Aug 30, 2023 Human Resources and Governance Committee Meeting

[1. Call General Session to Order]

[00:00:05]

GOOD MORNING, MEMBERS OF THE HUMAN RESOURCES AND GOVERNANCE COMMITTEE AND GUESTS.

THIS IS PEGGY HAGG, COMMITTEE CHAIR.

WELCOME TO THE AUGUST 30TH, 2023 COMMITTEE MEETING.

I HEREBY CALL THIS MEETING TO ORDER.

THIS MEETING IS BEING, UH, WEB WEBCAST LIVE TO THE PUBLIC ON OUR COTS WEBSITE.

BEFORE WE BEGIN, I'D LIKE TO ASK INTERIM P U C CHAIR KATHLEEN JACKSON IF SHE'D LIKE TO CALL AN OPEN MEETING OF THE PUBLIC UTILITY COMMISSION OF TEXAS TO ORDER THIS MEETING, THIS MEETING OF THE PUBLIC UTILITY COMMISSION.

OH, OKAY.

UM, THIS MEETING OF THE PUBLIC UTILITY COMMISSION IN TEXAS WILL COME TO ORDER TO CONSIDER MATTERS THAT HAVE BEEN DULY POSTED WITH THE SECRETARY OF STATE FOR AUGUST 30TH, 2023.

I'M KATHLEEN JACKSON AND I'M JOINED TODAY BY COMMISSIONER WILL MCADAMS. I WANNA HIGHLIGHT TO THE COMMITTEE MEMBERS THAT THE ANTITRUST ADMONITION AND SECURITY MAP ARE INCLUDED WITH POST MEETING MATERIALS.

UH, BEFORE GETTING STARTED, I WANNA WELCOME ERCOT BOARD MEMBER LINDA CAPANO TO THE HER FIRST ERCOT BOARD MEETING.

WE'RE VERY EXCITED TO HAVE YOU ON THE BOARD AND ALTHOUGH THE HUMAN RESOURCES AND GOVERNANCE COMMITTEE AND THE BOARD WILL TAKE UP COMMITTEE ASSIGNMENTS TODAY AND TOMORROW, WE WELCOME YOUR INPUT AS WE WOULD DO WITH ALL BOARD MEMBERS AND, AND ANY OF THE COMMITTEE DISCUSSIONS.

SO WELCOME.

THANK YOU AND, AND HELLO EVERYBODY AND I HOPE TO MEET YOU DURING BREAKS.

BYE.

[2. Notice of Public Comment, if Any]

NOTICE OF PUBLIC COMMENT, IF ANY.

TODAY'S MEETING AGENDA WAS POSTED PUBLIC ON AUGUST 23RD AND PROVIDED INSTRUCTIONS FOR THE PUBLIC FOR COMMENTING IN PERSON DATE.

NO ONE HAS EXPRESSED INTEREST IN COMMENTING.

IS THAT CORRECT, CHAD? THAT IS CORRECT.

THANK YOU.

NEXT

[3. June 20, 2023 General Session Meeting Minutes]

GENERAL SESSION MEETING MINUTES.

THERE'S A DRAFT IN THE MEETING MATERIALS.

DOES ANYONE HAVE ANY COMMENTS OR WISH TO MAKE A MOTION TO APPROVE THE MINUTES? JOHN MOVED.

AND COURTNEY.

SECOND.

THANK YOU.

ALL IN FAVOR? AYE.

AND THE OPPOSED ABSTENTIONS.

THE MOTIONS UNANIMOUSLY PASSED.

[4. Recommendation regarding Date Change for 2023 Annual Meeting of Members]

RECOMMENDATION REGARDING DATE CHANGE FOR THE 2023 ANNUAL MEETING OF MEMBERS IN JUNE OF LAST YEAR.

THE BOARD SET THE DATE FOR THE 2023 ANNUAL MEETING FOR DECEMBER 19TH.

BASED ON OPTIONS FOR THE DESIRED FORMAT FOR THE MEETING, WE ARE PROPOSING TO MOVE THE DATE FOR THE 2023 ANNUAL MEETING OF THE MEMBERS TO DECEMBER 18TH, 2023, ONE DAY EARLIER.

THE EXPECTATION IS THAT THE ANNUAL MEETING WILL BE HELD THE AFTERNOON, DECEMBER 18TH.

FOLLOWING COMMITTEE MEETINGS, UNLESS THERE ARE QUESTIONS OR COMMENTS, IS THERE A MOTION TO RECOMMEND THAT THE BOARD APPROVE THE CHANGE OF THE DATE OF THE 2023 ANNUAL MEETING? COURTNEY? SECOND.

JOHN SECOND.

ALL IN FAVOR? AYE.

AYE.

MOTIONS UNANIMOUSLY PASSED.

NEXT

[5. Recommendation regarding Ratification of Officers]

RECOMMENDATION REGARDING RATIFICATION OF OFFICERS.

UH, ERCOT BYLAWS REQUIRE RATIFICATION OF ERCOT OFFICERS.

PABLO HAS RECOMMENDED, UM, ROLE CHANGES FOR TWO EXISTING OFFICERS EFFECTIVE SEPTEMBER ONE.

THE FIRST IS WOODY RICKSON, WHO, UH, WILL TAKE ON THE TITLE OF SENIOR VICE PRESIDENT AND CHIEF OPERATING OFFICER.

AND THE SECOND IS CHRISTIE HOBBES, WHO WILL HAVE THE TITLE OF VICE PRESIDENT A SYSTEM PLANNING AND WEATHERIZATION.

UNLESS THERE ARE ANY COMMENTS OR QUESTIONS.

IS THERE A MOTION, UH, ON THE RECOMMENDATION TO THE BOARD ON THE RATIFICATION OF THE OFFICERS? COURTNEY? SECOND.

SECOND.

ALL IN FAVOR? AYE.

AYE.

MOTIONS UNANIMOUSLY PASSED.

[6. Recommendation regarding Board Committee Assignments]

AND WITH THE RECENT SELECTION OF LINDA CAPANO ONTO TO FILL THE VACANT SEAT ON THE BOARD, UH, IT'S A GOOD TIME TO RECONSIDER THE SKILLS AND PREFERENCES OF THE BOARDS TO FILL THE COMMITTEES.

UH, BOARD LEADERSHIP AND I HAVE DISCUSSED DIFFERENT OPTIONS.

OPTIONS BEFORE AGREEING ON THE RECOMMENDED ASSIGNMENTS AS SET FORTH IN THE MEETING MATERIALS INCLUDING COMMITTEE CHAIR POSITIONS.

WE BELIEVE THAT THE PROPOSED COMMITTEE ASSIGNMENTS AND THE MATERIALS ALIGN WITH THE BOARD'S OBJECTIVE THAT EACH OF ITS COMMITTEES HAVE A MEMBERSHIP

[00:05:01]

UNLESS THERE'S, UH, ANY COMMENTS OR IF SOME THAT YOU'D LIKE TO HAVE A DISCUSSION, I'LL ENTERTAIN A MOTION TO RECOMMEND TO THE BOARD THE COMMITTEE ASSIGNMENTS, INCLUDING CHAIRS SET FORTH IN THE MEETING MATERIALS TO BE EFFECTIVE.

SEPTEMBER 1ST, 2023.

IS THERE ANY DISCUSSION? I'LL MOVE IT.

THANK YOU, JOHN.

MAKES MOVES.

THANK YOU COURTNEY.

ALL IN FAVOR? AYE.

MOTION'S UNANIMOUSLY PASSED.

[7. Strategic Goal Update]

CHRISTIE HOBBS WILL PRESENT STRATEGIC GOAL UPDATE.

CHRISTIE.

ALL RIGHT, GOOD MORNING COMMITTEE MEMBERS.

AS YOU MAY RECALL, UH, EACH YEAR WE SET UP A SET OF OBJECTIVES AND KEY RESULTS THAT ARE REALLY MEANT TO HELP DRIVE THE PRIORITIES OF THE ORGANIZATION WHERE, UH, WE WANT TO BE ABLE TO FOCUS OUR RESOURCES TO CONTINUE TO ADVANCE OUR OPERATIONS THROUGHOUT THE YEAR.

SO TODAY I WANNA GIVE YOU AN UPDATE ON WHERE WE ARE ON THE 2023 OKRS.

UM, I'M HAPPY TO REPORT WITH THE EXCEPTION OF ONE, ALL OF OUR KEY RESULTS ARE EITHER ON TRACK OR HAVE COMPLETED.

ALSO BASED OFF OF THE MARKET DESIGN WORK THAT IS ONGOING AT THE COMMISSION, WE'VE ADDED SOME ADDITIONAL KEY RESULTS FOR THE REMAINDER OF THE YEAR TO REFLECT THAT WORK AS WE'VE BEEN DISCUSSING, UH, WITH THE COMMISSION.

SO I'LL JUMP RIGHT INTO OBJECTIVE NUMBER ONE, WHICH IS IMPROVE GRID RELIABILITY.

WE ARE ON TRACK FOR OUR ENERGY MANAGEMENT SYSTEM UPGRADE, WHICH IS A VERY IMPORTANT, UH, SYSTEM UPGRADE FOR THE HEARTBEAT OF OUR SYSTEMS. WE ARE ON TRACK TO DO THE CLOSED LOOP, START THE CLOSED LOOP TESTING WITH MARKET PARTICIPANTS IN THE SEPTEMBER TIMEFRAME AND ON POINT FOR GO LIVE IN NOVEMBER.

THIS IS ALSO A VERY IMPORTANT MILESTONE BECAUSE OF ALL THE OTHER CHANGES THAT WILL COME AFTER THAT.

SO WE'RE VERY PLEASED TO REPORT THAT ONE IS ON TRACK.

WE COMPLETED OUR PREPARATION WORK FOR THE STATE OF CHARGE, UH, CHANGES WE HAVE IN FRONT OF YOU SOME NPRS THAT YOU'LL BE DISCUSSING LATER THIS AFTERNOON AND TOMORROW, UM, THAT ARE FOLLOW ON WORK FROM THAT.

BUT WE MET OUR GOAL OF COMPLETING THE PLANNING FOR OUR SHORT TERM OPTIONS.

THE WORK IS ONGOING AND ON TRACK FOR MAKING ROLE CHANGES FOR THE LARGE AND FLEXIBLE LOADS AND HOW WE INTEGRATE THOSE INTO THE ARCOTT SYSTEM, IMPROVING THE RULES FOR THE TRANSPARENCY AND HOW WE OPERATE WITH THEM.

A SET OF REVISION REQUESTS ARE CURRENTLY BEING TALKED ABOUT WITH STAKEHOLDERS IN THE STAKEHOLDER PROCESS.

THE ONE KEY RESULT THAT IS NOT TRENDING IS FOR INVERTER BASED RESOURCES.

WE DO HAVE A NODAL OPERATING GUIDE THAT IS OUT IN THE STAKEHOLDER PROCESS, BUT BECAUSE OF SOME OF THE, UH, DISCUSSIONS THAT WE'VE HAD ONGOING, WE HAVE NOT BEEN ABLE TO KICK OFF THE SECOND PART OF THE WORK, WHICH IS GIDDING THE MODELING AND TESTING INTO OUR SYSTEMS. UM, SO WE MARKED THAT ONE AS NOT TRENDING FOR ENDING OUR MILESTONES BY THE END OF THE YEAR.

WE DID ADD A NEW KEY RESULT.

YOU'LL SEE HERE AT THE BOTTOM IMPLEMENT KEY MILESTONES FOR THE RELIABILITY STANDARD.

IF YOU HAPPEN TO TUNE INTO THE P U C OPEN MEETING LAST WEEK, YOU MAY HAVE HEARD PABLO GO OVER UM, SOME OF THE WORK PLANS AND MILESTONES THAT WE HAVE LAID OUT FOR CONTINUING TO WORK ON THE RELIABILITY STANDARDS.

SO WE'VE MATCHED OUR INTERNAL MILESTONES, UH, WITH THOSE TO MAKE SURE WE STAY ON TRACK FOR KEEPING THAT WORK MOVING FORWARD.

THE SECOND OBJECTIVE, COMPLETE MARKET FACING INITIATIVES, ADVANCING RELIABLE OPERATIONS, MARKET SYSTEMS AND DATA TRANSPARENCY.

UH, WE ARE ON TRACK FOR THE PROCUREMENT OF PHASE TWO OF THE FIRM FUEL SUPPLY TO PREPARE US FOR WINTER, UH, HAVING THAT ADDITIONAL FUEL SOURCE, UM, AVAILABLE TO US.

UH, THE R F P WAS OUT, UH, TIMELY.

WE EXPECT TO BE ABLE TO CLOSE ON THAT AND HAVE THE PROCUREMENT COMPLETE, UH, BEFORE NOVEMBER.

WE'RE ALSO, UM, COMPLETE ON THE NEXT THREE.

UH, YOU RECALL BACK IN JUNE WE WENT LIVE WITH THE ERCOT CONTINGENCY RESERVE SERVICE AND YOU'LL GET SOME UPDATES LATER ON, UM, IN THE RELIABILITY AND MARKETS COMMITTEE ON HOW THAT HAS BEEN OPERATING AND PROVIDING A USEFUL TOOL FOR OUR OPERATORS, ESPECIALLY, UM, IN THOSE TIGHT CONDITIONS WHEN WE MOVE OVER THE SOLAR RAMPING PERIODS PROCEEDING WITH REAL-TIME CO-OP OPTIMIZATION.

WE KICKED OFF THAT PROJECT AND RE INITIATED THAT EFFORT EARLIER THIS SUMMER.

I MEAN, YOU'LL SEE ON THE NEXT SLIDE WE'VE ADDED SOME KEY MILESTONE SLIDES, UM, FOR THAT PROJECT WORK THAT WILL CONTINUE ON FOR THE NEXT COUPLE OF YEARS.

WE ALSO CLOSED OUT THE PLACEHOLDER, WHICH WAS

[00:10:01]

THE KEY RESULTS WE HAD THERE WERE FOCUSING ON GETTING YOU THE BRIDGE RECOMMENDATION, WHICH WE DID BACK IN APRIL.

SO WE CLOSED THAT OUT.

UM, BUT YOU'LL NOTICE ON THE NEXT SLIDE WE HAVE ADDED SOME ADDITIONAL NEW KEY RESULTS FOR ALL OF THE MARKET DESIGN WORK THAT HAS FOLLOWED ON SINCE THEN.

SO ALSO THE REALTIME CO-OP OPTIMIZATION.

AS I NOTED, WE'VE GOT ADDITIONAL KEY RESULTS HERE SO WE CAN TRACK THE PROJECT MILESTONES BETWEEN NOW AND THE END OF THE YEAR, KEEPING PRIORITY FOCUS ON THAT PROJECT MOVING FORWARD.

WE ARE ALSO WORKING TO IMPLEMENT DISPATCHABLE RELIABILITY RESERVE SERVICE, WHICH WE WERE, UM, INSTRUCTED VIA, UH, HB 1500 THROUGH THIS LAST LEGISLATIVE SESSION TO HAVE THAT IN PLACE BY NEXT YEAR NOVEMBER.

UM, SO WE'VE GOT KEY MILESTONES TO MAKE SURE WE STAY ON TARGET.

WE ALSO ARE IMPLEMENTING KEY MILESTONES FOR THE OPERATING RESERVE DEMAND CURVE, WHICH THE P U C INSTRUCTED US, UH, AT THEIR AUGUST 3RD OPEN MEETING TO MOVE FORWARD, UH, WITH THE RE RECOMMENDATION FROM THE BOARD IN APRIL.

SO WE'VE GOT MILESTONES TO MAKE SURE THAT IS COMPLETED THIS YEAR AS WELL.

AND AT THIS POINT, I WOULD SAY THE WORK FOR ALL OF THESE ARE ON TRACK, BUT DID WANNA HIGHLIGHT THAT THEY ARE NEW.

OUR FINAL OBJECTIVE IMPLEMENT IMPROVEMENTS IN ORGANIZATIONAL TECHNOLOGY AND FINANCIAL CAPABILITIES AND PROCESSES.

PLEASED TO REPORT THAT THEY ARE ALL ON TRACK.

AND THE FIRST ONE IS RELATED TO OUR DATA CENTER UPGRADE.

UM, EVERYTHING IS ON TRACK.

WE DID HAVE ONE THAT WE'VE TALKED TO YOU ABOUT BEFORE WITH AN ISSUE WITH ONE OF OUR VENDORS, BUT THE TEAM IS MAKING UP GROUND AND MAKING PROGRESS ON THAT KEY RESULTS THAT WE REMAIN ON TRACK FOR THE END OF THE YEAR, IMPLEMENTING THE KEY MILESTONES TO REDUCE OUR TREASURY OPERATIONAL RISK, UH, COMPLEXITIES.

UH, THOSE PROJECT EFFORTS ARE ALL MOVING FORWARD AS INTENDED AND INCREASED CYBERSECURITY AWARENESS OF EMPLOYEES WE'RE ON TRACK.

UM, THE CYBER TEAM IS REGULARLY DOING DIFFERENT EXERCISES WITH OUR EMPLOYEES TO, UH, KEEP IT AWARENESS AT THE TOP OF THEIR MINDS AND WE'RE MEETING OUR METRICS FOR THAT KEY RESULT AS WELL.

SO IN CLOSING, AND THE NEXT STEPS WOULD BE YOU'LL GET A FINAL REPORT AT YOUR DECEMBER MEETING ON WHERE WE CLOSED OUT THE YEAR ON THESE OBJECTIVES AND KEY RESULTS.

AND WE ARE ALSO BEGINNING WORK NOW LOOKING AHEAD TO 2024.

SO NOW IT'S TIME FOR DEVELOPMENT FOR OUR NEXT SET OF PRIORITIES FOR NEXT YEAR.

UM, AND YOU SHOULD EXPECT TO SEE DRAFTS OF THOSE LATER THIS YEAR.

ANY QUESTIONS? CHRIS, YOU REMIND ME.

UH, ARE THESE OKRS, ARE THEY, THEY'RE THE CORPORATE MEASUREMENTS USED FOR THE SHORT TERM INCENTIVE PROGRAM, RIGHT? THAT IS CORRECT.

THANK YOU.

AND HOW DO YOU DEAL WITH LIKE WHEN YOU ADD A, A NEW UH, O K R DURING THE YEAR? WE HAVE MADE THE DECISION THAT WE WOULD NOT INCLUDE THOSE, UM, BECAUSE WE DIDN'T THINK IT WAS FAIR BY ADDING 'EM IN THE MIDDLE OF THE YEAR.

BUT THESE WERE SUCH PRIORITY EFFORTS, WE WANTED TO MAKE SURE THAT WE WERE TRACKING 'EM.

I ALSO ANTICIPATE, UH, MANY OF THESE ARE LONGER TERM, UM, BECAUSE THERE ARE THINGS THAT WE'LL BE IMPLEMENTING NEXT YEAR.

SO YOU'RE PROBABLY GETTING A PREVIEW OF SOME OF THE, THE KEY STARTERS FOR NEXT YEAR'S SET OF OBJECTIVES AND KEY RESULTS.

THANK YOU.

ANY OTHER QUESTIONS? THANK YOU.

THANKS.

[8. Review of 2022 ERCOT 401(k) Savings Plan Audit Report]

UH, MAR WILL YOU PLEASE JUST WALK US THROUGH THE MEMO AND THE MATERIALS? GOOD MORNING.

UH, AS, AS CHAIR HEGG MENTIONED, THIS AGENDA ITEM PERTAINS TO THE AUDIT OF FINANCIAL STATEMENTS FOR THE ERCOT 4 0 1 K SAVINGS PLAN AS OF DECEMBER 31ST, 2022.

NOW THE CURRENT H R G CHARTER, IT REQUIRES THAT YOU HAVE AN UPDATE ON THE ANNUAL FINANCIAL AUDIT FOR THE 4 0 1 K SAVINGS PLAN AND AN EFFORT TO CONTINUALLY INCREASE OUR EFFICIENCIES ACROSS THE COMMITTEES.

AND SINCE THIS ACTUALLY IS AN AUDIT THAT FALLS UNDER THE PURVIEW OF F AND A BECAUSE IT'S A REQUIRED CHARTER ITEM WITH THE EXISTING CHARTER, I'LL BE SPEAKING TO THE UPDATE TODAY, BUT WE'LL REMOVE IT FROM THE CHARTER SO THAT GOING FORWARD, THE ANNUAL 4 0 1 K SAVINGS PLAN AUDIT WILL ONLY BE DISCUSSED AT F AND A.

SO BAKER TILLY WILL BE HERE LATER THIS MORNING DURING F AND A TO SPEAK TO THE AUDIT IN DETAIL.

UM, ERISA REQUIRES THAT PLAN SPONSORS THAT OFFER A 4 0 1 K PLAN FILE A 5,500 EACH YEAR INCLUDING A FINANCIAL STATEMENT FOR THE, THE AUDIT OF THE PLAN.

UM, AND AGAIN, BAKER TILLY WILL BE SPEAKING TO THE AUDIT IN DETAIL F AND A LATER THIS MORNING.

THE REPORT REFLECTED NO FINDINGS OF MATERIAL ISSUE WITH RESPECT TO THE ADMINISTRATION OF THE 4 0 1 K PLAN, AND WE DO EXPECT THAT TOMORROW F AND A WILL RECOMMEND TO THE BOARD OF DIRECTORS TO ADOPT THE FINANCIAL STATEMENTS FOR THE 4 0 1 K SAVINGS PLAN, EFFECTIVE DECEMBER 31ST, 2022.

[9. Future Agenda Items]

[00:15:03]

SO WE HAVE THREE CHARTERED ITEMS SCHEDULED TO DISCUSS AT OUR OCTOBER COMMITTEE MEETING.

THE FIRST BEING THE ANNUAL SELF-EVALUATIONS.

ALSO WILL BE COMING TO SPEND TIME WITH YOU TO DISCUSS EFFORTS THAT WE HAVE FOR GOVERNMENTAL RELATIONS.

AND THEN FINALLY, I WILL BE HERE TO DISCUSS THE SUCCESSION PLANS FOR THE ERCOT OFFICERS WITH YOU.

THANK YOU, MARA.

THE LAST

[10. Other Business]

IS THERE ANY OTHER BUSINESS ANY COMM COMMITTEE MEMBERS WISH TO ADDRESS? HEARING

[Convene Executive Session]

THE COMMITTEE WILL ADJOURN GENERAL SESSION AND CONVENE AN EXECUTIVE SESSION.

NO VI NO VOTING ITEMS ARE ANTICIPATED DURING EXECUTIVE SESSION.

SO GENERAL SESSION WILL NOT RECONVENE AFTER THE CONCLUSION OF THE EXECUTIVE SESSION.

UH, GENERAL SESSION IS NOW ADJOURNED AND THE WEBCAST WILL BE CONCLUDED.

LET'S TAKE A 10 MINUTE BREAK BEFORE WE START.

EXECUTIVE SESSION CHAIR JACKSON, THE ADJOURNING, THE GENERAL SESSION DURING THE MEETING.

THANK YOU.