[1. Call General Session to Order]
[00:00:02]
GOOD, GOOD MORNING, MEMBERS OF THE ERCOT BOARD OF DIRECTORS AND GUESTS.I AM PAUL FOSTER ERCOT, BOARD CHAIR.
WELCOME TO THE APRIL 23RD, 2024 BOARD OF DIRECTORS MEETING.
I HEREBY CALL THIS MEETING TO ORDER.
THIS MEETING IS BEING WEBCAST LIVE TO THE PUBLIC ON ERCOT WEBSITE BOARD MEMBER BOB FLEXON IS JOINING TODAY'S MEETING BY TELECONFERENCE, UH, AND ERCOT LEGAL HAS CONFIRMED THAT QUORUM IN PERSON IS PRESENT.
UH, BEFORE WE BEGIN, I'D LIKE TO ASK IF PUC CHAIR GLEASON WOULD LIKE TO CALL AN OPEN MEETING OF THE PUBLIC UTILITY COMMISSION OF TEXAS.
THIS MEETING OF THE PUBLIC UTILITY COMMISSION OF TEXAS WILL COME TO ORDER TO CONSIDER MATTERS THAT HAVE BEEN DULY POSTED WITH THE SECRETARY OF STATE FOR TODAY, APRIL 23RD, 2024.
AND BEFORE WE GET GOING, I'D LIKE TO HIGHLIGHT THE, THAT THE ANTITRUST ADMONITION AND SECURITY MAP ARE INCLUDED WITH POSTED MEETING MATERIALS.
THE FIRST ORDER OF BUSINESS ON TODAY'S AGENDA IS ITEM TWO.
NOTICE OF PUBLIC COMMENT, IF ANY.
TODAY'S MEETING AGENDA WAS POSTED PUBLICLY ON APRIL 16TH AND PROVIDED INSTRUCTIONS FOR THE PUBLIC FOR COMMENTING IN PERSON.
UH, TO DATE, NO ONE HAS ASKED TO COMMENT.
IS THAT STILL THE CASE? THAT IS CORRECT, CHAIR.
[3. Consent Agenda]
IS AGENDA ITEM THREE.UH, ASK CHAD TO PROVIDE THE BUDGET IMPACTS OF THE REVISION REQUESTS.
THERE ARE TWO REVISION REQUESTS ON THE CONSENT AGENDA.
SO IT'S A LIGHT CONSENT AGENDA.
NO STAFFING IMPACTS FOR EITHER ONE.
UH, NPR 1205 DOES HAVE AN ERCOT BUDGET IMPACT FROM 80,000 TO 120,000, WHICH PRIMARILY IMPACTS OUR CREDIT MANAGEMENT SYSTEM.
HAPPY TO ANSWER ANY QUESTIONS.
UM, WITH THAT, DOES ANY BOARD MEMBER WISH TO DISCUSS OR REMOVE ANY ITEM FROM THE CONSENT AGENDA? UH, HEARING NONE.
IF THERE'S, IF THERE'S NO FURTHER DISCUSSION, I'LL ENTERTAIN A MOTION TO APPROVE THE CONSENT AGENDA AS PRESENTED.
ALL IN FAVOR? ANY OPPOSED? SO THAT PASSES.
[4. February 27, 2024 General Session Meeting Minutes]
NEXT IS AGENDA ITEM FOUR, FEBRUARY 27TH.UH, GENERAL SESSION MEETING MINUTES.
THERE'S A DRAFT IN THE MEETING MATERIALS.
DOES ANYONE HAVE ANY COMMENTS OR WISH TO MAKE A MOTION? I'LL MAKE A MOTION TO APPROVE THE MINUTES.
[5. CEO Update]
AGENDA ITEM FIVE IS THE CEO UPDATE AND PABLO IS, LOOKS LIKE HE'S UP THERE AND READY TO GO.WELCOME TO THE, UH, BOARD MEETING, AND THANK YOU, UH, THANK YOU SO MUCH FOR YOUR TIME TODAY, AS WELL AS YOUR CONTINUED ENGAGEMENT AND THE IMPORTANT WORK THAT WE ARE UNDERTAKING HERE AT ERCOT.
UM, I'M GONNA SPEND MY TIME WITH YOU THIS MORNING REALLY ON ONE KEY THEME, THE GROWTH THAT WE ARE SEEING IN TEXAS AND THE OPPORTUNITY AHEAD TO SHAPE OUR PLANNING IN ORDER TO MEET THE RAPIDLY ACCELERATING DEMAND GROWTH THAT WE'RE EXPECTING IN THE COMING YEARS.
ANYONE WHO'S BEEN FOLLOWING THE ELECTRIC INDUSTRY HERE IN TEXAS OR NATIONALLY IS HEARING DISCUSSIONS OF INSATIABLE DE DEMAND FOR ELECTRICITY TO FUEL THE GROWTH OF AI AND DATA CENTERS GLOBALLY.
HOWEVER, THE US IS EXPECTED TO CARRY A DISPROPORTIONATE AMOUNT OF THAT GROWTH.
BY SOME ESTIMATES, MCKINSEY HAS REPORTED THAT APPROXIMATELY 40% OF THE GLOBAL GROWTH IN DATA CENTERS AND AI WILL LIKELY HAPPEN IN THE UNITED STATES.
BUT THERE IS MORE TO THE STORY THAN JUST AI AND DATA CENTERS HERE IN TEXAS.
WE ARE SEEING INDUSTRIAL ELECTRIFICATION IN THE OIL AND GAS INDUSTRIES PRESENTING TREMENDOUS DEMAND GROWTH ON THE, IN THE PLANNING HORIZON.
WE'RE ALSO JUST STARTING TO SEE THE POTENTIAL IMPACTS OF THE HYDROGEN ECONOMY, WHETHER IT'S THE PRODUCTION OF GREEN HYDROGEN RELATED CHEMICALS FOR AMMONIA PRODUCTION AND OTHER INDUSTRIAL PROCESSES STARTING TO SHOW UP IN THE DEMAND FORECAST AS WELL.
THE INFLATION REDUCTION ACT HAS PROVIDED ADDITIONAL FUEL FOR THIS TYPE OF INDUSTRIAL GROWTH, AND THE FULL EFFECTS OF IT STILL HAVE NOT YET BEEN REALIZED.
AND OF COURSE, WE'VE BEEN TALKING FOR YEARS ABOUT THE INCREDIBLE ECONOMIC GROWTH THAT TEXAS HAS SEEN IN CONTRAST TO MANY OTHER REGIONS IN THE UNITED STATES.
AND THE COMBINED EFFECT OF ALL OF THIS IS BEGINNING TO ILLUMINATE A PICTURE THAT LOOKS VERY DIFFERENT THAN WHAT WE HAVE SEEN IN PRIOR
[00:05:01]
FORECASTS.AS A RESULT, ERCOT IS ADAPTING AND ENTRY IN A NEW ERA OF PLANNING.
THIS NEW ERA OF PLANNING IS GONNA FOCUS ON HOW THE INDUSTRY CAN WORK TOGETHER TO ADAPT OUR CURRENT PROCESSES TO BETTER SERVE THE NEEDS OF A RAPIDLY CHANGING LOAD PICTURE AND A SIGNIFICANTLY LARGER LOAD PICTURE THAN PRIOR FORECASTS.
WHILE THE GROWTH PICTURE IS SIGNIFICANT AND IT WILL PRESENT SOME CHALLENGES, IT'S ALSO A TREMENDOUS OPPORTUNITY FOR US TO FURTHER ENERGY INVESTMENTS IN, IN, IN TEXAS.
IT'S A GREAT OPPORTUNITY FOR THE FLEXIBILITY AND THE AGILITY OF THE ERCOT MARKET DESIGN TO BE ABLE TO EVOLVE AND ADAPT TO ENABLE THIS GROWTH.
AND FUNDAMENTALLY, IT'S AN OPPORTUNITY TO BE NOT ONLY A PART, BUT A DRIVER IN THE ECONOMIC ENGINE THAT'S POWERING OUR NATIONAL ECONOMY.
IN OUR PREVIOUS PLANNING RULES, ERCOT WAS NOT ABLE TO FACTOR IN CERTAIN TYPES OF LOADS INTO OUR RESOURCE TRANSMISSION.
OUR REGIONAL TRANSMISSION PLANNING STUDIES LOAD THAT WAS NOT FINANCIALLY COMMITTED OR SIGNED COULD NOT BE CONSIDERED.
UH, WHEN WE DID THOSE, WHEN WE PUT THOSE PROJECTIONS TOGETHER.
HOWEVER, IN WITH THE PASSAGE OF HOUSE BILL 50 66, IN THE 88TH LEGISLATIVE SESSION, IT CHANGED THAT AND ENABLED US TO BE ABLE TO INCLUDE AND REQUIRED US TO INCLUDE PROSPECTIVE LOAD THAT WAS IDENTIFIED BY TRANSMISSION SERVICE PROVIDERS ACROSS THE STATE.
SO WHAT THIS HAS DONE IS IT'S LED TO SIGNIFICANT INCREASES IN THE AMOUNT OF LARGE LOADS THAT WE NOW SEE IN THE FIVE YEAR FORECAST AHEAD OF US.
SPECIFICALLY SIGNIFICANT INCREASES IN THE CRYPTO MINING IN HYDROGEN AND HYDROGEN RELATED MANUFACTURING IN DATA CENTERS, TRADITIONAL AS WELL AS POTENTIALLY AI AND OVERALL ELECTRIFICATION OF INDUSTRIAL PROCESSES ACROSS MANY INDUSTRIES.
THIS ILLUSTRATION ON THIS SLIDE IS INTENDED TO SHOW THAT THE VARIOUS LOADS THAT WE HAVE BEEN TALKING ABOUT IN PARTS THROUGHOUT DIFFERENT CONVERSATIONS ARE RELATED IN A LOT OF WAYS AND HAVE OVERLAP.
THE PERMIAN LOAD THAT WE'VE TALKED ABOUT, WHICH HAS COME OUTTA THE PERMIAN STUDY, THE LARGE LOADS THAT WE'VE BEEN DISCUSSING THAT ARE COMING ONTO THE SYSTEM, ALL OR IN PART ARE PART OF THIS REGIONAL TRANSMISSION PLAN THAT REFLECTS WHAT THE OUTLOOK LOOKS LIKE FOR THE NEXT FIVE YEARS THROUGH 2030.
THE PLAN THAT WE ARE GONNA BE USING COMING OUT OF THIS STUDY WORK HAS A LOAD GROWTH PROJECTION OF ABOUT 152 GIGAWATTS BY 2030 WITHIN THIS REGIONAL TRANSMISSION PLAN THAT IS ABOUT 40 GIGAWATTS HIGHER THAN THE SAME FORECAST A YEAR AGO, WHICH IS A TREMENDOUS, TREMENDOUS GROWTH.
SO THINKING ABOUT THAT LOAD PICTURE, I WANTED TO SHARE THE VIEW THAT WE'VE TALKED ABOUT BEFORE ABOUT RESOURCE ADEQUACY.
YOU'VE SEEN THIS SLIDE AND IT REFLECTS THE GENERATION MIX THAT CONSISTS OF DIFFERENT RESOURCE TYPES, DISPATCHABLE GENERATION, SOLAR, WIND, AND STORAGE.
AND WHAT IT SHOWS IS THE OPPORTUNITY AHEAD OF US.
YOU LOOK AT THE GENERATION INTERCONNECTION QUEUE, AND WE HAVE A PRETTY GOOD IDEA OF WHAT IS AHEAD OF US.
AND THIS IS THE OPPORTUNITY TO WORK TOGETHER TO FIGURE OUT WHAT THAT RESOURCE MIX IS GONNA BE IN ORDER TO CREATE THE BALANCED GENERATION AND DEMAND RESOURCE SUPPLY TO MEET THIS GROWING LOAD.
SIMILARLY, WHEN YOU LOOK AT THIS VIEW, WHICH WE HAVE LOOKED AT BEFORE, THIS IS THE VIEW OF THE GENERATION INTERCONNECTION QUEUE IN ERCOT.
AND THE PICTURE, WHILE IT'S SIMILAR, WHERE WE SEE ABOUT 85% OF THE EXPRESSED INTEREST FOR GENERATION SUPPLY IN TEXAS CONTINUING TO BE MADE UP OF SOLAR AND BATTERY RESOURCES, GAS INTEREST IN THE STATE HAS MORE THAN DOUBLED IN THE LAST YEAR.
AND I DON'T BELIEVE THAT WE YET ARE REFLECTING THE FULL EFFECTS OF THE TEXAS ENERGY FUND INTO ALL FACETS OF THIS QUEUE.
AND WHEN YOU LOOK AT THIS THROUGH THE LENS OF DISPATCHABLE GENERATION, WE'VE SEEN NEARLY 4,000 MEGAWATTS OF BOTH NATURAL GAS AND ENERGY STORAGE RESOURCES CONNECT INTO THE ERCOT GRID IN THE LAST 12 MONTHS.
AND WE EXPECT OVER THE NEXT 12 MONTHS TO SEE AN ADDITIONAL 7,000 MEGAWATTS OF BOTH NATURAL GAS AND UH, ENERGY STORAGE RESOURCES TO CONNECT AS WELL.
SO WE'RE SEEING MOVEMENT IN THE DISPATCHABLE GENERATION FRONT, AND IT'S, THAT PICTURE IS STARTING TO CLARIFY AS WE START TO SEE SOME OF THESE TOOLS BECOME AVAILABLE.
I WANNA DISCUSS A LITTLE BIT SOME OF THE CHALLENGES THAT THIS CREATES, BECAUSE WHEN YOU LOOK AT SYSTEM PLANNING IN A SYSTEM LIKE ERCOT, IT REALLY HAS THREE CORE PARTS.
YOU'VE GOT YOUR GENERATION, YOUR LOAD, AND YOUR TRANSMISSION PLANNING.
AND WE'RE GONNA HAVE TO ADAPT ALL THREE OF THESE TOGETHER.
[00:10:01]
WE HAVE VERY EFFECTIVE METHODS TO PLAN AND INTEGRATE GENERATION AND LOAD INTO THE ERCOT SYSTEM.METHODS THAT I BELIEVE ARE WELL, WELL-SUITED TO THE PACE OF GROWTH THAT WE ARE EXPERIENCING TODAY AND EXPECT TO EXPERIENCE GOING FORWARD.
HOWEVER, AS THE SUPPLY RESOURCE MIX CHANGE IS ONE TREND THAT WE HAVE SEEN OVER TIME, WHICH IS THE TREND OF GENERATION SITING BEING FURTHER AWAY FROM LOAD THAN WHAT WE USED TO SEE 20 OR 30 YEARS AGO.
THAT TREND CONTINUES TODAY, AND AS RESOURCES, THERMAL DISPATCHABLE RESOURCES RETIRE, IT TENDS TO BE THE OLDER CA COAL AND OLDER GAS UNITS THAT ARE THE ONES THAT ARE, WERE DEVELOPED CLOSER TO LOAD THAT ARE RETIRING.
SO BOTH OF THESE REALITIES, IN ADDITION TO THE LOAD GROWTH WE'RE DISCUSSING, IS DISCUSSING IS CREATING AN INCREMENTAL INCREASE IN THE DEMAND FOR TRANSMISSION IN THE STATE OF TEXAS.
AND ADDITIONALLY, THE GRID THAT WE HAVE TODAY IS BEING LOADED MORE AND MORE EVEN IN OFF PEAK TIMES.
THIS HAS LED TO AN INCREASE IN GENERATION IN, UM, UH, GENERIC TRANSMISSION CONSTRAINTS, GTCS, AS WELL AS IN INTER INTERCONNECTION RELIABILITY, OPERATING LIMITS, IOLS, AND THE GROWING DIFFICULTY THAT WE'VE SEEN RECENTLY IN ACCOMMODATING THE MANY TRANSMISSION OUTAGES THAT ARE BEING REQUESTED IN ORDER TO BE ABLE TO PERFORM BOTH MAINTENANCE AND THE INTERCONNECTION OF NEW GENERATORS AND CUSTOMERS.
IN ADDITION TO THAT, TRANSMISSION STILL TAKES ANYWHERE FROM THREE TO FIVE OR SIX YEARS TO DEVELOP IN THE STATE OF TEXAS.
AND WE'LL TALK ABOUT THAT A LITTLE MORE IN A MINUTE.
TURNING TO GENERATION AND LOAD, WE HAVE EFFECTIVE PROCESSES, UH, FOR INTEGRATING GENERATION RESOURCES.
WE'VE GOT AN EXISTING SMALL GENERATION PROCESS TODAY FOR GENERATORS THAT ARE UNDER 10 MEGAWATTS OF SIZE.
WE HAVE A MUCH EXPEDITED PROCESS TO GET, GET THEM CONNECTED INTO THE GRID QUICKLY.
WE'RE LOOKING INTO A SPECIFIC PROCESS THAT REFLECTS THE UNIQUE CHARACTERISTICS OF BATTERY STORAGE RESOURCES SO THAT WE CAN, UH, STREAMLINE THAT PROCESS AND HELP THEM GET CONNECTED INTO THE GRID MORE QUICKLY.
MANY OF YOU MAY HAVE READ OR HEARD ABOUT, UH, THE METHODOLOGY THAT ERCOT USES FOR CONNECTING GENERATION CALLED CONNECT AND MANAGE.
IT HAS BEEN RECENTLY LAUDED IN, UH, TRADE PRESS AS DISCUSSIONS HAVE BEEN EVOLVING AROUND THE COUNTRY, UH, RELATED TO THE CHALLENGES AND GETTING RESOURCES CONNECTED INTO GRIDS THROUGHOUT THE US.
THE CONNECT AND MANAGE PROCESS IS ONE WHERE WE ESSENTIALLY WILL ALLOW A GENERATOR IF IT CAN PASS THE STABILITY STUDIES IN THE ERCOT REGION CAN GO AHEAD AND CONNECT, AND THE, IF THERE ARE POTENTIAL LIMITS IN WHAT IT'S GONNA BE ABLE TO OUTPUT BASED ON CONGESTION ON THE GRID, IT CAN BE CURTAILED, BUT IT ALLOWS IT TO GET INTO THE SYSTEM MORE QUICKLY.
THEY DON'T, WE DON'T HAVE TO RUN STUDIES THAT SOLVE ALL OF THE CONGESTION ISSUES AROUND A NEW GENERATOR AND THEN UPGRADE THE SYSTEM WITH TRANSMISSION BEFORE WE LET A GENERATOR CONNECT INTO THE SYSTEM.
AND OTHER REGIONS DO HAVE PROCESSES THAT, THAT REFLECT THAT MORE COMPLEX AND LONGER TERM METHODOLOGY.
OUR LARGE LOAD IN CONNECTION PROCESS AS WE LOOK AT THAT, UM, IS EVOLVING.
WE'RE WORKING VERY CLOSELY WITH TRANSMISSION SERVICE PROVIDERS TO, UH, TO HELP FACILITATE GETTING THE INFORMATION THAT WE NEED IN ORDER TO BETTER OPERATE THE GRID EFFECTIVELY WITH THE RAPIDLY CHANGING LOAD MIX, WE ALSO HAVE DISTRIBUTED ENERGY RESOURCES THAT ARE EVOLVING.
WE HAVE NEW LEGISLATION THAT WAS JUST PASSED AS WELL IN THIS LAST SESSION THAT OPENS THE DOOR TO GETTING MUCH IMPROVED VISIBILITY TO DISTRIBUTION RESOURCES THAT ARE GONNA HELP US TO EVOLVE OUR TOOLS AND OUR PROCESSES TO INCORPORATE THEM MORE QUICKLY INTO OUR MODELS AND OUR STUDIES AND ENABLE US TO LEVERAGE THEM AS GRID RESOURCES.
AND THEN OF COURSE, DEMAND RESPONSE.
WE'VE TALKED ABOUT THE THIRD LEG OF THE, OF THE SUPPLY STOOL HERE.
DEMAND RESPONSE, WHICH CONTINUES TO BE DISCUSSED AS A VERY HIGHLY EFFECTIVE AND A COST EFFICIENT TOOL TO BE ABLE TO SUPPORT A MORE RAPID INTEGRATION OF LARGE LOADS INTO THE SYSTEM AND TO HELP MANAGE PEAK RELIABILITY DEMANDS.
WE'VE BEEN WORKING CLOSELY WITH THE PUBLIC UTILITY COMMISSION AND WORKING WITH TEXAS A AND M ON A, ON A STUDY TO EVALUATE BOTH DEMAND RESPONSE AND ENERGY EFFICIENCY TO HELP IDENTIFY THE FULL POTENTIAL IN THIS SPACE.
AND WE WILL BE INITIATING WORKSHOPS THIS YEAR TO DISCUSS SOME OF THE BEST PATHWAYS TO HELP SCALE THOSE POTENTIAL CAPABILITIES IN THE NEAR FUTURE.
AND THEN ALSO IN ADDITION, I WANNA MENTION 'CAUSE IT'S RELEVANT TO, SO THE EVOLVING AND INNOVATIVE WORK THAT WE'RE DOING IN IN ERCOT, THE TEXAS ADVANCED NUCLEAR TASK FORCE, WHICH HAS BEEN CHAIRED BY COMMISSIONER GLO FELTY AND SUPPORTED BY LEADERSHIP ACROSS THE STATE IN BOTH IN HIGHER EDUCATION, THE ENERGY INDUSTRY, INDUSTRIAL ENERGY, AND, UM, ENGINEERING PROCUREMENT CONSTRUCTION FIRMS, LOCAL STATE AND FEDERAL GOVERNMENT LEADERS, UM, AND AGENCIES HAVE ALL BEEN WORKING TOGETHER TO MAKE PROGRESS OVER THE LAST SEVERAL MONTHS AND HAVE MADE AN INCREDIBLE LEAPS FORWARD IN TERMS OF EVALUATING THE PATHWAYS FOR ADVANCING NUCLEAR IN TEXAS.
I'M PRIVILEGED TO CO-LEAD THE REGULATORY AND ERCOT MARKET DESIGN SUBCOMMITTEE, AND ALL
[00:15:01]
OF US ARE WORKING ON THOSE PATHWAYS TO HELP REMOVE BARRIERS TO HELP FACILITATE TEXAS BECOMING ONE OF THE NATION'S GLOBAL LEADERS IN THE DEVELOPMENT OF ADVANCED NUCLEAR REACTORS, WHICH REALLY HAVE THE POTENTIAL TO CONTINUE TO PROVIDE AND SUPPORT RELIABLE, AFFORDABLE, AND CLEAN ENERGY FOR TEXAS' LONG-TERM GROWTH, AS WELL AS LONG-TERM ENERGY SECURITY AS IT RELATES TO TRANSMISSION.THIS IS WHERE A LOT MORE OF THE OPPORTUNITIES LIE.
WE'VE EX WE'VE RECOGNIZED THAT THE ECONOMIC GROWTH IN TEXAS THAT WE'VE BEEN EXPERIENCING OUR TRANSMISSION PLOT, OUR PRO TRANSMISSION PROCESSES HAVE BEGUN EVOLVING.
AND THIS IS THE AREA WHERE WE NEED TO CONTINUE TO FOCUS, UH, THIS EVOLUTION AND WHERE CONSIDERABLE CHANGES ARE STILL NEEDED.
AS WE'VE SEEN THE ABILITY FOR LOAD AND GENERATION TO DEVELOP AND CONNECT IN A MATTER OF MONTHS VERSUS MULTIPLE YEARS.
WE NEED TO ACCELERATE ASPECTS OF OUR PLANNING PROCESSES AND BE ABLE TO LOOK FURTHER INTO THE FUTURE AND ANTICIPATE WHAT'S COMING BECAUSE IT STILL TAKES THREE TO SIX YEARS TO BUILD TRANSMISSION FACILITIES AND INFRASTRUCTURE.
WE'RE WORKING VERY CLOSELY WITH TRANSMISSION SERVICE PROVIDERS TO HELP IDENTIFY OPPORTUNITIES TO IMPROVE AND ACCELERATE THOSE PLANNING METHODOLOGIES.
ONE OF THE CONCEPTS THAT WE'LL TALK MORE ABOUT IN THE COMING MONTHS IS THE CONCEPT OF GENERATION HUBS PLANNING STUDIES THAT WE DO NEED TO BE ABLE TO SOLVE AND BALANCE LOAD GROWTH WITH GENERATION.
THE CURRENT LOAD FORECAST THAT WE SEE IN THIS RTP ACTUALLY EXCEEDS WHAT OUR CURRENT PROTOCOLS ALLOW US TO UTILIZE IN TERMS OF REGARDING FUTURE GENERATION EXPECTATIONS.
AND SO WE'RE WORKING ON WAYS TO ADAPT THIS TO BE ABLE TO SHOW WHERE GENERATION WOULD IDEALLY BE OPTIMALLY PLACED IN ORDER TO HELP SOLVE SOME OF THE FUTURE LOAD GROWTH NEEDS, AND TO OPTIMIZE THE TRANSMISSION INVESTMENTS AROUND THAT WITH TREMENDOUS LOAD GROWTH.
COUPLED WITH THE UNCERTAINTY OF THE TYPE AND LOCATION OF GENERATION THAT CAN COME AND GET BUILT IN ERCOT, THERE COULD BE POTENTIAL SIGNIFICANT BENEFITS IN LOOKING AT A HIGHER VOLTAGE THAN WHAT WE HAVE HISTORICALLY STUDIED IN TEXAS.
WE'RE NOW UNDERTAKING A STUDY OF HOW A 7 65 KV SYSTEM COULD SUPPORT LONGER TERM GROWTH PROJECTIONS, UM, MORE EFFICIENTLY AND WITH LOWER COST OVER TIME THAN WHAT OUR CURRENT 3 45 KV PLANNING NORMS HAVE BEEN.
I ALSO WANNA INTRODUCE OUR CA THAT OUR CA TO OUR CAPABILITIES THAT ENABLING TRANSMISSION OUTAGES TO BE SCHEDULED YEARS IN ADVANCE COULD PROVIDE, UH, SIGNIFICANT BENEFIT TO THE PLANNING AND STUDYING AND MODELING THAT WE DO.
BECAUSE AS WE LOOK TO BEING ABLE TO ACCOMMODATE WHAT TRANSMISSION OPERATORS NEED AND WHAT GENERATORS NEED IN ORDER TO BE ABLE TO PLAN THEIR OUTAGES AND THEIR MAINTENANCE, THERE COULD BE SIGNIFICANT BENEFIT IF WE COULD DO SOME OF THAT OUTAGE PLANNING WITH A MULTI-YEAR VIEW VERSUS, UH, AN INT INTER-ANNUAL VIEW.
AND THEN ONE OF THE THINGS THAT WE'VE BEEN TALKING ABOUT RECENTLY IS POTENTIALLY LOOKING AT PLANNING PROCESSES FOR TRANSMISSION, WHERE WE ARE CONTINUOUSLY UPDATING THE TRANSMISSION ANNUAL PLAN THROUGHOUT THE YEAR VERSUS COMING UP WITH A ONE-TIME ANNUAL PLAN.
SO GOING INTO A, A REAL TIME CONTINUOUS PLANNING CAPABILITY WHERE THE OUTPUTS AND THE RESOURCES THAT ARE AVAILABLE AND THE DATA THAT CAN COME FROM THAT CAN HELP TO BETTER INFORM DECISIONING AROUND LOAD AND GENERATION SIDING.
COMPUTING CAPABILITIES HISTORICALLY HAVE MADE THAT CHALLENGING, BUT WITH THE ADVANCE OF, UH, SUPERCOMPUTING AND CLOUD COMPUTING, THE ABILITY TO DO THAT KIND OF REAL TIME MODELING EXISTS TODAY.
WE'VE TALKED IN RECENT MEETINGS ABOUT THE MANY ADVANTAGES THAT ERCOT HAS BY BEING AN INDEPENDENT ENERGY ISLAND AND NOT SUBJECT TO MANY OF THE WHOLESALE POWER, UH, AND INTERSTATE TRANSMISSION SIGHTING RULES THAT COME WITH, UM, BEING A PART OF AN OVERSEEN BY FERC.
AND WE GET TREMENDOUS BENEFITS FROM THAT.
WE'VE SEEN THE BENEFITS WITH HOW QUICKLY WE DEVELOPED WEATHERIZATION RULES HERE IN THE STATE OF TEXAS WITH HOW QUICKLY WE WERE ABLE TO DESIGN AND IMPLEMENT NEW ANCILLARY SERVICES LIKE ECRS AND THE DEVELOPMENT OF THE UPCOMING DRRS SERVICE.
THE FIRM FUEL, UH, SUPPLY SERVICE WAS SOMETHING WE COULD DEVELOP QUICKLY AND ROLL OUT WITHOUT HAVING TO GO THROUGH FEDERAL REVIEW PROCESSES.
SO WE GET, WE HAVE EXPERIENCED SIGNIFICANT BENEFITS BY HAVING OUR OWN JURISDICTION OVER OUR WHOLESALE POWER MARKETS, BUT THE BENEFIT AND TRANSMISSION DEVELOPMENT ARE JUST AS STRONG, IF NOT EVEN MORE STARK IN TERMS OF THE BENEFITS THAT TEXAS GETS FROM BEING ABLE TO DO TO SITE AND DEVELOP TRANSMISSION OURSELVES.
IF YOU LOOK AT THIS, UH, SLIDE HERE, YOU CAN SEE THAT THE FE TRANSMISSION PLANNING PROCESS IS SIGNIFICANTLY MORE COMPLEX AND LENGTHY AS A RESULT OF THE STEPS THAT WE DO NOT HAVE TO TAKE HERE INSIDE OF THE STATE OF TEXAS.
[00:20:01]
A LOT FASTER.WE FOCUS ONLY ON THE DECISION MAKING BETWEEN THE PUBLIC UTILITY COMMISSION AND WHAT THE STATE LEGISLATURE PROVIDES TO US AND CAN SHAVE ANYWHERE FROM FOUR TO SEVEN YEARS OFF OF THE PROCESS IN TERMS OF DESIGNING, DEVELOPING AND CITING TRANSMISSION.
SO COMING INTO A PERIOD OF TIME WHERE TRANSMISSION GROWTH IS GONNA BE CRITICALLY NEEDED TO SERVE THE DEMAND GROWTH IN THE STATE OF TEXAS, WE ARE VERY WELL POSITIONED WITH THE POLICIES AND RULES FOR TEXAS TO BE ABLE TO DO THAT.
AND IT'S A SIGNIFICANT ADVANTAGE THAT WE NEED TO THINK ABOUT HOW WE PRESERVE THAT GOING FORWARD.
IT'S GONNA TAKE TIME TO IMPLEMENT MANY OF THE VALUABLE NEW TOOLS THAT HAVE BEEN ENABLED BY PRIOR LEGISLATIVE SESSIONS, BUT I CAN CONFIDENTLY SAY THAT ALL STAKEHOLDERS ARE ON THE SAME PAGE WITH REGARDS TO ENABLING THIS E ECONOMY DRIVING GROWTH WHILE SIMULTANEOUSLY BOLSTERING THE RELIABILITY AND RESILIENCY OF THE ERCOT GRID.
OTHER GRIDS ARE LOOKING TO THE MANY SUCCESSES AND THE PRACTICES THAT WE HAVE HERE IN ERCOT, LIKE THE WEATHERIZATION AND INSPECTION PROCESSES WE HAVE, AND THEY ARE WATCHING OUR WAY, THE WAYS THAT OUR MARKET MODEL IS EVOLVING AND ADAPTING AND LEVERAGING NEW TOOLS LIKE THE TEXAS ENERGY FUND, UH, THE ECRS PLATFORM AND DRRS AND THE POTENTIAL PCM MECHANISM.
AND THERE IS INTENSE SCRUTINY AND INTEREST AROUND THE COUNTRY ON HOW THE RELIABILITY STANDARD THAT THE PUC IS DEVELOPING WILL CREATE THE YARDSTICK BY WHICH WE'LL MEASURE THE EFFECTIVENESS OF OUR CURRENT MECHANISMS AND WHAT KIND OF RELIABILITY CUSTOMERS CAN EXPECT IN THE TEXAS GRID FOR YEARS TO COME.
IT'S GONNA TAKE SOME TIME TO PULL ALL THESE PIECES OF THE PUZZLE TOGETHER TO SEE A COMPLETE MARKET PICTURE, BUT THE PIECES AND THE PARTS ARE HERE, AND IF THEY'RE DESIGNED AND IMPLEMENTED WITH A FOCUS ON THE CRITICAL RELIABILITY AND AFFORDABILITY THAT'S NEEDED, WE'RE GONNA BE ABLE TO GET THE OUTCOMES THAT WE NEED TO MAKE A POSITIVE IMPACT IN THESE GROWTH YEARS AHEAD OF US.
BECAUSE OF THE WORK OF STATE LEADERS, STATE LEADERS OVER THE LAST COUPLE OF YEARS, THE LEGISLATURE, THE PUC ERCOT NOW HAS THE TOOLS AND THE RESOURCES TO BE ABLE TO PLAN AND MEET FOR THESE CHALLENGES AHEAD.
SO I'D LIKE TO PAUSE HERE, UM, AND OPEN UP IF THERE'S ANY THOUGHTS, ANY QUESTIONS, ANY FEEDBACK FROM ANY OF THE BOARD MEMBERS OR COMMISSIONERS OR, OR ANYBODY ELSE.
COMMISSIONER KOBOS, I HAVE A QUESTION.
PABLO, UM, GREAT PRESENTATION ON ON THE TRANSMISSION PLANNING ASPECT OF, OF YOUR PRESENTATION.
TO WHAT EXTENT, IF ANY, DOES ERCOT, UM, AS A REVIEW PROJECTS THAT, UM, PERMEATE FROM THE RTP PROCESS, UM, LOOK AT NEW TRANSMISSION TECHNOLOGIES, UM, LIKE DYNAMIC LINE RATING, OTHER TECHNOLOGIES THAT CAN HELP, UM, BETTER READ TRANSMISSION INFRASTRUCTURE AND THE CAPACITY THAT CAN BE MOVED THROUGH THOSE LINES? YEAH, THAT, THAT'S SOMETHING THAT I WOULD, I, I WOULD SAY WE DO IN A KIND OF A CONTINUOUS REAL-TIME BASIS WITH TRANSMISSION SERVICE PROVIDERS IN THE STATE THROUGH THE T PROCESSES, WE HAVE CONVERSATIONS ABOUT HOW SOME OF THOSE INNOVATIONS ARE PRESENTING THEMSELVES AND MAKING THEMSELVES EITHER COMMERCIALLY AVAILABLE OR AT PILOT SCALE.
AND AS WE LOOK AT THE, THE PLANNING OPPORTUNITIES, WE REALLY ARE, ARE LOOKING FOR, UM, YOU KNOW, BOTH A PARTNERSHIP WITH TRANSMISSION SERVICE PROVIDERS TO BRING SOME OF THOSE IDEAS TO THE TABLE, TO PR TO POTENTIALLY, YOU KNOW, INTEGRATE INTO FUTURE DEVELOPMENT EFFORTS AND SO THAT WE CAN THEN ADAPT OUR MODELS AND STUDIES TO BE ABLE TO UNDERSTAND THE BENEFITS OF THOSE, UH, OF THOSE KINDS OF TOOLS AND TECHNOLOGIES.
DYNAMIC LINE RATING IS SOMETHING THAT, YOU KNOW, WE'VE DONE HERE IN TEXAS FOR, FOR YEARS.
UH, WE'RE FAIRLY, UH, FAR DOWN THE ROAD WITH THAT WITH MANY OF THE LARGE TRANSMISSION SERVICE PROVIDERS.
AND, UH, A GOOD MAJORITY OF THE TRANSMISSION LINES IN THE STATE OF TEXAS TODAY ARE DYNAMICALLY LINE RATED.
AND WE, AND WE GET THE BENEFIT OF THAT THROUGHOUT, UH, THROUGHOUT THE YEAR.
BUT WITH REGARDS TO LOOKING AT OTHER KINDS OF INNOVATIONS THAT ARE COMING INTO THE TRANSMISSION GRID, THIS IS SOMETHING THAT, YOU KNOW, WE NEED TO WORK CLOSELY THROUGH THE TAC PROCESS AND WITH THE, UH, WITH THE INDUSTRY TO UNDERSTAND HOW THAT CAN BE ADOPTED AND WHAT ROLE IT FITS INTO FUTURE INVESTMENT, UH, UH, PROPOSALS.
ANY OTHER QUESTIONS? PABLO? THANKS FOR THE PRESENTATION.
I WANNA COMPLIMENT YOU ON THE, UH, GENERATION HUBS IDEA.
I THINK THAT'S GONNA BE INNOVATIVE.
I THINK THAT WILL BE TRULY HELPFUL IN TERMS OF TRYING TO BETTER MATCH LOAD AND GENERATION GROWTH IN THE FUTURE.
SO, UH, I HOPE THAT, UH, YOU'RE SUCCESSFUL AND CONTINUE TO FLESH THAT OUT.
AND, AND YEAH, WE'VE, AS WE START TO SEE SOME OF THE CHALLENGES, YOU KNOW, EMERGE WITH, UH, WITH THE DEGREE AND, AND THE SCALE
[00:25:01]
OF THE GROWTH AHEAD OF US, THERE'S, THERE'S CLEARLY SOLUTIONS OUT THERE AND IT'S, UH, IT'S, IT'S REALLY REQUIRES ALL OF US TO BE CREATIVE AND INNOVATIVE IN, IN HOW WE THINK ABOUT SOLVING THESE PROBLEMS. BUT, UH, THERE ARE SOLUTIONS TO THEM AND, UH, WE DO BELIEVE GENERATION HUBS CAN BE HELPFUL IN THE MODELING PERSPECTIVE, BUT ALSO JUST FROM A LONGER TERM PLANNING, HELPING THE, YOU KNOW, PARTICIPANTS IN THE GRID AND POTENTIAL INVESTORS UNDERSTAND WHERE THE BEST OPPORTUNITY IS TO OPTIMIZE THEIR INVESTMENTS FOR THEIR BENEFIT AS WELL AS FOR THE BENEFIT OF CONSUMERS.CARLOS PABLO, BACK TO YOUR PAGE FOUR MM-HMM.
UH, WHAT DO YOU PROJECT FOR NEXT YEAR? WELL, I, WHAT I PROJECT FOR NEXT YEAR, IF YOU LOOK HERE, I THINK WHAT WE'RE GONNA START TO SEE IF YOU ARE TO, IF WE ARE TO ALL IN BUY INTO THIS INCREDIBLE GROWTH STORY THAT'S AHEAD OF US, AND I THINK IT'S PRETTY CLEAR THAT IT'S NOT JUST, IT'S NOT JUST ONE FACET THAT'S DRIVING IT.
AND, AND WHAT REALLY RESONATES FOR ME, IF, IF, IF IT WAS JUST TALKING ABOUT, UM, ELECTRIFICATION OF THE PERMIAN OR JUST TALKING ABOUT THE HYDROGEN ECONOMY, IT MIGHT BE, YOU KNOW, THERE MIGHT BE MORE SKEPTICISM TO THE SCALE AND THE POTENTIAL SPEED TO WHICH IT CAN SHOW UP.
BUT WHAT WE'RE TALKING ABOUT IS THIS COMPOUNDING EFFECT OF THOSE FACTORS AS WELL AS ARTIFICIAL INTELLIGENCE AND DATA CENTERS.
UH, ELECTRIFICATION, WE HAVEN'T EVEN REALLY TALKED ABOUT ELECTRIC VEHICLES MUCH IN THIS CONVERSATION, BUT THE POTENTIAL CONTINUED GROWTH IN ELECTRICAL VEHICLES, ALL OF THAT IS COMPOUNDING TO BRING THIS TYPE OF A GROWTH PICTURE TO THE, TO THE TABLE.
AND GIVEN THAT REALITY, WE ARE THE BEST MARKET IN THE COUNTRY TO REACT TO THAT KIND OF GROWTH POTENTIAL.
WE HAVE THE ABILITY IN ERCOT TO CONNECT DISPATCH RESOURCES FASTER THAN ANY PLACE ELSE IN THE COUNTRY.
SO BATTERIES, I BELIEVE WE'RE GONNA RESPOND AND START TO FILL IN A LOT OF THAT.
OUR QUEUE HERE IS SHOWING THE POTENTIAL FOR THAT, THAT THERE'S TREMENDOUS POTENTIAL OVER 140 GIGAWATTS OF EXPRESSED INTEREST IN BATTERIES ALONE.
WHEN YOU COUPLE THAT WITH OTHER RESOURCES, THE, LIKE, SOLAR AND WITH WIND, YOU HAVE A MUCH MORE, UH, RELIABLE COMBINATION OF RESOURCES.
SO WE MAY START TO SEE MORE INTEGRATED PACKAGING OF INTERMITTENT RENEWABLES WITH, UH, BATTERY STORAGE IN ORDER TO BE ABLE TO PROVIDE A MORE STEADY STATE, UH, RESOURCE SUPPLY THAT ALSO IS COMPLIMENTED AND SUPPORTED BY THE INFLATION REDUCTION ACT, WHICH IS CREATING FURTHER INCENTIVES TO BE ABLE TO MATCH THE PRODUCTION OF, UH, CLEAN ENERGY TO THE USE OF CLEAN ENERGY, ESPECIALLY WHEN YOU PIVOT INTO THE HYDROGEN ECONOMY AND TO THE INDUSTRIALIZATION, UH, UH, ELECTRIFICATION THAT WE'RE SEEING.
SO I THINK THE, THE TOOLS AND THE PARTS ARE ALL HERE FOR US TO BE ABLE TO RESPOND QUICKLY.
WE HAVE ALL OF THE RESOURCE CAPABILITIES TO DO THAT IN ERCOT.
IT'S A MATTER OF E OF ENACTING AND GETTING THE ENGINE TURNING AND DEVELOPING THESE RESOURCES HERE, BECAUSE OTHERWISE IT BECOMES THE NATURAL GOVERNOR TO THE POTENTIAL FOR LOAD GROWTH.
AND WHAT WE DON'T WANNA DO IS, IS, IS SEE WHAT'S HAPPENED IN OTHER PARTS OF THE COUNTRY WHERE INVESTMENTS HAVE HAD TO WAIT FOR THE CAPACITY TO BE ABLE TO CONNECT INTO THE SYSTEM.
AND IN TEXAS, I DON'T THINK THAT NEEDS TO BE THE CASE.
I THINK WE CAN RESPOND QUICKLY ENOUGH TO BE ABLE TO INCORPORATE AND ADAPT TO THE, TO THE PACE OF GROWTH.
ANY OTHER QUESTIONS? THANK YOU.
I'D LIKE TO CLOSE, LIKE I DO, UM, EACH OF MY, UH, CEO REPORTS WITH A, WITH A THANK YOU, AND I'D LIKE TO RECOGNIZE TWO GROUPS OF EMPLOYEES IN ERCOT.
UM, THE FIRST, UH, OF THOSE INVOLVED WITH THE, UH, VALUE OF LOST LOAD STUDY, THE VOL STUDY, THE PUBLIC UTILITY COMMISSION IDENTIFIED THE VOL AS A ONE OF THE KEY INPUTS FOR THE PURPOSES OF ESTABLISHING THE RELIABILITY STANDARD THAT WE'RE WORKING ON.
AND SO THEY DIRECTED US TO ENGAGE A CONSULTANT, THE BRATTLE GROUP, UH, IN ORDER TO ADMINISTER THE SURVEY AND TO IMPLEMENT THIS, UH, THIS STUDY PHASE ONE OF THIS WAS COMPLETED IN DECEMBER OF 2023, AND IT CONSISTED OF A LITERATURE REVIEW THAT ASSESSED THE RESULTS OF PRIOR VAULT STUDIES THAT HAVE BEEN PERFORMED, AND IT DEVELOPED INNER VOL VALUES FOR THE ERCOT REGION TO USE AS WE WERE, AS WE START THE MODELING OF OUR RELIABILITY STANDARD, THE, UH, PHASE TWO OF THE OF ALL STUDY, UH, WE'VE DEVELOPED THE RATTLE TEAM DEVELOPED A PROPOSED SURVEY WORK PLAN TO START CONDUCTING A RE A SURVEY ACROSS THE ERCOT REGION.
THAT SURVEY BEGAN WITH A SOFT LAUNCH IN MARCH, UH, THIS YEAR TO A SMALL SUBSET OF CUSTOMERS, AND THEN IT FOLLOWED BY A FORMAL LAUNCH ON APRIL 9TH AND, AND AN OUTREACH TO
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THE NON OPT-IN ENTITY CUSTOMERS ON APRIL 16TH.AND THAT'S GONNA REMAIN OPEN UNTIL MAY.
SO THANK YOU TO EVERYBODY ON THE PUC STAFF AND THE ERCOT STAFF AND THE BRATTLE TEAM THAT HAS REALLY HELPED TO ADVANCE THIS COMPLEX COMPONENT OF THE RELIABILITY STUDY DEVELOPMENT.
AND I ALSO WANTED TO RECOGNIZE THERE HAS BEEN WORK UNDERTAKEN FOR OVER EIGHT YEARS IN THE INTEGRATION OF LUBBOCK POWER AND LIGHTS TRANSITION TO THE ERCOT GRID.
THIS IS A SIGNIFICANT MILESTONE OF STUDY AND PLANNING AND OPENS RETAIL SERVICE AREA FOR CUSTOMERS TO TAKE ADVANTAGE OF COMPETITIVE WHOLESALE MARKETS AND ELECTRIC RATES.
LUBBOCK IS THE FIRST MAJOR TEXAS CITY TO INTEGRATE INTO THE ERCOT MARKET IN NEARLY 25 YEARS.
UH, IT IS THE FIRST MUNICIPALITY IN THE ERCOT REGION TO OFFER RETAIL CHOICE TO ITS CUSTOMERS.
BETWEEN MARCH 4TH AND APRIL 1ST OF THIS YEAR, LUGABO POWER AND LIGHT MOVED ALL THEIR CUSTOMERS TO RETAIL ELECTRIC PROVIDERS, WHICH WERE APPROXIMATELY 109,000 EASY IDS.
AND BEING THE FIRST MUNICIPALITY TO OPT IN PROVED TO COME WITH A UNIQUE SET OF CHALLENGES THAT WAS ABLE TO, UH, BE OVERCOME AND MET BY ALL THOSE ENGAGED.
UH, A BIG THANK YOU TO THE LPL TEAM, UH, TO THE LPNL TEAM.
THEY WERE A GREAT PARTNER TO ERCOT THROUGHOUT ALL OF THIS ENDEAVOR.
AND A BIG THANK YOU TO THE ERCOT TEAM WHO WORKED VERY DIG DILIGENTLY TO PROVIDE SME SUPPORT TO THE LUBBOCK INTEGRATION TASK FORCE THROUGHOUT THE, THE LAST MANY YEARS.
AND THEN FINALLY, I WOULD LIKE TO ANNOUNCE THAT A PLAQUE COMMEMORATING OUR DEAR FRIEND BRAD JONES, OUR FORMER CEO AND FRIEND TO SO MANY IN TEXAS, AS WELL AS OUTSIDE OF THE STATE OF TEXAS, IS NOW AVAILABLE FOR VIEWING OUTSIDE OF, OF THE BOARDROOM IN THE HALLWAY HERE.
UM, I'D ENCOURAGE YOU TO TAKE A LOOK AT THIS SPECIAL COMMEMORATION WHEN YOU GET A CHANCE.
UM, I ALSO WANNA LET YOU KNOW THAT WE ARE GOING TO, UH, HAVE ANOTHER, UH, SPECIAL COMMEMORATION FOR BRAD AT OUR TAYLOR FACILITY AS WELL.
WE'RE GOING TO HAVE A TREE PLANTED WITH A PLAQUE DEDICATED, UH, TO BRAD JONES AS WELL.
AND WE'LL BE CELEBRATING THAT COMMEMORATION, UH, LATER NEXT MONTH.
SO THANK YOU VERY MUCH FOR YOUR TIME TODAY.
I APPRECIATE THE, UH, QUESTIONS AND THE INTERACTIONS AND, UH, WE'LL MOVE ON.
UM, BRAD'S NUMEROUS CONTRIBUTIONS TO ERCOT AND THE INDUSTRY AS A, AS A WHOLE ARE CLEARLY WORTHY OF THIS RECOGNITION.
AND I ENCOURAGE YOU, UH, EACH OF YOU TO PLEASE TAKE A MOMENT TO REMEMBER BRAD, AND TO CHECK OUT THE PLAQUE WHEN YOU HAVE A CHANCE.
[6. Reliability Monitor Update]
MOVING ON WITH THE AGENDA.ITEM SIX IS THE RE RELIABILITY MONITOR UPDATE.
AND CHAD, DO YOU WANNA FRAME IT UP BEFORE ANDY BEGINS? SURE.
SO THIS WAS A REQUEST BY SEVERAL BOARD MEMBERS FOR AN OPPORTUNITY TO BETTER UNDERSTAND THE WORK BEING DONE BY THE ERCOT RELIABILITY MONITOR SINCE THE FALL OF 2022 WHEN THE COMMISSION ORDERED ERCOT TO TAKE OVER THE, THESE FUNCTIONAL RESPONSIBILITIES.
ANDY IS THE ASSISTANT GENERAL COUNSEL THAT MANAGES THE DAY-TO-DAY OPERATIONS OF THIS GROUP, WHICH COVERS CERTAIN LEGAL AND COMPLIANCE EMPLOYEES.
UH, ANDY HAS MORE THAN 35 YEARS OF EXPERIENCE IN THE ENERGY INDUSTRY, UH, EXPERIENCE IN COMPLIANCE, REGULATORY AND ADMINISTRATIVE LAW THAT HAVE BEEN INVALUABLE IN STANDING UP THIS PROGRAM FOR THE ORGANIZATION IN WHICH THIS GROUP WORKS WITH THE PC'S ENFORCEMENT DIVISION.
UH, AND IN FACT, ANDY AND I HAVE KNOWN EACH OTHER FOR ALMOST 20 YEARS NOW.
AND IN FACT, ANDY HIRED ME AS THE YOUNG ATTORNEY AT ERCOT IN 2005.
SO ANDY WAS MY BOSS, AND NOW I'M HIS BOSS.
SO I'LL TURN IT OVER TO HIM TO WALK THE BOARD THROUGH THIS PRESENTATION.
I THINK, UM, SERIOUSLY, UM, MY NAME'S ANDREW GALLO.
I AM ASSISTANT GENERAL COUNSEL FOR REGULATORY, AND, UM, I HAVE THE PLEASURE OF WORKING WITH VARIOUS ERCOT STAFF AND, UH, MOSTLY THE FOLKS FROM, UH, OPERATIONS AND PLANNING COMPLIANCE ON THE ERCOT RELIABILITY MONITOR, UH, FUNCTION THAT WE TOOK, UH, WE THAT WE, THAT THE COMMISSION GAVE US BACK IN NOVEMBER, 2022.
SO WITH THAT, I'LL JUST JUMP INTO MY SLIDES.
SO THE PURPOSE OF THIS PRESENTATION IS TO INFORM THE BOARD MEMBERS ABOUT ERCOT RELIABILITY MONITOR ACTIVITIES.
YOU'LL HEAR ME REFER TO IT AS ERM, UH, OCCASIONALLY THERE IS NOTHING TO VOTE ON.
IT'S REALLY JUST AN INFORMATIONAL ITEM.
THE KEY TAKEAWAYS WE WANT YOU TO TAKE FROM THIS PRESENTATION IS THAT WE BEGAN THESE ACTIVITIES IN NOVEMBER, 2022, AND SINCE THAT DATE, WE HAVE OPENED 220 INVESTIGATIONS AGAINST ERCOT AND MARKET PARTICIPANTS.
AND THAT, THAT WE DO WANNA MAKE CLEAR IS THAT THE WORK THAT THE ERM DOES DOES INCLUDE, UH, WHEN ERCOT VIOLATES ITS OWN PROTOCOLS, OPERATING GUIDES, ET CETERA.
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WE HAVE FULL AND PART-TIME ERCOT EMPLOYEES WHO SIGN SEPARATE CODE OF CONDUCT AGREEMENTS TO ENSURE THAT THEY'RE INDEPENDENT AND OBJECTIVE IN THEIR WORK WITH THE ERM.AND WE WORK DIRECTLY WITH THE PUBLIC UTILITY COMMISSION'S ENFORCEMENT DIVISION.
AND LASTLY, THE ERM BUDGET IS PART OF THE OVERALL SYSTEM ADMIN FEE, AND WE REPORT OUR EXPENSES TO THE PUBLIC UTILITY COMMISSION ANNUALLY.
AND IN FACT, IF YOU'RE INTERESTED, WE JUST RECENTLY FILED OUR FIRST ONE, UM, UH, I THINK IT WAS LAST WEEK.
UM, SO THERE IS A FILING IN OUR GENERAL DOCKET AT THE COMMISSION ON OUR, UH, OUR BUDGET.
SO A LITTLE BIT OF BACKGROUND.
NOVEMBER 3RD, 2022, THE COMMISSION DIRECTED ERCOT TO SERVE AS THE ERM EFFECTIVE IMMEDIATELY.
AND, UH, ERCOT PLACED THAT ROLE UNDERNEATH THE GENERAL COUNSEL'S DEPARTMENT.
UM, THAT'S WHY I GET TO REPORT TO CHAD, MY OLD EMPLOYEE.
UM, THE FIRST STEP WAS WE ASSIGNED VARIOUS ERM EMPLOYEES, AND WE'VE GOT THREE FTES FROM, UH, OPERATIONS AND PLANNING COMPLIANCE, TWO PART-TIME FROM OPERATIONS AND PLANNING COMPLIANCE, ONE FULL-TIME, UH, UH, EQUIVALENT FROM LEGAL SIX PART-TIME FROM LEGAL, OR AT LEAST AT THAT TIME WE DID.
UM, AND ONGOING, WE HAVE SIX FTES.
SO BASICALLY WE'VE GOT, LIKE MYSELF, I WORK PART-TIME ON ERM AND PART-TIME ON GENERAL ERCOT, UH, SUPPORT, UM, SHAY SHAYNA HORTON, I THINK I SAW HER.
SHE'S A HUNDRED PERCENT, UH, ASSIGNED TO THE ERM HERE IN THE LEGAL DEPARTMENT.
SO WHEN YOU PUT ALL OF THOSE PERCENTAGES TOGETHER, IT COMES OUT TO SIX FTES CURRENTLY.
SO THE NEXT STEP AFTER, AFTER STAFFING THE ERM WAS TO DEVELOP POLICIES, PROCEDURES, AND A SHAREPOINT SITE.
WE ALSO CREATED A DEDICATED EMAIL ADDRESS FOR ALL COMMUNICATIONS RELATED TO THE ERM.
AND THAT IS NOT SURPRISINGLY, E RM@ERCOT.COM.
OUR FIRST INCIDENT REVIEW BEGAN ON, UH, NOVEMBER 28TH, SO, YOU KNOW, APPROXIMATELY 26 DAYS AFTER WE OFFICIALLY TOOK OVER THE ROLE.
AND, UH, MANY ERCOT EMPLOYEES WHO DO NOT HAVE ASSIGNED ROLES WITH THE ERM SUPPORT, THE ERM ON AN AD HOC BASIS.
SO IF WE NEED A SUBJECT MATTER EXPERT ON TELEMETRY OR ON, YOU KNOW, RIDE THROUGH OR WHATEVER, WE CAN, UH, WE CAN TAP INTO THE EXPERTISE THAT ERCOT HAS ON STAFF.
AND THEN THE NEXT STEP WAS WE MADE PRESENTATIONS TO ERCOT EMPLOYEES AND SEPARATE PRESENTATIONS TO MARKET PARTICIPANTS, SORT OF EXPLAINING THE ERM ROLE SO THAT THE ERCOT EMPLOYEES WOULD KIND OF SEE HOW IT FITS IN AND MARKET PARTICIPANTS WOULD SEE HOW WE WE FIT IN.
THERE IS A DISTINCTION BETWEEN ERCOT AND THE ERM, UH, UNDER THE TEXAS ADMINISTRATIVE CODE SECTION 25 5 0 3 J ERCOT FUNCTION.
UH, AMONG OTHER THINGS IS TO MONITOR MATERIAL OCCURRENCES OF NON-COMPLIANCE, WHETHER ERCOT REQUIREMENTS THAT COULD IMPEDE ERCOT OPERATIONS OR CREATE A RISK TO THE SYSTEM'S RELIABILITY.
AND THEN THEY KEEP RECORDS OF THOSE EVENTS.
AND THEN IT SPECIFICALLY SAYS THEY'LL SUPPORT THE ERM AND THE PUBLIC UTILITY COMMISSION IN PERFORMING THEIR DUTIES.
AND THAT IS BASICALLY TO PROVIDE INFORMATION TO AND RESPOND TO QUESTIONS FROM THE ERM AND THE COMMISSION.
AND THEN THAT SAME SECTION OF THE TEXAS ADMINISTRATIVE CODE.
BUT SUBSECTION K DEFINES THE M'S FUNCTIONS.
AND BASICALLY IT SAYS UNDER THE COMMISSION'S DIRECTION AND SUPERVISION, UH, THE ERM MONITORS INVESTIGATES AUDITS AND REPORTS ON RELIABILITY REQUIREMENTS.
AND YOU'LL NOTICE RELIABILITY REQUIREMENTS HERE IS, IS CAPITAL R ON BOTH WORDS.
AND THAT'S DEFINED AS STATE LAW COMMISSION RULES AND ERCOT PROTOCOLS, OPERATING GUIDES, AND ON THE BINDING DOCUMENTS.
SO BASICALLY IT'S ALL OF THE STATE LEVEL RELIABILITY REQUIREMENTS.
UM, AND THEN THE ERM PROVIDES SUBJECT MATTER ADVICE, EXPERTISE, AND ASSISTANCE TO THE COMMISSION ENFORCEMENT STAFF FOR THEIR OVERSIGHT AND ENFORCEMENT ACTIVITIES.
AND WE PROVIDE EXPERT ADVICE ANALYSIS REPORTS AND TESTIMONY IN ANY ENFORCEMENT PROCEEDINGS.
SO IF THEY, IF THE COMMISSION ACTUALLY BRINGS AN ENFORCEMENT ACTION AGAINST, UH, A MARKET PARTICIPANT, UH, WE MIGHT PROVIDE EXPERT ADVICE, ET CETERA.
SO THE KEY TAKEAWAY HERE IS THAT THERE'S REALLY NO CHANGE TO THE TRADITIONAL ERCOT ROLE, AND THEN THAT THE E'S ROLE IS TO SUPPORT THE COMMISSION'S ENFORCEMENT DIVISION.
CONTINUING WITH THE ERM RESPONSIBILITIES UNDER THE PUC DIRECTION, WE ASSESS MARKET PARTICIPANT AND ERCOT COMPLIANCE WITH STATE STATUTES, COMMISSION SUBSTANTIVE RULES AND ERCOT REQUIREMENTS, BUT IMPORTANTLY, NOT THE NERC RELIABILITY STANDARDS, RIGHT? THAT TEXAS RE HAS THAT JOB.
THAT'S AN ENTIRELY SEPARATE FUNCTION.
WE'RE ONLY LOOKING AT STATE LEVEL ACTIVITIES, AND WE GATHER AND ANALYZE INFORMATION TO MEET OUR MONITORING OBLIGATIONS, AND WE
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INVESTIGATE POTENTIAL NON-COMPLIANCE EVENTS.AND THEN WE CHOOSE WHICH RELIABILITY REQUIREMENTS, UM, TO ASSESS MARKET PARTICIPANT AND ERCOT COMPLIANCE.
SO WE, WE PICK WHICH RELIABILITY, UH, REQUIREMENTS AT THE BEGINNING OF THE YEAR WE'RE GOING TO ACTUALLY AUDIT.
WE ARE REQUIRED TO ACT INDEPENDENTLY UNDER THE ORDER FROM THE COMMISSION.
WE HAVE TO BE OBJECTIVE AND USE INDEPENDENT JUDGMENT THAT'S FREE OF UNDUE INFLUENCE.
SO BASICALLY, YOU KNOW, WE CAN'T PLAY FAVORITES, WHETHER IT BE WITH MARKET PARTICIPANTS OR ACOT.
WE CAN'T GO EASY ON SOMEBODY BECAUSE, YOU KNOW, THEY'RE A FRIEND OF OURS WHO WORKS FOR ACOT.
UM, WE DO SIGN CODES OF CONDUCT.
SO THE, THE EMPLOYEES THAT ARE SIGNED COMPLETELY TO THE ERM AND WORK ON ERM MATTERS, UH, SIGN A GENERAL CODE OF CONDUCT THAT APPLIES TO ALL OF US.
AND THEN IF AN ERCOT SUBJECT MATTER EXPERT IS ASKED TO ASSIST IN AN ERM INVESTIGATION, THEY SIGN A SEPARATE CODE OF CONDUCT THAT'S SPECIFIC TO THAT INVESTIGATION, AND THEN THEY'RE GIVEN ACCESS TO THE M'S SHAREPOINT SITE FOR THAT MATTER ONLY.
SO AS YOU CAN IMAGINE WITH 220 OPEN ITEMS, UH, WE HAVE LOTS OF DIFFERENT AREAS ON OUR SHAREPOINT SITE.
IF WE, WE ASK AN ERCOT EMPLOYEE TO WORK ON MATTER A, THEY DON'T GET ACCESS TO AT MATTER B-C-E-D-E, THEY CAN JUST SEE THE FILES ASSOCIATED WITH THAT ONE MATTER.
SO THE KEY TAKEAWAY HERE IS THAT THE ERM SUPPORTS THE PUBLIC UTILITY COMMISSION'S ENFORCEMENT DIVISION ON COMPLIANCE MATTERS AND ACTS INDEPENDENTLY.
SO THIS IS A FLOW CHART OF OUR PROCESS.
BASICALLY, WE, THE FIRST STEP IS WE RECEIVE SOME INFORMATION ABOUT A POSSIBLE NON-COMPLIANCE.
THE FIRST THING WE DO IS, IS IT RELIABILITY RELATED? WE LOOK AND DECIDE WHETHER IT'S RELIABILITY, IF IT'S A SETTLEMENTS MATTER, IT'S NOT RELIABILITY RELATED.
WE DON'T, WE DON'T TAKE THAT UP IF IT'S A CUSTOMER SWITCHING ISSUE, WE DON'T TAKE THOSE UP.
ONLY THINGS THAT ARE ABOUT SORT OF KEEPING THE LIGHTS ON.
SO IF IT'S NOT RELIABILITY RELATED, WE SEND IT TO ERCOT LEGAL TO REVIEW AND ROUTE APPROPRIATELY.
IF IT IS RELIABILITY RELATED, THE NEXT STEP IS WE LOOK TO SEE IS IT A, IS IT, DOES IT RELATE TO A NERC RELIABILITY STANDARD OR A RELIABILITY REQUIREMENT, IEA STATE LEVEL REQUIREMENT? IF IT'S A NERC STANDARD, THEN IT GETS SENT OVER TO ERCOT COMPLIANCE TO PERFORM AN INCIDENT REVIEW.
ERCOT OPERATION AND PLANNING COMPLIANCE TEAM.
AND THEY DO INCIDENT REVIEWS, UH, FOR OF NERC STANDARD MATTERS, BUT ONLY FOR ERCOT POTENTIAL NON-COMPLIANCE.
AGAIN, THEY DON'T ANALYZE WHETHER A MARKET PARTICIPANT IS OUTTA COMPLIANCE WITH A NERC STANDARD.
SO IF IT IS RELIABILITY RELATED AND A STATE A STATE REQUIREMENT, THEN WE PERFORM AN INCIDENT REVIEW.
SO ERCOT LEGAL AND COMPLIANCE TEAM TRIAGED THOSE INCIDENTS AND PERFORM THAT ANALYSIS THAT I JUST DESCRIBED.
AND THOSE INCIDENT REVIEWS CAN BE INITIATED EITHER BY DIRECT NOTIFICATION OF A MARKET PARTICIPANT, A SELF-REPORT.
UH, PUC ENFORCEMENT STAFF MAY REFER AN ISSUE TO US.
AN ERCOT EMPLOYEE MAY REFER SOMETHING TO US SAYING, HEY, WE SAW THIS PROBLEM.
UM, BUT IT ALSO CAN BE BASED ON OUR INTERNAL ROUTINE COMPLIANCE MONITORING.
EVERY MONTH OUR TEAM LOOKS AT THE SECTION EIGHT PRO, UH, SECTION EIGHT OF THE PROTOCOLS THAT HAS MANY PERFORMANCE REQUIREMENTS IN IT, AND WE DO A SYSTEMATIC ANALYSIS OF WHICH, UH, UNITS, WHICH QUEASY MAY HAVE VIOLATED, UH, A RELIABILITY REQUIREMENT.
SO WHEN WE PERFORM AN INVESTIGATION, IF IT'S RELIABILITY RELATED, UM, WE, AS I SAID EARLIER, WE LOOK AT THINGS THAT APPLY TO ERCOT AND MARKET PARTICIPANTS, RIGHT? SO WE'RE NOT PLAYING FAVORITES.
WE THEN PRIORITIZE THE EVENT INTERNALLY AS CRITICAL, HIGH, MEDIUM, OR LOW.
AND THAT DEPENDS ON THE, UH, YOU KNOW, WHEN WE'RE GONNA LOOK AT IT.
UH, BECAUSE THE CRITICAL ONES, THE HIGH ONES OBVIOUSLY ARE MORE IMPORTANT.
UM, WE MAY RE REQUEST ASSISTANCE FROM ERCOT SMES, AND THEN WE REVIEW THE DATA AND WE MAY SEND REQUESTS FOR INFORMATION EITHER TO ERCOT OR A MARKET PARTICIPANT.
WE MAY CONDUCT INTERVIEWS, DO ANY KINDS OF THE THINGS YOU WOULD NORMALLY EXPECT AN INVESTIGATION TO INVOLVE.
WE THEN MAKE A PRELIMINARY DETERMINATION OF WHETHER OR NOT WE THINK A VIOLATION OCCURRED.
AND IF WE DO, THEN WE REFER THE MATTER TO THE PUCS ENFORCEMENT STAFF FOR OVERSIGHT AND A DECISION ON ENFORCEMENT.
AND THE PC'S ENFORCEMENT STAFF DECIDES WHETHER TO PURSUE THE MATTER FURTHER.
SO THE KEY TAKEAWAY HERE IS THAT BASICALLY THE COMMISSION'S ENFORCEMENT STAFF HAS AN ENTIRE DISCRETION OVER WHETHER TO PURSUE AN ENFORCEMENT ACTION.
ALL WE DO ARE INVESTIGATE AND REPORT TO THEM.
SO BASICALLY WE'RE KIND OF LIKE THE DETECTIVE AND THEY'RE THE, UH, PROSECUTOR, IF YOU WILL, AND THEY DECIDE WHETHER OR NOT TO PROSECUTE.
SO HERE'S SOME PERFORMANCE METRICS.
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TO MARCH OF 2024, WE'VE OPENED 220 TOTAL INVESTIGATIONS.YOU CAN SEE FORTUNATELY WE'VE ONLY HAD TWO, UH, CRITICAL, UM, BUT QUITE A FEW HIGH AND MEDIUM, AND THEN SOME LOW.
UM, THE STATUS OF THE VARIOUS INVESTIGATIONS, WE'VE CLOSED 60 SO FAR.
OF THOSE TWO 20, WE HAVE, I BELIEVE IT'S LIKE SEVEN ON HOLD, UM, OBVIOUSLY A LITTLE MORE THAN 90 THERE ON IN PROGRESS.
AND WE HAVE REFERRED 60 OVER TO THE PUC ENFORCEMENT STAFF.
SO OF THAT 220, YOU CAN SEE WE'VE EITHER CLOSED OR REFERRED TO THE PUC 120 OF THOSE, WHICH IS MORE THAN HALF.
SO, UM, THE KEY TAKEAWAY HERE IS THAT WE HAVE REFERRED 60 ENFORCEMENT, UH, UH, OR 60 INCIDENT REVIEWS TO THE ENFORCEMENT DIVISION, WHO THEN MAKES A CALL ON WHETHER OR NOT TO OPEN AN ENFORCEMENT ACTION.
TALK A LITTLE BIT ABOUT THE BUDGET FOR CALENDAR YEAR 2023.
THIS IS WHAT WE RECENTLY FILED OVER AT THE COMMISSION.
THE, UH, BUDGET FOR THE ENTIRE YEAR WAS ABOUT $1.8 MILLION.
WE BROKE THAT INTO THREE TIERS, DIRECT COSTS, WHICH IS COST DIRECTLY AND SOLELY ATTRIBUTABLE TO THE ERM PROGRAM, WHICH IS SALARIES, BENEFITS, AND EMPLOYEE EXPENSES ASSOCIATED WITH ERM ACTIVITIES.
TIER TWO, WHICH IS COSTS NOT DIRECTLY OR SOLELY ATTRIBUTABLE TO THE ERM PROGRAM, BUT ASSOCIATED WITH DISCRETE COST DRIVERS, AND THEY'RE ASSIGNED BY DRIVER.
SO FOR EXAMPLE, HR FACILITIES, IT OBVIOUSLY WE USE IT, WE USE FACILITIES.
HR STILL IS INVOLVED IN OUR SALARIES AND, AND THAT SORT OF THING.
AND THEN TIER THREE IS INDIRECT COST ASSIGNMENT BASED ON GENERAL ALLOCATORS, WHICH AGAIN, THEY'RE NOT DIRECTLY AND OR INDIRECTLY ASSIGNED, BUT THEY'RE ALLOCATED PROPORTIONATELY BASED ON THE COSTS IN TIER ONE AND TIER TWO.
UM, SO YOU CAN SEE THAT THE DIRECT COSTS ABOUT 1.1 MILLION, UH, TIER TWO, UH, 382,000, AND THEN TIER THREE, ABOUT 327,000 TO MAKE UP THAT TOTAL OF 1.8.
UH, THAT BUDGET DOES COMPARE FAVORABLY TO THE LAST TEXAS RE BUDGET, UH, FILING THAT WAS DONE IN 2021.
AND I PROBABLY SHOULD HAVE SAID THIS EARLIER ON BEFORE ERCOT HAD THIS ROLE, TEXAS RE SERVED AS THE RELIABILITY MONITOR, AND SO WE HAD THEIR FILINGS WITH THE COMMISSION TO SEE WHAT THEIR BUDGETS WERE.
THE LAST YEAR THEY'VE FILED A BUDGET WAS 2021.
SO WE WERE ABLE TO LOOK AT THAT AND SORT OF GROSS UP FOR, UM, INFLATION AND SUCH.
UH, COUPLE OF THINGS IN THE APPENDIX, THAT'S JUST, JUST OUR WEBPAGE ON THE, UM, ON THE ERCOT.COM WEBSITE.
IF YOU'RE INTERESTED, UH, YOU CAN SEE IT ON OUR SITE.
AND THEN WE'VE ALSO PROVIDED SOME HELPFUL LINKS THAT WE THOUGHT THAT THE BOARD MEMBERS MIGHT FIND USEFUL, UH, ASSOCIATED WITH OUR ERM ACTIVITIES.
AND WITH THAT, UM, I GUESS I'M OPEN TO ANY QUESTIONS IF YOU HAVE THEM.
ANDY, ANY QUESTIONS, PEGGY? THANK YOU.
UH, CAN YOU EXPLAIN AND JUST BACKGROUND WHY THE, THE TWO FUNCTIONS WERE SPLIT UP? YOU KNOW, I, UH, THIS FUNCTION WAS MOVED OVER TO ERCOT, SEPARATED FROM THE RE UH, UH, AND THEN, UH, ARE YOU, WHAT IS YOUR AUTHORITY TO INVESTIGATE, YOU KNOW, IF YOU GET AN ISSUE RAISED, PRESUMABLY IF YOU GO TO THE MARKET PARTICIPANTS TO GET INFORMATION, IF YOU COULD ADDRESS THOSE TWO, PLEASE.
UM, WHY IT WAS TAKEN FROM THE TEXAS RE AND MOVED TO ERCOT? I CAN'T REALLY ANSWER.
THE COMMISSION CANCELED ITS CONTRACT WITH THE TEXAS RE IN 2021, I THINK, UM, WHICH WAS A COMMISSION DECISION AT THE TIME.
AND I THINK THE, AS I UNDERSTAND IT, THE COMMISSION DID THAT WORK IN-HOUSE FOR A WHILE, THE ENFORCEMENT DIVISION AND THEN THE ACTUAL, THE, THE PUBLIC UTILITY COMMISSION SUBSTANTIVE RULE THAT 25 5 0 3 ACTUALLY HAS A SUBSECTION THAT SAYS THE COMMISSION CAN ASSIGN THIS ROLE, THIS RELIABILITY MONITOR ROLE TO OUR CUT.
IT IS SPECIFICALLY SAYS THAT, AND THE COMMISSION OPTED TO CHOOSE THAT OPTION.
AND, AND THAT'S WHAT THEY DID IN NOVEMBER OF 2022.
UM, WITH RESPECT TO OUR AUTHORITY, UH, IT IS, IT IS UNDER COMMISSION RULE UNFETTERED.
I MEAN, YOU KNOW, MARKET PARTICIPANTS MUST RESPOND TO OUR REQUESTS.
THEY MUST PROVIDE INFORMATION WE ASKED FOR.
UH, FORTUNATELY WE'VE NOT HAD ANY ISSUES WITH THAT.
MARKET PARTICIPANTS HAVE ALL BEEN VERY FORTHCOMING, VERY COOPERATIVE.
UM, YOU KNOW, WE'VE, WE'VE SENT OUT LOTS OF REQUESTS FOR INFORMATION.
UH, AS YOU CAN IMAGINE WITH HAVING SENT 60 MATTERS OVER TO THE ENFORCEMENT STAFF, THOSE ARE ONES THAT WENT ALL THE WAY THROUGH THE INVESTIGATION PROCESS.
SO, UM, WE'VE HAD, UH, WE ARE GIVEN BY STEP BY THE COMMISSION'S RULES, ESSENTIALLY UNFETTERED AUTHORITY.
I MEAN, OBVIOUSLY WE CAN'T ACT ARBITRARILY OR CAPRICIOUSLY, AND THEY COULD COMPLAIN TO THE COMMISSION IF WE DID, BUT, BUT, UH, IT'S BEEN VERY THOROUGH AND AS I SAY, OUR, WE'VE HAD GOOD SUCCESS SO FAR.
[00:50:01]
VERY HELPFUL.AND, UH, DO YOU PRESUMABLY WATCH FOR TRENDS WHAT THE ISSUES ARE AND REPORT MAYBE TO THE PDC? YES, MA'AM.
IN FACT, THAT'S, THAT'S, I WAS TALKING ABOUT THAT MONTHLY PERFORMANCE MONITORING THAT WE DO UNDER SECTION EIGHT OF THE PROTOCOLS.
THAT'S EXACTLY WHERE WE, WHERE WE SEE THE TRENDS, RIGHT? WE CAN SEE WHETHER A PARTICULAR KIND OF VIOLATION IS HAPPENING, UH, MORE FREQUENTLY THAN IT USED TO, OR IF A PARTICULAR MARKET PARTICIPANT, FOR EXAMPLE, IS STRUGGLING WITH A PARTICULAR AREA.
UM, AND THOSE KINDS OF THINGS.
WE ACTUALLY DO REPORT TO THE COMMISSION EVERY QUARTER.
WE, WE DO THE BUDGET REPORT ONCE ANNUALLY, BUT EVERY QUARTER WE DO AN UPDATE TO THE COMMISSION AND WE TALK ABOUT THINGS LIKE TRENDS AND PROBLEM AREAS AND AREAS OF CONCERN, THOSE KINDS OF KINDS OF THINGS.
LISA, PEGGY, I THINK I CAN, UH, ADD A LITTLE TO THAT.
SO THE COMMISSION DID A REVIEW OF ALL OF ITS CONTRACTS IN 2020.
IN NOVEMBER, OCTOBER, NOVEMBER OF 2020.
THE CONTRACT WITH THE RE WAS CANCELED, I THINK FOR TWO PRIMARY REASONS.
ONE, THE FUNCTION IS OUTSIDE OF THE TEXAS RE'S DELEGATED AUTHORITY FROM THE FEDS.
UM, AND SO THEY HAD TO RECEIVE PERMISSION TO DO THAT FUNCTION, I THINK AT LEAST EVERY TIME WE BID THE CONTRACT, IF NOT EVERY YEAR.
SECONDLY, UH, IN A REVIEW OF THE STATUTORY LANGUAGE, THE COMMISSIONERS BACK THEN BELIEVED THAT THE STATUTE ONLY ALLOWED FOR EITHER THE PUC OR ERCOT TO DO THIS FUNCTION.
AND SO FOR THOSE REASONS, THE CONTRACT WAS CANCELED AND WE WORKED WITH ERCOT ERCOT STAFF TO, TO MOVE THAT FUNCTION OVER HERE.
JULIE, THANKS FOR YOUR PRESENTATION.
I'M VERY MUCH INTERESTED IN WHAT THE PARETO ANALYSIS LOOKS LIKE OF THESE 220 TOTAL INVESTIGATIONS.
LIKE WHAT ARE THE TOP ONE, TWO, AND THREE TYPES OF RELIABILITY INFRACTIONS YOU'RE INVESTIGATING? OFF THE TOP OF MY HEAD, THAT'S VERY HARD TO ANSWER.
UM, WE DO HAVE THAT INFORMATION IN THOSE QUARTERLY REPORTS THAT WE SEND TO THE COMMISSION.
SO IF YOU'D LIKE, I CAN, YOU KNOW, AT THE BREAK I CAN TAKE A LOOK AND I CAN GIVE YOU BACK, UH, SOME INFORMATION.
I DO KNOW THAT, UH, PROBABLY THE SINGLE BIGGEST ONE WAS OUTAGE SCHEDULING ISSUES.
UM, THAT WOULD, THAT WE, I THINK THAT'S THE ONE, THE SINGLE HIGHEST.
UM, BUT AGAIN, IF I, I WOULD BE HAPPY TO GO PULL OUT OUR MOST RECENT REPORT THAT WE FILED AT THE COMMISSION AND, AND GIVE YOU BETTER DATA.
WELL, THE, THE TOPIC OF THE DAY IS, YOU KNOW, IBR RIDE THROUGHS ARE, ARE ANY OF THEM RELATED TO THAT? I'M STRUGGLING WITH WHETHER I'M ALLOWED TO SAY.
SO WE LOOK AT THOSE ISSUES TOO.
THAT WOULD BE WITHIN THE SCOPE OF A RELIABILITY REQUIREMENT.
IF THERE ARE PERFORMANCE ISSUES ON CURRENT REQUIREMENTS FOR RIDE THROUGH.
UM, YOU KNOW, AS ANDY TALKED ABOUT, THE RELIABILITY REQUIREMENTS COVER THE, THE ENTIRE STATE LAW.
AND SO CLEARLY THE CURRENT REQUIREMENTS, IRRESPECTIVE OF NORE 2 45, IF WE SEE PERFORMANCE ISSUES AND WHETHER IT'S ERCOT STAFF OR PARTICIPANT OR THE PEC, THEN THOSE WILL BE AN IDENTIFIED RELIABILITY REQUIREMENT THAT WE WOULD INVESTIGATE.
UM, I UNDERSTAND THE INDEPENDENT PART IS VERY IMPORTANT AND SHARING RESOURCES BACK AND FORTH.
IF YOU WERE ASKED TO POINT THAT YOU HAVE THOSE PROTECTIONS IN PLACE, WOULD YOU BE ABLE TO POINT THEM? I KNOW YOU KIND OF SHOW, GAVE A LITTLE BREAKDOWN OF HOW THOSE ARE SHARED, BUT DO YOU HAVE THE ADEQUATE PROTECTIONS SO THAT YOU'RE NOT CROSSING OVER, YOU'RE NOT AROUND THE PEOPLE THAT YOU'RE INVESTIGATING AS YOU'RE INVESTIGATING? UM, 'CAUSE IT'S SOMETHING THAT'S GONNA BE VERY IMPORTANT TO THE LEGISLATURES AND OTHERS TO MAKE SURE THAT'S HAPPENING CORRECTLY? YEAH, I, THE, THE, THE CODE OF CONDUCT THAT WE REQUIRE EVERYBODY TO SIGN IS VERY CLEAR ABOUT ACTING INDEPENDENTLY AND OBJECTIVELY.
WE, WE DON'T HAVE, FOR EXAMPLE, A SEPARATE WORKSPACE LIKE THE IMM DOES, YOU KNOW, HERE AT THE MET CENTER.
UM, BUT, BUT EVERYBODY WHO WORKS ON THE ERM MATTERS, UH, ESPECIALLY THOSE ASSIGNED TO IT A HUNDRED PERCENT OF THE TIME, UH, UNDERSTANDS THAT THERE IS, YOU KNOW, YOU CAN, WE CANNOT DISCUSS ANYTHING THAT, THAT'S ONE OF THE REASONS I KIND OF STUMBLED HERE IN TRYING TO ANSWER THAT LAST QUESTION WAS WE CAN'T DISCUSS ANYTHING ABOUT AN INVESTIGATION WITH ANYONE AT ERCOT OTHER THAN TO BE ASKING THEM QUESTIONS LIKE AS AN RFI OR SOMETHING, NOTHING, NOTHING HAPPENS, UH, UH, CASUALLY IF WE HAVE QUESTIONS, THEY GO AS AN RFI.
AND I THINK A COUPLE OTHER POINTS, IF YOU REALLY GO TO THE DEDICATED WEBPAGE WHERE THE RELIABILITY MONITOR SECTION IS, WE HAVE THE CODE OF CONDUCT ACTUALLY OUT THERE, SO YOU CAN SEE THE LANGUAGE WE COORDINATED WITH THE P'S ENFORCEMENT DIVISION ON WHAT THAT LANGUAGE LOOKED LIKE AS THE COMMISSION WAS MOVING FORWARD, THE ORDER IN THE FALL OF 2022.
[00:55:01]
THE SHAREPOINT ENVIRONMENT IS WALLED OFF FOR THE ERM EMPLOYEES.SO THAT'S ANOTHER, AND KIND OF ANDY TALKED ABOUT IF WE HAVE TO ASK AN ADDITIONAL EMPLOYEE TO WORK ON A SPECIFIC INVESTIGATION THAT GOES THROUGH THAT PROCESS TO GIVE 'EM ACCESS JUST FOR THAT SHAREPOINT, UH, FOLDER.
SO THERE ARE A LOT OF, UH, INTERNAL CONTROLS, BUT ALSO EVERYBODY CAN JUST GO TO THE WEBPAGE AND SEE ALL THE PUBLIC CONTROLS THAT WE PUT OUT THERE.
W WE TAKE TO HEART KIND OF THE STAKEHOLDER DISCUSSION THAT HAPPENED AT THE COMMISSION IN 2022 ABOUT THIS PERCEPTION ISSUE.
AND IT REALLY IS JUST A PERCEPTION ISSUE BECAUSE THE KEY TAKEAWAY FROM THE SLIDE IS WE DON'T MAKE THE FINAL DECISION, THE PC MAKES THE FINAL DECISION.
AND SO WE REALLY ARE JUST INVESTIGATORS THAT MAKE A RECOMMENDATION TO THE ENFORCEMENT DIVISION, WHO THEN LOOKS AT IT SEPARATELY FROM ALL THE DATA THAT WE'VE GIVEN THEM AND MAKE THEIR OWN DECISION WHETHER TO PURSUE THOSE INVESTIGATIONS INTO ENFORCEMENT ACTIONS IN FRONT OF THE COMMISSION.
AND THEN OF COURSE, THE COMMISSION HAS THE ULTIMATE FINAL DECISION.
SO TO THE EXTENT THAT AN INVESTIGATION IS PERFORMED AND THERE'S FINES THAT ARE ULTIMATELY LEVIED TO A MARKET PARTICIPANT, ARE THOSE FINES USED TO OFFSET THE COST OF THIS GROUP OR DO THOSE FINES GO SOMEWHERE ELSE? THOSE ADMINISTRATIVE FINES ARE UNDER THE PCS PER VIEW, AND I BELIEVE THEY COULD JUST GO THE GENERAL, UH, UH, FUND FOR THE STATE.
THEY, THEY GO STRAIGHT INTO GENERAL REVENUE FOR THE STATE.
I, I'LL JUST SAY ONE QUICK THING AS A FOLLOW UP TO WHAT CHAD SAID WAS, IN FACT, THE REPORTS THAT WE SEND OVER TO THE, TO THE COMMISSION ENFORCEMENT STAFF AT THE END OF A REVIEW IS ARE CALLED PRELIMINARY ASSESSMENT REPORTS.
SO THAT, THAT KIND OF, I THINK SAYS IT PRETTY WELL.
IT'S JUST OUR PRELIMINARY ASSESSMENT AS THE ERM AND THEN, AND THEN COMMISSION STAFF TAKES IT OVER FROM THERE.
THESE WERE OKAY, GREAT QUESTIONS.
[7. TAC Report]
AT THIS TIME, I'D LIKE TO INVITE COLIN MARTIN, VICE CHAIR OF THE TECHNICAL ADVISORY COMMITTEE TO PRESENT AGENDA ITEM SEVEN, THE TAC REPORT.THERE ARE TWO NON UNANIMOUS REVISION REQUESTS AS VOTING ITEMS UNDER THE TAX REPORT TODAY, NPRR 1197 AND GER 2 45.
AFTER CALLING REPORTS ON TAX RECOMMENDATIONS ON NPRR 1197 AND NO G 2 45 R AND M COMMITTEE CHAIR BOB FLEXON WILL REPORT ON THE R AND M COMMITTEE'S DISCUSSION AND RECOMMENDATIONS FOR NOGA 2 45.
WE MAY ALSO HEAR FROM ERCOT STAFF AND THE JOINT COMMENTERS.
COLIN, PLEASE PROCEED WITH THE TAC REPORT AND NPRR 1197.
THANK YOU CHAIR, FOSTER, AND GOOD MORNING.
UH, COLIN MARTIN, VICE CHAIR OF TAC FOR THIS YEAR, THE OPPORTUNITY TO ADDRESS THIS GROUP THIS MORNING.
UH, SO TAC MET ON MARCH 27TH AND APRIL 15TH.
UH, AND AS THE CHAIR MENTIONED, UH, WE RECOMMENDED APPROVAL OF FOUR REVISION REQUESTS.
I'D LIKE TO CALL YOUR ATTENTION TO A, A TYPO THAT WE HAVE ON THIS SLIDE.
THEY WERE NOT ALL FOUR UH, UNANIMOUS.
TWO OF THEM WERE UNANIMOUS AND TWO OF THEM HAD OPPOSING VOTES.
UH, AT THE MEETING, UH, IN MARCH TAC VOTED TO RECOMMEND APPROVAL OF FOUR REVISION REQUESTS.
UH, THE TWO UNANIMOUS ITEMS WERE ON YOUR CONSENT AND AGENDA THIS MORNING, AND THEY WERE, UH, NPRR 1205 REVISIONS TO CREDIT QUALIFICATION REQUIREMENTS OF BANKS AND INSURANCE COMPANIES AND RMGR 1 77.
UH, SWITCH HOLD REMOVAL, CLARIFICATION.
UH, THE TWO ITEMS THAT HAD OPPOSING VOTES WERE NPR 1197 AND GER 2 45, AND I'LL ADDRESS THOSE UH, SEPARATELY HERE IN A MOMENT.
AT THE APRIL TAC MEETING, ERCOT PRESENTED THE DETAILS OF THEIR ASSESSMENT OF THE SAN ANTONIO SOUTH RELIABILITY TWO RPG PROJECT.
UH, THIS INCLUDED DISCUSSION OF THE ORIGINAL PROPOSAL FROM BRAZOS ELECTRIC AND SOME ADDITIONAL RELIABILITY DRIVERS THAT ERCOT IDENTIFIED IN THEIR STUDIES THAT RESULTED IN THE ASSESSMENT OF ADDITIONAL OPTIONS AND ULTIMATELY THE RECOMMENDATION OF OPTION NUMBER 14.
UH, TECH REVIEWED THIS AND VOTED UNANIMOUSLY TO ENDORSE THIS ITEM AS PRESENTED BY ERCOT.
UH, THE FIRST REVISION REQUEST THAT HAD OPPOSING VOTES IS NPR 1197, OPTIONAL EXCLUSION OF LOAD FROM NETTING AT ERCOT, PULLED SETTLEMENT METERING FACILITIES, WHICH INCLUDE RESOURCES.
UH, THIS IS A REVISION REQUEST THAT WAS SPONSORED BY NG THAT ADDS THE ABILITY FOR RESOURCES TO SEPARATELY METER AND SETTLE LOADS LOCATED BEHIND THE EPS METERING POINT AT THE RESOURCES POINT OF INTERCONNECTION.
UH, THERE, THERE WAS ONE OPPOSING VOTE ON THIS REVISION REQUEST FROM THE COOPERATIVE SEGMENT, AND THERE WERE NO ABSTENTIONS.
THE REASONING FOR THE OPPOSING VOTE IS THAT THE MEMBER OPPOSES NPR 1197 AS IT CODIFIES INTO PROTOCOLS THE MEETING ARRANGEMENT THEY HAD ATTEMPTED TO
[01:00:01]
PROHIBIT IN A PREVIOUS NPRR 1197, WHICH WAS, UH, REJECTED A FEW MONTHS AGO.UH, IF YOU GO BACK TO SOME OF THE DISCUSSION AND THE RECORD ON NPRR 1194.
UH, THE, THE, THE BASIS FOR THE OBJECTION IN, IN THE BACKGROUND THERE IS, IS, UH, MORE OF A GENERAL OBJECTION TO HOW NETTED LOADS ARE TREATED IN THE PROTOCOLS IN RELATION TO ENERGY STORAGE RESOURCES.
UH, MOVING ON TO NOER 2 45, AND I'LL GIVE A MUCH MORE ABBREVIATED SUMMARY.
UH, AS COMPARED TO, UH, THE DISCUSSION YESTERDAY AT THE R AND M COMMITTEE, UH, ERCOT INITIATED NOGA 2 45 IN RESPONSE TO GROWING PENETRATIONS OF IVRS AND INCREASES IN THE VOLUME AND MAGNITUDE OF DISTURBANCES BEING OBSERVED IN WHICH IIV WERE NOT ABLE TO RIDE THROUGH EVENTS.
UH, THIS NOGA PROPOSES TO REPLACE THE CURRENT VOLTAGE RIDE THROUGH REQUIREMENTS FOR INTERMITTENT RENEWABLE RESOURCES WITH VOLTAGE RIDE THROUGH REQUIREMENTS FOR IBR AND TYPE ONE AND TYPE TWO WIND GENERATION RESOURCES, AND ALSO PROVIDES NEW FREQUENCY RIDE THROUGH REQUIREMENTS FOR THOSE RESOURCES WITH INTERCONNECTION AGREEMENTS DATED AFTER JUNE 1ST, 2024.
UH, NOGA 2 45 HAS BEEN AN EXTREMELY ACTIVE TOPIC IN THE STAKEHOLDER PROCESS.
UH, SINCE, SINCE ERCOT FILED NOGA 2 45 IN JANUARY OF 2023.
SIGNIFICANT DISCUSSIONS HAVE TAKEN PLACE IN MULTIPLE STAKEHOLDER GROUPS, INCLUDING TAC, UH, RELIABILITY AND OPERATIONS SUBCOMMITTEE, OPERATIONS, WORKING GROUP DYNAMICS, WORKING GROUP, AND THE INVERTER BASED RESOURCE TASK FORCE.
UH, THE NOGA HAS BEEN UNDER DISCUSSION AT TAX SINCE SEPTEMBER OF LAST YEAR, AND IT'S BEEN DISCUSSED AT LENGTH ON MANY OCCASIONS, UH, AS ERCOT SOUGHT ADDITIONAL INFO FROM, FROM OEMS AND RESOURCE ENTITIES AND STAKEHOLDERS COLLABORATED IN ATTEMPT TO, TO REACH A CONSENSUS ON LANGUAGE.
AT THE MARCH MEETING, TWO SETS OF COMMENTS WERE REVIEWED.
UH, ONE, ONE SET OF COMMENTS WAS FROM ERCOT AND THE OTHER WAS FROM JOINT COMMENTERS, WHICH IS MADE UP OF IN ENERGY NEXTERA SOUTHERN POWER, AVAN GRID, AND CLEARWAY.
UH, TAC HAD A ROBUST DISCUSSION, UH, BOTH OF THESE SETS OF COMMENTS AND, AND MUCH OF THE DISCUSSION WAS CENTERED AROUND FIVE KEY AREAS.
UH, AND THOSE WERE THE, THE EFFECTIVE DATE OF THE STANDARD, WHETHER IT SHOULD BE, UH, JUNE 1ST, 2023, AS PROPOSED BY ERCOT OR JUNE 1ST, 2024, AS PROPOSED BY THE JOINT COMMENTERS BASED ON CONCERNS OF, UH, APPLYING SOME OF THESE REQUIREMENTS IN A RETROACTIVE FASHION AS OPPOSED TO HAVING AN EARLIER DATE THAT CAPTURES A, A LARGE CHUNK OF RESOURCES THAT HAVE ACTIVE INTERCONNECTION AGREEMENTS AS OF THE EARLIER JUNE 20, 22, 20 23 DATE.
UH, OTHER AREAS WERE TECHNICAL REQUIREMENTS AND THE MECHANICS OF THE EXCEPTION PROCESS FOR THOSE REQUIREMENTS.
UH, RELATED TO THAT, THE CONCEPT OF COMMERCIAL REASONABILITY, UH, WHEN ADDRESSING THOSE TECHNICAL REQUIREMENTS AND EXCEPTIONS AND WHO MAKES THAT, THAT DETERMINATION ON WHAT IS COMMERCIALLY REASONABLE, UH, DISCONNECTION PROVISIONS WERE ALSO DISCUSSED AND QUANTIFICATION OF THE RELIABILITY RISK RELATED TO THIS ISSUE.
VARYING OPINIONS WERE EXPRESSED ON EACH OF THESE TOPICS, AND IT WASN'T POSSIBLE BASED ON THE, THE STRUCTURE OF THE COMMENTS TO TAKE A CAFETERIA STYLE APPROACH IN REAL TIME AT THE MEETING BASED ON THE, THE FOUNDATIONAL LANGUAGE DIFFERENCES AND THE LEGAL TONE OF THE COMMENTS COMING FROM DIFFERENT STARTING POINTS.
SO, TAG NUMBERS WERE FACED WITH CHOOSING BETWEEN ONE OF THE TWO PACKAGE OPTIONS AND WEIGHING THE RELIABILITY AND ECONOMIC IMPACTS OF THEIR OPTIONS, GIVEN THAT THE ITEM HAS BEEN ATTACKED FOR, FOR MULTIPLE MONTHS AND APPEARED TO HAVE REACHED A POINT WHERE ADDITIONAL PROGRESS BETWEEN ERCOT AND THE JOINT COMMENTERS WAS UNLIKELY.
SO AT THE MARCH MEETING, TAC VOTED ON THREE VERSIONS OF COMMENTS.
UH, THE, THE FIRST VOTE WAS ON THE ERCOT VERSION.
UH, THAT VOTE FAILED WITH A 44% APPROVAL.
THE SECOND VOTE WAS ON THE JOINT COMMENTER'S VERSION, AND THAT VOTE NARROWLY FAILED.
WITH A 65% APPROVAL, TWO THIRDS VOTE IS REQUIRED TO, UH, MOVE A RECOMMENDATION FORWARD FROM TAC, AND THE THIRD VOTE WAS ON THE JOINT COMMENTER'S VERSION WITH SOME ADDITIONAL CHANGES THAT WERE PROPOSED BY THE RETAIL ELECTRIC PROVIDER SEGMENT TO TAKE A PIECE OUT OF THE, THE ERCOT COMMENTS AND MOVE IT INTO THE JOINT COMMENTER'S COMMENTS, UH, THAT ESSENTIALLY WOULD REQUIRE ERCOT APPROVAL FOR MODIFICATIONS AND REPOWERS, UH, TO BASICALLY ENSURE THAT ANY, ANY NEW EQUIPMENT OR CHANGES THAT, THAT WERE MADE TO AN EXISTING IBR, UH, WOULDN'T MAKE THE SITUATION WORSE FROM A RIDE THROUGH STANDPOINT.
UH, THE TAC MEMBERS SUPPORTING THE COMPROMISE WANTED TO REACH A COMPROMISE SO THAT AN APPROVAL RECOMMENDATION WOULD COME OUT OF TAC WITH THE STAKEHOLDER POINT OF VIEW, AND ALSO AVOID, YOU KNOW, THE POTENTIAL OF HAVING TWO SEPARATE APPEALS ON THE SAME NOER, UH, IN FRONT OF THE BOARD.
AND THAT VOTE PASSED WITH A 69% APPROVAL RATING ON THE FINAL VOTE, THERE WERE EIGHT TAC MEMBERS FROM THE COOPERATIVE AND INVESTOR OWNED UTILITY MARKET SEGMENTS THAT VOTED IN OPPOSITION TO THE JOINT COMMENTERS VERSION.
THE PRIMARY REASONS NOTED THAT ARE ON THE SCREEN HERE, UH, WERE THE POTENTIALLY SIGNIFICANT AND NEGATIVE RELIABILITY RISKS THAT ERCOT HAD ARTICULATED.
UH, IT'S NOTABLE THAT ONE OF THE OPPOSING ENTITIES NOTED CONCERNS WITH ERCOT PROPOSED APPROACH TO BACKDATING THE EFFECTIVE DATE AND HOW THAT CREATES REGULATORY UNCERTAINTY
[01:05:01]
FOR FUTURE INVESTORS.IN ADDITION TO THE EIGHT OPPOSING VOTES, THERE WERE THREE ABSTENTIONS, TWO FROM THE CONSUMER SEGMENT, AND ONE FROM THE INDEPENDENT GENERATOR SEGMENT.
UH, GIVEN THE NARROW MARGIN OF APPROVAL, UH, TAC LEADERSHIP ALSO SOUGHT FEEDBACK FROM ALL OF THE, UH, MARKET PARTICIPANTS THAT VOTED AFFIRMATIVELY ON THE JOINT COMMENTERS VERSION, AND I THOUGHT IT'D BE HELPFUL TO PROVIDE A SUMMARY THERE.
UH, SO THE FEEDBACK THAT WE GOT FROM ALL OF THE, UH, ENTITIES VOTING TO APPROVE WAS ESSENTIALLY, UH, THAT THEY FEEL THAT IT PROVIDES A REASONABLE BALANCE IN IMPACTS AND BENEFITS FROM A RELIABILITY AND IMPACT AND ECONOMIC STANDPOINT.
UH, THERE WAS A NEED TO MOVE THIS FORWARD TO ADDRESS THE RELIABILITY RISK AND GET REQUIREMENTS ON THE BOOKS FOR THE EVER-GROWING INTERCONNECTION QUEUE.
UH, THE CONCERN THAT A RETROACTIVE COMPLIANCE STATE THAT AS PROPOSED BY ERCOT WOULD CREATE REGULATORY UNCERTAINTY AND IS A MATERIAL CONCERN FOR INVESTOR CONFIDENCE AND, AND SOME UNCERTAINTY ON THE, THE MAGNITUDE AND THE ACTUAL REMAINING RELIABILITY RISK THAT WOULD REMAIN AFTER RESOURCES ARE UPGRADED WITH COMMERCIALLY REASONABLE EFFORTS.
YOU KNOW, THE SOFTWARE PARAMETER CHANGES AND THINGS OF THAT NATURE, UH, WHICH IN, IN A LOT OF OUR DISCUSSION DOES ADDRESS A VAST MAJORITY OF THE RESOURCES, UH, THAT ARE IN QUESTION.
SO THAT CONCLUDES MY COMMENTS.
I'LL BE HAPPY TO TAKE ANY QUESTIONS.
UH, QUESTIONS? THERE'S NO QUESTIONS.
I THINK, UH, BOB FLEXON IS ONLINE TO GIVE THE R AND M COMMITTEE UPDATE.
THANK YOU, CHAIR, FOSTER, AND COLIN.
UM, SO ON THE FIRST NPRR 1197, THE OPTIONAL EXCLUSION OF LOAD FROM NETTING AT ERCOT HOLD SETTLEMENT METERING FACILITIES, WHICH INCLUDES RESOURCES.
THE COMMITTEE VOTED TO RECOMMEND THAT THE BOARD APPROVE NPR 1197 AS RECOMMENDED BY TAP.
SO DID YOU, SO WE NEED A MOTION, UH, TO APPROVE.
SO WE NEED A MOTION FROM THE BOARD.
OPPOSED ANY OBSESSIONS OR OBJECTIONS? THE SECOND ITEM WAS NO, 2 45.
THE INVERTER BASED RESOURCE RIDE THROUGH REQUIREMENTS, WHICH IS AGENDA ITEM 7.1 0.2.
SO THE COMMITTEE VOTED TO RECOMMEND THAT THE BOARD REMAND NUMBER 2 45 BACK TO TAP.
AND AS THE R AND M COMMITTEE CHAIR, I'D LIKE TO SEE TAC PROVIDING MORE DETAILED SET OF COMMENTS ON WHATEVER VERSION OF NO 2 45 COMES BACK TO US FOR CONSIDERATION IN JUNE, AND THOSE COMMENTS SHOULD AT LEAST EXPLAIN THE POLICY RATIONALE ON WHY IT DID OR DID NOT ADDRESS ER COTS KEY CONCERNS THAT WERE LAID OUT IN ITS PRESENTATION TO THE RM COMMITTEE YESTERDAY.
I KNOW
SINCE WE ALL AGREE THIS IS A CRITICAL RELIABILITY ISSUE FOR THE ERCOT SYSTEM, I EXPECT THAT WILL BRING BACK 2 45 FOR OUR CONSIDERATION, UH, AT OUR JUNE MEETING.
SO WITH THAT, THE RECOMMENDATION TO THE BOARD IS TO REMAND THIS BACK, UH, TO TAP AND, UH, TO DO SO WITH THE FEEDBACK COMING BACK AT THE JUNE MEETINGS.
SO WITH THAT, I WOULD NEED A MOTION TO APPROVE THAT, YES.
UH, PEGGY AND A SECOND BY CARLOS.
UM, ANY FURTHER COMMENTS OR ABSTENTIONS? ALL IN FAVOR? A AYE.
ANYTHING FURTHER? NOT AT THIS POINT.
[8. Finance and Audit (F&A) Committee Report]
SO THAT TAKES US TO OUR COMMITTEE REPORTS.UM, FIRST, UH, BILL FLORES WILL PRESENT AGENDA ITEM EIGHT, THE FINANCE AND AUDIT COMMITTEE REPORT, WHICH HAS THREE ASSOCIATED VOTING ITEMS. BILL, UH, THANK YOU CHAIR, FOSTER, UH, THE COMMITTEE MEMBERS VOTED TO, WELL, THE COMMITTEE HAD THREE VOTING ITEMS TO RECOMMEND A BOARD APPROVAL.
ALL THREE ARE FOR THE ACCEPTANCE OF ERCO T'S 2023 AUDITED FINANCIAL STATEMENTS.
UH, THE COMMITTEE VOTED TO RECOMMEND THAT THE BOARD ACCEPT ALL THREE OF ERCO T'S UH, 2023 AUDITED FINANCIAL STATEMENTS, WHICH ARE BOARD AGENDA ITEMS 8.1, 8.2, AND 8.3.
THESE FINANCIAL STATEMENTS ARE FOR ERCOT CONSOLIDATED FINANCIAL STATEMENTS, THE TEXAS ELECTRIC MARKET STABILIZATION FUND FUNDING, M, SPECIAL PURPOSE ENTITY, AND TEXAS ELECTRIC MARKET STABILIZATION FUNDING AND SPECIAL PURPOSE ENTITY.
ALL THREE AUDIT OPINIONS ARE UNMODIFIED OR WHAT USED TO BE REFERRED TO AS CLEAN OPINIONS.
UH, THERE WERE NO REPORTED ITEMS TO NOTE.
SO ON BEHALF OF THE FINANCE AND AUDIT COMMITTEE,
[01:10:01]
I MOVE THAT THE BOARD ACCEPT THE 2023 FINANCIAL STATEMENT AUDIT REPORTS FOR ERCOT CONSOLIDATED, UH, TM, T-E-M-F-S-M AND T-E-M-F-S-N AS PRESENTED BY BAKER TILLEY.ALL RIGHT, DO WE HAVE A SECOND ON THAT? SECOND BY JOHN? UM, ALL IN FAVOR? ANY OPPOSED? ANY ABSTENTIONS? ALL RIGHT.
AND THEN IN ADDITION TO THESE THREE VOTING ITEMS, THE COMMITTEE MEMBERS DISCUSS THE NORMAL COMMITTEE BRIEFS THAT WE HAVE, UH, FOR EACH IN F AND A MEETING, WHICH INCLUDED FINANCIAL PERFORMANCE INVESTMENTS IN OUR DEBT COMPLIANCE.
UH, WITH RESPECT TO THE FINANCIAL PERFORMANCE OF THE, OF THE ORGANIZATION, UH, THE COM THE, UH, ERCOT CONTINUES TO EARN INVE AND INTEREST INCOME WELL ABOVE WHAT WAS ORIGINALLY BUDGETED.
UH, AS WE'VE DISCUSSED IN THE PAST, THIS IS NOT AUTOMATICALLY, UH, CONSIDERED TO BE FUNDS THAT ARE, UH, CAN BE EXPENDED OUTSIDE OF THE BUDGET, UH, RATHER THEY'RE, UH, KEPT AND RESERVED TO BE USED FOR FUTURE BUDGET PERIODS AS NECESSARY.
[9. Human Resources and Governance (HR&G) Committee Report]
HIGG WILL PRESENT AGENDA ITEM NINE, WHICH IS THE HRG COMMITTEE REPORT.UM, AND I BELIEVE THERE ARE NO VOTING ITEMS. PEGGY? YEP.
THANK YOU CHAIR FOSTER, WE HAD A VERY SHORT, UH, HUMAN RESOURCES AND GOVERNANCE COMMITTEE UH, THIS MONTH.
WE, UH, HAVE NO VOTING ITEMS AS YOU SAID, AND WE DID HEAR AN ANNUAL REPORT FROM THE ERCOT RETIREMENT PLAN COMMITTEE AND THE ANNUAL REPORT OF THE HEALTH AND WELFARE ACTIVITIES FOR THE BOTH REPORTS FOR THE 12 MONTHS ENDING 12 31 23.
[10. Reliability and Markets (R&M) Committee Report]
UM, AND NEXT WE GO BACK TO BOB FOR AGENDA ITEM 10, WHICH IS HIS R AND M COMMITTEE REPORT.BOB, OR IS THAT, UM, WRONG BUTTON THERE.
SO WE'VE GOT THREE VOTING ITEMS, UM, IN ADDITION TO THE COMMITTEE'S RECOMMENDATION REGARDING THE TWO REVISION REQUESTS THAT THE BOARD CONSIDERED A MOMENT AGO, UH, DURING AGENDA ITEM SEVEN, THE COMMITTEE YESTERDAY CONSIDERED AND RECOMMENDS BOARD APPROVAL OF THREE ADDITIONAL ITEMS FOUND IN THE MEETING MATERIALS.
THE FIRST IS THE SAN ANTONIO SOUTH RELI SELF RELIABILITY TWO PROJECT COMPLETED THE RPG REVIEW AND WAS ASSESSED BY THE ERCOT STAFF AND RECEIVED UNANIMOUS ENDORSEMENT BY TAC.
THAT OPTION 14 MEETS THE RELIABILITY REQUIREMENTS FOR THE ERCOT SYSTEM AND WOULD ADDRESS THERMAL OVERLOADS AND VOLTAGE VIOLATIONS IN THE SAN ANTONIO AREA.
SO ERCOT STAFF ALSO RECOMMENDED DESIGNATING THE PROJECT AS CRITICAL TO RELIABILITY, WHICH ACCELERATES THE ADMINISTRATIVE TIMELINE.
SO I MOVE THAT THE BOARD ENDORSED THE NEED FOR THE TIER ONE SAN ANTONIO SOUTH RELIABILITY TWO REGIONAL PLANNING GROUP PROJECT, WHICH IS OPTION 14 AND DESIGNATE THE PROJECT AS CRITICAL TO THE RELIABILITY OF THE ERCOT SYSTEM PURSUANT TO PUC RULES AS RECOMMENDED BY THE R AND M COMMITTEE.
SO WITH THAT, I'LL NEED A MOTION.
ALRIGHT, UM, OKAY, I THINK YOU MADE THE MOTION BOB AND SECOND BY CARLOS.
ANY OPPOSED? ALRIGHT, THAT PASSES BACK TO BOB.
SO THE SECOND ONE IS THE REAL TIME AND DAY AHEAD MARKET PRICES FOR CERTAIN OPERATING DAYS IN JANUARY, 2024 THAT WERE AFFECTED BY THE USE OF INCORRECT RATINGS FOR CERTAIN TRANSMISSION ELEMENTS.
AND I MOVE THAT THE BOARD APPROVE THE PROPOSED CORRECTION OF THE REAL TIME.
THEY HAD MARKET PRICES FOR CERTAIN OPERATING DAYS IN JANUARY, 2024, AS RECOMMENDED BY THE RM COMMITTEE.
ALL RIGHT, AND DO WE HEAR A SECOND? SECOND, JULIE? ALL IN FAVOR? AYE.
ANY OPPOSED? ALL RIGHT, BOB, THAT THE THIRD ITEM IS THE REAL TIME MARKET PRICES FOR SETTLEMENT INTERVIEWS ON THE OPERATING DAY OF FEBRUARY 28TH, 2024 WERE AFFECTED BY THE USE OF INCORRECT GENERIC TRANSMISSION CONSTRAINT SHIFT FACTORS.
SO I MOVE THAT THE BOARD APPROVE THE PROPOSED CORRECTION OF REALTIME MARKET PRICES FOR THE OPERATING DAY, FEBRUARY 28TH, 2024, AS RECOMMENDED BY THE RM COMMITTEE.
ALL RIGHT, SECOND BY COURTNEY.
ANY OPPOSED? THAT MOTION PASSES.
ANYTHING ELSE, BOB? YES, THANKS CHAIR.
UH, JEFF MCDONALD, THE NEW DIRECTOR OF THE IMM FOR ERCOT, PRESENTED A VERBAL UPDATE REGARDING THE, I'S ONGOING STUDIES, INCLUDING THE FORTHCOMING STATE OF THE MARKET REPORT FOR THE ERCOT ELECTRICITY MARKETS.
THE SYSTEM'S OPERATIONS BRIEF INCLUDED AN UPDATE
[01:15:01]
ON THE PROGRESS OF NPR 1224 REGARDING ERCOT CONTINGENCY RESERVE SERVICE OR ECRS.THE MANUAL DEPLOYMENT TRIGGERS TO FORMALIZE THE MECHANISM TO BE USED TO RELEASE ECRS WHEN SECURITY CONSTRAINED ECONOMIC DISPATCH IS SHORT.
AND FINALLY, ANOTHER BUSINESS ERCOT STAFF DISCUSSED THE MARKET NOTICE THAT WAS ISSUED YESTERDAY MORNING ON THE RELIABILITY ANALYSIS FOR THE CPS ENERGY GENERATION RESOURCES FOR WHICH CPS SUBMITTED.
NOTICE OF SUSPENSION OF OPERATIONS BEGINNING APRIL OF 2025 PER COTS RELIABILITY ANALYSIS IDENTIFIES PERFORMANCE DEFICIENCIES FOR WHICH THESE GENERATION RESOURCES HAVE A MATERIAL IMPACT UNDER THE CRITERIA DESCRIBED IN THE PROTOCOL.
SO THAT WOULD CONCLUDE MY REPORT CHAIR, FOSTER.
ALRIGHT, ANY QUESTIONS? THANK YOU, BOB.
[11. Technology and Security (T&S) Committee Report]
UM, NEXT, UH, JOHN SWAINSON WILL PRESENT AGENDA ITEM 11, WHICH IS THE TNS COMMITTEE REPORT.UH, I HAVE NO VOID ITEMS, UH, THAT EMANATE OUT OF OUR COMMITTEE.
UH, WE LOOKED AT THREE TOPICS IN THIS COMMITTEE.
WE DO AT, AT EVERY MEETING, A PROJECT AND TECHNOLOGY UPDATE.
UH, WE HAVE ABOUT 60 PROJECTS ONGOING AT ANY POINT IN TIME, UH, IN, AT ERCOT IN THE TECHNOLOGY AREA.
AND JP GAVE US AN UPDATE ON THOSE OF PARTICULAR NOTE.
I WOULD HIGHLIGHT THE FACT THAT, UH, WE'VE HAD A PROJECT TO SHORTEN THE LENGTH OF TIME IT TAKES US TO DO SITE FAILOVER.
IT USED TO, WE USED TO TAKE FOUR DAYS, UH, IN A TEST MODE.
WE ARE DOWN TO ONE DAY, WHICH OF COURSE GETS MUCH, MUCH CLOSER TO A REAL LIFE SITUATION, SO THAT WOULD BE VERY POSITIVE.
UM, WE ALSO DISCUSSED A PERFORMANCE ISSUE WITH THE CONGESTION RATES, REVENUE AUCTIONS THAT ARE TAKING SIGNIFICANTLY LONGER TO RUN.
THIS IS A PROBLEM THAT HAS BEEN BUILDING FOR THE LAST THREE OR FOUR MONTHS.
UM, AND WE WENT THROUGH A DISCUSSION OF WHAT TECHNICAL CHANGES ERCOT COULD MAKE, UH, TO IMPROVE THAT.
AND, AND, AND SOME OF THOSE CHANGES DO APPEAR IN THE LATEST AUCTION TO HAVE, HAVE MADE A DIFFERENCE.
UM, AT, AT EACH MEETING WE LOOK AT THE REAL TIME CO-OP OPTIMIZATION PROJECT, GIVEN ITS IMPORTANCE TO THE FUTURE OF THE ERCOT MARKET.
UM, WE ARE IN THE RELATIVELY EARLY STAGES OF PLANNING FOR THAT.
UM, WE STILL HAVE A GO LIVE DATE IN 26, BUT, UH, THE CRITICAL PHASE AHEAD OF US NOW IS TO GET THE REQUIREMENTS IN PLACE BY SEPTEMBER OF THIS YEAR AND TO START COMMUNICATING THE IMPACT OF THOSE REQUIREMENTS ON MARKET PARTICIPANTS.
SO WE HAD THAT UPDATE AND WE'LL CONTINUE TO GET IT.
THE LAST UPDATE WE HAD WAS INFORMATIONAL, AND THAT WAS ON THE ERCOT INNOVATION SUMMIT.
UH, VEN KA UH, PROVIDED US AN UPDATE ON THE AGENDA.
UH, THIS LOOKS LIKE A REALLY GREAT AGENDA.
WE HAVE A THOUSAND PEOPLE NOW SIGNED UP, UM, 400 IN PERSON.
WE'RE AT CAPACITY IN PERSON AND WE HAVE ANOTHER 600, UH, WHO ARE SIGNING UP VIRTUALLY.
AND, AND WE HAVE OBVIOUSLY MORE CAPACITY VIRTUALLY.
UM, THE, THERE, THERE WILL BE THE, THE FORMAT WILL BE, WE HAVE A, WE HAVE A KEYNOTE SPEAKER, UM, THAT PABLO WILL INTRODUCE.
AND THEN WE HAVE, UH, SIX PANELS RANGING IN TOPICS FROM EMERGING GRID TECHNOLOGY, UH, ALL THE WAY THROUGH TO RELIABILITY AND, AND THINGS LIKE THAT.
SO IT LOOKS LIKE, IT LOOKS LIKE IT'S GONNA BE A REALLY GREAT DAY IN MAY.
UM, THE LAST ITEM BEFORE WE MOVE TO EXECUTIVE SESSION AS AGENDA ITEM 12, OTHER BUSINESS.
WOULD ANY BOARD MEMBER LIKE TO RAISE ANY OTHER BUSINESS? UH, HEARING NONE.
[Convene Executive Session]
AT THIS TIME, THE BOARD WILL ADJOURN GENERAL SESSION AND CONVENE AN EXECUTIVE SESSION.THERE ARE SEVERAL VOTING ITEMS BEING DISCUSSED IN EXECUTIVE SESSION.
SO GENERAL SESSION WILL RECONVENE AFTER THE CONCLUSION OF EXECUTIVE SESSION.
GENERAL SESSION IS NOW RECESSED AND THE WEBCAST WILL BE SUSPENDED.
UM, LET'S TAKE A SHORT BREAK BEFORE WE START.
EXECUTIVE SESSION CHAIR GLEASON.
THIS MEETING OF THE PUBLIC UTILITY COMMISSION WILL STAND IN RECESS.
[Reconvene General Session]
UM, GOOD AFTERNOON.I'M PAUL FOSTER ERCOT, BOARD CHAIR.
THE GENERAL SESSION OF THIS MEETING IS NOW RECONVENED AND I DON'T BELIEVE YOU NEED TO RECONVENE THE PUBLIC UTILITY COMMISSION.
[13. Vote on Matters from Executive Session]
UM, WE HAVE SEVERAL VOTING ITEMS FROM EXECUTIVE SESSION.THREE OF THE VOTING ITEMS ARE RELATED.
SO I WOULD LIKE TO ADDRESS THOSE THREE ITEMS IN ONE MOTION.
IF POSSIBLE, I'LL ENTERTAIN A MOTION TO APPROVE THE SELECTION OF BAKER TILLY AS THE INDEPENDENT FINANCIAL AUDITOR
[01:20:01]
TO PERFORM THE, THE FOLLOWING FOR THE YEAR ENDING DECEMBER 31ST, 2024.FIRST, THE FINANCIAL STATEMENTS AUDIT, SERVICER CERTIFICATE REPORT, AND FORM NINE 90 REVIEW FOR ERCOT INC.
SECOND, THE FINANCIAL STATEMENTS AUDIT AND CONSOLIDATION.
CONSOLIDATION PROCEDURES FOR TEXAS ELECTRIC MARKET STABILIZATION FUND FUNDING MLLC AND THREE, THE FINANCIAL STATEMENTS, AUDIT AND CONSOLIDATION PROCEDURES FOR TEXAS ELECTRIC MARKET STABILIZATION FUNDING.
MR. CHAIR, ON BEHALF OF THE FINANCIAL AND AUDIT COMMITTEE, I MAKE THAT MOTION.
ALRIGHT, DO WE HAVE A SECOND? COURTNEY? THANK YOU.
ANY OPPOSED? THAT MOTION PASSES.
NEXT, I'LL ENTERTAIN A MOTION TO APPROVE THE RISK MANAGEMENT MATTER DISCUSSED DURING EXECUTIVE SESSION UNDER E ES 2.2 0.1.
MR. CHAIRMAN, I'LL MAKE THAT MOTION ON BEHALF OF THANK YOU.
THANK HUMAN RESOURCE AND GOVERNANCE COMMITTEE.
THE MEETING OF THE ERCOT BOARD OF DIRECTORS IS NOW ADJOURNED AND THE WEBCAST WILL BE CONCLUDED.