* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting. [00:00:07] ALL [1. Call General Session to Order] RIGHT, LET'S GO AHEAD AND GET STARTED. GOOD AFTERNOON, MEMBERS OF THE ERCOT BOARD OF DIRECTORS AND GUESTS, I'M BILL FLORES ERCOT, BOARD CHAIR. I WANNA WELCOME EVERYONE TO THE JUNE 1ST AND SECOND 2026 BOARD OF DIRECTORS MEETING. I'VE CONFIRMED THAT A QUORUM IS PRESENT IN PERSON, AND I HEREBY CALL TO ORDER THIS MEETING OF THE ERCOT BOARD OF DIRECTORS. THIS MEETING IS BEING WEBCAST LIVE TO THE PUBLIC ON ERCOT WEBSITE. AT THIS TIME, I'D LIKE TO ASK PUBLIC UTILITY COMMISSIONER OF TEXAS CHAIR THOMAS GLEASON, IF HE WOULD LIKE TO CALL TO ORDER AN OPEN MEETING OF THE COMMISSION. YES, SIR. THANK YOU, MR. CHAIRMAN. THIS MEETING OF THE PUBLIC UTILITY COMMISSION OF TEXAS WILL COME TO ORDER TO CONSIDER MATTERS THAT HAVE BEEN DULY POSTED WITH THE SECRETARY OF STATE FOR JUNE 1ST, 2026. UH, THANK YOU CHAIRMAN GLEASON. UH, THE ANTITRUST ADMONITION AND THE SECURITY MAP ARE INCLUDED IN THE POSTED MEETING MATERIALS TODAY. THE FIRST [2. Notice of Public Comment, if Any] ORDER OF BUSINESS ON THE TODAY'S AGENDA IS ITEM TWO. NOTICE OF PUBLIC COMMENT, IF ANY. TODAY'S MEETING AGENDA WAS POSTED PUBLICLY ON MAY 22ND, AND IT PROVIDED INSTRUCTIONS TO THE PUBLIC FOR COMMENTING IN PERSON. THE BOARD RECEIVED A REQUEST ON BEHALF OF GIDEON POWELL, CE OCHO, INC, TO PROVIDE IN PERSON COMMENTS. WE'LL TAKE UP MR. POWELL'S COMMENTS TOMORROW DURING OUR DISCUSSION OF TWO REVISION REQUESTS REGARDING THE BATCH ZERO PROCESS FOR LARGE LOAD INTERCONNECTIONS, WHICH IS UNDER AGENDA ITEM 15.1 0.4. CHAD, HAVE WE RECEIVED ANY OTHER REQUEST TO COMMENT IN PERSON? NO OTHER COMMENTS AT THIS TIME, CHAIR. OKAY, THANK YOU. THANKS, CHAD. NEXT IS AGENDA [3. April 20-21, 2026 General Session Meeting Minutes] ITEM THREE, THE APRIL 20TH, 20 20TH AND 21ST 2026. GENERAL SESSION MEETING MINUTES. THERE'S A DRAFT OF THE MEETING MATERIALS. WOULD ANY BOARD MEETING BOARD MEMBER LIKE TO DISCUSS? IF NOT, ENTERTAIN A MOTION TO APPROVE. UH, THANK YOU JOHN. KATHLEEN, SECOND. ALL IN FAVOR? AYE. AYE. ANY OPPOSED? ANY ABSTENTIONS? OKAY. THE MINUTES ARE APPROVED IS WRITTEN. REBECCA [4. High-Impact Policy Discussions in the Stakeholder Process] ZERVOS IS, UH, GOING TO DELIVER OUR FIRST PRESENTATION UNDER AGENDA ITEM FOUR, HIGH IMPACT POLICY DISCUSSIONS IN THE STAKEHOLDER PROCESS. THIS IS AN OPPORTUNITY TO LOOK AHEAD, ESPECIALLY AT EMERGING DISCUSSIONS AND ISSUES ON THE HORIZON. REBECCA, PLEASE PROCEED WITH YOUR PRESENTATION. AND CHRISTIE, YOU'LL BE ON DECK. THANK YOU. THIS IS A BIG CYCLE. SEVERAL OF THESE ITEMS HAVE BIG UPDATES IN JUNE, SO I'M NOT GONNA SPEND MUCH TIME ON THE ONES THAT ARE IN FRONT OF YOU THE NEXT FEW DAYS. I DID WANNA START OUT, UM, REFERENCING THE COMMISSION PRIORITIES FOR THE 20 26 20 27 BIENNIAL BUDGETS. WE ARE FILING TODAY ON NEW UPDATES, THE PERFORMANCE MEASURES, BUT WANNA KEEP THESE IN MIND AS WE WORK THROUGH THESE, THAT THESE ARE THE FIVE ITEMS IDENTIFIED AS THE COMMISSION FOR OUR CAP PRIORITIES THIS CYCLE. FIRST IS DRS 1309 IS ON THE AGENDA TOMORROW. WANNA HIGHLIGHT 13, 10 AND, UM, 1337 OR THE, UM, NEW D-R-S-E-S-R RELATED ITEM THAT WAS FILED LAST WEEK. SO THIS WAS PENDING COMMISSION GUIDANCE TO SEPARATE OUT THE STORAGE ISSUES THAT IS NOW FILED, AND WE'LL START ITS JOURNEY AT PRS THIS MONTH. AND THEN 1310 IS STILL TABLED. WE EXPECT THAT TO BE TABLED DEPENDING ON EVALUATION OF THE TRIENNIAL RELIABILITY ASSESSMENT LATER THIS YEAR. IN THIS SB SIX ITEM, THERE'S KIND OF THREE UPDATES HERE, THE LARGE LOAD INTERCONNECTION STANDARD AND DEMAND REDUCTION PROGRAM FOR LARGE LOADS. BOTH THOSE HAD THEIR EXPECTED RULEMAKING ADOPTION DATES PUSHED OUT SLIGHTLY BY THE COMMISSION. BOTH WE DO EXPECT TO BE DONE BY THE END OF THE YEAR IN FRONT OF THE NEXT LEGISLATIVE SESSION. AND THEN THE TRANSMISSION COST RECOVERY PROJECT STAFF DID FILE A DRAFT REPORT WITH RECOMMENDATIONS EARLIER THIS MONTH THAT DOES HAVE SOME ERCOT IMPACTS MOVING FROM A FOUR CP TO A 12 CP AND A MILLING, UM, MINIMUM BILLING DEMAND. SO WE'LL BE MONITORING THAT AND EXPECT A RULEMAKING BY THE END OF THE YEAR. AGAIN, BATCH STUDY PROCESS. WE HAVE THE FIRST SET OF BATCH ZERO RELATED REVISION REQUESTS AT THE BOARD TOMORROW. UM, HAVE A HIGHLIGHT OF WORK WE'LL BE DOING IN THE INTERIM PROCESS AS WE WORK TOWARDS THE FEBRUARY 8TH, 2027 BOARD. WE'LL BE GETTING A FINAL RULEMAKING IN THAT SV SIX RELATED LARGE CONNECTION STANDARD RULEMAKING AT THE COMMISSION THAT HAS INTERPLAY WITH THE BATCH, UM, QUALIFICATIONS AND PROCESSING. AND THEN WE ALSO ARE STARTING [00:05:01] STAKEHOLDER DISCUSSIONS ON THE ONGOING BATCH STUDY PROCESS. AND THEN KRISTI WILL TALK ABOUT LATER THE, UM, COMPREHENSIVE TRANSMISSION PLANNING FRAMEWORK THAT'S BEEN ADDED FOR THAT FEBRUARY, 2027 ADOPTION AS WELL. FOR THIS AS ITEM, THESE ARE NOT REVISION REQUESTS, BUT THEY ARE ISSUES THAT'LL BE IN THE STAKEHOLDER PROCESS AND THEY ARE TIED TO THE ANCILLARY SERVICE STUDY FINDINGS AS THE COMMISSION PRIORITY. SO FIRST IS THE STANDARD ANNUAL A S METHODOLOGY. I KNOW DAN AND HAVE A PRESENTATION ON THIS TOMORROW. UM, WE DID DO THE PROBABILISTIC MODELING LAST YEAR, AND THIS CYCLE WILL FOCUS ON ALTERNATIVE PROCUREMENT CRITERIA. I KNOW THIS WAS A BIG DISCUSSION WITH THE BOARD LAST YEAR WHEN THE METHODOLOGY CAME UP. THE SECOND IS THE AS COST ALLOCATION STUDY. THIS WAS AN HB 1500 RELATED ITEM, SO IT'S A COMMISSION REPORT. IT'S DUE AT THE LEGISLATURE DECEMBER 1ST OF THIS YEAR. ERCOT IS DOING THE ANALYSIS AND ONE OF THE REQUIREMENTS WAS IT WOULD GO THROUGH THE TECHNICAL ADVISORY COMMITTEE FOR FEEDBACK. SO WE'VE STARTED THAT, UM, PROCESS END OF MAY. WE ASKED FOR FEEDBACK AND WE'LL BE DOING THAT FOR THE NEXT THREE OR FOUR MONTHS. THESE RELIABILITY PROCUREMENT PROCESS IMPROVEMENTS, THESE WERE THE LESSONS LEARNED ITEMS IN THE LAST FEW YEARS. WE'VE DONE RELIABILITY MUST RUNS, MUST RUN ALTERNATIVES AND CONTRACT CAPACITY PROPOSALS. UM, 13, 15 AND 1316 ARE IN FRONT OF THE BOARD. THIS CYCLE DID WANNA HIGHLIGHT. 1319 IS STILL OUTSTANDING. WE HAVE WORKED WITH STAKEHOLDERS AND TAKEN FEEDBACK TO KIND OF REMOVE THAT PROPOSED, UM, WINNER MOP BALL PROHIBITION. WE ARE FOCUSED ON THE RFP LANGUAGE AND SO WE'RE HOPEFUL THAT WE'LL HAVE THAT BY THE END OF THE YEAR DEAL AS WELL. FOR AFFIRMING REQUIREMENTS, I THINK THIS IS ONE OF THE FINAL OUTSTANDING HB 1500 ITEMS THAT WE'RE GOING THROUGH OUR PAST LEGISLATIVE LIST. UM, THE PUC ADOPTED A NEW RULE 25 65 EARLIER THIS YEAR. THIS CREATES A WHOLE NEW SECTION OF THE PROTOCOLS. UM, IT IS, UM, SOMETHING WE NEED TO DO BY THE SEPTEMBER BOARD. THE PROGRAM HAS TO BE IMPLEMENTED BY DECEMBER 1ST, 2027. I THINK THE NEW UPDATE HERE IS THAT THE EARLIEST, UM, FIRST FIRM IN COMPLIANCE SEASON WOULD BEGIN MARCH 1ST, 2028. SO A WHOLE NEW SECTION OF THE PROTOCOLS. THERE'S GONNA BE A LOT OF BUILD WHEN THIS GETS TO Y'ALL, BUT IT HAS BEEN ANOTHER ITEM THAT MAYBE HASN'T GOTTEN A LOT OF ATTENTION, BUT IT'S BEEN MOVING VERY FAST. THE STANDARD FORM AGREEMENTS. UM, THERE WAS A WORKSHOP EARLIER THIS YEAR, WE'RE WORKING ON ADDITIONAL COMMENTS ON WHAT IS AN AGREEMENT VERSUS WHAT MOVES INTO THE PROTOCOL. THIS WAS A HOLISTIC, UM, REVIEW OF THE STANDARD FORM AGREEMENT PENDING THAT, UM, TEXAS SUPREME COURT DETERMINATION ON THE SOVEREIGN IMMUNITY. WE DO EXPECT, AGAIN, MORE SUBSTATIVE, UM, DISCUSSION AFTER OUR COURT FILES COMMENTS IN JUNE, TAKING THAT INITIAL STAKEHOLDER CONSIDERATION, UM, AND CONTINUING THOSE DISCUSSIONS. THIS RENEWABLE ENERGY CREDIT PROGRAM HAS BEEN A BIG DISCUSSION. I KNOW IT FELL OFF THE LAST FEW CYCLES IN PRR 1264, WHICH WE CREATE A NEW ENERGY ATTRIBUTE CERTIFICATE PROGRAM OR EAC PROGRAM IS AT THE BOARD THIS CYCLE. WANTED TO HIGHLIGHT HERE. YOU'LL SEE THIS ITEM AT LEAST TWO MORE TIMES. ONE, IT'S KIND OF NOT THE STANDARD PROCESS, BUT TO GET THAT MOVING FORWARD. WE BROUGHT 1264 FORWARD. THERE ARE A LOT OF ASSOCIATED GUIDE AND REVISION REQUESTS. UM, THE BINDING DOCUMENT CHANGES, THOSE WERE MOVING FORWARD. AND A CONFORM TO THE VERSION THAT CAME TO THE BOARD. YOU SHOULD SEE THOSE IN SEPTEMBER. THE SECOND UPDATE YOU'LL HAVE IS ONCE, UM, 1264 IS BOARD AND PUC APPROVED. WE'LL MOVE FORWARD WITH AN RFFP PROCESS FOR THE THIRD PARTY ADMINISTRATOR FOR THIS PROGRAM AND SHOULD HAVE AN UPDATE FOR Y'ALL IN DECEMBER. AND FINALLY, THIS IS THE OTHER NEW ITEM ON THE DECK, THIS CYCLE EMERGENCY RESPONSE SERVICE. UM, THIS IS SOMETHING THAT CAME OUT OF THE CHARLES RIVER REPORTS. LOOKING AT THE CHANGING GRID AND THE GROWTH IN THIS PROGRAM. UM, WE'RE LOOKING AT TWO CHANGES TO HOW QSC AND THEIR RESOURCES ARE EVALUATED, UM, FOR AVAIL AND DEPLOYMENTS. SO LOOKING AT THAT ALTERNATIVE BASELINE TO TEST, UM, TO SEE HOW IT'S PERFORMANCE IS BASED, UM, AND MAKE SURE THAT WE'RE NOT OVERLYING ON PEOPLE WHO ARE RESPONDING TO SIGNALS OTHER THAN AN ERS CALL AND ARE SELF DEPLOYING IN ADVANCE. IT IS PENDING AT PRS. SO IT WAS FILED LAST WEEK AND THE DISCUSSIONS WILL START LATER THIS MONTH. SO WE DO EXPECT TO HAVE MORE SUBSTANTIVE, UM, UPDATES OF THIS MOVES FORWARD THROUGH THE PROCESS. ANY QUESTIONS? ANY QUESTIONS FOR REBECCA? [00:10:01] SO I THINK THE BOTTOM LINE IS, UH, HANG ON. WE'VE GOT A LOT COMING UP. WE HAD A LOT OF WORK. THERE'S A LOT MORE COMING. YEAH. LET'S, UH, MOVE ON TO AGENDA [5.1 25RPG013 & 25RPG017 CPS Combined Reactive Power Planning Project & Helotes 345/138-kV Switching Station and Autotransformer Addition at Eastside Switching Station Regional Planning Group (RPG) Project] ITEM FIVE. RECOMMENDATIONS REGARDING TIER ONE TRANSMISSION PROJECTS. THERE ARE SIX SUB ITEMS. THE FIRST IS GEN ITEM 5.1 25 RPG 0 1 3, AND 25 RPG 0 1 7 CPS COMBINED REACTIVE POWER PLANNING PROJECT AND HELLO TO 3 45, 1 35 KB SWITCHING STATION AND AUTO TRANSFORMER EDITION AT EAST SIDE SWITCHING STATION. REGIONAL PLANNING GROUP. UH, CHRISTIE HOBBS IS PRESENTING THIS AND THE REST OF THESE, I BELIEVE SO. CHRISTIE, THE FLOOR IS YOURS. ALRIGHT, AND WE'LL VOTE ON EACH OF THESE SEPARATELY. ALL RIGHT, GOOD AFTERNOON. BOARD MEMBERS, COMMISSIONERS. YOU'VE GOT A SERIES OF PROJECTS HERE BEFORE YOU, AND I'LL GO THROUGH 'EM EACH ONE BY ONE SO THAT WE CAN ADDRESS ANY SPECIFIC QUESTIONS THAT YOU HAVE. BUT AS YOU STEP BACK AND LOOK, WE RECOGNIZE THIS IS A LARGE NUMBER OF PROJECTS, UH, THAT ARE MOVING THROUGH FOR YOUR CONSIDERATION AT ONE TIME. NUMBER OF REASONS DRIVING THAT. UH, THESE PROJECTS ARE RELIABILITY DRIVEN. THERE ARE SOME THAT ARE DEALING WITH AGING INFRASTRUCTURE AS WELL AS THE LARGE LOAD GROWTH THAT WE'RE SEEING ON THE SYSTEM, AS WELL AS JUST OVER, UH, WELL SYSTEM LOAD GROWTH. UM, AS WE SEE CITIES AND THE ECONOMY BOOM HERE IN TEXAS, WE CHALLENGED THE TEAM TO COMPLETE THE REVIEWS THAT WERE, UM, BEFORE THEM SO THAT WE COULD GET THESE VOTING ITEMS. IT WAS KEY TO GET IT TO YOUR JUNE BOARD SINCE THE NEXT SESSION IS NOT UNTIL SEPTEMBER, OF WHICH WE WILL ALREADY HAVE KICKED OFF THE BATCH STUDY PROCESS. SO HAVING THESE PROJECTS, UH, UNDER YOUR CONSIDERATION AND ENDORSED, ALLOWS US TO USE THESE TRANSMISSION PROJECTS AS WE LOOK AT ALLOCATING, UM, MEGAWATTS TO THE LOAD THAT'S SEEKING TO COME TO THE SYSTEM. THIS FIRST ONE IS IN THE CPS AREA. AGAIN, A RELIABILITY DRIVEN PROJECT. IT IS $477 MILLION. THE RECOMMENDATION COMING FROM CPS, THEY SUBMITTED TO RPG PROJECTS TO US IN THE BAYER COUNTY AREA. WE COMBINE THOSE PROJECTS TOGETHER FOR OUR STUDY AND PERFORMED ONE INDEPENDENT REVIEW. IT'S TO ADDRESS THE RELIABILITY CONCERNS DRIVEN BY THERMAL OVERLOADS VOLTAGE VIOLATIONS. UM, AND IN REPLACING AGING INFRASTRUCTURE, YOU MAY HAVE SEEN THERE'S, UM, A NEW AD TO THE REPORTS THAT ARE, UM, IN THE DOCUMENTED OR CAUGHT INDEPENDENT REVIEW. AND FOR THIS PARTICULAR PROJECT, SOME OF THE INFRASTRUCTURE THAT'S BEING REPLACED IS ANYWHERE FROM 30 TO 60 YEARS OLD. WE ALSO SAW, UM, SOME REV RELIABILITY, UM, INCREASES VIOLATIONS BECAUSE OF GENERATION THAT WAS LEAVING THE AREA AS WELL AS NOT ONLY LARGE LOADS IN THE SAN ANTONIO AREA, BUT IN THE NEIGHBORING AREAS. AND YOU'LL SEE THAT THEME THROUGHOUT A LOT OF THESE PROJECTS. YOU KNOW, WE NO LONGER HAVE A SYSTEM WHERE YOU CAN JUST DO REGIONAL PLANNING. YOU'VE GOTTA LOOK AT THE ENTIRE STATE BECAUSE THE IMPACTS ON LOADS IN THE VARIOUS REGIONS HAVE TO THE INFRASTRUCTURE ALL ACROSS THE STATE. CHRISSY, YES. UH, DO THE RELIABILITY ISSUES IDENTIFIED? ARE THEY RELATED TO THE RELIABILITY ISSUES THAT, UH, RESULTED THE SAN ANTONIO IMPORT ISSUES THAT RESULTED IN THE BONDING RMR? ACTUALLY, UM, THE, IT'S NOT DIRECTLY RELATED. SO WHEN YOU LOOKED AT THE BROADENING, UM, WE'VE ACTUALLY LOOKING AT EXIT STRATEGIES FOR MOVING OUT OF THAT. SOME OF THOSE PROJECTS WILL COME INTO PLAY, UH, LATER THIS YEAR AND EARLY NEXT YEAR. THESE PROJECTS THAT ARE BEING LOOKED AT TODAY ARE IN THE STUDY TIMEFRAME, I BELIEVE OF 2029. SO IT'S NOT DIRECTLY RELATED TO THAT. ALL RIGHT. SO OUR RECOMMENDATION, IT'S COMING TO YOU NOT ONLY FOR ERCOT PLANNING GUIDE CRITERIA, BUT NERC PLANNING CRITERIA TO MAKE SURE WE ARE RELIEVING THOSE VIOLATIONS, RELIABILITY VIOLATIONS UNDER VARIOUS CONTINGENCIES AND SCENARIOS. UM, I WON'T SPEND TIME GOING THROUGH ALL OF THE MECHANICS, BUT THIS ONE WILL REQUIRE, UH, CCNS TO BE, UH, PROCESSED OVER AT THE COMMISSION. AND SO WITH THAT, I'LL PAUSE TO SEE IF YOU HAVE ANY OTHER QUESTIONS. OUR RECOMMENDATION, WE DID LOOK AT A NUMBER OF OPTIONS FOR OPTIONS THAT WE SHORTLISTED TO THREE, UM, BUT BECAUSE OF EITHER VISIBILITY OR STILL SEEING VIOLATIONS IN THOSE VARIOUS OPTIONS, UH, THREE A IS OUR RECOMMENDATION TO THE BOARD. OKAY. ANY QUESTIONS FOR CHRISTIE? IF NOT, I'LL ENTERTAIN A MOTION TO APPROVE THIS TIER ONE PROJECT. LINDA, A SECOND FROM BILL. ALL IN FAVOR? AYE. AYE. ANY OPPOSED? ANY ABSTENTIONS? OKAY. THAT PROJECT IS APPROVED OR ENDORSED RATHER. [5.2 25RPG026 Oncor Paris Switch to Monticello Switch 345-kV Line Rebuild Regional Planning Group (RPG) Project] NEXT IS AGENDA ITEM 5.2 25 RPG 0 26, THE ENCORE PARIS SWITCH TO MONTICELLO [00:15:01] SWITCH 3 45 KVA KV LINE REBUILD, REGIONAL PLANNING ROUTE PROJECT. CHRISTIE. ALL RIGHT. THIS PROJECT SUBMITTED BY ENCORE IS A $233 MILLION PROJECT, AGAIN FOR, UH, RELIABILITY VIOLATIONS FOR THERMAL OVERLOADS IN THAT REGION. UM, GIVE YOU A LITTLE BIT OF BACKGROUND. ENCORE SUBMITTED THIS BACK TO US IN JULY OF LAST YEAR, LOOKING IN THAT NORTH, NORTH CENTRAL, UH, EAST PART OF THE STATE. WE PERFORMED OUR INDEPENDENT, UH, OVERVIEW AND RECOMMENDED THIS PROJECT MOVING FORWARD TO ADDRESS SOME OF THE RELIABILITY VIOL OR, OR ADDRESS THE RELIABILITY VIOLATIONS IN THE AREA. AND WE LOOKED AT FIVE DIFFERENT OPTIONS TO, UH, SEE HOW THEY COMPARED AGAINST DIFFERENT CRITERIA. AND THE OPTION, UH, THE PREFERRED OPTION ONE THAT WE'RE RECOMMENDING WAS NOT ONLY BECAUSE OF THE NEED, UM, BUT IT WAS ALSO THE LEAST COST OPTION OF ALL THAT WE LOOKED AT AS WELL AS DEEMED FEASIBLE BY THE UTILITY TO BE ABLE TO PROCEED WITH IT. SO BEFORE YOU, I'D ASK YOU TO ENDORSE OPTION ONE TO MOVE THIS PROJECT FORWARD. THERE IS NO CCN REQUIRED FOR THIS, UH, UPGRADE. OKAY? SO MOVE. OKAY. THANKS PEGGY. UH, SECOND FROM, UH, KATHLEEN. ALL RIGHT. ALL IN FAVOR? A AYE. ANY OPPOSED, ANY ABSTENTIONS? OKAY. THIS TIER ONE PROJECT IS ENDORSED AS WELL. I, SO I'LL GO AHEAD AND QUEUE UP THE [5.3 25RPG009 Oncor and LCRA TSC Muscovy and Voss Lake 345/138-kV Regional Planning Group (RPG) Project] NEXT ONE. AGENDA ITEM 5.3 25 RRP G 0 0 9 ENCORE AND LC, L-C-R-A-T-S-C, MUSCOVY AND VOS LAKE 3 4 5 1 38 KV REGIONAL PLANNING GROUP PROJECT. CHRISTIE. GREAT. SO THIS PROJECT IS AGAIN, ANOTHER RELIABILITY PROJECT SUBMITTED BY ENCORE AND LCRA. IT'S REALLY LOOKING AT ALL THE GROWTH, UM, THAT WE'RE SEEING IN THE CENTRAL TEXAS CORRIDOR, UM, FROM THE HU AREA NORTH TO DALLAS. AND RESOLVING THE VIOLATIONS THAT WE'RE SEEING IN THOSE, OR POTENTIAL VIOLATIONS IN THOSE AREAS TO PREPARE FOR, UM, THE GROWTH THAT WE'RE SEEING IN THE REGION. UM, THIS PROJECT DID EVOLVE OVER TIME. SO AS WE STARTED STUDYING IT, INCLUDING ADDITIONAL LOAD THAT WAS BEING SIGNED AND INCLUDED, UM, AND WE DECIDED TO BREAK IT UP IN GROUPS. UH, YOU'LL NOTICE IN SOME OF THE REPORTS THERE WAS SOME DISCUSSION AT TAC. THERE'S ACTUALLY, IT DOESN'T SOLVE, UM, THE VIOLATIONS IN THE AREA JUST SOUTH, BUT WE, WE ROPED THE STUDY SCOPE OFF TO MOVE FORWARD. THOSE WILL BE ADDITIONAL STUDIES THAT WE WOULD EXPECT WE'LL BRING TO YOU IN THE SEPTEMBER BOARD TIMEFRAME TO ADJUST, UH, ADDITIONAL VIOLATIONS THAT WERE SOUTH OF THE HU AREA. UH, AGAIN, THERMAL OVERLOADS, VOLTAGE VIOLATIONS AND UNSOLVED POWER FLOWS WAS THE REASON FOR, UH, THE RECOMMENDATIONS THAT WE HAVE. UM, UH, KUDOS TO MR. BERKLEY FOR ADDRESSING. HE CAUGHT THE ONE TYPO THAT WE PUT IN TO SEE IF ANYBODY WAS WATCHING. IT WASN'T A CPS INITIAL COST. UH, IT WAS THE INITIAL COST OF THE PROJECT. 'CAUSE THIS IS BETWEEN HOR AND LCRA BUILD. UM, IF YOU LOOK AT IT, UH, THERE'S DIFFERENT COMPONENTS. THERE'S ABOUT 389 MILLION, WHICH WAS THE INITIAL, UM, PROJECT THAT CAME FORWARD. THEN AS WE STARTED LOOKING AT PROJECTS THAT WE IDENTIFIED IN BOTH THE 2024 AND THE 2025 REGIONAL TRANSMISSION PLAN. SO WE SAW THE NEED IN BOTH OF THOSE STUDIES. UM, SO WE ADDED THOSE PROJECTS. THEY WERE NEEDED TO RESOLVE THE VIOLATIONS IN THE AREA, AND THEN THERE WAS ADDITIONAL, UH, UPGRADES AS, AS WE CONTINUED TO LOOK, UM, AT THE GROWTH IN THE AREA. UH, THAT'S ANOTHER 465 TO BE ABLE TO HAVE A CASE THAT'S SOLVED. AS I MENTIONED, THE AREA SOUTH OF HUDU, UM, IS STILL UNDER REVIEW. UH, WE'LL BE BACK TO YOU AT A FUTURE BOARD MEETING AGAIN, UH, VIOLATIONS, UH, BEING SOLVED FOR BOTH NERC AND ERCOT PLANNING GUIDE CRITERIA. UM, QUITE A BIT OF BUILD NEW RIGHT OF WAYS. UM, CCNS WILL BE REQUIRED. UM, I KNOW THERE WAS ONE ABSTENTION AT THE TAC MEETING ON THIS PROJECT, UM, FROM THE I REP SEGMENT, BUT THERE WAS NO A DISCUSSION FROM THAT MEMBER AS TO WHY THEY WERE ABSTAINING WHEN THEY VOTED. BUT I DID WANNA BRING THAT TO YOUR ATTENTION. UM, WE DID REVIEW A NUMBER OF OPTIONS. OPTION SEVEN A IS THE ONE THAT WE WERE BRINGING FORWARD FOR YOUR CONSIDERATION. ALRIGHT, WITH THAT I'LL ENTERTAIN A MOTION TO RUTH. OKAY? OKAY. BILL OR JULIE, DO YOU HAVE A QUESTION? WELL, I HAD A GENERAL QUESTION. CAN YOU JUST REMIND US, UM, HOW FAR OUT IN TIME DO THESE PLANS EXTEND? SO, UM, FOR THE BUILD OUT OF THE TRANSMISSION THAT'S COMING FOR THESE, OR WHEN YOU MODEL THEM, YOU'RE PLANNING OUT THROUGH WHAT TIME PERIOD, RIGHT, SO THESE WERE [00:20:01] LOOKING OUT, UM, WE WERE USING THE 2024 AND THE 2025 REGIONAL TRANSMISSION PLANS, UM, FOR SOME OF THE BASIS OF THIS STUDY AND WORK. SO THAT'S LOOKING OUT SIX YEARS. SO 2031 WAS THAT STUDY YEAR. OKAY. SO WE'RE, WE'RE EXPECTING UPON COMPLETION, UM, MARGIN AGAINST RELIABILITY ISSUES IN, IN SPITE OF THE LARGE LOAD GROWTH THAT'S EXPECTED DURING THAT SAME TIMEFRAME. RIGHT? SO THIS IS TO BUILD OUT, TO MEET THAT, OKAY. UM, THERE COULD BE SOME SCENARIOS WHERE IF THE LOAD WISHES TO CONNECT SOONER, THEY MIGHT NOT BE ALLOWED TO CONNECT OR RAMP UP AS QUICKLY AS THEY WOULD LIKE, OR THERE MIGHT BE MITIGATIONS, UH, IN PLACE TO MAKE SURE WE PROTECT AGAINST ANY OF THOSE RELIABILITY CONCERNS. THANKS CHRIST. OKAY, WE'VE GOT A SECOND FROM CHRIS. AND, UH, ALL IN FAVOR? AYE. ANY OPPOSED? ANY ABSTENTIONS? THIS TIER ONE PROJECT IS ALSO ENDORSED. NEXT IS AGENDA [5.4 25RPG040 & 25RPG042 Combined Oncor Set 1 North and Central Texas Reliability Project & Oncor Set 2 North and Central Texas Reliability Regional Planning Group (RPG) Project] ITEM 5.4 25 R PG 0 4 0 AND 25 RRG RPG 0 42 COMBINED ENCORE, SET ONE NORTH AND CENTRAL TEXAS RELIABILITY PROJECT AND ENCORE SET TWO NORTH AND CENTRAL TEXAS RELIABILITY REGIONAL PLANNING GROUP PROJECTS. CHRISTIE, PLEASE, UH, WALK US THROUGH THOSE. ABSOLUTELY. SO THIS ONE IS $381 MILLION ENCORE PROJECT. UM, AGAIN, YOU'LL SEE THIS NAMING CONVENTION. WHAT ENCORE CHOSE TO DO TO TRY TO MOST EFFICIENTLY MOVE PROJECTS THROUGH FOR OUR REVIEW IS GR GROUPING THEM BY REGIONS, GROUPING THEM BY THINGS THAT WE SAW NEED BOTH IN 24 AND 2025 WHEN WE DID THAT SIX YEAR OUTLOOK AS WELL AS MAYBE ADDRESSING OTHER THINGS IN THAT PARTICULAR REGION. UM, IF YOU RECALL, THERE WAS A PROJECT THAT YOU VOTED OR WE VOTED ON, UM, THE MUSKOGEE AND VOSS LAKE PROJECT. THIS ONE WAS REMOVED FROM THE ORIGINAL, UH, RECOMMENDATION BECAUSE IT WAS COVERED THROUGH OTHER, UH, PROJECTS. THEN WE CONFIRMED THE NEED BASED OFF OF THE RELIABILITY NEED OFF OF THOSE REGIONAL TRANSMISSION PLANS. AND THEN WE REMOVED A SET OF UPGRADES THAT BRA US AND LONE STAR HAD RECOMMENDED. AND WERE CONDUCTING A SEPARATE STUDY UPON THESE, AND YOU'LL SEE THOSE AT A FUTURE DATE. AND ONE OF THE THINGS THAT DID INCLUDE IN HERE, UM, WE HAD SOME, SOME QUESTIONS AT THE THE TAC. AND SO THE BASIS FOR THE BOARD ENDORSEMENT IS LOOKING AT THE LOAD GROWTH. SO WHEN WE DID THE STUDY IN 2024, UH, YOU RECALL, YOU KNOW, THAT WAS THE FIRST YEAR WE STARTED SEEING, UH, THE LOAD GROWTH COMPARED, YOU KNOW, MORE THAN WHAT WE'D SEEN IN THE PAST. IF YOU RECALL, IN 2025 WHEN WE COLLECTED THE INFORMATION FROM THE UTILITIES, WE WENT WITH APPROACH TO REDUCE THE LOAD FORECAST, UH, BASED OFF OF HISTORICAL REALIZATION. THAT'S WHAT THOSE 2025 NUMBERS ARE. UM, AND THEN WHEN WE LOOKED, UM, AT THE PARTICULAR AREA, WE TOOK THAT STUDIED LOAD AND TOOK IT UP TO ITS FULL ASK AGAIN, WHEN YOU'RE DOING, UM, WHEN WE DID THE, IT'S BEEN DEEMED THE HAIRCUT LAST YEAR, WE CUT THOSE OFFICER LETTER LOADS BY 50%. THAT'S NOT HOW YOU WANNA PLAN THE TRANSMISSION SYSTEM. SO THAT TOOK US TO WHAT, UH, ABOUT 89,000 MEGAWATTS OF LOAD THAT WE STUDIED, UH, FOR THAT GROUP OF PROJECTS. SO THIS PROJECT WILL REQUIRE CCN, UM, IT'S GOT SOME UPDATES, SOME REBUILDS. UH, A FUN FACT AS I LOOK BACK THROUGH ON SOME OF THE, THE REBUILDS THAT ARE DOING FOR AGING INFRASTRUCTURE, SOME OF THAT INFRASTRUCTURE HAS BEEN IN PLACE SINCE THE 1920S. SO, UM, TIME TO, TO REBUILD AND REPLACE. SO BEFORE YOU, I WOULD REQUEST YOUR CONSIDERATION OF THE GROUP TWO UPGRADES. UM, AS A PART OF THE ENCORE SET, ONE SET TO SET OF PROJECTS WAS UNANIMOUSLY ENDORSED BY TECH QUESTION. ANY QUESTIONS FOR CHRISTIAN REPLACING SOMETHING A HUNDRED YEARS? OH, PEGGY, YEAH, I'VE GOT A QUESTION. UH, THIS, UH, ANTICIPATES A SIGNIFICANT REBUILD OF SUBSTATIONS IN TRANSMISSION. UH, AND GIVEN THE GROWTH IN THE AREA, DO WE ANTICIPATE ANY ISSUES WITH OUTAGES? SO THAT'LL BE SOMETHING, UM, WE DID NOTE, UM, AND YOU'LL NOTICE IN THE ERCOT INDEPENDENT REVIEWS INFORMATION WE GET FROM THE UTILITIES AS FAR AS THEIR COST ESTIMATES, THEY DO PLAN TO DO ENERGIZED HOT WORK. SO TO TRY TO LIMIT THE AMOUNT OF OUTAGES THAT ARE NEEDED FOR THE WORK TO BE DONE. SO THAT'S INCLUDED IN THEIR COST. UM, BUT THOSE ARE ALWAYS THINGS THAT WE WORK VERY CLOSELY WITH DAN'S TEAM AND THE UTILITIES AS THEY GET CLOSER TO REAL TIME, UM, WHEN OUTAGES CAN BE TAKEN. TRYING TO WORK WITH UTILITIES TO HAVE SHORT RESTORATION TIMES IN CASE WE SEE ISSUES ON [00:25:01] COMING, YOU KNOW, WITH THE WEATHER OR, UH, FORECAST SO THAT THEY CAN BE BACK IN SERVICE IF NEEDED. ANY OTHER QUESTIONS FOR CHRISTIE? IF NOT, I'LL ENTERTAIN A MOTION TO ENDORSE THIS PROJECT. THANK YOU JOHN. AND SECOND FROM KATHLEEN. ALL IN FAVOR? AYE. ANY OPPOSED? ANY ABSTENTIONS? THIS PROJECT HAS BEEN ENDORSED AS WELL. NEXT IS AGENDA [5.5 25RPG041 & 25RPG043 Combined Oncor Set 1 North Central and South Central Texas Reliability Project & Oncor Set 2 North Central and South Central Texas Reliability Regional Planning Group (RPG) Project] ITEM 5.5 25 RPG 0 4 1 AND 25 R PG 0 4 3 COMBINED ENCORE SET ONE NORTH CENTRAL, UH, NORTH CENTRAL AND SOUTH CENTRAL TEXAS RELIABILITY PROJECT, ENCORE, SET TO NORTH TEXAS, NORTH CENTRAL AND SOUTH TEXAS RELIABILITY REGIONAL PLANNING GROUP PROJECTS. CHRISTIE, PLEASE PROCEED WHEN READY. ALL RIGHT, SO AS YOU CAN SEE, WELL I THINK WE JUST, THAT'S THE ONE WE JUST COVERED. YEAH, IT'S THE, SORRY, I, I GOT OFF. I THOUGHT MAYBE I WAS GETTING THE SET ONE SET TOO. I GOT OFF TRACK HERE. SO [5.6 26RPG001 LCRA TSC and CEHE Euclid 765-kV Substation and Transmission Line Addition Planning Group (RPG) Project] AGENDA ITEM 5.6 25, RPG 0 0 1 L-C-R-A-T-S-C AND CEHE EUCLID 7 65 KVA SUBSTATION AND TRANSMISSION LINE. ADDITIONAL PLANNING GROUP PROJECT. ALL RIGHT, SO NOW CHRISTY, GO LAST BUT NOT LEAST, THIS IS, UH, A PROJECT THAT WAS SEEN AS A NEED AS WE STUDIED LAST YEAR, THE REGIONAL TRANSMISSION PLAN. SO IF YOU LOOK BACK TO THE WORK THAT WE DID AS LOOKING AT A STRATEGIC TRANSMISSION EXPANSION PLAN TO MEET LOAD GROWTH, UH, AND GENERATION CHANGES ON THE GRID, THIS WAS SOMETHING WE IDENTIFIED AS A NEED TO MOST EFFICIENTLY AND RELIABLY SERVE THAT LOAD GROWTH IN THE CENTRAL TEXAS CORRIDOR. SO IF YOU THINK ABOUT SOUTH OF AUSTIN, UH, TO HOUSTON, WHERE YOU'RE SEEING A LOT OF THAT, OR EXCUSE ME, SOUTH OF AUSTIN TO SAN ANTONIO, WHERE YOU'RE SEEING A LOT OF THAT LOAD GROWTH, UM, THE NEED IS ACTUALLY SHOWING UP IN THE NEARER TERM YEARS. UM, BUT THERE WERE NO OTHER SOLUTIONS THAT COULD BE BUILT QUICKER TO MEET THAT NEED. SO WE'LL HAVE TO WORK WITH THE UTILITIES IN THOSE AREAS FOR ALLOCATION OF, UM, MEGAWATTS AS THOSE PROJECTS MOVE FORWARD. JUMP TO, UM, THE PROPOSED PROJECT SUMMARY. IT WILL REQUIRE ONE USED 7 65 SUBSTATION THAT HASN'T ALREADY BEEN APPROVED THROUGH THE, THE STRATEGIC TRANSMISSION EXPANSION PLAN REVIEW. IT WILL REQUIRE CCN FOR, UM, MOVING FORWARD. AND I WOULD PAUSE HERE TO SEE IF YOU HAVE ANY QUESTIONS ABOUT THIS. SO AGAIN, THIS WAS SOMETHING WE STUDIED, UH, ALL OF 2025, SEEING THE NEED IN THE FUTURE, UM, AND CONTINUED TO DO ADDITIONAL ANALYSIS THIS YEAR, UM, TO BRING THIS INDEPENDENT REVIEW FORWARD FOR YOU. IT WAS UNANIMOUSLY ENDORSED BY TAP. ANY QUESTIONS FOR CHRIS? THIS IS ON TOP OF ALL THE OTHER APPROVED 7 65. CORRECT? SO IF YOU, UM, LOOK HERE AT THE GRAPH, THESE YELLOW LINES WERE THE PERMIAN BASIN RELIABILITY PLAN RECOMMENDATIONS WHEN WE STUDIED, UM, THAT WAS JUST WHEN WE STUDIED THE PERMIAN AREA AND SAW THE NEED FOR THAT TO BE ABLE TO SERVE THE PERMIAN AREA. AS THAT SAME YEAR WE CONDUCTED STUDIES TO LOOK AT THE WHOLE STATE, THAT'S WHEN WE STARTED SEEING A LOT OF THE GROWTH AND THE DEVELOPMENT AND THE NEED FOR MORE INFRASTRUCTURE. SO THIS WAS, UH, A RECOMMENDATION. THEN THESE PINK LINES, UH, WAS THE EASTERN PORTION YEP. WHICH YOU, UH, ENDORSED IN APRIL LAST YEAR. AND THEN THIS WOULD BE A CROSS ARM. UM, BETWEEN THAT AND THIS NEED WAS IDENTIFIED LAST YEAR AS WE WERE STUDYING THE CONTINUED GROWTH, UM, IN THIS REGION. CHRISTIE, ARE THERE DEPENDENCIES BETWEEN THIS AND ANY OF THE OTHER PROJECTS THAT ARE UP FOR APPROVAL? A MUST BE DONE IN ORDER, YOU KNOW, TO FINISH B, ET CETERA? RIGHT. SO, UM, I THINK WHEN YOU LOOK AT IT, IF YOU THINK ABOUT THESE 7 65 PIECES, THAT'S GONNA HELP SET UP PATHWAYS, THERE'LL BE THEN THE UNDERLYING INFRASTRUCTURE THAT IT'S ACTUALLY NEEDED TO CONNECT THE LOADS. THOSE PROJECTS WILL BE NEEDED TO, YOU KNOW, BUILD OUT AND SERVE THOSE LOADS AS WELL. ANY QUESTIONS FOR CHRISTIE? I GUESS ONE OTHER THING I WOULD ADD TO THAT IS, YOU KNOW, YOU MAY HAVE, YOU KNOW, I, I NOTED THAT A LOT OF THOSE PROJECTS THAT WE SAW THE NEED FOR THOSE IN BOTH 2024 AND 2025. AND SO, YOU KNOW, IT, IT'S ALL NEEDED TO BE ABLE TO RELIABLY, UM, AND MOST EFFICIENTLY SERVE THE GROWTH THAT WE'RE SEEING ON THE SYSTEM. OKAY. IF THERE ARE NO OTHER QUESTIONS OR CHRIS, OKAY. CHRIS HAS MOVED APPROVAL FOR THIS PROJECT A SECOND. OKAY. UH, WE'LL TAKE JOHN THIS TIME. UH, ALL IN FAVOR? AYE. ANY [00:30:01] OPPOSED? ANY ABSTENTIONS? OKAY, THIS IS PROJECT'S APPROVED NOW. I WAS RIGHT THE FIRST TIME. AGENDA ITEM 5.5 HAS NOT BEEN COVERED YET, SO WE NEED DO NEED TO COVER THAT ONE. YEAH, IT LOOKS ALMOST THE SAME AS AGENDA ITEM 5.4. ALL RIGHT. 5.5 IS A $381 MILLION. UH, ENCORE COMBINED SET ONE AND SET TWO, UH, SET OF PROJECTS, AGAIN, ANOTHER GROUPING OF THE PROJECTS THAT WE SAW A NEED FOR, UM, TRANSMISSION BUILD OUT, UM, IN BOTH THE 2024 AND 2025 RTP. UM, THESE WERE SUBMITTED TO US IN NOVEMBER OF LAST YEAR. UM, WE CONDUCTED A SINGLE INDEPENDENT REVIEW OF THESE TWO PROJECTS. UM, AGAIN, COMBINING THEM BY LOCATION AND NEED. UM, AGAIN, INCLUDED HERE WAS THE LOAD GROWTH, WHICH AS YOU CAN SEE, WE, WE WENT THROUGH BEFORE THE, THE LOAD THAT WE STUDIED IN 2024, HOW THAT LOAD WAS HAIRCUT CUTTED IN 2025 AND THE RESULTING STUDIED LOAD. ARE YOU SURE THAT WE DIDN'T GO THROUGH THIS ONE? THESE LOOK LIKE THIS SAME NUMBERS. CHAD, ARE YOU SURE? SO YOU HAVE 5.4, I THINK IT'S 5.4 THAT NEEDS TO GO THROUGH. THERE'S TWO ENCORE PROJECTS. UH, THEY HAVE SIMILAR TERMINOLOGY, BUT DIFFERENT INR NUMBERS, SO I THINK WE MISSED 5.4. YEAH, 5.4. IT'S THE LARGER PROJECT. YES. OKAY. RIGHT. 'CAUSE WE DID THE 381 MILLION. THIS IS THE, YEAH, THIS IS THE LARGER PROJECT. ALL RIGHT. WE'LL BACK UP TO 5.4. SORRY ABOUT, I'M JUMPING AHEAD THERE TO THE WRONG ONE. ALL RIGHT. 5.4, TWO POINT, UH, 6 3 6 $3 BILLION. UM, AGAIN, THIS ONE, UH, CAME TO US FROM ENCORE, AGAIN, LOOKING AT THAT NEED TO SERVE, UH, THEIR REGION. WE DID AN INDEPENDENT REVIEW OF THE TWO PROJECTS AS WE PASSED THEM THROUGH, UM, THE GROWTH THAT WE SAW HERE. AGAIN, VERY SIMILAR, SAME STRUCTURE THAT THE TABLE, YOU CAN SEE FROM WHAT WE HAD STUDIED IN BOTH 2024 AND 2025. UM, WHEN WE INSTATED THE FULL LOAD THAT WAS SUBMITTED FROM 2025, IT TOOK US UP TO ALMOST 72 GIGAWATTS OF STUDY LOAD. WE LOOKED AT THOSE AND GROUPED THEM INTO DIFFERENT SETS, UM, OF PROJECTS. WE EVALUATED THE SOUTHERN DFW AREA. WE ACTUALLY PULLED THAT OUT. UH, YOU RECALL, YOU VOTED UPON THAT IN APRIL. THEN WE LOOKED AT THE REMAINING LOADS AND AREAS CONFIRMED THEIR RELIABILITY NEED BASED OFF OF BOTH THE 2024 AND THE 2025 SHOWING THE NEED. UM, THERE WAS ALSO A ALTERNATIVE IN THEIS SUBMITTED BY TNNP AND BY BRAZOS FOR AN ALTERNATIVE. AND THEN WE TOOK A LOOK AT THAT, UH, ADDITIONAL OPTION AS WELL AS A PART OF THE STUDY REVIEW. AND WHEN WE WENT THROUGH THAT REVIEW, UM, WE RECOMMENDED ULTIMATELY THAT YOU MOVE FORWARD WITH THIS OPTION, UM, FOR THE OPTION THREE THAT WAS INCLUDED FROM ENCORE VERSUS THE ONE BY TNMP AND BRAZOS, UH, ELECTRIC, UH, IT WILL REBUILD EXISTING INFRASTRUCTURE, UM, THAT GOES BACK FROM THE, THE 1950S TO THE EARLY TWO THOUSANDS. SO A WIDE VARIETY OF UPGRADES THAT ARE NEEDED. OKAY. ANY QUESTIONS FOR CHRISTIAN? JULIE, CHRISTY, I HAVE A GENERAL QUESTION. OKAY. AND WE'RE ENDORSING BILLIONS OF DOLLARS WORTH OF TRANSMISSION PROJECTS THAT ARE GONNA IMPACT TEXAS FOR THE NEXT SEVERAL DECADES AND REPLACING VERY OLD INFRASTRUCTURE. IT WHAT IS, UM, A WAY WE CAN HAVE ACCOUNTABILITY AND TRANSPARENCY TO TRACK THESE PROJECTS OVER TIME, BUT, YOU KNOW, HERE IN OUR VENUE AT THE BOARDROOM, RIGHT? SO WE CAN LOOK AT WAYS TO BRING MAYBE A, AT LEAST AN ANNUAL REPORT TO YOU ALL. UM, AS YOU KNOW, INFRASTRUCTURE BUILD OUT TAKES SOME TIME. SO IN A PROJECT THAT YOU APPROVED TODAY, MIGHT NOT BE IN SERVICE FOR FOUR OR FIVE YEARS, BUT WHAT WE CAN LOOK AT, UM, THERE IS A PLANNING GUIDE REQUIREMENT FOR POSTING OF TRANSMISSION PROJECT STATUS. SO THINGS THAT ARE MOVING FORWARD, UH, WHERE THE UTILITIES, UH, PROVIDE INFORMATION TO AT LEAST TWICE A YEAR, AND WE UPDATE THAT, WHAT I'D LIKE TO DO IS, YOU KNOW, GET YOUR FEEDBACK, UM, ON WAYS WE CAN IMPROVE SUMMARIZING THAT, REALLY FOCUSING ON KEY PROJECTS THAT WE KNOW, FOR EXAMPLE, THAT MAY HELP US GET OUT OF, UM, UH, AN RMR FOR EXAMPLE, OR OTHER, UH, RELIABILITY NEEDS OF REGIONS THAT WE'RE WORKING ON. AND SO WE CAN GIVE YOU MORE REGULAR UPDATES ON THOSE. OKAY. ANY QUESTIONS FOR CHRISTIE? WITH THAT, I'LL ENTERTAIN A MOTION TO APPROVE [00:35:01] A AGENDA ITEMS 5.4 AND 5.5. SO MOVE. SO JULIE, UH, SECOND FROM JOHN. ALL IN FAVOR? AYE. AYE. ANY OPPOSED? ANY ABSTENTIONS? OKAY. THESE TIER ONE PROJECTS ARE ALSO APPROVED, SO THERE'S $6.5 MILLION, GIVE OR TAKE OF INFRASTRUCTURE IMPROVEMENTS FOR TEXAS. UH, FROM THOSE, UH, SIX AGENDA ITEMS, WE'RE NOW GONNA MOVE TO AGENDA ITEMS SIX, [6. System Planning and Weatherization Update] SYSTEM PLANNING AND WEATHERIZATION UPDATE. CHRISTIE, YOU ARE COVERING THIS ONE. I AM. ALRIGHT, SO I WANNA GIVE YOU AN UPDATE ON SOME OF THE WORK THAT THE TEAM IS DOING TO PREPARE FOR, UH, SUMMER FROM A WEATHERIZATION PERSPECTIVE, WORKING WITH THE STAKEHOLDERS AS WELL AS AN UPDATE ON OUR RESOURCE ADEQUACY REPORTING TIMELINES AND HOW THOSE ARE BEING IMPACTED BY THE LONG-TERM LOAD FORECAST. AS WELL AS JUST KINDA GIVE YOU AN OVERALL, I KNOW WE, WE TALKED ABOUT A LOT OF REGIONAL PLANNING GROUP PROJECTS, BUT WHAT ELSE IS IN THE HOPPER? UM, AND WHERE DO WE GO FOR THE REST OF THE YEAR? SO FROM A SUMMER PERSPECTIVE, THE TEAM HAS BEEN WORKING WITH STAKEHOLDERS, MAKING SURE WE'RE PROVIDING A LOT OF OPPORTUNITIES FOR SUMMER WEATHERIZATION WORKSHOPS, TRYING TO PROVIDE FORUMS FOR RESOURCE OWNERS AND UTILITIES TO SHARE BEST PRACTICE INFORMATION, AS WELL AS REALLY FOCUSING ON THOSE RESOURCES THAT ARE NEW TO THE GRID. TOMORROW YOU'LL HEAR PABLO TALK ABOUT ALL OF THE MEGAWATTS THAT HAVE BEEN ADDED TO THE SYSTEM, MAKING SURE THEY UNDERSTAND THE WEATHERIZATION STANDARDS AND THE REQUIREMENTS OF THEM TODAY, UM, IS THE DEADLINE PER PUC RULE FOR THE, UH, UTILITIES AND RESOURCE OWNERS TO DECLARE THEIR PREPARATION FOR TO THE SUMMER WEATHERIZATION STANDARDS. SO WE'LL BE COLLECTING INFORMATION ON THAT AND WE'LL BE ALSO KICKING OFF OUR SUMMER WEATHERIZATION SCHEDULE. WE EXPECT THAT WE WILL HEAD AT LEAST 600 FACILITIES AS WE MOVE THROUGH THE SUMMER MONTHS. A RECAP, UM, ON OUR RESOURCE ADEQUACY REPORTING, WE'VE TALKED ABOUT THE MONTHLY OUTLOOK ON RESOURCE ADEQUACY, UM, AND HOW THAT COMPARES TO PREVIOUS YEARS. UM, WE CONTINUE TO SEE A LOT OF LOAD GROWTH ON THE SYSTEM, UM, COMPARED TO YEAR AFTER YEAR, BUT WE'RE ALSO SEEING, UM, GENERATION BEING ADDED TO THE SYSTEM THAT'S HELPING REDUCE THE RISK OF GOING INTO EMERGENCY CONDITIONS. UM, LOOKING AT THE PROBABILITIES OVER THE SUMMER, UM, LESS THAN 1% OF GOING INTO, UM, AN EMERGENCY SITUATION. I WILL NOTE THAT THAT AUGUST NUMBER WAS SOMETHING THAT WE FILED. IT'S A, A MORE EQUIVALENT THAT WE FILED IN NARC. UM, YOU MAY HAVE SEEN SOME HEADLINES ON THEIR ASSESSMENTS THAT CAME OUT THIS PAST MONTH. I WILL CAVEAT THAT, UM, ANALYSIS WAS DONE ON A, THE FORECAST THAT WE HAD AVAILABLE TO US AT THAT TIME, WHICH WAS USING SOME OF, UM, LAST YEAR'S LONG-TERM LOAD FORECAST INFORMATION. WE WILL BE UPDATING THAT AND OUR TARGET, OUR REQUIRED POSTING TIMELINE FOR THE AUGUST MORE FOR THIS YEAR, UTILIZING OUR MOST RECENT INFORMATION WILL BE LATER THIS WEEK. IT'LL BE ON FRIDAY. WELL THEN THAT WILL BE POSTED. WE CONTINUE TO SEE THOSE HIGHEST RISK HOURS BEING IN THE EVENING. UM, AS YOU GO THROUGH A A HOT SUMMER DAY, YOU LOSE THE SOLAR GENERATION OF THE SYSTEM, AND THEN IT'S LOOKING AT PROBABILITIES OF IMPACTS TO THAT LOAD, STAYING HIGH WIND BEING AVAILABLE IN THE STATE OF CHARGE OF BATTERIES. AND SO THAT CONTINUES TO BE THE AREA OF FOCUS. CHRISTIE, JUST QUICK, HOW DOES THIS COMPARE TO, YOU KNOW, OTHER PERIODS? YOU KNOW, UH, LIKE LAST YEAR AS WE HEAD INTO THE SUMMER MONTHS, THIS, THESE PROBABILITIES SEEM VERY LOW, RIGHT? SO THESE ARE ARE VERY COMPARABLE TO WHAT WE, UM, EXPERIENCED IN 2025. I DID GO BACK AND PULL AND LOOK AT NUMBERS OF WHAT WE WERE REPORTING IN 2024. AND IN THAT TIMEFRAME, WHAT WE SAW WAS, UM, IN, IN LIKE THE 10 TO MAYBE 16% RANGE OVER THOSE SUMMER MONTHS OF BEING A, A, A PROBABILITY OF GOING IN INTO AN EMERGENCY CONDITION. AGAIN, WE'VE CONTINUED TO SEE THAT LOAD GROWTH ON THE SYSTEM, BUT WE HAVE SEEN, UM, THE ADDITION OF, UM, BATTERY ENERGY STORAGE, UM, FACILITIES TO BE ABLE TO HELP IN THAT SOLAR RAMP DOWN PERIOD. UM, SO THAT HAS HELPED TO MAINTAIN A LOWER, UH, RISK FOR A SHORT DURATION TYPE EVENT. AN UPDATE ON THE 2026 MAY CAPACITY, DEMAND AND RESERVE REPORT AND THE RELIABILITY ASSESSMENT. UM, WE FILED WITH THE COMMISSION BACK IN APRIL, THE LONG-TERM LOAD FORECAST. AND AS YOU'RE AWARE, THOSE DISCUSSIONS, UM, WE HAVE BEEN WORKING WITH THE COMMISSION, UM, THEY'VE GOT, WE BROUGHT THE INFORMATION TO 'EM, IT WAS DISCUSSED THAT WE NEED TO LOOK AT HOW DOES THAT LONG TERM LOAD FORECAST, UH, GET ADJUSTED TO MORE RIGHT SIZE, WHAT WE EXPECT ON THE SYSTEM. UM, THE COMMISSION'S GOT A PROCEEDING THAT'S GOING ON THERE. THEY'RE GETTING [00:40:01] COMMENTS THROUGH TODAY, I BELIEVE. UM, AND WE EXPECT, UM, TO HEAR BACK FROM THE COMMISSION AT THEIR JUNE 18TH OPEN MEETING. SO THAT DECISION WILL IMPACT WHAT'S NEXT FOR, UM, THE RELIABILITY ASSESSMENT. UM, ANY DELAY TO THE FORECAST, WHICH WE THOUGHT WE'D ALREADY HAVE, IT'S ABOUT A MONTH FOR MONTH DELAY ON WHEN WE'LL COMPLETE OUR ANALYSIS. THE OTHER IMPACT THAT IT HAD ON RESOURCE ADEQUACY REPORTING IS WE ALSO UTILIZE IT FOR THE CAPACITY, DEMAND AND RESERVE REPORT. AND WE HAVE FILED WITH THE COMMISSION AND ASKED FOR A GOOD CAUSE EXCEPTION, UM, TO NOT POST THIS REPORT UTILIZING, UM, THE LONG-TERM LOAD FORECAST. IN LIEU OF THAT, WE DID PROVIDE GENERATION INFORMATION. UM, THAT SIDE OF THE EQUATION IS AVAILABLE FOR INTERESTED PARTIES. UM, AND THEN WE WOULD SEEK TO PICK UP IN DECEMBER ONCE WE HAVE, UM, A REVISED LONG-TERM LOW FORECAST. ALL RIGHT, AND JUST KIND OF A QUICK PUT IT IN A PICTURE, WE CONTINUE, YOU CAN SEE IN 2026, UM, WE'VE ALREADY GOT MORE REGIONAL PLANNING GROUP PROJECTS THAN WE HAD IN 2025. UH, KUDOS TO THE TEAM AND BACK AT THE, AT THE SHOP THAT WORKED THROUGH GETTING ALL OF THOSE PROJECTS TO YOU FOR YOUR CONSIDERATION TODAY. AS THE APRIL BOARD MEETING, YOU HAD ENDORSED 4.75, UH, AS BILL SUMMARIZED EARLIER, ANOTHER 6.5 WAS ENDORSED TODAY TO MEET THE RELIABILITY AND GROWTH NEEDS OF THE SYSTEM. UH, WE ARE CURRENTLY REVIEWING, IF YOU TAKE OUT THAT SIX, ABOUT $22 BILLION WORTH OF ADDITIONAL PROJECTS. UM, WE WILL CONTINUE WORKING THROUGH THOSE, BUT AS WE GET INTO THE NEXT DISCUSSION ABOUT COMPREHENSIVE TRANSMISSION PLANNING AND WHERE DO WE GO FROM HERE, WE'LL GO THROUGH A TRANSITION PERIOD WHERE WE'LL HAVE TO EVALUATE DOES IT MAKE SENSE TO CONTINUE REVIEWING, UM, AND ENDORSING PROJECTS THROUGH THE REGIONAL PLANNING GROUP PROCESS. WITH THAT, I'LL SEE IF YOU HAVE ANY QUESTIONS BEFORE I JUMP TO THE NEXT AGENDA ITEM. ANY QUESTIONS FOR CHRISTY? ALL RIGHT, NEXT IS J [6.1 Update on Comprehensive Transmission Planning] ITEM 6.1. UH, CHRISTIE'S GONNA GIVE US AN UPDATE ON COMPREHENSIVE TRANSMISSION PLANNING. UM, THIS DISCUSSION IS INTERESTING OR REALLY RELEVANT, UH, AND IT'S GONNA TIE IN REALLY NICELY WHEN WE START TALKING ABOUT BATCH C ROAD, UH, LATER TOMORROW. SO, CHRISTIE, ALL RIGHT, WELL, AS WE'VE BEEN TALKING ABOUT, UM, FOR THE LAST COUPLE OF YEARS AS WE STARTED TO SEE HOW LOAD GROWTH IS EVOLVING, HOW QUICKLY, UM, LOADS CAN DEVELOP AND COME TO THE SYSTEM, THE VARYING GENERATION MIX, UH, WE'VE RECOGNIZED, UM, THE NEED FOR NO LONGER REGIONAL TYPE PLANNING. I'VE HEARD YOU ALL ASK QUESTIONS IN YOUR PREVIOUS MEETINGS. HOW DOES THE BATCH PROCESS WORK WITH THE RPG PROCESS? HOW DOES IT WORK WITH YOUR LONG-TERM TRANSMISSION PLANNING? SO WHAT I WANNA GO THROUGH TODAY, UM, IS KIND OF A HIGH LEVEL CONCEPT THAT WE'RE STARTING TO DISCUSS. AND THE GOAL REALLY IS, IS ONCE YOU, UM, PASS THROUGH THE BATCH ZERO REVISION REQUEST, AS A DEVELOPER, AS A LARGE LOAD, WHAT DOES THAT MEAN FOR ME? IF I DON'T MAKE IT INTO THAT BATCH ZERO PROCESS, WHAT ARE MY NEXT STEPS? AND SO AS A PART OF THIS PROCESS, WE'LL LAY OUT WHAT THAT IS, UM, WHAT IT'S NOT, AND HOW DO WE MOST EFFICIENTLY USE RESOURCES BOTH AT ERCOT, THE UTILITIES AND STAKEHOLDERS TO RECOMMEND, UH, TRANSMISSION PLANTS GOING FORWARD? SO WHERE WE'RE AT TODAY, WE'VE GOT DISTINCT PROCESSES, UM, WITH LINES THAT ARE A LITTLE BIT BLURRED TO CONNECT THEM ALL. SO YOU'VE GOT A BATCH PROCESS THAT HAS AN ENTRY CRITERIA FOR LARGE LOADS. YOU HAVE AN RPG PROCESS THAT HAS A DIFFERENT CRITERIA FOR LARGE LOAD ENTRY FOR REVIEW, AND THEN YOU'VE GOT A REGIONAL TRANSMISSION PLAN THAT'S REALLY JUST A ROADMAP. LOOKING OUT INTO THE FUTURE, WHAT WE SEE IS IF WE KEEP THESE THREE DISTINCT SEPARATE PROCESSES, YOU KNOW, THERE'S SOME RISK, UM, WE WILL, UH, POTENTIALLY HAVE OUTTA SYNC PLANNING HORIZONS. UM, IT REALLY IS NOT SET UP FOR GOOD FEEDBACK LOOPS ACROSS THE DIFFERENT PROCESSES. AND REALLY, UM, AS YOU LOOK AT, UM, THE IMPACT ANALYSIS TOMORROW FOR BATCH ZERO, YOU CAN SEE THERE IS A HUGE RESOURCE, PEOPLE RESOURCE TO KEEPING ALL THESE PROCESSES SEPARATE. IF WE MOVE TO A MORE INTEGRATED COMPREHENSIVE APPROACH, WE BELIEVE WE CAN UTILIZE OUR RES PEOPLE RESOURCES MORE EFFECTIVELY. WHAT WE'RE LOOKING AT IS HOW DO WE GET TO A COMPREHENSIVE TRANSMISSION PLANNING PERSPECTIVE WHERE WE'RE NO LONGER LOOKING AT THINGS SEPARATELY? WHAT, UM, WE'LL GO INTO A LITTLE BIT MORE, BUT I, I WOULD ENVISION SOMETHING THAT'S INTEGRATED, UM, WHERE WE'LL HAVE SHARED MILESTONES. THERE'S EASY HANDOFFS, UM, BETWEEN THE VARIOUS STEPS THAT'S NEEDED TO CLOSE THE LOOP AND GET CERTAINTY BACK TO THE CUSTOMER. SO KEY OBJECTIVES, WE WANNA MAKE SURE WE'RE PROVIDING CERTAINTY. THAT'S SOMETHING WE HEARD LOUD AND CLEAR, IS THE BATCH ZERO [00:45:01] DISCUSSIONS. DEVELOPERS DON'T WANT RE STUDIES. THEY WANT TO KNOW TIMELINES. THEY WANT TO KNOW WHERE THEIR ENTRY CRITERIA IS, WENT TO THE NEXT TIMELINE. WE WANNA HAVE A PREDICTABLE PROCESS THAT ENSURES TIMELINE TIMELINESS AND GIVES US A TIME BOUND PLANNING CYCLE WHERE THERE'S CLEAR ENTRY CRITERIA POINTS. MOST IMPORTANTLY, WHEN WE COME OUT OF THAT, WE WANNA MAKE SURE WE HAVE SOMETHING THAT'S ACTIONABLE. UM, I'VE, YOU KNOW, SHARED WITH FOLKS AS WE LOOK AT THE REGIONAL TRANSMISSION PLAN, I ALWAYS REMIND THEM THAT'S JUST A ROADMAP. THEN THERE WAS ADDITIONAL STUDY THAT WAS NEEDED. AND SO THAT CAN GIVE A LONGER PROCESS TO BE ABLE TO GET ACTIONABLE PLANS. WE WANNA HAVE CONCRETE PLANS WHERE WE COME OUT OF THIS CYCLE SO THAT UTILITIES KNOW WHAT THEY NEED TO GO AND CONSTRUCT AND THE CUSTOMERS KNOW WHEN THEY CAN BE SERVED. AND AGAIN, BACK TO EFFICIENCY, BOTH AT ERCOT, AT THE UTILITIES, UM, AND FOR, UM, DEVELOPERS THAT MAY FILL, UH, YOU KNOW, CAUGHT IN A CYCLE OF RE STUDY, WE WANNA GIVE THEM, UH, EFFICIENCY AS WELL. NOW, IT'S NOT GONNA BE EASY. THERE'S GONNA BE SOME CHALLENGES AS WE GO THROUGH THIS PROCESS. WE'VE GOT LEGACY PLANNING CRITERIA, PLANNING RULES THAT WE'VE BEEN USING FOR WELL OVER 20 YEARS IN THE ERCOT MARKET. AND SO HOW DO WE TRANSITION THAT, MAKING SURE THAT, UM, WE DON'T HAMPER THE WORK THAT NEEDS TO BE DONE. IN THE INTERIM, WE WILL WORK WITH THE STAKEHOLDERS. THIS IS GONNA BE A, A PROCESS. UM, WE'RE HOPING TO SET IT UP IN A WAY THAT'S NOT AS, UM, INTENSE AS WHAT YOU ALL WENT THROUGH THE LAST SIX MONTHS. WE WANT TO TRY TO UTILIZE REGULAR STAKEHOLDER FORUMS VERSUS EXTRA WORKSHOPS UNLESS THAT'S JUST NEEDED. SO AGAIN, UM, SOMETIMES A PICTURE REALLY HELPS. WHAT YOU HAVE HERE ON THE LEFT HAND SIDE IS THE WAY THINGS WORK TODAY, YOU'VE GOT A BATCH STUDY PROCESS THAT'S RUNNING IN ABOUT 12 MONTHS IF APPROVED, UM, TOMORROW. THEN YOU'VE GOT THIS LOOK AHEAD ROADMAP THAT'S RUNNING CONCURRENTLY. AND THEN YOU HAVE VARIOUS RPG PROJECTS, UM, AND AGAIN, POTENTIAL FOR, UH, DISCONNECTED PROCESSES AND DUPLICATE WORK. WHERE WE WOULD LIKE TO GO IS KEEPING THAT ANNUAL CADENCE FOR DEVELOPERS, GIVING THEM THE CERTAINTY AS THEY GO THROUGH THE BATCH STUDY PROCESS. THINK OF THAT AS LIKE, THAT'S THE SCREENING WHERE THEY GET INFORMATION ABOUT THEIR ALLOCATION. UM, AND THEN WE MOVE FORWARD TO THE TRANSMISSION PLANNING ASPECT OF IT, KEEPING THAT, UM, INTO A 12 MONTH CYCLE. BUT THEN HOW DO WE FIT ON THE OTHER REQUIREMENTS THAT WE HAVE FROM A NERC CRITERIA OR, UM, ECONOMIC ANALYSIS THAT'S REQUIRED THAT WE CAN FIT ON TO FOLLOW THAT. BUT IT SHOULDN'T HAMPER WHEN A, A LARGE LOAD THAT'S LOOKING TO CONNECT TO THE SYSTEM, THEY WOULD STILL BE ON A 12 MONTH CADENCE. THESE ARE THINGS, THERE'S A LOT OF DETAILS TO WORK OUT. WE WANT TO USE THE GUIDING PRINCIPLES THAT WE'VE ALREADY LEARNED FROM ALL OF THE STAKEHOLDER DISCUSSIONS, BUT WE LOOK FORWARD TO WORKING WITH STAKEHOLDERS, UH, WITH REGULATORS TO KEEP THIS MOVING FORWARD SO THAT WE'RE PROVIDING ALL OF THOSE KEY OBJECTIVES THAT WE'RE SETTING OUT FOR. SO WHEN WILL THIS HAPPEN? WE'RE TARGETING BEING BACK TO YOU BY NO LATER THAN THE FEBRUARY, 2027 BOARD. THAT'S CRITICAL BECAUSE WE WANT TO MAKE SURE THERE'S PLENTY OF TIME FOR THE RULES TO BE IN PLACE SO THAT, UM, DEVELOPERS, LARGE LOAD ENTITIES THAT ARE LOOKING TO CONNECT THAT DON'T MAKE IT IN THE BATCH ZERO PROCESS. SO THEY HAVE SOME CERTAINTY ON THOSE RULES AND CAN BE PREPARED TO ENTER INTO THE NEXT ANNUAL CADENCE OF A BATCH STUDY PROCESS, WHICH CAN ONLY KICK OFF AFTER WE COMPLETE THIS FIRST BATCH. IT'S GOTTA BE SEQUENTIAL. AND SO WE WILL BE WRAPPING THAT UP IN JUNE OF NEXT YEAR, AND THIS WOULD BE THE STARTING POINT FOR THE NEXT ONGOING BATCH THAT WOULD KICK OFF OUR COMPREHENSIVE TRANSMISSION PLANNING PROCESS. IF, IF I CAN ASK A QUESTION ON THIS SLIDE. SO WHAT WOULD BE THE ESTIMATED TIMELINE WHEN THE RULES WOULD BE READY FOR BATCH ZERO? BECAUSE THAT WOULD BE BEFORE JUNE OF 2027. WHEN DO YOU THINK THEY WOULD BE READY? SO THE RULES FOR THE RULES FOR BATCH, BATCH ONE ON, WE WOULD START WORKING ON THOSE. WE WANT TO HAVE A, A STAKEHOLDER PROCESS WHERE WE HAVE MAYBE SOME, UH, WORKSHOP TYPES WHERE WE GET DIRECT FEEDBACK, NOT REALLY NECESSARILY ABOUT BATCH IN AND ITSELF, BUT ABOUT HOW DO WE EVOLVE THE PLANNING PROCESS. SO WE MEET, YOU KNOW, OUR NERC CRITERIA, WE MEET THE ERCOT PLANNING GUIDE CRITERIA, WE MEET THE NEEDS THAT THE UTILITIES HAVE FOR BEING ABLE TO GET PROJECTS APPROVED. WE WOULD LIKE TO DO THAT, UM, OVER THE JULY, IN EARLY AUGUST TIMEFRAME TO GET THAT FEEDBACK SO THEN WE CAN BEGIN WRITING THE RULES. AND I WOULD EXPECT THOSE STAKEHOLDER DISCUSSIONS TO BE IN THE FALL SO THAT WE CAN GET YOU THE RECOMMENDATION BY THE FEBRUARY BOARD MEETING. I THINK ONE OF THE KEY POINTS, UM, A LOT OF DISCUSSION WENT IN THE BATCH ZERO ABOUT THE ENTRY CRITERIA MM-HMM . AND WHAT STUDIED LOAD, WHAT'S SPACE LOAD. UM, I'M THANKFUL THAT WE WON'T HAVE TO HAVE THOSE DEBATES [00:50:01] AS WE GO THROUGH THIS BECAUSE THAT'S ALL GONNA BE SET BY THE COMMISSION RULE MAKING ON THE STANDARDIZATION AND THE FINANCIAL SECURITY REQUIREMENTS. WE WILL BE USING THAT FOR ENTRY CRITERIA INTO THE NEXT BATCH PROCESS. OKAY. SO THEORETICALLY THE, THE PLANNING AND TIMING WOULD ALL BE RULES WOULD ALL BE AVAILABLE FOR, UH, FOR STAKEHOLDERS TO KNOW BY THE FIRST QUARTER OF NEXT YEAR FOR BATCH ONE? THAT'S CORRECT. OKAY. THAT'S GOOD BECAUSE OF, OF ALL THE CALLS, CALLS I GOT REGARDING BATCH ZERO, EVERYBODY, THE ADMONITION WAS HURRY UP AND GET BATCH ONE READY TOO, SO THAT, THAT WE KNOW WHAT THOSE RULES ARE. SO THAT'S GOOD THAT YOU'RE MOVING SO QUICKLY ON THAT, YOU KNOW, ONE OF THE THINGS THAT WE'VE GOTTEN ASKED A LOT IS, WELL, CAN'T YOU, YOU KNOW, START BATCH ONE SOONER? AND SO IF YOU THINK ABOUT IT, IT'S GOTTA BE AN INTEGRATED PROCESS. WE HAVE TO KNOW WHICH LOADS COMMIT OUT OF BATCH ZERO. WE HAVE TO KNOW WHAT TRANSMISSION, UM, IS GOING TO BE RECOMMENDED FOR THOSE THAT COMMIT. AND THEN THAT GETS USED TO SEED OUR BASE CASES FOR THE NEXT STUDY OF LOADS. AND SO WE CAN DO A LOT OF PRE-WORK, UM, AND WE CAN WORK TO GET THOSE, UH, LARGE LOADS THAT MEET THEIR CRITERIA. UM, ANOTHER QUESTION THAT'S COME UP IS, YOU KNOW, I KNOW I'M NOT GONNA MAKE IT INTO BATCH ZERO. WHAT CAN I DO TO KEEP MY PROGRESS MOVING FORWARD? UM, WHAT OUR RESPONSE WOULD BE, CONTINUE WORKING WITH YOUR UTILITY. UM, THERE'S SCREENING STUDIES THAT THEY CAN DO, UM, FOR FACILITIES, UM, EXTENSIONS, WHAT THEY'RE GONNA HAVE TO PROVIDE, THAT'LL HELP BE BETTER PREPARED AS WELL. AND OF COURSE, FOLLOW THE COMMISSION RULEMAKING SO YOU KNOW WHAT THAT FINANCIAL CRITERIA IS REQUIRED TO GET IN AS WELL. THANKS. SO CHRISTIE, WHAT'S THE GENERAL FEEDBACK YOU'VE GOTTEN FROM STAKEHOLDERS ON THIS PROPOSED CHANGE? UM, THE ONLY, UH, WE, WE PREVIEWED THIS WITH A LARGE LOAD WORKING GROUP MM-HMM . LAST MONTH, AND THERE WERE SOME QUESTIONS ABOUT THAT, THE TIMELINE. OF COURSE, FOLKS ALWAYS WANT THINGS QUICKER, SOONER, BUT IT'S UNDERSTANDING WHAT, HOW EVERYTHING FITS TOGETHER. I THINK FROM THE UTILITIES THAT I'VE TALKED WITH ABOUT MOVING TO THIS PROCESS, THEY LIKE IT BECAUSE THEY HAVE AN ACTIONABLE PLAN, IT SEQUENCES TOGETHER. UM, AND, BUT IT'S JUST GONNA BE US WORKING IN PARTNERSHIP WITH THEM TO MAKE SURE WE'RE SETTING UP TIMELINES BECAUSE THIS CAN ONLY BE EFFECTIVE, UM, IF THE UTILITIES CAN WORK WITH US IN THOSE TIMELINES. UM, AND MOVING PROJECTS, MAKING RECOMMENDATIONS BACK AND FORTH FOR WHAT CAN AND CAN'T BE DONE ON THEIR SYSTEM. BUT NOBODY'S IDENTIFIED FATAL FLAWS AT THIS POINT IN TIME. WHAT'S BEEN, IT'S, IT'S A VERY EARLY IN THE PROCESS, SO YEAH. OKAY. NO. ALL RIGHT. SO WE'LL KEEP YOU UPDATED ON THE PROGRESS OF THIS. SO WHEN YOU'RE BACK IN SEPTEMBER, UM, HOPEFULLY WE'LL HAVE A, A GOOD ROADMAP OF WHERE WE'RE AT. UM, PART OF THIS, UM, JEFF MAY BE TALKING ABOUT THIS TOMORROW AS WELL. YOU KNOW, THIS IS LOOKING AT THE, I'M JUST REALLY TALKING ABOUT THE PLANNING ASPECT, BUT THERE WERE A NUMBER OF ITEMS THAT WERE, AND ACTUALLY THERE MIGHT BE ONE MORE SLIDE HERE. UM, A LOT OF ITEMS THAT AS WE WENT THROUGH BATCH ZERO, YOU KNOW, THERE WASN'T ENOUGH TIME TO, UH, COMPLETELY RESOLVE THESE ISSUES AND THEY GOT KIND OF PUT ON A PARKING DECK. THIS IS JUST A BRIEF SUMMARY OF THAT LIST. UM, I THINK, YOU KNOW, THE TEAM'S TRACKING 2030 ITEMS NOW WE'LL BE LOOKING AT THOSE AND PRIORITIZING, YOU'LL SEE PROBABLY A FLURRY OF REVISION REQUESTS OUTSIDE OF THIS ONE, UM, TO CONTINUE EVOLVING AND IMPROVING THE PROCESS. KRISTI, IS THERE AN OPPORTUNITY HERE TO UTILIZE AI TOOLS TO REFINE THIS? ABSOLUTELY. SO WE'RE ALWAYS LOOKING AT, UH, DIFFERENT OPTIONS OF HOW WE CAN IMPROVE OUR PROCESSES, BE MORE EFFICIENT, AND SO WE ARE REVIEWING SOME OF THE DIFFERENT TOOLS. UM, I CAN, YOU KNOW, WON'T QUOTE ANYTHING THAT WE'RE REVIEWING BY NAME. SOME OF THEM DO NOT PROVIDE EVERYTHING THAT WE HAD HOPED THEY WOULD PROVIDE, AND WE'VE TAKEN 'EM OFF A SHORT LIST, BUT WE WILL CONTINUE TO REVIEW. UM, IN FACT, WE HAD A MEETING EARLIER TODAY WHERE WE HEARD, UM, HOW THE TEAM IS REVIEWING TOOLS AND LOOKING AT WAYS TO BE MORE EFFICIENT FROM THE BATCH ZERO PROCESS. UM, I WOULD ALSO NOTE IT'S GONNA BE IMPORTANT AS WE GO THROUGH BATCH ZERO, WE'RE GONNA LEARN A LOT, UM, ABOUT HOW TO MORE EFFICIENTLY DO THIS. AND SO WE MAY BE ABLE TO EVEN SHORTEN SOME OF THE TIMELINES IF WE'RE ABLE TO GET SOME LESSONS LEARNED. UM, AND WE'LL CONTINUE EVOLVING WITH INFORMATION WE GET. ALL RIGHT. I THINK THAT'S THE END OF MY MARATHON CHAIRMAN. OKAY. THANK YOU, KRISTY, ANY FINAL QUESTIONS FOR KRISTY? KRISTY, WE APPRECIATE ALL THE HARD WORK YOU AND, UH, YOUR TEAM HAVE DONE. UH, YOU'VE GOT A LOT IN FRONT OF YOU STILL THOUGH, SO KEEP IT UP. ALL RIGHT, NEXT WE'LL TAKE UP AGENDA [7. System Operations Update] ITEM SEVEN, SYSTEM OPERATIONS UPDATE, WHICH IS PRESENTED BY DAN WOODFIN. UH, THE PRESENTATION INCLUDES AN UPDATE ON THE 2026 LONG-TERM FORECAST METHODOLOGY THAT CHRISTIE MENTIONED IN HER PRESENTATION. UM, ALSO I'D LIKE SOME DISCUSSION ON INTEGRATION WITH BATCH ZERO. IF YOU, IF YOU CAN WEAVE THAT INTO YOUR, YOUR COMMENTS. SO DAN, IT'S UP TO YOU, [00:55:01] RIGHT? YEAH. UH, AS OPPOSED TO CHRISTIE'S MARATHON, I THINK I ONLY HAVE TWO ITEMS TODAY SO WE GO QUICKER. THE FIRST ONE, AS YOU DISCUSSED, WAS ABOUT THE LONG-TERM LOAD FORECAST. WE, UM, WE WENT DOWN A PATH IN CREATING THE ORIGINAL LONG-TERM FORECAST OF, UH, FOLLOWING WHAT WAS AT LEAST PRIOR ORIGINALLY ASSUMED TO BE GOING TO BE IN SOME OF THE PLANNING STUDIES. AND THAT HAD, THERE WERE CERTAIN CRITERIA AROUND THAT, IT WOUND UP BEING A VERY BIG NUMBER THAT NOBODY BELIEVES IS, IS RATIONAL. AND SO WE'VE, WE PROPOSED TO THE COMMISSION A COUPLE OF DIFFERENT WAYS TO ADJUST THAT METHODOLOGY, UH, FOR THEIR CONSIDERATION. THE FIRST ONE IS TO LOOK AT KIND OF BASED ON HISTORIC REALIZATION OVER THE LAST YEAR OR PLUS HOW MANY OF THE REQUESTS HAVE ACTUALLY COME TO FRUITION. UH, AND WE PROPOSED THAT AS, AS ONE OPTION. UH, AND THE SECOND OPTION WAS ONE WHERE WE WOULD ACTUALLY USE THE BATCH ZERO, UH, UH, VALUES BECAUSE THAT, THAT BATCH ZERO, UH, AMOUNT OF NEW LOAD. AND THAT'S REALLY WHAT SWINGS BETWEEN THESE TWO IS ALL OF THESE NEW LARGE LOADS. WHAT, UM, WHAT WOULD ULTIMATELY BE THE, THE GOING INTO THE BATCH ZERO STUDY PROCESS? BECAUSE THAT'S OBVIOUSLY RECEIVED A LOT OF STAKEHOLDER REVIEW AND SO FORTH, AND IT SEEMS TO BE, UH, WOULD BE A, A, A VERY WELL JUSTIFIED NUMBER. UM, NOW THE, UM, SO WE PROPOSED TO DO THE SECOND OF THOSE. WE KNOW WHAT THE NUMBER IS ALREADY FOR THE HISTORIC UTILIZATION. IT DROPS THE, THE, THE KIND OF THAT ORIGINAL FORECAST FROM 368 GIGAWATTS DOWN TO ABOUT 201 GIGAWATTS. WE DON'T KNOW EXACTLY YET WHAT THE, THE SECOND APPROACH WOULD USE, BUT IT REALLY, AS CHRISTY MENTIONED EARLIER, PROVIDES A ACTIONABLE FORECAST THAT WE CAN ACTUALLY PLAN BASED ON BECAUSE OF THE, THAT LEVEL OF REVIEW THAT IT'S HAD. UM, THE PROBLEM IS, AS SHE MENTIONED ALREADY, IS THAT THE, WE WON'T HAVE THOSE NUMBERS UNTIL AUGUST, UH, TIMEFRAME. AND SO THAT WILL CAUSE US TO HAVE TO DELAY SOME OF THESE OTHER PROCESSES, WHICH WE'VE ALSO FILED A GOOD CAUSE EXCEPTION WITH THE COMMISSION FOR. UM, DAN, DAN, ISN'T THERE ALSO A PROBLEM WITH USING BATCH ZERO IN THE SENSE THAT THINGS THAT ARE QUALIFYING FOR BATCH ZERO ARE INHERENTLY SORT OF FURTHER ALONG IN THE PROCESS AND THEREFORE BETTER DEVELOPED AND MIGHT HAVE A HIGHER LIKELIHOOD OF BEING DEVELOPED THAN THE HISTORICAL NORM? I THINK THAT THAT THAT'S RIGHT. THE, THE, THE WHAT, WHAT, BECAUSE, BECAUSE OF THE HISTORICAL, WE'RE KIND OF AT A A A WHERE THINGS ARE JUST GETTING STARTED ON SOME OF THE PROJECTS. AND SO WE'RE STILL KIND OF AT THAT INITIATION PHASE OF, SO THAT BASICALLY IT'S, IT'S ONE OF THOSE CAVEATS THAT PAST PERFORMANCE MAY BE NO GUARANTEE OF FUTURE RESULTS. UH, SO IT'S NOT POTENTIALLY AS ACCURATE. UH, WHEREAS THE BATCH PROCESS, ONCE IT GETS GOING, WILL BE THE RIGHT WAY TO DO THIS. NOW WE, WE THINK GOING FORWARD THAT WHAT COMES OUT OF THE BATCH PROCESS THAT ACTUALLY MOVES FORWARD, THAT THAT WILL BE OUR, A GOOD BASIS FOR THE FORECAST FOR THE FOLLOWING YEARS AND, AND SO FORTH. SO E EACH YEAR WE'LL HAVE THOSE, THOSE AMOUNTS FOR THE NEXT YEAR'S FORECAST. YEAH, I SUSPECT THAT'S RIGHT. GOING FORWARD, I THINK THIS TIME YOU MIGHT HAVE TO CONSIDER SOMETHING LIKE TAKING A BLENDED AVERAGE OF HISTORICAL AS A PROXY FOR WHAT HAPPENED IN THE PAST AND BATCH ZERO. BUT I SUSPECT YOU'RE GONNA FIND BATCH ZERO IS, IS STILL A PRETTY BIG DEAL. MAY STILL BE, UH, YEAH. SO, UH, SO WE, WE'VE, WE FILED THIS, UH, A ADJUSTMENT PROCESS WITH THE COMMISSION. WE ISSUED A MARKET NOTICE OUT TO THE STAKEHOLDERS TO, UH, ASK FOR COMMENTS ON THIS. UH, THE COMMISSION HAS ALSO FILED, UH, ASK FOR COMMENTS AND, UH, THOSE ARE SUPPOSED TO BE COME BACK IN BY, UH, JUNE 1ST, AND THEN THE COMMISSION WILL HAVE TO LOOK AT THOSE THINGS AND BASICALLY, UH, DECIDE WHICH APPROACH TO USE. UM, AND THEN ALSO I MENTIONED THE GOOD CAUSE EXCEPTION, SO WE'LL TALK ABOUT THAT AGAIN ANY MORE. I GUESS I'LL PAUSE FOR A MINUTE FOR QUESTIONS ON THIS ONE. ANY QUESTIONS BEFORE I MOVE ON? OKAY. OKAY. UM, THE ONLY OTHER THING WE'VE GOT, SO THERE WAS, UH, IN THE PAST I'VE TALKED TO YOU ABOUT, UH, FOR THE LARGE LOADS THAT DO NOT HAVE THE CAPABILITY OF RIDING THROUGH A VOLTAGE DISTURBANCE ON THE GRID, WE HAVE THIS CONCERN THAT IF WE HAVE A CONCENTRATION OF TOO MANY OF THOSE THAT CANNOT RIDE THROUGH, UH, WITHIN A SINGLE AREA, WE MAY HAVE TO LIMIT THE AMOUNT OF LOAD OF THAT TYPE THAT WON'T RIDE THROUGH. BECAUSE IF IT SINGLE FAULT [01:00:01] HAPPENS AND TOO MUCH OF IT TRIPS AT THAT POINT IN TIME, WE'LL, UH, WE COULD POTENTIALLY CAUSE A FREQUENCY DISTURBANCE ON THE GRID. AND SO ONE OF THE, ONE OF THE THINGS WE'RE WORKING ON IS, IS THAT, AND THERE'S A, IS THE APPROVAL OF A RIDE THROUGH STANDARD. SO GOING FORWARD, THESE LARGE LOADS WILL HAVE TO HAVE RIDE THROUGH, BUT IF THERE'S TOO MANY THAT DON'T WITHIN A, A SINGLE AREA, UM, WE'VE CALCULATED THE LIMIT UNDER WORST CASE CONDITIONS, THAT'S ABOUT 3,200 MEGAWATTS. SO ONE OF THE QUESTIONS THAT STAKEHOLDERS HAVE OBVIOUSLY ASKED IS, WHAT COULD YOU DO TO FIX THAT PROBLEM? AND ONE OF THE POTENTIAL IDEAS IS TO HAVE A NEW TYPE OF ANCILLARY SERVICE CALLED FAST FREQUENCY RESPONSE DOWN, BASICALLY WHERE, WHERE IF ALL THIS LOAD TRIPS OFF, YOU COULD HAVE, SAY BATTERIES THAT ARE ABLE TO CHARGE VERY QUICKLY, UH, TO, TO OFFSET THAT. SO COULD WE DO SOMETHING LIKE THAT? HAVE THIS NEW ANCILLARY SERVICE. WE'VE, WE'VE, NOW, I THINK WE TALKED ABOUT THIS AT A PREVIOUS MEETING. WE'VE COMPLETED THAT STUDY. WHAT WE'VE SEEN IS THAT THERE'S, UH, THERE IS SOME POTENTIAL FOR, UH, THAT, BUT IT'S ALMOST A MEGAWATT PER MEGAWATT, UH, IMPROVEMENT. SO YOU'D HAVE TO HAVE A MEGAWATT OF FFR DOWN FOR EVERY MEGAWATT OF, UH, A REDUCTION IN THAT OR AN INCREASE IN THAT. UM, THAT 3,200 MEGAWATT LIMIT, UH, AND THAT ONLY GOES SO FAR, SOMETHING IN THE 800 MEGAWATT. SO WE COULD INCREASE THE 3,200 MEGAWATTS UP TO 4,000 OR SO BEFORE IT STARTS NOT WORKING ANYMORE. SO THE POINT OF THAT IS THAT THIS IS PROBABLY NOT A, A GOOD SOLUTION, AND WHAT WE REALLY NEED IS RIDE THROUGH STANDARDS FOR THE, THE LARGE LOADS. I THINK THAT'S ALL I'VE GOT FOR YOU. OKAY. THANKS DAN. I THINK YOU'RE STILL UP. UH, WE'RE GONNA DO AGENDA ITEM [7.1 Preview of ERCOT Recommendation regarding 2027 ERCOT Methodologies for Determining Minimum Ancillary Service Requirements] 7.1. I'M GONNA TURN IT OVER TO NITKA FOR THE NEXT PART. OKAY. UH, PREVIEW OF ERCOT RECOMMENDATION REGARDING 2027 ERCOT METHODOLOGIES FOR DETERMINING MINIMUM ANCILLARY SERVICE REQUIREMENTS, I THINK IS GONNA TAKE THE LEAD ON THIS. AND JEFF BELLOW, YOU'RE ON DECK. THAT'S THE LAST SLIDE. OKAY. WHILE WE'RE SWITCHING SPEAKERS IN THE APPENDIX IS THE IBR, UH, TREND, AND IT'S GOING UP. ANY PARTICULAR REASON YOU THINK IT'S GOING UP? JUST MORE I BS THAT DON'T WRITE THROUGH JOINING THE GRID. WE'RE STILL HAVING A FEW SMALL EVENTS. UM, AND OF COURSE WE PASSED NOGA 2 45. YOU PASSED NOGA 2 45 SOME TIME AGO, BUT THAT HASN'T COMPLETELY BEEN IMPLEMENTED YET. AND SO THAT'S STILL A, A WORK IN PROGRESS. I'M, TAKE CARE. YOU CAN PROCEED WHEN YOU'RE READY. HELLO. GOOD AFTERNOON, EVERYONE. SO, I'M HERE TODAY TO PROVIDE YOU ALL AN OVERVIEW OR A PREVIEW OF THE 2027 AS METHODOLOGY REVIEW PLAN THAT WE HAVE, UH, THAT WE ARE WORKING ON RIGHT NOW. SO NO ACTION IS REQUESTED TODAY. WE EXPECT TO BRING BACK OUR RECOMMENDATIONS FOR THE 2027 ES METHODOLOGY AT YOUR SEPTEMBER MEETING. AND A HIGH LEVEL OVERVIEW OF WHAT YOU WILL, UH, SEE US, UH, TALK THROUGH IN THIS SLIDE DECK IS WE WORKED THROUGH BUILDING A PROBABILISTIC METHOD FOR COMPUTING QUANTITIES FOR ECRS AND NONS SPENT AS A PART OF THE WORK WE DID LAST YEAR. THIS YEAR, WE INTEND TO USE THAT MODEL THAT WAS BUILT, REFINE IT, AND THEN RUN SOME SENSITIVITY ANALYSIS ON THE KEY PARAMETERS THAT ARE WITHIN THAT MODEL, THINGS THAT IMPACT THE QUANTITIES. SO THINGS LIKE WHAT, WHAT IS THE FORECAST ERROR HORIZON THAT WE LOOK AT? THINGS LIKE HOW MUCH CREDIT DO WE TAKE FOR HEADROOM? THINGS LIKE WHAT SHOULD THE CONVERGENCE CRITERIA LOOK LIKE. NOW AS WE PAIR THROUGH AND LOOK THROUGH THE RESULTS, WE LOOK, WE, WE, UH, WE PLAN TO BRING FORWARD, UH, OUR ANALYSIS THAT TRIES TO SHOW YOU NOT JUST THE, THE VARIATION AND QUANTITIES AS A RESULT OF THOSE SENSITIVE ANALYSIS, BUT TO THE EXPECT EXTENT POSSIBLE, THE IMPACT ON COSTS AS A RESULT OF THOSE CHANGES. UH, WHAT ARE THE RELIABILITY RISK METRICS, AND WHAT ARE THE OPERATIONAL OUTCOMES OF MAKING THOSE CHANGES? UH, AND AS A PART OF THAT, SOMETHING ELSE THAT WE EXPECT TO TALK THROUGH IS THIS CONVERSATION AROUND, UH, HAVING A, UH, HAVING THE ABILITY TO RESTORE REGULATION AND RESPONSIVE RESERVE WITHIN THE, UH, WITHIN THE FRAMEWORK. UH, WHEN WE COME BACK, I, WE HOPE TO, UH, RECOMMEND, UH, OR WE PLAN TO [01:05:01] RECOMMEND KEEPING A HUNDRED PERCENT RESTORATION OF THOSE TWO RESERVES WITHIN THE METHODOLOGY. AND I'LL EXPLAIN WHY AS WE STEP THROUGH THE SLIDE DECK TODAY. SO, WITH THAT SAID, I'LL MOVE ON. OKAY. FIRST TALK ABOUT THE BACKGROUND OR WHAT, UH, WHAT IN THE PROTOCOL LAYS OUT, UH, UH, A FRAMEWORK FOR REVIEWING THE AS METHODOLOGY. AND THEN ALSO HIGHLIGHT, UH, SOME RELEVANT RECOMMENDATIONS FROM THE ANCILLARY SERVICE STUDY THAT WAS DONE IN 2024. SO THERE IS A PARTICULAR SECTION, SECTION 3.16 IN THE PROTOCOLS THAT REQUIRES A COURT TO REVIEW THE AS METHODOLOGY ANNUALLY. IT LAYS OUT THAT ANY RECOMMENDED CHANGES BE BROUGHT FORWARD TO THE BOARD FOR THEIR REVIEW AND RECOMMENDED APPROVAL. BUT ONCE WE, UH, ONCE THE BOARD RECOMMENDS APPROVAL, THE PUC HAS THE FINAL AUTHORITY ON APPROVING THE FINAL AS METHODOLOGY THAT WE WILL USE FOR NEXT YEAR OR FOR THAT, UH, FOR THE NEXT YEAR FOR IMPLEMENTATION. AS I MENTIONED, THERE ARE TWO RECOMMENDATIONS IN THE AS STUDY THAT WAS CONDUCTED THAT ARE RELEVANT TO THE WORK WE WILL DO IN 2027. FIRST ONE, OF COURSE, IS THE PROBABILISTIC MODEL. UH, WE, WE IMPLEMENTED THIS LAST YEAR. WE INTEND TO REFINE IT THIS YEAR. AND THE NE NEXT ONE IS ABOUT APPROPRIATE CRITERIA FOR AS PROCUREMENT QUANTITIES. SO THIS IS WHERE WE GET INTO TESTING ALTERNATIVES, UH, UH, AND BRINGING FORTH HOW THEY WOULD IMPACT, UH, THE OVERALL QUANTITIES, THE COSTS, AND, AND OPERATIONS. UH, THIS IS THE WORK WE ARE REALLY FOCUSED ON IN THE WORK THAT WE'LL DO THIS YEAR IN 2027. SO REALLY A KEY, UH, CORE, UH, TAKEAWAY FOR YOU IS WE HAVE ALREADY BUILT A PROBABILISTIC MODEL IN LAST YEAR. WE ARE LOOKING TO REFINE IT AND RUN SENSITIVITY ANALYSIS THIS YEAR. NOW, BEFORE I MOVE FORTH AND TALK ABOUT WHERE THE FOCUS EVEN WITHIN THE MODEL RELY ON, I PUT FORTH THIS SIMPLISTIC OVERVIEW OF THE FRAMEWORK THAT WAS BUILT IN 2026. I WILL, UH, THIS HELPS ME HIGHLIGHT SOME OF THE AREAS THAT WE WILL FOCUS ON AS WE DO THE SENSITIVITY ANALYSIS. SO AT A HIGH LEVEL, THERE ARE INPUTS WE PUT, UH, WE WE PRESENT TO THE MODEL RISKS, UH, BE IT NET LOAD FORECAST ERRORS, BE IT FORCED OUTAGES ALONG WITH IT. WE ALSO PRESENT TO THE MODEL SOME CREDITS THAT THIS WOULD BE BASED OFF OF HISTORICAL HEADROOM THAT WE'VE SEEN EITHER ONLINE OR FROM FAST STARTING UNITS, UH, THAT ARE OFFLINE. BOTH OF THESE PARAMETERS, OR BOTH OF THESE DATA SETS ARE FED TO A MONTE CARLO OPTIMIZATION, WHICH THEN LOOKS TO, UH, DERIVE A SET OF ECRS AND NONS SPEND REQUIREMENTS AS A COMBINATION THAT CAN MEET A CONVERGENCE CRITERIA. SO A CORE, UH, SO THERE ARE REALLY THREE PIECES IN THIS MODEL THAT END UP FORM FORMING THE CORE SET OF TOPICS THAT WE'LL FOCUS ON IN 2027. I'LL SWITCH OVER AND TALK WHAT THOSE CORE ISSUES ARE NOW. NOW, THESE CORE ISSUES THAT ARE HERE IS SOMETHING THAT WE, WE'VE IDENTIFIED IN COLLABORATION WITH IN CONVERSATIONS WITH PUC STAFF AND THE IMM. THE FIRST ISSUE IS AROUND, IS REALLY HONED WITHIN THE CONVERGENCE CRITERIA, AND IT FOCUSES ON THE TWO PARAMETERS WITHIN IT. ONE IS THE TARGET RESERVE LEVEL, AND THE OTHER ONE IS REG UP AND RRS RESTORATION. NOW, AS FAR AS TARGET RESERVE LEVELS GOES, THIS CAN BE WATCH IN EA ONE OR EVEN LOAD SHARED. THESE TO US ARE FUNDAMENTALLY A QUESTION FOR THE PUC TO, UH, GUIDE US ON, WE WILL AS A PART OF 2027 RUN SENSITIVITY ANALYSIS FOR AGAINST ALTERNATE TARGET LEVELS. SO YOU CAN SEE HOW THOSE IMPACT THE QUANTITIES. NOW ONE THING WITHIN THIS THAT WE WANT TO MAKE SURE, UH, EVERYONE'S AWARE OF IS WITHIN THE CONVERGENCE CRITERIA, WE LOOK AT NOT JUST THE TARGET RESERVE LEVEL, BUT ALSO RESTORING REGULATION AND RRS. AND REALLY THE QUANTITIES THAT WE ESTABLISH IS THE ONE THAT MEETS GREATER OF THE CRITERIA. SO WHICHEVER IS HIGHER IS THE ONE THAT SETS THE, THE CONVERGENCE AS A RESULT. BY SIMPLY CHANGING THE TARGET LEVEL, THE QUANTITIES OF ECRS AND NONS SPIN MAY NOT MATERIALLY CHANGE. IF WE DON'T ALSO LOOK AT THE RESTORATION CRITERIA. SO AS A PART OF 9 27, WE WILL LOOK TO RUN SENSITIVITY ANALYSIS EVEN ON THE RESTORATION CRITERIA. BUT WHAT ONE THING WE DO WANT TO CAUTION IS TO US BEING ABLE TO RESTORE REGULATION AND RRS FULLY IS A KEY REQUIREMENT THAT IS NECESSARY FOR MAINTAINING RELIABILITY. SO, UH, WE WILL, AS I MENTIONED AT THE START OF THE DECK WHEN WE COME BACK, WE EXPECT TO RECOMMEND FULLY RESTORING RRS AND I CAN GET A LITTLE BIT MORE INTO THIS. AND IN THE NEXT SLIDE AS TO WHY THAT IS VERY IMPORTANT IN OUR MINDS, [01:10:01] THERE ARE TWO MORE ISSUES. ONE IS THE LOOK AHEAD PERIOD, UH, FOR FORECAST ERROR AND FORCED OUTAGES. SO THIS IS THE KEY INPUT THAT DRIVES THE RISKS IN THE MODEL. WE WILL RUN SEVERAL SENSITIVITIES, UH, SO START BEGINNING FROM ONE HOUR TO SIX HOURS AS FAR AS OUR WORK IN 2027. NOW, LOWERING THE LOOK AHEAD PERIOD INTRINSICALLY WILL LIKELY RESULT IN REDUCING THE OVERALL ECRS AND NONS SPEND REQUIREMENTS. BUT WE DO WANT TO CAUTION THAT IT MAY ALSO RESULT IN INCREASING SOME, THE NUMBER OF RELIABILITY UNIT COMMITMENTS THAT COULD BE NEEDED, UH, DURING A FUTURE OPERATING PERIOD. THE LAST ITEM IS HEADROOM CREDIT AND HOW MUCH CREDIT TO TAKE. UH, SO SOMETHING IN HERE IS, UH, HISTORICAL HEADROOM, UH, MAY REFLECT COMMITMENT INEFFICIENCIES, AND THIS MAY NOT FULLY BE AVAILABLE IN FUTURE OPERATING CONDITIONS. NOW, THIS IS ESPECIALLY TRUE AS WE'VE CONSTANTLY NOTED WITH THE TRANSITION TO RTC PLUS B. THAT SAID, WE WILL TEST, UH, SEVERAL HIGHER CREDIT, UH, UH, SENSITIVITIES. HOWEVER, WE DO CAUTION, UH, AGAINST RELYING HEAVILY ON A HUNDRED PERCENT, UH, CREDIT. AS FAR AS HEADROOM GOES. UH, LEMME SEE IF THIS SLIDE. OKAY, HERE WE GO. SO THESE THREE PARAMETERS THAT I JUST DISCUSSED ARE NOT NEW WHEN I CAME HERE LAST YEAR AS WELL. THESE WERE THE CORE OF THE ISSUE POINTS LAST YEAR AS WELL. SO REALLY WE ARE LOOKING TO CONTINUE TO WORK ON THOSE LOOKING TO CONTINUE TO HELP, UH, COME UP WITH, UH, UH, UH, AN ANALYSIS THAT CAN HELP, UH, INFORM, UH, THE SELECTION OF THE APPROPRIATE CRITERIA AS OUTLINED IN THE A STUDY RECOMMENDATIONS. MAY I ASK YOU A QUESTION ABOUT THESE THREE CRITERIA? ARE ALL THREE AFFECTED BY MOVING THE RTC PLUS B OR JUST THE LAST ONE? THE, THE LAST ONE MORE. SO THE FORECAST ERROR AND FORCED OUTAGE RISK IS MORE IN, UH, IS TIED TO REALLY THE, UH, THE, THE, UH, WEATHER, THE, THE GRID THAT WE HAVE AND THE TARGET LEVELS ARE DIFFERENT. AND TO TICKET, BEFORE YOU GO ON, UH, THE IMM HAD A COUPLE OF SLIDES IN THEIR PRESENTATION ABOUT THIS SUBJECT MATTER, AND SO WE'LL HAVE JEFF MCDONALD ON STANDBY TO COME UP TO TALK ABOUT THAT AS WE GET TOWARD THE END OF THIS DISCUSSION. UNDERSTOOD. ANY OTHER QUESTIONS BEFORE I MOVE AND TALK A LITTLE BIT ABOUT REGULATION AND RRS RESTORATION? SO SOMETHING, SOMETHING THAT IS, IS A POINT OF CONTENTION IS EXACTLY THIS PARTICULAR TOPIC, SO WORTH NOTING IS ECRS AND NONS SPIN SERVE TWO PURPOSES HELP WITH FORECAST ERRORS AND FORCED OUTAGE RISK, BUT THEY ALSO HELP BACKFILL REGULATION IN RRS SO THAT T'S FAST RESPONSE CAPABILITIES THAT HELP MAINTAIN FREQUENCY ARE RESTORED UNTIL ADDITIONAL ACTIONS LIKE COMM COMMITMENTS CAN BE TAKEN. NOW WHY IS THIS, I, WHY IS IT IMPORTANT TO HAVE, UH, REGULATION ON RRS AND WHY DO WE EXPECT TO MAINTAIN IT IS WE ARE AN ERCOT IS AN ELECTRICAL ISLAND. WE CANNOT RELY ON SYNCHRONOUSLY CONNECTED NEIGHBORS TO RE UH, TO PROVIDE US REPLACEMENT RESERVES AFTER A FREQUENCY EVENT. UH, UH, NERC REQUIREMENTS ESTABLISH, UH, DON'T ESTABLISH HOW TO SET ANCILLARY SERVICE FOR, UH, UH, QUANTITIES, BUT THEY DO ESTABLISH PERFORMANCE CRITERIA, UH, ON A, UH, ON, ON BAS, LIKE ERCOT FOR FREQUENCY CONTROL, DISTURBANCE RECOVERY, CONTINGENCY RESERVE RESTORATION, AND FREQUENCY RESPONSE. SO, UH, SO WHILE, UH, CHANGING THE RESTORATION CRITERIA CAN IMPACT ECR SPEN QUANTITIES, WE DO, UH, TO, IN ORDER TO MAINTAIN RELIABLE, UH, IN ORDER TO ENSURE WE HAVE SUFFICIENT RESERVES TO MAINTAIN OUR COMPLIANCE WITH WHAT OUR, UH, OBLIGATIONS UNDER NERC REQUIREMENTS IS AND MAINTAIN RELIABILITY, IT IS IMPORTANT FOR, UH, FOR THE REGULATION AND RRS RESTORATION TO BE WITHIN THE CONVERGENCE CRITERIA AND TO BE WITHIN THE CONVERGENCE CRITERIA AT A HUNDRED PERCENT. I WILL PAUSE IF THERE ARE ANY QUESTIONS OR I WILL MOVE TO THE NEXT SLIDE ON THIS ONE. ALRIGHT, THE LAST PIECE, THIS PART, I PUT THIS SLIDE OUT THERE. WE'VE TALKED A LOT ABOUT WHAT ARE THE CORE ISSUES, WHAT ARE THE THINGS YOU SHOULD EXPECT US TO SEE COMING BY WHEN WE COME BACK IN SEPTEMBER, TALK ABOUT THIS PARTICULAR SLIDE TELLS YOU WHAT WE WON'T TALK ABOUT. AND THERE ARE TWO FLAVORS OF ISSUES. ONE IS A VERY IMPORTANT TOPIC, WHICH HAS [01:15:01] BEEN HIGHLIGHTED QUITE FREQUENTLY AND CONTINUES TO BE, AND IT IS AROUND THE AN, AN ANALYSIS THAT RECOMMENDS OR FULLY ASSESSES THE DURATION OF OUR ANCILLARY SERVICES. THIS IS A VERY IMPORTANT TOPIC IN OUR MINDS AS WELL. HOWEVER, THIS PARTICULAR TOPIC IS LINKED WITH SEVERAL KEY THINGS. ONE BEING OF COURSE, UH, EXPERIENCE OPERATIONAL EXPERIENCE WITH RTC PLUS B, OTHER BEING HOW THE NEW ANCILLARY SERVICE, WHICH IS STILL BEING DEVELOPED, THE DRRS DISPATCHABLE RELIABILITY SERVICE LAYERS IN WITH ECRS AND NON SPENT. AND LAST, HOW SHOULD THE PROBABILISTIC MODEL THAT HAS BEEN BUILT FOR ECRS AND NONS SPENT ACCOUNT FOR NOT JUST MEGAWATT, BUT MEGAWATT OUR NEEDS OF THE GRID? TO US, THAT IS A KEY PIECE THAT IS RIGHT NOW NEED, UH, THAT WILL BE NEEDED AS FAR AS ASSESSING THE IMPACT OF DURATION HOLISTICALLY IS CONCERNED. AND WE WON'T, BY THE TIME SEPTEMBER COMES, WE WON'T BE ABLE TO ADDRESS THAT PORTION OF THE MODEL. SO THAT'S SOME SOMETHING THAT IS, AT LEAST AT THIS POINT IN OUR MINDS, NOT A, A TOPIC FOR 2027 AS METHODOLOGY. THE OTHER SET OF ITEMS ARE RELATED TO SOME OF THE POINTS THE IMM HAS RAISED. UH, THINGS THAT IMPACT PRICE FORMATION, THINGS THAT ARE IMPACT MARKET SIGNALS AND RESOURCE ADEQUACIES. THESE ARE BEYOND WHAT THE MINIMUM AS METHODOLOGY IS ABOUT. THESE IN OUR MINDS, SHOULD CONTINUE TO BE VETTED SEPARATELY. THEY ARE IMPORTANT AND THEY JUST NEED TO BE WORKED IN A, IN A DIFFERENT FORUM, NOT THE AS METHODOLOGY. SO WITH THAT, THE AS METHODOLOGY WILL LOOK TO FOCUS ON THE FULL AS PLAN FOR THE FOUR SERVICES THAT WE EXPECT TO HAVE IN 2027 WITH MORE FOCUS ON ECRS AND NONS SPEND. AND LASTLY, WHAT I HAVE HERE FOR YOU IS A SLIDE THAT SHARES THE, THE, THE TIMELINE THAT WE'VE LAID OUT FOR STAKEHOLDER ENGAGEMENT ON THE 2027 AS REVIEW. WE EXPECT TO SPEND JUNE, JULY AND SOME PART OF AUGUST TALKING THROUGH THE ANALYSIS WE ARE DOING, TAKING FEEDBACK FROM STAKEHOLDERS AND REFINING OUR RECOMMENDATION THAT WE INTEND TO BRING FORWARD TO YOU IN SEPTEMBER. I WILL PAUSE WITH THAT. HAPPY TO TAKE ANY MORE QUESTIONS. UH, JEFF MCDONALD, WOULD YOU MAKE YOUR WAY UP? ANY QUESTIONS FOR DIKA? OKAY, I DON'T SEE ANY, UH, IMM HAD A, AS I SAID EARLIER, THE IMM HAD A COUPLE OF SLIDES ON THIS SUBJECT MATTER, SO IT'S A GOOD TIME TO LET JEFF CHIME IN. THANK YOU. UH, GOOD AFTERNOON. THANK YOU. APPRECIATE, THAT'S PERFECT. OKAY, THANK YOU. AND HE'LL BE BACK UP IN AGENDA ITEM NINE AS WELL. YEAH. UH, JEFF MCDONALD, DIRECTOR OF IMM, UH, AND THANK YOU FOR THE OPPORTUNITY AND THANK YOU NITKA FOR THE THOROUGH WALKTHROUGH. I APPRECIATE IT. SO WE, WE'VE HAD A, A ONGOING AND REPEATED CONVERSATION WITH, UH, ERCOT STAFF AND PUC STAFF OVER WHAT WOULD BE USEFUL TO EVALUATE, UH, FOR THE, FOR ERCOT STAFF TO EVALUATE IN THEIR AS METHODOLOGY PROCESS THAT WOULD HELP SHED SOME LIGHT ON WHAT THE, WHERE THE BALANCE IS AND, AND WHERE POTENTIALLY A BETTER PROCUREMENT LEVEL IS FOR THE ANCILLARY SERVICES. AND I'M SURE YOU RECALL FROM PRIOR DISCUSSIONS WHERE I'VE BEEN UP HERE, YOU KNOW, I'VE BEEN TRYING TO EMPHASIZE THE ROLE OF PRICE FORMATION, ITS IMPORTANCE IN ERCOT, BECAUSE ERCOT MARKET SYSTEM RIGHT NOW IS, RELIES VERY HEAVILY ON SHORTAGE PRICING, UH, IN ORDER TO SIGNAL FOR NEW INVESTMENT. AND WITH THE, UH, EXTREME LOAD GROWTH PROJECTIONS, UM, THAT'S ACTUALLY A VERY IMPORTANT ASPECT OF HOW ERCOT NOT ONLY THE ERCOT SYSTEM, NAVIGATES THE TRANSITION TO A MUCH HIGHER LOAD AND MUCH HIGHER DATA CENTER LOAD. UM, BUT, BUT ALSO ALLOWS US TO THINK ABOUT WHETHER OR NOT THAT TYPE OF, UH, PRICE FORMATION AND REVENUE GENERATION AND PRICE FILLING PROCESS, UH, CAN ACTUALLY GENERATE ENOUGH NEW, UM, INTEREST IN NEW CAPACITY IN ORDER TO TRAVERSE THAT TRANSITION AND GET TO A NEW EQUILIBRIUM. SO, SO HAVING SAID THAT, WE VIEW AS PROCUREMENT AND AS PRICING AS EXTREMELY IMPORTANT, UH, TO THE ERCOT MARKET. AND AS YOU'LL SEE IN MY PRESENTATION A LITTLE BIT LATER, YOU KNOW, WE, I, I PICKED A THEME OUT OF THE STATE OF THE MARKET REPORT TO GO THROUGH. UM, SO I DIDN'T WIND UP TAKING UP TOO MUCH TIME, BUT, BUT ONE OF THE THEMES IS, YOU KNOW, WE DON'T REALLY HAVE, UH, ONEROUS SHORTAGE CONDITIONS RIGHT NOW WHERE WE'RE FLUSH WITH CAPACITY. UM, AND I KNOW, YOU KNOW, DAN OR WOODY MIGHT MIGHT OBJECT TO THAT. IT, IT [01:20:01] VARIES FROM HOUR TO HOUR, BUT, BUT THESE ARE VERY IMPORTANT THINGS. SO, SO WE'RE IN A POSITION RIGHT NOW WHERE WE WOULDN'T EXPECT TO SEE SHORTAGE PRICES OCCUR, BUT AS ERCOT STARTS TO MOVE INTO AREAS WHERE YOU WOULD EXPECT TO SEE SHORTAGE PRICES OCCUR, WE REALLY NEED TO BE POSITIONED FROM A MARKET DESIGN AS PROCUREMENT, AS PRICING PERSPECTIVE TO GET THE RIGHT SIGNALS. SO YOU GET, UM, SOME NEW GENERATION, UM, STIMULATED. SO I'LL NOTE THERE ARE, THERE ARE NUMEROUS AREAS, BUT THREE THAT I HIGHLIGHTED HERE THAT THAT CAN INTERFERE WITH PRICE FORMATION AND PRICE SIGNALS. ONE IS, UH, OUTTA MARKET PROGRAMS. I'VE TALKED ABOUT THOSE, UM, AT BOARD MEETINGS AND OTHERS IS THE EXTENT OF OPERATOR INTERVENTION. UH, WE SEE THAT IN OUR COT THROUGH R TYPICALLY. UM, AND THEN THE STRUCTURE OF THE AS MARKET, WHICH IS THE TOPIC AT HAND. SO, SO HAVING SAID THAT, UH, I REALLY APPRECIATE THE OPPORTUNITY AND THE DISCUSSIONS WITH THE PUC STAFF AND IKA AND HER TEAM TO GET ALIGNED AS TO WHICH OF THESE MATTERS, UH, CAN BE ADDRESSED THROUGH THE ERCOT AS METHODOLOGY SIMULATION AND WHAT ARE THE RIGHT VALUES TO DO THAT. SO, UM, I'LL GO TO THE, MY SECOND SLIDE ON THIS, WHICH IS MY LAST SLIDE ON THIS. SO, UM, AND AGAIN, FANTASTIC SLIDES. I REALLY APPRECIATE YOU PUTTING UP THE IMM CONCERNS TO CONSIDER SEPARATELY. THAT'S TERRIFIC BECAUSE OUR CONCERNS ARE BROADER THAN JUST THE AS METHODOLOGY, SO I APPRECIATE YOU HAVING THOSE UP THERE. SO THERE ARE FOUR AREAS, AND I'LL GO THROUGH THEM VERY BRIEFLY BECAUSE I THINK MIDA DID A GREAT JOB, UH, COVERING THEM. SO I DON'T WANNA BE REPETITIVE. UM, WE'D LIKE TO SEE THE FORECAST ERROR FOR RENEWABLES. WE'D LIKE TO SEE THE TIMELINE EVALUATED ON A SHORTER TIMELINE. IT'S CURRENTLY SIX. WE'D LIKE TO SEE IT AT THREE HOURS AND ONE HOUR. AND FOR A LOT OF THESE THINGS, REALLY THE VALUE TO EVERYONE, UH, STAKEHOLDERS AND DECISION MAKERS IS TO SEE HOW MUCH THIS MAKES A DIFFERENCE IN TERMS OF PROCUREMENT, HOW MUCH IT MAKES A DIFFERENCE IN TERMS OF PRICE, IMPACT, AND RELIABILITY. THOSE ARE THE, THE THREE AREAS WE WOULD FOCUS ON. AND IF THREE HOURS DOESN'T PRESENT A, UH, LARGER RELIABILITY PROBLEM, THEN MAYBE WE CAN EASE OFF, UH, BACK FROM SIX HOURS. UH, THE CURRENT CONVERSIONS CRITERIA, WHICH NIKA TALKED ABOUT, UH, QUITE A BIT. SO CURRENTLY THE CRITERIA IS A WATCH CRITERIA. UH, WE, WE WOULD LIKE TO SEE, UH, A CRITERIA THAT IS MORE, UM, RELIABILITY OR PROBABILISTIC LOAD LOSS BASED, UH, THAN A WATCH CRITERIA. AND ONE OF THE THINGS THAT SHE COVERED, YOU KNOW, IN IN DEPTH WAS THE REPLACEMENT FOR REGULATION IN RRS. SO, SO THAT'S ONE OF THE AREAS, ACTUALLY, I'LL COME BACK AROUND THAT TO A MINUTE BECAUSE THAT, THAT ONE BEARS A LITTLE BIT MORE DISCUSSION. UM, THE THIRD ITEM IS THE, THE CREDIT ACCOUNTING. UM, AND, YOU KNOW, SHE HAD MENTIONED THAT THEY DON'T FEEL COMFORTABLE ACCOUNTING A HUNDRED PERCENT OF THE AVAILABLE CREDIT. WE'D JUST LIKE TO SEE, UM, THOSE PARAMETERS MOVE, UH, IN, YOU KNOW, IN A, A LESS DISCOUNTING DIRECTION, UH, AND SEE IF THAT MAKES A DIFFERENCE BECAUSE THAT CAPACITY IS AVAILABLE AND ON THE SYSTEM. AND SO IT WOULD BE NICE TO SEE IF IT WAS NECESSARY OR NOT TO ACTUALLY DISCOUNT IT CONSIDERABLY. UM, AND THEN THE ENERGY STORAGE RESOURCES, WE'VE BEEN ARGUING FOR A WHILE, THAT ONE HOUR DURATION, UM, IS PROBABLY ADEQUATE BECAUSE WHEN YOU SEE A BIG DISCHARGE FROM A LARGE POOL OF BATTERIES, IT GIVES SHORT START OFFLINE RESOURCES AND SLOWER RAMPING RESOURCES, TIME TO POSITION THEMSELVES TO CARRY, UH, THE DISTANCE FOR THE SUBSEQUENT HOURS. SO WE'D LIKE TO SEE, UH, THAT STUDIED AND SEE IF, UH, YOU KNOW, WHAT KIND OF A DIFFERENCE IT MAKES ON A RELIABILITY PERSPECTIVE. BUT, BUT I'D LIKE TO CIRCLE BACK AROUND BECAUSE THE, THE RTC IMPLEMENTATION, UM, REALLY DOES BRING A, A, A FEW COMMENTS TO BEAR WITH RESPECT TO REPLACING, UM, REGULATION IN RRS. SO AS YOU WILL SEE IN, IN MY NEXT PRESENTATION IN A FEW MINUTES, YOU KNOW, WE HAVE A VERY HIGH, UM, REAL TIME OPERATING AVAILABLE RESERVE LEVEL IN ERCOT. TYPICALLY, IT'S MUCH HIGHER THAN IT WAS A FEW YEARS AGO. UH, AND HE, IT WAS EVEN FAIRLY HIGH, UH, DURING WINTER STORM FERN, ALTHOUGH I WILL, I WILL NOTE, UH, YOU KNOW, AS WOODY AND, AND DAN HAD POINTED OUT AS SOON AS FE ENDED, IT DROPPED BACK DOWN. BUT WE SEE VERY HIGH LEVELS. THAT MEANS THERE'S A LOT OF AVAILABLE CAPACITY ONLINE OR AVAILABLE TO BE ONLINE IN SHORT ORDER, UH, IN THE ERCOT SYSTEM VERY REGULARLY. ONE OF THE VIRTUES THAT YOU SEE WITH RTC IS THAT IT WILL VALUE THE, THE RESERVES RELATIVE TO HOW SHORT THEY ARE, AND IT WILL IN [01:25:01] REAL TIME GO AND DECIDE THAT SOME RESOURCE THAT WAS PROVIDING NONS SPIN IS MORE VALUABLE FOR RRS AND IT WILL RECURE, RRS AND UNPROCURED NONS SPIN FROM IT, YOU KNOW, IN THE NEXT INTERVAL. AND IT WILL ALSO GO OUT AND LOOK AT RESOURCES THAT WEREN'T CURRENTLY IN THE POOL OF RESOURCES THAT HAD SOLD ANCILLARY SERVICES. THERE'S AN AWFUL LOT OF AVAILABLE CAPACITY, UH, THAT CAN PROVIDE THESE SERVICES. AND I, I WOULD LIKE TO SEE THAT EXPLORED IN THE SIMULATION PROCESS BECAUSE, UM, WHILE I, WHILE I HAVE GREAT RESPECT FOR THE FACT THAT TEXAS IS ISLAND AND IT DOES NOT ENJOY THE BENEFITS FROM NEIGHBORS THAT OTHER RTOS DO, WHAT WE SEE IN TERMS OF AVAILABLE CAPACITY OF THE REALTIME MARKET INDICATES THAT THE RTC, THE REALTIME CO-OP OPTIMIZATION WILL FIND THE RESOURCES TO REPLACE REGULATION AND RRS WITHOUT HAVING TO PROCURE, UH, IN, IN ECRS AND NONS SPIN IN ORDER TO REPLACE THEM. SO, SO WE, WE WOULD REALLY LIKE TO SEE THAT EXPLORED. UH, THANK YOU, AND I'M HAPPY TO TAKE ANY QUESTIONS. OKAY. CHAIRMAN GLEASON, JEFF, FIRST TH THANK YOU FOR BEING AVAILABLE TO, UH, TO LAY THIS OUT AND TO ANSWER QUESTIONS. SO I JUST WANNA MAKE SURE I UNDERSTAND. SO WHAT YOU'RE ASKING FOR, THESE ARE YOUR RECOMMENDATIONS FOR WHAT TO MODEL AND STUDY, NOT RECOMMENDATIONS FOR WHAT TO DO. THAT'S CORRECT. THAT'S CORRECT. AND, AND THE PURPOSE OF IT REALLY WAS, YOU KNOW, IN NOVEMBER OF 2024, YOU HAD MADE A COMMENT THAT YOU WOULD LIKE TO SEE ALTERNATIVES BROUGHT, AND SO WE PUT THOUGHT TOWARDS WHAT ALTERNATIVES MIGHT MAKE THE MOST SENSE THAT MIGHT MOVE THE NEEDLE THE MOST. SO THIS IS THAT LIST OF THOSE, AND I APPRECIATE THAT. SO WE WOULD PUT THIS IN THE MODEL, WE WOULD DO OUR RUN, AND YOU WOULD GET OUTPUTS FROM THAT, FROM THE I'S PERSPECTIVE WHEN IT COMES THEN TO LOOKING AT THOSE AND ANALYZING THOSE OUTPUTS AND THEN COMING UP WITH RECOMMENDATIONS THEN FOR WHAT IS ACTIONABLE AND WHAT TO DO, DO YOU VIEW THAT AS MORE OF A, AN ART OR A SCIENCE, MEANING THIS HAPPENS AND WE SEE, POTENTIALLY SEE A REDUCTION IN RELIABILITY, THUS WE DON'T DO IT? OR IS THERE ANOTHER CALCULATION IN YOUR MIND FROM THE IMM PERSPECTIVE THAT WE SHOULD BE CONSIDERING, UM, ONCE WE GET THOSE OUTPUTS, HOW WE SHOULD ANALYZE THEM? YEAH, THAT'S A, THAT'S A REALLY GOOD QUESTION. SO I, SO I THINK IF WE COULD, UH, IF WE COULD MODEL EVERYTHING PERFECTLY AND HAVE A, A EXTREMELY HIGH DEGREE OF CONFIDENCE IN THE MODEL RESULTS, WE MIGHT BE ABLE TO, TO LOOK AT THE DIFFERENT ALTERNATIVES AND COMPARE AS AN ECONOMIST, WOULD THE MARGINAL COST TO RELIABILITY VERSUS THE MARGINAL BENEFIT OF PROCURING ONE MORE MEGAWATT. I UNDERSTAND THAT THAT MAY OR MAY NOT BE POSSIBLE IN, IN THIS PARTICULAR, UM, EXERCISE OR STUDY. AND SO I THINK, LIKE IN THE CASE OF THE FORECAST ERROR TIME HORIZON, IF WE LOOK AT ONE, THREE AND SIX AND THE RELIABILITY IS NOT REDUCED MUCH MOVING FROM SIX TO THREE HOURS, THAT WOULD BE A CANDIDATE FOR GOING TO THREE HOURS. UM, I DON'T, YOU KNOW, AND WE, WE WOULD HAVE TO THINK THROUGH HOW WE WOULD DO THAT TYPE OF QUALITATIVE ASSESSMENT FOR, FOR THE OTHER MATTERS. BUT, BUT I, I DO, I DO THINK THAT WE WILL WIND UP IN SOME SORT OF QUALITATIVE, UH, YOU KNOW, THIS ALTERNATIVE MOVED THE RELI RELIABILITY NEEDLE A LITTLE BIT. THIS ALTERNATIVE MOVED IT A LOT. SO I, I DO THINK IT'LL WIND UP THERE. OKAY, THANK YOU. ANY OTHER QUESTIONS FOR JEFF? OKAY, THANKS, JEFF. DON'T GO FAR. OKAY, THANK YOU. WE'LL HAVE YOU BACK IN ABOUT 10 MINUTES. OKAY. UH, THANKS DAN AND NETIKA, ANYTHING ELSE FROM DAN OR NETIKA? OKAY, THANK Y'ALL. WE'RE GONNA MOVE TO AGENDA [8. Interconnection and Grid Analysis Update] ITEM EIGHT, THE INTERCONNECTION AND GRID ANALYSIS UPDATE, WHICH IS PRESENTED BY JEFF BILLOW. ALL RIGHT, GOOD AFTERNOON. SO I'M GONNA START WITH, UH, SOME UPDATES ON THE LARGE LOAD INTERCONNECTION AND GENERATION INTERCONNECTION REQUEST. UM, ALSO WANT TO SPEND A LITTLE BIT OF TIME TALKING ABOUT THE QUARTERLY STABILITY ASSESSMENT, UH, REALLY FOR TWO REASONS. ONE IS THIS IS AN IMPORTANT, UH, RELIABILITY STUDY THAT TAKES PLACE, UH, FOUR TIMES A YEAR RIGHT NOW. AND, UM, ALSO WANT TO PREVIEW AN UPCOMING CHANGE ON THAT. UH, AND THEN LASTLY, I'LL, I'LL, UM, I'LL, I'LL CONCLUDE MY UPDATE WITH A BRIEF, UH, UPDATE ON NOGI 2 45 ACTIVITIES. SO THIS WILL BE THE LAST TIME, UH, LIKELY THAT WE SHOW THIS PARTICULAR GRAPHIC AS WE MOVE TO A, UH, BATCH STUDY PROCESS, WE WILL HAVE DIFFERENT METRICS THAT, THAT WE WILL BE PRESENTING. SO THIS [01:30:01] IS LIKELY THE LAST TIME YOU'LL SEE THIS ONE. UH, WHAT WE WANNA SHOW HERE IS THAT WE HAVE NOW 438 GIGAWATTS OF LARGE LOAD INTERCONNECTION REQUESTS. THAT'S UP ABOUT 28 GIGAWATTS SINCE THE, UH, THE, UH, APRIL BOARD MEETING. AND, UH, THAT'S NOT NEAR AS LARGE OF A, AN INCREASE, UH, AS WHAT WE SAW IN THE FIRST QUARTER OF THIS YEAR, BUT IT, IT'S STILL NOTEWORTHY, UH, NONETHELESS. UM, BUT AS I MENTIONED, AND WE WILL TALK MORE ABOUT THIS TOMORROW, IS AS WE TRANSITION TO A, UH, BATCH STUDY PROCESS AND, AND, AND BATCH ZERO, THEN THIS, SOME OF THESE NUMBERS BECOME A LITTLE BIT LESS RELEVANT. UM, JEFF, JEFF, BEFORE YOU MOVE ON, YES. ON THE PREVIOUS SLIDE, YOU SAY THE VAST MAJORITY REQUESTS DO NOT HAVE ANY STUDIES SUBMITTED. CAN YOU PROVIDE A LITTLE MORE COLOR ON THAT, WHAT WE KNOW ABOUT THOSE PROJECTS? SURE. YEAH. SO, SO THESE PROJECTS ARE ONES IN WHICH THE INTERCONNECTING TSP OR DSP HAS TOLD ERCOT. WE, WE HAVE LOADS THAT ARE INTERESTED IN CONNECTING TO THE ERCOT SYSTEM, UH, BUT THEY ARE, UH, HAVE NOT REACHED A MATURITY LEVEL YET TO WHERE THEY HAVE STUDIES THAT HAVE BEEN COMPLETED FOR, FOR VARIOUS REASONS. UH, SO WE DON'T HAVE ANY STUDIES, UH, ON, ON THESE. AND, AND IT'S OVER 300 GIGAWATTS OF, OF THE REQUEST HAVE NOT HAD ANY STUDIES THAT HAVE BEEN COMPLETED BY THE INTERCONNECTING TSP OR DSP AND, AND AND SUBMITTED TO ERCO. WE JUST DON'T HAVE A LOT OF INFORMATION ON THESE REQUESTS AT THIS TIME. SORRY, JEFF. SO IT SOUNDS LIKE WE HAVE ALMOST NO INFORMATION, IS IT, IS THERE, YOU KNOW, HOW DO YOU DETERMINE IF THERE'S DUPLICATION ACROSS TSPS, ET CETERA? IS THERE, THERE'S NO WAY TO SEE THAT. YEAH, SO RIGHT NOW WHAT WE GET ON THESE IS THAT THERE'S A FORM THAT THEY FILL OUT THAT THE TSP SENDS US. AND, AND SO WE HAVE SOME VERY BASIC INFORMATION ON, ON THE LOADS. THEY'RE, WHAT, WHAT YEAR THEY'RE REQUESTING THE MEGAWATTS, THEY'RE REQUESTING, UH, I THINK WE GET LA LONG ON, ON THESE. UH, BUT IT'S VERY MINIMAL INFORMATION. THERE'S NO STUDIES OR, OR ANYTHING LIKE THAT FOR US TO REVIEW. SO IT'S, LIKE I SAID, VERY MINIMAL. I DON'T THINK WE EVEN KNOW WHAT, UH, WHAT PART POINT ON THE SYSTEM THEY WOULD BE CONNECTING TO THE SYSTEM. SO VERY, VERY MINIMAL INFORMATION. AND CAN YOU GIVE US AN IDEA WHY THAT IS? I MEAN, YOU KNOW, WE'RE BEING ASKED TO PUSH ALL THIS VERY QUICKLY, BUT IF WE DON'T HAVE THE INFORMATION, HOW DO WE PROCESS IT? YEAH, SO I THINK THAT THERE NUMBER OF REASONS FOR THAT. SO, UH, ONE, OBVIOUSLY YOU COULD HAVE LOADS THAT HAVE JUST RECENTLY REQUESTED INTERCONNECTION. AND, AND SO THERE JUST HASN'T BEEN, UH, YOU KNOW, TIME TO REALLY PERFORM ANY STUDIES, UH, THAT WE'VE ALSO SEEN WHERE THERE ARE TSPS WHO THEIR OWN STUDIES HAVE, THEY, THEY HAVE QUITE A BACKLOG OF STUDIES. AND SO EVEN THOUGH MAYBE SOME, SOME OF THESE REQUESTS COULD BE A YEAR OR EVEN TWO YEARS OLD, BUT THEY HAVE LOADS THAT HAVE BEEN, UH, UN UNDERST STUDY THAT, THAT TSP HAS BEEN STUDYING BEFORE THESE LOADS CAME IN THAT THEY, THEY JUST HAVE NOT GOTTEN TO THESE, UH, STUDIES YET. SO I THINK THERE ARE VARIOUS REASONS WHY A, A, UH, LARGE LOAD WOULD NOT HAVE ANY STUDIES DONE AT THIS POINT, OR IT COULD BE JUST IN THE SPECULATIVE PHASE OF THE PLANNING PROCESS AND THAT THAT COULD BE A SQUAD YES OBJECT, SIR. IS THERE A MINIMUM REQUIREMENT TO BE STUDIED? I MEAN, DOES THAT REPRESENT AN APPLICATION OR JUST A LETTER OF INTEREST EVEN I, WHAT'S THE MINIMUM STANDARD? YEAH, SO FOR A, A LOAD TO BE STUDIED, THEY WOULD NEED TO A, AGAIN, THEY NEED TO GO TO THEIR, UH, AND, AND THIS IS THE P ONE 15 PROCESS, NOT, NOT BATCHED GOING FORWARD, UH, BUT, BUT IN THE CURRENT PROCESS, THEY WOULD GO TO THEIR INTERCONNECTING TSP OR DSP, THEY WOULD, UH, FILL OUT, YOU KNOW, CERTAIN INFORMATION AND, AND, UH, IT'S CALLED THE LOAD INFORMATION FORM. AND THEY WOULD THEN, UM, MEET WITH THE TSP, THEY WOULD, UH, SUBMIT WHATEVER STUDY FEES THAT WERE REQUIRED, UH, UH, FROM THE TSP TO PERFORM THE STUDIES, UH, AND THEN WE WOULD HAVE A SCOPING MEETING. SO, SO THAT THEY WOULD, THE TSP WOULD SUBMIT THAT INFORMATION TO ERCOT, AND THEN WE WOULD HAVE A, A STUDY SCOPING MEETING WHERE WE WOULD DISCUSS WHAT, WHAT IS THE APPROPRIATE SCOPE OF STUDIES THAT NEED TO BE PERFORMED FOR THIS LOAD CONNECTING TO THE SYSTEM. UH, AND THAT WILL INCLUDE A DISCUSSION ABOUT OTHER LARGE LOADS THAT ARE IN THE AREA THAT SHOULD BE INCLUDED IN THOSE STUDIES. UH, AND SO WE'LL HAVE THAT SCOPING MEETING, AND THEN AT THAT POINT, THE TSPS WILL THEN GO AND, AND START PERFORMING THOSE STUDIES. SO ALL, ALL OF THAT HAS BEEN DONE IN, IN THESE CASES, ALL, ALL OF THAT WOULD BE DONE ON ANYTHING, UH, PURPLE AND BELOW, BUT THE ORANGE HAS NOT, UH, THEY [01:35:01] COULD HAVE STARTED THAT INITIAL, HAVE THAT STUDY SCOPE MEETING, BUT, UH, AND, AND STARTED THAT, THAT STUDY PROCESS. BUT THEY HAVEN'T ACTUALLY COMPLETED ANY OF THOSE STUDIES AND SUBMITTED THOSE TO ERCOT FOR REVIEW. THANK YOU. OKAY. SO ON THE GENERATION INTERCONNECTION SIDE, UH, THERE'S ABOUT 450 GIGAWATTS OF, UH, GENERATION THAT IS UNDERSTUDY. UM, AGAIN, MOST OF THAT IS, UH, SOLAR AND BATTERY. UM, BUT I, I, I DO LIKE THIS, UH, GRAPHIC BECAUSE IT TELLS US WHAT THE CURRENT TRENDS ARE. THIS IS JUST LOOKING AT THE LAST 60 DAYS AND THE NUMBER OF REQUESTS THAT WE'VE HAD JUST, JUST IN THE LAST TWO MONTHS. AND WHAT YOU'LL NOTICE HERE IS, AGAIN, THERE, THERE'S A LOT OF INTEREST IN SOLAR AND BATTERY, UH, BUT THE, THE, THE WAY THAT WE CLASSIFY THE, THE GAS GENERATION IS IT CAN SHOW UP IN SEVERAL OF THESE BUCKETS, WHETHER IT'S A COMBINED CYCLE OR VARIOUS COMBUSTION TURBINES. AND, AND I THINK WHAT'S INTERESTING HERE IS THAT, UH, WE HAVE, UH, IN, IN THE VARIOUS GAS BUCKETS, WE HAVE 17 DIFFERENT PROJECTS. SO ALMOST AS MANY AS BATTERY ENERGY STORAGE PROJECTS THAT HAVE REQUESTED INTERCONNECTION IN THE LAST, JUST IN THE LAST 60 DAYS. UH, SEVERAL OF THOSE ARE CO-LOCATED WITH, UH, LARGE LOADS. AND I, I APOLOGIZE, I DIDN'T, UH, PULL THAT NUMBER, UH, TO, TO BRING THAT HERE TODAY. BUT SEVERAL, SEVERAL OF THESE ARE GOING TO BE CO-LOCATED WITH, WITH SOME OF THE, UH, THE LARGE LOADS. JEFF, COULD YOU ALSO COMMENT IF SOME ARE THE TEXAS ENERGY FUND? YEAH, SO NONE OF THESE ON, ON THIS GRAPHIC ARE OUR TEF PROJECTS. UH, TEF PROJECTS ARE, UH, RELATIVELY FURTHER ALONG IN THE PROCESS. THIS IS REALLY JUST RECENT, THE, THE LAST TWO MONTHS. THIS IS THE, UH, ACTIVITY. BUT IN THE FUTURE, IT, IT WOULD BE INTERESTING TO KNOW WHICH TEF PROJECTS ARE CONNECTING AND WHICH ARE CO LOCATED, LIKE YOU MENTIONED. YEAH, OKAY. YEAH, WILL DO. I, YEAH, I, I'VE HAD THOSE, UM, I, I'VE HAD THAT IN, UH, PREVIOUS PRESENTATIONS AND I, I LEFT THAT OUT TODAY JUST FOR UH, SAKE OF TIME. BUT, UH, BUT IT'S, IT'S A GOOD, UH, TRANSITION TO MY NEXT SLIDE IS, UH, YOU KNOW, SOMETIMES WE, WE LOOK AT THOSE CHARTS, WE LOOK AT, YOU KNOW, THAT THOSE EYE POPPING NUMBERS, AND WE, UH, FORGET THAT THESE ARE ACT THEY'RE ACTUAL PROJECTS WITH, UH, STEEL AND CONCRETE IN THE GROUND. AND SO WANTED TO HIGHLIGHT THE, UM, UH, THE CALPINE CONSTELLATION PROJECT. THE PINUP PEAKING, UH, ENERGY CENTER ONE AND TWO PROJECTS ARE THE FIRST TEF PROJECTS TO RECEIVE APPROVAL FOR COMMERCIAL OPERATION. UM, AND, UH, AND, AND SO AGAIN, IT'S, IT'S NICE TO SEE ACTUALLY STEEL AND CONCRETE IN THE GROUND WHEN, WHEN YOU'RE LOOKING AT, AT ALL THESE NUMBERS. SO THIS IS, UH, A LITTLE OVER 450 MEGAWATTS, UH, COMBUSTION TURBINE PLANT IN FREESTONE COUNTY. UM, SO, UH, I MENTIONED THAT THE, UH, THE QUARTERLY STABILITY ASSESSMENT AND THE IMPORTANCE OF THAT. UM, SO WHEN A LARGE LOAD, OR WHEN A GENERATION PROJECT GOES THROUGH THE INTERCONNECTION STUDY PROCESS, THAT STUDY PROCESS, UH, HAPPENS USUALLY AT AT LEAST A YEAR IN ADVANCE WHEN THAT PROJECT IS, UH, ENERGIZED, BUT TYPICALLY MORE, MORE TYPICAL IS TWO TO FOUR YEARS IN ADVANCE. UH, AND SO FROM THE TIME THAT THOSE STUDIES ARE PERFORMED, UNTIL THAT PROJECT IS ENERGIZED, THAT THERE'S A NUMBER OF YEARS AND, AND THE STUDY ASSUMPTIONS THAT WENT INTO THAT MORE PLANNING TYPE ASSESSMENT, THAT THOSE ASSUMPTIONS CAN CHANGE. AND, UM, ABOUT 10 YEARS AGO, WE RECOGNIZED THAT, UH, WE WERE STARTING TO SEE SOME ISSUES WHERE THAT THOSE, THE STUDY ASSUMPTIONS HAVE CHANGED AND, AND WE'RE SEEING DIFFERENT THINGS IN REAL TIME THAN WHAT HAD HAPPENED IN, UH, IN, IN THOSE INTERCONNECTION STUDIES. AND FROM A, A STUDY STATE OR FROM A THERMAL PERSPECTIVE, THAT IS NOT AS BIG OF A DEAL BECAUSE SCED, UH, CAN MANAGE, WE HAVE A CONNECT AND MANAGE APPROACH TO INTERCONNECTION HERE IN, IN ERCOT, UH, SCED CAN MANAGE THOSE THERMAL CONSTRAINTS, BUT WHEN IT COMES TO STABILITY CONSTRAINTS, IT TAKES TIME FOR THE ENGINEERS TO MAKE SURE THAT WE ARE PROPERLY MODELING THOSE AND, AND SETTING THOSE LIMITS FOR THE OPERATOR. SO THAT'S JUST THAT SCED DOESN'T AUTOMATICALLY CALCULATE STABILITY LIMITS. THIS, THIS HAPPENS SORT OF IN AN OFFLINE MANNER. ENGINEERS HAVE TO SET UP WHAT WE CALL, UH, GENERIC TRANSMISSION CONSTRAINTS, WHICH ALLOWS THE OPERATORS TO MANAGE THOSE STABILITY. WE KEEP, KEEP THE SYSTEM FROM EXCEEDING ANY, UH, STABILITY LIMITS. WHAT ARE THE OPPORTUNITIES TO USE AI TO START DOING SOME OF THE STABILITY STUDIES FOR YOU? AND CAN YEAH, YEAH. CAN YOU GET YOUR STABILITY ENGINEERS TO TRAIN AI AND HAVE THEM GIVE YOU A HAND WITH IT? YEAH, SO WE, WE ACTUALLY HAVE SOME INITIATIVES RIGHT NOW WHERE WE ARE LOOKING AT THAT. UM, I, I THINK RIGHT NOW WE'VE MAXIMIZED THE TOOLS TO AS MUCH AS WE CAN. UH, I, I'M OPTIMISTIC THAT THERE ARE MORE SOLUTIONS, ESPECIALLY AS WE GET TO MORE AGENTIC, UH, TYPE OF SOLUTIONS, UH, TO BUILD A, A LOT OF [01:40:01] THE TIME RIGHT NOW IS JUST TO, TO BUILD THOSE MODELS. UH, WE'VE IN THE PAST TRIED DIFFERENT AUTOMATION TECHNIQUES THAT JUST HAVEN'T WORKED AS WELL. BUT I'LL SAY, I'M, I'M OPTIMISTIC THAT AS WE BRING MORE AGENTIC TOOLS IN THAT THEY'LL BE ABLE TO HELP SOLVE THAT. IT, IT, IT'S, WE'RE NOT THERE TODAY. WE, WE'VE LOOKED AT THAT, BUT I'M, I'M HOPEFUL GOING FORWARD THAT WE'LL BE ABLE TO GET THERE. UM, BUT IT'S, IT'S NOT, NOT A 2026 THING, BUT, YOU KNOW, MAYBE NEXT YEAR. UM, YEAH. SO, UH, YEAH, SO ABOUT 10 YEARS AGO, I THINK WE RECOGNIZED THIS ISSUE AND WORKED WITH STAKEHOLDERS TO, UM, IMPLEMENT A PIGGER THAT INTRODUCED THIS, THIS IDEA OF THIS QUARTERLY STABILITY ASSESSMENT, WHICH WE STARTED PERFORMING IN 2018. UH, SINCE 2018, THE WORKLOAD, THE NUMBER OF PROJECTS THAT WE ARE BRINGING ONLINE, UH, HAS DOUBLED. AND THAT'S JUST LOOKING AT IT FROM A GENERATION INTERCONNECTION PERSPECTIVE. UH, EARLIER THIS YEAR, LARGE LOADS NOW ARE ALSO SUBJECT TO GOING THROUGH THE, THE QSA, UH, AND, AND SO THAT, WITH THAT INCREASE IN IN WORKLOAD, UH, WE ARE, UM, UH, LOOKING AT CHANGING THE PROCESS. AND, AND WE'VE, UH, JUST LAST WEEK, UH, INTRODUCED PICKER 1 46, UH, WHICH YOU'LL BE HEARING MORE ABOUT IN THE FUTURE, WHICH WOULD CHANGE FROM A THREE MONTH, UH, CYCLE TO A A FOUR MONTH PROCESS. UH, SO THAT'S, THAT'S SORT OF A, A PREVIEW WHAT IS COMING, UH, AND, AND AGAIN, THE, THE MAIN DRIVER IN THAT IS THE INCREASE IN THE NUMBER OF PROJECTS, UH, BOTH NOW GENERATION, BUT ALSO NOW THAT WE'RE ADDING LARGE LOADS, IT'S JUST INCREASED THE COMPLEXITY OF, OF THOSE STUDIES. SO HOW, HOW MUCH RESOURCE WOULD WE HAVE TO ADD TO KEEP IT AT THREE MONTHS? I MEAN, 'CAUSE GIVEN THE AMOUNT OF CHANGE, YOU ACTUALLY WOULD LIKE TO DO IT MORE OFTEN, NOT LESS OFTEN. YEAH. YEAH. SO WE, SO WE, WE'VE ADDED, SO OVER THE YEARS, WE HAVE ADDED, UH, PEOPLE TO HELP PERFORM THAT STUDY SO THAT WE CAN KEEP THAT. SO, SO, YOU KNOW, AGAIN, IT'S THAT THAT WORKLOAD HAS BEEN STEADILY INCREASING AND WE'VE BEEN SETTLING STEADILY INCREASING STAFF TO KEEP UP WITH THAT DEMAND. BUT THERE, THERE IS A POINT IN WHICH YOU CAN'T, YOU, YOU JUST CAN'T THROW MORE PEOPLE AT IT BECAUSE THE, THE COMPLEXITY OF OF SETTING UP THAT STUDY MODEL, YOU, YOU, YOU CAN'T HAVE TOO MANY COOKS IN THE KITCHEN BECAUSE YOU, YOU, YOU GOTTA HAVE, UH, YOU KNOW, SINGLE ENGINEERS THAT ARE RESPONSIBLE FOR, FOR SINGLE AREAS SO THAT YOU, THEY'RE NOT STEPPING ON EACH OTHER'S TOES. AND SO WE THINK THAT WE'VE REACHED THAT LIMIT OF ADDING MORE RESOURCES AND HOW MUCH THAT COULD HELP. UH, BUT YOU KNOW, AGAIN, IF, IF WE ARE, AND, AND WE, WE HAVE SOME INITIATIVES LOOKING AT SOME OTHER TOOLS, UH, THEY'RE JUST NOT, I WOULD SAY, RIPE TODAY FOR, FOR, UH, LIMITATION. UM, AND, AND THEN YOU GO BACK TO MY EARLIER COMMENT, SOMETIMES IT, IT'S HELPFUL TO, UH, UNDERSTAND WE, WE SEE THESE EYE POPPING NUMBERS. WHAT, WHAT IS REAL? SO FOR THE FOURTH QUARTER OF THIS YEAR, WE, WE STARTED OUR QSA ON MAY 1ST, AND, UH, THESE ARE THE NUMBERS OF THE NEW GENERATORS AND NEW LARGE LOADS THAT ARE COMING ONTO THE SYSTEM. SO ABOUT FOUR GIGAWATTS OF, UH, IT, IT, AND IT'S ALL, UH, WIND, SOLAR, AND BATTERY, UH, A NEW GENERATION COMING ONTO THE SYSTEM AS WELL AS ABOUT 3.9 GIGAWATTS OF NEW LARGE LOADS. AND SO THESE ARE REAL PROJECTS THAT HAVE GONE THROUGH THE ENTIRE PROCESS, AND THIS IS THEIR, UH, LAST STEP IN THE PROCESS BESIDES THEIR MODELING TO COME ONLINE AND START EITHER GENERATING POWER ONTO THE GRID OR CONSUMING POWER, UH, FROM THE SYSTEM. AND THEN LASTLY, A, UH, NOER 2 45 UPDATE. SO, UH, IF YOU'LL REMEMBER, NOER 2 45, UH, PUT SOME NEW REQUIREMENTS ON IBR, UH, IN TERMS OF WRITE THROUGH REQUIREMENTS, UH, AND THOSE IBR COULD ASK FOR EXTENSIONS. SO THEY SAY, WE CAN MEET THE REQUIREMENTS, BUT WE NEED MORE TIME TO MEET THE REQUIREMENTS, OR WE ARE NOT ABLE, WE'RE, WE'RE AN EXISTING RESOURCE, WE'RE NOT ABLE TO MEET THESE REQUIREMENTS, AND WE NEED AN EXEMPTION. UM, IN ERCOT SET, UH, WE, WE HAD EARLIER DEADLINES THAT WE, UH, GAVE SOME GRACE ON, UH, BUT SET A FINAL DEADLINE OF APRIL 30TH FOR LARGE LOADS TO, UM, CORRECT ANY DEFICIENCIES IN THEIR SUBMISSIONS FOR EITHER ASKING FOR AN EXTENSION OR ASKING FOR AN EXEMPTION. UH, SO RIGHT NOW WE HAVE, UH, DENIED, UH, SEVEN OF THOSE EXTENSION REQUESTS. UH, WE'VE APPROVED 50 EXTENSION REQUESTS, AND THEN, UM, 45 OF THE, UH, REQUEST FOR EXEMPTIONS. WE HAVE STARTED THE, UH, RELIABILITY ASSESSMENT TO UNDERSTAND THE IMPACT. IF WE WERE TO GRANT THAT EXCEPTION TO THE REQUIREMENTS, WHAT WOULD BE THE RELIABILITY IMPACT OF THAT. UH, AND SO WE'VE STARTED THAT ANALYSIS FOR THOSE 45. AND, AND THEN WE HAVE A NUMBER OF REQUESTS THAT, AND ANYTIME YOU SET A DEADLINE, YOU HAVE [01:45:01] A LOT OF PEOPLE THAT WANT TO COME IN AT THE LAST MINUTE. UH, AND SO WE HAD A NUMBER OF REQUESTS THAT CAME IN, UH, ON APRIL 30TH. AND SO WE ARE STILL REVIEWING, UH, SOME OF THE INFORMATION THAT CAME IN. UM, BUT I THINK THE GOOD NEWS HERE IS THAT WE'VE STARTED THAT, THAT, UH, RELIABILITY ASSESSMENT ON THOSE, THOSE, UH, EXEMPTION REQUESTS. UH, SO THAT I WILL, UM, PAUSE AND SEE IF THERE ARE ANY QUESTIONS. UM, MR. CHAIRMAN, UH, QUICK QUESTION, JU JUST CURIOUS, CAN YOU HELP US UNDERSTAND, UM, KIND OF THE KEY REASONS WHY YOU WOULD ACCEPT OR DENY, UH, AN EX AN EXTENSION REQUEST? YEAH, TO, THE MAIN REASON FOR DENYING, DENYING AN UM, EXTENSION IS IF THEY DID NOT PROVIDE THE MODEL OR IF THE MODEL THAT THEY PROVIDED, UM, WASN'T, UM, IT, IT HAD QUALITY PROBLEMS, IT, IT WAS MISSING INFORMATION. SO THAT, THAT WAS THE PRIMARY REASON WHY WE DENIED EXTENSIONS. AND THE LAST TIME WE TALKED ABOUT THIS SUBJECT, WE HAD SOME PEOPLE THAT HAD NOT RESPONDED AT ALL. DO, DO YOU STILL HAVE A NUMBER OF THOSE? I, UH, I DON'T HAVE THAT NUMBER, UH, OFF THE TOP OF MY HEAD, BUT, UM, I THINK SO IF, IF, RIGHT, RIGHT NOW OUR ASSUMPTION IS IF NOBODY RESPONDED AT ALL, THEN, THEN THAT MEANS THAT THEY ARE INTENDING TO MEET THE REQUIREMENTS IN NORE 2 45. GOTCHA. OKAY. UH, WE, WE HAVE HAD SOME THAT, UM, THEY RESPONDED AND, AND IT'S MOSTLY MODELS WHERE THEY HAD, THEY RESPONDED AND THEY SAID, WE WANT AN EXEMPTION OR WE WANT AN EXTENSION. UH, BUT THEY, UH, EITHER DID NOT PROVIDE US A MODEL OR THE MODEL THAT THEY PROVIDED AGAIN, DID HAD SOME SORT OF, UH, DEFICIENCY. OKAY. AND FOR THAT GROUP OF ENTITIES THAT HAVEN'T REQUESTED AN EXTENSION OR EXEMPTION, WE'VE ASSUMING THAT THEY'RE GONNA MEET THE REQUIREMENTS, HOW WILL WE TEST WHETHER THEY HAVE OR WILL WE? YEAH, SO THEY'RE, UM, THEIR, THEIR MODELS SHOULD TELL US THAT. SO THEY, THEY SHOULD ALREADY HAVE MODELS ON FILE WITH ERCOT THAT TELL US IF THEY CAN MEET THOSE REQUIREMENTS. UM, WE, WE, WE DON'T HAVE A WAY TO REALLY TEST UN UN UNFORTUNATELY, UNTIL WE GET TO REAL TIME AND WE SEE IF THEIR PERFORMANCE DOESN'T MATCH WHAT THEIR MODEL IS HAS TOLD US, UH, WE, BUT WE DON'T HAVE A WAY TO REALLY VERIFY IF THEY HAVE GIVEN US A GOOD MODEL UN UNTIL WE SEE THAT REAL TIME PERFORMANCE. WE ARE REVIEWING ALL THOSE MODELS. WE'RE WE'RE REVIEWING THE MODELS. YES. OKAY. ANY OTHER QUESTIONS FOR JEFF? JEFF, DO YOU HAVE ANYTHING ELSE? UH, I, I DON'T. OKAY. I SEE. I THINK I HAD A QUESTION ON SLIDE SEVEN, IF I GO BACK TO THAT. NO, I'M GOOD. OH, YES. HERE, IT LOOKS LIKE WE'VE GOT AN IMBALANCE IN REGIONALLY, UM, IN TWO OR THREE OF THE REGIONS WHERE YOU HAD A HUGE INFLUX OF LOWS AND SMALL INCREASE IN GENERATOR, UH, OR IN GENERATION CAPACITY AND VICE VERSA AND OTHER REGIONS. WHAT, WHAT DOES THAT SIGNAL TO YOU AND WHAT DOES THAT MEAN AS FAR AS FUTURE GRID STABILITY? YEAH, AND, AND I SHOULD, UH, MAYBE HAVE A DISCLAIMER. SO AGAIN, THIS IS A, THIS IS A SINGLE SNAPSHOT. THIS, THIS IS JUST LOOKING AT WHAT IS COMING ONLINE OCTOBER THROUGH DECEMBER OF THIS YEAR. UH, YOU KNOW, THERE, THERE COULD BE OTHER RESOURCES OR LOADS THAT ARE COMING ON SAY, FIRST QUARTER OF NEXT YEAR THAT MAY BALANCE, UH, SOME OF THIS OUT. UM, AND THEN ULTIMATELY, YOU KNOW, WE HAVE TRANSMISSION THAT, UH, SOUNDS FAIR. CHRISTIE MENTIONED LOT, LOTS OF TRANSMISSION THAT'S COMING. THAT'LL HELP MOVE FROM THE GENERATION TO THE LEAD TO, TO YOUR QUESTION, WE COULD PROBABLY PROVIDE A VIEW THAT IS A LONGER DURATION VIEW TO KIND OF SHOW HOW OVER A PERIOD OF TIME GENERATION OF LOAD HAS, UH, GROWN IN VARIOUS PARTS OF THE REGION. YES. YEAH, THAT'S A GOOD QUESTION. THANKS, JEFF. ACTUALLY, I HAD A QUICK QUESTION. UH, I SEE SOUTH CENTRAL ON THERE. I DON'T SEE SOUTH. DO YOU HAVE ANY INFORMATION ON SOUTH? YEAH, SO IN, SO, UH, THERE'S SEVERAL IN, UM, UH, ACTUALLY MAYBE IT'D JUST BE SOUTH, UH, IN, IN THIS PARTICULAR QUARTER WHERE THERE, THERE'S NOT ANY ADDITIONAL LARGE LOADS OR GENERATORS THAT ARE CONNECTING AGAIN IN, IN JUST THAT SNAPSHOT OF FOURTH QUARTER OF THIS YEAR. ALRIGHT, THANKS JEFF. WE WILL INVITE THE OTHER JEFF TO COME BACK UP. UH, NEXT IS GEN [9. Independent Market Monitor (IMM) 2025 State of the Market Report] ITEM NINE, INDEPENDENT MARKET MONITOR, RE UH, STATE OF THE TWO 20 2025, STATE OF THE MARKET REPORT. UH, JEFF MCDONALD WITH MCDONALD, BUT POTOMAC ECONOMICS IS GOING TO MAKE THIS PRESENTATION. THANKS, JEFF. GREAT, THANK YOU. UM, SO I'D LIKE TO START OFF BY SAYING THAT, UH, THE REPORT WAS JUST PUBLISHED OVER THE WEEKEND AND I KNEW NOT EVERYONE WOULD'VE [01:50:01] HAD A CHANCE TO GO THROUGH IT. SO I PULLED A THEME OUT, UH, TO COVER A THEME, AND I'M ABSOLUTELY HAPPY TO COME BACK AT A SUBSEQUENT MEETING AND GO THROUGH SOME OF THE OTHER MATERIAL IN MORE DETAIL IF YOU WOULD LIKE THAT. UM, THE THEME IS CONSISTENT WITH THINGS THAT I'VE TALKED ABOUT BEFORE REGARDING SHORTAGE PRICING AND, AND SINCE I ALREADY HAD AN OPPORTUNITY TO HIGHLIGHT THE IMPORTANCE OF THAT, I WON'T, I WON'T REEMPHASIZE IT JUST YET. BUT AS YOU'LL SEE, AS I GO THROUGH, UH, THE FOUR SLIDES THAT I'VE GOT WITH CHARTS ON THEM, YOU'LL SEE THAT THE OVERALL THEME IS WE'RE NOT REALLY EXPERIENCING PRICE OR RESERVE CONDITIONS THAT WOULD INDICATE THAT THE SYSTEM IS IN A STRUCTURAL SHORTAGE OR EVEN CLOSE TO A STRUCTURAL SHORTAGE SITUATION. OBVIOUSLY, VERY EXTREME WEATHER CONDITIONS, YOU KNOW, WOULD, WOULD, COULD, COULD PRESENT A DIFFERENT CIRCUMSTANCE, BUT, BUT WE HAVEN'T SEEN THOSE, UH, NOT IN 2025, AND WE HAVEN'T SEEN THEM YET IN 2026. SO THIS CHART IS, I ALWAYS START WITH THE ALL IN PRICE. UH, THIS IS, THIS IS THE COST OF EVERYTHING, UH, NORMALIZED. AND, AND SO, YOU KNOW, WHAT WE SEE HERE, IF YOU LOOK AT THE LEFT SIDE, WE'VE GOT 2021 THROUGH 2025. OBVIOUSLY 2021 WAS A VERY STRESSFUL YEAR FOR THE SYSTEM. UH, WE'VE SEEN THE ALL IN PRICE COMING DOWN MOSTLY THERE WAS A, A LIGHT UPTICK IN ALL IN PRICE, UH, IN 2025. AND THAT WAS LARGELY DUE TO THE FACT THAT, UH, GAS, NATURAL GAS PRICE WAS A, A BIT HIGHER. SO, UH, OTHER THAN THAT, WE'VE, WE'VE SEEN, UH, A TREMENDOUS DOWNTREND, UH, IN THE ALL IN PRICE. THAT'S FOR EVERYTHING. UM, SO, YOU KNOW, WE DO SHOW BY MONTH HERE THAT ISN'T NECESSARILY THAT INTERESTING. UH, I, IN THIS PARTICULAR CASE, I THINK THE ANNUAL IS MOST INTERESTING, MOST OF THE SMALL UPTAKE DUE TO NATURAL GAS PRICE INCREASES. SO THEN WE LOOK AT, SO THEN WE LOOK AT, OKAY, WHAT WAS THE ENERGY PRICE PRODUCING? AND COMPARE THAT TO THE NATURAL GAS PRICE AND ASK OURSELVES, YOU KNOW, WHAT, WHAT DOES THAT MEAN FOR THE RELATIVE EFFICIENCY OF, OF A NATURAL GAS RESOURCE THAT WOULD'VE BEEN ON THE MARGIN IN THAT MARKET? THAT'S THE IMPLIED HEAT RATE. AND AS YOU CAN SEE, WE, WE MOVED THE ANNUAL OVER TO THE OTHER SIDE FOR THIS ONE, BUT ON THE RIGHT SIDE YOU CAN SEE 2021 THROUGH 2025, AND YOU CAN SEE THAT THE IMPLIED HEAT RATE, THE IMPLIED EFFICIENCY OF A NATURAL GAS UNIT THAT WOULD'VE BEEN ON THE MARGIN THROUGHOUT THE YEAR, UH, IS LOW RELATIVE TO THREE OUTTA THE FOUR PRIOR YEARS. SO THAT'S ALSO TELLING US, SO WE'VE NORMALIZED IT FOR NATURAL GAS, SO THAT TAKES OUT THE EFFECT OF THE NATURAL GAS PRICE, AND IT TELLS US THAT THE SYSTEM WAS NOT, UM, STRESSED, UH, DURING 2025 ENOUGH TO MOVE US FURTHER UP, UH, INTO LOWER EFFICIENCY RESOURCES. JEFF, I WANNA MAKE SURE I UNDERSTAND THIS. UH, SO YOU'RE SHOWING 20 21 7 30 NATURAL GAS NOR NORMALIZED PRICE THAT IF I RECALL CORRECTLY, THAT WASN'T THE PRICE IN 2021. UM, I CAN, I CAN GO BACK AND LOOK AND, AND, AND LOOK ON AN ANNUAL BASIS THAT MIGHT HAVE BEEN A SPIKE. WE, WE, WE, WE JUST, YOU KNOW, WE GET THAT THAT WOULD BE A, A ANNUAL AVERAGE FOR, FOR THE YEAR. SO IF YOU HAD A REALLY HIGH PRICE FOR A A SHORT PERIOD OF TIME FOR A COUPLE WEEKS, THAT WOULD SKEW THE PRICE. IT, IT WOULD SKEW IT UP AND, AND, YOU KNOW, YOU WOULD, YOU WOULD'VE SEEN HIGHER PRICES IN THE SUMMER AS WELL, UM, AND HIGHER GAS PRICES. SO, BUT, BUT I CAN GO BACK AND CHECK AND, AND GET BACK TO YOU ON THAT. CAN WE GO BACK TO YOUR FIRST LINE AND LOOK AT THE ANNUAL DATA BECAUSE IT, JEFF, IT LOOKS LIKE AS A PERCENT OF THE WHOLE ELECTRICITY COST YEAR OVER YEAR FROM 22 TO 25, THERE'S ACTUALLY LESS ANCILLARY SERVICES AS A PERCENT OF THE WHOLE AND WE'RE GOING IN THE RIGHT DIRECTION FOR OUTTA MARKET ENERGY AND NOW WE'VE TURNED ON RTC PLUS B, WHICH SHOULD MAKE IT EVEN MORE EFFICIENT. CORRECT? UM, IT, IT, IT IS. SO HAVING A LOWER ANCILLARY SERVICE COST AND A LOWER OUT OF MARKET COST, A LOWER OUT OF MARKET COST IS FANTASTIC. UM, YOU KNOW, ANCILLARY SERVICES, AND ESPECIALLY SINCE WE ARE IN RTC, ARE IN MARKET COST. AND I'M, YOU KNOW, IF YOU'RE TRYING TO TIE IN SOME OF OUR COMMENTS ABOUT ANCILLARY SERVICE PROCUREMENT WITH THE PRICING AND COST, IT IS A LITTLE, UM, THERE ARE TWO SIDES TO IT. SO LOWER PRICES ARE NOT NECESSARILY BETTER THAN HIGHER PRICES. WE JUST WANNA MAKE SURE THAT THE PRICES THAT ARE BEING SET ARE BEING SET BASED ON [01:55:01] REASONABLE RELIABILITY CRITERIA AND THAT WE CAN COUNT ON THEM TO TRIGGER WHEN WE HIT LESS THAN LESS THAN, YOU KNOW. PERFECT RELIABILITY WAS, WAS THAT WHERE YOU WERE GOING WITH THAT? I WAS GOING WITH THE FACT THAT OVER THE YEARS THAT THE OUT OF MARKET COST OF, OF ELECTRICITY FROM ANCILLARY SERVICES AND UPLIFT IN THIS CASE IS A DECLINING PORTION OF THE OVERALL COST OF ELECTRICITY IN THE MARKET, WHICH IS IN THE LONG TREND GOING IN THE RIGHT DIRECTION. YEAH. AND NOW IN 26, WHAT C PLUS B BEING TURNED ON, WE'D EXPECT IT TO BE EVEN MORE EFFICIENTLY DONE, THEREFORE EVEN LOWER. YES, I, I AGREE WITH THAT. AND EVEN LOWER WOULD DEPEND ON THE KINDS OF SHORTAGE CONDITIONS THAT WE INCUR. THEY MIGHT BE HIGHER, BUT I COMPLETELY AGREE WITH YOU THAT RTC IS ADDED A GREAT DEAL OF EFFICIENCY TO THE PROCUREMENT OF ANCILLARY SERVICES. SO, SO THIS CHART SHOWS, UH, THE OVERALL SHORTAGE PRICING. UM, AND AS, AS YOU CAN SEE IN THE TABLE THAT'S IN SET THERE, UH, WE'VE HAD THE LOWEST AVERAGE SHORTAGE PRICE, UH, SINCE THE HISTORY OF SHORTAGE PRICES. AND SO, UH, THAT IS ANOTHER INDICATOR THAT THIS SYSTEM IS NOT, YOU KNOW, TEETERING ON THE EDGE OF, OF SEVERE RELIABILITY ISSUES. AGAIN, UH, SEVERE WEATHER, SEVERE AND ESPECIALLY PROLONGED SEVERE WEATHER CONDITIONS WOULD, WOULD CHANGE THE STORY, BUT WE'RE JUST NOT SEEING THAT. AND YOU NEVER KNOW WHAT WEATHER YEAR YOU'RE GONNA GET UNTIL YOU, UNTIL YOU GET THERE. SO 2026 COULD WIND UP A LITTLE DIFFERENT THIS SUMMER. UM, AND THEN THIS IS THE LAST CHART IN THIS THEME, AND THIS SHOWS, SO THIS IS THE, THE, THE PRC, UH, A REAL TIME MEASURE OF AVAILABLE RESERVE. AND IF YOU LOOK AT THE RED LINE, UM, YOU'LL SEE THE HOURS OF PRC LESS THAN SIX AND A HALF GIGAWATTS JUST GOES DOWN CONSIDERABLY. UM, AND SO WHAT, YOU KNOW, WHAT WE'RE SEEING IS THERE'S JUST AMPLE, UH, PRC IN THE SYSTEM IN REAL TIME. AND AN INTERESTING NOTE IS IF YOU LOOK AT THE PURPLE LINE, THAT'S THE, THE MINIMUM PRC OBSERVED OVER THESE YEARS. AND THE BLUE LINE IS THE AVERAGE PRC AND, AND WHAT, WHAT YOU CAN SEE IS, YOU KNOW, THE AVERAGE HAS THE, THE MINIMUM HAS COME UP TO BE JUST ABOUT EQUAL TO WHAT THE AVERAGE WAS FOUR OR FIVE YEARS AGO. SO WE'RE JUST SEEING A LOT MORE PRC, AGAIN, REAL TIME AVAILABLE RESERVE. AND I WOULD LIKE TO ACKNOWLEDGE, BECAUSE WE'VE HAD SOME GOOD INSIGHTFUL CONVERSATIONS WITH ERCOT STAFF WITH HIGHER, UM, RENEWABLE FORECAST ERROR AND WITH ENERGY STORAGE RESOURCES STATE OF CHARGE, AND THE DIFFICULTY WITH NECESSARILY TRACKING OR PREDICTING THE STATE OF CHARGE, THE PRC JUST GIVES YOU AN ESTIMATE OF THE AVAILABLE RESERVE AT A MOMENT IN TIME. AND WHEN YOU HAVE THESE IN LARGE MAGNITUDE VARIABLE RESOURCES, UM, AND, AND THE STATE OF CHARGE ISSUE WITH STORAGE, IT DOESN'T GIVE YOU WHAT YOU CAN LOOK FLUSH WITH CAPACITY RIGHT NOW. AND IT DOESN'T TELL YOU THAT YOU MIGHT HIT A CLIFF, UH, IN 30 OR 60 MINUTES. AND SO THERE HAS, YOU KNOW, WE'VE TALKED WITH ERCOT STAFF ABOUT THEIR VIEW OF SOME OF THE SHORTCOMINGS OF PRC AND HOPEFULLY, YOU KNOW, I MEAN THEY CERTAINLY DESERVE, UH, TO HAVE A BETTER MEASURE THAN THAT, THAT GIVES THEM MORE CONFIDENCE. ISN'T THAT SUBJECT? I THINK WOODY'S GOT A, YEAH, THAT WAS THE, EXACTLY THE POINT IS 2016, THE PERCENT OF PRC THAT WAS LIMITED DURATION WAS NOTHING, RIGHT? IT WASN'T THERE. SO IT'D BE INTERESTING IF THAT GRAPH HAD, UM, LIKE A PERCENT OF THE PRC THAT WAS MADE UP FROM LIMITED DURATION RESOURCES, BECAUSE I THINK THAT WOULD TELL A COMPLETELY DIFFERENT STORY BECAUSE IF YOU JUST LOOK AT THAT GRAPH, YOU WOULD THINK THAT WE'RE HOGGING A BUNCH OF PRC, BUT THAT'S ACTUALLY NOT THE CASE AT ALL. WE FEEL LESS SECURE NOW. I MEAN, I'D MUCH RATHER HAVE 5,000 MEGAWATTS OF NON-LIMITED DURATION GENERATION THAN HAVE, YOU KNOW, WHATEVER THAT IS, 11,000 MEGAWATTS OF, OF, UH, LIMITED DURATION. YEAH. IT'S A COMPLETELY FROM A, FROM AN OPERATOR SITTING IN A CONTROL ROOM, THAT'S A, IT'S A MUCH MORE COMPLEX PROBLEM TO SOLVE [02:00:01] WHEN YOU HAVE YOUR PRC MADE UP OF LIMITED DURATION RESOURCES, ESPECIALLY WHEN IT'S A LARGE PERCENTAGE. YEAH. YEAH. AND I CAN SEE HOW, YOU KNOW, THERE'S A LOT OF VARIABILITY TO HOW THAT, UH, STATE OF CHARGE WOULD BE AVAILABLE TO YOU OR NOT. AND IT MIGHT BE AVAILABLE TO YOU MOST ALL OF THE TIME. UM, AND THEN IT ISN'T. AND SO I KNOW, I KNOW ANDREW FROM MY TEAM HAS HAD CONVERSATIONS WITH ERCOT STAFF ABOUT DIFFERENT WAYS TO REFLECT THE ENERGY THAT'S AVAILABLE ONLINE, MAYBE NOT THE CAPACITY. SO, YOU KNOW, MAYBE THAT'S SOMETHING WE CAN TALK ABOUT GOING FORWARD. WELL, I THINK YOU'RE GONNA SEE, UH, I THINK YOU'RE GONNA SEE A CHANGE ACROSS THE ENTIRE COUNTRY FROM A NERC PERSPECTIVE. I THINK DAN'S GONNA TALK ABOUT THIS LATER MAYBE. BUT, UM, THIS NEED FOR AN ENERGY TRIGGER INSTEAD OF JUST LOOKING AT PRC, I MEAN, PRC AS A MEASUREMENT OF, OF, OF ANYTHING NOW IS, IS GETTING OUTDATED VERY, VERY QUICKLY. OKAY. THANK YOU. YEAH. I HAD ONE, ONE OTHER QUESTION. UM, MAYBE BACK ON ONE OF YOUR ANCILLARY SERVICE SLIDES. UH, SO I REMEMBER BEFORE RTC, WE WOULD BUY ANCILLARY SERVICES AND THE CRITICISM WAS YOU'RE EITHER YOU'RE BUYING TOO MUCH, TOO MANY MEGAWATTS OF ANCILLARY SERVICES, AND THEN THE SECOND CRITICISM WAS YOU'RE HOLDING ONTO 'EM TOO LONG. 'CAUSE WHEN WE BOUGHT 'EM BEFORE RTC, WE WOULD TAKE 'EM OUTTA THE MARKET. MM-HMM . PUT 'EM IN OUR BACK POCKET, HOLD ONTO 'EM UNTIL WE NEEDED THEM, PRICES WOULD GET HIGH. SO WE WERE CRITICIZED FOR, FOR NOT RELEASING 'EM EARLY ENOUGH OR BUYING TOO MUCH AND DRIVING PRICES UP. BUT IT SEEMS LIKE AFTER RTC, THE CRITICISM IS, CRITICISM HAS CHANGED IN THAT NOW WE BUY ANCILLARY SERVICE AND RTC CAN USE 'EM. SO WE FLOODED THE, UH, FLOODED THE MARKET WITH MORE GENERATION AND PRICES ARE TOO LOW. AH, SO WHERE'S THE SWEET SPOT? WHERE'S THE OPTIMAL AMOUNT OF ANCILLARY SERVICE? SO WHERE, NOW THAT WE'RE IN THE RTC WORLD, SO THAT WE'RE NOT SUPPRESSING PRICES, BUT WE STILL GET THE RELIABILITY. AND I THINK THAT'S THE, THAT SEEMS LIKE A, YOU KNOW, A CRITICISM ON EITHER SIDE. YEAH. SO I APPRECIATE YOU BRINGING THAT UP. SO, SO, UM, I DON'T THINK THIS IS A CRITICISM PER SE, BUT, BUT, BUT I RECOGNIZE YOUR POINT. SO, YOU KNOW, I WANNA ADDRESS IT. YOU KNOW, THIS IS JUST SHOWING THAT THE PRICES ISN'T, YOU KNOW, THE SHORTEST PRICES AREN'T VERY HIGH. THERE'S A, THERE'S A DISTINCTION BETWEEN BUYING TOO MUCH OR TOO LITTLE RESERVE, AND THEN WHAT THE REAL TIME MARKET IS ABLE TO DO WITH IT, OR WHAT YOU, AND, AND BUYING TOO MUCH OR TOO LITTLE IN ERCOT PROJECTS BACK INTO THE R PROCESS. SO THE R PROCESS IS GEARED TO MAKE SURE THAT THERE'S SUFFICIENT CAPACITY ONLINE TO MEET LOAD PLUS THE RESERVE REQUIREMENTS. SO THE HIGHER YOUR RESERVE REQUIREMENTS ARE, THE MORE LIKELY YOU ARE TO ROCK IN ORDER TO MEET THOSE, UM, RESERVE REQUIREMENTS THAT PUTS ADDITIONAL MINIMUM LOAD OR LSL ON, WHICH CAN SUPPRESS THE ENERGY PRICE, UH, NOT NECESSARILY THE, THE RESERVE PRICE. SO, SO IS IT TOO MUCH OR TOO LITTLE? YOU KNOW, WE WILL GO THROUGH THE, THE AS METHODOLOGY PROCESS AND, AND HOPEFULLY TRY AND FIND, YOU KNOW, THE PARAMETERS AND, AND MODEL SPECIFICATIONS THAT PROVIDE THE RIGHT LEVEL OF A PROCUREMENT THAT YIELDS THE RIGHT LEVEL OF RELIABILITY. BUT IT'S, IT'S ALLOWING THE MARKET, UH, YOU KNOW, UH, ABSENT REC, YOU KNOW, ALLOWING THE MARKET TO SIGNAL, UM, THAT MORE ONLINE CAPACITY IS NEEDED BECAUSE THERE ISN'T AS MUCH, UH, AND YOU'RE, YOU'RE PRICING UP THE SHORTAGE CURVES AND LETTING A MARKET RESPONSE HAPPEN. UM, AND THAT'S OKAY. THAT'S A HIGHER PRICE, BUT THAT'S OKAY. UH, AND YOU KNOW, TO THE EXTENT THAT, YOU KNOW, WE'VE GOT SOME PRICE FLOORS, UM, THAT ARE EFFECTIVE IN THE, IN THE RESERVE SPACE, YOU KNOW, TO THE EXTENT YOU NEED TO HAVE A PRICE FLOOR IN THERE, YOU'RE NOT ALLOWING THE PRICE TO GO DOWN AS FAR AS IT NEEDS TO GO TO, TO TRULY VALUE IT. AND SO LOWER PRICES COULD BE OKAY. ALSO, IT JUST DEPENDS ON THE SYSTEM CONDITION. SO, YOU KNOW, I, I, I KNOW THAT COULD SOUND LIKE AN ECONOMIST IS TALKING OUT OF BOTH SIDES OF HIS MOUTH, BUT HIGHER PRICES ARE NOT ALWAYS BETTER, AND LOWER PRICES ARE NOT ALWAYS BETTER. YOU JUST WANT, YOU JUST WANT A TIGHTER PROCUREMENT SYSTEM AND A PRICING SYSTEM SO THAT YOU'RE GETTING THE, THE RELATIVE SHORTAGE REFLECTED ACCURATELY. I, I THINK THE [02:05:01] OTHER DANGER IS, THE THING WE HAVE TO LOOK OUT FOR WHEN WE, WHEN WE LOOK AT THESE METHODOLOGIES IS THAT, UH, THE MARKET IS NOT THE SAME YEAR TO YEAR AND THE RISKS AREN'T THE SAME. AND AS WE ADD MORE SOLAR AND MORE LIMITED DURATION RESOURCES, THAT CHANGES AND MORE, MORE DEMAND RESPONSE MM-HMM . AND SO THE, WHATEVER WE COME UP WITH FOR THE ANCILLARY SERVICE METHODOLOGY, IT NEEDS TO ADAPT TO WHAT THE RISKS ARE GOING FORWARD AND NOT JUST WHAT WE SAW TWO YEARS AGO OR THREE YEARS AGO. BECAUSE THOSE, THAT WAS A VERY DIFFERENT MARKET, VERY DIFFERENT GRID. AND SO IT'S GOTTA, YOU, AS THE MARKET CHANGES, YOU'VE REALLY GOTTA MAKE SURE THAT ANCILLARY SERVICE METHODOLOGY ACCOUNTS FOR THE NEW RISK, NOT JUST WHAT WE'VE SEEN IN THE PAST. YEAH. YEAH, I AGREE WITH THAT. OKAY, JULIA, THEN, UH, I'M GONNA GIVE A LITTLE BIT OF A CALL HERE THAT WE NEED TO TRY TO STAY CRISP. WELL, I THINK WHAT WE TELL SCHEDULE KEEP, BUT WHAT SAID THAT THE GRID IS CHANGING, UH, THE DEMAND'S GROWING. IS THERE A WAY YOU CAN TAKE THIS PRC CURVE, NOT THIS SLIDE ON THE SCREEN, BUT THE, THE ONE YOU WERE LANDING ON AND NORMALIZE IT TO THE SIZE OF THE GRID OR THE NUMBER OF YEAH. DAYS THAT WERE, I, I THINK WE COULD DO THAT. I MEAN, UH, WOODY HAD A GOOD POINT ABOUT, ABOUT DISTINGUISHING BETWEEN ENERGY STORAGE RESOURCES AND NOT ENERGY STORAGE RESOURCES. WE'VE GONE THROUGH AND DONE SOME ACCOUNTING TO TRY AND CONSTRUCT OUR OWN PRC. I MEAN, I'D BE HAPPY TO, I'D BE HAPPY TO DO THAT BECAUSE I DON'T KNOW TO THE EXTENT WE COULD ACCOUNT FOR EVERYTHING THAT'S CHANGING, BUT I THINK THERE ARE ONE OR TWO THINGS WE COULD ACCOUNT FOR. BUT I THINK NO ONE IS SURPRISED BY THE PRC MOVING UP BECAUSE THE TOTAL SIZE OF THE GRID IS MOVING UP SO THAT THIS IS A LOGICAL TREND THAT WE'D EXPECT. RIGHT? SURE. AND, AND THERE'S THAT SIMPLE NORMALIZATION JUST TO LIKE PEAK LOAD FOR EXAMPLE OR SOMETHING. YEAH. YEAH. UM, SO THAT WAS, THAT WAS ALL I HAD. THANKS, JEFF. SO THANK YOU VERY MUCH. ANY OTHER QUESTIONS FOR JEFF? OKAY. WE APPRECIATE YOUR REPORT. UH, NEXT IS [9.1 ERCOT Staff Preliminary Response to IMM 2025 State of the Market Report] AGENDA ITEM OF 9.1, THE ERCOT STAFF PRELIMINARY RESPONSE TO THE IM IMM 2025 STATE OF THE MARKET REPORT PRESENTED BY KEITH. KEITH IS GONNA PRESENT IT BRIEFLY. ALL RIGHT. GOOD AFTERNOON, MR. CHAIRMAN AND, UH, BOARD THE COMMISSIONERS. UH, MY NAME IS KEITH COLLINS HERE TO PRESENT THE PRELIMINARY RESPONSE. I WILL NOTE THAT, UH, AS JEFF SAID, THIS REPORT DID COME OUT YESTERDAY. UH, UH, BUT WE, WE DO HAVE SOME INITIAL THOUGHTS THAT WE THINK WOULD BE, UH, RELEVANT FOR FOLKS TO, TO THINK ABOUT IN, IN THE COMING WEEKS HERE BEFORE WE DO OUR MORE THOROUGH RESPONSE, UH, AT THE NEXT BOARD MEETING. OOPS, HERE WE GO. ALL RIGHT. OKAY. THANK YOU. THIS ONE. ALRIGHT, HERE WE GO. ALRIGHT. SO, UM, WE'VE ALREADY COVERED THESE ITEMS. UH, SO WHERE ARE SOME AREAS THAT BOTH, UH, THE IMM AND ERCOT ARE IN ALIGNMENT? I THINK THERE ARE A NUMBER OF POINTS, SOME KEY FINDINGS AND SOME FOLLOW UP ACTIONS THAT WE ARE, UH, UH, VERY MUCH IN ALIGNMENT WITH WHAT THE IMM WAS SUGGESTING. UH, WHEN YOU LOOK AT PRICING OUTCOMES, AND THAT GETS TO SOME OF THE DISCUSSION THAT HAD BEEN HERE JUST A FEW MINUTES AGO. SOLAR AND STORAGE ARE SIGNIFICANT IN CHANGING THE DYNAMICS OF PRICING OVER THE LAST, PARTICULARLY THE LAST COUPLE YEARS, BUT VERY NOTICEABLE LAST YEAR. THE IMM DOES HAVE, UH, SOME POINTS RELATED AROUND, UH, THE CURRENT LOAD ZONE, UH, STRUCTURE AND INDICATING THAT IT, IT COULD BE PROBLEMATIC AND NEED TO EVOLVE. WE ALSO AGREE AND GIVEN THE CHALLENGES WE'RE SEEING IN THE FAR WEST, UH, THE CURRENT LOAD ZONE STRUCTURE MISSES SOME OF THOSE CHALLENGES. AND, AND THIS IS SOMETHING THAT WE NEED TO THINK ABOUT, UH, AND HOW WE MIGHT ADJUST THAT GOING FORWARD. THAT'S SOMETHING THEY RECOMMENDED AS WELL. THERE'S A THEME IN THE REPORT THAT THEY HAVE ABOUT RELIABILITY UNIT COMMITMENTS ULTIMATELY AS BEING UNDESIRABLE AND, AND THE NEED TO AVOID THOSE. I THINK WE ALSO AGREE WITH THAT. UH, AND I'LL NOTE THAT IN JUST A FEW SECONDS THAT, UH, THAT THERE HAS BEEN SOME CHANGES AND ARE LIKELY TO BE SOME FURTHER CHANGES TO HELP ADDRESS THOSE GOING FORWARD. UH, THE IMM DID DO AN ANALYSIS OF, UH, THE CURRENT OPERATING PLANS STATE OF CHARGE INPUTS, INPUTS, UH, AND NOTED THAT SOME OF THESE, UH, THIS, THIS INFORMATION WAS, UM, INACCURATE, IS, IS MAYBE ONE WAY TO SAY IT. AND, AND WE, WE HAD DONE SOME, UH, SOME ADDITIONAL ANALYSIS AS WELL ON OUR END THAT SHOWED THAT, THAT THERE WAS THIS DISCONNECT THAT OCCURRED AND THAT HAD THE IMPACT OF POTENTIALLY INCREASING [02:10:01] RUX THAT WE SAW IN 2025. AND THEN I THINK ONE OF THE THINGS THAT, THAT JEFF JUST MENTIONED A MINUTE AGO IS THE IMPLEMENTATION OF, UH, REAL-TIME CO-OP OPTIMIZATION ULTIMATELY HAS HAD SOME EFFICIENCIES AS A RESULT OF THAT. BUT ONE OF THE THINGS THAT, THAT BOTH THEY AND WE NOTE IS A REDUCTION IN INCIDENTS OF, OF RUCKS WHEN WE COMPARE THE, THE, WHAT HAPPENED LAST YEAR TO THIS YEAR. AND, AND THEY INITIALLY FOUND THAT, UH, 80% REDUCTION IN RUX AS A RESULT OF CO-OP, REALTIME CO-OP OPTIMIZATION. AND THEY NOTED THAT IN THEIR STUDY, AND WE CONCUR WITH THAT AS WELL, THAT WE'VE SEEN A, A RA A RATHER SIGNIFICANT, UH, REDUCTION. AND I THINK ONE OF THE THINGS WE'VE BEEN HEARING IS, IS THAT, UH, RUX ARE, UH, WE AGREE ARE UNDESIRABLE, BUT WE HAVE A, HAVE HAD A SIGNIFICANT AND SUBSTANTIAL CHANGE IN THAT SINCE IMPLEMENTATION OF, OF RTC PLUS B. AND, AND THEY NOTE THAT IN THEIR REPORT. THERE ARE A COUPLE FOLLOW UP ACTIONS THAT THEY NOTE THAT WE ALSO AGREE WITH, UH, UH, MOVING NPR 1214 FORWARD. UH, NPR 1214 IS A PRICE FORMATION, UH, PARTICULARLY WHEN WE LOOK AT HOW WE, UH, ADDRESS ADDERS, UH, PRICE ADDERS IN, IN, IN THE SYSTEM AT A LOCATIONAL LEVEL. UH, WE AGREE WITH THAT. THEY INDICATED THAT IS SOMETHING, UH, TO MOVE FORWARD, AND THAT IS SOMETHING THAT STAKEHOLDERS HAVE IDENTIFIED AS, AS A, AS A PRIORITY. SO THIS IS SOMETHING WHERE THERE'S A FAIR AMOUNT OF ALIGNMENT. UH, WE, WE PUT OUT COMMENTS LAST WEEK. WE EXPECT DISCUSSIONS TO OCCUR THIS WEEK, UH, AT WMS AND, AND THEN UL, ULTIMATELY AT PRS AS WELL. UH, THEY DID INDICATE ADDRESSING CRYPTOCURRENCY, UH, UH, MINING AS A PART, AS A PART OF THE ERS UH, PROGRAM. THIS IS SOMETHING THAT WE HAD MENTIONED LAST TIME AT THE, UH, AS PART OF THE CHARLES RIVER ASSOCIATES REPORT. THE IMM UH, SORT OF ECHOES THE, THE, THE POINT OF, OF ADDRESSING THAT PARTICIPATION, UH, IN, IN THAT PROGRAM. AND THEN THEY FINALLY NOTED THAT, UH, UH, THEY DID AN ANALYSIS OF CRYPTOCURRENCY MINING LOADS AS PART OF CONTROLLED LOAD RESOURCES. THEY FOUND THAT IT, IT WAS A RELATIVELY LOW, UH, LEVEL, UH, THAT PARTICIPATED IN THAT PROGRAM. WE CONCUR WITH THAT. AND WHEN YOU LOOK AT THE TOTAL VOLUME OF, UH, CRYPTOCURRENCY MINES APPROXIMATELY 4,600, UH, MEGAWATTS, THE VAST MAJORITY OF THAT IS NOT ACL R. AND, AND SO, UH, THEY INDICATED THAT IMPROVING, UH, IMPROVING OUTCOMES CAN OCCUR BY MIGRATING MORE OF THAT INTO THAT CLR PROGRAM. SO THE, THE KEY TAKEAWAY HERE IS THERE ARE DEFINITELY AREAS OF ALIGNMENT THAT WE HAVE AND WE SAW IN THE REPORT AND WE'RE VERY THANKFUL, UH, FOR MANY OF THE ANALYSIS AND FINDINGS THEY HAD. UH, I WILL NOTE THAT THERE WERE SOME AREAS OF DISAGREEMENT. ONE OF THEM, UH, WAS, WAS NOTED JUST A FEW MINUTES AGO WITH THE PRC, UH, AND, AND THE FACT THAT IT MAY NOT BE A, AN ACCURATE BASIS OF MEASUREMENT IN AN ASSESSMENT. UH, AND AGAIN, WE HEARD THAT DISCUSSION JUST A FEW MOMENTS AGO, UH, JUST LOOPING AROUND ON A COUPLE OF THE OTHERS. UH, THERE WAS NOTE IN THE REPORT THAT RUCKS WERE A FUNDAMENTAL FEATURE OF CONSERVATIVE OPERATIONS. AND WE DO NOT BELIEVE THAT THAT IS, THAT IS AN ACCURATE, UH, STATEMENT. AND THEN, UM, THE IMM DID NOTE THAT THE LOWER NET REVENUES IN 2025 MAY THREATEN LONG-TERM RESOURCE, MAY, UH, MAY NOT THREATEN LONG-TERM RESOURCE ADEQUACY. UH, ALTHOUGH I THINK OUR CONCERN IS THAT IT, IT VERY WELL MIGHT. AND I THINK WE'RE GONNA LEARN AS PART OF THE RELIABILITY STANDARD ASSESSMENT WHERE WE ARE RELATIVE TO THE, THAT, UH, THAT ASSESSMENT, UH, BASED ON THE MARKET DESIGN THAT WE HAVE TODAY. SO I THINK THAT'S, THAT ANALYSIS IS GONNA BE REALLY IMPORTANT. AND, AND THEREFORE WE THINK, UH, THAT THE CONCLUSION WAS, WAS MAYBE A BIT STRONGER THAN THAN WE WOULD'VE SUGGESTED. AND THEN THE FIRST POINT I, I NOTE, AND I SKIPPED OVER THIS IS SOMETHING THAT, UH, IS, UH, IS SOMETHING THAT WAS HIGHLIGHTED IN IN THEIR EXECUTIVE SUMMARY. UH, AND I THINK THEY HAD SUGGESTED THAT A RESOURCE ADEQUACY CONSTRAINT, UH, BE SOMETHING THAT BE IMPLEMENTED IN, UH, IN THE VARIOUS ORCO PROCESSES THAT COULD POTENTIALLY DELAY THE INTEGRATION OF LARGE LOADS UNTIL SUCH TIME THAT, UH, THERE WAS SUFFICIENT, UH, GENERATION, UH, RESOURCES TO MEET, UH, MEET THE NEEDS. AND, AND I JUST WANTED TO, TO NOTE THAT WE, WE SUPPORT THE RELIABLE OPERATION AND ADEQUACY OF THE GRID, AND WE EMBRACE THE DEVELOPMENT AND CONNECTION OF NEW LOADS TO THE GRID AS WELL. WE DO DISAGREE WITH THE IMM ON THE APPROACH AND HOW THIS SHOULD BE DONE. WE HAVE BEEN STRONG SUPPORTERS OF DEMAND RESPONSE PROGRAMS, INCLUDING RESIDENTIAL DEMAND RESPONSE, WE SHOULD DISCUSSED AT THE LAST BOARD MEETING AS AN ALTERNATIVE BRIDGE SOLUTION, RATHER THAN DELAYING, UH, CONNECTION OF NEW LOADS. FURTHERMORE, SENATE BILL SIX PROVIDES A RELIABILITY SAFETY VALVE TO CURTAIL LARGE LOADS AND AN EMERGENCY EVENT BEFORE RESIDENTIAL AND CONCERNABLE COMMERCIAL CONSUMERS. SO THIS, THIS HIGHLIGHTS WHERE, UH, WE WERE, UH, IN DISAGREEMENT WITH THE IMM. UH, AGAIN, THERE WERE AREAS OF AGREEMENT, BUT ALSO SOME AREAS OF DISAGREEMENT. [02:15:01] UH, THE FINAL THING I WANTED TO NOTE WAS SOME POTENTIAL AREAS OF ENHANCEMENT. ONE OF THE THINGS THAT THE IMM REPORT DID NOT FOCUS ON, UH, WAS THE EFFECTS OF CRYPTOCURRENCY MINING OUT OF MARKET PRICE, BEHAVIOR ON PRICING, INCOMES, PRICING OUTCOMES. I THINK THIS IS REALLY IMPORTANT. UH, AS THE IMM SHOWED IN, IN HIS CHART, HE SAID, WOW, THIS, THE NUMBER OF SCARCITY EVENTS HAVE BEEN THE LOWEST HAD BEEN IN SOME TIME. UH, THERE WAS SOME, SOME INDICATION THAT THERE WAS AN INCREASE IN SUPPLY RESOURCES. AND WE DEFINITELY AGREE THAT PARTICULARLY THE, UH, BATTERY STORAGE RESOURCES, UH, ESRS HAVE, HAVE A WAY OF HELPING TO ADDRESS AND ALLEVIATE SOME OF THOSE, THOSE CONDITIONS. BUT I DON'T WANNA OVERLOOK THE FACT THAT CRYPTOCURRENCY MINING OUT OF MARKET PRICE BEHAVIOR, UH, HAS A SIGNIFICANT EFFECT ON THAT AS WELL. WITH 4,600 MEGAWATTS OF PRICE SENSITIVE CRYPTO MINING LOADS, PARTICULARLY DURING PERIODS OF, UM, UH, UH, WHEN THE SYSTEM DID GET, UH, TIGHT ON, ON OCCASION IN, UH, 2025, AND WE SAW THAT CONTINUE IN 2026, THAT WE SEE A VERY SIGNIFICANT OUT OF MARKET PRICE RESPONSE DURING THOSE PERIODS. AND ONE OF THE THINGS THAT THEY NOTED IN THE REPORT WAS THAT THIS COULD BE THE RESULT OF DATA LIMITATIONS ON THEIR END. AND SO THE, THE FACT THAT THEY DON'T HAVE THE INFORMATION NECESSARY TO PERFORM THAT ANALYSIS EFFECTIVELY IS SOMETHING THAT WE CAN WORK WITH THEM ON GOING FORWARD TO ENSURE THAT THAT TYPE OF ANALYSIS ALSO SHOWS THE IMPACT OF THAT OUT OF MARKET BEHAVIOR ON PRICING OUTCOMES. AND THEN THE FINAL POINT THEY NOTE IS, IS SOMETHING THAT, UH, THEIR VIEW ON PARTICULARLY SOME OF OUR REPORTS SUCH AS THE MORA, UH, IS THAT, UH, HOW WE TREAT, UH, LOAD DURING THOSE REPORTS, UH, DIFFERS FROM, FROM HOW THEY MAY VIEW LOAD IN PARTICULAR. AND AGAIN, IT GETS TO THAT CRYPTOCURRENCY LOAD, IS THAT, THAT TENDS TO BE VERY FLEXIBLE AND IN SOME OF THOSE REPORTS THAT MAY TREAT IT AS BEING FIRM LOAD AS OPPOSED TO NON FIRM, WHEN IT COULD BE VERY PRICE SENSITIVE. AND SO THAT MAY BE SOMETHING THAT WE WOULD CONSIDER AS, AS AN ENHANCEMENT AS WE THINK ABOUT HOW OUR REPORTS TREAT THOSE PARTICULAR LOADS AND HOW OUR FORECASTS LOOK AT THAT. SO THAT IS ULTIMATELY SOME OF THE POTENTIAL ENHANCEMENTS THAT EITHER THE IMM OR OR ERCOT CONSIDER GOING FORWARD. AND FINALLY, UH, WE'LL PROVIDE A MORE DETAILED RESPONSE AND EVALUATION OF THE IM RECOMMENDATIONS, UH, AND PRESENT THAT TO THE SEPTEMBER BOARD, UH, UH, ONCE WE'VE HAD A CHANCE TO MORE, MORE THOROUGHLY AND COMPLETELY HAVE A CHANCE TO REVIEW. BUT THESE WERE OUR IN INITIAL, UH, OBSERVATIONS AND HAPPY TO TAKE ANY QUESTIONS THAT YOU MAY HAVE, BILL. SO I THINK WE HEARD TODAY, I MEAN, WE GOT KIND OF BOOKENDS ON A NUMBER OF DIFFERENT THINGS IN TERMS OF POSITIONS AND THE NEED TO CONSIDER THE CURRENT OPERATING ENVIRONMENT WITH LIMITED DURATION RESOURCES AMONGST OTHER THINGS. SO I THINK ON THE ONE HAND WE'VE GOT THE IMM WHO SAYS, WE, YOU KNOW, WE RUN TWO CONSERVATIVE OPERATIONS ON, WE'VE GOT THE ERCOT FOLKS WHO SAID, THAT'S DONE FOR A REASON. IT'S DONE FOR RELIABILITY BASED ON THE PORTFOLIO OF RESOURCES, AND THERE'S SOME THINGS IN BETWEEN. SO WHAT'S THE FORUM TO WORK TOGETHER? AND IM HAD SOME SUGGESTIONS ON DIFFERENT WAYS TO LOOK AT A MODEL, NOT NECESSARILY INCORPORATE IT. SO DO YOU GET TOGETHER AND KIND OF ALIGN ON HERE'S THE TOPICS WE'RE GONNA ADDRESS, HERE'S SOME OF THE ANALYSIS THAT WE'RE GONNA PERFORM, AND THEN COME BACK AND, AND HOW DOES, SO HOW DOES THAT WORK? AND JUST KIND OF GIVE US AN OVERVIEW OF, OF HOW YOU SEE THAT KIND OF WORKING. SO IT DEPENDS ON THE TOPIC. OKAY. UH, SO FOR INSTANCE, WITH REGARDS TO, UH, UH, THERE WAS THE PROCESS THAT ICK HAD TALKED ABOUT WITH THE ANCILLARY SERVICE METHODOLOGY. SO THERE'S A PROCESS AND THERE'S ENGAGEMENT AS A PART OF THAT. UH, WITH REGARDS TO, FOR INSTANCE, UM, UH, BOTH, UH, ERCOT AND THE IMM HAVE BEEN TALKING ABOUT THE RELIABILITY STANDARD ASSESSMENT MM-HMM . AND HOW TO DO POTENTIAL, UH, SOME MARKET ANALYSIS AS PART OF THAT. AND SO THERE'S SOME COLLABORATION IN THAT PROCESS THAT WE'VE BEEN DOING MM-HMM . UM, BOTH WE'VE DONE, UH, THROUGHOUT MUCH OF THE YEAR, AND WE EXPECT TO ALSO DO AS, AS WE MOVE FORWARD ON THAT. SO SOMETIMES IT'S A LITTLE MORE FORMAL, SOMETIMES IT'S INFORMAL, LIKE THESE DISCUSSIONS. UM, AND I THINK THAT BOTH MYSELF AND JEFF HAVE HAVE A STRONG WORKING RELATIONSHIP. SO WE ARE ABLE TO GO THROUGH AND IDENTIFY HOW WE MAY TALK THROUGH, AND SOME OF THESE ITEMS END UP IN THE STAKEHOLDER PROCESS AS WELL. NO, I UNDERSTAND. I JUST THINK IT'D BE GOOD TO KINDA GET, IF YOU SAT DOWN TO KIND OF TAKE A LOOK AT ONE SIDE OF THE LEDGER VERSUS THE OTHER, THEN FIGURE OUT WHAT, WHAT THE PROCESS IS TO RESOLVE IT AND TRY TO DO IT AS EFFICIENTLY AS POSSIBLE SO WE CAN COME TO SOME MIDDLE GROUND THAT, YOU KNOW, THE BOARD CAN TAKE A LOOK AT. THANK YOU. THANK YOU. DAN. LET ME ASK YOU A QUESTION OF THE FIRST POINT HERE. IT SAYS A RESOURCE ADEQUACY CONSTRAINT THAT DELAYS LARGE LOAD INTEGRATION IS NOT PREFERRED. A RESOURCE ADEQUACY, ADEQUACY [02:20:01] CONSTRAINT IS AN OUT OF MARKET ACTIVITY, RIGHT? UH, ULTIMATELY IT WOULD BE AN EVALUATION OF WHERE YOU ARE, BUT THE CONSTRAINT WOULD BE TO, THAT'S OUTTA MARKET. PUT A LIMITATION ON ON THE, THE, THE LOADS. AGAIN, I, I WOULD, I WOULD DEFER THAT QUESTION TO JEFF ON HOW HE SEES THAT. YEAH. WE'LL, WELL, IN SEPTEMBER WE'LL ASK THAT QUESTION, BUT, YOU KNOW, IF WE WANNA HAVE A PER A PURE MARKET, THEN WE DON'T WANNA PUT THAT ANYTHING IN LIKE THIS, THAT WOULD BE AN OUTTA MARKET CONSTRAINT. I MEAN, IT'S, IT'S LIKE A CAP ON GAS PRICES, IT DOESN'T WORK. YOU HAVE LESS GAS. SO ANYWAY, UH, ANYTHING ELSE ON THIS SUBJECT? UH, NOT, NOT FOR ME. OKAY. LET'S [10. Commercial Markets Update] GO TO AGENDA ITEM 10. COMMERCIAL MARKETS UPDATE. THAT'S YOUR SHOW. OKAY. YES, KEEP GOING. ALL RIGHT. COMMERCIAL AND MARKET UPDATE. UH, I THINK WE CAN COVER THIS, UH, RELATIVELY QUICKLY. I ONLY HAVE A COUPLE SLIDES. UH, WE DID COVER THE GENERATION FIRMING PROGRAM, UH, ON UNDER REBECCA'S SLIDES. THE ONLY THING I WILL JUST SORT OF EMPHASIZE THERE IS IT'S CRITICAL THAT THAT BE AT THE SEPTEMBER BOARD MEETING IF WE ARE GOING TO, TO MEET OUR IMPLEMENTATION REQUIREMENTS OF, UH, UH, SET OUT BY, UH, THROUGH THE LEGISLATION. I DO WANT TO, UH, BRIEFLY TOUCH ON THE A DER, UH, PROGRAM. IT IS CURRENTLY A PILOT, AND WE ARE IN THE PROCESS OF, UH, WORKING TO SHIFT THAT INTO THE PROTOCOLS. UH, RIGHT NOW, UH, WE'VE PROVIDED A TIMELINE TO THE, UH, DEMAND SIDE WORKING GROUP. ULTIMATELY, WE'RE IN A, UH, Q2 AND Q3 OF THIS YEAR IS SORT OF A, UH, PROGRAM, UH, CONSIDERATION. WHAT CONSIDERATIONS, UH, DO WE WANT TO DO TO ENHANCE IT? WHAT TYPES OF LIMITATIONS DO WE HAVE, UH, FROM AN AUTOMATION AND A PROGRAM STANDPOINT, AND THEN WORK TO HAVE AN NPRR, UH, IN THE FOURTH QUARTER OF THIS YEAR. SO, UH, WE DO SEE THAT AS, AS PROGRESSING AND SOMETHING THAT, UH, UH, WE LOOK FORWARD TO, TO NOT ONLY, UH, TRANSITIONING BUT ALSO MOVING FORWARD. AND THEN THE THIRD ITEM WE HAVE HERE IS, IS ALSO CONSISTENT WITH, UH, AN IMM RECOMMENDATION. UH, AND SOMETHING THAT, THAT WE ALSO CONCUR WITH IS THAT, UH, IN THE DAY AHEAD MARKET, THERE ARE A LOT OF WHAT ARE KNOWN AS POINT TO BID, UH, POINT TO POINT BID OFFERS. AND WHAT THESE DO IS, UH, THERE ARE A, A VOLUMINOUS NUMBER OF THESE, AND THAT CAN SLOW DOWN THE OPTIMIZATION PROB PROBLEM THAT OUR DAY HEAD MARKET IS TRYING TO SOLVE. AND SO BY, IN, IN, UM, BY IMPOSING A BID FEE, THIS CAN, UH, DETER SOME, UH, SOME VERY SPECULATIVE OUT OF MARKET OFFERS THAT, UH, THAT ARE IN, IN THE SOLUTION AND, AND CAN BOG IT DOWN. AND SO THESE ARE THREE THINGS THAT WE'RE WORKING ON, UH, IN THE, IN THE COMING WEEKS AND MONTHS HERE. UM, THE, THE FINAL THING I WANT TO COVER IS, IS ON OUR CREDIT SIDE, UH, WE HAVE BEEN WORKING ON OUR CREDIT STRESS TEST FRAMEWORK. UH, THIS IS SOMETHING WE, WE HAD BEEN SPENDING LAST YEAR, UH, SOME TIME WORKING ON. AND THIS YEAR WE HAVE ENGAGED A CONSULTANT. UH, UM, THE CONSULTANT IS PROVIDING AN INDEPENDENT REVIEW OF THE WORK THAT WE HAVE DONE SO FAR. UH, AND WE'LL ASSESS THAT EFFECTIVENESS OF, OF OUR PROPOSED FRAMEWORK AND MAKE SOME RECOMMENDATIONS FOR IMPROVEMENT. UM, THAT WORK IS ONGOING AS WE SPEAK. WE EXPECT TO HAVE SOME RESULTS ON, UH, FROM THE, THE CONSULTANT SOMETIME THIS SUMMER. AND WE'LL, UH, UH, BRING, UH, UH, THE RECOMMENDATIONS THAT WE SEE FROM THE CONSULTANT, UH, MOST LIKELY TO THE SEPTEMBER BOARD, SEPTEMBER BOARD MEETING. ALRIGHT. AND I BELIEVE THAT IS THE END OF THIS PRESENTATION. ANY, ANY QUESTIONS ON THIS? ANY QUESTIONS? YEAH, I, I HAVE A COUPLE OF QUESTIONS. OKAY. UM, CAN YOU JUST GIVE US A QUICK UPDATE ON THE A DR, UM, PROGRAM? HOW IS IT GOING? HOW MANY PARTICIPANTS ARE IN IT NOW? I MEAN, WE HAVEN'T HEARD ANYTHING ABOUT, ACTUALLY, THAT'S THE NEXT JE ITEM. SO, UH, WE, WE ARE GONNA TALK ABOUT THE PILOT AND THE NEXT ONE AND SOME, SOME MODIFICATIONS, BUT JUST TO GIVE A QUICK, QUICK, UH, PREVIEW HERE IS, SO, UH, WE'VE HAD, UH, UH, INCREASING PARTICIPATION, ALTHOUGH I WILL SAY THAT IT IS DEFINITELY VERY CONCENTRATED IN, UM, PARTICULARLY BATTERY, UH, BATTERY STORAGE AT THE RESIDENTIAL LEVEL. UM, MOST OF THE PARTICIPATION TENDS TO BE FROM, UH, A, A SMALL NUMBER OF, OF PARTICIPANTS, BUT A, A GROWING NUMBER OF PARTICIPATION FROM, UM, A RESIDENTIAL BATTERY STORAGE. AND IS IT STILL DRIVEN MOSTLY BY ENCORE, OR WHO, WHO ARE THE OH, YOU MEAN IN TERMS OF THE TRANSMISSION AREA? UM, I BELIEVE ENCORE IS, IS STILL THE, THE VAST MAJORITY OF IT. ALRIGHT. AND, AND TELL ME A LITTLE BIT MORE SECOND QUESTION. TELL ME A LITTLE BIT MORE ABOUT THE POINT TO POINT, UH, BID FEES AND, AND DESCRIBE THE BEHAVIOR THAT YOU'RE TRYING TO DISTANCE SET THERE. SO WHAT WE HAVE IS A LOT OF, UM, SMALL, UM, ESSENTIALLY SMALL, UH, INCREMENTAL OFFERS THROUGHOUT THE SYSTEM. ESSENTIALLY, IT'S BASICALLY, THESE ARE POINT TO POINT, WHICH MEANS THEY'RE CONGESTION RELATED OFFERS, AND WE HAVE VERY SMALL QUANTITIES OF THESE, BUT [02:25:01] IN, UH, IN TERMS OF THE QUANTITY OF MEGAWATTS. BUT THE VOLUME OF, OF INSTANCES OF NUMBER OF THESE, UH, TRANSACTIONS ARE, ARE, ARE RATHER VOLUMINOUS. I I'D SAY IN THE, IN THE THOUSANDS AND THOUSANDS OF, OF OFFERS ON A DAILY BASIS. AND WHEN YOU'RE DOING THE OPTIMIZATION, THAT CAN CAUSE THE OPTIMIZATION A CHALLENGE IN TRYING TO SOLVE IN, IN A, A REASONABLE AMOUNT OF TIME. SO IT'S, IT'S REALLY A WAY OF TRYING TO MANAGE THAT, SOLVE TIME. IS THIS ANALOGOUS TO WHAT ENRON WAS DOING IN CALIFORNIA, EXCEPT IT'S SMALL, LIKE A LOT OF LITTLE BOTS THAT ARE, IT, IT, IT CAN BE A WAY OF TRYING TO IDENTIFY WHERE THERE'S OPPORTUNITIES, SMALL LEVELS OF OPPORTUNITIES, BUT A LOT OF THESE ARE OUT OF THE MONEY, UM, SO TO SPEAK, UH, LOOKING FOR, UH, LARGE OPPORTUNITY, UH, OF, OF, OF SOMETHING OCCURRING IN THE SYSTEM. AND SO THAT'S REALLY WHERE THIS IDEA OF, WHEN YOU LOOK AT EXPECTED PRICES OR EXPECTED CONGESTION, A LOT OF THIS TENDS TO BE ON THE BOUNCES. SO IT'D BE HIGH PRICES AT, UH, ODD TIMES AND YEAH, EXACTLY. LOOKING FOR THAT TYPE OF OPPORTUNITY. RIGHT. YEAH. INTERESTING. YOU WANT TO GO TO AGENDA ITEM 11? UH, EXCUSE ME. [10.1 Aggregate Distributed Energy Resource (ADER) Pilot Project – Phase 3.3] UH, 10.1 A DER PROGRAM? YES. WE'LL DO THAT. SORRY, I SHOULD HAVE REALIZED IT WAS GONE. OKAY. YEAH, YOU WERE JUST QUEUING IT UP FOR US. YEP. HERE WE GO. UM, 10.1. UH, SO THE, THE PREVIOUS SLIDE WE WERE TALKING ABOUT TRANSITIONING TO PROTOCOLS FROM THE PILOT. WHAT WE'RE TALKING ABOUT HERE IN, IN THIS, UH, THIS ITEM 10.1 IS UPDATING THE PILOT ITSELF BEFORE THE PROTOCOLS GET UPDATED. AND REALLY THERE ARE THREE ITEMS THAT ARE BEING UPDATED HERE, UH, AS, AS PART OF THIS, THIS, UH, THIS DOCUMENT IS, UH, ONE OF THEM HAS TO DO WITH A TYPO, UH, AND, AND ADDRESSING A TYPO. UH, ONE OF THEM HAS TO DO WITH, UM, DESCRIBING WHICH INFORMATION WOULD SOME INFORMATION THAT WOULD BE BE POSTED TO THE WEBSITE. AND, UH, THE FINAL ITEM IS A, IS A CHANGE TO AN ITEM. UH, IT'S RELATED TO A, A CAP THAT WAS IMPOSED INITIALLY THAT AS WE'VE, UH, AS WE'VE GONE THROUGH THE PILOT PROGRAM, WE'VE REALIZED THAT IT OPERATIONALLY HAS NO IMPLICATION, BUT IT DOES CREATE A LOT OF COMPLICATION IN, IN THE, UH, THE PROCESS WHERE, WHERE THESE LOADS ARE BEING REGISTERED. SO IT, IT REALLY HAS NO BENEFIT ON THE BACK END, BUT IT CREATES A LOT OF PROBLEMS ON THE FRONT END. SO WE SEE THESE, THESE CHANGES REALLY BEING CLEANUP ITEMS AND REALLY A WAY OF ALLOWING THE PROGRAM TO, TO GET US TO THE POINT WHERE WE CAN GET PROTOCOLS IN PLACE TO, TO SUPERSEDE IT. AND THE CAP WAS A PARTICIPATION CAP NUMBER OF REGISTRANTS? IS THAT WHAT YOU'RE TALKING? NO, IT'S, IT'S, IT'S SOMETHING CALLED THE JUST GET IT RIGHT, IT'S THE COMMON INFORMATION MODEL PARTICIPATION. SO, I'M SORRY, PARTICIPATION CAP. AND, AND SO IT, IT GETS REALLY TECHNICAL, BUT IT'S, IT'S USED AS A WAY TO EVALUATE WHETHER OFFERS ARE SORT OF INBOUNDS OR OUT OF BOUNDS AND IT'S NOT EXACTLY ACCURATE. SO, UM, UH, WE THINK IT'S SOMETHING THAT CAN BE MODIFIED. OKAY. THIS IS, UH, VOTING ITEMS. SO GO AHEAD WITH YOUR, YOUR PROPOSAL. ALRIGHT. IF YOU WILL. OKAY. ALRIGHT. SO, ALL RIGHT, HERE IS THE OFFICIAL PROPOSAL. UH, BRENDA, DO YOU WANNA, IS THERE ANYTHING YOU'RE, YOU WANNA SAY? I THINK ULTIMATELY IT'S AS IS KEITH RECOMMENDED, THESE ARE CHANGES TO THE GOVERNING DOCUMENT THAT THE BOARD HAS TO APPROVE. UM, WE WOULD CLARIFY 'EM AS MINOR CHANGES. THIS WOULD BE THE LAST ITERATION OF THIS GOVERNING DOCUMENT BEFORE WE MOVE FORWARD WITH PROTOCOL REVISIONS INTO THE STAKEHOLDER PROCESS. DO I HEAR A MOTION TO APPROVE THE REVISIONS? YEP. OKAY. THANK YOU KATHLEEN. HAVE A SECOND. OKAY. THANKS BEN. ALL IN FAVOR? AYE. AYE. ANY OPPOSED? ANY ABSTENTIONS? OKAY. THE REVISIONS TO THE A DR PHASE 3.3 HAVE BEEN ADOPTED. UH, KEITH, LET'S SEE, I THINK YOU'RE STILL UP FOR GEN ITEM 10.2 OF REALTIME MARKET. NO, THIS IS GORDON DRESS. THIS IS GORDON. YEP. UH, GEN [10.2 Real-Time Market Price Correction – SCED Incorrectly Determined Qualifying Facility Output Schedules] ITEM 10.2, REALTIME MARKET PRICE CORRECTIONS, SKID, INCORRECTLY DETERMINED QUALIFYING FACILITY OUTPUT SCHEDULES. COURT. THANK YOU, CHAIR FLORES GORDON DRAKE, DIRECTOR OF MARKET DESIGN AND ANALYSIS WITH ERCOT. UH, AND WANTED TO LAY OUT AN EVENT THAT, UH, THAT WE OBSERVED, UH, IMPACTING REAL-TIME PRICES BETWEEN DECEMBER 17TH AND, UH, JANUARY 29TH, DECEMBER 17TH, 2025. AND, UH, JANUARY 29TH, 2026. UM, WE ENCOUNTERED A SOFTWARE DEFECT, UH, THAT WAS INTRODUCED BY [02:30:01] A, A THIRD PARTY VENDOR INTO OUR CODE. AND, UH, IT, IT IMPACTED PRICES OVER THAT, THAT PERIOD PREDOMINANTLY BY THE WAY IN WHICH IT SET OUTPUT SCHEDULES FOR WHAT ARE CALLED QUALIFYING FACILITIES. AND THIS IS A SMALL SUBSET OF FACILITIES THAT OPERATE WITHIN THE ERCOT MARKET. THEY ARE, UH, DEFINED THROUGH THE PUBLIC UTILITY REGULATORY POLICIES ACT GENERALLY COVERS SMALL RENEWABLE FACILITIES AND, UH, CO-GENERATION FACILITIES. UM, AND, UH, AS A RESULT, THEY DO NOT, UH, THEY DO, THEY'RE NOT ECONOMICALLY DISPATCHED THROUGH THE ERCOT MARKET, BUT THE REST OF THE ER, ERCOT MARKET IS DISPATCHED AROUND THEIR FORECAST OF WHAT THEY EXPECT TO OUTPUT TO, TO THE GRID. AND THEN EVERYTHING ELSE IS, IS, UH, ECONOMICALLY DISPATCHED AROUND THAT. AND SO WHAT, UH, WHAT WHAT TOOK PLACE WAS, UH, THE, THOSE OUTPUT SCHEDULES, THE EXPECTATION OF WHAT THOSE QUALIFYING FACILITIES WERE, WERE GOING TO BE INJECTING INTO THE GRID WAS INCORRECT. UH, AND, AND IMPACTED PRICES OVER A SERIES OF, UH, A TOTAL OF FIVE OPERATING DAYS BETWEEN DECEMBER 17TH AND JANUARY 29TH. UM, AND WHAT IS SUPPOSED TO HAPPEN IN THE, IN THESE SITUATIONS, IN, IN THE UNIQUE CIRCUMSTANCE HERE IS WHEN A QUALIFYING FACILITY HAS NOT SUBMITTED THEIR OUTPUT SCHEDULE, ERCOT WILL CREATE THE EXPECTED OUTPUT TARGET FOR THOSE FACILITIES. UM, AND THE IT, THE WAY THE CODE IS SUPPOSED TO WORK IS IT TAKES THE REAL TIME TELEMETRY FROM THOSE FACILITIES AND ASSUMES THAT AS THE OUTPUT TARGET. UM, BUT IN THIS CASE, WHAT IT WAS RELYING UPON INSTEAD WAS THE SUBMITTED OUTPUT SCHEDULES FROM THOSE FACILITIES. SO THERE'S A DISCREPANCY BETWEEN WHAT THEY WERE ACTUALLY INJECTING AND WHAT THE OUTPUT SCHEDULE SAID THEY WERE EXPECTING TO INJECT. UM, HOW DID WE DISCOVER THIS? UH, WE DISCOVERED THIS, UH, THROUGH TESTING AND ANALYSIS OF, OF ANOTHER MARKET RELATED EVENT, UH, THAT WE WERE TRYING TO GET TO, TO THE BOTTOM OF, AND WE NOTICED THIS DISCREPANCY IN, IN THE, THE SOURCE OF THE, UH, THE OUTPUT SCHEDULES FOR THESE FACILITIES. AND, UH, SO WE DISCOVERED THAT ON JANUARY 29TH, WE, UH, IDENTIFIED THE, THE FIX AND IMPLEMENTED THAT FIX ON JANUARY 29TH. AND ON FEBRUARY 5TH, AFTER CONCLUDING OUR INVESTIGATION, UM, ISSUED A MARKET NOTICE TO THE MARKET KNOW THAT WE WERE, UH, LOOKING AT THE IMPACT TO THAT PERIOD, THAT MARKET NOTICE ESTABLISHES A 30 DAY WINDOW, UM, THAT, UH, THROUGH WHICH WE CAN GO BACK AND CORRECT PRICES. AND SO THAT COVERED THE PERIOD JANUARY 6TH TO JANUARY 29TH, 2026, UM, FOR JANUARY 6TH AND SEVENTH. THERE WAS ACTUALLY A, THERE WAS A, A CHANGE ON JANUARY 8TH TO OUR OPTIMIZATION ENGINE, WHICH MEANS WE CAN'T THEN ACCURATELY RECREATE WHAT THOSE PRICES SHOULD HAVE BEEN FOR JANUARY 6TH AND JANUARY 7TH. SO OUR ANALYSIS FOCUSED IN INSTEAD ON JANUARY 8TH TO, TO JANUARY 29TH AND EXCLUDED JANUARY 6TH AND SEVENTH FROM OUR IMPACT ANALYSIS. OUR IMPACT ANALYSIS SHOWED, UH, THAT WHEN MEASURED AGAINST OUR SIGNIFICANCE CRITERIA FOR BRINGING A PRICE CORRECTION TO THE BOARD, UH, THAT FOUR DAYS MET OUR SIGNIFICANT SIGNIFICANCE CRITERIA. NUMBER ONE, THAT, UH, ANY IMPACT COUNTERPARTY, UH, SAW AN AN IMPACT OF 2% AND ALSO GREATER THAN $20,000 FOR THEIR SETTLEMENT. UM, AND TWO DAYS, UH, MET CRITERIA NUMBER TWO OF AN IMPACT OF 20% OR, UH, AND ALSO GREATER THAN 2000 TO, TO THEIR SETTLEMENT. ALTHOUGH THERE'S ONE, ONE DAY IN WHICH THOSE BOTH OF THOSE CONDITIONS WERE MET. SO FOUR DAYS MET CRITERIA, ONE AND TWO DAYS MET CRITERIA, TWO RELATIVELY SMALL DOLLAR AMOUNTS IN, IN THE ORDER OF TENS OF THOUSANDS, UH, ON EACH OF THOSE OPERATING DAYS. UM, UH, BUT THAT SHOWED THE SLIDE SHOWS WHAT THAT MAXIMUM ABSOLUTE VALUE IMPACT TO A SINGLE COUNTERPART PARTY WAS. WHEN WE LOOK AT THE OVERALL IMPACT TO ERCOT SETTLEMENTS, UH, THE, THE, THE NET CHANGE IS A, AN INCREASE IN PAYMENTS TO MARKET PARTICIPANTS OF JUST SHY OF $600,000 OVER THOSE, UH, FIVE OPERATING DAYS. BUT AGAIN, A VERY SMALL PERCENTAGE OF THE OVERALL AMOUNTS THAT WERE SETTLED IN THE ERCOT MARKET FOR THOSE FIVE OPERATING DAYS. AND SO, UH, WE HAVE DETERMINED THAT THE SOFTWARE DEFECT DID IMPACT PRICES OVER THE PERIOD OF DECEMBER 17TH TO JANUARY 29TH. FIVE OF THOSE OPERATING DAYS MET THE SIGNIFICANCE CRITERIA TO REQUEST BOARD REVIEW AND, UM, UH, AND, UH, THAT PRICE CORRECTION. AND, UH, SO WE ARE REQUESTING BOARD APPROVAL TO CORRECT REAL-TIME MARKET PRICES FOR OPERATING DAYS JANUARY 10TH, 22ND, 24TH, 25TH AND 26TH. 2026. THANK YOU. GORDON, ANY QUESTIONS FOR GORDON? IF NOT, I'LL ENTERTAIN A MOTION TO, I'M SORRY. OH, MORGAN, I'M SORRY. JUST ONE QUICK QUESTION. UM, WHAT STEPS ARE BE TAKEN PROACTIVELY TO PREVENT ANY FUTURE ISSUES? UH, AS WITH, UH, ANY TIME THAT WE ENCOUNTER THESE, UM, THESE OF SOFTWARE DEFECT DEFECTS, WE LOOK THROUGH OUR, OUR VALIDATION AND VERIFICATION, UH, CHECKLISTS WITH NEW CODE THAT'S, THAT'S BEING INTRODUCED. AND SO WE'LL HAVE ADDED [02:35:01] A, UH, A, A CHECK TO ENSURE THAT ALL APPROPRIATE FIXES HAVE BEEN APPLIED, UH, AND CONTINUE TO GO THROUGH OUR, OUR, OUR NORMAL RIGOROUS TESTING PROCESSES. BUT ANYTIME WE'D IDENTIFY SOMETHING NEW, IT ADDS SOMETHING TO THE CHECKLIST FOR US TO, TO REVIEW AND ENSURE IT'S BEEN ADOPTED PROPERLY. AND THIS, THIS IS NOT A, A REPEAT ERROR. WE HAVE NOT SEEN THIS BEFORE. THIS IS, THIS IS UNIQUE AND WE DON'T EXPECT TO SEE IT AGAIN. PATRICK, DID YOU HAVE A QUESTION? DID OH, OKAY. UH, ANY OTHER QUESTIONS FOR GORDON? IF NOT, I'LL ENTERTAIN A MOTION TO, UM, APPROVE THE REAL TIME MARKET PRICE CORRECTION AS HE PRESENTED IT. OH, CHRIS. OKAY. AND THE SECOND BILL. ALL IN FAVOR? AYE. AYE. ANY OPPOSED? ANY ABSTENTIONS? OKAY. THE REAL TIME MARKET CORRECTION HAS BEEN APPROVED. UH, THANKS GORDON. BUT THAT GENERAL SESSION IS NOW RECESSED AND THE WEBCAST WILL BE SUSPENDED. WE WILL RECONVENE GENERAL SESSION TOMORROW AT 10:00 AM CHAIRMAN GLEASON, THIS MEETING, THE PUBLIC UTILITY COMMISSION OF TEXAS IS HEREBY ADJOURNED. * This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.