WEBVTT 00:00:02.910 --> 00:00:05.488 (item:0.1:Chairwoman Jackson calls meeting to order) Good morning. This meeting of the Public Utility Commission 00:00:05.500 --> 00:00:08.349 of Texas will come to order. To consider matters that 00:00:08.359 --> 00:00:10.500 have been duly posted with the Secretary of State of 00:00:10.509 --> 00:00:14.978 Texas for June 15, 2023. For the record, my name is 00:00:14.989 --> 00:00:18.399 Kathleen Jackson. And I'm joined today by Will McAdams, 00:00:18.408 --> 00:00:22.458 Lori Cobos and Jimmy Glotfelty. (item:0.1:Chairwoman Jackson calls for a motion to excuse Commissioner Lake) Commissioner Lake is 00:00:22.469 --> 00:00:25.379 out today due to a personal matter. I would like to 00:00:25.388 --> 00:00:27.879 entertain a motion to excuse his absence. 00:00:29.440 --> 00:00:31.929 So moved. Second. I have a motion and a second. All in favor, say aye. 00:00:32.200 --> 00:00:36.750 Aye. Motion passes. Before we get started with the Agenda, (item:0.1:Chairwoman Jackson gives thank you to Staff and her thoughts on the future) 00:00:36.759 --> 00:00:39.250 obviously things look a little different up here today. 00:00:39.598 --> 00:00:43.270 I'm honored to have been named Interim Chair by Governor 00:00:43.298 --> 00:00:46.270 Abbott. And I would like to thank Peter for his tireless 00:00:46.279 --> 00:00:50.029 dedication as Chairman for this agency and the State. 00:00:50.039 --> 00:00:52.380 For keeping the lights on and ensuring Texans have 00:00:52.389 --> 00:00:55.719 reliable and affordable power. It's been a joy to get 00:00:55.728 --> 00:00:58.829 to know so many of the Staff here at the PUC. Many 00:00:58.840 --> 00:01:01.668 of the stakeholders and members of the public. I'm 00:01:01.679 --> 00:01:04.650 extremely grateful as a Commissioner and as a Texan 00:01:04.659 --> 00:01:08.409 for everyone's hard work. We have a lot of work ahead 00:01:08.549 --> 00:01:12.099 including implementation of Legislation from the recently 00:01:12.109 --> 00:01:15.668 concluded legislative session and continuing to ensure 00:01:15.680 --> 00:01:19.168 the goal we all share. Reliable and affordable, essential 00:01:19.180 --> 00:01:22.769 utility services. I want to say thank you to Thomas, 00:01:22.778 --> 00:01:26.870 Connie, Haley and our GR team. And all of the many 00:01:26.879 --> 00:01:30.299 Staff that contributed in so many ways to the Legislative 00:01:30.308 --> 00:01:34.088 process on top of their existing work Load. Congratulations 00:01:34.099 --> 00:01:38.159 on a successful Session for the PUC. Our agency is 00:01:38.168 --> 00:01:41.338 well positioned because of our Staff. Your talent, 00:01:41.349 --> 00:01:43.939 your commitment and the work you do each and every 00:01:43.948 --> 00:01:47.448 day focused on success. I look forward to working with 00:01:47.459 --> 00:01:50.290 each of my fellow Commissioners. And all of you as we 00:01:50.299 --> 00:01:53.620 build upon our many accomplishments. And with that, 00:01:53.819 --> 00:01:56.819 I'd like to open it up for any comments, uh from my 00:01:56.829 --> 00:02:00.409 fellow Commissioners. (item:0.1:Commissioner McAdams' thanks to Commissioner Lake) Uh thank you Madam Chair. Uh 00:02:00.418 --> 00:02:03.230 I, I'd like to echo your thanks to Chairman Lake or 00:02:03.239 --> 00:02:08.538 Commissioner Lake. Um it, it has been an extraordinary 00:02:08.550 --> 00:02:12.558 two years at the Public Utility Commission. Um I had 00:02:12.569 --> 00:02:15.689 the privilege to serve with him the entire time. Uh 00:02:15.719 --> 00:02:20.508 and he demonstrated extremely competent and able, and 00:02:20.520 --> 00:02:24.439 steady leadership during that extraordinary time. Where 00:02:24.669 --> 00:02:28.479 uh the Commission Staff, uh ERCOT, um the industry. 00:02:28.490 --> 00:02:31.909 Was asked to, to pick ourselves up. Put ourselves back 00:02:31.919 --> 00:02:35.379 together, um and reassure the public. That, that ubiquitous 00:02:35.389 --> 00:02:38.288 essential service that we call electricity will remain 00:02:38.300 --> 00:02:43.110 on and will, will remain reliable. Um he was an extremely, 00:02:43.118 --> 00:02:47.360 is an extremely dynamic leader. And uh the, the 00:02:47.368 --> 00:02:50.750 State owes him a debt of gratitude. And uh I just want 00:02:50.758 --> 00:02:55.139 to make sure that my thanks is demonstrated here. 00:02:55.250 --> 00:02:58.838 (item:0.1:Commissioner Glotfelty gives congratulations to Chairwoman Jackson) Uh I, I would like to say congratulations to 00:02:58.849 --> 00:03:02.710 you. Um for, for being nominated as Chairman. Around 00:03:02.719 --> 00:03:05.149 this room, there are pictures of many women that have 00:03:05.159 --> 00:03:07.500 Chaired this Commission. And I think it's great that 00:03:07.508 --> 00:03:09.449 uh, that you're joining that club. So we look forward 00:03:09.460 --> 00:03:11.909 to working with you. Same. It's a team effort, appreciate it. 00:03:12.949 --> 00:03:15.008 All right. Thank you. (item:0.1:Commissioner Cobos thanks Commissioner Lake and congratulates Chairwoman Jackson) Um I would like to echo some 00:03:15.020 --> 00:03:16.838 of the statements from my fellow Commissioners. I'd 00:03:16.849 --> 00:03:20.219 like to thank Chairman Lake as well. Um for his hard 00:03:20.229 --> 00:03:22.618 work and leadership at the Commission. Um, after Winter 00:03:22.629 --> 00:03:25.360 Storm Uri, it certainly was one of the most critically 00:03:26.399 --> 00:03:29.278 uh difficult and important times in the Commission's 00:03:29.288 --> 00:03:32.758 history. And stepping into a job like that is, is no 00:03:32.770 --> 00:03:37.500 um is, is no easy job. And um, he stepped in and 00:03:37.508 --> 00:03:40.469 did the best he could to lead our agency um for the 00:03:40.479 --> 00:03:42.679 last two years. And implementing all the Legislation 00:03:42.689 --> 00:03:45.639 that was passed during Winter Storm Uri or post-Winter Storm 00:03:46.000 --> 00:03:49.800 Uri. And um, just like to thank him for his hard work and 00:03:49.808 --> 00:03:52.389 um leadership at the Commission. And, and chairing the 00:03:52.399 --> 00:03:58.219 Commission and also um congratulate you, um Chair Jackson. 00:03:58.229 --> 00:04:03.129 And um, I'm excited for you and I'm here to work with 00:04:03.139 --> 00:04:08.139 you. And wish you the best and we will continue to charge 00:04:08.149 --> 00:04:11.258 forward with all the work we have to do. Well, said. 00:04:11.879 --> 00:04:13.639 I'd like to say one other thing and that is good luck 00:04:13.649 --> 00:04:16.819 getting a new name plate. It might take a while. 00:04:18.790 --> 00:04:21.759 Well, appreciate everybody's kind words. And um, you 00:04:21.769 --> 00:04:24.790 know, just echo my thanks to Peter. And I look forward 00:04:24.798 --> 00:04:27.379 to working together, it's a team effort. And we're fortunate 00:04:27.389 --> 00:04:31.548 that we have so many talented and engaged and committed 00:04:31.559 --> 00:04:34.910 people uh to help the citizens across our state. We 00:04:34.920 --> 00:04:38.149 have a lot of work ahead but um very confident that 00:04:38.160 --> 00:04:41.369 we're going to get it accomplished. Um, so with that 00:04:41.379 --> 00:04:43.759 Mr Journeay, will you please walk us through the Consent 00:04:43.769 --> 00:04:46.579 Items on today's Agenda? (item:0.1:Chairwoman Jackson asks for motion to approve items on Consent Agenda) Good morning Commissioners. 00:04:46.588 --> 00:04:48.790 By individual ballot, the following items were placed 00:04:48.798 --> 00:04:53.569 on your Consent Agenda 10, 13, 16 and 17. And I need 00:04:53.579 --> 00:04:55.858 to announce that uh Commissioner Cobos is recused 00:04:55.869 --> 00:04:56.790 from Item 16. 00:04:59.088 --> 00:05:01.988 I will entertain a motion to approve the items just 00:05:02.000 --> 00:05:03.108 described by Mr. Journeay. 00:05:05.338 --> 00:05:07.160 So moved. Second. Do I have a second? Do you have a second? Uh all in 00:05:07.178 --> 00:05:09.829 favor, say aye. Aye. Motion passes. 00:05:11.338 --> 00:05:14.889 (item:1:Chairwoman Jackson lays out instructions for public comment) Let's begin with Item No. 1, Public Comment. Oral 00:05:14.899 --> 00:05:17.420 comments related to a specific Agenda Item will be 00:05:17.428 --> 00:05:21.149 heard when that Item is taken up. This is for general 00:05:21.160 --> 00:05:24.798 comments. When we get to oral comments on specific 00:05:24.809 --> 00:05:27.548 Items, stakeholders should not approach the table unless 00:05:27.559 --> 00:05:30.000 an oral argument has been granted or they have been 00:05:30.009 --> 00:05:33.079 invited by a Commissioner. Speakers will be limited 00:05:33.088 --> 00:05:36.519 to 3 minutes each. (item:1:Mr. Journeay confirms there are no public comments) Mr. Journeay, do we have anyone 00:05:36.528 --> 00:05:39.119 from the public signed up to speak. No, ma'am. No one 00:05:39.129 --> 00:05:42.040 has signed up this morning. Okay. If not public comment 00:05:42.048 --> 00:05:47.290 is now closed. I will now call, uh call up 5 Items 00:05:47.298 --> 00:05:52.480 together. Items 2, 5, 6, 7 and 8. Uh Mr. Journeay, will you 00:05:52.488 --> 00:05:56.119 please lay, lay out each of these items? (item:2:51710, Petition of Honey Creek Venetian to amend Western Water Supply Corp's CCN) Item 2 is 00:05:56.129 --> 00:05:59.889 Docket 51710. Petition of Honey Creek Venetian uh 00:05:59.899 --> 00:06:03.600 LLC to amend Western Water Supply Corporation's CCN in 00:06:03.608 --> 00:06:07.569 Collin County by expedited release. A motion to withdraw 00:06:07.579 --> 00:06:09.750 the petition was filed on May 24. 00:06:11.699 --> 00:06:16.139 (item:5:53557, Petition of Honey Creek Venetian to amend Western Water Supply Corp's CCN by expedited release) Item 5 is Docket 53557 petition of Honey Creek Venetian 00:06:16.149 --> 00:06:19.369 LLC to amend Western Water Supply Corporation's CCN in Collin 00:06:19.379 --> 00:06:22.588 County by expedited release. The motion to withdrawal 00:06:22.600 --> 00:06:28.269 was filed on May 24. (item:6:53560, Petition of Honey Creek Venetian to amend Western Water Supply Corp's CCN by expedited release) Item 6 is Docket 53560. Petition 00:06:28.278 --> 00:06:31.629 of Honey Creek Venetian to amend Western Water Supply 00:06:31.639 --> 00:06:34.869 Corporation's CCN in Collin County by expedited release. 00:06:35.298 --> 00:06:39.819 A motion to withdrawal was filed on May 24. (item:7:53648, Petition of Venetian 141 Swisher to amend Western Water Supply Corp's CCN expedited release) Item 7 00:06:39.829 --> 00:06:45.629 is docket 53648 petition of Venetian 141 Swisher, LLC 00:06:45.639 --> 00:06:48.278 to amend Western Water Supply Corporation's CCN in Collin 00:06:48.290 --> 00:06:51.350 County by expedited release. The motion to withdraw 00:06:51.358 --> 00:06:55.410 was filed on May 24. (item:8:53703, Petition of Honey Creek Venetian to amend Western Water Supply Corp's CCN streamline expedited release) And Item 8 is Docket 53703. 00:06:55.420 --> 00:06:57.970 Petition of Honey Creek Venetian to amend 00:06:57.980 --> 00:07:01.660 Western Water Supply Corporation's CCN in Collin County 00:07:01.670 --> 00:07:05.399 by streamline expedited release. A motion to withdrawal 00:07:05.410 --> 00:07:07.028 was filed on May 24th. 00:07:10.369 --> 00:07:14.069 Do we have any thoughts on this one? Uh I certainly 00:07:14.079 --> 00:07:16.879 do. Uh and, and I'm glad we decided to take these uh 00:07:16.889 --> 00:07:21.238 all up together. (item:2:51710, Commissioner McAdams' comments on Honeycreek Venetian's petition to amend) (item:5:53557, Commissioner McAdams' comments on Honeycreek Venetian's petition to amend) (item:6:53560, Commissioner McAdams' comments on Honeycreek Venetian's petition to amend) (item:7:53648, Commissioner McAdams' comments on Honeycreek Venetian's petition to amend) (item:8:53703, Commissioner McAdams' comments on Honeycreek Venetian's petition to amend) I, I think you noticed some uh consistency 00:07:21.250 --> 00:07:27.178 in the motion um related to all 5 dockets. Um In 00:07:27.189 --> 00:07:29.069 my view, there's an issue I believe the Commission 00:07:29.079 --> 00:07:33.928 must address uh before approval of these orders. Primarily 00:07:33.959 --> 00:07:37.319 it is appropriate to utilize. Uh Is it appropriate 00:07:37.329 --> 00:07:41.889 whether, it is appropriate to utilize a different methodology 00:07:41.899 --> 00:07:45.459 to. Uh my apologies, Commissioners. I am looking at 00:07:45.470 --> 00:07:49.629 a different here. Um there is commonality in each of 00:07:49.639 --> 00:07:52.540 these dockets. The petitioner has filed a motion to 00:07:52.548 --> 00:07:56.619 withdraw its petition without prejudice. However, because 00:07:56.629 --> 00:07:59.629 the proposed order, orders were filed in each of the 00:07:59.639 --> 00:08:02.959 dockets before the petitioner filed its motion to withdraw. 00:08:03.428 --> 00:08:06.019 The Commission may grant a motion to withdraw without 00:08:06.028 --> 00:08:10.600 prejudice, only upon finding of good cause. Uh I recommend, 00:08:10.858 --> 00:08:13.488 that the Commission find that good cause exists to 00:08:13.500 --> 00:08:17.119 grant the motion to withdraw and dismiss the uh petitions. 00:08:17.369 --> 00:08:20.559 Because the petitioner no longer requests the release 00:08:20.569 --> 00:08:25.488 of its tract of land. Um and I have a uh motion. 00:08:25.500 --> 00:08:27.428 Uh I would certainly entertain any discussion. But 00:08:27.439 --> 00:08:30.509 in my view, this is a uh clean up effort on the 00:08:30.519 --> 00:08:33.729 5 uh proceedings. And I certainly have a motion to 00:08:33.739 --> 00:08:36.928 help in that. Unless anybody has countervailing thoughts. 00:08:37.428 --> 00:08:39.908 I would just throw in that the other good cause. Well 00:08:39.918 --> 00:08:42.200 this will relieve our work load at the federal district 00:08:42.210 --> 00:08:43.908 court. Great point, Mr. Journeay. 00:08:46.750 --> 00:08:49.960 Uh with that, (item:2:51710, Motion to grant motion to withdraw petitions) (item:5:53557, Motion to grant motion to withdraw petitions) (item:6:53560, Motion to grant motion to withdraw petitions) (item:7:53648, Motion to grant motion to withdraw petitions) (item:8:53703, Motion to grant motion to withdraw petitions) uh I would move that we find that good 00:08:49.969 --> 00:08:52.558 cause exists to grant the petitioner's motion to withdraw 00:08:52.570 --> 00:08:55.788 each of the petitions in the aforementioned dockets 00:08:56.048 --> 00:08:59.798 and grant the motion to withdraw in each of those dockets. 00:09:00.109 --> 00:09:04.500 And dismiss each of the petitions in those dockets 00:09:04.509 --> 00:09:08.619 without prejudice. Do I have a second? Second. All 00:09:08.629 --> 00:09:11.700 in favor, say aye. Aye. Motion passes. Thank you. 00:09:14.330 --> 00:09:17.109 Next up is Item No. 3. Uh Mr. Journeay, will you 00:09:17.119 --> 00:09:21.529 please lay out this item? (item:3:52877, Application of Vineyard Ridge Water Supply for authority to change its rates) Item 3 is Docket 52877. 00:09:21.538 --> 00:09:24.928 The application of Vineyard Ridge Water Supply for 00:09:24.940 --> 00:09:27.548 authority to change its rates. The revised proposed 00:09:27.558 --> 00:09:31.729 order was filed on May 3. Happy to take this one. 00:09:32.798 --> 00:09:35.279 Um (item:3:52877, Commissioner Cobos' thoughts on Vineyard Ridge Water Supply's application) I believe the Commission should not approve the 00:09:35.288 --> 00:09:38.330 proposed order. Based on my review of the Texas Water 00:09:38.340 --> 00:09:40.779 Code and the facts of the case. The Commission should 00:09:40.788 --> 00:09:43.038 remand the case back to Docket Management for further 00:09:43.048 --> 00:09:46.538 processing. To seek to address whether 10% of the utilities 00:09:46.548 --> 00:09:49.288 ratepayers file complaints. And a hearing was required 00:09:49.298 --> 00:09:55.710 to be set under Texas Water Code, Section 13.1871, Subsection 00:09:55.719 --> 00:10:02.590 I. Under Texas Water Code 13.1872, Subsection C-2. 00:10:02.599 --> 00:10:06.190 A Class D water utility must comply with the procedures 00:10:06.200 --> 00:10:12.168 set forth in Texas Water Code 13.1871 for rate change. 00:10:12.889 --> 00:10:17.918 Uh specifically, Subsection I in, in that uh section 00:10:17.928 --> 00:10:20.519 of the Water Code. Requires that a Hearing be set, even 00:10:20.529 --> 00:10:23.658 if a hearing is not requested. If more than 10% of the 00:10:23.668 --> 00:10:28.239 utilities, ratepayers file complaints. Um Vineyard 00:10:28.250 --> 00:10:31.658 Ridge had 56 connections at the time the application 00:10:31.668 --> 00:10:35.548 was filed to change the rates. Um after ratepayers 00:10:35.558 --> 00:10:38.080 received the first notice of the utilities proposed 00:10:38.090 --> 00:10:42.168 rate change with an effective date of May 1, 2022. 00:10:42.529 --> 00:10:46.070 Twenty-two protests and four motions to intervene were 00:10:46.080 --> 00:10:50.629 filed. After ratepayers received their 2nd notice, 00:10:50.639 --> 00:10:54.330 of the utilities proposed rate change, with an updated 00:10:54.340 --> 00:10:57.899 effective date of August 1, 2022. Twenty-five protests and three 00:10:57.908 --> 00:11:01.440 motions to intervene were filed. Therefore, it appears 00:11:01.450 --> 00:11:04.418 that more than 10% of the rate payers complained about 00:11:04.428 --> 00:11:08.038 the utilities proposed rate, rates before the 91st day 00:11:08.048 --> 00:11:11.889 after the effective date of the rate change. Per the 00:11:11.899 --> 00:11:16.460 Texas Water Code um, section. But it is unclear from 00:11:16.469 --> 00:11:18.859 the record, whether the protests and interventions were 00:11:18.869 --> 00:11:22.070 from the utilities current ratepayers. Therefore, it 00:11:22.080 --> 00:11:24.840 is unclear whether the ALJ was required to set a Hearing. 00:11:26.058 --> 00:11:29.109 Unlike prior Commission, preliminary orders and final 00:11:29.119 --> 00:11:32.649 orders. The ALJ's proposed order does not address Texas 00:11:32.658 --> 00:11:38.729 Water Code 13.1871, Subsection I. Requirement for a hearing 00:11:38.840 --> 00:11:41.229 either through a finding effect, identifying the number 00:11:41.239 --> 00:11:44.210 of complaints or a conclusion of law addressing whether 00:11:44.219 --> 00:11:48.019 a hearing was required under the Water Code. If the 00:11:48.029 --> 00:11:51.158 minimum protest threshold under the Water Code was 00:11:51.168 --> 00:11:54.080 met, the Commission is statutorily required to set 00:11:54.090 --> 00:11:57.139 a hearing. Whether it's a formal hearing at SOAH or 00:11:57.149 --> 00:11:59.538 an informal hearing through a prehearing conference 00:11:59.548 --> 00:12:02.590 at the Commission. And then after the hearing, if the 00:12:02.599 --> 00:12:04.918 Commission finds that the proposed rates are not 00:12:04.928 --> 00:12:07.750 reasonable, the Commission shall set the hearing. So 00:12:07.918 --> 00:12:10.408 it's important to determine whether or not a hearing 00:12:10.418 --> 00:12:13.989 was required. And uh, based on my review of the facts 00:12:14.250 --> 00:12:17.428 it's not, even though it appears there was 10% more 00:12:17.440 --> 00:12:19.918 uh, greater than 10% of ratepayers. We don't know if 00:12:19.928 --> 00:12:22.119 they're actually ratepayers that filed the complaints 00:12:22.129 --> 00:12:25.440 um, ratepayers and utility. (item:3:52877, Motion to remand case back to Docket Management) So I would propose and 00:12:25.450 --> 00:12:30.830 move. That we um, remand the case back to Docket Management 00:12:30.840 --> 00:12:35.960 for further processing, consistent with my assessment. 00:12:37.379 --> 00:12:43.239 Any else? (item:2:51646, Commissioner McAdams’ thoughts on Vineyard Ridge Water Supply application) I agree. I, I'll bow toward your interest 00:12:43.250 --> 00:12:46.259 in, in clarity uh Commissioner. I, I was of the view 00:12:46.269 --> 00:12:50.849 that look. I, I believe we had uh, 10% of the 00:12:50.859 --> 00:12:54.719 ratepayers complaining um, to a degree. But as you 00:12:54.729 --> 00:12:59.479 as you clearly allude to. There's a question of law 00:12:59.489 --> 00:13:02.759 whether that constitutes that, that threshold to require 00:13:02.769 --> 00:13:06.619 that hearing. So um that I, I'd support the motion 00:13:06.629 --> 00:13:10.879 to remand back, and then seek clarity on whether the 00:13:10.889 --> 00:13:12.379 the statutory threshold was met. 00:13:14.080 --> 00:13:14.529 Okay. 00:13:16.580 --> 00:13:19.840 So you have a motion to remain the case to Docket Management 00:13:19.849 --> 00:13:22.279 for further process and consistent with our discussion. 00:13:22.629 --> 00:13:26.500 Uh, do I have a second? I'll second. All in favor, say aye. Aye. 00:13:26.509 --> 00:13:27.629 Motion passes. 00:13:30.450 --> 00:13:33.320 Next up is Item 4. Mr. Journeay, will you please lay 00:13:33.330 --> 00:13:38.149 out this Item? (item:4:53336, Application of Big Easy Aqua for a CCN in Colorado County) Item 4 is Docket 53336. Application 00:13:38.158 --> 00:13:43.320 of Big Easy Aqua for a CCN in Colorado County. A proposed 00:13:43.330 --> 00:13:46.259 order was filed on May 24. And I have a memo with 00:13:46.269 --> 00:13:48.038 proposed changes to that order. 00:13:49.769 --> 00:13:53.729 Thank you, Steven. Any thoughts on this one? Um, it 00:13:53.739 --> 00:13:56.739 I'll, I'll take it. If anybody uh, if everybody is 00:13:56.750 --> 00:14:01.099 ok with it. (item:4:53336, Commissioner McAdams' comments on Big Easy Aqua's application) Look in, in my view, Big Easy Aqua's application 00:14:01.109 --> 00:14:04.538 is lacking in several respects. Um first, the utility 00:14:04.548 --> 00:14:07.440 has not filed a statutorily required capital improvements 00:14:07.450 --> 00:14:11.519 plan. And second, the utility may not have uh filed 00:14:11.529 --> 00:14:14.690 sufficient firm capital commitments. And third, the 00:14:14.700 --> 00:14:17.989 utility has requested a larger CCN that is, that is 00:14:18.000 --> 00:14:22.070 required for service. We have precedents established 00:14:22.080 --> 00:14:24.639 within this Commission on all three of those respects. 00:14:24.940 --> 00:14:27.899 Big Easy in my view, needs to file capital improvements 00:14:27.908 --> 00:14:30.950 plans. Showing how they plan to serve the area of their 00:14:30.960 --> 00:14:34.440 application. So far they have failed to do so and shown 00:14:34.450 --> 00:14:37.038 in the evidence where their engineering plans indicate. 00:14:37.308 --> 00:14:40.158 That the constructed distribution system can only serve 00:14:40.168 --> 00:14:45.009 40 of the 120 planned lots. Additionally, they have not 00:14:45.019 --> 00:14:47.298 provided evidence indicating that they have firm capital 00:14:47.308 --> 00:14:50.538 commitments to serve the entirety of the 120 planned 00:14:50.548 --> 00:14:55.308 lots. As such um I, I'd entertain any other thoughts 00:14:55.320 --> 00:14:57.649 on this. But I have a motion uh to act on the 00:14:57.658 --> 00:15:01.408 proposed order. Anybody else? I, I would just say. 00:15:01.418 --> 00:15:04.210 (item:4:53336, Commissioner Glotfelty's comments on Big Easy Aqua's application) Um, you know, these uh become more and more challenging 00:15:04.219 --> 00:15:07.619 in my opinion. As we have these rural neighborhoods 00:15:07.629 --> 00:15:10.940 that spring up, you know, are developing. You know 00:15:10.950 --> 00:15:14.428 massive plots of land, hundreds of acres or, or dozens 00:15:14.440 --> 00:15:19.538 of acres. And I think it's right that they are thinking 00:15:19.548 --> 00:15:23.808 long term about how to deploy a water wastewater system 00:15:23.820 --> 00:15:26.509 for the entirety of the community. Unfortunately, as 00:15:26.519 --> 00:15:29.908 you said, our precedent is serve what you have proof 00:15:29.918 --> 00:15:33.590 that you can build. Have money that you can build, 00:15:33.599 --> 00:15:36.590 show that you can own and operate, and then expand. 00:15:36.599 --> 00:15:39.190 And I, you know, maybe that's something we change in 00:15:39.200 --> 00:15:42.219 the future. But I think today the precedent is, is 00:15:42.229 --> 00:15:45.668 pretty firm, and pretty rigid, and pretty right? So 00:15:45.678 --> 00:15:49.469 I agree with you um on the, on the deficiencies of 00:15:49.479 --> 00:15:52.750 this order. Uh and support that motion. With, with that 00:15:52.759 --> 00:15:57.960 (item:4:53336, Commissioner McAdams' follow-up comments on Big Easy Aqua's application) I'd like to also say that, that. Um that puts 00:15:57.969 --> 00:16:00.379 a burden on the Commission or it puts an obligation 00:16:00.389 --> 00:16:05.250 on the Commission. To have our um bureaucratic process 00:16:05.259 --> 00:16:07.820 is as streamlined as possible. So that, that utility 00:16:07.830 --> 00:16:12.109 may come in and amend their CCN, as the expansion of 00:16:12.119 --> 00:16:15.200 that development occurs. So that we can quickly and 00:16:15.210 --> 00:16:19.548 expeditiously approve those expansions and ensure adequate 00:16:19.558 --> 00:16:23.298 and affordable services is provided. So I, I think 00:16:23.308 --> 00:16:26.500 that's, that's 100% alignment with. And we discussed that 00:16:26.509 --> 00:16:29.869 as this precedent was established as we all came on 00:16:29.879 --> 00:16:34.058 to the Commission. I, I'm in agreement. (item:4:53336, Commissioner Cobos' comments on Big Easy Aqua's application) I think the 00:16:34.070 --> 00:16:36.359 information that uh, Commissioner McAdams laid out 00:16:36.369 --> 00:16:38.969 is required by the Water Code and our Commission rules. 00:16:38.979 --> 00:16:42.149 And is consistent with our uh, Commission precedent. 00:16:42.158 --> 00:16:45.369 And um, as you stated Commissioner McAdams, I mean 00:16:45.379 --> 00:16:47.599 the utility has the ability to come back in and amend 00:16:47.609 --> 00:16:50.690 their CCN. As they are able to prove up the 00:16:50.700 --> 00:16:53.219 that service is needed for those additional plots of 00:16:53.229 --> 00:16:55.950 land. And so the door is not closed. It's just, you 00:16:55.960 --> 00:16:58.840 know we're, we're mitigating. We're, we're 00:16:58.849 --> 00:17:03.019 following our process. To ensure that the service is 00:17:03.029 --> 00:17:06.118 provided to the public that needs it at the time. But 00:17:06.130 --> 00:17:08.529 uh the utility is always welcome to come back. And provide 00:17:08.539 --> 00:17:10.400 us with additional information and expand their service 00:17:10.410 --> 00:17:12.140 territory when they can do so. 00:17:14.358 --> 00:17:18.479 (item:4:53336, Mr. Journeay's comments on Big Easy Aqua's application) Chairman, can I make a point? Yes. I appreciate you talking 00:17:18.489 --> 00:17:21.597 about expediting our bureaucratic process. Our Staff 00:17:21.608 --> 00:17:24.739 works hard and we will never be streamlined. Until the 00:17:24.749 --> 00:17:29.318 regulated community educates themself on the law and 00:17:29.328 --> 00:17:33.689 our rules. And our filing packages and presents applications 00:17:34.410 --> 00:17:35.529 that are. 00:17:37.489 --> 00:17:39.699 I can't use the word I wanna use. 00:17:42.509 --> 00:17:46.289 That, that are competent. You know, Steven I, I under. 00:17:46.519 --> 00:17:52.439 (item:4:53336, Commissioner McAdams' thoughts on Big Easy Aqua's application) I appreciate the position of tough love. Do you? Um but um 00:17:54.170 --> 00:17:57.519 we, we've got all shapes and sizes of utilities. Especially 00:17:57.529 --> 00:18:00.098 in this, this area. Especially under the Water code. 00:18:00.328 --> 00:18:04.699 And um and we will not be rubber stamping any applications. 00:18:04.709 --> 00:18:08.979 But um we, we've made great efforts and that's part 00:18:08.989 --> 00:18:10.858 of our public engagement. Especially over the last 00:18:10.868 --> 00:18:15.130 two years, even in water. Um with our own uh internal 00:18:15.140 --> 00:18:18.059 divisions within the agency. To outreach and inform 00:18:18.068 --> 00:18:20.858 these utilities or prospective utilities of what is 00:18:20.868 --> 00:18:23.680 required. So that they know the information they need, 00:18:23.689 --> 00:18:26.394 need to come in the door with. So that they can apply, 00:18:26.404 --> 00:18:29.265 we can review and give expeditious approval and, or 00:18:29.275 --> 00:18:32.934 denial. Or offer up a remedy to, to cure the deficiencies. 00:18:33.255 --> 00:18:36.493 Um so I think we're doing the right things. It's just 00:18:36.505 --> 00:18:40.634 a matter of establishing that climate of regulatory 00:18:40.644 --> 00:18:45.250 oversight in this area under PUC uh guidelines. Which 00:18:45.259 --> 00:18:47.890 is different than other agencies in the past. But we're 00:18:47.900 --> 00:18:49.969 gonna get there. That's true, sir. I'll just note that 00:18:49.979 --> 00:18:52.828 many of these applications are put together by registered 00:18:52.838 --> 00:18:55.910 professional engineers or licensed attorneys. I hold 00:18:55.920 --> 00:18:59.578 both of those certificates in this State. I would say 00:18:59.588 --> 00:19:02.670 that I don't know that they are living up to their 00:19:02.680 --> 00:19:03.559 obligations. Absolutely. 00:19:05.199 --> 00:19:07.989 (item:4:53336, Chairwoman Jackson's comments on Big Easy Aqua's application) When I think further to your point, the importance 00:19:08.000 --> 00:19:11.108 here is that we have alignment. And that we move forward 00:19:11.118 --> 00:19:14.880 and make sure that the facilities that are being provided 00:19:14.890 --> 00:19:19.809 and being planned. Have the necessary elements for success 00:19:19.818 --> 00:19:22.809 and that being the Financial Assurance and the Capital 00:19:22.818 --> 00:19:25.703 improvement plan. And that the, the same time, you 00:19:25.713 --> 00:19:28.025 know, we're working as a staff and as you mentioned 00:19:28.035 --> 00:19:31.904 very hard uh per the guidelines and the standards to 00:19:31.914 --> 00:19:36.334 review those. So in my, in my mind it's it's a, it's 00:19:36.344 --> 00:19:39.414 a collaborative effort moving forward. To make sure 00:19:39.424 --> 00:19:42.334 that we have the information we need. So that the public 00:19:42.344 --> 00:19:46.844 is protected and also to be able to provide that service 00:19:46.854 --> 00:19:51.305 in a expeditious manner as we can. So, but thank you so 00:19:51.314 --> 00:19:55.670 much for bringing up this points. (item:4:53336, Connie Corona with Commission Staff's comments on Big Easy Aqua's application) Madam Chair, um may 00:19:55.680 --> 00:19:59.269 I just put a fine point on the comments of Commissioner 00:19:59.279 --> 00:20:04.588 McAdams. Um to state that he was referring both to our 00:20:04.598 --> 00:20:08.969 Division of Utility Outreach. Which exists um to help 00:20:08.979 --> 00:20:12.289 utilities who are not familiar with our processes to 00:20:12.299 --> 00:20:15.160 work their way through them. And of course, our subject 00:20:15.170 --> 00:20:19.328 matter experts remain available to answer any questions. 00:20:19.338 --> 00:20:23.689 And Utility Outreach can help um the applicants get 00:20:23.699 --> 00:20:25.949 in touch with those folks. To answer any questions they 00:20:25.959 --> 00:20:29.729 might have, before they bring in their application. Absolutely. 00:20:30.219 --> 00:20:32.680 I think that, that's an excellent point is that we are 00:20:32.689 --> 00:20:37.618 a resource. And uh the Staff is well respected across 00:20:37.630 --> 00:20:41.500 the State and uh has worked hard, and will continue 00:20:41.509 --> 00:20:44.549 to work hard. To make sure that we have again that those, 00:20:44.559 --> 00:20:47.239 those that information that we need. To make the decisions 00:20:47.250 --> 00:20:50.650 going forward to make sure we have the reliable service 00:20:50.660 --> 00:20:51.689 and the adequate service. 00:20:54.088 --> 00:20:57.180 So with that, you have a motion. I do. (item:4:53336, Motion to remand case back to Docket Management) Uh I would move not to act on the proposed 00:20:57.189 --> 00:20:59.578 order and remand it to docket management. So that Big 00:20:59.588 --> 00:21:03.279 Easy Aqua may file a capital improvements plan. And specify 00:21:03.289 --> 00:21:06.568 whether the firm capital commitments includes all phases 00:21:06.578 --> 00:21:10.318 of construction. And reduce the requested CCN acreage 00:21:10.328 --> 00:21:13.420 to those areas. That require a CCN for water service 00:21:13.430 --> 00:21:17.420 by Big Easy Aqua. Do I have a second? Second. All 00:21:17.469 --> 00:21:20.380 in favor, say aye. Aye. Motion passes. 00:21:25.699 --> 00:21:30.059 We've already taken up Items 5, 6, 7 and 8. Next up 00:21:30.068 --> 00:21:33.279 is Item 9. Mr. Journeay, will you lay out this Item 00:21:33.289 --> 00:21:37.059 please? (item:9:54121, Application of Harrison Williams for temporary rates for nonfunctioning utility) Item 9 is Docket 54121. The application 00:21:37.068 --> 00:21:40.000 of Harrison Williams for temporary rates for nonfunctioning 00:21:40.009 --> 00:21:43.509 utility. A revised proposed order was filed on 00:21:43.519 --> 00:21:47.078 May 19. Uh Chairman Jackson has a memo and I have 00:21:47.088 --> 00:21:50.939 a memo with proposed changes to the order. Thank you. I did file, 00:21:50.949 --> 00:21:54.009 file a memo. (item:9:54121, Chairwoman Jackson's comments on Harrison Williams' application) Um here we have an application for temporary 00:21:54.019 --> 00:21:58.209 rates for a water utility. That was filed by the temporary 00:21:58.219 --> 00:22:01.469 manager Harrison Williams. Commission Staff has reviewed 00:22:01.479 --> 00:22:04.059 the record and worked with Mr. Williams to develop an 00:22:04.068 --> 00:22:07.769 agreed temporary rates. That are similar to the applications 00:22:07.779 --> 00:22:11.809 proposed rates. I agree with Commission Staff's recommendation 00:22:11.818 --> 00:22:14.640 that the temporary rates are reasonable. However, I 00:22:14.650 --> 00:22:17.868 did notice the Commission normally includes an additional 00:22:17.880 --> 00:22:21.598 ordering paragraph. That provides guidance on our reconciliation 00:22:21.608 --> 00:22:25.049 process for temporary rates. And this ordering paragraph 00:22:25.059 --> 00:22:28.858 was missing from the revised proposed order. Uh to make 00:22:28.868 --> 00:22:31.390 sure that this order is consistent with previous Commission 00:22:31.400 --> 00:22:34.439 orders on temporary rates. I'm suggesting adding this 00:22:34.449 --> 00:22:37.858 missing ordering paragraph. Um any additional thoughts 00:22:37.868 --> 00:22:38.608 on this one? 00:22:40.640 --> 00:22:43.959 I'm in agreement. I agree. Me too. I, I thought your memo 00:22:43.969 --> 00:22:47.160 memo captured the mechanics of how to move forward. 00:22:47.170 --> 00:22:51.598 Um and uh if you would entertain it, uh Madam Chair. 00:22:51.608 --> 00:22:54.400 (item:9:54121, Motion to approve proposed order as modified) I'd move to approve the proposed order as modified 00:22:54.410 --> 00:22:58.699 by Commission counsel and your memo. I would second that. Thank you. Okay 00:22:58.709 --> 00:23:01.519 All in favor, say aye. Aye. Motion passes. 00:23:05.449 --> 00:23:09.269 Item 10 was consented. Next Item is Item 11. Mr. Journeay, 00:23:09.289 --> 00:23:13.759 will you lay out this item? (item:11:55098, Petition for an order appointing a temp. manager Channel Oaks Water System) Item 11 is Docket 55098. 00:23:13.769 --> 00:23:16.239 Petition for an order appointing a temporary manager 00:23:16.250 --> 00:23:19.140 for Channel Oaks Water System. Commission Staff filed 00:23:19.150 --> 00:23:21.670 a petition to appoint a temporary manager for the Channel 00:23:21.680 --> 00:23:23.979 Oaks Water System. And we have a Hearing scheduled 00:23:23.989 --> 00:23:24.660 on that petition. 00:23:35.979 --> 00:23:38.858 (item:11:55098, Chairwoman Jackson calls for recess to hold separate hearing) And we will recess this meeting of the PUC to hold a separate 00:23:38.868 --> 00:23:40.559 Hearing on this Item. 00:23:42.640 --> 00:23:44.969 (item:11:55098, Chairwoman Jackson calls merits hearing to order) This meeting of the Public Utility Commission of Texas 00:23:44.979 --> 00:23:47.328 will come to order. For the Merits Hearing in Docket 00:23:47.509 --> 00:23:51.709 No. 55098, which has been duly posted with the Secretary 00:23:51.719 --> 00:23:55.959 of the State of Texas for June 15, 2023. I will now 00:23:55.969 --> 00:23:59.880 turn it over to our Commission ALJ for the Administration 00:23:59.890 --> 00:24:02.269 of the Hearing. (item:11:55098, Commission ALJ lays out docket on petition for appointing a temporary manager for Channel Oaks WS) Good morning Commissioners. I call 00:24:02.279 --> 00:24:06.199 to order Docket No. 55098, which is Commission Staff's 00:24:06.209 --> 00:24:08.588 petition for an order appointing a temporary manager 00:24:08.598 --> 00:24:12.279 for Channel Oaks Water System LLC. Continuing until 00:24:12.289 --> 00:24:14.828 the Commission orders otherwise or until a receiver 00:24:14.838 --> 00:24:17.910 is appointed by the appropriate court. My name is Katie 00:24:17.920 --> 00:24:19.828 Marks, assisting the Commissioners. And the purpose 00:24:19.838 --> 00:24:22.828 of this Hearing is to determine whether a temporary 00:24:22.838 --> 00:24:25.709 manager should be appointed. We had a prehearing conference 00:24:25.719 --> 00:24:28.519 yesterday and I admitted the 14 exhibits prefiled 00:24:28.529 --> 00:24:33.338 by Commission Staff on June 5, 2023. I also admitted 00:24:33.348 --> 00:24:36.568 the 3 exhibits for Channel Oak, Oaks which are the 00:24:36.670 --> 00:24:39.588 3 items filed by Channel Oaks on June 6, 00:24:39.598 --> 00:24:43.239 2023. At this time, we'll take the appearances of the 00:24:43.250 --> 00:24:45.118 party starting with Commission Staff. 00:24:47.949 --> 00:24:48.660 Good morning. I'm sorry. 00:24:51.509 --> 00:24:53.880 (item:11:55098, Introductions from Mildred Anaele, Commission Staff & Pauline Jones, Channel Oaks WS) Good morning, Mildred Anaele for Commission Staff. 00:24:55.939 --> 00:24:59.939 For the utility? Oh, I'm sorry. Pauline Jones, uh Channel 00:24:59.949 --> 00:25:04.430 Oaks Water System. Um we will move into opening statements, 00:25:04.439 --> 00:25:08.799 Commission Staff. Good morning here. Um, (item:11:55098, Opening statement from Mildred Anaele, Commission Staff) we are here 00:25:08.809 --> 00:25:11.549 this morning to address Staff's petition to appoint 00:25:11.559 --> 00:25:15.479 a temporary manager to Channel Oaks Water System, LLC. 00:25:15.809 --> 00:25:20.809 Uh, and I will refer to them as COWS moving forward. 00:25:20.818 --> 00:25:25.689 Um, on May 2, 2023, the Commission issued an order modifying 00:25:25.699 --> 00:25:29.130 the emergency, uh emergency order issued by the Executive 00:25:29.140 --> 00:25:34.959 Director in this matter. On February 23rd, 2023, ordering 00:25:34.969 --> 00:25:39.338 COWS to file a sworn affidavit, stating the, stating the 00:25:39.348 --> 00:25:43.789 identity of an individual who has the authority 00:25:43.799 --> 00:25:48.199 to manage COWS. COWS has failed to file such an affidavit 00:25:48.209 --> 00:25:52.420 or otherwise identify a manager of COWS. Additionally 00:25:52.430 --> 00:25:57.170 on May 25, 2023, the Commission requested the Attorney 00:25:57.180 --> 00:26:00.858 General's Office bring suit to appoint a receiver. Because 00:26:00.868 --> 00:26:03.660 of COWS's failure to comply with the Commission's order, 00:26:03.699 --> 00:26:06.500 requiring it to identify a manager. And because the 00:26:06.509 --> 00:26:09.949 process to appoint a receiver may likely be a lengthy 00:26:09.959 --> 00:26:12.969 one. Commission Staff is requesting that the Commission 00:26:12.979 --> 00:26:17.578 issue an order identifying CSWR Texas as temporary 00:26:17.588 --> 00:26:21.519 manager of Channel Oaks. For a time period identified 00:26:21.529 --> 00:26:24.529 by the Commission or until a receiver is appointed. 00:26:24.539 --> 00:26:27.650 To ensure the continued operation of the utility and 00:26:27.660 --> 00:26:30.328 provision of continuous and adequate service to the 00:26:30.338 --> 00:26:31.059 customers. 00:26:32.828 --> 00:26:35.890 (item:11:55098, ALJ Marks swears in Pauline Jones, with Channel Oaks WS) Uh, Miss Jones. Yesterday, we discussed your capacity 00:26:35.900 --> 00:26:38.118 with the water system and your role as a representative 00:26:38.130 --> 00:26:40.598 here today. Given your position, I'm gonna go ahead 00:26:40.608 --> 00:26:43.469 and swear you in before we move into your opening statement. 00:26:43.729 --> 00:26:45.920 Um, if you'll raise your right hand and state your name 00:26:45.930 --> 00:26:48.729 for the record, please. Pauline Jones. Do you swear or 00:26:48.739 --> 00:26:50.750 affirm to tell the truth, the whole truth and nothing 00:26:50.759 --> 00:26:53.259 but the truth in this proceeding? I do. Thank you. You 00:26:53.269 --> 00:26:55.250 may proceed with an opening statement, if you have one. 00:26:55.630 --> 00:27:01.779 (item:11:55098, Opening Statement from Pauline Jones, Channel Oaks WS) Um my only statement is that um, uh. On May 11, uh 00:27:01.789 --> 00:27:04.699 Mary Maxey with the Channel Oaks Water System, uh the 00:27:04.709 --> 00:27:08.640 managing member of the LLC. Filed an affidavit indicating 00:27:08.650 --> 00:27:11.009 that Channel Oaks Water System had agreed to work with 00:27:11.019 --> 00:27:14.900 PUC. To secure an entity qualified to take over the 00:27:14.910 --> 00:27:18.699 Channel Oaks Water System. Um, that Pauline Jones, 00:27:18.709 --> 00:27:23.578 Keith Jones and Aaron Johnson, a Class B licensed operator. 00:27:23.588 --> 00:27:26.640 Have been identified as the new operators responsible 00:27:26.650 --> 00:27:31.170 for managing the utility. Um on May 16th, the PUC 00:27:31.180 --> 00:27:34.910 came out and discussed with property owners from Channel 00:27:34.920 --> 00:27:38.789 Oak subdivision. The um procedures that would be required 00:27:38.799 --> 00:27:42.689 to complete a sale, transfer, merger of the CCN. And 00:27:42.699 --> 00:27:45.809 explained that it could take up to a year to complete 00:27:45.828 --> 00:27:49.539 that actual transfer over. Um we feel like that we 00:27:49.549 --> 00:27:52.989 have identified the individual responsible to manage 00:27:53.000 --> 00:27:56.108 the utility and we have not violated the Commission's 00:27:56.118 --> 00:28:03.348 final order in Docket No. 54678. Um the Channel 00:28:03.358 --> 00:28:06.598 Oaks Water system was never notified, that the PUC 00:28:06.608 --> 00:28:09.160 was requesting that the Attorney General bring suit 00:28:09.170 --> 00:28:12.059 against Channel Oaks water system for the appointment 00:28:12.068 --> 00:28:17.588 of a receiver. Um I personally, Pauline Jones. Met with 00:28:17.598 --> 00:28:21.769 Phyllis Brown, who was contracted by the PUC to ensure 00:28:21.779 --> 00:28:24.838 compliance on all billing and record keeping issues 00:28:24.848 --> 00:28:28.598 with managing the water system. Um I trained with her. 00:28:28.608 --> 00:28:31.269 I have been working with Channel Oaks Water System 00:28:31.279 --> 00:28:36.078 since October of 2021. When PGMS was managing the 00:28:36.088 --> 00:28:40.348 system. And is responsible for all of the violations 00:28:40.358 --> 00:28:44.380 that we had leading up to there, uh removal or walk 00:28:44.390 --> 00:28:49.029 away from the system. And um I have been instrumental 00:28:49.039 --> 00:28:51.910 in bringing the water system into compliance with the 00:28:51.920 --> 00:28:57.189 TCEQ, the Groundwater Commission and the PUC. Since 00:28:57.199 --> 00:29:00.880 um I took over the water system in February, February 00:29:00.890 --> 00:29:05.368 8th of 2023. Um I have been working through the legal 00:29:05.380 --> 00:29:08.910 issues. Surrounding the Brian Maxey, DBA Channel Oaks 00:29:08.920 --> 00:29:13.838 Water System. That currently owns the CCN. And the uh 00:29:13.848 --> 00:29:17.108 max the assets, the assets from the Mac, Brian Maxey 00:29:17.118 --> 00:29:20.509 estate were not distributed properly. To the heirs or 00:29:20.519 --> 00:29:23.890 beneficiaries before closing the estate. And Channel 00:29:23.900 --> 00:29:27.299 Oaks Water System CCN and all assets of the Channel 00:29:27.309 --> 00:29:29.789 Oaks Water System should have been transferred out 00:29:29.799 --> 00:29:33.930 of the DBA at Brian Maxey's death. Um Mary Maxey and 00:29:33.939 --> 00:29:36.358 Carolyn Maxey have both stated that they are not the 00:29:36.368 --> 00:29:39.858 owner or the operator of the water system. And Channel 00:29:39.868 --> 00:29:43.469 Oaks Water System, LLC has been managing and operating 00:29:43.479 --> 00:29:46.348 the water system, and has been providing adequate water 00:29:46.358 --> 00:29:50.239 service to water customers. Um We are committed to 00:29:50.250 --> 00:29:53.949 continuing to work directly with the PUC. To secure 00:29:53.959 --> 00:29:59.500 an entity qualified to take over the CCN. Thank you 00:29:59.509 --> 00:30:01.430 Uh We'll move into the witnesses. (item:11:55098, Commission Staff and Channel Oaks WS state they do not have any witnesses) Commission Staff 00:30:01.439 --> 00:30:04.430 do you have any witnesses? No, we do not. Ms. Jones, 00:30:04.439 --> 00:30:06.430 do you have any additional witnesses? No, I do not. 00:30:06.439 --> 00:30:08.578 Thank you. Commissioners, do you have any questions? 00:30:09.068 --> 00:30:11.410 Yes. I, I have a few questions. Oh, sorry. You said 00:30:15.309 --> 00:30:19.150 Commissioners. Oh, I apologize. (item:11:55098, Commissioner McAdam's has a question for Commission Staff) As to the issue of notice um are, are they 00:30:19.160 --> 00:30:21.799 required to be noticed? No. Okay. 00:30:24.699 --> 00:30:27.838 There will be (inaudible) one of the petition to appoint a reserve 00:30:27.880 --> 00:30:30.328 as follow. I understand. Yeah. Okay. 00:30:32.750 --> 00:30:37.000 Any other questions, Commissioners? I don't think so. Um, we'll move into 00:30:37.009 --> 00:30:37.890 closing statements. 00:30:48.890 --> 00:30:53.578 (item:11:55098, Closing statement from Mildred Anaele with Commission Staff) Once again, um Commissioners. We are requesting that 00:30:53.588 --> 00:30:56.430 the Commission issue an order to appoint TSWR as 00:30:56.439 --> 00:30:59.868 temporary manager until the receivership process is 00:30:59.880 --> 00:31:04.709 concluded at the appropriate court. Uh the evidence 00:31:04.719 --> 00:31:08.180 on the record, shows that COWS failed to comply with 00:31:08.189 --> 00:31:13.969 the Commission issued order uh, in Docket 54678. Not 00:31:13.979 --> 00:31:19.088 once but twice. Um which require COWS to identify the 00:31:19.098 --> 00:31:23.489 appropriate individual. Um they state that they did 00:31:23.500 --> 00:31:26.430 but they did not specifically say who was to manage. 00:31:26.439 --> 00:31:29.348 They listed people, but they did not list who was the 00:31:29.358 --> 00:31:30.949 manager. Um 00:31:32.588 --> 00:31:35.890 because of the continued ambiguity, uh ambiguity. 00:31:38.279 --> 00:31:43.019 Um that remains as to who is in charge um of ensuring 00:31:43.029 --> 00:31:47.769 the as who is in. Sorry. Let me restart that. No problem. 00:31:48.358 --> 00:31:51.949 Um because of the continued ambiguity that remains 00:31:51.959 --> 00:31:55.250 as to who is in charge. Of ensuring the continued operation 00:31:55.259 --> 00:31:58.009 of the utility and the provision of continuous and 00:31:58.019 --> 00:32:02.209 adequate service to the customers. And because CSR 00:32:02.588 --> 00:32:07.439 uh, CSWR stands willing and able to temporarily manage 00:32:07.449 --> 00:32:11.549 COWS, and for the benefit of the customers in general 00:32:11.608 --> 00:32:13.739 Commission Staff requests that the Commission issue 00:32:13.750 --> 00:32:17.789 an order appointing CSWR as temporary manager of COWS, 00:32:17.799 --> 00:32:22.189 effective today, June 15, 2023. Continuing until the 00:32:22.199 --> 00:32:24.568 Commission orders otherwise or until a receiver is 00:32:24.578 --> 00:32:28.140 appointed. Thank you. Miss Jones, do you have a closing 00:32:28.150 --> 00:32:33.838 statement? Yes. (item:11:55098, Closing statement from Pauline Jones with Channel Oaks WS) Um my only statement here. Is that um 00:32:34.140 --> 00:32:39.779 in February, CSWR we spoke with Sean Nichols and 00:32:39.789 --> 00:32:44.150 uh tried to have him take over the temporary management 00:32:44.160 --> 00:32:48.578 and operation of COWS. Um when, when he contacted Ms. 00:32:48.588 --> 00:32:52.049 Maxey back in February. Um they could have saved the 00:32:52.059 --> 00:32:57.229 homeowners and myself a lot of time and energy. But 00:32:57.239 --> 00:33:00.650 they were not willing to provide a licensed water operator 00:33:00.660 --> 00:33:04.259 or take over the management until they owned the utility. 00:33:04.500 --> 00:33:08.868 It is now in the statement from the uh that, that's 00:33:08.880 --> 00:33:15.049 in the docket. That Mr. uh Todd Thomas intends to purchase 00:33:15.059 --> 00:33:18.608 Channel Oaks through a STM proceeding. With the 00:33:18.618 --> 00:33:22.969 PUC, um he made that statement on June 1, in the 00:33:22.979 --> 00:33:27.118 docket filings. And my question is this if, if he is 00:33:27.130 --> 00:33:30.634 interested in purchasing in doing a sale transfer 00:33:30.644 --> 00:33:36.334 man, uh merger. Then why not allow us the opportunity 00:33:36.354 --> 00:33:39.625 as the water system owner of the CCN for the 00:33:39.634 --> 00:33:43.164 last 20 years. Although the PUC states that we don't 00:33:43.174 --> 00:33:48.005 own it because it's in Brian Maxey's name, instead of 00:33:48.015 --> 00:33:53.568 the LLC. Why not negotiate with us and let us. We're 00:33:53.578 --> 00:33:57.868 more than happy to do a sale transfer, merger and sign 00:33:57.880 --> 00:34:01.689 it over to CSWR. But I don't want to give 00:34:01.699 --> 00:34:05.390 it away. And if it's gonna go into receivership, then 00:34:05.660 --> 00:34:09.570 so be it. But I don't feel I need a temporary manager, 00:34:09.579 --> 00:34:14.809 to come in here and take over my business and run it. 00:34:14.820 --> 00:34:17.969 And for the property owners, I am providing that service 00:34:17.978 --> 00:34:20.878 for the property owners. I have been billing, I have 00:34:21.119 --> 00:34:24.840 put the TCEQ charges. I have done everything that 00:34:24.849 --> 00:34:28.280 the Public Utility Commission has asked me to do. And 00:34:28.289 --> 00:34:31.929 I don't see any reason. If they take it over with receivership, 00:34:31.938 --> 00:34:34.840 then so be it. We'll turn it over. But I don't see 00:34:34.849 --> 00:34:38.889 any reason to authorize them to come in and take over. 00:34:38.898 --> 00:34:42.800 And do what meter readings and billing? We're already 00:34:42.809 --> 00:34:47.648 doing that. So that's my statement. Thank you. If there's 00:34:47.659 --> 00:34:51.010 nothing else from anyone? One question of Staff. Has 00:34:51.019 --> 00:34:54.449 service meaningfully uh improved since this entire 00:34:54.458 --> 00:34:58.849 process began? I would like to ask um Celia (inaudible) 00:34:59.148 --> 00:35:04.159 to also step up. Great. But she'll have more information. 00:35:19.340 --> 00:35:21.409 Good morning. Will you please state your name for the 00:35:21.418 --> 00:35:24.438 record? Celia Eves for Commission Staff Division 00:35:24.449 --> 00:35:26.760 of Utility Outreach. I'm gonna swear you in as 00:35:26.769 --> 00:35:29.280 a witness. Uh, please raise your right hand. Do you 00:35:29.289 --> 00:35:31.250 swear, affirm to tell the truth, the whole truth and 00:35:31.260 --> 00:35:33.949 nothing but the truth in this proceeding? I do. Thank 00:35:33.958 --> 00:35:34.128 you. 00:35:35.769 --> 00:35:39.829 (item:11:55098, Commissioner McAdams' follow-up question to Commission Staff) Has the question is, has service meaningfully 00:35:39.840 --> 00:35:44.978 improved since the PUC process was initiated? (item:11:55098, Celia Eves with Commission Staff) Since the 00:35:44.989 --> 00:35:48.139 the PUC process, uh since we've uh have been working 00:35:48.148 --> 00:35:50.688 with the utility and stuff. You know, we, we have sent 00:35:50.699 --> 00:35:54.728 since Ms. Jones stated uh assistance contract. There are pending 00:35:54.739 --> 00:35:58.539 violations that we are aware of that are still pending 00:35:58.550 --> 00:36:01.119 with the Texas Commission on Environmental Quality. 00:36:01.530 --> 00:36:05.550 Um that I believe are, are still relevant issues at 00:36:05.559 --> 00:36:09.090 hand with regards to the continuous um an adequate 00:36:09.099 --> 00:36:11.840 service related to providing service to the customers. 00:36:12.010 --> 00:36:15.769 Um Ms. Jones stated that we, the division of utility 00:36:15.780 --> 00:36:19.800 outreach, as well as our public engagement, Mike Hogan and 00:36:19.809 --> 00:36:21.878 stuff. We actually attended a meeting, held a meeting 00:36:21.889 --> 00:36:27.260 with the customers of Channel Oaks Water. With regards 00:36:27.269 --> 00:36:32.360 to um a lot of, I guess concerns from the customers. 00:36:32.369 --> 00:36:37.090 About reliability, about understanding, about not understanding 00:36:37.099 --> 00:36:41.378 what was going on. But as well as issues with regards 00:36:41.389 --> 00:36:46.019 to how billing was occurring. As well as you know, 00:36:46.030 --> 00:36:49.418 who they needed, who was going to respond to specific 00:36:49.429 --> 00:36:51.780 requests for service. So there's a lot of, I guess 00:36:51.789 --> 00:36:55.000 customer concern with that regard. We actually attended 00:36:55.010 --> 00:36:58.469 that meeting. To try to make sure that we would clarify the 00:36:58.648 --> 00:37:01.789 PUC's jurisdiction. With regards to trying to work to 00:37:01.800 --> 00:37:04.128 ensure that there's continuous and adequate service. 00:37:04.277 --> 00:37:08.706 With regards to the fact that because there is an entity 00:37:08.717 --> 00:37:11.826 or someone out there. Representing that, you know, they 00:37:11.835 --> 00:37:14.126 are providing service for compensation. There's still 00:37:14.135 --> 00:37:18.967 the issue that this entity does not hold the CCN to 00:37:18.976 --> 00:37:24.416 provide service. And as the record will show, what's 00:37:24.427 --> 00:37:29.436 In the docket and stuff related to Docket 55098. 00:37:29.447 --> 00:37:32.914 And it's actually Item No. 2, Exhibit 2 and 00:37:32.923 --> 00:37:35.384 3. If you look at those exhibits, I think this 00:37:35.393 --> 00:37:39.063 is part of the concern. With regards to trying to determine 00:37:39.072 --> 00:37:42.463 what is going on and how we actually reach meaningful 00:37:42.474 --> 00:37:46.092 resolution for the customers. And ensure that there's 00:37:46.103 --> 00:37:48.793 continuous and adequate service. There's been a lot 00:37:48.802 --> 00:37:52.353 of unfortunately, in the emails was very lengthy email 00:37:52.364 --> 00:37:56.242 chain that's in that exhibit. With regards to who the 00:37:56.253 --> 00:38:01.000 owner is. The Maxey family has had an ongoing dispute 00:38:01.010 --> 00:38:05.110 about who actually is responsible for the utility. And 00:38:05.121 --> 00:38:08.581 who actually has the authority to potentially sell 00:38:08.590 --> 00:38:12.331 the assets of this utility. So the Division of Utility 00:38:12.340 --> 00:38:15.400 Outreach, we have reached out to numerous neighboring 00:38:15.409 --> 00:38:18.800 utilities. With regards to either doing temporary management, 00:38:18.811 --> 00:38:22.500 interest in the utility. But the question remains that 00:38:22.568 --> 00:38:26.217 even if we were to identify someone, potentially. There's 00:38:26.228 --> 00:38:28.847 still the issue of who would be authorized to actually 00:38:28.856 --> 00:38:31.376 transfer the assets. And because of that, you know 00:38:31.387 --> 00:38:34.947 there is concern. That are we going to have someone 00:38:34.958 --> 00:38:38.577 in place again to even address the transfer of the 00:38:38.586 --> 00:38:42.257 utility. But also address even some of the violations 00:38:42.268 --> 00:38:45.307 that are, that are related to what might be considered 00:38:45.318 --> 00:38:49.244 significant infrastructure improvements. For instance and again, 00:38:49.253 --> 00:38:54.753 this is not PUC, it's a Texas TCEQ compliance violation 00:38:54.764 --> 00:38:58.353 with regards to well capacity. So there are improvements 00:38:58.364 --> 00:39:02.485 there are issues. With regards to whether the lines 00:39:02.494 --> 00:39:05.304 are actually, that the lines actually are not properly buried. 00:39:05.313 --> 00:39:08.284 And so there's obviously infrastructure upgrades that 00:39:08.293 --> 00:39:11.144 need to be included and conducted with this utility. 00:39:11.264 --> 00:39:13.905 So it's important to identify someone who's actually 00:39:13.914 --> 00:39:17.391 going to have the ability to actually make those infrastructures 00:39:17.402 --> 00:39:19.451 improvement. To ensure that there's going to be continuous 00:39:19.460 --> 00:39:23.291 and adequate service to these customers. But again, 00:39:23.311 --> 00:39:25.731 with regards to trying to work to find a long term 00:39:25.740 --> 00:39:28.701 solution. You know, it potentially is again, someone 00:39:28.710 --> 00:39:31.740 needs to have the authority to actually hold the CCN. 00:39:31.751 --> 00:39:35.201 To legally be charging these customers and actually 00:39:35.210 --> 00:39:38.411 have the ability to invest in the needed infrastructure 00:39:38.501 --> 00:39:40.632 to ensure this continuous inadequate service. 00:39:44.329 --> 00:39:47.760 Anything else? Thank you Judge. (item:11:55098, ALJ adjourns hearing) And we are adjourned. Thank 00:39:47.769 --> 00:39:48.019 you. 00:39:52.829 --> 00:39:52.889 (silence) 00:40:09.090 --> 00:40:12.590 (item:11:55098, Chairwoman Jackson calls to adjourn merits hearing) Merit's Hearing in Docket 55098 is hereby adjourned 00:40:12.599 --> 00:40:14.969 at 10:12am. 00:40:17.329 --> 00:40:20.010 (item:11:55098, Chairwoman Jackson reconvenes open meeting) We will now reconvene the open meeting of the Public Utility 00:40:20.019 --> 00:40:26.039 Commission at 10:12am. Resuming with Docket No. 00:40:26.050 --> 00:40:32.148 11, with item 11, Docket 55098. Um, given what we've 00:40:32.159 --> 00:40:34.719 just heard, does anyone have any thoughts on this 00:40:35.079 --> 00:40:36.228 uh or a motion? 00:40:37.989 --> 00:40:40.378 (item:11:55098, Commissioner Cobos' thoughts on the hearing) Commissioner McAdams, thank you for asking those questions. 00:40:40.389 --> 00:40:42.820 I think it highlighted a lot of very important information. 00:40:43.349 --> 00:40:47.030 Um and, and thank you Sheila. For your um feedback 00:40:47.039 --> 00:40:49.938 I think, you know, there's. And I appreciate the deep 00:40:49.949 --> 00:40:53.590 desire by um, Ms. Jones. And to want to continue to 00:40:53.599 --> 00:40:57.139 operate the utility and, and, um you know their, 00:40:57.148 --> 00:40:59.199 their efforts and hard work. That they've you know 00:40:59.208 --> 00:41:04.000 put forth in trying to maintain this um, utility and 00:41:04.010 --> 00:41:06.579 and service to the customers. It just appears that 00:41:06.909 --> 00:41:09.668 there's still a lot of underlying issues here. With 00:41:09.679 --> 00:41:13.070 respect to the, the law and legalities of who, who's 00:41:13.079 --> 00:41:18.079 the CCN holder. And that's a fundamental issue for 00:41:18.099 --> 00:41:21.369 us, right? To ensure that we have a clear CCN holder 00:41:21.378 --> 00:41:25.739 that can um, be you know responsive to the Commission. 00:41:26.019 --> 00:41:31.688 That can um be responsible for um providing service 00:41:31.699 --> 00:41:34.550 to the customers, continuous and adequate service. 00:41:34.559 --> 00:41:37.909 All of those are very important um fundamental issues 00:41:37.918 --> 00:41:40.510 for the Commission to consider. And you know, there's 00:41:40.519 --> 00:41:43.699 obviously issues out there on um infrastructure and 00:41:43.708 --> 00:41:47.090 the well. And, and I think our primary consideration 00:41:47.099 --> 00:41:49.989 here is to ensure that these customers have continuous 00:41:50.000 --> 00:41:54.898 and adequate service. And um that, that's where I will 00:41:54.909 --> 00:41:57.579 come from with respect to reaching this decision. Even 00:41:57.590 --> 00:42:00.260 though it is a difficult decision, I respect the desire 00:42:00.269 --> 00:42:03.019 of, of the family and everybody to maintain the, the 00:42:03.030 --> 00:42:05.648 utility. But I think ultimately, I, I think I would 00:42:05.659 --> 00:42:12.099 be in favor of um appointing a temporary manager, uh 00:42:12.110 --> 00:42:15.949 CSWR Texas. To, to get us in the, in the 00:42:15.958 --> 00:42:19.639 right path forward um with, with these uh utility and 00:42:19.648 --> 00:42:22.208 the services and, and for the customers that are being 00:42:22.219 --> 00:42:23.280 served in this area. 00:42:25.128 --> 00:42:28.139 (item:11:55098, Commissioner Glotfelty's on the hearing) Yeah, I think I'd fall in the same area. Emotionally 00:42:28.148 --> 00:42:31.648 I, I think uh what the residents have done to pick 00:42:31.659 --> 00:42:36.699 up. Uh you know, a pretty challenging situation um 00:42:36.878 --> 00:42:41.539 is. I'd love to side with them to keep doing this until 00:42:41.750 --> 00:42:46.159 the court decides. But I don't think by law we can 00:42:46.168 --> 00:42:49.989 do that. I think our obligation is continuous and adequate 00:42:50.000 --> 00:42:55.750 service. That the law is very clear that our responsibility 00:42:55.760 --> 00:42:59.688 is to the consumers, not necessarily to that owner. 00:43:00.289 --> 00:43:06.148 And that uh you know, hopefully CSWR ends up doing 00:43:06.159 --> 00:43:09.260 a sale, merger, transfer and buys it. And in fact, if 00:43:09.269 --> 00:43:10.909 they become the temporary manager, they're going to 00:43:10.918 --> 00:43:14.139 get a head start on that by upgrading the system. And 00:43:14.148 --> 00:43:20.699 it's clear that with 6000, 6000 connections uh nearby. 00:43:20.708 --> 00:43:24.050 That they do have the adequate ability to run the water 00:43:24.059 --> 00:43:30.289 system. So um I, I'm supportive of uh of um appointing 00:43:30.300 --> 00:43:34.119 CSWR as a temporary manager. And that it should be 00:43:34.128 --> 00:43:37.699 indefinite since this is not an emergency. That 180 00:43:37.708 --> 00:43:42.590 day temporary managers is not applicable. And in fact 00:43:42.599 --> 00:43:45.300 I can go further and say that, you know, I believe 00:43:45.309 --> 00:43:49.510 that they should be paid $15 per water connection per 00:43:49.519 --> 00:43:53.010 month. And that we should waive the requirement regarding 00:43:53.019 --> 00:43:55.878 the temporary manager's duty to post financial assurance. 00:43:55.889 --> 00:43:58.139 And that we should direct OPDM to draft an 00:43:58.148 --> 00:44:01.280 order consistent with previous Commission orders and 00:44:01.289 --> 00:44:06.148 our discussion. Boy, that's framed very much like a motion. And I would, yes. The was the only thing 00:44:06.159 --> 00:44:08.958 I would add. And I so move. Well, the only thing I would add is I 00:44:08.969 --> 00:44:12.250 wanna, I wanna take notice. That um the utility has 00:44:12.260 --> 00:44:14.360 been referred to the Office of Attorney General for 00:44:14.369 --> 00:44:16.429 appointment of a receiver due to its violation of a 00:44:16.438 --> 00:44:20.099 Commission final order. Yeah, absolutely. Look, um 00:44:20.309 --> 00:44:23.829 (item:11:55098, Commissioner McAdams' thoughts on the hearing) Madam Chair, if I may. Where I fall on, this is my 00:44:23.840 --> 00:44:27.679 my question was somewhat leading. Uh when there is confusion 00:44:27.688 --> 00:44:31.809 about ownership and um the processes of business. At 00:44:31.820 --> 00:44:33.889 the end of the day, we fall back to that overarching 00:44:33.898 --> 00:44:35.679 mission in the water code, continuous and adequate 00:44:35.688 --> 00:44:39.760 service. It is an essential service. Water service 00:44:39.769 --> 00:44:41.699 is not something we should take any more lightly than 00:44:41.708 --> 00:44:47.489 electricity service. And, and so there has been ample 00:44:47.619 --> 00:44:52.289 room in the regulatory timetable. To try to address 00:44:52.300 --> 00:44:55.989 some of the deficiencies highlighted by these residences, 00:44:56.000 --> 00:45:00.168 by these consumers. And, and so I think in an effort 00:45:00.179 --> 00:45:03.168 to comply with our overarching mission, I would support 00:45:03.179 --> 00:45:06.378 the motion proposed by Commissioner Glotfelty. So if 00:45:06.389 --> 00:45:09.889 if that was a motion, I second that motion. As amended 00:45:09.938 --> 00:45:13.139 by Commissioner Cobos. In recognizing the Attorney General's 00:45:13.148 --> 00:45:16.489 actions. (item:11:55098, Motion on amendments from the hearing) Okay, very good. We have a motion and a second. 00:45:16.500 --> 00:45:19.309 All in favor, say aye. Aye. The motion passes. 00:45:22.128 --> 00:45:27.340 I don't have anything on Item 12, unless y'all do. Um Item 00:45:27.349 --> 00:45:31.648 13 was consented. I don't have anything for Item 14. 00:45:33.590 --> 00:45:37.829 Okay. Next up is Item 15. Mr. Journeay, will you please 00:45:37.840 --> 00:45:40.688 lay out this item? Are we gonna take that up later 00:45:41.128 --> 00:45:41.148 Madam Chair? 00:45:44.090 --> 00:45:48.398 Or alternatively um, if you wanna take it in order 00:45:48.409 --> 00:45:51.978 we would request that you take a short recess. Okay. 00:45:51.989 --> 00:45:55.820 Well, we can move on and go to uh Item 18. 00:45:58.688 --> 00:46:02.260 (item:18:54957, Settlement agreement relating to the City of Austin, dba Austin Energy) Item 18 is Docket 54957. It's a settlement agreement 00:46:02.269 --> 00:46:05.409 relating to the City of Austin, doing business as Austin 00:46:05.418 --> 00:46:09.750 Energy. Uh violations of PURA, Commission rules and 00:46:09.760 --> 00:46:13.030 ERCOT nodal protocols. That are related to scheduling 00:46:13.039 --> 00:46:16.389 operation and generation resources. A proposed order 00:46:16.398 --> 00:46:19.280 was filed on May 12, and I have a memo with proposed 00:46:19.289 --> 00:46:20.438 changes to the order. 00:46:22.579 --> 00:46:25.909 Have any thoughts on this one? Uh I'll take 00:46:25.918 --> 00:46:28.639 this one if I can Madam Chair. Um 00:46:30.579 --> 00:46:32.668 (item:18:54957, Commissioner McAdams' thoughts on settlement agreement) there is an issue I believe the Commission must address 00:46:32.679 --> 00:46:37.050 before final approval of this order. Primarily, whether 00:46:37.059 --> 00:46:39.949 it is appropriate to utilize a different methodology. 00:46:39.958 --> 00:46:43.360 Uh to discourage excess revenues collected by Austin 00:46:43.369 --> 00:46:46.349 Energy, other than the default method. Which currently 00:46:46.360 --> 00:46:51.739 exists in Commissions Rule 16 TAC 22.246, Subsection 00:46:51.750 --> 00:46:55.750 K. Uh based on the party statements um and ERCOT's 00:46:55.760 --> 00:46:58.800 memorandum indicating support for a different distribution 00:46:58.809 --> 00:47:03.199 method. I believe it is appropriate for the Commission 00:47:03.208 --> 00:47:07.260 to direct Commission Staff to open a subsequent proceeding 00:47:07.269 --> 00:47:11.418 to address this issue. Um I'm certainly open to further 00:47:11.429 --> 00:47:14.659 discussion amongst my colleagues. However, if everyone 00:47:14.668 --> 00:47:18.579 is in agreement, I have a motion. Ultimately, I believe 00:47:18.760 --> 00:47:21.619 ERCOT is, is certainly an organization that is manpower 00:47:21.628 --> 00:47:27.639 constrained. Um we want expeditious um uh resolution 00:47:27.869 --> 00:47:32.188 of this issue. Um for the money to, to be appropriately 00:47:32.199 --> 00:47:36.478 transferred. Uh if, if there is a quicker way um then 00:47:36.489 --> 00:47:40.119 we need to establish what that looks like. Um and, 00:47:40.128 --> 00:47:43.269 and that's kind of where my thinking is on the topic. 00:47:43.280 --> 00:47:44.820 Would welcome any input. 00:47:46.760 --> 00:47:50.329 I'm in agreement. Okay. Uh if you would entertain a motion 00:47:50.340 --> 00:47:52.978 Madam Chair. (item:18:54957, Motion to approve order as modified) I would move to approve this order as 00:47:52.989 --> 00:47:55.760 modified by the Commission Counsel memo and our discussion 00:47:55.769 --> 00:48:02.750 today. Uh and require Austin Energy to disgorge the $23,462.53 00:48:03.260 --> 00:48:07.550 in excess revenues to ERCOT. And direct Commission Staff 00:48:07.559 --> 00:48:10.889 to open up a second proceeding. To determine the appropriate 00:48:10.898 --> 00:48:14.429 methodology to distribute the disgorged excess revenues. 00:48:14.889 --> 00:48:17.898 Second. We have a motion and a second. All in favor, 00:48:17.909 --> 00:48:23.030 say aye. Aye. Motion passes. We don't have anything 00:48:23.039 --> 00:48:30.679 on Item. I don't have anything on 19 or 20. Uh, 20? 00:48:30.688 --> 00:48:34.579 Is, is that what we're talking about? 21? Got it, got it. 00:48:34.590 --> 00:48:39.039 Thank you. Okay. So next up is (item:21:53298, Chairwoman Jackson lays out discussion points on reliability standard and bridging) Item 21 our wholesale 00:48:39.050 --> 00:48:42.550 electric market design implementation project. Uh we 00:48:42.559 --> 00:48:45.329 have two topics that we're going to discuss today under 00:48:45.340 --> 00:48:48.619 this project. The reliability standard and bridging 00:48:48.628 --> 00:48:52.139 solutions. Um let's talk about the reliability standard 00:48:52.148 --> 00:48:55.898 first and then we'll move on to bridging. Uh we have 00:48:55.909 --> 00:48:58.679 uh Woody Rickerson here with ERCOT. To provide us a 00:48:58.688 --> 00:49:02.688 preview of his presentation to the ERCOT Board on the 00:49:02.699 --> 00:49:06.188 reliability standard study, preliminary results. This 00:49:06.199 --> 00:49:08.739 is Project 53298. 00:49:10.739 --> 00:49:13.708 Um ERCOT is seeking confirmation from the Commission 00:49:13.719 --> 00:49:15.949 that we are aligned with their analytical approach. 00:49:16.010 --> 00:49:18.340 And so we can move forward and develop a list of future 00:49:18.349 --> 00:49:22.329 resource, mix scenarios for our evaluation. Uh thank 00:49:22.340 --> 00:49:26.378 you so much, Woody for being here today. Um and giving 00:49:26.389 --> 00:49:29.250 the presentation. (item:21:53298, Woody Rickerson with ERCOT, previewing ERCOT Board presentation) Morning Commissioners. I'll run through 00:49:29.260 --> 00:49:35.099 this very quickly. So if you uh put it on Slide 3. 00:49:35.780 --> 00:49:41.599 The uh the, the study is centered around the year 2026. 00:49:42.199 --> 00:49:46.199 So it uses a resource portfolio from the CDR that's 00:49:46.208 --> 00:49:49.250 based in 2026. So that would be all of our existing 00:49:49.260 --> 00:49:52.510 generation. Plus any new generation that meets the CDR 00:49:52.519 --> 00:49:58.719 standards for being implemented. We um we did limit 00:49:58.728 --> 00:50:02.909 wind, solar and batteries to their ELCC, their effective 00:50:02.918 --> 00:50:05.030 Load carrying capacity. Which is different than the 00:50:05.039 --> 00:50:11.228 CDR. And then we also uh remove some thermal capacity 00:50:11.239 --> 00:50:14.458 For the sake of modeling. So that we could have a range 00:50:14.469 --> 00:50:20.289 of results in the study. And we added in a combustion 00:50:20.300 --> 00:50:25.590 turbine capacity. To give us 24 different reserve margin 00:50:25.599 --> 00:50:26.228 levels. 00:50:27.739 --> 00:50:32.059 And then we evaluated each of those 24 levels for frequency 00:50:32.070 --> 00:50:34.659 duration and magnitude of events after running a Monte 00:50:34.668 --> 00:50:40.019 Carlo simulation. So that's the uh that's an overview 00:50:40.030 --> 00:50:45.409 of the preliminary results. If you look on um and like 00:50:45.418 --> 00:50:47.860 I said, these are all based on the frequency magnitude 00:50:47.869 --> 00:50:50.599 and duration framework that we've discussed before. 00:50:50.688 --> 00:50:55.309 On Slide 5, you'll see an overview. So we didn't 00:50:55.320 --> 00:51:00.519 provide all the results. We provided 5 of the 24 00:51:00.530 --> 00:51:04.719 scenarios and those are highlighted on Slide 5. 00:51:06.860 --> 00:51:11.369 And then Slides 6-10, provide the details 00:51:11.378 --> 00:51:14.010 for each of those 5 scenarios. 00:51:16.139 --> 00:51:21.719 And you can see as reserve margin increases the, the 00:51:21.728 --> 00:51:26.219 frequency of events becomes less frequent, frequent 00:51:26.228 --> 00:51:28.289 that you have in events. And the duration of 00:51:28.300 --> 00:51:30.679 will also go down, which is what you would expect as 00:51:30.688 --> 00:51:33.570 the reserve margin goes up. And that's illustrated 00:51:33.958 --> 00:51:38.269 in those Slides 6-10. And then the last part of 00:51:38.280 --> 00:51:42.458 the, the preliminary results was uh Slide 11. It talks 00:51:42.469 --> 00:51:46.340 about an exceedance probability. Exceedance probability 00:51:46.349 --> 00:51:50.800 is simply for each of the scenarios you can take the 00:51:50.809 --> 00:51:56.510 events. And an event is when the Load exceeds the capacity 00:51:57.039 --> 00:51:59.320 of more than 1000 Megawatt. So it's a, a Load sheed 00:51:59.329 --> 00:52:03.389 event. You take for each of the scenarios, you would 00:52:03.398 --> 00:52:09.208 rank the events, from the most impactful to the least 00:52:09.219 --> 00:52:12.739 impactful. And then one way of dealing with the most 00:52:12.750 --> 00:52:15.469 impactful events is you can have an exceedance probability. 00:52:16.139 --> 00:52:20.260 Where you can say I'm willing to overlook 1% of the 00:52:20.269 --> 00:52:25.119 worst events or maybe 2%. And that's one way of dealing 00:52:25.128 --> 00:52:28.478 with these outlier events and a probability distribution. 00:52:29.250 --> 00:52:32.030 So you're gonna have some tail events that are much 00:52:32.039 --> 00:52:35.168 worse than the vast majority of the results. And so 00:52:35.300 --> 00:52:38.039 part of the study is how do you, how do you deal 00:52:38.050 --> 00:52:41.869 with those? Now, one option is to say we're gonna include 00:52:41.878 --> 00:52:44.478 all of them, that's an option. And so that would be 00:52:44.489 --> 00:52:46.728 an exceedance probability of zero. We're gonna include 00:52:46.739 --> 00:52:50.340 everything. A 1% would say we're going to take out 00:52:50.739 --> 00:52:54.869 1% of the most impactful and build our standard below 00:52:54.878 --> 00:52:58.860 that. You can think of that 1% as a 1 in 100 00:52:58.869 --> 00:53:04.369 year event or maybe 2%. And so that's what we're, uh 00:53:04.378 --> 00:53:06.949 that's where we are at this point. Is we produce these 00:53:06.958 --> 00:53:09.708 preliminary results. We're ready to, to go forward 00:53:09.719 --> 00:53:15.079 with some more robust analysis. We'd like to have confirmation 00:53:15.090 --> 00:53:19.030 that the duration, frequency, magnitude framework that 00:53:19.039 --> 00:53:21.938 we're using. Is, is what we want to continue to use. 00:53:23.000 --> 00:53:26.199 And then we'd like to be able to bring back some of 00:53:26.208 --> 00:53:29.688 these scenarios and including the scenarios and different 00:53:29.699 --> 00:53:33.110 exceedance probabilities at different reserve margins 00:53:33.289 --> 00:53:37.159 and bring that back. And with those include cost, the 00:53:37.168 --> 00:53:41.510 cost associated with adding the capacity necessary 00:53:41.789 --> 00:53:44.010 to make each of those reserve margins work. 00:53:45.659 --> 00:53:48.398 So that's, that's what that's the guidance we're asking 00:53:48.409 --> 00:53:49.148 for at this point. 00:53:51.849 --> 00:53:51.869 Woody? 00:53:53.418 --> 00:53:55.708 (item:21:53298, Commissioner Cobos' thoughts on ERCOT presentation) Thank you so much for this preliminary overview of 00:53:55.719 --> 00:53:58.648 where, where you're headed. Obviously, this is important 00:53:58.659 --> 00:54:02.878 um work. We are required to set a reliability standard 00:54:03.039 --> 00:54:06.340 both by Senate Bill 3 and now, you know, House 00:54:06.349 --> 00:54:11.010 Bill 1500. Is definitely in alignment with this as well. 00:54:11.019 --> 00:54:14.309 And it's very important that we do a very robust review 00:54:14.320 --> 00:54:17.050 of the reliability standard. And I think that moving 00:54:17.059 --> 00:54:19.458 beyond just the 1 in 10 is very important. And I 00:54:19.469 --> 00:54:21.438 think that's the effort that you're trying to move 00:54:21.449 --> 00:54:25.429 in that direction with respect to duration and magnitude. 00:54:25.889 --> 00:54:28.860 And also I think you have referenced in here, you're 00:54:28.869 --> 00:54:31.409 also looking at energy sufficiency and you can look 00:54:31.418 --> 00:54:34.590 at unexpected expected, unserved energy. Which is also 00:54:34.599 --> 00:54:37.938 important. That is a, a metric that many of the ISOs 00:54:37.949 --> 00:54:42.969 out and nationally are looking at as well. Um with 00:54:42.978 --> 00:54:45.878 respect to the um 00:54:47.659 --> 00:54:50.668 I guess the, the overall direction. I, I think I'm comfortable 00:54:50.679 --> 00:54:53.128 with, with those metrics. And, and they're very capacity 00:54:53.139 --> 00:54:55.760 driven. But I think looking at the energy metric is 00:54:55.769 --> 00:54:59.958 also important. Um the exceedance probabilities, I think 00:54:59.969 --> 00:55:04.010 we can spend some time deliberating on that. Um but 00:55:04.019 --> 00:55:08.000 um how will you come up with the cost of the different 00:55:08.010 --> 00:55:11.340 reliability standards? (item:21:53298, Commissioner Cobos has dialogue with Woody Rickerson of ERCOT) ERCOT methodology 00:55:11.349 --> 00:55:14.619 of, of determining what the different metrics will 00:55:14.628 --> 00:55:18.909 cost? Well, the different levels required a different 00:55:18.918 --> 00:55:22.329 reserve margin which requires capacity to be added. 00:55:22.340 --> 00:55:25.179 And we'll go back to the E3 study and align our 00:55:25.188 --> 00:55:28.050 results with the E3 study where it talks about 00:55:28.059 --> 00:55:30.889 the, the cost to add additional capacity to the market. 00:55:31.099 --> 00:55:34.688 Yeah, that, that's what I'm wondering. Um okay, so 00:55:37.898 --> 00:55:41.019 that, that's an interesting perspective on that. So 00:55:41.030 --> 00:55:42.929 when you say going back to the E3 study, what 00:55:42.938 --> 00:55:44.978 exactly are you referring to? We'll make sure that 00:55:44.989 --> 00:55:49.000 our cost estimates for additional capacity are in alignment 00:55:49.010 --> 00:55:52.148 with what E3 did? Okay. So are you talking about 00:55:52.159 --> 00:55:55.059 the cost of new entry and the 935 for a CT? 00:55:55.878 --> 00:55:58.739 Yes. Okay. So that, that's where I think we need to peel 00:55:58.750 --> 00:56:02.909 back a little bit. Because I think based on a lot of 00:56:02.918 --> 00:56:06.369 discussions that happened this Session. That, that number 00:56:06.378 --> 00:56:11.659 may be drastically low. Um and I say that because um 00:56:12.059 --> 00:56:15.708 our number in the protocols is 105,000. And I 00:56:15.719 --> 00:56:19.699 know that ultimately, a lot of markets out there conduct 00:56:19.708 --> 00:56:22.478 an extensive cost of new entry study that they do on 00:56:22.489 --> 00:56:27.000 a periodic basis. And update in the interim along the 00:56:27.010 --> 00:56:31.760 way. Because the cost of new entry figure is based 00:56:31.769 --> 00:56:37.110 on deep analysis of capital costs, labor, equipment. 00:56:37.829 --> 00:56:40.360 These days, you'd have to take into account inflation, 00:56:40.369 --> 00:56:45.219 supply chain. So I, I'm just I'm a little bit, you 00:56:45.228 --> 00:56:49.300 know, because also House Bill 1500. Requires us to go 00:56:49.309 --> 00:56:52.918 back and calculate across a new entry in the net cone. 00:56:53.869 --> 00:56:56.909 I think that it's, you know, we gotta be careful about 00:56:56.918 --> 00:57:00.320 what we're using as cost for those metrics. And so 00:57:00.329 --> 00:57:03.050 I just want to provide you with that perspective. Because 00:57:03.059 --> 00:57:06.679 we have now House Bill 1500 that says we gotta calculate 00:57:06.699 --> 00:57:11.070 a net cone. And then we have all this other data through 00:57:11.079 --> 00:57:14.619 our extensive deliberations and, and look at cone. That 00:57:14.628 --> 00:57:19.148 we have to take into consideration. So um I know that 00:57:19.159 --> 00:57:22.449 the E3 study has some figures. But I'm not sure 00:57:22.458 --> 00:57:26.728 that those are gonna be the exact figures from my perspective. 00:57:26.739 --> 00:57:29.269 Well, we'll be very transparent in what we use and 00:57:29.280 --> 00:57:31.559 we can adjust that. That's almost almost an outcome 00:57:31.570 --> 00:57:33.989 of the study. It's not a uh it's not an input to 00:57:34.000 --> 00:57:36.860 the study. So as we look at the different reserve margins 00:57:36.869 --> 00:57:40.168 and we bring back to you different frequency durations. 00:57:40.820 --> 00:57:41.389 Um 00:57:43.378 --> 00:57:48.139 when we provide those, it will come with a amount of 00:57:48.148 --> 00:57:50.750 generation that needs to be added to achieve that. 00:57:51.389 --> 00:57:55.840 And then fixing a price to that is something uh obviously 00:57:55.849 --> 00:57:57.789 we'll be very transparent on what we use and we can 00:57:57.800 --> 00:58:01.289 change that. And I think you also uh it's gonna be 00:58:01.300 --> 00:58:06.019 tricky, because um there will be some generation retirements. 00:58:07.340 --> 00:58:11.050 And so uh the amount of generation that has to be added 00:58:11.059 --> 00:58:14.398 to attain a certain frequency magnitude and duration 00:58:14.628 --> 00:58:18.280 will be affected by obviously what retires in that 00:58:18.289 --> 00:58:21.250 same time period. And so I think there's gonna have 00:58:21.260 --> 00:58:23.969 to be a lot of thought going into uh what do you 00:58:23.978 --> 00:58:26.429 include in those final numbers as far as the additional 00:58:26.438 --> 00:58:30.719 capacity. Because some generation will inevitably retire 00:58:31.179 --> 00:58:35.340 and you have to replace that as well. Because of? Well 00:58:35.349 --> 00:58:37.409 for various reasons, some of this generation is very 00:58:37.418 --> 00:58:41.489 old, there are also some impending uh environmental 00:58:41.500 --> 00:58:44.179 regulations that may cause them to retire as well. 00:58:44.760 --> 00:58:48.119 So economic and regulatory impacts. So that'll have 00:58:48.128 --> 00:58:51.389 to be factored into this. But the, the value of the 00:58:51.398 --> 00:58:56.019 study is to say. For a reserve margin, this is the main 00:58:56.070 --> 00:58:59.099 two frequency and duration that you can expect for 00:58:59.110 --> 00:59:03.570 outages. And it's important to remember that for any 00:59:03.579 --> 00:59:08.208 given reserve margin, those numbers will change based 00:59:08.219 --> 00:59:12.949 on the composition of the generation fleet inside that 00:59:12.958 --> 00:59:13.769 reserve margin. 00:59:15.409 --> 00:59:19.699 So I mean, if you have a reserve margin that's composed 00:59:19.708 --> 00:59:23.539 the extreme would be all solar. Lower accredited units. 00:59:23.739 --> 00:59:26.250 All solar, you're obviously with nothing else, you're 00:59:26.260 --> 00:59:29.978 obviously gonna have a lot more events. Because at night 00:59:29.989 --> 00:59:34.099 you would have uh you know, outages every night. So 00:59:34.418 --> 00:59:38.070 the mix of generation that's in there is, is an important 00:59:38.079 --> 00:59:40.389 part of the reserve margin. And as we go forward in 00:59:40.398 --> 00:59:44.239 the future and then the portfolio mix changes, we'll 00:59:44.250 --> 00:59:47.119 have to continue to do this study. To make sure that 00:59:47.128 --> 00:59:50.889 we account for the new portfolio mix that's in there. 00:59:53.489 --> 00:59:56.619 (item:21:53298, Commissioner McAdams has dialogue with Woody Rickerson of ERCOT) So, so Woody uh just a kind of technical question for 00:59:56.628 --> 01:00:00.360 you. On, on Slide 12. When we look at those uh, uh 01:00:00.820 --> 01:00:05.378 exceedance probabilities. Um I assume on, on your dot 01:00:05.389 --> 01:00:09.929 plot chart. Uh the dot way to the right, way up top 01:00:09.938 --> 01:00:14.809 uh is Winter Storm Uri. That's at 15 hours of duration 01:00:14.820 --> 01:00:22.289 and uh 19,000 Megawatt hours of unserved energy. Actually 01:00:22.300 --> 01:00:25.739 that, that event would more closely be associated with 01:00:25.750 --> 01:00:30.719 the 2011 storm. That's 2011. That's my question. Okay. 01:00:30.728 --> 01:00:34.829 So that's a 1% exceedance probability event. And so 01:00:34.840 --> 01:00:38.958 what I want to be very clear about what. The treatment 01:00:38.969 --> 01:00:46.289 of Winter Storm Uri in this, in this time. So we even as you all 01:00:46.300 --> 01:00:49.369 know, we have implemented the weatherization standards 01:00:49.378 --> 01:00:52.579 since Winter Storm Uri. So how do you account for 01:00:52.590 --> 01:00:58.010 the effect the winterization efforts? How do you account 01:00:58.019 --> 01:01:01.409 for that in this study? So if you just use Winter Storm Uri 01:01:01.579 --> 01:01:05.860 as a historical marker. And put it with 2011 and you 01:01:05.869 --> 01:01:09.659 completely ignore the weatherization effects that are 01:01:10.699 --> 01:01:14.449 the effect the weatherization standard has had on reliability. 01:01:14.800 --> 01:01:19.590 Then you're going to, these graphs would look much worse. 01:01:20.809 --> 01:01:27.039 So Winter Storm Uri was left out that 72 hour outage 01:01:27.050 --> 01:01:31.898 of 20,000 megawatts, it's not in here. Because we included 01:01:31.909 --> 01:01:36.599 the weather. We, we, we didn't include it so that we 01:01:36.610 --> 01:01:39.208 would take into effect the, the weatherization that 01:01:39.219 --> 01:01:41.820 we have done, but 2011 was in there. 01:01:43.599 --> 01:01:45.809 Either way, you've got to, you've got to fill out the 01:01:45.820 --> 01:01:49.559 dot plot. Um with, with tail events included for right 01:01:49.570 --> 01:01:52.978 now, just so that we may see the concentration on, 01:01:52.989 --> 01:01:56.389 on where it's falling. And I think if you look at Slide 01:01:56.398 --> 01:02:00.429 17, you can see uh there's an explanation there of 01:02:00.438 --> 01:02:03.119 the bottling treatment of extreme winter storm events. 01:02:03.159 --> 01:02:07.539 Yeah. So, so how, how do we quantify what the next Uri 01:02:07.820 --> 01:02:12.050 is? That includes our weatherization and the weatherization 01:02:12.059 --> 01:02:14.050 of the pipeline system? 01:02:16.559 --> 01:02:21.039 What is that 1 in 100 year event look like? That's part of 01:02:21.050 --> 01:02:24.429 the next steps in the study. Is, is taking direction 01:02:24.438 --> 01:02:28.610 on, on how to account for, how effective. Not only the 01:02:28.619 --> 01:02:32.208 weatherization of the plants, but also the weatherization 01:02:32.219 --> 01:02:36.458 of the gas delivery system in fuel. And firm fuel. And firm fuel is 01:02:36.469 --> 01:02:39.039 another one. Exactly. So those will need to be factored 01:02:39.050 --> 01:02:41.530 into this as well. And so those are all subsequent 01:02:41.579 --> 01:02:44.519 areas that have to be factored into this. So these 01:02:44.530 --> 01:02:46.889 were preliminary results. That kind of gives everyone 01:02:46.898 --> 01:02:51.070 a feel for what we can produce? What the model can 01:02:51.079 --> 01:02:56.659 produce? Um how the framework would work. Um how are 01:02:56.668 --> 01:02:59.539 the, the different legs of the framework relate to 01:02:59.550 --> 01:02:59.929 each other? 01:03:03.139 --> 01:03:06.478 So point of clarification, I was you know, flipping 01:03:06.489 --> 01:03:09.559 to page. The Slide 12 very fast and didn't quite catch 01:03:09.570 --> 01:03:11.708 this picture. (item:21:53298, Commissioner Cobos has follow-up dialogue with Woody Rickerson of ERCOT) But, you know, Commissioner McAdams 01:03:12.300 --> 01:03:15.550 um was asking about the outlier with the 1%. So you're 01:03:15.559 --> 01:03:22.309 saying 2011 was falls in the 1%? 2011 would fall 01:03:22.320 --> 01:03:24.849 in that 1. No. Well, 01:03:26.789 --> 01:03:29.179 so I need you to be accurate on that Woody 01:03:32.458 --> 01:03:37.989 2011 event influenced all of these results. 01:03:38.000 --> 01:03:43.918 Sure. Okay because it, it created the outage rates that 01:03:43.929 --> 01:03:48.500 were used in the Monte Carlo simulations. Okay. So it's 01:03:49.139 --> 01:03:53.050 the 2011 event is not modeled as an event in, in this. 01:03:53.510 --> 01:03:55.809 It's not gonna show up as a single dot here. You can't 01:03:55.820 --> 01:03:58.188 look at a single dot and say that's the 2011 event. 01:03:58.199 --> 01:04:03.119 The 2011 event influenced all these events. If we had 01:04:03.128 --> 01:04:05.958 included Uri, it would have influenced all of these 01:04:05.969 --> 01:04:09.648 events as well. So I can't look at a single dot and 01:04:09.659 --> 01:04:12.869 say that one is that single event represents Winter 01:04:12.878 --> 01:04:16.918 Storm Uri. I can show you events that were similar 01:04:16.929 --> 01:04:22.378 to Winters Storm Uri. But so, so that when you do 01:04:22.389 --> 01:04:25.918 run the Monte Carlo simulation, you're running uh random 01:04:25.929 --> 01:04:28.579 draws from a bunch of different things and some of 01:04:28.590 --> 01:04:30.918 them produce events and some of them don't. And then 01:04:30.929 --> 01:04:34.360 when they do produce events, we chart it. (item:21:53298, Commissioner McAdams has follow-up dialogue with Woody Rickerson of ERCOT) But in, in 01:04:34.369 --> 01:04:37.610 your view, the exceedance probability most closely 01:04:37.619 --> 01:04:45.090 aligns with a 2011 in the 1%, uh range 01:04:48.260 --> 01:04:50.889 of the simulations. Again, given the type of failures 01:04:50.898 --> 01:04:52.668 that were experienced and the type of weather conditions 01:04:52.679 --> 01:04:56.019 that were present. It would depend on the reserve margin. 01:04:56.289 --> 01:05:00.679 So for any given reserve margin, you can have a 1% 01:05:00.708 --> 01:05:03.789 exceedance probability. So if you're looking at some 01:05:03.800 --> 01:05:07.019 of the high reserve margins maybe uh like you see 01:05:07.030 --> 01:05:07.708 on 01:05:09.510 --> 01:05:15.340 Slide 10. Which is a reserve margin that produces a 01:05:15.349 --> 01:05:18.280 loss of Load event once every 143 years, which is a 01:05:18.289 --> 01:05:21.938 very high reserve margin. Uh the 1% of events that 01:05:21.949 --> 01:05:25.039 would be excluded by 1% would be much less. Than they 01:05:25.050 --> 01:05:29.648 would be at a uh a very low reserve margin. Like on 01:05:29.659 --> 01:05:33.800 Slide 6, where you have a reserve margin of 9%. Right. 01:05:34.679 --> 01:05:37.349 So that's the way to look at those that 1% exceedance 01:05:37.360 --> 01:05:40.199 probability. Now, if you were to go back and look at 01:05:40.208 --> 01:05:43.780 2011 and say, let's have a reserve margin that looks 01:05:43.789 --> 01:05:47.679 just like what we had in 2011. Then I could relate 01:05:47.688 --> 01:05:53.619 it to the actual event to, to adopt that uh would be 01:05:53.628 --> 01:05:56.938 correspond with the 2011 circumstances. Well, that's 01:05:56.949 --> 01:06:00.010 not included in this study. Can, can you contextualize 01:06:00.019 --> 01:06:02.898 at this point, I won't press you too hard. Uh to a 01:06:02.909 --> 01:06:05.780 0.1 loss of Load equilibrium event which you 01:06:05.789 --> 01:06:09.389 have modeled here. At somewhere around 18% reserves 01:06:09.628 --> 01:06:13.648 Uh again at 2026. And then the CDR we're showing we're 01:06:13.659 --> 01:06:20.668 gonna have 44% reserves in 2026. So look at slide um 01:06:25.449 --> 01:06:29.878 it's in the appendix. Yeah, I saw it. It's like 18.7. 01:06:30.168 --> 01:06:35.869 So those CDR says in 2026, 42.4% reserve margin. But 01:06:35.878 --> 01:06:40.239 now if you factor in the ELCCS for wind, solar 01:06:40.250 --> 01:06:43.478 and batteries. That drops down to 18.7%. 01:06:45.119 --> 01:06:48.398 So remember we can't use ELCCs in the CDR 01:06:48.409 --> 01:06:50.539 yet because we haven't changed the protocol. Right. 01:06:51.550 --> 01:06:55.860 So if you adjust the CDR 42.4% reserve margin to use 01:06:55.869 --> 01:07:01.128 ELCC, then you get 18.77% which is very close 01:07:01.139 --> 01:07:05.280 to Slide No. 8. So we're meeting our standard? 01:07:05.289 --> 01:07:07.728 We're almost sticking the landing? Right. And I think 01:07:07.739 --> 01:07:10.570 the important part to look at when you look at Slide 01:07:10.579 --> 01:07:14.199 8. Which is effectively what we'll have in 2026 01:07:15.829 --> 01:07:19.119 is look at some of those outlier events are those outlier 01:07:19.128 --> 01:07:22.760 events acceptable. Is that the magnitude of what you 01:07:22.769 --> 01:07:25.489 see there is that acceptable? And this is something 01:07:25.500 --> 01:07:29.039 we've always had at a 1 in 10 reserve market. And 01:07:29.050 --> 01:07:31.469 that's why we are moving to this new framework where 01:07:31.478 --> 01:07:35.159 we think about duration and we think about magnitude. 01:07:35.168 --> 01:07:38.389 Because frequency by itself has always at, at a 1 01:07:38.398 --> 01:07:41.668 in 10, we've always had these outlier events that were 01:07:41.679 --> 01:07:46.010 possible at 1 in 10. So this now informs us what 01:07:46.019 --> 01:07:48.760 the magnitude, what the duration of those events could 01:07:48.769 --> 01:07:49.119 be. 01:07:54.059 --> 01:07:55.989 (item:21:53298, Commissioner Glotfelty has dialogue with Woody Rickerson of ERCOT) I, I have a couple of questions if you don't mind. 01:07:56.280 --> 01:08:01.750 Um so uh I, I appreciate uh what you're doing here. 01:08:01.760 --> 01:08:06.159 I mean, I think y'all are um challenged with this just 01:08:06.168 --> 01:08:08.269 like every other part of the country is and I appreciate 01:08:08.280 --> 01:08:12.329 your work. And uh, uh I, I feel like you must be 01:08:12.340 --> 01:08:14.619 the weatherman. Where you're gonna get it wrong 100% 01:08:14.628 --> 01:08:16.829 of the time. But uh, we won't hold it against you. 01:08:16.838 --> 01:08:20.930 I promise you. It's a uh this is a academic exercise 01:08:20.939 --> 01:08:22.989 to figure out how we set the policy and I appreciate 01:08:23.000 --> 01:08:27.259 your efforts. Um is the CDR, the right beginning spot 01:08:27.270 --> 01:08:31.979 for this? Yes. Are all the inputs on the CDR, the right beginning 01:08:31.989 --> 01:08:34.449 for this. I believe. So. I mean, the CDR takes into 01:08:34.458 --> 01:08:36.939 account a generation that hasn't been built yet. That 01:08:36.949 --> 01:08:41.229 has a pretty sure chance of being built. Um It's our 01:08:41.239 --> 01:08:44.208 best weather forecast. Our, our best Load forecast 01:08:44.220 --> 01:08:46.680 going forward takes into account all the growth that 01:08:46.689 --> 01:08:48.949 we know of. Does it take into account a certain extent 01:08:48.958 --> 01:08:52.739 of ability as well, because of the Renewable Accreditation? 01:08:52.810 --> 01:08:57.048 It, it does not take into account durability, but we have 01:08:57.060 --> 01:08:59.119 rules in place. Oh, sorry. 01:09:01.128 --> 01:09:04.588 Go on Woody, I feel like this is a workshop. But we 01:09:04.600 --> 01:09:08.838 do have rules in place to make, make sure that deliver 01:09:08.899 --> 01:09:12.779 is there for our dispatchable units. And keep in mind we're 01:09:12.789 --> 01:09:18.838 talking about, you know, derating the ELCC takes the 01:09:18.850 --> 01:09:18.878 uh 01:09:20.788 --> 01:09:25.738 wind and solar play numbers well down, right 01:09:27.377 --> 01:09:31.809 Okay. Um second question. Um Does this take into consideration 01:09:31.818 --> 01:09:32.757 deliverability? 01:09:35.378 --> 01:09:41.500 Oh, I think that was answered. Um is uh so I see 01:09:41.509 --> 01:09:43.979 in the server model, we take out 8000 megawatts of 01:09:43.989 --> 01:09:48.659 coal. Right. And I think there's a question on that 01:09:48.668 --> 01:09:52.029 in my mind. And clearly that's a guesstimate based upon 01:09:52.039 --> 01:09:57.279 economics and, and epa regulations and such. Um if 01:09:57.289 --> 01:10:00.128 we created some sort of a backstop. To keep those megawatts 01:10:00.140 --> 01:10:06.128 in? Does that um change the math quite dramatically 01:10:06.140 --> 01:10:08.819 do you think? No, I don't think it does at all actually 01:10:08.829 --> 01:10:11.750 Uh if you look at um where is that? 01:10:13.298 --> 01:10:14.479 There is a uh 01:10:16.890 --> 01:10:24.560 slide 18. Mhm. Yeah. So taking 16,000 megawatts out 01:10:24.569 --> 01:10:29.020 of the generation stack is strictly a modeling exercise 01:10:29.489 --> 01:10:32.668 because we want to be able to produce this table. You 01:10:32.680 --> 01:10:36.378 see on Slide 18. That includes reserve margins as low 01:10:36.390 --> 01:10:40.619 as 9%. So the only way to do that is to remove 01:10:40.628 --> 01:10:43.640 some generation. Okay. Otherwise, if we hadn't removed 01:10:43.649 --> 01:10:45.850 the generation. If we kept it all in there, then this 01:10:45.859 --> 01:10:49.168 table would only be half as big, it would start at 01:10:49.180 --> 01:10:52.600 18%. So we wanted to see what it looked like at 9%. 01:10:52.798 --> 01:10:55.668 So this isn't a forecast that 8000 megawatts is gonna 01:10:55.680 --> 01:10:59.359 to be removed. It's simply a bottling exercise so that 01:10:59.369 --> 01:11:01.838 we can get some low reserve margins and some high reserve 01:11:01.850 --> 01:11:04.680 margins so that we can look at the three pillars at 01:11:04.689 --> 01:11:07.548 those reserve margins to see how reliability is. I 01:11:07.560 --> 01:11:11.430 think that, but, but is it isn't reliability changed 01:11:11.439 --> 01:11:15.029 if you have? I mean, maybe you're not, maybe I'm not 01:11:15.039 --> 01:11:17.560 totally understanding that and that is you're just 01:11:17.569 --> 01:11:20.509 you're just taking out a number, right? So in the model 01:11:20.520 --> 01:11:26.140 it's not a um well I, I guess this is my question. 01:11:26.149 --> 01:11:29.100 If we're doing ELCC on the, on the renewable 01:11:29.109 --> 01:11:34.310 resources. Are we doing some sort of a forced outage 01:11:34.319 --> 01:11:37.250 rate on these thermals? So that we get a apples and 01:11:37.259 --> 01:11:40.588 apples comparison. Yes. But that will show up, that will show 01:11:40.609 --> 01:11:42.409 up in the, in the, in the model, in the, in the 01:11:42.418 --> 01:11:44.869 random draws. And so really the difference that you're 01:11:44.878 --> 01:11:49.869 talking about is um let's say we take the 2 18% nothing 01:11:49.878 --> 01:11:53.239 retires and we have 18.77% reserve margin or we have 01:11:53.250 --> 01:11:56.958 8000 Megawatt retire and replace it with C T S. So 01:11:56.970 --> 01:12:02.449 those two portfolios are different. One's got old coal 01:12:02.458 --> 01:12:05.279 one's got new gas. So they are different. But the E 01:12:05.289 --> 01:12:08.470 L CCS for those units aren't that different. And so 01:12:08.479 --> 01:12:12.359 the results that we show here in the top half on page 01:12:12.369 --> 01:12:14.930 18 are not gonna be that different. They're not that 01:12:14.939 --> 01:12:17.739 different though? I mean, when you have rampable. Not, 01:12:17.750 --> 01:12:20.878 not when you compare it to in a high intermittent environment 01:12:20.890 --> 01:12:23.520 well, you can base Load those units and you still have 01:12:23.529 --> 01:12:27.539 the other C T s. And so if we had replaced the 01:12:27.548 --> 01:12:30.668 wind with C T s or something like that, then you would 01:12:30.680 --> 01:12:33.789 have a, something we'd have to worry about. But, uh 01:12:34.529 --> 01:12:40.458 now going forward, we can decide, you can help us decide 01:12:40.470 --> 01:12:44.359 you know what that retirement rate should be for 2026 01:12:44.369 --> 01:12:46.628 And we're gonna have to, that's gonna have to be factored 01:12:46.640 --> 01:12:49.470 into this. You're gonna have to decide, are we gonna 01:12:49.479 --> 01:12:53.369 lose 2468? How many megawatts 1000 Megawatt are we 01:12:53.378 --> 01:12:56.649 gonna lose? Because I just wonder if, you know, we 01:12:56.659 --> 01:12:59.819 think about EPA regulations are there ways that we 01:12:59.829 --> 01:13:06.759 could help, uh, manage capital costs for older units 01:13:06.770 --> 01:13:11.270 to allow them to run less and meet their EPA thresholds 01:13:11.279 --> 01:13:13.759 but continue to remain as part of the fleet when we 01:13:13.770 --> 01:13:15.890 need them. And clearly that's getting deep into the 01:13:15.899 --> 01:13:20.729 modeling, but clearly will help you think through that 01:13:21.140 --> 01:13:23.319 potentially. I think the other thing to keep in mind 01:13:23.329 --> 01:13:26.338 is when you think about the year 2026. You think about 01:13:26.659 --> 01:13:29.838 nothing retires, we've got an 18.7% reserve margin. 01:13:32.149 --> 01:13:37.680 What's 2027 look like it's going down. So even though 01:13:37.689 --> 01:13:41.739 we may be at that one in 10 threshold in 2026 the 01:13:41.750 --> 01:13:45.439 slope is downward. If nothing else is built, no, no 01:13:45.449 --> 01:13:48.579 no new dispatch generations built if, if our market 01:13:48.588 --> 01:13:51.779 is static but right. So that's something to keep in 01:13:51.789 --> 01:13:54.609 mind because, you know, we're going to be implementing 01:13:54.619 --> 01:13:57.949 a lot of, you know, Legislation. 01:13:59.798 --> 01:14:04.569 So, um it's important that I think that the, that we 01:14:04.579 --> 01:14:08.628 understand this is an iterative process, right? Um 01:14:09.539 --> 01:14:15.009 And ultimately, you know, we gotta remain open minded 01:14:15.020 --> 01:14:18.418 to that fact, but um I'll let you continue, I just 01:14:18.430 --> 01:14:22.640 have two very quick things. Um One of them is uh are 01:14:22.649 --> 01:14:25.680 you seeing any evidence around the region around the 01:14:25.689 --> 01:14:32.310 country that um the net number should be batteries 01:14:32.319 --> 01:14:36.729 instead of CTs? I don't have information on that. 01:14:37.239 --> 01:14:40.600 And I'm just wondering, you know, is that I'm thinking 01:14:40.609 --> 01:14:44.189 ahead, is that the future, is that good? Is that bad? 01:14:44.199 --> 01:14:48.000 Is that information that we should be discussing? Clearly 01:14:48.009 --> 01:14:49.409 a battery has 01:14:51.060 --> 01:14:55.600 a dispatchability time frame. That potentially a CT 01:14:55.609 --> 01:14:59.470 not consider. So I'm just, I'm asking the 01:14:59.479 --> 01:15:01.509 question because it's clearly something that's gonna 01:15:01.520 --> 01:15:04.729 be addressed in the future. And then the last question 01:15:04.739 --> 01:15:08.918 that I have was. Um so if we get this and we 01:15:08.930 --> 01:15:11.878 talked about this on the phone so this. Um I, I if 01:15:11.890 --> 01:15:16.489 we get this reserve margin can we use that reserve 01:15:16.500 --> 01:15:20.350 margin and take the next step and do an economically 01:15:20.359 --> 01:15:24.798 optimal reserve margin and determine what types of 01:15:24.810 --> 01:15:27.689 resources are most economically optable in the market? 01:15:27.699 --> 01:15:31.029 And I say this because demand response and energy efficiency 01:15:31.039 --> 01:15:33.569 and some of these other tools that are out there may 01:15:33.579 --> 01:15:37.100 be less expensive and they, they have a duration issue 01:15:37.109 --> 01:15:41.560 as well. But can we ultimately take this number and 01:15:41.569 --> 01:15:46.529 say, ok, you know, we the reserve margin provides this 01:15:46.539 --> 01:15:52.020 reliability metric and this is the economic, economic 01:15:52.029 --> 01:15:55.979 um spread of what these resources demand and supply 01:15:55.989 --> 01:15:58.109 would look like. Absolutely. I mean, I think that's 01:15:58.119 --> 01:16:00.159 one of the interesting things about the exceedance 01:16:00.168 --> 01:16:04.329 probabilities is perhaps some of the uh some of the 01:16:04.338 --> 01:16:08.100 events that you decide to or outside of a standard. 01:16:08.470 --> 01:16:12.838 Could be mitigated by something uh market related. 01:16:13.029 --> 01:16:16.100 But that still necessitate a value of loss Load, again 01:16:16.109 --> 01:16:20.930 a value of scarcity. And if the value will adjust when 01:16:20.939 --> 01:16:24.319 we start talking about different peaks that grow from 01:16:24.329 --> 01:16:28.029 summertime hours to the dead of winter, from three 01:16:28.039 --> 01:16:32.128 AM to six or nine AM when the batteries have run their 01:16:32.140 --> 01:16:36.180 discharge and we are without power. 3AM may be a 01:16:36.189 --> 01:16:38.878 great time for demand response until people start freezing 01:16:38.890 --> 01:16:42.250 depending on the duration. What, what is the status 01:16:42.259 --> 01:16:45.878 of the value of loss Load study? It's on ongoing meeting 01:16:46.689 --> 01:16:50.279 Have you hired an independent consultant? Yes. Okay. And who 01:16:50.289 --> 01:16:50.708 is that? 01:16:56.539 --> 01:17:01.399 It's um I can I, I. Have, have you picked yet? I 01:17:01.409 --> 01:17:01.708 think, 01:17:04.729 --> 01:17:07.159 I think I know who it is but I can, you haven't 01:17:07.168 --> 01:17:09.770 officially hired somebody? Ok. so you, you put out 01:17:09.779 --> 01:17:12.298 an RFP and are in the process of hiring? 01:17:13.838 --> 01:17:16.458 Ok, great. Um, that's an important piece of all this 01:17:16.470 --> 01:17:20.239 as well. Um, you know one, one question because we're talk 01:17:20.250 --> 01:17:22.680 I heard you all talk about seasonality, you know, Winter 01:17:22.689 --> 01:17:26.270 in Summer. And I think that's an important um factor 01:17:26.279 --> 01:17:28.088 that we got to look at and I know that's important 01:17:28.100 --> 01:17:30.989 to ERCOT and their evaluation, as I see on page 13. 01:17:31.390 --> 01:17:34.949 Um you know, there's an attempt to more accurately 01:17:34.958 --> 01:17:38.149 model reliability in the, in the Winter. You know, 01:17:38.159 --> 01:17:40.329 I know you started with the CDR report. I'm wondering 01:17:40.338 --> 01:17:44.509 as we go through, you know, this evaluation whether 01:17:44.520 --> 01:17:47.680 it's through this, you know, reliability standard study 01:17:47.689 --> 01:17:52.668 process or future iterations. Um but seasonality is 01:17:52.680 --> 01:17:56.548 very important. And how do we, I mean can we look 01:17:56.560 --> 01:18:00.039 at the SARA reports. And maybe come up with some kind 01:18:00.048 --> 01:18:03.890 of, you know, seasonal perspective on the reliability 01:18:03.899 --> 01:18:07.359 standard rather than the CDR? Uh I think the standard 01:18:07.369 --> 01:18:11.600 is gonna inform us on, on the, for example, if you 01:18:11.609 --> 01:18:16.470 look at slide number 25 so this is our 18% reserve 01:18:16.479 --> 01:18:20.819 margin, 1 to 10 year frequency. And if you look at 01:18:20.829 --> 01:18:23.779 that graph, you'll see a, a duration and a frequency 01:18:23.789 --> 01:18:28.798 chart for, I'm sorry, ADER the frequency across the 01:18:28.810 --> 01:18:33.289 top and duration on the Y axis. And the different bar 01:18:33.298 --> 01:18:36.229 colors represent summer and winter. So you can see 01:18:36.239 --> 01:18:39.869 as you build a reserve margin, the uh the summer events 01:18:39.878 --> 01:18:44.088 almost go away when you get above a frequency of one 01:18:44.100 --> 01:18:47.449 in 17 years. And so it's just the winter events. And 01:18:47.458 --> 01:18:50.750 so that kind of this study will, so I guess the short 01:18:50.759 --> 01:18:53.430 the short answer is when you look at those dot graphs 01:18:53.439 --> 01:18:56.509 those event graphs, we know that those events are summer 01:18:56.520 --> 01:19:01.180 or winter events. And so we will be able to focus on 01:19:01.189 --> 01:19:04.509 on a seasonal problem. So you will know if you're talking 01:19:04.520 --> 01:19:09.109 about a uh a frequency standard, that's one in 25 years 01:19:09.119 --> 01:19:11.600 that the events we're talking about are winter events 01:19:11.609 --> 01:19:15.000 Now, they're not summer events. I think that's very 01:19:15.009 --> 01:19:17.430 important because as we've well highlighted, you know 01:19:17.439 --> 01:19:20.859 the winter is, is where the health risk, public safety 01:19:20.869 --> 01:19:23.439 risk is. And it's very important we stay focused on 01:19:23.680 --> 01:19:25.838 on all seasons, but particularly the Winter. 01:19:30.060 --> 01:19:33.489 All good questions, all good thoughts and um just really 01:19:33.500 --> 01:19:36.350 appreciate you coming in. (item:21:53298, Chairwoman Jackson's thoughts on the dialogues & thoughts of the Commissioners) And um you know, asking the 01:19:36.359 --> 01:19:40.208 questions early on in the process. And uh I think, 01:19:40.548 --> 01:19:43.739 you know, kind of one of the objectives uh today was 01:19:43.750 --> 01:19:46.529 to uh give you kind of like the green light to move 01:19:46.539 --> 01:19:49.250 forward. So that you could put together this list of 01:19:49.259 --> 01:19:51.989 scenarios to come back to us. And we could take a look 01:19:52.000 --> 01:19:55.489 at it and then um you know, agree that that is the 01:19:55.500 --> 01:19:58.600 comprehensive list or maybe add some. That we want to 01:19:58.609 --> 01:20:02.029 have different scenarios run to see the different outcomes. 01:20:02.039 --> 01:20:04.229 Um but I think the other thing that you were hoping 01:20:04.239 --> 01:20:09.149 was um to kind of know that we were in agreement with 01:20:09.199 --> 01:20:12.930 the um proposed treatment of the low prob probability 01:20:12.939 --> 01:20:15.729 events using the exceeding probability methodology 01:20:15.739 --> 01:20:18.949 So I think I can say that we, we we're all kind 01:20:18.958 --> 01:20:22.909 of aligned with that. And uh I, I would, you know, 01:20:22.918 --> 01:20:25.298 say with that if you kind of feel like you've got everything 01:20:25.310 --> 01:20:27.949 you need from the discussion and the green light to 01:20:27.958 --> 01:20:30.250 move forward and keep going. I think so. Thank you 01:20:30.270 --> 01:20:33.890 very much. Can I ask one quick question on page 19. 01:20:33.899 --> 01:20:38.869 You talk about uh uh Load shedding shapes and everyone 01:20:38.878 --> 01:20:41.149 has a numerical number except for CenterPoint. It 01:20:41.159 --> 01:20:44.220 says depends. Sounds like an engineering answer 01:20:44.229 --> 01:20:48.088 but uh any parameters on that. On the, on the CenterPoint? 01:20:48.100 --> 01:20:51.529 Yes. I think it, it actually depends on the 01:20:51.539 --> 01:20:54.114 circumstances that the event occurs. And they've got 01:20:54.125 --> 01:20:58.884 clear rules but it depends. For, for the purpose of 01:20:58.895 --> 01:21:02.384 this chart, it didn't fit to put it in there. Okay. So 01:21:02.395 --> 01:21:05.244 that's not, that's not contingent upon the water congestion 01:21:05.253 --> 01:21:08.055 constraint or anything like that. No. I think it's, it's dependent 01:21:08.064 --> 01:21:12.149 on season and things like that. Okay, thank you. Welcome. 01:21:12.759 --> 01:21:14.020 Woody, thanks for being here today. 01:21:20.979 --> 01:21:23.909 (item:22:5444, Chairwoman Jackson lays the bridging solutions topic) The next topic to take up is um bridging solutions. 01:21:24.949 --> 01:21:27.649 Um This is just a general discussion. We don't plan 01:21:27.659 --> 01:21:31.640 on taking any formal action today. Kannan with ERCOT is here 01:21:32.000 --> 01:21:34.890 and um available. Should we have any questions? And 01:21:34.899 --> 01:21:36.458 I'd like to ask him to kindly come up. 01:21:42.350 --> 01:21:45.270 Commissioner McAdams, you have a memo. Would you please lay 01:21:45.279 --> 01:21:47.819 out this for our discussion? Thank you Madam Chair. 01:21:47.829 --> 01:21:49.930 (item:22:5444, Commissioner McAdams’ lays out his memo) Um and, and just for the room and the, the broader 01:21:49.939 --> 01:21:53.989 public. Uh I filed the memo um in this docket to give 01:21:54.000 --> 01:21:56.939 us the opportunity to refocus and redouble our efforts 01:21:56.949 --> 01:21:59.529 after the hard work of the Legislative Session. I also 01:21:59.539 --> 01:22:03.100 believe it helps serve the purpose of uh resetting 01:22:03.109 --> 01:22:07.859 um as uh the Session has concluded. As we now know what 01:22:07.869 --> 01:22:11.229 tools we have available uh in our toolbox. And also 01:22:11.239 --> 01:22:16.319 to bring forward um previously filed a suggested frameworks 01:22:16.329 --> 01:22:22.520 on reliability standards. Uh as well as um the problem 01:22:22.529 --> 01:22:25.319 that we are attempting to solve for in both the near 01:22:25.329 --> 01:22:29.699 and long term. And as such a Staff filed a memo in 01:22:29.708 --> 01:22:33.229 January 5, 2023. Which did an excellent job in my opinion 01:22:33.239 --> 01:22:37.020 of defining the two problems before us. Um and, and 01:22:37.029 --> 01:22:42.350 how we consider next steps. First, they identified a 01:22:42.359 --> 01:22:46.039 problem of operational flexibility, the current 01:22:46.048 --> 01:22:49.869 energy only market design uh with the ORDC retains 01:22:49.878 --> 01:22:53.649 and attracts sufficient installed capacity in the ERCOT 01:22:53.729 --> 01:22:56.430 Power region, our IMM has repeatedly pointed this 01:22:56.439 --> 01:23:00.500 out. However, increased penetration by intermittent 01:23:00.509 --> 01:23:05.140 resources, necessitate more operational flexibility 01:23:05.149 --> 01:23:09.390 on the part of the grid. And second, they identified 01:23:09.399 --> 01:23:12.329 appropriately, we have a resource adequacy problem 01:23:12.338 --> 01:23:16.259 in the long term. For which Staff has consistently said 01:23:16.270 --> 01:23:21.979 PCM could be designed to address. But the primary objective 01:23:21.989 --> 01:23:25.548 of my memo is to outline and accurately identify the 01:23:25.560 --> 01:23:28.409 near term problem that we are trying to address. And 01:23:28.418 --> 01:23:33.208 that is that presently, ERCOT often lacks sufficient 01:23:33.220 --> 01:23:37.020 flexible dispatch generation in real time. To cover 01:23:37.029 --> 01:23:40.020 the inherent variability of a high intermittent resource 01:23:40.029 --> 01:23:44.020 mix. Increasingly, ERCOT has relied on out of market 01:23:44.029 --> 01:23:48.168 actions through reliability unit commitments or RUC 01:23:48.180 --> 01:23:52.079 to meet this shortage. And RUCing is not in my view 01:23:52.088 --> 01:23:55.859 a tenable long term solution. It is an out of market 01:23:55.869 --> 01:24:00.770 action that distorts uh pricing and unnecessarily increases 01:24:00.779 --> 01:24:05.060 the wear and tear on aging and existing units. Now 01:24:05.069 --> 01:24:08.119 in my view, to address this problem. I would support 01:24:08.128 --> 01:24:11.418 the ORDC multi step floor. Which has been recommended 01:24:11.430 --> 01:24:14.399 by the ERCOT Board of Directors uh as well as recommended 01:24:14.409 --> 01:24:19.199 by TAC. Um in the as a short term solution, the 01:24:19.208 --> 01:24:22.579 ORDC operates in, as I said in the memo. As an 01:24:22.588 --> 01:24:25.869 economic reserve margin rather than a physical reserve 01:24:25.878 --> 01:24:31.479 margin by adding a multi step floor one at 7000 megawatts 01:24:31.489 --> 01:24:33.739 as you're working your way down the reserve cadence 01:24:33.750 --> 01:24:37.600 of remaining reserves and another at 6500 megawatts 01:24:37.729 --> 01:24:40.600 I believe that we are addressing the disconnect between 01:24:40.609 --> 01:24:45.168 conservative market operations. Which we are obligated 01:24:45.239 --> 01:24:49.520 to maintain in the, in the near term, at least. For 01:24:49.529 --> 01:24:53.378 market operations and, and send price signals to generators. 01:24:53.899 --> 01:24:56.409 It would establish a clear signal for generators to 01:24:56.418 --> 01:24:59.798 self commit and would mitigate risk to those units 01:24:59.810 --> 01:25:01.930 that choose to commit for the reasons I highlighted 01:25:01.939 --> 01:25:05.939 in the memo. Which are uh fuel variability, fuel usage 01:25:05.949 --> 01:25:08.838 variability as a part of existing contracts with their 01:25:08.850 --> 01:25:11.680 suppliers. And wear and tear on those facilities, they're 01:25:11.689 --> 01:25:13.958 going to be compensated for lighting that thing up 01:25:13.970 --> 01:25:18.329 and ramping into the operating day. Ultimately, I believe 01:25:18.338 --> 01:25:21.819 that this would reduce rucking once implemented. And 01:25:21.829 --> 01:25:25.069 crucially, we are setting the market up to value duration 01:25:25.539 --> 01:25:28.529 uh and to further enhance the value of flexibility. 01:25:28.838 --> 01:25:32.720 The energy only market has been exceptionally efficient 01:25:32.729 --> 01:25:37.479 at uh valuing flexibility. ORDC was a major step 01:25:37.489 --> 01:25:41.520 in in that effort um almost 10 years ago, gosh 10 01:25:41.529 --> 01:25:46.829 years ago now. Um but the problem that we will face 01:25:46.838 --> 01:25:49.869 in the near future. As we just talked about is Winter. 01:25:50.479 --> 01:25:54.588 And Winter in a high intermittent environment um with 01:25:54.600 --> 01:25:57.708 batteries and their state of charge limitations. 01:25:57.720 --> 01:26:00.208 Duration is going to be an important capability that 01:26:00.220 --> 01:26:02.819 we have to have in the resource mix moving forward. 01:26:02.829 --> 01:26:05.770 To cover that area of darkness, that cold winter night. 01:26:06.088 --> 01:26:10.250 As Hannah uh highlighted in their comments under this 01:26:10.259 --> 01:26:11.750 uh under this project. 01:26:13.588 --> 01:26:14.208 Um 01:26:17.708 --> 01:26:21.199 I do not believe that this policy works in isolation. 01:26:22.378 --> 01:26:28.548 I believe um that in order to take a step on this 01:26:28.659 --> 01:26:33.729 uh component works in tandem with other components 01:26:33.739 --> 01:26:37.439 of a broader uh reliability framework that now exist 01:26:37.449 --> 01:26:42.819 especially with passage of house Bill 1500 which requires 01:26:42.829 --> 01:26:47.418 us to build a uh D R R S program in some 01:26:47.430 --> 01:26:50.899 form or fashion. It also works with the Load program 01:26:50.909 --> 01:26:54.000 that we will have to build. Uh and ultimately, the 01:26:54.009 --> 01:26:57.088 PCM will set us up to succeed in addressing the problems 01:26:57.100 --> 01:27:00.548 of operational flexibility and resource adequacy. But 01:27:00.560 --> 01:27:05.939 given the uh the conditions of statute. PCM will act 01:27:05.949 --> 01:27:11.909 as a capstone uh revenue stream in a revenue stack. 01:27:11.918 --> 01:27:16.509 Associated with dispatchable and long duration facilities. 01:27:16.979 --> 01:27:21.239 I also believe that um I believe ERCOT is currently 01:27:21.250 --> 01:27:24.489 looking at and, and I believe we should look at. 01:27:24.899 --> 01:27:30.149 Uh expeditiously deploying, deploying the DRRS required 01:27:30.159 --> 01:27:33.168 under statute. Which works hand in glove with this bridge 01:27:33.180 --> 01:27:38.500 mechanism. To further incent older more economically 01:27:38.509 --> 01:27:42.319 marginal generation to bid into a program to ramp in 01:27:42.329 --> 01:27:45.759 as needed. Into an operating day after called upon by 01:27:46.029 --> 01:27:50.548 ERCOT. Um I believe we could potentially repurpose 01:27:50.560 --> 01:27:53.720 an existing ancillary service such as nonspin. Once 01:27:53.729 --> 01:27:56.878 we know more about how ECRS, the new ancillary 01:27:56.890 --> 01:28:00.720 service which has just gone live. Um attracts the more 01:28:00.729 --> 01:28:03.979 flexible generation into that service, thus leaving 01:28:03.989 --> 01:28:08.350 available a tool that we could use um and meet the 01:28:08.359 --> 01:28:11.939 legislatures of intent of rapidly deploying such a 01:28:11.949 --> 01:28:15.829 service that will have no other effect in helping improve 01:28:15.838 --> 01:28:19.539 reliability. So I, I hope I set the table with that. 01:28:19.548 --> 01:28:21.829 and would value any thoughts from my colleagues. I 01:28:21.838 --> 01:28:24.069 think you did a great job in kind of laying everything 01:28:24.079 --> 01:28:26.789 out. And again, just a general discussion today. I 01:28:26.798 --> 01:28:28.939 don't think we're planning on taking any kind of formal 01:28:28.949 --> 01:28:32.659 action. But um I would really welcome, you know, thoughts 01:28:32.668 --> 01:28:35.588 and ideas on this and more going forward. Sure. Um 01:28:35.600 --> 01:28:38.128 (item:22:5444, Commissioner Cobos’ thoughts on bridging solutions) I'd like to, you know, just sort of echo some of the 01:28:38.140 --> 01:28:40.168 statements that Commissioner McAdams made. I think 01:28:40.180 --> 01:28:42.779 you're beating the drum that I've been beaten since 01:28:42.789 --> 01:28:45.338 um you know, the beginning of the year, if not before. 01:28:45.350 --> 01:28:48.208 And I think you know the, the introduction of the 01:28:48.220 --> 01:28:51.458 bridge solution was very important. Um And, and I, 01:28:51.470 --> 01:28:54.039 you know, appreciate ERCOT hard work in evaluating 01:28:54.168 --> 01:28:58.899 a robust menu of bridging options. And um ultimately 01:28:58.909 --> 01:29:01.470 I think from my perspective the, the main goal of 01:29:01.479 --> 01:29:05.560 a bridging solution is to help reduce RUC and reliability 01:29:05.569 --> 01:29:08.810 unit commitment. The solution should improve generation 01:29:08.819 --> 01:29:11.128 self commitment, thereby reducing the need for ERCOT 01:29:11.239 --> 01:29:13.939 to have to RUC units. To meet expected electricity 01:29:13.949 --> 01:29:17.279 demand and the solution should rely on a market driven 01:29:17.289 --> 01:29:20.418 mechanism that can be implemented in an efficient expeditious 01:29:20.430 --> 01:29:24.220 manner. Um The reduction of RUC is important as you 01:29:24.229 --> 01:29:26.779 as you've highlighted. Um And I've highlighted in prior 01:29:26.789 --> 01:29:30.259 memos, um that RUC is an out of market action that 01:29:30.270 --> 01:29:33.418 has a distortion impact on the market. And has a physical 01:29:33.430 --> 01:29:36.259 impact on our older long duration generation assets. 01:29:36.548 --> 01:29:39.048 That are needed to ensure reliability during multiday 01:29:39.060 --> 01:29:45.020 extreme winter weather events. Secondly, um the bridge 01:29:45.029 --> 01:29:48.088 um by driving generation self commitment in the real 01:29:48.100 --> 01:29:51.088 time market. Uh self committed generation units will 01:29:51.100 --> 01:29:53.259 receive revenues. That will help cover their marginal 01:29:53.270 --> 01:29:56.310 costs, thereby providing revenue stability to help 01:29:56.319 --> 01:29:58.759 retain existing generation and incent investment in 01:29:58.770 --> 01:30:01.579 new generation. While we await a long term resource 01:30:01.588 --> 01:30:05.759 adequacy solution that will be provided by the various 01:30:05.770 --> 01:30:10.739 provisions of House Bill 1500. Summarily a bridge solution 01:30:10.750 --> 01:30:12.939 should fulfill the objective of stabilizing the market 01:30:12.949 --> 01:30:16.259 by sending a stronger market signal to self 10 cent 01:30:16.270 --> 01:30:18.560 self commitment by generators in the real time market 01:30:18.569 --> 01:30:22.958 and reduce RUC. And I think ultimately, um you know 01:30:23.060 --> 01:30:27.439 we have a proposed solution. And um I look forward to 01:30:27.449 --> 01:30:30.039 further evaluating in open meeting and taking action 01:30:30.569 --> 01:30:30.918 then. 01:30:32.509 --> 01:30:36.359 (item:22:5444, Commissioner Glotfelty's thoughts on bridging solutions) Um I, I appreciate the fact that, you know, you put 01:30:36.369 --> 01:30:40.470 so much in here. I think I can speak for myself that 01:30:40.479 --> 01:30:44.289 I'm still trying to digest what the Legislature has 01:30:44.298 --> 01:30:47.310 done the direction they've given us and how that puzzle 01:30:47.319 --> 01:30:50.390 fits together. I think it's some of it fits pretty 01:30:50.399 --> 01:30:52.850 well together. Some of it has some outliers that we 01:30:52.859 --> 01:30:56.890 have to gonna have to figure out. And I think my discussions 01:30:56.899 --> 01:31:00.039 with many stakeholders since that time. They raised 01:31:00.048 --> 01:31:03.509 some good questions and I'm eager to pose those and 01:31:03.668 --> 01:31:06.500 figure out how we can make the market work. Clearly 01:31:06.509 --> 01:31:10.909 market, I'm a believer in these markets more, more 01:31:10.918 --> 01:31:15.039 out of action, out of market actions. That are corrected 01:31:15.048 --> 01:31:18.668 by other, out of market actions are not the way I want 01:31:18.680 --> 01:31:22.668 to go. But I think we in this time of uncertainty and 01:31:22.680 --> 01:31:25.939 transition, we have to create certainty as best we 01:31:25.949 --> 01:31:31.020 can. We've got to lay down that. We think, you know 01:31:31.029 --> 01:31:35.079 if RUCing is not the best out of market action. Let's 01:31:35.259 --> 01:31:39.208 be specific about how we think we're getting uh that 01:31:39.220 --> 01:31:41.539 number to go down. What are the tools we're giving 01:31:41.609 --> 01:31:46.869 ERCOT in the market to uh to incent this early um uh 01:31:46.890 --> 01:31:50.859 commitment in the day head market. Um these are things 01:31:50.869 --> 01:31:54.779 that we have to do for investment. Uh You know, these 01:31:54.789 --> 01:31:57.640 are, I'm not saying anything you don't know. But um 01:31:57.838 --> 01:32:00.930 I, I'm just I'm eager to get into this discussion. 01:32:00.939 --> 01:32:06.289 I think we've got a lot of uh runway here to um 01:32:06.399 --> 01:32:09.390 to work on. And uh we got a lot of work that 01:32:09.399 --> 01:32:11.949 we have to do. So, uh I look forward to getting into 01:32:11.958 --> 01:32:14.619 all these discussions. You know, here in the, in the 01:32:14.628 --> 01:32:18.270 coming months. You, you know, (item:22:5444, Commissioner McAdams’ follow-up thoughts on his memo) Madam Chair before, uh 01:32:18.409 --> 01:32:21.350 you probably lend your thoughts. I, I would also like 01:32:21.359 --> 01:32:26.560 to point out one point. Um we engage uh to a great 01:32:26.569 --> 01:32:31.810 deal with the financial and capital market. To try 01:32:31.819 --> 01:32:35.750 to understand what we as regulators are thinking. And 01:32:35.759 --> 01:32:39.189 what they are thinking in terms of good investments 01:32:39.199 --> 01:32:45.529 and return on investment. And um I wrote the memo in 01:32:45.539 --> 01:32:48.909 the way that I did. So that it, it can speak to 01:32:48.918 --> 01:32:51.548 a broad audience and trying to understand what is happening 01:32:51.798 --> 01:32:55.668 here in ERCOT. And we are at the forefront of a major 01:32:55.680 --> 01:33:00.189 energy transition. Uh renewables are here and they 01:33:00.199 --> 01:33:04.088 are more are coming. And so the effect that that is 01:33:04.100 --> 01:33:10.128 having is that the driven operator, ERCOT is having 01:33:10.140 --> 01:33:16.699 to do more. To harmonize the flow of power with a what 01:33:16.708 --> 01:33:21.168 is increasingly becoming a dominant variable uh a 01:33:21.180 --> 01:33:23.829 resource mix. That is dominated by variable resources. 01:33:24.560 --> 01:33:28.409 And so I'd like to point out that costs associated 01:33:28.418 --> 01:33:33.489 with each uh component of this framework, um ancillary 01:33:33.500 --> 01:33:37.869 services. And uh well frankly, right now RUCing. But 01:33:38.149 --> 01:33:43.239 those are certain to uh remain in the future. And when 01:33:43.250 --> 01:33:45.729 I say costs, I mean, revenues for specific types of 01:33:45.739 --> 01:33:50.149 generators to help meet that need um to help address 01:33:50.159 --> 01:33:53.668 the variability of, of a renewable heavy uh resource 01:33:53.680 --> 01:34:00.890 mix. That that is the new target. Um that is the new 01:34:00.899 --> 01:34:04.500 signal to financial markets that investment is needed. 01:34:04.798 --> 01:34:07.930 Because and it, and they're unavoidable, we can't get 01:34:07.939 --> 01:34:10.569 get around them. They are the new reliability standard 01:34:10.579 --> 01:34:14.189 which capacity markets have so often debated. We don't 01:34:14.199 --> 01:34:16.458 have a capacity market in Texas, but we've got a heck 01:34:16.470 --> 01:34:19.439 of a lot of renewables. And so revenues associated with 01:34:19.449 --> 01:34:22.430 managing this are only going to increase into the future. 01:34:23.029 --> 01:34:26.539 And uh and the duration limitations of batteries are 01:34:26.548 --> 01:34:31.250 a major constraint on their ability to provide the 01:34:31.259 --> 01:34:35.319 the answer to the overall problem. And uh and that's 01:34:35.329 --> 01:34:39.659 why this is uh this framework is a problem of the sum 01:34:39.668 --> 01:34:43.989 of all parts. Uh solving for that reliability standard 01:34:44.000 --> 01:34:47.048 which we're going to settle upon. I think that's right. 01:34:47.060 --> 01:34:49.569 (item:22:5444, Commissioner Cobos’ follow-up thoughts on the memo) The operational flexibility issue that we're facing 01:34:49.579 --> 01:34:52.470 with more renewables, especially solar coming on the 01:34:52.479 --> 01:34:56.569 system. Is the more is a very near term issue we've 01:34:56.579 --> 01:35:00.369 got to solve for. And filling that gap as the solar 01:35:00.378 --> 01:35:03.628 duck curve becomes more of a canyon as I've read in 01:35:03.930 --> 01:35:07.958 various um thought institutes putting out analysis. 01:35:08.189 --> 01:35:11.189 And that canyon is going to be filled by quick starts 01:35:11.199 --> 01:35:14.239 and batteries and and hopefully we'll send the signal 01:35:14.250 --> 01:35:18.338 not only for quick start investment, but also for additional 01:35:18.350 --> 01:35:21.659 battery investment and technological innovation. To 01:35:21.668 --> 01:35:24.673 increase from two hours to, you know, four hours. 01:35:24.685 --> 01:35:27.923 And filling in that gap and, and hopefully send a signal 01:35:27.935 --> 01:35:30.173 not only to quick starts and batteries, but also to 01:35:30.185 --> 01:35:34.274 solar to show up with batteries. In a collocated fashion, 01:35:34.284 --> 01:35:37.673 where they can participate in ECRS and other ancillary 01:35:37.685 --> 01:35:40.244 services that ERCOT has to offer. And I think ultimately 01:35:40.253 --> 01:35:45.239 as you're saying. As we send us, as we invite the investment 01:35:45.250 --> 01:35:48.259 community to look at our market. There are a series 01:35:48.270 --> 01:35:51.208 of revenue streams that are not going to go away. Um 01:35:51.220 --> 01:35:54.838 our real time market energy streams that we're in bolstering 01:35:54.850 --> 01:35:58.899 with ORDC at this time. Um and are going to 01:35:58.909 --> 01:36:01.720 evaluate a bridging solution that could potentially 01:36:01.729 --> 01:36:04.149 bolster the ORDC in the real time market. So real 01:36:04.159 --> 01:36:08.600 time energy um revenue streams, but also the consistent 01:36:08.979 --> 01:36:13.949 um and expanded and optimized ERCOT ancillary service 01:36:13.958 --> 01:36:18.979 portfolio and other market design and market revenue 01:36:18.989 --> 01:36:21.168 stream offerings from House Bill 1500. 01:36:23.600 --> 01:36:26.819 Thanks for agreeing. I appreciate it Lori. That in a very 01:36:26.829 --> 01:36:28.878 long winded way. I just told you I, I'm in agreement. 01:36:30.439 --> 01:36:33.409 I think this has been a very robust discussion. And 01:36:33.798 --> 01:36:36.359 you know, our North Star continues to be reliability. 01:36:37.619 --> 01:36:40.399 I like to tell folks whether you are a consumer, whether 01:36:40.409 --> 01:36:43.838 you're residential, whether you are industrial or business 01:36:43.869 --> 01:36:48.500 reliability is key. And I think there's no doubt that 01:36:48.509 --> 01:36:52.869 um Texas has the talent, the resources, the spirit 01:36:52.878 --> 01:36:56.418 um engagement. I mean, I'm from Beaumont. I think back 01:36:56.430 --> 01:37:01.119 to January 10, 1901, when Spindletop flew in and 01:37:01.128 --> 01:37:04.649 provided at that time, more oil than the world had 01:37:04.659 --> 01:37:08.878 ever seen. And really changed the face of, of the nation 01:37:08.890 --> 01:37:12.560 and the world. And you know, Texas was at the forefront 01:37:12.569 --> 01:37:15.819 then has continued to be since then. And I am very 01:37:15.829 --> 01:37:18.208 encouraged by what we've heard today. The resources 01:37:18.220 --> 01:37:23.189 that we have uh from um from ERCOT, from our Staff 01:37:23.199 --> 01:37:26.899 uh from the talent of my fellow Commissioners, from 01:37:26.909 --> 01:37:30.168 the stakeholders. Everyone that is uh keyed up ready 01:37:30.180 --> 01:37:34.100 to go. Um we've heard from the Legislature and to, 01:37:34.449 --> 01:37:37.649 you know, start moving forward with um with bridging 01:37:37.659 --> 01:37:39.668 with reliability. And all the many things that we need 01:37:39.680 --> 01:37:43.029 to do. And recognizing again that they all work together 01:37:43.159 --> 01:37:46.270 and that working together collaboratively. Drawing all 01:37:46.279 --> 01:37:48.668 of the on the talents and the resources. You know, 01:37:48.680 --> 01:37:51.770 not just that physical capital, but that human capital. 01:37:51.899 --> 01:37:55.708 Which I think is um is, is so unique to Texans and 01:37:55.720 --> 01:37:59.199 um so great discussion. Uh I know uh 01:38:00.930 --> 01:38:04.229 uh Kannan is here from ERCOT. And I didn't want to kind of leave 01:38:04.239 --> 01:38:07.100 this topic until maybe I ask you the question. Is there 01:38:07.109 --> 01:38:09.479 anything else from maybe your perspective that you 01:38:09.489 --> 01:38:12.100 think we might be needing to think to think about? 01:38:12.470 --> 01:38:16.329 Um so before I came here, I was trying to think of 01:38:16.338 --> 01:38:19.520 what would be the one main point I would want to share 01:38:19.569 --> 01:38:24.159 with you. And um you've all kind of covered it. So, 01:38:24.168 --> 01:38:28.180 uh you made my life really easy. Um and that is that 01:38:28.668 --> 01:38:33.168 this is gonna be a complex uh problem to solve with 01:38:33.180 --> 01:38:38.500 lots of interactive dynamics. Um and uh if, if you 01:38:38.509 --> 01:38:42.739 try and just kind of do one thing, it might tie your 01:38:42.750 --> 01:38:46.168 hands as far as other uh other measures, you want to 01:38:46.180 --> 01:38:51.000 take. So I really appreciate the leadership about wanting 01:38:51.009 --> 01:38:57.890 to tackle this as a multifaceted problem. And Commissioner 01:38:57.899 --> 01:39:02.489 Glotfelty comments of trying to avoid stacking up things 01:39:02.500 --> 01:39:07.699 to fix what the first item did poorly, but it did other 01:39:07.708 --> 01:39:11.899 things. Well, that would be, I think a really good 01:39:11.909 --> 01:39:15.430 approach to try to avoid that, that type of activity. 01:39:15.649 --> 01:39:18.979 So um you're gonna get bombarded in the next few months 01:39:18.989 --> 01:39:23.128 with lots of data around the reliability standard. 01:39:23.329 --> 01:39:27.958 Um how best to reduce RUC? How best to attract new investment 01:39:27.970 --> 01:39:31.909 into the state? And you need to contemplate all of 01:39:31.918 --> 01:39:36.140 the elements that are in the Legislation. As well as 01:39:36.500 --> 01:39:39.869 um the feedback that you get from our analysis to come 01:39:39.878 --> 01:39:43.310 up with an optimal solution. I think uh Commissioner 01:39:43.319 --> 01:39:47.390 McAdams memo captured that perfectly. Yeah, 01:39:49.000 --> 01:39:53.750 thank you. Um, with that, are we ready to take up Item 01:39:53.759 --> 01:39:56.918 No. uh 15? May I suggest that we go to closed session 01:39:56.930 --> 01:40:02.060 first? Yes. Ok. Um (item:33:Chairwoman Jackson pauses Open Meeting, to hold Closed Session) this brings us to Item No. 33 01:40:02.069 --> 01:40:05.489 closed session. Uh having convened in a duly noticed 01:40:05.500 --> 01:40:10.588 open meeting. The Commission will now at 11:12 on June 01:40:10.600 --> 01:40:14.039 15, 2023, hold a closed session pursuant to Chapter 01:40:14.048 --> 01:40:20.250 551 of Texas government code sections 551.071, 551. 01:40:20.259 --> 01:40:24.458 074 and 551.076. And we'll be back in a few minutes. 01:40:29.500 --> 01:40:34.609 (item:33:Chairwoman Jackson concludes Closed Session, Public Meeting resumed) Closed Session is hereby concluded at 11:44am on June 15, 01:40:34.619 --> 01:40:38.449 2023. And the Commission will resume its public meeting. 01:40:38.798 --> 01:40:41.289 (item:33:Motion to request Attorney General file a petition to TX Supreme Court of Appeals) Having met in closed session. I'll entertain a motion 01:40:41.298 --> 01:40:44.168 to request the Attorney General file a petition for 01:40:44.180 --> 01:40:47.520 review with the Texas Supreme Court of the 3rd Court 01:40:47.529 --> 01:40:52.104 of Appeals decision in RWE renewables, America's LLC 01:40:52.384 --> 01:40:57.515 and TX Herford Nguyen, LLC versus Public Utility Commission 01:40:57.524 --> 01:41:04.444 Case No. 032100356CV. So moved. Second. I have a, 01:41:04.475 --> 01:41:07.185 I have a motion and a second. All in favor, say aye. 01:41:07.265 --> 01:41:09.583 Aye. Motion passes. 01:41:12.119 --> 01:41:15.869 Next up is Item 15. Mr. Journeay, will you please lay 01:41:15.878 --> 01:41:16.909 out this item? 01:41:21.810 --> 01:41:25.708 (item:15:53601, Application for Oncor Electric Delivery Co. to change rates) Item 15 is Docket 53601. Application Oncor Electric 01:41:25.720 --> 01:41:29.329 Delivery Company to change rates. Uh motion was for 01:41:29.338 --> 01:41:33.048 rehearing was filed by multiple parties, multiple parties. 01:41:33.060 --> 01:41:36.939 Excuse me. And Commissioner Cobos had a memo. Commissioner Cobos, 01:41:36.949 --> 01:41:40.470 will you please um walk us through your memo? Thank 01:41:40.479 --> 01:41:43.548 you. Yes. (item:15:53601, Commissioner Cobos’ lays out her memo) So um my memo provides proposed changes that 01:41:43.560 --> 01:41:46.048 would make the Commission's order on rehearing more 01:41:46.060 --> 01:41:49.619 accurate, clear and consistent with prior Commission 01:41:49.628 --> 01:41:54.878 orders. I will note that um based on a late morning 01:41:54.890 --> 01:42:00.088 um identification of, of um some language um for finding 01:42:00.100 --> 01:42:05.680 a fact 282. In my memo on page 5, I would 01:42:05.689 --> 01:42:11.449 like to make a um clarifying question and that is um 01:42:11.458 --> 01:42:16.939 where the fact say states. Oncor's FERC account 368 capacitor 01:42:16.949 --> 01:42:21.449 cost should be allocated on the basis of NCP demand. 01:42:21.458 --> 01:42:27.500 To um I would replace its retail delivery with to all 01:42:27.509 --> 01:42:32.229 rate classes. That is a, a change I'd like to make, 01:42:32.239 --> 01:42:34.390 to make it consistent with the rest of the order. 01:42:36.369 --> 01:42:39.298 I thought you had just gone OPAC on us. You know, 01:42:39.989 --> 01:42:44.168 like there's always a part of OPAC in me Will. 01:42:46.060 --> 01:42:49.180 I'll entertain a motion to grant rehearing. (item:15:53601, Commissioner Glotfelty's thoughts on remand) Can I talk about 01:42:49.189 --> 01:42:52.020 one thing real quick about this, about the, the remand 01:42:52.029 --> 01:42:56.189 issue. And the um so there are two parts of this, these 01:42:56.199 --> 01:42:59.319 remand requests that I think are really right for us 01:42:59.329 --> 01:43:03.128 to discuss, discuss. And, but they're not in this docket. 01:43:03.779 --> 01:43:06.708 Um I think the proposed interconnection timelines that 01:43:06.720 --> 01:43:09.229 Pioneer and TARGA have proposed are really important. 01:43:09.239 --> 01:43:13.819 As we continue to grow the system. Um I do not think 01:43:13.829 --> 01:43:17.750 they should be specifically targeted towards, to Oncor. 01:43:18.020 --> 01:43:20.579 We ought to have that broader discussion on a statewide 01:43:20.588 --> 01:43:23.628 basis about how we ensure that interconnection process 01:43:23.640 --> 01:43:27.729 facilities are paid for in an open and transparent 01:43:27.739 --> 01:43:32.810 way. So similarly, with the DESR provisions that 01:43:32.819 --> 01:43:37.149 Hunt had requested. Um it would be great in my opinion 01:43:37.159 --> 01:43:41.289 for us to adopt this remand. Um but it would only apply 01:43:41.298 --> 01:43:44.319 to one utility and that doesn't solve the problem throughout 01:43:44.329 --> 01:43:47.449 the state. So as we continue to work down this effort 01:43:47.458 --> 01:43:51.149 with our DESR rulemaking. I think it's important 01:43:51.159 --> 01:43:54.909 that we take that up expeditiously that it doesn't 01:43:54.918 --> 01:43:57.289 apply to just one utility as it would if we had have 01:43:57.298 --> 01:44:01.458 modified it here. But that we address that for statewide 01:44:01.509 --> 01:44:05.409 issues and uh try to create clarity. So and one 01:44:05.418 --> 01:44:07.739 thing that I, I meant to say on the, the Pioneer 01:44:07.750 --> 01:44:13.449 and TARGA remand. Is that um, uh the Hunt Energy, we do have 01:44:13.458 --> 01:44:16.979 a docket already. Uh going down the road discussing 01:44:16.989 --> 01:44:19.750 DESRs, uh where this can be addressed. At 01:44:19.759 --> 01:44:24.689 some point in time here, um towards uh we, we're 01:44:24.699 --> 01:44:29.168 gonna open up Section 25 of our code to um uh to address 01:44:29.180 --> 01:44:31.109 transmission issues. That's where their interconnection 01:44:31.119 --> 01:44:33.899 timelines and things would be addressed. So, uh I'm 01:44:33.909 --> 01:44:37.009 hopeful that uh we can address some of those uh this 01:44:37.020 --> 01:44:40.100 year. Uh in a rulemaking when we open up Section 25. 01:44:40.109 --> 01:44:42.100 And, and my understanding is that is moving forward. 01:44:42.109 --> 01:44:45.259 So, so we, we should be able to see something soon 01:44:45.958 --> 01:44:48.390 produced from that. So I, I don't think Commissioner 01:44:48.399 --> 01:44:51.390 Cobos has to worry about any changes to her proposal. 01:44:51.479 --> 01:44:54.470 Absolutely not, I am fully in support of your proposal. I appreciate 01:44:54.479 --> 01:44:57.338 the comments, Commissioner Glotfelty. Um with that, 01:44:57.350 --> 01:45:00.329 (item:15:53601, Motion grant the party's hearing & make changes to the order) um I would move to grant the party's motion for a hearing 01:45:00.338 --> 01:45:02.770 and make changes to the order, the Commission's order 01:45:02.779 --> 01:45:05.088 on rehearing, consistent with my memo. And your discussion. 01:45:05.100 --> 01:45:09.259 And my discussion. Second. My 2nd changes there. Including 01:45:09.270 --> 01:45:12.668 the changes you. Yes, including the changes. And we have a motion 01:45:12.680 --> 01:45:17.029 and a second. All in favor, say aye. Aye. Motion passes. 01:45:19.369 --> 01:45:21.649 (item:33:Chairwoman Jackson adjourns meeting) There being no further business to come before the 01:45:21.659 --> 01:45:24.390 Commission. This meeting of the Public Utility Commission 01:45:24.399 --> 01:45:28.359 of Texas is hereby adjourned at 11:49am.