[1. Call General Session to Order]
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IS EVERYBODY READY TO START? OKAY, WE'RE GONNA GO AHEAD AND PROCEED.
UH, GOOD AFTERNOON, MEMBERS OF THE ERCOT BOARD OF DIRECTORS AND GUESTS, UH, MY NAME IS BILL FLORES, THE ERCOT BOARD CHAIR.
I WANNA WELCOME EACH OF YOU TO THE FEBRUARY 9TH AND 10TH 2026 BOARD OF DIRECTORS MEETING.
I'VE CONFIRMED THAT A QUORUM IS PRESENT IN PERSON AND HEREBY CALL TO ORDER THIS MEETING AT ERCOT BOARD OF DIRECTORS.
THIS MEETING IS BEING WEBCAST LIVE TO THE PUBLIC ON ERCOT WEBSITE.
UH, WE DON'T HAVE A QUORUM OF THE COMMISSION HERE, BUT IF, UH, SOMEBODY SHOWS UP, THEN WE WILL, UH, TURN THE MEETING OVER TO, UH, CHAIRMAN GLEASON TO, TO, UM, CALL THE PUCT TO ORDER.
UH, BEFORE WE BEGIN, I'D LIKE TO WELCOME BACK TO THE BOARD COMMISSIONER COURTNEY HALMAN, UH, WHO IS SERVING AS THE SECOND PUC COMMISSIONER ON A ROTATING ONE TERM BASIS.
UH, SHE IS NOT ON THE, THE, UH, NOT PARTICIPATING IN THE MEETING AT THIS TIME.
UM, BUT IF SHE DOES, THEN WE'LL CALL THE MEETING ORDER.
THE ANTITRUST ADMONITION SECURITY MAP ARE INCLUDED WITH THE POST MEETING MATERIALS.
[2. Notice of Public Comment, if Any]
MOVE ON TO AGENDA ITEM TWO.THE FIRST ORDER OF BUSINESS ON TODAY'S AGENDA IS ITEM TWO.
NOTICE OF PUBLIC COMMENT, IF ANY.
TODAY'S MEETING AGENDA WAS POSTED PUBLICLY ON FEBRUARY THE SECOND, 2026, AND PROVIDED INSTRUCTIONS TO THE PUBLIC FOR COMMENTING IN PERSON.
UH, AS I UNDERSTAND IT, WE HAVE THREE PEOPLE WHO WOULD LIKE TO COMMENT.
UH, THE FIRST IS GONNA BE SUSAN BELL.
SO SUSAN, IF YOU WOULD MAKE YOUR WAY TO THE PODIUM, UH, FOR THOSE OF YOU THAT ARE, UH, COMMENTING PUBLICLY, PLEASE NOTE THAT WE'RE GONNA GIVE YOU THREE MINUTES, UH, TO MAKE YOUR COMMENTS.
SO HOPEFULLY YOU'VE GOT YOUR, YOUR, UH, THOUGHTS IN ORDER.
BUT AGAIN, THREE MINUTES, COME ON DOWN HERE TO THE CORNER.
SO, SO SUSAN, TELL US, UH, WELL, WE KNOW YOUR NAME IS SUSAN BELL, BUT TELL US WHO YOU ARE AND, UH, I'M SORRY.
SHE, SHE CAN GO AT THE PODIUM RIGHT THERE.
SHE CAN DO THE PODIUM RIGHT HERE.
AND JUST BEFORE THERE WERE SOME MATERIALS THAT WERE PROVIDED BY THESE GUEST SPEAKERS, THOSE HAVE BEEN SENT TO THE BOARD ELECTRONICALLY, AND WE WILL ALSO POST THEM ON OUR WEBPAGE UNDER THE NOTICE OF PUBLIC COMMENT SECTION.
KIM IS GONNA KEEP THE THREE MINUTES, AND KIM WILL TELL YOU WHEN YOUR THREE MINUTES IS UP.
UH, MY NAME IS SUSAN BELL, AND, UM, I APPRECIATE THE OPPORTUNITY TO SHARE MY THOUGHTS FROM A RURAL TEXAS PERSPECTIVE.
I LIVE IN KERRVILLE, TEXAS AND HAVE BEEN AN ADVOCATE FOR THE 3 91 COMMISSION SINCE THE FIRST BEST PLAN WAS TO BE IMPLEMENTED IN THE SMALL UNINCORPORATED TOWN OF COMFORT.
IT WAS AGREED IN DECEPTION THAT DROVE THIS PROJECT.
IT WAS TO BE BUILT ON A ROAD THAT HAD NO THROUGH ACCESS AND WOULD HAVE NO BENEFIT TO THE PEOPLE OF THIS SMALL RURAL TOWN WITH MUCH HARD WORK, DEDICATION, AND PARTICIPATION OF CONCERNED CITIZENS AS WELL AS THE GRACE OF GOD.
THIS BEST PROJECT HAS BEEN STOPPED FOR NOW.
THE UNITY OF RURAL TEXAS COMMUNITIES IN KENDALL KERR AND GILLESPIE COUNTIES IS TRULY THE VOICE OF WE THE PEOPLE.
WE ARE NOW A TRI-COUNTY 3 91 COMMISSION AND WILL PLAN TO EXPAND.
WE WISH TO HAVE A SEAT AT THE TABLE WHEN THERE ARE DISCUSSIONS REGARDING BEST SAFEGUARDS AND ACCOUNTABILITY FOR THOSE TRYING TO PILLAGE OUR LAND BY IMPLEMENTING THESE BATTERY STORAGE SYSTEMS THAT AT THIS POINT HAVE NO SUBSTANCE SAFETY PROTOCOL PROTOCOLS.
ULTIMATELY, THE ELIMINATION OF BEST IS THE DESIRED OUTCOME OF COLLABORATING WITH ERCOT, PUCT, AND OUR TRI-COUNTY COMMISSION.
CONCERNS OF INCREASED CYBERSECURITY THREATS IN PHASING OUT THE USE OF ANY CHINESE MADE COMPONENTS ARE ALSO A PRIORITY.
WE ARE BLESSED WITH AN EXCELLENT AND COMPETENT REPRESENTATION ON OUR 3 91 TRI-COUNTY COMMISSION.
THIS INCLUDES COMMISSIONER JENNIFER MCCALL AND SECRETARY LINDA BULLARD, WHO ARE BOTH HERE TODAY.
IT IS TIME TO COME TOGETHER TO SAVE RURAL TAXES BEFORE AN INTIMATE IMMINENT, FORGIVE ME, AN UNMITIGATED DISASTER BROUGHT BY BESS DESTROYS THE HEART OF THE STATE OF TEXAS.
THANK YOU FOR YOUR TIME AND OPPORTUNITY.
DOES ANYONE HAVE ANY QUESTIONS FOR MS. POWELL AND LINDA BULLARD, IF YOU WOULD MAKE YOUR WAY TO THE PODIUM.
UH, AND THEN, UH, JENNIFER MCCALL, IF YOU WOULD BE ON DECK, UH, TO BE BEHIND MS. BULLARD.
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SO, MS. BULLER, WE'RE GONNA GIVE YOU THREE MINUTES, UH, KIND OF SHORT.MY NAME IS LINDA BULLARD, AND I'M FROM KERRVILLE.
ALSO, I'M THE SECRETARY OF THE BOARD OF THE HILL COUNTRY ENERGY SUB-REGIONAL PLANNING COMMISSION.
UH, OUR THREE COUNTIES INDIVIDUALLY AND THE THREE 90 CO COMMISSION ITSELF HAVE OFFICIALLY TAKEN A POLICY DECISION OPPOSING THE INSTALLATION OF BATTERY ENERGY STORAGE SYSTEMS, BEST IN OUR BEAUTIFUL AND FRAGILE BUT STRONG HILL COUNTRY ENVIRONMENT FOR THE 3 91 COMMISSION.
THIS IS A PLANNING OBJECTIVE, WHICH STATE AGENCIES ARE STATUTORILY REQUIRED TO ASSIST US IN MEETING.
HOWEVER, DESPITE REPEATED REQUESTS FOR A PLANNING COORDINATION MEETING, ERCOT HAS REFUSED STANDING ON A TECHNICALITY THAT YOU ARE NOT A STATE AGENCY, BUT YOU ARE OBVIOUSLY DEFACTO IN THE ARM OF THE STATE.
SINCE YOU ARE ACCOUNTABLE TO A STATE AGENCY, THE PUCT, AND SINCE YOUR BOARD IS APPOINTED BY THE STATE, WE'VE COME HERE TODAY TO MAKE SURE THAT EVERYONE ON YOUR STATE APPOINTED BOARD IS AWARE OF WHAT WE CONSIDER TO BE ERCOT DERELICTION OF DUTY, TO ENGAGE IN PLANNING COORDINATION WITH OUR 3 91 COMMISSION, AND TO ASK YOU TO REMEDY THIS WILLFUL FAILURE.
WE WANT TO WORK WITH YOU CONSTRUCTIVELY IN ORDER TO FULFILL OUR OWN LEGAL OBLIGATION TO OUR CONSTITUENTS CONCERNING OUR ENERGY FUTURE.
AND WE WANT YOU TO OBEY THE INTENT OF THE STATUTE AND COORDINATE.
I WOULD LIKE TO BRING UP JUST ONE SPECIFIC POINT.
WE ARE GRATEFUL TO ERCOT FOR ATTEMPTING TO IMPLEMENT THE LONE STAR INFRASTRUCTURE PROTECTION ACT, EL CIPA BY REQUIRING ALL MARKET PARTICIPANTS TO SUBMIT ATTEST STATIONS REGARDING THE PURCHASE OF CRITICAL ELECTRIC GRID EQUIPMENT AND SERVICES FROM CHINA, RUSSIA, IRAN, AND NORTH KOREA.
I UNDERSTAND THAT IT WAS RECENTLY ACKNOWLEDGED THAT 700 SUCH REQUIRED ATTESTATIONS ARE MISSING UP FROM 300 IN NOVEMBER.
CLEARLY, THIS METHOD OF TRACKING AND FORCING ELCI A IS BEING IGNORED BY THE MARKET PARTICIPANTS AND NEEDS TO BE REVIEWED AND STRENGTHENED.
I MADE A PUBLIC INFORMATION REQUEST ON BEHALF OF OUR COMMISSION USING YOUR PORTAL IN AN ATTEMPT TO FIND OUT IF THE FIVE COMPANIES WHICH ARE CURRENTLY, UH, PURSUING BEST PROJECTS IN OUR JURISDICTION HAD FILED THEIR ELCI A, A ATTESTATIONS TO ERCOT.
I SPECIFIED THAT I WAS NOT REQUESTING ANY CONFIDENTIAL INFORMATION, BUT SIMPLY A YES OR NO ANSWER, UM, TO WHETHER ANY OF THESE COMPANIES HAD FILED THEIR ATTESTATIONS.
SINCE CHINA MANUFACTURED BATTERIES ARE FOUND IN 90% OF BEST IN THE UNITED STATES, THERE'S A VERY GOOD CHANCE THAT ALL OF THE COMPANIES IN THAT'S, EXCUSE ME, THAT'S TIME.
WELL, HOPE TO SEE YOU IN THE WHOLE COUNTRY SOON.
UM, MS. MCCALL, AND AGAIN, YOU HAVE THREE MINUTES.
ON FEBRUARY 11TH, 2025, THE HILL COUNTRY ENERGY SUB-REGIONAL PLANNING COMMISSION, H-C-E-S-R-P-C WAS CREATED UNDER CHAPTER 3 91 OF THE TEXAS LOCAL GOVERNMENT CODE TO PROVIDE FOR SPECIAL PLANNING NEEDS.
AS IT PERTAINS TO KENDALL AND KERR COUNTIES, GILLESPIE COUNTY HAS SINCE JOINED R-H-C-E-S-R-P-C.
IT IS OUR UNDERSTANDING THAT ERCOT HAS IDENTIFIED A NEED FOR OVER 1000 BATTERY ENERGY STORAGE BEST FACILITIES, WHICH DO NOT GENERATE ENERGY THROUGHOUT THE STATE OF TEXAS.
THAT, AND THAT SEVERAL FACILITIES ARE CURRENTLY BEING CONSIDERED FOR INSTALLATION IN GILLESPIE, KENDALL, AND COUNTIES.
A ADJACENT TO LCRA SUBSTATIONS, WHICH LIE WITHIN AN ENVIRONMENTALLY SENSITIVE PRIORITY GROUNDWATER MANAGEMENT AREA, PRONE TO SEVERE DROUGHT AND FREQUENT WILDFIRES, WHICH COULD GREATLY EXACERBATE BE EXACERBATED BY THE INSTALLATION OF LITHIUM BATTERY ENERGY STORAGE SYSTEMS THAT HAVE AN ALARMING HISTORY OF THERMAL RUNAWAY FIRES, THE SPREAD OF WHICH COULD BE DISASTROUS FOR OUR RESIDENTS.
BESS ALSO POSE A SIGNIFICANT CYBERSECURITY RISK BECAUSE THEY ARE UNMANNED CONTROLLED REMOTELY AND MANY HAVE CATTLE, BATTERIES AND VARIOUS CIRCUIT BOARDS AND CONTROL EQUIPMENT MADE IN CHINA.
OUR DOD HAS REALIZED THE THREAT ASSOCIATED
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WITH BATTERY AND CONTROL SYSTEM COMPONENTS MADE IN CHINA AND REMOVED THEM FROM ALL US MILITARY FACILITIES.THE LONE STAR INFRASTRUCTURE PROTECTION ACT OF 2021 WAS TRANSPOSED AS CHAPTER ONE 17 OF THE TEXAS BUSINESS AND COMMERCE CODE.
ITS AIM IS TO PROTECT TEXAS'S CRITICAL INFRASTRUCTURE BY PROHIBITING CONTRACTS WITH, OR ACCESS BY COMPANIES OR GOVERNMENTS IN ENTITIES FROM CHINA, IRAN, NORTH KOREA, AND RUSSIA.
THE ELECTRIC GRID IS SPECIFICALLY NAMED AS INFRASTRUCTURE COVERED BY THIS STATUTE.
FURTHER IN THE 89TH LEGISLATIVE SESSION, THE CODE WAS AMENDED TO INCLUDE COMPONENTS MADE IN CHINA.
LAST MONTH, GOVERNOR ABBOTT ADDED CATTLE TO ITS LIST OF PROHIBITED TECHNOLOGIES.
WE HAVE MADE YOU AWARE OF VERY SERIOUS VULNERABLE VULNERABILITIES AND THREATS THAT BEST REPRESENT FAILURE TO TAKE ACTION TO ADDRESS THESE CONCERNS COULD BE CONSIDERED GROSS AND WILLFUL NEGLIGENCE OF YOUR DUTY OF CARE AS DIRECTOR OF ERCOT AND SHOULD BE, AND SHOULD A THERMAL RUNAWAY FIRE OR CYBERSECURITY ATTACK TAKE PLACE AT ANY BEST FACILITY INSTALLED AND CONNECTED TO YOUR GRID INFRASTRUCTURE.
I'M A KENDALL COUNTY COMMISSIONER FROM PRECINCT ONE, AND ALSO THE VICE PRESIDENT OF THE HILL COUNTRY ENERGY SUB-REGIONAL PLANNING COMMISSION.
ANY QUESTIONS FOR MS. MCCALL? OKAY.
THANK YOU, UH, TO ALL OUR COMMENTERS TODAY FOR YOUR FEEDBACK.
[3. December 8-9, 2025, General Session Meeting Minutes]
TO AGENDA ITEM THREE, THE DECEMBER 8TH AND NINTH 2025, GENERAL SESSION MEETING MINUTES.THERE'S A DRAFT IN THE MEETING MATERIALS.
WOULD ANY BOARD MEMBER LIKE TO DISCUSS THESE? IF NOT, I'LL ENTERTAIN A MOTION TO APPROVE THE MINUTES.
MR. CHAIRMAN, I'LL BE HAPPY TO MAKE A MOTION.
ANY OPPOSED? ANY ABSTENTIONS? THE MINUTES ARE APPROVED, IS DRAFTED.
[4. Confirmation of 2026 Technical Advisory Committee (TAC) Chair and Vice Chair]
ITEM FOUR, THE CONFIRMATION, THE 2026 TECHNICAL ADVISORY COMMITTEE, CHAIR AND VICE CHAIR.UH, THERE, UH, CONFIRMATIONS ARE REQUIRED BY THE BOARD PURSUANT TO THE BYLAWS AT HIS JANUARY 21ST, 2026 MEETING.
TAC ELECTED THE CHAIR AND VICE CHAIR FOR THE 2026 YEAR.
I'LL ENTERTAIN A MOTION TO CONFIRM KAITLYN SMITH OF JUPITER POWER AND MARTHA HANSON OF ENCORE ELECTRIC DELIVERY AS THE CHAIR AND VICE CHAIR OF TAC, RESPECTIVELY FOR THE 2026 YEAR.
ANY OPPOSED? ANY ABSTENTIONS? OKAY.
WE ARE CON, KAITLYN AND MARTHA ARE CONFIRMED AS CHAIR AND VICE CHAIR, AND CONGRATULATIONS ON STATES OF THEM.
WE LOOK FORWARD TO WORKING WITH YOU OVER THE COMING YEAR.
[5. Consent Agenda]
IS AGENDA ITEM FIVE, THE CONSENT AGENDA, INCLUDING ITEM 5.1, UNOPPOSED REVISION REQUEST RECOMMENDED BY TAC FOR APPROVAL.CHAD, PLEASE PROVIDE, UH, PROCEED WITH PROVIDING BUDGET IMPACTS FOR THE REVISION REQUEST.
UH, THIS IS A SHORT CONSENT AGENDA.
THERE'S FIVE REVISION REQUESTS FOR APPROVAL.
PICKER 1 27 IS THE ONLY ONE WITH THE BUDGETARY IMPACT, WHICH RANGES FROM 20,000 TO 40,000 AND A PROJECT DURATION OF THREE TO FOUR MONTHS.
HAPPY TO ANSWER ANY QUESTIONS.
ANY QUESTIONS FOR CHAD? IF THERE'S NO, UH, FURTHER DISCUSSION, I'LL ENTERTAIN A MOTION TO APPROVE THE CONSENT AGENDA AS PRESENTED.
ANY OPPOSED? ANY ABSTENTIONS? OKAY.
THE CONSENT AGENDA IS APPROVED.
[6.1 Update on Board Priority Revision Requests: NPRR1309, Dispatchable Reliability Reserve Service Ancillary Service, and NOGRR282, Large Electronic Load Ride-Through Requirements]
LIKE TO INVITE KEITH COLLINS, JEFF BILLOW, AND KAITLYN SMITH, THE TAX CHAIR TO PRESENT AGENDA ITEM 6.1, UPDATE ON BOARD PRIORITY REVISION REQUEST, WHICH INCLUDE NPRR 1309 DISPATCHABLE RELIABILITY RESERVE SERVICE, ANCILLARY SERVICE, AND GER 2 82 LARGE ELECTRONIC LOAD RIDE THROUGH REQUIREMENTS.UH, KEITH, WE'RE GONNA HAVE YOU START THE DISCUSSION, THEN WE'LL HAVE KAITLYN, UH, PROVIDE ATTACK PERSPECTIVE, AND THEN WE'LL PROCEED TO NOER 2 82.
AND BY THE WAY, THE FIRST PART OF THIS DISCUSSION'S ON NPR 1309.
UH, KEITH COLLINS, VICE PRESIDENT OF COMMERCIAL OPERATIONS, AND WE WILL COVER, UM, MY, MY ROLE WILL TO COVER 1309.
AND SO, UH, AT THE DECEMBER MEETING, UH, THE BOARD HAD, UH, INDICATED THAT 1309 WOULD RECEIVE URGENT STATUS.
UH, 1310 DID NOT RECEIVE URGENT STATUS, BUT I WILL NOTE THAT AT THE DECEMBER 10TH PRS MEETING STAKEHOLDERS, UM, DID VOTE TO GRANT THEIR OWN URGENT STATUS ON 1310.
THAT DOES NOT CARRY THE SAME MEANING AS, AS THE BOARD, UM, UH, PUTS ON ON URGENT STATUS.
UH, BUT AS A RESULT, WE HAVE AT THE FIRST, UH, THE FIRST TWO STAKEHOLDER MEETINGS, UM, DISCUSSED BOTH 1309
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AND 1310 IN THE STAKEHOLDER PROCESS.UH, AND, UH, ULTIMATELY, UH, WE COVERED EVERYTHING FROM THE VARIOUS ITEMS SUCH AS TIMELINE, UH, STATUTORY REQUIREMENTS.
UH, WE'VE LOOKED AT PROTOCOL LANGUAGE, SOME OF THE COMMON AND DIFFERENTIATING ITEMS BETWEEN THE TWO DIFFERENT, UH, NPR.
UH, AT THE MOST RECENT MEETING LAST WEEK, THERE WAS A LOT OF DISCUSSION ABOUT SPECIFIC EXAMPLES, UH, THAT HIGHLIGHT ELEMENTS OF BOTH 1309 AND 1310.
AND WE DID RECEIVE A LOT OF STAKEHOLDER COMMENT, UH, ON, ON TWO PARTICULAR ITEMS. UH, UH, ONE WAS ULTIMATELY THE, THE NATURE OF, OF 1310.
AND THE, THE SECOND ONE WAS AROUND, UH, THE REQUIREMENTS, PARTICULARLY AROUND ENERGY STORAGE RESOURCES AND, AND ITS INCLUSION, UH, AND, AND WHERE IT SHOULD BE PLACED, UH, EITHER IN THE 1309 OR AS IT SITS TODAY, THE 1310.
SO THOSE WERE, WERE, UH, SOME REALLY, UH, SOME GOOD DELIBERATIONS.
UH, AND WE DO EXPECT TO HAVE, UH, MONTHLY DELIBERATIONS, UH, OVER THE NEXT SEVERAL MONTHS LEADING INTO THE, THE JUNE MEETING.
AND, AND I'LL, I'LL TURN IT OVER TO KAITLYN TO, TO TALK ABOUT THE, SORT OF THE NEXT STEPS IN TURN IN TERMS OF, UH, WHETHER WE CONTINUE TO, UH, TO TALK ABOUT 1310, OR WE FOCUS ON 1309, UH, GOING FORWARD.
SO I'LL PAUSE AND SEE IF YOU HAVE ANY QUESTIONS FOR ME, AND IF NOT, I'LL, I'LL HAND IT OVER TO CAITLIN.
KEITH, I WOULD JUST MAKE ONE COMMENT THAT I, I THINK IT WOULD BE USEFUL IF YOU CONTINUED TO CONSIDER 1310, PARTICULARLY IN LIGHT OF OUR DISCUSSION ABOUT LONG DURATION BATTERIES THIS MORNING.
UM, YOU KNOW, AND, AND, AND I UNDERSTAND THAT IT MIGHT NOT BE THE RIGHT TIME TO TURN IT ON, BUT I THINK FROM A TECHNICAL PERSPECTIVE, BUILDING IT INTO THE SERVICE WOULD BE MUCH MORE ECONOMIC NOW THAN IF IT WAS DONE LATER.
SO THANK YOU FOR YOUR COMMENTS.
ANY OTHER QUESTIONS OR COMMENTS FOR KATE CA? I'D LIKE TO HEAR YOUR PERSPECTIVE FROM TACT.
I HAVEN'T GOTTEN ANY TALLER IN MY THREE YEARS AS TECH CHAIR.
UM, SO, YOU KNOW, FOR FOR DRS, WE, WE CONSIDERED HOW TO APPROACH THIS AND, AND TECH LEADERSHIP DECIDED THAT A CENTRALIZED APPROACH WOULD BE BEST.
THAT'S WHY YOU'RE SEEING THESE DRS WORKSHOPS.
THEY ARE TECH LED WORKSHOPS, ANCILLARY SERVICES.
WE HAVE THIS RECURRING IMPORTANT ISSUE WHERE WHEN WE HAVE ANCILLARY SERVICE ISSUES IN THE STAKEHOLDER PROCESS, THEY REALLY NEED TO BE CONSIDERED BY BOTH THE WHOLESALE MARKETS WORKING GROUP AND THE RELIABILITY OPERATIONS GROUPS AND THEIR WORKING GROUPS.
SO IT WAS A LOT EASIER TO KIND OF CONDENSE THEM IN THESE WORKSHOPS.
UM, AND SO WE THOUGHT IT WAS A GOOD WAY TO ACCOMPLISH TWO THINGS, KIND OF MAKE THIS REALLY HIGH LEVEL POLICY DRIVEN DECISION AT THE HIGHEST LEVEL OF STAKEHOLDER ENGAGEMENT, AND THEN GET ALL THOSE MULTIPLE SUBCOMMITTEES AND WORKING GROUPS IN ONE PLACE.
RIGHT NOW, AS, AS KEITH SAID, AND YOU GUYS DISCUSSED, WE ARE CONSIDERING THREE REVISION REQUESTS TOGETHER FOR DRS, THE TWO PRIORITY REVISION REQUESTS HERE ON THE SCREEN, 1309 AND NORE 2 83 AS WELL AS 1310.
UM, WE ARE PLANNING AT LEAST TWO MORE WORKSHOPS, AND THEN WE WILL START TO HAVE THOSE VOTING MEETINGS BECAUSE THEY DO STILL NEED TO GO TO ROSTER PRS IN TECH FOR VOTES.
UM, YOU KNOW, I THINK I WOULD TOUCH ON ONE OTHER THING.
IN ADDITION TO THE WORKSHOPS AT OUR DECEMBER PRS MEETING, WE DID HAVE A MAJORITY VOTE TO GIVE 1310 URGENT STATUS.
WHAT THAT DOES PRACTICALLY IS JUST ELIMINATE A PRS VOTING MEETING.
IT JUST MEANS YOU CAN VOTE ON LANGUAGE AND IMPACT ANALYSIS AT THE, THE SAME MEETING.
YOU DON'T HAVE TO DO TWO VOTING MEETINGS, BUT I THINK THE INTENT BY STAKEHOLDERS WAS TO HAVE THIS ONE HAVE THE SAME LEVEL OF PRIORITY AS 1309.
BUT, BUT KEITH, UH, TOUCHED ON THE TWO MAIN DECISION POINTS.
UH, ONE IS WHETHER 1310 SHOULD CONTINUE ON THE SAME PATH AS 1309.
UH, 1310 HAS THE RELEASE FACTOR MECHANISM AND THE ESR PARTICIPATION.
WE RECEIVED ABOUT 10 COMMENTS THAT ARE LESS WORKSHOP REGARDING THE TIMING AND NECESSITY OF, OF THE RESOURCE ADEQUACY MECHANISM IN 1310.
I WOULD SAY THREE OF THOSE WERE GENERALLY SUPPORTIVE, BUT MORE SUPPORTIVE OF A RESOURCE ADEQUACY MECHANISM.
AND, AND MAYBE SAYING, I DON'T KNOW IF THIS IS IT, BUT WE NEED ONE VERY URGENTLY, AND THEN SEVEN WERE MORE OPPOSED TO MOVING 1310 QUICKLY.
UM, THE DEBATE INCLUDED SOME DISCUSSION ABOUT THE FIRST,
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UH, I DON'T SEE BARKSDALE, BUT TRIENNIAL IS THE GOOD WORD.UH, RELIABILITY STANDARD STUDY, WHICH IS DUE IN AUGUST.
AND UNDERSTANDING THAT WE'LL HAVE SOME RECOMMENDATIONS ON RESOURCE ADEQUACY AS WELL.
UM, THE SECOND AREA OF DISCUSSION, WHICH, UH, THE BOARD TEED UP NICELY WAS AROUND THE INCLUSION OF ENERGY STORAGE RESOURCES.
CURRENTLY, ENERGY STORAGE RESOURCE PARTICIPATION IS RESERVED FOR IMPLEMENTATION WITH THE RELEASE FACTOR MECHANISM NPR 1310.
BUT WE RECEIVED ABOUT SIX SETS OF COMMENTS SAYING THAT THAT SHOULD BE MOVED TO 1309, THE INITIAL, UM, ANCILLARY SERVICE IMPLEMENTATION.
I THINK THAT CONCLUDES MY COMMENTS ON THIS.
ANY QUESTIONS OR COMMENTS FOR CALY? JOHN? OH, I THOUGHT YOU WERE REACHING FOR THE MICROPHONE.
IF WE DON'T, IS THERE ANY OTHER DISCUSSION ON 1309 BEFORE WE PROCEED TO NO.
LOOKS LIKE WE'RE GONNA TALK ABOUT NO, 2 82 AND JEFF, BE YOU'RE THE PRESENTER.
SO IN DECEMBER, THE BOARD DESIGNATED NO, 2 82 AND NPR 1308 AT, UH, THE, UH, LARGE LOAD, LARGE ELECTRONIC LOAD RIDE THROUGH REQUIREMENTS DESIGNATED THOSE AS PRIORITY REVISION REQUEST.
UH, SO I'M HERE TO PROVIDE AN UPDATE ON, ON EACH OF THOSE.
UM, SO AS YOU CAN SEE IN THE TABLE, UH, BOTH OF THEM HAVE BEEN DISCUSSED IN, UH, SEVERAL STAKEHOLDER MEETINGS, UH, SINCE THAT TIME.
UH, I THINK THE WORKING GROUPS ARE REALLY FOCUSED ON, UH, VARIOUS TECHNICAL DETAILS THAT VARIOUS, UH, DIFFERENT ASPECTS OF THE TECHNICAL DETAILS.
I, I WOULD SAY THAT THOSE DISCUSSIONS ARE PROGRESSING WELL.
UH, WE HAVE THREE, UH, IMPORTANT, UH, WORKING GROUP MEETINGS COMING UP LATER THIS MONTH.
AND I THINK THOSE ARE GONNA BE REAL KEY FOR MAKING SURE THAT THESE CONTINUE TO MOVE FORWARD.
UH, WHAT WE WOULDN'T WANT HAPPEN IS, UH, TO TRY TO ADDRESS ALL THE ISSUES THAT ARE BEING BROUGHT UP IN THESE TECHNICAL DISCUSSIONS.
AND THEN SOMETIME, UH, SEVERAL MONTHS DOWN THE, DOWN THE LINE, SOMEBODY BRING UP A NEW ISSUE THAT WE HADN'T THOUGHT OF.
SO IT'S, IT'S IMPORTANT, AND I THINK STAKEHOLDERS ARE, ARE WORKING TOWARDS MAKING SURE THAT WE'RE GETTING ALL, ALL OF THOSE TECHNICAL ISSUES ON THE TABLE AND, AND WORKING THROUGH THOSE.
UM, I ALSO HAD SOME FEEDBACK ON THE, UH, THE RIDE THROUGH REQUIREMENT EXEMPTIONS, UH, WHICH PROJECTS THAT ARE MAYBE OL OLDER PROJECTS, YOU KNOW, WHI WHICH SHOULD BE EXEMPT FROM THE REQUIREMENTS.
AND I THINK THAT THAT DISCUSSION HAS ALSO GONE WELL.
UH, MA MAINLY THE FEEDBACK THAT WE'VE GOTTEN IS TO CLARIFY WHAT, WHAT THOSE EXEMPTIONS ARE.
I, I DON'T RECALL ANY, UH, COMMENTS THAT, THAT PEOPLE DISAGREE, UH, CONCEPTUALLY WITH THE, THE EXEMPTIONS THAT WE'VE LAID OUT.
IT'S, IT'S MORE CLARIFICATIONS.
AND THEN, UH, ALSO WANNA POINT OUT AT TAC UH, THERE WAS A, UH, DISCUSSION ON THE APPLICABILITY OF ERCO PUTTING REQUIREMENTS ON END USE CUSTOMERS.
UM, I THINK THAT THAT'S ALL OF THE, UH, COMMENTS I HAVE ON THAT.
SO I, I GUESS BOTTOM LINE IS THESE, THESE ARE WORKING THROUGH THAT STAKEHOLDER PROCESS, WORKING THROUGH THE TECHNICAL DETAILS, AND, UM, HOPE TO GET THAT WRAPPED UP IN THE NEXT COUPLE OF MONTHS.
UM, HAPPY TO ANSWER ANY QUESTIONS BEFORE, UH, A SCENE IF KAITLYN HAS ANY REMARKS.
ANY QUESTIONS FOR JEFF? I'M NOT SEEING ANY.
SO ON, UH, KAITLYN, DID YOU HAVE SOME COMMENTS ON NO, 2 82.
AND BEFORE WE DO THAT, I SEE THAT, UH, COMMISSIONER HALMAN HAS JOINED THE, THE WEBEX.
UH, WE'RE GONNA SUSPEND FOR A MINUTE AND LET, UH, CHAIRMAN GLEASON CALL THE PUC ORDER.
THIS MEETING AND THE PUBLIC UTILITY COMMISSION OF TEXAS WILL COME TO ORDER TO CONSIDER MATTERS THAT HAVE BEEN DULY POSTED WITH THE SECRETARY OF STATE FOR FEBRUARY 9TH, 2026.
UM, AS I WAS LIST, TRYING TO LISTEN TO SOME OF THE TECH MEETING THAT WAS RECORDED, ARE THERE ANY POLICY ISSUES THAT ARE BUBBLING UP THAT ER CANNOT ADDRESS DIRECTLY, BUT MAYBE THE PUC COULD ADDRESS? YEAH, I MIGHT.
UM, I THINK THE DISCUSSION ATTACK WAS LARGELY AROUND THE, UH, YOU KNOW, KEN ERCOT PUT REQUIREMENTS ON END USE CUSTOMERS.
UM, AND I, I, I MIGHT TURN TO PHONE A FRIEND WITH CHAD ON THAT BECAUSE I THINK LEGAL WAS LEADING THAT DISCUSSION.
YEAH, I MEAN, OUR, OUR POSITION IS THAT WE, WE CAN APPLY THOSE REQUIREMENTS TO ANY USE CUSTOMERS WHEN WE DETERMINE THAT THERE'S A RELIABILITY NEED THAT STRETCHES BEYOND KIND OF OUR CURRENT RELATIONSHIPS WITH OUR PARTICIPANTS.
AND THAT WAS THE DISCUSSION THAT WAS HAD AT THE LAST TECH WORKSHOP TO KINDA LAY OUT THE LEGAL FOUNDATION ON WHY WE THINK THAT'S APPROPRIATE.
UM, THAT WILL CONTINUE TO BE A TOPIC OF DISCUSSION FOR THE STAKEHOLDERS.
UH, ULTIMATELY, YOU KNOW, WE, WE WELCOME THE COMMISSION'S INSIGHT TO THIS AS WELL, BUT AT THE END OF THE DAY, THE, THE RELATIONSHIPS WITH THESE END USE CUSTOMERS HAS
[00:25:01]
CHANGED FUNDAMENTALLY EVEN IN THE LAST FIVE YEARS.AND WHERE WE SEE THE RELIABILITY RISK, WHICH IS WHY WE, WE SPONSORED THE, THE REVISION REQUESTS IN THE FIRST PLACE IS ATTRIBUTABLE TO THESE TYPE OF ELECTRONIC CUSTOMERS.
I, I DON'T HAVE THAT MUCH TO ADD TO THIS ONE.
YOU KNOW, WE, WE DID A DIFFERENT APPROACH THAN DRS.
WE, WE SENT THIS CLOSER TO THROUGH THE NORMAL PROCESS BECAUSE OF THE TECHNICAL EX EXPERTISE REQUIRED AT THE, THE ROSS WORKING GROUPS.
UM, SO I THINK JEFF CHARACTERIZED IT ACCURATELY FROM THE STAKEHOLDER POINT OF VIEW AS WELL.
THERE, THERE'S TECHNICAL DISCUSSIONS GOING ON.
WE DID HAVE A TAX DISCUSSION ABOUT ERCOT LEGAL AUTHORITY TO HAVE RELIABILITY REQUIREMENTS.
I WOULD CONSIDER THAT MORE OF A, A LEGAL QUESTION THAN THE POLICY DISCUSSION RIGHT NOW.
I DON'T THINK THERE'S ANYTHING TAC TECH CAN DO ONE WAY ABOUT THAT OR THE OTHER.
UM, SO I, I DON'T KNOW THAT WE'LL REVISIT THAT AT TECH OR THE SUBCOMMITTEES OR WORKING GROUPS, BUT I THINK THAT IS A, A LEGAL DISCUSSION THAT WILL CONTINUE.
IT WAS, UH, THE DISCUSSION WAS REQUESTED BY THE INDUSTRIAL CONSUMERS AND WE THANK OUR CUT FOR PARTICIPATING IN THAT.
I THOUGHT THE DISCUSSION WENT WELL.
ANY COMMENTS OR QUESTIONS ON NUMBER 2 82 FOR KAITLYN OR JEFF? ALRIGHT, I'M NOT SEEING
[6.2 High-Impact Policy Discussions in the Stakeholder Process]
ANYTHING.SO WE'LL MOVE ON TO THE, UH, NEXT AGENDA.
ITEM 6.2, HIGH IMPACT POLICY DISCUSSIONS.
UH, REBECCA ZER IS GOING TO, UH, PRESENT THIS AGENDA ITEM.
I WANNA START THIS CYCLE'S UPDATE AGAIN WITH THE KEY COMMISSION PRIORITIES FOR 2026 AND 2027.
THESE WERE APPROVED AS PART OF ERCOT BIENNIAL BUDGETS.
THE FIRST FOUR ITEMS STAFF TIED INTO THE RELIABILITY ASSESSMENTS.
AND THE LAST IS LARGER INTERCONNECTION.
SEVERAL OF THE KEY ISSUES IDENTIFIED IN THIS PRESENTATION TIE INTO THESE PRIORITIES, AND WE'RE GONNA WORK TO IDENTIFY THOSE REVISION REQUESTS AS THEY COME THROUGH THE PROCESS.
YOU JUST HEARD THE UPDATE ON DRRS AND THE PATH FOR THAT TO BE CONSIDERATION AT THE JUNE BOARD FOR 1309 AND THE PROVISIONS TIED TO THE STATUTORY REQUIREMENTS.
SOME OF THE LARGE LOAD ISSUES.
JEFF'S JUST PROVIDED THE UPDATE ON NOVA 2 82.
HE'LL ALSO PROVIDE AN UPDATE TOMORROW ON THE BATCH STUDY PROCESS.
AND THEN SB SIX, WE HAVE ANOTHER SLIDE, BUT ERCOT CONTINUES TO WORK THROUGH THOSE PROVISIONS WITH THE, UM, COMMISSION AND INDIVIDUAL ERCOT PROJECTS.
ALL OF THE LARGE LOAD INTERCONNECTION ISSUES ARE KEY COMMISSION PRIORITIES.
THIS IS AN UPDATE ON THE CHART FROM PABLO'S PRESENTATION IN DECEMBER.
WE DID HAVE OUR FIRST PUC APPROVED RULEMAKING RELATED TO SB SIX WITH THE LARGE LOAD FORECASTING CRITERIA.
AS PART OF THAT, ERCOT SUBMITTED A COMPLIANCE PLAN TO MAKE SURE THE 2026 REGIONAL TRANSMISSION PLANNER RTP COMPLIED WITH THE RULE.
WE'RE EXPECTING LATER THIS MONTH A, UM, CONSIDERATION OF THE NET MEETING ARRANGEMENT RULEMAKING, AND ALSO AN UPDATE ON THE LARGER ALERT CONNECTION STANDARDS, WHICH WILL TIE TO THAT BATCH PROCESS FOR PLANNING CRITERIA.
UM, PR 1 27 WAS ON THAT BOARD CONSENT AGENDA, NPR 1286.
WE DO EXPECT MOVEMENT IN THE NEXT MONTH OR TWO.
ERCOT IS WORKING WITH, UM, STAKEHOLDERS, SPECIFICALLY INDUSTRIAL CONSUMERS ON ALTERNATIVES TO THAT NPR 1286 LANGUAGE UNDER R OS AT THE PLANNING WORKING GROUP FOR RESIDENTIAL DEMAND RESPONSE.
ERCOT FILED COMMENTS IN JANUARY THAT WERE DISCUSSED AT WMS ALREADY THIS MONTH, LOOKING AT IMPACTS TO PRICE FORMATION BASED ON STAKEHOLDER FEEDBACK.
I THINK THEY WERE WELL RECEIVED AND ERCOT PLANS TO FILE ADDITIONAL ANALYSIS FOR DISCUSSION IN THE FOLLOWING MONTHS FOR THE STANDARD FORM AGREEMENT.
IT HAS BEEN, UM, IT'S DISCUSSED IN THE STAKEHOLDER PROCESS NOW.
ERCOT HOSTED A WORKSHOP IN JANUARY, GIVEN THESE ARE LARGE, UM, LARGE CHANGES TO THAT STANDARD FORM.
ERCOT PROVIDED INFORMATION ON THE CHANGES AND PROVIDE
[00:30:01]
AN OVERVIEW OF THE SFA ERCOT DOES PLAN TO KEEP THIS TABLE TO LEAST ONE MORE MONTH AND THEN, UM, FILE ADDITIONAL COMMENTS BASED ON FEEDBACK IN MARCH.FIRM FUEL SUPPLY SERVICE, THIS IS BACK, THE PUC IN JANUARY, ADOPTED A RULEMAKING AND BRR 1275 HAD BEEN TABLED LAST YEAR TO ALLOW THAT RULEMAKING TO GO THROUGH.
LOOKING AT THE DEFINITION OF A QUALIFYING PIPELINE, UM, WITH THAT 1275 CAN NOW MOVE FORWARD AND ER, COTS PLANNING AND ADDITIONAL REVISION REQUEST TOOK IT PROVISIONS OF THAT RULE.
WE DO EXPECT THOSE PHASE THREE PROVISIONS IN PLACE FOR THE 20 26, 20 27 WINTER SEASON IN THAT PROCUREMENT PERIOD.
THAT RFP WILL GO OUT IN AUGUST.
AND THIS IS NEW FOR THIS, UM, CYCLE WE HAD IN THE LAST TWO YEARS, EXPERIENCE WITH, UM, RELIABILITY MUST RUN RMRS MUST RUN ALTERNATIVES, RAS AND CONTRACT FOR CAPACITY RFPS.
UM, WE'VE BEEN REVIEWING THE LESSONS LEARNED AND POTENTIAL PROCESS IMPROVEMENTS.
WE HAD A WORKSHOP LAST OCTOBER AND THEN LATE LAST YEAR FILED THREE NPRR IS LOOKING AT, UM, IN GENERAL CHANGES TO THE CONTRACT FOR CAPACITY PROCESS AND THEN IMPROVEMENTS FROM A REALLY VISIBILITY AND INFORMATION PERSPECTIVE ON POTENTIAL RETIREMENTS OF UNITS AND THEN THE SEASONAL MOCK BALL PROCESS.
SO WE DO EXPECT THOSE, THEY'RE ALL NOW, UM, REFERRED TO SUBCOMMITTEES AND TO BE ABLE TO PROVIDE UPDATES IN THE NEXT FEW MONTHS ON THESE ITEMS. AND THEN WE HAVE THE, THE METRICS IN THE APPENDIX.
UM, SEVERAL OF THOSE WERE AGING REVISION REQUESTS WERE MOVING FORWARD.
SO THERE'S A LOT OF WORK GOING THROUGH IN THAT STAKEHOLDER PROCESS TIED TO THESE KEY ITEMS. OKAY, SO WE JUST HEARD DISCUSSION OF THE HIGH IMPACT POLICY ITEMS THAT ARE GONNA BE IN FRONT OF US IN THE FUTURE.
ANY QUESTIONS FOR REBECCA? COMMENTS DISCUSSION? OKAY,
[7. TAC Report]
THANK YOU REBECCA.WE'RE GONNA INVITE, UH, KAITLYN SMITH, THE TECH CHAIR TO, UH, COME BACK TO THE PODIUM AND PRESENT AGENDA.
NOW I'LL BE PRESENTING, UH, THE TECH REPORT, WHICH IS A SUMMARY OF THE TECH MEETINGS THAT OCCURRED SINCE THE LAST BOARD MEETING AND THIS CASE ONLY JANUARY.
AND I WILL ALSO BE REVIEWING OUR, OUR CONFIRMED SUBCOMMITTEE LEADERSHIP.
I ALREADY PROVIDED THE UPDATE ON THE BOARD PRIORITY REVISION REQUEST, BUT HAPPY TO ANSWER ANY FURTHER QUESTIONS.
AND THANK YOU FOR CONFIRMING MY TECH LEADERSHIP.
I'M EXTREMELY EXCITED AND HONORED TO BE CHAIR FOR A THIRD YEAR, AND WE HAVE A LOT OF WORK TO DO, BUT I THINK WE'RE UP FOR IT.
AND THANK YOU TO MARTHA, WHEREVER SHE IS, WHO'S, UH, JUST THE BEST TO WORK WITH AND REALLY HELPFUL.
AND THANK YOU TO ANNE BORON, WHO IS MY SECOND RIGHT HAND WOMAN AND ALWAYS TAKES MY CALLS AND SHE'S HIDING RIGHT NOW, BUT SHE'S THE BEST ALSO.
IT WAS LIGHT AS CHAD EARLIER NOTED EARLIER.
WE JUST HAVE FIVE REVISION REQUESTS, UH, RECOMMENDED FOR APPROVAL.
WE DID, UH, IN ADDITION TO THE ONE JANUARY MEETING, WE HAD 2D RS NON-VOTING WORKSHOPS.
WE'RE HARD AT WORK, BUT NOT A TON OF APPROVED REVISION REQUESTS.
HERE IS THE, UH, LIST OF SUBCOMMITTEE, SUBGROUP, AND TASK FORCE LEADERSHIP THAT WE CONFIRMED.
UM, PRO PROTOCOL REVISION SUBCOMMITTEE.
UH, DIANA COLEMAN IS RETURNING AS CHAIR.
SHE'S, UH, EXPERIENCED LEADER IN THIS ROLE AND SHE'S TACKLED QUITE A FEW, UH, DIFFICULT AND SUBSTANTIVE REVISION REQUESTS.
SHE HAS ONE ON DECK FOR WEDNESDAY AND SHE'S VERY EASY TO WORK WITH, SO I APPRECIATE HAVING HER HERE.
I BELIEVE HE WILL BE LEAVING THIS ROLE DUE TO A NEW, EXCITING OPPORTUNITY FOR HIM.
AND WE WILL HAVE A NEW VICE CHAIR FOR YOU NEXT TIME.
RETAIL MARKET SUBCOMMITTEE, UH, JOHN SCHATZ FROM RA AND DEBBIE MCKEEVER FROM ENCORE.
THESE TWO SWITCH BACK AND FORTH FROM CHAIR AND VICE CHAIR, THEY WORK TOGETHER REALLY WELL.
THIS IS A VERY DETAILED SUBCOMMITTEE.
IT GETS LESS AIRTIME, BUT THEY'RE DOING, YOU KNOW, THE, THE CUSTOMER FACING WORK THERE.
AND IT'S EXTREMELY DETAIL ORIENTED.
RELIABILITY AND OPERATIONS SUBCOMMITTEE.
SANDEEP BOKAR FROM LCRA AND SHANE THOMAS FROM SHELL WHOLESALE MARKET SUBCOMMITTEE.
UH, CHAIR BLAKE HOLT AND VICE-CHAIR JIM LEE RETURNING.
BLAKE HOLT IS ANOTHER RIGHT HAND PERSON WHO IS JUST SO HELPFUL TO ME, LIKE MARTHA AND ANN CREDIT FINANCE SUBGROUP.
UH, NEW LEADERSHIP FROM JET PRICE FROM GOLDEN SPREAD.
[00:35:01]
MARTIN VICE CHAIR WAS OUR CHAIR LAST YEAR.AND THEN THE REAL TIME CO-OP OPTIMIZATION PLUS BATTERIES TASK FORCE.
WE ARE KEEPING THIS GOING FOR A LITTLE BIT.
WE WILL BE WORKING ON WINDING IT DOWN.
UM, BUT WE WANNA MAKE SURE THAT ALL THE ITEMS WE SAID, WE'LL, WE'LL DO AFTER RTC OR WE WILL REVISIT WHEN WE HAVE ENOUGH DATA.
WE WANNA MAKE SURE WE STAY ON TOP OF THOSE.
SO THAT'S THE WORK THIS GROUP IS DOING RIGHT NOW.
UM, GORDON DRAKE FROM ERCOT HAS STEPPED IN FOR MATT MARINAS AND, UH, I, I'M SURE I'VE SAID ENOUGH GOOD THINGS ABOUT MATT MARINAS HERE, BUT HE'S GREAT AND WE'RE EXCITED THAT HE'S WORKING ON THE, THE LOAD INTERCONNECTION PROJECT.
AND HIS RTC UPDATES ATTACK THE LARGE LOAD WORKING GROUP, UH, MET AFTER ATTACK, BUT I BELIEVE THAT IS BOB WHITMEYER AND PATRICK GUAVA, AND WE'LL BRING THOSE NEXT MONTH AS WELL.
UM, AT JANUARY TECH, WE ALSO, UH, VOTED UNANIMOUSLY TO ENDORSE THE ST.
HERE ARE OUR TAX STRATEGIC STRATEGIC OBJECTIVES.
LAST YEAR WE CHANGED FROM GOALS TO STRATEGIC OBJECTIVES.
UM, THE, THE PURPOSE WAS TO MAKE THESE MORE EVERGREEN AND ALIGN WITH THE ERCOT STRATEGIC OBJECTIVES.
AND I THINK WE SUCCEEDED IN THAT.
UM, ALSO NOTE THAT AT THE SAME TIME WE, WE CHANGED PROCESS TO OUR TECH ACTION ITEMS. WE MADE THEM A LITTLE MORE ACTION ORIENTED AND ASSIGNED A CHAIR OR A, A CHAMPION TO EACH, AND THAT'S BEEN QUITE SUCCESSFUL FOR US.
AND THEN THE LAST TWO SLIDES ARE THE BOARD PRIORITY REVISION REQUESTS, WHICH WE ALREADY TOUCHED ON.
AND SO I CAN END THERE UNLESS THERE ARE ANY QUESTIONS.
ANY QUESTIONS FOR CAITLIN? ANY COMMENTS? OKAY.
WELL, AGAIN, CONGRATULATIONS ON YOUR REELECTION.
WE LOOK FORWARD TO WORKING WITH YOU AND MARTHA YEAH, OVER THE COMING YEAR.
AND WE APPRECIATE ALL THE GREAT WORK THAT TACK DOES.
WE HAVE A LOT OF THINGS, I THINK DUE BACK HERE IN JUNE.
SO, UH, THEN WE'LL TAKE THE SECOND HALF OF THE YEAR OFF
[8. 25RPG012 STEC Ammonia Plant Load Project – Option 1]
GONNA MOVE TO AGENDA ITEM EIGHT, WHICH IS THE, THE TWO FIVE RPG ZERO 12 SSEC AMMONIA PLANT LOAD PROJECT.UH, CHRISTIE HOBBS CAN PRESENT THIS ITEM.
CHRISTIE, PROCEED WHEN YOU'RE READY.
SO BEFORE YOU HAVE A, A PROJECT AS KAITLYN MENTIONED, CAME UNANIMOUSLY ENDORSED FROM TAC AS WELL.
UH, SO I'LL COVER SOME OF THE HIGHLIGHTS OF THIS PROJECT FROM STICK.
THEY SUBMITTED THIS PROJECT TO US FOR A LARGE LOAD ADDITION.
IT'S ABOUT A 300 MEGAWATT LARGE LOAD, UH, THAT'S IN THE COASTAL AREA.
UM, AND WHEN THEY WERE REVIEWING THIS, THERE WERE A NUMBER OF UPGRADES THAT ARE REQUIRED NOT ONLY TO CONNECT THE LOAD, BUT BECAUSE OF THERMAL AND VOLTAGE VIOLATIONS THAT OCCUR IN THE AREA.
WE DID OUR INDEPENDENT REVIEW.
UM, WE WENT THROUGH A, A NUMBER OF OPTIONS.
THERE WERE EIGHT OPTIONS, GOT SHORTLISTED DOWN, AND WHAT BEFORE YOU IS A RECOMMENDATION FOR A HUNDRED, $117 MILLION PROJECT.
UM, THAT WOULD HELP, UM, HELP US WITH THE VIOLATIONS THAT WE SAW TO BOTH OUR ERCOT AND NERC PLANNING CRITERIA.
UM, THERE'LL BE A NEW SUBSTATION.
UH, THERE'S SOME MINIMAL AMOUNT OF NEW RIGHT OF WAY THAT'S REQUIRED.
BUT THE PROJECT BEFORE YOU, THE REASON WE WENT WITH THIS OPTION, NOT ONLY DID IT MEET PROJECT NEED, BUT IT WAS THE LEAST COST OF THE ALTERNATIVES.
IT GIVES MORE FUTURE LOAD CARRYING CAPABILITY IN THE REGION, AND IT HAD THE LEAST AMOUNT OF RIGHTS, NEW RIGHT AWAYS THAT WERE REQUIRED FOR THE PROJECT.
IF YOU DUG INTO THE DETAILS OF THE REPORT, YOU MAY HAVE NOTICED THAT THE INITIAL SUBMISSION BY STACK WAS, UM, AT A LOWER COST.
THERE'S TWO PARTS FOR THE REASON FOR THE INCREASE.
AND THIS OPTION ONE, UH, THERE'S A PART OF THE BILL THAT'S GOTTA BE DONE BY A EP AS WELL, UH, BECAUSE OF SOME LINES IN THE AREA AND STUCK DID NOT INCLUDE THE MOST CURRENT COST UP ESTIMATES FROM A EP AS WELL AS THERE WERE SOME TARIFF IMPLICATIONS, UM, THAT THEY'RE NOW SEEING IN COST OF MATERIALS SINCE THE ORIGINAL SUBMISSION.
SO ERCOT RECOMMENDS THAT YOU ENDORSE THIS.
IT WAS ALSO UNANIMOUSLY RECOMMENDED BY TAC.
I'LL PAUSE TO SEE IF YOU HAVE ANY QUESTIONS.
ANY QUESTIONS FOR CHRISTIE? ANY COMMENTS? OKAY, ARE WE READY TO VOTE ON THIS NOW? OKAY, IF THERE'S NO FURTHER DISCUSSION, I'LL ENTERTAIN A MOTION TO APPROVE THE 25 R PG ZERO 12 STACK AMMONIA PLANT
[00:40:01]
LOAD PROJECT.OKAY, WHO, WHO MOVED? CHRIS, THANK YOU.
ANY OPPOSED? ANY ABSTENTIONS? OKAY, THANK YOU.
[9.1 System Planning and Weatherization Update]
IS GEN ITEM NINE, SYSTEM PLANNING AND OPERATION BY THE WAY, THAT, UH, PROJECT WAS APPROVED.UH, GEN ITEM NINE, SYSTEM PLANNING AND OPERATIONS.
THERE ARE THREE SUB ITEMS AND THE FIRST IS AGENDA ITEM 9.1, SYSTEM PLANNING AND WEATHERIZATION UPDATE.
CHRISTIE, WOULD YOU WALK US THROUGH THAT? ALL RIGHT.
SO I WANNA HIT A FEW HIGHLIGHTS FOR YOU.
LOOKING AT SOME OF THE INITIAL WEATHERIZATION STATS THAT WE SAW FROM WINTER STORM FERN.
UM, SOME OF THE HIGHLIGHTS FROM OUR TRANSMISSION PLANNING REPORTS THAT WE POSTED AT THE END OF LAST YEAR, AS WELL AS HIT ON SOME OF THE AREAS THAT WE DON'T TYPICALLY TALK ABOUT HERE, UH, LIKE OUR NETWORK OPERATIONS MODEL, JUST TO GIVE YOU SOME INSIGHT AND ALL THE HARD WORK THAT TEAM DID THIS PAST YEAR.
ALL RIGHT, FROM A WEATHERIZATION PERSPECTIVE, WE ARE WELL UNDERWAY.
WE ONLY HAVE A COUPLE MORE WEEKS LEFT IN OUR WINTER WEATHERIZATION INSPECTIONS.
UM, THESE STATS WERE PULLED, UH, IN TIME FOR MATERIAL POSTING.
UM, BUT AT THAT TIME, UH, MID-JANUARY WE WERE AT 240 INSPECTIONS.
AS OF FRIDAY, UH, THAT NUMBER IS NOW 379.
SO YOU CAN TELL THE TEAM HAS BEEN BUSY MAKING SURE THAT, UH, FOLKS, BOTH RESOURCES AND TSPS ARE PREPARED FOR THE WINTER SEASON.
THIS IS A TABLE THAT YOU HAVEN'T SEEN BEFORE.
UM, AS WE WERE GOING THROUGH WINTER STORM FERN, LOOKING AHEAD AT THE FORECAST, WHAT THEY WERE PROJECTED IN EACH OF THE AREAS, AND THIS JUST GIVES YOU A COMPARISON.
THIS IS ACTUALLY THE ACTUALS, UM, THAT CAME IN.
UM, THERE ARE EIGHT DIFFERENT WEATHER ZONES.
SO IN THE WEATHERIZATION STANDARD, YOU WOULD EXPECT A DIFFERENT STANDARD FOR A UNIT THAT'S IN THE PANHANDLE VERSUS ONE THAT'S FAR SOUTH TEXAS IN THE BROWN SOIL AREA.
SO THEY HAVE DIFFERENT STANDARDS TO MEET.
THE GREEN COLUMN SHOWS WHAT THE, UH, PUC WEATHERIZATION STANDARD IS THAT THEY'RE REQUIRED TO BE ABLE TO OPERATE AT.
THAT'S AT THE 95TH PERCENTILE.
AS YOU SEE MOVING OVER INTO SATURDAY, SUNDAY, AND MONDAY.
THE ACTUAL TEMPERATURES THAT CAME IN FOR THE STORM, THE CELLS IN RED, I'LL HIGHLIGHT FOR YOU.
THOSE ARE ACTUALLY COLDER THAN WHAT IS REQUIRED.
BUT THE GOOD NEWS IS, IS THAT WE SAW GREAT PERFORMANCE FROM THE FLEET, UM, AND HOW THEY OPERATED THROUGH THESE COLDER PERIODS OF TIMES.
UM, SO, YOU KNOW, KUDOS TO THE WEATHERIZATION STAFF WORKING WITH MARKET PARTICIPANTS THAT ARE MAKING THOSE INVESTMENTS TO BE PREPARED TO OPERATE THROUGH COLD WEATHER.
WHAT IS THE PROCESS, UH, TO LOOK AT THE STANDARDS AND WHETHER THEY NEED TO BE REVISED? THAT'S ACTUALLY AN ITEM FOR THIS YEAR AS A PART OF THE PUC WEATHERIZATION RULE WHEN THEY APPROVED IT.
UH, THERE, IT'S PUT IN EVERY FIVE YEARS THAT WE GO BACK AND LOOK.
SO WE'LL HAVE FIVE MORE YEARS OF WEATHER DATA AND WE WILL BE FILING A REPORT WITH THE COMMISSION LATER THIS YEAR.
UM, AND THEN THEY CAN DECIDE WHETHER OR NOT THEY WOULD LIKE TO OPEN THE RULE, UM, TO CHANGE THE STANDARD.
ALL RIGHT, FROM A TRANSMISSION PERSPECTIVE, UM, AS WE'VE BEEN TALKING, YOU'VE BEEN REVIEWING A LOT OF PROJECTS AND WE KNOW WITH A STRONG ECONOMY IT TAKES INFRASTRUCTURE, WHETHER IT'S ROADS, UH, WATER, AND IN OUR CASE, ELECTRIC INFRASTRUCTURE TO BE ABLE TO MEET THOSE DEMANDS IN 2025.
UM, LOOKING BACK ON THE PROJECTS THAT YOU ENDORSED, IT WAS OVER $14 BILLION WORTH OF TRANSMISSION THAT IS NEEDED TO SUPPORT THAT DEMAND.
THAT COMPARES TO 2024, WHICH WAS 3.8 BILLION.
IN THE TOP CHART, WHAT YOU'LL SEE IS THE ANNUAL TRANSMISSION COST OF SERVICE.
SO WHAT DOES IT TAKE TO BUILD AND OPERATE TRANSMISSION? YOU SEE, IT'S BEEN TRENDING UP OVER TIME.
BUT WHEN YOU TAKE THAT AND YOU NORMALIZE IT FOR OR ADJUST IT FOR INFLATION, YOU CAN SEE BECAUSE WE'VE BEEN ADDING MORE LOAD TO THE SYSTEM, THERE ARE MORE USERS THAT ARE CONSUMING THE POWER, WHICH MEANS THERE ARE MORE CONSUMERS TO SHARE IN THOSE COSTS.
AND YOU CAN ACTUALLY SEE THERE'S BEEN A DECLINE IN THOSE SAME TIME PERIOD, EVEN THOUGH WE'VE SEEN THE COST OF SERVICE GOING UP.
SO THAT'S GOOD NEWS FOR THE RATE PAYERS OF TEXAS AS WE LOOKED AT OUR 2025 REGIONAL TRANSMISSION PLAN.
[00:45:01]
A PART OF OUR PLANNING EXERCISES, WE LOOK SIX YEARS INTO THE FUTURE FORECAST A DEMAND FORECASTED GENERATION TO BE ON THE SYSTEM AND WHAT TRANSMISSION NEEDS ARE NEEDED TO RELIABLY SERVE IT.WE PROPOSED 192 RELIABILITY PROJECTS, WHICH IS MORE THAN ANY PREVIOUS REGIONAL TRANSMISSION PLAN.
IN FACT, IF YOU LOOK AT THE TOP OF THE TABLE BACK ABOUT 10 YEARS AGO, WE ONLY PROPOSED THE NEED FOR 40 RELIABILITY PROJECTS WITH THE INCREASED GROWTH IN THE CENTRAL TEXAS AREA.
A PART OF THE PLAN ALSO RECOMMENDED ADDITIONAL 7 65 INFRASTRUCTURE FOR A SUBSTATION, UH, TO CONNECT ACROSS CENTRAL TEXAS.
THAT PROJECT IS CURRENTLY GOING THROUGH REGIONAL PLANNING GROUP PROCESS REVIEW.
WE ALSO INCLUDED A SUNSET REVIEW CASE.
SO WE KNOW WITH 26,000 MEGAWATTS OF, OF SOLAR ON THE SYSTEM AS EVERY NIGHT, UM, WHEN THE SUN GOES DOWN, WE'VE GOTTA BE ABLE TO RELIABLY SERVE WITH TRANSMISSION NEEDS.
UM, AND DAN, I DON'T WANNA STEAL HIS THUNDER, HE'LL BE TALKING ABOUT THIS LATER ABOUT WHAT WE'RE SEEING IN FAR WEST TEXAS.
UM, SO WE CONTINUE TO SEE ADDITIONAL NEEDS FOR TRANSMISSION TO SUPPORT THOSE AREAS, UH, WITH HIGH DEMAND THAT DON'T HAVE A LOT OF CONVENTIONAL GENERATION LOCATED IN THEM.
ONE OF OUR OTHER REPORTS, UH, THAT WE PUT OUT ANNUALLY IS CONSTRAINTS AND NEEDS REPORT.
UM, AND I PULLED THIS SLIDE OUT OF THAT REPORT JUST TO HIGHLIGHT SOME OF THE ECONOMIC ANALYSIS THAT GOES IN.
WHAT THIS, UH, SHOWS IS THE TOP 10 TRANSMISSION CONSTRAINTS, UM, THAT WE SEE IN, AS YOU LOOK THROUGH 2027 AND END OF 2030, YOU CAN CONTINUE TO SEE SOME OF THESE TOP CONGESTION CONSTRAINTS REOCCURRING UNTIL WE GET TO 2030 WITH THE ONSET OF 7 65, WHICH THEN YOU WILL START TO SEE THE BENEFIT OF THAT INCREASED TRANSFER CAPABILITY AND REDUCED, UH, CONGESTION ON THE SYSTEM.
SO IF YOU GO BACK TO THAT COMPARISON PLAN WE DID WHERE WE HIGHLIGHTED THE ECONOMIC SAVINGS FROM THE 7 65 OPTION, YOU KNOW, OUR STUDIES ARE CONTINUING TO SHOW THAT AS WE MOVE THROUGH TIME.
SO THE NETWORK OPERATIONS MODEL TEAM, UM, I LIKE TO, TO THINK OF THESE FOLKS AS THE HEARTBEAT OF THE ORGANIZATION.
THEY'RE STARTING WITH OUR BASIC BUILDING BLOCKS FOR THE NETWORK OPERATIONS MODELS THAT USED NOT ONLY IN THE CONTROL ROOM, BUT AS A PART OF OUR MARKETS PROCESS, THE CONGESTION, REVENUE RIGHTS MARKETS, AND FOR ALL OF OUR PLANNING MODELS.
AND THEY DO A LOT OF WORK BEHIND THE SCENES AND BECAUSE THEY DO SUCH A GOOD JOB, YOU DON'T HAVE TO HEAR ABOUT THEM HERE, BUT I DID WANNA HIGHLIGHT ALL THE WORK THAT THEY DID THIS PAST YEAR.
THEY RECEIVED AND VALIDATED NEARLY 6,000 CHANGE REQUESTS IN 2025, WHICH WAS 25% MORE WORK THAN THEY DID IN 2024, WE SAW WITH THE ONSET OF RTC.
IN PREPARING FOR THAT, THERE WERE ADDITIONAL MODELS AS WE TRANSITIONED INTO BATTERIES BEING OPERATED AS A SINGLE MODEL.
SO THEY HAD 23 ADDITIONAL MODELS THAT THEY HAD TO CREATE ON TOP OF THE RD PLAN WORK.
NOW THE GOOD NEWS IS WE MOVE, UH, INTO RTC, WE SEE A LOT OF BENEFITS, UM, BE DECREASING THE MODEL FILE SIZE, FOR EXAMPLE, UM, LESS TELEMETRY POINTS GOING FORWARD.
SO JUST WANTED TO GIVE A KIND OF HIGHLIGHT OF SOME OF THE WORK THAT THEY'RE DOING.
ALL RIGHT, LAST BUT NOT LEAST, RESOURCE ACCURACY REPORTING.
AND THE DECEMBER 20, 25 CDR CAME OUT AFTER THE DECEMBER BOARD.
SO I JUST WANTED TO HIGHLIGHT WHAT WE CONTINUE TO SEE THE OVERALL THEME.
UH, DEPENDING ON ASSUMPTIONS YOU MAKE ABOUT HOW THE LARGE LOADS WILL OPERATE, YOU CONTINUE TO SEE THAT WITH A LACK OF ADDITIONAL GENERATION BEING ADDED, WE WILL CONTINUE TO SEE PROJECTIONS OF A DECLINING RESERVE MARGIN OVER TIME.
WE ALSO, UM, HAVE HAD NOW FEBRUARY, MARCH AND APRIL, THE MONTHLY OUTLOOK ON RESOURCE ADEQUACY.
WE CONTINUE TO SEE A TREND WITH THE ADDITIONAL RESOURCES THAT ARE ADDED, A DECREASED PROBABILITY OF GOING INTO EMERGENCY EVENTS.
UM, HERE ON THIS TABLE, WE CAN'T, IT'S HARD TO SEE THE, THE NUMBERS, BUT THOSE ARE PROBABILITIES OF LESS THAN 2% OF GOING INTO AN EMERGENCY IN MARCH, WHEREAS COMPARED TO THE YEAR PRIOR, UH, THEY WERE MUCH HIGHER.
BUT BECAUSE WE'VE SEEN ADDITIONAL GENERATION COMING TO THE SYSTEM, THOSE PROBABILITIES OF RISK CONTINUE TO DECREASE.
WE'RE ALSO WORKING A A LOT THIS YEAR ON THE RELIABILITY
[00:50:02]
STANDARD, DOING A RELIABILITY ASSESSMENT.WE FILED A VERY COMPREHENSIVE LIST OF ASSUMPTIONS THAT WE'RE PROPOSING TO USE IN OUR MODELS AND HOW WE LOOK AT WHAT THE RELIABILITY STANDARD WHERE WE STAND TODAY IS COMPARED TO THE STANDARD.
THE COMMISSION IS SET THAT IS OUT FOR COMMENT.
AND THEN WE AS WELL AS COMMISSION STAFF WILL TAKE CONSIDERATION, UH, OF THAT FEEDBACK FOR THE COMMISSION CONSIDERATION LATER THIS SPRING OF WHAT THE FINAL ASSUMPTION SHOULD BE INTO OUR MODEL RUNS.
MOST OF THE SUMMER WE'LL BE WORKING THROUGH, UM, PRODUCING THOSE RESULTS AND WORKING WITH KEITH'S TEAM ON RECOMMENDATIONS FOR SHOULD WE BE BELOW THE RELIABILITY STANDARD, WHAT MARKET CHANGES COULD BE MADE TO DRIVE INCENTIVES FOR MORE, UH, GENERATION OR DEMAND RESPONSE.
SO THAT'LL BE A LOT OF THE WORK, UM, THAT THE, THE RESOURCE ADEQUACY TEAM WILL BE DOING THIS YEAR.
WITH THAT, LET JUST PAUSE TO SEE IF THERE'S ANY QUESTIONS.
I HAVE A COUPLE OF QUESTIONS FOR YOU, CHRISTIE.
UM, BACK TO THE TRANSMISSION DISCUSSION WE HAD EARLIER, UH, DO WE HAVE ANY FEEL FOR HOW ERCOT COMPARES TO OTHER ISOS AND TWO REGARDS? ONE IS TRANSMISSION COST OF SERVICE, AND THEN ALSO THE NUMBER OF APPROVED PROJECTS OR THE MILES OF APPROVED PROJECTS.
DO WE HAVE, DID WE TRACK THAT VERSUS THE OTHER ISOS? I DON'T HAVE THAT WITH ME, BUT WE CAN LOOK TO SEE WHAT WE CAN FIND.
WHAT I CAN TELL YOU IS A STAT THAT WE, WE USE A LOT IS, IS TIME TO BUILD.
AND SO IN ERCOT, THREE TO FIVE YEARS FROM, YOU KNOW, PLANNING TO SIDING TO CONSTRUCTION TO BE IN SERVICE COMPARED TO OTHER REGIONS, WHICH ARE MORE LIKE SIX TO 13 YEARS BECAUSE OF THE MULTIPLE JURISDICTIONS TO DEAL WITH SIDING ISSUES.
BUT WE'LL TAKE A LOOK AND SEE IF WE CAN INCLUDE THAT IN THE NEXT REPORT FOR YOU.
IT, IT JUST, UH, PARTICULARLY ON THE TRANSMISSION COST SERVICE, THERE'S A LOT OF CONVERSATION TODAY ABOUT, UH, THE TRANSMISSION DISTRIBUTION COMPONENT OF TOTAL DELIVERED COST TO THE CONSUMER ABOUT HOW THAT'S INCREASING ACCORDING TO THIS CHART IN TEXAS IT'S NOT AND THAT'S GOOD.
SO IT'S JUST, IT'D BE INTERESTING TO WHAT THE COMPARISONS ARE, RIGHT? I THINK IT'S IMPORTANT FOR THE PUBLIC TO REMEMBER.
UM, YES, WE RECOGNIZE, UM, THAT WHEN YOU SEE THESE PRICES, IT, THERE IS A STICKER SHOCK, BUT WE ARE ADDING THIS TRANSMISSION FOR NEED FOR NEW CONSUMERS, WHICH MEANS THAT DENOMINATOR IS ALSO GROWING.
AND THAT'S WHY YOU'RE SEEING THIS DECLINE IN THIS BOTTOM GRAPH.
SEE THAT'S SOMETHING I THINK THE PUBLIC NEEDS TO KNOW IN TERMS OF DELIBERATE COST TO YOUR TYPICAL RETAIL CONSUMER.
THEY'RE NOT GETTING IMPACTED BY THIS, NEGATIVELY IMPACTED BY THIS.
ANY QUESTIONS, COMMENTS? THANK YOU, CHRISTIE.
I THINK THE QUESTION IS, OH, I'M SORRY JULIE.
UH, THANK YOU FOR THE PRESENTATION, CHRISTIE.
LOOKING AT THE, UH, ROADMAP FOR THE RELIABILITY ASSESSMENT, WHICH WE'RE ALL KEENLY INTERESTED IN, UH, IT'S SOMEWHAT DEPENDENT ON A FORECAST OF THE LARGE LOADS COMING ONLINE.
COULD WE EXPECT SCENARIO BASED ROADMAP JUST LIKE WE HAD A SCENARIO BASED CDR? SO I THINK WHAT YOU'LL SEE IS WE'VE GOT ASSUMPTIONS WITH THE, THE PUC RIGHT NOW.
SO THERE, THERE ARE REALLY TWO WAYS THAT WE CAN PROCEED AND WE COULD KICK OFF GROUND RUNNING AS SOON AS THEY MAKE APPROVAL, UM, OF THE ASSUMPTIONS USING THE LOAD FORECAST THAT WE HAD FROM LAST YEAR BECAUSE IT'S LOOKING AT YEARS 2026 IN 2029.
BUT WHAT WE'VE RECOMMENDED IS THAT WE WAIT UNTIL WE GET THE UPDATED LARGE LOAD FORECAST.
SO THE COMMISSION JUST APPROVED THEIR, THEIR LOAD FORECAST RULE.
THEY ALSO APPROVED A COMPLIANCE PLAN FOR US TO FOLLOW BECAUSE, UM, WE NEED THAT INFORMATION BY APRIL 1ST.
AND SO IT SETS THE BOUNDARIES, WHICH ARE MUCH LIKE THE RULE OF WHAT THE UTILITIES WILL USE FOR THE FORECAST THEY PROVIDE US.
IT'LL BE A COUPLE OF EXTRA WEEKS LIKELY TO OUR RELIABILITY ASSESSMENT PROCESS, BUT THIS WAY WE'LL HAVE THE MOST UP-TO-DATE INFORMATION ABOUT THE LOAD FORECAST THAT ARE ALSO BOUND BY THE COMMISSION RULE.
ALRIGHT, ANY OTHER QUESTIONS? ALRIGHT, THANK YOU CHRISTIE.
[9.2 Interconnection and Grid Analysis Update]
TO AGENDA ITEM 9.2, THE INTERCONNECTION AND GRID ANALYSIS UPDATE, UH, PRESENTED BY JEFF BILLOW.JEFF, WELCOME BACK TO THE PODIUM.
I'M GONNA HIGHLIGHT SOME KEY ACTIVITIES GOING ON IN THE INTERCONNECTION AND GRID ANALYSIS UPDATE.
I'M GONNA START WITH NORE 2 45, WHICH HAS BEEN A PRIORITY, UH, ISSUE FOR ERCOT.
UH, AND, UM, IF YOU'LL RECALL THE, UH, ORIGINALLY WHEN NOIR 2 45 WAS, UM, PASSED AND IMPLEMENTED, IT HAD
[00:55:01]
AN APRIL OF LAST YEAR DEADLINE FOR THE, UH, RESOURCE ENTITIES THAT WANT TO REQUEST, UH, EXTENSIONS ON MEETING THE REQUIREMENTS IN 2 45 OR EXEMPTIONS SO THAT THEY CAN TELL US THAT THEY, UH, THAT THEIR EQUIPMENT, UH, CAN'T, UH, POSSIBLY MEET THE STANDARD.UH, AND THEN, AND THEN WE WOULD REVIEW THOSE AND, UM, YOU KNOW, MAKE A DETERMINATION ON THAT, UH, THAT THAT DEADLINE WAS EXTENDED TO SEPTEMBER 15TH AFTER SOME FEEDBACK FROM STAKEHOLDERS THAT, THAT THEY WERE HAVING, UH, SOME ISSUES WITH THAT ORIGINAL DATE.
UH, AND, AND SO WE'VE GOTTEN A NUMBER OF THESE, UH, REQUESTS IN.
NOW ERCOT IS IN THE PROCESS OF REVIEWING THOSE.
SO WE REVIEW TO MAKE SURE THAT, UH, YOU KNOW, THAT THE EXTENSIONS AND THE EXEMPTIONS THAT THEY'RE REQUESTING THAT, THAT THEY ARE REASONABLE.
UM, AND, UH, WE, WE ARE STILL SEEING SOME ISSUES WITH THE SUBMISSIONS THAT THEY ARE GIVING US.
UM, PRIMARILY I THINK THAT THE BIGGEST ISSUE RIGHT NOW IS GETTING THE DYNAMIC LOAD MODEL.
SO THESE ARE THE, THE MODELS THAT, UH, OUR ENGINEERS USE TO BE ABLE TO, UH, ASSESS WHAT IS, UM, THE RELIABILITY IMPACT.
UH, AND, AND SO WE'RE, WE'RE STILL WORKING THROUGH THAT WITH THE, UM, THE, THE RESOURCE ENTITIES.
UM, HOWEVER, WE, WE DO HAVE A PLAN, UH, TO, UH, MOVE FORWARD BECAUSE AT, AT SOME POINT WE ARE GOING TO HAVE TO PERFORM A, UH, WHAT'S CALLED THE RELIABILITY ASSESSMENT IN, IN THE, UH, IN THE RULE, UH, WHICH IS ESSENTIALLY IT IS, UH, OKAY, THESE ENTITIES HAVE ASKED FOR THESE EXEMPTIONS.
UH, WE NEED TO, UH, BE ABLE TO SIMULATE THAT AND BE ABLE TO TELL IF THAT IS GOING TO CAUSE, UH, A RELIABILITY ISSUE ON THE SYSTEM IF CERTAIN OF THESE, UH, IBR CAN'T MEET THE, UH, THE STANDARD IN NOGO 2 45.
UH, SO OUR, OUR PLAN RIGHT NOW IS IN THE SECOND QUARTER OF THIS YEAR IS TO INITIATE THAT, UH, THAT, UH, ASSESSMENT, UH, WITH WHATEVER INFORMATION WE HAVE AT THE TIME.
UH, AND IF RESOURCE ENTITIES ARE NOT, UH, HAVE NOT PROVIDED US WITH THAT INFORMATION, UH, THEN OUR PLAN IS, UM, AS, AS APPROPRIATE WE WILL EITHER, UM, REJECT THE, UH, THE, THE REQUEST OR IF WE NEED TO, THEN WE WILL TURN THAT OVER TO THE, UH, ERM.
UH, AND, AND I I SHOULD NOTE THAT, UH, WE, I, I'VE GOT A LIST ON HERE AS A A FIRST OF OF MAY START, UH, THAT, THAT, THAT'S PROBABLY THE STRETCH GOAL.
UH, IT JUST DEPENDS ON HOW LONG IT TAKES US TO, TO WORK THROUGH THAT, UH, WORK THROUGH THE, UH, THE REVIEW, UM, ON OUR END.
JEFF, SO WHAT, WHAT, ASSUMING WE GOT YOU INTO, YOU TURN SOMETHING OVER TO ERN, WHAT IS THE TIMELINE THAT WE WOULD EXPECT ACTION AND WHAT'S THE PROCESS? YEAH, I, I ACTUALLY, I DON'T KNOW WHAT OUR TYPICAL TIMELINE IS.
MAYBE JACK CAN, I CAN PHONE A FRIEND AGAIN.
SO THE ERM IS THE RELIABILITY MONITOR THAT WORKS WITH THE PUCS DIVISION OF ENFORCEMENT.
AND SO THERE'S SEPARATE PROCESSES UNDER THAT PURVIEW.
UM, YOU KNOW, THERE'S NOT SPECIFIC TIMES, BUT THEY HAVE AN INVESTIGATION PROCESS.
THEY PRIORITIZE THE ISSUES ALONG WITH, YOU KNOW, A HUNDRED OTHER, UH, CASES THAT HAVE BEEN OPEN, COORDINATE WITH, UH, THE ENFORCEMENT STAFF TO DETERMINE, YOU KNOW, THE CRITICALITY HIGH PRIORITY, MEDIUM PRIORITY.
SO I CAN'T SPEAK TO HOW THIS WILL BE MANAGED UNTIL IT GETS REFERRED OVER TO THAT GROUP AND, AND GETS INTO THOSE PROCESSES.
BUT ULTIMATELY IT'LL BE UP TO LIKE EVERY TYPE OF ENFORCEMENT ACTION.
IT'S UP TO ENFORCEMENT STAFF UNDER THE PEC TO DECIDE ULTIMATELY WHEN THEY BRING A CASE IN FRONT OF THE COMMISSION.
I THINK THE MAIN THING WE'RE, WE'RE, WHAT JEFF IS SAYING IS WE FEEL LIKE WE'VE WORKED, UH, DILIGENTLY WITH THE MARKET PARTICIPANTS FOR A LONG PERIOD OF TIME, THAT THE, THE SHIP MUST LEAVE NOW TO DO THE RELIABILITY ASSESSMENTS FOR THE REMAINING GROUP OF ENTITIES THAT HAVE SOUGHT EXEMPTIONS.
WE WILL CONTINUE TO WORK WITH THE IVR RESOURCES, EVEN IF WE HAVE TO REFER THEM OVER TO THE RELIABILITY MONITOR, BUT WE HAVE TO MOVE THIS PROCESS DOWN THE ROAD.
SO CHAD, TO THAT REGARD, DO WE THEN JUST ASSUME THAT ALL OF THE RESOURCES THAT HAVE NOT FILED ARE NOT COMPLIANT, WILL NOT BE ABLE TO RIDE THROUGH AND IN OUR MODELING, WE, WE BASICALLY MODEL THEM AS NOT RIDE THROUGH RESOURCES.
IS THAT WHAT WE DID? WE WILL, UH, AND LET JEFF SPEAK MORE TO THIS, BUT WE HAVE MODELS NOW.
THEY JUST MAY NOT BE THE MOST ACCURATE MODELS.
SO WE WILL USE THE CURRENT SET OF INFORMATION WE HAVE THAT'LL FEED INTO THOSE RELIABILITY ASSESSMENTS.
BUT WHAT DO WE ASSUME ABOUT THOSE SPECIFIC PEOPLE WHO HAVEN'T? THAT'S SOME OF THE SENSITIVITIES.
I THINK WE'LL HAVE TO WORK OUT WITH OUR CONSULTANT BECAUSE THOSE MAY BE FALSE POSITIVE MODELS RIGHT NOW AND WHAT WE HAVE.
BUT IF WE DON'T GET, I THINK JUST TO VALIDATE, IF WE DON'T GET THE
[01:00:01]
SUBMISSION DATA THAT ALLOWS US TO ANALYZE AND APPROVE AN EXEMPTION OR, OR AN EXTENSION, THEY WOULD BE DENIED ANY EXEMPTION OR EXTENSION FROM COMPLIANCE.SO THEN THEY WOULD BE HELD TO THE COMPLIANCE REQUIREMENT FOR THE VINTAGE OF THAT RESOURCE.
AND THEN IF THEY DON'T PERFORM, THEY'D BE SUBJECT TO ENFORCEMENT.
BUT HOW DO WE THEN MODEL THEM? YEAH, SO, SO THE, THE, THE MODELING IS FOR THOSE WHO HAVE REQUESTED AN EXEMPTION AND HAVE SUCCESSFULLY, YOU KNOW, THEY, THEY, THEY'VE PROVIDED, PROVIDED US WITH A SUFFICIENT MODEL FOR THAT.
SO, SO IF, IF THEY ARE, UH, NOT ABLE TO PROVIDE THAT, THEN THEY, THEY DON'T EVEN GO INTO THAT, UH, ASSESSMENT.
THEY, THEY JUST GO INTO THE, UM, I, I DIDN'T BE ASKING THE WRONG QUESTION 'CAUSE I I I ASSUMED THAT YOU WERE TALKING ABOUT THE RESOURCE ADEQUACY MODELING THAT WE WERE DOING.
IS THIS A DIFFERENT MODELING PROCESS? YEAH, I, I, YEAH, I APOLOGIZE.
THIS IS, YEAH, THIS IS DIFFERENT FROM THE RESOURCE ADEQUACY THAT THIS IS MORE ABOUT A, UM, UH, IT IT MORE ABOUT A TRANSMISSION VOLTAGE RIDE THROUGH TYPE TYPE OF EVENT.
SO IT'S, I I, I HAVE A FAULT ON THE SYSTEM AND I NEED TO KNOW IF I'M GOING TO LOSE THE GENERATION IN THAT AREA BECAUSE THEY'RE GONNA TRIP OFF OR ARE THEY GONNA BE ABLE TO RIDE THROUGH THAT FAULT.
UH, SO THAT, THAT'S THE TYPE OF ANALYSIS THAT, THAT WE'LL BE DOING.
ANY OTHER QUESTIONS FOR JEFF? OKAY, THANK YOU.
YEAH, BILL, SORRY, I, I'VE GOT A COUPLE MORE SLIDES IF, OH, I'M SORRY.
UH, SO, UM, JUST A REAL QUICK UPDATE ON THE LARGELY INTER CONNECTION REQUEST.
UH, I, I HAVE A LONGER PRESENTATION TOMORROW ON, UH, SOME PROPOSED IMPROVEMENTS, SOME, SOME REVISIONS THAT WE'RE GONNA MAKE TO THE LARGE LOAD INTERCONNECTION PROCESS.
UH, HERE I'LL, I'LL JUST HIGHLIGHT THAT, UH, THE, UH, NUMBER OF LOADS, THE MEGAWATTS THAT, THAT ARE REQUESTING TO INTERCONNECT, UH, CONTINUES TO INCREASE.
UH, IT'S, IT'S A SLIGHT UPTICK FROM WHAT WE PRESENTED IN DECEMBER.
UH, I'LL ALSO POINT OUT THAT IT IS MOSTLY DATA CENTERS.
IT, IT'S NOT ALL DATA CENTERS, BUT IT'S, IT'S MOSTLY DATA CENTERS.
AND THEN ON THE GENERATION INTERCONNECTION ACTIVITY, UH, I THINK THIS IS A, A REALLY IN INTERESTING GRAPHIC, JUST SHOWS THE LATEST TREND, WHAT, WHAT HAVE WE SEEN IN THE LAST 60 DAYS? AND, UH, IT'S PRIMARILY BEEN BATTERY ENERGY STORAGE PROJECTS THAT HAVE BEEN REQUESTING, UH, INTERCONNECTION.
WE ALSO SEE, UM, YOU KNOW, QUITE A FEW SOLAR STILL COMING IN AND, AND, UH, A HANDFUL OF OTHER TECHNOLOGIES.
AND THEN LA LAST THING I HAVE IS ON THE, UH, THE TEF GENERATORS THAT THOSE ARE, UH, CONTINUING TO PROGRESS THROUGH THE PROCESS.
THEY'RE, THEY'RE ALL IN AT LEAST FULL INTERCONNECTION STUDY, UH, THAT, THAT, UH, STATUS.
UM, AND SOME OF THEM, WE ACTUALLY HAVE TWO PROJECTS NOW THAT HAVE, UH, ACHIEVED APPROVAL TO ENERGIZE.
JEFF, I GOT A QUESTION BACK ON YOUR TREND CHART SHOWN THE LOAD DRAMATICALLY UP INTO THE RIGHT ON LARGE LOAD INTERCONNECTION REQUESTS.
THE NEXT TIME WE SEE THE SLIDE, COULD WE ALSO SEE THE CDR LINES SHOWING GENERATION TREND DURING THAT TIME SO WE CAN SEE THE RESOURCE ADEQUACY GAP WE HAVE YET TO SOLVE? YES.
YEAH, THAT WOULD BE MOST, MOST HELPFUL BECAUSE THAT WOULD BRING MORE OF A SENSE OF URGENCY.
ANY QUESTIONS? OKAY, JEFF, ANYTHING ELSE? THAT'S IT.
[9.3 System Operations Update]
9.3 SYSTEM OPERATIONS UPDATE.UH, DAN WOODFIN IS GONNA WALK US THROUGH THIS ALL GOOD AFTERNOON.
THE BULK OF THIS REPORT TODAY IS GONNA BE ABOUT WINTER STORM FERN.
UM, SO WINTER STORM FERN OCCURRED, UH, JANUARY 23RD THROUGH 27TH, BASICALLY, AND WE HAD COLD TEMPERATURES AS CHRISTI YELLOW WE POINTED OUT THROUGHOUT THE ERCOT REGION.
TOOK A LITTLE LONGER TO GET FURTHER SOUTH INTO THE EAST, BUT IN GENERAL, IT WAS COLD ACROSS THE WHOLE STATE.
WE ALSO HAD THE ADDITION OF, UH, FREEZING PRECIPITATION ALL THE WAY FROM WEST TEXAS ALL THE WAY TO EAST TEXAS, MOSTLY THE NORTH HALF TO TWO THIRDS OF THE STATE.
THERE'S SUPPOSED TO BE TWO ROUNDS OF FROZEN PRECIPITATION ONE ROUND ON SATURDAY NIGHT, AND THERE WAS, UH, AND ANOTHER ROUND ON SUNDAY NIGHT THAT WAS ALSO, THAT OCCURRED.
BUT 'CAUSE THE TEMPERATURES WERE A LITTLE COLDER ON SUNDAY NIGHT, THAT WAS LESS, AT LEAST IN KIND OF THE CENTRAL TEXAS AREA THAT WAS LESS FREEZING RAIN AND MORE SLEET AND SNOW.
SO WE SAW, UM, LESS KIND OF IMPACTS OF THAT.
UM, GENERALLY DURING THE EVENT,
[01:05:01]
UH, WE SAW VERY FEW, SURPRISINGLY FEW TRANSMISSION OUTAGES.UH, DURING THAT, THAT PRECIPITATION, ONLY 3, 3 45 KV LINES WERE OUT AT SOME POINT DURING THE EVENT.
UH, 15, 1 38 KB LINES AND A COUPLE OF 69 KV LINES.
NOW, THERE WERE A LOT OF DISTRIBUTION OUTAGES, WHICH ARE KIND OF OUTSIDE ERCOT PURVIEW, BUT GENERALLY THE TRANSMISSION SYSTEM HELD UP REALLY WELL.
UM, DURING THE COURSE OF THE EVENT, WE SAW LOW SOLAR GENERATION ON SATURDAY 'CAUSE OF THE CLOUD COVER, LITTLE HIGHER ON SUNDAY.
AND THEN BACK ON MONDAY AND TUESDAY, WE SAW SIGNIFICANT SOLAR WIND IN GENERAL STATE WAS FAIRLY HIGH, UH, THROUGH, UM, FIRST COUPLE OF DAYS.
WE ACTUALLY DID SEE, BECAUSE OF THE FIRST ROUND OF FROZEN PRECIPITATION, WE SAW ABOUT 13 AND A HALF GIGAWATTS OF WIND TURBINES THAT ICED UP A LITTLE BIT OF SOLAR, NOT, NOT A FEW, EVEN MORE THAN THE HUNDREDS OF MEGAWATTS RANGE THAT THAT WAS, UH, UNAVAILABLE BECAUSE OF THE WEATHER.
BUT GENERALLY IT WAS, UM, UM, WE STILL HAD SOME WIND DURING THE TIME.
AND THEN YOU CAN SEE FROM THE, KIND OF THE PURPLE SQUIGGLY LINE ON THERE, THE, UH, THE PRC, THE PHYSICAL RESPONSIVE CAPABILITY, WHICH IS KIND OF OUR OPERATING RESERVES, NEVER GOT MUCH BELOW 10,000 DURING THE COURSE OF THAT, THOSE FEW DAYS.
SO WE HAD SUFFICIENT RESOURCES TO SERVE THE DEMAND, UH, THROUGH THAT TIME PERIOD.
WE ALWAYS PUT THIS GRAPH IN ON THESE KIND OF EVENTS.
UH, ONE OF THE THINGS YOU CAN SEE IS, UH, THE, THE LOAD AT THE HIGHEST TIME, WHICH WAS ON, UM, UH, MONDAY MORNING AT SEVEN 12, I THINK IT WAS, UH, THAT WAS ABOUT 76 GIGAWATTS.
IF YOU COMPARE THAT BACK TO FEBRUARY 20TH OF LAST YEAR, UH, THE LOAD WAS NEARLY 81 GIGAWATTS.
SO WE WERE LESS THAN OUR ALL TIME WINTER PEAK THAT THAT OCCURRED, UH, IN FEBRUARY OF LAST YEAR.
UM, AND YOU CAN ALSO SEE AT KIND OF THOSE POINTS IN TIME WHAT THE RELATIVE LOAD WIND SOLAR OUTPUTS AND THE AMOUNT, NUMBER OF THERMAL UNIT OUTAGES.
THE PURPLE BAR IS KIND OF A KEY THING.
WE HAD A LOT OF, UH, CAPACITY ON MORE CAPACITY AVAILABLE TO SERVE THE DEMAND THIS YEAR THAN IN MANY OF THE OTHER EVENTS.
THIS, UH, GRAPHIC KIND OF SHOWS A, UM, A VIEW OF THE, UM, DIFFERENT TYPES OF RESOURCES THAT WERE SERVING THE LOAD.
IF YOU LOOK AT KIND OF THE TOP OF THIS LINE, THE TOP OF THOSE, THOSE AREAS THAT SHOWS YOU KIND OF, WHAT WAS THE LOAD AND HOW DID IT GO UP OR DOWN DURING THE COURSE OF THE DAYS? UH, ONE OF THE, THE TIME PERIODS THAT WE WERE, UM, SPECIFICALLY CONCERNED ABOUT, UH, WAS THIS TIMEFRAME, UH, OVERNIGHT ON, UH, SUNDAY NIGHT, GOING INTO MONDAY MORNING, BECAUSE AS YOU CAN SEE THERE WE'RE EXPECTING, UM, LOW WIND, WE'RE EXPECTING A LOT OF DEMAND ON THE SYSTEM FOR MONDAY MORNING.
WE WERE WORRIED THAT THE BATTERIES WERE DISCHARGED ON SUNDAY NIGHT AND NOT BE CHARGED BACK UP BY MONDAY MORNING.
THAT ULTIMATELY DIDN'T WIND UP HAPPENING.
AND I'LL KIND OF WALK YOU THROUGH WHAT, WHAT, WHAT HAPPENED THERE.
BUT THIS IS THE KIND OF EVENT THAT WE WERE TALKING ABOUT IN THE TNS MEETING THIS MORNING WHERE WE HAVE AN EXTENDED PERIOD, UH, OF, OF LOW WIND AND, AND OBVIOUSLY NO SOLAR OVERNIGHT.
SO I WANNA HIGHLIGHT CERTAIN KEY THINGS THAT WERE KIND OF OF INTEREST IN THE COURSE OF THIS, UH, EVENT.
UH, THE 2 0 2 ORDERS A TRANSMISSION EMERGENCY HAD OCCURRED AND SOME OF THE LOAD FORECAST ISSUES AND THEN RESOURCE OUTAGES, WHICH CHRISTIE KIND OF ALREADY COVERED.
SO THE 2 0 2 DOE 2 0 2 C ORDERS, UM, WE ASK FOR, UH, ENFORCEMENT DISCRETION UNDER OUR NORMAL PROCESS WITH THE TCEQ, WHICH WAS GRANTED.
UM, THE, WE ALSO ASK FOR A 2 0 2 C ORDER FROM THE DOE FOR, UH, TO ENSURE THAT GENERATORS COULD CONTINUE, THERMAL GENERATORS BASICALLY COULD CONTINUE TO MAXIMIZE THEIR AND AVAILABILITY AND WOULDN'T HAVE TO GO OFFLINE IF THERE THEY HAD SOME KIND OF, THEY WERE BUMPING UP AGAINST ENVIRONMENTAL LIMITS OR SOMETHING LIKE THAT.
AND SO THE, THE, THOSE WERE BOTH GRANTED.
WE ALSO THIS TIME HAD A A, UH, SOMETHING THAT WAS A FIRST, UM, WHICH WAS SOME OFFERED BY DOE AND, AND WE, UH, UH, ASKED FOR IT, WHICH WAS A SEPARATE 2 0 2 C ORDER.
UH, THAT WAS FOR THE USE OF BACKUP GENERATORS AT DATA CENTERS AND OTHER SITES.
SO WE BASICALLY COULD, UNDER THIS ORDER, WOULD BE ABLE TO, UH, TELL THE DATA CENTERS AND, AND THESE OTHER FACILITIES YOU NEED TO TURN ON YOUR BACKUP GENERATION IN ORDER TO BASICALLY SERVE YOUR LOAD WITH THAT BACKUP
[01:10:01]
GENERATION AND REDUCE THE LOAD ON THE SYSTEM SO THAT WE WOULD HAVE ENOUGH GENERATION TO, TO SERVE THE REMAINING LOAD.UM, SINCE THIS WAS, THIS OCCURRED WITH ONLY A COUPLE OF DAYS NOTICE, WE CAME UP WITH A PROCESS ON THE FLY.
AND I THINK FROM WHAT I, JUST THE KIND OF SCUTTLEBUTT I'VE HEARD, WE DID A REALLY GOOD JOB OF THIS RELATIVE TO A LOT OF THE OTHER REGIONS OF THE COUNTRY TRYING TO FIGURE OUT HOW TO, TO IMPLEMENT THIS ORDER.
UM, WE'VE LEARNED FROM THAT PROCESS AND OUR INTENT IS TO CONTINUE TO WORK ON HOW CAN WE DO THIS BETTER.
WE ALREADY ARE GONNA BE DEVELOPING TOOLS AND PROCESSES AROUND SB SIX FOR HOW WOULD WE INTERRUPT DATA CENTER LOAD, UH, DURING THE, AND USE BACKUP GENERATION AND THE ONES THE USE THE GENERATORS THAT ARE CO-LOCATED WITH EXISTING, OR WE CAN USE THE GENERATORS WHERE THERE ARE NEW DATA CENTERS CO-LOCATING WITH THOSE EXISTING GENERATORS UNDER SB SIX.
AND SO WE'RE GONNA BE COMING UP WITH PROCESS AND PROCEDURES AROUND THAT.
IF THE DOE IS GONNA BE ORDERING THIS, UM, KIND OF OTHER BACKUP GENERATION TO BE USED IN THE FUTURE, WE'RE HOPING THAT WE CAN BE ABLE TO INCORPORATE THAT INTO THIS OTHER PROCESS AND USE THOSE TOOLS TO, TO BE ABLE TO DO THAT.
UH, AT LEAST ONCE THOSE TOOLS GET DEVELOPED, WHICH IS TOWARD THE END OF THIS YEAR, UH, THAT, THAT NEW ORDER, ULTIMATELY WE WOULD BE ABLE TO DO THAT UNDER AN EEA LEVEL TWO.
UH, THAT WAS HOW THE ORDER WAS WRITTEN.
WE DID NOT ENTER EEA LEVEL TWO AND THEREFORE WE DIDN'T, DID NOT ASK FOR THAT.
UM, UH, THOSE, THAT BACKUP GENERATION TO BE USED.
AND JUST A QUESTION, NONE OF THOSE, UM, BACKUP GENERATORS WOULD BE CONNECTED TO, TO THE GRID, RIGHT? CORRECT.
SO, SO THIS IS SORT OF AN INFORMAL THING WHERE 'CAUSE YOU CAN'T, YOU CAN'T SEND A SCED TO THEM AND, YOU KNOW, TELL, TURN THEM ON OR OFF.
IT'S, IT'S REALLY A MATTER OF THE LOAD WOULD HAVE TO DISCONNECT, YOU KNOW, AS IF THEY WOULD, IF THEY LOST THEIR CONNECTION TO THE GRID, THEY WOULD AUTOMATICALLY GO OVER ONTO THEIR BACKUP GENERATION AND CONTINUE TO SERVE THEIR LOAD WITH THAT.
AND SO THAT, THAT'S REALLY THE, THE PROCESS.
HOW DO YOU, HOW DO YOU END UP MONITORING THAT JUST THROUGH REMOTE TELEMETRY ANYWAY? UM, THAT'S A GOOD QUESTION.
UM, WE REALLY DON'T HAVE A PROCESS BECAUSE SOME OF THESE ARE AS SMALL AS ONE MEGAWATT.
SO THEY MAY NOT, WE MAY NOT HAVE ANY OBSERVABILITY WHATSOEVER.
SOME OF THE BIGGER ONES WE MAY HAVE OBSERVABILITY OF.
UH, AND SO IN GENERAL, IT WOULD BE THERE, WE WOULDN'T BE ABLE TO KNOW EXACTLY HOW MUCH MEGAWATT REDUCTION WE HAD.
FURTHER TO THAT QUESTION, IT SEEMED TO BE LIKE IN ERCOT, UH, LETTER TO DOE ASKING FOR THE 2 0 2 ORDER THAT IT STATED THAT THERE WERE ABOUT 10 GIGAWATTS OF BACKUP GENERATION INSIDE OF TEXAS.
DID I REMEMBER THAT CORRECTLY? YEAH.
AND, AND HOW, HOW MUCH, HOW MUCH FIDELITY IS THERE, THAT NUMBER? UM, I THINK IT'S AN ESTIMATE.
PART OF THAT WAS INFORMATION THAT WE RECEIVED FROM DOE.
AND THEN PART OF IT, I ACTUALLY HAVE A SLIDE ON LATER IN MY PRESENTATION THAT WILL HELP, HELP EXPLAIN THAT, I THINK.
UM, WE DID HAVE ONE ISSUE, UH, DURING THE, THE SATURDAY NIGHT PERIOD WHERE WE HAD A LARGE, UH, GENERATING UNIT THAT TRIPPED OFFLINE IN THE CENTRAL TEXAS AREA.
IT CAUSED OUR SOUTH TEXAS INTERCONNECTION RELIABILITY OPERATING LIMIT THAT I'VE DISCUSSED WITH YOU BEFORE TO BE BRIEFLY EXCEEDED.
UM, AND THEN OTHER TRANSMISSION LINES BETWEEN HOUSTON AND SAN ANTONIO, UH, WERE ALSO HAD POST CONTINGENCY OVERLOAD.
SO IF THERE WAS A CONTINGENCY HAD HAPPENED, THEY WOULD'VE BEEN OVERLOADED.
THERE COULD HAVE BEEN A PROBLEM THERE.
AND SO, UH, WE, BECAUSE OF THAT, THAT OUR RULES ARE, WE WOULD DECLARE A TRANSMISSION EMERGENCY AND STARTED TAKING KIND OF OTHER ACTIONS TO, TO, UH, RESOLVE THAT PROBLEM.
REALTIME CO OPTIMIZATION WAS REALLY HELPFUL IN THIS EVENT BECAUSE IT AUTOMATICALLY ADJUSTED THE, WHAT UNITS WERE CARRYING RESERVES VERSUS WHICH UNITS COULD BE USED TO SUPPLY ENERGY DURING THAT TIME SO THAT ALL THE RESOURCES THAT WERE IN THAT AREA WERE USED TO, TO BACK OFF OF THAT OVERLOAD AND USED TO BY USING THEM TO SERVE ENERGY AND MOVING RESERVES TO THE OTHER SIDE OF CONSTRAINTS.
UM, THEN WE ALSO STARTED, WE ALL WERE ALREADY RUNNING THE BROING, UH, RMR UNIT THAT HAD COME BACK JUST PRIOR TO THE STORM THROUGH, UH, WAS
[01:15:01]
ACTUALLY HAD FINISHED ALL OF THE, THE, THE MAINTENANCE THAT THEY HAD BEEN DOING ON IT TO GET IT BACK UP TO SPEED.AND SO IT WAS, IT WAS, UH, REALLY HELPFUL DURING THIS PERIOD PARTICULARLY AND IN GENERAL, EVEN OVER THE WHOLE EVENT, JUST KEEPING THAT, UH, LINE FROM OVERLOADING.
AND THEN WHEN WE DECLARED THE TRANSMISSION EMERGENCY, WE ALSO, UH, STARTED AT THE LIFECYCLE UNITS, THOSE UNITS THAT WE PROCURED A MOVE FROM HOUSTON AND USED THEM TO HELP PUSH BACK AGAINST THOSE OVERLOADS AS WELL.
AND SO IN GENERAL, IT WAS, UH, ALL OF THAT WORKED WELL AND HELPED US TO AVOID THE NEED TO DO ANYTHING EVEN MORE EXTREME LIKE SHED LOAD IN THAT AREA.
CAN YOU JUST COMMENT A BIT MORE ON BROING, DID, DID IT PERFORM WELL? DID THE UNIT PERFORM WELL? AND IT, UM, TOOK IT A COUPLE OF TIMES TO GET ONLINE, BUT IN GENERAL THEY, THEY THEN, ONCE IT CAME ON IT WORKED WELL.
YEAH, IT WORKED WELL AND STAYED ON AND MM-HMM
I THINK IT'S IMPORTANT TO EMPHASIZE HERE THAT, YOU KNOW, ABOUT $110 MILLION OF CAPITAL WAS SPENT TO SET UP THESE CONTINGENT RESOURCES AND THEY TURNED OUT TO BE, THAT TURNED OUT TO BE INSURANCE MONEY WELL SPENT.
I THINK THAT, YOU KNOW, WE, THERE WERE SOME ARMCHAIR PUNDITS THAT WERE CRITICIZING ERCOT FOR THE ACTIONS IT TOOK TO, UH, TO, UH, PUT THESE TWO CONTINGENCIES IN PLACE.
AND IT TURNED OUT THAT THAT WAS APPROPRIATE TO DO THAT BECAUSE THEY WERE USED IN THE VERY FIRST TEST AFTER THE CAPITAL WAS COMMITTED.
UM, NOW ONE OF THE OTHER ISSUES THAT I NOTED IS THAT, UM, THE DEMAND ON MONDAY MORNING ACTUALLY WOUND UP BEING ABOUT 76 GIGAWATTS, UM, LAST YEAR'S WINTER.
UM, AND, AND OUR FORECAST FOR THAT MONDAY MORNING WAS MORE LIKE APPROACHING 85 GIGAWATTS.
AND SO THERE'S BEEN LOTS OF, UH, ARMCHAIR PUNDITS,
AND, UH, ONE OF, SO WE WANTED TO KIND OF LOOK AT THIS.
THE, UM, ONE OF THE ISSUES IS IF YOU LOOK BACK AT LAST WINTER, THAT, UH, FEBRUARY PEAK THAT I TALKED ABOUT, WHERE WE HAD A 81 GIGAWATT LOAD, IT WAS ACTUALLY WARMER THAN WHAT ACTUALLY OCCURRED.
THIS, THIS, DURING THAT MONDAY MORNING PEAK THIS YEAR.
TYPICALLY YOU'D THINK IF IT'S COLDER, YOU'RE GONNA SEE HIGHER DEMANDS.
UH, WE LOOKED BACK AT LAST YEAR AND A LOT OF THE, THE, THE CRYPTOS WERE TURNED OFF DURING THAT TIMEFRAME.
SO YOU'D, IT, IT IT'S COMPLETELY REASONABLE TO BEEN FORECASTING A HIGHER DEMAND, UH, THIS YEAR THAN WHAT WE ACTUALLY SAW LAST YEAR BECAUSE OF THAT.
UM, AND SO WE'VE LOOKED AT WHY, WHY, WHAT ELSE WAS GOING ON THERE? THERE HAS TO BE SOMETHING ELSE BESIDES TEMPERATURES.
AND SO, UH, ON THE NEXT SLIDE, WE'VE, WE, WE'VE DEVELOPED THE CAPABILITY FROM, UH, WE'RE GONNA TALK ABOUT THIS AT THE INNOVATION SUMMIT OF IDENTIFYING ALL THE KIND OF SMALL LOADS ON THE SYSTEM.
WHAT KIND, UH, WHAT KIND OF LOADS ARE THOSE? ARE THEY OIL AND GAS RELATED? ARE THEY DATA CENTERS? ARE THEY VARIOUS OTHER KINDS OF, OF LOADS LIKE THAT? LARGE CLASSES? NOT SO THAT WE CAN AGGREGATE THEM UP.
SO WE USED THAT THIS TIME TO LOOK AT WHAT KIND OF, WHAT WERE THE CLASSES OF LOADS THAT WERE SIGNIFICANTLY DIFFERENT THAN WHAT WE WOULD'VE EXPECTED IN THE LOAD FORECAST.
AND SO, UM, OBVIOUSLY CRYPTO MINING WAS ONE OF THOSE.
WE WERE, WE FORECAST BASED ON ASSUMING THAT THE CRYPTO MINING IS, IS GONNA BE SERVED DURING THOSE PEAKS.
'CAUSE THAT WAS, THAT'S A POLICY DECISION TO MAKE SURE THAT WE'RE COMMITTING ENOUGH RESOURCES TO SERVE THAT DEMAND WHEN IT, WHEN IT'S AVAILABLE.
AND SO WHEN THAT, WHEN THE RESERVES ARE AVAILABLE.
AND SO WE HAD THAT, THAT IS ONE OF THE THINGS.
SO THAT KNOCKS DOWN THE FORECAST BY ABOUT 4200 4100 MEGAWATTS.
AND THEN THE OTHER THING WE NOTICED IS THAT THE OIL AND GAS, UH, CONSUMPTION IN THE AGGREGATE WAS ABOUT 4,200 LESS THAN WHAT WE WOULD EXPECTED.
SO THOSE WERE KIND OF THE TWO BIGGEST CHUNKS DIFFERENCE BETWEEN WHAT OUR FORECAST WAS AND WHAT WE ACTUALLY SAW.
THERE WAS ALSO SOME, UH, ADDITIONAL REDUCTION WE THINK DUE TO, YOU CAN SEE SOME OF THE SMALLER, UH, ISSUES THERE.
BUT THERE, WE, I THINK THERE WERE ALSO SOME, UH, REDUCTION IN THE, ESPECIALLY COMMERCIAL IN SCHOOLS, THOSE KIND OF THINGS.
WE CAN'T SPECIFICALLY IDENTIFY THOSE.
'CAUSE THERE'S, THEY'RE KIND OF VERY DISTRIBUTED.
UH, BUT BECAUSE IT WAS A MONDAY MORNING AND A LOT OF OFFICE BUILDINGS AND THOSE KIND OF THINGS, UM, WEREN'T HEATED UP.
THEY'D BEEN COLD ALL WEEKEND, THEY WEREN'T HEATED UP.
THERE WAS SOME ADDITIONAL REDUCTION DUE TO THAT.
UM, SO IN GENERAL IT'S, IT'S, THOSE ARE KIND OF THE BIG TICKET ITEMS, UH, FOR WHY THE, WE WERE FORECASTING HIGHER DEMAND.
ONE OF THE THINGS WE'RE TALKING ABOUT
[01:20:01]
WITH FOR, FOR THIS IS, UH, ESPECIALLY FROM PUBLIC CONSUMPTION, UH, TRYING TO PUT, UM, WHAT, WHAT IS, WHAT IS OUR KIND OF FORECAST THAT WE'RE PLANNING FOR? AND THEN ALSO WHAT DO WE ACTUALLY EXPECT BASED ON LIKE CRYPTO REDUCTIONS AND THOSE KIND OF THINGS.AND MAKING THAT KIND OF DELTA MORE, MORE PUBLIC SO THAT FOLKS UNDERSTAND THAT, YOU KNOW, WE'RE TRYING TO BE RELIABLE, BUT WE, THIS, YOU KNOW, WE MAY ACTUALLY HAVE LESS DEMAND THAN THAT IN THE ACTUALITY BECAUSE OF DEMAND RESPONSE.
AND THEN, UH, FINAL THING, UH, CHRISTIE ALREADY HAS TALKED ABOUT OUTAGES A LITTLE BIT, BUT THIS KIND OF SHOWS KIND OF OVER THE COURSE OF THE STORM, WHAT THE AGGREGATE LEVEL OF THERMAL UNIT OUTAGES WERE.
UM, YOU CAN SEE OBVIOUSLY THE HIGH LINE, HIGH LINE THERE IS, IS URI, UH, THE ORANGE LINE, KIND OF THAT'S MORE IN THE MIDDLE IS THE OUTAGES THAT WENT ON DURING THIS STORM.
OVER THE COURSE OF THAT PERIOD, UM, WE DID, UM, HAVE NORMAL GAS RESTRICTIONS IN NORTH TEXAS.
WE UTILIZED THE FIRM FUEL SUPPLY SERVICE TO KEEP THOSE UNITS RUNNING THAT THAT WOULD'VE BEEN IMPACTED OTHERWISE.
SO THERE'S ABOUT 300 ADDITIONAL MEGAWATTS.
SOME OTHER UNITS CONTINUED TO RUN ON FUEL OIL ON THEIR OWN.
UM, AND THEN MANY OF THE GENERATORS REPORTED THAT PIPELINES ISSUED OPERATIONAL FLOOR ORDERS OR OPERATIONAL BALANCING ORDERS.
UH, BUT THOSE, UM, REALLY, WE, WE DIDN'T SEE A LOT OF OUTAGES.
THEY, IT CREPT UP A LITTLE BIT, BUT IF YOU LOOK AT IT CLOSELY, YOU'LL SEE THAT THAT REALLY WAS AFTER THE PEAK ON MONDAY MORNING WHEN THE SUN HAD COME UP.
AND WE HAD LOTS OF SOLAR GENERATION.
AND SO IT WAS UNITS THAT KIND OF HAD CONTINUED TO OPERATE THROUGH THE, THE HEAT OR THE COOL OF THE STORM.
SO THAT, THAT'S KIND OF THE OVERVIEW OF, OF FERN.
UM, AND THEN ONE OF THE OTHER THINGS THAT WE HAD ACTUALLY ALREADY PLANNED ON POINTING THIS OUT, UH, IN THIS, THIS PRESENTATION ANYWAY, UH, THE LOAD FORECASTING TEAM HAS BEEN DOING A LOT OF WORK, UH, TRYING TO WELL LOAD AND, AND THE, THE RESOURCE FORECASTING TEAM HAVE BEEN DOING A LOT OF WORK TO, UH, DEVELOP FORECASTS FOR SOME OF THESE OTHER THINGS.
LIKE WHAT IS THE STATE OF CHARGE ON BATTERIES GONNA BE? WHEN ARE THEY GONNA BE CHARGING, WHEN ARE THEY GONNA BE DISCHARGED? UH, AND THOSE KIND OF THINGS.
WHICH, IF YOU THINK ABOUT IT, EVERYTHING KIND OF FEEDS DOWNHILL TO THAT.
IF WE DON'T HAVE AS MUCH WIND AS WE, UM, WE'RE PROJECTING THE FORECAST OF STATE OF CHARGE IS GONNA BE, UH, LOWER, UH, OR THE FORECAST IS GONNA BE OFF.
AND SO THERE'S A LOT OF THINGS THAT FIT INTO THIS.
WE'RE ACTUALLY USING, UM, UH, MACHINE LEARNING TYPE MODELS TO, UH, DEVELOP THOSE THAT FORECAST, UH, IT'S WAS DOING, IT'S DOING REALLY GOOD DURING THE SUMMER AND THE HOT PERIODS.
IT'S STILL, WE STILL NEED TO WORK ON IT A LITTLE MORE DURING THE, THE, ESPECIALLY DURING COLD WEATHER AND TRANSITION TYPE PERIODS.
BUT, BUT WE'RE, I JUST WANTED TO LET YOU KNOW THAT WE'RE WORKING ON THAT.
AND THEN THE CRYPTO FORECAST, UH, WE'RE ALSO, UH, DEVELOPING A FORECAST OF THAT TO TRY TO LOOK AT WHEN WE HAVE SCARCITY CONDITIONS AND THE CRYPTO MATTERS ARE GONNA BE TURNING OFF, HOW, UH, CAN WE FORECAST WHETHER WHEN THEY'RE GONNA TURN OFF AND ACTUALLY, LIKE I SAID, BAKE THAT INTO SOME OF OUR PUBLIC, UH, NOTIFICATIONS.
THE, UM, SO I MENTIONED THAT WE'VE DEVELOPED THIS TOOL FOR LOOKING AT DIFFERENT TYPES OF LOADS.
UM, SO THIS GRAPH SHOWS FOR CLOUD-BASED COMP, UH, DATA CENTERS, WHAT WE HAVE ACTUALLY SEEN ON THE SYSTEM AGGREGATED UP ACROSS ALL OF THOSE SITES THAT WE'VE IDENTIFIED, THIS IS EVERYTHING ABOVE ONE MEGAWATT.
SO IT'S, IT'S SIMILAR TO WHAT WAS, UM, WHAT THE, THE 2 0 2 C ORDER WAS FROM, FROM DOE, THE SAME KIND OF SET.
AND SO THAT'S APPROXIMATELY 500 DATA CENTER SITES.
UM, THOSE PARTICULAR SITES, IF YOU LOOK AT WHAT, UM, WHAT'S ALREADY ON THE GROUND, WHAT THEY'VE ACTUALLY CONSUMED, PLUS THE ONES THAT HAVE GONE THROUGH THE INTERCONNECTION PROCESS AND REQUESTED LARGER AMOUNTS.
THE, THOSE SITES WHICH HAVE NOW UH, USED A LITTLE OVER 3,600 MEGAWATTS HAVE ACTUALLY ASKED FOR UP TO NEARLY 10,000, 98 50, UH, MEGAWATTS AT THOSE SITES.
AND SO THAT'S NOT ALL 200 AND WHATEVER, UM, GIGAWATTS THAT JEFF TALKED ABOUT, THESE ARE ONES WHERE THERE'S ACTUALLY, UH, CONSUMPTION AT THE, AT, ON THE GROUND AT THIS POINT.
THOSE HAVE CONSUMED UP TO ABOUT 3,600
[01:25:01]
MEGAWATTS, BUT THAT GROWTH OVER THAT TIME PERIOD IS ABOUT 15% PER YEAR.SO, WE'LL, IT'LL LIKELY GO UP FROM THERE GIVEN ALL THE INTERCONNECTION REQUESTS.
I, I'M NOT, DID I ANSWER YOUR QUESTION? IS THIS SUPPOSED TO BE THE SLIDE THAT ANSWERS MY BACKUP GENERATION QUESTION?
SO, SO IT, IT SORT OF GETS THERE.
YEAH, THERE'S, THERE'S, THERE'S, IF THE, THE, THE 3,600 TIES TO THE SAME, SAME SET OF RESOURCES ESSENTIALLY, UM, EXCEPT THAT IT DOES NOT INCLUDE CRYPTO.
SO THE CRYPTO IS ABOUT 4,000 ON TOP OF THAT.
SO IF WE'VE HAD 3,600 PLUS 4,000, THAT'S 7,600 ROUGHLY OF, OF AMOUNT THAT, THAT, UM, 2 0 2 C ORDER WOULD'VE APPLIED TO.
AND THE THIRD BULLET SAYS THE CURRENT INSTALLED CAPACITY THESE SITES EQUALS 9.9 GIGAWATTS.
SO THAT'S CURRENT INSTALLED GENERATION CAPACITY OR CURRENT INSTALLED EXPECTED LOAD CAPACITY, LOAD CAPACITY.
SO THE, THE IMPLICATION IS THAT THERE'S 9.9 GIGAWATTS OF BACKUP GENERATION AT THOSE SITES.
IS THAT RIGHT? NO, THAT'S, THIS IS, THIS IS LOAD CONSUMPTION AT THE SITES.
SO WE DON'T, WE DON'T REALLY KNOW HOW MUCH, THAT'S WHERE I WAS GOING EARLIER.
I SAID WE REALLY DON'T KNOW WHAT THE BACKUP GENERATION CAPACITY IS AT THOSE SIDES.
NO, BUT GENERALLY SPEAKING, DATA CENTER DEVELOPERS WILL HAVE, YOU KNOW, ONE TO ONE.
YEAH, I WAS THINKING 110 TO ONE, BUT YEAH.
IT COULD BE, IT COULD BE MORE THAN ONE TO ONE, BUT AT LEAST ONE TO ONE.
'CAUSE I, THERE'S THIS GREAT BIG RESOURCE OUT THERE THAT WE'RE NOT REALLY SURE HOW BIG IT IS, BUT WHAT THIS MEANS, I MEAN, ORCO DID A GREAT JOB IN GETTING READY TO TAP IT IF IT WAS AVAILABLE.
BILL, I THINK WHAT THIS MEANS THOUGH IS THAT, OR APPROVED FOR THAT ADDITIONAL AMOUNT, BUT THEY HAVEN'T NECESSARILY POPULATED THE DATA CENTERS EITHER WITH THE GENERATION OR THE GPUS.
THAT'S THE DIFFERENCE BETWEEN THE 9.9 AND 3.6 I THINK SO, EXACTLY.
I MEAN, IF THEY HAD ALL BEEN RUNNING FLAT OUT, THEY COULD HAVE HAD 9.9 GIG WATTS OF LOAD IF, IF THEY'D ALL BEEN POPULATED THEM AND EVERYTHING.
ALL THE RACKS WERE FULL AND ALL THAT.
ANY QUESTIONS? THAT'S ALL I GOT.
ANY, ANYTHING ELSE, DAN? OKAY.
[10.1 Independent Market Monitor (IMM) Report]
ITEM 10, UH, COMMERCIAL MARKETS.THERE ARE THREE SUB ITEMS, AND THE FIRST IS AGENDA ITEM 10.1, THE INDEPENDENT MARKET, UH, MONITOR REPORT PRESENTED BY JEFF MCDONALD.
JEFF, I KNOW YOU LIKE TO MAKE, UH, GRID ECONOMICS LOOK FUN, BUT CAN YOU LIVE AT THE FUND OF 10 MINUTES? OKAY, THANKS.
I ONLY DID, ONLY DID THREE SLIDES.
THANK YOU FOR YOUR TIME THIS AFTERNOON.
UH, THERE'S JUST BASICALLY TWO TOPICS I WANTED TO TALK ABOUT.
SO WE'VE BEEN, UH, HAVING A LOOK AT RTC SINCE DECEMBER 5TH WHEN IT WENT LIVE.
UM, AND CONGRATULATIONS TO ERCOT.
I'VE BEEN THROUGH A NUMBER OF LARGE, UH, WHOLESALE MARKET SOFTWARE, UH, ROLLOVERS, AND THIS ONE WENT VERY SMOOTHLY.
SO THAT'S, UM, THAT'S SOMETHING TO BE PROUD OF FOR SURE.
UH, I WILL, I WILL FOCUS ON, I MEAN, AS YOU KNOW, THE MARKET MONITOR GENERALLY DOESN'T FOCUS ON THE STUFF.
WE LIKE TO HIGHLIGHT THE THINGS THAT, WHERE WE COULD FOCUS SOME EFFORT TO MAKE SOME IMPROVEMENTS.
SO, UM, I'LL COVER ONE MATTER THAT WE'VE, THAT WE'VE SEEN POPPING UP, UH, REPEATEDLY, WHICH IS, WHICH HAS TO DO WITH THE SHORTAGE PRICING CURVES, THE A SDC CURVES.
UH, WHAT WE'VE SEEN IS, UH, IN PERIODS WHERE ERCOT IS LONG ON NONS SPEND, SO WE'VE PROCURED MORE THAN THE AS PLAN, WE'RE STILL SEEING SHORTAGE PRICING TRIGGER INDICATING THAT WE'RE SHORT OF NONS SPIN.
AND, AND SO THIS CURVE GIVES YOU, UH, SOME IDEA OF WHY.
AND, AND THE ESSENCE OF THE PROBLEM IS THAT THE, AS SDCS ARE NOT SCALED TO MATCH THE PROCUREMENT TARGETS OR THE AS PLAN FOR THE DIFFERENT RESERVES FOR THE DIFFERENT PERIODS.
AND SO AS YOU CAN SEE, THE SHORTAGE CURVE EXTENDS AND IT WOULD PRODUCE A POSITIVE PRICE WELL BEYOND THE TARGET PROCUREMENT LEVEL.
AND SO THAT THAT PRODUCES, YOU KNOW, SOMEWHAT OF A NONSENSICAL RESULT WHERE YOU'RE GETTING SHORTAGE PRICES.
THESE PRICES ARE NOT BEING SET BY OFFERS.
THEY'RE BEING SET BY THE SHORTAGE CURVE, AND YOU'RE SIGNALING A SHORTAGE WHEN YOU'RE ACTUALLY QUITE LONG.
MY NEXT SLIDE WILL SHOW, UM, YOU KNOW, PRICES RELATIVE TO WHETHER WE'RE SHORT OR LONG.
UM, AND SO THIS IS, THIS IS, I, YOU KNOW, I THINK PROBLEMATIC.
WE'VE TALKED, UH, WITH ERCOT AND ERCOT HAS TALKED,
[01:30:01]
UH, PUBLICLY ABOUT REEVALUATING THE ASCS, THE SHORTEST PRICING CURVES.I WOULD THROW THIS INTO THE MIX, UH, OF THINGS THAT SHOULD BE CONSIDERED AS THOSE CURVES ARE RECONSIDERED.
UM, YOU KNOW, IT WAS A GROUP EFFORT TO PUT TOGETHER A SET OF CURVES THAT CONFORMED TO SOME PRINCIPLES, UH, FOR RTC GO LIVE.
AND WE EVEN ACKNOWLEDGED WHEN WE WERE DOING THAT, THAT THIS WAS THE BEST WE COULD DO IN THE TIME WE HAD.
THEY JUST NEED TO BE RECONSIDERED.
SO I WILL, I WILL PUT THAT FORWARD AS, UH, SOMETHING THAT SHOULD BE THROWN IN THE BUCKET, UH, AS THESE CURVES GET RECONSIDERED.
IN THE SHORT TERM, A FIX COULD BE TO JUST TRUNCATE THE A SDC CURVE, UM, AT THE AS PLAN.
UM, AND THAT WOULD SOLVE THE PROBLEM.
THAT DOESN'T REQUIRE AN AWFUL LOT OF REJIGGERING, BUT IT SHOULD BE THOUGHT THROUGH TO, TO ENSURE THAT THERE AREN'T UNINTENDED, UH, CONSEQUENCES OF DOING SO.
SO THIS CHART SHOWS, UH, ON, ON THE TOP PART OF IT IS THE, UH, A SDC PRICE FOR NONS SPIN ON THE BOTTOM PART, THE BLUE SERIES IS THE EXTENT TO WHICH WE'RE LONG.
DO, DO YOU SHOW SHORT AS POSITIVE OR NEGATIVE? UH, SO, UH, ANYWAY, DOWN HERE, EVERYTHING, EVERYTHING DOWN HERE IS HOW SHORT WE ARE.
AND IT'S NEGATIVE SHORT, WHICH MEANS WE'RE LONG.
AND SO AS YOU CAN SEE, WE ARE, THAT BLUE CURVE NEVER GETS UP ABOVE ZERO EXCEPT FOR IT TOUCHES IT ONCE OR TWICE.
SO WE'RE ALWAYS LONG NON SPIN, SOMETIMES TO THE ORDER OF 3000 MEGAWATTS, BUT WE'RE STILL SEEING POSITIVE NONS SPIN PRICES PRODUCED, UM, EVEN WHEN WE'RE LONG, NOT SHORT.
SO THAT PRODUCES AN EXCESS COST TO THE MARKET.
AND IT ALSO MAY PROVIDE INCENTIVES TO PARTICIPATE IN NONS SPIN.
WE'RE SEEING NONS SPIND PRICING ABOVE SPAN, UH, ECRS, UH, AND SOMETIMES RRS.
AND SO, SO THERE MIGHT BE AN INCENTIVE TO, TO PROVIDE A LOWER, A LOWER VALUED RESOURCE BECAUSE IT HAS A HIGH OR A LOWER VALUED SERVICE BECAUSE IT HAS A HIGHER PRICE.
SO, SO ANYWAY, I THINK THIS NEEDS TO BE ADDRESSED, UM, AS WE GO FORWARD AND, AND THERE'S EASY FIXES AND MORE COMPLICATED FIXES.
UH, THE LAST THING I WANTED TO DISCUSS IS SOMETHING THAT I'VE TALKED ABOUT FOR THE LAST PROBABLY SIX MONTHS.
AND, AND IT HAS TO DO WITH THE, THE ISSUE OF RA THAT ERCOT AND TEXAS IN GENERAL IS FACING AND HOW AND HOW DO WE ADDRESS OUR, YOU KNOW, ANTICIPATED RA SHORTAGES.
AND I JUST WANTED TO, I JUST WANTED TO EXPRESS A CONCERN AS I SEE MORE AND MORE SIDE PROJECTS OUT OF MARKET BEING CON CONSIDERED DISCUSSED, PASSED, IMPLEMENTED, AND, AND IT CREATES A BIT OF A PATCHWORK THAT ISN'T PART OF A SYSTEM THAT IS DESIGNED TO PRODUCE A PARTICULAR RESULT.
IT'S, IT'S A ADDRESSING SMALL PROBLEMS HERE OR THERE.
AND EACH OF THOSE OUT OF MARKET PROGRAMS WINDS UP INTERFERING WITH PRICE FORMATION AND REVENUE ADEQUACY AND ULTIMATELY RESOURCE ADEQUACY IN MARKET.
AND SO I WANTED, I JUST WANTED TO EXPRESS A CONCERN THAT I SEE MORE AND MORE OF THAT, AND IT'S A NATURAL THING TO GO THROUGH.
IT HAPPENS IN OTHER RTOS AS WELL.
EVERY PROBLEM THAT POPS UP, RATHER THAN TRY AND FIGURE OUT WHY THE MARKET ISN'T SOLVING IT AND THEN TRYING TO FIX THE MARKET IN GENERAL, YOU COME UP WITH AN OUT OF MARKET, UM, PROGRAM LIKE FFSS, YOU KNOW, ERS, THE, UM, RESIDENTIAL DEMAND RESPONSE.
AND THERE ARE SOME OTHERS TOO.
SO, SO BEFORE YOU KNOW, MORE OF THESE PROGRAMS START TO POP UP, UM, I, I WOULD LIKE TO JUST CAUTION EVERYONE THAT PICKING A LANE ENERGY ONLY CAPACITY MARKET OR LOAD OBLIGATION, AND THERE'S SOME OTHER OPTIONS TOO THAT HAVE BEEN LESS, LESS, UM, THOUGHT THROUGH.
BUT THOSE LANES HAVE PROPERTIES THAT WILL HELP PRODUCE THE DESIRED RESULT.
THESE SMALL ONE-OFF PROGRAMS MIGHT FIX A LITTLE PROBLEM, BUT THEY MAY CAUSE TALK ABOUT UNINTENDED CONSEQUENCES.
THEY MAY CAUSE ISSUES THAT IMPEDE ERCO T'S ABILITY TO ACHIEVE RESOURCE ADEQUACY.
SO, UM, THAT WAS ALL I WANTED TO SAY.
ANY QUESTIONS? BILL MARKET NEEDS TO EXPERIENCE? BILL, YOU NEED MIKE, PLEASE.
PRICE SHORTAGES IN ORDER TO PROVIDE THE INCENTIVES OF THE NEW INVESTMENT.
YEAH, I MEAN THE POLITICAL RE REALITIES OF THAT ARE REAL.
SO I MEAN, IT, IT SEEMS A LITTLE BIT, YOU KNOW, UM, HYPOTHETICAL, I GUESS, I MEAN, BECAUSE THERE ARE SIGNIFICANT IMPLICATIONS.
I MEAN, HOW DO YOU THINK ABOUT THAT? I MEAN, YOU'RE SITTING IN OUR SEAT.
HOW DO YOU THINK ABOUT THAT? I MEAN, SO I UNDERSTAND THERE'S DIFFERENT THINGS THAT WE'RE TRYING TO DO.
WE'RE TRYING TO ENSURE RESOURCE ADEQUACY, BUT AGAIN, WE DON'T HAVE THE LUXURY OF NECESSARILY KIND OF WAITING FOR THING, YOU KNOW, HAVE HAVING A,
[01:35:01]
A MARKET AND, AND THEN, YOU KNOW, LOOKING AT IT AFTER THE FACT TO PRICE THE SHORTAGES AND, AND POTENTIAL INTERRUPTION TO LOAD.I MEAN, THERE'S OTHER IMPLICATIONS ASSOCIATED WITH THAT.
AND, AND THE SHORTAGES THAT I'M TALKING ABOUT.
YOU KNOW, SO ACTUALLY FIRST, I, I DO APPRECIATE THE POLITICAL SENSITIVITIES OF HAVING SHORTAGE RELATIVE SHORTAGES EVEN BECAUSE THE PRICES GO UP.
UM, THE SHORTAGES I'M TALKING ABOUT DON'T INVOLVE LOAD SHED.
THEY, THEY'RE JUST RELATIVE SHORTAGES THAT FORCE A HIGHER PRICE.
THEY FORCE IT THROUGH THE A SDC, YOU KNOW, THE ANCILLARY SERVICE DEMAND CURVE THAT I WAS TALKING ABOUT.
AND, AND SO YOU JUST GET HIGHER PRICES.
AND IN FACT, IN A LOT OF THE MARKETS, THIS IS A FEATURE OF THE ENERGY ONLY MARKET IS YOU'RE GONNA GET THESE HIGH REVENUE SPIKES BECAUSE OF THE SHORTAGE PRICING MECHANISM.
YOU'RE GONNA GET THOSE DURING DISTINCT PERIODS DURING THE YEAR.
SO THE PRICES AREN'T ELEVATED THROUGHOUT THE YEAR.
THEY'RE ONLY ELEVATED WHEN YOUR SYSTEM GETS REALLY TIGHT AND THEN THEY START GETTING ELEVATED THAT WILL PRODUCE ENOUGH REVENUE, UM, YOU KNOW, OVER TIME.
AND IF IT'S CALIBRATED RIGHT, IT PRODUCES ENOUGH REVENUE TO AND SET NEW GENERATION.
YOU'RE NOT JUST TALKING ABOUT HIGHER PRICES THROUGHOUT THE YEAR, BUT IS THERE A MARKET RIGHT NOW? I MEAN, WITH IS GOT OUR TYPE OF RESOURCE MIX THAT'S GOT THAT.
SO, YOU KNOW, THAT'S A GOOD QUESTION, BUT MOST OF THE OTHER MARKETS HAVE ADOPTED SOME FORM OF A CAPACITY CONSTRUCT.
AND SO TEXAS IS, IS REALLY THE MARKET THAT'S OUT FRONT ON ENERGY ONLY.
AND, AND JUST TO BE, IF I COULD PUNCTUATE A LITTLE BIT, SO YOU'VE HEARD A CONE COST A NEW ENTRY.
SO, SO THE CONCEPT OF CONE IS NOT SOMETHING THAT CAN BE AVOIDED AND IT, IT, IN ORDER FOR A NEW RESOURCE TO COME IN, THE DEVELOPER HAS TO EXPECT TO GET THEIR MONEY BACK, RIGHT? ABSOLUTELY.
SO IF WE LOOK BACKWARDS TO THE RESOURCES THAT WERE BUILT FIVE YEARS AGO AND HAVE BEEN OPERATING FOR FIVE YEARS, PRESUMABLY THEY EXPECTED TO GET THEIR MONEY, THEIR INVESTMENT BACK OUT OF THE MARKET TOO.
THEY WERE EXPECTING TO GET CONE IF THEY DON'T BECAUSE POLITICS OR SIDE PROGRAMS REDUCE REVENUE IN MARKET, THEY WON'T BE DEVELOPING ANYMORE.
RIGHT? AND THEN THE ONES BUILT 15 YEARS AGO, THEY'LL WIND UP RETIRING BEFORE THEY SHOULD.
AND SO THIS CONCEPT OF THE COST OF NEW ENTRY, I I, I DON'T WANNA SAY IT TRANSCENDS POLITICAL ISSUES, BUT YOU CAN'T GET NEW RESOURCES WITHOUT COST OF NEW ENTRY AND YOU CAN'T RETAIN THE OLDER RESOURCES OR GET NEW ONES FROM THOSE GENERATOR, UH, THOSE DEVELOPERS.
SO I DON'T KNOW HOW TO SOLVE THAT PROBLEM.
I AM ABSOLUTELY NOT A POLITICIAN, BUT THIS CONCEPT OF IT HAS TO PRODUCE, THE MARKET HAS TO PRODUCE CONE OR DEVELOPERS HAVE TO GET CONE SOME OTHER WAY, IS JUST NOT A, IT'S JUST NOT AVOIDABLE.
I'M JUST CONCERNED THAT WE'VE GOTTEN TO THE POINT WITH THE, THE MIX THAT WE'VE GOT AND THE LOAD CHARACTERISTICS THAT WE'RE SEEING AND THE ABILITY TO OPERATIONALLY SERVE THAT LOAD IS BECOMING MORE AND MORE TENUOUS, ESPECIALLY LIKE AS WE COME THROUGH WINTER PEAKS AND THAT TYPE OF THING.
SO I THINK SOMETHING'S GOTTA CHANGE STRUCTURALLY FOR US TO BE ABLE TO HAVE SOME CONFIDENCE GOING FORWARD THAT WE'RE NOT KIND OF HEADED IN THE WRONG DIRECTION.
AND TO, TO BUILD ON BILL'S POINT, I MEAN, LOOK, WE ALL UNDERSTAND THE CONCEPT OF CONE AND, AND I THINK ONE OF THE THINGS THAT YOU'RE POINTING OUT IS WAYS THAT WE ARE TRYING TO DELIVER CONE TO DEVELOPERS IN THE ABSENCE OF NOT HAVING THINGS LIKE A CAPACITY MARKET, RIGHT? WE'RE CONSTRAINT, WE HAVE A POLITICAL CONSTRAINT THAT WE'RE AN ENERGY ONLY MARKET, AND THAT'S BEEN DETERMINED BY THE LEGISLATURE.
AND SO THAT'S WHAT IT, THAT'S WHAT WE ARE, RIGHT? YEAH.
AND, AND SO THAT'S A, THAT'S A, A GOOD WAY TO THINK ABOUT IT.
UM, WHEN I WAS TALKING ABOUT THE, YOU KNOW, THE DEFINED PATHS, ENERGY ONLY CAPACITY, MARKET LOAD OBLIGATION, YOU CAN, YOU CAN WORK THROUGH THOSE MODELS, LOAD LOAD OBLIGATIONS AND EASY ONE TO WORK THROUGH.
BUT THE OTHER TWO, YOU CAN WORK THROUGH THOSE MODELS AND YOU CAN SEE HOW THEY'RE DESIGNED TO PROVIDE SUFFICIENT REVENUE TO GET THE INVESTMENT YOU WANT.
WITH THE ONE-OFF PROGRAMS. IT DOESN'T APPEAR TO ME THAT THEY'RE EVALUATED FROM THE PERSPECTIVE OF WILL THEY SUPPORT GENERATION THAT ERCOT NEEDS INTO THE FUTURE, OR WILL THEY, UM, PROVIDE ENOUGH INCENTIVE FOR NEW GENERATION.
YOU KNOW, IF YOU TAKE FFSS FOR EXAMPLE, YOU KNOW THAT THAT'S A, THAT'S PLUGGING A SMALL MYOPIC GAP OF JUST THIS YEAR.
THE BUDGET IS NOT LARGE ENOUGH.
IT'S 53 54 THAT, BUT I WOULDN'T EVEN INCLUDE FFS SURE.
I'M JUST SAYING YOU NORMALLY PICK ON ECR S AS YOUR FAVORITE.
I, I WOULD PICK ON, BUT I LIKE THEM BOTH EQUALLY.
[01:40:01]
THINK PROBABLY AS A QUESTION OR COMMENT, JEFF, I APPRECIATE YOUR PERSPECTIVE.I THINK SOME MIGHT SAY THAT WE ARE SEEING THE INVESTMENT AS A RESULT OF THE MARKET PERFORMING.
WE'VE HAD THE HIGHEST AMOUNT OF GENERATION CAPACITY CONNECTED TO THE GRID IN 20 YEARS, UH, JUST LAST YEAR, 2025, OVER 16 GIGAWATTS OF NEW GENERATION CONNECTED TO THE GRID.
I THINK THE ISSUE, AND I'D LIKE TO GET YOUR PERSPECTIVE ON IT, IT'S THE RESOURCE MIX THAT'S COMING ONTO THE GRID MM-HMM
AND THE RELIABILITY SERVICE CAPABILITY THAT THAT MIX HAS.
BECAUSE AS JEFF JUST POINTED OUT IN HIS EARLIER COMMENTARY, WHAT WE'RE SEEING IN THE LAST 60 DAYS IS MARRYING WHAT WE'RE SEEING IN THE LAST 60 MONTHS ALMOST, WHICH IS A VERY HEAVY CONCENTRATION OF THE DOLLARS THAT ARE COMING INTO THE MARKET ARE INCENTIVIZING A RESOURCE MIX HEAVILY DOMINATED BY SOLAR AND, UH, ENERGY STORAGE RESOURCES.
SO I THINK THERE'S A, MAYBE A LITTLE BIT OF A DISCONNECT MAYBE IN CONNECTING YOUR POINT WHERE IF WE LET THE MARKET WORK, WE WOULD SEE THERMAL.
IT'S REALLY THE GAP THAT WE SEE IS THE LACK OF THERMAL RESOURCES BEING ADDED, BUT THE REVENUES SEEM TO BE GOING PRIMARILY TOWARDS SOLAR AND THROUGH ENERGY STORAGE RESOURCES IN TERMS OF INVESTMENT, WHICH ARE VERY HIGH.
RIGHT? SO HELP US THINK THROUGH THAT.
AND SO I APPRECIATE YOU POINTING THAT OUT.
I, I TRY TO BE TECHNOLOGY AGNOSTIC, BUT, BUT IT IS THERMAL OR DISPATCHABLE OR RESPONSIVE RESOURCES THAT ADD THE MOST VALUE, ESPECIALLY DURING THE TIMES WHERE AN ENERGY ONLY MARKET WITH A SHORTAGE MECHANISM WILL SEE HIGHER SHORTAGE PRICING.
THAT'S NOT TO SAY THAT BATTERIES WILL NOT GET ADDITIONAL REVENUE OR SOLAR WILL NOT GET ADDITIONAL REVENUE DURING THOSE PERIODS.
BUT IT'S THE DISPATCH, YOU KNOW, IN, IN ERCOT PARLANCE THE DISPATCHABLE RESOURCES THAT HAVE A CHANCE TO RAMP UP AND TAKE ADVANTAGE OF THAT MORE, THEY CAN RESPOND MORE, MAYBE NOT MORE THAN THE, THE BATTERIES ACTUALLY TO INTERESTING POINT, DURING FERN, WE SAW BATTERIES RETAIN THEIR STATE OF CHARGE AT A MUCH HIGHER RATE DURING THE, THE SHORTEST PERIODS, THE HIGHEST PRICED SHORTAGE PERIODS DURING THE DAY, AND THEY WERE RETAINING THEIR CHARGE.
UM, INTERESTINGLY, BUT, BUT, BUT IN ORDER TO GET ENOUGH REVENUE TO INCENT NEW INVESTMENT IN DISPATCHABLE RESOURCES, WE'RE TALKING ABOUT COMBINED CYCLES AND CTS PRIMARILY YOU NEED, THAT TAKES A LOT OF MONEY.
YOU NEED TO GET A LOT OF MONEY INTO THE MARKET.
IT DOESN'T HAVE TO BE EVERY MONTH, BUT IT HAS TO, IT HAS TO HAPPEN DURING THESE PERIODS WHERE, WHERE THE SYSTEM IS SUFFICIENTLY SHORT THAT WE'RE MOVING AGGRESSIVELY INTO THE SHORTEST PRICING.
IF THAT HAPPENS ENOUGH, WE WILL SEE MORE DISPATCHABLE RESOURCES.
AND I'M GLAD YOU POINTED OUT THE VOLUME OF NEW RESOURCES AND, AND ALLUDED TO HOW MUCH OF THAT IS NOT DISPATCHABLE.
THERE NEEDS TO BE MORE REVENUE IN THE MARKET IN ORDER TO SEE MORE DISPATCHABLE RESOURCES COME IN.
AND DISPATCHABILITY IS NOT UNIFORM ACROSS ALL THE DIFFERENT RESOURCES.
IT, UM, SO CONSIDERING THE ENERGY COMPONENT AS WELL, SO I MEAN, THAT'S THE OTHER PIECE THAT HAS TO BE PROPERLY REVIEWED.
AND ARE YOU DISTINGUISHING BETWEEN A CT AND A CC OR ARE YOU DISTINGUISHING BETWEEN SOLAR AND THERMAL, THERMAL AND BATTERIES OR THAT TYPE? I MEAN, BATTERIES ARE A GOOD EXAMPLE.
I MEAN, YOU'VE GOT LIMITED DURATION PERIOD WHERE YOU'VE GOT THERMAL RESOURCES YOU CAN DISPATCH RIGHT THROUGH THAT, WHERE YOU'RE, YOU, YOU GOT LIMITS.
AND WE START TO SEE THOSE LIMITS HAVE AN IMPACT AS WE'RE COMING INTO THE MORNING PEAKS IN THE WINTER.
AND IF, IF I COULD TAKE JUST A SECOND AND RELATE THAT, 'CAUSE THAT'S A, A REALLY GOOD POINT THAT NOBODY HAD TO DEAL WITH 10 YEARS AGO.
AND, AND SO, YOU KNOW, WHAT WE SAW DURING FERN, ESPECIALLY ON SUNDAY, WAS WE SAW PROLONGED HIGHER PRICES IN THE EVENING.
I MENTIONED THAT WE DID NOT SEE THE BATTERY STORAGE RESOURCES DISCHARGING LIKE WE THOUGHT THEY WOULD.
UM, IT TURNED OUT THAT THE RESERVE PRICES WERE SUFFICIENTLY HIGH THROUGHOUT THE DAY THAT IT WAS MORE ECONOMIC FOR THEM TO HOLD THEIR STATE OF CHARGE FOR RESERVES THAN TO DISCHARGE DURING THE HIGHER PRICED PERIODS.
BUT TO YOUR POINT, LET'S SAY THAT THAT WASN'T THE CASE AND THAT THE PRICES WENT UP MUCH HIGHER, UM, THEY WOULD'VE DISCHARGED AFTER AN HOUR, LET'S SAY, OR TWO HOURS AND WE'RE IN A FOUR OR SIX HOUR SHORTAGE PERIOD.
SO WHAT YOU'LL SEE IS YOU'LL SEE THE SHORTAGE PRICES GO EVEN HIGHER, AND IT'S THE THERMAL RESOURCES, THE DISPATCHABLE RESPONSIVE RESOURCES THAT WE'LL BE ABLE TO TAKE ADVANTAGE AND CAPTURE THOSE PRICES.
AND SO IT NOTHING'S PERFECT, BUT, BUT TEXAS'S SHORTAGE PRICING ENERGY ONLY MODEL IS SET UP.
IF, IF, IF WE GO THROUGH THE PROCESS OF CALIBRATE, YOU KNOW, MAKING SURE THAT IT'S CALIBRATED WELL, IT'S SET UP TO REWARD THE RESOURCES THAT PROVIDE THE MOST VALUE DURING THE MOST SHORT PERIODS.
[01:45:03]
ANY OTHER QUESTIONS FOR JEFF? OKAY.SO YEAH, THANK YOU FOR YOUR TIME.
YOU, YOU MENTIONED THERMAL RESOURCES WOULD COME ON WHEN THOSE PRICES GOT HIGHER AFTER BATTERIES, BUT THERE ARE TIMES, LIKE THE NEXT DAY ON THE 28TH, THERE WERE NO THERMAL RESOURCES LEFT.
THEY'VE ALL, THEY'RE ON UHHUH, THE BATTERIES HAVE DISCHARGED DOWN TO 10% STATE OF CHARGE.
THERE'S NOT ANOTHER THERMAL UNIT TO BRING ON.
THAT'S, I THINK, THE FUNDAMENTAL PROBLEM.
AND SO, YOU KNOW, AND I, I, I LISTENED TO DAN'S, UM, DISCUSSION PRETTY INTENTLY EARLIER.
YOU KNOW, WHAT WE SAW WERE VERY HIGH LEVELS OF RESERVES.
UM, I DIDN'T, MAYBE I SHOULD HAVE, I DIDN'T INCLUDE OUR, OUR CHART ON THAT, BUT WE SAW VERY HIGH LEVELS OF RESERVES SATURDAY AND SUNDAY, A LITTLE BIT LOWER ON MONDAY, BUT STILL VERY HIGH.
AND SO WHEN YOU SAY THERE WEREN'T ANY ADDITIONAL THERMAL RESOURCES TO BRING ON, IT LOOKED TO ME LIKE THEY WERE ALREADY THERE AND ON AND AVAILABLE TO THE MARKET, BUT THAT THE RESERVE MARGIN WAS VERY HIGH, THAT WE HAD PROBABLY FOUR OR 5,000 MEGAWATTS AT LEAST OF YEAH, I WAS PUSHING, I WAS REFERRING MORE TO WEDNESDAY.
I'M NOT, I'M LESS FAMILIAR WITH WEDNESDAY.
SO YOU'RE SAYING AFTER ALL THE COLD WAS OVER, THERE JUST WASN'T ANYTHING LEFT, RIGHT? YEAH.
IS THAT BECAUSE THERE WAS NO GAS? HOW, HOW, HOW COULD THERE HAVE NOT BEEN ANYTHING? I THINK IT WAS, UM, A COMBINATION OF LESS WIND AND THOSE, SOME OF THE OLDER UNITS HAD RUN CONTINUOUSLY FOR THREE OR FOUR DAYS AND WE'RE NOW TAKING, UH, FORCED OUTAGES.
BUT I MEAN, THAT JUST IS AN ILLUSTRATION OF HOW CLOSE TO THAT EDGE THAT WE ARE AND, UM, HOW THE MARKET ITSELF TODAY IS NOT PROVIDING INCENTIVE FOR THOSE RESOURCES THAT WILL LAST FIVE CONTINUOUS SIX CONTINUOUS DAYS.
BECAUSE THE STATE OF CHARGE OF BATTERIES WAS PRETTY LOW ON, ON WEDNESDAY MORNING BY WEDNESDAY.
AND THERE WASN'T ENOUGH WIND RESOURCES OVER THE, OVER THE COURSE OF THE NIGHT TO, UH, PROVIDE A, A GOOD STATE OF CHARGE TO START WITH.
YOU KNOW, UM, AND I WAS ACCUSED A COUPLE DAYS AGO OF ADVOCATING FOR THIS.
I, I DON'T ADVOCATE FOR THIS IN PARTICULAR, BUT I WILL MENTION IT.
YOU KNOW, IF IN IN THE TEXAS CASE THE LOAD OBLIGATION MODEL FOR ACHIEVING RESOURCE ADEQUACY IS IT, IT'S CONSIDERED NOT A MARKET, BUT IT REALLY IS BECAUSE ALL THE LOAD ENTITIES HAVE TO GO OUT AND CONTRACT.
UM, THEY CAN TRADE AMONGST EACH OTHER AND SO FORTH.
IT'S NOT A CAPACITY MARKET LIKE ANYONE THINKS OF A CAPACITY MARKET.
IT DOESN'T RELY ON HIGH SHORTAGE PRICING HAPPENING SIX OR 12 TIMES A YEAR.
I KNOW IT'S BEEN FLOATED AND DISCUSSED IN THE ERCOT SPACE OVER THE LAST 10 YEARS, BUT, BUT, BUT WHAT I HEAR FROM MY PERSPECTIVE, WHAT I HEAR IN ERCOT IS WE HAVE A PROBLEM COMING AND WE DON'T LIKE ANY OF THE SOLUTIONS IN FRONT OF US.
AND SO I DON'T KNOW WHAT TO DO ABOUT THAT.
BUT, UM, BUT CONSIDERING A LOAD OBLIGATION GETS YOU OUT OF THE, LET'S TALK ABOUT MARKET PARAMETERS AND WHETHER OR NOT IT'S TUNED TO PRODUCE THE RIGHT REVENUE TO GET US CLOSE TO WHAT WE NEED, YOU JUST PRESCRIBE WHAT THE, WHAT THE LOAD SERVING ENTITIES HAVE TO CONTRACT FOR AND SHOW.
AND THEN THEY HAVE TO GO OUT AND DO IT.
AND THAT MODEL WORKS GREAT UNTIL EVERYTHING GETS REALLY TIGHT AND THERE'S NOTHING LEFT TO GET, AND DEVELOPERS ARE CHARGING TWICE CONE, UM, FOR NEW CONTRACTS, AND THEN YOU WIND UP HAVING TO DEAL WITH THAT.
ANY OTHER COMMENTS OR QUESTIONS? THANK YOU.
OKAY, JEFF, THANK YOU VERY MUCH.
[10.2 Commercial Markets Update]
THE GEN ITEM 10.2 COMMERCIAL MARKETS, AND KEITH'S GONNA COME BACK TO THE PODIUM.JUST THE LAST FEW, UM, SLIDES FOR TODAY.
TODAY WE'RE GONNA, UH, THIS PRESENTATION WILL COVER THE, UH, COMMERCIAL OPERATIONS UPDATE.
UH, WE'LL HAVE SOME DISCUSSION ON RTC PLUS B.
UH, WE'LL TALK ABOUT THE, UH, WINTER STORM FERN AND SOME INITIATIVES WE'RE WORKING ON.
SO THE, THE FIRST STEP IS, UH, RTC PLUS B IMPLEMENTATION.
UH, I THINK WHAT'S, WHAT'S INTERESTING IS WE'RE, WE'RE STILL EVALUATING.
WE DO HAVE, UH, UH, SOME DISCUSSIONS WHERE WE'RE GONNA TALK TO THE COMMISSION, UH, ON THE 20TH.
BUT WHAT'S, WHAT'S REALLY INTERESTING IS THAT IT'S, IT'S NOT AS STRAIGHTFORWARD TO SAY, WELL, HOW DID THE PRICES MOVE? AND WHAT DOES IT LOOK LIKE? BECAUSE YOU HAVE A LOT OF MOVING FACTORS, YOU HAVE LOADS CHANGING GENERATION MIX, UH, FUEL PRICES.
[01:50:01]
THE EFFECT IS NOT ALWAYS, UH, UH, IDENTIFIABLE.BUT I THINK WE CAN, WE CAN SAY VERY DEFINITIVELY THAT YES, WE HAVE SEEN RESOURCES SHIFTING AND MOVING OBLIGATIONS AROUND FROM THE DAY AHEAD TO REAL TIME.
WE HAVE SEEN PRICING MOVE AND SETTLE ON THE ANSLEY SERVICE DEMAND CURVES AS WELL.
SO WE DEFINITELY SEE A LOT OF THAT ACTIVITY OCCURRING.
UH, ONE OF THE THINGS OF, OF PARTICULAR NOTE, HOWEVER, IS THAT ON MOST DAYS, UH, RTC UH, IS ACTUALLY NOT DOING MUCH.
IT'S ACTUALLY A VERY LIMITED AMOUNT OF BENEFITS, SOMEWHERE BETWEEN FIVE OR 10%.
AND, AND YOU SAY, WELL, WHAT'S GOING ON? WELL, ON MOST DAYS, LIKE TAKE A DAY LIKE TODAY, UH, WHERE, UH, LOADS ARE NOT VERY SIGNIFICANT, RESOURCES ARE ABUNDANT AND THE DAY AHEAD IS CO OPTIMIZED ALREADY.
THERE'S NOT MUCH SHIFT IN REAL TIME.
SO YOU, YOU DON'T HAVE A SIGNIFICANT AMOUNT OF BENEFITS, HOWEVER, WHERE WE'RE SEEING SUBSTANTIAL BENEFITS OR ON THOSE DAYS WHERE IT TENDS TO GET TIGHT.
AND THAT'S REALLY THE BEAUTY OF THE RTC IS COMING TO FRUITION DURING THOSE PERIODS.
AND WE ARE WORKING ON A, A STUDY RIGHT NOW THAT'S GOING TO ESTIMATE THOSE, THOSE BENEFITS.
AND, AND HOPEFULLY WHEN WE DO HAVE THOSE, THOSE BENEFITS, MY SENSE IS IT'S LIKELY TO FALL WITHIN THE RANGE THAT WE HAD ESTIMATED ABOUT A YEAR AGO.
WE, WE HAD ESTIMATED ABOUT TWO AND A HALF TO $6 BILLION.
MY SENSE IS IT'S PROBABLY GONNA BE SOMEWHERE IN BETWEEN, UH, IN TERMS OF THE VALUE, WHICH IS, WHICH IS INCREDIBLE, UH, AND, AND SOMETHING THAT I THINK WE, WE NEED TO RECOGNIZE A SIGNIFICANT SUCCESS.
AND WHEN YOU THINK OF WHAT, WHAT JEFF WAS PRESENTING JUST A MINUTE AGO, UM, I THINK WE LOOK AT THE NONS SPIN AND SAY THAT, WELL, WELL, FIRST OFF THIS WAS, THIS WAS NOT SOMETHING UNEXPECTED.
IT WAS EXPECTED GIVEN THE SHAPE OF THOSE ANCILLARY SERVICE DEMAND CURVE.
SO IT, IT WAS, WAS EXPECTED THAT WE WOULD SEE, UM, MOVEMENT ALONG THOSE CURVES BEYOND THE, THE, UH, THE, THE REQUIREMENT.
AND, AND TO GIVE IT SOME PERSPECTIVE IN, IN TERMS OF, WELL, WHAT'S THE, WHAT'S THE POTENTIAL COST? IT'S, IT'S, IT'S, IMAGINE I GIVE YOU $200 AND I SAY, WELL, I NEED $5 BACK.
OKAY, WELL, I THINK WE'LL, WE'LL TAKE THE $195 AND SAY WE DID REALLY WELL.
AND, AND I THINK THAT'S KIND OF A SENSE OF THE MAGNITUDE OF WHAT WE'RE SEEING HERE IN TERMS OF WHAT THE POTENTIAL BENEFITS ARE THAT WE'RE GETTING OUT OF THE RTC AND WHAT SOME OF THOSE, UM, ITEMS THAT, THAT COULD BE ENHANCED EFFICIENCIES THAT WE'RE LIKELY TO TALK ABOUT IN, IN THE COMING, COMING WEEKS HERE.
AND JUST FOR A SENSE, WE ARE, AS PART OF OUR EVALUATION IN THE COMING WEEKS HERE, UH, WE DID, I BELIEVE REBECCA TALKED ABOUT THIS A FEW MOMENTS AGO, WHERE WE DO HAVE STA NOT ONLY THE STABILIZATION OF THE RTC PLUS B, BUT WE HAVE A SERIES OF ITEMS THAT WE ARE STILL GOING TO CONSIDER AS ANALYSIS OR ENHANCEMENTS GOING FORWARD.
AND ONE OF THEM IS, WELL, THE SHAPES OF THOSE ASCS.
AND, AND THAT'S AN EXAMPLE OF, WELL, HOW MIGHT THAT SHAPE POTENTIALLY BE IMPROVED TO ENHANCE EFFICIENCY? AND, AND AGAIN, THAT'S, THAT'S IN THE QUEUE OF THINGS FOR US TO CONSIDER.
AND WE DO THINK THAT THERE'S AN OPPORTUNITY TO ENHANCE, ENHANCE THAT.
ALTHOUGH I THINK I, I, I'D SORT OF RESIST THE URGE TO TRUNCATE IT AT THE REQUIREMENT.
I WILL NOTE THAT, UM, FOR FOLKS THAT THAT FOLLOWED MISO MARKETS FOR YEARS, UH, POTOMAC WAS VERY ADAMANT THAT, UH, IN A CAPACITY MARKET SENSE, YOU NEEDED TO VALUE CAPACITY BEYOND THE REQUIREMENT.
HERE WE ARE ACTUALLY SHOWING THAT THERE'S VALUE BEYOND THAT REQUIREMENT.
AND, AND IT JUST MAY BE A QUESTION OF, WELL, HOW MUCH AND, AND WHAT VALUE SHOULD BE? AND THAT'S A FUNCTION OF THE CURVES THAT WILL BE REEVALUATED.
NOW THE OTHER, THE THE OTHER THING THAT'S NOTED ON THE CHART HERE IS, IS RE THE REAL TIME UNIT COMMITMENT THAT WE'RE SEEING, AND WE'RE SEEING THAT THAT ACTUALLY, SO OUT OF QUANTIFIABLE, QUANTIFIABLE THINGS THAT ACTUALLY DECREASED RATHER SHARPLY ONCE WE IMPLEMENTED RTC PLUS B, I KNOW THAT WAS AN AREA OF SIGNIFICANT CONCERN, IS THAT, OH, WAIT A SECOND, WE COULD SEE RUCKS, YOU KNOW, INCREASE SIGNIFICANTLY.
AND ACTUALLY WE SAW A DECLINE, UM, INTERESTINGLY ENOUGH THAT THE MAJORITY OF ALL THE RUCKS IN THE MONTH OF DECEMBER OCCURRED IN THE FIRST FOUR DAYS, AND THAT WAS BEFORE RTC PLUS B IMPLEMENTATION.
THE MAJORITY, THE LOWEST LEVEL OF RUCKS OCCURRED IN DECEMBER RELATIVE TO, I THINK IT WAS SEPTEMBER, 2024.
SO A SIGNIFICANT SHIFT IN, IN, IN THE, IN WHAT WE WERE SEEING IN R ACTIVITY.
AND WE ATTRIBUTE THAT TO A, A FEW THINGS IN WITH THE IMPLEMENTATION.
ONE, ONE OF THE REASONS FOR THE BIG RUX, UH, THE BIG VOLUME OF RUCKS WAS CONGESTION.
AND WHAT, WHAT, UH, RTCB CAN DO IS THAT IN THAT PRESENCE OF CONGESTION, IT CAN SHIFT RESOURCES AROUND AND HAVE, OH, THIS RESOURCE PROVIDING RESERVE,
[01:55:01]
WE CAN SHIFT IT TO SOMEONE ELSE AND RESOLVE A TRANSMISSION CONGE, UH, CONGESTION AND CONSTRAINT.AND SO THAT IS HELPING TO ELIMINATE THE NEED FOR THE RUCKS, ALSO THE ABILITY TO, TO DO IT FOR ENERGY PURPOSES AS WELL.
AND THEN WE ALSO SAW, UH, SOME RESOURCE PERFORMANCE INCREASES IN TERMS OF INFORMATION THAT IS PROVIDED TO RUCKS IN THE PRE RQ WORLD.
THERE WAS SOME DATA THAT WAS, UH, PERHAPS NOT AS ACCURATE AS IT COULD BE.
AFTER IMPLEMENTATION OF OF THE RTCB, WE STARTED TO SEE SIGNIFICANTLY BETTER IMPROVEMENT IN THE INFORMATION WE RECEIVED THAT FLOWED INTO THE, THE RUCK PROCESS.
SO THE COMBINATION OF THOSE THREE THINGS HELPED TO, TO SIGNIFICANTLY ALLEVIATE THOSE RUCKS.
I WILL NOTE THAT DURING FERN WE SAW RUCKS INCREASE, BUT THAT WAS NOT A FUNCTION OF RTC PLUS B.
THAT WAS A FUNCTION OF THE CONDITIONS AROUND, UH, THE WINTER STORM ALL.
SO IN ADDITION TO THE PERFORMANCE, WE ARE STILL WORKING ON STABILIZATION ACTIVITIES.
UH, FOR, FOR RTC, THERE'S A FEW KEY THINGS I JUST WANTED TO HIGHLIGHT.
THE FIRST ONE IS THERE WERE SOME, UH, PROTOCOL, UH, VIOLATION ISSUES.
UH, I'M HAPPY TO SAY WE HAVE RESOLVED IN IMPLEMENTATION.
UH, WE HAD AN IMPLEMENTATION LAST MONTH, WE RESOLVED ALL BUT ONE, AND THAT LAST ONE IS EXPECTED TO BE RESOLVED THIS MONTH, LATER THIS MONTH IN, IN THAT.
SO THAT'S A A, WE HAD IDENTIFIED THIS, UH, EARLY ON AS WE WERE APPROACHING IMPLEMENTATION, AND WE'VE, UH, WORKED TO RESOLVE THOSE FAIRLY, FAIRLY QUICKLY FROM A SENATE PRICE CORRECTIONS.
THERE WERE TWO INVESTIGATIONS.
ONE WAS A, A, A DAY AHEAD PRICE CORRECTION THAT WAS ACTUALLY NOTED EFFECTIVELY ON THAT FIRST DAY, UH, OF THE DAY AHEAD MARKET.
UH, WE HAVE PRICE VALIDATION TOOLS.
AND WHAT WAS, WHAT WAS GREAT WAS THOSE TOOLS IDENTIFIED THE ISSUE IMMEDIATELY.
SO WE WERE ABLE TO WORK WITH THE VENDOR, IDENTIFY THE ISSUE, AND CORRECT THE ISSUE BEFORE THE NEXT DAY AHEAD RAN.
AND SO THE, THE VOLUME OF PRICE CORRECTIONS AND THOSE PRICE CORRECTIONS ARE NOT BEING BROUGHT IN FRONT OF THE BOARD BECAUSE THEY WERE ACTUALLY RESOLVED IN TIME.
SO IT WAS, IT WAS SORT OF A, A GREAT, GREAT SCENARIO OF HAVING THE TOOLS IN PLACE, IDENTIFYING THE ISSUE, WORKING WITH THE VENDOR AND RESOLVING THE ISSUE EXPEDITIOUSLY.
SO IT WAS, IT WAS A, A GREAT EXAMPLE OF, OF, OF FAST ACTIONS.
AND THEN THE SECOND PRICE CORRECTION IS RELATED TO THIS SORT OF THIRD ISSUE THAT'S NOTED ON SOFTWARE ISSUES.
IT WAS AFFECTING ESSENTIALLY HOW INFORMATION WAS BEING PRESENTED INTO THE, INTO THE MARKET AND THE, THE, THE SETTLEMENTS.
AND AS A RESULT OF THAT, THERE WAS NO WAY THAT WE COULD IDENTIFY AN EFFECTIVE CORRECTION.
SO THERE WAS A FEW DAYS OF THAT FROM DECEMBER 5TH TO DECEMBER 10TH.
UH, BUT, BUT WE BELIEVE WE, WE WERE ABLE TO RESOLVE THAT PRETTY EXPEDITIOUSLY.
AND SO THE, THE ISSUE WAS, WAS FAIRLY CONTAINED.
AND THEN THE FINAL ISSUE HAD TO DO WITH OPTIMI OPTIMIZATION ITSELF, IS THERE ARE CERTAIN PARAMETERS USED IN THE OPTIMIZATION PROCESS.
AND UH, WHAT WE IDENTIFIED WAS THAT, UH, THOSE PARAMETERS, THERE'S A TRADE OFF BETWEEN HOW TIGHT THE SOLUTION IS AND THE TIME IT TAKES TO RUN THE SOLUTION.
AND WHAT WE WERE SEEING IS THAT, THAT THE, THE AMOUNT OF, UH, THE TIGHTNESS, UH, IT COULD HAVE BEEN TIGHTENED IN TERMS OF THE ACCURACY OF THE SOLUTION.
SO, UH, WITHOUT SACRIFICING TIME.
SO WHAT WE DID END UP DOING IS TIGHTENING THOSE PARAMETERS AND, UH, ULTIMATELY WE'RE GETTING MORE OPTIMAL SOLUTIONS AS A RESULT.
SO THAT IS A, UH, WHAT WE CALL A TUNING PARAMETER RATHER THAN, THAN, THAN AN ACTUAL ISSUE.
SO I'LL JUST PAUSE AND SEE IF THERE ARE ANY, UH, RTCB QUESTIONS AND, AND OUR CURRENT STATUS.
SO I COVERED A LITTLE BIT OF THIS.
THIS IS A, AN EVALUATION OF, OF, UH, THE RUCK PROCESS OVER THE ENTIRE YEAR.
AND SO THE STORY IS, IS VERY DIFFERENT FROM THE RTC STORY.
THE STORY IS THAT MORE THAN DOUBLED, UH, RUCK ACTIVITY RELATIVE TO THE LAST TWO YEARS.
A LOT OF IT WAS ATTRIBUTED TO CONGESTION AND MANAGEMENT OF CONGESTION, WHICH WAS DIFFERENT FROM THE PRIOR, PRIOR TWO YEARS, WHICH WERE MORE FOCUSED ON CAPACITY.
AND, UH, WE HAD A CHANCE TO PRESENT THESE FINDINGS THROUGHOUT THE STAKEHOLDER PROCESS TO HELP PROVIDE MORE TRANSPARENCY.
BUT I THINK THE BIG TAKEAWAY HERE IS THAT WHILE WE LOOKED AT THE ENTIRETY OF THE WHOLE YEAR, A SIGNIFICANT SHIFT OCCURRED ONCE, ONCE WE IMPLEMENTED RTC PLUS B.
SO I THINK OUR VIEW IS THAT PERHAPS 2025 IS NOT THE BEST, UH, UH, FOR THE CURRENT SITUATION.
2025 SOLUTION IS, IS A LITTLE BIT DIFFERENT GIVEN THE CHANGES THAT WE'VE SEEN.
SO I THINK IT WAS A VERY POSITIVE STORY WITH THE, UH, RTC PLUS B IMPLEMENTATION.
[02:00:01]
THE FERN, UH, UH, WINTER STORM FERN, UH, WHAT WE SAW IS, WHAT I'M SHOWING HERE IS DAY AHEAD AND REAL TIME PRICING.DURING THE EVENT WE HAVE SATURDAY, SUNDAY, AND MONDAY, UH, THE GREEN REPRESENTS THE DAY AHEAD PRICES.
THE BLUE REPRESENTS THE REAL TIME PRICES.
AND THERE WERE A COUPLE, UH, THINGS THAT YOU'LL NOTE IN TERMS OF DIFFERENCES.
AND SO WHEN YOU LOOK AT THE PRICING DURING THIS PERIOD, SORRY IF I DREW THAT.
UM, BUT WHAT YOU SEE THERE IS THAT THERE'S A, A DIFFERENCE.
AND WHAT WE SAW DURING THAT PERIOD WAS PARTICULARLY RELATED TO WIND.
UH, THERE WAS SOME EXPECTATIONS AROUND ICING OF WIND THAT DID NOT MATERIALIZE.
THE PRECIPITATION TYPE HAD SHIFTED, UH, TO BEING MORE SLEET AND SNOW RATHER THAN SORT OF FREEZING RAIN.
AND SO WE ENDED UP HAVING SUBSTANTIALLY MORE WIND AND BY SUBSTANTIAL, IT'S ABOUT DOUBLE THE WIND THAT WE ANTICIPATED.
SO THAT CONTRIBUTED TO THAT, UH, THAT DIFFERENCE THERE.
AND THEN THE SECOND ITEM IS, YOU'LL SEE THERE'S A SIGNIFICANT DIFFERENCE IN THE PRICING HERE BETWEEN THE DAY AHEAD AND THE REAL TIME.
AND, AND AGAIN, THIS GETS TO A LOT OF WHAT DAN WAS TALKING ABOUT IN HIS PRESENTATION, HIGHLIGHTING THE DIFFERENCE IN THE LOAD, UH, THE LOAD FORECAST BETWEEN DAY AHEAD AND, AND REAL TIME.
AND SO THERE WERE SEVERAL ITEMS THAT HE, HE WALKED US THROUGH THAT, THAT SHOWED WHY THAT WAS THE CASE.
AND SO I WOULD NOTE THAT THOSE HAD DEFINITELY DIFF DEFINITELY HAD A SIGNIFICANT IMPACT IN, IN WHY WE'RE SEEING VERY DIFFERENT PRICES DAY AHEAD THAN REAL TIME, UH, DURING THIS EVENT.
AND THEN WE GO AND LOOK AT THE ANSLEY SERVICE PRICING, UH, WHAT WE SEE PARTICULARLY, UH, GIVEN THE SCALE, I THINK THAT'S THE, BOTH THE DEADHEADS ON THE TOP, THE REAL TIME'S ON THE BOTTOM, AND YOU'LL SEE THAT THE SCALE IS, IS UP TO ABOUT A THOUSAND DOLLARS HERE.
AND, AND YOU'LL NOTE THAT, UM, IT, IT BECAME RATHER SIGNIFICANT DURING THAT, UH, EXPECTATIONS DURING THE RAMP DOWN PERIOD ON MONDAY WERE RATHER SIGNIFICANT.
SO REACHING UP TO A THOUSAND DOLLARS.
UH, BUT, BUT THE NICE THING IS THERE'S A TRADE OFF AND A CORRELATION AND THAT'S EXACTLY WHAT WE WERE SEEING IN TERMS OF RTC REAL-TIME CO-OP OPTIMIZATION.
AND, AND YOU'LL SEE THAT IT'S A LITTLE BIT LOWER HERE DURING THIS PERIOD, GIVEN THE FACT THAT THE ENERGY PRICES WERE LOWER.
BUT WE SAW A LOT OF THAT REAL TIME CO-OP OPTIMIZATION OCCURRING DURING THAT PERIOD AND THAT TRADE OFF, UH, AND PRICING SET ON THOSE A SDC CURVES ITSELF.
UH, SO ANY, ANY QUESTIONS ON THE FUR, WINTER STORM FERN AND, AND PRICING RESULTS? OKAY.
JUST A, A COUPLE ITEMS. UH, ACTUALLY VERY NICE THAT, UM, UH, JEFF, JEFF, UH, DID HIGHLIGHT A LITTLE BIT OF THIS IN TERMS OF, UH, THE DEMAND RESPONSE PROGRAMS THAT, THAT WE'RE WORKING ON.
UH, RESIDENTIAL DEMAND RESPONSE CONTINUES TO WORK ITS WAY THROUGH THE STAKEHOLDER PROCESS AND, UH, I THINK, UH, THERE WAS SOME RECOMMENDATIONS LATE LAST YEAR FROM THE STAKEHOLDERS.
WE'VE TAKEN THOSE RECOMMENDATIONS AND WE'VE CRAFTED, UH, SOME CHANGES TO THE, THE, UH, PROGRAM DESIGN TO HELP TAKE AN, AN ACCOUNT FOR THAT IN, IN THE IN DESIGN AND LOOKING FORWARD TO THE STAKEHOLDER FEEDBACK.
I WILL NOTE WE'RE ALSO WORKING WITH A CONSULTANT, UH, CHARLES RIVERS ASSOCIATES TO DO AN EVALUATION.
UH, IT'S SORT OF A HOLISTIC VIEW OF OUR, OUR PROGRAMS. IT'S, IT'S NOT NECESSARILY GOING IN TO SORT OF PROVE THIS PROGRAM OR THAT PROGRAM, BUT TO REALLY TAKE A LOOK AT A, AT A HIGH LEVEL, AT THE VARIOUS PROGRAMS THAT WE HAVE, HOW THEY INTERRELATE, HOW THAT MAY, HOW THAT MAY BE DIFFERENT FROM OTHER REGIONS AND, AND PROVIDE SOME FINDINGS.
WE ARE LOOKING TO HAVE THAT REPORT AVAILABLE TO US BY THE APRIL BOARD MEETING.
AND THEN FINALLY, THE, THE THIRD ITEM IS THE, UH, EMERGENCY RESPONSE SERVICE.
UH, UH, LATE, LATE LAST YEAR, I DID HAVE A SLIDE THAT SHOWED HOW, HOW, UH, ERS HAD CHANGED OVER THE LAST, UM, SEVERAL YEARS, PARTICULARLY WITH RESPECT TO, UH, CRYPTOCURRENCY PARTICIPATION AS PART OF THE ERS PROGRAM THAT IS A PART OF ACTIVE STAKEHOLDER DI DISCUSSION.
UH, AND WE WILL CONTINUE TO EVALUATE HOW, HOW THAT PROGRAM COULD EVOLVE GIVEN THE, THE CHANGING NATURE OF THE RESOURCES THAT PARTICIPATE IN THAT PROGRAM.
AND JUST ONE FINAL POINT ON THE, THE RESIDENTIAL DEMAND RESPONSE PROGRAM, RELATIVE TO SOME POINTS THAT JEFF WAS MAKING A FEW MINUTES AGO.
I KNOW, UM, JEFF SORT OF LUMPED IT INTO, WELL, HEY, THIS PROGRAM, PERHAPS, YOU KNOW, IF YOU HAD A MORE EFFICIENT ENERGY ONLY MARKET, IT WOULD BE FINE.
BUT JUST A REMINDER THAT, THAT, UH, THERE, THAT ON THE RESIDENTIAL SIDE, THERE WAS THE GRITTY, UH, THE GRITTY, UH, RETAIL ELECTRIC PROVIDER THAT ALLOWED TRANSFERRING OF THE, THE WHOLESALE COST TO THE RETAIL LEVEL, UH, THAT IS NOT ALLOWED ANYMORE.
[02:05:01]
KIND OF WHAT JEFF WAS SUGGESTING IS, IS DIFFERENT AND, AND A BIT IMPINGED BY THAT.SO I THINK THE WAY WE LOOK AT IT IS YOU HAVE TO LIVE WITHIN THOSE RULES AND STRUCTURES AND DESIGN PROGRAMS THAT CAN EFFECTUATE WHAT YOU'RE TRYING TO DO.
UM, EVEN THOUGH YOU, YOU MAY, MAY THINK, GEEZ, WOULDN'T IT BE GREAT TO SEND CONSUMERS PRICE SIGNALS THAT THEY COULD BACK OFF AT THE RESIDENTIAL LEVEL? THAT'S, THAT'S NOT POSSIBLE TO DO GIVEN, GIVEN THE GRITTY SITUATION.
SO ANY, ANY QUESTIONS ON THE DEMAND RESPONSE PROGRAMS? I'VE GOT A QUESTION.
CAN YOU EXPLAIN THAT A LITTLE MORE? WHAT, WHAT THE CHANGE WAS AFTER GRIDDY? SO, OKAY.
UM, JUST, JUST SO FOR SOME BACKGROUND, GRIDDY, UH, ESSENTIALLY WHAT THEY DID THERE WERE A RETAIL ELECTRIC PROVIDER.
AND SO THEY HAD CONSUMERS SIGNED UP AND THEIR BUSINESS MODEL WAS TO PASS ALONG THE WHOLESALE PRICE AND HAVE A SMALL FEE FOR DOING SO.
AND DURING, UH, WINTER STORM URI, THERE WERE CONSUMERS THAT STARTED TO, TO RECEIVE THESE RATHER LARGE BILLS BECAUSE THEY WERE RECEIVING THE, UM, THOSE LARGE EXCESSIVE COSTS.
ULTIMATELY, THAT MODEL WAS DISALLOWED, UH, I BELIEVE IT WAS BY THE, BY LEGISLATION SAYING THAT YOU CANNOT PERFORM THAT FUNCTION BY PASSING ALONG THE WHOLESALE PRICE TO THE RETAIL, UH, CONSUMER ANYMORE.
SO, SO AGAIN, THAT'S NOT SOMETHING THAT, THAT IS, IS A CURRENT AND PRESENT MODEL, UH, ON THE RETAIL SIDE.
YES, KEITH, APPRECIATE THE, UM, THE UPDATE AND, UH, YOU KNOW, I SPEAK WITH YOU AND PABLO OFTEN AND I'M A STRONG SUPPORTER OF DEMAND RESPONSE AND JUST HAD A FEW QUESTIONS.
UM, CAN YOU SPEAK TO WHAT'S DRIVING THE DESIGN OF, UH, A NEW RESIDENTIAL DEMAND RESPONSE PROGRAM? SO, ARE WE TRYING TO TARGET A BROADER GROUP TO HELP THE SYSTEM THE MOST? UH, IN OTHER WORDS, IS ERCOT TRYING TO DETERMINE WHO IS AND WHO IS NOT PARTICIPATING? OR IS THE WORK EFFORT MORE TO JUST BRING MORE DR INTO THE EQUATION? I, I BELIEVE IT'S THE LATTER.
WE'RE REALLY ATTEMPTING TO FIND AN OPPORTUNITY TO SAY THERE IS, THERE ARE OPPORTUNITIES.
THERE WAS A STUDY DONE BY TEXAS A AND M THAT SAID THERE WAS AN OPPORTUNITY TO CAPTURE RESOURCES, PARTICULARLY AT THE RESIDENTIAL LEVEL, THERMOSTATS, POOL PUMPS ALONG THAT NATURE THAT ARE NOT CURRENTLY BEING CAPTURED IN OTHER PROGRAMS. WE DO KNOW THAT, THAT THE RESIDENTIAL ELECTRIC PROVIDERS HAVE, HAVE MADE ATTEMPTS TO TRY TO DO THAT, BUT THEY FOUND IT REALLY HARD TO, TO MARKET, UH, THE PROGRAM AND TO KEEP CONSUMERS AS PART OF THAT, TO PROVIDE VALUE TO THEM TO, TO PARTICIPATE.
SO, SO REALLY IT'S AN OPPORTUNITY FOR US TO TAP INTO AN A RESOURCE THAT HAS OPPORTUNITY THAT ISN'T CURRENTLY BEING TAPPED INTO.
SO, YOU KNOW, I GUESS FURTHER TO, UM, IN TRYING TO IDENTIFY, UM, BECAUSE I THINK WE DO CARE ABOUT WHO IS PARTICIPATING AND WHO ISN'T.
UM, THERE WAS A NEW REQUIREMENT IN WHAT, 25 1 8 6 THAT'S REQUIRING ALL THE REPS TO PROVIDE RESIDENTIAL DR DATA TO ERCOT MM-HMM
AND, UM, OF COURSE WE'VE GOT THE CHARLES RIVER, UM, REPORT THAT'S ONGOING.
UH, DO YOU THINK THAT THERE'S GONNA BE AN OPPORTUNITY FOR THAT INFORMATION TO BE INCORPORATED IN, IN SOME WAY? I KNOW THE REPORT WON'T BE FINAL, BUT TO BE ABLE TO UTILIZE THAT IN, UH, THE FINDINGS THAT YOU'RE GONNA BRING TO THE BOARD IN APRIL? I THINK TO THE EXTENT THAT, THAT THEY'RE CAPABLE, WE HAVE PROVIDED THE, THE CONSULTANT WITH A FAIR AMOUNT OF DETAIL THAT WE HAVE AND TO THE EXTENT THAT THEY'RE GONNA USE THAT THEY, THEY ARE INTENDING TO DO THAT.
I DON'T, I DON'T KNOW THAT THEY WERE TRYING TO DO IT TO, UM, JUSTIFY A PARTICULAR PROGRAM VERSUS ANOTHER PROGRAM, BUT TO THE EXTENT THAT THEY HAVE THE DATA AND ABLE TO, TO HELP, UH, SHED SOME LIGHT, UH, WE'D, WE'D BE HAPPY TO HAVE THEM DO.
SO WE'RE JUST, THE THINKING WOULD BE THAT THAT'S SOMETHING NEW.
AND SO IF WE'RE TRYING TO PROVIDE A REP A RECOMMENDATION, IT WOULD BE GOOD TO HAVE THAT DETAIL AS PART OF THEIR RECOMMENDATION TO, TO THE EXTENT WE CAN.
AND I GUESS MY LAST QUESTION, UH, OF COURSE IT'S, IT'S ABOUT BENEFITS, BUT IT'S ALSO ABOUT COST.
AND SO, UM, SO SO WHAT'S THE BUDGET THAT WE'RE THINKING ABOUT RIGHT NOW FOR RESIDENTIAL DR IN TERMS OF THE DOLLAR AMOUNT, THE MEGAWATTS AND, UM, MAYBE THE, UH, THE, THE DURATION, THE NUMBER OF HOURS THAT IT'S GONNA IMPACT? SO THE, UM, THE PROGRAM DOESN'T HAVE A BUDGET PER SE, BUT IT'S CAPPED THE MEGAWATTS.
SO THE MEGAWATT CAPPED ESSENTIALLY CREATES A CAP ON THE NUMBER OF DOLLARS.
UM, PARTICULARLY GIVEN THE, THE, THE WAY THE PRICING MECHANISM IS SET UP, AND I BELIEVE AT, AT ITS MAXIMUM, AT A 500 MEGAWATT PROGRAM, IT'S, IT'S ROUGHLY ABOUT $52 MILLION ANNUALLY IS ABOUT WHAT IT COMES OUT TO BE AT, UH, USING THE, UM, THE CONE VALUE.
THERE'S A COUPLE DIFFERENT CONE VALUES AND SO THIS IS THE,
[02:10:01]
THERE, THERE'S LIKE A ONE 40 CONE VALUES USED IN PLANNING.AND SO THIS WOULD BE THE 1 0 5 CONE PLAN, UH, VALUE THAT IS NOT USED IN PLANNING.
AND SO, SO WHEN YOU USE THAT AND FACTOR IT IN, IT COMES INTO APPROXIMATELY $52 MILLION AT A 500 MEGAWATT CAP.
NOW WHAT'S INTERESTING IS WHEN YOU THINK ABOUT E-R-S-E-R-S, YOU MIGHT SAY, WELL, THERE'S A LOT MORE MEGAWATTS IN ERS, BUT THE CHALLENGE WE ARE HAVING WITH ERS RIGHT NOW IS A LOT OF PRICE SENSITIVE LOADS THAT ARE PARTICIPATING IN ERS.
AND WHEN YOU FACTOR THOSE OUT, UM, THE, THE, UM, THE RATIO OF COST TO THOSE RESOURCES IS ACTUALLY NOT THAT DIFFERENT FROM WHAT WE'RE PROPOSING HERE WITH THE, UH, WITH THE RESIDENTIAL DR PROGRAM.
IT'S ACTUALLY, IT'S ACTUALLY, UM, AGAIN, IT DEPENDS ON HOW MUCH OF IT IS, IS PRICE RESPONSIVE, BUT THE MAJORITY RIGHT NOW IS CRYPTOCURRENCY IN THE ERS.
SO IF YOU HAVE ABOUT A LITTLE OVER 2000 MEGAWATTS OF, OF CRYPTOCURRENCY AND THEN YOU SUBTRACT OUT ALL THAT, UM, UH, SORRY, 2000 IS WHAT ERS IS, YOU SUBTRACT OUT THE CRYPTOCURRENCY, WHICH IS ABOUT 60%, YOU, YOU END UP AT THE POINT WHERE THOSE NON CRYPTOCURRENCY NUMBERS AT THAT BUDGET IS, IS ACTUALLY A SIMILAR RATIO TO WHAT WE'RE PROPOSING HERE IN THE RESIDENTIAL DR PROGRAM.
SO AS A COST BASIS, IT'S, IT'S ONLY A SLIGHT PREMIUM, BELIEVE IT OR NOT.
I THINK THAT'S GONNA BE KIND OF A BIG QUESTION GOING, 'CAUSE PEOPLE WILL NATURALLY, I THINK ASK HOW DOES THIS COMPARE WITH SURE.
SO JUST LOOK FORWARD TO KIND OF ABSOLUTELY UNDERSTANDING THAT A LITTLE BIT MORE AS WE, AS WE MOVE FORWARD.
YEAH, JUST, JUST REAL QUICK ON THAT TOO, I THINK, YOU KNOW, LIKE YOU SAID, COULD HAVE GONE WITH DIFFERENT VALUES, THE CONE VALUE YOU WENT WITH, I THINK THAT'S PROBABLY WORTH TALKING ABOUT SOME MORE, JUST 'CAUSE I UNDERSTAND COMPARED TO MAYBE OTHERS, IT, IT, IT SEEMS EQUIVALENT IN TERMS OF COST, BUT THAT DOES SEEM LIKE A, LIKE A HIGH COST PER MEGAWATT HOUR.
SO I I THINK TALKING ABOUT THAT WOULD, WOULD BE GOOD.
YEAH, I THINK, I THINK WE CAN DEFINITELY FRAME WHAT THAT IS.
AND, AND ACTUALLY THE OTHER WAY TO THINK OF IT TOO IS IT IS A, UM, PEAKER SUBSTITUTE, RIGHT? SO IF YOU HAVE A, A GAS PEAKER PLANT, 500 MEGAWATTS AND DR 500 MEGAWATTS, WHAT'S, WHAT'S THE RELATIONSHIP? AND SO IT IS KIND OF BUILT WITH THAT CONCEPT.
BUT I THINK THE OTHER ELEMENT THAT WE, WE WANT TO BE MINDFUL OF IS THE SPEED TO MARKET, RIGHT? SO IF YOU'RE TALKING, UH, GAS PEAKER PLANT, OKAY, LET'S SAY YOU WERE ABLE TO DO THAT, YOU KNOW, FOUR TO FIVE YEARS FROM NOW IS MAYBE WHEN YOU MIGHT SEE THAT HOPEFULLY WITH THIS RESIDENTIAL DR WE'RE HOPING TO, TO START SEEING THAT THOSE, THOSE SORT OF VALUES, UM, YOU KNOW, AS SOON AS THE PROGRAM IS IMPLEMENTED.
SO IT'S, IT'S SPEED TO MARKET ELEMENT AS MUCH AS, AS A COST RELATIVE TO OTHER RESOURCES.
AND SORT OF, UH, THE FINAL SLIDE OF THIS DECK IS THE, UH, SETTLEMENT AND CREDIT.
UH, ONE OF THE THINGS TO NOTE HERE THAT, UH, WHEN WE PUT THE CHART TOGETHER, IT WAS, IT WAS ULTIMATELY BEFORE WINTER STORM FERN.
SO WE, WE HAVE IN FACT UPDATED IT.
UH, SO, UH, LEADING UP UNTIL FERN, UM, EVERYTHING WAS VERY, UH, CONSISTENT WITH WHAT WE'D SEEN IN PREVIOUS PERIODS.
I WILL NOTE THAT TWO THINGS HAPPENED.
ONE IS WE DID HAVE ONE DEFAULT OCCUR, UH, AS, UH, DURING, UH, THE LEAD UP TO THE WINTER STORM FIRM.
IT WAS GENERALLY A SMALL ENTITY.
THERE WERE NO RELIABILITY OR MARKET IMPACTS AS, AS A RESULT OF THAT, THAT DEFAULT.
UH, I ALSO WILL NOTE THAT THE TOTAL POTENTIAL EXPOSURE THAT WE CALCULATE FOR THE COLLATERAL DID INCREASE, UM, SIGNIFICANTLY AS A LEAD UP TO THE, THE JANUARY COLD SNAP.
UH, THANKFULLY THERE WERE NO EVENTS THAT WE HAD TO WORRY ABOUT, BUT I WOULD SAY THAT IT APPEARED THAT THE PROCESSES THAT WE PUT IN PLACE WERE WORKING AND WORKING WELL, UH, O OTHER ITEMS INCLUDE THE CREDIT STRESS TEST.
UH, OUR, UH, OUR CREDIT TEAM CONTINUES TO WORK THROUGH THE STAKEHOLDERS WITH, WITH THAT PROCESS AND HOPE TO DEVELOP MORE SCENARIOS, UH, AS WE, AS WE GO THROUGH THE YEAR.
AND THEN FINALLY, WE DID PASS NPR 1277 LAST YEAR AND WE ARE LOOKING FORWARD TO IMPLEMENTATION.
IT DOES SAY LATE FEBRUARY, BUT MY, THE LATEST UPDATE IS, UH, EARLY, EARLY MARCH AT THIS POINT.
SO, UH, THAT, THAT WILL BE A SIGNIFICANT SHIFT IN THE CREDIT CALCULATIONS.
AND I BELIEVE THAT TAKES ME TO THE END OF THIS PRESENTATION.
I THINK YOU'RE ON DECK FOR, UH, THE MARKET CREDIT RISK CENTER.
[10.2.1 Market Credit Risk Corporate Standard]
MARKET CREDIT RISK CORPORATE STANDARD IS SOMETHING THAT IS REVIEWED ANNUALLY.HISTORICALLY, THIS WAS VIEWED AT THE, UH, RELIABILITY AND MARKETS COMMITTEE OF THE BOARD.
UH, HOWEVER, THERE IS NO MORE RELIABILITY AND MARKETS COMMITTEE.
SO, UH, WE'RE COMING TO THE FULL BOARD
[02:15:01]
TODAY TO, TO BRING, UH, ANY ANY RECOMME RECOMMENDED CHANGES.AND SO THIS IS A VOTING, VOTING ITEM.
AND SO I WILL JUST COVER, UH, THE RECOMMENDED CHANGES WE DID MAKE IS TO ESSENTIALLY, UH, CHANGE THE REQUIREMENTS TO BRING, UH, THE CORPORATE RISK STANDARD TO THE RELIABILITY AND MARKETS COMMITTEE AND INSTEAD BRING IT TO THE FULL BOARD, UH, FOR THEIR EVALUATION.
AND SO THE CHANGES IN THE MATERIALS THAT YOU HAVE IN FRONT OF YOU DO SUGGEST, UH, AND SHOW THAT CHANGE, UH, IN THE DOCUMENT.
SO I'M HAPPY TO ANSWER ANY QUESTIONS WITH WHAT'S THAT OTHER THAN REPORTING.
IS THAT THE ONLY CHANGE? THAT IS THE ONLY CHANGE THAT WAS MADE? THE REST OF THE STANDARD STAYS THE SAME.
WITH THAT, I'LL ENTERTAIN A MOTION, UH, TO, UH, ADOPT THE NEW, UH, UH, MARKET RISK CORPORATE STANDARD.
ANY OPPOSED? ANY ABSTENTIONS? OKAY.
UH, THE DUE MARKET CREDIT RISK CORPORATE STANDARD HAS BEEN ADOPTED.
UH, WITH THAT, THE, UH, GENERAL SESSION IS NOW RECESSED AND THE WEBCAST WILL BE SUSPENDED.
WE'LL RECONVENE GENERAL SESSION TOMORROW AT 10:00 AM UH, CHAIRMAN GLEASON, THIS MEETING WITH THE PUBLIC UTILITY COMMISSION OF TEXAS IS ADJOURNED.