[00:00:02]
[5. ESR Participation]
LONGER TERM BATTERY DEVELOPMENT? UM, SO I THINK WE CAN GO ON TO THE NEXT ONE.THE TWO PROVISIONS, UH, IT HAS TO BE, YOU KNOW, UH, IT HAS TO HAVE A TWO HOUR STARTUP AND IT HAS TO BE AT HSL FOR FOUR HOURS.
UM, I GUESS I'M NOT SURE WHY, UH, OR HOW IT COULD BE INTERPRETED THAT IN TWO HOURS, UH, IT'S NOT A STARTUP REQUIREMENT, BUT IT'S ACTUALLY A REQUIREMENT TO BE AT H OR WHATEVER VALUE THAT'D BE QUALIFIED FOR DRS.
I THINK THE PLAIN READING OF THE LANGUAGE AS WELL AS INTENT, IF YOU LOOK AT IT, IT'S REALLY TO ENCOURAGE RESOURCES THAT CAN START UP WITHIN TWO HOURS, YOU KNOW, FROM GOLD START TO LSL, BUT THEN, YOU KNOW, IS ALSO ABLE TO SUSTAIN THEIR OUTPUT FOR FOUR HOURS WHEN THEY'RE HSL.
SO THOSE TWO SHOULD BE TAKEN SEPARATELY.
UM, AND ESSENTIALLY YOU WOULD NEED RESOURCES, UM, TO HAVE A, THE LONGEST STARTUP TIME BEING TWO HOURS AND BEING ABLE TO, UH, YOU KNOW, PROVIDE SUSTAINED OUTPUT AT THE HSL FOR FOUR HOURS.
SO THOSE ARE THE TWO CRITERIA.
UM, BUT WE THINK ANOTHER POINT THAT'S IMPORTANT IN THAT IS THAT, UM, THIS LEGISLATION WAS MEANT TO ENCOURAGE TWO HOURS AND SHORTER TIMEFRAME, UH, YOU KNOW, START FULL START UNITS.
SO IN THAT CASE, YOU KNOW, UM, A UNIT THAT HAS A 3, 4, 5 HOUR START, 10 HOUR START, YOU KNOW, IF YOU, IF YOU QUALIFY THEM FOR DRS, WHAT THAT WOULD MEAN IS THAT, UH, WHEN THEY'RE ONLINE, SO WHAT THAT WOULD MEAN IS THEY WOULD STAY ONLINE TO COLLECT THE DRS PAYMENT, YOU KNOW, EVEN THOUGH THEY'RE UNECONOMIC.
UM, AND IF YOU LOOK AT THE PURE ECONOMICS OF THE DISPATCH, THEY WOULD NOT OTHERWISE COMMIT.
UH, AND BECAUSE, UM, IN OUR RULES, WE, WE QUALIFY THEM BECAUSE THEY'RE ONLINE AND WE GIVE THEM THE DRS PAYMENT, THEN YOU'LL SEE THIS WHOLE DISTORTION OF THE MARKET, OF THESE UNITS RUNNING ALL THE TIME SUPPRESSING ENERGY PRICES, YOU KNOW, AND CREATING INEFFICIENCY.
UH, I DON'T THINK THAT'S THE INTENT OF THE LEGISLATION TO CREATE THAT KIND OF INEFFICIENCY AND, YOU KNOW, HAVE IT THROUGHOUT THE MARKET.
SO WE NEED TO BE, UH, WE NEED TO FOLLOW THE, WHAT THE LEGISLATORS SAID, WHICH IS, YOU KNOW, ANYTHING THAT HAS LONGER THAN TWO HOUR START, UH, SHOULD NOT BE ELIGIBLE FOR DRS.
UM, TOMS, DO YOU THINK YOU CAN COVER THE LAST ONE JUST IN ANOTHER MINUTE OR SO? OKAY, SURE.
YEAH, SO, SO THAT'S AN IMPORTANT POINT WE WANTED TO POINT OUT.
SO DEFINITELY, I MEAN, UH, BASED ON, ON THE STUDY THAT ALREADY HAS BEEN DONE BY POWER GYM, YOU KNOW, YOU SEE MOST OF THE REQUIREMENT BEING IN THE WINTER, OUR RELIABILITY, UH, YOU KNOW, NEEDS.
SO IN THE WINTER, REALLY THE WINTER STORM EVENTS ARE LONG DURATION EVENTS.
SO WE DEFINITELY THINK THAT, UH, YOU KNOW, LONGER DURATIONS, LIKE EIGHT TO 12 HOURS MAKES MORE SENSE FOR WINTER SEASON.
AND IF THERE IS ANY DRS ALLOCATED TO THE OTHER MONTHS, THEN MAYBE FOUR HOURS IS ENOUGH OR FOUR TO SIX HOURS.
BUT IN THE WINTER MONTHS ESPECIALLY, YOU NEED EIGHT TO, UH, 12 HOURS IN OUR OPINION, IF NOT LONGER, UH, TO QUALIFY FOR DRS.
THANK YOU SO MUCH FOR THE OVERVIEW.
UM, I DON'T SEE ANYBODY IN THE QUEUE AT THIS POINT, SO LET'S GO ON WITH THE EDF COMMENTS.
IS THERE ANYBODY FROM EDF? HEY, MARTHA? YES, SIR.
UM, SO I'M NOT SPEAKING ON BEHALF OF EDF, BUT I DID TOUCH BASE WITH, UH, CASEY HURAN, AND UNFORTUNATELY SHE WAS NOT ABLE TO MAKE IT, UH, FIRST THING THIS MORNING.
ARE YOU, ARE YOU GONNA WALK THROUGH THEIR COMMENTS? NO, I, I WAS NOT PREPARED TO DO THAT.
IT LOOKS LIKE ED F'S NOT AVAILABLE, SO WE'LL SKIP OVER THEM, BUT, UM, WE DO HAVE KEVIN HANSON IN THE QUEUE.
SO KEVIN, YEAH, CAN YOU HEAR ME OKAY? YEAH.
YEAH, I HAD A QUESTION FOR SHAMS, WOULD YOU, FOR THE EIGHT TO 12 HOURS, WOULD YOU HAVE TO PROVIDE PROOF TO ERCOT THAT YOU HAVE THE FIELD TO DELIVER THAT EIGHT TO 12 HOURS? UH, YES.
I THINK YOU WOULD'VE TO, UH, SHOW TO ERCOT, YOU HAVE THAT CAPABILITY, YOU HAVE THE FIELD AVAILABLE.
OKAY, WE'LL MOVE ON HERE TO, UH, TESLA.
ANITA SHARMA, ARE YOU ON? OKAY.
DON'T SEE HER ABOUT EVA COMMENTS.
[00:05:01]
SEE HER.WE'VE GOT JOINT ESR COMMENTERS, JACK CLARK, MANDY METTERS, AND TANYA WICK FROM SPEARMINT PLUS POWER VOLTA.
IS ANYONE ON TO SPEAK TO THE JOINT ESR COMMENTERS COMMENTS? IT'S GONNA GO MUCH FASTER THAN I EXPECTED.
HOW ABOUT, UH, OLIAN? HEY, MINDY.
UNFORTUNATELY, UH, SOME FOLKS FROM, UH, AARON'S BODY WITH OLIAN WAS NOT ABLE TO JOIN.
I THINK THAT THE, THE ONE THING THAT THEY REALLY WANTED TO BE ABLE TO EMPHASIZE THAT IS JUST THE MARKET SIGNAL AND PROVIDING SOME, UH, EXPLANATION WITH REGARD TO HOW IT OPERATES AS A MARKET SIGNAL, THE STATUTE.
DO WE HAVE MICHELLE OR PAUL? HI, MARTHA.
YEAH, I'M ON, I'M ON THE CALL.
UM, I'M GONNA, YOU KNOW, Y'ALL ARE VERY CAPABLE OF READING, SO I'LL JUST KIND OF RUN THROUGH THE HIGHLIGHTS.
UM, ESRS, WE THINK, UM, NEED TO BE ASSESSED BASED ON WHAT THEIR HSL IS AND THE ABILITY TO SUSTAIN THAT FOR THE REQUIRED DURATION PERIOD.
UM, SO, YOU KNOW, STATE OF CHARGE WILL BE VERY IMPORTANT.
UM, THERE ARE SOME QUALIFICATIONS THAT WE RECOMMEND IN HERE TO ENSURE THAT THE RESOURCE IS AVAILABLE FOR THE FULL TIMEFRAME THAT DRRS WOULD NEED TO BE AWARDED.
UM, SO I THINK, YOU KNOW, THAT THAT'S IMPORTANT.
UM, I'M JUST LOOKING, YOU KNOW, THE STATUTE WAS VERY CLEAR THAT PART OF THE, UH, CONCEPT FOR DRRS IS TO REDUCE RUCK, AND WE'RE TRYING TO UNDERSTAND HOW THAT WOULD WORK IN CONCERT WITH ESRS SINCE, UM, THEY TYPICALLY ARE NOT RUCKED, AND WE'RE NOT SURE HOW THAT WOULD WORK WITH A RUCK ENGINE.
UM, SO, YOU KNOW, I THINK THAT IS SOMETHING THAT NEEDS TO BE CONSIDERED BECAUSE AS WE MOVE THROUGH THIS, STICKING TO THE STATUTORY REQUIREMENTS IS GOING TO BE CRITICAL.
UM, AND SO, YOU KNOW, I THINK THAT IS SOMETHING TO LOOK AT, UM, IN TERMS OF, YOU KNOW, BEING ONLINE AND DISPATCHABLE, IT'S REALLY NOT CLEAR, UM, HOW, HOW THIS WOULD WORK IN TERMS OF AN AN LSL VERSUS HSL, UH, WITH AN, UH, A, UH, AN ENERGY STORAGE RESOURCE.
SO, YOU KNOW, I THINK FROM OUR STANDPOINT, YOU KNOW, IT'S UNCLEAR HOW THIS WOULD WORK FOR ESRS TO PARTICIPATE.
UM, AND IT DOESN'T REALLY APPEAR THAT THE STATUTE WAS CONTEMPLATING THAT.
UM, AND THEN IF YOU LOOK AT THE DURATION REQUIREMENTS, BOTH IN STATUTE, UM, AND IN TERMS OF WHAT THE LEGISLATURE EXPECTED FROM A RELIABILITY STANDARD, UM, YOU KNOW, THEY WANTED ANCILLARY SERVICE TO MEET THE REQUIREMENT THAT A RESOURCE BE ABLE TO PERFORM THROUGHOUT BOTH EXTREME HEAT AND EXTREME COLD.
UH, AND IF YOU LOOK AT WHAT'S HAPPENED IN TERMS OF THE EVENTS THAT WE'VE HAD OVER THE LAST FIVE YEARS, PARTICULARLY IN THE WINTER, THEY LAST ANYWHERE FROM THREE TO FIVE DAYS.
AND SO, UM, THE STATUTE MAKES IT VERY CLEAR THAT ERCOT HAS TO HAVE A MINIMUM OF FOUR HOUR DURATION, BUT COULD INCREASE THAT BASED ON THE NEEDS THAT THEY SEE IN ORDER TO, UM, TO FULFILL THE REQUIREMENTS IN THE STATUTE AND MEET THE RELIABILITY NEEDS THAT THIS PRODUCT IS INTENDED TO SERVE.
SO WE WOULD RECOMMEND THAT YOU EXTEND THE DURATION REQUIREMENT FOR, UH, WINTER TO A 72 HOUR MINIMUM DURATION, WHICH COMPORTS WITH WHAT WE TYPICALLY SEE IN TERMS OF EVENTS AND HOW LONG THEY LAST.
UM, USUALLY A MINIMUM OF THREE DAYS AND THEN SIX HOURS FOR WHAT WE WOULD CONSIDER NON WINTER MONTHS.
UM, WE TEND TO HAVE, UH, ISSUES DURING THE, THE SHOULDER MONTHS, UH, SOMETIMES DURING THE SUMMER, AND THAT ENSURES THAT WE GET THROUGH, UH, THOSE EVENTS OR TIMEFRAMES, UM, MEETING THE EXTREME REQUIREMENTS THAT THE STATUTE PUT FORTH WHEN YOU COUPLE BOTH, UH, SENATE BILL THREE AND, UH, HOUSE BILL 1500 TOGETHER.
SO THAT'S ROUGHLY, YOU KNOW, WHAT OUR COMMENTS SAY.
ARE THERE ANY QUESTIONS FOR MICHELLE?
[00:10:01]
ALL RIGHT.NOT SEEING ANYBODY IN THE QUEUE.
SO WE'LL GO ON FROM HERE TO THE JOINT COMMENTERS.
SO, CAITLIN OR BOB, WHICH ONE OF Y'ALL WANTS TO SPEAK TO YOUR COMMENTS? IT DOES A MATTER.
CAITLYN, YOU WANNA START? YOU WANT ME TO START? BOB LOOKS LIKE SHE NOMINATED YOU.
I'LL GO THROUGH THESE, THROUGH THESE REAL QUICKLY.
I'LL JUST, YOU KNOW, QUESTION BY QUESTION.
UH, YOU KNOW, WHAT WE'RE LOOKING AT IS, IS THE HIGH SUSTAINABLE LIMIT, IS THE TERM IT'S DEFINED IN THE PROTOCOLS.
IT'S BEEN, IT'S BEEN THERE SINCE THE BEGINNING.
UH, IT'S WIDELY KNOWN AND IT'S AN OPERATIONAL PARAMETER THAT'S ALWAYS BEEN USED.
SO THAT'S WHAT WAS USED, AND THAT'S THE DEFINITION THAT'S, THAT'S, THAT GOES WITH IT.
SO, UH, THAT'S WHY WE SAY THAT THE HIGH SUSTAINABLE LIMIT MEANS THE HIGH SUSTAINABLE LIMIT IN, IN WHAT WAS PUT INTO THE STATUTE.
UH, SO I'M, I'M NOT GONNA DEBATE A TENT OR ANYTHING ELSE.
I DON'T THINK THIS IS THE RIGHT PLACE TO DO THAT.
UH, SO I'M REALLY MORE LOOKING AT, AT WHAT IS THE TECHNICAL SIDE OF THAT.
IT'S A HIGH SUSTAINABLE LIMIT IS AN OPERATIONAL PARAMETER THAT SHOULD BE USED TO DO THIS, UH, SINCE IT IS CHANGED BY ALL RESOURCES, BASED ON WHATEVER CONDITIONS ARE OUT THERE THROUGH D RATES, TEMPERATURE VARIATIONS, EVERYTHING ELSE.
SO THERE'S NO ONE OUT THERE CAN SAY THAT THEY DON'T CHANGE THEIR HSL, UH, DEPENDING ON WHAT'S GOING ON.
SO THAT'S ALWAYS CHANGED, AND THAT IS THE OPERATIONAL PARAMETER THAT TELLS YOU WHAT YOU CAN ACTUALLY DO.
NAMEPLATE, UH, DOESN'T REALLY MEAN MUCH OF ANYTHING.
IT'S NOT USED REALLY ANYWHERE FOR ANY KIND OF AN OPERATIONAL PARAMETER.
SO WE DON'T THINK THAT THAT WOULD BE THE APPROPRIATE WAY TO GO.
AND I THINK THERE'S DIFFICULTIES WITH THAT, BOTH IN QUALIFICATION AND IN, UH, OPERATION OF THE RESOURCES.
SO THAT'S WHY WE SAY IT FROM A TECHNICAL STANDPOINT THAT HSL SHOULD BE USED, AND THAT, UH, THAT, UH, IT COULD BE ADJUSTED FOR ESRS TO GET THAT FOUR HOUR, UH, DURATION, UH, THROUGHOUT THE, THE PERIOD THAT'S REQUIRED.
UH, AND ASK FOR SOME CHANGES ON, AND I'LL JUST HIT A COUPLE THINGS RATHER THAN ASKING QUESTIONS.
IS A ONE HOUR, TWO HOUR BATTERY CAN BE A FOUR HOUR BATTERY, UH, AND PORTFOLIOS ARE OPERATING IN THE SENSE THAT THEY'RE FOUR HOUR BATTERIES TO BEGIN WITH, AS CAN BE SEEN IN SOME OF THE OTHER, OTHER EVENTS THAT HAVE TAKEN PLACE.
HOWEVER, ON INCENTING, UH, THIS ISN'T INCENTING, UH, THIS IS, THIS IS AN OPERATIONAL PARAMETER AND THAT'S WHAT IT, WHAT THIS NEEDS TO BE.
INCENTING FOUR HOUR BATTERIES NOW OVERALL MAY NOT BE THE BEST THING FOR THE MARKET TO BEGIN WITH BECAUSE A FOUR HOUR BATTERY IS SLOWER AND IT'S A FOUR HOUR BATTERY.
UH, YOU CAN'T MAKE A FOUR HOUR BATTERY A ONE HOUR OR TWO HOUR BATTERY AND USE A RAMP RATE THAT'S ASSOCIATED WITH THAT.
SO IT ACTUALLY HAS HIGHER BENEFITS OF HAVING SOME ONE AND TWO HOUR STORAGE OUT THERE IN, UH, AND USING IT AS FOUR HOUR RATHER THAN A FOUR HOUR STORAGE.
AS FOR QUESTION NUMBER TWO, UH, WHICH IS, UH, YOU KNOW, ANOTHER CRITERION, UH, WE, WE REALLY, ON QUESTION TWO, IT SHOULD REMAIN, YOU KNOW, DELIVERABLE AND OPERATIONAL FLEXIBILITY JUST TO RESPOND TO WHAT THE OPERATIONAL NEEDS ARE.
AND THAT'S REALLY THE EXTENT OF WHAT, WHAT WE'RE LOOKING FOR.
UH, IT'S NOT THERE FOR INCENTIVES.
WE NEED TO RESERVE THE INCENTIVES FOR THE RE THE RESOURCE, UH, NOT RESOURCE ADEQUACY, THE RELIABILITY STANDARD LIKE WE'RE DOING WITH 1310.
THAT'S WHERE ALL OF THAT NEEDS TO BE.
AND THIS NEEDS TO FOCUS ON, ON JUST OPERATIONAL RELIABILITY.
AND THAT'S THE DIRECTION WE SHOULD TAKE ON THIS.
UH, YOU KNOW, THE, AS, UH, DC UH, DEMAND CURVE, WE'RE GONNA TALK ABOUT THAT LATER.
SO, UH, WE'LL HIT THAT IN A LITTLE BIT.
SO THAT'S QUESTION NUMBER TWO.
WE REALLY DIDN'T HAVE RESPONSE ON THAT.
I'LL, I COULD HAVE SOME QUESTIONS ON THAT FOR IMPLEMENTATION AS WE GO THROUGH, MAYBE, BUT, UH, WE DON'T REALLY HAVE A STANCE ON THAT AT THIS POINT.
AND THEN QUESTION NUMBER FOUR, WHEN IT COMES TO THE, UH, UH, CAPABLE OF RUNNING, CAN WE GO MORE THAN FOUR HOURS? YES, WE CAN GO MORE THAN FOUR HOURS.
SHOULD WE GO BEFORE MORE THAN FOUR HOURS FOR DURATION? THAT'S A QUESTION THAT SHOULD BE ANSWERED BY ERCOT THROUGH A STUDY LIKE ANY OTHER ANCILLARY SERVICE THAT IS DONE.
THEY'RE DONE BASICALLY ON A YEARLY BASIS AND LOOKING AT WHAT THE NEEDS ARE FOR THE COMING YEAR, WHAT THE DURATIONS, HOW YOU PROCURE IT, UH, WHAT KIND OF STUDIES ARE DONE ERCOT NEEDS TO DO.
AND IF THAT'S THE CASE, THEN ERCOT WOULD DO THE STUDY, BRING IT TO THE, TO THE GROUPS, AND THEN THE GROUPS WOULD LOOK AT THAT QUESTION ANSWERS, AND THEN IT WOULD GO THROUGH THE NORMAL PROCESS.
ONE THING I'D MENTIONED, THERE'S BEEN SEVERAL THINGS MENTIONED ABOUT THE DURATION OF, OF SOME OF
[00:15:01]
THE WINTER EVENTS THAT HAVE COME OUT.ONE OF THE THINGS THAT HASN'T BEEN MENTIONED IN HERE THAT WE DID IN OUR COMMENTS IS WE TALKED ABOUT, UH, WHERE PRC WAS DURING THOSE.
THAT'S REALLY WHAT'S TELLING YOU WHAT THE RELIABILITY OF THE SYSTEM IS DURING THAT.
AND IF YOU LOOK AT OUR COMMENTS AND GO THROUGH THERE, UH, THERE WERE VERY FEW TIMES IT, UH, TAKING OUT YURI YURI OF COURSE, WAS A, WAS A, UH, A A HUNDRED YEAR STORM, MAYBE EVEN MORE THAN THAT.
BUT IF YOU LOOK AT, AT, AT THE PRC FOR THE REMAINDER OF THOSE STORMS THAT ARE LISTED OUT THERE, BASICALLY WERE VERY FEW, AND IN THE PAST SEVERAL YEARS, HAVEN'T BEEN ANY, UH, HOURS TO WHERE WE'VE BEEN BELOW 4,000, UH, UH, MEGAWATTS OF PRC DURING THOSE STORM EVENTS.
AND THAT'S, YOU KNOW, FROM, UH, HEATHER, ER, UH, ENZO, KINGSTON AND FERN, UH, ELLIOT, WE HAD NONE AT FOUR, AT 4,000 HOURS, LANDON, WE HAD NONE LESS THAN 4,000 HOURS.
WHEN YOU GET TO I AT 4,000 MEGAWATTS, WHEN YOU GET TO THE FIRST COUPLE OF THOSE, YOU HAVE A FEW WHEN YOU'RE AT FIVE MINUS 5,000 BELOW THAT, OR YOU KNOW, OF OURS.
AND THAT'S THE REAL TEST OF WHAT THE RELIABILITY IS DURING THOSE STORMS, NOT THE ACTUAL DURATION OF THOSE, IT DEALS WITH WHAT PRC IS AND HOW ALL THE RESOURCES ARE DONATING WHAT THEY NEED TO MAKE SURE WE HAVE A RELIABLE SYSTEM.
SO, UH, TO, TO, TO, WITH THAT ALL SAID, ARE WE OPPOSED TO A LONGER ONE? NO, BUT WE BELIEVE THAT IT NEEDS TO BE DONE THROUGH A STUDY THAT CLEARLY SHOWS THE NEED AND THE REASONING BEHIND WHY YOU WOULD NEED A LONGER DURATION IN ANY OF THE SEASONS OTHER THAN WHAT'S STATED IN THE, IN THE PROTOCOLS OR IN THE REVISION REQUESTS RIGHT NOW.
AND, UH, I'LL LEAVE AT THAT, TURN IT OVER TO, UH, CAITLIN TO SEE IF I'VE MISSED ANYTHING.
ANYTHING YOU WANNA ADD? I'M GOOD FOR, I'M GOOD FOR NOW.
LOOKS LIKE YOU'LL HAVE A QUESTION FROM SHAMS. YEAH, BOB, IF YOU GO BACK TO THE DEFINITION, I THOUGHT YOU WERE ACTUALLY ARGUING THAT THE HSL SHOULD NOT BE MANIPULATED, BUT THE DEFINITION SAYS FOR ESR WITH POSITIVE HSL, IT'S THE MAXIMUM SUSTAINED, UM, YOU KNOW, OUTPUT THAT THEY CAN SUSTAIN.
SO IN THAT CASE, WHEN A TWO HOUR BATTERY, YOU KNOW, WANTS TO QUALIFY FOR DRS AND IT KNOWS IT CAN OPERATE AT, LET'S SAY A HUNDRED MEGAWATTS, UH, ON A SUSTAINED BASIS, BUT THEN IT SAYS NO, IT'S ACTUALLY, UH, 50 MEGAWATTS JUST FOR THE DRS QUALIFICATION.
HOW IS THAT CONSISTENT WITH THIS DEFINITION IN YOUR OPINION? I SEE IT CONSISTENT 'CAUSE YOU ARE ADDING IN THE ACTUAL DURATION THAT YOU NEED.
AND THAT'S WHERE I SEE THE CONSISTENCY IS, IS IF YOU GO INTO TO THE ACTUAL, IN ANY OF THE RESOURCES, IT SAYS MAXIMUM ENERGY DISCHARGE, BUT IT DOESN'T END END UP TALKING ABOUT A DURATION IN THERE AT ALL, IN ANY RESOURCE.
SO IT, IT DOESN'T MATTER WHETHER IT'S AN ENERGY RESOURCE OR, OR ANOTHER, IT IS JUST, UH, WHAT THE MAXIMUM IS.
AND, UH, SO THAT'S WHERE I SEE THAT THERE'S NOT AN INCONSISTENCY IN THERE, BUT ISN'T THE MAXIMUM, I MEAN, THE MAXIMUM, THAT'S EXACTLY RIGHT, THAT IT SHOULD BE THE MAXIMUM YOU CAN SUSTAIN, BUT THE MAXIMUM IS THE A HUNDRED MEGAWATTS BECAUSE YOU CAN SUSTAIN THE MAXIMUM YOU, YOU'RE LEAVING OUT.
THE DIFFERENCE IS, IS, IS YOU, WHEN YOU GO TO, TO THE, THE QUALIFICATION FOR DRS, YOU ARE ADDING IN A COM, UH, A COMPONENT OF DURATION, WHICH IS NOT IN THE ACTUAL HIGH SUSTAINABLE LIMIT DEFINITION FOR ANY RESOURCE.
SO THAT'S WHERE I SEE THAT THERE'S NO INCONSISTENCY BECAUSE YOU'RE ADDING IN A DIFFERENT PARAMETER.
YOU'RE GOING BEYOND THIS DEFINITION.
I MEAN, I JUST SEE THIS, THIS DEFINITION.
WELL, YOU, YOU'RE TOO, UH, NO, I'M READING LANGUAGE OF IT, BUT WE CAN DISAGREE ON THAT.
WE'VE GOT ANOTHER QUESTION FROM TREVOR SAKO.
UH, BOB, THANKS FOR THIS PRESENTATION.
WAS JUST WONDERING IF YOU COULD MAYBE UNPACK WHERE, UH, Y'ALL THINK THE BEST PLACE TO UNDERSTAND THE RELIABILITY IMPACTS OF DIFFERENT DURATION REQUIREMENTS WOULD BE, AND I'LL JUST NOTE THAT, UM, FROM AN LCA PERSPECTIVE, I THINK WE WROTE IN OUR COMMENTS TO 1309 THAT SHOULD DRS BE IMPLEMENTED, THAT THIS MIGHT, IT MIGHT BE APPROPRIATE FOR ERCOT STAFF TO REEVALUATE DURATION REQUIREMENTS AS PART OF ITS ANNUAL ANCILLARY SERVICE METHODOLOGY.
BUT IN HEARING YOU PRESENT TODAY AND REFLECTING ON ANGIE'S PRESENTATION TO THE
[00:20:01]
BOARD AND ON FEBRUARY AROUND POTENTIAL INCENTIVES FOR LONGER DURATION STORAGE, I'M, I'M THINKING IT MAY ALSO BE APPROPRIATE WITHIN THE RELIABILITY STANDARD ASSESSMENT, UH, TO MAYBE LOOK AT FOR ERCOT, UH, TO LOOK AT DIFFERENT SENSITIVITIES OF DURATION REQUIREMENTS AND SEE HOW THAT IMPACTS ITS THE SYSTEM'S ABILITY TO, TO MEET THE RELIABILITY STANDARD.SO, JUST WOULD LOVE TO HEAR YOUR THINKING ON THIS, ON, ON KIND OF WHERE THE BEST PLACE FOR THAT IS AND HOW YOU WOULD KIND OF, WHAT THE CONTOURS OF THAT ASSESSMENT, UH, WOULD LOOK LIKE FROM YOUR PERSPECTIVE.
YEAH, THAT'S A LITTLE BIT OUTTA THE SCOPE OF, OF, OF WHAT WE'VE GOT HERE, BUT YEAH, I, I GET WHERE YOU'RE GOING BECAUSE WHEN YOU'RE TALKING ABOUT THE RELIABILITY STANDARD, THEN THAT'S COMPLETELY DIFFERENT IN MY MIND THAN, THAN WHAT DRRS IS.
UH, AND IF YOU'RE LOOKING AT THE RELIABILITY STANDARD, SURE.
I THINK ERCOT SHOULD ANALYZE ALL TYPES OF, OF TECHNOLOGIES DURATIONS, ALL THOSE COMPONENTS AS FORCED OUTAGES, ALL OF THOSE ASSOCIATED PARAMETERS THAT TAKE PLACE WHEN YOU ARE LOOKING AT THE, THE STANDARD THAT THEY'RE CURRENTLY STUDYING OVER AT THE COMMISSION.
AND THAT'S THE PROPER PLACE TO PUT THAT.
AND, AND WHAT THAT DOES, THAT'S NOT NECESSARILY GOING TO DETERMINE WHAT YOU NEED IN DRRS THAT'S GONNA BE LOOKING AT THE OVERALL SYSTEM.
WHAT WOULD BE THE BEST MIX FOR THE OVERALL SYSTEM, AND HOW DO YOU GET TO THAT POINT? IS GOING TO BE PART OF THE QUESTIONS THAT COME OUT OF THE, UH, THE RELIABILITY STANDARD.
DO WE NEED MORE NATURAL GAS? I WOULD SAY WE DO.
UH, DO WE NEED LONGER DURATION STORAGE? NE YES, WE MAY NEED THAT ALSO, BUT LIKE I WAS SAYING EARLIER, YOU HAVE TO BALANCE THAT ALSO WHEN YOU TALK ABOUT ESRS IS A FOUR HOUR STORAGE IS NOT A, IS A FOUR HOUR STORAGE.
A ONE AND TWO HOUR CAN BE A ONE AND TWO HOUR AND HAVE THAT RAMP RATE, AND IT CAN OPERATE AS A FOUR HOUR STORAGE, WHICH THEY DO.
UH, BUT YOU CAN'T MAKE A FOUR HOUR STORAGE ACT LIKE A ONE OR TWO HOUR STORAGE AND RAMP RATES AND THOSE TYPES OF THINGS.
SO THAT'LL ALL HAVE TO BE LOOKED AT.
AND I THINK THE APPROPRIATE PLACE FOR THOSE QUESTIONS TO LOOK AT WHAT THE OVERALL TECHNOLOGY AND, AND THE CAPABILITIES OF ALL RESOURCES COMBINED FOR THE BEST, UH, RELIABILITY ON THE SYSTEM IS DURING THAT TIME WHENEVER WE DO THAT, I GUESS THIS FALL.
I JUST WANTED TO HAVE A BRIEF FOLLOW UP IF THAT'S OKAY.
UM, SO I JUST WANNA MAKE SURE I'M, I'M FULLY FOLLOWING.
SO THEN WHEN YOU SUGGESTED THAT, YOU KNOW, WE MAY NEED A STUDY TO PROVE OUT LONGER DURATION REQUIREMENTS IN, IN THIS CONTEXT, I THINK, ARE YOU REFERRING TO, YOU KNOW, I GUESS THE OPERATIONAL NEEDS EXCLUSIVELY? YES.
AND SO THIS IS, I THINK IT'S JUST THE CHALLENGE OF HAVING BOTH THE PARALLEL TRACKS HERE.
UM, SO YEAH, I COULD SEE THE VALUE IN, IN KIND OF STUDYING IT BOTH FROM THE OPERATIONAL SIDE, MAYBE THAT'S MORE AN AS METHODOLOGY TYPE STUDY VERSUS KIND OF THE OVERALL SYSTEM NEEDS, UH, AND BALANCING INCENTIVES, ET CETERA THERE.
YEAH, THAT'S EXACTLY WHAT I'M TALKING ABOUT.
AND THAT'S WHY IN HERE I TALK ABOUT THAT IS THAT THIS IS AN OPERATIONAL TOOL AND THE STUDIES CAN BE DONE ON A YEARLY BASIS WHEN WE DO ANCILLARY SERVICE METHODOLOGY EVERY YEAR.
IF, IF ERCOT SEES AN ISSUE OUT THERE AND SAY, HEY, WE NEED TO LOOK AT THIS AND WE NEED TO, AND THEY DO THE STUDY AND SAY, WE NEED SIX HOURS, WE NEED 72 HOURS, WHATEVER IT MAY BE, THEY'LL HAVE A STUDY TO SAY, HERE'S WHAT'S GOING ON, HERE'S WHY.
HERE'S THE CLEAR NEED FOR IT, AND BRING IT FORTH TO THE, TO THE STAKEHOLDERS TO TAKE A LOOK AT THAT AND PUT IT INTO THE METHODOLOGY AS NECESSARY, RIGHT? UH, BUT THAT'S COMPLETELY DIFFERENT THAN THE OVERALL, UH, YOU KNOW, UH, RELIABILITY STANDARD AND THE DURATION AND COMPONENTS OF CAPACITY AND, AND RELIABILITY COMPONENTS OF ALL RESOURCES TO GET TO THAT NUMBER.
THAT'S A DIFFERENT THING TO ME.
THANKS FOR TEASING THAT OUT WITH ME.
I THINK BOB GOT TO WHERE I WAS.
I WAS GONNA SAY, I, I DON'T THINK I HAVE STRONG FEELINGS.
UM, TREVOR ON, ON WHERE THAT STUDY HAS DONE, OR ERCOT HAS DONE SORT OF, I DON'T KNOW IF THEY WERE FULL BLOWN STUDIES, BUT THEY'VE PRESENTED SOME DATA IN THE PAST ON CONVERSATIONS ON, YOU KNOW, IF YOU'RE, I THINK, UM, 10 96 AS WELL AS 1186.
OUR, OUR POINT IS JUST, YOU KNOW, WE'RE, WE'RE READING D YOU KNOW, WE WE'RE HAPPY TO READ IT IN CONJUNCTION WITH, WITH OTHER PARTS OF THE STATUTE, BUT THE FOCUS AND, AND D IS THAT THIS IS A PRODUCT FOR MARKET UNCERTAINTY AND, YOU KNOW, A, A PRODUCT TO ADDRESS, ENTER OUR OPERATIONAL CHALLENGES.
AND SO WE, WE VIEW THIS AS A UNCERTAINTY OPERATIONAL PRO PRODUCT AND NOT A WINTER RESOURCE ADEQUACY PRODUCT.
AND THEN, YOU KNOW, WE KIND OF WENT EVEN
[00:25:01]
FURTHER AND SAID, WELL, IF IT WAS, YOU DON'T NECESSARILY NEED A 72 HOUR PRODUCT, YOU JUST NEED MORE RESERVES AT ANY GIVEN TIME.AND THAT'S WHY WE TEASED OUT, YOU KNOW, THE AMOUNT, THE LOWEST AMOUNT OF RESERVES.
AND IN MANY CASES, YOU KNOW, IT'S AT A LEVEL WHERE IT'S THE OLD ORDC WOULDN'T EVEN HAVE KICKED IN.
SO THAT, THAT'S WHERE WE ARE WITH THIS.
BUT AS FAR AS, YOU KNOW, WHERE A STUDY WOULD HAPPEN TO SHOW THE NUMBER OF HOURS, I THINK IT COULD SORT OF HAPPEN ANYWHERE, INCLUDING THE ANCILLARY SERVICE METHODOLOGY THAT YOU MENTIONED.
THANK YOU SHA YEAH, BOB, IN YOUR EIGHT, UH, IN YOUR COP AND YOUR REALTIME TELEMETRY, YOU'RE ONLY ALLOWED TO, YOU KNOW, CONVEY ONE HSL NUMBER TO ERCOT.
SO IF I HAVE A HUNDRED MEGAWATT BATTERY, THAT'S TWO HOURS.
WHAT HSL DO I SPECIFY IF I'M PROVIDING, UH, YOU KNOW, 'CAUSE YOU DON'T KNOW WHAT YOU'RE AWARDED YET, SO, BUT YOU NEED TO SPECIFY AN HSL AND BASED, UH, YOU KNOW, ON YOUR AWARDS, YOU'D BE AWARDED EITHER DRS NONS SPIN OR SOME OTHER ANSARY SERVICE IN THAT CASE.
DO I SPECIFY 50 OR A HUNDRED? YEAH, I'LL HAVE TO GET INTO THAT LATER.
'CAUSE I HAVEN'T REALLY GONE DOWN TO THE ACTUAL COMPLETE IMPLEMENTATION DETAILS YET AS WE HAVEN'T WITH MOST ANYTHING IN THIS, BECAUSE I MEAN, THERE'S A LOT OF QUESTIONS OUT HERE, UH, ON EACH ONE OF THESE.
AND THAT'S ONE THAT WE'LL HAVE TO GO THROUGH WHENEVER WE'RE LOOKING AT ACTUALLY WRITING THE FINAL PROTOCOLS ON HOW YOU GET INTO ACTUAL, OR NOT WRITING ALL THE ALGORITHMS, I WOULD SAY TO, UH, WHAT YOU'RE PUTTING IN, IN EACH, EACH PLACE.
THAT, THAT EVEN GOES FOR QUESTION NUMBER TWO OR THE ONE ON, ON, WHETHER IT'S TO WHERE YOU RAMP TO OR AT YOUR, YOU KNOW, AT YOUR LSL WHERE YOU'RE DISPATCHABLE FOR THERMAL GENERATION THAT'S, YOU KNOW, IN THE TWO HOURS.
SO THERE'S A LOT OF THINGS WE STILL HAVE TO FIGURE OUT AND I REALLY WASN'T PREPARED TO ANSWER THAT QUESTION RIGHT NOW.
SO, SORRY ABOUT THAT HUMS. YEAH.
I THINK YOU NEED TO THINK ABOUT THAT.
SO LET'S MOVE ON TO THE SIERRA CLUB COMMENTS.
CYRUS, WOULD YOU LIKE TO COVER THOSE? HEY, CAN YOU GUYS HEAR ME? YEAH, I CAN HEAR YOU.
SORRY, I'M EATING A CRACKER AND OUTSIDE MY OFFICE FROM MY CAR, BUT I CAN SPEAK BRIEFLY.
SO, QUESTION NUMBER ONE, UM, WE AGREE WITH, UH, THE PREVIOUS COMMENTERS THAT WE VIEW IT AS AN, LET'S CALL IT AN OPERATIONAL HSL.
SO IT'S WHAT CAN YOU SUSTAIN FOR FOUR HOURS? SO IN THE EXAMPLE WE'VE CITED, YOUR, UH, HSL WOULD BE, UM, FOR A HUNDRED MEGAWATT, TWO HOUR BATTERY WOULD, FOR THE PURPOSE OF DRS WOULD BE 50 MEGAWATTS.
AND AGAIN, WE VIEW THIS AS, YOU KNOW, AN OPERATIONAL TOOL, UH, FOR ANCILLARY SERVICES.
SO ALL OF OUR COMMENTS ARE, ASSUMING THIS IS WITHIN 1309, NOT 1310.
THE FIRST PART OF OUR COMMENTS, WE SAID BASICALLY TABLE 1310.
THAT'S A DIFFERENT DISCUSSION.
THIS IS ABOUT AN OPERATIONAL TOOL.
AND THEN THE SECOND QUESTION ABOUT INCENTIVE, THERE'S NO DOUBT THAT IF YOU WERE TO STRICTLY SAY YOU'VE GOTTA BE FOUR HOURS, YOU KNOW, IT'S A, IT'S A CAPACITY NUMBER, NOT AN OPERATIONAL NUMBER, THAT IT COULD PROVIDE AN INCENTIVE TO LONGER STORAGE, BUT IT'S PROBABLY NOT ENOUGH.
UH, THERE'S NOT ENOUGH INCENTIVE THERE TO, YOU KNOW, REALLY PUT AN INCENTIVE TO, TO LONG DURATION STORAGE.
SO THE, UH, THE JUICE MAY NOT BE WORTH THE SQUEEZE.
IN OTHER WORDS, YOU'RE THEN TAKING AWAY, UM, RESOURCES THAT COULD PROVIDE DRS ONLY TO PROVIDE INCENTIVE TO FOUR HOUR STORAGE.
THAT DOESN'T SEEM LIKE, YOU KNOW, THAT, THAT SEEMS LIKE THE WRONG PLACE TO HAVE THAT CONVERSATION, AS OTHERS HAVE SAID.
THE THIRD QUESTION, UM, WE DO VIEW THOSE THINGS TOGETHER THAT, UH, IT'S IN THE SAME SEC, IT'S IN THE SAME SUBSECTION OF STATUTES.
UM, AND SO YES, YOU SHOULD BE ABLE TO GET UP TO YOUR, UM, HSL WITHIN, UM, SORRY, SOMEONE'S CALLING ME.
UM, YOU, YOU SHOULD BE ABLE TO GET UP TO YOUR, UM, HSL WITHIN THE TWO HOURS.
THAT DOESN'T MEAN YOU NEED TO TAKE THE TWO HOURS, IT JUST MEANS YOU NEED TO DO IT WITHIN TWO HOURS, UM, AND THEN PROVIDE THAT SERVICE FOR AT LEAST FOUR HOURS.
AND THEN THE LAST QUESTION ON, UM, YOU KNOW, SHOULD WE HAVE A LONGER DURATION? I DO THINK THAT'S REALLY, UM, AN OPERATIONAL QUESTION OF WHAT IS DETERMINED TO BE NEEDED.
AND I WOULD SAY THAT'S SOMETHING THAT WHICH SHOULD BE DONE IN THE ANSO METHODOLOGY.
I WOULD, YOU KNOW, I THINK FOR THE MOMENT WE THINK FOUR HOURS IS ADEQUATE, BUT SHOULD, UM, ERCOT AND THE MARKET DETERMINE
[00:30:01]
THAT A LONGER TIME IS NEEDED, ESPECIALLY FOR THE WINTER, THEN THAT SHOULD BE DONE THROUGH THE NORMAL ANCILLARY, UM, METHODOLOGY PROCESS.AND SO, IN OTHER WORDS, WE WANNA MAKE SURE THAT THE WHATEVER'S PASSED IN 1309 HAS THAT FLEXIBILITY.
SO IF IT IS NEEDED IN THE FUTURE, WE CAN GO TO LONGER THAN FOUR HOURS, BUT WE DON'T NECESSARILY THINK IT'S NEEDED, UM, IN THE FIRST GO ROUND.
UH, BUT, BUT THAT CAN BE HANDLED THROUGH THE, YOU KNOW, THE ANCILLARY METHODOLOGY ISSUE.
AND I THINK, I THINK I DID THAT PRETTY FAST.
IF THERE ARE ANY QUESTIONS, UH, HAPPY TO ANSWER THEM.
I WOULD LIKE TO GET INTO MY OFFICE 'CAUSE I'M, UH, IN THE, UH, STANDING OUTSIDE IN THE RAIN.
PLEASE GO TO YOUR OFFICE AND FINISH EATING YOUR CRACKER.
UM, THANK YOU FOR THE OVERVIEW, CYRUS.
UM, THERE'S NO ONE IN THE QUEUE FOR YOU.
AND, UH, NEXT UP WOULD BE THE ADVANCED POWER ALLIANCE CLEAN SLASH CLEAN POWER ASSOCIATION.
CHARLIE, DO YOU WANNA COVER THESE? MARTHA, THIS IS KEN.
I'M HANDLING IT FOR A-P-A-A-C-P.
OKAY, I KNOW WE GOT SOME PRETTY GOOD COMMENTS AND THANKS EVERYBODY FOR THE DISCUSSION AGAIN THIS MORNING.
WE'RE GETTING THERE, BUT, UH, I'VE PARED DOWN.
I'M NOT GONNA GO THROUGH THE WHOLE DOCUMENT.
I PARED DOWN TO SOME, JUST SOME TALKING POINTS.
UH, FIRST THING, DRRS SHOULD REMAIN A PERFORMANCE BASED SERVICE.
UM, YOU KNOW, THE STATUTE REQUIRES FOUR HOURS SUSTAINING CAPABILITY, NOT A NAME PLATE SCREEN FOR ENERGY STORAGE RESOURCES, HSL SHOULD REFLECT THE ACTUAL LEVEL OF THE OUTPUT THE RESOURCE CAN RELIABLY SUSTAIN FOR FOUR CONTINUOUS HOURS BASED UPON USABLE ENERGY AND REAL-TIME STATE OF CHARGE.
UM, WE BELIEVE THIS INTERPRETATION IS CONSISTENT WITH ERCOT LONGSTANDING DEFINITION OF HSL ACROSS ALL RESOURCE TYPES.
HSL REFLECTS OPERATIONALLY VALIDATED SUSTAINED CAPABILITY, NOT MANUFACTURED NAMEPLATE RATINGS.
APPLYING A STATIC NAMEPLATE BASED HSL ONLY TO STORAGE WOULD BE INCONSISTENT AND DISCRIMINATORY.
UH, PURE 39 1 59 D TWO A AND B ESTABLISHES SEPARATE REQUIREMENTS.
THE FOUR HOUR DURATION REQUIREMENT AND THE TWO HOUR DISPATCHABILITY REQUIREMENT SHOULD NOT BE MERGED INTO A SINGLE MEGAWATT LIMITING FORMULA, TURNING THEM AS COMBINED CONSTRAINTS WOULD THEN PROPERLY TRANSFORM DRS INTO A LONG DURATION CAPACITY.
PRODUCT NAMEPLATE BASED HSLS WOULD REDUCE RELIABLY AND INCREASE COSTS.
THAT'S ANOTHER CONCERN WE'VE GOT THAT A NAMEPLATE INTERPRETATION WOULD EXCLUDE STORAGE RESOURCES THAT CAN VERIFIABLY DELIVER FOUR HOURS OF SUSTAINED OUTPUT AT QUALIFIED LEVEL NARROWING PARTICIPATION, REDUCING COMPETITION, AND RAISING CONSUMER COSTS WITHOUT IMPROVING SYSTEM RELIABILITY.
NEXT POINT, DRRS IS NOT DESIGNED TO CREATE LONG DURATION INVESTMENT SIGNALS.
IT'S A DAILY CAPPED ANCILLARY SERVICE AND IS NOT A CAPACITY MECHANISM OR A PCM.
IT CANNOT ON ITS OWN FINANCE LONG DURATION STORAGE INVESTMENTS.
DEVELOPERS RELY ON THE FULL ERCOT REVENUE STACK.
THE FOUR HOUR DURATION REQUIREMENT REMAINS APPROPRIATE.
DRRS WAS DESIGNED TO ADDRESS INTRADAY UNCERTAINTY IN THE TWO TO FOUR HOUR TIMEFRAME.
ERCOT HAS NOT IDENTIFIED OPERATIONAL CONDITIONS REQUIRING SUSTAINABLE PLANS BEYOND FOUR HOURS.
AGAIN, LOOKS LIKE WE NEED SOME MORE STUDY GUYS.
UM, EXTENDING DRS DURATION NOW WOULD BE PREMATURE AND COSTLY, AND EIGHT OR 12 HOUR REQUIREMENT WOULD DISQUALIFY MUCH OF THE EXISTING STORAGE FLEET, CREATE ARTIFICIAL SCARCITY, INCREASE CLEARING PRICES, AND DETER FUTURE INVESTMENT WITHOUT DEMONSTRATED RELIABILITY NEED.
ERCOT ALREADY HAS AUTHORITY TO ACT IF THE SYSTEM NEEDS CHANGE.
PURE R 39 1 59 E ALLOWS ERCOT TO EXTEND DURATION IN THE FUTURE.
IT JUSTIFIED BY EMPIRICAL RELIABILITY DATA.
IN OTHER WORDS, A STUDY CHANGES SHOULD BE DRIVEN BY DEMONSTRATING NEED NOT SPECULATIVE DESIGN.
OUR, OUR BOTTOM LINE IS MAINTAINING A FOUR HOUR PERFORMANCE BASED DRS FRAMEWORK SUPPORTED BY REAL-TIME TELEMETRY AND STATE OF CHARGE MONITORING BEST ADVANCES, RELIABILITY, AFFORDABILITY, COMPETITION AND TECHNOLOGY NEUTRAL MARKET ACCESS, CONSISTENT WITH LEGISLATIVE INTENT.
I DON'T SEE ANYBODY IN THE QUEUE FOR YOU.
APPRECIATE THE OVERVIEW THERE.
AND THE LAST SET OF COMMENTS I SAW, UH, WITH ANSWERS TO THE FOUR QUESTIONS CAME FROM CPS.
IS THERE ANYBODY ON FROM CPS WHO WANTS TO SPEAK TO THESE? HI, MARTHA.
DAVID KEY IS OUT OF OFFICE, SO I CAN SPEAK TO THESE.
ALL RIGHT, CAROLYN FLOOR IS YOURS.
SO I'LL KEEP THIS AT A HIGH LEVEL.
UH, CPS LEGAL INTERPRETS THE LANGUAGE AS SUPPORTING THE PARTICIPATION OF E SRS IF THEY CAN SUSTAIN THEIR MAXIMUM DISCHARGE CAPABILITY FOR THE FULL FOUR HOUR DURATION.
IN SHORT, WE BELIEVE CHANGING THE HSL QUALIFICATION TESTING AND HAVING A SIGNIFICANTLY DIFFERENT OPERATIONAL HSL
[00:35:01]
DOES NOT ALIGN WITH THE PLAIN LANGUAGE AND INTENT OF PURE CPS ALSO BELIEVES SECTION TWO A THROUGH C THE PURE LANGUAGE SHOULD BE READ TOGETHER.AND WE KNOW IN OUR COMMENTS THIS INTERPRETATION COULD EXCLUDE MANY DISPATCHABLE GENERATION RESOURCES WITH LONGER STARTUP TIMES.
AND WE WANNA EMPHASIZE THE IMPORTANCE OF IMPLEMENTING DRS IN A WAY THAT MEANINGFULLY REDUCES REP COMMITMENTS.
AND THEN FINALLY, EXTENDING DRS DURATION BEYOND FOUR HOURS SHOULD ONLY OCCUR IF ERCOT ANALYSIS DEMONSTRATES A CLEAR OPERATIONAL NEED.
ANY QUESTIONS FOR CPS? ALL RIGHT, SO AS WE KIND OF CLOSE OUT THIS ITEM, UH, YEAH, BOB, GO AHEAD.
YEAH, I'VE GOT TWO QUICK QUESTIONS.
ONE OF 'EM IS BACK TO SHAMS. I WANNA MAKE SURE I UNDERSTOOD THIS ONE QUESTION 'CAUSE IT KIND OF HIT ME OFF TO THE SIDE AND I HADN'T THOUGHT THROUGH ALL THAT OR EVEN TALKED TO THE GUYS THAT DO THE BIDDING AND THE COPS THAT FILL THAT OUT.
SO SHAMS, ARE YOU SAYING THERE'S A DIFFERENCE BY ADDING THIS THAN THAT? WE ALREADY HAVE BECAUSE IN, WHEN WE DO OUR COPS WITH ANCILLARY SERVICES TODAY, WE HAVE VARYING, UH, DURATIONS.
WE HAVE, YOU KNOW, ONE HOUR FOR ECRS, FOUR HOUR FOR NONS SPEND.
WE STACK THOSE WHENEVER WE DO 'EM TODAY.
ARE YOU SAYING THAT ADDING IN DRRS IS GOING TO CHANGE SOMETHING WE'RE ALREADY DOING THAT I HAVEN'T THOUGHT ABOUT OR, OR MY GUYS HAVE AND I JUST HAVEN'T, HAVEN'T HEARD FROM THEM YET? NO.
SO TODAY, UH, WHEN WE SPECIFY HSL IN THE COP AND THE, UH, AND TELEMETRY, WE DO WHAT WE CAN ACTUALLY DO.
YOU KNOW, SO IT'S A HUNDRED MEGAWATT TWO HOUR BATTERY, WE PUT IN A HUNDRED MEGAWATTS.
BUT WHEN ERCOT AWARDS NONS SPIN, THEY TAKE INTO ACCOUNT THAT THAT'S A FOUR HOUR PRODUCT AND SC LIMITS THE AWARD.
UH, SO THE HSL IS NEVER MESSED WITH, YOU KNOW, THE HSL IS WHAT YOU CAN DO OPERATIONALLY.
SO WHAT, IN YOUR COMMENTS, IT SEEMS LIKE YOU'RE SAYING THAT YOU WOULD BE ABLE TO MESS WITH THE HSL.
SO WHEN YOU QUALIFY FOR, UH, NONS SPIN, YOU STILL SAY MY HSL IS A HUNDRED, BUT FOR FOUR HOURS I CAN DO 50 MEGAWATTS.
SO YOU DON'T SAY MY HSL IS A FEMALE MEGAWATTS, BUT YOU'RE, YOU'RE, YOU'RE TALKING YEAH, AND I THINK WHERE WE'RE TALKING, I THINK A LITTLE BIT PAST EACH OTHER IS THE DIFFERENCE BETWEEN LIKE WITH NONS, SPIND, ECRS AND EVERYTHING ELSE IS QUALIFICATION VERSUS REAL TIME.
AND THAT'S WHERE YOU TAKE INTO ACCOUNT FOR ALL THOSE IS IN REAL TIME.
SO, UH, YEAH, WE, WE CAN TALK OFFLINE A LITTLE BIT FURTHER TO MAKE SURE I GOT THAT ALL THE WAY, WAY, UH, YOU KNOW, UH, TO MAKE SURE.
'CAUSE I DON'T REALLY SEE A BIG DIFFERENCE BY ADDING THIS ONE THAT DOES THE SAME THING AS NONS SPEND DOES WITH A FOUR HOUR DURATION.
UH, AND I HAVE ONE QUESTION FOR, UH, FOR MICHELLE, JUST TO MAKE SURE I'M UNDERSTANDING, UH, A PIECE HERE.
AND MICHELLE, YOU WERE TALKING ABOUT THE R PIECE YES.
SO ARE, ARE YOU TALKING ABOUT ESRS, ARE YOU TALKING ABOUT ONLINE DRRS AS A WHOLE? BECAUSE I DON'T SEE A DIFFERENCE.
I'M TRYING TO UNDERSTAND HOW, IF YOU KNOW, YOU DON'T NECESSARILY SEE THE ESRS AND YOU MAY BE DEPLOYING RUCK BECAUSE YOU DON'T SEE THEM THERE, THEN YOU'RE NOT MOVING TOWARDS THE GOAL THAT THE LEGISLATURE ESTABLISHED IN TERMS OF REDUCING.
IS THAT NOT, SO IS THAT NOT SO FOR ONLINE DRRS, WHICH IS ALLOWED, WHETHER IT'S I THINK SR OR THERMAL, I THINK WE'RE, THAT WOULD BE THE SAME THING.
I THINK THAT'S WHY I'M TRYING TO SEE WHERE YOU WERE GOING WITH THAT TO MAKE SURE, UH, BECAUSE I THINK THAT ERCOT HAS TALKED ABOUT HOW THEY, THEY, UH, EVEN WHENEVER THEY WERE LOOKING AT 1310, AND THEY SAID, YOU KNOW, IF WE'RE DOING 50,000, THEY CAN SHOW HOW THAT REDUCES R SO I'LL LEAVE THAT TO THEM.
BUT I WAS TRYING TO SEE WHETHER YOU WERE JUST TALKING ABOUT EERS OR ESRS OR ONLINE IN GENERAL, WHICH I THINK HAS THE SAME OUTCOME AS HAVE AN ERS IN THERE.
YEAH, WE NEED TO SEE HOW THIS IS GONNA PLAY OUT MORE BEFORE I CAN TELL YOU.
THAT WAS A CONCERN WE HAD THOUGH.
UH, MIKE, MICHAEL JEWEL, JUST SPEAKING ON BEHALF OF JU AND ASSOCIATES, NOT ANY PARTICULAR CLIENT WITH REGARD TO THIS POINT, BUT FOLLOWING UP ON THE DISCUSSION BETWEEN BOB AND CHMS WITH REGARD TO ANCILLARY SERVICES, UH, PROTOCOL SECTION 3.8 0.51 DOES SAY THAT A QSE REPRESENTING AN ESR MAY UPDATE THE TER HSL AND OUR LSL FOR THE ESR IN REAL TIME TO REFLECT STATE CHARGE LIMITATIONS.
[00:40:01]
I THINK, UM, WE CAN SORT OF CLOSE OUT THE ESR PARTICIPATION ITEM AND START PIVOTING OVER TOWARDS A SDCS.BUT I GUESS BEFORE WE MAKE THAT TRANSITION, I THINK, UM, IT MIGHT BE HELPFUL IF SOMEONE FROM ERCOT COULD KIND OF TALK ABOUT HOW THEY PLAN TO ASSIMILATE, UM, YOU KNOW, THE ANSWERS TO THE FOUR QUESTIONS AND WHAT, WHAT WE MIGHT EXPECT TO SEE FROM Y'ALL'S END IN TERMS OF NEXT STEPS, IF THERE'S ANYTHING YOU CAN CAN SHARE THERE.
OBVIOUSLY WE HAVE BEEN, UH, DIGESTING A LOT OF THE, THE COMMENTS AS THEY'VE COME IN.
WE'VE REALLY BENEFITED FROM, FROM HEARING THE, THE DISCUSSION TODAY.
I THINK THERE'S, THERE'S, THERE'S THOUGHT THAT, THAT WE NEED TO PUT INTO IT TO ENSURE THAT, THAT WE ARE, UH, CONSISTENT AS WELL WITH, WITH OUR INTERPRETATION OF THE STATUTE.
AND IN LIGHT OF THAT, HAD TAKEN THE COMMENTS.
AND WITH THAT IN MIND, I'D ALSO LIKE TO SEE IF, IF MATTHEW ATH WANTS TO, TO CHIME IN, UH, AS WELL ON SOME OF THOSE STATUTORY ASPECTS.
BUT I'M HAPPY TO, TO COME BACK TO IT, UH, AFTER MATT'S DONE.
UM, BUT IF YOU'RE TRYING TO TALK, WE CAN'T HEAR YOU.
WE GIVE HIM A SEC TO FIX HIS AUDIO.
UH, CAN Y'ALL HEAR ME NOW? YEP, WE GOT YOU.
SOMETHING SWITCHED TO MY COMPUTER.
UM, YEAH, UH, WOULD JUST, UH, DEFINITELY AGREE WITH GORD.
UM, OUR GOAL WITH THESE, UH, SORT OF QUESTIONS FOR COMMENT WAS TO SOLICIT, UM, OKAY.
UM, IT WAS TO SOLICIT, UM, DISCUSSION ON SOME OF THESE, UH, KIND OF, UH, SECOND ORDER, UH, LEGAL AND, UH, POLICY QUESTIONS.
UM, IF ESRS WERE TO PARTICIPATE IN DRS.
AND I THINK THESE ARE SOME, SOME GREAT COMMENTS, UM, TO, UH, REFLECT ON.
SO I THINK ERCOT IS STILL DISCUSSING THIS INTERNALLY.
WE, UH, MAY MAKE SOME PROPOSED CHANGES, BUT, UH, IF WE DON'T, EITHER WAY, I THINK THAT THIS IS GOOD TO HAVE IN THE RECORD FOR THE, UH, FOR, FOR TAC AND THE, WELL, THIS IS A TECH WORKSHOP, BUT FOR THE ERCOT BOARD TO, UH, CONSIDER AS WELL, AND, AND ULTIMATELY, OF COURSE, THE PUBLIC UTILITY COMMISSION.
AND SO, UM, THAT BEING SAID, WE DO THINK, YOU KNOW, MAJOR POLICY QUESTIONS WILL, WILL PROBABLY BE ADDRESSED THROUGH THE PUCS, UM, UH, PROJECT, UH, 5, 5 7, 9 7, BUT, UM, AT LEAST WANTED TO, UH, BUILD THE RECORD HERE, UH, FOR NPRR 1310 PURPOSES.
SO LONG WAY OF SAYING WE'LL, WE'LL CONSIDER IT.
AND, UM, Y'ALL, Y'ALL MAY SEE, UH, UH, CHANGES FROM US SUBSEQUENTLY.
ANYTHING ELSE YOU NEEDED TO ADD TO CLEAN UP OR CLOSE OUT HERE? UH, I, I THINK, UH, I THINK MATT DID A GREAT JOB OF GIVING AN OVERVIEW OF KIND OF WHAT OUR, OUR NEXT STEPS ARE.
I THINK ONCE WE'VE, ONCE WE'VE HAD A, UH, A CHANCE TO REFLECT ON THIS FEEDBACK, IT IT, IT'S LIKELY THAT WE WILL SEE, UM, CHANGES TO, UH, PROPOSED REVISION, UH, LANGUAGE.
UM, AND THE, THE FORM THAT THAT TAKES, I THINK WILL BE, UH, A MATTER OF HOW WE BEST THINK TO ADDRESS THOSE, THOSE BROADER POLICY QUESTIONS.
UH, OBVIOUSLY SOME MAY BE OUTSIDE OF, UH, OF, OF KOTS SCOPE TO, TO DECIDE, BUT, UM, AS, AS MATT SAID, WE'RE LOOKING AT THE, WE'RE LOOKING AT THIS IN LIGHT OF THE STATUTORY LANGUAGE AND, UM, AND IN LIGHT OF THE FEEDBACK THAT WE'VE RECEIVED WITH THE, WITH THE AIM TO, UH, TO COME BACK WHERE NECESSARY WITH, UH, AMENDED LANGUAGE IN, UH, IN RESPONSE.
AND THANK YOU TO EVERYBODY WHO TOOK THE TIME TO PUT TOGETHER WRITTEN COMMENTS AND GET THOSE FILED.
I THINK THOSE WERE HELPFUL TO SEE.
[6. DRRS Demand Curve]
I THINK WE CAN MOVE ON TO ITEM SIX AND I'LL, UH, PASS THE BATON BACK TO CAITLIN TO GET THAT ONE KICKED OFF.UM, NOW WE ARE ONTO THE DEMAND CURVE.
I THINK ERCOT, YOU WERE ON SLIDE SEVEN.
UM, SO YEAH, I CAN, SORRY, WAS THERE QUESTION? OKAY.
[00:45:01]
YEAH.UM, WE CAN MOVE TO, UH, SLIDE EIGHT.
SO THIS SLIDE IS JUST, UH, RECAPPING, UM, WHAT WE HAVE IN THE CURRENT NPRS IN TERMS OF THE, UH, AS DEMAND CURVE FOR DRS.
SO, UM, WE USE SOME ILLUSTRATIVE VALUES.
UM, SO FOR EXAMPLE, LET'S SAY WE HAVE AN, UH, DRRS OPERATIONAL REQUIREMENT OF 1500 MEGAWATTS.
UM, THEN IN AS PER NPR 1309, UH, THE DEMAND CURVE IS, UH, LINEARLY SLOPING, ONE STARTING FROM $150, UH, DOWN TO, UH, $10 PER MEGAWATT PER HOUR.
UM, WHEREAS IN, UH, 1310, UM, IF WE HAVE, UH, THE OPERATIONAL RESERVE REQUIREMENT AND THEN ALSO THE, UH, RESOURCE CY REQUIREMENTS SAY OF, UH, 60,000 MEGAWATTS, THEN THE CURVE WOULD, UH, START AT ONE 50, GO DOWN TO 10, AND THEN STAY AT, UH, 10, UH, TILL THE DRS UH, RESOURCE ADEQUACY REQUIREMENT.
UM, SO UP NEXT, UH, ANDREW, UH, RMRS FROM IMM IS, UH, GOING TO SHOW, UH, A NEW, UH, PROPOSAL THAT WE HAVE.
UM, JUST WANTED TO POINT OUT THAT, UH, THE PROPOSAL AS IT STANDS, UH, APPLIES, UH, REALLY FOR, UH, 1309.
UH, WE HAVEN'T, UH, YET, UH, COME UP WITH ANY UPDATE FOR 1310.
UM, SO YEAH, UM, WITH THAT, UM, I WILL HAND HAND IT OVER TO, UH, ANDREW THROUGH TO GO THROUGH HIS, UH, SEPARATE, UH, PRESENTATION.
ANDREW, ARE YOU ONLINE? YEP, I AM ONLINE AND READY TO GO IF WE COULD GET THOSE SLIDES PULLED UP.
SO THIS WAS ACTUALLY A COLLABORATIVE EFFORT BETWEEN US AND ERCOT.
AND SO IF YOU'LL MOVE TO THE FIRST SLIDE, BASICALLY WE WERE PRETTY SUPPORTIVE OF NPRR 1309 IN GENERAL.
UH, WE HAVE SOME TECHNICAL IMPROVEMENTS THAT WE THINK WOULD BE NICE.
ONE OF THOSE IN PARTICULAR IS THAT THE DEMAND CURVE COULD USE A LITTLE ATTENTION.
RIGHT NOW, IT IS A LINEAR DEMAND CURVE LIKE ANUM JUST SHOWED.
UH, ULTIMATELY WE WOULD LIKE TO WORK WITH ERCOT TO REFORMULATE ALL OF THESE DEMAND CURVES TO MORE ACCURATELY REFLECT THE RELIABILITY VALUE OF EACH OF THESE PRODUCTS.
AND THE A-O-R-D-C SORT OF, UH, INTERFERES WITH MAKING THE PRICING MAKE SENSE.
THAT SAID, GIVEN THAT WE HAVE THE A-O-R-D-C, IT'S STILL GOING TO BE THE MOST EFFECTIVE AND, UH, LEAST OBSCURING OF MARKET PRICES TO INCORPORATE DRS INTO THE A-O-R-D-C UNTIL WE COME UP WITH SOMETHING ELSE.
AND SO WHAT WE'VE DONE HERE IS SORT OF EXTEND ON THE LOGIC WE PRODUCED ABOUT A YEAR AND A HALF AGO ON NPRR 1268 THIS TIME TO INCORPORATE DRRS INTO THE A-O-R-D-C.
SO IF WE COULD KEEP IT MOVING.
SO THERE WERE A FEW DIFFERENT ASSUMPTIONS THAT GO INTO THE ANALYSIS WE DID TO SEE THAT THIS, UH, CONCEPT THAT I'M ABOUT TO PRESENT WOULD WORK.
UH, ONE OF THOSE WAS THAT THE NONS BEEN PLAN SHOULD BE SCALED DOWN SOMEWHAT, NOT NECESSARILY ON A EQUAL BASIS WITH HOWEVER MUCH DRS WE INTRODUCE, BUT IF WE INTRODUCE DRS, WE'RE NOT EXPECTING TO HAVE THE EXACT SAME VOLUME OF NONS SPEND.
AND THEN THE NONS SPEND DURATION SHOULD ALSO BE REDUCED FROM FOUR HOURS.
WE HAVE A KIND OF LONG STANDING RECOMMENDATION THAT IT SHOULD BE REDUCED TO ONE HOUR.
FOR THE PURPOSE OF THIS ANALYSIS, WE SET IT AT TWO HOURS AND THEN WE SCALED THE NONS SPEND TO EITHER 40 OR 50% OF ITS CURRENT VOLUME AND THEN ADDED BACK ANOTHER 60% OF ITS CURRENT VOLUME AS DRS.
SO THE PLAN WE CAME UP WITH, WE'RE CALLING IT DISAGGREGATE AND BACKFILL.
SO IF WE CAN GO TO THE NEXT SLIDE, THE METHODOLOGY OUTLINED IN 1268, A LOT OF IT IS DEALING WITH HOW TO DIVVY UP THE FLAT PORTION OF THE A-O-R-D-C FOR DRS.
WE'RE NOT PLUGGING ANY OF IT INTO THE FLAT PORTION OF THE A-O-R-D-C.
[00:50:01]
THIS ANALYSIS REALLY LOOKS AT THE CURVED PORTION OF THE A RDC.AND THE IDEA IS TO INITIALLY DEVELOP FIVE CURVES WHERE YOU'RE GOING FROM THE MCL, WHICH IS AT 3000 MEGAWATTS, AND THEN TAKING EACH PRODUCT DOWN TO A PRESCRIBED MINIMUM PRICE.
UH, PART OF THE PURPOSE OF THIS IS TO CONCENTRATE THE QUANTITY FOR THE, THE MORE VALUABLE PRODUCTS IN THE MORE EXPENSIVE PART OF THE A-O-R-D-C.
SO IF YOU CAN IMAGINE THE A-O-R-D-C IS LIKE A CURVE, IF YOU HAVE A HIGHER MINIMUM PRICE ON SOMETHING LIKE REG UP, THAT MEANS THOSE MEGAWATTS ARE DISTRIBUTED ACROSS THE MORE EXPENSIVE PART OF THE A RDC RATHER THAN STRETCH DOWN ALL THE WAY ALONG THE ENTIRETY OF THE O-A-O-R-D-C.
SO WE HAVE THESE MINIMUM PRICES SET HERE.
AND TO BE BLUNT ABOUT IT, THESE PRICE POINTS ARE REALLY PICKED, KIND OF JUST BASED ON LOOKING AT THE CURVE AND SEEING HOW BIG OF A DIFFERENCE IT MAKES IN TERMS OF SETTING ONE AT ONE PLACE VERSUS ANOTHER PLACE.
SO THEY'RE SORT OF, UH, PRACTICALLY SELECTED RATHER THAN SOME FUNDAMENTAL, FUNDAMENTAL BASIS FOR SELECTING THEM.
SO IF WE COULD GO TO THE NEXT SLIDE, WE'LL START HAVING SOME PICTURES OF HOW THIS WORKS.
SO IF YOU CAN IMAGINE, WE INITIALLY KIND OF STRETCH OUT THE A SDC FOR EACH PRODUCT IN A WAY THAT, YOU KNOW, EXTENDS THROUGH THROUGH THE A-O-R-D-C.
IF WE THEN RE-AGGREGATE THEM, WE END UP WITH THESE HOLES ON THE A-O-R-D-C BECAUSE WE'VE, WE'VE SELECTED A MAXIMUM PRICE AND A MINIMUM PRICE, AND WE HAVE A CERTAIN NUMBER OF MEGAWATTS TO PLAY WITH.
YOU FILL ALL THOSE IN, AND SOME OF THESE MEGAWATTS ON THE A-O-R-D-C ARE STILL EMPTY.
AND SO IF WE'RE GOING TO STICK WITH THE A-O-R-D-C, WE HAVE TO FIGURE OUT HOW TO FILL THOSE MEGAWATTS AND HOW CAN WE FILL THOSE MEGAWATTS IN SUCH A WAY WHERE WE DON'T CHANGE THE RELATIVE VALUES OF EACH OF THESE PRODUCTS.
SO FOR EXAMPLE, WE COULD HAVE FILLED ALL OF THOSE EMPTY SPACES WITH NONS SPIN, BUT A LOT OF THOSE SPACES ARE REALLY EXPENSIVE.
AND WHAT THAT'S GONNA DO IS MAKE NONS SPIN MORE EXPENSIVE ON AVERAGE THAN EVERY OTHER PRODUCT.
SO WE NEEDED TO COME UP WITH A WAY TO FILL IN THOSE SPOTS WITHOUT MESSING UP THE RELATIVE VALUE OF EACH OF THESE PRODUCTS.
AND THAT'S WHERE THE BACKFILL CONCEPT COMES FROM.
SO IF WE COULD GO TO THE NEXT SLIDE.
THE IDEA HERE NOW IS IN THAT ORDER WE HAD EARLIER, SO REG UP R-S-E-C-R-S, NONS, SPIND, DRS, WE TAKE THE LAST POINT ON EACH OF THOSE CURVES AND BRING IT UP TO THE HIGHEST EMPTY VALUE.
AND YOU DO THIS GOING THROUGH ALL FIVE CURVES UNTIL YOU FILL OUT THE A-O-R-D-C WHERE THERE AREN'T ANY GAPS ANYMORE.
AND SO IF YOU DO ALL THAT, YOU SEE THAT THAT CHANGES THE SHAPE OF THESE CURVES A LITTLE BIT.
SO THE, THE SOLID LINE ON THE LEFT FIGURE IS THE INITIAL CURVE THAT WE PRODUCE THE DISAGGREGATE CURVE WITH THE MINIMUM PRICE.
AND THEN AS WE MOVE THE MINIMUM PRICE UP INTO THE, INTO THE HOLES ON THE A-O-R-D-C, WE'RE, WE'RE RESHAPING THESE CURVES TO LOOK LIKE THESE DOTTED LINES.
AND THEN IF YOU AGGREGATE IT AGAIN AFTER THAT, NOW YOU CAN SEE YOU HAVE AN A-O-R-D-C WHERE THERE AREN'T ANY GAPS IN IT.
AND THEN WE JUST HAVE TO DECIDE WHAT TO DO WITH THE TAIL BECAUSE WE'RE STILL FILLING IN THIS TAIL VOLUME WHEN THE A-O-R-D-C AND AS PLAN ISN'T BIG ENOUGH TO FILL THE WHOLE A-O-R-D-C.
I THINK ON THE NEXT SLIDE, WE HAVE A NICE ILLUSTRATION OF HOW THIS WORKS.
WE'VE ACTUALLY ATTACHED THIS SPREADSHEET, THIS WANG LEE FROM ERCOT PUT THIS TOGETHER, AND I THINK THERE'S A REALLY NICE ILLUSTRATION KIND OF ALGORITHMICALLY OF WHAT WE'RE DOING.
SO IF ANYONE WANTS, UM, A MORE THOROUGH ILLUSTRATION OF HOW THIS WORKS MECHANICALLY, WE ATTACHED THIS SPREADSHEET AND IT USES A DUMMY VERSION OF THE AS PLAN THAT IS REALLY EASY TO READ.
AND SO I THINK THAT'S A USEFUL ILLUSTRATION FOR PEOPLE WHO ARE INTO THAT SORT OF THING.
THEN ON THE NEXT SLIDE, WE'RE LEFT WITH WHAT TO DO WITH THE TAIL.
SO FROM OUR OFFICE, THE INITIAL THOUGHT WAS TO FILL IT WITH DRS, BUT THERE ARE SOME CONCERNS WITH THAT PARTICULARLY, UH, GIVEN THAT THE SUPPLY, THE NEW SUPPLY WE'RE GETTING FROM DRS IS NOT REALLY THAT MUCH.
UH, AND I WILL SAY, JUST TO KIND OF RE RESPOND TO SOME OF THE STUFF PEOPLE WERE TALKING ABOUT EARLIER, IF, IF THERE IS A INTEREST IN DRS POTENTIALLY BEING A GREATER THAN TWO THAN FOUR HOUR PRODUCT, THEN WE HAVE EVEN MORE OF A CONCERN ABOUT BILLING ALL OF THIS EXCESS A-O-R-D-C VOLUME WITH DRS BECAUSE WE COULD CREATE A SITUATION WHERE WE
[00:55:01]
HAVE A, A SUPPLY CONSTRAINT THAT DOESN'T REALLY MAKE SENSE.AND WHERE WE'RE GETTING ELEVATED DRS PRICES KIND OF REGULARLY, DEPENDING ON, YOU KNOW, HOW THIS GETS IMPLEMENTED.
UH, IF YOU THINK ABOUT IT, THE NEW SUPPLY WE'RE GETTING FROM DRS IS REALLY UNITS THAT CAN START WITHIN TWO HOURS THAT ARE NOT ALREADY TYPICALLY ONLINE AND PROVIDING ENERGY AND NONS SPIN AND THINGS LIKE THAT.
WHEN WE TRIED TO GET OUR HANDS ON THE MAGNITUDE OF THAT KIND OF INCREMENTAL CAPACITY, IT WAS MAYBE A GIGAWATT, MAYBE A GIGAWATT AND A HALF, YOU KNOW, IT COULD BE A LITTLE MORE.
WE FOUND, WE WERE TRYING TO WRAP OUR HEADS AROUND IT, WE FOUND SOME WEIRD DISPARITIES WITH OFFLINE NONS SPEND THAT SORT OF COMPLICATED THAT LOOK.
BUT IN ANY CASE, IT'S, IT'S REALLY NO MORE THAN WHAT WE'RE ALREADY GETTING FROM BATTERIES PROVIDING NONS SPEND.
AND SO IF YOU THINK ABOUT IT, WE SHORTEN NONS SPEND, WE MAKE IT TWO HOURS.
WE ALLOW BATTERIES TO PROVIDE THAT.
IN ALL LIKELIHOOD, ALL OR MOST OF THAT NONS SPIND IS GOING TO END UP PROVIDED BY BATTERIES.
NOW THAT IT'S A TWO HOUR PRODUCT, ESPECIALLY OVER THE NEXT YEAR WHERE WE'RE GONNA GET ANOTHER 8,000 MEGAWATTS OF BATTERIES, MOST OF WHICH HAVE AT LEAST TWO HOURS OF DURATION.
SO WE'LL HAVE ALL THIS CAPACITY THAT CAN PROVIDE TWO HOUR NONS SPIN.
WE'RE ALREADY GETTING 25% OF NONS SPIND FROM BATTERIES, EVEN WITH NONS SPIND AS A FOUR HOUR PRODUCT.
THEN WE HAVE DRS WHERE WE'RE GETTING MAYBE A THOUSAND EXTRA MEGAWATTS OF TWO HOUR START TIME RESOURCES.
AND IN MANY, MANY HOURS, THE TAIL OF THE A-O-R-D-C IS SEVERAL TIMES BIGGER THAN THE WHOLE DRS PLAN.
AND SO THIS IS A BIG VOLUME OF MEGAWATTS THAT NOW HAVE A, A SMALL BUT NON-ZERO PENALTY PRICE ASSOCIATED WITH THEM.
IT MAY JUST END UP MAKING MORE SENSE TO DIVIDE THIS CAPACITY BETWEEN DRS IN NONS SPENT, OR WE COULD STOP FILLING IN THIS EXCESS A-O-R-D-C CAPACITY ENTIRELY.
SO IF WE GO TO, I THINK I HAVE ONE OR TWO MORE SLIDES.
SO WE DO SUPPORT ALLOWING ESRS TO PROVIDE DRS ALONG THE SAME LINES AS WHAT ARE DESCRIBED IN 1310.
UH, NOT REALLY INTERESTED IN GETTING INTO THE KIND OF STATUTORY JOUSTING ABOUT THAT, BUT WE THINK IT WOULD MAKE SENSE FOR BATTERIES TO BE ALLOWED TO PROVIDE DRS TO THE EXTENT THAT THEY CAN PROVIDE IT FOR FOUR HOURS.
UH, WE ALSO THINK THIS IS A GOOD OPPORTUNITY TO RECONSIDER FILLING IN THE A-O-R-D-C BEYOND THE AS PLAN.
AT THIS POINT, WE'RE STILL TALKING ABOUT USING THE A-O-R-D-C, BUT IN THE INTERVALS WHERE THE AS PLAN IS SHORTER THAN 10,000 MEGAWATTS, WE THINK WE COULD CUT THE A-O-R-D-C OFF AT THE AS PLAN, AND THAT WOULD RESULT IN LESS SCREWY PRICING BETWEEN DRS AND THE REST OF THE AS SUITE.
UH, OTHERWISE WE'RE GOING TO NEED TO DISCUSS WHETHER WE SPLIT SOME OF THIS VOLUME BETWEEN DRS AND NONS SPIN.
AND THEN I THINK THIS ALL LEADS TO OUR LAST SLIDE, WHICH IS SOME, UH, THOUGHTS ON SHORTAGE PRICING GENERALLY.
UH, IF THIS METHODOLOGY SEEMS SORT OF JANKY AND ESOTERIC, THAT'S BECAUSE IT IS, UH, IT'S JUST REALLY TRICKY TO DEAL WITH THE A-O-R-D-C.
IT IS, UH, A, A VERY NONLINEAR FUNCTION AND THE AS PLAN MOVES AROUND ALL OVER THE PLACE AND THE RELATIONSHIPS BETWEEN THESE PRODUCTS AND THEIR VOLUMES MOVES AROUND ENOUGH THAT IT IS, UH, THERE'S NOT A STRAIGHTFORWARD MATHEMATICAL WAY TO DO THIS THAT DOESN'T HAVE KIND OF, UH, GOOFY ALGORITHMIC ASPECTS TO IT.
SO WHAT WE'D REALLY LIKE TO DO IS WORK WITH ERCOT TO REFORMULATE SHORTAGE PRICING IN GENERAL.
AND SO THAT'S SOMETHING THAT WE HAVE ON OUR PRIORITY LIST FOR 2026 TO GET THE BALL ROLLING ON THAT.
UH, IN THE MEANTIME, WE THINK THAT WHAT WE'VE PROPOSED HERE IS THE BEST WAY TO GET PRICING THAT AT LEAST PRESERVES THE RELATIVE VALUE BETWEEN ALL OF THESE PRODUCTS.
AND WE'LL BE ABLE TO FUNCTION WELL ENOUGH IN TERMS OF MARKET PERFORMANCE THAT IT WON'T BE A MISSION CRITICAL ISSUE, BUT THE PRICING WON'T BE AS ACCURATE OR REFLECTIVE OF EACH PRODUCT'S RELIABILITY VALUE AS IT WOULD BE IF WE CAN, UH, REFORMULATE SHORTAGE PRICING FROM A MORE KIND OF FUNDAMENTAL BASIS.
AND SO THAT IS MY PRESENTATION.
LOOKS LIKE WE ALREADY HAVE A COUPLE FOLKS IN THE QUEUE.
OH YEAH, WE HAVE A, WE ACTUALLY HAVE ANOTHER SLIDE.
I JUST WANNA ADD SOME WORDS OF THANKS REAL QUICK TO SOME FOLKS.
SO THIS WAS REALLY, THERE, THERE'S AN EXAMPLE TOO, RIGHT? ANDREW,
[01:00:02]
DO YOU WANNA GO THROUGH THE EXAMPLE OR THAT A ERCOT SPREADSHEET? THERE'S AN EXAMPLE SPREADSHEET POSTED ALSO, BUT GO AHEAD AND FINISH THIS SLIDE.UH, YEAH, SO THANKS ME AND DAVE REALLY CAME UP WITH THIS IDEA AND SO THANKS AGAIN TO DAVE MAGGIO FOR, UH, HELPING KIND GET THE BALL ROLLING ON THIS COLLABORATION.
AND THEN TWO ERCOT STAFF DID BASICALLY ALL OF THE WORK.
AND SO W LEE AND MATTHEW SCHMIDT WERE TWO ANALYSTS WHO HELPED PUT ALL THE NUMBERS TOGETHER AND EVERYTHING.
SO JUST WANTED TO GIVE SOME CREDIT TO THEM.
UH, WE CAN PULL UP THE EXAMPLE.
I DID ADDRESS THE EXAMPLE EARLIER, UH, IN THE SLIDE, BUT IF IT WOULD BE HELPFUL TO PULL IT UP, WE CAN GO AHEAD AND DO THAT.
YEAH, SO IF YOU GO THROUGH HERE, YOU CAN SEE EACH STEP, WHAT'S GOING ON.
WE ARE FILLING IN, WE'RE TAKING THE LAST MEGAWATT FROM THESE PRODUCTS IN ORDER REG UP RCCR.
SO IF WE LOOK AT COLUMN C, WE'LL SEE THAT THERE'S A, IF WE SCROLL DOWN, WE'LL SEE THAT THERE'S A VOLUME OF REG UP WITH HIGHLIGHTED LAST, AND WE SEE THAT'S AT PRICED AT TWO 50.
THAT'S, ITS, UH, NO, WE ALREADY WE'RE PASSING IT NOW.
SO THIS YELLOW ONE, SO YOU SEE HOW THAT'S PRICED AT TWO 50, WHICH IS ITS MINIMUM PRICE AND IT SAYS LAST, WE'RE GONNA TAKE THAT VALUE OF REG UP.
AND IF YOU GO UP TO COLUMN D, NOW YOU SEE THE EMPTY SPACE, THE, THE LAST SPACE THAT WAS EMPTY IN COLUMN C UH, YEAH, I'M NOT SURE HOW EFFECTIVE THIS IS GOING TO BE, SO I, I THINK IT'S A PRETTY STRAIGHTFORWARD, UH, UH, SHEET TO LOOK AT IF YOU PULL IT UP ON YOUR OWN.
I DON'T, I DON'T KNOW HOW EASILY I CAN EXPLAIN IT WITHOUT HAVING CONTROL OF THE SHEET.
THE SHEETS HELP ME, BUT PROBABLY 'CAUSE I CAN MOVE 'EM AROUND MYSELF.
LET'S GO TO THE QUEUE, UH, CYRUS.
YEAH, I WAS JUST CURIOUS IN THAT EXAMPLE, UM, ARE YOU CHANGING THE DURATION OF NONS SPIND FOR THE PURPOSES OF THIS EXAMPLE? IS IT, IS IT A TWO HOURS? IS IT A, HAVE YOU, IN OTHER WORDS, ARE YOU CHANGING HOW IT'S USED AS PART OF THIS EXAMPLE? YEAH, SO WHERE THE TWO HOUR DURATION FOR NONS SPIND COMES IN FOR THE MOST PART IS JUST EVALUATING THE SUPPLY KIND OF DYNAMICS FOR NONS SPIND VERSUS DRS.
IF WE, IF WE CURRENTLY GET 25% OF OUR, UH, NONS SPIND FROM ESRS AND IT'S A FOUR HOUR PRODUCT, THEN IF YOU CUT NONS SPEND TO 40 OR 50% OF ITS CURRENT VOLUME AND MAKE IT A TWO HOUR PRODUCT, THAT MATH BASICALLY WORKS OUT TO WHERE JUST WITH THE CURRENT SUPPLY OF ESRS PROVIDING NONS SPEND THAT WE HAVE, THEY WOULD BE ABLE TO PROVIDE MORE OR LESS ALL OF THE TWO HOUR NONS SPENT BECAUSE YOU'VE SHORTENED THE PLAN IN HALF OKAY.
THAT'S ALL THAT DURATION REQUIREMENT IS REALLY DOING HERE.
AND THEN IF YOU SAY THAT THE DRS REQUIREMENT'S FOUR HOURS, YOUR SUPPLY OF THAT DEPENDS ON BOTH HOW MUCH NEW THERMAL CAPACITY IS ABLE TO PROVIDE DRS THAT COULDN'T PROVIDE NONS SPEND, AND THEN HOW MUCH MORE ESR CAPACITY WOULD YOU BE LIKELY TO HAVE PROVIDING THAT COULD PROVIDE IT? OKAY.
OVER THE NEXT YEAR OR SO, GIVEN THAT WE CAN BASICALLY, NOW WE'VE KIND OF FULLY SUBSCRIBED TO NONS SPEND WITH ESRS, UH, 8,000 MEGAWATTS OF TWO HOUR BATTERIES COULD PROVIDE A REALLY BIG CHUNK OF THE, YOU KNOW, DRS PLAN.
RIGHT? I THINK I UNDERSTAND IT.
AND THEN, UM, THIS IS A QUESTION MORE FOR ER CUT OR OTHER MARKET PARTICIPANTS AND, AND AS ALWAYS, FORGIVE MY LACK OF KNOWLEDGE TO CHANGE THE DURATION REQUIREMENTS FOR NONS SPIN.
IS THAT SOMETHING THAT CAN JUST BE DONE IN THE, UM, ANCILLARY SERVICE METHODOLOGY, OR DOES IT REQUIRE A WHOLE PROTOCOL CHANGE? HEY, CYRUS, THIS IS DAVE MAGIO.
I CAN TAKE THAT THERE IS LANGUAGE SPECIFIC IN THE PROTOCOL AROUND DURATION.
SO I THINK WE, UH, I THINK WE WOULD HAVE TO DO IT THERE NOW AS JUST SOME OF THE GENERAL FOLLOW UP FROM THE RTC PLUS B TASK FORCE.
SO I HAD, I HAD SHARED IN, IN SOME OF THE MEETINGS AND DISCUSSION AT TAC A COUPLE OF WEEKS AGO REGARDING, UM, SOME OF THE ITEMS THAT WERE PART OF TASKFORCE DISCUSSIONS DURATION WAS PART,
[01:05:01]
IT WAS ONE OF THE THINGS LISTED THERE.I THINK IT'S EXPECTED TO HAPPEN AS PART OF THE CONVERSATIONS ON THE ANSI SERVICE METHODOLOGY.
UH, BUT IT WOULD, THERE IS PROTOCOL LANGUAGE THAT THAT SPECIFIES IT.
SO EVEN IF, IF, IF, UM, 1309 WENT FORWARD AT THE BOARD MEETING AND WAS, UM, YOU KNOW, APPROVED BY PUC AT SOME POINT, UM, WE WOULD STILL NEED TO ALSO MOVE ON PROTOCOL REVISIONS FOR NONS SPIN IF, IF EVERYONE KIND OF AGREED THAT IT MADE SENSE TO LOWER THE DURATION LIMIT, CORRECT.
IT'S, IT'S NOT CURRENTLY PART OF 1309 OR 1310, AND THERE, THERE WOULD BE SOME LANGUAGE THAT HAVE TO BE REVIEWED AND UPDATED.
LOOKS LIKE WE HAVE TREVOR IN THE QUEUE.
UH, JUST A, A QUICK QUESTION FOR ERCOT ON THE, UH, A-O-R-D-C TAIL AND, AND CHOPPING THAT OFF HAS, HAS ERCOT, UH, WELL, I JUST WOULD LIKE TO HEAR ERCOT POSITION ON THAT, AND IF THAT'S CHANGED AT ALL SINCE WE INITIALLY KIND OF SET UP THESE, THESE CURVES AND THE RTC TASK FORCE.
YEAH, I GUESS OUR, OUR VIEW, RIGHT? OH, SORRY, GO AHEAD.
NO, YOU, YOU, YOU CAN TAKE IT, DAVE.
I SHOULD ACTUALLY JUST PUT SOMETHING IN THE QUEUE INSTEAD OF JUST RESPONDING.
SO AS IT STANDS, UH, YOU KNOW, I THINK, UM, THE, THE THOUGHT IS TO, TO STILL HAVE THE TAIL, I THINK THAT WAS, YOU KNOW, STILL VERY INTENTIONAL.
I THINK, UM, THAT'S JUST SORT OF PART OF, UM, BEING IN ALIGNMENT WITH THE, THE A-O-R-D-C.
UM, AS ANDREW MENTIONED, YOU KNOW, PERHAPS THERE'S, UH, SOME DISCUSSION IN THE NOT TOO DISTANT FUTURE WHERE WE, WE TALK ABOUT HOW THE, THE DEMAND CURVES ARE FUNCTIONING AND WHETHER OR NOT THERE'S A, A, A REASON TO THINK OF IT DIFFERENTLY THAN TRYING TO DISAGGREGATE THE A-O-R-D-C, BUT TO THE DEGREE THAT THAT'S THE, THE PARADIGM WE'RE, WE'RE LIVING IN, I THINK HAVING THE TAIL STILL MAKES SENSE.
UH, NOW WHETHER WE WANT TO DO IT ALL WITH DRS VERSUS THE SPLIT, I, YOU KNOW, I THINK WE HAVE SOME FLEXIBILITY THERE, BUT THE EXPECTATION IS THAT WE WOULD STILL HAVE THE TAIL FOR NOW.
AND, UH, YEAH, LOOKING FORWARD TO TAKE AN OVERALL, I GUESS, UH, ON THE CURVES IN GENERAL, BUT, UM, HELPFUL TO UNDERSTAND WHERE WE'RE AT TODAY.
I DON'T SEE ANY OTHER QUESTIONS OR COMMENTS.
UM, WHAT ARE NEXT STEPS ON THIS? BECAUSE YOU, UH, SO WE DO NEED TO WRITE AND ERCOT NEED LANGUAGE, RIGHT? WE DO NEED TO WRITE FILE COMMENTS TO CHANGE THE LANGUAGE.
UH, WELL BEFORE DAVE LEAVES IS A RELATIVELY TIGHT TIMELINE.
I KNOW THAT ERCOT IS ON A PRETTY QUICK TIMELINE, SO I'LL DEFER TO THEM ABOUT IF THEY WANNA MOVE QUICKER.
I WOULD SAY THERE IS STILL A KIND OF DESIGN CONSIDERATION REGARDING ESR PARTICIPATION.
AND SO IF ESRS ARE NOT GOING TO BE ALLOWED TO PROVIDE DRS, THEN WE NEED TO MAKE A DECISION ABOUT HOW TO, UH, ALLOCATE THE VOLUME IN THE A-O-R-D-C TAIL.
AND SO THAT WOULD BE THE ONE THING THAT, YOU KNOW, WE, I DON'T, I DON'T THINK I'M IN A POSITION TO TAKE A POSI LIKE, TO DECIDE HOW WE DO THAT WITHOUT THE ESR PARTICIPATION QUESTION BEING RESOLVED FIRST.
SO I THINK THAT'S OUR POSITION.
WE CAN, MOST OF THE LANGUAGE IS GONNA GET WRITTEN UP BY ERCOT, AND SO AS FAR AS WE'RE CONCERNED, WE'RE GOOD TO GO.
AS SOON AS WE FIGURE OUT WHAT THE DEAL IS GOING TO BE WITH ESR, WE CAN MAKE A DECISION ON WHAT TO DO WITH THE TAIL.
THAT'S ALL FOR ME ON THAT, AND I CAN JUST COMPLIMENT WHAT, UH, WHAT ANDREW HAS SAID THERE.
YES, I THINK THERE, THERE IS AN EXERCISE TO, TO MOVE LANGUAGE INTO 1309.
UM, THERE ARE STILL TWO KIND OF OUTSTANDING ELEMENTS IN, IN OUR DISCUSSIONS ON DRS, AND THAT IS THE ER ESR PARTICIPATION MODEL, AS WELL AS THIS, THIS DEMAND CURVE BY, I THINK THIS IS A, UM, THIS IS A LIFT, BUT NOT A, UH, A HUGE ONE.
THIS IS PROBABLY A, A COUPLE OF, I'LL CALL IT, A COUPLE OF WEEKS OF, OF EFFORT TO MAKE SURE THAT WE HAVE EVERYTHING RIGHT IN TERMS OF GETTING THAT INTO, INTO THE LANGUAGE.
SO I DON'T THINK THAT THIS IS SOMETHING THAT, THAT TAKES US OFF OF OUR
[01:10:01]
TIMELINE.UM, BUT WE'LL WANT TO, AS, AS I SAID EARLIER IN THE MEETING, UH, TAKE BACK THAT INPUT ON, ON THE ESR PARTICIPATION, MAKE SURE THAT WE, UH, THAT WE UNDERSTAND HOW WE WANT TO MOVE FORWARD AND, AND THEN MOVE, MOVE, UH, FORWARD IN TANDEM ON THOSE ISSUES.
YEAH, I'M TRYING TO GET THIS IN THE RIGHT SEQUENCE.
SO I'M TRYING TO DECIDE WHETHER WE NEED TO HAVE 1309 VOTED ON WITH, YOU KNOW, TO DECIDE THE ESR ISSUE.
AND THEN GORDON AND ERCOT AND THE IMM CAN PUT THEIR COMMENTS ON TOP OF WHAT IS DECIDED ON 1309.
AND, AND THEN GORDON HAS LAID OUT A PATH THAT ERCOT IS GONNA PUT IN WHATEVER THEY WANTED TO DO AND WITH THEIR COMMENTS, AND THEN BRING THAT ALL TOGETHER FOR A VOTE, WHICH I THINK COULD BRING SOME OTHER COMPLICATIONS DEPENDING ON WHICH WAY THEY GO.
I DON'T KNOW WHICH WAY THEY WOULD GO.
UH, BUT, UH, AND THAT'S JUST MY QUESTION ON WHERE WE, HOW DO WE MOVE THIS FORWARD THEN? DO WE VOTE ON 1309, YOU KNOW, WEDNESDAY AND SEE WHERE THAT GOES? AND THEN GORDON, YOU CAN DO, AND, UH, ANDREW CAN DO THE A SDC OR, OR WHAT'S THE BEST PATH FORWARD? I, I SEE GORDON IN THE QUEUE AGAIN.
SO LET'S GO BACK TO GORDON, UH, AND AND APPRECIATE THE, THE COMMENT, BOB, I THINK AT THIS POINT 1309, WITH THE CURRENT LINEAR DEMAND CURVE PROPOSAL IS INCOMPLETE AS A DRS PROPOSAL.
UM, WE WOULD WE NOT BE COMFORTABLE WITH THAT GOING FORWARD TO, UH, THIS WEDNESDAY'S PRS FOR A VOTE? UH, I, I THINK THAT WE CAN CERTAINLY WITH THE REMAINING PRS MEETINGS, STILL ACHIEVE OUR TIMELINE FOR, UH, GETTING TO THE JUNE BOARD WITH THE OPPORTUNITY TO, UH, MOVE THE DEMAND CURVE LANGUAGE INTO 1309.
I THINK THAT IS FROM A, UH, FROM A, PURELY FROM MECHANICS AND AND DESIGN PERSPECTIVE OF DRS, UM, A, A REALLY CRITICAL PART OF ENSURING THAT DESIGN COMPLETENESS.
UM, BUT AS I SAY, I, I THINK THAT THE, THE LIFT THAT'S REQUIRED TO DO THAT IS STILL GONNA KEEP US, UH, ON TRACK FOR THE REMAINING PRS MEETINGS TO GET TO ATTACK, TO GET IT TO THE JUNE BOARD.
UH, SO I, I WOULD SUGGEST THAT VOTING ON 1309, ABSENT THAT DEMAND CURVE LANGUAGE IS, IS PREMATURE AT THIS TIME.
CAN, CAN I FOLLOW UP? YEAH, OF COURSE.
WELL, THE, MY ONLY QUESTION, GORDON, IS I THOUGHT I HEARD YOU SAY THE DEMAND CURVE WOULD BE DIFFERENT DEPENDING ON WHETHER ESRS ARE IN OR OUT.
SO, AND THAT YOU SAID THAT WOULD HAVE TO BE RESOLVED FIRST.
SO WITHOUT A VOTE, I'M NOT SURE HOW THAT'S RESOLVED.
DOES THAT MAKE SENSE OR KAITLYN, DO YOU HAVE HAVE A, A, A PROCESS FOR THAT POTENTIALLY IN MIND? UM, I, YOU KNOW, I THINK IT'S WHAT STAKEHOLDERS WANT TO, TO VOTE ON, RIGHT? YEAH.
I JUST MAKE SURE, SO SOMEBODY BRINGS SOMETHING TO A VOTE FOR PRS OR, OR CUT CAN SAY WHAT THEY'VE SAID, WHICH IS WE DON'T WANT THE DEMAND CURVE LANGUAGE TO, TO GO FORWARD, BUT I, I THINK YEAH.
GO THROUGH A STAKEHOLDER PROCESS.
IT ALMOST SOUNDS LIKE WE'RE A CHICKEN AND AN EGG ISSUE.
I JUST WANNA MAKE SURE WE CAN GET PAST IT.
I THINK ONE OF THE THINGS THAT, THAT WE CAN DO IN THE INTERIM IS, UM, YOU KNOW, THERE CAN BE TWO OPTIONS OBVIOUSLY IN TERMS OF WHAT THE CURVE WOULD LOOK LIKE IN, UH, WITH ESRS N AND WHAT THE CURVE WOULD LOOK LIKE WITH ESRS NOT IN, UM, BECAUSE I THINK WHAT'S ALSO INTERESTING IS IF YOU READ THE LANGUAGE THAT'S IN 1309, EVEN THAT HAS OPTIONALITY BAKED INTO IT, RIGHT? SO IT'S, IT'S THE OPTION TO TURN ON THE ESR,
[01:15:01]
THAT'S, THAT'S THE PRESENT, UM, LANGUAGE THAT'S IN 1310, IS THAT IT DOESN'T NECESSARILY MEAN THAT IT'S THERE ON DAY ONE.IT MEANS THAT IT COULD BE TURNED ON IN THE FUTURE.
SO I THINK WHAT WE, WHAT WE CAN DEFINITELY CRAFT, AT LEAST FOR NOW, IS, IS A VERSION THAT SAYS, OKAY, IF IF THEY ARE INCLUDED, IT WOULD LOOK LIKE THIS.
IF THEY'RE NOT INCLUDED, IT WOULD LOOK LIKE THAT.
SO, SO I THINK I'D, I'D BE CLEAR ON THE FACT THAT, UM, THAT THE PRESENT LANGUAGE DOES NOT, IT GIVES THE OPTION TO TURN ON THE ESRS.
AND, AND ONE OF THE THINGS WE WANTED TO BE CLEAR ON IS THAT IF YOU DO DO TURN THEM ON THE PATH IS CLEAR ON HOW THAT WOULD BE WITHOUT REQUIRING ADDITIONAL FOLLOW UP.
SO I, I, I JUST SORT OF CAUTIONED ON THAT AND, AND I THINK GORD'S SORT OF POINT IS, IS, IS WHERE WE ARE RIGHT NOW, IS I THINK WE CAN, WE CAN WORK WITH THAT AND FIGURE OUT HOW WE WANT TO DO THAT GOING FORWARD.
UH, SHANE, THOMAS, MICHELLE, UM, MY THOUGHTS ON, ON THE, ON HOW TO MOVE FORWARD WITH THIS ARE THAT THE DEMAND CURVE IS OBVIOUSLY EXTREMELY IMPORTANT.
AND I THINK THAT A LOT OF PEOPLE AGREE THAT THE KIND OF ALL OF THE ASCS AND ODC NEED TO BE, UM, TALKED ABOUT MORE HOLISTICALLY AND KIND OF TRYING TO, UH, KIND OF WIGGLE THAT IN AT THIS POINT IN TIME OR REALLY WORRYING ABOUT IT IS JUST SOMETHING THAT'S GONNA BE HASHED OUT AGAIN BEFORE THIS IS GOING LIVE.
AND SO I'M LESS KIND OF WORRIED ABOUT WHAT THE DEMAND CURVE LOOKS LIKE AND THIS SPECIFIC PROPOSAL.
I THINK THAT THE BIG QUESTIONS ARE WE NEED TO HAVE IMPLEMENTED AND, UH, FIGURED OUT BEFORE THIS JUNE BOARD INCLUDING LIKE THE ESR PARTICIPATION LEVEL AND WHAT THAT'S GONNA LOOK LIKE.
UM, SO I WOULD THINK THAT IT'D BE BETTER TO SPEND OUR TIME KIND OF GETTING VERSIONS OF THAT UP FOR A VOTE WHERE WE CAN HAVE THAT DISCUSSION AND VOTE ON A FINAL CONCEPT OF HOW E SRS ARE ALLOWED TO BE IN THIS PROGRAM AND HOW THEY'RE QUALIFIED.
AND THEN KIND OF PLAN TO HAVE A, A MORE HOLISTIC DEMAND CURVE DISCUSSION, UM, AS PART OF THE ENTIRE SUITE OF ANCILLARY SERVICES AS WE HAVE MORE AND MORE, MORE EXPERIENCE WITH RTC AND HOW THAT ALL INTERPLAYS.
UM, I'M ALSO HESITANT TO KIND OF SAY LIKE, WELL, IF THEY DON'T, YOU KNOW, WE'RE LOOKING AT WHAT THE VALUE OF THE SERVICE IS AND HAVING THAT CONVERSATION AS WELL.
IT'S, YOU KNOW, ONE VALUE POTENTIALLY IF THEY HAVE ESRS PARTICIPATE AT ONE LEVEL TO ANOTHER, THEY HAVE IT AT A DIFFERENT LEVEL.
YOU KNOW, THEY'RE KIND OF ALSO SAYING, WELL, NONS SPEND HAS A TWO HOUR DURATION INSTEAD OF FOUR HOUR DURATION, THEN MAYBE WE NEED TO REDRAW THE, IT'S KIND OF YOU'RE DRAWING THE DE CURVE TRYING TO CREATE AN OUTCOME.
AND THAT'S NOT REALLY THE BEST WAY.
DO WE SHOULD BE TRYING TO LET THE MARKET SOLVE AND DESIGN THE, THE SYSTEM SO THAT THE VALUE OF THE SERVICES ARE PRESERVED? UH, WELL, I'M, I'M GONNA RESPOND TO THE DURATION COMMENT.
I, I THINK MY UNDERSTANDING IS THAT IN ANY EVENT, ERCOT IS INTENDING TO REDUCE THE NONS SPENDER RATE TO TWO HOURS UPON IMPLEMENTATION OF DRS.
AND SO I DON'T THINK THAT'S REALLY A DESIGN PARAMETER THAT IS BEING DEBATED.
I THEY, I FEEL LIKE THEY SAID THAT WHEN WE WERE FIRST, WHEN WE FIRST WENT DOWN THE FOUR HOUR APPROVAL THAT THEY HAD SAID, WELL, ONCE DRS IS HERE, WE COULD PROBABLY LOWER THAT.
UM, SO I WOULD, I WOULD AGREE WITH THAT SENTIMENT.
I DON'T, THAT'S NOT IN THIS PROPOSAL, RIGHT? TO, IT'S PART OF THE, BECAUSE THAT HAS TO BE IN PROTOCOL LANGUAGE, I THINK, TO REDUCE THAT DURATION REQUIREMENT.
UM, BUT YES, I THINK IT'S SOMETHING, YES, WE, WE JUST HAD THAT DISCUSSION.
IT'S NOT PART OF THIS, SO IT'S NOT, IT'S NOT, BUT GO AHEAD, KAYLA.
WE'RE TALKING ABOUT A FEW DIFFERENT THINGS.
UM, SHANE, CAN I JUST GET CLARITY ON, ON WHAT YOU WERE TRYING TO SAY? I THINK YOU WERE SAYING WE SHOULD FOCUS ON THE ESR PARTICIPATION IN 1309 AND THEN DO THE DEMAND CURVE LATER SO THAT THEY'RE MORE HOLISTICALLY DONE WITH THE FULL YEAH, I THINK THAT'S
[01:20:01]
RIGHT AND, AND WE HAVE MORE TIME TO DO THAT BECAUSE I, WHEN THEY, WELL, IT DEPENDS ON HOW THEY DESIGN THE SYSTEM, BUT I WOULD EXPECT IT TO BE DESIGNED THE SAME WAY THAT THE CURRENT SYSTEM IS, AND THAT THAT'S KIND OF AN INPUT INTO THERE WHERE IT'S PRETTY EASILY, IT'S PRETTY EASY TO CHANGE THOSE WITHOUT HAVING TO GO THROUGH A FULL, YOU KNOW, FULLY BREAKING DOWN THE, THE, THE MMS SYSTEM OR THINGS LIKE THAT.SO YOU'RE SAYING DON'T EVEN FOCUS ON CHANGING THE DEMAND CURVE HERE UNTIL LATER? YEAH, I THINK THERE'S VALUE IN THE DISCUSSION FOR FIGURING OUT, BUT THAT IT'S GONNA BE, WE'RE GONNA BE KIND OF, I THINK I WOULD EXPECT US TO BE TALKING ABOUT ALL THESE THINGS AS PART OF THE, UM, AS METHODOLOGY.
I THINK WE'RE GONNA BE CHANGING THE OTHER CURVES TOO.
SO, AND ESPECIALLY WITH THE RELIABILITY STANDARD, IT'S ALL GONNA BE KIND OF UP IN THE MIX.
SO I WOULD EXPECT THIS TO COME UP A FEW TIMES IN THE NEXT, BEFORE THIS IS LIVE.
AND THEN KEITH, I KNOW YOU WANNA RESPOND TO SHANE, BUT I THINK SOMETHING YOU SAID, KEITH, WAS THAT I THINK WHAT ANDREW WAS TELLING US IS THE WAY WE HAVE THE DEMAND CURVE HERE IS BASED ON, YOU KNOW, IT'S SORT OF DEPENDENT ON ESR PARTICIPATION OR NOT.
AND I, I THINK YOU WERE MAYBE SAYING IT DOESN'T HAVE TO BE BECAUSE OF THE OPTIONALITY IN THE ESR PARTICIPATION LANGUAGE.
IS THAT CORRECT? YEAH, JUST TO REITERATE FOR FOLKS THAT, YOU KNOW, WHILE WE, WHILE WE'VE TALKED ABOUT THE LANGUAGE ON 1310, AND I THINK THAT THE THOUGHT WAS TO, TO MOVE, AS I REMEMBER, THE JOINT COMMENTERS, UH, PROPOSAL WAS TO JUST MOVE THAT LANGUAGE INTO 1309.
BUT JUST TO REFLECT ON THE POINT THAT THE INTENT OF THE LANGUAGE IN 1310 IS TO NOT, IS TO ALLOW THE OPTIONALITY TO HAVE ESR PARTICIPATION, NOT TO REQUIRE ESR PARTICIPATION.
AND SO THERE'S A, THERE'S A DIFFERENT ELEMENT THERE.
IF, IF YOU RECALL OUR POINT WAS TO ALLOW THE OPTION FOR THE PUC AT SOME, AT SOME DATE, UM, AND TIME TO, TO DETERMINE WHETHER OR NOT THEY WANT TO ALLOW ESR PARTICIPATION.
SO THAT'S, THAT'S AN IMPORTANT DISTINCTION AND OKAY.
AND SO WE, WE TALK ABOUT THE, THE CURVE.
I, I THINK OUR VIEW IS THAT IT NEEDS A PATH TO PARTICIPATION RATHER THAN SOME FUTURE MODIFICATIONS.
SO I THINK THAT'S A CLARIFICATION ON, ON THAT POINT.
AND SO I, I STILL WANNA MAKE ANOTHER POINT, BUT I WANNA SEE IF THERE'S ANY QUESTIONS ON THAT.
CAN WE LET ANDREW RESPOND TO THAT OR JUST TO SEE IF HE AGREES WITH THAT? UH, WELL,
LIKE WE COULD JUST WRITE THIS TO WHERE, IN EITHER CASE WE SPLIT UP THE A-O-R-D-C TAIL BETWEEN NONS, SPIND AND DRS.
I THINK THAT THE DOWNSIDES IN TERMS OF PRICING ARE MAINLY IF WE HAVE TOO MUCH VOLUME ASSIGNED TO D-R-S-D-R-S AND THEN LIMIT, UH, ESR PARTICIPATION.
AND SO THAT TO ME IS THE MOST LIKELY TO RESULT IN SCREWY PRICING.
AND WHAT DO I MEAN BY SCREWY PRICING? THE PRICE WILL PROBABLY BE PRETTY LOW MOST OF THE TIME, BUT IT WILL ALWAYS BE THE HIGHEST AS PRICE IN SITUATIONS WHERE WE'RE NOT EXPERIENCING ANY ACTUAL SHORTAGES.
SO IT WILL BE LIKE WE HAVE WITH NON SPEND CURRENTLY, WHERE BASICALLY AS A CONSEQUENCE OF THE DURATION CONSTRAINT AND THE DEMAND CURVE, WE ARE CONSTANTLY PRICING NONS SPIN AT SOMETHING LESS THAN A DOLLAR.
SO IT'S NOT VERY EXPENSIVE, BUT IT'S FOUR TIMES MORE EXPENSIVE THAN ECRS AND RS AND WHAT WE WOULD EXPECT, OR EIGHT TIMES EXPENSIVE AS RRS, WE WOULD, WE WOULD KIND OF EXPECT THAT TO PERSIST ONLY.
NOW WHAT WE WOULD HAVE IS SOMETHING LIKE, IT'S TWICE AS HIGH AS NONS SPIND, FOUR TIMES AS HIGH AS ECRS, EIGHT TIMES AS HIGH AS RS.
IF WE SPLIT UP THE VOLUME BETWEEN NON SPIN DRS, I THINK THAT ASPECT OF THE PRICING IS LESS LIKELY TO BE SO COMMON.
AND SO THAT IS ONE WAY WE COULD JUST DO THIS AND THEN KIND OF HAVE IT, HAVE IT IN THE BOOKS FOR WHATEVER HAPPENS WITH BATTERIES.
AND, AND, YOU KNOW, AS FAR AS THE, YOU KNOW, WAITING UNTIL WE REDO ALL THIS, HAVING THAT LINEAR DEMAND CURVE IN THE APPROVED VERSION IS WOULD BE THE, THE ACTUAL WORST CASE SCENARIO.
LIKE, I'M NOT CONFIDENT THAT WE ARE NECESSARILY GOING TO HAVE ALL OF THESE DEMAND CURVES WORKED OUT BEFORE DRS GOES LIVE.
I ALSO DON'T THINK IT'S TOTALLY NECESSARY FOR THEM TO ALL BE WORKED OUT FOR DRS GOES LIVE, BUT I DO THINK WE NEED SOMETHING MORE LIKE
[01:25:01]
WHAT WE'VE PRESENTED HERE THAN THIS LINEAR DEMAND CURVE THAT IS VERY FREQUENTLY GOING TO MAKE DRS MORE EXPENSIVE THAN SEVERAL OTHER PRODUCTS, AT LEAST ECRS AND NONS SPEND.AND WHERE NOW DRS IS PRICING THE HIGHEST BETWEEN ECRS AND NONS SPEND BETWEEN THOSE THREE, IT'S JUST GOING TO BE REALLY SCREWY AND IT, IT SHOULD BE FIXED BEFORE DRS GETS IMPLEMENTED AT THE LEAST.
AND WE'VE PRESENTED A PRETTY EASY WAY TO DO IT THAT I DON'T THINK NEEDS A LOT OF STAKEHOLDER ATTENTION.
LIKE THIS IS NOT A, THERE IS NOT A LOT ABOUT OUR PROPOSAL THAT WOULD PRODUCE OUTCOMES THAT WOULD SURPRISE ANYBODY OR THAT ANYBODY SHOULD BE CONCERNED ABOUT IT.
IT HONESTLY SHOULD BE MORE OF A RUBBER STAMP.
UM, KEITH, YOU HAD MORE TO YOUR COMMENT, CORRECT? I DID.
AND, OKAY, DO YOU WANNA GO AHEAD.
THIS KIND GETS TO SHANE'S ARGUMENT.
UM, SO A FOLLOW FOLLOW UP ON, ON HIS POINT, I THINK, I THINK GORD JUST EMPHASIZED THE POINT THAT GORD SAID EARLIER HAS TO DO WITH THE FACT THAT WE, THERE'S SORT OF TWO PIECES TO THIS DISCUSSION.
ONE IS, OKAY, WE NEED TO ADDRESS THE CURVES, THE DEMAND CURVES, AND THAT'S SOMETHING THAT WE ARE FOCUSING ON, AS ANDREW WAS JUST TALKING ABOUT.
UH, WE THINK IT'S IMPORTANT, IT NEEDS TO BE MODIFIED IN OUR VIEW BEFORE ANY, ANY APPROVAL ON 1309.
IT NEEDS OBS OBVIOUSLY 1309, UM, IF, IF, IF THE R WERE TO BE MOVED, THERE IS THE SORT OF SECOND PIECE, UH, IN, IN TERMS OF THIS DISCUSSION.
AS GORD MENTIONED EARLIER, WE, WE DID RECEIVE THE COMMENTS ON FRIDAY.
WE HAVE BEEN REVIEWING THEM OVER THE WEEKEND, AND OBVIOUSLY THERE WERE COMMENTS, UH, THIS MORNING, BUT WE DON'T HAVE A POSITION AT THIS POINT.
AND I'M NOT TO SAY THAT WE WOULD HAVE A POSITION BY WEDNESDAY.
UH, BUT WOULD WE HAVE A POSITION PERHAPS, UH, BY, YOU KNOW, GIVEN THE PROCESS BY THE NEXT PRS, IT'S QUITE POSSIBLE, UH, IN THE APRIL WE MIGHT HAVE BOTH THE CURVES AND OUR POSITION ON THE ESR.
SO I THINK, I THINK OUR VIEW IS THAT THE PROCESS ALLOWS FOR ENOUGH TIME TO ADDRESS THE TWO OUTSTANDING ISSUES AS WE SEE THEM.
AND I DON'T THINK WE NEED TO MAKE ANY PREMATURE ITEMS OR, OR VOTES AT THE, AT THE MEETING ON, ON, UM, ON WEDNESDAY.
SO I THINK OUR VIEW IS WE HAVE TIME TO ADDRESS BOTH OF THESE THINGS AND HAVE, UH, THE VERSIONS OF THE CURVE READY TO GO, UH, AND TO, UH, CONSIDER WHAT OUR VIEWS ARE ON, YOU KNOW, GIVEN THE COMMENTS WE RECEIVED, WHAT THAT MEANS AND HOW THAT APPLIES.
SO I THINK WE'RE, WE'RE ON PATH AND, AND TRACK AND, AND I THINK FROM OUR PERSPECTIVE, GETTING 1309 TO THE JUNE BOARD IS THE ULTIMATE OBJECTIVE.
UM, AND I, I DON'T KNOW THAT WE HAVE TO HAVE, YOU KNOW, A MULTIPLE SEQUENCE OF VOTES TO DO THAT.
I THINK WE CAN, WE CAN HAVE THE PACKAGE READY, UM, IN TIME AND IN PROCESS TO GET IT TO THE JUNE BOARD.
OKAY, LET'S GO TO THE QUEUE, BOB.
YEAH, JUST REAL QUICKLY, I WANNA TALK ABOUT SOMETHING THAT, THAT KEITH BROUGHT UP, UH, ABOUT THE LANGUAGE AND WHAT OUR, THE JOINT COMMENTER'S COMMENTS MEANT.
UH, THE JOINT COMMENTER'S COMMENTS BROUGHT OVER THE LANGUAGE FROM 1310 FOR THE IMPLEMENTATION OF ESRS INTO DRRS.
THE FLAG FOR BRINGING IT IN AT A LATER DATE WAS BASED ON WHEN THE, THE FACTOR WAS PUT INTO PLACE THAT DIDN'T COME OVER, AND THEREFORE R 13, OH, WELL, I SPEAK FOR, FOR MYSELF, IF CAITLYN HAS A DIFFERENT, SHE COULD JUMP IN.
FROM MY PERSPECTIVE, IT IS NOT A TURN ON AT A LATER DATE.
IT IS UPON IMPLEMENTATION OF DRRS THAT ERS IS INVOLVED IN HERE.
SO I JUST WANTED TO CLARIFY THAT, THAT, THAT, THAT DIDN'T COME OVER.
THAT WAS PART OF 1310, UH, WHILE THE LANGUAGE CAME OVER, THE LANGUAGE CAME OVER FOR IMPLEMENTATION, NOT A TURN ON TURN OFF.
SO I JUST WANTED TO CLARIFY THAT FROM A JOINT COMMENTER'S, UH, COMMENTS AND ON THE, ON THE OTHER, I MEAN, IT, IT'S OKAY.
I MEAN, WE CAN, WE COULD DO THIS LATER AND ERCOT
[01:30:01]
CAN DO TWO SETS OF, YOU KNOW, OPTIONS AND EVERYTHING ELSE AND VOTE ON THAT LATER.OR IT COULD BE APPROVED AT PRS AND YOU COULD PUT IN WHICHEVER, WHICHEVER WAS APPROVED AT PRS BEFORE TAX.
I MEAN, WE'VE DONE BOTH OF THOSE BEFORE.
SO HOWEVER IS THE BEST WAY TO GET THERE IS THE BEST WAY TO GET THERE.
BUT I JUST WANTED TO CLARIFY OUR JOINT COMMENTERS COMMENTS.
YES, CYRUS, I, I WAS GONNA MAKE IN YOUR OFFICE NOW.
UM, HOPEFULLY YOU CAN HEAR ME.
I WAS GONNA MAKE ACTUALLY THE SAME POINT THAT BOB MADE THAT, UM, THAT JOINT COMMENTERS, AND I THINK THE SIERRA CLUB SUPPORTS THOSE COMMENTS IS THE IDEA IS TO IMPLEMENT ESR, IT'S NOT TO HAVE IT AT A LATER DATE.
I THINK THAT WILL JUST CREATE MORE CONFUSION.
UM, SO I THINK THAT ISSUE OF SHOULD ERS BE IN 1309 FROM THE BEGINNING NEEDS TO BE DECIDED.
AND IF WE CAN DECIDE THAT PART ON WEDNESDAY, OR AT LEAST SEE IF THERE'S STAKEHOLDER SUPPORT FOR THAT, EVEN IF WE DON'T MOVE 1309 FORWARD YET, I THINK HAVING THAT DISCUSSION IS GONNA BE REALLY IMPORTANT ON WEDNESDAY.
AND THEN WE CAN, YOU KNOW, EITHER DEAL WITH THE DEMAND CURVE, UH, YOU KNOW, AT A LATER, YOU KNOW, WE COULD DEAL WITH A LATER, LATER TIME AND LEAVE IT TABLED, BUT AT LEAST HAVING THAT DISCUSSION AND SEEING WHERE STAKEHOLDERS ARE, I THINK IS IMPORTANT.
SIMPLY INCLUDING THE OPTIONALITY FOR A LATER DATE, I THINK WILL JUST CAUSE MORE CONFUSION.
SO I THINK WE SHOULD, YOU KNOW, I THINK WE NEED TO DECIDE THAT ERS ARE PART OF DRS FROM THE BEGINNING AS I THINK THE, THE LEGISLATURE INTENDED.
GORD, DID YOU WANNA RESPOND TO CYRUS? YEAH, THAT HELPFUL AND, AND I THINK IT, IT, IT TIES INTO, TO WHAT BOB HAD TO SAY AS WELL, THE PURPOSE OF INCLUDING BOTH ESRS AND THE RELEASE FACTOR IN 1310 WAS A RECOGNITION THAT THERE ARE TWO POLICY DECISIONS TO BE MADE, UH, THAT ARE, ARE TEED UP THROUGH, UH, THROUGH 1310 IN THAT, IN THAT FASHION.
AND THAT, UH, I, I DO NOT BELIEVE THAT THE, IN THE COMMENTS THAT WE HAVE SEEN SUBMITTED OR IN, IN ANY OF THE DISCUSSIONS OR, OR POLICY DISCUSSION OUTSIDE OF THE STAKEHOLDER PROCESS THAT THE ESR QUESTION HAD IN TERMS OF PARTICIPATION UPON IMPLEMENTATION HAS BEEN SETTLED.
SO I, I WOULD SAY THAT THAT IS STILL AN OUTSTANDING ISSUE AND THE PRESUMPTION OF MOVING IT INTO 1309 AND SETTLING THAT, THAT QUESTION THROUGH, UH, THROUGH THE N-P-R-R-I, AGAIN, I THINK IS, IS, IS PREMATURE AND A DEPARTURE FROM, UH, CERTAINLY WHERE ERCOT MIND WAS WHEN WE, UH, WHEN WE COMBINED THOSE POLICY DISCUSSIONS INTO THE SINGLE NPRR FOR, UH, FOR 1310.
IT DOESN'T MEAN THAT THOSE POLICY DISCUSSIONS HAVE TO REMAIN TIED TOGETHER IN 1310.
UM, BUT I THINK THAT IN THE, THE, THE SPIRIT OF CONTINUITY AROUND THAT, UH, THAT DISCUSSION AND, AND RECOGNITION OF THE, THE NEED FOR A, UH, A, A POLICY DECISION REMAINS, UH, WHETHER IT'S IN MOVED INTO 1309 REMAINS IN 1310 IS A SEPARATE NPRR THAT WE WOULD, UM, WE STILL NEED TO SEE RESOLUTION OF, OF THAT QUESTION AND TO, TO TAKE IT UP, UH, FOR A VOTE ON, UH, ON WEDNESDAY, I THINK IS, IS PUTTING THINGS OUTTA SEQUENCE.
AND IS THAT, THAT'S A POLICY DECISION YOU NEED OR CAP SALES YOU NEED DIRECTION FROM THE COMMISSION ON I, I, I BELIEVE THAT CERTAINLY HAVING PARTICIPATED IN AS MUCH OF THE DRS CONVERSATIONS THAT WE, THAT WE HAVE HAD OVER QUITE SOME TIME NOW, THERE IS NOT, UH, UNANIMITY, UM, AMONGST STAKEHOLDERS AS TO WHAT THE APPROPRIATE INTERPRETATION OF THE STATUTORY LANGUAGE IS, WHAT WAS INTENDED.
I KNOW THAT IT HAS BEEN STRONGLY ASSERTED IN, IN OPPOSING AN OPPOSING WAY IS WHAT THE, WHAT THE INTENT WAS.
AND, AND I DO THINK THAT THAT IS, THAT IS SOMETHING THAT WE WILL, THAT WE WILL NEED A, A POLICY DECISION ON, UM, AND, AND EXPECT THAT THE, UH, THE COMMISSION WILL WANT TO WEIGH IN ON THAT.
CAN YOU HEAR ME OKAY? CAN YOU HEAR ME OKAY? YES.
UM, JUST QUICK QUESTION, ARE WE LOOKING FOR 1309? ARE WE LOOKING AT THE QUOTE UNQUOTE CHEAPER VERSION AS WE'VE TALKED ABOUT IN THE PAST WHERE IT'S LIKE 70% OF THE COST VERSUS THE 1310 VERSION WAS LIKE THE FULL ENCHILADA? OR ARE WE STILL LOOKING AT, YOU KNOW, LIKE THAT'S PROBABLY, YOU KNOW, QUESTION TO, UH, GORDON THERE, YOU KNOW, ARE WE LOOKING, ARE WE LOOKING, ARE, ARE WE LOOKING FOR THE FULL ENCHILADA? ARE WE'RE LOOKING FOR THE REDUCED COST ONE FOR 13.09 RIGHT NOW? HAPPY TO ANSWER THAT QUESTION.
[01:35:01]
UH, KEVIN DIRECTLY, THE, THE DIFFERENCE IN COST BETWEEN THE TWO AS ORIGINALLY SUBMITTED, ASSUMED A, A CONCURRENT IMPLEMENTATION.AND SO THEY, THE DELTA BETWEEN ONE IS LIKE 96% OF THE COST IS REFLECTED IN, UH, 1309.
AND THAT THE, THE CAPABILITY OF, UH, IMPLEMENTING ESR PARTICIPATION AND THE RELEASE FACTOR WAS A, A, A SMALL, MAYBE THREE TO 4% OF, OF THE COST.
HOWEVER, AGAIN, THAT ASSUMED A, UH, A CONCURRENT IMPLEMENTATION.
IF THE TWO NPR ARE IMPLEMENTED SEPARATELY, THEN THAT INCREASES, UH, INCREASES COSTS AROUND IMPLEMENTING, SAY THE RELEASE FACTOR.
UH, IF THAT IS SOMETHING THAT'S, THAT'S ADOPTED, BECAUSE THERE ARE BENEFITS THAT YOU GET FROM, UH, REDUCED TESTING TIME, UH, FROM REDUCED STAFF TIME AND FTE, UH, COMMITMENT TO, TO TWO SEPARATE PROJECTS THAN, THAN YOU WOULD SEE, UH, IN IF YOU WERE TO DO IT AT ONCE.
AND SO WHAT WE HAD SAID IN AN EARLIER MEETING WOULD BE THAT IF, IF 1310 IS TO BE IMPLEMENTED SEPARATELY FROM 1309, THAT WE WOULD HAVE A DIFFERENT IMPACT ANALYSIS.
BUT THE, AS SUBMITTED, THE THE COST BETWEEN IMPLEMENTING EVERYTHING AND IMPLEMENTING JUST 1309, WHICH IS THE, UH, THE, THE ANCILLARY SERVICE COMPONENT, UH, IS RELATIVELY SMALL.
SO IT SHOULD BE CLEAR THAT AGAIN, WE NEED, PROBABLY NEED TO LAY IT OUT ON THAT ONE WHEN THIS COMES UP FOR A VOTE.
ARE WE, SO THE, LET'S SAY THE, THE 1309 WITHOUT 1310 LANGUAGE IS $700,000.
THE 1309 WITH THE INCREMENTAL FOR BRINGING IN 1310 DOWN THE FUTURE IS A MILLION DOLLARS.
JUST BEING ABLE TO CLARIFY THAT, MAYBE USEFUL ALSO FOR THE INCOME TO THE VOTE, WELL WILL HAVE MORE INFORMATION ON THE, ON AN IMPACT ANALYSIS FOR, FOR 1310, UH, IF THOSE ARE GONNA BE ON DIFFERENT TRACKS.
LET'S WE'RE BACK TO THE QUEUE, CORRECT.
GORD, I THINK LET'S GO THROUGH BOB HILTON.
JUST ON, ON THIS POLICY ISSUE DISCUSSION THAT WE'RE HAVING.
UM, THE COMMISSION IS PART OF THIS STAKEHOLDER PROCESS AND CAN MAKE COMMENTS IN ANY DIRECTION ANYTIME THEY WANT AS THEY'VE DONE IN THE PAST.
UH, ALSO THE COMMISSION ON A FINAL POLICY DECISION HAS TO APPROVE, UH, PROACTIVELY ANY PROTOCOL REVISION THAT COMES THROUGH AND CAN APPROVE IT AS IS.
THEY COULD CHANGE IT, THEY COULD PUT A, A PROPOSED LATER IMPLEMENTATION DATE ON ESRS OR SOMETHING IF THEY WANT FROM A POLICY PERSPECTIVE.
BUT BEING THE STAKEHOLDER PROCESS IN DEALING WITH TECHNICAL ISSUES, IF THERE'S NOT A TECHNICAL REASON THAT THEY SHOULD BE PUT IN AT A LATER DATE, THEN I, I, I WOULDN'T CHANGE MY JOINT COMMENTER'S COMMENTS.
I WOULD LET THAT POLICY DECISION BE MADE IN ANOTHER VENUE WHEN IT GOES OVER.
AND I, I APPRECIATE ERCOT TEEING UP THE ESR POLICY DECISION.
I, I DO AGREE THERE'S, THERE'S TERMS IN THE STATUTE THAT DO, UM, CONTEMPLATE BATTERIES BEING INCLUDED IN THIS.
UM, SO I, I APPRECIATE HOW YOU'VE KIND OF TEED THAT UP, GORD, DELIBERATELY.
UM, BUT ONE THING I ALSO THINK IS VERY CLEAR AND SUPPORTED BY STATUTE IS THE LEGISLATURE CLEARLY CONTEMPLATED A LONGER DURATION FOR DRS, PARTICULARLY IN CERTAIN, UH, TIMES OF THE YEAR AND SEASONS WHEN THAT WOULD BE REQUIRED.
AND SO, UM, WHETHER BATTERIES ARE INCLUDED OR NOT IS ONE THING, BUT ALSO THE APPROPRIATE DURATION OF THE PRODUCT TO MAKE SURE THAT WE ARE INCENTIVIZING THE RIGHT TYPES OF DISPATCHABLE RESOURCES TO MEET THE RELIABILITY NEEDS OF EACH SEASON IS ALSO JUST AS IMPORTANT.
AND THERE IS AMPLE LEGISLATIVE SUPPORT TO MAKE SURE WE HAVE A LONGER DURATION PRODUCT IF WE NEED IT.
THIS IS GETTING A LITTLE, UM, LET'S TAKE THESE LAST TWO COMMENTS IF YOU GUYS WANNA SPEAK UP AND THEN SEE WHAT WE CAN DO FOR NEXT STEPS.
SHANE, DID YOU WANNA SAY YOUR COMMENT OUT LOUD? OH, YEAH, SURE.
I WAS JUST SAYING THAT I DON'T, THE PC CAN CHANGE LANGUAGE AT A OPEN MEETING.
THEY, THEY CAN ONLY SEND IT BACK, BUT THEY DON'T LIKE WHAT THEY GOT.
WHAT THEY'VE DONE IN THE PAST.
YEAH, I BELIEVE THAT'S CORRECT, BUT THAT WOULD GO AHEAD, BOB, THE PROCESS OF APPROVAL.
[01:40:05]
BOB, DID YOU WANNA SPEAK YOUR OH, NO, ALL I, I JUST PUT IN THERE YEAH.YEAH, THEY, THEY JUST THE SAME THING.
THEY'D REMAND BACK WITH DIRECTION TO SAY, BRING IT BACK WITH THIS LANGUAGE, AND THAT'D BE DONE REAL QUICKLY.
UM, BUT AT ANY RATE, WHAT I WAS GETTING AT IS IF THAT'S WHAT THE COMMISSION WANTED, THEY HAVE THE FINAL BITE AT THE APPLE, THEY CAN DO ANYTHING THEY WOULD WANT TO DO, INCLUDING REJECTING IT.
YEAH, JUST A, JUST A THOUGHT ON WHAT BOB IS SAYING.
I THINK THINKING ABOUT THE LEGISLATIVE TIMELINE, AND ONE OF THE REASONS WHY THE BOARD GRANTED URGENCY ON, ON 1309 SPECIFICALLY WAS TO ENSURE THAT, UM, UH, THAT THIS WAS A PRIORITY TO COMPLETE BY THE JUNE BOARD.
I THINK IF WE'RE SETTING IT UP FOR THE COMMISSION TO RE REMAND AND, YOU KNOW, IT'S, IT'S GOING TO EXTEND THE TIMELINE, I THINK THAT IS SOMETHING WE'D LIKE TO AVOID.
UH, WHICH IS WHY VERY CONSCIOUSLY, THE, AS GORD INDICATED THAT 1310 WAS DESIGNED THE WAY IT WAS FOR THAT SPECIFIC PURPOSE WAS TO ALLOW FOR, UM, OPTION, ALLOW THE COMMISSION OPTIONALITY ON POLICY CHOICES THAT WE, WE BELIEVE NEED TO BE DONE THERE.
AND I THINK THAT, THAT WHAT WE'RE HEARING IS, WELL, THEY CAN ALWAYS JUST, YOU KNOW, PUSH IT BACK IF WE SEND THEM SOMETHING THEY DON'T LIKE.
AND I THINK OUR VIEW IS IN ORDER TO BE SUCCESSFUL AT THE, AT THE JUNE BOARD AND, AND AT A POTENTIAL JULY COMMISSION MEETING, I THINK WE, WE VERY CONSCIOUSLY APPROACH THIS WITH THE OPTIONALITY IN MIND.
SO I, I I, AND PART OF THE REASON FOR THAT IS SO THAT WE COULD BE VERY EXPEDITIOUS IN COMPLETING THE, THE REQUIREMENTS OF, OF THE, OF THE STATUTE.
SO, UH, IT WAS VERY THOUGHTFUL AND INTENTIONAL IN, IN THAT REGARD.
AND, AND AGAIN, I THINK THIS IS SOMETHING THAT, UH, IS, IS VERY IMPORTANT TO, TO ERCOT IN TERMS OF ACHIEVING THAT OBJECTIVE AND ALLOWING THE, UH, POLICY CHOICES TO BE MADE AT THE APPROPRIATE TIME BY THE COMMISSION.
SO THAT'S OUR VIEW, AND THAT THAT DEFINITELY DIFFERS FROM, UH, FROM BOB'S PERSPECTIVE.
BUT, UH, WE DO, WE DO SEE THAT AS, AS A POTENTIAL CONCERN IN THE PROCESS.
YEAH, JUST TO CLARIFY, I'M NOT SETTING IT UP FOR A REMAND.
ALL I WAS TRYING TO INDICATE IS IF THEY WANTED TO MAKE A POLICY CUT, THEY COULD, BUT THE OTHER PIECE THAT I DID MENTION IS IF THE COMMISSION WANTS IT IN A CERTAIN WAY, I WOULD SUGGEST THAT COMMENTS COULD BE FILED AS HAVE DONE IN THE PAST TO SAY, WE WANT THIS A CERTAIN WAY.
I MEAN, THEY COULD WEIGH IN AT ANY GIVEN TIME.
SO JUST WANTED TO CLARIFY THAT, THAT I WASN'T SETTING THAT UP FOR A REMAND.
UM, LET'S TAKE A PAUSE ON THIS FOR A MOMENT.
[7. Other Items]
ANY OTHER ITEMS WE DIDN'T COVER TODAY THAT PEOPLE WANTED TO BRING UP? SO I THINK OTHER ITEMS NEEDS NOT ESR PARTICIPATION, NOT ANDREW'S DEMAND CURVE, CYRUS.UM, THIS MAY NOT BE SPECIFIC TO 1309, BUT JUST THE QUESTION OF, UM, NONS SPIN AND DURATION OF NONS SPIN.
I MEAN, I THINK IT'S SOMETHING WE NEED TO THINK ABOUT.
UM, DOESN'T NEED TO BE RESOLVED BY JUNE, BUT, UH, JUST JUST REMINDER THAT IT SHOULD BE ON THE, SHOULD BE IN THE PART OF THE DISCUSSION AS WELL.
THERE IS PROBABLY A STAKEHOLDER WILLING TO FILE THAT MPRR, BUT I CAN'T CONFIRM WHAT I'M SHARING.
UH, I JUST WANT TO BE CLEAR THAT I WAS UNDER THE IMPRESSION THAT
[01:45:01]
PART OF THIS ANALYSIS WAS THAT THE DURATION REQUIREMENT FOR NONS, SPIND WOULD BE INCLUDED IN THE COMMENTS FOR THESE DEMAND CURVES.AND SO IF THAT'S NOT THE CASE, THAT'S, THAT'S SOMETHING ELSE THAT MIGHT IMPACT SOME OF THE KIND OF SECONDARY CONSIDERATIONS AROUND THE DEMAND CURVES.
NOT REALLY ANY OF THE BASICS, BUT MORE OF THE STUFF ABOUT THE TAIL AND EVERYTHING LIKE THAT, I THINK, UH, ARE SOMETHING I WOULD NEED TO THINK ABOUT.
SO YOU WOULD, YOU WOULD BE PROPOSING TO CHANGE THAT DURATION IN YOUR LANGUAGE EDITS? UH, THAT WAS SORT OF HOW I UNDERSTOOD THE ANALYSIS WE WERE DOING.
I JUST WANTED TO KNOW THAT IN THE, IN THE WORK PLAN OF, OR, OR INVENTORY OF, OF ISSUES THAT, UH, THAT WE TOOK FROM THE, THE DISCUSSIONS ON RTC PLUS B, THAT DURATION REQUIREMENTS IS, IS ONE OF THE ITEMS ON THAT LIST, WHICH WE, WE PLAN TO BE TAKING UP IN, IN 2026.
HAPPY TO WORK WITH, UH, WITH ANDREW AS WE PREPARE THE LANGUAGE FOR, UH, 13 NINE TO MAKE SURE THAT WE HAVE A, A COMMON UNDERSTANDING OF HOW WE WANT TO REFLECT THAT.
BUT I, I DO THINK THAT THE, UM, AT THIS POINT, OUR, OUR PLAN TO HAVE A HOLISTIC CONVERSATION ON DURATION REQUIREMENTS IS AS PART OF A SEPARATE ITEM AND NOT TO BE, NOT TO BE ENFORCED THROUGH LANGUAGE IN, IN 13 TO NINE.
WE'D WANNA DO THAT HOLISTICALLY RATHER THAN, THAN JUST TAKING THE UM, E-C-R-S-S AND NONS SPEND.
BUT, WE'LL, WE CAN, AS THIS IS A JOINT PROPOSAL WITH, UH, WITH THE IMM, UM, AND WE WANT TO ADVANCE IT AS SUCH, UH, WE CAN IN, IN THE WORK THAT WE'RE DOING OVER THE NEXT, UH, LITTLE WHILE, UH, WORK WITH ANDREW AND HIS, HIS TEAM TO ENSURE THAT WE ARE, WE'RE BEING CLEAR AND WHAT'S IN THE SCOPE FOR LANGUAGE IN, IN 1309 AND WHAT WILL BE, UH, ADDRESSED IN THE FUTURE.
[8. Next Steps]
DECIDE ON NEXT STEP KIND OF PAUSING.'CAUSE I DON'T KNOW THE BEST WAY FORWARD.
I THINK, YOU KNOW, THERE'S A FEW DIFFERENT SORT OF DECISION POINT, UM, ESR PARTICIPATION AND THE DEMAND CURVE, AND THEY SORT OF DEPEND ON EACH OTHER.
UM, YOU KNOW, I APPRECIATE THAT ERCOT ASK QUESTIONS FOR FEEDBACK AND IS TAKING THEM INTO ACCOUNT, BUT I THINK STAKEHOLDER INPUT IS IMPORTANT AS PART OF THE PROCESS.
UM, YOU KNOW, IN THE PAST, ANNA HAS GOTTEN REALLY MAD AT ME WHEN I'VE SUGGESTED THAT WE DO SOMETHING LIKE VOTES ON, UM, TOPICS OR PRINCIPLES.
SO I, I THINK WE JUST NEED TO TAKE, TAKE SOME TIME MAYBE TO FIGURE THAT OUT.
I DON'T KNOW, DOES ANYONE HAVE ANY BRILLIANT IDEAS? WHY DON'T WE TAKE A 15 MINUTE BREAK? UM, YEAH, JOHN SAYS, JOHN BERT SAYS A 20 MINUTE BREAK.
WE, WE COULD COME BACK AT NOON EVEN, LET'S, LET'S COME BACK AT NOON AND AT NOON, IT SHOULDN'T TAKE MORE THAN HALF AN HOUR.
CAN YOU EVERYONE HEAR ME? YEP.
UM, KEITH, DID YOU WANT TO SAY SOMETHING? UM, I'M GONNA ASK MATT ARTHUR TO, UM, MAKE A POINT IF MATT'S AVAILABLE.
UH, CERTAINLY THIS IS, UH, MATT ARTHUR.
SO, UM, JUST LETTING FOLKS KNOW THAT, UH, WE NOW UNDERSTAND THAT THE COMMISSION INTENDS TO TAKE UP THE TOPIC OF ESR PARTICIPATION AT THE MARCH 26TH OPEN MEETING.
UM, SO, UH, MORE ON THAT TO COME, BUT, UH, PLEASE DIAL IN THERE.
[01:50:01]
OKAY.I THINK THAT ALIGNS WITH WHAT WE CAME UP WITH, WHICH WAS AN ADDITIONAL WORKSHOP ON APRIL, FRIDAY, APRIL 10TH.
AND SO WE WOULD WANT COMMENTS IN A WEEK BEFORE, SO COMMENTS IN BEFORE EASTER, UM, OR EARLIER IF YOU WANT, THEY COULD SEND ME OF EASTER AND GCPA AND THEN WE WOULD DO THE WORKSHOP THE 10TH.
AND I REALLY WOULD LIKE TO EVALUATE LANGUAGE AT THAT WORKSHOP.
SO I, I SPOKE WITH GORD AND I SPOKE WITH THE IMM, ALTHOUGH I DIDN'T GIVE ANDREW THIS DEADLINE, BUT WE, WE'D LIKE TO SEE EVERYBODY'S LANGUAGE ON THINGS.
UM, YOU KNOW, SOME, SOMEWHERE THAT WEEK OF MARCH 30TH, AND THEN WE'LL HAVE THE WORKSHOP THE 10TH.
THERE'S A PEER AT THE 15TH, BUT IF THERE'S ADDITIONAL LANGUAGE CHANGES THAT NEED TO BE MADE BETWEEN THE 10TH AND THE 15TH, THEN THERE'S ALREADY A SPECIAL PRS SCHEDULED FOR THE 22ND.
ANY FURTHER? UH, QUESTIONS, COMMENTS? IS THAT OKAY WITH EVERYBODY? GO AHEAD, SARA.
YEAH, I'M JUST TRYING TO STATE THE OBVIOUS.
SO THAT WOULD MEAN WE WOULDN'T, UM, MOVE 1309.
WE MIGHT HAVE A DISCUSSION ABOUT 1309 ON WEDNESDAY, BUT THE EXPECTATION WOULD BE WE'D LEAVE A TABLE TO GIVE TIME TO COMMENT ON THE DIFFERENT ASPECTS.
IS THAT, IS THAT ACCURATE? I THINK THAT A STAKEHOLDER CAN PROPOSE TO MAKE A VOTE WHENEVER THEY WOULD LIKE TO PROPOSE TO MAKE A VOTE IF IT'S, YOU KNOW, PROPERLY NOTICED.
YOU KNOW, GI GIVEN, WE JUST HEARD THE COMMISSION WILL HAVE DISCUSSION ON THE, THE 23RD, THAT'S WHAT I WOULD BE THINKING ABOUT.
WELL, THANK YOU FOR COMING BACK FOR A COUPLE MINUTES.
UM, I THINK WE'LL DO, THAT'S A, THAT'S A BUSY WEEK, SO WE'LL DO, UM, WE'LL DO THAT MEETING WEBEX AGAIN.
I, I ANTICIPATE IT'LL BE PRETTY SHORT, BUT AGAIN, I THINK THAT THE PURPOSE OF IT WOULD BE TO REALLY BE, YOU KNOW, MAKING DECISIONS ON WHAT WE'LL BE VOTING ON.
SO, WE'LL, WE'LL NEED EVERYBODY'S LANGUAGE, YOU KNOW, WEEK, WEEK OF MARCH 30TH.
LET ME KNOW IF THERE ARE ANY, UH, QUESTIONS OR COMMENTS OFFLINE.
UM, THANK, THANK YOU TO, TO ERCOT AND TO THE MM AND, AND EVERYBODY ELSE FOR, YOU KNOW, TH THERE'S BEEN VERY ROBUST PARTICIPATION IN THIS AND WE APPRECIATE IT.