WEBVTT

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This meeting of the Public Utility Commission will

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come to order to consider matters that have been duly

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posted with the Secretary of State of Texas for August

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23, 2021.

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We will now take up and consider docket number 52321,

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application of the Electric Reliability Council of

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Texas inc for a debt obligation under PURA Chapter

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39 Subchapter M, and request for a good cause exception.

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At this time, let me recognize, I'm joined by Commissioner

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Lori Cobos and Commissioner Jimmy Glottfelty. And

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at this time I'll hand the proceeding over to Judge.

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Hunter Burkhalter. Judge? Good morning, Commissioners.

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And I call to order docket number 52321 is a hearing

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being held on March 23, 2021, and it's being presided

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over by the Commission with my assistance. Commissioners,

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we held a pre hearing conference this morning. We took

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appearances at the pre hearing conference, but I'm

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going to take appearances again just to help you

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familiarize with who the parties are and who are the

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faces associated with the party. So let's do that.

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Let's start with ERCOT, please. Good morning, Commissioners.

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Your honor. Ronn Moss and Elliott Clark for ERCOT.

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We also have Chad Ceiling, who's the General Counsel

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of ERCOT and Juliana Morehead, who is the Assistant.

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General Counsel of ERCOT with us today. Great,

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thank you. TIEC?

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Thank you, your honor. Katie Coleman for TIEC, and with me today are Michael.

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Macmillan and John Ross Hubbard.

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Just Energy and associated companies. Good morning

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your honor. Katherine Webb-King here for Just Energy.

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NRG Energy inc. Good morning, your honor, Andrea Stover,

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and with me is Christina Rollins, Patrick Leahy, and Landon Will

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on behalf of NRG.

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City of Garland?

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Good morning your honor. Reed Barnes on behalf of the

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city of Garland. And Mr Barnes, you're also appearing on behalf

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of the city of Denton, City of Georgetown, the city of Lubbock.

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Correct? That's correct. Thank you. Has anyone

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from DC Energy Texas appeared? All right. How

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about City of Austin, DBA Austin Energy? Good morning, your honor.

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Thomas Mercado appearing on behalf of the city of Austin,

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with (indistinct) for Austin.

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Coalition of competitive reps?

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I think that's Mr Huerta who must have stepped out

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for a, there he is right there.

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Mr huerta, you're just in time. You want to make an

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appearance. Miguel Huerta, on behalf of the Coalition of Competative Reps.

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Thank you. Lower Colorado River Authority and LCRA.

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WSC Energy. Good morning, Lee Sebastian and Emily.

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Jolly on behalf of LCRA.

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Avid Grid Renewable. Is anyone here from them? Excelon.

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Energy? Sorry, Excelon Generation Company. Good morning

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your honor, Megan Griffiths on behalf of Excelon and.

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Constellation new energy. Anyone here from Shell?

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Gexa Energy LP. Good morning your honor, Tracey Davis

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on behalf of Gexa Energy.

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Energy Training Institute?

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City of Denton. We already covered Denton. Okay BP.

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Energy company?

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EDF Energy services LLC. Good morning Commissioners, your

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honor. James Guy on behalf of BDS Energy services. Citigroup?

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Texas retail energy?

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Luminant?

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Good morning, your honor Commissioners. Bill Moore on

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behalf of Luminant Energy. I'm joined by Melissa

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Gilbert. Tanaska Power Services and associated companies?

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Good morning, your honor Commissioners. Barton Ford

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and Tim Mueller on behalf of the Tamaska Power services

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company. Thank you. Is anyone here from Advanced Power.

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Alliance?

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Golden Spread Electric Co op? Thank you. Your Honor. Morning.

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Commissioners. Todd Kimbrough, representing Gold Spread.

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TexBo Power. Good morning again, James Guy on

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of TexBo Power. Anyone here from Saracen.

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Energy West?

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TerraForm Power Operating? Carrie Collier Brown and

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Matt Art for TerraForm. Thank you. And you're also

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appearing on behalf of NL Trading North America.

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Yes, your honor. Thank you. Calpine Corporation? Morning

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your honor. Good morning Commissioners. Chris Reader

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and joined by my firm colleague Miguel Suazo for Calpine.

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Corporation and also Diana Woodman Hammet who is an

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attorney with Calpine. Thank you. Rayburn Country Electric.

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Co op?

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Good morning Commissioners, your honor. Emma Hand, Justin.

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Mirrorball, and Grace Dixon on behalf of Rayburn Country.

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Electric Co op. East Texas Electric Co op? Good morning

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your honors, Commissioner, Jacob Lawler for East Texas.

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Electric Cooperative. Office of Public utility Council?

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Good morning, your honor, Commissioners, Adam Goodland

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with the Office of public utility counsel.

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NG resources and NG Energy marketing. Good

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morning, your honor Stephen Mack for NG. South Texas.

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Electric co op? Good morning Carlos Carrasco and Jennifer.

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Littlefield for STEC.

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Morgan Stanley Capital Group. Anyone here?

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Lightal Inc?

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RWE Renewable Americas? Morning, Stephanie Sparks for RWE.

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Renewables.

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Texas Treasury Safe Safekeeping Trust Company? Morning

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Whitney Blanton and Mike Rice. You can call me after

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Texas Treasury Safety and Trust. AEP Energy Partners?

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And Commission staff? Floyd Walker and Eleanor D'Ambrosio

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on behalf of Commission staff. Welcome to you all.

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Is there anybody who's shown up who I have not identified?

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As I mentioned earlier, Commission, we held a pre-

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hearing conference. We have admitted all of the exhibits.

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You should have all the exhibits in front of you. We've

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sworn in all the witnesses, unless you have any questions,

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we're ready to proceed to opening statements. Jude, just as

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a protocol adopted on the outset. If we could build

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in break times for both the transcription and the audience.

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Just as a matter of course. Absolutely. My plan, my

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thought, and whatever is your pleasure. My thought

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is we would take a midmorning break, a lunch break, and

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I know that we have to take at least one break at

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three in the afternoon each day so the court reporters

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can switch out folks. But please don't

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be shy about we can take a break anytime the need arises.

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As long as you've got a plan I good. Alright, opening

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statements. ERCOT, would you like to make an opening statement?

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Yes, your honor. Thank you. Good morning Commissioners.

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My name is Ron Moss and along with my colleague Elliott

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Clark, we represent ERCOT. As I told you earlier, we

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also have Chad Seely, the general counsel and Julianne.

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Moorehead, the assistant general counsel, here with

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us today. That's because this is an important case

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for ERCOT and for the market as a whole. And we appreciate

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the Commission setting aside the time to hear this

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case. As you know, during the 87th regular session,

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the legislature passed and the Governor signed, House Bill.

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Bill 4492 which directed ERCOT to expeditiously

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file two separate applications or debt obligation orders

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that would allow us to finance amounts.

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And those amounts of course are associated with the

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winter storm event. Now we are seeking Commission approval

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in this case of a debt obligation under Subchapter.

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M of PURA Chapter 39. Tomorrow we're going to present

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our case for Subchapter N under Chapter 39 for

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our, avoid confusing ourselves, we refer to sometimes

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as the Main docket and the Nebraska docket. So if you

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hear us saying that it's not because we'd rather be

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somewhere else because those are the ways that we are

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referring to these two cases. In this main docket,

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ERCOT is seeking Commission approval to secure $800 million

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of default balanced financing for the Texas Comptroller.

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Now the proceeds of that financing will be used to

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pay the market participants who were short paid for

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the energy and ancillary services they provided during

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what we call the period of emergency. Those proceeds

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will also allow ERCOT to replenish the congestion revenue

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rights funds that ERCOT used shortly after the winter

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storm to pay those short paid market participants. Paying

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the money to the short paid market participants will

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instill confidence in the market and will preserve

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the integrity of market, and it will also inject much needed

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liquidity. No party in this case opposes their ERCOTs

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request for a debt obligation order. In fact, most

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affirmatively support it. There are, however, a couple

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of contested issues and I want to give you ERCOTs

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perspective on those briefly. The first issue is the

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priority in which the proceeds of the $800 million

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of debt of default balanced financing should

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be used. ERCOT has proposed that the 1st $50 million or so.

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It's not exact. But for about $50 million dollars be reserved to pay off ERCOTs

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existing debt if that becomes necessary. And I'll talk

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about that more in just a moment and there's gonna

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be some other costs associated with implementing the

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debt obligation order. Those would be reserved as well.

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ERCOT's second priority is to pay approximately $243

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million dollars to the short paid market participants

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who were short paid by the competitive wholesale market

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participants who left the market to the words, the mainly

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retail electric providers who have defaulted and been

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terminated as market participants and then the remaining

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proceeds would be used to replenish the congestion

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revenue right accounts. Now, some of the parties don't

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agree with ERCOTs priority. Some propose that the.

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Commission require ERCOT to first pay the wholesale

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market participants that were short paid. Others want

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the Commission to require ERCOT to prioritize the replenishment

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of the congestion revenue rights funds. But the priority

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that ERCOT is proposing is not just a matter of our

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own preference. And let me explain why, what the, what

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the other parties may not have understood at the time

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they filed their testimony and their statements of

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position is that ERCOT has existing debt covenants

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that do not allow it to issue more debt without the

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consent of its lenders. And so if ERCOT or the special

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purpose entity that we are proposing to create as part

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of this case were to issue more debt without that consent,

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we could be in default of our existing debt instruments.

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So if ERCOT cannot reserve that 1st $50 million dollars

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to pay off its existing debt, then it just can't borrow

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the $800 million dollars at all. Now to be clear, we're

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going to ask the lenders to allow us to borrow this

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money. And if we get consent, then that solves that

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problem, this $50 million dollars will then be used to

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replenish the congestion revenue rights auction proceeds.

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But if we don't get that money that, if we don't, I'm sorry

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if we don't get that consent, then we can't borrow

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the money. It's that simple. It's a prerequisite to

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us borrowing the money. And by the way, we won't

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be in a position to ask for that consent until the

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closing of the debt facility in the Nebraska docket.

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And that's why we can't just go ask for it now. And

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I don't know that, I can't explain the details of that

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to you. But I'm sure Mr Taylor, our chief financial

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officer, can when he's up here. ERCOT's second priority

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for the proceeds is to pay the remaining $243 million

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dollars that is owed to the market. The market participants

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who were short paid by the competitive wholesale market

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participants for the period of emergency. These market

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participants have already waited approximately six

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months for payment. And if market participants don't

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know when they will be paid or even if they will be

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paid, we believe it undermines confidence in the market.

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That's why we have put this as our second priority.

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Our third priority, although this is very important,

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our third priority is the replenishment of the congestion

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revenue rights auction funds that ERCOT used shortly

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after the winter storm to pay these short hold market

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participants. These funds need to be replenished so

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that we can eventually pay out these conjectures and

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revenue right funds to market participants who are

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entitled to those. The other major issue from ERCOTs

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perspective is to Tanaska's request that ERCOT require

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load serving entities and resource entities to be ultimately

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responsible for paying the default charges that we're

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going to be assessing rather than imposing that burden

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on qualified scheduling (indistinct). Now, as you probably

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know, ERCOT financially interacts only with qualified

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scheduling entities. Some people refer to as QSEs

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and congestion revenue rights account holders. ERCOT

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does not financially interact with load serving entities

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and it does not financially interact with resource

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entities. If the Commission were to require ERCOT

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to hold the load serving entities responsible for

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these default charges, I mean, directly responsible,

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we go and we charge them directly or we kick

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them out of the market when they don't pay, ERCOT

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would have to develop new billing processes and new

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software to do that because that's not what we're set

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up to do right now. We would also need to collect collateral

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from the load resource, the load serving entities and

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the resource entities, which we don't currently do.

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And if ERCOT has to change its normal settlement and

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billing processes that could lead to a delay in the

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financing of this and it could lead to higher costs.

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And again, our witnesses will be here to answer your

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questions about those things. If you have some. From.

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ERCOT's perspective, there's simply no need to treat

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the default charges any differently from all of the

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other charges that ERCOT now assesses to market

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participants and we believe that qualified scheduling

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entities have tools at their disposal if they're concerned

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about defaults by their own load serving entities or

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resource entities. So it's unclear why ERCOT should

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have to change its process or incur some higher costs

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for that.

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ERCOT has presented written direct rebuttal testimony

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on these two issues and our witnesses will be here

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this morning to present, to answer any questions the.

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Commissioners might have about these or other issues.

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We also intend to address this in post hearing briefing.

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Our witnesses today will be Sean Taylor who is our.

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ERCOT's Vice President, Chief Financial Officer, and Mr Kenan.

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Ogelman, who is ERCOT's Vice President of commercial.

00:16:24.519 --> 00:16:27.846
Operations. We're also going to bring to you Charles.

00:16:27.870 --> 00:16:31.216
Atkins, who's a financial advisor for ERCOT, he's

00:16:31.240 --> 00:16:34.176
a senior adviser to Credit Suites as well. Mr Atkins

00:16:34.200 --> 00:16:36.546
has been involved in a number of securitizations over

00:16:36.570 --> 00:16:39.559
his career, including several before this Commission.

00:16:40.139 --> 00:16:43.855
In this case, he has counseled ERCOT about the best

00:16:43.879 --> 00:16:46.775
way to structure the debt financing to achieve the

00:16:46.799 --> 00:16:50.186
lowest financing costs. As the Commission knows this

00:16:50.210 --> 00:16:52.576
proceeding and the Nebraska proceeding, we're gonna

00:16:52.600 --> 00:16:55.596
be talking about tomorrow are the first ISO securitizations

00:16:55.620 --> 00:16:58.446
to ever occur as far as we know. So writing on a

00:16:58.470 --> 00:17:02.466
blank slate here to something to some extent. Finally.

00:17:02.490 --> 00:17:05.886
ERCOT has been working diligently with the comptroller

00:17:05.910 --> 00:17:08.646
on indicative terms that will help achieve the lowest

00:17:08.670 --> 00:17:12.676
financing costs. We have Mike Reisig who is the CEO

00:17:12.700 --> 00:17:15.805
of a Texas, Treasury Safety and Trust Company here

00:17:15.829 --> 00:17:19.785
today to answer any questions from you. Again, we appreciate

00:17:19.809 --> 00:17:22.549
the time that you have set aside to hear this case.

00:17:22.940 --> 00:17:26.206
We request approval of that obligation order allows.

00:17:26.230 --> 00:17:29.936
ERCOT to pay default balanced financing in the

00:17:29.960 --> 00:17:34.216
amount of $800 million. Thank you.

00:17:34.240 --> 00:17:38.775
Thank you. Commissioners, we worked out of order by which

00:17:38.799 --> 00:17:40.575
the parties are going to appear so I'm just gonna go

00:17:40.599 --> 00:17:43.696
down that list and let me know if you wish to make

00:17:43.720 --> 00:17:46.616
an opening statement. Calpine?

00:17:46.640 --> 00:17:48.386
I do your honor. Should I just go over there? Yes,

00:17:48.410 --> 00:17:51.785
please. If you're inclined to make an opening statement

00:17:51.809 --> 00:17:55.349
work your way forward to one of the microphones.

00:18:05.940 --> 00:18:09.035
Thank you your honor. Thank you Commissioners. Chris.

00:18:09.059 --> 00:18:12.686
Reader again on behalf of Calpine, joined with my colleagues

00:18:12.710 --> 00:18:16.745
as well today, very grateful for this opportunity to

00:18:16.769 --> 00:18:20.255
submit evidence, to submit our views to you. We feel

00:18:20.279 --> 00:18:23.226
like this proceeding and the one for tomorrow are

00:18:23.250 --> 00:18:28.535
very critical in the overall context of moving forward

00:18:28.559 --> 00:18:31.995
from the winter storm, restoring confidence, restoring

00:18:32.019 --> 00:18:37.416
liquidity in our markets and helping customers. I think

00:18:37.440 --> 00:18:40.706
most of you have at least some familiarity with Calpine.

00:18:40.730 --> 00:18:45.186
We're very happy to be able to participate in Commission

00:18:45.210 --> 00:18:49.876
proceedings such as this. Calpine is a generator, a

00:18:49.900 --> 00:18:53.075
longtime generator in the Texas market, currently operating

00:18:53.099 --> 00:18:57.886
and owning 12 generation facilities, and employing over

00:18:57.910 --> 00:19:02.545
1000 personnel throughout those facilities. And is

00:19:02.569 --> 00:19:05.206
also active as qualifying scheduling entity as the

00:19:05.230 --> 00:19:09.406
power marketer. Calpine's history in the Texas

00:19:09.430 --> 00:19:12.956
market as active in the generation side dates back

00:19:12.980 --> 00:19:15.976
to the 1990s with the initial development of

00:19:16.000 --> 00:19:19.406
cogeneration facilities and has expanded since then.

00:19:19.430 --> 00:19:23.686
Calpine has in the ensuing years established

00:19:23.710 --> 00:19:29.436
a substantial retail market presence and has two

00:19:29.460 --> 00:19:32.876
principal load serving entities, retail electric providers,

00:19:32.900 --> 00:19:37.849
that together serve almost over 168,000 customers.

00:19:38.240 --> 00:19:43.535
So Calpine's interest and it's stake in our industry

00:19:43.559 --> 00:19:48.285
is expansive and covers just about all facets of the

00:19:48.309 --> 00:19:53.085
operation of our Texas electric industry. And to that

00:19:53.109 --> 00:19:57.075
end, it's been very important that we feel like

00:19:57.099 --> 00:20:00.815
to protect not only that interest but to also advance

00:20:00.839 --> 00:20:05.476
the interest and the stake of customers coming

00:20:05.500 --> 00:20:09.166
out of the storm. And also in dealing with kind of

00:20:09.190 --> 00:20:12.325
the restructuring if you will of our electic markets

00:20:12.349 --> 00:20:16.386
and our system to advocate if you will kind of on their

00:20:16.410 --> 00:20:20.676
behalf. And so our principal recommendation, our

00:20:20.700 --> 00:20:23.085
overarching policy recommendations both here and in

00:20:23.109 --> 00:20:26.825
the next docket is that the Commission should look

00:20:26.849 --> 00:20:30.995
first to prioritize what will be of the most benefit

00:20:31.019 --> 00:20:34.106
to customers. And in particular those customers

00:20:34.130 --> 00:20:38.295
who directly bore at least the financial brunt of the

00:20:38.319 --> 00:20:42.436
storm and the resulting conditions on

00:20:42.460 --> 00:20:45.075
the electric system. We feel like that's something

00:20:45.099 --> 00:20:47.815
that the Commission again should look first to in

00:20:47.839 --> 00:20:51.176
making decisions about the structuring of the debt

00:20:51.200 --> 00:20:55.146
obligation orders and charges and so forth. And so

00:20:55.170 --> 00:20:59.726
to that end we've advanced testimony, we have with

00:20:59.750 --> 00:21:03.295
us today and in the next case, Steve Schlemmer,

00:21:03.319 --> 00:21:07.176
excuse me, who is the Senior Vice President of Government

00:21:07.200 --> 00:21:09.936
and Regulatory Affairs for Calpine, who's been with

00:21:09.960 --> 00:21:13.906
the company since 2006. And he again has submitted

00:21:13.930 --> 00:21:18.485
testimony here today. We feel like for purposes

00:21:18.509 --> 00:21:22.626
of the what Mr Moss is calling the main docket that

00:21:22.650 --> 00:21:26.396
advancing the interests of customers is best accomplished

00:21:26.420 --> 00:21:31.505
through adopting ERCOTs recommendations and approving

00:21:31.529 --> 00:21:35.436
its its application. Mr Schlemmer's testimony talks about

00:21:35.460 --> 00:21:38.759
some key concerns that we have and how we feel like

00:21:39.140 --> 00:21:42.926
those advance the interests of customers as well as

00:21:42.950 --> 00:21:47.956
most effectively mitigating damage to our markets

00:21:47.980 --> 00:21:51.670
and balancing those interests and making them work together.

00:21:52.140 --> 00:21:57.505
Throughout the hearing we also are going to advance

00:21:57.529 --> 00:22:00.156
the recommendation to you in particular that ERCOT's

00:22:00.180 --> 00:22:05.575
view about the allocation of the bond proceeds is most

00:22:05.599 --> 00:22:09.305
reasonably balanced through ERCOT's proposal, which

00:22:09.329 --> 00:22:14.005
we feel like strikes a good balance between getting

00:22:14.029 --> 00:22:17.896
some immediate relief to short paid market participants.

00:22:17.920 --> 00:22:21.966
So something that has an immediate impact and addresses

00:22:21.990 --> 00:22:25.366
not only investor confidence as Mr Moss pointed out

00:22:25.390 --> 00:22:29.456
but also addresses liquidity issues as well, which

00:22:29.480 --> 00:22:32.315
is something that ERCOT's rebuttal testimony has focused

00:22:32.339 --> 00:22:36.636
on. And as I say, it reasonably balances between

00:22:36.660 --> 00:22:40.426
that concern as well as replenishing the balance in

00:22:40.450 --> 00:22:43.356
the CRR auction receipts. We feel like this

00:22:43.380 --> 00:22:47.960
most reasonably implements House Bill 4492's

00:22:48.339 --> 00:22:53.606
statements and requirements that the financing

00:22:53.630 --> 00:22:57.966
be one that speaks to and accomplishes both of these

00:22:57.990 --> 00:23:01.255
objectives. We are going to have some questions at

00:23:01.279 --> 00:23:05.245
the appropriate time concerning the specifics by which

00:23:05.269 --> 00:23:09.126
ERCOT would propose to allocate proceeds to short

00:23:09.150 --> 00:23:13.166
pay entities, just want to get some clarity about

00:23:13.190 --> 00:23:16.545
exactly how that would be distributed. So my colleague,

00:23:16.569 --> 00:23:20.835
Mr Suazo, will be here to to ask some of those. Otherwise

00:23:20.859 --> 00:23:23.706
like yourselves will be listening to the testimony

00:23:23.730 --> 00:23:28.045
and we'll be presenting our views on those issues

00:23:28.069 --> 00:23:30.946
and perhaps others as they develop during our briefing.

00:23:30.970 --> 00:23:34.245
So again, we're very grateful for the opportunity

00:23:34.269 --> 00:23:37.785
to be here. We're very thankful for your attention

00:23:37.809 --> 00:23:41.245
to these critically important matters and and look

00:23:41.269 --> 00:23:46.196
to see you soon. Thank you Mr. Guy on behalf of

00:23:46.220 --> 00:23:48.926
EDF, do you wish to make an opening statement. Good morning, your honor. Thanks

00:23:48.950 --> 00:23:51.626
for the opportunity to make an opening statement.

00:23:51.650 --> 00:23:54.686
EDF will reserve it's time for questioning witnesses. Thank

00:23:54.710 --> 00:23:59.565
you. NL? Your honor, no opening statement this

00:23:59.589 --> 00:24:04.476
time from NL. Thank you. Excelon? No opening statement.

00:24:04.500 --> 00:24:08.289
Your honor. Thank you. Luminant? Thank you your honor.

00:24:09.339 --> 00:24:13.216


00:24:13.240 --> 00:24:17.476
Good morning, your honor. Commissioners. Bill Moore for

00:24:17.500 --> 00:24:20.156
Luminant Energy. I won't use it much of your time.

00:24:20.180 --> 00:24:23.876
I just want to express our appreciation for the work

00:24:23.900 --> 00:24:27.099
that you're doing, these cases are are really important.

00:24:27.259 --> 00:24:31.595
They're really about providing relief to folks. The

00:24:31.619 --> 00:24:35.235
companies that were impacted by the storm. They're

00:24:35.259 --> 00:24:39.485
requiring you, I know to dive into a lot of testimony

00:24:39.509 --> 00:24:42.815
a lot of arguments in a short period of time. It's

00:24:42.839 --> 00:24:46.656
not easy. So we just want to say very much appreciate

00:24:46.680 --> 00:24:49.545
the work that you're doing. We appreciate the expedited

00:24:49.569 --> 00:24:52.356
way in what you're doing it. Thank you for the opportunity

00:24:52.380 --> 00:24:54.815
to make an opening statement.

00:24:54.839 --> 00:25:01.116
Thank you. Mr Gore. NRG?

00:25:01.140 --> 00:25:03.245
Good morning, your honor and Commissioners.

00:25:03.269 --> 00:25:06.490
Thank you so much. Andrea Stober on behalf of NRG

00:25:07.000 --> 00:25:10.765
NRG appreciates the opportunity to participate in

00:25:10.789 --> 00:25:14.376
the hearing and provide you with our perspective as

00:25:14.400 --> 00:25:18.956
I think Mr reader and Mr Moore from Calpine and Luminant

00:25:18.980 --> 00:25:21.575
indicated, we also think this is a very important case

00:25:21.599 --> 00:25:24.000
and we appreciate all the work that ERCOT has done

00:25:24.089 --> 00:25:26.095
and all the work that the Commission has to do to process

00:25:26.119 --> 00:25:30.335
these applications. You may be aware, but NRG

00:25:30.359 --> 00:25:34.366
has power generation facilities as well as retail electric

00:25:34.390 --> 00:25:36.595
providers representing millions of customers across

00:25:36.619 --> 00:25:42.450
the state of Texasm and we you know

00:25:42.539 --> 00:25:45.505
have a lot of confidence in the state of the market

00:25:45.529 --> 00:25:48.025
but these processes will help continue to make sure

00:25:48.049 --> 00:25:52.686
that our market can operate as it has in the past

00:25:52.710 --> 00:25:57.345
and serve customers on an ongoing basis. We believe

00:25:57.369 --> 00:25:59.696
that ERCOTs application along with the clarifications

00:25:59.720 --> 00:26:03.075
that's provided and rebuttal provide a basis for

00:26:03.099 --> 00:26:05.876
the Commission to be able to issue a debt obligation

00:26:05.900 --> 00:26:09.525
order that is in the public interest. With me here

00:26:09.549 --> 00:26:12.995
today is um Mr Bill Barnes, who is the senior director

00:26:13.019 --> 00:26:16.835
of regulatory affairs. Provided testimony in this case.

00:26:16.859 --> 00:26:19.856
Our understanding is that there aren't parties

00:26:19.880 --> 00:26:22.206
that have any cross examination questions for him,

00:26:22.230 --> 00:26:24.815
but he's available to you should you have any questions

00:26:24.839 --> 00:26:28.049
as the preceding goes along and thank you again.

00:26:30.039 --> 00:26:35.416
Thank you. Rayburn Country?

00:26:35.440 --> 00:26:37.706
Your honor. We have no opening statement. We will reserve

00:26:37.730 --> 00:26:42.416
our time. Thank you. Tanaska?

00:26:42.440 --> 00:26:50.440


00:26:55.339 --> 00:26:58.075
Good morning again, everyone, my name is Martin Ford,

00:26:58.099 --> 00:27:01.269
I'm here representing TanaskaPower Services Company.

00:27:01.740 --> 00:27:06.156
And during the appearances in the pre hearing conference

00:27:06.180 --> 00:27:09.575
I made a point that Tanaska Power services company

00:27:09.599 --> 00:27:13.359
is not the whole of Tanaska. Many of you know that

00:27:14.039 --> 00:27:16.345
Tanaska does a lot of things that the ERCOT market.

00:27:16.369 --> 00:27:20.035
We've been here a very long time and we develop power

00:27:20.059 --> 00:27:23.116
plants. But I'm here today to talk about a subject

00:27:23.140 --> 00:27:25.095
that hasn't been talked about enough and maybe it wasn't

00:27:25.119 --> 00:27:27.166
talked about enough during the legislative session

00:27:27.190 --> 00:27:30.450
and that is the role of qualified service entities,

00:27:31.140 --> 00:27:36.196
scheduling entities, excuse me. And in particular the role of

00:27:36.220 --> 00:27:39.255
those WSCs that are independents, meaning that they

00:27:39.279 --> 00:27:45.335
primarily represent loads and generators that do not

00:27:45.359 --> 00:27:50.065
have in-house QSEs. Many of the large generators

00:27:50.089 --> 00:27:53.476
and large loads have their own QSEs. Some choose to go

00:27:53.500 --> 00:27:55.755
with the third party and Tanaska is one of those third

00:27:55.779 --> 00:27:59.515
parties. So in addition to doing everything that Tanaska

00:27:59.539 --> 00:28:02.805
does generally TanaskaPower Services Company

00:28:02.829 --> 00:28:06.295
which is headquartered in Texas as an independent QSC

00:28:06.319 --> 00:28:12.275
business. Just to round out the affiliation connection

00:28:12.299 --> 00:28:15.126
which will be maybe more relevant tomorrow than today

00:28:15.150 --> 00:28:18.396
but just to give you the full picture TPS

00:28:18.420 --> 00:28:20.995
and I'll try to refer to Tanaska Power Sources

00:28:21.019 --> 00:28:25.966
Company as TPS, just for clarity. TPS's ultimate parent

00:28:25.990 --> 00:28:30.269
owns equity interests in three power plants in ERCOT.

00:28:30.740 --> 00:28:32.866
Two of those equity interest, these are plants that

00:28:32.890 --> 00:28:35.065
have been around a long time. Two of those equity interests

00:28:35.089 --> 00:28:38.515
are sort of in the ballpark about 50% with other investors

00:28:38.539 --> 00:28:42.976
in there and one is is much less than 50%. So when

00:28:43.000 --> 00:28:45.696
you get to affiliation issues, keep in mind that there

00:28:45.720 --> 00:28:49.245
are QSCs out there and LSEs cause Tanaska does

00:28:49.269 --> 00:28:53.085
that as well, who have these sort of watered down affiliations

00:28:53.109 --> 00:28:56.216
with generators.

00:28:59.039 --> 00:29:02.630
The business model for the independent QSC business

00:29:02.660 --> 00:29:09.025
is that we perform a highly technical service, both

00:29:09.049 --> 00:29:12.906
in terms of operations or in terms of scheduling, not

00:29:12.930 --> 00:29:16.095
the physical operations, but we work on scheduling

00:29:16.119 --> 00:29:19.525
generation and load. We represent, I think almost

00:29:19.549 --> 00:29:23.116
maybe up to 100 generating units from people who choose

00:29:23.140 --> 00:29:26.856
to use an independent, we do the scheduling for that.

00:29:26.880 --> 00:29:30.606
It requires a lot of investment and infrastructure, it requires

00:29:30.630 --> 00:29:33.515
a lot of training and that's why some parties choose

00:29:33.539 --> 00:29:35.656
to let an independent do it because they prefer to

00:29:35.680 --> 00:29:39.626
spend their brain power

00:29:39.650 --> 00:29:42.406
and their investment on their business rather than

00:29:42.430 --> 00:29:45.545
this highly technical interface that is between the

00:29:45.569 --> 00:29:50.755
loads and generators. On the one hand, and ERCOT on

00:29:50.779 --> 00:29:53.595
the other hand. So we do that is both the scheduling

00:29:53.619 --> 00:29:57.795
and also the financial transactions. We have loads

00:29:57.819 --> 00:30:01.896
we have lots of generators, we settle financially with

00:30:01.920 --> 00:30:04.646
them and then we settle on a net basis financially

00:30:04.670 --> 00:30:08.085
with ERCOT. So if the generators in a particular

00:30:08.109 --> 00:30:12.896
period are entitled 50 million and the loads are paying

00:30:12.920 --> 00:30:16.585
20 million, then from ERCOTs perspective they just

00:30:16.609 --> 00:30:20.166
see a net 30 million and that's how we settle

00:30:20.190 --> 00:30:25.505
on a net basis. One thing I want to say, I'm

00:30:25.529 --> 00:30:27.785
not quite at the outset, but I'll say it close to the

00:30:27.809 --> 00:30:33.025
outset is my mission this morning is to show you

00:30:33.049 --> 00:30:36.835
just how cooperative Tanaska Power services wants

00:30:36.859 --> 00:30:40.059
to be in helping for the securitization to go forward.

00:30:40.740 --> 00:30:45.946
We agree, we agree quite a bit with what ERCOT has

00:30:45.970 --> 00:30:50.325
said in its testimony, we agree that ERCOT is not

00:30:50.349 --> 00:30:54.376
in a position to do the billing and collection of the

00:30:54.400 --> 00:30:59.196
default charges for this docket, the 21 docket, and they're

00:30:59.220 --> 00:31:01.775
not in a position to do the billing and collection

00:31:01.799 --> 00:31:05.759
of the upload charges in the 52322 docket.

00:31:06.140 --> 00:31:09.075
So we are ready willing and able to do that. That's

00:31:09.099 --> 00:31:12.515
what we're set up to do. It is very similar to what

00:31:12.539 --> 00:31:16.356
we already do in settling ERCOTs charges in the market.

00:31:16.380 --> 00:31:19.579
So it's not exactly the same. There are some differences

00:31:20.039 --> 00:31:23.616
but it's very similar and it makes complete sense for

00:31:23.640 --> 00:31:28.525
the QSEs Including independent QSEs to be the parties

00:31:28.549 --> 00:31:34.416
that interfaces with loads and the generators and handles

00:31:34.440 --> 00:31:38.356
the assessment of the default charges and handles

00:31:38.380 --> 00:31:40.916
the money going back and forth. And no doubt about

00:31:40.940 --> 00:31:43.305
that. It may be theoretically possible for ERCOT to

00:31:43.329 --> 00:31:48.416
do it but it makes no sense whatever. So our only

00:31:48.440 --> 00:31:50.755
point about and we think we can do, we think we can

00:31:50.779 --> 00:31:53.825
do a fine job of that. As far as I know, we

00:31:53.849 --> 00:31:56.126
performed flawlessly during the winter event, all of

00:31:56.150 --> 00:31:58.245
our scheduling, all the money going back and forth

00:31:58.269 --> 00:32:02.045
that was a tremendous burden on everyone in the market.

00:32:02.069 --> 00:32:04.606
Performing all of their functions including on the QSEs.

00:32:04.630 --> 00:32:08.755
Had no idea that in return for the modest monthly

00:32:08.779 --> 00:32:12.656
fee that we were going to get involved in handling

00:32:12.680 --> 00:32:15.585
billions of dollars over a few days going back and

00:32:15.609 --> 00:32:19.315
forth and doing this settlement. And it was quite quite

00:32:19.339 --> 00:32:21.960
a strain as it was on everyone in the market. But

00:32:22.440 --> 00:32:25.295
you know this is a service business, we're not out

00:32:25.319 --> 00:32:27.956
there wheeling and dealing and managing for our own

00:32:27.980 --> 00:32:32.335
account and we want to provide that service here. The

00:32:32.359 --> 00:32:34.936
problem that we have is this, we don't think that what

00:32:34.960 --> 00:32:39.769
ERCOT has proposed complies with the statute.

00:32:40.539 --> 00:32:45.555
In the case of the default charges in Subchapter N

00:32:45.579 --> 00:32:49.845
what the statute says is that the those charges must

00:32:49.869 --> 00:32:54.626
be allocated to all market participants. And I don't

00:32:54.650 --> 00:33:00.216
think that anyone's intent in the legislature was

00:33:00.240 --> 00:33:03.325
that 100% of the default charges would be allocated

00:33:03.349 --> 00:33:06.059
to a service provider playing the middle man role.

00:33:06.740 --> 00:33:10.356
I think it was pretty clear that the intent was in

00:33:10.380 --> 00:33:13.025
the actual words say that it's all market participants

00:33:13.049 --> 00:33:17.966
Meaning, it would be the generators and the loads separately

00:33:17.990 --> 00:33:21.136
charges payable by congestion revenue rights participants

00:33:21.160 --> 00:33:23.716
which are not involved in the QSC issue. But there

00:33:23.740 --> 00:33:25.930
is a third category of people who pay the charges.

00:33:26.539 --> 00:33:33.216
So our understanding is that while it is the best practical

00:33:33.240 --> 00:33:36.345
solution for the QSEs to play the role that

00:33:36.369 --> 00:33:40.916
they play, that it's not, it doesn't comply with the

00:33:40.940 --> 00:33:46.235
statute that ERCOT assess the charges to all market

00:33:46.259 --> 00:33:50.025
participants and it creates an unreasonable risk to

00:33:50.049 --> 00:33:54.305
the middle man to have all of that liability which

00:33:54.329 --> 00:33:57.245
we're talking about, just to do a back of the envelope

00:33:57.269 --> 00:34:00.775
we're talking about $800 million worth of bonds, interest

00:34:00.799 --> 00:34:03.216
on top of that. And you look at the market share of

00:34:03.240 --> 00:34:07.956
a company like like Tanaska. If it were Tps if it continues

00:34:07.980 --> 00:34:12.059
its probably easily $100 million over 30 years.

00:34:12.440 --> 00:34:15.695
So we don't you know we are uncomfortable with having

00:34:15.719 --> 00:34:21.285
that liability rested upon us as a QSE. And as important,

00:34:21.309 --> 00:34:23.486
it simply doesn't comply with the requirement of the

00:34:23.510 --> 00:34:28.460
statute that ERCOT assess this on all market participants.

00:34:29.139 --> 00:34:33.006
And in the case of the N docket, it's a very

00:34:33.030 --> 00:34:36.666
similar issue. There says that ERCOT will assess to

00:34:36.690 --> 00:34:41.026
load serving entities and a QSC, as QSC is not a load

00:34:41.050 --> 00:34:45.865
serving entity. We do have one or two loads serving

00:34:45.889 --> 00:34:49.666
entities that are affiliated behind the QSC where we

00:34:49.690 --> 00:34:52.436
have a large industrial customers are market really

00:34:52.460 --> 00:34:56.285
mostly deal with large industrial customers and generators.

00:34:56.309 --> 00:34:59.805
So we do happen to have an affiliate that is in LSE

00:34:59.829 --> 00:35:02.635
but the statute says that the assessment must be to

00:35:02.659 --> 00:35:06.006
LSEs And so we think that it simply doesn't

00:35:06.030 --> 00:35:10.566
comply with the statue. We have suggested

00:35:10.590 --> 00:35:13.526
I mentioned that our goal is to show how cooperative

00:35:13.550 --> 00:35:17.006
we can be. This is a problem that should be fixable.

00:35:17.030 --> 00:35:20.405
And we suggested in our statement of position that

00:35:20.429 --> 00:35:24.055
the way to fix it is to ask the QSEs

00:35:24.079 --> 00:35:28.086
to act in a function as collection agents or administrative

00:35:28.110 --> 00:35:32.535
agent for ERCOT. And in fact ERCOT itself as is clear

00:35:32.559 --> 00:35:36.046
in Mr Atkins testimony is itself a collection agent.

00:35:36.070 --> 00:35:39.095
The party that's entitled to receive the money is the

00:35:39.119 --> 00:35:44.035
party that owns owns this property. This right to receive

00:35:44.059 --> 00:35:46.465
the money is actually the special purpose issue of

00:35:46.489 --> 00:35:49.865
bonds. And it's clear from the Atkins testimony. And

00:35:49.889 --> 00:35:54.539
I think Mr Ogelman's testimony itself that ERCOT

00:35:54.630 --> 00:35:57.865
itself is merely acting as a servicer or collection

00:35:57.889 --> 00:36:01.316
agents. So we said we will do that,

00:36:01.340 --> 00:36:04.606
make us a collection agent. We'll do, we will determine

00:36:04.630 --> 00:36:08.666
the assessment, how much it is, we will collect that and

00:36:08.690 --> 00:36:11.340
if for some reason will not be able to collect that,

00:36:11.829 --> 00:36:17.055
then your remedy is not that the QSE might over $100

00:36:17.079 --> 00:36:21.365
million dollars over time, but rather that the market

00:36:21.389 --> 00:36:24.495
participants who has defaulted will be excluded from

00:36:24.519 --> 00:36:27.425
participating in ERCOT until they fix

00:36:27.449 --> 00:36:30.976
this and which is we think a sufficient remedy to

00:36:31.000 --> 00:36:33.460
make sure that people don't default and we're not expecting,

00:36:33.829 --> 00:36:37.655
we're not expecting defaults. We had

00:36:37.679 --> 00:36:39.816
some discussion with ERCOT about that. They're

00:36:39.840 --> 00:36:44.006
with ERCOT's counsel about that in a phone call and

00:36:44.030 --> 00:36:46.126
they weren't comfortable with that. We suggested a

00:36:46.150 --> 00:36:49.925
different solution which we haven't completed, completed

00:36:49.949 --> 00:36:52.106
the discussion on and so hopefully one of those two

00:36:52.130 --> 00:36:55.896
solutions will we'll work here. But again, we're here

00:36:55.920 --> 00:37:00.646
to try to fix the problem and I'm confident

00:37:00.670 --> 00:37:04.506
that we'll be able to do that. And I guess that's

00:37:04.530 --> 00:37:11.745
what I wanted to say. We really, we think that

00:37:11.769 --> 00:37:15.486
solving this problem should not be, should not require

00:37:15.510 --> 00:37:17.445
a lot of attention of the Commission, that should be

00:37:17.469 --> 00:37:20.595
one of the user problems to solve, some of the allocation

00:37:20.619 --> 00:37:23.325
issues and ending issues, et cetera, and try to get

00:37:23.349 --> 00:37:26.905
this fixed as soon as possible.

00:37:26.929 --> 00:37:32.276
Thank you. TexBo. TexBo Power LC? No opening statements.

00:37:32.300 --> 00:37:37.606
Your honor. Thank you. TIEC? No thank you, your honor. Thank you. LCRA. No opening

00:37:37.630 --> 00:37:45.506
statement. E-Tech statement? No opening statement, your honor. Thank you.

00:37:45.530 --> 00:37:48.666
I guess that's Golden Spread.
Yes, your honor, just a

00:37:48.690 --> 00:37:56.690
very brief statement.

00:37:57.829 --> 00:38:01.345
Morning, Commissioners. As I introduced myself earlier

00:38:01.369 --> 00:38:03.436
I'm Todd Kimbrough and I'm here representing Golden

00:38:03.460 --> 00:38:07.256
Spread this morning. Golden Spread, like I think most

00:38:07.280 --> 00:38:09.476
of the rooms supports the securitization of the full

00:38:09.500 --> 00:38:14.595
$800 million dollars permitted under Subchapter M.

00:38:14.619 --> 00:38:19.449
We agree mostly with what ERCOT is proposing,

00:38:19.820 --> 00:38:23.606
but Golden Spread does ask as the allocation of the proceeds

00:38:23.630 --> 00:38:26.365
is done, thattwo fundamental principles be kept in

00:38:26.389 --> 00:38:30.146
mind. First that it recognize that co ops, communities,

00:38:30.170 --> 00:38:32.916
and for profit entities all participated in the wholesale

00:38:32.940 --> 00:38:35.416
market and are all dealing with the fallout of the

00:38:35.440 --> 00:38:39.079
storm. And then secondly, that as a matter of policy

00:38:39.139 --> 00:38:41.686
the Commission should not differentiate one wholesale

00:38:41.710 --> 00:38:45.316
market participant from another. As Mr Moss indicated

00:38:45.340 --> 00:38:48.385
earlier with the allocation plan that's sitting in

00:38:48.409 --> 00:38:54.436
your application, the intent is to address the short

00:38:54.460 --> 00:38:56.796
pay. That was really attributable to the competitive

00:38:56.820 --> 00:39:00.115
reps. It doesn't address the other portions of the

00:39:00.139 --> 00:39:03.956
market. Now for purposes of of implementation Golden

00:39:03.980 --> 00:39:07.995
Spread offered a solution. Just moving the full

00:39:08.019 --> 00:39:11.340
$800 million dollars to replenish the CRR accounts.

00:39:11.820 --> 00:39:15.376
But we also recognize that's not the only viable solution

00:39:15.400 --> 00:39:18.736
with those two criteria that I just talked about.

00:39:18.760 --> 00:39:21.785
For instance we could in theory keep the allocations

00:39:21.809 --> 00:39:24.885
proposed by ERCOT but instead of defining it so that

00:39:24.909 --> 00:39:28.095
it only attributes or matches to those terminated rep

00:39:28.119 --> 00:39:31.115
entities, it could be prorated across the wholesale

00:39:31.139 --> 00:39:34.396
default generally. That is viable. There are a multitude

00:39:34.420 --> 00:39:39.465
of other solutions that are of that sort. I'd like

00:39:39.489 --> 00:39:41.856
to use this statement just very briefly again to just

00:39:41.880 --> 00:39:45.296
emphasize, we want the success of this $800 million securitization.

00:39:45.320 --> 00:39:53.256
It's good for the market. It's good for our generators. Golden Spread got short paid too. But we do ask

00:39:53.280 --> 00:39:56.526
that the Commission implement and apply the proceeds

00:39:56.550 --> 00:39:59.345
in a way that does not distinguish one flavor of market

00:39:59.369 --> 00:40:03.336
participants from another. Thank you.
Thank you. South

00:40:03.360 --> 00:40:07.530
Texas Electric CoOp? No opening statment. City of austin?

00:40:07.800 --> 00:40:12.626
No opening statement. The city of Lubbock? No opening statement.

00:40:12.650 --> 00:40:18.385
City of Seguin?

00:40:18.409 --> 00:40:22.226
OPUC? No opening statement, your honor. All right

00:40:22.250 --> 00:40:24.736
before I turned the Commission staff, is there any

00:40:24.760 --> 00:40:26.916
other party I haven't identified who wishes to make

00:40:26.940 --> 00:40:29.486
an open statement.

00:40:29.510 --> 00:40:33.325
Okay, thank you, Commission staff.
Brief opening, your honor.

00:40:33.349 --> 00:40:35.285


00:40:35.309 --> 00:40:38.476
Floyd Walker with Elenaor Diambrosia on behalf of Commission

00:40:38.500 --> 00:40:41.595
staff. I just want to note that the Commission

00:40:41.619 --> 00:40:44.245
had lots of options in how to issue a debt financing

00:40:44.269 --> 00:40:46.546
order. But the one guiding principle should be the

00:40:46.570 --> 00:40:49.836
integrity of the entire wholesale market. That's bigger

00:40:49.860 --> 00:40:52.206
than one market participant, bigger than a class of

00:40:52.230 --> 00:40:56.035
market participants. And we believe that ERCOT's proposal is

00:40:56.059 --> 00:41:02.086
a reasonable way to do that. Thank you.

00:41:02.110 --> 00:41:04.486
Thank you.

00:41:04.510 --> 00:41:07.546
Commissioners, we're ready to go to witness examination

00:41:07.570 --> 00:41:12.166
if you are.
Please do.
Okay, ERCOT, please proceed

00:41:12.190 --> 00:41:16.075
At this time., we're going to call Sean Taylor, who's

00:41:16.099 --> 00:41:20.170
the Chief Financial Officer and Kenan Ogelman who is

00:41:20.199 --> 00:41:25.396
the Vice President of Commercial Operations with the

00:41:25.420 --> 00:41:27.986
Judge's kind permission, we have asked them to come up

00:41:28.010 --> 00:41:30.965
with our panel because there's no clear demarcation

00:41:30.989 --> 00:41:35.436
between their, between how this affected each of their

00:41:35.460 --> 00:41:38.046
responsibilities. And we think it will be easier for

00:41:38.070 --> 00:41:41.646
you if, and and easier if we're going to understand

00:41:41.670 --> 00:41:44.546
what they're talking about, if they can refer questions

00:41:44.570 --> 00:41:47.486
to each other and the parties have agreed to that,

00:41:47.510 --> 00:41:50.956
so we're going to bring up Mr Ogelman and Mr Taylor

00:41:50.980 --> 00:41:52.986
right now.

00:41:53.010 --> 00:41:55.869
And we have two seats set aside right there for you

00:41:56.019 --> 00:42:00.675
side by side there.

00:42:00.699 --> 00:42:03.376
All witnesses have already been sworn in. You are sworn

00:42:03.400 --> 00:42:05.075
in.

00:42:05.099 --> 00:42:11.675


00:42:11.699 --> 00:42:14.635
Mr Ogelman? Would you state your name for the

00:42:14.659 --> 00:42:18.925
record, please?
Kenan Ogelman.
What is your position at ERCOT?

00:42:18.949 --> 00:42:23.010
Vice president of Commercial Operations.
All right.

00:42:23.039 --> 00:42:25.119
Mr Taylor, would you state your name for the record?

00:42:25.900 --> 00:42:29.365
Sean Taylor.
What is your position that ERCOT?

00:42:29.389 --> 00:42:32.236
Vice President and Chief Financial Officer.
Do you have

00:42:32.260 --> 00:42:35.865
in front of you your direct rebuttal testimony, Mr

00:42:35.889 --> 00:42:39.606
Taylor?
Yes.
Mr Ogelman ? Do you have in front of you

00:42:39.630 --> 00:42:44.106
your directed rebuttal testimony?
Yes.
At this time, your honor,

00:42:44.130 --> 00:42:48.916
we tender Mr Ogelman and Mr Taylor for cross examination.

00:42:48.940 --> 00:42:51.476
Thank you.

00:42:51.500 --> 00:42:54.135
All right. I'm just gonna go down the list and if you've

00:42:54.159 --> 00:42:58.219
got a cross examination just come on up. Calpine.

00:43:14.900 --> 00:43:17.119
And would you state your name please, sir? I'm sorry.

00:43:17.599 --> 00:43:20.405
Yes. Good morning, your honor and Commissioners.

00:43:20.429 --> 00:43:23.626
My name is Miguel Suazo. And with Hush Blackwell and

00:43:23.650 --> 00:43:31.276
we're here today on behalf of Calpine.

00:43:31.300 --> 00:43:34.736
And my first set of questions are intended for Mr Ogelman

00:43:34.760 --> 00:43:39.276
I'm saying that correctly?
Yes.

00:43:39.300 --> 00:43:42.796
Do you recall ERCOTs responses to the Lower Colorado

00:43:42.820 --> 00:43:47.075
River Authority's 2nd set of RFIs?

00:43:47.099 --> 00:43:51.465
I generally do.
Okay and that's fine. Do you recall

00:43:51.489 --> 00:43:55.896
preparing the RFIs to their questions?
Yes.

00:43:55.920 --> 00:44:01.635
Okay. So I want to talk to you briefly about LCRA 2-1,

00:44:01.659 --> 00:44:06.055
that you did help prepare. And that was related

00:44:06.079 --> 00:44:10.416
to a question from Austin Energy's 1-1. Which states that QSEs

00:44:10.440 --> 00:44:13.905
or CR account holder that was short paid

00:44:13.929 --> 00:44:17.066
at any time for activity that occurred during the period

00:44:17.090 --> 00:44:19.980
of emergency or receive a prorated share of those funds

00:44:20.489 --> 00:44:24.276
and what I'm particularly interested in are the last

00:44:24.300 --> 00:44:27.526
two sentences which I can read to you from that because

00:44:27.550 --> 00:44:29.936
I want to clarify something for the record that was

00:44:29.960 --> 00:44:33.865
a bit confusing to me and to my client. The last two

00:44:33.889 --> 00:44:36.365
lines of that RFI say that the payments will be

00:44:36.389 --> 00:44:40.526
allocated to each eligible market participant on applicable

00:44:40.550 --> 00:44:44.995
invoice dates on a pro rata basis. A market participants

00:44:45.019 --> 00:44:47.465
pro rata share will be calculated by dividing the

00:44:47.489 --> 00:44:50.575
short paid amount still owed to the market participants

00:44:50.599 --> 00:44:53.086
for the invoice by the total short paid amount owed

00:44:53.110 --> 00:44:57.006
to all market participants for the invoice date.

00:44:57.030 --> 00:44:59.736
Your honor.
If he's gonna read from our response, can we

00:44:59.760 --> 00:45:00.090
ask

00:45:00.230 --> 00:45:02.856
the witness be allowed to see the response he's reading

00:45:02.880 --> 00:45:08.605
from?
That's fair.
And I have I have that

00:45:08.629 --> 00:45:12.706
to share with you if it helps you.

00:45:12.730 --> 00:45:16.026
Do you have a copy for me as well?
I don't, I

00:45:16.050 --> 00:45:21.405
thought there was multiple copies.

00:45:51.230 --> 00:45:56.605
You need some time?
Go ahead. Okay. So I'd

00:45:56.629 --> 00:45:59.465
like to clarify the denominator value proposed by your

00:45:59.489 --> 00:46:02.749
formula and I just have to short questions about that.

00:46:03.730 --> 00:46:06.486
Will the total short paid value exclude short paid

00:46:06.510 --> 00:46:10.796
amounts owed to Rayburn and Brazos? Or will the value

00:46:10.820 --> 00:46:14.225
be calculated based on the total percentages, including

00:46:14.249 --> 00:46:21.966
Rayburn and Brazos?
If Rayburn is Brazos owe, are

00:46:21.990 --> 00:46:27.736
owed monies, it's possible that they have resources

00:46:27.760 --> 00:46:32.085
that did operate during the storm. They would get a

00:46:32.109 --> 00:46:38.736
credit against the amount they owe ERCOT. That is

00:46:38.760 --> 00:46:42.516
the way we expect that to play out.
Okay, that's

00:46:42.540 --> 00:46:47.505
helpful. Thank you. So one follow up there with respect

00:46:47.529 --> 00:46:50.945
to the financing proceed disbursements. Will they be

00:46:50.969 --> 00:46:54.395
made sequentially, meaning the pro rata share of the

00:46:54.419 --> 00:46:58.826
market participants owed amount by invoice date or

00:46:58.850 --> 00:47:02.175
will the invoice dates be combined and the payments

00:47:02.199 --> 00:47:07.106
made pro rata?

00:47:07.130 --> 00:47:09.515
So I need to think through that question, one more

00:47:09.539 --> 00:47:12.285
time, would you ask that again?
And maybe I can rephrase it better just

00:47:12.309 --> 00:47:15.015
because it's it is kind of hard to hit your arms wrapped

00:47:15.039 --> 00:47:18.975
around. With respect to the financing proceed disbursements

00:47:18.999 --> 00:47:21.705
that are made thereafter, are they going to be

00:47:21.729 --> 00:47:25.450
made sequentially, mean by date that they were incurred,

00:47:25.729 --> 00:47:28.849
meaning the pro rata share of the MP's owed amount by

00:47:28.930 --> 00:47:32.165
by the invoice date? Or will the invoice dates be

00:47:32.189 --> 00:47:35.550
combined and the payments will then be made pro rata,

00:47:35.930 --> 00:47:40.246
essentially all together?
My recollection of that

00:47:40.270 --> 00:47:46.505
is our proposal is to do it by invoice date.

00:47:46.529 --> 00:47:48.866
Thank you. I think that's really helpful. That's just

00:47:48.890 --> 00:47:51.475
one of the questions we had as we're reading through

00:47:51.499 --> 00:47:57.626
your direct and rebuttal. And my second set of questions

00:47:57.650 --> 00:47:59.896
are for you, Mr taylor. But since you all are in a

00:47:59.920 --> 00:48:03.066
panel and you can clarify for the record, I think

00:48:03.090 --> 00:48:07.985
that'd be helpful. So I would like to clarify the sequence

00:48:08.009 --> 00:48:12.806
of payments and the amounts that you propose.

00:48:12.830 --> 00:48:15.445
I wasn't able to follow the way you've laid out as

00:48:15.469 --> 00:48:19.026
clearly as I would have liked. So I wanna start with

00:48:19.050 --> 00:48:22.316
first you say that the Commission should pay down

00:48:22.340 --> 00:48:26.376
the costs of the debt obligation, is that correct?
Yes,

00:48:26.400 --> 00:48:31.605
that's to the point that was raised (indistinct) testimony?

00:48:31.629 --> 00:48:34.626
And that's because if you did not do that, then

00:48:34.650 --> 00:48:39.825
ERCOT would be in default on its obligations?
Correct, (indistinct).

00:48:39.849 --> 00:48:43.566
Okay. So then second you say that the Commission should

00:48:43.590 --> 00:48:47.740
improve payments to short paid MPs? Is that right?

00:48:49.129 --> 00:48:55.050
The second is the short payments by market participants.

00:48:56.029 --> 00:49:00.366
Okay. And you preserve that because it's ERCOT's

00:49:00.390 --> 00:49:03.366
position that that more greatly preserves the integrity

00:49:03.390 --> 00:49:08.376
of the market and restores liquidity? More so

00:49:08.400 --> 00:49:11.306
than replenishing the CRRs.

00:49:11.330 --> 00:49:15.126
More so than fully replenishing the CRRs.

00:49:15.150 --> 00:49:18.345
And is it your testimony that the total competitive default

00:49:18.369 --> 00:49:21.536
short pay amount, in other words, excluding the amounts

00:49:21.560 --> 00:49:25.676
of Brazos and Rayburn is 419 million?
For the period

00:49:25.700 --> 00:49:30.005
of emergency, 419 million.
Okay.

00:49:30.029 --> 00:49:32.595
And the amount that you propose be paid to short

00:49:32.619 --> 00:49:36.145
paid market participants is 243 million. Do I have

00:49:36.169 --> 00:49:41.496
that right, correct? (indistinct) Okay. And that's a change

00:49:41.520 --> 00:49:44.556
from your direct testimony where you propose 318 million

00:49:44.580 --> 00:49:48.195
be paid to short paid MPs. Is that right?
That is correct.

00:49:48.219 --> 00:49:54.155
Okay. And the 243 because there was 176 million that

00:49:54.179 --> 00:49:57.965
was already paid to the short paid MPs. That was

00:49:57.989 --> 00:50:00.356
because it was already paid to the shortbread MPs

00:50:00.380 --> 00:50:05.205
from the CRRs, right?
Correct.
Okay.

00:50:05.229 --> 00:50:09.515
So the 418 million is attributable to

00:50:09.539 --> 00:50:13.015
non Brazos and non Rayburn short pay defaults,

00:50:13.039 --> 00:50:17.606
is that right?
419 million, yes.
Okay.

00:50:17.630 --> 00:50:22.265
So 176 million paid to the MPs previously from the

00:50:22.289 --> 00:50:26.325
CRRs, that needs to be reimbursed to the CRR fund,

00:50:26.349 --> 00:50:30.126
is that correct?
Correct.
Ok. And then after that, there's

00:50:30.150 --> 00:50:33.496
600 million that ERCOT previously tapped from the

00:50:33.520 --> 00:50:39.005
CCRs to cover their short paid amounts?

00:50:39.029 --> 00:50:42.345
Let me make sure I understand what you're saying.

00:50:42.369 --> 00:50:46.955
So we originally tapped, to use your terminology, 100 million dollars.

00:50:46.979 --> 00:50:48.905


00:50:48.929 --> 00:50:54.705
We've applied $25 million 225 invoice due date. So if I

00:50:54.729 --> 00:51:00.859
look at the map on page 18 of my rebuttal testimony at table

00:51:00.989 --> 00:51:05.376
ST-2, I believe this is what you're referring to.
Yes, sir.

00:51:05.400 --> 00:51:10.015
Okay and so then yes when you consider that 200

00:51:10.039 --> 00:51:12.489
million that was not attributed to Rayburn or Brazos, then we

00:51:13.099 --> 00:51:17.366
end up with the result of 600 is the difference between

00:51:17.390 --> 00:51:20.296
the 800 million and the 200 million? Is that your question?

00:51:20.320 --> 00:51:23.496
Yes. And then just to follow up on that that was from

00:51:23.520 --> 00:51:27.005
the tapping of the CRRs, that account to

00:51:27.029 --> 00:51:31.270
cover those short paid amounts?
Correct. We used

00:51:31.359 --> 00:51:34.250
100 million to cover short paid amounts temporarily.

00:51:34.830 --> 00:51:38.039
200 million of that we're attributing in this calculation

00:51:39.330 --> 00:51:42.965
to the competitive wholesale market participants. And 600 million

00:51:42.989 --> 00:51:46.515
were attributed to Brazos.
Okay that was my next question.

00:51:46.539 --> 00:51:50.655
The bulk of that is attributable to Brazos.

00:51:50.679 --> 00:51:53.575
And then one last question on this component because

00:51:53.599 --> 00:51:57.335
I think now we have a good sense of how

00:51:57.359 --> 00:51:59.965
these are all allocated. The financing will take care

00:51:59.989 --> 00:52:03.385
of some of that and that will be approximately 331

00:52:03.409 --> 00:52:06.669
million. Is that right?
That amount's to be determined.

00:52:06.820 --> 00:52:10.505
Okay. How will that be determined?
Depends on the amounts

00:52:10.529 --> 00:52:12.626
that are necessary to implement the debt obligation

00:52:12.650 --> 00:52:15.926
order including the potential repayment, whatever that

00:52:15.950 --> 00:52:20.835
total amount is plus the 419 would be the amount that

00:52:20.859 --> 00:52:24.585
we've take, we contribute to those two components.

00:52:24.609 --> 00:52:27.595
Those two amount from the 800 million remain themselves

00:52:27.619 --> 00:52:29.705
in the remainder that I believe is the amount that

00:52:29.729 --> 00:52:33.515
you're referencing as 300 or so million.
That's right. Okay, no,

00:52:33.539 --> 00:52:38.416
that's helpful. One thing I wanted to ask you and

00:52:38.440 --> 00:52:40.255
I guess I'm not sure which one of you is the best

00:52:40.279 --> 00:52:42.476
since you appear a panel. I did intend to ask

00:52:42.500 --> 00:52:46.335
you, Mr Taylor, so I'll give you first crack at it.

00:52:46.359 --> 00:52:49.376
Did you have the chance to read Golden Spread's statement

00:52:49.400 --> 00:52:53.570
of position in the docket?
I don't recall, I'm sure I did.

00:52:53.810 --> 00:53:01.205
Okay. Do you recall generally,

00:53:01.229 --> 00:53:03.655
just generally their position is that they prioritize

00:53:03.679 --> 00:53:11.679
paying crr revenue rights before mps?

00:53:13.529 --> 00:53:15.455
If that's what they said. If that's what you're

00:53:15.479 --> 00:53:20.275
saying.
Okay, do you know if any congestion revenue

00:53:20.299 --> 00:53:23.176
rights holders have actually been harmed as a result

00:53:23.200 --> 00:53:28.306
of the crr fund balance being tapped?

00:53:28.330 --> 00:53:32.036
As a result of the CRR funds being tapped. We

00:53:32.060 --> 00:53:34.306
have not

00:53:34.330 --> 00:53:37.756
we have had enough money in the CRR funds to pay

00:53:37.780 --> 00:53:42.186
them out as they become due, is that your question?

00:53:42.210 --> 00:53:45.306
Yes. So essentially CRR payment obligations have

00:53:45.330 --> 00:53:50.506
been met to your knowledge?
To date,Yes.
Okay. And

00:53:50.530 --> 00:53:53.325
is that because the CRRs, they get replenished essentially

00:53:53.349 --> 00:53:57.705
on a rolling basis. Correct? There's a couple of components

00:53:57.729 --> 00:54:00.995
to that so we do continue to receive crr monies in

00:54:01.019 --> 00:54:05.506
and ERCOT may (indistinct) the balance of those amounts.

00:54:05.530 --> 00:54:07.806
So when we get those moneys in assuming that we get

00:54:07.830 --> 00:54:10.796
enough money in, more money than we are paying out,

00:54:10.820 --> 00:54:13.786
yes it would roll as you're describing. That situation

00:54:13.810 --> 00:54:15.955
does not exist, that's when we end up with a shortage

00:54:15.979 --> 00:54:19.556
situation.
So the CRR holders at least have the

00:54:19.580 --> 00:54:22.450
opportunity to get paid because of how

00:54:22.930 --> 00:54:27.365
that market works. But the mps are essentially still

00:54:27.389 --> 00:54:30.989
waiting to get paid in perpetuity until this is decided?

00:54:31.219 --> 00:54:33.455
I would say it's only working that way at this moment

00:54:33.479 --> 00:54:38.365
in time. We're still under are required liquidity level

00:54:38.389 --> 00:54:42.266
for the CRR account holders money. So that CRR

00:54:42.290 --> 00:54:45.416
balance is lower than what is required by our standards

00:54:45.440 --> 00:54:48.469
from a liquidity perspective.
And what is the required balance?

00:54:48.849 --> 00:54:51.849
Six months of repayment.
Six months of repayment. Okay.

00:54:54.729 --> 00:54:57.276
So if we were to stop receiving, to say another way,

00:54:57.300 --> 00:54:59.235
if we were to stop receiving the new auction monies

00:54:59.259 --> 00:55:05.205
in, in less than six months CRR will not be being paid.

00:55:05.229 --> 00:55:09.325
That's helpful clarification. My client appreciates

00:55:09.349 --> 00:55:12.605
your time here today. No further questions. Commissioners

00:55:12.629 --> 00:55:18.965
and your honor.
Thank you. Let's see. EDF?
No questions, your honor.

00:55:18.989 --> 00:55:24.149
Thank you. NL? 
No questions your honor.
Excelon?

00:55:24.629 --> 00:55:28.036
No questions, your honor. Luminant?
No questions, your honor.

00:55:28.060 --> 00:55:33.205
NRG?
No questions, your honor.
Rayburn?

00:55:33.229 --> 00:55:37.139
No questions, your honor.
Tanaska? No questions, your honor.
TexBo?

00:55:38.430 --> 00:55:43.686
No questions.
TIEC? No your honor.
LCRA. No questions . East Texas? No

00:55:43.710 --> 00:55:47.835
question. East Texas? No questions, your honor. Golden

00:55:47.859 --> 00:55:51.006
Spread?
Thank you your honor.

00:55:51.030 --> 00:55:59.030


00:56:01.830 --> 00:56:04.245
Morning, Mr Taylor, Mr Ogelman. Good to see both of

00:56:04.269 --> 00:56:07.666
you. I think the bulk of my questions are going

00:56:07.690 --> 00:56:10.426
to be related to your rebuttal, Mr Taylor. You have

00:56:10.450 --> 00:56:13.355
a copy of it there with you?
I do.
Excellent. Ask you

00:56:13.379 --> 00:56:16.806
to turn to page 13 of it.

00:56:16.830 --> 00:56:19.105


00:56:19.129 --> 00:56:22.666
And specifically looking at lines four

00:56:22.690 --> 00:56:26.386
through 7, do you see where you state it is my understanding

00:56:26.410 --> 00:56:30.786
that PURA 39602 defines the default balance to include

00:56:30.810 --> 00:56:34.046
amounts owed market by competitive wholesale market

00:56:34.070 --> 00:56:37.485
participants, but not electric cooperatives. I do not

00:56:37.509 --> 00:56:40.136
believe an electric cooperative that has not opted

00:56:40.160 --> 00:56:43.475
into competition to be a competitive wholesale market

00:56:43.499 --> 00:56:46.450
participant. Is that a correct reading your testimony?

00:56:46.930 --> 00:56:50.906
Yes.
And where you say opted into competition, does

00:56:50.930 --> 00:56:54.806
that mean opted into retail customer choice?

00:56:54.830 --> 00:56:57.855
No, my intent of this statement was simply to say

00:56:57.879 --> 00:57:01.475
that my understanding as far as what was eligible for

00:57:01.499 --> 00:57:05.056
the component of what has been determined as for $419

00:57:05.080 --> 00:57:09.205
million.
I'm sorry. Mr Taylor, I'm asking a very different

00:57:09.229 --> 00:57:11.426
question I'm asking as the language there, where you

00:57:11.450 --> 00:57:14.686
say, a cooperative that has not opted into competition.

00:57:14.710 --> 00:57:17.849
Are you referring to the opting into retail competition?

00:57:18.330 --> 00:57:21.040
No, I'm talking about competitive wholesale market participants.

00:57:21.190 --> 00:57:26.506
Okay. How does one opt into competition?

00:57:26.530 --> 00:57:34.300
How does one opt into competition? Do I have to take that one?
Yes.
So I'm sorry.

00:57:34.379 --> 00:57:37.595
Mr Ogelman. This is Mr Taylor's testimony. So I'd much

00:57:37.619 --> 00:57:41.276
prefer him answer this question.
I'm afraid. I'm not

00:57:41.300 --> 00:57:44.396
sure I understand.
Well, your your testimony says I

00:57:44.420 --> 00:57:46.725
do not believe an electric cooperative that has not

00:57:46.749 --> 00:57:49.386
opted into competition to be a competitive wholesale

00:57:49.410 --> 00:57:52.146
market participants. So I assume that when you wrote

00:57:52.170 --> 00:57:55.036
those words, you had some notion for what you were

00:57:55.060 --> 00:57:58.050
referring to when you said opted into competition.

00:57:58.430 --> 00:58:00.705
And my question is, does that mean opting into retail

00:58:00.729 --> 00:58:04.906
choice?

00:58:04.930 --> 00:58:11.075
That was not the intent of my statement.
Okay, so let me

00:58:11.099 --> 00:58:14.115
ask you this then, as we sit today, do you believe

00:58:14.139 --> 00:58:16.975
that there are cooperatives that are participants

00:58:16.999 --> 00:58:21.105
in the competitive wholesale market of ERCOT.

00:58:21.129 --> 00:58:24.286
Do I believe that there are, could you say it again, savings, please?

00:58:24.310 --> 00:58:26.906
To your understanding are their electric cooperatives

00:58:26.930 --> 00:58:29.296
in ERCOT that are participants in the competitive

00:58:29.320 --> 00:58:31.705
wholesale market?

00:58:31.729 --> 00:58:35.825
Yes. Okay. And so when I look then to your testimony

00:58:35.849 --> 00:58:40.256
on lines four through seven, do we need to change that

00:58:40.280 --> 00:58:43.705
last sentence and say that electric cooperative, that

00:58:43.729 --> 00:58:46.416
there are electric co operatives who are members of

00:58:46.440 --> 00:58:50.105
the competitive wholesale market of ERCOT.

00:58:50.129 --> 00:58:53.195
Please say that again?

00:58:53.219 --> 00:58:55.975
Again, looking at that last sentence where you

00:58:55.999 --> 00:58:58.786
say that if a coop hasn't opted into competition, it's

00:58:58.810 --> 00:59:01.816
not part of the competitive wholesale market. Can you

00:59:01.840 --> 00:59:05.306
identify for me which cooperatives you believe are

00:59:05.330 --> 00:59:07.296
participants in the competitive wholesale market of

00:59:07.320 --> 00:59:10.705
ERCOT?

00:59:10.729 --> 00:59:14.485
So all, everybody who is competing. And it who is in the wholesale market

00:59:14.509 --> 00:59:17.916
participant is part of the competitive, I think I understand your point

00:59:17.940 --> 00:59:22.026
now.
Okay, So, can you answer the question?
Yes.

00:59:22.050 --> 00:59:24.256
So back to the beginning, when you're talking

00:59:24.280 --> 00:59:26.365
about the competitive wholesale market participant than

00:59:26.389 --> 00:59:28.426
it was that component of it that you were talking about.

00:59:28.450 --> 00:59:31.615
The retail piece.
Okay. So you're saying that you can't

00:59:31.639 --> 00:59:33.875
be a competitive wholesale market participant as a

00:59:33.899 --> 00:59:37.095
cooperative, absent opting into retail competition?

00:59:37.119 --> 00:59:40.365
That's not what I'm trying to say.
I'm getting lost. Please

00:59:40.389 --> 00:59:45.806
help me understand.
Okay, so,

00:59:45.830 --> 00:59:48.739
my point of what I was trying to make with this before,

00:59:49.330 --> 00:59:56.156
is that when I was taking into consideration the purpose

00:59:56.180 --> 01:00:02.060
of 39602 and how the default balance was being divided, then

01:00:03.330 --> 01:00:05.705
the amount that was my understanding and reading of

01:00:05.729 --> 01:00:10.955
that was that the purpose was for the competitive

01:00:10.979 --> 01:00:14.085
wholesale market participants to not include the electric

01:00:14.109 --> 01:00:17.556
co operatives per that reading for (indistinct). That's my understanding of

01:00:17.580 --> 01:00:21.105
the intent. So that is what, that is all I'm saying,

01:00:21.129 --> 01:00:23.465
or attempting to say, which apparently is not done

01:00:23.489 --> 01:00:27.546
very well.
And and to your knowledge, does 39602, does

01:00:27.570 --> 01:00:31.205
it actually say exclude cooperatives?

01:00:31.229 --> 01:00:35.066
I don't believe to my knowledge, I don't believe 39602

01:00:35.090 --> 01:00:37.859
says that. I believe earlier in the bill, it mentions,

01:00:38.530 --> 01:00:44.806
earlier in 4492, it references electric cooperatives.

01:00:44.830 --> 01:00:46.975
Can you point me to the language you're talking about?

01:00:46.999 --> 01:00:50.046
Your honor if he could put the statue in

01:00:50.070 --> 01:00:52.705
front of him, that would be helpful.
I can give him

01:00:52.729 --> 01:00:57.955
a copy of 44902, that's not a problem. But he seemed

01:00:57.979 --> 01:01:00.625
to have an idea for what he was talking. Bear with

01:01:00.649 --> 01:01:08.406
me, I'll get him a copy.

01:01:08.430 --> 01:01:13.205
Your honor. May I approach?
Yes.
Thank you.

01:01:13.229 --> 01:01:15.205
Thank you.

01:01:15.229 --> 01:01:17.745
Do you have one for me?
That was my crib sheet, because

01:01:17.769 --> 01:01:19.546
I really didn't anticipate that it was going to need

01:01:19.570 --> 01:01:22.886
that with him, but I believe it's staff exhibit 4

01:01:22.910 --> 01:01:25.150
to the extent that it's already admitted into the record.

01:01:26.129 --> 01:01:30.406


01:01:30.430 --> 01:01:32.546
I'm a little worried about the time factor of having

01:01:32.570 --> 01:01:36.075
him pour through the statute.
Yes, and I am too, because

01:01:36.099 --> 01:01:39.146
I know I only have a couple of minutes and so in the

01:01:39.170 --> 01:01:42.605
interest of time. Mr Taylor,

01:01:42.629 --> 01:01:45.605
let me ask you this.

01:01:45.629 --> 01:01:49.955
Without looking at it in the context of 44902, is it

01:01:49.979 --> 01:01:52.605
your general belief that co ops are competitive wholesale

01:01:52.629 --> 01:01:56.125
market participants in ERCOT?
Yes.
Right. You're

01:01:56.149 --> 01:01:58.066
aware that they participate in the day ahead Market

01:01:58.090 --> 01:02:00.660
ancillary service market, etcetera?
Yes.
All right.

01:02:01.530 --> 01:02:04.470
And to the extent that 44902 is supposed to be read

01:02:04.560 --> 01:02:07.675
in the context of how ERCOT operates today. Would that

01:02:07.699 --> 01:02:11.175
be a reasonable interpretation? Do you believe?
Objection.

01:02:11.199 --> 01:02:13.859
Asking for legal interpretation of a non lawyer witness.

01:02:14.330 --> 01:02:17.145
Well, your honor, he opened the door, saying that he

01:02:17.169 --> 01:02:19.296
read it in one way. I mean, if he's going to get

01:02:19.320 --> 01:02:22.905
to, you know, talk about in one context, he's kind

01:02:22.929 --> 01:02:26.385
of opened that door.
Would you repeat your question?
Sure.

01:02:26.409 --> 01:02:29.296
To the extent that this Commission believes that the operation

01:02:29.320 --> 01:02:32.536
of ERCOT for the past 20 years should be factored

01:02:32.560 --> 01:02:36.056
into how the statute is interpreted. Do you believe

01:02:36.080 --> 01:02:39.615
it reasonable for the for the Commission to read the

01:02:39.639 --> 01:02:42.780
competitive wholesale market to include co operatives?

01:02:47.429 --> 01:02:54.306
I'm gonna, overrule the objection, so you can go ahead and answer.

01:02:54.330 --> 01:02:58.516
For my reading, if  I'm understanding your question correctly

01:02:58.540 --> 01:03:06.260
From my reading of 4492 when references the amounts

01:03:38.230 --> 01:03:41.905
Sorry, I'm trying to remember which page.

01:03:41.929 --> 01:03:44.325
And I'll withdraw the question because I know I'm limited

01:03:44.349 --> 01:03:47.036
on time, your honor. I did very quickly also want to

01:03:47.060 --> 01:03:50.175
ask both of you some questions related to the cross

01:03:50.199 --> 01:03:52.145
you received from Calpine a moment ago about the CRR

01:03:52.169 --> 01:03:55.946
auction proceeds. I believe, Mr Taylor, you spoke

01:03:55.970 --> 01:04:01.246
to the issue of using incoming receipts to pay previous

01:04:01.270 --> 01:04:04.615
obligations to see CRRs. Do you remember those questions from

01:04:04.639 --> 01:04:10.236
Calpine?
Yes.
And you spoke about the issue that

01:04:10.260 --> 01:04:13.425
comes if you don't continue to receive adequate revenues

01:04:13.449 --> 01:04:18.556
or inflows, cash inflows from CRR auctions and

01:04:18.580 --> 01:04:21.996
this may be a question for both of you, am I correct

01:04:22.020 --> 01:04:26.375
that the revenues that have been coming in in the past

01:04:26.399 --> 01:04:29.575
are likely to actually shrink to some degree as we

01:04:29.599 --> 01:04:32.385
have less congestion and as some of the transmission

01:04:32.409 --> 01:04:35.506
constraints are being reduced?

01:04:35.530 --> 01:04:39.155
That's a viable option.
And to that end if that were to play

01:04:39.179 --> 01:04:41.716
out then that would exacerbate the shortage problem

01:04:41.740 --> 01:04:45.345
you have in those CRR accounts as far as the lack of

01:04:45.369 --> 01:04:48.316
prepaid crr account proceeds sitting in the account?

01:04:48.340 --> 01:04:50.976
Correct.
Okay, no further questions your honor.
Thank

01:04:51.000 --> 01:04:53.806
you.

01:04:53.830 --> 01:04:58.149
Let's see here. That was Golden Spread. South Texas?

01:04:59.730 --> 01:05:02.046
South Texas Electric CoOp?

01:05:02.070 --> 01:05:04.976
City of Austin?
No questions, your honor.
City of Lubbock?

01:05:05.000 --> 01:05:12.605
No questions, your honor.
City of Seguin? OPUC?
No questions, your honor.

01:05:12.629 --> 01:05:14.996
Before I turn to Commission staff, anybody else that

01:05:15.020 --> 01:05:19.355
I haven't identified? Commission staff?
No questions

01:05:19.379 --> 01:05:21.949
your honor.
All right, thank you. Do you have any redirect, Mr Moss?

01:05:23.030 --> 01:05:28.976
Just briefly, the last question that Mr Kimbrough

01:05:29.000 --> 01:05:32.306
asked you about whether the congestion revenue rights

01:05:32.330 --> 01:05:35.105
would

01:05:35.129 --> 01:05:40.605
I'm sorry the congestion revenues would

01:05:40.629 --> 01:05:44.090
diminish in the future. He asked the question to

01:05:44.139 --> 01:05:47.750
both of you and Mr Ogelmen, I think you had something

01:05:47.820 --> 01:05:51.726
to add to that.
Yes, we've actually been following

01:05:51.750 --> 01:05:57.056
the value of the auctions and they have not been going

01:05:57.080 --> 01:06:03.875
down. Over the very recent history. So the hypothetical

01:06:03.899 --> 01:06:08.246
is possible, but load and generation also grow on the

01:06:08.270 --> 01:06:14.760
system and it's also entirely reasonable to expect

01:06:15.129 --> 01:06:18.385
that congestion will form in other areas and we'll

01:06:18.409 --> 01:06:22.395
have to build more transmission over time and the revenues

01:06:22.419 --> 01:06:29.155
could stay stable or grow. So it's a reasonable hypothesis

01:06:29.179 --> 01:06:32.696
but the opposite is also a distinct possibility and

01:06:32.720 --> 01:06:35.905
I would want to make sure the other side of the coin

01:06:35.929 --> 01:06:43.105
was made aware to the Commissioners.

01:06:43.129 --> 01:06:45.476
That's all I have your honor. The only other

01:06:45.500 --> 01:06:50.066
thing that I would add is

01:06:50.090 --> 01:06:53.375
that if you would prefer it, if not that's fine too,

01:06:53.399 --> 01:06:56.306
for the Commissioner's questions, Mr Atkins and Mr.

01:06:56.330 --> 01:06:59.355
Reisig could join us as well if that would be more convenient.

01:06:59.379 --> 01:07:02.726
As you know, there were no questions for them but we're

01:07:02.750 --> 01:07:05.016
happy for them to come up now if the Commissioners

01:07:05.040 --> 01:07:07.575
would like to have questions for either of them?
And that

01:07:07.599 --> 01:07:11.335
completes your redirect.
Yes, it does.
Okay, so Commissioners

01:07:11.359 --> 01:07:14.196
that the parties had indicated ERCOT does have two

01:07:14.220 --> 01:07:18.345
other witnesses. Mr Atkins and Mr Reisig.

01:07:18.369 --> 01:07:21.905
Parties had no cross examination from them but we thought it

01:07:21.929 --> 01:07:24.340
possible that you might have questions for them. So

01:07:24.590 --> 01:07:29.125
why don't the two of you come up as well and Commissioners

01:07:29.149 --> 01:07:32.296
if you have, before you do, do you all have questions for

01:07:32.320 --> 01:07:36.706
any of the ERCOT witnesses?

01:07:41.030 --> 01:07:47.216
1 question at this stage. In terms of default

01:07:47.240 --> 01:07:51.760
on 50 million. Again, your proposed phase one of obligations.

01:07:52.929 --> 01:07:56.365
If ERCOT, goes into default, what is the default

01:07:56.389 --> 01:08:00.625
setting, how do we operate at that point?
If we go

01:08:00.649 --> 01:08:04.425
into default, then we have to repay the debt.
And that is uplifted

01:08:04.449 --> 01:08:08.939
throughout the system as per protocols already established?

01:08:10.929 --> 01:08:13.345
It would be uplifted, necessarily uplifted

01:08:13.369 --> 01:08:15.625
throughout the system. It would have to be a normal

01:08:15.649 --> 01:08:17.296
course of business as it would be recovered through

01:08:17.320 --> 01:08:20.385
the system administration be across time, we would have to

01:08:20.409 --> 01:08:23.845
find a way to fund 50 million dollars--
Which is an uplift charge

01:08:23.869 --> 01:08:27.935
right? We would have to approve an uplift amount through

01:08:27.959 --> 01:08:32.006
the system administration fee?

01:08:32.030 --> 01:08:34.629
Yes. You have to increase the system administration fee to

01:08:34.790 --> 01:08:36.806
cover that.

01:08:36.830 --> 01:08:41.706
That's all I had.

01:08:41.730 --> 01:08:45.536
I have one question dealing with the allocation

01:08:45.560 --> 01:08:50.986
of bond proceeds. Excuse me. I know you all, I read

01:08:51.010 --> 01:08:53.766
into this that you all believe that your allocation

01:08:53.790 --> 01:08:57.625
is the best way. Are the other ways harmful to the wholesale

01:08:57.649 --> 01:09:01.550
market? Or do you think yours is just a

01:09:02.330 --> 01:09:05.006
better way?

01:09:05.030 --> 01:09:07.786
It's a matter of where you're, in my opinion, it's a matter

01:09:07.810 --> 01:09:10.875
of where you're choosing to apply liquidity, whether

01:09:10.899 --> 01:09:12.855
you're choosing as was referenced earlier, whether you're

01:09:12.879 --> 01:09:15.375
choosing to apply liquidity to market participants

01:09:15.399 --> 01:09:19.625
or to CRR account balance and which of those of liquidity

01:09:19.649 --> 01:09:22.185
concerns are greatest and which you feel needs to be

01:09:22.209 --> 01:09:26.855
replenished as far as whether it would be better or more harmful the market particpants

01:09:26.879 --> 01:09:31.036
from a liquidity perspective. As far as how we have calculated

01:09:31.060 --> 01:09:34.135
it out through the process of determining how to attribute

01:09:34.159 --> 01:09:37.736
the $800 million dollars out. We feel this is the most

01:09:37.760 --> 01:09:40.915
appropriate way and it is the fairest across all market

01:09:40.939 --> 01:09:43.506
participants.

01:09:43.530 --> 01:09:46.746
Do you think other methods would harm the wholesale

01:09:46.770 --> 01:09:52.905
market in in the state?
I believe they could.

01:09:52.929 --> 01:09:59.405
If I might add, on the liquidity side, the

01:09:59.429 --> 01:10:03.486
issue is that there are a set of market participants

01:10:03.510 --> 01:10:06.605
that haven't been paid, but they could very easily

01:10:06.629 --> 01:10:11.756
oew downstream costs for the energy that they produced.

01:10:11.780 --> 01:10:16.685
So if you were to move everything into the crr account,

01:10:16.709 --> 01:10:21.056
let's say, that exhausted all of the allocation which

01:10:21.080 --> 01:10:26.345
there still will be some left. That would mean people

01:10:26.369 --> 01:10:29.665
that were owed money would not get paid and they would

01:10:29.689 --> 01:10:32.595
still have the obligation to pay those downstream costs.

01:10:32.619 --> 01:10:35.935
So that is, I think from the liquidity standpoint, that

01:10:35.959 --> 01:10:42.570
is something to weigh in your contemplation of the issues.

01:10:45.230 --> 01:10:47.685
So just kind of spinning off that last

01:10:47.709 --> 01:10:50.855
statement you also mentioned I believe in your testimony

01:10:50.879 --> 01:10:54.446
that if you don't replenish the CRR auction fund

01:10:54.470 --> 01:10:57.185
at some point there could also be liquidity issues.

01:10:57.209 --> 01:10:59.949
Can you provide a little more information about that?

01:11:00.530 --> 01:11:04.266
Certainly. So as Sean was pointing out we don't

01:11:04.290 --> 01:11:09.736
even have the required six months amount in reserves

01:11:09.760 --> 01:11:13.875
right now. So if scenarios played out where we weren't

01:11:13.899 --> 01:11:18.736
getting money in or as much money in, there is a risk

01:11:18.760 --> 01:11:22.766
that we would short pay the recipients of the CRR

01:11:22.790 --> 01:11:27.506
auction revenues and that would cause, so if I'm

01:11:27.530 --> 01:11:30.716
a load serving entity and I'm expecting this stream

01:11:30.740 --> 01:11:34.155
of revenue and that didn't come in that would also

01:11:34.179 --> 01:11:38.675
impact their liquidity and their ability to do business.

01:11:38.699 --> 01:11:42.855
So that's why we try to strike this balance between

01:11:42.879 --> 01:11:47.316
the two but we are absolutely concerned about replenishing

01:11:47.340 --> 01:11:51.196
both.
So the remaining funds that are not replenished

01:11:51.220 --> 01:11:53.425
because the 800 millions not going to cover the entire

01:11:53.449 --> 01:11:59.649
amount, will ERCOT recoup that money via its existing

01:12:00.330 --> 01:12:05.806
default uplift mechanism, 2.5 million...
So that is yet

01:12:05.830 --> 01:12:09.405
to be determined. But let me lay out a scenario, this

01:12:09.429 --> 01:12:11.566
isn't necessarily what's going to happen, but if we

01:12:11.590 --> 01:12:16.105
were to recover either through securitization or other

01:12:16.129 --> 01:12:24.129
means, all of the short paid from the

01:12:24.629 --> 01:12:28.885
electric cooperatives that have not paid us, then we

01:12:28.909 --> 01:12:32.149
would be able to replenish that account. So for example

01:12:32.629 --> 01:12:38.026
Sean mentioned that 600 million of the 800 million

01:12:38.050 --> 01:12:42.145
was used for Brazos, recovering that would make a

01:12:42.169 --> 01:12:48.306
substantial difference in that balance.

01:12:48.330 --> 01:12:52.105
So that necessitates

01:12:52.129 --> 01:12:56.006
successful administration of the conditions of House

01:12:56.030 --> 01:13:04.030
Bill 1580?
Correct.
Senate Bill 1580.

01:13:04.129 --> 01:13:08.266
That is the methodology out there, it also, I believe

01:13:08.290 --> 01:13:11.889
dependent on the bankruptcy proceeding that is ongoing.

01:13:12.530 --> 01:13:17.726
I would also say that if somehow that wasn't sufficient

01:13:17.750 --> 01:13:22.496
one path eligible to us is what Commissioner Cobos

01:13:22.520 --> 01:13:27.155
mentioned, which is to use the existing default uplift

01:13:27.179 --> 01:13:30.639
mechanism and start trying to recover that in 2.5 million

01:13:31.230 --> 01:13:37.226
dollar monthly (indistinct).
In the interest of mechanics if the

01:13:37.250 --> 01:13:43.145
conditions of 1580 do not proceed in a way that is

01:13:43.169 --> 01:13:47.939
timely as to the conditions that we may go down

01:13:48.429 --> 01:13:54.105
with this docket,

01:13:54.129 --> 01:13:58.476
what happens in the event of lag between the two, and

01:13:58.500 --> 01:14:01.446
then when do we need to take action? Is it a six

01:14:01.470 --> 01:14:08.786
month issue?
So for me and Sean, you might want to

01:14:08.810 --> 01:14:11.506
weigh in this some but we're gonna, in our proposal

01:14:11.530 --> 01:14:17.845
we recover something near 400 million of this card

01:14:17.869 --> 01:14:23.246
account. So that moves us quite a bit forward in the

01:14:23.270 --> 01:14:27.446
financial position of the organization. That would buy

01:14:27.470 --> 01:14:32.425
us more time and lower the risk that any CRR account

01:14:32.449 --> 01:14:37.316
I'm sorry. Any load that is due CRR auction revenues

01:14:37.340 --> 01:14:42.750
would be short paid. So I've just moved up by 400 million

01:14:43.129 --> 01:14:47.649
ballpark from that, in terms of having additional reserves.

01:14:48.129 --> 01:14:51.556
Yes. If you look at the money that's still owed

01:14:51.580 --> 01:14:53.766
to ERCOT that's considered to be the short pay amount

01:14:53.790 --> 01:14:57.115
that's outstanding then you have what we've defined

01:14:57.139 --> 01:15:00.165
as the amounts due from competitive wholesale market participants

01:15:00.189 --> 01:15:03.165
which is a 419 million that's being covered here. You

01:15:03.189 --> 01:15:05.760
have the amount that is for the period of emergency.

01:15:06.429 --> 01:15:09.206
You have an amount due from Brazos Electric CoOp

01:15:09.230 --> 01:15:12.256
which is, and the amount due from Rayburn. So you have those

01:15:12.280 --> 01:15:14.806
three buckets and then you have an additional fourth

01:15:14.830 --> 01:15:17.345
bucket which is amount due to ERCOT from non

01:15:17.369 --> 01:15:20.706
period of emergency which is a much smaller amount.

01:15:20.730 --> 01:15:24.716
So the anticipated route is to recover that money

01:15:24.740 --> 01:15:28.246
through those, from those parties. We still are potentially

01:15:28.270 --> 01:15:29.966
recovering money from those parties that have defaulted,

01:15:29.990 --> 01:15:32.345
including this 419 million, we're

01:15:32.369 --> 01:15:34.375
still seeking recovery of those actual amounts. This

01:15:34.399 --> 01:15:38.746
isn't letting those people off the hook for what they owe us. As Kanan

01:15:38.770 --> 01:15:43.135
said, because we are recovering, intending to have recovered

01:15:43.159 --> 01:15:46.956
that additional 300 plus million through this process

01:15:46.980 --> 01:15:50.905
to cover the crr monies which we have attributed to

01:15:50.929 --> 01:15:54.456
Brazos, that is buying us that additional time to get

01:15:54.480 --> 01:15:57.746
that money back in from Brazos or whatever route that

01:15:57.770 --> 01:16:02.196
takes.
So as a matter of testimony, you can't say yet

01:16:02.220 --> 01:16:07.145
what timelines would follow. We just have additional

01:16:07.169 --> 01:16:11.365
time to process both proceedings and for ERCOT to

01:16:11.389 --> 01:16:16.516
recover monies associated with these potential

01:16:16.540 --> 01:16:19.885
uplift costs?
Correct. And then also because of the

01:16:19.909 --> 01:16:22.796
pending bankruptcy hearings, we don't know necessarily

01:16:22.820 --> 01:16:26.185
what that full final dollar amount that will be due to ERCOT

01:16:26.209 --> 01:16:34.206
from Brazos for that will be as well.

01:16:34.230 --> 01:16:37.446
So any money you get from the bankruptcy and payment

01:16:37.470 --> 01:16:40.286
on the short pay will just be used to credit back the

01:16:40.310 --> 01:16:43.645
uplift balance and reallocate the amounts of like default

01:16:43.669 --> 01:16:48.145
charges etcetera?
It would go back to paying, paying

01:16:48.169 --> 01:16:51.446
off the short pays and then also replenishing the CRR

01:16:51.470 --> 01:16:53.706
auction fund.

01:16:53.730 --> 01:16:57.345
If we recover more than what is necessary to pay for

01:16:57.369 --> 01:17:00.946
those items (indistinct) this entire process that would allow

01:17:00.970 --> 01:17:03.915
staff to have some money to pay back some of this 800 million

01:17:03.939 --> 01:17:07.435
of default balance and pre pay that as well, which is one of the benefits

01:17:07.459 --> 01:17:13.306
of going through the comptroller's funding.

01:17:13.330 --> 01:17:18.226
Okay, thank you both. And just before we move on from

01:17:18.250 --> 01:17:24.395
ERCOT, Mr Atkins and Mr Reisig, would you raise your hands

01:17:24.419 --> 01:17:27.085
please? I just want to make sure if the Commission

01:17:27.109 --> 01:17:32.306
has any questions of them, and if not we are ready to

01:17:32.330 --> 01:17:35.056
proceed with our next party. Thank you, witnesses. You

01:17:35.080 --> 01:17:38.456
may step down. Commissioners, the next party

01:17:38.480 --> 01:17:42.665
that presented a witness is Calpine. You have

01:17:42.689 --> 01:17:46.325
the witnesses direct testimony. His name is Steve Schlemmer.

01:17:46.349 --> 01:17:49.875
The other parties have indicated they have no cross

01:17:49.899 --> 01:17:52.760
examination of him, but if you have questions of him

01:17:53.530 --> 01:17:57.056
we can call him up and proceed with Mr Schlemmer, and if not, we can move

01:17:57.080 --> 01:18:00.105
to the next part.

01:18:00.129 --> 01:18:04.925
All right.

01:18:04.949 --> 01:18:09.546
Then our next party in that category would be NRG energy.

01:18:09.570 --> 01:18:12.375
Again, the parties have no cross examination of their

01:18:12.399 --> 01:18:17.550
witness, who is Bill Barnes. But if you do we can proceed with that.

01:18:22.129 --> 01:18:28.575
Hearing none, the next party in that category is Rayburn

01:18:28.599 --> 01:18:31.585
Country. Their witnesses Julie Carey, again, no cross

01:18:31.609 --> 01:18:34.716
examination. But if you wish have questions for Miss

01:18:34.740 --> 01:18:42.740
Carey, we can proceed with that.

01:18:43.429 --> 01:18:46.405


01:18:46.429 --> 01:18:49.806
We may have a faster hearing than anybody anticipated

01:18:49.830 --> 01:18:54.335
in this case. The last party that has witnesses

01:18:54.359 --> 01:18:58.639
is Commission staff. Their witness is Darryl Tietjen.

01:18:59.230 --> 01:19:03.026
Again, parties have waived cross examination but we

01:19:03.050 --> 01:19:06.395
can present, staff can present Mr Tietjen if you

01:19:06.419 --> 01:19:14.419
would like to hear from him.

01:19:14.729 --> 01:19:20.826
We may be done, barring closing exam. Let

01:19:20.850 --> 01:19:23.756
me suggest that we take about a 10 minute break and

01:19:23.780 --> 01:19:25.696
folks can think about if there's anything else we need

01:19:25.720 --> 01:19:28.995
to take care of. We can return. If nothing else, forclosing

01:19:29.019 --> 01:19:33.035
arguments and be adjourned for the day. So let's take

01:19:33.059 --> 01:19:41.059
a 10 minute break.

01:20:04.729 --> 01:20:09.986
Yeah. Okay, let's go back on the record. And there

01:20:10.010 --> 01:20:15.576
has been a request for Mr Taylor to come back up. Is

01:20:15.600 --> 01:20:20.145
Mr Taylor still here? There may be some more questions

01:20:20.169 --> 01:20:22.895
for you. And you remain under oath. So let's take care

01:20:22.919 --> 01:20:26.055
of them.

01:20:26.079 --> 01:20:28.355
And Mr Taylor, I've also had a request if you could

01:20:28.379 --> 01:20:35.906
scoot the mic a little bit closer to you.
Sure.

01:20:35.930 --> 01:20:40.760
Mr Taylor. In regards to the question about cooperatives,

01:20:41.979 --> 01:20:45.906
in an interest of providing clarity in the settings

01:20:45.930 --> 01:20:50.995
that we have. I'd like to read you something out

01:20:51.019 --> 01:20:56.785
of the House Bill 4492. This is section two of

01:20:56.809 --> 01:21:01.640
the bill, Section 39.002 of PURA applicability.

01:21:02.309 --> 01:21:07.455
This Chapter, other than sections 39.151, 39.1516,

01:21:07.479 --> 01:21:15.479
39.155, 39.157, 39.159, 39.203, 39.904, 39.9051,

01:21:17.879 --> 01:21:25.566
39.9052, and 39.914, Subsection E, and inserted language

01:21:25.590 --> 01:21:31.205
Subchapters M and N does not imply to a municipally

01:21:31.229 --> 01:21:36.430
owned utility or an electric cooperative. So in your

01:21:37.120 --> 01:21:40.826
hearing, that statutory reference, do you believe,

01:21:40.850 --> 01:21:44.185
is that what you're pinning your statement on? Is that

01:21:44.209 --> 01:21:48.475
how we do not incorporate cooperatives?
Yes, that's

01:21:48.499 --> 01:21:50.659
the language I was looking for that said that Subchapter M--

01:21:51.229 --> 01:21:53.855
Just for my own peace of mind, I wanted clarity in

01:21:53.879 --> 01:21:56.970
the record on that.
Apologies for not finding that while I was looking through it earlier.

01:21:57.910 --> 01:22:01.796
No problem. It's a dead end. That's what I needed.

01:22:01.820 --> 01:22:05.895
Thank you.

01:22:05.919 --> 01:22:09.609
All right. I think--Yes, sir? Did you have something?

01:22:10.590 --> 01:22:12.796
I think it's fair to say everyone has rested their

01:22:12.820 --> 01:22:18.636
case. I had a discussion briefly with Mr Moss who

01:22:18.660 --> 01:22:22.326
did not believe anybody cared to make a oral closing

01:22:22.350 --> 01:22:25.926
argument. We've had some discussion about briefing

01:22:25.950 --> 01:22:30.046
and here's what we have decided to do. As far

01:22:30.070 --> 01:22:33.236
as briefing in this case, we may do something, we likely

01:22:33.260 --> 01:22:36.006
will do something different in the other case. We're

01:22:36.030 --> 01:22:39.415
gonna have one round of briefing in this case. One

01:22:39.439 --> 01:22:44.386
only, no reply briefs. That brief will be due, I'm

01:22:44.410 --> 01:22:46.955
sorry for the short time frame, it's like everything

01:22:46.979 --> 01:22:51.076
else in this case, but it'll have a 10 page limit

01:22:51.100 --> 01:22:55.430
and it will be due by September 1. One round of briefing,

01:22:55.820 --> 01:23:02.426
September 1, 10 Page limit. And I, it's all happened

01:23:02.450 --> 01:23:04.305
faster than I thought it would, but I think we're done.

01:23:04.329 --> 01:23:06.816
Is there any other business we need to take care of

01:23:06.840 --> 01:23:10.866
in this docket, 53231?
Your honor. I've

01:23:10.890 --> 01:23:13.265
got one housekeeping matter that I overlooked. The Commission,

01:23:13.289 --> 01:23:15.696
it's not something that Commissioners need to deal with

01:23:15.720 --> 01:23:18.085
it unless they want to but it's just a errata that

01:23:18.109 --> 01:23:21.725
I failed to put it earlier. So if you wanna do that now

01:23:21.749 --> 01:23:25.546
or you...
I think we probably should.
Okay, looking

01:23:25.570 --> 01:23:33.145
at, is it Mr Gilman's rebuttal testimony on page 13,

01:23:33.169 --> 01:23:39.986
so it's exhibit eight,

01:23:40.010 --> 01:23:47.645
page 13. And there's a statement on line 19 and 20 at

01:23:47.669 --> 01:23:52.740
one time, we had--
What page?
Page 13.

01:23:54.809 --> 01:23:56.585


01:23:56.609 --> 01:24:01.326
And the sentence that I think was in the record was

01:24:01.350 --> 01:24:06.245
on the filed copy was, ERCOT disagrees but for the reasons

01:24:06.269 --> 01:24:08.676
stated in the statement of position that will be filed

01:24:08.700 --> 01:24:12.055
contemporaneously with my rebuttal testimony. Ft the

01:24:12.079 --> 01:24:15.256
time that we filed that or we wrote that, we thought

01:24:15.280 --> 01:24:17.225
we were gonna do a statement of position. We since

01:24:17.249 --> 01:24:19.026
decided that we're probably gonna get post hearing

01:24:19.050 --> 01:24:22.316
briefing after Mr Journay mentioned that on Thursday.

01:24:22.340 --> 01:24:26.656
What we'd like to do is just change that to say ERCOT

01:24:26.680 --> 01:24:29.906
disagrees but it will address that legal issue in

01:24:29.930 --> 01:24:33.585
post hearing briefing.

01:24:33.609 --> 01:24:36.026
And the record copies that we brought in for you today

01:24:36.050 --> 01:24:38.446
have that change in it already and I'm happy to show

01:24:38.470 --> 01:24:41.026
this right here if anyone else has that, needs to see

01:24:41.050 --> 01:24:47.486
that language.

01:24:47.510 --> 01:24:49.636
All right, thanks for that clarification.
That's all

01:24:49.660 --> 01:24:55.745
I have sir.
Okay, well thank you all for

01:24:55.769 --> 01:24:58.816
your professionalism and collegiality in trying this

01:24:58.840 --> 01:25:02.136
case under difficult circumstances. Commissioners unless

01:25:02.160 --> 01:25:05.875
there's anything more from any of you, we are adjourned.

01:25:05.899 --> 01:25:09.229
Thank you all very much. Thank you.