Apr 22, 2024 Reliability and Markets Committee Meeting

WE, WE RESCHEDULED THE FEBRUARY TAC MEETING AND MOVED IT UP IN ANTICIPATION OF, OF HOPEFULLY GETTING THOSE COMMENTS RESOLVED AND HAVING THIS, UH, PUSHED FORWARD FOR YOUR CONSIDERATION AT THE FEBRUARY BOARD MEETING.

UH, SO ERCOT INITIATED NORE 2 45 IN RESPONSE TO GROWING PENETRATIONS OF INVERTER BASE RESOURCES, INCREASES IN THE VOLUME AND MAGNITUDE OF DISTURBANCES BEING OBSERVED IN WHICH IVRS WERE NOT ABLE TO RIDE THROUGH EVENTS.

UH, THIS NOGA PROPOSED IS TO REPLACE THE CURRENT VOLTAGE RIDE THROUGH REQUIREMENTS FOR INTERMITTENT RENEWABLE RESOURCES WITH VOLTAGE RIDE THROUGH REQUIREMENTS FOR INVERTER BASE RESOURCES AND TYPE ONE AND TYPE TWO WIND POWER GENERATION RESOURCES, AND ALSO PROVIDES NEW FREQUENCY WRITE THROUGH REQUIREMENTS FOR THOSE RESOURCES.

WITH INTERCONNECTION AGREEMENTS DATED AFTER JUNE 1ST, 2024, I BELIEVE IT'S HELPFUL TO PROVIDE A BIT OF, OF A HISTORY ON HOW THIS HAS UNFOLDED TO AT TAC OVER THE LAST SEVEN MONTHS.

SO I'M GONNA START WITH AN OVERVIEW OF HOW THAT'S KIND OF EVOLVED AND THEN, THEN GET TO THE DISCUSSION AND VOTE FROM THE MARCH MEETING.

NOCA 2 45 HAS BEEN AN EXTREMELY ACTIVE TOPIC IN THE STAKEHOLDER PROCESS.

DISCUSSIONS BEGAN AT THE INVERTER BASED RESOURCE TASK FORCE, UH, BACK IN LATE 2022 WHEN THE NOER WAS IN DRAFT FORM.

SINCE ERCOT FILED THE NOER IN JANUARY OF 2023, UH, THERE HAVE BEEN SIGNIFICANT DISCUSSIONS THAT HAVE TAKEN PLACE IN MULTIPLE STAKEHOLDER GROUPS, INCLUDING TAC UH, RELIABILITY AND OPERATIONS SUBCOMMITTEE, OPERATIONS, WORKING GROUP DYNAMICS, WORKING GROUP, AND THE INVERTER BASE RESOURCE TASK TASK FORCE.

THERE HAVE BEEN 76 ITEMS AS OF LAST COUNT FILED ASSOCIATED WITH THIS NOER IN THE FORM OF COMMENTS AND COMMITTEE REPORTS.

IN ADDITION TO THE MANY PRESENTATIONS, UH, AT THE PREVIOUS PREVIOUSLY MENTIONED STAKEHOLDER GROUPS, UH, THIS NOER WAS DISCUSSED AT TAC FOR THE FIRST TIME IN AUGUST OF 2023 UNDER THE ROS REPORT, AND HAS BEEN AN ITEM RIGHT FOR VOTING AT TAC SINCE LAST SEPTEMBER AFTER IT WAS NARROWLY VOTED OUT OF ROS WITH A 55%, UH, APPROVAL RATING TO, TO MOVE IT FORWARD.

IT'S NOTABLE THAT THE THRESHOLD, UH, FOR AN AFFIRMATIVE VOTE THAT TAC IS HIGHER THAN THAT.

AT ROS, UH, AN ACTION OF TAC REQUIRES AFFIRMATIVE VOTES OF TWO THIRDS OF THE ELIG ELIGIBLE VOTING MEMBERS WHILE A MOTION OF A SUBCOMMITTEE PASSES WHEN THERE IS A SIMPLE MAJORITY.

AT THE SEPTEMBER TAC MEETING, UH, ERCOT REQUESTED TAPING OF THE NOVA TO ALLOW TIME TO COLLECT ADDITIONAL DATA THAT WOULD BE HELPFUL IN UNDERSTANDING CAPABILITIES AND FEASIBILITY OF MEETING THE, THE VARIOUS REQUIREMENTS UNDER THE NOGA.

ERCOT DISCUSSED A PLAN TO ISSUE RFIS TO, TO OEMS, AND TO RESOURCE ENTITIES, UH, TO GATHER THAT TYPE OF INFORMATION ON A, ON A RESOURCE BY RESOURCE BASIS AND CIRCLE BACK TO TAC IN IN DECEMBER TO, YOU KNOW, WORK THROUGH THE RESULTS OF THAT RFI.

AT THE SEPTEMBER MEETING, WE ALSO DISCUSSED BIFURCATING THE, THE TOPIC OF THE NOER TO SPLIT THE ISSUE BETWEEN EXISTING AND NEW FACILITIES.

YOU KNOW, GIVEN THAT THE EXPECTED TIMELINE FOR THE RFI IS GONNA TAKE A LITTLE WHILE, UH, WE HAVE TO GATHER THOSE FACTS AND, AND KIND OF THE EXPECTATION THERE WOULD BE ANOTHER COUPLE OF TURNS OF THE LANGUAGE.

ONCE WE HAD THAT INFORMATION AT, AT THE SEPTEMBER MEETING, ERCOT WAS APPROACHED TO THAT OPPOSED TO THAT APPROACH 'CAUSE THEY FELT IT MADE MORE SENSE TO, TO KEEP THE NOER TOGETHER, UH, SO THAT EVERYBODY CAN SEE HOW THE REQUIREMENTS WORK TOGETHER, BOTH FROM AN EXISTING AND FUTURE RESOURCE PERSPECTIVE.

AT THE OCTOBER TAC MEETING, UH, THE NOGA REMAIN TABLE TABLED PENDING THE RESULTS OF THE RFI.

UH, AND ERCOT REITERATED THE URGENCY AND DESIRE TO TAKE THE NOGA TO THE DECEMBER BOARD OF DIRECTORS MEETING IN DECEMBER.

UH, TAC REVIEWED THE RESULTS OF THE RFI.

ERCOT MADE A GOOD PRESENTATION ON THAT, AND WE HAD SOME PRETTY ROBUST DISCUSSION.

UH, THE RFI RESULTS HIGHLIGHTED THE NEED TO CONSIDER CERTAIN EX EXCEPTIONS BASED ON TECHNICAL LIMITATIONS.

AND, YOU KNOW, THAT TOPIC REALLY DROVE SOME DISCUSSION ON WHAT WOULD BE EXPECTED FROM AN UPGRADE PERSPECTIVE ON EXISTING RESOURCES, YOU KNOW, FOR WHETHER IT'S SOFTWARE, SOMETHING THAT CAN BE ADDRESSED THROUGH SOFTWARE UPGRADES, PARAMETER CHANGES, SETTINGS CHANGES, OR IF IT'S SOMETHING THAT REQUIRES MORE OF A HARDWARE APPROACH.

AND THEN BASED ON THAT, WHO, WHO MAKES THE DECISION ON WHAT'S REASONABLE AND WHAT THAT PATH FORWARD IS? THE NOGA REMAIN TABLED IN ANTICIPATION OF ADDITIONAL COMMENTS FROM ERCOT AND OTHER MARKET PARTICIPANTS BASED ON THE RFI RESULTS.

UH, MOVING TO JANUARY, UH, WE DISCUSSED NEW COMMENTS THAT CAME IN FROM, FROM ERCOT AND FROM THE JOINT COMMENTERS THAT WERE FILED IN RESPONSE TO THE RFI RESULTS AND DISCUSSIONS AT THE DECEMBER TAC MEETING.

UH, THERE APPEARED TO HAVE BEEN A POSSIBILITY OF ALIGNING, UH, THOSE COMMENTS WITH, WITH MORE TIME OR AT LEAST GETTING TO CONSISTENT LANGUAGE FROM A, FROM A STARTING POINT AND DELINEATING WHAT THOSE CORE DIFFERENCES ARE, UH, FROM THE POSITIONS.

SO TAC ASKED ERCOT AND JOINT COMMENTERS TO COLLABORATE AND MOVE FORWARD IN THAT DIRECTION AND REQUESTED THE COMMENTS BE FILED A WEEK IN ADVANCE OF THE NEXT MEETING SO THAT ALL VOTING TAC MEMBERS WOULD'VE ADEQUATE TIME TO, TO CONSIDER THOSE ITEMS. UH, WE ALSO, IT'S NOTABLE THAT

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UH, THAT DID NOT HAPPEN AT THE FEBRUARY TAC MEETING.

UH, ERCOT PROVIDED A POSITIVE REPORT THAT THAT ERCOT AND JOINT COMMENT OR DISCUSSIONS, UH, WERE GENERALLY POSITIVE AND MAKING PROGRESS, BUT THEY HAD YET TO REACH A CONSENSUS.

ERCOT REQUESTED THAT THE NOVA REMAIN TABLED, SO THEY CONTINUE TO WORK WITH JOINT COMMENTERS ON REACHING A CONSENSUS OR AT LEAST A MORE ALIGNED, UH, COMMENTS WITH SPECIFIC DISCUSSION POINTS.

UH, FOR OUTSTANDING ISSUES THAT TAC COULD ADDRESS.

UH, THE TAC MEMBERS REQUESTED THE DOCO JOINT COMMENTERS, UH, SHARE THOSE CORE ISSUES WITH TAC FOR DEBATE AHEAD OF THE NEXT MEETING.

AND, AND TAC LEADERSHIP AGAIN REQUESTED THAT THAT COMMENTS BE FILED ON A TIMELY BASIS.

UH, SO FOLKS WILL BE ABLE TO CONSIDER THOSE AND ALSO TO POTENTIALLY HAVE A NEUTRAL PARTY PRESENT SOME FRAMEWORK FOR THE KEY DIFFERENCES.

SO THIS BRINGS US TO THE MARCH TAC MEETING, UH, AHEAD OF MARCH.

UH, COMMENTS WERE FILED BOTH BY ERCOT AND THE JOINT COMMENTERS, UH, ERCOT AND JOINT COMMENTERS.

WERE UNABLE TO AGREE ON WHAT I'M TERMING A, A NEUTRAL FRAMEWORK OR TO PRESENT THE KEY DIFFERENCES TO TAC GIVEN THAT THERE WERE SOME FOUNDATIONAL DIFFERENCES IN THE, IN THE LANGUAGE, UH, OF THE COMMENTS AT THE MEETING.

WE HAD ROBUST DISCUSSION ON, ON BOTH SETS OF COMMENTS, AND MUCH OF THE DISCUSSIONS WAS CENTERED AROUND FIVE KEY TOPICS.

UH, THE FIRST TOPIC WAS THE EFFECTIVE DATE OF THE REQUIREMENTS.

UH, SO ERCOT HAD PROPOSED A JUNE, 2023 EFFECTIVE DATE AS FAR AS APPLYING THESE TWO, TWO NEW RESOURCES.

AND THE JOINT COMMENTERS HAD PROPOSED JUNE, 2024.

UH, AND MOST OF THE DISCUSSION CENTERED AROUND THE CONCERN OF APPLYING REQUIREMENTS RETROACTIVELY, UM, WHICH COULD CREATE A CONCERN OF INVESTOR CERTAINTY ON, YOU KNOW, FROM A, I'VE ALREADY GOT A CONTRACT, ALREADY GOT AN INTERCONNECTION AGREEMENT IN PLACE, AND NOW I'VE GOT THESE REQUIREMENTS THAT ARE BEING APPLIED RETROACTIVELY AS OPPOSED TO, YOU KNOW, ERCOT CONCERN WITH THE LARGE VOLUME OF INVERTER BASE RESOURCES THAT ARE BEING ENTERED INTO THE QUEUE AND INTER ENTERING INTERCONNECTION AGREEMENTS IN THAT YOUR TIMEFRAME, ERCOT ESTIMATED THAT NUMBER TO BE ABOUT 20 TO 30 GIGAWATTS.

UH, SO THERE'S A DISCUSSION ON, ON THE TRADE OFF BETWEEN THOSE TWO ITEMS. OTHER KEY AREAS WERE, WERE TECHNICAL REQUIREMENTS AND THE, THE EXCEPTION PROCESS, UH, COMMERCIAL REASONABILITY RELATED TO THAT.

UH, SO IF THERE IS AN EXCEPTION, WHAT WHAT IS THE, THE EXPECTATION FROM A COMMERCIAL STANDPOINT ON, YOU KNOW, WHAT, WHAT'S THAT? WHAT'S THE BAR THAT HAS TO BE MET FOR IT TO BE DEEMED COMMERCIALLY REASONABLE OR NOT? UH, THERE'S SOME DISCUSSION ON DISCONNECTION PROVISIONS IF ORCO DETERMINES THAT THERE, THAT RISK IS TOO HIGH OF A PARTICULAR RESOURCE TO REMAIN INTERCONNECTED.

AND THEN THERE IS A, A BROADER DISCUSSION ON THE QUANTIFICATION OF, OF THE RELIABILITY RISK, UH, RELATED TO IBR AND THE DIFFERENT REQUIREMENTS THAT WERE UNDER CONSIDERATION.

VARYING OPINIONS WERE EXPRESSED ON EACH OF THESE TOPICS, AND IT WAS NOT POSSIBLE TO, TO TAKE A, A CAFETERIA STYLE APPROACH IN REAL TIME AT THE MEETING.

UH, BASED ON THE FOUNDATIONAL LANGUAGE AND LEGAL TONE OF THE COMMENTS COMING FROM DIFFERENT STARTING POINTS AND THE FACT THAT NOGA 2 45 WAS NOT BIFURCATED EARLIER IN THE PROCESS, TECH TAC MEMBERS WERE FACED WITH CHOOSING BETWEEN TWO PACKAGE OPTIONS AND WEIGHING THE RELIABILITY AND ECONOMIC IMPACTS OF THEIR OPTIONS.

GIVEN THAT THIS HAS BEEN AN ITEM UP FOR DISCUSSION AT TAC FOR, FOR OVER SEVEN MONTHS, AND IT APPEARED THAT WE HAD REACHED A POINT WHERE ADDITIONAL PROGRESS BETWEEN ERCOT AND JOINT COMMENTERS WAS UNLIKELY BASED ON THE FOUNDATIONAL DIFFERENCES IN LANGUAGE, UH, THAT CAME TO THE, TO THE MARCH TAC MEETING FOR REVIEW.

SO AT THE MARCH T MEETING, UH, TAC VOTED ON THREE VERSIONS OF COMMENTS.

UH, THE FIRST VOTE WAS FOR A, A VOTE ON THE ERCOT VERSION.

UH, THAT VOTE FAILED WITH 44% APPROVAL.

UH, THE SECOND VOTE WAS ON JOINT COMMENTERS VERSION.

UH, THAT VOTE NARROWLY FAILED WITH A 65% APPROVAL.

UH, THE THIRD VOTE WAS FOR THE JOINT COMMENTERS VERSION WITH SOME ADDITIONAL CHANGES THAT WERE PROPOSED BY THE RETAIL ELECTRIC PROVIDER SEGMENT.

UH, THAT, UH, BASICALLY TOOK A PIECE OF, OF LANGUAGE OUT OF THE ERCOT COMMENTS, UH, THAT WOULD REQUIRE ERCOT TO PROVIDE APPROVAL, UH, WHEN, WHEN A RESOURCE ENTITY MADE MODIFICATIONS OR REPOWERS TO THEIR, TO THEIR LOCATION, UH, TO ESSENTIALLY MAKE SURE THAT, YOU KNOW, INSTALLING MOVING TO THE NEW EQUIPMENT DOESN'T ACTUALLY MAKE THE SITUATION WORK WORSE.

UH, ATTACK MEMBERS SUPPORTING THE COMPROMISE WANTED TO REACH COMPROMISE SO THAT AN APPROVAL RECOMMENDATION, UH, WOULD COME OUT OF TAC WITH THE STAKEHOLDER POINT OF VIEW.

AND ALSO TO AVOID HAVING, YOU KNOW, TWO SEPARATE APPEALS POTENTIALLY HERE AT THE BOARD OF DIRECTORS FOR, FOR YOUR REVIEW.

UH, THAT VOTE PASSED WITH A 69% APPROVAL ON THE FINAL VOTE.

THERE WERE EIGHT TAC MEMBERS FROM THE COOPERATIVE AND INVESTOR-OWNED UTILITY MARKET SEGMENTS THAT OPPOSED THE JOINT COMMENTERS VERSION.

UH, THE PRIMARY REASONS NOTED BY THE OPPOSING ENTITIES WERE THE POTENTIALLY SIGNIFICANT AND NEGATIVE RELIABILITY RISKS THAT ERCOT HAD ARTICULATED.

UH, ONE ITEM ITEM OF NOTE IS THAT ONE OF THE OPPOSING ENTITIES NOTED CONCERNS WITH ERCOT PROPOSED APPROACH TO BACKDATING THE EFFECTIVE DATE AND HOW THAT CREATES

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REGULATORY UNCERTAINTY FOR FUTURE INVESTORS.

IN ADDITION TO THE EIGHT OPPOSING VOTES, THERE WERE THREE ABSTENTIONS.

TWO OF THOSE WERE FROM THE CONSUMER SEGMENT AND ONE FROM THE INDEPENDENT GENERATOR SEGMENT.

UH, AS A TAC LEADERSHIP STANDPOINT, WE ALSO SOUGHT FEEDBACK FROM, FROM ALL OF THE AFFIRMATIVE VOTES TO MAKE SURE THAT WE UNDERSTOOD WHY FOLKS WERE VOTING THE WAY THAT THEY WERE VOTING.

UM, AND, AND IN SUMMARY, THOSE KIND OF FALL INTO A COUPLE DIFFERENT CATEGORIES, BUT I'LL JUST SUMMARIZE 'EM FOR YOU REAL QUICK.

UH, THE BIGGEST ONE IS THAT, THAT FOLKS FEEL THAT THIS, THE JOINT COMMENTER'S VERSION, UH, THAT PASSED, UH, PROVIDES A REASONABLE BALANCE IN THE IMPACTS AND BENEFITS FROM BOTH A RELIABILITY AND ECONOMIC PERSPECTIVE.

LOOKING AT THE SPECTRUM OF THIS, UH, THERE WAS ALSO A, A NEED TO WE MOVE SOMETHING FORWARD TO ADDRESS THE REAL RELIABILITY RISK AND GET REQUIREMENTS ON THE BOOKS FOR THE EVER-GROWING INTERCONNECTION QUEUE.

AND SINCE THERE WAS, UH, AN UNWILLINGNESS TO BIFURCATE THE ISSUE EARLY IN THE PROCESS, WE JUST NEED TO GET SOMETHING ON THE BOOKS.

UH, THERE IS CONCERN WITH THE RETROACTIVE COMPLIANCE DATE THAT I MENTIONED EARLIER, UH, PROPOSED BY ERCOT AS FAR AS THAT CREATING REGULATORY UNCERTAINTY AND BEING A MATERIAL CONCERN FOR INVESTOR CONFIDENCE.

UH, AND THEN THE FINAL ITEM WAS UNCERTAINTY ON THE MAGNITUDE OF, OF ACTUAL REMAINING RELIABILITY RISK AFTER RESOURCES ARE UPGRADED WITH COMMERCIALLY REASONABLE EFFORTS WITH THE SOFTWARE UPGRADES, THE PARAMETER CHANGES, AND THINGS OF THAT NATURE, UH, WHICH, UH, IS NOTED AS BEING ABLE TO ADDRESS A VAST MAJORITY OF THE, OF THE RESOURCE CONCERNS.

SO I'LL STOP THERE AND BE HAPPY TO TAKE ANY QUESTIONS.

COLIN, WE'LL HOLD THE QUESTIONS FOR NOW.

WE'LL MOVE ON TO, UM, THE ERCOT, UM, PRESENTATION ON THIS VERY TOPIC, AND AT THE END WE'LL OPEN UP QUESTIONS FOR EVERYONE THAT'S BEEN, UH, PRESENTING.

THANKS, COLIN.

SO BEFORE I GO TOO MUCH INTO THE PRESENTATION, I WANT TO KIND OF PROVIDE SOME CONTEXT AROUND THIS, UH, NOER.

IN, UH, FEBRUARY OF 2011, THE ERCOT REGION EXPERIENCED A VERY COLD WINTER EVENT.

A LOT OF GENERATION TRIPPED OFFLINE.

ERCOT DIDN'T HAVE SUFFICIENT GENERATION AVAILABLE TO SERVE THE LOAD ON THE SYSTEM, AND HAD TO SHED 4,000 MEGAWATTS OF CONSUMER LOAD FOR SEVERAL HOURS TO BALANCE WITH THE GENERATION THAT WAS AVAILABLE.

FOLLOWING THIS EVENT, THERE WERE RECOMMENDATIONS TO ENACT MANDATORY REQUIREMENTS FOR WEATHERIZATION, BUT, UH, POLICY MAKERS AT BOTH STATE AND FEDERAL LEVEL CHOSE NOT TO IMPLEMENT THOSE REQUIREMENTS.

INSTEAD, INDIVIDUAL GENERATOR OWNERS WERE ENCOURAGED TO IMPLEMENT THE BEST PRACTICES WITH THE EXPECTATION THAT, THAT THE COMMERCIAL RE FOR COMMERCIAL REASONS, THEY WOULD IMPLEMENT THESE BEST PRACTICES.

IN FEBRUARY, 2011, WE ALL RECALL THAT UP TO WE HAD ANOTHER COLD WEATHER EVENT, AND UP TO 52,000 MEGAWATTS OF GENERATION TRIPPED OFFLINE OVER THE COURSE OF SEVERAL DAYS DUE TO PRIMARILY TO INSUFFICIENT WEATHERIZATION, UM, FORCING ERCOT TO SHED UP TO 20,000 MEGAWATTS OF LOAD FOR UP TO THREE DAYS WITHIN WEEKS, POLICY MAKERS AT THE STATE LEVEL HAD IMPLEMENTED MANDATORY AND ENFORCEABLE WEATHERIZATION STANDARDS.

THE LACK OF RIDE THROUGH EVENT HAS THE POTENTIAL TO BE MUCH MORE HIGHER RISK TO THE ERCOT SYSTEM.

IF WE HAVE A LACK OF RIDE THROUGH EVENT, WE HAVE A FAULT ON THE SYSTEM.

WE LOSE GENERATION THAT CAUSES ADDITIONAL GENERATION TO BE LOST.

WE'VE GOT A MASSIVE, UH, POWER IMBALANCE INACTIVATING THE UNDER FREQUENCY LOAD SHED SCHEME ON THE SYSTEM THAT COULD POTENTIALLY CAUSE A COLLAPSE OF THE ENTIRE SYSTEM.

THAT'S, AND THAT WOULD HAPPEN IN A MATTER OF SECONDS AS OPPOSED TO MINUTES TO HOURS DURING A WEATHERIZATION TYPE LOSS OF GENERATION EVENT.

UM, THIS IS NOT A THEORETICAL EVENT.

UM, WE'VE HAD SEVERAL, AND IT'S ON ONE OF MY SLIDES LATER, SEVERAL EVENTS THAT ARE SMALLER WHERE GENERATORS HAVE NOT RIDDEN THROUGH.

AND THESE ARE REALLY A BELLWETHER FOR A POTENTIAL LARGER EVENT.

IN THE SAME WAY THAT 2011 COLD WEATHER LOSS OF, UH, GENERATION WAS A BELL WAS A BELLWETHER FOR YURI.

UM, THE LANGUAGE THAT WAS ENDORSED BY TAC DOES NOT PROVIDE THAT MANDATORY AND ENFORCEABLE LANGUAGE AND STANDARDS THAT WE NEED TO PROTECT AGAINST THIS KIND OF EVENT.

WHILE THERE ARE NUMEROUS FLAWS IN THE TAC APPROVED LANGUAGE, ERCOT

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HAS THREE PRIMARY CONCERNS THAT I'M GONNA ADDRESS AS I GO THROUGH THE PRESENTATION.

ANY ASSESSMENT OF EXEMPTIONS, EXTENSIONS, OR FUTURE UPGRADES MUST CONSIDER THE IMPACT ON THE BROADER IMPACT ON SYSTEM RELIABILITY, AS WELL AS THE COMMERCIAL CONSIDERATIONS FOR THE INDIVIDUAL GENERATION OWNERS.

AN IBR SHOULD NOT BE ABLE TO AVOID WRITE THROUGH REQUIREMENTS BY REPEATEDLY REQUESTING EXEMPTIONS AFTER IT FAILS TO PERFORM TO THEIR CURRENTLY STATED APPLICABLE REQUIREMENTS.

AND FINALLY, NEW IBR WITH AN INTERCONNECTION AGREEMENT DATE MORE THAN SIX MONTHS AFTER WHEN THIS NOVA WAS FILED, IT'S ABOUT 20 TO 30 GIGAWATTS OF THEM SHOULD BE REQUIRED TO MEET THE IEE 2,800 BASED REQUIREMENTS AND NOT LIMIT THEIR PERFORMANCE TO WHAT'S REQUIRED UNDER THE LEGACY REQUIREMENTS.

SO AS I GO THROUGH THIS, I'LL COME BACK TO THOSE THREE POINTS, BUT THOSE ARE REALLY THE THINGS THAT CONCERN US THE MOST.

UM, WE HAVE GOT TO NOT IGNORE THE LESSONS OF THE PAST FROM WINTER WEATHERIZATION.

WE'VE GOT TO, UM, IMPLEMENT MANDATORY AND ENFORCEABLE RIDE THROUGH REQUIREMENTS NOW RATHER THAN WAITING UNTIL AFTER WE HAVE A HUGE EVENT ON THE SYSTEM THAT CAUSES CONSUMER LOSS OF LOAD.

SO NOW I'LL, I'LL MOVE TO THE PRESENTATION.

WHAT IS RIDE THROUGH? WE'VE, WE WENT, WE HAD A PRESENTATION ON THIS THAT I GAVE BACK IN JUNE OF LAST YEAR, UM, WHERE IF YOU HAVE A LIGHTNING STRIKE ON THE SYSTEM OR SOME OTHER KIND OF EQUIPMENT FAILURE, THE VOLTAGE OR THE FREQUENCY IN AN AREA WILL BE DEPRESSED.

AND BASICALLY ALL THE GENERATORS IN THAT AREA HAVE TO BOTH CONTINUE TO PROVIDE REAL POWER, CONTINUE TO PROVIDE REACTIVE POWER, AND STAY SYNCHRONIZED TO THE SYSTEM FREQUENCY.

AND THAT'S WHAT WE'RE REFERRING TO IS RIDE THROUGH.

UM, IF THEY DON'T RIDE THROUGH, THERE'S THE POTENTIAL FOR THE LOSS OF THIS GENERATION RESULTING IN THE LOSS OF ADDITIONAL GENERATION, WHICH COULD CAUSE A COLLAPSE ACROSS EITHER OF THE LOCAL AREA OR AS BROAD AS THE WHOLE SYSTEM IF, IF THE IMBALANCE BETWEEN GENERATION AND LOAD IS SEVERE ENOUGH.

WE'VE HAD QUITE A FEW OF THESE FAILURES.

THE TWO, THE COUPLE THAT I TALKED TO YOU ABOUT BEFORE WERE RELATED TO, WERE RELATED TO THE ODESSA AREA.

WE TALKED ABOUT THE TWO ODESSA EVENTS THAT OCCURRED IN 2021 AND 2022.

THE THOSE MAJOR EVENTS WERE INVESTIGATED BY NERC.

THERE WERE MULTIPLE RECOMMENDATIONS THAT CAME FROM THOSE.

BUT AS YOU CAN SEE IN RED HERE, WE'VE HAD A LOT OF OTHER EVENTS THAT ARE SMALLER, BUT COULD HAVE BEEN A BIGGER DEAL IF THE OUTPUT OF THOSE GENERATORS THAT TRIPPED HAD BEEN HIGHER WHEN THE EVENT OCCURRED.

THE OTHER THING I'LL NOTE IS THAT THE NUMBER OF EVENTS THAT WE'RE SEEING OF THIS TYPE IS GOING UP OVER TIME AS WE ARE GETTING ADDITIONAL IBR ON THE SYSTEM.

AND SO AS WE'RE CONTINUING TO INCREASE THE NUMBER OF IVS ON THE SYSTEM, OUR EXPECTATION IS IF WE DON'T CHANGE SOMETHING, THE NUMBER OF THESE EVENTS IS GONNA INCREASE AS WELL.

THIS RISK IS, IS HAS BEEN IDENTIFIED GLOBALLY.

UH, IEEE HAS WRITTEN THIS NEW STANDARD.

IN RESPONSE TO THIS, UH, NERC HAS ISSUED MULTIPLE GUIDELINES AND RECOMMENDATIONS ON THINGS TO SOLVE THE PROBLEMS THAT OCCUR DURING THESE EVENTS.

FERC HAS NOW TOLD NERC, GO WRITE STANDARDS ON IBS, UH, AND MAKE SURE THAT THEY SOLVE THESE PROBLEMS. AND THOSE ARE CURRENTLY IN THE STANDARDS PROCESSES IN PROCESS OF WRITING THOSE STANDARDS.

BUT THAT WILL TAKE SOME TIME.

UM, SPECIFICALLY IN THE DISTURBANCE EVENT FOR THE ODESSA EVENTS, NERC RECOMMENDED THAT ERCOT IMPLEMENT, UH, ACTIONS TO PREVENT THESE KIND OF, THESE ISSUES OCCURRING IN THE FUTURE.

THERE'S BEEN SOME DISCUSSION ABOUT, WELL, SHOULD THESE BE FORWARD LOOKING OR, OR, OR FOR EXISTING GENERATORS NATIONALLY, THERE WAS SOME DISCUSSION IN THE FERC ORDER ABOUT THESE BEING USED FOR FUTURE, UH, IBR ERCOT ALREADY HAS 70 GIGAWATTS OF IBR ON THE SYSTEM.

WHAT'S A FUTURE PROBLEM FOR MOST OF THE WORLD IS AN EXISTING PROBLEM, A CURRENT PROBLEM IN ERCOT REGION.

ERCOT HAS HAD RIDE THROUGH REQUIREMENTS IN PLACE, UH, SINCE 2008 WITH SOME A, A, UH, ADDITIONS ON THE HIGH SIDE OF VOLTAGE IN 2014.

UM, WHAT'S, AS WE'VE

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HAD MORE ANALYZED MOST OF THESE EVENTS ON THE SYSTEM THAT ARE HIGHLIGHTED AND READ ON THE PREVIOUS SLIDE, WE'VE NOTICED THAT THOSE CURRENT REQUIREMENTS AREN'T AS AIRTIGHT AS WHAT WE'D LIKE IT TO BE.

THEY'RE GOOD STANDARDS, BUT THERE ARE, UH, THINGS THAT FOLKS LIKE, THEY MAY NOT HAVE TO PRODUCE REAL POWER.

THEY CAN NOT TRIP OFFLINE, BUT THEY CAN STOP PRODUCING REAL POWER, WHICH HAS THE SAME EFFECTIVE, UM, UM, RESULT.

UM, AND SO WE FILED NORE 2 45 WITH THE ORIGINAL INTENT TO ADD CLARITY AND SPECIFICITY, BASICALLY REMOVING THAT, THAT ANY, UH, LACK OF AIR TIGHTNESS IN THE EXISTING STANDARD TO IMPLEMENT RECOMMENDATIONS FROM THE NERC GUIDELINES AND FROM THE EVENT REPORTS ON THE ODESSA EVENTS, AND STRENGTHENING THE REQUIREMENTS FOR FUTURE IBR TO TAKE INTO ACCOUNT THIS NEW INTERNATIONAL IEEE 2,800 STANDARD.

AND SO OUR INTENT WAS TO MITIGATE THIS RELIABILITY RISK FROM THE IBR FAILURES TO RIDE THROUGH.

UM, COLIN TALKED ABOUT THE STAKEHOLDER PROCESS.

WE DID WORK WITH THE JOINT COMMENTERS EXTENSIVELY, LIKE MEETINGS EVERY COUPLE OF DAYS TRYING TO COME TO, UH, AGREEMENT ON THIS.

WE MADE SEVERAL MOVES IN TRYING TO COME TO COMPROMISE.

THEY MOVED A LITTLE BIT, WE WERE NEGOTIATING ON A STRAIGHT LINE, AND THEN THE COMMENTS CAME IN ON, ON 3 22, 3 DAYS BEFORE TAC THAT WERE SIGNIFICANTLY DIFFERENT THAN WHAT ANYTHING THAT WE HAD TALKED ABOUT.

THEY USED DIFFERENT LANGUAGE AND ENCOMPASS DIFFERENT ISSUES THAN WHAT HAD BEEN TALKED ABOUT BEFORE.

THIS IS ONE OF THE REASONS THAT WE WANT TO SEE THIS REMANDED BACK TO TAC BECAUSE IN THREE DAYS, WE BARELY HAD TIME TO ABSORB EVERY, ALL THE CHANGES THAT WERE MADE IN THIS VERSION.

AND I'M SURE THAT THE TAC MEMBERS, UH, AS WE'VE LOOKED THROUGH IT, WE SEE THINGS THAT IT MAY NOT BE THIS WORDING, IT MAY NOT BE THIS WORDING, BUT IT'S THE SUM OF THESE PIECES OF WORDING THAT LEAD TO AN ISSUE THAT WE THINK THAT TAC NEEDS TO HAVE MORE TIME TO, TO FULLY, UM, DIGEST.

SO THERE'S CERTAIN SPECIFIC ISSUES THAT WE WANT TO BRING UP.

THE FRAMEWORK IS, UH, ON THE, OF THE FOLLOWING SLIDES, IS THAT WE'RE GONNA TALK ABOUT THE ISSUE, WHAT ERCOT APPROACH IS, WHAT THE JOINT COMMENTER'S APPROACH IS IN THE TAC RECOMMENDED VERSION, AND THEN OUR CONCERN WITH THOSE, THIS IS NOT A COMPREHENSIVE LIST.

UM, OF ALL THE ISSUES WE HAVE WITH THE TAC RECOMMENDED VERSION, THERE ARE SMALLER WORDING CHANGES, THERE ARE SMALLER, UH, ISSUES AS WELL, BUT THESE ARE THE PRIMARY ONES THAT WE WANTED TO HIGHLIGHT.

COLIN TALKED ABOUT THE, THE VOTING ON THIS, BUT IT BARELY PASSED TWO PERCENTAGE POINTS.

UH, SO THE, UM, AND SO WE, WE WOULD LIKE FOR TACK TO GO BACK AND LOOK AT THIS AGAIN.

UM, SO THE THREE KEY ISSUES THAT I TALKED ABOUT EARLIER ARE THE TOP THREE THAT ARE ON HERE.

ONE IS THE TIMING OF WHEN THE NEW REQUIREMENTS WOULD START TO APPLY TO NEW TO NEW GENERATORS.

AND THE WAY WE'VE, WE WERE APPROACHING THIS, IT WOULD TAKE IN, IT WOULD SIX MONTHS AFTER THIS NOER WAS FILED, ALL NEW GENERATORS WOULD HAVE TO MEET THE NEW IEEE 2,800 REQUIREMENTS, BUT THEY COULD, THERE WAS AN EXEMPTION PROCESS AS WELL FOR THAT.

AND SO, UH, OUR CONCERN WITH THE TAC APPROVED LANGUAGE, WHICH SAYS THAT THEY WOULD, IT WOULD, IT'S A FUTURE DATE.

BASICALLY ANYTHING THAT HAS AN INTERCONNECTION AGREEMENT THROUGH JUNE OF THIS YEAR, RATHER THAN, UH, JUNE OF LAST YEAR WOULD MEET THE, HAVE TO MEET THE OLD STANDARDS.

OUR MAIN PROBLEM IS THAT THERE'S 20 OR 30 GIGAWATTS THAT EVEN IF THEY MAXIMIZED THEIR CAPABILITY, THEY WOULD ONLY HAVE TO MAXIMIZE IT UP TO THE CURRENT STANDARD, NOT THIS NEW IMPROVED STANDARD.

AND SO THERE'S NO, THEY WOULD HAVE NO INCENTIVE, NO, NO REASON TO TRY TO GET TO THAT HIGHER STANDARD.

AND THAT'S THE WHOLE POINT OF TRYING TO DO THIS GOING FORWARD, IS THAT THAT STANDARD IS, IS BETTER THAN WHAT OUR CURRENT STANDARDS ARE.

UM, THE SECOND THING IS THAT THAT, UM, IF UNDER THE, THE TAC APPROVED VERSION, IF A UNIT FAILS TO MEET THEIR CURRENTLY APPLICABLE REQUIREMENTS, WHATEVER THAT IS, THEY CAN REQUEST AN EXEMPTION TO THAT.

THAT SETS A NEW STANDARD FOR WHAT THEIR, UH, STANDARD WOULD BE GOING FORWARD.

IF THEY FAIL TO MEET THAT, THEN THEY CAN ASK FOR ANOTHER EXEMPTION.

AND MY QUESTION IS, WHAT IS THE POINT OF A STANDARD WHEN ANYTIME YOU FAIL IT, YOU CAN ASK FOR AN EXEMPTION TO SET A LOWER STANDARD GOING FORWARD? THAT DOESN'T SEEM TO MAKE SENSE.

UM, AND I DON'T, UM,

[00:30:01]

IT DOESN'T REALLY MAKE FOR MUCH OF A STANDARD, AND IT ALSO ALMOST GUARANTEES A RATCHETING DOWN OF RELIABILITY REQUIREMENTS OVER TIME.

THE THIRD, THE THIRD THING IS THAT IF YOU HAVE A, UM, A GENERATOR THAT, UM, THAT, UM, DOESN'T MEET THE STANDARDS AND THEY HAVE AN EXEMPTION REQUEST, WHAT CAN WE INCLUDE AS WHAT CAN WE ERCOT? AND THE JOINT COMMENTERS HAVE SAID THAT ERCOT HAS THE AUTHORITY TO DECIDE WHAT, WHETHER TO APPROVE AN EXEMPTION REQUEST OR NOT, BUT WHAT CAN WE INCLUDE? AND RIGHT NOW, THE, THE WAY IT'S WRITTEN, THE ERCOT WOULD ONLY BE ABLE TO CONSIDER THOSE CHANGES, THOSE EXEMPTIONS THAT MEET COMMERCIAL REASONABILITY FOR THE GENERATOR WITHOUT REGARD TO WHETHER GRANTING THAT EXEMPTION OR THAT EXTENSION HAS NEGATIVE IMPACTS ON SYSTEM RELIABILITY.

WE THINK A BETTER APPROACH WOULD BE TO BALANCE THE IMPACTS ON SYSTEM RELIABILITY AGAINST THE COMMERCIAL IMPACTS, UH, ON THE GENERATOR, AND THAT THAT SHOULD BE ALLOWED.

BUT UNDER THE CURRENT, THE WORDING, WE'RE NOT EVEN ALLOWED TO LOOK AT SOMETHING IF IT'S NOT, UH, DOESN'T MEET THE COMMERCIAL REASONABILITY SOLELY FOR THE, THE, THE GENERATOR OWNER.

UM, THERE WAS A, THERE WAS SOME COMMENTS THAT WERE MADE ABOUT THAT LIMITING ERCOT ABILITY TO, UH, TO CONTINUE TO, TO ORDER A GENERATOR THAT HAS FAILURES OFFLINE.

IF THE INTENT, IF THE IDEA IS THAT THEY WOULD BE ABLE TO, UM, TO, UH, IF, IF THE IDEA IS THAT THEY WOULD, THEY WOULD HAVE THE POTENTIAL FOR FUTURE FAILURES GOING FORWARD, AND RIGHT NOW WE HAVE THE CAPABILITY TO DO THAT, WE CAN DO THAT.

WE HAVE DONE IT FOR GENERATORS.

IF THERE'S A, A FUTURE RISK, WE COULD MAKE SURE THAT THAT RISK DOESN'T OCCUR.

UM, IT, THERE'S NOTHING IN THE CURRENT LANGUAGE AS APPROVED BY TAC THAT WOULD LIMIT THIS.

IT'S PRIMARILY IN THE COMMENTS SECTION, BUT WE DON'T THINK THIS IS KIND OF A BIG ENOUGH DEAL AND IS EGREGIOUS ENOUGH.

WE WANTED TO ADDRESS IT AS ONE OF THE ISSUES AND MAKE SURE THAT NOBODY GOES DOWN THAT PATH BECAUSE NOT ONLY WOULD IT BE A, A DETRIMENT TO RELIABILITY, BUT IT ALSO VIOLATES, UH, OUR NERC UH, RELIABILITY STANDARDS THAT ERCOT IS RESPONSIBLE FOR.

DAN, YOU GOT ABOUT FOUR AND A HALF MINUTES LEFT.

IS, WHY HAVEN'T YOU ALREADY DONE THESE THINGS? IF FOLLOWING THE NERC GUIDELINES AND THOSE KIND OF THINGS, I THINK IT WOULD BE INTERESTING TO TO HEAR THE, THE ANSWERS ON THAT.

UM, SO I, I THINK THE, THE REST OF THESE ARE NOT AS BIG A DEAL FOR, UM, UM, US.

UM, THEY ARE, THEY NEED TO BE FIXED, BUT I THINK THE FIRST THREE PARTICULARLY ARE STRONG ENOUGH THAT IT WARRANTS SENDING THIS BACK TO TAC AND HAVING THEM ADDRESS THOSE ISSUES.

UM, SO I'LL SKIP THROUGH THOSE IN THE INTEREST OF TIME, WE, WE RECOMMEND THAT THE, THE RM COMMITTEE, UH, REMAND THIS BACK TO TAC WITH CERTAIN INSTRUCTIONS EITHER TO, UH, MODIFY THE LANGUAGE BASED ON THE RELIABILITY RISKS THAT WE'VE IDENTIFIED, PARTICULARLY THOSE THREE ISSUES THAT I, I, UM, MENTIONED AND EX OR EXPLAIN IN DETAIL WHY THE CURRENT VERSION OF THE, THE, THAT IS, UH, APPROVED BY TAC ALREADY, UH, MEETS THOSE REQUIREMENTS.

UM, ALTERNATIVELY OF COURSE, WE WOULD, UH, WELCOME YOU TO APPROVE THE, UH, LANGUAGE THAT WE SUBMITTED IN RESPONSE TO THE, THE, UH, ATTACK APPROVED LANGUAGE.

ONE OF THE THINGS THAT, THAT WE THINK IS IMPORTANT IS THAT THE JOINT COMMENTERS HAVE SAID THEY BELIEVE IT'S COMMERCIALLY REASONABLE TO IMPLEMENT ALL, UH, SOFTWARE UPGRADES, FIRMWARE UPGRADES, AND PARAMETER CHANGES, UH, THAT WOULD LEAD TO IMPROVED, UM, IMPROVED RIGHT THROUGH, UM, REQUIREMENTS.

UM, WE AGREE, WE THINK THIS IS, WOULD BE VERY POSITIVE FOR RELIABILITY TO GO AHEAD AND GET STARTED ON THIS.

AND SO OUR INTENT IS TO ISSUE A MARKET NOTICE LATER THIS WEEK THAT WILL ENCOURAGE ALL IBR OWNERS TO MAXIMIZE THEIR IBR CAPABILITY THROUGH SOFTWARE UPGRADES, THROUGH PARAMETER CHANGES AS SOON AS FEASIBLE.

SO GO AHEAD AND GET STARTED ON THIS.

THIS WILL HAVE A REAL POSITIVE IMPACT ON RELIABILITY.

UM, AND SO WE'RE GONNA ISSUE THIS MARKET NOTICE.

NOW, THAT'S NOT SOMETHING NEW.

NERC HAS ALREADY SAID, YOU SHOULD DO THIS AS PART OF THEIR GUIDELINES.

I THINK ONE OF THE QUESTIONS MAYBE AS, AS, UH, FOR THE FOLLOWING PRESENTERS THAT, UH, RESPECTFULLY THE BOARD MIGHT ASK

[00:35:01]

SO I GUESS WE'RE NOT GONNA ASK QUESTIONS, RIGHT? WE'LL COME BACK TO THAT, DAN, THANKS FOR THAT, UH, GOOD UTILIZATION OF YOUR 20 MINUTES.

UM, SO NOW WE'LL GO AND INVITE THE JOINT COMMENTERS UP FOR 20 MINUTES TO GO THROUGH, UH, THEIR VIEWPOINTS.

AND I DUNNO, I WANNA DO THE ORDER IF ERIC AND MARK FROM NEXTERA, I GUESS CAN GO FIRST, FOLLOWED BY SARAH AND OMAR.

UH, GOOD AFTERNOON EVERYONE.

MY NAME IS ERIC GOFF.

UH, I AM A CONSULTANT, UH, FOR A VARIETY OF CLIENTS TODAY.

I'M HERE SOLELY FOR NEXTERA, UH, REPRESENTING THE POSITIONS OF THE JOINT COMMENTERS.

FIRST OF ALL, I WANNA THANK YOU FOR YOUR ATTENTION AND THE OPPORTUNITY TO SPEAK BEFORE, UH, THIS BODY.

UH, WE'LL GET INTO MANY OF THE QUESTIONS THAT WERE RAISED IN THE PRIOR PRESENTATION, AND I'M LOOKING FORWARD TO ANY QUESTIONS THAT YOU HAVE FOR ME OR FOR THE JOINT COMMENTERS.

UM, SO THIS IS A QUICK SUMMARY OF WHAT WE'RE ASKING.

WE'RE ASKING THAT YOU PASS THE T RECOMMENDATION TODAY, UM, BECAUSE IT SUPPORTS RELIABILITY AND IMPOSES NEW REQUIREMENTS, UH, AS WE'LL GET INTO, UH, REMANDING WILL DELAY IMPLEMENTATION OF THIS THAT HAS REAL WORLD CONSEQUENCES.

UM, THERE ARE ACTUAL INVESTMENTS, UH, BEING CONSIDERED BASED ON THIS, UH, PRESENTATION, UH, TODAY.

UM, WE BELIEVE THAT THE TAC VERSION DOES ADDRESS MANY OF THE ISSUES ERCOT HAS IDENTIFIED, AND THE LATEST VERSION THAT TAC FILED, UM, IS A STEP BACK, EXCUSE ME, THAT, UH, ERCOT FILED IS A STEP BACKWARDS.

UM, SO BEFORE I GET INTO THAT, UM, HERE ARE THE COMPANIES THAT ARE IN THE JOINT COMMENTERS.

THERE ARE A NUMBER OF OTHER COMPANIES HERE AS WELL, UH, INCLUDING BROOKSFIELD.

BUT IF YOU'RE HERE ON BEHALF OF THE JOINT COMMENTERS OR ATTACK MEMBER THAT YOU'D LIKE TO STAND UP AND, AND SHOW THAT YOU'RE SUPPORTIVE OF THE TAC PRESENTATION, FEEL FREE TO RAISE YOUR HAND OR, OR STAND UP.

I'D APPRECIATE IT.

GREAT.

UM, SO, UH, THESE COMPANIES REPRESENT ABOUT THIS QUANTITY OF THE TOTAL IBR ON THE SYSTEM.

UM, WE AGREE THAT THIS IS A CRITICAL ISSUE, UM, AND THAT'S WHY WE HAVE BEEN WORKING, UH, WITH ERCOT AND NERC AND OUR OEMS ON THIS TOPIC.

UH, WE REALLY WOULD PREFER THAT THIS WASN'T SEEN AS AN ERCOT VERSUS INDUSTRY DEBATE BECAUSE MANY OF, UH, THE ISSUES AND PROGRESS THAT HAS BEEN MADE HERE IS BEING MADE BY, UH, THE OWNERS AND OPERATORS.

OUR, OUR OEMS. WERE PARTICIPATING IN MANY OF THESE ISSUE AREAS, AND WE'RE NOT EXPECTING THIS CONVERSATION TO END TODAY OR AT THE NEXT BOARD MEETING.

THERE'S MORE WORK TO DO AND WE'RE LOOKING FORWARD TO DOING IT.

UM, IF YOU DO PASS THE TAC VERSION, UM, YOU WILL AVOID BURDENSOME RETROACTIVE REQUIREMENTS.

UM, THOSE RETROACTIVE REQUIREMENTS, UM, HAVE A REAL IMPACT ON INVESTORS SENTIMENT AND CONFIDENCE.

IF YOU TELL SOMEONE IN A WHOLESALE COMPETITIVE MARKET THAT, UM, NEVERMIND, WE NEED YOU TO COME BACK AND DO MORE, UM, IT MAKES INVESTORS QUESTION THAT IN THE FUTURE, UM, IT ALSO, UM, POTENTIALLY, UH, SENDS A NEGATIVE, UM, SIGNAL IN GENERAL ABOUT, YOU KNOW, ARE WE OPEN FOR BUSINESS HERE? UH, WHEN THE EPA HAS TRIED TO DO SIMILAR THINGS, THIS STATE HAS SUED THE EPA TO, TO TRY TO BLOCK THOSE, UH, DOZENS OF TIMES.

UM, WE ALSO, UH, WANT TO AVOID HAVING TO REQUEST, UH, A NEW EFFECTIVE DATE FOR RESOURCES.

IF YOU DELAY THIS TO A FUTURE BOARD MEETING, WE SET THE JUNE TARGET TO BE WHEN THE PUC MIGHT APPROVE IT.

UM, IF THIS IS DELAYED FOR ANOTHER COUPLE MONTHS OR THREE MONTHS OR FOUR MONTHS, UM, WE MIGHT HAVE TO ASK FOR A DATE AFTER JUNE, 2024 IN ORDER TO AVOID THOSE RETROACTIVE TREATMENTS.

FINALIZING RULES WILL ALLOW OEMS TO, UH, KNOW WHAT THE RULES ARE.

UM, THEY HAVE OPPORTUNITY TO SELL NEW PRODUCTS TO US, UH, ONCE THESE RULES ARE PASSED, AND THE SOONER THOSE RULES ARE WRITTEN, THE THE SOONER THEY CAN KNOW WHAT THEIR, THEIR SCOPE AND MARKET OPPORTUNITY IS.

AND FINALLY, UM, WE ENCOURAGE YOU TO PROTECT THE PRIVATE PROPERTY RIGHTS THAT WE'RE TALKING ABOUT HERE, UH, AND DUE PROCESS RIGHTS.

I'LL GET INTO HOW IMPORTANT THOSE ARE SOON.

AND O OF COURSE, UM,

[00:40:01]

THE STAKEHOLDER PROCESS HAS SPENT CONSIDERABLE TIME ON THIS AND IS MAKING A RECOMMENDATION.

WE HOPE YOU VALUE THAT.

SO THE TAC APPROVED PROPOSAL AGGRESSIVELY SUPPORTS RELIABILITY.

UM, IT'S IMPOSING NEW REQUIREMENTS ON, ON FACILITIES THAT WERE PREVIOUSLY GRANDFATHERED.

IT REQUIRES, UH, ALL SOFTWARE AND COMMERCIALLY REASONABLE HARDWARE TO BE INSTALLED.

UM, IT IMPOSES THESE NEW REQUIREMENTS, UM, THAT ARE ALIGNED WITH I 2,800 EVEN WHILE TESTING AND VERIFICATION OF HOW TO DO THAT HAS NOT YET BEEN COMPLETED.

IT'S IN ADVANCE OF, OF KNOWING HOW TO DO THAT IN SOME CASES.

UM, IT ALSO CREATES A CONTINUOUS PROCESS TO COMMUNICATE WHAT YOU CAN DO WITH ERCOT, UH, IDENTIFY, UH, WHETHER OR NOT SOMETHING IS COMMERCIALLY REASONABLE.

IF IT'S NOT, CHECK IT AGAIN NEXT YEAR, CHECK IT AGAIN THE FOLLOWING YEAR, UM, AND SO ON AND IMPLEMENT ANYTHING THAT IS COMMERCIALLY REASONABLE TO DO.

AND IMPORTANTLY, THERE'S A CLEARLY DEFINED PROCESS FOR REQUESTING EXEMPTIONS RATHER THAN A STANDARD, UH, THAT'S BASED ON ERCOT DISCRETION.

SO THIS IS A KEY POINT.

IF ERCOT, UM, THEIR REVIEW AUTHORITY AS THEIR PERSPECTIVE ON RELIABILITY OR, UM, EVIDENCE THAT'S ACCEPTABLE TO THEM, IF THAT WOULD BE APPEALED TO THE UTILITY COMMISSION, THE STANDARD FOR REVIEW WOULD BE WHETHER OR NOT THE EVIDENCE WAS ACCEPTABLE TO ERCOT AND NOT WHETHER OR NOT THE EXEMPTION WAS APPROPRIATE.

SO WE'RE LOOKING FOR AN EVIDENCE-BASED STANDARD OF REVIEW SO THAT WAY THERE'S CLEAR DUE PROCESS AND, AND LESS UNCERTAINTY ABOUT WHETHER AN EXEMPTION WOULD BE GRANTED AND THE REVIEW THAT THE PUC WOULD GIVE TO THAT AND, AND WHAT STANDARD OF EVIDENCE THEY WOULD HAVE TO APPLY.

UM, THIS IS A SUMMARY OF, UH, THE ISSUES, UH, FROM ODESSA ONE, ESSA TWO, ODESSA TWO, AND THE PANHANDLE, UH, WIND EVENT AND, UM, HOW THOSE ISSUES, UM, HAVE BEEN OR CAN BE RESOLVED.

SO IF YOU NOTICE, THE VAST MAJORITY OF THESE ARE, UH, THINGS THAT ARE SOFTWARE FIXES.

UM, THERE ARE SOME, UM, UNKNOWN HARDWARE OR SA SOFTWARE ISSUES.

UM, AND THEN CONSEQUENTIAL TEMPING IS NOT A RIDE THROUGH ISSUE, IT'S A SEPARATE ISSUE.

SO MOST OF THE ISSUES THAT HAVE BEEN IDENTIFIED BY ERCOT, THESE MAJOR EVENTS, A LOT OF IT CAN BE FIXED THROUGH SOFTWARE.

SO MOVING FORWARD WITH A SOFTWARE STANDARD IS A BIG DEAL.

UH, THIS IS JUST A DEEPER DIVE.

I'M HAPPY TO ANSWER QUESTIONS ON THIS, BUT ESSENTIALLY THIS SHOWS SPECIFICALLY BY THE OEM, WHAT HAS IT BEEN IDENTIFIED FROM THE ODESSA TWO EVENT.

IN SUMMARY OF THIS, AND WE CAN COME BACK TO IT IF YOU HAVE ANY QUESTIONS.

A LOT OF THIS HAS RELATIVELY STRAIGHTFORWARD FIXES THAT FALL WITHIN THE FRAMEWORK THAT TAC HAS PROPOSED.

SO THIS IS, UM, A SUMMARY FROM ER'S OWN DATA AND A PRESENTATION OF THE IBR WORKING GROUP.

AGAIN, I CAN ANSWER QUESTIONS HERE, UH, IF THERE, IF YOU HAVE ANY, BUT THIS IS THE PROCESS FOR EXEMPTIONS.

THERE'S A LOT OF, UM, THINGS ON HERE, BUT JUST TO SUMMARIZE IT, UM, GREEN IS WHERE THERE'S, UM, EITHER AN AGREEMENT ABOUT WHAT TO DO OR, UM, A REQUIREMENT TO INSTALL SOFTWARE COMMERCIAL REASONABLE HARDWARE.

THIS, THIS SHOWS THE CLEAR DUE PROCESS PROCEDURES FOR APPEALING SOME OF THE COMMISSION, WHICH AGAIN, I THINK IS SO CRITICAL TO MAKE SURE THAT THERE'S AN OPPORTUNITY FOR DISCUSSION, UM, AND A CLEAR STANDARD OF EVIDENCE.

AND THEN IT'S BASED ON WHETHER OR NOT ER RCAT STAFF DENIES AN EXEMPTION EXTENSION.

SO ERCOT HAS THE ULTIMATE AUTHORITY TO GRANT AN EXEMPTION OR EXTENSION BASED ON THE STANDARD OF EVIDENCE, UM, WHICH IS SUBJECT TO COMMISSION REVIEW.

THIS IS THE, UM, SLIDE THAT GOES INTO THE POINT THAT MR. WOODFORD MADE ABOUT REQUESTING NEW EXEMPTIONS.

SO AFTER PERFORMANCE FAILURE, WE CREATED A PROCESS OF WHAT TO DO IN THE EVENT OF PERFORMANCE FAILURE AND FOR NEW RESOURCES, THOSE ON THE BOTTOM PART, THEY HAVE TO COMPLY, THEY HAVE TO CREATE A MITIGATION PLAN AND IMPLEMENT IT FOR EXISTING RESOURCES.

WE THINK COMMERCIAL REASONABILITY IS AN IMPORTANT PRINCIPLE THAT SHOULD APPLY THROUGHOUT ALL OF THE PROCEDURES IN PLACE HERE.

SO YOU DO A MITIGATION PLAN AND ANALYSIS, DETERMINE WHETHER OR NOT SOMETHING IS COMMERCIALLY REASONABLE TO IMPLEMENT, AND IF IT IS, YOU HAVE TO DO IT.

IF IT'S NOT, YOU HAVE TO REPORT WHAT YOU CAN DO TO ERCOT AND THAT'S YOUR NEW STANDARD.

SO THE REASON THAT'S A NEW STANDARD IS BECAUSE IT'S KNOWN WHAT YOU CAN DO AND YOU HAVE TO ANALYZE EVERY YEAR ABOUT WHETHER OR NOT YOU CAN, YOU CAN INCREASE THAT PERFORMANCE.

IF YOU HAVE A PROCESS WHERE YOU KNOW SOMEONE CAN'T DO SOMETHING AND IT'S NOT COMMERCIALLY REASONABLE TO FIX IT, UM, THE QUESTION SHOULD BE, WHAT, WHAT WOULD YOU PREFER THE OUTCOME TO BE? UM,

[00:45:01]

SO ALSO IN MANY CASES, LIKE I SAID BEFORE, MANY OF THESE ISSUES CAN BE ADDRESSED THROUGH SOFTWARE CHANGES.

UM, SO IN MANY CASES, THOSE SOFTWARE CHANGES WILL ADDRESS THE ISSUE.

SO ERCOT, UH, HAD SEVEN CONCERNS THAT THEY WENT INTO, UH, IN THE LAST PRESENTATION.

UM, ON THE TIMING OF IMPLEMENTATION, THEY'VE MENTIONED HOW 20 TO 30 GIGAWATTS, UM, ARE UNDER THE, THE, UM, LEGACY RATHER RATHER THAN PREFERRED.

THE VAST MAJORITY OF THOSE ARE SOLAR AND, UH, STORAGE DEVICES THAT CAN MEET ALL THE REQUIREMENTS THROUGH SOFTWARE CHANGES.

UM, AGAIN, WE THINK COMMERCIAL REASONABILITY SHOULD APPLY THROUGHOUT THIS AS A CORE PRINCIPLE.

UM, SO THAT APPLIES FOR A FEW DIFFERENT PLACES HERE.

WHETHER THEY CAN CONTINUE OPERATING AFTER A FAILURE IS ANOTHER KEY POINT.

ERCOT WOULD LIKE TO, UM, DISCONNECTED FACILITY, WELL, I DUNNO IF THEY WOULD LIKE TO, BUT THEY WANT TO MAKE SURE THAT THE AUTHORITY IS CLEAR THAT THEY CAN DISCONNECT THE FACILITY UNDER CERTAIN CONDITIONS.

THIS GER IS NOT CHANGING ER CAT'S AUTHORITY.

SO TO THE EXTENT THEY HAVE THAT AUTHORITY, THIS IS NOT CHANGING IT.

UM, WE REQUESTED THAT THE COMMISSION CONSIDER CREATING PROCESS AROUND HOW TO DO THAT.

UM, BUT THAT WOULD BE A SEPARATE PROCEEDING.

UM, I DISCUSSED THE MITIGATION AFTER FAILURE, UM, AND THE, WHAT ERCOT DESCRIBED AS ALLOWED DEVIATIONS TO SAY THAT YOU HAVE TO DOCUMENT WHAT YOU CAN DO AND DO IT IF IT'S COMMERCIALLY REASONABLE.

AND ON THE DATES FOR AGREED IMPROVEMENTS, THE TAX PROPOSAL HAS CLEAR REQUIREMENTS.

OKAY, THIS, THIS NEXT TWO SLIDES, AND ERIC, YOU'VE GOT FOR THIS WHOLE SECTION, YOU'VE GOT ABOUT NINE MINUTES REMAINING.

SO YES SIR, I DON'T KNOW HOW YOU'RE SPLITTING IT UP.

I I'M NEARLY DONE.

THESE NEXT TWO SLIDES, UH, I WON'T GET INTO UNLESS YOU HAVE QUESTIONS.

UM, BUT THIS, THIS IS AN EXAMPLE OF HOW ERCOT, UM, OVER TIME HAS CHANGED THE PERSPECTIVE OF THIS NOGA AND SAID, WHAT ISN'T ACCEPTABLE? AND I'M NOT TRYING TO POINT ANY FINGERS HERE, BUT, UH, JUST POINT OUT THAT THEY HAVE ACCEPTED THINGS THROUGHOUT THIS PROCESS THAT THEY SAID EARLIER OR NOT ACCEPTABLE.

THAT'S GREAT THAT THEY'RE MOVING.

UM, AND TO THE EXTENT THAT YOU, UH, FEEL LIKE, UM, THEY'RE SAYING THAT TODAY, I WOULD POINT OUT THEY SAID IN THE PAST, OVER PRIOR LINES OF THE SAND, UM, AND THE STAKEHOLDERS HAVE HAD PLENTY OF OPPORTUNITY TO HEAR FROM ERCOT ON THIS.

UM, WE'RE WELL AWARE OF THEIR PERSPECTIVE.

UM, AND, AND SO WITH THAT, I'LL TURN IT OVER TO THE NEXT PERSON, UH, SARAH PARSONS, UH, WITH, UM, AVAN GRID.

THANKS, ERIC.

GOOD AFTERNOON.

THANKS EVERYONE FOR YOUR TIME TODAY.

MY NAME IS SARAH PARSONS.

I'M OUR VICE PRESIDENT OF ORGANIC GROWTH FOR AVANGRID AVANGRID OPERATES IN 24 STATES ACROSS THE COUNTRY.

WE HAVE BOTH A NETWORKS BUSINESS WITH EIGHT UTILITIES SERVING OVER 3 MILLION CUSTOMERS, AND WE HAVE A RENEWABLE GENERATION BUSINESS.

WE'RE THE THIRD LARGEST WIND OPERATOR IN THE UNITED STATES, AND WE HAVE PRO OVER EIGHT GIGAWATTS OF PROJECTS OPERATING, INCLUDING FIVE WIND PROJECTS IN TEXAS, A SOLAR PROJECT IN CONSTRUCTION TOTALING ABOUT 1200 MEGAWATTS.

INGRID'S MISSION STATEMENT IS TO GENERATE SAFE, RELIABLE ELECTRICITY FOR OUR CUSTOMERS, WORKING WITH UTILITIES AND COMMUNITIES TO DELIVER A MORE ACCESSIBLE CLEAN ENERGY MODEL.

AT THE END OF THE DAY, RESOURCE OWNERS, OPERATORS, MANUFACTURERS, AND INVESTORS WANT THE SAME THING AS ERCOT TO RELY ON AND SUPPORT A RELIABLE GRID TO SUCCEED IN THAT.

HOWEVER, WE NEED CLEAR AND UNDERSTANDABLE RULES FOR RELIABILITY BASED ON BOTH ENGINEERING PRINCIPLES AND ECONOMIC PRINCIPLES THAT ENABLE PLANTS TO KEEP OPERATING AND BUSINESSES TO KEEP INVESTING.

MY TEAM IS RESPONSIBLE FOR ONSHORE WIND, SOLAR, AND STORAGE AND INVESTMENTS AND OBTAINING FINANCING TO BRING THOSE PROJECTS INTO CONSTRUCTION AND OPERATION.

WHEN WE ARE MAKING STRATEGIC DECISIONS ABOUT WHERE TO DEVELOP PROJECTS AND MAKE INVESTMENTS, WE NEED REGULATORY CERTAINTY.

WE NEED CLEAR RULES TO ENABLE BUSINESSES TO NAVIGATE THE COMPLEX MAZE OF RULES AND THEIR ASSOCIATED COMPLIANCE REQUIREMENTS.

UNCLEAR AND UNFAIR RULES.

DAMPEN NEEDED INVESTMENTS IN INFRASTRUCTURE AND RELIABLE ENERGY.

THE JOINT COMMENTERS HAVE SPENT HUNDREDS OF HOURS DISCUSSING AND NEGOTIATING WAYS TO IN ENHANCE INVERTER BASED RESOURCES CAPABILITIES TO RIDE THROUGH SYSTEMS DISTURBANCES WITHOUT DISRUPTING THE ABILITY OF RESOURCES TO OPERATE THROUGH THE

[00:50:01]

EXTENDED EXPECTED USEFUL LIFE.

NOT ALL OF THE JOINT COMMENTERS ARE ALIGNED ON EVERYTHING, HOWEVER, WE WORK TOGETHER TO ACHIEVE RESULTS THAT ACCOMPLISH THREE THINGS, IMPROVE RELIABILITY, ALLOW PLANTS TO OPERATE RELIABLY TO THEIR EXPECTED LIFE, AND PROVIDE CLEARLY DEFINED RULES FOR REGULATORY CERTAINTY FOR INVESTORS.

THE TAC APPROVED NOVA OF 2 45 PROVIDES A CLEAR PROCESS FOR REQUESTING EXEMPTIONS AND APPROVING REJECTING REQUESTS FOR EXEMPTIONS.

INVESTORS NEED EVIDENCE-BASED AND FAIR PROCESS AND THE TAC APPROVED NOGA 2 45 COMMENTS PROVIDE THAT.

IT PROVIDES STRUCTURE AND DETAILS REGARDING, REGARDING HOW TO SUBMIT AN EXEMPTION REQUEST, WHAT INFORMATION NEEDS TO BE THERE, THE TIMELINE, AND HOW YOU RESOLVE A DISAGREEMENT PRIOR TO SUBJECTING THE COMMISSION TO A CONTESTED CASE.

IT ALSO PROVIDES RESOURCE OWNERS WITH INFORMATION REGARDING WHERE THE REQUEST IS IN THE PROCESS AND ASSURANCE THAT IT HAS IN GOOD FAITH.

WORK WITH ERCOT TO RESOLVE ANY MISUNDERSTANDINGS OR DISAGREEMENTS BEFORE LITIGATING THE ISSUE AT THE COMMISSION.

WE NEED CLEAR AND FAIR REGULATORY PROCESS TO ENABLE BUSINESSES TO INVEST AND GROW.

I APPRECIATE YOUR TIME TODAY.

AND NEXT WILL BE OMAR MARTINO, THE EXECUTIVE VICE PRESIDENT OF MARKETS AND REGULATORY FOR IN ENERGY.

AND THERE'S ABOUT FOUR AND A HALF MINUTES LEFT AHEAD.

GET STARTED, OMAR.

THOSE MODIFICATIONS ARE AVAILABLE TODAY.

I'LL TRY TO BE QUICK.

UM, GOOD AFTERNOON.

MY NAME IS OMAR MARTINO.

I AM THE EXECUTIVE VICE PRESIDENT OF MARCUS AND LABORATORIA.

FIRST AT IN ENERGY.

IN ENERGY IS THE LARGEST, UM, PROBABLY HELD ENERGY COMPANY IN THE WORLD.

WE HAVE ABOUT 202 PROJECTS AND WE HAVE BUILT AND DEVELOPED ABOUT 31 GIGAWATTS OF CAPACITY TO THE NETWORK.

WE HAVE CLOSED APPROXIMATELY $59 BILLION OF, OF TRANSACTIONS ACROSS, UM, MULTIPLE TECHNOLOGIES INCLUDING SOLAR, WIND, BATTERIES, STORAGE, WHERE WE ARE ALSO IN THE BUSINESS OF OFFSHORE WIND AND AS WELL AS, UM, CLEAN HYDROGEN AS WELL.

UH, WE OPERATE, UH, PROJECTS IN ALMOST ALL OF THE JURISDICTIONS ACROSS THE ORGANIZED MARKETS IN THE UNITED STATES.

HERE IN TEXAS.

WE HAVE 17 PROJECTS IN OPERATION, ONE PROJECT IN CONSTRUCTION, AND THREE PROJECTS UNDER CONTRACT.

THIS, THIS PROJECTS COMPRISE ABOUT 4.4 GIGAWATTS OF GENERATION IN ERCOT, AND THEY SUPPLY ENERGY TO ABOUT 1.3 MILLION, UM, AMERICAN HOMES.

IN FACT, IN 2021, WE HAVE INVESTED $1.6 BILLION IN THE STATE IN ONE OF THE LARGEST INVESTMENTS IN A SOLAR FARM IN THE STATE OF TEXAS.

THIS IS WHY I CAME HERE TODAY, UH, TO TALK TO YOU PERSONALLY, TO TALK TO YOU AND TO YOUR COLLEAGUES, AND TO ASK YOU, UH, TO, TO APPROVE THE, THE TAG APPROVED NUMBER, UH, 2 45.

THE RETROACTIVE IMPLEMENTATIONS OF ANY MARKET RULES WITHOUT A TECHNICALLY OR COMMERCIALLY FEASIBLE PATH TO COMPLIANCE IS ESSENTIALLY GONNA SEND A VERY CHILLING SIGNAL AND CHILLING EFFECT TO ANY ADDITIONAL INVESTMENT IN IN T WE RECOGNIZE THAT THERE'S NO, THERE'S NO DOUBT THAT THE ENERGY IS, IS, UH, THE ENERGY, THE GRID IS, IS CHANGING AND THERE'S NO DOUBT THAT THE GENERATION MIX IS ALSO CHANGING.

AND WE FULLY SUPPORT ERCOT IN ITS RELIABILITY MANDATES AND, AND ABILITY AND REQUIREMENT TO, TO SECURE THE GRID.

WE, WE RECOGNIZE THOSE ISSUES, WE TAKE THOSE ISSUES SERIOUSLY.

THE ISSUE THAT ERICA HAS IDENTIFIED, THE ISSUE THAT NERC HAS IDENTIFI IDENTIFIED, BUT THIS IS WHY I AM HERE TO ASK YOU TO APPROVE THE TAG APPROVED NGER.

THE, THE IVRS THAT HAVE, THAT WERE INVOLVED IN IN THE PAST LARGE, UH, DISTURBANCES, THEY CAN ACTUALLY CORRECT THEIR PAST PERFORMANCE AS ERICA JUST ESSENTIALLY ALLUDED TO JUST A FEW MINUTES AGO.

THEY ARE A NUMBER OF MODIFICATIONS, MODIFICATIONS THAT ARE AT THE SOFTWARE LEVEL, MODIFICATIONS THAT ARE COMMERCIALLY REASONABLE MODIFICATIONS.

THOSE MODIFICATIONS CAN GO FORWARD.

NOT ONLY THEY CAN GO FORWARD FOR THE RE RESPECTIVE, YOU KNOW, IIBR THAT WILL GO FORWARD FOR AN ONGOING DUTY, INCLUDING MODIFICATIONS AT THE HARD LEVEL THAT ARE REASONABLE.

THE IMPORTANT POINT HERE IS THAT ONCE THESE MODIFICATIONS TAKE PLACE, ONCE THE MODIFICATIONS ARE EFFECTIVE, 88% OF THOSE IIV THAT WERE INVOLVED IN THE ODESSA EVENTS WOULD HAVE BEEN ABLE TO COMPLY WITH THE STANDARDS THAT AIR CODE IS PUTTING FORWARD.

THIS IS, THIS IS A VERY IMPORTANT POINT.

THIS IS, THIS IS THE POINT OF WHAT IS COMMERCIALLY REASONABLE EFFORTS.

THIS IS THE POINT OF WHAT ARE THE MODIFICATIONS THAT ARE AVAILABLE TODAY.

88% WOULD BE ABLE TO COMPLY.

IN CONTRAST,

[00:55:01]

WHAT ERIC CODE IS SENDING IS ESSENTIALLY AN OVERAGE.

IT IS IMPOSING ESSENTIALLY UNACHIEVABLE REQUIREMENTS REQUIREMENT THAT CANNOT BE MET REQUIREMENTS THAT IN FACT, IN MY OPINION, THE THERE'S NO EVIDENCE THAT ARE NEEDED.

AND THEY'RE ALSO POSING ARBITRARY COST THRESHOLDS TO HARDWARE MODIFICATIONS.

AS I COME HERE TODAY, I AM ASKING YOU TO, TO NOT MOVE FORWARD WITH A PLAN THAT IS GOING TO RESTRICT INVESTMENTS IN THE STATE OF TEXAS AND IT'S POTENTIALLY GONNA SEND A CHILLING EFFECT AND, AND EITHER RETIRE OR DISCONNECT EXISTING, EXISTING, UH, GENERATORS.

WE ALL RECOGNIZE THE RELIABILITY IS A BIG ISSUE AND I, AS I SAID EARLIER, YOU KNOW, WE FULLY SUPPORT IT, BUT WE HAVE TO DO IT IN A JUST UNREASONABLE WAY.

WE HAVE TO DO IT IN A WAY THAT THAT IS, IS EFFECTIVE.

IT PROTECTS INVESTMENTS, PAST INVESTMENTS, AND IT PROTECTS FUTURE INVESTMENTS AS, AS WELL.

AND THE TAG APPROVED VERSION ESSENTIALLY, ESSENTIALLY DOES THAT.

WE ALSO DON'T BELIEVE THAT REMANDING THIS, THIS BACK TO TECH IS GOING TO ACHIEVE ANY PURPOSE OTHER THAN JUST FARTHER DELAYS AND ADDING ADDITIONAL UNCERTAINTY AND, AND, AND CONFUSION.

UM, THANK YOU FOR YOUR TIME.

I AM, UM, HAPPY TO ASK QUESTIONS.

THE NEXT SPEAKER IS MARK, UH, WITH NEXTERA.

AND MARK, IF YOU COULD BE QUICK WITH YOUR COMMENTS AND NOT REPEAT WHAT PREVIOUS SPEAKERS HAVE SAID, I'D APPRECIATE IT.

I, I DEFINITELY SHALL.

UH, I'M MARK ALSTROM, VP OF RENEWABLE ENERGY POLICY FOR NEXTERA ENERGY AND ALSO A PRESIDENT OF THE BOARD OF THE NONPROFIT ENERGY SYSTEMS INTEGRATION GROUP, WHICH IS A, A NON-PROFIT, NON-CON CONVENING PLACE WHERE THE ENGINEERS GET TOGETHER TO SOLVE SOME OF THIS STUFF YEARS IN ADVANCE AND DO A LOT OF GREAT WORK.

UH, E OR E, UH, E-CIG, UH, ERCOT RATHER, IS A, IS A ACTIVE MEMBER THERE AND SHARE WORKING GROUPS AND IT'S BEEN A VERY PRODUCTIVE FORUM FOR US.

UH, NEXT AREA I THINK, YOU KNOW, PRETTY WELL, WE'RE A BIG PUBLIC COMPANY.

WE'VE GOT $20 BILLION INVESTED IN TEXAS ANNUAL PAYROLL WITHIN TEXAS OF 427 MILLION AND ABOUT 120 MILLION PER YEAR IN PROPERTY TAXES AND LAND PAYMENTS AND X-RAY HAS A LONG HISTORY OF RELIABILITY, BOTH IN OUR GENERATION AND TRANSMISSION FLEET ACROSS THE COUNTRY AND IN FLORIDA, POWERED LIGHT, OUR UTILITY IN FLORIDA.

BUT I WANTED TO SPEAK MORE FROM MY PERSONAL POINT OF VIEW.

I MEAN, YOU'LL, YOU'LL NOT FIND ANYBODY IN THE INDUSTRY THAT'S MORE COMMITTED TO RELIABILITY AS WE DO ALL THIS THAN YOU WILL AND MYSELF.

I HAVE A LONG HISTORY OF SUPPORTING RELIABILITY WORKING WITH AT NERC WHERE, UH, WOODY AND I HAVE BEEN ON THE NERC, UH, RELIABILITY ISSUE STEERING COMMITTEE, DONE A LOT OF GOOD WORK TOGETHER OVER THE YEARS ALSO AT DOE AND AT EEG, AS I MENTIONED, AND THE INDUSTRY AS A WHOLE.

UH, YOU KNOW, I'LL, I'LL JUST SAY THAT I THINK THAT, YOU KNOW, WHAT WE HAVE AN ATTACK APPROVED PROPOSAL IS A STRONG, EFFECTIVE AND PRUDENT PROPOSAL THAT SHOULD BE APPROVED AND IMPLEMENTED IMMEDIATELY.

THE CHALLENGE, THE THING I THINK WE'RE MISSING WITH THE E-CIG PROPOSAL IS THAT IT JUST DOESN'T REALLY WORK FROM A BUSINESS POINT OF VIEW, RIGHT? UPGRADE COSTS ARE UNBOUNDED IF THEY CAN PROVIDE EVEN NON-MATERIAL LEVELS OF IMPROVEMENT WITH NO COMMERCIAL REASONABILITY TEST, YOU KNOW, IT'S NO DIFFERENT IF YOU'RE INVESTING IN BILLIONS OF DOLLARS IN RENEWABLE PLANTS OR, OR GENERATORS THAN IT IS THE GAS STATION OWNER ON THE CORNER.

YOU'RE NOT GONNA GET A LOAN TO UPGRADE YOUR GAS STATION IF YOU CAN'T SHOW THAT THE BUSINESS PLAN SUPPORTS PAYING BACK THAT LOAN WITH THE FUTURE REVENUE STREAM AND THE LEVEL OF RISK THAT'S ENTAILED AND IT IS NO DIFFERENT.

HERE ALSO HAS BEEN POINTED OUT THE RETROACTIVE APPLICATION REALLY SENDS A, A BAD SIGNAL TO FUTURE INVESTMENT.

AND WE LOOK FORWARD TO INVESTING ANOTHER 20 BILLION IN PROJECTS IN IN ER.

UH, THE BOTTOM LINE IS THAT IT JUST FORCES INVESTORS TO MAKE ARBITRARILY HIGH LEVELS OF INVESTMENT UPON THE THREAT OF OPERATIONAL RESTRICTIONS, DISCONNECTION, AND FORCED EARLY RETIREMENT.

AND THAT'S JUST NOT COMMERCIALLY REASONABLE AND SIMPLY CANNOT BE MADE BY ANY PRUDENT GENERATOR OPERATOR OR INVESTOR THE SAME AS A GAS STATION.

YOU KNOW, ALL WE'RE LOOKING FOR IS A WAY WHERE WE CONTINUE TO DO BUSINESS IN A LOGICAL WAY THAT'S GOING TO MAKE SURE INVESTMENTS ARE LINED UP WITH THE FUTURE REVENUE STREAM.

SO I I STRONGLY URGE THE, THE BOARD TO, UH, APPROVE THE TECH APPROVED NOGA 2 45 PROPOSAL.

DO NOT REMAND IT BACK TO T THAT SERVES NO PURPOSE AND MERELY DELAYS RELIABILITY IMPROVEMENTS THAT WE'RE EAGER TO MAKE.

THIS IS GONNA BE LIKE WINTERIZATION WHERE WE WERE PUTTING HANDS ON PHYSICAL ASSETS TO SEE IF THEY'VE BEEN, THEIR SOFTWARE'S BEEN UPGRADED, FOR EXAMPLE.

THANK YOU MARK.

OPEN IT UP FOR QUESTIONS FOR ANY OF THE COMMITTEE MEMBERS, BOARD MEMBERS OR COMMISSIONERS TO ANY OF THE SPEAKERS QUESTIONS.

JULIE, I'LL START WITH THE SOFTBALL QUESTION.

ASSUMING WE PASS NORE 2 45, WHAT, WHAT ARE THE PLANS THAT ERCOT TO MEASURE IMPLEMENTATION AND ACTUALLY INSPECT FOR IMPLEMENTATION?

[01:00:07]

YEAH, THIS IS A, THIS IS WOODY RICKSON WITH .

SO IT, IT IS NOT QUITE LIKE WEATHERIZATION IN THAT, UH, WEATHERIZATION IS SOMETHING THAT YOU CAN GO OUT AND INSPECT.

DID THEY WRAP THEIR PIPES? DID THEY HAVE HEAT TRACING, THINGS LIKE THAT.

WITH, UH, WITH THESE IMPROVEMENTS IT'S ALMOST, I MEAN, THEY GIVE US A MODEL AND WE CAN SIMULATE THE, THE SYSTEM USING A MODEL WHEN WE CAN SEE IF THE RIDE THROUGH WORKS USING THE MODEL.

UNFORTUNATELY A LOT OF THE MODELS WE'VE RECEIVED HAVEN'T ACCURATELY REPRESENTED THE ACTUAL CHARACTERISTICS OF THE UNITS.

A LOT OF THAT IS, THERE'S A LOT OF LEARNING PROCESS THAT GOES ON THERE WHERE MODELS GET CHANGED AND THEY GET IMPROVED AND EVENTUALLY YOU GET SOMEWHERE, BUT A LOT OF THIS STUFF IS NEW AND SO THIS ISN'T SOMETHING THAT YOU CAN GO OUT AND INSPECT AND SAY, SURE ENOUGH, WE'VE GOT EVERYTHING READY TO GO.

WE CAN LOOK AT WHAT'S NEEDED, WE CAN LOOK AT WHAT THE MODEL SAYS IT WILL DO.

BUT THAT'S ABOUT AS FAR AS WE CAN GO.

OTHER QUESTIONS? UM, I HAVE A QUESTION ON THE COMMERCIAL OR REASONABLE COMPONENT OF WHAT'S BEING USED.

AND IT SEEMS AS IF OBVIOUSLY THAT WILL BE UP TO EACH RESOURCE TO DECIDE.

AND THEN HOW DOES ERCOT GO BACK AND USE THAT IN DECIDING IF THE EXEMPTION IS ACCURATE OR NOT? BECAUSE IT'S A MOVING TARGET CONTINUALLY, IT'S NOT DEFINED ANYWHERE AND I DON'T THINK THAT SHOULD BE SOMETHING THAT'S USED IN OUR DEFINITION.

IF IT'S NOTHING CONCRETE, UH, I'D BE HAPPY TO ANSWER THAT.

SO, UH, EVERY PROJECT HAS UNIQUE CHARACTERISTICS, UH, SUCH AS HOW LONG IT'S UNDER CONTRACT, WHAT THE LOCAL PRICE IS, UM, WHETHER OR NOT IT'S AT A RICH SITE FOR SOLAR OR WIND OR ENERGY STORAGE.

AND SO WHETHER SOMETHING IS COMMERCIALLY REASONABLE DEPENDS ON MANY FACTORS IN EACH CASE.

ERCOT WILL RECEIVE A REPORT FROM EVERY GENERATOR THAT'S SIMILARLY SITUATED ABOUT WHETHER OR NOT THAT GENERATOR THINKS THAT SOMETHING IS COMMERCIALLY REASONABLE TO DO OR NOT.

AND IF THREE OF THEM SAY IT IS AND ONE OF THEM SAYS IT'S NOT, ER, CATT WILL HAVE PRETTY STRONG EVIDENCE THAT THERE'S SOMETHING GOING ON THEY NEED TO DIG INTO.

SO IT'S DIFFICULT TO, TO WRITE A FORMULA FOR WHAT IT IS, BUT ER, CATT WILL HAVE LOTS OF INFORMATION.

ER KAT CURRENTLY TALKS TO ALL OF THE OEMS IS AWARE OF OEM OFFERINGS.

THAT'LL HAPPEN MORE SO IN THE FUTURE AS THERE'S THIS ANNUAL PROCESS.

UH, AND THIS IS SOMETHING WE CAN IMPROVE OVER TIME.

IF, IF WE IDENTIFY SOMETHING.

THIS ISN'T THE LAST PART OF THE APPLE.

YOU, I HAVE A QUESTION.

I'M NOT SURE WHO'S BEST TO ANSWER IT, BUT YOU KNOW, DAN PUT A SLIDE TOGETHER TO HEAD IN HISTORY, RECENT HISTORY, 20 TO 30 RIDE THROUGH EVENTS.

AND I THINK WE ALL UNANIMOUSLY AGREE THAT RELIABILITY IS AN ABSOLUTE MUST, UH, FOR ERCOT IN THE STATE.

BUT WHAT I HEAR FROM THE SUPPLY SIDE IS, IS SOME OF THIS COULD COST US MONEY.

I HEAR THAT FROM A QUALITATIVE STANDPOINT.

I DON'T, I HAVEN'T HEARD ANYTHING FROM A QUANTITATIVE STANDPOINT AND JUST THE DEFENSE THAT IT'S GONNA COST US IS, TO ME, IS SECONDARY TO RELIABILITY OF THE SYSTEM.

CAN YOU HELP ME UNDERSTAND, MAYBE, YOU KNOW, THE QUANTIFICATION OF SOMETHING LIKE THIS? UH, YES.

TO HELP ME ANSWER THIS QUESTION, I'M GONNA ASK DAVE ARI FROM OF ENERGY TO WALK THROUGH THESE NUMBERS, UM, TO GIVE YOU HOPEFULLY THE ANSWER YOU'RE LOOKING FOR.

THANKS.

THANKS, ERIC.

HI, EVERYBODY.

DAVE RY WITHIN VENER ENERGY, SENIOR VICE PRESIDENT OF RENEWABLES ASSET MANAGEMENT.

UM, SO BEFORE I GO TO THE SLIDE, I MEAN, I WANT TO, BEFORE WE GET INTO THE DETAIL HERE, I THINK THERE'S A COUPLE OF CRITICAL THINGS, RIGHT? SO THE RANGE THAT WE'RE TALKING ABOUT FOR THE SOLUTIONS THAT ARE AVAILABLE RANGE FROM SOFTWARE PARAMETER, RIGHT FIELD FIRMWARE MODIFICATIONS TO MINOR RETROFIT KITS TO MORE SUBSTANTIAL UPGRADES THAT COULD POTENTIALLY GO ALL THE WAY OVER TO KIND OF FULL OR REBUILDS OF EQUIPMENT THAT EXIST TODAY, RIGHT? AND I THINK THAT MOST PEOPLE WOULD AGREE THAT EVERYTHING IN THIS CATEGORY IS CLEARLY COMMERCIALLY UNREASONABLE.

HOWEVER, DEPENDING ON HOW YOU READ ERCO T'S LATEST APRIL 15TH PROPOSAL, THERE IS KIND OF CONFLICTING LANGUAGE IN SOME CASES WHERE IT SAYS ANYTHING THAT'S TECHNICALLY FEASIBLE HAS TO HAPPEN.

AND IN OTHER CASES, THEY IMPOSE KIND OF A STRICT COST THRESHOLD THAT IS, SEEMS TO BE ARBITRARILY DETERMINED, AND ANYTHING UNDER THAT SEEMS TO BE REQUIRED AND OVER MIGHT GET AN EXEMPTION.

SO THE FIRST ANSWER TO THE QUESTION IS, IF YOU HAVE TO CHANGE EVERY CONVERTER AND EVERY TURBINE THAT EXISTS, OR CHANGE OUT EVERY INVERTER IN AN EXISTING SOLAR FARM THAT WE'RE TALKING TENS OF MILLIONS OF DOLLARS PER PROJECT, RIGHT? LIKE HUGE, UH, CRIPPLING COSTS THAT'S OUT HERE.

[01:05:01]

AND MAYBE ERCOT DOESN'T INTEND THAT, BUT THEIR LANGUAGE IN THIS LATEST DRAFT DOESN'T INCLUDE THAT CONCEPT.

IF WE TAKE A MORE CHARITABLE VIEW OF THE LANGUAGE AND SAY, OKAY, THAT'S NOT REALLY THE INTENT, AND WE'RE REALLY TALKING ABOUT UNDER A CERTAIN COST THRESHOLD, THAT'S WHERE WE GET INTO THIS EXAMPLE.

AND SO WHAT WE DID WAS WE TRIED TO INTERPRET THE LANGUAGE THAT WAS THERE, AND ERCOT SAYS, OKAY, WE'RE GONNA CHOOSE A BOUND, RIGHT, X PERCENT OF, OF THE COST OF REPLACING AN INVERTER OR Y PERCENT OF THE COST OF CHANGING A CONVERTER.

AS LONG AS THE COST OF A MODIFICATION IS UNDER THAT LEVEL, THEN YOU MUST DO IT WORK MORE PRECISELY.

WE WON'T GIVE YOU AN EXEMPTION IF THAT KIND OF MODIFICATION EXISTS.

AND SO WE MOCKED UP HERE A COUPLE OF EXAMPLES, AND YOU CAN SEE WE HAVE FOUR PROJECTS, TWO WIND PROJECTS, TWO SOLAR PROJECTS UNDER KIND OF DIFFERENT FLAVOR FLAVORS OF OTTS REQUIREMENTS.

AND FOUR, YOU KNOW, AN A AVERAGE REPRESENTATIVE SIZE WIND PROJECT, YOU COULD BE TALKING THREE AND A HALF TO $8 MILLION, RIGHT? OF, WELL, IN THIS CASE, 3.4 MILLION TO $7.5 MILLION OF EXPENSE AT THAT WIN-WIN PROJECT FOR THIS MODIFICATION.

AND AT A LARGER SOLAR PROJECT, YOU COULD SEE THE ORDER OF MAGNITUDE FOUR AND A HALF MILLION TO 11 MILLION.

AND JUST TO SCALE IT, WE PUT ON A DOLLAR PER MEGAWATT HOUR BASIS, YOU CAN SEE WE'RE TALKING LIKE NINE TO $20 PER MEGAWATT HOUR OVER ONE YEAR OF COST POTENTIALLY.

NOW, AGAIN, THIS IS NEW PROPOSAL BY ERCOT AS OF APRIL 15TH, RIGHT? IT'S NOT THE PROPOSAL THAT THEY BROUGHT TO TAC, UH, BUT THAT GIVES YOU SOME SENSE.

I MEAN, THESE ARE MATERIAL FIGURES, RIGHT? I MEAN, I THINK YOU, THAT'S A ONE YEAR COST, RIGHT? THAT'S NOT A PERPETUITY.

THAT'S, THAT'S A ONE YEAR COST.

THAT'S WHAT YOU HAVE TO TAKE TO RECOVER.

YEAH, THAT'S, YEAH, THAT'S A ONE YEAR COST.

BUT AGAIN, IN SOME CASES, RIGHT, YOU MAY HAVE A PROJECT WHERE THIS KIND OF COST WOULD BE CONSIDERED COMMERCIALLY REASONABLE, BUT YOU COULD EASILY HAVE PROJECTS WHERE THIS IS COMMERCIALLY UNREASONABLE.

AND THE IDEA HERE IS THAT I THINK TWO THINGS.

ONE IS THESE ARE ARBITRARY FIGURES, RIGHT? THERE'S, THERE'S NO EVIDENCE THAT SAYS, OH, 20 PERCENT'S THE RIGHT NUMBER AND NOT 10%.

AND I'D SAY THE SECOND THING IS, IS A PRACTICAL MATTER, RIGHT? THE OEMS ARE GONNA GO DEVELOP PRODUCTS TO SELL US.

IF YOU PUT THIS NUMBER THAT JUST SAYS YOU MUST SPEND X, GUESS WHAT THE PRICE IS GONNA BE, IT'S GONNA BE X, RIGHT? SO THERE, THERE'S AN ISSUE HERE WHERE THIS, THIS KIND OF CONSTRUCT DOESN'T WORK FOR US.

SO WE UNDERSTAND, RIGHT, THAT THERE'S A LITTLE BIT OF COMPLEXITY WITH HAVING AN INDIVIDUAL KIND OF PROJECT LEVEL COMMERCIAL REASONABILITY.

BUT AS ERIC SAID, AS A PRACTICAL MATTER, THERE'S ONLY A HANDFUL OF LARGE OEMS THAT SERVE THE MARKET.

EACH ONE OF THOSE TALKS TO ERCOT, AND WHEN THEY HAVE A PRODUCT, THEY'RE GONNA GO TO ERCOT AND SAY, WE HAVE THIS AVAILABLE.

AND THE ONUS IS GONNA BE ON US TO SAY, OH, IT DOESN'T MAKE SENSE WHEN IT LOOKS TO ERCOT.

LIKE IT MAKES SENSE.

SO I THINK THAT THAT'S HOW WE GET COMFORTABLE WITH LIKE, THAT THIS WILL SOLVE THE ISSUE AND THAT THERE'S NOT SOME LOOPHOLE THAT, ARE YOU SUGGESTING THAT OEMS ARE NOT GONNA BUILD PRODUCT TO 2,800? NO.

NO.

THAT'S RIDICULOUS THAT, THAT'S NOT WHAT I'M SUGGESTING.

WELL, THAT'S WHAT YOU JUST SAID.

YOU JUST SAID THEY'RE GONNA RAISE THEIR PRICE TO MEET THE MARKET.

NOW IF, IF I CAN ADDRESS THAT, I APPRECIATE IT.

SO THEY ARE DESIGNING STUFF FOR THIS, BUT THIS IS FOR EXISTING FACILITIES AND WHAT THEY HAVE TO DO.

SO ALL OF THEM ARE DESIGNING STUFF FOR NEW FACILITIES, FOR EXISTING FACILITIES.

CAN YOU MAKE AN UPGRADE? THEY MIGHT BE ABLE TO DESIGN A NEW KIT THAT DOESN'T EXIST YET.

AND THAT'S WHAT WE'RE TALKING ABOUT.

CARLOS HAD A QUESTION FOLLOWED BY LINDA.

UH, A COUPLE POINTS.

I MEAN, WE UNDERSTAND THE POINT YOU'RE MAKING ABOUT, UH, COMMERCIALLY VIABLE, UH, IMPROVEMENTS.

UM, BUT YOU KNOW, SIMILAR TO WHAT, UH, THE CHAIR WAS SAYING, RELIABILITY COMES FIRST IN A MARKET LIKE OURS, RIGHT? I DON'T THINK THERE'S ANY MARKET IN THE WORLD THAT BELIEVES MORE IN PRIVATE ENTERPRISE AND INVESTMENT AND CERTAINTY OF, UH, RETURNS AND ALL THESE THINGS.

UH, NOWHERE IN THE WORLD DO YOU HAVE THIS KIND OF ENVIRONMENT.

BUT WHY IS IT UNREASONABLE TO ASK, UH, THAT THESE IMPROVEMENTS START IN 2023 WHEN I TRIPLE E 2,800 IS FROM 2022? YEP.

I'M HAPPY TO ANSWER THAT.

UH, SO, UM, IN MANY CASES, UM, EQUIPMENT HAS ALREADY BEEN PURCHASED, IS ONE GOOD EXAMPLE.

SO DURING THE SUPPLY CHAIN CRISIS THAT WE WENT THROUGH AS A A, A COUNTRY AND AS A SOCIETY, YOU KNOW, INTERNATIONAL TRADE, IN ORDER TO GET STUFF IN THROUGH THE SUPPLY CHAIN, YOU HAD TO PLACE YOUR ORDERS TO MAKE IT HAPPEN YEARS IN ADVANCE.

THAT'S ONE ANSWER.

UM, TWO, UH, AND THAT'S A REAL WORLD, UM, REAL WORLD ISSUE WITH SOME OF OUR, OUR MEMBER COMPANIES.

UH, TWO IS, UH, ERCOT HAS PROPOSED CHANGES TO THE RIDE THROUGH STANDARD EVEN IN THE LAST COUPLE OF MONTHS THAT WEREN'T PART OF IEE 2,800.

UM, SO IT'S TOUGH TO DESIGN A MOVING TARGET.

THAT'S WHY WE WANNA GET THESE RULES IN PLACE AS QUICKLY AS POSSIBLE SO THE RULES CAN BE FINALIZED.

IF I COULD ADD JUST,

[01:10:01]

WE, WE DO A TON OF WORK, UH, ON PEOPLE THAT ARE IMPLEMENTING IEE 2,800.

THE STANDARD IS VERY GOOD.

IT TAKES YEARS FOR NI EEE STANDARD TO ACTUALLY GET THROUGH THE ENGINEERING PROCESS AND GET INTO PRODUCTION WITH OEMS. I DON'T KNOW OF ANY OEM THAT IS SHIPPING TODAY A 2,800 COMPLIANT, UH, INVERTER OR, OR WINTER, BUT IT TAKES A LOT OF ENGINEERING AND UPDATES, FULL SUPPORT FOR IT, UH, YOU KNOW, BUT, UH, AS YOU SAID, THE TEST STANDARDS STILL COMING OUT.

WE, WE, WE WANT 2,800 COMPATIBLE PLANTS AT THE POINT OF INTERCONNECTION.

ALSO AT E-CIG, WE'RE COMING OUT WITH GRID FORMING ADDITIONS TO THAT, WHICH WOULD BE IN THAT PROBABLY THE NEXT VERSION OF THAT STANDARD WHERE AT LEAST SOME PORTION CAN ACTUALLY SUPPORT FREQUENCY AND VOLTAGE IN WEAK GRID AREAS.

THIS IS, YOU KNOW, THERE'S NO QUESTION ABOUT SUPPORTING WHERE THIS IS GOING.

THE QUESTION IS JUST ON THE TRANSITION FOR, FOR LEGACY PLANTS, PARTICULARLY OLD WIND, MOST OF THE SOLAR AND BATTERY STUFF IS NOT A PROBLEM, RIGHT? IT'S CLOSE.

LINDA, YOU HAD A QUESTION? YEAH, I GUESS MY COMMENT IS BASED ON, UPON SOME OF THE RESPONSE.

SO COMMERCIALLY REASONABLE IS TOO ONE DIMENSIONAL FOR ME AND WOULD NOT GET MY SUPPORT.

HOWEVER, IN SOME OF THE COMMENTS THAT YOU MADE, YOU SAID THERE ARE DISCUSSIONS NOW THAT ARE GETTING MORE INTO BALANCING ECONOMICS AND RELIABILITY, WHICH MOVES MORE TO COMMERCIALLY, EXCUSE ME, TO MORE RE YOU KNOW, UM, IT MORE PRACTICAL IMPLEMENTATION AND THAT WOULD GET MORE, BUT IT SOUNDS LIKE YOU'RE MOVING INTO THOSE CONVERSATIONS IN WHICH CASE APPROVING THIS CURRENT FORM IS, IS, IS INCOMPLETE.

I AGREE WITH THAT.

ANY, ANY OTHER QUESTIONS, COMMISSIONER KOBOS? YES.

SO, UM, I GUESS DAN, ON SLIDE NUMBER FOUR, AND I'M JUST TRYING TO UNDERSTAND THE NUMBERS A LITTLE BIT.

YOU KNOW, JUST A LOT OF INFORMATION, UM, THAT WE'VE BEEN, UH, GIVEN TO ADDRESS THIS ISSUE TODAY.

BUT WITH RESPECT TO SLIDE NUMBER FOUR, UM, THERE ARE A TOTAL OF 32 EVENTS IN ERCOT, UM, TWO THAT ARE GREATER THAN A THOUSAND MEGAWATTS.

I'M SUSPECTING THOSE WERE THE ODESSA EVENTS.

UM, AND THE MAJORITY OF THE OTHER OR THE OTHER ONES, THE 30 OTHER ONES ARE BELOW A THOUSAND MEGAWATTS AND VARYING SIZES OF MEGAWATTS.

IS THERE A CERTAIN, I MEAN, OBVIOUSLY THE OVER A THOUSAND IS THE CONCERN, THE ODESSA EVENTS, BUT IS THERE A CERTAIN THRESHOLD OF MEGAWATTS FOR THESE EVENTS THAT CAUSE YOU CONCERN? I I KNOW THAT, LIKE FOR INSTANCE, IN YOUR COMMENTS, YOU REFER TO THE FACT THAT THERE'S 70 GIGS OF RENEWABLE INTEGRATION, RENEWABLE GENERATION COMING ON OR IBR CAPACITY COMING OUTTA THE SYSTEM.

IF YOU TAKE THE, UM, 70,000 AND EXTRAPOLATE THOSE TWO EVENTS, THAT'S 1.4% OF THE BROADER POLL THAT YOU'RE REFERRING TO.

AND SO I'M JUST TRYING TO UNDERSTAND LIKE, IS IT A CULMINATION OF, I MEAN, SOME OF THESE EVENTS ARE LIKE 31 MEGAWATTS, AND SO I'M TRYING TO UNDERSTAND IS IT LIKE OVER A THOUSAND THAT YOU'RE TRYING TO CARE FOR OR OVER A THOUSAND MEGAWATTS? YEAH, SO A, A LOT OF THESE EVENTS HAPPENED AT NIGHT, AND SO THE SOLAR WAS AT A, A LOW OUTPUT.

OTHERS HAPPENED WHEN THE WIND WASN'T BLOWING AS MUCH.

AND SO THE, THE IMPACTS HERE ARE THE AMOUNTS THAT ACTUALLY WERE LOST OR THAT CEASED TO PRODUCE OR SOMETHING LIKE THAT, NOT KIND OF THE INSTALLED CAPACITY.

SO THOSE NUMBERS COULD HAVE BEEN A LOT HIGHER IF THE WIND WAS BLOWING MORE OR THE SUN WAS SHINING.

SO, UM, NOW WHAT WOULD CAUSE A CONCERN? I MEAN, THERE'S, IT'S, IT'S RATCHETING UP.

IF, IF IT GOES OVER OUR MOST SEVERE SINGLE CONTINGENCY, WHICH IS ONE OF THE NUKE PLANTS, WE'D HAVE TO START BUYING MORE ANCILLARY SERVICES IN ORDER TO COVER THAT.

WE'D HAVE TO START MODELING THAT AS A SINGLE CONTINGENCY .

THERE, THERE ARE ISSUES LIKE THAT, THAT IF WE'RE GONNA HAVE, UM, IF WE'RE GONNA ALLOW THOSE THINGS TO CONTINUE, WE'RE GONNA HAVE TO TAKE OPERATING ACTIONS TO PREVENT.

AND SO IT, IT'S KIND OF A, THERE'S NOT JUST ONE ANSWER AT MULTIPLE THINGS.

THE FIRST WOULD BE MSSC.

THE SECOND WOULD BE STABILITY ISSUES WITHIN A SINGLE GEOGRAPHIC AREA.

UM, RIGHT NOW, THE MODELS THAT THE GENERATORS HAVE PROVIDED TO US DON'T EVEN SHOW THESE TRIPS SHOULD HAPPEN BECAUSE THE MODELS DON'T ACCURATELY REFLECT WHAT THE PROTECTION SYSTEMS AND SOME AND OTHER PARAMETERS ARE SET TO IN THE FIELD.

AND SO THERE'S AN ISSUE THERE THAT WE NEED TO SOLVE AS WELL.

UM, SO THERE'S NOT JUST ONE ANSWER TO YOUR QUESTION.

IT COULD BE LOTS OF DIFFERENT THINGS THAT WOULD CAUSE US A CONCERN.

AND ALSO, UM, WE'RE GETTING MORE AND MORE INVERTEBRATE RESOURCES ON THE SYSTEM.

TO HAVE 60% PENETRATION, 70% PENETRATION, HIGH PENETRATIONS OF IVRS AND THUNDERSTORMS WITH LIGHTNING STRIKES ROLLING THROUGH WEST TEXAS RIGHT IN THE MIDDLE OF THEM.

SO IT'S NOT GONNA BE UNCOMMON

[01:15:02]

AND SO WHAT WAS A RISK IN 2013 IS EVEN MORE OF A RISK TODAY, AND IT WILL BE EVEN MORE OF A RISK GOING FORWARD.

WE'RE GONNA HAVE A LOT MORE.

AND HAVING A GOOD FIRM STANDARD NOW PREVENTS THAT RISK GOING FORWARD.

MM-HMM, , WELL, RELIABILITY IS PARAMOUNT.

THAT THAT'S REALLY, UM, ERCOT MISSION, IT'S OUR MISSION AS WELL AT THE COMMISSION.

I THINK EVERYBODY, EVEN THE STAKEHOLDERS AND EVERYBODY WANTS RELIABILITY.

UM, YOU KNOW, GETTING AN INDUSTRY TO, IN THE MARKET TO RISE UP TO A STANDARD AS WE'VE DONE WITH WEATHERIZATION, RIGHT? 2011, WE HAD NO STANDARD, UM, BEST PRACTICES DIDN'T WORK.

2021, UM, WITH A CATASTROPHIC WINTER STORM URI IMPACT, WE HAD LEGISLATION WAS PASSED, MADE THOSE WEATHERIZATION STANDARDS MANDATORY, BUT WE IMPLEMENTED THOSE WEATHERIZATION STANDARDS IN A PHASED MANNER THAT ALLOWED THE MARKET AND THE INDUSTRY TO EVOLVE AND RISE UP TO THAT STANDARD.

AND SO, UM, THAT'S REALLY I THINK HOW WE GET COMPLIANCE OVERALL.

AND, AND WE MAXIMIZE AND OPTIMIZE, UM, YOU KNOW, THE, THE ABILITY TO MAINTAIN RELIABILITY WITH THOSE RISKS THAT, THAT WE IDENTIFY, WHETHER IT'S COLD WEATHER OR, UM, YOU KNOW, THE INTERACTION OF, OF THESE, UM, FACIL SPECIFIC FACILITIES WITH, UM, YOU KNOW, VOLTAGE DRIVE-THROUGH AND ENSURING ALL THAT.

SO THAT'S JUST AN OBSERVATION.

UM, THE OTHER OBSERVATION THAT I WANTED TO HIGHLIGHT WAS THE APPEALS AND EXEMPTION PROCESS.

UM, I DON'T KNOW WHAT THE RIGHT ANSWER IS, BUT, BUT IF WE CAN KIND OF LOOK AT THIS FROM THE PERSPECTIVE OF, UM, THERE, I, I LOOKED AT THE TAC APPROVED VERSION.

I LOOKED AT THE, UM, ERCOT, UM, RECENT COMMENTS AND THAT, YOU KNOW, THERE'S, THERE'S A LOT OF REFERENCES TO ERCOT OPINION IN THE, UM, IN THE RECENT ERCOT COMMENTS.

AND I, AND I DEFINITELY WANT ERCOT TO BE IN THE POSITION TO REVIEW EXEMPTIONS AND EXTENSIONS.

AND, BUT I, I ALSO WANNA MAKE SURE THAT THERE'S NOT SOME LEVEL OF SUBJECTIVITY, UM, IN THERE THAT WE, IF WE END UP WITH COMPLAINTS AT THE COMMISSION, UM, CAN'T EXTRAPOLATE THE INFORMATION.

WE NEED TO REVIEW WHY SOMETHING, YOU KNOW, WHY AN EXEMPTION OR EXTENSION WAS REJECTED.

SO THERE'S GOTTA BE ENOUGH INFORMATION IN THERE, UM, THAT'S OBJECTIVE EVIDENCE-BASED INFORMATION FOR US TO BE ABLE TO EVALUATE ANY COMPLAINTS THAT COME TO US.

AND ALSO, IT SEEMS LIKE IF WE MOVE IN THE DIRECTION OF ERCOT COMMENTS AND YOUR RECOMMENDATIONS, WE'RE GONNA END UP A LOT OF COMPLAINTS AT THE COMMISSION THAT ALLOW FOR SOME KIND OF A DR PROCESS TO HAPPEN AT ERCOT SO THAT WE'RE NOT SLAMMED WITH A BUNCH OF COMPLAINTS IN THE BACK END.

AND WE'RE NOT, WE DON'T HAVE THE TECHNICAL EXPERTISE TO BE REVIEWING ALL OF THAT INFORMATION, RIGHT, INTERNALLY.

CAN I ADDRESS THAT? UM, DID YOU HAVE SOMETHING TO SAY, WOOD, OR, UH, CAN I JUST RESPOND? YEAH, PLEASE.

SO IF THE RESOURCE OWNER HAS DONE EVERYTHING THAT THEY DETERMINE IS COMMERCIALLY REASONABLE, AND IF THEY MODEL THEIR, UH, CAPABILITIES, IF THOSE TWO CRITERIA ARE MET, ERCOT CANNOT DENY THE EXEMPTION.

SO, YOU KNOW, THE VERSION THAT WE PUT OUT THERE CLEARLY SAYS THAT ERCOT HAS TO ARTICULATE THE REASON FOR DENYING EXEMPTION.

BUT I ALSO THINK THAT, UH, I'D LIKE TO GO BACK TO, UH, NEXTERA'S PRESENTATION.

CAN WE, CAN WE GET THAT ONE UP THERE? GO TO SLIDE NINE, BECAUSE I THINK THIS IS AN IMPORTANT PART THAT, THAT DECISION MAKERS REALLY NEED TO, TO UNDERSTAND.

AND IT'S NOT EXACTLY APPARENT.

NINE NINE.

AND SO I, I WANT TO, UH, YEAH.

SO THIS IS A GREAT SLIDE.

WE SHOULD ALL DO, WE, ERCOT SHOULD HAVE DONE THIS.

WHEN YOU GET THESE COMPLEX ISSUES LIKE THIS, WE SHOULD HAVE A FLOW CHART TO COMPARE WITH THIS SO THAT WE, WE CAN SHOW THE DIFFERENT, UH, THE DIFFERENT PROCESSES AND WHAT WE'RE, WHAT'S BEING PROPOSED AND COMPARE 'EM USING A FLOW CHART.

I REALLY LIKE VISUALS.

I THINK THIS KIND OF THING REALLY HELPS PEOPLE UNDERSTAND WHAT'S GOING ON.

BUT I THINK THERE'S A PIECE MISSING FROM HERE TOO.

AND IF YOU SEE THAT WHITE BOX ON THE TOP RIGHT HAND SIDE THERE THAT SAYS, UH, RESOURCE FILES AND EXTENSION OR EXEMPTION REQUEST BY FEBRUARY, 2025, UNDERNEATH THAT, THERE'S THE YELLOW BOX THAT SAYS THAT ERCOT GRANTS THE EXEMPTION.

OR IF YOU GO OVER TO THE SIDE, IT SAYS THAT, UH, ERCOT STAFF DENIES THE EXEMPTION.

WHAT'S LEFT OUT OF THIS, AND IT'S A KEY DIFFERENCE IN THE TWO PRESENTATIONS, IS THAT ERCOT CAN ONLY DENY CERTAIN EXEMPTIONS.

[01:20:02]

AND THAT DECISION BOX IS NOT ON THAT FLOWCHART.

AND THAT'S AN IMPORTANT PART OF WHAT YOU'RE ASKING ABOUT COMMISSIONER KOOSE.

AND I THINK, UM, I THINK IT'S A SYMPTOM OF THE FACT THAT WE HAVEN'T TALKED THROUGH ALL THIS LANGUAGE YET.

THAT MAY NOT EVEN HAVE BEEN THE INTENTION, THE WAY IT WAS WRITTEN, BUT WHEN YOU READ THE LANGUAGE, THAT'S, THAT'S HOW WE WOULD HAVE TO CARRY IT OUT.

AND SO MORE TIME TO WORK THOSE KINDS OF THINGS OUT.

'CAUSE IT MAY NOT EVEN HAVE BEEN THE, UH, THE, THE, UH, THE INTENTION, BUT THAT IS ACTUALLY HOW IT WOULD READ.

SO WE GET AN EXTENSION OR AN EXEMPTION REQUEST.

IF THEY'VE MET THE TWO CRITERIA, OUR HANDS ARE TIED, AND THAT'S GONNA BE THE MAJORITY OF THOSE.

AND SO THOSE ARE THE KINDS OF THINGS WE NEED HAVE TO HAVE TIME TO TAKE BACK TO TACK AND WORK THROUGH, BECAUSE THAT MAY NOT EVEN HAVE BEEN THE, THE INTENTION THERE.

UM, BUT THAT'S THE WAY IT WOULD READ.

THAT'S THE WAY IT READS RIGHT NOW.

AND THAT'S THE WAY WE WOULD HAVE TO EXECUTE IT.

WELL, WE, WE CAN ANSWER THAT AS WELL, IF YOU'D LIKE US TO, BEFORE I WRAP THIS UP, I GUESS, LINDA, YOU CAN HAVE THE FINAL WORD.

SO, SO I WANTED TO COMMENT AND THANK YOU FOR THE WAY YOU PHRASED IT, BECAUSE, UM, THERE WERE TWO OTHER POINTS THAT DON'T GAIN MY SUPPORT.

AND I AGREE.

I THINK THIS NEEDS TO BE DISCUSSED SOME MORE.

SO FOR EXAMPLE, IN ORDER TO PREVENT THE FAILURES FROM THE PAST, FROM RECURRING, WHICH IS WHAT YOU TALK ABOUT, WE NEED TO CHANGE AND GRANDFATHERING IN DOESN'T CREATE THAT CHANGE.

AND I WOULD SAY AGREE THAT THAT NEEDS MORE DISCUSSION.

WHAT DOES THAT MEAN? AND THEN THE SECOND ONE IS NOW ALLOWING AN OFFENDING ENTITY TO GIVE ITSELF AUTOMATIC, UM, EXEMPTIONS.

AND THAT, AGAIN, IS THE WAY IT READS.

'CAUSE AS A BOARD MEMBER, I WAS READING IT, NOT GOING THROUGH ALL THE DISCUSSIONS WITHOUT LIMITATION DOES NOT MEET THE STANDARDS OF AN INDEPENDENT DETERMINATION OF RELIABILITY IMPACT.

SO I'M AGREEING THAT THIS IS NOT A FINISHED DISCUSSION.

YEAH, WELL SAID LINDA.

SO I LIKE TO PROPOSE THAT WE, WE IN FACT DO RECOMMEND REMAND THIS BACK.

I DON'T THINK IT'S READY FOR APPROVAL IN ITS CURRENT STATE.

I'D LIKE TO SEE KIND OF LESS DAYLIGHT BETWEEN THE TWO POSITIONS THAT ARE OUT THERE.

SO I'LL RAISE THIS, I MEAN, I'LL MAKE A PROPOSAL TO THE COMMITTEE THAT WE REMAND THIS BACK, UH, TO TACK INTO ERCOT AND MODIFY THE LANGUAGE, UH, TO ADDRESS THESE RELIABILITY RISKS THAT, THAT EXIST.

AND I NEED A MOTION TO APPROVE THAT.

IF YOU'RE IN AGREEMENT, CARLOS MOVES.

JULIE, COURTNEY ABSTAIN.

OKAY, SO WE HAVE HAD TWO, AND I APPROVE.

SO WE GOT THREE OUT OF THE FOUR APPROVALS, ONE BEING ABSTENTION, SO THAT WE WILL SEND IT BACK TO REMAND, BACK TO, UH, TO ERCOT TO WORK WITH TAC BOB.

IF I MAY, IF I CAN ADD A COMMENT TO THIS, UM, IN TERMS OF THE CONTEXT OF COMMERCIAL COMMERCIALLY REASONABLE, THE ECONOMIC COMPONENTS OF THAT NEED TO NOT ONLY TALK ABOUT THE VALUE OF RELIABILITY, BUT THE COST OF FAILURE.

SO THE COST OF LOAD, SHE, THE COST OF BLACKOUT, THINGS LIKE THAT.

SO IS IT'S REMANDED BACK TO, TO TAC.

I THINK ER AND TAC NEED TO WORK TOGETHER TO MAKE SURE THOSE ECONOMICS ARE, AND THAT PARTIALLY ANSWERED LORI'S QUESTION AS AS WELL, IF SOMETHING EVER GOES TO THE, TO THE PUC.

BUT WE ALWAYS TALK ABOUT RELIABILITY, BUT WE NEED TO START TALKING ABOUT WHAT HAPPENS IF RELIABILITY FAILS.

AND WHAT'S THE COST THAT BECAUSE THEY'RE REAL, THE COST RELIABILITY IS SIGNIFICANT.

YES, THANK YOU.

OR IF ANY OTHER TYPE OF INVESTMENT, JUST, JUST TO FURTHER ELABORATE ON ON OUR THOUGHTS IS IT'S REMANDED BACK.

YOU KNOW, WE'RE HERE AT THE TIP OF THE ICEBERG ON WHAT THIS IS ACTUALLY GONNA LOOK LIKE IN, IN ERCOT.

I, THE WAY I READ THE LANGUAGE THAT'S BEEN PROPOSED IS THAT IT'S A, IT'S A COMMERCIAL STANDARD FROM YOUR PERSPECTIVE.

AND WE DO NOT, ERCOT STAFF DOES NOT GET TO LOOK AT RELIABILITY SYSTEM WIDE.

AND THAT'S A CRITICAL PART IN MAKING THE DECISIONS.

SO I ENCOURAGE YOU TO LOOK AT THAT.

AND THEN JUST, LORI, I I CERTAINLY APPRECIATE THE CONCERNS ABOUT, UH, BEING IN FIGHTS OVER AND OVER AGAIN.

I THINK IT'S A REAL CONCERN WITH, YOU KNOW, PEOPLE COMING IN AND DOING EXTENSIONS, BUT IF THERE'S EVER A STANDARD THAT'S GONNA GUARANTEE THAT IT'S A COMMERCIAL, COMMERCIAL STANDARD, UH, THERE'S LIT, UH, STANDARDS ALWAYS IN COURTS, PEOPLE FIGHTING OVER WHAT IT MEANS.

AND SO, UH, YOU'VE GOT, TO ME, YOU'VE GOTTA HAVE RELIABILITY TRUMP EVERYTHING.

YEP.

OKAY, MR. CHAIRMAN.

YEP.

UM, I, UH, APPRECIATE Y'ALL'S DISCUSSION HERE.

I THINK IT'S, UH,

[01:25:01]

UM, I, I HAVE ONE QUESTION FOR WOODY, IF YOU DON'T MIND ME ASKING, UM, KIND OF AFTER THE FACT, AND THEN ONE FOR MAYBE DAN.

UM, BUT, UH, ON SLIDE THREE OF THE ERCOT RESPONSE, UH, THERE IS THE MAP WHICH SHOWS THE, UH, WHERE THESE, UH, FAULTS HAPPENED, WHERE THESE RESOURCES TRIPPED FROM THE SYSTEM.

AND WOODY, YOU AND I HAVE TALKED IN THE PAST, WERE, WERE TAKING, YOU ALL ARE TAKING EFFORTS AS WELL AS THE INDUSTRY TO UPGRADE THE TRANSMISSION SYSTEM IN THE PERMIAN BASIN.

AND, UM, THAT'S WHERE MANY OF THESE FAULTS HAVE HAPPENED.

AND IT SHOWS THAT THE WEAKER THE SYSTEM, THE MORE LIKELY THESE ARE TO HAPPEN.

SO THE QUESTION IS, WHEN YOU COME BACK, UM, COULD YOU AT LEAST HAVE SOME DISCUSSION ABOUT HOW FUTURE UPGRADES, INCLUDING THE SYNCHRONOUS CONDENSER ISSUE, MAY AFFECT, UH, THESE IBR THAT ARE OUT IN THAT AREA? YES, SURE WILL.

SYNCHRONOUS CONDENSERS, NEW THERMAL GENERATION, NEW TRANSMISSION LINES, ALL THOSE THINGS HAVE AN EFFECT.

YEAH, THE TIME PERIOD TO GET 'EM IN IS PROBABLY A LITTLE LONGER THAN THE TIME PERIOD TO INSTALL SOME SOFTWARE UPGRADES THOUGH, ON, ON INVERTERS.

AGREE WITH THAT.

AND THEN THE ONE OTHER QUESTION THAT I HAD FOR DAN, WHICH WAS I THINK THE NEXT SLIDE, WHICH WAS, UM, ON THIS, THIS LIST OF RIDE THROUGH EVENTS, UH, ESPECIALLY THE ONES WITH ERCOT, THEY'RE, CAN YOU FIND OUT, OR DO YOU KNOW HOW MANY OF THOSE RIDE THROUGH EVENTS WERE AT SINGLE FACILITIES OR IF THEY WERE LIKE THE ODESSA EVENT WHERE ONE UNIT TRIPPED ANOTHER UNIT? SO I DON'T KNOW THAT OFF THE TOP OF MY HEAD, BUT WE HAVE THE LIST OF WHAT ALL PARTICIPATED.

I THINK IT WAS PART, MANY OF THEM WERE PARTS OF MULTIPLE UNITS THAT DIDN'T RIDE THROUGH, BUT WE CAN LOOK AT IT AND MORE COMPREHENSIVELY.

THANK YOU, MR. CHAIRMAN.

ONE OTHER, ONE OTHER THING TO ADD TO THAT IS ALSO THAT, UH, INVERTEBRATE RESOURCES ARE BEING INSTALLED ACROSS THE SYSTEM.

NOW, THEY'RE NOT JUST A WEST TEXAS PHENOMENON, EAST TEXAS, SOLAR SOUTH TEXAS WIND, THEY'RE EVERY, THEY'RE, THEY'RE, THEY'RE THROUGHOUT THE SYSTEM NOW.

AND SO THIS RISK IS, IS, IS IS NOT JUST A WEST TEXAS RISK.

NO.

BUT, BUT ISN'T IT TRUE THAT IF IT, IF THEY ARE INTERCONNECTING AT THE SYSTEM WHERE THE SYSTEM IS STRONGER, THE LIKELIHOOD OF A FAULT HAPPENING IS, I DON'T WANT TO SAY LESS, BUT, UH, THAT THE A, UH, CASCADING OUTAGE IS, IS LESS OF A LIKELIHOOD? WELL, I THINK THE FAULT IS PROBABLY THE SAME RISK.

THE EFFECT THE FAULT HAS ON THE GRID IS NOT AS SEVERE AND AS A STRONGER GRID.

RIGHT.

MM-HMM.

CAN I JUST MAKE A CLARIFICATION? 'CAUSE IF I GOT THIS WRONG, THEN I MISUNDERSTOOD THIS CONVERSATION ON PAGE SEVEN WITH YOUR PLY CHART, WHERE 80% OF IT IS GREEN.

CAN WE TAKE AWAY FROM THE CONVERSATION THAT EVERYBODY IN THE ROOM AGREES WITH THE SOFTWARE UPGRADES AND WHAT WE'RE REALLY NOT AGREEING TO IS THE 20% YES.

HARDWARE ISSUES? I, WOODY, I AGREE WITH THAT.

WE'RE TALKING ABOUT HARDWARE IMPACTS.

THANK YOU FOR CLARIFYING.

I'M SORRY TO, AND I THINK IT'S IMPORTANT WHEN WE HAVE DISAGREEMENTS, WE ALSO TALK ABOUT WHAT WE AGREE UPON GOING FORWARD.

THAT WE ULTIMATELY ADOPT IN ERCOT FOR THESE IBR CAPACITY.

AND THAT'S WHY WE'RE, WE'RE GONNA BE SENDING OUT THIS MARKET NOTICE THAT SAYS, PLEASE DON'T WAIT ON THIS ANY FURTHER DISCUSSION OF THIS NOER, BUT GO AHEAD AND GET STARTED ON IMPLEMENTING THOSE SOFTWARE UPGRADES AND, AND PARAMETER CHANGES.

YEP.

ONE FINAL COMMENT, JUST SO I CAN BE CLEAR.

UM, YOU KNOW, I I, AND THAT, I THINK THAT'S A GREAT IDEA TO SEND OUT THE MARKET NOTE IS JUST ENCOURAGING COMPLIANCE WITH, WITH THE STANDARD THAT'S UPCOMING.

IT'S IMPORTANT.

I MEAN, WE GOTTA MAINTAIN RELIABILITY.

WE HAVE A LOT OF IBR CAPACITY COMING INTO THE SYSTEM THAT POSES DIFFERENT OPERATIONAL RELIABILITY RISKS, UM, IN A VARIETY OF WAYS.

I, I, I'M HEARING FROM THE STAKEHOLDERS THAT THEY'RE, YOU KNOW, AGREEING THAT IT'S A CRITICAL ISSUE THAT NEEDS TO BE ADDRESSED, IS JUST HOW WE GET THERE, UM, THAT MATTERS.

AND, UM, ON THE TIMING AND ALL THE DIFFERENT NUANCES THAT YOU GUYS WILL EVALUATE ON REMAND.

MY POINT EARLIER REALLY IS THAT, UM, AS WE WORK TOGETHER, ERCOT STAKEHOLDERS THROUGH WHATEVER PROCESS ULTIMATELY GETS ADOPTED BY THE BOARD, IS THAT, UM, THERE'S GOTTA BE ROOM FOR, AND I'M NOT SAYING THE ERCOT PROPOSED PROCESS DOESN'T INCLUDE THIS, BUT I'M JUST ENCOURAGING ERCOT, WHATEVER PROCESS ULTIMATELY GETS APPROVED FOR ERCOT TO WORK WITH THE STAKEHOLDERS.

AND AS YOU APPLY YOUR RELIABILITY EXPERTISE TO THE SYSTEM AND, AND TO LISTEN TO THE FEEDBACK OF THE STAKEHOLDERS THAT ARE OPERATING THESE ASSETS AND, AND, UM, HAVE BEEN OBVIOUSLY WORKING ON THE STANDARD THROUGH VARIOUS WORKING GROUPS AND DISCUSSIONS SO THAT THERE'S COMMUNICATION, UM, TO ARRIVE AT THE TECHNICAL SOLUTIONS THAT WE'RE GONNA NEED FOR THE STANDARD

[01:30:01]

AND THAT, THAT ALL GETS HASHED.

THE MAJORITY OF IT GETS HASHED OUT AT ERCOT SO THAT WE'RE NOT IN THE BACK END HAVING TO SORT OF DEAL WITH A BUNCH OF COMPLAINTS THAT ARE VERY TECHNICAL AND, AND, UM, WILL REQUIRE A LOT OF THIS IS A ERCOT STAKEHOLDER ISSUE THAT NEEDS TO BE ADDRESSED.

IT'S TECHNICAL, IT'S RELIABILITY.

WE SHOULDN'T BE GETTING A LOT OF COMPLAINTS AT THE BACK END.

UM, IT'S EXPENSIVE FOR THE STAKEHOLDERS.

IT TAKES A LONG TIME.

IT SETS REGULATORY UNCERTAINTY FOR THEM.

Y'ALL WANT COMPLIANCE IN A REASONABLE AMOUNT OF TIME, SO YOU HAVE RELIABILITY.

SO I JUST, FOR US IN THE BACKGROUND, UH, AT LEAST FROM MY PERSPECTIVE, THAT'S, THAT'S WHAT I WOULD WANT TO SEE.

SO THAT'S IT.

ALRIGHT.

FINAL WORD, ERIC, FINAL WORD FOR THE TIME.

UH, VERY BRIEF.

UM, I THINK IT'D BE HELPFUL IF Y'ALL WERE TO GIVE ADDITIONAL DIRECTION TO TAC ON WHETHER OR NOT YOU WANT TAC TO BIFURCATE NEW VERSUS EXISTING RESOURCES.

SO WE'RE ALL OF OUR DISPUTE SO FAR HAS BEEN ABOUT EXISTING RESOURCES AND TAC DID NOT BIFURCATE AT ER CATCH REQUEST PREVIOUSLY.

WE, WE, I THINK IT'D BE HELPFUL TO KNOW IF YOU WANT US TO DO THAT.

WELL, I JUST WANT, I MEAN, I THINK THE WHOLE THING'S GOING BACK TAC NEEDS TO WORK WITH ERCOT AND REMAN.

WE'RE GONNA REMAND THE WHOLE, THE ENTIRE LET YOU GUYS WORK OUT SINCE YOU'RE ALL THE EXPERTS.

GONNA TRY TO ESCAPE TO AGENDA ITEM NUMBER FIVE.

SO WITH THAT, I'M

[5. Recommendation regarding San Antonio South Reliability II Regional Planning Group (RPG) Project ]

IT'S THE RECOMMENDATION REGARDING SAN ANTONIO SOUTH RELIABILITY, UH, REGIONAL PLANNING GROUP PROJECT AND ERCOT STAFF RECOMMENDATION IS TO APPROVE THE PROJECT AND INCLUDES A RECOMMENDATION FOR THE BOARD TO DESIGNATE THIS PROJECT AS CRITICAL FOR RELIABILITY.

THE HOBBS WILL PRESENT THE RECOMMENDATION.

AND THANK YOU EVERYONE ON WORKING THROUGH 2 45 WITH US.

WELL, YOU CALLED ME UP IN THE ROOM.

CLEAR.

CAPABILITY, PROVIDES ADDITIONAL LOAD INTERCONNECTION POINTS AND IMPROVES THE OPERATIONAL FLEXIBILITY IN THE SAN ANTONIO REGION, WHICH WE HAVE BEEN TALKING ABOUT, UH, A LOT HERE RECENTLY, .

I DON'T KNOW WHAT YOU SAID TO THESE PEOPLE, CHRISTIE.

UM, ALL RIGHT, WELL GOOD AFTERNOON.

LET'S SWITCH GEARS A LITTLE BIT.

SO I'M BRINGING TO YOU TODAY THE RECOMMENDATION FOR, UH, ADDITIONAL RELIABILITY PROJECT IN THE SAN ANTONIO AREA.

IT'S HERE BEFORE YOU TODAY.

UM, AND WE'RE GONNA BE ASKING YOU TO CONSIDER ENDORSING THIS PROJECT AND DESIGNATING IT AS CRITICAL AND SENDING ONTO THE BOARD.

JUST A QUICK REMINDER, UH, WHICH THIS IS PROBABLY BECOMING OLD HAT FOR YOU ALL, UH, AS WE'VE GOT A LOT OF NEW TRANSMISSION PROJECTS COMING THROUGH THE SYSTEM, ANYTHING THAT'S OVER A HUNDRED MILLION DOLLARS DOES HAVE TO COME BEFORE THE BOARD, UH, FOR REVIEW.

GIVE YOU A LITTLE BIT OF HISTORY, UM, ABOUT THIS PROJECT.

SO ORIGINALLY A BRAZOS ELECTRIC CO-OP BROUGHT TO ERCOT A PROJECT BACK IN SEPTEMBER OF 2023.

AND THE ORIGINAL REQUEST, UM, HAD A LINE FROM SAN MIGUEL TO MARION, AND THEY PUT THAT THROUGH THE, THE REGIONAL PLANNING GROUP REVIEW PROCESS.

AFTER WE PERFORMED OUR INDEPENDENT REVIEW, WE DID NOT CONFIRM THE ORIGINAL LINE AS A NEED PER THE REQUEST FROM BRAZOS ELECTRIC.

BUT WHILE DOING OUR STUDIES, WE DID UNCOVER A NEED FOR THIS, UH, SAN ANTONIO RELIABILITY PROJECT.

SO WHAT WE'LL DO IS WE'LL WALK THROUGH, UM, THE OPTIONS AND THE RECOMMENDATION FROM ERCOT, UM, THAT WAS TAKEN TO TAC AND WAS UNANIMOUSLY RECOMMENDED BY THEM AS WELL AT THEIR MEETING LAST WEEK.

SO DOING OUR INDEPENDENT REVIEW, UM, WHAT WE FOUND WERE SEVERAL NERC AS WELL AS OP PLANNING CRITERIA NEEDS.

THEY REALLY, UH, CENTERED AROUND TWO KEY AREAS, WHICH WAS THE LOSS OF A GENERATING UNIT FOLLOWED BY A SINGLE TRANSMISSION ELEMENT, AS WELL AS A LOSS OF A COMMON TOWER.

ERCOT WENT THROUGH.

AND AS YOU CAN SEE, WE'RE RECOMMENDING OPTION 14.

SO WE SPENT A LOT OF TIME LOOKING AT A LOT OF DIFFERENT OPTIONS ON WHAT COULD BE DONE TO INCREASE THE RELIABILITY FOR THAT REGION.

WHAT WE'RE BRINGING TO YOU IS A RECOMMENDATION FOR A REBUILD OF TWO CURRENT 3 45 LINES THAT ARE SINGLE CIRCUIT.

SO EXPANDING THE RIGHT OF WAY AND MAKING THEM A DOUBLE CIRCUIT LINE, AS WELL AS ADDING A NEW SUBSTATION TO HELP WITH THE FLOW FROM SOUTH TEXAS INTO THE SAN ANTONIO AREA.

AS WE WENT THROUGH THIS RECOMMENDATION, THE REASON THAT WE ARE BRINGING THIS PARTICULAR RECOMMENDATION IS NOT ONLY DOES IT REDUCE OR RELIEVE THE RELIABILITY VIOLATIONS THAT WE WERE SEEING FROM OUR PLANNING CRITERIA, BUT IT WAS THE LEAST COST OPTION OUT OF ALL THE OPTIONS WE LOOKED AT.

THAT'S MAINLY BECAUSE WE'RE USING CURRENT RIGHT OF WAYS AND ONLY EXPANDING THEM.

IT IMPROVES THE LONG-TERM LOAD SERVING

[01:35:01]

SO IN SUMMARY, UM, WHAT I'M ASKING FOR YOU TO DO IS TO ENDORSE OR RECOMMEND THE PROJECT THAT ERCOT HAS BROUGHT TO YOU, WHICH WAS ALSO UNANIMOUSLY ENDORSED BY TAC OPTION 14, AS WELL AS DESIGNATED AS CRITICAL TO THE RELIABILITY OF THE SYSTEM.

DOES ANY COMMITTEE MEMBER HAVE A QUESTION OR COMMENT FOR KRISTEN? I JUST HAD ONE QUESTION.

IT'S THAT MARION CONNECT THAT APPEARS IN THE OTHER OPTIONS.

HOW'S THAT RESULT WITH THIS ONE? SO I BELIEVE FROM MY UNDERSTANDING, FROM TALKING WITH THE TEAM, UM, WHAT WE'LL SEE IS IN SOME FUTURE PROJECTS THAT WOULD BE COMING FORWARD, YOU WOULD LIKELY SEE MAYBE LATER THIS YEAR, UM, THOSE, THOSE NEEDS MAY BE TAKEN IN, UM, THROUGH A PROJECT THAT WE SAW IN OUR 2023 REGIONAL TRANSMISSION PLAN OR ANNUAL PLAN.

IT'S LOOKING FROM A ADDITIONAL 3 45 LINE FROM THE SOUTH TEXAS AREA UP INTO CENTRAL TEXAS, YOU KNOW, NORTH OF THE HU AREA.

AND THAT WOULD BE TAKEN IN WITH THAT.

YEAH, THE QUESTION WAS, BECAUSE I SAW IT IN THE OTHER OPTIONS, BUT NOT OF THIS ONE.

CORRECT.

THIS IS LIKE PHASE TWO.

YOU GOT PHASE ONE, A COUPLE BOARD MEETINGS AGO.

THIS IS LIKE PHASE TWO AND THEN THERE'S A PHASE THREE COMING.

AND THAT WOULD BE GOOD.

THAT INCLUDES, THAT ENCOMPASSES THAT PART AS WELL.

THERE'S NO FURTHER, OH, SORRY, GO AHEAD THOMAS.

CHRISTIE, YOU SAID, UM, THE THRESHOLD FOR BRINGING TO THE BOARD IS A HUNDRED MILLION DOLLARS.

DO YOU KNOW WHEN THAT THRESHOLD WAS ADOPTED AND IMPLEMENTED? THAT'S BEEN QUITE SOME TIME AGO IN LIKE THE 20 TEENS.

DAN, DOES THAT SOUND ABOUT RIGHT? RIGHT.

IT'S BEEN A WHILE.

15 YEARS.

SO I'D I, YOU KNOW, ENCOURAGE YOU, YOU AND YOUR TEAM AND MAYBE EVERYONE TO LOOK AT WHETHER OR NOT THAT THRESHOLD STILL MAKES SENSE OR IF IT NEEDS TO BE INCREASED.

UM, YOU KNOW, SINCE WE HAVEN'T MADE ANY CHANGES TO IT IN OVER A DECADE, IT MAKES SENSE IN, UM, CHRISTIE AND WOODY, JUST FOR THE PUBLIC'S, UM, EDUCATIONAL PURPOSES.

SO PHASE ONE IS THE CPS, UM, SOUTH OF SAN ANTONIO PROJECT.

THAT'LL BE ENERGIZED, I BELIEVE THAT I HAVE, UM, END OF 2027, SUMMER OF 27.

AND THEN, UM, THIS PHASE TWO, AND THEN ULTIMATELY PHASE THREE WILL BE 20 27, 20 28 SLASH 2029.

SO WITHIN THE NEXT, YOU KNOW, I GUESS FIVE YEARS, WE WILL HAVE A THREE PHASED APPROACH OF TRANSMISSION BUILD OUT INTO THE VALLEY TO HELP ADDRESS THE SOUTH TEXAS CONSTRAINT ISSUE.

AND THAT'S ALSO COUPLED WITH THE SOUTH TEXAS PROJECT THAT GOES ALL THE WAY DOWN TO THE LOWER RIO VALLEY AS WELL.

SO THOSE WILL MEET UP THERE AT SAN MIGUEL.

SO ONE THING I KNOW THAT DID COME UP, UM, DURING THE, THE TAC REVIEW, A QUESTION CAME UP WAS, AND SIMILAR TO SOME QUESTIONS YOU'VE ASKED IN THE PAST ABOUT SYNCHRONOUS CONDENSERS.

OKAY, WELL IF YOU'RE DOING THIS PROJECT, DO YOU ALSO NEED THE OTHER PROJECT? AND OUR TEAMS BELIEVE YES, YOU NEED BOTH, PLUS SOME ADDITIONAL ONES, WHICH WE'VE SEEN IN PHASE THREE, SOME PROJECTS THAT WE'VE IDENTIFIED IN OUR 2023 REGIONAL TRANSMISSION PLAN.

AND AS WE CONTINUE TO SEE THE INCREDIBLE GROWTH ON THE SYSTEM AND THE CHANGING RESOURCE MIX, YOU MAY SEE ADDITIONAL PROJECTS AS WELL AS WE KEEP EVOLVING, UM, TO MEET THE DEMANDS OF THE STATE.

IS AGENDA ITEM NUMBER SIX, RECOMMENDATION REGARDING MARKET PRICE CORRECTIONS.

ANY OTHER QUESTIONS OR COMMENTS ON THIS? OKAY, IF THERE'S NO OTHER FURTHER COMMENTS, I'LL WANNA ENTERTAIN A MOTION TO RECOMMEND THAT THE BOARD ONE ENDORSE THE SAN ANTONIO SOUTH RELIABILITY PHASE TWO RPG PROJECT BASED ON ERCOT RELIABILITY PLANNING CRITERIA, AND DESIGNATE THE PROJECT AS CRITICAL TO THE RELIABILITY OF THE ERCOT SYSTEM PURSUANT TO PUCT SUBSTANTIVE RULE 25.101 B 3D.

IS THERE A MOTION TO APPROVE CARLOS JULIE? SECOND.

ALL IN FAVOR? AYE.

AYE.

OKAY, THANK YOU CHRISTIE.

[6.1 Incorrect Line, Series Device, and Transformer Ratings Impacting the Real-Time and Day-Ahead Markets]

THERE ARE TWO SUB ITEMS THAT ARE VOTING ITEMS ON COMMITTEE RECOMMENDATIONS TO THE BOARD AND WOODY RICKSON WILL PRESENT ERCOT STAFF'S RECOMMENDATION.

FIRST IS AGENDA ITEM 6.1, INCORRECT LINE SERIES DEVICE AND TRANSFORMER RATINGS IMPACTING THE REAL TIME AND DAY AHEAD MARKETS.

WITH THAT WOODY, YOU CAN PROCEED.

ALRIGHT, I'M STAND IT IN FOR CANNOT.

[01:40:01]

SO, UM, SO THIS IS A REQUEST TO HAVE THIS APPROVED.

SO IN JANUARY OF THIS YEAR, WE BECAME OF AN, WE BECAME AWARE OF AN ISSUE WHERE THE RATINGS FROM THE MODELS WERE NOT GETTING UPDATED IN THE SYSTEM.

SO THE SYSTEM WASN'T ACCEPTING THE NEW MODEL RATINGS.

SO THAT'S BASICALLY THE PROBLEM THAT WE BECAME AWARE OF THAT ON JANUARY 29TH.

ON JANUARY 30TH, WE IMPLEMENTED A FIX TO ENSURE THE CORRECT STATIC RATINGS FOR THE TRANSMISSION LINES WERE ALL PUT IN PLACE.

UH, MARKET NOTICE WAS PUT OUT ON, ON FEBRUARY 5TH, WE WERE GONNA DO AN IMPACT ANALYSIS.

THE IMPACT ANALYSIS CAME OUT ON, ON MARCH 12TH.

SO, UH, WE DETERMINED THERE WERE THREE OPERATING DAYS THAT MET THE CRITERIA FOR A, UH, FOR A, FOR THE BOARD TO APPROVE THE, THE REPRICING.

THOSE ARE THE THREE DAYS, THE 15TH, THE 17TH, AND THE 19TH.

THERE'S SOME DETAILS AROUND THOSE IF YOU WANT ME TO COVER THOSE.

THIS IS JUST TALKING ABOUT THE, THE IMPACT, THE OVERALL IMPACT.

ACTUALLY SLIDE FIVE TALKS ABOUT THE, THE MOST, THE, THE BIGGEST IMPACT TO A SINGLE CUSTOMER.

THIS WAS THE OVERALL IMPACT.

WHEN YOU LOOK AT THE OVERALL IMPACT, UM, THERE WAS ALSO A DAY AHEAD MARKET.

UH, THEY DETERMINED THERE WERE WERE DAYS THERE THAT HAD TO BE, UH, ALSO MET THE CRITERIA FOR THE DAY AHEAD MARKET.

AND ONCE AGAIN, THIS WAS, UH, THIS IS THE SINGLE BIGGEST IMPACT AND THEN ALSO THE OVERALL IMPACT.

SO THAT PROBLEM WAS ROOTED IN THE NEW EMS THAT WAS INSTALLED IN IN IN NOVEMBER.

THE PROBLEM HAS BEEN FIXED.

THE MODELS THAT IT WAS CONSUMING WE'RE OKAY.

WE WERE ABLE TO FIX THE, UH, FIX THE ISSUE AND EVERYTHING'S WORKING FINE NOW.

SO ANY, ANY QUESTIONS ABOUT THIS ONE? IF THERE'S NO QUESTIONS, THEN I WILL, UM, MAKE A MOTION TO APPROVE ITEM 6.1.

SO I GET A MOTION TO APPROVE.

[6.2 Incorrect Constraint Data for GTCs impacting Real-Time Market]

SUB SUB ITEM HERE IS AGENDA ITEM 6.2, THE INCORRECT CONSTRAINT DATA FOR GTCS IMPACTING REAL TIME MARKET.

SEE IF I CAN GET THERE.

IF I KEEP FORWARDING, WILL I GET THERE? OKAY, SO HERE'S 6.2.

SO THIS ONE, UM, ON FEBRUARY 28TH DURING SOME ROUTINE MAINTENANCE, THE PROCESS, OKAY, SO WE HAVE A, WE HAVE AN MMS SYSTEM, A MARKET MANAGEMENT SYSTEM, AND A ENERGY MANAGEMENT SYSTEM.

AND THEY PASS CONSTRAINTS BETWEEN THE TWO.

SO ONE OF THE CONSTRAINTS THAT GETS PASSED THROUGH WAS DELETED WITH A DOWNSTREAM PRODUCTION CHANGE.

AND SO IT DIDN'T SHOW UP ON THE, ON THE, IN THE ENERGY MANAGEMENT SYSTEM, WHICH IS THE ROOT CAUSE OF, OF, OF THIS PROBLEM.

SO ON MARCH 1ST WE ISSUED A NOTICE SAYING WE'RE GONNA DO THE IMPACT ANALYSIS, AND THEN ON MARCH 18TH, WE NOTIFIED THE MARKET THAT THE IMPACT RESULTS AND ERCOT NEEDED TO, UH, TO SEEK BOARD REVIEW.

SO, UH, THERE WERE SEVEN COUNTERPARTIES AFFECTED.

THE OVERALL, THE THE LARGEST IMPACT WAS, WAS 455,000.

THE OVERALL IMPACT WAS 277,000.

AND THIS IS WHAT WE'RE ASKING YOU TO, UH, APPROVE.

UM, I WOULD JUST SAY THAT THE, THE, THE DOWNSTREAM PRODUCTION CHANGE, SO WE HAVE A MODELING PROCESS WHERE ALL THE DIFFERENT TSPS AND ALL THE DIFFERENT RESOURCE OWNERS PROVIDE US DATA AND THE PROTOCOLS HAVE A 90 DAY TIMELINE THERE WHERE THOSE COME IN 90 DAYS AHEAD OF TIME.

THEY GO THROUGH A COMPLETE PROCESS OF, OF VALIDATION.

WE BUILD MODELS AHEAD OF TIME, WE TEST THE MODELS, ALL THAT STUFF GETS DONE.

HOWEVER, WE RECOGNIZED EARLY ON AFTER NODAL IMPLEMENTATION THAT WE NEEDED ANOTHER PROCESS FOR LAST MINUTE CHANGES THAT HAPPENED.

SO MAYBE SOMEONE DOES A SURVEY ON A LINE AND THE RATING NEEDS TO BE CHANGED AT THE VERY LAST MINUTE.

SO WE NEEDED SOMETHING WE COULD DO.

AND THAT'S THIS DOWNSTREAM PRODUCTION CHANGE.

SO WE TRY TO MINIMIZE THE NUMBER OF DOWNSTREAM PRODUCTION CHANGES THAT WE DO.

WE MONITOR THAT, WE WATCH IT, WE TRY TO MAKE SURE THAT THAT IS A, BECAUSE THAT'S A RISKY, A MORE RISKY WAY OF, OF MAKING SYSTEM CHANGES BECAUSE YOU DON'T HAVE THE TIME TO PUT 'EM IN MODELS AND VALIDATE THE MODELS AND DO ALL THAT AHEAD OF TIME.

THIS IS WHAT HAPPENED IN THIS CASE IS ONE OF THOSE SLIPPED THROUGH AND WE MADE A MISTAKE.

AND SO THAT'S WHAT CAUSED THIS ONE.

AND UH, LIKE I SAID,

[01:45:01]

WE TRY TO MINIMIZE THESE AND WE HAVE PROCESSES AROUND THIS AND WE'LL LOOK AT THIS WITH, WITH ADAM AND HIS TEAM AND, UH, THE, THE IMPROVEMENT PROCESSES THAT WERE PUT IN PLACE TO TRY TO IMPROVE THAT.

BUT, UH, THAT'S, THAT WAS THE ISSUE HERE.

HOW OFTEN ARE CHANGES LIKE THAT MADE WOODY WHERE YOU GUESS IT SOUNDED LIKE THERE'S A CHANGE MADE TO A PRODUCTION SYSTEM? YES.

UM, I DON'T KNOW IF JP HAS NUMBERS THERE OR NOT, BUT FOR ON A WEEKLY DATABASE LOAD THERE MIGHT BE SEVEN OR EIGHT A WEEKLY DATABASE LOAD WHERE WE HAVE TO MAKE A, A PRODUCTION CHANGE IN, IN THE SYSTEM, SOMETHING LIKE THAT.

IS THAT BALLPARK? THERE'RE YEAH, IT'S NOT, I MEAN WE'RE MAKING HUNDREDS OF HUNDREDS OF CHANGES EVERY MODEL LOAD.

SO MOST OF 'EM ARE GOING THROUGH THE VALIDATION PROCESS, BUT IT'S THE FEW THAT COME IN THE LAST YEAH, I WORRIED ABOUT THE OTHERS.

RIGHT.

ONES THAT DON'T HAVE THE, YOU KNOW, THE SAME ROBUST CONTROLS AND IT, AND IT VARIES.

I MEAN, SOME MODELS YOU'LL HAVE MORE, SOME YOU'LL HAVE LESS.

UM, BUT UH, SHOULD WE BE TRACKING HOW MANY DOWNSTREAM CHANGES WE MAKE? BECAUSE THOSE ARE CLEARLY VULNERABLE TO ERROR IF YOU'RE NOT TESTING.

SO OVER TIME WE HAVE SEEN THAT THE NUMBER OF DPCS HAVE INCREASED AND WE DO NEED TO PUT SOME KIND OF CONSTRAINT AROUND IS THIS TRULY A DPC OR NOT? RIGHT? THAT PUSHBACK, BECAUSE WE DO DO MODEL LOADS EVERY WEEK, SO IT CAN IT WAIT FOR THREE, FOUR DAYS MORE, RIGHT.

FOR THE NORMAL PROCESS.

SO I, I WOULD ENCOURAGE YOU GET A HANDLE ON THAT.

AND THIS ONE IN PARTICULAR WAS AVOIDABLE, OBVIOUSLY.

YES.

YEAH, WE DO TRACK THAT.

WE DO TRACK THAT AND LIKE WE CAN SHOW YOU THE TREND LINE OVER MULTIPLE YEARS ON, ON WHERE IT'S GONE.

SO WE HAVE ALL THOSE NUMBERS AND WE PUSH BACK.

UM, BUT THERE ARE THINGS THAT, UH, THERE'S, THEY HAVE TO BE MADE IN PRODUCTION.

SO SOMEONE DOES A SURVEY, FOR EXAMPLE, ON A LINE THAT'S RATED AT A THOUSAND MVA A AND THEY COME BACK AND THEY SAY, THAT LINE IS ACTUALLY NOT A THOUSAND MVA A IT'S 900.

THAT'S A REAL TIME THING THAT WE HAVE TO TAKE INTO ACCOUNT.

AND SO THAT GETS PUT INTO A DPC AND WE IMMEDIATELY MAKE THAT CHANGE AND THEN THE NEXT MODEL LOAD COMES OUT AND IT'S, IT'S 900.

SO THERE ARE TIMES WHEN YOU HAVE TO DO IT.

YEAH, I UNDERSTAND.

BUT THIS ONE DROPPED A HANDSHAKE ON A CONSTRAINT THAT SHOULD HAVE BEEN HANDED OFF, WHICH IS A LITTLE DIFFERENT THAN JUST A PARAMETER CHANGE, RIGHT? YEAH.

WHAT SHOULD I HAVE BEEN A DISABLED CAME UP AS A DELETE AND THAT'S THE, THE MAIN ISSUE.

AND I THINK WOODY, UH, WE HAVE ALSO SEEN, UH, AN, AN INCREASE IN THE NUMBER OF DPCS OVER THE, THE YEAR.

SO THAT IS SOMETHING THAT, YOU KNOW, WE ARE TRYING TO, UH, PAY ATTENTION TO AS WELL.

I THINK IT'D BE HELPFUL, WOODY, IN A UPCOMING MEETING JUST TO SHOW HOW WE TRACK IT AND HOW WE CONTROL IT.

JUST IT GIVES US LEVEL OF ASSURANCE.

I THINK CHRISTIE CAN PUT THAT IN HER, UH, MODELING UPDATE NEXT TIME WE CAN PUT SOME NUMBERS OUT THERE AND SHOW THAT.

ANY OTHER QUESTIONS OR COMMENTS ON THIS ONE? SO I HAVE NO FURTHER COMMENTS.

I WANNA OBTAIN A MOTION ON AGENDA ITEM 6.2 INCORRECT CONSTRAINT DATA FOR GTCS IMPACTING REALTIME MARKET.

SO MOTION TO APPROVE.

TRULY RE APPROVE.

SECOND CARLA SECONDS.

ALL IN FAVOR? AYE.

I'LL VOTE FOR COURTNEY.

AYE TO CONSIDER IT APPROVED.

SO I, I WAS TOLD THAT MR. CHAIRMAN, THAT RAVI'S GONNA BE GIVING US AN UPDATE ABOUT THE QUALITY SYSTEM HERE AT ERCOT IN JUNE, AND I WOULD LIKE HIM TO ADDRESS WHAT'S COMING BEFORE OUR NAME COMMITTEE FOR CORRECTION AND APPROVAL.

'CAUSE THESE ARE SOME REAL LIFE EXAMPLES THAT YEAH.

WOULD LIKE TO SEE ADDRESSED.

SO IT'S TWO 18.

I SAY WE TAKE A MERCY BREAK TO GO TO TWO 30, YOU KNOW, REENERGIZE.

SO TAKE A 10 MINUTE BREAK, BE BACK AT TWO.

WELL, YOU, YOU CAN'T GO, COURTNEY, YOU JUST TOOK YOURS.

I'LL SIT HERE ALONE.

? YES, ONE.

[7. Independent Market Monitor (IMM) Report ]

ALL RIGHT.

THIS IS BOB FLEXON, UH, R AND M COMMITTEE CHAIR.

THE R AND M COMMITTEE MEETING IS HEREBY RECONVENE.

WE'LL NOW TAKE UP AGENDA ITEM SEVEN, INDEPENDENT MARKET MONITOR REPORT.

JEFF MCDONALD IS THE NEW DIRECTOR OF THE IMM FOR ERCOT WILL PRESENT.

AND JEFF, WELCOME TO THE ERCOT REGION AND PLEASE PROCEED WHEN READY.

GOOD AFTERNOON EVERYONE.

THANKS FOR THE OPPORTUNITY TO, UH, ADDRESS THE COMMITTEE.

UH, MY NAME'S JEFF MCDONALD.

I AM THE DIRECTOR OF, UH, IMM FOR ERCOT.

I'M THE NEW DIRECTOR AS POINTED OUT.

SO I'VE BEEN HERE FOR ABOUT SIX WEEKS, UM, PREVIOUS AND I'LL JUST GIVE A VERY BRIEF INTRODUCTION AND THEN MOVE ON TO A LITTLE, LITTLE BIT OF AN UPDATE.

UH, PREVIOUS TO ERCOT, I WAS HEAD OF MARKET MONITORING AT ISA NEW ENGLAND FOR ABOUT EIGHT YEARS.

AND PRIOR TO THAT I WORKED IN MARKET MONITORING AT CAL ISO FOR 14 YEARS.

SO, SO I'M VERY HAPPY TO

[01:50:01]

BE HERE.

UH, AND LEARNING A LITTLE BIT MORE ABOUT TEXAS SINCE I'VE BEEN HERE AND LEARNING A LITTLE BIT MORE ABOUT, UM, THE ERCOT UH, WHOLESALE ELECTRICITY GRID.

SO, UM, I DIDN'T PREPARE ANY SLIDES THIS TIME.

I THOUGHT PERHAPS I COULD GET AWAY WITH THAT ON MY FIRST, UH, REPORT, BUT WE, WE WILL, UH, WE'LL HAVE A LITTLE BIT MORE MATERIAL FOR SOME REASON THAT FEELS WELCOMED.

OKAY, GOOD.

THAT'S GOOD TO KNOW.

UM, YEAH, AND, AND WE SHOULD PROBABLY TALK ABOUT WHAT YOU'D LIKE TO SEE, UH, AS A GROUP GOING FORWARD.

'CAUSE I'M HAPPY TO, TO GEAR, UH, MATERIAL TOWARDS THAT.

SO I'LL JUST GIVE YOU A, A, A BRIEF UPDATE.

AND IN THE, IN THE FIVE OR SIX WEEKS THAT I'VE BEEN HERE, WE'VE BEEN VERY FOCUSED ON JUST A, A SMALL NUMBER OF, I, I THINK HIGH VALUE ITEMS. UH, THE FIRST ONE IS ECRS.

SO THE, UH, THE IMM TEAM HAS SPENT CONSIDERABLE TIME WORKING THROUGH ECRS, UH, RULE CHANGE ISSUES.

WE'VE HAD A FANTASTIC TIME WORKING WITH BOTH THE PUC AND ERCOT STAFF ON THAT.

UH, EVERYONE'S BEEN VERY COLLABORATIVE, UM, FANTASTIC DISCUSSIONS IN MY VIEW.

AND, YOU KNOW, I THINK TO THE EXTENT OUR POSITION HAS BEEN FORWARDED, UH, TO YOUR LEVEL, WE ARE, WE ARE IN STEP WITH, WITH WHERE CRATS GOING, UH, DIRECTIONALLY AND ORDER MAGNITUDE AND UNDERSTAND THAT, THAT THERE ARE A NUMBER OF STEPS REQUIRED TO MAYBE GET TO A MORE OPTIMAL SOLUTION.

AND THEN AS WE GET CLOSER TO THE OPTIMAL SOLUTION, WE'LL ALSO BE TALKING ABOUT, UH, CO-OP OPTIMIZATION, WHICH IS, WHICH IS THE END GAME FOR, FOR RESERVES AND ENERGY, UM, IN REAL TIME ANYWAY, SO, SO WE FEEL THAT THAT THINGS ARE ON THE RIGHT DIRECTION HERE WITH RESPECT TO ECRS.

UM, WE'VE ALSO BEEN SPENDING CONSIDERABLE TIME ON THE ANCILLARY SERVICES STUDY.

SO IMM IS DOING AN ANCILLARY SERVICES STUDY.

ERCOT IS ALSO DOING AN ANCILLARY SERVICES STUDY.

AND AGAIN, IN THIS PARTICULAR SPACE, TO THE EXTENT I'VE BEEN INVOLVED IN THOSE CONVERSATIONS, I'VE SEEN FANTASTIC COOPERATION BETWEEN PEC STAFF, ERCOT STAFF, AND IMM STAFF.

SO BOTH, BOTH OF THOSE EFFORTS HAVE BEEN, UM, FANTASTIC TO WATCH, UH, EVERYONE COME TOGETHER AND TRY AND MOVE FORWARD.

SO THAT'S BEEN GREAT.

UH, BEYOND THAT WE'VE BEEN GEARING UP FOR, UH, MORE EFFORT IN THE PERFORMANCE CREDIT MECHANISM SPACE.

SO THERE ARE STUDIES, UH, REQUIRED, UH, IN THAT SPACE.

SO WE'RE GEARING UP FOR THAT.

UM, AND THEN THE BIG EFFORT THAT MY TEAM HAS BEEN WORKING ON FOR THE LAST TWO MONTHS IS, UM, PREPARING OUR STAY OF THE MARKET REPORT, WHICH WE'LL FORWARD TO, UH, THE PC STAFF FOR REVIEW ON MAY 1ST.

SO THAT'S COMING ALONG.

THIS IS MY, I THINK MY 20TH OR 21ST ANNUAL OR STATE OF THE MARKET REPORT FROM A MARKET MONITOR.

THEY'RE ALL THE SAME AT THE END.

THE LAST COUPLE WEEKS ARE A BIG PUSH.

WE'RE IN A GOOD POSITION TO GET A GOOD REPORT TO THE PEC STAFF FOR REVIEW, UH, ON MAY 1ST.

BEYOND THAT, THERE ARE SMALLER, I SAY SMALLER, UM, LESS PRESSING MARKET RULE CHANGES THAT WE'VE BEEN ENGAGED OR SEMI ENGAGED IN.

UH, AND BEYOND THAT, THAT'S, I WOULD SAY THAT'S, THAT COMPRISES ABOUT 90, 95% OF THE EFFORT THAT I'VE SEEN OR BEEN ENGAGED IN, UH, IN THE FIVE WEEKS I'VE BEEN HERE.

GREAT.

ANY QUESTIONS FOR JEFF? WELL GOOD.

THEY'RE ALL THE RIGHT TOPICS AND AGAIN, WELCOME.

WE LOOK FORWARD TO WORKING WITH YOU AND IT'S GOOD TO HEAR THAT YOU'RE SEEING VERY GOOD COOPERATION AMONGST ALL THE VARIOUS GROUPS.

SO WE'LL LOOK FORWARD TO FUTURE REPORTS.

GREAT, THANK YOU VERY MUCH.

SO, AND I'LL TAKE UP AGENDA ITEM NUMBER EIGHT, THE COMMITTEE BRIEFS AND CHRISTIE HOBBS PRESENTATION OF THE SYSTEM PLANNING AND WEATHERIZATION UPDATE AGENDA ITEM 8.1, WHICH I'VE NOTED TO INCLUDE AN UPDATE ON RELIABILITY STANDARD STUDY RESULTS.

[8.1 System Planning and Weatherization Update ]

CHRISTIE, VERY GOOD.

SO WHAT AN EXCITING TIME, UH, TO BE A PART OF THE SYSTEM PLANNING GROUP.

UH, WE'VE GOT A LOT OF IMPORTANT EVENTS, UH, STUDIES, EFFORTS THAT WE'RE WORKING ON ALL TRYING TO EVOLVE THE PLANNING PROCESS AND SO IT'S BEEN A REAL JOY TO WORK ON IT.

UM, SO AS YOU CAN SEE HERE FROM THE KEY TAKEAWAYS, I'VE GOT A NUMBER OF SLIDES BECAUSE I WANNA MAKE SURE WE'RE KEEPING YOU UP TO DATE ON ALL THE IMPORTANT WORK THAT THE TEAMS ARE DOING.

FIRST SLIDE IS REALLY JUST A CLOSE OUT, UH, THE WINTER WEATHERIZATION UPDATE.

WHEN WE MET LAST, WE WERE NEARING THE END OF THE WINTER INSPECTION SEASON.

WE COMPLETED 340 GENERATION RESOURCE AND 129 TSP WINTER WEATHERIZATION INSPECTIONS.

THAT BRINGS OUR TOTAL, UH, SINCE PROGRAM INCEPTION OVER 2000, WHICH IS EXCEEDING THE GOALS WE HAD SET FOR OURSELF.

JUST AS A REMINDER, UH, WHAT THE PUC RULE REQUIRES US TO DO IS TO DO 10% OF THE TRANSMISSION SERVICE PROVIDER SWITCHYARDS AND SUBSTATIONS IN A THREE YEAR PERIOD, AS WELL AS TO DO ALL OF THE GENERATION RESOURCES IN THAT THREE YEAR PERIOD.

WHAT WE'VE SEEN, UH, SINCE PROGRAM INCEPTION, WE'RE

[01:55:01]

STARTING TO PUT TOGETHER SOME STATS, UH, THAT WE'LL BE ABLE TO SHARE WITH YOU, UH, IN FUTURE MEETINGS.

BUT WE'RE REALLY STARTING TO SEE THAT THE NON IRR FOREST OUTAGE LEVELS HAVE REALLY IMPROVED SINCE THE STANDARD'S BEEN IN PLACE.

AND THAT'S NOT JUST BECAUSE YOU MIGHT SAY WE'VE HAD MILDER WEATHER, WE'VE HAD SEVERAL STORMS, UM, 2022 AS AND AS RECENT AS WINTER STORM HEATHER IN JANUARY WHERE WE SAW IMPROVED PERFORMANCE, UM, FROM THE DISPATCHABLE FLEET.

WE'VE NOW SHIFTED GEARS.

WE'RE PREPARING FOR OUR SUMMER INSPECTIONS.

WE'VE GOT A GOAL TO COMPLETE, UH, OVER 600 DURING THE SUMMER TIMEFRAME.

WE'VE GOT A WORKSHOP SCHEDULED AT THE END OF THE WEEK WHERE WE BRING IN THE TRANSMISSION SERVICE PROVIDERS AND GENERATION RESOURCES TO TALK ABOUT BEST PRACTICES AND STANDARDS.

WE'RE ALSO ROLLING OUT A NEW TOOL THAT'LL IMPROVE THE COMMUNICATION BETWEEN OR CAUGHT IN THE MARKET PARTICIPANTS AND OUR INSPECTION TEAMS WHERE WE CAN SHARE INFORMATION THROUGH THAT PORTAL AFTER WE LEAVE AN INSPECTION, GIVING THEM, UH, BEST PRACTICES INFORMATION OR IF THERE'S THINGS THAT THEY NEED TO CURE, UH, SO THAT THEY DON'T GET FINED.

THE TEAM HAS ALSO BEEN BUSY.

WE'VE HAD TWO MORE OF OUR INSPECTORS COMPLETE THEIR CERTIFIED WEATHER INSPECTION PROGRAM, WHICH BRINGS US TO A TOTAL OF SEVEN OF OUR FTES THAT HAVE COMPLETED THAT, THAT'S REALLY HELPED THEM GET A BROADER PERSPECTIVE AS THEY'RE MEETING WITH DIFFERENT TYPES OF GENERATION RESOURCES, UH, ON, ON THE SYSTEM.

LOOKING OVER AT THE TRANSMISSION PLANNING SPACE, WE'VE GOT A NUMBER OF STUDIES UNDERWAY.

THE FIRST ONE I WANNA SHARE WITH YOU IS THE PERMIAN BASIN STUDY PER HB 50 66.

IN THE LAST LEGISLATIVE, UH, SESSION, THE PUBLIC UTILITY COMMISSION DIRECTED US TO COMPLETE A RELIABILITY STUDY PLAN FOR THE PERMIAN BASIN AREA.

WE'VE GOT TO HAVE THAT PLAN COMPLETE NO LATER THAN JULY.

WE RECEIVED, UH, THE LOAD INFORMATION FROM THE TSPS, UH, IN, UP INTO THE FEBRUARY TIMEFRAME, WHICH LEFT US A SHORT WINDOW FOR COMPLETING A LOT OF WORK.

SO KUDOS TO THE TEAM THEY'VE BEEN PUTTING IN A LOT OF TIME BECAUSE AS YOU CAN SEE FROM THESE NUMBERS, THERE'S QUITE A BIT OF LOAD THAT WE'RE LOOKING AT TO BUILD OUT THAT REGION.

WE'VE GOT A LOAD FORECAST FOR 2030, NEARLY 24,000 MEGAWATTS.

SO JUST TO PUT THAT INTO PERSPECTIVE, WHAT WE STUDIED LAST YEAR IN 2023 IN OUR REGIONAL ANNUAL PLAN FOR LOOKING AT THE COAST REGION.

SO THINK ABOUT THE GALVESTON AREA, OR EXCUSE ME, THE CORPUS AREA WHERE WE HAVE A LOT OF INDUSTRIAL GROWTH.

THAT WAS JUST ABOUT 30 GIGAWATTS AND THE DALLAS AREA, 32 GIGAWATTS.

SO WE'RE SEEING INCREDIBLE GROWTH IN THE PERMIAN AREA.

ABOUT HALF OF THAT IS COMING FROM OIL AND GAS GROWTH, JUST ABOUT 12,000 MEGAWATTS AND AN ADDITIONAL 12,000 MEGAWATTS THAT'S COMING FROM ADDITIONAL LOAD.

YOU'VE GOT TWO GRAPHS HERE THAT SHOW THE BREAKOUT OF THAT LOAD.

UM, WHAT WE'RE SEEING IS ABOUT 22% IS COMING FROM GREEN HYDROGEN, 12% COMMERCIAL INDUSTRIAL 8% DATA CENTER AND 58% CRYPTO MINING LOAD WE'RE ALSO REQUIRED BY THE NEW HB 50 66 TO NOT ONLY TAKE IN LOAD THAT HAS A SIGNED INTERCONNECTION AGREEMENT, BUT THAT WHAT THE TS PS BELIEVE IS REASONABLE.

YOU CAN LOOK AND SEE WE'VE GOT ABOUT 38% THAT IS CONFIRMED BY CONTRACT.

SO THEY'VE GOT A SIGNED INTERCONNECTION AGREEMENT.

8% OF IT IS UNCONFIRMED, BUT 54% OF IT IS CONFIRMED BY TSP OFFICER LETTER.

OUR EARLY INDICATIONS IN OUR STUDIES IS THAT WE'RE GOING TO NEED SUBSTANTIAL AMOUNTS OF TRANSMISSION TO BE ABLE TO SUPPORT THAT TYPE OF LOAD GROWTH.

NOT ONLY IS THE LOAD GROWTH INCREDIBLE, BUT IT'S FAR WEST TEXAS WHERE WE DON'T HAVE CURRENTLY AS MUCH TRANSMISSION BUILD OUT AS WE DO AS YOU MOVE CLOSER INTO THE CENTRAL PART OF THE STATE.

JUST SOME QUICK STATS FOR YOU, AND THIS IS JUST FOR THE PERMIAN REGION.

THIS IS NOT MOVING POWER TO THE PERMIAN REGION.

'CAUSE CURRENTLY RIGHT NOW THERE'S NOT A LOT OF GENERATION LOCATED WITHIN THE REGION.

WE'RE ESTIMATING ABOUT 300 IN, OR EXCUSE ME, 565 MILES OF NEW 3 45 UPGRADES TO OVER 300 MILES OF EXISTING 3 45 IN THE REGION AND 344 MILES OF NEW 1 38.

THIS DOESN'T TAKE INTO ACCOUNT THE UPGRADES IN THE LOWER DISTRIBUTION SYSTEM, WHICH THE TSPS ARE WORKING ON CONCURRENTLY WITH US.

OUR NEXT STEPS, WE'RE CURRENTLY LOOKING AT

[02:00:01]

BUILDING IMPORT PATHS INTO THE REGION.

WE EXPECT WE'LL NEED A NUMBER OF 3 45 KV LINES TO MOVE FROM POWER FROM THE EAST OF THE STATE TO THE WEST TO BE ABLE TO SUPPORT THIS LOAD GROWTH.

ALL RIGHT, KEEPING WITH THAT THEME OF EVOLVING AN INCREDIBLE LOAD GROWTH, WANTED TO GIVE YOU SOME UPDATES ON WHAT WE'RE STARTING TO SEE FOR OUR 2024 REGIONAL TRANSMISSION PLAN.

JUST A REMINDER, THIS IS AN ANNUAL PLAN THAT WE DO THAT LOOKS SIX YEARS IN ADVANCE.

SO WE'RE STUDYING YEARS OUT INTO 2030.

WE'VE SEEN RULE CHANGES AT THE COMMISSION IN THE LAST COUPLE OF YEARS ABOUT WHAT LOAD WE SHOULD INCLUDE IN OUR PLANS AS WELL AS HB 56 ALSO REQUIRING US TO CONSIDER LOAD THAT DOES NOT HAVE A SIGNED INTERCONNECTION AGREEMENT.

SO COMPARED TO OUR HISTORICAL ANNUAL REGIONAL TRANSMISSION PLANS, WE'RE SEEING AGAIN, SUBSTANTIAL LOAD GROWTH.

FOR EXAMPLE, IN 2030, LOAD IS FORECASTED TO BE 152 GIGAWATTS COMPARED TO, AND THEN IN 2029, WHICH WAS THE YEAR JUST PRIOR A HUNDRED AND ALMOST 147 GIGAWATTS.

THAT'S COMPARED TO 111 THAT WE STUDIED IN OUR LAST REGIONAL TRANSMISSION PLAN.

SO WE ARE HAVING, UM, AND AS YOU CAN SEE BY THE RED LINE, THAT'S DEMONSTRATED BASED OFF OF OUR CURRENT PLANNING GUIDES AND PROTOCOLS, WHAT GENERATION WE CAN USE IN OUR PLANS TO SOLVE THOSE CASES.

WE ONLY HAVE ABOUT 119 GIGAWATTS PER THOSE CURRENT RULES OF GENERATION THAT WE CAN USE TO SOLVE THOSE CASES.

SO WE'RE HAVING TO WORK WITH STAKEHOLDERS.

UM, WE'RE REVIEWING POTENTIAL SOLUTIONS FOR THE GENERATION IMBALANCE.

WE KNOW THERE'S A GREAT OPPORTUNITY FOR, FOR, UM, GENERATION GROWTH IN THE SYSTEM TO MEET THE DEMANDS THAT WE'RE SEEING.

UM, SO WE'RE LOOKING AT WAYS THAT MIGHT NOT BE CURRENTLY DEFINED IN OUR REQUIREMENTS.

WE'RE TRYING TO EVOLVE THE PROCESS BECAUSE TO GET A GOOD TRANSMISSION PLAN, WE HAVE TO BE ABLE TO BALANCE GENERATION AND LOAD.

AS YOU CAN SEE, YOU KNOW, WITH THE TRANSMISSION PIECE OF IT.

WHAT ARE WE SEEING FOR NEW RESOURCE DEVELOPMENT? WITH THE CURRENT GENERATION QUEUE, WE CONTINUE TO SEE ABOUT 85% OF THAT IS COMING FROM SOLAR AND BATTERIES.

UH, WE'RE STARTING TO SEE A LITTLE BIT OF AN INCREASE, UM, IN NATURAL GAS, BUT AGAIN, THE QUEUE CONTINUES TO BE DOMINATED BY THOSE SOLAR AND BATTERY TYPE DEVELOPMENTS.

WE ALSO CONTINUE TO SEE A LARGE LOAD, UH, INTEGRATION INCREASING.

UM, AS YOU CAN SEE BY THIS TOP GRAPH, IT SHOWS A TREND OF LARGE LOADS.

SO LARGE LOADS WOULD BE THINGS OVER 75 MEGAWATTS.

THEY'VE HAD TO GO THROUGH A PROCESS THAT WE ESTABLISHED IN THE BEGINNING OF JANUARY OF 2022.

AND SINCE THEN, THESE ARE THE LOADS THAT HAVE BEEN STUDIED AND BEEN APPROVED TO ENERGIZE, WHICH IS, UM, JUST UNDER 4,500 MEGAWATTS OF THOSE.

WHAT WE HAVE OBSERVED BY THE INFORMATION THAT WE DO HAVE AVAILABLE, UM, ABOUT 2,800 IS OPERATIONAL, WHICH MEANS AN ADDITIONAL 1,635, UH, COULD ENERGIZE AT ANY TIME WITHOUT ADDITIONAL APPROVAL BECAUSE THEY'VE ALREADY BEEN THROUGH THE STUDY PROCESS.

WE CONTINUE TO SEE, UH, THE INCREASE.

IF YOU, IF YOU DROVE INTO THE MEETING TODAY, YOU'VE PROBABLY SEEN THE GROWTH JUST IN THIS AREA, BUT THAT'S HAPPENING ALL ACROSS THE STATE.

UM, AND THEY'RE NOT YOUR TRADITIONAL LOADS THEY'RE ONLY BRINGING A FEW MEGAWATTS.

UM, BUILDINGS ARE BEING BUILT AND CONSUMING MANY HUNDREDS OF MEGAWATTS, UH, OF POWER.

SO WE CONTINUE TO WORK, UH, WITH A LARGE LOAD TASK FORCE.

WE HAD A SET OF REVISION REQUESTS THAT WE PUT IN THE PROCESS TO TRY TO FORMALIZE OUR PROCESSES, TRY TO FORMALIZE, UM, VOLTAGE RIDE THROUGH TYPE REQUIREMENTS, MUCH OF LIKE THE SUM OF THE SAME CONVERSATIONS THAT WE HAD EARLIER TODAY.

UH, WE CONTINUE TO WORK WITH THEM TO HOPEFULLY BE ABLE TO BRING YOU A SET OF RULES, UM, TO FOCUS ON THE LARGE LOAD INTERCONNECTION ASPECT OF THE PUZZLE.

LAST BUT NOT LEAST, UH, AN UPDATE ON THE WORK THAT'S BEING DONE ON THE RELIABILITY STANDARD VALUE OF LOST LOADS AND THE, UH, COST OF NEW ENTRY STEADY UPDATES.

UH, EARLIER THIS MONTH, WE FILED OUR FINAL PHASE OF SIMULATIONS WITH THE PUBLIC UTILITY COMMISSION.

UM, THAT GAVE, UM, RESULTS BASED OFF OF OUR LAST CDR THAT ALSO NARROWED IN, UM, SOME OF THE LOSS OF LOAD EXPECTATION FREQUENCIES THAT WE USED AND PROVIDED A WHITE PAPER THAT REALLY TRIED TO WALK THROUGH ALL OF THE ANALYSIS THAT WE'VE DONE AND LAY OUT, UM, SOME OPTIONS FOR THE COMMISSION TO START THINKING ABOUT HOW

[02:05:01]

THEY MAY WORK THROUGH SETTING UP THE RELIABILITY STANDARD FRAMEWORK.

UM, THE OUTCOME OF THAT OPEN MEETING IS THERE IS GOING TO BE A TECHNICAL WORKSHOP AT THE COMMISSION ON MAY THE SECOND, THAT AFTERNOON, UH, WITH THE COMMISSIONERS, SO WE CAN DIG INTO THE DETAIL, THE TECHNICAL ANALYSIS TO HELP THEM SET UP TO BE ABLE TO OPEN UP A RULE.

UM, AND I THINK, CORRECT ME IF I'M WRONG, CHAIRMAN, UH, LEASON, BUT THE, THE GOAL THAT WAS COMMUNICATED AT THAT OPEN MEETING WAS TO TRY AND HAVE SOMETHING IN PLACE BY THE END OF THIS SUMMER.

THAT'S CORRECT, CHRISTIE.

SO, UM, STAY TUNED.

UM, I THINK WE'RE GONNA SEE NOW THAT ALL OF THE ANALYSIS HAS BEEN DONE, UM, REALLY START TO SEE MOVEMENT ON THE RULE, UH, FRAMEWORK EARLIER, UH, I GUESS IN MARCH AND ON APRIL 16TH WAS A FULL ROLLOUT OF THE SURVEY, THE CUSTOMER SURVEYS FOR THE VALUE OF LOST LOAD.

UM, THAT IS CURRENTLY OUT.

UM, WE ARE GETTING, UH, RESPONSES BACK FROM OUR VENDORS THAT WE ARE SEEING, UH, GOOD RESIDENTIAL AND SMALL COMMERCIAL RESPONSE.

UM, WE'VE ALSO PARTNERED WITH SOME NOE'S TO MAKE SURE WE HAVE A BALANCE FROM ACROSS THE STATE.

UM, AND THAT SURVEY WILL STAY OPEN UNTIL MAY THE 17TH.

AND LAST BUT NOT LEAST, UH, THE COST OF NEW ENTRY STUDY.

WE HAVE WORKED, UM, WITH OUR VENDOR TO HAVE, UM, TWO TECHNOLOGIES, UM, CHOSEN FOR THE STUDY.

UM, ONE IS AN AERO DERIVATIVE COMBUSTION TURBINE, AND THEN WE HAVE AN ALTERNATE TECHNOLOGY, WHICH IS LOOKING AT A HYBRID SOLARS AND STORAGE FACILITY.

UH, THEY'RE WORKING THROUGH, UM, A ANALYSIS RIGHT NOW TO DEVELOP THE COST ESTIMATES, UM, AND ASSOCIATED PARAMETERS FOR THE FINANCIAL MODELING.

WE ARE ON TRACK TO DELIVER A REPORT.

UM, WE HAD HOPED THAT IT'D BE OUT BY LATE APRIL.

THAT'S STILL THE GOAL, BUT IT LOOKING LIKE IT MAY SLIP IN THE FIRST FEW DAYS OF MAY.

UM, JUST, UH, TO MAKE SURE THAT WE ADDRESS ALL OF THE STAKEHOLDER COMMENTS THAT WE HAD IN THE PROCESS ALONG THE WAY.

AND THEN WE ARE ON TRACK TO HAVE OUR FINAL DELIVERABLE BY THE END OF MAY.

SO ALL OF THOSE THINGS, UM, COMING TOGETHER THIS SUMMER SHOULD PUT THE COMMISSION IN A, IN A GOOD POSITION TO BE ABLE TO, TO MOVE FORWARD ON ANY NEXT STEPS, UH, THAT THEY'D LIKE TO TAKE.

WITH THAT, UM, I'LL SEE IF YOU HAVE ANY QUESTIONS.

I WILL NOTE I HAD HISTORICALLY REVIEWED, UH, THE MORA.

I WILL, UH, GOING FORWARD, I'M GONNA INCLUDE THOSE IN THE APPENDIX FOR YOU UNLESS THERE'S SOMETHING, UM, THAT I THINK WE NEED TO PULL UP TO, TO HIGHLIGHT FOR YOUR ATTENTION BECAUSE MAYBE WE'RE SHOWING A HIGHER CHANCE OF, YOU KNOW, GOING INTO EMERGENCY CONDITIONS OR, OR LOAD SHED.

YES.

CARLOS, QUICK QUESTION ON THE WEATHER WEATHERIZATION.

NOW THAT YOU HAVE 2000 SO INSPECTIONS AND YOU HAD HEATHER TO CONTEND WITH, UH, ANY LESSONS LEARNED WITH RESPECT TO WHAT'S BEEN MORE EFFECTIVE IN THE CORRECTIONS THAT HAVE BEEN MADE, THE UPGRADES, UM, INSTRUMENTATION, FOR EXAMPLE, NOT FAILING OR THINGS OF THAT SORT SO THAT WE CAN ACTUALLY HAVE SORT OF CAUSE AND EFFECT THAT OF WHAT WE HAVE SORT OF MANDATED AND WHAT HAS PROTECTED THE SYSTEM? ABSOLUTELY.

SO, UH, I SEE DAVID, 'CAUSE I WAS GONNA COME UP AND, AND HELP SUPPORT ME ON THIS ONE.

WE ACTUALLY, UH, FILED ON THURSDAY A LETTER TO THE COMMISSION THAT KIND OF WENT THROUGH WHAT WE SAW THIS WINTER.

UM, AND SOME OF THE THINGS, THE FEEDBACK, THE INPUT THAT WE GOT.

SO WHEN WE HAD JUST LIKE, WE'RE GONNA HAVE A SUMMER INSPECTION WEATHERIZATION WORKSHOP GOING INTO SUMMER, WE HAD THAT BEFORE THE WINTER SEASON AS WELL.

AND WHAT WE SAW, WE HAD A COUPLE OF RESOURCES, GENERATION RESOURCES AND A LARGE TRANSMISSION SERVICE PROVIDER THAT ACTUALLY SHARED KIND OF BEST PRACTICES, WHICH CONCURRED WITH THINGS THAT WE'RE SEEING.

SO DAVID, MAYBE IF YOU COULD HELP ME AND GIVE A FEW HIGHLIGHTS OF THOSE.

YEAH, CERTAINLY.

UM, THE, THE BEST PRACTICES ARE, ARE FAIRLY WELL KNOWN AND IT'S A MATTER OF JUST APPLYING THEM APPROPRIATELY AND THEN MAINTAINING THEM THROUGHOUT THE WINTER SEASON.

I THINK PROBABLY THE SINGLE GREATEST REDUCTION THAT WE'VE SEEN IS IN INSTRUMENTATION FAILURES WHERE YOU HAVE SMALL TUBING THAT CAN GET WATER AND IT FREEZES EASILY IF IT'S NOT MAINTAINED, IT DOESN'T HAVE HEAT TRACING AND INSULATION ON IT.

THERE'S BEEN A LOT OF ATTENTION PUT INTO THAT TYPE OF EQUIPMENT AND, UH, WE'VE SEEN VERY FEW OF THOSE FAILURES RECENTLY.

I WHAT ABOUT SUMMER? WHAT'S THE CORRELATION FOR, WHAT'S THE TOP TYPE OF ISSUES YOU SEE IN SUMMER? RELIABILITY? SO, I DON'T KNOW THAT WE'VE SEEN A LOT OF FAILURES DURING SUMMER.

UM, WE, THERE'S A, A FEW AREAS, THIS, THIS PAST SUMMER WAS THE FIRST SUMMER THAT WE DID INSPECTIONS.

SO OUR HISTORY

[02:10:01]

THERE IS A LITTLE BIT SHORTER.

UM, THE, THE MOST CHALLENGING COMPLIANCE AREAS FOR FOLKS WERE JUST GETTING USED TO THE RULE AND, UH, THE FREQUENCY, FOR EXAMPLE, OF CHECKING, UH, THE QUALITY OF THE OIL AND TRANSFORMERS, HISTORICALLY, THEY MAY HAVE DONE IT WITH A PERIODICITY OF MAYBE EVERY THREE OR FOUR YEARS.

NOW THE RULE REQUIRES THEM TO CHECK IT ONCE A YEAR.

SO THERE'S BEEN SOME ADJUSTMENTS MADE THERE.

THERE'S BEEN ADJUSTMENTS IN THEIR RECORD KEEPING TO BE ABLE TO DEMONSTRATE THAT THEY'RE DOING THE THINGS THAT ARE, THEY'RE REQUIRED TO DO.

BUT I, I CAN'T PUT MY FINGER ON ANY SINGLE ELEMENT THAT THAT HAS CAUSED A LOT OF TROUBLE DURING SUMMER.

CARLOS, JUST TO FOLLOW UP ON THAT, UH, ANY INSIGHTS WITH RESPECT TO NATURAL GAS SUPPLY AND IMPROVEMENTS THAT HAVE BEEN MADE ON THAT SIDE? I KNOW IT'S NOT OUR PURVIEW, BUT OF COURSE IN DURING URI IT WAS ONE OF THE MAIN CAUSES OF THE FAILURE.

YEAH, I THINK, YOU KNOW, FROM THE PERSPECTIVE IS THE RAILROAD COMMISSION DOES NOW HAVE, UM, THEIR STANDARDS THAT THEY APPROVE.

SO I WOULD EXPECT THAT THAT WILL, JUST LIKE WITH US HAVING OUR WEATHERIZATION STANDARDS IN PLACE, YOU WILL SEE IMPROVEMENTS JUST BY HAVING THE STANDARDS IN PLACE.

CHRISTIE, ON THE RTPS, IF I WAS READING THAT AND LISTENING CORRECTLY, BY 2030, THEY'RE ESTIMATING PEAK LOAD TO BE NORTH OF 150 GIGAWATTS.

THAT IS CORRECT.

SO WE ARE SEEING, LOOKS LIKE ALMOST DOUBLING WHERE WE ARE.

WE SAW BETWEEN, ROUGHLY BETWEEN WHAT WE STUDIED LAST YEAR VERSUS WHAT WE STUDIED.

WE'LL BE STUDYING THIS YEAR BETWEEN 50 TO 60 GIGAWATTS OF INCREASED LOAN.

UM, SO A COUPLE OF THINGS ARE DRIVING THAT ONE OR FIRST OFF, THE INCREDIBLE GROWTH THAT WE'RE SEEING IN THE ECONOMY.

HISTORICALLY, YOU KNOW, YOU WOULD SEE THINGS MOVING IN HOMES BEING DEVELOPED, YOU KNOW, MAYBE A, A HOME DEPOT, A WALMART, OR HEB BEING BUILT COMPARED TO THE VERY LARGE DATA CENTERS, UM, THAT WE'RE SEEING BEING BUILT, UH, HYDROGEN FACILITIES POTENTIALLY BEING IN THE FORECAST.

UM, CRYPTO MINING, JUST THE WIDE ARRAY, UM, OF INDUSTRIAL THAT ARE CONSUMING AT A VERY MUCH HIGHER RATE THAN WHAT WE'VE HISTORICALLY SEEN BY THE NEW LOAD THAT'S COMING TO THE STATE.

THE OTHER PIECE THAT'S ADDING TO THAT IS HISTORICALLY THE PLANNING RULES THAT WERE IN PLACE, THE GUIDELINES THAT ERCOT HAD TO FOLLOW WAS THAT WE ONLY ACCEPTED LOAD FROM THE TRANSMISSION SERVICE PROVIDERS THAT HAD ASSIGNED INTERCONNECTION AGREEMENT BY THE CUSTOMER.

THE LAST LEGISLATIVE SESSION HAS CHANGED THAT.

AND SO WE ARE NOW SEEING ADDITIONAL LOAD BEING ADDED THAT WE WOULD DIDN'T HAVE IN THAT PRE IN THOSE PREVIOUS CASES.

UM, FROM TALKING WITH THE TRANSMISSION SERVICE PROVIDERS, JUST BECAUSE AS YOU, JUST LIKE YOU, RIGHT, WHEN WE RECEIVE THAT LOAD, IT'S AN INCREDIBLE GROWTH.

AND SO REALLY TRYING TO, TO PEEL BACK THE ONION AND UNDERSTAND WHAT'S COMING, WHAT'S THE LIKELIHOOD OF THOSE COMING.

UM, YOU KNOW, WE'VE GOT ANECDOTES FROM SOME OF THE TSPS THAT THEY'VE GOT CUSTOMERS THAT HAVE PUT DOWN FINANCIAL COMMITMENT, BUT THEY JUST HAVEN'T SIGNED THAT INTERCONNECTION AGREEMENT YET.

THEY WANNA UNDERSTAND THE PLAN BEFORE THEY'LL SIGN THOSE AGREEMENTS.

UM, SO INCREDIBLE GROWTH ON THE SYSTEM.

SO YES, THOSE NUMBERS ARE, ARE ASTONISHING.

CHAIRMAN, IF I MAY, UM, CHRISTIE, THANK YOU, UM, FOR YOUR, TO YOUR TEAM AND, AND THE REST OF THE ERCOT STAFF THAT'S BEEN WORKING STEADFASTLY ON THIS PERMIAN BASIN RELIABILITY PLAN.

I KNOW IT'S A LARGE UNDERTAKING AND WE'RE UNCOVERING A LOT OF, UM, OF DATA WITH RESPECT TO LOAD GROWTH IN THE AREA.

UM, AND SO IS JUST FOR CLARIFICATION FOR MY OWN PURPOSES, UM, SO THE, THE RELIABILITY PLAN WILL BE BUILT OUT FOR THE NEARLY 24 GIGS THROUGH 2030, OR WILL IT BE BUILT OUT FOR THE 26 GIGS, I GUESS TO 2038? WE WILL HAVE ONE FOR 2030 AND THEN ONE FOR 2038.

OKAY, OKAY.

UM, BUT IT'S JUST INCREMENTAL LOAD GROWTH.

I, I BELIEVE BETWEEN WHAT WE WERE SEEING, AND I DON'T HAVE THOSE NUMBERS.

I THINK IT WAS IN ONE OF OUR PREVIOUS COMMISSION FILINGS, UM, BUT I CAN GET THAT FOR YOU, BUT THE GROWTH THAT WE SAW BETWEEN THOSE TWO YEARS, THERE WAS NOT AS MUCH ADDITIONAL LOAD.

CUSTOMERS, YOU'VE GOT THE HYDROGEN FACILITIES AND DATA CENTERS.

UM, WITH RESPECT TO THE LOAD GROWTH IN GENERAL THAT YOU'RE SEEING AS, AS YOU RESPONDED BACK TO, UH, CHAIR FLEXION'S QUESTIONS, I KNOW THAT A LOT OF THE DATA YOU'VE BEEN COLLECTING FROM THE TSPS VIA SURVEY, UM, YOU KNOW, A LOT OF, YOU KNOW, YOU'VE GOT THE, UM, BITCOIN, UM,

[02:15:01]

TO WHAT EXTENT IS ERCOT BREAKING DOWN TRADITIONAL VERSUS AI OPERATED DATA CENTERS? UM, THE ARTIFICIAL INTELLIGENCE OPERATED DATA DATA CENTERS IS A, UM, IS A HOT TOPIC NATIONALLY RIGHT NOW, UM, THROUGHOUT THE COUNTRY WITH RESPECT TO THE, UM, LARGE INCREASES IN, UM, ELECTRICITY DEMAND THAT WE'LL SEE AS A RESULT OF THOSE AI DATA CENTERS.

I MEAN, THERE'S BEEN A LOT OF ARTICLES OUT THERE, WASHINGTON POST, WALL STREET JOURNAL THAT, YOU KNOW, A LOT OF CONCERN THAT, UM, REGARDING HOW FAST THOSE DATA CENTERS CAN BE BUILT AND HOW WE WILL KEEP UP WITH THAT, UM, GROWTH AND, AND SO IS THERE ANY SORT OF SPECIFIC EXTRAPOLATION OF DATA Y'ALL ARE DOING IN RESPECT TO AI'S DATA CENTERS? SO ONCE WE RECEIVED ALL OF THE DATA, UM, WE RECEIVED IT IN, IN VARIOUS, UM, DIFFERENT, UM, CAVEATS FROM THE TSPS TAGS ON, ON WHAT WAS ACTUALLY SET AS THOSE LOADS.

AND SO WE HAD GONE BACK AND WE'RE CURRENTLY GOING THROUGH A SET OF RFIS TO GET ADDITIONAL INFORMATION ON THAT.

AND SO, UM, I HOPE TO BE ABLE TO, IN ONE OF OUR NEXT REPORTS TO BE ABLE TO SHARE MORE OF THAT BREAKDOWN OF WHAT WE'RE SEEING AS FAR AS A LITTLE BIT MORE GRANULARITY THAN WHAT THE CATEGORIES YOU HAVE HERE.

CHRISTIE, I'VE GOT A QUESTION ON THE NEXT SLIDE.

THE GENERATION INTERCONNECT REQUEST.

UH, WE RECENTLY HAD A ONLINE PRESENTATION FROM PJM AND THEY TALKED ABOUT TRYING TO FINE TUNE THIS AND PRIORITIZING, AND ONE OF THE THINGS THEY DID, AND MAY, I'M JUST ASKING, HAVE WE ALREADY DONE THIS, IF THEY'RE ASKING, IS THE SITE READY TO BE BUILT, AND IF SO, IF IT'S SITE READY, THEN THEY'RE POPPING THOSE REQUESTS TO THE TOP OF THE QUEUE.

DO DO WE DO SOMETHING SIMILAR? YES.

AND WE ALSO HAVE RULES IN PLACE THAT WERE GIVEN TO US BY THE COMMISSION OR DIRECTION FROM THE COMMISSION.

UM, ALSO, YOU KNOW, WE PUT DISPATCHABLE GENERATION FIRST, FIRST AS WELL.

SO IN THESE BARS, COULD WE, WOULD IT BE EASY TO SHOW US SITE READY VERSUS NOT SITE READY? I'LL HAVE TO TAKE THAT BACK TO ABLE TO, LIKE, IS IT ONE THIRD OF THE SOLAR AND ONE THIRD OF THE BATTERIES? UM, I THINK, SO ONE THING THAT WE DO SHOW YOU, WHICH THERE IS A, I THINK WE HAVE A DIFFERENT, YEAH, LET'S GO TO THAT ONE.

YOU HAVE THAT ONE IN HERE.

WE HAVE A DIFFERENT, UH, METRIC THAT SHOWS AS THEY PROGRESS THROUGH.

YEAH, SO YOU CAN SEE HERE IT'S ON, ON SLIDE 15 OR 365 IN, IN YOUR BOOK.

UM, IT'S A BREAKOUT BY THE DIFFERENT FUEL TYPES AND WHERE THEY ARE.

SO, YOU KNOW, YOU MAY HAVE, HERE, THIS IS THE BEGINNING WHERE THEY'RE JUST GOING THROUGH SCREENING STUDIES TO SEE IF THOSE SITES ARE FEASIBLE, IF THEY HAVE SITE CONTROL.

UM, AS YOU CAN SEE, THE MAJORITY RIGHT NOW ARE IN THIS FULL INTERCONNECTION PROCESS.

UM, THESE STUDIES ARE DONE BY THE TRANSMISSION SERVICE PROVIDERS.

UM, AND AS YOU CAN IMAGINE WITH THE LARGE AMOUNTS OF SMALLER UNITS, UM, THOSE STUDIES, YOU'VE GOT A NUMBER OF THOSE IN THOSE PROCESSES HERE.

AND THEN AS YOU GET FURTHER TO THE RIGHT, THAT'S WHERE YOU'RE GETTING CLOSER TO SYNCHRONIZATION, UM, AND GOING COMMERCIAL.

AND SO TO SUMMARIZE, WE CAN TAKE AWAY IT'S APPROPRIATELY PRIORITIZED.

[8.2 System Operations Update ]

SO NEXT DAN WOODFIN WILL PRESENT THE SYSTEM OPERATIONS UPDATE, WHICH IS AGENDA ITEM 8.2, WHICH I'VE NOTED TO INCLUDE AN UPDATE ON THE NPRR 1224 ECRS MANUAL DEPLOYMENT TRIGGERS.

DAN, HELLO AGAIN.

SO I'M GOING TO SKIP THROUGH THE FIRST FEW SLIDES BECAUSE THEY HAVE EFFECTIVELY BECOME AN APPENDIX, AND I THINK NEXT TIME WE'RE GONNA TURN THAT AROUND AND PUT THOSE, THE, THE ONES THAT ARE AT THE BEGINNING IN AN APPENDIX AND JUST COVER THE HOT TOPICS.

CERTAINLY IF YOU HAVE ANY QUESTIONS ABOUT ANY OF THOSE EARLY SLIDES, I'D BE HAPPY TO ASK.

I GUESS ONE OF THE ONE I WILL NOTE, ONE THING IS THAT WE SET A NEW ALL TIME WINTER PEAK IN JANUARY, WHICH WE'VE ALREADY HEARD, WHICH IS ALSO A NEW JANUARY PEAK.

[02:20:07]

HOW SCARCE DO WE NEED TO BE BEFORE WE RELEASE IT? AND SO WE PRO UH, PROPOSED AN NPRR THAT WE BASICALLY TEE THAT QUESTION UP TO STAKEHOLDERS BECAUSE IT, IT IS A BALANCING ACT AS TO WHETHER TO RELEASE IT LATER OR EARLIER.

SO HOT TOPICS WE'RE GONNA TALK ABOUT, UH, RESOURCE ATTITUDES, A LITTLE BIT ABOUT THE ECLIPSE.

AND THEN AS THE CHAIR MENTIONED, UH, SOME DISCUSSION OF ECRS.

SO THIS, THIS GRAPHIC SHOWS THE MAXIMUM DAILY RESOURCE PLANNED OUTAGE CAPACITY.

THAT'S THE LINES, KIND OF THE MAXIMUM AMOUNT OF OUTAGES THAT WE WOULD ALLOW, UH, BASED ON CERTAIN CRITERIA FOR, UM, NON-RENEWABLE RESOURCES.

THE BLUE LINES SHOW WHAT OUTAGES THAT HAVE ACTUALLY BEEN, UH, APPROVED THROUGH THIS TIME OR TAKEN.

YOU SEE THAT THERE'S SOME TIMEFRAMES THAT WE BUMP RIGHT UP AGAINST IT, BUT FOR THERE WERE O OTHER, UH, AREAS WHERE WE WERE STILL HAD ROOM TO MOVE, UH, HAVE MORE OUTAGES.

UM, WE'VE ACTUALLY ASKED STAKEHOLDERS FOR FEEDBACK AS IS REQUIRED ONCE, UH, TO BE DONE ON AN ANNUAL BASIS OF WHAT THE, UM, WHETHER WHETHER THEIR IMPROVEMENTS SHOULD BE MADE, SOME ANALYSIS THAT WE NEED TO DO RELATED TO M-D-R-P-O-C.

AND SO WE'VE ASKED FOR FEEDBACK ON THAT.

WE'LL BE LOOKING AT THAT FEEDBACK AND TAKING INTO ACCOUNT TO SEE IF THERE ARE ANY CHANGES THAT WE MAY NEED TO MAKE TO IT.

THE SOLAR ECLIPSE, UM, WE GOT THROUGH IT WELL, WITH NO PROBLEMS. IT WASN'T QUITE AS EASY AS WHAT I READ IN THE NEWSPAPER, IT WAS, BUT WE, UH, DID MAKE IT THROUGH.

WE WOUND UP BUYING SOME EXTRA ANCILLARY SERVICES.

WE COMMITTED SOME EXTRA GENERATION.

WE TOOK SOME, UH, MANUAL ACTIONS TO MAKE SURE THAT THE GENERATION THAT HAD HEADROOM WAS THE RESOURCES THAT COULD MOVE THE FASTEST AND RAMP UP AND THEN RAMP DOWN TO MATCH THE, THE, AS THE SOLAR WENT AWAY, WE WOUND UP, UH, BECAUSE OF THE, THE AMOUNT OF CLOUDS THAT DAY, WE WOUND UP HAVING ABOUT 13 GIGAWATTS OF SWING FROM KIND OF WHAT IT WAS RIGHT BEFORE THE ECLIPSE STARTED DOWN, AND THEN 13 GIGAWATTS COMING BACK UP.

SO IT WAS WOUND UP BEING A LITTLE SUNNIER THAN WHAT WE HAD SEEN THAT IT, WE THOUGHT IT MIGHT BE IN THE WEEK GOING INTO IT, BUT IT WAS CERTAINLY LESS THAN A, THAN A CLEAR SKY TYPE DAY AS THOSE OF US THAT LOOKED OUT AT IT ON THE, IT WASN'T A CLEAR DAY.

SO ECRS, UM, THE GRAPHIC UP THERE IN THE, UH, RIGHT CORNER IS ONE THAT I SHARED WITH YOU, UH, LAST TIME.

THERE ARE REALLY THREE THINGS GOING ON RELATED TO ECRS, UM, AND ANCILLARY SERVICES IN GENERAL.

UM, WE COMMITTED AS PART OF LAST YEAR THE, THE ANCILLARY SERVICE REVIEW FOR THIS YEAR THAT WE'D COME BACK TO TAC WITH A REVIEW OF WHAT SHOULD HAPPEN RELATED TO ECRS BASED ON SOME OF THE IMS FEEDBACK.

UM, WE, UM, HAD ALRE.

SO THE FOCUS OF THAT IS MORE ON RELEASE OF WHEN WE WOULD RELEASE ECRS TO SCAD ON DAYS WHERE WE WOULD BE, UH, WE WOULD HISTORICALLY RELEASED IT LAST YEAR.

WHAT WE, IS THERE ANYTHING WE SHOULD DO DIFFERENT? WE'RE NOT WORKING AS MUCH ON THE QUANTITIES.

WE'VE ALREADY REDUCED THE QUANTITIES AS PART OF THE ANCILLARY SERVICE REVIEW BACK, UH, AT THE END OF LAST YEAR.

WE THINK THAT ANY FURTHER REVIEW OF THAT PROBABLY SHOULD HAPPEN THROUGH THE OVERALL, UH, DISCUSSION THAT WE'RE HAVING WITH THE PUC AND THE IMM, UH, BY SEPTEMBER, UM, BECAUSE IT WOULD BE A CHANGE TO THE, THE KIND OF RELIABILITY CRITERIA.

SO WE'RE NOT GONNA FOCUS ON THAT AS MUCH, BUT WE ARE, UH, PUTTING MORE OF THE FOCUS ON THE RELEASE.

WE'VE WORKED WITH THE IMM TO DEVELOP, UH, A COUPLE OF DIFFERENT IDEAS RELATED TO THE ECRS THAT THIS, THIS, WHEN IT WOULD BE RELEASED UNDER NEAR SCARCITY CONDITIONS.

ONE OPTION IS THAT WE WOULD CONTINUOUSLY RELEASE A PORTION OF IT TO SCAD AT SOME OFFER FLOOR.

UM, I THINK WE, THE IMM, THERE'S GENERAL AGREEMENT THAT MIGHT BE THE BEST SOLUTION THAT WOULD STILL ALLOW US TO MEET OUR RELIABILITY OBLIGATIONS, BUT ALSO, UH, ADDRESS SOME OF THE CONCERNS THAT THE IMM HAD.

AND SO THAT'S KIND OF THE PRE PREFERRED OPTION.

IT'S NOT LIKELY TO BE ABLE TO BE, WELL, IT'S NOT GONNA BE ABLE TO BE IMPLEMENTED BY THIS SUMMER BECAUSE IT REQUIRES PROTOCOL CHANGES, SYSTEM CHANGES BY US, AND PROBABLY ALSO SYSTEM CHANGES BY THE QSE.

UM, SO A QUICKER OPTION THAT WE'VE DEVELOPED IS TO RELEASE BLOCKS OF ECRS.

UH, WIND SC IS SHORT OF CAPACITY.

SO WHEN WE'RE NEARING THOSE SCARCITY TYPE CONDITIONS, WE WOULD RELEASE IT.

THE QUESTION IS

[02:25:01]

WE'RE GONNA HOLD IT TO WHERE IT, WE DON'T HAVE ANY CONCERNS FROM A RELIABILITY PERSPECTIVE, BUT IT'S REALLY A BALANCING ACROSS THE DIFFERENT MARKET PARTICIPANTS AS TO WHAT THAT TRIGGER LEVEL SHOULD BE.

UM, SO WE PROPOSED THIS NPRR, UM, THAT'S, UH, GONE TO PRS.

IT WAS TABLED.

UM, IT WAS DECLARED URGENT, BUT THEN IT WAS TABLED.

SO FOR MORE DISCUSSION BY STAKEHOLDERS, UM, BECAUSE OF THAT, IT'S, UH, UNLIKELY TO BE APPROVED BEFORE SUMMER, UM, AT LEAST BEFORE THE END OF SUMMER.

UM, WHAT OUR INTENTION IS, IS THAT SINCE WE HAVEN'T GOTTEN THIS INPUT FROM STAKEHOLDERS, THIS GUIDANCE ON WHAT, WHERE, WHERE WE SHOULD BALANCE THIS RELEASE, UH, WE'RE GONNA CONTINUE TO DO WHAT WE DID LAST YEAR, AND WE WOULD RELEASE IT IN BASICALLY THE SAME TIME, SAME CRITERIA THAT WE USED LAST YEAR.

UM, SO THAT'S, THAT'S WHERE WE'RE AT ON THAT, THAT NEAR TERM RESPONSE.

I THINK WE'RE GONNA HEAR BACK FROM STAKEHOLDERS MORE ABOUT THE, UH, FROM THAT THEY'RE INTENDING TO WORK ON IT PROMPTLY, BUT IT'S APPROPRIATE, IT'S NECESSARY TO REALLY HAVE THE, A GOOD DISCUSSION ON IT.

IN PARALLEL, WE'VE SAID WE'RE GONNA, ERCOT STAFF IS GONNA GO AHEAD AND FILE THE OFFER FLOOR NPRR SO THAT THAT CAN BE CONSIDERED ALONGSIDE IT, EVEN THOUGH IT'S GONNA TAKE LONGER TO GET IT IMPLEMENTED.

WE STILL NEED TO GET FOLKS TO START THINKING ABOUT WHAT THE TRIGGERS SHOULD BE AND WHETHER THEY WANT TO GO DOWN THAT PATH.

AND SO THAT'S BASICALLY WHERE WE STAND ON THE ECRS AT THIS POINT.

HAPPY TO ANSWER ANY QUESTIONS.

COMMISSIONER COBOS? YES, DAN, THANK YOU SO MUCH FOR YOUR UPDATE ON THE ECRS REVIEW, THE NEAR TERM REVIEW, UM, THAT WAS, UH, AIRCRAFT'S COMMITMENT TO RETURN AS PART OF THE 2024 ANCILLARY SERVICE METHODOLOGY APPROVAL.

UM, SO Y YOU'RE SAYING THAT THE NPRR 1224 CANNOT GET APPROVED FOR THIS SUMMER, UH, BECAUSE IT GOT TABLED AT PRS.

SO WHAT IS, I MEAN, CAN WE NOT GET IT TO THE JUNE BOARD MEETING? I THINK WE CAN GET IT TO THE JUNE BOARD MEETING, AND WHICH IS TOWARD THE, I DON'T KNOW EXACTLY WHEN IT IS TOWARD THE END OF JUNE, THEN THERE'S THE, THE, THE 30 DAY COMMISSION REVIEW TIME, AND SO IT WOULD BE THE END OF JULY, KIND OF UNDER THAT NORMAL TIMEFRAME.

YEAH, SO, WHICH I THINK WE CAN WAIVE THE 30 DAY COMMISSION REVIEW TIME.

I THINK IT'S IMPORTANT THAT WE, UM, YOU KNOW, TAKE WHATEVER'S PASSED WITH THE NPRR THAT MAKES INCREMENTAL IMPROVEMENTS TO THE DEPLOYMENT OF ECRS AND THAT IT'S IN PLACE FOR AS MUCH OF THE SUMMER AS WE CAN HAVE IT IN PLACE IN.

AND SO A JUNE BOARD MEETING, I THINK IS, IS, UM, I THINK SOMETHING THAT YOU ALL SHOULD WORK TOWARDS HAVING THE STAKEHOLDERS AND THE ERCOT PROCESS SHOULD WORK TOWARDS GETTING THAT NPRR FOR APPROVAL AT THE JUNE BOARD MEETING BY THE BOARD, SO THAT WE CAN THEN, UM, TAKE THAT UP AS SOON AS POSSIBLE AND HAVE IT EFFECTIVE IN JULY.

SO, UM, WITHOUT COMMENTING ON THE SUBSTANCE ON THE, OF THE NPRR, UM, IT SOUNDS LIKE THIS IS THE FASTEST APPROACH TO MAKE SOME INCREMENTAL IMPROVEMENT TO THE DEPLOYMENT OF ECRS, AND I JUST WOULD PREFER THAT, AT LEAST FROM MY PERSPECTIVE, TO GET SOMETHING DONE, YOU KNOW, SOONER RATHER THAN LATER AS WE SORT OF CONTINUE TO WORK ON THE BROADER AS STUDY SCOPE.

I THINK ULTIMATELY, UM, IT'S INCUMBENT ON US AS THE, AS THE COMMISSION TO ENSURE THAT WE'RE MAINTAINING RELIABILITY AND WE'RE DOING THAT, BUT AS AT THE SAME TIME THAT WE'RE TAKING INTO CONSIDERATION ANY COST IMPACTS THAT CONSUMERS MAY FEEL WITH RESPECT TO THE ECRS.

AND SO WE'VE GOTTA, WE'VE GOTTA FIND SOME, UM, WAY TO MAKE SOME, SOME CHANGES TO THIS, UM, ISSUE AS IT'S OBVIOUSLY BEEN A HOT TOPIC FOR MONTHS NOW.

UM, AND IT SOUNDS LIKE THERE'S AT LEAST SOME WAY OF MOVING FORWARD WITH THAT NPRR THAT, UM, SHOULD BE BALANCED.

I THINK THAT'S GOOD FEEDBACK.

NEXT UP IS WOODY RICKSON TO PRESENT THE AGENDA ITEM 8.3 COMMERCIAL MARKETS UPDATE.

UH, GOOD SUGGESTION.

OTHER QUESTIONS FOR, FOR DAN? OH, I HAVE ONE OF COURSE.

UM, I KNOW AT TAC IT WAS DISCUSSED AND DO YOU KNOW IF Y'ALL PLAN TO DO SOME OF THE BACK CASTING THAT WAS REQUESTED TO SHOW HOW THIS WOULD HAVE PLAYED OUT IN 2023 WITH IF THIS WAS IN PLACE OR NOT? SO I WAS OUT THE END OF LAST WEEK, BUT I THINK, UH, WE'VE BEEN WORKING ON HOW THAT WOULD WORK, BOTH US AND I THINK THE IMM, UM, HAVE BEEN WORKING ON THAT.

[02:30:03]

THANK YOU, DAN.

OKAY,

[8.3 Commercial Markets Update ]

SO I ONLY HAVE ONE UPDATE FOR YOU THIS MORNING, AND THAT'S ON THE A DER.

SO, AND THAT'S NOT MUCH OF AN UPDATE ACTUALLY IS CONTINUE TO WORK THERE, BUT THERE ARE NO NEW, UH, NO NEW DEVELOPMENTS IN THAT AREA.

UM, CONTINUE TO WORK ON QUALIFYING IT FOR ECRS, BUT NO NEW ADRS HAVE BEEN ADDED TO THE ONES THAT WERE THERE LAST TIME WE TALKED.

SO THAT IS PRETTY MUCH THE SAME AS IT WAS.

THAT'S IT, UNLESS YOU HAVE QUESTIONS.

ANY QUESTIONS FOR WOODY? THAT'S A VERY BRIEF UPDATE.

THANKS, WOODY.

[8.3.1 Real-Time Co-optimization Update ]

UH, NEXT UP IS MATT MARINAS IN AGENDA ITEM 8.3 0.1, REAL TIME COOP, CO-OP OPTIMIZATION.

MATT MARINAS WITH ERCOT, ALSO THE R-T-C-B-T-F CHAIR.

AND I WANTED TO WALK THROUGH, UH, JUST A HIGH LEVEL UPDATE, I THOUGHT COULD BE QUICK, BUT WOODY SET THE BAR FOR QUICK, PRETTY HIGH.

WE WILL USE THE ORDC CURVE, WHICH IS THE FIGURE ON THE LEFT.

UM, SO IN TERMS OF THE INTERNAL, UH, RHYTHM OF ERCOT REALTIME OPTIMIZATION, THE WAY, THE REASON THAT KAAN ASKED TO START DOING THE BOARD UPDATES IS JUST TO KEEP A PULSE ON IT.

IT INVOLVES 75 DEPARTMENTS, 150 PEOPLE.

IT'S, IT'S THE BIG THING MOVING SHIP, MOVING THROUGH THE CHANNEL.

AND SO PART OF IT HAS BEEN, UH, WHAT JP PROVIDED EARLIER IN TERMS OF THE TECHNOLOGY AND SECURITY GROUP, WHICH IS WE'VE BEEN HEADS DOWN AND MAKING A LOT OF PROGRESS, AND SO IT'S BEEN GOING WELL.

UM, AND THEN WHAT OUR ACTIVITIES LOOK LIKE INTERNALLY IS WE'RE ACTUALLY STARTING TO HAVE WEEKLY, UH, MEETINGS WITH OUR KEY VENDOR, OUR MARKET MANAGEMENT SYSTEM VENDOR.

WE'RE ACTUALLY FLYING OUT THERE NEXT WEEK, UH, TO KEEP ON TRACK.

THEY'RE ACTUALLY DELIVERING CODE NEXT MONTH.

SO THE IDEA THAT WE'RE STARTING TO GET ITERATIONS OF RTC CODE IN-HOUSE TO START TESTING, SIMULATING AND THINGS LIKE THAT IS BECOMING REAL.

UM, IN TERMS OF OUR EXTERNAL PIECE, THAT'S WHAT I WANNA TALK ABOUT TODAY IS WHAT DOES IT MEAN TO WORK WITH STAKEHOLDERS ON MARKET READINESS, DESIGN ISSUES AND THINGS LIKE THAT.

LET'S SEE.

SO WE HAVE A, I CALL IT A DANCE CARD, BUT IT'S LIKE, IT'S THE ISSUES THAT WE WANT TO GET THROUGH BETWEEN NOW AND MAY IS OF NEXT YEAR IS OUR TARGET FOR MARKET TRIALS.

SO WHAT NEEDS TO HAPPEN BETWEEN NOW AND THEN IN TERMS OF GETTING THESE THINGS BUTTONED UP? UH, THE TWO THINGS I WANTED TO HIGHLIGHT IS, ONE IS THE BUSINESS REQUIREMENTS HAVE COME OUT FASTER THAN WE EXPECTED.

AND SO WE'RE ACTUALLY ALREADY STARTING TO HAVE MARKET INTERFACE DESIGN CHANGE MEETINGS WITH OUR MARKET PARTICIPANTS.

SO THERE'S A WORKSHOP LAST WEEK THAT IT HELPED TO LEAD AS THE IDEA OF HERE'S THE TELEMETRY CHANGES NEEDED, HERE'S THE MARKET SUBMISSIONS, CHANGES THAT ARE NEEDED.

DO YOU HAVE QUESTIONS? WHAT DOES IT TAKE TO START BUILDING YOUR SYSTEMS? UH, THE OTHER PIECE OF THAT IS THE ANCILLARY SERVICE DEMAND CURVES.

UM, WE HAVE AN AS DESIGN PIECE AND THE MARKET IS SAYING, IS THAT THE RIGHT DESIGN? AND I'LL UNPACK THAT IN ONE MORE SLIDE.

SO IN TERMS OF WHAT WE NEEDED FROM THE MARKET, UH, WE, SORRY, I'M ERCOT NOW.

WE NEED DESIGN THINGS BUTTONED UP SO WE CAN CODE AND DELIVER.

SO WE HAD TWO OUTSTANDING DESIGN ISSUES.

ONE WAS THE RU CAPACITY SHORT.

SO WHEN ERCOT MAKES A RELIABILITY UNIT COMMITMENT, PUTS A, UM, A GENERATOR ON TO COVER A SHORTFALL.

THE IDEA IS WHO PAYS THE BILL ON THAT.

SO BY DEFAULT, WE'LL SEE WHO'S NET SHORT, WHO HAD A DAY AHEAD OBLIGATION BUT DIDN'T SHOW UP.

THAT'S THE DIRECT ASSIGNMENT.

WE'VE HAD THAT IN PROTOCOLS, BUT WE DIDN'T HAVE IT FOR STATE OF CHARGE AND WE DIDN'T HAVE IT FOR THE NEW AS SUBTYPES THAT HAVE COME ONLINE IN THE PAST TWO YEARS.

AND SO THIS IS KIND OF A, UH, A RETROFIT OF THAT CONCEPT.

UH, THE GOOD NEWS IS TAC DID APPROVE THE WHITE PAPER LAST WEEK.

SO ESSENTIALLY THAT DESIGN ELEMENT IS TAKEN CARE OF.

SO THAT'S A CHECK OFF THE LIST.

UH, THE OTHER ONE IS FOR AN ONLINE HYDRO RESOURCES.

UH, THESE ARE RUNNING IN SYNCHRONOUS CONDENSER MODE.

UM, OFTEN HYDRO DOES NOT WANT TO BE DISPATCHED FOR ENERGY AND BECAUSE THEY HAVE MITIGATED OFFER CAPS, THEY CAN GET MOVED INTO THE MONEY FOR SC AND START DISPATCHING AND RELEASING WATER WHEN THEY DON'T WANT TO.

THEY REALLY WANNA HOLD, UH, FOR THE ANCILLARY SERVICES.

SO WE'VE COME TO A RESOLUTION ON THAT, THAT'LL GO THROUGH TAC.

BUT WHAT I REALLY WANTED TO TALK ABOUT TODAY WAS THIS PIECE, BECAUSE IT'S NOT A PART OF THE TASK FORCE, IT MAY END UP IN YOUR LAPSE AND I JUST KINDA LOOK AROUND THE ROOM OF, UM, SO THERE IS THIS IDEA THAT THE AS DEMAND CURVES FOR REALTIME QUANTIZATION, WE'RE CLEARING ENERGY EVERY FIVE MINUTES.

REALTIME IZATION DOES THE ENERGY PLUS THE FOUR DIFFERENT ANCILLARY SERVICES.

SO THAT'S REGULATION RESPONSIVE NONS, SPIN, AND ECRS.

SO BACK IN 2019, A POLICY CUT WAS MADE AT THE COMMISSION AND IT WAS BAKED INTO PROTOCOLS THAT SAYS, FROM AN IMPLEMENTATION PERSPECTIVE,

[02:35:01]

THAT'S THE SHAPE THAT YOU SEE ALL THE TIME AS THE FOUNDATION FOR THOSE AS CURVES, THOSE ANCILLARY SERVICE DEMAND CURVES.

AND THE IDEA IS TO READ THAT IS IT'S NO LONGER JUST AN ENERGY SCARCITY CURVE, IT'S THE, FOR EACH ANCILLARY SERVICE, WHAT'S THE VALUE.

AND SO IT'S KIND OF A STEP FUNCTION.

YOU CAN'T READ IT, BUT THE BLUE IS THE REGULATION WE NEED THE MOST TO 5,000.

THE RESPONSIVE IS THE AMBER COLOR AND THEN ECRS AND THEN NONS SPIND.

AND SO THE IDEA IS IN PROTOCOLS TO SAY, FOLLOW THE ORDC CURVE, STACK 'EM IN LIKE THIS.

UM, SECOND BULLET DOWN HERE, EXTENSIVE MARKET PARTICIPANT DISCUSSION.

WHEN WE SHOWED THOSE NUMBERS AND THEY SAID, HEY, UH, THERE ARE SOME CONCERNS WITH WHETHER OR NOT THE CURRENT ORDC SHAPE IS CORRECT, DOES IT MATCH THE OPERATING CONDITIONS? DOES IT MATCH THE PRICE FORMATION ISSUE? UH, SOME MARKET PARTICIPANTS SAID MAYBE WE SHOULDN'T BE, UH, SILOING EACH OF THESE SERVICES.

MAYBE WE SHOULD CO-MINGLE, MAYBE SOME ECRS IS ACTUALLY WORTH THAT HIGHER VALUE, AND SHOULD WE START TO MIX THESE UP? SO IF THOSE WERE TO BE TAKEN UP, I WANT TO GIVE A ROADMAP OF WHERE THOSE ISSUES LAND OUTSIDE OF THE TASK FORCE.

THAT'S FAIRLY SELFISH OF ME TO SAY.

UM, BUT THE FIRST ONE IS WITH CHANGING THE SHAPE OF THE ORDC CURVE.

UM, THE AS DEMAND CURVES WERE BASED ON A MEMO AND PUT IN PROTOCOLS AND APPROVED BY THE BOARD AND PC TO RESHAPE THAT CURVE WOULD BE A C POLICY CHANGE.

FOR EXAMPLE, BACK IN NOVEMBER OF LAST YEAR IS WHEN WE IMPLEMENTED, UH, A CHANGE TO THE ORDC CURVE, UH, FOR THE MEN, UM, OFF STEP, WAS IT MEN ENERGY STEP ON THE RDC CURVE PLUS 10 AND PLUS 20 TYPE PRICING VALUES ON THE TAIL.

THOSE TYPES OF ISSUES OCCURRED AT THE PUC TO RESHAPE THOSE, UH, WOULD TAKE TIME AT THE COMMISSION.

IT'S SOMETHING THAT'S OUTSIDE OF ERCOT AND DOWNTOWN TO SAY NINE MONTHS.

AND I'LL TELL YOU WHY THAT MATTERS IN A MINUTE.

IF IT'S NINE MONTHS OR A YEAR.

THE GOOD NEWS IS ONCE THAT DECISION IS MADE AND IN PROTOCOLS, ERCOT ONLY NEEDS ABOUT A MONTH TO KEY IT IN, IT'S A PARAMETER CHANGE.

WE'RE READY TO CHANGE THAT CURVE AS NEEDED.

WE KNOW THAT'S PART OF A, MAINTAINING THE SYSTEM IN THE YEARS TO COME, BUT WE ALSO RECOGNIZE THAT IF WE'RE GOING INTO MARKET TRIALS IN MAY OF NEXT YEAR, THAT'S COMING PRETTY QUICK.

SO THIS ISN'T A ISSUE THAT CAN LINGER IF PEOPLE THINK IT NEEDS TO GO IN WITH HER AFTER RTC.

THE OTHER ONE IS THE THIRD BULLET CHANGING THE DISTRIBUTION TO START COMMINGLING THOSE DIFFERENT, UH, ANCILLARY SERVICES INTO DIFFERENT ORDER.

THAT'S ONE THAT WE CAN'T DO FOR GO LIVE.

SO I INTRODUCED THE IDEA OF THAT PROTOCOLS COULD BE SPONSORED AND CHANGED, BUT IT WOULDN'T BE, UM, FOR GO LIVE.

AND WITH THAT, AGAIN, THE TECHNICAL WORKSHOPS ARE OFF AND RUNNING.

UM, THE MARKET PARTICIPANTS HAVE BEEN VERY ENGAGED THAT IT WORKSHOP LAST WEEK.

I THINK IT HAD 150 MARKET PARTICIPANTS DIALED IN.

SO, UH, PEOPLE ARE PAYING ATTENTION.

UH, WE'RE GETTING THE SUPPORT THAT WE NEED AND THERE'S A LOT OF WORK LEFT TO DO.

BUT WITH THAT, I'LL OPEN IT UP FOR ANY QUESTIONS.

WELL, THANK YOU.

THANK YOU, MATT.

[8.4 Market Credit Update ]

IS AUSTIN ROSELL WILL PRESENT AGENDA ITEM 8.4, MARKET CREDIT UPDATE.

HELLO.

UH, UNSECURED CREDIT, UH, PHILOSOPHY WE HAVE NOW.

AUSTIN ROZELLE WITH ERCOT HERE FOR THE, UH, MARKET CREDIT UPDATE.

SO THERE'S NO, UH, NO ACTION, UH, BEING REQUESTED OF YOU ALL TODAY.

THIS IS JUST AN UPDATE, UM, GIVING YOU SOME UPDATE ON THE, UH, SOME STATISTICS AND SOME NPRS.

AND, UM, PROBABLY ONE OF THE MORE SAME THINGS YOU SEE AT THE BOTTOM HERE.

WE DID HAVE FOUR DEFAULTS, UH, RECENTLY.

SO RIGHT NOW, THINGS YOU KNOW ARE BETWEEN MORE, UH, EXTREME SEASONS, I GUESS.

SO THE TOTAL POTENTIAL EXPOSURE AND THE AVERAGE DISCRETIONARY COLLATERAL ARE FAIRLY FAT FLAT, UH, 1.8 TO 1.3 BILLION FOR TOTAL POTENTIAL EXPOSURE FROM JANUARY TO FEBRUARY.

AND, UH, FOUR POINT, UH, 5.6 TO 4.6 IN, UM, DISCRETIONARY COLLATERAL FROM JANUARY TO FEBRUARY.

UH, THAT THE TRENDS CONTINUING FOR MARCH.

I KNOW MARCH ISN'T IN HERE BECAUSE OF THE TIMEFRAME WE PUT THESE PRESENTATIONS TOGETHER, BUT, UH, WE'RE, WE'RE STILL TRACKING, UM, SIMILAR TO THOSE NUMBERS FROM MARCH, UM, UH, ON APRIL 1ST, WE IMPLEMENTED A NEW N-P-R-R-N-P-R 1165, AND THAT WAS REVISIONS TO REQUIREMENTS AND PROVIDING AUDITED FINANCIAL STATEMENTS AND PROVIDING INDEPENDENT AMOUNTS FOR ALL COUNTERPARTIES.

AND I HAVE A REFRESH ON WHAT THAT NPR IS ON THE NEXT PAGE IF, IF YOU NEED IT.

BUT BASICALLY, UH, WE WERE REQUIRING ALL MARKET PARTICIPANTS TO POST AN INDEPENDENT AMOUNT WITH US OF EITHER 200,000 OR 500,000.

THERE WERE, THERE WERE WAYS TO, TO AVOID POSTING THAT, UM, DEPENDING ON YOUR, THE, THE SIZE OF YOUR COMPANY OR IF YOU HAD A GUARANTOR.

BUT THIS NPR JUST REQUIRED IT OF EVERYBODY LEVELED THE PLAYING FIELD THROUGH EVERYBODY.

AND IT'S KIND OF COUPLED WITH THE,

[02:40:01]

SO UNFORTUNATELY, THAT DID RESULT IN FOUR DEFAULTS.

HOWEVER, I DON'T THINK THAT IT'S A VERY SIGNIFICANT EVENT.

THESE, UM, WERE MARKET PARTICIPANTS THAT WERE JUST BASICALLY SITTING THERE.

THEY WERE ON THE BOOKS, BUT THEY WEREN'T ACTIVE IN THE MARKET, WHICH IS WE SEE THAT FROM TIME TO TIME, ESPECIALLY WITH TRADERS.

SO THEY HAD MINIMAL COLLATERAL WITH US TO, TO, TO, TO STAY ACTIVE IN OUR SYSTEMS. AND WHEN THIS REQUIREMENT CAME ON, THEY DIDN'T WANT TO MEET IT.

AND SO THEY, THEY, UH, DEFAULTED THERE.

ANY QUESTIONS ON THAT? AND AGAIN, THE DEFAULT WAS THEY NOT PROVIDING THE STATEMENTS, NOT A FINANCIAL DEFAULT? NO.

THE DEFAULT WAS THEY DID NOT PROVIDE THE INDEPENDENT AMOUNT OF 200 OR OKAY.

$500,000.

SO, OKAY.

JUST TO, IT'S LIKE A, IT'S LIKE A AND UP JUST TO BE INVOLVED IN THE MARKETS NOW, WHERE THIS NPR IS REQUIRING THAT INDEPENDENT AMOUNT OF, OF EVERYBODY.

SO THEY NOW, THEY CAN NO LONGER PARTICIPATE UNTIL THEY CORRECT THAT DEFAULT.

I'M SORRY, I MISSED THE FIRST PART OF YOUR QUESTION THERE.

THEY, THEY'RE NO LONGER A MARKET PARTICIPANT OR THEY NO LONGER QUALIFY AS A MARKET PARTICIPANT UNTIL THEY CLEAR THAT, CORRECT? WELL, THEY, THEY DID NOT MEET THAT REQUIREMENT.

SO THEY GOT TERMINATED, THEY GOT DEFAULTED.

SO IF THEY WANTED TO COME BACK IN, THEY WOULD HAVE TO START THE PROCESS OVER TO REAPPLY AND POST THE COLLATERAL.

THEY, BECAUSE THEY HAD SUCH MINIMAL ACTIVITY, THEY WERE ABLE TO JUST, UH, BE IN OUR BOOKS, BE IN OUR SYSTEMS WITH, YOU KNOW, MINIMAL AMOUNTS OF COLLATERAL.

UM, SO ESSENTIALLY ZERO, $0 PROBABLY, IN TERMS OF, YOU KNOW, UH, ANY OTHER QUESTIONS ON THAT? NOPE.

SO I THINK I MAY BE COVERED EVERYTHING.

I JUST, I, I PROMISE TO REFRESH ON THE NEXT SLIDE, BUT I, I THINK I KIND OF COVERED IT, UH, IN THAT CONVERSATION.

UM, WE, THIS, THE NPRR THAT CAUSES THE FAULTS ACTUALLY WAS RECOMMENDED FOR APPROVAL IN AUGUST OF LAST YEAR.

AND WE PURPOSELY TIMED IT THE IMPLEMENTATION TO APRIL, KIND OF BETWEEN THE, THE SEASONS, THE WINTER AND THE SUMMER SEASONS TO NOT CAUSE EXCESS STRESS ON MARKET PARTICIPANTS AS THEY'RE RAMPING UP FOR SUMMER, UM, ET CETERA.

WE SENT OUT, YOU KNOW, MULTIPLE MARKET NOTICES, UM, YOU CAN SEE LISTED HERE.

AND WE EVEN REACHED OUT INDIVIDUALLY TO COUNTERPARTIES THAT HAD, NOT, THAT WE WERE NOT SEEING EVIDENCE OF THEM PICKING UP THESE NOTICES AND POSTING THEIR INDEPENDENT AMOUNTS, UM, OR JUST POSTING AT THE LAST MINUTE.

SO WE HAD TO REACH OUT TO 67 COUNTERPARTIES, UM, TO POST THESE AMOUNTS, WHICH MOST OBVIOUSLY MET SINCE WE HAD FOUR DEFAULTS.

WE DIDN'T HAVE 67 DEFAULTS, FORTUNATELY.

QUESTIONS, COULD YOU JUST CLARIFY THE RA COMMENT AT THE BOTTOM OF THE PAGE? UM, I THINK THAT'S IN THE NEXT, THE NEXT PAGE MAY POSSIBLY I DON'T SEE YEAH, RIGHT THERE.

THE, NO, THE PRIOR ONE.

SO THIS IS A NEW, SO THIS IS NOT THE INDEPENDENT AMOUNT.

THIS IS THE NEW NPRR THAT, UH, I WAS GONNA GO OVER.

SO SORRY, I MAYBE MADE YOU ALL CARSICK THERE, CLICKING BACK AND FORTH.

SO WE HAD MY KEY TAKEAWAYS.

I TALKED ABOUT 1165, WHICH IS IS THE INDEPENDENT AMOUNT POSTINGS.

NOW WE HAVE A NEW NPR THAT'S ACTUALLY UP FOR VOTE TOMORROW, NPR 1205.

UM, AND THAT'S THE ONE I THINK YOU'RE ASKING ABOUT.

YES.

WITH THE DISTRICT COMMENTS? YES.

WE REQUIRE THE, UH, LOCAL, UH, BRANCH TO BE INDEPENDENTLY RATED AND NOT JUST RELY ON THE, ON THE RATING OF THE FOREIGN BANK, WHICH IS MORE IN LINE WITH THE OTHER ISOS AS WELL AND BEST PRACTICES.

UH, YES.

SO WE HAVE REQUIREMENTS ON, UH, LC ISSUING BANKS, DEPENDING ON THE SIZE OF THE BANK.

UM, AND YOUR, THE CREDIT RATING OF THE BANK, UH, DEPENDS ON HOW MUCH, UH, CREDIT THE BANK CAN ISSUE.

UH, AS AN LC.

UM, WE'VE BEEN REVIEWING OUR STANDARDS ON THE CREDIT, ON THE, UH, THE RATINGS FOR THESE BANKS, UM, AND COMPARING OURSELVES TO THE OTHER ISOS.

AND WE'VE CONCLUDED THAT WE SHOULD PROBABLY, UH, STRENGTHEN THE, THE CREDIT REQUIREMENTS, THE RATING REQUIREMENTS ON THESE BANKS.

WE KIND OF HAVE A, CURRENTLY WE HAVE A, UM, A, UH, BEST OF CREDIT RATING IF YOU HAVE AAA, IF YOU HAVE A RATING OF AAA MINUS OR BETTER, THEN WE WOULD, UM, ALLOW LETTERS OF CREDIT TO BE ISSUED FROM THIS BANK.

THAT'S NOT WHAT, NOT CONSIDERED A BEST PRACTICE AND NOT WHAT THE, WHAT MOST OF THE OTHER ISOS DO.

UM, IF ANY RATING IS BELOW A MINUS FOR THE BANK THAN THEY DON'T ALLOW LETTERS OF CREDIT TO BE ISSUED FROM THAT BANK.

SO THAT'S, THAT'S THE MAIN, UM, CHANGE BEING IMPLEMENTED IS NPR.

AND THAT'S TRUE FOR THE BANK ALSO ISSUING BANKS.

AND WE ALSO TAKE, UH, GUARANTEE BONDS FROM INSURANCE COMPANIES AND IT'S TRUE FOR THEM AS WELL.

SO WHAT THIS NPR DOES IS IT IMPLEMENTS THAT, THAT, UH, RATING POLICY CHANGE, AND I CAN SHOW A GRAPH IF YOU HAVE MORE QUESTIONS ON THIS.

THERE'S, IN THE APPENDIX, WE SHOW THE SIZES AND THE RATINGS AND HOW MUCH WE ALLOW THE LC ISSUING BANK TO, UH, TO ISSUE.

UM, AND WE'RE ALSO GETTING INTO MORE DETAILS 'CAUSE YOU'RE ASKING, UM, ALSO IF YOU HAVE A, UH, IF IT'S A FOREIGN BANK,

[02:45:01]

SO WITH THIS NPR, WE INCREASE THE, THE, THE, UM, THE, THE QUALITY REQUIREMENTS OF THESE BANKS.

SO WHAT THAT DOES IS THAT ACTUALLY WILL, UH, LESS BANKS ARE AVAILABLE FOR COUNTERPARTIES TO, TO GET, UH, LETTERS OF, TO GET LETTERS OF CREDIT FROM.

UM, WHEN WE, I'M GETTING TO YOUR QUESTION.

I'M SORRY.

I'M THE PUNCHLINE FOR TOO LONG HERE.

UM, WHEN WE, UH, WROTE THIS NPR WE, WE, THE, THE, THE, UM, THE LIMITS ON THESE BANKS ARE PRETTY STRINGENT.

AND IT'S A UNIQUE THING TO ERCOT ON HOW MUCH WE LIMIT THESE BANKS ON HOW MUCH, UH, ON THE LIMITS, ON THE LETTERS OF CREDIT.

MOST BANKS DON'T EVEN HAVE A LIMIT.

I THINK ISO NEW ENGLAND IS THE ONLY ONE THAT OTHER ONE THAT HAS A LIMIT.

SO WHEN WE WERE PRESENTING THIS NPR, WE ALSO WERE CONTEMPLATING, WELL, WE'RE INCREASING THE, THE, UH, LIST OF BANKS, UM, WE'RE INCREASING THE QUALITY STANDARDS ON THIS LIST OF BANKS LIKE AN ISSUE LCS, MAYBE WE SHOULD ALSO LOOSEN AND INCREASE THE AMOUNTS THEY CAN ISSUE.

AND WE WERE PROBABLY LIKE 51 49 WHEN WE WERE WRITING THIS NPR.

WE DIDN'T, WE DIDN'T REALLY HAVE A PROBLEM WITH IT.

WE, UH, BROUGHT THAT TO THE MARKET FOR DISCUSSION.

UM, THERE DIDN'T SEEM TO BE A WHOLE LOT OF, OF CONCERN, UM, IN THE MARKET.

SO WE SAID, WELL, WE JUST WANT TO INCLUDE THAT IN OUR NPRR FOR NOW, AND WE'LL JUST DEAL WITH THAT IF WE HAVE TO.

HOWEVER, UH, LUMINANT, UM, DID BRING THAT UP AFTER WE GOT LANGUAGE OUT THERE AND THE CONVERSATION, UM, UH, DEVELOPED A LITTLE MORE AND THEY ACT, THEY BASICALLY MADE THAT CHANGE, MADE THOSE COMMENTS TO OUR NPR, THEY, UM, INCREASED THE, UH, THE, THE THRESHOLDS THAT, UM, THESE LC ISSUING BANKS CAN ISSUE.

THEY DOUBLED THEM ON A PERCENTAGE BASIS.

THE HIGHEST PERCENTAGE BASIS IS 1% OF TANGIBLE NET WORTH.

SO THEY CHANGED IT FROM LIKE 1% TO 2%, WHICH IS STILL PRETTY CONSERVATIVE IN MY OPINION.

UM, SO THAT WAS THEIR COMMENTS.

WE DID NOT HAVE A, WE DID NOT HAVE AN ISSUE WITH THEM.

IT'S STILL MORE CONSERVATIVE THAN THE OTHER, UH, ISOS.

UM, AND WE STILL HAVE AN OVERALL 750 MILLION LIMIT PER BANK.

WE DID NOT DOUBLE THAT.

SO, UM, SORRY, MAYBE THAT WAS A LITTLE LONG GETTING TO YOUR, GETTING TO YOUR QUESTION THERE AND MAYBE THAT WAS A LOT OF, UH, INFORMATION THERE.

SO I'M HAPPY TO TRY AGAIN OR ANSWER QUESTIONS.

UM, WELL, I MEAN WE HAD THIS DISCUSSION IN THE LAST BOARD MEETING TOO, THAT IF YOU'RE GOING TO REDUCE THE SUPPLY OF BANKS, THEN IF TO KEEP THE SAME CREDIT SUPPLY, YOU GOTTA RAISE THAT LIMIT ARE YES.

IF YOU HAVE NOT RAISED THE LIMIT, ARE YOU ANTICIPATING ANY PROBLEMS? WELL, THAT'S, THANK YOU FOR ASKING THAT.

AND YES, I FORGOT WE DID.

I CAN'T REMEMBER IF WE HAD, IT WAS DETERMINED AT THE LAST MEETING OR IF WE JUST ALLUDED THAT THIS CHANGE WAS COMING.

BUT YES, WE WERE, WE WERE, WE DEFINITELY TELEGRAPHED THAT, THAT THIS WAS COMING IN TERMS OF AN ISSUE, I DON'T THINK IT'S A CRITICAL ISSUE.

UM, THIS HOPEFULLY ADDS SOME QUANTITATIVE, UH, BACKING TO THAT, BUT, UM, IT COULD BE A PROBLEM FOR SPECIFIC ENTITIES I GUESS.

SO WHAT I HAVE HERE IS, UM, A LIST OF THE TOP 10, UM, BASED ON, UM, SO A, A BANK HAS A LIMIT ON HOW MUCH EL LCS THEY CAN ISSUE LCS LETTER OF CREDIT, I'M GONNA START SAYING LCS NOW, UM, THAT UTILIZATION, THIS IS THE TOP 10 OF THE UTI OF THE, OF THE BANKS BASED ON THAT UTILIZATION.

SO YOU CAN SEE HERE LLOYD'S ON THE TOP, THEY ARE 174% UTILIZED.

SO THAT MEANS OF THEIR CAP, WHICH IS UH, UH, 327 MILLION, UM, THEY ARE ACTUALLY OVEREXTENDED IN THEIR LCS THIS PROBLEM, THIS WILL OLI THE, SO WHEN WE, UH, CHANGE THESE LIMITS, THEY LLOYD'S WILL NO LONGER WILL MOST LIKELY NO LONGER BE OVER ALLOCATED, RIGHT? UM, SO IT WILL RESOLVE THAT ISSUE.

NOW YOU'RE SEEING RED AND THEY'RE 174% OVER ALLOCATED.

WHY ISN'T THIS LIKE A MAJOR, YOU KNOW, FOUR ALARM ISSUE? I DUNNO IF YOU'RE THINKING THAT OR NOT, BUT, UM, THIS IS ACTUALLY KIND OF BY DESIGN.

SO THIS CAP IS NOT MEANT TO BE A HARD CAP, IT'S MEANT TO BE A SOFT CAP.

AND THE WHOLE PURPOSE OF THIS MECHANISM, IT'S JUST TO KEEP THE LCS FROM BEING CONCENTRATED IN ONE BANK.

IF ONE BANK GETS, GETS TOO MANY LCS, THIS CAP COMES INTO PLAY AND THEN THE COUNTERPARTIES HAVE TO GO FIND CREDIT ELSEWHERE.

AND SO THE WAY, THE WAY IT'S DESIGNED IS ONCE YOU HIT THE CAP, THEN WE DON'T ALLOW NEW LETTERS OF CREDIT TO BE ISSUED, BUT WE WILL ALLOW AMENDMENTS TO EXISTING LCS.

SO THEY CAN STILL INCREASE.

IF YOU ALREADY HAVE A LETTER OF CREDIT, YOU CAN STILL INCREASE YOUR LC.

AND THEN IF THAT GOES ON FOR FOUR MONTHS, THEN WE STOP THE AMENDMENTS.

SO IT'S KIND OF LIKE A, A, A GRADUALLY INCREASING FRICTION TO, UM, HOW MUCH LCS YOU CAN GET

[02:50:01]

FROM THE BANK.

AND THAT'S BY DESIGN.

UM, SO YES, THIS, SO YOU WOULDN'T SEE THESE RED BOXES AFTER WE IMPLEMENT THIS NPR MOST LIKELY, UNLESS THEY CHANGE.

OTHER THINGS CHANGE.

BUT, UM, IT'LL OPEN UP SOME MORE HEADROOM AT THESE BANKS.

BUT ALSO THE WAY YOU CALCULATE THIS YEAR AGGREGATING THE VARIOUS UTILIZATION FROM VARIOUS MARKET PARTICIPANTS.

YES, ALL THE LCS ISSUED TO ALL COUNTERPARTIES ERCOT COUNTERPARTIES FOR THAT DAY.

AND SO DOES A MARKET PARTICIPANT KNOW WHEN YOU'RE KIND OF TAPPED DOWN ON PARTICULAR BANK? YES, WE ACTUALLY ISSUE A REPORT THAT LOOKS PRETTY MUCH JUST LIKE THIS DAILY TO SHOW THE UTILIZATION OF THE VARIOUS BANKS.

AND UM, LIKE I SAID, THIS IS ONLY SHOWING THE TOP 10.

YOU CAN SEE IN THE BOTTOM THERE OVERALL FOR ALL THE BANKS THAT ARE LISTED IN OUR REPORT, WE'RE AT 30% UTILIZED RIGHT NOW.

SO THERE STILL IS A LOT OF ROOM WITH THESE BANKS FOR PEOPLE TO GO FIND LCS, BUT I KNOW CHANGING OF GOING FROM ONE BANK TO ANOTHER IS NOT TRIVIAL, YOU KNOW.

OKAY, SO ANY QUESTIONS? MORE QUESTIONS? OKAY.

SO THIS NPR IS, I DON'T THINK, UH, CONTROVERSIAL OR THERE'S REALLY NO POLICY CHANGES HERE, BUT IT IS A CREDIT NPRR.

SO BRINGING IT TO YOUR ATTENTION, BASICALLY WE HAVE, YOU KNOW, TO, UH, PARTICIPATE IN THE DAY AHEAD MARKET.

THERE'S THESE CREDIT CHECKS THAT OCCUR BEFORE THE DAY AHEAD MARKET CLEARS TO MAKE SURE WHAT YOU'RE SIGNING UP FOR WHICH YOU'RE BIDDING AND OFFERING IT ON.

YOU ACTUALLY HAVE ENOUGH COLLATERAL TO BACK THAT UP.

THERE'S SOME, THESE, THESE CALCULATIONS ARE SPECIFIED IN THE PROTOCOLS, THESE FORMULAS AND THESE, THESE RULES ON HOW THESE CALCULATIONS OCCUR.

UM, WE HAD A MEMBER FROM THE DAM TEAM WAS GOING THROUGH THAT SECTION, THE DAY HEAD MARKET TEAM WAS GOING THROUGH THAT SECTION AND JUST FELT THAT SOME OF THE LANGUAGE WAS CONFUSING.

HE GETS SOME QUESTIONS ON CERTAIN AREAS, SO YOU WANTED TO CLEAN THAT UP, A BUNCH OF EYEBALLS.

BUT ON THAT SECTION WE FOUND SOME OTHER CLEANUPS.

BUT BASICALLY THIS IS A CLEANUP NPRR TO, TO BETTER SPECIFY WHAT'S GOING ON WITH THESE CALCULATIONS, UM, AND TO MATCH 'EM UP WITH THE SYSTEM.

THERE'S NO POLICY CHANGES BEING PROPOSED IN THIS NPRR.

SO, UM, I DON'T ANTICIPATE TOO MANY PROBLEMS THERE, BUT IS CREDIT RELATED.

SO I'M OBLIGATED TO BRING IT UP.

SO ANY MORE QUESTIONS? OOPS.

[8.5 Revision Request Status Update ]

SO NEXT WE HAVE ANN BOURNE.

WE'LL PRESENT THE AGENDA ITEM 8.5, THE REVISION REQUEST STATUS UPDATE.

I, ALL RIGHT, GOOD AFTERNOON, ANNE BORON.

I'M GONNA GIVE YOU A QUICK REVISION REQUEST STATUS UPDATE.

UM, WE HAVE FOUR REVISION REQUESTS FOR, UM, GO THIS WAY.

THERE WE GO.

FOUR REVISION REQUESTS FOR THE APRIL BOARD CONSIDERATION.

THIS IS A LITTLE LESS VOLUME THAN WE USUALLY DO, BUT WE'RE DEFINITELY NOT LACKING CONTENT.

UM, YOU'VE DISCUSSED NOGA 2 45 AND 1197 EARLIER TODAY SINCE THEY HAD OPPOSING VOTES COMING OUT OF TAC.

AND THERE ARE TWO MORE ON THE CONSENT AGENDA TOMORROW.

UM, AUSTIN WENT OVER NPR 1205 AND THEN WE ALSO HAVE RM GR 1 77.

UM, SO FROM THE FEBRUARY BOARD MEETING WE'VE HAD 11 NEW REVISION REQUESTS THAT HAVE BEEN FILED AND THEN 19 THAT WERE APPROVED AT THE PUCI THINK LAST WEEK.

SO THAT PUTS US AT 49 REVISION REQUESTS AND PROCESS RIGHT NOW.

AND THEN YOU CAN SEE THE BUDGETARY IMPACT DETAILS, THE SPONSORSHIP AND REASONS FOR REVISION.

SO I'M GONNA HOP DOWN TO THE AGING REVISION REQUESTS AND PROCESS.

SO THESE ARE THE ONES THAT HAVE BEEN TABLED FOR OVER SEVEN MONTHS.

WE HAVE, I BELIEVE, 14 REVISION REQUESTS ON THE AGING LIST RIGHT NOW.

I WILL SAY THAT NPR 1162 WAS WITHDRAWN LAST WEEK, SO WE CAN TAKE THAT OFF THE LIST.

AND THEN WE ALSO HAVE SEVERAL SETS OF RECENT COMMENTS THAT WERE FILED ON NPR 1188 AND 1190.

SO WE'RE HOPING TO GET SOME TRACTION ON THOSE AT SUBCOMMITTEE MEETINGS NEXT MONTH.

AND THEN TO DATE, THE BOARD AND PUC HAVE APPROVED 29 REVISION REQUESTS SO FAR THIS YEAR.

IN YOUR OPINION, WHICH ONES ARE JUSTIFIED NOT MOVING THROUGH THE SYSTEM AND GETTING STUCK AND TABLED? UM, SO ALSO LIKE 9 56, I THINK WE'RE WAITING ON, UM, LEG LE LEGISLATION.

I'M SORRY.

UM, THERE'S AN ONGOING LAWSUIT ON THAT ONE.

UM, PGR 73 IS RELATED TO 9 56.

I THINK.

UM, THERE'S STILL CONTINUED DISCUSSION AT THE RELIABILITY OPERATIONS SUBCOMMITTEE AND QUITE A FEW OF THEM.

AND THEN 1191, THAT'S ACTUALLY A SUITE

[02:55:01]

OF NPR, SO YOU'LL SEE NUMBER 2 56, 36 1 11 ALL RELATED TOGETHER.

SO THOSE SOMETIMES TAKE A LITTLE BIT LONGER TO GET THROUGH THE PROCESS SINCE DIFFERENT SUBCOMMITTEES ARE LOOKING AT THEM AND PROVIDING THEIR INPUT.

OKAY, WELL LET ME ASK IT DIFFERENTLY.

UH, 2 45 STAYED IN THE TECH PROCESS TOO LONG AND, UH, IS THERE, ARE THERE ANY NPRS THAT ARE STUCK IN THE PROCESS THAT WE NEED TO ACCELERATE AND HIGHLIGHT TO OUR STAKEHOLDERS THAT ARE OF LIKE EQUAL IMPORTANCE TO RELIABILITY OF THE GRID? UM, I DON'T THINK ANY OF THEM ARE ELEVATED TO THE LEVEL OF NO, 2 45 RIGHT NOW.

UM, POSSIBLY UM, AND MAYBE NPR 10 70, BUT I THINK WE'RE WAITING ON A PC RULE MAKING FOR THAT ONE AS WELL.

UM, BUT THAT WOULD PROBABLY GET A LOT OF DISCUSSION THERE.

ANY OTHER QUESTIONS? ANY OTHER QUESTIONS FOR ANN? ALRIGHT, THANK YOU ANN.