[1. Call General Session to Order ]
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MEMBERS OF THE ERCOT BOARD OF DIRECTORS AND GUESTS, I AM PAUL FOSTER, ERCOT, BOARD CHAIR.
WELCOME TO THE JUNE 18TH, 2024 BOARD OF DIRECTORS MEETING.
I HEREBY CALL THIS MEETING TO ORDER.
THIS MEETING IS BEING BROADCAST OR WEBCAST LIVE TO THE PUBLIC ON ERCOT WEBSITE.
UH, BEFORE WE BEGIN, I'D LIKE TO ASK PUC CHAIR THOMAS GLEASON IF HE WOULD LIKE TO CALL AN OPEN MEETING OF THE PUBLIC UTILITY COMMISSION OF TEXAS TO ORDER.
THIS MEETING OF THE PUBLIC UTILITY COMMISSION OF TEXAS IS HEREBY CALLED TO ORDER TO CONSIDER MATTERS THAT HAVE BEEN DULY POSTED WITH THE SECRETARY OF STATE FOR TODAY, JUNE 18TH, 2024.
UH, BEFORE WE GET GOING, I'D LIKE TO HIGHLIGHT THAT THE ANTITRUST ADMONITION AND SECURITY MAP ARE INCLUDED WITH POSTED MEETING MATERIALS.
UH, THE FIRST ORDER OF BUSINESS ON TODAY'S AGENDA IS ITEM TWO.
NOTICE OF PUBLIC COMMENT, IF ANY.
TODAY'S MEETING AGENDA WAS POSTED PUBLICLY ON JUNE 11TH AND PROVIDED INSTRUCTIONS FOR THE PUBLIC TO, FOR, UH, COMMENTING IN PERSON.
TO DATE, NO ONE HAS EXPRESSED AN INTEREST IN COMMENTING.
IS THAT STILL THE CASE, CHAD? THAT'S CORRECT.
NO ONE HAS OFFICIALLY INDICATED A DESIRE TO SPEAK ON ANY OF THE ITEMS ON THE BOARD AGENDA.
HOWEVER, IF WE GET TO THE TAC REPORT AND THERE ARE QUESTIONS DIRECTED AT ANY OF THE PARTIES THAT HAVE SUBMITTED COMMENTS ON NPR 1224 OR NOGA 2 45, THOSE INDIVIDUALS ARE HERE TO ANSWER ADDITIONAL QUESTIONS IF NECESSARY.
[3. Consent Agenda ]
ITEM THREE, THE CONSENT AGENDA.UH, AND I'LL ASK CHAD TO PROVIDE THE BUDGET IMPACTS OF THE REVISION REQUESTS.
THERE ARE 12 REVISION REQUESTS ON THE CONSENT AGENDA.
TWO OF THEM HAVE BUDGETING IMPACTS NPR 1212, WHICH IS THE CONGESTION MITIGATION USING THE TOPOLOGY.
RECONFIGURATIONS REVISION REQUESTS HAS THE LARGEST IMPACT WITH AN IMPLEMENTATION COST OF 50,000 TO 80,000 IN THE ANNUAL REOCCURRING COST OF 80 180,000 TO 220,000.
THIS NPR ALSO HAS A ONE FTE STAFFING IMPACT, AND NPR 1218 HAS A LESS THAN 20,000 O AND M BUDGET IMPACT.
OTHER THAN THAT, NO OTHER BUDGETARY OR STAFFING IMPACTS ON THE CONSENT AGENDA.
UH, WITH THAT, DOES ANY BOARD MEMBER WISH TO DISCUSS OR REMOVE ANY ITEM ON THE CONSENT AGENDA? MR. CHAIRMAN, I MOVE APPROVAL.
WE HAVE A MOTION FOR APPROVAL.
DO WE HAVE A SECOND? THANK YOU, JULIE.
[4. April 23, 2024 General Session Meeting Minutes ]
NEXT AGENDA, ITEM FOUR, OUR APRIL 23RD, 2024, GENERAL SESSION MEETING MINUTES.THERE'S A DRAFT OF THESE MINUTES IN THE MEETING MATERIALS.
DOES ANYONE HAVE ANY COMMENTS OR WISH TO MAKE A MOTION? I MOVE TO APPROVE.
ALL IN FAVOR? ANY OPPOSED? THAT PASSES.
[5. CEO Update ]
ITEM FIVE IS OUR CEO UPDATE, AND AFTER THAT WE'LL TRANSITION INTO AGENDA ITEM SIX, OUR 2024 SUMMER OUTLOOK, AND DAN WOODFIN AND, AND DAN WOODFIN AND WOODY RICKSON.WILL EACH HAVE A PRESENTATION? UH, PABLO.
THANK YOU FOR YOUR INTEREST AND CONTINUED ENGAGEMENT IN THE IMPORTANT WORK THAT ERCOT CONTINUES TO EXECUTE TODAY.
I'M GOING TO, UH, BRIEFLY DISCUSS EXPECTATIONS FOR THIS SUMMER AT A HIGH LEVEL.
WE'LL HEAR MORE DETAILS ON THAT FOLLOWING.
I'LL REVIEW OUR RELIABILITY ROADMAP.
PABLO, I THINK WE'RE HAVING A WEBCAST PROBLEM, SO WE MAY NEED TO HOLD ON A MINUTE.
SO TODAY I'M GONNA REVIEW, UH, BRIEFLY DISCUSS EXPECTATIONS FOR THIS SUMMER AT A HIGH LEVEL.
I'LL REVIEW OUR RELIABILITY ROADMAP OVER, UH, AND EXPECTATIONS FOR THAT OVER THE NEXT 18 MONTHS,
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FOCUSING ON OUR CURRENT OPERATIONS MARKET CHANGES AND PLANNING REFORMS. AND THEN I'M GONNA PROVIDE A BRIEF UPDATE ON THE RECENTLY FINALIZED EPA GREENHOUSE GAS RULES AND THE AIR, MERCURY AND AIR TOXIC STANDARDS RULE.THE MATS RULE THAT WERE JUST FINALIZED IN A LOOK AT THE, UH, SUMMER MONTHS OVER THE LAST 10 YEARS, UH, YOU CAN SEE THAT THE GROWTH AND DEMAND IS, UH, PRETTY CONSISTENT, UM, ACROSS THE BOARD REFLECTING, UM, PRIMARILY AT THE CORE ECONOMIC GROWTH IN TEXAS AS WELL AS, AS YOU LOOK AT THE LAST, UH, THE SYSTEM ACROSS A FOUR SEASON BASIS.
FROM THE SUMMER PERSPECTIVE, YOU'RE SEEING A PRETTY SIGNIFICANT, A LITTLE BIT HIGHER GROWTH DURING THE SUMMER PERIOD THAN WHAT WE'VE SEEN IN SOME OF THE OTHER SEASONS.
THIS, UH, IT'S A CUMULATIVE ANNUAL GROWTH RATE OF ABOUT TWO AND A HALF TO 3% OVER THE 10 YEAR SUMMER EVALUATION PERIOD.
IT'S A LITTLE BIT HIGHER THAN WHAT WE'VE SEEN ACROSS OTHER SEASONS OVER THAT SAME PERIOD, AND IT'S LIKELY DUE TO THE VERY HOT SUMMERS RECENTLY THAT WE'VE JUST HAD IN 2023.
THAT WAS THE SECOND HOTTEST SUMMER IN TEXAS HISTORY.
UH, 2022 WAS THE THIRD HOTTEST SUMMER IN TEXAS HISTORY, AND ACTUALLY SEPTEMBER OF LAST YEAR WAS THE ABSOLUTE HOTTEST.
SEPTEMBER THE FIRST HOTTEST SEPTEMBER IN TEXAS HISTORY.
SO WE'VE SEEN SOME VERY RECENT HIGH WEATHER THAT HAS HELPED TO BOOST SOME OF THE DEMAND GROWTH NUT GROWTH NUMBERS THAT WE'VE SEEN IN RECENT, UH, YEARS.
WE ARE PREPARED FOR THIS SUMMER, AND I'LL REVIEW SOME OF THE SPECIFIC ACTIVITIES AND FACTS THAT SUPPORT THAT IN THE NEXT COUPLE OF SLIDES.
SO THIS IS THE FIRST SUMMER THAT WE ARE USING THE MONTHLY OUTLOOK FOR RESOURCE ADEQUACY, WHICH IS, WE CALL IT THE MORA, WHICH REPLACED THE SEASONAL ASSESSMENT OF RESOURCE ADEQUACY.
THE SARAH REPORT PRIOR TO THE MORA ERCOT HAD NOT SHARED A PROBABILISTIC RESOURCE ADEQUACY VIEW OF THE GRID SPECIFIC TO EACH SUMMER MONTH TO DATE.
WE'VE PUBLISHED MAURA'S FOR JUNE THROUGH AUGUST, AND FOR THE MAJORITY OF THE DAY IN EACH MONTH, ERCOT HAS LITTLE TO NO RISK OF ENTERING EMERGENCY CONDITIONS.
THE TIGHTEST TIME TO MANAGE THE GRID THROUGHOUT THIS SHUM THIS SUMMER HAS SHIFTED FROM THE PEAK LOAD HOURS IN THE MIDDLE OF THE AFTERNOON TO THE SUNSET HOURS IN THE EVENING FROM SEVEN TO 10:00 PM CENTRAL TIME.
AS THE SOLAR GENERATION DECLINES, AUGUST IS EXPECTED TO SEE A HIGHER RISK FOR TIGHT CONDITIONS IN THOSE EVENING HOURS, SPECIFICALLY IN THE EIGHT TO 10:00 PM WINDOW RELATIVE TO JUNE AND JULY'S RISKS THE HIGHER TEMPERATURE AND THE HIGHER LOADS THAT ARE FORECASTED FOR AUGUST AS A DRIVER FOR THAT.
TYPICALLY, THE WIND GENERATION IN AUGUST IS DECLINES FROM WHAT WE SEE IN JUNE AND JULY.
AND SOLAR GENERATION IS LOWER FOR THE LATE AFTERNOON, EARLY EVENINGS BECAUSE WE START TO SEE SLIGHTLY SHORTER DAYS BEGINNING IN AUGUST, MOVING INTO SEPTEMBER THE SUMMER WEATHERIZATION ATTESTATIONS FROM MARKET PARTICIPANTS WE'RE DUE IN EARLY JUNE, AND INSPECTIONS ARE CURRENTLY UNDERWAY FOR SUMMER INSPECTIONS.
ERCOT ALSO RECENTLY HELD A SUMMER WEATHERIZATION WORKSHOP FOR GENERATION RESOURCES AND TRANSMISSION SERVICE PROVIDERS.
THE ERCOT WEATHERIZATION AND INSPECTION TEAM WITH SUPPLEMENTAL SUPPORT WITH CONTRACT PERSONNEL ANTICIPATES INSPECTING MORE THAN 300 GENERATION RESOURCES AND 300 TRANSMISSION FACILITIES BETWEEN JUNE AND SEPTEMBER FOR THE SECOND YEAR OF OUR SUMMER WEATHERIZATION INSPECTIONS.
HURRICANE SEASON IS OFFICIALLY IN, UH, FORCE RIGHT NOW.
IT'S BETWEEN JUNE 1ST AND NOVEMBER 30TH.
THE 2024 HURRICANE SEASON SHOULD POINT FOR SIGNS OF A POTENTIALLY VERY ACTIVE HURRICANE SEASON THIS SUMMER, THE ERCOT SYSTEM OPERATIONS TRAINING TEAM RECENTLY HELD OUR 40TH ANNUAL OPERATOR TRAINING SEMINAR AND ENERGY EMERGENCY ALERT LOAD SHEDDING DRILL.
AND ADDITIONALLY, THE SYSTEM OPERATIONS TEAM HELD A SUMMER TABLETOP TRAINING EXERCISE ON JUNE 3RD WITH MARKET PARTICIPANTS.
AS WE LOOK AT THE GENERATION GROWTH FROM LAST SUMMER, WE HAVE SEEN MEANINGFUL GROWTH IN NEW GENERATION RESOURCES SINCE LAST SUMMER.
THE GRAPH BELOW SHOWS THOSE ADDITIONS TO THE RESOURCE MIX THAT HAVE TAKEN PLACE FROM OCTOBER 1ST, 2023 THROUGH JUNE 1ST, 2024.
WE HAVE OVER NINE GIGAWATTS OF NEW SOLAR AND BATTERIES THAT HAVE COME ONLINE ABOUT 1.5 GIGAWATTS OF NEW WIND AND A LITTLE OVER 150 MEGAWATTS OF NEW GAS RESOURCES BECAUSE OF THE ADDITIONAL SOLAR AND STORAGE RESOURCES AND THE FORECASTED SUMMER WEATHER CONDITIONS.
THE RISK PROFILE FOR THE GRID THIS SUMMER COMPARED TO THE LAST SUMMER IS ABOUT THE SAME TO SLIGHTLY IMPROVED STORAGE RESOURCES AT SCALE IS STILL A RELATIVELY NEW REALITY IN ERCOT FOR US.
AS WE START TO SEE BATTERIES SATURATE TRADITIONAL ANCILLARY SERVICES LIKE REGULATION UP
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AND DOWN, WE EXPECT MORE OF THEM TO OPERATE IN THE ENERGY MARKET AND IN THE LONGER DURATION ANCILLARY SERVICES LIKE ECRS AND NONS SPEND.AND AS WE GET MORE DATA ON THIS TYPE OF UTILIZATION, HOW ENERGY STORAGE RESOURCES ARE PERFORMING, WE'LL CONTINUE TO UPDATE OUR RISK MODELS LIKE THE MOORE REPORT AND THE CDR REPORTS WITH MORE ACTUAL PERFORMANCE DATA TO BETTER MODEL FUTURE RISK IMPACTS FROM THESE CRITICAL RESOURCES, I WANTED TO SHARE A BRIEF UPDATE ON SOME OF THE KEY ACTIVITIES THAT ARE ONGOING RELATED TO DRIVING IMPROVED RELIABILITY IN THE ERCOT MARKET.
THESE EFFORTS COVER A TIME PERIOD OVER THE NEXT 18 MONTHS WITH SEVERAL KEY MILESTONES BEING ACHIEVED THIS SUMMER.
THE APPROVAL OF THE DRAFT RELIABILITY STANDARD LAST WEEK BY THE PUBLIC UTILITY COMMISSION MARKED A VERY IMPORTANT MILESTONE IN THIS ROADMAP.
WHILE THE DRAFT STANDARD IS OUT FOR COMMENT, THERE ARE TWO ADDITIONAL COMPONENTS TO FINALIZE.
ONE IS THE COST OF NEW ENTRY VALUE THAT IS GONNA BE USED AS WELL AS THE VALUE OF LOST LOAD.
BOTH OF THOSE ARE PROJECTED TO BE FINALIZED BY THE END OF THE SUMMER IN ORDER TO SUPPORT THE COMMISSION'S FINALIZATION OF THE OVERALL RELIABILITY STANDARD.
THE CONTRACT FOR CAPACITY THAT WAS ISSUED TO SUPPORT SUMMER CONDITIONS RESULTED IN A VERY LOW SUBMISSION.
THERE WERE THREE OFFERS IN TOTAL WITH LESS THAN 10 MEGAWATTS OF QUALIFIED DEMAND RESPONSE IN THOSE OFFERS.
BASED ON THIS RESULT, WE ARE PLANNING TO CANCEL THE RFP AND WE'LL HAVE A, A NOTICE OUT LATER THIS WEEK.
TO THAT EFFECT, IT IS CLEAR FROM THE TWO RECENT EXPERIENCES WITH CAPACITY RFPS, THE ONE THAT WE DID JUST FOR THIS LAST SUMMER, AS WELL AS THE ONE THAT WE DID FOR LAST WINTER, THAT WE NEED TO MODIFY THE APPROACH FOR DEVELOPING THE NEXT SET OF DEMAND RESPONSE CAPABILITIES IN THE ERCOT MARKET.
I REMAIN CONFIDENT THAT THERE IS SIGNIFICANT POTENTIAL IN BOTH RESIDENTIAL AND COMMERCIAL AND INDUSTRIAL DEMAND RESPONSE CLASSES, AND THAT WE NEED TO TAKE A MORE IN-DEPTH APPROACH, WORKING WITH MARKET PARTICIPANTS TO DEVELOP A DEMAND RESPONSE PRODUCT THAT WILL BE ADDITIVE TO THE RELIABILITY CAPABILITIES AT AN ERCOT MARKET LEVEL.
WE CONTINUE TO WORK ON ALTERNATIVES TO MITIGATE THE RISKS ASSOCIATED WITH THE NEW SOUTH TEXAS IOLS, INCLUDING EVALUATING CHANGES TO THE SHADOW PRICE CAPS AND WORKING WITH THE TRANSMISSION OPERATORS ON DYNAMIC LINE RATINGS TO IMPROVE THE THROUGHPUT ON EXISTING LINES.
I'VE DESCRIBED THE RELIABILITY STOOL AT ERCOT AS BUILT ON SUPPLY TRANSMISSION AND DEMAND RESPONSE.
THE DEMAND RESPONSE STUDY THAT WE WORKED ON WITH TEXAS A AND M SHOWS MEANINGFUL POTENTIAL FOR INCREMENTAL DEMAND RESPONSE IN THE STATE COMMISSIONER JACKSON AND THE NEWLY APPOINTED DIRECTOR OF ENERGY EFFICIENCY AT THE PUCT HAVE INITIATED A PROJECT TO EVALUATE A NEW DEMAND RESPONSE PROGRAM AND ARE SOLICITING INPUT FROM MARKET PARTICIPANTS TO HELP ADVANCE THIS PROGRAM TRACK, WE'RE ADVANCING THE SUITE OF MARKET DESIGN COMPONENTS THAT RESULTED FROM THE PRIOR LEGISLATIVE SESSION, INCLUDING THE DESIGN OF PCM AND DRRS, THE DISPATCHABLE RELIABILITY RESERVE SERVICE, AND THE ASSOCIATED COST STUDY OF THE TOTAL SUITE OF SOLUTIONS THAT WILL HELP TO INFORM A GO FORWARD RECOMMENDATION FOR A MARKET SOLUTION THAT WILL SUPPORT THE ENERGY ONLY COMPETITIVE MARKET, WHILE ALSO SENDING THE APPROPRIATE LONG-TERM PRICE SIGNALS THAT WILL INCENTIVIZE THE DEVELOPMENT OF LONG DURATION DISPATCHABLE SUPPLY RESOURCES.
I'D LIKE TO BRIEFLY TOUCH ON THE IMPACT OF THE RECENTLY APPROVED EPA RULES.
IN APRIL, THE ENVIRONMENTAL PROTECTION AGENCY FINALIZED SEVERAL RULES THAT IMPACT COAL AND GAS UNITS, INCLUDING THE GREENHOUSE GAS RULE AND THE MERCURY AND AIR TOXIC STANDARDS RULE.
THE GREENHOUSE GAS RULE IMPOSES MUCH STRICTER CO2 EMISSIONS LIMITS ON EXISTING COAL AND ON CERTAIN NEW GAS UNITS LIMITS THAT ARE BASED ON CARBON CAPTURE AND SEQUESTRATION TECHNOLOGY, WHICH REMAINS UNPROVEN AT SCALE ON GAS GENERATION.
THE MATS RULE SIGNIFICANTLY LOWERS THE MERCURY EMISSIONS LIMITS FOR LIGNITE UNITS AND PARTICULATE MATTER EMISSION LIMITS FOR ALL COAL UNITS.
TEXAS HAS JOINED OTHER STATE GROUPS CHALLENGING BOTH OF THESE RULES IN COURT, IN SUPPORT OF THE STATE'S MOTION TO STAY THE GREENHOUSE GAS RULE, ERCOT PROVIDED A DECLARATION THAT STATES THAT THE RULE WILL LIKELY LEAD TO THE RETIREMENT OF ALL COAL-FIRED PLANTS.
THAT, SO 13,600 MEGAWATTS OF TOTAL SUMMER CAPACITY AND CONSTRAINED THE DEVELOPMENT OF NEW NATURAL GAS FIRED PLANTS EXACERBATING THE RELIABILITY RISKS GIVEN FORECASTED LOAD GROWTH AND THE NEED FOR DISPATCHABLE UNLIMITED DURATION CAPACITY.
THE TIMING OF WHEN THESE COAL PLANTS COULD CLOSE WOULD BE BASED ON THE EFFECTIVE DATES OF WHEN THESE REQUIREMENTS WOULD COME INTO PLAY, WHICH BEGIN IN 2030 AND BEYOND.
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ERCOT PROVIDED A SIMILAR DECLARATION IN SUPPORT OF THE STATE'S MOTION TO STAY THE MATS RULE, GIVEN THE IMPACT ON COAL UNITS AND ESPECIALLY THE LIGNITE UNITS, WHICH MAKE UP ABOUT 6,500 MEGAWATTS OF THE COAL FLEET RULINGS ON THE, ON THE MOTIONS TO STAY ARE EXPECTED SOMETIME THIS SUMMER.I'M GONNA PAUSE THERE TO BEFORE FINISHING IF THERE'S ANY QUESTIONS ON THE UPDATE FOR OUR SUMMER READINESS AND OUR SUMMER ACTIVITIES, AS WELL AS ON THE EPA AND GREENHOUSE CLASS RULES.
THEN I WILL GO AHEAD AND, UH, CLOSE LIKE I ALWAYS DO WITH, UH, WITH THANKS.
I'D LIKE TO ACKNOWLEDGE THAT, UH, THAT OUR ERCOT HELD OUR FIRST ANNUAL INNOVATION SUMMIT ON MAY 21ST.
IT ATTRACTED ATTENTION AND INTEREST FROM LITERALLY AROUND THE GLOBE WITH MORE THAN 300 ATTENDEES IN PERSON AND OVER 650 LIVE STREAMING THE EVENT, RAPID GRID TRANSFORMATION IS SHAPING THE FUTURE OF OUR GRID, NOT JUST IN TEXAS, BUT WELL BEYOND.
AND ERCOT IS AT THE FOREFRONT OF THESE CONVERSATIONS.
WE ARE SEEING THE TRANSFORMATION IN OUR OPERATIONS TODAY AHEAD OF MANY OTHER GRIDS WHO ARE SEEING IT ON THE UPCOMING HORIZON.
WE HAD THE HEARING, WE HAD THE PRIVILEGE OF HEARING FROM SOME OF THE BRIGHTEST MINDS IN THE INDUSTRY, THOUGHT LEADERS, INNOVATORS, EXPERTS, AND MORE IMPORTANTLY DOERS WHO CHALLENGED US TO THINK DIFFERENTLY AND PUT FORTH ACTIONABLE IDEAS.
PANEL TOPICS THAT WE COVERED INCLUDED ESSENTIAL RELIABILITY SERVICES, DEMAND FLEXIBILITY, ENERGY STORAGE, UNCERTAINTY MANAGEMENT, TRANSMISSION PLANNING, AND TECHNOLOGY TRENDS.
THE ENTIRE CONFERENCE ON A CAN BE SEEN ON OUR INNOVATION SUMMITPAGE@ERCOT.COM SLASH SUMMIT.
WE COULD NOT HAVE PULLED OFF THIS SUMMIT WITHOUT OF ALL, WITHOUT ALL OF THE KEYNOTE SPEAKERS, ALL OF THE PANELISTS AND MODERATORS AND ALL OF THE BEHIND THE SCENES EMPLOYEES THAT SUPPORTED THIS EFFORT IN SIGNIFICANT, SIGNIFICANT FASHION.
AND I'D LIKE TO CALL OUT A SPECIAL RECOGNITION TO THEN KAT TETI FOR HIS TIRELESS EFFORTS TO BRING THIS CONCEPT TO LIFE.
AND WE LOOK FORWARD TO EXECUTING, UH, THE NEXT ITERATION, THE SECOND ANNUAL INNOVATION SUMMIT OF KOT SOMETIME NEXT YEAR, DEAR.
SO WITH THAT, I WILL CONCLUDE MY COMMENTS UNLESS THERE ARE ANY QUESTIONS.
AND, UH, I I WANT TO ECHO YOUR COMMENTS ABOUT THE INNOVATION SUMMIT.
I ENJOYED MY PARTICIPATION, ALTHOUGH IT WAS VIRTUAL.
UM, BACK TO THE EPA, UH, PAGE, IF WE CAN FOR JUST A MINUTE.
THIS IS DEVASTATING TO RELIABILITY, UH, NOT ONLY IN TEXAS, BUT ALL ACROSS THE UNITED STATES.
AND WHEN I LOOKED AT THE RULE MAKINGS THAT THAT, UH, THE EPA CAME UP WITH, IT SEEMED LIKE THEY WERE USING SORT OF A, AN ALTERNATIVE FICTIONAL ANALYSIS TO SHOW THAT, THAT THEIR RULE MAKINGS HAD NO IMPACT ON RELIABILITY.
CAN YOU WALK US THROUGH HOW THEY CAME TO THAT AND YES.
THE, THE ANALYSIS THAT EPA PERFORMS DOES NOT REFLECT ANY REAL TIME OPERATIONAL RISK OF OPERATING THE GRIDS IN THE UNITED STATES.
THEY DO A VERY LIMITED ANALYSIS THAT EFFECTIVELY THEY, IT'S LIKE A CAPACITY ANALYSIS, AND WHAT THEY DO IS THEY SUM WHAT THEY PROJECT THE EXPECTED CAPACITY TO BE AVAILABLE WITHIN THE REGIONS THAT ARE AFFECTED BY THE RULE, AND THEY COMPARE THAT AGAINST THE FORECASTED LOADS FOR THOSE REGIONS DURING THOSE TIME PERIODS.
WHAT THAT DOES NOT REFLECT IS THE OPERATION REALITY OF HOW THAT CAPACITY PERFORMS AROUND THE CLOCK.
SO THAT INCLUDES ADDING CAPACITY FOR SOLAR, EVEN IF SOLAR IS NOT AVAILABLE AT NIGHT, IT INCLUDES THE ADDITION OF WIND, EVEN IF WIND IS NOT BLOWING.
IT INCLUDES ALL CAPACITY THAT WOULD BE INSTALLED IN A REGION WITHOUT ANY CONSIDERATION FOR THE AROUND THE CLOCK REQUIREMENTS TO ACTUALLY SERVE ENERGY 24 HOURS A DAY.
IT'S A VERY THIN AND SHALLOW ANALYSIS THAT DOES NOT REFLECT RELIABILITY EXPECTATIONS AND NEEDS, AND THEREFORE CAN'T BE LEANED ON IN AND OF ITSELF TO REFLECT THE EXPECTED PERFORMANCE OR THE RISK PROFILE OF A GRID POST-IMPLEMENTATION OF THESE RULES.
WHEN I READ, UH, THEIR ANALYSIS AND ALSO THE ANALYSIS THAT WAS PERFORMED BY OTHER PARTIES, THEY BASICALLY IGNORED PEAK, PEAK LOAD OR NET PEAK LOAD AT TIMES WHEN YOU HAVE SOLAR RAMP.
THEY JUST BASICALLY IGNORED IT.
SAID, THAT'S NOT GONNA HAPPEN.
AND THAT'S, YOU KNOW, I THINK IT'S IMPORTANT FOR THE AUDIENCE OF, OF THIS MEETING TO UNDERSTAND THAT'S NOT THE REAL WORLD.
THAT'S NOT THE TEXAS GRID, THAT'S NOT ERCOT, THAT'S NOT THE UNITED STATES GRID IN ANY STATE.
WE FULLY, WE FULLY EXPECT OVER TIME FOR OLDER AND LESS
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EFFICIENT RESOURCES TO BE REPLACED BY NEWER, MORE EFFICIENT RESOURCES.THAT IS THE WAY THAT A HEALTHY MARKET OPERATES.
IT'S THE WAY THAT THE TEXAS MARKET OPERATED WHEN IT FIRST WENT TO ITS COMPETITIVE STRUCTURE.
AND, BUT THAT NEEDS TIME TO ENABLE THAT TRANSITION TO HAPPEN, ESPECIALLY DURING PERIODS OF HIGH GROWTH.
WHEN YOU'RE IN A PERIOD OF HIGH GROWTH, IT'S A UNIQUELY DIFFERENT CIRCUMSTANCE TRYING TO MANAGE THAT BALANCE OF WHEN OLDER, LESS EFFICIENT RESOURCES CAN COME OFF THE GRID AND GET REPLACED WITH NEWER RESOURCES.
AND THROUGHOUT ALL OF THAT, YOU NEED TO BE ADJUSTING THE EXPECTATIONS AROUND ACTUAL EXECUTION AND OPERATION OF THE RESOURCES THAT ARE ON THAT GRID.
TEXAS'S GRID IS CHANGING RAPIDLY.
WE'RE SEEING MOST OF THE GROWTH ON OUR GRID DRIVEN BY INTERMITTENT RESOURCES AND THE NEW ENERGY STORAGE RESOURCES THAT ARE COMING ONLINE.
THEY HAVE VERY DIFFERENT CHARACTERISTICS THAN THE TRADITIONAL OLDER THERMAL DISPATCHABLE RESOURCES.
SO THE TRANSITION IS MORE COMPLEX AND IT INTRODUCES MORE RISK WHEN YOU'RE LOSING RESOURCES OF ONE KIND THERMAL DISPATCHABLE AND REPLACING THEM WITH RESOURCES OF ANOTHER KIND.
THE EPA ANALYSIS DOES NOT BRING THAT ANALYSIS INTO PLAY WHEN THEY DO THEIR RISK ANALYSIS.
AND IT'S VERY IMPORTANT THAT WE DO THAT AND WE, AND WE DO, AND WE SUPPORT THE ANALYSIS AND PROVIDE INFORMATION BACK TO THE EPA AS WELL AS TO THE FEDERAL GOVERNMENT ON WHAT WE EXPECT THE REAL IMPACTS WILL BE OF THESE RULES IF THEY'RE, UH, IF THEY'RE COMPLETED.
I THINK, I THINK WE HAVE ONE OTHER COMMENT FROM PEGGY.
AND, AND THIS MAY, YOU MAY WANNA PUT THIS OVER TO COMMISSIONER JACKSON, BUT YOU, YOU REFERENCED, UH, THE IMPORTANT WORK THAT SHE'S SPEARHEADING AT THE PUC ON DEMAND RESPONSE.
CAN YOU GIVE US AN IDEA OF THE TIMING OF THAT WHEN YOU THINK, UH, SOMETHING WILL BE, UH, I GUESS PRESENTED TO PUC AND THEN WORK ITS WAY BACK TO ERCOT? WELL, WE DO HAVE A GROUP THAT'S WORKING ON THIS, WORKING VERY CLOSELY WITH ERCOT.
AS YOU KNOW, THE, UH, TEXAS A AND M STUDY IS, UM, NEARING COMPLETION.
AND SO WE'LL BE SITTING DOWN KIND OF WORKING WITH THEM.
BUT, UM, OUR, I GUESS STRETCH GOAL IS THAT WE WANT TO, YOU KNOW, LOOK AT THE LAY OF THE LAND, COME UP WITH RECOMMENDATIONS THAT HOPEFULLY WE CAN BRING FORTH, UM, DURING THE NEXT LEGISLATIVE SESSION.
I'M VERY EXCITED ABOUT THE MOMENTUM WE'RE BUILDING ON THIS, UH, ON THIS IMPORTANT, UH, UH, PILLAR OF THE STOOL OF RELIABILITY, AND I THINK THERE'S REAL OPPORTUNITY HERE.
I THOUGHT COMMISSIONER JACKSON? YEP.
[6. 2024 Summer Outlook ]
DAN, I THINK IS NEXT.GOOD MORNING SUPPLEMENT, WHAT PABLO HAS ALREADY TALKED ABOUT RELATED TO, UH, SUMMER PREPARATIONS AND WHAT WE'RE EXPECTING THIS SUMMER.
UH, START, I'LL START OFF WITH TALKING ABOUT THE WEATHER.
UM, OUR METEOROLOGISTS ARE THINKING THAT THIS SUMMER IS GONNA BE ONE OF THE HOTTER THAT WE HAD ON RECORD, UH, PROBABLY NOT AS HOT AS LAST SUMMER, WHERE WE JUST HAD, YOU KNOW, LOTS OF, LOTS OF HOT TEMPERATURES.
WE'VE ACTUALLY HAD QUITE A FEW OF THE, THE SUMMERS WITHIN THE LAST FEW YEARS THAT HAVE BEEN WELL ABOVE NORMAL.
AND SO WE EXPECT THIS SUMMER TO FIT IN WITH THAT.
UM, ALTHOUGH, LIKE I SAID, PROBABLY NOT AS HOT AS LAST SUMMER.
IN FACT, HE IS THINKING IT'S MORE LIKE ONLY A 25% CHANCE OR SO.
AND GIVEN WHAT WE'VE SEEN IN JUNE, I THINK THAT, THAT WE'RE TRENDING THAT WAY.
UM, FROM A, UM, PRECIPITATION PERSPECTIVE, EL NINO IS KIND OF IN THE PROCESS OF GOING AWAY.
LA NINA IS, IS BUILDING, ALTHOUGH IT MAY NOT BE HERE FOR SUMMER.
AND, UH, SO THAT WOULD MEAN THAT TEXAS AS A WHOLE TYPICALLY WOULD EXPECT TO SEE, UM, LOWER PRECIPITATION DURING, DURING THE SUMMER, UM, ESPECIALLY THE FURTHER YOU GO INLAND.
AND I THINK SOME OF THE, IF YOU SEE THE PATTERN THERE ON THE, THE LOWER RIGHT, YOU SEE IT'S WETTER ALONG THE COAST, DRIER INLAND.
PART OF THAT IS THAT IT'S ALSO EXPECTED TO BE A VERY ACTIVE HURRICANE SEASON.
AND OF COURSE, WE'VE GOT ONE TROPICAL, UH, SYSTEM DOWN IN THE GULF NOW.
I DON'T THINK THEY'VE NAMED IT ALBERTO YET, BUT IT'S, UH, PROBABLY GOING TO BE, WE'RE LIKELY TO SEE, ESPECIALLY TOMORROW, UH, SIGNIFICANT RAIN BANDS COMING INTO TEXAS.
AND SO YOU KINDA SEE THAT PATTERN DEVELOPING, EVEN THOUGH THESE SLIDES WERE PUT TOGETHER QUITE SOME TIME AGO, WE'D EXPECT IT TO CONTINUE FOR THE REST OF THE SUMMER.
DAN, UH, SORRY TO INTERRUPT, BUT SINCE YOU'RE ON THIS POINT, UH, CAN YOU TELL, EXPLAIN A LITTLE BIT WHAT THE ERCOT ROLE IS
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IN HURRICANE PREPAREDNESS GIVEN THE UNUSUAL OR AMOUNT OF HURRICANES THAT ARE PREDICTED? UH, PABLO MENTIONED, I BELIEVE THE TRAINING THAT WE, WE JUST DID.UH, SO WHAT, WHAT ELSE IS DONE? SO EVERY OTHER YEAR WE DO DO, DO A HURRICANE, UH, PREPAREDNESS.
IT CYCLES BETWEEN THAT AND A, A SEVERE WEATHER DRILL.
AND, UM, SO IT'S, IT'S REALLY A COORDINATION AMONGST THE, REALLY THE, THE SYSTEM MARKET PARTICIPANTS TO, TO PLAN FOR THAT.
UM, OUR, OUR RESPONSE IN THE EVENT OF A HURRICANE IS TO REALLY JUST MAINTAIN THE RELIABILITY OF THE SYSTEM AS A WHOLE TO THE DEGREE WE CAN BE PREPARED GOING INTO IT.
THERE'S A SERIES OF STEPS THAT ARE IN OUR PROCEDURES TO PREPARE, UM, AND GIVE WARNINGS TO AHEAD OF TIME, MAKE SURE ALL THE OTHER MARKET PARTICIPANTS ARE PREPARED AS WELL.
UM, THE SPECIFIC STEPS DEPEND ON WHAT KIND OF SYSTEM IT'S LIKELY TO BE.
UM, IN, IN THIS CASE, OF THE ONE, I'LL JUST USE THIS AS AN EXAMPLE, THE ONE THAT'S GOING, IT PROBABLY IS GOING TO GO INTO MEXICO.
THE WIND, UH, WIND, WIND PART IS NOT GONNA BE AS SEVERE HERE, BUT WE'RE LIKELY TO GET LOTS OF FLOODING AND OR, OR LOTS OF RAIN THAT COULD LEAD TO FLOODING.
AND SO THAT'S REALLY THE, THE PART OF THAT.
UM, WE WORK, UH, WITH THE PUC THROUGH THE STATE OPERATIONS CENTER, UH, AND TEXAS DEPARTMENT OF EMERGENCY MANAGEMENT TO, TO HELP THEM KNOW WHAT WE'RE SEEING ON THE POWER SYSTEM AND THEN RESPOND TO ANYTHING THAT WE NEED TO DO TO COORDINATE WITH ALL THOSE OTHER ENTITIES.
SO FROM A RESOURCE ADEQUACY PERSPECTIVE, UH, PABLO ALREADY COVERED THIS, AND I THINK CHRISTIE'S GONNA COVER THIS, UH, ALSO TALKING ABOUT THE MORA IN THE, UH, THE, UH, HER PRESENTATION.
BUT FROM A SUMMARY PERSPECTIVE TO INCLUDE THAT WE, UH, ARE EXPECTING SUFFICIENT GENERATION IN, IN MOST HOURS.
UM, HOWEVER, THERE IS MORE HIGHER RISK, ESPECIALLY AS WE'VE TALKED ABOUT A LOT IN THE SUNSET HOURS AFTER THE SOLAR GENERATION GOES AWAY, WHEN THE DEMAND IS STILL HIGH ON THOSE VERY HOT DAYS.
THAT'S KIND OF OUR HIGHEST RISK, UH, TIME.
UM, IN GENERAL, UM, WHETHER WE'VE GOT ENOUGH CAPACITY OR NOT IS GONNA BE DEPENDENT ON, ON LARGE PART, ON THE NUMBER OF OUTAGES THAT WE HAVE AT DURING THAT, THOSE, UH, SOLAR RAMP DOWN HOURS AND THE AMOUNT OF WIND THAT'S BLOWING OR NOT BLOWING DURING THOSE TIMES.
AND SO THAT'S KIND OF, AS WE'VE TALKED ABOUT IN PAST SEASONS, THAT'S KIND OF THE THREE CRITICAL, UH, PIECES TO THE PUZZLE.
UM, WE HAVE AN ADDITIONAL PIECE THIS YEAR THAT WE SAW LAST YEAR, AND IT'S LIKELY TO CON, TO CONTINUE, WHICH IS THE CONSTRAINTS IN SOUTH TEXAS THAT MAY LIMIT US FROM BEING ABLE TO USE ALL OF THE AVAILABLE GENERATION IN THAT WE CAN'T GET IT OUT OF SOUTH TEXAS WHEN THE DEMAND IN NORTH TEXAS IS VERY HIGH.
UM, AND SO THERE IS A SLIGHTLY ELEVATED RISK THAT'S REFLECTED IN THE MORE NUMBERS THAT, THAT CHRISTIE WILL TALK ABOUT, UM, ALREADY, UM, FROM A, SO THAT'S ONE PIECE OF THE TRANSMISSION PUZZLE FROM A, FROM A TRANSMISSION PERSPECTIVE.
OVERALL, THOUGH, WE DON'T SEE ANY, UH, MAJOR WIDE AREA RELIABILITY, UH, ISSUES IN OUR STUDIES THAT WE DO TO PREPARE FOR SUMMER.
UM, WE COULD SEE CONGESTION WHERE DURING PERIODS WHERE WE'VE GOT SUFFICIENT GENERATION, BUT WE CAN'T RUN THE ABSOLUTE CHEAPEST GENERATION AT CERTAIN TIMES, ESPECIALLY IN AREAS OF THE PANHANDLE WEST TEXAS AND THE RIO GRANDE VALLEY.
AND REALLY A LOT OF THAT IS WHEN THE WIND IS BLOWING, BEING ABLE TO EXPORT ALL THE WIND AND SOLAR OUT OF THOSE AREAS.
WE'VE GOT A, UM, THE, THE SOUTH TEXAS CONSTRAINTS THAT, THAT POPPED UP LAST YEAR THAT, THAT I MENTIONED EARLIER, THAT WE, WE WILL CONTINUE TO SEE THOSE, THOSE ARE, ARE, ARE, UM, REALLY IN BOTH DIRECTIONS FROM AN AREA SOUTH OF SAN ANTONIO BEING ABLE TO EXPORT, UH, POWER THAT IF IT'S AVAILABLE DURING VERY HIGH DEMAND CONDITIONS OUT OF SOUTH TEXAS.
AND THEN IF WE HAVE SUFFICIENT GENERATION IN THE NORTH, BUT WE'RE TIED IN THE SOUTH, BEING ABLE TO TRANSFER POWER INTO TO THOSE AREAS.
AND SO NORMALLY WE CAN, WE MANAGE THAT THROUGH OUR SYSTEM ECONOMIC DISPATCH, UH, BUT WHEN WE GET INTO VERY TIGHT CONDITIONS WHERE WE'RE JUST KIND OF OUTTA CAPACITY, WE NEED TO USE EVERY BIT OF IT.
THEY MAY, THEY MAY, UM, UH, BE BINDING.
UM, WE DID HAVE, UH, SEVERAL, UH, MAJOR TRANSMISSION LINES THAT WERE KNOCKED OUT BY TORNADOES AND OTHER, UH, SEVERE WEATHER, UH, IN MULTIPLE AREAS.
[00:30:01]
WEST TEXAS, KINDA THE NORTH OF THE DFW AREA IN HOUSTON, AND THEN IN THE TEMPLE AREA, UH, DURING THE SPRING.BUT I, WE CHECKED THIS MORNING, MOST OF THOSE ARE BACK.
THERE'S STILL, UH, UH, COUPLE THAT AREN'T INCLUDING ONE IN THE TEMPLE AREA THAT'S SUPPOSED TO BE BACK BY THE END OF THIS MONTH, BUT IT IS BINDING ON SOME DAYS.
SO THE TRT TRANSMISSION OWNERS HAVE WORKED VERY HARD TO GET MOST OF THOSE BACK IN SERVICE.
AND, UH, WE'LL BE, HAVE THEM BY THE TIME WE GET INTO KIND OF THE, THE HOTTEST PART OF SUMMER.
UM, WE'VE, UH, IMP SO BATTERIES ARE STILL A FAIRLY NEW PHENOMENON.
WE'RE ADDING NEW TOOLS TO BE ABLE TO ASSESS THE, IN THAT THE BATTERIES ARE A LITTLE DIFFERENT THAN OUR NORMAL CAPACITY IN THAT THEY HAVE A LIMITATION ON HOW LONG THEY CAN OPERATE AS THEIR CHARGES DEPLETED.
AND WE'VE PUT IN PLACE SOME NEW TOOLS TO PREPARE FOR SUMMER, UH, TO BE ABLE TO TAKE INTO ACCOUNT IN OUR FORWARD-LOOKING ASSESSMENTS AND ALSO OPERATIONALLY WHEN WE RUN INTO, UH, WHERE, WHERE WE'RE ACTUALLY USING THOSE, UH, THAT STATED CHARGE TO MAKE SURE THAT WE'RE APPROPRIATELY ASSESSING HOW IT'S GETTING DRAWN DOWN, WHEN, WHEN THOSE BATTERIES MAY RUN OUT OF, OF, UH, STATE OF CHARGE.
AND SO WE'VE, UH, THE UPPER LEFT HERE IS KIND OF OUR ASSESSMENT THAT WE LOOK AT FOR DAY AHEAD.
DO WE HAVE ENOUGH CAPACITY OF DIFFERENT TYPES TO BE ABLE TO SERVE THE LOAD ON THAT DAY? WE'VE ADDED UP FOR OUR INTERNAL TOOLS, AND WE HAVEN'T ADDED THIS TO THE WEBSITE YET, BUT WE'RE THINKING ABOUT IT.
UM, BUT, UH, WHERE THERE'S A, A TURQUOISE BAND AND IT LOOKS GREEN UP THERE, UH, ON TOP, THAT IS REALLY THE CAPACITY THAT'S COMING FROM THE, THE, THE BATTERIES.
AND OF COURSE, THAT'S KIND OF A FLAT AREA BECAUSE IT'S ASSUMED THAT THAT CAPACITY WILL BE AVAILABLE ALL THE TIME.
BUT IF WE ACTUALLY GET INTO DEPLETING IT WHERE IT'S ACTUALLY BEING USED, IT WON'T LAST BUT NOW OR TWO, DEPENDING ON THE, THE, THE CHARACTERISTICS OF THE BATTERIES.
SO WHEN OUR, OUR DEMAND LINE, WHICH IS THE RED DOTTED LINE THERE, GETS UP INTO THAT AREA WHERE WE'RE DEPENDING ON THE, WE'VE USED ALL THE OTHER CAPACITY, WE'RE DEPENDING ON THE BATTERIES, IT'LL ALLOW US TO BETTER ASSESS HOW LONG ARE THEY GONNA LAST OR WE, DO WE REALLY HAVE ENOUGH TO FOR THAT TIME PERIOD OR NOT IN TERMS OF THE ENERGY THAT THEY WILL SUPPLY.
AND THEN THE, THE BOTTOM LEFT TOOL IS MORE LOOKING AT OPERATING RESERVES.
WHEN WE GET VERY TIGHT, ARE WE, IF WE DEPLOYED THOSE OPERATING RESERVES, HOW LONG WOULD THEY LAST? AND YOU CAN SEE THAT IN THAT BLUE BOX, IT SHOWS THAT IF WE DEPLOYED THEM ALL RIGHT NOW, THAT'S HOW QUICKLY THEY WOULD BE, THE ENERGY WOULD BE DEPLETED.
AND SO IT'S GOOD FOR OUR OPERATORS TO BE ABLE TO KNOW FROM A SITUATIONAL AWARENESS PERSPECTIVE, NOT JUST THE CAPACITY'S THERE, BUT THE RESERVES ARE THERE, BUT ALSO TO KNOW HOW LONG THEY'LL LAST.
SO IT'S A, IT'S KIND OF A, A NEW THING GOING INTO SUMMER.
WE'VE ALSO, UH, AND I, WE DO THIS EVERY YEAR, TALK ABOUT SOME OF THE OPERATIONAL RULE CHANGES THAT ARE LIKELY TO BE, UH, THAT WILL BE IMPLEMENTED FOR THIS SUMMER AND ARE LIKELY TO MAKE A CHANGE TO HOW WE OPERATE THE SYSTEM.
UH, ONE OF THESE IS, IS, UM, RELATED TO THE CONTROLLING THE RENEWABLE RESOURCES THAT ARE BEHIND A STABILITY LIMIT.
UH, WE HAVE TO START BINDING ON THAT, THOSE CON THOSE, UH, GENERATORS TO MAKE SURE THAT IF THE WIND PICKS UP, THEY DON'T GO OVER THE LIMIT, UH, AHEAD OF WHERE THE LIMIT IS.
WE'VE PUT IN PLACE A RULE THAT WILL ALLOW US TO DO THAT MORE EFFICIENTLY AND MAYBE BE ABLE TO LET MORE POWER OUT OF THOSE, UH, THOSE BEHIND FROM, BEHIND THOSE CONSTRAINTS.
AND SO THAT'LL BE IN PLACE FOR THIS SUMMER.
UM, NPR 1186, AS YOU KNOW, UH, WE, YOU'VE SEEN THAT A COUPLE OF TIMES BACK EARLIER THIS YEAR, UH, RELATED TO MANAGEMENT OF THE STATE OF CHARGE OF BATTERIES AND KEEPING TRACK OF THAT, ALLOWING SCAD TO, UH, U BE USED TO MAINTAIN THAT STATE OF CHARGE, THAT WHEN THEY'RE PROVIDING ANCILLARY SERVICES THAT'LL BE IMPLEMENTED.
UM, AS PART OF THE DISCUSSION OF 1186, WE ALSO TALKED ABOUT NPR 1196, WHICH HAS TO DO WITH THE, UH, MAKING SURE THAT PEOPLE ARE, ARE, WE'RE APPROPRIATELY ACCOUNTING FOR WHETHER PEOPLE ARE KEEPING THEIR STATE OF CHARGE, OR, SORRY, THIS ONE'S NOT RELATED TO STATE OF CHARGE, IT'S RELATED TO N GENERAL.
UH, ARE PEOPLE PROVIDING THE CAPACITY THAT THEY NEED TO PROVIDE THEIR ANCILLARY SERVICES? AND WE'LL DO THAT MORE AUTOMATICALLY, UH, IN THE FUTURE.
AND SO THESE THINGS, AND, AND A FEW OTHERS HERE, INCLUDING NPR 1224, WHICH WE'RE GONNA TALK ABOUT LATER, THAT WILL HELP US, UM, ON BE BE CONSISTENT AND, UH, UH, EARLIER IN DEPLOYING ECRS, UH, THAN WHEN WE RELEASE THAT IN TIGHT PERIODS.
ALL OF THESE ARE, ARE CHANGES THAT WE'LL BE MAKING,
[00:35:01]
UH, THAT WILL BE IN PLACE FOR SUMMER.SOME OF THEM ARE ALREADY IN PLACE, BUT SHOULD HELP US OPERATE THE GRID MORE RELIABLY AND EFFICIENTLY, UH, DURING THE SUMMER.
AND WITH THAT, I'LL TURN IT OVER TO WOODY TO TALK ABOUT THE MARKET SIDE OF THINGS, BUT I'M HAPPY TO ANSWER ANY QUESTIONS.
DAN, THANKS FOR YOUR PRESENTATION.
WHAT DOES KEEP YOU UP AT NIGHT? THINKING ABOUT THE SUMMER AHEAD, WHAT, WHAT DO YOU FEEL ARE THE, THE BIGGEST, UM, AREAS TO WATCH AND ANTICIPATE? I THINK, UM, THE, UM, THE, THE PRIMARY ONE IS JUST DO WE HAVE, UM, DEMAND VERSUS SUPPLY? DO WE HAVE ENOUGH TO COVER THAT? WHICH WE'VE DONE MUCH MORE WORK THROUGH THE MORA AND OTHER PLACES TO PROBABILISTICALLY ASSESS THAT.
UM, WE'RE, UM, IN MY OPERATIONS REPORT, WE'LL TALK A LITTLE BIT ABOUT, UH, DEMAND RESPONSE.
AND WE'RE, WE'RE GETTING TO THE POINT WHERE, UM, WE, IF WE GET SUFFICIENT DEMAND RESPONSE FROM, UH, THE LARGE FLEXIBLE LOADS, THE, THE CRYPTO MINERS, THE, UH, AND OTHER FOLKS THAT, THAT REALLY PROVIDE SIGNIFICANT DEMAND RESPONSE WILL BE OKAY, BUT THAT WE DON'T HAVE AS MUCH VISIBILITY INTO THAT AS WHAT WE, UM, UH, WOULD LIKE A LOT OF TIMES.
AND SO, UH, WE'RE THAT SOME, SOME DAYS THAT'S, UH, A LITTLE NERVE WRACKING TO KNOW, ARE YOU GOING TO GET THAT DEMAND RESPONSE ON A PARTICULAR DAY? BECAUSE IF YOU GET IT, WE'VE GOT ENOUGH ON OTHER DAYS, MAYBE WE DON'T.
SO I THINK THAT'S KIND OF THE, THE THING THAT'S, THAT'S THE MOST, UH, CONCERNING OR WORRISOME AT THIS POINT.
SO I'VE GOT A QUICK, UH, UPDATE ON SUMMER MARKETS AND CREDIT.
SO THERE'S NO, UH, BOARD VOTING ITEMS HERE.
UH, SOME OF THE KEY TAKEAWAYS ARE, WILL, THIS WILL BE THE FIRST SUMMER WE SEE THE, UH, NEW MULTI-STEP OPERATING RESERVE DEMAND CURVE PRICE FLOORS.
WE'LL SEE IF THAT HAS AN EFFECT ON THE NUMBER OF UNITS THAT ARE RUCKED.
UM, DURING THE FIRST QUARTER OF 2024, WE SEE SOME NATURAL GAS PRICES CONVERGING WITH WHAT WE SAW LAST YEAR.
WE'LL, WE WILL TALK ABOUT THAT.
AND, UH, WE'LL ALSO LOOK AT THE FORWARD ENERGY PRICES AND HOW THEY'RE TRENDING THIS YEAR VERSUS LAST YEAR.
SO THE ORDC CURVE, SO BACK IN NOVEMBER OF LAST YEAR, UH, THE ORDC WAS MODIFIED TO INCLUDE A MULTI-STEP PRICE FLOORS.
SO WHEN THE ONLINE RESERVES ARE BELOW 6,500, THE UH, PRICE FLOOR IS $20 PER MEGAWATT HOUR.
IF IT'S BETWEEN 65 AND 7,000, IT'S $10.
SO THESE MEASURES WERE MEANT TO, UH, TO INCENT GREATER SELF-COMMITMENT OF UNITS, HOPEFULLY REDUCE THE NUMBER OF ROCKS TO DATE.
THOSE FLOORS HAVEN'T HAD MUCH OF AN EFFECT, BUT, UH, THIS SUMMER, AS WE GET INTO MORE SCARCE CONDITIONS, WE'LL SEE IF, IF, IF THOSE START COMING INTO PLAY MORE OFTEN.
SO ANY, ANY QUESTIONS ABOUT THE OR DC FLOORS NATURAL GAS PRICES IS A COMPARISON.
THE RED IS THE, UH, 2022 NATURAL GAS PRICES AT THE KATY HUB.
AND THEN YOU SEE 2023 AND 2024 TRENDING PRETTY CLOSELY TOGETHER EARLIER THIS YEAR.
UH, 2024 WAS A LITTLE BIT BELOW 2023, AND WE'RE SEEING THEM KIND OF CONVERGE NOW TO BE CLOSE TO THE SAME.
THE 2022 PRICES WERE QUITE A BIT HIGHER DUE TO SOME OF THE INTERNATIONAL, UH, PROBLEMS THAT WERE GOING ON IN 2022.
BUT, UH, THOSE, THOSE GAS PRICES ARE, ARE A BIG DRIVER FOR, UH, FOR WHAT THE WHOLESALE PRICES ARE.
ANY, ANY QUESTIONS ABOUT THOSE AND FORWARD ELECTRICITY PRICES? WE'VE GOT A COMPARISON HERE OF, UH, THESE, THESE PRICES FROM A, FROM A LOOK FROM MAY AND JUNE LOOKING FORWARD.
AND YOU SEE THAT, UM, THE 2024 PRICES ARE TRENDING BETWEEN 2023 AND 2022.
SO WE'RE A LITTLE BIT HIGHER THAN, UH, THAN 2020, UH, 2023.
BUT, UH, I'VE BEEN TOLD THOSE SINCE THE SLIDE WAS PUT TOGETHER THAT THOSE PRICES HAVE ACTUALLY
[00:40:01]
COME DOWN A LITTLE BIT.THAT 2022 PRICES KIND OF CORRESPOND WITH WHAT THOSE, UH, GAS PRICES WERE IN 2022 AS WELL.
SO, LOOKING FORWARD, UH, A LITTLE BIT HIGHER THAN LAST YEAR, BUT MAYBE NOT AS HIGH AS THIS GRAPH MAY INDICATE ANY, ANY QUESTIONS ABOUT THOSE FORWARD PRICES? ALL RIGHT, ANY QUESTIONS IN GENERAL? ANY QUESTIONS? ALRIGHT, THANK YOU, WOODY.
[7. Board Education – Load Forecasting ]
NEXT AGENDA, ITEM SEVEN, BACK TO DAN.UM, BOARD EDUCATION AND LOAD FORECASTING.
UH, BOTH DAN AND JEFF VILLA ARE PRESENTING THIS.
UM, THE, UH, PURPOSE OF THIS PRESENTATION IS TO GIVE, UH, SORT OF AN EDUCATIONAL, UH, OVERVIEW OF LOAD FORECASTING.
UH, IF YOU WERE HERE TWO YEARS AGO, I, I GAVE A SIMILAR PRESENTATION.
THIS WILL BE A, A BIT OF A REFRESHER FOR YOU IF, IF YOU WERE HERE AT THAT TIME.
UH, BUT I DO HAVE SOME UPDATES AND THINGS THAT HAVE CHANGED THAT I'LL BE SURE TO HIGHLIGHT, UM, OVER THE LAST TWO YEARS THAT HAVE CHANGED.
SO WE, WE HAVE A, UH, VERY TALENTED LOAD FORECASTING TEAM THAT'S LED BY, UH, SAM MORRIS, WHO'S THE MANAGER OF THE GROUP.
UH, THEY PRODUCE, UH, SEVERAL DIFFERENT FORECASTS ON, UH, DIFFERENT TIME HORIZONS.
THE SHORT TERM LOAD FORECAST IS A, UH, FORECAST FOR THE, UH, EACH FIVE MINUTES FOR THE UPCOMING TWO HOURS.
THIS IS THE FORECAST THAT IS USED IN OUR SECURITY CONSTRAINED ECONOMIC DISPATCH TOOL.
SO IT'S, IT'S THE, THE REAL TIME FORECAST THAT THAT'S USED TO DISPATCH THE GENERATION.
UH, WE ALSO HAVE THE MIDTERM LOAD FORECAST, WHICH IS AN HOURLY FORECAST FOR THE UPCOMING 168 HOURS.
UH, THIS IS THE FORECAST THAT IS USED FOR, UH, RELIABILITY UNIT COMMITMENT DECISIONS FOR, UH, RISK ASSESSMENT, UM, UH, FOR, UH, WHEN WE'RE LOOKING AT A A N.
SO IF WE'RE GOING TO RECALL, UH, A GENERATION THAT IS ON AN OUTAGE, UH, THIS IS THE FORECAST THAT IS USED FOR, FOR THOSE PURPOSES.
UM, AND THE MAJORITY OF THIS PRESENTATION IS GOING TO BE, UH, OVER, UH, COVERING THAT MTLF BECAUSE THAT, THAT'S, UH, WHAT, UH, WE'RE, WE'RE SEEM TO GET A LOT OF QUESTIONS ABOUT THE MTLF.
UH, THE OTHER FORECAST THAT THEY PRODUCE IS THE LONG-TERM LOAD FORECAST.
SO THIS IS AN UP TO 10 YEARS, AND THEN ACTUALLY WE, WE'VE GONE UP TO 30 YEARS.
WE'VE EXTENDED THAT, UH, FOR VARIOUS PURPOSES.
BUT THIS IS THE FORECAST THAT IS USED FOR PLANNING PURPOSES AS, AS WELL AS FOR, UH, BUDGET PLANNING.
SO WE, WE HAVE AN, UH, INTERNALLY DEVELOPED, UH, MODELS THAT WE USE.
UM, AND, AND WE SAY THAT THERE ARE, ARE FOUR MODELS, THE EE ONE, E TWO, AND E THREE, UH, THAT, THAT'S A LITTLE BIT OF A MISNOMER THAT IT'S ACTUALLY ONE, UH, MODEL THAT IS A NEURAL NET MODEL THAT WE PLUG FOUR DIFFERENT WEATHER SCENARIOS AND TO PRODUCE E EACH OF THOSE, UH, FORECAST.
UH, SO IT'S, IT'S, UH, IT'S A, YOU KNOW, A AI IS, UH, KINDA A HOT TOPIC RIGHT NOW, BUT THE LOAD FORECASTERS HAVE BEEN USING THESE, UH, AI MODELS FOR, UH, WELL, THEY'RE OVER A DECADE NOW.
AND WHAT THEY ARE DOING IS THEY ARE FEEDING INTO THESE MODELS, THE, UH, VARIOUS WEATHER FORECAST INFORMATION, UH, UH, VARIABLES.
THEY'RE ALSO, UH, LOOKING AT WHAT DAY OF THE WEEK IT IS, UH, PAST HISTORY.
AND THEY, UH, LOAD ALL THAT INTO THE MODEL, LET THE MODEL RUN, AND IT PRODUCES, UH, ESSENTIALLY 168 VALUES, UH, FOR THE FORECAST FOR THE UPCOMING WEEK.
UH, SO THAT, THAT'S THE, THE INTERNAL DEVELOPED MODELS.
UH, WE ALSO HAVE, UH, IN OUR ENERGY MANAGE MANAGEMENT SYSTEM, WE HAVE A COUPLE OF MODELS THAT ARE, UH, UH, BUILT INTO THAT SYSTEM.
UH, I WOULD SAY THEY'RE NOT AS SOPHISTICATED AS THE, UH, THE, UH, THE NEURAL NET MODELS THAT WE'RE RUNNING, UH, THE E THE E THROUGH E THREE MODELS.
AND HISTORICALLY WE'VE USED THOSE AS SORT OF A BACKUP TO THE, UM, UH, TO THE INTERNAL MODELS.
BUT, UH, ONE OF THE LESSONS LEARNED COMING OUT OF ELLIOT TO, IF YOU REMEMBER, UH, WE, WE HAD A, A SOFTWARE UPDATE THAT, SO THE, THE SOFTWARE PLATFORM THAT WE USE TO PRODUCE THOSE, UH, FORECASTS, WE HAD A SOFTWARE UPDATE THAT, UH, CHANGED THE WAY THE SOFTWARE LOOKED AT HOLIDAYS.
AND SO ELLIOT, GOING INTO THAT CHRISTMAS HOLIDAY WAS WE WEREN'T GETTING VERY GOOD MODEL RESULTS OUTTA THAT.
AND SO WE HAD TO, UH, GO BACK TO THE, UH, THE EMS MODELS AND THOSE MODELS, AS I MENTIONED, THEY'RE NOT AS SOPHISTICATED AND, UH, REALLY WE, WE WERE, UH, DISSATISFIED WITH THE PERFORMANCE OF THE, UH, THE FORECAST THAT WE WERE GETTING.
AND SO ONE OF THE NEW THINGS THAT WE HAVE DONE IS WE'VE ADDED AN EXTERNAL, UH, VENDOR FORECAST, UH, THAT WE, UH, HAVE BEEN ACTUALLY GETTING FOR, UH, ABOUT SIX MONTHS OR SO NOW.
[00:45:01]
OF GOING LIVE INTO PRODUCTION, UH, THIS MONTH WHERE WE'LL BE ABLE TO USE THAT EXTERNAL VENDOR FORECAST MODEL.UH, AND THEY HAVE A LITTLE DIFFERENT APPROACH THAT IT'S ALSO AN AI MODEL, BUT A LITTLE DIFFERENT APPROACH THAN THE, UH, MODELING, UM, THE INTERNAL DEVELOPED MODELS THAT, THAT WE'RE USING.
UH, SO I MENTIONED THE, THE WEATHER, UH, SCENARIOS.
UH, SO WE, WE HAVE, UH, SO TODAY WE HAVE SEVEN DIFFERENT WEATHER FORECASTS THAT WE CAN USE.
UH, WE HAVE ALSO, UH, STARTED PROCURING, UH, AN ADDITIONAL SEVEN WEATHER FORECASTS THAT, THAT WE CAN, UH, PLUG INTO THE MODELS, UM, THAT THOSE ARE NOT, UH, LIVE YET.
SO WE, WE HAVE THOSE ON SITE, BUT THEY'RE NOT, UH, PLUGGED INTO THE MODEL, UH, QUITE YET.
BUT, UH, THE IDEA IS THAT WE CAN LOOK AT THESE, SO WE'VE GOT METEOROLOGISTS ON STAFF, WE CAN LOOK AT THESE DIFFERENT WEATHER FORECASTS, AND WE CAN RUN DIFFERENT WEATHER SCENARIOS, AS I MENTIONED, THE E UH, THROUGH THE E THREE.
WE CAN RUN DIFFERENT SCENARIOS THROUGH THIS MODELS TO SEE, UH, WHAT, UH, SO IF WE WANNA SEE, YOU KNOW, THAT GFS IS PROJECTING THIS WEATHER PATTERN, UH, BUT THE EURO MAYBE IS PROJECTING THAT THIS FRONT IS GONNA MOVE THROUGH A LITTLE EARLIER, THEN WE CAN, UH, PLUG THOSE INTO THE MODELS AND, UH, SEE WHAT THE RESULTS ARE.
UH, WE, WE, UH, TYPICALLY, UH, WILL BIAS THE, THE, THE, UH, MODELS, UH, TO BE ON THE HIGH SIDE.
SO WE'LL HAVE AT LEAST ONE OF THOSE MODELS WILL BE, UH, THE MOST EXTREME WEATHER.
AND WE WILL DO WHAT THE LOAD FORECASTERS CALLED THE, THE FRANKENSTEIN APPROACH, WHICH IS WE MAY, UH, IF WE'RE, UH, LOOKING AT THE, UH, MAYBE THE GFS HAS THE HOTTEST CONDITIONS, SO IF WE'RE LOOKING AT A SUMMER SCENARIO, GFS HAS THE HOTTEST CONDITIONS FOR THE HOUSTON AREA, THEN FOR THAT AREA, WE WILL USE THE GFS, BUT MAYBE THE EURO HAS, UH, HOTTEST CONDITIONS FOR, FOR DFW.
AND SO WE WILL, WE'LL CREATE A MODEL THAT HAS, UH, SORT OF THIS, UH, YOU KNOW, DI DIFFERENT REGIONS, WE'LL USE DIFFERENT WEATHER FORECAST TO PRODUCE THE, THE HOTTEST.
AND, AND THAT'S JUST A, UH, AREA OF CONS CONSERVATISM, WHERE WE WANT TO MAKE SURE THAT, UH, IF THAT WORST CASE HAPPENS, THAT WE'RE PREPARED FOR THAT.
I THINK I'VE ALREADY, UH, TALKED THROUGH THIS SLIDE ALREADY, SO I'M GONNA, UH, SKIP THAT ONE.
UH, PROBABLY THE, THE BIGGEST CHANGE SINCE I CAME AND TALKED TO YOU TWO YEARS AGO HAS BEEN THE LEVEL OF DEMAND RESPONSE.
AND, AND WHEN I SAY DEMAND RESPONSE HERE, UH, I'M, I'M TALKING ABOUT, UH, NOT
UH, TWO PRIMARY SOURCES FOR THAT.
ONE IS, UH, PRICE RESPONSIVENESS.
SO, UH, AS, UH, CUSTOMERS THAT ARE, UH, SEEING THOSE, UH, EXPOSED TO THOSE REAL-TIME PRICES AND IN PARTICULAR, UH, THE CRYPTO MINING, UH, FACILITY.
SO AS THEY SEE THOSE REAL-TIME PRICES, THEN THEY WILL RESPOND TO THOSE AND THEY WILL LOWER THEIR CONSUMPTION.
UH, THE, THE SECOND LARGEST DRIVER OF DEMAND RESPONSE, UH, AND THIS HAS GROWN PRETTY SIGNIFICANTLY IN THE LAST FEW YEARS, IS THE, UH, FOUR CP.
UH, SO THIS IS WHERE CERTAIN, UH, CUSTOMERS, UH, SO THESE ARE, YOU KNOW, LARGER INDUSTRIAL CUSTOMERS AS WELL AS THE NON OPTIN ENTITIES.
THIS IS WHERE THEY CAN, CAN CONTROL THEIR, UH, THE CHARGES THAT, THAT THEY HAVE FOR, UH, TRANSMISSION, HOW MUCH THEY PAY FOR THE TRANSMISSION SYSTEM, UH, THAT THAT IS BASED ON THEIR USAGE DURING THE COINCIDENT PEAKS IN THE SYSTEM, UH, IN THE MONTHS OF JUNE THROUGH SEPTEMBER.
UH, AND SO THERE ARE SEVERAL PARTICIPANTS THAT ARE, UH, VERY ACTIVE IN THAT, AND THEY WILL RESPOND WHEN THEY THINK THAT THE DAY IS GOING TO BE, UH, ONE OF THOSE, THOSE COINCIDENT PEAK DAYS.
UH, NOW, UH, THIS HAS GROWN, UH, QUITE A BIT, AND THIS IS PROBABLY SOMETHING THAT I, I PERSONALLY FEEL LIKE PEOPLE AREN'T TALKING ABOUT ENOUGH AND, AND THAT, THAT THAT HAS GROWN TO BE PRETTY SIGNIFICANT.
IF YOU SAW, UH, DAN'S, UH, R AND M SLIDES, UH, YESTERDAY ON, UH, THE OPERATIONAL UPDATE, THAT, THAT NUMBER IS BETWEEN ABOUT FIVE AND SIX GIGAWATTS NOW TOTAL BETWEEN THE CRYPTO MINING RESPONSE AND THE FOUR CP RESPONSE.
SO HISTORICALLY, WHAT WE HAVE SEEN IS THAT MAYBE THERE'S A DAY THAT'S 102 DEGREES, AND EVERYBODY KNOWS THAT THAT'S GOING TO BE THE PEAK DAY.
AND SO YOU'LL SEE THAT THAT RESPONSE FROM THE, THE, UH, LARGE CUSTOMERS, LARGE INDUSTRIAL CUS CUSTOMERS TRYING TO LOWER THEIR FOUR CP CHARGES, UH, YOU, YOU'LL SEE THAT, UH, BUT THEN MAYBE, UH, THE NEXT DAY IS A HUNDRED DEGREES, AND THEY DON'T THINK THAT THAT'S GONNA BE PEAK.
AND, AND SO THEY DON'T RESPOND.
UH, AND SO THAT DAY ACTUALLY BECOMES THE COINCIDENT PEAK BE BECAUSE THEY, UH, YOU KNOW, THE, THEIR INDUSTRIAL CUS MAYBE AIR CONDITIONING LOADS A LITTLE BIT LESS, BUT THE INDUSTRIAL CUSTOMERS ARE STILL USING, UH, YOU KNOW, QUITE A BIT MORE.
AND SO THAT DAY ACTUALLY SETS AND, AND SO YOU, YOU KIND OF SEE THIS INTERPLAY IN THE MARKET.
WELL, WITH THAT GROWING THAT WE'RE, WE'RE SEEING THAT THAT IS MORE AND MORE DAYS WHERE WE'RE HITTING THAT, UH, THAT, THAT WHERE THERE'S THAT, THAT POTENTIAL FOR THAT FOUR CP RESPONSE, AND IT'S GROWING TO LONGER HOURS, UH, IN THE DAY AS WELL.
UH, AND SO WHAT WE SAW LAST SUMMER, UH, WE HAD VERY HOT AUGUST, UH, WHERE WE HAD MANY DAYS WHERE WE HAD SIMILAR TEMPERATURES.
WE, WE ACTUALLY SAW A NOTABLE RESPONSE ON 14 OUT OF THE 31 DAYS IN THE MONTH, INCLUDING ON WEEKENDS.
UH, AND THAT WE, WE, UH, ARE, THEY'RE SEEING THAT AT LEAST IN AUGUST OF
[00:50:01]
LAST YEAR, THAT THAT CAUSED SOME BEHAVIOR CHANGES.SO SOME PARTICIPANTS THAT MAYBE RESPONDED IN JUNE AND JULY WERE LESS WILLING TO RESPOND, UH, IN THE MONTH OF AUGUST.
AND, AND SO, YOU KNOW, WE'RE TRYING TO, YOU KNOW, UH, TAKE ALL THAT INTO ACCOUNT AS WE'RE PRODUCING A, A LOAD FORECAST AND, AND MAKING SURE THAT, THAT WE'RE, UM, UH, LIKE I SAID, JUST TAKING THAT INTO ACCOUNT AS WE'RE MAKING OUR ASSESSMENTS.
SO HOW, HOW DOES THAT PLAY INTO OUR LOAD FORECAST? SO HISTORICALLY, UH, WE HAVE NOT COUNTED ON THAT DEMAND RESPONSE IN THE LOAD FORECAST.
SO WHEN WE PUT OUT OUR MTLF, UH, THAT NUMBER, UH, GENERALLY DOESN'T INCLUDE DEMAND RESPONSE THAT, THAT WE WOULD, UH, EXPECT TO SEE ON THE SYSTEM.
UM, AND, AND PART OF THAT IS BECAUSE, UH, YOU, THE, THAT RESPONSE IS NOT ALWAYS CONSISTENT.
UH, AND, AND YOU KNOW, I MENTIONED, YOU KNOW, THERE, THERE MAY BE, UH, DAYS WHERE YOU, YOU KNOW, THEY, THEY THINK IT'S GOING TO BE THE PEAK AND THEN, AND THEY'LL RESPOND, BUT OTHER DAYS WHERE THEY DON'T AND THEY DON'T RESPOND, AND, AND SO THAT, THAT BEHAVIOR IS NOT ALWAYS CONSISTENT.
AND SO IF YOU THINK ABOUT OUR NEURAL NET MODEL, IT, IT DOESN'T ALWAYS PICK UP ON, ON THAT BEHAVIOR VERY WELL.
BUT AS WE'RE SEEING MORE OF THIS DEMAND RESPONSE, UH, WE HAVE ACTUALLY BUILT, UH, SOME, UH, MACHINE LEARNING ALGORITHMS. SO WE HAVE SOME MODELS THAT ARE RUNNING, UH, IN, IN THE BACKGROUND RIGHT NOW.
UH, WE ALSO HAVE A, UH, CRYPTO MINING, UH, RESPONSE MODEL, UH, SEVERAL OTHER MODELS THAT WE ARE RUNNING IN THE BACKGROUND RIGHT NOW.
UH, SO AS WE MAKE RISK ASSESSMENTS, THEN WE ARE LOOKING AT THOSE MODELS, BUT AT LEAST I'LL SAY IN 2024, UH, WE'RE NOT PUTTING THOSE INTO THE MTLF THAT THAT, YOU KNOW, COULD CHANGE IN 2025 OR 2026.
I THINK THERE'S SOME DISCUSSION THAT WE NEED TO HAVE WITH STAKEHOLDERS, UH, BEFORE WE DO THAT TO MAKE SURE THAT WE'RE ALL SETTING THE, THE RIGHT EXPECTATIONS.
BUT, UH, AT LEAST IN 2024, UH, WHEN YOU SEE A FORECAST, IT, IT, MORE THAN LIKELY IT DOES NOT INCLUDE THAT DEMAND RESPONSE.
JEFF, ON THE DEMAND RESPONSE IS VIRTUALLY ALL THE DEMAND RESPONSE.
THIS IS JUST ENTITIES MAKING THEIR OWN ECONOMIC DECISIONS NOT TO CONSUME, OR ARE THERE ANY MARKET PARTICIPANTS THAT ARE GETTING COMPENSATED DIRECTLY, UH, FOR DEMAND RESPONSE COMMITMENTS? YEAH, SO, SO WHAT I, WHAT I WOULD, UM, CLASSIFY AS DEMAND RESPONSE, IT, IT IS ALL E ECONOMIC DECISIONS THAT THE MARKET IS MAKING.
SO WHETHER THAT'S TO LOWER THEIR FOUR CP CHARGES OR IF THEY'RE EXPOSED TO WHOLESALE PRICES, UM, OR WE EVEN SEE, UM, I, I DIDN'T MENTION, BUT YOU KNOW, THERE'S A LOT OF REPS NOW THAT HAVE THERMOSTAT PROGRAMS, UH, THAT, YOU KNOW, THAT'S AN ECONOMIC DECISION THAT, THAT THEY'RE MAKING.
UM, I, I THINK IF YOU WERE TO, UH, YOU KNOW, TALK TO BROADER INDUSTRY, THEN THEY, THEY MAY CONSIDER, UH, PARTICIPATION IN SOME OF OUR ANCILLARY SERVICES, UH, TO WHERE LOADS CAN PARTICIPATE.
THEY, THEY MAY, YOU KNOW, BROADLY SPEAKING, MAY CLASSIFY THAT AS DEMAND RESPONSE, BUT WHAT I'M TALKING ABOUT HERE IS, IS MORE THE ECONOMIC DECISIONS THAT MARKET PARTICIPANTS ARE MAKING TO RESPOND.
DO, UH, JEFF, THANKS FOR THE PRESENTATION.
UM, DO YOU, THIS IS A VERY DY ON THE DEMAND RESPONSE SIDE, THE FOUR CP AREA, UH, AND YOU CAN THROW CRYPTO IN WITH THAT AS WELL.
THIS IS A VERY DYNAMIC AREA, AND IT'S THE STATE IS THAT THAT DEMAND SIDE IS GROWING PRETTY QUICKLY.
DO YOU HAVE AN, DO YOU HAVE ENOUGH DATA WHERE YOU COULD TRY TO LOOK AT RETROSPECTIVELY AND THEN COME UP WITH A PROSPECTIVE FORECAST FOR THIS, FOR THE BEHAVIOR OF FACTORY AND PRICES, UH, HEAT OR, YOU KNOW, WEATHER, THINGS LIKE THAT? DO, DO YOU HAVE ENOUGH DATA WHERE YOU COULD BEGIN TO MODEL THAT BEHAVIOR IN A REASONABLY CONFIDENT MANNER? SO, SO WE, WE, UH, WE, WE THINK THAT WE DO, AND WE HAVE THESE, YOU KNOW, I MENTIONED THESE MACHINE LEARNING ALGORITHMS THAT, THAT, UH, ARE TRYING TO MODEL THAT BEHAVIOR RIGHT NOW.
UH, AND SO WE HAVE THOSE RUNNING ON THE SIDE.
UH, I, I WILL SAY THAT THERE ARE SOME CHALLENGES, UH, WITH THAT BEHAVIOR, UH, NOT BEING CONSISTENT, UH, SOMETIMES SO, SO IT'S, YOU KNOW, SOMETIMES YOU'RE EXPECTING THAT THEY WILL, UH, UH, RESPOND AND, AND THEY DON'T RESPOND.
UH, YOU MAY MAYBE AS THEY HAVE IN THE PAST.
AND, AND SO THERE'S BEHAVIOR CHANGES THAT ARE MAKING THAT CHALLENGING.
UH, BUT REALLY THAT, THAT'S OUR GOAL RIGHT NOW IS WE, IT'S BECOMING SUCH A, THAT THAT'S FIVE TO 10% OF OUR DEMAND AT PEAK, UH, THAT I THINK WE HAVE TO BE ABLE TO FIGURE THAT OUT AND BE ABLE TO FORECAST THAT GOING FORWARD.
YEAH, THAT'S WHERE I'M GOING WITH THE QUESTION.
IT SEEMED LIKE AS SOON AS WE GET OUR ARMS AROUND THAT, THAT BECOMES A VERY VALUABLE FORECASTING TOOL SINCE IT'S SUCH AN INTEGRAL PART OF TRYING TO BALANCE THE MARKET.
SO JEFF, I JUST HAVE A, JUST OUTTA CURIOSITY.
[00:55:01]
YOU SAID YOU PRESENTED US TWO YEARS AGO.WHEN YOU LOOK AT YOUR LONG-TERM FORECAST, YOUR 10 YEAR, HOW MUCH HAS THAT CHANGED IN THE LAST TWO YEARS? THAT'S, IN OTHER WORDS, YEAH, WHAT YOU, WHAT YOU WERE LOOKING AT TWO YEARS AGO, HOW ACCURATE WOULD YOU SAY THAT IS TODAY? I KNOW IT'S A MOVING TARGET, BUT YEAH, I WOULD SAY IT'S SIGNIFICANTLY CHANGED.
UH, AND E EVEN IN THE LAST SIX MONTHS, IT'S, UH, IT'S, THERE'S BEEN A PRETTY NOTABLE CHANGE IN THE, THE LONG-TERM LOAD FORECAST, AND THAT IS, UH, REALLY DRIVEN BY A LOT OF THE, THE INDUSTRIAL CUSTOMERS.
SO IT'S, IT'S THE, UM, WHAT, WHAT, WHAT WE CALL INDUSTRIAL, BUT A LOT OF THAT'S THE DATA CENTERS.
UM, YOU KNOW, I, I THINK, UH, YOU KNOW, TWO YEARS AGO, UH, TO BE HONEST WITH YOU, I DON'T THINK THAT WE SAW THE AI IMPACT, UH, AND, AND WHAT THAT IS DRIVING IN TERMS OF NEW DEMAND ON THE SYSTEM.
UM, SO YEAH, SO WE'RE A LITTLE BIT, UH, PLAYING CATCH UP WITH THAT, BUT IT'S, UH, YEAH, IT'S, UH, TO ANSWER YOUR QUESTION, IT'S SIGNIFICANTLY CHANGED.
OTHER QUESTIONS? THANK YOU VERY MUCH.
[8. Independent Market Monitor (IMM) 2023 State of the Market Report for the ERCOT Electricity Markets ]
UH, NEXT IS G ITEM EIGHT, THE INDEPENDENT MARKET MONITOR, IMM, UH, 2023.STATE OF THE MARKET REPORT FOR THE, THE ERCOT ELECTRICITY MARKETS.
IMM DIRECTOR JEFF MCDONALD IS HERE TO PRESENT THIS ITEM.
BOARD MEMBERS WERE PREVIOUSLY PROVIDED A COPY OF THE IMM STATE OF THE MARKET REPORT, AND MR. MCDONALD WILL WALK US THROUGH THE HIGHLIGHTS.
JEFF, HI, GOOD MORNING, UH, DIRECTORS, THANK YOU FOR THE OPPORTUNITY TO ADDRESS YOU AND WALK THROUGH SOME OF THE HIGHLIGHTS OF THE STATE OF THE MARKET REPORT ON 2023.
I'VE BEEN HERE FOR ABOUT THREE MONTHS, UM, AND STARTED IN THE MIDDLE OF THE PRODUCTION OF THIS REPORT.
SO IT'S, IT'S NICE TO HAVE IT, UH, BEHIND US AND, UH, ABLE TO TALK ABOUT IT NOW.
SO, UM, AND, AND PLEASE FEEL FREE TO INTERRUPT AS, AS I'M GOING, UH, IF YOU HAVE ANY QUESTIONS, I'M HAPPY TO ADDRESS THEM TO THE EXTENT I CAN.
SO LOOKING AT ENERGY PRICES IN 20 20 23 WAS A LITTLE BIT OF AN INTERESTING YEAR, AND I, I KNOW, UM, IT, IT COMES UP REPEATEDLY IN THE REPORT.
UM, THE IMPLEMENTATION OF ECRS HAD A PROFOUND EFFECT ON THE MARKET.
I'M NOT GONNA FOCUS ON THAT, UH, IN THIS DISCUSSION, BUT YOU WILL SEE, UH, IT IS THE, THE FOCUS IN CERTAIN AREAS IN THE REPORT BECAUSE IT HAD A, A FAIRLY PROFOUND EFFECT ON ENERGY, PRICE, AND OVERALL COST.
SO HAVING SAID THAT, YOU'LL SEE IN A SLIDE OR TWO, WE'LL, WE'LL COVER A LITTLE BIT OF THAT, BUT, UM, BUT AS FAR AS, UH, ENERGY PRICES GO, WE DID SEE A REDUCTION OF ABOUT 13% IN REAL TIME ENERGY PRICE.
UM, AND, AND THAT WAS INTERESTING IN, IN A SENSE BECAUSE, UH, ONE, IT WAS A HOT YEAR, UM, AT LEAST A HOT SUMMER ABNORMALLY HOT, AND WE'LL, WE'LL TALK A LITTLE BIT ABOUT, UH, THE IMPACT OF THAT ON LOAD IN A, IN A COUPLE MINUTES, BUT WE DID SEE ABOUT A 13% DECREASE.
THE INTERESTING PART OF IT IS THERE WAS A ROUGHLY 60% DECREASE IN NATURAL GAS PRICE, UH, IN 2023.
AND SO OFTEN, EVEN THOUGH NATURAL GAS UNITS AREN'T ALWAYS THE MARGINAL UNIT AND SETTING THE PRICE IN WHOLESALE ELECTRICITY, THEY ARE OFTEN, UH, IN, IN MOST RTOS AND, AND CERTAINLY IN ERCOT, OFTEN ENOUGH, UM, A PRICE SETTING RESOURCE.
AND SO IF YOU SEE NATURAL GAS PRICE DECLINE BY 60%, YOU'D EXPECT TO SEE, UH, THE ENERGY PRICE DECLINE, NOT 60%, BUT SOMETHING CLOSER IN MAGNITUDE TO THAT.
SO WE DID SEE 13%, A LOT OF THE DIFFERENCE IN THAT DECLINE IS ATTRIBUTABLE TO THE IMPACT THAT ECRS HAD ON THE IMPLEMENTATION OF ECRS HAD ON, UM, ON THE ENERGY PRICE DURING MOSTLY JUNE THROUGH AUGUST, UH, OF LAST YEAR.
SO, UM, BUT YOU CAN SEE ON THE, ON THE WHOLE, THROUGH THROUGHOUT THE YEAR, WE WERE DOWN TO AROUND $65 A MEGAWATT HOUR FOR REAL-TIME ENERGY.
UH, AND SO, UH, THAT IS, UH, WITHOUT A DOUBT AN IMPROVEMENT OVER THE PRIOR YEAR.
UM, ONE OF THE THINGS, UH, THAT YOU CAN GET OUT OF THIS CHART IS WE, WE DO LOOK AT IT FROM BY ZONE TO SEE TO WHAT EXTENT THERE'S A, YOU CAN CALL IT A MISMATCH IN, IN, UH, GENERATION AND LOAD ACROSS ZONES OR WITHIN A ZONE SO THAT, SO THAT POWER HAS TO BE TRANSFERRED ACROSS ZONES IN ORDER TO ACCOMMODATE LOAD.
SO WE SAW MUCH GREATER CONVERGENCE IN REALTIME ENERGY PRICE ACROSS THE ZONES THIS YEAR, UM, COMPARED TO THE LAST
[01:00:01]
COUPLE OF YEARS.AND IT WAS, IT WAS IN FACT COMPARABLE TO PATTERNS THAT WE SAW, YOU KNOW, I THINK BEFORE, UH, 2021.
UM, AND WE'LL, I'LL TALK A LITTLE BIT ABOUT CONGESTION IN A MOMENT.
ARE YOU GONNA EXPLAIN WHAT, WHAT, WHAT, WHAT YOU ATTRIBUTE THAT CONVERGENCE TO AND WHAT THE ISSUES ARE AROUND THAT? UM, I'LL, I'LL TALK A LITTLE BIT ABOUT THAT IN, IN, IN THE CONGESTION SLIDE, IF THAT'S OKAY.
SO THIS CHART SHOWS, UH, THE IMPACT, YOU KNOW, OUR ESTIMATED IMPACT, UH, THAT THE IMPLEMENTATION OF ECRS HAD ON ENERGY PRICE IN 2023.
AND AS YOU CAN SEE, IT WAS PRETTY PROFOUND, BUT ALSO, UH, SOMEWHAT LOCALIZED TO THE HOTTER MONTHS, UH, YOU KNOW, JUNE, JULY, AUGUST AND SEPTEMBER.
SO, UH, IT DID ROUGHLY DOUBLE THE REALTIME ENERGY PRICE DURING THAT PERIOD.
AND I KNOW EVERYONE'S, UH, SEEN THE ESTIMATED COST EXCESS COST OF THAT AT ABOUT $12 BILLION.
SO THERE WERE, IN, IN THE CONTEXT OF REALTIME ENERGY PRICE, THERE WERE A FEW THINGS THAT I DID WANNA MENTION.
WE, WE SPEND A, A FAIR AMOUNT OF TIME LOOKING AT THE COMPETITIVENESS OF THE MARKET.
UM, ON THE WHOLE, OR IN GENERAL, I WOULD SAY, YOU KNOW, WE, WE'VE FOUND THE ENERGY MARKET TO BE COMPETITIVE IN 2023.
UM, WE MONITOR VERY CLOSELY OPPORTUNITIES FOR AND ATTEMPTS TO EXERCISE BOTH PHYSICAL AND ECONOMIC WITHHOLDING IN ORDER TO BENEFIT FROM MARKET POWER.
WE FOUND A VERY LOW FREQUENCY OF OPPORTUNITY IN 2023 TO EXERCISE MARKET POWER, BOTH EITHER IN PHYSICAL OR, OR ECONOMIC WITHHOLDING.
UM, HAVING SAID THAT, I KNOW PREVIOUSLY WE HAD EXPRESSED A CONCERN WITH MARKET POWER AND NONS SPIN, UH, THAT HAS BEEN ADDRESSED THROUGH CHANGES IN VOLUNTARY MITIGATION PLAN.
UH, WE ALSO HAD EXPRESSED SOME, UH, CONCERNS WITH COMPETITIVE COMPETITIVENESS WITH RESPECT TO, UH, SELF-SCHEDULING RESOURCES OR SELF COMMITTING RESOURCES THAT WAS DIRECTLY LINKED TO INCENTIVES, UH, IN THE RUCK PROCESS THAT WE'RE UNDERMINING, UH, A GENERATOR'S NA NATURAL ECONOMIC INCENTIVE TO COMMIT.
UH, THOSE HAVE BEEN ADDRESSED AS WELL.
SO IN BOTH OF THOSE CASES, I THINK ACTION WAS TAKEN FAIRLY QUICKLY TO ADDRESS POTENTIAL, UH, COMPETITIVE COMPETITIVENESS ISSUES.
ONE OF THE THINGS WE DO SEE, AND THIS IS TRUE, UM, NOT JUST IN TEXAS, BUT IN ANY RTO, IS WHEN SYSTEM CONDITIONS GET TIGHTER, UH, YOU SEE MORE, YOU SEE A, A LOWER DEGREE OF COMPETITIVENESS AND MORE OPPORTUNITY TO EXERCISE MARKET POWER.
UH, AND WE DID OBSERVE THAT IN 2023 DURING, UH, HOTTER DAYS WHERE, WHERE SUPPLY AND DEMAND CONDITIONS WERE TIGHT, UM, AND I KNOW IT'S BEEN NOTED BEFORE, BUT, BUT I'LL NOTE IT AGAIN, THE EXTENT TO WHICH, UM, ELIGIBLE GENERATION IS HELD OUTSIDE OF THE REAL-TIME MARKET IN RESERVE NATURALLY REDUCES, UH, THE AMOUNT OF SUPPLY THAT YOU'LL EXPECT TO SEE IN THE MARKET, IN THE REAL TIME MARKET IN RESERVE.
AND THAT CAN, THAT CAN REDUCE THE DEGREE OF COMPETITIVENESS.
AND WE DID OBSERVE THAT IN 2023, UM, WITH THE IMPLEMENTATION OF ECRS IN A MUCH LARGER, AND I, AND I THINK, I THINK TO BE FAIR, IT WASN'T JUST THE IMPLEMENTATION OF ECRS, IT WAS A MORE, UM, CONSERVATIVE O OPERATING POSTURE AS WELL REDUCED THE AMOUNT OF SUPPLY AVAILABLE IN THE REAL TIME MARKET, WHICH ALSO REDUCED THE DEGREE OF COMPETITIVENESS.
SO, UM, ANY, ANY QUESTIONS SO FAR? OKAY, SO MOVING ON TO LOAD TRENDS.
UM, SO THERE ARE THREE YEARS REPRESENTED HERE, AND THIS DATE ARE BROKEN OUT BY ZONE IN TEXAS HERE.
AND, AND AS YOU CAN SEE, UH, 2023 DID SEE HIGHER AVERAGE LOADS.
THAT'S THE BLUE SEGMENT OF THE BAR AND HIGHER PEAK LOADS.
UM, THE BLUE PLUS THE RED SEGMENT, UH, ACROSS ALL FOUR ZONES IN 2023 COMPARED TO THE PRIOR TWO YEARS.
AND, AND IT, THERE IS, YOU KNOW, TO THE EXTENT YOU CAN EXTRAPOLATE A TREND FROM THREE YEARS, UH, IT DOES APPEAR THAT LOAD IS, IS, UH, SOLIDLY TRENDING UPWARD.
I THINK WE SAW, UM, ABOUT THREE AND A HALF PERCENT INCREASE IN LOAD IN 2023.
UM, I KNOW I'M, I'M FOLLOWING UP SOME FANTASTIC DISCUSSION ON, ON LOAD GROWTH, UM, IN SOME OF THE PRIOR PRESENTATIONS.
SO, UH, I WON'T COVER THAT IN ANY DETAIL, BUT TEXAS IS DEFINITELY SEEING AN INFLUX OF, UH, IT SEEMS LIKE GAS AND OIL, UH, PRODUCTION LOAD, UH, AS WELL AS DATA CENTER AND CRYPTO MINING LOAD.
[01:05:01]
SO, UM, IT'S, IT'S WORTH NOTING THAT 2023 WE DID SEE, UH, A NEW RECORD, UM, IN THE REPORT.AND I APOLOGIZE, I DON'T REMEMBER THE EXACT NUMBER OF TIMES WE BROKE THE RECORD IN 2023, BUT THERE WAS A SEQUENTIAL BREAKING OF THE PEAK LOAD RECORD IN 2023 THAT CULMINATED IN, IN A NEW ALL TIME PEAK OF 25.7 GIGAWATTS ON AUGUST 10TH.
SO, LOOKING AT SUPPLY CHANGES, AND, AND I'LL RELATE THIS TO, UH, ANOTHER SLIDE IN A MOMENT.
YOU KNOW, WE DID SEE ABOUT 10 AND A HALF GIGAWATTS OF NEW SUPPLY COME IN.
A LOT OF THAT WAS IN RENEWABLES, ABOUT 7,600 MEGAWATTS CAME IN THROUGH WIND AND SOLAR.
UH, WE DID SEE ABOUT 1900 MEGAWATTS COME IN FOR ENERGY STORAGE AND FOR NEW NATURAL GAS FIRE PLANTS, UH, 970.
AND, AND WHERE, WHERE, I'M GONNA RELATE THAT, IN FACT, WE CAN TALK ABOUT THIS MORE IF YOU'D LIKE, UM, IN, BUT WE SHOULD DO SO IN THE NEXT SLIDE.
PARDON ME? DID I SKIP A SLIDE? NO, I'M, IF IT'S ALL RIGHT WITH YOU, I'M GONNA JUMP FORWARD BECAUSE I THINK THIS SLIDE IS A LITTLE MORE RELEVANT TO, TO, UM, NEW GENERATION IN OUR COT.
SO ONE OF THE THINGS WE LOOK FOR, YOU KNOW, SO OF COURSE THERE ARE INCENTIVES FOR SOLAR, UH, AND WIND THAT AREN'T NECESSARILY MARKET BASED, UH, THAT CAN RESULT IN HIGHER INCIDENTS OF NEW GENERATION BUILT IN THOSE TECHNOLOGIES.
BUT ONE OF THE THINGS WE LOOK FOR, UH, IS WHETHER OR NOT THE MARKET IS PROVIDING ENOUGH REVENUE TO SUPPORT SIGNALS FOR NEW GENERATION IN NON-SUBSIDIZED TECHNOLOGIES.
SO, UH, NATURAL GAS, AND WE TYPICALLY FOCUS ON COMBINED CYCLE, OR EXCUSE ME, UM, COMBUSTION TURBINE.
SO IF YOU, IF YOU SEE HERE, UH, FOUR OUTTA THE LAST SIX YEARS, UH, THE ERCOT ENERGY ONLY MARKET PROVIDED SUFFICIENT REVENUE TO SIGNAL NEW GENERATION.
AND THAT'S TRUE, UH, EVEN IF WE TAKE OUT THE EFFECT OF ECRS IN 2023.
AND WHILE IT'S NOT SHOWN IN THIS CHART, UH, WE ESTIMATED WHAT A NORMAL 2021 WOULD'VE LOOKED LIKE WITHOUT URI.
AND TO THE EXTENT IT'S POSSIBLE TO BE ACCURATE IN THAT ESTIMATE, UM, YOU KNOW, THAT 2021 ALSO SHOWED THAT THE MARKET PRODUCE NET REVENUE SUFFICIENT TO SIGNAL NEW GENERATION.
SO FOUR OUTTA THE LAST SIX YEARS, YOU'RE SEEING SUFFICIENT REVENUE IN THE MARKET.
JEFF, WHEN WE LOOK AT ECRS BY MONTH, WE SEE AUGUST LOOKS ANOMALOUS TO THE OTHER MONTHS, ESPECIALLY IN 2023.
IF YOU TAKE OUT AUGUST, 2023 IN THIS GRAPH ON, UH, THE FOLLOWING PAGE SEVEN, I'M SORRY, DID YOU WANT A DIFFERENT SLIDE? YOU WANT SEVEN? YEAH, ON SEVEN.
HOW DOES IT REDUCE THE CROSS HAS BARS IN THE 2023 EFFECTIVE ECRS? SO, UM, SO I AGREE WITH YOU.
AUGUST WAS THE MOST SEVERE MONTH.
I, I, I CAN'T, UM, IN MY HEAD DO THAT MATH UNFORTUNATELY, BUT, BUT IT, IF I WERE TO GUESS, I WOULD SAY IT WOULD REMOVE PROBABLY SOMEWHERE BETWEEN TWO THIRDS AND THREE QUARTERS OF THE HASH BAR, PROBABLY TWO THIRDS.
I THINK IT'S REALLY IMPORTANT THAT WHEN WE HAVE AN ANOMALOUS MONTH, WE, WE LOOK AT DATA WITH AND WITHOUT IT, SO WE DON'T GET SWAYED BY SURE.
THE STARTUP MONTH THAT WE IMPLEMENTED IT.
'CAUSE IT LOOKS LIKE WE DID HAVE SOME STARTUP ISSUES.
SO, SO YEAH, AND THANK YOU FOR THAT.
UM, I, SO I DO, I DO, I DID WANNA FOCUS ON THIS CHART BECAUSE IT DOES PROVIDE EVIDENCE THAT, THAT THE ERCOT MARKET IS PRODUCING ENOUGH REVENUE TO SIGNAL NEW, NEW INVESTMENT.
I'LL LINK THAT BACK TO THE NEW INVESTMENT, UH, CHART WHERE WE SAW ONLY 970 MEGAWATTS OF NEW NATURAL GAS FIRED, UH, RESOURCES COME IN.
AND, AND SO, YOU KNOW, OBVIOUSLY THE LINKAGE THERE IS, IS SOME OF THE TIME IT TAKES TO GO FROM PLANNING TO COMMERCIAL OPERATION.
I'LL SAY, HA, HAVING BEEN IN A COUPLE OF OTHER RTOS, UH, TEXAS IS VERY FORTUNATE.
I THINK THE TIME FROM PLANNING TO COMMERCIAL OPERATION IS MUCH SHORTER IN TEXAS THAN IT IS IN OTHER PLACES THAT I'VE BEEN.
UM, YOU KNOW, MOST RECENTLY IN NEW ENGLAND, IT WAS, IT WAS VERY LONG, I WOULD SAY SIX, SEVEN YEARS ON THE SHORT END PROBABLY.
UM, AND THERE WAS SPECULATION THAT THERE WOULD NEVER BE ANOTHER GAS FIRED PLANT BUILT IN NEW ENGLAND IN ANYONE'S LIFETIME.
SO, SO DIFFERENT REGIONS HAD DIFFERENT CHALLENGES.
I THINK THAT THE, THE SHORTER GESTATION PERIOD HERE, UH, TO BECOME COMMERCIAL IS ADVANTAGEOUS, ESPECIALLY IN A ENERGY ONLY MARKET, UM, WHERE YOU CAN SEE A FEW YEARS OF SIGNALING THAT NEW INVESTMENT IS,
[01:10:01]
UH, PROFITABLE, UH, ACTUALLY RESULT IN SOME NEW INVESTMENT, UH, BECOMING COMMERCIAL.UM, IF, IF, IF THAT WAS TRUE, WHY THEN WOULDN'T WE, HAVEN'T WE SEEN MORE NATURAL GAS GENERATION, UH, AND WHY DID IT TAKE LEGISLATIVE ACTION TO ACTUALLY EFFECTIVELY SUBSIDIZE THE FINANCING TO ACTUALLY GET PEOPLE TO BUILD NEW GAS TURBINES IN TEXAS? 'CAUSE WE, I MEAN, 970 MEGABYTES IS A, IS A DROP IN THE BUCKET COMPARED TO THE REQUIREMENT.
SO, SO, YOU KNOW, I ASKED THE SAME QUESTION WHEN I GOT HERE AND SAW THIS CHART AND STARTED LEARNING A LITTLE BIT ABOUT THE TEXAS ENERGY FUND AND SOME OF, SOME OF THE OTHER PROGRAMS. SO I, I THINK ONE OF THE ISSUES THERE IS THE, THE LAG TIME OR, OR GESTATION PERIOD TO GET, UH, A GENERATION PROJECT TO A POINT WHERE IT'S COMMERCIAL OPERATION AND THAT MIGHT BE MORE THAN TWO YEARS.
UM, AND ANOTHER FACTOR IS YOU DO HAVE TO SEE A SERIES, YOU KNOW, AS A, AS A PROJECT DEVELOPER, YOU NEED TO SEE A SERIES OF, UH, REVENUE IN THE MARKET THAT WOULD SUPPORT YOUR INVESTMENT BEFORE YOU UNDERTAKE IT.
AS I NOTED, FOUR OUT OF THE SIX YEARS REPRESENTED HERE, YOU KNOW, WE DO SEE SUFFICIENT REVENUE THAT MAY OR MAY NOT BE ENOUGH, UM, FOR A NEW DEVELOPER TO PULL THE TRIGGER.
I WOULD HAVE TO, AND I'M SORRY I DON'T HAVE THE NUMBER HANDY, BUT I WOULD HAVE TO GO LOOK AT THE QUEUE TO SEE HOW MUCH, UH, THERMAL GENERATION IS QUEUED UP AND I DON'T KNOW WHAT VERY LITTLE IS IT? YEAH, I MEAN, THERE, THERE'S A LITTLE BIT, BUT IT'S LESS THAN 2000 MEGAWATTS.
SO I MEAN, THAT'S A VERY GOOD POINT.
YOU KNOW, ONE OF THE OTHER FACTORS THAT I KNOW FROM PRIOR ENGAGEMENTS AS WELL IS, UM, I, IT HAS DIFFERENT NAMES, BUT, BUT I CALL IT POLICY RISK.
SO IN THE INVESTMENT WORLD, YOU KNOW, POLICY RISK IS A BIG, IS A BIG FACTOR, ESPECIALLY FOR LARGE CAPITAL INVESTMENT, LONG PAYOFF PERIOD, UH, INVESTMENTS.
AND SO I'M NOT, IT DOESN'T APPEAR TO ME THAT TEXAS IS INDICATING THAT THERE IS A POLICY RISK TO NEW INVESTMENT.
UM, EVERYTHING I'VE SEEN IN THE THREE MONTHS I'VE BEEN HERE HAS BEEN FOCUSED ON ENSURING THAT THE REAL TIME MARKET DOES, OR, OR THAT THE ENERGY ONLY MARKET DOES PROVIDE ENOUGH REVENUE TO SIGNAL NEW INVESTMENT AND THAT IT CONTINUES TO DO SO.
SO, SO, UM, I'LL BE, I'LL BE SPENDING MORE TIME TRYING TO FIND A SATISFACTORY ANSWER TO, TO YOUR QUESTION.
I, I, I GUESS TO BE FAIR, ANOTHER, ANOTHER ALTERNATIVE IS THAT OUR NUMBER FOR CONE IS NOT ACCURATE.
SO, AND I THINK THE PC WILL BE YEAH, IF I CAN CHIME IN.
I, I'M GLAD JOHN ASKED THAT QUESTION.
THAT'S A QUESTION I ASKED YOUR PREDECESSOR A COUPLE OF YEARS AGO, IS THAT THIS MARKET IS SIGNALING THAT THERE OUGHT TO BE NEW CONSTRUCTION, BUT THERE'S NOT ANY, AND I ASKED WHY AND THERE REALLY WASN'T A GOOD RESPONSE.
AND SO, YOU KNOW, I I'M GLAD YOU VOLUNTEERED THAT YOU'RE GONNA GO BACK AND LOOK AT THIS BECAUSE I THINK WE NEED TO LOOK AT THE CONE.
IS THE CONE REALLY ACCURATE GIVEN THAT YOU'RE TRYING, YOU'RE, YOU'RE ASKING PEOPLE, OR WHAT WE'RE HOPING IS THE MARKET WILL SIGNAL TO INVESTORS THAT THEY CAN GET A 30 YEAR RETURN ON BUILDING NEW DISPATCHABLE, A GENERATION, WHETHER IT'S THERMAL OR BATTERY OR WHATEVER.
AND SO I HOPE THAT WE CAN MAKE THIS ANALYSIS SOMETHING THAT POLICY MAKERS CAN RELY UPON AND THE MARKET CAN RELY UPON MOVING FORWARD.
YEAH, I THINK YOU, BUT I WOULD JUST ADD TO ALL THAT THOUGH, THAT I THINK MY PERSPECTIVE AND THE REASONS, FIRST OF ALL, NOBODY'S GONNA TRY TO JUSTIFY A GAS PLAN OVER 30 YEARS.
THEY'RE GONNA TRY TO DO IT OVER 15 YEARS FOR ONE, AND IT'S GOTTA BE FINANCEABLE.
AND THE TEXAS MARKET HAS RECENTLY HAS NOT BEEN FINANCEABLE, UH, 'CAUSE THEY DON'T, NOT GONNA DO A HUNDRED PERCENT EQUITY CHECK, RIGHT? THEY ONLY DO A 40% EQUITY CHECK AND 60% PROJECT FINANCE AND THE MARKET FOR SOME OF THE REASONS EVEN THAT JEFF JUST OUTLINED.
IT'S JUST NOT FINANCEABLE AT THE CURRENT MOMENT, WHICH IS WHY THE TEXAS ENERGY FUND IS ACTUALLY WORKING, BECAUSE IT IS FINANCEABLE YEAH.
I GUESS THAT THAT WAS THE POINT I WAS REALLY GETTING AT.
IT TOOK THE, THE TEXAS ENERGY FUND TO CHANGE THIS.
SO THIS SORT OF THEORETICAL ANALYSIS ACTUALLY DOESN'T MAKE ANY SENSE.
WELL, I THINK THE CONE IS RIGHT.
IT'S JUST THAT IT'S NOT FINANCEABLE AND THEN THE TEXAS ENERGY FUND WAS THE BRIDGE TO, TO BRING THE TWO TOGETHER, BUT ASSERTING THAT THE CONE IS WHAT CAUSES PEOPLE TO GO DO A PROJECT, I THINK IS NOT, NOT, NOT ACCURATE.
AND YEAH, THAT'S, THAT'S THE, THE SITUATION HERE IS, I MEAN, THIS, THIS WOULD IMPLY THAT IT'S THAT YOU'RE GONNA BUILD IT AND IF YOU'RE, IF IT'S NOT FINANCEABLE, THEN IT'S NOT GONNA GET BUILT.
AND YEAH, PEOPLE DON'T, PEOPLE DON'T WANNA THE EQUATION OF THE EQUITY, RIGHT? NOBODY WANTS TO DO THAT.
I THINK WE'RE ALL SAYING THE SAME THING.
[01:15:01]
YOU LOOK AT EVEN 23 WITHOUT THE ECRS, YOU'RE PRETTY CLOSE TO, CLOSE TO NOT, NOT BEING A GOOD YEAR FOR MAKING DECISIONS TO INVEST, RIGHT? YEAH, THAT'S CORRECT.SO, AND IF YOU LOOK THE PAST FIVE, SIX YEARS, IT'S A FLUCTUATING APART FROM 21.
SO TO, TO ROB'S POINT, YOU KNOW, IT'S VERY DIFFICULT TO MAKE DECISIONS ON THAT KIND OF DATA.
SO THE, THE MORE ANALYSIS YOU CAN GIVE US ON THAT, I THINK, UH, THE BETTER WE'LL BE OFF.
SO I, I DO BELIEVE I SKIPPED OVER, UM, CONGESTION AND THERE WAS A, THERE WAS A QUESTION ABOUT THAT.
SO, SO I'LL COVER CONGESTION REALLY QUICKLY.
UH, SO REAL TIME CONGESTION COSTS WERE DOWN, UH, 15%.
SO, UH, ON THE SURFACE YOU MIGHT, YOU MIGHT LOOK AT THAT AND SAY, WELL, THAT'S PRETTY CLOSE TO THE 13% THAT ENERGY PRICE WAS DOWN.
AND SO THAT'S WHAT I WOULD EXPECT.
I WOULD ACTUALLY EXPECT IF CONGESTION STAYED THE SAME AND ENERGY PRICE MOVED 13%, I'D EXPECT CONGESTION COSTS TO MOVE ABOUT THAT AS WELL.
UM, BUT CONGESTION'S EXTREMELY COMPLICATED CONGESTION COSTS ARE ALWAYS VERY COMPLICATED TO DESCRIBE BECAUSE THERE'S A LOT OF THINGS HAPPENING.
SO IN ANY ONE YEAR, CONGESTION CAN BE EXACERBATED OR RELIEVED BASED ON PROLONGED UNIT OUTAGES BASED ON, UM, TRANSMISSION UPGRADES OR TRANSMISSION OUTAGES FOR UPGRADES.
UM, WEATHER TEXAS, YOU KNOW, HAVING BEEN HERE THREE MONTHS, I'LL SAY I'M VERY IMPRESSED WITH THE VARIABILITY OF TEXAS WEATHER SO FAR.
UM, AND I'VE ONLY BEEN IN AUSTIN.
I, YOU KNOW, I UNDERSTAND IT'S VERY DIFFERENT IN DALLAS AND HOUSTON AND SO FORTH.
SO CHANGES IN WEATHER PATTERNS CAN AFFECT CONGESTION AS WELL.
SO I THINK THE, THE QUESTION THAT WAS ASKED WAS, YOU KNOW, WHAT, WHAT, WHAT WAS DRIVING THE, THE CONVERGENCE IN ENERGY PRICES OR, OR CONVERSELY, UM, WHAT WAS DRIVING THE REDUCTION IN CONGESTION, UH, BETWEEN ZONES IN TEXAS? AND THERE ARE A COUPLE OF ANSWERS TO THAT AT A HIGHER LEVEL.
UM, BUT, BUT I THINK WHAT WE SAW MOSTLY WAS PROBABLY THE EFFECT OF ABOUT SIX DIFFERENT THINGS HAPPENING, UH, BETWEEN THE TWO YEARS.
ONE OF THE DRIVERS WAS THAT THERE WERE SOME UPGRADES IN THE, IN THE HOUSTON AREA THAT REALLY, UH, REDUCED THE LEVEL OF CONGESTION BETWEEN HOUSTON AND, UH, NEIGHBORING ZONES.
SO THAT, THAT WAS ONE OF THE BIG FACTORS THAT AFFECTED THE CONGESTION THERE.
UM, BE BEYOND THAT, YOU KNOW, AS I, AS I MENTIONED, THERE WERE SEVERAL THINGS, THE WEATHER PATTERNS WERE DIFFERENT BETWEEN, BETWEEN THE TWO YEARS.
UM, GENERATION OUTAGES WERE DIFFERENT BETWEEN THE TWO YEARS.
AND SO IT WASN'T, UM, STRAIGHTFORWARD FOR US TO NARROW IT DOWN TO A SORT OF DEFINITIVE LIST OF WHAT REDUCED THAT CONGESTION.
UH, AND LAST SLIDE, UH, WE DID MAKE FOUR RECOMMENDATIONS, UH, IN THE 2023 REPORT.
AND, AND I'M, I'M HAPPY TO ADDRESS ANY OF THESE, IF YOU CAN EVEN READ THEM.
THE PRINT IS SO SMALL, IT LOOKS LIKE YOU ALL HAVE YOUR OWN DEVICES.
UM, SO THE FIRST SUGGESTION HAS TO DO WITH, UM, INCREASING THE CONSTRAINT SHADOW PRICES TO MAKE MORE GENERATION REACHABLE IN THE REAL TIME MARKET TO HELP RESOLVE CONGESTION.
UH, AND I KNOW BECAUSE I'VE HAD, UH, CONVERSATIONS WITH ERCOT STAFF THAT THAT CHANGE IS BEING ANTICIPATED AND IS UNDERWAY.
UH, THE SECOND RECOMMENDATION THAT WE MADE IS MODIFYING PROXY OFFER CURVE FOR RENEWABLE RESOURCES THAT DID NOT SUBMIT AN ENERGY OFFER CURVE.
AND THE ISSUE WITH THAT IS, UH, THE WAY THE, THE WAY THAT CIRCUMSTANCE IS BEING DEALT WITH RIGHT NOW, UH, INVOLVES EXTREME PRICES.
SO, UH, A RENEWABLE RESOURCE THAT HAS, THAT DOES NOT SUBMIT AN OFFER CURVE, UM, IS EITHER PRICED AT, I BELIEVE IT'S MI MINUS $250 A MEGAWATT HOUR, OR THE OFFER PRICE CAP.
AND SO THAT RESULTS IN EXTREME PRICING WHENEVER THOSE RESOURCES NEED TO BE REACHED BY THE REAL TIME MARKET IN ORDER TO EITHER MEET LOAD, LOAD, RAMP, OR RESOLVE CONGESTION.
AND WE FEEL THAT, THAT THERE'S A DIFFERENT OFFER CURVE THAT COULD BE PUT IN FOR THEM IF THEY DON'T SUBMIT AN OFFER CURVE THAT MORE CLOSELY REFLECTS THEIR VARIABLE COSTS AND WILL RESULT IN BETTER PRICE FORMATION.
UH, THE THIRD RECOMMENDATION IS IMPROVE PROCUREMENT AND DEPLOYMENT OF ECRS.
AND AS EVERYONE KNOWS THAT, UM, HAS BEEN TAKEN UP, UH, AND IS UNDERWAY, UM, FROM A MARKET MONITORING PERSPECTIVE, WE, WE, WE DISAGREE WITH THE APPROACH THAT'S BEING TAKEN, BUT, UH, BUT WOULD NOTE THAT ERCOT WAS QUICK TO TAKE UP, UH, THAT IMPROVEMENT AND FOLLOW IT THROUGH ROOM.
UH, AND THE FOURTH IMPROVED THE PRICING OF OFFER REQUIREMENTS OF FIRM
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FUEL SUPPLY SERVICE.SO, SO THIS FOURTH RECOMMENDATION REALLY GETS TO JUST REQUIRING THAT FIRM FUEL SUPPLY RESOURCES OFFER IN AT WHAT WOULD BE, UH, SOMETHING CLOSE TO THEIR VARIABLE COST, UH, AND REFLECT FIRM FUEL SUPPLY.
SO, UM, AND I'M, I, I CAN'T SPEAK TO WHERE THAT IS, BUT I DO, I HAVE HAD A CONVERSATION ABOUT IT, SO I KNOW IT'S BEING CONTEMPLATED AT OR CAUGHT.
SO, SO THOSE ARE THE HIGHLIGHTS OF THE REPORT.
IT'S A 200 AND SOMETHING PAGE REPORT, SO THERE'S MORE INFORMATION IN IT, UH, THAN WHAT I PRESENTED TODAY.
UM, BUT I'M HAPPY TO ANSWER ANY QUESTIONS OR HAVE A DISCUSSION IF ANYONE WOULD LIKE.
UH, I THINK WOODY HAS HIS HAND UP OVER THERE.
HEY, JEFF, DO YOU HAVE ANY, UH, RECOMMENDATIONS OR IM HAVE ANY RECOMMENDATIONS ABOUT THE, UH, BIDDING PRICE BATTERIES? HAVE THAT, THAT, THAT NUMBER, UH, WAS IT IN YOUR LIST? IS THAT SOMETHING YOU GUYS ARE LOOKING AT? WE, WE ARE ACTUALLY ACTIVELY STUDYING THAT RIGHT NOW, SO, UM, I DON'T, I DON'T HAVE ANYTHING I CAN SHARE WITH YOU THAT WOULDN'T INVOLVE A DISCUSSION OF COMMERCIALLY SENSITIVE, UH, INFORMATION, BUT I'D BE HAPPY TO TALK WITH YOU OFFLINE ABOUT IT.
BUT, BUT IT'S SOMETHING THAT WE ARE LOOKING INTO ACTIVELY.
MR. CHAIRMAN, I GOT A QUESTION, JULIE, JEFF, UH, WE APPRECIATE YOUR REPORT AND, UH, I LOOK FORWARD TO DIVING IN THE 200 PAGES A LITTLE BIT FURTHER.
KINDA LOOKING FORWARD TO THE FUTURE WHEN THE PUC HAS AN APPROVED RELIABILITY STANDARD.
MM-HMM,
SO THAT WOULD BE A MORE EXPLICIT WAY FOR US TO EVALUATE THEM.
UM, IF IT IS SIMPLY JUST A RELIABILITY STANDARD THAT EXISTS ON ITS OWN OUTSIDE OF THE MARKET, THAT'S SOMETHING THAT WE COULD REPORT ON BASED ON OUR ASSESSMENT OF, UM, INSTALL GENERATION, THE QUEUE AND, AND SO FORTH.
BUT, BUT IT'S, BUT IT'S EASIER AND MORE INSIGHTFUL, I BELIEVE, TO THE EXTENT THAT A RELIABILITY STANDARD, THOSE STANDARDS ARE ENCAPSULATED IN THE MARKET PRODUCTS AND PRICED APPROPRIATELY, AND THEN WE CAN TRACK AND, AND REPORT ON THEM.
YEAH, WE LOOK FORWARD TO YOUR RECOMMENDATIONS AND HOW THEY MIGHT BE USED OPERATIONALLY.
OTHER COMMENTS OR QUESTIONS? ALRIGHT, THANK YOU, JEFF.
ALL RIGHT, THANK YOU VERY MUCH.
[9. TAC Report ]
UM, AT, AT THIS TIME, I'D LIKE TO INVITE KAITLYN SMITH, CHAIR OF THE TECH TECHNICAL ADVISORY COMMITTEE TO PRESENT AGENDA ITEM NUMBER NINE, TAC REPORT.THERE ARE TWO NON UNANIMOUS REVISION REQUESTS AS VOTING ITEMS UNDER THET REPORT TODAY.
UH, NPRR 1224 AND N-O-G-R-R 2 45.
AFTER CAITLYN REPORTS ON TAX RECOMMENDATIONS ON NPRR 1224 AND NOBERT 2 45 R AND M COMMITTEE CHAIR BOB FLEXON WILL REPORT ON THE R AND M COMMITTEE'S.
DISCUSSION AND RECOMMENDATIONS.
GOOD MORNING, OR I THINK IT'S THE MORNING.
I'M KAITLYN SMITH, CHAIR OF THE TECHNICAL ADVISORY COMMITTEE.
THANKS FOR THE OPPORTUNITY TO PRESENT TO YOU.
AS WE DO AT EACH BOARD MEETING, I'LL BE PRESENTING A SUMMARY OF THE TAC MEETINGS THAT HAVE OC OCCURRED SINCE THE APRIL BOARD.
WE HAD A REGULAR MAY TAC MEETING ON MAY 22ND.
WE ADDITIONALLY HELD A TECH WORKSHOP ON MAY 10TH AND ADDITIONAL TAC MEETINGS ON MAY 31ST AND JUNE 7TH, UH, PART IN PARTICULAR TO CONSIDER NO G 2 45.
WE UNANIMOUSLY VOTED TO RECOMMEND APPROVAL OF 12 REVISION REQUESTS, AND AS YOU STATED, THERE WERE TWO REVISION REQUESTS WITH OPPOSING VOTES.
SO THERE'S A SMALL TYPO ON THIS SLIDE.
IT, IT'S ACTUALLY 14 TOTAL REVISION REQUESTS TODAY INSTEAD OF 15.
AND HERE'S THAT LIST OF THE 12 UNOPPOSED REVISION REQUESTS, AND THEN THE TWO WITH OPPOSING VOTES THAT WERE CONSIDERED AT R AND M YESTERDAY.
SO THE NPRR 1224 ECRS MANUAL DEPLOYMENT TRIGGERS AND NORE 2 45 INVERTER BASED RESOURCE RIDE THROUGH REQUIREMENTS.
HERE ARE YOUR MAY AND JUNE TAC HIGHLIGHTS.
SO AT THE UM, MAY 22ND TAC MEETING, WE UNANIMOUSLY VOTED TO ENDORSE THE ENCORE WEST TEXAS 3 45 KV INFRASTRUCTURE REBUILD PROJECT AS RECOMMENDED
[01:25:01]
BY ERCOT.ALSO, AT THE MAY 22ND TECH MEETING, WE UNANIMOUSLY VOTED TO ENDORSE THE MITIGATED OFFER CAPS FOR HYDRO RESOURCES.
WHEN WE GET TO REAL-TIME CO-OP OPTIMIZATION THAT CAME FROM THE RTC PLUS BATTERIES TASK FORCE.
UM, HERE, GIVEN THAT HYDRO RESOURCES OPERATING AND SYNCHRONOUS CONDENSER MODE ARE NOT SC DISPATCHABLE, THE MITIGATED OFFER CAP WOULD BE SET TO THE REALTIME SYSTEMWIDE OFFER CAP.
AND HERE IT ALSO JUST INDICATES THOSE SPECIAL MEETINGS WE HAD TO CONSIDER NOUR 2 45.
WE HAD THAT ADDITIONAL WORKSHOP, WHICH WAS DESIGNATED SEPARATELY BECAUSE IT WAS A NON-VOTING MEETING.
SO NPR 1224 REGARDING ECRS MANUAL DEPLOYMENT TRIGGERS INTRODUCES A TRIGGER THAT ERCOT MAY USE TO MANUALLY RELEASE ECRS FROM SC SCED DISPATCHABLE RESOURCES WHEN THE SYSTEM POWER BALANCE CONSTRAINT IS CONSISTENTLY VIOLATED BY AT LEAST 40 MEGAWATTS FOR 10 CONSECUTIVE MINUTES.
UM, THIS ALSO REQUIRES THE NPRR ALSO REQUIRES THE ENERGY OFFER.
CURVES FOR THE CAPACITY ASSIGNED TO ECRS BE OFFERED AT NO LESS THAN $750 PER MEGAWATT HOUR.
THE ORIGINAL PROPOSAL FOR THIS NPRR CAME FROM AN IMM RECOMMENDATION TO RELEASE BLOCKS OF ECRS AT CERTAIN AMOUNTS OF UNDER GENERATION.
THE ORIGINAL PROPOSAL WAS FOR A 30 MEGAWATT THRESHOLD FOR THAT POWER BALANCE CONSTRAINT VIOLATION.
WE DID, UH, CONSIDER DATA PRESENTED BY ERCOT REGARDING NEW DEPLOYMENTS THAT WOULD'VE OCCURRED IF, IF THIS HAD BEEN IMPLEMENTED WITH THE ORIGINAL IMPLEMENTATION OF ECRS AND, AND DAYS THAT WOULD'VE HAD ECRS UNDER EITHER OPTION AND STAKEHOLDERS ARRIVED AT THAT 40 MEGAWATT THRESHOLD INSTEAD OF THE 30.
THE OTHER PART OF THE NPRR WAS PART OF A COMPROMISE POSITION THAT WAS VOTED THROUGH.
TAC TAC REQUIRES A, A SUPER MAJORITY OF STAKEHOLDERS, SO A TWO THIRDS VOTE, AND THAT INCLUDED THE PRICE FLOOR.
THE INTENTION OF PEOPLE WHO WHO VOTED FOR THIS PRICE FLOOR WAS TO MIMIC THE PRICE OF THE ANCILLARY SERVICE DEMAND CURVE FOR ECRS THAT WOULD BE IN PLACE UNDER REALTIME CO-OP OPTIMIZATION AND CORRESPOND TO THAT RELEASE OF 500 MEGAWATTS OF ECRS THAT THAT WOULD BE RELEASED HERE.
SO THAT 750 OFFER FLOOR COMES ALSO FROM SOME ERCOT ERCOT ANALYSIS THAT WAS PRESENTED TO TAX WHOLESALE MARKET SUBCOMMITTEE, UM, THAT THE AVERAGE PRICE AT WHICH 500 MEGAWATTS OF ECRS IS TRADED OFF FOR, FOR ENERGY UNDER RTC IS $780.
THAT WAS KIND OF A MACRO LEVEL AVERAGE.
THERE WERE 10 OPPOSING VOTES, SO UNANIMOUSLY OPPOSED IN TWO SEGMENTS.
UM, THE CONSUMER SEGMENT AND THE IRE SEGMENT, AND THEN THE REMAINING SEGMENTS UNANIMOUSLY VOTED FOR THIS NPRR AND THE OPPOSITION, UM, WAS REALLY SUPPORTIVE OF THE EARLIER DEPLOYMENT OF THE CHUNKS OF ECRS, BUT OPPOSITION TO THE OFFER FLOOR WITH THE FEELING THAT EITHER AN OFFER FLOOR WAS ENTIRELY INAPPROPRIATE OR THAT IT SHOULD BE A LOWER NUMBER.
UM, OTHER NUMBERS THAT WERE MENTIONED WERE THE $250 THRESHOLD OR $500.
THERE WERE SOME COMMENTS ADDITIONALLY RECEIVED AFTER T UM, JUNE 4TH COMMENTS FROM THE IMM JUNE 6TH COMMENTS FROM ASPIRE POWER VENTURES.
JUNE 10TH, COMMENTS FROM JOINT COMMENTERS REPRESENTING CONSUMERS JUNE 10TH, COMMENTS FROM JOINT COMMENTERS REPRESENTING GENERATORS JUNE 12TH, COMMENTS FROM THE IMM JUNE 15TH, COMMENTS FROM ERCOT.
I BELIEVE THOSE JOINT COMMENTERS FROM THE CONSUMER SEGMENT OFFERED A HUNDRED DOLLARS FLOOR.
THERE WAS A ROBUST DISCUSSION YESTERDAY AT R AND M.
THERE IS ANOTHER NPRR IN THE TAC PROCESS.
IT'S CURRENTLY A PRS, IT'S MPRR 1232, AND IT, THAT WOULD AUTOMATICALLY RELEASE SOME AMOUNT OF ONLINE ECRS AND THAT WOULD SORT OF SUPPORT HAVING THE HIGHER PRICE FOUR LEVEL.
SO I BELIEVE THE BOARD IS LOOKING FOR US TO COME BACK WITH THAT URGENTLY.
I WILL PAUSE THERE AT 1224 OR SHOULD I KEEP GOING TO, TO NOER 2 45? AND, AND THEN YOU'LL, I I THINK YOU CAN GO AHEAD AND THEN WE'LL INVITE, DISCUSS.
SO NOER 2 45, UM, IS THE INVERTER BASED RESOURCE RIDE THROUGH REQUIREMENTS NO G THAT WE'VE DISCUSSED HERE.
AND THANK YOU TO THE VICE CHAIR COLIN MARTIN FOR BEING HERE IN APRIL.
UM, WE HAVE DISCUSSED THIS NO GT TAX SINCE AUGUST OF 2023.
WE HAVE HAD IT AS OF VOTING ITEM SINCE SEPTEMBER OF 2023.
WE, WE TABLED IT ATTAC LATE LAST YEAR FOR ERCOT TO CONDUCT
[01:30:01]
AN RFI.UM, AND THEN WE, WE HAD SOME DISCUSSIONS OFFLINE, PRIMARILY BETWEEN JOINT COMMENTERS IN THIS CASE, INVENERGY AND TER SOUTHERN POWER OVEN GRID AND CLEARWAY AND ERCOT EARLY THIS YEAR.
AND THEN HAD ACT ACTIVE DISCUSSIONS AT AT TAC FOLLOWING THE MARCH 27TH TAC MEETING OR CO FILED COMMENTS OPPOSING THAT MARCH TAC APPROVED VERSION.
AND, AND THIS BOARD REMANDED THE NO GO BACK TWO TAC AS I'VE STATED ALREADY, WE HAD, UH, ADDITIONAL TAC MEETINGS, THREE ADDITIONAL TAC MEETINGS, UM, SINCE THE APRIL BOARD MEETING, UH, A WORKSHOP WHERE WE REALLY EDUCATED OURSELVES WITH INDEPENDENT EXPERTS ON, ON NERC AND IEEE STANDARDS.
THE TEXAS RELIABILITY ENTITY CAME AND PRESENTED TO US.
WE HAD A ROBUST DISCUSSION ABOUT MODELING AND THEN TWO ADDITIONAL VOTING ITEMS. UM, SO I BELIEVE ERCOT SUPPORTED THE APPROVAL OF NOUR 2 45 AS RECOMMENDED BY THE VOTE THAT WE DID END UP TAKING ON JUNE 7TH.
UM, AND THAT, THAT NEW VERSION OF THE NOUR REFLECTED A A DATE AT WHICH THE, THE SUPPLIES NEW RESOURCES, REFLECTING AUGUST ONE OF THIS YEAR, UM, THERE WAS AN INDICATION OF RESOURCES NEEDED TO, UM, IMPLEMENT STANDARDS UP TO MAXIMIZING THEIR CAPABILITY.
AND THEN THE KIND OF TECH COMPROMISE HERE WAS A GRAY BOX, WHICH JUST EFFECTIVELY MADE THE LANGUAGE SUCH THAT IT WOULD NOT BE IMPLEMENTED FOR NINE MONTHS.
AND THAT THE GRAY BOX WAS RELATED TO THE THRESHOLD FOR HARDWARE CHANGES.
SO THAT WAS THE COMMERCIAL REASONABILITY ISSUE.
UM, THE GRAY BOX LANGUAGE CONTAINED A 40% COST THRESHOLD AND, AND THE INTENT OF GRAY BOXING THAT, OR DELAYING IMPLEMENTATION, WAS REALLY TO BIFURCATE THAT, THAT NARROW ISSUE OUT AND GIVE STAKEHOLDERS MORE TIME TO GET TO CONSENSUS THERE.
SO WE ARE SUPPORTIVE OF THAT KIND OF BIFURCATION OR DECOUPLING APPROACH.
UH, THERE WAS ONE OPPOSING VOTE IN THE I REP SEGMENT, AND AGAIN, IN THIS REVISION REQUEST, THERE HAVE BEEN COMMENTS FILED SINCE, SINCE TAC UM, THERE WAS A OPPOSITION FILED ON JUNE 10TH BY JOINT COMMENTERS THAT I MENTIONED ALREADY.
AND THEN ON JUNE 11TH, 18, TECH OPPOSITIONS, I BELIEVE THOSE ARE ALL IN ENERGY ENTITIES.
UM, JUNE 16TH, ERCOT COMMENTS, THERE WAS A VERY ROBUST DISCUSSION YESTERDAY AT R AND M.
THOSE COMMENTS ARE OUTSIDE OF THE TECH PROCESS NOW, AND THE EXPECTATION IS OUTSIDE OF THE T PROCESS.
THERE WOULD BE DISCUSSION BETWEEN, UM, OR NEGOTIATIONS BETWEEN JOINT COMMENTERS AND ERCOT, UM, ON, ON NOER 2 45.
AND THEN THE BOARD, I BELIEVE, WOULD DIRECT A SUBSEQUENT NOER THAT WOULD GO THROUGH THE T PROCESS AND RETURN HERE IN DECEMBER.
I WILL PAUSE THERE OR END THERE UNLESS THERE ARE QUESTIONS FOR ME.
ANY QUESTIONS FOR KAITLYN? IF NOT, BOB, DO YOU WANT TO SURE SAY THIS? THE R AND M COMMITTEE YESTERDAY DID CONSIDER NPRR 1224.
IN ADDITION TO TAX REPORT ON ITS RECOMMENDATION, THE COMMITTEE HEARD IN-PERSON COMMENTS FROM MURCOTT STAFF, THE INDEPENDENT MARKET MONITOR, TEXAS INDUSTRIAL ENERGY CONSUMERS AND TRO THE RM COMMITTEE RECOMMENDED APPROVAL OF NPRR 1224 AS RECOMMENDED BY TAC WITH ONE OPPOSING VOTE BY COURTNEY ALTMAN FOR OPAC.
THE COMMITTEE ENCOURAGES STAKEHOLDERS TO MOVE NPRR 1232 THROUGH THE STAKEHOLDER PROCESS AS EXPEDITIOUSLY AS POSSIBLE SINCE IT PROVIDES FOR THE AUTOMATED RELEASE OF ECRS TO SCED WITHOUT THE NEED FOR A MANUAL ERCOT DEPLOYMENT INSTRUCTION.
SO I MOVE TO RECOMMEND APPROVAL OF NPRR 1224 AS RECOMMENDED BY TAC.
IS THERE ANY FURTHER DISCUSSION? UH, DO I HAVE A SECOND, CARLOS? ALRIGHT.
ANY OPPOSED? ANY ABSTENTIONS? ALRIGHT, ABSTAINED BY COURTNEY.
OKAY, SO THE R AND M COMMITTEE, WE ALSO CONSIDERED NO 2 45, WHICH THE BOARD REMAN REMANDED TO TAC IN APRIL FOR FURTHER CONSIDERATION.
AND TAC RECOMMENDED A REVISED VERSION OF NO FOR OF THE NOGA FOR APPROVAL IN JUNE.
IN ADDITION TO TAX REPORT ON ITS RECOMMENDATION THAT COMMITTEE'S DELIBERATIONS INCLUDED IN-PERSON COMMENTS BY ERCOT STAFF AND NEXTERA, THE R AND M COMMITTEE UNANIMOUSLY RECOMMENDED THE BOARD TABLE NO, 2 45 TO ALLOW ERCOT AND JOINT COMMENTERS AND ANY OTHER STAKEHOLDERS TO WORK ON LANGUAGE THAT WOULD BIFURCATE PARTS OF THE EXEMPTION PROCESS FRAMEWORK INTO A FUTURE BOARD PRIORITY REVISION REQUEST.
[01:35:01]
THE COMMITTEE RECOGNIZED THAT THERE MAY NEED TO BE A SPECIAL R AND M COMMITTEE AND BOARD MEETINGS IN JULY TO CONSIDER NOGO 2 45 INSTEAD OF THE NEXT REGULAR MEETINGS IN AUGUST IF THE PARTIES ARE ABLE TO REACH AGREEMENT ON THE BIFURCATION LANGUAGE.WITH THAT, I MOVE TO TABLE, NO, 2 45.
ALL RIGHT, I'LL SECOND THAT MOTION MORE THE VOTE, RIGHT? OKAY.
UM, SO WE HAVE A MOTION TO TABLE PEGGY SECOND, BUT I HAVE A QUESTION AFTER A SECOND.
YOU SAID, UH, THAT IT WAS INSTRUCTIONS TO GET IT BACK TO THE BOARD 2 45.
I THOUGHT I HEARD COURTNEY SAY DECEMBER, WHICH KIND OF THREW ME, UH, KAITLYN.
SORRY, KAITLYN, DID YOU, DID YOU SAY IT WOULD COME BACK IN DECEMBER? DID I MISS HEAR THAT, THAT, SO MY UNDERSTANDING IS, UH, A, A NARROW ISSUE REGARDING HARDWARE WILL BE BIFURCATED OR SEPARATED OR DECOUPLED.
WE'VE USED SEVERAL WORDS OUT OF NOER 2 45 AND NOER 2 45 WOULD COME BACK TO YOU AT EITHER A SPECIAL MEETING IN JULY OR IN AUGUST.
AND, AND THE NEGOTIATIONS ON THAT WOULD BE SORT OF NEGOTIATIONS WITH JOINT COMMENTERS AND ERCOT AND NOT GO THROUGH THE TAC PROCESS.
BUT THEN THE ISSUE THAT WE ARE SEPARATING OUT WITH HARDWARE WOULD BE IN A BOARD RECOMMENDED OR A BOARD URGENCY NOER THAT WOULD IDEALLY GET BACK TO YOU IN DECEMBER.
AND THAT IS A VERY AGGRESSIVE TIMELINE.
I, I THINK FOR, FOR TAC AND STAKEHOLDERS ON THIS ISSUE.
SO THE THINGS WE AGREE UPON, YEAH, WE WANNA APPROVE QUICKLY.
AND FOR THE TOUGHER ONES, YOU CLARIFIED THE DECEMBER COMMENT.
SO GIVEN THAT YOU SECOND THE MOTION, I SECOND.
ANY, UH, WELL, AND AND JUST TO BE CLEAR, THE, THE MOTION IS JUST A TABLE 2 45, CORRECT? ALL THE OTHER COMMENTS FROM KAITLYN ARE CONTINGENT UPON US BEING ABLE TO BRING BACK A VERSION THAT ACHIEVES THOSE OTHER RESULTS.
UM, SO WE HAVE A MOTION A SECOND.
ANY OPPOSED, ANY ABSTENTION? WE GOOD? ALRIGHT, SO THAT PASSES.
[10. Finance and Audit (F&A) Committee Report ]
NEXT WE HAVE OUR COMMITTEE REPORTS.UH, FIRST BILL WILL PRESENT AGENDA ITEM 10, WHICH IS THE FINANCE AND AUDIT COMMITTEE REPORT.
UH, YESTERDAY THE FINANCE AND AUDIT COMMITTEE DURING REGULAR SESSION, UH, INCLUDED ONLY OUR STANDARD RECURRING RECURRING ITEMS. UH, WE LOOKED AT WHICH ARE THE NORMAL COMMITTEE BRIEFS, AND WE ARE, UM, WE LOOKED AT THE, UH, FINANCIAL PERFORMANCE OF THE ORGANIZATION.
UH, WE ALSO REVIEWED, UH, THE INVESTMENT PORTFOLIO AND ITS COMPLIANCE WITH THE, UM, WITH OUR CURRENT POLICIES.
WE THEN FINALLY REVIEWED THE, UM, UH, CREDIT, UH, REQUIREMENTS OF THE ORGANIZATION AND THE CERTIFICATES THAT ARE PROVIDED TO OUR LENDING CONSTITUENTS.
UH, AND WE, AS YOU'D EXPECT, THE, UH, THE COMPANY, UH, MET ALL OF ITS REQUIREMENTS, UH, IN THOSE LETTER TWO AREAS.
LASTLY, WE UH, LOOKED AT THE FUTURE CALENDAR OF ITEMS TO BE DISCUSSED, AND IN AUGUST WE'LL BE TAKING UP THE FOLLOWING.
WE'LL LOOK AT OUR INSURANCE, UH, ERCOT INSURANCE RENEWALS.
WE'LL LOOK AT THE COMMISSION ORDERED, UH, OPERATING BUDGET RECONCILIATION, UH, WHICH CAME OUT OF THE BUDGET HEARINGS AND FROM THE PUC LAST YEAR.
UH, WE'LL ALSO BE HAVING A DISCUSSION WITH OUR FINANCIAL AUDITORS REGARDING THE PLANNING FOR THE 2024 AUDIT FOR THE YEAR ENDED DECEMBER 31ST, 2024, AND WE'LL BE RECEIVING THE RESULTS OF THE 2023 401K PLAN SAVINGS AUDIT.
AND THERE ARE NO VOTING ITEMS, SO, UH, THANK YOU.
[11. Human Resources and Governance (HR&G) Committee Report ]
UH, NEXT PEGGY HEAG WILL PRESENT AGENDA ITEM 11, THE HR AND G COMMITTEE REPORT, WHICH WAS, WHICH HAS TWO ASSOCIATED VOTING ITEMS. PEGGY, I'LL DEFER TO YOU ON WHETHER YOU WANNA PACKAGE THESE AS ONE OR AS TWO OR ONE.UH, AS YOU MENTIONED, THE, THE HRG COMMITTEE, UH, VOTED ON TWO GEN ITEMS IN GENERAL SESSION.
FIRST, THE COMMITTEE VOTED TO RECOMMEND THAT THE BOARD APPROVE AMENDMENTS TO THE BOARD POLICIES AND PROCEDURES.
UH, THESE REVISIONS CLARIFY THE REVISION REQUEST PROCESS AND ALSO SAY, MAKE SOME MINOR CLARIFICATIONS.
UH, WE, WE HEARD FROM, UH, STAFF THE PROCESS THEY WENT THROUGH TO GET TAX INPUT AND THE RN M COMMITTEE ALSO REVIEWED THOSE POLICIES AND I THINK THEY'LL BE
[01:40:01]
RECOMMENDING APPROVAL.SO WE RECOMMEND THE BOARD APPROVE THAT THE REVISED POLICY.
SECOND, THE COMMITTEE VOTED TO RECOMMEND THAT THE BOARD RATIFY KEITH COLLINS AS THE NEW VICE PRESIDENT OF OPERATIONS OF ER COTTON.
WE'RE VERY EXCITED TO HAVE HIM ON BOARD.
SO I, I'M GONNA COMBINE THOSE TWO AND MOVE TO RECOMMEND THAT THE, THE BOARD APPROVE THESE TWO ITEMS AS RECOMMENDED BY THE HUMAN RESOURCES AND GOVERNANCE COMMITTEE.
DO WE HAVE A SECOND, JOHN? ALL IN FAVOR? AYE.
ANY OPPOSED? ALRIGHT, THAT MO, BOTH THOSE MOTIONS PASSED.
THE, THE COMMITTEE ALSO DISCUSSED, UH, A FEW OTHER ITEMS THAT I'LL JUST MENTIONED FOR, UH, THE BOARD'S AWARENESS.
WE, UH, RECEIVED A HUMAN RESOURCES OPERATIONS REPORT FROM MORRIS SPAC.
UH, THE HUMAN RESOURCES GROUP HAS BEEN QUITE ACTIVE.
UH, THEY'VE ADDED 44 EMPLOYEES YEARS TO DATE.
THE GOOD NEWS IS THE ATTRITION RATES THAT WERE, YOU KNOW, NE NEGATIVE, UH, POSTY, THEY HAVE APPEARED TO CONTINUE TO BE STABILIZED, SO THAT'S POSITIVE.
UH, WE ALSO RECEIVED A REPORT ON AND DISCUSSED THE BOARD AND EMPLOYEE CONFLICT OF INTEREST, UH, POLICIES AND, AND THE REVIEW PROCESS.
UH, STAFF WENT OVER THE EMPLOYEE, THERE WERE NO DIRECT OR CONFLICT OF INTEREST ISSUES DISCLOSED.
UH, THE EMPLOYEE DISCLOSURES, UH, PRIMARILY THE VAST MAJORITY OF THEM WERE, UH, JUST DISCLOSING AS THEY SHOULD, UH, THAT AN EMPLOYEE, UH, HAS A RELATIVE THAT WORKS FOR A MARKET PARTICIPANT.
UH, EACH OF THE ITEMS THAT WERE DISCLOSED BY EMPLOYEES WERE, UM, REVIEWED BY STAFF.
WE SAW THE SUMMARIES AND THE ACTIONS TAKEN JUST IN THOSE CASE TO REMIND EMPLOYEES OF THEIR CONFIDENTIALITY OBLIGATIONS.
UH, SO ALL, ALL THE DISCLOSURES THAT WERE MADE, WHICH WERE APPROPRIATE WERE MITIGATED.
[12. Reliability and Markets (R&M) Committee Report ]
UH, NEXT BOB FLEXON WILL PRESENT AGENDA ITEM 12, THE R AND M COMMITTEE REPORT, WHICH, UH, HAS TWO ASSOCIATED VOTING ITEMS. AND AGAIN, IT'S UP TO YOU WHETHER TO COMBINE THOSE OR TAKE 'EM SEPARATELY.IN ADDITION TO THE COMMITTEE'S RECOMMENDATIONS REGARDING THE REVISION REQUESTS THAT WE DISCUSSED EARLIER, THE COMMITTEE YESTERDAY CONSIDERED TWO ADDITIONAL VOTING ITEMS THAT ARE INCLUDED IN THE MATERIALS.
THE COMMITTEE YESTERDAY CONSIDERED REVISIONS TO ITS CHARTER AND RECOMMENDED BOARD APPROVAL.
THE REVISIONS CORRESPOND TO AMENDMENTS TO THE BOARD POLICIES AND PROCEDURES AND CLARIFY OTHER COMMITTEE PRACTICES.
SO WITH THAT, I MOVE APPROVAL OF THE R AND M COMMITTEE CHARTER CONSISTENT, UH, WITH THE RED LINES.
ALRIGHT, UH, DO I HAVE A SECOND? I'LL SECOND.
THE ENCORE WEST TEXAS INFRASTRUCTURE REBUILD PROJECT IS A TIER ONE PROJECT ESTIMATED TO COST $1.12 BILLION TO ADDRESS THERMAL OVERLOADS AND LOAD GROWTH IN THE WEST AND FAR WEST WEATHER ZONES.
THE PROJECT WAS IDENTIFIED AS A PREFERRED PROJECT, UH, FROM ERCOT 2021 PERMIAN BASIN LOAD INTERCONNECTION STUDY.
RPG REVIEW WAS ASSESSED BY ERCOT STAFF AND RECEIVED UNANIMOUS ENDORSEMENT BY TAC AND BY THE R AND M COMMITTEE.
SO WITH THAT, I MOVE TO ENDORSE THE ENCORE WEST TEXAS 3 45 KV INFRASTRUCTURE REBUILD RPG PROJECT BASED ON NERC AND ERCOT RELIABILITY PLANNING CRITERIA.
WE HAVE A MOTION AND A SECOND.
SO, ADDITIONAL STANDING BRIEFS TO THE COMMITTEE YESTERDAY INCLUDED THE FOLLOWING, ERCOT STAFF FILED A REVISION REQUEST TO IMPLEMENT DISPATCHABLE RELIABILITY AND RESERVE SERVICE AS A NEW STANDALONE ANCILLARY SERVICE.
THE NPRR AND DISPATCHABLE GENERATION WILL BE KEY TOPICS OF STAKEHOLDER DISCUSSION THIS SUMMER.
TWO RESOURCES IN THE AGGREGATE DISTRIBU DISTRIBUTED DISTRIBUTED ENERGY RESOURCES PILOT PROJECT WERE SUCCESSFULLY QUALIFIED TO PROVIDE ECRS AND BEGUN PARTICIPATING IN THE ECRS MARKET IN MAY, 2024.
RTC PLUS B IS MAINTAINING MOMENTUM AND DEVELOPING SOFTWARE.
OPEN POLICY DISCUSSIONS INCLUDE THE SHAPE OF ANCILLARY SERVICES, DEMAND CURVES FOR FUTURE AGENDA ITEMS. STAFF CONTINUES TO REPORT ON ERCOT WORKING WITH THE PC TO MAKE PROGRESS ON THE RELIABILITY STANDARD AND ADDED FUTURE AGENDA ITEMS FOR LARGE TRANSMISSION STUDIES.
AND WITH THAT, THAT CONCLUDES MY REPORT.
[13. Technology and Security (T&S) Committee Report ]
AND NEXT JOHN SWENSEN WILL PRESENT AGENDA ITEM 13, WHICH IS THE TNS COMMITTEE REPORT.UH, TO MY KNOWLEDGE, THERE ARE NO VOTING ITEMS. THERE ARE NONE MR. CHAIRMAN.
UM, TNS COMMITTEE MET YESTERDAY IN BOTH GENERAL
[01:45:01]
AND EXECUTIVE SESSION.THIS IS THE GENERAL SESSION UPDATE.
UM, PURSUANT TO THE COMMITTEE'S REQUEST FOR PRESENTATIONS ON EMERGING GRID TECHNOLOGIES, WE INVITED A GUEST, DR.
BEN KOWSKI FROM THE NATIONAL RES RENEWABLE ENERGY LAB IN, IN GOLDEN, COLORADO, COLORADO, TO PRESENT AN INTRODUCTION TO GRID FORMING INVERTERS.
HE EXPLAINED THE DIFFERENCE BETWEEN GRID FORMING AND GRID FOLLOWING INVERTERS AND WHY IT'S IMPORTANT TO THE RELIABILITY OF THE SYSTEM.
HE ALSO DESCRIBED HOW GRID FORMING INVERTER BASED RESOURCES, ESPECIALLY WHEN USED IN COMBINATION WITH BATTERY STORAGE, CAN IMPROVE FREQUENCY STABILITY EVEN AS WIND AND SOLAR, MORE WIND AND SOLAR POWER COMES ONLINE.
UH, STAFF THEN PRESENTED THE FOLLOWING COMMITTEE BRIEFS AN UPDATE, UH, AS WE DO ON ALL MEETINGS ON THE TECHNICAL PROJECTS AND TECHNOLOGY UPDATE.
UM, JP GAVE US AN UPDATE ON THE MARKET MANAGEMENT SYSTEM MIGRATION, UH, TO LINUX THAT WENT LIVE IN MAY, WHICH IS RESULTED IN A 40% INCREASE INCREASE IN THE PERFORMANCE OF THE SYSTEM.
UM, HE ALSO REPORTED ON THE ERCOT INNOVATION SUMMIT THAT YOU'VE HEARD LOTS ABOUT IN THIS SESSION.
UM, WE ASKED FOR TO SEE SOME MORE TARGETED FEEDBACK FROM THE ATTENDEES AND TALKED ABOUT WAYS TO EXPAND AND IMPROVE THE PROGRAM FOR NEXT YEAR.
UH, JP ALSO REPORTED ON THE CONGESTION RIGHTS REVIEW PERFORMANCE MIGRATE MITIGATION AND IMPROVEMENT PROJECT, WHICH RESULTED IN A SIGNIFICANT REDUCTION IN THE DURATION OF THE PROCESSING OF CRR AUCTIONS, UM, BY AT LEAST A FACTOR OF TWO AND IN SOME CASES MORE THAN THAT.
UM, WE ALSO HAD A, AN UPDATE ON THE RTC CO-OP OPTIMIZATION UPDATE AND LOOKED AT THE PROJECT PLAN.
AND I'M PLEASED TO REPORT THAT THE PROJECT IS ON BUDGET AND ON TIME AND LOOKS LIKE IT'S MAKING GOOD PROGRESS.
[14. Other Business ]
UH, THE LAST ITEM BEFORE WE MOVE INTO EXECUTIVE SESSION IS AGENDA ITEM 14, OTHER BUSINESS.DOES ANYBODY ON THE BOARD HAVE ANY OTHER BUSINESS? I DO HAVE, UH, ONE ITEM I WANT TO, UH, BRING BEFORE YOU.
UH, THIS WILL BE MY LAST MEETING AS CHAIRMAN OF THEIR COT BOARD.
AND AS A MEMBER, I'VE DECIDED TO STEP DOWN EFFECTIVE AT THE END OF THE DAY TOMORROW.
UH, IT HAD BEEN MY INTENTION TO LEAVE THE BOARD AT THE END OF MY TERM THIS FALL, BUT AFTER THINKING ABOUT IT THE LAST FEW WEEKS, IT BECAME CLEAR TO ME IT'D BE MUCH MORE BENEFICIAL TO THE BOARD AND TO ERCOT FOR THIS TRANSITION TO HAPPEN SOONER RATHER THAN LATER.
UNTIL A NEW CHAIRMAN IS SELECTED, VICE CHAIR BILL FLORES WILL SERVE AS INTERIM CHAIR.
ERCOT HAS A TREMENDOUS AMOUNT OF WORK TO DO IN THE LAST HALF OF 2024, LEADING INTO A LEGISLATIVE SESSION BEGINNING IN JANUARY.
AND THE BOARD HAS A LOT OF WORK TO DO, SHAPING AND SUPPORTING THESE EFFORTS.
HAVING A NEW BOARD CHAIR AND A NEW BOARD MEMBER IN PLACE AS SOON AS POSSIBLE, AND WELL IN ADVANCE OF LEGISLATIVE SESSION IS, IS WHAT WOULD BE BEST FOR ERCOT.
THIS IS THE DISCUSSION I HAD WITH LAST WEEK WITH THE GOVERNOR, AND HE CONCURRED.
I DO WANNA SAY A FEW WORDS ABOUT ERCOT.
WHEN I TOOK THIS JOB I OWN, I HAD ONLY A VERY HIGH LEVEL UNDERSTANDING OF THE GRID AND THE MARKET.
WHAT I'VE COME TO LEARN IN MY TENURE AS ERCOT CHAIR IS THAT THIS IS THE MOST DYNAMIC, INNOVATIVE, ADAPTIVE AND FORWARD LOOKING ELECTRIC GRID AND COMPETITIVE MARKET IN THE WORLD.
TEXAS AND ERCOT ARE AT THE FOREFRONT IN THE GLOBAL ENERGY TRANS TRANSFORMATION THAT IS CURRENTLY TAKING PLACE RIGHT NOW.
AND FRANKLY, I THINK WE'RE HANDLING IT BETTER THAN JUST ABOUT ANYBODY ELSE AND HAVE NEVER KNOWN A MORE DEDICATED, PROFESSIONAL AND INTELLIGENT GROUP OF PEOPLE THAN WHAT I'VE SEEN HERE AT ERCOT.
THE PEOPLE WHO CHOOSE TO SERVE HERE ARE NOT ONLY THE ABSOLUTE BEST IN THEIR FIELDS, BUT THEY'RE HERE FOR THE RIGHT REASONS.
EVERYONE I'VE MET AT ERCOT WANTS TO SOLVE PROBLEMS NOT FOR PROFITS OR TO BOOST A STOCK PRICE, BUT BECAUSE IT'S THE RIGHT THING TO DO FOR TEXAS AS I LEAVE THIS POST, I TRULY BELIEVE THAT ERCOT IS HEADED IN THE RIGHT DIRECTION WITH THE RIGHT PEOPLE IN LEADERSHIP AND POISED TO LEAD THE WORLD THROUGH THE ENERGY TRANSFORMATION THAT WE'RE IN THE MIDDLE OF.
I'D LIKE TO EXPRESS MY GRATITUDE TO THE GOVERNOR AND THE LE AND LEGISLATIVE LEADERSHIP TO CHAIR GLEASON AND THE PUC TEAM MEMBERS, MY FELLOW BOARD MEMBERS, PABLO, AND THE WHOLE ERCOT TEAM AND THE MARKET PARTICIPANTS FOR ALLOWING ME TO SERVE YOU THESE LAST FEW YEARS.
AND WITH THAT, UM, THE BOARD WILL ADJOURN GENERAL SESSION.
MR. CHAIRMAN, BEFORE WE ADJOURN, IF, IF, IF I CAN CHIME IN ON AT LEAST ON MY OWN
[01:50:01]
BEHALF, AND I'M, I'M, I'M PRETTY SURE THE REST OF OUR FELLOW BOARD MEMBERS FEEL THE SAME AS YOU CAME INTO THIS POSITION 32 MONTHS AGO, UH, AT A CRITICAL TIME FOR THE STATE AND FOR ERCOT.AND SO I THINK THE STATE OF TEXAS OWES YOU A GREAT DEAL OF GRATITUDE FOR WHAT YOU'VE DONE, UH, AND WORKING WITH ERCOT TEAM AND WITH YOUR FELLOW BOARD MEMBERS TO, UH, TO REPOSITION TO REBUILD ERCOT AND REPOSITION WHAT WAS ALREADY A GOOD OR GREAT ORGANIZATION AND, UH, GET IT TO THE FOREFRONT AND ALL THE AREAS THAT YOU SPOKE OF IN YOUR, IN YOUR COMMENTS.
[Convene Executive Session ]
UM, AT THIS TIME, THE BOARD WILL ADJOURN GENERAL SESSION AND CONVENE IN EXECUTIVE SESSION.NO VOTING ITEMS ARE ANTICIPATED DURING EXECUTIVE SESSION, SO GENERAL SESSION WILL NOT RECONVENE AFTER CONCLUSION OF THE EXECUTIVE SESSION.
SO GENERAL SESSION IS NOW ADJOURNED AND THE WEBCAST WILL BE CONCLUDED.
UM, AND WE'LL TAKE A SHORT BREAK BEFORE WE START EXECUTIVE SESSION.
CHAIRMAN GLEASON, THIS MEETING OF THE PUBLIC UTILITY COMMISSION OF TEXAS IS HERE BY ADJOURN.