* 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. [1. Call General Session to Order ] [00:00:02] MEMBERS OF THE FINANCE AND AUDIT COMMITTEE AND GUESTS. UH, WELCOME TO THE SEPTEMBER 4TH, 2026 FINANCE AND AUDIT COMMITTEE MEETING. I HEREBY CALL THIS MEETING TO ORDER. THIS MEETING IS BEING WEBCAST LIVE TO THE PUBLIC ON ERCOT WEBSITE, AND I HAVE CONFIRMED A QUORUM OF COMMITTEE MEMBERS PRESENT IN PERSON. UH, BEFORE WE BEGIN, I WOULD LIKE TO ASK PC CHAIR THOMAS GLEASON IF HE WOULD LIKE TO CALL AN OPEN MEETING OF THE PUBLIC UTILITY COMMISSION OF TEXAS TO ORDER. YES, SIR. THANK YOU, MR. CHAIR. THIS MEETING THE PUBLIC UTILITY COMMISSION OF TEXAS WILL COME TO ORDER TO CONSIDER MATTERS OF DULY POSTED WITH THE SECRETARY OF STATE FOR SEPTEMBER 14TH, 2026. THANK YOU, CHAIR GLEASON. BEFORE MOVING ON TO TODAY'S BUSINESS, I'LL HIGHLIGHT TO COMMITTEE MEMBERS THAT THE ANTITRUST ADMONITION AND SECURITY MAP ARE INCLUDED WITH THE POSTED MATERIALS. ALRIGHT, MOVING ON TO THE FIRST ORDER OF BUSINESS ON TODAY'S AGENDA. ITEM TWO, NOTICE OF PUBLIC COMMENT, IF ANY. TODAY'S MEETING AGENDA WAS POSTED PUBLICLY ON SEPTEMBER 4TH, 2026, AND PROVIDED INSTRUCTIONS FOR THE PUBLIC FOR COMMENTING IN PERSON. TO DATE, NO ONE HAS EXPRESSED INTEREST IN COMMENTING. IS THAT STILL CORRECT, CHAD? THAT IS CORRECT. CHAIR. [3. June 1, 2026, General Session Meeting Minutes ] ALRIGHT. NEXT IS AGENDA ITEM THREE. JUNE 1ST, 2026. GENERAL SESSION MEETING MINUTES. THERE IS A DRAFT OF IN THE MEETING MATERIALS. DOES ANYONE HAVE ANY COMMENTS OR WISH TO MAKE A MOTION? BEN, MAY I HAVE A SECOND BILL? ALL IN FAVOR? ANY OPPOSED? ABSTENTIONS? GREAT. [4.1 Review of Requirements for Annual Audit of 401(k) Savings Plan ] ALRIGHT, MOVING ON TO AGENDA ITEM FOUR, OUR ANNUAL AUDIT OF 401K SAVINGS PLAN. WE HAVE THREE SUB ITEMS. FIRST AGENDA ITEM 4.1, REVIEW OF THE REQUIREMENTS FOR THE ANNUAL AUDIT OF THE 401K SAVINGS PLAN AND RICHARD WILL PRESENT. RICHARD THANK YOU CHAIR. SO THE REQUIREMENTS FOR THE REVIEW OF THE ANNUAL 401K SAVINGS PLAN. SO OUR REQUIREMENTS WERE EN RISA PLAN. UM, WE FILE ANNUALLY THE FORM 5,500 WITH THE US DEPARTMENT OF LABOR FILING HAS TO INCLUDE OUR AUDITED FINANCIAL STATEMENTS. THE CHARTER, UH, FOR THE FINANCE AND AUDIT COMMITTEE REQUIRES ANNUALLY THE COMMITTEE SHALL RECOMMEND TO THE BOARD ACCEPTANCE OF THE 401K UH, SAVINGS PLAN AUDIT REPORT. OUR PROCESS, UH, IN 2025, WE SELECTED BAKER TILLY AS THE AUDITOR FOR THE 2021 THROUGH 2026 401K SAVINGS PLAN, ANNUAL APPROVAL, SORRY, THAT WAS IN 2020. THEN WE HAVE THE 2025 PLAN YEAR THAT WAS APPROVED, UH, TO HAVE BAKER TILLY AUDIT THE 2025 PLAN YEAR. BAKER TILLY HAS COMPLETED THE, UH, ANNUAL AUDIT WITH NO MATERIAL FINDINGS. ANY QUESTIONS? NEXT AGENDA ITEM. [4.2 Results of Examination and Independence Report from the 401(k) Savings Plan Auditor ] NEXT AGENDA. ITEM 4.2, RESULTS OF THE EXAMINATION AND INDEPENDENCE REPORT FROM THE 401K SAVINGS PLAN, AUDITOR BAKER TILLY WILL PRESENT THE REPORT, WHICH I UNDERSTAND IS, UH, ANTICIPATED TO BE AN UNMODIFIED REPORT. BASICALLY A CLEAN OPINION ON THE 401K SAVINGS PLAN. A VOTE ON ACCEPTANCE OF THE REPORT WILL BE TAKEN UP WHEN WE RETURN TO THE GENERAL SESSION, UH, AFTER ANY EXECUTIVE SESSION DISCUSSION. I DO, LORI, UM, SORRY. THAT'S WHY. OH, NEXT. THANK YOU. SORRY. HELLO, I'M LORI HORVATH FROM BAKER TILLY AND I SERVED AS THE SIGNING PARTNER ON THE BENEFIT PLAN AS OF 12 31 25. OUR TEAM INCLUDES ME AS THE SIGNING PRINCIPAL. BILL MEYER IS THE MANAGING DIRECTOR AND MONICA WESLEY AS THE AUDIT MANAGER. BOTH BILL, MONICA, AND ME HAVE OVER 20 YEARS AUDIT EXPERIENCE OF THE EBP PLANS. THE EXECUTIVE SUMMARY WAS VERY SIMILAR TO WHAT RICHARD SHARED. WE WERE REQUIRED TO AUDIT THE DECEMBER 25 FINANCIAL STATEMENTS, AND THE SUMMARY IS THAT THE AUDIT SHOULD PROVIDE ACCURATE CONFIDENCE IN THE FINANCIAL STATEMENTS. IT WAS PERFORMED USING REASONABLE INTEREST OF THE STATEMENTS WITH DATA FROM YOUR SYSTEMS AND WORK WITH YOUR THIRD PARTY ADMINISTRATOR. WE STRIVE TO CONCLUDE OUR AUDIT WITH CONCISE COMMUNICATION THROUGHOUT THE PROCESS AND THESE FINAL RESULTS. AZURE INDEPENDENT AUDITOR, WE ARE CHARGED WITH PLANNING AND PERFORMING THE AUDIT TO MAKE SURE THAT WE HAVE REASONABLE ASSURANCE WHETHER THE FINANCIAL STATEMENTS ARE FREE FROM MATERIAL MISSTATEMENT. REASONABLE IN ACCOUNTING SPEAK IS A HIGH LEVEL OF ASSURANCE. WE [00:05:01] LOOK AT THE RISK OF MATERIAL MISSTATEMENT OF THOSE STATEMENTS, WHETHER DUE TO MANAGEMENT ERROR OR FRAUD. WE HAD NO CONCERNS WITH THAT THIS YEAR. WE PERFORMED THE APPROPRIATE PROCEDURES. GIVEN THOSE RISK ASSESSMENTS, WE MAKE SURE THE POLICIES ARE CORRECT AND FAIR WITH REASONABLE GUIDANCE. WE PERFORM AN AUDIT IN CONJUNCTION WITH THE ERISA REQUIREMENTS AS WELL AS THE DOL, THE DEPARTMENT OF LABOR FOR REPORTING AND DISCLOSING ON AN EMPLOYEE BENEFIT PLAN ARE, AND OUR AUDIT DOES NOT RELIEVE MANAGEMENT OF THE RESPONSIBILITY FOR THESE FINANCIAL STATEMENTS. WE LOOK AT THE LIST IN FRONT OF YOU OF AUDIT MATTERS. WHEN WE PRESENT. THOSE INCLUDE INTERNAL CONTROL AROUND THE STATEMENTS, THE QUANTITATIVE ASPECTS, WHAT PUTS TOGETHER INTO OUR FINANCIAL STATEMENTS. WE READ MINUTES AND WE READ, UM, CLIENT INFORMATION TO MAKE SURE WE DON'T FIND ANY SIGNIFICANT OR UNUSUAL TRANSACTIONS. WE DID NOT HAVE ANY DIFFICULTIES COMMUNICATING WITH CLIENTS WITH THE CLIENT OR ANY OF THE THIRD PARTY ADMINISTRATORS. NO DISAGREEMENTS WITH MANAGEMENT. WE DIDN'T HAVE TO CONSULT OUTSIDE OF THE AUDIT SCOPE WITH ANY OTHER MEMBERS OF OUR FIRM. WE CONSIDERED IMMATERIAL ERRORS AND DIDN'T HAVE ANY, AND WE DIDN'T HAVE ANY AUDIT FINDINGS OR ISSUES TO REPORT TO YOU A VERY CLEAN BENEFIT PLAN AUDIT. THERE WERE NO SIGNIFICANT CHANGES TO OUR APPROACH. WE STARTED THE AUDIT WITH A PLAN AND WE WERE ABLE TO FOLLOW THAT PLAN. WE APPRECIATE MANAGEMENT HAVING EVERYTHING AVAILABLE FOR US AND ABLE TO WORK THROUGH THE AUDIT IN THE TIME THAT WAS ALLOCATED. PLANNED SCOPE AND TIMING IS VERY SIMILAR TO THE ITEMS I JUST SHARED. OBVIOUSLY, THE FOCUS OF AN EMPLOYEE BENEFIT PLAN IS WITH EMPLOYEE DATA, THINGS LIKE PAYROLL AND OTHER EXPENSES, MAKING SURE THE CORRECT AMOUNTS ARE ALLOCATED AND MATCHED AND MAKING SURE COMPLIANCE STEPS SUCH AS THE TIMELY REMISSION OF OF CLIENT OR, I'M SORRY, PARTICIPANT CONTRIBUTIONS AS WELL AS THE EMPLOYER CONTRIBUTION IS DONE AND OTHER AUDIT RELATED ISSUES BENEFITING THE PARTICIPANT OF THE PLAN. WE HAD NO CONCERNS FOLLOWING ANY OF THE REGULATIONS, WHETHER FROM ERISA FROM THE DOL OR GAP REQUIRED FOR AN EMPLOYEE BENEFIT PLAN AUDIT. WHEN WE THINK ABOUT WHAT CAN GO WRONG, JUST LIKE IN THE FINANCIAL STATEMENT AUDIT, WE WORRY ABOUT THE OVERRIDE OF CONTROLS. YOU HAVE STRONG CONTROLS IN HOW THE MONEY IS WITHHELD FROM THE PARTICIPANTS AND HOW IT'S SUBMITTED IN, BUT WE ALWAYS HAVE CONCERN IF ANYTHING COULD BE DONE TO OVERRIDE THAT IN OTHER PLANS, NOT NEW PLAN. THOSE INSTANCES INCLUDE THINGS LIKE DELAYING THE SUBMISSION OF THE PAYROLL OR NOT, MAKING SURE YOU IF AN EMPLOYEE MAKES A CHANGE, MAKING SURE IT'S ALLOCATED APPROPRIATELY AND TIMELY. EVERYONE THAT WE TESTED SUBSTANTIVELY AS PART OF OUR PARTICIPANT TEST WAS DONE EXACTLY AS REQUIRED. INTERNAL CONTROL MATTERS IN YOUR AUDIT OF A BENEFIT PLAN. WE DON'T OPINE ON INTERNAL CONTROLS, BUT WE DOCUMENT THE PROCESSES OF HOW THE DOLLARS FLOW THROUGH INTO THE PLAN. WE HAD NO CONCERNS WITH ANY OF THE INTERNAL CONTROL MATTERS WE DOCUMENTED OR ANY OF THE TRANSACTIONS WE WALKED THROUGH AS WE BECAME COMFORTABLE WITH THE INTERNAL CONTROL SYSTEM. AUDITS OF BENEFIT PLANS, JUST LIKE FINANCIAL STATEMENTS CAN HAVE MATERIAL WEAKNESSES OR SIGNIFICANT DEFICIENCIES NOTED IN THE INTERNAL CONTROL FOR YOUR PLAN. WE HAD NO MATERIAL WEAKNESSES OR SIGNIFICANT DEFICIENCIES REQUIRED. COMMUNICATION. WE AGREE WITH THE ACCOUNTING POLICIES AND BELIEVE THOSE TO BE CORRECT POLICIES. WE HAVE ESTIMATES WHEN IT COMES TO FAIR VALUE OF THE INVESTMENTS, NO CHANGES TO THAT. THE MOST CONCERNING ESTIMATE IS OF COURSE THE FAIR VALUE OF THE FINANCIAL STATEMENTS. THE VALUE OF THE ASSETS IS AS OF 12 31 25. THAT'S THE PRICE AS OF THAT DAY. AND WHEN THE MARKET OPENS A FEW DAYS LATER, IT CAN BE A DIFFERENT VALUE. AGAIN, NO SIGNIFICANT OR UNUSUAL TRANSACTIONS. NO DIFFICULTIES AT ALL. WE REALLY APPRECIATE YOUR TEAM AND THE PRIORITY THEY PLACE ON A CLEAN FINANCIAL STATEMENT AUDIT OF THE BENEFIT PLANS [00:10:02] AND WE DIDN'T HAVE ANY DISAGREEMENTS WITH MANAGEMENT EITHER ON TIMING OR ON POLICY TESTING. EVERYTHING WAS MADE AVAILABLE TO OUR TEAM AS REQUIRED. SO REALLY EASY, CONVENIENT PROCESS. THERE HAVE BEEN NO DEPARTURES FROM THE AUDIT REPORT, SO THE REPORT SHARED TODAY IS THE, UM, CLEAN OPINION. WE DIDN'T NEED TO CONSULT WITH ANYONE OUTSIDE OF THE ENGAGEMENT TEAM AND WE DON'T HAVE ANY OTHER FINDINGS OR ISSUES TO SHARE WITH YOU TODAY. WE'RE REQUIRED TO SHARE IF WE HAVE ANY ERRORS, WHETHER THEY REMAIN UNRECORDED DUE TO MATERIALITY OR ADJUSTED. WE HAD NO ADJUSTMENTS OR PROPOSED ADJUSTMENTS AT ALL. THERE'S JUST A FEW OTHER STATEMENTS HERE. OOPS, I WENT THE WRONG WAY. UH, WE NEED TO CONSIDER WHETHER OR NOT THE PLAN HAS THE ABILITY TO CONTINUE AS A GOING CONCERN. MANAGEMENT MAKES THAT ASSERTION FIRST. WE AUDIT THAT ASSERTION. WE HAVE NO CONCERNS ABOUT THE ORGANIZATION'S PLAN, HAVING THE ABILITY TO CONTINUE AS A GOING CONCERN. WE ARE INDEPENDENT AND WE LOOKED AT THE 5,500, THE FORUM THAT GOES TO THE DOL AND THERE WERE NO INCONSISTENCIES BETWEEN THE AUDITED FINANCIAL STATEMENTS OF THE PLAN AND THE 5,500. WE DID NOT HAVE ANY RELATED PARTY DISCLOSURES THAT WERE REQUIRED FOR THIS YEAR'S FINANCIAL STATEMENT. WITH RESPECT TO OTHER MATTERS, WE HAVE NO CONCERNS THAT WE HAVE TO SHARE. WE COMPARED OUR TESTING TO THE RESULTS. WE COMPARED ITEM WITHHELD FROM YOUR PAYROLL TO THE BENEFIT PLANS REPORTS AND HAD NO THINGS TO BRING TO YOUR ATTENTION TODAY. WE DO PUT TOGETHER THE FINANCIAL STATEMENTS BASED ON INFORMATION, UM, FROM THE TRUST REPORTS. WE HAD NO ISSUES PUTTING THAT INFORMATION TOGETHER. WE PREPARE THE FINANCIAL STATEMENTS AND THE REQUIRED DOL SUPPLEMENTAL SCHEDULES. NO ISSUES WITH THAT. AND AGAIN, WE HAVE THE ABILITY AS A NON ATTEST SERVICE TO PROPOSE ADJUSTING JOURNAL ENTRIES. WE DIDN'T HAVE ANY ADJUSTING JOURNAL ENTRIES AT ALL. WE'VE LEFT IN THE, UM, FINANCIAL STATEMENT PRESENTATION TODAY. JUST SOME RESOURCES ABOUT DOL REQUIREMENTS OR RISK REQUIREMENTS AND OTHER INFORMATION ABOUT BENEFIT PLANS AS THEY CONTINUE TO MOVE FORWARD. WE APPRECIATE THE OPPORTUNITY AND REALLY APPRECIATE HAVING SUCH A CLEAN CORRECT AUDIT TO REPORT TODAY. THANK YOU. YEAH, THANK YOU LORI. UH, [4.3 Recommendation regarding Acceptance of 2025 ERCOT 401(k) Savings Plan Audit Report ] NOW WE'LL INVITE RICHARD BACK, UH, FOR AGENDA ITEM 4.3, THE RECOMMENDATION REGARDING ACCEPTANCE OF THE 2025 ERCOT 401K SAVINGS PLAN, AUDIT REPORT. THANK YOU CHAIR. WE HAVE, UH, WE'VE INCLUDED THE MATERIALS AND THE DECISION TEMPLATE, UH, WHICH I BELIEVE WILL TAKE UP AFTER THE EXECUTIVE SESSION. UM, IF THERE'S ANY QUESTIONS ON THE MATERIALS, PLEASE LET ME KNOW, BUT WE'LL RECOMMEND, UH, WE'LL RECOMMEND APPROVAL OF THIS DECISION TEMPLATE. SO WHEN, WHEN WILL WE FILE THE FORM? 5,500 THEN? UH, I BELIEVE WE'LL BE FILING THAT SOON AFTER, AFTER THIS, UM, RIGHT AFTER, YES, AFTER THIS APPROVAL. BE READY TO FILE. YEP. WE'RE READY TO FILE. AND THAT'S WELL IN ADVANCE OF THE DEADLINE? YES. THAT'S WELL IN ADVANCE OF THE DEADLINE. YEAH, THERE'S NOTHING ELSE. OTHER QUESTIONS? NO OTHER QUESTIONS OR COMMENTS FOR RICHARD? ALRIGHT, DID I HEAR SOMETHING? NO. OKAY. GREAT. ALRIGHT. [5. Notice of Annual Committee Self-Evaluation Questionnaire ] ALL RIGHT. UH, PURPOSE OF AGENDA ITEM FIVE, THE NOTICE OF ANNUAL COMMITTEE SELF-EVALUATION QUESTIONNAIRE. UM, A COUPLE OF THINGS. WE'VE LOOKED AT THIS IN THE HR AND G COMMITTEE, DISCUSS THAT SURVEY, UH, IN THE JUNE MEETING NOW. UH, YOU'LL GET IT ELECTRONICALLY, UM, AND I THINK WE'RE ASKING EVERYBODY TO HAVE IT BACK IN OCTOBER BY OCTOBER 30TH, AND THEN WE'LL DISCUSS IT IN THE DECEMBER MEETING. JULIE, I NOTED THAT YOU MADE A COMMENT IN AN EARLIER COMMITTEE MEETING ABOUT, UM, CHECKING WITH AN AI AGENT TO SEE WHETHER OR NOT WE COULD ADVANCE, UH, OR CHANGE ANY OF THE QUESTIONS ON THE SURVEY. UM, I THINK THAT'S A FUN AND ACCEPTABLE THING TO DO, BUT, UM, I WOULD ASK CHAD THAT WE THINK ABOUT RICHARD OR WHO WHO CAN DO THAT, UM, UH, AND KEEP THE MATERIALS PRIVATE. YEAH, WE'RE HAPPY TO LOOK INTO THAT. [00:15:01] ALRIGHT. YEP. GREAT. COMMENTS, QUESTIONS, THOUGHTS? GREAT. OKAY. [6. Periodic Meeting with Independent Financial Auditor] AGENDA ITEM SIX, PERIODIC MEETING WITH THE INDEPENDENT FINANCIAL AUDITOR. BAKER TILLY IS PRESENT AND AVAILABLE TODAY TO ANSWER ANY OF THE COMMITTEE, UH, MEMBERS' QUESTIONS. THANK YOU. I'LL INTRODUCE, UH, JODI DOBSON. UH, OUR PARTNER AT BAKER TILLY. SORRY, PRINCIPAL . THANK YOU. IS THERE A SLIDE DECK, CHRIS? THERE'S NOW PRESENTATION. THIS IS JUST AN OPPORTUNITY IF ANYBODY HAD QUESTIONS. I JUST, ONE, ONE QUESTION FOR THE COMMITTEE. UM, UH, CAN WE GO OVER AGAIN THE PRIMARY REASON FOR MOVING THE, UH, REVIEW OF THE REPORT FROM THE LAST MEETING TO THIS MEETING. AND THEN SECOND QUESTION, WILL WE KEEP THIS SCHEDULE FOR NEXT YEAR OR WILL WE MOVE IT BACK TO JUNE FOR, FOR NEXT YEAR? ARE YOU ASKING ABOUT THE 401K SHIFT? THE 401K? YES, THAT'S RIGHT. FOUR ONE K SHIFT WAS RELATED TO, UH, IT WAS A DELAY IN THE PRESENTATION OF THE MATERIALS THAT WE NEEDED FOR THE AUDITORS TO BEGIN THEIR WORK. SO THERE WAS, THERE WAS A BRIEF DELAY THERE ON THAT MATERIAL. OUR EXPECTATION IS THAT GOING FORWARD WE'LL WORK WITH OUR, OUR, UM, I KEEP UNDER REFER TO THEM BY NAME. UM, BUT WHAT WE'LL WORK WITH OUR CUSTODIAN AND MAKE SURE THAT WE HAVE THAT, UH, APPROPRIATELY TIMED YES, YEAR NEXT YEAR IF POSSIBLE. THERE, THERE IS, YOU KNOW, SOME, SOME POSSIBILITY THAT IT COULD SHIFT AGAIN, UH, DEPENDING ON, ON HOW QUICKLY THEY CAN PRODUCE THE DATA FOR BAKER TILLY. JODY, I DON'T KNOW IF YOU HAD ANYTHING THAT'S MORELY MORE OF A LAURIE QUESTION. I SUPPOSE I YOU WANNA USE THE MIC? YEP. PUBLIC MEETING. I'LL HAVE TO USE THE MIC. SO THERE'S A, YOU MIGHT CAN SIT RIGHT OVER HERE. THANK YOU. THIS IS LORI HORVATH. I WOULD IMAGINE THERE WOULDN'T BE A PROBLEM NEXT YEAR. GOING BACK TO THE JULY CADENCE, THAT WAS OUR EXPECTATION WHEN WE STARTED. WE HAD SOME DELAYS IN GETTING THE TRUST REPORT NUMBERS TO BE ABLE TO COMPILE THE TRIAL BALANCE. WE'VE TALKED TO THEM ABOUT HAVING IT EARLIER NEXT YEAR AND BEING ABLE TO PRESENT IN JULY WITH THE FINANCIAL STATEMENTS AND ISSUE THE 5,500 SHORTLY THEREAFTER. THAT WOULD BE OUR EXPECTATION TOO. GREAT. AND THE SECOND QUESTION, I, I'M SORRY, I LOST THE THREAD ON, WELL, SHOULD WE, DEPENDING ON THE ANSWER TO THE FIRST, SHOULD WE CONSIDER JUGGLING OUR, UM, SCHEDULE SO THAT WE JUST SET IT FOR GOT IT. THIS MEETING NEXT YEAR? IT'S, BUT IT SOUNDS LIKE WE'RE ALL IN AGREEMENT THAT IT, IT CAN STAY. UH, YEAH, LAST YEAR WAS IN JULY AND WE WOULD EXPECT THAT SAME GOING FORWARD. NO, I THINK THAT'S GREAT. THANK YOU. THANK YOU. THANK YOU. ANY OTHER QUESTIONS FOR JODY OR BAKER? TILLY? GREAT, THANK YOU. OKAY. ALL, UH, AGENDA [7. Congestion Revenue Rights Funding Trends] ITEM SEVEN, UH, IS UP NEXT. IT'S THE CONGESTION REVENUE RIDES, FUNDING TRENDS, AND KEITH COLLINS WILL PRESENT. KEITH. ALL RIGHT. THANK YOU. THIS, THIS SHORT PRESENTATION IS A FOLLOW UP FROM A QUESTION THAT OCCURRED AT THE JUNE MEETING. THERE WAS A MEMO, UH, AS PART OF THE BOARD PACKET AS WELL. HAPPY TO ANSWER ANY QUESTIONS ON THAT MEMO AS WELL. ULTIMATELY, THE, THE QUESTION THAT WE DID RECEIVE WAS, IS THE CRR FUND GROWTH DRIVEN BY CONGESTION, GRID GROWTH OR SOME OTHER FACTOR? AND SO WHAT WE DID IS WE DID, UH, A DEEP DIVE INTO THE ANALYSIS. WE LOOKED AT SOME, SOME OF THE POSSIBLE DRIVERS, FOR INSTANCE, INCREASED CONGESTION PRICES. AND WHAT WE FOUND WAS THAT AVERAGE CLEARING PRICES WERE ACTUALLY DOWN, UH, YEAR OVER YEAR EVERY MONTH BY ABOUT 30 TO 50%. SO INCREASED CONGESTION PRICES ARE NOT THE DRIVER. UH, INCREASED CONGESTION TOTALS. UH, WE LOOKED AT CONGESTION RENT AND, UH, UH, AGAIN, THAT IS NOT THE DRIVER CONGESTION IS IN FACT EASING, UH, NOT WORSENING. I THINK ONE OF THE, THE DRIVERS OF THAT IS OUR IMPLEMENTATION OF REAL-TIME CO OPTIMIZATION LATE LAST YEAR. SO THAT'S ACTUALLY PLAYING A ROLE IN DECREASING, UH, CONGESTION TOTALS. AND SORT OF THE, THE FINAL DRIVER WE LOOKED AT WAS MARKET PARTICIPATE, MARKET PARTICIPATION GROWTH. AND WE LOOKED AT THE, UH, THE PAIRING OF, UH, IN TRANSACTIONS THERE'S A SOURCE AND THERE'S A SINK. THE PAIRS ARE [00:20:01] UP 20 TO 33%. AND WHAT WE FOUND IS THAT THE TRI, THE, THE NUMBER OF TRANSACTIONS WE'RE SEEING ARE UP 23 TO 31%, AND WE'RE SEEING VOLUME UP FOR FOUR TO 20%. SO THE, THE DRIVER THAT WE'RE SEEING FOR THE, UH, INCREASED CRR FUND GROWTH IS IN FACT RELATED TO PARTICIPATION AND AND MEGAWATTS. I WILL NOTE THAT, UH, IN THE MORE RECENT MONTHS, WE'VE SEEN A BIT OF A DECELERATING OF, OF THAT GROWTH IF, IF NOT A SLIGHT DECLINES. BUT ULTIMATELY THAT'S, THAT'S THE REASON WHY, UH, THE CR FUND HAS BEEN GROWING. AND SO ULTIMATELY, UH, OUR CONCLUSIONS ARE EFFICIENCIES HAVE IMPROVED WITH REALTIME CO OPTIMIZATION. UM, ANY VOLUME IS, UH, OVERWHELMED. UM, UH, IN TERMS OF, UH, SAVINGS IN, IN TERMS OF THE SAVINGS AND COSTS, UH, THE TRANSACTIONS ARE INCREASING AND THAT TREND IS SHIFTING A LITTLE BIT, UH, SINCE THE MAY TIMEFRAME. SO I'M HAPPY TO ANSWER ANY QUESTIONS ON CRR TRENDS, UH, FOR THE COMMITTEE. SO AM I CORRECT IN, I'M MAKING SURE I HEARD WHAT YOU SAID. SO WE STILL HAVE A GROWTH IN CONGESTION AND GROWTH IN CONGESTION REVENUE RIDES. IT'S JUST THAT THE RATE OF GROWTH IS DECELERATING, IS THAT RIGHT? YEAH, THE RATE, BUT STILL GROWING, THE, THE INTEREST IN THE MARKET HAS BEEN GROWING IN TERMS OF THE NUMBER OF TRANSACTIONS, BUT THE UNDERLYING PRICING IS, IS PULLING BACK. OKAY. YEP. THANK YOU. SO KEITH, ALSO, WHEN WE SAY SOURCE SYNC PAIRS, CORRECT, UH, DOES THAT CORRELATE DIRECTLY TO NUMBER OF MARKET PARTICIPANTS? NO, NO, NOT NECESSARILY. SOURCEY PAIRS ARE A CRR IS A FUNCTION OF TWO POINTS ON THE SYSTEM, AND SO WE LOOK FOR UNIQUE PAIRS. UH, AND SO THE NUMBER OF UNIQUE PAIRS HAVE INCREASED. SO HOW MUCH IS THE MARKET PARTICIPANT NUMBER UP THAN RELATIVE TO THE TRANSACTION? SO WE SEE THERE'S LOTS MORE TRANSACTIONS. IS IT COMING FROM THE SAME NUMBER OF PARTICIPANTS OR, OR A LESSER GROWTH OR, WE HAVE SEEN THAT NUMBER INCREASE AS WELL. WE DID PRESENT THAT AT THE, UH, TNS MEETING, THAT THE, UH, THERE HAS ALSO BEEN A, A CORRESPONDING INCREASE IN THE NUMBER OF PARTICIPANTS OR ACCOUNTS, IF YOU WILL, THAT PARTICIPATE IN THE MARKET AS WELL. THAT THAT COULD BE AN INSTANCE WHERE YOU COULD HAVE A PARTICIPANT WITH DIFFERENT ACCOUNTS, BUT ULTIMATELY, UM, THOSE HAVE BEEN INCREASING AS WELL. ALRIGHT. ALRIGHT. WELL THANK YOU VERY MUCH. THANK YOU, KEITH. UH, NEXT UP ARE THE [8.1 Review 2026 Financial Summary ] COMMITTEE BRIEFS AND RICHARD SHIELD WILL PRESENT, UH, AGENDA ITEM EIGHT ONE, UH, STARTING WITH THE REVIEW OF THE 2026 FINANCIAL SUMMARY. THANK YOU. I'LL RUN THROUGH THIS PRESENTATION. OKAY. SO WE'RE LOOKING AT OUR YEAR END, UH, FORECASTED REVENUES, NET EXPENDITURES 18.7 MILLION. FAVORABLE TO BUDGET IN OUR PREVIOUS MEETING THAT WAS 16.1 MILLION. FAVORABLE TO BUDGET, UM, PRIMARILY DRIVEN BY STAFFING MANAGEMENT AT 10.7 MILLION. IT'S PREVIOUSLY 6.1 AND A PARTIAL OFFSET OF 8.5 MILLION FOR INTERCONNECTION REVENUES. AGAIN, THE INTERCONNECTION, UH, REVENUES ARE DELAYED DUE TO THE BATCH ZERO TIMING. SO AS, AS WE WORK THROUGH BATCH SERUM, WE WILL ANTICIPATE PICKING BACK UP UP THOSE INTERCONNECTION REVENUES IN 2027. OKAY. SO LOOKING AT THIS, UH, CHART, YOU KNOW, UH, WHEN WE'RE LOOKING AT, UH, REVENUES, WE ARE AT 3.1 MILLION VARIANTS TO BUDGET FAVORABLE. WE'RE AT 4.5 MILLION FAVORABLE DURING THE LAST MEETING. THAT'S PRIMARILY DRIVEN BY THE SYSTEM ADMINISTRATION FEE, WHICH SAW A SLIGHT MOVEMENT OF ABOUT HALF MILLION, A LITTLE OVER HALF MILLION, AS WELL AS SOME CHANGES IN OUR OTHER REVENUES. WE THINK ABOUT OUR EXPENDITURES SIDE. WE'RE LOOKING AT SEVERAL CHANGES HERE ON OUR PROJECT EXPENDITURES. PROJECT EXPENDITURES OF INCREASED FROM THE LAST MEETING, WE'RE LOOKING AT 5.7 MILLION VERSUS, UH, 2.7 MILLION, UH, WHEN WE MET IN JUNE. OTHER CHANGES INCLUDE THE 10.7 MILLION STAFFING MANAGEMENT. WHEN WE'RE LOOKING AT THAT RESOURCE MANAGEMENT COLUMN OF 12.9 MILLION, THAT WAS 7.7 MILLION PREVIOUSLY, THAT'S PRIMARILY DRIVEN, UM, BY, BY GREATER THAN EXPECTED TERMS. SO WHEN WE'RE THINKING ABOUT EMPLOYEE SEPARATIONS AT ERCOT, THAT RATE HAS INCREASED OVER TIME, WHICH I'M SURE WE'VE SEEN, UH, DURING OUR HRNG AND THAT, THAT ADDITIONAL, UH, TURNOVER IS CREATING SOME, SOME DIFFERENCES AS WELL AS OUR PACE OF HIRING. SO OVERALL THIS YEAR, UM, WE'RE SITTING OVER [00:25:01] BUDGET ON TOTAL, TOTAL SEPARATIONS AT ERCO, WHICH IS DRIVING THAT NUMBER. AND OF COURSE WE SAW AN INCREASE IN OUR PROJECT FUNDED WORK. SO OURS DEVOTED TO PROJECTS ARE REFLECTED AS A FAVORABLE VARIANCE WITHIN THE RESOURCE MANAGEMENT COLUMN AND THEY'RE SHIFTED OVER TO PROJECT EXPENDITURES. ADDITIONALLY, THE BIG MOVER IN OTHER, OTHER EXPENDITURES, THAT'S A MOVE FROM 6.6 TO 8.6, PRIMARILY DRIVEN BY THE COMMON INFRASTRUCTURE MOVEMENT. WE EXPECTED SOME RETIREMENTS OF FUNDS THAT WOULD COME BACK AND PROVIDE A NEGATIVE, UH, OR AN UNFAVORABLE MOVEMENT AGAINST COMMON INFRASTRUCTURE. THOSE HAVE BEEN PUSHED OUT, UH, DUE TO AN EXTENDED PROJECT TIMELINE. SO THOSE WILL HIT IN 2027. RICHARD, JUST A QUICK QUESTION ON THE INTEREST, UH, INCOME. SURE. HOW MUCH OF IT IS DRIVEN BY RATE VERSUS OUR ESTIMATES? UH, YOU KNOW, AS OPPOSED TO INCREASED DEPOSITS? OR IS IT, OR IS IT EVEN WHAT, WHAT'S WHAT'S THE BIGGEST DRIVER? BIGGEST DRIVER ON THE FAVORABLE IS, IS GONNA BE INTEREST RATES. UH, ALSO DRIVEN BY OUR CONGESTION, REVENUE RIGHTS AUCTION RECEIPTS. SO WE'LL SEE THAT AS WE FLIP THROUGH THAT. WE'VE SEEN A STEADY INCREASE IN THE AUCTION RECEIPTS. AND THIS IS KIND OF FEEDING BACK INTO THE CONVERSATION WITH KEITH AND AN EARLIER CONVERSATION AT TNS. BUT YES, WE'RE SEEING AN INCREASED BALANCE WELL ABOVE THE BUDGETED AMOUNT. WE'RE LOOKING AT THE SYSTEM ADMINISTRATION FEE RATE REVENUE RELATIVELY UNCHANGED FROM THE PRIOR MEETING, CONTINUES TO MOVE, UH, IN LINE WITH EXPECTATIONS. UH, STATEMENTS OF FINANCIAL POSITION. THIS IS, UM, AGAIN, NOTHING SIGNIFICANT TO CALL OUT HERE OTHER THAN THE CRR AUCTION RECEIPTS, UH, LIABILITIES THAT WE SEE IN OUR LIABILITIES AND NET ASSETS. WE'VE GOT 1.4 BILLION IN CURRENT AND NINE POINT, UH, 953 MILLION RATHER 0.9 MILLION IN THE LONG TERM. THAT CHANGED SLIGHTLY. UH, CURRENT LIABILITIES HAVE INCREASED OVER THE LONG TERM FOR OUR CRR AUCTION RECEIPTS. STATEMENT OF ACTIVITY, UH, I ALWAYS CALL THIS OUT. UM, NOTHING, NOTHING SIGNIFICANT, UH, CHANGING HERE WE HAVE THE KEY TAKEAWAYS, BOTH IN THE KEY TAKEAWAYS YOU'LL SEE THE 8.5 MILLION DECREASE AT THE VERY BOTTOM, UH, TREASURY OBLIGATIONS. FAIR VALUE ADJUSTMENT. OF COURSE, WE HOLD ALL OF OUR TREASURY OBLIGATIONS TO MATURITY. SO WE HAVE A MARK TO MARKET ADJUSTMENT HERE. WE'RE LOOKING AT, UM, YEAR TO DATE, 11.6 MILLION LOSS VERSUS 7.1 MILLION. SO WHEN WE'RE THINKING ABOUT INTEREST RATE CHANGES, OF COURSE AS INTEREST RATES INCREASE, YOU CONVERSELY SEE AN INCREASE HERE IN THE, THE UNRECOGNIZED LOSS AS BOND BOND VALUES DROP REVIEW OF OUR SPEND BY VALUE STREAM. UM, OF COURSE MOST OF OUR TIME AND UH, RESOURCES AT ERCOT ARE SPENT, UH, PERFORMING GRID OPERATIONS AND COMMERCIAL OPERATIONS, UH, MANAGING OUR EXTERNAL DATA REPORTING AND OUR EXTERNAL RELATIONSHIPS AS WELL AS OUR NETWORK NETWORK TOPOLOGY MODELS. THIS IS THE CRR FUNDS. UM, YOU'LL SEE THE INCREASE THERE. UH, WE HIT A HIGH IN JUNE OF 2.4 BILLION. UH, WE HAVE 2.1 BILLION BUDGETED FOR CRR AUCTION RECEIPTS THAT COUPLED WITH THE HIGHER AND EXPECTED INTEREST RATES ARE DRIVING THE ADDITIONAL INTEREST INCOME. RICHARD? YES, IF WE GO BACK TO THE PIE CHART, YES. WHERE, WHERE ARE CRR FUNDS? I BEG YOUR PARDON? WHERE DO THE CRR FUNDS INTERSECT? THE PIE CHART. OH. WHERE DO THE CRR FUNDS INTERSECT? THE VALUE STREAMS, UH, VALUE STREAMS. UH, THAT'S GONNA BE WITHIN, I WOULD HAVE TO LOOK AT THE APPENDIX TO KNOW EXACTLY WHERE THOSE FALL. I BELIEVE THEY FALL INSIDE OF, I THINK KEVE ORANGE ONE. YEAH, COMMERCIAL OPERATIONS. PERFORM COMMERCIAL OPERATIONS. OKAY. THANKS. YEAH, THANK YOU. OKAY, ANY ADDITIONAL QUESTIONS? ALRIGHT, IF THERE ARE NO QUESTIONS. UH, THANK YOU RICHARD. SO THE NEXT ITEMS [Items 8.2 & 8.3] ARE AGENDA, UH, ITEM EIGHT TWO, PERIODIC REPORT ON INVESTMENTS AND EIGHT THREE PERIODIC REPORT ON DEBT COMPLIANCE. AND, UH, SO IN AN EFFORT HERE TO STREAMLINE THE MEETINGS WHEN THE PRESENTATIONS AREN'T NECESSARY, UH, THE REPORTS, UH, ARE, HAVE BEEN INCLUDED IN THE MEETING MATERIALS FOR THE COMMITTEE. AND, UH, IF THERE'S NO DISCUSSION, WE WOULD MOVE ON TO THE NEXT ITEM. ALL RIGHT, THE NEXT UP [9. Future Agenda Items ] IS AGENDA ITEM [00:30:01] NINE, FUTURE AGENDA ITEMS. RICHARD, IF YOU WANNA HANDLE THIS. THANK YOU. SO FUTURE AGENDA ITEMS. WE'RE LOOKING AT THE NEXT MEETING IN DECEMBER. WE'LL BE RUNNING THROUGH THE UH, ANNUAL SELF-EVALUATION AS WELL AS REVIEWING FINANCIAL REPORT AND OUR STANDARD, UM, REPORTING THAT WE DO ON EVERY MEETING. OF COURSE, WE'LL HAVE THE REPORT OUT ON ENTERPRISE RISK MANAGEMENT PROGRAM, ACTIVITY, ETHICS POINT, INTERNAL AUDIT, EFFECTIVENESS OF OUR AUDIT FUNCTIONS AND SO FORTH. UH, JUST THE STANDARD STANDARD UPDATES AS WELL AS WE'LL BE RECEIVING THE INDEPENDENCE REPORT FROM THE SOC AUDIT. AND THE RELATED SOC MATERIALS WILL BE COMING TO Y'ALL IN THE DECEMBER MEETING. AND THAT'S SYSTEM A SYSTEMS AND ORGANIZATIONAL CONTROL AUDITS THAT ERCOT PERFORMS ANNUALLY. COMMENTS. GREAT. SO LAST ITEM BEFORE WE MOVE INTO EXECUTIVE SESSION IS AGENDA ITEM 10, OTHER BUSINESS. ARE THERE ANY OTHER BUSINESS, UH, ANY OTHER BUSINESS, ANY COMMITTEE MEMBER WOULD LIKE TO RAISE? ALRIGHT, HEARING NONE [Convene Executive Session ] AT THIS TIME, THE COMMITTEE WILL RECESS GENERAL SESSION AND TAKE A THREE MINUTE BREAK BEFORE CONVENING AN EXECUTIVE SESSION. THERE WILL BE TWO VOTING ITEMS ANTICIPATED FOLLOWING THE EXECUTIVE SESSION. SO GENERAL SESSION WILL RECONVENE AFTER THE CONCLUSION OF THE EXECUTIVE SESSION. GENERAL SESSION IS NOW RECESSED AND THE WEBCAST WILL BE CONCLUDED. CHAIR GLEASON. THIS MEETING OF THE PUBLIC UTILITY COMMISSION OF TEXAS WILL STAND IN RECESS. THE GENERAL SESSION OF THIS MEETING IS NOW RECONVENED. BEFORE WE MOVE ON TO OUR BUSINESS, I WOULD LIKE TO ASK PUC CHAIR THOMAS GLEASON IF HE WOULD LIKE TO RECONVENE THE PUC OPEN MEETING. WE DO NOT HAVE A QUORUM. VERY GOOD. [11.1 Recommendation regarding Acceptance of 2025 ERCOT 401(k) Savings Plan Audit Report ] IN AGENDA ITEM 11.1, I'LL ENTERTAIN A MOTION TO RECOMMEND THAT THE BOARD ACCEPT THE 2025 ERCOT 401K SAVINGS PLAN AUDIT REPORT DISCUSSED DURING AGENDA ITEMS FOUR THROUGH 4.3. SO MOVED. SECOND, BILL, JULIE SECOND. ALL IN FAVOR? AYE. AYE. ANY OPPOSED? ABSTENTIONS. GREAT. IN AGENDA [11.2 Recommendation regarding Selection of 2026 ERCOT 401(k) Savings Plan Auditor ] ITEM 11.2, I'LL ENTERTAIN A MOTION TO RECOMMEND THAT THE BOARD AUTHORIZE AND APPROVE ERCOT TO ENGAGE THE AUDITOR DISCUSSED DURING AGENDA ITEM ES 2.2 0.1 TO PERFORM ERCOT 401K SAVINGS PLAN AUDIT FOR THE YEAR ENDING DECEMBER 31ST, 2026. SO MOVED. JULIE FOR FIRST, BEN FOR SECOND. ALL IN FAVOR? AYE. AYE. ANY OPPOSED? ABSTENTIONS? VERY GOOD, THANK YOU. THIS MEETING OF THE FINANCE AND AUDIT COMMITTEE IS NOW ADJOURNED AND THE WEBCAST WILL BE CONCLUDED. OKAY. * 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.