* 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]
          UH, GOOD MORNING EVERYONE. 
          ERCOT, BOARD OF DIRECTORS AND GUESTS. 
          I'M BILL FLORES, BOARD CHAIR. 
          I'VE CONFIRMED THAT WE HAVE A QUORUM OF THE BOARD OF DIRECTORS AND HEREBY RECONVENED THE, AND CALL TO ORDER THE SEPTEMBER 14TH AND 15TH 2026 MEETINGS OF THE BOARD OF DIRECTORS. 
          THIS MEETING IS BEING WEBCAST LIVE TO THE PUBLIC ON ERCOT WEBSITE. 
          I WOULD LIKE TO PROVIDE PUC CHAIRMAN THOMAS GLEASON AND THE OPPORTUNITY TO CALL TO ORDER THE OPEN MEETING OF THE PUBLIC UTILITY COMMISSION OF TEXAS. 
          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 SEPTEMBER 15TH, 2026. 
          THANK YOU, MR. CHAIRMAN. 
          UH, THANK YOU. 
          THE ANTITRUST ADMONITION SECURITY MAP ARE INCLUDED WITH THE POSTING MEETING MATERIALS. 
          AS I INDICATED YESTERDAY, THE BOARD RECEIVED REQUESTS FROM KAITLYN SMITH, CHAIR OF THE TECHNICAL ADVISORY COMMITTEE, JEFF MCDONALD, DIRECTOR OF THE INDEPENDENT MARKET MONITOR, BETH GARZA, OF THE TECH REPRESENTATIVE FOR RESIDENTIAL CONSUMERS, AND NED BONKOWSKI, VICE PRESIDENT OF REGULATORY POLICY FOR RA TO PROVIDE IN-PERSON COMMENTS, UH, ALSO REPRESENTATIVES THE TEXAS RELIABILITY ENTITY KNOWN AS TEXAS RE ARE ALSO HERE TO COMMENT IN PERSON. 
          WE WILL TAKE UP THOSE COMMENTS DURING OUR DISCUSSION OF AGENDA ITEM 18 REGARDING THE 2027 ERCOT METHODOLOGIES FOR DETERMINING MINIMUM ANCILLARY SERVICE REQUIREMENTS. 
          CHAD, HAVE WE RECEIVED ANY OTHER, UH, REQUESTS TO COMMENT IN PERSON TODAY? NO OTHER COMMENTS AT THIS TIME? OKAY, THANK YOU, CHAD. 
          [11.1 ERCOT Staff Response to IMM 2025 State of the Market Report]
THE, UH, PENDING ITEM FROM YESTERDAY'S MEETING IS, UH, AGENDA ITEM 11.1. 
          UH, KEITH IS KEITH COLLINS IS GOING TO PRESENT THE ERCOT STAFF REPORT STAFF RESPONSE TO THE IMM 2025 STATE OF THE MARKET REPORT. 
          KEITH. 
          ALRIGHT. 
          THANK YOU, MR. CHAIRMAN. 
          THIS, THIS REPORT IS A FOLLOW ON TO A DISCUSSION WE HAD AT THE JUNE MEETING, THE JUNE MEETING. 
          WE, UH, TALKED ABOUT THE IMM REPORT, WHICH WAS RELEASED IN LATE MAY. 
          UH, WE HAD OUR INITIAL DISCUSSION AND OUR INITIAL THOUGHTS. 
          THE PC STAFF RESPONDED, UH, LAST MONTH WITH THEIR COMMENTS, AND TODAY WE'RE HERE TO PROVIDE OUR COMMENTS. 
          UH, WHAT WE'RE GONNA FOCUS ON TODAY ARE THE SPECIFIC RECOMMENDATIONS IN THE IMM REPORT AND HIGHLIGHT, UH, UH, ULTIMATELY THERE'S, THERE'S A LOT OF AREA OF AGREEMENT. 
          THERE ARE SOME AREAS OF DISAGREEMENT, SO I'LL BE CLEAR TO HIGHLIGHT WHICH, WHICH AREAS WHERE WE ARE AGREE IN AGREEMENT WITH THE IMM AND SOME AREAS WHERE WE MAY NOT BE. 
          THE FIRST, UH, RECOMMENDATION HERE IS THE NEW ONE IN, UH, THEIR 2025 REPORT, WHICH HAD TO DO WITH, UH, THE REDESIGN AND IMPROVEMENT IN FIRM FUEL SUPPLY SERVICE. 
          UH, THE IMM, UH, NOTED THAT, UH, THEIR CONCERNS, THEY'VE MADE, THEIR CONCERNS KNOWN IN, IN THIS FORUM AS WELL AS OTHER FORMS. UH, ULTIMATELY FROM OUR PERSPECTIVE, THIS IS SOMETHING THAT, UH, THAT RESTS WITH THE COMMISSION, NOT WITH, UH, WITH ERCOT. 
          AND ULTIMATELY THE STAFF, UH, DID DISAGREE WITH THE I'S RECOMMENDATION IN, IN PROJECT NUMBER 3, 4 6, 7 7. 
          AND ULTIMATELY WE, UH, WE WERE FOLLOWING THE PUC LEAD AND WE DO NOT SEE ANY FURTHER ACTION NECESSARY ON THIS RECOMMENDATION AT THIS TIME MOVING FORWARD. 
          UH, THERE ARE, UH, SEVERAL OTHER RECOMMENDATIONS FROM PRIOR YEARS STARTING WITH 2024. 
          UH, THERE WAS A SERIES OF RECOMMENDATIONS, AND ONE OF THEM, UH, HAS TO DO WITH OUR ANSLEY SERVICE DEMAND CURVES. 
          THIS IS SOMETHING WHERE I, I, I DO THINK THAT WE, WE DO HAVE SOME AGREEMENT WITH THE IMM AND THAT WE DO FEEL THAT IT'S NECESSARY TO REVIEW THE ANSI SERVICE DEMAND CURVES. 
          THIS IS SOMETHING THAT THE COMMISSION STAFF BROUGHT UP, UH, LAST MONTH AS WELL. 
          AND, UH, I, I BELIEVE WE'RE ALL IN AGREEMENT, UH, AMONG, AMONGST US THAT THIS IS SOMETHING THAT DOES NEED TO BE REVISITED. 
          WE ARE WORKING ON OUR BIENNIAL O-R-D-C-A-S-D-C REPORT, WHICH IS DUE, UH, BY NOVEMBER 1ST. 
          AND, UH, OUR PRELIMINARY FINDING IS, IS CONSISTENT THAT THE ADCS ARE SOMETHING THAT SHOULD BE REVISITED AND AND REEVALUATED. 
          UH, THE NEXT RECOMMENDATION THEY HAVE IS TO ADOPT A PROBABILISTIC STOCHASTIC, UH, RISK METHODOLOGY. 
          THIS IS SOMETHING THAT ULTIMATELY HAS BEEN A PART OF THE ANCILLARY SERVICE METHODOLOGY. 
          THERE MAY BE SOME DISAGREEMENTS WITH REGARDS TO SPECIFIC PARAMETERS, BUT I THINK THE, THE CONCEPT OF, UH, PROBABILISTIC, UH, UH, APPROACH IS, IS SOMETHING THAT, THAT WE HAVE HAVE TAKEN AND ARE WORKING ON MOVING FORWARD. 
          UH, THE NEXT RECOMMENDATION IS ONE WHERE, UH, UH, BOTH OURSELVES AND AND COMMISSION STAFF DO DISAGREE WITH THE IMM. 
          UH, THEIR RECOMMENDATION IS TO SET THE DURATION FOR NON SPINNING RESERVES TO ONE HOUR. 
          AS PART OF THE DRS 1309. 
          THERE WAS AN AGREEMENT AND COMPROMISE THAT THAT STAFF, UH, ERCO STAFF MADE WITH, WITH THE IMM IN REDUCING THAT TO TWO HOURS. 
          UH, AND THAT WAS PASSED AND APPROVED. 
          UH, WE DON'T 
          [00:05:01]
SEE ANY NEED TO MOVE THAT FURTHER. 
          UH, THAT IS COMI THAT IS ALSO CONSISTENT WITH COMMISSION STAFF APPROVAL, UH, RECOMMENDATIONS. 
          AND, AND SO ULTIMATELY, UH, WE, WE SEE NO FURTHER WORK ON THIS PARTICULAR RECOMMENDATION AT THIS TIME. 
          UH, THE NEXT TWO RECOMMENDATIONS, ONE IS IMPLEMENT A PROCESS TO MITIGATE MARKET POWER AT SYSTEM AND Z LEVELS. 
          AND THE SEC, THE NEXT ONE RELATED TO, UH, REALTIME OFFER REQUIREMENTS, PENALTIES AND PROXY PRICING. 
          UH, WE, WE DON'T HAVE, UH, A NECESSARILY DISAGREEMENT, BUT I THINK OUR, OUR VIEW IS THAT THESE, THESE ARE TWO RECOMMENDATIONS THAT WOULD BE HELPFUL FOR THE IMM TO TAKE THE LEAD ON AND TO PROVIDE ADDITIONAL INFORMATION ANALYSIS TO HELP US UNDERSTAND, UH, YOU KNOW, THE PARTICULAR NATURE OF THE ISSUES AND CONCERNS THAT THEY HAVE AND HELP US PRIORITIZE, UH, ANY, ANY CHANGES THAT, THAT THEY MAY SEE IS, IS APPROPRIATE. 
          IN 2022, THEY DID RECOMMEND TO IMPLEMENT A MULTI INTERVAL REAL-TIME MARKET. 
          UH, WHAT'S WHAT'S INTERESTING WITH ERCOT IS WE DO HAVE AN ACTIVE, UM, GRID TRANSFORMATION TEAM. 
          AND THEY WERE, UH, IN, IN DISCUSSIONS THAT I'VE HAD WITH THAT TEAM THAT IS, IS LIKELY TO BE A PART OF THEIR ANALYSIS FOR 2027. 
          SO I DO THINK THIS IS SOMETHING THAT CAN BE POTENTIALLY TAKEN UP AS PART OF THAT PROCESS. 
          UH, IMPLEMENTATION OF UNCERTAINTY PRODUCT, THAT IS SOMETHING THAT IS COVERED UNDER NPR 1309, UH, RECONFIGURE LOAD ZONES, UH, TO REFLECT PREVAILING CONGESTION PATTERNS. 
          UH, WE, WE DO AGREE ULTIMATELY THAT THIS IS IMPORTANT. 
          I THINK IF WE HAD A FAR WEST LOAD ZONE, THAT WOULD BE REALLY HELPFUL. 
          UH, IN THE CURRENT CIRCUMSTANCES THAT WE HAVE TODAY, THE, THE CONCERN IS IT DOES TAKE A FOUR YEAR, UH, LEAD TIME TO, TO CHANGE LOAD ZONES. 
          AND WE LOOK AT CHANGING CONGESTION, POTENTIAL, CHANGING CONGESTION PATTERNS WITH POTENTIAL CHANGES IN TRANSMISSION AND, UH, AND LOADS. 
          WE THINK THAT, UH, UNTIL THERE'S MORE CERTAINTY IN THAT PROCESS, WE THINK IT'S BETTER TO WAIT TILL THAT CERTAINTY MATERIALIZES BEFORE RECOMMEND ANY RECOMMENDING ANY CHANGES TO LOAD ZONES AT THIS TIME. 
          AND THEN LOOKING AT THE, THE FINAL SET OF RECOMMENDATIONS, WE HAVE, UH, POINT TO POINT OBLIGATION BID FEE. 
          THIS WAS SOMETHING THAT CAME UP AT BOTH THE TNS AND THE FNA MEETINGS YESTERDAY. 
          THIS IS SOMETHING THAT, UH, IS IN PROCESS WITH NPR 1343. 
          UH, THE MP, UH, THE IMM HAS BEEN SUPPORTIVE AND, AND WE DO HOPE TO HAVE THAT AT THE BOARD IN DECEMBER. 
          UH, THE FINAL RECOMMENDATIONS, I THINK THE, THE FINAL POINT I'LL MENTION ON THE LAST ONE IS THE FOUR CP CHANGES. 
          THIS IS SOMETHING AGAIN, THAT THE COMMISSION IS UNDERTAKING, UH, AT, AT PRESENT AND, AND NOT SOMETHING THAT ERCOT IS IS LEADING AT THIS TIME. 
          SO THAT IS THE END OF MY PRESENTATION AND I'M HAPPY TO ANSWER ANY QUESTIONS THE BOARD MAY HAVE. 
          THANK YOU, KEITH. 
          ANY QUESTIONS FOR KEITH? UM, THE RESPONSE FOR TO THE IMM REPORT. 
          THANK YOU. 
          THANK YOU. 
          NEXT 
          [12. Independent Market Monitor (IMM) Report]
IS AGENDA ITEM 12, THE INDEPENDENT, UH, MARKET MONITOR REPORT. 
          UH, THIS IS A STANDING ITEM ON THE BOARD AGENDA. 
          THE IMM DID NOT SUBMIT A SEPARATE REPORT FOR TODAY, BUT I-M-M-I-M IMM DIRECTOR JEFF MCDONALD, INDICATED HE MIGHT LIKE TO USE HIS TIME TO RESPOND TO JEFF. 
          KEITH'S COMMENTS REGARDING I'S 2025 STATE OF THE MARKET REPORT, AND JEFF IS WALKING UP, SO HE DEFINITELY WANTS TO SAY SOMETHING. 
          HI. 
          YEAH, GOOD MORNING, JEFF. 
          OKAY, GOOD MORNING. 
          THANK YOU VERY MUCH, UH, FOR THE TIME. 
          I WON'T TAKE UP TOO MUCH OF YOUR TIME. 
          JUST FOR THE BOARD'S PERSPECTIVE, KEITH AND I TALK, UH, ABOUT EVERY OTHER WEEK. 
          UM, AND WE'VE KNOWN EACH OTHER FOR, I DUNNO, MAYBE 15 YEARS OR SO. 
          UH, AND SO WE HAVE A VERY COLLEGIAL RELATIONSHIP. 
          UH, WE'VE TALKED THROUGH, UH, ERCOT POSITION ON IMM RECOMMENDATIONS REPEATEDLY, UH, AND, UH, CERTAINLY REPEATEDLY OVER THE LAST FEW WEEKS. 
          UM, AND I DON'T REALLY HAVE ANY, ANYTHING TO SAY TO COUNTER ANYTHING THAT KEITH SAID. 
          UM, THE PURPOSE OF OUR RECOMMENDATIONS ARE TO PROVIDE OUR PERSPECTIVE, UH, TO ERCOT AND TO THE, AND TO THE TEXAS PUBLIC. 
          AND SO, YOU KNOW, ONE OF THE THINGS THAT WE COULD DO MAYBE TO IMPROVE HOW THEY'RE DIGESTED IS TO INCLUDE A, AN IMPACT AND A, AND A COST OF IMPLEMENTATION, UH, IN THE, WITH THE RECOMMENDATIONS SO THAT YOU HAVE A SENSE OF WHAT WE THINK THE IMPACT WOULD BE IF YOU IMPLEMENTED OUR RECOMMENDATION AND, AND SOME SCORING OF, OF THE COST. 
          THAT MIGHT HELP A LITTLE BIT, UM, GOING FORWARD. 
          UM, AND I DON'T KNOW THAT WE WOULD GO BACK AND DO THAT FOR ALL OF THE HISTORICAL ONES, BUT WE COULD TAKE THE, THE RECOMMENDATIONS FROM THE LAST FEW YEARS AND DO THAT GOING FORWARD. 
          UM, AND THAT MIGHT HELP A LITTLE BIT, BUT, BUT IN ESSENCE, YOU KNOW, ERCOT IS IN A, IN AN INTERESTING POSITION WHERE, UH, YOU KNOW, THEY GET TO QUEUE UP WHAT IS HEARD BY THE STAKEHOLDERS. 
          BUT THE STAKEHOLDER PROCESS ITSELF IS WHAT DETERMINES, UH, THE, THE MARKET DESIGN RECOMMENDATIONS, UH, THAT MOVE FORWARD. 
          AND SO OUR RECOMMENDATIONS ARE NOT JUST GEARED TOWARDS ERCOT, BUT ALSO GEARED TOWARDS THE 
          [00:10:01]
STAKEHOLDER PROCESS THAT, THAT SHAPES THOSE RECOMMENDATIONS. 
          AGAIN, IT, IT ISN'T A MATTER OF AGREEING OR DISAGREEING WITH KEITH. 
          UH, THERE'S JUST TWO DIFFERENT PERSPECTIVES ON THE RECOMMENDATIONS. 
          AND SO I JUST WANTED TO MAKE SURE EVERYONE UNDERSTOOD THAT, AND I'M HAPPY TO, I'M HAPPY TO ANSWER ANY QUESTIONS ON THE RECOMMENDATIONS IF YOU LIKE. 
          THAT'S WHERE I WAS GONNA GO NEXT. 
          DO WE HAVE ANY QUESTIONS FOR JEFF? WELL, JEFF, THANKS FOR BEING HERE. 
          THANK YOU. 
          APPRECIATE YOU, UH, UH, JOINING US TODAY. 
          WE, UH, WE HAVE SOME, UH, A MEMBER ATTENDANCE LOGISTICS TO DEAL WITH. 
          SO WE'RE GONNA MOVE ONE AGENDA ITEM FORWARD. 
          THAT'S AGENDA ITEM 19.3 
          [19.3.3 Board Action on CEO Agreement (Part 1 of 2)]
0.3. 
          THAT IS BOARD ACTION ON THE CEO AGREEMENT. 
          UM, SO, UH, WE'RE GOING TO TAKE PART OF THE HR AND G COMMITTEE REPORT AT THIS TIME TO TALK ABOUT THIS PARTICULAR ISSUE. 
          THANK YOU, CHAIR. 
          YESTERDAY, UH, DURING THE EXECUTIVE SESSION OF THE HUMAN RESOURCES AND GOVERNMENT GOVERNANCE COMMITTEE MEETING, WE, WE WERE FORTUNATE TO HAVE ALL OF THE BOARD MEMBERS OF ERCOT PRESENT. 
          UH, WE DISCUSSED IN DETAIL A NEW EXECUTIVE AGREEMENT FOR, UH, ERCOT CURRENT CEO, PABLO VEGAS. 
          FOLLOWING THE EXECUTIVE SESSION, UH, THE COMMITTEE VOTED TO RECOMMEND BOARD APPROVAL OF THE EXECUTIVE AGREEMENT BETWEEN ERCOT AND CURRENT CEO PABLO VEGAS IN GENERAL SESSION. 
          A COPY OF THE DRAFT AGREEMENT IS INCLUDED IN THE MATERIALS FOR TODAY'S MEETING DISPLAYED ON, UH, THE SCREEN IS A SUMMARY OF THE KEY TERMS OF THE PROPOSED AGREEMENT, WHICH WILL BE EFFECTIVE JANUARY 1ST, 2027 APPROVED. 
          THE AGREEMENT FOLLOWS THE CURRENT STRUCTURE AND KEY TERMS OF THE CURRENT CEO AGREEMENT. 
          AND JUST, JUST SUMMARIZE, THE KEY POINTS THAT ARE REFLECTED HERE IS THAT, THAT THE CONTRACT WILL BE FOR A SIX YEAR TERM, WHICH INCLUDES THE, THERE'S A ONE YEAR, UH, EXISTING TERM UNDER THE CURRENT AGREEMENT. 
          SO IT'S A FIVE ADDITIONAL YEARS UNDER, UH, PABLO'S AGREEMENT. 
          SO A FIVE YEAR EXTENSION, A 2027 BASE SALARY INCREASE, UH, 7% FROM 2026, UNCHANGED SHORT-TERM AND LONG-TERM INCENTIVE PROGRAM, UH, METHODOLOGY, A NEW 4 57 F UH, DEFERRED COMPENSATION PLAN, WHICH WOULD PROVIDE 14.5% OF PAY OVER APPLICABLE IRS LIMITS AND PAYMENT OF THE FINAL REMAINING MAKE CALL PAYMENT, WHICH EXISTS UNDER, UH, THE CURRENT CEO CONTRACT, WHICH WOULD BE PAID IN THE FIRST QUARTER, 2027 IS PART OF OUR ANALYSIS OF THIS, UH, AGREEMENT. 
          ERCOT OBTAINED ADVICE AND, UH, COMPARISON OF COMPENSATION AND FROM MERCER, AN INDEPENDENT CONSULTANT, AND CONCLUDED THAT THE TOTAL COMPENSATION PROPOSED UNDER THE DRAFT AGREEMENT IS BETWEEN THE 50TH AND 75TH PERCENTILE, UH, MARKET FOR CEOS IN THE COMPARABLE GROUP AND ALSO WITHIN A RANGE OF OTHER IN INDEPENDENT SYSTEM OPERATORS OF CEOS. 
          DOES ANYBODY HAVE ANY COMMENTS OR QUESTIONS ON THIS? OKAY, HEARING NONE, I MOVE TO APPROVE THE DRAFT EXECUTIVE EMPLOYMENT AGREEMENT. 
          THANK YOU, PEGGY. 
          UH, THIS CONTRACT EXTENSION RENEWAL REFLECTS THE VALUE THAT, UH, PABLO HAS ADDED TO THIS ORGANIZATION OVER, UH, THE LAST FOUR CHALLENGING YEARS, AND ALSO THE CHALLENGES THAT WE EXPECT MOVING FORWARD, UH, FOR NOT ONLY HIM BUT THE TEAM THAT, THAT AS PART OF TEAM ERCOT. 
          AND SO WE, UH, WITH THAT, I'LL UH, ASK IF WE HAVE A SECOND FOR PEGGY'S MOTION TO APPROVE THE CEO AGREEMENT. 
          THANK YOU, KATHLEEN. 
          ALL IN FAVOR? AYE. 
          ANY OPPOSED? ANY ABSTENTIONS? OKAY. 
          THE BOARD HAS APPROVED THE EXTENSION RENEWAL OF, OF, UH, PABLO'S CEO CONTRACT. 
          NEXT IS GONNA 
          [19.3.4 PUC Action on CEO Agreement]
BE AGENDA ITEM 19.3 0.4, WHICH IS AN OPPORTUNITY FOR THE COMMISSION DELIBERATION ON THE EQUIPMENT, UH, ON THE AGREEMENT. 
          I WILL NOW TURN IT OVER TO CHAIRMAN GLEASON TO FACILITATE THAT DISCUSSION. 
          CHAIRMAN GLEASON. 
          THANK YOU. 
          CHAIRMAN FLORES, COMMISSIONERS, YOU'VE SEEN THE BOARD MATERIALS. 
          ANY THOUGHTS OR QUESTIONS ON THE EXECUTIVE EMPLOYMENT AGREEMENT? ALRIGHT, WELL, CHAIRMAN FLORES, I WHOLEHEARTEDLY AGREE WITH EVERYTHING YOU'VE SAID. 
          UM, PABLO ADDS A LOT OF VALUE TO THIS ORGANIZATION AND HAS REALLY DONE A LOT TO LEAD, UM, A REALLY GOOD WORKING RELATIONSHIP WITH THE COMMISSION. 
          [00:15:01]
AND SO WITH THAT, I MOVE THAT THE COMMISSION APPROVED THE EXECUTIVE EMPLOYMENT CONTRACT JUST PREVIOUSLY APPROVED BY THE BOARD. 
          SECOND. 
          HAVE A MOTION TO SECOND. 
          ALL THOSE IN FAVOR SAY AYE. 
          AYE. 
          AYE. 
          OPPOSED? MOTION PREVAILS. 
          MR. CHAIRMAN, UH, THANK YOU, CHAIRMAN GLEASON, UH, PA I'D LIKE TO GIVE YOU A MOMENT TO MAKE ANY COMMENTS YOU HAVE. 
          WELL, I JUST WANNA SAY THANK YOU FOR THE, UH, FOR THE VOTE OF CONFIDENCE AND SUPPORT. 
          IT HAS BEEN, UM, I THINK AN INCREDIBLY CHALLENGING BUT REWARDING FOUR YEARS. 
          UH, WE'VE MADE PROGRESS ON MANY CRITICAL FRONTS ACROSS THE OPERATIONS OF THE GRID, THE COMMUNICATIONS WITH STAKEHOLDERS, AND WORKING CLOSELY WITH ALL OF THE REGULATORY AND POLICY MAKERS THAT HELP TO SHAPE AND DEFINE WHAT WE'RE LOOKING TO ACCOMPLISH AND, AND HOW WE WANNA SUCCEED HERE IN TEXAS. 
          AND SO WE HAVE A LOT OF WORK AHEAD OF US STILL. 
          WE CAN SEE THE CHALLENGES AHEAD, BUT WE'VE GOT A FANTASTIC TEAM TO DO SO, AND A VERY ENGAGED AND SUPPORTIVE BOARD AND A COMMISSION THAT IS HELPING TO GUIDE US, UH, THROUGH ALL OF THIS. 
          SO THANK YOU ALL FOR THAT SUPPORT, AND I LOOK FORWARD TO CONTINUING THE WORK TOGETHER. 
          THANK YOU, PABLO. 
          WITH THAT, UH, DOES ANY OTHER BOARD MEMBER WISH TO OR COMMISSION MEMBER WISH TO MAKE A COMMENT ON THIS PARTICULAR ISSUE? OKAY, THANK YOU. 
          WITH THAT, WE'LL 
          [13. CEO Update]
MOVE ON TO, UH, AGENDA ITEM 13 AND THE CEO UPDATE. 
          PABLO, YOU'RE UP. 
          THANK YOU. 
          WELL, THANK YOU EVERYBODY, AND AGAIN, AS ALWAYS, I APPRECIATE EVERYBODY'S ENGAGEMENT AND INTEREST IN THE IMPORTANT WORK THAT WE ARE DOING HERE AT ERCOT. 
          UH, TODAY I WANNA COVER A COUPLE OF, UH, KEY ISSUES THAT ARE UNDERWAY. 
          UH, ONE, TALK A LITTLE BIT ABOUT QUITE AN INCREDIBLE SUMMER THAT WE HAVE JUST GOTTEN THROUGH. 
          UH, WE HAVE SET, UH, A SIGNIFICANT NUMBER OF NEW RECORDS THROUGHOUT THIS SUMMER PERIOD, AND WE'VE SEEN IT DONE IN A WAY THAT, UH, HAS BEEN RELATIVELY SMOOTH, I THINK, FROM AN OPERATIONAL AND FROM A A CONSUMER POINT OF VIEW. 
          TALK A LITTLE BIT ABOUT WHERE WE ARE WITH OUR, UH, PGA 1 45 VERIFICATION PROCESS. 
          THIS IS IMPORTANT AS WE'RE LOOKING TO COORDINATE IN ADVANCE TO BATCH ZERO CYCLE, UH, AND CONTINUE TO SUPPORT THE INTEGRATION OF LARGE LOADS. 
          I WANNA HIGHLIGHT THE FACT THAT WE JUST PASSED A 30 YEAR ANNIVERSARY HERE FOR ERCOT AS, UH, THE FIRST INTEGRATED SYSTEM OPERATOR IN THE UNITED STATES. 
          SO AN IMPORTANT MILESTONE THERE. 
          AND THEN, UH, ALSO WANNA POINT OUT THAT WE'RE OP EXPANDING OUR COMMUNICATIONS CHALLENGES. 
          ONE OF THE THINGS THAT WE HAVE BEEN CONTINUOUSLY WORKING TO IMPROVE OVER THE YEARS IS, UH, OUTREACH COMMUNICATION ACCESS TO WHAT IT IS WE DO AND WHY WHAT WE DO IS IMPORTANT TO ALL STAKEHOLDERS, RESIDENTIAL CONSUMERS, ALL THE WAY UP THROUGH THE MOST SOPHISTICATED INDUSTRIAL CONSUMERS. 
          AND SO WE ARE LAUNCHING A NEW PODCAST, UH, SHORTLY THAT I THINK IS GONNA HELP IN THAT ENDEAVOR. 
          SO, STARTING WITH, UH, WHAT'S BEEN GOING ON THIS SUMMER, WE HAVE SERVED NEARLY 14 MILLION MORE MEGAWATT HOURS THIS YEAR SO FAR THAN WE DID IN 2025, THAT WE HAVE BEEN TALKING A LOT MORE REGULARLY ABOUT ENERGY USE AND HOW IMPORTANT ENERGY USE IS AS A METRIC TO MEASURE OVER TIME VERSUS JUST THE PEAKS. 
          THE PEAKS WILL HAPPEN WHEN WE GET EXTREME WEATHER EVENTS, AND WE'VE HAD A FAIRLY HOT SUMMER AND WE'VE SEEN NEW PEAKS AS A RESULT OF THAT. 
          BUT WHAT WE'VE ALSO BEEN SEEING OVER THE LAST SEVERAL YEARS IS CONSISTENT STEADY GROWTH ON THE ENERGY FRONT. 
          THIS SUMMER WE DID SET 21 NEW PEAK RECORDS. 
          TWO OF THEM WERE ALL TIME DEMAND RECORDS SET, UH, IN ALMOST SUBSEQUENT DAYS BACK IN JULY. 
          AND WHAT STANDS OUT TO ME ISN'T SIMPLY THAT WE'RE NOW OVER 91,000 MEGAWATTS, UH, ON THE SYSTEM. 
          IT'S ABOUT HOW ROUTINELY WE ARE OPERATING AT DEMAND LEVELS THAT WOULD'VE BEEN EXCEPTIONAL JUST A FEW YEARS AGO. 
          THIS MONTH OR THIS SUMMER, WE SET RECORDS IN JUNE, JULY, AUGUST, AND IN SEPTEMBER. 
          SO WE'RE NOT EXPERIENCING ONE EXTRAORDINARY WEATHER EVENT AND ONE PEAK PERIOD. 
          IT'S BETTER REFLECTING THE ACTUAL SCALE OF THE SYSTEM THAT WE'RE NOW OPERATING. 
          ONE STATISTIC THAT I FOUND VERY INTERESTING LOOKING BACK AT THIS DATA WAS THE WEEKEND RECORDS. 
          HISTORICALLY WEEKENDS GIVE US RELIEF BECAUSE A LOT OF COMMERCIAL AND INDUSTRIAL ACTIVITY DECLINES, AND WE ARE SEEING FAIRLY HIGH DEMAND DURING THOSE TRADITIONALLY LOWER LO UH, TRADITIONALLY LOWER LOAD PERIODS. 
          AND THAT'S ANOTHER INDICATION THAT LOAD PROFILE ITSELF IS EVOLVING IN THE MARKET. 
          I WOULD NOT ATTRIBUTE ALL OF THIS LOAD GROWTH AND THESE PEAKS TO DATA CENTERS AT THIS POINT BECAUSE THE LO HOWEVER, THE LOAD PROFILE OF LOAD LIKE DATA CENTERS IS GOING TO MAKE THE DISTINCTION BETWEEN PEAK AND OFF PEAK PERIOD IS LESS PRONOUNCED. 
          THAT'S SOMETHING THAT WE'VE BEEN TALKING ABOUT THAT WE DO EXPECT THOSE DIFFERENCES TO START TO COMPRESS AS WE SEE MORE STEADY HIGH VOLUME LOAD COMING ONTO THE SYSTEM. 
          AND I THINK ONE OF THE MOST IMPORTANT POINTS THROUGHOUT THIS WHOLE, UH, SUMMER IS THAT TEXANS DIDN'T EXPERIENCE THESE EXTRAORDINARY EVENTS IN ANY UNUSUAL WAY FOR THE CONTROL 
          [00:20:01]
ROOM. 
          EACH NEW RECORD REPRESENTED A MUCH LARGER AND INCREASING INCREASINGLY COMPLEX SYSTEM TO BALANCE, BUT FOR CUSTOMERS, THE GRID SIMPLY WORKED THE WAY IT WAS SUPPOSED TO, AND THAT'S EXACTLY THE OUTCOME THAT WE WANT. 
          SO WHILE THIS PEAK IS, IS AN IMPORTANT MILESTONE, I LIKE TO FOCUS MORE ON WHAT'S HAPPENING UNDERNEATH AND THE AMOUNT OF ENERGY THAT WE ARE SERVING, WHICH IS WHY I WANTED TO KIND OF SHOW HOW THAT HAS BEEN PROGRESSING OVER THE COURSE OF THIS LAST YEAR AS WELL. 
          THE PEAK DEMANDS THAT WE SEE, THEY TELL US HOW BIG THE SYSTEM HAS TO BE, THE ENERGY CONSUMPTION TELLS US HOW MUCH THAT SYSTEM IS BEING USED. 
          AND INCREASINGLY, WE'RE NOW SEEING, UM, GROWTH IN BOTH OF THOSE METRICS. 
          SO THIS GROWTH HIGHLIGHTS WHY THE FORECAST QUALITY AND THIS LARGE LOAD VERIFICATION PROCESS THAT WE'RE GOING THROUGH MATTER SO MUCH BECAUSE THE, WITH THE SYSTEM CHANGING AS QUICKLY AS IT IS, PLANNING BASED PRIMARILY ON HISTORICAL GROWTH PATTERNS IS BECOMING LESS AND LESS INDICATIVE OF WHAT WE EXPECT TO SEE IN THE FUTURE. 
          AND SO THIS FORECAST THAT WE'VE BEEN TALKING ABOUT, THE LOAD VERIFICATION, GETTING THAT RIGHT, THAT'S GONNA BE REALLY KEY IN ORDER TO BE ABLE TO HELP MANAGE THE OPERATIONS AS WE'RE MOVING FORWARD THROUGH A PERIOD OF TIME LIKE THIS. 
          ONE OF THE CONSEQUENCES OF SUSTAINED ENERGY GROWTH IS THAT THE DISTINCTION BETWEEN OUR PEAK SEASONS AND OUR SHOULDER SEASONS IS BECOMING MORE IMPORTANT TO WATCH CLOSELY. 
          WE STILL NEED THESE LOWER DEMAND PERIODS TO BE ABLE TO TAKE TRANSMISSION AND GENERATION FACILITIES OUT OF SERVICE FOR MAINTENANCE. 
          AND AS THE SYSTEM GROWS AND MORE HOURS CARRY HIGHER LOADS, THE OPERATING ROOM THAT'S AVAILABLE TO TAKE THESE OUTAGES CAN BECOME TIGHTER IN 2025. 
          LAST YEAR WE UPDATED THE RESOURCE PLANNED OUTAGE LIMIT METHODOLOGY IN SEVERAL WAYS. 
          TWO KEY ONES OF THEM BEING WE SWITCHED FROM A DETERMINISTIC HISTORICAL LOOKING TO A PROBABILISTIC FORWARD-LOOKING METHODOLOGY. 
          THAT WAS THE PRIMARY CHANGE WE MADE LAST YEAR. 
          AND THE SECOND WE ADJUSTED SO THAT FUTURE YEAR OUTAGE LIMITS NO LONGER DECLINED. 
          THIS SUMMER, WE MADE SOME CHANGES AND WE FACTORED IN ESRS INTO THE RESOURCE PLANNED OUTAGE LIMITS ENERGY STORAGE RESOURCES. 
          THE LOWER DASH LINE THAT YOU SEE ON THIS GRAPH, UH, REFLECTED THE, UH, RESOURCE PLANNED OUTAGE LIMIT FOR NON IN, UH, INVERTER BASED RESOURCES, THE THERMAL RESOURCES AND THEN THE THERMAL RESOURCES. 
          YOU CAN SEE THEY MAKE UP THE MAJORITY OF THIS DARK BLUE, UH, PLANNED OUTAGES, WHICH AS YOU CAN SEE CURRENTLY ARE A LITTLE BIT ABOVE WHAT THAT LIMIT IS. 
          AND THE REASON IS IS THAT THESE LIMITS CAN GET RECALCULATED EVERY MONTH BASED ON DECREASES IN ANY OF THE UNDERLYING INPUTS. 
          UH, AND THAT UPDATES THE CALCULATION CHANGE. 
          SO IT'S THAT PROBABILISTIC FORWARD LOOKING METHODOLOGY NOW BEING APPLIED ON A REGULAR BASIS. 
          THE DIFFERENCE BETWEEN THAT TOP DASH LINE AND THE LOWER DASH LINE ARE THE MEGAWATTS LIMIT FOR THE, UM, UH, INTERMITTENT RESOURCES OR THE RENEWABLE RESOURCES AND THE BATTERY STORAGE RESOURCES THAT ARE IN THERE NOW. 
          SO AS CONTINUED DEMAND GROWTH IS NARROWING THIS TRADITIONAL SHOULDER SEASON MAINTENANCE WINDOW, IT REINFORCES OUR NEED TO PLAN THE SYSTEM FOR BOTH HIGHER PEAKS AS WELL AS FOR INCREASED UTILIZATION THROUGHOUT THE YEAR. 
          WE HAVE JUST INITIATED THE VERIFICATION PROCESS FOR THE BIGGER 1 45 REQUIREMENTS. 
          WE ARE WORKING TO TRANSLATE AN UNPRECEDENTED PIPELINE OF PROSPECTIVE LARGE LOADS INTO A CREDIBLE PLANNING FORECAST. 
          IT'S CRITICAL THAT WE DON'T UNDER PLAN FOR REAL DEMAND THAT IS COMING, BUT WE ALSO DON'T WANNA BUILD ANY PLANNING ASSUMPTIONS AROUND LOAD THAT MAY NOT MATERIALIZE. 
          SO PR 1 45 IS GIVING US A MUCH MORE DISCIPLINED WAY IN ORDER TO ESTABLISH THAT FOUNDATION FOR A LOAD FORECAST GOING FORWARD. 
          THE VERIFICATION PROCESS THAT WE'RE GOING THROUGH IS GONNA ENABLE US TO GET THE LOAD ENTRY ASSUMPTIONS FOR BATCH ZERO RIGHT BEFORE THEY FLOW INTO THAT FIRST BATCH. 
          AND THEN AS THEY FROM THERE FLOWING INTO THE LONG-TERM LOAD FORECAST, THE CAPACITY AND DEMAND AND RESERVE REPORT, THE CDR REPORT, AND ULTIMATELY THE RELIABILITY ASSESSMENT THAT WE'RE GONNA BE DOING LATER THIS YEAR. 
          THESE ARE THE KEY REPORTS THAT CHRISTIE HAD MENTIONED YESTERDAY THAT ARE DEPENDENT ON THE OUTPUTS OF THIS BACK ZERO PROCESS. 
          AND WE'RE WELL ON OUR WAY IN THE VERIFICATION PROCESS TO MAKE SURE WE CAN GET TO THESE MILESTONES. 
          FROM A COMMUNICATIONS POINT OF VIEW, THE TEXANS SYSTEM, THE ADVANCED, THE ADVISORY AND NOTIFICATION SYSTEM THAT WE LAUNCHED SEVERAL YEARS AGO IS A, IS AN EXAMPLE OF OUR BROADER EVOLUTION IN OUR COMMUNICATIONS CAPABILITIES. 
          WE'RE INCREASINGLY TRYING TO DESIGN OUR COMMUNICATIONS AROUND THE AUDIENCE RATHER THAN EXPECTING THE AUDIENCE TO UNDERSTAND OUR TERMINOLOGY AND THE COMPLEXITIES WITHIN GRID OPERATIONS. 
          IF THERE WERE TO BE AN EMERGENCY, TEXANS 
          [00:25:01]
SHOULD NOT NEED TO UNDERSTAND WHAT AN EEA TWO MEANS. 
          WHAT THEY NEED TO UNDERSTAND IS WHAT'S HAPPENING, WHAT IT MEANS FOR THEM, AND WHAT WE'RE ASKING THEM TO TAKE ACTION ON. 
          IF THERE IS ANY ACTION TO TAKE. 
          WE'RE ALSO TRYING TO BECOME MUCH MORE MULTI-CHANNEL. 
          AND HOW WE COMMUNICATE THE TEXANS PLATFORM GIVES US INCREASINGLY TIMELY AND ACTIONABLE COMMUNICATIONS THROUGH EMAIL, AS WELL AS NOW TEXT AS WELL. 
          WE'VE, OF COURSE, HAVE OUR DASHBOARDS THAT PROVIDE REAL TIME TRANSPARENCY INTO WHAT'S HAPPENING ON THE SYSTEM. 
          AND AS I'LL TALK ABOUT IN A, IN OUR IN A MOMENT, OUR NEW PODCAST, THE ERCOT POWERCAST, GIVES US ANOTHER VEHICLE FOR DEEPER EDUCATION AND CONTEXT INTO HOW THE SYSTEM WORKS. 
          WE'RE REALLY WORKING TO TRY TO MAKE INFORMATION MORE UNDERSTANDABLE AND USEFUL FOR ALL AUDIENCES. 
          AND ULTIMATELY, THIS EFFORT IS ABOUT BUILDING TRUST. 
          WHEN CONDITIONS BECOME CHALLENGING, WE WANT TEXANS TO KNOW WHERE AUTHORITATIVE INFORMATION COMES FROM, UNDERSTAND WHAT IT IS WE'RE TELLING THEM, AND BE ABLE TO TRUST THAT INFORMATION AND THAT CREDIBILITY HAS TO BEGIN NOW, WELL IN ADVANCE OF ANY KIND OF A CHALLENGE IN THE SYSTEM. 
          SO 30 YEARS AGO, ACTUALLY ON SEPTEMBER 11TH, 1996, ERCOT BECAME AMERICA'S FIRST INDEPENDENT SYSTEM OPERATOR. 
          UH, THE PUBLIC UTILITY COMMISSION APPROVED THIS ACTION BACK IN THEIR MEETING ON SEPTEMBER 11TH, 96. 
          I DO WANNA POINT OUT WE HAVE BEEN OPERATING, UH, IN A GRID OPERATION ROLE FOR LONGER THAN THAT, UH, GOING BACK TO THE 1970S. 
          BUT 1996 IS WHEN WE FORMALLY CREATED THE CONSTRUCT OF BECOMING THE FIRST INDEPENDENT SYSTEM OPERATOR. 
          UH, IN THE US WE ACTUALLY HAVE FIVE EMPLOYEES WORKING HERE THAT HAVE BEEN HERE SINCE WE BECAME THE FIRST ISO IN THE COUNTRY. 
          WE'VE GOT COLLEEN FROSH, GREG GUNTHER, KEGEL LOW, ROBERT MATLOCK AND BOBBY WINKLER ALL STARTED THEIR CAREERS IN 1996 WHEN WE WERE A MUCH, MUCH SMALLER COMPANY. 
          A LOT HAS CHANGED OVER THESE YEARS, BUT THE HEART OF ERCOT WILL ALWAYS BE THE PEOPLE THAT HAVE SERVED IT AND SERVE IT TODAY. 
          AND WE THANK THEM FOR THEIR DEDICATION TO SERVING TEXANS THROUGHOUT THE DEVELOPMENT OF BOTH THE GRID AND THE WORKFORCE. 
          I WANNA THANK ALL OF OUR EMPLOYEES AND THE MARKET PARTICIPANTS. 
          I WANNA THANK THE PUBLIC UTILITY COMMISSION AND THE TEXAS LEGISLATURE FOR ALL OF THE WORK. 
          AS WE'VE EVOLVED THIS MARKET TO WHERE IT IS TODAY OVER THE LAST 30 YEARS, IT'S QUITE AN ACCOMPLISHMENT. 
          SO ON SEPTEMBER 23RD OF THIS MONTH, WE ARE GOING TO LAUNCH THE ERCOT POWERCAST. 
          THIS IS GONNA GIVE THE PUBLIC AN INSIDE LOOK ON WHAT IT TAKES TO RUN ONE OF THE MOST DYNAMIC AND COMPLEX GRIDS IN THE WORLD. 
          EACH MONTH, WE'LL HAVE INDUSTRY EXPERTS THAT WILL DISCUSS POLICIES AND ISSUES THAT FACE OUR GRID. 
          THERE'LL BE STRUCTURED IN 30 MINUTE MONTHLY VIDEOS AND AUDIO PODCASTS THAT FEATURE BOTH INTERNAL AND EXTERNAL GUESTS. 
          BOTH THE KIND OF TOPICS WE'LL COVER, WE'LL GIVE THE PUBLIC AN INSIDE LOOK ON THE ISSUES AND THE POLICIES AND THE DECISIONS THAT ARE SHAPING KEY ISSUES ON OUR GRID. 
          IT'S GONNA BE HOSTED BY GORDON DRAKE ERCOT, DIRECTOR OF MARKET DESIGN AND ANALYSIS. 
          WE ALSO HAVE MATT MORES ON DECK. 
          HE'S THE EXECUTIVE DIRECTOR OF STRATEGIC PROGRAMS AND DELIVERY. 
          AND DAVID ZEL, WHO'S THE DIRECTOR OF WEATHERIZATION AND INSPECTION, BOTH ON DECK IN THE HOST POOL TO HELP AND SUPPORT THESE PODCASTS. 
          UH, I WILL BE THE FIRST GUEST, UH, PREMIERING ON OUR EPISODE SEPTEMBER 23RD. 
          I, UM, IT HAS ALREADY BEEN, UH, TAPED AND IT IS, UH, I THINK GONNA BE AN INTERESTING AND, UH, HOPEFULLY HELPFUL DISCUSSION FOR THOSE WHO ARE INTERESTED IN SEEING IT. 
          YOU CAN GET TO IT ON ERCOT.COM, BUT YOU CAN ALSO GET TO IT ON POPULAR PODCAST CHANNELS, INCLUDING YOUTUBE AND SPOTIFY, APPLE PODCAST, AUDIBLE AND AMAZON MUSIC. 
          SO THAT HAS BEEN A TREMENDOUS, UH, EFFORT IN THE MAKING. 
          AND AS A RESULT OF THAT, I WOULD LIKE TO CLOSE OUT WITH, AS I ALWAYS DO, WITH AN EMPLOYEE RECOGNITION THAT FOCUSES ON THOSE GROUPS AND EMPLOYEES THAT REALLY MADE A SIGNIFICANT EFFORT IN PULLING THIS PODCAST TOGETHER. 
          IT WAS A VERY CROSS-FUNCTIONAL TEAM TO ENABLE IT. 
          UM, WE HAD EMPLOYEES COLLABORATING ACROSS FROM CREATING THE STRATEGY, THE BRAND, THE CONTENT, AND THE PRODUCTION CAPABILITIES. 
          IT INCLUDED TRANSFORMING AN EXISTING SPACE THAT WE HAVE IN OUR FACILITY INTO A VERY PROFESSIONAL AND MULTIPURPOSE COMMUNICATION STUDIO. 
          AND THE TEAM REALLY DEMONSTRATED INNOVATION AND RESOURCEFULNESS, BEING ABLE TO DELIVER THIS ON BUDGET WHILE BUILDING CAPABILITIES THAT ARE NOT ONLY GONNA SUPPORT THE PODCAST, BUT ALSO THE ABILITY TO DO VIDEOS, TOWN HALLS, COMPANY-WIDE LIVE MEETINGS, AS WELL AS OTHER COMMUNICATION NEEDS, UH, THROUGHOUT THE YEAR. 
          SO A VERY BIG THANK YOU TO ALL THE EMPLOYEES INVOLVED IN, UH, GETTING THIS LAUNCHED. 
          AND WITH THAT, I CONCLUDE MY COMMENTS, CHAIR FLORES, AND WELCOME ANY QUESTIONS IF ANYONE HAS THEM. 
          THANK YOU, PABLO. 
          ANY QUESTIONS? OKAY. 
          ALRIGHT. 
          14 MILLION 
          [00:30:01]
MEGAWATT HOURS. 
          MORE FOR THIS. 
          14 MILLION MORE JUST IN THE FIRST HALF OF THIS YEAR OVER LAST YEAR. 
          4% GROWTH IN ONE YEAR. 
          YEAH, EXACTLY. 
          THANK YOU. 
          ALRIGHT, NEXT WE'RE 
          [14. Batch Zero Update]
GONNA HAVE, UH, BATCH ZERO UPDATE AGENDA ITEM 14, WHICH IS PRESENTED BY JEFF BILLOW. 
          AND, UH, DAN AND KEITH WILL BE ON DECK. 
          ALL RIGHT, GOOD MORNING. 
          A LOT HAS HAPPENED WITH BATCH ZERO SINCE THE JUNE MOR JUNE BOARD MEETING. 
          WE'RE GONNA TRY TO GET YOU CAUGHT UP ON, UH, EVERYTHING. 
          SO FOLLOWING THE BOARD'S ENDORSEMENT OF PICKER 1 45 AND NPR 1325, UH, AT THE JUNE BOARD MEETING, THE, UH, PUC APPROVED, UH, BOTH OF THOSE REVISION REQUESTS, WHICH WITH AN EFFECTIVE DATE OF JULY 11TH, UH, LEADING UP TO THE, UH, THAT JULY 10TH, JULY 11TH CUTOVER, UH, ERCOT HELD REGULAR, UH, BATCH READINESS MEETINGS TO GET STAKEHOLDERS PREPARED FOR THE, UH, VARIOUS SUBMISSIONS AND, AND THINGS THAT THEY NEEDED TO, UH, DO, UH, GOING, GOING INTO THAT DEADLINE. 
          UH, SO THAT THAT DEADLINE WAS, UH, MIDNIGHT, UH, JULY 10TH, ACTUALLY, TECHNICALLY THE MORNING OF JULY 11TH IS WHEN THE OLD PROCESS ENDED. 
          AND SO WHAT THAT MEANS IS THAT THE OLD INDIVIDUAL STUDY PROCESS WHERE LOADS WERE STUDIED INDIVIDUALLY BY THE TSPS, THAT THAT PROCESS WAS ENDING ON, UH, JULY 10TH. 
          GOING FORWARD, IF A NEW LARGE LOAD WANTS TO INTERCONNECT, THEY WILL NEED TO GO THROUGH THE BATCH PROCESS. 
          UH, AND SO WHAT THAT MEANT THEN IS, IS, UH, FOR LOADS THAT WANTED TO GET INTO BATCH ZERO, THEY NEEDED TO COMPLETE CERTAIN, CERTAIN STUDIES OR THE TSPS NEEDED TO COMPLETE CERTAIN STUDIES TO QUALIFY THEM TO BE IN BATCH ZERO. 
          UH, SO LEADING UP TO THAT JULY 10TH DEADLINE, THOSE, THOSE WEEKS LEADING UP TO THAT, UH, THE TSPS REALLY, UH, WORKED THEIR TAILS OFF AND GOT A TREMENDOUS AMOUNT OF STUDIES COMPLETED OVER THOSE LAST FEW WEEKS. 
          UH, WHICH ALSO MEANT THAT OUR TEAM HAD TO REVIEW THOSE STUDIES TO MAKE SURE THAT THOSE STUDIES MET ALL OF THE REQUIREMENTS THAT ERCOT HAD TO MAKE SURE THAT, UH, IF A STUDY SHOWED THAT A LOAD COULD, UH, BE RELIABLY SERVED, AND WE NEEDED TO, TO CHECK AND MAKE SURE THAT, THAT WE, UH, EVERYTHING THAT WE NEEDED TO MAKE SURE THAT LOAD COULD BE SERVED WAS INCLUDED IN THAT STUDY. 
          UH, SO OUR, OUR TEAM WORKED UNTIL MIDNIGHT ON JULY 10TH TO APPROVE AS MANY STUDIES AS WE COULD. 
          UH, AND YOU'LL SEE IN THE NUMBERS I SHARED IN A LITTLE BIT THAT, UH, THE THIS NUMBERS ARE, ARE QUITE LARGE. 
          UH, THE PROJECTS THAT WERE INCLUDED IN, UM, ARE ELIGIBLE FOR INCLUSION IN BATCH ZERO. 
          UH, SO, SO THAT, THAT STUDY PROCESS ENDED ON JULY 10TH, AND THEN THE TSPS HAD TWO WEEKS TO, UH, SUBMIT A, UH, A PACKAGE TO ERCOT THAT INCLUDED ALL THE INFORMATION THAT WE NEEDED TO START BATCH ZERO AND TO MAKE THOSE CLASSIFICATIONS, UH, REGARDING BASE LOAD STUDY LOAD OR, OR EXCLUDED FOR, FOR BATCH ZERO. 
          UH, SO THAT, THAT SUBMISSION PACKAGE INCLUDED THINGS LIKE THE, UH, RAMP SCHEDULES FOR THE LOADS, AS WELL AS ATTESTATIONS FOR, UH, CERTAIN REQUIREMENTS IN, UH, IN THE BIGGER 1 45 RULES. 
          UH, SO THOSE REQUIREMENTS ARE THINGS LIKE SITE CONTROL. 
          UH, SO THEY NEEDED TO ATTEST THAT THEY HAD, UH, SITE CONTROL, WHICH COULD BE A, A LEASE OR, UH, OR OWNERSHIP OF THE SITE. 
          UH, THERE WERE CERTAIN DE DEPENDING ON THE ELIGIBILITY PATHWAY, THERE WERE CERTAIN OTHER REQUIREMENTS THAT THEY MAY NEED TO ATTEST THAT THEY HAD PURCHASED LONG LEAD TIME EQUIPMENT FOR THAT FACILITY, UH, AND, AND SO ON. 
          SO, I'M GONNA PUT A PIN THERE, AND WE'LL COME BACK TO THAT IN JUST A MINUTE. 
          SO AS I'M, I'M SURE EVERYONE IS AWARE, ON AUGUST 3RD, GOVERNOR ABBOTT SENT A LETTER TO ERCOT AND THE COMMISSION, UH, THAT INCLUDED, AMONG OTHER THINGS, A DIRECTIVE TO COMPLETE A VERIFICATION AND AUDIT PROCESS OF ALL OF THE DATA CENTERS BEFORE MOVING FORWARD IN THE INTERCONNECTION PROCESS FOR THOSE. 
          UH, SO BASED ON THAT LETTER, OR CUT TO SEVERAL IMMEDIATE STEPS TO ADDRESS THAT. 
          SO, UH, LATER THAT AFTERNOON, WE ISSUED A MARKET NOTICE PAUSING THE BACTERIA STUDY PROCESS. 
          UH, WE ALSO PAUSED APPROVAL TO ENERGIZE ANY NEW DATA CENTERS, UH, THAT, UH, HAD NOT ALREADY RECEIVED THAT APPROVAL TO ENERGIZE FROM ERCOT. 
          SO, SO BEFORE A NEW LARGE LOAD IS ALLOWED TO START CONSUMING POWER FROM THE GRID, THEY NEED TO REQUEST, UM, OR THE TSP NEEDS TO REQUEST APPROVAL TO ENERGIZE AND ERCOT GRANTS THAT, UH, THAT APPROVAL TO ENERGIZE. 
          SO WE HAVE PAUSED THAT, UH, THAT GRANTING OF THAT APPROVAL TO ENERGIZE FOR ALL NEW DATA CENTERS, UH, OR AT LEAST LARGE LOAD DATA CENTERS, UH, AND THEN, UH, BE BECAUSE OF THE, UH, THE, THIS AUDIT PROCESS THAT WE'RE GONNA GO THROUGH, THIS VERIFICATION AUDIT PROCESS, UH, THERE ARE CERTAIN ASPECTS 
          [00:35:01]
OF PI 1 45 THAT THE REQUIREMENTS THAT WE HAVE THAT WE WERE NOT GOING TO BE ABLE TO MEET THOSE REQUIREMENTS BECAUSE WE, WE ARE NOW CHANGING THAT PROCESS A BIT, UH, PUTTING, PUTTING SOME THINGS EARLIER IN THE PROCESS. 
          AND PABLO BRIEFLY MENTIONED THIS AS WELL. 
          UH, AND SO WE, ON AUGUST 10TH, SUBMITTED A, UH, UH, SEVERAL GOOD CAUSE EXCEPTION REQUEST TO THE, UH, COMMISSION, WHICH THE COMMISSION SUBSEQUENTLY GRANTED THOSE GOOD CAUSE EXCEPTIONS ON AUGUST 20TH. 
          UH, AND THEN WE LAID OUT A PLAN FOR HOW WE WERE GOING TO MEET THE, UH, THE ASKS IN, IN, UH, IN GOVERNOR AMIT'S LETTER. 
          SO, UM, THE, THE FIRST TWO ITEMS, UH, THAT, THAT WE NEEDED TO DO WAS, UH, ESSENTIALLY TWO DIFFERENT RFIS. 
          UH, SO THE FIRST RFI IS THAT VERIFICATION AND AUDIT. 
          SO I MENTIONED THAT SUBMISSION PACKAGE THAT TSPS GAVE TO ERCOT ON JULY 24TH THAT INCLUDED A NUMBER OF ATTESTATIONS. 
          THIS VERIFICATION AND AUDIT PROCESS THAT WE WILL BE UNDERTAKING IS WE ARE NOW ASKING, AND WE LAST WEEK SENT OUT RFIS TO GET THE INFORMATION NEEDED TO CHECK WHETHER THOSE ATTESTATIONS, UH, WHETHER THEY, UH, THE ENTITIES MET THE REQUIREMENTS THAT THEY ATTESTED TO. 
          UH, SO AS AN EXAMPLE, IF A, UH, LARGE LOAD IN THEIR ATTESTATION, THEY, THEY ATTESTED THAT THEY HAD A LEASE FOR THE PROPERTY WHERE THEY'RE DEVELOPING THEIR PROJECT, THEN WE ARE, UH, HAVE NOW SENT OUT AN RFI AND WE ARE REQUESTING THE INFORMATION FOR THEM TO SHOW US THEIR LEASE DOCUMENTS, SHOW US THAT THEY ACTUALLY HAVE THAT LEASE FOR THAT PROPERTY. 
          UH, OR ANOTHER EXAMPLE IS IF, UH, I MENTIONED THE, UH, REQUIREMENT THAT, UH, CERTAIN LOADS NEED TO SHOW THAT THEY HAVE PURCHASED THEIR LONG LEAD TIME EQUIPMENT, WE ARE REQUIRING THEM TO SHOW US THEIR HOMEWORK, SHOW US THAT YOU HAVE PURCHASED THAT LONG LEAD TIME EQUIPMENT, SHOW US THAT PURCHASE ORDERS. 
          UH, SO THAT IS THAT VERIFICATION AND AUDIT PROCESS. 
          UH, SO WE, WE SENT OUT THE RFIS LAST WEEK ON THAT. 
          THE ENTITIES HAVE 10 BUSINESS DAYS TO RESPOND BACK TO US WITH THAT INFORMATION. 
          UH, AND WE WILL THEN BE REVIEWING THAT, AND WE MAY FOLLOW UP WITH SUBSEQUENT RFIS IF WE NEED ADDITIONAL INFORMATION. 
          UH, AND WE WILL PROVIDE AT, AT THE END OF THIS PROCESS, UH, ON JULY, OR SORRY, ON DECEMBER 10TH, WE WILL PROVIDE A, UH, UM, A REPORT SUMMARY REPORT OF, OF WHAT WE FOUND, UH, TO THE COMMISSION. 
          UH, SO THAT'S, THAT, THAT'S THE, THE FIRST ONE. 
          AND ONE OTHER NOTE ON THAT ONE IS, UM, IF WE FIND THROUGH THAT VERIFICATION AND AUDIT PROCESS THAT THE ENTITY CANNOT PROVE THAT WHAT THEY ATTESTED TO IS TRUE, THEN WE WILL REMOVE THEM FROM BATCH ZERO. 
          UH, SO THAT'S THE, THE FIRST RFI, UH, THERE'S A SECOND RFI, WHICH WE SENT OUT YESTERDAY, UH, WHICH WE ARE CALLING THE COMMUNITY IMPACT RFI. 
          AND THIS IS, UH, SO, SO THE FIRST RFI IS FOR ALL LARGE LOADS IN BATCH ZERO. 
          THE SECOND RFI IS FOR ALL, UH, MEDIUM AND LARGE LOAD DATA CENTERS. 
          UH, AND THAT IS, UH, ESSENTIALLY IF YOU LOOK AT THE, UH, GOVERNOR'S, UH, LETTER TO US, HE HAD A NUMBER OF ITEMS IN WHICH HE ASKED ERCOT TO SEND, UH, OR TO GATHER CERTAIN INFORMATION, UH, ABOUT THESE, UH, DATA CENTERS, THINGS LIKE THEIR WATER USAGE, UH, IF, IF THEY ARE RECEIVING LOCAL, UH, TAX, UH, CREDITS AND, AND THOSE SORTS OF THINGS. 
          UH, SO, UH, THIS COMMUNITY IMPACT RFI IS A, UH, RFI WHERE WE ARE ASKING, UM, I THINK IT'S 130 QUESTIONS THAT WE HAVE ASKED TO THE, UM, UH, TO THE TSPS AND DSPS TO GATHER FROM THEIR INTERCONNECTING DATA CENTER CUSTOMERS, UH, TO PROVIDE THIS INFORMATION BACK TO ERCOT. 
          AND SO IN THIS ONE, AGAIN, WE ARE GOING TO GATHER THAT INFORMATION. 
          AND ON DECEMBER 10TH, WE WILL PROVIDE A SUMMARY REPORT TO THE COMMISSION. 
          SO TWO, TWO SEPARATE RFIS THAT AT THE END WILL RESULT IN TWO DIFFERENT REPORTS THAT WE'LL SUBMIT TO THE COMMISSION IN DECEMBER. 
          I ALREADY MENTIONED THE, UH, THE THIRD ITEM IS, AGAIN, WE'VE PAUSED THAT, UH, ENERGIZATION GRANTING APPROVAL TO ENERGIZE FOR ANY NEW, UH, UH, LARGE LOAD DATA CENTERS ON THE SYSTEM. 
          UM, AND THEN THE FOURTH ITEM IS, UH, IS ORIGINALLY IN PICKER 1 45. 
          UH, ERCOT WAS GOING TO, ON AUGUST 7TH, LET THE TSPS KNOW THE STATUS OF EVERY LARGE LOAD THAT WAS REQUESTING TO BE IN BATCH ZERO. 
          AND THAT STATUS COULD BE A BASE LOAD, MEANING THAT THEIR STUDIES ARE COMPLETE. 
          THERE'S NO MORE, UH, WORK THAT NEEDED TO BE COM UH, COMPLETED THAT THOSE LOADS CAN MOVE FORWARD, UH, STUDIED LOAD, WHICH MEANS WE WERE GOING TO STUDY TO SEE HOW MANY MEGAWATTS THE GRID COULD SUPPORT OF THOSE REQUESTS. 
          AND, AND, AND, UH, AND WHEN, UH, OR EXCLUDED IS THE THIRD CATEGORY. 
          SO LOADS THAT DID NOT QUALIFY TO BE IN BATCH ZERO. 
          SO ORIGINALLY WE WERE GOING TO SEND THE FINAL CLASSIFICATION ON AUGUST 7TH, UH, BECAUSE OF THIS VERIFICATION PROCESS, WE HAVE, UH, CHANGED THAT. 
          AND, UH, ON 
          [00:40:01]
SEPTEMBER 3RD, WE PROVIDED A CONDITIONAL CLASSIFICATION. 
          I'LL EXPLAIN A LITTLE BIT MORE WHAT THAT MEANS IN A MINUTE. 
          UH, BUT THAT CONDITIONAL, UH, CLASSIFICATION, UH, ESSENTIALLY IS CONDITIONAL ON A NUMBER OF ITEMS. BUT WE PROVIDED THAT ON, UH, SEPTEMBER 3RD. 
          AND THEN, UH, FINALLY, UH, BECAUSE WE ARE DOING THIS VERIFICATION AUDIT PROCESS UPFRONT, WHERE WE HAD ORIGINALLY PLANNED TO DO IT IN PARALLEL WITH THE BATCH ZERO STUDY, THIS WILL HAVE AN IMPACT ON THE BATCH ZERO STUDY TIMING. 
          UH, THE, THE ORIGINALLY WE WERE, UH, PLANNING TO HAVE THE STUDY COMPLETE ON APRIL 7TH, UH, OR SORRY, APRIL 9TH OF NEXT YEAR. 
          UH, THERE WILL BE A DELAY. 
          THE TEAM, RIGHT NOW, THE STUDY TEAM IS LOOKING AT, UH, WHAT THAT DELAY WILL BE, HOW, HOW LONG THAT WILL BE. 
          AND, AND SO THAT'S, UH, UH, A BIT TBD AT THIS POINT. 
          SO, SO AGAIN, THAT CONDITIONAL CLASSIFICATION. 
          SO IT IS CONDITIONAL ON, UH, SEVERAL THINGS, UH, MOST NOTABLY IS CONDITIONAL ON THE COMPLETION OF THE VERIFICATION AND AUDIT. 
          UH, SO, SO, UH, LAST WEEK WE, WE TOLD THE TSPS WHETHER LOADS WERE BASE LOAD, STUDIED LOAD, OR EXCLUDED. 
          UH, FOR LOADS THAT ARE BASE LOAD OR STUDY LOAD, AGAIN, THAT IS A CONDITIONAL CLASSIFICATION CONDITIONAL ON THEM PASSING THAT VERIFICATION AND AUDIT PROCESS. 
          UH, THERE'S A NU NUMBER OF OTHER, UH, CONDITIONS THERE. 
          UH, SOME OF THE LOADS HAVE NOT, UH, COMPLETED THEIR, UM, UH, DYNAMIC MODEL GETTING, GETTING THAT, UH, ANY DEFICIENCIES IN THEIR DYNAMIC MODEL CURED. 
          UM, AND, AND SO THAT IS ANOTHER CONDITION FOR, FOR SOME OF THOSE LOADS. 
          UM, WHEN WE SENT OUT THAT CONDITIONAL CLASSIFICATION, WE ALSO LET LOADS THAT WERE EXCLUDED. 
          WE ALSO TOLD THE TSPS WHY THOSE LOADS WERE EXCLUDED. 
          UM, AND THEN, UH, THERE IS, UM, BASED ON THAT CONDITIONAL CLASSIFICATION, THERE ARE TWO DIFFERENT DISPUTE PROCESSES THAT THE TSPS AND LOADS CAN USE IF THEY DISAGREE WITH ERCOT CONDITIONAL CLASSIFICATION. 
          I'M GONNA START WITH THE, THE SECOND ONE FIRST, AND THEN I'LL GO TO THE FIRST ONE. 
          SO, UH, FOR LOADS THAT, UH, THOUGHT THAT THEY WERE BASE LOAD, UH, SO THEY SUBMITTED THEIR INFORMATION AS IF, UH, THEY WERE BASE LOAD BECAUSE THEY THOUGHT THAT THEY WERE BASE LOAD. 
          SOME OF THOSE, UH, WERE CAUGHT LOOKED AT. 
          AND AS WE LOOKED, UH, PRIMARILY AT THE STUDIES, UH, ARE CAUGHT BELIEFS THAT THOSE LOADS DO NOT QUALIFY TO BE BASE LOADS, AND THEY SHOULD BE STUDIED LOAD. 
          UH, THERE WERE 36 OF THOSE LOADS THAT CAME IN THAT THEY THOUGHT THAT THEY WERE BASE LOAD, BUT ERCOT LOOKED AT THOSE AND SAID, YOU'RE, YOU'RE REALLY STUDIED LOAD, UH, PICKER 1 45 DEFINED A VERY, UM, UH, NARROW PROCESS WHERE, UH, IF THEY, IF THOSE, ANY OF THOSE 36 LOADS DISAGREE WITH, UH, THE WAY THAT ERCOT DID THAT CLAR THAT CLASSIFICATION, UH, IF, IF WE MISSED SOME FACTS SOMEWHERE ALONG THE WAY, THEN UM, THEY CAN, THERE, THERE'S A DEFINED DISPUTE PROCESS FOR THAT, THAT RECLASSIFICATION. 
          AND MOST OF THOSE 36 LOADS HAVE ACTUALLY REQUESTED, UH, THE, TO GO THROUGH THIS DISPUTE PROCESS. 
          UM, AND THEN WE HAD, UH, 373 LOADS THAT WERE EXCLUDED. 
          UH, THERE IS A SEPARATE, UH, UH, DISPUTE PROCESS. 
          IT'S, IT'S THE NORMAL, UH, ERCOT PROTOCOL SECTION 20 A DR PROCESS THAT, THAT, UM, THAT, THAT COULD BE USED FOR VARIOUS DISPUTES. 
          UH, BUT, UH, SEVERAL LOADS THAT WERE EXCLUDED HAVE, UM, SUBMITTED ADRS TO ERCOT TO DISPUTE THEIR EXCLUSION FROM BATCH ZERO. 
          UH, SO TWO, TWO DIFFERENT DISPUTE PROCESSES. 
          UH, AND SO I'M, I'M GONNA SHARE IN, IN JUST A MINUTE THE, UM, THE, THE NUMBERS SO THAT, UH, JUST THE DISCLAIMER ON THOSE NUMBERS IS THAT THOSE NUMBERS COULD CHANGE DEPENDING ON THE OUTCOME OF, UH, EITHER OF THOSE TWO DISPUTE PROCESSES. 
          UH, SO I'M, I'M GOING TO, UH, DIVE A LITTLE BIT, JUST A LITTLE BIT INTO THE DETAILS ON THE NUMBERS FOR BATCH ZERO. 
          UH, SO THE, THESE ARE THE MEGAWATTS OF PROJECTS THAT HAVE, UH, QUALIFIED TO BE INCLUDED IN, UH, BATCH ZERO. 
          UH, SO I'M GONNA START WITH THE, UH, THE BASE LOAD. 
          SO WHEN WE, IN, IN PIER 1 45, WHEN WE LAID OUT, UM, THE, UH, THE, THE, HOW WE WERE GONNA QUALIFY LOADS AND, AND HOW WE'RE GONNA CLASSIFY LOADS, UM, THE, WE, UH, INCLUDED IN WHAT WE CALL BASE. 
          AGAIN, BASE LOADS ARE THOSE LOADS THAT, THAT THEY HAVE ALREADY GONE THROUGH, THAT THEY HAVE COMPLETED THE, ANY PREVIOUS STUDY PROCESS. 
          AND THOSE LOADS ARE CONSIDERED TO BE, BE, UH, UH, JUST THAT THEY'RE INCLUDED. 
          WE'RE, WE'RE NOT RESTUDYING THE MEGAWATTS FOR THOSE PROJECTS. 
          SO THOSE PROJECTS CAN PROCEED WITH, UH, BUILDING THEIR, UH, THEIR PROJECTS AND, AND CONNECTING TO THE GRID. 
          UH, SO WHEN WE DID THAT, WE INCLUDED LOADS THAT HAVE ALREADY BEEN CONNECTED TO THE SYSTEM. 
          AND IN SOME CASES, SOME OF THESE LOADS HAVE BEEN, UH, YOU KNOW, MAY MAYBE A, A PETROCHEMICAL FACILITY OR REFINERY HAVE BEEN INCLUDED ON THE GRID, UH, FOR MANY YEARS NOW. 
          AND, AND SO THAT PINK BAR, OR THOSE LOADS THAT HAVE 
          [00:45:01]
BEEN, UM, ENTER, WERE ENERGIZED BEFORE MARCH OF 2022. 
          UH, SO AGAIN, SOME OF THOSE HAVE BEEN THERE FOR DECADES. 
          SOME OF THOSE MAYBE WERE CRYPTO MINING FACILITIES THAT CAME IN IN 2021. 
          AND, AND YOU'LL SEE THAT THEY STILL HAVE A LITTLE BIT OF RAMP TO GO YET. 
          UM, AND, AND SO THOSE ARE LOADS THAT WERE, UH, ARE ALREADY ENERGIZED IN THE SYSTEM BEFORE MARCH OF 2022. 
          SO THESE ARE, YOU KNOW, PRIMARILY EXISTING LOADS. 
          UM, WHY, WHY MARCH OF 22, 20 22? THAT IS THE POINT IN WHICH ERCOT STARTED THE INTERIM LARGELY INTERCONNECTION PROCESS. 
          SO PRIOR TO MARCH OF 2022, ERCOT DID NOT HAVE A FORMAL LARGE LOAD INTERCONNECTION PROCESS. 
          WE STARTED THAT INTERIM PROCESS IN MARCH OF 2022. 
          UM, AND THEN THE, THE NEXT BAR IS THOSE LOADS THAT WERE ENERGIZED. 
          SO THEY'RE EXISTING ON THE SYSTEM, THEY'RE ENERGIZED LOADS, UH, BUT THEY ENERGIZED AFTER WE STARTED THAT INTERIM PROCESS IN MARCH OF 2022. 
          UH, AND SO THAT'S BY 2032, THAT'S 13 GIGAWATTS. 
          UH, OF THAT 13 GIGAWATTS, ABOUT NINE GIGAWATTS WE HAVE ALREADY APPROVED TO ENERGIZE. 
          AND AT ANY GIVEN TIME, WE'VE SEEN ABOUT FOUR GIGAWATTS OF THAT NINE THAT'S APPROVED, ACTUALLY CONSUMING ON THE SYSTEM. 
          UH, AND SO MOST OF THAT LOAD STILL HAS A WAY TO GO TO RAMP, UH, THAT IT'S, UH, THERE'S FOUR, LIKE I SAID, FOUR GIGAWATTS THAT'S ALREADY CONSUMING ON THE GRID, BUT MOST OF THAT HAS A WAY TO RAMP. 
          AND THEN THE OTHER FIVE CATEGORIES ARE VARIOUS, FIVE CATEGORIES OF BASE LOAD ARE VARIOUS CATEGORIES OF, UH, PROJECT MATURITY, UH, AND, AND ENTRY PATH IN, INTO, UH, BATCH ZERO. 
          UH, WON'T GO INTO DE DETAILS ON ALL OF THOSE, UH, BUT IN SOME, ALL OF THOSE LOADS, INCLUDING THE EXISTING LOAD, EXISTING LARGE LOADS ON THE SYSTEM SUM 2 66 0.4 GIGAWATTS, THAT'S 204 DIFFERENT LARGE LOADS THAT WERE, UH, INCLUDED AS BASE LOAD. 
          AND, AND THEN ON STUDIED LOAD. 
          IF YOU REMEMBER, UH, WHEN WE WENT THROUGH THE BACHELOR PROCESS, UH, WE DEFINED A, UH, FLEXIBLE LOAD OPTION, WHICH WE CALLED THE PCLR, UM, UH, UH, THE PROVISIONAL, UH, CLRS. 
          UH, SO THAT, THAT'S A FLEXIBLE LOAD OPTION. 
          UH, WE HAD 11 PROJECTS THAT CAME INTO BATCH ZERO, UH, UH, ELECTING THAT PCLR, UM, DESIGNATION. 
          UM, AND SO THERE'S SUM UP TO, UH, ABOUT EIGHT AND A HALF GIGAWATTS. 
          AND THEN WE ALSO HAD A-B-Y-O-G OPTION, A BRING YOUR OWN GENERATION. 
          THIS IS BRING YOUR OWN NEW GENERATION OPTION, WHICH WAS THE WITHDRAWAL LIMITED PRIVATE USE NETWORK OPTION. 
          UH, WE HAD ANOTHER 11 PROJECTS THAT ELECTED TO ENTER INTO BATCH ZERO WITH THAT, THAT W PUN, UH, FOR ABOUT NINE AND A HALF GIGAWATTS. 
          AND I'VE GOT A LITTLE BIT MORE DETAILS, A, A BREAKDOWN IN A COUPLE OF SLIDES ON THOSE. 
          UM, THE, THE REMAINING 107, UH, OR SO GIGAWATTS OF STUDY LOAD, THOSE ARE, UH, WE'RE CALLING FIRM, WHICH IN THIS CONTEXT JUST MEANS THAT THEY DID NOT COME IN AS EITHER PCLR OR WL PUN. 
          UM, AND, AND THEN HERE'S JUST A, A, UH, COUPLE OF MAPS TO SHOW WHERE THE, THE BASE LOAD IS, UH, LOOKING AT THE 2032 NUMBERS, WHERE, WHERE'S THE BASE LOAD AND WHERE'S THE STUDY LOAD? UH, I THINK THE SHORT ANSWER IS IT'S, IT'S EVERYWHERE THAT THERE'S INTEREST THROUGHOUT THE STATE, UM, IN DEVELOPING NEW LARGE LOAD PROJECTS. 
          AND AGAIN, THE DETAILS ON THE, UH, THE WL POND PROJECTS. 
          UM, SO WE HAD, YOU KNOW, AGAIN, 11 PROJECTS, UH, REPRESENTING ABOUT NINE AND A HALF GIGAWATTS OF, UH, LARGE LOADS, UH, THAT ARE BRINGING ABOUT 15.4 GIGAWATTS OF GENERATION WITH THEM. 
          SO THEY, SO THEY ARE, UM, IT, IT IS A LOAD THAT IS CO-LOCATING WITH NEW GENERATION. 
          UH, I SHOULD NOTE HERE THAT THIS IS NOT, THIS IS NOT REPRESENT ALL OF THE LOADS THAT ARE CO-LOCATING. 
          THERE ARE SOME LOADS THAT ARE CO-LOCATING. 
          THEY'RE JUST CHOOSING NOT TO USE THE, UH, WL PUN, UH, PATHWAY. 
          UM, UH, BUT, BUT THEY'RE CO-LOCATING IN, IN THIS CASE, THEY'RE BRINGING NEW GENERATION AND THEY'RE USING THAT WL PUN CONSTRUCT. 
          UH, AS YOU CAN SEE, MOST OF THAT IS GAS. 
          THERE IS SOME, UH, SOLAR, WIND AND BATTERY, BUT IT'S, IT'S MOSTLY GAS THAT THEY'RE, UH, BRINGING WITH THEM. 
          UH, SO WITH THAT, I WILL PAUSE AND, UH, SEE IF THERE ARE ANY QUESTIONS FOR ME, PEGGY? YEAH. 
          ON THE, ON THE SLIDE THAT'S ON THE SCREEN, UH, DO YOU HAVE A FEEL FOR THE NUMBER OF DATA CENTERS THAT ARE THE, OR THE GIGAWATTS OF THE DATA CENTERS THAT ARE PROPOSING BYLG, THAT ARE, HAVE NOT ELECTED THE, THIS PROCESS, THE WL PIN? SO THE, THE OTHER, THEY'RE, THEY'RE CO-LOCATED, BUT THEY'RE NOT USING THE W ALL POND, RIGHT? YEAH, IT'S, UM, I, I CAN GET THAT NUMBER. 
          I, I DON'T HAVE THAT HANDY. 
          UM, BUT I CAN GET, I GET THAT NUMBER FOR YOU, GET A BALLPARK, BECAUSE THAT, YEAH, IT'S, IT'S NOT VERY MANY IS LOW. 
          MOST OF THAT ARE COMING WITH, THAT ARE PLANNING TO BE CO-LOCATED OR ELECTING TO USE THE, THE W ALL POND. 
          AND, AND THE REASON THAT THEY WANT TO DO THAT IS BECAUSE THEY ESSENTIALLY 
          [00:50:01]
GET TRANSMISSION CREDIT. 
          SO THEY'RE ABLE TO ALLOCATE, GET, ALLOCATED MORE MEGAWATTS, UH, BY USING THE WL PUN CONSTRUCT. 
          THERE, THERE MAY BE A, A FEW PROJECTS THAT THEY'RE NOT VERY MANY, THAT FOR WHATEVER REASON, YOU KNOW, THIS WAS NOT, UM, NOT, NOT PART OF THEIR BUSINESS PLAN TO, TO USE THE W PUN CONSTRUCT. 
          AND, AND SO THEY ELECTED NOT TO DO THAT, BUT MAJORITY THAT ARE COMING IN ARE, ARE USING, UH, W PUN CONSTRUCT. 
          THANK YOU. 
          I'LL ASK A QUESTION. 
          YEP. 
          JULIE, THANKS JEFF. 
          UH, WE, WE KNOW THESE PROJECTS, YOU KNOW, UM, GET IN THE QUEUE FOR INTERCONNECTION, BUT THEY DON'T ALL ONCE APPROVED ENERGIZE, UH, IN ANY SORT OF LINEAR FASHION. 
          WILL YOU BE TRACKING, UH, THE COMPUTE LOAD SEPARATE FROM THE TOTAL LOAD SO WE CAN SEE THE ONGOING INTERCONNECTION RAMP? YES. 
          YEAH, WE'LL, WE'LL HAVE THAT INFORMATION AND, UH, I'LL, I'LL TRY TO PROVIDE THAT IN, UH, FUTURE BOARD UPDATES. 
          JEFF, THANKS FOR THE DETAILED AND CLEAR PRESENTATION ON AN IMPORTANT TOPIC. 
          UM, ONE, ONE OF THE THINGS I'M CURIOUS ABOUT IS FEEDBACK THAT WE'VE RECEIVED FROM STAKEHOLDERS, IF YOU COULD PROVIDE SOME COLOR AND ANY THOUGHTS ON THINGS THAT WE MIGHT, UM, CHANGE IN OUR PROCESS GOING FORWARD? YEAH, I, I THINK, UM, A COUPLE THINGS STAND OUT IN MY MIND. 
          UM, I'VE, I'VE HEARD, UH, ACTUALLY JUST HEARD IT FROM, UH, SOMEBODY THIS MORNING HEARD IT MULTIPLE TIMES. 
          UH, NOBODY LIKED, UH, HOW BACHELOR IT TURNED OUT, BUT EVERYBODY THOUGHT IT WAS PROBABLY THE BEST THING THAT WE COULD DO IN, IN THE SHORT AMOUNT OF TIME THAT, THAT WE HAD. 
          UM, I, I THINK THAT THERE ARE A NUMBER OF IMPROVEMENTS THAT WE ARE GOING TO BE PURSUING. 
          UH, PART OF THAT, UH, CHRISTIE COVERED IN, IN HER, UH, PRESENTATION YESTERDAY. 
          BUT, UH, I THINK THE BIGGEST THINGS ARE, UH, WE NEED A PORTAL AND WE, WE NEED TO HAVE THE, THE PROCESS THAT WE USED PRIOR TO, UM, BATCH ZERO WAS, AND ACTUALLY INCLUDING BATCH ZERO, WAS, UH, THE, THE, UM, ENTITY SUBMITTED INFORMATION VIA EMAIL. 
          UH, SOMETIMES, YOU KNOW, THE FILE SIZES WERE TOO BIG AND THEY GOT CAUGHT IN FILTERS. 
          AND SO WE REALLY NEED A BETTER SYSTEM. 
          WE NEED A PORTAL. 
          UH, SO I THINK THAT'S PROBABLY THE NUMBER ONE PRIORITY RIGHT NOW FOR US, IS GETTING THAT PORTAL SET UP. 
          UM, THERE ARE, UH, IN TERMS OF THE, UH, BYOG OPTIONS, UM, YOU KNOW, RIGHT NOW W PON IS THE ONLY BYOG OPTION THAT IS AVAILABLE, BUT THERE ARE, UH, I THINK, UH, CHRISTIE MENTIONED THIS YESTERDAY, 17 OTHER OPTIONS THAT STAKEHOLDERS HAVE BROUGHT TO US AND SAID, WE WOULD LIKE THIS OTHER, THIS OTHER BYOG ENHANCEMENT. 
          UH, AND, AND SO I THINK GOING FORWARD, WE'LL BE IMPLEMENTING, UM, OBVIOUSLY WE CAN'T DO ALL 17 OF THOSE FOR, FOR BATCH ONE, BUT WE NEED TO, UH, IMPLEMENT SOME, UM, ADDITIONAL ENHANCEMENTS TO THAT BYOG CONSTRUCT SO THAT WE, UH, ARE ENCOURAGING EVEN MORE OF THAT TO COME ONTO OUR GRID. 
          UM, AND, AND THEN, UM, FINAL THING IS JUST, I, I THINK THE, UH, THE, THE PROCESS ITSELF, UM, BACHELOR IS THIS TRANSITION AWAY FROM THE, THE OLD INDIVIDUAL STUDY PROCESS. 
          AND ANYTIME YOU DO A TRANSITION, IT, IT IS JUST, UM, IT'S CHALLENGING. 
          THERE'S JUST A LOT OF RISK FOR THE DEVELOPERS BECAUSE THEY STARTED IN AN OLD PROCESS AND NOW THEY'RE TRANSITIONING TO A, A DIFFERENT PROCESS. 
          UH, SO WE NEED TO WRITE, UH, KIND OF CLEAR UPFRONT RULES ABOUT WHAT, WHAT IS BATCH ONE, HOW IS THAT GONNA, HOW, HOW DO YOU GET INTO BATCH ONE? AND, AND THAT SORT OF THING. 
          UM, THAT I THINK IS OBVIOUSLY DIFFERENT FROM THIS TRANSITIONARY PERIOD. 
          WE NEED TO GET INTO MORE OF A STEADY STATE PROCESS THAT'S GONNA WORK GOING FORWARD. 
          JEFF, COULD YOU TALK ABOUT, SO WHAT ARE THE NEW TARGETS AND IN TERMS OF BATCH ZERO AND WHAT RISKS DO WE FACE IN TERMS OF THAT POTENTIALLY GETTING OFF TRACK? YEAH, SO RIGHT NOW THE TEAM IS LOOKING AT THE SCHEDULE. 
          UH, SO, UM, ORIGINALLY AUGUST 7TH, WE WERE PLANNING TO HAVE THAT FINAL CLASSIFICATION. 
          UH, OBVIOUSLY THERE'S A DISPUTE PROCESS THAT, THAT WE EXPECTED TO HAPPEN. 
          UH, SO WE ARE, WE'RE AT A POINT NOW WHERE WE WON'T HAVE THAT FINAL CLASSIFICATION NOW UNTIL DECEMBER. 
          UH, BUT WE'RE LOOKING AT ARE THERE THINGS THAT WE CAN DO BETWEEN NOW AND DECEMBER TO, TO GET READY SO THAT WHEN WE GET TO DECEMBER WE CAN REALLY HIT THE GROUND RUNNING. 
          UM, AND SO IT'S HOPEFULLY NOT A, YOU KNOW, ONE FOR ONE DAY FOR DAY IMPACT TO THAT, THAT STUDY, UH, TIMELINE. 
          SO WE, WE DO EXPECT THAT WE'RE, WE'RE NOT GOING TO BE ABLE TO GET THE STUDY COMPLETED IN APRIL. 
          UM, BUT, UH, WE'RE, WE'RE LOOKING AT WHEN DO WE THINK THAT WE'LL BE ABLE TO GET IT COMPLETED. 
          AND HOW DOES THE 7 65 ISSUE KIND OF FALL INTO THIS IN TERMS OF WHERE THAT FALLS AND WHAT'S INCLUDED IN THE BASE CASE? YEAH, SO RIGHT NOW, UM, OUR ASSUMPTION IS THAT THE 7 65, UH, ALL, ALL OF THE LINES THAT HAVE PREVIOUSLY 
          [00:55:01]
BEEN ENDORSED, THAT THOSE WILL BE IN THE CASE. 
          UH, OBVIOUSLY THERE WILL BE, IF, IF THAT'S, UM, ACTUALLY, I, I DON'T, UH, I DON'T WANNA BE ON SHAKY GROUND WITH THE COMMISSION. 
          'CAUSE I THINK THEY'VE GOT A, UM, THAT THIS IS A OPEN CONTESTED CASE. 
          AND SO THERE MAY BE NOT A LOT I CAN SAY ABOUT THIS RIGHT NOW. 
          UM, BUT YEAH, BUT THAT'S INCLUDED IN THE BASE CASE ASSUMPTION. 
          UH, THAT'S INCLU. 
          YES. 
          YEP. 
          YEAH, MAYBE WE'LL LEAVE IT AT THAT, THAT RIGHT NOW WE'RE ASSUMING THAT THE 7 65 KV LINES WILL BE IN THE BASE CASE. 
          OKAY. 
          UH, MR. CHAIR, OH, QUICK QUESTION. 
          UM, THANK YOU, JEFF. 
          THAT WAS A, A, A VERY, UM, THOROUGH OVERVIEW OF, OF WHERE WE ARE. 
          AND I, I JUST WANNA SAY I APPRECIATE EVERYTHING YOUR TEAM IS DOING. 
          I KNOW, I KNOW YOU'VE HAD SOME, SOME CHANGES HERE. 
          UM, QUICK QUESTION FOR YOU. 
          ON THE DISPUTE PROCESS, ARE YOU SEEING, UM, ARE YOU, IN THINKING ABOUT HOW FAST WE'RE WE'RE MOVING, I'M JUST, I'M CURIOUS ABOUT HOW MUCH ACTIVITY YOU EXPECT, UH, THERE IN TERMS OF, UH, UH, FOLKS WHO AREN'T WHERE THEY WANTED TO BE IN THE QUEUE, UH, UH, FILING DISPUTES, AND THEN HOW MUCH TIME THAT MIGHT TAKE TO RESOLVE? YEAH, SO THAT, UM, LEMME GO BACK TO THE DISPUTES. 
          YEAH. 
          SO, SO THE, UM, THAT SECOND DISPUTE, UH, WHERE IT'S THE, THE LOADS, THEY THOUGHT THAT THEY WERE BASE LOAD, AND THEY ARE, UM, WE, WE SAID THAT THEY'RE STUDY LOAD AND THEY'RE DISPUTING THAT, BUT THERE'S A VERY SHORT, UH, TIME PERIOD THAT'S DEFINED IN THE PLANNING GUIDE FOR RESOLVING THAT WE ARE IN THE MIDDLE OF THAT, UH, TIME PERIOD RIGHT NOW. 
          UH, AND, AND SO THIS WEEK IS ACTUALLY VERY, UH, BUSY TIME, UH, FOR, FOR THAT. 
          SO IT'S, UH, AND, AND THAT'S, UH, MY TEAM WORKING WITH, UH, LEGAL, UH, CHAD. 
          SO CHAD'S TEAM IS TAKING THE LEAD ON THOSE, UH, DISPUTES. 
          THIS IS A, A LEGAL DISPUTE PROCESS. 
          UH, BUT OF COURSE MY TEAM IS WORKING, UH, ALONGSIDE, UH, TO MAKE SURE THAT WE'RE GETTING THROUGH THAT. 
          SO THI THIS IS A, UH, EXTREMELY BUSY WEEK TO, UH, RESOLVE THOSE DISPUTES. 
          UM, I THINK THE ADRS, UH, I THINK, I THINK THERE'S A LITTLE DIFFERENT TIME ON THOSE, BUT WE HAVE RECEIVED A NUMBER OF THOSE, UH, AS WELL. 
          AND, AND SO VERY, VERY BUSY TIME. 
          I THINK OVER THE NEXT COUPLE WEEKS IS PROBABLY FAIR TO SAY THAT, THAT WE'LL BE WORKING THROUGH THOSE, UH, DISPUTES. 
          THANK YOU, JEFF. 
          I HAVE SEVERAL QUESTIONS ON THIS. 
          UM, SO I, I THINK YOU SAID EARLIER THERE WERE 36 LOADS THAT WERE RECLASSIFIED FROM THE CONDITIONAL CLASSIFICATION IN AUGUST, JULY, AUGUST, UH, TO STUDY LOAD AND THE NINE AND THE, UH, SEPTEMBER 3RD ANNOUNCEMENT. 
          UH, I THINK FROM WHAT I UNDERSTAND, SEVERAL OF THOSE HAVE FILED APPEALS. 
          YOU'VE WALKED US THROUGH THE APPEALS PROCESS. 
          UM, IN THE APPEALS PROCESS. 
          I KNOW IT'S HANDLED BY THE LEGAL TEAM. 
          IS A TECHNICAL PERSON ABLE TO BE PART OF THAT CONVERSATION WHEN A, AN APPLICANT COMES IN TO HAVE THE CONVERSATION ABOUT THE APPEAL? YEAH, SO I THINK THE, UH, SO THE WAY THAT PROCESS WORKS, AND, AND CHAD FEEL FREE TO ADD, ADD ANYTHING TO THIS IS, IS, UH, THE LEGAL TEAM WILL MEET WITH THEM. 
          UH, AND, AND THE THIS DISPUTE IS, UH, IT'S, IT'S PRIMARILY ABOUT THE FACTS. 
          IT'S NOT THE NECESSARILY THE, THE, YOU KNOW, TECHNICAL, UH, DETAILS ON, ON, UH, YOU KNOW, THE, THE POSITION OF THE PROJECT. 
          UM, YOU KNOW, WHETHER IT DOES OR DOES NOT OVERLOAD A TRANSMISSION LINE. 
          IT, IT'S NOT THAT SO MUCH AS IT IS ABOUT THE FACTS OF THE, THE SITUATION. 
          UH, BUT I THINK THE LEGAL, THE LEGAL TEAM WILL TAKE THE LEAD ON THAT. 
          BUT THEN, UH, THEY'RE HAVING, UH, REGULAR MEETINGS EVERY DAY WE, THEY'LL COME BACK TO THE TECHNICAL TEAM AND, AND WILL HAVE THOSE DISCUSSIONS TO, UH, YOU KNOW, MAKE, MAKE SURE THAT WE'RE ALL ON THE SAME PAGE. 
          OKAY. 
          WHAT WAS THE PR PREDOMINANT REASON THAT MOST OF THOSE 36 LOADS WERE RECLASSIFIED FROM THE, THE ORIGINAL CONDITIONAL CLASSIFICATION TO THE NEW CONDITIONAL CLASSIFICATION? YEAH, SO, UM, SO, YOU KNOW, I MENTIONED THOSE LAST FEW WEEKS, UH, EVEN LAST MONTH LEADING UP TO THAT JULY 10TH DEADLINE. 
          UH, THE TSPS WERE DOING A TREMENDOUS AMOUNT OF STUDY WORK. 
          AND WHAT WAS HAPPENING WAS A, UH, SOME, SOME LOADS WERE COMING IN THAT WERE, UM, UH, THEY, THEY WERE ESSENTIALLY CROSSING THE FINISH LINE AND MAYBE THOSE LOADS WERE NOT INCLUDED IN ANOTHER LOADS, UH, UH, STUDY. 
          UH, AND SO THEN THAT, UH, SO, SO MAYBE YOU HAD A, A LOAD ON DAY, UM, YOU KNOW, WHATEVER THAT, THAT THOUGHT THAT THEY CROSSED THAT FINISH LINE. 
          BUT IT TURNS OUT THAT A DAY BEFORE THAT ANOTHER LOAD MAY BE ON A NEIGHBORING TSP SYSTEM HAD CROSSED THE FINISH LINE AHEAD OF THEM. 
          UH, AND, AND BECAUSE OF THAT SEQUENCE THEN, IF THAT, THAT LOAD THAT HAD CROSSED RIGHT BEFORE 
          [01:00:01]
THEY DID, I, IF THEY, THAT LOAD WAS NOT INCLUDED IN THAT LOAD STUDY THEN NOW THAT SECOND LOAD, NOW THAT, THAT THEIR STUDY WAS INVALID. 
          UH, SO THAT, THAT WAS THE PRIMARY REASON THERE, THERE ARE, UM, UH, SOME, SOME NUANCES AROUND SOME OF THAT, BUT, UH, BUT THAT WAS PRIMARY REASON. 
          OKAY. 
          AS I UNDERSTAND IN SOME OF THESE PROJECTS THAT THERE WAS A STUDY AREA DEFINED FOR THE LOAD AND ALL THE OTHER CONTINGENT LOADS THAT ARE, ARE AROUND IT. 
          DID THE STUDY AREA SIZES CHANGE THROUGH THE PROCESS? NO, WE, WE USED THE SAME METHODOLOGY FOR DETERMINING THOSE. 
          THE STUDY AREA IS THROUGHOUT THE PROCESS. 
          OKAY. 
          OKAY. 
          AND ONCE THE, IF THERE'S AN APPEALS DECISION MADE, UM, AND IT'S AGAINST WHAT THE APPLICANT WAS HOPING FOR, IS THERE A FOLLOW ON PROCESS THAT THEY CAN USE TO TRY TO GET BACK INTO BASELOAD? OR IS IT DONE? YEAH, I MIGHT, UH, MAYBE TURN TO CHAD ON THAT ONE. 
          YEAH, I THINK UNDER BOTH THOSE PROCESSES, IF THE LOAN ENTITY DOES NOT LIKE THE OUTCOME, THEN THEY CAN AVAIL THEMSELVES OF, OF THE NEXT DISPUTE PROCESS, WHICH WOULD BE ULTIMATELY GOING TO THE COMMISSION FOR ANY KIND OF DISPOSITION OR RELIEF. 
          OKAY. 
          OKAY. 
          AND LET'S TALK ABOUT STUDIED LOAD FOR A MINUTE. 
          SO LET'S ASSUME SOMEBODY HAD THE INITIAL INDICATION THAT THEY WERE IN BATCH, THEN THEY GOT RECLASSIFIED AS STUDIED, OR THEIR OPPORTUNITIES TO WIND UP BACK IN BASE THAT I SAY, RIGHT? THEY, THEY WERE ORIGINALLY CLASSIFIED AS BASE AND THEN THEY GOT RECLASSED AS STUDIED. 
          WHETHER THEIR OPPORTUNITIES GET BACK INTO BASE BETWEEN NOW AND WHAT IS IT DECEMBER 10TH? OR IS IT NEXT APRIL OR MAY? WHAT IT YEAH, IT'S, IT'S, UM, IT, IT'S, I DON'T KNOW WHAT THE RIGHT TIMELINE IS TO ON, ON THAT, BUT, BUT IT ESSENTIALLY, THE, THE PROCESS IS THIS DISPUTE PROCESS. 
          UM, IF THEY ARE NOT SUCCESSFUL IN THAT DISPUTE, THEN THEY WILL GO INTO BATCH ZERO AS A STUDY LOAD, AND, AND AT THE END OF BATCH ZERO WE WILL ALLOCATE THEM MEGAWATTS OKAY. 
          UH, BY YEAR. 
          AND AT THAT POINT THEY CAN SIGN THEIR INTERCONNECTION AGREEMENTS AND, AND BECOME BASE LOAD GOING FORWARD AT THAT POINT. 
          OKAY. 
          ALRIGHT. 
          I THINK THAT'S ALL THE QUESTIONS I HAVE FOR NOW. 
          ANY OTHER QUESTIONS ON THIS SUBJECT? UH, LET ME SAY THIS. 
          I THINK THAT, UH, YOUR TEAM HAS DONE AN AMAZING JOB DEALING WITH ALMOST 400 APPLICATIONS FOR LARGE LOADS. 
          AND, UH, NOW YOU'VE GOT BD LOADS, YOU'VE GOTTA CONSIDER IT, AND YOU'VE GOT THE AUDIT THAT HAS TO BE DONE. 
          SO THANK YOU FOR ALL YOUR WORK ON THIS. 
          I KNOW NOT EVERYBODY'S HAPPY AND THE OUTCOME, UM, AND HOPEFULLY WE'LL FIND A WAY WHERE WE'LL GET MORE PEOPLE HAPPY AS WE GO FORWARD. 
          SO THANK YOU. 
          ALRIGHT, THANK YOU. 
          ALRIGHT, LET'S 
          [15. Summer 2026 Operational and Market Review]
MOVE TO, UH, OUR NEXT DIGIT ITEM, WHICH IS THE SUMMER 2026 OPERATIONAL AND MARKET REVIEW PRESENTED BY DAN WOODFIN AND KEITH COLLINS. 
          AND, UH, CHAD, YOU'RE ON DECK FOR THE REVISION REQUEST. 
          GOOD MORNING. 
          UM, SO I SHOULD NOTE AT THE BEGINNING THAT A LOT OF THE MATERIALS IN THIS PRESENTATION, IN TERMS OF THE SLIDES, ARE BASED ON A JUNE 1ST TO AUGUST 15TH, UH, TIMEFRAME. 
          BUT IF YOU LIVE IN TEXAS, WHICH I THINK NEARLY ALL OF US DO, WE KNOW THAT THE LAST MONTH HAS BEEN BRUTAL. 
          SO I'VE GOT A FEW UPDATES TO THAT, UM, BASED ON THE LAST MONTH. 
          SO WHEN WE PUT THIS TOGETHER, WE LOOKED AT JUNE AND JULY, AND THAT WAS THE 11TH HOTTEST, UH, OF THE HISTORIC YEARS IN TERMS OF AVERAGE TEMPERATURES. 
          BUT IF YOU LOOK OVER JUNE, JULY, AND AUGUST, WE'RE UP TO THE FOURTH HOTTEST SUMMER BASED ON THOSE AVERAGE TEMPERATURES. 
          AND IF YOU LOOK AT JUNE THROUGH THIS PAST WEEKEND, IT WAS THE FOURTH HOTTEST FOR DFW, THE SIXTH HOTTEST FOR HOUSTON AND AUSTIN AND THE SEVENTH FOR SAN ANTONIO. 
          SO IT'S, IT'S BEEN A, UH, UH, REALLY KIND OF A HOT SUMMER, BUT IN SPITE OF THAT, AS PABLO NOTED EARLIER, WE'VE SEEN IT'S BEEN FAIRLY UNEVENTFUL AS WELL. 
          SO WE'LL KIND OF TALK THROUGH MORE OF THAT. 
          UM, WE DID HIT A NEW PEAK DEMAND, UM, ON, UM, JULY 23RD. 
          UM, THAT WAS OUR FIRST NEW ALL TIME PEAK DEMAND SINCE 2023. 
          SO IF YOU THINK ABOUT THIS A MINUTE, IN 2023, WE HAD ONE HOUR THAT EXCEEDED THAT AMOUNT, 85, 5 0 8. 
          UM, AND IF YOU LOOK AT, UM, THIS, AND THEN IN TWO TH 2024, WE DIDN'T HAVE ANY HOURS THAT EXCEEDED THAT AMOUNT THAT WE HIT IN 2023. 
          IN 2025, WE DIDN'T HAVE ANY HOURS THAT WE EXCEEDED THE AMOUNT IN 2023. 
          THIS YEAR, WE HAVE HAD, UM, 208 HOURS THAT WE EXCEEDED 
          [01:05:01]
THAT 2023 DEMAND, UM, 208 BETWEEN JUNE 1ST AND, UM, THIS PAST WEEKEND. 
          AND SO, UM, THAT, YOU KNOW, IT PROBABLY TALKED ABOUT THE ENERGY GROWTH. 
          WHAT THAT ENERGY GROWTH MEANS IS THAT THERE ARE A LOT OF HOURS THAT ARE EXCEEDING THE EQUIVALENT HOUR IN FROM THE LAST THREE YEARS AND INCLUDING SOME OF THE PEAK HOURS. 
          AND SO THAT'S REALLY HOW THAT HAPPENS. 
          THE LONGEST STREAK THAT EXCEEDED THAT AMOUNT WAS ACTUALLY FROM AUGUST 11TH THROUGH THE END OF THE MONTH. 
          SO THAT'S LIKE 21 DAYS THAT EVERY DAY WAS HIGHER THAN THAT, WHAT HAD BEEN THE PREVIOUS PEAK. 
          UM, WHEN WE LOOK AT THE DEMAND RESPONSE ON THAT DAY, WE SAW ON THE PEAK DAY, UH, ON ON JUNE, UH, JULY 23RD, WE SAW, UH, QUITE A BIT OF CRYPTO RESPONSE. 
          AS WE LOOKED AT LAST YEAR, IT APPEARS WE SAW LESS OTHER TYPE OF RESPONSE ON THAT PARTICULAR DAY. 
          SO, WHICH MAY MEAN BE PART OF THE REASON IT WOUND UP BEING A, A PEAK DEMAND TYPE DAY. 
          SO WE SAW A LITTLE OVER 30, NEARLY 3,300 MEGAWATTS OF, OF CRYPTO RESPONSE AND MORE LIKE 500 MEGAWATTS OF, OF, OF FOUR CP AND OTHER TYPE OF RESPONSE. 
          WE ALSO HAD A LOT OF DAYS WHERE THE NET LOAD WAS HIGH, SO NET LOAD BEING THE DEMAND ON THE SYSTEM, MINUS WIND, MINUS SOLAR. 
          SO BASICALLY THE, THE AMOUNT OF LOAD THAT HAD TO BE SERVED BY DISPATCHABLE GENERATION. 
          AND SO WE HAD, IF YOU LOOK AT THIS GRAPH, YOU, WE HAD HAD SCATTERED YEARS THAT WE WERE IN THE 70, UH, GIGAWATT RANGE OF NET LOAD. 
          AND THEN THIS, UM, SUMMER, WE HAD QUITE A FEW DAYS WHEN THE, WHERE THE NET LOAD WAS, UH, ABOVE, UH, 70 GIGAWATTS. 
          IN FACT, WE HAD ONE DAY THAT IN AUGUST THAT WAS HIGHER THAN ANYTHING ON HERE. 
          AND SO WE'VE SEEN QUITE A BIT OF IT. 
          THE OTHER THING YOU'LL NOTICE IS THAT THE GRAY PART OF THAT BAR IS THE PORTION THAT WAS SERVED BY BATTERIES DURING THAT HIGH NET LOAD HOUR. 
          SO THE HIGH NET LOAD HOUR IS TYPICALLY GOING TO BE AFTER THE EVENING DEMAND PEAK AFTER THE SUN GOES DOWN WHEN A LOT OF THE LOAD IS IS. 
          SO THE SOLAR HAS GONE AWAY AND NOW BATTERIES ARE HELPING SERVE PART OF THE LOAD. 
          AND I GUESS THE OTHER THING I'LL NOTICE IN THIS SLIDE THAT THE, THE Y AXIS DOESN'T START AT ZERO, IT'S AT 40, SO DON'T DO THE PERCENTAGE IN YOUR HEAD. 
          UH, BUT IT IS A, A SIGNIFICANT AMOUNT THAT'S BEING SERVED BY BATTERIES. 
          SO WE ALWAYS LOOK AT, UH, THE THERMAL FORCED OUTAGES THAT OCCUR, UH, AND COMPARE IT TO THE PREVIOUS YEAR. 
          AND YOU CAN SEE WE DID THAT, UH, THIS YEAR. 
          THE OUTAGES WERE IN, THEY GOT DOWN TO IN THE UPPER 5,000 RANGE. 
          UH, BUT GENERALLY THEY STAYED IN A RANGE AROUND 8,000 MEGAWATTS MOST OF THE SUMMER AFTER YOU GOT THROUGH WITH SOME OF THE EXTENDED OUTAGES FROM THE OUTAGE WINDOW IN THE SPRING. 
          SOME OF 'EM GOT EXTENDED INTO JUNE. 
          UM, BUT ONCE YOU GET INTO JULY AND AUGUST, THEY WERE KIND OF AT THAT RANGE, UM, ABOUT THE SAME, MAYBE A LITTLE LOWER THAN WHAT WE SAW LAST YEAR. 
          UM, AS WE DISCUSSED THIS, WE SAID, YOU KNOW, I RECALL THAT SEVERAL YEARS AGO WE WERE MUCH LOWER, WE HAD MUCH LOWER THERMAL OUTAGES THAN THAT. 
          WE WERE IN THE THREE TO 4,000 RANGE ON PEAK, UH, PRETTY CONSISTENTLY. 
          SO WE HAD FOLKS GO BACK AND LOOK AT THAT. 
          AND OF COURSE, WE'VE HAD ADDITIONAL, SOME ADDITIONAL THERMAL GENERATION BUILT, UH, SINCE THAT TIME. 
          BUT WE WENT BACK AND LOOKED AT 29, 20, 21 WAS AN ODD YEAR, SO WE COULDN'T GO BACK FIVE YEARS. 
          WE WENT BACK 2019 AND 2020. 
          AND WHAT WE SEE IS AS A PERCENTAGE OF THE, UH, THE INSTALLED CAPACITY, THERE'S A SIGNIFICANT INCREASE IN THE KIND OF FORCED OUTAGES AS A PERCENTAGE COMPARED TO WHAT WE WERE SEEING SIX, SEVEN YEARS AGO. 
          UH, WE THOUGHT THAT WAS AN INTERESTING PHENOMENON. 
          IT GETS INTO DISCUSSIONS LIKE RESOURCE ADEQUACY AND SO FORTH. 
          UH, I'VE BEEN TOLD THAT IN THINGS LIKE THE SARAH REPORT AND WHATEVER, WE'RE ONLY USING THE LAST THREE YEARS. 
          SO SOME OF OUR PERCENTAGES ALREADY TAKE THESE LOWER AMOUNTS INTO ACCOUNT OR THE HIGHER AMOUNTS INTO ACCOUNT. 
          BUT IT IS AN INTERESTING PHENOMENON. 
          UM, WE, AS WE'VE TALKED ABOUT IN THE PAST, THAT WE SEE THAT KIND OF TIGHTEST TIME SHIFTING LATER IN THE EVENING BECAUSE IT'S NOT REALLY A PROBLEM TO SERVE THE PEAK DEMAND, BUT WITH ALL THE SOLAR, BUT IT BECOMES TIGHTER, UH, LATER IN THE EVENING. 
          AND YOU CAN SEE THAT PHENOMENON ON, ON THIS CHART. 
          UM, ONCE AGAIN, THE, THIS ONLY GOES THROUGH AUGUST 15TH, SO IT'LL BE INTERESTING TO SEE WHAT HAPPENS WITH THE REST OF AUGUST, BUT THERE'S DEFINITELY A SHIFT TO WHERE WE'RE, 
          [01:10:01]
WE'RE IN MORE IN THE, OUR ENDING 22 IS KIND OF THE TIGHTEST TIME. 
          SO, SO WE, WE, AS THROUGH AUGUST 15TH, WE LOOKED AT THE, THE, THE LOWEST STATE OF CHARGE TYPE DAYS TO LOOK AT WHAT WAS GOING ON ON THOSE DAYS COMPARED TO LAST YEAR. 
          UM, THERE'S NOT REALLY A LOT OF INFORMATION ON THIS CHART OR THERE'S A LOT OF INFORMATION, BUT, BUT NOTHING I NECESSARILY WANT TO HIGHLIGHT ON THIS CHART OTHER THAN ON THOSE DAYS THE STATE OF CHARGE GOT DOWN TO LESS THAN 10%. 
          UM, AND YOU, UH, YOU REALLY HAD, UM, SIGNIFICANT, IT WAS LOWER. 
          WE'RE WE'RE USING MORE OF THOSE BATTERIES ON THE EVENING ON A PERCENTAGE BASIS THAN WHAT WE WERE DOING LAST YEAR. 
          UH, A LOT OF THE, THE, THE CHARGING IS GOING ON DURING THE SOLAR HOURS, NOT AS MUCH OF IT'S HAPPENING AT NIGHT. 
          YOU SEE A LITTLE WITH THE KIND OF LOWER LOADS AND HIGHER WIND IN THE EVENING, UH, BUT NOT, UH, MOST OF THE SIGNIFICANT CHARGE UP IS HAPPENING TO PREPARE FOR THE EVENING PEAK IS HAPPENING DURING THE, THE DAYTIME HOURS, UH, FROM THE SOLAR GENERATION. 
          AND THIS KIND OF TAKES THAT PREVIOUS CHART AND LOOKS ACROSS THE WHOLE YEAR AND TURNS IT ON THE SIDE. 
          SO THE, THE BLUE IS KIND OF THE PEAK OF THE STATE OF CHARGE COMING OUT OF THE PAGE, IF YOU WILL. 
          AND WHAT YOU SEE IS, IS THAT SAME PHENOMENON THAT THE, THE HIGHEST CHARGES HAPPENING DURING THE, THE DAYTIME HOURS AFTER THE, THEY'VE GOTTEN CHARGED UP, AND THEN THEY'RE DISCHARGING IN THE EVENING, UM, WHERE IF, IF IT WAS COMPLETELY DISCHARGED, IT WOULD BE, UH, RED, IF IT'S COMPLETELY CHARGED, IT WOULD BE BLUE. 
          UM, AND YOU SEE THAT ON A LOT OF THOSE EVENINGS. 
          THERE'S A LOT OF YELLOW, WHICH IS DOWN IN THAT RANGE OF 10 TO 15% STATED CHARGE. 
          AND IN FACT, WE PULLED THE NUMBERS AND 20% OF THE TIME WE GOT BELOW 15% STATE OF CHARGE. 
          NOW, THAT'S NOT A BAD THING. 
          WHAT THAT SAYS IS THE SYSTEM IS DISPATCHING THE BATTERIES IN SUCH A WAY THAT YOU'RE CHARGING THEM UP WHEN PRICES ARE LOW. 
          AND THERE'S PLENTY OF GENERATION ON THE SYSTEM WHEN THE SUN'S SHINING AND THEN DISCHARGING 'EM IN THE EVENING AND DISCHARGING THAT LOW COST POWER THAT WAS CHARGED INTO THEM FULLY. 
          SO THAT'S NOT A BAD THING. 
          UM, BUT ONE OF THE PHENOMENON IS HOW MANY OF THOSE DAYS WERE WE OUTTA STATE OF CHARGE BECAUSE WE ALSO WERE USING ALL THE GENERATION ON THE SYSTEM. 
          SO ALL THE, ALL THE RESOURCES BASICALLY WERE, WERE, WE WERE OUT ALMOST. 
          AND YOU CAN SEE FROM THIS CHARGE, THIS IS THE, THE CAPACITY FROM ALL OF THE OFFLINE RESOURCES. 
          SO IF YOU LOOK AT KIND OF THE, THE LOWEST VALUES ON HERE, THAT'S THE DAYS WHERE EVERYTHING WAS ONLINE. 
          ALL THE THERMAL GENERATION WAS ONLINE ON THOSE SAME DAYS, PROBABLY BECAUSE NEARLY EVERY DAY WE WERE DISCHARGING THE BATTERIES PRETTY FULLY. 
          SO THESE WERE, ESSENTIALLY WHAT THAT'S SHOWING YOU IS THOSE ARE THE TIGHT DAYS. 
          AND YOU CAN SEE THAT IN THAT, THOSE DAYS AT THE END OF, UH, JULY THE 22ND, THE 23RD, AND THEN ON INTO A LOT OF AUGUST, WE REALLY HAD THIS, WE WERE NEEDING TO USE ALL THE GENERATION ON THE SYSTEM, AND WE WERE ALSO KIND OF DISCHARGING THE BATTERIES FULLY ON THOSE DAYS. 
          AND SO WE, WE DIDN'T SEE, UH, UH, WE DIDN'T HAVE ANY KIND OF ISSUES WITH THAT. 
          WE DIDN'T HAVE TO DECLARE WATCHES OR THOSE KIND OF THINGS, BUT WE WERE USING UP A LOT OF THE RESOURCES, THE VAST MAJORITY OF THE RESOURCES THAT WERE AVAILABLE ON THE SYSTEM TO SERVE THOSE EVENING NET LOAD PEAK DEMANDS. 
          AND I THINK THAT'S ALL I'VE GOT. 
          I CAN ANSWER QUESTIONS NOW OR KEITH CAN COME UP AND WE CAN HANDLE CUSHIONS AT THE END. 
          DAN, SO YESTERDAY WE HEARD, YOU KNOW, WE HAVE MORE RUCK THIS SUMMER COMPARED TO LAST SUMMER. 
          COULD YOU EXPLAIN A LITTLE BIT OF THAT IN TERMS OF WHAT'S HAPPENING? AND, AND, YOU KNOW, I THINK IT'S BE, IT'S A STAKEHOLDER CONCERN BECAUSE OF, YOU KNOW, THE IMPACT IT MAY HAVE ON REAL TIME PRICES, BUT ALSO FORWARD PRICES. 
          BUT THAT WHAT YOU'RE DEALING WITH FROM AN OPERATIONAL PERSPECTIVE AS IT RELATES TO THOSE RUCKS AND WHAT COULD CHANGE GOING FORWARD. 
          SURE. 
          SO WE'RE, WE'RE TYPICALLY, WE'RE, WE'RE, WHEN WE DO DO A RELIABILITY UNIT COMMITMENT, IT'S REALLY A RESIDUAL COMMITMENT TO EITHER SOLVE A TRANSMISSION PROBLEM THAT WE WOULDN'T OTHERWISE BE ABLE TO SOLVE WITH THE GENERATION THAT'S ONLINE, OR THAT WE DON'T HAVE ENOUGH CAPACITY ONLINE THAT'S PLANNING TO BE ONLINE TO SERVE THE, UH, LOAD PLUS THE ANCILLARY SERVICE REQUIREMENT. 
          AND SO WE'RE NOT KIND OF, UM, BRINGING THINGS ON OTHER 
          [01:15:01]
THAN JUST FOR THOSE TWO THINGS. 
          AND SO THE, THE THERE AND THOSE, THAT ANALYSIS THAT WE DO EVERY HOUR IS BASED ON THE INFORMATION THAT THE, THE MARKET PARTICIPANTS ARE PROVIDING IN TERMS OF WHAT GENERATORS THEY'RE PLANNING TO HAVE ONLINE. 
          AND THEN THE, THE KIND OF THE NEW-ISH THING THAT WE'VE ADDED TO THAT IS CONSIDERATION OF THE STATE OF CHARGE OF THE BATTERIES AND MAKING SURE THAT WE'RE, ONE OF THE INPUT PARAMETERS THAT WE'RE GETTING FROM ALL THE QSCS THAT HAVE BATTERIES IS WHAT DO YOU WANT THE STATE OF CHARGE OF YOUR BATTERIES TO BE FOR THE FOLLOWING HOUR? AND, AND KEITH TALKED ABOUT THIS SOME YESTERDAY, THAT, THAT WE WE'RE RESPECTING THOSE AND MAKING SURE WE'VE COMMITTED ENOUGH GENERATION TO ALLOW THEM TO CHARGE UP TO THAT LEVEL. 
          AND WHAT WE HAVE BEEN SEEING IS THAT THERE WAS A LOT OF, UM, KIND OF, THEY WERE TELLING US THEY WERE WANTED TO HAVE THE STATE OF CHARGE AT THE BEGINNING OF THE NEXT HOUR TO BE THE SAME AS THE STATE OF CHARGE AT THE BEGINNING OF THIS HOUR. 
          AND SO BASICALLY WE COULDN'T USE THE ENERGY FROM THAT BATTERY IN THE R STUDY TO SOLVE ANY PROBLEMS. AND SO WE'D HAVE TO BRING ON OTHER GENERATION. 
          WE'VE, AS KEITH POINTED OUT YESTERDAY, WE'VE GRADUALLY BEEN WORKING WITH THE MARK PIMAN TO KIND OF HELP THEM TO UNDERSTAND THAT THING THAT YOU'RE TELLING US IS CAUSING US TO DO THIS RIGHT, TO HAVE TO DO THIS LOGICALLY. 
          AND SO IF YOU'LL DO BE MORE ACCURATE IN FORECASTING IF, IF YOU KNOW YOU'RE GONNA BE DISCHARGING WHEN THE SUN'S GOING DOWN, THEN GIVE US A LOWER STATE OF CHARGE FOR THE SUBSEQUENT HOURS IN THE EVENING SO THAT ROCK KNOWS THAT AND CAN AND DOESN'T. 
          SO I THINK WE'LL SEE SOME IMPROVEMENT AS WE, AS WE DO THAT. 
          UM, UM, AND THEN AS, AS WE CONTINUE TO WORK WITH THEM TO IMPROVE THOSE, THOSE STATE OF CHARGE, UH, INPUTS. 
          AND THEN THE OTHER THING IS, IS, YOU KNOW, THERE'S A LOT OF DISCUSSION RECENTLY ABOUT UPDATING THE ANCILLARY SERVICE DEMAND CURVES. 
          AND SO PART OF THE, PART OF THE PROBLEM WE HAVE TODAY IS THE ANCILLARY SERVICE DEMAND CURVES ARE SETTING PRICES BASED ON A KIND OF ADMINISTRATIVELY DETERMINED CURVE. 
          AND SO THEY'RE NOT GOING AS HIGH WHEN AT, BASED ON THE, THE AMOUNT OF ANCILLARY SERVICES WE'RE BUYING. 
          SO I MENTIONED THAT WE'RE, WE'RE, WE'RE HAVING TO RUCK TO MEET LOAD PLUS ANCILLARY SERVICE REQUIREMENT, RIGHT? WELL, NORMALLY YOU'D EXPECT THE MARKET PARTICIPANTS TO BRING ON ENOUGH GENERATION TO COVER ANCILLARY SERVICE OBLIGATIONS AND THOSE KIND OF THINGS, BUT THE REAL TIME PRICES THAT ARE SET OFF OF THOSE ANCILLARY SERVICE DEMAND CURVES MAY NOT BE REFLECTIVE OF THE QUANTITIES OF AS WE'RE ACTUALLY BUYING. 
          SO THERE'S NOT THE RIGHT MARKET SIGNAL. 
          AND SO THAT'S SOMETHING WE'RE GONNA BE WORKING ON OVER THE NEXT YEAR. 
          I THINK IT'LL COME UP AGAIN IN NI'S PRESENTATION ABOUT, AS WE NEED TO GET THOSE AS CURVES WHERE THEY'RE, WHERE THEY'RE ALIGNED WITH THE QUANTITIES, UH, OF AS THAT WE'RE BUYING. 
          AND THAT'LL ALLOW US TO, TO NOT RUCK AS MUCH, I THINK. 
          OKAY. 
          THANK YOU. 
          THAT WAS A LONG ANSWER. 
          SORRY, . 
          DAN, THANKS FOR YOUR ANALYSIS OF THE SUMMER. 
          COULD YOU, UM, COMMENT ON THE RELIABILITY MUST RUN UNITS THAT WERE USED IN THE SAN ANTONIO AREA DURING THE SUMMER? YEAH, SO WE, UM, WHEN WE HAVE THE, UH, BRO UNIT THAT IS ON AN RR CONTRACT, WE USED IT, UH, SEVERAL TIMES THIS SUMMER AND, AND HAD USED IT, UH, TRIED TO USE IT IN THE WINTER, BUT WE'VE USED IT IN THE SUMMER. 
          BASICALLY, WHEN WE RUN THAT RUCK STUDY, WHEN WE SEE THAT WE'RE LIKELY TO HAVE PROBLEMS IN THE KIND OF WHERE THE, THAT CONSTRAINT THAT IT WAS PROCURED OR SOMETHING NEARBY THAT IT WOULD BE HELPFUL FOR IS, IS BINDING AND, AND AT A HIGH LEVEL, THEN WE'LL, WE'LL RUCK IT ONLINE EFFECTIVELY TO USE IT. 
          AND SO WE'VE BEEN ABLE TO DO THAT SEVERAL TIMES THIS SUMMER. 
          I DON'T HAVE EXACT COUNT, BUT ANY FURTHER QUESTIONS? THANK YOU, DAN. 
          OUR NEXT ITEM IS AGENDA ITEMS 16, WHICH IS THE CONSENT AGENDA, INCLUDING VICE CHAIR. 
          WE, WE STILL HAVE THE MARKET SIDE FOR THE SUMMER, SO I THINK KEITH IS GONNA GO THROUGH HIS MARKET RELATED SLIDES. 
          ALL RIGHT, THANK YOU. 
          ALL RIGHT, THANK YOU. 
          YEAH, JUST A FEW SLIDES HERE TO HIGHLIGHT THE MARKET IMPACTS OF THE, THE SUMMER. 
          AND TO START WITH THE, THE CONCLUSION UP FRONT IS THE INCREASING SOLAR AND STORAGE RESOURCES, WHICH WE'VE SEEN OVER THE LAST FEW YEARS NOW CAN CONTINUE TO IMPACT, UH, THE SUMMER MARKET OUTCOMES. 
          AND VERY CONSISTENT WITH WITH DAN'S, UH, DAN'S PRESENTATION. 
          UH, DURING PARTICULARLY THE GROSS PEAK HOURS, THE MIDDLE OF THE DAY WHERE WE'RE SETTING THE HIGHEST DEMAND PERIODS, THAT'S WHERE SOLAR TENDS TO BE RATHER FLUSH. 
          AND, UH, WE, WE TEND TO SEE THE HIGHEST PRICING, UH, LATER IN THE DAY, UH, DURING WHEN THE, THE NET, THE NET PEAK IS, IS AT THE HIGHEST, WHICH TENDS TO BE IN THE HOUR, 21, 20, 21, 22 PERIOD LATER IN THE DAY. 
          UM, BUT, BUT AS I 
          [01:20:01]
NOTED, THE SOLAR AND STORAGE PLAYING A KEY ROLE IN, UH, WHAT WE'RE SEEING, UM, UH, AND ANSLEY ENERGY AND ANSLEY SERVER PRICES CONTINUE TO DECLINE. 
          UH, NET PEAKER IN THE SLIDE. 
          IT DOES SAY NET PEAKER, UH, MARGINS HAVE DECLINED. 
          UH, I, I LOOKED AT AN UPDATE JUST THIS WEEK. 
          IT'S, IT'S ABOUT THE SAME AS LAST YEAR GIVEN THE, THE DEMAND WE'VE HAD OVER THE LAST MONTH OR SO. 
          BUT, BUT GENERALLY NOTHING VERY, UM, UM, UH, NO LARGE, UH, PRICE, PRICE, UH, UH, PRICE MOVEMENTS, UH, SMALL PERIODS OF TIME WHERE WE SEE HIGHER PRICES. 
          UH, I WILL NOTE THAT REAL-TIME CO-OP OPTIMIZATION, UH, DID HELP TO LOWER, UH, ANCILLARY SERVICE COSTS AND MARKET CONGESTION. 
          THIS IS RELATED TO SOME COMMENTS I, I DID NOTE YESTERDAY. 
          UH, I WILL SAY ANSLEY SERVICES ARE, ARE REALLY SHORT, UH, AND INSTANCES OCCURRED EARLIER IN THE SUMMER, BUT NOT SO MUCH LATER IN THE SUMMER. 
          AND AS DAN WAS TALKING ABOUT RELIABILITY UNIT COMMITMENTS, UH, WERE UP, UH, THIS YEAR COMPARED TO PRIOR YEARS. 
          SO THE FIRST SLIDE HERE, WE, WE HAVE OUR PRICES, YOU'LL, YOU'LL NOTE PARTICULARLY, UH, IN THE RIGHT HAND SIDE OF THE TOP CHART. 
          THE, THE LIGHTER BLUE COLOR, UH, IS THE, THE PRICES FOR 2026 AND FOR JUNE, JULY AND AUGUST, THEY WERE AVERAGING LESS THAN IN, UH, THE PRIOR YEARS. 
          UH, PEAKER NET MARGIN IS, IS ON THE BOTTOM IN THE, UH, IN THE, THE GREEN LINE. 
          AND THE GREEN LINE IS TRENDING JUST A LITTLE LOWER. 
          BUT AS I NOTED IS, IS TRENDING AT ABOUT THE SAME LEVEL THAT WE SAW THE PEAKER NET MARGIN, UH, LAST YEAR IN THE LIGHT, LIGHT BLUE LINE SORT OF HIGHLIGHTING THE GROWTH, WE'RE LOOKING AT SORT OF AVERAGE, UH, ESSENTIALLY AVERAGE HSL FOR THE, THE SOLAR AND THE STORAGE OVER THE LAST FEW SUMMERS. 
          AND AGAIN, WE SEE CONTINUED GROWTH AND THAT DOES PLAY A ROLE IN, IN THE MARKET OUTCOMES THAT WE CONTINUE TO SEE, UH, DAY AHEAD IN REALTIME ANSARY SERVICE PRICES. 
          I'LL NOTE IN THE REALTIME ANCILLARY SERVICE PRICES WITH, UH, RTC, WE DO HAVE THOSE, THOSE PRICES, WE DIDN'T HAVE THAT IN PRIOR PERIODS, SO WE, WE CAN'T COMPARE IT AS MUCH. 
          BUT WHEN WE DO LOOK AT THE DAY AHEAD PRICES, WE DO SEE A DOWNWARD TREND FOR ANCILLARY SERVICES, UH, WITH THE EXCEPTION OF OF THE NONS SPIND PRICES. 
          BUT FOR ALL OTHER RESOURCES, ALL, ALL OVER ANCILLARY SERVICES, THEY HAVE BEEN DOWN THIS PAST SUMMER COMPARED TO OTHER PERIODS. 
          ALRIGHT, TOTAL COSTS, UH, TOTAL COSTS HAVE, HAVE, UH, ARE DOWN IN 2026 FOR ANCILLARY SERVICES, UH, RELATIVE TO LAST FEW SUMMERS, UH, IN THE DAY AHEAD. 
          AND, AND THE REAL TIME, UH, GENERALLY REFLECTS THE, THE DAY AHEAD COSTS. 
          AND, AND AGAIN, REAL-TIME CO-OP OPTIMIZATION IS PLAYING A ROLE IN IN WHAT'S HAPPENING THERE. 
          WE, WE HAVE SEEN THAT AS, AS A SIGNIFICANT BENEFIT. 
          UH, AS THERE WAS DISCUSSION IN TNS YESTERDAY, WE DO ANTICIPATE, UH, DOING SOME MORE MORE ANALYSIS TO, TO SUPPORT THE IMPACTS OF RTC, UH B, BUT IT'S BEEN A, A PRETTY SIGNIFICANT IMPACT ON, ON THE MARKET OVERALL, UH, FULLY PROCURED, UH, UH, FOR ANS SERVICES FOR MOST OF THE SUMMER. 
          THERE WAS JUST A FEW SHORTAGES, AS I NOTED, EARLY IN THE SUMMER IN JUNE, UH, AND, AND A LITTLE BIT IN IN JULY. 
          UM, UH, PART OF THE REASON IS WE, WE HAVE SEEN SOME, SOME RUCKING GOING ON TO, TO ENSURE THAT WE HAVE ADEQUATE ANCILLARY SERVICES, UM, UH, DURING THE REAL TIME CONGESTION RENT HAS, UH, AGAIN, IT'S HARD TO SEE IN, IN THE CHART ITSELF. 
          UH, THE, WE WE'RE SHOWING THE THREE SUMMER MONTHS HERE, AND ULTIMATELY CONGESTION RENT'S BEEN DOWN ABOUT, UH, 10% THIS SUMMER RELATIVE TO THE PREVIOUS, UH, PREVIOUS SUMMER. 
          SO AGAIN, ANOTHER AREA WHERE REAL TIME CO-OP OPTIMIZATION IS PLAYING A ROLE IN, IN TERMS OF OPTIMIZING THE CONGESTION ON THE SYSTEM, UH, AS DAN WAS NOTING JUST A FEW MINUTES AGO, THE RUCKS ARE UP. 
          I THINK THE BIG DIFFERENCE, UH, BESIDES BEING UP IS THAT THE CHANGE IN THE NATURE OF THE RUCKS, THE RUCKS IN, IN THE LAST YEAR IN 2025, OR RELATED TO TRANSMISSION, UH, PRIMARILY, AND THIS YEAR IT'S FOR CAPACITY. 
          AND THAT CAPACITY WAS PRIMARILY, AS DAN NOTED TO ENSURE SUFFICIENT ANCILLARY SERVICE QUANTITIES. 
          AND THEN, UM, I BELIEVE THIS IS MY FINAL SLIDE, UH, ACTUALLY NO, I HAVE ONE MORE SLIDE. 
          UH, WE DO LOOK AT HOW ENERGY STORAGE RESOURCES ARE OFFERING INTO THE REAL TIME MARKET. 
          WHAT WE SEE IS TWO, TWO SORT OF TRENDS IS THAT ONE, THE, THE QUANTITY OF, OF, UH, ESR CAPACITY OFFERED IN THE MARKET HAS INCREASED RELATIVE TO THE PREVIOUS, PREVIOUS TWO SUMMERS. 
          AND, UH, THE PRICE LEVEL IN TERMS OF HOW MUCH THEY'RE OFFERING AT THE CAP IS ALSO INCREASED. 
          BUT I THINK PART OF THE REASON WHY WE SEE THAT CHANGE HAS TO DO WITH THE CHANGE IN THE CAP, UH, THE REALTIME SYSTEM WIRE OFFER CAP AS A, SO AS A RESULT OF REALTIME CO-OP OPTIMIZATION, THAT CAP WAS LOWERED FROM 5,000 TO 2000. 
          AND, AND THAT'S ONE OF THE REASONS WHY WE'RE SEEING A HIGHER INSTANCE THIS YEAR RELATIVE TO THE PRIOR YEARS. 
          AND THEN THE FINAL SLIDE IS SHOWING THE CONTRIBUTION OF, UH, ANCILLARY 
          [01:25:01]
SERVICE, UH, ESRS TO ANCILLARY SERVICES. 
          WE CONTINUE TO SEE A GROWTH OF, UM, ESR CAPACITY IN THE AS MARKET, UH, SLIGHT D DOWNTURN FOR THE RS PRODUCT, BUT FOR ALL OTHER PRODUCTS, INCLUDING NONS SPEND AND, UH, UM, AND ECRS ARE UP RELATIVE TO WHERE THEY WERE IN PRIOR YEARS. 
          SO AGAIN, STILL A STRONG PARTICIPATION IN THE E ES MARKET, UH, ESR IN THE ES MARKET FOR DAY AHEAD AND REAL TIME. 
          ALRIGHT, AND THAT TAKES THE END OF MY PRESENTATION. 
          ANY QUESTIONS FOR ME? ANY QUESTIONS? OKAY. 
          ALRIGHT, WE'LL THANK YOU TO THE NEXT AGENDA ITEM THEN. 
          UH, J ITEM 16 
          [16. Consent Agenda]
IS THE CONSENT AGENDA, INCLUDING ITEM 16.1 UNOPPOSED REVISION REQUEST RECOMMENDED BY TAX FOR APPROVAL. 
          UH, CHAD, PLEASE, UH, PROCEED WHEN PROVIDING BUDGET IMPACTS OF THE REVISION REQUESTS THAT REMAIN ON THE CONSENT AGENDA. 
          OKAY. 
          THERE ARE 31 REVISION REQUESTS ON THE CONSENT AGENDA. 
          UM, OUT OF THOSE 31 THAT WHEN YOU LOOK AT THE TOTAL BUDGET IMPACT ON THOSE THAT HAVE THAT IMPACT IS BETWEEN 4.4 MILLION AND 6.36 MILLION. 
          THERE IS ONE REVISION REQUEST, WHICH IS NPR 1286, THAT HAS A 0.5 FTE IMPACT, BUT WE CAN ABSORB THAT THROUGH OUR BUDGET. 
          AND WHEN YOU LOOK AT THESE 31 REVISION REQUESTS, MOST OF THEM ARE GONNA FIT INTO STRATEGIC PILLAR ONE, WHICH DEALS WITH GRID RELIABILITY AND RESILIENCY, AND THEN THE REMAINDER WOULD BE IN, UH, ECONOMIC COMPETITIVENESS OR ADVANCING ERCOT. 
          AS PART OF OUR STRATEGIC PILLARS, I WOULD HIGHLIGHT THAT NPR 1328, WHICH IS THE ESTABLISHMENT OF THE GENERATION FIRMING PROGRAM, IS ON THE CONSENT AGENDA. 
          THAT WAS OBVIOUSLY A LEGISLATIVE REQUIREMENT. 
          WE'RE MOVING THAT FORWARD. 
          THAT DOES HAVE A BUDGETARY IMPACT OF 1 MILLION TO 1.5 MILLION AND IS A PROJECT DURATION OF 18 TO 24 MONTHS TO IMPLEMENTATION. 
          HAPPY TO ANSWER ANY QUESTIONS. 
          OKAY. 
          ANY QUESTIONS FOR CHAD ON THE UNOPPOSED REVISION REQUEST? THANKS, CHAD. 
          UH, IF THERE'S NO DISCUSSION, I'LL ENTERTAIN A MOTION TO APPROVE THE CONSENT AGENDA. 
          THANK YOU, BILL. 
          SECOND. 
          SECOND, KATHLEEN. 
          THANK YOU. 
          ALL IN FAVOR? AYE. 
          AYE. 
          ANY OPPOSED? ANY ABSTENTION? OKAY. 
          THE CONSENT AGENDA IS APPROVED. 
          NEXT IS AGENDA, UH, 
          [17. TAC Report]
17. 
          I'M GONNA INVITE, UH, CAITLYN SMITH, CHAIR OF THE TECHNICAL ADVISORY COMMITTEE TO PRESENT AGENDA ITEM 17, THE TAC REPORT. 
          CAITLIN, PLEASE PROCEED WITH YOUR REPORT THROUGH AGENDA ITEM 17.1 0.1, WHICH IS PI 1 44, UH, KNOWN AS DYNAMIC MODEL SUBMISSION REVIEW REQUIREMENTS FOR LARGE LOADS, INCLUDING LARGE ELECTRONIC LOADS. 
          ALL RIGHT. 
          SHE STARTED LOWERING IT FOR ME, BUT IT STILL WASN'T LOW ENOUGH. 
          UM, I ALWAYS GO AFTER DAN, SO IT'S TOO TALL. 
          GOOD MORNING. 
          UM, I'M CAITLYN SMITH. 
          I'M CHAIR OF THE TECHNICAL ADVISORY COMMITTEE. 
          WE ARE HERE COVERING OUR JULY AND AUGUST MEETINGS. 
          WE RECOMMENDED APPROVAL OF 32 REVISION REQUESTS, WHICH IS QUITE A LOT. 
          ONE OF THOSE P 1 44, UM, DID HAVE OPPOSING VOTES. 
          AND THEN WE, YOU KNOW, I REALLY DON'T WANNA SAY WE DIDN'T DO THINGS OR WE FAILED TO DO THINGS, BUT, UH, WE HAD A VERY LONG DISCUSSION ON THE 2027 ANCILLARY SERVICE METHODOLOGY, WHICH WE WILL GET TO. 
          I ALSO WANTED TO NOTE, UM, WE HAD A SPECIAL TAC WORKSHOP IN AUGUST TO DISCUSS THE INDEPENDENT MARKET MONITOR STATE OF THE MARKET REPORT. 
          UH, THIS IS SOMETHING I HAD REQUESTED OF JEFF AND HE OBLIGED. 
          I THOUGHT IT WOULD BE A REALLY GOOD FORM FOR TAC TO HAVE SOME OF THE DISCUSSIONS THAT COME UP SOMETIMES IN A CIRCULAR FASHION. 
          UM, YOU KNOW, MARKET SIGNALS, IS THE MARKET WORKING, THOSE TYPE OF TYPES OF CONVERSATIONS. 
          SO THE, THE SEPARATE WORKSHOP WAS SORT OF THE RESULT OF SCHEDULING CONFLICTS, BUT IT WORKED OUT REALLY WELL, AND I THINK IT'S WORTH RE REPEATING IN FUTURE YEARS. 
          UM, SO I WANTED TO THANK THE MARKET MONITOR AND, UH, PUC STAFF AS WELL. 
          PUC STAFF PARTICIPATED A LOT IN THAT, AND I THINK TECH MEMBERS FELT THAT WAS REALLY HELPFUL. 
          SO HERE ARE OUR UNOPPOSED REVISION REQUESTS. 
          WE HAVE TWO SLIDES, UH, 31 UNOPPOSED REVISION REQUESTS, A COUPLE NOTABLE NPR, UM, THAT FIRST 1, 12 14, THE RDPA FIX, UM, TO PROVIDE LOCATIONAL SIGNALS. 
          THAT IS SOMETHING THAT STAKEHOLDERS IN ERCOT HAD BEEN WORKING ON FOR QUITE SOME TIME. 
          STAKEHOLDERS BECAME MORE INTERESTED IN PASSING IT THROUGH, UM, WHEN WE WERE HAVING THE DISCUSSIONS ON PASSAGE OF CONTRACTS FOR CAPACITY. 
          SO REALLY, YOU KNOW, REVISING THE PRICE CENTER TO SEND BETTER LOCATIONAL SIGNALS BECOMES MORE IMPORTANT AS WE ARE INCREASINGLY USING RUCK AND MAYBE CONTRACTS FOR 
          [01:30:01]
CAPACITY TO SOLVE LOCATIONAL ISSUES. 
          SO ERCOT MARKET STAFF, UM, WORKED ON THAT WITH STAKEHOLDERS AND, AND I THINK WE WERE REALLY PLEASED WITH THE OUTCOME. 
          UH, NPR 1328, CHAD JUST NOTED WAS THE ESTABLISHMENT OF THE GENERATION FIRMING PROGRAM THAT WAS A PRIORITY ITEM, UM, FROM THE PUC RULE FROM HB 1500. 
          AND IT STARTS APPLYING TO RESOURCES WITH THE SIGNED INTERCONNECT OF, OF JAN ONE OF NEXT YEAR. 
          SO WE NEEDED THAT APPROVAL BY THE END OF THE YEAR, WE'RE ON TRACK TO DO THAT. 
          UM, NPR 1335 WAS IMPLEMENTATION OF FROM PURE SUPPLY SERVICE FOR PHASE THREE. 
          AND THEN, UH, NPR 1337 WAS ERS ENHANCEMENTS, WHICH WAS ANOTHER ATTACK PRIORITY. 
          AND THEN YOU'LL SEE WE HAD SEVERAL KIND OF FOLLOW ON REVISION REQUESTS RELATED TO NPR 1264, WHICH WAS CREATION OF A NEW ENERGY ATTRIBUTE CERTIFICATE PROGRAM. 
          SO WE JUST HAD, UH, ONE REVISION REQUEST WITH OPPOSING VOTES. 
          THIS IS THE ANCILLARY SERVICE METHODOLOGY. 
          WE'LL GO BACK TO THIS, I BELIEVE HERE IS OUR SLIDE WITH OUR PRIORITY ITEMS. UH, THE WAY OUR TAX SCHEDULE WORKS, WE ARE SORT OF FRONT LOADED WITH MEETINGS. 
          WE HAVE MEETINGS EVERY MONTH, JANUARY THROUGH MAY, AND THEN FOUR MEETINGS OUT OF THE LAST SEVEN MONTHS. 
          SO THIS IS A GOOD TIME FOR REVIEW. 
          UM, ON THE COMPLETED OR ADDRESSED ITEMS, YOU'VE SEEN THESE AT PREVIOUS MEETINGS. 
          MOST WERE AT THE, THE JUNE BOARD MEETING. 
          THESE ARE ALL REALLY MAJOR ACCOMPLISHMENTS. 
          UM, AND AGAIN, YOU KNOW, THANK YOU TO MARTHA HENSON AND TO TAC AND TO ERCOT, BUT USUALLY IN A TYPICAL YEAR, I'D SAY WE'D SEE LIKE TWO OR THREE OF THOSE. 
          AND THAT IS FIVE THAT, UH, WE DID THROUGH JUNE. 
          AND THEN ANOTHER THREE OF THOSE OF THE IN PROCESS ARE BEFORE YOU TODAY. 
          SO WE HAVE HAD A, A REALLY HEAVY YEAR. 
          SO THE, THE CONTRACTS FOR CAPACITY, I JUST MENTIONED THAT WITH THE RELATED WORK ON NPR 1214. 
          SO YOU'LL SEE WE'RE DOING A LOT OF FOLLOW THROUGH WHEN WE SAY WE CAN PASS THIS, BUT WE NEED TO ADDRESS OTHER THINGS. 
          WE GO BACK AND ADDRESS THE OTHER THINGS MOST OF THE TIME, HOPEFULLY. 
          UM, AND THEN THE BATCH ZERO STUDY PROCESS, OF COURSE, THE BATCH STUDY IS AN ONGOING ITEM, DRRS CREATION OF A WHOLE NEW ANCILLARY SERVICE, LARGE ELECTRONIC THROUGH RIDE THROUGH LARGE ELECTRONIC LOAD RIDE THROUGH REQUIREMENTS, AND THE FIRM FUEL SUPPLY SERVICE, WHICH IS ONGOING. 
          UM, THREE OF THE INPRO ITEMS ARE BEFORE YOU TODAY, THE NPRR ON THE ERS ENHANCEMENT. 
          UH, THE NPR ON GENERATION FIRMING AND THE 2027 ANCILLARY SERVICE METHODOLOGY. 
          THE OTHER TWO ARE IN PROCESS, THE, UM, ENERGY STORAGE, RESOURCE INCLUSION, AND DRS IS NPRR 1340. 
          AND THEN THE BATCH STUDY, UH, ONE AND ONGOING AND THE COMPREHENSIVE TRANSMISSION PLANNING, ERCOT STA STARTED THOSE WORKSHOPS. 
          UM, AND I BELIEVE THE CURRENT TIMELINE IS APRIL, AND I THINK AS IN BATCH ZERO ATTACK WILL BE LOOKING INTO SORT OF THE COLLABORATIVE CIRCLE OF FEEDBACK WE HAD WITH BATCH ZERO WITH, UH, STAKEHOLDERS ERCOT STAFF, OR GOT BOARD COMMISSION STAFF WAS, WAS VERY INVOLVED AND HELPFUL AND THE, THE COMMISSION AS WE DID THROUGH BATCH ZERO. 
          ALL RIGHT, I WILL GO ON TO THE REVISION REQUEST OF OPPOSING VOTES UNLESS THERE'S ANY QUESTIONS. 
          SO, PI 1 44 CLARIFIES REQUIREMENTS FOR SUBMITTING DYNAMIC MODEL DATA FOR LARGE LOADS TO ENSURE ACCURATE REPRESENTATION OF THOSE IN KOTS MODELS. 
          UH, A COUPLE OF ITEMS IN THIS ARE RELATED TO THE PREVIOUSLY PASSED NO GR 2 82 ON RIDE THROUGH REQUIREMENTS. 
          UM, IT RE REQUIRES MODEL QUALITY TESTS, DEMONSTRATING VOLTAGE RIDE THROUGH CAPABILITY FOR ALL LOADS AND MODEL VALIDATION REPORTS, BENCHMARKING MODELS AGAINST THE ACTUAL HARDWARE TESTS FOR LARGE COMPUTATIONAL LOADS. 
          UM, ALSO CLARIFIES THE MATERIAL CHANGES TO A LARGE COMPUTATIONAL LOAD THAT COULD IMPACT RIDE THROUGH CAPABILITY MUST BE REVIEWED. 
          SO THERE'S A LOT OF CONVERSATIONS SORT OF GOING BACK TO THOSE LARGE, UM, COMPUTATIONAL LOAD RIDE THROUGH REQUIREMENTS. 
          WE DID HAVE THREE OPPOSING VOTES AND FOUR ABSTENTIONS. 
          THE THREE OPPOSING VOTES WERE ALL FROM THE CONSUMER SEGMENT, SO THE TWO LARGE INDUSTRIAL CONSUMERS AND ONE OF THE COMMERCIAL CONSUMERS. 
          THE THREE ABSTENTIONS ALSO IN THE CONSUMER SEGMENT, THE TWO RESIDENTIAL CONSUMERS AND THE, UM, OTHER COMMERCIAL CONSUMER. 
          AND THEN ONE ADDITIONAL ABSTENTION FROM THE INDEPENDENT RETAILER SEGMENT OF THE THREE NOS, WE ONLY RECEIVED AN OPPOSING VOTE EXPLANATION FROM ONE OF THE INDUSTRIAL CONSUMERS. 
          BASICALLY, THEY BELIEVE THIS EXTENSION OF THE REQUIREMENTS, 
          [01:35:01]
UM, FROM NO GO 2 82, SOME OF THE DYNAMIC MODELING REQUIREMENTS EXTENDED TO TRADITIONAL INDUSTRIAL MANUFACTURING FACILITIES THROUGH THIS, UM, REVISION REQUEST, THEY DIDN'T BELIEVE ERCOT DEMONSTRATED THE NEED TO EXTEND THAT DYNAMIC MODELING OBLIGATION ONTO THE NON-COMPUTATIONAL LOADS. 
          OKAY, ANY QUESTIONS ON THAT? ANY QUESTIONS FOR CAITLYN? OKAY, CAITLYN, WE'LL INVITE YOU BACK IN A FEW MINUTES TO, UH, TALK ABOUT, UH, ANCILLARY SERVICES METHODOLOGY. 
          OKAY? UH, THE BOARD HAS NOT RECEIVED ANY, UH, REQUESTED COMMENT ON PI, UH, 1 44 UNDER THE NEXT AGENDA ITEM, WHICH IS 17.1 0.2, UH, WHICH IS ER COTS, UH, COMMENTS ON PIG 1 44 AND THE AGENDA ITEM 17.1 0.3. 
          OTHER COMMENTS ON P 1 44? IF THERE'S NO DISCUSSION, I'LL ENTERTAIN A MOTION TO APPROVE P 1 44. 
          KATHLEEN A SECOND FROM CHRIS. 
          THANK YOU. 
          ALL IN FAVOR? AYE. 
          ANY OPPOSED? ANY OF STITCHES? OKAY. 
          PARAGRAPH 1 44 IS APPROVED. 
          THE NEXT AGENDA ITEM IS, UH, GONNA BE A MORE LENGTHY ONE. 
          IT'S AGENDA 
          [18. 2027 ERCOT Methodologies for Determining Minimum Ancillary Service Requirements ]
ITEM 18, UH, WHICH IS THE 2027 ERCOT METHODOLOGIES FOR DETERMINING BENARY MINIMUM ANCILLARY REQUIREMENTS. 
          UH, WE PREVIEW RE PREVIEWED THESE PROPOSED METHODOLOGIES AT THE JUNE BOARD MEETING. 
          THE BOARD HAS REVIEWED THE PROPOSED METHODOLOGY AND WILL NOW ENTERTAIN COMMENTS BEFORE WE TAKE A VOTE. 
          AND I SAID EARLIER WE WOULD HAVE, UH, SEVERAL COMMENTERS ON THIS ONE. 
          UH, CAITLYN'S GONNA COME BACK UP, AND SO CAITLYN, IF YOU'D MAKE YOUR WAY BACK UP, UH, SHE'S GONNA PRESENT ON BEHALF OF TAC AND THEN, OH, I'M SORRY, I, I GOT THAT WRONG. 
          WE'RE GONNA HAVE ERCOT FIRST. 
          UH, WE'RE GONNA HAVE A, THEY COULD, UH, TALK ABOUT, UH, ERCOT COMMENTS, THEN TAC, THEN IMM, THEN RESIDENTIAL CONS, UH, CUSTOMERS, THEN VISTA, THEN TEXAS RE. 
          SO, UH, WITH THIS WE'LL BEGIN WITH, UH, NAN WOODFORD ANDIKA, UM, MAGO PRESENTING ERCOT STAFF'S PROPOSAL. 
          SO, HELLO EVERYONE. 
          I AM HERE TO PROVIDE, UH, YOU, UH, OR SHARE WITH YOU THE PROPOSED 2027 AS METHODOLOGY AND, AND REQUEST THE CARD BOARD TO RE RECOMMEND APPROVAL OF THE PROPOSED CHANGES PRO FROM A PROCESS PERSPECTIVE, THE  PROTOCOLS REQUIRE  TO REVIEW THE AS METHODOLOGY ON AN ANNUAL BASIS. 
          UH, IT, IT, UH, THE CARD BOARD MUST, UH, REVIEW AND RECOMMEND APPROVAL OF ANY SUCH CHANGES. 
          CAN YOU PULL IT BACK CLOSER, PLEASE? YEP. 
          THANK YOU. 
          AM I NOT TOO, LET'S SEE. 
          BETTER? YEAH, LET'S SEE IF I CAN KEEP IT THERE. 
          ALRIGHT, SO FROM A PROCESS PERSPECTIVE, THE WE ARE HERE BECAUSE OF THE PROCESS THAT'S OUTLINED IN THE PROTOCOLS. 
          WE REVIEW THE METHODOLOGY ANNUALLY, ANY RECOMMENDED CHANGES. 
          THE BOARD, UH, IS REQUIRED TO REVIEW AND RECOMMEND APPROVAL OF FOLLOWING BOARD ACTION. 
          WE WILL REQUEST THE BUC TO, UH, TO APPROVE THE PROPOSED AS METHODOLOGY SO THAT IT CAN BE EFFECTIVE ON JAN 1, 20 27. 
          SO EVERYTHING WE'LL TALK ABOUT TODAY WILL APPLY BEGINNING JAN 1 20 27 IF APPROVED. 
          AT A HIGH LEVEL, IF I WERE TO TALK TO YOU ABOUT THE RED LINES, YOU WILL SEE IN THE AS METHODOLOGY, THERE ARE MAYBE TWO SEGMENTS. 
          THE REGULATION AND RESPONSIVE RESERVE SERVICE. 
          SO THE SERVICES THAT WE PROCURE PRIMARILY TO MAINTAIN FREQUENCY, THERE ARE NO PROPOSED CHANGES, UH, IN THE, IN THE METHODOLOGY FOR 2027. 
          SO WHAT YOU WILL SEE IS THE QUANTITIES, WHEN I GET TO A SLIDE ON THIS PARTIC ON THOSE TWO PARTICULAR RESERVES, SIMPLY REFLECTS MOVING FORWARD OF HISTORY. 
          SO BRINGING UP MORE RECENT INFORMATION INTO THE METHODOLOGY IN CASE OF THE UNCERTAINTY PRODUCTS, THE 10 MINUTE RESERVE, UH, CART CONTINGENCY RESERVE SERVICE, AND THE 30 MINUTE RESERVE NON SPENDING RESERVE SERVICE, UH, CART IS PROPOSING CHANGES TO THE PARAMETERS USED WITHIN THE PROBABILISTIC MODEL. 
          THERE ARE TWO PRIMARY CHANGES. 
          ONE APPLIES TO THE HEADROOM CREDIT THAT, UH, THAT IS USED WHEN SETTING THE QUANTITIES, AND THE OTHER ONE IS TO THE TARGET RESERVE LEVEL. 
          I WILL DELVE INTO ALL OF THE DETAILS, UH, AS WE STEP THROUGH THE SLIDES. 
          BUT BEGINNING WITH I, UH, IN THE NEXT SLIDE, I WANT TO LAY OUT, UH, THE BACKGROUND ON ANCILLARY SERVICES AND WHERE THE DISCUSSION, UH, HAS BEEN IN THIS PARTICULAR ROUND OF REVIEWS. 
          SO, ANCILLARY SERVICES ARE NEEDED FOR TWO GENERAL REASONS. 
          ONE, TO MAINTAIN FREQUENCY, CONTINUOUSLY MAINTAIN FREQUENCY, AND THE OTHER TO ENSURE SUFFICIENT CAPACITY AND ENERGY IS AVAILABLE IN A TIMELY MANNER TO COVER FORECAST ERRORS AND FORCED OUTAGES. 
          [01:40:01]
QUANTITIES FOR ANCILLARY SERVICES ARE BASED ON RISK DRIVERS, SUCH AS AMOUNT OF INTERMITTENT RESOURCES, SERVING LOAD FORECAST ERRORS IN THE LOAD, WIND AND SOLAR FORECAST THAT WE RECEIVE PROBABILITY OF OUTAGES, UNCERTAINTY IN THE BATTERY, ENERGY STORAGE, STATE OF CHARGE MANAGEMENT SYSTEM INERTIA, AND EVEN THE SIZE OF OUR LARGEST RESOURCE. 
          NOW, SOMETHING TO KEEP IN MIND IS AS WE START TALKING ABOUT THE METHODOLOGY, WE TEND TO FOCUS ON CERTAIN RISKS THAT WE USE TO QUANTIFY A PARTICULAR ANCILLARY SERVICE QUANTITY. 
          SO ONE THING TO KEEP IN MIND IS, EVEN THOUGH WE MAY BE FOCUSING ON SETTING QUANTITIES OUT OF A PARTICULAR, UH, RISK FACTOR, THERE CAN BE SEVERAL DIFFERENT REASONS FOR WHICH THESE ANCILLARY SERVICES MAY BE USED, USED FOR. 
          NOW, FROM A METHODOLOGY PERSPECTIVE HERE IN THE PAST FEW YEARS, WHAT WE'VE SEEN IS REGULATION AND RESPONSIVE RESERVE HAVE BEEN FAIRLY STABLE IN THE APPROACH THAT WE USE TO COMPUTE THE QUANTITIES. 
          THERE HAS BEEN GENERAL AGREEMENT, THE QUANTIT, THE IMPACTS YOU SEE, OR THE MOVEMENT YOU SEE IN THESE QUANTITIES AS A RESULT OF UPDATING OR REFRESHING THE HISTORY THAT THOSE MODELS OR THOSE COMPUTE COMPUTATIONS USE. 
          IN CASE OF ECRS AND NONS SPIN, THERE HAS BEEN, THE METHODOLOGY HAS BEEN EVOLVING. 
          WE HAVE TRANSITIONED TO A PROBABILISTIC APPROACH TO SET THOSE QUANTITIES. 
          THIS IS WHERE A LOT OF THE DISCUSSION IS FOCUSED. 
          THIS IS WHERE, UH, DIFFERENT PERSPECTIVES OR DIFFERENT STAKEHOLDERS HAVE DIFFERENT PERSPECTIVES AROUND THE LEVEL OF RISK TO TAKE. 
          AND REALLY THE MOST PART OF TODAY WILL BE SPENT TALKING ABOUT HOW TO SET THE REQUIREMENTS FOR ECRS IN NONS SPEND. 
          SO WHAT I'LL DO IS I'LL TRANSITION FROM HERE AND TALK TO YOU ABOUT WHAT APPROACH WE USED IN DEVELOPING THE 2027 AS METHODOLOGY. 
          AND AS THE CHAIR POINTED OUT, WE WERE HERE IN JUNE PREVIEWING THE, UH, PREVIEWING THE AS METHODOLOGY. 
          AND WE SPENT SOME TIME TALKING TO YOU ABOUT THE THREE TOPICS OR THE THREE ISSUES WE EXPECTED TO FOCUS MOST OF OUR ATTENTION ON DURING THAT TIME. 
          WE HAD ALSO SHARED THAT WE WOULD, AS A PART OF WORKING ON THE 2027 METHODOLOGY, RUN SENSITIVITY ANALYSIS ON EACH OF THOSE PARAMETERS THAT, UH, UH, THAT ARE CONTENTIOUS OR HAVE, UH, AT THAT DIFFERENT, UH, PER HAVE DIFFERENT PERSPECTIVES ON. 
          NOW SINCE THEN, WE WENT BACK TO THE STAKEHOLDERS. 
          WE REQUESTED INPUTS ON THE VARIETY OF PARAMETERS OR THE SENSITIVITIES IN EACH PARAMETERS TO TEST, AND WE ENDED UP RUNNING 900 DIFFERENT SCENARIOS THROUGH THE PROB THROUGH THE PROBABILISTIC MODEL. 
          AS WE WENT THROUGH DEVELOPING THE, UH, OUR, OUR RECOMMENDATION FOR THE 2027 AS METHODOLOGY RESULTS FROM ALL THOSE 900 SCENARIOS ARE AVAILABLE AND CAN BE TRACED THROUGH OUR STAKEHOLDER PROCESS. 
          BUT ULTIMATELY WHAT YOU SEE IN FRONT OF YOU TODAY IS EARHART'S RECOMMENDATION DERIVED THROUGH THOSE, UH, THROUGH THOSE ASSESSMENTS THAT WE RAN, AND EVEN THE OUTLOOK OF RISKS WE SEE EVOLVING ON THE GRID AS WE MOVE INTO 2027. 
          SO NOW I WANNA LAY OUT WHERE I'LL HEAD TO NEXT. 
          UH, UH, I WANT TO SPEND QUITE A BIT OF TIME TALKING TO YOU ABOUT WHAT ARE THE TYPE OF IMPROVEMENTS THAT WILL HELP ERCOT MAINTAIN THE LEVEL OF RELIABILITY IT NEEDS, UH, UH, IN THE, IN THIS WORLD, IN THE GRID THAT WE EXPECT TO BE MORE TRANSITIONING TOWARDS OUR EVOLVING TOWARDS AS, AS WE MOVE INTO 2027. 
          AFTER THAT, I'LL SPEND SOME TIME TALKING ABOUT EACH OF THOSE POLICY ISSUES AND WHY WE ARE PROPOSING WHAT WE ARE PROPOSING, SO YOU HAVE A GOOD PERSPECTIVE. 
          AND THEN FINALLY GET INTO SHARING THE IMPACT OF THOSE PROPOSALS. 
          SO THAT SAID, LET, LET'S DEL RIGHT INTO WHAT ARE THOSE IMPROVEMENTS? SO KARTS CONTINUES. 
          KARTS GRID CONTINUES TO GET MORE COMPLEX AND UNCERTAIN. 
          WE HAVE MORE, MORE AND MORE INVERTER BASED RESOURCES THAT ARE CONNECTING INTO OUR GRID, MORE LOAD, MORE DURATION, LIMITED RESOURCES. 
          NOW, IN, IN THIS SORT OF AN ENVIRONMENT, AIRHART SEES THE NEED TO MAKE SEVERAL IMPROVEMENTS TO BOTH OUR MARKET, THE SOLUTIONS, AND EVEN THE OPERATIONAL TOOLS THAT WE USE. 
          WHAT WE WANT TO DO, OR WHAT WE INTEND TO DO AS WE HEAD INTO 2027, IS TO GO REVISIT THE PROBABILISTIC MODEL THAT HAS BEEN BUILT TO COMPUTE THE ECRS AND NONS SPENT REQUIREMENTS AND UPDATE IT SO THAT IT ACCOUNTS NOT JUST FOR THE MEGAWATT ERROR IN UNCERTAINTY THAT WE SEE, BUT ALSO MEGAWATT HOURS. 
          SO ALSO THE ENERGY UNCERTAINTY THAT THE GRID HAS TO DEAL WITH. 
          THE SECOND THING WE WANT TO WORK ON IN 2027, WE THINK IS VERY CRITICAL, IS TO DEVELOP AND IMP IMPLEMENT 
          [01:45:01]
IMPROVED ANCILLARY SERVICE DEMAND CURVES SO THAT THEY CAN SEND STRONGER SIGNALS TO MARKET THAT AND THEY CAN SELF COMMIT RESOURCES. 
          AND YOU'VE HEARD DAN MENTION A LITTLE BIT ON THIS TOPIC WHEN, UH, WHEN HE WAS TALKING ABOUT, UH, HIS SUMMER OUTLOOK AND THE ROCKS THAT YOU'RE SEEING, THIS IS THE SAME THEME. 
          THERE IS A VALUE TO REVISITING THOSE DEMAND CURVES AND ENSURING THAT THEY'VE, THEY ARE SET IN A MANNER THAT REFLECTS THE RELIABILITY NEEDS PRESENTED THROUGH THE ANCILLARY SERVICE PLAN. 
          UM, AND THEN LASTLY, IN 2028, WE WANT TO TRANSITION THE, THE ANNUAL AS METHODOLOGY SO THAT IT HAS TWO PARTS. 
          THE FIRST PART IS VERY SIMILAR, UH, TO HOW WHAT WE DO TODAY IS SET THEIR QUANTITIES ANNUALLY IN DECEMBER. 
          BUT THE SECOND PART ARE IMPROVEMENTS OR TOOLS THAT ALLOW US TO SET THE QUANTITY OF ANCILLARY SERVICES OR THE AS REQUIREMENTS BASED OFF OF THE FORECASTED UNCERTAINTY THAT WE SEE CLOSER TO REAL TIME, TWO TO THREE DAYS OUT, AND THE OPERATIONAL RISKS THEY MAY BRING. 
          NOW, WHAT THIS TWO PART APPROACH WILL LET US DO IS IT'LL LET US SET THE ANNUAL QUANTITIES AT A LEVEL LOWER THAN WHERE IT IS SET TODAY, BECAUSE WE CAN RELY ON THE CLOSER TO REAL TIME LOOK TO COVER ANY OF THE TAILS OR THE EXTREME UNCERTAINTIES THAT WE MAY SEE. 
          WHEN YOU LOOK AT, UH, WHEN YOU LOOK AT THE PROPOSED 2026 METHODOLOGY AND THE OUTCOMES, ONE WAY TO THINK ABOUT WHAT'S GOING ON WITH THE PROPOSALS THAT WE COME UP WITH IS THESE ARE SETTING REQUIREMENTS FOR EVERY MONTH HOUR BASED OFF OF THE WORST CASE UNCERTAINTY WE'VE HISTORICALLY SEEN THE DYNAMIC APPROACH THAT WE ARE TALKING ABOUT WILL LET US ADDRESS THE TAILS THROUGH A CLOSER TO REALTIME LOOK AND RELIEVE OR PROVIDE RELIEF TO THE ANNUAL METHODOLOGY SO IT DOESN'T HAVE TO COVER AS EXTREME OF A UNCERTAINTY GOING INTO THE YEAR. 
          SO THAT'S THE BENEFIT OF TRANSITIONING, UH, TO 2020 TO A DYNAMIC APPROACH. 
          AND WE HOPE TO GET LEAD, UH, I MEAN, WE HOPE TO WORK WITH THE STAKEHOLDERS AND HEAD IN THAT DIRECTION IN ABOUT TWO YEARS NOW TILL THESE CHANGES ARE MADE, TILL THESE IMPROVEMENTS ARE MADE, IT, IT IS PREMATURE TO DIAL DOWN THE LEVEL OF RISK FOR WHICH, UH, COURT PROCURES ANCILLARY SERVICES. 
          AND THAT'S REALLY THE KEY TAKEAWAY, UH, FROM OUR PERSPECTIVE AND, AND ALL OF THE PROPOSED, UH, PARAMETERS YOU WILL HEAR ME TALK ABOUT. 
          IT'S THIS THROUGH, IT'S THROUGH THIS LENS THAT, UH, THAT WE HAVE BEEN WORKING OUR WAY INTO DEVELOPING THOSE RECOMMENDATIONS. 
          SO I'LL MOVE ON AND TRANSITION TO NOW TALKING ABOUT EACH OF THOSE ISSUES THAT HAVE BEEN AT THE FORE OF THE CONVERSATION, STARTING WITH THE ISSUE TO HAVE THE ABILITY TO RECOVER REGULATION AND RESPONSIVE RESERVE THROUGH THE, UH, THROUGH THE UNCERTAINTY PRODUCTS. 
          NOW IN REAL TIME WHEN A LARGE UNIT TRIPS REGULATION AND RESPONSIVE RESERVE PLAY, THE ARE THE FIRST LINE OF DEFENSE THAT COME IN AN ARREST FREQUENCY AUTOMATICALLY AND THEN HELP RESTORE FREQUENCY. 
          NOW, ONCE THAT ACTION HAS OCCURRED, THERE IS AN ANOTHER ACTION THAT NEEDS TO OCCUR, WHICH IS TO REPLACE THE GAP THAT GOT CREATED IN THE DISPATCH WHEN WE LOST THE UNIT. 
          AND THAT REPLACING THAT GAP IS ESSENTIAL BECAUSE IT HELPS RESTORE THE DEPLOYED FREQUENCY RESERVES. 
          UH, NOW ECNR, UH, UH, THE WAY WE WAS SET UP, OUR SYSTEM, ECRS AND NON SPEN PROVIDE US THAT ABILITY TO RESTORE REGULATION AND RRS. 
          NOW, UH, ACOT CANNOT ALWAYS COUNT ON HEADROOM BEYOND THE RESERVES. 
          WE PROCURE AS ALWAYS BEING AVAILABLE BECAUSE WHEN IT'S NEEDED THE MOST, IT IS POSSIBLE THAT HEADROOM THAT WE'VE HISTORICALLY SEEN MAY BE USED TO SERVE LOAD. 
          UH, AND IF THAT HEADROOM ISN'T THERE AND THE LEVEL OF ECRS AND NONS SPIN WE ARE PROCURING IS INSUFFICIENT, ERCOT MAY HAVE TO SHED FIRM LOAD TO MAINTAIN FREQUENCY AND FREQUENCY RESPONSIVE MARGIN. 
          NOW, IN CONTEXT OF THIS, WE'VE QUITE FREQUENTLY REFERRED TO, HEY, THIS SORT OF POSTURE IS NECESSARY BECAUSE WE ARE TRYING TO STAY WITHIN THE RULES THAT NERC HAS ENFORCED ON US AS FAR AS MAINTAINING FREQUENCY, BALANCING SUPPLY AND DEMAND, AND THE UNDERLYING INTENT BETWEEN THOSE RULES. 
          WHAT I DO WANT TO BE VERY CLEAR ON IS WHEN WE SAY THAT WE ARE NOT CLAIMING THAT THERE IS A PARTICULAR RULE IN THE NERC REQUIREMENTS, WHICH SAYS RESTORE A HUNDRED PERCENT OF YOUR REGULATION AND RRS, WHAT, UH, WHAT THOSE NERC REQUIREMENTS ARE WRITTEN FOR IS THEY ARE WRITTEN AS A COMMON 
          [01:50:01]
MINIMUM THAT APPLY TO ALL BALANCING AUTHORITIES IN NORTH AMERICA. 
          AND THE RISK TOLERANCE YOU SEE DEFINED IN THOSE IS FROM, IS TYPICALLY FROM THE LENS OF A BA THAT IS SYNCHRONOUSLY CONNECTED TO OTHER REGION, TO OTHER BAS. 
          SO EXACTLY THE TYPE OF EVENT THAT WORRIES US IN CASE OF THESE OTHER VAS, WHEN THAT, UH, WHEN THEY, WHEN THEY DO SURVIVE OR ARE ABLE TO COVER THEIR WORST CONTINGENCY, IF ANOTHER MORE SEVERE EVENT OR A SUBSEQUENT EVENT WERE TO OCCUR, THEY CAN SIMPLY LEAN ON THEIR NEIGHBORS TO GET THAT ADDITIONAL CAPACITY NEEDED. 
          A COURT DOES NOT HAVE SUCH NEIGHBORS AS THE SOLE BA OF ITS INTERCONNECTION. 
          ERCOT MUST MAINTAIN SUFFICIENT RESERVES TO MEET THOSE NOC STANDARDS AS THEY HAVE BEEN WRITTEN AND THEIR UNDERLYING INTENT. 
          AS THE GRID GROWS MORE DEPENDENT ON DURATION LIMITED RESOURCES MEETING THOSE INTENT HAS BECOME MORE COMPLICATED. 
          ERCOT MUST THEREFORE HOLD RESERVES THAT OTHER BAS ARE NOT REQUIRED TO OR DON'T HAVE TO. 
          HENCE, ERCOT IS PROPOSING THAT ECRS AND NONS SPIN QUANTITIES BE SET IN A MANNER THAT THEY CAN FULLY RESTORE REG PLUS RRS AND HENCE ESTABLISH A FLOOR ON THOSE REQUIREMENTS EFFECTIVELY. 
          I WILL TRANSITION FROM HERE AND TALK ABOUT ANOTHER TOPIC, WHICH IS EQUALLY IMPORTANT, AND THAT IS AROUND HOW MUCH LOOK AHEAD SHOULD WE BUILD INTO, UH, INTO THE PROB PROBABILISTIC MODEL WHILE SETTING REQUIREMENTS FOR THE UNCERTAINTY RESERVES. 
          UM, AND IN OUR PERSPECTIVE, SIX HOUR STILL REMAINS A, A PRUDENT POSTURE FOR 2027. 
          IT IS GROUNDED IN THE ANALYSIS OF HOW LONG RESOURCE TYPICALLY TAKE TO START WHEN OUR COURT ROCKS THEM. 
          THERE IS AN ANALYSIS AT IN THE APPENDIX OF THE SLIDE DECK WHERE YOU CAN SEE THOSE RESULTS AS WELL. 
          NOW, SOMETHING TO KEEP IN MIND, REDUCING THIS LOOK AHEAD DURATION FROM SIX TO SOMETHING LOWER DOESN'T CHANGE THE UNCERTAINTY THE CONTROL ROOM HAS TO DEAL WITH. 
          IT SIMPLY REDUCES THE QUANTITY OF RESERVES WE PROCURE. 
          THE CONTROL ROOM MUST STILL PLAN TO MANAGE THAT SAME LEVEL OF UNCERTAINTY. 
          AND, UH, AND REALLY WITH WHEN THEY DO SO, THEY'LL HAVE VERY LIMITED INSIGHTS INTO KNOWING HOW MUCH BATTERY ENERGY STORAGE WILL BE AVAILABLE AT THE TIME WHEN, UH, WHEN THEY, THEY SEE THE MOST CRITICAL. 
          SOMETHING THAT HAS BEEN BROUGHT UP OFTEN IS FOR YOU, YOU HAVE SHORT LEAD TIME RESOURCES THAT CAN HELP IN SITUATIONS. 
          SO A PERSPECTIVE I DO WANT TO SHARE IS THE CONS, UH, RELYING ON SHORT LEAD TIME RESOURCES. 
          WHAT DOES IT MEANS IS THESE RESOURCES TYPICALLY DON'T DISPATCH TILL THE STATE OF CHARGE ON THE BATTERIES IS VERY LOW. 
          AND THE HENCE, WE TAKE THE RISK OF HAVING A DEEPER EVENT IF WE WERE TO WAIT THAT TILL THAT LATE. 
          AS A RESULT, WHEN THE CONTROL ROOM IS FACED WITH THE DECISION OF HAVING A HIGHLY UNCERTAIN DAY, BECAUSE AS THE SUN SETS THE LOAD IS EXPECTED TO LINGER HIGHER AND THE WIND MAY NOT SHOW UP, WHEN, WHEN FACED WITH THAT SORT OF AN OUT SITUATION, THEY WILL LOOK TO RELY ON THOSE LONG LEAD TIME AROUND UNITS WHICH ARE STILL OFFLINE. 
          THEIR JUDGMENT WILL MAKE THEM ACT. 
          AND, AND AS COUNTERINTUITIVE AS IT MAY SOUND RUCKS INCREASE IF THE LEVEL OF, UH, LOOK AHEAD WAS REDUCED AT THIS MOMENT, THERE'S BEEN QUITE A BIT OF CONVERSATION ALREADY ABOUT THE VOLUME OF RUX WE HAVE SEEN IN 2026. 
          UM, DAN, DAN SPOKE ABOUT IT A LITTLE, UH, KEITH SPOKE ABOUT IT ALSO. 
          NOW I REMEMBER, I DON'T WANT TO POINT OUT ONCE AGAIN, THE VOLUME OF ROCK HAS BEEN HIGH. 
          YOU'VE SEEN THEM TYPICALLY BE CORRELATED WITH THOSE DAYS WHEN THE DEMAND'S HIGH, UH, BECAUSE OF IT, HIGHER TEMPERATURES ON THE SYSTEM OR DURING THE OR OR BECAUSE OF WHERE THE FRONT MOVING THROUGH WHERE IN THE EVENING HOURS WE, WE DON'T EXPECT TO HAVE AS MUCH WIND ON THE SYSTEM AS THE SUN SETS. 
          NOW SOME OF THOSE ROCKS ARE AVOIDABLE WITH BETTER INPUTS, UH, ESPECIALLY BE IT, UH, WE, YOU HEARD KEITH TALK ABOUT THE WORK WE ARE DOING IN IMPROVING THE CURRENT OPERATING PLANS AND THE STATE OF CHARGE INFORMATION WITHIN THOSE, BUT THEY CAN ALSO BE, UH, THEY CAN ALSO BE INFLUENCED BY STRONGER AS DEMAND CURVES WHICH COMMIT, UH, WHICH HELP, UH, MARKET BRING RESOURCES ONLINE ON THEIR OWN. 
          BUT NOT ALL ROCKS ARE AVOIDABLE. 
          AND NOW SO, SO, SO, SO WITH THAT, WHAT I'LL DO IS TO, IN OUR MIND, SHORTENING THE LOOK AHEAD PERIOD TODAY IS PREMATURE. 
          THERE ARE SEVERAL IMPROVEMENTS THAT WILL HELP US IN MOVING INTO A DIRECTION WHERE, UH, DOING SO MIGHT BE, UH, UH, MORE PALATABLE. 
          BUT THOSE IMPROVEMENTS INCLUDE STRONGER SELF-COMMITMENT THROUGH IMPROVED 
          [01:55:01]
ASCS TRANSITIONING TO SETTING THE QUANTITIES DYNAMICALLY SO THAT WE CAN APPROPRIATELY CALIBRATE THE RISK ON FOR TAIL EVENT DAYS. 
          IMPROVING THE WAY STATE OF CHARGE OF BATTERIES IS ACCOUNTED FOR WITHIN OUR COMMITMENT STUDIES, IMPROVING HOW BATTERY ENERGY AVAILABILITY IS, UH, IS TRACKED IN REAL TIME. 
          SO WITH THAT, I'LL TRANSITION NOW INTO TALKING A LITTLE BIT ABOUT A PARAMETER THAT WE ARE PROPOSING A CHANGE ON. 
          AND THAT PARAMETER IS THE TARGET RESERVE LEVEL. 
          UH, WE ARE PROPOSING, UH, TO CHANGE IT FROM WATCH TO EEA ONE. 
          NOW, SINCE ABOUT MIDDLE OF 2021, ERCOT HAS BEEN MAINTAINING AN OPERATING POSTURE TO AVOID A WATCH THAT IS, UH, UM, A 3000 MEGAWATT LEVEL OF PRC ON DAYS THAT ARE NOT ALREADY TIGHT. 
          ERCOT MAINTAINS THAT POSTURE THROUGH THE LEVEL OF RESERVES IT MAINTAINS IN THE PROPOSED, UH, 2027 ES METHODOLOGY. 
          ERCOT IS PROPOSING TO MOVE TO A CRITERION OF OF EEA ONE, SO 2,500 MEGAWATT PRC CONSISTENT WITH THE FEEDBACK WE RECEIVED FROM THIS BOARD LAST YEAR WHEN WE WERE HERE TO TALK ON THIS TOPIC. 
          THIS CHANGE IS ALSO SUPPORTED BY OPERATIONAL IMPROVEMENTS, UH, CART HAS MADE IN THE RECENT YEARS TO BETTER MANAGE AND MONITOR OPERATIONAL UNCERTAINTY. 
          BUT AT THE SAME TIME, I DO WANT TO CAUTION, OUR GRID CONTINUES TO GROW MORE COMPLEX AND MORE DEPENDENT ON DURATION LIMITED RESOURCES. 
          SO WE DON'T RECOMMEND MOVING THE TARGET LOWER THAN EER ONE AT THIS POINT OF TIME. 
          SOMETHING ELSE I WILL STATE IS AT IN 2027, CHANGING THE TARGET LEVEL HAS VERY MINIMAL IMPACT ON THE QUANTITY ON THE TOTAL QUANTITIES OF ECRS AND NONS SPEND. 
          IT DOES HOWEVER, PROVIDE, UH, IMPROVE, UH, OPPORTUNITY FOR US TO ALIGN OUR OTHER OPERATING PROCEDURES, UH, THAT USE THAT STILL HAVE, UH, A REMNANTS OF, UH, RELYING ON A WATCH. 
          I TRANSITION OUT AND TALK A LITTLE BIT ABOUT THE, THE LAST ISSUE, WHICH IS, UH, AGAIN, AT THE FORE OF THIS DISCUSSION. 
          AND YOU'RE GONNA HEAR A LOT ABOUT IS, AND THAT TOPIC IS ABOUT HOW MUCH CREDIT SHOULD WE ACCOUNT INTO THESE REQUIREMENTS THAT ARE BUILT THROUGH THE PROBABILISTIC MODEL, UH, MODEL BASED OFF OF HISTORICALLY AVAILABLE HEADROOM NOW. 
          SO, SO IT IS, SO IN OUR PERSPECTIVE, IT IS APPROPRIATE THAT ECRS AND NON SPEND QUANTITIES SHOULD BE BUILT IN A MANNER THAT THEY ARE AWARE OF HISTORICALLY AVAILABLE HEADROOM, BUT ACOT CANNOT PLAN ON EITHER THE BEST CASE OR THE WORST CASE. 
          OUR RECOMMENDATION THAT YOU'RE SEEING IN, UH, FROM, FROM US IS MORE MEASURED, IS A MEASURED SHARE OF CREDIT THAT WE TAKE, THAT WE ARE RECOMMENDING TO TAKE. 
          AND IT'S BASED OFF OF WHAT WE'VE SEEN HAPPEN IN 2026 AND HOW WE SEE THE SYSTEM EVOLVING. 
          NOW IN 2026, ERCOT OBSERVED MORE HEADROOM WAS AVAILABLE DURING THE DAYTIME HOUR, DRIVEN BY GROWTH IN SOLAR AND ENERGY STORAGE RESOURCES THE CREDIT ERCOT USED FOR, FOR WHEN SETTING THE 2026 QUANTITIES LAST YEAR, WAS IT 25% A MEASURED 25% NUMBER? 'CAUSE AT THAT POINT WE WEREN'T QUITE CERTAIN HOW RTC WOULD IMPACT, UH, HOW, UH, THE COMMITMENTS WE SEE ON THE SYSTEM HEADROOM WE SEE ON THE SYSTEM. 
          NOW IN 2027, WE EXPECT SOLAR TO CONTINUE GROWING. 
          WE EXPECT THERE TO BE MORE ENERGY STORAGE RESOURCES, WHICH MEANS THAT THE STENT WE ARE SEEING AS FAR AS INCREASED HEADROOM WILL LIKELY BE THERE. 
          BUT SOMETHING TO KEEP IN MIND IS WE ALSO EXPECT LOAD TO GROW. 
          SO, SO, SO SOME OF THAT INCREASE IN HEADROOM WILL BE CONSUMED. 
          SO AS A RESULT, COUNTING ON NO HEADROOM BEING AVAILABLE AND SETTING THE REQUIREMENTS AS THE HIGHEST THEY CAN BE WOULD LIKELY OVERSTATE THE RISK. 
          WE MAY SEE IN REAL TIME COUNTING ON ALL OF THE HISTORICALLY AVAILABLE HEADROOM MAY UNDERSTATE THE RISK. 
          SO CREDITING A MEASURED SHARE OF HISTORICALLY AVAILABLE HEADROOM SEEMS APPROPRIATE AND  IS, UH, HAS, HAS PROPOSED A VALUE THAT ATTEMPTS TO CALIBRATE THE REQUIREMENTS TO THE TYPE OF RISKS THE SYSTEM MIGHT SEE AS OPPOSED TO THE THE EXTREMES. 
          SO WITH THIS, I COVERED THROUGH ALL OF THE POLICY POINTS AND WHERE, WHY WE LANDED, WHERE WE LANDED. 
          I'LL TRANSITION TO TALKING NOW ABOUT WHAT YOU TYPICALLY HEAR US TALK ABOUT WHEN IT COMES TO AS METHODOLOGIES. 
          UH, HERE'S A RECAP OF THE PROBABILISTIC MODEL, UH, THAT WE BUILT. 
          [02:00:01]
YOU CAN SEE THE VARIOUS ELEMENTS THAT I, UH, TALKED THROUGH AND WHERE THEY LAND WITHIN THE MODEL ITSELF. 
          THE INPUTS COVERED THE RISKS, SO THE FORECAST ERRORS AND FORCED OUTAGES. 
          THE INPUT ALSO HAS A, AN INFLUENCE OF HEADROOM. 
          SO HISTORICALLY AVAILABLE HEADROOM IS FED INTO IT. 
          THE, THE ENGINE ITSELF AND THE, UH, WHERE THE CONVERGENCE CRITERIA SITS. 
          THIS IS WHERE THE ONE IN 10 AND THE GREATER OF, UH, THE TARGET THRESHOLD AND DIRECT PLUS RRS REQUIREMENTS SITS. 
          WHAT YOU CAN ALSO SEE IS, UH, ALL OF THE PARAMETERS THAT WE INTEND TO USE FOR 2027 ARE LISTED TO THE LEFT IN THIS GRAPHIC. 
          UH, I TRANSITION FROM HERE AND SHARE ONE MORE PIECE OF ANALYSIS THAT WAS, THAT IS NEW AS FAR AS 2027 GOES. 
          THIS WAS DONE IN, AS IN RESPONSE TO, UH, A, A RECOMMENDATION IN THE 2024 ANCILLARY SERVICE STUDY. 
          ERCOT WAS ASKED TO PRODUCE PROBABILITIES AND COSTS OF EXPERIENCING A WATCH, AN EMERGENCY ALERT, OR A LOAD SHED AT ALTERNATE RESERVE LEVELS. 
          SO IN 2027, AS A PART OF THE 900 SCENARIOS THAT WE TESTED, WE ALSO CONDUCTED THIS ANALYSIS WHERE WE SHARED PROBABILITIES AND COST AS WAS REQUIRED OF US. 
          WE USED THAT PROBABILITY, UH, UH, COMPUTATION APPROACH TO BUILD A MECHANISM TO COMPARE THE RELATIVE, UH, UH, IMPROVEMENTS OR RELATIVE IMPACT OF THE WAY EACH OF THOSE SCENARIOS WHEN WEIGHED AGAINST THE SAME RISK. 
          SO, IF THE SAME RISK WERE TO MATERIALIZE AND WE WERE TO USE SCENARIO X OR OUR SCENARIO Y, WHAT SORT OF, HOW DOES THE RISK ON THE SYSTEM CHANGE? IS THIS EFFECTIVELY AN ANALYSIS THAT WE DID? THIS TABLE IS SUMMARIZING RESULTS FOR FOUR OF THE SCENARIOS, UH, THAT WERE EVALUATED. 
          PURPLE ROW HERE IS, UH, UH, UH, IS REFLECTIVE OF PARAMETERS, UH, THAT ERCOT HAS RECOMMENDED. 
          SO THE, SO YOU CAN SEE THE TOTAL AS QUANTITIES THAT, THAT PER THAT, UH, T'S RECOMMENDATION WOULD PRODUCE THE ESTIMATED COSTS. 
          THESE WILL COMPUTE IT USING THE 2025 CPCS IN THAT SCENARIO. 
          AND THEN WHAT YOU CAN ALSO SEE IS THE EXPECTED HOURS PER YEAR SPENT IN A EEA THREE. 
          SO THAT IS LOAD SHE EEA ONE AND WATCH UNDER THREE DIFFERENT MEASURES OF, UH, RISKS. 
          THE, THE TERM NO HEADROOM HERE MEANS, UH, IT IS THE MOST PESSIMISTIC LOOK. 
          SO IF THE ENTIRE HISTORICAL RISK WERE TO SHOW UP AND THERE WAS NO EXTRA HEADROOM ON THE SYSTEM, THE SUM HEADROOM IS A MEASURED, UH, LOOK AT THE RISK THAT MAY SHOW UP. 
          AND LOTS OF HEADROOM IS THE MOST OPTIMISTIC. 
          THIS SAYS FOR THE HISTORIC RISK, ALL OF THE HISTORICAL AVAILABLE HEADROOM WAS STILL THERE. 
          UH, WHAT YOU SEE IS AS, AS YOU DIAL DOWN THE PARAMETERS AND REDUCE THE QUANTITIES OF AS AGGRESSIVELY, THE, THE, THE RISK YOU TAKE, OR THE OF HAVING MORE EVENTS STARTS INCREASING WHAT ERCOT HAS PROPOSED, UH, IN THE PURPLE RESULTS IN QUANTITIES THAT MEETS THE RELIABILITY NEEDS OF ERCOT AND, AND THE, AND THE GRID WE EXPECT TO OPERATE NEXT YEAR. 
          I WILL TRANSITION NOW AND SHARE A SUMMARY OF IMPACT, UH, OF QUANTITIES FOR ECRS AND NON SPEN. 
          THIS PARTICULAR SLIDE IS SHOWING YOU A COMPARISON ACROSS THE SAME FOUR SCENARIOS YOU SAW ON THE PREVIOUS SLIDE. 
          IT'S SHOWING YOU THE RANGE IN THE HOURLY QUANTITIES. 
          SO WHAT IS THE MINIMUM, WHAT IS THE MAXIMUM AND WHAT'S THE AVERAGE? SO THE BOTTOM OF THIS BAR IS THE MINIMUM VALUE, HOURLY AVERAGE, AND THE TOP OF THE BARS WOULD BE THE MAXIMUM T'S RECOMMENDATION FOR, UH, ECRS AND NONS SPIN. 
          THE SCENARIO S3 IS, WHAT IS THE, IS THE ONE THAT REFLECTS IT REFLECTS A MEASURE OUTCOME. 
          IT'S BELOW, UH, IT'S IT'S RANGE AND AVERAGE VALUE SIT BELOW THE, UH, OUTCOME THAT WOULD BE PRODUCED USING SCENARIO S ONE, WHICH IS, UH, WHICH IS THE MOST PESSIMISTIC LOOK AT HISTORY, AND IT'S ABOVE THE MOST AGGRESSIVE SCENARIO, S FOUR, WHICH, UH, DIALS DOWN BOTH THE LOOK AHEAD AND ASSUMES THAT A HUNDRED PERCENT OF HISTORICALLY AVAILABLE HEADROOM WOULD BE THERE. 
          I HAVE ONE MORE SLIDE. 
          UH, I I, IF YOU MAY, IF YOU RECOLLECT AT THIS ONSET, I HAD MENTIONED ACOT IS NOT PROPOSING ANY CHANGES TO THE METHODOLOGY USED TO COMPUTE REGULATION AND RESPONSIVE RESERVE. 
          THIS PARTICULAR SLIDE SHARES, UH, GIVES YOU A SIMILAR PERSPECTIVE ON THE RANGE OF HOURLY QUANTITIES AND THE AVERAGE BOTH FOR REGULATION AND RESPONSIVE RESERVE. 
          IN GENERAL, WHAT WE ARE SEEING IS THE, 
          [02:05:01]
ON AN AVERAGE, THE, THE TRENDS IN QUANTITIES BOTH FOR REGULATION AND RRS ARE PRETTY SIMILAR TO 2026. 
          WITH THAT, I, UH, I'VE, I'VE REACHED TOWARDS MY LAST SLIDE ON, ON THE, ON THE AS METHODOLOGY. 
          UH, ERCOT REVIEWED THE METHODOLOGY FOR 2027 AND IS PROPOSING NO CHANGES TO REGULATION AND RESPONSIVE RESERVE. 
          ERCOT IS PROPOSING TWO CHANGES IN THE PARAMETERS USED TO COMPUTE ECRS AND NONS SPIN. 
          UH, WE ARE, AS A PART OF IT, UH, RECOMMENDING TO INCREASE THE DAYTIME RISK CREDIT AND, UH, AND, AND CHANGE THE TARGET LEVEL FROM WATCH TO AN EEA ONE. 
          THE ERCOT GRID CONTINUES TO GROW MORE COMPLEX ERHARD'S IMPROVEMENT ACTIONS WILL CONTINUE AS MARKET SOLUTIONS EVOLVE OPERATIONAL TOOLS, MATURE AND EXPERIENCE OPERATING UNDER RTC WITH LIMITED DURATION RESOURCES GROWTH. 
          WITH THAT, I'LL PAUSE. 
          WE ARE HERE SEEKING THE BOARD'S ENDORSEMENT. 
          I AM HERE TO ANSWER QUESTIONS IF, IF THAT'S THE RIGHT TIME. 
          THANK YOU. 
          YOU MAKE, UH, YOU MAKE ANCILLARY SERVICES FINE. 
          SO, UH, DAN, DID YOU WANT TO CHIME IN? I, I DON'T THINK SO RIGHT NOW, SIR. 
          UH, GO AHEAD AND LET'S HEAR WHAT OTHER . 
          OKAY. 
          ANY QUESTIONS? YEAH, UH, I HAD A QUESTION. 
          UH, WITH THE CHANGES THAT ARE DESCRIBED ON SLIDE FOUR, WHAT KIND OF, UH, CHANGE IN PROCUREMENT IS THAT GONNA RESULT IN THE CHANGES IN 27 AND 28? RIGHT, SO I'LL GO TO THE SLIDE FOUR. 
          SORRY, JUST FOR A, SO WE ARE ON THE SAME PAGE HERE. 
          SO THIS PARTICULAR THING, WHAT THIS IS SAYING IS THERE ARE A SDCS, I'LL START THERE. 
          'CAUSE YOU'VE HEARD US TALK ABOUT IT QUITE A BIT. 
          THEY PLAY AN IMPORTANT ROLE IN, IN, IN SENDING SIGNALS TO THE MARKET ON THE TYPE OF OPERATIONS A CART EXPECTS ON A GIVEN DAY. 
          AND, AND THE RISKS AROUND IT IMPROVING THE A SDC. 
          SO THEY ARE, THEY BETTER REFLECT RELIABILITY NEEDS WILL HELP INCENTIVIZE, WE'LL SEND A STRONGER MESSAGE AS FAR AS SELF COMMITMENT GOES. 
          AND IF THERE ARE SELF COMMITMENTS, THEN  DOESN'T HAVE TO TAKE AS MANY RESIDUAL ROCK ACTIONS. 
          SO AT LEAST THAT DIRECT TIE IN IS RIGHT THERE, IS, IF WE CAN SEE THOSE UNITS THAT ARE SITTING OUT RIGHT NOW, COME ON THEIR OWN, THEN WE DON'T HAVE TO ACT ON THEM. 
          AND THEN THE, THE UNCERTAINTY WE HAVE TO COVER CHANGES. 
          UH, SO THAT ONE THING, THE ANNUAL PROBABILISTIC METHODOLOGY, THIS ONE IS MORE, UH, IS MORE OF A GAP WE SEE TODAY. 
          SO YOU'VE HEARD ME TALK ABOUT OUR GRIDS GOING MORE COMPLEX. 
          IT IS BECOMING MORE DEPENDENT ON DURATION LIMITED RESOURCES. 
          SOMETHING THAT'S ABSOLUTELY IMPORTANT IS KNOWING THE, UH, IS KEEPING AN ACCOUNTABILITY ON THE ENERGY AVAILABILITY, UH, IN THESE RESOURCES. 
          BECAUSE NOW WHENEVER WE TALK ABOUT HEADROOM, IT'S NOT JUST CAPACITY, IT'S ALSO RUNWAY, UH, LOOSELY PUT. 
          SO THAT GAP NEEDS TO BE CLEANLY ADDRESSED IN THE METHODOLOGY NEXT YEAR IS THE RIGHT TIME OR NEXT YEAR. 
          WE DO THINK IS AN APPROPRIATE TIME TO WORK ON THAT. 
          ALSO, BECAUSE WE ARE PLANNING TO IMPLEMENT DRRS ONCE WE HAVE THREE UNCERTAINTY PRODUCTS, UH, WITH THREE DIFFERENT DURATIONS INVOLVED IN HELPING US, UH, MEET OUR UNCERTAINTY OUTLOOKS, ENSURING THAT OUR ENERGY NEEDS ARE TRACKED IS CORRECT. 
          SO I DON'T KNOW THAT I CAN TELL YOU WHICH WAY, WHICH DIRECTION THE QUANTITIES WOULD MOVE BECAUSE OF THIS, BUT IT SHOULD, UH, HAVING THIS ACCOUNTABILITY AS WE THINK ABOUT BRINGING DRRS INTO THE FOR SHOULD HELP US FEEL MORE COMFORTABLE WHEN WE COME, COME UP WITH A RECOMMENDATION NEXT YEAR. 
          OKAY. 
          SO, UH, SORRY. 
          PLEASE CONTINUE AT 2028. 
          LAST POINT IS DYNAMIC. 
          AS I TRIED TO TOUCH UPON IT, AND I DON'T KNOW HOW WELL I COMMUNICATE IT OUT, THIS ONE I DO THINK WILL HAVE A MUCH MORE IMPACT. 
          'CAUSE THIS LETS US DIAL DOWN THE RISK LEVEL, UH, THAT WE TAKE, OR THE, IN SETTING THE QUANTITIES OUT IN DECEMBER, WE DON'T HAVE TO COVER THE EXTREME TAILS. 
          WE DON'T HAVE TO COVER THE WORST CASE IN EVERY HOUR IN DECEMBER BECAUSE WE WILL HAVE A TOOL THAT LETS US, LETS US CALIBRATE THAT CLOSER TO REAL TIME. 
          SO THIS TO ME, BECAUSE IT GIVES US THE ABILITY TO CLEANLY, UH, SET OUR OPERATING PLANS FOR THE RISKS WE SEE THIS LIKELY WILL HAVE THE MOST IMPACT AS FAR AS THE QUANTITIES THEMSELVES GO. 
          AND I'LL PAUSE. 
          SO WE'RE GONNA BE PROCURING LESS ANCILLARY SERVICES IN 28 THAN WE ARE TODAY. 
          SO WE, BECAUSE WE CAN CALIBRATE, HOPEFULLY WELL SEE. 
          YOU HAVE TO, THE GRIDS 
          [02:10:01]
CHANGING ALSO. 
          SO I HAVE TO GIVE YOU SOME CAUTION. 
          ALL THINGS EQUAL, WE SHOULD BE ABLE TO DIAL DOWN THE LEVEL OF LEVEL OF, UH, OF PARAMETERS WE ARE PUTTING INTO THE METHODOLOGY. 
          BUT SEE, I ALMOST HAVE TO KEEP REMINDING FOLKS, AND I PUT THIS IN ONE OF OUR SLIDES. 
          OUR GRID IS CONSTANTLY EVOLVING. 
          OUR UNCERTAINTY IS CHANGING. 
          WE ARE SEEING MORE AND MORE INVERTER BASED RESOURCES ON THE SYSTEM AND NATIVELY THAT IS INCREASING THE LEVEL OF MEGAWATT ERROR THAT WE HAVE TO DEAL WITH. 
          SO I HOPE I PUT ENOUGH CAVEATS IN EXPLAINING WE DO THINK THINGS WILL EVOLVE, BUT KEEP IN MIND THE GRID'S EVOLVING ALSO. 
          OKAY, THANK YOU CHAIRMAN GLAC? YEAH, I HEARD A COUPLE OF CAVEATS IN THERE. 
          CHAIRMAN GLEESON NATIKA, THANK YOU FOR THE PRESENTATION. 
          UM, IF YOU GO TO SLIDE SEVEN, JUST REAL QUICK, SO I APPRECIATE ON YOUR SECOND BULLET UNDER BOTTOM LINE, YOU ACKNOWLEDGING THAT THIS WILL JUST HAVE A REAL MARGINAL IMPACT ON COSTS BECAUSE THE COSTS ARE REALLY DRIVEN BY THE, THE RESTORATION, NOT BY THE TARGET LEVEL. 
          YES. 
          BUT YOU SAY THEY'RE MARGINALLY. 
          DO YOU HAVE A NUMBER THAT WE COULD QUANTIFY WHAT THIS WOULD HAVE BEEN? SO, YOU KNOW, EVEN THOUGH QUANTITIES AND COSTS ARE ONLY MARGINALLY IMPACTED, DO WE KNOW HOW MUCH? SO IT'S, UH, COMPARING ROW TWO AND ROW THREE, SO THE PURPLE LOW WITH THE ROW RIGHT ABOVE IT, UH, THE QUANTITIES CHANGE MARGINALLY, IT'S A 0.3 MILLION, UH, IMPACT ON THE QUANTITIES, THE COST, IT'S ABOUT A SEVEN, 800, UH, POINT, UH, THOUSAND SEVEN, 800,000 A DOLLAR IMPACT. 
          YEAH. 
          SO I, I, AGAIN, I THINK, UM, YOU KNOW, AND MARGINALS COME UP BEFORE, I THINK IT'S IMPORTANT TO ACTUALLY PUT NUMBERS TO THIS SO PEOPLE KNOW, UM, EVEN THOUGH IT MAY BE MARGINAL, WE'RE MOVING IN THE, IN THE RIGHT DIRECTION. 
          THANK YOU. 
          YEAH. 
          ANYTHING ELSE? JULIE? THANK YOU FOR THE THOROUGH EXPLANATION. 
          DO YOU FORESEE MEASURING INERTIA ON THE SYSTEM AS ONE OF THE INPUTS TO THIS CALCULATION GOING FORWARD? THE, UM, SO WE DO MEASURE INERTIA TODAY, AND, UH, THE PLACE WHERE IT PLAYS A ROLE IS IN SETTING OUR RESPONSIVE RESERVE REQUIREMENTS IN HOURS WHERE WE EXPECT LOWER INERTIA. 
          WE TEND TO BUY HIGHER QUANTITIES OF RESERVES. 
          SO WE WILL CONTINUE, UH, WE'LL CONTINUE THAT APPROACH FOR SURE. 
          NOW, THE INDUSTRY HAS EVOLVED A LOT AS FAR AS MEASURING INERTIA GOES, AND I KNOW WE ARE EXPLORING HOW TO SHARPEN THE PENCIL EVEN ON OUR MEASUREMENT. 
          SO THAT EFFORT WILL CONTINUE. 
          MM-HMM . 
          ANY OTHER QUESTIONS? OKAY, ANYTHING ELSE THAT I THINK THAT WAS ANCILLARY SERVICES 6 0 1 . 
          SO LET'S, UH, LET'S GO BACK TO KAITLYN. 
          KAITLIN, WOULD YOU, UH, PLEASE COME UP AND PRESENT THE, UH, COMMENTS REGARDING THET DISCUSSIONS ON THIS SUBJECT? OKAY. 
          ALL RIGHT. 
          SO STAKEHOLDERS REVIEWED THE 2027 ANCILLARY SERVICE METHODOLOGY. 
          WE DID THIS THROUGH WORKING GROUPS, AND WE HAD VOTES AT THE WHOLESALE MARKET SUBCOMMITTEE AND THE RELIABILITY OPERATIONS SUBCOMMITTEE. 
          AND THEN AT T UM, THE ERCOT RECOMMENDATION ATTACK WAS SLIGHTLY DIFFERENT THAN THE RECOMMENDATION TODAY. 
          IT'S WHAT NITKA HIGHLIGHTED. 
          THE, UM, THE WATCH WENT TO THE EEA ONE, BUT I WILL GET TO THAT. 
          I WOULD SAY, UM, YOU KNOW, I DIDN'T WANNA SAY THE BIG F WORD IN ALL CAPS, BUT WE HAD A, A REALLY EXHAUSTIVE DISCUSSION, PROBABLY ABOUT THREE HOURS AT TECH. 
          AND I WOULD SAY, YOU KNOW, WE DID AS MUCH AS WE COULD. 
          I THINK NEXT YEAR WE WOULD WANT TO START SOME OF THE BIGGER DISCUSSIONS EARLIER, MAYBE A WORKSHOP, AND THEN WE CAN GET MORE ANALYSIS. 
          UM, YOU KNOW, TO ERCOT CREDIT, THEY DID A LOT OF WORK. 
          ONE OF THE JOKES I'VE BEEN MAKING IS WHAT, WHAT NITKA AND LUIS HAD TO TELL US DURING THE TECH MEETING WAS, THIS IS NOT ONE OF THE 900 SCENARIOS WE RAN. 
          SO THEY RAN ALL THESE SCENARIOS, BUT WE WERE GETTING TO THE POINT WHERE WE WERE LOOKING AT COMPROMISES OUTSIDE OF THAT. 
          UM, BUT THIS YEAR, I WOULD SAY THE DISCUSSION WAS COMPLICATED BY A FEW EXTERNAL BUT RELATED TOPICS. 
          UM, THE FIRST ONE BEING THE, THE JULY MARKET NOTICE, UH, RELATED REGARDING THE ISSUE IDENTIFIED AND THE PROBABILISTIC 
          [02:15:01]
MODEL FOR THIS YEAR, THAT LED TO PROCURING AN ESTIMATED, YOU KNOW, 3.7 GIGS LESS PER HOUR THAN WE WOULD'VE UNDER THE APPROVED METHODOLOGY. 
          AND THE, THE GOOD CAUSE EXCEPTION PROCESS WAS GOING ON AT THE PUC CONCURRENTLY TO OUR TAC DISCUSSIONS. 
          UM, SO THAT IMPACTED DISCUSSIONS. 
          THE SECOND THING THAT WE'VE ALREADY DISCUSSED A LOT TODAY IS THE HIGHER LEVEL OF RUX THIS SUMMER, AND THE HIGHER LEVEL OF RUX SPECIFICALLY FOR CAPACITY. 
          UM, AND THEN THE THIRD, YOU KNOW, THIS IS THE FIRST OPERATING YEAR UNDER RTC AND SEEING THAT THE A SDCS WE SET BASED OFF THE ORDC MAYBE DON'T VALUE THE LEVEL OF RESERVES SUCH THAT WE CAN ACTUALLY PROCURE A HIGH AMOUNT. 
          SO I WOULD SAY THOSE, THOSE THREE THINGS MADE THE DISCUSSIONS A LOT MORE DIFFICULT. 
          UM, BUT I DO WANNA SAY THANK YOU TO ERCOT. 
          THEY DID A REALLY GOOD JOB OF, OF BRINGING A LOT OF INFORMATION AND ANALYSIS AND DATA TO US. 
          UM, AND ERCOT DID A REALLY GOOD JOB OF LAYING OUT THE ISSUES. 
          I WOULD SORT OF GO THROUGH 'EM THAT WAY TO, TO SAY WHERE WE HAD CONSENSUS OR NOT. 
          THE, THE FIRST ISSUE ON THE LOOK AHEAD PERIOD, ERCOT RECOMMENDED THE, THE SIX HOURS. 
          UM, THE IMM IS RECOMMENDING LESS, BUT WE HEARD LESS DISCUSSION FROM STAKEHOLDERS ON THE, ON THAT. 
          THE SECOND ISSUE WAS THE HEADROOM CREDIT, WHICH WE'RE MEASURING THROUGH THE, THE RISK CREDITS. 
          UM, SO BASICALLY, YOU KNOW, YOU CREDIT THE PART OF HISTORICALLY AVAILABLE HEADROOM AND SETTING E-E-C-R-S AND NONS SPIN REQUIREMENTS. 
          THE FIRST MOTION FOR A VOTE WE ACTUALLY TOOK AT, AT TECH WAS TO USE 0% OF THE HISTORICALLY AVAILABLE HEADROOM INSTEAD OF THE, THE PARTIAL AMOUNT THAT ER K WANTS. 
          AND YOU WILL SEE THIS IN THE, THE VISTA COMMENTS. 
          SO THAT'S REPRESENTATIVE OF THE FIRST MOTION WE TOOK. 
          WE HAD ABOUT 42% IN FAVOR OF THAT MOTION. 
          UM, AND THEN THE THIRD ISSUE WAS THE, THE TARGET RESERVE LEVEL. 
          AGAIN, WHAT WE VOTED ON AT ATTACK HAD THE, UM, AVOIDING A WATCH. 
          AND, AND ERCOT MOVED THAT TO AVOIDING A EEA ONE, AS WE JUST HAD IN THE DISCUSSION ABOUT, YOU KNOW, WHAT MARGINAL MEANS. 
          THERE. 
          THERE WAS A LITTLE BIT LESS DISCUSSION ON THIS ATTACK BECAUSE IT MAY HAVE BEEN VIEWED AS A, A LESS IMPACTFUL CHANGE, BUT ERCOT INDICATED AT TECH ALSO THAT THEY WOULD BE WILLING TO MAKE THAT CHANGE. 
          AND, AND THEY DID. 
          UM, THE FOURTH ISSUE WAS HOW WE SHOULD, UM, RE RESTORE THE RESERVES, THE RESTORING THESE USING ECRS AND NONS SPEND A HUNDRED PERCENT OF REG UP AND RRS. 
          THIS WAS A MAIN ISSUE FOR THE, THE CONSUMERS. 
          UM, THE SECOND VOTE WE TOOK WAS KIND OF AN ATTEMPT AT COMPROMISE. 
          SO IT WAS THE ZERO RISK CREDITS, BUT ONLY RESTORING, UM, RRS. 
          BUT AGAIN, WE WERE SORT OF IN AN AREA WHERE WE DIDN'T HAVE ANALYSIS ON IT. 
          AND SO THAT GOT ABOUT A, A 30% IN FAVOR VOTE. 
          UM, SO I THINK WE WERE ATTEMPTING COMPROMISE, BUT WE DIDN'T HAVE ALL THE ANALYSIS. 
          AND THEN THE LAST VOTE WE TOOK WAS ON, UM, KO'S RECOMMENDATION. 
          AGAIN, SLIGHTLY DIFFERENT THAN TODAY. 
          WE WERE ONE SHORT ONE VOTE SHORT OF A POSITIVE RECOMMENDATION, AND THAT WAS IMPACTED BY A LARGE NUMBER OF ABSTENTIONS. 
          SO, YOU KNOW, WE GOT ONE VOTE AWAY ON ERCOT PRESENTATION OR ERCOT RECOMMENDATION. 
          ERCOT RECOMMENDATION TODAY IS SLIGHTLY ON THE MORE RISKY SIDE, I THINK, OF WHAT THEY PRESENTED TO TAC. 
          THE TWO VOTES WE TOOK AT TAC WERE BOTH, I WOULD SAY, ON THE LESS RISKY SIDE. 
          SO WE DON'T, UM, WE DON'T HAVE AN INDICATIVE VOTE FOR EVERYTHING, BUT I, I WOULD SAY WE HAD A VERY EXHAUSTIVE, YOU KNOW, THREE HOUR DISCUSSION, AND YOU ARE GONNA HEAR FROM, FROM STAKEHOLDERS AFTER ME, WHO I THINK IT'S IMPORTANT TO HEAR FROM. 
          ANY QUESTIONS FOR CAITLIN? OKAY. 
          THANK YOU ALL FOR ALL THE, I DIDN'T THANK YOU BEFORE WHEN YOU GAVE YOUR LAST REPORT FOR ALL THE WORK Y'ALL HAVE DONE THIS YEAR. 
          IT'S BEEN AN INCREDIBLE YEAR FOR T AND WE, UH, WE APPRECIATE IT. 
          WITH THAT, WE'LL MOVE TO, UH, JEFF MCDONALD. 
          UH, HE SUBMITTED WRITTEN COMMENTS ON BEHALF OF THE INDEPENDENT MARKET MONITOR. 
          UH, JEFF, WOULD YOU COME UP AND SHARE YOUR COMMENTS WITH US? AND BETH GARZA, YOU'RE ON DECK. 
          GOOD AFTERNOON NOW. 
          THANK YOU. 
          UH, SO I JUST WANTED TO TAKE A FEW MINUTES AND GO THROUGH. 
          SO WE'VE, WE'VE BEEN VERY ENGAGED IN THE, UH, AS METHODOLOGY PROCESS FOR THE LAST COUPLE OF YEARS. 
          AND WE'VE HAD SOME VERY SIMILAR COMMENTS THROUGHOUT, 
          [02:20:02]
THROUGHOUT THE, THE THREE YEARS, I GUESS, NOW THAT I'VE BEEN INVOLVED IN THAT. 
          UM, I DO WANNA COMMEND, UH, ERCOT FOR TAKING ON A, UH, A RISK-BASED MODEL, UH, WHICH IS A DEVIATION AND A STEP IN THE RIGHT DIRECTION, I THINK, COMPARED TO HOW THE, AS METHODOLOGY WAS DONE BEFORE. 
          SO I THINK THAT'S FANTASTIC. 
          UM, AND WE DO HAVE, YOU KNOW, WE'VE NOTICED SOME, SOME WHAT WE CONSIDER TO BE ISSUES WITH HOW, UH, ANCILLARY SERVICES ARE PROCURED. 
          I'LL GO THROUGH THEM BRIEFLY. 
          YOU'VE HEARD, UH, FROM ME ABOUT ALL OF THESE BEFORE, UH, LAST YEAR. 
          UM, AND SO I'LL, I'LL KEEP IT SOMEWHAT BRIEF, UH, AND END WITH OUR RECOMMENDATIONS. 
          SO THERE WE GO. 
          THANKS. 
          ALL RIGHT. 
          SO, UM, SO AT A HIGH LEVEL, UM, WE, WE THINK THAT THE, AS METHODOLOGY SHOULD OPTIMIZE FOR A ONE IN 10, JUST FOR SOME CONTEXT. 
          OTHER RTOS LOOK AT, UH, SETTING ANCILLARY SERVICES BASED ON EITHER COVERING CONTINGENCIES OR AVOIDING, UM, UH, LOAD SHED. 
          UH, THE, THE WATCH HERE IS, IS A, A, A UNIQUE CRITERIA AND NOT REALLY ONE THAT'S CENTERED IN, IN, UM, RELIABILITY PER SE. 
          UH, EVEN IF YOU MOVE DOWN TO AN EEA ONE, WHICH, UM, MIDA HAD MENTIONED, UH, THEY WERE WILLING TO DO, UM, AN EEA ONE IS STILL NOT A, A LOAD SHE CRITERIA. 
          UH, SO IT ISN'T BASED IN THAT TYPE OF RELIABILITY. 
          IN FACT, YOU DON'T EVEN GET, UM, UH, OPERATOR INTERVENTION, YOU KNOW, DIRECT OPERATOR INTERVENTION TILL YOU GET TO AN EEA TWO. 
          UM, ANOTHER THING ABOUT MOVING TO AN EEA ONE OFF OF THE WATCH, UH, WHILE IT IS A STEP IN THE RIGHT DIRECTION, I BELIEVE, UM, THE, THE PROCUREMENT OF REGULATION AND RRS BACKUP, UM, WHICH NIKA ALSO TO TOUCHED ON, UM, ACTUALLY WINDS UP SETTING THE PROCUREMENT QUANTITY, UH, IN THE LOWER RESERVES. 
          UM, I THINK IT WAS 63% OF THE TIME. 
          UM, IF YOU MOVE THE CRITERIA DOWN FROM A WATCH TO AN EEA ONE, I DON'T, I DON'T RECALL WHERE THAT LANDED, BUT I, I THINK THAT WOUND UP HAVING A VERY SMALL EFFECT ON THE OVERALL PROCUREMENT. 
          SO I, I DO VIEW THAT AS A, A POSITIVE STEP IN THE RIGHT DIRECTION, BUT WE WOULD PREFER SOMETHING THAT WAS MORE RELIABILITY BASED, LIKE A ONE IN 10, UM, CRITERIA FOR OUTAGES AND GETTING RID OF THE RRS AND REGULATION REQUIREMENT, UH, THE REPLACEMENT REQUIREMENT FOR THOSE. 
          SO YOU'RE, SO THEY'RE EFFECTIVELY PROPOSING TO PROCURE ENOUGH, UM, TO USE ALL OF THE REAGAN RRS AND THEN REPLACE ALL OF THE REAGAN RRS. 
          UM, AND WHEN WE LOOKED AT THE OFFER STACKS AND REGULATION AND RRS, UH, AND ALSO THE HEADROOM, THERE WAS, UH, I THINK, I THINK IT'S SAFE TO SAY ALWAYS AMPLE CAPACITY TO REPLACE THE REGULATION RRS WITHOUT EXPLICITLY BUYING IT, UM, THE REPLACEMENT, UH, IN THE LOWER SERVICES. 
          SO, SO I'LL NOTE THAT, UM, FORECAST RISK SHOULD BE ON A SHORTER TIMEFRAME. 
          SO WE'VE TALKED ABOUT THAT BEFORE. 
          UM, THE FORECAST RISK IS REALLY SOMETHING THAT MAPS INTO A MUCH SHORTER TIMEFRAME OPERATIONALLY. 
          SO OBVIOUSLY EVERY TIME YOU'RE DOING A FORECAST, THE FARTHER OUT YOU'RE FORECASTING, THE LARGER THE RISK. 
          BUT AS YOU GET CLOSER TO THAT EVENT HORIZON, THAT RISK SHRINKS. 
          SO WE PROPOSE USING SOMETHING THAT'S MORE OPERATIONAL AND AND LISTS, IT'S NOT FAIR TO CALL IT PLANNING, BUT THAT'S LESS, UM, FORWARD LOOKING FOR THE REAL TIME, UH, PROCUREMENT. 
          UH, SOMETHING THAT'S IN THE, YOU KNOW, I MEAN, WE WOULD PREFER OBVIOUSLY A ONE HOUR, UH, FORECAST RISK, UH, MAPPING THE SIX HOUR FORECAST RISK OR THE THREE HOUR DOWN TO A ONE HOUR, UM, BECAUSE IN REAL TIME, UH, THE OPTIMIZATION WILL BE ABLE TO TAKE CARE OF THAT. 
          AND THERE'S AMPLE HEADROOM, UH, TO, TO ADDRESS THAT, AT LEAST FOR THE FORESEEABLE FUTURE. 
          UM, SO, AND I GUESS I I SHOULD HAVE SAID THIS FIRST, THE, AS PROCUREMENT TARGETS IN OUR VIEWS SUPPRESS REAL TIME PRICES, SO THIS IS WHY, THIS IS WHY I'M UP HERE TALKING ABOUT THIS IN GENERAL, IS, UH, WHEN YOU HAVE THESE LARGER AS PROCUREMENT TARGETS, YOU'RE GONNA WIND UP WITH MORE REC, YOU WILL WIND UP WITH MORE REC. 
          SO, SO IN TEXAS, YOU DON'T HAVE A DAY AHEAD MUST OFFER OBLIGATION. 
          YOU DON'T HAVE A, A, A MUST CLEAR 95 OR 98% OF LOAD AND, AND ANCILLARY SERVICES IN THE DAY AHEAD. 
          IT'S, IT'S VERY OPTIONAL, VERY FINANCIAL. 
          SO, AND WE SEE, I THINK, I THINK IN OUR STATE OF THE MARKET REPORT, I THINK ABOUT 40% OF LOAD IS COVERED BY PHYSICAL GENERATION THAT'S CLEARED IN THE DAY AHEAD. 
          I THINK THAT'S ABOUT RIGHT. 
          SO THAT'S VERY LOW NATIONWIDE. 
          IN OTHER RTOS, 
          [02:25:01]
YOU'D SEE THAT, YOU KNOW, IF IT, IF IT GOT AS LOW AS 95% PEOPLE WILL BE TALKING ABOUT IT. 
          SO, SO THE DAY AHEAD MARKET IS JUST FINANCIAL. 
          IT'S WHEN WE GET TO REAL TIME WHERE MOST OF THIS MATTERS. 
          AND, AND SO THEY'RE GOING TO RUCK OR COTS GOING TO RUCK TO GET THE COMMITMENT IT NEEDS IN ORDER TO GET THE RESOURCES, THE ONLINE CAPACITY IT NEEDS IN ORDER TO PROVIDE THESE, THESE HIGHER LEVELS OF ANCILLARY SERVICES. 
          THAT, THAT ADDITIONAL ONLINE CAPACITY THROUGH R WILL WIND UP REDUCING, UM, ENERGY PRICES. 
          IT, IT'S JUST GOING TO REDUCE ENERGY PRICES IN THE REAL TIME THAT IS SOMEWHAT SCALABLE, UH, BECAUSE SOME OF THAT, THE RESERVES WILL BE, UH, THE INCREMENTAL OR ADDITIONAL RESERVES WILL BE PROVIDED BY, UH, ENERGY STORAGE RESOURCES WHICH DO NOT HAVE A LSL OR A MINIMUM LOAD, UH, THAT THEY HAVE TO PRODUCE. 
          THAT IS JUST MUST TAKE ENERGY. 
          BUT A LOT OF THE RESOURCES DO HAVE THAT. 
          AND SO YOU'RE, YOU'RE COMMITTING THOSE, GETTING THEM ONLINE IN REAL TIME. 
          YOU MIGHT FEEL THAT YOU'RE GETTING A LARGER AS PRICE, WHICH WOULD SUPPORT, UH, ADDITIONAL REVENUE, WHICH WOULD SUPPORT ADDITIONAL GENERATION GOING INTO, UH, THE LOAD. 
          YOU KNOW, THE, THE MORE EXTREME LOAD RAMP THAT'S ANTICIPATED HERE FROM THE DATA CENTERS. 
          BUT ANCILLARY SERVICES ARE SUCH A SMALL QUANTITY COMPARED TO ENERGY. 
          UH, AND THERE'S SO MUCH THAT'S DRIVEN OFF OF ENERGY, UH, INCLUDING, UM, FORWARD CONTRACT PRICES. 
          SO, SO WE'RE VERY SENSITIVE TO THINGS THAT WE THINK WOULD DEPRESS THE ENERGY PRICE SIMPLY TO PROVIDE SOME INCREMENTAL, UM, RESERVE THAT IS, IN OUR VIEW, UM, NOT NEEDED. 
          SO, SO I WILL GO THROUGH THESE NEXT TWO PRETTY QUICKLY. 
          I JUST WANTED TO HIGHLIGHT, AND, AND I WILL SAY, UM, I'M SENSITIVE TO THE CHALLENGE THAT ERCOT HAD IN REPRESENTING DIFFERENT SCENARIOS OR, OR PROPOSALS IN A, IN AN ODD SPACE IN A STOCHASTIC OR RANDOM SPACE. 
          UM, WHAT THIS SHOWS, SO I'LL JUST HIGHLIGHT THIS FOR A SECOND. 
          SO THE VERY TOP BOX REPRESENTS, UM, THE MOST CONSERVATIVE SET OF ASSUMPTIONS, UH, THAT WERE ON THE TABLE. 
          THE STARS THAT ARE JUST BELOW THAT, UH, REPRESENT THE WATCH, EEA ONE AND EEA THREE, WHICH IS WHERE YOU WOULD GET LOAD SHED FOR THE ERCOT ASSUMPTIONS OR WHAT WAS THEN THE ERCOT ASSUMPTIONS. 
          AND THEN THE, UH, I DON'T KNOW IF I CAN SHOW YOU, BUT THE, THE, THE DIAMONDS AT THE VERY BOTTOM THERE ARE THE IMM UH, ASSUMPTIONS. 
          AND SO I HIGHLIGHT THIS, AND THIS IS, YOU KNOW, AND AGAIN, I, I DO ACKNOWLEDGE THAT THERE'S DIFFERENT WAYS TO REPRESENT THIS, AND IT'S CHALLENGING, BUT THIS, THIS REPRESENTATION SHOWS ROUGHLY, UH, 50 HOURS OF LOAD SHED AND 400 HOURS OF, UM, WATCH FOR THE ERCOT CRITERIA. 
          THAT'S NOT, WE, WE, WE ARE NOT SEEING 50 HOURS OF LOAD SHED IN EXPECTATION IN A YEAR. 
          WE'RE, WE'RE VERY, VERY, VERY, VERY FAR AWAY FROM THAT. 
          UM, AND SO YOU CAN TAKE THAT AND MULTIPLY IT WHEN YOU GET TO THE IMM ASSUMPTION. 
          SO I, I JUST WANNA SET THIS UP. 
          THIS, THIS IS A REPRESENTATION OF HOW THE TWO DIFFERENT, UH, PROPOSALS COMPARE TO EACH OTHER. 
          THEN IF I GO TO THIS ONE, THIS IS, THIS IS THE IMM PROPOSAL, DIFFERENT, DIFFERENT REPRESENTATION. 
          BUT THIS IS THE IMM PROPOSAL, UM, ON ITS OWN. 
          SO IT'S NOT ANCHORED TO THE MOST CONSERVATIVE ASSUMPTIONS, UH, THAT, THAT DEFINE THE UPPER BOX. 
          AND SO HERE YOU SEE, UH, LESS THAN 20 HOURS OF WATCH AND ZERO HOURS OF LOAD CHECK, SAME, SAME SITUATION, SAME, SAME AS METHODOLOGY PROCESS. 
          AGAIN, I WANNA ACKNOWLEDGE IT'S CHALLENGING BECAUSE OF THE STOCHASTIC NATURE OF THE SPACE THAT, THAT THE SIMULATIONS ARE WORKING IN. 
          IT CAN BE A LITTLE CHALLENGING TO PICK ONE WAY TO COMPARE DIFFERENT RESULTS, BUT THIS COMPARES THIS, THIS SHOWS THE IMM PROPOSED RESULTS ON THEIR OWN, UM, WITHOUT BEING, UH, SUPERIMPOSED ON A SET OF MOST CONSERVATIVE ASSUMPTIONS. 
          SO I SHOW THAT BECAUSE IT'S A CHALLENGE REPRESENTING, UM, DIFFERENT SCENARIOS, UH, COMPARABLY, UH, IN, IN SOME SETTINGS. 
          SO, SO THE PUNCHLINE FROM THIS IS, THIS CHART IS ABSOLUTELY HORRIFIC. 
          UH, I DIDN'T BRING MY RIGHT 
          [02:30:01]
GLASSES FOR THIS TWO, 2000 HOURS OF LOAD SHED AND, AND 5,000 HOURS OF WATCH, SADLY, THAT DOES NOT HELP MY, MY VIEW, BUT I DO APPRECIATE THAT, . 
          YOU'RE ALL RIGHT. 
          THANKS. 
          UM, YEAH, MY, MY OTHER GLASSES ARE VERY DIFFERENT FROM THESE. 
          UM, AND SO, SO ANYWAY, THIS BACK TO THIS, THIS, THIS IS MUCH DIFFERENT, UH, SAME, SAME SIMULATION PROCESS, SAME MODELING PROCESS, BUT IT SHOWS THE RESULTS IN A MUCH DIFFERENT FASHION, UM, UH, ON THEIR OWN AS OPPOSED TO ANCHORED TO A REAL, A REALITY THAT IS THE MOST CONSERVATIVE SET OF ASSUMPTIONS. 
          SO, SO, SO LET'S GET TO THE MEAT OF THIS. 
          UH, SO WHAT, WHAT, WHAT DO YOU TAKE AWAY FROM THAT? WHAT DO YOU TAKE AWAY FROM THERE'S DIFFERENT WAYS TO, TO SHOW ALL OF THIS. 
          UM, I, I BELIEVE THAT THE LAST REPRESENTATION, THE ONE THAT SHOWED LESS THAN 20 HOURS OF WATCH AND ZERO HOURS OF LOAD, SHE, UH, WHERE, WHERE THE IMM MODEL STANDS ON ITS OWN AND IS NOT ANCHORED TO, UM, THE MOST CONSERVATIVE SET OF ASSUMPTIONS IS THE RIGHT, RIGHT WAY TO LOOK AT ALL OF THE MODELS. 
          SO, UM, SO WE BELIEVE THAT, UH, OVER PROCURING THROUGH THE AS METHODOLOGY WILL UPLIFT EXCESSIVE COST TO CONSUMERS. 
          AS I SAID, YOU WILL SEE AN INCREASE IN REC WHEN YOU SEE AN INCREASE IN THE AS, UM, PROCUREMENT QUANTITIES. 
          UH, IT'LL SUPPRESS THE PRICE OF ENERGY OVER TIME. 
          THAT IS NOT GOOD FOR TEXAS, GIVEN THE LOAD RAMP THAT TEXAS IS ANTICIPATING, NO MATTER, NO MATTER WHICH PROPORTION OF THAT LOAD RAMP, UM, THAT YOU'RE SEEING. 
          AND, UH, IT WILL INCREASE THE FREQUENCY OF ROCK CONSTRUCTIONS. 
          SO WE HAVE A RECOMMENDATION IN HERE. 
          OUR RECOMMENDATION IS PRETTY FAR AWAY FROM KOTS, UH, ONE HOUR TIME HORIZON FOR SUPPLY AND DEMAND FORECAST ERROR, UH, PROBABILITY OF FIRM LOAD. 
          SHE, INSTEAD OF A PROBABILITY OF WATCH CONDITIONS, REMOVE THE REGULATION IN RRS CONSTRAINT FROM THE CRITERIA. 
          AGAIN, THERE WAS AMPLE UNUSED OFFERS AND REGULATION IN RRS PLUS AMPLE HEADROOM TO ALLEVIATE, UM, ANY CONCERN OF REPLACEMENT AND A CREDIT, UH, ENERGY STORAGE RESOURCE HEADROOM BASED ON SUSTAINABLE OUTPUT FOR AN HOUR RATHER THAN FOUR. 
          SO, SO THAT'S OUR PROPOSAL. 
          UH, THAT'S THE END OF MY PRESENTATION. 
          I'M HAPPY TO TAKE QUESTIONS IF YOU LIKE. 
          THANK YOU, JEFF. 
          ANY QUESTIONS? CHAIRMAN? UH, JULIE, DID YOU HAVE ONE? JEFF, I, I APPRECIATE HOW YOU TRY TO, YOU KNOW, PUSH THE NEEDLE EVERY TIME YOU'RE UP HERE AND, YOU KNOW, WE LISTEN TO YOU, AND THEN MAYBE A YEAR FROM NOW WE ADOPT SOME OF THESE THINGS. 
          UM, BUT IF WE TRANSLATED THIS, WE ALL WANT FIVE NINTHS RELIABILITY, RIGHT? WE, WE WANT A LOT OF UPTIME HERE. 
          HOW, HOW CAN WE TRANSLATE THAT INTO LIKELIHOOD OF LOAD? SHE, SO, SO I THINK THIS IS AN ACCURATE TRANSLATION HERE. 
          UM, YOU KNOW, ONE THING THAT I'LL MENTION IN, IN THE SIMULATION PROCESS, AND, AND THANK YOU FOR ASKING THE QUESTION, THE SIMULATION PROCESS AND THE PROCESS OF FIGURING OUT HOW TO REPRESENT THE RESULTS OBJECTIVELY IS A CHALLENGING ONE WHEN YOU HAVE A NUMBER OF DIFFERENT ALTERNATIVES AND, AND STOCHASTIC PROCESSES. 
          BUT I WILL SAY UNDERLYING THE IMM MODEL, AS WELL AS YOUR COT MODEL AND ANY OF THE OTHER PERMUTATIONS, THEY SIMULATED, YOU KNOW, YOU HAVE THE SAME LOAD AND OUTAGE AND, AND, UM, RENEWABLE AVAILABILITY. 
          SO I MEAN, THOSE ARE, THOSE ARE THE KEY FOUNDATIONS THERE. 
          THIS, THIS STANDS ON ITS OWN. 
          UM, I APPRECIATE YOUR QUESTION, BUT, BUT THIS JUST STANDS ON ITS OWN. 
          SO, AND THIS WAS AVAILABLE FROM THE ERCOT, UH, HTML TOOL THAT THEY MADE AVAILABLE TO EVERYONE THAT HAS ALL THE DIFFERENT SIMULATION PERMUTATION RESULTS IN IT. 
          I MAY HAVE TROUBLE READING THIS SLIDE. 
          WHAT, WHAT IS THE LIKELIHOOD? UH, ZERO. 
          I DON'T SEE ZERO. 
          SO, SO ZERO ZERO, LIKE, RIGHT. 
          UH, IT WOULD BE RIGHT HERE WHERE THE MOUSE THING IS. 
          UM, AND SO WHAT YOU HAVE HERE, I WILL TAKE MY GLASSES OFF AGAIN TO READ IT TO YOU ASKING MORE, LIKE, IS IT ONE TIME PER MILLION? OH, I, I SEE. 
          UM, WELL, THIS, THIS SHOWS THAT IT'S NEVER, BUT IT'S NEVER, NEVER, RIGHT. 
          SO, BUT IT'S, IT'S, IT'S ONE IN A YURI, SO, SO, BUT SHOWS EVERYBODY'S, SO EVERYBODY'S SIMULATION IS ONE IN A URI, UM, FOR OUTAGES AT LEAST. 
          SO, SO THIS, THIS SHOWS THAT THE ODDS 
          [02:35:01]
OF AN OUTAGE WITH THE IMM ASSUMPTIONS, UH, FOR A LOWER PROCUREMENT TARGET ARE, SHOULD HAVE A ZERO OR NEAR ZERO PROBABILITY OF AN OUTAGE. 
          WE DO, WE DO GET A WATCH, UH, JUST UNDER 20 HOURS OUT OF, OUT OF THE EXPECTED OR AVERAGE YEAR CHAIRMAN GLEASON. 
          THANK YOU, MR. CHAIRMAN. 
          JEFF, UH, FIRST I WANNA SAY APPRECIATE YOU AND DAVID SPENDING ALMOST TWO HOURS WITH ME AND MY STAFF GOING OVER ALL OF THIS. 
          I THOUGHT IT MIGHT BE HELPFUL JUST TO MAYBE GO OVER A COUPLE THINGS THAT WE DISCUSSED IN THAT MEETING. 
          SO I THINK YOU'VE ACKNOWLEDGED HERE THAT YOU BELIEVE WE'RE MAKING PROGRESS IN THE RIGHT DIRECTION. 
          ONE OF THE THINGS WE TALKED ABOUT IS, YOU KNOW, I, I KNOW, AND YOU'VE SAID THIS TODAY, YOU'VE CHARACTERIZED IT THAT YOUR RECOMMENDATION IS FAR AWAY FROM ERCOT, BUT YOU ALSO UNDERSTAND THAT FOR THE GRID OPERATOR MAKING INCREMENTAL CHANGES MAY BE A REASONABLE APPROACH TO DOING THIS. 
          CORRECT? YEP. 
          I DO RECOGNIZE THAT. 
          YEAH. 
          AND THEN CONCERNING THE REG UP, UH, THE RECOVERY OF REG UP AND RRS ERCOT IN THEIR PRESENTATION TALKS ABOUT HOW THIS GRID IS DIFFERENT BECAUSE IT DOESN'T HAVE SYNCHRONOUS INTERCONNECTION WITH OTHER GRIDS. 
          DO YOU AGREE? I KNOW YOU ALL, YOU KNOW, POTOMAC LOOKS AT, AT MULTIPLE GRIDS. 
          DO YOU AGREE THAT THE CHARACTERISTICS OF THIS GRID MAKE THE OPERATOR NEED TO, UH, PERHAPS TAKE DIFFERENT ACTIONS THAN OTHER GRID OPERATORS? YEAH, I DO AGREE WITH THAT. 
          I, I WOULD THROW IN, YOU KNOW, THE, THE STANDING ORDER TO BUY REPLACEMENT FOR REG UP AND RRS IS, I'M, I'M NOT CHALLENGING IN ANY WAY, ACTUALLY, ERCOT MAYBE UNIQUE, UH, NEED TO BE ABLE TO REPLENISH THOSE ON A SCHEDULE. 
          JUST THE SAME, THE SAME NERC SCHEDULE THAT APPLIES TO EVERYONE ELSE. 
          IT'S JUST MORE CHALLENGING. 
          IT COULD BE MORE CHALLENGING AS YOU POINT OUT, BECAUSE IT'S NOT INTERCONNECTED WITH THE OTHER GRID. 
          IT CANNOT LEAN ON OTHER RESOURCES OUTSIDE HIS CONTROL AREA. 
          BUT THE OFFER STACKS, THE UNUSED OFFER STACKS IN THE HEADROOM THAT HAVE EXISTED, UH, IN ERCOT, IN MY VIEW, MAKE THE REPLACEMENT PURCHASE OF REG AND RRS REDUNDANT, IT'S NOT NECESSARY. 
          AND SO I'M AG I DO AGREE THAT THE NEED, UH, EXISTS AND IT IS A MORE SERIOUS NEED AND, AND ERCOT THAN IT IS IN OTHER RTOS. 
          BUT, BUT THE MEANS TO MEET THAT NEED ARE ALREADY THERE IN THE MARKET WITH, WITHOUT, WITHOUT REDUNDANT REPLACEMENT. 
          BUT LIKE YOU SAID, PART OF THAT IS, IS AN IS FOR NERC, RIGHT? THE REQUIREMENT. 
          YEAH. 
          CORRECT. 
          AND SO LUCKILY WE HAVE, UH, THE REGIONAL ENTITY DESIGNATED DELEGATED AUTHORITY BY NERC TO, TO LOOK AT ERCOT HERE, SO WE CAN ASK THEM THEIR OPINION ON THAT AS WELL, RIGHT? YEP. 
          THANK YOU. 
          THANKS, CHAIRMAN GLEASON. 
          UH, JOHN, CAN I JUST TAKE ONE POINT AND THEN I THINK DAN WILL BE NICE, JEFF, THE PROBLEM WITH MANY OF YOUR PRESENTATIONS, INCLUDING THIS ONE, IS THAT WE AS DIRECTORS SIT HERE WITH A DILEMMA. 
          UM, WE HEAR A RECOMMENDATION FROM OUR OWN STAFF BASED ON THEIR ENGINEERING WORK, AND THEN WE GET A COMPLETELY ORTHOGONAL VIEW OF THE WORLD FROM YOU. 
          AND IT'S IMPOSSIBLE TO RECONCILE THOSE TWO THINGS. 
          AND, AND SO I DON'T REALLY UNDERSTAND AS A DIRECTOR HOW I CAN BELIEVE YOU AND BELIEVE MY OWN STAFF. 
          AND SO I'M FORCED TO THEN MAKE A DECISION BASED ON WHAT THE ERCOT STAFF SAYS, AS MUCH AS YOU MIGHT HAVE VALID THINGS TO BRING TO THE TABLE. 
          SO UNLESS YOU CAN FIND A WAY TO RATIONALIZE THIS WITHIN THE RECOMMENDATIONS OF THE ERCOT STAFF, I DON'T KNOW WHAT TO DO WITH IT. 
          AND, AND THAT'S A MORE GENERAL STATEMENT AS WELL, BUT IT'S CERTAINLY TRUE HERE. 
          YEAH, I, I CAN CERTAINLY APPRECIATE THAT. 
          IT'S NOT EASY TO SIT HERE AND HEAR TWO DIFFERENT STORIES. 
          UH, AND, AND YOU COULD VIEW THEM AS BEING VERY SIMILAR STORIES. 
          I MEAN, WE, WE CERTAINLY RECOGNIZE THE NEED FOR RELIABILITY AND THE NEED TO PROCURE THE, THE FOUR DIFFERENT SERVICES, FIVE SERVICES. 
          ONCE DRRS GETS IN IT, IT'S JUST A QUANTITY ISSUE. 
          AND SO, YOU KNOW, I I WOULD PUT FORWARD HAVING WORKED AT THREE DIFFERENT RTOS, THIS TENSION IS NOT UNUSUAL. 
          SO YOU'LL SEE OPERATION STAFF WANT TO HAVE MORE, UM, FLEXIBILITY AND MORE RESERVE, UH, JUST GENERICALLY, UM, BECAUSE THAT, THAT HELPS THEM. 
          WHAT I'M HERE TO DO IS TO TRY AND HELP MERGE THAT NEED WITH HOW IT IMPACTS THE MARKET. 
          I DON'T, I DO NOT ENVY YOUR SITUATION TO TRY AND MAKE SENSE OF THE TWO, BUT, BUT, BUT YET HERE I AM TRYING TO HELP, HELP YOU UNDERSTAND THAT IN MY VIEW, AND, AND I, YOU KNOW, I'VE NEVER WORKED ON AN OPERATIONS FLOOR, BUT I HAVE WORKED 
          [02:40:01]
AT THREE DIFFERENT RTOS NOW AND, AND IN MANY CASES, VERY CLOSELY WITH THE OPERATION STAFF, IN MY VIEW, ERCOT ISS OVER PROCURING AND IT'S GONNA HARM THE MARKET. 
          I DON'T KNOW HOW YOU, I DON'T KNOW HOW YOU RECONCILE THAT INTO A VOTE. 
          UH, IF YOU HAVE SOME, IF YOU'D LIKE TO TALK OFFLINE AND YOU HAVE SOME SUGGESTIONS OF HOW I COULD COME DIFFERENTLY TO BETTER INFORM, I'D BE VERY OPEN TO THAT. 
          OKAY. 
          DAN, DID YOU HAVE SOMETHING? SO I, I, I'D LIKE TO TRY TO BUILD A BRIDGE BETWEEN THESE TWO SLIDES. 
          'CAUSE I THINK THIS IS IMPORTANT THAT, THAT, UM, IT, ON THE PREVIOUS SLIDE, JEFF, WOULD YOU MIND GOING BACK TO THAT? YEAH. 
          SO, SO IT'S, IT'S WHAT'S YOUR RE WHAT IS YOUR REFERENCE POINT? AND SO WHAT THIS IS, IS SHOWING THE OUTCOME OF WHAT WE PROPOSED AND THE WHAT THE IMM PROPOSED IN THE, IN THE LOWER DIAMONDS, ASSUMING THAT THERE'S NO HEADROOM, OKAY? SO IT'S REFERENCED BACK TO THAT CASE THAT THERE'S NO EXTRA CAPACITY COMMITTED OVER WHAT'S NEEDED FOR LOAD PLUS AS, AND THEN THE OTHER ONE. 
          SO, SO IN THAT CASE, IF YOU DON'T HAVE ANYTHING ELSE EXCEPT WHAT YOU'RE BUYING AND YOU BUY LESS, IT'S GONNA BE LESS RELIABLE, RIGHT? SO YOU'RE GONNA HAVE MORE CHANCE OF EEAS AND SO FORTH. 
          AND IF YOU GO TO THE NEXT SLIDE THAT IS REFERENCED, IT'S, IT'S THE IMM ASSUMPTION REFERENCED AGAINST THE ASSUMPTION THAT YOU HAVE AS MUCH HEADROOM IN 2027 AS WHAT YOU HAD IN 2025. 
          AND SO THAT'S, IT'S, IT'S, IT'S A DIFFERENCE IN REFERENCE. 
          IT'S NOT A DIFFERENCE NECESSARILY. 
          AN ASSUMPTION IS DIFFERENCE IN WHAT IS THE REVERENCE. 
          AND SO THAT'S ONE OF THE FUNDAMENTAL QUESTIONS, RIGHT? IS DO YOU ASSUME YOU'RE GONNA HAVE AS MUCH HEADROOM AS YOU HAD IN 2025, OR ARE YOU GONNA ASSUME YOU DON'T HAVE ANY? AND, UH, VISTA'S GONNA ARGUE IN A MINUTE, YOU SHOULD ASSUME YOU DON'T HAVE ANY AND, AND PAY FOR IT ALL. 
          AND THEN THE IMM SAYING, WELL, YOU SHOULD ASSUME YOU GOT EVERYTHING THAT YOU HAD BEFORE AND NOTHING'S CHANGED. 
          SO THAT'S, THAT'S REALLY THE, THE, THESE TWO SLIDES ARE NOT, I MEAN, I DON'T KNOW THAT I DISAGREE WITH THIS SLIDE, AND IF MAY TELL ME I'M WRONG, BUT , IT'S, IT'S, IT'S NOT THAT THAT IT IS WRONG, IT'S JUST WHAT'S THE REFERENCE POINT, RIGHT? WELL, THAT'S THE DILEMMA DIRECTORS HAVE IS THEY LOOK AT THIS, THEY CAN'T RECOGNIZE, THEY CAN'T RATIONALIZE THE REFERENCE. 
          SO, AND, AND I, I APPRECIATE THAT POINT, AND FROM OUR PERSPECTIVE, YOU KNOW, HAVING HEADROOM AND BEING ABLE TO USE THAT HEADROOM NOT FOR FREE, YOU PAY FOR THE HEADROOM AS YOU NEED IT. 
          SO IF YOU LOSE ALL OF YOUR REGULATION BECAUSE IT HAD TO RESPOND, YOU BUY ADDITIONAL FROM THE HEADROOM, BUT YOU CAN'T. 
          BUT IN OUR OPINION, YOU HAVE TO ASSUME THAT HEAD ROOM'S THERE, UM, BECAUSE IT'S THERE. 
          AND SO THAT PROVIDES YOU WITH, UH, IN A RTC WORLD WHERE ALL THIS IS HAPPENING IN REAL TIME IN THE FIVE MINUTE SC INTERVALS THAT HEADROOM IS OPPORTUNITY FOR RTC TO RECURE, WHATEVER IT NEEDS IN THE MOST EFFICIENT WAY POSSIBLE. 
          BUT, BUT THANK YOU, DAN, FOR THAT EXPLANATION. 
          I APPRECIATE THAT. 
          OKAY. 
          ANYONE ELSE? UH, DID SOMEBODY ELSE HAVE A COMMENT QUESTION? MR. CHAIRMAN? OKAY, JOHN, YOU, YOU JUST ARTICULATED SOMETHING PUBLICLY THAT I'VE TALKED TO BOTH ERCOT STAFF AND THE IMM ABOUT, I FEEL THE SAME WAY, LIKE A LOT OF TIMES AT THE COMMISSION WE'RE KIND OF HIGH STRADDLED BETWEEN THESE TWO, UM, ORGANIZATIONS. 
          AND SO WHAT I ASKED OF JEFF AND, AND DAVID, AND ALSO MY MEETING WITH CHAD IS TO SET UP MEETINGS WITH EACH OF THE COMMISSIONERS, OR WE CAN DO IT IN TWOS IF WE NEED TO, UM, TO DO A POINT COUNTERPOINT ON ALL THESE ISSUES PRIVATELY, BECAUSE I DON'T KNOW, THIS IS ALWAYS THE BEST VENUE FOR THAT. 
          UM, AND SO JUST AS A, AS A THOUGHT EXERCISE, IT MAY BE WORTH, YOU KNOW, I KNOW YOU ALL DO LUNCH AND LEARNS ON FRIDAYS, THINGS LIKE THAT TO ASK THE SAME THING BECAUSE I, I FEEL THE EXACTLY THE, EXACTLY THE SAME WAY THAT YOU FEEL ON A LOT OF THESE ISSUES WHERE, UM, YOU KNOW, BOTH SIDES MAKE REALLY GOOD ARGUMENTS. 
          AND IT WOULD BE HELPFUL TO JUST GO THROUGH A SESSION OF POINT COUNTERPOINT ON EVERY ONE OF THESE ISSUES, UM, TO REALLY HASH THEM OUT. 
          UH, I THINK THAT'D BE VALUABLE. 
          ANY OTHER QUESTIONS FOR JEFF? JEFF, THANK YOU FOR YOUR INPUT. 
          UH, THANK YOU. 
          CONTINUING ON THE ANCILLARY SERVICES, UH, METHODOLOGY DISCUSSION, WE'RE GONNA INVITE BETH GARS OF THE TECH REPRESENTATIVE FOR RESIDENTIAL CONSUMERS TO JOIN THE PODIUM. 
          BETH, THE FLOOR IS YOURS. 
          UH, DO YOU WANT TO TAKE THE SCREEN OFF FOR ME, SIR? THANK YOU. 
          UM, I DON'T, I DON'T NEED, UH, I DON'T NEED JEFF'S PRESENTATION. 
          WHATEVER AN APPROPRIATE BLANK. 
          UH, GOOD AFTERNOON. 
          MY NAME IS BETH GARZA AND I'M HERE TODAY AS, AS THE CHAIRMAN SAYS, I'M HERE TODAY IN MY ROLE AS THE TAC MEMBER REPRESENTING RESIDENTIAL CONSUMERS. 
          [02:45:01]
THANK YOU FOR THE OPPORTUNITY TO EXPRESS MY CONCERNS WITH THE 2027 ANCILLARY SERVICE METHODOLOGY STEADFASTLY PUT FORTH BY ERCOT STAFF. 
          MY COMMENTS TODAY ARE MY OWN, HOWEVER, I, ALONG WITH ALL OF THE CONSUMER REPRESENTATIVES, WERE UNITED IN, IF NOT OPPOSITION, NON-SUPPORT , UM, TO ALL PROPOSED MOTIONS ON THIS TOPIC AT TAC AND AT THE RELIABILITY, UH, AND OPERATIONS SUBCOMMITTEE AND WHOLESALE MARKETS SUBCOMMITTEES UMA ALSO REMEMBER THAT LAST YEAR, CONSUMERS WERE UNITED IN OPPOSITION TO LAST YEAR'S CONSIDERATION OF THE ANCILLARY SERVICE METHODOLOGY FOR MANY OF THE SAME REASONS THAT I'M GOING TO TALK ABOUT TODAY. 
          LET ME BE CLEAR BEFORE I START. 
          CONSUMERS WANT RELIABILITY. 
          CONSUMERS ARE WILLING TO PAY FOR RELIABILITY, HOWEVER, CONSUMERS DO NOT WANT TO PAY FOR ADDITIONAL SERVICES THAT BEYOND WHAT IS REQUIRED TO PROVIDE THAT RELIABILITY. 
          IN SHORT, THE COMBINATION OF ASSUMPTIONS ERCOT HAS SELECTED AS PART OF THEIR PROPOSED METHODOLOGY RESULTS IN REQUIREMENTS FOR TOO MUCH ANCILLARY SERVICE CAPACITY. 
          TO FOCUS ON MY SPECIFIC CONCERN, I WANNA DRAW YOUR ATTENTION BACK TO THE ERCOT POSITION THAT THE AMOUNT OF NON SPIN PLUS ECRS CAPACITY MUST EXCEED THE SUM OF THE RESPONSIVE RESERVES PLUS REG UP. 
          IN CONTRAST TO WHAT YOU HEARD, JUST HEARD FROM THE IMMI WHOLEHEARTEDLY AGREE THAT ERCOT MUST BE ABLE TO RESTORE ITS FREQUENCY RESPONSIVE RESERVES QUICKLY IN THE AFTERMATH OF THEIR DEPLOYMENT. 
          HOWEVER, IT'S ONLY RESPONSIVE RESERVES THAT ARE, THAT PROVIDE THAT FREQUENCY RESPONSIVE SERVICE. 
          IT IS NOT REGULATION. 
          I COULD ACCEPT THAT ECRS PLUS NONS SPIN MUST EXCEED RESPONSIVE RESERVES, BUT EVEN THAT MAY RESULT IN OVER PROCUREMENT BECAUSE IN A FREQUENCY EVENT, THERE ABSOLUTELY WILL BE SOME AMOUNT OF GOVERNOR RESPONSE FROM ALL ONLINE GENERATORS DURING OUR DELIBERATIONS ON THIS TOPIC THIS YEAR. 
          AND LAST, IT IS CLEAR THAT THIS SUM OF SERVICES REQUIREMENT IS THE PRIMARY BINDING CONSTRAINT DETERMINING THE QUANTITY OF NONS SPIND RESERVES, VARYING ASSUMPTIONS RELATED TO THE PROBABILITY OR THE, UH, THE AMOUNT OF ALLOWABLE RESERVE SHORTAGE HAVE MINIMAL EFFECT AFFECTING, WILL HAVE MINIMAL EFFECT REDUCING NONS SPIND REQUIREMENTS WITHOUT A CHANGE TO THAT SUM OF SUM, SUM OF SERVICES CONSTRAINT. 
          NOW, BEFORE NED COMES UP AND COVERS HIS ISSUES WITH THE RISK CREDIT ASSUMPTIONS, LET ME OFFER MY 2 CENTS. 
          UNFORTUNATELY, IT SEEMS THAT ERCOT USE OF RISK CREDITS IS NOT BASED ON ANY ANALYTICAL RIGOR. 
          THEY SEEM TO BE USED MORE LIKE SOME KIND OF FUDGE FACTOR TO GET QUANTITIES INTO SOME MORE ACCEPTABLE LEVEL. 
          AS A GENERAL RULE, I DON'T ACCEPT RELYING ON CAPACITY THAT HAS NOT BEEN PAID FOR. 
          HOWEVER, UNLESS AND UNTIL WE CAN SEE MORE RIGOROUS ANALYSIS AROUND AVAILABLE RESOURCE CAPABILITIES, I CAN'T SUPPORT ELIMINATING THE INCLUSION OF RISK CREDITS TO WRAP UP. 
          IF THE ERCOT BOARD FOR ERCOT BOARD'S RESPONSIBILITY IS ONLY TO ENSURE RELIABILITY, YOUR DECISION TODAY IS AN EASY ONE. 
          ALLOW ERCOT TO HAVE AS MUCH ANCILLARY SERVICE CAPACITY AS ANYONE CAN EVER IMAGINE NEEDING. 
          IF THE BOARD HAS A RESPONSIBILITY TO ENSURE RELIABILITY AT A REASONABLE COST, YOUR DECISION TODAY IS MUCH MORE DIFFICULT. 
          THANK YOU FOR YOUR TIME. 
          I'M HAPPY TO ANSWER ANY QUESTIONS. 
          SO, BETH, WHAT WOULD THAT, IF OUR RESPONSIBILITY IS RELIABILITY AT, AT REASONABLE COST, WHAT IS THE SOLUTION? I THINK, SO ONE OF THE CHALLENGES WE HAVE IS HAVING A RATIONAL DISCUSSION OF WHAT IS THE COST ASSOCIATED WITH BEING IN A WATCH, BEING IN EEA, AND, AND I THINK WE HAVE A COST ASSOCIATED WITH LOAD. 
          SHE, WE CERTAINLY, AS AN ORGAN, THIS ORGANIZATION SEEMS TO HAVE A, AN AVERSION, WHICH I, I INTERPRET AS PLACING A VERY HIGH COST ON BEING IN A WATCH OR EVEN AN EEA ONE SITUATION. 
          AND IF I COULD HELP TRY TO BRIDGE THE GAP BETWEEN WHAT JEFF JUST SAID, AND THOSE, THAT TENSION THERE IS EEA ONE IS JUST GIVES 
          [02:50:01]
ERCOT MORE AUTHORITY TO DO THINGS IN THE SYSTEM. 
          IT'S NOT A CUSTOMER FACING EVENT. 
          THERE'S NOTHING HAPPENING IN TERMS OF ANYBODY LOSING THEIR SERVICE. 
          IS THERE A COST ASSOCIATED WITH THAT? AND IF THERE'S NOT A COST ASSOCIATED WITH THAT, WE SHOULDN'T BE AFRAID TO BE IN THOSE SITUATIONS ON PERIODICALLY, INFREQUENTLY. 
          BUT IF THERE IS A COST ASSOCIATED WITH THAT CONDITION, AND MAYBE THAT COST IS VERY HIGH AND IT DOESN'T HAVE TO BE A FINANCIAL, YOU KNOW, WRITE A CHECK COST, THE COST CAN BE OTHER THINGS. 
          IF THAT COST IS VERY HIGH, THEN, THEN I GUESS WE'LL HAVE TO AVOID IT. 
          UH, THAT'S ONE QUESTION. 
          THAT'S THE TRADE OFF THAT WAS GONNA BE, THANK YOU FOR THAT RESPONSE. 
          BY THE WAY, THANK YOU FOR BEING HERE AND PRESENTING YOUR VIEWPOINTS. 
          THAT WAS ONE OF MY NEXT THING. 
          SOMETIMES THERE'S NOT A FINANCIAL COST, BUT THERE'S A SOCIAL OR UNCERTAINTY COST YES. 
          THAT, THAT CAUSES, UM, ANGST AMONG THE 27 MILLION CUSTOMERS, UH, IN THE, UH, ERCOT REGION. 
          UH, WOULD YOU ADMIT THAT THAT'S A COST? I I WOULD ADMIT THAT THAT'S A COST THINK YOU DID. 
          I THINK THAT THERE'S WAYS, AND, AND PABLO TALKED ABOUT IS REVISED FINALLY GETTING AROUND TO REVISING OUR WAY OF COMMUNICATING THE STATE OF THE SYSTEM BROADLY. 
          I THINK THAT'S A WAY TO ADDRESS THAT. 
          THAT'S A AND FRANKLY, A LOW COST WAY TO ADDRESS THAT. 
          OKAY, THANK YOU. 
          WOULD I RATHER, WOULD I RATHER HAVE BETTER MED MESSAGING ABOUT WHAT'S THE STATE OF THE GRID OR WOULD I RATHER SPEND MILLIONS OF DOLLARS MORE TO HAVE EXTRA CAPACITY SITTING AROUND? OKAY. 
          I, I KNOW WHAT CHOICE I WOULD MAKE. 
          THANK YOU, CHAIRMAN GLEASON. 
          OH, YOU DIDN'T HAVE ONE? OKAY. 
          ANYONE ELSE? OKAY, AGAIN, WE'RE MAKING ANCILLARY SERVICES METHODOLOGY FUND TODAY, SO IT'S IMPORTANT ISSUE. 
          THANK YOU FOR TIME. 
          IT'S IMPORTANT. 
          UH, NED WITH RA IS GONNA PRESENT VISTA'S VIEWPOINT. 
          THANK YOU, BETH. 
          SORRY, YOUR MIC IS ALREADY ON. 
          OKAY, THANK YOU. 
          OKAY. 
          ALL RIGHT. 
          I WAS GONNA SAY GOOD MORNING, BUT IT'S GOOD AFTERNOON NOW. 
          UM, NED SKE WITH VISTA, THANK YOU FOR, UH, GIVING ME THE TIME TO SPEAK WITH YOU TODAY. 
          UM, I THINK YOU'VE ALREADY HEARD A LOT OF REALLY GOOD POINTS ON BOTH SIDES. 
          I, I, I WANNA RECOGNIZE RIGHT OFF THE BAT, BECAUSE I WAS, I WAS THINKING ABOUT HOW TO START, START MY, UH, MY COMMENTS OFF. 
          AND I THINK IT'S IMPORTANT TO, TO START OFF BY GIVING ALL OF OURSELVES SOME GRACE. 
          WE ARE LOOKING AT A SYSTEM THAT IS GONNA BE VERY DIFFERENT IN THE FUTURE VERSUS WHAT WE'VE SEEN IN THE PAST. 
          THIS IS THE FIRST TIME THAT WE'RE REALLY TALKING ABOUT ANCILLARY SERVICES FULLY IN A REALTIME CO OPTIMIZATION CONTEXT. 
          AND THAT IS A PARADIGM SHIFT IN HOW ANCILLARY SERVICES ARE PROCURED, DEPLOYED RECURED IN REAL TIME. 
          AND THERE ARE SOME IMPORTANT, UH, DIFFERENCES THAT COME OUT FROM THAT. 
          SO, UM, I, I THINK IT'S IMPORTANT THAT WE ALL JUST RECOGNIZE THAT WE'RE, WE'RE DIGESTING LOTS OF COMPLEX INFORMATION AND, AND, UM, THAT, YOU KNOW, THAT'S NOT LOST ON, I THINK ANYONE HERE, UM, SHOULDN'T BE ANY SURPRISE TO YOU. 
          MY MAIN MESSAGE TO YOU TODAY IS I WOULD RECOMMEND THAT WHATEVER THE BOARD ENDORSES TODAY AND THE COMMISSION ULTIMATELY, UH, ADOPTS AND APPROVES NOT INCLUDE RISK CREDITS IN THE METHODOLOGY. 
          AND THAT IS A PRINCIPLED ARGUMENT, UM, FOR A NUMBER OF REASONS. 
          THE, THE MOST BASIC ONE THOUGH, IS IF YOU ARE SETTING YOUR TARGET BASED ON WHAT YOUR PROBABILISTIC RISK ASSESSMENT HAS SAID YOU NEED, AND THEN YOU ALLOW THE ANCILLARY SERVICE DEMAND CURVES TO PRICE THAT IN REAL TIME AND DETERMINE LET THE MARKET PROVIDE THOSE RESERVES, THEN YOU'LL GET THE PRICING SIGNALS THAT JEFF HAD MENTIONED ARE VERY IMPORTANT AND IN ENERGY ONLY MARKET, I AGREE WITH THAT POINT, AND YOU'LL ALLOW THE METHODOLOGY TO BEAR ITSELF OUT IN THE MARKET THROUGH THOSE ANCILLARY SERVICE DEMAND CURVES. 
          AND I REALLY WANNA APPRECIATE WHAT NITKA AND DAN HAD SAID EARLIER ABOUT HOW ERCOT IS GONNA BE LOOKING AT THAT ALONG WITH, UH, YOU KNOW, STAKEHOLDERS IN THE COMMISSION AND OTHERS TO REVIEW THAT IN THE NE OVER THE COURSE OF THE NEXT YEAR. 
          I THINK THAT'S A REALLY IMPORTANT THING THAT WE DO. 
          SO, UM, THAT'S PUTTING THE BOTTOM LINE UP FRONT. 
          UM, I DO ALSO WANT TO HIGHLIGHT, THERE IS A COROLLARY CONNECTION BETWEEN RUCKS AND THIS METHODOLOGY DISCUSSION. 
          UM, PARTICULARLY WHEN IT COMES TO THE HEADROOM, BECAUSE PART OF THE CONCERN THAT SOME STAKEHOLDERS INCLUDING VISTA HAVE, IS THAT THE USE OF RUX HAS, HAS A RECURSIVE, UM, INPUT INTO THAT METHODOLOGY BECAUSE THE ADDITIONAL HEADROOM THAT YOU MAY SEE IN THE PAST MAY BE DRIVEN BY RUCK ACTIVITY, WHICH IN THE FUTURE ONE, WE WANT TO MAKE SURE THE ANCILLARY SERVICE DEMAND CURVES ARE DRIVING MARKET OUTCOMES INSTEAD OF RUCKS. 
          AND TWO, UH, WE CAN'T ALWAYS ASSUME THAT THE SAME HEADROOM WILL ALWAYS BE THERE. 
          ONE OF THE THINGS THAT, UM, I BELIEVE, 
          [02:55:01]
UH, HAS BEEN MENTIONED EARLIER IS THAT WE'RE SEEING MORE EFFICIENT COMMITMENTS AFTER REALTIME CO OPTIMIZATION. 
          NOW, WHAT REAL MORE EFFICIENT COMMITMENTS MEAN IS THERE'S MORE, UH, THERE'S LESS OF AN A PRICE SIGNAL TO SELF COMMIT, RIGHT? BECAUSE THE OVERALL PRICES ARE LOWER, THERE IS LESS OF A TRADE OFF THAT SAYS IT'S, YOU KNOW, WORTH THE RISK TO GO AHEAD AND TAKE ON THAT COST TO START UP. 
          SO THAT IS THE, THE PAST PERFORMANCE IS NOT INDICATIVE NECESSARILY FUTURE, UH, RESULTS. 
          AND I THINK WE, WE NEED TO KEEP THAT IN MIND AS WE GO FORWARD. 
          SO, UM, IN KEEPING WITH THE THEME OF TRYING TO MAKE ANCILLARY SERVICES FUN, I'M GONNA TRY TO GO THROUGH JUST SOME HIGH LEVEL ANALOGIES THAT I THINK HELP TO, UM, CONVEY THESE POINTS. 
          AND, UH, PROBABLY BY THE END OF IT, THE ONE ANALOGY YOU'LL TELL ME THAT I MISSED IS, UM, NED, YOU'VE JUST BEEN BEATING A DEAD HORSE. 
          SO  I'LL TRY TO BE QUICK WITH THIS 'CAUSE I KNOW I'M IN BETWEEN, UH, US AND LUNCH. 
          SO THE RISK CREDITS IS BASICALLY, UH, AS, AS WE VIEW IT, YOU'RE LOOKING AT A PROBABILITY OUTCOME, A RISK OUTCOME IN ANY GIVEN CONDITION. 
          AND WE KNOW THAT IN SOME SCENARIOS, YOU'RE GONNA END UP IN, DOWN IN THE RED, YOU'RE GONNA BE IN THAT RISKY PAR PART WHERE YOU START VIOLATING YOUR RELIABILITY CRITERIA. 
          WE WANNA AVOID THAT. 
          OBVIOUSLY WE KNOW THAT WE CAN SOLVE FOR MOST OF THAT BY SETTING A REASONABLY HIGH TARGET. 
          AND THEN THE RISK CREDITS IS THAT BEIGE AREA WHERE YOU'RE ESSENTIALLY COMING IN AFTER THE FACT AND SAYING, WE KNOW WE CAN MEET MOST OF OUR NEEDS BY TARGETING THIS PROCUREMENT LEVEL, BUT WE'RE GONNA GO AHEAD AND REDUCE THAT QUANTITY ANYWAY, RATHER THAN SETTING THE PROCUREMENT TARGET WHERE WE'VE, THE ANALYSIS HAS SAID WE NEED IT, AND THEN LETTING THE ANCILLARY SERVICE DEMAND CURVES VALUE THAT APPROPRIATELY. 
          UM, SOME OF THE EXCHANGE THAT I THINK YOU JUST, UH, SAW WITH, UM, JEFF AND DAN WAS, YOU KNOW, WHAT ARE WE ASSUMING THE, THE STATE OF THE WORLD IS, IS IT, IS THE STATE OF THE WORLD, YOU KNOW, A ONE WHERE THERE ISN'T ANY HEADROOM IN THE FUTURE? OR ARE WE GOING TO, UH, JUST ACKNOWLEDGE THAT THERE IS MORE HEADROOM ON THE SYSTEM TODAY THAN, UH, POTENTIALLY IN THE PAST OR IN THE FUTURE? UM, THAT'S A PRICING OUTCOME. 
          THAT'S WHERE THE DEMAND CURVE SHOULD BE TELLING YOU. 
          IF YOU HAVE EXCESS HEADROOM, FINE AND YOUR ANCILLARY SERVICE PRICES ARE GONNA BE MUCH, MUCH LOWER BECAUSE YOU WON'T HAVE SCARCITY. 
          UM, BUT YOU SHOULDN'T REDUCE THE QUANTITY BASED ON THAT ASSESSMENT. 
          UM, AND I THINK THAT'S PARTICULARLY IMPORTANT IN AN ENERGY ONLY MARKET CONSTRUCT BECAUSE, UM, I'VE HEARD FOLKS PUT IT, UH, NICELY BEFORE, WHICH IS IN AN ENERGY ONLY MARKET, YOUR OPERATING RESERVES BECOME YOUR PLANNING RESERVES OVER TIME. 
          SO AS YOU'RE TRYING TO THINK ABOUT HOW DOES THIS SYSTEM MEET ALL OF THE RELIABILITY STANDARD NEEDS THAT WE HAVE OVER, OVER TIME, OVER ALL CONDITIONS, INCLUDING, YOU KNOW, LOW IN INTERMITTENT, UH, OUTPUT, STATE OF CHARGE CONCERNS, UH, EXTREME WEATHER, THE RESERVES, THE RESERVE CAPACITY HAVE THE, ESPECIALLY FOR DISPATCHABLE CAPACITY, THAT IS GOING TO BE DETERMINED BY HOW MUCH YOU'RE ABLE TO ACTUALLY PROVIDE A MARKET INCENTIVE, UH, THROUGH YOUR REAL TIME. 
          AND THAT'S NOT ALWAYS GONNA BE THROUGH ENERGY, SOMETIMES IT'S GONNA BE THROUGH, UM, THROUGH YOUR RESERVES. 
          SO THERE'S A, THERE IS A CONNECTION THERE. 
          SO THE FIRST ANALOGY THAT COMES TO MIND, YOU KNOW, ECONOMISTS HAVE THIS, HAVE A, HAVE, UH, A LONGSTANDING ONE IS THE TRAGEDY OF THE COMMONS, RIGHT? WHICH IS THERE'S A COMMON RESOURCE THAT YOU ASSUME CAN BE LEVERAGED. 
          AND THEN BECAUSE THAT IS NOT PRICED, BECAUSE THERE ARE NOT PROPERTY RIGHTS ASSOCIATED WITH THAT, IT'S GETS OVERUSED AND THEN THAT IS SPREAD THIN, AND THEN EVENTUALLY THAT RESOURCE WEARS OUT. 
          RISK CREDITS IN OUR VIEW IS, UH, IS AN EXAMPLE OF THAT WHERE WE'RE ASSUMING THAT THERE IS HEADROOM THAT WE CAN RELY ON. 
          SO WE ARE NOT PRICING THE NEED FOR THAT, RESERVE THE VALUE OF THAT RESERVE, UM, OR SENDING A SIGNAL THAT THAT QUANTITY OF RESERVE IS NEEDED AND LETTING THE MARKET DETERMINE THE OUTCOME. 
          SO THE MORAL OF THAT STORY IS THE LONGER YOU LET THAT GO ON THE, THE, UM, EVENTUALLY YOU WILL LOSE THAT COMMON RESOURCE AND THEN YOU'LL HAVE, YOU WON'T BE ABLE TO HAVE THE SAME OUTCOMES THAT YOU HAD BEFORE. 
          ANOTHER ONE, AND THIS IS, THIS IS ONE THAT I USED AT T IS, YOU KNOW, IF, IF ANYONE HAS EVER HAD AN EXPERIENCE WITH, YOU KNOW, YOU BRING YOUR LUNCH AND THEN, UH, IT DISAPPEARS FROM THE BREAK ROOM FRIDGE, WELL, YOU'RE GONNA STOP BRINGING YOUR LUNCH, RIGHT? , AND THAT'S A VERY APT ANALOGY RIGHT NOW WHERE WE'RE LOOKING AT WHAT IT'S, UH, ONE O'CLOCK, SO I KNOW WE'RE ALL GETTING HUNGRY. 
          UM, YOU WANT TO HAVE A MARKET THAT IS GONNA INCENTIVIZE WHERE, WHERE EVERYONE IS RESPONSIBLE AND, AND, UH, YOU KNOW, HELPING TO PROCURE WHERE OUR NEXT MEAL'S GONNA COME FROM, RIGHT? THERE'S NOT A FREE LUNCH TO BE HAD JUST BY ASSUMING THAT THERE WAS SOME, THERE WAS AN EXTRA SANDWICH LAST WEEK, SO WE DON'T HAVE TO PLAN FOR THIS WEEK. 
          UH, THIS IS ANOTHER EXAMPLE OF, YOU KNOW, I THINK BETH 
          [03:00:01]
PHRASED IT AS A FUDGE FACTOR, BUT, YOU KNOW, RISK CREDITS ARE, ARE, YOU KNOW, ACHIEVING A CERTAIN OUTCOME. 
          IT'S A COMPROMISE TOOL. 
          AND IF YOU CONSTANTLY ARE MAKING THOSE COMPROMISES, WELL EVENTUALLY YOU WILL TEND TOWARDS THE LIMIT. 
          AND SLIDE 10 FROM UH, NIUS PRESENTATION, I THINK TELLS YOU WHERE THAT LIMIT IS, RIGHT? WE MAY NOT BE AT THE SCENARIO WHERE YOU HAVE 54 HOURS OF LOAD SHED IN A, YOU KNOW, IN TODAY'S WORLD, BUT IF YOU MAKE THOSE COMPROMISES AGAIN AND AGAIN AND AGAIN, YOU'LL TREND IN THAT DIRECTION. 
          AND THAT'S NOT WHERE, CERTAINLY NOT WHERE VISCERA WANTS TO BE. 
          AND I, I SUSPECT THAT'S NOT WHERE, UH, THE BOARD OR THE COMMISSION WOULD LIKE US TO BE. 
          SO, UM, THAT'S ANOTHER DYNAMIC TO AVOID. 
          UH, THIS ONE, I THINK IKA HIT THIS IN DROVES IN HER PRESENTATION. 
          THE FUTURE IS MUCH MORE COMPLEX. 
          WE HAVE MORE COMPLEXITY IN OUR LOAD GROWTH UNCERTAINTY IN OUR LOAD GROWTH. 
          WE HAVE UNCERTAINTY IN LOAD FLEXIBILITY, STATE OF CHARGE OF OUR DISPATCHABLE RESOURCES, GREATER PENETRATION OF OUR INTERMITTENT RESOURCES AND THE, THE FORECASTING, UH, RISKS THAT COME ALONG WITH THAT. 
          SO WE, YOU KNOW, WHERE WE MAY HAVE BEEN ABLE TO LOOK IN THE PAST AND SAY, WELL, WE'VE GOT A STRAIGHT ROAD DRY CONDITIONS, EVERYTHING IS, IS, YOU KNOW, PRETTY STRAIGHTFORWARD. 
          IF WE'RE LOOKING BACKWARDS IN OUR METHODOLOGY TO SAY, WELL, WE HAVE PLENTY OF, OF HEADROOM, PLENTY OF RISK CREDIT THAT WE CAN PULL ON THERE. 
          WELL, WE'RE MOVING INTO A MUCH MORE WINDY ROAD WITH STEEPER CLIFFS ON THE SIDE AND MAYBE SOME BLIND SPOTS THAT WE WANT TO BE. 
          UM, WE WANNA AVOID THE RISKS ASSOCIATED WITH THAT. 
          SO, UH, THAT'S ANOTHER REASON TO NOT RELY ON THOSE RISK CREDITS. 
          INSTEAD, TAKE THE RISK ASSESSMENT FOR WHAT IT IS AND PRICE IT. 
          AND THEN, YOU KNOW, THIS LAST ANALOGY HERE IS, UM, YOU KNOW, IT'S KIND OF THE, IT'S, IT'S A COROLLARY TO THE, UH, TRAGEDY OF THE COMMONS RIGHT THERE. 
          YOU COULD ALSO DRAW AN INSURANCE, UH, PARALLEL HERE. 
          THAT IS, YOU KNOW, WHEN YOU HAVE SOMETHING THAT YOU KNOW, YOU, YOU RELY ON TO MANAGE YOUR RISKS, IN THIS CASE YOU THINK OF IT AS A FIRE DEPARTMENT, BUT IF YOU'RE NOT USING IT, IF YOU DON'T HAVE THAT EVENT AND MAYBE THEN YOU THINK, WELL, MAYBE WE DON'T NEED TO PROCURE AS MUCH, MAYBE WE DON'T NEED TO BUDGET AS MUCH FOR THAT. 
          WELL EVENTUALLY, WHEN THE TIME COMES AND YOU NEED THAT RISK MITIGATION TOOL, IT WON'T BE THERE. 
          AND THAT IS, THAT IS THE LONGER TERM CONCERN THAT WE NEED TO WORK THROUGH. 
          UM, I KNOW THERE WAS SOME DISCUSSION ABOUT COSTS, UM, AND, AND AS YOU WERE GOING THROUGH THAT, I, I WENT BACK AND LOOKED AT THE PRESENTATION, UH, ON SLIDE 10 AGAIN FROM NITHA'S MATERIALS. 
          THE DIFFERENCE BETWEEN THE ZERO RISK CREDIT SCENARIO AND THE SCENARIO ERCOT RECOMMENDS IS LESS THAN $30 MILLION IN AN AVERAGE COST. 
          UM, I THINK LAST YEAR THE MARKET TOTAL COST, UH, ACCORDING TO THE IMM STATE OF THE MARKET REPORT WAS ABOUT 16 BILLION. 
          A LITTLE BIT MORE THAN THAT. 
          SO IF WE'RE THINKING ABOUT INCREMENTAL COST RELATIVE TO THE VALUE AND THE LONG TERM SIGNAL THAT IS 0.2%, $30 MILLION OUTTA $16 BILLION IS 0.2%, AND YOU CAN SEND THE RIGHT SIGNAL TO THE MARKET, YOU CAN LET THE MARKET DRIVE THE OUTCOMES, AND, UM, I THINK ULTIMATELY YOU END UP IN A, IN A BETTER PLACE. 
          SO I WILL PAUSE THERE AND HAPPY TO TAKE ANY QUESTIONS. 
          THANK YOU, NED. 
          ANY QUESTIONS FOR NED? OKAY, QUESTION. 
          SO IF I SUMMARIZE ALL THIS, YOUR, YOUR VIEW IS THAT WE SHOULD BUY MORE ANCILLARY SERVICES, NOT LESS. 
          YOU SHOULD BUY WHAT THE, WHAT THE ANALYSIS SAYS, YOU NEED TO COVER THE RISK AND LET THE ANCILLARY SERVICE DEMAND CURVES, UH, MANAGE THAT IN REAL TIME. 
          OKAY. 
          OKAY, NED, I DON'T SEE ANY OTHER QUESTIONS. 
          THANKS FOR, UH, THANK YOU VERY MUCH. 
          UH, YOUR FEEDBACK ON THIS. 
          UH, LAST BUT NOT LEAST, UH, TEXAS RE SUBMITTED COMMENTS THAT ARE ALSO IN THE MEETING MATERIALS. 
          REPRESENTATIVES FROM TEXAS RE ARE HERE TODAY TO DISCUSS THOSE COMMENTS. 
          I'D LIKE TO INVITE, UH, THEM TO THE PODIUM AT THIS TIME. 
          YEAH, I WASN'T GONNA, I WASN'T GONNA TALK TO THEM. 
          WELL, GOOD AFTERNOON. 
          I KNOW I'M STANDING IN THE WAY OF LUNCH AS WELL. 
          UM, MY NAME'S DAVID PENNY. 
          I'M THE DIRECTOR OF LIABILITY SERVICES WITH TEXAS RE. 
          AND, UH, I REALLY APPRECIATE THE OPPORTUNITY TO COME TALK TO YOU TODAY ABOUT OUR, OUR COMMENTS. 
          SO, AS YOU KNOW, UM, UH, PART OF TEXAS RE'S MISSION AS THE, UH, NERC REGIONAL ENTITY IS TO ASSURE THE, UH, RELIABILITY AND EFF AND EFFICIENT REDUCTION OF RISKS, UH, TO, TO THE INTERCONNECTION. 
          AND IT'S THAT CONTEXT OF, UH, RISK REDUCTION AND, UH, RISK, YOU KNOW, UH, THE DYNAMIC RISK ENVIRONMENT WE'RE IN THAT I REALLY WANNA FOCUS, UH, THE CONVERSATION ON TODAY. 
          UH, NITKA COVERED A LOT OF THE RISKS WE'RE SEEING VERY WELL, SO THAT'LL HELP ME SPEED THROUGH SOME OF THE, THE COMMENTS I WAS GONNA MAKE. 
          UM, AS YOU KNOW, THE UTILITY INDUSTRY, UM, IT KIND OF GOES WITHOUT SAYING WE'RE FACING SOME UNPRECEDENTED CHALLENGES. 
          UH, AND EACH OF THESE CHALLENGES POSE UNIQUE RISKS TO THE, UH, TO THE INDIVIDUAL INTERCONNECTIONS AND TO THE DAILY OPERATION OF THE BES. 
          UH, WHEN YOU LOOK AT THESE RISKS INDIVIDUALLY, 
          [03:05:01]
THEY CAN BE EFFECTIVELY MANAGED, BUT WHEN YOU LOOK AT FROM A HOLISTIC POINT OF VIEW, THE WHOLE FAMILY OF ALL THE RISKS COMBINED, IT CREATES A VERY DYNAMIC, UH, ENVIRONMENT THAT ERCOT HAS TO NAVIGATE THROUGH. 
          UH, AND SO THAT'S WHAT I, I AGAIN, WHAT I REALLY WANT TO FOCUS ON. 
          UM, ERCOT HAS BEEN TREMENDOUSLY, UH, UH, UH, INNOVATIVE AND INSIGHTFUL IN, UH, NAVIGATING AND PUTTING FORTH PROPOSALS TO, TO MANAGE THESE RISKS. 
          AND YOU REALLY HAVE TO COMMEND THEM FOR SOME OF THE THINGS THAT THEY'RE DOING. 
          'CAUSE IT IS RECOGNIZED THAT THE EFFORTS THEY'RE TAKING IS BEING RECOGNIZED AND, AND AND COPIED NATIONWIDE. 
          UH, BUT I REALLY WANT, UH, THE MAIN THING I WANNA SAY IS THAT, UH, TEXAS RE IS NOT HERE TO ENDORSE OR ADVOCATE FOR ANY SPECIFIC ANCILLARY SERVICE METHODOLOGY. 
          IT'S REALLY TO PUT THE CONTEXT AROUND THE RISK ENVIRONMENT THAT ERCOT HAS TO NAVIGATE, UH, WITH THE PROPOSALS THAT THEY'RE MAKING. 
          UH, SO TO KIND OF STEP THROUGH A FEW THINGS, AND, AND MANY OF THESE HAVE ALREADY BEEN TOUCHED ON, UH, AS YOU KNOW, ERCOT IS OWN OWN INTERCONNECTION. 
          UH, WE DO NOT HAVE THE LUXURY OF THE EASTERN AND WESTERN INTERCONNECTIONS. 
          WE CANNOT LEAN ON OUR NEIGHBORS, UH, FOR SUPPORT DURING, UH, SEVERE EVENTS. 
          UH, WE HAVE TO MANAGE ALL THAT, YOU KNOW, UH, THROUGH INTERNAL RESOURCES. 
          UH, THE INTEGRATION OF LARGE LOADS, UH, CONTINUES TO BE AND WILL, WILL FOR SOME TIME BE THE PRIMARY RISK THAT THIS INTERCONNECTION FACES. 
          AND IT'S NOT JUST THE INCREASED LOAD OR DEMAND THEY'RE PLACING ON THE SYSTEM, IT'S THE OPERATIONAL IMPACTS FROM SOME OF THE CHARACTERISTICS. 
          THOSE LOADS HA LOADS HAVE, UH, UH, LOW VOLTAGE RIDE THROUGH ISSUES DURING TRANSMISSION FAULT EVENTS. 
          THE UNCONTROLLED OR UNCOORDINATED, UH, LOAD RAMPS THAT THESE GUYS CAN PUT ON THE SYSTEM, UH, CONTINUES TO STRESS, CREATE LOCALIZED, UH, FREQUENCY DISTURBANCES OR LOCALIZED, UH, VOLTAGE ISSUES. 
          UH, KOTS HAS TAKEN PROACTIVE STEPS IN MANAGING THAT. 
          UH, NO 2 82 COMES TO MIND. 
          AND, AND DIRK'S SQUARING THROUGH THE PROCESS TO DEVELOP, UH, REGISTRATION CRITERIA AND MAN AND, AND STANDARDS AROUND THAT. 
          BUT UNTIL THOSE STANDARDS HAVE A, UH, HAVE THE TIME TO TAKE EFFECT, WE'RE STILL IN THIS CONDITION WHERE, UH, THE, THE INCREASING THESE LARGE LOADS ON THE SYSTEM COULD CREATE, YOU KNOW, MORE SUBSTANTIAL EVENTS. 
          AND WE HAVE TO ADDRESS THAT, AT LEAST IN THE SHORT TERM THROUGH, UH, OPERATIONAL, UH, AND PLANNING PROCESSES. 
          UM, THE VARIABILITY OF OUR, UH, RENEWABLE RESOURCES ALSO PLAYS A ROLE IN THIS, UH, UH, BECAUSE WITH THE CHALLENGES THEY PRESENT, WE'RE SEEING, YOU KNOW, NET LOAD AND SOLAR RAMPS EXCEEDING 18,000 MEGAWATTS AN HOUR NOW THAT THAT HAS TO BE MANAGED. 
          UH, YOU KNOW, THROUGH OUR PROCESSES, UH, WE'RE SEEING THE, THE LOWEST RECORDED INERTIA READING WE'VE SEEN IN THE LAST 10 YEARS. 
          EARLIER THIS SPRING, UH, WE SAW, UH, HOURS IN THE SPRING WHERE WE HIT 85% RENEWABLE PENETRATION. 
          ALL THAT PLACES A STRESS ON THE SYSTEM THAT HAS TO BE MANAGED. 
          UH, WHEN YOU GET TO THESE LOW INERTIA CONDITIONS, AS, AS NITKA MENTIONED, UH, FREQUENCY DISTURBANCES CAN BECOME MUCH MORE SEVERE BECAUSE YOU HAVE HIGHER RATES OF CHANGE OF FREQUENCY AS SORT ASSOCIATED WITH THOSE LOWER INERTIA CONDITIONS. 
          AND THAT, UH, HAS TO BE MANAGED THROUGH, AS NETIKA MENTIONED, THROUGH INCREASES IN, UH, FREQUENCY RESPONSE OR RESERVES TO, YOU KNOW, TO ACCOUNT FOR THAT, UH, SCENARIO. 
          AND THAT'S IN PARTICULAR BECAUSE IT'S BASED ON THE PERFORMANCE REQUIREMENTS WITHIN THE BIO THREE STANDARD. 
          UH, AS YOU SAW IN SOME OF THE SLIDES THIS MORNING, UH, BATTERY, BATTERY ENERGY STORAGE RESOURCES, UH, ALSO PLAY A ROLE IN THIS. 
          UH, THE, THE ESRS HAVE BA BASICALLY SATURATED SOME OF THE, THE ANCILLARY SERVICE MARKETS THAT WE HAVE. 
          AND, UH, THAT DEPENDENCE ON A SINGLE RESOURCE TYPES ALSO BRINGS SOME UNCERTAINTIES WITH IT, PARTICULARLY AROUND THE, UH, UH, THE CAPACITY DURATION LIMITATIONS THAT THOSE RESOURCES HAVE. 
          IF YOU LOOK AT WHAT'S, UH, DOCUMENTED OVER THREE QUARTERS OF THE BATTERY RESOURCES HAVE FULL CAPACITY DURATION OUTPUT CAPABILITIES OF TWO HOURS OR LESS. 
          THAT HAS TO BE MANAGED AS, YOU KNOW, AS ERCOT MENTIONED, THROUGH, UH, STATE OF CHARGE MONITORING. 
          OTHER THINGS THAT, THAT, THAT, THAT THEY'RE DOING. 
          UH, THE, THE KIND OF THE FLYING THE OINTMENT IS, UH, THE, THE PERFORMANCE OF THOSE RESOURCES TO DATE HAS BEEN EXCELLENT, BUT AT THE SAME TIME, WE'VE TRULY NOT EXPERIENCED A REALLY EXTENDED DURATION, YOU KNOW, UH, CAPACITY TYPE EVENT TO, YOU KNOW, REALLY PUT THOSE, THOSE, UH, RESOURCE LIMITATIONS OR DURATION LIMITATIONS TO THE TEST. 
          UM, AND OUR WIDE AREA ENERGY ASSESSMENT MODELS KIND OF BEAR THAT OUT. 
          IF YOU LOOK AT, UM, SOME OF THE ASSESSMENTS WE'RE WORKING ON, IT DID LAST YEAR, AND THEY'RE WORKING ON THIS YEAR, UH, WHAT THEY TEND TO SHOW IS, PARTICULARLY DURING THE SUMMER HOURS, THE PROBABILITY OF, UM, UH, LOSS OF LOW TYPE EVENTS OR UNSERVED ENERGY IS FAIRLY LOW, ONE TO TWO HOURS AT BEST. 
          THAT DOESN'T TRANSLATE INTO THE WINTER TIMEFRAME. 
          AND THIS IS WHERE THE DURATION LIMITATIONS COME INTO PLAY, BECAUSE WITHIN OUR MODELS, UH, IF YOU GET TO A CAPACITY DEFICIENCY, UH, ONCE YOU'VE DEPLOYED THOSE ESR RESOURCES AND YOU'VE REACHED THAT LOW STATE OF CHARGE, UH, AND THERE'S NOT SUFFICIENT, UH, EXCESS CAPACITY TO RECHARGE THEM, YOU CAN END UP WITH EXTENDED LOSS OF LOAD EVENTS, UH, UP IN THE 8, 10, 12, 14 HOUR TIMEFRAME. 
          AT LEAST THAT'S WHAT OUR MODELS TEND TO SHOW. 
          UH, LAST THING I WANNA MENTION IS TO, YOU KNOW, THE CHAIRMAN S GLEASON'S, UH, QUESTION ABOUT THE NERC STANDARDS. 
          THERE'S A COUPLE THINGS THAT ARE PERTINENT, UH, TO THE DISCUSSION THAT TEND TO DRIVE SOME OF THE, UH, UH, PROPOSALS THAT ERCOT ISS PUTTING FORWARD. 
          UH, UH, THE FIRST TIME 
          [03:10:01]
IS THE BOW THREE STANDARD, WHICH I MENTIONED. 
          UH, WHAT THAT STANDARD DOES, IT DEFINES WHAT'S CALLED THE RESOURCE LOSS PROTECTION CRITERIA, UH, WHICH IN, IN ERCOT TERMS, THAT'S THE, UH, SIMULTANEOUS LOSS OF TWO NUCLEAR UNITS. 
          AND WHAT THAT STANDARD SAYS IS, IF YOU HAVE THAT TYPE OF EVENT, EV ACROSS THE ENTIRE SPECTRUM, EVEN LOW INERTIA CONDITIONS, YOU HAVE TO HAVE SUFFICIENT, UH, FREQUENCY RESPONSIVE RESERVES OR RESOURCES TO DEPLOY, TO PREVENT REACHING THE FIRST STEP OF UFLS. 
          THAT'S WHAT THAT STANDARD SAYS. 
          UH, THE BOW TWO STANDARD, WHAT WE CALL THE DISTURBANCE CONTROL STANDARD, UH, SETS THE CRITERIA FOR IF YOU HAVE A REPORTABLE BOUNCING CONTINGENCY EVENT, YOU HAVE TO RECOVER FREQUENCY, UH, TO THE PRE DISTURBANCE FREQUENCY WITHIN 15 MINUTES. 
          AND WHATEVER, UH, RESERVES YOU DEPLOY, UH, TO, UH, COUNTERACT THAT FREQUENCY DISTURBANCE, YOU HAVE TO RECOVER THOSE RESERVES WITHIN 90 MINUTES. 
          AND THEN THE LAST ONE IS IN THE BOWEL ONE STANDARD, WHICH IS THE FREQUENCY CONTROL STANDARD. 
          UH, REQUIREMENT NUMBER TWO SETS A PRETTY STRINGENT CRITERIA IN THERE. 
          IT SETS WHAT'S CALLED THE BALANCING AUTHORITY ACE LIMIT, BAAL, AND FOR ERCOT, THAT'S 90 MEGAHERTZ ON EITHER SIDE OF THE 60 HERTZ CENTER VAN. 
          SO, UH, 59.91 ON THE LOW SIDE, 60.09 ON THE HIGH SIDE. 
          AND SO WHAT THAT REQUIREMENT SAYS IS, IF YOU HAVE A FREQUENCY DISTURBANCE THAT GO BELOW, GOES BELOW 59.91, IN THIS CASE, FOUR, YOU HAVE 30 MINUTES TO RECOVER THAT. 
          AND, UH, THERE'S NOT A GET OUTTA JAIL FREE CARD WITH THAT REQUIREMENT. 
          IF YOU'RE IN AN EEA OR OTHER TYPES OF EMERGENCY, YOU STILL HAVE TO COMPLY WITH THAT REQUIREMENT AND GET THE FREQUENCY BACK ABOVE 59.91 WITHIN 30 MINUTES. 
          UH, AND THAT'S KIND OF, AGAIN, THAT'S ONE OF THE OTHER THINGS THAT'S DRIVING, UH, SOME OF THE EEA TRIGGERS. 
          YOU'LL SEE WITHIN THE PROTOCOLS AND OPERATING GUIDES, YOU'LL SEE THAT 59.91 VALUE, UH, SPECIFIED IN THERE, THAT IF WE GO BELOW 59.91 FOR X MINUTES, YOU CAN GO STRAIGHT TO EEA TWO, OR IF IT'S BIOMEDS, GO STRAIGHT TO EEA THREE AND FIRM LOAD CHECK. 
          SO THAT, THAT, THAT'S WHERE THAT STANDARD COMES INTO PLAY. 
          SO, UH, IT, THE NERC STANDARDS DO NOT SPECIFY ANY TYPES OF PRODUCTS, UH, OTHER THAN THE FREQUENCY CONTROL AND FREQUENCY RESPONSE RESERVES. 
          UH, YOU KNOW, THAT'S UP TO ERCOT AND THEIR METHODOLOGY DEFINED, HOW THAT MIX GETS DEFINED TO, UH, FOR NONS SPEND SERVICES TO RECOVER RESERVES, FOR EXAMPLE, OR REGULATION FOR FREQUENCY CONTROL, ET CETERA. 
          THAT'S WHERE THOSE PRODUCTS COME INTO PLAY. 
          THAT'S HOW, AND THAT'S THE INTENT OF HOW THEY MEET THE, MEET THE NU STANDARD. 
          SO, I GUESS TO RE REITERATE WHAT I KIND OF STARTED WITH, UH, WE'RE NOT HERE TO ENDORSE OR ADVOCATE FOR ANY TYPE OF PROPOSAL. 
          IT'S JUST WE FEEL LIKE THE, UH, WE NEED TO BE ABLE TO PUT OUR PERSPECTIVE, OUR INDEPENDENT PERSPECTIVE, UH, IN TO OUT FOR, YOU KNOW, DISCUSSION OF HOW WE SEE THINGS AND THE DYNAMIC RISK OF I THAT ERCOT ISS HAVING TO NAVIGATE, UH, UNTIL SUCH TIME AS WE GET THE, THE TOOLS AND THE PROCESSES IN PLACE TO, UH, AS THE GRID CONTINUES TO EVOLVE, AS NIT HAD DESCRIBED, TO GET DOWN THE ROAD TO WHERE WE WANT TO BE. 
          AND SO THAT CONSERVATIVE APPROACH, I THINK IS DEFINITELY WARRANTED HERE IN THE SHORT TERM. 
          AND IT'S ALL I HAVE, UNLESS Y'ALL HAVE ANY QUESTIONS. 
          THANK YOU, COURTNEY. 
          ONE QUICK QUESTION. 
          UH, YOU JUST SAID, YOU KNOW, THAT WE'RE NAVIGATING, UM, THE ROADS THAT WE'RE GOING DOWN RIGHT NOW, AND I KNOW YOU'RE VERY TEXAS SPECIFIC, BUT DO YOU HAVE ANY, UM, EYES ON THE OTHER RTOS? 'CAUSE I'M NOT SURE MANY PEOPLE IN HERE REALIZE MISO WENT INTO AN EEA TOO, JUST THE BEGINNING OF SEPTEMBER. 
          RIGHT? DO YOU KNOW, COULD YOU COMPARE HOW THEY RUN THEIR SYSTEM TO COMPARE TO ERCOT? 'CAUSE WE'RE NOT JUST, YOU KNOW, IT'S VERY LIKELY TO HAPPEN. 
          IT JUST HAPPENED FOR THEM. 
          I, I, UH, I DO NOT HAVE ANY INSIGHT ON THE LEVEL OF RESERVES AND THINGS THAT MISO CARRIES. 
          SO I, I REALLY CAN'T ANSWER THAT QUESTION FOR YOU. 
          LOOKS LIKE WE HAVE ANOTHER COMMENTER. 
          CAN I? YES. 
          WOODY. 
          THE, THE LEVEL OF, UH, BATTERY PENETRATION IN MISO VERSUS ERCOT, IF YOU THINK OF IT THAT WAY. 
          UM, AN EEA CONDITION IN ERCOT TODAY IS MUCH MORE LIKELY TO GO INTO LOAD, SHE TO SLIDE INTO LOAD SHE, THAN IT WOULD HAVE BEEN FIVE YEARS AGO. 
          AND SO WHEN WE TALK ABOUT EEA AND WE TALK ABOUT THE RESOURCE MIX THAT WE HAVE, I THINK THAT'S AN IMPORTANT CONSIDERATION. 
          WE HEARD ERCOT IS, UH, TRYING TO AVOID EEA CONDITIONS. 
          WELL, THAT'S PART OF THE REASON IS THAT, UH, WHEN YOU HAVE LIMITED DURATION RESOURCES AS PART OF YOUR PRC IN EEA, THOSE ARE GOING AWAY. 
          THEY'RE NOT GONNA BE THERE LONG. 
          AND SO THAT'S, UH, THAT'S ANOTHER, THAT'S SOMETHING TO THINK ABOUT WHEN YOU THINK ABOUT ACCEPTING EEA HOURS. 
          OKAY. 
          WOULD YOU INTRODUCE YOURSELF? YEAH. 
          UH, YES. 
          UH, JOSEPH YOUNGER, I'M THE SENIOR VICE PRESIDENT AND CHIEF OPERATING OFFICER AT TEXAS RE AND, AND LIKE DAVID, I DON'T, I DON'T HAVE ANY PARTICULAR INSIGHTS ON THE AMOUNT OF RESERVES THAT, UH, OTHER RTOS ARE CARRYING. 
          WHAT WE HAVE SEEN, THOUGH, FROM OUR, OUR CONTINENT WIDE PERSPECTIVE IS ONE OF THE THINGS, AND I THINK WE'VE HEARD THIS FROM PRETTY MUCH EVERYONE TODAY, IS ERCOT IS FACING THESE ISSUES FIRST. 
          AND THAT IS VERY CLEAR, AND I THINK, UH, THAT THEY, THE, THE ISSUES THAT ERCOT ISS ADDRESSING THROUGH THESE METHODOLOGIES ARE OCCURRING HERE AT A, A PACE 
          [03:15:01]
AND SCALE RELATIVE TO THE SIZE OF OUR AIR CONNECTION THAT ARE UNIQUE. 
          AND SO, AND THAT'S BEING RECOGNIZED NATIONALLY. 
          I'LL, I'LL JUST OFFER AN EXAMPLE. 
          THE, THE LARGE LOAD STANDARDS THAT FOLKS HAVE TALKED ABOUT AND THE RIDE THROUGH REQUIREMENTS THAT HAVE BEEN APPROVED HERE. 
          WELL, NERC IS JUST BEGINNING THE PROCESS OF, OF DEVELOPING THEIR OWN RIDE THROUGH STANDARDS AND THE STANDARDS AUTHORIZATION REQUEST TO KICK OFF THAT PROCESS. 
          THAT'S ACTUALLY REFERENCING THE NER THE ERCOT STANDARDS THAT WERE DEVELOPED HERE AS A BASELINE FOR THOSE DISCUSSIONS. 
          SO, SO ONE OF THE RISK FACTORS I THINK THAT'S OCCURRING HERE IS THERE, THERE'S REALLY THREE. 
          ONE IS THAT ERCOT IS FACING THESE RISKS. 
          FIRST ERCOT IS FACING THEM AS AN ISLAND, WHICH WE'VE HEARD. 
          AND THEN THE AMOUNT OF, OF RISK, THE AMOUNT OF UNCERTAINTY AND PREDICTABILITY ON THIS, ON THE SYSTEM IS INCREASING. 
          AND SO ALL THAT IS PUSHING YOU TOWARDS A MORE CONSERVATIVE APPROACH. 
          NOW, AS, AS DAVID WAS VERY CLEAR, WE'RE NOT ENDORSING WITHIN THAT A PARTICULAR MARKET SOLUTION OR CONSTRUCT, BUT WHAT THEY ARE POINTING TO IS TO BE CONSERVATIVE IN HOW YOU APPROACH THOSE TYPES OF, OF DECISIONS AS YOU DESIGN THE MARKET. 
          ANY OTHER QUESTIONS OR COMMENTS? THANK YOU, UH, FOR PRESENTING TODAY. 
          UH, HERE'S SOME SORT OF SNIPPETS OF WHAT I HEARD TODAY. 
          I THINK JOHN SWENSEN HIT IT ON THE HEAD. 
          I'LL REITERATE, UM, WHAT THOMAS SAID ABOUT THAT. 
          THIS IS OUR CHALLENGE AS A BOARD. 
          AND EVEN BETH GARZA TALKED ABOUT THAT IF IT'S JUST ABOUT RELIABILITY, IT'S AN EASY DECISION. 
          IF IT'S ABOUT RELIABILITY AT A REASONABLE COST, THAT'S A HARDER DECISION. 
          UH, THE, UH, IMM SAID THAT, UH, YOU KNOW, IT'S, THEY DON'T LIKE THE DIRECTION THAT THIS METHODOLOGY GOES, BUT THEY DID AGREE THAT ERCOT IS MOVING IN THE RIGHT DIRECTION WHEN IT LOOKS AT THE FUTURE YEARS BEYOND 2027. 
          AS FAR AS ANCILLARY SERVICE, UH, METHODOLOGIES, UH, THERE, I THINK WE CAN ALL AGREE THERE IS A COST TO A WATCH IN TERMS OF LACK OF CONFIDENCE AND UNCERTAINTY AMONG 27 MILLION HARDWORKING TEXANS. 
          UM, THERE IS A, UH, I THINK, UH, RE TEXAS RE RAISED AN IMPORTANT POINT ABOUT INERTIA AND HOW INERTIA SEEMS TO BE GETTING THINNER AS WE MOVE, AS AS THE YEARS HAVE ADVANCED. 
          UH, CHAIR GLEASON, I THINK, UM, MADE A GREAT COMMENT THAT WE NEED TO WORK TOGETHER, UH, MORE, UH, COMPREHENSIVELY WITH THE IMM, UH, IN ADVANCE OF THESE CONVERSATIONS IN THE FUTURE. 
          AND I'M HOPING THAT WE CAN ALL DO THAT. 
          SO I WANNA THANK EVERYBODY. 
          BUT NOW IT'S, UH, TIME TO DO WHAT THE LAST, THE PENULTIMATE SENTENCE OF THE TEXAS RE, UH, PRESENTATION SAID, AND THAT IS ERCOT BOARD. 
          AND ULTIMATELY THE PUBLIC UTILITY COMMISSION WILL DECIDE THE APPROPRIATE AMOUNT OF CONSERVATISM WITHIN THIS DYNAMIC RISK ENVIRONMENT, NOT UNDERLYING DYNAMIC YOU KEPT HEARING TODAY, ERCOT THE FIRST, THE FIRST, THE FIRST, YOU KNOW, THE MOST, UH, DYNAMIC NETWORK TO MANAGE. 
          SO WITH THAT, DID BILL, DID YOU HAVE SOMETHING TO SAY? OKAY. 
          YEAH, JUST LIKE, I MEAN, MAKE A COMMENT AS IT RELATES TO THE DISCUSSION. 
          THIS HAS GOTTA BE ONE OF THE BEST ENGAGEMENT DISCUSSIONS I'VE HEARD SINCE I'VE BEEN ON THE BOARD. 
          THE CHALLENGE IS YOU GET THE DISCUSSION THE SAME DAY YOU MAKE THE VOTE. 
          AND SO I WOULD ENCOURAGE TO THE POINT OF GETTING AHEAD OF IT, I THINK THAT FEEDBACK FROM THE STAKEHOLDERS IS CRITICAL AND I WAS APPRECIATE EVERYBODY TAKING THE TIME TO DO THAT. 
          IT'S VERY INSIGHTFUL. 
          I WOULD SUGGEST AS WE GO FORWARD, WE TRY TO GET AHEAD OF THIS AND GET THAT FEEDBACK. 
          AND I REALIZE WE'RE DEALING WITH BOARD SCHEDULES AND EVERYTHING ELSE, BUT I THINK IT'S ABSOLUTELY CRITICAL TO TRY TO GET, LISTEN TO THOSE VOICES AHEAD OF TIME AS OPPOSED TO SIMULTANEOUSLY WITH TAKING THE VOTE. 
          MM-HMM . 
          THE ONLY POINT I WOULD MAKE, GO AHEAD, JOHN. 
          HEY, BILL, IS THAT, THAT'S WHAT TAC IS FOR? I MEAN, I MEAN THAT'S TAC IS, CAITLIN SAID, SPENT HOURS DEBATING THIS. 
          UNDERSTOOD. 
          AND WE RELY ON TAC TO REALLY BE THE FORUM FOR THAT. 
          SO, I DON'T KNOW, I GUESS WHAT I'M ASKING FOR IS COULD TAC AS THEY MAKE THEIR REPORTS AND THEY'RE DOING THEIR STUDIES, PROVIDE MORE OPPORTUNITIES FOR STAKEHOLDERS TO PROVIDE FEEDBACK TO THE BOARD ALONG THE WAY. 
          I'M NOT, DON'T WANNA SPEAK FOR KAITLYN, BUT I'M SURE SHE WOULD SAY THAT THEY PROVIDE LOTS OF OPPORTUNITY. 
          I UNDERSTAND. 
          THAT'S A GOOD POINT. 
          AND UH, AGAIN, WE DID GET A PREVIEW OF THIS METHODOLOGY IN JUNE AT THE JUNE MEETING, BUT YEAH, I BE, YOUR POINT'S WELL TAKEN, BILL. 
          UH, ALRIGHT. 
          UH, MOTION. 
          ANY OTHER DISCUSSION? UH, IF NOT, I'LL ENTERTAIN A MOTION TO RECOMMEND APPROVAL OF THE 2027 ERCOT METHODOLOGIES FOR DETERMINING MINIMUM ANCILLARY SERVICE REQUIREMENTS. 
          [03:20:02]
I'LL MOVE IT. 
          OKAY, JOHN. 
          THANK YOU. 
          KATHLEEN'S A SECOND. 
          ALL IN FAVOR? AYE. 
          ANY OPPOSED? ANY AB STATUTES? OKAY. 
          THE PROPOSED 2027 ERCOT METHODOLOGY FOR DETERMINING MINIMUM ANCILLARY SERVICE REQUIREMENTS. 
          AYES WERE BANKED BY THE, AS RECOMMENDED BY THEIR CALLED STAFF FOR APPROVED. 
          UH, WE CAN DO A COUPLE OF TWO. 
          WE, WE'VE GOT ABOUT 20 MINUTES LEFT AND A GENERAL SESSION BEFORE WE GO TO EXECUTIVE SESSION. 
          WE CAN BREAK AND GO GRAB LUNCH AND CONTINUE GOING, OR WE CAN GO THE NEXT 20 MINUTES AND THEN GO TO EXECUTIVE SESSION. 
          WHAT WOULD Y'ALL LIKE TO DO'S? DO 20 MINUTES BILL. 
          KEEP DRIVING. 
          THAT'S MY PREFERENCE. 
          OKAY, LET'S KEEP DRIVING. 
          NEXT WE'RE GONNA HAVE THE COMMITTEE 
          [19.1.1 Acceptance of 2025 ERCOT 401(k) Savings Plan Audit Report]
REPORTS FOR AGENDA ITEM 19. 
          AGENDA ITEM 19 ONE IS FIRST THE FINANCE AND AUDIT COMMITTEE REPORT, WHICH HAS ONE ASSOCIATED VOTING ITEM. 
          CHRIS RUMMEL, THE CHAIR OF THE FINANCE AND AUDIT COMMITTEE WILL PROVIDE AN UPDATE ON WHAT THE COMMITTEE DISCUSSED YESTERDAY. 
          CHRIS? YEAH. 
          THANK YOU. 
          CHAIRMAN FLORES? YES. 
          I HAVE TWO, TWO THINGS TO DISCUSS. 
          TWO GROUPS OF, UH, ITEMS. FIRST WE DO HAVE A, THE COMMITTEE HAS, UH, AN ITEM TO RECOMMEND FOR BOARD APPROVAL. 
          OUR COMMITTEE MEMBERS RECEIVE REPORTS AND DISCUSS THE RESULTS OF THE 2025, UH, 401K SAVINGS PLAN AUDIT WITH THE SAVINGS PLAN. 
          AUDITOR, UM, COMMITTEE MEMBERS VOTED TO RECOMMEND BOARD ACCEPTANCE OF ERCOT 2025 401K SAVINGS PLAN AUDIT REPORT. 
          THERE WERE NO FINDINGS, A COMPLETELY, UM, CLEAN OPINION, NOTHING INDICATING ANY MATERIAL ISSUES WITH THE ADMINISTRATION OF THE PLAN. 
          SO, UH, ON BEHALF OF THE FINANCE AND AUDIT COMMITTEE, A MOVE THAT THE BOARD ACCEPT THE AUDITED FINANCIAL STATEMENTS OF ERCOT 401K SAVINGS PLAN AS OF DECEMBER 31ST, 2025, AS PRESENTED BY OUR AUDITOR BAKER TILLEY. 
          THANK YOU. 
          CHRIS. 
          IS THERE A SECOND FOR CHRIS? SECOND. 
          OKAY. 
          WHO IS THAT? BILL. 
          OKAY, THANK YOU. 
          ALL IN FAVOR? AYE. 
          AYE. 
          ANY OPPOSED? ANY ABSTENTIONS? COULD THE 401K AUDIT IS APPROVED NEXT. 
          UH, WAS THAT THE END OF YOUR REPORT OR DO YOU HAVE UH, I DO HAVE A COUPLE OF OTHER, OH, OKAY. 
          GO AHEAD. 
          KEEP DRIVING. 
          YEAH, SO JUST FOR, JUST FOR BOARD AWARENESS, UM, SOME ITEMS THAT WERE DISCUSSED, IF I MAY? YES. 
          OH, ALRIGHT. 
          SO COMMITTEE MEMBERS DISCUSSED, UM, OUR SELF-EVALUATION PROCESS. 
          I THINK THIS CAME UP ALSO IN, UH, THE OTHER COMMITTEES. 
          AND SO WE'RE, WE'RE MOVING FORWARD ON THE SAME SCHEDULE. 
          UM, WE ALSO MET WITH OUR FINANCIAL STATEMENT AUDITORS REGARDING THE 2026 AUDIT. 
          KEITH COLLINS PRESENTED TRENDS ON CONGESTION, REVENUE RIGHTS, AND THE COMMITTEE NOTED THAT MARKET PARTICIPATION HAS INCREASED SIGNIFICANTLY YEAR OVER YEAR. 
          UM, AND WE DISCUSSED THE COMPOSITION, UH, THE COMPOSITION OF THE CONGESTION REVENUE RIGHTS ACCOUNT HOLDERS, AND ASKED FOR MORE INFORMATION, UM, REGARDING BENEFITS AND COSTS TO THE ERCOT MARKETPLACE. 
          SO AN ITEM OF GREAT INTEREST. 
          UM, WE ALSO RECEIVED OUR REGULAR REPORTS ON FINANCIAL PERFORMANCE INVESTMENTS, UH, AND DEBT COMPLIANCE AND, UM, SO FORTH. 
          AND I HAVE TO SAY THAT THE, UM, COST CONTROL CONTINUES TO BE STRONG, UH, AS, UH, SEEN IN THE FINANCIAL REPORTS AND ALSO THE, UM, UH, BENEFITS OF, UH, INCREASED INTEREST INCOME SHOWS ON THE STATEMENTS AS WELL. 
          SO WITH THAT, THAT CONCLUDES MY REPORT. 
          OKAY, THANK YOU, CHRIS. 
          ANY QUESTIONS FOR CHRIS ON HIS REPORT? WITH THAT, WE'LL MOVE TO THE TECHNOLOGY 
          [19.2 Technology and Security (T&S) Committee Report]
AND SUBCOMMITTEE REPORT. 
          UH, JOHN SWENSON, UH, WE WILL GIVE US HIS REPORT. 
          THANK YOU VERY MUCH. 
          UM, WE HAD A COUPLE OF DIFFERENT TOPICS IN THE, IN THE COMMITTEE. 
          WE HAD OUR GUEST SPEAKER THIS TIME WAS A COUPLE OF, UH, PHDS FROM SANDIA NATIONAL LABS AND THE, AND THE TOPIC WAS, UH, VOLTAGE AND FREQUENCY RIDE THROUGH IN DATA CENTER ENVIRONMENTS. 
          UM, I WON'T GO THROUGH THE DETAILS, BUT IT WAS A VERY HELPFUL PRESENTATION. 
          I THINK MANY OF YOU HEARD IT. 
          UM, THEY JUST TALKED ABOUT THE KINDS OF THINGS THAT CAN BE DONE NOW AND, AND ARE LIKELY TO BE DONE IN THE FUTURE. 
          THE NET OF IT, I WOULD SAY IS THAT THERE ARE SOME SHORT TERM MITIGATING ACTIONS THAT ARE HELPFUL, BUT THE LONG TERM SOLUTION IS STILL GONNA REQUIRE SOME WORK AND, AND MAY LIKELY REQUIRE A REDESIGN OF HOW ELECTRICITY IS ACTUALLY DISTRIBUTED IN THE DATA CENTER, WHICH IS CLEARLY NOT SOMETHING THAT'S GONNA HAPPEN RIGHT AWAY. 
          UH, WE THEN WENT THROUGH OUR NORMAL PROJECT UPDATE, UM, WITH ABOUT 80, 85 CONCURRENT PROJECTS GOING. 
          UM, WE, WE SORT OF FINALIZED THAT RTC IS NOW COMPLETE FROM A TECHNICAL PROJECT POINT OF VIEW. 
          OBVIOUSLY IT'S NOW IN THE HANDS OF THE OPERATIONS TEAM. 
          UM, AND WHAT WE'VE ASKED THE TEAM TO DO, UH, KEITH IN PARTICULAR IS TO COME BACK AND SORT OF START GIVING US REPORT CARDS ON WHAT THE IMPACT OF RTC FROM A FINANCIAL POINT OF VIEW IS IN THE MARKETPLACE. 
          UM, WE ARE CONTINUING OUR I IDENTITY ACCESS MANAGEMENT MODERNIZATION FOR 
          [03:25:01]
MARKET PARTICIPANTS, AND THAT'S A PROJECT THAT'S GONNA TAKE ANOTHER YEAR OR TWO. 
          UH, WE, WE TOO TOUCHED ON THE CRR AND DAY AHEAD MARKET AUCTIONS, UM, THAT, THAT, UH, THAT, UH, YOU DISCUSSED EARLIER, CHRIS, UM, AND WE'RE, WE LOOKED AT IT FROM MORE OF A TECHNICAL POINT OF VIEW. 
          UM, THE CRR ONE LOOKS LIKE WE CAN SOLVE THE PROBLEM BY PUTTING MORE SPECIALIZED GPU RESOURCE CLOUD GPU RESOURCE ON IT AND BRING IT BACK INTO ACCEPTABLE LIMITS. 
          UM, THE DAY AHEAD MARKET IS NOT AS CLEAR. 
          UM, AND THERE ARE MAYBE SOME MORE WORK THAT NEEDS TO BE DONE LOOKING AT WHY WE'RE SEEING THIS GREAT GROWTH OF DAY AHEAD BIDS AND WHAT CAN BE DONE. 
          UH, IN THE SHORT TERM WE'RE GONNA HAVE TO DO SOMETHING WITH COMPUTE RESOURCE, BUT IT'S NOT CLEAR TO ME THAT COMPUTE RESOURCE IS GONNA SOLVE THIS PROBLEM. 
          UM, AND THEN WE HAD OUR FORWARD LOOKING SESSION WHERE WE TALKED ABOUT WHAT'S, WHAT'S COMING IN, IN THE NEXT COUPLE OF, OF THE MEETINGS. 
          SO THAT CONCLUDES MY REPORT. 
          THANK YOU, JOHN. 
          WE DID OUR, YOU KNOW, SURVEY. 
          OKAY. 
          VERY GOOD. 
          ALRIGHT, UH, NEXT WE'RE GONNA MOVE TO 
          [19.3.1 Ratification of Officer]
TWO ITEMS OF REMAINING ON THE HR AND G REPORT. 
          THAT'S AGENDA ITEM 19.3 0.1, RATIFICATION OF OFFICER, A 19.3 0.2, UH, BOARD, UH, RETENTION PROGRAM. 
          THANK YOU, BILL. 
          UH, AS BILL MENTIONED, WE VOTED ON TWO MATTERS IN ADDITION TO THE, UH, CEO CONTRACT, WHICH WE ADDRESSED EARLIER. 
          I'LL TAKE BOTH THOSE MOTIONS AT THE END OF MY PRESENTATION, UH, THE FIR THE COMMITTEE. 
          FIRST, UH, WELCOME OUR NEW SENIOR VICE PRESIDENT AND CHIEF, UH, PEOPLE OFFICER, UH, MAHESH, CHIEF PERRY, AND, AND THAT WILL BE ONE OF THE VOTING ITEMS WE TAKE UP AT THE END. 
          RATIFY HIS APPOINTMENT. 
          WE ALSO HEARD FROM MARK MINOR ABOUT THE ANNUAL COMMUNICATIONS OVERVIEW. 
          WE FOCUSED ON, UH, THE ERCOT.COM REFRESH, UH, THE SOCIAL MEDIA TRENDS. 
          AND AS PABLO MENTIONED, THE NEW, THE NEW PODCAST THAT, UH, ERCOT IS LAUNCHING. 
          WE ALSO REVIEWED WITH THE LEGAL DEPARTMENT, UH, THE CONFLICT OF INTEREST DISCLOSURES WITH EMPLOYEES, UH, AND THE, THE STEPS THAT, UH, THE LEGAL DEPARTMENT TAKES TO ENSURE THAT POTENTIAL CONFLICTS OF INTEREST DON'T RESULT IN ACTUAL CONFLICT OF INTEREST. 
          WE ALSO, UH, WE ALSO HEARD THAT NO BOARD MEMBERS HAVE ACCUSED THEMSELVES UNDER THE, UH, ON A VOTING ITEM ON THE CONFLICT OF INTEREST ISSUE, BUT THAT WE, UH, HAVE HAD THREE SELECTED DIRECTORS RESIGN OVER THE LAST YEAR AS A RESULT OF OPPORTUNITIES TO SERVE ON OTHER BOARDS. 
          THIS LED TO A DISCUSSION WITH, UH, MERIDIAN COMPENSATION PARTNERS THAT THE BOARD HAVE RETAINED TO LOOK AT, UH, OPTIONS FOR, UH, UH, STEPS WE CAN TAKE TO, UH, RETAIN BOARD MEMBERS. 
          FOLLOWING THE, THE PRESENTATION, THE COMMITTEE VOTED TO RECOMMEND THAT THE BOARD APPROVE THE SELECTED DIRECTOR TERM RETENTION PROGRAM, AND WE ALSO, UH, VOTED TO APPROVE, UH, A MINOR CHANGE IN THE CHAIR'S CONVERSATION. 
          UH, WITH THAT, I'LL TAKE UP THE TWO MOTIONS. 
          THE FIRST MOTION, UH, IS THAT THE BOARD APPROVED THE RATIFICATION OF MAHESH P CHERRY AS SENIOR VICE PRESIDENT AND CHIEF PEOPLE OFFICER, EFFECTIVE JULY 6TH, 2026. 
          SO, DO I HEAR A SECOND ON PEGGY'S MOTION? OKAY. 
          OKAY, KATHLEEN, ALL IN FAVOR? AYE. 
          AYE. 
          ANY OPPOSED? ANY ABSTENTIONS? CONGRATULATIONS. 
          MASH. 
          FINALLY, I, I 
          [19.3.2 Selected Director Term Retention Compensation Program and Board Chair Retainer]
MOVE TO APPROVE THE ERCOT SELECTED DIRECTOR RETENTION COMPENSATION PROGRAM AND BOARD CHAIR RETAINER. 
          DO I HEAR A SECOND OF THIS MOTION? I MAKE A COMMENT? SURE. 
          ALTHOUGH I AGREE WITH THE STRATEGY AND I APPRECIATE THE GESTURE. 
          I, I FIND THAT THE IMPLEMENTATION OF THIS NEW COMPENSATION DOES NOT REALLY AFFECT THE FIVE YEAR EXPERIENCE DIRECTORS. 
          SO I DON'T KNOW IF IT'S GONNA ACCOMPLISH THE DESIRED GOAL AND I'M GIVING THAT FEEDBACK. 
          SO, BUT OVERALL THE STRATEGY MAKES SENSE ON A GO FORWARD BASIS. 
          THANK YOU. 
          ANY OTHER COMMENTS OR QUESTIONS? IS YOUR ISSUE, JULIE QUA A QUANTUM ISSUE OR STRUCTURE ISSUE? IT'S ALL PRORATED GOING FORWARD. 
          THERE'S NO, LOOK BACK TO THE FIVE YEAR EXPERIENCE DIRECTORS, WHICH IS WHAT I THOUGHT IT INTENDED TO RETAIN. 
          I WON'T. 
          THE CHALLENGE IS, DO YOU, IS IT APPROPRIATE TO PASS SOMETHING DOES SORT OF A RETROACTIVE COMPENSATION CHANGE FOR A DIRECTOR? AND THAT'S, THAT'S THE CHALLENGE WE FACED. 
          WELL, 
          [03:30:01]
YES, WE SHOULD ACKNOWLEDGE IT IS NOT RETROACTIVE. 
          OKAY. 
          UH, ANY OTHER COMMENTS, QUESTIONS? DID, DID WE HAVE A SECOND? DID I HAVE A SECOND? OKAY. 
          THANK YOU CHRIS. 
          ALL IN FAVOR? AYE. 
          ANY OPPOSED? UH, SINCE THIS ADJUST THE CHAIR PAY, I'M GONNA ABSTAIN ON THIS ONE. 
          SO. 
          ALRIGHT, UH, THAT IS APPROVED. 
          WITH THAT, UH, WE'LL MOVE ON TO THE, UH, TO AGENDA ITEM 20 OTHER BUSINESS. 
          IS THERE ANY OTHER BUSINESS THAT ANY BOARD MEMBER WISHES TO RAISE IN GENERAL SESSION? OKAY, I DON'T HEAR ANY AT THIS TIME. 
          THE BOARD WILL RECESS GENERAL SESSION, CONVENE AN EXECUTIVE SESSION FOLLOWING EXECUTIVE SESSION. 
          THERE ARE ABOUT THREE VOTING ITEMS THAT ARE ANTICIPATED. 
          SO GENERAL SESSION WILL RECONVENE AT THE CONCLUSION OF THE EXECUTIVE SESSION. 
          THE GENERAL SESSION OF THE ERCOT BOARD OF DIRECTORS MEETING IS NOW RECESSED AND A WEBCAST WILL BE CONCLUDED. 
          YOUR PLEASE THIS MEETING, THE PUBLIC UTILITY COMMISSION OF TEXAS WILL STAND IN RECESS. 
          OKAY. 
          VERY GOOD. 
          UH, HELLO AGAIN. 
          I'M BILL FLORES ERCOT, BOARD CHAIR. 
          I HEREBY RECONVENE THE MEETING OF THE ERCOT BOARD OF DIRECTORS. 
          I'VE CONFIRMED THAT A QUORUM IS PRESENT IN PERSON BEFORE WE MOVE ON TO OTHER BUSINESS. 
          UH, LET'S SAY PUC DOESN'T HAVE A QUORUM, SO WE DON'T NEED TO CALL AN OPEN MEETING THERE. 
          UH, WE HAVE THREE MATTERS. 
          WELL, FIRST OF ALL, BEFORE WE GET, UH, GET INTO THE THREE VOTING ITEMS THAT I HAVE, 
          [19.3.3 Board Action on CEO Agreement (Part 2 of 2)]
I WANT TO, UM, BRING BACK UP ITEM 19.3 0.3, WHICH IS BOARD ACTION ON THE CEO AGREEMENT. 
          UH, JUST TO PROVIDE CLARITY, THE BOARD WILL NOT FINALIZE THE CEO AGREEMENT TODAY. 
          UH, CHAIRMAN GLEASON, IS THERE ANYTHING YOU'D LIKE TO ADD ON THAT SUBJECT REGARDING THE PUC VOTE? THANK YOU, MR. CHAIRMAN. 
          BASED ON THAT, THE PUC WILL DEFER ANY ACTION IN ITS FINAL ORDER ON THIS MATTER AS WELL. 
          OKAY. 
          THANK YOU CHAIRMAN GLEASON. 
          SO WE HAVE THREE VOTING ITEMS, UH, FOR THE BOARD ACTION UNDER OR THREE MATTERS FOR BOARD ACTION 
          [21. Vote on Matters from Executive Session]
ARE AGENDA ITEM 2.1. 
          UH, VOTE ON MATTERS FROM EXECUTIVE SESSION WILL ENTERTAIN A MOTION FOR BOARD APPROVAL OF THE CONTRACT MATTER DISCUSSED DURING EXECUTIVE SESSION UNDER AGENDA ITEM E ES 2.2. 
          MOTION TO APPROVE THE UH, MCKENZIE CONTRACT. 
          OKAY, THANK YOU BILL SECOND FROM KATHLEEN. 
          ALL IN FAVOR? AYE. 
          AYE. 
          ANY OPPOSED? ANY ABSTENTIONS? OKAY. 
          THAT CONTRACT MATTER HAS BEEN APPROVED. 
          NEXT, I'LL ENTERTAIN A MOTION FOR BOARD APPROVAL OF THE TWO LITIGATION MATTERS DISCUSSED DURING EXECUTIVE SESSION ON AGENDA ITEM ES 2.5 0.1 AND EES 2.2. 
          SO MOVED. 
          THANK YOU. 
          PEGGY. 
          IS THERE A SECOND? SECOND. 
          OKAY. 
          WE GOT JULIE AND BENJAMIN. 
          UH, ALL IN FAVOR? AYE. 
          AYE. 
          ANY OPPOSED? ANY ABSTENTIONS? OKAY. 
          THE, THOSE MATTERS ARE APPROVED. 
          AND THEN 
          [21.1 Selection of 2026 ERCOT 401(k) Savings Plan Auditor]
LASTLY, I'LL NOW ENTERTAIN A MOTION TO APPROVE THE SELECTION OF BAKER TILLY US AS KOTS AUDITOR FOR THE 401K SAVINGS PLAN FOR THE CALENDAR YEAR ENDED DECEMBER 31ST, 2026. 
          SO MOVED. 
          THANK YOU. 
          CHRIS. 
          DO I HAVE A SECOND? SECOND. 
          OKAY. 
          KATHLEEN, PEGGY, ALL IN FAVOR? AYE. 
          AYE. 
          ANY OPPOSED? ANY ABSTENTIONS? OKAY. 
          BAKER TILLEY IS APPROVED. 
          WANT TO THANK EVERYONE FOR YOUR PARTICIPATION TODAY. 
          THIS MEETING OF THE BOARD OF DIRECTORS IS NOW ADJOURNED AND THE WEBCAST HAS BEEN CONCLUDED.
* 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.