Jun 17, 2024 Reliability and Markets Committee Meeting

NOW CONSIDER AGENDA ITEM FOUR, RECOMMENDATION REGARDING COMMITTEE CHARTER, THE AMENDMENTS CORRESPOND, UPDATES TO THE BOARD POLICIES AND PROCEDURES, AND CLARIFY OTHER COMMITTEE PRACTICES.

ANY ABSTENTIONS OR OPPOSITION CONSIDER THE MINUTES PAST.

WE'LL

[4. Recommendation regarding Committee Charter]

WOULD ANY COMMITTEE MEMBER LIKE TO DISCUSS OR MAKE A MOTION TO RECOMMEND THE BOARD APPROVE THE R AND M COMMITTEE CHARTER CONSISTENT WITH THE RED LINES? I'D LIKE TO JUST COMMENT THAT IT, I'M GLAD IT'S A LIVING DOCUMENT AND WE UPDATE IT ACCORDINGLY.

I'M HAPPY TO MAKE A MOTION MOTION BY JULIE SECOND BY CARLOS.

BEGIN WITH ITEM 5.1, WHICH IS NPRR 1224 ECRS MANUAL DEPLOYMENT TRIGGERS.

ANY ABSTENTIONS OPPOSITION, CONSIDER THAT PASSED AS WELL.

SO NOW WE'LL TAKE UP AGENDA ITEM FIVE, TAC REPORTING REGARDING THE R AND M COMMITTEE CHARTER REVISION REQUEST RECOMMENDED FOR BOARD APPROVAL.

THERE ARE TWO REVISION REQUESTS TO VOTE ON TODAY.

WE'LL

[5.1 NPRR1224, ECRS Manual Deployment Triggers – URGENT ]

TECHNICAL ADVISORY COMMITTEE CHAIR CAITLYN SMITH WILL PRESENT THE TAC REPORT.

CAITLYN, PLEASE PROCEED WITH NPRR 1224, AFTER WHICH WE'LL ENTERTAIN ANY COMMENTS AND POSSIBLY A VOTE BY THE COMMITTEE BEFORE PROCEEDING TO THE NEXT REVISION REQUEST.

OKAY, THANK YOU.

GOOD AFTERNOON.

I AM KAITLYN SMITH, CHAIR OF THE TECHNICAL ADVISORY COMMITTEE, AND WE WILL START, AS YOU SAID, WITH NPR 1224, UM, NPR 1224.

REGARDING ECRS MANUAL DEPLOYMENT TRIGGERS, IT INTRODUCES A TRIGGER THAT ERCOT MAY USE TO MANUALLY RELEASE CCRS FROM SCED DISPATCHABLE RESOURCES.

WHEN THE SYSTEM POWER BA POWER BALANCE CONSTRAINT IS CONSISTENTLY VIOLATED BY AT LEAST 40 MEGAWATTS FOR 10 CONSECUTIVE MINUTES, THE NPRR ALSO REQUIRES THAT THE ENERGY OFFER CURVES FOR CAPACITY ASSIGNED TO ECRS BE OFFERED AT NO LESS THAN $750 PER MEGAWATT HOUR.

THE ORIGINAL PROPOSAL FOR THIS NPRR CAME FROM AN IMM CONCEPT OR RECOMMENDATION TO RELEASE BLOCKS OF ECRS AT CERTAIN AMOUNTS

[00:05:01]

OF UNDER GENERATION.

UM, THE INITIAL PROPOSAL WAS FOR A TRIGGER AT A POWER BALANCE CONSTRAINT VIOLATION OF 30 MEGAWATTS.

ERCOT DID PRESENT STAKEHOLDERS DATA REGARDING NEW DEPLOYMENTS THAT WOULD'VE OCCURRED, UM, IF IF THIS HAD BEEN IMPLEMENTED WITH THE IMPLEMENTATION OF ECRS DUE TO THESE TRIGGERS.

AND THEN, UM, ALSO DAYS THAT WOULD'VE HAD BOTH HAD HAD ECRS UNDER CURRENT CONDITIONS.

AND WITH THIS OPTION AND STAKEHOLDERS ARRIVED AT THE 40 MEGAWATT THRESHOLD INSTEAD OF THE 30 MEGAWATT THRESHOLD.

THE COMPROMISE POSITION WITH THIS 40 MEGAWATT THRESHOLD THAT WAS VOTED THROUGH TAC AND AGAIN, TAC VOTES REQUIRE A SUPER MAJORITY, SO IT'S TWO THIRDS ON A SIMPLE MAJORITY.

UM, THIS POSITION ALSO INCLUDED A PRICE FLOOR AND THE, THE PRICE FLOOR OF SEVEN 50.

THE INTENTION OF THIS PRICE FLOOR WAS TO MIMIC THE PRICE OF THE ANCILLARY SERVICE DEMAND CURVE FOR ECRS.

IT WOULD BE IN, IN PLACE WITH REALTIME CO-OP OPTIMIZATION AND CORRESPOND TO A RELEASE OF 500 MEGAWATTS OF ECRS.

THE REASONING THAT TAC MEMBERS HAD BEHIND THE CORRESPONDENCE OF THIS PRICE FLOOR TO MIMIC WHAT WOULD HAPPEN UNDER RTC IS THAT ONE OF THE STATED CAUSES OF MAYBE THE PERCEIVED INEFFICIENCIES OF ECRS LAST SUMMER WAS THAT ACCELERATED IMPLEMENTATION OF ECRS AHEAD OF RTC RESULTED IN HIGHER PRICING OUTCOMES BECAUSE UNDER RTC WE WOULD'VE MADE AND, AND WILL MAKE REAL-TIME DECISIONS TO FOREGO, UM, ANCILLARY SERVICES IN, IN FAVOR OF ENERGY.

SO WE ARE KIND OF TRYING TO MIMIC THAT.

THE 750 NUMBER SPECIFICALLY, UM, CAME FROM ERCOT ANALYSIS THAT WAS PRESENTED TO TAX WHOLESALE MARKET SUBCOMMITTEE.

THAT THE AVERAGE PRICE AT WHICH 500 MEGAWATTS OF ECRS IS TRADED OFF FOR ENERGY UNDER RTC IS $780 PER MEGAWATT HOUR DURING PEAK SUMMER CONDITIONS.

SO DURING A BIG PART OF THE YEAR, IT WOULD BE HIGHER THAN THAT.

AND THE SLIDES HERE, FOUR AND FIVE HAVE OUR EXPLANATION FOR THE OPPOSING TAX VOTES.

SO WE DID HAVE OPPOSITION ON THIS ONE, UM, 10 OPPOSING VOTES FROM TWO SEGMENTS, SIX OPPOSING VOTES IN THE CONSUMER SEGMENT, AND FOUR OPPOSING VOTES IN THE IRE SEGMENT.

SO IT WAS TWO ENTIRE SEGMENTS THAT WERE AGAINST AND ALL OTHER SEGMENTS WERE UNANIMOUS.

THE OPPOSING VOTES FOCUSED ON, UM, BASICALLY SUPPORTING THE ORIGINAL CONCEPT IN THIS NPRR, WHICH WAS THE EARLIER DEPLOYMENT OF, OF BLOCKS OR CHUNKS OF ECRS, BUT THE OPPOSITION WAS TO THE PRICE FLOOR AND THERE WAS A FEELING OF ONE OF TWO THINGS, EITHER INSTITUTING AN OFFER FLOOR WAS ENTIRELY INAPPROPRIATE OR THAT THE OFFER FLOOR WAS MAYBE OKAY, BUT SHOULD BE LOWER NUM SPECIFIC NUMBERS THAT WERE MENTIONED WERE 250 OR $500 PER MEGAWATT HOUR.

UM, AND THE OPPOSING VOTERS FELT THAT THE 750 NUMBER, UH, AND I KNOW THAT IMM WILL ARTICULATE THIS, UM, THAT THE ATTEMPT TO EQUATE THE 500 MEGAWATT RELEASE OF ECRS TO THE, THE SHORTAGE HAD, THERE WAS SOME CONCERNS WITH THAT APPROACH AND THERE WAS NO REAL ADDITIONAL ANALYSIS TO THE $750 AMOUNT.

AND THEN ALSO OPPOSING VOTERS FELT LIKE THE CURRENT LANGUAGE AND THE NPRR WOULD JUST CONTINUE HIGH COSTS AND INEFFICIENCIES.

AND, AND SEVERAL COMMENTERS NOTED THAT IN THE HIGHEST LOAD HOURS OF THE SUMMER, THERE'S NO NEED TO PROCURE SO MUCH ECRS.

AND I WOULD JUST NOTE THAT NO VERSION OF THIS NPR REALLY CHANGED PROCUREMENT OF ECRS.

SO SOME OF THOSE CONCERNS ARE NOT WHOLLY RELATED HERE.

AND WE DID GET A NUMBER OF COMMENTS FOLLOWING THE TAC VOTE.

UM, JUNE 4TH COMMENTS FROM THE IMM JUNE 6TH COMMENTS FROM ASPIRE POWER VENTURES, JUNE 10TH, COMMENTS FROM JOINT COMMENTERS REPRESENTING CONSUMERS, SO TIEC, OPEC, RESIDENTIAL CONSUMER OR CUT STEEL MILLS, CMC STEEL, CITY OF EASTLAND, LYONDELL, BASIL.

AND THEN ON THE SAME DAY, I BELIEVE A DIFFERENT SET OF JOINT COMMENTERS ON THE GENERATION SIDE, TEXAS COMPETITIVE POWER ADVOCATES, LCRA AND NG JUNE 12TH.

SOME SORT OF REPLY COMMENTS FROM THE IMM.

AND THEN ON JUNE 15TH, WE DID GET COMMENTS FROM ERCOT.

SO THAT CONCLUDES MY TECH PRESENTATION ON NPR 1224.

SO WE CAN PAUSE THERE FOR YEAH, THANKS.

OTHER COMMENTERS? YEAH, THANKS CAITLIN.

I THINK BEFORE WE GO TO THE JOINT COMMENTERS, UM,

[5.1.1 ERCOT Comments on NPRR1224]

DID ERCOT HAVE, UH, ANY ADDITIONAL COMMENTS, PARTICULARLY ON THE FLOOR ATTORNEY, EITHER TO WOODY OR TO DAN TO TALK ABOUT THE, HOW THE FLOOR WAS SET? YEAH, SO I GUESS THE, THE, THAT FLOOR WAS SET BASED ON SOME ANALYSIS THAT WAS DONE BY THE MARKETS GROUP TO LOOK AT HOW THE, UM, HOW, WHAT WOULD, HOW DID THAT

[00:10:01]

COMPARE TO THE, UH, KIND OF HOW THE ORDC CURVE WAS DECOM, UH, POSED IN FOR RTC PURPOSES.

AND THAT WAS ON KIND OF ON THE, WITHIN THE RANGE OF WHEN WE WOULD BE RELEASING ECRS UNDER RTC SOMEWHAT ON THE LOWER END OF THAT RANGE, I GUESS, YOU KNOW, WE, WE, UM, DON'T HAVE ANY SPECIFIC, UM, GUIDANCE ON THIS PARTICULAR ONE.

WE'RE OKAY WITH THE TAC RECOMMENDATION.

UM, WE, WE TEED UP THIS NPRR TO REALLY, UM, ALLOW, ALLOW THE POLICY DISCUSSION TO HAPPEN RELATED TO WHAT THE, UH, KNOWING AFTER ALL THE DISCUSSION THAT HAPPENED LAST SUMMER ABOUT THAT WE DIDN'T RELEASE ECRS EARLY, THAT IT WAS, UH, COSTING MONEY TO KEEP THOSE THINGS IN RESERVES, WHICH YOU'D EXPECT THAT THEY, IT DOES.

THAT'S, THAT'S A NATURAL THING THAT HAPPENS WHEN YOU KEEP THINGS IN RESERVE.

BUT THAT, UH, IF WE'RE GOING TO RELEASE IT EARLY OR IN ORDER TO MITIGATE SOME OF THOSE PRICE IMPACTS, HOW MUCH EARLIER SHOULD WE RELEASE IT? AND THAT'S REALLY THE, THE GIST OF THIS NPRR AND WHY WE WERE, WE'RE TEEING THIS UP FOR THE DISCUSSION.

SO, UM, WE DON'T HAVE A LOT OF GUIDANCE TO ADD ON WHAT'S THE RIGHT LEVEL TAN.

IS THERE ANY PARTICULAR RISK IF YOU'RE RELEASING IT AT A LOWER LEVEL? CERTAINLY IF YOU WERE RELEASING IT ALL OF THE TIME, WE'D WANT IT TO BE RELEASED AT A, AT A HIGHER PRICE.

AND THERE IS A SUBSEQUENT NPRR, UM, UM, 1232, I THINK THAT'S THE RIGHT NUMBER THAT THAT WILL RELEASE THE, UH, THAT WILL LEAVE ECRS RELEASED ALL THE TIME BEHIND A, A PRICE FLOOR.

AND BECAUSE WE, UH, WOULDN'T UNDER, UNDER THIS NBRR, OUR OPERATORS STILL CONTROL WHEN THE RELEASE ACTUALLY HAPPENS.

SO IF IT'S GONNA INCUR SOME, UH, UH, RELIABILITY PROBLEM, THEY COULD THROTTLE HOW MUCH THEY RELEASE AND WHEN UNDER, UNDER THIS, UH, 1232, IT'S GONNA BE RELEASED ALL THE TIME TO SCAD AND YOU.

UH, SO WE WOULD WANT IN UNDER THOSE CIRCUMSTANCES TO DEFINITELY BE AT A HIGHER FLOOR, UM, TO VALUE APPROPRIATELY VALUE THE RELIABILITY BENEFIT OF THAT BEING A RESERVE THAT CAN, CAN YOU, CAN YOU FURTHER ANSWER BOB'S QUESTION? BECAUSE YOU SPECIFICALLY ASKED, ARE THERE RISKS IF IT IS RELEASED LOWER CONSISTENTLY AT A LOWER PRICE POINT? CAN YOU ADDRESS THE, THE OPERATIONAL RISKS ASSOCIATED WITH THAT? THANK YOU.

I KNEW THERE WAS, I KNEW I WAS FORGETTING A PIECE.

UM, THE, UM, IF, IF WE RELEASE IT EARLIER, THEN THERE EASIER S RESERVES HAVE A CERTAIN CHARACTERISTIC AND THAT IS THAT THEY'RE GONNA BE AVAILABLE TO COVER RAMP, CHARACTER RAMP IF, IF THE SYSTEM STARTS TO RAMP EITHER 'CAUSE OF LOAD OR, OR SOMETHING THAT IT CAN BE USED, UH, WITHIN 10 MINUTES, UM, AND BE AVAILABLE.

AND THERE'S NO GUARANTEE IF WE RELEASE IT TO SCD THAT WHAT RESERVES ARE RETAIN WOULD THEN BE AVAILABLE.

IT'LL FREE UP SOME HEADROOM ON UNITS, BUT THERE'S NO GUARANTEE THAT THAT HEADROOM WILL ALSO LIKEWISE BE AVAILABLE WITHIN 10 MINUTES TO COVER THOSE, THOSE, UM, RESERVES.

AND SO THAT'S, IT'S REALLY THAT CHARACTERISTIC THAT WE'RE BUYING THAT QUICK ACTING CHARACTERISTIC THAT, THAT WE'RE BUYING IN ECRS.

AND IF WE RELEASE IT ALL THE TIME AT A LOW OR, OR, OR AT A LOW PRICE LEVEL, UH, WE WOULDN'T, THERE WOULD BE NO GUARANTEE THAT WE'D HAVE THAT 10 MINUTE RESERVE.

HAVE IT AT TOO LOW OF LEVEL, IF, IF IT, IF IT'S, IF IT'S RELEASED BEFORE THE LOAD TURNS OFF, THEN THAT SOLVES THE PROBLEM.

SO, AND MY TAKEAWAY FROM THAT IS THAT WE, BY DOING IT AT THIS LEVEL, WE HAVE A HIGHER LEVEL OF RELIABILITY, IF YOU WILL, BECAUSE WE'VE PRESERVED THOSE TYPE OF RAMPING CHARACTERISTICS.

CERTAINLY MORE, MORE, MORE ASSURANCE THAT THAT 10 MINUTE RESERVE WILL BE AVAILABLE.

ANY ANY QUESTIONS ON THE AIR COMPOSITION BEFORE WE BOB REAL? IF WE COULD FINISH, THERE'S ONE OTHER PART TO THE, TO DAN'S ANSWER, IF I COULD JUST ASK HIM TO AUGMENT IT, WHICH IS THE IMPACT OF DEMAND RESPONSE AND THE POTENTIAL FOR HOW DURING A SCARCITY EVENT, THE BEHAVIOR OF DEMAND RESPONSE AT LOWER PRICES VERSUS HIGHER PRICES.

YEAH, SO, SO UM, IF WE RELEASE IT AT, UH, LET'S SAY THIS IS GONNA BE A LITTLE MORE COMPLICATED, BUT IF WE RELEASE IT AT A HIGHER, UH, IF PRICES GET A LITTLE HIGHER, THEN WE RELEASE IT AND THERE'S NO FLOOR PRICES GO BACK DOWN.

IF YOU LOOK AT THAT FROM A LOAD PERSPECTIVE, IT COULD BE THAT THE, UM, UM, SOME OF THE PRICE SENSITIVE DEMAND HAS TURNED OFF BECAUSE PRICES WENT UP AND THEN WE RELEASE THE ECRS.

IF THE, THE OFFERS UNDER THAT IN THE ECRS ARE LOW, THEN SCED SEES THAT CAPACITY, IT STARTS TO USE IT, PRICES GO DOWN BELOW, THOSE PRICE SENSITIVE DEMANDS COULD GO BACK UP.

THEN THE LOAD GOES UP AND WE GET TIGHT AGAIN.

WE HAVE TO RELEASE A LITTLE MORE ECRS, AND, AND YOU GET INTO KIND OF AN OSCILLATION THING WHERE THE LOAD IS TURNING ON AND OFF.

UH, IF YOU

[00:15:01]

OR IF IT'S RELEASED AT A HIGHER, WHERE THERE'S A HIGHER PRICE FLOOR WHERE THE LOAD THAT PRICE SENSITIVE DEMAND NEVER TURNS BACK ON, THAT SOLVES THE PROBLEM AS WELL.

UH, BUT, BUT THAT'S ONE OF OUR ONE, UH, PROBABLY OUR OTHER RELIABILITY CONCERN IS THIS LOAD OSCILLATION THING WITH, WITH THE AMOUNT OF PRICE SENSITIVE DEMAND THAT WE HAVE TODAY, WE WON'T, DON'T WANT TO GET INTO A SITUATION WHERE IT'S TURNING ON AND OFF BECAUSE OF THE RELEASE OF ECRS.

ANY OTHER QUESTIONS FOR, FOR DAN BEFORE WE MOVE TO DR. PATTON? I DID, YOU RAN DATA.

DID YOU, WAS THERE ANY OTHER NUMBER THAT IS LOWER THAN SEVEN 50 WHERE YOU WOULD FEEL COMFORTABLE? I, UH, I'M TRYING TO RECALL THE RANGE.

I CAN'T LOOK AT YOU YET.

THE, THE MARKETS FOLKS DID THIS.

UH, BUT I THINK THE RANGE WAS FROM 500 TO 2000 OR SOMETHING ALONG THAT LINE THAT, UH, THAT THAT WOULD BE WHERE IT WOULD BE RELEASED UNDER RTC.

AND SO AT 500, WAS THAT A ADEQUATE, THAT WAS KIND OF THE, I THINK THAT WAS THE LOW END, IF I'M RECALLING CORRECTLY.

WELL, IT WOULD BE HELPFUL TO THOSE OF US NOT INTIMATELY FAMILIAR WITH THE DATA AND OPERATIONS TO UNDERSTAND IS THIS SEVEN 50, HOW DID, DOES IT COMPARE TO HOW ECRS HAS BEEN RELEASED IN THE PAST? LIKE DID IT HIT THE SEVEN 50.5% OF THE TIME? 50% OF THE TIME? BECAUSE IF, IF MY UNDERSTANDING IS CORRECT, THERE WAS NO PRICE PRICE FLOOR HISTORICALLY, AND NOW WE'RE ADOPTING A PRICE FLOOR.

YEAH, SO, SO WE, WE GENERALLY ARE, WE'RE BUYING IT AND RELEASING ECRS TO COVER, UH, FORECAST ERRORS WHEN WE ARE RAMPING UP AND RUNNING OUT.

UM, AND THAT'S, THAT'S THE GENERAL REASON THAT WE WOULD RELEASE IT.

UM, BUT IF WE GET INTO NEAR SCARCITY CONDITIONS TO WHERE OTHERWISE WE'RE, WE'RE RUNNING OUT, WE WOULD, WE RELEASE IT EARLIER.

AND, AND THAT'S, THAT'S REALLY BEEN THE, THE QUESTION HERE IS WE'LL STILL HAVE THE OTHER TRIGGERS THAT WE USED LAST YEAR, BUT SHOULD WE RELEASE IT EARLIER? SO THE, THE ASSUMPTION IN THE NPRR IS THAT IT WOULD BE RELEASED THAT THIS, WHATEVER THE LEVEL IS, WOULD CAUSE IT TO BE RELEASED EARLIER.

NOW, WHAT WE ORIGINALLY PROPOSED WAS BASING THAT ON WHEN SC IS, UH, LOOKING AT THE POWER BALANCE PENALTY CURVE, AND WHEN IT'S GETTING UP TO WHERE IT'S 30 MEGAWATTS SHORT, UH, THEN THAT, THEN IT WOULD RELEASE IT.

AND SO THAT WAS WHAT WE ORIGINALLY PROPOSED WAS BASING IT ON HOW SHORT WE WERE RATHER THAN ANY KIND OF PRICE TRIGGER OR FLOOR.

IN GENERAL, IN GENERALLY, THAT, THAT TIES TO WHAT WE, WHAT WE DID LAST YEAR.

IT'S A, IT'S A, IT'S A, UM, MORE PRECISE TRIGGER PERHAPS THAN WHAT WE USED LAST YEAR, BUT IT'S THE SAME ORDER OF MAGNITUDE.

SO I GUESS REQUEST FOR OR COURTNEY OF , SORRY, ONE MORE QUESTION.

AND I KNOW YOU'RE TALKING 1232 AND THEN THERE'S RTC.

WELL, WHATEVER THIS AMOUNT IS ADOPTED AT IS GOING TO STAND, RIGHT.

THAT DOESN'T CHANGE WITH 1232 COMING IN OR RTC, I THINK 1232, WE'D HAVE TO HAVE THE DISCUSSION.

AGAIN, I, THE, IT'S, IT'S NOT TIED TO THIS, THIS NUMBER THE WAY IT'S SAID IN 1232 CURRENTLY, OF COURSE, THAT'S STILL UNDER DISCUSSION IN THE STAKEHOLDER PROCESS.

OUTCOMES THAT MAINTAIN THE RELIABILITY OF THE SYSTEM.

AND MOVE TO DR. PATTON AND DR. PATTON

[5.1.2 Other Comments on NPRR1224, if any]

CAN YOU HEAR? WHOA, .

ALL RIGHT.

SO IT'S GREAT TO BE HERE AGAIN.

I THINK LAST TIME I SAW YOU WAS IN DECEMBER.

UH, AND I APPRECIATE THE OPPORTUNITY TO SPEAK ON THIS.

I, UM, I JUST CAME DOWN BASICALLY FOR THIS TALK, UM, IN PART BECAUSE I THINK THIS IS IS ONE OF THE MOST IMPORTANT VOTES TO APPROVE SOMETHING THAT YOU'LL, YOU'LL EVER TAKE.

UM, THE KEY OBJECTIVES OF ANY COMPETITIVE, UH, ANY DEREGULATED WHOLESALE MARKETS IS THAT THEY BE, THEY PRODUCE EFFICIENT AND COMPETITIVE

[00:20:01]

AND I'LL BE EXPLAINING TO YOU TODAY THAT THAT NPRR 1224 VIOLATES ALL THREE OF THOSE OBJECTIVES.

UM, AND, AND FURTHER EXPLAIN THAT THERE'S NO NEED FOR AN NPRR TO ADDRESS THE SORT OF PROBLEMS THAT WE SAW IN, IN 2023.

UM, AND WE'LL BE HAPPY TO ANSWER ANY QUESTIONS.

UM, SOME OF MY CONCLUSIONS, AND I'LL EXPLAIN THEM ABOUT THE RELIABILITY IMPLICATIONS OF, OF NOT APPROVING THIS NPRR ARE DIFFER FROM WHAT YOU JUST HEARD FROM ERCOT.

AND I'LL ALSO EXPLAIN WHY THAT'S THE CASE.

IF I CAN ADVANCE THE SLIDES.

THAT IS, OH, THERE WE GO.

SO THIS IS THE CRITICAL PICTURE TO REALLY UNDERSTAND WHEN YOU'RE THINKING ABOUT THIS NPRR, AND I THINK THERE'S A LOT OF MISUNDERSTANDING ABOUT WHAT ECR IS, HOW IT OPERATES IN THE MARKET, AND, UM, AND WHAT IT MEANS TO DEPLOY ECRS, WHICH IS VERY DIFFERENT IN ERCOT THAN DEPLOYING RESERVES IN ANY OTHER RTO.

AND THAT'S, THAT'S CRITICALLY IMPORTANT TO UNDERSTAND.

SO ON, ON THE LEFT HERE IS THE, THE PICTURE OF WHAT HAPPENS BEFORE YOU DEPLOY ECRS.

SO I THINK THE LABELS ARE, OH, THERE WE GO.

SO ON THE BOTTOM YOU CAN SEE THE, UM, THIS IS ILLUSTRATIVE WHERE YOU HAVE 10 UNITS THAT ARE IN THE REAL TIME MARKET AND AVAILABLE TO THE REAL TIME MARKET DISPATCH, WHICH WE CALL SC.

SO SC CAN SEE THOSE 10 UNITS AND IS, IS ADJUSTING THE DISPATCH EVERY FIVE MINUTES SO THAT THE SUPPLY EQUALS THE DEMAND.

AND THEN BECAUSE IT DOESN'T USE ALL OF THE, THE MEGAWATTS ON THESE ONLINE RESOURCES, THERE'S, THERE'S SOME RESERVES THAT ARE DISTRIBUTED THROUGHOUT THE SYSTEM, AND WE CAN CALL THAT HEADROOM.

AND THEN YOU HAVE, YOU HAVE ECRS AND RRS OTHER RESOURCES THAT HAVE BEEN PROCURED BUT ARE NOT VISIBLE TO SCAD.

AND IT'S LARGELY BECAUSE WE DON'T HAVE A, A JOINTLY OPTIMIZED SYSTEM.

SO I'VE DRAWN A, A MAROON LINE THERE THAT'S SUPPOSED TO REPRESENT A BRICK WALL BETWEEN SC AND THE, THE VARIOUS UNITS THAT ARE HELD IN RESERVE.

THOSE UNITS GENERALLY ARE, ARE GAS TURBINES AND BATTERIES.

WHAT'S INTERESTING ABOUT THOSE UNITS, BEFORE WE HAD ECRS, THESE ARE THE TYPES OF UNITS THAT WOULD BE SELF COMMITTED BY PARTICIPANTS ONCE THEY SAW PRICES RISING.

BUT NOW THAT WE PROCURE THEM AS ECRS AND WALL THEM OFF, UH, WE CAN'T GET THEM ONLINE IN THE SAME WAY THAT THEY USED TO COME ONLINE HISTORICALLY.

NOW THE CRITICAL PICTURE IS THE RIGHT PICTURE BECAUSE THIS IS WHERE ALL THE CONFUSION COMES IN.

UM, THERE'S A NOTION THAT WHEN YOU DEPLOY ECRS, THAT SOMEHOW YOU NOW HAVE LESS RESERVES THAN YOU HAD BEFORE.

AND IT'S, IT IS THE ENTIRE LOGIC FOR THE 750 HOUR OFFER FLOOR.

UM, BUT THAT'S NOT TRUE.

THESE MEGAWATTS DON'T DISAPPEAR WHEN YOU TURN THEM ON.

WHAT HAPPENS IS THEY BECOME VISIBLE TO SCED, SCED MAY TURN THE UNITS ON, AND IN MY PICTURE HERE, IT TURNED A COUPLE OF GAS TURBINES ON AND THEN IT RAMPED DOWN, UH, THE DISPATCH ON OTHER UNITS.

UM, SO WHAT YOU SHOULD THINK OF, UH, IS HAPPENING HERE IS YOU'RE GOING FROM A SET OF OFFLINE RESERVES TO ONLINE RESERVES, WHICH IMPROVES RELIABILITY FOR A VARIETY OF REASONS.

UM, SO, UM, THE WAY IN WHICH THIS IMPROVES RELIABILITY, AND WE'VE SEEN THOSE PLAYED OUT IN ACTUAL MARKET RESULTS, IS SOMETIMES THESE ECRS UNITS ARE ESSENTIAL FOR MANAGING TRANSMISSION CONSTRAINTS ON THE SYSTEM, BUT THEY CAN'T BE ACCESSED BY ERCOT.

UM, SO WE'VE SEEN SIGNIFICANT PROBLEMS EPISODICALLY WITH THAT, BUT REVEALING THEM TO SC MAKES THEM AVAILABLE TO NOT ONLY TO TO RESOLVE CAPACITY TIGHTNESS, BUT BUT TO MANAGE CONGESTION.

UM, AND SECONDLY, WHAT, WHAT, WHAT TYPICALLY HAPPENS, THE REASON WHY THESE THESE RESOURCES ARE MORE RELIABLE ONCE YOU'VE DEPLOYED THEM IS THAT WHEN YOU HOLD RE UH, RESERVES ON HEADROOM ON ONLINE UNITS, IT TENDS TO BE DISPERSED THROUGHOUT THE SYSTEM.

AND WHEN SCED NEEDS THOSE MEGAWATTS, THEY START RAMPING RIGHT AWAY.

IN OTHER WORDS, BECAUSE THEY'RE ONLINE, UM, SCED WILL SEND A DISPATCH SIGNAL AND YOU'LL START GETTING THE, THOSE RESERVES DEPLOYED VERSUS IF YOU DON'T DEPLOY THE ECRS AND YOU WAIT,

[00:25:01]

TWO THINGS HAPPEN.

ONE IS YOU FORCE THE, THE SCED TO GO SHORT AND YOU RELY ON OTHER THINGS TO TRY TO KEEP FREQUENCY FROM, FROM DIPPING.

YOU RELY MORE ON REGULATION, UH, WHICH WHICH IS NOT A GOOD THING.

AND SECONDLY, AFTER 10 MINUTES, WHEN YOU TURN, DO TURN AROUND TO START, THESE GAS TURBINES HAVE START FAILURES THAT ARE NON-ZERO.

SO IT'S EVERY OTHER RTO THAT WE MONITOR PREFERS SPINNING RESERVES OR ONLINE RESERVES TO OFFLINE RESERVES FOR THAT REASON.

SO YOU'LL, YOU'LL TEND TO, TO, TO DEEM RESERVES, UH, MORE RELIABLE WHEN THEY'RE, ONCE THEY'RE ONLINE.

AND IMPORTANTLY, YOU HAVE THE SAME NUMBER OF MEGAWATTS AFTER YOU'VE DEPLOYED.

SO YOU, YOU'RE NOT GIVING UP THE VALUE OF THOSE MEGAWATTS.

YOU'RE ACTUALLY MAKING THEM MORE VALUABLE BY ALLOWING THE DISPATCH MODEL TO USE THEM TO MANAGE CONGESTION AND TO RESPOND IMMEDIATELY TO PER TO SUPPLY DEMAND AND BALANCES.

NOW, THE, UM, NOW THEN THERE'S THE QUESTION OF, OF PRICING, UM, AND I THINK ONE WHICH IS, WHICH IS THE PURPOSE OF THE OFFER FLOOR.

UM, WELL, LET ME JUST CLOSE OUT THIS DISCUSSION BY SAYING WHAT YOU SHOULD TAKE AWAY FROM THIS IS NO RTO SHOULD DELIBERATELY ALLOW THEIR DISPATCH MODEL TO GO SHORT.

LIKE WHETHER YOU'RE IN A OPTIMIZ SYSTEM OR NOT IN A CO OPTIMIZ SYSTEM, IT'S NEVER A GOOD IDEA TO DELIBERATELY CONCEAL RESOURCES FROM THE REAL TIME MARKET AND FORCE IT INTO A POSITION WHERE IT CAN'T, UH, KEEP SUPPLY AND DEMAND I BALANCE.

SO THAT GOES TO THE DEPLOYMENT TRIGGER.

THE OTHER SIDE OF THIS EQUATION IS THE OFFER FLOOR AND THE OFFER FLOOR, UH, DEALS ALMOST ENTIRELY WITH PRICING.

SO WHAT YOU'VE HEARD AS THE JUSTIFICATION FOR THE $750 OFFER FLOOR IS THAT, WELL, WE THINK THIS IS WHERE THE PRICE WOULD BE IF WE HAD REAL TIME CO-OP OPTIMIZATION.

BECAUSE IF YOU WENT SHORT OF, OF 10 MINUTE RESERVES UNDER A CO OPTIMIZ SYSTEM, YOU'D BE GOING UP THE DEMAND CURVE FOR RESERVES AND IT WOULD SET PRICES AT $750 ONLY.

THAT'S NOT WHAT'S HAPPENING HERE.

WE'RE NOT GOING SHORT OF RESERVES WHEN WE DEPLOY ECRS.

SO IT'S A, IT'S A NICE, IT'S A, IT'S AN APPEALING SOUNDING ARGUMENT, BUT IT'S COMPLETELY INVALID.

NOW, YOU DO HAVE A MECHANISM TO PRICE WHEN YOU'RE GOING SHORT OF RESERVES.

IT'S CALLED THE ORDC AND IT'S RELIABLE.

ORDC CALCULATES YOUR RESERVE LEVELS.

AND IF FOR WHATEVER REASON, UH, YOU'RE HEADED TOWARDS A RESERVE SHORTAGE, UH, A RESERVE SHORTAGE, PRICES WILL RISE.

AND YOU DON'T NEED THIS ARTIFICIAL MECHANISM TO FORCE PRICES UP TO $750.

AND IT IS WHY THE, YOU SHOULD EXPECT THE PRICES IF THIS IS APPROVED NOT TO BE EFFICIENT AND COMPETITIVE IN THESE CIRCUMSTANCES.

IF YOU WANNA ADVANCE TO, I NEED TO, WHAT NUMBER ARE WE STUCK? OKAY, I'M JUST, SORRY.

OKAY, THERE WE GO.

PERFECT.

UM, OKAY, SO THESE ARE THE TWO KEY QUESTIONS.

SHOULD ERCOT WAIT TO DEPLOY ECRS UNTIL ED IS SHORT? OBVIOUSLY I'VE SAID NO RTO SHOULD DO THAT, AND, UH, TO MY KNOWLEDGE, NO, RTO DOES DO THAT.

UM, WHAT, WHAT EFFECTIVELY HAPPENS WHEN YOU WAIT UNTIL ED IS SHORT IS YOU TRICK THE DISPATCH MODEL INTO THINKING THAT, THAT THERE'S A SHORTAGE GOING ON WHEN THERE'S ACTUALLY NOT A SHORTAGE IN, IN ALMOST EVERY CIRCUMSTANCE.

UM, AND THEN THE, THE, WE, WE TALKED A LITTLE BIT ABOUT THE $750 OFFER FLOOR, THAT THERE'S NO REASONABLE BASIS FOR THE 750.

THERE'S ONE ARGUMENT, UM, SUPPORTING,

[00:30:01]

APPLYING AN OFFER FLOOR TO THESE MEGAWATTS.

AND I'VE EXPLAINED WHY THAT'S, THAT'S NOT A VALID ARGUMENT.

UM, SO, UM, SO LET ME SORT OF SUMMARIZE OUR, OUR VIEW OF THIS AND, AND I'LL TALK A LITTLE BIT ABOUT, LIKE, WE'VE ALWAYS BEEN OPPOSED TO THE $750 OFFER FLOOR.

WE'VE, WE'VE TRIED TO MAKE THE TRIGGER LESS SEVERE, UH, BUT WE'VE DONE SOME NEW ANALYSIS OF THE IMPORTANCE OF THE TRIGGER.

AND, AND SO I'LL EXPLAIN THAT JUST BRIEFLY, UM, AS STATED, WHAT THE NPR LOOKS LIKE IS AN INSTITUTIONAL SCHEME TO WITHHOLD GENERATION TO RAISE PRICES WHERE PRIOR TO THE TRIGGER BEING MET, YOU ARE PHYSICALLY WITHHOLDING RESOURCES AND AFTER DEPLOYMENT YOU'RE ECONOMICALLY WITHHOLDING RESOURCES, WHICH IS WHY THE PRICES THAT WOULD RESULT FROM THIS ARE CLEARLY NOT COMPETITIVE.

WE'VE ESTIMATED THAT IF THIS NPRR WERE IN PLACE IN 2023, IT WOULD, IT WOULD'VE GENERATED $5.7 BILLION OF ARTIFICIAL MARKET COSTS, WHICH IS, WHICH IS CLEARLY LOWER THAN THE 12 AND A HALF BILLION, BUT IT'S STILL AN ENORMOUS AMOUNT OF INEFFICIENT COSTS THAT CAN BE RESOLVED BY IMPROVING THE DEPLOYMENT TRIGGERS.

UM, NOW THE, I MADE A COMMENT AT THE BEGINNING THAT THERE'S NO NEED FOR THIS NPRR.

UM, I THINK THERE, THE ONE NEED FOR THIS NPRR IS, IS YOU WOULD NEED A PROTOCOL TO IMPOSE THE, THE $750 OFFER FLOOR.

IF THE $750 OFFER FLOOR IS NOT REASONABLE, THEN THE DEPLOYMENT SIDE OF THIS IS, IS UNDER THE AUTHORITY OF ERCOT AS THE OPERATOR OF THE SYSTEM TO ESTABLISH DEPLOYMENT, UH, PROCEDURES THAT ARE REASONABLE.

AND EVERY OTHER RTO THAT I KNOW OF HAS PROCEDURES FOR HOW THEY DEPLOY OPERATING RESERVES.

I'M NOT, I DON'T RECALL A SINGLE INSTANCE WHERE ANY OTHER RTO, AT LEAST THE ONES THAT WE MONITOR, ASKED PARTICIPANTS TO TELL THEM HOW TO DEPLOY THEIR OPERATING RESERVES, BECAUSE FUNDAMENTALLY THAT'S A, A RELIABILITY DECISION.

SO I DON'T, I DON'T THINK THERE'S A NEED FOR THIS, SO I DON'T THINK THAT YOU'RE OBLIGATED TO APPROVE IT.

UM, SO MY RECOMMENDATION TO THE BOARD IS NOT TO APPROVE THE NPRR, BUT SECONDLY TO TO DIRECT ORCO STAFF TO DEVELOP IMPROVED PROCEDURES VERSUS WHAT THEY HAD IN PLACE LAST YEAR THAT WOULD, THAT WOULD DEPLOY ECRS IN ANTICIPATION OF A SCED SHORTAGE.

I DON'T THINK THEY SHOULD ALWAYS BE DEPLOYED BECAUSE BY DEPLOYING THEM ALL THE TIME, WHAT'S, WHAT WOULD HAPPEN IS YOUR ECRS, UM, YOUR ECRS PROCUREMENTS WOULD RESULT IN MORE SUPPLY THAN, THAN WHAT THE COMPETITIVE MARKET WOULD NATURALLY GIVE YOU IN REAL TIME.

BUT TO THE EXTENT THAT ERCOT OPERATIONS IS FORECASTING A, A SCED SHORTAGE, THAT'S AN APPROPRIATE TRIGGER TO, TO DEPLOY THE RESOURCES.

WE HAD PREVIOUSLY NOT RECOGNIZED HOW BIG AN ISSUE IT IS TO ALLOW THE SCED TO GO SHORT, UH, EVEN FOR ONE INTERVAL.

BUT IN, IN ESTIMATING THE COST OF THE NPRR, WHAT WE DISCOVERED WAS THAT EVEN AT A HUNDRED DOLLARS OFFER FLOOR, WHICH A LOT OF, A LOT OF FOLKS, UH, COALESCED AROUND IN, WHICH WE DON'T THINK WOULD, WOULD SIGNIFICANTLY DISTORT THE PRICES, UM, HAVING A, HAVING A TRIGGER THAT REQUIRES THAT SCHEDULE GO SHORT AND ESPECIALLY GO SHORT FOR 10 MINUTES, UM, RETAINS $1.7 BILLION OF THE ARTIFICIAL COST.

UM, SO THAT, THAT RESULT WAS A LITTLE SURPRISING, UH, TO ME.

BUT I, BUT I THINK IT DOES MAKE SENSE BECAUSE I THINK WE WOULD SEE THE FREQUENT SCED PRICE SPIKES THAT ARE NOT RELATED TO, TO LEGITIMATE RESERVE SHORTAGES THAT ARE PRICED UNDER THE ORDC IF WE, IF WE RETAIN THAT TRIGGER.

SO THAT, UM, THAT CONCLUDES MY, MY COMMENTS.

I'D BE HAPPY TO, TO ANSWER QUESTIONS.

QUESTIONS FOR DR. PATTON.

I HAVE ONE.

UM, DAN SPOKE TO LOAD OSCILLATION AND HOW THAT WOULD AFFECT, DO, CAN YOU TALK ON THAT OR IS THAT NOT IN YOUR PURVIEW? NO, I DON'T SEE THAT AS A CONCERN BECAUSE THE, IF YOU RELEASE THE ECRS, UM, WHEN YOU PROJECT THAT SCED MAY BE SHORT, THEN YOU DON'T GET TO THE INTERVALS WHERE, WHERE THE PRICE IS GONNA SPIKE, AND YOU'D BE TEMPTED TO CURTAIL LOAD, WHICH YOU DEFINITELY SHOULD NOT BE CURTAILING LOAD.

LIKE IF, IF ANY DEPLOYMENT MECHANISM FOR ECRS RESULTS IN LOAD O OSCILLATION, IT MEANS YOU'RE WAITING TOO LONG TO DEPLOY IT BECAUSE CURTAILING LOAD TO, TO KEEP SUPPLY AND DEMAND

[00:35:01]

IMBALANCE IS VERY EXPENSIVE.

SO I, I DON'T THINK THAT'S A CONCERN, AT LEAST WITH, WITH THE RECOMMENDATION I'VE ARTICULATED ON THIS SLIDE, CARLOS.

SO THE MAIN CONCERN IS CREATING, UM, AN ARTIFICIAL SCARCITY BASED ON A RESOURCE THAT COULD BE DEPLOYED ON ERRORS IN FORECAST.

THIS IS THE, THE LOGIC THAT, UH, AIR IS USING.

ANY COMMENTS ABOUT THAT? WAIT, SAY THAT ONE MORE TIME.

ERRORS IN FORECASTING IS WHAT HAS BEEN PRESENTED AS AIR CO'S CONCERN ABOUT THIS, ABOUT DEPLOYING EARLIER.

THAT'S CORRECT.

WITHOUT RUNNING, WITHOUT DEPLOYMENT TRIGGER? YES, I, I DON'T HAVE THAT THAT NUMBER HANDY, BUT I THINK, I BELIEVE IT WOULD BE ABOUT HALF THE 5.7.

SO I'M, AND I THINK THIS IS WHERE, WHERE WE GET TO, IS THERE A COST TO ADOPTING SOMETHING WHERE YOU DEPLOY ECRS BECAUSE YOU'RE FORECASTING A SHORTAGE? I THINK THE COST OF THAT IS VANISHINGLY SMALL, PARTICULARLY IF YOU ARE DEPLOYING THE, THE SMALL TRANCHES OF ECRS AND LIKE NOT DEPLOYING THEM ALL SIMULTANEOUSLY.

WHEN, WHEN YOU SEE A SHORTAGE, SO IF YOU FORECAST A SKETCH SHORTAGE AND YOU RELEASE 500 MEGAWATTS OF ECR S LET'S SAY, THE WORST THING THAT'S GOING TO HAPPEN IS NOW YOU HAVE 500 MEGAWATTS OF SPINNING RESERVES.

THERE'S, THERE'S NO SIGNIFICANT COST OF THAT.

UM, SO IN COMPARISON TO THE $5.7 BILLION OF COSTS OF NOT RE, YOU KNOW, NOT RELEASING IT AND THEN TRICKING THE REAL TIME MARKING INTO BELIEVING IT'S SHORT.

WHEN IT'S NOT SHORT, I JUST, I JUST CAN'T SEE HOW THAT'S, THAT'S REASONABLE.

AND I, AND HONESTLY, I I, I CAN'T SEE ANY PRECEDENT FOR ANY MARKET EVER HAVING DONE THIS.

UM, AND PART PARTLY THAT MAY BE BECAUSE MOST OF THEM HAVE CO-OP OPTIMIZATION, BUT WITH CO-OP OPTIMIZATION, THIS CAN NEVER HAPPEN BECAUSE THAT WALLING OFF OF THE RESERVES DISAPPEARS SO THAT THE REAL TIME MARKET CAN ALWAYS SEE THESE UNITS AND THIS ENTIRE $5.7 BILLION EVAPORATES BECAUSE IT CAN, IT CAN FULLY UTILIZE ALL THE RESOURCES.

SO WHAT WE SHOULD BE DOING HERE IS MIMICKING THE OUTCOME WE WOULD GET IN CO-OP OPTIMIZATION MIMICKING WHAT WOULD HAPPEN IF, IF THE DISPATCH MODEL COULD SEE EVERYTHING.

NOW, WE CAN'T DO THAT PERFECTLY, BUT WHAT WE CAN DO IS ALLOW IT TO SEE THESE RESOURCES BEFORE IT GOES INTO A, A DEFICIT AND CAN'T MEET THE, YOU KNOW, MATCH SUPPLY AND DEMAND.

AND DR.

BEN, COULD YOU COVER ONE MORE TIME? YOU'RE, YOU'RE ADVOCATING FOR A, A FLOOR THOUGH, A HUNDRED DOLLARS FLOOR, WHY IS THAT? YEAH, YEAH, LET ME BE CLEAR ABOUT THAT.

WHAT I'M ADVOCATING FOR RIGHT NOW IS TO JUST REJECT THE NPRR AND, AND ENCOURAGE ERCOT TO IMPROVE THE DEPLOYMENT, UH, UH, THE EMPLOYMENT CRITERIA FOR THE ECRS.

NOW, IN THE TAC DISCUSSION, UM, THERE, THERE WAS A DISCUSSION OF COMPROMISES THAT EVERYONE COULD AGREE TO.

AND I, I DO THINK A HUNDRED DOLLARS FLOOR WOULD NOT BE SUBSTANTIALLY HARMFUL IF YOU RESOLVE THE DEPLOYMENT SIDE OF THIS, THIS ISSUE.

SO IF IT WERE WITHIN YOUR AUTHORITY TO MODIFY THE NPRR, UM, THEN THE A HUNDRED DOLLARS OFFER FLOOR WOULD, YEAH, I DON'T THINK WOULD BE ENORMOUSLY, UH, INEFFICIENT, BUT IT DOES REQUIRE THAT THE DEPLOYMENT BE FIXED SO THAT SC DOESN'T, DOESN'T GO INTO A SHORTAGE.

THE A HUNDRED DOLLARS OFFER FLOOR WOULD SERVE ONE, ONE PURPOSE.

UM, ONE, YOU KNOW, WE, WE DO TALK TO ERCOT OPERATIONS AND, AND WE COLLABORATE AND WE, WE EXCHANGE IDEAS AND WE DID ON, ON THIS TOO.

AND ONE OF THE CONCERNS THEY HAD WAS IF THAT HEADROOM ENDS UP ON STEAM UNITS THAT ARE SLOW RAMPING, THEN, THEN ALTHOUGH YOU GET THEM RAMPING IMMEDIATELY, THERE ARE SITUATIONS WHERE PERHAPS IT WOULD TAKE LONGER TO GET THE SAME NUMBER OF MEGAWATTS THAN TURNING ON A TURBINE.

UM, ONE, ONE WAY TO PREVENT THAT IS WITH, WITH SOMETHING LIKE THE A HUNDRED DOLLARS OFFER FLOOR, THAT WOULD CAUSE THE COST OF THE RELEASE DCRS TO BE ABOVE THE STEAM UNITS SO THAT YOU WOULD TEND NOT TO, UM, NOT TO RAMP DOWN THE STEAM UNITS AS MUCH.

ANY OTHER LAURIE? YES, DR. PATTON.

SO YOU'VE THROWN OUT TWO NUMBERS.

ONE IS THE IMPACT FOR 2023 OF THE ECRS DEPLOYMENT, THE 5.7 BILLION, AND THEN YOUR A HUNDRED DOLLARS OFFER FLOOR, UM, PRICING IMPACT OF 1.7 BILLION.

WHAT IS THE PRICING IMPACT OF $750 OFFER FLOOR

[00:40:02]

UM, OR, OR MAYBE SLIGHTLY MORE.

UM, THE, THE PART OF THE REASON I DIDN'T CALCULATE THAT NUMBER IS, IS THE $750 IS, IS THE MOST CLEARLY INVALID COMPONENT OF THIS NPRR.

SO IT, IT DIDN'T OCCUR TO ME THAT WE COULD END UP WITH AN OUTCOME WHERE WE WOULD KEEP THAT AND FIX THE DEPLOYMENT.

BUT, UM, ANY OTHER QUESTIONS FOR DR. PATTON? I THINK WE HAVE ONE MORE COMMENTER ON THIS.

IS, IS IT WE HAVE, UH, NED SPEAKING ON THIS OR? YEAH, WE HAD, UH, KATIE COLEMAN ON BEHALF, KATIE, TEXAS INDUSTRIAL ENERGY CONSUMERS, AND ALSO NED FOR RA.

KATIE.

KATIE, YOU WANNA COME UP? THANK YOU CHAIRMAN AND COMMITTEE MEMBERS KATIE COLEMAN.

I REPRESENT TEXAS INDUSTRIAL ENERGY CONSUMERS, BUT I'M SPEAKING HERE TODAY ON BEHALF OF A BROAD COALITION OF CONSUMERS WHO FILED COMMENTS ON NPRR 1224.

YOU CAN SEE THE ENTITIES LISTED HERE, BUT IT IS NOT JUST LARGE CUSTOMERS, IT'S ALSO RESIDENTIAL AND COMMERCIAL CUSTOMERS, AND WE WORK TOGETHER ON THIS POSITION.

UM, IN SHORT, WE SHARE THE I'S CONCERNS.

WE'VE BEEN VERY CONCERNED ABOUT THE PRICING IMPACTS THAT WERE REPORTED AND ESTIMATED FROM LAST SUMMER AS A RESULT OF THE ECRS DEPLOYMENT PRACTICES.

WE APPRECIATED ERCOT BRINGING FORWARD NPRR 1224 TO TRY TO PROVIDE SOME MORE TRANSPARENCY AROUND HOW ECRS WOULD BE USED GOING INTO THIS SUMMER.

UM, BUT WE ARE CONCERNED THAT WITH THE $750 PRICE FLOOR, WE ARE NOT MAKING MUCH PROGRESS RELATIVE TO LAST, UM, SUMMER'S EXPERIENCE.

A COUPLE THINGS THAT I JUST WANTED TO POINT OUT THAT REALLY RESONATED WITH CONSUMERS.

DR. PATTON TOUCHED ON THIS, BUT THERE WERE ANALOGIES MADE TO THE OUTCOMES UNDER REAL REALTIME CO OPTIMIZATION THAT WAS ONE OF THE JUSTIFICATIONS FOR THE FLOOR.

AND IT'S IMPORTANT TO REMEMBER THAT UNDER REALTIME CO-OP OPTIMIZATION CUSTOMERS ARE GONNA GET A LOT OF BENEFITS FROM MORE EFFICIENT DEPLOYMENT AND COMMITMENT OF UNITS AT LARGE.

YOU WON'T HAVE, AS DR. PATTON, AS DR. PATTON DISCUSSED, THIS WITHHOLDING OF UNITS THAT WILL AUTOMATICALLY BE RESOLVED.

AND SO WE FEEL THAT TRYING TO REPLICATE THE ANCILLARY SERVICE DEMAND CURVES NOW WHEN WE ARE NOT AS CONSUMERS, GETTING THOSE BENEFITS OF A MORE EFFICIENT DEPLOYMENT, UM, IS ONE-SIDED AND NOT AN EFFICIENT OUTCOME.

WE DID SUPPORT A $100 PRICE FLOOR IN OUR COMMENTS.

UH, I KNOW DR. PATTON, THAT'S NOT HIS PREFERRED SOLUTION AND I JUST WANTED TO TOUCH ON OUR JUSTIFICATION FOR THAT.

UM, IN TODAY'S WORLD, BEFORE WE HAVE REAL TIME CO-OP OPTIMIZATION, IT WAS PERSUASIVE TO US THAT YOU WOULD NOT WANT TO ALLOW THE ECRS UNITS TO BE DEPLOYED BEFORE MARKET UNITS, OTHER UNITS THAT ARE SELF COMMITTING, YOU WOULDN'T WANT THEM TO BASICALLY CUT IN FRONT OF THEM.

AND THAT'S SOMETHING THAT IN THE PAST WE'VE PUT PRICE FLOORS AND OTHER NPRS FOR THAT SAME REASON.

AND SO WE BELIEVE THE BEST WAY TO THINK OF THAT IS TRYING TO APPROXIMATE WHEN THOSE UNITS WOULD'VE SELF COMMITTED AT WHAT PRICE THEY LIKELY WOULD'VE SELF COMMITTED.

WE BELIEVE A HUNDRED DOLLARS FLOOR ACHIEVES THAT.

AND AS A REFERENCE POINT RIGHT NOW, OUT OF MARKET COMMITMENTS THROUGH THE RELIABILITY UNIT COMMITMENT PROCESS, WHICH ARE COMPLETELY OUT OF MARKET, THAT'S ERCOT TURNING ON UNITS WHO DID NOT CHOOSE TO RUN THOSE UNITS ARE OFFERED IN AT A FLOOR OF $250 A MEGAWATT HOUR.

SO YOU'RE TALKING ABOUT HOLDING OUT THESE ECRS UNITS, WHICH ARE RELATIVELY EFFICIENT UNITS UNTIL THE PRICES ARE THREE TIMES THE PRICE FLOOR OF THE ROCK UNITS.

AND THAT DOESN'T MAKE SENSE TO US.

UM, SO WE DO SUPPORT A STOP GAP BETWEEN NOW AND REAL TIME CO OPTIMIZATION TO INSULATE THE MARKET FROM THOSE EFFECTS, BUT WE BELIEVE THAT THE A HUNDRED DOLLARS FLOOR IS THE APPROPRIATE LEVEL.

UM, AND THAT'S A SUMMARY OF OUR COMMENTS AND I'M HAPPY TO TAKE ANY QUESTIONS THAT YOU HAVE.

ANY QUESTIONS FOR KATIE? NO.

GOOD.

YEAH, UH, NED IS ON HIS WAY UP.

AND JOHN, DID WE SAY WE HAVE ONE MORE? DO WE HAVE NED?

[00:45:01]

IS IT POSSIBLE JOINT COMMENT.

UH, THANKS FOR LETTING ME BE HERE.

UH, MY NAME'S NED BONKOWSKI, I'M WITH RA.

UM, JUST TO CLARIFY FOR THE RECORD, I AM SPEAKING ON BEHALF OF THE JOINT COMMENTERS THAT INCLUDED, UH, T-C-P-A-L-C-R-A AND ANJI TODAY.

SO THAT'S WHY WE HAVE THESE UP ON THE SCREEN.

UM, SO, UM, UH, I THINK I'LL PROBABLY START OFF WITH JUST RESPONDING TO, UH, YOU KNOW, SOME OF THE LANGUAGE THAT YOU MIGHT HEAR ABOUT, YOU KNOW, WHETHER THE METHODOLOGY THROUGH WHAT JUP PROCURES AND DEPLOYS ECRS RESULTS IN ANY SORT OF ARTIFICIAL SCARCITY.

I THINK THAT'S, THAT'S A WAY OF CHARACTERIZING, UH, AN ATTEMPT TO NEGATIVELY CHARACTERIZE, UH, THE CONSERVATIVE OPERATIONS IN GENERAL, RIGHT? CONSERVATIVE OPERATIONS PROVIDES ADDITIONAL RELIABILITY, WHICH I THINK Y'ALL HEARD THROUGH SOME OF THE, UH, THE EARLIER DISCUSSION WITH, WITH DAN ABOUT WHAT THE, SOME OF THE BENEFITS TO HAVING THOSE RESERVES ARE.

AND SO THERE IS A PRINCIPLED DIFFERENCE THAT I THINK YOU, YOU SEE, UH, EMERGING BETWEEN DIFFERENT STAKEHOLDERS WITH THIS PARTICULAR PROPOSAL.

AND THAT IS, YOU KNOW, IS CONSERVATIVE OPERATIONS SOMETHING THAT SHOULD BE NOT REFLECTED IN THE MARKET PRICES OR SHOULD IT BE REFLECTED IN THE MARKET PRICES? AND I THINK JOINT COMMENTERS ARE IN THE LATTER CAMP.

IF, YOU KNOW, CONSERVATIVE OPERATIONS PROVIDE ADDITIONAL VALUE TO THE ERCOT SYSTEM, MARKET PRICES SHOULD REFLECT THOSE AND HELP TO DRIVE THOSE OUTCOMES.

UH, NOW ONCE YOU MOVE FROM THAT POINT FORWARD, THEN THE QUESTION BECOMES, WELL, HOW DO YOU DO THAT? AND THE PRIMARY POINT OF CONTENTION THAT I THINK Y'ALL HAVE HEARD IS NOT NECESSARILY, YOU KNOW, IS THERE A, UH, YOU KNOW, A, A FAIR POINT FOR ERCOT TO BEGIN RELEASING ECRS, UH, THROUGH MANUAL DEPLOYMENTS.

I THINK, UH, ALMOST EVERYONE THAT, UH, IN THAT ENGAGED IN THE DISCUSSION AGREED THAT THE 40 MEGAWATT, UH, APPROXIMATION ON THE POWER BALANCE PENALTY CURVE WAS, WAS REASONABLE.

THE QUESTION BECAME WHAT THE, THE, THE FLOOR WAS BECAUSE OF THE PRICING IMPACT.

AND SO THAT'S WHERE, UH, I BELIEVE WHAT TAC, UH, LANDED ON WAS TO USE THE ANCILLARY SERVICE DEMAND CURVES AS A PRINCIPLED BASIS FOR, UH, FOR DEFINING THE THOSE COSTS.

AND ONE OF THE, THE, THE KEY ELEMENTS OF, UM, THE ANCILLARY SERVICE DEMAND CURVES UNDER REAL TIME CO OPTIMIZATION IS THEY DO CREATE AN EFFECTIVE FLOOR, RIGHT? IT'S ONCE ERCOT HAS DECIDED THAT IT WILL DEPLOY OR, OR GO SHORT ON THE RESERVES, THERE IS A VALUE AND OPPORTUNITY COST TO THE MARKET OF HAVING THOSE RESERVES AND HAVING THAT FLEXIBILITY.

AND THAT IS, UH, WHAT SHOWS UP IN THE PRICING I NEED TO ADVANCE.

AH, THANK YOU VERY MUCH.

GREEN LINE THAT'S REFLECTED IN THE TAC REPORT THAT IS, UH, AS, AS ERCOT REPORTED REFLECTIVE OF AVERAGE ON PEAK ANCILLARY SERVICE DEMAND CURVE PRICES DURING SUMMER HOURS.

SO, YOU KNOW, TO, TO GIVE SOME CONTEXT AND, UM, YOU KNOW, THIS IS PROBABLY NOT THE EASIEST TO READ, THAT'S EVEN WORSE.

APOLOGIES FOR THAT.

UM, UH, YOU KNOW, WE LOOKED AT A NUMBER OF DIFFERENT, UH, ANCILLARY SERVICE DEMAND CURVE CONSTRUCTIONS AND LOOKED AT WHAT THE EFFECTIVE PRICE POINT OF GOING SHORT ON ECRS AT 500 MEGAWATTS WOULD BE.

AND YOU END UP WITH A, A NUMBER OF, UH, LEMME SEE IF I CAN ZOOM IN A LITTLE BIT WITHOUT TAKING US ALL THE WAY THERE.

UH, SO YOU END UP WITH A NUMBER OF DIFFERENT OUTCOMES.

THIS IS FROM AN EXAMPLE SET OF CHARTS THAT, THAT ERCOT STAFF PREPARED FOR THE REAL TIME CO OPTIMIZATION AND BATTERIES TASK FORCE.

AND, YOU KNOW, WE JUST, WERE TRYING TO GET A A, A SIMPLE VISUALIZATION AT THAT POINT IN TIME OF WHERE THAT SITS.

SO ECRS ON THESE CURVES IS THE DARK BLUE.

AND YOU'LL SEE THAT SOMETIMES IT SITS HIGHER, SOMETIMES LOWER, IT DEPENDS ON THE TIME OF DAY ON THE SEASON, REALLY DEPENDING ON THE, THE VALUE, HOW MUCH, UH, REGULATION AND RRS IS PROCURED AND THAT, THAT DETERMINES WHERE IT STARTS.

UM, TO TRY TO GIVE A MORE GLOBAL SENSE, WE ACTUALLY LOOKED AT THE 2024 ANCILLARY SERVICE PLAN ACROSS THE WHOLE YEAR AND SAID, WHAT HAPPENS IF YOU GO 500 MEGAWATT SHORT ON ECRS? AND THIS IS THAT FULL PRICE DISTRIBUTION.

SO IT GOES FROM AS HIGH AS ABOUT 27 50 $2,750 TO A LOW POINT OF ABOUT $284.

SO THAT'S TO GIVE YOU SOME CONTEXT FOR, UH, YOU KNOW, HOW SOME OF THE DIFFERENT OPTIONS FOR, YOU KNOW, TRYING TO PREVENT PRICE REVERSAL, FRANKLY, WHEN, WHEN ERCOT IS GOING SHORT ON, UH, ON ANCILLARY SERVICES.

AND, YOU KNOW, THE $750, UH, POINT THAT YOU SEE IS THE, THE, THE DASHED, THE SECOND DASH

[00:50:01]

SO THERE'S A LOT OF HOURS THROUGHOUT THE YEAR WHEN THIS COULD STILL OCCUR THAT IT COULD GO HIGHER, THERE ARE SOMEWHERE IT COULD GO LOWER.

BUT ON BALANCE, THIS SEEMS LIKE IT STRIKES A, A REASONABLE, UH, MIDDLE GROUND TO, UH, TO, TO LAY THAT POINT.

SO, UM, YOU KNOW, I THINK THE, THE ONE OF THE POINTS OF, OF, YOU KNOW, COMMON, UH, COMMON CAUSE THAT YOU HEAR IS THAT WE SHOULD BE TRYING TO EMULATE THE REALTIME CO OPTIMIZATION OUTCOMES.

UH, JOINT COMMENTERS BELIEVE THAT THE TAC REPORT DOES A AN EFFECTIVE JOB OF TRYING TO DO THAT.

UM, AND I WILL, UH, I'LL, I'LL STOP THERE JUST 'CAUSE I THINK YOU'VE ALREADY HEARD A, A GOOD AMOUNT ON THIS AND HAPPY TO TAKE ANY QUESTIONS, ANY QUESTIONS.

THANKS FOR YOUR PRESENTATION.

WERE, WERE THERE ANY DISCUSSION ABOUT JUST USING THE SAME PRICE OFFERING FLOOR AS RUCK UNITS? SO THE WELL RUCK, THE RUCK PRICE FLOOR IS INTENDED TO PUT RUCK UNITS BEHIND COMPETITIVELY COMMITTED UNITS.

UM, YOU KNOW, THAT IS NOT SOMETHING THAT NECESSARILY CHANGES WITH REALTIME CO-OP OPTIMIZATION.

WE WEREN'T TRYING TO ADDRESS, YOU KNOW, SAY PARODY BETWEEN RELEASE OF ECRS VERSUS, UH, VERSUS R COMMITMENTS.

REALLY WHAT WE WERE TRYING TO FIND WAS AN APPROPRIATE PROXY FOR GOING SHORT ON THAT ANCILLARY SERVICE RESERVE.

BECAUSE, YOU KNOW, WHILE IT IS TRUE WHEN, WHEN ECRS IS RELEASED, IT DOES GO INTO THE, THE BROADER BUCKET OF RESERVES THAT IT ALSO MEANS THAT YOU, THAT THERE IS NO LONGER THAT CERTAIN QUALITY OF RESERVE THAT ERCOT HAS THAT THEY CAN USE FOR, YOU KNOW, DEPLOY AT THEIR, UH, AS NEEDED.

RIGHT? IT THEN BECOMES PART OF THAT BROADER BUCKET OF ALL OF THE THINGS THAT GO INTO ODC.

AND THAT'S FRANKLY ONE OF THE BIG CHANGES BETWEEN THE CURRENT FRAMEWORK WITH THE ORDC AND THE ANCILLARY SERVICE DEMAND CURVES UNDER REAL TIME CO OPTIMIZATION IS WE'RE NO LONGER VALUING RESERVES OF ALL STRIPES AT THE SAME PRICE POINT.

WE ARE ACTUALLY SAYING THERE IS A DIFFERENT VALUE FOR DIFFERENT RESERVES OF DIFFERENT QUALITY.

OTHER QUESTIONS FOR NED? NED, I HAVE A QUESTION REAL QUICK.

UM, SO WE KNOW, YOU KNOW, KATIE TALKED ABOUT WHERE THE 100 CAME FROM, OBVIOUSLY WAS WE KNOW WHERE NONS SPIN IS, WE KNOW WHERE RUCK IS AT A PRICE LEVEL.

WE ALSO KNOW THAT AT THE TAC MEETING, Y'ALL'S PRICE CAME IN AT A THOUSAND AND THEN CAME DOWN.

WHERE DID Y'ALL'S THOUSAND COME FROM? WHERE, DO YOU HAVE ANY BACKING FOR THE NUMBERS? CAN YOU EXPLAIN? SO THE, THE THOUSAND DOLLAR, UH, LEVEL THAT IS TIED TO WHERE 40 MEGAWATTS OF, UH, ARE ON THE POWER BALANCE PENALTY CURVE.

SO THE, THE POWER BALANCE PENALTY PENALTY CURVE HA IT BASICALLY SAYS WHEN, UH, THE SCD ENGINE STARTS TO, UH, RELY MORE ON, ON REGULATION, IT HAS CERTAIN PRICE POINTS THAT, THE WAY I'VE HEARD IT DESCRIBED TO ME IS IT'S EFFECTIVELY A, UH, KIND OF A SPEED BUMP.

IT SLOWS DOWN PRICE, UH, PRICES INCREASE IT, IT ACTUALLY REDUCES PRICES OVERALL.

AND, UM, THE 40 MEGAWATT THRESHOLD JUST IS, IS WHERE THAT THOUSAND, UH, DOLLAR PRICE POINT IS.

SO IT'S TIED TO THAT FRAMEWORK, ALTHOUGH AS YOU CAN SEE HERE, IT'S WELL WITHIN THE RANGE OF THE ANCILLARY SERVICE DEMAND CURVE, UH, IMPLICATIONS OF GOING SHORT 500 MEGAWATTS OF ECRS.

CONCLUSION OF WHICH IS REAL-TIME QUALITY OPTIMIZATION.

ANY OTHER QUESTIONS FOR NED? ALRIGHT, WELL THANK YOU.

THANK YOU FOR YOUR TIME.

SO I GUESS, YOU KNOW, PABLO, MY QUESTION I GUESS FOR ERCOT IS IT, IT SEEMS WITH WHAT ERCOT HAS PROPOSED UNDER 1124, WE'RE CERTAINLY THE CONSUMERS CERTAINLY BETTER OFF THAN WHAT ON HOW WAS DONE LAST YEAR, ALTHOUGH WE'VE HEARD SOME COMPELLING ARGUMENTS FROM DR. PATTON AND OTHERS THIS AFTERNOON.

I GUESS WHAT'S, WHAT'S YOUR THOUGHT ON, ON HOW TO MOVE FORWARD ON THIS WITH ENSURING RELIABILITY, MAKING SURE THAT WE'RE DOING THE BEST, YOU KNOW, BOTH RELIABILITY AND AFFORDABILITY, UH, IF YOU WILL, AND MOVING THIS FORWARD TO THE POINT WHERE WE THINK WE'VE GOT THE RIGHT STRIKE OF BALANCE? THANKS FOR THE QUESTION, BOB, AND, AND, AND I APPRECIATE THE, UH, INPUT FROM THE, UM, SPEAKERS TODAY ON, ON THE BEHALF OF EACH OF THE GROUPS OF JOINT COMMENTERS.

SO I, I THINK, YOU KNOW, WE'RE, WE'RE HEADING INTO A, UM, STEP HERE WHERE WE HAVE INTERIM, UM, INTERIM STEPS TOWARDS THE FINAL

[00:55:01]

THE INTENT BEHIND THIS FIRST STEP IN 1224 WAS TO PROVIDE SOME BENEFIT OVER THIS SUMMER MONTH, AS WE SAW THE SECOND SUMMER UNDER ECRS OPERATIONS.

I BELIEVE THAT WHAT THE 1224 REPRESENTS, UH, REPRESENTS AN IMPROVEMENT OVER WHAT WE SAW LAST YEAR IN TERMS OF LOWERING THE PRICES WE HEARD FROM DR. PATTON.

LESS THAN HALF OF THE PROJECTED COST WOULD'VE BEEN REALIZED HAD A FLOOR MECHANISM LIKE THIS BEEN IN PLACE IN 2023.

SO PRETTY SIGNIFICANT IMPROVEMENT.

WE DO NOT HAVE THE ABILITY TO MANUALLY OPERATE THE SYSTEM AS RTC WILL.

UM, IT IS NOT POSSIBLE TO DO WITH MANUAL CONTROL OPERATIONS.

AND SO WHILE IT WOULD BE, UH, A, A GREAT GOAL TO TRY TO MIMIC RTC OPERATIONS IS THE REALITY IS WE DON'T HAVE THAT.

I THINK THERE'S A, I I DISAGREE WITH DR. PATTON ON, ON CERTAIN ELEMENTS IN TERMS OF THE FUNGIBILITY OF THE MEGAWATTS THAT ARE MADE AVAILABLE TO SCED.

I DON'T BELIEVE ALL MEGAWATTS ARE EQUAL THAT ARE MADE AVAILABLE TO SCED.

AND THE CHARACTERISTICS OF WHAT WE PURCHASE IN ECRS HAS VERY SPECIFIC CHARACTERISTICS BASED ON HOW THEY'RE UTILIZED.

AND WE SEE FROM THE HISTORY OF HOW ECRS HAS BEEN DEPLOYED, OVER 80% OF IT HAS BEEN DEPLOYED SPECIFICALLY TO ADDRESS FORECAST ERRORS OR RAMP ISSUES AND NOT TO BE, UH, ESSENTIALLY, UH, A RESERVE CAPACITY, UH, SOLUTION SET.

AND SO WHEN YOU LOOK AT THE AVERAGE DEPLOYMENT OF THOSE, ACROSS THOSE PURPOSES AS WELL, THE DEPLOYMENTS HAVE BEEN FAIRLY HIGH AVERAGING OVER 1700 TO 2000 MEGAWATTS ON AVERAGE ACROSS THE DEPLOYMENT.

SO WE ARE USING THE BULK OF THE ECRS FOR THOSE PURPOSES WHEN WE ARE DEPLOYING THEM THAT WE PURCHASE.

SO WHAT I WOULD RECOMMEND IS THAT I THINK THE TAC ORGANIZATION HAS WORKED TOGETHER TO TRY TO FIND A PATHWAY THAT ADDRESSES SOME OF THE COST IMPLICATIONS THAT WE SAW LAST SUMMER PRESERVES THE UNIQUE CHARACTERISTICS OF ECRS AND WHAT WE'RE ABLE TO DO UNDER MANUAL DEPLOYMENTS TODAY WITH OUR CONTROL ROOM.

AND IT REPRESENTS THE FIRST STEP IN A, IN A SERIES OF A COUPLE OF STEPS THAT ARE GONNA TRACK US TOWARDS RTC, THE FIRST ONE BEING THIS VERSION 1224, THE NEXT ONE BEING 1232, WHERE WE'RE GONNA HAVE THE AUTOMATIC AVAILABILITY OF THE ECRS RESOURCES AND SCED WITH A PRICE FLOOR ASSOCIATED.

AND THEN THE FINAL STEP, OF COURSE, HAVING THE UNIQUE ANCILLARY SERVICE DESIGN, UH, DEMAND CURVES IN RTC THAT'LL HELP TO MANAGE ALL OF THESE AND VALUE THEM APPROPRIATELY BASED ON THAT.

SO I WOULD RECOMMEND WE MOVE FORWARD WITH WHAT THE WORK THAT TAC HAS DONE AND, UH, TAKE THIS FIRST STEP TO SEE THE BENEFIT THIS SUMMER.

WE'LL HAVE THE OPPORTUNITY TO LEARN AGAIN FROM THAT.

AND AS WE WORK ON 1232, WE'LL BE ABLE TO TAKE CONTINUED LESSONS LEARNED INTO 1232 AS WE SET UP THE AUTOMATION OF THE, OF THE RELEASE OF, UH, ECRS.

THAT WOULD BE MY RECOMMENDATION FOR THE COMMITTEE.

A VERY LARGE TIMESCALE THAT THIS BLUE CURVE WAS GENERATED OVER.

SAME MAY, TURNING TO THE COMMITTEE, DO YOU FEEL COMFORTABLE APPROVING IT OR, OR WHERE ARE YOU ON THE, WOULD ANYONE BE OPEN TO DISCUSSING ANY DIFFERENT LEVELS? I, I'M NOT AS COMFORTABLE AS I'D LIKE TO BE.

, I, I DON'T UNDERSTAND ER KAT'S POINT OF VIEW ON THE ECONOMICS, UM, FULLY, I'M NOT CLEAR ON WHERE $750 CAME FROM, FRANKLY.

SO I'M NOT AS COMFORTABLE AS I'D LIKE TO BE TO VOTE ON IT.

SO IF WE DON'T VOTE ON IT, HOW DO WE STILL GET SOME OF THE BENEFIT BACK TO CONSUMERS? WHAT HAPPENS TODAY IF WE DON'T VOTE ON THIS? SO IF WE DON'T VOTE ON IT, THEN WE WOULD HAVE TO GO BACK.

THE CONTROL ROOM WOULD HAVE TO MAKE A RECOMMENDATION ON WHEN THEY WOULD RELEASE TO SCED, UM, THE, UM, THE ECRS PRODUCT SET.

AND SO WHAT, INSTEAD OF HAVING A STANDARD THAT CAN BE PLANNED AROUND THAT THE MARKET UNDERSTANDS WHEN IT'S GONNA BE RELEASED, WHAT THE COST IMPLICATION THAT IT'D BE, WE'RE GONNA HAVE A MORE ARBITRARY ISSUE POTENTIALLY, AGAIN, WHERE THE CONTROL ROOM IS MAKING THOSE DECISIONS ON WHETHER OR NOT THEY'RE GONNA BE RELEASING SC AT THIS POINT OR AT THAT POINT.

SO IT LOOKS LIKE THEY DID LAST SUMMER.

YEAH, LOOKS MORE LIKE LAST YEAR.

SO IT WOULD LOOK MORE LIKE LAST YEAR POTENTIALLY, UNLESS WE CAME UP WITH ANOTHER CRITERIA THAT THE CONTROL ROOM WOULD UTILIZE FOR THE RELEASE OF SC.

AND SO WE'D HAVE TO GO BACK TO THAT DRAWING BOARD BECAUSE THIS IS TRACKING AGAIN.

AND TO, TO, TO YOUR QUESTION, JULIE, THAT YOU ASKED ABOUT IN TERMS OF UNDERSTANDING WHERE THE SEVEN 50 CAME FROM.

IT, IT CAME FROM, IF YOU, THE, THE LAST SLIDE THAT NED SHOWED, WHICH IS KIND OF THE RANGE OF AGAINST WHICH, UM, THE EXPECTED RTC ANCILLARY SERVICE DEMAND CURVES WOULD PRICE OUT THE VALUE OF E-C-R-S-R RELEASE WAS THE RANGES THAT WERE UTILIZED FOR DETERMINING THIS.

SO I BELIEVE THIS IS SIGNALING WITH THIS FIRST STEP, A DIRECTION OF WHERE THIS WOULD BE HEADED IN TERMS OF THE POTENTIAL PRICE IMPLICATIONS DOWN THE ROAD.

NOW OF COURSE IT'LL WORK DIFFERENTLY IN THE FLUID NATURE OF AN RTC SYSTEM, BUT THAT'S ROUGHLY WHERE THE VALUES CAME FROM THAT WERE EVALUATED BY TAC WELL, I I THINK YOU KIND OF HIT THE NAIL ON THE HEAD THIS, THIS CURVE, THE BLUE CURVE THAT I'M LOOKING AT ON MY SCREEN THAT IT KEPT UP, UM, PROBABLY CHANGES EVERY MONTH DEPENDING ON THE AMOUNT OF ANCILLARY SERVICES WE NEED.

SO IS BETWEEN NOW AND RTC, COULD THE FLOOR BE ADJUSTED FOR THE AC DC CURVE IN A MONTHLY OR BIMONTHLY VIEW INSTEAD OF, YOU KNOW, LOOKING AT

[01:00:01]

I'M LOOKING OVER TO THE OPERATIONS TEAM HERE TO GET A PERSPECTIVE EITHER DAN OR WOODY.

IN OTHER WORDS, IT'S, IT'S NOT REAL TIME, BUT IT'S ALSO NOT, UM, STAGNANT IN TIME.

IT'S, IT'S LIKE A MOVING 60 DAY WINDOW PERHAPS.

I THINK THERE'S NPR 1232 IS COMING AND THAT THAT'LL BE AN OPPORTUNITY TO, TO PUT THAT DOWN, TO NAIL IT DOWN TO A, TO A NUMBER.

SO THAT'S PART OF IT, I THINK IF MARKET PARTICIPANTS ARE GONNA WANT TO KNOW SOME MARKET CERTAINTY ABOUT WHAT IT'S GONNA BE NEXT MONTH AND THE MONTH AFTER THAT.

AND SO I THINK THAT THAT'S PART OF THIS, ANOTHER PART OF, UH, MAYBE DR.

PATTON'S GRAPH, IT SHOWED A LIST OF UNITS.

WELL, THERE COULD BE A, I THINK THE UNITS THERE WERE LIKE 13 OR 14 UNITS LISTED ON THE GRAPH.

THERE MAY BE A 14TH AND 15TH UNIT THAT DIDN'T COMMIT TO THE MARKET.

HOW WE DEPLOY ECRS MAY CAUSE THEM TO COMMIT OR NOT COMMIT UNDER THE EXPECTATION THAT ECRS IS GONNA SHOW UP EVERY DAY OR NOT SHOW UP EVERY DAY.

AND SO THERE ARE SOME UNITS PERHAPS NOT ON THE GRAPH THAT WE ALSO NEED TO BE THINKING ABOUT, ARE THEY GONNA COMMIT OR NOT COMMIT? AND SOME OF THOSE HAVE LONG COMMITMENT STARTUP TIMES POTENTIALLY.

SO I THINK ALL THOSE THINGS HAVE TO BE TAKEN INTO CONSIDERATION.

CAN, CAN YOU DESCRIBE WHEN THE TIMETABLE CURRENTLY EXPECTED FOR 1232 NPR AT 1232? WELL, IT'S CURRENTLY PENDING AT THE PROTOCOL REVISION SUBCOMMITTEE AT PRS.

SO IT'S, YES, IT COULD BE HERE IN AUGUST.

YEAH, POTENTIALLY.

SO IT'S NOT VERY, SO THIS FIRST STEP IS, IS A FAIRLY SHORT TERM STEP TO EFFECTIVELY GET THROUGH THIS SUMMER AND TO HAVE AN IMPACT THIS SUMMER, WHICH WOULD BE FOLLOWED THEN BY THE FULL AUTOMATION OF THE RELEASE OF ECRS AND A FLOOR THAT WOULD ESTABLISH WHEN IT WOULD BE DEPLOYED.

IS THAT CORRECT? AND, AND THE, THE THAT, UM, WHAT THE FLOOR WOULD BE WOULD BE IN THAT SUBSEQUENT 1232 NPRR.

AND SO THE BOARD WOULD BE CONSIDERING IT AGAIN WHEN THAT COMES BEFORE YOU, THERE'D BE AN OPPORTUNITY TO REVISIT THE UNDERLYING BASIS FOR THE ECONOMICS AND THE CONNECTION POINT TO THE RTC DEMAND CURVES.

YEAH, SO I THINK WHERE I AM ON, I DON'T WANT TO GO BACK TO WHERE WE WERE LAST SUMMER.

I THINK YOU'VE DEMONSTRATED THAT WHAT WE'VE PROPOSED HERE IS BETTER THAN WHAT WE WERE, I THINK THE COMMENTERS HAD VERY GOOD POINTS AND PERSPECTIVES, AND I THINK WE WANT TO START GETTING MORE TOWARDS THAT.

BUT I THINK FOR WHERE WE ARE NOW IN TIMELINESS, SINCE WE'RE AT THE FRONT OF THE SUMMER DEMAND SEASON, IS TO MOVE FORWARD ON THIS, TO GET THIS IN PLACE AND THEN AS YOU'RE SAYING, IF, UH, 1232 ADDRESSES 1224 IN THE NEAR TERM, YOU KNOW, WE'LL GET ANOTHER CRACK AT IT AND, AND CONTINUE TO MOVE FORWARD.

SO I WOULD PROPOSE THAT WE APPROVE 1224 AND RECOMMEND FOR BOARD APPROVAL, UH, FROM, FROM THIS POINT.

AND I'LL HAVE TO LOOK TO THE COMMITTEE TO SEE IF I CAN GET A SECOND AND A MAJORITY APPROVAL.

SO, DO I GET A SECOND ? MY MAIN CONCERN, IF I MAY, UH, IS, UH, ACTUALLY THE DELIBERATIVE PROCESS ATTACK.

UM, WE'RE GETTING TO A POINT WHERE, YOU KNOW, JUST THE MINIMUM NUMBER OF VOTES HAS BEEN ACHIEVED TO, TO RECOMMEND, UH, THIS PASSING, UH, BUT THE TWO BLOCKS OF, UM, WELL PARTIES, INTERESTED PARTIES THAT ARE VOTING AGAINST.

AND THAT IS A BIG CONCERN.

SO MAYBE SOMETHING TO THINK ABOUT ABOUT THE PROCESS ITSELF WITH INTACCT AND HOW YOU, UH, COME TO RECOMMENDATIONS.

'CAUSE IF, AGAIN, IT'S OBVIOUSLY ON THE RECEIVING END IS, IS THE REACTION, THE COST IS A CONCERN AND THEY'RE VOTING IN BLOCK.

SO THAT IS MY MAIN CONCERN ABOUT THIS ONE.

I'LL, I'LL ADD CARLOS.

I THINK THAT THERE'S A LIKELIHOOD OF SEEING MORE NRR AND OPERATING GUIDE REQUESTS THAT HAVE THOSE TYPE OF CHARACTERISTICS AS THE, AS THE GRID HAS GOTTEN MORE SCARCE AND THE IMPLICATIONS OF THE CHANGES THAT ARE BEING CONSIDERED IN THE PROTOCOLS HAVE DIRECT COST AND RELIABILITY INTENDED IMPACTS.

WE'RE GOING TO SEE, I THINK, BIFURCATION OFTENTIMES ON DIFFERENT ISSUES BASED ON THE NATURE OF THE UNDERLYING PROTOCOL CHANGES, BECAUSE WE DON'T HAVE, I THINK, THE COMFORT OF A CUSHION OF FLEXIBILITY AROUND SOME OF THE ISSUES THAT, UH,

[01:05:01]

PERHAPS FIVE YEARS AGO THE ERCOT HAD THE BENEFIT OF, OF LEANING ON.

AND SO I, I THINK WE'RE GOING TO HAVE TO GET COMFORTABLE AS A COMMITTEE AND AS A BOARD WITH DEALING WITH ISSUES WHERE THERE ARE STRONG PRO AND STRONG CONS, UH, OR, OR COUNTER AND, AND, AND SUPPORTIVE.

WE'RE NOT GONNA BE ABLE TO NECESSARILY FIND THE MIDDLE GROUND THAT MAKES EVERYBODY HAPPY ON THESE KINDS OF ISSUES.

YEAH, I AGREE WITH THAT.

UH, PABLO, YOU'RE ALWAYS GONNA HAVE DIVERGENT INTEREST, RIGHT? RIGHT.

IF YOU GOT SUPPLIERS AND, AND CONSUMERS.

BUT IN, IN THIS VERY SPECIFIC CASE, THE ONLY WAY I WOULD SECOND THIS IS IF WE ACTUALLY HAVE THE 1232, UH, BY AUGUST.

SO AGAIN, IT'S A STOP GAP AND WE DEAL WITH THE OTHER ONE RIGHT AWAY.

WELL, IS THAT A REALISTIC EXPECTATION? 1213? I THINK IT'S A REALISTIC THAT IT COULD BE HERE IN AUGUST, BUT I CAN'T GUARANTEE THAT I DON'T HAVE A WAY OF GUARANTEEING THAT I CAN'T MAKE PEOPLE VOTE A CERTAIN WAY OR PASS IT.

BILL, YOU HAD A COMMENT? I JUST WANT TO GO BACK TO THE CORE QUESTION ON 12 OF 24.

AND THAT IS, UM, DO NOTHING AND LEAVE ECRS IN PLACE THE WAY IT IS AS, AS IT WAS LAST SUMMER, OR TRY TO MAKE SOME MODIFICATIONS TO MOVE FORWARD WITH SOME IMPROVEMENTS UNTIL WE GET RTC, UH, AND MAYBE GET SOME 1232 IMPROVEMENTS IN THE MIDDLE.

SO, YOU KNOW, I'M NOT ON THE COMMITTEE.

NO, BUT THAT'S EXACTLY MY POSITION, BILL, BUT I THINK THAT THAT'S WHAT WE NEED TO FOCUS ON.

I THINK LEAVING, LEAVING IT AS IS IS NOT THE RIGHT ANSWER.

EXACTLY.

THAT'S WHERE I'M GOING.

BUT ERCOT CAN DEPLOY AT A CERTAIN LEVEL ON THEIR OWN.

CORRECT.

PABLO, WE CAN DEPLOY IT AS WE DID LAST SUMMER.

WHAT I'M CONCERNED ABOUT IS HAVING THE AMBIGUITY OF THAT PROCESS FROM LAST SUMMER REMAIN THROUGHOUT, UM, THE UPCOMING SUMMER.

RIGHT.

I'D RATHER HAVE A MORE CONSISTENT, I MEAN, NO ONE WANTS IT TO COST THAN WHAT IT DID LAST SUMMER.

OBVIOUSLY I'VE, I'VE ARGUED FOR THIS CONTINUALLY, SO IT'S HARD TO SIT HERE AND SAY DON'T DO IT, BUT THERE'S NO REASON BEHIND THE NUMBER THAT WAS CHOSEN.

AND THAT IS HARD TO BACK UP CONTINUALLY.

IT'S NOT EVEN HALFWAY BETWEEN ZERO AND 1000.

SO WE SHOULD AT LEAST BE AT 500 IF WE'RE GONNA MEET IN THE MIDDLE.

IF AT LEAST YOU COULD SAY IT'S IN THE MIDDLE.

SEVEN 50 IS NOT, SO THERE'S NO BACKING.

WELL, I THINK ERCOT SHOULD BE OPERATING UNDER A PROTOCOL.

SO WE ALL KNOW, AS PABLO POINTED OUT, THE TRANSPARENCY.

SO WHAT'S IN FRONT OF US IS THE, IS TO DO THIS AT SEVEN 50 AND WHETHER CAN WE, YOU KNOW, DOES THE COMMITTEE SUPPORT THAT OR NOT? AND COURTNEY'S SUGGESTING AN ALTERNATIVE.

WELL, I, I DO SUPPORT CHANGE.

I JUST AM NOT FOLLOWING THE LOGIC OF HOW WE LANDED ON SEVEN 50, THE DATA OR THE ECONOMICS.

SO I'M OPEN-MINDED TO SAYING, LET'S CHANGE AND SEE WHAT COMES BACK AT 1232.

THAT ALMOST SOUNDED LIKE A SECOND .

I'M SORRY, BUT I'M, I'M GONNA NEED TO SEE D DECISIONS DRIVEN BY DATA FROM ERCOT AND I, I DIDN'T QUITE GET THAT IN THIS PARTICULAR INSTANCE AND IT'S JUST HARD TO FOLLOW THE LOGIC OF HOW WE GOT TO SEVEN 50.

SO I'M HAPPY TO SECOND IT UNDER.

IT DOESN'T SOUND LIKE IMPROVEMENTS GOING FORWARD.

IT SOUNDS LIKE IT'S AN UNHAPPY SECOND CARLOS.

WITH ALL THE EFFORT TO WORK ON 1232 ASAP.

SO JULIE IS FOR PROCEEDING.

I'M FOR PROCEEDING.

CARLOS AND COURTNEY, YOU'RE AGAINST.

'CAUSE YOU'D LIKE TO SEE THE SEVEN 50 COME DOWN TO A 500 LEVEL.

THAT'S CORRECT.

I'D LIKE TO SEE IT COME DOWN.

SO I THINK WE HAVE APPROVAL, NOT UNANIMOUS.

SO I WANNA JUST RECAPTURE THE MOTION WAS MADE BY BOB FLEXION TO APPROVE THE TAC RECOMMENDED VERSION WITH A PRICE FLOOR OF SEVEN 50.

JULIE HAS SECONDED IT AND IT'S THREE IN FAVOR AND ONE OPPOSED.

CORRECT? CORRECT.

AND THEN NOT IN THE RESOLUTION, BUT BEST EFFORTS BASIS BY ERCOT TO GET 1232 TO US BY AUGUST.

THAT THAT IS ROYALLY MORE OF FOR THE STAKEHOLDERS.

IT IS NOT AN URGENT REVISION REQUEST RIGHT NOW SITTING AT PRS AND IT WAS REFERRED OVER TO WMS FOR THEM TO LOOK AT.

BUT I THINK WITH THIS DISCUSSION THEY'VE HEARD THE COMMITTEE SAID THAT THERE SHOULD BE A URGENCY ON THAT.

AND AN EMPHASIS TO MOVE IT FORWARD.

YEP.

AGREE.

GONNA TAKE UP AGENDA ITEM, UH, 5.2, WHICH NOER 2 45, WHICH IS THE INVERTER BASED RESOURCE RIDE THROUGH REQUIREMENTS BEGINNING WITH TAX REPORT, FOLLOWED BY COMMENTS ON 2 45 FROM ERCOT AND ANY OTHER COMMENTS AFTER TAX, UH, PRESENTATION I PROPOSE WE ALLOCATE 20 MINUTES FOR A CO AND 20 MINUTES COLLECTIVELY FOR ANY JOINT POSITION STARTING WITH CAITLYN.

WELL I THINK THAT'S, AGAIN, THANK

[01:10:01]

YOU FOR THE COMMENTERS.

IT WAS EXCELLENT PRESENTATIONS AND, UH, POINTS OF VIEW.

SO THAT WAS EASY.

SO NOW WE'RE GONNA GO TO THE NEXT EASY ONE.

SO NOW WE'RE

[5.2 NOGRR245, Inverter-Based Resource (IBR) Ride-Through Requirements – URGENT ]

OKAY, THANK YOU.

UM, SO I WILL, I, I KNOW WE HAD COMMENTS THAT GO TO SOMETHING ELSE, BUT I AM GOING TO WALK THROUGH WHAT TECH HAS DONE AND I APPRECIATE PABLO, YOU KIND OF SETTING UP, UM, SOME OF THE ISSUES WE'VE HAD IN, IN THE ATTACK PROCESS AND, AND I THINK, YOU KNOW, EVERYONE'S WORKING REALLY HARD, BUT I THINK THERE'S SOME SERIOUS DISCUSSIONS TO HAVE AS WE TACKLE ISSUES THAT, THAT WE'RE ALWAYS GONNA HAVE SEGMENTS OPPOSED TO.

SO WE, THIS IS THE NOER, UM, ON RIDE THROUGH REQUIREMENTS, REPLACES CURRENT VOLTAGE RIDE THROUGH REQUIREMENTS FOR INTERMITTENT RENEWABLE RESOURCES WITH VOLTAGE RIDE THROUGH REQUIREMENTS FOR INVERTER BASED RESOURCES AND TYPE ONE AND TYPE TWO WIND POWER GENERATION RESOURCES AND PROVIDES NEW FREQUENCY RIDE THROUGH REQUIREMENTS CONSISTENT WITH OR BEYOND THOSE IN THE NEW IEE STANDARD.

SO WE WERE HERE IN APRIL ACTUALLY, COLIN MARTIN, THE VICE CHAIR WAS HERE AND I APPRECIATE THAT.

UM, AND WE PRESENTED KIND OF A DETAILED PROCEDURAL HISTORY AT AT TAC UP TO THAT POINT.

WE HAVE DISCUSSED THIS S NOER AT TAC SINCE AUGUST OF 2023.

I BELIEVE THAT WE'VE HAD, WE'VE DISCUSSED THIS AT 11 TAC MEETINGS, SEVERAL OF WHICH WERE DEDICATED SOLELY TO THIS NO G.

SO WE'VE SPENT A LOT OF TIME ON THIS.

UM, THAT INCLUDES HAVING IT TABLED AT AT TAC THOUGH FOR ERCOT TO CONDUCT AN RFI.

UM, AND THEN THERE WERE A LOT OF DISCUSSIONS EARLY THIS YEAR BETWEEN JOINT COMMENTERS, UM, WHO ARE, IN THIS CASE INVENERGY, NEXTERA, SOUTHERN POWER OVEN GRID AND CLEARWAY AND ERCOT.

SO WE'VE HAD THAT KIND OF DISCUSSION TIME EARLY THIS YEAR.

AND THEN, UM, WE TOOK AN INITIAL VOTE OR AN INITIAL VOTE THAT CAME TO THE BOARD AT THE MARCH 27TH MEETING.

ERCOT DID FILE COMMENT SUPPOSING THE, THE MARCH TECH APPROVED VERSION AND SUBSEQUENTLY THE, THE BOARD AS YOU KNOW, UM, REMANDED THIS NO QUEBEC TO TECH FOR DISCUSSION SINCE THEN.

WE HAD A NON-VOTING WORKSHOP IN MAY TO REALLY EDUCATE OURSELVES.

WE, WE HAD INDEPENDENT EXPERTS COME AND, AND PRESENT TO US ON THE PROBLEMS WITH MODELING AND, AND OTHER TECHNICAL DETAILS.

AND THEN WE HAD OUR REGULAR MAY MEETING AND TWO ADDITIONAL MAY AND EARLY JUNE TECH MEETINGS TO, TO WORK WITH ERCOT ON A NEW PROPOSED VERSION OF THE NOER THAT WE HAD BEFORE THE BOARD TODAY OR BEFORE THIS COMMITTEE TODAY.

UM, I, IT WAS MY UNDERSTANDING ERCOT SUPPORTED THAT APPROVAL.

I KNOW THEY HAVE NEW COMMENTS.

UH, I'LL GO THROUGH THE, THE NOER, THE NEW VERSION OF THE NOER THAT THAT TECH APPROVED.

SO THE, THE TECH APPROVED VERSION FROM JUNE 7TH THAT YOU WERE LOOKING AT, UM, THIS REF REFLECTS A DIFFERENT DATE.

AND SO ONE OF THE, THE KIND OF DISAGREEMENTS BEFORE WAS THE DATE AT WHICH THIS WOULD APPLY TO NEW RESOURCES.

THIS VERSION HAS AN AUGUST 1ST, 2024 DATE.

UM, EXISTING IBR WOULD NOT BE INDEFINITELY GRANDFATHERED.

THERE WOULD BE, UM, THE, THOSE WITH IAS EXECUTED BEFORE THE AUGUST ONE DATE WOULD NOW BE REQUIRED TO MAXIMIZE THEIR READ THROUGH CAPABILITY.

UM, AND, AND, YOU KNOW, SOFTWARE REQUIREMENTS, WE ALL AGREED WERE, WERE NEEDED AND THEN THE IBS WHO COULD NOT MEET THEIR NEW REQUIREMENTS COULD APPLY FOR AN EXEMPTION WHICH WOULD BE GRANTED AT OR CUTS DISCRETION.

AND THEN WHAT WE DID WITH THE KIND OF STICKY ISSUE THAT YOU WOULD MAYBE BIFURCATE IS WE GRAY BOX THAT.

AND THAT WAS THE ISSUE THAT WENT TO THE HARDWARE UPGRADES AND THE COMMERCIAL REASONABILITY.

WHAT WAS IN THE TECH APPROVED VERSION WAS THAT HARDWARE CHANGES WOULD BE REQUIRED UP TO A 40% COST THRESHOLD.

BUT WE, WE GRAY BOX THAT AND THE INTENT OF THE GRAY BOX SCENE, WHICH JUST TECHNICALLY MEANS THAT IT WOULD NOT APPLY UNTIL I BELIEVE MARCH 1ST, 2025.

THE TECH INTENT THERE WAS REALLY TO BIFURCATE AND SEPARATE THAT ISSUE OUT.

AND SO WE, WE ARE ON BOARD WITH THAT APPROACH.

WE DID HAVE ONE OPPOSING VOTE IN THE RETAIL SEGMENT.

UM, AND THE REASONS FOR OPPOSITION STATED WERE, YOU KNOW, ESSENTIALLY NOT HAVING ENOUGH TIME TO GIVE CONSIDERATION TO THE COMMENTS AND THAT THE, THE 40% CUS THRESHOLD WAS ARBITRARY.

AGAIN, THAT WOULD BE GRAY BOXED.

UM, WE DID HAVE A NUMBER OF COMMENTS COME IN AFTER THE TECH DECISION.

THERE WAS, UH, JUNE 10TH TECH

[01:15:01]

POSITION OPPOSITION BY JOINT COMMENTERS AGAIN IN ENERGY NEXTERA, SOUTHERN POWER, AVAN GRID CLEARWAY.

UM, ON JUNE 11TH THERE WERE 18 TECH OPPOSITIONS FILED, I BELIEVE ALL IN ENERGY ENTITIES.

UM, AND THEN YESTERDAY THERE WERE SOME TECH OR ERCOT COMMENTS, UM, WHICH I UNDERSTAND GET TO BIFURCATING.

I I JUST WANNA NOTE, TAC DID DISCUSS BIFURCATION AS EARLY AS SEPTEMBER OF 23.

THERE ARE STAKEHOLDER COMMENTS FILED AS EARLY AS APRIL OF 23 SUPPORTING THIS APPROACH.

UM, SO IT'S, IT'S SOMETHING THAT STAKEHOLDERS APPROACHED OR STAKEHOLDERS WERE, YOU KNOW, UM, APPRO APPROVING OF AND SUPPORTIVE OF, BUT WE WERE NOT NOT ABLE TO GET ERCOT SUPPORT ON THOSE.

UM, SO I THINK THAT MAY HAVE CHANGED.

AND THEN I WANNA MAKE SURE WE ARE CLEAR TODAY ON THE EXPECTATIONS GOING FORWARD.

IF THIS NO G WERE TO TABLED, I, I THINK, YOU KNOW, IF WE BIFURCATE IT IS SOME VERSION OF IT COMING BACK TO TAC AGAIN, I THINK WE KIND OF LAID THE GROUNDWORK FOR, FOR HOW THOSE STAKEHOLDER DISCUSSIONS ARE GOING.

AND THEN, YOU KNOW, I DIDN'T, WASN'T REALLY AWARE OF THIS UNTIL I SAW THE COMMENTS LAST NIGHT, SO I HAVEN'T HAD TIME TO TO FULLY DIGEST, BUT I'D LIKE SOME CLARITY ALSO ON THE IMPACT TO THE TAC PROCESS GOING FORWARD.

UM, THE, THE SIX 16 COMMENTS FROM ERCOT INDICATE MAYBE NEGOTIATIONS WITH JOINT COMMENTERS.

YOU KNOW, IT SAYS JOINT COMMENTERS HAVE REPRESENTED TO ERCOT FOLLOWING MATTERS.

SO, YOU KNOW, I I JUST THINK NATURALLY OTHER STAKEHOLDERS, RIGHT? IF WE HAVE A FIRM FUEL NPRR OR ONLY CERTAIN INTERESTED PARTIES AND FIRM FUEL GOING TO WANT THAT ABILITY TO NEGOTIATE WITH ERCOT.

SO I THINK TAC WOULD LIKE SOME CLARITY ON WHAT IS GOING THROUGH A FULL TAC RECOMMENDATION AND WHAT IS GONNA BE SORT OF NEGOTIATED WITH JUST A CERTAIN SUBSET OF STAKEHOLDERS WITH ERCOT.

I WILL LEAVE IT AT THAT.

WELL, THANK YOU CAITLYN.

DAN,

[5.2.1 ERCOT Comments on NOGRR245]

I BELIEVE, UH, ERCOT HAS SOME COMMENTS AND TO THE EXTENT WE CAN ADDRESS CAITLYN'S FINAL POINTS AS WELL, I THINK WE SHOULD DO THAT.

SO BOB, LET ME SEE IF I CAN START FIRST AND THEN I THINK IT'S USEFUL FOR DAN TO GO THROUGH A COUPLE OF SLIDES.

THE PRESENTATION WE PUT IN THE MATERIALS IS BASED UPON THE TAC APPROVED VERSION THAT'S BEING RECOMMENDED TO THE COMMITTEE AND THE BOARD, WHICH WE OBVIOUSLY DO SUPPORT.

UM, THE, THE ISSUE HAS BEEN CENTERED AROUND MAINLY THE BIFURCATION PROCESS OF THE EXEMPTIONS AND EXTENSION PROCESS FOR THE LEGACY ASSETS THAT MAY NOT BE ABLE TO MEET THE, UH, LEGACY RIGHT THROUGH REQUIREMENTS.

AND, YOU KNOW, TALKING TO THE JOINT COMMENTERS THAT KAITLIN'S ALREADY ANNOUNCED TO THOSE JOINT COMMENTERS ARE, THEY OBJECT TO THAT PROCESS AND IT SEEMS PRETTY CLEAR THAT THEY WOULD APPEAL THE CURRENT VERSION TO THE PUBLIC UTILITY COMMISSION AS A CONTESTED CASE.

AND THAT WOULD BASICALLY HALT THE ENTIRE BENEFIT OF THE WORK THAT ERCOT HAS DONE WITH THE STAKEHOLDERS SINCE JANUARY, 2023, SO THAT WE COULD GO OVER THERE AND PRESENT TO THE COMMISSION THROUGH A CONTESTED CASE ALL THE RISKS THAT WE'RE TRYING TO SOLVE AS A STAKEHOLDER BODY.

SO WORKING WITH THE JOINT COMMENTERS, WE SUBMITTED THESE COMMENTS LAST NIGHT TO TRY TO STREAMLINE THAT ISSUE AND REALLY SEPARATE THE EXEMPTION EXTENSION PROCESS INTO TWO PHASES THAT WE HOPE THAT WE CAN GET CONSENSUS ON AND ULTIMATELY HAVE SOMETHING TO, TO, UH, AT LEAST INFORM TAC ABOUT THAT REALLY ACHIEVES THE SAME THING THAT TAC WAS RECOMMENDING.

BUT AT THIS VERSION IN FRONT OF THE COMMITTEE, AND THE BOARD IS NOT SATISFACTORY TO JOINT COMMONERS GRAY BOXING.

THAT SECTION IS NOT SATISFACTORY TO JOINT COMMONERS AND THEY BELIEVE THAT'S STILL A RISK TO THEIR, TO THEIR ASSETS.

AND SO IF WE CAN AVOID THAT RISK, WHICH I'M NOT SAYING WE WON'T, THAT THERE STILL COULD BE ISSUES, UM, BUT IF WE CAN AVOID THAT RISK AND ALLOW THE MAJORITY OF THE NOER TO MOVE FORWARD AND BECOME EFFECTIVE, THEN IT WILL START TO PROVIDE THE RELIABILITY BENEFIT THAT WE'VE BEEN HIGHLIGHTING FOR MANY MONTHS.

AND SO THAT'S, AND I'LL TALK A LITTLE BIT MORE ABOUT THE ERCOT COMMENTS THAT WE FILED LAST NIGHT WORKING WITH THE JOINT COMMONERS AND ADDRESS KAITLYN'S ISSUE, BUT JUST TO TRY TO FRAME IT UP FOR THE COMMITTEE, THE WORK THAT WAS DONE SINCE THE BOARD REMANDED IT BACK DOWN IN APRIL, I WOULD LIKE THE END TO GO THROUGH A COUPLE OF THE SLIDES THAT FOCUSES ON KIND OF THE CORE ISSUES THAT WE ALL AGREE ON.

AND SOME OF THIS WAS TALKED ABOUT AT THE APRIL MEETING THAT WE AGREED ON SOME OF THESE CONCEPTS, BUT THERE WAS A LOT OF GOOD EFFORT REMANDING IT BACK DOWN TO TAC WITH, YOU KNOW, THE WORK OF THE TAC LEADERSHIP AND TAC MEMBERS TO PRESENT A COMPLETELY DIFFERENT VERSION TO THE BOARD AND THE COMMITTEE TODAY.

AND, AND IT'S WORTH NOTING THAT THEY DID A MONUMENTAL

[01:20:01]

EFFORT WORKING WITH THE STAKEHOLDERS IN ERCOT TO GET ALL THIS DONE BASED UPON THE COMMITTEE AND THE BOARD'S DIRECTION TO REMAND IT BACK DOWN TO ADDRESS OUR CONCERNS.

SO WE ARE SUPPORTIVE OF THE TAC VERSION.

WE HAD TO GIVE UP THINGS AS WE WENT THROUGH THIS DISCUSSION, BUT THE PRINCIPLES THAT ARE IN NORE 2 45 ARE GOOD PRINCIPLES TO MOVE THE RELIABILITY NEEDLE FORWARD.

AND I'LL TURN IT OVER TO DAN TO WALK THROUGH THAT AND THEN CIRCLE BACK ON THE COMMENTS THAT WE FILED LAST NIGHT.

YEAH, SO ONE OF THE THINGS THAT WE TEED UP TO TAC WAS WHAT, WHAT ARE, WHAT ARE WE REALLY LOOKING FOR THROUGH THIS REMAND? AND UM, ONE OF THE PRIMARY THINGS WAS TO GET THIS MAXIMIZATION OF THE CAPABILITY, UH, UP TO THE EQUIPMENT CA UP TO THE EQUIPMENT CAPABILITY THROUGH SOFTWARE FIRMWARE AND, UM, UH, PARAMETER CHANGES NOT ONLY TO WHAT THE CURRENT REQUIREMENTS ARE, BUT ALL THE WAY TO IEEE 2,800 TO THE EXTENT THAT THEY COULD DO SO THROUGH SOFTWARE FIRMWARE AND, AND UM, UM, PARAMETER CHANGES.

AND SO THAT'S, THAT'S REALLY AN IMPROVEMENT, UH, OVER WHAT HAD BEEN IN THE PREVIOUS T GUIDANCE.

UM, AND SO THAT THAT'S, THAT'S SOMETHING THAT WAS DEFINITELY ACHIEVED THROUGH THE PROCESS.

UM, THE OTHER THING THAT I THINK WE, I NOTED THAT WE WERE REALLY CONCERNED ABOUT WAS THIS ONGOING EXEMPTION PROCESS THAT IF YOU HAD A FAILURE, YOU COULD ASK FOR AN EXEMPTION, YOU COULD BE GRANTED THAT EXEMPTION AND THEN YOU COULD HAVE A SUBSEQUENT FAILURE AND BE GRANTED AN OR A REQUEST AN EXEMPTION TO THAT SUBSEQUENT FAILURE EVEN THOUGH YOU HADN'T MET THE PREVIOUS REQUIREMENTS.

AND SO THAT'S BEEN TAKEN OUT OF THE CURRENT TAC VERSION AND THAT'S DEFINITELY AN IM IMPROVEMENT.

UM, IF YOU TELL US THAT THIS IS THE, IF THE AN IBR TELLS US THAT THIS IS WHAT WE'RE GOING TO BE ABLE TO DO, SO WE'RE TRYING TO GET TO IEEE 2,800, WE GET TO THIS LEVEL, WE CAN'T QUITE GET THERE, BUT THAT'S OKAY.

THERE'S AN EXEMPTION THERE.

IF YOU HAVE A FAILURE, YOU HAVE TO MITIGATE BACK UP TO WHAT YOU TOLD US.

SO THAT, THAT IS, UM, BECAUSE WE'VE PLANNED THE SYSTEM IN SUCH A WAY THAT, THAT, UH, THAT ASSUMES THAT YOU'RE GONNA BE ABLE TO DO THAT.

AND SO THAT'S, THAT'S DEFINITELY AN IMPROVEMENT AS WELL.

UM, I'M GONNA SWITCH OVER HERE.

THERE'S, THERE'S SOME OTHER, UH, MORE MINOR THINGS, BUT, UM, AND IN FACT THERE'S A WHOLE LIST OF, OF ALL THESE AS WE GO THROUGH HERE ADDRESSING EACH OF THOSE POINTS.

UM, ONE OF THE, THE CURRENT, THE, THE MAIN THINGS WAS TO LET GET THE DATE ON WHICH AFTER THAT POINT YOU HAVE TO MEET IEEE 2,800.

UH, YOU, YOU HAVE TO, SO YOU'RE TRYING TO DO IT ALL ALONG NO MATTER WHAT YOUR VINTAGE IS TO THE EXTENT YOU CAN WITH THESE SOFTWARE, UH, ET CETERA, UPGRADES.

BUT AFTER THIS DATE, YOU, YOU HAVE TO MEET THAT, UH, THAT WOULD BE LOCKED IN IN, UH, AUGUST.

NOW THERE IS A, THERE IS A, THERE'S A DOWNSIDE TO THAT IN THAT THERE'S LIKE 23, UH, 25 GIGAWATTS POTENTIALLY THAT WOULDN'T BE REQUIRED TO DO THAT, THAT ARE, HAVE IAS BETWEEN THE DATE WE ORIGINALLY PROPOSED IN JUNE OF 23 THROUGH THROUGH AUGUST OF 24.

BUT IF EVERYBODY'S TRYING TO GET UP TO, TO THE EXTENT THEY CAN THROUGH SOFTWARE AND SO FORTH, GET UP TO THE, UH, UH, IEE EEE 2,800 REQUIREMENTS, INCLUDING SOME OF THE OLDER PLANTS.

WE FELT LIKE THAT WAS A, WAS A GOOD CON COMPROMISE AND, UH, TECH, UH, ENDORSE THAT.

UM, I THINK I MENTIONED THE OTHER, UM, SO, SO REALLY IT, UM, I'M NOT GONNA TALK ABOUT EXEMPTION, SORRY, THIS, THIS EXEMPTION THING IS FAIRLY, UH, TAKING IT OUT AS FAIRLY NEW TO ME TOO.

SO, UH, THE, UM, WE ISSUED A MARKET NOTICE THAT BASICALLY BACK IN, IN, IN, UH, MAY THAT SAID, UH, GO AHEAD AND START MAKING THESE SOFTWARE UPGRADES.

DON'T WAIT FOR THE, UH, FOR THIS TO COME TO PASS.

DON'T WAIT FOR, UH, THIS, THIS NOER TO PLAY OUT.

BUT IF YOU'RE, IF EVERYBODY'S ON BOARD WITH MAKING THE SOFTWARE UPGRADES TO TRY TO IMPROVE THE RIDE THROUGH CAPABILITY, GO AHEAD AND DO IT.

UM, AND WE GAVE THEM A, A A AN AUGUST DATE IN WHICH THEY WOULD HAVE TO GIVE US THE PLANS.

WELL, I CHECKED FRIDAY AND GRANTED THAT THERE'S, THERE'S A, UM, UM, WE, WE GAVE 'EM TILL AUGUST TO COME UP WITH THE PLAN, BUT I CHECKED AS OF FRIDAY, NOBODY'S MADE ANY OF THESE SOFTWARE IMPROVEMENTS OR AT LEAST THAT THEY'VE REPORTED THROUGH THE, THE PICKER 1 0 9 PROCESS WITH US.

AND SO THAT'S PART OF THE INCENTIVE FOR LET'S GO AHEAD AND GET

[01:25:01]

THOSE PIECES THAT REQUIRED MAXIMIZATION, UPDATING YOUR MODELS AND THOSE KIND OF THINGS, WHY THAT'S SO PERTINENT BECAUSE TRYING TO DO IT IN A VOLUNTARY WAY MAY OR MAY NOT WORK.

TRYING TO, GOING AHEAD AND GETTING THOSE PIECES OF IT IN AS A REQUIREMENT IS IMPORTANT.

AND SO CHAD, I GUESS I'LL TURN IT BACK TO YOU TO TALK ABOUT THE WHY THE EXEMPTION PROCESSES.

YEAH, THANKS DAN.

SO IN

[5.2.2 Other Comments on NOGRR245, if any]

THE COMMENTS SUBMITTED LAST NIGHT BY ERCOT STAFF IS REALLY TO RECOMMEND THAT THE COMMITTEE AND THE BOARD TABLE, THE NOER TO ALLOW US TIME TO WORK WITH THE JOINT COMMENTERS ON SOME CHANGES TO THE BIFURCATION PROCESS.

AND, AND AS WE INDICATED IN THE COMMENTS LAST NIGHT, THIS IS A NOGA THAT'S GONE THROUGH A LOT OF RED LINE CHANGES.

THERE ARE A COUPLE OF ERRORS THAT WE NOTICED, AND SO WE WOULD HAVE TO OBVIOUSLY CORRECT THOSE AS WELL.

BUT THE MAIN POINT IS TO TRY TO SEPARATE OUT THE BIFURCATION EXEMPTION PROCESS INTO TWO PHASES.

A FIRST PHASE THAT WOULD BE PART OF THIS NOER 2 45 IN CONCEPT THAT WOULD ALLOW ALL THESE THINGS THAT DAN JUST TALKED ABOUT TO MOVE FORWARD, ALLOW THOSE LEGACY ASSETS WHO BELIEVE THEY CAN'T MEET THE, THE LEGACY REQUIREMENTS TO SUBMIT A REQUEST AND TO GIVE US THE MODELS.

NOW THIS IS DIFFERENT THAN WHAT TACK HAD PREVIOUSLY TALKED ABOUT MANY MONTHS AGO AROUND BIFURCATING THE ISSUE.

THERE WASN'T AN EXEMPTION PROCESS ALL THE WAY UP TO THE AUGUST 1ST, 2024 DATE.

THIS IS SOMETHING THAT ERCOT ULTIMATELY GAVE UP IN THE STAKEHOLDER PROCESS, THAT THERE MAY BE RESOURCES THAT ARE 2014 AND NEWER THAT CAN'T MEET THE LEGACY REQUIREMENTS, WE DON'T KNOW.

BUT THIS PROCESS ALLOWS THOSE FACILITY OWNERS TO LOOK AT IT, WORK WITH THEIR OEMS, AND IF THEY BELIEVE THAT THEY'RE SHORT AT SOME POINT ALONG THE LEGACY REQUIREMENT TO REQUEST THAT EXEMPTION.

SO THAT'S A CHANGE IN WHAT KAITLYN HAD MENTIONED, WHERE PREVIOUSLY THEY WERE TALKING ABOUT BIFURCATING THE ISSUES.

WE ALWAYS THOUGHT THAT THERE WERE UNITS THAT MAYBE WERE PRE 2014 THAT COULDN'T MEET THE LEGACY REQUIREMENTS, BUT THROUGH THE STAKEHOLDER PROCESS, THIS EXEMPTION PROCESS ALLOWS ANYONE ALL THE WAY UP TO AN ASSET UP TO AUGUST 1ST, 2024 TO AVAIL THEMSELF OF AN EXEMPTION REQUEST.

BUT THEY HAVE TO GIVE US AN ACCURATE MODEL.

THAT WAS A KEY DISCUSSION IN SOME OF THE FIRST WORKSHOPS WITH TAC AROUND THE MODELS THAT WE HAVE MAY NOT REFLECT REALITY RIGHT NOW.

AND HOW DO WE KNOW THAT? BECAUSE WE'VE SEEN SO MANY RIDE THROUGH EVENTS THAT ARE DIFFERENT THAN THE MODELS THAT WE CURRENTLY HAVE.

SO THERE IS A RISK HERE RIGHT NOW THAT WE MAY HAVE OTHER RESOURCES THAT CAN'T MEET THE CURRENT RIDE THROUGHS REQUIREMENTS BECAUSE WE MAY OR MAY NOT HAVE ACCURATE MODELS.

IN FACT, THE, THE FIRST WORKSHOP FOR TAC, THERE WERE SEVERAL HOURS DISCUSSED AROUND MODELING AND A RECOGNITION OF THE RESOURCE ENTITIES HAVING TO WORK MORE WITH THEIR OEMS TO GET ACCURATE MODELS TO PRESENT TO ERCOT.

THAT WOULD BE A KEY BENEFIT OF NORE 2 45, GET THE ACCURATE MODELS AND MAKE SURE THOSE THAT BELIEVE THEY CANNOT MEET THE CURRENT REQUIREMENTS, ASK FOR THAT REQUEST.

THEN OBVIOUSLY ERCOT HAS TO DO A RELIABILITY ASSESSMENT BOTH AT THE INDIVIDUAL LEVEL AND AT THE AGGREGATE LEVEL.

AND THEN THE ISSUE OF HOW DO WE DECIDE WHO GETS AN EXEMPTION OR NOT WOULD BE PART OF THIS PHASE TWO REVISION REQUEST AN ISSUE WE MAY NOT BE ABLE TO REACH CONSENSUS ON WITH THE STAKEHOLDERS, BUT I HOPE THAT WE CAN.

BUT IF WE CAN, THEN THAT SEPARATE REVISION REQUESTS WOULD ALLOW FOR THAT TO MOVE FORWARD AS A CONTESTED CASE WITH THE COMMISSION AND IT WOULD BE ISOLATED FROM ALL THE OTHER BENEFITS THAT ARE PART OF NO 2 45 RIGHT NOW.

THE REASON WHY I DON'T RECOMMEND REFER ANY BACK DOWN TO TAC IS THAT TAC HAS BEEN DIVIDED AMONG THIS ISSUE AND I THINK TAC HAS DONE A TREMENDOUS JOB.

THEY TRIED TO ADDRESS ER KAT'S CONCERNS AND THE JOINT COMMENTER'S CONCERNS BY PUTTING A PIECE OF THE EXEMPTION PROCESS IN A GRAY BOX.

AND A GRAY BOX MEANS IT DOESN'T BECOME EFFECTIVE UNTIL THAT TRIGGER, UH, IN THE FUTURE HAPPENS.

BUT THAT IS NOT SATISFACTORY TO JOINT COMMENTERS.

I UNDERSTAND THEIR CONCERNS AND TO THE EXTENT WE CAN WORK WITH THEM A LITTLE BIT LONGER AND SEE IF WE CAN TRULY BREAK THIS INTO TWO PHASES WITH A REQUEST BY THE COMMITTEE AND THE BOARD TO MOVE THAT SECOND PHASE AS QUICKLY AS POSSIBLE BACK TO US, TO THE BOARD AND THE COMMITTEE LATER IN THE YEAR OR EARLY NEXT YEAR, THEN THAT'S THE FRAMEWORK THAT WE PROPOSE IN OUR COMMENTS LAST NIGHT.

OF COURSE, IF WE GO OFF AND WORK WITH THE JOINT COMMONERS, JUST LIKE EVERYBODY DOES IN THE STAKEHOLDER INDUSTRY, YOU JUST SAW TWO SETS OF JOINT COMMENTS

[01:30:01]

FOR 2 45 AND 1224 THAT ERCOT WAS NOT INVOLVED IN THOSE DISCUSSIONS YET.

MULTIPLE ENTITIES GOT TOGETHER AND DECIDED TO WORK TOGETHER AND SUBMIT SOMETHING.

ERCOT WOULD DO THE SAME THING.

IF WE'RE ABLE TO COME UP WITH CONSENSUS COMMENTS, WE WOULD SUBMIT THOSE.

IF WE NEED TO HAVE A WEBEX OR DISCUSSION WITH TAC BEFORE THIS ULTIMATELY GETS BACK TO THE COMMITTEE AND THE BOARD, THEN WE WOULD DO SO.

TRANSPARENCY IS KEY TO ERCOT TO THE STAKEHOLDERS.

IT'S ALWAYS BEEN A PARAMOUNT OF THIS PROCESS.

THERE'S NO ISSUE WITH GOING OFF AND WORKING WITH A SET OF STAKEHOLDERS TO ADDRESS THEIR CONCERNS BECAUSE EVERYTHING IS PRESENTED PUBLICLY.

SO HAPPY TO ANSWER ANY QUESTIONS OR WOODY OR DAN ARE AVAILABLE AS WELL FOR ANY ADDITIONAL QUESTIONS.

I KNOW ERIC GOFF ALSO SIGNED UP TO SPEAK ON THIS ON BEHALF OF NEXTERA AND THE JOINT COMMONERS AND I THINK WE SHOULD, UH, CHAIR RECOGNIZE HIM WHENEVER IT'S APPROPRIATE.

AND ANY QUESTIONS FOR, FOR DAN? OKAY, I THINK WE'RE GOOD.

DAN.

ETHAN, ARE YOU OKAY DOWN THERE? YOU LOOK LIKE YOU HAVE SOMETHING YOU REALLY WANT TO SAY.

I, I'M WONDERING, I JUST WOULD LIKE CLARITY, WHAT IF WE BIFURCATE THIS AND AND AGREE, TOTALLY UNDERSTAND YOUR POINTS.

CHAD, WOULD THAT SECOND PART COME BACK TO, TO TAC THAT IS, WOULD BE HEADED FOR THIS COMMITTEE IN DECEMBER? THAT WAS THE RECOMMENDATION THAT IT WOULD BE A BOARD PRIORITY REVISION REQUEST GO THROUGH THE NORMAL STAKEHOLDER PROCESS.

SO THE SECOND PIECE OF IT WOULD JUST GO THROUGH THE NORMAL STAKEHOLDER PROCESS LIKE EVERYTHING ELSE.

SO WE'LL HEAR FROM ERIC AND THEN FROM THAT CHAD, YOU CAN HELP US SPECIFICALLY WITH A RESOLUTION THAT, UH, WE'RE GONNA BE ASKED TO, TO REVIEW.

I, I JUST HAD A COMMENT.

OH, YES, LAUREN.

SO, UM, IRRESPECTIVE OF HOW THE COMMITTEE ULTIMATELY VOTES ON WHETHER TO BIFURCATE THE, UM, EXEMPTION EXCEPTIONS PROCESS, I, I THINK THAT'S A REALLY IMPORTANT PART OF THIS NOER AND, UM, I WOULD ASK THAT IF, IF, IF YOU BIFURCATE IT AND YOU CONTINUE TO WORK WITH ITS STAKEHOLDERS, AS YOU NOTED, UM, ANY STAKEHOLDERS HAPPY WITH OR CO'S ULTIMATE DECISION WITH THE EXEMPTION REQUEST, UM, CAN APPEAL IT TO THE COMMISSION AS A CONTESTED CASE.

MY, MY REQUEST JUST, YOU KNOW, MAKE, TO MAKE SURE THAT WE AT THE BACK END WOULD BE ABLE TO PROPERLY ADJUDICATE AND REVIEW THOSE COMPLAINTS AS CONTESTED CASES IS THAT THERE BE, UM, A ROBUST RECORD OF DOCUMENTATION AND INFORMATION THAT WE WOULD BE ABLE TO REVIEW IF WE HAD SOMEONE FILE, UH, A CHALLENGE ON ERCOT, UM, REJECTION OF AN EXEMPTION.

SO, WE'LL, WE'LL JUST NEED ENOUGH INFORMATION TO BE ABLE TO ASSESS THAT IF WE END UP WITH THOSE TYPES OF COMPLAINTS AT THE BACK END.

AND I KNOW Y'ALL HAVE INSERTED A VARIETY OF, UH, DOCUMENTATION IN THE NOER SO FAR, BUT THAT, THAT I THINK IS GONNA BE REALLY, REALLY IMPORTANT FOR US TO BE ABLE TO ASSESS THOSE TYPES OF, UM, COMPLAINTS THAT THE COMMISSION VIA CONTESTED CASE PROCEEDINGS.

THANK YOU, COMMISSIONER.

I THINK THERE'S KIND OF TWO POSSIBLE APPEALS.

THERE'S AN APPEAL OF THE POLICY FRAMEWORK BEFORE YOU EVEN GET TO THE DOCUMENTATION AND ANALYSIS, WHICH IS WHAT I'M TRYING TO AVOID BY WORKING WITH THE STAKEHOLDERS AND THE JOINT COMMENTERS TO SEE IF WE CAN COME UP WITH A FRAMEWORK THAT MAKES SENSE.

AND THEN ONCE THE POLICY FRAMEWORK IS EFFECTIVE, THEN THERE'S THE ACTUAL EVALUATION OF YES OR NO, DO YOU GET AN EXEMPTION? AND THAT WOULD OBVIOUSLY BE A SEPARATE INDIVIDUAL, RIGHT? OF EACH, UM, INVERTER BASED RESOURCE THAT DIDN'T LIKE THE OUTCOME AFTER THE POLICY FRAMEWORK.

SO RIGHT NOW WE'RE STILL AT THE POLICY FRAMEWORK LEVEL AND YOU KNOW, THE JOINT COMMANDERS HAVE EXPRESSED CONCERNS WITH THAT POLICY FRAMEWORK AND APPEALING THAT CREATES A CONTESTED CASE AROUND THE ENTIRE POLICY FRAMEWORK BEFORE YOU EVEN GET TO THE, THE DETAILED ANALYSIS, RIGHT? BUT IRRESPECTIVE OF WHAT HAPPENS WITH POLICY FRAMEWORK OR NOT, WE COULD BE AT THE BACK END DEALING WITH THESE YEAH, ABSOLUTELY CONTESTED CASES AND THAT'S WHAT I'M MAKING SURE THAT WE END UP WITH ENOUGH DOCUMENTATION AND PROPERLY ASSESS THOSE.

UM, WITH RESPECT TO THE POLICY FRAMEWORK, WE END UP WITH A CONTESTED CASE AT THE COMMISSION.

I MEAN, WE'RE GONNA BE IN THE SAME SITUATION.

WHAT ARE WE GONNA REVIEW IN TERMS OF LOT, UM, STAKEHOLDER COMMENTS HAVE BEEN, PUBLIC DISCUSSIONS HAVE BEEN PUBLIC AND, AND SO I'M, I'M JUST WONDERING WHAT, YOU KNOW, USUALLY CONTESTED CASE IN MY MIND HAS DISCOVERY AND TESTIMONY AND, YOU KNOW, ALL THE USUAL IMPORTANT FACTORS THAT ARE PART OF THE CONTESTED CASE.

SO THIS IS KIND OF A NEW WORLD THAT WE'RE IN HERE, I GUESS WITH RESPECT TO, UM, ULTIMATELY SB TWO AND HB 1500 AND HOW THEY KIND OF COME TOGETHER TO END UP HERE.

[01:35:01]

ERIC, GOOD AFTERNOON.

UH, ERIC GOFF ON BEHALF OF NEXTERA AND THE JOINT COMMENTERS, UM, I JUST WANNA START BY, UH, ESPECIALLY MY GRATITUDE TO ERCOT STAFF AND, UM, CHAD IN PARTICULAR FOR WORKING WITH US OVER THE LAST FEW DAYS TO, UH, GET RESOLUTION ON A PROPOSED MOTION TO TABLE HERE.

UM, HE DID SPEAK WITH US ABOUT THIS AND THE STATEMENTS, UM, THAT ARE ATTRIBUTED TO THE JOINT COMMENTERS ARE CORRECT.

UH, SO I JUST WANNA PUT THAT IN THE RECORD, UH, THE THREE BULLET POINTS NEAR THE END OF HIS PRESENTATION.

UM, I WANNA MAKE MAKE SURE THAT'S, THAT'S CLEAR THAT WE ALSO REALLY APPRECIATE, UH, TAC AND THE TAC AND THE STAKEHOLDER PROCESS FOR, YOU KNOW, REVIEWING THIS, UM, ALMOST AD NAUSEUM.

UM, JUST TO, TO BE CANDID AND, AND THINK THAT ONGOING REVIEW OF THESE IMPORTANT ISSUES AT TAC IT IS IMPORTANT.

UH, WE'RE HAPPY TO NEGOTIATE THIS, UM, UH, BIFURCATION LANGUAGE AS, AS IS STATED IN THE ERCOT COMMENTS AND BRING SOMETHING BACK TO THE ERCOT BOARD, UH, A SPECIAL CALLED MEETING OR A FUTURE MEETING AND ANTICIPATE THAT THE FUTURE REVISION REQUEST WOULD COME BACK THROUGH THE ERCOT STAKEHOLDER PROCESS AND BACK TO THE BOARD.

UM, THERE ARE, UM, A NUMBER OF POINTS OF DISAGREEMENT AROUND POLICY AND DESCRIPTIONS OF THE PROBLEM THAT, YOU KNOW, WE CONTINUE TO HAVE WITH OUR CAT STAFF, SOME OF WHICH CAME UP EARLIER TODAY IN ORDER TO MOVE THIS MEETING ALONG AND HAVE A PRODUCTIVE CONVERSATION.

I DON'T WANT TO DO A POINT BY POINT REBUTTAL.

YOU'VE SEEN OUR APPEAL THAT CONTAINS MANY OF THE POINTS THAT I WOULD MAKE TODAY, UM, THAT WE THINK ARE IMPORTANT IF THIS EVER DOES GET TO A TESTED CASE OR O OR OTHER CONSIDERATION IN SOME OTHER VENUE OR FORMAT AT THE UTILITY COMMISSION.

UM, SO I'M HOPEFUL THAT WE CAN WORK OUT A BIFURCATION BIFURCATED PATH HERE, UM, ALONG THE LINES OF THE ERCOT COMMENTS THAT WERE FILED AND, UH, LOOK FORWARD TO COMING BACK TO YOU WITH THAT IN THE FUTURE.

HAPPY TO ANSWER ANY QUESTIONS.

THAT'S GREAT.

ANY QUESTIONS FOR ERIC? NO.

SO CHAD, UH, CAN YOU GIVE US THE RESOLUTION IN FRONT OF THE COMMITTEE? SO IF, IF THE COMMITTEE WANTS TO MOVE FORWARD, YOU KNOW, MY RECOMMENDATION IS THAT WE TABLE THE NOER AND YOU RECOMMENDED THAT TO THE BOARD SO THAT ERCOT CAN GO WORK WITH THE JOINT COMMENTERS TO SEE IF WE CAN BIFURCATE THIS EXEMPTION AND EX EXTENSION PROCESS CONSISTENT WITH OUR COMMENTS.

UH, YESTERDAY WE'LL OBVIOUSLY WORK WITH TAC UH, YOU KNOW, DOES THAT MEAN IT'LL BE A FORMAL TECH MEETING? WE'RE NOT TRYING TO ASK T TO HAVE A, YOU KNOW, A SPECIAL ATTACK MEETING.

THEY'VE ALREADY DONE A LOT OF THIS, BUT WE OBVIOUSLY WORK AND COORDINATE WITH TECH LEADERSHIP ON THE BEST WAY TO GET THEIR INPUT AS WELL.

AND BRING THIS BACK AT THE LATEST AT THE AUGUST BOARD MEETING, MY RECOMMENDATION WOULD BE TO TRY TO SCHEDULE A SPECIAL MEETING WITH THE COMMITTEE AND THE BOARD TO ADDRESS THIS ISSUE AS QUICKLY AS POSSIBLE.

OF COURSE, WE WOULD POLL THE BOARD MEMBERS ON THEIR AVAILABILITY.

I WOULD ANTICIPATE, YOU KNOW, MID TO LATE JULY.

I THINK IT'S IMPORTANT TO GET THAT AUGUST 1ST DATE LOCKED IN SO THAT WE CAN HAND THIS OFF TO THE COMMISSION FOR THEIR POLICY DISCUSSION AS QUICKLY AS POSSIBLE.

AS WE'VE SAID FOR MANY MONTHS, AND PARTICULARLY AT THE LAST APRIL MEETING, THIS IS A CRITICAL RELIABILITY ISSUE FOR THE GRID AND SO IT IS TIME TO MOVE THIS FORWARD AND HAND THIS OFF TO THE COMMISSION AS EXPEDITIOUSLY AS POSSIBLE.

UM, SO I'M OPTIMISTIC THAT WE'LL BE ABLE TO WORK THE JOINT COMMONERS AND ANY OTHER INTERESTED STAKEHOLDERS TO EFFECTIVELY BIFURCATE THAT AND GET THESE IMPORTANT PIECES.

AND, AND THEN ULTIMATELY FOR THE SECOND PHASE, IF WE'RE ABLE TO CHEESE THAT, WE WOULD ULTIMATELY WANT THE, THE COMMITTEE AND THE BOARD AT THE NEXT MEETING TO SUPPORT A PRIORITY REVISION REQUEST FOR THE REST OF THE PHASE TWO EXEMPTION EXTENSION PROCESS.

SO ALL THE COMMITTEE REALLY NEEDS TO DO TODAY IS A MOTION, A TABLE 2 45 TO NO LATER THAN EITHER A SPECIAL MEETING OF THE COMMITTEE AND BOARD OR, UH, THE AUGUST BOARD MEETINGS, REGULARLY SCHEDULED BOARD MEETINGS.

AND THEN CHAD, THE VIEW IS THAT THIS TRANSFORMS INTO TWO NORES.

THE, THE ONE, ONE BEING THE THINGS THAT WILL GET THE RELIABILITY BENEFITS QUICKLY.

AND THE OTHER ONE, THE MORE CONTENTIOUS EXEMPTION TYPE OF ITEMS WOULD BE IN THE SEPARATE SEPARATE ONE GOING THROUGH THE NORMAL STAKEHOLDER PROCESS.

TO APPROVE SECOND COURTNEY.

CORRECT.

SO WITH THAT THEN, THEN WE'RE LOOKING FOR A MOTION TO APPROVE THAT WE RECOMMEND THE BOARD TABLE NUMBER 2 45 AS RECOMMENDED JUANITA.

MOTION TO APPROVE CARLOS TO MOTION

[01:40:01]

ANY ABSTENTIONS OR OPPOSITION? OKAY.

UH, ITEM UP FOR VOTE IS AGENDA ITEM NUMBER SIX, WHICH IS THE RECOMMENDATION REGARDING THE ENCORE WEST TEXAS 3 45 KV INFRASTRUCTURE REBUILD REGIONAL PLANNING GROUP PROJECT.

AND THEN, UH, ASSUMING THE BOARD DOES THE SAME TOMORROW, WE WILL START TO PULL AVAILABILITY OF BOARD MEMBERS FOR A SPECIAL MEETING OF R AND M AND THE BOARD IN JULY.

OBVIOUSLY THOSE CAN BE DONE CONCURRENTLY IN ONE DAY AND IF WE'RE ABLE TO GET CONSENSUS AMONG THE INDUSTRY, I WOULD NOT ANTICIPATE IT TO BE A VERY LONG, HOPEFULLY DISCUSSION.

[6. Recommendation regarding Oncor West Texas 345-kV Infrastructure Rebuild Regional Planning Group (RPG) Project]

AND CHRISTIE HOBBS WILL PRESENT, UH, THE STAFF RECOMMENDATION.

CHRISTIE.

GOOD AFTERNOON EVERYONE.

UM, I'M HERE TODAY TO PROVIDE YOU THE RECOMMENDATION FROM ERCOT ON THE ENCORE WEST TEXAS 3 45 INFRASTRUCTURE REBUILD.

UM, WE'LL JUST KIND OF JUMP RIGHT INTO IT.

A REMINDER EVERY TIME, THE REASON THAT IT'S BEFORE YOU AND WE'RE LOOKING FOR YOUR ENDORSEMENT TO THE BOARD IS THAT PER PROTOCOLS, PROJECTS THAT ARE OVER A HUNDRED MILLION DOLLARS, WHICH THIS ONE FALLS INTO, ARE REQUIRED TO BE REVIEWED BY THE BOARD.

SO TO GIVE YOU A LITTLE BIT OF HISTORY, UH, ABOUT THIS PROJECT, ONCORE SUBMITTED IT TO US BACK IN NOVEMBER OF LAST YEAR, AND IT ACTUALLY GOES BACK A LITTLE BIT FURTHER THAN THAT.

WE HAD DONE A STUDY BACK IN 2021 FOR THE PERMIAN BASIN AREA WHERE WE LOOKED AT LONGER TERM TRANSMISSION NEEDS TO MEET THE PROJECTED LOAD GROWTH IN THAT REGION.

AND AS A PART OF THAT STUDY, WHAT WAS IDENTIFIED IS THAT THOSE THAT WERE NEEDED TO, YOU KNOW, SERVE BOTH THE EXISTING NEEDS AS WELL AS PROJECTED GROWTH.

IF THEY WERE ONE OF THE PREFERRED OPTIONS, IT COULD HAVE A SPEEDIER PROCESS AS IT CAME BACK THROUGH, UH, THE PLANNING REVIEW FOR APPROVAL.

SO ONCO SUBMITTED THAT PROJECT.

WE DID VERIFY THAT THEIR RECOMMENDATIONS WERE SOME OF THOSE PREFERRED SOLUTIONS.

OUR ENDORSEMENT, UH, AS ERCOT STAFF IS BASED ON THE NEED FOR AN APPROVAL, UM, FOR 218 MILES OF UPGRADES TO 3 45 KV INFRASTRUCTURE FOR BOTH ERCOT PLANNING RULES AS WELL AS NERC CRITERIA.

WE TOOK OUR RECOMMENDATION TO TAC THEY ALSO UNANIMOUSLY ENDORSED THIS RECOMMENDATION.

THUS IT'S HERE BEFORE YOU TODAY GETTING INTO THE DETAILS.

UM, THE NEEDS ARE BEHIND THE PROJECT, BOTH FROM A NERC PERSPECTIVE AND ERCOT PLANNING GUIDE IS THE RESULTS OF IT WILL RELIEVE SEVERAL DIFFERENT CONTINGENCIES, LOSS OF A GENERATING UNIT FOLLOWED BY A SINGLE TRANSMISSION ELEMENT, LOSS OF A TRANSFORMER, FOLLOWED BY A SINGLE TRANSMISSION ELEMENT AND THE LOSS OF A COMMON TOWER.

SO BECAUSE OF THOSE NEEDS, UM, WE IDENTIFIED AS WELL AS WE'RE IDENTIFIED IN THE ENCORE STUDY, WE'RE RECOMMENDING THAT YOU ENDORSE THIS PROJECT TO THE BOARD SO IT CAN CONTINUE TO MOVE FORWARD.

UM, I WILL NOTE IT DOES HAVE, UH, A $1.12 BILLION PRICE TAG WITH IT.

AND THE REASON FOR THAT ONE NUMBER OF MILES FOR UPGRADES THAT'S NEEDED, BUT THE COST ALSO REFLECTS THE NEED FOR MUCH OF THE WORK, UM, TO BE DONE ON ENERGIZED LINES AS WELL AS SOME TEMPORARY REBUILDS TO ALLOW THE WORK TO BE DONE ON THE MAIN LINES.

UM, AS THE GRID CONTINUES TO GROW MORE CAPACITY ON THE SYSTEM, A LOT OF THAT WORK TO BE ABLE TO GET IT ACCOMPLISHED.

YOU CAN'T TAKE LONG TERM OUTAGES AND SO, UH, THE NEED TO DO THE WORK ON THOSE ENERGIZED LINES WILL PROBABLY BE A NEED IN PROJECTS TO COME IN THE FUTURE.

SO WITH THAT, I'LL PAUSE TO SEE IF YOU HAVE ANY QUESTIONS.

ANYBODY HAVE ANY QUESTIONS FOR CHRISTIE? COST IS 1.12, RIGHT? THAT'S CORRECT.

NOT 1.2.

AND COULD YOU JUST REMIND US OF THE TIMEFRAME OF THE PROJECT? WHAT EN COURSE PROVIDED TO US IS THEY'RE TARGETING SUMMER OF 2028 TO HAVE, UH, THESE UPGRADES COMPLETED.

OF COURSE, UH, REACHING THAT DATE IS TIED TO BE ABLE TO GET RIGHT OF AWAYS, UH, CCNS APPROVED AS WELL AS, YOU KNOW, BEING ABLE TO, EVEN THOUGH THEY'RE DOING THE WORK ON THE, THE LIVE ELEMENTS, THERE ARE SOME NEEDS FOR OUTAGES TO BE ABLE TO COORDINATE TIE-INS AND TO BE ABLE TO GET THOSE AT THE TIMES THEY NEED AS WELL.

KV INFRASTRUCTURE REBUILD RPG PROJECT BASED ON NERC AND ERCOT RELIABILITY PLANNING CRITERIA.

ANY FURTHER COMMENTS? NO, YOU HAVE NO FURTHER COMMENTS.

I'LL ENTERTAIN A MOTION TO RECOMMEND THAT THE BOARD ENDORSE THE ENCORE WEST TEXAS 3 45

[01:45:01]

DO I HAVE A MOTION TO APPROVE? SO MOVED.

SECOND.

SECOND BY CARLOS.

CHRISTIE HOBBS PRESENTATION OF THE SYSTEM PLANNING AND WEATHERIZATION UPDATE, WHICH IS AGENDA ITEM 7.1, WHICH I'VE NOTED TO INCLUDE UPDATES ON THE RELIABILITY STANDARD AND THE CAPACITY, DEMAND AND RESERVE REPORT.

ANY ABSTENTIONS OR OPPOSITION? OKAY.

APPROVED, UH, WITH THAT SOMEHOW I THINK WE'RE AHEAD OF SCHEDULE .

I DON'T KNOW HOW THAT HAPPENS.

I, IT'S KIND OF LIKE THE BLIND SQUIRREL FI FINDING THE NUT IN THE FOREST, BUT, UM, WE CAN TAKE A 10 MINUTE BREAK AND RECONVENE AT, UH, TWO O'CLOCK.

OKAY, WE'RE GONNA RECONVENE NONE OF THEM PAIRED OUT OF THE MOUTH.

SO WE'LL NOW TAKE UP ANETTA ITEMS NUMBER SEVEN, WHICH IS THE COMMITTEE BRIEFS AND

[7.1 System Planning and Weatherization Update]

CHRISTINE.

ALL RIGHT.

THANK YOU COMMITTEE.

SO, UH, WHAT I'D LIKE TO DO IS KICK OFF BY SHARING SOME OF THE WORK THAT THE TEAM HAS BEEN DOING TO GET ACTIVELY GET US READY FOR THE SUMMER SEASON.

UH, AND THEN WE'LL, AS WELL AS BRINGING UP TO SPEED ON SOME OF THE SPECIAL STUDIES, UH, THAT WE'RE WORKING ON IN, IN OTHER AREAS OF EFFORT ON THE TEAM.

SO THE FIRST AREA IN THE SUMMER PREPAREDNESS COMES FROM OUR WEATHER INSPECTION TEAM.

WE RECALL THE SECOND PHASE OF THE PC'S RELIABILITY STANDARD ADDED RELIABILITY STANDARDS FOR SUMMER, NOT JUST FOR WINTER.

AND SO OUR TEAMS ARE ACTIVELY ENGAGED.

THIS WILL BE THE SECOND SUMMER WHERE WE'RE DOING WEATHER INSPECTIONS OF THE FACILITIES, UH, TO GET READY FOR SUMMER.

WE'VE HAD MULTIPLE IN-PERSON AND VIRTUAL TRAINING SESSIONS.

UH, WE RECENTLY MOVED OVER TO A NEW TOOL TO COLLECT THEIR WEATHERED PREPAREDNESS DECLARATIONS.

UM, WE HAD OVER 600 MARKET PARTICIPANTS THAT ATTENDED THOSE SESSIONS, SO VERY WELL ATTENDED.

AND BECAUSE OF THAT, UH, WE SAW VERY GOOD RESPONSE RATES FROM THE MARKET PARTICIPANTS AS THEY WERE PROVIDING THE INFORMATION TO US THROUGH THAT TOOL.

WE ALSO SAW, UH, IN-PERSON SUMMER WEATHERIZATION WORKSHOP, UH, WHERE MARKET PARTICIPANTS CAME TOGETHER TO SHARE BEST PRACTICES AS THEY GET READY FOR THE SUMMER SEASON.

WE LAUNCHED THAT NEW SOFTWARE THAT I TALKED ABOUT ON MAY 1ST, UH, PRETTY SEAMLESS PROCESS.

UH, I WILL NOTE, UM, AS WE LOOK AT THE DECLARATIONS THAT CAME IN, THEY WERE DUE ON JUNE 1ST.

WE SAW OVER 97% OF THOSE COME IN ON TIME, UM, WHICH WAS PROBABLY ONE OF THE BEST RUNS THAT WE'VE SEEN SO FAR.

AND AT THIS POINT, UH, WHILE THERE WERE A COUPLE THAT WERE LATE, THEY'VE ALL BEEN SUBMITTED.

UM, SO THAT PROCESS WENT VERY WELL FOR THE SUMMER SEASON.

WE ANTICIPATE GETTING OUT TO OVER 300 GENERATION RESOURCE IN TRANSMISSION SERVICE PROVIDER SITES AS A PART OF OUR TRANSMI OR WEATHERIZATION SUMMER INSPECTION PROGRAM.

UM, AS OF LAST FRIDAY, UH, WE'VE ALREADY COMPLETED 74 OVER ABOUT HALF GENERATION, ABOUT HALF TRANSMISSION PROVIDERS WANTED TO TALK, UH, TAKE THIS OPPORTUNITY TO TALK A LITTLE BIT ABOUT MY GRID APPLICATIONS DEVELOPMENT TEAM.

UH, THEY PLAY A, A CRITICAL ROLE EVERY DAY IN HELPING US GET THE TOOLS THAT WE NEED IN PLACE, PROVIDING US INFORMATION.

UM, BUT WANTED TO HIGHLIGHT SOME OF, UH, WHAT I WOULD CONSIDER FAN FAVORITES OF THE INTERNAL ERCOT FOLKS AS WE GOT READY FOR SUMMER, UM, THEY PROVIDED US SEVERAL NEW TOOLS THAT WE'RE ABLE TO USE WITH THE DEVELOPMENT OF DURATION LIMITED RESOURCES TO GIVE US BETTER SITUATIONAL AWARENESS OF WHAT THOSE STATE OF CHARGES ARE OR WHAT THEIR FORECASTED STATE OF CHARGES.

AS WE GO THROUGH AN OPERATING DAY, FOR EXAMPLE, WE CAN NOW SEE WHAT THE FORECASTED CAPACITY IS FOR THOSE BATTERIES.

SO IF YOU LOOK AT THE GRAPH ON THE LEFT, UH, THAT TOP SECOND TO TOP LINE THERE, THAT'S KIND OF THE TEAL GREEN SHOWS WHERE THE FORECASTED CAPACITY FOR THE STATE OF CHARGES.

AND AS YOU'RE LOOKING OUT INTO THE FUTURE, UM, IF YOU START TO SEE DEMAND CREEP UP INTO THAT LEVEL OF RESOURCE, DEPENDING ON HOW LONG THAT RED LINE IS ABOVE IN THAT GREEN, WE'LL KNOW THAT THE STATE OF CHARGE IS GONNA START TO COME DOWN.

AND THAT'S WHAT THE GRAPH ON THE BOTTOM RIGHT HAND CORNER SHOWS IS THEY'RE ABLE TO MONITOR WHAT THE STATE OF CHARGE IS THROUGHOUT THE DAY.

WHEN WE START DEPLOYING BATTERIES, YOU'LL START TO SEE THAT DECREASE AS THEY'RE DISCHARGING, WHICH GIVES US REALLY CRUCIAL INFORMATION.

UM, AS WE MOVE INTO THOSE REAL OPERATIONS.

FOR EXAMPLE, IN THE EVENING, THE SUN'S GOING DOWN, WE'RE STARTING TO DEPLOY THE BATTERIES.

WE KNOW HOW LONG WE CAN EXPECT TO HAVE THAT LEVEL OF RESOURCE AVAILABLE AND CAN MAKE DECISIONS BASED ON THAT.

[01:50:01]

WANTED TO QUICKLY HIGHLIGHT THE AUGUST MONTHLY OPERATION AND RESOURCE ADEQUACY REPORT.

UH, WE SHARE THESE WITH YOU EACH MONTH, TYPICALLY THERE IN THE APPENDIX.

BUT THE REASON I WANTED TO PULL IT OUT TODAY IS YOU'LL NOTICE SOME OF THE PERCENTAGES ON THIS CHART ARE A BIT HIGHER THAN WHAT WE SAW, FOR EXAMPLE, FOR JUNE AND JULY.

WHY IS THAT? AS YOU THINK ABOUT THE MONTH OF AUGUST, TEMPERATURES ARE HOTTER, WHICH MEANS WE'RE GONNA SEE INCREASED DEMANDS ON THE SYSTEM.

ALSO, HISTORICALLY WHAT WE'VE SEEN IS THAT THE WIND PATTERNS FOR THE MONTH OF AUGUST START TO GO DOWN, THOSE ARE, IT'S A LOWER WIND MONTH FOR LOWER WIND PRODUCTION.

AND EVEN THOUGH YOU THINK OF AUGUST AS BEING BRIGHTENED SUNNY, THE DAYS ARE ACTUALLY SHORTER THAN THEY ARE COMPARED TO JUNE.

YOU THINK WE HIT THE PEAK, UM, THE LONGEST DAY OF THE YEAR IN JUNE.

FROM THERE, THE DAY STARTED GETTING SHORTER, WHICH MEANS WE HAVE LESS SOLAR PRODUCTION ON THE SYSTEM.

THOSE THINGS COMBINE INCREASE OUR RISK AS WE MOVE INTO THE AUGUST MONTHS FOR A CHANCE OF AN ENERGY EMERGENCY ALERT.

ONE NEW ADDITION TO THE AUGUST MORA WAS A GRAPH THAT DEPICTS THE LOW WIND PRO PROFILE LOW WIND RISK PROFILE FOR THE HOUR ENDING 9:00 PM SO WHAT WE'RE SHOWING HERE IS FOR A PEAK AUGUST DAY.

SO THAT'S A PEAK DAY OF THE YEAR FOR THE HOUR ENDING 9:00 PM.

SO AS WE START TO SEE THAT SUN GO DOWN, DEPENDING ON THE LEVEL OF WIND THAT WE HAVE, WHAT IS OUR RISK FOR GOING INTO AN ENERGY EMERGENCY ALERT? AND WHAT THE GLASS GRAPH CLEARLY INDICATES IS THAT THE LESS WIND THAT WE HAVE ON THE SYSTEM, THE HIGHER RISK THAT WE ARE FOR GOING INTO EMERGENCY CONDITIONS.

SO THIS WAS A NEW ADDITION, UH, TO THE AUGUST MORE TO TRY TO, TO BETTER COMMUNICATE THAT RISK, UH, FOR WHAT WE'RE SEEING ON THE SYSTEM AS WE GO FROM MONTH TO MONTH.

ALSO, A LOT OF WORK ON OUR NETWORK OPERATIONS MODEL.

AS YOU CAN SEE, UH, THIS IS REALLY JUST A QUICK PICTURE VIEW TO SHOW YOU THE AMOUNT OF CHANGE THAT'S DU IN OUR SYSTEMS FROM SINCE THE BEGINNING OF JANUARY.

ADDED LINES, NEW SUBSTATIONS, NEW GENERATORS, NEW TRANSFORMERS.

SO A LOT OF WORK, UH, AS WE CONTINUE TO SEE THE GRID EVOLVE, UPGRADES THAT ARE NEEDED TO MEET THAT GROWTH AND DEMAND.

A LOT OF WORK GOES INTO UPDATING THE MODEL SO THAT WE CAN MAKE GOOD OPERATIONAL DECISIONS.

AT THE LAST MEETING, UH, I THINK THERE WERE SOME QUESTIONS ABOUT DOWNSTREAM PRODUCTION CHANGES.

AND SO WE WANTED TO INCLUDE THIS GRAPH TO KIND OF GIVE YOU A, A QUICK OVERVIEW OF WHAT WE'VE SEEN HISTORICALLY AND TELL YOU A LITTLE BIT ABOUT THOSE CHANGES.

SO JUST AS A REMINDER, UH, ERCOT IS UNLIKE OTHER ISOS WHERE WE DO MODEL CHANGE OR PRODUCE MODELS EVERY WEEK, WE EXPECT A LEVEL OF PRECISION BECAUSE OF THE, THE FREQUENCY OF THOSE MODELS TO BE ABLE TO MAKE GOOD DECISIONS.

THE WAY THE PROCESS STARTS, IT'S A VERY RIGOROUS PROCESS.

UM, I THINK IT'S A, A PRETTY WELL OILED MACHINE.

90 DAYS OUT, UH, WE'RE TAKING UH, INFORMATION REQUESTS, CHANGES FROM THE TSPS TO UPDATES TO THE MODEL.

IT STARTS A PROCESS WHERE WE'RE VALIDATING THOSE RUNNING CASES AND MAKING SURE THAT WE'VE GOT A GOOD MODEL THAT WE'LL PUT OUT AGAIN 90 DAYS LATER.

BUT WE KNOW WITH THE GRID THAT'S CHANGING AS FAST AS IT IS THAT WE SHOWED ON THE OTHER SLIDE.

THERE'S A LOT OF WORK THAT'S BEING DONE AND WE WANNA MAKE SURE WE HAVE ACCURATE MODELS TO MAKE DECISIONS ON THAT CAN LEAD TO NEEDING DOWNSTREAM PRODUCTION CHANGES OR DPCS.

WE DON'T ALLOW JUST ANY CHANGE INTO THE MODEL.

THERE IS A RIGOROUS PROCESS THAT GOES ON.

DECISIONS ARE MADE OF WHAT IS LET INTO A CHANGE IN THAT INTERIM PROCESS.

SO IF YOU COME AND WE'RE, YOU KNOW, A MONTH OUT, WE'RE GOING TO SAY, YOU KNOW, YOU NEED TO FOLLOW THE NORMAL PROCESS.

BUT IF WE'RE WITHIN THAT TWO WEEK PERIOD, WE WILL CONSIDER A DOWNSTREAM PRODUCTION CHANGE.

WE'LL FIRST DO SOME VALIDATIONS OF, OF WHETHER OR NOT IT'S AN ACCEPTABLE CHANGE.

FOR EXAMPLE, THINGS LIKE ENERGIZATION OF NEW EQUIPMENT, THEY MAY HAVE PUT INTO THE MODEL THAT THIS NEW EQUIPMENT'S THERE, BUT THEY NOW KNOW WITH BETTER CERTAINTY THAT THEY'RE GONNA TURN IT ON ON X STATE IN THE FIELD.

WE WANNA KNOW THAT IN THE MODEL.

SO THAT'S SOME OF THE, THE CHARACTERISTICS OF SOME OF THESE CHANGES.

IT GOES THROUGH AN AUTOMATIC VALIDATION PROCESS AND THEN IT GOES THROUGH A HUMAN OR MANUAL VALIDATION PROCESS WHERE WE LOOK AT THOSE BEFORE THEY'RE ACTUALLY DECISIONS ARE MADE IN THE CONTROL ROOM AND BY THE GMS TEAM WHETHER OR NOT THEY ACTUALLY GET PUT INTO THE MODEL.

SO IT IS A VERY RIGOROUS PROCESS.

BACK IN 2020, UH, THERE WAS A FORMALIZATION OF THE PROCESS THAT REALLY DEFINE SOME OF THE CONTINGENCIES.

UM, IF YOU LOOK AT THE GRAFT,

[01:55:02]

YOU CAN SEE REALLY IF YOU, IF YOU FOCUS JUST IN ON THE COLORED ONES AND TAKE YOUR EYE OFF OF THE GRAY ONES, WE'VE SEEN PRETTY MUCH A DOWNWARD TREND IN SOME OF THE DIFFERENT TYPES OF CHANGES THAT ARE GOING IN.

BUT FOR THOSE CONTINGENCY RELATED ONES, THEY ARE A BIT HIGHER.

AND THE REASON FOR THAT IS, AGAIN, IT'S KEEPING UP WITH CONSTRUCTION CHANGES IN THE FIELD.

IF YOU THINK ABOUT YOU PUT SOMETHING IN 90 DAYS IN ADVANCE, YOU'RE EXPECTING TO MAKE A CHANGE, BUT THEN YOU CAN'T GET IN THE FIELD TO DO WORK BECAUSE IT'S BEEN RAINING FOR, YOU KNOW, SEVERAL WEEKS.

YOUR DATES MAY CHANGE AND YOU MAY NEED TO MAKE SOME ADJUSTMENTS.

AND THAT'S WHAT LEADS TO THESE TYPES OF CHANGES.

SO THIS WILL BE A SLIDE, UM, THAT WE'LL INCLUDE, UH, ON A PERIODIC BASIS JUST BECAUSE THERE WAS SOME INTEREST, UM, DURING THE LAST MEETING TO KEEP YOU UP TO DATE ON HOW THOSE CHANGES ARE.

AND AS WE CONTINUE TO EVOLVE AND IMPROVE THOSE PROCESSES, NEW ERA OF PLANNING, UM, SOME OF THE THINGS THAT YOU'VE PROBABLY BEEN HEARING ABOUT IN THE NEWS HERE RECENTLY WANTED TO JUST QUICKLY KIND OF TOUCH BASE WITH THE BOARD.

WE'VE HIT ON THIS IN DIFFERENT PIECES IN PREVIOUS BOARD MEETINGS, BUT AS THE GENERATION MIX CONTINUES TO CHANGE AND WE SEE THAT INCREASED DISTANCE BETWEEN THE GENERATION THAT'S ON THE SYSTEM AND WHERE THE LOAD IS, WE NEED TO LOOK AT HOW WE'RE MEETING THAT NEEDS FOR THE TRANSMISSION.

ALSO WITH THE INCREASE OF THE NUMBER OF LARGE LOADS, SO NOT JUST REGULAR GROWTH, BUT THE VAST AMOUNTS OF LARGE LOADS THAT ARE COMING TO THE SYSTEM, WE NEED TO THINK ABOUT HOW WE'RE PLANNING THE SYSTEM DIFFERENTLY.

SO FOR 2024, AS A PART OF OUR ANNUAL REGIONAL TRANSMISSION PLAN, OUR RESULTS ARE SHOWING THE NEED FOR SUBSTANTIAL NEEDS FOR NEW TRANSMISSION TO SERVE THAT LOAD.

SO WE'RE CONSIDERING WHAT'S THE BEST WAY TO DO THAT.

SO WE WILL CONTINUE WITH OUR TRADITIONAL PROCESS OF PUTTING OUT A PLAN THAT LOOKS AT THE SYSTEM, YOU KNOW, ON A 1 38, 3 45 KV LEVEL.

BUT WE'RE ALSO CONSIDERING WHAT WOULD BE NEEDED IF WE WERE GONNA MAKE THE STEP CHANGE TO A HIGHER VOLTAGE, WHETHER THAT'S 500 KV DOUBLE CIRCUIT OR 7 65 AS AN ALTERNATIVE TO SERVING THE NEEDS THAT WE'RE SHOWING FROM THIS INCREASED LOAD GROWTH.

UH, WE DON'T TAKE THE PROCESS LIGHTLY.

WE WANNA MAKE SURE WE'RE DOING DUE DILIGENCE, THAT WE'RE GIVING OPTIONS TO BE REVIEWED AND THAT WE CAN LOOK AT THE COST AND BENEFITS TO THE CONSUMERS OF TEXAS.

YOU KNOW, JUST QUICKLY, UM, A LOT OF A DISCUSSION ABOUT WHAT SOME OF THOSE BENEFITS MAY BE BY MOVING TO A HIGHER VOLTAGE.

AGAIN, INCREASED CHANCE FOR CAPABILITY TO LOAD CENTERS.

WE'VE GOT REALLY LARGE LOADS, UH, DEMAND IN CURRENT POPULATION CENTERS NOT KNOWING EXACTLY WHERE THE GENERATION IS GOING TO SITE.

THIS GIVES US THE CAPABILITY FOR THE FLEXIBILITY AND WHERE THE GENERATION CITED AND MAKES IT EASIER TO MOVE POWER AROUND THE STATE.

WE TALKED ABOUT, UM, IN THE, THE VOTING ITEM BEFORE ABOUT NOT BEING ABLE TO TAKE OUTAGES ON LINES, HAVING TO DO WORK HOT EQUIPMENT.

THIS WOULD HELP ONCE WE MAKE THAT STEP CHANGE OUTAGE COORDINATION CAPACITY, WE'D HAVE MORE CAPACITY ON THE SYSTEM TO BE ABLE TO TAKE THOSE OUTAGES, BOTH FROM A TRANSMISSION PERSPECTIVE AND FROM A GENERATION PERSPECTIVE.

IT WOULD ALSO BE GREENFIELD WORK.

SO IT COULD BE DONE IN PARALLEL TO OTHER CHANGES THAT ARE NEEDED ON THE SYSTEM.

IT WOULD BE A REDUCED IMPACT TO THE CONSUMERS OF TEXAS FOR LESS RIGHT OF WAY REQUIREMENTS.

AT THE END OF THE DAY, WE'VE GOTTA SERVE THAT INCREASED LOAD, WHETHER WE DO IT WITH A HIGH VOLTAGE LINE THAT TAKES A CERTAIN AMOUNT OF RIGHT AWAY OR MULTIPLE 3 45 KV LINES, THAT WOULD TAKE MORE RIGHT OF AWAY REQUIREMENTS FOR THE CONSUMERS.

THE HIGHER VOLTAGE LINES, UM, ARE KNOWN FOR HAVING LOWER LINE LOSSES.

SO AGAIN, MORE EFFICIENT TRANSFER CAPABILITY.

IT WOULD ALLOW FOR THE POTENTIAL RETIREMENTS OF SOME OF THE CURRENT SERIES CAPACITOR SERIES, UH, DEVICES ON THE SYSTEM, AS WELL AS A POTENTIAL EXIT STRATEGY FOR SOME OF THE GTCS THAT WE SEE CURRENTLY IN THE MARKET.

SO AGAIN, UM, IT'S A, A PLAN THAT WE'RE WORKING ON.

WE WANNA DELIVER THESE MULTIPLE OPTIONS AS A PART OF OUR REGIONAL TRANSMISSION PLAN THAT WE'LL HAVE AT THE END OF THE YEAR.

AND WE'LL BE ABLE TO THEN REVIEW WHAT ARE THE COSTS AND BENEFITS TO BE ABLE TO MAKE THE BEST DECISIONS, UM, WITH OUR REGULATORS ABOUT THE NEXT STEPS FOR MOVING FORWARD.

QUICK UPDATE ON THE PERMIAN BASIN STUDY.

I'M HAPPY TO REPORT WE'RE WELL ON AHEAD OF SCHEDULE.

I'M ON TRACK TO BE ABLE TO FILE, UH, THE REPORT WITH THE PUC BY THE END OF JULY, WHICH THEY HAD ORIGINALLY, UH, DIRECTED US TO DO.

UM, THIS WAS, UH, COMING FROM HB 50 66 WHERE WE WERE TO DEVELOP THIS RELIABILITY PLAN FOR THE PERMIAN BASE IN REGION.

I WENT AHEAD AND INCLUDED THE LOAD NUMBERS IN HERE 'CAUSE THEY HAD ADJUSTED JUST A LITTLE BIT DOWNWARD, UM, SINCE THE LAST TIME THAT

[02:00:01]

WE MET, UH, JUST SLIGHTLY DOWN TO 23,659, I THINK BEFORE IT WAS CLOSER TO 24,000.

THAT WAS BECAUSE OF ONE OF THE LARGER LOADS, UH, IS NO LONGER INCLUDED IN THE STUDY.

OUR INITIAL STUDY RESULTS INDICATE THAT THERE'S GONNA BE SIGNIFICANT TRANSMISSION NEEDS TO LOCALLY SERVE THE DEMAND AS WELL AS TO GET POWER INTO THE REGION, UH, TO SUPPORT IT.

WE'VE BEEN CONSISTENTLY WORKING WITH STAKEHOLDERS, UH, REGULAR MEETINGS WITH THE TRANSMISSION SERVICE PROVIDERS AS WELL AS ALL STAKEHOLDERS THROUGH THE REGIONAL PLANNING GROUP THAT MEETS MONTHLY.

WE PLAN TO HAVE ONE LAST WORKSHOP SCHEDULED FOR JUNE THE 28TH HERE.

AND IT'D ALSO BE VIRTUAL, UH, WHERE WE'LL KIND OF GIVE A HISTORY OF THE STUDY EFFORT, WHY WE MADE SOME OF THE DECISIONS THAT WE DID, AND GIVE ONE REALLY LAST OPPORTUNITY FOR COMMENT BEFORE WE FINALIZE OUR REPORT, WHICH WE PLAN TO FILE BY THE END OF JULY.

WANTED TO SHARE QUICKLY THE STATUS OF OUR GENERATION INTERCONNECTION QUEUE.

I KNOW THERE'S BEEN A LOT OF DISCUSSION ABOUT THE TEXAS ENERGY FUND.

WE HAVE NOT YET, AS OF MAY 31ST SEEN THE BULK OF THOSE ENTER THE SYSTEM.

AS YOU CAN SEE, WE'RE STILL ONLY SHOWING ABOUT 16 GIGAWATTS OF NATURAL GAS IN OUR QUEUE.

UM, BUT I THINK THAT'S JUST A PART OF THE CATCH UP PROCESS AS THEY FOLLOWED WITH THE COMMISSION AND THEN THEY'LL START THEIR WORK WITH ERCOT.

UH, BUT AS WE START TO SEE THOSE MOVE INTO THE QUEUE, UM, WE ARE WORKING ON A TRACKING PROCESS SO THAT WE CAN HIGHLIGHT THOSE, UH, AND SHARE WITH YOU AND KEEP YOU UPDATED AS TO WHERE THEY ARE IN MOVING THROUGH THE INTERCONNECTION PROCESS.

I GOT A QUESTION.

I GOT ONE QUESTION ABOUT INTERCONNECT.

GO AHEAD.

UH, THIS CAME UP EARLIER, CARLOS MENTIONED IT.

CAN YOU TELL FROM LOOKING AT THE QUEUE WHERE SOLAR AND BATTERY OR BUNDLED TOGETHER OR LIKE A BES, WE CAN, UM, I DON'T HAVE IT ON THIS, BUT I KNOW THERE IS, WE'RE STARTING TO SEE THE CO-LOCATION, SO LET ME TAKE THAT BACK FOR OUR NEXT REPORT TO SEE IF THERE'S SOMETHING WE CAN INCLUDE TO, TO SHARE THAT.

THAT'D BE GOOD.

YEAH, WE HAVE A, UH, PUBLIC REPORT ON THE WEBSITE.

I CAN SHOW YOU WHERE IT IS THAT SHOWS THAT WE'LL GET THAT INCLUDED IN THE NEXT UPDATE FROM A LARGE LOAD INTERCONNECTION OVERVIEW.

I THINK CARLOS HAS A QUESTION.

OH, I'M SORRY, CARLOS.

ALSO, UH, LARGE DEPLOYMENTS OF BATTERIES IS THAT ONE THING THAT'S COMING TO THIS MARKET, WHICH IS CURRENTLY HAPPENING IN, IN, IN CALIFORNIA, FOR EXAMPLE, BOSS LANDING, EDWARD SPACE, YOU KNOW, THESE KINDS OF HUGE, UM, USUALLY LIKE REPLACEMENT OF OLD PLANTS 'CAUSE THEY HAVE TRANSMISSION AVAILABILITY.

ARE YOU SEEING THAT? I HAVEN'T SEEN A LOT OF THAT.

IT'S JUST BEEN PRETTY CONSISTENT.

BUT LET ME TAKE THAT BACK TO SEE AGAIN IF WE CAN SHOW YOU KIND OF SOME BREAKDOWNS ON THE, ON THE SIZES OF WHAT WE'RE SEEING, KIND OF THE VARIATION.

AND IT'S, IT'S VISTA THAT'S DOING MOSS LANDING.

SO IT'S A THOUSAND MEGAWATTS.

YEAH, NO, THEY ALREADY HAVE IT UP AND RUNNING AT VISTA AT, UH, MOSS LANDING.

UM, NOT, UH, A LOT OF CHANGE SINCE THE LAST TIME WE REVIEWED THIS, ALTHOUGH WE DID HAVE ONE, UH, LARGE LOAD THAT GOT APPROVED AND, AND STARTED THE ENERGIZATION PROCESS.

SO YOU'LL SEE THAT THAT NUMBER IS KICKED UP.

UH, WE WERE JUST BELOW 5,000 THE LAST TIME WE MET AND THAT'S NOW UP TO ALMOST 5,500.

UH, WE SEE ABOUT ALMOST 3000 OF THAT IS OPERATIONAL WITH THE REMAINING 2,500 THAT'S HAD ITS STUDIES APPROVED AND CAN COME ON AT ANY TIME WITHOUT FURTHER APPROVAL.

I DID WANNA HIGHLIGHT THAT WE DO HAVE NOW IN THE STAKEHOLDER PROCESS, UH, NPR 1 2 3 4.

IT'S EASY FOR ME TO REMEMBER.

AND PI ONE 15 THAT TAKES THE PREVIOUS, WHAT WE'VE HAD, UM, THE INFORMAL INTERCONNECTION PROCESS WHERE WE'VE BEEN WORKING WITH THE TSPS AND THE LARGE LOADS THAT ARE OVER 75 MEGAWATTS.

AND WE'VE FORMALIZED THAT PROCESS ON WHAT WE EXPECT TO GET INFORMATION FROM TSPS SO THAT WE HAVE THAT VISIBILITY INTO THE LARGE LOADS AND GET THE MODELING INFORMATION THAT WE WOULD LIKE TO BE ABLE TO ACCURATELY REPRESENT THEM IN OUR SYSTEMS. RIGHT.

UPDATES ON THE RELIABILITY STANDARD VALUE OF LOSS LOAD AND THE COST OF NEW ENTRY STUDY.

SO BACK IN MAY, UH, THE COMMISSION OR EARLY MAY, UH, COMMISSION STAFF CAME TO THE COMMISSION, UH, WITH A PROPOSAL OUTLINED ON THE FRAMEWORK FOR THE RELIABILITY STANDARD THAT LOOKED AT, UH, THE PARAMETERS FOR FREQUENCY, MAGNITUDE, AND DURATION.

AT THE COMMISSION'S

[02:05:01]

LAST OPEN MEETING, THEY APPROVED THAT PROPOSAL FOR PUBLICATION.

SO IT'S NOW OUT FOR PUBLIC COMMENT, UM, THAT'S SCHEDULED TO CLOSE IN MIDDLE OF JULY.

THAT WILL ALLOW STAFF TIME TO PROCESS THE COMMENTS RECEIVED AND MAKE A FINAL RECOMMENDATION.

AND IT'S MY UNDERSTANDING, UM, THAT THE COMMISSION IS STILL TARGETING TO HAVE THAT RELIABILITY STANDARD, UH, FOR FINAL APPROVAL BY THE END OF AUGUST.

NOW, TO ALSO SUPPORT THAT, UM, IS THE VALUE OF LOSS LOAD STUDY.

UH, WHERE WE'RE AT WITH THAT.

UH, WE HAD GREAT RESPONSE FROM THE SURVEY.

IT WAS OUT AT CLOSED MID-MAY FROM THE RESIDENTIAL SMALL AND MEDIUM COMMERCIAL TYPE CUSTOMERS.

WE EXCEEDED, UM, WHAT WE HAD SET AS TARGETS FOR THE RESPONSE RATES THAT WE WERE LOOKING FOR FOR THE LARGE COMMERCIAL AND INDUSTRIAL.

WE WERE A LITTLE BIT LUSH THAN THE TARGET RESPONSES THAT WE WERE SEEKING.

UM, BUT THE GOOD NEWS IS BECAUSE WE PARTNERED WITH THE LAWRENCE BERKLEY NATIONAL LABS, THEY HAD DONE A SIMILAR STUDY, UH, WITH A EP.

AND SO WE HAVE THE CAPABILITY TO OBTAIN THAT INFORMATION BECAUSE THEY USED THE SAME SURVEY INSTRUMENT, AND AS LONG AS THEY WEREN'T THE SAME CUSTOMERS THAT ALREADY FILLED OUT THE SURVEY, THEN WE'LL BE ABLE TO USE THOSE ADDITIONAL RESPONSES TO BOLSTER, UM, THE SURVEY INSTRUMENT RESPONSES WE RECEIVED TO GET, UH, THE RESULTS THAT WE ARE TARGETING, UM, TO HAVE A DRAFT BY MID TO LATE JULY.

THAT WAY WE CAN FINALIZE THE VALUE OF LOSS LOAD STUDY THAT WOULD SUPPORT THE COMMISSION'S DECISION MAKING PROCESS FOR THE RELIABILITY STANDARD FINAL VOTE AT THE END OF AUGUST.

AS FAR AS THE COST OF NEW ENTRY STUDY, WE'VE BEEN PRESENTING THOSE RESULTS AND WE FILED A DRAFT REPORT WITH THE COMMISSION IN EARLY JUNE, LAYING OUT THE DIFFERENT COST PARAMETERS FOR VARIOUS TYPES OF, UH, GENERATION TYPES.

AND WE'RE CURRENTLY, UM, WORKING WITH COMMISSION STAFF AND WE EXPECT THAT THE NEXT OPEN MEETING TO HAVE, GET SOME GUIDANCE, UH, FROM THE COMMISSION ON SOME OF THE OPEN QUESTIONS WE HAD ON THE COST OF NEW ENTRY STUDY APPROACH, UM, SO THAT WE CAN FINALIZE THAT REPORT AS WELL AND HAVE THAT BACK TO THE COMMISSION AGAIN SO THEY CAN USE IT IN THEIR DECISION MAKING PROCESS FOR THE COST PARAMETERS, UM, COMPARED TO THE VALUE OF LOST LOAD AS THEY DECIDE WHERE TO SET THAT RELIABILITY STANDARD.

RIGHT.

LAST BUT NOT LEAST, UH, WE PUT OUT THE MAY, 2024, WE PUT OUT THE, UH, SUMMER CDR REPORT.

NOW THAT'S NOT LOOKING AT THE CAPACITY, DEMAND AND RESERVES FOR THIS SUMMER.

IT'S LOOKING AHEAD TO NEXT SUMMER.

SO IT'S A, A FUTURE TYPE, UH, FURTHER OUT IN THE FUTURE TYPE REPORT.

UH, WHAT YOU'LL SEE IN GREEN AND AT THE TOP ROWS IS KIND OF THE HISTORICAL METHOD FOR THE LOAD AND RESOURCES THAT ARE ON THE SYSTEM, WHAT'S PROJECTED AS WELL AS THAT RESERVE MARGIN.

AND YOU CAN SEE THEY'RE SHOWING, UH, HEALTHY RESERVE MARGINS OVER THAT TIME PERIOD.

BUT THERE'S A LITTLE BIT OF A DISCONNECT BECAUSE THE, THE METHODOLOGY THAT'S PRESCRIBED IN PROTOCOLS THAT WE HAVE TO FOLLOW DOES NOT TALK ABOUT THIS REASONABLE LOAD THAT WE'RE NOW TAKING INTO CONSIDERATION IN OUR PLANNING STUDIES.

AND SO WE FELT THERE WAS A DISCONNECT BETWEEN WHAT WE WERE REPORTING IN THE CDR HISTORICALLY VERSUS THIS NEW INFORMATION THAT WE HAVE FROM THE TDSP.

SO WE INCLUDED THOSE IN, UM, THE NEW CONTRACTED LOADS.

SO, UH, THAT'S WHAT THOSE MIDDLE NUMBERS REPRESENT.

UM, SO THOSE THAT ARE NEW LOADS BUT HAVE ALREADY BEEN SIGNED AS WELL AS THOSE PROSPECTIVE LOADS THAT HAVE NOT YET SIGNED WITH THE TSPS, AND YOU CAN SEE THE IMPACT THAT THAT HAS ON THE PROJECTED OR RESERVE MARGINS WHEN YOU TAKE INTO ACCOUNT THOSE ADDITIONAL LOADS OUT INTO THE FUTURE.

WITH THAT, THAT WRAPS UP MY REPORT UNLESS THERE'S ANY OTHER QUESTIONS.

CHRIS, DO YOU RECALL THE AUGUST MORA REPORT FROM LAST YEAR? OR HOW DOES IT COMPARE TO THE PRO THE 9:00 PM PROBABILITY FOR THIS YEAR? ALL RIGHT, SO YOU MAY RECALL THAT THE, THE MORA IS ACTUALLY, UH, A NEW TOOL.

AND SO WE, WE DID THE FIRST ONE OF THOSE LAST FALL, SO WE DIDN'T ACTUALLY HAVE AN AUGUST MORE.

BUT FROM A COMPARISON PERSPECTIVE, WHAT WE DO HAVE, WE CAN SHOW YOU TWO THINGS.

SO HOW DO THOSE PERCENTAGES LOOK, SAY COMPARED TO A WINTER MONTH WHEN WE WERE PROJECTING CHANCES FOR EMERGENCY CONDITION, THE CHANCES ARE REALLY NO GREATER THAN WHAT WE SAW IN OUR FEBRUARY REPORTS FOR THAT MONTH.

THE OTHER COMPARISON THAT YOU CAN MAKE IS EACH YEAR WE'RE REQUIRED TO DO A SUMMER, UH, SEASONAL ASSESSMENT FOR NERC.

AND WE LOOK AT THAT REPORT LAST SUMMER COMPARED TO THIS REPORT, WE'RE ACTUALLY A LITTLE BIT BETTER THAN WE WERE LAST SUMMER.

AND THE REASON FOR THAT IS BECAUSE LAST SUMMER, IF YOU WOULD'VE LOOKED AT, UH, THOSE AFTERNOON HOURS, YOU WOULD'VE PROBABLY SEEN A CHANCE OF LOAD SHED IN THOSE AFTERNOON HOURS.

GO BACK TO IT.

IF YOU LOOK AT IT FOR THIS SUMMER, WE DON'T SHOW A CHANCE UNTIL YOU GET TO THE EVENING HOURS.

[02:10:01]

KNOW IT'S HARD TO SEE, BUT IN THOSE EARLY AFTERNOONS, THE REASON FOR THAT, WE'VE SEEN INCREASED SOLAR ON THE SYSTEM AND THAT SOLAR IS AVAILABLE TO HELP MEET THOSE PEAK DEMAND NEEDS.

UM, SO LOOKING AT THIS LAST SUMMER TO THIS SUMMER, THERE'S ACTUALLY ABOUT A A POINT, POINT AND A HALF, UH, IF I RECALL THE TOP OF MY HEAD, WHERE WE'RE SHOWING WE'RE BETTER COMPARED TO LAST SUMMER.

I GOT A, THIS IS A RELATED QUESTION, SINCE WE'VE CHANGED TO MONTHLY RESOURCE ADEQUACY REPORTS, HAS THERE BEEN ANY OTHER BEHAVIOR SHIFT IN THE MARKETPLACE IN RESPONSE TO THE MONTHLY REPORTS? UM, I DON'T KNOW THAT I WOULD SAY A, A MARKET CHANGE.

I JUST THINK IT'S, UH, ANOTHER TOOL THAT WE CAN USE NOT ONLY FOR THE MARKET PARTICIPANTS, BUT TO COMMUNICATE WITH THE PUBLIC.

UM, IF YOU THINK ABOUT HISTORICALLY WHAT WE DID IN THE SEASONAL REPORT, YOU HAD THE SEASONAL SUMMER, SARAH LOOKED AT JUNE, JULY, AUGUST AND SEPTEMBER, AND IF YOU RECALL WHAT I SHARED, HOW DIFFERENT AUGUST IS COMPARED TO JUNE.

AND SO WHEN YOU WERE LOOKING ACROSS THOSE SEASONS, YOU WERE SPREADING THAT RISK ACROSS 'EM, AND THIS GIVES YOU A MORE ACCURATE DEPICTION BECAUSE WE CAN HONE IN THE, THE PARAMETERS OF THE MODEL FOR WHAT WE'RE ACTUALLY SEEING IN THAT MONTH OR EXPECT TO SEE THAT MONTH.

AND IT'S VERY SPECIFIC TO THE HOUR OF THE DAY IS CORRECT.

CORRECT.

CHRISTY TO, TO BOB'S POINT, UM, I, THAT WAS GONNA BE ONE OF MY QUESTIONS IN WITH RESPECT TO HOW DOES LAST AUGUST COMPARE TO THIS AUGUST FROM A MORE STANDPOINT, AND WHAT I THINK I HEARD YOU SAY WAS LAST AUGUST WOULD'VE HAD AN EVEN GREATER RELIABILITY RISK, BUT BECAUSE THIS IS THE FIRST TIME WE'VE RUN AN MOURA FOR, FOR AUGUST, THIS IS THE FIRST SORT OF DEPICTION OF WHAT AN AUGUST LOOKS LIKE.

BUT THE REASON THIS ONE, THIS AUGUST IS BETTER IS BECAUSE WE HAVE MORE SOLAR ON THE SYSTEM THAT HELPS US MEET THE NORMAL PEAK, UM, PERIOD CORRECT.

AS WELL AS WE HAVE ADDITIONAL BATTERIES ON THE SYSTEM COMPARED TO LAST SUMMER.

SO THAT HELPS US, UM, WHEN WE DO GET INTO THE SOLAR RAMP DOWN TO HAVE MORE RESOURCES POTENTIALLY AVAILABLE TO HELP WITH THAT TRANSITION.

THAT THAT'S RIGHT.

AND I THINK THAT'S ABOUT POTENTIALLY ABOUT 3000 MEGAWATTS MORE BATTERIES ON THE SYSTEM TO HELP US WITH THE SOLAR RAMP DOWN.

YOU'RE WELCOME.

LAST SUMMER, WE ACTUALLY SAW AT, UH, 4:00 PM THERE WAS STILL LIKE A THREE OR 4% RISK IN AUGUST OF, OF, UH, LOAD J.

AND SO THIS AUGUST IT'S GONE, AND THAT'S DUE TO THE INCREASED SOLAR.

DEMAND RESPONSE, UM, WE'VE DONE PRO, UH, SOME PROJECTIONS OF WHAT WE WOULD EXPECT FROM A FOUR CP.

THE OTHER MAY, SORRY, GO AHEAD.

SORRY.

THE OTHER POINT THAT I WANTED TO SORT OF TOUCH UPON WAS ON THE MAY CDR REPORT AND THE INCLUSION OF CONTRACTED AND NON-CONTRACTED LOAD.

AND, YOU KNOW, JUST TO KIND OF, THIS IS THE FIRST TIME Y'ALL PUT IT IN THE REPORT BECAUSE OF HOUSE BILL 50 66, UM, I JUST THINK IT'S IMPORTANT TO NOTE THAT, UM, THE COMMISSION WILL BE IMPLEMENTING THAT LEGISLATION, UM, VIA RULEMAKING PROJECT, AND THAT, YOU KNOW, THE, THE REASONABLENESS OF THE LOW FORECAST DATA, THE NON-CONTRACTED, WILL BE PART OF OUR ANALYSIS OF HOW DO, HOW DO WE LOOK AT IT, UM, TO DETERMINE THE REASONABLENESS GOING FORWARD.

AND SO THIS IS JUST Y'ALL TAKING THE BULK OF IT AND PUTTING IT IN HERE, BUT I THINK IT'S IMPORTANT FOR THE PUBLIC TO KNOW THAT, UM, YOU KNOW, WHILE THESE MAY LOOK ALARMING, LIKE ALARMING NUMBERS, AND WE CERTAINLY HAVE TO PLAN FOR LARGER LOADS ON THE SYSTEM FROM AN INFRASTRUCTURE BOTH GENERATION AND TRANSMISSION, UM, INFRASTRUCTURE THAT, YOU KNOW, WE, WE AT THE COMMISSION NEED TO KIND OF LOOK AT IMPLEMENTING THIS LEGISLATION TO, UM, ACCOMPLISH WHAT THE LEGISLATION WAS INTENDED TO DO, WHICH WAS ACCELERATE TRANSMISSION FOR RELIABILITY.

AND BY ALLOWING THOSE PLANS TO BE SUBMITTED BY ERCOT IN COLLABORATION WITH THE ELECTRIC UTILITIES, BUT ALSO ENSURE THAT WE'RE LOOKING AT THOSE LARGER LOADS, THESE UNIQUE LARGER LOADS, UM, TO ENSURE THAT WE'RE WE'RE APPROPRIATELY BUILDING INFRASTRUCTURE FROM A CONSUMER AFFORDABILITY STANDPOINT.

[7.2 System Operations Update]

IS DAN WOODFIN.

HE'LL PRESENT THE SYSTEM OPERATIONS UPDATE, WHICH IS AGENDA ITEM 7.2, WHICH I BELIEVE INCLUDES DISCUSSION OF THE FOUR COINCIDENT PEAK, WHICH IS FOUR CP.

DAN, GOOD AFTERNOON.

I'VE GOT, UM, THREE DIFFERENT THINGS I WANNA HIGHLIGHT, AND THEN WE'VE GOT THE USUAL, UH, SLIDES IN THE APPENDIX.

I REVERSE THE ORDER THIS TIME, SO, UH, WE'LL SEE IF THAT WORKS.

UH, WE WON'T COVER THOSE APPENDIX SLIDES UNLESS YOU HAVE QUESTIONS ON THEM.

SO WE HAD A NEW, UH, AND ACTUALLY THE, UH, GENTLEMAN FROM NRL ALREADY STOLE OUR THUMB THUNDER ON THE TNS UH, MEETING

[02:15:01]

EARLIER.

WE HAD A NEW RENEWABLE PENETRATION RECORD BACK IN MARCH OF, UH, OVER 75.

NEARLY, NEARLY 76% OF THE ENERGY BEING CONSUMED AT THAT POINT IN TIME WAS BEING PRODUCED BY RENEWABLES.

UM, YOU'LL NOTE A COUPLE OF THINGS THERE.

WE USED TO REPORT A LOT ON THE WIND, UH, PENETRATION, UM, THE SOLAR PENETRATION SEPARATELY, BUT REALLY THE IMPORTANT THING HAS BECOME KIND OF THE COMBINED RENEWABLES.

UH, AND SO WE'LL BE REPORTING ON THAT MORE OR EMPHASIZING THAT MORE GOING FORWARD.

UM, WHAT YOU CAN SEE ON THIS GRAPH IS THAT ACTUALLY, UH, WITH THE GREEN AREA AND THE PURPLE AREA IS CURTAILED WIND AND SOLAR.

SO IF WE HADN'T, UH, SEEN THAT CURTAILMENT, THE AMOUNT OF WIND AND SOLAR, UH, WOULD'VE ACTUALLY EXCEEDED THE AMOUNT OF THE LOAD.

WELL, SO OBVIOUSLY WE HAVE A, SOME GENERATORS THAT STAY ONLINE, SOME THERMAL GENERATORS, NON IRRS THAT, THAT STAY ONLINE ALL THE TIME, LIKE THE NUCLEAR PLANTS, UH, IF THEY'RE A GENERATION THAT'S GONNA BE ONLINE IN THE AFTERNOON OR EVENING OF EITHER THE DAY BEFORE OR AFTER, AND IT HAS A A LONGER TURNAROUND TIME, IT MAY STAY ONLINE.

SO EVEN WITH ALL THOSE BACKED OFF TO MINIMUM, WE MAY NOT HAVE HAD ENOUGH LOAD TO ABSORB ALL OF THAT RENEWABLE.

SO THAT'S ONE REASON FOR THE CURTAILMENT.

AND THE SECOND IS, IS TRANSMISSION CON CONGESTION.

UM, IN FACT, UH, YOU CAN, UM, BUT THAT WAS, UM, KIND OF A, A MOMENTOUS THING, I GUESS, TO HAVE GOTTEN UP TO THAT LEVEL.

NOW, ONE OF THE THINGS THAT, AND I DIDN'T KNOW THAT GENTLEMAN FROM MINERAL WAS GONNA TALK ABOUT IT, BUT HE TALKED ABOUT KINDA WHAT IS THE LIMIT.

AND ONE OF THE THINGS HE TALKED ABOUT WAS, YOU KNOW, THAT IT GETS UP TO 75, 70 6%, AND HE TALKED A LITTLE ABOUT A, AN, HE DIDN'T CALL IT INERTIA, BUT YOU WOULD START HAVING SOME PRO, HE WAS SIMPLIFYING IT TO SOME EXTENT, BUT HE START HAVING INERTIA ISSUES AND WHAT, SO WE LOOKED AT THAT FOR THIS PARTICULAR DAY, AND, UM, DURING THAT TIGHTER TIME BECAUSE OF THE GEN, THE THERMAL GENERATION THAT STAYED ONLINE OVER THAT PERIOD, GIVEN THAT IT WAS KIND OF ONE, A ONE, UH, TIME AFTERNOON THAT, THAT THE RENEWABLES WERE HIGH, UH, WE DIDN'T HAVE ANY PROBLEM WITH, WITH INERTIA.

IT WAS WELL ABOVE THE CRITICAL LEVEL OF INERTIA THAT WE WORRY ABOUT.

UM, AND I GUESS THAT'S THE OTHER THING I, I, I ACTUALLY SHOULD HAVE SAID WHEN HE WAS TALKING THIS MORNING, IS THAT REALLY, THAT THAT INERTIA IS NOT A FUNCTION OF HOW MUCH RENEWABLES YOU HAVE ONLINE.

IT'S A FUNCTION OF HOW MUCH SYNCHRONOUS GENERATION, SO THE, THAT YOU HAVE ONLINE.

AND SO WHERE WE HAVE MORE SYNCHRONOUS GENERATIONS STAYING ONLINE, THAT WILL KEEP THE INERTIA UP TO THE EXTENT THAT WE DON'T HAVE A REALLY EXTENDED PERIOD WITH THOSE HIGH RENEWABLE LEVELS TO THE POINT THAT THOSE SYNCHRONOUS GENERATORS TURN OFF.

SO, UM, HOPEFULLY THAT'S, UH, EDUCATIONAL.

UM, THE OTHER THING WE'VE BEEN TALKING ABOUT IS, IS, UH, GENERATION OUTAGES, UM, DURING THE SPRING OUTAGE SEASON.

AND SO, UM, THE BLACK LINES ON HERE ARE THE, THE PLANNED GENERATION OUTAGES COMPARING THIS YEAR TO LAST YEAR.

AND THE TURQUOISE LINES ARE THE, THE FORCED GENERATION OUTAGES.

AND THIS IS, THIS IS NON IRR, SO THE, THE THERMAL GENERATORS LAST YEAR COMPARED TO THIS YEAR.

AND, UM, THE PATTERN OF THE, THE, THE PLANNED GENERATION OUTAGES IN BLACK FOLLOWS GENERALLY THE MAXIMUM DAILY PLANNED OUTAGE CAPACITY NUMBERS THAT WE POST, UM, THAT GENERALLY FOLLOW THAT PATTERN.

UM, THE FORCED GENERATORS, UH, FORCED GENERATION OUTAGES ARE KIND OF, YOU KNOW, WHAT, WHAT THE, UH, WHEN THE GENERATORS TAKE THOSE OUTAGES, EITHER BECAUSE THE UNIT TRIPS OR THEY TAKE AN OUTAGE TO PREVENT IT FROM TRIPPING, UH, TO DO MAINTENANCE.

UH, AND KIND OF THE, THE INTERESTING PART OF THIS IS YOU CAN SEE FROM ABOUT MID-APRIL TO MID-MAY THIS YEAR WAS QUITE A BIT HIGHER THAN LAST YEAR.

NOW WE KNOW THAT, THAT SOME OF THOSE ARE SOME VERY LARGE GENERATING UNITS THAT TRULY DID HAVE FORCED OUTAGES THAT THEY WERE OUT DURING THAT TIME PERIOD, BUT THERE'S PROBABLY MORE THAN OF, UH, THAT THAT GAP BETWEEN THIS YEAR AND LAST YEAR IS A LITTLE HIGHER THAN WHAT, UH, WE, UH, WOULD'VE EXPECTED JUST ADDING THOSE UP.

SO THERE PROBABLY WERE MORE, UH, EITHER EXTENSIONS OF PLANNED OUTAGES OR OTHER, UH, UH, OUTAGES THAT WERE TAKEN MAYBE AS A RESULT OF THE LIMITATIONS IN THE M-D-R-P-O-C.

THAT'S BEEN ONE OF THE QUESTIONS THAT THAT'S BEEN, THAT HAS BEEN RAISED.

AND SO YOU CAN KIND OF, YOU CAN SEE THAT, THAT PATTERN THERE, UM,

[02:20:01]

UM, SO LOADS THAT TURN OFF DURING THE, UH, TO AVOID TRANSMISSION CHARGES, UM, OF BOTH THE, UH, KIND OF GENERAL INDUSTRIAL RES UH, THE RETAILERS, AND THEN ALSO THE, THE LARGE FLEXIBLE NODES.

UM, AND WHAT YOU CAN SEE IS THAT THERE'S, THERE'S A LOT OF MEGAWATTS THERE, WHICH I THINK WE'VE, WE'VE BEEN REPORTING ON DURING EACH EVENT THAT COMES ALONG.

BUT THE THING I WANTED TO EMPHASIZE THERE IS, IF YOU'LL RECALL, CHRISTIE NOTED THAT OUR TIGHTEST TIME IS IN OUR ENDING 20, OR OUR ENDING 21.

AND SO WHAT THIS GRAPHIC KIND OF SHOWS IS THAT IF YOU, UH, HAVE, UH, LOADS THAT ARE TURNING OFF SIMPLY FOR FOUR CP, THAT THEY'RE ACTUALLY GONNA BE TURNING BACK ON BY THOSE EVENING HOURS.

AND SO I KIND OF BRING THIS UP TO EMPHASIZE THAT WE'LL NEED TO, TO, TO MEET THE DEMANDS THIS SUMMER, WE'LL NEED THOSE, UH, TO EXTEND THOSE OUTAGES, UM, OR OUTAGE, EXTEND THAT, UH, TO CURTAILMENT, UH, BEYOND JUST THE HOURS STRICTLY NEEDED TO RESULT IN A FOUR CP AVOIDANCE.

AND I THINK THAT'S IT, UNLESS YOU HAVE ANY QUESTIONS, DAN, IS A TAKEAWAY ON THE FOUR CP, IT'S JUST DIFFERENT NOW GOING FORWARD BECAUSE OF SOLAR WHERE THE DISCONNECT BETWEEN DEMAND AND PRICE.

TRADITIONALLY, THE, UH, THE, THE, IF YOU REDUCE THE DEMAND DURING THOSE FOUR CO THE CHASING FOUR CP TRYING TO REDUCE DURING THE COINCIDENT PEAK HOURS, UH, OUR TIGHTEST TIMES ALIGNED WITH THOSE COINCIDENT PEAK HOURS.

IT'S, IT'S REALLY THE SAME ISSUE AS LOAD VERSUS NET LOAD.

AND SO NOW OUR, OUR HIGH, OUR TIGHTEST TIMES ARE GONNA BE AT THE TIME OF HIGHEST NET LOAD.

THAT'S NOT REALLY REFLECTED IN THE FOUR CP, UH, HOW, HOW THAT'S ASSESSED.

IT'S SOLELY FORCED COINCIDENT PEAK, PEAK LOAD AND NOT NET LOAD.

AND GOING BACK TO THE SPRING OUTAGES, MM-HMM, , UM, WHAT, WHAT WERE SOME OF THE REASONS THE OUTAGES WERE SO HIGH? LIKE WHAT WERE THE TOP THREE REASONS? WELL, I THINK, I THINK THE, THE OF, DURING THAT KIND OF, THAT PERIOD WHERE THEY SEEMED TO HAVE BEEN HIGHER THIS YEAR, THERE, THERE WERE SEVERAL, UH, VERY LARGE GENERATING UNITS THAT WERE TRULY FORCED OUT DURING THAT TIME PERIOD THAT WEREN'T, UH, LAST SPRING.

AND SO THERE WERE KIND OF TRULY FORCED OUTAGES, UM, THAT WOULD'VE BEEN KIND OF STATISTICALLY ABOVE WHAT WE WOULD NORMALLY EXPECT.

UM, AND THEN THERE WERE, THERE'S, UM, AS WE THEN, THE THING THAT I THINK THE PEOPLE, THE REASON FOR THE QUES THE QUESTION IN LOOKING AT THIS IS, IS THE M-D-R-P-O-C AND LIMITING THE AMOUNT OF PLANNED OUTAGES, THEN CAUSING FORCED OUTAGES TO BE HIGHER, UM, AND IT, GIVEN, GIVEN THE NUMBER OF THESE VERY LARGE OUTAGES, WHAT'S THE, THE REST OF THAT GAP COULD BE DUE TO THAT.

IS IT, UM, DID YOU GET ANY FEEDBACK ABOUT AN AGING FLEET CAUSING LARGER FORCE OUTAGES? I GUESS THAT'S, THAT'S POSSIBLE, BUT GENERALLY IT'S, IT'S MORE OF A, UH, UH, IS THE FACT THAT WE'RE LIMITING THE, HOW MUCH MANY MEGAWATTS OF PLANNED OUTAGES, UH, THAT FOLKS CAN TAKE, IS THAT CAUSING THEN MORE FOREST OUTAGES? NOT FROM A, NOT FROM A CAUSING UNITS TO TRIP, RIGHT? BUT FROM A, YOU CAN'T GET THE OUTAGES DONE IN THE WINDOWS.

THAT, AND SO YOU HAVE TO EXTEND IT LONGER.

ARE YOU PLANNING TO MAKE ANY CHANGES? WE WE'RE, WE'RE IN THE PROCESS OF REVISITING THE M-D-R-P-O-C NUMBERS AS IT IS.

I MEAN, ULTIMATELY, AND I, I THINK WE TALKED ABOUT THIS LAST TIME, IT'S, IT'S REALLY A FUNCTION OF, OF RESOURCE ADEQUACY.

DO WE HAVE ENOUGH, UH, GENERATION TO BE ABLE TO TAKE AS MANY OUTAGES AS WE NEED OR AS THE GENERATORS NEED, BUT HAVING A 24,000 MEGAWATTS OF FORCED OUTAGES, AND, UH, BUT THAT'S CERTAINLY SOMETHING WE NEED TO AVOID IN THE SUMMER, AND HOPEFULLY THE WEATHERIZATION WORK IS GOING TO HELP ALLEVIATE THAT.

THAT'S A STRIKINGLY HIGH NUMBER.

KNOW, ALMOST NO PLANNED OUTAGES, THERE WON'T BE AS MANY.

WELL, AND, AND, AND PART OF THAT, THAT NUMBER WILL GO DOWN AND THAT A LOT OF THEM REALLY ARE PLANNED OUTAGES THAT HAVE BEEN EXTENDED BEYOND THEIR EXPECTED WINDOW.

AND SO AS WE MOVE INTO SUMMER AND HAVE, YOU

[02:25:01]

UH, SO IS THAT A LOT OF IT WAS PLANNED OUTAGES THAT JUST WENT LONGER? A A, A GOOD PORTION? YES.

THAT'S GOOD.

ANY MORE QUESTIONS FOR DAN? THERE? THERE MAY ALSO BE AN OPPORTUNITY TO USE THE RELIABILITY STANDARD AS A PART OF THAT, UH, M-D-R-P-O-C CALCULATION AS WELL.

THAT'S A FUTURE POTENTIAL USE.

MM-HMM, .

DRAKE WILL PRESENT AGENDA ITEM 7.3 COMMERCIAL MARKETS, UPDATE WITH AN UPDATE ON THE AGGREGATE DISTRIBUTED ENERGY RESOURCE, UH, PILOT PROJECT.

SO NEXT, GORDON

[7.3 Commercial Markets Update]

GORDON, THANK YOU.

THANK YOU VERY MUCH.

IT'S A GREAT PLEASURE TO BE HERE WITH YOU TODAY.

UM, THIS IS MY FIRST OPPORTUNITY TO ADDRESS THE COMMITTEE.

UM, I WILL REACH MY THREE MONTH ANNIVERSARY WITH ERCOT TOMORROW.

UM, AND AS YOU CAN TELL FROM MY ACCENT, I'M BOTH NEW TO ERCOT AS WELL AS TO TEXAS, HAVING SPENT THE BULK OF MY CAREER AT ONTARIO'S INDEPENDENT ELECTRICITY SYSTEM OPERATOR IN MARKET DESIGN, AS WELL AS IN KPMG'S GLOBAL INFRASTRUCTURE ADVISORY PRACTICE IN, IN POWER AND UTILITIES.

BUT I'M EXCITED, UH, TO BE HERE AT THE COMMITTEE AND ALSO TO BE, UH, TO BE AT ERCOT.

WHAT I WOULD LIKE TO DO TODAY IS GO OVER SOME OF THE, UH, OBSERVATIONS THAT WE HAVE BEEN MONITORING IN, UH, THE MARKET SINCE THE, THE LAST MEETING OF THE BOARD.

SOME OF IT WILL BE A COMPLIMENT TO WHAT DAN HAS HAS, UH, PRESENTED IN TERMS OF THE OPERATIONAL OUTCOMES, AND WE'LL SPEAK TO, UH, SOME OF THE, THE MARKET OUTCOMES THAT WE HAVE OBSERVED IN TANDEM WITH THOSE, AS WELL AS SPEAK TO SOME MARKET DEVELOPMENT, UH, ACTIVITIES THAT WE HAVE UNDERWAY.

AS MENTIONED, THE A DER PILOT, UH, AS WELL AS THE DEVELOPMENT OF THE DISPATCHABLE RELIABILITY RESERVE SERVICE WITH THE, UH, THERE ARE NO EXPECTED, UH, VOTING ITEMS THAT COME OUT OF THE, THE DISCUSSION TODAY.

THESE ARE BEING SHARED FOR THE INTEREST OF THE COMMITTEE.

UM, AND IN THE INTEREST OF, OF, UH, HAVING A FRUITFUL DISCUSSION ON SOME OF THESE TRENDS THAT WE'RE OBSERVING AND WHERE WE SEE THE MARKED DEVELOPMENT, UH, TRACK HEADING, UH, OVER THE NEXT FEW MONTHS, UM, WE, SOME OF THE KEY OBSERVATIONS THAT WE'VE SEEN ARE AN INCREASE IN THE FREQUENCY OF, UM, UH, NEGATIVE OR, OR $0 MEG MEGAWATT HOUR PRICES BECOMING INCREASINGLY COMMON, PARTICULARLY IN THE SHOULDER MONTHS.

UH, THE RELATIONSHIP BETWEEN HIGHER OUTAGE LEVELS IN, UH, THE SPRING, PARTICULARLY IN THE MAY TIMEFRAME THAT DAN TALKED ABOUT, AND WHAT MARKET OUTCOMES WE SAW RESULTING FROM THAT.

UM, AS WELL AS THE, IN THE PARTICIPATION OF NEW RESOURCES OR RESOURCES IN THE A DER PILOT IN NEW SERVICES, PARTICULARLY THE ECRS, UM, THAT COMMENCED AT THE BEGINNING OF MAY.

AND, UH, AND ALSO, UH, IT, WE'LL TALK ABOUT THE, AS I SAID, THE, THE DISPATCHABLE RELIABILITY RESERVE SERVICE AND WHAT STAKEHOLDER CONVERSATIONS WE'LL BE HAVING ON THAT TOPIC OVER THE COURSE OF THE SUMMER.

AS WE, UH, AS WE OBSERVED THE, UH, MARCH 29TH, DAN TALKED ABOUT THE, UH, THE NEW RENEWABLE PENETRATION RECORD THAT WAS SET.

IT NEGATIVE PRICES AND OR $0 PRICES ARE NOT NEW TO THE ERCOT MARKET.

THEY'RE A REFLECTION OF WHERE THE MARGINAL UNIT IS GOING TO BE AT A AT ANY GIVEN POINT IN TIME.

THEY CERTAINLY HAVE BEEN TRADITIONALLY CONFINED TO OVERNIGHT PERIODS IN, IN THE SHOULDER MONTHS, UH, RELATED TO HIGH WIND OUTPUT AND, AND LOW MARGINAL COST WIND, UM, THAT TYPICALLY TENDS TO, TO BLOW MORE STRONGLY IN THE, UH, IN THE OVERNIGHT AND LATE EVENING, EARLY MORNING.

UM, BUT AS WE, AND WE CERTAINLY SEE THAT EFFECT ON MARCH 29TH WITH, UH, WITH VERY NEGATIVE PRICES, UM, UH, VERY NEGATIVE RELATIVE TO ZERO NEGATIVE PRICES, UH, STARTING IN THE, IN THE EARLY MORNING HOURS, RECOVERING AS LOADS STARTED TO COME IN, UH, IN THE MORNING.

BUT THAT PRECIPITOUS DROP AS, AS THE SOLAR GENERATION CAME ONLINE, RIGHT? RIGHT AROUND, UH, THE LATTER PART OF HOUR ENDING EIGHT, GOING INTO HOUR, ENDING NINE, AND SUSTAINED THROUGHOUT THE COURSE OF THE DAY.

SO AS THAT, THE, THE, THE SUNLIGHT CONTINUED TO SHINE, WE SAW CONTINUED STRONG WIND OUTPUT.

UM, BUT PARTIC PARTICULARLY IT'S THAT, THAT SOLAR GENERATION THAT'S COMING ONLINE.

AND, UM, WHAT THAT RESULTS IN IS IN OUR, IN OUR OVERALL ENERGY OFFER CURVE, LOTS OF NEGATIVE OR ZERO PRICE GENERATION THAT'S AVAILABLE TO, TO SATISFY THE DEMAND AND THE LOAD THAT'S ON THE SYSTEM.

UM, AND THOSE NEGATIVE PRICES STARTING TO EASE OFF AS THE SOLAR GENERATION STARTS TO, TO BACK OFF.

UM, STILL NOT SEEING SIGNIFICANT PRICES THAT, THAT, UH, SORT OF REBOUNDING IN THE LATTER PART OF THE DAY.

THIS IS A SHOULDER MONTH.

IT WAS A, A, A FAIRLY LIGHT LOAD DAY, AND WE CONTINUE TO SEE THAT STRONG, UH, CONTRIBUTION FROM, FROM WIND GENERATION.

[02:30:01]

UM, BUT IT IS A, A MARKED, UH, A MARKED EFFECT, UH, THAT WE, THAT WE'RE SEEING NOW.

THIS IS AT THIS TIME, UH, WE'RE SEEING LIMITED TO THE SHOULDER MONTHS WHEN WE HAVE LESS DEMAND ON THE SYSTEM.

THE QUESTION WILL BE AS WE GO FORWARD, AS WE START TO SEE MORE, UH, SOLAR GENERATION IN PARTICULAR COMING ONLINE, UH, WHETHER THAT KEEPS PACE WITH, WITH LOAD GROWTH, UM, SUCH THAT WE, WE START TO, WHERE WE CONTINUE TO SEE THIS IN THE SHOULDER MONTHS, UM, UM, IT REMAINS TO BE SEEN WHAT EFFECT THIS WILL HAVE ON THE, THE, THE SUMMER MONTHS.

UH, CERTAINLY I, I DON'T THINK WE EXPECT TO SEE THAT, UH, THIS BECOMING A, AN AUGUST ISSUE OF, UH, IN TERMS OF PRICING OUTCOMES.

BUT CERTAINLY ON THAT, UH, ON THAT DATE, YOU'LL SEE NOTED ON THE SLIDE IN THE SHOULDER MONTH, ALMOST HALF OF THE SC INTERVALS ON MARCH 29TH, EXPERIENCE ZERO OR OR NEGATIVE PRICES.

SO INTERESTING TO SEE, UH, IS AS THIS DEVELOPS, UM, THE, WHETHER THE, THE, THE FREQUENCY OF THIS CONTINUES TO, UH, MANIFEST ITSELF IN SHOULD THE SHOULDER MONTHS, UM, AND WHAT THAT MEANS FOR, UH, MOVING, UH, INTO EVEN, EVEN A HIGHER LOAD PERIODS.

ON THE, THE, THE FLIP SIDE OF THAT, AND, AND AGAIN, IT IS A COMPLIMENT TO WHAT DAN HAD SHARED IN HIS SLIDES ABOUT THE, UM, THE LEVEL OF, OF OUTAGES THAT WERE, THAT WERE PRESENT IN MAY.

UH, WE ZOOMED IN ON ONE DAY IN PARTICULAR, MAY 8TH, UM, IN WHICH WE HAD, UH, UNSEASONABLY HOT TEMPERATURES FOR, FOR THE MONTH, UM, COMBINED WITH THOSE, THE HIGH LEVELS OF, OF OUTAGES TO PRODUCE, UH, RELATIVE SCARCITY CONDITIONS.

AND SO IT WAS RELATIVELY TIGHT.

WE WERE, WE STILL HAD, UM, UPWARDS OF 4,000 MEGAWATTS OF, OF RESERVES ON THE SYSTEM, BUT WE WERE INTO THAT PART OF THE, THE PRICING ALGORITHM WHERE, UM, PRICE ADDERS WERE, WERE BEGINNING TO, TO, TO PLAY A ROLE AS, AS THINGS GOT TIGHT, PARTICULARLY GOING INTO THE EVENING HOURS, AS AGAIN, SOLAR IS COMING OFF OF THE, THE SYSTEM.

AND WE'RE, WE'RE NEEDING TO, TO RE-DISPATCH IN ORDER TO ACCOUNT FOR THE LOSS OF THAT GENERATION AND ENSURE THAT WE MAINTAIN SUPPLY AND DEMAND BALANCE.

SO YOU'LL SEE PRICES GOING TO THE CAP THEY'RE NEAR IN THE, UM, HOUR ENDING, UH, 19 HOUR ENDING, 20 HOUR ENDING 21 TYPE PERIODS.

UM, AND THOSE WERE, UM, YOU KNOW, INDICATIVE OF, AND, AND I THINK INDICATIVE OF THE MARKET, SENDING THE RIGHT SIGNAL AT THE TIME OF WHAT THE, WHAT THOSE CONDITIONS WERE AND SIGNALING TO THE MARKET THE NEED FOR, UH, THE, THE NEED FOR GENERATION, THE, THE, THE, THE SUPPLY STACK, UH, THE SUPPLY STACK AS IT STOOD AT THE TIME.

UM, AND SO THESE, UH, THESE OPERATIONAL, UH, THESE OPERATIONAL CONDITIONS, THE, THE, UH, VOLUME OF RESOURCES THAT WERE ON OUTAGE, THE REALTIME DEMANDS, UH, DRIVEN BY THE, THE HIGHER TEMPERATURE REALLY ARE BEING SIGNALED.

AND, AND WE'RE SEEING THAT THAT TIGHT CORRELATION BETWEEN WHAT THE, UH, THE OPERATIONAL PICTURE IS AND, AND WHAT THE MARKET IS, IS SIGNALING.

UM, AND SO THAT WAS, UM, WANTED TO TO, TO PROVIDE THAT AS, AS A COMPLIMENT TO WHAT IT MEANS TO THE MARKET TO HAVE THESE SU THESE SUSTAINED, UH, OUTAGES AND SUSTAINED HIGH LEVELS OF, OF OUTAGES AS WE SEE OTHER CONDITIONS MATERIAL MATERIALIZING ON THE SYSTEM, AND IN PARTICULAR, HIGH LOADS DUE TO HIGH TEMPERATURES IN TERMS OF OVERALL MARKET DEVELOPMENT AND MARKET EVOLUTION ACTIVITIES.

WE WANTED TO BRING BACK TO, UH, THE COMMITTEE A DISCUSSION ON THE A DER, THE AGGREGATED, UH, DISTRIBUTION ENERGY RESOURCES PILOT.

UM, BACK AT THE FEBRUARY MEETING WAS THE APPROVAL OF PHASE TWO OF THE A DER PILOT, WHICH ENABLED PARTICIPATION OF THESE RESOURCES IN THE E-C-R-E-C-R-S, UH, ANCILLARY SERVICE.

UM, WE CURRENTLY HAVE TWO, UH, A DERS PARTICIPATING IN THE WHOLESALE ELECTRICITY MARKET, ENABLED FOR BOTH ENERGY PARTICIPATION AS WELL AS NON SPINNING RESERVES.

AND THE, UH, ECRS AND APOLOGIZE, MY, MY MAP CUT OFF THE, THE REST OF THE WORD THERE, THE, UH, ERCOT CONTINGENCY RESERVE SERVICE ECRS.

UM, AND IT WAS, UH, THAT, THAT PHASE TWO THAT SPECIFICALLY ENABLED THE PARTICIPATION OF A DER RESOURCES IN ECRS AND, UH, THAT PARTICIPATION BEGAN IN MAY.

UH, WE CONTINUE TO WORK ON THE A DR PILOT, WORK WITH STAKEHOLDERS TO, UH, UNDERSTAND BARRIERS TO A DR PARTICIPATION, SEE HOW WE CAN WORK THROUGH THAT AND FACILITATE THEIR BROADER PARTICIPATION IN, IN MARKET SERVICES.

UM, AND THERE CONTINUES TO BE STRONG INTEREST IN THE A DER PILOT.

THERE ARE ADDITIONAL RESOURCES THAT HAVE BEEN IDENTIFIED WHO ARE WORKING THROUGH THE, THE PROCESS OF, OF COMING ONLINE, UH, THAT WILL ADD ANOTHER FIVE MEGAWATTS OR SO OF, OF CAPABILITY TO THE, THE OVERALL PILOT.

UM, BUT IT IS AN IMPORTANT STEP FORWARD TO ENABLE YET ANOTHER ANCILLARY SERVICE AND OPPORTUNITY FOR A D TO, UH, TO MAKE THEIR CONTRIBUTION TO THE, UH, TO THE OVERALL ELECTRICITY GRID, YES, IN, IN SMALL QUANTITIES AT THIS POINT, BUT PROVING THAT THAT CAPABILITY,

[02:35:01]

UM, AND, AND DEMONSTRATING THE EFFECTIVENESS OF, OF RESOURCES TO, TO MEET OUR SYSTEM NEEDS.

FINALLY, I WILL SPEAK TO THE DEVELOPMENT OF THE DISPATCHABLE RELIABILITY RESERVE SERVICE, WHICH HAS BEEN A, A TOPIC OF STAKEHOLDER DISCUSSION BETWEEN, UH, ERCOT AND THE STAKEHOLDER COMMUNITY FOR THE LAST FEW MONTHS.

UM, THE DISPATCHABLE RELIABILITY RESERVE SERVICE, UH, WAS AN ANCILLARY SERVICE CREATED OUT OF HOUSE BILL 1500.

UM, AND WE HAVE BEEN, UH, AS ERCOT WORKING WITH STAKEHOLDERS OVER A SERIES OF WORKSHOPS TO DEFINE THE DESIGN OF THAT, UH, OF THAT ANCILLARY SERVICE.

UH, THINKING ABOUT THE RESOURCE ELIGIBILITY, UH, THE, THE, THE, UM, THE WAY IN WHICH IT'S, IT'S ENABLED THROUGH THE MARKET, UH, AS WELL AS SOME OF THE, THE SETTLEMENT OUTCOMES.

UM, AND THIS IS A RELIABILITY SERVICE, ANCILLARY SERVICE TARGETED TOWARDS RESOURCES THAT CAN PROVIDE THEIR POWER, UH, WITHIN TWO HOURS THAT CAN SUSTAIN THAT RESPONSE FOR, UH, UP TO FOUR HOURS, UH, OR, OR, SORRY, MINIMUM OF FOUR HOURS.

AND ALSO, UH, A SERVICE THAT IS PROCURED THROUGH THE DAY AHEAD, BUT NOT CO OPTIMIZ IN REAL TIME WITH, WITH OTHER ANCILLARY SERVICES.

UM, IN, IN WORKING WITH, WITH STAKEHOLDERS AND IN OUR INTERNAL DESIGN DISCUSSIONS, WE HAVE, UH, MADE SOMEWHAT OF A PIVOT IN OUR, UH, IN OUR UNDERSTANDING OR OUR VIEW OF THE ELIGIBILITY FOR DIFFERENT TYPES OF RESOURCES TO PARTICIPATE AND PROVIDE DR.

RS, UH, AND THOSE WERE OUTLINED IN OUR, OUR WORKSHOP HELD ON JUNE 3RD, UM, SPECIFICALLY THE, UH, THE RESOURCE PARTICIPATION BY RESOURCES, UH, SUCH AS CONTROLLABLE LOAD RESOURCES, AS WELL AS ENERGY STORAGE RESOURCES, UH, THE, UH, ERCOT VIEW AND, AND WHAT WE ARE BRINGING FORWARD.

AND WHAT WE HAVE BROUGHT FORWARD TO, UH, THE MOST RECENT, UH, PROTOCOL REVISION SUBCOMMITTEE MEETING LAST WEEK IS THAT PARTICIPATION IN DRS WOULD BE LIMITED TO OFFLINE RESOURCES ONLY.

UM, UH, AND THAT THE, OUR READ OF THE, UH, THE, THE STATUTORY LANGUAGE PROHIBITS, OR PRECLUDES, SORRY, PRECLUDES THE, UH, PARTICIPATION OF CONTROLLABLE LOAD RESOURCES.

AND SO WE ARE FOCUSING ON OFFLINE RESOURCES.

UM, ENERGY STORAGE RESOURCES ARE, ARE CARVED OUT IN THEIR WAY BECAUSE THERE IS CURRENTLY NOT AN OFFLINE RESOURCE STATUS THAT'S AVAILABLE TO ENERGY STORAGE RESOURCES.

UM, AND WE, SO WE, WE TALKED THROUGH THAT WITH, UH, WITH STAKEHOLDERS.

UM, THE ENERGY STORAGE RESOURCES INTRODUCE A, A LEVEL OF COMPLEXITY THAT COULD BECOME A BARRIER TO THE TIMELY IMPLEMENTATION OF DRS.

UM, AND SO WHAT WE HAVE TAKEN AWAY FROM, AS OUR, UH, DIRECTION FROM THE PROTOCOL REVISION SUBCOMMITTEE IS THAT WE WILL CONTINUE TO WORK ON THE DESIGN OF DRS, UH, WORK WITH STAKEHOLDERS ON THAT, WITH A VIEW TO KEEPING THE, THE, UM, THAT, THAT DESIRE FOR SIMPLICITY AND IMPLEMENTATION, A TIMELY IMPLEMENTATION OF DRS, WHILE SEEING, UM, HOW WE CAN WORK THROUGH, UH, IN EITHER THIS OR IN FUTURE MARKET EVOLUTION, THE INCLUSION OF ENERGY STORAGE RESOURCES.

UM, SO WE EXPECT THAT TO BE AN ACTIVE STAKEHOLDER CONVERSATION OVER THE COURSE OF THE SUMMER.

UH, THE, THE CONVERSATION HAS BEEN SENT TO BOTH, UH, UH, ROSS AND WMS TO TALK THROUGH THOSE ISSUES, UH, AT THE REQUEST OF PRS.

UM, AND SO WE'LL BE, WE'LL BE ACTIVELY ENGAGING, UH, WITH THE STAKEHOLDERS OVER THE COURSE OF THE SUMMER.

UH, WE DON'T EXPECT THERE TO BE DECISION, UH, OR ACTION TO BE TAKEN BY THE BOARD IN THE NEAR TERM, UM, BUT YOU MAY BE HEARING OF, OF STAKEHOLDER CONVERSATIONS THAT ARE HAPPENING OVER THE COURSE OF THE SUMMER.

AND SO I WANTED TO GIVE SOME, SOME BACKGROUND AND CONTEXT FOR THAT.

THE, THE FINAL ITEM THAT I WILL NOTE, UH, FOR THE MEMBERS OF THE COMMITTEE IS IN THE, UH, IN THE MATERIALS FOR TODAY'S MEETING, THERE IS AN ATTACHMENT, WHICH SPEAKS TO A, A REVISED BOARD DECISION TEMPLATE THAT WAS PUT FORWARD, UM, COMING OUT OF THE, THE LAST MEETING THAT THERE WAS A, A BOARD DECISION, UM, AROUND PRICE CORRECTIONS FOR, UH, FOR DATES IN JANUARY.

UM, AND IN THE ORIGINAL BOARD DECISION TEMPLATE, UM, WE NOTED WHICH, UH, PRICES, WHICH DATES HAD OUR OPERATING DATES, HAD, UH, PRICES CORRECT PRICE CORRECTIONS NECESSARY FOR A DAY AHEAD, AND WHICH HAD THOSE FOR REAL TIME.

THOSE WERE INADVERTENTLY SWAPPED, UH, IN TERMS OF THE DATES BETWEEN WHICH WERE DAY AHEAD PRICE CORRECTIONS, WHICH WERE REAL TIME PRICE CORRECTIONS.

THE CORRECTED, UH, DATES HAVE BEEN INCLUDED AS A RED LINE IN THE, IN THE BOARD MATERIALS FOR YOUR REVIEW.

BUT, UH, AT THIS TIME, I'M, I'M HAPPY TO PAUSE AND, AND ANSWER ANY QUESTIONS, UM, EITHER ON THE, THE SLIDES OR, UH, ANY OTHER CONTENT.

GORDON, ON YOUR SLIDE NUMBER THREE, WHICH WAS THE, UH, NEGATIVE PRICING, SORRY, I, THAT'S MUST HAVE AN INVER SWIPE THERE.

APOLOGIES.

YEAH, THAT'S OKAY.

I MEAN, WHAT DOES THAT MEAN FOR BASE LOAD FOR THE COAL PLANTS, THE NUCLEAR PLANTS, THE STEAM, STEAM UNITS? IT JUST SEEMS, HOW DO THEY SURVIVE ECONOMICALLY WITH THAT PICTURE? SO I, I THINK WHAT'S IMPORTANT TO RECOGNIZE WITH THIS PICTURE IS THIS, IS, THIS IS ONE DAY IN A, A SEASON OF THE YEAR WHERE TYPICALLY WE ARE EXPERIENCING LOWER, LOWER DEMANDS TO BEGIN WITH.

UM, AND I, AND ASSUMING WITH MORE SOLAR AND THE LIGHT COMING ONTO THE GRID,

[02:40:01]

UM, AND THE, UH, AND THAT DEMAND IS, IT IS LARGELY BEING AN, THIS IS A RECORD SETTING DAY FOR, UH, FOR RENEWABLES AS WELL, IS, IS, IS LARGELY BEING OFFSET BY THAT VERY LOW COST GENERATION.

I THINK WHAT WE WILL WANT TO OBSERVE OVER TIME, UM, IS IN PARTICULAR WHAT THIS MEANS FOR, UM, UH, PRICING OUTCOMES AS WE MOVE INTO HIGHER DEMAND PERIODS.

UH, WHERE, UH, TYPICALLY OVER THE, WHEN WE THINK ABOUT THE WIND RESOURCES IN PARTICULAR, THEY ARE, THEY ARE RESOURCES THAT ARE PARTICULARLY STRONGER IN COOLER TEMPERATURES AND, UH, AND LOWER OUTPUT, UH, DURING THE, THE HEAT OF THE SUMMER.

UH, AND SO, UH, THAT, THAT SORT OF SEASONALITY MAY COME INTO EFFECT AS WE MOVE INTO THE, THE HIGHER, UH, HIGHER DEMAND PERIODS WHICH ARE GOING TO LIKELY SIGNAL STRONGER PRICES TO BEGIN WITH.

UM, AS WE SEE MORE SOLAR COMING ALL ALONG, I THINK THAT'S GONNA BE, IT'D BE INTERESTING TO OBSERVE THAT DYNAMIC, UM, AS WELL AS WHAT LOAD IS COMING ONTO THE SYSTEM THAT IS GONNA HAVE TO BE SATISFIED.

SO THERE ARE, THERE ARE A NUMBER OF MOVING PARTS THAT COME INTO WHAT THAT, WHERE THAT PRICE SETTLES.

THIS IS, UH, A RECORD SETTING, UH, DEMAND, A RECORD SETTING GENERATION DAY FROM, FROM RENEWABLES IN A, AT A PERIOD OF THE YEAR WHERE DEMAND IS TYPICALLY LOWER.

MM-HMM, , UM, WHAT IT, WHAT IT MEANS FOR OTHER RESOURCE RESOURCES ON THE SYSTEM IS WHAT IS THEIR, THEIR PERFORMANCE IN THOSE OTHER TIMES OF THE YEAR WHERE PRICES ARE GOING HIGHER.

UM, AND IN PARTICULAR WITHIN THE INTRADAY MOVEMENTS OF WIND AND, AND, AND SOLAR IN PARTICULAR, AS THAT DOWN RAMP IS HAPPENING IN THE EVENING, UM, AND GENERATION IS REQUIRED IN ORDER TO, TO CLOSE THAT GAP, EITHER GENERATION OR, OR INJECTION FROM, FROM BATTERY STORAGE, FOR EXAMPLE, THEN ARE, ARE THE, THE PRICE SIGNALS, UH, ACCURATELY REFLECTING THAT, THAT NEED FOR, FOR GENERATION IN THE TIME, IN THAT TIME.

SO MAYBE TO COME BACK TO, TO, TO THE CRUX OF THE, THE QUESTION, I THINK IT'S, IT'S TOO EARLY TO INFER WHAT THIS MEANS ON, ON THIS DAY TO WHAT IT'S GONNA MEAN ACROSS AN ENTIRE YEAR.

BUT I THINK IT IS, UH, SOMETHING THAT WE WILL CONTINUE TO KEEP AN EYE ON, UM, AS, AS MANY OTHER, UH, MANY OTHER GRID OPERATORS ARE SEEING IS THIS INTRADAY, UH, BALANCE BETWEEN RENEWABLES, UH, BETWEEN BASE LOAD GENERATION, BETWEEN, UH, INTERMEDIATE AND PEAKING GENERATION AND WEATHER, AND ENSURING THAT THE MARKET IS PROVIDING THE APPROPRIATE SIGNALS FOR THOSE DIFFERENT OPERATING CHARACTERISTICS THAT HAVE TO WORK TOGETHER TO OPERATE THE SYSTEM.

MM-HMM, , OKAY.

YOU HAVE QUESTIONS, JULIE? YES.

I'D LIKE TO ASK A QUESTION, GORDON, ABOUT SLIDE SIX AND DRRS.

THAT WE EXPECT TO SEE FROM MORE EFFICIENT DISPATCH AND, AND THE, UM, THE ACCESSIBILITY OF, OF RESERVES TO, TO SCED THAT WILL BE COMING THROUGH THAT.

UM, JUST REMIND US, IS THERE OFFER FLOOR ASSOCIATED WITH THIS ANCILLARY SERVICE AND ARE THERE SOME LESSONS LEARNED FROM ECRS THAT ARE BEING APPLIED TO ITS DEVELOPMENT? SO I WILL, UM, FOR, SO TWO QUESTIONS, WHETHER THERE'S, WHETHER THERE'S AN OFFER FLOOR AND WHETHER THERE IS A, UM, WHETHER ARE THE LESSONS THAT WE CAN LEARN FROM THE IMPLEMENTATION OF, OF OTHER ANCILLARY SERVICES, WHAT IT DIFFERENTIATES THIS FROM, UM, UH, FROM OTHER, SOME OF THE OTHER SERVICES THAT THIS IS BEING DEPLOYED IN THE DAY AHEAD TIMEFRAME.

SO THIS IS SOMETHING THAT'S BEING PROCURED AND PROCURED DAY AHEAD.

UM, AND, UM, SO I THINK THAT THE, THE INTERPLAY BETWEEN THAT AND THEN REAL TIME IS GONNA BE IMPORTANT FOR US TO, TO, TO ACTIVELY MONITOR, UM, THE, SOME OF THE, THE CHARACTERISTICS OF THAT WILL BE FURTHER REFINED THROUGH OUR, THROUGH OUR STAKEHOLDER CONVERSATIONS.

IN TERMS OF THE, THE DESIGN AND DEPLOYMENT OF, UH, OF DRRS, UM, THOSE ARE THE SORTS OF CONVERSATIONS THAT WE'LL BE, THAT WE'LL BE HAVING WITH, WITH STAKEHOLDERS AS WE MOVE THROUGH, UH, THE DESIGN ACT ACTIVITIES FOR DRRS.

UM, AND I, I THINK THIS IS, UH, AGAIN, UM, SOME OF THE, THE, THE, UH, OBSERVATIONS AROUND ECRS, UH, HAVE TO DO WITH AND AS, AS WE TALKED ABOUT THIS MORNING, UM, WHERE WE ARE ULTIMATELY HEADED FROM A MARKET DESIGN PERSPECTIVE TOWARDS, UH, THE REALTIME REALTIME CO OPTIMIZATION AND NRTC PLUS B, AND WE'LL HEAR AN UPDATE ON ON THAT NEXT.

UM, THIS IS A, AN INITIATIVE THAT WILL BE IMPLEMENTED AFTER THAT REAL-TIME CO-OP OPTIMIZATION IS, UM, IS PUT INTO, IS PUT INTO PLACE.

AND SO, UH, IN, IN WORKING THROUGH THE DESIGN OF THIS, UH, THIS PROGRAM, IT IS IN LIGHT OF HAVING RTC IN PLACE AND SOME OF THE BENEFITS

[02:45:01]

UM, SO I THINK IMPORTANT TO ALWAYS KEEP IN MIND THE, UH, THE, THE PRICING, UH, EFFECTS THAT, UH, THAT WILL, UH, RISE FROM THE DEPLOYMENT OF, OF RESERVES AND, AND SOME OF THESE ACTIONS.

UM, BUT CONSIDERING WITHIN THAT HOLISTIC VIEW OF THE REAL TIME CO-OP OPTIMIZATION PROGRAM, I THINK THAT THAT ALLOWS US TO MOVE FORWARD, UM, A LOT MORE CONFIDENTLY WITH THE, THE EXPECTED EFFICIENCY OF THOSE OUTCOMES.

SO SINCE YOU'RE SAYING IT'LL BE IMPLEMENTED AFTER RTC, IT'S IN 2026, I, I BELIEVE THAT IS, IT'S 2026 IS, UH, THE EARLIEST THAT WE WOULD SEE THAT TO, TO BE IMPLEMENTED.

ANY OTHER QUESTIONS FOR GORDON? GREAT, WELL, THANK YOU.

THANK YOU VERY MUCH.

SO NEXT STEP IS, UH, IS AUSTIN RASO AND HE'S GONNA PRESENT THE, OH NO, I'M SORRY, I SKIPPED ONE.

THANKS.

IT'S, UH,

[7.3.1 Real-Time Co-optimization Update]

MATT NESS IS UP NEXT WITH AGENDA ITEM 7.3 0.1, REALTIME CO-OP OPTIMIZATION.

WOULD'VE LOOKED LIKE ON, UM, NRTC 2023? WHAT'D I SAY, SEPTEMBER OF 2023, THAT WE'D BE ABLE TO RERUN ON A SIMULATION OF WHAT THE PRICE FORMATION WOULD LOOK LIKE FOR A DAY LIKE THAT.

HEY, GOOD AFTERNOON, MATT MARIE ERCOT, UH, ALSO THE CHAIR OF THE REALTIME CO-OP OPTIMIZATION TASK FORCE.

SO TODAY'S UPDATE, UH, JUST WANTED TO HIGHLIGHT KIND OF THE, WE'RE STARTING TO MOVE FROM BUSINESS REQUIREMENTS AT ERCOT INTO MORE THE IMPLEMENTATION SIDE OF THINGS.

SO, UH, WE DID RECEIVE OUR FIRST DROP OF VENDOR DELIVERY CODE.

SO WE HAVE A, UM, WE'RE OUT IN, UM, CALIFORNIA LAST MONTH AND THEY DEMOED, UH, THE SOFTWARE.

SO OUR DAY AHEAD MARKET HAS BEEN DELIVERED FOR RTC, SO THAT HAS THE NEW AS DEMAND CURVES, VIRTUAL AS OFFERS, ALL THE THINGS THAT WE'VE BEEN TALKING ABOUT, WE'RE STARTING TO RECEIVE CODE FOR.

UH, WE'RE ALSO TRANSITIONING INTO THE INTEGRATION AND MARKET INTERFACE CHANGES, AND JP DID A GOOD JOB OF UPDATING TODAY THAT WE'VE HAD NUMEROUS OFF CYCLE WORKSHOPS WITH THE MARKET PARTICIPANTS AND VENDORS TO PREPARE THEM FOR, HERE'S ALL THE DIFFERENT PIECES IN YOUR SYSTEM THAT YOU NEED TO CHANGE.

HERE'S YOUR TELEMETRY, HERE'S YOUR MARKET SUBMISSION ITEMS, HELP DEFINE THOSE, TO GET THOSE OUT THE DOOR.

IT'S HARD FOR THE MARKET TO BE READY WHEN THEY DON'T KNOW WHAT TO BUILD.

SO WE HAVE TO DO OUR PART TO GET THAT INTO THEIR HANDS.

WE'VE BEEN DOING THOSE EARLY DRAFTS, UH, WITH THE TARGET OF RELEASING AT THE END OF THE MONTH.

AND THEN IN TERMS OF THE EXTERNAL, UH, MEETINGS THEMSELVES, WE'RE HAVING THESE ONGOING ISSUES, UM, THAT WE HAVE TO BLOCK AND TACKLE TO GET THROUGH A LOT OF ISSUES BEFORE WE GO LIVE, UH, AS WITH ANY IMPLEMENTATION OF A PROGRAM THIS LARGE.

AND THEN IN TERMS OF THE KEY TAKEAWAYS IS THAT THINGS ARE ON TRACK.

IT'S, IT'S NICE TO BE THE PRIORITY ONE PROJECT.

UM, NOT, NOT EVERYONE GETS TO ENJOY THAT AT TIMES, BUT AT THIS POINT THE MOMENTUM IS GREAT.

THE SOFTWARE IS COMING IN ON TIME AND WE'RE LOOKING REALLY GOOD RIGHT NOW.

SO I WON'T GO INTO THIS LIST, IT'S JUST TO LET YOU KNOW A COUPLE THINGS THAT STARTED TO TURN GREEN.

THIS IS ONE OF THOSE, UH, WE TAKE THREE CRACKS AT EVERY ISSUE TO GET IT DONE AND COMPLETED.

AND SO THE IDEA IS TO MOVE THROUGH THIS LIST, UH, BEFORE GO LIVE.

THE TWO THAT WERE GREEN WERE TWO THINGS THAT WE'VE WORKED VERY SUCCESSFULLY WITH THE TASK FORCE AND TACK ON.

UH, THE FIRST ITEM WAS RELIABILITY, UNIT COMMITMENT FOR CAPACITY SHORT.

UH, WHEN WE DID THE RTC PROTOCOLS, THERE'S NO SUCH THING AS BATTERIES.

UH, OBVIOUSLY IN THESE FIVE YEARS WE'VE HIT BATTERIES.

AND SO WITH THAT CRITICAL MASS, IF A QI HAS A PORTFOLIO THAT INCLUDES A STATE OF CHARGE IN BATTERIES, HOW DO WE ACCOMMODATE ACCOUNT FOR THAT IN THE RELIABILITY UNIT COMMITMENT, UH, SHORT PAYMENT.

SO THAT WAS ONE PIECE.

THE OTHER ONE IS THE, UH, CHANGE THE ONLINE HYDRO RESOURCES.

UH, TODAY, UM, A HYDRO CAN PROTECT ITSELF FROM BEING DISPATCHED IN SC BY PARKING THEIR ANCILLARY SERVICES ON IT.

AND RIGHTFULLY SO, IF THEY'RE CARRYING RESPONSIVE RESERVE ON A DAM, THAT'S WHERE YOU PARK IT WHEN YOU NEED IT, YOU RELEASE IT.

UH, WITH RTC, BECAUSE IT HAS ACCESS TO EVERYTHING AND CO OPTIMIZES, WE NEED TO ALLOW THOSE MITIGATE OFFER CAPS TO BE BACKED OFF SO THAT THE, UH, QUEASY CAN PUT THE OFFER WHERE THEY WANT IT TO BE.

SO WE'RE NOT JUST, UH, THESE MITIGATED OFFER CAPS CAN GO DOWN TO LIKE A 10 HEAT RATE SO YOU CAN JUST START BLEEDING OUT THE DAMS UNLESS WE PUT THAT IN PLACE.

SO THAT WAS A GOOD GAP THAT WAS CAPTURED, UH, BY THE TASK FORCE A FEW YEARS AGO.

SO IN TERMS OF, THOSE ARE THE KEY MARKET DESIGN ELEMENTS WE STILL NEED TO GET IN PLACE.

UM, SO THE FIRST ISSUE ON THE RUCK HAS ITS OWN NPR 1236 THAT'LL COME THROUGH.

IT'S BEEN ALL CONSENSUS ALL THE TIME.

UH, SO THE HOPE IS TO GET THAT THROUGH QUICKLY AND WE'RE ALREADY BUILDING TO WHAT WAS BUILT THAT'S BUILT ON A WHITE PAPER.

UH, THE OTHER ONE WILL BE IN A CLARIFYING NPRR, BUT WE'RE STARTING TO MOVE MORE INTO MARKET TRIALS AND THAT'S WHAT THE NEXT SLIDE WILL GO A LITTLE DEEPER INTO.

UH, I DO WANT TO, YOU KNOW, THE FOUR THEMES THAT WE HAVE IS MARKET TRIALS.

WHAT'S IT LOOK LIKE FOR EVERYONE TO BE READY? AND THE NEXT ONE IS ANALYSIS OF MARKET OUTCOMES.

UH, THERE'S BEEN A LOT OF DISCUSSION TO THIS.

ERCOT IS STANDING UP A SIMULATION OF REAL TIME CO-OP OPTIMIZATION THAT, SO WOULD THE PUC OR OTHER PEOPLE OR THE MARKET PARTICIPANTS SAY, HEY, FOR DAY X IN 2024, IT WAS A HOT DAY.

WHAT

[02:50:01]

ALSO, THE PARAMETER VALUES.

UH, WE DO HAVE SOME TAC APPROVED VALUES THAT NEED TO BE APPROVED.

AND SO THOSE ARE THINGS THAT, UM, YOU KNOW, A PROXY OFFER CURVE FOR ANCILLARY SERVICES.

IF A QUEASY DOESN'T PUT IN A COMPLETE RANGE OF OFFERS FOR ENERGY AND ANCILLARY SERVICES, HOW DO YOU COMPLETE THAT OFFER SO THAT WE HAVE THOSE IN OUR SYSTEM? AND THEN THE LAST PIECE IS, UH, KIND OF A THEME THAT WE TALKED ABOUT AT THE LAST MEETING IN APRIL WAS I SHOWED YOU THE, UH, AS DEMAND CURVE.

THOSE HAVE BEEN TALKED ABOUT TODAY.

IT'S THE IDEA OF DECONSTRUCTING THE ORDC CURVE INTO THESE AS DEMAND CURVES.

AND THE MARKET IS ASKING ARE THEY THE RIGHT SHAPE? AND SO WHILE THAT DOESN'T BLOCK US FROM A TECHNICAL GO LIVE, IT IS A POLICY THING TO BE TRACKED THROUGH TIME.

SO THOSE ARE THE FOUR AREAS THAT WE'RE, UH, FOCUSING ON.

THIS IS THE MAIN THING I WANTED TO, UH, DRAW ATTENTION TO IS OUR DELIVERY DATES CONTINUE TO HIT TARGETS AND REQUIREMENTS HIT TARGETS.

A KEY DATE IS FOR ONE OF OUR KEY VENDORS TO DELIVER IN MAY OF 2025.

EVERYTHING THEY'VE DONE HAS BEEN SUCCESSFUL TO DATE FOR HITTING THAT DATE IF THEY HIT THAT DATE, AND THAT WOULD BE THEIR FINAL DROP.

WE WILL HAVE ALREADY HAD INITIAL DROPS IN INTEGRATION TESTING GOING ON THROUGH THE FIRST HALF OF NEXT YEAR.

POSSIBLY WE COULD ACTUALLY START MARKET TRIALS IN MAY.

AND SO THE IDEA IS WHAT DOES IT LOOK LIKE TO GET TO MAY AND NOT SURPRISE THE MARKET WITH OUR READINESS? AND SO WHAT WE'RE LOOKING TO DO IS TO HAVE A, UH, QUEASY ATTESTATION PUT OUT IN THE NEXT 30 TO 60 DAYS THAT SAYS, DEAR MARKET PARTICIPANTS, ARE YOU AWARE OF THE IDEA THAT THE MARKET TRIALS MAY START AS SOON AS MAY, 2025 THAT ERCOT HAS PUBLISHED THE SPECIFICATIONS? AND WHO'S YOUR ACCOUNTABLE EXECUTIVE THAT WE NEED TO WORK WITH TO MAKE SURE IT GETS DONE? SO AS WE START TO GET THAT DATA ELEMENT OF THOSE RESPONSES, THAT WOULD BE A FIRST SCORECARD THAT THE BOARD WOULD START TO SEE IN TERMS OF READINESS.

AND UNTIL THAT TIME, THEN WE'LL HAVE TO WAIT UNTIL WE GET DEEPER INTO THE PROJECT TO START TO SEE EVIDENCE OF PEOPLE HAVING THEIR SYSTEMS READY.

UH, BUT THE TWO SWIM LANES HERE THAT START ONE IS MARKET SUBMISSIONS.

IT'S THEIR ENERGY AND AS OFFERS INTO SCD, THOSE ARE THE BLUE ELEMENTS THAT NEED TO BE PROVEN OUT IN KIND OF A SANDBOX ENVIRONMENT.

AND THEN WE'D START RUNNING SCD BEHIND THE SCENES ON THE ORANGE, UH, COLOR IS OUR TELEMETRY CHECKOUT.

THAT'S NEW TELEMETRY POINTS THE QUEASY NEED TO PROVIDE OUT OF PROTECT OUT OF PRODUCTION AND WHAT DOES IT LOOK LIKE TO WHERE WE ACTUALLY TEST QUES.

AND AS THOSE TWO THINGS RUN IN PARALLEL, THEN POTENTIALLY IN SEPTEMBER OF 2025, WE COULD RUN A CLOSED LOOP FREQUENCY CONTROL TEST.

WHAT THAT MEANS IS FOR A BRIEF TIME FOR TWO TO FOUR HOURS, ERCOT CONTROL ROOM WILL RUN RTC SYSTEMS AND THE QUEASY WILL RUN THEIR R-T-C-E-M-S SYSTEMS AND THEY WILL FOLLOW RTC DISPATCH FOR TWO HOURS.

AND WE WANNA MAKE SURE THAT REGULATION SIGNALS CAN BE FOLLOWED AND TO DRIVE OUT ANY RELIABILITY ISSUES AT THAT POINT.

IT ALSO HELPS WITH ANY CUTOVER ISSUES AT THAT POINT.

SO THIS IS JUST KIND OF A HIGH LEVEL EVOLUTION.

UH, AT THE TASK FORCE WE SHARED ESSENTIALLY A ONE PAGER ON EACH OF THESE, A WHITE PAPER ON WHAT'S EXPECTED IN EACH OF THESE BOXES TO OCCUR ON THE ERCOT AND QUEASY SIDE.

SO THIS IS OUR KIND OF OUR CONTRACTUAL, UH, ENGAGEMENT WITH THE MARKET ON HOW TO BE READY.

AND THEN THE LAST SLIDE WAS JUST IN TERMS OF OTHER VOICEOVERS, AGAIN, THE DAY AHEAD BEEN DELIVERED, THE UH, AND WE'RE STARTING TO TEST THAT OR LOADED UP TO TEST IT.

WE'VE SUPPORTED THESE DEEP DIVE TECHNICAL WORKSHOPS THAT I MENTIONED.

UM, SO IN TERMS OF A MILESTONE, WHEN WILL WE HAVE THE GO LIVE DATE? SO THIS THIRD BULLET POINTS TO THE IDEA THAT, YOU KNOW, WE DO HAVE A TARGET OF DELIVERING THAT GO LIVE DATE IN A FORMAL PROJECT PLAN BY SEPTEMBER THIS YEAR.

WE HOPE TO GET THERE EARLIER, BUT IN THE MEANTIME, WE'RE GONNA USE THIS OTHER GRAPHIC AS A BE READY IN 2025.

SO WE'RE ABLE TO HIT THAT WHILE WE'RE WAITING ON THE FINAL, UH, ANSWER, AND THEN WE'LL CONTINUE TO WORK ON THE ISSUES LIST.

BUT THAT'LL TAKE ANY QUESTIONS THAT YOU MAY HAVE.

ANY QUESTIONS FOR MATT? WELL, SOUNDS LIKE GOOD PROGRESS, MATT.

YES, IT'S REALLY GOOD PROGRESS.

THAT'S GREAT.

ALRIGHT, THANK YOU VERY MUCH.

ELLE WILL PRESENT AGENDA ITEM 7.4, MARKET CREDIT UPDATE.

SO NEXT, UH, AUSTIN

[7.4 Market Credit Update]

THANK YOU AUSTIN ROSEAU, DIRECTORS SETTLEMENTS, RETAIL, AND CREDITS HERE WITH THE MARKET CREDIT UPDATE.

I THINK THIS, I'M OBVIOUSLY HERE TO, IT'D BE UP HERE AS LONG AS YOU'D LIKE, BUT THIS COULD BE A QUICK UPDATE.

UM, THERE'S NO ACTION REQUESTED OF Y'ALL TODAY.

UH, THIS IS INFORMATIONAL ONLY.

I'M HAPPY TO REPORT THERE IS NO DEFAULTS TO REPORTS SINCE THE LAST TIME WE, WE JUST, WE TALKED, SO NOTHING TO REPORT THERE.

UM, YOU KNOW, WHEN THIS, UH, DATA IS PUT TOGETHER, IT'S COVERS, UH,

[02:55:01]

MARCH AND APRIL.

SO SHOULDER MONTHS, WE'RE NOT SEEING A WHOLE LOT OF EXPOSURE CALCULATED FOR THOSE MONTHS.

UH, 1.3 TO 1.5 BILLION.

UH, I PULLED SOME, SOME FRESH NUMBERS LAST WEEK, UH, COMING INTO SUMMER.

NOW WE'RE UP TO AROUND 2 BILLION.

SO WE'RE COMING INTO SUMMER, UH, RIGHT NOW.

UM, WE DID TALK SOME ABOUT NPR 1165 THAT REQUIRED ALL MARKET PARTICIPANTS TO PROVIDE AN INDEPENDENT AMOUNT OF 200,000 OR 500,000.

BECAUSE OF THAT, WE IMPLEMENTED THAT.

UH, APRIL ONE, WE DID SEE A JUMP IN EXPOSURE.

THAT'S ACTUALLY, THAT REQUIREMENT IS, IS CALCULATED AS EXPOSURE TO THE MARKET PARTICIPANT.

THEY HAVE TO SATISFY WITH COLLATERAL.

SO WE DID SEE A JUMP OF 133 MILLION AUSTIN.

WAS THAT BECAUSE THEY DIDN'T PROVIDE THE AUDIT STATEMENTS OR WHAT, WHAT MADE THE COLLATERAL JUMP FOR, UH, SO, UM, SOME MARKET PARTICIPANTS WOULD BE EXEMPT FROM POSTING AN INDEPENDENT AMOUNT OF 200,000 OR 500,000 IF WE REVIEWED THEIR, THEIR INDEPENDENT, THEIR, UH, FINANCIAL STATEMENTS.

THEY HAD A CERTAIN NET WORTH.

UH, NPR 1165 TOOK THAT EXCEPTION AWAY AND JUST REQUIRED EVERYBODY TO POST, OKAY, 200,000 OR 500,000.

SO THE WAY THE SYSTEMS HANDLE THAT IS THEY SAY YOU HAVE JUST AN AUTOMATIC EXPOSURE OF 200,000 OR 500,000.

SO IT LOOKS LIKE CREDIT EXPOSURE THAT YOU HAVE TO SATISFY WITH COLLATERAL.

LEVIN IS GONNA PRESENT AGENDA ITEM 7.5, WHICH IS THE REVISION REQUEST STATUS UPDATE.

DOES THAT MAKE SENSE? UH, SO WITH THE, UH, INCREASE IN EXPOSURE, WE'RE SEEING A SLIGHT DECREASE IN DISCRETIONARY COLLATERAL.

YOU KNOW, THAT EXTRA, THAT BUFFER COLLATERAL WE SEE FROM 4.4 TO 4.1, UH, THAT'S STILL AROUND 4 BILLION RIGHT NOW AS WE'RE GOING IN, AS WE'RE GOING INTO SUMMER.

SO ANY QUESTIONS ABOUT THAT? SO NPR 1205, WE DISCUSSED THIS SEVERAL TIMES HERE, UH, THAT WAS ACTUALLY APPROVED BY THE PUC LAST WEEK.

SO WE PLAN TO, TO START IMPLEMENTATION HOPEFULLY NEXT MONTH.

THIS WAS THE ONE WHERE IT TALKS DEALS WITH CONCENTRATION LIMITS FOR BANKS THAT ISSUE LETTERS OF CREDITS AND, UM, SURETY BONDS, INSURANCE COMPANIES THAT ISSUE SURETY BONDS.

UH, WE'RE BASICALLY, UH, INCREASED SOME CREDIT STANDARDS FOR THOSE, FOR THOSE ISSUING ENTITIES.

UM, BUT WE ALSO, UH, INCREASE THE LIMITS AVAILABLE TO THOSE BANKS.

SO, UH, HERE WE GO.

SO I, I'VE SHOWED YOU THIS CHART THE LAST COUPLE TIMES.

THIS IS, THIS IS HANDLING THIS CHART.

YOU KNOW, THESE BANKS HAVE THIS, THIS IS THE ISSUER LIMITS FOR THESE, THESE BANKS.

UM, ONCE THEY BREACH, ONCE THEY REACH THEIR THEIR ISSUANCE LIMIT, WE, WE START TO PROVIDE SOME FRICTION.

WE DON'T ALLOW NEW LETTERS OF CREDIT AND IF THEY BREACH FOR FOUR MONTHS, WE DON'T ALLOW AMENDMENTS TO LETTERS OF CREDIT.

UM, THAT CHANGE THAT NPR JUST MENTIONED WOULD, UM, TAKE A COUPLE BANKS OFF THE LIST.

THIS IS JUST THE TOP 10 LIST.

THIS ISN'T ALL THE BANKS LISTED HERE.

IT WOULD TAKE A COUPLE BANKS OFF THE LIST, BUT IT ALSO WOULD OPEN UP THE AVAILABLE AMOUNT THAT THESE BANKS COULD ISSUE, UM, FOR THE ONES THAT REMAINED NATURALLY SHOULDER MONTHS, UM, AND JUST MARKET PARTICIPANT BEHAVIOR.

THIS ACTUALLY HAS IMPROVED FROM THE LAST TIME I SHOWED YOU THIS CHART.

I THINK WE HAD THREE RED BOXES LAST TIME.

NOW WE GOT ONE.

UM, SO WE ARE SEEING, I DON'T THINK WE'RE IN TROUBLE RIGHT NOW.

UM, HOWEVER, UM, BECAUSE OF THAT NPRR WE WILL START TO PHASE IN THOSE CHANGES AND, AND THEN WE'LL START PHASING THOSE IN, UH, THIS SUMMER, HOPEFULLY NEXT MONTH, STARTING NEXT MONTH, WHAT WE'LL DO IS WE'LL, UH, WE'LL OPEN UP THE ISSUANCE LIMITS TO ALLOW THE MARKET PARTICIPANTS TO CHANGE BANKS, AND THEN WE'LL IMPLEMENT LATER IN THIS YEAR, PROBABLY AFTER, AFTER SUMMER, WE'LL START, UH, SHUTTING DOWN THE BANKS THAT, UM, DON'T MEET THE CREDIT QUALIFICATIONS.

UH, 1215.

I DON'T THINK THIS NPR IS A PARTICULARLY CONTROVERSIAL OR BIG DEAL, BUT WE HAVE TALKED ABOUT IT BEFORE.

HOWEVER, I THINK YOU, IT MIGHT BE UP FOR A VOTE THE NEXT TIME.

UH, THIS MEETS ACTUALLY ON THE REGULAR MEETING ON A SPECIAL MEETING.

UM, AND THIS IS JUST A CLARIFICATION, NPRR THAT, UM, CLARIFIES SOME LANGUAGE TO MAKE SURE IT, UH, MORE ACCURATELY MATCHES WHAT WE'RE, WHAT'S GOING ON IN THE CREDIT CHECKS THAT HAPPEN IN THE DAY AHEAD MARKET.

UM, I CAN TALK MORE IN DETAIL THAT IF YOU'D LIKE.

UM, AND THAT IS IT.

ANY QUESTIONS? QUESTIONS FOR AUSTIN? SEEING AND HEARING NONE, JUST, UH, IS THIS ONE FOCUSED ON, UM, PREVENTING PRICE CORRECTIONS AS YOU'VE HAD IN THE PAST? NO, THIS ACTUALLY WOULD'VE, WOULDN'T HAVE ANYTHING TO DO WITH THAT.

WHEN, UM, WHEN MARKET PARTICIPANTS BID INTO THE DAY AHEAD MARKET, THERE'S LIKE A, A CREDIT CHECK THAT OCCURS AT THAT TIME.

UH, THIS DOESN'T CHANGE THAT CHECK AT ALL.

THIS IS JUST BETTER, BETTER CLARIFYING WHAT'S GOING ON.

SO MARKET PARTICIPANTS, UH, CAN READ THE PROTOCOLS AND, AND, AND BE CLEAR ON WHAT'S GOING ON WHEN WE'RE DOING THOSE CALCULATIONS.

[03:00:04]

[7.5 Revision Request Status Update]

YEAH, I'M GONNA BE REALLY QUICK.

LET ME FIND THE FIRST SLIDE.

HERE WE GO.

YEAH, I'M JUST GONNA LEAVE IT ON THE KEY TAKEAWAYS HERE.

THERE, THERE'S REALLY NOT MUCH TO REPORT ON.

IF YOU NOTICE THE NUMBER OF REVISION REQUESTS THE BOARD IS CONSIDERING IN JUNE AND THE NEW REVISION REQUESTS SINCE APRIL ARE ABOUT THE SAME KIND OF AS REFLECTIVE ON THE STEADY FLOW OF REVISION REQUESTS WE'VE BEEN SEEING.

UM, WE WERE ABLE TO MOVE A NUMBER FROM THE AGING LIST AFTER THE LAST MEETING, SO THAT'S PROGRESS.

UM, AND I'LL TAKE ANY QUESTIONS IF ANYONE HAS THEM.

I THINK THE KEY, JOHN, IS JUST TO KEEP THINGS MOVING AND THE ONES THAT ARE STUCK ON THERE FOR MORE THAN SEVEN MONTHS, JUST AS LONG AS WE UNDERSTAND WHY AND WE'RE STAYING ON TOP OF THOSE THINGS.

YEAH, THAT'S, THAT'S OUR, OUR GOAL.

ANYTHING ELSE FOR JOHN? THANK YOU.

NEXT ITEM IS, IS WOODY.

[8. Future Agenda Items]

THAT'S FOR THE, UM, PRESENTATION OF THE FUTURE AGENDA ITEMS. YEAH, SO I SUGGESTED, UM, ROW NINE ADDITION LARGE TRANSMISSION STUDIES WITH A SPOT FOR THE REMAINING THREE BOARD MEETINGS THIS YEAR.

WE'VE GOT SEVERAL LARGE PERMIAN BASIN, EXTRA HIGH VOLTAGE, SEVERAL OF THOSE COMING UP.

SO PROBABLY SETTING ASIDE SOME TIME TO TALK ABOUT THOSE AND SOME OF THOSE RESULTS WOULD PROBABLY BE USEFUL.

AND THEN I, UH, SUGGESTED ADDING ROW 12, WHICH IS A DISCUSSION OF THE RELIABILITY STANDARD.

I HAVE IT IN DECEMBER, BUT ACTUALLY IT MAY FIT CLOSER IN A, IN A EARLIER MONTH.

SO, BUT I DO THINK WE SHOULD SPEND SOME TIME TALKING ABOUT THAT AS WELL.

THOSE ARE THE ONLY ADDITIONS I HAVE THERE.

CARLOS, ON THE TRANSMISSION PROJECTS YOU'RE LOOKING AT THREE 40 FIVES PRIMARILY OR GOING HIGHER? SO FOR THE LARGE TRANSMISSION STUDIES? YEAH.

YEAH, IT'S UM, ONE OF THOSE IS GONNA BE THE PERMIAN BASIN STUDY WHICH WAS THE LEGISLATIVELY MANDATED STUDY AND IT WILL HAVE A 3 45 BUILD OUT AND A COMPARABLE 7 65 OR 500 KV BUILD OUT FOR COMPARISON SAKES.

AND THEN THERE IS THE SYSTEM WIDE EXTRA HIGH VOLTAGE STUDY AS WELL, WHICH WE'LL LOOK AT A SYSTEM WIDE ADDITION OF A NEW VOLTAGE.

SO BOTH OF THOSE ARE, UH, HAVE A, UH, NEW VOLTAGE COMPONENT TO 'EM THAT WE HAVEN'T SEEN BEFORE.

HP PC, NO, NOT HPV.

IT'S JUST, JUST A, INSTEAD OF, INSTEAD OF 345 KV BEING THE TOP, THE HIGHEST AC VOLTAGE, WE WOULD LOOK AT A HIGHER AC VOLTAGE AS WELL.

ADDITION OF ANOTHER TRANSFORMATION ON TOP OF THE 3 45.