Feb 03, 2025 Reliability and Markets Committee Meeting

[1. Call General Session to Order]

[00:00:03]

GOOD AFTERNOON, MEMBERS OF THE RELIABILITY AND MARKETS COMMITTEE AND GUESTS.

THIS IS JULIE ENGLAND, COMMITTEE CHAIR.

WELCOME TO THE FEBRUARY 3RD, 2025 RELIABILITY AND MARKETS COMMITTEE MEETING.

I'VE CONFIRMED THAT A QUORUM IS PRESENT AND HEREBY CALL TO ORDER THIS MEETING OF THE RELIABILITY MARKETS AND COMMITTEE.

PLEASE NOTE, MEMBER CARLOS AGUILAR IS PARTICIPATING VIA TELECONFERENCE IN TODAY'S MEETING.

THIS MEETING IS BEING WEBCAST LIVE TO THE PUBLIC ON T'S WEBSITE.

BEFORE MOVING ON TO TODAY'S BUSINESS, I'LL NOTE THAT THE ANTITRUST ADMONITION AND SECURITY MAP ARE INCLUDED WITH THE POSTED MATERIALS.

I WILL ALSO NOTE THAT AS WHEN THE COMMITTEE MOST RECENTLY MET IN DECEMBER, BOB FLEXON IS NO LONGER A BOARD MEMBER.

SO WE ARE AGAIN, A COMMITTEE OF TWO TODAY.

HOWEVER, TWO NEW BOARD MEMBERS HAVE RECENTLY BEEN SELECTED.

WE WELCOME ALEX HERNANDEZ AND SIG CORNELIUS, WHO ARE BOTH PRESENT FOR TODAY'S MEETING.

AND WE'RE LOOKING FORWARD TO WORKING WITH FULL COMMITTEE MEMBERSHIP GOING FORWARD IN 2025.

THE FIRST ORDER OF BUSINESS ON TODAY'S AGENDA IS AGENDA ITEM TWO.

NOTICE OF PUBLIC COMMENT, IF ANY.

TODAY'S MEETING AGENDA WAS POSTED PUBLICLY ON JANUARY 27TH, 2025, AND PROVIDES INSTRUCTIONS TO THE PUBLIC FOR COMMENTING IN PERSON.

TO DATE, NO ONE HAS EXPRESSED INTEREST IN COMMENTING.

IS THAT STILL CORRECT, KIM? THAT'S CORRECT.

CHAIR.

THANK YOU.

[3. December 2, 2024 General Session Meeting Minutes]

GENERAL SESSION MEETING MINUTES.

THERE'S A DRAFT OF THE MEETING MINUTES IN YOUR BOARD MATERIALS.

DOES ANYONE HAVE ANY COMMENTS HEARING NO COMMENTS? I MAKE A MOTION TO APPROVE THE MEETING MINUTES.

CARLOS, WOULD YOU PLEASE? SECOND.

THANK YOU.

MINUTES ARE APPROVED AND THE MOTION PASSES.

[4. Review of Committee Charter]

THERE ARE NO REVISIONS CURRENTLY PROPOSED FOR 2025.

ONCE COMMITTEE MEMBERSHIP FOR 2025 IS IN PLACE, UH, WE MIGHT PROVIDE ANOTHER OPPORTUNITY TO REVISIT THE POTENTIAL RECOMMENDATIONS FOR THE CHARTER.

UM, HEARING NO OTHER DISCUSSION, I MOVE THAT WE APPROVE THE CHARTER FOR THIS COMMITTEE.

CARLOS, MAY I HAVE A SECOND CHAIR? CAN I SAY SECOND? WE DIDN'T, WE DIDN'T ACTUALLY NOTICE THAT ONE FOR A VOTE ON THE AGENDA.

OKAY, SO CARRY ON, CARRY ON.

[5. Recommendation regarding Market Credit Risk Corporate Standard]

THIS IS A VOTING ITEM AND AUSTIN ROZELLE WILL PRESENT THIS YEAR'S RECOMMENDATION.

AUSTIN, THANK YOU.

THANKS.

ALRIGHT.

UH, THANK YOU.

YES.

I'M AUSTIN ROSELL, DIRECTOR OF SETTLEMENTS RETAIL AND CREDIT AT ERCOT.

AND TODAY WE DO HAVE A, WE ARE REQUESTING A VOTE.

IT'S THE ANNUAL PROCESS OF, UM, REVIEWING THE MARKET CREDIT RISK CORPORATE STANDARD.

SO WE ARE ASKING THAT YOU APPROVE OUR MARKET CREDIT RISK CORPORATE STANDARD.

IT'S THE SAME ONE YOU APPROVED LAST YEAR WITH ONE SMALL CHANGE.

WE ARE PROPOSING A REVISION TO ADD THE CHIEF OPERATING OFFICER AS ONE OF THE DELEGATES RESPONSIBLE FOR MONITORING AND REPORTING ON CREDIT RISK TO THE BOARD.

AND THAT IS TO ALIGN WITH OUR, OUR ORGANIZATIONAL, UH, REPORTING STRUCTURE.

SO THAT IS THE ONLY CHANGE WE HAVE FROM LAST YEAR.

AND, UM, HAPPY TO ANSWER QUESTIONS OR SCROLL DOWN AND SHOW YOU THE EDIT IF YOU NEED.

IF NOT, THAT'S, THIS IS ALL I HAVE.

WELL, THANK YOU, AUSTIN.

ANY COMMENTS OR QUESTIONS FOR AUSTIN? NONE FOR ME.

OKAY.

IF THERE'S NO FURTHER COMMENTS, I WILL MAKE A MOTION TO RECOMMEND THE BOARD APPROVE THE REVISED MARKET CREDIT RISK CORPORATE STANDARD.

MAY I HAVE A SECOND, CARLOS? YES.

I'LL SECOND THANK YOU.

A MOTION PASSES.

[6. Recommendation regarding 2025 ERCOT Methodologies for Determining Minimum Ancillary Service Requirements]

JEFF BELO WILL PRESENT THE STAFF'S RECOMMENDATION AFTER WHICH TODAY'S AGENDA NOTICES THE RECOMMENDATION FOR A VOTE.

JEFF, OVER TO YOU.

ALL RIGHT, THANK YOU.

UH, SO AS MENTIONED, SO THE, THE REQUEST TODAY IS THAT THE RNAM COMMITTEE RECOMMEND THAT THE BOARD TOMORROW RECOMMEND TO THE PUBLIC UTILITY COMMISSION TO APPROVE THE REVISED 2025 ANCILLARY SERVICES METHODOLOGY.

UH, SO THE, THE MAIN CHANGE IS THAT WE'RE ADDING A NEW LIMIT PER NPR AT 1257.

WE'RE ADDING NEW LIMIT INTO THAT METHODOLOGY, AND THAT

[00:05:01]

AND I'LL EXPLAIN, UH, A LITTLE BIT MORE DETAIL WHAT, WHAT THAT MEANS.

UH, I DID WANT TO NOTE THAT THE, THE QUANTITIES THAT ARE IN THE 2025 AS METHODOLOGY OR THE, OR THE CALCULATION OF THOSE QUANTITIES, THAT THAT IS NOT CHANGING.

WE'RE JUST ADDING THIS NEW LIMIT IN.

SO YOU MAY BE WONDERING, HEY, DIDN'T WE JUST TALK ABOUT ANCILLARY SERVICES, ANCILLARY SERVICE METHODOLOGY NOT TOO LONG AGO, AND YOU'D BE CORRECT.

IN OCTOBER, THE BOARD APPROVED THE 2025 AS METHODOLOGY AND, OR SORRY, RECOMMENDED APPROVAL TO THE PUBLIC UTILITY COMMISSION.

THE PUC THEN, UH, APPROVED THAT IN NOVEMBER.

UH, WHAT'S HAPPENED SINCE THEN IS THAT THERE'S BEEN THIS NEW N-P-R-R-N-P-R 1257 AND ASSOCIATED NOER 2 71 THAT HAVE GONE THROUGH THE PROCESS AND TAC HAS RECOMMENDED THOSE, UH, TO BE APPROVED.

UH, I BELIEVE THOSE ARE ON THE, UH, CONSENT, CONSENT AGENDA FOR THE BOARD TOMORROW.

UH, BUT, UH, THERE THERE'S A CHANGE WITH THAT, UH, NPRR THAT SETS THIS NEW LIMIT.

UH, AND, UH, AND SO WE NEED TO, UH, MAKE SURE THAT WE, WE CHANGE THE AS METHODOLOGY, UH, ACCORDINGLY.

AND AGAIN, SO THAT PROCESS IS, UH, THE BOARD RECOMMENDS APPROVAL AND THE PUC ULTIMATELY, UH, APPROVES THE AS METHODOLOGY.

SO, UH, YOU ALSO MAY BE WONDERING, HEY, WE'VE HAD RRS THIS ANCILLARY SERVICE FOR, UM, DECADES.

UH, WHAT HAS CHANGED NOW WITH THIS NPR 1257? WHY ARE WE CHANGING IT? AND THE SHORT ANSWER TO THAT IS, BATTERY TECHNOLOGY HAS CAUSED US TO CHANGE THAT.

SO IF, IF YOU RECALL, RS IS THE SERVICE THAT, UH, SO NORMALLY YOU, YOU'VE GOT YOUR LOAD AND YOUR GENERATION BALANCED, YOU'RE AT 60 HERTZ, BUT YOU HAVE A, UH, A LARGE GENERATOR THAT TRIPS.

AND SO YOU NEED, UH, THE RS COMES IN AND PROVIDES MEGAWATTS TO ARREST THAT FREQUENCY DECLINE, KEEP THAT FREQUENCY FROM GOING TOO LOW.

UM, AND, UH, HISTORICALLY THAT SERVICE HAS BEEN, UH, PROVIDED PRIMARILY BY GAS GENERATORS.

UH, GAS GENERATORS BEING, UH, MECHANICAL SYSTEMS. THEY HAVE MECHANICAL LIMITATIONS.

AND SO AS IT TURNS OUT, A FOR EXAMPLE, A 500 MEGAWATT GAS GENERATOR HAS A MECHANICAL LIMITATION.

REALLY, THEY CAN ONLY PROVIDE ABOUT 100 MEGAWATTS OF THIS RRS SERVICE.

UH, BATTERIES BEING POWER ELECTRONIC DON'T HAVE SUCH A LIMITATION.

AND SO A 500 MEGAWATT BATTERY COULD ACTUALLY PROVIDE UP TO 500 MEGAWATTS OF THIS SERVICE.

AND SO, UH, THE TEAM, A COUPLE YEARS AGO, AS WE STARTED SEEING MORE AND MORE, UH, UH, BATTERIES THAT ARE PROVIDING THE RS, UH, GOT TO THINKING, HEY, DO WE HAVE A RISK THAT WE DIDN'T PREVIOUSLY HAVE WHERE IF WE HAVE TOO MUCH BEING PROVIDED BY A SINGLE RESOURCE, COULD WE HAVE A RISK, UH, IF THAT RESOURCE FAILS TO PERFORM? UH, AND SO WE CONTRACTED WITH GE RENOVA AS A CONSULTANT WHO CAME IN AND TALKED TO THEM ABOUT IT.

THEY, THEY LOOKED THROUGH THE RISKS.

THEY DEVELOPED A STUDY METHODOLOGY, AND WE HAVE APPLIED THAT STUDY METHODOLOGY, LOOKED AT VARIOUS SCENARIOS AND DETERMINED THAT WITH THE CALCULATION THAT WE COULD LOSE UP TO 157 MEGAWATTS FROM A SINGLE RESOURCE THAT'S PROVIDING RS, AND WE'D STILL NOT HAVE, UH, ANY RELI NO NOTICEABLE RELIABILITY ISSUES.

UH, AND SO THAT'S, WE RAN THROUGH THOSE STUDIES, AND SO THAT'S HOW WE DETERMINED WHAT THAT, UH, THAT NUMBER IS.

UH, SO, UM, AGAIN, SO THE, THE REQUEST IS, UH, YOU KNOW, AGAIN, NPR 1257 CODIFIES THAT WE WILL HAVE SUCH A LIMITATION.

THE ANCILLARY SERVICE METHODOLOGY CODIFIES WHAT THAT NUMBER IS.

AND SO OUR REQUEST TODAY IS THAT YOU WOULD RECOMMEND THAT THE BOARD, UH, UH, APPROVE THE REVISED 2025 AS METHODOLOGY WITH THAT 157 MEGAWATT LIMIT.

I'LL PAUSE THERE TO SEE IF THERE ARE ANY QUESTIONS.

THANK YOU, JEFF.

I HEARING AND SEEING NO COMMENTS OR QUESTIONS.

I, I DO HAVE A, A QUESTION.

IF YOU GO BACK TO THE PREVIOUS PAGE, SO THESE NUMBERS ARE PRETTY EXACT, UH, AND I ASSUME IT'S BASED ON RUNNING A NUMBER OF SCENARIOS.

SO THIS 28 0 5 AND THE 1 57, ARE THESE, UH, DO THESE HAVE MARGINS OF, UM, ERROR OR, OR BUFFERS OR HOW DOES THAT, HOW'S THAT, CALCULATE IT? YEAH, AND, UM, AND I'M GONNA PROVIDE YOU AN ANSWER THAT'S A LITTLE BIT INTO THE WEEDS.

UH, BUT, BUT, UH, LET, LET ME KNOW IF I GET TOO, TOO FAR IN THE WEEDS.

SO, UH, RIGHT NOW THE CURRENT METHODOLOGY, SO IT IT'S BASED ON A NERC RELIABILITY STANDARD.

AND IT'S, UH, REALLY WHAT WE'RE LOOKING AT IS, UM, WE, WE WANT TO, UH, WHEN WE HAVE OUR TWO LARGEST UNIT STRIP, UH, WE WANT TO MAKE SURE THAT, UH, OR WE NEED TO MAKE SURE THAT WE DON'T, UH, TRIGGER OUR UNDER FREQUENCY LOBE SHED.

AND TODAY WE BUILD IN A 100 MEGAHERTZ, UH,

[00:10:01]

UH, SO, AND THAT TAKES INTO ACCOUNT THINGS LIKE WHAT, WHAT IF A UNIT FAILS TO PROVIDE, UH, RS.

UH, WE MAY NOT BE EXACTLY AT 60 HERTZ.

UH, WE COULD BE A LITTLE BIT BELOW 60 HERTZ.

SO IT TAKES INTO ACCOUNT, UH, A NUMBER OF, UH, UH, ISSUES.

AND, AND SO, UH, AS, AS WE WENT THROUGH THIS ANALYSIS WITH, UH, THE CONSULTANT CHIEF RENOVA, UH, THEY RECOMMENDED THAT UP TO HALF OF THAT MARGIN, UH, YOU COULD USE FOR THIS, UM, UH, FAILURE OF A SINGLE RESOURCE PROVIDING THAT SERVICE UP TO HALF OF THAT MARGIN.

AND SO THAT 1 57 IS BASED ON STUDIES, UH, IS THE EXACT NUMBER, UH, OF WHAT HALF OF THAT MARGIN WOULD BE UNDER KINDA THAT WORST CASE, UH, CONDITION THAT WE STUDIED.

OKAY, THANK YOU, JEFF.

MY QUESTION IS IN 2026, WILL WE BE ALSO APPLYING IN ADDITION TO THE NERC RELIABILITY STANDARD, THE PUC RELIABILITY STANDARD THAT WAS JUST APPROVED? UH, SO, UH, THIS STANDARD IS A LITTLE DIFFERENT FROM THE WHAT THE PDC UH, STANDARD IS.

SO, SO THAT'S MORE ABOUT RESOURCE ADEQUACY, THAT THIS, UH, AND, AND THERE ARE A NUMBER OF NERC STANDARDS THAT WE APPLY IN THE SETTING, THE ANCILLARY SERVICES QUANTITIES.

UH, THIS PARTICULAR ONE IS, IS, UH, BASED ON THE, THE BOWEL THREE N RELIABILITY STANDARD.

UH, AND THAT I, I DON'T ANTICIPATE CHANGING, I THINK WHAT THEY'VE DONE AT THE COMMISSION.

I, I THINK THAT THOSE CHANGES WOULD ALSO NOT IMPACT THIS CALCULATION.

DID THAT ANSWER YOUR QUESTION? YEAH.

THIS PARTICULAR CALCULATION, BUT IN GENERAL, WHEN WE REVIEW ANCILLARY SERVICES IN 26, WILL THERE BE ADDITIONAL ANALYSIS, LET'S CALL IT, TO COMPLY WITH THE PUC NEW ERCOT RELIABILITY STANDARD? OKAY.

YEAH.

AND I MONES, UH, IF ANYBODY ELSE WANTS TO, UH, STEP IN, FEEL FREE TO, BUT, BUT MY, UH, I THINK MY INITIAL TAKE IS NO, THE, THE ANCILLARY SERVICES AS WE, UH, CALCULATING FOR 2026, UH, I THINK THE, THE METHODOLOGY WILL, WILL BE BASED ON OUR OPERATIONAL NEEDS, UH, AND NOT BASED ON THE LONG TERM, UH, PLANNING RESERVE MARGIN THAT, THAT, THAT NEW REQUIREMENTS THAT THE, THE, UH, THE PC HAS, UH, ADOPTED.

UH, SO AT LEAST THAT, THAT'S THE PLAN TODAY.

UM, YEAH, I THINK THE, UH, THE PDC RELIABILITY STANDARD IS MORE OF A, UH, HOW OFTEN CAN YOU HAVE A, LIKE A ROTATING OUTAGE TYPE EVENT, HOW OFTEN DO YOU HAVE A FAILURE OF RESOURCES TO MATCH YOUR LOAD? AND YOU HAVE TO GO INTO ROTATING OUTAGES.

THIS IS, IS NOT THAT MADAM CHAIR, PLEASE GO AHEAD.

UH, THIS IS BARKSDALE ENGLISH WITH THE PUBLIC UTILITY COMMISSION.

UM, SO WHEN WE, WHEN THE COMMISSION REVIEWS ITS RELIABILITY STANDARD AND, AND CONDUCTS AN ASSESSMENT ON HOW THE MARKET IS FUNCTIONING, UM, AND WE COMPARE IT TO THE STANDARD, IF WE NOTICE THAT THE MARKETS, UM, AREN'T PREDICTED TO YIELD THE KIND OF, UM, RELIABILITY THAT WE'VE EXPECTED THROUGH THAT, THE ESTABLISHMENT OF THAT STANDARD, THEN WE WILL TAKE A LOOK AT ALL OF THE DIFFERENT MARKET DESIGNS, INCLUDING THE ANCILLARY SERVICE MARKET DESIGN TO SEE IF ADJUSTMENTS MAY BE NEEDED THERE TO HELP PROMOTE RELIABILITY THROUGHOUT THE POWER REGION.

OKAY, THANK YOU.

I AM GONNA ASK FOR CLARIFICATION QUESTIONS TO TRY TO UNDERSTAND HOW WE'RE GOING TO USE THAT, UM, STANDARD.

SO I APPRECIATE THAT.

I'D BE HAPPY TO ANSWER ANY QUESTIONS YOU HAVE.

OKAY.

ANY OTHER COMMENTS, CARLOS? NO, NOT PERMIT ME.

OKAY.

IF THERE ARE NO FURTHER COMMENTS, I MOVE TO RECOMMEND THAT THE BOARD RECOMMEND TO THE PUBLIC UTILITY COMMISSION OF TEXAS TO AUTHORIZE AND APPROVE ERCOT TO IMPLEMENT THE UPDATED 2025 ANCILLARY SERVICE METHODOLOGY AS ENDORSED BY TECH TO BE EFFECTIVE UPON IMPLEMENTATION OF NPRR 1257.

CARLOS, PLEASE SECOND.

YES, YOU HAVE A SECOND.

THANK YOU, CARLOS.

[7.1 Oncor Forney 345/138-kV Switch Rebuild Project]

THERE ARE THREE RPG PROJECTS UNDER THIS ITEM, THE FIRST OF WHICH IS THE ENCORE FORNEY 3 45 1 38 KILOVOLT SWITCH REBUILD PROJECT.

CHRISTIE HOBBS WILL BE PRESENTING THE RECOMMENDATIONS AFTER WHICH TODAY'S AGENDA NOTICES THE RECOMMENDATIONS FOR A VOTE.

CHRISTIE.

ALL RIGHT, THANK YOU AND GOOD AFTERNOON.

UM, AS I WAS PREPARING FOR TODAY, I REALIZED THAT THESE THREE VOTING ITEMS ARE VERY SIMILAR IN NATURE.

AND SO TO TRY TO TAKE OUT SOME OF THAT REDUNDANCY, I'M GONNA GO THROUGH SOME OF THE MATERIAL AND THEN GO QUICKLY THROUGH WHAT'S REDUNDANT IN THE OTHER TWO PRESENTATIONS AND WE'LL LOOK AT HOW WE

[00:15:01]

UM, BECAUSE AS WE'LL GET TO IN OUR LATER DISCUSSIONS, UH, THE NEED FOR TRANSMISSION INVESTMENT IS GOING TO BE KEY IN THE COMING YEARS.

AND SO THESE WILL BE THE FIRST OF MANY PROJECTS YOU'LL CONTINUE TO SEE ON THE HORIZON.

ALRIGHT, THE QUICK OVERVIEW ON THIS FIRST PROJECT, IT IS A HUNDRED MILLION DOLLARS PROJECT FROM ENCORE IN THE NORTH CENTRAL WEATHER ZONE.

SO ALL THREE OF THE PROJECTS YOU'LL SEE ARE COMING FROM SIMILAR AREAS IN THE ENCORE SERVICE TERRITORY.

FOR THE BENEFIT OF OUR NEW MEMBERS THAT HAVE JOINED THE COMMITTEE, WE'VE GOT PROTOCOL REQUIREMENTS THAT SET THE STAGE FOR WHICH TRANSMISSION PROJECTS ACTUALLY HAVE TO BE BROUGHT FORWARD AND REVIEWED BY ERCOT AND THEN BROUGHT THROUGH THE APPROVAL PROCESS BECAUSE OF THE SIZE OF THIS PROJECT.

THAT'S WHY IT'S BEFORE YOU TODAY.

SO A LITTLE BIT ABOUT THIS PROJECT.

SO ENCORE SUBMITTED IT TO US IN JULY OF THIS YEAR, OR EXCUSE ME, LAST YEAR.

WE WENT THROUGH OUR INDEPENDENT REVIEW PROCESS LOOKING AT DIFFERENT ALTERNATIVES ON HOW TO MEET THE RELIABILITY NEEDS THE MOST EFFICIENTLY AND COST EFFECTIVELY.

WE DID OUR INDEPENDENT REVIEW AND THEN WE WORKED THROUGH A STAKEHOLDER PROCESS WHERE WE TAKE COMMENTS AND FEEDBACK.

WE ENDED UP PROVIDING OUR ASSESSMENT TO THE TECHNICAL ADVISORY COMMITTEE LAST MONTH, WHICH THEY ALSO UNANIMOUSLY ENDORSED.

WHY IS ERCOT RECOMMENDING THAT YOU ENDORSE THIS PROJECT? THERE'S A COUPLE KEY THINGS OF THE OPTIONS THAT WE LOOKED AT.

UM, THIS WAS THE OPTION THAT MOST MET, UM, SOLVING THE RELIABILITY VIOLATIONS, WHETHER THOSE ARE THERMAL OR VOLTAGE VIOLATIONS.

IT WAS THE LEAST COST SOLUTION.

IT ADDRESSED AGING INFRASTRUCTURE IN THE REGION AS WELL AS IMPROVED FUTURE LONG-TERM SERVING CAPABILITY FOR THE LOAD THAT IS EXPECTED TO COME TO THE THE REGION.

WE LOOKED AT BOTH NERC PLANNING CRITERIA AS WELL AS OUR ERCOT REGIONAL PLANNING CRITERIA, WHICH WAS CONSISTENT.

THE UPGRADES AND CHANGES ARE NEEDED TO SOLVE FOR A LOSS OF A CONTINGENCY WHERE YOU HAVE A LOSS TRANSFORMER FOLLOWED BY A SINGLE TRANSMISSION ELEMENT OR A COMMON TOWER, AS WELL AS THE LOSS OF A SINGLE 3 45, 1 38 KV TRANSFORMER, FOLLOWED BY A SINGLE TRANSMISSION ELEMENT OR COMMON TOWER.

SO WHAT WE'RE COMING BEFORE YOU TODAY AFTER WE REVIEWED SEVERAL OPTIONS WORK THROUGH OUR STAKEHOLDER COMMENT PROCESS IS A RECOMMENDATION TO ENDORSE THE NEED FOR THE OPTION ONE A, BUT MEETS BOTH ER, ERCOT AND NERC RELIABILITY PLANNING CRITERIA.

SO WE'D BE SEEKING A RECOMMENDATION, UH, TO ENDORSE THIS AT THE BOARD.

THANKS, CHRISTIE.

DOES ANY COMMITTEE MEMBER HAVE ANY COMMENTS OR QUESTIONS? ANYBODY AT THE TABLE? NO, NOT ON THIS ONE.

IT'S JUST A COMBINATION OF THEM ALL.

UM, AND, UH, WHETHER A SINGLE TRANSMISSION EFFORT IN THIS REGION SHOULD BE THE OTHER APPROACH, OR AGAIN, THESE THREE SEPARATELY.

SO WE REVIEWED THEM, UM, WE DO HAVE THESE THREE SINGLE RECOMMENDATIONS, BUT I THINK WHAT YOU'RE, YOU'RE HITTING ON IS A, A GOOD DISCUSSION AS WE GO INTO OUR NEXT REVIEW ABOUT HOW WE TOOK A LOOK AT THE ENTIRE STATE AND THE PLANNING NEEDS THAT WERE NEEDED FOR CONTINUING TO MEET THE, THE RELIABILITY NEEDS AS WELL AS THE INCREASING DEMAND.

EXACTLY.

THANKS.

SO CHRISTY, SHALL WE VOTE ON EACH ONE OR SHALL WE? I WILL LEAVE THAT UP TO YOU IF YOU WANT.

I CAN GO TO THE END.

YOU CAN TAKE ONE VOTE ON ALL THREE OR, UH, WE'RE TRYING TO SOLVE THIS REGIONAL TRANSMISSION PROBLEMS UP.

I WOULD RECOMMEND YOU WALK THROUGH ALL THREE AND WE'LL VOTE ON ALL THREE AT THE END.

ALL RIGHT.

WELL, LET'S GO TO THE NEXT ONE,

[7.2 Oncor Venus Switch to Sam Switch 345-kV Line Project]

UM, THEY FILED THIS ONE INTO THE ERCOT PLANNING PROCESS IN JUNE OF 2024 AS WELL.

A LITTLE BIT ABOUT THIS, UH, PROJECT, AGAIN, IT IS $118 MILLION PROJECT.

UH, WE AGAIN LOOKED AT FOUR OPTIONS TO SOLVE THE NEEDS IN THAT PARTICULAR REGION OF THEIR TERRITORY.

UH, SO, UH, WHAT YOU'LL SEE IN FRONT OF YOU IS A RECOMMENDATION TO AGAIN, MEET THE NERC PLANNING CRITERIA, UH, LOSS, AS WELL AS ERCOT

[00:20:01]

THE LOSS OF A GENERATION UNIT, FOLLOWED BY THEN A SINGLE LOSS TRANSMISSION ELEMENT, OR A LOSS OF A TRANSFORMER FOLLOWED BY SINGLE TRANSMISSION ELEMENT.

WE REVIEWED, AS I STATED, FOUR OPTIONS.

UH, ONE OF THEM WE DID REMOVE, UH, BECAUSE IT DIDN'T PROVIDE, UH, FUTURE LOAD SERVING CAPABILITY.

AND THEN OF THE REMAINING, THIS WAS THE LEAST COST OPTION TO AGAIN, MEET THE RELIABILITY NEEDS AS WELL AS GIVE US THAT FUTURE LOAD, UH, CAPABILITY IN THE REGION.

SO WE WOULD, UM, WHEN IT COMES TIME FOR A VOTE, WE WOULD RECOMMEND AS TAC UNANIMOUSLY DID AS WELL, TO ENDORSE THE NEED FOR THE ENCORE VENUS SWITCH TO SAM SWITCH PROJECT BASED ON BOTH THE ERCOT AND NERC PLANNING RELIABILITY CRITERIA.

ANY QUESTIONS ON THIS PARTICULAR PROJECT? NOT FROM ME.

ALL RIGHT.

LET'S GO TO THE THIRD

[7.3 Oncor Wilmer 345/138-kV Switch Project]

IT WAS A, AGAIN, ONE THAT WAS FILED LATE LAST SUMMER IN JULY OF 2024.

IT'S A PROJECT THAT IS GOING TO BE IN THE $158 MILLION RANGE.

ONCE AGAIN, WE MADE OUR ENDORSEMENT BASED OFF OF SEVERAL ERCOT AND NERC PLANNING CRITERIA FOR THOSE REGIONS, WHICH HAD TO DO WITH A LOSS OF A SINGLE TRANSMISSION ELEMENT, A LOSS OF A TRANSFORMER FOLLOWED BY SINGLE TRANSMISSION ELEMENT OR A COMMON TOWER OUTAGE.

IN THIS, UH, SCENARIO, WE LOOKED AT FOUR DIFFERENT OPTIONS.

TWO OF THE OPTIONS THAT WERE PROPOSED TO LOOK AT DID NOT ACTUALLY SERVE, UH, THE THERMAL OVERLOADS IN THE REGION.

SO WE WENT WITH THE ONE THAT WAS THE LEAST COST TO PROVIDE THE RELIABILITY NEED, AS WELL AS PROVIDE LONG-TERM LOAD SERVING CAPABILITY IN THE REGION.

SO OUR ERCOT RECOMMENDATION, AS WELL AS UNANIMOUS RECOMMENDATION BY TAC, WAS TO ENDORSE THE NEED FOR THE ENCORE WILMER SWITCH PROJECT BASED ON BOTH NERC AND ERCOT PLANNING CRITERIA.

ANY QUESTIONS OR COMMENTS FOR CHRISTIE? OKAY.

WELL, THANK YOU FOR ALL THE, THE WORK AND ANALYSIS THAT WENT BEHIND THESE THREE RECOMMENDATIONS.

NOW, IF YOU'LL BEAR WITH ME, I'M GONNA READ ALL THREE TOGETHER FOR THE RECOMMENDED VOTE.

I RECOMMEND THAT THE BOARD ENDORSE THE NEED FOR THE TIER ONE ENCORE FORNEY THREE FORTY FIVE A HUNDRED THIRTY EIGHT KILOVOLT SWITCH REGIONAL PLANNING GROUP PROJECT OPTION ONE A, WHICH ERCOT STAFF HAS INDEPENDENTLY REVIEWED, AND WHICH TAC IS VOTED TO ENDORSE BASED ON NERC AND ERCOT RELIABILITY PLANNING CRITERIA.

SECOND, I RECOMMEND THE BOARD ENDORSES THE NEED FOR THE TIER ONE ENCORE VENUS SWITCH TO SAM SWITCH 3 45 KILOVOLT LINE REGIONAL, UH, NEED FOR THE YEAH, REGIONAL PLANNING GROUP PROJECT OPTION ONE, WHICH STAFF HAS INDEPENDENTLY REVIEWED AND WHICH TECH HAS VOTED TO ENDORSE BASED ON NERC AND RCCO RELIABILITY PLANNING CRITERIA.

AND THIRD, I MOVE WE TO RECOMMEND THAT THE BOARD ENDORSE THE NEED FOR THE TIER ONE ENCORE WILMER 3 45 1 38 KILOVOLT SWITCH REGIONAL PLANNING GROUP PROJECT OPTION ONE, WHICH ERCOT STAFF IS INDEPENDENTLY REVIEWED AND WHICH TAC IS VOTED TO ENDORSE BASED ON NERC AND ERCOT RELIABILITY PLANNING CRITERIA.

CARLOS, PLEASE SECOND.

YEP, I'LL SECOND.

YES.

OKAY, THANK YOU.

SO THE MOTION PASSES AND ALL THREE TRANSMISSION PROJECTS WILL BE RECOMMENDED AT THE BOARD TOMORROW.

THANKS, CHRISTIE.

THANK YOU, CHRISTIE.

UH, IN THE AGENDA, WE HAVE A SHORT BREAK, BUT I THINK WE'LL CARRY ON SINCE WE'VE GOT LIMITED TIME WITH CARLOS AND EXPECT TO BE DONE WITH THIS MEETING BETWEEN THREE AND THREE 30.

OKAY.

OKAY.

WE'LL NOW TAKE UP AGENDA ITEM NINE, THE COMMITTEE

[9.1 System Planning and Weatherization Update]

CHRISTIE.

ALL RIGHT, SO AS WE GO INTO THIS REPORT, UM, AT THE END OF LAST YEAR, THE PLANNING TEAM FINALIZED A NUMBER OF SIGNIFICANT PLANNING RELIABILITY STUDIES.

AND SO I WANTED TO TAKE THIS OPPORTUNITY TO SHARE WITH YOU THAT WORK, UM, AND WALK THROUGH THOSE.

UH, WE'LL ALSO TALK ABOUT SOME OF THE OTHER THINGS THAT ARE GOING ON IN BOTH THE GENERATION AND LARGE LOAD INTERCONNECTION PLACE,

[00:25:01]

SO JULIE, IF IT'S OKAY WITH YOU, I'M GONNA SPEND A LITTLE BIT EXTRA TIME ON THIS FIRST REPORT BECAUSE IT'S A VERY IMPORTANT REPORT, UM, THAT WE EXPECT WILL GET A LOT OF DISCUSSION IN THE COMING MONTHS.

AND WE WANNA MAKE SURE YOU'VE GOT ADEQUATE INFORMATION, UM, TO SUPPORT ANY QUESTIONS OR DISCUSSIONS YOU MAY HAVE AS WE GO THROUGH THE NEXT SEVERAL MONTHS.

I RECOGNIZE, AND I THINK YOU DO AS WELL, THAT WE'RE AT A VERY PIVOTAL POINT, CARLA, YOU, YOU WERE VERY KEEN TO POINT THAT OUT, UM, IN A TIME ON HOW WE DECIDE WE CONTINUE TO MOVE FORWARD FOR PLANNING AND INVESTING IN THE INFRASTRUCTURE TO RELIABLY AND AFFORDABLY MEET THE NEEDS FOR THE CONSUMERS OF TEXAS.

THE REGIONAL TRANSMISSION PLAN IS AN ANNUAL STUDY THAT WE DO WHERE WE LOOK AT THE LOAD FORECAST FOR SIX YEARS IN ADVANCE.

WE USE IT TO COMPLY WITH NERC STANDARDS AS WELL AS OUR ERCOT PROTOCOL AND PLANNING GUIDE REQUIREMENTS AND MAKING SURE THAT WE HAVE SUFFICIENT CAPACITY TO ENSURE A RELIABLE SYSTEM WHILE MEETING RAPID GROWTH AND DEVELOPMENT AND DEMAND.

NOW, AS I STEP BACK AND LOOK AT BOTH, UH, OF THE PLANS THAT WE LOOKED AT, AS WE SAW THE INCREASED DEMAND ON THE SYSTEM, AS WE SAW THE PENETRATION OF INVERTER BASED RESOURCES LOOKING AHEAD INTO OUR QUEUE, WHAT IS EXPECTED TO COME ONTO THE SYSTEM IN THE NEAR FUTURE GENERATION, CONTINUING TO BE BUILT FURTHER AWAY FROM LOAD CENTERS, WE HAD AN OPPORTUNITY TO STEP BACK AND THINK ABOUT HOW DO WE PLAN THE SYSTEM.

SO INSTEAD OF OUR TRADITIONAL PLANNING PROCESS OF LOOKING AT ONLY UTILIZING 3 45 AS THE HIGHEST VOLTAGE LEVEL, WE SAW THIS AS A, A PRIME TIME TO BE ABLE TO TAKE A STEP BACK AND LOOK IF THERE, UM, ARE IMPROVED WAYS FOR PLANNING THE SYSTEM.

A LITTLE BIT OF HISTORY.

UM, WHEN WAS THE LAST TIME THAT THE ERCOT REGION MADE A STEP CHANGE IN THE PLANNING PROCESS? YOU HAVE TO GO BACK TO THE 1960S TO SEE WHEN WE MADE THE STEP UP FROM THE 1 38 TO THE 3 45 SYSTEM.

SO THAT MEANS FOR OVER 65 YEARS AGO, AT THAT TIME, THERE WAS A DECISION TO MAKE AN INVESTMENT FOR THE FUTURE NEEDS OF THE CONSUMERS.

WE DID A LITTLE BIT OF RESEARCH AND I FOUND IT WAS INTERESTING TO TAKE A LOOK AND SEE WHAT THE NEWSPAPER CLIPPINGS WERE SAYING.

AT THAT TIME, THERE WERE SIX, UH, BACK IN THE EARLY IN 1961, THERE WAS FOUR UTILITIES THAT WERE COMING TOGETHER TO BUILD THE FIRST 7 3 45 LINES WITHIN THE STATE.

NEWSPAPER ARTICLES WERE CALLING THEM THE POWER HIGHWAY, THE SUPER POWER BACKBONE, PROVIDING A BENEFIT FOR TEXAS TO MAKE POWER AVAILABLE TO THE GROWING DEMANDS OF THE STATE AND OPPORTUNITY TO INCREASE NATIONAL SECURITY.

THOSE ARE ALL SOME OF THE KEY THINGS THAT YOU'VE HEARD COME UP IN THE DISCUSSIONS AS WE'VE TALKED ABOUT THE DIFFERENT OPTIONS HERE.

SO AS A PART OF THAT, UH, IN THE LAST YEAR WE DID NOT ONE BUT TWO PLANS, WE DID A PLAN THAT LOOKED ON JUST 3 45 UTILIZATION OR ONE THAT HAD A 7 65 BACKBONE THAT'S ALSO SUPPORTED BY THE UNDERLYING 3 45 NETWORK.

WE COMPLETED THOSE PLANS AT THE END OF DECEMBER, BUT OUR WORK DIDN'T STOP THERE.

WE CONTINUE TO DO ADDITIONAL ANALYSIS LOOKING AT THE COST AND BENEFITS OF BOTH PLANS.

AND UH, FRIDAY A WEEK AGO, WE FILED A COMPARISON DOCUMENT WITH THE PUBLIC UTILITY COMMISSION TO HELP THEM IN THEIR DECISION MAKING PROCESS ON HOW TO MOVE FORWARD WITH PLANNING IN THE STATE.

AGAIN, I THINK THE MOST IMPORTANT FINDING THAT WE SAW BY LOOKING AT THOSE STUDIES WAS SOMETHING THAT WE ALL, UM, STRONGLY SUSPECTED EITHER WAY, NO MATTER THE VOLTAGE THAT YOU CHOOSE TO MOVE FORWARD WITH, WHILE WE CAN MEET THE NEEDS OF THE CONSUMERS OF TEXAS, IT'S GOING TO TAKE SUBSTANTIAL INVESTMENT IN INFRASTRUCTURE TO MEET RELIABILITY NEEDS AND CONSUMERS FOR NOT TODAY, BUT FOR TOMORROW AS WELL.

SO I'M GONNA SKIP AHEAD AND LOOK AT THE COMPARISON TABLE 'CAUSE I WANNA WALK YOU THROUGH WHAT WE SAW AS WE STEPPED BACK AND DID THE ANALYSIS FOR BOTH PLANS.

THE FIRST THING THAT WE LOOKED AT WAS WHAT MILES OF NEW RIGHT OF WAY OR WHAT MILES OF UPGRADES WILL BE NEEDED FOR BOTH PLANS.

[00:30:01]

WHY IS THAT IMPORTANT? SO I THINK THE OUTAGE COORDINATORS AT BOTH ERCOT AND WITH THE TRANSMISSION SERVICE PROVIDERS WILL TELL YOU EACH DAY IT BECOMES INCREASINGLY DIFFICULT TO TAKE OUTAGES ON THE TRANSMISSION SYSTEM TO DO MAINTENANCE WORK, TO CUT IN NEW LINES, TO EVEN CUT IN NEW GENERATORS OR LARGE LOADS BECAUSE OVER TIME OUR PLANNING RULES THE WAY THEY ALLOWED US TO ADD NEW TRANSMISSION OF THE SYSTEM, AS WE'VE ADDED MORE LOAD AND WE'VE SEEN THE GENERATION MOVE FARTHER AWAY FROM LOAD CENTERS, WE HAVE MAXIMIZED FULLY MAXIMIZED THE CAPABILITY OF THE CURRENT SYSTEM.

AND SO WE NEED THAT SYSTEM INTACT TO BE ABLE TO RELIABLY SERVE CUSTOMERS.

WHEN WE LOOK AT IT FROM A CONSTRUCTION COST PERSPECTIVE, THE DIFFERENCE BETWEEN THE TWO PLANS IS, IS VERY COMPARABLE.

THE 3 45 PLAN CONSTRUCTION COST WAS ALMOST $31 BILLION WHILE THE TEXAS 7 65 STRATEGIC TRANSMISSION EXPANSION PLAN WAS JUST UNDER $33 BILLION.

SO ABOUT A $2 BILLION DIFFERENCE BETWEEN THE TWO PLANS.

WE HELD WORKSHOPS WITH MARKET PARTICIPANTS AND STAKEHOLDERS TO WALK THROUGH OUR ANALYSIS AND GET INPUT, AND I DID HAVE, UM, ONE OF THE TRANSMISSION SERVICE PROVIDERS THAT HAS EXPERIENCE BUILDING 7 65 TELL US THAT THEY THOUGHT SOME OF THE COST ESTIMATES THAT WE USE FOR THE 7 65 STRUCTURES, THAT THEY'VE ACTUALLY BUILT THOSE FOR CHEAPER.

AND WHEN YOU PUT THOSE IN, THE DIFFERENCE BETWEEN THE TWO PLANS REALLY BECOMES MINIMAL OTHER COST COMPARISONS, LET'S TALK ABOUT THOSE UPGRADES THAT ARE NEEDED TO THE CURRENT SYSTEM BECAUSE WE'VE SEEN THE NEED FOR A LOT OF THAT WORK RECENTLY AS SOME OF THE PROJECTS THAT HAVE COME THROUGH.

IF YOU READ THROUGH THE DOCUMENTS TODAY, UM, IN SOME OF THE ANALYSIS, WHAT YOU SAW IS THAT ENCORE NOTED THAT CONSTRUCTION COSTS WOULD LIKELY BE HIGHER AND TIMELINES COULD BE EXTENDED DEPENDING ON THEIR CAPABILITY TO TAKE OUTAGES ON THE SYSTEM.

THAT MEANS THOSE UPGRADES ARE GONNA BE DONE POTENTIALLY AT A HIGHER COST TO BE ABLE TO DO THAT WORK HOT AND IT BECOMES AT RISK ON THEIR TIMELINE TO BE ABLE TO GET THAT WORK DONE IN ON THE CURRENT LIFE SYSTEM.

WE ALSO TOOK A LOOK AT, UM, ECONOMIC ANALYSIS, TWO DIFFERENT ECONOMIC TESTS, UH, THAT WE RAN.

IF YOU RECALL, LAST YEAR WHEN WE APPROVED, UM, THE NPR, I BELIEVE IT WAS 1247, IT ADDED ADDITIONAL ECONOMIC TESTING TOOL FOR US TO UTILIZE.

SO LOOKING AT THAT TOOL, WHAT WE SAW IS ON AN ANNUAL BASIS, POTENTIAL CONSUMER ENERGY COST SAVINGS.

SO THOSE ARE THE COST OF WHAT THE CONSUMER WOULD PAY.

IT CHANGES OR MEASURES WHAT THE CONSUMER WOULD PAY FOR ENERGY DUE TO TRANSMISSION ADS ON THE SYSTEM AFTER HOW DISPATCH GETS AFFECTED.

WHAT WE SEE ARE BENEFITS FOR $229 MILLION A YEAR GOING FORWARD BECAUSE OF THE REDUCED CONGESTION ON THE SYSTEM WITH A 7 65 NETWORK.

WE ALSO, WHEN WE RAN THE ECONOMIC PRODUCTION COST SAVINGS TEST, WHICH LOOKS AT HOW DOES DISPATCH CHANGE BASED OFF OF THE, THE TRANSMISSION ADS, AGAIN, A POTENTIAL SAVINGS FROM THE 7 65 PLAN OF $28 MILLION A YEAR.

ANOTHER COMPARISON THAT WE DID IS WE LOOKED AT WITH THE HIGHER VOLTAGE LINE, IT'S MORE EFFICIENT IN HOW IT TRANSPORTS POWER ACROSS THE STATE FOR THOSE LONG DISTANCES.

AND YOU SEE ABOUT A 5% IMPROVEMENT.

SO 5% LESS LINE LOSS REDUCTION ON THE 7 65 NETWORK, AND THAT EQUATES TO ABOUT 560 GIGAWATT HOURS PER YEAR.

IF YOU COMPARE THAT WITH WHAT THE AVERAGE REAL-TIME PRICES WERE IN ERCOT LAST YEAR, THAT WOULD BE ABOUT A $16.2 MILLION SAVINGS ANNUALLY GOING FORWARD, JUST FROM THE LINE LOSS REDUCTION, MEANING WE'RE GETTING MORE POWER FROM THE GENERATORS TO THE CONSUMERS, IT'S ALSO THE EQUIVALENT OF ADDING ABOUT 128 MEGAWATT THERMAL UNIT TO THE SYSTEM BECAUSE OF THOSE LINE LOSS REDUCTIONS.

WE ALSO DID ANALYSIS LOOKING AT THE TRANSFER CAPABILITY.

AGAIN, YOU'RE THE CAPABILITY TO MOVE BETWEEN WHERE

[00:35:01]

WE SAW ANYWHERE FROM 600 TO 3000 MEGAWATTS, MORE OF POWER TRANSFER CAPABILITY WITH A 7 65 NETWORK.

AGAIN, WE'RE MAKING AN INVESTMENT TODAY FOR THE FUTURE NEEDS OF THE STATE.

IT'S GONNA GIVE US MORE, UM, OF THE CAPABILITY AS TEXAS CONTINUES TO GROW TO MEET THOSE NEEDS.

SOME OF THE OTHER THINGS THAT WE TOOK INTO CONSIDERATION, WE DON'T HAVE 'EM LISTED HERE ON THE TABLE, UM, BUT MORE STUDIES ON STABILITY.

WE SAW IMPROVEMENTS IN THE WEST TEXAS AREA OF ABOUT 13%, WHICH IS REALLY THAT CAPABILITY TO THE SYSTEM TO BE ABLE TO RETURN TO NORMAL AFTER YOU HAVE AN EVENT ON THE SYSTEM.

WE LOOKED AT THE POTENTIAL RETIREMENT OF SERIES CAPACITORS AS WELL AS OVERALL IMPROVED SYSTEM STRENGTH.

THE RESULTS WERE COMPARABLE BETWEEN THE TWO PLANS, BOTH PROVIDING BENEFITS FOR THE FUTURE, SOME ADDITIONAL CONSIDERATIONS.

SOME OF THE THINGS THAT WE'VE BEEN GETTING QUESTIONS ON IS RECOGNIZING THAT THE $30 BILLION PRICE TAG HAS A LOT OF SHOCK AND AWE TO IT.

AND WHEN I STEP BACK AND THINK OF HOW WE'VE DONE PREVIOUS REGIONAL TRANSMISSION PLANS, WE NEVER PUT A PRICE TAG ON THAT ANNUAL PLAN.

WHAT HAPPENS IS WE PUT OUT THAT ROADMAP, THEN THE TRANSMISSION SERVICE PROVIDERS PICK UP THE PROJECTS BASED OFF OF NEED IN THEIR AREAS AND START BRINGING THOSE FORWARD JUST LIKE THE THREE YOU VOTED ON EARLIER TODAY, OVER THE LAST THREE YEARS.

IF WE LOOK AT THE PROJECTS THAT HAVE COME THROUGH THAT PROCESS AND WHAT'S BEEN ENDORSED BY THE BOARD, IT'S OVER ON AVERAGE OVER $3 BILLION PER YEAR.

IN FACT, LAST YEAR THE BOARD ENDORSED ALMOST $4 BILLION WORTH OF PROJECTS.

SO THAT REALLY PUTS IT INTO PERSPECTIVE.

WHEN YOU THINK ABOUT $30 BILLION OF INVESTMENT NEEDED OVER THE NEXT FIVE TO SIX YEARS, IT'S NOT THAT FAR OUT OF LINE WITH WHAT WE'VE ALREADY BEEN INVESTING IN THE SYSTEM TODAY.

AND YOU ALSO HAVE TO REMEMBER THAT DOESN'T MEAN THAT'S, UM, AN INCREASE TO A CUSTOMER'S BILL IMMEDIATELY, OR EVEN AT ALL TRANSMISSION COSTS ARE BORNE BY THE TRANSMISSION UTILITY WHO THEN TURNS THOSE INTO THE RATES THAT THEY CHARGE TO CONSUMERS.

AND THOSE ARE TYPICALLY RECOVERED OVER A 30 TO 40 YEAR PERIOD OVER THE LIFE OF THAT ASSET.

ALSO, AS DEMAND GROWS, YOU HAVE MORE CONSUMERS TO SPREAD THOSE COSTS ACROSS, WHICH IS UNLIKE SOME OF THE, THE CRESS BUILD OUT THAT WAS DONE SEVERAL YEARS BACK WHERE THAT LINE WAS BUILT FOR A GENERATION.

YOU DIDN'T SEE THE INCREASING DEMAND IN THE STATE AT THAT TIME.

SO THAT COST WAS DIRECTLY TO THE CONSUMERS.

WE'VE ALSO HAD A LOT OF QUESTIONS ABOUT OUR LOAD FORECAST THAT WE RECEIVED FROM THE TRANSMISSION SERVICE PROVIDERS AND HOW LIKELY IS THAT LOAD TO ACTUALLY DEMAND TO MATERIALIZE ON THE SYSTEM.

SO WE DID SOME SENSITIVITY ANALYSIS TO TAKE A LOOK AT WHAT IF HALF OF THE, THE OFFICER ATTESTED LOAD THAT THE TSPS PROVIDED US DOES NOT ACTUALLY MATERIALIZE ON THE SYSTEM.

SO WE LOOKED AT ABOUT 130 GIGAWATT LOAD AND WE SAW THERE WAS STILL SUBSTANTIAL BENEFITS FROM THE 7 65 SIMILAR TO WHAT WE SAW IN THE COMPARISON DOCUMENT THAT WE WENT THROUGH.

WE'VE ALSO GOTTEN A LOT OF QUESTIONS ABOUT SUPPLY CHAIN AND SCHEDULE CONSTRAINTS.

UM, WE'VE BEEN IN A LOT OF DISCUSSIONS WITH TRANSMISSION SERVICE PROVIDERS, UM, AND IN FACT I THINK I COULD SHARE AS WE'VE BEEN THE, THE PC TASKED US TO WORK WITH THEM IN THE SEQUENCING OF PROJECTS THAT ARE COMING TO THE PERMIAN BASIN AND IN RECENT MEETINGS WITH THEM, WHAT THEY HAVE SHARED IS THEY'RE PREPARING TO MOVE FORWARD FOR EITHER VOLTAGE AND THEY HAVE NOT COME ACROSS AT THIS TIME ANY CONCERNS ABOUT SUPPLY CHAIN FOR GETTING THE EQUIPMENT THEY NEED TO DO THE WORK.

SO I JUST WENT THROUGH A LOT OF INFORMATION, BUT I THINK THE KEY TAKEAWAY GOES BACK TO THE POINT OF AS THE SYSTEM GROWS, AS WE SEE THE TYPES OF RESOURCES AND THE LOCATION OF THOSE RESOURCES COMING TO THE SYSTEM, AS WE SEE THE INCREASED DEMAND, THERE'S GOING TO REQUIRE SUBSTANTIAL AMOUNT OF INVESTMENT IN THE TRANSMISSION INFRASTRUCTURE TO MEET THOSE NEEDS.

AND WE'VE PROVIDED OPTIONS FOR TWO PLANS THAT CAN MEET THOSE, BUT WILL BE UP TO THE PROCESS NOW MOVES OVER INTO THE PUBLIC UTILITY COMMISSION SPACE.

THEY HAVE FILED, UM, A LIST OF QUESTIONS TO CONTINUE TO GET ADDITIONAL INFORMATION ON THE COST BENEFIT COMPARISON WE PROVIDED THEM,

[00:40:01]

SO BEFORE I GO INTO THE NEXT SET OF SLIDES, I'LL PAUSE HERE TO SEE IF YOU HAVE ANY QUESTIONS, UM, ABOUT THE REGIONAL TRANSMISSION PLAN THAT WE'VE PUT FORWARD.

CHRISTINA, THIS IS A REALLY GOOD PRESENTATION.

UM, YOU'VE BEEN VERY SPECIFIC ABOUT THE ITEMS THAT I THINK, UH, WE HAD QUESTIONS ABOUT THE LAST TIME AROUND AND I THINK THE, THIS CAN BE VERY HELPFUL FOR THE PUC AS IT DELIBERATES THROUGH THIS.

DEFINITELY IT'S REQUIRED, UH, WHETHER GOING 3 45 OR 365 I THINK IS, UH, WOULD BE MORE AN ISSUE OF COMFORT WITH THE SEVEN SIX FIVES.

BUT, UM, THESE ARE BECOMING COMMONPLACE THROUGHOUT THE COUNTRY, SO IT'S SOMETHING THAT I WOULD ENCOURAGE EVERYBODY TO REALLY LOOK AT VERY HARD.

UM, ONE QUESTION I HAD IS ON THE, YOU SAY THAT THERE'S, UM, ADDITIONAL NEED FOR RIGHT OF WAY WITH THE, WITH THE 7 65, DOES THAT TAKE INTO ACCOUNT THE WIDTH OF THE RIGHT OF WAY OR ONLY LINEAR RIGHT OF WAY? BECAUSE IF YOU TO CARRY THE SAME CAPACITY, 7 65 WILL BE ABOUT FIVE TIMES MORE EFFICIENT IN TERMS OF LAND USE.

RIGHT.

UM, THANK YOU FOR BRINGING THAT UP.

SO WE'VE SHOWN YOU, UM, STATISTICS THAT A 7 65 RIGHT AWAY IS ABOUT I THINK 200 FEET AND IT WOULD BE COMPARABLE TO CARRY THE SAME AMOUNT OF POWER FOR ABOUT FIVE AND A HALF, 3 45 SINGLE CIRCUITS.

SO YOU'RE, YOU'RE QUICK TO POINT OUT AND RIGHTFULLY SO THAT EVEN THOUGH WE SAY IT WILL NEED MORE MILES OF RIGHT OF WAY, SO THINKING ABOUT LINEAR MILES, WE DIDN'T DO A CALCULATION ON THE ACTUAL ACREAGE THAT WOULD BE NEEDED FOR THOSE COSTS, UH, WITH COMPARISONS.

OKAY.

I ALSO, I APPRECIATE, I THINK THAT'S VALUABLE IN THE TERMS OF THE IMPACT ON, ON STAKEHOLDERS, RIGHT? AS YOU GO THROUGH SORT OF THE LAND, UH, LAND PROCESS.

YES.

UM, I ALSO APPRECIATE YOU BRINGING UP THE FACT THAT WHILE THE TECHNOLOGY IS NEW TO TEXAS, IT'S IMPORTANT TO REMEMBER THAT IT'S NOT NEW TO USE AND IN FACT IT'S BEEN IN PLACE SINCE THE, THE SIXTIES AS WELL.

IT'S BEING USED IN OTHER PORTIONS OF THE US AND COUNTRIES TODAY.

WE'VE ALSO SEEN BOTH SPP AND MISO COME OUT LAST YEAR WITH RECOMMENDED 7 65 PLANS IN THEIR FOOTPRINT, LOOKING AT HOW DO THEY CONTINUE TO MEET POWER DEMANDS, UM, WITH THE CAPABILITIES WITH THE LAND THAT THEY HAVE TO BE ABLE TO MOVE, UH, POWER THROUGH THE INFRASTRUCTURE.

AND IN FACT, SVP HAS A RECOMMENDATION THAT WOULD TAKE A 7 65, UH, LINE FROM NEW MEXICO INTO THE PANHANDLE OF TEXAS IN THE NON ERCOT AREAS.

SOME OF THE FEEDBACK THAT WE'VE GOTTEN IS THAT TEXAS CAN MOVE A LOT FASTER THAN ANY OF THE OTHER REGIONS.

AND SO THAT'S WHY IT'LL BE CRITICAL THAT GETTING A DECISION ON WHICH PATH TO MOVE FORWARD, UM, WILL, WILL BENEFIT TEXAS BECAUSE WE CAN GET AHEAD OF THE FUTURE DEMAND FOR THAT TYPE OF EQUIPMENT.

I'D LIKE TO ECHO WHAT CARLOS SAID.

I REALLY ENJOYED YOUR PRESENTATION, ESPECIALLY THE COMPARISON TABLE.

UM, YOU MIGHT ADD SQUARE MILES AS HE MENTIONED, BUT ALSO THE NUMBER OF STATES THAT HAVE ALREADY IMPLEMENTED.

SO TEXAS HERE IS NOT A LEADER IN PARTICULAR.

THEY'RE MORE LIKE A FASTER MEDIUM FOLLOWER.

AND I THINK THE FACT THAT THE PRESIDENT HAS BEEN SET REDUCES THE RISK OF ADOPTION, WHICH I THINK IS AN IMPORTANT POINT.

UM, YES, AND MAYBE BECAUSE OF OUR GEOGRAPHY, MAYBE THE BEST PLACE TO IMPLEMENT THIS.

SIG DID YOU HAVE A COMMENT? YEAH, I AGREE.

VERY GOOD PRESENTATION.

UH, QUESTION I HAVE IS, OTHER THAN THE POTENTIAL LOAD NOT MATERIALIZING, UH, ARE THERE ANY OTHER REGRETS THAT YOU CAN THINK OF DOWN THE ROAD, UM, AND GOING THIS ROUTE? NO, I THINK WE LOOK AT THAT BACKBONE PLAN AS IT REALLY GIVES YOU THE MOST FLEXIBILITY FOR THE FUTURE.

SO AS WE DID OUR ANALYSIS WHEN WE TOOK IN THAT LOAD FORECAST AND DID OUR INITIAL PLANS, WHEN WE LOOKED AT OUR PLANNING RULES AND WHAT GENERATION IT WOULD ALLOW US TO ADD TO THE CASES TO SOLVE THEM, THERE WAS NOT ENOUGH GENERATION UNDER OUR CURRENT PLANNING RULES.

AND SO WE HAD TO EXPAND HOW WE LOOKED AT BRINGING GENERATION INTO THE SYSTEM.

AND SO ONE, NOT KNOWING EXACTLY WHERE THAT NEW GENERATION WILL BE BUILT OR NOT

[00:45:01]

CHRISTIE, COULD YOU SPEAK TO, UM, MAYBE CONSTRUCTABILITY? SO WE KNOW WE HAVE AN EXISTING 3 45 SYSTEM AND MANY PARTS OF IT ARE AGING AND AND WE ALSO KNOW THAT WE HAVE CHALLENGES RIGHT NOW WITH TAKING, WHETHER IT'S FOR GENERATION RESOURCES OR FOR WHETHER IT'S FOR WORK THAT WE NEED TO DO ON THE TRANSMISSION SYSTEM, YOU KNOW, TAKING DOWN PORTIONS OF THE 3 45 SYSTEM IN ORDER TO DO THAT.

AND SO CAN YOU JUST KIND OF SPEAK TO CONSTRUCTABILITY BETWEEN 7 65 AND THE THREE AND A BUILD OUT A COMPLETE BUILD OUT OF 3 45 FROM, FROM THAT STANDPOINT? RIGHT.

AND SO JUST REMEMBER WHEN WE TALK ABOUT, UM, THE 3 45 PLAN, IT WOULD BE SOME NET NEW 3 45, BUT A LOT OF UPGRADES TO THE EXISTING SYSTEM.

AND WHEN WE TALK ABOUT 7 65, OF COURSE THE 7 65 BACKBONE WOULD ALL BE NET NEW, BUT THEN THERE ARE SOME UP UPGRADES NEEDED, BUT NOT AS MANY WHEN YOU COMPARE TO THAT 3 45 PLAN.

SO BUILDING ANYTHING BRAND NEW WILL BE, I WOULD, IN MY OPINION, BE EASIER BECAUSE OF DOING THAT WORK AND THEN JUST CUTTING THOSE LINES IN VERSUS TRYING TO FIND WINDOWS WHERE YOU CAN WORK ON THOSE LIVE LINES.

IT WILL EITHER INCREASE THE COST FOR THOSE DOING THE WORK, UM, BECAUSE NEW STRUCTURES, UH, WOULD HAVE TO BE SET UP ALONGSIDE THOSE 3 45, THE DIFFICULTY IN TAKING THOSE OUTAGES TO CUT THOSE PARTICULAR OR DO THE UPGRADE WORK.

AND SO THAT COULD ALSO EXTEND THE TIMELINE FOR THE 3 45 PLAN AS WELL, JULIE? YES.

YEAH, AND I'D ALSO ADD THAT INCREASINGLY WE ARE ASKING TSPS TO TAKE SHORTER OUTAGES OR TAKE OUTAGES WITH SHORTER RESTORATION TIMES, AND THAT'S MORE EXPENSIVE FOR TSPS TO SET UP IF YOU, IF YOU HAVE TO BE WILLING TO OR HAVE IT SET UP SO THAT YOU CAN RESTORE IT IN 48 HOURS OR 24 HOURS IN CASE WE NEED TO PUT IT BACK IN SERVICE.

AND SO THOSE, THOSE OUTAGES ARE, ARE MORE EXPENSIVE.

UM, AND SO THAT ADDS TO THAT CONSTRUCTION COST FOR 3 45.

DO WE TRACK MEANTIME TO REPAIR AND HAVE DATA ON THAT? WE DO TRACK THE, UH, RESTORATION TIME FOR TRANSMISSION OUTAGES.

I DON'T KNOW IF WE'VE EVER CALCULATED A MEAN TIME TO REPAIR OVER THE YEARS OR NOT, BUT, UH, WE DO TRACK THAT WE, IN FACT, WE'LL OFTEN REQUIRE A CERTAIN RESTORATION TIME BEFORE WE'LL GRANT AN OUTAGE TO A TSB MM-HMM .

AND SO THAT MAY MEAN WORKING AT NIGHT MIGHT MEAN WORKING HOT, IT MIGHT MEAN, UH, SETTING UP MORE EQUIPMENT.

UM, IT'S MUCH, IT WOULD BE LESS EXPENSIVE TO TEAR SOMETHING DOWN AND REBUILD IT IF YOU HAVE TIME TO DO THAT.

SURE.

SO THAT'S, UH, THAT'S AN ADDED KIND OF A HIDDEN COST THAT'S IN THIS AS WELL.

I KNOW THERE'S ALSO BEEN A LOT OF TALK ABOUT, YOU KNOW, THE NEED TO GET POWER TO THE PERMIAN AND, UM, COULD YOU JUST TALK A LITTLE BIT ABOUT, UM, 7 65 VERSUS 3 45 IN FOR, IN TERMS OF, OF, UM, OF, OF THE POWER ACTUALLY I GUESS MAKING IT TO THE PERMIAN AS OPPOSED TO POTENTIALLY HAVING MORE OFF RAMPS WITH A TOTALLY DEDICATED 3 45 SYSTEM? RIGHT.

SO WHEN WE DID THE PERMIAN BASIN RELIABILITY PLAN, WHICH WAS COMPLETED UH, EARLIER LAST YEAR, UM, FOR THE BENEFIT OF THE NEW COMMITTEE MEMBERS, UM, THEY LEFT, THEY APPROVED BOTH IMPORT PASS AT A 7 65 VOLTAGE OR A 3 45 VOLTAGE SO THAT WE COULD COMPLETE OUR ANNUAL STUDY LOOKING AT THE WHOLE STATE NEEDS BEFORE A DECISION WAS MADE TO GO FORWARD.

AND SO THAT PERMIAN PLAN HAD, BECAUSE OF THE, THE TREMENDOUS LOAD GROWTH IN THE OIL AND GAS COMMUNITY OUT IN THE PERMIAN BASIN REGION, WHICH TOOK THEIR LOAD TO BEING COMPARABLE TO THE OUT OF A DFW OR A HOUSTON AREA TYPE, UH, LOAD, AND THERE'S A LACK OF CONVENTIONAL GENERATION, THERE WAS A NEED FOR IMPORT PASS TO MOVE POWER TO THE REGION.