNDER HIS LEADERSHIP IS WELL POSITIONED TO CONTINUE THE IMPORTANT WORK THAT ERCOT AND THE PUC HAVE AHEAD OF US. 
          SO A BIG THANKS AND APPRECIATION TO CHAIRMAN LAKE FOR, FOR ALL THAT HE'S CONTRIBUTED OVER THE LAST COUPLE YEARS. 
          ALL RIGHT. 
          THANK YOU, PABLO. 
          UH, NOW MOVING ON. 
          I'D LIKE TO HIGHLIGHT THAT THE, UH, ANTITRUST ADMONITION AND SECURITY MAP ARE INCLUDED WITH POSTING POSTED MEETING MATERIALS. 
          UM, THE FIRST ORDER OF BUSINESS ON TODAY'S AGENDA IS ITEM TWO. 
          NOTICE OF PUBLIC COMMENT, 
          [2. Notice of Public Comment, if Any]
IF ANY. 
          TODAY'S MEETING AGENDA WAS POSTED PUBLICLY ON JUNE 13TH AND PROVIDED INSTRUCTIONS FOR THE, FOR THE PUBLIC FOR COMMENTING IN PERSON DATE. 
          NO ONE HAS EXPRESSED INTEREST IN COMMENTING. 
          IS THAT, UH, STILL THE CASE, CHAD? YES, THAT IS CORRECT. 
          ALL RIGHT. 
          UH, MOVING 
          [3. Consent Agenda]
ON TO AGENDA ITEM THREE, CONSENT AGENDA. 
          I'LL TURN IT OVER TO CHAD TO PROVIDE THE BUDGET IMPACTS OF THE REVISION REQUEST. 
          OKAY. 
          YOU HAVE NINE REVISION REQUESTS ON THE CONSENT AGENDA. 
          ALL ARE NO DOLLAR IMPACTS TO ERCOT TO IMPLEMENT, AND NO FULL-TIME EQUIVALENT IMPACTS AS WELL. 
          UM, THERE ARE THREE OTHER REVISION REQUESTS THAT WE DEALT WITH UNDER THE TAC REPORT, AND THERE ARE NO IMPACTS ASSOCIATED WITH THOSE ITEMS AS WELL. 
          UH, HAPPY TO ANSWER ANY QUESTIONS. 
          ALL RIGHT. 
          UH, HEARING NONE, UH, THANK YOU, CHAD. 
          WITH THAT, DOES ANY BOARD MEMBER WISH TO DISCUSS OR REMOVE ANY ITEM FROM THE CONSENT AGENDA? IF THERE'S NO FURTHER DISCUSSION, I'LL ENTERTAIN A MOTION TO APPROVE THE CONSENT AGENDA AS PRESENTED. 
          MR. CHAIRMAN, I'LL MOVE APPROVE. 
          THANK YOU. 
          SECOND. 
          SECOND. 
          ALL RIGHT. 
          ALL IN FAVOR? AYE. 
          ANY OPPOSED? THAT PASSES. 
          THANK YOU. 
          UH, 
          [4. April 18, 2023 General Session Meeting Minutes]
NEXT AGENDA. 
          ITEM FOUR, UH, APRIL 18TH, 2023. 
          GENERAL SESSION MEETING MINUTES. 
          THERE'S A DRAFT OF THESE MINUTES IN YOUR MATERIALS. 
          UH, DOES ANYONE HAVE ANY COMMENTS OR WISH TO MAKE A MOTION? SO MOVED. 
          THANK YOU. 
          MOTION AND A SECOND. 
          ALL IN FAVOR? A A AYE. 
          ANY OPPOSED? THAT PASSES. 
          NEXT AGENDA. 
          [5. CEO Update]
ITEM FIVE 
          [00:05:01]
IS OUR, UH, C E O UPDATE. 
          UH, AFTER THAT WE'LL TRANSITION INTO AGENDA ITEM SIX, WHICH IS THE 2023 SUMMER OUTLOOK. 
          AND WOODY DICKERSON AND KAAN GELMAN WILL EACH HAVE PRESENTATIONS FOR US. 
          BUT FIRST, UH, CEO UPDATE BY PABLO. 
          ALL RIGHT. 
          THANK YOU VERY MUCH, CHAIRMAN FOSTER, AND GOOD MORNING. 
          AND WELCOME EVERYBODY. 
          THANK YOU FOR, UH, JOINING TODAY. 
          I WANTED TO START OFF, UM, RIGHT UP FRONT, UH, WITH A, UH, WITH A HEADS UP AND, AND NOTIFICATION THAT WE ARE THAT ERCOT IS ASKING TEXANS TODAY TO VOLUNTARILY REDUCE ELECTRIC, ELECTRIC USAGE IF IT IS SAFE TO DO SO. 
          THIS IS A VOLUNTARY CONSERVATION NOTICE THAT IS BEING REQUESTED TODAY FROM 4:00 PM UNTIL 8:00 PM THIS EVENING. 
          THE VOLUNTARY CONSERVATION NOTICE, IT'S PART OF ERCOT NEW TEXAS ADVISORY NOTIFICATION SYSTEM, WHICH IS INTENDED TO HELP ALERT TEXANS AS TO WHAT'S GOING ON ON THE GRID. 
          LAST WEEK, IF YOU RECALL, WE ISSUED OUR FIRST WEATHER WATCH. 
          UH, WE ISSUED IT ON THE 13TH FOR THE PERIOD OF TIME BETWEEN JUNE 15TH AND JUNE 21ST, BECAUSE OF EXPECTED HIGH TEMPERATURES AND HIGH DEMAND. 
          AND SO WE ARE EVOLVING AND MOVING TO THE NEXT STEP IN THE TEXAS ADVISORY NOTIFICATION SYSTEM, WHICH IS A VOLUNTARY REQUEST TO CONSERVE ENERGY. 
          WE'RE ALSO REQUESTING THAT ALL GOVERNMENT AGENCIES, INCLUDING CITY AND COUNTY OFFICES TO IMPLEMENT ALL PROGRAMS TO REDUCE ENERGY USAGE AT THEIR FACILITIES IF POSSIBLE. 
          SO, I WANNA BE CLEAR, ERCOT IS NOT EXPERIENCING ANY EMERGENCY CONDITIONS RIGHT NOW. 
          VOLUNTARY CONSERVATION IS A VERY WIDELY USED INDUSTRY TOOL THAT CAN HELP LOWER DEMAND FOR SPECIFIC PERIODS OF TIME, WHICH IS TYPICALLY IN THE LATE AFTERNOON AND EARLY EVENING DURING THE SUMMER. 
          YESTERDAY, WE, UH, BROKE AN, AN UNOFFICIAL RECORD AT THIS POINT. 
          IT'LL BE OFFICIAL ONCE ALL THE COUNTING AND CALCULATIONS ARE DONE, BUT YESTERDAY WE BROKE A JUNE PEAK DEMAND RECORD, UM, HITTING 79,304 MEGAWATTS, WHICH PASSED THE RECORD, WHICH WAS SET LAST JUNE OF 76,718 MEGAWATTS. 
          SO A FAIRLY SIGNIFICANT STEP UP YESTERDAY, AND WE POTENTIALLY COULD BE LOOKING AT ANOTHER RECORD SETTING DAY TODAY. 
          AND SO, UH, WITH THAT, I JUST WANTED TO MAKE SURE THAT FOLKS WERE AWARE OF WHAT WE ARE REQUESTING. 
          AND, UM, AND WE CAN GET INTO MORE DETAILS LATER IN THIS CONVERSATION. 
          AND ALSO DURING OUR, UH, SUMMER UP OUTLOOK, UH, UPDATE FROM DAN WOODFIN. 
          SO, I'D LIKE TO SAY THAT I'M VERY PROUD OF THE CONTINUED PROGRESS THAT ERCOT HAS BEEN MAKING WITH ALL FACETS OF OUR OPERATIONS AND COMMUNICATIONS IMPROVEMENT. 
          WE LAUNCHED THE FIRST DAILY PROCURED NEW ANCILLARY SERVICE IN MORE THAN TWO DECADES THIS LAST MONTH, THIS MONTH IN E C R S, THE NEW ERCOT CONTINGENCY RESERVE SERVICE. 
          THAT IS A BIG, BIG MILESTONE. 
          WE ALSO LAUNCHED IN ON MAY 31ST, THE BRAND NEW COMMUNICATION PLATFORM THAT I JUST MENTIONED, TEXAS ADVISORY NOTIFICATION SYSTEM, OR TEXANS AS WE'RE CALLING IT. 
          THESE ARE BIG MILESTONES IN THE EVOLUTION OF OUR GRID OPERATIONS AND A BIG STEP FORWARD TO OUR COMMITMENT TO CONTINUE TO HELP IMPROVE THE FREQUENCY AND THE TRANSPARENCY AND THE CLARITY OF OUR COMMUNICATIONS TO THE GENERAL PUBLIC. 
          AS WE HAVE BEEN TALKING OVER THE LAST COUPLE OF BOARD MEETINGS, WE JUST FINISHED OUR LEGISLATIVE SESSION, UH, WITH REGARDS TO THE ISSUES THAT, UH, ERCOT AND THE ELECTRIC MARKET HAD BEEN DEALING WITH. 
          WE, IT WAS AN INTENSE SESSION WITH REGARDS TO THE NUMBER OF ELECTRIC RELATED BILLS AND THE DIVERSE AND THE DISPARATE OPINIONS ON HOW TO ADDRESS REALLY THE CORE ISSUES OF THE MARKET REDESIGN. 
          ERCOT WAS ACTIVE IN THE, BOTH THE PUBLIC TESTIMONY AS WELL AS IN ONE-ON-ONE EDUCATION AND RESOURCE SUPPORT THROUGHOUT THE LEGISLATIVE SESSION. 
          WHILE SEVERAL INDUSTRY RELATED BILLS PASSED, THE TWO THAT FOCUSED ON MARKET REDESIGN WERE HOUSE BILL 1500, WHICH WAS THE SUNSET BILL FOR THE PUBLIC UTILITY COMMISSION, ERCOT, AND THE OFFICE OF PUBLIC UTILITY COUNCIL, AS WELL AS SENATE BILL 26 27 IN HOUSE BILL 1500. 
          ALL OF THE RELEVANT AGENCIES WERE FUNDED FOR THE NEXT SIX YEARS TILL THE NEXT NORMAL SUNSET CYCLE. 
          AND IN ADDITION, SEVERAL MARKET DESIGN PROVISIONS WERE PASSED THAT WE'LL DISCUSS A LITTLE MORE DETAIL DURING OUR LEGISLATIVE UPDATE. 
          UH, LATER THIS MORNING. 
          OUR TEAM IS CURRENTLY WORKING ON ANALYZING THE EFFECT OF ALL OF THE PROVISIONS THAT HAVE PASSED IN THE LEGISLATION THAT IS OUT THERE. 
          AND WE WILL BE COMMUNICATING MORE AS WE ASSESS ALONG WITH THE PUBLIC UTILITY COMMISSION, THE BEST APPROACHES FOR COMPLYING WITH THE NEW CHANGES IN LEGISLATION. 
          I WANTED TO GIVE A BRIEF UPDATE ON 
          [00:10:01]
HOW WE SAW OUR RUCK, WHICH IS OUR RELIABILITY UNIT COMMITMENT PERFORMANCE, AND OUR ADVANCED ACTION NOTICES OVER THE LAST COUPLE OF MONTHS. 
          WE CONTINUED TO USE BOTH OF THEM AS NEEDED IN ORDER TO ENSURE OUR RELIABLE OPERATIONS. 
          UH, YOU CAN SEE THAT, UH, WE'VE LEVERAGED THEM, THE, THE RUC TOOL AND BOTH OF THEM, UH, AS PART OF OUR RELIABILITY FIRST. 
          AND, AND ONE OF THE, AND IN ONE OF THE PROVISIONS I WAS PASSED, WE'RE GONNA BE INTENDING TO TRY TO REDUCE THE RUCKS WHERE POSSIBLE. 
          THE ONE OF THE PROVISIONS PASSED, WHICH IS FOR THE D R R S, WHICH IS THE, UH, UH, A NEW ANCILLARY SERVICE REQUIRES A REDUCTION IN THE AMOUNT OF RUCK AS IT IS UTILIZED. 
          NOW, RUCK IS A IMPORTANT RELIABILITY TOOL. 
          IT'S STILL WITHIN OUR DISPOSAL AND SOMETHING WE'LL STILL CONTINUE TO USE AS NECESSARY FROM AN AAN POINT OF VIEW. 
          UM, YOU SEE A LOT MORE AANS TYPICALLY IN THE SHOULDER MONTHS BECAUSE AANS ARE ESSENTIALLY, WHEN WE ARE ASKING OR PUTTING OUT NOTICE THAT WE MAY NEED TO MOVE A SCHEDULED OUTAGE BASED ON A PLANNED OUTAGE THAT A GENERATION UNIT HAS. 
          THE PLANNED OUTAGE SEASON IS TYPICALLY DURING THE SPRING AND THE FALL. 
          AND SO YOU SEE THE NUMBERS OF AAMS THAT WE ISSUED DURING THIS SPRING WERE A PRETTY GOOD NUMBER BASED ON THE WEATHER CONDITIONS THAT WE SAW AND THE NEED TO PROVIDE THAT NOTICE, UH, THAT WE MAY NEED TO DO. 
          SO WE WOULD EXPECT TO SEE A DECREASE IN AAMS DURING THE SUMMER BECAUSE WE DON'T HAVE AS MANY PLANNED OUTAGES SCHEDULED DURING THE SUMMER, AND WOULD EXPECT TO SEE THE RETURN OF AAMS AGAIN BACK IN THE FALL. 
          BUT JUST WANTED TO KEEP YOU AWARE THAT BOTH TWO OF THESE TOOLS WERE USED WITH REGULARITY THROUGHOUT THE SPRING IN ORDER TO CONTINUE TO MAINTAIN OUR RELIABILITY FIRST POSTURE, I MENTIONED THAT WE LAUNCHED OUR FIRST NEW ANCILLARY, UH, DAILY PROCURED ANCILLARY SERVICE IN MORE THAN 20 YEARS. 
          THIS IS THE ERCOT CONTINGENCY RESERVE SERVICE. 
          THERE WERE MINIMAL HICCUPS THROUGHOUT THE LAUNCHING OF THIS NEW PRODUCT. 
          IT HAS PERFORMED VERY WELL IN THE DEPLOYMENTS THAT WE HAVE HAD. 
          WE HAVE DEPLOYED IT ALREADY THIS SUMMER ON JUNE 14TH AND JUNE 16TH, JUNE 18TH. 
          WE DEPLOYED THEM BETWEEN THE TIME PERIODS OF 6:30 PM AND 7:20 PM THE DURATION OF RANGES, HOW WE USE THIS, HAVE RANGED FROM JUST UNDER FIVE MINUTES TO MORE THAN 25 MINUTES. 
          THE SIZES OF THOSE DEPLOYMENTS RANGED FROM ABOUT 200 MEGAWATTS UP TO ABOUT 600 MEGAWATTS. 
          AND THE REASONS THAT WE'VE BEEN DEPLOYING THEM HAVE BEEN, UH, WHAT A COUPLE OF THEM WERE, BECAUSE WE HAD INSUFFICIENT CAPACITY FORECASTED IN THAT 10 MINUTE AHEAD, UH, NET LOAD TIME. 
          WE DID THAT TWICE FOR THAT REASON, AND THEN ONE OF THEM BECAUSE, UH, FREQUENCY DIPPED DOWN TO 59.91 HERTZ. 
          AND SO WE DEPLOYED IT DURING THAT EVENT. 
          WE'VE BEEN PROCURING, ON AVERAGE, ABOUT 2000 MEGAWATTS OF ECRS PRODUCT PER HOUR ON AVERAGE, AND, UH, HAVE SEEN VERY STRONG EFFECTIVE USE OF IT. 
          AND IT'S WORKING EXACTLY AS WE HAD HOPED. 
          IT'S BECOME A NEW TOOL IN OUR SUITE OF OPERATIONAL FLEXIBILITY WHEN WE COUPLE THAT WITH NON SPIN. 
          WE'VE GOT A BROADER SUITE OF TOOLS NOW THAT WE CAN USE TO HELP DEAL WITH CHANGES IN, UH, LOAD, CHANGES IN SUPPLY, AND BE ABLE TO RESPOND VERY QUICKLY, QUICKLY TO MARKET CONDITIONS AS THEY EVOLVE. 
          AS WE'RE GOING INTO THE SUMMER. 
          WE, ONE OF THE THINGS THAT WE DO, JUST LIKE WE DO WHEN WE GO INTO THE WINTER, IS WE HAVE A WEATHERIZATION PROGRAM TO INSPECT BOTH GENERATION AND TRANSMISSION RESOURCES FOR THE EXTREME SUMMER HEAT. 
          AND SO OUR SUMMER INSPECTION OPERATIONS ARE, ARE ONGOING RIGHT NOW. 
          WE HAVE TO FILE, UH, TODAY, UM, THE DECLARATIONS OF COMPLIANCE BY ALL OF THE PARTICIPANTS THAT PROVIDE THESE DECLARATIONS. 
          I CAN SAY AS A PREVIEW THAT WE ARE, FOR THE MOST PART, GOTTEN ALMOST ALL OF THE DECLARATIONS IN ON TIME. 
          SO VERY GOOD PERFORMANCE ON THE MARKET SIDE AND IN COMPLYING WITH THIS REQUIREMENT. 
          UM, IN ADDITION TO, UH, TO THAT, WE, IF YOU LOOK AT OUR CUMULATIVE INSPECTIONS, WOODY MENTIONED THIS YESTERDAY ON A CUMULATIVE LEVEL, WE ARE WELL AHEAD OF OUR, UH, THREE YEAR CYCLE FOR INSPECTING SUPPLY SIDE RESOURCES. 
          AND WE'RE ALSO ANTICIPATING, UH, INSPECTING A HIGHER NUMBER OF RESOURCES THIS SUMMER IN EXCESS OF AROUND 500 RESOURCES, WHICH IS ALSO AHEAD OF PACE FOR OUR THREE YEAR OBLIGATION CYCLE. 
          SO WE'RE SEEING THIS AS A KEY TOOL TO HELP ENSURE THAT WE CAN WORK BEST PARTNERS WITH THE INDUSTRY TO MAKE SURE THAT EVERYTHING IS BEING DONE, TO MAKE SURE THAT THE GENERATION RESOURCES CAN MEET THE EXPECTATIONS DURING THE SUMMER HEAT. 
          IN ADDITION, DURING THE SUMMER, WE ALSO THINK ABOUT EXTREME WEATHER LIKE HURRICANES. 
          AND SO WE DO SEVERE WEATHER DRILLING, UH, WITH MARKET PARTICIPANTS. 
          WE HAVE ONE SCHEDULED TO DO LATER THIS SUMMER IN AUGUST. 
          AND IT'S PART ALSO OF OUR, UH, RAPID RESPONSE AND, UH, BUSINESS CONTINUITY, UH, WORK THAT WE DO AS AN ORGANIZATION. 
          I WANTED TO TALK A LITTLE BIT ABOUT THIS NEW PLATFORM THAT WE JUST LAUNCHED. 
          UM, 
          [00:15:01]
FIRST OFF, WE'VE SEEN INCREDIBLE RESPONSE. 
          YOU KNOW, RIGHT OFF THE START, WE'VE HAD OVER 3,100 PEOPLE SIGN UP SO FAR. 
          THIS SAYS 2100, BUT THIS IS A MORE, WE GOT A MORE UPDATED NUMBER JUST IN THE LAST 24 HOURS. 
          WE'VE SEEN OVER 3,100 PEOPLE SIGN UP FOR THESE NOTIFICATIONS. 
          AND AS I MENTIONED, WE LEV LEVERAGED IT LAST WEEK AS WE LAUNCHED OUR FIRST WEATHER WATCH. 
          UH, THAT COVERS THE PERIOD THAT WE'RE IN RIGHT NOW. 
          THE PURPOSE OF, OF THIS, AND THE PURPOSE OF A WEATHER WATCH IS REALLY TO GIVE NOTICE THAT WEATHER DRIVEN DEMAND OR SUPPLY COULD LEAD TO TIGHT CONDITIONS. 
          AND WE ARE ESSENTIALLY ASKING FOLKS TO JUST STAY TUNED FOR MORE INFORMATION COMING. 
          THAT'S THE PURPOSE OF A WEATHER WATCH. 
          WE DON'T USE IT, UH, IN ORDER TO SIGNAL THAT WE EXPECT ANY KIND OF EMERGENCY CONDITIONS OR THAT THE GRID IS HAVING ANY RELIABILITY PROBLEMS. BUT IT'S KIND OF LIKE WHEN YOU'RE LISTENING TO THE WEATHER AND THEY SAY, HEY, STAY TUNED. 
          THERE COULD BE SEVERE WEATHER IN THE FUTURE. 
          STAY TUNED FOR MORE INFORMATION. 
          THAT'S WHAT WE ARE DOING WITH THE WEATHER WATCH, IS WE'RE ASKING FOLKS TO STAY TUNED FOR MORE INFORMATION. 
          AND SO THAT HAS BEEN VERY EFFECTIVE AND, AND GETTING FOLKS TO PAY ATTENTION AND TO TAKE A LOOK AT WHAT'S HAPPENING AND AS IT WORKED IN TODAY. 
          THEN AS FOLKS ARE STAYING TUNED AND PAYING ATTENTION TODAY, WE'RE ISSUING THAT VOLUNTARY CONSERVATION NOTICE, WHICH IS THE NEXT PROGRESSIVE STEP IN OUR NEW TEXAS ADVISORY NOTIFICATION SYSTEM. 
          AND SO IT'S A VOLUNTARY, I'LL SAY AGAIN, IT'S A VOLUNTARY ASK FOR CONSERVATION. 
          IT IS DIFFERENT THAN A CONSERVATION CALL THAT WE'RE OBLIGATED TO MAKE DURING EMERGENCY, UH, CONDITIONS. 
          WE DO THIS IN ADVANCE OF HAVING ANY EMERGENCY CONDITIONS WHILE THE GRID IS STABLE, AND WE DO IT TO HELP TO PREVENT GETTING INTO EMERGENCY CONDITIONS AND IN AN ABUNDANCE OF CAUTION. 
          UH, SO THIS IS SOMETHING THAT WE DON'T INTEND TO USE ON A REGULAR BASIS. 
          WE ONLY DO IT WHEN WE THINK IT REQUIRE THE, THE, WHAT THE CONDITIONS REQUIRE IT. 
          AND SO TODAY, WE BELIEVE IS A PRUDENT TIME TO UTILIZE THIS NEW TOOL THAT WE HAVE AVAILABLE. 
          AND SO THEN I'D LIKE TO CLOSE MY PREPARED REMARKS WITH, UH, AS I USUALLY DO, WHICH IS, UH, WITH A BIG THANK YOU, UH, THANK YOU TO A COUPLE OF SIGNIFICANT EFFORTS AND THE TEAMS THAT SPECIFICALLY WORKED ON THEM. 
          I'D LIKE TO THANK ALL OF THE ERCOT EMPLOYEES THAT WORKED ON THE LAUNCH OF E C R S. 
          THIS WAS A DEVELOPMENT CYCLE THAT TOOK NEARLY THREE YEARS IN THE MAKING. 
          VERY SIGNIFICANT BIG STEP FORWARD, GREAT FLEXIBILITY AND, AND TOOL THAT WE CAN NOW USE AND ARE USING IN ORDER TO HELP KEEP THE GRID RELIABLE. 
          ALL THE PEOPLE ON THIS, UH, PAGE, WERE A SIGNIFICANT CONTRIBUTOR TO HELPING TO MAKE THIS HAPPEN. 
          AND I ALSO WANNA DO A BIG THANK YOU TO ALL OF THOSE THAT WORKED ON THE LAUNCH OF THE TEXAS ADVISORY NOTIFICATION SYSTEM, OUR NEW TEXAN SYSTEM. 
          BIG THANKS TO THEM FOR ALL OF THE WORK ON, ON THAT. 
          UH, ON, ON THAT LAUNCH, WE TOOK THIS FROM CONCEPT TO LAUNCH IN ABOUT THREE MONTHS. 
          AND SO WHEN YOU THINK ABOUT THAT, THE RESPONSIVENESS, THE AGILITY OF THE ORGANIZATION, RECOGNIZING THE OPPORTUNITY TO HELP KEEP TEXANS BETTER INFORMED AND COMMUNICATED AS TO WHAT'S HAPPENING ON THE GRID, BEING ABLE TO, TO, TO BUILD THIS CONCEPT AND DELIVER IT IN JUST A THREE MONTH PERIOD WAS REALLY QUITE A REMARKABLE EVENT. 
          SO, BIG THANKS TO ALL THE FOLKS ON THIS TEAM, AND A BIG FAN THANKS TO EVERYONE IN THE ADA EIGHT LEGISLATURE AND THE TEAM AT ERCOT THAT WORKED CLOSELY WITH THEM. 
          IT WAS A LONG SESSION. 
          LIKE I SAID, IT WAS INTENSE, A LOT OF ELECTRIC ISSUES COVERED, SO A BIG APPRECIATION TO THE TEAMS ACROSS THE, OUR ORGANIZATION THAT WERE ENGAGED AND HELPED TO PROVIDE SUPPORT AND EDUCATION AND TESTIMONY THROUGHOUT THE LEGISLATIVE SESSION. 
          SO, WITH THAT, I WILL PAUSE AND, UH, TAKE ANY QUESTIONS. 
          ALL RIGHT. 
          IF THERE ARE NO QUESTIONS, I WILL, UH, TURN IT OVER TO, UH, DAN 
          [6. 2023 Summer Outlook]
WOODFIN TO GO THROUGH OUR SUMMER WEATHER AND OPERATIONS UPDATE. 
          IS DAN AVAILABLE OR, I THINK WOODY'S GONNA, IS WOODY GONNA COVER FOR DAN? OKAY, THANK YOU. 
          GOOD MORNING. 
          UH, WOODY RICKSON. 
          I'M GONNA COVER FOR DAN THIS MORNING. 
          HE'S WORKING WITH THE, UH, CONTROL ROOM RIGHT NOW. 
          SO THIS IS A SUMMER 2023 WEATHER RESOURCE, ADEQUACY AND TRANSMISSION OUTLOOK. 
          KIND OF AN OVERVIEW. 
          UH, THERE'S NO VOTING ITEMS IN THIS, AND WE'VE GOT SOME KEY TAKEAWAYS THAT WE'LL COVER AS WE GO THROUGH THIS PRESENTATION. 
          SO, FIRST OF ALL, THE SUMMER WEATHER OUTLOOK. 
          UH, THE TEMPERATURE MAP SHOWS ABOUT HALF THE STATE ABOVE NORMAL AND THE REST NEAR NORMAL OR SLIGHTLY BELOW NORMAL. 
          SO THE TAKEAWAY FROM ALL THIS IS THAT WE EXPECT SUMMER 2023 TEMPERATURES TO BE AVERAGE, UH, FORECAST TO BE NEAR NORMAL, NOT AS EXTREME AS LAST SUMMER. 
          UH, THERE'S ALSO THE DEVELOPING EL NINO COULD LEAD 
          [00:20:01]
TO LOWER THAN NOR, UH, LOWER THAN, UH, NORMAL NUMBER OF TROPICAL STORMS IN THE FALL. 
          UM, AND A LOT OF THE DROUGHT THAT WE'VE SEEN, UH, IMPACTING THE WESTERN HALF OF THE STATE SEEMS TO BE SUBSIDING AS WELL. 
          SO THAT'S KIND OF A QUICK OVERVIEW OF, UH, THE 2023 SUMMER. 
          SO, WOODY, IS THIS A GOOD TIME TO CLARIFY FOR THE PUBLIC? SINCE WE ARE IN A REALLY HOT DAY, GOING INTO A, A HOT 14 DAY OUTLOOK IS THE DIFFERENCE BETWEEN THIS SUMMER AND LAST, THE FACT THAT WE'VE HAD RAINFALL AND THE FACT THAT THE, THE STATE IS NOT AS DRY AS IT WAS LAST SUMMER, WHICH CONTRIBUTED TO THOSE SUSTAINED LONG HEAT WAVES OF A MONTH AGO. 
          YEAH, I THINK THE LAST SPRING WAS A VERY UNUSUAL SPRING, AND THEN IT WAS DRY AND HOT EARLY ON IN THE SUMMER. 
          WE'VE HAD A, A GOOD WET SPRING THIS YEAR. 
          SO THAT HAS DAMPED DOWN A LOT OF THE TEMPERATURE PROBLEMS THAT WE MAY HAVE. 
          AND EVEN THOUGH WE ARE GONNA GO THROUGH SOME A PERIOD OF, OF PRETTY HOT WEATHER HERE, INCLUDING TODAY IN THE NEXT FEW DAYS, UM, THE OVERALL LOOK THIS SUMMER IS STILL EXPECTED TO BE MORE LIKE A NORMAL SUMMER. 
          SO RESOURCE ADEQUACY OUTLOOK. 
          UH, THE BASE PEAK DEMAND FORECAST THAT WE EXPECT THIS SUMMER IS SOMEWHERE AROUND 83,000. 
          UH, I THINK THE FORECAST TODAY IS A LITTLE OVER 80, 81 MAYBE. 
          SO WE'RE NOT THERE AT THE, AT THE PEAK YET. 
          UM, THAT INCLUDES SOME ACCOUNTING FOR, FOR LARGE FLEXIBLE LOADS, RESERVE MARGINS, ABOUT 23%. 
          UH, THE ASSESSMENT OF RESOURCE ADEQUACY FOR HIGH DEMAND DAYS IS GONNA BE VERY DEPENDENT ON WIND, AND THAT'S JUST THE, THE REALITY OF WHERE WE ARE. 
          UM, EVERY DAY WE WILL, WE'LL HAVE TO LOOK AT WHAT THE WIND IS DOING. 
          UM, THERE'S ALSO, THIS LAST BULLET TALKS ABOUT SOME SUPPLEMENTARY SCENARIOS THAT WERE INCLUDED IN THE SARAH TO SHOW THIS NEW IMPORTANCE OF LOOKING AT WHAT HAPPENS WHEN THE SUN GOES DOWN AND WE LOSE THE SOLAR OUTPUT. 
          SO, UH, THE, THE, THE AMOUNT OF SOLAR THAT WE HAVE ON THE SYSTEM HAS REALLY HELPED MITIGATE WHAT USED TO BE OUR PEAK HOUR, THE FOUR AND 5:00 PM HOUR. 
          AND NOW WE'RE A LITTLE MORE WORRIED ABOUT MAYBE THE 9:00 PM HOUR. 
          SO LOAD WILL DROP FROM FIVE TO 9:00 PM BUT THE SOLAR IS DROPPING MORE THAN THE LOAD DROPS. 
          AND SO THAT MAKES YOUR TIGHTEST HOUR BE LATER IN THE DAY. 
          UM, SO THE KEY TAKEAWAY HERE, LIKE I SAID, IS THAT WIND PRODUCTION CONTINUES TO BE A VERY, VERY IMPORTANT FACTOR EVERY DAY THIS SUMMER. 
          THE, UH, SEASONAL ASSESSMENT OF RESOURCE ADEQUACY, OUR, OUR SARAH REPORT, UH, TOTAL RESOURCES, 96,000, UM, THAT INCLUDES 10,000 MEGAWATTS OF WIND AND 12,000 MEGAWATTS OF SOLAR WITH THEIR ECCS. 
          SO YOU CAN SEE HERE THAT, UH, WE'VE GOT SUFFICIENT CAPACITY RESERVES FOR TYPICAL SYSTEM CONDITIONS IN MOST RISK SCENARIOS. 
          UM, UNAVAILABLE CAPACITY, THIS WOULD BE FORCED OUTAGES, UH, 5,000 TO 8,000. 
          IF YOU HAVE MORE THAN THAT 5,000, THAT COULD BE A PROBLEM. 
          AND, UM, A LOW WIND OR A LOW SOLAR DAY COULD BE THE VARIABILITY. 
          THERE COULD BE AS HIGH AS 11,000. 
          SO THAT, I MEAN, WE HAVE ENOUGH RENEWABLES NOW THAT WE REALLY HAVE TO LOOK AT THE VARIABILITY. 
          ONCE AGAIN, THAT WIND IS, IS VERY IMPORTANT TO LOOK AT. 
          SO THIS IS THE 9:00 PM THAT WE WERE TALKING ABOUT. 
          SO YOU CAN SEE THE TOTAL RESOURCES, 96, NOW WE'RE DOWN TO 90. 
          SO WIND ACTUALLY COMES UP ON AVERAGE AT 9:00 PM BUT THE SOLAR GOES DOWN EVEN MORE. 
          SO WE LOSE SOME OF THE TOTAL RESOURCES. 
          UH, THE LOAD GOES DOWN, SO YOU'RE LOOKING AT 78 INSTEAD OF 83. 
          UH, A LOW WIND DAY NOW HAS MORE VARIABILITY. 
          AND SO IF YOU THINK ABOUT THE VARIABILITY THAT YOU COULD HAVE WITH WIND, IT'S MORE CRITICAL AT 9:00 PM THAN IT WAS AT 5:00 PM BECAUSE THE OUTPUT IS TYPICALLY HIGHER. 
          AND, UM, CAPACITY AVAILABLE FOR RESERVES ON A LOW WIND DAY, YOU'LL SEE THAT 68 THERE, THAT'S IN LOAD SHED. 
          SO THAT IS A, UH, A LOAD SHED NUMBER. 
          AND THEN THE HIGH PEAK, IF YOU HAD THE REALLY HIGH PEAK, IF IF WE WERE TO MAINTAIN OVER 80,000 AFTER THE SUN GOES DOWN, THEN YOU HAVE A PRETTY SIGNIFICANT LOAD SHED NUMBER THERE OF NEGATIVE 3000. 
          SO THE KEY TAKEAWAY HERE IS THE, UH, AT 9:00 PM WE HAVE ALMOST NO SOLAR PRODUCTION, AND THIS IS A MORE CRITICAL TIME NOW THAN FIVE 
          [00:25:02]
WOODY. 
          UH, COULD, COULD YOU TALK THROUGH HOW, HOW DO YOU SEE BATTERIES PLAYING AT THAT 9:00 PM 9:00 PM HOUR? OR HOW DO YOU FORECAST THEM INTERACTING WITH THE SYSTEM? YEAH, SO THE, THE FIRST THING I WOULD SAY, UM, WE DON'T HAVE A GOOD FEEL YET FOR HOW BATTERIES ARE GONNA REACT IN THIS MARKET. 
          THEY'RE PRETTY NEW. 
          WE DON'T HAVE MUCH HISTORY. 
          UH, A LOT OF THE, THE BATTERIES THAT WE DO SEE ARE PARTICIPATING IN ANCILLARY SERVICES. 
          AND SO THEIR PRODUCTION IS NOT TYPICALLY WHAT YOU WOULD SEE FROM A BATTERY THAT WOULD BE PARTICIPATING IN THE ENERGY MARKET. 
          FOR THE ER REPORT THEY HAVE, THERE'S ABOUT 500 MEGAWATTS REPORTED AT 9:00 PM UM, I TH THE, THE EXPECTATION THOUGH IS THAT AS MORE BATTERIES ARE A ARE ADDED, THE ANCILLARY SERVICE MARKET WILL BECOME SATURATED. 
          MORE BATTERIES WILL BE IN THE, UH, IN THE ENERGY ONLY MARKET, AND YOU WILL SEE THOSE DISCHARGED FROM FIVE TO 9:00 PM. 
          SO THAT'S THE EXPECTATION. 
          UH, THE SUMMER TRANSMISSION OUTLOOK, UH, NO WIDE AREA RELIABILITY CONCERNS. 
          UH, WE HAVE WORKED WITH THE UNITS THAT HAD PROBLEMS IN THE ODESSA EVENTS, AND THE MITIGATION FOR THOSE UNITS HAS BEEN, UM, COMPLETED. 
          I THINK THERE'S ONE UNIT THAT'S STILL IN PROCESS. 
          UH, WE DO EXPECT TO SEE SOME CONGESTION IN SOME AREAS, EXPORT CONSTRAINTS FROM THE TYPICAL PLACES, PANHANDLE WEST TEXAS, AREAS OF THE RIO GRANDE VALLEY. 
          SO, UH, KEY TAKEAWAY HERE IS THAT, UH, WIDESPREAD TRANSMISSION RELIABILITY ISSUES ARE UNLIKELY THIS SUMMER. 
          WE DON'T SEE TRANSMISSION CONSTRAINTS BEING, UH, A MAJOR THING THIS SUMMER. 
          SO SOME OF THE OTHER OPERATIONAL CHANGES AND SOME OF THE OTHER PREPARATIONS, UH, ERCOT CONTINUENCY RESERVE SERVICE, THE E C R S PROCUREMENTS BEGAN A COUPLE WEEKS AGO, JUNE 10TH. 
          UM, SO THAT HAS BEEN SUCCESSFULLY, SUCCESSFULLY DEPLOYED. 
          THAT PRODUCT CAN RAMP IN 10 MINUTES TO RESPOND TO, TO SHORT TERM NET LOAD RAMPS. 
          AND WE'VE ALREADY USED IT, UM, VALIDATION OF, OF PHYSICAL RESERVE CAPACITY AND DISPATCH CAPABILITY THROUGH TIMELY RESOURCE, UH, TELEMETRY AND CURRENT OPERATING PLAN CHANGES THAT N P R R 10 85, WE THINK THAT'S GONNA HELP IMPROVE THE, UH, THE QUALITY OF OUR PRC. 
          SO GIVE US MORE ACCURATE PRC NUMBERS. 
          AND AS YOU GUYS KNOW, PRC IS THE MAJOR DRIVER. 
          THAT'S THE NUMBER THAT A LOT OF THINGS ARE KEYED ON. 
          AND SO HAVING AN ACCURATE PRC IS, IS VERY IMPORTANT. 
          UH, SUMMER OUTAGE TRANSMISSIONS FOR SUMMER TRANSMISSION OUTAGE RESTRICTIONS BEGAN IN MAY, AND THEY WILL REMAIN IN PLACE THROUGH SEPTEMBER 15TH. 
          UM, AND WE'LL CONTINUE WITH OUR CONSERVATIVE OPERATIONS WITH OUR 6,500 MEGAWATT RESERVES. 
          UM, KEY TAKEAWAYS HERE ARE WE'VE GOT SOME NEW TOOLS, THE ECRS AND THE NPR 10 85 CHANGES TO THE PRC, AND THAT'LL HELP US CONTINUE TO HAVE A VERY RELIABILITY FOCUSED OPERATING POSTURE THIS SUMMER. 
          SO, ANY QUESTIONS? ALL RIGHT, THANK YOU. 
          THANK YOU, WOODY CANON. 
          GOOD MORNING. 
          I'M GONNA GIVE YOU A SUMMER MARKETS AND CREDIT UPDATE. 
          UM, THE MAIN THINGS I WANNA SHARE WITH YOU IS THAT THE OPERATING DEMAND RESERVE DEMAND CURVE REMAINS THE MAIN DRIVER OF PRICING DURING SCARCITY INTERVALS. 
          AND, UH, FOR THE FIRST TIME IN A WHILE, THERE'S, UM, NO BIG CHANGES TO THE OPERATING RESERVE DEMAND CURVE GOING INTO THE SUMMER. 
          UM, THE PREDOMINANT CHANGE THAT WE'RE EXPERIENCING FROM A MARKET STANDPOINT IS THE IMPLEMENTATION OF, UH, E C R S, AS PABLO POINTED OUT. 
          UH, UH, IT'S BEEN IN PLACE AND WE'VE ACTUALLY DEPLOYED IT. 
          UH, SO, UM, UH, THAT, THAT IS A INTERESTING ADDITIONAL FEATURE TO THE MARKET GOING INTO THIS SUMMER. 
          AND THEN THE LAST THING I WANNA SHARE WITH YOU THAT I THINK IS AN IMPORTANT DRIVER IN TERMS OF WHAT WE'LL SEE AS FAR AS PRICING, IS THAT NATURAL GAS PRICES ARE MUCH LOWER THAN, UM, THEY HAD BEEN AT THIS CORRESPONDING TIME, UH, LAST YEAR. 
          SO, JUST AS A REFRESHER, 
          [00:30:01]
UH, THE OPERATING RESERVE DEMAND CURVE WILL WORK AS IT HAD IN 2022 WITH A CAP OF, UH, $5,000 AND A MINIMUM CONTINGENCY LEVEL OF 3000 MEGAWATTS. 
          THE MINIMUM CONTINGENCY LEVEL IS THAT FLAT PART THAT KIND OF LOOKS LIKE THE PANHANDLE, UH, ON, ON THE CURVE. 
          THAT'S, UM, UH, A, A KEY DRIVER IN, IN HOW, UH, MUCH ADDERS EXIST WITHIN THE OPERATING RESERVE DEMAND CURVE. 
          UM, I, I DO WANNA REMIND EVERYBODY THAT PRICES CAN GO ABOVE THE CAP. 
          THAT'S AN OFFER FLOOR, NOT A PRI UH, OFFER CAP, NOT A PRICE CAP. 
          UM, SO IF YOU HAVE CONGESTION, AND WE'RE TRYING TO SOLVE THAT CONGESTION, UH, THROUGH SCED, WE LET, UH, UH, PRICES GO ABOVE $5,000. 
          UM, AND THEN, UH, THE OTHER THING I WANNA MAKE SURE EVERYBODY UNDERSTANDS IS THE ULTIMATE PRICING OUTCOMES IN THIS, UH, DESIGN IS BASED ON SCARCITY CONDITIONS. 
          UM, AGAIN, AS, AS I POINTED OUT, UH, I WAS LOOKING AT THE PRESENTATION I GAVE LAST YEAR, UH, AT, UH, AT THIS TIME APPROXIMATELY. 
          AND, UH, I HAD SAID THAT THE, FOR, FOR THE MONTH OF MAY, THE AVERAGE PRICE, UH, PER MM B T U WAS $7 AND 48 CENTS. 
          UH, THE AVERAGE PRICE IN MAY FOR 2023 IS A DOLLAR 96. 
          SO THIS IMPACTS A WHOLE SERIES OF, UH, UH, ITEMS. IT, IT IMPACTS THE AVERAGE PRICING OF THE MARKET. 
          IT IMPACTS SPARK SPREADS. 
          UM, THAT'S HOW MUCH, UH, PROFIT PROFITABILITY, UH, UH, EFFICIENT GAS UNIT CAN MAKE OVER MAYBE THE MARGINAL GAS UNIT. 
          UH, SO THAT TH THESE ARE ALL, UH, UH, IMPACT, UH, HOW PROFITABLE OPERATING, UH, UNITS ARE, AND IT WILL IMPACT, UH, PEAKER NET MARGIN, UH, AS, AS WELL. 
          UM, WE ALSO, AS I SAID, LAUNCHED THE, UH, ERCOT CONTINGENCY RESERVE SERVICE. 
          UM, IT'S A NEW ANCILLARY SERVICE. 
          I THINK THE MARKET AND ERCOT ARE STILL GETTING, UH, FAMILIAR WITH IT. 
          UH, THE THING THAT IS CATCHING MY EYE IS THAT, UM, THE CONT ERCOT CONTINGENCY RESERVE SERVICE IS PRICING THE HIGHEST OF ALL THE, ALL THE ANCILLARY SERVICES. 
          UH, IN THE BRIEF TIME THAT WE'VE BEEN, UH, RUNNING THOSE AND CLEARING THOSE MARKETS. 
          UM, UH, I THINK IT'S SOMETHING WORTH, UH, STUDYING AND SOMETHING THAT I PLAN TO, UH, BRING TO THE R AND M UH, UH, UH, SUBCOMMITTEE ON, ON A REGULAR BASIS, JUST TO TALK THROUGH HOW THAT PRICING IS, IS OCCURRING. 
          UM, I THINK THERE ARE OTHER ELEMENTS AS WELL, ON THE CONTINGENCY RESERVE SERVICE THAT WE NEED TO WATCH IN TERMS OF HOW WE'RE DEPLOYING IT, UM, HOW MUCH IT'S, IT IS, UH, EFFECTIVELY OR COMFORTABLY BEING ABLE TO OFFSET ITS USE VERSUS NON SPIN. 
          ALL OF THOSE THINGS WILL BE, UH, ITEMS OF INTEREST AS WE GO THROUGH THE PROCESS. 
          KON, YOU, YOU DON'T SEE SIMILAR, UH, UM, PRICE FORMATION PHENOMENA FORMING AROUND E CCRS SIMILAR TO WHAT YOU SAW IN NONS SPIN. 
          SO, UH, IT ACTUALLY, UH, VERY INITIALLY LOOKS, UM, LIKE THERE'S SOME SIMILAR, UH, EYE ISSUES THAT ALIGN WITH THE NONS SPIN PRICING OUTCOMES. 
          SO, UM, WITH NONS SPIN TO, TO YOUR POINT, IT IS, UM, NOT AS HIGH A QUALITY SERVICE. 
          UH, IN THEORY, IT DOESN'T COST AS MUCH TO PROVIDE YET. 
          UH, NON SPIN HAS BEEN CLEARING, UH, VERY HIGH AND ABOVE RESPONSIVE RESERVE IN THE PAST. 
          THE COMMISSION HAS BEEN VERY, UH, INTERESTED IN THAT. 
          UM, THIS, UH, AGAIN, IS, UH, IT WOULD NOT BE AS HIGH A VALUE RESERVE AS, UM, RESPONSIVE RESERVE SERVICE WOULD BE, SO THAT THIS IS SOMETHING TO LOOK AT. 
          BUT, UH, THE OTHER THING TO KEEP IN MIND IS, UM, UH, IF, IF, IF WE WEREN'T KIND OF OFFSETTING THE AMOUNT OF NONS SPEND WE'RE PROCURING WITH THIS, THERE COULD BE A LIQUIDITY ISSUE BETWEEN BOTH OF THOSE MARKETS. 
          SO I THINK THE, THESE ARE ALL THINGS WE HAVE TO WATCH. 
          IT'S, UH, I WOULD BE, 
          [00:35:01]
UH, NERVOUS ABOUT MAKING ANY CONCLUSIONS, UH, AT, AT THIS POINT, BUT I THINK, UM, IT, IT'S SOMETHING TO WATCH AND REPORT ON WITH SOME REGULARITY. 
          BUT CANNAN, I PRESUME THAT YOU, YOU'RE PROCURING LESS NON SPIN THAN YOU OTHERWISE WOULD HAVE NOW THAT YOU HAVE E C S. 
          THAT THAT'S CORRECT. 
          UM, THE, THE QUESTION WILL BE, UH, HOW CLOSE CAN WE GET TO ONE-TO-ONE ON, ON THOSE? IF IT'S NOT ONE-TO-ONE, THEN NET ANCILLARY SERVICE PROCUREMENT IS, IS INCREASING, AND THAT COULD ABSOLUTELY BE THE RIGHT THING TO DO. 
          UM, IT'S JUST, UH, WANTING TO UNDERSTAND THOSE DYNAMICS. 
          UH, THE OPERATORS ARE GETTING MORE COMFORTABLE WITH THAT SERVICE SO THAT THERE'S JUST A LOT MORE OF THE STORY TO BE TOLD, AND I THINK IT'S GONNA BE IMPORTANT FOR US TO SHARE THAT WITH, WITH THE BOARD AS WE MOVE FORWARD. 
          UM, THEN THE LAST THING, AND, AND I SHARED THIS SLIDE, THIS IS KIND OF WHAT THE MARKET, UH, WA WAS EXPECTING THINGS TO DO. 
          THIS IS, THESE ARE FORWARD PRICES. 
          UM, AND THIS IS, UH, UH, WHAT I PULLED ON, UM, JUNE 8TH. 
          UM, I ACTUALLY PULLED, UH, ADDITIONAL DATA YESTERDAY JUST TO LOOK AT THIS, AND I WOULD SAY ALMOST ACROSS THE BOARD, IT'S PRICING OUT, UH, YESTERDAY AT ABOUT $10 HIGHER THAN IT WAS ON THIS GRAPH. 
          BUT THE THING I ALSO WANTED TO SHOW YOU IS HOW ARE THESE PRICES COMPARING TO THE PRICES THAT WE SAW GOING INTO THE SUMMER, UH, LAST YEAR, AND ACROSS THE BOARD, THIS IS PRICING HUNDREDS OF DOLLARS LESS THAN THE PRIOR YEAR. 
          SO, UH, REMEMBER WOODY WAS UP HERE SAYING, WE EXPECT THIS SUMMER TO BE, UH, SLIGHTLY COOLER OR MORE NORMAL THAN LAST SUMMER WAS. 
          UM, THE MARKET IS EXPECTING THE SAME THING, UH, FROM, FROM A PRICING STANDPOINT AND HOW, UH, HOW PRICES ARE CLEARING. 
          UM, I THINK THIS HOT WEATHER, YOU WILL SEE RATCHETS UP OF THIS AS, AS THE HOT WEATHER PATTERN CONTINUES. 
          UM, THE OTHER THING THAT DRI THE OTHER REASON WHY I WANTED TO SHARE THIS WITH YOU IS THAT THIS IS ONE OF THE COMPONENTS THAT DRIVE, UH, CREDIT AND COLLATERAL CALCULATIONS. 
          WE HAVE A LOOK FORWARD, UH, IN TERMS OF HOW WE CALCULATE COLLATERAL AND, AND CREDIT OBLIGATIONS, AND WE HAVE A LOOK BACK COMPONENT. 
          SO, UH, FROM THAT STANDPOINT, THIS ELEMENT IS, HAS A LOWER IMPACT OR, UH, ON IT, ON ITS OWN, WOULD, UH, LOWER THE CREDIT AND COLLATERAL REQUIREMENTS, UH, THAT WE HAVE. 
          SO, UM, THAT, THAT WAS THE OTHER PART OF THIS THAT I WANTED TO SHARE WITH THE BOARD, AND I'M HAPPY TO ANSWER ANY QUESTIONS THAT YOU MAY HAVE. 
          CAN I, CAN YOU COMMENT PLEASE ABOUT THE GENERATION MIX YOU'RE SEEING IN THE NEW E C R S ANCILLARY SERVICE? SO, UM, BROADLY WE'RE SEEING A COMBINATION OF BATTERIES AND THERMAL RESOURCES THAT CAN COME ONLINE IN 10 MINUTES. 
          UM, THAT IS NOT ALL OF THE, OUR QUICK START FLEET. 
          UM, THEY USUALLY, UM, HAVE TO BE IN A QUICK START MODE TO BE ABLE TO RESPOND IN 10 MINUTES. 
          UH, FOR SOME OF THE COMBUSTION TURBINES FOR THE, UH, KIND OF MORE INTERNAL COMBUSTION ENGINE TYPE UNITS, THEY CAN COME ONLINE, UH, IN, IN A REGULAR MODE AND IN AROUND FIVE MINUTES. 
          SO IT'S, UM, IT'S, UH, THE COMBUSTION TURBINES, IT'S BATTERIES, AND IT IS, UM, THE, THE INTERNAL COMBUSTION NAVAL ENGINE TYPE TECHNOLOGY AS WELL. 
          AND WHAT'S THE MINIMUM RUNTIME COMMITMENT THAT THEY HAVE TO BE ABLE TO PROVIDE? SO, UM, THERE IS A TWO HOUR, UH, COM. 
          UH, YOU HAVE TO BE ABLE TO RUN TWO HOURS, UH, AND THAT IS THE CA CAPACITY THAT YOU ARE ALLOWED TO OFFER IN. 
          SO THAT, UM, KIND OF REDUCES BY HALF THE AMOUNT OF BATTERY COULD OFFER IN RELATIVE TO ITS ABILITY TO DISCHARGE IN ONE HOUR. 
          AND JUST AS A REFRESHER, NON SPEND REQUIRES FOUR HOURS. 
          [00:40:01]
OKAY. 
          THANK YOU VERY MUCH. 
          THANK YOU, KANAN. 
          UH, 
          [7. Update on EPA Regulations Impacting Dispatchable  Thermal Resources]
NEXT IS AGENDA ITEM SEVEN, UPDATE ON EPA REGULATIONS IMPACTING DISPATCHABLE, UH, THERMAL RESOURCES. 
          AND CHAD SEALEY WILL PRESENT THIS. 
          GOOD MORNING, CHAD SEALEY, SENIOR VICE PRESIDENT AND GENERAL COUNSEL FOR ERCOT. 
          SO WANT TO KIND OF WALK THROUGH FIVE EPA REGULATIONS THAT COULD HAVE A SIGNIFICANT IMPACT ON DISPATCHABLE RESOURCES. 
          UM, ONE OF 'EM WE'VE TALKED ABOUT PREVIOUSLY, WHICH IS THE GOOD NEIGHBOR ROLE THAT HAS ALREADY, UH, BEEN PUBLISHED AND BECOMES EFFECTIVE, UH, IN AUGUST. 
          OF COURSE, THE STATE HAS TAKEN ACTION ON THAT AT THE FIFTH CIRCUIT. 
          AND THEN THERE'S FOUR OTHER REGULATIONS THAT WE'RE GONNA BRIEFLY TALK THROUGH THAT COULD HAVE IMPACT AS WELL. 
          OKAY. 
          WHEN I LOOK AT THESE KEY TAKEAWAYS, YOU KNOW, THE EPA RIGHT NOW IS COMING OUT WITH A LOT OF RULES THAT OVER THE NEAR TERM AND LONG TERM COULD HAVE A SIGNIFICANT IMPACT ON OUR DISPATCHABLE RESOURCES. 
          UM, OF COURSE THE, PROBABLY THE MOST SIGNIFICANT ONE IS THE GREENHOUSE GAS RULE THAT CAME OUT IN MAY THAT HAS A LONGER TERM IMPACT, BUT IT'S VERY AGGRESSIVE. 
          UH, WE'RE IN THE PROCESS OF EVALUATING THAT AS WELL. 
          UM, YOU KNOW, THE WAY ERCOT LOOKS AT THIS IS A COLLABORATION AMONG THE AGENCIES. 
          WE COORDINATE WITH THE PUBLIC UTILITY COMMISSION. 
          WE COORDINATE WITH THE TEXAS COMMISSION ON ENVIRONMENTAL QUALITY, AND TO THE EXTENT NECESSARY, THE ATTORNEY GENERAL'S OFFICE AS WELL. 
          BUT MOST IMPORTANTLY, WE HAVE TO ENGAGE THE GENERATORS TO UNDERSTAND WHAT THE DIRECT IMPACT IS. 
          AND WE'VE BEEN DOING THAT FOR THE LAST COUPLE OF MONTHS WHEN WE'VE LOOKED AT THE GOOD NEIGHBOR ROLE, AND THEY WERE VERY INSTRUMENTAL IN GIVING US FEEDBACK THAT ULTIMATELY ROLLED INTO OUR ASSESSMENTS WHEN WE WERE WORKING WITH THE STATE TO FILE DECLARATIONS THAT WOODY RIERSON SUPPORTED. 
          SO IT'S CRITICALLY IMPORTANT AS WE CONTINUE TO MOVE FORWARD AND EVALUATE THESE REGULATIONS THAT WE HAVE THE PARTNERSHIP WITH THE GENERATORS WHO ARE SITTING HERE TODAY TO CONTINUE TO WORK WITH ERCOT TO GIVE US THEIR ASSESSMENT OF WHAT THE IMPACT IS TO THEIR FLEET. 
          THEY ARE REALLY IN THE BEST POSITION TO TELL US WHAT THAT OVERALL IMPACT IS. 
          AND I'M SURE THEY'RE ALL LOOKING AT THESE ROLES TOO, TO UNDERSTAND WHAT THE NEAR TERM AND LONG-TERM IMPACT, WE CAN RUN ASSESSMENTS, WHICH IS WHAT WE'VE DONE, AND WE CAN PUT IN VERY GOOD ASSUMPTIONS, BUT WE'RE BUILDING THOSE ASSUMPTIONS BASED UPON THE DIRECT FEEDBACK THAT WE GET FROM OUR GENERATOR OWNERS. 
          YOU KNOW, WHEN WE TALK ABOUT THE CUMULATIVE IMPACTS OF ALL THESE RULES, IT'S GONNA BE DIFFICULT TO ASCERTAIN BECAUSE, UM, DEPENDING ON THE FLEET AND THE TIMING AND THE OVERALL ECONOMICS, IT'S GONNA HAVE A DIFFERENT IMPACT ON WHAT THAT MEANS LONG TERM. 
          SO THAT'S GONNA BE VERY DIFFICULT TO KIND OF DO AN OVERLAY OF WHAT ALL THESE EPA REGULATIONS MEAN TO TIE IT TO OUR DISPATCHABLE FLEET. 
          AND AGAIN, WE'VE TALKED ABOUT THE GOOD NEIGHBOR PLAN AND THE KNOX RESTRICTIONS. 
          THERE IS A STAY RIGHT NOW ON THE IMPACT TO TEXAS GENERATORS. 
          WE'LL TALK A LITTLE BIT MORE ABOUT THAT. 
          THERE ARE OTHER RULES OUT THERE THAT THE EPA IS PROPOSING. 
          UH, WE DO KIND OF DO AN ASSESSMENT AND KIND OF TRIAGE WHAT'S, WHAT'S RELEVANT AND HIGH IMPACT. 
          UM, THERE MAY BE AN EPA REGULATION DEALING WITH COAL ASH BASINS OR PONDS THAT COULD BE AN IMPACT IN THE PAST. 
          WE'VE LOOKED AT THAT AND WORKED WITH THOSE RESOURCES THAT MAY HAVE COAL ASH PONDS AND WHAT THAT IMPACT COULD BE AS WELL. 
          BUT I'LL FOCUS ON THE KIND OF THESE FIVE. 
          OKAY. 
          THE GOOD NEIGHBOR PLAN. 
          AGAIN, WE'VE KIND OF TALKED ABOUT THIS, UH, OVER THE LAST COUPLE MONTHS, SO I WON'T SPEND TOO MUCH TIME ON IT, BUT I WANTED TO PROVIDE KIND OF THE RECENT UPDATE. 
          UM, YOU KNOW, THE, IT WAS FINALLY PUBLISHED IN THE REGISTER, UH, IN, UH, WHEN WAS THAT ACTUALLY PUBLISHED? I THINK IT WAS JUNE 5TH. 
          AND SO THE SAME DAY, THE STATE FILED ACTION ON THE FEDERAL IMPLEMENTATION PLAN. 
          PRIOR TO THAT, THEY HAD ALREADY SUED THE EPA AT THE FIFTH CIRCUIT ON THE DENIAL OF THE STATE IMPLEMENTATION PLAN. 
          AND THE COURT HAS ALREADY, UH, ISSUED A STAY ON THAT. 
          AND EPA HAS ACKNOWLEDGED THAT THE STAY IS IN EFFECT AND WON'T IMPACT TEXAS GENERATORS UNTIL THAT'S ULTIMATELY RESOLVED BY THE COURT. 
          BUT WE HAD BEEN WAITING FOR THE EPA TO ULTIMATELY COME OUT WITH PUBLISHING THE FEDERAL RULE, WHICH IMPACTS THE OTHER 21 STATES THAT ARE IMPACTED BY THIS. 
          THEY DID THIS, AND SO IT BECOMES EFFECTIVE FOR ANY OTHER STATE THAT DOESN'T HAVE A STAY IN PLACE, UH, IN EARLY AUGUST. 
          NOW, AS WE'VE BEEN LOOKING AT THIS RULE, AND IF IT ULTIMATELY DOES BECOME EFFECTIVE TO TEXAS, WE'VE BEEN TALKING INTERNALLY ABOUT WHAT THE POTENTIAL MARKET RULE CHANGES COULD BE TO ADDRESS THE LONG-TERM IMPLICATIONS OF THIS IMPACT. 
          AND SPECIFICALLY THE, THE I, THE, THE LIMITATIONS ON NOX LIMITS MAY HAVE TO BE ADDRESSED IN THE FUTURE. 
          SO EPA HAS PUT TOGETHER A PROPOSAL HERE THAT REDUCES THE OVERALL ALLOWANCES FOR THE STATE, AND THAT COULD BE AN IMPACT TO OUR GENERATORS, UH, AS WE MOVE FORWARD IF IT ULTIMATELY COMES EFFECTIVE. 
          SO THERE MAY BE FUTURE PROTOCOL CHANGES IN, IN PLACE WHERE WE MAY NEED ADDRESS THAT, 
          [00:45:01]
UH, WITH THE STAKEHOLDERS ON GETTING MORE EMISSION LIMITATIONS INFORMATION INTO THE CONTROL ROOM TO UNDERSTAND WHEN THEY'RE GONNA HIT THOSE LIMITATIONS. 
          THERE MAY BE COMPENSATION ELEMENTS THAT WE WANT TO ADDRESS IN ORDER TO KEEP SOME OF THAT DISPATCHABLE RESOURCES ONLINE AS WE MOVE FORWARD WITH THOSE INITIATIVES. 
          THAT'S ALL YET TO BE DETERMINED, BUT JUST WANTED TO HIGHLIGHT THAT WE ARE HAVING INTERNAL DISCUSSIONS AROUND THAT. 
          BUT RIGHT NOW, WHAT IS GOING ON AS THE STATE ALONG WITH THE EPA WILL BE MOVING FORWARD WITH THE BRIEFING, AND THAT'LL BE HANDLED BY, BY THE FIFTH CIRCUIT. 
          ANY QUESTIONS ON THAT? OKAY. 
          THE PROPOSED GREENHOUSE GAS RULE, THIS IS POSSIBLY THE MOST SIGNIFICANT NEW E P REGULATION THAT WILL DIRECTLY IMPACT THE POWER INDUSTRY, WHICH WAS PROPOSED IN MAY. 
          IN THIS REGULATION, EPA IS PROPOSING TO SUBSTANTIALLY LIMIT CO2 EMISSIONS FROM COAL AND GAS FIRED UNITS. 
          AND YOU SEE KIND OF ALL THE RESTRICTIONS THAT PLAY OUT HERE. 
          AND AT THE END OF THE DAY, EPA IS WANTING RESOURCES TO, TO INSTALL CARBON CAPTURE AND STORAGE OR GREEN HYDROGEN TO CO-LOCATE. 
          AND YOU SEE THE TIMING HERE. 
          ONE INTERESTING TO NOTE IS THAT THERE'S ACTUALLY AN EXEMPTION FOR GAS UNITS THAT ARE 300 MEGAWATTS OR LOWER. 
          THEY'RE NOT SUBJECT TO THIS, AND THAT THERE'S NO NEW RULES PROPOSED FOR NEW COAL UNITS BECAUSE NONE ARE PLANNED. 
          NOW, E P A HAS ASKED FOR COMMENTS AROUND THAT, AND SO WE'RE EVALUATING THAT, BUT THEIR EXPECTATION IS THAT THERE'LL BE NO NEW COAL UNITS, UH, BEING BUILT GOING FORWARD. 
          SO AGAIN, YOU KNOW, WE'RE CURRENTLY EVALUATING, YOU SEE THAT THE KALIN DEADLINE IS AUGUST 4TH. 
          UM, UNLIKE SOME OTHER RECENT RULES, THIS RULE HAS A LONGER LEAD TIME FOR COMPLIANCE. 
          AND I THINK THAT WAS VERY INTENTIONAL FOR EPA TO TRY TO ADDRESS SOME OF THE IOS RTOS RELIABILITY CONCERNS FROM PREVIOUS COMMENTS ABOUT THE AGGRESSIVE NATURE OF THE PROPOSED RULES. 
          AND SO, UH, YOU KNOW, ON THAT PREVIOUS SLIDE, YOU SEE THAT IT HAS A LONGER LEAD TIME TO COMPLY, AND I THINK THEY WERE TRYING TO MANAGE SOME OF THE RELIABILITY CONCERNS THAT GRID OPERATORS HAVE EXPRESSED IN THE PAST. 
          YOU KNOW, THE OTHER INTERESTING THING ON THIS RULE IS THAT WHEN YOU'RE, WHEN YOU'RE DEALING WITH THIS GREENHOUSE GAS RULE, THERE'S THIS STANDARD CALLED THE BEST SYSTEM OF EMISSIONS REDUCTION STANDARD. 
          AND EPA HAS DETERMINED BASED UPON KIND OF LIMITED DATA THAT THE CARBON CAPTURE AND STORAGE AND THE GREEN HYDROGEN ARE THE BEST SYSTEM AT PLAY HERE. 
          AND THAT'S THE STANDARD FOR THIS GREENHOUSE GAS RULE THAT THE COURTS LOOK AT WHEN THEY'RE, WHEN, WHEN ENTITIES ARE CHALLENGING IT. 
          SO, UM, WE ALL KNOW THAT WE DON'T HAVE ANY GREEN HYDROGEN HERE AND THAT THE INFRASTRUCTURE, UH, HASN'T REALLY BEEN BUILT FOR THAT. 
          SO THEY'RE FOCUSING ON THE INFLATION REDUCTION ACT AS THE MECHANISM TO INCENTIVIZE THAT, THAT COMPLIMENTS, UH, YOU KNOW, THE PROPOSAL AND THE RULE. 
          SO, SO CHAD, UH, ON THAT, COULD YOU EXPLAIN THE, THE PERMITTING DYNAMIC WITH THE PROPOSED GREENHOUSE GREENHOUSE GAS RULE AND ANY NEW, UH, GENERATION FACILITIES THAT COULD BE COMING INTO THE ERCOT SYSTEM? DO THEY, THEY DO NOT HAVE TO COMPLY WITH THIS RULE AT THIS TIME, AND SO THEREFORE, T C Q DOES NOT HAVE TO INCORPORATE THAT INTO THEIR PERMIT PROCESS UNDER THE CLEAN AIR ACT? CORRECT. 
          THIS IS JUST A PROPOSED RULE RIGHT NOW AND STILL GOING THROUGH THE FORMAL RULEMAKING PROCESS. 
          SO WE SHOULD NOT SEE ANY, UH, OBSTACLE OR IMPEDIMENT IN THE PATH OF ANY GENERATION FACILITY INSTALLING AS OF NOW, AS OF RIGHT NOW, CUZ IT'S JUST A PROPOSED RULE. 
          WE DON'T KNOW WHAT THE FINAL OUTCOME WILL BE WHEN THEY ULTIMATELY PUBLISH THEIR FINAL RULE. 
          AND WE DON'T KNOW WHAT CHALLENGES MAY OCCUR AS A RESULT OF THAT. 
          THANK YOU. 
          BUT I ASSUME, YOU KNOW, E EVERY INVESTOR IS LOOKING AT, YOU KNOW, WHAT THE POTENTIAL ENVIRONMENTAL RESTRICTIONS WILL BE GOING FORWARD WITH THESE PROPOSED RULES. 
          YEAH. 
          COMMISSIONER MCADAM THAT, I WANT TO AMPLIFY THAT LAST POINT THAT CHAD SAID, IF YOU'RE AN INVESTOR THINKING ABOUT PUTTING CAPITAL IN A PROJECT LIKE THIS, A RULE LIKE THIS CAUSES REGULATORY UNCERTAINTY AND I I THINK IT WILL BE EXCEPTIONALLY DAMAGING TO POTENTIAL NEW CONSTRUCTION FOR FOSSIL FUEL UNITS. 
          ALSO, I THINK THIS, THIS RULE IS CHAD SAID, IS PROBABLY THE MOST DAMAGING ONE TO OUR, OR POTENTIALLY DAMAGE ONE TO THE TEXAS DISPATCHABLE FLEET. 
          UH, THIS ONE'S SCARY. 
          YEAH. 
          PARTICULARLY BECAUSE THERE ISN'T REALLY COMMERCIAL, PARTICULARLY BECAUSE THERE ISN'T REALLY A COMMERCIALLY AVAILABLE CARBON CAPTURE SYSTEM AVAILABLE YET. 
          YEAH. 
          THERE, THERE'S LIMITED EXPERIENCE WITH THAT. 
          AND AGAIN, I THINK THEY'RE TRYING TO LEVERAGE THE INFLATION REDUCTION ACT AS THE FINANCING MECHANISM TO INCENTIVIZE THAT TECHNOLOGY TO CO-LOCATE. 
          THERE'S ONE PLANT IN NORTH AMERICA THAT'S CURRENTLY USING IT. 
          IT'S A SMALL PLANT UP IN CANADA. 
          SO AGAIN, WE'RE EVALUATING THIS. 
          I DO WANNA SAY THAT THE ACTUAL COMMENT DEADLINE IS, IS AUGUST 8TH. 
          [00:50:01]
UM, WE DID REQUEST A 60 DAY EXTENSION ON THIS, AND THEY GAVE US A 15 DAY EXTENSION. 
          SO AUGUST 8TH IS ACTUALLY THE DEADLINE TO, TO FILE COMMENTS ON THIS. 
          OKAY. 
          THE PROPOSED TEXAS REGIONAL HAYES FEDERAL IMPLANTATION PLAN, AND THIS IS SOMETHING THAT DOES IMPACT SEVERAL OF OUR GENERATORS. 
          IT'S ANOTHER SIGNIFICANT E P A REGULATION. 
          THIS RULE WOULD IMP IMPOSE LIMITS ON SULFUR DIOXIDE AND PARTICULAR MATTER EMISSIONS FOR 12 UNITS AT SIX DIFFERENT POWER PLANTS. 
          IT'S A LITTLE OVER 6,600 MEGAWATTS THAT COULD BE IM IMPACTED. 
          UH, THE IMPLEMENTATION TIMELINE, OBVIOUSLY D UH, DIFFERS DEPENDING ON THE REMEDIATION THAT'S BEING REQUIRED HERE. 
          WE INTEND TO SUBMIT COMMENTS ON THIS RULE TO ADDRESS EPAS ANALYSIS OF THE RELIABILITY IMPACTS, WHICH WE BELIEVE IS FLAWED. 
          THEY ARE RELYING ON THE CDR, WHICH WE'VE TALKED ABOUT, USES KIND OF AVERAGE WEATHER AND DOESN'T ACCOUNT FOR OPERATIONAL CONDITIONS WHERE YOU MAY HAVE MORE PEAK DEMAND AND OTHER CONTINGENCIES LIKE LOWER WIND, UH, OR HIGHER OUTAGES. 
          SO WE'LL BE DOING SOME SIMULATIONS AND ASSESSMENTS, AGAIN, TALKING TO THE GENERATORS ABOUT WHAT THIS IMPACT IS. 
          BUT WE ULTIMATELY DO PLAN TO FILE COMMENTS WHICH ARE DUE, UH, AUGUST 2ND. 
          ANY QUESTIONS AROUND THAT ONE? SO, SO THIS IS AN EPA RULE THAT APPLIES ONLY TO TEXAS, IS THAT RIGHT? IT IS A TEXAS SPECIFIC RULE DEALING WITH NATIONAL PARKS AND WILDERNESS. 
          THE, THE, YOU KNOW, THE IDEA IS THAT THE POLLUTANTS IMPACTING THE VISIBILITY OF NATIONAL PARKS AND WILDERNESS. 
          AND SO JUST TO PUT THIS NUMBER IN CONTEXT, UH, THE 6,650 MEGAWATTS OF CAPACITY, UH, SO THAT ANYBODY AT THIS MEETING OR LISTING LISTENING TO THIS MEETING KNOWS THAT'S ABOUT HALF THE TEXAS FOCO FLEET ON DISPATCH GENERATION. 
          IS THAT RIGHT? WOODY? IS THAT IT'S ALMOST 10% OF OUR TOTAL YES. 
          THERMAL CAPABIL CAPABILITY. 
          SO THIS IS, THIS IS A DEVASTATING RULE AS WELL, JUST LIKE THE LAST ONE. 
          AND IT DOESN'T NECESSARILY MEAN THAT THOSE RESOURCE HOMEOWNER WOULD RETIRE THEIR UNITS, BUT IT COULD ACCELERATE THOSE DECISIONS. 
          UH, AND SO THAT'S, THAT'S PART OF THE DISCUSSION WITH THE GENERATORS TO UNDERSTAND WHAT THIS IMPACT MEANS TO THEM SO THAT WE CAN RUN THOSE ASSESSMENTS AND PROVIDE THE BEST OPERATIONAL RISK ASSESSMENT TO THE EPA AS WE'RE CONSIDERING ALL THESE RULES. 
          GOOD, CHAD CAN, CAN THESE NEW LIMITS, SO TWO LIMITS BE, UH, ACHIEVED WITH MODIFIED OPERATIONS OF THESE UNITS. 
          IN OTHER WORDS, IF YOU RUN THESE UNITS 25% OF THE TIME INSTEAD OF A HUNDRED PERCENT OF THE TIME, AND, AND CAN THEY MEET THE LIMITS THAT WAY AS OPPOSED TO PUTTING NEW TECHNOLOGIES ON THE, ON THE UNITS THAT DON'T KNOW, ON SPECIFICALLY ON S O TWO? I THINK THERE'S OTHER EMITTANCE WHERE THEY CAN CONTROL THE OUTPUT AND OBVIOUSLY HAS A DIFFERENT IMPACT ON WHAT THE OVERALL EMISSIONS QUALITY IS, BUT I'M NOT SURE SPECIFICALLY ABOUT S O TWO. 
          WELL, I I WAS THINKING BECAUSE, SO IS THIS, UM, UH, CALCULATED OVER AN ENTIRE YEAR? UM, I DON'T KNOW. 
          I DON'T KNOW NATHAN, IF YOU KNOW THAT. 
          WELL, IT'S, IT'S OKAY. 
          I MEAN, OKAY, THE POINT HERE IS I THINK WITH ALL OF THESE, UM, YOU KNOW, WE'RE, WE'RE GETTING TO THE POINT WHERE, UH, WE NEED TO BE LOOKING AT THE OPERATIONAL CHARACTERISTICS OF EACH OF THESE FACILITIES. 
          IF WE CAN KEEP 'EM ONLINE WITHOUT, UM, UH, WITHOUT THEM RETIRING, BUT REDUCE THEIR RUNTIME SO THAT THEY CAN MAINTAIN A RELIABILITY COMPONENT TO THE SYSTEM, HOW, HOW WE MIGHT DO THAT IS SOMETHING THAT, YOU KNOW, WE PROBABLY OUGHT TO BE LOOKING AT, UH, IF WE, YEAH, SO I MEAN, I, MY UNDERSTANDING FROM ALL THE GENERATORS IS THE LIMITS HAVE, YOU KNOW, DAILY, MONTHLY, ANNUAL REQUIREMENTS DEPENDING ON WHAT'S GOING ON. 
          HEY, CHAD. 
          YES. 
          SO I THINK IT'S ALSO IMPORTANT TO THINK WHEN YOU THINK ABOUT THESE RETIREMENTS FOR ANY OF THESE RULES, UM, THEY'VE GOT MULTIPLE EFFECTS. 
          SO THERE'S A CAPACITY EFFECT, NOT HAVING THAT GENERATOR CAPACITY THERE. 
          OBVIOUSLY WE'VE TALKED ABOUT THE PROBABILITY OF OF OF LOAD SHED DURING CERTAIN HOURS AND THINK IT'S GONNA AFFECT ALL OF THOSE KINDS OF, OF THINGS, BUT IT ALSO HAS AN EFFECT ON LOCAL TRANSMISSION. 
          IF YOU PULL THOSE UNITS OUT OF THE GRID, YOU'VE GOTTA MAKE, YOU'VE GOTTA PATCH THE TRANSMISSION BEHIND IT. 
          UM, THERE'S A REGIONAL TRANSFER ISSUE. 
          SO OUR GRID OVER YEARS OF HAVING THESE PLANTS IN PLACE HAVE BEEN BUILT TO MAKE TRANSFERS ACROSS REGIONS WITH THOSE UNITS NOT THERE. 
          UH, THAT THOSE ARE EVEN LARGER TRANSMISSION PROJECTS THAT HAVE TO BE DONE TO, UH, TO BE ABLE TO SERVE THE LOAD THAT'S NOT BEING SERVED BY THESE PLANTS NOW. 
          SO THERE'S A REGIONAL TRANSFER PROBLEM AND FINALLY THERE'S A, THERE'S AN INERTIA PROBLEM. 
          UH, ALL THESE PLANTS CONTRIBUTE 
          [00:55:01]
INERTIA TO THE GRID, AND AS WE MOVE, MOVE TO A MORE INVERTER BASED, UH, RESOURCE MIX, THAT INERTIA REMAINS AN AN IMPORTANT COMPONENT TO, TO WHAT WE HAVE ON THE GRID. 
          SO THERE'S, IT'S NOT JUST THE CAPACITY, IT'S, IT'S OTHER ASPECTS AS WELL THAT HAVE TO BE, UM, MITIGATED. 
          JUST ONE, ONE QUESTION AND IS, IS THIS SIMILAR TO, SAY THE CONSENT DECREE ON THE OHIO VALLEY MANY YEARS, WELL, MAYBE 10 YEARS AGO, THAT FORCED THE INVESTMENT IN DIESEL FORESTATION UNITS, WHICH I THINK IS THE CASE FROM WHAT I SEE HERE, UM, AND IN THE END, THAT CAPACITY WAS RETIRED. 
          SO IT'S, IT'S A SIGNIFICANT IMPACT OF INVESTMENT RETURN AND LIFE OF UNITS. 
          BUT IS IS THIS, WHAT ARE WE TALKING ABOUT? ARE YOU SPECIFICALLY TALKING ABOUT REGIONAL HAYES? IS THAT WHAT YOU'RE TALKING ABOUT? OR S O TWO? YES. 
          I, I DON'T KNOW THE ANSWER TO THAT FROM THE ONE IN OHIO THAT YOU'RE REFERENCING. 
          I I THINK IT, I THINK YOU'RE RIGHT CARLOS, THAT WHEN WHAT PRECIPITATED THE DEVELOPMENT OF ALL THE FLUE GAS AND CIVILIZATION, THE FTDS, UH, AND THE BAGHOUSES AND ALL OF THOSE INVESTMENTS THAT, UH, WERE MADE INTO THOSE COAL UNITS BACK IN THE 2000 OR THE TWO THOUSANDS? YEP. 
          LATE TWO THOUSANDS. 
          I WORKED ON ONE SAM AS YEAH, I THINK, I THINK VARIOUS, I THINK WHAT WE'RE SEEING IS A SIMILAR, BUT THE PROBLEM HERE IS THAT AT THAT TIME, COAL WAS MUCH MORE ECONOMIC, UH, IN CONTRAST TO NATURAL GAS. 
          AND SO NOW YOU FLIP IT WHERE NO NATURAL GAS IS MUCH MORE ECONOMIC, YOU ADD THIS ON TOP OF THAT, I THINK THE IMPACT IS EVEN GREATER. 
          OKAY. 
          THE NEXT ONE IS MATS, WHICH IS MERCURY AND AIR TOXIC STANDARDS RULE. 
          THIS IS PROPOSING TO REVISE THEIR 2020, UH, 2012 STANDARD AND, UM, BASICALLY CONTINUE TO REDUCE THE MERCURY AND FILTERABLE PARTICULAR MATTER EMISSIONS FROM COAL AND OIL FAST GENERATING UNITS. 
          UM, SO BASICALLY YOU HAD ALL THE GENERATORS THAT MET THE STANDARD AND THE EPA CAME IN AND SAID, WELL, IT LOOKS LIKE THE TECHNOLOGY IS THERE TO EVEN DO MORE. 
          SO THEY'VE LOWERED THE, THE RESTRICTIONS EVEN MORE FOR THE RESOURCES TO NOW EVALUATE WHAT THAT IMPACT IS. 
          AND SOME RESOURCES ARE GOING ABOVE AND BEYOND ALREADY WHAT THE 2012 STANDARD WAS, BUT THE EPA LOOKING AT THAT TECHNOLOGY THAT'S AVAILABLE NOW SO THAT THEY CAN DO MORE. 
          SO THAT'S WHAT THIS RULE IS ABOUT. 
          WE HAVE BEEN COORDINATING WITH THE GENERATORS AND GOTTEN SOME FEEDBACK FROM THEM ON WHAT THOSE, UH, OPERATIONAL IMPACTS ARE. 
          AND WE DO INTEND TO FILE COMMENTS HERE. 
          UH, AT THE END OF THE WEEK. 
          WE HAVE BEEN COORDINATING WITH THE TEXAS COMMISSION ON ENVIRONMENTAL QUALITY ON THIS ONE AS WELL. 
          YOU KNOW, AT THE END OF THE DAY, ALL THESE RULES FROM THE GRID OPERATOR'S PERSPECTIVE, THE BALANCING AUTHORITIES, WE BELIEVE THAT ALL THE RULES SHOULD HAVE WHAT WE CALL A RELIABILITY SAFETY VALVE MECHANISM, WHICH ALLOWS US TO INSULATE THOSE EMISSION ISSUES WHEN WE BELIEVE THERE ARE EMERGENCY CONDITIONS. 
          AND SO THIS IS SOMETHING THAT WE'VE PROPOSED GOING ALL THE WAY BACK TO THE CLEAN AIR ACT RULES 10 YEARS AGO. 
          AND THE ORIGINAL MATS RULE IN, IN 2012 WAS THE ISOS PUSHING THIS RELIABILITY SAFETY VALVE MECHANISM. 
          AND SO WE'LL CONTINUE TO KIND OF PUSH THAT FOR THE OVERALL SET OF ENVIRONMENTAL REGULATIONS AND HAVE THOSE CONVERSATIONS WITH THOSE REGULATORS ABOUT, YOU GOTTA MAKE SURE THAT THE BALANCING AUTHORITIES HAVE THE ABILITY TO MAINTAIN THE RELIABILITY OF THE SYSTEM IRRESPECTIVE OF WHAT EMISSION CONTROLS ARE COMING IN. 
          OF COURSE, THE, THE ULTIMATE ISSUE IS GOING TO THE DEPARTMENT OF ENERGY AND GETTING A 2 0 2 C, WHICH, YOU KNOW, ERCOT HAS DONE TWICE. 
          WE DID IT FOR WINTER STORM URI AND WE DID IT DURING WINTER STORM ELLIOT. 
          YOU DON'T WANT TO HAVE TO CONTINUE TO GO BACK TO THE DEPARTMENT OF ENERGY AND SAY, WE'RE NOT ABLE TO MAINTAIN THE RELIABILITY SYSTEM IF WE CAN'T GET THESE GENERATORS TO RUN. 
          SO THAT'S THE BALANCE THAT I THINK ULTIMATELY HAS TO BE STRUCK BETWEEN THESE EPA REGULATIONS AND THE RESPONSIBILITY OF THE BALANCING AUTHORITIES TO MAINTAIN THE INTEGRITY OF THE GRID. 
          AND SO WE'LL BE HIGHLIGHTING THAT AGAIN IN OUR COMMENTS, UH, ON JUNE 23RD. 
          GOT CHAD. 
          I THAT MAKES SENSE. 
          THE CHALLENGE I THINK, THOUGH IS IF THE INVESTOR OR THE OWNER HAS ALREADY DECIDED TO SHUT THE UNIT DOWN, THEN IT, THERE'S NO, THERE'S NO 2 0 2 C THAT'S GONNA WORK BECAUSE THERE'S NOTHING TO APPLY FOR. 
          SO AGAIN, I THINK THAT THE PUBLIC NEEDS TO KNOW THAT THESE ROYALS ARE EXCEPTIONALLY DAMAGING TO THE DISPATCHABLE CAPACITY OF THIS GRID AND EVERY OTHER GRID IN THE COUNTRY. 
          YEAH, AND I THINK ULTIMATELY WE HAVE THE RELIABILITY MUST RUN A SET OF INITIATIVES THAT WE EVALUATE WHEN A GENERATOR GETS US NOTICE THAT THEY'RE GOING TO RETIRE OR DECOMMISSION. 
          AND SO THOSE, I KNOW THAT'S BEEN A TOPIC WITH THE, WITH THE COMMISSION FOR THE LAST COUPLE YEARS AS WELL, WHETHER ANY OF THAT FRAMEWORK NEEDS TO CHANGE, 
          [01:00:02]
UH, TO MANAGE AS WE GO THROUGH THIS GRID TRANSFORMATION, UM, AND, AND GET NEW RESOURCES ON THE SYSTEM, BUT STILL NEED TO LEVERAGE THE EXISTING DISPATCHABLE FLEET. 
          CHAD, ONE FINAL QUESTION FOR ME IS, UH, IN TERMS OF THE, THE DATA THAT EPA IS USING TO EVALUATE RESOURCE ADEQUACY AND RELIABILITY, UH, EFFECTS TO THE GRID, UM, FROM THE, EACH OF THE PROPOSED RULES, CDR CERTAINLY LOOKS TO BE A, A FACTOR IN THE REGIONAL HAZE RULE, BUT IN TERMS OF MATS AND GREENHOUSE GAS, IT IS CDR AND THE ACCREDITED VALUES THAT WE'RE POSTING TO THE SYSTEM, IS THAT BEING USED AS THE ULTIMATE METRIC IN, IN THEIR VIEW OF DETERMINING THE RELIABILITY EFFECTS TO THE SYSTEM? NO, THEY HAVE OTHER INFORMATION THAT THEY GET DIRECTLY. 
          OKAY. 
          BECAUSE THE ACCREDITED CAPACITY OF THESE RESOURCES IS BEING DEBATED ALL OVER THE UNITED STATES IN, IN EACH OF THE ISSOS. 
          YEAH. 
          AND FERC IS REJECTING A LOT OF THE ACCREDITED CAPACITY CHANGES, TRYING TO MAKE IT MORE GRANULAR AND MORE REFINED AND MORE TARGETED SO THAT THESE HEALTHY RESERVE MARGINS DO NOT IN FACT ENSURE RELIABILITY. 
          AND THAT'S WHAT EVERYBODY'S THE CONCLUSION EVERYBODY'S COMING TO. 
          BUT IF EPA USES THOSE HEALTHY RESERVE MARGINS AS A PRETEXT TO IMPOSE THESE RULES WITHOUT A TRUE VALUE OF, OF RELIABILITY, THAT THAT'S A PROBLEM. 
          YEAH, THEY HAVE THEIR OWN DATA SET, BUT THEY'RE ALSO USING INFORMATION THAT WE PUT OUT THERE AS WELL. 
          SO IT'S A COMBINATION O OKAY. 
          THE LAST ONE IS THE PROPOSED TAILPIPE RULE, AND NOT SO MUCH DIRECTLY RELATED TO DISPATCHABLE RESOURCES, BUT IT DOES GO TO THE ELECTRIFICATION OF THE GRID. 
          UM, AND, AND SO OBVIOUSLY THIS RULE WOULD FURTHER REDUCE GREENHOUSE GAS AND OTHER EMISSIONS FROM LIGHT, MEDIUM AND HEAVY DUTY VEHICLES WOULD APPLY TO ALL MODEL YEAR VEHICLES 20, 27 AND LATER, OBVIOUSLY WITH THE INCENTIVE TO PUT MORE ELECTRIC VEHICLES ON THE SYSTEM. 
          AND SO AS ES, UH, EPA ESTIMATES A 70 67% ADOPTION RATE FOR ELECTRIC VEHICLES BY 2032 UNDER THIS PROPOSED RULE. 
          AND SO WHAT DOES THIS IMPACT MEAN? UH, AND I'LL TURN IT OVER TO WOODY TO TALK A LITTLE BIT MORE ABOUT HOW WE LOOK AT THE ELECTRIFICATION OF THE GRID, BUT, BUT ULTIMATELY, YOU KNOW, WE JUST WENT THROUGH A LAST LEGISLATIVE SESSION AND ONE OF THE KEY BILLS THAT PASSED FROM ERCOT THAT WAS VERY HELPFUL WAS HOUSE BILL 33 90, WHICH WAS SPONSORED BY CHAIRMAN TODD HUNTER. 
          AND WE WORKED WITH THE UTILITIES TO UNDERSTAND MORE ABOUT THE GENERATION AND LOAD AT THE DISTRIBUTION LEVEL, AND IT HAS THE LOAD SIDE IN THERE. 
          AND SO WE KIND OF ANTICIPATED, IRRESPECTIVE OF THIS RULE, THE ELECTRIFICATION OF THE GRID HAPPENING AT THE DISTRIBUTION SYSTEM WITH MORE ELECTRIC VEHICLE CHARGERS. 
          SO WE DO HAVE THAT MECHANISM THAT JUST CAME OUT OF THE LAST SESSION THAT WILL ULTIMATELY NEED TO INCORPORATE INTO THE PROTOCOLS, BUT IT LAYS OUT THE FRAMEWORK ON WHAT THOSE FUTURE EXPECTATIONS ARE TO GRAB THAT INFORMATION. 
          AND SO, AND I'LL TURN IT OVER TO WOODY TO SEE IF HE WANTS TO ADD ANYTHING MORE. 
          NO, I THINK WE HAVE SYSTEMS SET UP, UH, TO, TO GATHER THIS NOW. 
          UH, WE HAVE A METHOD TO USE. 
          IT'LL TAKE SOME, SOME, SOME WORK, BUT, UH, WE'RE GONNA BE ABLE TO COLLECT SOME DATA OFF THE DISTRIBUTION SYSTEM AND PUT IT IN OUR EXISTING SYSTEMS AND USE IT IN FORECASTING, USE IT IN OPERATION, USE IT IN PLANNING. 
          SO WE'RE SET UP TO DO IT, BUT UH, THE COLLECTING AND COORDINATING WITH THE TSPS AND THE DSPS IS GONNA BE A, A BIG TASK. 
          CHAD, WOULD THIS AFFECT THE, UH, OR IT SAYS HEAVY DUTY VEHICLES, WOULD THIS AFFECT, UH, UTILITY MAINTENANCE BUCKET TRUCKS SUCH THAT, UH, THEY WOULD HAVE TO MOVE TO ELECTRIC VEHICLES AS WELL? I THINK IT'S MORE ABOUT NEW VEHICLES GOING FORWARD. 
          UH, NEW VEHICLE, YEAH. 
          NEW BUCKET TRUCKS AFTER 2027. 
          YEAH, IT WOULD HAVE TO BE ELECTRIC. 
          SO HEAVY DUTY AND MEDIUM LIGHT VEHICLES ALL GOING FORWARD. 
          YEAH, SO I THINK CLEARLY WE HAVE, UH, TENS OF THOUSANDS OF THOSE AROUND THE STATE, YOU KNOW, HOW THEY WOULD BE AFFECTED, UH, LOOKING BACK, BUT ALSO LOOKING FORWARD, UH, MIGHT HAVE AN IMPACT ON, UH, RELIABILITY TIMEFRAMES FOR GETTING SYSTEMS BACK UP IF, WHEN, WHEN THEY'RE OUTAGES, AS WELL AS JUST GENERAL MAINTENANCE ON SYSTEMS THAT WE, THAT WE TAKE FOR GRANTED EVERY DAY. 
          SO JEN, UH, CAN YOU COMMENT A LITTLE BIT ABOUT TEXAS BEING SOMEWHAT OF A LEADER IN EV ADOPTION AND, UH, THE OTHER STATES AND HOW THEY'RE DEALING WITH THIS? I DON'T KNOW. 
          WOODY, DO YOU WANNA SPEAK TO THAT? I'M NOT SURE WE CAN SPEAK TO, YOU KNOW, SPECIFICALLY AROUND TEXAS BEING A LEADER IN EV. 
          UH, EXCEPT THAT WE NEED TO OBVIOUSLY INCORPORATE IT INTO OUR LOAD FORECAST AND, AND PLAN FOR IT APPROPRIATELY. 
          BUT I'LL, I'LL SEE IF WOODY WANTS TO PROVIDE ANYTHING. 
          WELL, ONLY CALIFORNIA AND FLORIDA ARE AHEAD OF US AT THIS POINT, SO WE'RE NUMBER THREE. 
          YEAH. 
          YEAH. 
          WE'VE DONE, UH, WE'VE DONE ONE INDUSTRY SURVEY AND WE'RE WORKING ON A SECOND ONE. 
          THE FIRST SURVEY 
          [01:05:01]
SHOWED ABOUT A GIGAWATT OF LOAD EXPECTED BY 2030, WHICH IS NOT THAT MUCH. 
          SO WE'RE, WE'RE LOOKING AT ANOTHER SURVEY. 
          OBVIOUSLY SOME OF THESE RULES COULD, COULD QUICKLY ACCELERATE THAT, BUT, UM, THE, THE SECOND SURVEY WE DO WILL HELP HELP US GET A, A BETTER PICTURE FOR THAT AND, UH, THIS COLLECTION OF DISTRIBUTION DATA WILL ALSO HELP. 
          OKAY. 
          SO JUST KIND OF WRAP IT UP. 
          UM, OBVIOUSLY WE'RE, WE'RE HEAVILY MONITORING THESE RULES, ASSESSING WHETHER WE WANT TO FILE COMMENTS ON EACH ROLE, NEED TO CONTINUE TO WORK WITH THE GENERATORS TO GET THE BEST INFORMATION POSSIBLE TO ROLL INTO OUR ASSESSMENTS ON WHETHER WE'RE GONNA ACTUALLY FILE COMMENTS OR NOT. 
          AND THEN WE'LL CONTINUE TO COORDINATE WITH THE P C AND, AND IMPACTED AGENCIES AS WELL, AND, AND OBVIOUSLY CAN CONTINUE TO UPDATE THE BOARD AS THESE THINGS MOVE FORWARD. 
          AGAIN, THEY'RE ALL PROPOSED RULES RIGHT NOW, SO NONE OF THEM ARE TECHNICALLY IN EFFECT. 
          AND SO THIS IS THE OPPORTUNITY NOW TO UNDERSTAND THE POTENTIAL IMPACT AND, AND WEIGH IN ON THEM BASED ON, I'M NOT SURE. 
          I'LL FIND OUT REAL QUICK. 
          YEAH, AVAILABLE. 
          I DUNNO HOW THAT'S CALCULATED. 
          I THINK I KNOW. 
          OKAY. 
          THANK YOU CHAD. 
          UM, NEXT WE HAVE THE, UH, INDEPENDENT 
          [8. Independent Market Monitor (IMM) 2022 State of the  Market Report for the ERCOT Electricity Markets]
MARKET MONITOR, UM, 2022 STATE OF THE MARKET REPORT FOR THE ERCOT ELECTRICITY MARKETS. 
          THIS IS AGENDA ITEM EIGHT, UH, AND WILL BE PRESENTED BY, UH, UH, DIRECTOR CARRIE BIVINS FROM I M M. 
          THANK YOU. 
          GOOD MORNING. 
          CARRIE BIVINS WITH POTOMAC ECONOMICS. 
          I'M HERE TODAY TO TALK TO YOU ABOUT 2022 EVERY YEAR. 
          WE ARE REQUIRED TO PUT OUT A COMPREHENSIVE REPORT ON THE STATE OF THE MARKET AND INCLUDES A LOT OF INFORMATION ABOUT PRICING, MARKET OUTCOMES AND MARKET COMPETITIVENESS. 
          AND I JUST WANNA GIVE YOU A BRIEF OVERVIEW OF, UM, WHAT WE HAVE IN THAT REPORT. 
          UH, SO I'LL START WITH JUST REALTIME ENERGY PRICES. 
          UM, WHAT'S INTERESTING ABOUT THE PRICES FROM LAST YEAR ON AVERAGE WAS ABOUT $75. 
          UM, THAT'S A LOAD WEIGHTED AVERAGE PRICE. 
          UM, AND THEY ARE 50% LOWER THAN FROM 2021, BUT THAT'S BECAUSE 2021 WAS AN OUTLIER YEAR, UH, WITH THE STORM. 
          AND SO WE LOOK BACK TO 2020 AND SEE THAT'S ABOUT TRIPLE THE AVERAGE PRICE FROM 2020. 
          NOW, OF COURSE, NATURAL GAS PRICES HAVE RISEN QUITE SIGNIFICANTLY, OR THEY DID IN 2022. 
          OF COURSE, THEY'RE BACK DOWN NOW. 
          UM, THOSE PRICES, WHEN YOU COMPARE THAT TO HOW MUCH ENERGY WAS CONSUMED, THAT REPRESENTS A REAL-TIME ENERGY VALUE OF ABOUT 32 BILLION. 
          AND THERE WERE A NUMBER OF CONTRIBUTORS TO THE PRICE. 
          SOME, SOME WERE, UM, UH, SERVED TO INCREASE THE PRICE AND, AND SOME TO MODERATE IT. 
          SO OF COURSE, WE HAD THOSE HIGHER NATURAL GAS PRICES. 
          THAT'S THE MAIN DRIVER OF REAL-TIME ENERGY PRICES. 
          WE DID HAVE A LONG SUMMER. 
          WE ALSO HAD THE OPERATING RESERVE DEMAND CURVE SHIFT, UH, CHANGE THAT WAS IN EFFECT AS OF JANUARY 1ST, 2022. 
          AND, UH, IN ADDITION TO THAT, WE HAD FEWER PRICE SPIKES. 
          SO WHILE THE PRICE WAS HIGHER IN 2022, WE SAW FEWER PRICE SPIKES THAN WE HAVE IN PREVIOUS YEARS, AND I WOULD ATTRIBUTE THAT TO CONSERVATIVE OPERATIONS. 
          THE LOAD TRENDS, THE LOAD IS GROWING VERY QUICKLY. 
          UM, THIS IS, UH, PRETTY SIGNIFICANT GROWTH. 
          UM, UM, YOU KNOW, WE'VE SEEN LOAD GROWTH FOR MANY YEARS, BUT THIS IS A PRETTY SIGNIFICANT GROWTH. 
          UM, WHEN WE LOOK AT THE AVERAGE, IT GREW, UH, THROUGHOUT ERCOT ABOUT 9.5%, AND SO THE AVERAGE GREW HIGHER THAN THE PEAK. 
          SO ON PEAK IS 8.8% GROWTH. 
          UH, STILL A HIGH GROWTH, BUT WE'RE SEEING THAT THE AVERAGE LOAD IS GROWING HIGHER THAN THE PEAK. 
          UH, AND THAT'S ESPECIALLY TRUE IN THE SOUTH ZONE, UM, WHERE THE DIFFERENCE WAS PRETTY SIGNIFICANT. 
          WE HAD 3.9% ON PEAK, BUT 11.9% ON AVERAGE. 
          THE SUPPLY MIX CONTINUES TO CHANGE. 
          AS YOU ALL KNOW, WE HAD 9,700 MEGAWATTS OF NEW GENERATION RESOURCES COME ONLINE IN 2022. 
          THE SHARE FROM WIND, AND THIS IS THE, THE ACTUAL, UH, ENERGY THAT WAS PRODUCED THROUGHOUT THE YEAR WAS ABOUT 25%. 
          UM, WE HAD, UH, SOLAR AT 5.6% AND COAL WAS DOWN FROM 2021. 
          UH, TYPICALLY IN A YEAR IN WHICH NATURAL GAS PRICES ARE HIGH, YOU WOULD, UH, NOT SEE A GROWTH TRENDING DOWN FOR COAL. 
          BUT WHAT WAS ALSO EXPERIENCED WAS SUPPLY CHAIN ISSUES AND ISSUES WITH KEEPING THE INVENTORY 
          [01:10:01]
OF COAL, UH, SUFFICIENT TO, TO GENERATE REALTIME CONGESTION COSTS CONTINUE TO RISE. 
          THEY'RE UP 37% TO 2.8 BILLION. 
          ABOUT 700 MILLION OF THIS WAS INCURRED DURING MAY, AND IT WAS RELATED TO SOME HOUSTON CONGESTION. 
          HIGH GAS PRICES ACTUALLY DOES CONTRIBUTE TO HIGH CONGESTION COSTS AS WELL. 
          WHEN YOU NEED TO RE-DISPATCH THE SYSTEM IN ORDER TO MANAGE THE LIMITS ON YOUR TRANSMISSION LINES, THEN THE DIS RE-DISPATCH COSTS ARE HIGHER BECAUSE THOSE OFFERS FROM GENERATORS ARE HIGHER BECAUSE THEY'RE, THE INPUTS TO THOSE OFFERS ARE HIGHER, UH, NAMELY NATURAL GAS PRICES. 
          UM, WE ALSO SEE THAT GENERIC TRANSMISSION LIMITS, UM, OR GENERIC TRANSMISSION CONSTRAINTS, I SHOULD SAY. 
          THE CONTRIBUTION TO CONGESTION COSTS. 
          THERE WAS ALSO UP, IT WAS ABOUT 640 MILLION, UM, UP FROM 400 MILLION IN 2021. 
          A TYPO ON THE SLIDE, NOT 2020. 
          AND WE DO OUR OWN NET REVENUE ANALYSIS. 
          SO THIS IS DIFFERENT FROM, UM, UH, THE PEAKER NET MARGIN, WHICH IS, UH, UH, SOMETHING THAT IS BEING TRACKED. 
          THAT'S IN THE SUBSTANTIVE RULES AT THE COMMISSION THAT HAVE TO DO WITH WHAT DO WE SET THE, THE PRICE, UH, THE OFFER CAP AT, UM, WE DO ANALYSIS THAT LOOKS AT, UH, THE LOCATION OF THE RESOURCES AS WELL AS THE, AN ASSUMED CAPACITY FACTOR AND SOME OTHER FACTORS TO TRY TO GET A MORE, A MORE ACCURATE RESULT. 
          AND WHAT WE SAW WAS THAT THOSE NET REVENUES FOR A COMBINED CYCLE PLANT, UM, EXCEEDED THE ESTIMATED COST OF NEW ENTRY IN ALL ZONES. 
          UM, WE HAVE A PRETTY WIDE BAND FOR WHAT WE ESTIMATE THE COST OF NEW ENTRY AT. 
          UM, WE DID INCREASE IT THIS YEAR BASED ON THE INPUTS TO THAT AND INFLATION AND THINGS LIKE THAT BEING HIGHER. 
          UM, BUT WE STILL SAW THAT NET REVENUES EXCEEDED THAT FOR COMBINED CYCLES. 
          I'M SORRY FOR COMBUSTION TURBINES. 
          BIG THING IN OUR REPORT IS THAT WE MAKE RECOMMENDATIONS FOR IMPROVEMENTS TO THE MARKET. 
          WE HAVE FIVE NEW RECOMMENDATIONS FOR 2022. 
          IN ADDITION, WE HAVE PREVIOUS RECOMMENDATIONS FROM PRIOR YEARS. 
          WE DID NOT RETIRE ANY. 
          WE CONTINUE TO RECOMMEND THAT OR CUT, PRIORITIZE THE IMPLEMENTATION OF REALTIME CO OPTIMIZATION. 
          WE THINK THAT'S THE MOST IMPORTANT IMPROVEMENT THAT CAN BE DONE. 
          AND, UM, WE SUPPORT THE ADDITION OF HAVING THE SINGLE MODEL FOR ENERGY STORAGE RESOURCES ROLLED INTO THAT EFFORT. 
          UM, BECAUSE THERE ARE ALSO A LOT OF INEFFICIENCIES THAT ARE RECOGNIZED FROM THE COMBINATION MODEL RIGHT NOW, AND WE'D LIKE TO SEE THAT RESOLVED. 
          UM, WE PLAN TO DISCUSS THESE IN MORE DETAILS, ALTHOUGH HAPPY TO DISCUSS THEM TODAY IF YOU'D LIKE. 
          WE'LL TALK ABOUT THAT AT A SUBCOMMITTEE MEETING. 
          LIKELY W M S IN THE JULY TIMEFRAME. 
          UM, I BELIEVE I HEARD KAN SAY YESTERDAY THAT ERCO PLANS TO HAVE SOME DISCUSSION WITH R AND M NEXT TIME ON THOSE AS WELL. 
          THAT CONCLUDES MY PRESENTATION. 
          THE FULL STATE OF THE MARKET REPORT CAN BE FOUND ON OUR WEBSITE. 
          I INCLUDED A LINK HERE. 
          I'M HAPPY TO TAKE ANY QUESTIONS. 
          GARY, I I HAVE ONE QUESTION ON PAGE SIX. 
          UH, WHEN YOU TALK ABOUT RESERVES, ARE THOSE ANCILLARIES OR SOMETHING ELSE? YES, THAT'S ANCI ANCILLARY SERVICE REVENUES. 
          CARRIE, WOULD YOU HAVE EXPECTED TO SEE MORE CTS BUILT INTO THE MARKET OR IN THE PROCESS OF BEING BUILT GIVEN 2021 AND 2022? SURE. 
          I, I, I THINK WE SHOULD, WE SHOULD BE CAUTIOUS TO, UM, INTERPRET JUST A SINGLE YEAR OF NET REVENUES. 
          BUT I DID INCLUDE MULTIPLE YEARS HERE, AND YOU CAN SEE THAT, YOU KNOW, NET REVENUES HIT THE COST OF ENTRY IN 2019. 
          I THINK IN 2020. 
          INVESTORS PROBABLY ARE DISCOUNTING A LOT OF THAT DUE TO THE EFFECT OF THE WINTER STORM. 
          UM, BUT 2022 REVENUES WERE SIGNIFICANT AND I EXPECT THEM TO, UM, I EXPECT TO SEE SOMETHING SIMILAR FOR 2023, ALTHOUGH, YOU KNOW, WE DON'T KNOW WHAT THE SUMMER'S GONNA LOOK LIKE FROM A PRICING PERSPECTIVE. 
          UM, SO IT REALLY JUST DEPENDS. 
          BUT I DO THINK THAT THESE ARE STRONG SIGNALS. 
          IN FACT, IN ORDER FOR THE, FOR THE MARKET TO CLEAR THE ENERGY AND ANCILLARY SERVICES MARKET TO CLEAR OVER COST OF NEW ENTRY IN A YEAR IN WHICH WE HAD HIGH RESERVE MARGINS AND NOT VERY MANY, IF AT ALL, ANY OPERATING RESERVE SHORTAGES, UM, IS A PRETTY SIGNIFICANT SIGNAL FOR, FOR INVESTMENT TO GET BUILT. 
          GARY, REAL QUICK, UM, YOU TALK A LOT ABOUT THE CONSERVATIVE APPROACH TO THE MARKET AND THEN YOU SAY, UM, YOU'D LIKE TO DO A RIGOROUS ANALYSIS OF THE RESERVE DEMAND. 
          WHAT DOES RIGOROUS LOOK LIKE FROM YOUR CIRCLE? OKAY, YES. 
          SO, UM, THE CONSERVATIVE OPERATIONS, ONE OF THE COMPONENTS OF THAT IS THAT, 
          [01:15:01]
UH, ERCOT WANTS TO SEE THE 6,500 MEGAWATT NUMBER AND IN FACT ALSO BUILT THE PROPOSED BRIDGING SOLUTION OFF OF THAT 6,500 MEGAWATT RESERVE NUMBER. 
          UM, MY UNDERSTANDING IS THAT'S BUILT OFF OF A, A DAY OF EXPERIENCE IN JUNE OF 2021. 
          AND SO WE WOULD LIKE TO SEE MORE, UH, ANALYSIS DONE AROUND THAT NUMBER AND HAVE IT BE UPDATED BECAUSE OF THE CHANGES THAT HAVE OCCURRED IN THE LAST COUPLE YEARS AND, UH, WITH THE NEW ANCILLARY SERVICES SUITE AND THINGS LIKE THAT. 
          SO, UM, YOU KNOW, WE WOULD BE HAPPY TO WORK WITH ARCOT ON THAT, BUT, UM, REGARDLESS, I JUST THINK ESPECIALLY IF YOU'RE GOING TO BE PUTTING A LOT OF REVENUE INTO THAT NUMBER WITH REGARDS TO THE BRIDGING SOLUTION, IF THAT DOES, UM, COME TO FRUITION, THEN UM, I WOULD RECOMMEND THAT WE THINK MORE ABOUT WHETHER OR NOT THAT IS THE ACCURATE NUMBER. 
          CARRIE, ON PAGE SEVEN OF YOUR RECOMMENDATIONS FOR THE GIVEN GENERATION MIX WE HAVE TODAY, WHAT ARE THE TOP THREE RECOMMENDATIONS? YES, I WOULD SAY THE MULTI INTERVAL, REAL-TIME MARKET. 
          I KNOW THERE'S A LOT ON EVERYBODY'S PLATE WITH IMPLEMENTING THE LEGISLATIVE, UM, UH, RULES AND WITH, UM, YOU KNOW, THE NEW MARKET DESIGNS, BUT I WANT US TO THINK ABOUT, UM, IN THE LONG TERM PLAN, IMPLEMENTING THAT MULTI INTERVAL REALTIME MARKET. 
          I THINK THAT AS THE IN, AS THE RESOURCE MIX CONTINUES TO EVOLVE AND WE SEE MORE RENEWABLES AND MORE BATTERY ENERGY STORAGE, THAT MULTIPLE, THAT MULTI INTERVAL HAS BECOME, BECOME MORE AND MORE IMPORTANT. 
          AND IT'S GONNA BE ENABLE ERCOT TO BETTER MANAGE INTRA HOUR ISSUES WITH REGARDS TO RAMPING. 
          AND THAT'S A, A LOT OF THE PRICE SPIKES THAT WE DO SEE ARE DUE TO RAMPING. 
          UM, NOW SOME OF THOSE WILL BE RESOLVED WITH REALTIME CO OPTIMIZATION, BUT I THINK THAT ERCOT COULD RESOLVE SOME OF THE RAMPING ISSUES THAT WE SEE WITH RENEWABLES WITH THE MULTI HONORABLE MARKET. 
          UM, I THINK THAT WE STILL NEED TO RESOLVE THE INCENTIVES AROUND RELIABILITY UNIT COMMITMENT, UH, PARTICULARLY AS A CONSERVATIVE OPERATIONS CONTINUE, AND THE INCENTIVES REGARDING THE WAY THAT THE SETTLEMENTS OCCUR FOR THOSE ARE RECOMMENDATION NUMBER TWO HERE IS TO INSTITUTE A HUNDRED PERCENT CLAWBACK FOR COMMITMENTS. 
          AND, UM, I THINK THAT IS GONNA BE A BIG TOPIC, YOUR DISCUSSION. 
          I UNDERSTAND PROBABLY A LOT OF PEOPLE ARE NOT GONNA SUPPORT THAT, BUT I THINK IT'S REALLY IMPORTANT TO RESOLVE. 
          WE NEED TO RE-LOOK AT A LOT OF THINGS THAT WE, UM, TOOK FOR GRANTED IN THE PREVIOUS YEARS WHEN THERE WERE FEW ROCKS AND RE-LOOK AT THEM IN A SITUATION IN WHICH WE SEE MANY RUGS. 
          UM, LASTLY, I THINK IT'S IMPLEMENTING THE UNCERTAINTY PRODUCT, WHICH IS THE D R S, UH, EQUIVALENT THAT THE, THE LEGISLATORS, UM, APPROVED FOR, FOR IMPLEMENTATION IN 2024. 
          I THINK THAT'S GONNA BE REALLY SIGNIFICANT. 
          UM, AND YOU KNOW, AS ALL THESE DISCUSSIONS ABOUT E C R S WE'RE, WE'RE LOOKING VERY CLOSELY AT THAT. 
          I THINK THERE'S PROBABLY, YOU KNOW, WE ONLY HAVE 10 DAYS WORTH OF EXPER EXPERIENCE WITH THAT. 
          UH, YOU MIGHT HEAR ME COME BACK AT THE NEXT BOARD MEETING AND DISCUSS MORE ABOUT THAT BECAUSE, UH, WE MAY HAVE SOME RECOMMENDATIONS AROUND THAT AS WELL. 
          CARRIE, REAL QUICK, SORRY. 
          UM, FOR THE IMPLEMENTATION OF THE MULTI INTERVAL REALTIME MARKET AND RTC, HOW DO THOSE, CAN THEY WORK TOGETHER? DO YOU NEED BOTH? THEY SEEM TO KIND OF, THEY PULL OFF EACH OTHER. 
          YOU DO NEED BOTH. 
          YOU NEED, WE NEED REALTIME CO OPTIMIZATION FIRST. 
          UM, WHEN THE COMMISSION LOOKED AT THE MULTI INTERVAL MARKET IN THE PAST, IT WAS MANY YEARS AGO, AND THE SYSTEM LOOKS A LOT DIFFERENT NOW. 
          AND I JUST WOULD RE URGE THAT WE, IT'S SOMETHING WE DID A LOOK FOR A LONG-TERM PLAN. 
          IT DOES GO WITH RTC, UM, IN THE WAY THAT THEY'RE COMPLIMENTARY, BUT RTC IS MORE IMPORTANT TO GET GOING FIRST FOR SURE. 
          ANYTHING ELSE? THANK YOU, CARRIE. 
          THANK YOU AS ALWAYS, VERY INSIGHTFUL. 
          THANK YOU. 
          UM, AT THIS TIME I'D LIKE TO INVITE KAITLYN SMITH, VICE CHAIR OF THE TECHNICAL ADVISORY COMMITTEE TO PRESENT AGENDA 
          [9.TAC Report]
ITEM NINE, THE TAC REPORT. 
          THERE ARE THREE REVISION REQUESTS AS VOTING ITEMS UNDER THE TAC REPORT TODAY. 
          THESE INCLUDE TWO REVISION REQUESTS THAT TAC NON UNANIMOUSLY RECOMMENDED FOR APPROVAL, AND ANOTHER REVISIONAL REQUEST THAT WAS UNANIMOUS AT TAC, UH, BUT WHICH, UH, R AND M COMMITTEE CHAIR BOB FLEXON REQUESTED THAT THE R AND THAT THE R AND M COMMITTEE REVIEW PRIOR TO BOARD CONSIDERATION. 
          GOING FORWARD, WE ANTICIPATE THAT THE R M COMMITTEE WILL REVIEW ALL REVISION REQUESTS THAT 
          [01:20:01]
TAC NON UNANIMOUSLY RECOMMENDS FOR APPROVAL PLUS ANY OTHERS THAT THE R AND M COMMITTEE CHAIR ELECTS TO HAVE THE R AND M COMMITTEE REVIEW AT THE BOARD MEETING. 
          AFTER TAC PRESENTS ITS RECOMMENDATIONS, THE R AND M COMMITTEE CHAIR WILL BE GIVEN TIME TO ADDRESS THE BOARD REGARDING THE R AND M COMMITTEE'S RECOMMENDATIONS. 
          CAITLIN, PLEASE PROCEED. 
          WE'RE ACTUALLY TRACKING LOWER THAN YESTERDAY. 
          GO AHEAD, CAITLIN. 
          COURSE. 
          ALL RIGHT, THANKS. 
          UM, WE'RE STILL JUST BARELY IN WARNING, SO GOOD MORNING. 
          I'M CAITLIN SMITH WITH THE, UH, TECHNICAL ADVISORY COMMITTEE REPORT. 
          UM, SO WE HAVE THE MAY HIGHLIGHTS AS WELL AS THOSE NON UNANIMOUS REVISION REQUESTS AND ONE NPR R THAT REQUIRED MORE DISCUSSION AT R AND M. 
          THOSE ARE NPR R 1143. 
          PROVIDE ORCO FLEXIBILITY TO DETERMINE WHEN ESRS MAY CHARGE DURING AN EEA LEVEL THREE AND P R 1169 EXPANSION OF GENERATION RESOURCES QUALIFIED TO PROVIDE FIRM FUEL SUPPLY SERVICE IN PHASE TWO OF THE SERVICE. 
          AND V C M R R, UH, 0 31 CLARIFICATION RELATED TO VARIABLE COSTS AND FUEL ADDERS. 
          HERE IS THE SLIDE WITH ALL THE UNOPPOSED, UH, TAC APPROVED REVISION REQUESTS. 
          AND HERE IS THE SUMMARY SLIDE OF THIS UPDATE. 
          THE, THE FIRST NPR THAT WE DISCUSSED, UH, AT TAC AS WELL AS, UH, OUR R AND M YESTERDAY IS, UH, 1143 ON PROVIDING ERCOT FLEXIBILITY TO DETERMINE WHEN ESRS MAY CHARGE DURING EEA LEVEL THREE. 
          UH, THIS NPR ADDRESSES EXTENDED EMERGENCY EVENTS WHEN GRID CONDITIONS, UH, WOULD ALLOW FOR OR BENEFIT FROM ERCOT, ALLOWING ESRS TO CHARGE IT PERMITS ERCOT TO PROVIDE CHARGING INSTRUCTIONS TO AN E S R DURING AN EEA THREE WHEN ERCOT DETERMINES OPERATING CONDITIONS ARE SUITABLE FOR. 
          THAT DOESN'T CHANGE ANYTHING PROCEDURALLY ABOUT HOW THOSE INSTRUCTIONS ARE GIVEN. 
          UH, TAC VOTED TO RECOMMEND THIS AT OUR REGULAR MAY MEETING, ONE OPPOSING VOTE FROM THE COOPERATIVE SEGMENT, UH, SIX ABSTENTIONS FROM CONSUMER COOPERATIVE AND INDEPENDENT GENERATOR CONS GENERATOR SEGMENTS. 
          THOSE ABSTENTIONS WERE MOSTLY CONCERNING KIND OF THE PUBLIC OPTICS, UM, AND ESPECIALLY A LACK OF DETAIL ON HOW ERCOT WOULD COMMUNICATE ESRS CHARGING IN THE EVENT THIS HAPPENS. 
          THE, UH, ADDITIONAL CONCERN AND THE OPPOSING VOTE WAS REALLY ABOUT HOW THIS WOULD ULTIMATELY AFFECT THE END USE CUSTOMER IN A LOAD. 
          SHE SITUATION. 
          I, AND THEN WE HAVE NPR 1169. 
          UM, THIS IS SET TO EXPAND THE POOL OF GENERATORS THAT ARE AVAILABLE FOR THE FIRM FUEL SUPPLY SERVICE. 
          WHEN WE DO PHASE TWO, I BELIEVE PROCUREMENT STARTS SOON. 
          UM, AND REALLY WHAT THIS IS FOCUSED ON IS TRYING TO CREATE A BIGGER POOL SO THAT WE COULD HAVE MORE COMPETITION AND OFFERS AND THE LOWER COST OF SERVICE, AND ALSO INCREASE THE AMOUNT OF PRODUCT YOU CAN PROCURE. 
          AND THEN BALANCING THAT WITH MAINTAINING REQUIREMENTS TO MITIGATE RISKS AND PROVIDE A HIGH LEVEL OF RELIABILITY. 
          UM, IN PARTICULAR, THIS EXPANDS THE CURRENT POOL TO INCLUDE RESOURCES WHERE THE GENERATION ENTITY HAS FORM FIRM TRANSPORTATION AGREEMENTS ON A QUALIFYING PIPELINE. 
          SO REALLY, THE SOURCE OF DISCUSSION AT TAC AND AT R AND M YESTERDAY WAS ON THIS DEFINITION OF QUALIFYING PIPELINE. 
          UM, THE, THE TAC APPROVED, UH, VERSION WITH CALPINE DEFINITION, UM, AND IT TAKES INTO ACCOUNT THINGS LIKE THE PIPELINE NOT BEING CURTAILED DURING YURI AND OTHER INFORMATION TAC THOUGHT WAS RELEVANT. 
          WE DID CONTINUE TO DISCUSS THIS AT R AND M YESTERDAY. 
          UM, BUT TAC VOTED TO RECOMMEND APPROVAL OF THIS WITH ONE ABSTENTION AT OUR MAY MEETING. 
          WE ACTUALLY HAD AN ADDITIONAL MEETING AFTER THAT MEETING FOLLOWING SOME COMMISSION DISCUSSION, BUT WE DID NOT END UP VOTING ON ANYTHING AT THAT ADDITIONAL MEETING. 
          V C M R R 31, UM, THIS DEFINES VARIABLE COSTS AND CLARIFIES THAT ALL COSTS USED TO CALCULATE FUEL ADDS SHOULD BE BASED ON VARIABLE COSTS. 
          PREVIOUSLY, THE PROTOCOL SAID FIXED COSTS COULD NOT BE USED IN VERIFIABLE COSTS, BUT THERE'S SOME DELEGATION OF THAT TO THE VERIFIABLE COST MANUAL ON WHAT COULD BE INCLUDED IN FUEL ADDS. 
          UM, TAC ALSO VOTED TO RECOMMEND THIS VCM R R THERE WAS ONE NO VOTE FROM THE GENERATION SEGMENT. 
          THAT'S THE 
          [01:25:01]
ENTITY THAT USES VERIFIABLE COSTS AND HAS ARGUED AT THE COMMISSION IN ERCOT, UM, ALWAYS THAT ALL ACTUAL FUEL COSTS WHETHER FIXED OR VARIABLE SHOULD BE INCLUDED. 
          AND SO THIS WAS CONSISTENT WITH THEIR POSITIONS THERE. 
          UM, THEY'RE ALSO A LARGE NUMBER OF ABSTENTIONS 10, UM, FROM VARIOUS SEGMENTS. 
          AND THIS WAS KIND OF DUE TO THIS ENVIRONMENT WHERE WE'RE USING A LOT OF ROCKS JUST WANTING TO MAKE SURE WE HAVE CONTINUED DISCUSSION ON WHAT'S APPROPRIATE FOR WHAT IS IN FUEL COSTS. 
          SO NOW ONTO THE MAY TAX HIGHLIGHTS. 
          UM, AT THE MAY MEETING ON MAY 23RD, WE APPROVED THE, THIS YEAR'S GOALS FOR THE WHOLESALE MARKET SUBCOMMITTEE. 
          WE PREVIOUSLY APPROVED THE GOALS FOR THE OTHER SUBCOMMITTEES AND BROUGHT THOSE TO THE BOARD. 
          UH, WE ALSO APPROVED LEADERSHIP FOR THE CREDIT FINANCE SUBGROUP. 
          THIS IS THE NEW GROUP THAT'S REPLACING THE OLD CREDIT WORKING GROUP AS WELL AS THE MARKET CREDIT WORKING GROUP. 
          AND WE PRESENTED THAT CHARTER TO THE BOARD AT THE LAST MEETING. 
          THE LEADERSHIP IS BRENDAN SAGER FROM AUSTIN ENERGY AND LORETTO MAR MARTIN FROM NRG. 
          WE ADDITIONALLY HAD A SPECIAL ATTACK MEETING, UM, IN EARLY JUNE, AND WE DID THIS TO CONSIDER NPR 1177, WHICH IS ENHANCED EXCEPTIONAL FUEL COST PROCESS. 
          WE HAD TABLED THIS AT THE REGULAR MAY MEETING TO ALLOW FOR SOME TIME FOR COMPROMISE, UH, NAMELY BETWEEN THE SPONSOR OF THE NPR AND CONSUMERS. 
          WE DID GET TO A COMPROMISE POSITION. 
          UH, THAT COMPROMISE ALLOWS ERCOT TO DETERMINE IF, UH, COST SHOULD BE REJECTED. 
          IT CLARIFIES THAT EXCEPTIONAL FUEL COSTS ARE DISTINCT FROM FUEL ADDERS STARTING NEXT YEAR, CODIFIES THE EXCEPTIONAL FUEL COST ATTESTATION. 
          AND, UM, ONE OF THE SOURCES OF DISCUSSION WAS THE SUNSET DATE, AND WE ENDED WITH JANUARY 1ST, 2025. 
          WE ALSO DIRECTED W M S TO ADDRESS THE ISSUE OF STANDARD LANGUAGE FOR FORM FUEL SUPPLY CONTRACTS. 
          FURTHER, UH, AT THAT MEETING, AS I SAID, WE ALSO CONSIDERED NPR 1169. 
          UM, I THINK I'VE EXHAUSTED THAT AND WE DISCUSSED IT AT R AND M AS WELL. 
          UM, YOU KNOW, WE, WE HAD VOTED ON THAT CALPINE DEFINITION THAT WE THOUGHT MITIGATED SOME RISK AND BALANCED WANTING TO EXPAND THAT SERVICE TO MORE SUPPLIERS. 
          THERE WAS ROBUST COMMISSION DISCUSSION THAT THEIR OPEN MEETING ON MAY 25TH. 
          UM, YOU KNOW, AT THE SPECIAL MEETING, WE WOULDN'T HAVE BEEN ABLE TO REVERSE OR VOTE, BUT WE COULD HAVE VOTED ON FURTHER COMMENTS, BUT WE OPTED TO HAVE THAT DISCUSSION AT R AND M YESTERDAY AND AT THE COMMISSION IF THEY FEEL LIKE THEY NEED IT THERE. 
          AND THAT IS THE END OF MY PRESENTATION. 
          ALL RIGHT, DO WE HAVE ANY, ANY QUESTIONS? SO YESTERDAY, CHAIRMAN, WE REVIEWED ALL THREE OF THOSE, NPRS ABOUT TWO NPRS IN THE VCM FOR 1143. 
          WE APPROVED, UH, CONSISTENT WITH TAX OVERALL APPROVAL FOR THE VARIABLE COST, WHICH WAS THE V CM R R 0 3 1 WE APPROVED CONSISTENT WITH TAX AND FOR NPR, NPR R 1169 FOR THE EXPANSION OF GENERATION RESOURCES TO PROVIDE FIRM FUEL. 
          WE APPROVED AS RECOMMENDED BY TAC IN THE 5 23 23 TAC REPORT, AND AS AMENDED BY THE 6 12 23 ERCOT COMMENTS, WHICH DID NOT ACCEPT THE INTRASTATE UH, LANGUAGE. 
          SO WE APPROVED SOMETHING MORE NARROW THAN WHAT TAC APPROVED FOR 1169, AND THAT'S WHAT WE RECOMMEND TO THE BOARD TO APPROVE. 
          OKAY, SO I WILL, UM, I'LL TAKE THAT AS A MOTION BY YOU IN, IN THAT REGARD. 
          OKAY. 
          MOTION FOR ALL THREE WITH THE AMENDMENT. 
          DO I HEAR A SECOND, JOHN? ALL IN FAVOR? AYE. 
          AYE. 
          ANY FURTHER DISCUSSION? ANY OB ANY, ANY OBJECTION? ALL RIGHT, THAT PASSES. 
          THANK YOU. 
          NEXT, NEXT WE HAVE AGENDA ITEM 
          [10. Legislative Update]
10, WHICH IS OUR LEGISLATIVE UPDATE. 
          UH, ROBERT BLACK IS PRESENTING, AND I BELIEVE CHAD IS HERE TO, UH, ALSO PRESENT. 
          GOOD AFTERNOON, EVERYONE, 
          [01:30:02]
UH, GIVE YOU AN UPDATE. 
          WE'VE ALREADY HAD A NUMBER OF DISCUSSIONS SINCE THE SESSION ENDED. 
          UH, WE GIVE YOU A OVERALL, A HIGH LEVEL UPDATE OF, UH, WHAT HAPPENED IN LEGISLATIVE SESSION. 
          UH, THE KEY TAKEAWAYS, UH, ONCE AGAIN FOR THE SECOND SESSION IN A ROW, ELECTRICITY WAS A VOCAL POINT OF, OF THE LEGISLATURE, MULTIPLE BILLS PASSED THAT HAS SIGNIFICANT IMPACT ON ARCO OPERATIONS AND THE ELECTRIC MARKET. 
          UM, ONE OF THE, OBVIOUSLY MOST NOTABLE ONES WAS, UH, THE SUNSET BILL PASSED. 
          SO THAT MEANS THE PC, OPEC, AND ERCOT CAN CONTINUE. 
          UM, UH, SOME QUICK FUN FACTS. 
          UH, I THINK THIS WAS, THIS MAY HAVE BEEN THE MOST BILLS EVER PASSED, EVER FILED IN LEGISLATIVE SESSION. 
          ABOUT 15% MADE THEIR WAY TO THE GOVERNOR, UH, FOR THE SECOND SESSION IN A ROW. 
          THERE WERE AN UNUSUALLY HIGH NUMBER OF BILLS THAT DIRECT THAT, UH, IMPACTED US DIRECTLY PRE URI, THAT WAS AROUND A HUNDRED BILLS EVERY SESSION. 
          AND POST URI, IT'S BEEN 250 TO 300 BILLS. 
          UM, MOVING ON THE, THE, THE BIGGEST BILL, UH, THAT AFFECTS ERCOT WAS HOUSE BILL 1500. 
          IT WAS THE SUNSET BILL. 
          UM, IN HISTORICALLY SUNSET BILLS HAVE GENERALLY DEALT MAINLY WITH THE PROCESSES AND PROCEDURES OF A STATE AGENCY. 
          THAT'S UNDER SUNSET. 
          UH, TOWARD THE END OF SESSION, THERE WERE A NUMBER OF BILLS THAT WERE STILL ACTIVE AND STILL MOVING, UM, THAT DEALT WITH, UH, MAINLY MARKET DESIGN ISSUES THAT THE LEGISLATURE DECIDED, UM, THAT THEY WOULD JUST CONSOLIDATE AND PUT THOSE POLICIES INTO THE SUNSET BILL, UH, IN THE LAST WEEK OF THE SESSION. 
          UM, SO IN ADDITION TO SOME OF THE POLICIES AND PROCEDURES OF, OF HOW ERCOT OPERATES, UH, THEY ALSO PUT IN SOME RATHER LARGE, UM, LARGE POLICY BILLS AS WELL. 
          INCLUDED IN THAT WERE A, UM, UH, HIGHLY MODIFIED PERFORMANCE CREDIT MECHANISM WITH A COST CAP, UM, A FIRMING REQUIREMENT FOR FUTURE GENERATION RESOURCES. 
          AFTER 2027, UM, A NEW ANCILLARY SERVICE, UH, THAT ERCOT WILL BE REQUIRED TO IMPLEMENT CAPS ON INTERCONNECTION COSTS THAT CAN BE PASSED ON TO CONSUMERS AND THE ABOLISHMENT OF THE RENEWABLE ENERGY CREDIT PROGRAM. 
          ALL OF THOSE WERE PUT INTO THE, UH, HOUSE BILL 1500, THE SUNSET BILL. 
          UM, AND I WILL SAY ALL OF THESE, AND, UH, A LOT OF THE OTHER BILLS WE'LL BRIEFLY TOUCH ON HERE IN A SECOND. 
          UM, WE'RE STILL IN THE EVALUATION PROCESS AND STARTING TO WORK WITH THE PUC ON, ON EXACTLY THE TIMELINES AND HOW THIS IS ALL GONNA UNFOLD. 
          UM, ANOTHER, UH, BIG, BIG PIECE OF LEGISLATION THAT IS STILL SOMEWHAT UNFINISHED IS SENATE BILL 26 27, AND THE ACCOMPANYING SJR 93. 
          THIS WAS THE LOW INTEREST LOAN AND COMPLETION BONUS PROGRAM, UM, 7.2 BILLION FOR, FOR, UH, DEDICATED LOW INTEREST LOANS AND THE COMPLETION BONUS FOR NEW DISPATCHABLE GENERATION. 
          UH, BOTH OF THESE PASS THE, BUT THEY ARE CONTINGENT ON THE SJR, UH, 93, WHICH WILL COME BEFORE TEXAS TEXANS IN THE NOVEMBER 7TH ELECTION. 
          UH, THAT'S THE FUNDING MECHANISM THAT HAS TO PASS, CREATING THE TEXAS ENERGY FUND TO BE ADMINISTERED BY THE PUC. 
          THAT STILL HAS TO PASS FOR THE PROGRAM TO GO INTO EFFECT. 
          HEY, HEY, ROBERT, ON, ON THAT ONE. 
          UH, CAN, CAN YOU EXPLAIN FOR EVERYBODY, IS IT 7.2 BILLION OR IS IT 5 BILLION, WHICH WAS IN THE APPROPRIATIONS BILL? SO THEY APPROPRIATED 5 BILLION TOWARD THAT EFFORT, BUT 7.2 WAS IN THE BILL. 
          NO PROBLEM. 
          THIS IS JUST A, YEAH, I'M GONNA NEED TO GO BACK AND LOOK AT THAT HAVING AROUND THE COMMISSION. 
          NO, I THINK ABOUT IT, YOU'RE RIGHT. 
          THE 5 BILLION WAS IN THE APPROPRIATIONS BILL, BUT THE BILL SAID SOME 0.2, I NEED TO GO BACK AND DO A LITTLE RESEARCH. 
          OKAY. 
          WELL, HONESTLY, UM, TO CLARIFY THAT, THANK YOU. 
          UM, OTHER PRIORITY LEGISLATION THAT, UH, UM, THAT PASS THAT, UH, WE'RE IN THE PROCESS OF EVALUATING THE IMPACTS, UM, LARGE FLEXIBLE LOADS, UM, SENATE BILL 1929. 
          THIS WILL ALLOW US TO, UM, REGISTRATION OF, UH, BITCOIN MINERS AND UP UNINTERRUPTABLE POWER WERE 75 MEGAWATTS. 
          UM, THERE WERE A NUMBER OF TRANSMISSION PLANNING BILLS, UH, THAT WERE FILED, UH, ENDED UP THE, THE BIGGEST ONE, THE PASS WAS HB 50 66. 
          UM, THAT ADDS, UH, PROJECTED LOADS, UM, PROJECTED LOADS TO THE CRITERIA THAT CAN BE CONSIDERED IN THE TRANSMISSION PLANNING PROCESS, AND, UH, SPECIFICALLY REQUIRES A RELIABILITY PLAN FOR THE, FOR THE PERMIAN. 
          UM, THERE WAS UPDATES TO THE LONE STAR INFRASTRUCTURE PROTECTION ACT, UM, IN SENATE BILL 2013. 
          UM, WOODY TOUCHED ON, UH, HB 33 90 AND CHAD, THEY TOUCHED ON HB 33 90. 
          THAT GIVES US, UH, SOME NEW INSIGHTS INTO, UH, GENERATION LOADS 
          [01:35:01]
CONNECTED AT THE DISTRIBUTION LEVEL. 
          UM, THE AGGREGATED DISTRIBUTED ENERGY RESOURCES BILL SB UH, 1699. 
          UM, THAT'S, UH, SOME THE PILOT PROJECTS ALREADY AT THE PC, BUT THAT, UM, ACTUALLY SOME NEW REQUIREMENTS TO THAT. 
          UM, AND OF COURSE, LUBBOCK POWER AND LIGHT. 
          THEY HAD A COUPLE OF BILLS THAT, UM, UM, EASED THEIR WAY INTO THE ERCOT MARKET, WHICH PASSED. 
          UM, LIKE, LIKE I SAID, WE ARE STILL EVALUATING, UM, ALL OF THESE BILLS AND WE'LL PROBABLY HAVE, UM, MORE INSIGHTS AT THE, AT THE NEXT BOARD MEETING. 
          UM, WE ARE IN A SPECIAL SESSION RIGHT NOW. 
          UH, THE GOVERNOR HAS INDICATED THAT THERE WILL BE ADDITIONAL SPECIAL SESSIONS TO COME. 
          WE DO NOT ANTICIPATE, UM, THAT ANYTHING OF OURS WILL BE ASSOCIATED WITH THOSE SPECIAL SESSIONS, THOUGH, KNOCK ON WOOD. 
          UM, WITH THAT, I'M HAPPY TO ANSWER, OR JEN ARE HAPPY TO ANSWER ANY QUESTIONS. 
          I, I GUESS THE ONE THING I WANTED TO ADD IS THAT WE DID THIS FOR THE LAST SESSION, THE 87TH LEGISLATIVE SESSION. 
          UH, THERE MAY BE A SLIDE ON THIS, ROBERT, I'M NOT SURE IF THERE'S ANOTHER SLIDE AFTER THIS ONE OR NOT. 
          UM, MAYBE THE NEXT ONE THAT HAS AN ERCOT STATUS REPORT, AND WE, WE PUT THIS OUT ON OUR WEBSITE, UPDATED IT MONTHLY, SO THAT EVERYBODY WOULD KNOW THE PROGRESS OF HOW WE'RE IMPLEMENTING THE BILLS THAT IMPACT ERCOT. 
          W WE EXPECT TO DO THE SAME THING FOR THIS SESSION. 
          WE ACTUALLY JUST STOPPED DOING THE 87TH LEGISLATIVE SESSION THIS, THIS PAST MONTH, AND ANYTHING THAT'S REMAINING WILL JUST BE ROLLED OVER INTO THIS NEW REPORT THAT WE EXPECT TO KICKSTART IN SEPTEMBER. 
          SO, YOU KNOW, ALL THE BILLS THAT ROBERT HAS, UH, INDICATED, INCLUDING HOUSE BILL 1500, WHICH DOES HAVE A LOT OF IMPACT TO ERCOT, UH, ALL THAT'LL BE KIND OF MAPPED INTO THIS NEW STATUS REPORT STARTING IN SEPTEMBER, SO THAT THE GENERAL PUBLIC STAKEHOLDERS CAN SEE KIND OF WHERE WE ARE AS WE MOVE FORWARD TO IMPLEMENT THAT THE, THOSE REQUIREMENTS ON ON HOUSE BILL 1500 FROM A CORPORATE GOVERNANCE PERSPECTIVE, OF COURSE, THERE WERE SOME NEW ITEMS THAT WERE REFERENCED THERE. 
          A, A NEW P C COMMISSIONER WILL JOIN THIS BOARD AS A NON-VOTING EX-OFFICIO MEMBER, UM, AFTER SEPTEMBER 1ST. 
          SO WE WOULD EXPECT BY THE OCTOBER BOARD MEETING TO HAVE THAT NEW P C COMMISSIONER AS A STANDING BOARD MEMBER. 
          AND THEN THERE WERE SOME, UM, MATTERS DEALING WITH EXECUTIVE SESSION, INCLUDING BOARD PROCESSES THAT WILL OBVIOUSLY START TO WORK ON, UM, MORE IMMEDIATELY STARTING SEPTEMBER 1ST, SO THAT THOSE ARE INTEGRATED INTO THE OCTOBER BOARD MEETINGS. 
          ANYTHING ELSE? OKAY. 
          THANK YOU. 
          THANK YOU, ROBERT. 
          ALL RIGHT. 
          UH, NEXT WE HAVE COMMITTEE REPORTS. 
          FIRST, UM, BILL FLORES WILL, WILL PRESENT AGENDA ITEM 11, FINANCE AND AUDIT COMMITTEE REPORT, 
          [11. Finance and Audit (F&A) Committee Report]
WHICH HAS ONE ASSOCIATED VOTING ITEM, THE 20 24 20 25 
          [11.1 2024-2025 Budget and Fee]
BUDGET AND FEE BILL. 
          UH, THANK YOU, MR. CHAIRMAN. 
          THIS REPORT WILL BE A LITTLE LONGER THAN, UH, OUR PRIOR MEETING REPORTS BECAUSE THE, UH, THE SIGNIFICANT AMOUNT OF WORK WE SPENT YESTERDAY WORKING ON THE STRATEGIC PLAN AND ALSO SYSTEM ADMIN FEE. 
          THERE WERE THREE PRIMARY AREAS THAT WE DISCUSSED YESTERDAY. 
          THE FIRST WAS, UH, WE RECEIVED REPORTS ON THE FINANCIAL STATEMENTS, DEBT, COMPLIANCE, AND INVESTMENT REPORTS. 
          UH, SECONDLY, WE HAD OUR NORMAL INTERNAL AUDIT REPORTS AND UPDATES. 
          AND THEN THIRD, WE REVIEWED, UH, APPROVED THE 2024 TO 2025 STRATEGIC PLAN AND THE SYSTEM ADMINISTRATION FEE REQUIREMENTS. 
          UM, IN PARTICULAR, WITH RESPECT TO THE STRATEGIC PLAN, UM, THERE WERE, I WANNA SAY A FEW THINGS BEFORE WE GET INTO THE PLAN ITSELF. 
          UH, THE BOARD MANAGEMENT HAD WORKED REALLY HARD TOGETHER FOR SEVERAL MONTHS. 
          UH, AND DURING THIS TIME, WE'VE ENGAGED IN SUBSTANTIVE, UH, DIALOGUE WITH ERCOT STAKEHOLDERS TO OBTAIN THEIR FEEDBACK. 
          IN TERMS OF WHAT THE, UH, STRATEGIC PLAN LOOKED LIKE MOVING FORWARD DURING THE PROCESS WERE SEVERAL THEMES THAT EMERGED. 
          THE FIRST IS THAT THE TEXAS GRID IS FAR MORE COMPLEX, DYNAMIC, AND DIVERSE THAN EVER BEFORE, AND THE AMOUNT OF CHANGE IS ACCELERATING, AND THE GRID LOOKS FAR DIFFERENT THAN IT DID JUST EVEN THREE YEARS AGO. 
          UH, SECOND IS THAT FEDERAL AND STATE STATUTORY REGULATORY ACTIVITIES. 
          IN PARTICULAR, THOSE SINCE WISTROM URI CONTINUED REQUIRE SUBSTANTIAL RESOURCES TO BE DEVOTED TO, UH, GRID RELIABILITY AND RESILIENCE. 
          UH, THE THIRD THING IS THE NUMBER AND TYPES OF INDUSTRY PARTICIPANTS CONTINUE TO GROW, UH, FOR SEVERAL PROJECTS WERE DEFERRED DURING PRIOR 
          [01:40:01]
PERIODS NEED TO BE RESTORED TO PROVIDE GRID RELIABILITY AND EFFICIENCY AND THE MEET REGULATORY REQUIREMENTS. 
          FIFTH, UH, HISTORICAL UNDERINVESTMENT IN ERCOT, UH, PEOPLE HAD TO BE REVERSED IN ORDER TO HAVE THE HUMAN CAPITAL NECESSARY TO, UH, UH, MEET TEXAS DYNAMIC GRID AND TO COMPETE IN A TYPE JOG MARKET. 
          AND FINALLY, ERCOT, UM, HAS FACES, UH, INCREASED INSURANCE COST AND LITIGATION COST. 
          NOW, IN LIGHT OF THESE FACTORS, UH, THE COMMITTEE MEMBERS VOTED TO RECOMMEND, UH, BOARD APPROVAL OF THE STAFF'S PROPOSED 2024 2025 BIANNUAL BUDGET. 
          UH, THIS INCLUDES AN APPROPRIATION OF APPROPRIATE FUNDS AND STAFF TO, UH, ADDRESS ERCOT STRATEGIC OBJECTIVES COMPLIANCE WITH THE FINANCIAL CORPORATE STANDARD, AND ASSOCIATED FINANCIAL PERFORMANCE MEASURES APPROVED BY THE BOARD FUNDING FOR THE INDEPENDENT MARKET MONITOR, PUBLIC UTILITY REGULATORY ACT, AND NORTH AMERICAN RELIABILITY CORPORATION COMPLIANCE FUNCTIONS. 
          THE TOTAL AUTHORIZED SPEND IS 424 MILLION FOR 2024 AND 4 26 0.2 MILLION FOR 2025, AND AN INCREASE IN THE SYSTEM ADMINISTRATION FEE FROM A RATE OF 0.55 TO 0.710 PER MEGAWATT HOUR, EFFECTIVE JANUARY 1ST, 2024. 
          I THINK IT'S IMPORTANT TO NOTE THAT THIS, UM, THIS IS THE FIRST INCREASE SINCE 2016, THE SYSTEM ADMIN FREE ADMIN FEE, AND IT REPRESENTS A, ON A COMPOUND ANNUAL GROWTH RATE OF 3.1% SINCE THAT LAND INCREASE. 
          SO IN LIGHT OF ALL OF THESE THINGS, ON BEHALF OF THE FINANCE AND AUDIT COMMITTEE, I MOVE THAT THE BOARD APPROVE ERCOT 2025 BIANNUAL BUDGET IS PRESENTED YESTERDAY'S FINANCE AND AUDIT COMMITTEE MEETING, AND THAT WE AUTHORIZE ERCOT LEGAL TO FILE THE BUDGET FOR APPROVAL WITH THE P U C T. 
          ALL RIGHT. 
          SECOND, THANK WAS THAT SECOND. 
          OKAY. 
          UH, ANY DISCUSSION BEFORE WE VOTE? ALL RIGHT. 
          ALL IN FAVOR? AYE. 
          ANY OPPOSED? AND I HAVE ONE MORE THING. 
          OKAY. 
          SO THAT BUDGET PASSES. 
          UH, BILL, THANK YOU, MR. CHAIRMAN. 
          AND LASTLY, AT OUR NEXT MEETING IN AUSTIN, EXCUSE ME, IN AUGUST, WE PLAN TO COVER THE 2022 401K AUDIT REPORT, AND WE'LL VISIT WITH OUR FINANCIAL STATEMENT AUDITORS ABOUT THE 2023 AUDIT. 
          UH, WE'LL DISCUSS OUR INSURANCE RENEWAL AND CONTINUE TO HAVE AN INTERNAL AUDIT UPDATE. 
          THAT'S, IT CONCLUDES MY REPORT. 
          THANK YOU. 
          ALL RIGHT. 
          THANK YOU. 
          UH, NEXT PEGGY HIGG WILL, UH, PRESENT AGENDA ITEM 12 R 
          [12. Human Resources and Governance (HR&G)  Committee Report]
AND G COMMITTEE REPORT, WHICH HAS TWO ASSOCIATED VOTING ITEMS. PEGGY? YES. 
          THANK YOU, CHAIRMAN. 
          UH, SO THE FIRST VOTING 
          [12.1 2024-2028 Strategic Plan]
ITEM THAT THE COMMITTEE ADDRESSED WAS, UH, THE 20 24, 20 28 STRATEGIC PLAN. 
          AND YOU MAY RECALL WE, THE BOARD PROVIDED INPUT ON THAT PLAN AT THE LAST BOARD MEETING AND, AND STAFF WORKED WITH THE MARKET PARTICIPANTS AND CAME BACK WITH A RECOMMENDED FINAL, UH, STRATEGIC PLAN, UH, TO REFLECT THE INPUT, UH, THE BOARD AT THE LAST MEETING AND THE MARKET PARTICIPANTS. 
          UH, THE HUMAN RESOURCE IS IN GOVERNANCE COMMITTEE, AND I SO MOVE RECOMMENDS THAT, UH, WE APPROVE THE 24 20 28 STRATEGIC PLAN AS PROPOSED WITH ONE MI MINOR MODIFICATION WAS DISCUSSED DURING, UH, THE HR AND G COMMITTEE. 
          SO WE'VE GOT A PROPOSED, UH, THE PROPOSED LANGUAGE THAT WE THINK WOULD, UM, OKAY. 
          ADDRESS THOSE CONCERNS THAT WERE BROUGHT UP DURING THE HR AND G COMMITTEE. 
          WE CAN, UH, CHRISTIE CAN GO AHEAD AND REVIEW THOSE IF YOU'RE OKAY, IF THAT WORKS. 
          ALL RIGHT. 
          SO WE DECIDED TO JUST MAKE A SIMPLE UPDATE, UM, TO ADD SOME LANGUAGE AT THE END OF OBJECTIVE TWO. 
          AND SO THE NEW OBJECTIVE TWO WOULD NOW READ, ENHANCE THE ERCOT REGIONS, THE ECONOMIC COMPETITIVENESS WITH RESPECT TO TRENDS AND WHOLESALE POWER RATES AND RETAIL ELECTRIC PRICES TO CONSUMERS. 
          OKAY, SO I, I ADMIT ON BEHALF OF THE HR AND G COMMITTEE, I RECOMMEND THAT THE BOARD APPROVE THE 20 24, 20 28 STRATEGIC PLAN. 
          SO ARE, ARE WE ACTUALLY APPROVING THE STRATEGIC PLAN OR WE'RE APPROVING THE OBJECTIVES AND HIGH LEVEL PRIORITIES AT THIS POINT? THE OBJECTIVES. 
          THE OBJECTIVES, WHICH INCLUDES THE MODIFICATION THAT INCLUDES TWO CONSUMERS TO NUMBER TWO. 
          OKAY. 
          I'LL SECOND IT. 
          MOTION SECOND. 
          JOHN, SECONDED. 
          SECOND. 
          OKAY, JOHN, THANK YOU. 
          AND, UH, ALL IN FAVOR? AYE. 
          AYE. 
          ANY OPPOSED? THAT PASSES. 
          THANK YOU. 
          OKAY. 
          ANYTHING FURTHER? 
          [01:45:01]
YES. 
          SO THE SECOND ITEM THAT 
          [12.2 Board Compensation]
THE HUMAN RESOURCES AND GOVERNANCE COMMITTEE VOTED ON WAS, UH, BOARD COMPENSATION. 
          AND AS, AS YOU KNOW, THE BOARD, UH, RETAINED MERIDIAN COMPENSATION PARTNERS DEVI TO ADVISE THE COMMITTEE AND THE BOARD ON APPROPRIATE BOARD COMPENSATION. 
          AND, UH, THIS, THEY HAVE BEEN WORKING ON THAT FOR SEVERAL MONTHS. 
          JUST A REMINDER, THE DIRECTOR COMPENSATION WAS LAST CHANGED IN 2011. 
          SO BASED ON MERIDIAN'S ANALYSIS AND DISCUSSION WITH THE COMMITTEE, THE COMMITTEE VOTED YES, UH, TODAY TO RECOMMEND THAT THE, UH, THAT REVISED DIRECTOR COMPENSATION LEVELS IS REFLECTED IN ATTACHMENT A TO THE BOARD DECISION TEMPLATE. 
          SO I, I WOULD MOVE THAT WE APPROVE THE REVISED BOARD COMPENSATION LEVELS. 
          OKAY, BACKED JULY 1ST, 2023, SUBJECT TO THE PC'S APPROVAL. 
          ALL RIGHT, SO THAT'S A MOTION BY PEGGY. 
          SECOND BY BOB. 
          ANY FURTHER DISCUSSION? ALL IN FAVOR? AYE. 
          ALL RIGHT. 
          ANY OPPOSED? THAT MOTION PASSES. 
          AND, UH, JUST, JUST TO REPORT ON NON-VOTING ITEMS, UH, THE COMMITTEE ENGAGED IN DISCUSSION OF THE, UH, CONFLICTS OF INTEREST PRO POLICIES AND PROCESSES THAT STAFF, UH, UH, IMPLEMENTS TO GET DISCLOSURES FROM EMPLOYEES AND THE PROCESSES FOR BOARD MEMBERS AND OFFICERS. 
          WE REVIEWED THAT AND FINALLY, WE, UH, REVIEWED THE HUMAN RESOURCES OPERATIONS REPORT. 
          AND THAT CONCLUDES MY REPORT. 
          THANK YOU. 
          UH, NEXT, UM, BOB FLEXON WILL PRESENT AGENDA ITEM 13 R 
          [13. Reliability and Markets (R&M) Committee Report]
AND M COMMITTEE REPORT, WHICH HAS ONE ASSOCIATED VOTING ITEM. 
          BOB, THANK YOU. 
          THE VOTING ITEM DEALS WITH A MARKET PRICE CORRECTION FOR CERTAIN DAYS IN FEBRUARY AND MARCH OF 2023 THAT HAD THE INCLUSION OF ESR CONTROLLABLE LOAD RESOURCES AND LOAD ZONE PRICING. 
          AND ONCE WE WENT THROUGH THE DISCUSSION, WE MADE A, A APPROVED RESOLUTION TO RECOMMEND THAT THE BOARD WON DETERMINE THAT THE DAY AHEAD, SETTLEMENT POINT PRICES AND DAY AHEAD MARKET CHANGE 
          [13.1 Day-Ahead Market Price Correction for Certain Days  in February-March 2023 – Inclusion of ESR CLRs in  Load Zone Pricing]
CLEARING PRICES FOR CAPACITY FOR CERTAIN OPERATING DAYS IN FEBRUARY AND MARCH, 2023 WERE SIGNIFICANTLY AFFECTED BY INCORRECT DATA BEING USED IN THE CALCULATION OF DAY AHEAD, MARKET LOAD DISTRIBUTION FACTORS AND SHOULD BE CORRECTED. 
          AND TWO DIRECT ERCOT STAFF TO CORRECT THE IMPACT OF PRICES FOR THE OPERATING DAYS AT ISSUE. 
          SO THAT'S THE MOTION. 
          SECOND. 
          OH, ALL IN FAVOR. 
          SECOND, UH, BY JOHN. 
          ALL IN FAVOR? AYE. 
          A. 
          ANY OPPOSED? JUST TWO OTHER ITEMS. UH, OF NOTE, WE TALKED ABOUT THE REAL TIME CO-OP OPTIMIZATION PROJECT, WHICH HAS BEEN ON THE LIST OF THINGS THAT GET DONE FOR, FOR YEARS. 
          IT OFFERS SIGNIFICANT BENEFITS TO CONSUMERS AND IT'S A FAIRLY INTENSE, COMPLICATED PROJECT, BUT, UH, THE ERCOT STAFF IS RECOMMENDING TO GO FORWARD. 
          SO WE DISCUSSED THAT. 
          AND THE OTHER ITEM WORTH NOTING WAS WE WENT THROUGH THE FIRM FUEL SUPPLY SETTLEMENT UPDATE FOR THE CURRENT, WHICH IS THE RECENTLY COMPLETED YEAR. 
          AND, UH, CANON REVIEW THAT WITH US. 
          AND THERE WAS A SIGNIFICANT CLAWBACK FROM MARKET PARTICIPANTS THAT DID NOT MEET THE REQUIREMENTS. 
          THAT IS THE REPORT. 
          OKAY. 
          THANK YOU. 
          UH, THE LAST ITEM BEFORE WE MOVE INTO EXECUTIVE SESSION IS AGENDA ITEM 14, OTHER BUSINESS. 
          WOULD ANY BOARD MEMBER LIKE TO RAISE ANY OTHER BUSINESS? ALL RIGHT. 
          HEARING NONE, UH, AT THIS TIME, THE BOARD 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 THE EXECUTIVE SESSION. 
          GENERAL SESSION IS NOW ADJOURNED AND THE WEBCAST WILL BE CONCLUDED. 
          WE'LL TAKE A LUNCH BREAK BEFORE EXECUTIVE SESSION AND PLAN TO START BACK UP AT ONE 30. 
          CHAIR JACKSON ONE 30. 
          YOU SURE TAKE A LITTLE, UH, NOT.
* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.