[00:00:04]
OKAY, ARE WE GOOD TO GO? RIGHT.
[Antitrust Admonition]
WALKING UP AND WE WILL DO THE ANTITRUST.IT IS A MUCH MORE MELLOW AND NERDIER AND HAPPIER WORKSHOP THAN YESTERDAY.
IT'S OUR SECOND TAC LED DRS WORKSHOP AND THE ANTITRUST IS NOW ON THE SCREEN.
TO AVOID RAISING CONCERNS ABOUT ANTITRUST LIABILITY, PARTICIPANTS IN ERCOT ACTIVITY SHOULD REFRAIN FROM PROPOSING ANY ACTION OR MEASURE THAT WOULD EXCEED KOTS AUTHORITY UNDER FEDERAL OR STATE LAW.
[Purpose]
ALL RIGHT, SO THE GAME PLAN FOR TODAY IS, IS ERCOT IS GOING TO PRESENT THIS, THIS AGENDA REFLECTS WHAT IS IN ERCOT PRESENTATION.UM, AND, BUT I THINK THE, THE TAC LEVEL SET IS WE ARE DOING THESE DRS WORKSHOPS INSTEAD OF REFERRING THE NPRS TO, UH, SUBCOMMITTEES OR WORKING GROUPS WITH THE GOAL OF GETTING SOMETHING TO THE BOARD TO VOTE ON IN JUNE.
THIS IS OUR SECOND ONE AT THE END OF THE WORKSHOP.
WE CAN TALK ABOUT TIMING AND NEEDS OF, OF FUTURE WORKSHOPS.
SO ERCOT WILL GO, WHAT, WHAT I PROPOSE IS ERCOT GO THROUGH SECTION FIVE, SO ALL THE WAY UP TO DRS CONSTRAINTS AND DEMAND CURVE OF THEIR PRESENTATION.
AND THEN AT THAT POINT, I THINK THAT WOULD BE A GOOD SPOT TO LET COMMENTERS ON.
WE GOT A NUMBER OF COMMENTS ON RESOURCE ADEQUACY, DEMAND CURVES, UH, THE RELEASE FACTOR.
AND SO I, I THINK IF YOU HAVE QUESTIONS FOR ERCOT BEFORE THAT ABOUT THE WORDS ON THE SLIDES, LET'S TAKE THOSE.
BUT OTHERWISE, LET'S GET TO THE END OF FIVE, WHICH IS PAGE 12.
AND THEN WE'LL TAKE UP THE COMMENTS.
WE HAD A NUMBER OF COMMENTS I'LL TRY TO READ.
I THINK I WOULD TAKE THE IMM UP FIRST.
AND THEN IN CHRONOLOGICAL ORDER, WE HAVE LCRA COMMENTS, UH, HEN COMMENTS, TIC COMMENTS, APA COMMENT, APA SLASH ACP COMMENTS, TBA COMMENTS, TCPA COMMENTS, SIERRA CLUB, UH, TGA REP COALITION.
AND I THINK HERE, A FEW OF THEM COULD PROBABLY TAKE UP THEIR 1309 COMMENTS AS WELL.
I THINK LCRA, PROBABLY YOUR 1309 COMMENTS COULD BE TAKEN UP AT THE TIME.
BUT THE, THE ONES REGARDING, UH, RESOURCE ELIGIBILITY AND QUALIFICATION WE WOULD TAKE UP, UH, AT A LATER TIME.
SO AFTER WE GET THROUGH THAT DISCUSSION, THEN I'LL HAND IT OVER TO MARTHA FOR SECTION SIX, UM, AND WE'LL TALK ABOUT RESOURCE ELIGIBILITY, AND THEN I'LL TAKE BACK OVER AFTER THAT.
AND I THINK AT THE END, WE CAN TALK ABOUT NEXT STEPS AS FAR AS WHAT PATH NPR 1310 IS ON VERSUS 1309.
AND I WOULD ALSO ASK THAT WHEN WE TAKE UP OUR, OUR 1310 COMMENTS AFTER SECTION FIVE, WE, WE HOLD OFF ON THAT DISCUSSION ABOUT, YOU KNOW, URGENCY AND, AND WHAT TIMELINE 1310 IS ON.
ANYBODY HAVE ANY PROBLEMS OR COMMENTS ON THAT PLAN? OKAY.
WELL, I'LL HAND IT OVER TO ERCOT.
UM, SORRY FOR THE DELAY, JUST SOME TECHNICAL DIFFICULTIES.
[Recap DRRS TAC Workshop #1]
EVERYONE.THIS IS ANUP ATE FROM, UH, OUR CLOUD MARKET DESIGN TEAM.
SO JUST WANNA GO OVER, UH, WHAT WE
[00:05:01]
ARE GONNA DISCUSS, UH, TODAY IN BRIEF.UM, SO, UH, WE WANTED TO ADDRESS, UH, SOME OF THE, UH, QUESTIONS THAT WE RECEIVED, UH, FROM STAKEHOLDERS, UH, BOTH, UH, DURING, UH, THE PREVIOUS WORKSHOP, UH, AS WELL AS, UH, AS SOME OF THE QUESTIONS AND CLARIFICATIONS, UH, WERE RECEIVED VIA EMAIL.
SO MOSTLY THESE PERTAIN TO, UH, THE MECHANICS OF, UH, DRRS, UH, THE CORE MECHANICS, WHICH WERE DESCRIBED IN BOTH 1309 AND 1310.
UM, SO WE WANTED TO, UH, PROVIDE SOME EXAMPLES OR ILLUSTRATIONS, UH, TO EXPLAIN THOSE.
UM, TOWARDS THE END, UH, WE WILL HAVE A FEW SLIDES, UM, AND SPECIFICALLY TO RESPOND TO SOME, UH, TECHNICAL DESIGN QUESTIONS.
AND THEN, UH, UH, ALSO, UH, TOWARDS THE CLOSE, UH, TO DISCUSS, UH, ISSUES WHICH ARE, UH, TO CLARIFY WHICH ISSUES ARE BEYOND THE SCOPE OF THE CURRENT NPRS, AND, UH, TALK ABOUT THEIR DEPENDENCY ON, UH, FUTURE, UH, UH, FUTURE STEPS.
UM, AND THEN FINALLY, WE CAN DISCUSS, UH, THE NEXT STEPS AND ANY OTHER Q AND A.
SO THIS IS JUST, UH, TO RECAP THE TIMELINE.
UM, SO, UM, IN DECEMBER AT THE PRS, UH, MEETING STAKEHOLDERS HAD, UH, REQUESTED THESE WORKSHOPS, UH, TO HAVE A MORE DETAILED DISCUSSION ON, UH, BOTH THE NPRS, UM, AND UNDERSTAND THEIR DESIGN BETTER.
IN, UH, JANUARY, WE HELD THE FIRST OF THESE, UH, WORKSHOPS, UH, WHERE A COURT, UH, REVIEWED THE CORE MECHANISM, UH, WHICH IS COMMON TO BOTH, UH, NPRS 1309, AND 1310.
WE ALSO DISCUSSED THE ROCK DEPLOYMENT.
UH, WE ADDRESSED, UH, THINGS LIKE THE CONSTRAINTS, UH, THE DEMAND CURVE AND THE REAL TIME, UH, ELIGIBILITY VALIDATION FOR DRRS.
AND, UH, FINALLY ALSO WENT THROUGH, UH, SOME OF THE DETAILS OF THE SETTLEMENTS.
UM, IN ADDITION, WE HAD ALSO HIGHLIGHTED SOME OF THE UNIQUE DESIGN FEATURES OF THE TWO NPRS.
AND, UH, FINALLY, WE ALSO BRIEFLY COMPARED, UH, THE DESIGN IN 1310 WITH, UH, THAT WAS, UH, PROVIDED BY, UH, AURORA IN THEIR, UH, AS PLUS, UH, CONCEPT.
AND SO TODAY, UH, AS MENTIONED BEFORE, WE WILL HAVE, UH, THE SECOND WORKSHOP WHERE WE ARE RESPONDING TO SOME OF THE QUESTIONS THAT WE RECEIVED, UH, SPECIFICALLY WITH RELATE IN RELATION TO THINGS LIKE THE RELEASE FACTOR, UH, THE DEMAND CURVE.
UH, WE'LL ALSO LOOK INTO SOME EXAMPLES OF THE ELIGIBILITY, UH, AND ALSO, UH, WE HAVE SOME DETAILED EXAMPLES ABOUT, UH, THE DAY IN THE LIFE OF HOW THIS WOULD WORK FROM GOING FROM, UH, DAY AHEAD THROUGH ROCK TO REAL TIME.
UM, AND THEN MARCH 4TH IS, UH, THE NEXT WORKSHOP.
UM, THE AGENDA IS STILL, UH, TO BE DECIDED FOR THAT.
SO IN TERMS OF THE AGENDA, UH, FOR TODAY'S PRESENTATION, FIRST, WE WILL GO THROUGH, UM, RECAPPING THE RELEASE FACTOR, UH, CONCEPT, UH, BASED ON SOME FEEDBACK THAT RECEIVED LAST TIME, WE HAVE AN ILLUSTRATION THAT SHOWS HOW THIS WILL BE CALCULATED.
NEXT, WE WILL LOOK AT HOW THE RELEASE FACTOR FIGURES INTO THE, UH, CONSTRAINTS FOR DRRS, WHICH APPLY BOTH IN DAY AHEAD AND REAL TIME.
UH, AND THEN WE WILL ALSO, UH, SHOW, UH, THE DEMAND CURVE.
UM, NEXT WE WILL TALK ABOUT, UH, RESOURCE ELIGIBILITY, UH, AND THE DRS QUALIFICATION AMOUNTS, UH, FOR BOTH, UH, ONLINE AND OFFLINE, UH, GENERATION RESOURCES.
UM, NEXT WE WILL SHOW, UH, DISCUSS THE TIMELINE OF, UH, ACTIONS IN, UM, DAY AHEAD, GOING THROUGH, UH, ROCK, AND THEN FINALLY INTO REAL TIME.
UH, WE ALSO HAVE SOME, UH, REALTIME ELIGIBILITY VALIDATION EXAMPLES.
UM, SO LAST TIME WE HAD SHOWN EXAMPLES OF, YOU KNOW, GOOD CASES.
UM, TODAY WE HAVE SOME EXAMPLES OF, YOU KNOW, INELIGIBLE OR BAD CASES.
UM, AND THEN AGAIN, IN RESPONSE TO SOME STAKEHOLDER FEEDBACK, WE HAVE A FEW, UH, DAY IN THE LIFE EXAMPLES.
UM, SO THESE ARE, UH, FOLLOW UPS TO EXAMPLES THAT WE, UH, PRESENTED IN THE PREVIOUS WORKSHOP.
AND THEN FINALLY, RESPONSES TO CLARIFICATION QUESTIONS.
[DRRS Release Factor Concept and Calculation Example]
[DRRS Constraints and Demand Curve]
SO THE FIRST THING IS, UM, WE JUST WANTED TO AGAIN RECAP, UH, THE RELEASE, UH, FACTOR CONCEPT QUICKLY.UM, SO AS NOTED, UH, INCREASED WORKSHOPS, THE RELEASE FACTOR IS A NUMBER WHICH CAN
[00:10:01]
BE SET FROM ZERO TO ONE.UH, IT DETERMINES THE PROPORTION OF, UH, DRS AWARDED CAPACITY, WHICH CAN OVERLAP WITH ENERGY AND OTHER ANCILLARY SERVICES.
UM, AND SO WITH THE RELEASE FACTOR OF ZERO, IT MEANS THAT THERE WILL BE NO OVERLAP WITH ENERGY AND ANCILLARY SERVICES.
AND THEREFORE, RELEASE FACTOR OF ZERO MEANS THAT, UH, DRS WILL SOLELY ADDRESS, UH, OPERATIONAL UNCERTAINTY.
UH, THE DRRS RELEASE FACTOR, UM, WHICH IS IN NPR 1310, UM, IS PROPOSED TO REMAIN AT, UH, THIS VALUE OF ZERO, UH, UNTIL, AND UNLESS, UH, UH, THERE'S AN APPROVAL FROM THE PUCT TO MAKE THAT CHANGE.
THE RELEASE FACTOR, UH, WILL BE AN HOURLY INPUT INTO BOTH THE DAY AHEAD AND REAL-TIME MARKET CLEARING ENGINES.
UM, AND IT COULD BE ADJUSTED BASED ON FACTORS LIKE THE SEASON OR TIME OF DAY AND SO ON.
SO THIS IS, UM, THE SLIDE IS SHOWING THE FORMULA FOR HOW THE RELEASE FACTOR WILL BE CALCULATED.
UH, WE GOT SOME QUESTIONS ABOUT HOW THAT WOULD BE DONE.
SO WE WANTED TO JUST ELABORATE.
SO THE WAY IT WORKS IS, UH, THE DR R'S LEASE FACTOR IS GOING TO BE DERIVED FROM THE REQUIREMENT AMOUNTS FOR BOTH THE OPERATIONAL UNCERTAINTY RESERVE, AS WELL AS THE RESOURCE ADEQUACY RESERVE.
I WILL NOTE THAT THE RESOURCE ADEQUACY RESERVE, UM, ASSUMING, UH, IT HAS TRIGGERED UNDER 1310, UH, WOULD INCLUDE THE OR COMPONENT.
UM, SO AS AN EXAMPLE, FOR ANY, UH, GIVEN HOUR, UM, WE WOULD HAVE A RELEASE FACTOR, WHICH IS CALCULATED USING, UH, THE FORMULA SHOWN HERE.
SO LET'S SAY WE HAVE, UM, FOR ILLUSTRATION, UH, TRS OPERATIONAL RESERVE REQUIREMENT OF 1500 MEGAWATTS, UM, AND, UH, A RESOURCE ADEQUACY REQUIREMENT OF 60,000 MEGAWATTS FOR THAT PARTICULAR HOUR.
THEN YOU CAN SEE THE CALCULATION OF THE RELEASE FACTOR, AND IT TURNS OUT TO BE 0.975 IN THIS EXAMPLE.
SO IN TERMS OF, UH, THE DRS CONSTRAINTS, UM, WE CAN SEE HOW THEY ARE, UH, INCORPORATING THE RELEASE FACTOR HERE.
UM, SO THIS AGAIN IS, UH, ASSUMING THE 1310, UH, DESIGN.
UM, AND, UM, SO THE SAME CONSTRAINTS WOULD, UH, APPLY IN BOTH A DAY AHEAD AND REAL TIME.
UM, I KNOW THAT FOR BOTH, UH, ONLINE AND OFFLINE GENERATION RESOURCES, THE DRS AWARDS, UH, ARE LIMITED, UH, BY THE HSLS.
UM, THEN IN THE CASE OF ONLINE, UH, RESOURCES, ASSUMING THAT THEY ARE DRS ELIGIBLE AND THAT THEY HAVE SUBMITTED AN OFFER, UH, NOTING THAT THERE'S A MUST OFFER REQUIREMENT FOR, UH, AWARDS TO BE, UH, AWARDED.
UM, THE DRS UH, AWARDS ARE LIMITED BY THE QUALIFICATION AMOUNT FOR ONLINE RESOURCES.
UM, I WILL GO INTO THE DETAILS ABOUT HOW THAT'S CALCULATED, UH, IN THE LATEST SLIDE.
UM, NEXT, UH, ALSO WE SEE THE CONSTRAINT THAT, UM, ENERGY AND OTHER ANSLEY SERVICES PLUS, UH, ANY NON-OVERLAPPING, UH, PORTION OF DRRS.
UH, THOSE ARE LIMITED BY THE HSL OF THE RESOURCE FOR, UH, OFFLINE RESOURCES.
LIKEWISE, UH, THE DRS UH, AWARDS FOR OFFLINE GENERATION RESOURCES, FOR EXAMPLE, ARE LIMITED BY THE, UH, QUALIFICATION AMOUNT.
UM, AND ALSO, UH, ANOTHER CONSTRAINT IS TO ENSURE THAT, UH, ANY, UH, UH, ECRS OR NON SPIN AWARDS PLUS, UH, NON, UH, NON OVERLAPPING COMPONENT OF DRRS, UH, ALL FIT, UH, WITHIN THE HSL.
SO THAT'S THE EQUATION ON THE BOTTOM.
SO THIS IS, UH, THE PICTURE OF, UH, SO WE HAVE TWO FIGURES HERE, UM, THAT SHOW THE DEMAND CURVES.
SO ON THE LEFT IS, UH, THE PROPOSED, UH, UH, DEMAND CURVE, UH, FOR NPR 1309.
SO LET'S SAY WE HAVE A DRS OPERATIONAL RESERVE, UH, AS PLAN REQUIREMENT OF 1500 MEGAWATTS.
UM, SO IN THIS CASE, THE DRS DEMAND CURVE STARTS AT, UH, ONE $50 PER MEGAWATT PER HOUR, UH,
[00:15:01]
ON THE LEFT, UH, STARTING AT ZERO.AND THEN IT, UH, LINEARLY SLOPES DOWN TO A VALUE OF, UH, $10.
UH, ADD THAT, UH, AS PLAN AMOUNT ON THE RIGHT IS THE EXAMPLE FOR THE DEMAND CURVE, UH, WITH A, ASSUMING A RESOURCE ADEQUACY, UH, REQUIREMENT IS TRIGGERED.
NAMELY, IT MEANS THAT THE PCT HAS APPROVED A NON-ZERO RELEASE FACTOR.
AND, UH, ASSUMING THAT WE HAVE, UH, RESOURCE ADEQUACY REQUIREMENT OF 60,000, WE CAN SEE THERE'S A FLAT PORTION OF THE DEMAND CURVE, WHICH, UH, EXTENDS FROM THE OPERATIONAL RESERVE REQUIREMENT IN THIS INSTANCE.
UH, 1500 MEGAWATTS, UH, ALL THE WAY TO, UH, THE RESOURCE ADEQUACY REQUIREMENT.
WE'RE HAVING A FACILITIES DISCUSSION THAT I CAN BRING UP NOW.
UM, THERE'S NO WATER CURRENTLY IN THE BUILDING, SO NO RESTROOM SINKS, WATER, UM, IT'S A AREA OUTAGE, SO WE'RE, SOMEBODY'S GONNA CHECK BACK IN IN AN HOUR OR LESS.
SO I THINK MAYBE WE KEEP GOING UNTIL THEN.
AND THEN IF WE NEED TO STOP THIS, WE COULD CONTINUE, UM, VIA WEBEX AFTER ROSS TOMORROW.
IS THAT OKAY? IF YOU'RE ASKING ME, THEN, YEAH, YOU HAVE THE MIC.
BLAKE, BLAKE HOLT, LCRA, AND, UH, IN THE SPIRIT OF RESOURCE INADEQUACY,
UM,
WOULD IT BE, UH, LET'S SAY POST RELIABILITY STANDARD REVIEW, THAT AMOUNT WOULD BE SET, AND WOULD IT REMAIN STAGNANT FOR THREE YEARS UNTIL RE-REVIEW? OR WOULD THIS BE SOMETHING THAT IS UPDATED DURING THE, AS THE ANNUAL AS METHODOLOGY DISCUSSION? SO I THINK THE, UH, CERTAINLY WE NEED TO HAVE THAT INDICATIVE ASSESSMENT OF WHERE WE ARE FROM A RESOURCE ADEQUACY PERSPECTIVE.
SO IF WE'RE SETTING THE FIRST, UM, TARGET FOR, FOR PROCUREMENT, IT WOULD NEED TO HAPPEN AFTER THAT FIRST RELIABILITY STANDARD ASSESSMENT IS, IS PERFORMED.
THE, UM, AS WE GO THROUGH ON AN ANNUAL BASIS, AS WE'RE SETTING THE, UM, UH, ANCILLARY SERVICE METHODOLOGY, THAT'S A, A KEY TRIGGER FOR EVALUATING WHAT ARE THE, THE QUANTITIES THAT WOULD BE CARRIED FORWARD INTO THE NEXT YEAR.
UM, THE, THE MECHANICS OF HOW THAT WORK HAVEN'T BEEN FIGURED OUT AS YET.
THEY'RE, UH, OUTSIDE OF THE SCOPE OF THIS NPR, BUT I IMAGINE A, AT LEAST, AT LEAST, UH, EVERY THREE YEARS WHEN WE'RE DOING THAT, UH, ASSESSMENT, THAT THAT'S SOMETHING THAT WOULD BE TAKEN INTO ACCOUNT, BUT WE WOULD NEED TO BE, UM, PUBLISHING THAT QUANTITY AS PART OF THE ANCILLARY SERVICE METHODOLOGY ON, ON AN ANNUAL BASIS.
SO I THINK FINDING THOSE QUANTITIES ARE YET TO BE DETERMINED BASED ON, UH, THE OUTCOME OF THAT FIRST RELIABILITY STANDARD ASSESSMENT.
I'LL, I'LL SAVE ADDITIONAL COMMENTS TILL LATER, BUT THAT HELPS.
AND ON THE WATER SITUATION, YOU'RE FINE IF WE KEEP GOING FOR AN HOUR.
UM, SO NEXT, JUST WANT TO WALK THROUGH, UM, AN EXAMPLE OF, UH, HOW THE REQUIREMENTS, UH, MIGHT WORK, UH, WITH THIS SIMPLE ILLUSTRATION.
SO, UM, CONSIDER WE HAVE A SYSTEM, UH, LET'S ASSUME, UH, THERE ARE ONLY LIKE THREE GROUPS OF, UH, GENERATORS, WHICH ARE ALL DRS ELIGIBLE.
YOU KNOW, YOU CAN THINK OF THESE AS, UH, THREE QCS.
UM, THE FIRST, UH, QSC, IT, UH, IS, UH, GENERATION RESOURCES ARE ALL ONLINE, AND THEY CHOOSE TO OFFER, UH, ENERGY ANCILLARY SERVICES AND DRRS, UH, CAPACITY, UM, BASED ON THE TABLE BELOW.
UM, SO WITH THEIR HSL OF, UH, 40,000, UH, LET'S SAY THEY CHOOSE TO OFFER 30,000 IS ENERGY, UH, 9,000 FOR OTHER ANCILLARY SERVICES.
UM, AND THOUSAND FOR THE DRRS, UH, OPERATING
[00:20:01]
RESERVE PORTION, UM, ASSUMING THESE ARE ALL, UH, AWARDED AS SUCH.UM, THE SECOND GROUP, UH, SECOND QSC OFFERS, UH, ONLY ENERGY AND, UH, DRRS, UH, BUT NO OTHER ANCILLARY SERVICE.
UM, SO THERE AGAIN, YOU CAN SEE THE ENERGY AMOUNT IS, UH, 19,500, GIVEN THE HSL OF 2000.
AND, UM, THE DRS OPERATING RESERVE PORTION OF 500 MEGAWATTS.
UM, THE THIRD QSE, UH, ITS GENERATORS ARE ALL, UH, OFFLINE, AND THEY CHOOSE TO OFFER DRS.
UM, HERE, I'LL NOTE THAT THE DRS REQUIREMENTS MAY BE FULFILLED BY BOTH, UH, ONLINE AND OFFLINE GENERATION RESOURCES.
AND SO THIS IS, UH, IN THIS INSTANCE, THEY ARE ABLE TO, UH, OFFER, UH, 5,000 MEGAWATTS, UH, WHICH IS THEIR WHOLE, UH, HSL BECAUSE THEY'RE OFFLINE AS, UH, PART OF THE NON-OVERLAPPING DRS.
SO, AGAIN, JUST TO, UH, THIS IS, UH, USING THE NPRR 1310 DESIGN, AND ASSUMING THAT THE RELEASE FACTOR HAS BEEN APPROVED TO BE A NON ZERO VALUE.
UM, ALL THESE, JUST, ALL THESE NUMBERS ARE JUST FOR ILLUSTRATION, AS NOTED, THE FOOTNOTE.
SO LET'S SAY WE, UH, STILL HAVE THOSE, UH, REQUIREMENTS IN THE ILLUSTRATION THAT WAS SHOWN EARLIER, WHERE WE HAVE, UH, TOTAL OR, UH, RESOURCE ADEQUACY REQUIREMENT OF, UH, 60,000 MEGAWATTS.
WE HAVE THE OPERATING RE RESERVE, UH, REQUIREMENT OF 1500 MEGAWATTS.
AND THEN WE HAVE, UH, SO THAT GIVES US A RELEASE FACTOR OF, UH, 0.975.
NOW, WE CONSIDER THREE, UH, SCENARIOS.
UM, SO LET'S SAY IN SCENARIO ONE, UM, ALL THREE CUISINES, ALL GENERATORS ARE AVAILABLE, AND THEY'RE OFFERING AND AWARDED AS SHOWN HERE.
SO IN THIS CASE, UH, THE TOTAL REQUIREMENT IS, UH, 65,000 FOR, UH, DRRS.
UM, THE TOTAL REQUIREMENT FOR THE OR, UH, COMPONENT OF DRS IS, UH, 6,500.
AND, UH, IN THIS CASE, THE DRS AWARDS ARE 60,000.
NOW, UH, GIVEN THAT, UH, UH, THE REQUIREMENT IS MET, UH, THE DRS, UH, CPCS WOULD BE SOMEWHERE, UH, BELOW $10, UM, BASED ON, UH, THE CLEARED OFFERS.
UM, IN SCENARIO TWO, UH, LET US ASSUME THAT, UH, GROUP TWO OR QZ TWO, UH, ALL GENERATORS ARE ON OUTAGE AND THEREFORE ONLY G ONE AND G THREE ARE AVAILABLE.
UH, THIS GIVES US, UH, TOTAL DRRS, UH, AMOUNT OF, UH, 45,000, UH, WITH THE OR COMPONENT OF, UH, 6,000.
AND SO THEREFORE, IN TERMS OF THE AWARDS, UH, THE AWARD IS, UH, CLEARLY SOMEWHERE BETWEEN 1500 AND 60,000, AND THEREFORE THE D-R-S-M-C-P-C, UH, WOULD BE, UH, $10 BASED ON THAT FLAT PORTION OF THE DEMAND CURVE THAT WAS JUST SHOWN EARLIER.
FINALLY, UH, WE HAVE THE THIRD SCENARIO WHERE, UM, BOTH G TWO AND G THREE ARE ON OUTAGE, SO ONLY G ONE IS AVAILABLE.
AND IN THIS CASE, WE SEE THAT, UH, THE LIMITATION IS COMING FROM THE DRS, UH, OPERATIONAL RESERVE PORTION.
SO THAT'S, UH, THE DRS AWARDS ARE, UH, CLEARLY, UH, GOING TO BE BELOW THAT 1500 REQUIREMENT.
AND, UH, THEREFORE, UH, WE WILL HIT THAT, UH, SLOW PORTION OF THE, UH, DEMAND CURVE.
AND SO, UH, THE PRICE WOULD BE SOMEWHERE BETWEEN, UH, SOMEWHERE ABOUT $10, BUT, UH, UH, BELOW ONE 50, UH, DEPENDING, DEPENDING ON WHERE IT LANDS ON THAT, UH, DEMAND CURVE.
SO JUST PAUSE AND SEE IF THERE ARE ANY QUESTIONS HERE.
I SEE A QUESTION FROM SHAMS. UH, YEAH, SHAKI REPRESENTING HE AND ENERGY NETWORK.
UM, SO IN THIS EXAMPLE, LIKE SCENARIO TWO, UM, SINCE YOU HAVE A RELEASE FACTOR THAT TIES IN, YOU KNOW, THE PERCENTAGE THAT'S PART OF, OR, AND AS WHEN YOU GO DOWN THE SLOPE, DO YOU PROPORTIONALLY GO DOWN THE CURVE OF BOTH THE AS PORTION AND THE RESOURCE ADEQUACY INSTEAD OF JUST GOING UP THE RESOURCE ADEQUACY? SINCE WHEN YOU DON'T BUY 10,000 MEGAWATTS, YOU'RE ACTUALLY NOT BUYING SOME AMOUNT OF THE ANSLEY SERVICE PORTION AS WELL? WELL, SO IN THIS CASE, UH, WE DO HAVE, UH, ENOUGH FOR THE SERVICE PORTION,
[00:25:01]
UH, GIVEN THAT, YOU KNOW, THE OFFLINE GENERATION RESOURCES, UM, CAN, UH, CONTRIBUTE.UM, AND SO THEREFORE THAT REQUIREMENT IS, UH, FULFILLED.
UM, HOWEVER, IF, UH, I THINK WHAT THE SCENARIO YOU ARE SUGGESTING IS CLOSER TO SCENARIO THREE, BECAUSE THAT'S WHEN, UM, THE OR PORTION IS, UH, ALSO NOT ABLE TO BE MET, AND THEREFORE THAT'S WHEN WE LAND ON THE, UH, SLOPING PORTION OF THE DEMAND CURVE.
DOES THAT MAKE SENSE? YEAH, I'M, I'M, SO THE RATIO IS NO LONGER MAINTAINED, I GUESS, RIGHT? NO, THE RATIO IS, UH, MAINTAINED ON, UH, INDIVIDUAL UNITS, WHICH ARE ONLINE FOR OFFLINE UNITS.
UM, IT, THE RELEASE FACTOR DOESN'T, UH, APPLY.
UM, SO THEREFORE THEY CAN, UH, PROVIDE ALL THEIR, UH, AVAILABILITY FOR, UH, DRS.
SO IF IT, YEAH, SO IF IT WAS ALL ONLINE, THEN IT WOULD GET INTO THE RIGHT, RIGHT.
IN A SITUATION WHERE IT'S ONLY ONLINE RESOURCES, THEN YES, UH, YOU KNOW, UH, ALL THE, UH, ALL THOSE RESOURCES, UH, HAVE TO FOLLOW THAT RATIO.
AND THEREFORE, UM, YEAH, YOU'RE RIGHT, WE WOULD BE, UH, ASSUMING, UH, YEAH, THAT'S KIND OF ILLUSTRATED IN, UH, SO THAT IS ACTUALLY ILLUSTRATED IN SCENARIO THREE AS I MENTIONED BEFORE.
ANY OTHER QUESTIONS? OKAY, I THINK THIS WOULD BE A GOOD SPOT FOR OUR, A LOT OF OUR COMMENTS ON 1310.
UM, SO I'M GONNA TRY TO ROLL THROUGH, THE COMMENTS ARE ABOUT 10.
UM, SO I THINK IF, IF SOMEBODY PRESENTING THEIR COMMENTS, IF YOU HAVE A QUESTION ABOUT THE WORDS OR CONCEPTS THEY'RE SAYING, ASK THAT, BUT DON'T DO LIKE A BACKDOOR PILOT INTO YOUR OWN OR SOMEBODY ELSE'S COMMENTS, WE'LL SORT OF GO IN ORDER.
UM, AND THEN IF PEOPLE AREN'T HERE TO SPEAK TO THEM OR DON'T WANNA SPEAK TO THEM, WE CAN JUST SKIP THOSE.
AND THEN I THINK, YOU KNOW, THE URGENCY OF 1310 IS A SUBSTANTIVE POINT IN A LOT OF THE COMMENTS, BUT WE SHOULD SAVE THE DECISION POINT ON THAT FOR LATER TODAY OR A SUBSEQUENT WORKSHOP.
SO LET'S, LET'S START WITH THE IMM AND THEN AFTER THAT WE'LL GO THROUGH CHRONOLOGICALLY.
SO ANDREW, I THINK IF YOU WANNA DO BOTH SETS OF COMMENTS, I THINK THAT'S FINE, UNLESS YOU'RE GONNA GO SPECIFICALLY INTO RESOURCE ELIGIBILITY OR SOMETHING ELSE, AND THEN WE'LL HAVE LCRA ON DECK.
UH, SO IF I'M TALKING ABOUT BOTH SETS OF COMMENTS, YOU MEAN 1309 AND 1310? YEP.
I THINK ANYTHING RELEVANT TO, UM, RELEASE FACTOR, UM, THE ANCILLARY SERVICE DEMAND CURVES, I THINK, YOU KNOW, THIS IS APPROPRIATE TO PLACE US ANYWHERE ELSE FOR THIS SORT OF GENERAL RESOURCE ADEQUACY ARGUMENTS.
WELL, UH, THAT SOUNDS GOOD TO ME.
SO, ANDREW REERS, IMM, UH, 1309 IS THE EASIER NPRR TO DISPATCH WITH.
UH, THE BROAD STROKES OF OUR COMMENTS ON 1309 IS THAT WE'RE PRETTY HAPPY WITH THE EXTENT TO WHICH OR CAUGHT ADDRESSED A LOT OF OUR CONCERNS WITH 1235.
UH, A LOT OF WHERE WE ARE STILL APPREHENSIVE ABOUT 1309 RELATES TO THE DEMAND CURVE AND THE EVENTUAL DRRS KIND OF PROCUREMENT METHODOLOGY.
AND WE'D, WE'D NEED TO SEE A, SOME MOVEMENT ON THE DEMAND CURVE, AND B, SOME INSIGHT INTO HOW THE DRS METHODOLOGY IS GOING TO WORK BEFORE WE COULD GIVE MORE THOROUGH SUPPORT FOR 1309.
UH, IN PARTICULAR, THE LINEAR DEMAND CURVE COULD HAVE SOME PROBLEMS WHERE THE PRICE OF GOING SHORT OF DRS BECOMES HIGHER THAN THE PRICE OF GOING SHORT OF EVERYTHING ELSE FOR A CERTAIN RANGE.
AND THAT'S KIND OF A, THAT COULD CREATE SOME WEIRD CROP OPTIMIZATION OUTCOMES.
UH, AND AS FOR THE DRS PROCUREMENT PLAN, UM, IF DRS IS COMING OUT OF WHAT WE SEE AS EXCESSIVE NONS SPIN PROCUREMENT, THEN WE ARE MORE AMENABLE TO THAT OPTION THAN IF THE DRS PLAN IS ONLY ADDING TO THE ALREADY VERY LARGE, UH, VOLUME OF OPERATING RESERVES THAT ERCOT IS PROCURING.
UH, WE HAVE BEEN COMMENTING ON THIS
[00:30:01]
KIND OF ALL ALONG, UH, WE ARE PRETTY OPPOSED TO THE PREMISE OF USING DRS AS A RESOURCE ADEQUACY TOOL IN THIS WAY.AND SO THAT'S KIND OF A GENERAL POSITION, BUT THERE ARE A LOT OF SPECIFICS ABOUT HOW IT IS DESIGNED THAT WE THINK COULD PRODUCE SOME PROBLEMATIC OUTCOMES.
I WON'T GO THROUGH ALL OF OUR COMMENTS BECAUSE THEY'RE SORT OF DETAILED AND MATHY, UH, BUT I WILL GO THROUGH SOME OF THE MORE QUALITATIVE ASPECTS OF THEM.
SO ONE IN PARTICULAR IS, IF THE VOLUME OF DRS IS GOING TO BE SET MORE OR LESS, SO THAT YOUR EXPECTATION IS THAT IT'S CLEARING AT AT LEAST $10 AROUND THE CLOCK, THERE ARE SEVERAL WAYS THAT THAT COULD BE PROBLEMATIC.
FOR ONE THING, IT COULD INCENTIVIZE LESS EFFICIENT KIND OF COMMITMENT DECISIONS.
AND SO NOW YOU HAVE EVEN MORE CAPACITY ONLINE BECAUSE ALL OF A TED ROOM IS ELIGIBLE FOR DRS PAYMENTS.
AND SO NOW YOU'VE FURTHER EXACERBATED THE, UH, EXCESS OF OPERATING RESERVES IN THE SYSTEM, AND THAT HAS AN IMPACT ON SHORTAGE PRICING.
AND SO IT'S REALLY UNCLEAR HOW WHATEVER REVENUE YOU GET FROM DRS, HOW IS THAT OFFSET BY REDUCED REVENUE FOR ENERGY AND OTHER ANCILLARY SERVICES.
ANOTHER ASPECT OF THIS IDEA THAT YOU COULD SET THE PROCUREMENT VOLUME SO THAT YOU'RE ALWAYS GOING SHORT ENOUGH THAT YOU'RE CLEARING AT $10, UH, THIS, THIS WOULD JUST BE REALLY A TRICKY NEEDLE TO THREAD.
AND WE, WE KIND OF WALKED THROUGH AN EXAMPLE, UH, BECAUSE OF HOW THE RELEASE FACTOR IS FORMULATED, ANY SHORTAGE IN DRS IS GOING TO TEND TO COME OUT OF BOTH THE OPERATING RESERVE AND RESOURCE ADEQUACY COMPONENTS OF DRS.
AND SO THE MORE YOU OVERSIZE THE PROCUREMENT VOLUME, THE MORE YOU KIND OF AUTOMATICALLY GO SHORT ON DRS AS A OPERATING RESERVE.
AND WE WALK THROUGH THE MATH ON THAT.
UH, I'LL ACKNOWLEDGE BEFORE S GETS UPSET WITH ME THAT I, I THINK OFFLINE DRS KIND OF COMPLICATES THAT STORY A LITTLE BIT, BUT I THINK THE BASIC POINT IS STILL VALID.
AND SO IT'S HARD TO SET THE PROCUREMENT VOLUME IN SUCH A WAY WE ARE NECESSARILY GOING SHORT, BUT NOT TOO SHORT SO THAT YOU DON'T RUN THROUGH ALL OF YOUR OPERATING RESERVE DRS, UH, LET'S SEE IF THERE'S ANYTHING ELSE THAT WE SHOULD GO THROUGH RIGHT NOW.
I, I THINK THERE ARE GONNA BE, WE WORKED THROUGH SOME EXAMPLES WITH ERCOT WHERE WE WERE TRYING TO SEE HOW THIS WOULD WORK IN A CO OPTIMIZED KIND OF SCED SCENARIO.
SO ONE CHALLENGE HERE IS IF YOU'RE MAKING A DRS PLAN THAT'S, YOU KNOW, TENS OF THOUSANDS OF MEGAWATTS, UH, LARGE SHORTAGES OF A $10 PENALTY PRICE ARE EQUIVALENT TO SMALL SHORTAGES OF MORE EXPENSIVE RESERVES.
AND EXACTLY HOW THAT PLAYS OUT IN THE CO-OP OPTIMIZATION IS SOMETHING THAT WE'D LIKE TO SEE MORE ANALYSIS OF.
UH, WE, WE COULD SEE SITUATIONS WHERE WE'RE GOING SHORT OF HIGHER VALUE RESERVES BECAUSE THE WAY THE OPTIMIZATION WORKS OUT, IT'S MORE NET BENEFICIAL TO SCAD TO PROCURE MORE DRS.
AND SO THAT'S SOMETHING WE'D LIKE TO SEE MORE ANALYSIS OF.
SO A LOT OF THAT COMES DOWN TO THE WAY THIS RELEASE FACTOR IS GOING TO, UH, INFLUENCE THE CO-OP OPTIMIZATION IN SCED IS TRICKY AND UN DEMONSTRATED AT THIS POINT, AND WE'D LIKE TO SEE MORE ANALYSIS ON HOW THAT'LL WORK AND HAVE BROUGHT UP SOME CONCERNS WE HAVE ABOUT HOW IT MIGHT WORK THAT WOULD BE PROBLEMATIC.
AND SO THERE'S A EXCESS OPERATING RESERVE SITUATION.
HOW'S THIS ACTUALLY GOING TO WORK OUT IN TERMS OF NET REVENUES AND WILL THIS ACTUALLY EFFECTIVELY SUPPORT RESOURCE ADEQUACY? AND THEN THERE'S JUST MARKET PERFORMANCE RELIABILITY ISSUES.
IF WE'RE GOING SHORT ON THE OPERATING RESERVE PORTION OF DRS, WE'RE LOSING A LOT OF THE RELIABILITY BENEFIT.
IF WE'RE PRESERVING DRS OVER, YOU KNOW, RRS OR REGULATION OR SOMETHING, THAT'S ANOTHER RELIABILITY CONCERN.
IF WE'RE SUPPRESSING SCARCITY PRICING, THAT'S A MARKET PERFORMANCE CONCERN.
SO THAT'S KIND OF THE, THE NET NET OF WHAT WE'VE LAID OUT IN OUR COMMENTS, WHICH I'M SURE YOU'VE ALL HAD TIME TO READ IN THE 24 HOURS SINCE WE POSTED THEM.
THANKS FOR LAYING THAT OUT, ANDREW.
AND HOPE THIS QUESTION ISN'T TOO OUT SCOPE,
[00:35:01]
UH, BUT IF 1310 DOESN'T REACH THE FINISH LINE AND WE ARE IN A SITUATION WHERE, UH, WE DO NEED A RESOURCE ADEQUACY SOLUTION, HAS THE IMM THOUGHT ABOUT, UH, PROPOSALS OR, UH, ALTERNATIVE OPTIONS AT THIS TIME? OR IS THAT SOMETHING Y'ALL ARE STILL WORKING THROUGH? YEAH, SO WHAT I THINK I'LL SAY ON THAT IS THAT WE ARE WORKING WITH ERCOT ON THE OPTIONS FOR THE RELIABILITY STUDY.AND SO WE ARE INVOLVED IN THAT PROCESS AND WE'VE, UH, WE'RE WORKING WITH THEM AND HAVE A FEW DIFFERENT OPTIONS THAT HAVE BEEN IDENTIFIED.
AND SO I THINK WE'LL HAVE MORE ON THAT IN THE COMING WEEKS AND MONTHS.
CAN SOMEONE REMIND ME OF THE TIMING OF THE RELIABILITY STANDARD STUDY? ULTIMATELY THE, WE WE'RE AIMING FOR THE STUDY TO BE OUT BY AUGUST.
SO THAT'S AFTER THE 1309 EXPECTATION BY THE BOARD? THAT IS CORRECT.
OKAY, BOB? YEAH, QUICK QUESTION.
I JUST WANNA MAKE SURE I HEARD THAT RIGHT.
SO AS PART OF, OF WHAT YOU'RE DOING WITH THE STANDARD IS YOU'RE GONNA COME UP WITH SOME POTENTIAL ALTERNATIVES FOR RESOURCE ADEQUACY, UH, AND THOSE WILL COME OUT AT THE SAME TIME.
IS THAT WHAT I'M HEARING? W WE HAVE TO SUBMIT COMMENTS AND ARE KIND OF PARTICIPATING WITH ERCOT ON THE RELIABILITY STANDARD STUDY, AND SO WE'LL BE IN THE MIX WITH ALL OF THAT.
WELL, WHAT I WAS TRYING TO GET AT, JUST BA BASED ON WHAT BLAKE WAS TALKING ABOUT MM-HMM
IS THAT YOU MIGHT COME UP WITH SOME OTHER ALTERNATIVES, RESOURCE ADEQUACY MECHANISMS. IS THAT WHAT I'M HEARING ALSO? THAT'S RIGHT.
AND THAT'LL COME OUT AT THAT TIME.
SO REC THAT, THAT'S MY ASSUMPTION.
RECOMMENDATIONS WOULD COME OUT AT THE SAME TIME AS THE RELIABILITY STUDY RELIABILITY STANDARD STUDY.
THE RELIABILITY STANDARD STUDY WILL INCLUDE RECOMMENDATIONS THAT MAY OR MAY NOT HAVE BEEN UNIQUE AT THAT TIME, INCLUDING 1310.
UM, THE RELIABILITY STUDY WILL BE PUBLISHED IN AUGUST.
UM, ANY QUESTIONS OR COMMENTS FOR ANDREW? DREW? YES.
NO, YOU'VE REACHED FOR YOUR, I GUESS IN TERMS OF THE RELIABILITY STUDY, I GUESS IN TERMS OF ANY ASSUMPTIONS OF 1310 IN OUR ROUTE IS THAT WE CAN MAKE ANY ASSUMPTIONS WITH REGARDS TO THAT FOR THE CURRENT MARKET ASSUMPTIONS OR WE, ASSUMING IT'S JUST 1309, IT'S IN PLAY, UH, MATTHEW ARTHUR ERCOT, THE, UM, RELIABILITY STANDARD ASSESSMENT WILL BE ASSUMING THAT 1309 IS IN EFFECT FOR THE 2029 YEAR.
NED, THIS IS WEIRD 'CAUSE I HAVE TO LEAN THIS WAY INTO THE MICROPHONE, BUT LOOK AT THIS ONE.
WHICH SIDES OF THE ROOM? YOU CAN JUST SHARE A MICROPHONE.
LET'S SHARE, LET'S SHARE A MICROPHONE.
YOU MENTIONED, UM, SOME CONCERNS ABOUT THE ANCILLARY SERVICE DEMAND CURVE SHAPE.
UM, YOU TALKED ABOUT, YOU KNOW, WANTING TO HAVE SOME EMPIRICAL BASIS FOR THE END POINTS AND THEN, UH, POSSIBLY SOME CONCERNS WITH THE FLAT SHAPE AS WELL.
DO YOU HAVE, UH, DO YOU HAVE A, ARE THERE A PROPOSED OR PREFERRED, UM, SHAPE AND OR ENDPOINT, UH, CRITERIA THAT YOU HAVE IN MIND? YEAH, SO IF WE'RE TALKING ABOUT 1309, THERE'S THE MORE COMPLICATED ANSWER.
THE MORE STRAIGHTFORWARD THING IS WE'D PROBABLY THINK THAT THE DRS DEMAND CURVE SHOULD SLOT IN UNDER THE NONS SPIN DEMAND CURVE.
SO THAT WOULD BE THE MOST STRAIGHTFORWARD WAY TO DO IT, WHERE WHATEVER YOU HAVE FOR THE NONS SPIND CURVE, YOU COULD JUST PRODUCE SOMETHING THAT KIND OF IS LESS EXPENSIVE THAN THE NONS SPIN CURVE SO THAT YOU DON'T END UP GOING SHORT ON NONS SPIN IN FAVOR OF DRS, FOR EXAMPLE, FOR THE EXTENDED CURVE, WE DON'T REALLY HAVE AN ALTERNATIVE DEMAND CURVE 'CAUSE WE KIND OF DON'T REALLY THINK THIS CONCEPT
[00:40:01]
IS GOING TO WORK IN PRACTICE.BUT I THINK WHAT SHAMS HAS KIND OF GOTTEN AT WITH HIS COMMENTS ON THAT IS MORE ALONG THE LINES OF WHAT WOULD LOOK BETTER, WHICH IS THAT SOMETHING THAT PRODUCES VARIED PRICES BASED ON DIFFERENT SUPPLY AND DEMAND CONDITIONS WHERE THE PRICES ARE HIGHER WHEN YOU HAVE A GREATER RELIABILITY RISK.
AND SO I DON'T KNOW EXACTLY WHAT THAT WOULD LOOK LIKE, BUT I THINK THE SPIRIT OF HIS COMMENTS IS IN LINE WITH THAT AND MAKES SENSE TO US.
AND SOMETHING EVEN MORE LIKE WHAT THE AURORA STUDY PROMOTED WOULD AT LEAST MAKE MORE SENSE FROM A, UH, THE REVENUE IS HIGHEST AT THE TIMES WHEN THE PRODUCT IS MOST VALUABLE.
THAT'S, THAT'S, THAT'S HELPFUL.
UM, SO DOES THAT IMPLY THAT THE DEMAND CURVE, OR AT LEAST THE, THE TOP END OF THE DEMAND CURVE OR EVEN SOME OF THE, SOME OF THE SHAPE OF THE DEMAND CURVE MAY VARY WITH THE ANNUAL ANCILLARY SERVICE, UH, METHODOLOGY AS THE, THOSE HIGHEST RISK HOURS ARE IDENTIFIED? OR IS THAT SOMETHING THAT YOU THINK WOULD BE RELATIVELY KNOWN AHEAD OF TIME? IT THE, I'M TRYING TO THINK THROUGH HOW MUCH THAT DEMAND CURVE CHANGES FROM YEAR TO YEAR AND SEASON TO SEASON.
WE'RE, WE'RE GETTING INTO LIKE ANDREW REIMER'S OPINIONS AS OPPOSED TO LIKE OUR OFFICE'S POSITION.
I I DO THINK ULTIMATELY FOR THE SHORTAGE PRICING IN ERCOT TO WORK PROPERLY, THE ANCILLARY SERVICE DEMAND CURVES THEMSELVES SHOULD PROBABLY BE MORE DYNAMIC THAN THEY ARE WHERE, I DON'T KNOW IF IT WOULD BE EVERY YEAR OR EVERY FEW YEARS.
SO, YOU KNOW, UH, IN MARKETS THAT HAVE CAPACITY MARKETS EVERY FEW YEARS THEY HAVE TO DO A WHOLE FULL NEW ASSESSMENT OF LIKE ECCS AND THINGS LIKE THAT.
YOU CAN IMAGINE SOMETHING SIM SIMILAR BEING DONE TO REFORMULATE THE SHAPE OF THE DEMAND CURVES AND THEN MAYBE ON A YEARLY BASIS THE YOU'RE SCALING THEM OR SOMETHING LIKE THAT WITHIN THAT SHAPE.
UH, WE HAVEN'T DEVELOPED A FULL BLOWN PROPOSAL FOR THAT, BUT THAT IS SOMETHING WE'VE TALKED ABOUT.
UH, I WOULD ALSO SAY LIKE THE END POINTS ON THIS DRS CURVE, WE DID HAVE A WHOLE POSITION DURING THE 1268 DISCUSSION THAT ULTIMATELY ALL OF THOSE PRODUCTS GET PRICED AT $5,000 BEFORE THE LAST MEGAWATT.
I AM NOT SURE YET WHETHER WE WOULD MAKE THE SAME CASE FOR DRS, BUT I COULD IMAGINE THAT WE WOULD WANT SOMETHING ALONG THOSE LINES, BUT THEN HAS LIKE A VERY STEEP, UH, EXPONENTIALLY DECREASING SHAPE TO IT.
I WILL, I WANT TO ASK MORE ABOUT ECCS AND THE ASCS, BUT I HAVE NOW WE'RE GONNA GET OURSELVES IN TROUBLE, RIGHT?
ANY OTHER QUESTIONS FOR ANDREW? WE SEEM TO HAVE WATER AS OF RIGHT NOW, BUT WE CAN'T GUARANTEE IT'S SAFE TO DRINK, BUT THE TOILET'S FLUSH IT IS IMPORTANT.
I THINK WE HAVE FIVE DIET COKES LEFT IN THE IMM OFFICE, SO, YOU KNOW, WE DON'T HAVE WATER, BUT DID YOU WANNA ADD TO THAT, ANN? I'LL JUST ADD THAT THE WATER PERSON HAS NOT COME BACK AND TOLD US THAT EVERYTHING'S BACK ON, SO I DON'T KNOW IF IT'S GONNA STAY ON.
THAT'S WHY I SAID AS OF RIGHT NOW, AS OF NOW, AS OF NOW, THE TOILET'S FLUSH.
UM, SO LET'S GO TO LCRA COMMENTS.
BLAKE, YOU'RE ALWAYS UP DURING THE WATER DISCUSSIONS.
UM, I THINK, I THINK YOU CAN TAKE BOTH OF YOURS UP HERE TOO, RIGHT? ABSOLUTELY.
BLAKE COLE, LCRA, LET THE RECORD REFLECT.
WE DO NOT APPRECIATE THE, UH, TOILET SEGUE INTO OUR COMMENTS.
UH, THERE'S NO MINUTES FOR THIS MEETING.
SO, UH, SHORT AND SWEET FOR 1309.
UH, WE SUPPORT THE DESIGN, UH, BELIEVE IT FITS THE STATUTE.
HOWEVER, WE DON'T BELIEVE IT'S COMPLETELY RESPONSIVE TO THE COMMISSION'S FEEDBACK TO EXPLORE A RESOURCE ADEQUACY OPTION USING DRS.
SO, UM, AS INDICATED IN OUR 1310 COMMENTS, WE'RE EXPECTING A NEED FOR A RESOURCE ADEQUACY SOLUTION BASED ON A FEW DIFFERENT STUDIES AND SOURCES WE CITE IN OUR COMMENTS ALONG WITH, UM, YOU KNOW, FOR NINE OF THE LAST 10 YEARS, UH, ENERGY PRICES HAVE NOT, UH, MET OR EXCEEDED PEAKER NET MARGIN, EVEN CONSIDERING AN OUTDATED CONE NUMBER, UH, WHICH WE'VE ALSO EXPRESSED SOME COMMENTS ON RECENTLY.
AND WHEN YOU THINK ABOUT YESTERDAY'S WORKSHOP, WE HAVE A MARKET WHERE
[00:45:01]
THERE'S MASSIVE INTEREST IN LOAD INTERCONNECTIONS AND WE ARE GOING TO HAVE TO INCENTIVIZED DEVELOPMENT, UH, FOR GENERATION AND ADDITIONAL CAPACITY.SO SOMETHING IS GOING TO NEED TO CHANGE IN OUR MIND.
UM, AND WE SIGNALED IN OUR PRS URGENCY VOTE ON 1310 THAT IT'S IMPORTANT TO CONSIDER IN ORDER TO PROVIDE A, AN OPTION FOR COMMISSIONS CONSIDERATION AFTER THE RELIABILITY STANDARD ASSESSMENT.
WE'RE EXPECTING TO HAVE TO PROVIDE THAT.
UM, AND WE ALL KNOW HOW LONG MARKET DESIGNS TAKE TO DEBATE.
AND SO I THINK IT'S IMPORTANT WHILE THIS IS IN FRONT OF US, THAT WE, WE SPEND TIME TRYING TO IMPROVE WHAT, WHAT WE SEE IN 1310 AT THIS POINT.
UH, THAT BEING SAID, WE, WE DO NOT THINK 1310 IN ITS CURRENT FORM GUARANTEES ANYTHING AT THIS POINT OTHER THAN A FLAT PRICE ADDER.
AND THE ONLY LEVERS THAT WE CAN INTERPRET THAT WHERE ERCOT AND THE PUC ARE ABLE TO CALIBRATE TO SEND A STRONGER PRICE SIGNAL ARE ADJUSTING TO A HIGHER RESOURCE ADEQUACY PLAN FOR DRS AND MODIFYING THE RELEASE FACTOR.
UH, IT'S NOT QUITE CLEAR TO US YET HOW THESE WILL BE SET AND ON WHAT TIMING, UM, AND IN WHAT BIND LEVEL OF BINDING DOCUMENT THAT THEY'LL LIVE.
UM, SO THAT, THAT CONCERNS US A BIT, UH, DOESN'T DRIVE THE CERTAINTY THAT WE, WE WOULD LIKE TO SEE.
UM, I THINK IF WE WOULD LIKE TO DESIGN A PRODUCT THAT IS SELF-CORRECTING, THERE NEEDS TO BE SOME LINKAGE TO A METRIC LIKE CONE OR PEAKER NET MARGIN THAT CAN ADJUST A DEMAND CURVE OR PRICE FLOORS TO, UH, SEND INVESTMENT SIGNALS WHEN THE MARKET IS SCARCE OR REDUCE PRICE SIGNALS WHEN IT IS, IT IS FAT ON CAPACITY.
UM, YOU KNOW, IF IT'S NOT CALIBRATED APPROPRIATELY, THERE COULD BE A RISK OF OF CREATING A PAYMENT FOR EXTRA RESERVES THAT MAY UNNECESSARILY DAMPEN ENERGY PRICES AND CREATE A COST TO THE MARKET WITHOUT ACHIEVING AN INTENDED RESULT.
UM, BASED ON DISCUSSIONS WE'VE HEARD AT, AT PREVIOUS WORKSHOPS THERE, THERE MAY NOT BE AN APPETITE TO GO THAT ROUTE.
UH, SO LCRA THINKS WE SHOULD SEEK TO IMPROVE WHAT WE SEEK HERE AND MAYBE NOT PERFECT, UH, IF, IF THAT'S THE WILL OF, OF STAKEHOLDERS.
AND THERE'S SOME THINGS THAT WE THINK WE CAN IMPROVE UPON.
UH, ONE IS A RAMPED DEMAND CURVE INSTEAD OF A FLAT DEMAND CURVE.
UH, THAT'S JUST BASIC MARKET PRINCIPLES.
AS YOU, AS YOU GET SCARCE ON SUPPLY THERE, THERE SHOULD BE SOME REFLECTION OF INCREASE IN VALUE.
UH, AGREE WITH SOME OF THE COMMENTS THAT THE IMM HAS MADE, THAT THIS MAY, MAY MAKE MORE SENSE TO SEE AN EXPONENTIAL SHAPE ON THIS CURVE RATHER THAN A LINEAR SHAPE.
UH, WE ALSO THINK THAT, UH, WE NEED SOME ADDITIONAL ANALYSIS TO DETERMINE THE APPROPRIATE CALIBRATION FOR THAT CURVE.
UM, NUMBER ONE, THE PRICE CAP.
I, I'D LIKE BETTER PERSPECTIVES ON, ON WHAT THAT NUMBER SHOULD BE SET ON.
UH, WE'D LIKE TO SEE DIFFERENT SHAPES, UH, OF THE AS DEMAND CURVE AND PARAMETERS THAT FEED INTO THAT AND, AND SOME INDICATION OF HOW THOSE CURVES WOULD AFFECT ENERGY PRICES.
THIS, THIS MEANS ADDITIONAL STUDIES WOULD BE NEEDED IN, IN ORDER FOR US TOGETHER TO COME UP WITH, UH, THE RIGHT RECOMMENDATION.
UH, ANOTHER IMPROVEMENT THAT WE THINK COULD BE MADE IS THAT THE METHODOLOGY THAT SETS THE RELEASE FACTOR PORTION OF THE SERVICE AND, AND, UH, ACTUALLY THE RELI RESOURCE ADEQUACY PLAN FOR THE SERVICE, UH, THOSE SHOULD BE IN A, A BINDING DOCUMENT WHERE STAKEHOLDERS CAN VET AND, AND, UH, AT LEAST HAVE SOME UNDERSTANDING AND CERTAINTY OF WHAT, UH, THAT METHODOLOGY IS.
UH, SO IT CAN'T CHANGE ON A WHIM.
UM, THAT WOULD, THAT WOULD HELP.
AND THEN ADDITIONALLY, IN OUR COMMENTS, UH, WE RECOMMENDED EX EXPLORING ADDITIONAL ALTERNATIVE COST ALLOCATION FOR THE RESOURCE ADEQUACY PORTION OF THE CURVE.
AND THE THEORY BEHIND THIS IS THAT THOSE THAT COME TO THE MARKET WITH A, A BALANCED BILATERAL POSITION OR HAVE ESSENTIALLY DONE THEIR PART IN ENSURING RESOURCE ADEQUACY AND, AND THOSE THAT HAVE NOT, UM, SHOULD PERHAPS SHOULDER MORE OF THE COST OF THE RESOURCE ADEQUACY PORTION OF THE SERVICE.
UH, WE THINK THAT'S SOMETHING THAT SHOULD BE EXPLORED.
AND TO WRAP UP, REGARDLESS OF, OF WHERE WE LAND ON 1310, WE THINK IT'S ESSENTIAL TO IMPROVE THE SCARCITY PRICING IN THE MARKET OVERALL.
UH, WHEN YOU CONSIDER RECENT VOLS STUDY RESULTS THAT INDICATE A MUCH HIGHER VALUE THAN, THAN WHAT IS CONSIDERED IN THE MARKET, UH, THE COMMISSION HAS EXPRESSED THE DESIRE TO, UH, REVIEW CONSERVATIVE OPERATIONS.
UH, WE HAVE A VERY ROBUST EMERGENCY PRICING PROGRAM IN EFFECT NOW THAT WOULD MITIGATE WHAT THE MARKET SAW DURING JURY.
UH, AND WHEN YOU PUT THOSE THINGS TOGETHER, I THINK WE COULD IMPROVE, UH,
[00:50:01]
ENERGY PRICING SIGNALS AND, AND MAY SUPPLEMENT SOMETHING LIKE 1310 TO HELP US GET CLOSER TO, UH, UH, BETTER SIGNALS FOR THE MARKET.UM, I'LL CLOSE WITH THAT AND HAPPY TO TAKE ANY QUESTIONS IF THERE ARE ANY.
YOU HAVE AT LEAST ONE COMMENT.
YEAH, BLAKE, I'M TRYING TO THINK OF HOW TO WORD THIS WITHOUT GETTING THINGS THROWN AT ME.
UH,
ARE, ARE YOU LOOKING AT THIS IN YOUR COMMENTS OR DESIGNED TO TRY TO FIX THIS OR THINGS THAT WE NEED TO CONSIDER TO FURTHER DEVELOP OPTIONS ASSOCIATED WITH THE DRRS? MY FIRST QUESTION, I THINK THIS COULD GO IN MULTIPLE WAYS.
WE, WE COULD SEEK TO FIX THIS, UM, AND MAKE IT PERFECT.
I THINK THAT'S GONNA TAKE A LOT OF DEBATE AND A LOT OF AGREEMENT THAT I DON'T KNOW IS, IS POSSIBLE.
UM, THE SECOND POINT IS, IF WE'RE ABLE TO IMPROVE A PORTION OF THIS, UH, MY UNDERSTANDING AFTER THE RELIABILITY SET ASSESSMENT, THERE WILL BE A MENU OF OPTIONS GIVEN TO THE COMMISSION.
PERHAPS TWO OR THREE ARE CHOSEN TO, TO GET US TO WHERE WE NEED, UH, WE COULD IMPROVE THE DESIGN, NOT PERFECT IN ORDER TO GET CLOSER TO, UH, A MINI PRONGED SOLUTION, PERHAPS.
LET ME, ONE OF, ONE OF THE THING I WANTED TO MAKE SURE I HAD ON THERE, ACTUALLY, WHEN YOU TALK ABOUT DIFFERENT WAYS, DIFFERENT OPTIONS AND EVERYTHING GOING, WHEN YOU HAVE SO MANY THINGS, YOU'RE SUPPOSED TO GET TO ONE ANSWER.
SOMETIMES WE NEVER GET TO THAT ANSWER
SO WHEREAS IF SOMEONE CAME IN WITH ALL OF THEIR LOAD AND WHATEVER THE RESERVE IS, THEN THEY'RE IN GOOD SHAPE AND MAY HAVE A DIFFERING LEVEL THAT THEY'RE GONNA PAY THEN SOMEONE ELSE.
SO YOU HAVE A, BASICALLY YOU'RE THROWING IN A LOW LOAD OBLIGATION PIECE IN THERE THROUGH AN ASSESSMENT OF, OF FEES.
I WOULD, I WOULD CALL IT MORE OF A, A COST ALLOCATION SIMILAR TO RU CAPACITY SHORT IF THAT, IF YOU'RE LOOKING FOR AN ANALOGY THERE.
UM, AND THERE'S MANY WAYS THAT COULD BE SPUN.
IT, YOU KNOW, A PORTION OF THE RESOURCE ADE ADEQUACY COST COULD BE SENT, UH, IN A GREATER PERCENTAGE TO THOSE THAT ARE SHORT ON THAT POSITION AND THE REMAINDER GOES TO LOAD RATIO SHARE.
I THINK THAT'S OKAY FOR DEBATE.
ANY QUESTIONS OR COMMENTS FOR BLAKE? ALL RIGHT, THIS IS GOING SO FAST.
OKAY, NOW WE ARE ON TO THE HEN COMMENTS.
I BELIEVE WE JUST HAVE 13, 10 COMMENTS, BUT I, I THINK A LARGE PART OF THESE WERE REGARDING, UH, THE, THE MODELING AND THE AURORA STUDY.
SO I THINK GORD, WE WANNA MAYBE CONDENSE THAT TO, TO VERY LIGHT DISCUSSION, BUT, BUT LET'S LET SHAMS LAY OUT THE, THE COMMENTS.
UM, SHA SIDIKI, AGAIN WITH CRESCENT POWER REPRESENTING HUNT ENERGY NETWORK ON THIS TOPIC.
SO, UM, YOU KNOW, WE REALLY THINK THAT THE, UH, AURORA STUDY IS A GOOD ONE AND PROVIDES A LOT OF GUIDANCE ON, UM, WHAT DIRECTIONS WE NEED TO HEAD.
SO THE STUDY SHOWED THAT THIS DRS PLUS IS, WAS THE MOST COST EFFECTIVE WAY TO MEET THE RELIABILITY CHALLENGE IN THE AIR CODE MARKET.
UH, THE CHALLENGE IS THAT, YOU KNOW, IF WE INCREASE THE RDC OR OTHER PRICING MECHANISM, THAT'S GREAT.
THAT'LL REDUCE NET CONE, BUT YOU WON'T GET THE LONG DURATION DISPATCHABLE RESOURCES.
AND BY LONG DURATION, WE MEAN FOR LIKE A WINTER STORM EVENT, EVEN FOUR HOURS IN OUR OPINION IS NOT ENOUGH.
UH, FOR LONG WINTER STORM EVENT, YOU NEED AT LEAST EIGHT HOURS, IF NOT LONGER DURATION.
AND THAT'S THE BIGGEST CHALLENGE.
IF YOU LOOK AT THE POWER G STUDY, WHICH ACTUALLY LOOKED AT THE RELIABILITY STANDARD, I KNOW IT'S A PRELIMINARY STUDY, BUT REALLY POINTS TO, UM, WHERE THE ERCOT SYSTEM IS MOST VULNERABLE.
AND THOSE ARE EXACTLY THE WINTER MONTHS, DECEMBER, JANUARY, FEBRUARY.
SO, UM, SO IT'S VERY DIFFICULT BECAUSE THESE, THE FREQUENCY OF THESE EVENTS IS QUITE INFREQUENT, YOU KNOW, A REAL LONG WINTER STORM, BUT THE EFFECTS OF IT CAN BE DEVASTATING AS WE SAW DURING URI.
SO IT'S VERY DIFFICULT TO JUSTIFY INVESTMENT,
[00:55:01]
UM, IN LONG DURATION DISPATCHABLE RESOURCES GIVEN THE, UM, THE FREQUENCY OF THESE EVENTS.SO GIVEN THAT, YOU KNOW, WE LOOKED AT OTHER MECHANISMS OF HOW YOU INCENTIVIZE THESE KIND OF RESOURCES, AND TO US IT ALSO SEEMS JUST LIKE AURORA HAS COME TO THE CONCLUSION THAT DRS IS PROBABLY THE MOST TARGETED AND COST EFFECTIVE WAY TO MEET THAT CHALLENGE.
UM, WE DO SUPPORT 1309 AND 1310 IN CONCEPT.
UH, THE PROBLEM WITH 1310 IS THAT IT DEVIATES QUITE A BIT FROM WHAT AURORA STUDY AND THE RECOMMENDATIONS ARE, UH, ESPECIALLY IN TWO WAYS.
ONE IS HOW YOU, UH, YOU KNOW, WHAT KIND OF A SDC OR HOW YOU PAY FOR THIS SERVICE.
SO THE AURORA STUDY TARGETED THE PAYMENTS TO STRESS HOURS ON THE SYSTEM.
AND IN OUR VIEW AS THE, OUR GEM STUDY SHOWS, YOU KNOW, THOSE ARE THE WINTER, UH, ALMOST THE WHOLE DAY.
SO ONE SIMPLE THING WE WERE RECOMMENDING IS JUST DO THE ALL WINTER MONTHS JUST HAVE ALL YOUR DRS DOLLARS, UH, FOCUSED ON THOSE MONTHS, UM, TO MEET THAT CHALLENGE.
THE PROBLEM WITH THE FLAT $10 ADDER IS THAT, YOU KNOW, A RESOURCE THAT'S AVAILABLE, LET'S SAY 90% OF THE YEAR DURING THE NON-CRITICAL TIMES, YOU KNOW, NOT AVAILABLE DURING THE WINTER, NOT AVAILABLE FOR LONG DURATION, THEY WOULD GET THAT PAYMENT AND THEY WOULD, OUR RELIABILITY WOULD NOT, UM, BUDGET BIT, YOU KNOW, THEY WOULD GET 90% OF THE PAYMENT OF THE DRS PAYMENTS, BUT IT WOULDN'T HELP WITH OUR RELI RESOURCE ADEQUACY ISSUE.
SO WE THINK IT'S VERY IMPORTANT, EVEN WITH PCM, WHEN WE LOOKED AT WHEN DO WE PAY PCM, IT WAS DURING THE MOST, UH, THE TIGHTEST HOURS OF THE, OF THE YEAR.
SO I THINK WHATEVER THE RELIABILITY STUDY COMES UP WITH ARE THE TIGHTEST, UM, YOU KNOW, THE GREATEST RELIABILITY RISK AND THE GREATEST NEED FOR RESOURCE ADEQUACY.
THE PAYMENTS SHOULD BE TARGETED TO THOSE HOURS AND THOSE MONTHS.
SO IN, UM, YOU KNOW, JUST LOOKING AT THE POWER STUDY, YOU COULD ACTUALLY HAVE NO RESOURCE ADEQUACY, UH, DRS FOR THE REST OF THE YEAR EXCEPT THE WINTER MONTHS IF THAT'S WHERE THE PROBLEM IS.
UM, AND THEN OTHER MONTHS ALSO YOU HAVE, YOU KNOW, LIKE SUMMER IS QUITE PREDICTABLE.
YOU HAVE THE SCARCITY PRICING EVERY DAY.
YOU SEE IT IN SUMMER, WHENEVER THERE, THERE'S THE SOLAR RAMP DOWN, YOU SEE THE PRICE SPIKE AND YOU SEE THE INCENTIVES THERE.
AND YOU DON'T NEED LONG DURATION, LIKE A 12 HOUR DURATIONS TO MEET THE SUMMER OR OTHER SEASONS REQUIREMENTS.
THE LONGER DURATION REALLY IS FOCUSED ON THE WINTER STORM WINTER EVENTS.
SO WE FEEL THAT, UM, THE ADCS NEED TO REFLECT THAT, THAT IT SHOULD BE TARGETED JUST TO THOSE HOURS.
AND THE SECOND ASPECT OF THE, UH, AURORA STUDY THAT FOUND THIS TO BE THE MOST COST EFFECTIVE SOLUTION IS THAT IT WAS BASED ON, UH, NET CONE.
SO BASICALLY YOU ESSENTIALLY LOOK AT LAST PREVIOUS YEAR'S NET CONE AND YOU BASE YOUR A SDC FOR THIS YEAR BASED ON, UM, THAT NET CONE VALUE THAT SORT OF, UM, GUARANTEES FOR THIS LONGER DURATION RESOURCES OVER THE LONGER TERM, YOU KNOW, OVER LONG TERM THAT THEY WOULD BE ABLE TO RECOVER THEIR CONE, UH, IN THE MARKET.
SO IT, IT REALLY HELPS WITH THE INVESTMENT SIGNAL THAT WE'RE SENDING TO THE MARKET.
SO I THINK THOSE ARE TWO VERY IMPORTANT ASPECTS OF THE AURORA STUDY AND RECOMMENDATION THAT WEREN'T ACCOUNTED FOR IN 1310.
AND WE THINK WE CAN MAKE ADJUSTMENTS AND WE GIVE THE FORMULAS TO HOW TO MAKE THAT ADJUSTMENT AND STUFF IN ORDER TO ACCOMPLISH THAT IN 1310.
UM, SO WITH THOSE CHANGES, WE WOULD BE VERY SUPPORTIVE OF 1310 AS A MEANS OF MEETING THE RESOURCE ADEQUACY NEEDS OF THE
AND WE REALLY THINK THAT THAT CHALLENGE IS, IS STILL OUT THERE.
IT'S NOT A PROBLEM WE'VE RESOLVED EVEN WITH THE LARGE LOAD GROWTH.
UM, EVEN IF WE SEE SOME OF THE RESOURCES BUILT, IT'S STILL NOT, MIGHT LIKELY AS SHOWN IN THE AURORA STUDY, MIGHT NOT BE ENOUGH TO MEET, UH, THOSE LONG DURATION OUTAGES OR EVENTS IN THE WINTER.
UM, I SEE A QUESTION FROM BETH, BUT I'M GOING TO ASK THAT WE HAVE MORE DIS IF IT'S ABOUT THE DURATION THAT WE DO THAT LATER AND SORT OF THE QUALIFICATION PART AND, AND I'LL LET YOU REVISIT YOUR COMMENTS THEN TOO, AS WELL, SHAMS, BUT, BUT YOU'RE SAYING NO, SO GO AHEAD BETH.
LES, YOU WELCOME TO CUT ME OFF.
BUT, UH, BUILDING ON SEAN'S QUESTION OR POINTING OUT THE FACT THE DIFFERENCES BETWEEN THE, THE CONCEPTS THAT WERE STUDIED IN AURORA AND WHAT WERE PRESENTED IN 1310, AND IF, IF ERCOT IS PROVIDED AN EXPLANATION FOR THAT, I, I'M APOLOGIZE.
IS THAT, CAN I, IS THERE SOME INSIGHT THAT WE
[01:00:01]
SHOULD UNDERSTAND ABOUT KIND OF THE CHANGE FROM THE ASSUMPTIONS THAT WERE BUILT INTO A STUDY THAT I, YOU KNOW, I, I DON'T EXPECT THE AURORA GUYS JUST WENT OFF AND MADE S**T UP.I EXPECT THAT THEY WERE WORKING WITH YOU IN DOING THAT STUDY AND THEN A CHANGE THAT MANIFESTED IN 1310.
WOULD LOVE TO HEAR SOME INSIGHT ON THAT, PLEASE.
TO CLARIFY THE, THE DESIGN OF 1310 WAS VERY MUCH IN, IN FLUX AS AURORA WAS PROCEEDING WITH THEIR, THEIR STUDY.
AND AS YOU CAN IMAGINE, LONG BEFORE THE STUDY CAN BE COM COMPLETED, THERE NEED TO BE ASSUMPTIONS THAT ARE ARE MADE.
AND BECAUSE OF THE, UH, THE UNCERTAIN NATURE ABOUT THE, UM, THE 1310 DESIGN, THERE WERE ASSUMPTIONS THAT YES, WE, WE WORK WITH, UH, AURORA TO SAY HOW CAN WE OVERCOME KIND OF SOME THE MODEL, HOW CAN WE REPRESENT THIS IN A, IN A MODELING WAY THAT IS, UM, THAT IS GOING TO ALLOW THAT MODELING SOLUTION TO CONVERGE ON AN OUTCOME.
AND SO WE, WE MADE SOME, UH, CON WE MADE SOME CONCEPTUAL DECISIONS TOGETHER RECOGNIZING THAT IT WAS NOT GOING TO BE REFLECTIVE OF THE ULTIMATE 1310 DESIGN BECAUSE THAT WAS STILL UNDER DEVELOPMENT.
AND SO THE, THE, THE DIFFERENCE BETWEEN THE TWO WE FELT WAS STILL DIRECTIONALLY CONSISTENT EVEN THOUGH THAT THE MEANS OF, OF HOW IT WAS, UH, MODELED FOR OR REPRESENTED FOR, FOR MODELING PURPOSES WAS GONNA BE DIFFERENT THAN WHAT WE'VE, WHAT WE'VE EXPRESSED HERE TODAY.
BUT IT'S CERTAINLY THERE ARE MEANS OF TRYING TO ACHIEVE THE, THE, THE SAME END THROUGH AN ANCILLARY SERVICE AND, UM, AS A, AS A COMPLIMENT WITHIN THE, UH, E ENERGY MARKET.
ARE YOU GOOD, BETH? UH, I UNDERSTAND WHAT HE TOLD ME.
UM, ANY OTHER QUESTIONS OR COMMENTS FROM SHAMS AND SHAMS? YEAH, I THINK WE CAN REVISIT IF YOU WANT TO GO INTO ANY MORE DETAIL ON THE, THE SORT OF DURATION QUALIFICATIONS.
UM, WHEN WE GET TO THE NEXT SECTION, WE ARE GOING TO DO A, A LITTLE SWITCH AND WE'RE GOING TO GO TO TCPA COMMENTS NOW.
UM, AND I, I THINK THEY ARE FINE TO MAKE SENSE HERE.
AND, AND MICHELLE, SAME THING AS, AS BLAKE, IF YOU WANT TO DO 13, 10 AND AND 1309 BOTH, I THINK THAT MAKES SENSE.
SO WE, WE HAVE TCPA AND THEN WE'LL HAVE TIEC ON, ON DECK.
UM, MICHELLE RICHMOND, TCPA, UH, WE FILED COMMENTS ON 1309 AND 1310 AND, AND I CAN MAKE THIS RELATIVELY QUICK 'CAUSE WE ESSENTIALLY SAID DITTO TO A LOT OF WHAT LCRA SAID.
UM, I THINK THE FIRST THING I I'D LIKE TO SAY IS, YOU KNOW, AS FAR AS 1309 WE'RE, WE ARE FOR THINGS THAT REDUCE R UM, SO TO THE, THE EXTENT THAT THAT IS ACCOMPLISHED, WE THINK THAT IS A GOOD THING.
UM, ON 1310, I WILL TELL YOU WE DO NOT HAVE AN A POSITION ON 1310 AT THIS POINT.
OUR COMPANIES ARE STILL EVALUATING THAT AND, AND WORKING THROUGH THOSE DETAILS.
UM, WHAT WE DO HAVE A VERY STRONG POSITION ON IS THAT WE HAVE A RESOURCE ADEQUACY PROBLEM AND A RESOURCE ADEQUACY NEED.
UM, WE HAVE BEEN PRETTY CLEAR ABOUT THAT FOR MANY YEARS NOW, AND THERE ARE NUMEROUS STUDIES THAT CONTINUE TO POINT TO OR HAVING A RESOURCE ADEQUACY PROBLEM.
UM, AND THAT WAS JUST RELEASED LAST WEEK AND IT SHOWS THAT ADA IS MOVING TO HIGH RISK IN TERMS OF RESOURCE ADEQUACY PROBLEMS AND RELIABILITY PROBLEMS. AND SO OUR COMPANIES, UM, HAVE BEEN RELATIVELY AGNOSTIC AS TO HOW YOU GET THE SOLUTION TO THOSE ISSUES.
UM, AND IF YOU LOOK BACK, EVEN GOING BACK TO 2021, YOU KNOW, THE VARIOUS OPTIONS THAT WERE LAID OUT TO THE COMMISSION, WE THOUGHT MANY OF THEM COULD WORK.
UM, WHEN THE COMMISSION CHOSE ITS OPTION TO MOVE FORWARD, WE SUPPORTED THAT.
UM, I THINK WE ARE LOOKING AT THIS THAT THERE ARE MANY DIFFERENT WAYS YOU CAN SOLVE THE RESOURCE ADEQUACY PROBLEM.
UM, BUT I THINK IT'S VERY CLEAR THAT WE NEED LONG TERM INVESTMENT IN DISPATCHABLE GENERATION.
UM, WE NEED LONGER DURATION RESOURCES.
UH, AND THE MARKET IS NOT SIGNALING THAT.
UM, AND SO WE NEED TO LOOK AT HOW WE GET THAT OR WE'RE GOING TO BE IN A REAL PICKLE.
AND, AND I THINK OUR OVERARCHING CONCERN IS, I THINK EVERYBODY IN THIS ROOM SUPPORTS A COMPETITIVE MARKET, AND OUR GOAL IS TO MAKE SURE WE CONTINUE TO HAVE A COMPETITIVE MARKET.
AND SO, UM, WE, WE ARE HAPPY TO WORK WITH ERCOT ANY STAKEHOLDERS ON, YOU KNOW, HOW
[01:05:01]
TO GET CONSENSUS AND, AND GET A SOLUTION THAT ACHIEVES THOSE THINGS.UM, BUT WE, WE DO NOT THINK THAT TAKING THE RESOURCE ADEQUACY DISCUSSION OFF THE TABLE IS, IS A WISE MOVE AT THIS POINT.
AND WE WOULD SUPPORT CONTINUING TO HAVE THOSE CONVERSATIONS.
THEY CONTINUE TO BE VERY RELEVANT AND, AND WE THINK THEY'RE IMPORTANT.
QUESTIONS OR COMMENTS FOR MICHELLE? JOHN, DO YOU HAVE A QUESTION OR ARE YOU JUST READY? OKAY.
I THINK THESE ARE, YOU JUST DID 13, 10 COMMENTS.
SO WE'LL DO THOSE AND THEN WE WILL DO THE A-P-A-A-C-P COMMENTS, JUST, JUST THEIR COMMENTS ON 13, 10 AFTER THAT.
UM, WE FILED COMMENTS IN OPPOSITION TO NPR 1310.
WE FEEL THAT DEBATING THE MERITS OF THE NPR AT THIS TIME IS A WASTE OF ERCOT AND STAKEHOLDERS TIME AND RESOURCES BECAUSE THE PROPOSAL HAS NOT BEEN DETERMINED BY THE COMMISSION TO BE NECESSARY EFFECTIVE OR THE MOST EFFICIENT APPROACH TO ADDRESS ANY POTENTIAL RESOURCE ADEQUACY CONCERNS.
OTHER STAKEHOLDERS HAVE CLAIM THAT ERCOT NEEDS A RESOURCE ADEQUACY TOOL, BUT THE PC'S RULES GIVE THE PUC NOT ERCOT AUTHORITY TO IDENTIFY WHOLESALE MARKET DESIGN CHANGES TO MEET ITS RELIABILITY GOALS.
NPR 1310 FRONT RUNS THAT RELIABILITY ASSESSMENT PROCESS BY PREDETERMINING A SIGNIFICANT MARKET DESIGN CHANGE, UH, CHA THAT CHANGES ARE NEEDED TO DRRS AS A VEHICLE TO MAKE FIXED CAPACITY PAYMENTS TO CERTAIN GENERATORS.
THE COMMISSION SHOULDN'T BE PIGEONHOLED INTO REPURPOSING DRS AS A RESOURCE SUFFICIENCY TOOL JUST BECAUSE STAKEHOLDERS HAVE BEEN FORCED TO DEVELOP IT.
UNDER NPR 1310, NOTABLY MOVING FORWARD WITH 1309 COULD STILL PROVIDE OPTIONALITY FOR MAKING D-R-R-S-A RESOURCE ADEQUACY TOOL.
NPR 1310 IS BUILT ON TOP OF 1309 AND THE CONCEPTS IN THE NPRR COULD BE ADDED AT A LATER TIME WITHOUT SIGNIFICANT WORK.
TIC IS ALSO CONCERNED THAT THIS CONCEPT COULD CHILL MARKET ACTIVITY.
AS WE'VE SEEN IN THE PAST WHEN THERE ARE CONVERSATIONS AROUND PCM COMPANIES WAITED TO DEVELOP OR FINALIZE THEIR PROJECTS UNTIL THERE WAS MORE CERTAINTY TO AVOID CREATING ADDITIONAL INSTABILITY, IT WOULD BE BEST TO WAIT UNTIL AFTER THE COMMISSION PROVIDES DIRECTION BASED ON THE RESULTS OF ITS ANALYSIS.
UM, ON THE MERITS OF NPR 1310, THE PREDETERMINED $10 PAYMENT IS NOT MARKET BASED AND APPEARS TO BE AR AN ARBITRARY WEALTH TRANSFER BETWEEN CUSTOMERS IN A CERTAIN SUBSET OF GENERATORS.
THERE'S BEEN NO ANALYSIS OR DATA TO SUPPORT THAT THE PAYMENT WILL ELICIT ADDITIONAL INVESTMENT, IMPROVE RELIABILITY, OR DO ANYTHING BUT ENRICH EXISTING GENERATORS AND SHIFT RISKS FROM LARGE AND SMALL CONSUMERS TO, OR SHIFT RISKS FROM GENERATORS TO LARGE AND SMALL CONSUMERS.
UH, IT IS ALSO LIKELY THAT 1310 COULD ACTUALLY HURT THE SYSTEM'S RELIABILITY AND UNDERMINE MARKET SIGNALS BY SHIFTING REVENUES OUTSIDE OF PERIODS OF RELIABILITY, WHICH ANDREW TALKED ABOUT.
RATHER THAN DEBATING 1310, IT WOULD BE BEST AND MORE PRUDENT TO PROCEED WITH 1309 AND AWAIT THE COMPLETION OF THE RELIABILITY AND ASSESSMENT AND ADDITIONAL ANALYSES BEFORE DETERMINING WHETHER ANY ADDITIONAL 1310 STYLE, UM, FEATURES ARE NECESSARY.
UM, SO PROBABLY A SIMILAR QUESTION TO ONE BLAKE HAD EARLIER FOR, FOR ANDREW, AND, AND THAT IS, YOU KNOW, THE, THE, I'LL PREFACE THIS BY SAYING THE COMMISSION DID GIVE FEEDBACK TO ERCOT THAT THEY SHOULD DESIGN DRS WITH THE OPTION TO HAVE IT BE ABLE TO SUPPORT RESOURCE ADEQUACY.
AND I BELIEVE THE INTENT THERE WAS SO THAT WE DON'T HAVE TO GO THROUGH AN ENTIRE PROCESS AGAIN IN THE BACK END.
SO HAVE THAT FLEXIBILITY BUILT IN NATIVELY.
UM, SO I HEAR YOU, I HEAR YOU SAYING THAT WE SHOULDN'T DO THAT, BUT I'M NOT SURE WHY THAT WE SHOULD NOT DO THAT.
IF WE COULD SAY, JUST SET THE RELEASE FACTOR AT ZERO, ASSUMING THAT THAT'S EVEN, YOU KNOW, A PATH THAT THE COMMISSION WOULD SUPPORT GOING DOWN.
UM, AND IF NOT, THEN WHAT IS, UH, YOUR PROPOSED ALTERNATIVE PATH FOR HAVING, YOU KNOW, A SHORT LIST OF RESOURCE ADEQUACY SUPPORT MECHANISMS, SHOULD THEY BE NEEDED? YEAH.
UH, HAVING TO ANSWER KIND OF, I, I THINK WHAT I HEARD TWO QUESTIONS IN THERE.
UM, SO, UM, THE, THE FIRST ONE, UH, WHICH NOW MIGHT IT ESCAPED ME, THE, THE SECOND ONE ABOUT, UM, THE, THE COMMISSION'S ORDER.
I THINK YOU'RE SLIGHTLY MISCHARACTERIZING WHAT IT SAID.
I WENT AND LOOKED AT THE LANGUAGE TODAY AND IT SAYS, UM, THAT THEY ERCOT SHOULD, OR THAT DRS SHOULD BE DESIGNED IN A WAY THAT CAN MEET, RELY OR THE,
[01:10:01]
UH, RESOURCE ADEQUACY, RESOURCE ADEQUACY CONCERNS WITHOUT SIGNIFICANT WORK AT THE COMMISSION'S OPEN MEETING.KEITH COLLINS SAID THAT THE DIFFERENCE BETWEEN 1309 AND 13 0 13 10 DOES NOT TAKE SIGNIFICANT WORK.
AND SO IT SEEMS LIKE 1309 WOULD MEET THAT COMMISSION DIRECTIVE.
I THINK THE SECOND PART OF YOUR QUESTION, UM, WAS, I DON'T REMEMBER WHAT IT WAS.
I I ASK REALLY LONG-WINDED, UH, QUESTIONS.
SO THAT'S THAT'S TOTALLY FAIR.
THE SEC THE SECOND PART WAS, UM, WAS WHAT'S THE ALTERNATIVE, RIGHT? AND SO THE COMMISSION RULE HAS A RULEMAKING PROCESS OR PASSED A RULE THAT OUTLINES A PROCESS FOR DETERMINING WHAT THE RESOURCE ADEQUACY TOOLS COULD BE.
UH, I DON'T WANNA FRONT RUN THAT.
I DON'T WANNA WASTE OUR TIME, ERCO T'S TIME, HOW THAT PROCESS WORKS.
ERCO T'S STILL IN THE PROCESS OF COMPLETING WHAT THOSE FACTORS ARE GONNA GO INTO IT.
STAKEHOLDERS GET TO COMMENT ON WHAT THOSE FACTORS ARE.
AFTER THAT, THE IMM WILL REVIEW IT, PROVIDE ITS RECOMMENDATIONS.
AFTER THAT STAFF WILL ALSO REVIEW IT AND PROVIDE THEIR RECOMMENDATIONS.
STAKEHOLDERS WILL ALSO, AGAIN, GET TO COMMENT.
SO MOVING FORWARD WITH NPR 1310 RIGHT NOW, FRONT RUNS ALL OF THAT.
WELL, SO I DO WANNA BACK UP THEN TO YOUR, YOUR RECOLLECTION OF KEITH'S COMMENTS AT, AT THE OPEN MEETING.
AND KEITH, JUMP IN IF I, IF I IF PUT WORDS IN YOUR MIND, KEITH, I DON'T, KEITH WANTS TO HAVE GORD RESPOND TO THAT
THE, THE, AND I CAN CLARIFY IF IT WASN'T CLEAR AT THE COMMISSION, I'D HAVE TO LOOK AT THE TRANSCRIPT, BUT I CAN MAKE IT CLEAR NOW THAT, UM, THE INCREMENTAL COST OF DOING 1310, ESSENTIALLY AT THE SAME TIME AS 1309 IS, IS ESSENTIALLY, YOU KNOW, VERY INCREMENTAL.
HOWEVER, IF THERE IS A SUBSTANTIAL DELAY BETWEEN WHEN 1309 AND SOME FUTURE 1310, THE COST CAN BE MORE SIGNIFICANT.
AND THE EXAMPLE OF THAT IS, LET'S SAY YOU'RE BUILDING A HOUSE AND YOU'RE POURING THE FOUNDATION, RIGHT? AND YOU WANNA PUT A PATIO IN THE BACK, YOU GOT THE TRUCK, YOU GOT THE GUYS, YOU GOT EVERYBODY.
WHY DON'T YOU JUST POUR THE LITTLE BACK, YOU KNOW, PATIO AREA, BUT THEN YOU DECIDE IN THE FUTURE THAT YOU WANT TO DO THAT.
BUT YOU GOT A FENCE, YOU GOTTA KNOCK OVER THE FENCE, YOU GOTTA DRIVE THE TRUCK IN.
AND SO INCREMENTAL COST IF YOU DO IT, UH, ESSENTIALLY SIMULTANEOUSLY.
BUT IF THEY'RE SEPARATED BY ANY, YOU KNOW, MEANINGFUL TIME, IT'S GONNA COST MORE.
IS IT SIGNIFICANTLY MORE, OR IS IT JUST SLIGHTLY MORE, OUR SENSE IS THAT IT'S GOING TO, IT'S GONNA COST MORE.
AND THIS IDEA OF INCREMENTAL IS, IS IT IS VERY INCREMENTAL.
BUT, BUT AGAIN, UH, YOU KNOW, I THINK MY EXAMPLE SPEAKS FOR ITSELF.
WELL, AND THE POINT THAT I WAS GONNA, I'M GLAD I DIDN'T PUT WORDS IN YOUR MOUTH 'CAUSE THOSE WEREN'T THE WORDS THAT
BUT THE, THE POINT I WAS GONNA MAKE IS, YOU KNOW, THE INCREMENTAL COST IS NOT JUST THE PROJECT COST, BUT IT'S ALSO THE COST OF, YOU KNOW, THIS KIND OF MEETING, THE, THE SE SEQUENCE OF MEETINGS AND, UH, SIGNIFICANT HOURS THAT GO INTO STAKEHOLDER REVIEW AND PROVIDING COMMENTS AND HASHING THINGS OUT AND PUTTING TOGETHER POWERPOINT PRESENTATIONS AND WHEN THE WATER'S NOT WORKING AND THE WATER'S NOT EVEN WORKING.
SO THAT, THAT WAS THE MAIN POINT, WAS THERE, IS THERE'S DIFFERENT LEVELS OF COST THAT YOU CAN SAVE IN TRYING TO AT LEAST PUT THE OPTION TO BUILD SOMETHING IN LATER.
I GUESS MY POINT OR RESPONSE WOULD JUST BE THAT, UM, WHILE THERE MIGHT BE AN INCREMENTAL COST OR A, A MORE COST ASSOCIATED WITH IT, IF THERE'S A COMMISSION DIRECTIVE TO DO SOMETHING OR ORDER TO DO SOMETHING, I THINK THE STAKEHOLDERS KNOW HOW TO MOVE THROUGH THAT QUICKLY AND THAT COST AND THAT TIME WOULD BE SIGNIFICANTLY REDUCED IF IT WAS BY THE ORDER OF THE COMMISSION VERSUS, UM, TRYING TO, WE FLUSH OUT THIS IDEA RIGHT NOW.
I HAVE A, I HAVE A QUICK QUESTION, UM, TO THIS CONVERSATION.
THE IMPACT ANALYSIS OR ANALYSIS THAT WE HAVE WITH 1309 AND 1310, ARE THOSE BASED ON IMPLEMENTATION TOGETHER OR SEPARATE IMPLEMENTATION? THEY'RE BASED ON A CONCURRENT IMPLEMENTATION.
SO THIS IS A LATER DISCUSSION POINT, BUT IF WE ARE TALKING ABOUT PUTTING THEM ON SEPARATE APPROVAL TRACKS, IT WOULD HAVE TO GO BACK TO, TO PRS NO MATTER WHAT, TO, TO REFER TO WMS OR, OR WHEREVER THEY WANT TO REFER AT THAT TIME.
COULD TROY OR SOMEONE GIVE, GIVE US A BROAD IDEA OF DIFFERENCE IN,
[01:15:01]
IN PRICE, DIFFERENCE IN COST? I THINK WE CAN DO THAT.GORD, DID YOU HAVE MORE YOU WANTED TO RESPOND TO THIS CONVERSATION? THERE WERE A COUPLE OF POINTS THAT I WAS GONNA SAVE UNTIL THE END AS, AS PART OF A WRAP UP, BUT, UH, I THOUGHT THIS MIGHT BE A GOOD TIME JUST GIVEN THAT THE CONVERSATION THAT THAT WAS JUST HAD.
AND, UH, KEITH HAS ALREADY DEFENDED HIS HONOR, SO I DON'T NEED TO, TO, UH, TO ADDRESS THAT DIRECTLY.
BUT THERE ARE, THERE ARE TWO POINTS THAT, THAT I WANNA MAKE.
AND, AND I, WE'VE HEARD FLAVORS OF THE, THE FIRST POINT FROM A NUMBER OF PEOPLE AROUND THE TABLE AND IN THE ROOM TODAY, AND THAT IS THAT THE DEVELOPMENT OF NPRR 1310 WITH THE CAPABILITY TO SUPPORT A RESOURCE ADEQUACY MANDATE IS IN DIRECT RESPONSE TO THE GUIDANCE FROM THE PUC TO DEVELOP SUCH A MECHANISM WITHIN DRS.
AND SO I THINK FOR THAT REASON, IT'S VERY APPROPRIATE THAT WE, THAT WE CONTINUE THE, THE DISCUSSION ON 1310, SO THAT WE CAN BE RESPONSIVE TO THAT, THAT THE MANDATE THAT WAS, WAS GIVEN TO US AND WHY IT'S IMPORTANT, I THINK, TO HAVE THAT CONVERSATION NOW AND NOT WAIT UNTIL AFTER THE CONCLUSION OF THE RELIABILITY STANDARD ASSESSMENT, IS BECAUSE IN ORDER TO REFLECT THE CONTRIBUTION OF 1310 AS AN OPTION TO ADDRESSING ANY OF THE FINDINGS, UH, FROM THAT, UH, FROM THAT RELIABILITY STANDARD ASSESSMENT, WE NEED TO KNOW THAT THE SORTS OF THINGS THAT WE'RE TALKING ABOUT TODAY, WHAT DOES THE DEMAND CURVE LOOK LIKE, UH, HOW IS IT INTEGRATED WITH, UH, OTHER ENERGY AND, AND OTHER ANCILLARY SERVICES? AND WITH THAT INFORMATION THAT COMES OUT OF THIS STAKEHOLDER PROCESS, THAT'S IMPORTANT INFORMATION FOR US TO HAVE UPFRONT TO, TO REFLECT IN OUR, OUR OVERALL STATEMENT OF THOSE, UH, STATEMENT OF THOSE OPTIONS SO THAT WE CAN CONCURRENTLY PRESENT BOTH THE RESULTS OF THE RELIABILITY STANDARD ASSESSMENT AND, UH, UH, A SUITE OF, OF OPTIONS, SOME OF WHICH MAY BE COMPLIMENTARY AND SOME OF WHICH MAY BE EXCLUSIVE TO ONE ANOTHER TO HELP, UH, ADDRESS THAT.
BUT WE, WE HAVE SEEN IN, IN PREVIOUS STUDIES ALREADY, WHETHER IT WAS THE ANALYSIS, UH, AROUND, UH, PCM OR IN THE AURORA STUDY ITSELF, THAT IT APPEARS AS THOUGH IN FUTURE YEARS THERE'S A RESOURCE ADEQUACY GAP.
AND SO I THINK IT BEHOOVES US TO, TO MAKE SURE THAT WE HAVE, WE'VE DEVELOPED THOSE, THOSE OPTIONS AS, AS MUCH AS WE CAN GOING INTO THAT, UH, ASSESSMENT TO MAKE, UH, A CREDIBLE ASSERTION ABOUT THE DEGREE TO WHICH DRS CAN BE ONE OF THOSE OPTIONS.
THANK YOU KA AND SHANE THOMAS, SHELL, UM, I GUESS THIS IS, UH, GET A TIME THAT THEY NEED TO SPEAK TO SOME OF OUR THOUGHTS ON THIS, BECAUSE IT GOES IN, IN STEP WITH THE TIEC AND WITH THEIR, SOME OF THEIR CONCERNS AS WELL THAT THEY MENTIONED, YOU KNOW, THE, THE ABILITY FOR THIS TO GET NEW GENERATION ONLINE AND KIND OF THE IMPACT OF THIS, UM, ONE THING THAT WE'RE CONCERNED ABOUT IS GOING THROUGH AND PUTTING THIS IN PLACE NOW BEFORE THE, THE FACTS, UH, THE BEFORE EVERYTHING'S KNOWN IS THAT ITS EXISTENCE WILL UNDOUBTEDLY HAVE AN EFFECT ON THE FORWARD MARKETS.
I THINK WE'RE PUTTING A LITTLE BIT OF UNCERTAINTY OUT THERE AT THIS POINT WITH THE, THE, SO MUCH UNKNOWN ABOUT IT, AND NOT THAT THERE'S, I MEAN, THERE'S STILL A LOT OF UNKNOWNS ABOUT, UH, 1309, BUT
AND WE'RE ALSO A LITTLE KIND OF WEARY OF THE, THE IMPACTS MENTIONED, UM, BY THE IMM AND HOW THIS WILL INTERPLAY WITH THE, WITH, UH, RESOURCES BEING ONLINE IN REAL TIME AND SUPPRESSING THOSE PRICES AND CREATING A SORT OF FEEDBACK LOOP WHERE YOU SLOWLY PUT MORE AND MORE AND MORE OF YOUR REVENUE INTO THIS DRS PLUS SERVICE.
AND IT BECOMES, UH, UH, WHAT DRIVES THE MARKETS INSTEAD OF THE OTHER TRADITIONAL ENERGY AND ANCILLARY SERVICE PRODUCTS THAT ARE OUT THERE, UM, YOU KNOW, THAT HAVE A REAL VALUE THAT WE SEE IN REAL TIME, UM, FOR RELIABILITY.
UM, SO I THINK, UM, THERE, YOU KNOW, ARE WAYS WE CAN EXPLORE TO ACCEPT FIXED DRS PLUS, BUT I DO THINK IT'S A LONGER CONVERSATION THAT NEEDS TO BE HAD, UH, AROUND THAT, AND THERE'S, UM, SOMETHING WE CAN KEEP WORKING ON.
UM, BUT AS FAR AS NEEDING TO HAVE IT DONE BEFORE, UM, THE RELIABILITY STANDARD PART IS FINISHED, I DON'T, I DON'T NECESSARILY THINK THAT'S THAT'S TRUE BECAUSE WE, AS PART OF THE RELIABILITY STANDARD ASSESSMENT, ERCOT CAN TAKE WHAT'S OUT THERE AND ALSO LIKE PUT THOSE POTENTIAL IMPACTS INTO THEIR ANALYSIS AND WE, WE CAN STILL ANALYZE THIS AND WE CAN STILL, UH, WORK TO BUILD A BETTER AND BETTER PRODUCT VERSUS TRYING TO RUSH AND GET SOMETHING THROUGH REALLY QUICKLY.
[01:20:01]
BUT I DON'T THINK WE SHOULD STOP, YOU KNOW, HAVING, HAVING THIS CONVERSATION.I THINK THAT IT'S SOMETHING THAT'S GOING TO TAKE A LOT OF WORK FROM ALL THE SMART PEOPLE IN THIS ROOM AND ONLINE.
UM, BUT WE KIND OF NEED MORE CERTAINTY FOR THE MARKET AND WITHOUT, YOU KNOW, FORWARD CERTAINTY, YOU'RE NOT GONNA GET ANY SORT OF LARGE GENERATION BUILT.
ANY OTHER COMMENTS ON THE TIC COMMENTS? OKAY.
I THINK NEXT IS A PA COMMENTS, KEN DONAHUE WITH THE ADVANCED POWER ALLIANCE.
I THINK I'LL START OUT ON 1309 REAL QUICK.
UM, OUR BIGGEST POINT THERE IS WE THINK 1309 SHOULD BE TECHNOLOGY NEUTRAL AND INCLUDE ENERGY STORAGE RESOURCES.
UM, I THINK THERE'S GONNA BE MORE TECHNOLOGIES COMING OUT THERE, AND I DON'T THINK WE SHOULD TRY TO EXCLUDE 'EM AT THIS TIME.
ESPECIALLY, UH, WE GOT OVER 17,000 MEGAWATTS OF ENERGY STORAGE RESOURCES INSTALLED ON THE GRID NOW, AND IT'S CONTINUING.
IT'S A UNIQUE TOOL, UM, FAST RESPONSE DISTRIBUTED ACROSS THE WHOLE GRID, NOT ALL IN ONE PLACE.
UM, SO I JUST WANNA MAKE THAT, THAT STATEMENT NOW IN 1310.
I THINK WE'RE JUST GONNA ECHO PRETTY WELL WHAT EVERYBODY ELSE IS SAYING HERE.
I THINK THERE NEEDS TO BE MORE ANALYSIS AND MODELING AROUND THIS BEFORE WE GO TOO MUCH FURTHER.
UM, IT, IT'S KINDA LIKE, YOU KNOW, YOU TALK ABOUT BUILDING A HOUSE OR BUILDING A PATIO, WELL, OKAY, THAT'S LIKE ME, UH, BUILDING A TRANSMISSION LINE WITHOUT DOING ANY MODELING.
WE HAVE TO GO THROUGH A NUMBER OF STEPS BEFORE WE PUT THAT TRANSMISSION LINE IN SERVICE TO KNOW WHAT THE BENEFITS ARE, OR ARE WE CREATING A NEW PROBLEM? WE CALL THAT WHACK-A-MOLE PLANNING IF YOU'RE CREATING NEW ONES.
SO RIGHT NOW, WE THINK THERE NEEDS TO BE MORE MODELING AND ANALYSIS BEFORE WE GO FORWARD WITH 1310.
UM, AND WE WILL, WE'LL GIVE YOU ANOTHER OPPORTUNITY TO SPEAK ABOUT THE ESR PARTICIPATION ON 1309.
SO SHAMS, IF, IF YOUR QUESTION IS ABOUT THAT, LET'S SAVE THAT, BUT IF NOT, GO, GO AHEAD PLEASE.
IT'S AROUND THE DISCUSSIONS THAT WERE HAPPENING BEFORE, I GUESS, UM, ESPECIALLY THE IMM POINT OF OVERCOMMITMENT OF RESOURCES, I THOUGHT THE TWO HOUR STARTUP, AND THIS IS A QUESTION TO ERCOT, IS A QUALIFICATION, UM, DETERMINATION.
SO IF YOU CAN'T START UP IN TWO HOURS, THEN YOU WOULDN'T EVEN QUALIFY TO PROVIDE DRS.
SO IN THAT CASE, A THREE HOUR START UNIT JUST BY STAYING ONLINE SHOULDN'T BE ALLOWED TO PROVIDE DRRS.
IS THAT NOT RIGHT? I THINK, UH, OUR UNDERSTANDING OF THE STATUTE LANGUAGE IS WHEN THE, IS OFFLINE.
UM, THEN, YEAH, IT, UH, REQUIRES THAT TWO HOUR START.
SO WITHIN THE TWO HOUR START, UH, PERIOD, UM, MAYBE I LOOK TO, UH, MATT TO JUMP IN ON THE LEGAL INTERPRETATION, BUT NOT SURE THAT IT APPLIES TO UNITS WHICH ARE ALREADY ONLINE.
UM, I THINK IT ALSO MENTIONS THAT THE DS SHOULD BE CO OPTIMIZ WITH, UH, YOU KNOW, IN DED AND REAL TIME.
SO WE WOULD NATURALLY INCLUDE ANY UNIT WHICH IS, UH, ALREADY ONLINE.
WELL, DEFINITELY WE WON'T INCLUDE IRRS OR ANYTHING.
SO IT'S A QUALIFICATION ISSUE.
SO IF GREATER THAN TWO R ISN'T QUALIFIED, YOU WOULDN'T CO OPTIMIZE IT, JUST LIKE YOU WOULDN'T CO OPTIMIZE IRRS OR ANY OTHER CAPACITY IN THE SYSTEM.
SO, UM, I GUESS I DON'T REMEMBER.
MAYBE MATT CAN CLARIFY, BUT I DON'T REMEMBER ONLINE OFFLINE DISTINCTION.
AND FOR BATTERIES, ALSO, IT'S SAID FOUR HOURS AT HSL.
IT DOESN'T MATTER WHAT YOU'RE DOING CURRENTLY.
YOU KNOW, YOU HAVE TO HAVE THE CAPABILITY IN ORDER JUST TO QUALIFY TO PROVIDE DRS, BUT, UH, COULD YOU EXPAND ON THAT? UH, MATT, I, I MEAN, I, I THINK I AGREE WITH WHAT ANUM JUST SAID, WHICH IS THAT, SO TO BE CLEAR, THE STATUTE SAYS THAT IT MUST BE ONLINE AND DISPATCHABLE NOT MORE THAN TWO HOURS AFTER BEING CALLED ON FOR DEPLOYMENT.
SO IF, UM, IF A THREE HOUR START TIME RESOURCE IS ALREADY ONLINE, THEN UM, WHY SHOULD IT NOT BE ALLOWED TO PARTICIPATE UNDER THAT STATUTORY LANGUAGE? IT'S ONLINE AND DISPATCHABLE, UM, WITHIN TWO HOURS OF BEING CALLED ON BECAUSE IT'S ALREADY ONLINE.
SO BASICALLY, IF YOU'RE ONLINE, ANY CAPACITY THAT YOU CAN RAMP TO IN TWO HOURS, YOU'D BE CAPABLE OF PROVIDING DRS FOR THAT.
IS THAT HOW YOU'RE READING IT? THAT IS, THAT IS HOW THE NPRR IS WRITTEN.
IT'S, IT'S THE MINIMUM OF THE CAPACITY YOU CAN GET TO IN TWO HOURS OR YOUR HSL.
AND I THINK WE TALK ABOUT THAT IN THE QUALIFICATIONS SLIDES AS WELL.
[01:25:01]
TO THAT DIRECTLY THEN.YEAH, LET'S SAVE THAT CONVERSATION.
MATT, DID WE GET YOUR COMMENTS? DID I PUT YOU IN THE QUEUE? UH, YES, THAT WAS ALL.
ANY OTHER QUESTIONS OR COMMENTS? THAT WAS THE A-C-P-A-P-A-C-P COMMENTS.
LET'S GO TO TIBA COMMENTS IF SOMEBODY IS HERE TO ARE ONLINE TO SPEAK TO THOSE.
AND AGAIN, LET'S DO JUST THE 13, 10 COMMENTS AND NOT YOUR 1309 COMMENTS YET.
THIS IS, UM, JULIANA, GIANNI COMING IN FROM CALI'S LAPTOP ON BEHALF OF TIBA.
WE DON'T HAVE ANYTHING REALLY NEW TO ADD TO THIS CONVERSATION.
WE'RE IN AGREEMENT WITH, UM, MOST OF THE COMMENTS THAT HAVE BEEN MADE EARLIER THAT WE ARE AGAINST 1310.
UM, YEAH, WE SUBMITTED BRIEF COMMENTS THAT BASICALLY, YOU KNOW, ECHOED A LOT OF THE VOICES IN THIS ROOM ALREADY, SO THANK YOU.
OKAY, LET'S GO TO, UH, SIERRA CLUB.
AND SAME THING, CYRUS, IF YOU'RE ON JUST THE 13, 10 COMMENTS, NOT THE 1309 COMMENTS YET, DO WE HAVE CYRUS OR SOMEONE ELSE FROM SIERRA CLUB? I DUNNO.
HEY, SEE, I DON'T TOTALLY MAKE THINGS UP.
YEAH, TODAY, TODAY YOU WERE DOING ACTUAL WMS WORK.
DO WE HAVE SOMEBODY ON FOR TGA? JOHN TOLD ME WE WOULD, JOHN RESTS TOLD ME WE WOULD TGA COMMENTS.
SO I, I CAN SPEAK TO THE TGA COMMENTS IF MATT PATTERSON IS NOT, UM, IS NOT CONNECTED AT THE MOMENT.
UH, AGAIN, WE'RE JUST ECHOING A LOT OF THE SAME COMMENTS.
THE, UM, YOU KNOW, I, I APPRECIATE THE FACT THAT THE COMMISSION HAS TRIED TO MAINTAIN SOME LEVEL OF FLEXIBILITY MOVING FORWARD, BUT I THINK THE TEXO COMMENTS FOCUS ON THE FACT THAT THE, THE DESIGN OF 1310 APPEARS TO BE IN CONTRADICTION TO WHAT'S IN ACTUAL LEGISLATIVE STATUTE.
UH, AND SO, YOU KNOW, WE WOULD, WE WOULD ADVOCATE FOR PUTTING 1310 ASIDE MOVING FORWARD WITH 1309 EXPEDITIOUSLY AS THE LEGISLATURE INTENDED.
MATT OR ANYONE FROM ERCOT RESPONSE TO THAT? I GUESS, UH, WARREN, WOULD YOU JUST MIND, I HAVEN'T FULLY DIGESTED TEX OGAS COMMENTS YET, BUT WHY DO YOU THINK THAT IT IS, UH, THAT 1310 IS IN CONTRADICTION TO STATUTE? UM, WELL, A COUPLE REASONS.
FIRST OF ALL, THE, UM, UH, OTHER PORTIONS OF HOUSE BILL 1500, UH, SPECIFICALLY FOCUSED ON, UH, THE ISSUE OF CAPACITY PAYMENTS TO GENERATORS.
AND, YOU KNOW, WE CAN, WE CAN ARGUE ABOUT THE SPECIFIC LANGUAGE THAT WAS USED, BUT THE, YOU KNOW, I THINK THE LEGISLATIVE INTENT WAS THAT THAT WAS NOT SOMETHING THAT WAS LOOKED UPON FAVORABLY.
THERE WAS A COST CAP APPLIED, ET CETERA.
UH, THE OTHER ISSUE WITH, IF YOU LOOK AT HOUSE BILL 1500 DISPATCHABLE RELIABILITY RESERVE SERVICE WAS INTENDED TO BE A FIRST STEP, AN INITIAL CUT, UM, TO FIX A MARKET PROBLEM, UM, UH, FIX A MARKET PROBLEM ASSOCIATED WITH RUCK, THE EXTENSIVE USE OF RUCK IN THE SYSTEM OUT OF MARKET.
UH, I THINK THERE WAS BROAD STAKEHOLDER CONSENSUS THAT THAT WAS A SIGNIFICANT ISSUE THAT SHOULD BE ADDRESSED FIRST.
AND THEN WHEN THAT HAD BEEN FIXED AND THE MARKET IMPACT OF THAT WAS KNOWN, THEN ALTERNATIVE SOLUTIONS IF NEEDED, COULD BE DISCUSSED.
UH, AND THAT'S WHY THE LEGISLATURE PUT SUCH A TIGHT DEADLINE ON DRRS.
UM, I ALSO THINK THE, YOU KNOW, THE LEGISLATIVE LANGUAGE SAYS THE AMOUNT PROCURED THROUGH DRRS MUST BE DIRECTLY REFLECTED IN REDUCTIONS IN R AND, AND, AND IT JUST DOESN'T SEEM THAT THAT IS AT ALL CONSISTENT WITH THE WAY YOU'RE LOOKING AT 1310.
SO I THINK THOSE ARE AT LEAST THREE REASONS RIGHT THERE,
[01:30:03]
MATT, IF YOU WANNA RESPOND DIRECTLY TO THAT, THAT'S FINE.UM, I GUESS I'M HAPPY TO RESPOND TO THAT AND THEN EAGER TO HEAR WHAT NED HAS TO THINK AS WELL.
UM, I, SO I GUESS, WARREN, YOU'RE REFERRING TO THE PCM STATUTE 39 POINT 1594, I THINK IT WAS.
UM, UH, YOU KNOW, I, I DON'T THINK THAT WE VIEW THAT AS BEING APPLICABLE TO DRRS.
UM, HA, HAPPY TO THINK ON THAT FURTHER, IF THAT IS APPLICABLE TO DRS.
I THINK THAT THAT'S PROBLEMATIC BECAUSE THEN THAT PROBABLY MEANS THAT IT'S APPLICABLE TO ALL ANCILLARY SERVICES, UM, AND OTHER RELIABILITY MECHANISMS. UM, SO, YOU KNOW, I I CAN'T IMAGINE THAT THAT WAS THE LEGISLATURE'S INTENT WITH 39 15 94.
UM, I'M STRUGGLING TO RECALL YOUR OTHER POINTS NOW, BUT THAT WAS THE, THAT WAS THE MAIN ONE.
UH, MAYBE I'LL HEAR WHAT NED HAS TO SAY FIRST.
UM, WELL, SEGUEING FROM THAT, I, I, AND I DON'T HAVE IT IN FRONT OF ME, AND I HAVEN'T LOOKED AT THE TGA COMMENTS IN DETAIL, BUT I KNOW THAT THAT PROVISION AND STATUTE DOES TALK ABOUT THE CREDITS, AND I DON'T THINK THERE'S ANYTHING ABOUT DRS THAT IS CREDITS BASED, SO THAT, THAT SEEMS LIKE A, A FACIAL IN INCONGRUITY.
UM, BUT WARREN, THE QUESTION I HAD FOR YOU WAS, UM, YOU KNOW, WHEN YOU GO BACK TO WHAT THE LEGISLATURE WAS LOOKING AT, I THINK A LOT OF THAT WAS INFORMED BY THE BATES WHITE REPORT THAT, UM, I THINK TGA AND, AND TIC AND OTHERS HAD HAD SPONSORED.
UM, SO IT, WOULD THAT BE YOUR RECOMMENDATION FOR HOW DRS SHOULD BE STRUCTURED IS, IS IN THE, THE WAY THAT THE BATES WHITE REPORT HAD STRUCTURED IT, WHICH I, AND I'M CURIOUS IF YOU THINK 1309 IS SIMILAR TO THAT? 'CAUSE I, I, I DON'T THINK THAT THAT MATCHES UP PERSONALLY.
WELL, I THINK YOU COULD ARGUE THAT THE BATES WHITE MATCHES 1309 AS WELL AS AURORA MATCHES 1310 ZING
BUT, BUT I, I, YOU KNOW, I OBVIOUSLY, THE, THE, THE BATES WHITE STUDY NOW HAS A, A GOOD BIT OF AGE TO IT.
UM, AND YOU KNOW, THAT'S KIND OF UNFORTUNATE BECAUSE THAT'S THE POSITION ERCOT HAS PUT US IN BY NOT MOVING FORWARD WITH DRRS AS THE LEGISLATURE INTENDED EXPEDITIOUSLY.
UM, THE, THE MARKET HAS MOVED ON TO SOME EXTENT, BUT THE ISSUE OF RUCKS REMAINS.
AND, UM, YOU KNOW, I THINK TEX OGAS VIEW IS, WELL, I'M NOT SURE I CAN SPEAK FOR TGA.
I CAN SPEAK TO WHAT THE COMMENTS ARE.
UM, WE SHOULD BE MOVING FORWARD WITH THE, THE DRRS AS IT WAS ENVISIONED IN HOUSE BILL 1500 AS QUICKLY AS POSSIBLE, AND THEN MOVE ON TO OTHER MARKET DESIGN CHANGES AS, OKAY.
WELL, I, I WILL SHARE YOUR CONCERN WITH RUX AND IS REPRESENTING, UH, A, A NUMBER OF RESOURCES THAT ARE CO FREQUENTLY, UH, SUBJECT TO THAT.
SO THAT'S, THAT'S COMMON CAUSE AND ALWAYS WANNA HIGHLIGHT THAT WHERE WE CAN, UM, ABSOLUTELY.
WARREN, JUST CONFIRMING YOU ARE SPEAKING FOR TGA.
I, I AM SPEAKING FOR AXO, BUT, BUT IT'S A LARGE ASSOCIATION WITH THE, WITH WIDE VIEWPOINTS AND OKAY.
SO YOU CAN'T JUST, YOU'RE NOT GOING ROGUE.
YOU'RE JUST SPEAKING TO THE COMMENTS.
I'M SPEAKING TO THE COMMENTS THAT WERE, THAT WERE ISSUED OKAY.
JOHN RES LOOKS READY, BUT LET, I'M GONNA LET ERCOT RESPOND.
UM, I, I'M HAVING TROUBLE 'CAUSE I'M DRIVING FROM BEAUMONT.
SO I JUST WANTED TO SAY, UH, OUR COMMENTS WERE VERY BRIEF AND BASED, YOU KNOW, TO WHAT MANY OTHER FOLKS SAID THAT WE, WE BELIEVE IN THE LEGISLATIVE INTENT OF 1500 AND THINK 1310 GOES WAY BEYOND THAT AND IT'S PUTTING THE CART BEFORE THE HORSE.
SO I'LL LEAVE IT THERE, BUT JUST WANTED TO, SORRY, I WAS HAVING TROUBLE GETTING ON.
HOW LONG ARE YOU GONNA BE DRIVING? CAN WE GET BACK TO YOU ON 1309 IN 15 MINUTES? YEAH, I THINK SO.
WE WERE HAVING A CONVERSATION BETWEEN NED AND WARREN.
I THINK ERCOT WANTED TO RESPOND TO THINGS SAID IN THAT CONVERSATION.
AND THEN LET'S GO TO GENEROUS HUBBARD.
UH, THANK YOU MATT ARTHUR WITH ERCOT.
JUST BRIEFLY THAT, THAT, UH, JOGGED MY MEMORY.
SO ON THE RUCK, I, I BELIEVE WARREN'S POINT WAS, UH, THAT 1310 DOES NOT, BUT ONE OF HIS POINTS WAS THAT IT DOES NOT COMPORT WITH THE STATUTE BECAUSE, UH, OF THE REQUIREMENT THAT DRS PROCUREMENTS DISPLACE RUCKS.
[01:35:01]
I THINK WE DISCUSSED THIS AT THE LAST WORKSHOP.UH, WE BELIEVE THAT 1310 IS COMPLIANT WITH THAT PROVISION OF THE STATUTE BECAUSE DRS PROCUREMENTS ARE PRICED BELOW RUCK PRICING.
AND SO, UM, THAT IS HOW, UH, SINCE WE DON'T LIVE IN A MULTIVERSE AND WE DON'T KNOW WHAT ALTERNATIVE UNIVERSES ARE OUT THERE, UM, THE, THE, THAT IS HOW WE HAVE, UH, WE HAVE IDENTIFIED, UM, UH, UH, TO COMPLY WITH THAT PORTION OF THE STATUTE IS, IS THE ASSUMPTION THAT, UM, PRICING, UH, WILL PRIORITIZE DRS OVER RUX.
UM, SO JUST TO MAKE THAT CLEAR.
I SAW A BUNCH OF FACES TO THAT STATEMENT.
DOES ANYBODY, INCLUDING MY OWN, BUT I DON'T, I DON'T WANNA SPEAK.
DOES ANYBODY WANT TO RESPOND TO WHAT MATT SAID? OKAY, WELL I'LL, I'LL GET TO YOU.
I JUST WANNA KEEP THE CONVERSATION FLOWING.
UM, MATT, I WAS JUST HOPING TO UNDERSTAND A LITTLE MORE ABOUT HOW IT, UM, THE, THE RESOURCE ADEQUACY AMOUNT OF DRS WOULD REDUCE RUCK BY THAT AMOUNT IF YOU'RE PAYING ALL RESOURCES.
IT DOESN'T SEEM LIKE IT'S DIRECTLY LINKED TO A RUCK REDUCTION, WHICH I THINK IS A POINT WARREN'S MAKING.
UM, I DON'T THINK WE'RE PAYING ALL RESOURCES, BUT I MIGHT JUST DEFER TO, I, I THINK THE GENERAL POINT STANDS THAT, UM, DRS IS PROCURED AT A PRICE THAT IS LESS THAN, UM, RUCK WOULD BE PRICED AT.
AND THEREFORE ANY DRS PROCUREMENTS, UH, ARE, ARE DEEMED TO OFFSET RUCK.
UM, BUT PERHAPS OTHERS CAN WEIGH IN.
I WOULD JUST SAY IN, IN HOW THEY'RE REPRESENTED, DRRS, UH, RESOURCES WITH A, A COP STATUS OF DRS WILL BE, UH, COMMITTED THROUGH THE R PROCESS IN ADVANCE OF NON DRS GENERATION.
SO JUST TO CLARIFY, YOU'RE REFERRING TO, IN THE R ENGINE, THE DRS RESOURCES WILL BE PERCEIVED TO BE CHEAPER.
YOU'RE NOT REFERRING TO THE FACT THAT $10 PER MEGAWATT HOUR IS CHEAPER THAN THE RUCK OFFER FLOOR IN REAL TIME? THAT'S CORRECT.
HOW THEY ARE VIEWED BY THE R ENGINE IN DETERMINING WHICH RESOURCES WOULD BE COMMITTED.
NED, ANDREW JUST ASKED THE SAME QUESTION I WAS GONNA ASK THROUGH THE SAME MICROPHONE
UM, SO WE, THAT WAS TGA COMMENTS.
ANY OTHER QUESTIONS OR COMMENTS FOR LAUREN? OKAY.
OKAY, I BELIEVE LAST SET OF COMMENTS, UH, REP COALITION, AND I THINK WE CAN, ON THESE COMMENTS, I THINK WE CAN DO THE 13, 10 AND 1309 FOR THEM.
UH, THIS IS CREIGHTON MCMURRAY FOR THE REP COALITION.
UM, YEAH, UH, WE FILED OUR COMMENTS ON 13 0 9 13 10 TODAY, SO I UNDERSTAND IF YOU ALL HAVEN'T HAD A CHANCE TO REVIEW THEM.
UM, I'LL TOUCH ON A VERY HIGH LEVEL, UM, AS THIS WORKSHOP PROCESS DEMONSTRATED, DESIGN PARAMETERS, COST, TIMING, ALL ARE VERY UNKNOWN.
UM, WE ARE FOCUSED ON OUR CONCERNS ABOUT UNDERSTANDING COST IMPACTS TO RESIDENTIAL AND SMALL COMMERCIAL CUSTOMERS.
AND, UM, WE WANNA SORT OF MAKE SURE THEY'RE NOT BEARING THE PRICE OF THIS BEFORE THESE, BEFORE THESE IMPLEMENTATION DETAILS ARE WORKED OUT.
UH, TOWARDS THAT END, CONSISTENT WITH OUR COMMENTS, UH, THE TEXAS REP COALITION REQUESTS THAT CLEAR LANGUAGE BE ADDED TO BOTH THESE NPRS INDICATING A DATE CERTAIN, UH, ONCE THE DESIGN COST AND PROCUREMENT QUALITIES WILL BE KNOWN OR KNOWABLE FOR STAKEHOLDERS.
AND WE'RE HAPPY TO WORK ON LANGUAGE WITH EVERYONE GOING FORWARD.
ANY QUESTIONS OR COMMENTS FOR REP COALITION? NED, ARE YOU NOT IN THE QUEUE ANYMORE? THAT WAS, THAT WAS FROM BEFORE.
SO WE ARE DONE WITH THAT SECTION.
SO WE'RE GOING TO GO BACK TO ERCOT FOR TWO SLIDES ON RESOURCE ELIGIBILITY AND DRS QUALIFICATION AMOUNT.
THERE'S A NUMBER OF COMMENTS, UM, THAT I THINK FIT HERE ON 1309.
I BELIEVE WE CAN TALK ABOUT HEN COMMENTS MORE IF THEY'D LIKE TO.
SIERRA CLUB, TSSA JOINT COMMENTERS, WHICH IS JUPITER AND NG.
[01:40:01]
I PUT REP COALITION HERE, BUT I, I DON'T KNOW IF WE NEED THEM HERE.UM, IF EVERYBODY'S COMFORTABLE WITH IT, I THINK I'LL CONTINUE TO CALL THE PEOPLE UP BECAUSE IT'S A LOT, BUT ANN WILL CALL THE QUEUE.
UM, AND, AND YOU KNOW, I'LL HOPEFULLY RELY ON BOB HILTON TO ADVOCATE WHO ALSO LEFT, BUT WE'LL SEE HOW THIS GOES.
SO I'LL TURN IT, UH, BACK OVER TO ERCOT.
SO NEXT WE WANT TO WALK THROUGH A COUPLE OF SLIDES, UH, TO TALK ABOUT THE QUALIFICATION AMOUNT AT AND FIRST THE ELIGIBILITY.
SO, SO AS PART OF THE, UH, NPR R UM, YOU KNOW, UH, WE HAVE, UH, THE REQUIREMENTS ON TOP, UH, WHICH ARE APPLICABLE TO BOTH 1309 AND 1310.
UM, AND THESE ARE, UM, AS DISCUSSED BEFORE, UH, MEANT TO, UH, SATISFY THE STATUTE.
SO THE FIRST BEING, UM, UH, SO THIS, UH, CONCERNS RESOURCES, UH, THE, THAT NEED TO, UH, SUSTAIN THEIR, UH, HSL FOR AT LEAST FOUR HOURS.
UM, THEN THERE'S A REQUIREMENT THAT, UH, RESOURCES, UH, START WITHIN, UH, TWO HOURS AND BE DISPATCHABLE.
NOW, UH, THE DIFFERENCES COME, UH, IN, UH, 1309 AND 1310 FOR, UH, ESRS.
SO IN BOTH THE, UH, THESE NPRS, UH, ONLINE GENERATION RESOURCES AND OFFLINE GENERATION RESOURCES ARE ELIGIBLE.
UH, HOWEVER, IN 1309, UH, ESR PARTICIPATION IS NOT INCLUDED, WHEREAS IN 1310, UH, ESRS, UH, CAN PARTICIPATE, UH, AS AN OPTION, UH, IN THE FUTURE.
UH, SUBJECT TO, UM, GUIDANCE FROM OR DIRECTIVE FROM, UH, PUCT.
NOW IN TERMS OF THEIR, UH, QUALIFICATION AMOUNTS, UM, THERE ARE DIFFERENCES, UH, BETWEEN, UH, HOW, UH, HOW MUCH, UH, MEGAWATTS ARE QUALIFIED, UH, FOR OFFLINE AND ONLINE GENERATION RESOURCES.
SO FIRST, WE'LL ADDRESS, UH, OFFLINE GENERATION RESOURCES.
UM, AND THIS IS WHERE, UH, THE QUALIFICATION AMOUNT IS, UH, COMMON TO BOTH 1309 AND 1310.
UM, SO BASICALLY OFFLINE GENERATION RESOURCE, UM, MUST BE CAPABLE OF STARTING FROM COLD START AND RAMPING TO ITS DRS ANCILLARY SERVICE AWARD WITHIN TWO HOURS.
SO THIS IS, UH, SIMILAR TO HOW QUALIFICATION FOR NON SPIN RESERVE, UH, WORKS.
UM, OF COURSE, THE DIFFERENCE IS, UH, FOR THAT, UH, THE PERIOD IS, UH, 30 MINUTES NOW.
UM, FOR ONLINE GENERATION RESOURCES, UH, THERE'S A DIFFERENCE BETWEEN THE QUALIFICATION AMOUNTS IN 39, UM, AND 1310, WHERE WE ASSUME THAT, UH, THE RELEASE FACTOR HAS BEEN APPROVED TO BE NON-ZERO, WHICH MEANS, UH, THERE IS A RESOURCE ADEQUACY, UH, COMPONENT.
SO, UM, SO WE START WITH 30 0 9, UH, WHERE, UH, WE SEE THAT, UH, WE TAKE THE REGISTERED, UH, TO OUR RAM CAPABILITY.
UM, AND THEN, UH, WHEN WE ARE DETERMINING AWARDS IN THE MARKET SYSTEM, UH, THEY WOULD BE, UH, FURTHER LIMITED BY THE DISPATCHABLE RANGE.
UM, THIS IS, UH, CONSISTENT WITH, UH, WHAT WE HAVE TODAY FOR OTHER ANCILLARY SERVICES.
NOW, ON THE RIGHT, UH, THERE'S A DIFFERENCE IN, UH, HOW WE APPLIED IT TO 1310.
UM, AGAIN, UH, WE START WITH THE REGISTERED, UH, TO OUR RAMPING CAPABILITY, BUT, UH, THIS TIME IT IS, UH, IN THE MARKET SYSTEM, IT IS LIMITED TO, UH, THE MINIMUM OF EITHER THE HSL OR, UH, THE LSL PLUS, THE TWO R RAMP CAPABILITY.
THE FINAL ROW, UH, IN, UH, THE STABLE, UH, ADDRESSES, UH, COMBINED CYCLE UNITS.
UM, SO FOR COMBINED CYCLES, UH, IN EACH CASE WE CONSIDER, UH, THE RAMP RATES FOR THE MAX CONFIGURATION AND, UH, APPLY TO ALL, UH, LOWER CONFIGURATIONS.
UM, THIS IS AGAIN, CONSISTENT WITH, UH, HOW WE DO IT FOR OTHER ANCI SERVICES.
UM, I'LL JUST NOTE THAT, UH, FOR, UH, DAM, UH, THE H-S-L-L-S-L VALUES WOULD BE ON COP, WHEREAS FOR, UH, REAL TIME IT WOULD BE BASED ON THE TER VALUES.
AND I THINK, UH, THIS IS, YEAH, PAUSE.
AND I THINK I MESSED UP AND I EVEN NOTED ALL THE PEOPLE LEAVING.
[01:45:01]
HAVE TAKEN A BREAK.SO I THINK LET, LET'S GIVE EVERYONE A, A SHORT BREAK, LIKE LEGITIMATELY 10 MINUTES.
UM, ANDREW, DO YOU WANNA SAVE YOUR, YOUR QUESTION FOR AFTER BREAK? SO, WE'LL, WE'LL GET TO THE TWO QUESTIONS FROM ANDREW AND, AND SHAMS, AND THEN WE'LL GET TO THE, THE COMMENTS ON RESOURCE ELIGIBILITY.
BUT LET'S COME BACK AT 3 0 5, 3 0 6.
[Resource Eligibility and DRRS Qualification Amount]
IS, THIS IS BLAKE HOLT.THE REMAINDER OF THIS MEETING, UH, OR AT LEAST CALL UP, UH, THE NEXT COMMENTS, JUST THE RESOURCE ELIGIBILITY SECTION, RESOURCE ELIGIBILITY PIECE.
UH, WE'LL GET RAMPED UP HERE IN ANOTHER MINUTE AS FOLKS ARE COMING TO THEIR SEATS.
WE'RE AS MUCH AS YOU WANT, BLAKE.
I CAN TAKE BACK OVER AFTER THE, UNLESS YOU DON'T, UNLESS IT'S YOUR MEETING NOW.
FIRST UP, LET'S, UH, LET'S CALL UP HIM, UH, SHAMS. DO YOU HAVE ANY MORE COMMENTS TO, TO MAKE ON, ON YOUR QUALIFICATION POINTS? BLAKE? THERE'S A COUPLE QUESTIONS, BUT ANDREW'S GONE, SO I FEEL STUPID FOR CORRECTING YOU NOW, BUT WE HAD A COUPLE QUESTIONS STILL FROM THE PRESENTATION.
WE'LL START WITH SHAMS AND THEN WE'LL MOVE ON TO, UH, SEE CLAY.
YEAH, SO I WAS RE-LOOKING AT THE LANGUAGE.
UM, SO I HAVE TWO CONCERNS WITH, YOU KNOW, THE WAY IT'S, I THOUGHT I HEARD, UM, THIS BEING PRESENTED, BUT, UH, THE FIRST IS THE FOUR HOUR HSL, YOU KNOW, AND I THINK IT'S RIGHT THAT IF THEY REGISTER THEIR HSL, LET'S SAY IT'S A HUNDRED MEGAWATT, A HUNDRED MEGAWATT HOUR BATTERY, BUT THEY DECIDE TO REGISTER AS 25 MEGAWATTS, THE HSL, THEN IT'S OKAY, THEREFORE OUR BATTERY, BUT WE SHOULDN'T ALLOW THAT BATTERY THEN IN REAL TIME TO TELEMETER AN HSL HIGHER THAN THE QUALIFICATION HSL.
SO THEN THEY'RE GAMING THE SYSTEM, THEY'RE JUST SAYING, OH, BUT I CAN ACTUALLY DO A HUNDRED MEGAWATTS.
SO GIVE ANSWERS OR GIMME ENERGY FOR SOMETHING ABOVE THAT.
SO I JUST WANNA MAKE CLEAR THAT, UM, YOU KNOW, WE DON'T WANT THAT KIND OF A SITUATION.
DOES
SO, SO FRANCES, WE KIND OF FOLLOWED THE SAME THING WE DO FOR NONS SPEND THAT DURING QUALIFICATION, IF THEY WANT TO QUALIFY FOR DRRS, UM, WHAT THEY CAN DO IS TO SATISFY THE LAW.
I MEAN, WHAT DO WE DO FOR NONS SPEND? WE JUST SAY, HOW MANY MEGAWATTS CAN YOU PRODUCE FOR FOUR HOURS? THAT'S YOUR QUALIFIED MEGAWATT.
THAT'S WHAT WE USE FOR ALL AS BASED ON THE DURATION.
SO WE WANTED TO DO THE SAME THING WITH DRRS, BUT THE LOSS IS THAT THEY USE THE WORD HSL, WHICH IS KIND OF UNCLEAR IN THAT SENSE.
SO WE HAVE, WHAT WE HAVE SAID IS THAT DURING THE QUALIFICATION YOU CAN SAY YOUR HSL IS 25 MEGAWATTS, RIGHT? AND THEN YOU QUALIFY FOR 25 MEGAWATTS, RIGHT.
FOR FOUR HOURS, BUT DURING REAL TIME.
RIGHT? WE WILL BE LOOKING AT YOUR SOC JUST LIKE WE DO FOR NONS SPEND.
SO THEIR AWARDS CANNOT EXCEED WHAT THEIR S SO C IS IF THEY HAVE, YOU KNOW, 10 MEGAWATTS OF 10 MEGAWATT HOURS OF SOC AT THAT TIME, IT DOESN'T MATTER IF THEY'RE QUALIFIED FOR 25 MEGAWATTS.
NO, MY CONCERN IS THE OTHER THAT IN REAL TIME THEY SAY, OH, I CAN PROVIDE A HUNDRED MEGAWATTS OF ECRS.
BUT THEN WHAT THEY HAVE THEN YOU QUALIFIED FOR 25 MEGAWATTS, SO YOU'RE NOT, THEN YOU SORT OF GAMING THIS LAW, WHICH SAID THAT YOU HAVE TO BE AT HSL FOR FOUR HOURS.
UH, I DON'T KNOW IF YOU CALL IT GAMING OR NOT, BUT WE ARE GOING TO SAY THAT DRRS IS A PRODUCT THAT YOU HAVE TO SUSTAIN THAT OUTPUT FOR FOUR HOURS.
AND THEN THE OTHER WAY, I MEAN MAYBE THIS IS SOMETHING THAT WE CAN DISCUSS.
THE OTHER WAY IS THAT IN ORDER TO EVEN QUALIFY, YOU ARE RATED HSL RATED HSL, UH, OR YOUR RATED SOC MUST BE FOUR TIMES YOUR RATED HSL.
AND, BUT THEN AGAIN, IN REAL TIME, IF YOU DON'T HAVE THE JUICE, YOU WANNA BE YEAH, THAT'S FINE.
SO THAT IS ANOTHER OPTION YOU CAN DO.
BUT WE WANTED TO KEEP THIS IN LINE WITH WHAT WE DO FOR SPEN.
I THINK THAT MIGHT BE PROBLEMATIC WITH THE STATUTE LANGUAGE.
THAT'S WHAT I'M, UM, THAT'S A MATTHEW QUESTION BECAUSE THEN YOU'RE ALLOWING TO ME THE, THE LANGUAGE IS A BIT UNCLEAR ON THE WHAT, WHAT, WHAT THEY REALLY MEAN BY THAT.
SO THAT WOULD BE ONE OF MY CONCERNS.
THE OTHER ONE IS, YOU KNOW, THAT, UH, THE LANGUAGE SAYS
[01:50:01]
THAT THE RESOURCE HAS TO BE ONLINE AND DISPATCHABLE NOT MORE THAN TWO HOURS AFTER BEING CALLED ON FOR DEPLOYMENT.FOR ME, THAT'S A TWO HOUR STARTUP.
ONCE YOU'RE AT LSL AND YOU ARE AVAILABLE TO GET TO DISPATCH, YOU ARE DISPATCHABLE AT THE END OF TWO HOURS.
SO HERE WE SAYING, NO, THAT'S NOT ENOUGH.
YOU HAVE TO BE AT YOUR HSL IN TWO HOURS.
UM, AND TO ME, THOSE ARE TWO DIFFERENT THINGS.
I MEAN, THE STATUTE DOESN'T TALK ABOUT ANYTHING OF YOUR RAMP AFTER LSL, IT JUST SAYS YOU NEED TO START UP IN TWO HOURS.
MAD I WHICH ONE ARE YOU TALKING ABOUT? IS IT, SEE IF, IF YOU'RE OFFLINE MM-HMM
RIGHT? YOU MUST BE ABLE TO START UP.
IT INCLUDES EVEN THE RAMP THAT YOU HAVE TO START UP.
IT'S NOT JUST THE STARTUP AND BE AT LSL, IT'S STARTUP AND BE AT A PARTICULAR VALUE IN TWO HOURS.
THAT'S, THAT'S WHAT YOU'RE QUALIFIED FOR.
BUT THAT'S NOT WHAT THE STATUTE IS SAYING.
THE STATUTE IS SAYING BE ONLINE AND DISPATCHABLE NOT MORE THAN TWO HOURS.
SO IT'S SAYING BE AT LSL IN TWO HOURS AND THEN WE CAN PUT ON A DIFFERENT RAMP LIMITED THAT YOU HAVE TO HAVE AT LEAST THE RAMP OF 10 MEGAWATTS AN HOUR OR SOMETHING.
UH, I DON'T THINK OPERATIONS WANT THAT.
THEY WANT TO SAY, WHAT CAN YOU GIVE US IN TWO HOURS? BECAUSE THAT'S WHEN WE PULL THE TRIGGER.
THEN YOU DISQUALIFYING STUFF THAT THE STATUTE DOESN'T DISQUALIFY THAT THE STATUTE WOULD QUALIFY AND YOU DISQUALIFYING THEM.
MAY MAYBE THAT'S, THAT'S AGAIN A MATTHEW QUESTION BECAUSE TO ME THE THING IS WHAT CAN BE DELIVERED IN TWO HOURS IS WHAT YOU'RE QUALIFIED FOR.
IT INCLUDES STARTUP AND YOUR RAMPING TO A PARTICULAR VALUE.
RIGHT? I MEAN THE, BUT YOU CAN SEE THE LANGUAGE, THE STATUTE JUST BASICALLY SAYING BE ONLINE AND DISPATCHABLE NOT MORE THAN TWO HOURS AFTER BEING CALLED ON FOR DEPLOYMENT.
LET'S GO AHEAD AND, AND GO TO MATT, 'CAUSE I THINK HIS COMMENT'S RESPONSIVE.
AND THEN WE'LL ALSO, UH, CALL ON DAVE NEXT.
SO YES, WE, UM, SORRY, I WAS, UH, TESTING THE WATER OUTSIDE AND MISSED THE FIRST HALF OF THE CONVERSATION.
BUT IN TERMS OF, UM, ESRS ADJUSTING THEIR HSL FOR QUALIFICATION, WE BELIEVE THAT THE STATUTE ALLOWS FOR THAT BECAUSE OF THE WORDS.
UH, YOU KNOW, THERE, THERE ARE WORDS THAT SAY DEVELOP CRITERIA FOR RESEARCH PARTICIPATION AND BE CAPABLE OF RUNNING.
SO I THINK THAT, YOU KNOW, UH, CRITERIA FOR RESOURCE PARTICIPATION CAPABLE OF RUNNING THOSE SORT OF LEND THEMSELVES TO INTERPRETING, UH, THAT, UH, USING THE, THE TERM FROM THE STATUTE HSL, LIKE QUALIFICATION WHEN WE'RE DETER, WHEN WE'RE DETERMINING WHAT THEY'RE CAPABLE OF DOING AND, UM, UH, WHAT THEIR RE THEIR CRITERIA FOR RESOURCE PARTICIPATION ARE, UM, MEETS THAT STATUTORY REQUIREMENTS, UM, THEN IN REAL TIME, UM, THEY WOULD JUST BE, UH, REQUIRED TO DO, UM, WHAT THEY'RE AWARDED AT FOR FOUR HOURS, NOT NECESSARILY THEIR, UM, HSL BEING SHRUNK, UH, TO ONE FOURTH OF THEIR STATE OF CHARGE.
SO WE THINK THAT THAT IS PERMISSIBLE UNDER THE STATUTE.
SO, CLAIRE, JUST TO CLARIFY, THAT MEANS THESE FIVE MINUTES, I SELL 25 MEGAWATTS OF, UH, OF DRS.
THE NEXT FIVE MINUTES I CAN BE ORDERED A HUNDRED MEGAWATTS OF ECRS.
I CAN TELEMETER AN HSL OF A HUNDRED MEGAWATTS AND GET A HUNDRED MEGAWATTS OF ECRS IN THE NEXT TOWER IN THE NEXT FIVE MINUTES.
SORRY, RUN THROUGH THAT ONE MORE TIME.
SO IN THIS FIVE MINUTES I WANT TO GET DRSI REDUCED I TELEMETRY AN HSL AT 25 MEGAWATTS, RIGHT.
IS THIS A QUALIFICATION OR IN REAL TIME? IN REAL TIME? NO, YOU, YOU CANNOT, YOU ARE NOT GOING TO BE DROPPING YOUR HSL JUST FOR GETTING AN, THE, THE WHOLE PURPOSE OF THIS WAS THAT YOU ARE NOT PICKING AND CHOOSING THE, THE RESOURCE IS NOT PICKING AND CHOOSING WHAT IT WANTS.
SO THEN IT'LL BE A HUNDRED MEGAWATTS, IT'LL BE A HUNDRED MEGAWATTS, AND THEN THE, THE REALTIME RTC WILL AWARD IT BASED ON ITS, YOU KNOW, CAPABILITY OF PROVIDING EACH AND EVERY ANCILLARY SERVICE.
SO IT MAY GIVE IT IN 1309, IT MIGHT GIVE IT A ONE MEGAWATT DRRS AWARD, OR IT GIVE AND 99, WELL, DEPENDING ON ITS C THING.
SO IT COULD GET, LIKE, LET'S SAY IT HAS 25 MEGAWATTS OF DRS AND IT COULD GET 75 MEGAWATTS OF, WELL THAT'S FFR.
THAT MEANS IT'S SOC AMOUNT IS A HUNDRED MEGAWATT HOURS PLUS ANOTHER 75 MEGAWATT HOURS.
OH, IF YOU'RE TALKING ABOUT BASE POINT OR FFRS.
SO BASICALLY NOW YOU'RE GIVING,
[01:55:01]
I MEAN, HOW DOES THIS, HOW DOES IT TIE TO HSL ANYMORE BEING AT FOUR HOURS FOR HSL FOR QUALIFICATION AT THAT POINT, BUT AT ANY TIME.SO HE'S USING TWO DIFFERENT, SO QUALIFY FOR ECRS, HE'S USING A HUNDRED MEGAWATTS OF HSL AND THEN TO QUALIFY FOR DRS, IT'S SAYING NO, MY HSL IS 25.
YEAH, BECAUSE YOU DO QUALIFICATION FOR HAS SEPARATELY, YOU DON'T CHANGE YOUR HSL FOR EACH QUALIFICATION.
THAT'S, UH, THIS, THIS ONE IS, THAT'S A REAL PROBLEM.
LET'S SEE IF, UH, DAVE HAS A RESPONSIVE COMMENT HERE.
YEAH, I, I, I WAS GONNA RESPOND MORE TO THE, THE OFFLINE COMMENT THAT CHA HAD MADE.
I WOULD SAY I AM THINKING ABOUT THE, THE, THIS HSL DISCUSSION, THE, THE MAJOR CONCERN WE WOULD HAVE IF YOU REQUIRE THE BATTERY TO LOWER THEIR HSL IN REAL TIME, YOU'RE EFFECTIVELY CREATING SOME, SOME ARTIFICIAL SCARCITY WHEN IT SEEMS LIKE THAT ALL CAN BE MANAGED JUST WITH THE, WITHIN THE STATE OF CHARGE TELEMETRY THAT WE ALREADY GET IN THE, THE FOUR HOUR DURATION.
UH, GOING OVER TO THE OTHER ITEM THOUGH, ON THE, ON THE, UH, START TIME, I, I THINK THERE'S A DISTINCTION TO THINK ABOUT SHAMS IN THE STATUTORY LANGUAGE THAT YOU WERE REFERRING TO.
SO YOU SEEM TO IMPLY THAT WE WOULD BE MAKING RESOURCES INELIGIBLE IF THEY CAN ONLY GET TO THEIR LSL UH, WITHIN TWO HOURS.
I, I DON'T THINK THAT THAT'S RIGHT OR IN ALIGNMENT WITH THE, THE LANGUAGE THAT, THAT WE HAVE HERE, UH, ON THE BOARD AS WELL AS WHAT'S IN THE NPRR.
SO TO THE DEGREE YOU'RE TALKING ABOUT A RESOURCE THAT COULD ONLY ACHIEVE LSL WITHIN THE TWO HOUR START PERIODS.
THEY DO THAT COLD START OF, OF TWO HOURS OR LESS.
BUT, BUT THE HIGHEST THEY CAN GET TO IS LSL.
THEY WOULD BE ELIGIBLE IN THE WAY WE'VE WRITTEN THE LANGUAGE.
NOW, THE MEGAWATT QUANTITY FOR WHICH THEY'D BE ELIGIBLE WOULD BE LIMITED TO JUST THAT LSL.
THAT'S ALL THAT'S ACHIEVABLE WITHIN THE TWO HOURS.
BUT THE RESOURCE ITSELF WOULD STILL BE ELIGIBLE TO THE DEGREE THE RESOURCE CAN GET TO A LEVEL HIGHER THAN LSL WITHIN TWO HOURS, THEN THAT WOULD INCREASE THE MEGAWATTS OF ELIGIBILITY.
BUT BOTH RESOURCES ARE ELIGIBLE.
SO I, I DO THINK THAT'S AN IMPORTANT DISTINCTION TO BE THINKING ABOUT, UH, IN LIGHT OF THE, THE STATUTORY LANGUAGE THAT YOU REFERENCED BEFORE.
YEAH, THE RESOURCE OF THE ELIGIBLE OF TO LO.
BUT I GUESS THAT'S THE DISCUSSION WE NEED TO HAVE IS DID THE, DOES THIS LANGUAGE SORT OF WANT TO LIMIT IT TO THAT LSL OR DO THEY REALLY, WAS IT JUST, DID YOU HAVE TO TWO START TWO HOUR START UNIT IS ELIGIBLE FOR DRS AND THEN THEY CAN PROVIDE, THEY GET AWARDED DSL UM, DRS UP TO THEIR HSL.
SO, UM, THAT IS A, THAT'S, I GUESS THAT'S MY QUESTION IS, UM, WE NEED TO THINK ABOUT THAT IS WHETHER THEY'RE JUST ELIGIBLE TO LSL OR WHETHER THEY'RE ELIGIBLE TO, TO THEIR HSL.
AND MAYBE WE CAN HAVE A RAMP FROM LSL TO HSLA MINIMUM RAMP THAT THEY NEED TO MEET.
BUT THE STATUTE SEEMS, I MEAN, THE WAY I'M READING IT, IT'S, IT SEEMS LIKE IT'S MEANT TO BRING IN ALL THIS CAPACITY THAT'S, THAT CAN START UP IN TWO HOURS.
WELL, I GUESS I'D ONLY SAY I, I DO THINK OUR LANGUAGE IS IN ALIGNMENT WITH THE STATUTE IN THIS REGARD.
UH, I, I THINK THINKING BEYOND, GIVEN THAT THAT'S THE CASE, OR AT LEAST I BELIEVE IT TO BE TRUE BEYOND THAT, IT SEEMS LOGICAL TO SAY THAT OKAY, IN TERMS OF MEGAWATT ELIGIBILITY, NOW THAT THE RESOURCE IS DEEMED ELIGIBLE, IT SEEMS LOGICAL TO SAY THAT THAT WOULD BE LIMITED TO WHAT CAN BE ACHIEVED WITHIN TWO HOURS.
BUT, UH, PERHAPS THAT'S SOMETHING I THINK THAT GOES BEYOND THE REQUIREMENTS OF THE, OF THE STATUTE.
AND ON THE FOUR HOUR THING, UH, WHAT'S YOUR THOUGHT ON THAT? THAT, UM, THAT THEY COULD, WHEN THEY QUALIFY, THEY COULD SAY THAT MY HSL IS 25 MEGAWATTS WHEN YOU QUALIFY ME FOR DRS, BUT WHEN YOU QUALIFY ME FOR OTHER ANCILLARY SERVICES THAT MY HSL IS A HUNDRED, DOESN'T THAT SOUND PROBLEMATIC? UH, I, I, I ACTUALLY AGREE WITH WHAT CY AND MATT WERE SHARING AND, AND I THINK THE MORE PROBLEMATIC APPROACH WOULD BE, UH, THE, THE INVERSE OF WHAT YOU'RE TALKING ABOUT, WHERE WE WOULD EFFECTIVELY SEEM TO ARBITRARILY TAKE AWAY CAPACITY FROM THE MARKET BECAUSE THE RESOURCE THINKS IT'S PREFERENTIAL TO PROVIDE ONE SERVICE VERSUS THE OTHER.
WHEN THAT CAN ALL REALLY BE RESOLVED WITHIN THE OPTIMIZATION.
THAT SEEMS TO BE CREATING A LOT OF INEFFICIENCIES THAT, THAT DON'T SEEM WARRANTED.
BUT I THINK THE INTENT OF THE STATUTE WAS REALLY TO INCENTIVIZE LONG DURATION BATTERIES, NOT FOR EXISTING BATTERIES TO BE ABLE TO, WHAT I CALL GAME THE SYSTEM, YOU KNOW, REDUCE THEIR HSL AND JUST QUALIFY FOR
[02:00:01]
DRS, THEREBY REDUCING DRS PAYMENTS TO THERMAL RE, OR THERMAL, MUCH LONGER DURATION RESOURCES THAT WE NEED ON THE SYSTEM.IT SEEMS LIKE, UM, THE STATUTE IS PRETTY CLEAR THAT IT HAS TO BE AT HSL AND TO SAY THAT, OKAY, WE'LL ACCEPT TWO DIFFERENT HSLS FOR TWO DIFFERENT SERVICES.
I MEAN, LET'S GIVE, UH, MATTAR, UH, A CHANCE AT THE LAST RESPONSE HERE AND WE HAVE A LITTLE BIT OF A QUEUE WORK THROUGH BEFORE SIX MORE SETS.
CAN I JUMP IN WITH SOME LOGISTICS AFTER MATT? YEAH, PLEASE GO AHEAD OR GO AHEAD MATT.
ARTHUR ERCOT, JUST BRIEFLY, I MEAN, I, I GUESS I WOULD JUST BE CAREFUL ABOUT SAYING WHAT THE INTENT OF THE STATUTE IS.
I THINK WE'RE JUST LOOKING AT THE WORDS ON THE PAGE OF THE STATUTE.
AND I THINK WHAT I WAS JUST SAYING BEFORE IS THAT, UH, WE BELIEVE THAT THE WORDS ON THE PAGE SAYING DEVELOP CRITERIA FOR RESOURCE PARTICIPATION AND BE CAPABLE OF RUNNING, UM, AT THE RESOURCES HSL, THOSE, UH, WORDS, UM, SEEM, SEEM TO GIVE ROOM FOR INTERPRETATION THAT THAT CAN BE USED AT QUALIFICATION.
UM, SO THAT'S WHY WE THINK THAT REQUIRING THE USE OF OF THE HSLA QUALIFICATION IS, UM, COMPLIANT WITH THE STATUTE.
UM, WE NEED, WE HAVE A HARD STOP MAYBE 4 24 30.
I THINK WE SHOULD HAVE THIS CONVERSATION FOR ABOUT 30 MORE MINUTES.
UM, AND THEN IF WE DON'T GET THROUGH ALL THE COMMENTS, I THINK WE STILL HAVE TIME TO TALK ABOUT RESOURCE ELIGIBILITY BEFORE WE NEED TO PASS 1309.
AND THEN I'LL, I'LL TAKE BACK OVER FROM BLAKE AROUND THREE 50 AND, AND WE'LL MAKE SURE ERCOT GETS THROUGH THE REMAINDER OF THEIR SLIDES.
'CAUSE, 'CAUSE ERCOT DID GO BACK AND PROVIDE EXAMPLES AND ANALYSIS AT OUR REQUEST.
UM, SO WE'LL, WE'LL DO THAT AND THEN AFTER THAT WE CAN TALK ABOUT NEXT STEPS VERY BRIEFLY.
DOES THAT SOUND OKAY TO BLAKE AND EVERYONE ELSE? SO SKIP THE QUEUE AND WORK THROUGH COMMENTS RIGHT NOW AND PICK THE QUEUE BACK UP.
I WOULD GO THROUGH THE QUEUE AND WE'LL JUST CUT PEOPLE OFF AT THREE 50 WHEREVER WE ARE.
YOU CAN DO WHAT THEY DID YESTERDAY.
YOU CAN ONLY ACCEPT BRIEF AND AMAZING COMMENTS.
SO, UH, ANDREW, YOU WERE IN THE QUEUE BEFORE WE BROKE.
DO YOU HAVE SOME COMMENTS ON THIS? YEP.
UH, MY COMMENTS ON THIS ARE MOSTLY LOGISTICAL AND SO THEY RELATE TO THE COMMENTS THAT WE HAD AT THE END OF OUR SUBMITTED COMMENTS ON 1310, WHICH IS OUR PERSPECTIVE ON HOW WE COULD MOVE FORWARD WITH THE BATTERY ELIGIBILITY ASPECTS OF DRS.
UH, I'M NOT A LAWYER AND SO I DON'T INTEND TO TAKE A POSITION ON THE STATUTORY ASPECTS OF ALL OF THAT, BUT WE DO SUPPORT FIGURING OUT A WAY TO INCORPORATE, UH, BATTERIES INTO DRS AND DON'T REALLY HAVE ANY ISSUE WITH WHAT ERCOT HAS PROPOSED.
UH, THAT SAID, WE ARE RECOMMENDING REJECTING 1310, AND SO THERE'S A QUESTION OF WHERE THE BATTERY ELIGIBILITY STUFF SHOULD LIVE.
UH, THERE ARE THREE OPTIONS WE SEE FOR, UH, OTHER STAKEHOLDERS WHO ARE INTERESTED IN TAKING THAT UP.
THE BATTERY ELIGIBILITY STUFF COULD BE, UH, EXTRACTED FROM 1310 AND SUBMITTED AS RED LINES TO 1309.
THE BATTERY STUFF COULD BE RETAINED IN 1310, AND THEN EVERYTHING ELSE COULD BE RED LINED OUT OF 1310, OR THE BATTERY STUFF COULD BE AIRLIFTED OUT OF 1310 AND SUBMITTED AS ITS OWN NPRR.
AND ALL OF THOSE ARE PLAUSIBLE OPTIONS FOR GETTING THE BATTERY STUFF ON A SEPARATE TRACK WHERE IT ISN'T BOGGED DOWN IN THE CONVERSATION WITH THE RESOURCE ADEQUACY ASPECTS OF 1310.
AND SO THAT IS ALL I HAVE TO SAY ABOUT THAT.
UH, THIS IS COLIN CLAY WITH ENERGY TRANSFER.
CAN YOU HEAR ME ALL RIGHT? YES, SIR.
UH, ENERGY TRANSFER HAS A TECHNOLOGY CALLED DUAL DRIVES WHERE WE BASICALLY HAVE THE ABILITY TO, UH, SWAP INSTANTANEOUSLY BETWEEN, UH, ELECTRICALLY POWERED MOTORS AND GAS POWERED ENGINES TO DRIVE COMPRESSORS.
AND SO I HAVE A TWO PART QUESTION, UM, THAT'S ULTIMATELY GONNA RELATE TO THAT TECHNOLOGY, OF WHICH WE HAVE ABOUT 250 MEGAWATTS OF THAT INSTALLED THROUGHOUT ERCOT.
SO MY FIRST QUESTION IS, UM, AND THIS IS RELATING TO ELIGIBILITY FOR DRS, IS IF YOU HAD A GENERATOR THAT YOU WERE ABLE TO USE BEHIND THE METER TO SERVE YOUR, YOUR MOTOR THAT'S DRIVING YOUR COMPRESSOR, YOU KNOW, IS THAT, IS THAT GENERATOR ULTIMATELY ABLE TO PARTICIPATE IN DRRS BECAUSE OF YOUR ABILITY TO, UM, KIND OF LOAD SHED, UH, TO
[02:05:01]
SUPPORT THE GRID? AND THEN IF, IF THAT SELF-SUPPLY IS SOMETHING THAT IS, YOU KNOW, UH, QUALIFYING FOR DRRS, THEN WE WOULD EQUALLY ASK IF, YOU KNOW, THE ABILITY TO TURN ON A GAS POWERED ENGINE THAT RESULTS IN THE SAME ULTIMATE LOAD SHEDDING FUNCTION WOULD, WOULD ALSO BE ABLE TO PARTICIPATE IN D-R-R-S-I.I THINK THAT'S SOMETHING THAT WE'LL HAVE TO GIVE SOME MORE THOUGHT TO.
BUT ON THE, ON THE SURFACE SIDE ON, DON'T SEE THAT, UH, A-I-I-I-I, I SEE DRS BEING FOR, UH, AND CERTAINLY IN, IN 13 TO NINE FOR GENERATION RESOURCES, UM, RATHER THAN LOAD EFFECTIVE LOAD SHED.
UM, BUT THERE ARE OTHERS FROM, FROM ERCOT WHO CAN WEIGH IN ON THAT AS WELL.
I, I'M ASSUMING THAT, THAT THIS SITE WOULD BE A PUN AND THEN THE, UM, THE ELECTRIC GENERATION RESOURCE MUST BE REGISTERED WITH ERCOT AS A FULL FLEDGED RESOURCE RESOURCE, AND THEN IF YOU CHOP DOWN YOUR LOAD, THE EXCESS SUPPLY CAN BE ELIGIBLE FOR DRRS.
BUT IF IT'S A GAS ENGINE THAT DOESN'T DO ANYTHING, UM, I, I THINK THAT WHOLE, IF THE GAS ENGINE TURNS ON AND THEN IT'S DRIVING THE COMPRESSOR, THAT IS NOT AN ELECTRIC GENERATOR AND THAT IS MORE LIKE A CONTROLLABLE LOAD.
AND, AND I, I THINK OUR INTERPRETATION IS THAT ANYTHING THAT MODIFIES A LOAD BY ITSELF IS NOT ELIGIBLE FOR DRRS.
SO IT SOUNDS LIKE THE POSITION IS THAT A GENERATOR THAT'S BEING USED TO SELF-SUPPLY, UM, WOULD BE ELIGIBLE, BUT A BUT A ENGINE THAT'S DOING THE EQUAL THING WOULD, WOULD NOT BE, YEAH.
AS LONG AS THAT ELECTRIC GENERATOR IS REGISTERED WITH ERCOT AS A FULL-FLEDGED RESOURCE, SUBMITTING TELEMETRY AND COPS AND ALL THAT.
UM, IS THERE ANY AVENUE FOR US TO HAVE FURTHER CONVERSATIONS ABOUT WHETHER THIS IS SOMETHING THAT SHOULD APPLY? I, I, I THINK WHAT WE ARE LOOKING TO IS THE STATUTORY LANGUAGE TO, TO DETERMINE THAT ELIGIBILITY.
AND WE'VE HAD THE, THE CONVERSATION IN, IN EARLIER FORMS ABOUT THE INELIGIBILITY OF SAY, CONTROLLABLE LOAD RESOURCES TO PARTICIPATE IN IN DRS, UM, AND THAT IT WOULD NEED TO BE A, A GENERATION RESOURCE, UH, IN ORDER TO BE ABLE TO PARTICIPATE.
SO ABSENT A CHANGE IN THAT STATUTORY LANGUAGE, I THINK THAT'S CONSISTENT WITH OUR INTERPRETATION OF THE LANGUAGE AS IT STANDS TODAY.
YEAH, WE'RE A LITTLE LATE TO THE CONVERSATION ACTUALLY.
WE JUST HEARD ABOUT THIS, SO THIS IS MY FIRST TIME PARTICIPATING HERE, SO THANKS FOR, UH, CATCHING ME UP.
UM, I'VE ACCUMULATED A COUPLE OF THOUGHTS SINCE, SINCE JUMPING IN THE QUEUE.
UM, I JUMPED IN ORIGINALLY THOUGH TO SUPPORT CHAMS ON, UH, ON THE POINTS HE WAS MAKING ABOUT THE, THE STATUTORY LANGUAGE AND, AND WHAT SPECIFICALLY IT REQUIRES FOR, YOU KNOW, BEING ONLINE AND DISPATCHABLE WITHIN TWO HOURS VERSUS AT HSL.
AND THERE IS FOR THE, UM, THE FOUR HOUR, AT LEAST FOUR HOUR, UM, I'M PULLING UP THE, THE ONLINE SPECIAL, UH, FOR NOT MORE THAN TWO HOURS AFTER BEING CALLED ON FOR DEPLOYMENT AND THEN CAPABLE AT RUNNING FOR AT LEAST FOUR HOURS AT THE HSL.
THOSE ARE DISTINCT PROVISIONS UNDER 39 59 D TWO.
UM, NOW MATT, YOU MADE THE POINT ABOUT, YOU KNOW, ERCOT, IT SOUNDS LIKE YOU'RE LOOKING AT 39 59 B FOUR IS WHERE YOU'RE, YOU'RE LOOKING AT SOME OF THE QUALIFICATION DIFFERENCES.
SO YOU'RE, YOU'RE READING D AND B TOGETHER IN THERE.
IS, IS THAT INTERPRETATION? UH, NO, NO, I'M NOT LOOKING AT B FOR JUST READING D TWO A AND B AS SEPARATE, UH, REQUIREMENTS.
BUT WHAT I'M HEARING, UH, SHAMS SAY, AND SHAMS CORRECT ME IF YOU'RE SAYING OTHERWISE, IS THAT D TWO A AND B ARE OVERLAPPING.
SO THE, UM, ABILITY TO BE ONLINE AND DISPATCHABLE NOT MORE THAN TWO HOURS IS DISTINCT FROM BEING CAPABLE OF RUNNING FOR AT LEAST FOUR HOURS THAT IT'S HSL.
BUT I THINK THOSE ARE, UH, READ TOGETHER.
SO IF IT'S, IT NEEDS TO BE, UM, ONLINE AND DISPATCHABLE WITHIN TWO HOURS AND THEN AFTER THAT RUN FOR, UM, CAPABLE OF RUNNING FOR AT LEAST FOUR HOURS OF THE RESOURCES HSL FOR QUALIFICATION.
[02:10:03]
SO I'M JUST READING THOSE TWO TOGETHER.I THINK MATT, EVEN THIS LANGUAGE DOESN'T SAY THAT.
AND I THINK WHAT UM, WHAT DAVE WAS SAYING IS, IF I CAN GET TO HSL, I'M QUALIFIED UP TO HSL.
I DON'T, UH, I'M, IF I CAN GET TO LSL, I'M QUALIFIED UP TO LSL, SO DON'T NEED TO GET TO HSL IN TWO HOURS AND BE AT HSL FOR FOUR HOURS AS SOON AS I'M CALLED ON.
I THOUGHT WHAT I HEARD DAVE SAY WAS, IF I CAN GET TO JUST START UP AND GET TO LSL IN TWO HOURS, THAT I'D BE QUALIFIED FOR THAT.
AND OF COURSE, I'D HAVE TO BE ABLE TO RUN FOR FOUR HOURS AT LSL.
UH, BUT THE HSL THAT, THOSE ARE TWO DIFFERENT, TO ME, THOSE ARE TWO DIFFERENT QUALIFICATIONS.
YOU KNOW, IF I GET TO HSL, YEAH, I SHOULD BE ABLE TO RUN AT HSL FOR FOUR HOURS, BUT THERE'S NOTHING THAT SAYS I NEED TO GET TO HSL IN TWO HOURS IN ORDER TO BE QUALIFIED TO PROVIDE DRRS.
UH, I'M JUST, I'M NOT FOLLOWING THAT.
IT'S, UH, IT SEEMS LIKE THAT IS WHAT IT IS SAYING HERE.
I MAYBE WE'RE TALKING, WE'RE GETTING, WE'RE TALKING ABOUT QUALIFICATION VERSUS, UH, REALTIME PERFORMANCE.
SO IF REALTIME PERFORMANCE, YOU'RE GETTING TO YOUR H TO YOUR LSL AFTER, UM, TWO HOURS, THEN YOUR, UM, DRS AWARD IS YOUR LSL, AND YOU CAN, AND YOU CAN RUN AT YOUR LSL FOR FOUR HOURS.
THAT'S, THAT'S REAL TIME PERFORMANCE.
BUT AT QUALIFICATION, YOU'RE GETTING TO YOUR HSL AND THEN YOU'RE RUNNING AT YOUR HSL FOR FOUR HOURS.
SO, SO YOU'RE SAYING TO QUALIFY I HAVE TO BE FROM OFFLINE, I HAVE TO GO ALL THE WAY TO HSL IN TWO HOURS AND BE ABLE TO RUN FOR FOUR HOURS, SORRY.
IN TWO HOURS AND THEN RUN FOR FOUR HOURS AT HSL.
THAT'S, THAT'S MY UNDERSTANDING.
AND, AND DEPENDS ON WHAT YOU TELLING AS YOUR HSL AT THAT TIME DURING QUALIFICATION.
THE SAME THING WITH WHAT WE'RE DOING FOR BATTERIES.
SO, SO IF YOU CAN ONLY GET UP TO LSL, THEN YOUR LSL IS EQUAL TO HSL.
I WON'T TELL LIMIT LSL EQUAL TO HSL 'CAUSE I STILL HAVE ROOM, RIGHT? NO, WHAT I'M SAYING IS THAT DURING DRRS QUALIFICATION, RIGHT? RIGHT.
THAT'S HOW WE ARE USING THE LANGUAGE THAT'S IN THE, THE LAW, RIGHT? SO WE ARE SAYING THAT, HEY, WHAT CAN YOU DO IN TWO HOURS AND STAY AT THAT LEVEL FOR FOUR HOURS? RIGHT? SO THEY MIGHT SAY, HEY, I, I, I REALLY CAN GO ONLY UP TO LSL.
RIGHT? SO WE ARE GONNA SAY THAT FOR ALL PURPOSES OF THE QUALIFICATION, YOU'RE TELE LIMITED HSL DURING THE QUALIFICATION PROCESS IS WHAT YOUR NORMAL LLSL WILL BE.
AND YOU GUYS ARE TORTURING THIS.
THE LANGUAGE IS WRITTEN POORLY.
UH, I THINK IT, I THINK IT'S PRETTY CLEAR.
IT'S SAYING THAT YOU HAVE TO HAVE A TWO HOUR START AND YOU HAVE TO BE ABLE TO RUN AT FOUR HOURS WHEN YOU GET TO HSL.
IT DOESN'T SAY HOW, HOW MUCH TIME YOU HAVE TO GET TO HSL.
BUT CHARMS LOOK AT IT FROM OPERATIONS WHEN THEY WANT TO CALL ON THIS RESOURCE, THEY HAVE NO IDEA.
ARE YOU THINK THAT THEY SHOULD HAVE ANOTHER TOOL THAT SAYS, LOOK AT THE RAMP RATES AND THEN THE GUYS CHANGE THE RAMP RATES? THEY DON'T FOLLOW THE RAMP RATES.
SO IT WOULDN'T, YOU KNOW, IF IT GETS DEPLOYED FROM OFFLINE, ONLINE, YOU KNOW, IT GETS ONLINE DISPATCHABLE AT LSL, BUT THEN WON'T RTC SCED TAKE THAT SAME CAPACITY AND, YOU KNOW, ASSIGN IT TO WHEREVER IT WANTS? YEAH.
YOU KNOW, THE, THE, THE, THE ISSUE HERE IS ALL THAT THE QUALIFICATION IS DOING IS PUTTING AN UPPER BOUND ON YOUR AWARD.
BUT IN REAL TIME, WE WILL LOOK, IF YOU'RE A GENERATION RESOURCE, WE'LL LOOK AT YOUR RAMP RATES AND THEN SEE WHAT YOU CAN PROVIDE.
BUT ALL THAT THE QUALIFICATION DOES IS PUT AN UPPER BOUND ON WHAT YOUR MAXIMUM AWARD CAN BE.
RIGHT? IF IT'S A BATTERY, YOU KNOW, YOU MAY HAVE MAYBE ONLY 10 MEGAWATT HOURS OF, UH, JUICE LEFT.
YOU MIGHT BE QUALIFIED FOR A HUNDRED MEGAWATTS OF DRRS.
BUT IF YOU'RE SITTING WITH 10 MEGAWATT HOURS OF SOC, THE MAXIMUM YOU CAN GET AWARDED IN REAL TIME IS TWO AND A HALF MEGAWATTS.
SO, SO TO ME, THE THE, WE HAVE CHECKS, WE HAVE CHECKS IN REAL TIME CO-OP OPTIMIZATION THAT DOESN'T LET PEOPLE GAME THE SYSTEM.
SO WE, ALL WE REALLY TALKING ABOUT IS WHAT IS YOUR UPPER BOUND IN QUALIFICATION PROCESS.
WE, YOU WANT TO GIVE AS MUCH AS POSSIBLE JUST TO CREATE LIQUIDITY AND ALL THAT KIND OF STUFF.
LET'S GO AHEAD AND GET BACK TO THE QUEUE.
UH, SHANE AND KEVIN, LET'S, LET'S MAKE IT QUICK SO WE CAN GET THROUGH THE REST OF THE COMMENTS.
THANK YOU SHANE, THOMAS, MICHELLE, UM,
[02:15:02]
COUPLE OF QUESTIONS NOW BECAUSE I JUST GOT A LITTLE BIT OF CONFUSED AT THE END THERE.SO IS, THERE'S ONLY ONE QUALIFICATION AMOUNT, RIGHT? THERE'S NOT LIKE AN ONLINE AND AN OFFLINE QUALIFICATION NUMBER? NO.
THERE IS AN OFF ONLINE AND OFFLINE QUALIFICATION.
I MEAN, YOU CAN SEE IT OVER THERE.
I WAS A LITTLE CONFUSED ABOUT WHAT COMES OUT OF THAT.
SO THERE'S LIKE TWO NUMBERS THEY'RE TRACKING.
UM, AND I KIND OF WANTED TO THEN, I GUESS THINK ABOUT SOMETHING ELSE THAT WE, THERE'S BEEN A LOT OF TALK ABOUT HAVING DIFFERENT, UH, DURATION REQUIREMENTS.
SO WE'VE GOT LIKE THE MINIMUM OF FOUR, BUT HAVING POTENTIALLY A HIGHER NUMBER IN THE WINTER, IS THAT LIKE FEASIBLE IN THE SYSTEM? IS THE THOUGHT THAT THEY WOULD, THAT WOULD JUST BE HANDLED BY REAL TIME EXPECTATIONS, OR YOU'D HAVE TO EVEN TRACK MORE QUALIFICATION NUMBERS AND SUBSTITUTE THEM IN AND OUT? IT'S, IT'S, IF YOU WANT TO MAKE IT A DYNAMIC QUANTITY, IT'S GONNA BE DIFFICULT.
THE, ONE OF THE THINGS THAT POPS TO MY MIND IS, UM, IF I RUN THE DAY AHEAD MARKET TODAY, RIGHT? UM, AND TODAY THE, THE REQUIREMENTS IS FOUR HOURS, BUT TOMORROW IT JUMPS TO EIGHT HOURS.
SO THE DAY AHEAD MARKET HAS TO BE DIFFERENT THAN THE CURRENT REALTIME MARKET.
SO THERE'S A BUNCH OF THINGS WE HAD TO LOOK AT THE DATES AND TIMES WHEN THIS IS EFFECTIVE.
AND THERE'S BEEN SOME TALK ABOUT, YOU KNOW, HAVING A HIGHER, UH, DURATION REQUIREMENT IN THE WINTER AND THINGS LIKE THAT.
SO I'M TRYING TO THINK TRANSITION TIMES THAT YOU HAVE TO BE VERY CAREFUL ABOUT THAT.
KEVIN? YEAH, I JUST GOT A, I WAS LOOKING AT THE SLIDE.
I JUST WANNA MAKE SURE I'M NOT MISSING SOMETHING HERE.
COLD START QUALIFICATION FOR OFFLINE.
I DON'T BELIEVE ONLY CERTAIN PEAKERS, NO COMBINED CYCLES, NO COAL PLANTS.
WE'LL HAVE A COLD START TWO HOURS OR LESS.
SO ARE THEY NOT QUALIFIED IN THIS MARKET FOR OFFLINE? MAYBE OFFLINE? YEAH.
UH, I'M JUST SAYING USING THAT, I'M JUST MAKING SURE I UNDERSTAND THE COLD START PHRASE THERE.
DOES THAT MEAN NO COMBINED CYCLES BE QUALIFIED IN THIS MARKET? I'M ASSUMING THERE WILL BE A BUNCH OF COMBINED CYCLES THAT THE ONE ON ZERO CAN START UP WITHIN TWO HOURS.
NOT IN, I'M SAYING IF WE'RE USING THE, THE GENERATION TELECO, HERE'S MY WARM START, HERE'S MY HOT START, HERE'S MY COLD START.
IF WE'RE SAYING WE'RE FOCUSED ON COLD START AS JUSTIFICATION OF QUALIFICATION, WE DO THE SAME THING WITH OFFLINE.
BECAUSE WE WANT TO MAKE SURE THAT WE CAN GET THEM ANYTIME WE CALL ON THEM.
MR. HALEY? UM, I WOULD KEVIN, ADD MY QUESTION.
I WAS WONDERING IF IT WAS A TRUE COLD START.
COLD START, OR IF IT WAS JUST AN OFFLINE START.
UM, BUT IF IT'S, IT'S AT A COLD VERSUS WARM VERSUS HOT, THOSE ARE VERY DIFFERENT THINGS.
IT, IT IS COLD START THE COLD START UP TIME.
SO, AND I'M GUESSING IT'S THE COLD START TIME THAT YOU HAVE ALREADY FILED WITH ERCOT? YES.
SO THAT MAKES IT EASY NOT TO GAME.
LET'S GET TO OUR REGULARLY SCHEDULED PROGRAMMING.
WE'RE GONNA START WITH, UH, TSSA COMMENTS.
UH, MARK STOVER, ARE YOU AVAILABLE TO GIVE US AN OVERVIEW? I'LL CHECK AND SEE IF HE'S ON THE PARTICIPANT LIST HERE.
I'M NOT SEEING MARK, SO WE'LL MOVE FORWARD TO, UH, THE JOINT COMMENTERS.
I'M SORRY, WERE YOU ASKING FOR TSSA? YES, I WAS.
UM, UM, I'M, I'M GONNA DO THE COMMENTS ON BEHALF OF TSSA, UM, TODAY, JUST REAL QUICKLY, 'CAUSE I KNOW THERE'S A LOT OF COMMENTS.
YOU KNOW, TSSA SUPPORTS THE INCLUSION OF E SRS AS ELIGIBLE RESOURCES, UM, TO PROVIDE DRRS.
AND WE THINK THAT'S, UM, CONSISTENT WITH THE STATUTE AND IT'S JUST GOOD PUBLIC, PUBLIC POLICY.
UM, REGARDING THE STATUTORY CONSTRUCTION, UM, IN SUBSECTION A OF THAT SECTION OF PURA, THERE WAS A DEFINITION FOR NON DISPATCHABLE.
UM, THE LEGISLATURE DIDN'T PROVIDE A DEFINITION FOR DISPATCHABLE, BUT UM, CREATED A BINARY CLASSIFICATION BETWEEN DISPATCHABLE AND NON DISPATCHABLE BASED UPON ATTRIBUTES.
AND THAT ATTRIBUTE BEING WHETHER OR NOT YOUR OUTPUT WAS CONTROLLED PRIMARILY BY FORCES OUTSIDE HUMAN CONTROL.
[02:20:02]
BASED UPON THAT SORT OF BINARY CLASSIFICATION SYSTEM IN THIS PART OF THE STATUTE, UH, BECAUSE SR'S OUTPUT IS NOT CONTROLLED PRIMARILY BY FORCES OUTSIDE OF HUMAN CONTROL, UM, IT BELONGS IN THE DISPATCHABLE, UM, CATEGORY BY, YOU KNOW, DEFINITION BY NEGATION.SO, UM, WE FEEL THAT CLEARLY THESE RESOURCES ARE CONTEMPLATED BY THE STATUTE THAT'S ALSO, UM, SUPPORTED BY THE LEGISLATIVE HISTORY.
UM, THAT'S CITED IN OUR COMMENTS.
I WON'T GO INTO TOO THAT TOO MUCH DETAIL, BUT THERE WAS AN AMENDMENT THAT SHORTENED THE DURATION REQUIREMENT.
IT WAS SPECIFICALLY, UM, MADE TO SUPPORT THE PARTICIPATION OF BATTERIES.
UM, BUT BEYOND, YOU KNOW, THE STATUTORY, YOU KNOW, INTERPRETATION, UM, IT'S JUST GOOD POLICY TO HAVE BATTERIES PARTICIPATE IN DSSR.
THEY'RE FAST RESPONDING, THEY'RE EFFICIENT.
UM, THEY'RE, YOU KNOW, THEIR FLEXIBILITY MAKES THEM OPTIMALLY SUITED TO RESPOND TO THE QUOTE INNER, INNER OUR OPERATIONAL CHALLENGES.
YOU KNOW, THAT'S ONE OF THE SPECIFIC DESIGN CRITERIA IN THE LAW.
UM, AND THEY, THEIR PARTICIPATION IN ANCILLARY SERVICES HAVE, UM, RESULTED IN LOWER COSTS FOR CUSTOMERS AND PROVIDED A LOT OF A RELIABILITY FOR THE GRID.
SO WE JUST THINK IT'S, UH, CONTEMPLATED BY THE STATUTE AND, UH, OBVIOUSLY THEY ARE WELL SUITED TO BRING THESE BENEFITS TO THE MARKET AT A, UM, REASONABLE COST.
AND, UM, THEY SHOULD BE INCLUDED.
UH, NEXT SET OF COMMENTS THAT ARE UP ARE THE JOINT COMMENTERS, UH, JUPITER AND ENG G.
YEAH, I'LL GO AHEAD AND START ON THAT RATHER THAN REPEAT A WHOLE LOT OF STUFF THAT'S BEEN DONE HERE.
UH, WHAT WE'RE LOOKING AT, AND THE REASON WE FILED THAT, OF COURSE LORI HIT A LOT OF POINTS THERE, IS THAT WE, THERE'S NO REASON FROM A TECHNOLOGY STANDPOINT OR FROM AN IT STANDPOINT OR ANY OTHER STANDPOINT, THAT, UH, ESR SHOULD BE TIED TO THE RESOURCE ADEQUACY PIECE THAT'S IN 1310.
UH, WE THOUGHT THAT 1500 WAS ALSO CLEAR AND IT WAS TECHNOLOGY NEUTRAL.
AND WHEN I SAY THAT, I MEAN, WE'RE TALKING ABOUT ESRS RIGHT NOW.
I DON'T KNOW WHAT WE'LL BE TALKING ABOUT NEXT YEAR, BUT GOOD MARKET DESIGN STAYS TECHNOLOGY NEUTRAL.
THIS DOES, SO THEREFORE IT SHOULD BE DONE IN THAT MANNER.
AND THAT'S WHY WE PUT PUT, UH, STORAGE INTO 1309 BECAUSE IT TECHNICALLY MEETS THE CRITERIA THAT'S UP THERE FOR QUALIFICATION.
AND I'M GLAD THAT MATT AND DAVE AND S HIT UH, THE COMMENTS THAT WERE BROUGHT UP ON THE HSL ISSUE TO CLARIFY THAT CORRECTLY ALSO.
SO THAT'S REALLY THE MAIN REASON.
IT'S GOOD MARKET DESIGN TO, TO KEEP IT TECHNOLOGY NEUTRAL.
WHATEVER MEETS THAT TECHNOLOGY, UH, CRITERIA FOR QUALIFICATION SHOULD BE INCLUDED REGARDLESS OF WHAT THAT IS.
AND THEN ALSO IT'S GOOD PRACTICE TO HAVE AS MANY RESOURCES FOR LIQUIDITY AS YOU CAN GET INTO THESE SO THAT YOU DON'T OVERPRICE PRODUCTS JUST BECAUSE YOU'RE LEAVING OTHERS OUT.
SO WITH THAT, I'LL, UH, I'LL TURN IT OVER TO CAITLIN FOR HER TO ADD SOME OTHER THING.
WELL, LET ME, CAN I HIT AN IMM COMMENT FROM THEIR COMMENTS? CAN I MAKE A COMMENT ON THEIRS? 'CAUSE YOU KIND OF HIT THAT'S WHAT I WAS GONNA DO.
AT THE END, YOU HIT THREE PIECES.
UH, YOU KNOW, YOU SAID, UH, YOU KNOW, 1309, THEN YOU SAID YOU COULD, UH, BIFURCATE THE ESRS FROM, AND I'M PARAPHRASING 'CAUSE I CAN'T REMEMBER THE EXACT THREE YOU HAD, UH, TO DO THAT, UH, THOUGHT ABOUT THAT.
BUT THERE'S NO REASON TO WRITE ANOTHER NPRR TO DO THAT.
UH, TO ME THAT'S JUST ADDING TIMEFRAME AND TIME AND WASTE FOR ALL OF US.
IF IT'S, IF IT'S LEGITIMATE TO BE INVOLVED, THEN IT'S LEGITIMATE TO BE INVOLVED IN, IN, IN 1309.
SO LET'S JUST PUT IT THERE AND DEBATE IT OUT AT THAT POINT RATHER THAN WRITING ANOTHER PIECE OF PAPER TO DO IT.
SO THAT'S KIND OF WHAT I LOOKED AT ON THAT PIECE.
ONE THING THAT I DID SEE IN THERE ALSO THAT YOU COMMENTED ON THAT I THINK DOES NEED TO TAKE A LOOK AT THAT'S KIND OF OUTSIDE THE SCOPE OF THIS, IS IF DRRS IS LOOKING AT THE FOUR HOUR DURATION ISSUE THAT ERCOT ISS TRYING TO DEAL WITH, WE PROBABLY DO NEED TO GO BACK.
AND WHENEVER I BELIEVE KEITH AND EVERYBODY TALKED ABOUT IN THE 2027 ANCILLARY SERVICE METHODOLOGY, WE WOULD REVISIT THE DURATIONS ON THAT.
I THINK THAT SINCE WE'RE GONNA GET 1309 IN PLACE, WE NEED TO CONSIDER ALL THAT IN TO THE METHODOLOGY ON THE FOUR HOUR SOC FOR NON SPEND VERSUS D-R-R-S-M THAT I THINK THAT ALL PLAYS A PART WE NEED TO KEEP IN MIND.
SO I JUST WANNA BRING THOSE THREE PIECES OUT, THEN I'LL TURN IT OVER TO, TO CAITLYN.
YEAH, I THINK, YOU KNOW, WHAT I WOULD ADD IS JUST BEYOND TALKING ABOUT THE MERITS OF STORAGE, WE'RE JUST NOT AWARE OF A SUBSTANTIVE REASON THAT STORAGE PARTICIPATION HAS TO BE LINKED WITH THE, UH, RESOURCE ADEQUACY MECHANISM.
AND SO, I'LL, I'LL DIFFER FROM BOB A LITTLE BIT.
WE'RE, WE'RE JUST NOT AWARE OF A SUBSTANTIVE
[02:25:01]
REASONS.SO WE WOULD REALLY LIKE THEM IN DIFFERENT NPR IF THERE'S A, A TECHNICAL REASON THAT ESR PARTICIPATION SHOULD NOT BE IN IN 1309.
I THINK OUR SECOND PREFERENCE IS, IS A SECOND MP OR A THIRD NPR.
I GUESS TO ANDREW'S POINT, IT ONLY BOTHERS ME THAT 1311 IS ALREADY ASSIGNED TO ANOTHER NBRR AND THE NUMBERING IS GOING TO BE COMPLETELY OFF
ALRIGHT, LET'S GO AHEAD AND MOVE FORWARD TO ADVANCED POWER ALLIANCE AND AMERICAN CLEAN POWER ASSOCIATION COMMENTS.
I, I DON'T SEE JUDD OR CHARLIE ONLINE, UH, BUT IS ANYONE AVAILABLE TO SPEAK TO THOSE COMMENTS? KEN'S HERE.
YEAH, FOR THE VAN KEN DONNO FOR THE ADVANCED POWER ALLIANCE.
UM, AGAIN, WE'RE, WE'RE BACK TO, I THINK WE'RE HITTING THE SAME POINT AGAIN AROUND ENERGY STORAGE RESOURCES.
WE THINK THEY SHOULD BE PART OF THIS.
SO THAT'S KIND OF BASICALLY WHAT'S THERE.
LAST UP ARE THE TEBO COMMENTS.
UH, BRYN BAKER, ARE YOU AVAILABLE? HI, THIS IS JULIANA GIANNI.
I'M SPEAKING ON BEHALF OF TEBO.
WE, UM, BROADLY WE ARE IN SUPPORT OF 1309, BUT WITH THAT BEING SAID, WE'RE GONNA ECHO OTHER STAKEHOLDERS IN THE ROOM AND REQUEST THAT ENERGY STORAGE RESOURCES BE EXPLICITLY INCLUDED IN THE RESOURCE TYPES THAT ARE ELIGIBLE TO PROVIDE DRRS.
SO OVERALL IN SUPPORT OF THE NPRR, WITH THAT ONE REVISION TO THE LANGUAGE.
UH, CAITLYN, DO YOU HAVE A COMMENT? I HAVE A QUESTION.
I'M GONNA SAY, MY COMMENT IS A QUESTION NOW TO, TO
IS THERE A SUBSTANTIVE REASON THAT ERS OR ESR PARTICIPATION NEEDS TO BE IN THE SAME NPRR AS THE CAPACITY MECHANISM RESOURCE ADEQUACY MECHANISM? I THINK WE'VE RECOGNIZED THAT THERE IS A, A LINKAGE BETWEEN THEM IN THE SENSE THAT THEY REPRESENT DISCREET POLICY DECISIONS THAT THAT NEED TO BE MADE.
WE WANT TO ARTICULATE THE, UH, THE MEANS BY WHICH WE WOULD IMPLEMENT THOSE, UH, THOSE POLICY DECISIONS WORTHY TO BE MADE AND, UH, AND INCLUDE THEM IN, UH, IN A DISTINCT NPR IN THAT WAY TO, TO KEEP THEM SEPARATE FROM THE, UH, 1309, WHICH WE THINK IS THE, UM, WHICH WAS IN OUR VIEW THAT THE, THE CLEANEST PATH FORWARD TO, TO BRING IT BACK TO, UH, THE BOARD AND THE, AND THE TIMEFRAME THAT, UH, THAT THEY'VE ASKED US TO, AND, AND ANTICIPATING THE, UH, THE S QL DISCUSSION AROUND THAT.
AND SO THE ALIGNMENT BETWEEN BOTH THE RELEASE FACTOR AND THE ENERGY STORAGE PARTICIPATION AND THE WAYS TO ENABLE THAT MADE SENSE TO ARTICULATE TOGETHER.
BUT THAT'S MORE REASON MAYBE TO DELAY STORAGE PARTICIPATION FROM 1309, BUT IT'S NOT NECESSARILY A REASON TO HAVE IT WITH THE RELEASE FACTOR.
I, I THINK YOU, YOU WERE ASKED THAT THE COMMISSION, I WON'T QUOTE YOU, BUT, UM, I BELIEVE THAT, YOU KNOW, COMMISSIONER ALTMAN ASKED ABOUT THREE SEPARATE NPR R SO THERE'S NO REASON WHY THAT THAT WOULDN'T WORK.
THERE'S NOT A SUBSTANTIVE REASON TO HAVE THE RELEASE FACTOR AND THE ESR PARTICIPATION TOGETHER IS WHAT I'M GETTING AT O OTHER THAN THE, THE ALIGNMENT FROM THE PERSPECTIVE OF DISTINGUISHING THE, UH, THE CORE DRS AS AN ANCILLARY SERVICE APPROACH FROM THE, THE DISCREET POLICY DEC DECISIONS THAT NEED TO BE MADE.
AND SO THERE'S AN ALIGNMENT THAT WE SAW THERE.
NEXT UP, NED, SO MY QUESTION WAS KIND OF GETTING AT WHAT I, WHERE I THINK Y'ALL WERE JUST GOING, BUT IT IS BEEN A WHILE SINCE I'VE LOOKED AT 1309 AND 1310 SIDE BY SIDE DOING THE, THE LINE BY LINE COMPARISON.
BUT I THINK REALLY THE, THE, THE PRIMARY DIFFERENCE IS THE ESR QUALIFICATION AND THEN THE, THE RELEASE FACTOR AND THE, THE DEMAND CURVE, WHICH IS THE EXACT SAME AS 1309, IF THE RELEASE FACTOR IS ZERO.
AND SO IF THE RELEASE FACTOR IS ZERO UN UNLESS, AND UNTIL THE COMMISSION SAYS TO CHANGE IT, AND WE CIRCLE BACK TO OUR EARLIER DISCUSSION ABOUT, YOU KNOW, IF, IF IT ENDS UP GOING THE PATH WHERE WE'RE GOING, YOU KNOW, FOLKS WANT ESRS IN, IN THE FIRST VERSION, THEN WHY NOT JUST GO 1310? BUT WHAT IS THE SUBSTANTIVE REASON THAT YOU NEED THE ABILITY FOR THE RELEASE FACTOR DEPENDENT ON ESR EXPRESSION? IT GOES WELL, IT GOES TO THE YOU JUST WANT IT FASTER ALSO.
RIGHT? YOU WANT THE SAME THING WE WANT, YOU WANT IT FASTER.
WELL, AND THE COMMON, THE DISCUSSION ABOUT, YOU KNOW, IF YOU WANT TO HAVE THE OPTION, IT'S NEGLIGIBLE DIFFERENCE TO BUILD THE OPTION AND NOW THEN IT IS TO GO BACK AND GO THROUGH THIS PROCESS AGAIN LATER.
[02:30:02]
AND I'LL NOTE THAT OUR, OUR LANGUAGE IS THE EXACT SAME AS AS OUR CUTS START 13, 10.WE JUST, YOU KNOW, AIRLIFTED THE LANGUAGE.
DO I NEED TO WAIT IN A QUEUE OR CAN I RESPOND? ASK, ASK BLAKE.
I THINK I'D LIKE TO DEFER TO MATT FIRST.
UH, AND THEN WE CAN GET TO YOU, BOB, UH, MATTHEW FOR MATTHEW ARTHUR FER.
HEY, CAN PEOPLE HEAR ME? YES, CYRUS? YES, WE CAN, CAN YOU PLEASE HOLD, WE'LL GET YOU IN THE QUEUE.
UM, I JUST LIKE, CAN YOU PUT ME IN THE, PUT ME IN THE QUEUE? SORRY, I'M ON THE PHONE.
INTERESTED TO HEAR ABOUT BEAUMONT.
UM, JUST TO SUMMARIZE, I GUESS ERCOT, UH, LEGAL POSITION ON, ON ESRS AND DRSI, I THINK THAT, YOU KNOW, OBVIOUSLY THE STATUTE DOESN'T REFER TO ANY PARTICULAR RESOURCE TYPES, INCLUDING ESRS.
SO, YOU KNOW, WE WOULD VIEW IT AS BEING, UH, PERMISSIBLE BUT NOT REQUIRED THAT ESRS UH, PARTICIPATE IN DRRS.
AND SO THAT'S WHY ESRS ARE, UH, IN THE SAME NPR 1310 WITH THE RESOURCE ADEQUACY MECHANISM, UH, BECAUSE, YOU KNOW, BOTH ARE INTENDED TO PROVIDE OPTIONALITY TO THE, TO THE COMMISSION.
AND THE COMMISSION CAN MAKE THAT DETERMINATION, BOB.
UH, THERE ISN'T ANY, IT OR ANY OTHER TECHNICAL REASON THAT THAT NEEDS TO BE TIED TO THE, TO THE RELEASE FACTOR.
WE, WE TOOK THE WORDS EXACTLY OVER THE WAY THEY WERE TO MAKE SURE THAT THERE WERE NO DIFFERENCES.
AND, AND, AND I WILL SAY, MATT, BASED ON WHAT YOU JUST SAID, THAT, I MEAN, IT WOULD BE LIKE ME SAYING, WELL, 1500 IS TECHNOLOGY NEUTRAL, BUT YOU KNOW WHAT, WE DON'T WANT COAL PLANTS IN THERE, SO WE'RE GONNA LET THE COMMISSION DECIDE WHETHER COAL PLANTS COULD BE IN THERE, EVEN THOUGH THEY, THEY, THEY COMPLY.
THAT'S BASICALLY WHAT YOU SAID.
BUT YOU JUST SAID IT WAS ESRS THAT WERE, WERE QUESTIONED.
AND, AND THAT'S WHAT THIS GETS TO.
AND THERE IS NO REASON THAT ANY TECHNOLOGY, REGARDLESS OF WHAT IT IS, WHETHER IT'S THE SRS, WHETHER IT'S COAL PLANT, UH, WHATEVER IT IS, OR, OR THE TECHNOLOGY THAT WAS JUST DISCUSSED ON THE PHONE, UH, FROM A, FROM A PUN, THAT IF THEY MEET THAT CRITERIA FOR QUALIFICATION AND COMPLIANT AND CAN SUPPLY IT, THAT THEY SHOULD BE DISALLOWED FROM DOING THAT.
IT JUST DOESN'T MAKE DESIGN SENSE OR ANY SENSE IN MY MIND.
SO, UH, THAT'S WHY I THINK THAT 13, THAT 1309 SHOULD INCLUDE, AND WE'RE HAVING TO NAME 'EM OUT BECAUSE OF THE DISCUSSION WE'RE HAVING NOW THAT THERE'S BEEN A QUESTION ABOUT IT.
SO, AND IT SHOULDN'T EVEN HAVE TO BE SAID BECAUSE IT IS TECHNOLOGY NEUTRAL AND THEY COMPLY, SO THEY SHOULD QUALIFY.
SO, UH, I'LL THROW THAT OUT THAT WAY.
KEITH, WOULD YOU LIKE TO RESPOND? UH, WE CAN GO THROUGH THE REST OF THIS QUEUE AND I'LL RESPOND AT THE END.
OKAY, LET'S TAKE UP NED AND THEN WE'LL GO TO KEITH BEFORE WE GET TO CYRUS'S COMMENTS.
UM, SO BOB, YOU KNOW, 99 TIMES OUT OF A HUNDRED, I'M ALWAYS GONNA AGREE YOU WANT SOMETHING TO BE TECHNOLOGY NEUTRAL.
THIS IS A UNIQUE CASE THOUGH, BECAUSE IT'S SET IN STATUTE IN THE CONTEXT OF, YOU KNOW, ALL OF THE, THE, THE, THE LEGISLATIVE HISTORY MM-HMM
AND SO IT IS, IT IS A UNIQUE CASE AND IT, YOU KNOW, THEY DID GIVE US SOME, SOME GUARDRAILS IN THERE ON WHAT QUALIFIES.
SO IT, IT'S NOT AS, IT'S NOT AS OPEN AND AS NORMAL, RIGHT? SO WE TALKED ABOUT LIKE CLRS FOR INSTANCE.
THEY, THEY, THOSE DON'T QUALIFY BASED ON THE WORDS IN THE STATUTE.
AND THERE ARE CERTAINLY LIMITS ON, ON WHAT'S IN THERE.
AND I THINK THERE'S ROOM TO, YOU KNOW, DEBATE WHAT THE LEGISLATIVE INTENT THERE WAS.
UM, AND I THINK WE'VE ALSO HEARD, YOU KNOW, THE COMMISSION OPINE THAT THERE IS A POLICY ELEMENT TO THIS THAT'S DIFFERENT THAN OTHER ANCILLARY SERVICES AS WELL.
SO I AGREE WITH YOU IN PRINCIPLE AND IN THE ABSTRACT IN THE SPECIFICS OF DRRS.
I THINK IT'S A LITTLE, WE'RE A LITTLE BIT MORE CONSTRAINED.
UH, I CAN AGREE WITH YOU THAT POLITICS ARE IN THE MIDDLE OF THIS, AND THAT'S EXACTLY WHAT YOU'RE SAYING.
UH, IT IS, BUT FROM A TECHNOLOGICAL STANDPOINT AND THE WAY THE STATUTE IS ACTUALLY WRITTEN, THERE IS NO DEBATE ON THAT.
IT IS WRITTEN WHERE IT SAID WHAT THE WORDS AND WORDS MATTER.
HERE'S WHAT THE WORD SAID, AND
[02:35:01]
THAT'S WHAT WE'RE GOING BY.WELL, ALL I'M DOING, AND I DON'T WANNA THROW CAITLYN IN THAT 'CAUSE I'M HAVING A, A LITTLE, YOU KNOW, HAVING MY OWN COMMENTS HERE, IS THAT THAT'S WHAT I'M GOING OFF OF.
THESE ARE THE WORDS THAT ARE SAID.
NOW, IF THERE'S A CONVERSATION WE NEED TO HAVE ON TIMING, THINGS LIKE THAT, THEN MAYBE WE CAN HAVE THOSE.
I'M NOT IN FAVOR OF THAT, AND I DON'T THINK THAT'S GOOD MARKET DESIGN, BUT WE CAN DISCUSS WHATEVER WE NEED TO DISCUSS.
I DON'T THINK WE EVEN NEED TO GET INTO THAT.
WE'RE WE'RE JUST SAYING MOVE IT FROM THIS NPR INTO THIS OTHER NPR BECAUSE IT DOESN'T NEED TO WAIT FOR THIS TOTALLY UNRELATED THING.
MAYBE TO PUT A FINER POINT ON, ON, PROBABLY WHERE I WOULD DRAW THE CONCLUSION THERE, AND I KNOW I'VE MADE THIS POINT BEFORE, IS 39 1 5 90 IS PART OF THE BROADER 35 1 5 9 FRAMEWORK THAT REQUIRES THE ERCOT MARKET TO MEET THE RELIABILITY STANDARD.
THERE'S A NUMBER OF DIFFERENT WAYS YOU GET THERE, UM, BUT THERE ARE POLICY CALLS THAT END UP GETTING MADE IN THE PROCESS.
BUT WHY DO YOU NEED ESRS TO PARTICIPATE IN AN ANCILLARY SERVICE IN ORDER TO MEET THAT STATUTE THAT YOU JUST CITED? LIKE, WHY, WHY DO YOU NEED TO PREVENT THEM FROM PARTICIPATING IN ANCILLARY SERVICE IN ORDER TO DO THAT? IT'S NOT RELEVANT.
SORRY, BLAKE, YOU CAN HAVE YOUR MEETING BACK.
KEITH, WOULD YOU LIKE TO RESPOND? YEAH, ACTUALLY MY, MY RESPONSE IS PROBABLY GONNA NOT MAKE PEOPLE FEEL GOOD, BUT I THINK, I DON'T THINK WE'RE PREPARED TO ANSWER THE QUESTION THAT BOB AND KAITLIN HAS ASKED RIGHT NOW.
THAT DOESN'T MEAN THAT WE WON'T BE PREPARED TO ANSWER THAT QUESTION, BUT NOT TODAY.
SO I PROVIDE NO ANSWER FROM CO'S PERSPECTIVE TODAY.
I, I KNOW I'VE SAID THIS BEFORE, BUT IT BEARS REPEATING.
OUR MIDDLE NAME IS ADVISORY AND THE 30 OF US IN THIS ROOM WHO VOTE ON ADVISORY ISSUES SHOULD GIVE AT ALL TIMES OUR BEST ADVICE TO THE POLICY LEADERS WHO MAKE DECISIONS ABOVE US.
AND I DON'T SEE ANY POINT IN REFRAINING IN THIS INSTANCE FROM GIVING OUR BEST ADVICE, WHICH APPEARS TO BE THAT ENERGY STORAGE RESOURCES MEET THIS'S ATTRIBUTE TEST THAT IS IN THE LEGISLATION THAT HAVE THE POSSIBILITY OF ADDING MORE LIQUIDITY TO THIS MARKET.
AND WE SHOULD GIVE THE COMMISSION AND THE BOARD OUR BEST ADVICE, WHICH IS TO ADD ENERGY STORAGE RESOURCES IN THIS PART OF THE NRR THAT NEEDS TO MOVE FORWARD ON A QUICK TIMELINE.
IF THE BOARD AND THE COMMISSION DO NOT LIKE OUR ADVICE, THEY CAN STRIP IT OUT.
BUT I THINK WE SHOULD MOVE FORWARD WITH IT.
AND I DON'T SEE THESE POLICY OR INTERPRETIVE REASONS WHY WE WOULD SLOW DOWN ON THAT.
BLAKE, I DON'T WANNA END ON MY OWN COMMENTS, BUT IF WE COULD WRAP THIS SECTION UP IN THE NEXT FIVE MINUTES SO WE CAN GET TO ERCOT SLIDES, BECAUSE WE DID ASSIGN THEM HOMEWORK AND THEY DID COMPLETE IT.
SO I'M HOPEFUL CYRUS IS AVAILABLE TO GIVE US AN OVERVIEW.
CYRUS, ARE YOU AVAILABLE? YES, I AM.
I I I'LL BE VERY, VERY BRIEF 'CAUSE MOST OF MY POINTS HAVE BEEN MADE.
YOU CAN HEAR ME CORRECT? OH, SO, UM, NOT ONLY DOES IT MAKE SENSE TO BE TECHNOLOGY, TECHNOLOGY NEUTRAL, NOT ONLY SHOULD ESRS BE IN 1309 BECAUSE OF THE CLEAR LANGUAGE OF THE STATUTE, BUT THE LEGISLATIVE HISTORY, UM, AS PART OF THAT LANGUAGE DISCUSS SPECIFICALLY A REASON TO SET THE REQUIREMENT AT FOUR HOURS SPECIFICALLY.
SO ENERGY STORAGE COULD PARTICIPATE IF THEY CAN MEET THOSE CRITERIA.
SO WE JUST FEEL LIKE IT WOULD MAKE THE MOST SENSE TO INCLUDE THEM FROM THE BEGINNING.
IN NPR 1309, I HAD SOME ADDITIONAL COMMENTS JUST ON THE, UM, ON THE DEMAND CURVE, BUT DIDN'T HAVE A SPECIFIC, UH, SUGGESTION ON IT, BUT JUST SAID THAT'S SOMETHING WE SHOULD LOOK AT AS WELL.
BUT WE ARE IN THE SAME CAMP AS EVERYONE ELSE WHO THINKS ESR SHOULD BE INCLUDED FROM THE BEGINNING.
AND WE THINK THAT MEETS BOTH THE LANGUAGE OF THE LAW, BUT ALSO THE INTENT OF THE, UH, AND I'LL, I'LL BE QUIET AFTER SAYING THAT.
[Market Timeline]
WITH THE PRESENTATION, UM, SO THIS IS A VERSION OF A SLIDE THAT WE HAVE, UH, PRESENTED BEFORE.SO I WILL TRY TO SPEED THROUGH THIS, UH, IN THE INTEREST OF TIME.
UM, SO THIS, YOU KNOW, JUST DESCRIBES, UM, HOW DRRS, UH, WORKS ACROSS, UH, DAY AHEAD, UH,
[02:40:01]
ROCK AND REAL TIME.JUST WANTED TO MENTION THE POINT THAT, UM, WHICH IS, UM, SOME FOLKS HAVE SOUGHT CLARIFICATIONS ABOUT THAT.
UH, R UM, WILL DEPLOY, UH, ONLINE DRRS, BUT IT'S, UH, IT DOES NOT PROCURE A-D-R-R-S.
UM, I THINK THAT'S ONE, UH, IMPORTANT ASPECT.
UM, AND THE WAY, UH, ROCKWOOD FUNCTION IS, IT WOULD PREFER, UM, IT WOULD GIVE PREFERENCE TO OFFLINE RESOURCES WITH DRRS, UH, AS THEIR CORP STATUS FOR COMMITMENT AHEAD OF, UH, OTHER OFFLINE RESOURCES.
AND THE WAY IT DOES THIS IS, UM, THE STARTUP AND MINIMUM ENERGY COSTS WILL BE SCALED, UM, COMING TO REAL TIME.
UM, UH, WE HAVE SOME EXAMPLES OF THIS LATER, BUT, UH, THERE IS, UH, AN ELIGIBILITY CHECK, UH, FOR REAL TIME, UH, TO MAKE SURE THAT, UH, RESOURCES ARE AVAILABLE TO THE ROCK PROCESSES, BOTH THE DR AND THE HOURLY ROCK FOR THE GIVEN OPERATING HOUR.
AND THE WAY, UM, THIS IS CHECKED IS, UH, BASICALLY THE RESOURCE, UH, SHOULD HAVE, UH, EITHER A STATUS OF DRRS OR ON, UM, OR OFF IT IS IF IT IS ALSO ELIGIBLE TO PROVIDE NONS SPIN.
UM, AND SO, UH, I HAVE A FEW EXAMPLES LATER ABOUT THIS, UH, ELIGIBILITY CHECK.
UM, ONE MORE POINT IS THE, UH, AS IMBALANCE SETTLEMENT.
UM, SO, UH, THERE'S A IMBALANCE SETTLEMENT SIMILAR TO HOW IT WORKS FOR, UH, OTHER ANCILLARY SERVICES.
[DRRS Real-Time Eligibility Validation Examples]
WE HAD SHOWN SOME, UH, EXAMPLES OF, UH, YOU KNOW, UH, ELIGIBILITY VALIDATION FOR REAL TIME.UM, AND SO I THINK THERE WAS A REQUEST TO SHOW SOME EXAMPLES WHEN IT DOESN'T WORK OUT.
SO, UM, SO THESE ARE, UM, WE ARE GONNA COVER THAT IN THE NEXT FEW SLIDES.
SO JUST TO, UH, UM, SO THIS IS WHAT I WAS MENTIONING, UH, EARLIER, THAT, UH, WE WANT TO ENSURE THAT, UH, RESOURCES, UM, ARE CONTINUOUSLY AVAILABLE TO R UH, SO THAT, UH, UH, R CAN, UH, COMMIT THEM.
AND SO WE WILL, UH, CHECK, UH, UH, FOR THIS ELIGIBILITY, UH, ACROSS, UH, DR AS WELL AS ALL, UH, HRA RUNS FOR THE GIVEN HOUR.
UM, AND JUST TO NOTE THAT AN OFFLINE RESOURCE, WHICH IS CARRYING DRS, MAY, UH, CHOOSE TO SELF COMMIT, UH, WHICH MEANS IT WOULD SHOW AS ON IN THE CALL.
UM, ONE POINT OF THIS IS THAT IT, THIS MEANS THAT, UH, DRS ELIGIBLE RESOURCES, UM, EVEN IF THEY ARE NOT, UH, OFFERING AND THEREFORE NOT AWARDED, UH, IN DAM, THEY CAN USE THIS, UH, FEATURE TO, UH, COME ONLINE, UH, AND GET, OR SORRY, UH, NOT COME ONLINE, BUT I SHOULD SAY TO GET, UH, DRS UH, ELIGIBILITY FOR THE REAL TIME.
SO THIS, UH, WE'VE ADDED THIS, UH, FUNCTIONALITY OR FEATURE TO, UH, INCREASE THE LIQUIDITY OF THE MARKET.
SO THE FLOW CHART KIND OF JUST, UM, SHOWS THAT CHECK.
I'LL NOT, UH, WALK THROUGH IT IN DETAIL.
UM, YEAH, SO I'LL JUMP STRAIGHT AWAY TO THE EXAMPLE.
UM, SO THIS IS AN EXAMPLE OF A GENERATION RESOURCE, UM, THAT IS, UM, AWARDED IN DRS IN THE DAM.
AND, UH, IT MAINTAINS, UH, ITS, UH, ELIGIBILITY FOR THE REALTIME AWARD BY TELEMETER, UH, COP STATUS OF DRRS, UH, FOR DR AS WELL AS, UH, ALL SUBSEQUENT HR.
AND SO THEREFORE, UH, IT, IT IS ELIGIBLE FOR THE REALTIME DRS AWARD.
UM, THIS IS AN EXAMPLE OF, UH, THE SECOND EXAMPLE IS EXAMPLE TOO, WHERE THE, UH, RESOURCE WAS NOT AWARDED, UH, DRRS IN THE DAM, BUT, UH, IT, UH, WANTED, UH, UH, TO GET AWARDS IN REAL TIME.
AND SO IT MAINTAINED ITS STATUS, UH, THROUGH DUC AND ALL HR FOR THAT GIVEN R AND THEREFORE, UH, IT WOULD BE ELIGIBLE FOR A-D-R-R-S AWARD IN REAL TIME, EVEN THOUGH IT WAS NOT AWARDED, UH, IN DAM.
UM, EXAMPLE THREE IS A SITUATION WHERE THE GENERATION RESOURCE DID NOT MAINTAIN, UH, ITS ELIGIBILITY FOR REAL TIME DRRS.
SO IT, IT WAS, YOU KNOW, IRRESPECTIVE OF WHETHER IT WAS AWARDED, UH, DRS IN THE DAM, UH, IT SHOULD HAVE, UH, MAINTAIN A COP STATUS OF DRS ON ON, BUT, UH, IT WENT ON OUTAGE, UH, SOMETIME DURING THE DAY AND REMAINED AN OUTAGE FOR THE REST OF THE DAY, AND THEREFORE, UH, IT WAS NO LONGER AVAILABLE TO, UH, ROCK AT SOME POINT OF TIME.
HENCE, UH, IT WAS NO LONGER ELIGIBLE FOR REAL TIME DRRS AWARDS.
[02:45:01]
TO THE PREVIOUS EXAMPLE IN THIS EXAMPLE, UH, THE RESOURCE, UM, DID COME BACK ONLINE, BUT IT, UH, REMAINED OUT, UH, FOR THAT ONE HOUR.AND SO, UH, BECAUSE IT, UH, MISSED OUT ON, OR IT WAS NOT SHOWING AS AVAILABLE IN ONE OF THE HRA RUNS, UH, THEREFORE IT LOST ITS, UH, ELIGIBILITY FOR REAL TIME DRS ABOUT.
[Day-in-the-Life Examples]
UM, SO THIS IS, WE HAVE SOME EXAMPLES IN RESPONSE TO SOME OF THE QUESTIONS WE GOT, UH, LAST TIME.UM, AND I THINK WE WERE ASKED TO SHOW EXAMPLES OF HOW THIS WOULD WORK, UH, FROM DAN THROUGH DUCK, UH, TO REAL TIME UNDER, YOU KNOW, UH, FAIRLY NORMAL CONDITIONS.
UM, AND SO AGAIN, UH, THESE EXAMPLES, UH, DO CONSIDER THE, UH, 1310, UH, DESIGN ASSUMING, UH, RELEASE FACTOR OF NON-ZERO VALUE.
UM, IN, UH, EXAMPLE FIVE, UH, WE HAVE A GENERATION RESOURCE, UH, THAT OFFERS AND IS AWARDED DRS IN DAM.
UM, WE, IT MAINTAINS ITS, UH, ELIGIBILITY FOR THE REAL TIME AWARDS.
UM, AND THEN IT IS, IT AGAIN OFFERS AND IS, UH, AWARDED DRS IN REAL TIME.
UM, EXAMPLE SIX IS A SITUATION, UH, WHERE THE GENERATION RESOURCE, UH, IS OFFLINE IN DAM.
UH, IT DID NOT OFFER, UH, OFFLINE DRS AND THEREFORE IT, UH, DID NOT RECEIVE THE DRS AWARD IN DAM.
BUT, UH, LATER, UH, IT WANTS, UH, UH, TO BE ELIGIBLE FOR REAL TIME DRRS, AND IT DOES THAT BY SETTING ITS COMP STATUS, AND THEREFORE WHEN IT OFFERS, UH, IT IS AWARDED, UH, DRS IN REAL TIME.
A QUESTION FROM, UM, YEAH, WE HAVE A QUESTION ON THE QUEUE.
YEAH, IT HAS TO DO, MY QUESTION HAS TO DO WITH JUST THE, THE MECHANICS OF R CLEARING AND THE FACT THAT WE WE'RE GOING TO INTRODUCE THIS NEW SET OF STUFF INTO THE R CLEARING.
ANY ISSUES, CONCERNS ABOUT JUST THE ABILITY FOR THAT RUCK ENGINE TO SOLVE IN AN APPROPRIATE AMOUNT OF TIME? IS THAT SOMETHING YOU'VE THOUGHT ABOUT AND HAVE DISMISSED IS NOT A PROBLEM? OR, AND I WOULD EXPECT SIDE TO BE ANSWERING THAT QUESTION.
SO THERE IS NO IMPACT TO RUCK BECAUSE ALL THAT WE ARE DOING THERE IS WHENEVER WE SEE A STATUS OF DRRS, WE SCALE THEIR STARTUP AND
AND SO IT'S NOT, THERE'S NOT A, THERE'S NOT A SIGNIFICANTLY DIFFERENT NUMBER OF RESOURCE THAT IT RESOURCES THAT IT'S HAVING TO CONSIDER OR ANYTHING.
NO, IT'S ALL THE THING, YEAH, IT'S ALL THE SAME STUFF.
I MEAN, THEY DIDN'T GET A DRS AWARD, THEY WOULD'VE BEEN OFFLINE ANYWAY.
IT'S JUST THAT WE ARE USING A DIFFERENT DOLLAR AMOUNT FOR THE STARTUP COST AND A DIFFERENT DOLLAR PER MEGAWATT HOUR FOR THE, UH, MINIMUM, MINIMUM ENERGY COST.
UM, SO THIS IS JUST A ILLUSTRATION, UM, TO BE CONSISTENT, UH, WITH THE, UH, PREVIOUS WORKSHOP, WE, UH, JUST USED A RELEASE FACTOR OF POINTED, WHICH WE HAD IN THE PREVI IN THE EXAMPLE IN THOSE, IN THAT WORKSHOP.
UM, SO LET'S SAY WE HAVE A GENERATION RESOURCE WITH, UH, HSLA HUNDRED, LSL 10, AND, UH, ITS QUALIFICATION, UM, IS, UH, 100 IN THIS CASE.
UM, AND, UH, FOR ITS ONLINE QUALIFICATION, UM, IT COULD, UH, RECEIVE AWARDS IN DAM, UH, AS SHOWN ON THE LEFT, UM, FOR ENERGY 35 OTHER AN SERVICES 45, AND THEN THE NON OVERLAPPING PORTION OF DRRS, UH, FOR 20.
SO THAT'S THE PORTION WHICH ACTS AS A OPERATIONAL RESERVE.
UM, IN THIS CASE, UH, ASSUMING, UH, CPCS OF FIVE, UM, UH, SETTLEMENTS WOULD WORK OUT TO IT, GETTING A PAYMENT OF, UH, $500, UM, ON THE RIGHT.
UM, LET'S ASSUME IT AGAIN OFFERED AND, UH, WAS AWARDED SIMILARLY.
UM, IT, UH, AGAIN, RECEIVES AWARDS AS SHOWN.
UM, AND THEN, UM, THERE IS NO, UH, MONETARY IMPACT OF IT.
UH, WHEN WE LOOK AT THE IMBALANCE SETTLEMENT YOUR TIME, SO, UH, ACROSS THE, IN REAL TIME, THE TOTAL DRS REVENUE WOULD BE $5.
THERE WAS A QUESTION FOR S UM, QUESTION FROM SHARMS, I BELIEVE.
SO, UM, LET'S SAY THAT I CAN GET TO MY LSL IN TWO HOURS.
SO I'M QUALIFIED FOR TWO HOURS AT A HUNDRED MEGAWATTS WHEN I'M OFFLINE, WHEN I'M ONLINE, I CAN GET TO 500 MEGAWATTS, YOU KNOW, RAMP UP TO MY HSL AT 500.
[02:50:01]
IN DRRS, I'M AVAILABLE, BUT I'M OFFLINE.WILL I GET A CREDIT OF 200 MEGAWATTS? AND THEN WHEN I COME ONLINE, I'LL GET A CREDIT OF 500? IS THAT HOW YOU'RE ENVISIONING IT? UM, YEAH, SORRY.
YOU WANNA GET THAT, UH, THE REP DOESN'T ASSIGN ANY MEGAWATT, UM, CREDIT OR ANYTHING.
IT JUST SAYS THAT, HEY, WERE YOU THERE, WERE YOU OFFERING DRRS, UM, TO THE SYSTEM? BECAUSE R MAY NOT COMMIT YOU.
MAYBE THEY DON'T NEED THE, YOU DON'T NEED THAT CAPACITY, BUT YOU'RE ELIGIBLE, SO, RIGHT.
BUT HOW MUCH AM I ELIGIBLE FOR? LIKE, WILL I GET PAID? NO, ALL THE R IS SAYING, ARE YOU ELIGIBLE OR NOT? AND THEN COME REAL TIME, IF YOU ARE OFFLINE IN REAL TIME, YOU GET OFFLINE DR.
IF YOU'RE ONLINE IN REAL TIME, YOU, YOU, YOU CAN GET UP TO YOUR ONLINE DRS QUALIFIED MEGAWATTS.
SO IN MY EXAMPLE, IF YOU'RE OFFLINE, YOU GET A HUNDRED MEGAWATTS.
AND IF YOU'RE ONLINE, YOU'LL GET 500 MEGA BUCKS.
BECAUSE R IS NOT PROCURING DRRS, IT'S, IT'S JUST LOOKING AT THE OFFLINE RESOURCES AND COMMITTING THEM.
AND IF YOU HAPPEN TO BE ON DRRS STATUS, WE JUST GET CATCHING THE FLAG GOES UP AND SAY, HEY, THIS GUY WAS THERE.
HE WAS PROVIDING DRSI MEAN, EVEN IF YOU'RE NOT COMMITTED, YOU'LL JUST SEE THAT YOU'LL DO THAT BOOKKEEPING FOR ACROSS ALL THE H TRUCKS.
SO IN THESE DAY AHEAD EXAMPLES, WHICH MEGAWATT WILL THE DAY AHEAD ENGINE USE IN AWARDING THE DRS IS THE, AGAIN, THE SAME THING.
IF YOU, IF YOU GET AWARDED OFFLINE DRS, IT'S AGAINST THE OFFLINE DRS QUALIFICATION.
BUT HOW DOES THE DAM DECIDE WHETHER IT'S OFFLINE OR WILL IT, IF IT GIVES ME ONLINE, WILL IT, I MEAN, EXACTLY LIKE HOW WE DO OFFLINE AND ONLINE NONS SPEND.
SO IT'LL COMMIT ME IF I GET ONLINE.
IF YOU COMMIT, YOU, YOU'LL GET ONLINE DRS IF YOU HAVE SUBMITTED A DLS OFFER.
REMEMBER FOR, UM, NONS SPIN, I THINK NONS SPIN IS A GOOD, GOOD WAY OF LOOKING AT IT.
THERE IS OFFLINE NONS SPIN OFFERS AND ONLINE NONS SPIN OFFERS.
WHEN WE, WHEN DOES DAM USE THE OFFLINE? IF YOU, IF, IF IT DECIDES THAT YOU'RE, IT'S NOT GONNA COMMIT YOU IN THE DAY AHEAD MARKET MM-HMM
AND IF YOU HAVE AN OFFLINE NONS SPIN, DR SORRY.
OFFLINE DRS AWARD, IT'LL AWARD YOU THAT.
SO IT COULD AWARD ME 'CAUSE IT'S 500 MEGAWATTS.
IF IT BRING ME ONLINE, IT COULD BRING ME ONLINE JUST FOR THE DRS PORTION BECAUSE IT'S GETTING 500 MEGAWATTS OF DRS.
SO IT COULD BE, I MEAN, JUST LIKE NONS SPIN, SAME THING.
IF YOUR NONS SPIN QUALIFICATION IS 500 MEGAWATTS AND YOUR OFFLINE IS ONLY A HUNDRED MEGAWATTS, RIGHT.
JUST TO SATISFY THE A SDC FOR SPEND MM-HMM
AND IN WHEN I'M TELEMETER, I'M OFFLINE.
I DON'T QUALIFY FOR OFFLINE DRS BECAUSE MY STARTUP TIME IS GREATER THAN TWO HOURS.
BUT IF I TURN ON, THEN I QUALIFY FOR DRS.
I DO WANT TO PROVIDE DRS WHEN A START UPS.
SO WHAT DRS FOR ALL THE RUCKS, WHAT DRS STATUS? SHOULD I BE TELEMETRY TO
EVEN THOUGH OFFLINE, I'M NOT QUALIFIED TO PROVIDE DRS.
SO, BUT YOU CAN SEND IT TO YOUR, UH, IF YOU'RE NOT ELIGIBLE, OR ARE YOU SAYING, NO, I'M NOT ELIGIBLE.
I I HAVE A LONGER THAN TWO HOUR START? NO, NO, NO.
IF, IF YOU, IF, IF YOU, IF YOU WANT TO QUALIFY FOR REAL TIME, YOUR COP MUST BE ONLINE.
'CAUSE REMEMBER, CHANCE WHAT, WHAT YOU'RE SAYING, THE SCENARIO YOU'RE GIVING IS YOU'RE OFFLINE FOR R.
AND THEN WHEN REAL TIME COMES ALONG, YOU START UP, YOU'RE ONLINE TO GET THE ONLINE BECAUSE YOU'RE NOT QUALIFIED FOR OFFLINE DRS, BUT R MIGHT HAVE COMMITTED SOMEONE ELSE.
BUT WHAT IF I, SHOULD I BE SHOWING D ONLINE? IF YOU'RE NOT QUALIFIED FOR OFFLINE DRRS, YOU CANNOT USE DRRS OP STATUS.
SO I CAN'T USE DRS OP STATUS FOR FUTURE HOURS.
DRS IS ONLY OFFLINE QUALIFIED FOR DRRS, OFFLINE DRS, BUT I'M QUALIFIED FOR ONLINE DRS THEN YOU BETTER SHOW ONLINE AND COP WHY NOT DRS? NO, BECAUSE DRS STATUS IS ONLY FOR OFFLINE GUYS WHO ARE QUALIFIED FOR OFFLINE DRRS.
OTHERWISE THERE'S GAMING SITUATION BECAUSE THEN WE ARE NOT REDUCING DRUGS.
[02:55:01]
UM, SOMETHING KIND OF DAWNED ON ME AS Y'ALL WERE TALKING OFFLINE.DRS IS THE ONLY DRS THAT'S GONNA REDUCE ROCKS.
IS THAT, IS THAT FAIR? UM, NO, NOT REALLY.
BECAUSE PEOPLE KEEP SAYING THAT, UM, LIKE GOSSING UP THE ODC, YOU MIGHT, YOU'RE INCENTING PEOPLE TO BE ONLINE.
THAT ITSELF, JUST, IF YOU'RE ONLINE TO GET A-D-R-R-S AWARD, THAT THAT SAYS THAT YOU'RE PUTTING MORE CAPACITY ON THE MARKET.
SO ERGO, MAYBE R DOESN'T SEE A NEED TO RUCK ANYONE.
BUT THEN THAT RAISES THE, I THINK YOU'VE BROUGHT THIS POINT UP, ANDREW, ABOUT, YOU KNOW, YOU'VE, YOU'RE CREATING INEFFICIENT COMMITMENT RISKS.
BUT THAT IS THEREFORE EVEN THE GUSTAV OF RDC.
SO LET'S, LET'S NOT, I MEAN, WE TALKED ABOUT THAT A LONG TIME AGO.
SO IT'S, IT'S, IT'S, AND, AND ESRS, WOULD THEY BE CONSIDERED IN THE OFFLINE DRRS TOOL? THERE IS NO OFFLINE STATUS FOR E SR.
SO THEY WOULD NOT NECESSARILY BE HELPING TO REDUCE ROCKS.
THEY WOULD JUST BE PART OF THE, MAYBE THERE'S, MAYBE THERE'S ENOUGH THAT'S SO YEAH.
THIS CONVERSATION HAS MADE ME THINK BACK TO ORDC ONLINE AND OFFLINE.
AND IF THIS IS, THIS CONCEPT IS GONNA CAUSE PEOPLE TO JUST SIT AT LSL.
UM, AND SO, UM, I HAVEN'T THOUGHT THROUGH IT YET COMPLETELY, BUT JUST WANTED TO BRING IT UP THAT IT MIGHT BE SOMETHING THAT WE ALL NEED TO THINK THROUGH OF IF THIS WILL HAVE THE UNINTENDED CONSEQUENCES OF TOO MANY PEOPLE JUST SITTING AT LSL, AND THEN WE'RE GONNA HAVE TO GO BACK LATER AND, AND BIFURCATE IT.
UM, WE, WITH RTC, WE DON'T HAVE AN OFFLINE RTC ANYMORE.
WE JUST HAVE A SDC NO, NO, I, I KNOW, I'M, I'M SAYING THINK BACK 10 YEARS AGO, UHHUH TO WHEN WE HAD THAT PROBLEM OF EVERYONE WAS SO EXCITED TO GET RDC PAYMENTS THAT THEY JUST SAT AT LSL.
I'M WORRIED THAT WE'RE GONNA SEE PEOPLE SO EXCITED TO GET DRRS PAYMENTS THAT THEY'LL SIT AT LSL.
AND I'M THINKING THEY'LL BE AN EQUILIBRIUM BECAUSE THEY MIGHT SAY, HEY, UM, OKAY, I'M GETTING $10.
IF, IF THAT IS THE DEMAND CURVE THAT WE DECIDE, AND THAT'S NOT CUTTING IT FOR ME.
I, AND AGAIN, I'M NOT SAYING IT IS A PROBLEM OR ISN'T, I'M JUST SAYING I THINK IT'S SOMETHING WE SHOULD THINK ABOUT.
SO YOUR, IAN, YOUR POINT IS, IF YOU'RE A RESOURCE THAT TAKES MORE THAN TWO HOURS TO SET UP, YOU'RE INCENTIVIZED TO JUST SIT AT LSL OR R ARE U SO IT'S NOT TWO HOURS TO COME ONLINE.
IT IS, YOU HAVE FILED IN YOUR, UH, INFORMATION WITH ERCOT THAT YOU HAVE A TWO, A LONGER THAN TWO HOUR START UP TIME.
UM, AND THAT IS A FILED NUMBER THAT GETS, DOES IT GET TESTED? I CAN'T REMEMBER.
I REMEMBER UPDATING 'EM YEARS AGO.
THEY CAN UPDATE IT ANYTIME, BUT WE MAY ASK TO CHECK FOR YEAH.
TO SHOW, SHOW PROOF THAT THEY CAN DO IT.
BUT YOU FILE YOUR COLD, YOUR WARM, AND YOUR HOT NUMBERS, AND THERE'S A TON THAT GOES INTO THAT.
UM, BUT IF YOUR COLD NUMBER IS TWO HOURS AND ONE MINUTE, THAT'S THE BEST YOU CAN DO WITHOUT, YOU KNOW, UM, THEN YOU WILL BE INCENTIVIZED IF YOU, CITA DRS IS A, IS A BOON TO SIT AT LSL AND ERODE PRICES.
LET'S SEE WHAT ANDREW AND SHANE HAVE TO SAY.
BUT I, I THINK WE SHOULD CONTINUE THIS CONVERSATION AT THE NEXT MEETING.
AND IF WE NEED ERCOT TO PROVIDE MORE DETAILED EXAMPLES OF OFFLINE, ONLINE, VARIOUS COLD, HOT START TIMES, WE CAN MM-HMM
SHAMS CAN ASK S FOR THOSE OFFLINE AND WE CAN, WE CAN SEE THEM.
YEAH, I'LL, UH, KEEP IT QUICK, BUT IT IS DIRECTLY IN RESPONSE TO A LOT OF WHAT IAN ARE TALKING ABOUT.
UM, AS TO THE COMPARISON BETWEEN DRS PLUS AND THE ORDC, THE MAIN DIFFERENCE IS JUST THE MAGNITUDE OF THE DRS PLUS PLAN THAT WOULD BE NEEDED TO GET THE PRODUCT CLEAR.
AT $10 ON THIS DEMAND CURVE, YOU'RE GOING TO NEED TO MAKE THE PROCUREMENT VOLUME TENS OF THOUSANDS OF MEGAWATTS.
WHEREAS THE RDC ONLY PRODUCES, I MEAN, YOU PROBABLY NEEDED A PRC OF LIKE SEVEN OR 8,000 MEGAWATTS BEFORE YOU WOULD GET A $10 RDC ADDER, WHEREAS YOU'RE GOING TO HAVE TENS OF THOUSANDS OF MEGAWATTS GETTING PAID $10 PER MEGAWATT HOUR FROM DRS.
TOTALLY GRANTING THE POINT THAT THAT REALLY IS JUST SHIFTING THE EQUILIBRIUM.
LIKE NOT EVERY RESOURCE IS GONNA SIT AT ITS LSL JUST TO MAKE AN EXTRA 10 BUCKS.
BUT MOVING THE EQUILIBRIUM FROM WHERE WE CONSISTENTLY HAVE LIKE 9,000 TO 12,000 MEGAWATTS IN RESERVES RIGHT NOW TO NOW WE HAVE 15,000 MEGAWATTS IN RESERVES OR WHATEVER IT IS, IT, IT'S STILL EXACERBATING
[03:00:01]
THE PROBLEM WE ALREADY HAVE THAT THE SYSTEM RUNS WITH A HUGE VOLUME OF OPERATING RESERVES ALL THE TIME AND DOESN'T REALLY PRODUCE ANY SCARCITY PRICING.UH, I HAVE A MAYBE A POINT AND THEN A QUESTION.
SO, UM, SO WHEN YOU'RE THINKING ABOUT A RESOURCES INCENTIVE TO BE ONLINE, UH, TO RECEIVE THESE PAYMENTS THERE, IT'S NOT, UH, KIND OF ONE TO ONE, RIGHT? SO IF THEY'RE SITTING AT LSL, THEY'RE, THEY COULD BE GETTING A DRS WARD UP THEIR, UP TO THEIR HSL DEPENDING ON THEIR RAMPING CAPABILITY.
SO, UM, KIND OF, IT'S NOT JUST THEIR FUEL COST TO SIT AT LSL, WHETHER OR NOT THEY'RE MAKING A PROFIT ON THOSE MEGAWATTS POTENTIALLY, RIGHT? YEAH.
IT, IT DEPENDS ON WHAT THEY'RE, UH, CAPABLE OF DOING IN, IN TWO HOURS ONCE IF THEY'RE ALREADY ONLINE.
SO IF IT, SO MAYBE A, YOU KNOW, A THOUSAND MEGAWATT, JUST BE REALLY SIMPLE, YOU KNOW, A THOUSAND MEGAWATT RESOURCE LSL OF, UH, TWO 50.
I'M REALLY MAKING $40 PER MEGAWATT THAT'S ONLINE.
UH, IT DEPENDS ON WHAT THE PRICE IS BECAUSE YOU'RE A PRICE TAKER FOR THE LSL COMPONENT.
ASSUMING THAT THE PLAN GETS MADE LARGE ENOUGH TO WHERE IT'S ALWAYS BINDING AT THE, AT THE, THE CAP OR, UM, I THINK THAT'S A PRETTY SAFE ASSESSMENT OF LIKE WHAT'S DESIGNED TO, BUT UM, YEAH.
SO IT'S NOT REALLY, THERE'S, IT'S NOT AS SIMPLE AS, YOU KNOW, AS THE, AM I MAKING NONY AT $10 OR NOT? I THINK THERE'S A LITTLE BIT MORE TO IT.
UM, JUST WANTED TO POINT THAT OUT.
AND THEN AS FAR AS THE QUESTION ON, UH, BATTERY INCLUSION IN THIS IS, IS THE THOUGHT THAT IT WOULD CHANGE THE WAY THAT, UH, THE, THE ROCK ENGINE SEES ENERGY STORAGE RESOURCES? SO IS IT'S, OR THEM HAVING THIS DRS STATUS, BUT BEING ONLINE DOESN'T CHANGE KIND OF THE HOW MUCH MEGAWATTS ARE INCLUDED IN BY THE ENGINE OR THE HOURS THAT POTENTIALLY INCLUDED, THINGS LIKE THAT.
COMING BACK TO BATTERIES, UM, THEY, THEY CANNOT HAVE IT.
DRRS STATUS IN COP HAS BEEN DEFINED AS YOUR OFFLINE AND YOU'RE WILLING TO PROVIDE OFFLINE DRRS.
NOW, A BATTERY CANNOT BE OFFLINE.
THERE IS NO COP STATUS OF OFF FOR A BATTERY, SO THEY CANNOT USE THE DRS.
SO THEY, I MEAN, D THE BATTERIES CAN EITHER BE ONLINE OR THEY'RE OUT ON MAINTENANCE.
UM, AND THE OTHER ONE, WHEN I WAS TALKING ABOUT THE $10, I WAS TALKING ABOUT THE HEADROOM, UH, HOW MUCH THEY GET PAID FOR THAT.
SO THEY'LL BE AN EQUILIBRIUM BECAUSE IF THEY'RE SITTING AT LSL AND BURNING FUEL AND THE PRICES ARE NOT LUCRATIVE.
I MEAN, THERE'LL BE A NEW KILOGRAM, LIKE WHAT ANDREW WAS SAYING.
IT'S A NON-ZERO COST TO THEM YEAH.
UM, SO GO THROUGH THE NEXT EXAMPLE.
SO, UH, THIS IS A SITUATION WHERE, UH, THE RESOURCE WAS, UH, OFFLINE IN DAM.
UM, IT, UH, CHOSE NOT TO OFFER IN DAM FOR DRRS AND THEREFORE DID NOT RECEIVE AN AWARD.
BUT, UH, AS MENTIONED, UH, IN THE PREVIOUS EXAMPLES ON THE DRS REAL TIME ELIGIBILITY, UM, IT, UH, MAINTAINED ITS ELIGIBILITY FOR THAT PARTICULAR HOUR, UH, BY SHOWING THE COMP STATUS OF DRS AND THEREFORE, UH, IT'S NOW ELIGIBLE FOR REAL TIME.
UM, SO IT OFFERED AND THEN, UH, RECEIVED, UH, AWARDS, UH, IN REAL TIME, UH, AS SHOWN.
UM, SO IN THIS CASE, UH, AGAIN, IT MAKES AGAIN, UH, $500, UH, BUT, UH, ALL, UH, IN THE REAL TIME.
[Responses to Clarification Questions]
THROUGH, UH, THE SLIDE.UH, WE RECEIVED SOME, UH, CLARIFICATIONS ABOUT, UH, HOW DRRS WORKS.
UH, SO, UH, THE FIRST ONE IS TALKING ABOUT, UH, UH, WILL THERE BE A-A-V-D-I, WHICH INCLUDES A SPECIFIC MEGAWATT QUANTITY.
UM, SO, UH, BASICALLY DRRS, UH, WE ARE NOT EXPECTING IT, UH, TO BE DEPLOYED THROUGH VDI.
UM, SO AS MENTIONED BEFORE, UH, R IS NOT PROCURING DRRS.
UM, BASICALLY IT'LL BE LIKE, UH, ANY OTHER R INSTRUCTION, UH, TO BE ONLINE FOR A GIVEN PERIOD OF TIME.
UM, AND THE SECOND ONE IS AN MENTIONED BEFORE.
UM, THERE ARE DIFFERENT, UH, QUALIFICATION AMOUNTS FOR, UH, ONLINE AND, UH, OFFLINE.
UM, SO ANOTHER QUESTION WAS ABOUT LIKE, HOW WAS THE RELEASE FACTOR ESTABLISHED? UM, SO BASICALLY AS WE HAD SHOWN IN AN EARLIER SLIDE, UH, IT WOULD BE DEPENDENT ON,
[03:05:01]
UM, BOTH THE OPERATIONAL RESERVE AND, UH, THE RESOURCE ADEQUACY COMPONENTS.UM, AND SO, UM, SO EITHER, UH, PUC OR ORTA STAKEHOLDERS COULD, UH, INITIATE, UH, THIS CHANGE TO, UH, UH, ENABLE THE OPTIONALITY IN 30 10.
UM, SO THE NEXT, UH, TWO QUESTIONS, UH, TALK ABOUT, ASK ABOUT THE METHODOLOGY, UH, THAT A COURT WILL USE, UH, FOR THE DRS AS PLAN, UM, AND THEN, UH, ALSO THE EXPECTED REQUIREMENT FOR, UH, THE RESOURCE ADEQUACY COMPONENT.
UM, SO THESE ARE, UH, BOTH THE DEPENDENT, UH, ON THE RELIABILITY ASSESSMENT, UH, WHICH WILL BE PERFORMED LATER THIS YEAR.
SO, YEAH, I THINK, UH, THAT'S THE
[Next Steps]
END OF OUR COURSE PRESENTATION.UH, JUST WE WANT TO SEE IF THERE ARE ANY ADDITIONAL, UH, SPECIFIC, UH, ITEMS THAT WE SHOULD FOCUS ON, UH, FOR THE NEXT, UH, WORKSHOP.
SO THE, CAN WE GO BACK A SLIDE? SO ARE THESE WHAT OR COTTONWOOD PROPOSE WE DISCUSSED AT THE NEXT WORKSHOP, OR JUST THINGS THAT STILL NEED TO BE DECIDED? I THINK WE PUT THEM OUT THERE AS THINGS STILL TO BE DECIDED AS OPPOSED TO A PROPOSED AGENDA FOR, UH, THE, THE NEXT WORKSHOP.
I THINK THE, THAT THE NEXT WORKSHOP SHOULD BE A FUNCTION OF WHAT WE DISCUSSED HERE TODAY.
UM, AND IF THERE ARE ANY, UH, FURTHER, UH, ANALYTICAL ASKS FOR, FOR ERCOT TO, TO WORK THROUGH THOSE SPECIFIC EXAMPLES THAT, THAT SORT OF THING THAT WE WOULD BRING BACK MUCH AS ANIN WALKTHROUGH TODAY ON SOME OF THE QUESTIONS WE RECEIVED IN, IN THE FIRST WORKSHOP.
UM, AND THEN I, I THINK THERE ARE SOME PROCEDURAL QUESTIONS, UH, ABOUT HOW TO, HOW TO MOVE AHEAD WITH 1309 AND AND, AND 1310 THAT ARE PROBABLY BEST TEED UP FOR THE NEXT WORKSHOP.
YEAH, I THINK, UM, YOU PROBABLY NEED SOME FEED EMAIL FEEDBACK RIGHT ON, ON WHAT ELSE PEOPLE MIGHT NOT NEED TO SEE IN THE NEXT WORKSHOP.
BUT WE NEED TO START THINKING ABOUT DECISION POINTS MM-HMM
ON BOTH MPR AND I THINK THERE IS A DISCUSSION TO BE HAD I GUESS, AT THE NEXT WORKSHOP ON THE DIFFERENT TRACKS FOR EACH MPRR.
UM, SO, AND I WANTED ALSO KIND OF NON-SUBSTANTIVE FEEDBACK ON, ON TIMING.
I THINK I, I DON'T THINK THIS WORKS AFTER WMS ANYMORE.
YOU KNOW, WE GOT SO MANY COMMENTS AND WE GOT THEM LAST MINUTE, AND I THINK HAVING FIVE HOURS OR, YOU KNOW, SOME AMOUNT OF TIME WHERE WE'RE NOT KIND OF RACING AGAINST THE CLOCK WOULD BE BETTER.
AND WMS, I THINK GOT A COUPLE OF NEW NPRS TODAY THAT I THINK ARE STAYING AT WMS. IS THAT RIGHT? SO I THINK IT, THIS DOESN'T WORK AFTER WMS ANYMORE AM SORT OF AGNOSTIC ON THE TIMING OF THE NEXT WORKSHOP, IF THAT'S STILL A MONTH AWAY OR THREE WEEKS AWAY, OR SIX WEEKS AWAY.
I'D LIKE TO SEE LONGER TIME ALLOTTED FOR BOTH MEETINGS, TO BE HONEST.
AND I'D LIKE LESS COMMENTS IN DAY OF WHAT DO, SO WHAT DO YOU THINK, GORD? I'M LOOKING AT GORD, BUT HE WON'T HAVE ALL THE ANSWERS.
MAYBE WE, YOU AND ANN AND I CAN MEET AND MARTHA AND DISCUSS TIMING AND SORT OF AGENDA FOR THE NEXT WORKSHOP.
I THINK THAT WOULD WORK REALLY WELL.
AND SO I THINK THAT'LL BE THE SIGNIFICANT DISCUSSION TOO, IF THE NEXT WORKSHOP WE TAKE UP, WHETHER WE SPLIT 1309 AND 1310 INTO DIFFERENT TIMING TRACKS.
BUT I, I WOULD SAY IF WE DO THAT, I THINK 1310 HAS TO GO BACK TO PRS BECAUSE THEY'D HAVE TO REFER IT SOMEWHERE.
SO WE, WE'D HAVE THIS SORT OF WORK WORKSHOP DISCUSSION, BUT THERE WOULD ALSO BE SORT OF A VOTING DISCUSSION AS WELL.
SO YOU WILL HEAR FROM US, BUT FOR NOW, I THINK DISREGARD THE WORKSHOP PLANNED FOR AFTER MARCH WMS AND WE'LL, WE'LL SEND, WE'LL SEND MORE OUT ON, UH, ON TIMING AND AGENDA.
I THINK WE CAN GIVE SOME LIKE BROAD AGENDA GUIDELINES OR AT LEAST WHAT YOU GUYS WANT FEEDBACK ON, UM, SOMETIME SOON.
[03:10:01]
SOUNDS GOOD.ANY OTHER QUESTIONS OR COMMENTS? OKAY, WE CAN ADJOURN.