Feb 04, 2025 Board of Directors Meeting

UH, AGENDA ITEM THREE IS CONFIRMATION OF TECHNICAL ADVISORY COMMITTEE CHAIR AND VICE CHAIR FOR 2025.

UH, THANK YOU CHAD.

[3. Confirmation of 2025 Technical Advisory Committee (TAC) Chair and Vice Chair]

THAT'S REQUIRED BY THE BOARD PURSUANT TO BYLAWS.

IT IS JANUARY 20, 22ND, UH, 2025 MEETING, EXCUSE ME, JANUARY 22ND, 2025.

MEETING TAC ELECTED CHAIR AND VICE CHAIR FOR THE 2025 YEAR.

I'LL ENTERTAIN A MOTION TO CONFIRM KAITLYN SMITH OF JUPITER POWER AND MARTHA HANSON OF ENCORE ELECTRIC DELIVERY AS CHAIR AND VICE CHAIR OF TAC, RESPECTIVELY FOR THE 2025 YEAR.

I WISH TO MAKE A MOTION.

THANK YOU, JULIE.

SECOND FROM ANYONE, DON'T BE SHY ABOUT .

JOHN, JOHN, SECONDED.

OH, DID, I'M SORRY, JOHN, I MISSED THAT.

ALL IN FAVOR SAY AYE.

AGENDA ITEM FOUR IS A CONSENT AGENDA, INCLUDING ITEM 4.1, UNOPPOSED REVISION REQUEST RECOMMENDED BY TAC FOR APPROVAL.

ALRIGHT.

ANY OPPOSED? ANY ABSTENTIONS? CAITLYN AND MARTHA, WELCOME.

UH, WE LOOK FORWARD TO, UH, WORKING WITH YOU OVER THE COMING YEAR.

[4. Consent Agenda]

CHAD, PLEASE PROCEED WITH THE PROVIDING THE BUDGET IMPACTS OF THE, OF THE, UH, REVISION REQUEST.

THE NEXT IS AGENDA ITEM FIVE, THE DECEMBER 3RD, 2025, GENERAL SESSION MEETING MINUTES.

THERE ARE 17 REVISION REQUESTS ON THE CONSENT AGENDA.

A COUPLE OF QUICK COMMENTS.

UH, THE BOARD REMANDED NPR 1246 AND ITS COMPANION REVISION REQUEST BACK TO TAC AT ITS DECEMBER 3RD MEETING BECAUSE OF SOME, UH, ALIGNMENT LANGUAGE ISSUES.

ALL OF THOSE REVISION REQUESTS, UH, WERE DEALT WITH BY TAC AND ADDRESSED AND ARE NOW ON THE CONSENT AGENDA.

AS FAR AS BUDGET IMPACTS, FIVE OF THE REVISION REQUESTS HAVE BUDGET IMPACTS.

FOUR OF THEM ARE LESS THAN 75,000 TO IMPLEMENT.

THE FIFTH ONE PICKER ONE 17 HAS A BUDGET IMPACT BETWEEN 360,000 TO 440,000 DUE TO TWO NEW FTE POSITIONS TO SUPPORT THE WORK UNDER IT.

THESE FTES ARE PART OF THE ERCOT 24 25 APPROVED BUDGET ALREADY.

HAPPY TO ANSWER ANY QUESTIONS ON THE CONSENT AGENDA.

ANY QUESTIONS FOR CHAD ON THESE, UH, PROTOCOL REQUESTS? ALRIGHT, THANK YOU CHAD.

WITH THAT, DOES ANY BOARD MEMBER WISH TO DISCUSS OR REMOVE ANY ITEM FROM THE CONSENT AGENDA? OKAY, YOU'RE SAYING THAT, UH, WE'RE NOT GOING TO CHANGE THE, UM, ITEMS. I'LL ENTERTAIN, ENTERTAIN A MOTION TO APPROVE THE CONSENT AGENDA AS PRESENTED.

ANY OPPOSED? ANY ABSTENTIONS? THE CONSENT AGENDA IS APPROVED AS PRESENTED.

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

THERE IS A DRAFT IN THE MEETING MATERIALS.

WOULD ANY BOARD MEMBER LIKE TO DISCUSS? IF NOT, I'LL ENTERTAIN A MOTION TO APPROVE THE MINUTES.

AND A SECOND MS FROM LINDA.

ALL IN FAVOR OF APPROVING THE MINUTES.

UH, OUR NEXT, UH, ITEM IS AGENDA ITEM SIX, PABLO VEGAS.

THE MINUTES ARE APPROVED AS PRESENTED.

[6. CEO Update]

OUR CEO IS A FIRST PRESENTER TODAY.

UH, PABLO THE FLOOR IS YOUR THANK YOU CHAIR FLORES.

APPRECIATED AND THANK YOU AND WELCOME EVERYBODY TO THE, UH, FEBRUARY BOARD MEETING.

AS ALWAYS, I APPRECIATE YOUR ENGAGEMENT AND, UH,

[00:05:01]

SUPPORT ON THE IMPORTANT STRATEGIC WORK THAT WE'RE DOING AT ERCOT.

SO TODAY I'D LIKE TO, UH, FOCUS ON, IN THESE UPDATES, I TYPICALLY DO A, A BRIEF UPDATE ON WHAT'S GOING ON WITH KEY OPERATIONAL, UH, PERFORMANCE AND ISSUES SINCE THE LAST TIME WE MET, AS WELL AS SOME STRATEGIC ISSUES.

UH, WE'RE GONNA TALK TODAY ABOUT THE PERFORMANCE OF THE, UH, ERCOT GRID DURING THE RECENT WEEKS, UH, WINTER STORMS. TALK A LITTLE BIT ABOUT, UH, SOME OF THE IMPORTANT REPORTS THAT WE PUBLISHED TODAY, THE CAPACITY DEMAND RESERVE REPORT, AND THEN A LITTLE BIT ABOUT WHERE WE'RE HEADED WITH OUR TRANSMISSION PLANNING AND THE OPPORTUNITIES AHEAD.

AND I WELCOME, UH, ANY QUESTIONS FOR NEW BOARD MEMBERS THROUGHOUT ANY OF THESE TOPICS.

PLEASE FEEL FREE IF YOU'VE GOT QUESTIONS THROUGHOUT TO GO AHEAD AND, UH, AND LET ME KNOW AND WE CAN TALK ABOUT ANY OF THESE ITEMS AS WE GO OR WAIT TILL THE END.

THAT'S FINE.

SO I'M GONNA START WITH OUR, UH, CAPACITY OF MAN AND RESERVE REPORT.

UM, SO WHEN YOU THINK ABOUT, YOU KNOW, REALLY WHAT ERCOT DOES ON A REGULAR BASIS, WE, YOU KNOW, THE REAL TIME OPERATIONAL WORK THAT WE DO IS KIND OF THE MORE VISIBLE AND OBVIOUS, UH, EV WORK THAT THE, THAT ERCOT PRODUCES CONTROLLING THE GRID, RUNNING THE DAY AHEAD MARKET, AND MAKING SURE THAT WE, WE KEEP THE FREQUENCY AND BALANCE, YOU KNOW, EVERY DAY.

BUT THE REAL PRODUCT THAT WE DELIVER, WHEN YOU THINK ABOUT IT, IS DATA.

WE PRODUCE DATA TO INFORM THE MARKET IN MULTIPLE PERIODS OF TIME.

WE PRODUCE DATA TO HELP UNDER THE MARKET UNDERSTAND WHAT'S HAPPENING IN THE NEXT FIVE MINUTES, IN THE NEXT HOUR, AND FIVE HOURS THE NEXT DAY AND FIVE DAYS AND THE NEXT FIVE YEARS.

AND THIS DATA IS CRITICALLY IMPORTANT BECAUSE IT HELPS TO PROVIDE A PATH AND AN UNDERSTANDING TO WHERE TRENDS IN THE MARKET ARE LEADING, UM, THE PERFORMANCE INDICATORS OF THE MARKET AND THOSE PERFORMANCE INDICATORS BEING THE ECONOMICS AS WELL AS THE RELIABILITY PERFORMANCE INDICATORS FOR ERCOT.

AND THE CDR REPORT IS ONE OF THOSE IMPORTANT REPORTS BECAUSE IT'S EFFECTIVELY A VIEW LOOKING FIVE YEARS INTO THE FUTURE.

AND WHAT IT DOES IS IT LOOKS AT THE CAPACITY THAT WE EXPECT OVER THOSE YEARS, THE DEMAND THAT WE EXPECT OVER THOSE YEARS, AND WHAT THE PLANNING RESERVES WOULD LOOK LIKE OVER THOSE YEARS.

AND HISTORICALLY, WE'VE ALWAYS PRESENTED THAT DATA, UH, AS A EFFECTIVELY A SET OF CUR A CURVE THAT REPRESENTS A POTENTIAL OUTCOME BASED ON THE TRENDS THAT WE SEE TODAY BASED ON WHAT WE SEE INSTALLED ON THE GRID AND WHAT WE EXPECT TO CONNECT, WHAT WE SEE IN TERMS OF LOAD GROWTH EXPECTATIONS.

AND IT'S HAD, IT IS HISTORICALLY AND STILL HAS A FAIRLY RIGID FORMULAIC DEFINITION IN TERMS OF WHAT A CDR, WHAT, WHAT THE REPORT CAN CONTAIN.

SO WHAT I WANTED TO TALK ABOUT TODAY IS THAT REPORT CONSTRUCT IS CHANGING.

IT'S CHANGING FROM WHAT WE'VE DONE HISTORICALLY BECAUSE WE ARE CONTINUOUSLY WORKING TO IMPROVE THE QUALITY OF THIS DATA THAT WE PUT FORTH AND LOOKING TO TRY TO HELP BETTER INFORM THE TRENDS THAT ARE HAPPENING IN THE MARKET.

SO SOME OF THE KEY CHANGES THAT ARE HAPPENING, ONE, WE ARE NOW INCORPORATING THE FULL LOAD THAT WE HAVE BEEN USING IN OUR TRANSMISSION PLANNING PROCESS THIS YEAR.

AND WE CALL IT THE HB FIFTY SIXTY SIX LOAD BECAUSE IT WAS PRECIPITATED OFF OF A HOUSE BILL CHANGE, A LEGISLATIVE CHANGE THAT OCCURRED IN 2023, WHERE NOW ERCOT RECEIVES FROM THE TRANSMISSION OPERATORS, UM, A BROADER DEFINITION OF LOAD POTENTIAL IN THE FUTURE.

THAT REQUIREMENT HAS SHIFTED FROM BEING NOT ONLY LIMITED TO FINANCIALLY INTERCONNECTED AGREEMENTS SIGNED LOAD, BUT RATHER A EXPECTATION OF LOAD THAT IS COMING, THAT IT, THAT COMES TO THE TRANSMISSION OPERATORS FROM THEIR CONVERSATIONS WITH CUSTOMERS.

AND I THINK THAT'S A REALLY IMPORTANT POINT TO TO, TO RESTATE THAT THIS GETS OFTEN RE BECAUSE WE PUBLISH THE REPORT, IT GETS CHARACTERIZED THAT THIS IS KIND OF ERCOT LOAD FORECAST.

WHAT WE'RE DOING IS WE'RE REALLY REPRESENTING THE LOAD FORECAST THAT CUSTOMERS THAT ARE COMING AND BUILDING AND GROWING IN TEXAS ARE RELAYING TO THE TRANSMISSION COMPANIES THAT ARE MAKING SURE THEY HAVE THE RIGHT INFRASTRUCTURE TO SERVE THEM.

AND THAT'S WHERE THE CONVERSATION REALLY HAPPENS WHEN LOAD CAN COMES TO TEXAS.

THEY WORK WITH THE UTILITY COMPANY IN THE AREA WHERE THEY'RE GONNA BE CONNECTED AND MAKE SURE THAT THEY'RE GONNA HAVE THE RIGHT CAPACITY TO BE ABLE TO BRING THOSE THAT LOAD IN.

AND SO THAT DEFINITION HAS NOW BROADENED, AND WE HAVE A LARGER FORECAST THAT INCLUDES ALL OF THAT, UH, FORECASTED LOAD.

WE ALSO, FOR THE FIRST TIME, ARE INCLUDING ENERGY STORAGE RESOURCES.

HISTORICALLY, THERE WASN'T REALLY ADEQUATE CRITERIA AND HISTORICAL EVIDENCE TO BE ABLE TO, UH, ADEQUATELY FORECAST WHAT WE WOULD THINK THE CONTRIBUTIONS OF BATTERIES WOULD BE IN A FUTURE TIME PERIOD.

NOW WE HAVE QUITE A STRONG TRACK RECORD OVER THE LAST SEVERAL YEARS OF SEEING HOW BATTERIES ARE PERFORMING DURING PEAK PERIODS.

AND WE ALSO HAVE A PRETTY GOOD FORECAST OF WHAT THE BATTERY DEVELOPMENT CYCLE LOOKS LIKE OVER THE NEXT SEVERAL YEARS.

SO NOW WE SEE FOR THE FIRST TIME THE BATTERY CONTRIBUTION INCLUDED IN THAT, UH, FUTURE VIEW OF CAPACITY, DEMAND, AND RESERVES.

AND THEN ONE OF THE VERY SIGNIFICANT CHANGES IN THIS ITERATION IS MOVING TO USING EFFECTIVE LOAD CARRYING CAPACITY FOR THE CONTRIBUTION OF WIND AND SOLAR

[00:10:01]

RESOURCES DURING THOSE FUTURE PEAK PERIODS.

AND THE PURPOSE OF THIS PLANNING RESERVE, YOU KNOW, STUDY IS TO REALLY HELP UNDERSTAND DURING, DURING THE PEAKS ON THE SYSTEM, WHERE CAN WE EXPECT KIND OF THE RESERVE CAPABILITIES TO BE, AND TO SHOW A TREND IN TERMS OF ARE WE KIND OF MAINTAINING A SET OF RELIABILITY EXPECTATIONS? ARE WE IMPROVING IT? ARE WE DECLINING IT? AND SO GETTING A MORE ACCURATE REPRESENTATION OF THE WAY INTERMITTENT RESOURCES PERFORMED DURING THOSE PEAK PERIODS WAS AN IMPORTANT UPDATE TO HELP, UH, PROVIDE BETTER ACCURACY TO THE POTENTIAL OF THIS REPORT.

SO THOSE ARE SOME OF THE KEY KEY CHANGES THAT WE'RE SEEING IN THE, IN THE DEVELOPMENT OF THIS REPORT.

AND THEN WHAT WE, WHAT WE ALSO FOUND IS THAT WE ALL RECOGNIZE WE'RE IN A VERY SIGNIFICANT PERIOD OF CHANGE IN THE ERCOT MARKET.

AND CHANGE I IMMEDIATELY IMPLIES UNCERTAINTY BECAUSE IT'S VERY DIFFICULT TO SIT TODAY AND ANTICIPATE FIVE YEARS DOWN THE ROAD EXACTLY WHAT'S GONNA HAPPEN WITH ALL OF THESE VARIABLES.

AND THERE'S A LOT OF THINGS THAT CAN BE DONE TODAY TO CHANGE THE OUTCOMES IN THE FUTURE.

AND SO, SIMPLE EXAMPLE LOAD, WE HAVE A FAIRLY SIGNIFICANT LOAD FORECAST, AND THE WAY THAT WE MODEL LOAD TODAY IS FOR THE MOST PART, ALL THE LOAD THAT'S IN OUR FORECAST, WE MODEL AS FIRM LOAD.

AND FOR THE EXCEPTION OF CRYPTO MINING FACILITIES, WHICH HAVE, UH, A STRONG TRACK RECORD OF BEING FLEXIBLE AND RESPONSIVE TO PRICES, THE REST OF IT IS ALL MODELED AS FIRM LOAD.

SO IF LOAD CHARACTERISTICS WERE TO EVOLVE OVER THE NEXT SEVERAL YEARS AND FLEXIBILITY WAS TO BE PART OF THEIR OPERATING CAPABILITIES, THEN THE WAY WE WOULD MODEL THAT COULD POTENTIALLY CHANGE THE PLANNING RESERVE EXPECTATIONS IN THE FUTURE.

THAT'S A VARIABLE THAT COULD BE INFLUENCED TODAY THAT COULD CHANGE WHAT THE RESERVES AND THE FUTURE RELIABILITY MARGINS LOOK LIKE.

SO THERE'S QUESTIONS ABOUT THAT POTENTIALLY.

THERE'S ALWAYS QUESTIONS ABOUT THE SPEED AT WHICH LOAD SHOWS UP.

THERE'S ASSUMPTIONS THAT WE'RE USING BASED ON THE FORECAST THAT WE GOT FROM OUR TRANSMISSION PARTNERS.

HOWEVER, THE PACE OF WHAT NET LOAD SHOWS UP IS ALWAYS RESPONSIVE TO WHAT'S GOING ON IN THE MARKET.

AND A REPORT LIKE THIS, THE CDR REPORT, DOES NOT REALLY CONSIDER ECONOMIC IMPACTS TO THE CHANGE IN THE WAY SUPPLY AND LOAD SHOWS UP.

AND SO THAT'S A VERY IMPORTANT VARIABLE THAT'S NOT PART OF THIS REPORT.

SO UNDERSTANDING WHAT'S IN THE REPORT IS JUST AS IMPORTANT AS UNDERSTANDING WHAT'S NOT IN IT.

AND BECAUSE OF THOSE UNCERTAINTIES, IT'S BETTER TO REFLECT FUTURE OUTCOMES IN TERMS OF RANGES OF POTENTIAL SCENARIOS.

AND THAT'S WHAT YOU'RE GONNA SEE IN THIS NEW REPORT, IS THAT WE'RE GONNA PUBLISH A SET OF SCENARIOS THAT REFLECT DIFFERENT WAY DIFFERENT FUTURES BASED ON VARIABLES THAT COULD BE CHANGING OVER THE NEXT COUPLE OF YEARS.

AND THAT WILL HELP, I THINK, TO PAINT A CLEARER PICTURE OF A BROADER TREND.

THE TREND IS REALLY WHAT'S THE IMPORTANT MESSAGE COMING OUT OF IT, NOT A POINT SOLUTION OR A POINT NUMBER IN A FUTURE YEAR, BUT RATHER A TREND OF WHAT, YOU KNOW, WE THINK THE MARKET IS DOING.

THIS REPORT'S GONNA GET PUBLISHED THE WEEK OF FEBRUARY 10TH, WE'VE ALREADY ANNOUNCED THAT TO THE OPEN MARKET, AND THEN WE'LL BE LOOKING FORWARD TO TALKING ABOUT WHAT THE IMPLICATIONS OF THAT ARE AND SHARING, UH, SHARING MORE SPECIFICS AS, UH, AS THAT REPORT GETS PUBLISHED.

ANY QUESTIONS ON THAT BEFORE I MOVE ON TO THE NEXT TOPIC? OKAY, THANK YOU, PAULA.

I DID HAVE A QUESTION.

YEAH, SO, UH, SOME OF THE CHANGES ON THE SLIDE, THEY WERE ESTABLISHED BY AN NPRR, UH, THE ELCC.

I THINK WHAT I'M HEARING YOU SAY IS YOU'RE GONNA, YOU FOLLOW THE PROTOCOLS AND THEN YOU'RE GONNA LAYER ON SCENARIOS.

THAT'S EXACTLY RIGHT.

SO YOU COULD COME UP WITH A RANGE.

SO THE PROTOCOLS ARE VERY CLEAR AND THEY'RE FAIRLY RIGID IN WHAT, IN TERMS OF WHAT NEEDS TO BE COUNT, WHAT CAN BE COUNTED, WHAT CAN'T BE COUNTED.

AS IT SAYS ON THIS SLIDE, THE TEXAS ENERGY FUND, UH, APPLICATION RESOURCES UNDER THE CRITERIA OF THE REPORT ITSELF WOULDN'T NORMALLY BE INCLUDED BECAUSE IT HASN'T, THEY HAVEN'T PROGRESSED TO A STAGE IN THE INTERCONNECTION PROCESS WHERE THEY WOULD MEET THE CRITERIA TO BE INCLUDED.

HOWEVER, THERE'S A HIGH LIKELIHOOD THAT THAT GENERATION COULD GET BUILT.

AND SO A SCENARIO THAT WOULD MAKE SENSE TO LOOK AT IS WHAT WOULD THE RESERVE MARGINS OF THE FUTURE LOOK LIKE WITH THOSE GENERATING RESOURCES? AND SO THAT'S AN EXAMPLE OF A KIND OF SCENARIO THAT WOULD BE INCLUDED BASED ON VARIABLES THAT COULD CHANGE BETWEEN NOW AND THAT PERIOD OF TIME IN THE FUTURE.

SO I'LL BRIEFLY GO OVER THE RECENT WINTER STORM PERFORMANCE.

AND, YOU KNOW, THE, THE SIMPLE STORY IS THAT, YOU KNOW, WE HAD VERY GOOD PERFORMANCE OVER THIS PERIOD OF TIME AND, UH, WE WERE ABLE TO, YOU KNOW, WEATHER THE COLD WEATHER, YOU KNOW, VERY, VERY RELIABLY WITHOUT ANY CONCERNS AND, AND RELATIVELY, UM, RELATIVELY LOW SCARCITY CONCERNS THROUGHOUT.

WHAT I THOUGHT WAS INTERESTING WAS TO TAKE A LOOK BACK OVER THE LAST TWO YEARS OR SO IN TERMS OF THE WINTER STORMS THAT WE'VE SEEN AND, AND THE DIFFERENT CHARACTERISTICS AND THE IMPACT OF THE DIFFERENT TYPES OF RESOURCES THAT ARE AVAILABLE.

[00:15:01]

AND WHEN YOU LOOK AT THIS, SO THE, YOU KNOW, I'LL, I'LL WALK THROUGH REAL QUICK.

THE, THE GREEN SLIDE IS SHOWING WHAT THE INSTANTANEOUS PEAK DEMAND WAS DURING THE PEAK HOUR IN EACH STORM.

SO WE START WITH THE, THE MOST, THE, THE OLDEST STORM IS THE WINTER STORM ELLIOT, THAT'S THE ONE RIGHT BEFORE CHRISTMAS OF 2022.

UH, IT WAS DECEMBER 23RD, AND WE HAD A VERY COLD PERIOD, UH, DURING THE, THOSE COUPLE OF DAYS.

AND, UM, AND, YOU KNOW, SAW I'D SAY SOME PRETTY SIGNIFICANT SCARCITY, SCARCITY PRICING DURING THAT PERIOD OF TIME.

AND THEN THE NEXT ONE WAS WINTER STORM HEATHER, JUST A COUPLE MONTHS LATER, UH, I'M SORRY, A YEAR, JUST OVER A YEAR LATER.

THAT WAS THE, UM, THE MARTIN LUTHER KING HOLIDAY WEEKEND, UH, COLD EVENT THAT WE SAW LAST JANUARY THAT ACTUALLY SET THE CURRENT PEAK, UH, DEMAND RECORD IN THE ERCOT GRID.

AND THEN WE HAD TWO COLD EVENTS OVER THE LAST THREE WEEKS.

WE HAD, UH, WINTER STORM CORA, AND WE HAD WINTER STORM ENZO.

AND YOU CAN SEE THAT, YOU KNOW, FROM THE DEMAND PROFILE, UH, WINTER STORM CORA, NOT VERY, NOT NEARLY AS SIGNIFICANT AS, UH, AS ENZO NOR AS SIGNIFICANT AS HEATHER AND, UH, AND ELLIOT BEFORE.

WHEN YOU LOOK AT THE PURPLE BAR, THAT IS THE TOTAL CAPACITY THAT WAS, UH, ON THE SYSTEM.

THE GRAY BARS WERE THE OUTAGES FOR THE THERMAL RESOURCES, SO OUTAGES THAT EXCLUDED INTERMITTENT RENEWABLES AND THE PUNS, AND THEN THE SOLAR CONTRIBUTION DURING THESE PERIODS.

AND AS WE'VE TALKED BEFORE, DURING THE WINTER PEAKS, IT'S A VERY DIFFERENT KIND OF A RISK PROFILE THAN WHAT WE EXPERIENCED DURING THE SUMMER PEAKS.

SUMMER PEAKS ARE IN THE MIDDLE OF THE AFTERNOON, HOTTEST PERIOD OF THE DAY.

SOLAR PERFORMANCE TYPICALLY AT ITS PEAK IN THE WINTER, IT'S THE OPPOSITE.

IT'S EARLY IN THE MORNING, LATE IN THE LATER IN THE DAY AFTER THE SUN HAS SET COLDEST PERIOD OF THE DAY, NO SOLAR TYPICALLY CONTRIBUTING.

AND YOU CAN TAKE A LOOK AT WHAT A SIGNIFICANT, SIGNIFICANT DIFFERENCE WIND CAN MAKE IN THE PERFORMANCE DURING WINTER PEAKS.

AND SO OUR OUR SECOND HIGHEST PEAK FOLLOWING WINTER STORM, HEATHER WAS JUST THE ONE THAT WE HAD A COUPLE WEEKS AGO WITH WINTER STORM ENZO.

AND THAT PEAK, YOU KNOW, YOU CAN SEE HERE AT 77,000 MEGAWATTS COMPARED TO 78,000 MEGAWATTS, BUT A SIGNIFICANT DIFFERENCE BETWEEN THE WIND DURING THAT EVENT, UM, THE, I'M SORRY, THE WIND IS HERE AT 9,400 WIND HERE AT 21,000, UH, 400 MEANINGFUL DIFFERENCE IN TERMS OF THE CAPABILITIES.

AND IF YOU LOOKED AT A PRICE, A PRICE CHART DURING THAT PERIOD OF TIME, YOU WOULD'VE SEEN A VERY MEANINGFULLY DIFFERENCE IN THE, IN THE ECONOMICS DURING THESE TWO WINTER STORM EVENTS.

AND SOMETHING ELSE THAT WAS FAIRLY SUBSTANTIALLY DIFFERENT BETWEEN THESE PERIODS OF TIME.

AS WE'VE SEEN BATTERIES GROW SUBSTANTIALLY SINCE 2021, BATTERY STORAGE IN THE ERCOT GRID HAS DOUBLED, NEARLY DOUBLED EVERY YEAR SINCE 2021.

AND WE WERE JUST ABOUT 10,000 MEGAWATTS OF BATTERIES AT THE END OF LAST YEAR.

WE HAD ABOUT 5,000 HALF OF THAT AT THE END OF THE YEAR PRIOR, WHICH IS ABOUT THE TIME THAT THIS, UH, WINTER STORM HEATHER CAME THROUGH.

THOSE INCREASES ARE MAKING A MEANINGFUL DIFFERENCE DURING THESE BRIDGE HOURS, WHICH DURING THE WINTER ARE IN THE MORNINGS WHILE WAITING FOR THE SUN TO COME UP AND IN THE EVENINGS RIGHT AFTER THE SUN SETS.

AND SO BATTERIES CONTINUE TO MAKE A MEANINGFUL CONTRIBUTION TO WHAT THOSE SHOULDER PERIODS LOOK LIKE AND HOW MUCH SCARCITY WE GET INTO, UH, DURING THESE PEAK EVENTS.

BUT OVERALL, WHEN I, WHEN I STEP BACK AND I LOOK AT WHAT'S REALLY BEEN KIND OF INFLUENCING THE PERFORMANCE OF THE GRID SINCE WINTER STORM URI, IT'S OF COURSE THE WEATHERIZATION WORK THAT WE'VE DONE ON THE GRID.

BUT I, I REALLY CREDIT A LOT TO THE COMMUNICATION AND THE PLANNING THAT OCCURS, UH, BETWEEN THE MARKET PARTICIPANTS, ERCOT AND ALL OF THE STATE AGENCIES THAT GET TOGETHER AND ENSURE THAT EVERYBODY HAS THE RIGHT RESOURCES, THE RIGHT UNDERSTANDING OF WHAT'S OCCURRING AND ARE READY TO PERFORM AND EXECUTE DURING THESE PEAK EVENTS.

THAT COMMUNICATION CADENCE HAS ONLY GOTTEN STRONGER AND BETTER WITH EACH SUBSEQUENT YEAR THAT WE'VE PRACTICED IT.

AND DURING THESE LAST TWO WINTER STORMS, IT WAS VERY WELL PRACTICED AND WELL EXECUTED AGAIN.

SO I'LL PAUSE IF THERE'S ANY QUESTIONS ON ANY OF THIS MATERIAL BEFORE I MOVE ON.

AND A REGIONAL TRANSMISSION PLAN.

SO THE, UH, LAST TOPIC I WANNA COVER TODAY IS, UH, OUR TRANSMISSION, UH, PLANNING UPDATE.

AND SO IN THE LAST MONTH WE HAVE FILED, UM, WITH THE COMMISSION AN UP WITH THE PUBLIC UTILITY COMMISSION, AN UPDATE TO THE ERCOT REGIONAL TRANSMISSION PLAN, WHICH IS A BROAD STATEWIDE PLAN LOOKING AHEAD OVER THE NEXT, UH, FIVE PLUS YEARS TO WHAT WOULD BE THE TRANSMISSION NEEDS FOR THE ERCOT GRID BASED ON THE LOAD FORECAST THAT'S COMING TO TEXAS.

IF I BACK UP FOR A SECOND, IF YOU RECALL COMING OUT OF THE, UH, LEGISLATIVE SESSION IN 2023, PART OF THE REQUIREMENTS, UH, THAT CAME OUT WERE TO DEVELOP A SPECIFIC REGIONAL PLAN TO HELP ENSURE THAT WE COULD CLEARLY SERVE THE GROWING LOAD NEEDS IN THE PERMIAN BASIN.

THERE WAS A UNIQUE SET OF CIRCUMSTANCES THERE WITH THE ELECTRIFICATION OF THE OIL AND GAS SECTOR, UH, IN ADDITION TO SOME FAIRLY SIGNIFICANT INDUSTRIAL GROWTH IN THAT AREA THAT WARRANTED A FOCUS ON A AND

[00:20:01]

WE PROVIDED THAT PLAN LATE IN THE SUMMER, EARLY IN THE FALL LAST YEAR, AND WE TALKED THROUGH A LOT OF THE IMPLICATIONS THERE.

AND WHAT WE SAW WHEN WE STEPPED BACK AND SAW AND, AND TOOK A LOOK AT HOW THIS LOAD WAS GROWING IN TEXAS WAS THAT THERE WAS AN OPPORTUNITY TO THINK ABOUT A PLAN THAT WOULD INCLUDE A DIFFERENT TECHNOLOGY PLATFORM USING AN EXTRA HIGH VOLTAGE 765 KV SYSTEM.

AND THE BENEFIT THAT WE HAVE HERE AT ERCO WHEN WE DO PLANNING IS THAT WE GET TO SEE THE AGGREGATED VIEWS FROM ALL OF THE TRANSMISSION OPERATORS AND REGIONS AROUND THE STATE OF TEXAS WHO ARE LOOKING AT AND PLANNING THEIR AREAS AND THEIR GROWTH PROFILES.

AND THEY DO AN EXCELLENT JOB OF DOING THAT.

BUT THEN WHEN THEY SUBMIT IT ALL INTO US, WE CAN KIND OF STEP BACK AND LOOK AT THE FULL PICTURE AND THINK THROUGH WHAT'S THE MOST EFFICIENT AND EFFECTIVE WAY TO MEET THOSE NEEDS WITH THE TRANSMISSION SYSTEM.

AND THAT'S REALLY WHAT OUR TRANSMISSION PLANNING GROUP DOES IN CONJUNCTION WITH THE TRANSMISSION PLANNERS IN THE, IN THE TRANS AND ALL THE T TSPS.

AND WHEN WE DID THAT, WE SAW THAT BECAUSE OF THE SIGNIFICANT CHANGE IN LOAD IN THE FUTURE, AND WITH THE PACE AT WHICH LOAD WAS COMING ON ITS ABILITY TO BE ACCELERATED AND BE ABLE TO GET DEVELOPED MUCH FIS FASTER THAN HISTORICALLY LOAD WAS ABLE TO COME ON, WE SAW AN OPPORTUNITY TO CONSIDER A DIFFERENT WAY TO BUILD OUT THE TRANSMISSION SYSTEM.

ONE THAT HAD MORE FLEXIBILITY IN IT, ONE THAT RECOGNIZED THE UNIQUE ELEMENTS OF THE ERCOT MARKET, WHICH I THINK ONE OF THOSE VERY UNIQUE ELEMENTS IS THE FACT THAT WE DO NOT DO AN INTEGRATED RESOURCE PLAN HERE IN THE STATE OF TEXAS.

WE DON'T PLAN OUT THE GENERATION NEEDS FOR THE EXPECTED LOAD NEEDS EXPLICITLY AND DIRECT COMPANIES TO BUILD A CERTAIN SET OF SUPPLY AND THEN PLAN OUT A TRANSMISSION SYSTEM TO CONNECT THAT SUPPLY TO WHERE THE LOAD IS GROWING.

WE DO IT DIFFERENTLY HERE IN TEXAS.

WE LET THE MARKET DETERMINE WHERE'S THE MOST ECONOMIC AND EFFICIENT WAY TO BUILD OUT THE SYSTEM USING THE DATA AND THE SIGNALS THAT ERCOT PROVIDES.

AND SO THAT PROVIDES FOR A LOT OF FLEXIBILITY, BUT ALSO UNCERTAINTY, ESPECIALLY WHEN YOU LOOK FURTHER DOWN THE ROAD.

AND WHAT IS UNIQUE ABOUT THIS 7 65 CONSTRUCT IS THAT IT ADDED A LAYER OF FLEXIBILITY TO THE EXISTING TRANSMISSION SYSTEM THAT ENABLED RAPID AND VERY EFFICIENT MOVEMENT OF LARGE AMOUNTS OF POWER TO ALL OF THE LOAD CENTERS, THE GROWING LOAD CENTERS IN THE STATE OF TEXAS, WITHOUT NECESSARILY NEEDING TO HAVE SPECIFICITY TO KNOW EXACTLY WHERE THOSE LOAD AND WHERE THAT SUPPLY WAS GONNA BE.

AND THAT'S ONE OF THE, THE BENEFITS THAT WHILE IT'S QUALITATIVE IN NATURE, COULD BE VERY IMPORTANT, ESPECIALLY AS WE MOVE THROUGH TIME AND WE SEE THE PACE OF GENERATION AND LOAD START TO REALLY COME ONTO THE ERCOT GRID.

SO WE HAVE A, A DEADLINE, THE PCT HAS SET A DEADLINE TO EVALUATE THAT PERMIAN PLAN AND TO MAKE A DECISION, WE PRESENTED BOTH A 7 65 AND A 3 45 PLAN FOR THE PERMIAN.

WE ALSO PRESENTED A PARALLEL PLAN FOR THE, FOR THE BROADER, UH, ERCOT, UH, REGION, THE RTP.

AND BY MAY 1ST THEY'RE GONNA MAKE A DECISION ON WHAT THEY THINK IS THE BEST STRATEGY FOR HOW TO MEET THE NEEDS IN THE PERMIAN.

AND THEN, UH, INDEPENDENTLY WILL THE UTILITY COMPANIES AND THE PUBLIC UTILITY COMMISSION WILL DETERMINE WHAT'S BEST FOR THE RTP FOLLOWING THAT.

AND ONE THING I THINK THAT'S IMPORTANT TO NOTE HERE, THE TAKEAWAY ON THE BOTTOM, WHILE THIS IS NEW TO THE ERCOT GRID, IT IS NOT NEW TO THE UNITED STATES OR TO THE GLOBAL TRANSMISSION ECONOMY.

7 65 KV SYSTEMS HAVE BEEN AROUND FOR DECADES, HAVE BEEN USED THROUGHOUT THE UNITED STATES FOR DECADES AND IN OTHER PARTS OF THE WORLD.

AND SO THERE IS A ROBUST, UH, EXPERIENCE SET IN THE EPC WORLD, THE ENGINEERING, PROCUREMENT AND CONSTRUCTION WORLD, AS WELL AS A ROBUST SUPPLY CHAIN GLOBALLY TO SUPPORT THE INFRASTRUCTURE THAT'S NEEDED TO DEVELOP 7 65, WHICH IS SOMETHING THAT TEXAS COULD BENEFIT FROM.

WHEN WE LOOKED AT THE COMPARISON FOR THE BROADER REGIONAL TRANSMISSION PLAN, THIS IS FOR THE WHOLE STATE OF TEXAS, WE SAW, YOU KNOW, SOME VERY STRONG ATTRIBUTES, UH, TO THIS HIGHER VOLTAGE CAPABILITY THAT WE WANTED TO MAKE SURE THAT WAS UNDERSTOOD BY THE MARKET AND BY OUR REGULATORY PARTNERS.

THE COST DIFFERENTIAL BETWEEN THE TWO, VERY SIMILAR, ESPECIALLY WHEN YOU FACTOR IN, THERE'S, UH, WHEN YOU DO AN ALL 3 45 PLAN, THERE'S A SIGNIFICANTLY A GREATER AMOUNT OF 3 45 CONSTRUCTION THAT HAS TO BE DONE ON EXISTING TRANSMISSION FACILITIES.

SO EFFECTIVELY WORKING ON LIVE OR HOT TRANSMISSION LINES, THERE'S INCREMENTAL COST WHEN YOU DO THAT, WHEN YOU FACTOR THAT IN IT, IT NORMALIZES AND, AND, UH, EQUALIZES THE COST BETWEEN THE TWO, UM, FAIRLY SIGNIFICANTLY.

SO YOU LOOK AT THE, KIND OF THE NET DIFFERENCE HERE, 32 AND A HALF BILLION FOR A 3 45 FULL PLAN VERSUS 33.9 BILLION EFFECTIVELY, THAT THAT RATIONS DOWN OVER A SIX YEAR PERIOD TO JUST OVER ABOUT $6 BILLION A YEAR, FIVE TO 6 BILLION, I'M SORRY, ABOUT $5 BILLION A YEAR OVER A SIX YEAR PERIOD TODAY, THIS LAST YEAR WE APPROVED ALMOST $3.8 BILLION OF TRANSMISSION COST IN 2024.

SO IT'S A LITTLE BIT OF A STEP UP FROM WHAT WE'RE DOING, BUT IT'S NOT A RADICAL STEP UP FROM WHAT WE ARE ALREADY USED TO DEVELOPING AND BUILDING HERE IN THE ERCOT GRID.

YOU CAN SEE ON THE KIND OF THE ANNUALIZED SAVINGS, THE BENEFITS REALLY PLAY OUT OVER THE LIFETIME OWNERSHIP OF A

[00:25:01]

7 65 SYSTEM.

WHILE THERE'S A SLIGHTLY UPFRONT HIGHER COST, THE BENEFITS PLAY OUT IN TERMS OF REDUCTION IN LINE LOSSES, REDUCTION IN CONGESTION COSTS, THOSE TRANSLATE DIRECTLY INTO LOWER COSTS FOR CONSUMERS.

SO OVER THE LIFE OF A SYSTEM LIKE THIS, ESPECIALLY CONSIDERING HOW MUCH, UH, UNCERTAINTY IN TERMS OF THE TIMING AND THE DEGREE TO WHICH LOAD WILL CONTINUE TO COME TO TEXAS, THERE IS A LOT OF POTENTIAL VALUE OVER HERE ON THE TOTAL COST OF OWNERSHIP FOR A 7 65 SYSTEM IN COMPARISON TO THE 3 45.

AND THEN, YOU KNOW, IN ADDITION, YOU KNOW, WE SEE THAT THE, THE CURRENT SYSTEM THAT WE'RE OPERATING IS REALLY GETTING, YOU KNOW, CLOSE TO ITS FULL UTILIZATION CAPACITY.

THAT'S ONE OF THE DRIVERS.

NOT ONLY DO WE SEE THE LOAD GROWTH BEING VERY SIGNIFICANT, BUT THE, WE HAVE SEEN EFFECTIVELY WITH THE RAPID INCREASE IN SUPPLY.

SO, YOU KNOW, WE TALK ABOUT ALL THE TIME, SIGNIFICANT GROWTH IN SOLAR, SIGNIFICANT GROWTH IN BATTERIES RECENTLY ON THE GRID THAT REQUIRES TRANSMISSION TO CARRY THAT SUPPLY.

AND THEN IT'S A GRID SIGNIFICANT GROWTH ON THE LOAD SIDE.

SO THE TRANSMISSION SYSTEM TAKES LONGER TO DEVELOP THAN BOTH THE SUPPLY AND THE LOAD.

AND SO WHAT WE'VE SEEN IS THAT THE TRANSMISSION SYSTEM OVER THE LAST FIVE, 10 YEARS HAS REALLY BECOME FULLY UTILIZED.

AND THE EVIDENCE OF THAT YOU CAN SEE IS IN THE NUMBER OF GTCS WE HAVE ON THE GRID.

THOSE HAVE GROWN OVER THE LAST SEVERAL YEARS.

THE TRANSMISSION OPERATORS, IF THEY WERE UP HERE, WOULD PROBABLY TALK ABOUT THE FACT THAT THE WINDOWS FOR LONG-TERM OUTAGES TO DO MAINTENANCE HAVE BEEN DECREASING OVER THE YEARS.

MEANING THAT WE AS ERCOT CAN ONLY PROVIDE FEWER LONGER TERM WINDOWS BECAUSE THERE ARE SO MANY PERIODS OF TIME WHEN THE GRID IS GONNA BE FULLY, FULLY UTILIZED DURING A SHOULDER PERIOD THAT IT'S VERY DIFFICULT TO ALLOTT SO MUCH CAPACITY FOR OUTAGES ON THE TRANSMISSION SYSTEM.

THAT CREATES A BOTTLENECK IN TERMS OF THE PLANNING PROCESS, AND IT MAKES IT MORE COSTLY TO DO THE TRANSMISSION MAINTENANCE AND OUTAGES THAT ARE REQUIRED WHEN IT CAN'T BE DONE SEQUENTIALLY OVER A LONGER WINDOW OF TIME.

THOSE ARE ALL EVIDENCE THAT WE'RE FULLY UTILIZING THE SYSTEM MORE AND MORE AND MORE EACH SUBSEQUENT YEAR.

SO BEING ABLE TO BUILD OUT THAT CAPACITY AND THAT FLEXIBILITY TO PROVIDE SOME RELIEF TO THAT HAS SOME REAL POTENTIAL VALUE TO THE SYSTEM LONG TERM.

THIS PICTURE HERE SHOWS WHAT A POTENTIAL VIEW WOULD LOOK LIKE OF A 7 65 PLAN.

YOU SEE HERE, THIS IS THE PERMIAN BASIN CONNECTION POINTS WHERE YOU'VE GOT THREE, UH, KIND OF ARTERIES OF 7 65 KV LINES TAKING POWER OUT INTO THE, UH, PERMIAN BASIN TO SERVE THE LOAD.

AND THEN YOU'VE GOT THE LOOP THAT'S CONNECTED HERE FROM THE NORTHERN DALLAS AND AND AREA DOWN INTO HOUSTON, DOWN INTO THE VALLEY, AND CONNECTING BACK UP INTO MAKE A, A RELIABLE LOOP AROUND THE, AROUND THE STATE.

AND THEN ONE OF THE OTHER BENEFITS THAT WE TALK ABOUT HERE IS THE POTENTIAL RESILIENCY BENEFITS.

RESILIENCY HAS BECOME A VERY IMPORTANT TOPIC, ESPECIALLY IN LIGHT OF RECENT HURRICANE EVENTS AROUND THE SYSTEM.

AND WHEN YOU THINK ABOUT WHAT, WHAT 7 65 PROVIDES IN TERMS OF ITS ABILITY TO MOVE POWER SIGNIFICANT INCREASES SIX TIMES THE POWER MOVING OF A SINGLE 3 45 LINE, IT ALSO PROVIDES THE EQUIVALENT STRENGTH IN TERMS OF RESILIENCY.

AND SO IF THERE WERE TO BE A VERY LARGE IMPACT FROM A HURRICANE THAT TOOK OUT A SIGNIFICANT PORTION OF THE TRANSMISSION, THE LOWER EARTH TRANSMISSION SYSTEM ALONG THE COAST, THE STRENGTH OF A 7 65 SYSTEM TO BE ABLE TO KEEP THE ERCOT GRID STABLE AND OPERATING IS SOMETHING THAT'S A RESILIENCY BENEFIT THAT WOULD ALSO BE INCREMENTAL TO WHAT WE HAVE TODAY WITH OUR 3 45 SYSTEM.

SO THERE'S A LOT OF ATTRIBUTES THAT YOU CAN QUALIFY, SOME THAT YOU CAN QUANTIFY, AND, UH, WE'RE LOOKING FORWARD TO HAVING THE CONVERSATION WITH ALL THE STAKEHOLDERS AS TO WHAT'S THE RIGHT STRATEGY AND WHAT'S THE RIGHT NEXT MOVE FOR TEXAS AT THIS POINT.

SO I'LL PAUSE THERE IF THERE'S ANY QUESTIONS ON OUR KIND OF TRANSMISSION PLANNING RIGHT NOW.

AS I SAID, THE NEXT STEPS ARE BY MAY THE PUBLIC UTILITY COMMISSION WILL BE MAKING A DECISION ON THE PERMIAN COMPONENTS.

AND THEN FOLLOWING THAT, THE POTENTIAL FOR RECON FOR CONSIDERATION WHAT HAPPENS TO THE REST OF THE, UH, THE REGIONAL TRANSMISSION PLAN.

JULIE PABLO, THANK YOU FOR THE PRESENTATION.

UH, WITH THE MAY ONE DECISION BY THE PUBLIC UTILITY COMMISSION OF TEXAS, WHEN WOULD, COULD WE EXPECT, WHAT'S THE TIMELINE ELECTRIFICATION AND BENEFIT TO THE GRID? SO THE, THE DEVELOPMENT PLANS FOR THE, FOR THIS WHOLE SYSTEM IS, YOU KNOW, COMING ONLINE OVER THE NEXT FOUR TO SIX YEARS, UH, WITH, YOU KNOW, A LOT OF THE LARGE, UH, LARGER DEVELOPMENT KIND OF TOWARDS THE, THE BACKEND, A LOT OF 3 45 DEVELOPMENT IN THE SHORT TERM.

AND THAT'S SOMETHING THAT'S IMPORTANT THAT THIS 7 65 PLAN ISN'T TO THE EXCLUSION OF A VERY ROBUST 3 45 SYSTEM.

IN FACT, IT'S BUILT IN TANDEM.

AND SO BOTH WOULD BE DEVELOPING TOGETHER AND IT'S REALLY OVER THAT FOUR TO SIX YEAR WINDOW THAT WE'D SEE THE ENERGY, THE ELECTRIFICATION OF THESE ASSETS AND THE TIMETABLE TO SERVE THE, UH, THE LOAD ON EITHER, ON EITHER PLAN.

BOTH THE PLANS WOULD'VE SIMILAR TIME WINDOWS.

ARE NOT ABSOLUTELY CERTAIN THAT THEY CAN DO, UH, SAFELY AND RELIABLY.

HOW ABOUT YOU, UH, QUANTIFIED THE COST SAVINGS OF 7 65 VERSUS 365 FOR, UH, LIVE HOT CONSTRUCTION.

IS THERE, ASSUME THERE WOULD BE A SAFETY ISSUE ALSO WITH THAT? IS THERE, WELL, I, I THINK THE, YOUR EPC COMPANIES AND YOUR TRANSMISSION OPERATORS TODAY THAT WOULD SAY THAT, YOU KNOW, THEY WILL NEVER DO ANYTHING THAT THEY

[00:30:01]

AND THE TECHNIQUES ON HOW WE CONDUCT RAIN WORK AND CONSTRUCTION WORK IS DONE ON LIVE FACILITIES HAS PROGRESSED SIGNIFICANTLY OVER THE YEARS.

WHEN, WHEN I WAS LEADING, UH, THE TEXAS UTILITY COMPANY, YOU KNOW, 15 YEARS AGO WE DID THIS KIND OF WORK.

AND I CAN JUST SAY THAT OVER THE LAST 15 YEARS, SAFETY PRACTICES HAVE ONLY IMPROVED AND, AND EVOLVED.

AND SO I THINK I WOULD SAY I CAN, I, I WOULD FEEL COMFORTABLE THAT THE OPERATORS CAN DO IT ALL VERY SAFELY AND RELIABLY.

UH, BUT IT'S JUST MORE DIFFICULT FROM A TIMING PERSPECTIVE BECAUSE YOU'RE DEALING WITH FACILITIES THAT HAVE TO SERVE LOAD WHILE YOU'RE WORKING ON IT.

AND SO THE STARTING AND STOPPING ALWAYS THE, PROBABLY THE BIGGEST RISK WHEN YOU'RE WORKING ON A, ON A PROJECT IS THE MENTAL STARTING AND STOPPING OF WORK THAT YOU'RE DOING.

WHEN YOU'VE GOT A PLAN, YOU GET READY FOR THE PLAN AND YOU EXECUTE A PLAN.

THAT'S THE SAFEST WAY TO DO WORK.

WHEN YOU'RE CONSTANTLY HAVING TO POTENTIALLY STOP AND PAUSE BECAUSE YOU HAVE OPERATIONAL OBLIGATIONS IN THE MIDDLE, THAT, THAT INTRODUCES PROBABLY THE MOST RISK WHEN YOU'RE WORKING ON, UM, YOU KNOW, INFRASTRUCTURE THAT'S DANGEROUS.

AND SO I THINK POTENTIALLY YOU HAVE TO MANAGE THAT RISK WHEN YOU'RE DEALING WITH HOT INFRASTRUCTURE.

BUT THE TECHNIQUES TODAY ARE EXCELLENT AND THEY COULD BE DONE VERY SAFELY.

SO PROBABLY THE, UH, THE COST DIFFERENTIAL IS ABOUT 4%, OR, YOU KNOW, ROUGHLY A BILLION AND A HALF DOLLARS.

AND, UH, BUT THE ANNUAL SAVINGS ARE ABOUT 275 MILLION.

SO THERE'S A, THE STATE OF TEXAS BREAK, I GUESS THEIR TEXAS CONSUMERS BREAK EVEN IN ABOUT SEVEN YEARS, AND THEN THEY GET THOSE SAVINGS IN PERPETUITY BEYOND THAT.

THAT'S RIGHT.

AND THESE ASSETS ARE 50 YEAR ASSETS THAT WE'RE DEVELOPING EXACTLY AS, YOU KNOW, TRANSMISSION LINES ARE RUNNING FOR A LONG TIME SO THAT, THAT BENEFIT CASE CONTINUES TO PLAY OUT AND I THINK GROWS IN FACT, AS YOU SEE THE LOAD AND SUPPLY GROW, UH, WITH IT.

AND CAN YOU ADDRESS ANY, UH, I THINK YOU TALKED ABOUT THIS AT LEAST IN OUR CONVERSATIONS WE'VE HAD IN THE PAST, UH, THE SUPPLY CHAIN ISSUES OF 3 45 VERSUS 7 65.

WHAT, WHAT HAVE WE LEARNED FROM THAT? YEAH, THE GOOD, THE GOOD NEWS IS THAT, YOU KNOW, BECAUSE 7 65 IS A, IS A WELL-KNOWN TECHNOLOGY, UH, GLOBALLY, THE, UM, WE'RE NOT THE ONLY ONES THINKING ABOUT THIS.

YEAH.

AND SO WE ARE SEEING PLANS, YOU KNOW, EMERGING BECAUSE THIS LOAD GROWTH STORY, UH, THAT'S HAPPENING IN TEXAS IS ALSO HAPPENING IN OTHER REGIONS IN THE US.

AND SO WE'VE SEEN PLANS OUT OF SPP AND MISO THAT INCLUDE 7 65 FOR THE FIRST TIME.

SOME OF IT ACTUALLY HERE IN TEXAS, IN THE REGIONS OUTSIDE OF ERCOT.

AND THEN OF COURSE IN PJM AND OTHER PARTS OF THE COUNTRY THAT HAVE BEEN DEVELOPING IT, THEY CONTINUE TO, UH, DEVELOP AND EXPAND.

AND SO THE SUPPLY CHAIN IS ROBUST AND THE FEEDBACK THAT WE'VE GOTTEN FROM THE, UH, OEMS THAT ACTUALLY MAKE THE EQUIPMENT AS WELL AS FROM THOSE THAT WHO BILLED IT, TELL US THAT THE AVAILABILITY OF THE EQUIPMENT IS ON PAR WITH 7 65 AS IT IS WITH 3 45.

SO WE EXPECT THE ABILITY TO DELIVER WITH SCHEDULE TO BE VERY SIMILAR BETWEEN THE TWO PLANS.

OKAY, THANK YOU.

ANY OTHER QUESTIONS OR COMMENTS? CAN YOU SPEAK JUST A MINUTE ABOUT, UH, STABILITY AND ALSO, I KNOW WE'VE BEEN CHARGED TO GETTING POWER TO THE PERMIAN AND, UH, WITH THE IMPORT PASS EITHER 7 65 OR 3 45, UM, WHAT BENEFIT IS, UM, 7 65 TO ACTUALLY IN THE IMPORT PASS ACTUALLY GETTING THE POWER ALL THE WAY TO THE PERMIAN AS OPPOSED TO, UM, JUST HAVING A 3 45 BUILD OUT? YEAH, THERE, SO YOUR FIRST QUESTION AROUND STABILITY, YOU KNOW, THE, THE STABILITY CHARACTERISTICS OF THE 7 65 INFRASTRUCTURE ARE, ARE REALLY QUITE REMARKABLE.

AND THEY, THEY PROVIDE A LOT OF STRENGTH TO THE, UM, TO THE BACKBONE OF THE, UH, OF THE, OF THE BROADER GRID THAT THEY'RE CONNECTED TO.

SO THEY DO PROVIDE GRID STABILITY BENEFITS INHERENTLY IN, IN TERMS OF THE WAY THAT THEY OPERATE.

AND THEN WHEN YOU THINK ABOUT THE PERMIAN CASE, IF I GO TO THE SLIDE HERE THAT SHOWS, YOU CAN SEE THE LONGEST LINES THAT ARE DEVELOPED IN THIS REGIONAL TRANSMISSION PLAN FOR THE STATE ARE THE ONES THAT ARE HAULING POWER OUT TO THE LOAD CENTERS.

AND THE PERMIAN, THE VALUE CASE FOR THE BENEFITS OF HIGHER VOLTAGES ARE GREATEST FOR THE, WHEN YOU HAVE LONGER DISTANCE BECAUSE YOU HAVE LOWER LINE LOSSES AND LINE LOSSES INCREASE WITH THE DISTANCE.

AND SO YOU GET THE BENEFIT AT THE, THE, THE PEAK BENEFITS FOR HAVING THAT POWER, UH, RUNNING ON A HIGHER VOLTAGE ON A LONGER LINE.

SO DEFINITELY THAT THE VALUE CASE THERE IS MAXIMIZED.

AND THEN, YOU KNOW, 7 65 IS REALLY A GOOD WAY TO THINK ABOUT IT.

IT'S, IT'S KIND OF LIKE A FREIGHT HAUL, UH, SYSTEM.

UM, IF YOU THINK ABOUT THE WAY, YOU KNOW, WHOLESALE FREIGHT MOVES AROUND THE, THE, THE GLOBE ON SHIPS, TYPICALLY, YOU DON'T GO RIGHT FROM A SHIP TO A, UH, YOU KNOW, AND DROP OFF RIGHT? AT A RETAIL STORE.

YOU HAVE A, YOU HAVE A SET OF SUPPLY CHAINS THAT TAKE FROM THE WHOLESALE DROP OFF POINTS ON THAT KIND OF LARGE FREIGHT NETWORK, AND THEN YOU DISTRIBUTE IT DOWN TO THE, TO THE RETAIL AND, UH, DELIVER IT.

7 65 IS SIMILAR.

YOU DON'T TAKE POWER DIRECTLY FROM A 7 65 SYSTEM AND YOU SERVE A CUSTOMER WITH IT.

IT'S THE LONG, IT'S THE HAUL THAT MOVES IT AROUND THE SYSTEM VERY, VERY RELIABLY AND, AND, UH, VERY EFFICIENTLY.

AND THEN YOU SEND IT DOWN INTO THE DISTRIBUTION TRANSMISSION NETWORK,

[00:35:01]

THE 3 45 1 38 SYSTEMS AND LOWER AND CONNECT YOUR CUSTOMERS DIRECTLY TO THOSE SYSTEMS BASED ON THEIR SIZE AND THEIR, AND THEIR LOAD REQUIREMENTS.

SO YOU GET THE BENEFIT OF HAVING THIS KIND OF LONG HAUL HIGHWAY SYSTEM THAT IS GOING TO MOVE THE POWER WHERE IT NEEDS TO GET TO, TO THE PERMIAN, AND THEN THE UNDERLYING 3 45 SYSTEM THAT'LL GET BUILT SPECIFICALLY IN THAT AREA TO SERVE THE CUSTOMERS THAT ARE GONNA NEED IT.

SO IT'S A REALLY, IT'S A, IT'S A VERY EFFICIENT AND AND TARGETED WAY TO ENSURE THAT THOSE REGIONS OF THE STATE GET THE POWER THAT THEY NEED.

PABLO COULD, COULD YOU TALK A A BIT ABOUT, UM, POTENTIAL INTERCONNECTION TO OTHER NEIGHBORING, UM, SYSTEM OPERATORS? 'CAUSE THAT'S ANOTHER ITEM THAT'S IMPORTANT WITH 7 65 IN CAPACITY AND ALSO BIDIRECTIONAL FLOWS.

SO RIGHT NOW, AS YOU KNOW, THERE'S, THERE ARE SEVERAL, UM, DC PROPOSED CONNECTIONS FROM THE ERCOT GRID, WHICH IS DIRECT CURRENT, UH, NON SYNCHRONOUS, UH, CONNECTIONS FROM ERCOT OUTSIDE OF ERCOT INTO, UH, OTHER REGIONS OF THE, OF THE UNITED STATES.

THIS STRATEGY DOES NOT, THE 7 65 OR 3 45 STRATEGY WOULD NOT, UH, LEAN TOWARDS, UH, DRIVING TOWARDS MORE INTERCONNECTIONS NOR LESS INTERCONNECTIONS.

IT CAN BE CONTEMPLATED INDEPENDENTLY OF THOSE DECISIONS.

THE SYNCHRONOUS CONNECTIONS OF ANY OF THESE VOLTAGES WE'RE TALKING ABOUT, WHETHER IT'S 7 65 OR 3 45, IS A, UH, A VERY SIGNIFICANT POLICY DECISION THAT WOULD BRING INTO QUESTION KIND OF THE FERC EXEMPTIONS THAT P THAT THE ERCOT HAS RELATED TO ITS INDEPENDENCE AS AN OPERATING GRID.

AND THE CONSIDERATION OF INTERCONNECTING OUR, OUR GRID AT ANY OF THESE VOLTAGES SYNCHRONOUSLY TO THE OTHER PARTS OF THE US IS SOMETHING THAT IS REALLY NOT ON THE TABLE WITH ANY OF THIS EVALUATION OR ANY OF THIS WORK THAT WE'RE DOING.

HOWEVER, THE CONTINUED EVALUATION OF THE DIRECT CURRENT CONNECTIONS, LIKE THE SOUTHERN SPIRIT PROJECT OR THE, THE ONE THAT'S, UH, BEING CONTEMPLATED OUT WEST, UH, NEAR EL PA THROUGH EL PASO, THOSE TYPES OF PROJECTS ARE BEING EVALUATED BASED ON THEIR OVERALL BENEFITS TO THE CUSTOMERS ON EACH SIDE OF THAT.

AND TO THE DEVELOPERS THAT ARE CONSIDERING IT.

AND THEY HAVE BOTH, YOU KNOW, THEY HAVE RELIABILITY COMMERCIAL, UH, CONSIDERATIONS THAT ARE BEING EVALUATED, AND THOSE ARE BEING LOOKED AT THROUGH THE LENS OF NOT CHANGING THE, FOR JURISDICTIONAL, UM, UH, DEFINITION OF ERCOT, MEANING THAT WE ARE EXEMPT FROM, FOR JURISDICTIONAL OVERSIGHT, FOR WHOLESALE POWER, UH, UH, PLANNING AS WELL AS FOR TRANSMISSION PLANNING.

SO I APPRECIATE THE QUESTION, CARLOS, BECAUSE THAT MAY COME UP.

THAT IS THIS KIND OF DRIVING US TOWARDS, YOU KNOW, A FUTURE WHERE WE EXPECT MORE OR LESS INTERCONNECTIONS, UH, REGION INTER REGIONALLY, AND IT DOES NOT IMPLY ONE WAY OR THE OTHER, ANY INTENT OR DIRECTION, UH, TO DO MORE OR LESS OF THAT, RIGHT? AND CONFIRMS THE INDEPENDENCE AND, UH, SELF-RELIANCE OF ERCOT.

THAT'S EXACTLY RIGHT.

IT, IT STRENGTHENS THAT SELF-RELIANCE.

IT STRENGTHENS THAT RELIABILITY AND RESILIENCY.

AND SO IT, IT ACTUALLY WITH A SOLUTION INSIDE OF ERCOT CAN HELP TO ADDRESS WHAT SOME OF THE PROPOSED INTERCONNECTION BENEFITS WOULD BE, WOULD REALLY BE DELIVERED WITHIN A SOLUTION THAT'S INSIDE OF ERCOT.

ANY OTHER QUESTIONS OR COMMENTS? I WILL, UH, CLOSE WITH THIS PABLO.

I WANT TO, UH, COMPLIMENT THE TEAM ON THE GREAT WORK THAT THEY'VE DONE WITH THE STUDY AND ALSO, UH, A FEW DAYS AFTER THE STUDY WAS FILED WITH THE PUC, UH, ERCOT PUBLISHED THE TRENDING TOPICS REPORT, WHICH I THINK, UH, WOULD BE GREAT FOR EVERY TEXAN TO BE ABLE TO READ, TO SEE HOW, UH, THE STATE CAN LEAN INTO THIS NEXT, UM, NEXT GENERATION OF INFRASTRUCTURE JUST LIKE THEY DID BACK IN THE LATE SIXTIES, EARLY SEVENTIES WHEN THEY SET UP THE 3 45 KVA SYSTEM.

SO I THINK IT'S, UH, I THINK IT'S A GOOD MOVE AND I APPRECIATE THE WORK THAT YOU'VE DONE.

APPRECIATE THAT.

AND I WANNA CLOSE MY THANKS AS WELL AS I ALWAYS DO WITH MY, UH, CEO UPDATES.

I'D LIKE TO RECOGNIZE, UH, THE GROUPS OF EMPLOYEES THAT WORKED ON A, A REALLY SIGNIFICANT SET OF PLANNING REPORTS THAT ALL CAME OUT AT THE END OF THE YEAR.

THE TIMING IS ALWAYS WONDERFUL.

RIGHT AT THE END OF THE YEAR, WE'VE GOT THESE SIGNIFICANT, IMPORTANT REPORTS THAT WE PUBLISH.

ONE OF THOSE WAS THAT 2024 REGIONAL TRANSMISSION PLAN, UH, WHICH INCLUDED THAT, UH, 7 65 STEP, WHICH STANDS FOR STRATEGIC TRANSMISSION EXPANSION PLAN.

WE'VE GOT THE GRID RELIABILITY AND RESILIENCY ASSESSMENT THAT WAS PUBLISHED, THE EXISTING AND POTENTIAL ELECTRIC SYSTEM CONSTRAINTS AND NEEDS REPORT, AS WELL AS THE LONG-TERM SYSTEM ASSESSMENT.

AND THESE EMPLOYEES HERE, UH, THAT ARE LISTED, WERE INSTRUMENTAL IN THE DEVELOPMENT OF THESE REPORTS ALL PUBLISHED, UH, AT THE END OF LAST YEAR.

SO A BIG THANK YOU TO ALL OF THEM, AND WE APPRECIATE THE WORK THAT GOES INTO, UH, THIS IMPORTANT DATA, THIS IMPORTANT PRODUCT THAT ERCOT PRODUCES FOR THE MARKET.

SO THANK YOU.

AND IF THERE'S NOT ANY OTHER QUESTIONS, THAT CONCLUDES MY, UH, MY REPORT CHAIRMAN.

I DON'T SEE ANYBODY ELSE THAT HAS ANY QUESTIONS, SO THANK YOU, PABLO.

[00:40:01]

UH, NEXT UP

[7. TAC Report ]

IS THE GEN ITEM SEVEN, KAITLIN WEST, EXCUSE ME.

KAITLYN SMITH IS GOING TO, UH, UH, PRESENT THE TAC REPORT.

AND AGAIN, KAITLYN, CONGRATULATIONS ON YOUR, UH, REELECTION AS CHAIR.

PROCEED WHEN YOU'RE READY.

ALL RIGHT.

UH, GOOD MORNING.

I'M KAITLYN SMITH.

I'M THE NOW RETURNING CHAIR OF THE TECHNICAL ADVISORY COMMITTEE.

AND, AND THANK YOU FOR THE VOTE OF CONFIDENCE EARLIER.

I MADE SOME COMMENTS AT THE BEGINNING, BEGINNING OF OUR JANUARY TECH, AND I WANTED TO SAY HERE ALSO, I, I THINK WE MADE A LOT OF PROGRESS LAST YEAR.

UM, FINDING THE PLACE FOR THE STAKEHOLDER VOICE AND THE ROLE OF POLICY AND GOVERNANCE OVER THIS INDUSTRY HAS TAKEN A LITTLE BIT OF TIME WITH THE INDEPENDENT BOARD AND POSTERIOR, BUT I, I DO THINK WE MADE TREMENDOUS PROGRESS WITH THE HELP OF, OF CHAIRMAN FLORES, CHAIRMAN GLEASON, WHO, WHO I BELIEVE IS AT THE SENATE HEARING PUC STAFF AND, AND PAST CHAIRMAN FLEXON OF R AND M.

WE, WE APPRECIATE ALL THE ENGAGEMENT AND FEEDBACK.

UH, CHAIRMAN FLORES, YOU ATTENDED TAC, WHICH WE REALLY, REALLY LIKED.

PUC STAFF IS ATTENDING TAC AND AND WE'RE JUST LOOKING FORWARD TO WORKING WITH THE BOARD, ESPECIALLY, UH, CHAIR AND, AND NEW VICE CHAIR AND AND CHAIR ENGLAND AND R AND M AND, AND THE TWO NEW BOARD MEMBERS.

WE ALSO, AS YOU, UH, VOTED, WE HAVE A, A NEW TECH VICE CHAIR THIS YEAR, MARTHA HENSON.

SHE'S RIGHT OVER THERE FROM ENCORE.

UM, SHE'S PROBABLY THE MOST KNOWLEDGEABLE STAKEHOLDER ABOUT THE REVISION REQUEST PROCESS, SO WE'RE REALLY LUCKY TO, TO HAVE HER THIS YEAR.

SO AS WE DO AT EACH BOARD MEETING, I'LL BE PRE PRESENTING A SUMMARY OF THE TECH MEETINGS THAT HAVE OCCURRED, UH, SINCE LAST BOARD MEETING.

WE ONLY HAD JANUARY, WE TOOK, UH, DECEMBER OFF FOR THE HOLIDAYS.

WE HAVE TYPICALLY BEEN INCLUDING HIGHLIGHTS FROM OUR, OUR SUBCOMMITTEES, WHICH I THINK HAS BEEN WELL RECEIVED TODAY.

WE'RE GONNA SKIP THAT BECAUSE IT'S SO EARLY ON IN THE YEAR.

BUT WE DO HAVE A REVIEW OF OUR 2024 REVISION REQUESTS AND HOW THOSE ALIGNED WITH THE, THE PAST T GOALS.

SO AT THE JANUARY MEETING, TAC UNANIMOUSLY, UH, VOTED TO RECOMMEND APPROVAL OF 17 REVISION REQUESTS, NO REVISION REQUESTS WITH OPPOSING VOTES.

AND HERE ARE THOSE 17 REVISION REQUESTS.

WE ALSO, UM, WE CONFIRMED LEADERSHIP FOR OUR SUBCOMMITTEES AND FOR OUR SUBGROUP THAT REPORT DIRECTLY TO TAC FOR THE PROTOCOL REVISION SUBCOMMITTEE.

THESE ARE BOTH RETURNING LEADERS.

UH, IT'S CHAIR DIANA COLEMAN FROM CPS VICE CHAIR, ANDY WYNN FROM LCRA FOR THE RETAIL MARKET SUBCOMMITTEE.

WE, WE DID A CHAIR, VICE CHAIR SWAP FROM LAST YEAR.

WE HAVE CHAIR DEBBIE MCKEEVER FROM ENCORE AND VICE CHAIR JOHN SCH FROM RA.

UH, FOR THE RELIABILITY OPERATIONS SUBCOMMITTEE, WE HAVE CHAIR KATIE RICH FROM RA RETURNING FROM LAST YEAR, AND VICE CHAIR, UH, SANDEEP BOKAR FROM LCRA.

HE'S NEW TO LEADERSHIP FOR, UH, THE WHOLESALE MARKET SUBCOMMITTEE.

WE HAVE CHAIR BLAKE HOLT FROM LCRA, WHO IS NEW TO LEADERSHIP, I BELIEVE BOTH OF THESE LCRA NEW AND LEADERSHIP FOLKS HAVE, UH, WERE PAST ERCOT EMPLOYEES, SO WE HAVE SOME REALLY GOOD EXPERIENCE THERE.

AND THEN VICE CHAIR JIM LEE FROM CENTERPOINT IS RETURNING TO WHOLESALE MARKET SUBCOMMITTEE FOR CREDIT FINANCE SUBCOMMITTEE.

WE HAVE CHAIR LORETTO MARTIN FROM RELIANT AND, UH, VICE CHAIR, ANOTHER NEW LEADER, JEFF PRICE FROM GOLDEN SPREAD ELECTRIC CO-OP JANUARY TECH HIGHLIGHTS, UM, THE THREE RPG PROJECTS, WHICH WERE DISCUSSED AT R AND M YESTERDAY.

UM, THE, THE ENCORE VENUS SWITCH TO SAM SWITCH 3 45 KV LINE PROJECT TECH UNANIMOUSLY VOTED TO ENDORSE OPTION ONE, THE ENCORE WILMER 3 45 1 38 KV SWITCH.

PROJECT TECH UNANIMOUSLY VOTED TO ENDORSE OPTION ONE AND THE ENCORE 43 45 1 38 KV SWITCH REBUILD.

PROJECT TECH UNANIMOUSLY VOTED TO ENDORSE OPTION ONE A.

WE ALSO, UM, THERE ARE PROPOSED CHANGES TO THE ANCILLARY SERVICE METHODOLOGY, UM, FOR THIS YEAR ASSOCIATED WITH NPRR 1257 NPR 1257, AND THE ASSOCIATED NOER, WHICH IS 2 71.

WE'RE ALSO ON THE, THE UNOPPOSED, UH, REVISION REQUEST APPROVED BY TAC AND APPROVED BY YOU TODAY.

THE, THE CONCEPT HAS BEEN DISCUSSED FOR SEVERAL YEARS AND, AND GE DID A STUDY AND THIS KIND OF AGREED

[00:45:01]

SOLUTION WAS TO HAVE A HARD LIMIT ON THE AMOUNT OF RRSA RESOURCE CAN PROVIDE.

THIS WOULD BE A 1 57 MEGAWATT LIMIT TO START AND CAN BE UPDATED IN THE AS METHODOLOGY YEAR TO YEAR.

SO THE CHANGE IN THE AS METHODOLOGY IS JUST TO ADD A NEW PARAMETER AND, AND IT DOESN'T AFFECT THE OTHER PARAMETERS.

SO ON THE NEXT TWO SLIDES, WE HAVE OUR 2024 GOALS.

UH, YOU'LL, YOU'LL NOTICE THIS IS A PRETTY LENGTHY AND DETAILED LIST FOR 2025.

WE ARE TRYING TO MAKE THIS A LITTLE MORE MEANINGFUL AND I THINK A, A SHORTER LIST.

AND WE'LL HAVE THOSE 25 GOALS FOR YOU TO APPROVE AT THE APRIL BOARD.

I THINK WHERE WE'RE MOVING WITH GOALS IS TO BE HIGHER LEVEL GOALS WE CAN SUSTAIN YEAR TO YEAR.

MORE ABOUT, YOU KNOW, WHAT WE WANNA HOLD OURSELVES AS TAC THE STANDARDS WE WANNA HOLD OURSELVES TO AND BEING, YOU KNOW, LESS REACTIVE TO CERTAIN SITUATIONS.

I THINK THAT WILL WORK BETTER BECAUSE WE DO HAVE WHAT WE CALL A OPEN ACTION ITEMS LIST, AND THAT HAS THE ACTIONS THAT, THAT ARE PROACTIVE AND RESPONSIVE AND THEN WE CAN TICK THE BOX ON, AND I THINK THE GOALS WILL BE MORE THINGS WE CAN JUST HOLD OURSELVES AS A BODY, THE STANDARDS TO.

SO, UH, THANK YOU TO COREY AND ANN.

THEY MAP ALL OF OUR REVISION REQUESTED GOALS.

UM, AND HERE'S THE, THE KIND OF PICTORIAL OF IT.

YOU CAN SEE THAT THE MOST REVISION REQUESTS FROM MAP TO GOAL SEVEN, AND I THOUGHT THIS WAS PRETTY INTERESTING.

GOAL SEVEN IS DEVELOP AND IMPLEMENT NEEDED MARKET DESIGN CORRECTIONS AND IMPROVEMENTS, WHICH ARE COST EFFECTIVE.

AND SO I THINK THE EMPHASIS HAS BEEN ON THOSE IMPROVEMENTS AND THE COST EFFECTIVENESS.

OTHER GOALS THAT WE'RE FREQUENTLY MAPPED TO WERE GOAL THREE, MAINTAIN RULES THAT SUPPORT ERCOT SYSTEM RELIABILITY, PROMOTE MARKET SOLUTIONS, SUPPORT OPEN ACCESS TO THE ERCOT MARKETS AND TRANSMISSION NETWORK IN OUR CONSISTENT WITH PURE PUC SUBSTANTIVE RULES AND NERC RELIABILITY STANDARDS.

UM, GOAL FIVE, WHICH WAS IMPROVED MONITORING OF RE RESOURCE ADEQUACY BY ENSURING THAT REPORTS AND STUDIES PROVIDE A REPRESENTATIVE VIEW.

AND SO THE CDR UPDATE YOU SAW TODAY.

UM, GOAL 10, IMPLEMENT RETAIL IMPROVEMENTS AND REQUIREMENTS, THINGS LIKE THE THE TEXAS SET, UM, NEW NEW MODEL AND THEN GOAL 12, IMPROVE SETTLEMENT PROCESSES TO FACILITATE CHANGES IN THE ERCOT MARKET DESIGN.

AND THEN THIS IS A LITTLE BIT OF A MOVING AWAY FROM THE TECH GOALS.

WE ALSO, UH, MAP REVISION REQUESTS TO, TO THE REASONS FOR REVISION, WHICH IS A, A NEW CHANGE THAT WE DO FOR, FOR THIS BOARD.

UM, WHAT'S NOTABLE, I THINK TO ME IS THE LARGE PERCENTAGE THAT ARE MAPPED TO THE STRATEGIC OBJECTIVES ONE AND TWO.

AND THOSE ARE BE AN INDUSTRY LEADER FOR GRID RELIABILITY AND RESILIENCE AND ENHANCE THE ERCOT REGION'S ECONOMIC COMPETITIVENESS WITH, WITH RESPECT TO TRENDS AND WHOLESALE POWER RATES AND, AND RETAIL ELECTRICITY PRICES.

SO THAT CONCLUDES MY PRESENTATION, UH, IF THERE ARE NO QUESTIONS, THANK YOU KAILYN, ANY QUESTIONS FOR KAILYN? I JUST WANNA SAY THANK YOU TO TAC FOR ALL THE WORK IN 2024 AND APPRECIATE THIS SUMMARY.

IT DOESN'T REFLECT THE HUNDREDS OF HOURS OF MANPOWER THAT WENT INTO IT.

THANK YOU AS WELL.

ALRIGHT, AGAIN, THANK YOU.

AND, UH, I'LL SAY AGAIN THAT, UH, ALL OF US LOOK FORWARD TO WORKING WITH YOU AND MARTHA AND ALL THE MEMBERS OF TAC AND WE, I'LL ECHO WHAT, UH, JULIE SAID.

WE APPRECIATE YOUR INVESTMENT OF TIME AND THE FUTURE OF TEXAS POWER.

WE, WE REALLY APPRECIATE THAT.

WE THINK THE ENGAGEMENT, UM, THAT, THAT WE'VE HAD WITH LEADERSHIP ON THE BOARD HAS BEEN REALLY GREAT.

GOOD DEAL.

UH, WE'LL NOW TAKE

[8. Update on CPS Energy Braunig Unit 3 RMR Agreement and Life Cycle Power Mobile Generation Solution as alternative to Braunig Units 1 and 2]

UP AGENDA ITEM EIGHT, UPDATE ON CPS ENERGY BROING UNIT THREE RMR AGREEMENT AND THE LIFECYCLE POWER MOBILE GENERATION SOLUTION AS AN ALTERNATIVE BROING UNIT ONE AND TWO, UH, WOODY RICKSON.

AND IF WOODY'S HERE AND CHAD SEALEY, I WILL PRESENT, UH, PROCEED WOODY, RIGHT? I THINK WOODY MAY BE DOWN AT THE CAPITOL.

YEAH, WOODY WAS DOWN AT THE CAPITOL FOR A HEARING, SO I WILL GIVE THE BOARD THE UPDATE ON OUR WORK WITH CPS ENERGY ON THE BRO RESOURCES AND THE ALTERNATIVE, WHICH IS THE RELOCATION OF THE MOBILE GENERATION UNITS FROM THE HOUSTON AREA TO THE SAN ANTONIO AREA.

AND WE ALSO HAVE REPRESENTATIVES FROM CPS ENERGY HERE TODAY AS THEY'VE BEEN WITH US FOR MULTIPLE BOARD MEETINGS IN CASE THE BOARD HAS ANY SPECIFIC QUESTIONS FOR CPS ENERGY.

SO AS PART OF THIS UPDATE, YOU KNOW, A COUPLE THINGS I WANNA HIGHLIGHT, WE'RE GONNA TALK ABOUT THAT THE BUDGET HAS INCREASED FOR THE VERONICA RESOURCES UNITS ONE AND THROUGH

[00:50:01]

THREE, UH, INCLUDING THE RMR UNIT THAT THE BOARD SELECTED IN DECEMBER.

THAT COST HAS GONE UP AS WE CONTINUED TO WORK WITH CPS, UH, THE CURRENT STATUS OF THE VERONICA UNIT THREE RMR AGREEMENT.

AND THEN OBVIOUSLY FOCUS ON OUR CONTINUED EFFORTS TO RELOCATE THE MOBILE GENERATION.

SO JUST AS A REMINDER TO THE BOARD, WHEN CPS GAVE US THEIR NOTICE OF SUSPENSION OF OPERATIONS FOR ALL THREE UNITS, WE DO A RELIABILITY ANALYSIS, A TRANSMISSION RELIABILITY ANALYSIS THAT SHOWED OVERLOADS IN THE SAN ANTONIO AREA THAT WE NEED THAT CAPACITY IN THAT AREA FOR THE NEXT TWO YEARS UNTIL TRANSMISSION PROJECTS START TO COME ONLINE IN JUNE OF 2027 AND BEYOND.

WE CALL THOSE THE SOUTH TEXAS PROJECTS ONE AND TWO.

AND, UH, THE FIRST OF THOSE PROJECTS WOULD COME IN IN THE SUMMER OF 2027.

OF COURSE, BASED UPON OUR ANALYSIS, WE NEEDED THE CAPACITY.

WE WENT OUT FOR A COUPLE RFPS TO LOOK FOR ALTERNATIVES.

UH, WE DID NOT GET ANY MARKET RELATED SOLUTIONS THAT MET OUR CRITERIA TO COMPETE AGAINST THE THE BRO RESOURCES AND COURSE IN DECEMBER OF LAST YEAR, WE BROUGHT FORWARD STAFF'S RECOMMENDATION TO MOVE FORWARD WITH AN RMR AGREEMENT FOR UNIT THREE, WHICH IS THE LARGEST UNIT OF THE THREE BRO RESOURCES.

UH, OF COURSE THE BOARD ELECTED TO AUTHORIZE ERCOT STAFF TO ENTER INTO AN RMR AGREEMENT FOR BRO UNIT THREE.

AND AT THE SAME TIME, WE STARTED MORE SPECIFICALLY TALKING ABOUT AN ALTERNATIVE TO UNITS ONE AND TWO, WHICH WOULD BE THE RELOCATION OF THE MOBILE GENERATION ASSETS IN HOUSTON TO THE SAN ANTONIO AREA.

THAT'S 15 UNITS, A 32 MEGAWATT CAPACITY EACH THAT COULD BE RELOCATED INTO CERTAIN SUBSTATIONS IN THE SAN ANTONIO AREA.

SO IT WAS RECOMMENDED AT THAT TIME THAT THE BOARD DEFER THAT DECISION ON WHETHER UNITS ONE AND TWO WOULD BE NEEDED SO THAT WE CAN CONTINUE WORK ON IS THIS A MORE COST EFFECTIVE AND RELIABLE ALTERNATIVE TO THAN SELECTING UNITS ONE AND TWO AS AN RMR AGREEMENT.

SO WHAT'S HAPPENED SINCE DECEMBER, AS WE CONTINUE TO WORK WITH C-P-S-C-P-S HAS SUBMITTED, UH, UPDATED BUDGETS FOR ALL THREE UNITS ON THIS SLIDE.

YOU CAN SEE FOR DECEMBER 3RD, WHAT WAS PRESENTED TO THE BOARD AS FAR AS CPS BUDGET SUBMISSION, UH, FOR UNITS ONE, TWO, AND THREE A TOTAL OF $82 MILLION.

AND OF COURSE THE UPDATED NUMBERS THAT WERE RECENTLY SUBMITTED, UH, LATE LAST WEEK SHOWS AN INCREASE OF OVERALL OF $11 MILLION.

AND WHERE THOSE DIFFERENCES ARE SHOWN FOR EACH OF THE THREE UNITS, A BULK OF THAT HAS COME TO UNIT THREE 8 MILLION.

AND THAT REPRESENTS, FOR THE MOST PART INCREASED COST FOR THE OUTAGE INSPECTION EQUIPMENT, COST AND COMPLIANCE COSTS.

NOW, CPS HAS ALSO UPDATED THE BUDGET AGAIN FOR UNIT THREE AS OF YESTERDAY, AND THAT COST HAS GONE UP ANOTHER APPROXIMATE ONE AND A HALF MILLION DOLLARS AS THEY CONTINUE TO FINE FINETUNE THE OVERALL LABOR COST GOING INTO THE INSPECTION OUTAGE WITH UNIT THREE, THE INSPECTION WOULD BEGIN AT THE BEGINNING OF MARCH.

AND SO THAT'S WHAT WE'RE POSITIONING OURSELVES FOR.

THE SECOND CHART REPRESENTS THE OVERALL ALL IN COST, WHICH IS AN INCENTIVE FACTOR AND ESTIMATED FUEL COST THAT'S ADDED UNDER OUR PROTOCOLS FOR AN RMR AGREEMENT.

HOWEVER, DESPITE THE INCREASED COST FOR UNIT THREE, OUR ANALYSIS STILL SHOWS THAT IT IS COST EFFECTIVE TO MOVE FORWARD WITH UNIT THREE RELATIVE TO THE OVERALL VALUE OF LOSS LOAD FROM A SYSTEM WIDE PERSPECTIVE, IF WE HAD TO END UP IN A LOAD SET SITUATION BECAUSE OF THE OVERLOADS ON THE TRANSMISSION SYSTEM DOWN IN THE SAN ANTONIO AREA, THIS NEXT SLIDE KIND OF REPRESENTS THAT.

SO THIS IS THE UPDATED COST AS OF LAST WEEK.

IT DOESN'T REPRESENT THE ADDITIONAL COST THAT CAME IN FOR UNIT THREE, BUT EVEN IF YOU ADDED THE ADDITIONAL COST THAT CPS IS UPDATED FOR UNIT THREE, IT WOULD STILL SHOW THAT THE VALUE FOR UNIT THREE FAR SURPASSES THE OVERALL COST OF THE SYSTEM IF WE END UP IN THAT CONTINGENCY OVERLOAD SITUATION.

SO WHAT'S THE STATUS OF UNIT THREE? WE HAVE NOT EXECUTED THE AGREEMENT.

WE'RE STILL WORKING THROUGH A COUPLE OF ISSUES WITH CPS AND THOSE TWO ITEMS ARE NOTED HERE ON THE SLIDE.

THE FIRST IS A, AN ADDENDUM TO DEAL WITH THE ENVIRONMENTAL EMISSIONS EXCEEDANCES.

WE'VE BEEN WORKING WITH CPS AND THE TEXAS COMMISSION ON ENVIRONMENTAL QUALITY ON HOW THAT WOULD WORK FROM A FLEET-WIDE PERSPECTIVE.

I DO WANT TO SEE IF NATHAN WILL

[00:55:01]

JUST ADD A LITTLE BIT MORE PERSPECTIVE TO KIND OF WHAT WILL BE INCLUDED IN THIS ADDENDUM AS WE FINALIZE FROM THE EMISSION EXCEEDANCE PERSPECTIVE.

GOOD MORNING DIRECTORS, NATHAN BIGBY WITH ERCOT LEGAL.

UM, I THINK THE FOCAL POINT OF THE EMISSIONS ADDENDUM IS REALLY TO ADDRESS, UM, RISKS THAT CPS ENERGY HAS, UM, FOR UNDER A NEW 30, UH, 30 DAY ROLLING AVERAGE NOX EMISSIONS LIMIT THAT HAS, UH, COME INTO PLACE BASED ON CP S'S SAN ANTONIO AREA'S, NON-ATTAINMENT STATUS, UH, UNDER, UH, UNDER NOX RULES.

AND, UH, SO THAT'S A NEW STANDARD THAT IS APPLYING, UH, STARTING IN JANUARY OF THIS YEAR.

IT'S POSSIBLE THAT STANDARD COULD RATCHET DOWN IN THE FUTURE BASED ON OUR, OUR CONVERSATIONS WITH CPS.

AND SO THERE IS SOME RISK THERE, UM, THAT WE NEED TO ADDRESS WHAT HAPPENS OPERATIONALLY IF THERE ARE THOSE CONSTRAINTS.

UM, I SHOULD HIGHLIGHT THAT WE ARE IN CONVERSATIONS WITH TCQ ABOUT AN ENFORCEMENT DISCRETION POLICY THAT WOULD, UH, POTENTIALLY APPLY ACROSS THE BOARD FOR CPS IN ITS ENTIRE FLEET.

AND IF THAT, UH, GOES THROUGH, WE, UH, ARE OPTIMISTIC THAT THAT SHOULD, UM, ADDRESS THOSE CONCERNS.

UM, BUT THAT'S THE PRIMARY ISSUE THAT THE SECONDARY ISSUE IN THE ENFORCEMENT, UM, IN THE ADMISSIONS POLICY ADDENDUM THAT WE'RE NEGOTIATING RIGHT NOW HAS TO DO WITH THE COST OF ADMISSIONS ALLOWANCES.

SO DURING THE SUMMER SEASON FROM JUNE TO SEPTEMBER, UM, CPS IS SUBJECT TO A SEPARATE CONSTRAINT ON NOX EMISSIONS THAT APPLIES DURING THE SUMMER, AND, UH, THERE'S A COST ISSUE ASSOCIATED WITH THAT.

UM, OUR PROPOSAL IS THAT WE, UM, WOULD JUST ALLOW THEM TO BUY THE ALLOWANCES AFTER THE SUMMER, AND THEN WE WOULD CON COMPENSATE THEM FOR THE MARKET VALUE OF THOSE ALLOWANCES AT THE END.

WE THINK THAT'S A SOLUTION, UM, THAT, UH, UH, THAT PROVIDES CERTAINTY FOR EVERYBODY.

BUT THOSE ARE THE TWO MAIN ISSUES THAT THE ADDENDUM IS SEEKING TO ADDRESS.

THANKS, NATHAN.

ON THE SECOND ADDENDUM NOTED HERE, WE'RE MAKING SURE THAT WE HAVE A CLEAR PROCESS ON HOW CPS AND ERCOT COMMUNICATE WHEN WE GET INTO THE OUTAGE INSPECTION OR FUTURE MAINTENANCE OUTAGES ON WHAT THAT PROCESS WOULD LOOK LIKE.

OF COURSE, ONE OF THE THINGS THAT WE HIGHLIGHTED TO THE BOARD AS A RISK IS THAT THERE IS SOME UNCERTAINTY AS WE GO INTO THE 60 DAY OUTAGE INSPECTION, AND WE WANNA MAKE SURE THAT WE HAVE CLOSE COORDINATION WITH CPS AS THOSE INSPECTORS COME IN TO LOOK AT THE RESOURCE AND UNDERSTAND, YOU KNOW, THE VALUE PROPOSITION OF AN ADDITIONAL COST THAT MAY BE INCURRED THAT HAS NOT ALREADY BEEN REFLECTED IN THE UPDATED BUDGETS THAT CPS ENERGY HAS GIVEN US, BASED UPON THEIR BEST ESTIMATE OF WHAT IT WILL TAKE TO PUT THE UNIT IN A STATE OF OPERATIONAL MODE, UH, FOR THE SUMMER OF 2025.

AND THEN ONCE WE EXECUTE THIS AGREEMENT, WHICH WE ANTICIPATE DOING IN, IN THE NEXT WEEK OR TWO, THEN ERCOT IS OFFICIALLY ON THE CLOCK UNDER THE PROTOCOLS TO COME BACK WITH AN EXIT STRATEGY.

AND SO THAT'S 90 DAYS, OF COURSE, WE'LL BE TARGETING THE APRIL BOARD FOR THAT DISCUSSION AND THAT EXIT STRATEGY AS OF RIGHT NOW, OF COURSE, IS THOSE SOUTH TEXAS PROJECTS THAT WE'VE BEEN PREVIOUSLY TALKING TO THE BOARD.

WE HAVE BEEN ENGAGING CPS AND THE OTHER UTILITIES ABOUT ACCELERATING THOSE TRANSMISSION PROJECTS.

AND WE HAVE SOME PRELIMINARY INFORMATION ON THE TIMELINE AND COST TO DO THAT, AND THAT WILL ALL BE PART OF OUR OVERALL ANALYSIS THAT WE'LL PRESENT TO THE BOARD IN APRIL AS WE TALK ABOUT THE EXIT STRATEGY SOLUTION FOR UNIT THREE AND WHATEVER ALTERNATIVE WE SELECT, WHETHER THAT'S UNIT ONE AND TWO, OR THE MOBILE GENERATION SOLUTION.

ANY QUESTIONS ON UNIT THREE BEFORE I TRANSITION TO THE MOBILE GENERATION SOLUTION? IF, IF YOU DON'T MIND, CAN YOU REMIND THE BOARD OF THE CAPACITY OF EACH OF THE UNITS OF ONE, TWO, AND THREE, IF CORRECT? I, I BELIEVE IT.

UM, NATHAN, YOU'LL HAVE TO CORRECT ME, BUT I BELIEVE UNIT THREE IS A LITTLE OVER 400 MEGAWATTS IN CAPACITY, MAYBE FOUR 10 ISH, IS THAT RIGHT? I BELIEVE THAT'S CORRECT.

YEAH.

AND THEN UNITS ONE AND TWO ARE ABOUT 200 MEGAWATTS EACH.

AND CHAD, COULD YOU COMMENT ABOUT THE, UH, EARLIEST DATE THAT THE INSPECTION ON UNIT THREE COULD PROCEED? MY UNDERSTANDING, UM, AND CPS CAN LOOK OVER HERE IS, IS ESSENTIALLY WE'RE TARGETING AT THE BEGINNING OF MARCH.

I DON'T, I DON'T KNOW IF THAT'S MARCH 1ST, MARCH 2ND OR MARCH 1ST, BUT I WOULD SAY THEY'RE POSITIONING THEMSELVES FOR THAT FIRST WEEK OF MARCH FOR THE, FOR THE INSPECTIONS TO OCCUR FOR UNIT THREE.

PEGGY? YEAH.

AND CHAD, THIS IS PROBABLY FOR CPS, UH, WE HAVEN'T STARTED THE INSPECTIONS YET AND THE COSTS HAVE GONE UP SUBSTANTIALLY, AND I DIDN'T EVEN CATCH THE FIGURE.

YOU SAID THAT'S NOT REFLECTED IN THE MATERIALS, UH, CAN HAVE THEM ADDRESS WHAT, WHAT'S THE BASIS FOR THE COST INCREASE? I, I, YEAH, I EXPECTED THAT WHEN THE INSPECTION STARTED.

YOU,

[01:00:01]

YOU KNOW, YOU GUYS WARNED US QUITE A BIT THAT, YOU KNOW, YOU DON'T KNOW WHAT YOU'RE GOING TO FIND, BUT WE HAVEN'T EVEN STARTED THAT PROCESS YET.

GOOD MORNING.

UH, RICK TIA, VICE PRESIDENT GENERATION OPERATIONS FOR CPS ENERGY.

UH, SO THE, THE COST ESTIMATE INCREASES THAT WE HAVE SUBMITTED ARE A RESULT OF THE, THE DILIGENCE, THE, THE ACTIVITIES THAT WE'RE DOING, UH, THAT ARE, THAT ARE NORMAL IN PLANNING AND OUTAGE OF THIS MAGNITUDE.

SO, UH, BECAUSE WE STARTED THE PLANNING PROCESS LATER, UM, THEN WHAT IS OUR NORMAL PROCESS? YOU KNOW, SOME OF THESE ESTIMATES THAT, THAT INCREASES THAT WE HAVE, YOU KNOW, REALIZED ARE BECAUSE WE JUST, YOU KNOW, WE'RE, WE'RE GOING THROUGH THOSE NORMAL PROCESSES LATER, YOU KNOW, IN, IN THE GAME OF PLANNING AN OUTAGE.

UM, SO, UH, WE RIGHT NOW WE, WE'VE BEEN ASKED, WE HAD DISCUSSION WITH ERCOT, WE'VE BEEN ASKED TO LOOK AT THE REMAINING ACTIV PLANNING ACTIVITIES FOR THE OUTAGE TO TRY TO IDENTIFY ANY OTHER POTENTIAL INCREASES.

WE'RE WORKING THROUGH AN ACTIVITY THIS WEEK TO GET THAT DONE AND BE ABLE TO SUBMIT THAT TO, TO ERCOT SO THEY CAN BE INFORMED.

UM, AND AS FAR AS, UH, THE, THE OUTAGE WHEN OUTAGE EX EXECUTION STARTS, UH, YOU KNOW, AS WE GO THROUGH THE INSPECTION PROCESSES, UH, IF WE DO FIND SOMETHING THAT WILL, UH, BRING EXTRA COST TO, UH, THE OUTAGE, UH, THERE'S PROVISIONS IN THAT COMMUNICATION, UM, ADDENDUM THAT WE WILL, YOU KNOW, COMMUNICATE THOSE VERY QUICKLY TO ERCOT SO WE CAN MAKE A DECISION TO PERFORM THE WORK OR NOT.

ANY OTHER QUESTIONS? OKAY.

FOR THOSE ASSETS IN THE CENTER POINT REGION.

SO TRANSITION TO THE MOBILE GENERATION SOLUTION.

SO WHEN WE TALK ABOUT THIS IN, IN DECEMBER, WE HAD INDICATED THAT WE WOULD GO OUT FOR ANOTHER RFP TO LOOK FOR ALTERNATIVES TO THE MOBILE GENERATION SOLUTION, BUT ALSO AGAINST UNITS ONE AND TWO AGAIN.

UM, SO WE, WE DID ISSUE A RFP IN LATE DECEMBER.

IT WAS ON AN ACCELERATED TIME-FRAME, AND THE RESPONSE DEADLINE WAS JANUARY 15TH, 2025.

WE DID RECEIVE THREE OFFERS.

TWO OF 'EM WERE OTHER MOBILE GENERATION SOLUTIONS AND ONE WAS ANOTHER BATTERY SOLUTION.

WE EVALUATED THOSE OFFERS AND TWO OF THEM DID NOT MEET THE ELIGIBILITY REQUIREMENTS IN, IN TERMS OF THE RFP FOR EXAMPLE.

WE NEEDED TO HAVE A QUALIFIED SCHEDULING ENTITY ASSOCIATED WITH WHOEVER SUBMITTED THE OFFER.

AND, UH, ONE OF THE ENTITIES THAT SUBMITTED THE OFFER DID NOT HAVE AN ASSOCIATED QUALIFIED SCHEDULING ENTITY.

OF COURSE, THAT'S OUR MAIN INTERMEDIARY AS FAR AS COMMUNICATION PROTOCOLS UNDER OUR RULES.

AND SO THEY WERE NOT ABLE, ELIGIBLE TO MOVE FORWARD.

THERE WAS ONE OFFER THAT DID MEET THE ELIGIBILITY REQUIREMENTS, BUT IT WAS FAR MORE COSTLY THAN CONSIDERING UNITS ONE AND TWO, OR THE CURRENT INITIATIVE WITH LIFECYCLE POWER ON RELOCATING THE MOBILE GENERATION ASSETS FROM HOUSTON TO SAN ANTONIO.

SO LAST WEEK WE DID ISSUE A NOTICE ENDING THAT RFP THAT WE HAD INITIALLY STARTED IN, IN LATE DECEMBER.

SO WE CONTINUE TO BELIEVE THAT THE LIFECYCLE MOBILE GEN SOLUTION WILL ULTIMATELY BE THE MOST COST EFFECTIVE, RELIABLE SOLUTION FOR THE SAN ANTONIO AREA IN COMPARISON TO UNITS ONE AND TWO.

AND WE'VE BEEN SPENDING A TREMENDOUS AMOUNT OF TIME WITH CPS ENERGY AND WITH LIFECYCLE UNDERSTANDING THE TOTAL COST OF SERVICE TO HAVE THAT SOLUTION, UH, FOR TEXAS CITIZENS DURING THIS TWO YEAR KIND OF TIME PERIOD.

THE ONE THING I WOULD NOTE IS THAT IT, IT'S IMPORTANT TO NOTE THAT ANY OF THE COSTS THAT HAVE BEEN INCURRED BY CENTERPOINT ENERGY FOR HAVING THIS EIGHT YEAR LEASE ASSOCIATED WITH THE MOBILE GENERATION IS NOT BEING TRANSITIONED OVER INTO THE SOLUTION.

THAT IS A SEPARATE ISSUE BETWEEN CENTER POINT AND LIFECYCLE POWER.

AND THERE'S A LOT OF NARRATIVE OUT THERE, AND I WANTED TO MAKE THAT VERY CLEAR.

THE COST THAT ERCOT IS FOCUSED ON IS INCREMENTAL COST.

CENTER POINT HAS INDICATED A WILLINGNESS TO RELEASE THESE UNITS FOR APPROXIMATELY TWO YEARS TO ALLOW US TO ADDRESS THIS RELIABILITY CONCERN THAT WE HAVE IN THE SAN ANTONIO AREA.

BUT THE LEVEL OF SERVICE THAT ERCOT NEEDS IS A HIGHER LEVEL OF SERVICE THAN WHAT CENTER POINT HAS WITH LIFECYCLE

[01:05:01]

FOR EXAMPLE, THE SERVICE LEVEL THAT CENTERPOINT HAS IS MORE ABOUT CALLING UP ON A NOTICE PROVISION IN ANTICIPATION OF AN EVENT, AND THEN LIFECYCLE RAMPING UP ITS MANPOWER TO MEET THAT NOTICE OBLIGATION, WHETHER THAT'S FOUR HOURS, EIGHT HOURS, 24 HOURS, OUR SERVICE LEVEL IS 24 7 AVAILABILITY ALL THE TIME, PUSH THE BUTTON AND THE ENERGY STARTS TO RAMP UP.

AND THAT IS A TREMENDOUS BENEFIT WITH THE MOBILE GENERATION SOLUTION THAT CAN RAMP UP WITHIN 15 MINUTES.

WITH THE CPS ASSETS, IT TAKES A LOT LONGER FOR THOSE UNITS ONE AND TWO TO RAMP UP TO THEIR CAPABILITY.

SO THERE'S TREMENDOUS QUALITATIVE RELIABILITY BENEFITS IN THE MOBILE GENERATION SOLUTION VERSUS CONTINUING TO MOVE FORWARD WITH UNITS ONE AND TWO AS AN RMR SOLUTION.

BUT AGAIN, TO BE CLEAR, THIS WILL BE THE INCREMENTAL COST TO PROVIDE THAT HIGHER LEVEL OF SERVICE IN THE SAN ANTONIO AREA.

SO LET'S TALK ABOUT THE COST.

THERE'S KIND OF TWO BUCKETS OF COSTS.

WHAT IS THE COST FOR LIFECYCLE TO RELOCATE THE MOBILE GENERATION ASSETS INTO THE SAN ANTONIO AREA, THE ALL IN COST FOR THAT, AND THEN WHAT IS THE COST FOR CPS TO HOOK 'EM UP TO SUBSTATIONS IN THEIR AREA, PROVIDE THAT INTERCONNECTION SERVICE AND TO PROVIDE QUALIFIED SCHEDULING ENTITY SERVICES? AND WHAT'S REFLECTED ON THIS SLIDE IS THOSE TWO BUCKETS BROKEN DOWN AND IN THE KEY TAKEAWAY, THE ALL IN COSTS, AS OF WHAT WE KNOW RIGHT NOW, WE'RE CONTINUING TO DRILL DOWN FROM A DUE DILIGENCE PERSPECTIVE TO UNDERSTAND EACH OF THOSE COST CATEGORIES.

AND WHEN WE COME BACK TO THE BOARD LATER IN THE NEXT COUPLE WEEKS, WE'LL HAVE A BETTER REFLECTION OF THOSE ALL IN COSTS AND BE ABLE TO BREAK THOSE DOWN INTO THE APPROPRIATE BUCKETS TO GIVE YOU ALL THAT PERSPECTIVE.

SO FOR LIFECYCLE, THE ESTIMATED COST FOR SERVICE ACROSS A TWO YEAR HORIZON IS 26 MILLION AS OF RIGHT NOW.

AND FOR CPS ENERGY TO PROVIDE THIS LEVEL OF INTERCONNECTION AND SCHEDULING SERVICES IS ESTIMATED 27 MILLION.

AND AGAIN, WE'RE HAVING ALMOST DAILY CALLS WITH THESE PARTIES TO UNDERSTAND THOSE COST ISSUES, MAKE SURE THAT THEY'RE ALIGNING AS CLOSELY AS POSSIBLE UNDER OUR PROTOCOLS TO THE ELIGIBLE COST CATEGORIES AS WE START TO SET THIS UP AS AN OVERALL CONTRACTUAL FRAMEWORK.

JUST, JUST TO BE CLEAR ON, ON THAT POINT.

UM, SO CENTER POINT IS STILL ON THE NOT FOR WHATEVER THE LEASE PAYMENT WOULD BE UNDER THEIR ORIGINAL AGREEMENT, BUT WE'RE, OR THE SYSTEM IS AGREEING TO PAY THE INCREMENTAL COST, THE 27 MILLION INCREMENTAL COST ABOVE AND BEYOND THAT, CORRECT? THAT'S EXACTLY RIGHT.

THAT IS A SEPARATE BILATERAL ARRANGEMENT OUTSIDE OF ERCOT WORK BETWEEN CENTER POINT AND LIFECYCLE.

GOT IT.

ENERGY AND ERCOT AS FAR AS EVALUATING STABILITY AND RELIABILITY RISK TO CONNECTING THESE ASSETS TO THE SUBSTATIONS IN SAN ANTONIO.

SO AS WE CONTINUE TO MOVE FORWARD OVER THE NEXT COUPLE WEEKS, WE WILL BE COMING BACK AT A SPECIAL BOARD MEETING.

AND I KNOW WE'VE BEEN POLLING DIRECTORS ABOUT THEIR AVAILABILITY.

WE ANTICIPATE THAT TO LIKELY BE THE, THE LAST WEEK OF FEBRUARY.

WE'LL FINE TUNE THAT, UH, PROBABLY LATER TODAY AND, AND GET OUT NOTICES AS SOON AS WE CAN ON THAT SPECIAL MEETING.

THE SPECIAL MEETING WILL BE SIMILAR TO WHAT PLAYED OUT IN DECEMBER AS FAR AS A FULL OVERALL RELIABILITY ASSESSMENT EVALUATION, STILL LEVERAGING UNITS ONE AND TWO AS FAR AS ITS OPTIMUM EVALUATION RELATIVE TO SYSTEM-WIDE LOAD SHED, BUT ALSO HAVING THE LIFECYCLE AS A COMPARISON.

AND THEN THERE WILL BE A RECOMMENDATION FROM ERCOT STAFF FOR THE BOARD TO CONSIDER AT THAT TIME.

SO ONE THING IN ORDER TO MAKE THIS HAPPEN AS QUICKLY AS POSSIBLE IF WE END UP WITH THE LIFECYCLE SOLUTION, IS THAT ERCOT WOULD BE GOING TO THE COMMISSION TO SEEK CERTAIN GOOD CAUSE EXCEPTIONS UNDER ITS RULES IN ORDER TO ACCELERATE THE INTERCONNECTION PROCESS AND GET THE LIFECYCLE MOBILE GENERATION ASSETS ONLINE AS QUICKLY AS POSSIBLE.

AND WHAT WE'VE HIGHLIGHTED HERE IS JUST A COUPLE EXAMPLES THAT WE WOULD BE SEEKING GOOD CAUSE EXCEPTIONS FROM THE COMMISSION.

THESE FOCUS MAINLY ON OUR MODELING TIMELINES AND OUR INTERCONNECTION STUDY REQUIREMENTS.

IT DOES NOT MEAN THAT THERE WON'T BE THE COMPLETE DUE DILIGENCE THAT'S DONE BOTH BY CPS

[01:10:01]

BUT THERE ARE CERTAIN TIMELINES ASSOCIATED IN THE PROTOCOLS FOR THE GENERATION INTERCONNECTION PROCESS.

AND BECAUSE WE'RE DEALING WITH A CRITICAL RELIABILITY ISSUE THAT CAN START TO PLAY OUT IN THE SUMMER OF 2025, WE WANT TO DO EVERYTHING POSSIBLE TO ACCELERATE THE TIMELINE TO MOVE THOSE ASSETS INTO THE SAN ANTONIO AREA.

SO WHAT DOES THAT TIMING LOOK LIKE IF WE'RE ABLE TO COME BACK IN LATE FEBRUARY? AND LET'S ASSUME THE RECOMMENDATION IS THE LIFECYCLE ASSETS.

WE WILL DILIGENTLY MOVE FORWARD WITH LIFECYCLE AND CPS TO KICK OFF THE INTERCONNECTION STUDIES AND, AND PROCESSES THAT NEED TO HAPPEN IN THE SAN ANTONIO AREA TO RELOCATE THOSE.

AND THESE ASSETS WOULD BE STAGED IN OVER A PERIOD OF TIME.

IT IS NOT THAT ALL 15 ASSETS WILL COME ONLINE AT THE SAME TIME.

THEY'LL BE STAGED IN OVER THE SUMMER BECAUSE OF THE DILIGENCE THAT'S REQUIRED TO DO THE INTERCONNECTION STUDIES, THE PHYSICAL WORK AT THE SUBSTATION.

YOU CANNOT DO 'EM ALL AT THE SAME TIME.

SO THE EXPECTATION IS IF THAT IS THE RECOMMENDED SOLUTION THAT THESE ASSETS WOULD COME ONLINE OVER A PERIOD OF TIME THROUGHOUT THE SUMMER OF 2025.

NOW, WHAT I WOULD HIGHLIGHT FROM THE DECEMBER BOARD WITH UNITS ONE AND TWO, IF YOU RECALL, THEY HAVE TO GO INTO INSPECTION OUTAGES AS WELL, JUST LIKE UNIT THREE.

AND THEY CANNOT BE DONE, UH, IN TANDEM.

THEY HAVE TO BE DONE, UH, SEQUENTIALLY.

SO THAT WOULD ULTIMATELY DELAY THAT KIND OF CAPACITY BEING AVAILABLE IN THE SUMMER AS WE MOVE FORWARD WITH ANY RECOMMENDATION FOR UNITS ONE AND TWO.

AGAIN, THAT'S WHY WE'RE LEAN TOWARD THE MOBILE GENERATION SOLUTION BEING THE BETTER, RELIABLE SOLUTION.

THE FAR OFS, ITS FLEXIBILITY AND TIMELINE TO DELIVER THE ENERGY THAT WE MAY NEED IF WE GET INTO THE TRANSMISSION OVERLOAD TYPE SITUATION THAT WE'VE HIGHLIGHTED AS A RELIABILITY RISK.

AND THAT IS MY UPDATE AND HAPPY TO ANSWER ANY ADDITIONAL QUESTIONS FROM THE BOARD.

CHAD, UH, JUST TO REITERATE, UH, THIS IS A SOLUTION NEEDS TO BE IN PLACE BY THIS SUMMER, THE SUMMER OF 2025.

AND YOU KNOW, ONE OF THE THINGS THAT PEOPLE MAY BE ASKING IS WHAT ABOUT THE RESOURCES THAT ARE, THAT MIGHT BE AVAILABLE IN TEXAS ENERGY FUND? THEY'RE NOT GONNA BE HERE IN TIME FOR 2025 OR 2026.

SO THIS IS SOMETHING THAT NEEDS TO BE ADDRESSED TODAY, AND I THINK IT'S IMPORTANT FOR EVERYBODY THAT'S PARTICIPATING IN THIS MEETING TO, TO RECOGNIZE THAT.

UH, I DO HAVE A QUESTION.

YOU KNOW, UH, UNITS ONE AND TWO HAVE EMISSIONS, UH, CHARACTERISTICS THAT NEED TO BE DEALT WITH.

DO THE LCP UNITS HAVE EMISSIONS CHARACTERISTICS THAT NEED TO BE, UM, SOLVED AS WELL? YES, THEY DO.

AND IT'S, IT'S ADDITIONAL DISCUSSIONS THAT WE'RE HAVING WITH TCEQ ON THE PERMITTING PROCESS AND WHAT THOSE ENVIRONMENTAL ISSUES THAT WE NEED TO BE DEALT WITH AS WELL.

AND SO THAT WOULD BE PART OF THE DISCUSSION AT THE SPECIAL BOARD MEETING, MAKING SURE THAT THE BOARD MEMBERS UNDERSTAND THE PERMITTING AND ADMISSION QUALITY ISSUES AS WELL WITH THOSE MOBILE GENERATION ASSETS.

OKAY, THANK YOU.

ANY OTHER QUESTIONS? COMMENTS? OKAY.

UH, AGAIN, BE, LOOK, I THINK EVERYBODY'S RESPONDED TO THE POLLING, UH, FOR THE, UH, SPECIAL MEETING DATE.

AND JUST BE PREPARED TO, UH, TO GET THAT LOCKED INTO YOUR CALENDAR AS WE MOVE FORWARD IF WE DON'T HAVE ANY OTHER QUESTIONS.

UH, CHAD, WE'RE GONNA MOVE ON

[9. Committee Reports]

TO, UH, COMMITTEE REPORTS.

UH, WE HAVE THE, UH, COMMITTEE REPORTS AND AGENDA ITEM NINE, BEGINNING WITH THE F AND A COMMITTEE REPORT, WHICH IS 9.1.

IT HAS TWO ASSOCIATED VOTING ITEMS. I, UH, SERVE AS CHAIR OF THE FINANCE AND AUDIT COMMITTEE, UH, AT LEAST FOR THE TIME BEING.

UH, AND I CAN UPDATE THE BOARD ON WHAT THE COMMITTEE DISCUSSED YESTERDAY.

UH, THE COMMITTEE MEMBERS VOTED TO RECOMMEND THE, THE BOARD APPROVAL OF TWO ITEMS FOUND IN YOUR BOARD MATERIALS.

THE FIRST IS FINANCIAL CORPORATE STANDARD, WHICH IS BOARD ITEM 9.11 AND THE INVESTMENT CORPORATE STANDARD, UH, WHICH IS 9.1 0.2.

UH, EACH OF THESE HAD MINOR REVISIONS TO, UH, UPDATE OFFICER TITLES AND OR TO MAKE, UH, MINOR, UH, CORRECTIONS ON BEHALF OF THE FINANCE AUDIT COMMITTEE.

I MOVE APPROVAL OF THE TWO DOCUMENTS AS AMENDED AND APPROVED DURING THE F AND A COMMITTEE MEETING.

SECOND.

OKAY, THANK YOU PEGGY.

UH, ALL IN FAVOR? AYE.

UH, WE APPROVED THE INTERNAL AUDIT COMMITTEE CHARTER.

THOSE, UH, CORPORATE STANDARDS ARE APPROVED.

UH, COMMITTEE, UH, COMMITTEE VOTES FOR BOARD AWARENESS.

UH, THE COMMITTEE MEMBERS TOOK ONE VOTE THAT DOES NOT REQUIRE BOARD ACTION, BUT WHICH THE BOARD SHOULD BE AWARE.

[01:15:01]

UH, THIS IS A REQUIRED PERIODIC REVIEW OF THE CHARTER AND IT WAS, UH, UPDATED.

IT HAD SUBSTANTIAL UPDATES, UH, TO INCORPORATE NEW LANGUAGE FROM GLOBAL INTERNAL AUDIT STANDARDS THAT WERE PROMULGATED IN 2024.

UH, OTHER COMMITTEE DISCUSSIONS FOR BOARD AWARENESS.

UH, THE BOARD RECEIVED A REGULAR REPORTS.

UH, THE PRELIMINARY AUDITED FINANCIAL RESULTS SHOW THAT THE ERCOT 2024 REVENUES NET OF EXPENDITURES WERE $97 MILLION FAVORABLE TO BUDGET.

UH, AS WE'RE ALL AWARE, THE PRIMARY DRIVER OF THAT IS A HIGHER THAN BUDGETED INTEREST RATES ON, UH, CR ON, UH, CONGESTION AUCTION RECEIPTS.

AND THEN SECONDARY DRIVERS INCLUDED, UH, VACANCY RATE SAVINGS, UH, IN TERMS OF, UH, UH, SLOWER, UH, THAN ANTICIPATED, UH, FILLING OF OPEN POSITIONS, UH, LOWER THAN EXPECTED INSURANCE COSTS, LEGAL DEFENSE AND PROPERTY TAXES.

UH, THE NEXT REPORT WAS THE INVESTMENT COMPLIANCE REPORT.

ERCOT IS IN COMPLIANCE WITH ALL INVESTMENT REQUIREMENTS, UM, UNDER OUR INVESTMENT POLICIES.

AND THEN ERCOT IS ALSO IN COMPLIANCE WITH ALL DEBT REQUIREMENTS, UH, UNDER ITS SE SECURITIZATION ARRANGEMENTS.

UH, IN TERMS OF FUTURE MEETING DATES AND A AGENDA ITEMS, UH, THERE'S ONE THAT I'D HIGHLIGHT, UH, FOR APRIL'S MEETING.

THE COMMITTEE WILL MEET WITH EXTERNAL AUDITORS AND VOTE TO ACCEPT THE 2024 AUDIT OF FINANCIAL STATEMENTS.

AND THAT CONCLUDES MY REPORT.

UH, WITH THAT WE'LL MOVE, UH, TO PEGGY TO GO THROUGH THE HRG REPORT.

THANK YOU CHAIRMAN.

UH, THE HUMAN RESOURCES AND GOVERNANCE COMMITTEE VOTED ON FOUR ITEMS DURING GENERAL SESSION OF THE COMMITTEE AND TYPICAL BEGINNING OF THE YEAR ITEMS. FIRST, THE COMMITTEE VOTED TO RECOMMEND THAT THE BOARD APPROVE THE ELECTION OF ERCOT, CEO, PABLO VEGAS AND RATIFY ERCOT OFFICERS, EXCEPT FOR IN THE BOARD MATERIALS, UH, FOR ITEM 9.21 SECOND THROUGH TWO MOTIONS.

THE COMMITTEE VOTED TO RECOMMEND THAT THE BOARD RATIFY THE OFFICERS OF ERCOT TWO SECURITIZATION RELATED MATTERS.

UH, STABILIZATION FUNDING M AND N SET FORTH IN, UH, ITEMS 9.2 0.2 AND 9.2 0.3 IN THE BOARD MATERIALS.

AND THEN FINALLY, THE COMMITTEE VOTED TO RECOMMEND THAT THE BOARD APPROVE THE DATES FOR THE 2026 ERCOT BOARD MEETINGS AND, AND, AND ANNUAL MEETINGS EXCEPT FORTH IN THE MATERIALS IN THE BOARD, UH, MATERIALS ITEM 9.24.

UH, AND SO IF THERE'S ANY DISCUSSION WITHOUT ANY DISCUSSION, I'LL MOVE THAT THE BOARD APPROVE ITEMS 9.2 0.1 9 2 9 2 3 AND 9.24 IS RECOMMENDED BY THE HUMAN RESOURCES AND GOVERNANCE COMMITTEE.

DO WE HAVE A SECOND? OKAY, JOHN IS SECOND.

ANY DISCUSSION? ALL IN FAVOR? A.

KILOVOLT SWITCH REBUILD PROJECT TO ADDRESS A THERMAL OVERLOAD IN THE KAUFMAN COUNTY AREA IN THE NORTH CENTRAL WEATHER ZONE.

THOSE FOUR ITEMS ARE APPROVED AS PRESENTED BY THE OR AS RECOMMENDED BY THE COMMITTEE.

UH, WELL NOW YOU MENTIONED, UH, ALSO, OH, I'M SORRY.

ALSO, THAT'S ONE OTHER THING TOO.

ALSO THE AWARENESS FOR BOARD AWARENESS.

THE COMMITTEE DID DISCUSS BRIEFLY, UH, WE, WE DO AN ANNUAL REVIEW OF THE CHARTERS AND COMMITTEE MEMBERSHIP IS REQUIRED BY THE CHARTER.

UH, IN LIGHT OF NOW WE HAVE THREE NEW BOARD MEMBERS TO, UH, HELP FILL OUT THE COMMITTEES TO WHERE THERE'S AN EFFORT UNDERWAY TO UH, LOOK AT THE COMMITTEE MEMBERSHIP AND UH, HOPEFULLY THERE'LL BE SOME DISCUSSION AT THAT NEXT BOARD MEETING.

AND THAT CONCLUDES MY REPORT.

UH, THANK YOU PEGGY.

ANY QUESTIONS FOR CHAIRMAN? HEAT? OKAY, THANK YOU VERY MUCH.

NEXT IS R AND M COMMITTEE CHAIR JULIE ENGLAND WILL PRESENT ITEM AGENDA ITEM 9.3, THE R AND M UH, COMMITTEE REPORT, WHICH HAS FIVE ASSOCIATED VOTING ITEMS AND AGENDA ITEMS 9.3 0.1 THROUGH 9.3 0.5.

JULIE, THANK YOU.

THIS IS JULIE ENGLAND, CHAIR OF THE RELIABILITY AND MARKETS COMMITTEE.

THE FIRST VOTING ITEM ON THE MARKET CREDIT RISK CORPORATE STANDARD HAS A GOOD CHANGE ADDING THE CHIEF OPERATING OFFICER TO THE LIST OF OVERSIGHT STAFF.

IS THERE A SECOND? OKAY, LINDA.

SECONDS.

ALL IN FAVOR? AYE.

ANY OPPOSED? ANY ABSTENTIONS? OKAY, THAT'S APPROVED.

THE R AND M COMMITTEE ALSO CONSIDERED THREE VOTING ITEMS THAT ARE TIER ONE REGIONAL PLANNING GROUP PROJECTS.

THESE THREE PROJECTS PRIMARILY REGARD ONE REGION OF THE STATE.

SO I WOULD LIKE TO LAY OUT THE THREE PROJECTS PRIOR TO MAKING THE RECOMMENDATIONS.

YOU HEARD A LITTLE BIT ABOUT THIS FROM UH, KAITLYN SMITH EARLIER.

THE FIRST PROJECT IS THE ENCORE FORNEY 3 4538

[01:20:01]

NEXT IS THE ENCORE VENUS SWITCH TO SAM SWITCH 3 45 KILOVOLT LINE PROJECT TO ADDRESS THERMAL OVERLOAD IN THE ELLIS AND HILL COUNTIES IN THE NORTH CENTRAL WEATHER ZONE.

THE THIRD PROJECT PRESENTED TO THE R AND M COMMITTEE WAS THE ENCORE WILMER 3 45 1 38 KILOVOLT SWITCH PROJECT TO ADDRESS THERMAL AND VOLTAGE VIOLATIONS IN THE DALLAS KAUFMAN AND ELLIS COUNTIES.

ALSO IN THE NORTH CENTRAL WEATHER ZONE, AS RECOMMENDED BY THE R AND M COMMITTEE, I'LL MAKE THE FOLLOWING THREE MOTIONS.

I MOVE THE BOARD TO ENDORSE THE NEED FOR THE TIER ONE ENCORE B 3 48, 1 38 KILOVOLT SWITCH REGIONAL PLANNING GROUP PROJECT OPTION ONE A, WHICH ERCOT STAFF HAS INDEPENDENTLY REVIEWED AND WHICH TAC HAS VOTED TO ENDORSE BASED ON THE NERC AND ERCOT RELIABILITY PLANNING CRITERIA.

NEXT, I MOVE THAT THE BOARD ENDORSED THE NEED FOR THE TIER ONE ENCORE VENUS SWITCH TO SAM SWITCH THREE 40 5K VOLT LINE REGIONAL PLANNING GROUP PROJECT OPTION ONE, WHICH ERCOT STAFF HAS INDEPENDENTLY REVIEWED AND WHICH TECH HAS VOTED TO ENDORSE BASED ON NERC AND ERCOT RELIABILITY PLANNING CRITERIA.

AND THIRD, I MOVE THAT THE BOARD ENDORSED 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 TECH HAS VOTED TO ENDORSE BASED ON NERC AND ERCOT RELIABILITY PLANNING CRITERIA.

IF IT'S OKAY WITH YOU, JULIE, WE'LL WRAP THOSE INTO ONE MOTION AND IF I CAN GET A SECOND ON THOSE, LINDA, I'LL SECOND.

OKAY, SICK.

WE'VE GOT TWO SECONDS.

UH, ALL IN FAVOR? AYE.

THOSE THREE PROJECTS ARE, UM, RATIFIED AND YOU'VE GOT ONE MORE.

WE HAVE ONE MORE VOTING ITEM AND THEN SOME BOARD AWARENESS ITEMS. THE VOTING ITEM NEXT IS THE, IS THE FIFTH BOARD VOTING ITEM THAT WAS RECOMMENDED THAT THE PUC APPROVE AND UPDATE TO THE 2025 ERCOT METHODOLOGIES FOR DETERMINING MINIMUM ANCILLARY SERVICE REQUIREMENTS LIMITING TO THE 1 57 MEGAWATTS, THE AMOUNT OF RESPONSIVE RESERVE SERVICE A RESOURCE CAN PROVIDE USING PRIMARY FREQUENCY RESPONSE.

THE TECHNICAL ADVISORY COMMITTEE UNANIMOUSLY ENDORSED THE UPDATE ALONG WITH THE CORRESPONDING NPRR 1257, WHICH WAS ON TODAY'S CONSENT AGENDA AS RECOMMENDED BY THE R AND M COMMITTEE.

I MOVE THAT THE BOARD TO RECOMMEND THE PUBLIC UTILITY COMMISSION OF TEXAS TO AUTHORIZE AND APPROVE ERCOT TO IMPLEMENT THIS UPDATED 2025 ANCILLARY SERVICE METHODOLOGY AS ENDORSED BY TECH TO BE EFFECTIVE UPON IMPLEMENTATION OF NPRR 1257.

OKAY, UH, THANK YOU JULIE.

DO WE HAVE A SECOND? SECOND.

ALL IN FAVOR? AYE.

RTC GIVEN THE IMPORTANCE OF THAT IMPLEMENTATION PROJECT.

THE NEW ANCILLARY SERVICES, THREE SHORT THINGS FOR BOARD AWARENESS.

THE STAFF REVIEWED THE FOUR TRANSMISSION PLANNING STUDIES THAT YOU'VE HEARD PABLO HIGHLIGHT IN THE CEO UPDATE, UH, INCLUDING THE COMPARISON OF COST AND BENEFITS, MORE IN DEPTH ON THE 3 45 KILOVOLT REGIONAL TRANSMISSION PLAN AND THE TEXAS 7 65 KILOVOLT STRATEGIC TRANSMISSION EXPANSION PLAN.

SECOND, IN ADDITION TO THE JANUARY, 2025 WINTER STORM REVIEW AND REVIEW OF NOTABLE MARKET OUTCOMES FOR 2024, THE R AND M COMMITTEE ALSO RECEIVED AN UPDATE ABOUT THE REAL-TIME CO OPTIMIZATION PLUS BATTERIES PROGRAM, WHICH IS PROGRESSING FORTUNATELY ON SCHEDULE AND ADDRESSING IMPORTANT POLICY ISSUES THAT WILL BECOME BEFORE THE BOARD AS REVISION REQUESTS IN 2025.

THIS IS THE TOP PROJECT FOR 2025.

STAFF ALSO DISCUSSED HIGH IMPACT POLICY ISSUES IN THE STAKEHOLDER PROCESS, INCLUDING DISPATCHABLE, RELIABILITY, RESERVE SERVICE, DRRS AND LARGE, LARGE, WHICH ARE THE SECOND AND THIRD MOST IMPORTANT AREAS OF FOCUS IN 2025.

THAT CONCLUDES MY REPORT.

UH, THANK YOU JULIE.

ANY QUESTIONS FOR CHAIR ENGLAND? OKAY, WITH THAT WE'LL MOVE ON TO AGENDA ITEM 9.4, THE TECHNOLOGY AND SECURITY, UH, COMMITTEE REPORT, UH, LED BY JOHN SWENSEN.

THANK YOU MR. CHAIRMAN.

UH, THERE WERE NO VOTING ITEMS AT THIS MEETING.

UH, SO NOTHING TO COVER THERE.

ON THE EMERGING TECHNOLOGY SIDE, WE HAD A VERY INTERESTING SPEAKER FROM GEORGIA TECH, UH, WHO GAVE US A REVIEW OF AI AS IT PERTAINS TO GRID NETWORKS.

I THINK MOST OF YOU WERE THERE, SO I WON'T GO INTO ANY DETAILS, UH, EXCEPT TO SAY THAT WE ARE LOOKING TO DEEPEN THAT RELATIONSHIP, UM, AND EXPLORE MORE POSSIBILITIES FOR COLLABORATION AROUND ERCOT USING, USING ARTIFICIAL INTELLIGENCE TECHNOLOGIES.

UH, WE HAD OUR NORMAL UPDATE ON PROJECTS AND I THINK EVERYTHING IS GOING FINE.

UM, WE DO A DEEP DIVE ON

[01:25:01]

UM, AND WE GOT INTO A DISCUSSION OF, UH, THE STATUS OF THE PROJECT, WHICH IS GREEN, UM, ON TRACK, UH, AND ALSO SOME POTENTIAL RISK ITEMS AND WHAT'S BEING DONE TO MITIGATE THOSE RISKS.

AND WE WILL CONTINUE TO FOCUS ON THAT AT UPCOMING MEETINGS.

AND THAT IS MY REPORT.

MOVE TO AGENDA ITEM, UH, 10, THE 2024 INTERNAL REVENUE SERVICE FORM NINE 90 QUESTIONNAIRE.

ANY QUESTIONS FOR JOHN? OKAY, THANK YOU CHAIR SWENSON.

UH, WITH THAT WE'LL

[10. 2024 Internal Revenue Service Form 990 Questionnaire]

RICHARD SHEEL IS GOING TO, UH, LEAD THAT DISCUSSION.

RICHARD, THANK YOU.

THIS IS JUST, UH, AN AWARENESS.

WE'LL BE CREATING THE QUESTIONNAIRE FOR THE BOARD TO FILL OUT.

THAT'S AN ANNUAL PROCESS, SO IF YOU DON'T HAVE ANY QUESTIONS, IT'S UH, RELATIVELY STRAIGHTFORWARD.

YOU'VE ALL SEEN IT BEFORE.

FOR THE NEW BOARD MEMBERS, IF YOU HAVEN'T SEEN THIS QUESTIONNAIRE BEFORE, I'D BE HAPPY TO MEET WITH YOU ON THIS.

I THINK THE KEY TAKEAWAY HERE IS THAT YOU'LL RECEIVE A QUESTIONNAIRE AND, UH, JUST GET THAT TURNED AROUND AND BACK TO ERCOT STAFF AS SOON AS POSSIBLE.

ANY QUESTIONS ABOUT THAT ITEM? ALRIGHT, THE NEXT IS AGENDA ITEM 11, OTHER BUSINESS.

IS THERE ANY OTHER BUSINESS THAT ANY BOARD MEMBER WISHES TO, UH, RAISE?

[Convene Executive Session]

I DON'T HEAR ANY.

SO AT THIS TIME THE BOARD WILL ADJOURN GENERAL SESSION AND WE'LL CONVENE AN EXECUTIVE SESSION, UH, FOLLOWING EXECUTIVE SESSION THAT WE'RE GONNA HAVE FIVE VOTING ITEMS WHEN WE COME BACK IN THE GENERAL SESSION.

UM, AND WE'LL, UH, SO THE GENERAL SESSION WILL RECONVENE AT THE END OF EXECUTIVE SESSION, THE GENERAL SESSION OF THE ERCOT, UH, BOARD OF DIRECTORS MEETINGS.

NOW RECESS.

BUT WE NEED TO TURN TO KATHLEEN AND ASK YOU TO RECESS THE PUC IF YOU DON'T MIND.

HEREBY RECESS.

THE PUC OPEN MEETING.

THANK YOU KATHLEEN.

AND WE'LL, UH, WE'LL TAKE A FIVE MINUTE BREAK TO RESET THE POPULATION OF THE ROOM AND THEN WE'LL GET RE ACTUALLY WE'LL RESTART AT 1140 AND IF YOU WANNA GRAB LUNCH, WE CAN DO THAT IF THE LUNCH IS HERE.

FIVE VOTING ITEMS FOR AGENDA ITEM 12, VOTE ON MATTERS FROM EXECUTIVE SESSION.

I'M BILL FLORES

[Reconvene General Session]

ERCOT, BOARD CHAIR.

I HEREBY RECONVENE THIS MEETING OF THE ERCOT BOARD OF DIRECTORS.

I HAVE CONFIRMED THAT A QUO QUORUM IS PRESENT IN PERSON AND MEMBER, UH, CARLOS AGUILAR IS PARTICIPATING VIA TELECONFERENCE IN TODAY'S MEETING.

UH, THIS IS BEING WEBCAST LIVE TO THE PUBLIC ON ERCOT WEBSITE.

UH, CHAIRMAN GLEASON, WOULD YOU LIKE TO, UH, RECONVENE THE UH, PUCT? THANK YOU MR. CHAIRMAN.

YES, THIS MEETING OF THE PUBLIC UTILITY COMMISSION OF TEXAS WILL RECONVENE FOR MATTERS THAT HAVE BEEN DULY POSTED WITH THE SECRETARY OF STATE FOR FEBRUARY 4TH, 2025.

UH, THANK YOU CHAIRMAN GLEASON.

WE HAVE

[12. Vote on Matters from Executive Session]

WE'RE GONNA DO THIS IN TWO VOTES.

UH, WE'LL HAVE, UH, THE FIRST ITEM WILL BE AGENDA ITEM 12.

EXCUSE ME.

I'LL ENTERTAIN A MOTION FROM THE FOR BOARD APPROVAL OF LITIGATION MATTER DISCUSSED DURING EXECUTIVE SESSION UNDER AGENDA ITEM ES 2.8 0.4.

ANY OPPOSED? ANY ABSTENTIONS? OKAY, THAT IS APPROVED.

I'LL NOW ENTERTAIN A MOTION THAT INCLUDES FOUR ITEMS, UH, MOTION FOR BOARD APPROVAL OF THE FORE PERSONNEL MATTERS DISCUSSED DURING EXECUTIVE SESSION.

UNDER AGENDA ITEMS, HE HAS 2.95 ES, 2.96 ES 2.97, AND E ES 2.98.

SO MOVED.

THANK YOU, PEGGY.

IS THERE A SECOND? SECOND.

THANK YOU JULIE.

UH, ALL IN FAVOR? AYE.

THOSE FOUR ITEMS ARE APPROVED.

UH, THIS MEETING OF THE ERCOT BOARD OF DIRECTORS IS NOW ADJOURNED AND THE WEBCAST WILL BE CONCLUDED AS SOON AS CHAIRMAN GLEASON FINISHES HIS WORK.

THIS MEETING OF THE PUBLIC UTILITY COMMISSION OF TEXAS IS HEREBY ADJOURNED.