Aug 30, 2023 Reliability and Markets Committee Meeting

GENERAL SESSION MEETING MINUTES.

NEXT IS

[3. June 19, 2023 General Session Meeting Minutes ]

AGENDA ITEM THREE.

JUNE 19TH, 2023.

THERE IS A DRAFT OF THE MEETING MATERIALS.

DOES ANYONE HAVE ANY COMMENTS OR WISH TO MAKE A MOTION? SO MOVED.

SECOND, CARLOS, THANK YOU.

IS ALL IN FAVOR? AYE.

ANY OPPOSED? ANY ABSTENTIONS MINUTES ARE APPROVED? OKAY.

CHAIR, LET, LET'S SEE IF, UH, WE NOW HAVE A QUORUM OF THE COMMISSIONERS.

SO I'LL TURN IT OVER TO CHAIR JACKSON.

NEXT UP IS AGENDA ITEM FIVE, RECOMMENDATION REGARDING NON UNANIMOUS AND OTHER SELECTED REVISION RECOMMENDED BY TAC FOR BOARD APPROVAL.

UM, 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 AUGUST 30TH, UH, 2023.

I'M KATHLEEN JACKSON.

I'M JOINED TODAY BY COMMISSIONERS WILL MCADAMS AND LORI KOBOS.

GREAT.

THANK YOU

[4. Proposed Revisions to Committee Charter ]

FOR AGENDA ITEM FOUR.

PROPOSED REVISIONS TO COMMITTEE CHARTER LEGAL HAS INCLUDED IN THE MEETING MATERIALS, DRAFT CHARTER REVISIONS.

THE REVISIONS PRIMARILY REMOVED PROVISIONS FOR INCORPORATION INTO A CHARTER FOR THE PROPOSED TECHNOLOGY AND SECURITY COMMITTEE, WHICH THE BOARD IS EXPECTED TO APPROVE THE FORMATION OF AT ITS MEETING TOMORROW.

THE REVISIONS ALSO PROPOSE TO CLARIFY R AND M COMMITTEE CONSIDERATION OF REVISION REQUEST RECOMMENDED BY THE TECHNICAL ADVISORY COMMITTEE TAC FOR BOARD APPROVAL.

DOES ANYONE HAVE ANY COMMENTS TODAY? IF NOT, PLEASE FEEL FREE TO SEND CHAD AND HIS TEAM.

ANY COMMENTS OVER THE NEXT SEVERAL WEEKS? WE WILL TEE THE ITEM UP FOR A VOTE AT THE NEXT R AND M COMMITTEE MEETING.

[5. Recommendations regarding Non-Unanimous and other Selected Revision Requests Recommended by TAC for Board Approval ]

THE TAC CHAIR AND VICE CHAIR ARE UNAVAILABLE TODAY.

[5.1 TAC Report regarding Non-Unanimous and Other Selected Revision Requests Recommended by TAC for Board Approval ]

UNDER AGENDA 5.1, BRIAN SAMS, WHO IS THE TAC REPRESENTATIVE FOR THE INDEPENDENT GENERATOR SEGMENT, WILL REPRESENT THE TAC REPORT ON T'S BEHALF.

THE REPORT INCLUDES FOUR REVISION REQUESTS THAT TAC NON UNANIMOUSLY RECOMMENDED FOR APPROVAL ON ONE OF THESE FOUR REVISIONS.

N P R R 1186, OLI AND LP FILED A TAC RECOMMENDATION OPPOSITION PURSUANT TO THE BOARD POLICIES AND PROCEDURES, BILL BARNES OF RELIANT ENERGY RETAIL SERVICES WAS APPOINTED AS THE TAX ADVOCATE.

THE E OLIAN REPRESENTATIVE AND TAX ADVOCATE MAY PRESENT TO THE R AND M COMMITTEE.

OTHERWISE, THEY WILL PRESENT AT THE BOARD MEETING TOMORROW.

I KNOW ERCOT STAFF FILED COMMENTS EARLIER THIS WEEK AND HAS A PRESENTATION REGARDING N P R R 1186.

SO,

[5.1.1 NPRR1165, Revisions to Requirements of Providing Audited Financial Statements and Providing Independent Amount ]

BRIAN, PLEASE PROCEED WITH TAX REPORT ON N P R R 1165 REVISIONS TO REQUIREMENTS PROVIDING AUDITED FINANCIAL STATEMENTS AND PROVIDING INDEPENDENT AMOUNTS.

THE, IN THE, UM, LAYOUT, UH, CURRENTLY ALLOW COUNTERPARTIES TO AVOID POSTING INDEPENDENT AMOUNTS BASED ON THEIR OWN FINANCIAL STATEMENTS.

AND, UH, GOOD AFTERNOON.

I'M HERE TODAY AS THE TAX REP, TAX REPRESENTATIVE TO SPEAK ABOUT TWO NPR, ONE OTHER BINDING DOCUMENT, REVISION REQUEST, AND A VERIFIABLE COST MANUAL REVISION REQUEST.

UM, THE FIRST ITEM IS N P R 1165.

THIS REVISION REQUEST, UH, REQUIRES, UH, THAT PROVIDING AUDITED FINANCIAL STATEMENTS AND, AND PROVIDING INDEPENDENT AMOUNTS.

UH, THE, THE PROTOCOLS, AS YOU CAN SEE HERE IN

[00:05:01]

SO A COUNTERPARTY MUST ALSO AVOID POSTING THE INDEPENDENT AMOUNT BY PROVIDING ITS PARENT OR THIRD PARTY FINANCIAL STATEMENTS.

UM, THE ONE DISSENTING A VOTE CAME FROM C P S AND C P S ESTIMATED THE COST TO THE MARKET AND ULTIMATELY TO CONSUMERS POSTING INDEPENDENT AMOUNT WOULD BE ABOUT $5 MILLION PER YEAR.

BUT THE BENEFIT THEY THOUGHT WOULD BE ONLY ABOUT A HALF, UM, OR 500 MILLION PER COMPANY, WHICH WOULD RESULT IN THEIR, THEIR ESTIMATE NINE S NINE ENTITIES THAT WOULD NEED TO FILE FOR BANKRUPTCY EVERY YEAR.

UM, THEY DIDN'T THINK THAT IT WAS A PRUDENT USE OF OF CUSTOMER FUNDS.

AND THEN, SO WE'RE, UH, OPPOSED TO THE N P R R, UM, THE NEXT N P R R IS N P R 1186.

I, I THINK IT MIGHT BE USEFUL TO DEAL WITH THESE ONE AT A TIME, IF YOU DON'T MIND.

PROVE ONE AT A TIME.

SURE.

SO ARE THERE ANY COMMENTS FROM THE ERCOT STAFF ON 1165? CANNOT THANK YOU.

UM, ERCOT STAFF BOTH SUPPORTS AND, UH, ACTUALLY FILED 11, UH, 65.

IT ALIGNS, UM, UH, WITH THE PREVIOUS DEC DECISION THAT THE BOARD MADE ON N P R R 1112 REGARDING UNSECURED COLLATERAL.

UM, THESE, UH, UH, GUARANTEE AGREEMENTS WERE ANOTHER WAY TO POINT TO UNSECURED COLLATERAL AS A WAY TO MEET REQUIREMENTS.

AND BY APPROVING THIS, WE WOULD CLOSE THAT GAP AND WE BELIEVE THAT'S THE PROPER MARKET DESIGN AND ALIGNED WITH, UM, DECISIONS THAT THE BOARD'S MADE IN THE PAST.

THAT'S CONSIDERED APPROVED.

SO DOES ANY COMMITTEE MEMBER HAVE ANY COMMENTS OR WISH TO MAKE A MOTION REGARDING AN RMM COMMITTEE RECOMMENDATION TO THE BOARD ON N P R R 1165? EITHER COMMENTS OR A MOTION TO APPROVE? I MOTION.

ANY OPPOSED OR ABSTENTIONS? OKAY.

[5.1.2 NPRR1186, Improvements Prior to the RTC+B Project for Better ESR State of Charge Awareness, Accounting, and Monitoring – URGENT ]

SO I THINK WHAT WE WOULD HAVE, UM, AFTER YOUR INTRODUCTION OF IT, UH, HAVE THE TAX ADVOCATE, I'M SORRY, THE TAC ADVOCATE, UH, BILL BARNES TO PRESENT.

BRIAN? UH, THE NEXT N P R 1186 IMPROVEMENTS PRIOR TO THE R T C PLUS B PROJECT FOR BETTER E SS R STATE OF CHARGE AWARENESS ACCOUNTING AND MONITORING.

UM, THIS WAS ALSO RECOMMENDED FOR APPROVAL BY TAC WITH THREE OPPOSING VOTES AND FIVE ABSTENTIONS.

I KNOW WE'RE JUST LOOKING AHEAD IN THE AGENDA, GETTING, GET INTO A LOT OF DETAILS ON THIS.

SO, UM, NOT SURE ABOUT THE BEST WAY TO PROCEED IF YOU WANT TO, UM, HAVE KIND OF, UH, THAT DISCUSSION NOW.

YEAH,

[5.1.3 OBDRR048, Implementation of Operating Reserve Demand Curve (ORDC) Multi-Step Price Floor ]

UH, I KNOW THAT, UH, BILL'S, SLIDES LAY OUT THE REASONS.

SO I, I WILL, UM, UH, DEFER TO HIM HERE.

1, 2 3, 2 3.

FOR ERCOT OPERATIONS ON THE STATE OF CHARGE OF ESRS IN TERMS OF PROVIDING ANCILLARY SERVICES.

GOOD AFTERNOON COMMITTEE MEMBERS, UH, BILL BARNES FOR RELIANT ENERGY, UH, RETAIL SOLUTIONS.

I HAVE BEEN, UH, CHOSEN TO ACT AS TAC ADVOCATE TODAY FOR N P R 1186.

MY ROLE TODAY IS LIMITED TO, UH, PRESENTING A SUMMARY OF THE COLLECTIVE VIEW OF THE TECHNICAL ADVISORY COMMITTEE AND THEIR ACTION ON 1186, WHICH WAS TO VOTE IN SUPPORT THAT IS ADMITTEDLY A CHALLENGING ROLE FOR THIS N P R BECAUSE THE TOPIC IS VERY COMPLICATED.

WE'RE DEALING WITH NEW RESOURCES THAT HAVE UNIQUE CHARACTERISTICS, UM, ENERGY STORAGE RESOURCES, UH, AND I WOULD CERTAINLY DEFER ANY DEEP TECHNICAL QUESTIONS TO THE DISCUSSION THAT WILL FOLLOW MINE, WHICH WILL INCLUDE IAN AND ERCOT THAT GO INTO MUCH MORE DETAIL.

IN TERMS OF, UM, LAYING OUT THE N P R R, I THINK I WILL, UH, AGAIN, DEFER THAT TO THE FOLKS THAT FOLLOW, IN ESSENCE, UM, N P R 1186, UH, CREATES NEW REQUIREMENTS, UM, THAT IMPROVE AND, AND, UH, ALLOW FOR MONITORING AND AWARENESS

[00:10:01]

UM, AND YOU WILL HEAR MUCH MORE ABOUT WHAT THIS N P R DOES AND THE EXPLANATIONS FOR WHY IT'S NEEDED.

IN TERMS OF PROCEDURAL HISTORY FOR, UH, THIS N P R R ERCOT FIRST BEGAN TO RAISE CONCERNS, UM, WITH, UH, PERFORMANCE ISSUES RELATED TO ESRS AND THE ABILITY TO COMPLY WITH STATE OF CHARGE REQUIREMENTS, UH, LAST NOVEMBER.

AND THOSE, UH, DISCUSSIONS PERMEATED UP THROUGH THE ERCOT STAKEHOLDER PROCESS, BEGINNING AT THE PERFORMANCE DISTURBANCE AND CONTROL WORKING GROUP AND THE WHOLESALE MARKET WORKING GROUP IN NOVEMBER.

THERE WAS A LENGTHY DISCUSSION AT THE JANUARY RELIABILITY OPERATIONS SUBCOMMITTEE ROSS, UH, ERCOT THEN I BELIEVE UPDATED A BUSINESS PRACTICE MANUAL WITH, UH, EXPECTATIONS FOR HOW, UH, STATE OF CHARGE AND COP, UM, UPDATES SHOULD, SHOULD LOOK, AND INEVITABLY, UH, DID, DID FILE THE N P R ITSELF TO MAKE THOSE RULES BINDING.

IN JUNE, THE PROTOCOL REVISION SUBCOMMITTEE DISCUSSED THE N P R R VOTED TO TABLE FOR ONE MONTH AT THEIR JULY MEETING TO ALLOW FOR CONTINUED DISCUSSION AND NEGOTIATIONS, AND THEN VOTED THROUGH, UM, ONE OF THE, UH, COMPROMISES THAT ERCOT STAFF MADE WITH, UM, UH, SOME OF THE OPPONENTS AT THE AUGUST 10TH P R S MEETING.

UM, AND THEN THAT WAS APPROVED AT THE AUGUST 22ND TAC MEETING WITH A VOTE OF 88% IN FAVOR.

THERE WERE OPPOSING VOTES FROM THE CONSUMER INDEPENDENT GENERATOR AND INDEPENDENT RETAIL ELECTRIC PROVIDER SEGMENTS ATTACK, AND THEN NUMEROUS ABS, UH, ABSTENTIONS IN THE CONSUMER, UM, UH, I P M INDEPENDENT POWER MARKETER AND IN THE I REP SEGMENTS.

FIRST OF ALL, BEFORE I SUMMARIZE THE, THE VIEWS OF THE TAC MEMBERS, I THOUGHT IT WAS IMPORTANT TO ADD THE QUALITY, UM, AND THE EXTENSIVE EFFORT PUT IN BY BOTH PARTIES IN PREPARING AND SUBMITTING COMMENTS AND LEADING DISCUSSIONS ON THESE VERY TECHNICAL SUBJECTS THAT OCCURRED.

UM, STARTING BACK IN JANUARY AT THE RELIABILITY AND OPERATIONS SUBCOMMITTEE, AND CERTAINLY AT P R SS AND ATTACK, THERE WERE, UM, NUMEROUS COMMENTS, UH, FILED FROM IAN JUPITER, BROADRIDGE PLUS POWER, KEEP, CAPTURE, HUNT, AND ERCOT STAFF THAT WENT INTO GREAT DEPTH ON THESE ISSUES THAT WERE EXTREMELY VALUABLE IN INFORMING THE DISCUSSIONS THAT TOOK PLACE AT P R S AND AT TAC.

AGAIN, THIS IS, THESE ARE EMERGING TECHNOLOGIES AND, AND WHAT WE HAVE LEARNED THROUGH THESE DISCUSSIONS IS A LOT OF VALUE, VALUE IN COMING TOGETHER AND BEING EDUCATED ON THESE ISSUES.

AND THAT CERTAINLY TOOK PLACE DURING THIS PROCESS.

SO I WANTED TO ACKNOWLEDGE, UH, THOSE PARTIES FOR THE EFFORT THEY PUT IN, UM, IN PREPARING THESE COMMENTS IN TERMS OF THE, THE VOTE AND WHAT ENDED UP SWAYING, UH, TAC MEMBERS THE MOST, IT WAS THE FACT THAT, UM, ERCOT SIMPLY LACKS THE VISIBILITY AND AWARENESS TODAY ON WHERE THE STATE OF CHARGE RESIDES FOR ESRS IN TERMS OF MEETING THEIR OBLIGATIONS TO PROVIDE ANCILLARY SERVICES, RESERVES, OR ANCILLARY SERVICES ARE A PREMIUM PRODUCT.

THEY'RE A HIGHER PRIORITY PRODUCT IN THE OP MARKET, UH, COMPARED TO JUST PROVIDING ENERGY.

AND THAT THAT PRODUCT ITSELF, BECAUSE IT'S A HIGHER STANDARD, REQUIRES STRICT COMPLIANCE.

ERCOT RELIES ON THESE SERVICES, UH, FOR DEPLOYMENT WHEN WE HAVE, UH, TIGHT GRID CONDITIONS AS WE'VE SEEN THE LAST FEW WEEKS, RIGHT? SO WE NEED TO MAKE SURE THAT WE'RE GETTING WHAT WAS SOLD WHEN ERCOT HITS THAT DEPLOYMENT BUTTON.

THAT WAS THE PRIMARY CONCERN THAT I HEARD FROM THE MAJORITY OF THE TAC MEMBERS IN SUPPORT OF THIS N P R R.

AND THAT INCLUDES THE REQUIREMENT FOR PROVIDING THE FULL AMOUNT OF ANCILLARY SERVICES, HONORING THE DURATION LIMITS THAT WERE APPROVED IN N P R 10 96.

THAT INCLUDES A TWO HOUR, UH, DURATION LIMIT FOR E C R SS AND A FOUR HOUR DURATION LIMIT FOR NONS SPIN.

AS WE'VE SEEN THE LAST FEW WEEKS, NONS SPIND DEPLOYMENTS ROUTINELY ARE SPAN MORE THAN ONE HOUR, MULTIPLE HOURS, AND SAME WITH E C R SS.

SO THE REASONING BEHIND, UH, 10 96 FOR SUPPORTING THOSE DURATION LIMITS, THOSE ARE THE RULES OF THE ROAD TODAY.

AND THAT NOT EVERYONE MAY, MAY AGREE WITH THOSE SETTINGS, BUT AS LONG AS, AS THOSE ARE THE REQUIREMENTS FOR PROVIDING THE SERVICE, WE NEED TO MAKE SURE THAT THE STATE OF CHARGE HONORS THOSE, UH, REQUIREMENTS.

ANOTHER ITEM IS

[00:15:02]

T'S PHILOSOPHY FOR, UM, CONSERVE OPERATING PRACTICES AND ING UH, PRIORITIZING OPERATIONAL RELIABILITY.

THAT IS A CONSISTENT THEME THAT WE HAVE HEARD FROM OUR ERCOT SINCE WINTER STORM URI.

CERTAINLY OTHER RULES AND AND PROCESSES HAVE BEEN ADOPTED TO, UM, UH, HONOR AND PRESERVE THOSE THAT OPERATION FLEXIBILITY 1186 HAS BEEN SEEN AS CONSISTENT, CONSISTENT WITH THAT, THAT THEME, UH, ENSURING THAT WE ARE PRESERVING OPERATIONAL RELIABILITY.

UH, THIRD POINT IS 1186 IS WIDELY RECOGNIZED AS A TEMPORARY SOLUTION.

I'VE HEARD MANY TECH MEMBERS DESCRIBE IT AS A HALF STEP FORWARD IN THE RIGHT DIRECTION, KNOWING THAT WE HAVE A MUCH BIGGER SOLUTION, BIGGER SYSTEM CHANGE COMING IN THE R T C PLUS B EFFORT THAT WILL BE MORE SOPHISTICATED IN MODELING AND DISPATCH OF E ESRS.

AND LAST ON THE SUPPORTING SIDE IS THE E S R, UM, ENERGY STORAGE RESOURCE COMMUNITY WAS SPLIT.

THERE WERE SOME E S R PROVIDERS THAT FELT THAT 1186 IS A REASONABLE, UH, TEMPORARY SOLUTION UNTIL WE GET THE MORE FULLY DEVELOPED R T C PLUS B, UH, SOLUTION IN PLACE CONCERNS, UH, FROM TAC MEMBERS.

I WANNA MAKE SURE THAT YOU GUYS HEARD BOTH SIDES OF THE EQUATION.

ALTHOUGH TAC DID VOTE, UH, IN FAVOR, 88%, THERE WERE CONCERNS WE SAW, I THINK FIVE ABSTENTIONS, THOSE CONCERNS INCLUDED.

UH, LIMITING THE FULL OPERATIONAL CAPABILITY OF RESOURCES, UH, MAKING SURE THAT, THAT THE UNIQUE CHARACTERISTICS OF E ESRS ARE FULLY MODELED AND UTILIZED.

AND THEN THE POTENTIAL RELIABILITY IMPACTS OF LIMITING, UM, CHARGING, WHICH, WHICH I THINK DAN'S GONNA EXPLAIN IN MORE DETAIL, REALLY, UM, ISN'T NECESSARILY LIMITING THE, THE, UM, OR FORCING CHARGING DURING, DURING E E A IS IN BASICALLY RESERVING THAT ENERGY, UM, AND MAKING SURE THE STATE OF CHARGE IS HELD DURING THAT EVENT, WHICH I BELIEVE ERCOT, UH, IS ADDRESSING IN A REQUEST FOR A, A NARROW REMAND TO BE ABLE TO UTILIZE THAT ENERGY IF WE NEED, IF WE NEED IT DURING AN E E A EVENT.

AND THEN THE LAST BULLET, WHICH AGAIN, IS WHAT I WANT TO TEE UP.

UM, THAT WAS A CONSISTENT THEME IN THE DISCUSSIONS AT P R S AND ATTACK, AND IT REALLY FELT LIKE THE CONCERNS WERE MORE RELATED TO THE DURATION LIMITS THAT WERE PASSED IN IN 10 96, THE TWO AND THE FOUR HOUR DURATION LIMITS.

A LOT OF THE CONCERNS THAT I HEARD FROM, UM, THOSE ON 1186 WERE REALLY MORE RELATED TO THOSE DURATION LIMITS AND WHETHER THOSE SHOULD BE REVISITED AT SOME POINT IN THE FUTURE.

AND I'M HAPPY TO TAKE ANY QUESTIONS.

ANY QUESTIONS FOR BILL? SO IT TURN, DAN, JUST IN TERMS OF COMMENTING ON TAC POSITION BEFORE WE GO TO THE AIOLI PRESENTATION, UM, ANY VIEWPOINTS ON WHERE TAC CAME OUT ON THIS? IT SEEMS TO ME THAT BILL IS WELL DESCRIBED WHAT THE DISCUSSION THAT WENT ON.

THINK RIGHT NOW WHAT WE WOULD DO THEN IS MOVE TO IAN'S PRESENTATIONS, UH, WITH STEPHANIE SMITH, AND THEN AFTER THAT WE'LL DO THE ERCOT PRESENTATION.

[5.1.2.2 TAC Recommendation Opposition on NPRR1186 of Eolian, LP ]

OKAY, YOU GOOD AFTERNOON.

THANK YOU FOR YOUR TIME TODAY.

MY NAME IS STEPHANIE SMITH, AND I AM THE CHIEF OPERATING OFFICER AND ONE OF THE OWNERS OF OLIAN.

OLIAN HAS INVESTED HUNDREDS OF MILLIONS OF DOLLARS IN THE ERCOT MARKET AND OPERATES THREE OF THE LARGEST MERCHANT BATTERIES ON THE GRID TODAY, ALL OF WHICH HAVE BEEN TESTED AND QUALIFIED BY ERCOT TO PROVIDE MULTI-HOUR DURATION ANCILLARY SERVICE PRODUCTS SUCH AS E C R SS AND NONS SPIN.

MY GOAL TODAY IS TO SHARE FACTS WITH YOU REGARDING THE, THE POTENTIAL IMPACTS OF 1186, AND TO HIGHLIGHT WHY THIS N P R R IS NOT READY FOR PASSAGE BY THE BOARD.

WHILE WE BELIEVE THAT SOME FEATURES OF 1186 ARE GOOD, WE BELIEVE MANY OTHERS REQUIRE MORE WORK.

AS BILL NOTED, THIS IS A VERY COMPLEX ISSUE, SO I APOLOGIZE FOR THE PAINFULNESS OF SOME OF THE DEPTH OF THE WEEDS.

UM, SINCE THE

[00:20:01]

URGENCY OF OF N P R 1186 IS PREDICATED ON RELIABILITY, I'D LIKE TO START WITH OUR CONCERNS THAT IT IN FACT CAN IMPEDE RELIABILITY.

ONE OF THE FIRST POINTS IS ABOUT, UM, CORRELATED CHARGING, UH, IN 1186 REQUIRES ALL THE ESRS TO MEET A STATE OF CHARGE REQUIREMENT AT THE TOP OF EACH HOUR.

WHILE ERCOT MAINTAINS THIS IS NOT MANDATED BY 1186 AS A BATTERY OPERATOR, I CAN TELL YOU THAT THE PRACTICAL IMPACT IS THAT THE CORRELATED CHARGING IS ALMOST CERTAIN TO OCCUR, WHICH WILL NEGATIVELY IMPACT RELIABILITY AND COUNTER THE BENEFITS THAT BATTERIES CAN PROVIDE, WHICH I THINK WE ALL WANT TO HAVE ON THE SYSTEM.

ERCOT HASN'T STUDIED WHAT CHARGING OF ALL RESOURCES WILL DO TO MEET A TOP OF THE HOUR REQUIREMENT, AND WE DON'T KNOW WHETHER THERE WILL BE COST IMPLICATIONS OR WHAT GRID CONDITIONS THIS POSES THAT MIGHT CREATE RELIABILITY CONCERNS.

UM, UNFORTUNATELY, THE ISSUE OF DEPLOYMENT IN ALL CASES WILL REMAIN UNDER THE CONSTRUCT OF 1186.

EVENTS DON'T ALWAYS START AT THE TOP OF AN HOUR, AND EVEN THOUGH WE HAVE HOURLY PRODUCTS, WE DON'T WANT ALL BATTERIES CHARGING AT THE SAME TIME TO MEET A REQUIREMENT AT THE TOP OF AN HOUR.

IT'S NOT IDEAL FOR OPERATIONS.

WE REALLY WANT ERCOT TO SIGNAL WHEN BATTERIES SHOULD CHARGE DURING DEPLOYMENT, BUT OUR UNDERSTANDING IS THAT WHEN WE SUGGESTED THAT THAT WAS TOO COMPLEX, UM, TO BE INTEGRATED INTO THIS N P R R, THE NEXT CONCERN WE HAVE IS ABOUT WHAT WE'RE CALLING STRANDED CAPACITY.

UM, THIS IS WHERE WE START TO DEVIATE ON THE IMPACTS OF 1186 FOR ONE HOUR PRODUCTS VERSUS MULTI-HOUR PRODUCTS UNDER 1186, BATTERIES MUST MAINTAIN A STATE OF CHARGE PRIOR TO THE FIRST HOUR THAT DRAMATICALLY EXCEEDS ITS ANCILLARY SERVICE OBLIGATIONS.

THIS STATE OF CHARGE SITS IN THE BATTERY AND CANNOT BE USED EITHER BY THE BATTERY OWNER WHO IS NOT PAID FOR THIS CAPACITY OR ERCOT EVEN WHEN IT NEEDS IT MOST.

THE CHART ON PAGE SIX OF ERCOT FILED COMMENTS IS HELPFUL TO EXPLAIN THE ERRORS IN ERCOT POSITION.

IF YOU LOOK AT THE STATE OF CHARGE REQUIREMENTS IN THAT CHART FOR OPERATING HOURS 13 AND 14, WHICH I BELIEVE IS IN YOUR BOARD PACKETS, UM, ERCOT IS SHOWING THAT A RESOURCE WITH A 50 MEGAWATT E C R S RESPONSIBILITY MUST HAVE A HUNDRED MEGAWATT HOURS OF STATE OF CHARGE, BUT ONLY 50 MEGAWATT HOURS CAN BE USED IN THAT ONE HOUR.

THE SECOND ISSUE IS ALSO SHOWN ON THIS CHART.

N P R R 1186 IS REQUIREMENT TO MAINTAIN A 100% STATE OF CHARGE AT THE TOP OF EACH HOUR MEANS THAT 50 MEGAWATT HOURS WILL NEVER BE USED FOR AN E C R S DEPLOYMENT DUE TO THE RECHARGING REQUIRED AT OPERATING HOUR 14 AND EVERY HOUR THEREAFTER.

FINALLY, IF YOU NOTE THE MEGAWATT HOURS BEFORE THE BLUE LINES ON THAT CHART, THAT'S ENERGY THAT 1186 SAYS WILL BE OFF LIMITS TO ERCOT OPERATORS EVEN IN AN EMERGENCY CONDITION.

ERCOT HAS PROPOSED REMAND ON THIS FINAL POINT, BUT, UH, WE DO NOT BELIEVE IT ADDRESSES ALL OF OUR CONCERNS SUFFICIENTLY AND IT WILL ULTIMATELY HARM THE OPERATION OF THE BATTERIES AND THE MARKET.

ERCOT ALSO CONTINUES TO CONFLATE DURATION AND STATE OF CHARGE AND BE SELECTIVE OVER SCENARIOS THAT THEY'VE PROVIDED IN THEIR COMMENTS.

THEY SAID IN THEIR FILING MONDAY THAT TWO ANCILLARY SERVICES PRODUCTS REQUIRE CALCULATION OF A MINIMUM STATE OF CHARGE OVER A PERIOD LONGER THAN AN HOUR.

THEY STATE THIS AS A FACT RATHER THAN AN OUTCOME OF THIS N P R 1186, THEY PROVIDE AN R R S SCENARIO TO ILLUSTRATE DECLINING OBLIGATION WITHIN THE HOUR, WHICH WE SUPPORT.

BUT FOR E C R S, THE EXAMPLE SHOWS AWARDS IN THREE CONSECUTIVE HOURS IN N P R 10 96, WHICH BECAME EFFECTIVE LAST YEAR.

ERCOT STAKEHOLDERS AND THE COMMISSION AGREED THAT E C R S WAS A TWO HOUR PRODUCT.

CURRENTLY, IF A PARTICIPANT HAS AN AWARD FOR THREE CONSECUTIVE HOURS AS A, DURING A DEPLOYMENT EVENT, THEY MUST PERFORM TO MEET THAT OBLIGATION AT THE QUEASY LEVEL, JUST LIKE EVERY OTHER RESOURCE.

AND I DO THINK THIS IS SOMETHING THAT, UM, EXCUSE ME, I GET NERVOUS AND MY MOUTH GETS DRY .

UM, I THINK THIS IS A POINT THAT WE DO NEED TO FURTHER DISCUSS BECAUSE I KNOW ERCOT HAS BROUGHT IT UP THIS, UM, ISSUE OF MULTI-HOUR DEPLOYMENTS.

I THINK THAT THIS IS A FEATURE OF 10 96 THAT NEEDS FURTHER DEFINITION AND HAS LED TO A LOT OF THE REASONS.

THERE'S A BIT OF A STICKING POINT HERE.

SO I I, THIS IS ONE OF THE POINTS THAT I THINK NEEDS FURTHER EXPLORATION.

UH, ERCOT ALSO IN ITS PRESENTATION, PROVIDED AN EXAMPLE OF A SINGLE HOUR AWARD, NOTING THAT YOU WOULD NOT BE REQUIRED TO HAVE FULL STATE OF CHARGE

[00:25:01]

AT THE TOP OF HOUR TWO, BUT THIS IGNORES THAT YOU WOULD BE REQUIRED TO HAVE FOUR HOURS OF STATE OF CHARGE AT THE TOP OF HOUR ONE, DESPITE NOT HAVING FUTURE AWARDS.

SO IT, IT ENDS UP BEING, IN MANY CASES, SOMETHING OF, UM, AN ARBITRARY ISSUE.

AND IT EFFECTIVELY MEANS THAT ERCOT IS MANAGING MY BATTERIES IN MANY WAYS BECAUSE THIS IS REQUIRING TOP OF THE HOUR, EVEN THOUGH THAT MAY NOT BE THE BEST TIME FOR US TO CHARGE OUR BATTERIES FOR THE GOOD OF THE MARKET.

UM, MR. VEGAS SAID IN THE PUBLIC UTILITY MEETING, OPEN MEETING LAST THURSDAY, THE ERCOT NEEDS MOST IS FLEXIBILITY.

WE DEFINITELY AGREE BATTERIES OFFER MORE FLEXIBILITY THAN ANY OTHER OPERATING RESOURCE TO REDUCE THEIR PARTICIPATION NOW, WHICH IS WHAT 1186 WILL HAVE.

THE IMPACT OF DOING IS IN FACT THE OPPOSITE OF WHAT IS NEEDED.

WE ARE COMMITTED TO FINDING A SOLUTION TO THIS WITH ERCOT BECAUSE WE DON'T WANNA PULL THAT MUCH NEEDED RAMP CAPABILITY, WHICH IS SO FAST IN A BATTERY OFF THE SYSTEM.

THE NEXT CONCERN WE HAVE IS THAT 1186 DISCRIMINATES AGAINST BATTERIES IN A NUMBER OF WAYS.

THE MOST EGREGIOUS TO ME IS THE MEASUREMENT OF COMPLIANCE OBLIGATIONS ON A PER RESOURCE SINGLE FIVE MINUTE SC INTERVAL BASIS FOR NON-PERFORMANCE ISSUES, EFFECTIVELY, A SINGLE BATTERY CAN BE FINE, $25,000 FOR FAILURE TO MEET A CHA, A CHARGE AS DIRECTED BY ERCOT FOR EACH FIVE MINUTE INTERVAL WITHOUT ANY ACTUAL PERFORMANCE ISSUE OCCURRING.

IT DOESN'T MATTER WHETHER AN A BATTERY'S QUEASY MANAGES THE ISSUE THROUGH ANOTHER ASSET IN ITS PORTFOLIO, JUST LIKE ALL OTHER RESOURCES DO.

UNDER 1186, THERE IS STILL A COMPLIANCE ISSUE FOR A FAILURE TO DELIVER THAT MAY NEVER ACTUALLY HAPPEN.

ALL ER CART RESOURCES AND QUEASY MANAGE THEIR OBLIGATIONS ACROSS PORTFOLIOS AND PRODUCTS.

IT'S A MARKET FUNDAMENTAL, NOT ALLOWING BATTERIES TO DO THE SAME IS DISCRIMINATORY AND WILL ONLY RESULT IN A CHILLING EFFECT ON FUTURE INVESTMENT AND NEGATIVE ECONOMIC IMPACT ON BATTERIES OPERATING AND IN CONSTRUCTION LEADING TO A REDUCTION IN ASSET VALUE.

THE VERY LIMITED EXCEPTION ALLOWED BY ERCOT IN 1186, UM, ILLUSTRATES DISCRIMINATION.

THERE'S A A, AN EXEMPTION, BUT IT FAVORS SHORT DURATION BATTERIES.

IF YOU DO THE MATH, UM, IT'S LIKE AN EIGHT EIGHT MEGA HOUR, 80% I BELIEVE.

UH, I WILL REITERATE THAT ERCOT ALREADY HAS ENFORCEMENT TOOLS THAT APPLY EQUALLY TO ALL RESOURCES IF THEY FAIL TO PERFORM.

THESE INCLUDE FINANCIAL PENALTIES FOR NON-PERFORMANCE AND SSM BATTERY INVESTMENTS WERE MADE WITH ALL OF THESE IN MIND.

AND WE STRONGLY BELIEVE ERCOT HAS WHAT IT NEEDS IN THESE TOOLS TO ENFORCE ISSUES OF NON-COMPLIANCE.

BATTERIES ARE MORE THAN WILLING TO PROVIDE ERCOT WITH SITUATIONAL AWARENESS, STATE OF CHARGE INFORMATION.

THIS HAS NEVER BEEN DISPUTED.

MOREOVER, BATTERIES SHOULD BE HELD TO THE SAME RESPONSIBILITIES AS EVERY OTHER RESOURCE.

IF YOU DO NOT ACTUALLY DELIVER ON YOUR OBLIGATIONS, YOU SHOULD GET PENALIZED.

COMPLIANCE SHOULD BE BASED THOUGH ON PERFORMANCE, NOT AS A PUNISHMENT FOR A PRE-CRIME THAT HASN'T RESULTED IN AN ISSUE.

UM, I ALSO WANNA TALK A LITTLE BIT ABOUT, UM, SOME OF THE PROCESS ISSUES JUST TO HIGHLIGHT THE CHALLENGES CAUSED BY THE URGENCY WITH SUCH A COMPLEX, UH, RULEMAKING.

UM, I HAVE PERSONALLY BEEN INVOLVED IN THIS PROCESS AT EVERY MEETING SINCE THE URGENT N P R R WAS FILED ON THE MORNING OF THE FIRST WORKSHOP ON JUNE 22ND.

I'VE SPENT COUNTLESS HOURS WITH ERCOT STAFF AS BILL NOTED.

EVERYONE SHOULD BE COMMENDED.

PEOPLE HAVE DROPPED THINGS, WORKED WEEKENDS, SPENT, YOU KNOW, EVENINGS.

THERE'S BEEN A LOT OF EFFORT, BUT I BELIEVE THAT THAT HAS NOT GIVEN US THE TIME WE NEEDED TO COLLABORATE TO THE EXTENT NEEDED FOR AN IMPORTANT RULEMAKING LIKE THIS.

UM, THROUGHOUT THAT PERIOD, WE MADE A NUMBER OF POTENTIAL COMPROMISE SUGGESTIONS, WHICH FRANKLY WERE NOT IN THE BEST INTEREST OF BATTERIES IN THE GROWING MARKET, BUT WE DID SO WITH AN EFFORT TO TRY TO MEET THE TIMELINE AND GET SOMETHING WE COULD WORK WITH.

UM, IN THAT PERIOD, ERCOT ONLY MADE THE ONE MINOR CHANGE THAT BILL MIN MENTIONED.

AND IN THE T PRESENTATION, UM, IN THEIR JULY 31ST COMMENTS.

THE JUSTIFICATION WHEN THIS WAS INITIALLY FILED WAS BECAUSE THERE IS A STAFFING ISSUE AND THIS NEEDS TO GET CODED IN, AND WE ARE WILLING TO WORK WITH THAT.

HOWEVER, OLIAN FILED COMMENTS VOICING CONCERN THAT IT DID NOT MEET THE LEGAL REQUIREMENTS, AND THEN IT BECAME A RELIABILITY ISSUE IN FUTURE COMMENTS.

AND THIS HAS MOVED SO FAST THAT THE N P R

[00:30:01]

R HAS CHANGED AND THE JUSTIFICATIONS HAVE CHANGED THROUGHOUT THE PROCESS, WHICH MAKES SENSE WITH SUCH AN URGENT TIMEFRAME.

WHAT WE HAVE ASKED FOR REPEATEDLY IS TO TABLE PARTS OF THE ISSUE OR MOVE THEM INTO A SEPARATE N P R SO THAT WE CAN FULLY EXPLORE THESE REALLY IMPORTANT PROBLEMS. UM, WE, I WANNA TAKE JUST A MOMENT AND I APOLOGIZE FOR THE HISTORY LESSON, BUT WE DO NEED TO STEP BACK TO 10 96 BECAUSE I THINK IT ADDRESSES SOME OF THE COMMENTS THAT ERCOT HAS PUT FORWARD TO DISCUSS TODAY.

UM, THEY ARGUE THAT 1186 IS NEEDED TO ENSURE THAT BATTERIES HAVE A CAPABILITY TO DELIVER THE SERVICES, BUT 10 96 CLEARLY DEFINED THE CAPABILITY THAT BATTERIES NEEDED TO PROVIDE E C R S AND NONS SPIN.

THIS WAS DEFINED AFTER EIGHT MONTHS OF EXTENSIVE AND CONTENTIOUS, SOMETIMES WORK BY STAKEHOLDERS IN ERCOT FOLLOWING THE PC'S APPROVAL OF 10 96 ERCOT UNILATERALLY PROPOSED WITH ONLY PERFUNCTORY STAKEHOLDER DISCUSSION AND NO P C OVERSIGHT, A NUMBER OF STATE OF CHARGE RESTRICTIONS IN THE BUSINESS PRACTICE MANUAL.

THE, I BELIEVE THAT THE CLAIMS OF NON-COMPLIANCE THAT ERCOT HAS MADE TIE BACK TO THE EXPECTATIONS IN THE BUSINESS PRACTICE MANUAL, WHICH IS NOT A BINDING DOCUMENT.

UM, SO WHAT WE HAVE HERE IS A SITUATION WHERE ERCOT IS RAISING ISSUES WITH COMPLIANCE BASED ON THOSE EXPECTATIONS.

AND, AND THEN NOW WE HAVE LIKE A RELIABILITY ISSUE BASED ON THAT UNILATERAL RULEMAKING.

THAT TO ME, SETS A DANGEROUS PRECEDENT FOR THE MARKET, ESPECIALLY CONSIDERING THAT THERE, YOU KNOW, IS AND SHOULD BE STRONG DEFERENCE FOR ASSERTIONS OF ERCOT FOR RELIABILITY CLAIMS. UM, I ALSO WANNA HIGHLIGHT HOW THIS WILL IMPACT NEGATIVELY FUTURE DEVELOPMENT OF LONGER DURATION BATTERIES, WHICH I BELIEVE WE NEED ON THIS GRID.

1186 MAKES IT VERY CHALLENGING FOR ESRS TO PARTICIPATE IN E C R S AND NONS SPIN PARTICIPATION ENCOURAGES NEW ESRS TO BE LONGER DURATION RESOURCES.

1186 DISCOURAGES THAT PARTICIPATION AND ALLOWS SHORTER DURATION BATTERIES TO PARTICIPATE IN CHARGE OF THE BOTTOM OF THE HOUR, CREATING THE PERVERSE INCENTIVE FOR DEVELOPMENT OF MORE SHORT DURATION RESOURCES.

THAT IS ONE OF THE ISSUES ERCOT IS CONCERNED ABOUT TO CREATE RELIABILITY, UH, RELIABILITY RISKS, REDUCTION OF BATTERIES IN E C R S AND NONS SPEND WILL INCREASE PRICES AS WELL.

IT WILL REDUCE COMPETITION IN THE ANCILLARY SERVICES MARKET AND REQUIRE THERMALS WHICH CANNOT RAMP AS FAST AS NECESSARY IN MANY CASES TO SIT IN ANCILLARY SERVICES, WHICH REDUCES THEIR PARTICIPATION IN REAL-TIME ENERGY MARKET AND THE OVERALL ENERGY SUPPLY.

BOTH ARE NOT GREAT .

UM, FINALLY, I JUST WANNA HIGHLIGHT SOME OF THE BIGGER MARKET ISSUES.

UM, A LOT OF THE DISCUSSION AROUND 1186 IS STEMMING FROM WHETHER THIS IS, IS AN ACCEPTABLE BRIDGE TO R T C PLUS B.

I BELIEVE THAT IS CURRENTLY WRITTEN.

THE COST TO THE MARKET IN BOTH RELIABILITY AND FUTURE INVESTMENT IS POTENTIALLY GREAT.

AND THAT IS WHY I'M LOOKING FOR MORE TIME TO DO THIS.

ERCOT HAS BEEN A LEADER AND AN INNOVATOR AS LONG AS I CAN REMEMBER.

I GREW UP IN TEXAS AS A TEXAN.

I BELIEVE THAT OVERREGULATION ONLY STIFLES MARKET FUNDAMENTALS THAT ALLOW SUCH INNOVATION.

I THINK THAT'S A CORE VALUE.

ALMOST EVERY REGULATORY CHOICE CREATES AN INCENTIVE OR DISINCENTIVE 1186 DISINCENTIVIZES, LONGER DURATION BATTERIES, WHICH IS COUNTER TO THE NEEDS OF THE GRID AND COUNTER TO WHAT IS BEST FOR ERCOT CONSUMERS.

UM, I WISH I HAD ALL THE FACTS TO HELP YOU MAKE THE RIGHT DECISION TODAY.

WE STILL DO NOT FULLY UNDERSTAND WHAT THE TRUE FAILURES ARE.

UM, I THINK THAT IN THE ERCOT PRESENTATION THAT'S COMING UP, THEY'RE GONNA SHOW SOME SLIDES AROUND NON-PERFORMANCE.

I HAVE QUESTIONS THERE, WHETHER THAT IS BASED ON THE BUSINESS PRACTICE MANUAL EXPECTATIONS OR THOSE IN 10 96 AND WHETHER THOSE ARE THE RESULT OF NUMEROUS FAILURES ACROSS THE FLEET OF STORAGE, UH, RESOURCES OR IS IT JUST THE RESULT OF A FEW BAD ACTORS, UM, AND WHERE THE IES IN THOSE INSTANCES ABLE TO MOVE THE ANCILLARY SERVICE TO AVOID A FAILURE TO PROVIDE.

I THINK THESE ARE ALL THINGS THAT NEED FURTHER STUDY.

UM, I'LL JUST CLOSE WITH, SOMEONE ASKED ME IN A MEETING YESTERDAY WHETHER I THOUGHT MORE TIME WOULD REALLY LEAD TO RESOLUTION, AND I TOLD THEM I ABSOLUTELY DO BECAUSE IN ALL THE MEETINGS I'VE HAD WITH ERCOT, INDIVIDUALS HAVE BEEN DEDICATED AND FOCUSED ON THE SAME OUTCOMES THAT WE WANT, WHICH IS RELIABILITY AND FAIRNESS.

I JUST DON'T THINK THAT WE'VE HAD THE TIME TO WORK THROUGH THIS VERY IMPORTANT ISSUE.

A LITTLE LONGER THAN YOU PROBABLY WANTED.

CAN I ANSWER QUESTIONS? I'M SORRY THAT WAS

[00:35:01]

WELL, STEPHANIE, THANK YOU FOR GOING THROUGH THAT.

DO WE HAVE QUESTIONS FOR STEPHANIE? WELL, I HAVE ONE I CAN LEAD OFF WITH WHY WE THINK OF THE OTHERS.

CAN YOU CLARIFY WHY 1186 PROVIDES THE DISINCENTIVE FOR LONGER DURATION BATTERIES? I DIDN'T QUITE FOLLOW THAT.

SURE.

UM, BECAUSE THE MORE NEGATIVE IMPACTS ARE FOR E C R S AND LONG SPENT, UH, NONS SPEND BECAUSE WE HAVE TO MAINTAIN SUCH A GREAT STATE OF CHARGE AND WE HAVE TO CHARGE AT THE TOP OF EVERY HOUR, UH, THAT ECONOMICALLY IS, IS DISINCENTIVIZED AND IT'S ALSO GONNA MAKE IT HARDER TO PARTICIPATE.

SO, YOU KNOW, BATTERIES ARE A BUSINESS, RIGHT? AND WE HAVE TO MAKE SURE THAT THEY CAN COMPETE IN THE MARKET.

UM, IF THOSE PRODUCTS, WHICH E C R S IN PARTICULAR IS IDEAL FOR A BATTERY TO PARTICIPATE, IF YOU'RE, AND YOU'RE ALSO REDUCING THE POTENTIAL OF PARTICIPATION BECAUSE OF THE HIGH STATE OF CHARGE REQUIREMENTS AT THE TOP OF THE HOUR, IF, UH, YOU DO THAT, BATTERIES ARE PULLING OUT OF THE MARKET AND BECAUSE OF THE WAY E C R UH, 1186 IS DESIGNED, IT'S MORE ADVANTAGEOUS TO BE A SHORT DURATION BATTERY THAN THE LONG DURATION THAT CAN DO E C R S AND NONS SPIND.

SO I THINK YOU'RE GONNA HAVE PEOPLE PUTTING MORE INVESTMENT THERE THAN WHAT YOU REALLY WANT.

DOES THAT? YEAH, SO SAYING BACK TO YOU.

SO FOR THE LONGER DURATION, WHEN YOU GET PAST THE TOP OF THE HOUR, THEY THEN HAVE TO SWITCH FROM DISCHARGING TO ACTUALLY CHARGING TO MEET THE REQUIREMENT AT THE TOP OF THE HOUR.

THAT'S SO WE HAVE THE WRONG EFFECT IN TERMS OF WHAT WE'RE TRYING TO DO TO THE RIGHT.

YOU'RE TAKING, UM, YOU'RE TAKING 'EM OUT OF DEPLOYMENT AND YOU'RE, AND INTO THIS, INTO DEMAND.

WE'RE SWITCHING FROM SUPPLY TO DEMAND.

THAT'S ACCURATE.

AND SO IT'S LIKE A DOUBLE WHAMMY ON YEAH, A TIGHT TIME.

I APPRECIATE YOUR PRESENTATION.

UH, QUESTIONS FOR BILL.

ONE OF THE THINGS YOU SUGGESTED IS THAT MORE TIME WOULD HELP GET THIS TO A, A BETTER OUTCOME.

AND DO YOU HAVE A FEEL FOR HOW MUCH TIME IT WOULD TAKE? UM, I'M BASING KIND OF OFF OF, UH, OF 10 96, WHICH WAS AN EIGHT MONTH PROCESS.

UM, WE'VE HAD TWO MONTHS OF VERY, VERY ACTIVE PARTICIPATION, SO POSSIBLY A BIT SHORTER THAN THAT.

UM, AND YOU'LL NOTE IN OUR COMMENTS, WE SUGGESTED THAT YOU BIFURCATE, UM, MY UNDERSTANDING IS ERCOT REALLY NEEDS TO MOVE FORWARD WITH CODING OF PARAMETERS.

AND SO MY SUGGESTION IS WE FIND A WAY TO ALLOW THAT TO HAPPEN ON A FASTER TIMEFRAME WHILE WE WORK THROUGH THESE LONGER LEAD ISSUES, WHICH I DO THINK WE'LL NEED, YOU KNOW, SIX MORE MONTHS, SAY THANK YOU.

UM, IN THE MATERIALS, THERE'S A RECOMMENDATION THAT THE SYSTEM CODING ISSUES FOR OPERATION BE SEPARATE FROM DEFINITION OR DETERMINATION OF STATE OF CHARGE PARAMETERS.

C CAN YOU COMMENT ON THAT? IS THAT POSSIBLE OR DO THEY HAVE TO BE INTERLINKED? I BELIEVE IT IS POSSIBLE.

UM, IF YOU BASICALLY SET THE VALUES TO NULL YOU, OR MAYBE NOT NULL, BUT YOU DON'T ASSIGN THE VARIABLES, BUT YOU DO INCLUDE THEM IN THE CODING INFRASTRUCTURE, I, I BELIEVE THAT WOULD WORK.

AND THEN WE CAN, YOU KNOW, EITHER IN THIS N P R OR ANOTHER ONE SET THE RIGHT VARIABLES AS WE WORK THROUGH THE REST OF THE PROCESS.

BUT SOMEONE FROM ERCOT WOULD PROBABLY HAVE TO CONFIRM THAT.

BUT THAT IS MY UNDERSTANDING.

GROSS.

ALL RIGHT, GOOD AFTERNOON.

IN, IN THE GRAPHS THAT YOU PRESENTED IN YOUR PRESENTATION, YOU HAD TWO EXAMPLES, RIGHT? THAT ONE, WHICH IS YOUR CHARGE, SORT OF MIDPOINT.

I THINK THIS IS O I THINK THAT WAS THE ONLY EXAMPLE I HAD, BUT IT WHAT IS THE BEHAVIOR? WELL, YOU HAVE TWO BEHAVIORS THERE.

ONE THAT DEPLETES ALL THE WAY DOWN AND ONE THAT HAS THE RAMP UP, RIGHT? THE RED ARROWS BEING ONE AND THE OTHER ONE BE DEPLETING THE, THE, THE BATTERY TO, TO ITS NODE.

SO WHAT, WHAT IS YOUR NORMAL OPERATING PARAMETER FOR THAT? DO YOU USUALLY DEPLETE IT ALL THE WAY OR HOW DO YOU WORK IT? WE DON'T USUALLY DEPLETE IT ALL THE WAY.

UM, BUT IF WE WERE IN A VERY TIGHT OPERATING PERIOD WHERE DEPLOYMENT WAS NEEDED, UM, BECAUSE, WELL, YOU HAVE SOME RESTRICTIONS UNDER 10 96, BUT YOU DON'T HAVE THAT HOUR, THE TOP OF THE HOUR CHARGING.

SO WE'RE TRYING TO ILLUSTRATE THAT CHANGE.

BUT YOU'RE NOT LOSING THE STRANDED CAPACITY IS OUR TERM, UM, AS YOU WOULD BE IN 1186.

DOES THAT ANSWER YOUR QUESTION? OKAY.

OTHER QUESTIONS FOR STEPHANIE? WELL, THANK YOU.

WE WILL GO TO THE ERCOT PRESENTATION.

WE'LL HAVE DAN DO THAT.

AND STEPHANIE, DON'T GO TOO FAR AWAY.

WE WILL BRING YOU BACK UP RIGHT AFTER DAN.

[5.1.2.1 ERCOT Comments on NPRR1186]

[00:40:10]

SO, UH, WE WANT TO FACILITATE BATTERIES, UH, PARTICIPATING IN THE MARKET.

WE'VE SEEN A ENORMOUS GROWTH IN THE NUMBER OF BATTERIES AND THERE'S A LOT MORE COMING.

AND SO JUST LIKE WITH LOTS OF OTHER NEW TECHNOLOGIES THAT WE'VE FOUND A WAY TO INTEGRATE OVER THE YEARS, WE WANT TO ENCOURAGE THAT.

AND WE ALSO WANNA MAKE SURE THAT WE CAN, UH, FACILITATE THEM PROVIDING ANCILLARY SERVICES PARTICIPATING IN THE MARKET IN A WAY THAT'S RELIABLE.

AND, AND THAT'S REALLY WHAT WE'RE TRYING TO CLARIFY IN 1186.

UM, I'M ACTUALLY GONNA SKIP THAT ONE.

UM, SO WE'VE GOT A LOT OF NEW BATTERIES.

UM, IN FACT AT THIS POINT FOR OUR REGULATION SERVICE AND OUR RESPONSIVE RESERVE SERVICE, BATTERIES ARE PROVIDING UP TO 60% OF THE TOTAL AMOUNT OF, OF THOSE SERVICES.

THE PROBLEM LIES IN THAT OUR EXISTING SYSTEMS, OUR RELIABILITY UNIT COMMITMENT ANALYSIS, OUR SECURITY CONSTRAINED ECONOMIC DISPATCH DO NOT APPROPRIATELY ACCOUNT FOR LIMITED STATED CHARGE RESOURCES.

THEY ASSUME A HUNDRED MEGAWATT RESOURCE CAN START AND RUN FOR A LONG PERIOD OF TIME.

AND SO A LOT OF WHAT WE'RE TRYING TO DO IN 1186 IS MAKE SURE THAT WE INCLUDE THAT LIMITATION, THAT LIMITED STATE OF CHARGE AND CONSIDER IT APPROPRIATELY IN THE DIFFERENT TOOLS TO THE, TO THE EXTENT WE CAN, UH, IN THIS INTERIM PERIOD THAT I'LL TALK ABOUT, UM, THE TIME ULTIMATELY, 1186 IS NOT THE SOLUTION.

R T C PLUS B IS THE SOLUTION WE'VE, WE'RE GONNA HAVE.

THERE'S STILL SOME ADDITIONAL, UH, MARKET RULE CHANGES THAT WE'RE GONNA HAVE TO PUT IN BEFORE WE ACTUALLY IMPLEMENT THAT TO MAKE SURE THAT INCORPORATES LIMITED STATE OF CHARGE.

BUT THAT PROJECT AS A WHOLE ISN'T GONNA BE IN PLACE UNTIL LATE 2026.

AND I THINK CANON'S GONNA TALK ABOUT THIS MORE LATER THIS AFTERNOON.

UM, BUT WE'VE GOT A LOT OF BATTERIES RIGHT NOW AND WE'RE RUNNING INTO ISSUES WITH THIS LIMITED STATE OF CHARGE TODAY.

AND SO WHAT ARE WE, WE NEED SOMETHING IN THE INTERIM.

AND SO N P R 1186 WAS DRAFTED AND LOTS OF STAKEHOLDERS DISCUSSION WENT ON TRYING TO COME UP WITH THE BEST SOLUTION THAT WE CAN PUT IN PLACE AS QUICKLY AS POSSIBLE THAT WILL MANAGE THESE ISSUES AS WELL AS WE CAN IN THIS INTERIM PERIOD, KNOWING THAT RTC PLUS B IS, IS THE ULTIMATE SOLUTION, THE SAME PEOPLE THAT ARE GONNA, AND THAT ARE GONNA HAVE TO, THAT ARE GONNA BE WORKING ON, UH, THE DESIGN OF R TC PLUS B ARE THE SAME PEOPLE THAT WILL BE WORKING ON 1186 AND FIGURING OUT WHAT THE RULES ARE AND SO FORTH.

AND SO WE DON'T WANT TO SLOW DOWN RTC PLUS B.

SO WHATEVER SOLUTION WE PUT IN PLACE FOR THE INTERIM HAS TO BE SOLVED WITH THE, UH, IN, IN KIND OF THE MOST EFFICIENT WAY WE CAN.

AND AT THIS POINT WE'RE, WE BELIEVE THAT WHAT IS IN 1186 CAN BE PUT IN PLACE, UH, BY THE SECOND QUARTER BASICALLY BEFORE NEXT SUMMER.

UM, UH, AND SO WE'VE STRATEGICALLY DESIGNED THESE CHANGES SO THAT THEY GET US AS MUCH VALUE AS WE CAN GET WITHIN THAT PERIOD WITHOUT DELAYING R T C PLUS B.

ONE OF THE, ONE OF THE ISSUES IS A RELIABILITY UNIT COMMITMENT DOESN'T CONSIDER, UH, STATE OF CHARGE.

UH, AND SO IF IT'S LOOKING AHEAD TO FUTURE HOURS AND THERE'S A HUNDRED MEGAWATT BATTERY, IT WILL COUNT THAT A HUNDRED MEGAWATT BATTERY AS BEING AVAILABLE TO SERVE LOAD IN ALL THOSE HOURS.

BUT IF WE ACTUALLY USE THE BATTERY, IT WOULDN'T LAST THAT LONG.

AND SO WE MAY NOT BRING ONLINE ADDITIONAL GENERATION TO SERVE THOSE FUTURE HOURS.

WE'RE, WE DON'T TAKE INTO ACCOUNT THAT THAT LIMITED STATE OF CHARGE.

AND WHAT YOU SEE ON THIS GRAPH HERE, ALL THE RED DOTS ARE BASICALLY TIMES WHERE WE ASSUME THE CURRENT RUCK TOOL ASSUMED THAT WE WERE GONNA HAVE THAT A HUNDRED MEGAWATTS, FOR EXAMPLE, FOR THAT FUTURE TIME PERIOD, BUT IT WOULD NOT HAVE BEEN AVAILABLE.

SO JUST IN APRIL, 2023.

THERE'S A LOT OF HOURS THAT THAT, THAT THAT'S TRUE OF, UM, IT'S IMPORTANT ANYTIME YOU BUY A PRODUCT OR SERVICE, IT'S REALLY IMPORTANT TO, FOR BOTH THE BUYER AND SELLER TO UNDERSTAND EXACTLY WHAT IT IS THAT THEY'RE BEING OBLIGATED TO DO SO THAT YOU'VE GOT AN AGREEMENT ON WHAT YOU'RE BUYING AND SELLING, RIGHT? AND SO, UM, WE PROCURE ANCILLARY SERVICES ON A HOURLY BASIS THROUGH THE DAY AHEAD MARKET.

AND THE, THE, UH, RESOURCE HAS TO HAVE SUFFICIENT CAPABILITY TO PROVIDE WHAT WE'RE BUYING.

[00:45:01]

UM, WE WANT TO MAKE SURE THAT THE, UH, THE RESOURCE CAN USE ITS PORTFOLIO TO MANAGE, UH, WHAT, WHAT WE, WHAT THEY'RE SELLING TO US.

UM, BUT ULTIMATELY WE HAVE TO HAVE A MEASURE THAT SAYS, THIS IS HOW WE'RE GONNA MEASURE WHETHER YOU ACTUALLY HAD MAINTAINED THE, IT'S NOT, IT'S NOT A SERVICE THAT WE'RE DEPLOYING ALL THE TIME.

AND SO HOW DO WE MAKE SURE THAT YOU'RE PROVI, YOU'RE MAINTAINING THE CAPABILITY TO PROVIDE THAT IF WE WERE TO CALL ON IT.

UH, AND SO THAT'S ONE OF THE, ONE OF THE OTHER THINGS THAT WE'RE ADDING INTO 1186 THAT WE'RE DEFINING, UH, WHAT WE'VE SEEN IS THAT WITHOUT, I MEAN, THERE'S BEEN QUESTIONS ABOUT WHY, WHY DO WE NEED THIS? WELL, UM, WHAT WE'VE LOOKED AT BASED ON JUST LOOKING AT THE FIRST 15 MINUTES OF THE HOUR DURING THE SUMMER MONTHS, WE'VE SEEN THAT THERE'S BEEN A SHORTAGE OF UP TO ON, ON AVERAGE, THERE'S BEEN A SHORTAGE OF, OF 500 MEGAWATT HOURS IN THE AMOUNT OF STATE OF CHARGE THAT THE BATTERIES THAT ARE PROVIDING, UH, UH, DIFFERENT, UH, ANCILLARY SERVICES ARE ACTUALLY PROVIDING.

NOW THIS IS BASED ON THE, THE CURRENT BUSINESS PRACTICE DOCUMENT WAY OF ANALYZING THAT, BUT BECAUSE WE'RE ONLY LOOKING AT THE FIRST 15 MINUTES, IT'S NOT THAT FAR OFF.

SO THERE'S DEFINITELY A SHORTAGE THERE AS FAR AS WHAT, WHAT'S BEING MAINTAINED UNDER THE CURRENT RULES.

UM, OUR, UM, THE OTHER THING THAT'S GOING ON IS THAT THE BATTERIES ARE OFFERING IN FOR CONSECUTIVE HOURS.

AND, AND WE'RE NOT SUGGESTING THAT THEY HAVE TO CHARGE AT THE BEGINNING OF THE NEXT HOUR IF THEY'RE PROVIDING SOMETHING IN THE NEXT HOUR, BUT THEY NEED TO MANAGE THEIR FLEET, MANAGE THEIR PORTFOLIO IN SUCH A WAY THAT THEY MEET THAT TWO HOUR OBLIGATION.

AND I THINK YOU HEARD WHILE AGO THAT REALLY A LOT OF THE ARGUMENT IS NOT ABOUT WHAT'S IN 1186, IT'S ABOUT N P R 10 96 THAT'S ALREADY BEEN APPROVED BY THE BOARD AND THE PC THAT, THAT IF YOU'RE SELLING E C R S, YOU'VE GOTTA HAVE THE CAPABILITY TO PROVIDE THOSE MEGAWATTS FOR TWO HOURS.

AND IF YOU'RE SELLING NONS SPIN, YOU HAVE TO HAVE THE ABILITY TO PROVIDE IT FOR FOUR HOURS.

AND SO THAT'S, UH, THERE'S, YOU KNOW, AT, AT SOME POINT MAYBE WHEN WE'RE IMPLEMENTING R T C, WE CAN REVISIT THAT, BUT FOR NOW THAT'S, THAT'S JUST BEEN APPROVED RECENTLY.

AND, AND THAT'S THE, THAT'S THE PART OF THAT DEFINITION OF THE PRODUCT THAT WE'RE BUYING AND THAT MARK BIMAN ARE OFFERING TO, TO PROVIDE.

UM, IT, LIKE I SAID, IT DOESN'T SAY THAT YOU'RE HAVING TO CHARGE IN THE BEGINNING OF THE NEXT HOUR, BUT YOU'VE GOTTA MAINTAIN THE CAPABILITY TO PROVIDE THE MEGAWATTS OVER THAT, UH, TWO HOUR OR FOUR HOUR TIME PERIOD.

THE ONLY BACK TO THE, SURE.

I MEAN, OKAY, ON THE SLIDE WHERE WITHIN THE FIRST 15 MINUTES OF OPERATION, YOU'RE NOT MEETING YOUR STATE OF CHARGE, IS, IS THERE ANY FEEDBACK TO THE E S R PROVIDER THAT THAT IS HAPPENING OR IN REAL TIME OR THIS IS A LOOK ONE TIME, LOOK BACK.

I MEAN, HOW DID, DO WE, HOW WAS THE LOOP CLOSED WITH THE E S R? SO, RIGHT, GO AHEAD.

IKA.

THIS IS NETIKA, MARGO FOR ERHART.

THERE IS NO REAL TIME FEEDBACK, BUT WE DO AFTER THE FACT ANALYSIS AND OUTREACH ALMOST ON A WEEKLY BASIS.

WEEKLY.

DAN, COULD YOU ALSO EXPLAIN, SO SAY A THERMAL UNIT IS PROVIDING THE SERVICE AND THEY TRIP AFTER 15 MINUTES OR 10 MINUTES, WHATEVER, WHAT HAPPENS TO THE, WHAT HAPPENS TO THAT SUPPLIER? SO, UH, IF, IF THERE'S TIME AND THEY HAVE A WHERE THEY CAN'T PROVIDE, WE'LL DO A SSM AND REPLACE THE CAPACITY, BUT GENERALLY THEY, THEY HAVE A, THAT, UH, THERE'S A, A, I GUESS YOU'D CALL IT A CLAWBACK FROM, UH, FOR, IF THEY DON'T PROVIDE, AREN'T ABLE TO PROVIDE THE ANCILLARY SERVICES, NOW THEY CAN MOVE IT AROUND WITHIN THEIR PORTFOLIO.

IF THEY, IF THEY, UH, IF THE PARTICULAR UNIT, AND I GUESS THAT'S SOMETHING I SHOULD DESCRIBE, YOU CAN MOVE THE, WHICH UNITS ARE PROVIDING THE ANCILLARY SERVICES AROUND IN YOUR PORTFOLIO, BUT IN, IN REAL TIME, YOU HAVE TO POINT TO A SPECIFIC RESOURCE AS BEING THE ONE THAT'S PROVIDING EACH ANCILLARY SERVICE.

AND SO, BUT THE BATTERY'S REQUIRED IF THEY'VE GOT A PORTFOLIO, THEY CAN MOVE IT AROUND IF YOU UNIT TRIPS, SORRY, THE ESR IS SUBJECT TO THAT SAME RULE AND REQUIREMENT AND RISK.

AND PORTFOLIO MANAGEMENT, THERE'S NO DIFFERENCE.

AND FOR THE RECORD, WHAT'S THE ACRONYM? SASSM STAND FOR SUPPLEMENTARY ANCILLARY SERVICE MARKET.

[00:50:01]

IT.

UM, YEAH, YEAH.

REAL QUICK.

SO I TRYING TO UNDERSTAND WHAT YOU JUST SAID.

RIGHT NOW, IF YOU ARE A GENERATOR AND YOU ARE PROVIDING AN ANCILLARY SERVICE, BUT THAT ONE GENERATOR COULDN'T, YOU COULD TRY TO USE THE REST OF YOUR PORTFOLIO TO DO IT.

A BATTERY COULD DO THE SAME THING.

BUT HOW WILL THEY DO THAT IF YOU'RE REQUIRING THEM TO SHOW THAT THEY HAVE TO HAVE MORE CHARGE? IT'S, IT'S, IT'S ALL A MATTER OF WHICH UNIT THEY'RE PERFORMING, UH, THEY'RE POINTING TO IN REAL TIME.

SO THEN WE'RE LOOKING AT KIND OF AT THAT POINT IN TIME TO HAVE THEY MAINTAINED ENOUGH FOR THE REST OF THAT HOUR.

ONLY BEING DEPLOYED FOR A SHORT PERIOD OF TIME, IT NEEDS TO BE MAINTAINED.

SO, SO, UM, IT WAS, AS WAS MENTIONED EARLIER, THERE IS ONE ISSUE THAT WE'VE RECOGNIZED THAT AIAN AND OTHERS HAVE POINTED OUT, THAT WE NEED TO, UM, UM, UM, WE WANNA MAKE SURE IF WE GET INTO SCARCITY CONDITION, SO NOT OTHER TIMES, OTHER TIMES PEOPLE NEED TO MANAGE THEIR PORTFOLIO TO MAKE SURE THAT WE, THE, THE RESOURCES THAT WE'RE COUNTING AS BEING IN RESERVE CAN ACTUALLY BE HELD IN RESERVE.

BUT IF WE GET INTO SCARCITY CONDITIONS, WE DON'T WANT THEM HAVING TO USE RESOURCES AT THE BEGINNING OF THE HOUR EITHER TO MOVE THEM OR EVERYTHING.

BECAUSE AT THAT POINT, IF WE'RE IN SCARCITY, ALL THOSE OTHER RESOURCES ARE BEING USED TO SERVE ENERGY.

AND SO THERE'S REALLY NOTHING TO MOVE IT TO.

AND SO WE DON'T WANT TO CREATE A COMPLIANCE OBLIGATION ON THEM FOR, AND CAUSE THEM TO POTENTIALLY DO SOMETHING THAT WOULD BE BAD FOR LIABILITY.

AND SO BASICALLY THE IDEA IS WE WANT TO BE ABLE TO DRAW, IF WE'RE IN AT A POINT THAT WE ARE DEPLOYING OUR RESERVES AND TRYING TO USE AS MANY, UH, ALL THE RESERVES THAT ARE AVAILABLE TO, TO STAY OUT OF LOAD SHED OR RESERVE THE RELIABILITY OF THE SYSTEM, WE DON'T WANT, WE WANNA BE ABLE TO GET TO ALL THAT ENERGY.

AND SO, UM, THERE IS ONE ISSUE WITH HOW 1186 IS WORDED RIGHT NOW.

THAT'S VERY LI AND SO WHAT WE WOULD PROPOSE IS THAT ASK THE BOARD TO REMAND THIS BACK TOT TO SOLVE THIS ONE LIMITED ISSUE.

ALL THE OTHER ISSUES HAVE KIND OF ALREADY BEEN DISCUSSED AS, UH, BILL BARNES DESCRIBED, T HAS VOTED TO ENDORSE THIS AS IS, BUT WE HAVE SEEN THIS ONE KIND OF LIMITED ISSUE THAT WE'D LIKE TO, TO WORK ON.

AND SO WE THINK THAT WE CAN DO THAT AS LONG AND WITHOUT DELAYING R T C PLUS B, IF ITHACA AND OTHER FOLKS ARE LIMITED IN THE TIME THAT THEY HAVE TO WORK ON THIS, WE'RE NOT TALKING ABOUT EVERYTHING ELSE.

WE'RE JUST TALKING ABOUT THIS ONE THING THAT, THAT WILL ALLOW THEM TO CONTINUE ON AND WORK ON R T C AND NOT SPEND A LOT OF TIME ON THIS, BUT IT WILL ALLOW US TO SOLVE THIS ONE RELIABILITY PROBLEM.

UM, AND SO I THINK THAT'S WHAT WE'RE, WE'RE PROPOSING AT THIS POINT.

UM, KIND OF REITERATED EVERYTHING HERE ON THIS SLIDE THAT, UM, WE'VE ALREADY TALKED ABOUT, BUT ULTIMATELY THAT'S, THAT'S WHAT WE WOULD PROPOSE IS A REMAND ON THIS PARTICULAR ISSUE.

UM, BUT ONLY THAT KIND OF LIMITED SCOPE OF THAT ISSUE.

SO DAN, WE'LL GO TO CARLOS FOR QUESTIONS.

AND I OPEN UP FOR THE COMMISSIONER'S AS WELL.

I'D LOVE TO HEAR THE COMMISSIONER'S VIEWPOINT ON THIS AS WELL.

SO CARLOS, YOU CAN GO FIRST, MAYBE SECOND.

UM, DAN, CAN YOU ADDRESS STEPHANIE'S POINTS ABOUT THIS FAVORING SHORTER DURATION BATTERIES AND, UH, THIS OTHER ASPECT ABOUT NON-USED OR STANDARD CAPACITY? YEAH, SO ON THE, ON THE FIRST ONE, I THINK ACTUALLY THE, UH, THE TWO HOUR AND FOUR HOUR DURATION, UH, OF ASPECT OF THOSE PRODUCTS IS GONNA TEND TO MORE ENCOURAGE, UH, THE DEVELOPMENT OF MATCHING RESOURCES RATHER THAN THAT, THAT, YOU KNOW, FOUR HOUR BATTERIES TO BID INTO NONS SPIND, UH, TWO HOUR BATTERIES TO BID INTO E C R S JUST IN, IN GENERAL.

UH, SO I THINK IT'S REALLY THE OPPOSITE THAT IT WOULD ENCOURAGE MORE LONGER, UH, DURATION BATTERIES.

AND I, WHAT WAS THE SECOND QUESTION? I'M SORRY.

YEAH, ABOUT USING SORT OF HALF THE CAPACITY 'CAUSE YOU HAVE TO GO BACK AND CHARGE.

OH, RIGHT.

SO IN, IN GENERAL, WE WANNA MAIN, WE'RE WE'RE BUYING RESERVES.

AND SO TO PROVIDE THAT RESERVE, WE NEED TO MAINTAIN SOME AMOUNT OF ENERGY IN THE TANK SO AS TO BE ABLE TO PROVIDE THE RESERVE OVER TWO HOURS IF IT'S E C R S OR FOUR HOURS, IF IT'S IT'S NONS SPEND.

AND SO IN TIME PERIODS THAT WE'RE NOT DEPLOYING, UH, THE, THOSE PRODUCTS, UM, THAT ENERGY NEEDS TO BE MAINTAINED.

AND IF IT'S

[00:55:01]

AND THAT'S REALLY WHAT WE'RE TRYING TO DEFINE, UH, DEFINE BY DEFINING WHAT THE COMPLIANCE OBLIGATIONS AROUND THAT.

BUT WHEN WE GET INTO SCARCITY CONDITIONS, AND THIS IS THE OTHER ISSUE, WE WANNA BE ABLE TO DRAIN IT COMPLETELY DURING THOSE TIMES SO THAT WE'RE REALLY OUT AND THERE'S NOTHING ELSE THAT CAN BE USED TO, TO, WE'RE, WE'RE NOT AT THAT POINT MAINTAINING OUR RESERVES, WE'RE DEPLOYING, WE'RE RELEASING THEM IN ORDER TO, TO, TO MAINTAIN RELIABILITY.

WELL, THANK YOU MR. CHAIRMAN, AND THIS, THIS IS GREAT SEGUE INTO MY QUESTION.

IT'S JUST A TECHNICAL QUESTION, DAN.

IN ORDER TO, WHEN YOU REMAND BACK TO T AND AS YOU CONSIDER HOW TO FREE UP THESE ELECTRONS IN SCARCITY CONDITIONS, UH, SOME HAVE ASSERTED THE HYPOTHETICAL WELL, UH, REQUIRING US TO HOLD THIS, THIS MUCH ENERGY, UH, IN THE ANCILLARY ON A CONTRACTED BASIS, AND THEN TO, UH, FIRM THEIR THEIR BID UP FOR THE NEXT HOUR, YOU MAY BE INDUCING A SCARCITY UH, CONDITION.

SO IN YOUR VIEW, WHAT IS THE DEFINITION OF SCARCITY? IS IT AN E E A EVENT, UM, WHEN, WHEN WE WOULD WANT ALL THOSE, UH, ELECTRONS TO BE FREED? OR IS IT BEFORE THAT FROM AN OPERATIONAL PERSPECTIVE, WHAT ARE, WHAT, WHAT ARE YOUR TARGET THERE? YEAH, SO I I I THINK IT'S SOMETHING CLOSE TO BEING IN AN EEA, BUT WE DON'T, WE, WE'D LIKE TO TALK TO STAKEHOLDERS ABOUT EXACTLY WHAT THAT LOOKS LIKE.

I MEAN, CONCEPTUALLY IT'S WHEN WE'RE OUT OF OTHER RESOURCES AND THERE'S NOTHING ELSE THAT THEY SHOULD BE USING EVERYTHING ELSE IN THEIR PORTFOLIO TO PROVIDE ENERGY.

AND SO THERE'S NOTHING THEY COULD MOVE THAT TO, TO GO BACK UP IN THE NEXT HOUR.

UH, THANKS BOB.

UH, DAN ONE IN, UH, I THINK IT WAS IN BILL'S PRESENTATION, THERE WAS, UM, A STATEMENT THAT SAID THE E ESOP E S R OPERATORS HAVE A DIVERSITY OF OPINION ON THIS ISSUE.

WHAT, WHAT'S THE RATIO OF PEOPLE OF E S R OPERATORS THAT ARE IN FAVOR VERSUS E SS R OPERATORS THAT ARE NOT IN FAVOR AS CURRENTLY WRITTEN? I, I HATE TO REPRESENT WHAT MAYBE THAT BILL MIGHT KNOW.

I THINK IT SEEMS LIKE THERE'S MAYBE THREE OR FOUR THAT ARE AGAINST IT AND THE REST ARE, ARE FOUR.

BUT THAT'S KIND OF A GUESS ON MY PART.

THANK ANY OTHER COMMISSIONERS.

MAYBE IN A MINUTE WE'LL HAVE BILL COME BACK UP AND ASK THAT QUESTION.

WANT TO COMMENT? I I HAVE A FEW QUESTIONS.

GO AHEAD, LORI.

PARDON ME.

UM, DAN, SO THERE'S BEEN A LOT OF DISCUSSIONS ON THIS ISSUE AND I'M, I'M KIND OF BEEN SORT OF JUST FOLLOWING FROM BEHIND AND BOTH AT TAC AND, AND ELSEWHERE.

UM, AND I'M JUST TRYING TO UNDERSTAND, SO, OKAY, SO THERE'S SHORT DURATION, LONG DURATION BATTERIES IN, IN ERCOT MIND, WHAT IS SHORT DURATION AND WHAT IS LONG DURATION? WELL, SO, UM, ANY BATTERY CAN SPREAD OUT HOW LONG IT WANTS TO PROVIDE A ONE HOUR BATTERY CAN, IF IT DISCHARGES SLOWLY, CAN PROVIDE ENERGY OVER MULTIPLE HOURS, RIGHT? UM, REALLY THE, THE DISTINCTION IS HOW MUCH INVERTER CAPACITY THAT DO YOU USE RELATIVE TO THE, THE AMOUNT OF ENERGY IN THE TANK.

AND, UH, I'LL STEAL WOODY'S ANALOGY HERE.

IT'S, IT'S LIKE YOU'VE GOT A, A, A, UH, A BUCKET THAT HAS A TAP ON IT.

AND SO HOW BIG IS THE TAP RATHER THAN TO THE SIZE OF THE BUCKET? AND SO IF YOU CAN ONLY LET OUT, UH, IF YOU'VE GOT A HUNDRED MEGAWATT HOUR BATTERY, BUT THE TAP HAS ONLY GOT 20 MEGAWATTS THAT CAN COME OUT AT ANY POINT IN TIME, THEN THAT WILL BE A FIVE HOUR BATTERY.

OR IF IT'S 25 MEGAWATTS THAT CAN COME OUT THE TAP, IT WOULD BE A FOUR HOUR BATTERY.

UM, AND SO, YOU KNOW, AND I'M NOT SURE THAT THERE, IT'S KINDA LIKE WE NEED, WE, WE WE'RE PROBABLY GOING EVENTUALLY NEED A A A, UH, UM, AS WE GET MORE AND MORE BATTERIES, A MIX WOULD BE GOOD WHEN THEY'RE PROVIDING ANCILLARY SERVICES THAT WE, THAT THEY'RE PROVIDING SO FAR WITH REGULATION AND, AND RESPONSIVE ONE HOUR BATTERY IS, YOU KNOW, WHERE YOU'VE GOT A HUNDRED MEGAWATT HOURS AND YOU CAN PUT OUT A HUNDRED MEGAWATTS AT EVERY POINT DURING THAT HOUR.

I THINK THAT'S A LOT OF WHAT IS BEING, UH, DEVELOPED NOW.

SO RIGHT NOW, BATTERY PARTICIPATION IN ERCOT ANCILLARY SERVICES, PRIMARILY IN RE R R S AND REGULATION SERVICE YES.

AND E C R S SINCE, UM, SINCE E C R S WENT LIVE ON JUNE 10TH, WHAT, WHAT WOULD YOU SAY ON AVERAGE THE E C R S PARTICIPATION LEVEL IS? SO IT, IT'S ACTUALLY IN MY, UH, OPERATIONS REPORT TO THE BOARD AND I DIDN'T BRING IT UP HERE WITH ME.

BUT OKAY.

WOULD YOU SAY MINIMAL 30% OR SOMETHING LIKE THAT? 30%.

[01:00:01]

UM, SO YOUR CONCERN IS, YOUR CONCERN IS THAT THERE'S ABOUT 9,500 MEGAWATTS OF BATTERIES IN THE QUEUE WITH SIGNED INTERCONNECTION AGREEMENTS, SCREENING STUDIES COMPLETED, AND FINANCIAL CER SECURITY POSTED, AND YOU'RE TRYING TO PREPARE AND MAKE SURE YOUR ANCILLARY SERVICE REQUIREMENTS ARE GONNA LINE UP WITH AN INFLOW OF BATTERIES.

IS THAT WHAT I'M HEARING? I, I THINK, I THINK A, AS BATTERIES ARE PROVIDING THOSE ANCILLARY SERVICES, WE WANNA MAKE SURE THAT THAT WHAT THEY'RE PROVIDING IS WHAT WE ARE PAYING FOR, UH, WHAT AND HAS THE CHARACTERISTICS AND EVERYBODY'S IN AGREEMENT UNDERSTANDS WHAT THOSE CHARACTERISTICS ARE THAT WE NEED FOR RELIABILITY.

'CAUSE THAT'S THE ONLY REASON WE'RE BUYING THOSE ANCILLARY SERVICES IS FOR RELIABILITY.

RIGHT? SO THERE'S BEEN AN INSERTION THAT THE BATTERIES ARE NOT LIVING UP TO THE EXPECTATIONS.

AND I DON'T KNOW, IS THAT AN E C R S IS, HAVE THERE BEEN COMPLI NON-COMPLIANCE ISSUES UNDER THE, UH, BUSINESS PRACTICE DOCUMENT THAT WE PROMULGATED, UH, IN, IN RESPONSE TO QUESTIONS? HOW, HOW ARE WE, ARE YOU GONNA MEASURE THIS? THERE HAVE BEEN FOLKS THAT ARE, ARE NOT, UH, ME LIVING UP TO THAT WHAT'S IN THAT BUSINESS PRACTICE DOCUMENT IN TERMS OF MAINTAINING STATE OF CHARGE TO PROVIDE THE ANCILLARY SERVICES THEY'RE PROVIDING.

AND THE BUSINESS PRACTICE MANUAL IS CONSISTENT WITH 10 96 AND P R 10 96 THAT WAS PASSED.

IS THAT OR CAUSE INTERPRETATION? YES, BUT WHAT WE'RE TRYING TO DO WITH 1186 IS ACTUALLY PUT THAT INTO THE PROTOCOLS.

SO IT'S, IT'S CLEAR.

SO THAT, OKAY, SO WE HAD MP PROTOCOLS THAT WERE AMENDED OR CREATED.

YOU HAD, I DON'T REMEMBER EXACTLY WHAT, 10 96, WHETHER THAT WAS AMENDING PROTOCOLS OR ADDING NEW PROTOCOLS, BUT ESSENTIALLY 10 96, UM, RESULTED IN PROTOCOL LANGUAGE THAT ADDRESSED BATTERIES AND UM, AND, AND ALLOWED THEM TO KIND OF, THERE WAS SOME UNDERLYING INFORMATION OR SOME OF IT WAS UNANNOUNCED TESTING.

UM, AND THEN THE BUSINESS PRACTICE MANUAL GOES A LITTLE, YOU'RE SAYING WE'RE GONNA NEED ADDITIONAL PROTOCOL CHANGES.

AND THEN 1186 TO CAPTURE WHAT'S IN THE BUSINESS PRACTICE MANUAL.

SO, SO 10 96 WAS THE ONE THAT SAID, REGARDLESS OF WHO'S PROVIDING IT, A, IF YOU'RE PROVIDING E C R S, YOU HAVE TO BE ABLE TO MAINTAIN THAT, THAT OUTPUT FOR TWO HOURS.

AND FOR NONS SPEND FOUR HOURS.

THE BUSINESS PRACTICE DOCUMENT WAS, WELL, HOW ARE YOU GONNA MEASURE THAT? THERE WAS QUESTIONS ABOUT HOW ARE YOU GONNA MEASURE YOUR CAPABILITY TO DO THAT? WE PUT THAT OUT.

AND THEN, UH, THERE WERE QUESTIONS ABOUT, WELL, IS IS A BUSINESS PRACTICE DOCUMENT BINDING OR NOT? AND, UH, THAT'S OPENED INTERPRETATION AT THIS POINT, BUT THE, UH, THE 1186 IS KIND OF THE SOLUTION.

'CAUSE THEN, THEN HOW WE'RE GONNA MEASURE IT IS IN THE PROTOCOLS.

AND CLEARLY, UH, UH, YOU KNOW, WE WILL, IF, IF APPROVED BY THE COMMISSION WILL BE LAW AT THAT POINT.

SO, SO CURRENTLY, AS YOU HAD EXPLAINED, IF A RESOURCE THAT'S PROVIDED ANCILLARY SERVICES FAILS TO MEET THEIR AWARDED ANCILLARY SERVICE OBLIGATION, UM, THAT RESOURCE OR OR Q S C WOULD HAVE TO REPLACE THE POWER, I GUESS, THROUGH A SSM OR BE SUBJECT TO POTENTIAL ENFORCEMENT PENALTIES OR, OR CAN MOVE IT WITHIN THEIR PORTFOLIO.

I MEAN, IF A PARTICULAR RESOURCE THEY'RE POINTING TO DOESN'T HAVE THE CAPABILITY OF DOING IT, THEY CAN MOVE IT.

AND SO 10 96 HAS A COMPONENT TO IT THAT'S UNANNOUNCED TESTING.

WHAT, WHAT, WHAT HAPPENS IN THAT UNANNOUNCED TESTING? I MEAN, WHAT ARE YOU CHECKING FOR? I'M GONNA HAVE TO PHONE A FRIEND ON THIS ONE.

SO 10 96 ADDED LANGUAGE, WHICH SAID IF, UH, WHEN WE, IN REAL TIME WE SEE BATTERIES PROVIDING E C R S OR NON SPEN, WE ARE ABLE TO CALL ON, UH, TO VALIDATE THAT THEY ARE ABLE TO MEET THE FOUR R AND TWO R UH, DURATION REQUIREMENTS OF THE SERVICE THAT THEY ARE PROVIDING AT THE TIME.

SO 1186 WANTS MORE THAN THAT, IS THAT WHAT I'M SAYING? HEARING THE STATE OF CHARGE SHOWING.

WANTED TO TRY TO SEND THE SIGNAL IN OUR E C R S PRODUCT, UM, THROUGH A TWO HOUR DURATION REQUIREMENT, UM, TO ENCOURAGE, UM, RESOURCES, FLEXIBLE RESOURCES FOR THE OPERATIONAL FLEXIBILITY AND RELIABILITY THAT WE'RE GONNA NEED IN THE VERY IMMEDIATE FUTURE.

UM, OKAY.

I WAS JUST TRYING TO JUST UNDERSTAND SOME OF THESE SORT OF MECHANICS AND DATA UNDERLYING, I GUESS, ERCOT CONCERN.

'CAUSE IT SOUNDS LIKE NOT THAT MUCH E C R S OR I'M SORRY, BATTERIES ARE OR AN E C R S I KNOW THAT WE HAD DISCUSSIONS AT THE BEGINNING, I BELIEVE 21, 22, IN OUR FIRST ROUND OF MARKET REFORM DISCUSSIONS, WHERE WE WERE REALLY TRYING TO ENCOURAGE, UM, BATTERIES AND SOLAR TO SHOW UP TOGETHER.

UM, AS WE KNEW A LOT OF SOLAR WAS COMING ONTO THE SYSTEM IN THE COMING YEARS.

AND AS, AS YOU CAN SEE IN THE INTERCONNECTION QUEUE, THERE IS, YOU KNOW, 23,945 MEGAWATTS WITH THAT HAVE SIGNED INTERCONNECTION AGREEMENTS, SCREEN STUDIES, FINANCIAL SECURITY.

SO THERE'S A LOT COMING MM-HMM.

AND WE

[01:05:01]

AND THAT MEANT, UM, YOU KNOW, WHAT ARE OPERATIONAL, FLEXIBLE RESOURCES, QUICK STARTS, BATTERIES SA SOLAR WITH BATTERIES.

SO THAT IS SOMETHING THAT WE HAD, UM, SENT THE SIGNAL ON DURING OUR DISCUSSIONS, MARKET REFORM DISCUSSIONS, THE INITIAL ONES.

AND, AND REALLY, I, JUST TO KIND OF TAKE A STEP BACK, AND I KNOW THAT YOU GUYS ARE GONNA REMAND THE N P R BACK TO TAC, BUT, UM, AS I WAS SORT OF THINKING THROUGH THIS, N P R R IN GENERAL, I MEAN, WE JUST WENT THROUGH A, I MEAN, WE'RE STILL IN THE MIDDLE OF A VERY HOT SUMMER WHERE WE'VE NEEDED EVERY MEGAWATT, UM, THAT WE HAD TO, UM, TO MEET THE MUCH HIGHER ELECTRICITY DEMAND THAT, UM, WE'VE EXPERIENCED THIS SUMMER, BROKEN MULTIPLE RECORDS.

UM, I MEAN, WE'VE GOT SIGNIFICANTLY INCREASING, UM, DEMAND BECAUSE OF ECONOMIC POPULATION GROWTH, EXTREME WEATHER CONDITIONS IS, AND, UM, YOU KNOW, IT SEEMS LIKE THERE'S A LOT OF FOCUS ON, UM, YOU KNOW, USING THE BATTERIES TO, UM, DURING SCARCITY TO PREVENT EMERGENCY CONDITIONS.

BUT AS COMMISSIONER MCADAMS WAS HIGHLIGHTING, I THINK IN THE DISCUSSIONS WHEN YOU GO BACK, CAN, YOU KNOW, ANALYZING WHETHER OR NOT THE STATE OF CHARGE POLICY IS CURRENTLY WRITTEN WOULD RESULT IN PRODUCING SCARCITY, UM, AND PUTTING US INTO EMERGENCY EVENTS.

'CAUSE THE WHOLE GOAL HERE IS TO STAY OUTTA EMERGENCY EVENTS, NOT TO THAT'S, YOU KNOW, USE THE MEGAWATTS WHEN WE'RE ALREADY IN EMERGENCY.

SO REALLY TRYING TO MAKE SURE THAT WE'RE NOT 1186 DOESN'T PUT A STATE OF CHARGE POLICY IN PLACE THAT PUSHES US INTO SCARCITY RATHER THAN, YOU KNOW, UM, IS ONLY THERE WHEN, YOU KNOW, YOU, YOU'RE ONLY ADDRESSING THAT LIMITED ISSUE, UM, WHEN SCARCITY IS, IS THERE, BECAUSE ULTIMATELY IT JUST SEEMS THAT, UM, WE'RE GONNA NEED A LOT OF OPERATIONAL RELIABILITY.

RELIABILITY, AND WE'RE GONNA HAVE A LOT OF SOLAR ON THE SYSTEM, AND THAT DUCK CURVE IS GONNA TURN INTO A CANYON, AND WE'RE GONNA HAVE TO FILL THAT CANYON WITH QUICK STARTS AND BATTERIES.

AND RIGHT NOW, AS I'M LOOKING AT THE INTERCONNECTION QUEUE, WE HAVE, YOU KNOW, NEARLY 9,500 MEGAWATTS IN THE AIR INTERCONNECTION QUEUE OF BATTERIES.

UM, AND WE HAVE 1600, ABOUT 1600 MEGAWATTS OF GAS IN THE INTERCONNECTION QUEUE.

BUT AS WE'VE SEEN THIS SUMMER, I MEAN, OUR ELECTRICITY DEMAND IS JUST EXPLODING, AND WE NEED RESOURCES NOW SOONER RATHER THAN, I MEAN NOW TO MEET, UM, THIS HIGHER ELECTRICITY DEMAND.

AND I, I'M JUST CONCERNED THAT IF Y YOU KNOW, MY CONCERN IS THAT WE'RE NOT, THAT, THAT WE LOOK AT THIS, MY GOAL IS TO LOOK AT THIS HOLISTICALLY SO THAT WE ENSURE WE HAVE THE OPERATIONAL FLEXIBILITY WE'RE GONNA NEED, LIKE NOW, UM, TO, TO MAINTAIN OPERATIONAL LIABILITY.

AND, UM, I KNOW THAT RIGHT NOW THERE'S ALL THE BATTERIES THAT PARTICIPATE ARE SHORTER DURATION, AND WE WANNA MAKE SURE THAT WE'RE ALSO SENDING THE SIGNALS FOR, UM, INNOVATION AND INVESTMENT IN LONGER DURATION BATTERIES, BECAUSE THOSE ARE THE ONES THAT WE'RE GONNA NEED FOR THAT WIDER DUCK CURVE, THAT WIDER CANYON.

AND SO, UM, AS YOU GO BACK AND EVALUATE THOSE ISSUES, I THINK JUST BROADLY LOOKING AT, UM, MORE HOLISTICALLY LOOKING AT WHAT ARE, WHAT ARE THE UNINTENDED CONSEQUENCES AND WHAT DO WE NEED NOW ON OUR SYSTEM? AND, UM, AND GOING FROM THERE.

SO, SO I GUESS ONE OF THE THINGS THAT LIKE TO MAYBE DESCRIBE IS WHEN WE, I MEAN, THE REASON WE'RE BUYING E C R S IS TO COVER THINGS LIKE LOAD FORECAST ERROR, WIND, SOLAR FORECAST ERRORS, UH, RAMPING CAPABILITY.

WHAT IF A UNIT TRIPS? AND THE NEXT RESOURCE THAT WE, THAT CAN BE STARTED IS MULTIPLE HOURS AWAY BECAUSE, SO WE DEPLOY UNIT TRIPS.

WE DEPLOY RESPONSIVE RESERVE, RESPONSIVE RESERVE, UM, UH, WE NEED TO RECOVER THAT, THAT RESERVE.

AND SO WE USE E C R S TO, TO, TO, TO THEN REPLACE IT, REPLACE THE CAPACITY THAT WAS LOST DUE TO THE UNIT TRIP SO THAT WE HAVE OUR RESERVES BACK.

IF THAT ONLY LASTS FOR TWO HOURS, E C R S ONLY LASTS FOR TWO HOURS.

AND THAT NEXT UNIT THAT CAN START UP TO REPLACE THE ONE THAT, THAT, THAT TRIPPED IS 6, 8, 10 HOURS AWAY, WHICH SOMETIMES THAT HAPPENS.

THEN WE HAVE THE, THE E C R S IS GONE AFTER A COUPLE HOURS, WE CAN DEPLOY THE NONS SPEND AND WE CARRY IT OUT FOR FOUR MORE HOURS, SO AT LEAST WE'RE COVERED IN RESPONSE TO

[01:10:01]

A UNIT TRIP FOR SIX HOURS.

AND SO THAT WAS REALLY THE, THE, THE, AS WE WERE IN, YOU KNOW, AND I, FOLKS LIKE THAT WERE TALKING ABOUT, OKAY, WHAT'S THE RIGHT TIMEFRAME FOR, UH, E C R S AND NONS SPEND? THAT WAS REALLY THE LOGIC.

SOMETIMES SIX HOURS ISN'T GONNA BE ENOUGH.

UH, BUT AT LEAST IT, IT WAS A GOOD COMPROMISE THAT WOULD ALLOW US TO COVER THOSE LONGER, UH, DURATION COMMITMENTS.

UM, AND THEN THE, THE SECOND THING IS, IS WHEN, ON THESE SCARCE DAYS WHEN WE'RE RELEASING THE E C R S, SO IT CAN BE USED TO AND NON SPEN, SO IT CAN BE USED TO, TO SERVE ENERGY.

WE'RE NOT REALLY BUYING THAT FOR THOSE KIND OF CONDITIONS.

WE'RE BUYING IT FOR THE THINGS I MENTIONED.

UH, UH, LOAD, FORECAST UNCERTAINTY, WIND FORECAST, UNCERTAINTY, UNIT TRIPS, THOSE KIND OF THINGS.

THAT'S WHY WE KEEP IT IN RESERVE MM-HMM.

BUT IF WE GET INTO REALLY TIGHT CONDITIONS TO THE POINT THAT WE'RE RUNNING OUT, THEN AT SOME POINT, YOU, YOU STOP KEEPING YOUR RESERVES IN RESERVE AND ALLOW THEM TO BE USED TO SERVE ENERGY SO THAT YOU DON'T GET FURTHER INTO SCARCITY.

AND SO THAT'S REALLY WHAT'S GOING ON ON THESE DAYS, UH, IN THE LAST WEEK OR SO THAT WE'VE, OR A COUPLE WEEKS THAT WE'VE RELEASED E C R S IS, WE'RE KEEPING IT FOR ALL THOSE UNCERTAINTIES AND, AND TO RESPOND TO UNIT TRIPS AND SO FORTH.

BUT AT SOME POINT WHEN YOU GET TIGHT, YOU NEED TO START RELEASING THAT STUFF.

AND IN FACT, THAT IF YOU GO A LITTLE FURTHER, IF YOU GET INTO MORE IN SCARCITY, WE START RELEASING OUR RESPONSIVE RESERVE AS WELL.

AND THEN ULTIMATELY, YOU KNOW, COULD BE TO THE POINT WE'VE RELEASED ALL THE RESERVE AND THEN WE DON'T, YOU KNOW, THAT'S WHEN WE GO INTO EEA, I GUESS JUST SHOWING SOME OF THE DATA, FIND THIS, BUT ISN'T THE ISSUE HERE THAT WE THINK WE'RE BUYING TWO HOURS OR FOUR HOURS OF RESERVE? THERE YOU GO.

AND THAT'S WHAT WE'VE CONTRACTED FOR BY BASICALLY PAYING THESE GUYS FOR E C R S OR NONS SPIN.

AND THEY HAVE, THEY'RE NOT PROVIDING IT AND WE DON'T HAVE ANY WAY OF ENSURING THEY'RE PROVIDING IT.

SO WHAT YOU'RE TRYING TO DO IS PUT IN PLACE A MECHANISM TO ENSURE THAT IF YOU BUY TWO HOURS, YOU GET TWO HOURS.

IS IS THAT NOT SORT OF THE ESSENCE OF THIS? YES, BECAUSE BECAUSE WE DON'T DEPLOY IT ALL THE TIME.

SO YOU CAN'T, THE SAME WITH THE THERMAL, RIGHT? WE ALWAYS THINK WE'RE BUYING TWO HOURS FROM THERMAL OR FOUR HOURS FROM THERMAL, AND THEY DON'T ALWAYS DELIVER.

IT'S THE SAME THING.

AND I CAN SEE SOME OF THE ISSUE TOO, THAT THE BATTERY, IS IT POSSIBLE THAT THEY'RE DISPATCHING DURING THESE HIGH PRICE PERIODS FOR ENERGY AND THEN SUDDENLY WE NEED THEM FOR E C R S AND THEY'RE A LITTLE BIT LOW, SO NOW THEY NEED TO WEAR THAT RISK.

I MEAN THAT'S, YEAH, I THINK, I GUESS, I GUESS TO DIRECTOR SWAINSTON'S POINT, I, I MEAN THERE'S VERY LITTLE THAT'S PARTICIPATING IN E C R S.

SO ARE IS THE NON-COMPLIANCE AND R R S, LIKE WHERE IS THE NON-COMPLIANCE? I THOUGHT IT WAS LIKE 40%.

YEAH, IT, UM, I'M NOT SURE WHERE I, I THINK IT'S IN YOUR APPENDIX.

IT IS, IT IS IN, I GUESS ONE OF THE EXAMPLES.

LET'S GO TO THE, OOPS.

SO HERE, HERE IS AN EXAMPLE OF WHERE, UH, IF YOU, IF YOU CALCULATE WHAT THE, WHAT THEIR, HOW MUCH STATE OF CHARGE THEY WOULD HAVE TO HAVE, HOW MUCH THEY WOULD HAVE TO MAINTAIN, UH, TO MEET THEIR REG UP AND THEIR RESPONSIVE RESERVE REQUIREMENT, UH, IT WOULD FOLLOW THE, UH, THE RED SOLID LINE.

UH, WHAT THEY ACTUALLY MAINTAINED, UH, THEY WERE, UH, WAS THE GREEN LINE.

SO AS YOU CAN SEE, IS YOU START THAT GRAY HOUR, UH, THEY WERE SIGNIFICANTLY LESS THAN WHAT THEY WERE SUPPOSED TO MAINTAIN.

AND IN FACT, IF YOU LOOK AT THE BOTTOM THEN TERM THE CHEATING.

IN THE LIMITED TIME, KNOWING THAT ULTIMATELY WHAT WE WANT TO GET IMPLEMENTED IS THE R T C PLUS B.

IF YOU LOOK AT THE BOTTOM, THEN THE, UH, IT SHOWS THE BLUE LINE IS HOW MUCH THEY WERE OUTPUTTING.

AND THE BLACK LINE IS WHAT SCED WAS TELLING THEM TO MEET YOUR ANCILLARY SERVICE OBLIGATIONS AND PROVIDE ENERGY WITH THE REST OF IT.

THIS IS WHAT YOU COULD BE RE UH, UH, RELEASING.

AND THEY ACTUALLY RAN OUT OF ENERGY BEFORE THE END OF THE, UH, UH, THAT GRAY HOUR.

JULIE, YOU HAD A QUESTION I WAS GONNA ASK YOU TO ACTUALLY BACK UP TO THE 10,000 FOOT LEVEL, BECAUSE WE'VE TALKED ABOUT 10 96, WHICH IS IN PLACE 1186, WHICH IS ON THE TABLE.

AND WHERE WERE WE ACTUALLY GOING? R T C PLUS B? HOW IS THIS A GOOD BRIDGE TO R T C PLUS B? NO ONE'S REALLY KIND OF PUT THE WHOLE PICTURE IN FRONT OF US.

IT'S, UM, SORRY, I'LL FIND IT IN A MINUTE.

UM, SO THE, THE GOAL IS, IT, IT IS THE, UM, IT IS THE SOLUTION THAT CAN BE IMPLEMENTED QUICKLY THAT WON'T DELAY THE ULTIMATE IMPLEMENTATION OF R T C PLUS B AND SOLVES MANY OF THE PROBLEMS OF NOT OUR CURRENT INABILITY TO ACCOUNT FOR THE STATE OF CHARGE.

SO IT'S NOT A PERFECT ANSWER, BUT IT'S, IT'S WHAT THE BEST WE CAN DO

[01:15:01]

AND THE GOAL IS TO IMPLEMENT 1186.

HOWEVER, IT'S DEFINED BY WHEN, UM, THE, THE TOOL CH SOME OF IT, SOME PARTS OF IT COULD BE IMPLEMENTED, UH, YOU KNOW, KIND OF ON APPROVAL, I THINK.

AND THEN OTHER PARTS, THE PARTS THAT REQUIRE TOOLS LIKE CHANGES TO ROCK, UH, WOULD, ARE PLANNED FOR, UH, SECOND QUARTER OF OF NEXT YEAR.

NEXT YEAR.

WOODY HAD A COMMENT AS WELL.

UH, GOING BACK TO COMMISSIONER KOBOS, UM, YOUR QUESTION ABOUT BATTERY ENERGY THAT'S HELD IN RESERVE, IT'S COUNTED IN THE P R C, SO HOLDING IT IN RESERVE IN P R C, IN, IN ANCILLARY SERVICES WON'T DRIVE THE P R C DOWN.

SO WE'RE NOT GONNA DRIVE OURSELVES INTO AN EMERGENCY BY HOLDING THAT ENERGY.

IT'S COUNTED IN THE P R C.

SO IF YOU'RE REQUIRING THE BATTERY TO CHARGE AT THE TOP OF THE HOUR, IT'S PULLING POWER FROM, FROM THE GRID, RIGHT? SO THAT'S ALSO THE OTHER IMPACT, RIGHT? THERE'S, AS I THINK DIRECTOR, UH, FLEXON NOTED, THERE'S A, A SUPPLY AND DEMAND IMPACT OF, YOU KNOW, THE BATTERY, RIGHT? IT IT DOES BOTH.

SO, YEAH, I MEAN REALLY I THINK MY WHOLE POINT IS JUST TO, WE GOTTA REALLY MAKE SURE WE'RE NOT GONNA HAVE UNINTENDED CONSEQUENCES, IS REALLY THE DIRECTION I THINK WOULD BE HELPFUL AS THE REMAN GOES BACK.

SO DAN, WHY DON'T WE HAVE STEPHANIE COME BACK? YOU CAN GO TO THE CORNER.

REFRESH.

'CAUSE I HAVE A QUESTION FOR STEPHANIE BEFORE STEPHANIE COMES UP.

I THINK BILL WANTED TO CLEAR THE DECK ON ONE QUESTION THAT BILL HAD ASKED AROUND THE MIX OF BATTERY OWNERS AND THEIR POSITION AROUND THIS ISSUE.

YES, THANK YOU.

I BELIEVE THE QUESTION WAS WHAT ROUGHLY WOULD THE SPLIT LOOK LIKE? UM, I THINK TO GET YOU THAT ANSWER, I WENT BACK TO THE, THE PROTOCOL REVISION SUBCOMMITTEE VOTING BALLOT, WHICH ALLOWS EVERY ERCOT MEMBER TO VOTE.

SO I THINK IT'S A BETTER REFLECTION.

UH, THAT BALLOT FOR THE INDEPENDENT GENERATOR SEGMENT THAT HAD E S R OPERATORS IN IT WAS SPLIT THREE TO THREE, YES, IN SUPPORT WERE BROAD REACH, KEY CAPTURE AND ANJI OPPOSED JUPITER PLUS AND E UH, OLIAN.

THAT SAID, DURING THE DISCUSSIONS THERE ARE, THERE ARE BATTERY, UH, PARTICIPANTS THAT MAY NOT HAVE BEEN REGISTERED TO EXPRESS CONCERN.

SO I WOULD FEEL PRETTY CONFIDENT SAYING AMONGST THE BATTERY COMMUNITY THERE WOULD BE MORE IN OPPOSITION THAN IN SUPPORT.

SO STEPHANIE, WELCOME BACK.

I APPRECIATE THE ROBUST DISCUSSION ON THIS PARTICULAR ITEM.

SO MY QUESTION IS, SO THE ERCOT POSITION IS, YOU KNOW, IT'S A FAIR POINT ON THE SCARCITY TIMELINE AND WE NEED TO TAKE A LOOK AT THAT, BUT EVERYTHING ELSE SEEMS, YOU KNOW, WE SHOULD MOVE FORWARD WITH IN YOUR COMMENTS, YOU MENTIONED THAT YOU THOUGHT IT WAS MORE THAN JUST SCARCITY.

SO WHAT MY, WHAT I WANNA MAKE SURE IS I KNOW WHERE, WHERE DO YOU DIFFER FROM THE ERCOT POSITION? WE HAVE AGREEMENT ON SCARCITY, BUT WHAT ABOUT THE REST? I MEAN, WHAT, WHAT ARE THE MAJOR THINGS THERE THAT WE, WE DON'T SEE EYE TO EYE? SO, UM, YOU STILL HAVE, AND I, I THINK I CAN USE SOME OF THESE SLIDES JUST BY THE WAY, YOU CAN SEE E C R S BATTERY IS ONLY 13% RIGHT NOW.

UM, JUST WANTED TO CORRECT THAT ONE POINT.

UM, I THINK HERE WE CAN SEE WHERE THE BLUE LINE STOP, THAT'S THAT STRANDED CAPACITY.

SO THEY'VE, OH, SORRY.

THEY'RE TALKING ABOUT HOW TO FIX THAT IN SOME DEFINITION OF A SCARCITY EVENT, BUT IN OTHER DEPLOYMENTS THAT'S JUST STUCK.

SO, AND WOODY, I DON'T KNOW, IS THAT PIECE GETTING COUNTED IN P R S? BECAUSE I WAS UNDER THE IMPRESSION IT WOULD NOT THE P R C, SORRY.

P R C.

YOU HAVE TO HOLD A TWO X AT THE TOP OF THE HOUR OF CHARGE SO THAT YOU ALWAYS HAVE THE 50.

SORRY.

IT IS OKAY.

BUT I DON'T THINK YOU COULD DEPLOY THAT INTO SCED.

SO ANYWAY, IT'S A QUESTION MAYBE.

UM, BUT I THINK THEIR SOLUTION ONLY ADDRESSES ONE NARROW SITUATION.

OTHERWISE, WE'RE IN A SITUATION WHERE AS BATTERY OPERATORS, WE DON'T HAVE THE FLEXIBILITY TO USE THE BATTERY.

AND I CAN'T REMEMBER WHICH OF YOU SAID IT, BUT WE, WE DO, WE ARE ON THE HOOK AND HAVE THE RESPONSIBILITY TO MEET THE OBLIGATIONS WE SIGNED UP FOR AND WE'RE TOTALLY ON BOARD WITH THAT.

UM, AND WHILE 10 96 ISN'T PERFECT, UM, AND I THINK THERE MIGHT BE SOME PLACES WE WANNA CLARIFY, WE ALL KNOW WE HAVE TO MEET THE TWO IN THE FOUR HOUR DURATION.

THE TRIP WITH 1186 IS, AND YOU CAN SEE IT HERE, THIS IS AN EXAMPLE OF A 50 MEGAWATT E C R S RESPONSIBILITY.

[01:20:01]

SO YOU'RE DOUBLING WHAT WE HAVE TO HOLD FOR, IT'S MORE THAN OUR OBLIGATION AND THEN WE HAVE TO CHARGE AGAIN.

SO I FIRMLY BELIEVE THIS WILL LEAD TO UNINTENDED CONSEQUENCES AND I DON'T THINK THE ONE FIX FOR THAT NARROW PERIOD HELPS.

ONE OF THE THINGS WE TALKED ABOUT WITH ERCOT EXECUTIVES WHEN PLUS POWER JUPITER AND I MET WITH THEM WAS AN A, A, UH, DEPLOYMENT OFF RAMP THAT ALLOWED FOR SORT OF A, I DON'T KNOW WHAT THE RIGHT WORD IS, A WAIVER OF 1186 DURING DEPLOYMENTS.

WE WERE FOCUSED ON THAT IN AN E C R SS CONTEXT IN THE MEETING.

BUT I THINK WE ALSO SHOULD LOOK AT THAT, BY THE WAY, FOR SHORTER DURATION THINGS.

BECAUSE IF YOU'VE GOT AN EVENT SPANNING HOURS AND YOU'RE TALKING ABOUT REG, WHEN YOU'RE IN REG UP OR DOWN, BATTERIES ARE LIKE A SPONGE.

AND SO SOMETIMES IT'S NOT TO EVERYONE'S ADVANTAGE FOR THEM TO BE FULLY CHARGED BECAUSE THEY NEED TO BE WILLING, YOU KNOW, READY TO TAKE POWER.

SO I JUST, AGAIN, I THINK ALL THIS NEEDS TO LOOK, I ALSO JUST WANTED TO CLARIFY SOMETHING ON THE COMPLIANCE POINT.

WE DEFINITELY CAN AND DO MOVE OBLIGATIONS AROUND THE QUEASY PORTFOLIO, BUT AT LEAST MY UNDERSTANDING OF 1186 IS THE COMPLIANCE OBLIGATION IS ON STATE OF CHARGE.

SO WHETHER OR NOT WE ARE ABLE TO COVER THE OBLIGATION, WE MIGHT STILL HAVE A COMPLIANCE ISSUE.

AND THAT'S, I I DON'T THINK A RIGHT OUTCOME.

AND THAT'S ONE OF THE REASONS YOU WILL, UM, YOU KNOW, REALLY DISINCENTIVIZE INVESTMENT IN I THINK, LONGER DURATION BATTERIES.

I ALSO THINK, UM, THERE'S, UH, SOMETHING THAT WE PROBABLY DO NEED TO ADDRESS, LIKE AS A, AS A, UH, MARKET SEGMENT, WHICH IS MAKING SURE ERCOT HAS CORRECT DURATION INFORMATION.

BECAUSE I THINK ONE OF THE PROBLEMS WITH THE DATA THAT WE'VE GOT HERE IS THERE'S AN EXPECTATION THAT ALL THIS STUFF COMING ON IS LIKE A ONE HOUR BATTERY.

THE PROBLEM IS WHEN YOU PUT YOUR INTERCONNECT IN, YOU ANSWER AN R F I AND I, MY UNDERSTANDING IS THAT'S WHAT'S BEING USED NOW OVER THE YEARS FROM WHEN YOU PUT YOUR INTERCONNECT IN, YOU'RE GONNA MAKE LOTS OF CHOICES MADE, YOU KNOW, BASED ON WHAT YOU THINK, YOU KNOW, LOADS, GROWTH LOOKS LIKE, AND DIFFERENT THINGS COMING ON THE SYSTEM.

SO I CAN JUST SAY FOR OUR BATTERIES, WE STARTED ONE PLACE AND WE HAVE, YOU KNOW, MUCH LONGER BATTERIES, LIKE ALMOST THREE HOUR BATTERIES IN ONE CASE.

SO I THINK ANECDOTALLY WHAT IS COMING ON THE GRID IS LONGER, BUT IT'S NOT T'S FAULT.

THEY DON'T HAVE THAT VISIBILITY.

SO WE PROBABLY NEED TO SOLVE THAT.

BUT THAT IS JUST ANOTHER EXAMPLE OF PLACES WHERE WE DON'T HAVE GOOD DATA.

WE NEED TO KNOW WHAT THE REAL RISK IS BECAUSE I THINK THE MORE LONG DURATION BATTERIES THAT COME ON THE SYSTEM, THE BETTER SYSTEM RELIABILITY GETS, THE MORE YOU HAVE PROVIDING E C R S FOR, UM, I THINK COMMISSIONER KOBOS CALLED THE, THE CANYON THAT I THINK IS COMING.

AND I THINK THAT'S ALL REALLY GOOD AND WILL ONLY, YOU KNOW, HELP WITH PRICES AND RELIABILITY AND AVOIDING EMERGENCY CONDITIONS.

BUT, SO THAT'S JUST, THAT'S ANOTHER PIECE OF, OF CHALLENGE BECAUSE I THINK THAT'S PART OF THE CONCERN AROUND RELIABILITY, BUT MIGHT NOT ACTUALLY BE A, A RELIABILITY ISSUE.

SORRY, THAT WAS A LITTLE ALL OVER THE PLACE.

WERE THERE, WERE THERE OTHER QUESTIONS OR DID I MISS ANY, ANY OTHER QUESTIONS? 'CAUSE UM, WOODY, YEAH, SO WE JUST PUT IN SOME RIO IMPROVEMENTS THAT ALLOW YOU TO UPDATE YOUR DURATION.

SO THAT'S AVAILABLE NOW WE CAN, YOU CAN GIVE US THE CURRENT UPTODATE DURATION OF A BATTERY.

YOU WOULD BE OPTIMIZING AROUND THE DATA THAT YOU HAVE.

AND AND MOST, MOST OF THE TIME THAT'S NOT REALLY KNOWN UNTIL I THINK YOU'RE CLOSE TO STARTING CONSTRUCTION, BUT THAT'S WHEN YOU WANT IT.

RIGHT? SO, OKAY.

MY QUESTION IS TO DAN, WHEN R T C PLUS B IS IMPLEMENTED, HOW OFTEN IS STATE OF CHARGE UPDATED IT, IS IT MORE FREQUENTLY THAN ONCE AN HOUR? SO I GUESS THE, THE MAIN THING THAT WILL HAPPEN IS THE, UH, IS R T C THE TOOL WILL ACTUALLY MAIN MOVE UNITS AROUND MOVE WHICH UNITS RATHER THAN QSCS HAVING TO POINT TO WHICH UNIT IS PROVIDING THE STATE, THE, THE EACH ANCILLARY SERVICES, UH, R T C WILL MOVE THE, UH, TO OPTIMIZE WHICH ONES ARE PROVIDING ENERGY VERSUS WHICH ONES ARE, ARE PROVIDING THE ANCILLARY SERVICE.

SO IT WILL KIND OF TAKE CARE OF THAT, UH, THE STATE OF CHARGE MANAGEMENT, HOPEFULLY BY THE TIME WE GET IT IMPLEMENTED.

CAN I MAKE YEAH, I MEAN, UH, GENERALLY, UH, THE VISION IS THAT EVERY FIVE MINUTES

[01:25:01]

THAT'S WHAT I THOUGHT.

SO WE'RE TALKING ABOUT YOU HAVE TO HAVE A FEEDBACK MECHANISM, RIGHT? SO SINCE WE DON'T HAVE THAT, WE'RE GONNA LIVE WITH THIS OTHER 1186 SOLUTION FOR UP TO, WHAT, THREE YEARS.

SO IT'S A, THAT, THAT NOBODY'S GONNA LIKE IT BECAUSE WHAT WE ALL WOULD PREFER IS THIS REAL TIME FIVE MINUTE UPDATE SITUATION, RIGHT? YEAH.

I THINK, UM, DAN, UH, AT, AT THE BEGINNING SAID THIS IS THE BEST WE CAN DO, UH, WITH THE KIND OF TOOLS THAT ARE AVAILABLE AND THE PERFECT SOLUTION OR, OR A PREFERRED SOLUTION MAYBE, UH, 'CAUSE I DON'T, I SHOULDN'T MAKE, CREATE EXPECTATIONS OF PERFECTION.

BUT THE BETTER SOLUTION IS REALTIME CO OPTIMIZATION.

PLUS SINGLE MODEL PLUS STATE OF CHARGE MANAGEMENT.

YOU KNOW, WHAT I WOULD'VE LIKED TO HAVE SEEN IS KIND OF A SIDE BY SIDE OF THE PROVISIONS AND WHERE WE AGREE AND WHERE WE DON'T AGREE AS A COMMITTEE, WE NEED TO RECOMMEND TO THE BOARD EITHER TO SEND THE WHOLE THING BACK TO BE REWORKED OR ACCEPT THE ERCOT POSITION, WHICH IS BASICALLY SAYS ACCEPT EVERYTHING EXCEPT WE'LL REWORK THE, UH, STATE OF CHARGE OR THE PERIODS OF SCARCITY, UH, TIMES AND THE PROVISIONS AROUND THAT.

SO THERE ARE, THERE ARE TWO CHOICES I'M CONCERNED ABOUT.

AS COMMISSIONER KOBO SAID, SOME OF THE UNINTENDED CONSEQUENCES OF THE AREAS WHERE WE DON'T AGREE.

AND THAT'S KIND OF WHERE EILEEN, BUT I OPEN UP TO THE COMMITTEE MEMBERS TO SEE HOW YOU WOULD LIKE TO MAKE THE RECOMMENDATION TO THE BOARD WHETHER YOU WANT TO GO WITH THE ERCOT POSITION OR RECOMMEND TO THE BOARD THAT WE SUGGEST THAT THE ENTIRE THING GO BACK AND LET'S MAKE SURE WE KNOW WHERE WE AGREE, IMPLEMENT THAT AND WHERE WE DON'T AGREE.

LET'S WORK THROUGH THAT.

SO I'M LOOKING FOR THE COMMITTEE MEMBERS TO HAVE A VIEW ON THAT.

OKAY, CARLOS? ALRIGHT, JULIE, I'M FINE WITH THAT.

TO SEND IT BACK IN.

LET'S JUST REWORK THE WHOLE THING AND AGREE.

WE'RE OBVIOUSLY THERE'S THINGS WE ALREADY AGREE UPON AND THAT'S, LET'S WORK THROUGH ITWORK AT ALL.

I SAY THE NARROW FOCUS ON THE SCARCITY PROBLEM, JUST THE SCARCITY YOU'RE SUGGESTING EXCEPT THE YOUR COMPOSITION.

CARLOS.

IS THAT WHERE YOU ARE TOO? YES.

AND JULIE AS WELL.

BUT I AGREE WITH YOU MR. CHAIRMAN, THAT IF WHEN THERE ARE DISAGREEMENTS OR JUST DIFFERENT POINTS OF VIEW, IF SOMEONE COULD JUST SUMMARIZE IT AND IF THIS IS A BRIDGE SOLUTION, SHOW US WHERE WE'RE ACTUALLY GOING SO THAT WE CAN UNDERSTAND HOW THE BRIDGE GETS US, HOW, YOU KNOW, TO WHAT DEGREE THE BRIDGE ACTUALLY ACCOMP ACCOMPLISHES THE BRIDGE.

IN THIS CASE, IT SEEMS LIKE ALL PARTIES ARE HAVING TO COMPROMISE BECAUSE WE'RE SO FAR AWAY FROM THE DESIRED STATE, WHICH IS THE FIVE MINUTE UPDATES.

THANKS.

SO THAT'LL BE OUR RECOMMENDATION TO THE BOARD.

I'M SURE THERE'LL BE SOME MORE DEBATE, UH, TOMORROW, BUT, OKAY, WELL THANKS.

UH, SO WE NEED AN ACTUAL MOTION.

SO I JUST HEARD, SO, OKAY, SECOND, CARLOS SECOND.

ALL IN FAVOR? AYE.

SO BRIAN, I GUESS WE'RE GONNA CONTINUE WITH THE AGENDA ITEM 5.13 AND WE'RE GONNA GO TO THE IMPLEMENTATION OF OPERATING RESERVE DEMAND CURVE FOR THE MULTI-STEP PRICE FLOOR.

IS IT DINNER TIME YET? OKAY, SO I THINK, UH, WHERE ARE WE?

[5.1.3 OBDRR048, Implementation of Operating Reserve Demand Curve (ORDC) Multi-Step Price Floor ]

FOR COMMENTS BY ERCOT STAFF CANON, UH, DOES THE COMMITTEE.

IT'S GOOD TO BE BACK.

UH, SO O B D R R O 48 IS IMPLEMENTATION OF THE OPERATING RESERVE DEMAND CURVE.

UM, THIS ONE WAS RECOMMENDED FOR APPROVAL BY TAC WITH SEVEN OPPOSING VOTES IN ONE ABSTENTION.

UH, THE O B D R IMPLEMENTS THE COMMISSION DIRECTED MULTI-STEP O R D C PRICE FLOOR THAT WAS PREVIOUSLY ENDORSED BY THIS BOARD.

UH, I HEARD I THINK SEVEN, UH, OPPOSING VOTES.

UH, THE REASONS FOR THAT I I HEARD WERE, UH, RELATED TO BELIEF THAT THE FLOORS MAY NOT RESULT IN SELF-COMMITMENT AND MAY ADD ADDITIONAL COSTS WITHOUT BENEFIT.

UM, SO I'LL PAUSE THERE FOR QUESTIONS.

ANY QUESTIONS FOR BRIAN? IF NOT, OKAY.

UM,

[01:30:02]

UM, SO ER ERCOT, UH, FILED THIS, UH, OTHER DI BINDING DOCUMENT CHANGE.

IT IS IN ALIGNED WITH THE BOARD RECOMMENDATION ON THE BRIDGE SOLUTION, UH, THAT, THAT WE HAD.

SO, UH, AND, AND SINCE THAT TIME, THE COMMISSION HAS SAID TO GO FORWARD WITH THIS, UH, MARKET DESIGN CHANGE.

SO ERCOT STAFF SUPPORTS THIS, UH, OTHER BINDING DOCUMENT CHANGE.

GREAT, THANKS KENAN.

SO THEN I MOVE THAT THE COMMITTEE RECOMMEND THAT THE BOARD RECOMMEND APPROVAL OF O B D RRR 0 4 8 AS RECOMMENDED BY TECH.

AND I HAVE MOTION CARLOS QUESTION, OH, SORRY.

TOOK ANON.

COULD, COULD YOU ADDRESS THAT POINT ABOUT THE STEP AND WHETHER IT'S ENOUGH TO HAVE A PRICE SIGNAL? SO, UM, YES.

UH, WE BELIEVE THAT IT, IT WOULD HAVE AN IMPACT IN TERMS OF A COMMITMENT DECISION.

UH, REMEMBER THE O R D C AT OR WOULD NOT GO BELOW $20 A MEGAWATT HOUR, UH, BETWEEN WHEN THERE ARE RESERVES BETWEEN UH, 3060 500 MEGAWATTS AND THEN THAT DROPS TO $10, UM, BETWEEN, UH, 6,501 AND AND 7,000.

UM, UNFORTUNATELY THAT'S A BEHAVIORAL CHANGE THAT'S VERY DIFFICULT TO MODEL.

SO, UH, IN, IN BOTH WHEN WE DISCUSS THE BRIDGE SOLUTION, AND AGAIN, WHEN WE, UH, WALKED THIS THROUGH, UH, TAC ERCOT DID COMMIT TO DO FOLLOW-UP ANALYSIS AND, AND UPDATE, UH, BOTH TAC UH, AND, UH, OUR EXPECTATION WOULD BE THE BOARD ON HOW THOSE THINGS ARE, ARE FUNCTIONING GOING FORWARD.

UM, AS FAR AS THE ADDITIONAL REVENUE GOES, UM, UH, WE ESTIMATED 500 MILLION AS A LOOKBACK.

AGAIN, BECAUSE THAT IS A LOOKBACK AND DOES NOT TAKE INTO ACCOUNT BEHAVIORAL CHANGE, I I WOULD EXPECT THAT TO BE LESS THAN THE 500 MILLION.

UM, BUT AGAIN, UH, IT'S, IT'S IMPOSSIBLE TO MODEL THAT.

SO WE WOULD WANNA FOLLOW UP WITH YOU TO LET YOU KNOW HOW IT WAS DOING.

'CAUSE I NEED A MOTION TO APPROVE.

CAN I, CAN I ASK ONE MORE QUESTION? CAN YOU GO OVER A FEW OF THE THINGS THAT THE, UM, COMMISSION ASKED FOR OR CAUGHT TO FOLLOW THROUGHOUT AND COME BACK AND PROVIDE THE INFORMATION FOR REAL QUICK R RELATIVE TO THIS OR, UM, YES.

TO THE O R D C AND THE CHANGES? YEAH, SO, UM, I THINK THEY WERE INTERESTED IN THE TWO ITEMS, UH, UH, CARLOS MENTIONED.

AND, UM, IN ADDITION TO THAT, THEY WANTED TO UNDERSTAND THE PERFORMANCE OF O R D C IN GENERAL.

UM, AND I'M SORRY IF THERE WAS ANOTHER ONE, I'M, I'M FORGETTING IT, BUT THERE, THERE WERE A SERIES OF INSTRUCTIONS THAT WERE DOCUMENTED, UH, THAT WE PLAN TO FOLLOW UP AND PROVIDE THE COMMISSION WITH, UH, INFORMATION ON ACROSS THE BOARD.

UM, YEAH, I THINK, I THINK THE LAST ONE WAS KIND OF HOW IS ALL OF EVERYTHING WE'RE DOING WORKING WITHIN THE KIND OF RESOURCE ADEQUACY GOALS AND THAT TYPE OF DYNAMIC, WHICH WOULD BE, AGAIN, SOMETHING I THINK WE, WE CAN DO, BUT IT WOULD BE, UH, I THINK I REMEMBER THAT ONE BEING THE FOURTH ONE, BUT I STAND TO BE CORRECTED.

CANON IF I MAY ASSIST.

SINCE I'M THE ONE THAT RECOMMENDED THOSE METRICS, UM, THERE'S FORUM TOO.

WE CAN SPEAK TO THIS.

UM, SO, UM, I HAD FILED A MEMO AND THE COMMISSION ULTIMATELY ADOPTED THE METRICS THAT, UM, ARE NOW, UH, REPORTING REQUIREMENTS, I GUESS.

UM, ONE IS, UM, HOW MUCH REVENUE IS BEING GENERATED BY THE O R D C PRICE FLOORS, UH, SPECIFICALLY FROM THE O R D C PRICE FLOOR ADDERS.

UM, AND WHERE IS THAT MONEY GOING TO, WHAT SPECIFIC RESOURCES MM-HMM.

THE THIRD ONE IS ARE THE R D C PRICE FLOOR ADDERS, UM, HELPING TO REDUCE RUCK.

SO, UM, AS YOU SAID, INCENTING SELF-COMMITMENT TO REDUCE RUCK.

AND THEN THERE'S SORT OF A FOURTH, UM, FOLLOW UP ON THAT.

AND THAT IS ONCE D R S IS IMPLEMENTED, UM, SIX MONTHS AFTER KIND OF LOOKING TO SEE, UM, WHETHER THE, YOU KNOW, HOW THEY ARE WORKING TOGETHER.

IS D R S REDUCING RCC STATUTORILY BY LAW IT HAS TO REDUCE RUCK, UM, BUT IS O R D C HELPING WITH RE THE PRICE FLOOR ADDERS HELPING TO REDUCE R SIX MONTHS OUT, WHICH, AND THEN ANOTHER, YOU KNOW, ANOTHER ROUND POTENTIALLY, UM, A YEAR OUT.

SO THAT WAY YOU'D CAPTURE TWO SHOULDER SEASONS WHERE ERCOT TYPICALLY ROCKS UNITS MORE AND HAVE MORE HOLISTIC DATA.

THANK YOU FOR BAILING ME OUT.

R D C ADDERS AT THE END OF THAT TO SEE HOW IT'S INTERACTING WITH D R R S, WELL JUST CONTINUOUSLY TO, UH, EVALUATE ITS PERFORMANCE AND JUST CONTINUE TO ASK THOSE QUESTIONS, THE VALUE THAT IT'S BRINGING.

WITH, WITH THE POTENTIAL TO PHASE OUT THE O

[01:35:01]

SO THEORETICALLY IT COULD GO EITHER WAY.

WHY? OKAY, SO MOTION TO APPROVE CARLOS.

SECOND JOHN, ANYONE AGAINST ABSTAIN FROM ONE ABSTENTION, THEN THE MOVE, UH, IS APPROVED.

[5.1.4 VCMRR034, Excluding RUC Approved Fuel Costs from Fuel Adders ]

SO BRIAN, PLEASE PROCEED NOW WITH, UH, 5.1 0.4 EXCLUDING RUCK APPROVED FUEL COSTS FROM FUEL LADDERS.

MY PLEASURE.

THIS, THIS LAST ONE, UH, WAS RECOMMENDED FOR APPROVAL BY TAC WITH ONE OPPOSING VOTE AND THREE ABSTENTIONS ALL IN INDEPENDENT GENERATOR SEGMENT.

UH, THIS IS ABOUT A VERIFIABLE COST MANUAL REVISION REQUEST THAT PROVIDES THE ACTUAL FUEL PURCHASES THAT WERE USED TO DETERMINE THE R GUARANTEE NOT ALSO BEING INCLUDED WHEN CALCULATING FUEL LADDERS.

UH, THE REASON FOR THE DISSENTING VOTE WAS A CONTINUATION OF THE BELIEF THAT THE RUCK GUARANTEE SHOULD ALLOW FOR RECOVERY OF BOTH VERIFIABLE OR VARIABLE AND, UH, FIXED COST AND RUCK MAY HOLD.

UM, SO HAPPY TO TAKE ANY QUESTIONS THERE.

ANY QUESTIONS ON THIS ONE? ANYTHING FROM THE ERCOT SIDE? KENON? YES.

SO, UH, AGAIN, ERCOT FILED THIS CHANGE.

IT IS ALIGNED WITH BOTH THE I M M RECOMMENDATION.

UM, THERE WAS A, THIS WAS DISCUSSED AT THE COMMISSION ALSO, AND IT'S ALIGNED WITH THEIR, UH, FINDINGS ON THE DISCUSSION.

ERCOT STAFF SUPPORTS THIS, UH, RECOMMENDATION.

OKAY, THIS CHANGE.

ANY OTHER COMMENTS FROM COMMITTEE MEMBERS? IF NOT, I NEED A MOVEMENT.

JOHN MOVES SECOND.

JULIE, ANY OPPOSED? ABSTENTIONS CONSIDERED PASSED.

[6. Recommendation regarding Modifications to Letter of Credit and Surety Bond Standard Forms and Repeal of Guarantee Agreement Standard Forms ]

SO THE NEXT ONE IS KANAN, GELMAN AND CHIEF AND CHAD SEALEY WILL PRESENT AGENDA ITEM NUMBER SIX, THE RECOMMENDATION REGARDING MODIFICATIONS TO LETTER OF CREDIT AND SURETY BOND STANDARD FORMS AND REPEAL OF GUARANTEE AGREEMENT STANDARD FORMS. AND FOLLOWING THE PRESENTATION, THE COMMITTEE WILL VOTE ON A RECOMMENDATION TO THE BOARD ALTERNATIVELY, KENAN AND CHAD.

OKAY, SO, UH, WHAT I'M GONNA TALK TO YOU ABOUT KIND OF HAS TWO PARTS TO IT.

THE FIRST IS, UM, A RESULT OF 1165 BEING APPROVED.

THERE ARE SOME, UH, DOCUMENTS THAT NEED TO BE CHANGED.

UM, THE OTHER, UH, IS A RESULT OF A REVIEW WE DO AROUND OUR, UH, KIND OF STANDARD FORMS AND SOME CHANGES THAT NEEDED TO HAPPEN ON THAT FRONT.

SO, UH, WE ARE LOOKING FOR, UH, A RECOMMENDATION FROM THIS, UH, COMMITTEE, UH, TO THE BOARD TO APPROVE THE REVISIONS TO THE STANDARD LETTER OF CREDIT SURETY BOND FORMS AND THE REPEAL OF THE MARKET PARTICIPANT GUARANTEE AGREEMENTS.

SO, UM, I'M GONNA SPEND A LITTLE BIT OF TIME ON THE, THE SECOND HALF OF THIS, WHICH IS, UM, THE GUARANTEE AGREEMENTS.

AS YOU RECALL, ABOUT A YEAR AGO, WE APPROVED N P R R 1112, WHICH ELIMINATED UNSECURED CREDIT.

THERE WERE, UH, SOME, UH, ABILITY TO POINT TO A PARENT TO, UH, PROVIDE UNSECURED UH, CREDIT AS WELL.

AND THIS N P R R UH, ELIMINATED THAT.

AND, AND WE DISCUSSED THAT EARLIER, BUT NOW WE NEED TO DO THE KIND OF HOUSE CLEANING AND TAKE THOSE, THESE, UH, AGREEMENTS AND FORMS OUT OF THE, UH, PROTOCOLS AND OTHER BINDING DOCUMENTS THAT WE HAVE.

UM, THE OTHER NOTE I WOULD MAKE IS THE, UH, MARKET PARTICIPANT CREDIT FINANCE SUBGROUP UNANIMOUSLY APPROVE THESE, UH, DOCUMENT CHANGES AS WELL.

SO, UM, AS FAR AS THE CREDIT FORMS GO, WE ARE PROPOSING, AND I'LL GO THROUGH EACH OF THESE, BUT WE'RE PROPOSING LETTERS CHANGES TO THE LETTERS OF CREDIT, CHANGES TO THE SURETY BOND, AND AGAIN, THIS ELIMINATION OF THE GUARANTEE AGREEMENTS.

UM, AND, UH, AS I SAID BEFORE, UH, THIS IS, UH, ALSO IN RESPONSE TO THE DIRECTION THAT WE GOT AROUND N P R R 1112.

[01:40:01]

SO, UH, THE OTHER DETAILS ARE THAT ON THE LETTER OF CREDIT FORM, WE ARE PROPOSING TO FIX A ERROR IN EXHIBIT ONE THAT INACCURATELY REFLECTS WHERE PAYMENT SHOULD BE DEPOSITED.

UM, AGAIN, THERE THERE'S A CLARIFICATION TO EXHIBIT FIVE AND WE'RE REVISING, UH, EXHIBITS, UH, FOUR AND SIX, UH, SO THAT THE TEMPLATES FOR ISSUERS, UH, EXIST RATHER THAN TEMPLATES FOR ERCOT.

UM, IN BOTH OF THESE FORMS ALSO THE MET ADDRESS HAS CHANGED, SO WE'RE UPDATING THAT.

UM, AND, UH, THERE WAS LOTS OF REFERENCES TO FAXES AND, AND, UM, THOSE ARE, UH, RELATIVELY ANTIQUATED AND, AND WE'RE TRYING TO ELIMINATE THAT AND FOCUS ON EMAIL ADDRESSES THERE.

SO AGAIN, ON THE SURETY BOND FORM, UH, THERE, THERE'S TWO UPDATES THERE AS WELL.

UM, AND THEN THIS IS JUST THE APPROVAL DOCUMENT OR THE, THE ACTION ITEM THAT WE ARE ASKING R AND M TO ENDORSE TO THE BOARD.

ANY QUESTIONS OR COMMENTS? GO AHEAD.

COUPLE OTHER, JUST THESE, AS KAAN INDICATED, THESE ARE STANDARD FORMS BY THE BOARD AND, UM, THIS IS PART OF PROTOCOL SECTION 16.

SO THIS IS WHY THE BOARD APPROVES 'EM, IS THAT WE DON'T NEGOTIATE WITH PARTIES.

WE HAND THEM THE STANDARD FORM AND SAY THESE ARE THE TERMS. UH, SO IT'S VERY EFFECTIVE THAT EVERY COUNTERPARTY IS BEING THE TRAIN TREATED THE SAME WHEN THEY'RE UTILIZING THE LETTER OF CREDIT AS SURETY BOND, OF COURSE, THEY CAN GIVE US CASH AS ANOTHER FORM OF COLLATERAL AS WELL.

UM, ALSO WE DID WORK WITH OUTSIDE COUNSEL JUST TO MAKE SURE THAT THERE WERE NO OTHER FUNDAMENTAL UNIFORM COMMERCIAL CODE CHANGES BECAUSE IF YOU SEE IN THE DECISION TEMPLATE, THE LAST TIME THAT THE BOARD LOOKED AT THIS WAS IN 2017.

SO IT IS A GOOD PRACTICE TO LOOK AT THESE CREDIT DOCUMENTS EVERY ONCE IN A WHILE AND WE DO WORK WITH OUTSIDE COUNSEL.

AND SO IT DID GO THROUGH THAT REVIEW PROCESS, BUT AT THE END OF THE DAY, EVERYTHING THAT KAAN HAS REFLECTED HERE IS NOT VERY SUBSTANTIAL CHANGES, WHICH MEANS THERE'S NOT BEEN FUNDAMENTAL CHANGES IN THE UNIFORM COMMERCIAL CODE WHEN IT COMES TO THESE TYPE OF CREDIT DOCUMENTS.

WHAT, WHAT IS YOUR RECOMMENDATION FOR HOW FREQUENTLY WE SHOULD REVIEW THE DOCUMENTS? Y YOU KNOW, PROBABLY EVERY FOUR YEARS OR SO IS ABOUT RIGHT.

UM, WE, WE GOT A LITTLE PAST THAT BECAUSE OF COVID AND, YOU KNOW, OTHER PRIORITIES.

UM, BUT I WOULD SAY, YOU KNOW, THAT'S, THAT'S ABOUT A FAIR PRACTICE TO LOOK AT THESE TYPE OF DOCUMENTS.

OF COURSE, WE ALSO RELY ON, YOU KNOW, WHEN WE'RE WORKING WITH EITHER, UH, THE BANKING INSTITUTIONS OR INSURANCE COMPANIES TO HIGHLIGHT THINGS THAT HAVE FUNDAMENTALLY CHANGED BECAUSE WE ARE HANDING IT TO THEM AND SAYING IT'S A STANDARD FORM AND THEY WILL COME, SOMETIMES COME BACK AND SAY, WELL, THIS PROVISION DOESN'T MAKE SENSE ANYMORE BECAUSE IT'S FUNDAMENTALLY CHANGED IN LAW.

SO THAT'S ANOTHER KIND OF CHECKS AND BALANCE APPROACH TOO, RIGHT? OKAY.

ANY OTHER QUESTIONS? ALL RIGHT.

IF NOT, I'LL ENTERTAIN A MOTION TO RECOMMEND THAT THE BOARD APPROVE THE MODIFICATIONS TO THE LETTER OF CREDIT AND SURETY BOND STANDARD FORMS AND THE REPEAL OF THE GUARANTEE AGREEMENT STANDARD FORMS AS PRESENTED.

SO I NEED A MOVEMENT FOR THAT.

SO MOVED.

SECOND JOHN SECONDS.

ALL IN FAVOR? AYE.

ANYBODY OPPOSED? ANY ABSTENTIONS? CONSIDER PASSED.

[7. Recommendation regarding CPS Energy – San Antonio South Reliability Regional Planning Group Project ]

SO FOR AGENDA ITEM SEVEN, WOODY RICKSON WILL PRESENT THE RECOMMENDATION REGARDING C P S ENERGY SAN ANTONIO SOUTH RELIABILITY REGIONAL PLANNING GROUP PROJECT.

I GO TO WOODY.

GOOD AFTERNOON.

SO THIS IS THE RECOMMENDATION FOR A TIER ONE PROJECT COMING OUTTA SAN ANTONIO NEW TRANSMISSION LINE.

SO THIS IS A $329 MILLION, UH, LINE.

AT THE END OF THIS, YOU'LL, UH, ENDORSE THE SAN ANTONIO REGIONAL BE ASKED TO ENDORSE THE, UH, THE SOUTH, THE SAN ANTONIO SOUTH REGIONAL PLANNING GROUP BASED PROJECT, UM, AND DESIGNATED AS CRITICAL.

SO THIS IS A TIER, WHAT WE CALL A TIER ONE PROJECT.

SO THAT MEANS IT'S OVER A HUNDRED MILLION.

UM, IT REQUIRES A, A BOARD ENDORSEMENT AND, UH, PROTOCOLS REQUIRE THAT WE PRESENT THE PROJECTS TO TACTFUL REVIEW AND COMMENT AND THEN PRESENT THOSE TACK COMMENTS TO THE BOARD.

SO THAT'S, THAT'S WHAT'S GOING ON HERE.

SO C P S SUBMITTED THIS PROJECT IN DECEMBER OF 2022.

THE PURPOSE OF THE PROJECT IS TO ADDRESS A RELIABILITY NEED

[01:45:01]

SO WE CAN APPROVE PROJECTS FOR DIFFERENT OR WE CAN ASK FOR ENDORSEMENT FOR PROJECTS FOR ECONOMIC REASONS, RESILIENCY OR RELIABILITY.

THIS IS WHAT WE CALL A RELIABILITY PROJECT.

WE PERFORMED AN INDEPENDENT REVIEW OF THE PROJECT.

UM, OUR ENDORSEMENT OF THE PROJECT IS BASED ON A RELIABILITY NEED TO RELIEVE OVERLOADS ON ABOUT 27 MILES OF 138 KV TRANSMISSION LINES IN THE SAN ANTONIO AREA TO MEET NERC AND ERCOT RELIABILITY CRITERIA.

WE PRESENTED THE PROJECT TAC ON JULY 25TH, TAC VOTED UNANIMOUSLY TO ENDORSE THE PROJECT.

SO LIKE I SAID, THIS IS A RELIABILITY BASED PROJECT.

IT'S A NERC T P L STANDARD AND ARE ALSO AN ERCOT PLANNING GUIDE STANDARD.

SO THE LOSS OF A GENERATING UNIT AND A SINGLE TRANSMISSION ELEMENT CAUSES A DIFFERENT TRANSMISSION LINE TO OVERLOAD.

SO THAT'S THE RELIABILITY PROBLEM THAT THIS LINE WILL FIX.

SO ERCOT RECOMMENDS, SO WHEN WE REVIEWED THE PROJECT, WE LOOKED AT FIVE DIFFERENT OPTIONS AND IN THE STUDY REPORT YOU'LL SEE WE, WE RECOMMEND OPTION FIVE.

UH, OPTION FIVE REQUIRES CONSTRUCTION OF A NEW 50 MILE, UH, 3 45 LINE.

SO IF YOU LOOK AT THE SAN LOOK AT SAN ANTONIO, THERE'S 2 3 45 PATHS GOING SOUTH.

THIS WOULD BE A THIRD.

AND THE TWO STATIONS THAT THEY GO TO CURRENTLY HAVE TWO, BUT THEY WILL HAVE THREE.

WHEN WE COMPLETE THE, UH, LOWER RIO GRANDE VALLEY IMPORT PROJECT, IT WAS ENDORSED A COUPLE YEARS AGO.

AND SO THIS, THIS ADDS A THIRD LINE GOING FROM SAN MIGUEL INTO SAN ANTONIO.

UH, IT ALSO REQUIRES, UH, REBUILDING THE EXISTING, UH, 14.9 MILE KAON TO HOWARD ROAD 3 45 DOUBLE CIRCUIT.

AND THERE'S SOME OTHER 1 38 IMPROVEMENTS AS WELL AS A TRANSFORMER THAT GETS ADDED.

SO WE LOOKED AT SEVERAL DIFFERENT OPTIONS AND THIS IS THE ONE THAT, UH, WAS CHOSEN.

SO THIS IS A REQUEST FOR A COMMITTEE VOTE.

UH, WE REQUEST THAT, UH, R AND M COMMITTEE RECOMMEND THROUGH THE BOARD TO ENDORSE THE NEED FOR THE SAN ANTONIO SOUTH RELIABILITY PROJECT BASED ON NERC AND ERCOT RELIABILITY PLANNING CRITERIA, AND ALSO DESIGNATE THE SAN ANTONIO PROJECT AS CRITICAL TO MAKE THE C C N PROJECT GO FASTER.

AND SOME QUESTIONS ABOUT THAT.

BUT, UM, I THINK THE, THAT PROCESS MAY HAVE CHANGED.

SO, BUT THAT'S, THOSE ARE THE TWO REQUESTS.

SO ANY, ANY QUESTIONS ABOUT THE PROJECT? YOU CAN SEE, UH, THIS, HERE'S SAN ANTONIO.

THIS IS ONE OF THE EXISTING LINES AND THIS IS THE OTHER EXISTING LINE.

THIS IS THE NEW LINE THAT'S BEING BUILT AND THIS HIGHLIGHTED AREA ARE SOME OF THE AREAS THAT ARE, THAT ARE BEING, UH, REBUILT.

AND THEN THERE'S A NEW TRANSFORMER AS WELL HERE.

WENDY, THANKS FOR THE PRESENTATION.

THIS, I THINK THIS IS THE FIRST TIER ONE PROJECT BROUGHT BEFORE THIS NEWLY FORMED BOARD.

UH, CAN YOU JUST DESCRIBE FOR US LIKE THE TOTAL TIMELINE BETWEEN THE PLANNING PHASE TO IMPLEMENTATION AND KIND GIVE US THE BIG PICTURE.

SO THIS NEED WAS FIRST SEEN IN THE ERCOT 2021 TRANSMISSION PLAN, REGIONAL TRANSMISSION PLAN.

SO WE IDENTIFIED IT THEN, UM, IN 2021 THERE WAS A SAN ANTONIO PROJECT TO ADD SOME TRANSFORMERS AT THIS HOWARD ROAD STATION.

SO THAT WAS LIKE THE FIRST STEP.

THE SECOND STEP WAS AT THE END OF LAST YEAR, SAN ANTONIO SUBMITTED THIS PROJECT.

SO THAT WAS IN DECEMBER OF 2022.

SO THAT PROJECT HAS WORKED ITS WAY THROUGH REGIONAL PLANNING GROUP REVIEW TAC UH, I THINK WE MAY EVEN HAVE A, UH, A TIMELINE THERE, BUT IT STARTED IN DECEMBER.

IT WAS APPROVED AT THE JULY TAC AND NOW IT'S AT THE BOARD IN AUGUST.

SO ONCE IT WAS SUBMITTED, IT'S BEEN ABOUT A SIX MONTH, SEVEN MONTH REVIEW AND TO GET TO THIS POINT.

ANY OTHER QUESTIONS ABOUT WHAT'S, WHAT'S BEING, BEING ASKED OR WHAT THE PROJECT DOES? WOODY? UM, SORRY, I, I JUST, UM, HAVE AN OBSERVATION.

SO IS THE LINE COMING SOUTH OF SAN ANTONIO THAT, THAT THEY ALL DID IN AT THE SAN MIGUEL SUBSTATION? RIGHT.

AND THAT'S THE, THE UPPER POINT OF THE 3 45 KV TRANSMISSION LINE WHERE WE ORDERED THE COMMISSION ORDERED A SECOND CIRCUIT THAT'S

[01:50:01]

RIGHT INTO THE VALLEY.

THAT'S RIGHT.

SO I THINK THAT, I JUST WANTED TO HIGHLIGHT THAT 'CAUSE THAT'S EVEN MORE POWER, MORE MORE TRANSMISSION TRANSFER CAPABILITY I THINK INTO THE VALLEY.

YOU HAVE, YEAH, AS YOU KIND OF SEE THAT RIGHT THERE AT THE VERY BOTTOM OF THE MAP, YOU SEE THAT THAT'S THE START OF THE LINE THAT WAS, UH, ORDERED BY THE P C A YEAR AND A HALF AGO TO GO INTO THE SOUTHERN RIO GRANDE VALLEY.

THAT'S THAT, THAT NEW CIRCUIT GOING DOWN THERE.

SO THIS WILL ACTUALLY CONNECT WITH THAT TO GO UP INTO SAN ANTONIO.

AND I EXPECT THAT YOU'RE GONNA SEE ANOTHER PROJECT.

SO WE HAD ONE LAST YEAR FOR HOWARD ROAD.

YOU'LL HAVE THIS ONE AND I THINK THERE'S ANOTHER ONE COMING TO HELP, UH, BECAUSE, AND WE DID ONE LAST YEAR THAT WAS DONE IN THE VALLEY SOMEWHERE.

WASN'T IT THE RIO GRANDE VALLEY? THAT, THAT ONE.

BUT THERE WAS ALSO ONE IN SAN ANTONIO TO PUT MORE TRANSFORMERS AT HOWARD ROAD AS WELL.

WHATEVER HAPPENED AT THE SOUTHERN CROSS PROJECT, IT'S STILL, STILL OUT THERE.

POKING.

IS SOMEONE ACTUALLY BUILDING IT OR ARE THEY ? IT HAS BEEN APPROVED TO BE BUILT, YEAH.

WE'LL NOW TAKE UP AGENDA ITEM NUMBER EIGHT, COMMITTEE BRIEFS AND WOODY'S PRESENTATION OF THE SYSTEM PLANNING AND WEATHERIZATION UPDATE AGENDA ITEM 8.1.

AND CHAD JUST TURNED HIS HEAD SIDEWAYS.

SO I MAY HAVE SAID SOMETHING A LITTLE BIT WRONG THERE.

WE, WE'VE ACCOMPLISHED, IT'S NOW CALLED SPIRIT TRANSMISSION.

SO SOUTHERN CROSS IS NOW SPIRIT TRANSMISSION.

UM, WE'VE ACCOMPLISHED ALL THE DIRECTIVES THAT THE P E C GAVE US.

I THINK Y'ALL ARE TOWARD THE END OF THOSE DIRECTIVES.

UM, THEY HAVE NOT FINANCIALLY COMMITTED TO MOVE FORWARD WITH THE PROJECT, BUT WE ARE, WE'RE CONTINUING TO TALK TO THEM ABOUT, UM, YOU KNOW, THE OPPORTUNITY TO MOVE IT FORWARD.

SO NO ONE'S ACTUALLY DUG ANY DIRT, PLEASE.

NOT THAT I'M AWARE OF.

THERE'S BEEN NO FINANCIAL COMMITMENT AS FAR AS I'M AWARE OF, AND WHICH WOULD REQUIRE US TO MOVE FORWARD WITH OTHER PROJECTS TO ENSURE THAT WE CAN HAVE THAT LARGE TIE INTEGRATED RIGHT, BUT THERE IS ONGOING TALK.

ANY OTHER QUESTIONS ON THIS PARTICULAR ITEM? SO IF NOT, I'LL ENTERTAIN A MOTION TO RECOMMEND THAT THE BOARD WON, ENDORSE THE NEED FOR THE TIER ONE C P S ENERGY SAN ANTONIO SOUTH RELIABILITY REGIONAL PLANNING GROUP PROJECT, WHICH IS OPTION FIVE, WHICH ERCOT STAFF HAS INDEPENDENTLY REVIEWED AND WHICH TAC HAS VOTED UNANIMOUSLY TO ENDORSE BASED ON NERC AND ERCOT RELIABILITY PLANNING CRITERIA.

AND TWO, DESIGNATE THE PROJECT AS A CRITICAL TO THE RELIABILITY OF THE ERCOT SYSTEM PURSUANT TO P U C T SUB SUBSTANTIVE RULE 25.101 B THREE D.

SO I NEED A MOVE.

CARLOS MOVES SECOND JOHN.

ALL IN FAVOR? AYE.

ANYBODY OPPOSED? ANY ABSTENTIONS? IF NOT UNANIMOUSLY APPROVED? DON'T GO TOO FAR WOODY.

[Items 8 - 8.1.2 ]

WOODY WILL ALSO PRESENT ITEM 8.1 0.1 UPDATE ON RELIABILITY STANDARD STUDY RESULTS AND ITEM 8.2 WEST TEXAS SYNCHRONOUS CONDENSER PROJECT.

ALRIGHT, SO THIS IS JUST OUR REGULAR SYSTEM PLANNING AND WEATHERIZATION UPDATE.

SO SEVERAL KEY THINGS TO TALK ABOUT HERE.

UM, THE FIRST IS WEATHERIZATION INSPECTION.

SO WE'RE IN THE MIDDLE OF, OF SUMMER INSPECTIONS RIGHT NOW.

UH, PHASE TWO OF THE P U C EMERGENCY PREPAREDNESS RULE REQUIRES THAT, UH, PREPARATION MEASURES MUST BE IN PLACE BY JUNE 1ST.

WE'RE OUT INSPECTING TODAY.

WEATHERIZATION INSPECTORS ARE UTILIZING THE A, A NEW SOFTWARE, A NEW IPAD SYSTEM TO, TO DO THE INSPECTION.

SO THAT'S AN IMPROVEMENT.

SO SINCE THE INSPECTION PROCESS STARTED, WE'VE DONE OVER 1300 INSPECTIONS AT THIS POINT.

UM, THAT PUTS US WELL ON PACE TO MEET THE MINIMUM REQUIRED BY THE P D C RULE, WHICH IS ROUGHLY ABOUT 1800.

SO WE'RE INSPECTING GENERATION AND TRANSMISSION FACILITIES FOR SUMMER PREPAREDNESS RIGHT NOW IN DECEMBER OF THIS YEAR.

WE'LL START ON THE WINTER PREPAREDNESS AGAIN.

SO THE UH, KEY TAKEAWAY HERE IS THAT THE, UH, WEATHERIZATION INSPECTION PROGRAM'S ON TRACK, WE'RE MEETING MINIMUM REQUIREMENTS AND, UH, THINGS ARE, ARE, ARE GOING WELL IN THAT AREA.

SO ANY, ANY QUESTIONS ABOUT THAT.

SECOND ITEM ALSO HAS TO DO WITH, UH, WEATHERIZATION.

UH, IT HAS TO DO WITH THE WINDSHIELD TEMPERATURE INTERPRETATION.

SO THE, THE PC RULE, UM, HAD A 72 HOUR WINDSHIELD TEMPERATURE IN IT THAT WAS IDENTIFIED IN, IN OUR, OUR WEATHER STUDY.

AND THAT WAS THE STANDARD TO WEATHERIZE UH, PLANTS FOR THE WINTER.

BUT THERE WAS SOME QUESTION ABOUT HOW DO YOU INTERPRET A 72 HOUR WINDSHIELD TEMPERATURE.

AND SO FOR CLARITY, WE SUBMITTED AN INTERPRETATION AND BASICALLY THE INTERPRETATION SAID THAT, UM, A PLANT WOULD PICK A TEMPERATURE

[01:55:01]

AND PICK A WIND SPEED TO DO THEIR WEATHERIZATION, UH, PREPARE THEIR WEATHERIZATION FOR, WE WOULD THEN THEY WOULD SEND THAT TO US.

WHEN THEY SEND US THEIR DECLARATION, WE THEN CALCULATE USING A, A FORMULA AND IF THOSE TWO NUMBERS GENERATE A TEMPERATURE THAT IS EQUAL TO OR LESS THAN THAT 72 HOUR WINDSHIELD TEMPERATURE, THEN WE, UH, CONCLUDE THAT THE STANDARD, UH, MEETS THE REQUIREMENT.

AND THEN WE ACTUALLY GO OUT AND INSPECT TO SEE THAT THEY DID THE THINGS THAT ARE IN THE STANDARD.

BUT IT WAS UNCLEAR TO MARKET PARTICIPANTS EXACTLY HOW TO APPLY THAT STANDARD.

SO WE WORKED WITH THE P U C, GOT SOME CLARITY THERE, AND THAT HAS NOW, UH, BEEN ACCEPTED AT THE JULY 20TH OPEN MEETING.

SO NOW THAT WE HAVE A STANDARD, WE KNOW HOW TO USE IT.

SO EVERYTHING SHOULD BE GOOD THERE FOR THE WIN.

UPCOMING WINTER INSPECTIONS, UH, WE DID HOLD A WORKSHOP, EXPLAINED IT, UH, HAD 280 PARTICIPANTS INVOLVED.

SO WE HAD GOOD PARTICIPATION.

SO THE KEY TAKEAWAY HERE IS, YOU KNOW, THE ACCEPTANCE OF THAT WINDSHIELD TEMPERATURE INTERPRETATION.

AND UH, I THINK WE'VE GOTTEN THE CLARITY FOR THE MARKET PARTICIPANTS NOW THAT WE NEED TO HAVE AN EFFECTIVE WINNER INSPECTION PROCESS.

SO ANY, ANY QUESTIONS ABOUT THAT? MAYBE JUST A COMMENT BECAUSE NOT ONLY DID WE CLARIFY IT FROM A DESIGN STANDPOINT, BUT ALSO FROM A COMPLIANCE STANDPOINT IN TERMS OF DEVELOPING THE WINDSHIELD FACTOR.

I'M SORRY, WHAT WAS THE QUESTION? I SAID JUST FOR, I JUST WANTED TO COMMENT THAT NOT ONLY DID THE WORK EFFORT ALLOW US TO GO IN AND, UM, CLARIFY IT FROM A DESIGN STANDPOINT, FROM THE MARKET PARTICIPANT STANDPOINT, BUT ALSO UM, FROM A COMPLIANCE STANDPOINT IN TERMS OF WHAT WOULD HAPPEN IN THE EVENT THAT YOU HAD AN EVENT.

THAT'S RIGHT.

AND OF COURSE, UH, COMMISSIONER MCADAMS WORKED VERY CLOSELY ON THAT, RIGHT? DO YOU WANT ME TO COVER THAT? WELL, UH, I WOULD JUST SAY IT WAS A, A LITTLE BIT MORE IN DEPTH THAN THEY JUST PICKED A NUMBER.

UH, THEY HAD TO SUBMIT TO YOU THE DESIGN SPECIFICATIONS OF THEIR FACILITY, CORRECT, WOODY? THAT'S RIGHT.

AND THEN, AND THEN BETWEEN THAT AND THE 72 HOUR WINDCHILL, WHICHEVER WAS LOWER DETERMINED WHETHER COMPLIANCE WAS IN FACT ACHIEVED OR REMEDIATION WOULD HAVE TO BE EFFECTUATED ON THE FACILITY.

THAT'S RIGHT.

SO IF, UH, THE PLANT WAS IN A WEATHER ZONE THAT HAD A 10 DEGREE, 72 HOUR WINDCHILL TEMPERATURE IDENTIFIED IN OUR REPORT, THINK IT WAS 10 DEGREES AND THEY HAD A PLANT THAT HAD A 15 DEGREE DESIGN STANDARD, THEY WOULD SEND US, THEY WOULD SAY OUR DESIGN STANDARD WAS 15 DEGREES AND WE USED A 20 MILE AN HOUR WIND, WE WOULD TAKE THE 15 AND THE 20.

AND YOU PUT IT IN A, A FORMULA AND IT TELLS YOU THAT THAT IS EQUIVALENT TO LET'S SAY EIGHT DEGREES.

AND THAT EIGHT DEGREES IS LESS THAN THE 10 DEGREES STANDARD.

THEN THEY, WE DEEMED THAT DESIGN TO BE ADEQUATE.

AND, AND WOODY, THE 72 HOUR, THAT CALCULATION IS JUST A 95% CONFIDENCE LEVEL OVER HISTORICAL PERIOD RUNNING SIMULATIONS.

YEAH, YEAH.

SO WE HAVE ANYWHERE FROM 50 TO A HUNDRED YEARS OF HOURLY DATA AT WEATHER STATIONS ACROSS TEXAS.

AND IF YOU THINK OF ALL THAT DATA, HOURLY DATA STRETCHED OUT FROM THE FIRST TO THE END, YOU MOVE A 72 HOUR WINDOW UP AND DOWN THERE, YOU FIND THE, THE COLDEST 72 HOURS, YOU THROW THAT OUT 'CAUSE THAT'S YOUR 99TH PERCENTILE.

YOU FIND YOUR SECOND COLDEST, THIRD COLDEST, FOURTH COLD, AND YOU WORK YOUR WAY DOWN TO GET TO THE 95TH PERCENTILE.

AND THEN YOU LOOK AT WHAT THE WIND WAS, THE ACTUAL WIND SPEED DURING THAT WINDOW, AND THAT'S WHAT THE NUMBER REPRESENTS.

WHAT IS IT FAIR TO SAY, DO YOU THINK THIS IS ONE OF THE MOST CONSERVATIVE STANDARDS IN THE COUNTRY, BUT BUT ACHIEVABLE ACCORDING TO THE FEEDBACK YOU HAD FROM THE TECHNICAL WORKSHOPS? UM, I THINK, UM, I THINK IT, IT COMPARES REALLY FAVORABLY, FAVORABLY WITH WHAT NERC IS, IS WANTING TO DO AS WELL.

SO I THINK IN SOME CASES IT'S MORE CONSERVATIVE THAN NERC FOR NEW UNITS, IT MAY NOT BE SURE.

SEASONAL ASSESSMENT OF RESOURCE ADEQUACY, THE ONE WE DID FOR THIS SUMMER.

I ALSO WANTED TO GIVE YOU A QUICK UPDATE ON GENERATION INTERCONNECTION ACTIVITY.

UM, OVERALL WE'RE SEEING RECORD NUMBERS AND NEW GENERATORS.

LOOKING AT OUR INTERCONNECTION PROCESS OVER THE LAST 60 DAYS, YOU CAN SEE 59% OF THOSE WERE BATTERIES AND 28% WERE SOLAR AND ONLY 2% WERE GAS TURBINES.

I THINK THAT'S A TELLING NUMBER AND ESPECIALLY IN LIGHT OF SOME OF THE OTHER CONVERSATIONS WE'VE HAD TODAY.

SO ANY QUESTIONS ABOUT THAT? IT'S KIND OF SCARY.

YEAH, IT'S SCARY ISN'T IT? MM-HMM.

? YEAH.

UH, RESOURCE ADEQUACY.

THE, UH, 2023

[02:00:01]

SO THESE NUMBERS ON THEIR LEFT HAND COLUMN ARE THE ACTUAL SARAH NUMBERS.

THIS WAS AUGUST 10TH AT 1800, THE, UH, 85 435 RECORD.

AND YOU CAN SEE THE NUMBERS THAT WE USED IN THE S AND REMEMBER THE SARAH'S NOT A FORECAST.

THE SARAH IS A SCENARIO ANALYSIS SAYING IF WE HAVE A PEAK, IT COULD LOOK LIKE THIS.

AND OUR NUMBERS WERE, WERE PRETTY CLOSE TO THAT PEAK.

UM, I HAD PLANNED ON DOING ANOTHER ONE TO LOOK AT SOME OF THESE 9:00 PM SCENARIOS, BUT THEY KEPT CHANGING AND, UH, WE HAD SO MANY HERE RIGHT BEFORE THE BOARD MEETING THAT IT DIDN'T GET INCLUDED.

BUT WE'LL INCLUDE SOME OF THAT IN THE OCTOBER LOOK BACK ON, ON THE SUMMER.

BUT OUR ST OUR OUR SARAH IS, LIKE I SAID, IT'S NOT A FORECASTING TOOL, BUT IT DID PROVIDE SCENARIOS THAT ACCURATELY REPRESENTED THE ACTUAL SUMMER PEAK CONDITIONS.

SO 85 4 35 FELL RIGHT BETWEEN THE BASE FORECAST AND THE HIGH LOAD FORECAST.

IT WASN'T AT THE EXTREME LOAD FORECAST.

SO WHEN WE PUT OUT THE, UH, EVENTUALLY WHEN WE PUT OUT THE MOURA, WE'LL BE USING THAT SAME FORECAST METHODOLOGY.

AND SPEAKING OF THE MOURA, SO THE SARAH IS THE SEASONAL ASSESSMENT OF RESOURCE ADEQUACY FOUR TIMES A YEAR.

THE MOURA WILL BE THE MONTHLY OPERATIONAL ASSESSMENT OF RESOURCE ADEQUACY.

IT'LL REPLACE THE SARAH FOR THE WINTER THIS YEAR.

SO IN A FEW WEEKS YOU'LL SEE THE FALL, SARAH.

THE FALL SARAH WILL BE FOR OCTOBER AND NOVEMBER OF THIS YEAR.

DECEMBER WOULD NORMALLY BE WHEN WE PUT OUT A WINTER, SARAH, WE'RE NOT GONNA PUT OUT A WINTER SARAH, WE'RE GONNA PUT OUT A MAURA FOR DECEMBER.

THAT WILL BE PRODUCED IN OCTOBER OF THIS YEAR.

SO THREE MONTHS AHEAD OF THE, OF DECEMBER.

AND THEN IN NOVEMBER WE'LL PUT OUT A MAURA FOR JANUARY AND WE'LL START THAT MONTHLY CYCLE.

SO, UM, AT THE NEXT BOARD MEETING, WE'LL WE'LL REVIEW THAT MAURA AND LOOK AT WHAT, WHAT IT'S GONNA LOOK LIKE AND SOME OF THE NEW FEATURES.

AND, UH, WE'RE EXCITED ABOUT DOING THIS.

I THINK IT'S GONNA, IT'S GONNA BE MORE READABLE.

IT'S GONNA HAVE SOME NEW FEATURES.

IT'S GONNA BE A BETTER PRODUCT.

MOST IMPORTANTLY, IT'LL ALLOW US TO CONCENTRATE ON MONTHLY ISSUES, NOT JUST SEASONAL.

'CAUSE YOU KNOW, THERE ARE, JUNE DOESN'T LOOK LIKE AUGUST NECESSARILY.

AND SO HAVING IT BROKEN INTO THE MONTHS WILL WILL BE BETTER.

SO ANY QUESTIONS ABOUT THE MORA? WE LOVE OUR ACRONYMS. YEAH, .

ALL RIGHT.

LARGE LOAD CHANGES.

SO, UH, ERCOT SUBMITTED A SERIES OF BINDING DOCUMENT CHANGES THAT WOULD ALTER HOW SOME LARGE LOADS OPERATE AND ARE STUDIED IN ERCOT.

SO THIS WAS A, UH, AN N P R R A GER A PIGGER A UH, A GLOSSARY CHANGE TO THE, UH, TO THE R.

SO THERE WERE A WHOLE BUNCH OF CHANGES.

UH, WE HELD A WORKSHOP ON AUGUST 16TH TO DISCUSS THESE CHANGES AND RECEIVE FEEDBACK.

WE GOT LOTS OF FEEDBACK.

THIS IS ALL STILL IN DISCUSSION, BUT I PUT DOWN FIVE, UH, FIVE BULLET POINTS HERE.

THESE ARE THE MAIN POINTS OF THIS SUITE OF, OF BINDING DOCUMENT CHANGES.

THE FIRST IS A FASTER, MORE EFFICIENT INTERCONNECTION PROCESS.

WE'VE GOT THESE NEW LOADS THAT WANT TO INTERCONNECT IN LESS IN LIKE 18 MONTHS, 12 MONTHS.

THAT FALLS OUTSIDE OF OUR PLANNING PROCESS.

THIS WILL TAKE CARE OF THAT AND MAKE SURE WE CAN RELIABLY INTERCONNECT THOSE LOADS.

IT'LL ALLOW US TO DO SOME LOAD FORECASTING IMPROVEMENTS TO CAPTURE SOME OF THE UNIQUE CHARACTERISTICS OF THESE LARGER LOADS, THINGS WE'VE NEVER SEEN BEFORE.

SO THIS WILL IMPROVE OUR LOAD FORECASTING.

UM, WE WILL IMPROVE HOPEFULLY OUR VOLTAGE RIDE THROUGH STANDARDS.

AND USUALLY WHEN WE TALK ABOUT VOLTAGE RIDE THROUGH STANDARDS, WE'RE TALKING ABOUT GENERATORS.

IN THIS CASE, WE'RE ACTUALLY TALKING ABOUT LOADS, UH, RAMP RATE LIMITS TO MITIGATE NEGATIVE IMPACTS ON OUR ANCILLARY SERVICE AVAILABILITY.

UH, SOME OF THESE LARGE LOADS, IF THEY HAVE A COMMON PRICE POINT AND THEY SEE A PRICE SPIKE, THEY COULD ALL TURN OFF AT THE SAME TIME, THAT COULD CAUSE SOME, UH, SOME RAMP RATE PROBLEMS THAT COULD, UH, CAUSE A, UH, FREQUENCY PROBLEM.

AND THE LAST IS WE'RE GONNA TRY TO SPONSOR A NEW LOAD CATEGORY THAT'S SOMETHING OTHER THAN FIRM LOAD.

AND THE IDEA WOULD BE LOAD THAT'S PRICE RESPONSIVE, THAT PLANS TO TURN OFF WHEN PRICES GET HIGH.

WE WOULD HAVE 'EM IN THIS CATEGORY AND IF PRICES DO INDEED GET HIGH, WE CAN LOOK IN THAT CATEGORY AND SEE IF THERE ARE ANY THAT HADN'T TURNED OFF.

AND WE CAN REMIND THEM THEY NEED TO TURN OFF.

RIGHT NOW WE DON'T HAVE THAT VISIBILITY INTO THOSE.

AND SO THIS WOULD BE, UM, A NEW CATEGORY THAT THEY COULD SIGN UP FOR JUST SO THAT WE COULD GET THEIR EYES ON 'EM.

[02:05:01]

SO THAT'S THE, THAT'S THE LARGE LOAD CHANGES.

UM, THIS WILL AFFECT SOME LARGE LOADS AND, UH, WE'RE WORKING WITH A LOT OF DIFFERENT PARTIES TO TRY TO GET THESE THINGS THROUGH.

AND SO I, I EXPECT IN FUTURE BOARD MEETINGS YOU'RE GONNA SEE SOME OF THESE THINGS AND THERE'LL BE SOME MORE DISCUSSIONS ABOUT 'EM.

ANY QUESTIONS ABOUT THOSE? COMMISSIONER MCADAM? THANK YOU MR. CHAIRMAN.

WOODY, JUST, UH, SO WE KNOW WHAT'S COMING.

IS THIS NEW LOAD INTERCONNECTION REQUESTS OR IS THIS EXISTING? AND I JUST WANT TO KNOW ON, ON HOW TO DEAL WITH PEOPLE TALKING ABOUT THE VOLTAGE RIDE THROUGH STANDARDS.

SO THE INTERCONNECTION PROCESS WOULD BE FOR NEW LOADS.

GOT IT.

BUT SOME OF THE OTHER CHANGES WILL AFFECT EXISTING LOADS.

YOU COULD LEAVE THAT TO ANOTHER TOPIC AND THEN PEOPLE CAN TALK ABOUT IT.

WOODY, I DID HAVE A QUESTION ON YOUR GENERATION INTERCONNECTION QUEUE.

THERE WAS A COMMENT EARLIER, I THINK IT WAS FROM COMMISSIONER CABOS ABOUT THE POSSIBILITY OF, UH, HOW SHALL WE SAY INTERCONNECTING A RATIO OF SOLAR TO BATTERIES.

IS, IS THERE A, DOES YOUR QUEUE COMPREHEND THAT RATIO THERE? WE DO HAVE A REPORT THAT LOOKS AT CO-LOCATED RESOURCES MM-HMM.

SO IF YOU WANT SOME INFORMATION ON THAT, I CAN BRING THAT FORWARD NEXT TIME.

BUT IT SHOWS THE NUMBER OF, UH, BATTERIES THAT ARE BEING INSTALLED AND THEN ALSO SHOWS THE NUMBER OF BATTERIES THAT ARE BEING CO-LOCATED WITH SOLAR CO-LOCATED WITH WIND, THINGS LIKE THAT.

IS THAT WHAT YOU'RE ASKING FOR? WELL, I'M ASKING IS THERE ANY PRIORITY IN THE QUEUE FOR MORE RELIABLE GENERATION INTERCONNECT? SO FOR EXAMPLE, THIS CO-LOCATION, SO THE ONLY PRIORITY WE PUT IS ON DISPATCHABLE UNITS IS FAR AS IF THERE IS A CONFLICT OR IF WE HAVE TO STUDY SOMETHING, WE ALWAYS PUT THE DISPATCHABLE UNITS FIRST.

AND THAT WAS A BATTERY FIGURE THAT ACTUALLY GOT PASSED IN THE COUPLE YEARS AGO.

THAT WOULD INCLUDE BATTERY WOODY? YES.

YEP.

WOODY ON THIS REPORT, YOU COULD PROBABLY PUT A SHADED AREA FOR THE CODE LOCATED BETWEEN SILVER AND BATTERY.

BUT MY QUESTION IS, UM, CAN YOU TELL US WHAT THESE ARE IN GIGAWATTS, ROUGHLY? IT'S HUGE.

I CAN'T, OKAY.

NOT WITHOUT GOING BACK AND LOOKING.

NO, THAT'S OKAY.

I JUST WASN'T TRYING TO PUT YOU ON THE SPOT.

I JUST WONDERED IF YOU, YOU HAD THAT THE TOP OF YOUR HEAD.

SORRY.

NO, I DON'T KNOW 'EM OFF THE TOP OF MY HEAD.

THANKS.

ANY OTHER QUESTIONS? ALL RIGHT.

AND THEN THERE'S SOME SLIDES IN THE APPENDIX TOO, BUT I THINK THAT'S IT.

THIS IS BOB FLEXON, R AND M COMMITTEE CHAIR, AND HEREBY RECONVENE THIS MEETING.

THANKS WOODY.

WELL, WE'RE NOW SCHEDULED FOR A BREAK.

UM, PROBABLY NEED ONE.

SO WHY DON'T WE RECONVENE AT 3 53 5 0.

MOTION TO APPROVE FOR MY,

[8.2 System Operations Update]

WE'RE GOING TO COME BACK TO WOODY, UH, MOMENTARILY, BUT RIGHT NOW WE'RE GONNA MOVE TO DAN WOODFIN.

THAT'S GOING TO PRESENT THE SYSTEM OPERATIONS UPDATE AGENDA ITEM 8.2.

ON, UH, KIND OF THE LATE EVENING HOURS.

GOOD AFTERNOON AGAIN.

UM, SO AS WE LOOK THROUGH THE OPERATIONS, UH, REPORT FOR THIS, UH, MEETING, ALL OF OUR OPERATIONAL METRICS ARE, ARE TRENDING.

WELL, UM, WE'RE GONNA TALK A LITTLE BIT ABOUT THE, ALL THE RECORD PEAK DEMANDS THAT WE'VE SEEN THIS SUMMER.

AND THEN WE'RE ALSO GONNA KIND OF LOOK AHEAD TO AN SOLAR ECLIPSE THAT'S GONNA HAPPEN IN OCTOBER.

UM, OUR DEMAND, UH, OBVIOUSLY THIS, THIS JUST GOES THROUGH, UH, JULY, BUT WE HIT, UM, UH, NEW JULY PEAK DEMAND THIS TIME, AND OBVIOUSLY WE'VE HIT A LOT MORE SINCE THEN.

UM, FORECAST PERFORMANCE IS STILL LOOKING GOOD ON A NET BASIS, SO THIS IS, IF YOU'LL RECALL, IS LOAD MINUS WIND ERROR, MINUS, UH, SOLAR ERROR.

SO IT'S THE, UH, RIGHT IN LINE WITH WHERE IT'S BEEN THE LAST SEVERAL MONTHS.

UH, FREQUENCIES TO CONTROL ALSO REMAINS HIGH.

UH, WE'RE DOING WELL ON THAT.

UM, TRANSMISSION LIMIT CONTROL IS ALSO LOOKING GOOD.

THE LAST TIME WE EVEN GOT OVER ONE OF THESE INTERCONNECTION RELIABILITY OPERATING LIMITS WAS BACK IN, IN MARCH, UM, AND IT WAS NOT, UM, WE RESOLVED THAT QUICKLY.

ANCILLARY SERVICES, UM, WE'VE HAD, UM, WE'RE STILL PRETTY GOOD ON THE REGULATION, UH, DEPLOYMENT, UH, AS YOU CAN SEE, MAYBE A LITTLE HIGHER THERE

[02:10:01]

BUT OTHERWISE, DURING KIND OF THE PEAK OF THE DAY WHERE WE'RE DOING WELL, UM, NON , NON SPINNING, WE'VE HAD SEVERAL DEPLOYMENTS, UH, IN, IN JUNE AND JULY.

SO THIS IS, LOOKING BACK AT JUNE AND JULY, UH, WE'VE HAD SEVERAL DEPLOYMENTS, UH, PERFORMED WELL.

UM, THEY WERE, THEY WERE ALL FOR, UH, NOT HAVING ENOUGH 30 MINUTES OUT HAD ROOM.

SO LOOKING AT HOW MUCH WE WERE RAMPING IN THAT TIMEFRAME.

UM, E C R S, SO THIS IS KIND OF THE FIRST TIME WE'VE TALKED ABOUT E C R S DEPLOYMENTS.

WE HAD SEVERAL OF THOSE.

UH, THE FIRST FEW WERE BECAUSE OF, TO BRING FREQUENCY BACK UP OF FOLLOWING SOMETHING THAT WAS GOING ON THERE.

UH, THE LAST FEW HAVE BEEN MORE THE KIND OF THING THAT WE WERE TALKING ABOUT, UH, IN THE PREVIOUS PRESENTATION WHERE WE'RE RELEASING OUR RESERVES BECAUSE WE WERE, UH, UH, GETTING STEPPING TOWARDS SCARCITY TYPE CONDITIONS.

UM, YOU CAN SEE ON THE BOTTOM THERE KIND OF SPREAD OVER THE HOURS OF THE TWO MONTHS.

WHAT KINDS OF RESOURCES HAVE BEEN PROVIDING, UH, E C R SS? SO THE, THE PURPLE PART THERE KIND OF ON TOP IS THE ENERGY STORAGE RESOURCES.

YOU CAN SEE KIND OF THE MAJORITY IS COMING FROM A QUICK START GENERATION STILL, UH, RESPONSIVE RESERVE.

WE HAD NO MANUAL DEPLOYMENT OF RESPONSIVE DURING THOSE TWO MONTHS.

SO, HOT TOPICS, AND THIS IS ALMOST A, UH, JOKE, BUT, UH, I THINK WE'RE ALL TIRED OF TALKING ABOUT THE HEAT DOME AT THIS POINT.

UM, BUT IT REMAINS IN PLACE.

IT'S MOVING BACK OVER TEXAS, I THINK, TOWARD THE END OF THIS WEEK.

UM, AND IF WE LOOK AHEAD TO SEPTEMBER, MY UNDERSTANDING IS THAT WE'RE LOOKING AT ONE, TWO DEGREES ABOVE NORMAL, EVEN THROUGH, ON AVERAGE OVER SEPTEMBER.

SO HEAT DOME HAS REALLY CAUSED, UH, TEMPERATURES TO REMAIN ABOVE NORMAL FOR ALL THE TIME, PERIOD.

AND SINCE WE ALL LIVE IN TEXAS, THAT, UH, IS, WE ALL KNOW HOW THAT'S BEEN GOING.

UH, THAT HAS RESULTED IN, UM, 10 NEW PEAK DEMAND RECORDS FOR THE SUMMER, UH, ADDING TO THE, THIS INTERESTING GRAPH THAT IT LOOKS BACK TO, UH, LAST YEAR AS WELL.

AND YOU CAN SEE OVER THE COURSE OF THESE TWO YEARS, WE'VE GONE FROM A PEAK OF 74 OR 75,000 RANGE ALL THE WAY UP TO 85,000.

SO 10 GIGAWATTS OF, OF GROWTH, UH, OVER THE, THAT PERIOD, UM, CULMINATING BACK IN, IN THE 10TH OF AUGUST WITH THIS 85 4 35.

UM, WE, OUR INTENTION IS TO, AS, AS WE TYPICALLY DO, HAVE A FULL REVIEW OF, UH, SUMMER OPERATIONS AT THE OCTOBER BOARD MEETING.

AND SO WE'LL BE SHARING LOTS OF INFORMATION AND INSIGHTS, UH, FROM THIS SUMMER AT, AT THAT MEETING.

DAN, ARE YOU ABLE TO ISOLATE WHAT'S GROWTH VERSUS TEMPERATURE? YES, WE, WE'VE DONE A LITTLE BIT OF PRELIMINARY WORK ON THAT.

UH, JUST REALLY ROUGHLY, UH, THREE GIGAWATTS OF THE FIVE GIGAWATTS THIS YEAR IS PROBABLY DUE TO ECONOMIC GROWTH, AND A COUPLE OF GIGAWATTS IS DUE TO, TO, UH, THE HOTTER TEMPERATURES ON THAT PARTICULAR DAY.

AND THEN SUBSEQUENT DAYS WHEN WE WERE IN THE 85 GIGAWATT RANGE, WE DID THAT BY GOING BACK AND, AND, UH, DOING SOME REGRESSION ANALYSIS ON OUR FORECAST MODELS AND PUTTING IN TEMPERATURES FROM THE PREVIOUS YEARS.

UM, BUT WE'LL, UH, ADD MORE TO THAT, UH, FOR THE, FOR THE OCTOBER MEETING.

AND THEN LOOKING AHEAD, WE'VE GOT A, A SOLAR ECLIPSE, AN ANNUAL ECLIPSE THAT'S GONNA BE PASSING, UH, OVER TEXAS, UH, ON OCTOBER 14TH.

SOMETHING THAT, OBVIOUSLY WITH THE AMOUNT OF SOLAR GENERATION THAT WE HAVE ON THE SYSTEM AT THIS POINT, WE HAVE TO BE, UH, AWARE OF AND BE PREPARED FOR.

UM, OUR INTENTION IS, UH, GENERALLY IT, IT'LL HAPPEN IN THE MORNING, UH, OVER THE NOON HOUR, SO IT KIND OF BE AT THE, THE HIGHEST LEVEL OF, OF SOLAR OUTPUT.

UM, YOU CAN SEE IN THE GRAPH ON THE KIND OF BOTTOM, UH, RIGHT THERE, IF IT WAS A CLEAR SKY DAY AND WE WERE KIND OF AT MAXIMUM, UH, OUTPUT OF THE, THE SOLAR PLANTS, YOU CAN SEE THAT THAT GRAY V IN THE MIDDLE THERE IS KIND OF THE, THE PATTERN THAT WE'D SEE IN THE, OF REDUCTION IN, UH, SOLAR GENERATION OUTPUT ON THAT KIND OF CLEAR SKY DAY.

UM, SO THAT'S KIND OF THE WORST CASE.

IT WOULD DROP ABOUT, UM, UH, I THINK IT'S LIKE A RAMP RATE OF 10.5 GIGAWATTS AN HOUR OR SOMETHING LIKE THAT.

SO OUR INTENTION IS TO, WE'LL, WE'LL BE PUTTING THAT INTO ALL OUR FORECAST MODELS, UH, AHEAD OF TIME.

WE'LL BE LOOKING AT UNIT COMMITMENT, MAKING SURE WE'VE GOT ENOUGH GENERATION LINED UP IN ADVANCE TO, TO COVER AS THE SOLAR STARTS GOING DOWN, AND THEN USING OUR ANCILLARY SERVICES, UH, TO COVER THE KIND

[02:15:01]

OF THE, THE, THE RATE OF CHANGE AS IT GOES THROUGH THE HOUR.

UM, AND WE'RE GONNA BE DOING A, THIS IS KIND OF AN ADVERTISEMENT FOR MARKET PARTICIPANTS.

I GUESS WE'LL BE AT THE ROSS MEETING NEXT MONTH.

WE'RE GONNA BE DOING A MORE DETAILED, UH, PRESENTATION ON EXACTLY WHAT, UH, HOW WE'RE GONNA DO THE, THE MECHANISM.

BUT, BUT THE POINT FOR THE BOARD IS, IS WE WE'RE LOOKING AT THIS AND, UH, WE WILL, UH, BE PREPARED FOR IT.

DAN, IS THERE ANOTHER ECLIPSE IN 24, AND THERE'S ANOTHER ECLIPSE IN IN APRIL OF, OF NEXT YEAR.

AND, UH, THIS ONE'S AN ANNULAR ECLIPSE, SO THAT MEANS THERE'LL STILL BE A LITTLE SUN OUT COMING, UH, HITTING THE PANELS.

THAT'S A TOTAL ECLIPSE.

IT PASSES ROUGHLY FROM LAREDO UP ACROSS DALLAS.

UM, IF YOU LOOK AT THE GRAPH THERE, THAT, THAT KIND OF, THE, THE, THE, THE, THE DIFFERENT BANDS, THE RED BAND IS THE ONE THAT THAT'S MOSTLY ECLIPSED IT, BUT IT'LL STILL CUT DOWN THE SOLAR IN THE OTHER AREAS.

IN THIS CASE, IT'S GETTING A LOT CLOSER TO WHERE THE KIND OF THE CONCENTRATION OF SOLAR IS, BUT IT'LL BE MORE OF A TOTAL ECLIPSE THAN THE ONE IN APRIL.

AND WE'LL START LOOKING AT THAT AS SOON AS WE'RE THROUGH WITH THIS ONE.

I THINK THAT'S IT.

HEY, DAN, I WANTED TO JUST JUMP IN IF I COULD AND GIVE A QUICK UPDATE TO THE, THE BOARD AND, AND TO THE PUBLIC UTILITY COMMISSION.

SO IT'S TIMELY GIVEN THE OPERATIONS UPDATE.

SO TODAY AS, UM, WE'VE NOTIFIED THE, UM, MARKET AT LARGE, WE'VE ISSUED A CONSERVATION CALL FOR THE, UM, ERCOT REGION FOR BETWEEN THE HOURS OF 6:00 PM AND 9:00 PM TONIGHT, DRIVEN FROM TWO PRIMARY FACTORS.

ONE IS, UH, WE'VE SEEN TODAY AS WE'VE SEEN, UH, THROUGH THE LAST WEEK, VERY LOW WIND OUTPUT, UH, OVER THE LAST, UH, FEW DAYS.

AND WE'VE HAD RECENTLY AN INCREASE IN UPTICK IN THE NUMBER OF THERMAL, UH, GENERATING PLANT OUTAGES OVER THE LAST TWO DAYS.

SO TODAY WE'RE STILL DEALING WITH, UH, THE, THE LOW THERMAL OUTAGES, AND WE'RE STILL DEALING WITH THE LOW WIND OUTAGE.

SO THIS EVENING, BETWEEN SIX AND NINE, WE'RE SHOWING SOME VERY, VERY TIGHT CONDITIONS.

UM, WANTED TO, UH, JUST, YOU KNOW, LET EVERYBODY KNOW THAT, YOU KNOW, WE'RE, WE'RE DOING EVERYTHING WE CAN IN TERMS OF TRYING TO POSITION AND MAKE SURE THAT ALL OF THE RESERVES AND RESOURCES THAT WE'VE GOT AVAILABLE ARE GONNA BE AVAILABLE, UH, FOR THIS EVENING'S RAMP.

UH, WE DO OUTREACH, YOU KNOW, ACROSS THE MARKET PARTICIPANT, UH, COMMUNITY TO LET THEM KNOW THAT, YOU KNOW, ANYTHING THAT THEY CAN DO IN TERMS OF THEIR OWN DEMAND RESPONSE PROGRAMS TO MIRROR ER COTS, UH, WOULD BE OF, UH, OF SIGNIFICANT BENEFIT TODAY.

WE REACH OUT, YOU KNOW, TO OTHER MARKET PARTICIPANTS AND IF THERE'S ANY, ANY RESOURCES, CAPACITY OR ANYTHING THAT COULD BE MADE AVAILABLE DURING THAT SIX TO NINE PERIOD TO BRING THOSE ONLINE TODAY TO THE EXTENT POSSIBLE.

UH, WE'VE HAD SOME RECENT, JUST IN THE LAST HOUR, SOME ADDITIONAL GENERATING PLANTS, UM, HAVE SOME MECHANICAL ISSUES AND COME OFFLINE MAKING THE MARGIN OF, UH, CONSERVATION EVEN TIGHTER O OVER THAT RAMP PERIOD THIS EVENING.

AND SO WE FULLY EXPECT, YOU KNOW, TO BE LEVERAGING ALL OF THE RESOURCES AND TOOLS WE HAVE THIS EVENING IN ORDER TO, TO GET THROUGH THE EVENING SOLAR RAMP RELIABLY.

THIS REALLY IS, YOU KNOW, AT THE POINT IN TIME AS WE START TO SEE THE SOLAR DECLINE, UH, WE'RE STILL CARRYING WHATEVER HEAT FROM THE DAY AT THAT, AT THE START OF THAT RAMP.

AND, UH, AND WAITING FOR SOME OF THE WIND TO PICK UP.

THIS MORNING WE WERE SEEING ABOUT 800 MEGAWATTS OF WIND OUTPUT.

RIGHT NOW WE'RE SEEING CLOSE TO ABOUT 4,000 MEGAWATTS OF WIND.

OUR FORECAST ARE SHOWING SOMEWHERE BETWEEN TWO AND 3000 MEGAWATTS OF WIND DURING THE SOLAR RAMP.

SO IT'S A, IT'S A, IT'S, IT'S A FAIRLY LOW LEVEL AND SOMETHING THAT, UH, YOU KNOW, WE'RE GONNA HAVE TO BE KEEPING A CLOSE EYE ON TO SEE HOW THAT CHANGES DURING THAT PERIOD.

BUT JUST WANTED TO TAKE THE OPPORTUNITY DURING THE OPERATIONS UPDATE TO GIVE A REAL TIME UPDATE ON WHERE WE ARE, THE NATURE OF TODAY'S CONSERVATION CALL, AND, UH, AND THE IMPORTANCE OF THAT CONSERVATION CALL ACROSS ERCOT TODAY.

THANKS, PABLO.

THANK YOU CHAIRMAN.

DAN, ANYTHING ELSE OR ANY QUESTIONS? I'M GOING TO TAYLOR, SO, ALRIGHT, THANK YOU.

[Items 8.1.1 & 8.1.2 ]

WE'LL GO BACK TO WOODY'S.

GONNA COVER ITEMS 8.1 0.1, UPDATE ON RELIABILITY STANDARD AND 8.1 0.2 WEST TEXAS SYNCHRONOUS CONDENSER PROJECT.

LET'S TALK ABOUT THE RELIABILITY STANDARD.

I'LL GIVE YOU AN UPDATE ON WHAT'S GOING ON THERE.

SO, UH, THIS WILL, THIS IS AN OVERVIEW OF THE ONGOING WORK, AND WE'VE TALKED ABOUT, UH, WHAT WE'RE DOING WITH THAT.

THIS, UH, THIS WORK CONTINUES TO PROPOSE THREE PART

[02:20:01]

FRAMEWORK OF FREQUENCY, MAGNITUDE, AND DURATION.

INSTEAD OF JUST HAVING A LOSS OF LOAD EVENT TIMELINE, MOVING TO A FREQUENCY, MAGNITUDE AND DURATION, AND ALSO PUTTING IN THAT EXCEEDANCE PROBABILITY, WHICH IS THE LIKELIHOOD THAT THE MAGNITUDE AND DURATION WILL BE HIGHER, UH, THAN A GIVEN RISK TOLERANCE THRESHOLD.

SO, UH, RIGHT NOW WE ARE, UH, WE'RE MAKING THE NEXT SET OF RUNS.

WE'VE PRODUCED THOSE PRELIMINARY RESULTS, NOW WE'RE DOING THE NEXT SET OF RUNS, WHICH IS 48 DIFFERENT RUNS THAT WE WILL HAVE THE FIRST PART OF THOSE AVAILABLE AT THE SEPTEMBER 15TH OPEN MEETING.

AND SO THOSE WILL LOOK AT DIFFERENT LEVELS OF FREQUENCY, MAGNITUDE, AND DURATION, SETTING THOSE LEVELS, AND THEN SEEING WHAT KIND OF GENERATION YOU HAVE TO ADD TO THE SYSTEM TO ATTAIN THOSE LEVELS.

AND ALSO WHAT THE, UH, THE EXCEEDANCE PROBABILITY IS.

AND SO THE, THE CONCEPT HERE IS THAT WE'LL DO THOSE 48 DIFFERENT RUNS, PROVIDE THOSE TO THE PUBLIC UTILITY COMMISSION AND LET THEM LOOK AT THOSE, UM, EXPLORE THOSE A LITTLE BIT MORE, LOOK AT WHAT WE'RE DOING, AND THEY WILL INFORM US, THEN THEY'D LIKE TO SEE MORE OF THIS, LESS OF THAT, ADD SOME OF THIS OR DO SOME VARIABILITY ON SOMETHING ELSE.

SO THIS IS A, THIS WILL KIND OF GIVE THEM A, THE ABILITY TO, TO LOOK AT SOME RESULTS AND THEN DRIVE, DRIVE US FORWARD ON, ON WHAT THE NEXT STEP IS.

SO SOME THINGS THAT HAVE HAPPENED SINCE WE DID THE, THE ORIGINAL, UH, PRELIMINARY RESULTS, WE'VE, WE'VE PUT SOME MODELING UPDATES IN.

UM, WE'VE INCORPORATED UNPLANNED THERMAL OUTAGES AND WEATHERIZATION STANDARD IMPACT MODELING FOR 10 WEATHERIZATION ZONE ZONES.

NOT JUST ACROSS ALL OF OUR CO BUT BY BY ZONES.

WE'VE ADDED THE EFFECT THAT FIRM FUEL SUPPLY SHOULD HAVE FOR FUEL LIMITATION OUTAGES.

UM, INCORPORATED THE, UH, MULTI-FLOOR O R D C, SO THAT'S NOW IN THERE, UM, UPDATED THE COST OF NEW ENTRY.

SO WE PUT SOME, EVEN THOUGH THAT STUDY'S NOT COMPLETED, WE'VE, WE'VE ADOPTED SOME NEW CONE NUMBERS.

THE VALUE OF LOST LOAD COST PARAMETERS, WE'LL HAVE THOSE IN THERE AS WELL.

UM, AND AS A BASELINE, WE'RE USING 85% OF THE URI OUTAGES BEING, WE'RE ASSUMING 85% OF THE URI OUTAGES WILL BE FIXED THROUGH THE WEATHERIZATION PROCESS.

SO WE'RE IN KEEPING THE URI WEATHER IN THE SIMULATION.

IT'S PART OF THE MONTE CARLO DRAW, BUT WE'RE NOT KEEPING THE OUTAGES THAT WE SAW DURING YURI, WE'RE KEEPING 15% OF THEM.

ANY QUESTIONS ABOUT THAT? JUST TO CLARIFY.

SO ON THE YURI, UH, EXAMPLE THAT YOU'RE GONNA U OR URI SCENARIO YOU'RE GONNA USE, YOU'RE ASSUMING A REDUCTION IN WEATHERIZATION OUTAGES, BUT YOU'RE NOT ASSUMING A REDUCTION IN FUEL OUTAGES.

I HOPE THAT'S RIGHT.

THE WE WILL, THE FUEL OUTAGES WILL GO DOWN TOO, BECAUSE WE'LL HAVE THE FIRM FUEL SUPPLY RIGHT.

OPERATED AS WELL, BUT NOT FACTOR THE 85% OR FOR THE WEATHER RELATED OUTAGES YOU FACTOR IN WEATHER.

BUT THEN TO THE EXTENT THAT YOU HAVE GAS PLANTS THAT WHERE THE GAS DOESN'T SHOW UP, THEN THOSE ARE STILL IN THE SCENARIO THEN EX MINUS WHATEVER THE FIRM FUEL DOES.

EXCEPT FOR FIRM FUEL.

OKAY, THANKS.

UH, WE'RE ALSO MOVING TO CLOUD COMPUTING TO REDUCE THE, THE TIME.

SO WE'RE WORKING WITH JP AND THE IT GROUP TO, TO, UH, SPEED UP OUR PROCESSING TIME BY USING SOME CLOUD COMPUTING.

UM, LIKE I SAID, WE'LL PRESENT THE INITIAL SET OF RESULTS TO THE P D C IN SEPTEMBER, AND THEN WE SHOULD HAVE A FULL SET OF THE 48 IN OCTOBER.

SO ANY, IT'S KIND OF A FAST OVERVIEW, BUT ANY, ANY QUESTIONS ABOUT THAT? WE GOT A LOT OF INTEREST IN THIS, A LOT OF PEOPLE ARE ASKING ABOUT IT.

UM, MY REQUEST IS WHEN YOU SEND THE INFORMATION TO THE P U C, MAYBE YOU COULD COPY US.

THEN WE CAN KIND OF KEEP UP WITH THE INFORMATION.

CERTAINLY.

YEAH, WE CAN DO THAT.

SO THERE'S A LOT OF PEOPLE PAYING ATTENTION TO THIS BECAUSE WE'RE OUT IN FRONT OF A LOT OF PLACES.

A LOT OF PLACES ARE, ARE VERY INTERESTED IN HOW THE STUDY'S BEING DONE, HOW WE'RE DOING IT.

WE'RE GETTING A LOT OF REQUESTS TO TALK ABOUT THE PROCESS, UM, EXPLAIN WHAT WE'RE DOING.

SO ONE MORE QUESTION ON THAT.

IN TERMS OF THE VALUE OF LOST LOAD, HAS, IS THAT FINALIZED OR ARE YOU STILL WORKING THAT? NO, WE'RE, WE'RE PUTTING SOME NUMBERS IN NOW, BUT, UH, THE VALUE OF LOST LOAD STUDY'S NOT COMPLETE.

SO REALLY WE CAN DO THE ANALYSIS, UH, THE VALUE OF LOST LOAD WILL NUMBERS CAN BE PLUGGED IN AT THE END OF THE ANALYSIS TO HELP DETERMINE THE, THE MARKET CHANGES THAT'D BE REQUIRED.

THAT'LL BE INTERESTING TO KNOW.

SO THIS IS KIND OF A PREVIEW OF THINGS TO COME.

ALL YOU ME TO JUMP ONTO THIS ONE? OKAY.

SO THIS IS THE, UH, WEST TEXAS SYNCHRONOUS CONDENSER PROJECT.

[02:25:01]

SO ERCOT DID A STUDY ON, UH, THE SYNCHRONOUS CONDENSER, THE NEED FOR SYNCHRONOUS CONDENSERS IN WEST TEXAS.

UM, THAT SHOWS THAT THERE IS A NEED.

NOW, YOU WILL EXPECT TSPS WILL FOLLOW UP WITH ACTUAL PROJECTS THAT WE PLUG INTO THIS STUDY.

AND THOSE PROJECTS WILL BE TIER ONE, PROBABLY TIER ONE PROJECTS THAT YOU WILL ALL GET TO APPROVE OR ENDORSE OR LOOK AT TO ENDORSE.

SO JUST A REAL QUICK, UH, KIND OF A SUMMARY OF WHAT SYNCHRONOUS CONDENSERS ARE.

BASICALLY A LARGE MOTOR THAT HAS THE ABILITY TO REINFORCE THE TRANSMISSION GRID.

UM, AT THE BOTTOM HERE IS A KIND INTERESTING GRAPH, UM, WHERE WE SEE, UH, COMPARE SYNCHRONOUS GENERATOR WITH A STAT COM WITH A SYNCHRONOUS CONDENSER AND A I B R UH, RESOURCE.

SO WIND SOLAR BATTERY TYPE RESOURCE.

SO THE SYNCHRONOUS GENERATOR AND I B R CAN PRODUCE MEGAWATTS.

THEY ALL FOUR CAN PRODUCE DYNAMIC REACTIVE SUPPORT.

SO VAR SUPPORT, VERY FAST VAR SUPPORT, THE SYNCHRONOUS GENERATOR AND THE SYNCHRONOUS CONDENSER CAN PROVIDE SOME SYSTEM STRENGTH.

SO THE 60 HERTZ HEARTBEAT SIGNAL IN THE GRID.

AND BECAUSE THIS IS ALSO A ROTATING MASS, THE SYNCHRONOUS GENERATOR AND SYNCHRONOUS CONDENSER CAN PROVIDE INERTIA AS WELL.

SO THAT'S WHY WE'RE RECOMMENDING THESE SYNCHRONOUS CONDENSERS BE ADDED AND NOT JUST THE STAT COMS BECAUSE OF THESE TWO ADDITIONAL THINGS, THE SYSTEM STRENGTH AND INERTIA THAT YOU GET FROM A SYNCHRONOUS CONDENSER.

WHAT IS A BIG, I'M SORRY, WHAT IS A BIG SYNCHRONOUS ER? HOW MUCH, UM, LET ME THINK WHAT I WAS TOLD.

UH, I THINK A 300 MEGA VAR ONE WAS GONNA BE LIKE 180 MILLION.

SO IT'S GONNA BE AN EXPENSIVE PROJECT.

SO ARE GRID FORMING INVERTERS A POSSIBILITY IN THE FUTURE? YES.

WHY DIDN'T YOU PUT 'EM ON YOUR CHART THERE? WELL, IT WOULD REQUIRE RETROFITTING ALL THE IBR IF, IF LOOKING AT THE COST.

IS THAT ABOUT THE SAME? WELL, I THINK YOU HAVE TO STRENGTHEN THE GRID WE HAVE FOR THE RESOURCES WE HAVE TODAY, AND I'LL SHOW YOU SOME OF THE STATS.

SO, UM, I, I THINK THAT THE COST OF RETROFITTING ALL OF THOSE WOULD PROBABLY WELL EXCEED WHAT WE'RE DOING HERE.

IT ISN'T THE PROBLEM WITH THE, ALL OF THESE, I ALL, WE DON'T HAVE A SINGLE GRID FORMING INVERTER YET THAT I KNOW OF.

AND SO THAT'S PROBABLY TECHNOLOGY THAT'S STILL A FEW YEARS OUT AS WELL.

WELL, IT'D BE GOOD FOR US TO HAVE A POINT OF VIEW OF WHEN AND UNDER WHAT CIRCUMSTANCES WE WOULD CONSIDER IT.

AND IT'S ACTUALLY GONNA NEED TO BE SOMETHING THAT DEVELOPS WITH THE STANDARDS AROUND INTERCONNECTION RESOURCES, ISN'T IT? WHAT, IN TERMS OF, UH, LOOKING AT FUTURE REQUIREMENTS FOR INVERTER BASED RESOURCES, THERE ARE NO, YEAH, THE STANDARDS DON'T REQUIRE INVERTER BASED RESOURCES TO BE GRID FORMING AT THIS POINT.

SO THOSE ARE INVESTMENTS THAT WOULD BE PART OF THE GENERATION RESOURCE COMING INTO ERCOT WITH THE TECHNOLOGY THAT YOU'RE DESCRIBING.

SO THAT WOULD REQUIRE A STANDARDS CHANGE IN TERMS OF WHAT WE WOULD NEED TO REQUIRE.

SO THIS SOLUTION IS SOMETHING WE CAN PUT IN PLACE AND BEGIN NOW TO START DEALING WITH THIS ISSUE.

REALISTICALLY, IF WE WERE TO LOOK AT MAKING A CHANGE TO INTERCONNECTION REQUIREMENTS FOR, UH, IT MIGHT BE 15 OR 20 YEARS BEFORE WE WOULD EFFECTIVELY HAVE ENOUGH IMPACT REFORMING INVERTERS TO MAKE A DIFFERENCE.

SO THIS IS, YOU COULD THINK OF THIS MAYBE AS A BRIDGE TO GET TO.

YEAH, IT'S, IT'S A, IT'S A WAYS OFF BEFORE THAT CAN BE A REQUIREMENT.

WE'RE, WE'RE STRUGGLING AS IT IS WITH, WITH DEALING WITH RIDE THROUGH REQUIREMENTS ON EXISTING INVERTER BASED RESOURCES AND RETROFITTING TO BE ABLE TO NOT HAVE RIDE THROUGH ISSUES.

WE'RE HAVING A LOT OF ISSUES WITH THAT ALONE.

SOMETHING LIKE GRID FORMING INVERTERS IS A SIGNIFICANT STEP FORWARD ABOVE THAT IN TERMS OF AN OBLIGATION OR REQUIREMENT.

NOT THAT IT'S NOT THE RIGHT DIRECTION, AND THAT'S ABSOLUTELY THINGS THAT WE'RE LOOKING AT RIGHT NOW, BUT IT'S, IT'S NOT PRIME TIME YET HERE.

WELL, AND LOOKING AT THE CONCEPT OF, OF, UH, GRID FORMING INVERTERS, BURGERS ARE, IS THE THOUGHT PROCESS THAT THOSE WILL PROVIDE SYSTEM STRENGTH AND INERTIA? BOTH MM-HMM.

IS THAT, WELL, THEY ARTIFICIALLY DON'T NEED THE, THE SYSTEM STRENGTH.

SO THEY, THEY DON'T RELY ON THE 60 HERTZ SIGNAL.

THEY GENERATE THEIR OWN 60 HERTZ SIGNAL.

THEY WON'T SUPPLY INERTIA.

THAT'S WHAT I THOUGHT.

SO THEY STILL HAVE DEFICIENCIES IN TERMS OF, OF GRID STABILITY AND RELIABILITY.

IT'D BE A GREAT STEP FORWARD,

[02:30:01]

BUT, UH, NO INERTIA.

REASONS YOU CAN'T PUT A SINGLE THREE 50 AT EACH PLACE AND YOU HAVE TO, YOU HAVE TO PUT IN, UH, MULTIPLE ONES.

THANKS.

I THINK THAT'S IMPORTANT TO KNOW.

UM, SO SYSTEM STRENGTH IN WEST TEXAS, UH, INVERTEBRATE RESOURCES IN WEST TEXAS, WE'VE SEEN OBVIOUSLY JUST RAPID GROWTH, WIND, SOLAR BATTERIES, ALSO, UM, A PREVALENCE OF IBR IN WEST TEXAS.

AND WE ALREADY HAVE TWO SYNCHRONOUS CONDENSERS THERE THAT WERE INSTALLED.

UM, LET'S SEE, TWO SECRET, WERE INSTALLED IN 2018, SO THERE'S BEEN TWO INSTALLED ALREADY.

SO THIS WOULD BE EXPANDING ON THAT.

AND THE, THE GRAPH THERE SHOWS THIS IS A NATIONWIDE INVERTER BASED RESOURCE DISTURBANCE EVENTS WHERE DIFFERENT AMOUNTS OF OF IVRS HAVE FALLEN OFF THE GRID.

AND THE ONES THAT ARE CIRCLED THERE IN RED ARE ONES THAT ARE IN ERCOT.

SO WHEN WE HAVE 2,500 MEGAWATTS, UM, FALLING OFF THE GRID, THAT'S A, UM, THAT BECOMES AN ISSUE.

AND SO THESE SYNCHRONOUS CONDENSERS WILL HELP REDUCE THAT AMOUNT.

SO THAT SYSTEM STRENGTH ISSUES ARE SOMETHING THAT'S EMERGING NATIONWIDE, WORLDWIDE, REALLY PLACES THAT ARE, ARE PUTTING IN A LOT OF I B R GENERATION.

THIS IS A PROBLEM EVERYWHERE.

SO WOODY, IS THIS SOMETHING WE'RE PROPOSING OR THE LOCAL T AND D PROPOSES OWNS AND OPERATES? I THINK WE ARE PROPOSING THE NEED FOR IT.

THE TD TSPS WILL COME BACK WITH PROJECTS TO FILL THAT NEED, BUT I THINK THAT, UH, IT WAS A JOINT, IT'S, IT'S BEEN A JOINT STUDY WITH THEM.

BUT THIS STUDY WAS AN ERCOT STUDY AND THIS IS THE STUDY WE'LL USE TO ENDORSE THE T S P PROJECTS WHEN THEY'RE BROUGHT FORWARD.

SO THE COST OF THIS WOULD GO INTO THE RATE BASE? YES, YES.

THESE ARE T S P ASSETS.

T S P ASSETS.

UH, PURPOSE, PURPOSE OF THE PROJECT IS TO STRENGTHEN WEST TEXAS SYSTEM AND REDUCE RELIABILITY RISK BY TWO WAYS.

REALLY LIMITING THE NUMBER OF IBR THAT WOULD BE SUBJECTED TO CONDITIONS THAT RESULT IN A LARGE NUMBER OF TRIPS.

SO IF YOU LOOK AT THIS GRAPH OVER HERE, THIS IS WHAT HAPPENS TODAY WHEN WE HAVE AN EVENT.

YOU SEE THESE YELLOW AND RED COLORS ARE LOW VOLTAGE TYPE PLACES.

SO IIV WOULD MAKE THAT YELLOW AND RED AREA LESS DECREASES THE NUMBER OF IVRS THAT ARE SUBJECT TO A PROBLEM.

AND IT ALSO PROVIDES RESILIENCE FOR I B R CONTROL AND MODEL CERTAINTY.

SO WE'RE, WE'RE, WE'RE ALSO WORKING, SO YOU HAVE TO THINK OF THESE SYNCHRONOUS CONDENSERS AS ONE PART OF A SOLUTION.

WE HAVE OTHER THINGS GOING ON TOO.

WE'RE WORKING, UH, NO G 2 45, WHICH IS THE I B R STANDARDS.

THAT'S ONE PART OF THE SOLUTION TO STRENGTHEN THIS.

ANOTHER PART OF THIS SOLUTION ARE THE LARGE FLEXIBLE LOAD STUFF THAT WE TALKED ABOUT EARLIER THAT HAS SOME VOLTAGE RIGHT TO REQUIREMENTS IN IT AS WELL.

SO ALL THREE OF THOSE THINGS YOU CAN THINK OF AS INITIATIVES THAT WILL HELP INCREASE THE STRENGTH OF THE WEST TEXAS SYSTEM.

UH, I THINK IT'S IMPORTANT TO REMEMBER THAT THIS DOESN'T NECESSARILY INCREASE TRANSFER CAPABILITY.

SO YOU REALLY HAVE TO BUILD TRANSMISSION TO BUILD, TO INCREASE TRANSFER CAPABILITY.

UM, KEY TAKEAWAY HERE IS THIS, THIS IS ONE PART OF THE OVERALL STRATEGY TO STRENGTHEN THE WEST TEXAS PART OF THE, OF THE ERCOT SYSTEM GRID.

SOME OF THE STUDY RESULTS, UH, CONDENSERS AT SIX LOCATIONS, A TOTAL OF 2100 M V A WERE IDENTIFIED, UH, ADDING CONDENSERS AT THESE SIX LOCATIONS PROVIDE SIGNIFICANT IMPROVEMENTS.

UH, WE SEE IF YOU THINK ABOUT, IF YOU THINK ABOUT THE, UH, THE ERCOT VOLTAGE PROFILE AS BEING LIKE A PLANE, IT BECOMES 11% MORE STIFF, LESS LIKELY TO MOVE UP AND DOWN WITH THE ADDITION OF THESE, UM, THE AVERAGE REDUCTION OF 21% IN THE NUMBER OF 3 45 AND 1 38 KV BUSES THAT ENCOUNTER SEVERE VOLTAGE DIPS BOTH BEFORE AND AFTER.

SO WE, WHEN YOU THINK ABOUT THAT, THAT, UH, CONTOUR MAP EARLIER, THAT RED AND YELLOW AREA SHRINKS WAY DOWN, WHICH IS THE GOAL HERE.

UM, ADDING EVEN MORE SYNCHRONOUS CONDENSERS MAY OFFER SOME MARGINAL IMPROVEMENT, BUT WE THINK WE'VE OPTIMIZED THAT NUMBER HERE AT THESE SIX LOCATIONS.

SO YOU WOULD GET MORE WITH IF YOU ADDED MORE, BUT, UH, IT'S AT A DECREASING.

UM, DID YOU CONFIGURE THEM? WOULD EITHER, THEY PUT 'EM IN AS PAIRS.

THERE'S, THAT'S BEING TALKED ABOUT RIGHT NOW.

SO, UM, I THINK THIS NEXT GRAPH SHOWS 350 M V A AT THESE DIFFERENT PLACES, WHETHER THAT'S A SINGLE SYNCHRONOUS CONDENSER OR WHETHER IT'S A PAIR IS BEING TALKED ABOUT.

NOW, I THINK SOME OF THE TSPS HAVE TOLD US THAT THEY NEED TO BE INSTALLED IN PAIRS.

ACTUALLY, THE, THE FACT THAT YOU'RE PUTTING 'EM IN SIX LOCATIONS AND YOU ALREADY HAVE TWO LOCATIONS ADD SOME REDUNDANCY IN ITSELF.

BUT, UH, THERE MAY BE SOME TECHNICAL

[02:35:01]

SO ANY QUESTIONS ABOUT, WELL, AND THE OTHER THING I WOULD SAY IS THE COMBINED TOTAL INERTIA, 2000 MEGAWATT SECONDS, ONCE YOU GET THESE THINGS IN AND RUNNING, THAT'S A SIGNIFICANT HELP TOO.

EVEN THOUGH WE HAVEN'T REACHED A POINT WHERE INERTIA IS A ISSUE, WE COULD SEE IT, IT'S IN THE HEADLIGHTS AT THIS POINT.

SO ANY, UH, ANY QUESTIONS? YEAH, SO THESE DAYS ARE GIANT MOTORS AND THEN WHEN THE, IF THE VOLTAGE DROPS AND THEY BECOME THE, THE GENERATOR ESSENTIALLY, SO WHEN THEY'RE ALL IN JUST A LOADED POSITION WHERE THEY'RE JUST SPINNING THEIR RATED FOR WHAT'S THE AGGREGATE LOAD FOR THESE SIX UNITS THAT YOU'RE TALKING ABOUT? I DON'T KNOW WHAT, HOW MANY.

SO BASICALLY WHAT THEY'RE DOING IS THEY'RE TAKING ENERGY OFF THE SYSTEM RIGHT.

AND PUTTING IT IN A SPINNING MASS AND THEN CONVERTING THAT BACK OUT TO MEGA VARS.

MM-HMM.

, UM, I DON'T KNOW WHAT THE, UH, THE MEGAWATT VALUE TO KEEP THESE THINGS RUNNING IS, BUT IT'S NOWHERE NEAR THE WHAT, WHAT YOU GET OUT OF 'EM.

SO IT'S STILL VALUE, I MEAN, EVEN THOUGH YOU'VE GOT SOME PARASITE LOAD, RIGHT? IT'S NOT A ONE FOR ONE TRADE.

YOU'RE NOT TRADING ONE MEGAWATT FOR ONE MEGA BAR.

YOU DO LOSE SOMETHING THOUGH, IN THE, WHAT DO, WHAT'S YOUR TIMELINE ON, ON THIS? UM, AND THIS IS GONNA HAVE TO GET PASSED THROUGH IN RATES.

SO YOU JUST DESCRIBED OVER A BILLION DOLLARS IN COST AT TRANSMISSION.

WHAT ARE WE LOOKING AT? WELL, UM, WE WILL SEE THE FIRST OF THESE T S P PROJECTS COME IN EARLY NEXT YEAR PROBABLY.

AND I'M LOOKING AT MY T S P FRIENDS EARLY NEXT YEAR.

YEAH, THEY'RE A BIG THUMBS UP ON THAT.

AND, UM, I THINK WORKING IT THROUGH THE ERCOT PROCESS WILL PROBABLY BE SIMILAR TO WHAT WE SAW FOR THE SAN ANTONIO PROJECT.

SO THAT'S PROBABLY A THREE OR FOUR MONTH, FIVE MONTH PROJECT.

SO MAYBE MIDYEAR NEXT YEAR COULD COME BEFORE THE BOARD AND THEN FOLLOWING MONTH FOR P E C.

AND THEN I THINK ONCE IT'S APPROVED IT'S PROBABLY A WHAT, TWO YEAR? ONE YEAR.

TWO YEAR, UH, PROCESS FOR, FOR THAT IS FOR, FOR PURCHASING AND BUILDING.

SO THERE WILL BE SOME SUBSTATION WORK HERE THAT HAS TO BE DONE, BUT THERE WON'T BE ANY TRANSMISSION THAT HAS TO BE BUILT.

HOW LONG WILL THEY LAST THE LIFESPAN? YEP.

SO YOU DESCRIBED EARLIER, WOODY, THAT UM, THE SYNCHRONOUS CONDENSERS MAY COME WITH THE NEED FOR ADDITIONAL TRANSMISSION FACILITIES, TRANSMISSION LINES, SUBSTATIONS.

CAN YOU EXPAND ON THAT? YEAH, SUB SUBSTATION FACILITIES.

YOU HAVE TO HAVE A PLACE OF A YARD TO PUT 'EM IN, THINGS LIKE THAT, BUT YOU DON'T HAVE TO BUILD TRANSMISSION TO USE 'EM.

AND SO BECAUSE THEY'RE OVER A HUNDRED MILLION, THEY'RE TIER ONE, THERE'LL BE TIER ONE PROJECTS.

THEY'RE RELIABILITY PROJECTS.

SO YOU COULD CONCEIVABLY SEE, UH, I DUNNO, FIVE OR SIX SEPARATE TIER ONE PROJECTS THAT PLUG INTO THIS STUDY THAT WE'VE, THAT WE'VE COMPLETED.

SO THEM BEING TIER ONE PROJECTS, THEY WOULD BE UP FOR BOARD ENDORSEMENTS, P U C C C N APPROVAL.

AND WOULD YOU BE RECOMMENDING THEM AS CRITICAL FOR RELIABILITY? RELIABILITY.

ANY OTHER QUESTIONS? SPENCER CAN MAKE THIS OVER AND RELIABLE.

SO ENCORE, L C R A WET PREPARING FOR R P G SUBMITTALS.

UM, WE'LL GET THE COST ESTIMATES IN-SERVICE STATES ONCE WE GET THOSE SUBMITTALS.

AND WE'LL USE THIS STUDY TO HELP SPEED THE PROCESS UP.

WE'RE NOT GONNA RESTART THE STUDY TO DO EACH ONE OF THOSE SEPARATELY.

WE'LL LEVERAGE THIS STUDY THAT WAS ALREADY DONE.

AND THAT'S IT.

I THINK THAT'S JUST KIND OF AN INFORMATIONAL FORESHADOWING OF THINGS TO COME.

VERY COOL.

THANK YOU, WOODY.

[Items 8.3 & 8.3.1 ]

NEXT UP IS KENAN.

GELMAN IS THE NEXT TWO ITEMS. AGENDA ITEM 8.3, COMMERCIAL MARKET UPDATE AND ITEM 8.3 0.1, ERCOT STAFF RESPONSE TO INDEPENDENT MON MARKET MONITOR, STATE OF THE MARKET REPORT RECOMMENDATIONS.

AFTER THAT, HE AND CHRISTIE HOBBS WILL PRESENT ITEM 8.3 0.2, THE REAL-TIME CO-OP OPTIMIZATION UPDATE.

SLIDE TOGETHER, THERE'S SOME ADDITIONAL GOOD NEWS, SO I'LL BE SURE TO INCLUDE THAT AS WELL.

SO, UM, WHAT I'M GONNA TAKE YOU THROUGH TODAY, UH, AS PART OF THIS PRESENTATION IS KIND OF UPDATE YOU ON THE, UH, A D R PILOT.

UM, SINCE I PUT THIS

[02:40:01]

UM, AND THEN, UH, PROVIDE SOME INITIAL OBSERVATIONS ABOUT SOME OF THE SUMMER PRICING AND JUST, UH, REMIND YOU THAT, UH, THERE WILL BE A MORE IN DEPTH, UH, SUMMER KIND OF, UH, BREAKDOWN IN DURING THE OCTOBER, UH, BOARD MEETING.

SO, UM, UH, WE HAVE TWO A DERS THAT HAVE THEIR TELEMETRY QUALIFIED.

THEY HAVE SINCE ALSO QUALIFIED FOR NONS SPAN AND BEEN DISPATCHED FOR ENERGY, NOT NONS SPAN, BUT DISPATCHED FOR ENERGY, WHICH ALL OF THOSE ARE AMAZING, UH, ACCOMPLISHMENTS.

UM, WE HAVE BEEN, AS DAN POINTED OUT, U BEEN UTILIZING E C R S THROUGHOUT THE SUMMER AND WE HAVE SEEN, UH, HIGH, UH, SUMMER PRICES.

AND THOSE HIGH PRICES ARE MATERIALIZING RELATIVE TO, UH, RELATIVELY HIGH RESERVES ON, ON THE SYSTEM.

SO WE'VE GOTTEN A LOT OF INQUIRIES ABOUT, UH, THAT ISSUE AS WELL.

SO LET ME FIRST, UH, SPEND A LITTLE BIT OF TIME ON THE, UM, A D E R PILOT.

UM, SO WE HAVE, UH, APPLICATIONS FOR 10.8 MEGAWATTS AND, UM, THAT CONVERTS INTO ABOUT THREE AND A HALF MEGAWATTS OF, UH, NONS SPIN AS I'VE BEEN POINTING OUT BEFORE.

THE DIFFERENCE BETWEEN THAT IS DUE TO, UH, THE DURATION REQUIREMENTS AND, AND THOSE TYPES OF, UH, ACTIVITY.

UM, AGAIN, UM, UH, THERE'S FIVE ADR NOW IN THE ERCOT NETWORK MODEL.

AND THEN I SPOKE ALREADY A LITTLE BIT MORE ABOUT THE TWO ADR THAT, UH, HAVE ACTUALLY FINALIZED THEIR TELEMETRY VALIDATION AND HAVE SINCE MOVED TO, UH, BE QUALIFIED FOR NONS SPIN.

AND, UM, THEY HAVE BEEN ABLE TO FOLLOW BASE POINTS ON ENERGY DEPLOYMENTS, WHICH IS, UM, AGAIN, A, A REALLY BIG DEAL FOR AN AGGREGATION TO BE ABLE TO COME TOGETHER AND, UH, PROVIDE ERCOT WHAT THEY ARE CAPABLE OF DOING.

AND THEN GETTING ERT UH, DISPATCH INSTRUCTIONS FROM THE ERCOT SYSTEM AND BE ABLE TO FOLLOW BASE POINTS IS ONE OF THE BIG HURDLES AROUND KIND OF DISPERSED, UH, MINI GENERATORS OR DISTRIBUTION LEVEL GENERATORS.

NOW, ONE OF THE THINGS THAT WE RAN INTO IN TERMS OF THIS, UH, THE ADVENTURE THAT WE'RE ON IN TERMS OF QUALIFICATION WAS THAT, UM, WE FOUND WE WERE USING A, UH, INAPPROPRIATE, UH, STANDARD TO TRY AND QUALIFY THE UNITS.

UH, AND, AND THIS WAS ACTUALLY CREATING AN IMPEDIMENT FOR THEM QUALIFYING.

AND THE WAY I WOULD DESCRIBE THAT IS WE HAD A 24 HOUR REQUIREMENT, UH, WHEN WE STUDIED HOW THEY QUALIFIED.

AND IT TURNS OUT IN SOME OF THOSE INSTANCES, THE CONSUMPTION OR THE ACTIVITY IS SO LOW THAT EVEN BEING OFF BY A WATT COULD DISQUALIFY THEM, UH, ON A 24 HOUR BASIS.

UM, AND SO WHAT WE'VE DONE IS FOCUS ON THE HIGH USE, HIGH ACTIVITY INTERVALS THAT ARE, UH, EIGHT, UH, AND, AND POSSIBLY 10, 10 HOURS LONG, BUT NOT ON THESE, UH, HOURS WHEN THERE'S REALLY NO ACTIVITY HAPPENING, UH, ON THE SYSTEM.

UH, AND ONCE WE DID THAT, THEY WERE ABLE TO QUALIFY.

NOW I'M TELLING YOU THAT BECAUSE WE'RE GONNA HAVE TO, THIS QUALIFICATION METHODOLOGY WAS IN THE PILOT DOCUMENTS.

WE WERE, UH, ERCOT WAS AUTHORIZED TO E UH, EXERCISE DISCRETION IN AND AROUND THAT QUALIFICATION.

AND WE DID HOWEVER WE WANT THOSE, UH, DOCUMENTS, THE PILOT DOCUMENTS TO REFLECT WHAT ULTIMATELY WORKED.

SO YOU WILL SEE US BRING, UH, SOME CHANGES AS FAR AS THE PILOT DOCUMENTATION TO YOU, UH, PROBABLY AT THE NEXT BOARD MEETING.

LEMME SEE IF THERE'S ANY, ANY QUESTIONS ON THAT.

COULD YOU EXPLAIN HVAC AS A GENERATOR? UM, SO YOU CAN, UH, IT WOULD BE A LOAD RESPONSE THAT'S MIXED LOAD.

SO, UH, ESSENTIALLY I CAN CONTROL EITHER THE H V A C, TURN IT OFF OR, UH, RAISE, RAISE THE TEMPERATURE OR RAISE.

YES, THANK YOU.

AND KENNAN, WAS THERE ANY SOLAR INVOLVED? TO MY KNOWLEDGE, CURRENTLY, NO.

BUT

[02:45:01]

I NEED TO BE CAREFUL BECAUSE THERE IS, UM, A LOT OF THESE POWER WALLS WILL HAVE A ROOFTOP SOLAR ASSOCIATED WITH IT.

AND WE, WE HAVE TO ALSO, AS WE'RE, YOU KNOW, VALIDATING INFORMATION KINDA ACCOUNT FOR THAT.

SO THERE IS A SOLAR, UH, UH, MANY POWER PLANT, UH, IN THE RESIDENCE, BUT THAT'S NOT REALLY WHAT WE'VE QUALIFIED FOR THIS ACTIVITY.

UM, THE NEXT THING TOPIC I WANTED TO TALK TO YOU ABOUT IS JUST KIND OF WHAT WE'VE BEEN SEEING AS FAR AS, UH, THE ERCOT CONTINGENCY RESERVE SERVICE.

IT'S, UH, BEEN IN, UH, AN APPLICATION ABOUT, UH, THREE MONTHS AND, UH, WE HAVE BEEN UTILIZING IT.

THERE'S, UM, BEEN, THERE HAD BEEN 18 DAYS, UH, OF, UH, US USING E C R S TO MANAGE RAMPING ISSUES, PARTICULARLY THE, UH, RAMP THAT WE SEE IN THE EVENING WHEN SOLAR STARTS DROPPING DRAMATICALLY.

UH, WE'VE, YOU'VE SEEN US, UH, DEPLOY E C R SS TO BRIDGE THAT, UH, THAT THOSE CIRCUMSTANCES AND, AND MAINTAIN RELIABILITY.

UM, THE OTHER THING WE ARE NOTING IS THAT E C R S PRICES ARE CLEARING AT A PREMIUM ABOVE OTHER, UH, UH, OTHER ANCILLARY SERVICES.

AND WE ARE GONNA SPEND SOME MORE TIME ANALYZING THIS.

BUT THE ONE THING THAT LEAPS OUT TO ME IS IF YOU LOOK AT THAT, IT'S REALLY CLOSELY FOLLOWING THAT, THAT DATA POINT THAT IS THE, UM, THE ENERGY PRICE.

SO IF YOU THINK ABOUT, UH, IF I'M DEPLOYING A C R S A LOT, THE OPPORTUNITY COST OF PROVIDING E C R SS IS THE PRICE OF ENERGY AND, UM, JUST, UH, AT, AT A BASIC LEVEL THAT, THAT MAKES A LOT OF SENSE TO ME.

BUT AGAIN, WE'RE GONNA, WE'LL SPEND SOME MORE TIME, UH, LOOKING AT THAT.

BUT ONE OF THE INTERESTING THINGS PEOPLE WILL SAY IS, WELL, RESPONSIVE RESERVE IS, IS YOUR MORE PREMIUM, UH, SERVICE, AND THIS IS PRICING ABOVE THAT.

BUT THE DEPLOYMENT EXPERIENCE AROUND, UH, RESPONSIVE RESERVE IS ACTUALLY MUCH LESS FREQUENT THAN, UH, THE CONTINGENCY RESERVE SERVICE.

SO IF I'M, I'M THINKING THAT I'M GONNA GET DEPLOYED THAT DAY, I REALLY HAVE TO THINK ABOUT WHAT THE ENERGY PRICE IS AS MY OTHER OPTION.

UH, ANY QUESTIONS ON, ON E C R S? OKAY, KAHAN, I JUST HAVE ONE QUESTION.

UM, AND I KNOW YOU'RE GONNA CONDUCT SOME ANALYSIS ON THE HIGHER PRICING ON E C R S AND AS YOU EVALUATE THE, THE PREMIUM PRICING, WILL YOU BE LOOKING AT IT FROM A LIQUIDITY STANDPOINT? I MEAN, THERE, THERE'S SOME ASSERTIONS OUT THERE THAT THE PRODUCT IS NOT LIQUID.

UM, YEAH, I, I, I THINK THAT IS, UH, AGAIN, ALSO SOMETHING WE, WE NEED TO SPEND TIME ON.

SO, UM, UH, THAT, THAT ABSOLUTELY WOULD BE PART OF WHAT WE'D LIKE TO TALK ABOUT IN OCTOBER.

THANK YOU, KENAN.

DO, DO YOU RECALL THE MEGAWATTS OF E C R S THAT QUALIFIED AT THE START OF THE SUMMER OF, UH, RESOURCES THAT COULD QUALIFY TO PROVIDE E C R S? I WANNA SAY IT WAS AROUND, UH, 8,000 MEGAWATTS.

UM, I'M LOOKING TO SEE IF IKA IS HERE.

SHE MAY ACTUALLY HAVE, HAVE THE NUMBER BETTER THAN I DO, BUT, UM, UH, SHE'S SAYING NO, NO.

SO, UH, I, I, I, THAT'S THE NUMBER THAT STICKS OUT IN MY, IN MY HEAD.

UM, AND, AND WE'RE PROCURING IN THE 2,500, UH, MEGAWATT RANGE AND IN MOST OF THESE INTERVALS.

THE OTHER THING YOU CAN SEE, IF, IF I WERE TO KIND OF HOVER OVER THIS, UH, IS, UM, UH, THESE, THESE TEAL PRICE SPIKES THAT YOU'RE SEEING, YOU'LL SEE MOST OF THAT PRICE FORMATION IS DUE TO AN OFFER AND THERE ISN'T A VERY LARGE O R D C ADDER.

UM, LET ME MOVE ON TO SOME OF THE SUMMER PRICING IMPACTS THAT WE, THAT WE OBSERVED.

AND SO I, I, I JUST PICKED THE DAY, BUT THERE ARE, UM, UH, OTHER DAYS WHERE, UH, WHERE, UH, THIS SIMILAR BEHAVIOR CAN BE SEEN.

SO WHAT WHAT'S HAPPENING HERE IS, IS IF YOU LOOK AT THE LITTLE, UH, ORANGE DASH LINE, THAT'S OUR, OUR, OUR RESERVES, THE ONLINE RESERVES.

AND BY THE TIME YOU, WE GET INTO THESE HIGH PRICES, YOU CAN SEE THAT, UM, THE OFFLINE RESERVES HAVE PRETTY MUCH BOTTOMED OUT, BUT WE STILL HAVE SOMEWHERE BETWEEN 7,000 AND 8,000, UH, MEGAWATTS OF ONLINE RESERVES, WHICH IS A, A SIGNIFICANT AMOUNT OF, OF RESERVES ON THE SYSTEM YET, UM, YOU'RE SEEING THE PRICE, THE ENERGY PRICE, UH, CLEAR, RELATIVELY HIGH AROUND, UH, $4,000 AT LEAST SPIKING UP TO THERE.

[02:50:01]

AND THE WAY I CAN SEE THE O R D C ADDER IS, IT'S ACTUALLY THIS, UM, UH, THE, THE TWO ADDERS ARE THE, ARE, ARE THE KIND OF MAROON AND, UH, YELLOW LINES THAT ARE BARELY, KINDA, UH, AT THE VERY BOTTOM OF THE, THE GRAPH.

AND YOU CAN SEE THEY ARE, UH, ON THE LOWER PRICE SIDE OF OF THINGS.

IF, IF, IF YOU LOOK AT THAT.

SO THE ADDER PART IS SMALL BECAUSE THE RESERVES ON THE SYSTEM ARE LARGE, BUT THE PRICE IS CLEARING AT, AT A VERY HIGH PRICE.

SO, UM, THERE, THERE'S BEEN A WHOLE BUNCH OF, UH, SPECULATION AND OBSERVATIONS ABOUT THESE, THESE ISSUES.

AND RIGHT NOW WE CAN POINT TO TWO ITEMS. THE FIRST, UH, IS THAT E C R S MOVED RESERVES FROM BEING DISPATCHABLE BY SCED TO ONLY BEING DISPATCHABLE BY SCED ONCE WE RELEASE THEM.

SO E C R SS, THE ADDITIONAL CAPACITY STAYS BEHIND WHAT WE CALL THE HIGH ANCILLARY SERVICE LIMIT UNTIL THE OPERATOR SAYS, OKAY, YES, GO AHEAD AND I WANNA RELEASE THAT.

AND, AND THE RATIONALE IS, UH, DAN ACTUALLY WALKED THROUGH THAT.

HE SAID, YOU KNOW, WHEN I WAS, WHEN WE WERE THINKING ABOUT WHAT THIS SHOULD BE FOR, IT'S TO, UH, KINDA BRIDGE AND MANAGE, UM, THE, UH, RAMPS AND, AND OTHER ISSUES AND HAVE SOME SERVICE THAT WOULD, CAN RESPOND IN, IN 10 MINUTES OR LESS.

SO, UM, THE OPERATORS ARE DISPATCHING THE RESERVES NOW WHEN MAYBE THESE UNITS WERE OFFERING INTO THE MARKET AND DISPATCHING ON PRICE.

UM, THE, THE SECOND, UH, ITEM THAT I WOULD SHARE WITH YOU, AND THIS TIES BACK TO THIS, UM, PROJECT THAT WOODY WAS, UH, DESCRIBING TO YOU EARLIER THAT, THAT YOU JUST MADE A RECOMMENDATION ON, IS THAT WE'VE OBSERVED AROUND 2000 MEGAWATTS OF, UH, ENERGY, UH, BEING BOTTLED UP IN THE VALLEY AND, UH, AND IN AND AROUND CORPUS CHRISTI.

SO A LOT OF TIMES WE THINK ABOUT THAT VALLEY CONSTRAINT AS A OBSTACLE TO FLOWING POWER INTO THE, UH, VALLEY.

BUT THIS SUMMER WHAT WE'VE SEEN IS, UM, THERE'S A PLANT THAT RETURNED FROM BEING A MEXICO POWER PLANT, AND THERE'S A LOT OF WIND THAT HAS HIGH OUTPUT, UM, DURING, UH, PEAK TIMES ALL ALONG THE COAST IN THIS AREA.

AND ESSENTIALLY THE SYSTEM IS TRYING TO USE THAT ENERGY TO SERVE THE LOAD GROWTH THAT IS KIND OF BETWEEN NORTH SAN ANTONIO AND WACO, WHERE WE'VE SEEN LOTS AND LOTS OF LOAD GROWTH OVER TIME, BUT WE DON'T HAVE ENOUGH TRANSFER CAPABILITY FROM THAT AREA UP THROUGH SAN ANTONIO AND INTO WHAT I WOULD SAY, KIND OF AUSTIN, GEORGETOWN, WACO, UH, NEW BRAUNFELS AREAS.

AND THAT ENERGY IS NOT AVAILABLE TO SCED BECAUSE WE'RE SAYING IT'S, IT, IT CANNOT MOVE AS SCED TRIES TO DISPATCH IT.

SO LESS ENERGY AVAILABLE TO SC IS, IS THE REAL CAUSE, BUT THERE'S TWO COMPONENTS TO THAT E C R S IS AT PLAY, BUT ALSO SOME CONGESTION IS AT PLAY AS WE SAW THIS.

SO THAT, THAT'S WHERE WE ARE RIGHT NOW.

I THINK THERE'S A LOT MORE WORK TO DO ON THIS ISSUE.

SO I, I DON'T, UH, I'M, I'M LOOKING FORWARD TO TALKING TO YOU SOME MORE IN OCTOBER ABOUT IT.

I'M HAPPY TO ANSWER ANY QUESTIONS THAT YOU MIGHT HAVE ON, ON THIS ISSUE.

UM, THAT WOULD CONCLUDE MY PRESENTATION.

IS THERE ANYTHING, UH, ELSE THAT I MIGHT BE ABLE TO ANSWER, PABLO? I WILL TRY AND FOLLOW UP ON THE, UM, UH, WHAT'S CLEARED ON E C R SS, THE ON THE LIQUIDITY ITEM.

UM, SO, UH, THE, THIS NEXT PRESENTATION THAT I WANNA WALK, WANTED TO WALK YOU THROUGH IS KIND OF OUR RESPONSE AND OBSERVATIONS AROUND THE INDEPENDENT MARKETER MARKET MONITOR, STATE OF THE MARKET REPORT.

SO I THINK WE'RE AT, OKAY, YOU HAVE, YOU GET MORE OF ME.

[02:55:01]

AND WE'RE REALLY FOCUSED ON THE RECOMMENDATIONS THAT, UH, THE I M M HAS MADE, UM, UH, IN THEIR STATE OF THE MARKET REPORT.

AND, UM, UH, I MEAN, THE KEY TAKEAWAYS HERE ARE THAT THERE ARE 13 RECOMMENDATIONS OF WHICH FIVE ARE NEW.

UM, AND THEY, UH, OBSERVE OUTSIDE THE RECOMMENDATIONS THAT REAL-TIME CO-OP OPTIMIZATION SHOULD BE A TOP PRIORITY AS, AS WE, UH, WORK THROUGH ALL OF THE, UM, ITEMS. NOW, THE OTHER THING I WOULD, UM, UH, SHARE WITH YOU IS THAT MOST, BUT NOT ALL OF THE RECOMMENDATIONS ARE POSSIBLE TO IMPLEMENT WITHIN THE STAKEHOLDER PROCESS.

THERE ARE SOME THINGS THAT, UM, AND I'LL POINT THOSE OUT TO YOU THAT ARE REALLY FROM OUR PERSPECTIVE IN THE COMMISSION JURISDICTION, BASED ON, UH, EITHER SUBSTANTIVE RULES OR PRIOR RULINGS, UM, THAT, THAT, UM, WOULD NEED TO BE, UH, UH, CHANGED FOR US TO MAKE THE CHANGES THAT ARE RECOMMENDED, UH, THEREIN.

SO LET ME FOCUS ON THE NEW RECOMMENDATIONS FIRST.

UM, THE, THE FIRST ONE IS, UH, TO IMPLEMENT A MULTI INTERVAL REAL-TIME MARKET.

AND, UM, THIS IS, UH, ACTUALLY SOMETHING WE'VE LOOKED AT BEFORE.

UM, BUT LET ME JUST SPEND A LITTLE BIT MORE TIME DESCRIBING IT.

THE IDEA IS FOR THE I S O TO LOOK AHEAD, UM, AS, AS FAR AS IT COULD ACCURATELY DO, AND PRE-COMMIT RESOURCES THAT MIGHT HAVE EITHER LONG LEAD TIMES OR ARE, UH, BLOCKY LIKE BLOCKY LOADS, NON-CONTROLLABLE LOADS TO, UH, UH, ALLEVIATE A FORECASTED ISSUE ON THE SYSTEM.

AND THIS, UH, I, THIS MARKET DESIGN DOES EXIST IN, UH, TWO OTHER MARKETS, AND THEY'VE HAD VARYING SUCCESS WITH IT.

ONE IS CALIFORNIA AND THE OTHER IS THE MIDWEST I S O.

BOTH ARE EXTREMELY DEPENDENT ON AN ACCURATE FORWARD FORECAST BECAUSE WHAT THE, UH, THE NEXT KEY COMPONENT IS YOU DO A BINDING, FINANCIALLY BINDING COMMITMENT AROUND THAT FORECAST.

AND WHAT THAT MEANS IS THAT IF FOR SOME REASON CONDITIONS DON'T MATERIALIZE, UH, YOU ACTUALLY MAKE THOSE RESOURCES WHOLE TO THE DISPATCH THAT YOU IDENTIFIED IN, IN YOUR LOOK AHEAD OR MULTI INTERVAL STUDY.

UM, AND THIS IS PART OF THE REASON WHY, UM, UH, THERE'S A MIXED REACTION FROM STAKEHOLDERS.

LOAD HAS HAD CONCERNS ABOUT THE MAKE HOLE PROVISIONS OF, OF THIS.

AND, UH, WE, UH, RIGHT NOW HAVE ONLY BEEN ABLE TO REALLY DEMONSTRATE ABOUT A 45 MINUTE LOOK AHEAD WITH DECENT ACCURACY, UH, IN, IN THAT.

BUT OUR ABILITY TO FORECAST LOAD INTERMITTENT RESOURCES AND, UM, AND LOAD RESPONSE AND THOSE TYPES OF FACTORS ALL END UP PLAYING IN, IN THIS, UH, IN, IN THIS MODEL.

UM, WHEN WE LOOKED AT THIS IN 2017, AND I NEED TO, UH, QUALIFY THAT, UH, INFORMATION WITH, YOU KNOW, IN 2017, ENERGY PRICES WERE RELATIVELY LOW, NATURAL GAS PRICES WERE LOW.

UM, THE ENERGY PRICES ON THE SYSTEM WERE LOW AND THERE WAS NOT ENOUGH RETURN TO THIS LOOK AHEAD AS, UM, UH, AS, FOR EXAMPLE, REAL-TIME CO-OP OPTIMIZATION ENDED UP BEING A VERY OBVIOUS ANSWER FOR THIS.

IT WAS NOT AS CLEAR NOW AS WE KIND OF MOVE THROUGH THE GEARS AND HAVE NEW TYPES OF RESOURCES ON THE SYSTEM, ERCOT STAFF ABSOLUTELY AGREES THAT THIS SHOULD BE SOMETHING THAT WE LOOK AT AND, AND CONSIDER.

HOWEVER, UM, WITH THESE AND MANY OF THE OTHER RECOMMENDATIONS, HOW WE PRIORITIZE THEM IS GONNA BE IMPORTANT BECAUSE, UM, IT'S JUST NOT FEASIBLE TO KIND, UH, PUT A, YOU KNOW, A LARGE VOLUME OF, UH, UH, PROJECTS TO DELIVER WHEN WE HAVE COMPLEX ONES THAT HAVE FANTASTIC PAYBACKS, LIKE

[03:00:01]

REAL-TIME CO-OP OPTIMIZATION AND THOSE TYPES OF THINGS.

SO, UH, WE INTEND TO SPEND MORE TIME ON THIS, BUT, UM, HOW IT FITS WITHIN, UM, EVERYTHING ELSE THAT WE'RE DOING, BOTH FROM THE LEGISLATURE STANDPOINT, RESOURCE ADEQUACY STANDPOINT, AND, AND OTHER KEY LARGE PROJECTS ENDS UP BEING IMPORTANT.

UM, AND AGAIN, I DON'T THINK THE I M M NECESSARILY DISAGREES WITH HA THE FACT THAT WE NEED TO PRIORITIZE THIS WITHIN EVERYTHING ELSE THAT WE'RE DOING, UM, BUT THEY ARE HIGHLIGHTING THAT, UH, THIS PROBABLY NEEDS TO BE KIND OF REEXAMINED AND, AND, AND THOUGHT THROUGH.

I I WOULD JUST ADD THAT THIS LOOKS LIKE A GREAT OPPORTUNITY OR A GREAT APPLICATION FOR ARTIFICIAL INTELLIGENCE AND MACHINE LEARNING.

I MEAN, THAT, THAT, THAT'S TRUE.

I MEAN, THAT HAS TREMENDOUS PROMISE IN TERMS OF MAKING THOSE FORECASTS MORE ACCURATE AND AUTOMATICALLY ITERATIVE IN TERMS OF, UH, GETTING BETTER AND IMPROVING THAT QUALITY.

I CONCUR.

SO CAN I, DOES THAT MEAN YOU, DO YOU THINK YOU NEED TO REDO THE STUDY AND THAT'S WHAT YOU HAVE TO PRIORITIZE? OR DO YOU NEED YOU THINK IT'S A GOOD IDEA? YOU JUST NEED TO PRIORITIZE WHERE IT GOES? SO ULTIMATELY, I THINK GIVEN THE STATUTES THAT, THAT, THAT ARE OUT THERE, UM, WE'RE GONNA HAVE TO REDO THE STUDY RE REGARDLESS, RIGHT? BECAUSE WE NEED TO DEMONSTRATE, UH, YOU KNOW, BOTH WHAT IT WOULD COST TO DELIVER THIS AND REEXAMINE THE BENEFITS TO HELP, UM, THE COMMISSION MAKE, UH, THE, THE BEST CHOICE AND FOR Y'ALL TO MAKE THE BEST CHOICE.

SO I, TO ME, UM, I THINK IT'S BOTH, UH, BUT, UH, IT, IT, IT IS IMPORTANT THAT WE FIND TIME, UH, TO, TO START WORKING ON THIS.

BUT I WOULD SAY THIS, UH, THIS LIES OUTSIDE OF THE IMMEDIATE THINGS THAT, THAT WE'RE WORKING ON, THAT WE'RE PROVIDING THE COMMISSION WITH KIND OF PROJECT DELIVERY DATES AND, AND, UH, THAT TYPE OF ACTIVITY.

SO DID THE I M M MAKE ANY, UM, EVALUATIONS, DID, DID IT PROVIDE ANY EMPIRICAL EVIDENCE OF THE VALUE TO THE CONSUMER ON ANY OF THESE RECOMMENDATIONS? I DON'T RECALL THAT.

I, I DON'T RECALL, BUT, UM, THEY DID BROADLY DESCRIBE THE BENEFITS, WHICH, UH, FOR EXAMPLE, IN THIS ONE, IT WOULD BE AN IMPROVED DISPATCH.

AND IF YOU TALK, THINK ABOUT SOME OF THE OTHER THINGS WE'VE BEEN DISCUSSING WITH LIMITED DURATION RESOURCES ON THE SYSTEM AND MORE FLEXIBLE LOAD, UH, AND TRYING TO PULL ALL OF THOSE THINGS TOGETHER IN AN ENVIRONMENT THERE, UH, I MEAN, TO ME IT'S RELATIVELY STRAIGHTFORWARD THAT IF WE COULD GET THE FORECASTING RIGHT, WE, WE COULD GET SOME MATERIAL IMPROVEMENTS.

BUT THAT HAS, THAT HAS NOT BEEN QUANTIFIED.

THE MAIN THING THAT HAS BEEN QUANTIFIED IN THE PAST IS THE ANALYSIS WE DID, WHICH JUST DIDN'T SHOW THAT MUCH SAVINGS BASED ON 2017 PRICES.

UM, THE, THE NEXT RECOMMENDATION IS TO INSTITUTE A 100% RELIABILITY UNIT CLAWBACK.

UM, AND THIS IS, UH, WE ARE, WE'RE ACTUALLY DOING A PARTIAL ONE HERE THAT WE'VE WORKED WITH, UH, UM, CONSUM, UH, WITH ALL THE STAKEHOLDERS TO MOVE FORWARD.

UM, THEY ARE SAYING WE SHOULD JUST, UH, HAVE A 100% CLAWBACK, UM, AND, UH, AND, AND THAT WOULD IMPROVE, UM, THE RUCK COMMITMENT.

IN OTHER WORDS, MORE RESOURCES WOULD SELF COMMIT.

AND, UM, THAT, UH, THE PARTIAL CLAWBACK THAT EXISTS IN OUR CURRENT SYSTEM SHOULD BE ELIMINATED.

UM, THE, THE NEXT ONE IS, UH, THAT THEY RE, THEY'RE RECOMMENDING TO ALLOW TRANSMISSION RECONFIGURATIONS FOR ECONOMIC BENEFITS.

MAINLY RIGHT NOW WE'RE DOING RECONFIGURATIONS FOR RELIABILITY.

UM, THEY WOULD LIKE TO ADD, UM, ECONOMICS TO THAT.

IT IS A COMPLEX, UH, SOLUTION, AND THIS IS ONE, UM, THAT, UH, WE'VE STARTED ENGAGING ON.

BUT, UM, TO, I GUESS RIGHT NOW WE'RE STILL WORKING THROUGH TRYING TO GET COMFORTABLE WITH THIS RECOMMENDATION AND THEN TRYING TO FIND HOW TO MOVE IT FORWARD OVER TIME.

NO QUESTIONS.

OTHER WORDS, WE, AT THE END OF THE DEPLOYMENT PERIOD, WE SAY, OKAY, E R S RESOURCES, YOU CAN COME BACK AND WE ASSUME THEY COME BACK OVER ABOUT FOUR HOURS, FOUR AND A HALF HOURS ACTUALLY.

UM, THERE'S, THERE, I HAVE TWO MORE, UH, THAT ARE NEW.

UM, THE FIRST ONE IS TO CHANGE THE LINEAR RAMP PERIOD FOR, UH, E R SS, UM, ON THE BACK END.

SO I'VE DEPLOYED E R S I'M RECALLING IT.

THERE'S AN ASSUMED RECALL RATE FOR THOSE LOAD RESOURCES.

[03:05:01]

AND, UM, THE I M M IS OBSERVING THAT DURING THE SUMMER, THOSE, UH, LOADS COME BACK OVER A SH A MUCH SHORTER PERIOD.

THREE HOURS IS THEIR OBSERVATION.

AND BECAUSE WE DO PRICE CORRECTIONS FOR THAT FULL FOUR AND A HALF HOURS, THEY ARE SAYING IT WOULD BE MORE EFFICIENT TO MOVE THAT TO THREE BASED ON THE OBSERVED, UH, UH, BEHAVIOR THAT WE'VE SEEN.

UM, WHEN WE APPROVE THIS IN THE PAST, THERE WAS A REVIEW, UH, REQUIREMENT.

SO WE BELIEVE WE CAN START THE DISCUSSION AROUND THIS ITEM, UH, WITH STAKEHOLDERS IN THE, IN THE NEAR FUTURE USING THE DATA THAT, THAT THE I M M PROVIDED.

DIVERGE DRAMATICALLY AT THOSE TIMES.

THE VERY LAST ONE IS, UM, THAT WE CURRENTLY HAVE A FIVE YEAR LOOKBACK PERIOD ON THE PROBABILITY OF LOSS OF LOAD.

AND, UM, THE, AND THESE ARE THE MU AND SIGMA CALCULATIONS.

AND ESSENTIALLY, UM, THE IMMS POINT IS THAT FIVE YEARS IS TOO LONG.

A LOOKBACK, TOO MUCH HAS CHANGED RELATIVE TO WHAT THE SYSTEM LOOKS LIKE TODAY THAN FIVE YEARS AGO, AND THAT, THAT WINDOW SHOULD BE TIGHTENED, UM, AND UPDATED AT A RATE, UH, THAT IS NOT A FIVE YEAR LOOK BACK, BUT A SHORTER LOOK BACK AGAIN.

UM, I, WE BELIEVE THAT THAT WOULD LEAD TO A MORE ACCURATE CALCULATION OF THESE VALUES AND ARE, ARE WILLING TO WORK ON THOSE.

OKAY, I'M GONNA, UH, SPEED UP A LITTLE BIT, UM, 'CAUSE THESE, THESE TWO DON'T REALLY RE RESIDE IN ERCOT, UM, UH, PURVIEW.

BUT THE FIRST ONE IS TO ELIMINATE THE, WHAT IS CALLED THE SMALL FISH RULE, WHICH EXEMPTS SMALL, UH, UH, RESOURCE OWNERS FROM SOME OF THE MARKET POWER, UH, RULES IN THE, IN THE SUBSTANTIVE, UH, RULES.

AND, UM, THEIR RECOMMENDATION IS TO, UH, ELIMINATE THAT RULE.

UH, THE SECOND ONE IS TO MODIFY THE ALLOCATION OF TRANSMISSION COSTS AWAY FROM THE FOUR COINCIDENT PEAK METHOD.

UM, THEY'RE, UH, DEMONSTRATING THAT THE SUMMER LOAD PEAK IS NO LONGER THE DRIVER FOR TRANSMISSION PROJECTS, AND THERE IS A BETTER WAY TO, UH, CALCULATE AND ALLOCATE THOSE COSTS.

NOW, UH, FORTUNATELY, SOME OF THE RECOMMENDATIONS WE'RE ALREADY WORKING ON, UM, SO I'VE, I'VE TALKED ABOUT REAL-TIME CO-OP OPTIMIZATION ALREADY.

UM, THERE ARE SOME THAT, THAT WE, UH, ARE, ARE NOT PLANNING TO TAKE AN ACTION ON ANYTIME SOON, UM, OR HAVE LONG DURATION, UH, IMPLEMENTATIONS.

UM, SO, UH, THEY, THEY WANNA REEVALUATE NET METERING AT CERTAIN SITES.

UM, CURRENTLY, UH, RESOURCES CAN COMBINE WITH LOAD, UH, BEHIND THE POINT OF INTERCONNECT, AND THEY ONLY PAY FOR TRANSMISSION ON THE NET LOAD.

THEY ONLY PAY ERCOT FEE ON THE NET LOAD, AND THEY ONLY PAY ANCILLARY SERVICES COSTS ON, ON THE NET LOAD.

UM, AND THEY BELIEVE, UH, THAT THAT SHOULD BE, UH, REEXAMINED.

UM, THIS, UH, AT, AT, CURRENTLY WE ARE NOT TAKING ANY ACTION ON THIS, BUT, UM, UH, WE, IF, IF THAT ENDS UP BEING A ELEMENT OF IMPORTANCE, UH, WE'RE, WE'RE WILLING TO LOOK INTO THAT.

BUT NETTING IS GOING TO BE, UH, IS, IS SHOWING UP AS AN ISSUE AND IT'S LIKELY TO GROW OVER TIME, UM, AS YOU HAVE CO-LOCATED RESOURCES AND, AND, UH, LOADS.

UM, THE NEXT ONE IS TO IMPLEMENT SMALLER LOAD ZONES.

THIS IS ACTUALLY SOMETHING ERCOT IS ALSO VERY INTERESTED IN.

UH, IT'S PRI PRIMARILY CENTERED AROUND THE FACT THAT LOAD PAYS AN AVERAGE ZONAL PRICE.

SO THE INCENTIVE TO, UH, FIND WAYS TO REDUCE LOAD IS BASED ON AN AVERAGE.

WE SEE, UM, LMPS REALLY DIVERGING WITHIN A ZONE.

UH, AND, AND THE PREVIOUS EXAMPLE OF THE SOUTH ZONE INCLUDES KIND OF CORPUS CHRISTI AND, AND THE VALLEY.

YOU CAN SEE HOW PRICES

[03:10:01]

I'M SENDING THE SAME PRICE TO LOAD THROUGHOUT THAT, UH, THROUGHOUT THAT ZONE ACTUALLY, IF THE LOAD, UH, IN THE VALLEY CURTAILED, IT MAKES THE PROBLEM WORSE, NOT BETTER.

AND I'M NOT GIVING AS, AS STRONG A SIGNAL TO CURTAIL TO THE LOAD THAT'S NORTH OF THAT CONSTRAINT.

SO A SMALLER LOAD ZONE WOULD HELP SEND MORE ACCURATE PRICE SIGNALS.

UM, THIS LAST ONE WE HAVE ACTUALLY ENGAGED STAKEHOLDERS ON, WHICH IS TO IMPLEMENT A FEE FOR POINT-TO-POINT OBLIGATIONS AND THE DRIVER ON ER CUTTS.

AND WAS THAT THERE WERE SO MANY, UM, OFFERS INTO THE DAY AHEAD ENGINE THAT IT WAS ACTUALLY SLOWING DOWN OUR ABILITY TO CLEAR THE DAY AHEAD MARKET.

WE MADE SOME OTHER CHANGES, AND THAT ALLEVIATED THAT PRESSURE.

IT DOES NOT MEAN THAT'S A PERMANENT SOLUTION.

WE WOULD CONSIDER THIS AS SOMETHING, UH, TO CONSIDER TO IMPLEMENT IF WE AGAIN, START SEEING ISSUES WITH THE DAY AHEAD MARKET CLEARING THAT ARE DRIVEN BY LARGE VOLUMES OF POINT TO POINT, UH, BIDS, UH, IN, IN THE MARKET.

UM, THERE'S, THERE'S TWO MORE IN THIS CATEGORY.

UH, THE RECOMMENDATION IS TO EXCLUDE FIXED COSTS FROM MITIGATED OFFER CAPS.

I TALKED TO YOU ABOUT ONE IN THE VERIFIABLE COST MANUAL EARLIER TODAY THAT, THAT YOU'RE RECOMMENDING.

UH, A CHANGE FOR WHAT THEY'RE SAYING HERE IS, UH, BACK TO THE ORIGINAL NODAL DESIGN, A UNIT WITH A LOW CAPACITY FACTOR HAD A MULTIPLIER ON ITS, UH, ON ITS MITIGATED OFFER CAPS.

AND THE LOGIC AT THE TIME WAS, WELL, IT RUNS LESS, IT HAS FEWER INTERVALS TO CLEAR AT THAT, UH, AT AT, AT A HIGH PRICE AND STAY IN THE MARKET.

SO A MULTIPLIER, IT WAS THOUGHT MAKES SENSE.

UM, I, I THINK THERE'S AN OPEN-ENDED QUESTION AS TO WHETHER OR NOT THAT IS REALLY PROVIDING MUCH VALUE OTHER THAN, UM, THAN HIGH PRICES.

AND, AND THAT'S, THAT'S THE ARGUMENT THAT THEY'RE MAKING THERE.

THIS VERY LAST ONE IS, UM, TO, IT'S SAYING PRICE ANCILLARY SERVICES BASED ON THE SHADOW PRO SHADOW PRICE OF PROCURING EACH SERVICE.

THIS IS A, UH, UH, ECONOMICALLY TECHNICAL WAY OF SAYING ALL THE, UH, RESOURCES THAT ARE OFFERING INTO, UH, ANCILLARY SERVICE SHOULD CONTRIBUTE TO PRICE FORMATION.

AND WHAT WE CURRENTLY DO IS WE LET ONLY GENERATORS SET THE RESPONSIVE RESERVE SERVICE PRICE, AND THEN WE TAKE HALF OF THAT AND AWARD IT TO LOAD.

ACTUALLY IT'S 60% NOW, IF I REMEMBER CORRECTLY, AND AWARD THAT TO LOAD.

BUT WE MANAGE THAT AWARD BY JUST KINDA IN A, IN A RATIO SHARE ASSIGNING THE, UM, RESPONSIVE RESERVE OBLIGATION TO THE LOAD BECAUSE OF THAT, THEY DON'T PARTICIPATE IN PRICE FORMATION, THEY'RE JUST, THEY JUST SIT THERE AS A PRICE TAKER OR AT, AT ZERO.

AND ONLY THE GENERATORS, UH, ARE, ARE SETTING THE PRICE.

AND THE I M M IS RECOMMENDING THAT WE MOVE AWAY FROM THAT PRACTICE.

UM, THIS, THIS CHANGE HAD BEEN, IT WAS A LONG TIME AGO.

IT WAS, I BELIEVE, ALMOST, UH, EIGHT AND A HALF YEARS NOW, BUT IT WAS PROPOSED AS AN N P R R AND DID NOT PASS THE STAKEHOLDER PROCESS ABOUT NINE YEARS AGO NOW.

SO, UM, WE HAVE, UH, NOT, NOT JUST ERCOT, I THINK THAT WAS FILED BY A STAKEHOLDER BACK IN THE DAY, BUT THERE HAS BEEN AN EFFORT TO GET THIS THROUGH THE STAKEHOLDER PROCESS AND IT DID NOT WORK.

UM, SO, UH, CAN I ANSWER ANY QUESTIONS ON ANY OF THE RECOMMENDATIONS? I THINK CANON, COULD I ASK HOW, HOW DOES, UH, THE I M M WANT US TO MOVE AWAY FROM FOUR CP? HOW DOES SHE WANT THAT SET? SO I, I, I, I WOULD, UH, DEFER TO THE I M M, BUT I THINK THERE ARE, UH, THERE ARE SEVERAL PROPOSALS OUT THERE AROUND THAT.

UM, UH, BUT, UH, I WOULD RATHER

[03:15:01]

THAT, WE'LL, WE'LL GET IT OVER THE COMMISSION.

THANKS, I APPRECIATE IT.

I'M UP NEXT AGAIN, IF THERE ARE NO FURTHER QUESTIONS ON, ON THIS TOPIC.

[8.3.2 Real-Time Co-optimization Update ]

THIS, THIS IS ACTUALLY A REALLY SHORT ONE.

UM, UH, I WOULD LIKE, BUT, UH, CHRISTIE AND I BOTH, I'M GONNA PRESENT, BUT CHRISTIE IS MY, MY PHONE A FRIEND.

UM, AND I JUST DID WANNA GIVE A REAL TIME CO-OP OPTIMIZATION UPDATE.

WE'LL BE DOING THIS PRETTY REGULARLY.

UM, I THINK THE KEY TAKEAWAYS IS ARE THAT THE REALTIME CO-OP OPTIMIZATION PLUS B, UH, WHICH IS THIS KIND OF STATE OF CHARGE AND SINGLE MODEL, UH, FEATURES, UH, ARE, UH, WE HAVE BEGUN WORK ON THAT.

UM, WE ARE HAVE SCHEDULED, UH, WORKSHOPS ON THAT, UH, TO, UH, UPDATE THE PROTOCOLS THAT WE HAVE PASSED ALREADY AND ENGAGE ON OUR PROPOSAL AROUND STATE OF CHARGE MANAGEMENT AND SINGLE MODEL AS WELL.

UM, SO, SO THAT IS STARTING.

UM, AND, UH, WE ARE ON, STILL ON TARGET.

UH, I THINK DAN SAID END OF 2026.

UH, I THINK IN OUR FILINGS WE ARE SAYING, UH, MORE GENERALLY SOMETIME IN 2026, WE STILL BELIEVE THERE IS, ARE SOME POSSIBILITY THAT IT COULD BE MID 2026, DEPENDING ON, UH, HOW FAST WE CAN MOVE, UH, ISSUES ALONG.

SO, UM, UH, I THINK THAT THOSE ARE THE MAJOR ITEMS. THERE ARE SOME RESOURCE CONSTRAINTS THAT WE'RE WORKING THROUGH.

UM, BUT THE, UH, WE, YOU KNOW, WE'VE STOOD UP THE PROGRAM.

WE HAVE A STEERING COMMITTEE INTERNAL INTERNALLY, AND WE ARE DRAFTING, UH, DESIGN PROPOSALS TO WORK WITH STAKEHOLDERS IN, UH, UPCOMING, UM, WORKSHOPS THAT WILL PROBABLY TAKE PLACE BETWEEN NOW AND THE END OF THE YEAR.

HAPPY TO ANSWER ANY QUESTIONS ON REALTIME CO OPTIMIZATION.

CAN YOU TALK A LITTLE BIT ABOUT RESOURCES AND SIT WAS BROUGHT UP EARLIER THAT N P R R 1186 IS TAKING RESOURCES AWAY FROM THIS PROJECT, PLEASE.

SO WE HAVE A STATE OF CHARGE ISSUE CURRENTLY, UM, AND THAT WAS KIND OF WHAT DAN WAS DESCRIBING.

UM, AND UNTIL WE CAN RESOLVE THAT, IT'S HARD TO, UH, MOVE RESOURCES ONTO A THREE YEAR OUT SOLUTION THAT THAT'S, THAT'S THE PRIMARY ONE RIGHT NOW.

THERE'S GONNA, I THINK WE'RE GONNA END UP IDENTIFYING OTHER BOTTLENECKS, UH, AS WE WORK THROUGH IT.

UM, JAN'S NOT HERE, BUT I WOULD SHARE WITH YOU THAT HE HAS INSTRUCTED ME, UH, AND, UH, THE PROJECT MANAGER FOR THIS TO TOUCH BASE WITH EVERY DIRECTOR AND SEE, UH, HOW THEY ARE IN TERMS OF RESOURCES WITHIN THE GROUP.

SO THAT IS, UH, A DESIGN OBJECTIVE THAT, THAT WE HAVE.

BUT THE ONE THAT WE TALKED ABOUT IS THE FACT THAT WE HAVE TO DO SOMETHING NOW AROUND THIS ISSUE, UM, AND WE CAN'T PIVOT TO THE LONG-TERM SOLUTION UNTIL THAT'S BEEN RESOLVED.

NIMBLY THAN, THAN WE CAN.

THINK, UM, YOU ARE, UH, YOU'RE STILL UP ON ON ON THAT ONE.

UH, D DOES YOUR GROUP HAVE ANY ANALYTICS ON HOW STATE OF CHARGE HAS BEEN ADDRESSED TO THIS DEGREE, UH, IN OTHER SYSTEMS, AGAIN, OTHER CO OPTIMIZ SYSTEMS AROUND THE COUNTRY? YES, WE DO.

UM, AND, UM, SO IF YOU THINK ABOUT THE OTHER JURISDICTIONS, THE MAIN PLACE THAT THERE'S A LARGE BATTERY PLAY IS IN CALIFORNIA.

UM, AND, UH, UH, THE, THE OTHER, THE JURISDICTIONS OUTSIDE OF CALIFORNIA REALLY DON'T HAVE, UH, A LARGE PLAY IN CALIFORNIA.

THEY ARE HAVING A, A, A SIMILAR ISSUE, BUT THEY HAVE REAL TIME CO-OP OPTIMIZATION ALREADY IN PLACE, AND THEY ARE TRYING TO UTILIZE, UH, A LOOK AHEAD METHODOLOGY TO HELP MANAGE THAT.

UM, ULTIMATELY WHAT THEY'RE DOING NOW, WHICH IS, UM, I, I THINK FAR FROM IDEAL, BUT UNDER CERTAIN CONDITIONS, THEY ARE ACTUALLY TAKING OVER, UH, MANAGING SOME OF THAT.

BUT THEY LIMIT THAT ACTIVITY TO, UH, SHORTAGE CONDITIONS AND, AND THAT TYPE OF SYSTEM, UH, PROBLEMS BEFORE, BEFORE THEY DO THAT.

BUT THEY, THEY HAVE AN ABILITY TO DO CO-OP OPTIMIZATION IN REAL TIME, SO THEY CAN MOVE REQUIREMENTS AROUND MORE

[03:20:01]

THEY DO, UH, HAVE, UH, UH, AN ABILITY TO TRY AND LOOK AHEAD.

I THINK THE SUCCESS ON THAT IS, UM, IS STILL OUT FOR JUDGMENT.

UM, BUT, BUT THOSE ARE THE, THOSE ARE THE TWO ITEMS THAT, THAT THEY HAVE IN PLACE.

IS THAT AKIN TO RUCKING THE RESOURCE, KIND OF WHAT THEY DO? UM, I, I, I, I WOULDN'T, I, IT, IT'S LOOKS A LITTLE DIFFERENT TO ME BECAUSE IT, IT'S MORE LIMITED TO BATTERY STATE OF CHARGE THAN, UH, ALL THE OTHER RESOURCES ON THE SYSTEM.

BUT I THINK IT MIGHT BE FAIR IF SOMEBODY ELSE CAME TO YOU AND SAID THAT THEY'RE RUCKING RUCKING THE UNIT.

SO, YOU KNOW, I, I THINK THERE IS, I I I DON'T WANNA DISMISS THAT TIE.

I HAVE A QUESTION.

CANON D DOES ZER CURRENTLY R BATTERIES? UM, I'M NOT AWARE OF US RUCKING ANY BATTERIES.

UM, AGAIN, IN DAN'S PRESENTATION, HE REALLY FOCUSED ON, UH, BECAUSE BATTERIES ARE SO FAST, UM, YOU, YOU, AS LONG AS THEY HAVE STATE OF CHARGE, YOU, YOU, YOU CAN, YOU USE THEM THROUGH THE REGULAR MARKET CONSTRUCTS, IT'S THOSE TWO HOURS AWAY, FOUR HOURS AWAY RESOURCES THAT IF I DON'T, UH, R THEM AT THAT TIME PERIOD, I JUST COMPLETELY MISS ON UTILIZING THEM AS A SOLUTION.

THO, THO THAT'S OUR REAL FOCUS IN TERMS OF RELIABILITY UNIT COMMITMENT.

IT.

I HAVE ONE, ONE MORE.

MY LAST PRESENTATION IS THE MARKET CREDIT UPDATE.

BOB .

I'VE LOST, LOST TRACK.

UM, UH, THE, THE LAST, UH, I BELIEVE IT'S THE LAST, UH, NO, I ACTUALLY HAVE FUTURE AGENDA ITEMS TO DISCUSS WITH YOU ALSO, BUT, UM,

[8.4 Market Credit Update ]

UM, THERE ARE, AGAIN, NO VOTING ITEMS HERE.

UM, I DO HAVE SOME UPDATED DATA POINTS THAT, UM, MODIFY THESE KEY TAKEAWAYS THAT I REALLY WANNA FOCUS ON BECAUSE, BECAUSE OF, UH, TIMING AND WHEN WE RUN ANALYSIS, SOME OF THIS IS, IS DATED, SO, UM, WE ACTUALLY HAVE HAD TWO DEFAULTS.

THEY ARE BOTH, UM, TRADING TYPE BUSINESS OPERATIONS, AND THEY HAVE, UM, THEIR COLLATERAL COVERED ALL OF THEIR SHORTFALLS.

SO THERE WAS NO, UM, YOU KNOW, FINANCIAL RE REPERCUSSIONS OR ANYTHING LIKE THAT FROM, UH, THEIR DEFAULT.

UM, THE OTHER THING IS THAT, AND ON THESE ARE RECENT RETAIL PROVIDERS, I'M ASSUMING THESE, THESE ARE TRADERS, NOT RETAIL PROVIDERS.

UM, THE, THE OTHER ITEM THAT, UH, NEEDS TO BE UPDATED IS THROUGH, UH, MOST, MOST OF AUGUST T P E WENT UP FROM WHAT WE HAVE HERE OF 1.46 BILLION IN JUNE TO 3.4 BILLION.

AND, UM, THAT WOULD MAKE A LOT OF SENSE IF YOU THINK OF ALL THE HIGH PRICES WE'VE HAD IN JULY AND AUGUST, UH, GOING THROUGH.

SO THERE HAS BEEN SIGNIFICANT INCREASES SINCE WE WERE ABLE TO PUT THIS SLIDE TOGETHER, AND I THOUGHT THAT WAS REALLY IMPORTANT TO UPDATE THESE TWO KEY TAKEAWAYS.

AND HOW MUCH OF THAT IS SECURED WITH COLLATERAL.

UM, SO THAT IS THAT, THAT T P E CALCULATION IS, UM, DRIVES DIRECTLY THE COLLATERAL CALCULATION.

SO IT'S A ONE-TO-ONE OFFSET IT, IT'S NOT EXACTLY ONE-TO-ONE, IT IS, UM, A LITTLE BIT OF A 50 MILLION OR SOMETHING.

IT, IT, IT'S A LITTLE BIT LESS THAN THE 3.4.

AND I'M GONNA ASK AUSTIN ROSELL JUST TO, I THINK HE HAS THAT DATA POINT.

I'M SORRY, COULD YOU ASK THE QUESTION AGAIN? I JUST WONDER OF THE, THE, THE AUGUST NUMBER OF THE 3.4, WHATEVER THE TOTAL T P E GOT TO, HOW MUCH OF THAT IS SECURED BY COLLATERAL? OH, SO, UM, IT'S ACTUALLY ALL SECURED.

WE USUALLY HAVE, AND THAT'S THE LAST POINT HERE, AND WE DON'T HAVE UPDATED NUMBERS ON THAT.

WE USUALLY HAVE EXCESS COLLATERAL.

SO U USUALLY MARKET PARTICIPANTS ACTUALLY HAVE QUITE A BUFFER OF COLLATERAL ABOVE AND BEYOND THE T P E.

TPES RATHER LY GOES UP AND DOWN.

SO WE SEE, WE SEE A, A BUFFER BUILT IN.

SO AUSTIN, I REMEMBER YOU TELLING ME THAT WHAT WE ARE HOLDING IS AROUND $4 BILLION.

SO WE STILL HAVE SOME EXCESS COLLATERAL EVEN AFTER THE ACTIVITY.

AND THIS IS THROUGH LCS OR CASH ESSENTIALLY? IN TERMS OF COLLATERAL, YES.

LCS CASH UNSECURED UNTIL OCTOBER ONE.

AND ACTUALLY THAT 4 BILLION IS THE EXCESS.

I THINK WE HAVE A TOTAL OF AROUND 10 BILLION.

OH, OKAY.

IN COLLATERAL RIGHT NOW.

I'M GLAD YOU CORRECTED IT.

IT AVERAGES AROUND FIVE, PROBABLY AROUND FIVE, BUT AUGUST AND EVERYTHING THAT'S GONE UP QUITE A BIT IN THE LAST COUPLE

[03:25:01]

MONTHS.

UM, SO THERE'S SOME REDUNDANCY IN THIS PRESENTATION.

SO, UH, I'M GONNA, I THINK YOU'VE ALREADY APPROVED OR, OR RECOMMENDED FOR APPROVAL OR ENDORSED 1165, BUT, UM, THERE ARE SEVERAL ADDITIONAL CREDIT NPRS THAT WE'RE WORKING ON.

UH, 1175 IS ONE THIS, UH, MAKES REVISIONS TO MARKET ENTRY, UH, FINANCIAL CALCULATIONS THAT, THAT WE MAKE.

UM, UH, WAIT, THIS, THIS ONE'S BEFORE THE, IT WAS, IT WAS IN THE CONSENT AGENDA, RIGHT? SO, SO THIS ONE ALSO IS, IS MOVING FORWARD.

UH, BUT THAT WAS NOT HIGHLIGHTED EARLIER TODAY.

UM, THERE'S N P R R 1146 WAS, WAS AN N P R R WE WERE CONCERNED ABOUT AND HAD EXPRESSED OPPOSITION THAT HAS BEEN WITHDRAWN BY THE SPONSOR.

UM, BUT THE ISSUE IS SOMETHING WE CONTINUE TO WORK ON, WHICH IS, IS THE COLLATERAL THAT WE ARE REQUIRING APPROPRIATE RELATIVE TO THE MARKET ACTIVITY THAT THAT IS, THAT IS HAPPENING.

UM, AND THE REQUEST IS PARTICULARLY BE MORE GRANULAR FOR ON DAY-TO-DAY CHANGES THAT MAY BE HAPPENING.

UNFORTUNATELY, THAT'S A COMPLEX, UH, SYSTEM CHANGE TO DELIVER AND, UH, A LOT OF OUR CONCERNS REVOLVE AROUND THAT.

UM, THERE'S ALSO N P R R 1184 WHERE WE ARE, UH, UH, 10 ASCA HAS FILED THIS, AND THEY WANT TO UPDATE THE PRO PROCEDURES FOR MANAGING INTERNAL, UH, UH, INTEREST ON CASH COLLATERAL.

UH, THIS IS UNDER REVIEW, UH, AT, AT BY BOTH ERCOT AND, UH, AT P R S.

AND, UM, ERCOT IS, UH, UH, CONTINUES TO WORK ON THIS, BUT THIS IS SOMETHING THAT, UH, WE WANTED TO GIVE YOU A HEADS UP THAT MIGHT BE COMING TO YOU, UH, IN A FUTURE BOARD AGENDA ITEM.

SO DOES THIS AFFECT, BECAUSE NOW WE'VE GOT THIS BONANZA OF THE INTEREST INCOME, DOES IT AFFECT THE INTEREST INCOME? BECAUSE NOW WE'RE, ARE THEY ASKING FOR INTEREST INCOME ON WHAT WE'RE HOLDING OF THEIR COLLATERAL? GO AHEAD, AUSTIN.

YEAH, SO RIGHT NOW WE PAY OUT INTEREST YEARLY.

THIS IS JUST PAYING IT OUT MONTHLY.

YEAH, BASICALLY.

SO IT'S ALL ALREADY, SO THIS IS SEPARATE FROM THE INTEREST INCOME TO SEAN THAT WE SAW EARLIER TODAY.

THE INTEREST INCOME ON THE CASH COLLATERAL GOES BACK TO THE MARKET PARTICIPANTS.

NOW, WE, WE ALSO HAVE A, UH, OUTNUMBERED, UH, N P R R THAT THAT IS BEING WORKED ON, AND THIS IS, UH, REVISIONS TO CREDIT QUALIFICATION REQUIREMENTS OF BANKS AND INSURANCE COMPANIES.

AND, UM, UH, AS, AS WE'RE LOOKING AT, UH, THERE, THERE ARE, UH, LIMITS ON HOW MUCH COLLATERAL YOU CAN TAKE FROM EACH PARTICULAR BANK.

UM, AND WE BELIEVE THAT, THAT THIS ALSO NEEDS TO BE LOOKED AT AS WE'RE TIGHTENING OTHER, UH, COLLATERAL REQUIREMENTS, UM, AND, AND INCREASING THE COLLATERAL REQUIREMENTS.

WE MAY WANNA RELAX WHAT EACH BANK CAN PROVIDE AND, AND INCREASE THAT AS WELL TO ALLOW MARKET PARTICIPANTS TO BE ABLE TO MEET THEIR COLLATERAL REQUIREMENTS.

SO, UM, UH, THIS IS, UH, THIS IS SOMETHING WE'LL CONTINUE TO WORK ON AND, UM, UH, WE WOULD EXPECT TO TRY AND BRING YOU SOMETHING IN THE NEAR FUTURE.

AND THEN, UM, AGAIN, AS WE DISCUSSED IN ITEM SIX, WE ALSO HAVE MADE SOME ADMINISTRATIVE CHANGES TO SOME OF THE DOCUMENTS THAT WE HAVE THAT, UH, YOU HAD ENDORSED EARLIER THAT I HAD KIND OF WALKED THROUGH.

AND, UH, THAT'S MY PRESENTATION.

I'M HAPPY TO ANSWER ANY QUESTIONS THAT YOU MAY HAVE.

WE'LL MOVE TO AGENDA ITEM 8.6 WITH CHRISTIE HOBBS.

ANYTHING MORE FOR CONAN? ALRIGHT, WELL, THANK YOU.

SO RATHER THAN THE UPDATE TO, TO THE R AND M COMMITTEE TODAY, PENDING THE EXPECTED BOARD APPROVAL TO FORM THE TECHNOLOGY AND SECURITY COMMITTEE AT TOMORROW'S BOARD MEETING, THE NEXT TECHNOLOGY AND PROJECTS UPDATE WOULD BE PLANNED FOR THE TECHNOLOGY AND SECURITY COMMITTEE IN OCTOBER.

SO NEXT,

[8.6 Revision Request Status Update ]

AND, UM, TO REQUEST THIS THE, UM, TO LOOK AT THE REVISION REQUEST STATUS UPDATE IN ADDITION TO THE USUAL DATA, CHRISTIE WILL ALSO BE ASKING THE COMMITTEE FOR FEEDBACK ON THE, ON A PENDING REVISION REQUEST, N P R R 1156 PRIORITY REVISION REQUEST PROCESS.

CHRISTIE.

ALL RIGHT,

[03:30:01]

GOOD AFTERNOON.

SO JUST SOME QUICK HIGHLIGHTS.

UM, I KNOW YOU'RE PROBABLY PAINFULLY AWARE BECAUSE YOU HAD A VERY LONG BOARD BOOK TO GO THROUGH, BUT YOU'VE GOT, UH, 31 REVISION REQUESTS THAT ARE IN FRONT OF YOU.

UM, 87% OF THOSE WERE UNANIMOUS COMING THROUGH THE STAKEHOLDER PROCESS, SO A LOT OF SUPPORT FROM EVERYONE INVOLVED TO GET THOSE THROUGH.

UM, ABOUT 97% OF 'EM WERE SPONSORED BY ERCOT.

SO I THINK ALL BUT MAYBE ONE, UM, WERE SPONSORED OR STARTED IN THE PROCESS BY ERCOT.

AND WHEN YOU LOOK AT 'EM FROM A DOLLAR IMPACT O OVER, ALMOST TWO THIRDS OF 'EM HAVE NO DOLLAR IMPACT TO ERCOT TO IMPLEMENT.

SO JUST SOME, SOME QUICK STATS ON ALL THE REVISION REQUESTS THAT YOU'VE BEEN LOOKING AT.

ONE OTHER NOTE, UM, THAT I WANTED TO HIGHLIGHT, UM, IS THE AGING REVISION REQUEST.

UH, THAT LIST HAS REALLY SHRUNK DOWN.

WE'RE DOWN TO ABOUT FOUR, UM, ON THE CURRENT LIST.

UM, SO A LOT OF ATTENTION'S BEEN PAID TO WORKING THROUGH THOSE, AND I THINK THE ONES THAT ARE STILL ON THERE HAVE, HAVE GOOD REASONS FOR STILL BEING ON THE LIST.

SO NO NEED FOR CONCERN OR ALARM ABOUT THOSE.

UM, AS BOB SAID, WE DID WANNA GET SOME FEEDBACK FROM YOU ALL.

THERE HAVE BEEN CONTINUED DISCUSSIONS ON N P R 1156, AND I'LL JUST KIND OF REFRESH YOUR MEMORY A LITTLE BIT ABOUT THAT.

SO WE HAD DISCUSSIONS WITH YOU ALL ABOUT HOW TO TRY AND MAYBE SPEED UP SOME OF THE REVISION REQUESTS THROUGH THE PROCESS.

SO IF THERE WAS SOMETHING THAT THE P U C DIRECTED ERCOT TO DO OR SOMETHING THAT YOU, THE BOARD WOULD LIKE TO DIRECT ERCOT TO DO, WE PUT IN OR PROPOSED A PROCESS THAT WOULD HELP EXPEDITE THAT THROUGH THE STAKEHOLDER PROCESS.

NOW SINCE THAT TIME THERE'D BEEN DISCUSSIONS IN THE STAKEHOLDER PROCESS, THERE WAS ALSO DISCUSSIONS OVER THE LEGISLATURE AND ALSO GUIDANCE THAT CAME OUT ABOUT HOW THE P U C GIVES ERCOT DIRECTION.

UH, THE COMMISSION'S GONNA BE UNDERGOING A PROJECT AND EFFORT TO, UH, PUT FORMAL RULES IN PLACE AROUND THAT.

UM, SO WE EXPECT FUTURE GUIDANCE FROM THE COMMISSION ON HOW THEY'LL PROVIDE DIRECTION AND THEN WHAT THE SUBSEQUENT REVISION PRO PROCESS WOULD LOOK LIKE FROM THAT.

THERE'S ALSO A CURRENT PROCESS IN PLACE TODAY.

YOU'VE SEEN URGENT REVISIONS COME THROUGH THAT ALLOWS US TO EXPEDITE AND GET THINGS TO YOU QUICKER IF NEEDED.

SO THE DISCUSSION AND THE STAKEHOLDER PROCESS HAS BEEN THAT THE, UM, SPONSOR MAY WANT TO WITHDRAW THAT REVISION REQUEST SINCE THAT ACTUALLY GOT SPURRED BY SOME OF YOUR DISCUSSIONS.

AND I DON'T WANNA SAY DIRECTION, UM, BUT FROM THOUGHTS HERE AT THIS MEETING, WE JUST WANTED TO GIVE YOU AN UPDATE ON THAT, SEE IF ANYBODY HAD ANY CONCERNS.

OTHERWISE WE WOULD BE SUPPORTIVE OF SUPPORTING THAT WITHDRAWAL.

AND THEN STARTING OVER ONCE WE GET, UH, FURTHER DIRECTION FROM THE COMMISSION AND THEIR RULEMAKING PROCESS, I'M NOT SEEING ANYBODY JUMP TO THE MIC, SO I'M GONNA TAKE THAT AS THERE'S NO ISSUES WITH THEM MOVING FORWARD, WITHDRAWING, AND WE CAN REVISIT THE PROCESS.

SO WE'LL CONTINUE WITH THE EXISTING PROCESS AND YOU'LL BE PROPOSING, UH, POTENTIALLY A NEW PROCESS IN THE NEAR FUTURE.

[9. Future Agenda Items ]

THE FUTURE AGENDA ITEMS, KAN WILL PRESENT AGENDA ITEM NUMBER NINE.

SO, UM, THANK YOU.

UH, I, I THINK THE KEY THINGS TO TALK ABOUT ARE THAT, UM, WE WILL, UH, SOME OF THE THINGS I'VE ALREADY TALKED ABOUT, BUT, UM, ASSUMING THE BOARD FOLLOWS THE RECOMMENDATION, WE'LL BE BRINGING 1186 BACK, UM, TO, WITH A, AN EFFORT TO ADDRESS THE, UH, NARROW, UH, DIRECTION THAT THAT WAS GIVEN.

UM, I THINK, UH, THAT, UH, YOU KNOW, CONSISTENT WITH THIS, WE ALSO WOULD HAVE THAT, UH, SUMMER ASSESSMENT, UH, OF, OF THE MARKET TO SHARE WITH YOU.

AND THEN, UM, UH, THERE ARE, UH, A FEW OTHER, UH, ITEMS, UH, THAT, THAT ARE HIGHLIGHTED HERE.

SO IF THERE'S LIKE A, A GRAY BOX, THOSE ARE ITEMS THAT, UH, WOULD BE, UM, UH, ON THE AGENDA FOR, FOR THE NEXT R AND M MEETING.

SO, UH, UH, WE WOULD HAVE, UH, FOR EXAMPLE, UH, LOOKING ON CREDIT, WE WOULD HAVE A REVIEW OF COMPANY REPORTS ON THE STATE OF CREDIT PRACTICE, UH, AND, AND, UM, UH, WE WOULD HAVE THE REGULAR MARKET PERFORMANCE REPORTS, ET CETERA.

I'M HAPPY TO ANSWER ANY, ANY QUESTIONS, BUT TO ME, THE BIG ONES ARE, UH, THAT, THAT WE'D BE BRINGING TO YOU IS, IS THE SUMMER KIND OF ASSESSMENT THAT WE'RE GONNA MAKE AND, AND WHATEVER SOLUTION WE CAN COME UP WITH ON 1186,

[03:35:03]

LET'S JUST TALK ABOUT 1186.

THE FACT THAT WE SENT IT BACK DOESN'T MEAN WE EXPECT TWO MONTHS OF WORK TO HAVE TO GO INTO IT.

IT COULD TAKE TWO WEEKS TO COMPLETE AND YOU CAN MOVE ON TO RTC DASH B, RIGHT? YES.

AND, AND WE ARE ALREADY STARTING TO MOVE, UH, RESOURCES AS, AS THEY, UH, INTO R T C.

UM, THE, AND, AND, UM, IT'S ACTUALLY ONLY SIX WEEKS, UH, BETWEEN THE NEXT BOARD MEETING.

UM, BUT YES, AS, AS, AS SOON AS WE CAN GET THAT REVOLVE RESOLVED, EXCUSE ME, WE WOULD, UH, BE TRANSITIONING RESOURCES OVER AND, AND I THINK THE NARROW FOCUS THAT YOU GAVE HELPS US, UH, ON THAT IN TERMS OF MOVING RESOURCES OFF OF ONE AND ONTO THE OTHER PROJECT THAT'LL HAVE TO BE TO, TO THE BOARD AND APPROVED BY THE P E C RIGHT? PAR? PARDON? THAT WILL HAVE TO BE APPROVED BY THE P E C.

ALL THE NPR R ULTIMATELY HAVE TO BE APPROVED BY THE PUBLIC UTILITY COMMISSION.

AND KAN, WE'RE, WE'RE, WE'RE NOT STARTING OVER FROM SCRATCH ON, ON 1156, RIGHT? I MEAN, WE'RE JUST, I THINK, NO, WE'RE EXCLUSIVELY FOCUSED ON THIS ISSUE OF, UH, ENERGY NOT BEING DISPATCHABLE DURING, UH, SCARCITY CONDITIONS THAT, UH, THAT WAS IN OUR, OUR BASE, UH, BASE COMMENTS.

SO ONE OF OUR CONCERNS WAS THAT WE DIDN'T, ONE OF OUR CONCERNS WAS THAT WE DIDN'T WANT TO SLOW DOWN REAL-TIME CO-OP OPTIMIZATION IN TERMS OF THE TIMELINE.

SO JUST FOR CLARIFICATION, THIS DOES NOT SLOW IT DOWN.

W WE DO NOT SEE, UM, UH, WORKING ON THIS FOR SIX MORE WEEKS, SLOWING DOWN R T C.

THERE ARE OTHER RESOURCES AND OTHER ISSUES.

SO WE, WE CAN KEEP PLUGGING AWAY AT, AT DELIVERING REAL-TIME OPTIMIZATION PLUS STATE OF CHARGE PLUS SINGLE MODEL.

THANKS KENAN.