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Uh, good morning, ercot, board of directors and guests. I'm bill flores and I hereby

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reconvene and call to order the december 8th and ninth 2025 meeting of the board.

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this meeting is being webcast live to the public on kots website. I would like to

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provide puc chair thomas gleason, the opportunity to reconvene the open meeting of

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the public utility commission of texas. Thank you, mr. Chairman. This meeting, the public

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utility commission of texas will come to order to consider matters have been duly posted with the

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secretary of state for today, december 9th, 2025.

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uh, thank you chair gleason. The antitrust admonition and security map

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were included with the posted meeting materials. Uh,

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and we, uh, are now open for comments. Chad, has anyone expressed an interest in, uh,

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commenting to the board today? No one has expressed an interest chairman. Okay. Thank

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you, chad. Uh, our first agenda item is, uh, ercot,

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ceo. Pablo vegas is going to make his presentation with the ceo

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report, pablo.

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all right. Thank you, chair flores, and thank you everybody for your

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participation today and your interest in the important work that we are doing at

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ercot. In this morning's update, I'm excited to share

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erco t's new vision and mission and values.

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the, as the grid has evolved, our strategies have evolved along with it,

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and we're aligning our core vision and our mission to the needs of the market. And

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we've established a set of values that we believe reflect how our employees

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want to work and experience their careers at ercot. I'm gonna touch base on

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some of the changes in our supply mix since last winter. I have

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an update on our mobile generation solution that we've been talking about in san antonio,

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as well as the related reliability must run con, uh, contract with the bro three

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unit. I'm gonna discuss some of the progress being made on the provisions in

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senate bill six and the roadmap ahead of us as it relates to our op operations

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and markets and planning work. And then I'm gonna close, like I always do, with some thanks

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and appreciation for some of the incredible accomplishments that have been,

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uh, delivered since our last time together as a board.

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here we go. A year ago,

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we defined the concept of ercot 4.0 and

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what it represents in relation to earlier periods of ercot

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operations. And at a high level, it represents

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a transition in our market that is characterized by high and very rapid

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growth of intermittent and short supply, uh,

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short duration supply resources. It's characterized by a rapidly

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changing customer base that includes price responsive loads like crypto

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miners, rapidly growing large scale data centers, and

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continued penetration of distributed energy resources throughout the grid

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from people's homes to their businesses and locations across the distribution system.

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it's a significant shift in operational requirements, and it represents an opportunity

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to create a more resilient and cost-effective grid for the benefit of

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all texans. This shift created an opportunity to

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re-look at our vision and our mission, and to make sure it was aligned by the success opportunities

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that ercot 4.0 presents. And that success depends on keeping

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reliability as the bedrock of our organization.

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reliability in today's definition of reliability, which includes

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a society that depends fully on the availability of

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electricity for nearly every facet of modern life. And to do so, we're going

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to have to embrace innovation as one of our core success factors to keep up with

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the pace of change. Our new vision is to be the

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most reliable and innovative grid in the world,

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not just in texas, not just in the united states, but in the world.

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we are one, if not the leading grid globally when it comes to operational

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and technical complexities. And to be successful, we

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need to be a clear leader on a stage that represents the entirety of this planet,

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the impact of what texas represents to the global economy today.

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and if you look at it just on energy, we produce more than 40% of this

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country's oil. 30% of this country's natural gas

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have a total refining capability of about 30% of what the

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united states uses. That's just an impact inside of texas

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and the united states. But to be important in the future, to be successful, we're

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gonna have to be a global leader on that stage. Our mission

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is what we do every day to achieve this vision,

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we will ensure a reliable grid with competitive and cost

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effective electricity markets. That is our mission. It is the

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re again, reliability at the core of it, and we recognize the critical importance

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of a cost-effective grid when it comes to a thriving economy.

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and then our values that we developed, we did that directly with input

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from many, many ercot employees. We held focus groups and gathered surveys

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from hundreds of our employees who spoke to what it should feel like to work and

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to be a part of this organization, and what a set of core values that

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will create an environment that will foster both individual and organizational successes.

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I'm not gonna review each one of the values that are on this slide, but you can see that each

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one of them builds upon and supports each other to create an environment where we

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can achieve our vision and achieve success in our daily mission.

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so changes that we've seen in the grid since last winter, 2025

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a year, 2025, is gonna represent a year with tremendous supply growth

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on the ercot grid. We expect to see nearly 16 gigawatts

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of new supply connected onto this grid in 2025, just

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since the end of last winter. This is a chart showing from march 1st through

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november 1st. This year, we'll have connected approximately 11 gigawatts

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of new capacity. You can see the large majority of it continues to be in

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the two resource types we've been seeing over the last several years. Storage. We're

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now representing storage as with both the capacity, uh, peak

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capacity number, as well as its energy capacity, because since storage is duration

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limited, the energy measure is a more appropriate measure of its capacity.

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and while we are still seeing low numbers in our natural gas connections into the grid,

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we are seeing significant improvements in the natural gas pipeline expressing

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potential interest in connecting into the ercot grid.

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I think it's helpful to show this comparative, I've done this in the past as well as

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we get into the winter season, understanding the impact of supply additions

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in both the winter and summer peak conditions. And you can see from this

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integrated slide, there are very significant differences in the low carrying capabilities

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between these different resources at peak based on their production type.

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I share this to try to help explain some of the differences why during this past

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summer, during the peaks, we haven't really been experiencing scarcity grid conditions

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because the significant additions of solar and battery storage

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are optimally positioned to help during those summer peaks in

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the afternoons and early evenings. As the sun is transitioning out, winter

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still represents the higher risk period in the ercot market because fewer

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of these resources that are being added are available during the winter peak

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periods, which tend to be in the mornings before the sun rises, or in the

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early evenings right after it sets.

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I think it's important to highlight some of the progress that has been made on the weatherization program

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through our first four years, and this is a focus on our winter weatherization.

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since the inception of this program in in, uh, december of 2021,

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we have completed over 4,000 winterization inspections of both generation

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and transmission facilities. We inspect them for various preparation

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measures that are intended to reasonably ensure sustained operation at weather

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zone specific cold and hot conditions.

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we held a winter weatherization workshop, uh, in october on the 16th

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this year, we had over 200 people attend that workshop and

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it highlighted best practices presentations from three of our market participants from

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lcra, from cps energy and from an l

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the winter 2025 and 2026 inspection period. Started a week ago

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today on tuesday, and we plan to have a minimum

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of 450 inspections over the course of this winter.

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I included this, uh, graph on the right side, the winter cure periods

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because I think it's important that not only are we going out inspecting, but this shows

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how we have been seen progress on the performance of those inspections

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over the course of time. And so the cure period is

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a measurement that's found when we have found instances of non-compliance with the weatherization

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rule. And then the dealing with those, uh, we give them a cure period in

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order to deal with those findings of non-compliance. And you can see from beginning in the winter of

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2022 to 2023, the instances that we had

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a total of, uh, 75, 55 of those were at, uh, transmission

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service. And, uh, 20 of those at, uh, supply resources. And those have decreased

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over time to a total of only five over the last winter. And

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we've had similar, similar benefits and performance, um, as well

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in the summer periods. Our cure periods have gone from about 15 in 2023

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down to three this past summer. So significant pro improvements

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in performance and findings of non-compliance. Over the course of

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the three years we've been run running the weatherization program the three, four years,

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I wanted to give a brief update on the lifecycle power mobile generation

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units that, uh, are, have been brought over into the san antonio area to help with

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that south texas, uh, transmission constraint as of october 22nd.

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all of those mobile generating units had had been able to initially

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synchronize with the ercot grid, and as of this week, all 15

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of them have been successfully tested and are available for dispatch under emergency

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conditions. And as a reminder, the contract for these mobile generation

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units runs through march of 2027, and we have the right

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to terminate that earlier if the reliability need no longer exists going forward.

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related to that, an update on the reliability must run agreement that we have in

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place with cps energy, uh, on the rig three unit, the outage,

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it began last march, if you recall, after the approval by the board last december

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a year ago, uh, from now and to date, the biggest and

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most significant issue in that outage period was a replacement of that number nine boiler

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super header, uh, super heater header. The work was completed

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for that replacement in october, uh, end of october this year. Testing

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completed most recently in november, we had a issue

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identified by cps that there were some impurities in the turbine bearing lubrication oil,

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and some additional work was gonna need to be done to, uh, refurbish those installed

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bearings that could cost an additional 1.8 million, potentially

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add about a 10 day delay to the schedule. So as of today,

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it's currently scheduled to return to service on december 15th. There is a little bit of

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risk to that schedule based on the refurbishment work that needs to occur.

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so shifting gears into the, um, regulatory and policy arena,

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we've talked about senate bill six and its broad impacts several times in, uh, in these

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board discussions. It's driving four significant new rulemakings. One

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is focused on the load forecast standardization for large loads,

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very significant part of the provision, which is intended to give us better clarity

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and better accuracy on the numbers that we expect in that load forecast, which as I discussed

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in my, in my last update a couple months ago, is really the foundation for all

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of the planning and all of the reliability reporting that we do. We

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have another rule making on large load, uh, interconnection standards,

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a third one on cost allocation for transmission infrastructure, and then

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a fourth on the net metering rules, which is addressed in this slide. We've established

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an interim net metering review process that aligns with what the proposed rule is

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that's gonna be going through. We already have seen two net metering arrangements

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formally submitted for our review at this time. And we're gonna need,

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our requirements are we have to go through and complete our analysis within 120

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days of noti notifying the puc that we've received all of the completed

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information for these net metering arrangements, and we're coordinating very closely with

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staff on those puc staff on those. We expect all of these

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rulemakings to under to go through the process in 2026

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with the net metering and the forecast standardization proceeding first,

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and then followed by the other two, uh, rulemakings.

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I had like to give a little bit of a look ahead as to what's still on the agenda

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and, uh, important work coming up. So from a current operations,

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I'll, I'll really highlight the noer 2 45. If you recall. This is the operating

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guide change that is related to the requirements for ride through requirements

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on inverter based resources through, we probably will be looking at

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reviewing the submissions that we've received in for extensions

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and for exemptions for, for compliance with that rule through

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the second quarter of 2026. And then the actual reliability assessments

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that we then run following, having all of that data in will

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proceed in the second half of 2026 with decisions on what can be exempted, what

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can be extended in terms of timing and compliance. For the noga 2 45 rule,

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there's quite a lot on the market design plate, the drrs,

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dispatchable reliability reserve service, we talked about the two npr r related

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to that yesterday. We've got the residential demand response program,

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uh, that we also discussed in yesterday's update. We have a new large

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load demand response program that is coming out of, uh, senate bill six. And

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so we'll be working on the development of that. And then, of course, from the prior

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legislative session affirming requirement, that is a significant

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piece of market design, uh, protocol work we're gonna be doing in 2026,

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and that needs to be completed by the end of this, uh, next year.

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and then at this time of year, from a planning perspective, we publish a lot of end of year

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reports. We publish the capacity, demand and reserve reports. That looks out five years

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gives a kind of a projection if certain amounts of resources

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are built and certain amount of load and materializes based on well-established

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criteria that we've used for many years. Then what does the reserves look like under those conditions?

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we've got the 2025 regional transmission plan that's gonna come out. This,

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uh, this month we publish a constraints and needs report. This is a

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focus on transmission constraints. We've also have the reliability

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standards analysis that's gonna be taking place in 2026. This will be the first formal

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evaluation of the new reliability standard that was established for

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ercot in 2024. We'll be doing that full scale analysis in 2026.

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all of these reports are going to indicate similar messaging, but

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in the very short term, the additions of supply have been helpful in

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improving the reliability characteristics of the grid. In the long term, there's

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increasing risk if the load materializes and infrastructure development doesn't keep

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up. The messaging and the, the, the risks that are

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identified are consistent with reports we've seen over the last year, and depending on

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the amount of load that comes and the pace at which it comes really is the key drivers

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to the degree that that risk may or may not be materialized.

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we hosted, um, a grid x event here at, um,

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uh, the, actually the met center here just a couple weeks ago.

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nerc does this every year or every other year. They do a large scale grid x exercise,

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which is intended to practice a response to both cyber and physical attacks

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on the electric grid. This year, we participated in, in three different ways.

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one, we had our it and our cyber teams compete in a hands-on technical

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exercise to identify and stop cyber attacks. Specifically. That was done

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a little bit earlier this year. The overall ercot leadership team,

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in addition to participation with the public utility commission, the texas department of emergency

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management, the fbi and other state agencies

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all gathered together, and we did a tabletop exercise that was focused on

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decision making, coordination and communication during a very complex

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cyber physical attack scenario. That was a couple weeks ago. And

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then our ercot operations team used their training simulator to emulate

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and respond to grid x attacks according to their regular training cycles.

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so, very active engagement in business continuity and disaster recovery

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preparations. These tabletops are extremely helpful in aligning roles

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and accountabilities during a crisis event, and making sure that our communication capabilities

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are both agile and ready for the challenges of the moment.

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I'd like to remind everybody coming into the winter season through of the various communication channels that

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are available at ercot to get information. Our website, you can

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see that on the top right of this slide, we have about a dozen different dashboards that help to inform

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what's happening on the grid in real time. We also have our texas

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advanced notification system. Texans, you can sign up to get email updates if there

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are changes to grid conditions that require any kind of awareness or response

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by the general public. And we also are on social media. You can follow us

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on linkedin, on x, on facebook, and on instagram.

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so lots of different channels and avenues to get real time updates, as well as to get

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informational and educational updates on what it is that our is focused on, on the priorities

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of the organization.

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and then I'd like to finish with, uh, some employee recognitions. So

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we've had three things that I wanna recognize. The first, and we talked about this yesterday, and I think matt

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marinas did a fantastic job of acknowledging the breadth, the complexity

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of this implementation and go live. And I wanna, again, reiterate now

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on behalf of everybody within our organization, our thanks to the

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broad market, to the public utility commission, to the agencies that

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we work with, and a deep thanks to all of the employees inside of our organization

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for the work that went into the realtime ization plus battery implementation.

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this is the most significant change to our real-time market

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since we converted from a zonal market to a nodal market back in 2010.

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very significant complex change, intense coordination required across

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the entire market participant list, and it went extremely

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well. So a huge thanks to everybody involved in that.

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I also want to call out those that helped to lead the core values work

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at ercot. It took weeks and weeks of work to do the surveys

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and to host the listening sessions and to gather the input and to synthesize

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and to adjust it and continue to iterate on it to get to those final values

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that we developed. And so a big thanks to the team that led that. And then similarly,

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we had an internal team that really helped to lead a successful employee summit for ercot.

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we do a once a year all employees gathering. We did it on october 14th this

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year. We had over 600 ercot employees participate, where we got together

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to talk about our core strategies, talk about why our vision and

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our mission and our values needed to change, and the opportunities and the

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challenges that laid ahead of us. So an excellent production and very well done and think

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a very high value use of time. So with that, I'll pause

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chair flores, if there's any questions from, uh, the board or from anyone else, I welcome

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the feedback or questions public. Can we ask those, uh, ercot team members to stand

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up that you just recognized the, for all three of these,

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uh, categories, correct? Yeah, if, uh, any of you are named on

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any of these three categories, if you're in the room, please, please stand up. I already, I know there's

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many of you in here, so please stand. There'll be some somewhere for record. Don't

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be shy. I was gonna give them applause, but there's nobody to applause. Well,

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, I think we've got some

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high people. Great work. Any questions for pablo?

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well, great report and, uh, keep up the great work. We look forward to, uh, the excitement

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that we have in 2026. Thank you. With that, we're

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gonna move into committee reports and we'll start with peggy higg, who serve as the chair

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of the human resources and governance committee. Uh, she will present agenda

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item 12.1, which is, uh, the committee's report. It has two associated

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voting items. Peggy, thank

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you, chair forez. The human resources and governance committee had a robust

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agenda yesterday with, uh, ms. Billman to two voting items coming outta general

291
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session and two voting items in executive session. The first

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item, which is voting item, was, uh, a, a discussion with pablo

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about the, uh, recommendation regarding the ercot vision, mission,

294
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and core values that he just referenced. And there's a, there's a, a memo

295
00:21:51,505 --> 00:21:55,405
in the, uh, materials, uh, for the board. This is

296
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the second time that the human resources and governance committee heard from pablo on this. And

297
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I think we were all very impressed with the process and the thoughtfulness

298
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that went into the creation of the new vision and mission

299
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core values. Uh, second, we reviewed

300
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the ercot government documents, and there are, were no suggested

301
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changes at this time. Third, we, uh, reviewed

302
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the periodicity of the, uh, ercot board meetings with

303
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the comparison to other isos. There'll be no changes proposed

304
00:22:29,865 --> 00:22:33,765
to the ercot periodicity at this time. And this review will be filed

305
00:22:33,965 --> 00:22:35,915
with the commission as required by the regulations.

306
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uh, the fourth item, which is a voting item, is that the committee voted

307
00:22:43,385 --> 00:22:47,175
to, uh, recommended that the board approve the 2027 board

308
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meeting schedule and annual meeting of the members. Uh,

309
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the, uh, proposed meeting dates are february 8th and ninth, april 12th,

310
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13th, june 21 in 22, september, 2020,

311
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2021, december 6th and seventh with the annual meeting,

312
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uh, on december 6th, 2027.

313
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fifth, we looked at the, uh, annual review of the board committee

314
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membership. We had just, uh, gotten our new compliment

315
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of board members, which we're very excited about, and we had reviewed that

316
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at the last board meeting. So no changes are recommended at this time,

317
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but the committee will continue to review a committee membership as needed.

318
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we also looked at the, uh, annual committee

319
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self-evaluation surveys, results of the human resources

320
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and governance committee, the technology security committee,

321
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and the finance and audit committee. And, uh, some materials were

322
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filed in, in the board book, but the committees are all

323
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functioning well. We also heard from gilbert hughes

324
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and mark minor presented their annual communications overview.

325
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and we heard from morris back on the, uh, human resources

326
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report for 2025, as well as initiatives in 2026.

327
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with that, we've got two voting items coming out of the general session, and,

328
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uh, if, if it's okay with you chair, I'll

329
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go ahead and make those motions. I move that the board accept the

330
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ercot vision, mission, and core values is recommended by the human resources

331
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and governance committee. Is there a second? Okay, chris, thank you.

332
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all in favor? Aye. Aye. Any opposed? Any abstentions?

333
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okay. The new mission, vision, and core values are approved.

334
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the second motion is I move that the board accept the 2027 ercot board

335
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meeting schedules in 2027, annual meeting of the members as

336
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recommended by the human resources and governance committee. Is there a second?

337
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okay, kathleen, thank you. All in favor? Aye. Aye. Any

338
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opposed? Any abstentions? Okay. The meetings are set for next year or for 2027.

339
00:25:08,625 --> 00:25:12,525
uh, next. Thank you. Thank you. Any more to your report? No, that concludes it. Okay. Thank you.

340
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uh, now we're gonna transition to the finance and audit committee report where I temporarily

341
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served as chair. Uh, we have one associated voting item.

342
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uh, let me walk through the report first, then we'll have the voting item.

343
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uh, the committee went through its normal reports, uh, debt compliance

344
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investments, and went through the, uh, projected outlook for the

345
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full year 2025 financial performance of the organization.

346
00:25:38,905 --> 00:25:42,465
all the performances were nominal and as were expected. Uh,

347
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now in terms of, uh, we also, the committee also reviewed the, uh, soc

348
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audit report. And it had a standard, uh, this is

349
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a standard annual requirement. Uh, the, uh, organization

350
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received an unmodified or clean opinion. The independent auditor also

351
00:26:00,285 --> 00:26:04,205
provided information about the enhancement to the control environment as the, uh,

352
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treasury management system has continued to be automated over the last couple of years.

353
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and so, on behalf of the finance and audit committee, I move that the board accept the 2025

354
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organization system, organization and control audit report is presented yesterday

355
00:26:17,945 --> 00:26:21,685
by weaver. Do I have a second? Second. Thank you, chris. All in favor?

356
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a aye. Any opposed? That motion is carried.

357
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uh, there is no other, uh, reporting. Uh, that concludes by

358
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report for the finance and audit committee. We'll now transition to john

359
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swenson, who will present a agenda. Item 12.3, the technology and security committee

360
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report. John? Thank you mr. Chair. Um, technology and

361
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security committee met yesterday morning in both regular and executive

362
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session. In regular session, we had a guest speaker,

363
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dr. Lee shay, who's a harvard professor and member of the board of

364
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pjm, who presented a roadmap for integrating a agentic

365
00:26:59,865 --> 00:27:03,245
ai into power systems. A very interesting discussion and continues,

366
00:27:03,985 --> 00:27:07,925
uh, with our ongoing ai theme. Um, agen ai enables

367
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large language models to interact with real world workflows, offering human

368
00:27:12,905 --> 00:27:16,845
ai collaboration rather than replacement. It can streamline things like

369
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interconnect studies, optimizing dispatch enhancing reliability through tools

370
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like reinforcement learning and probabilistic scenario planning. Um,

371
00:27:26,525 --> 00:27:30,245
ercot is well positioned to lead in the space and use this technology

372
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with opportunities to reduce engineering overhead and accelerate the grid transformation,

373
00:27:35,905 --> 00:27:39,425
uh, with an emphasis on secure ethical human in the loop ai

374
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uh, development. Following his presentation,

375
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uh, we went into our annual committee self valuation.

376
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and as you've heard there, that was all fine. We had a good discussion. Uh, would mention

377
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that ai is something that we are explicitly incorporating into

378
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our charter so that we will pay more attention to that in the future.

379
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and we'll be working with jp and his team on prioritizing

380
00:28:05,555 --> 00:28:08,665
some of the ai investments for the company. Um,

381
00:28:09,745 --> 00:28:13,675
we had a brief technical overview of rtc uh, plus

382
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b mainly because we, we heard from matt and others in the full board.

383
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um, and we talked about some of the lessons learned and, and some of

384
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the problems that we discovered along the way, which as, as, uh,

385
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jp has told us we're, we're gonna be in another six months of sort of bedding

386
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down that technology and getting it stabilized. So we'll be, uh, we'll

387
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be continuing to follow that up. Um, but, uh, it, it has obviously

388
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gone extremely well. Um, we had our usual overview

389
00:28:43,825 --> 00:28:47,765
of the 18 grid transformation initiatives, uh, was a request from the

390
00:28:47,925 --> 00:28:51,885
board that, uh, there'll be a little more prioritization on the things that

391
00:28:52,105 --> 00:28:55,725
are really, really important and more imminent versus the things that are still

392
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in the planning stages. Um, and then we, as we

393
00:29:00,325 --> 00:29:04,115
always do, we talked about future agenda items and you know, what

394
00:29:04,405 --> 00:29:08,385
topics that we wanted to bring back in front of the, the committee, including things

395
00:29:08,875 --> 00:29:12,065
perhaps related to battery and also nuclear. Um,

396
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and uh, as I mentioned, we wanted to make sure we prioritize the,

397
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uh, initiatives of the technology team. That concludes my report. Okay.

398
00:29:21,645 --> 00:29:25,525
thank you john. And, uh, you made a comment about the committee's self valuation. So I need to amend

399
00:29:25,845 --> 00:29:29,765
the f and a committee report that the f and a committee did, uh, review

400
00:29:30,085 --> 00:29:33,925
the committee's self-evaluations and found that the committee was operating effectively

401
00:29:34,465 --> 00:29:38,205
and appropriate with this charter. Uh, with that we'll move to agenda item

402
00:29:38,805 --> 00:29:42,745
13.1. Well, let me, before I go anywhere, were there any questions from board members on

403
00:29:42,965 --> 00:29:46,365
any of the committee reports? Okay, thank you.

404
00:29:47,025 --> 00:29:51,025
uh, we'll move to agenda item 13.1, which is an adjunct membership approval of

405
00:29:51,395 --> 00:29:54,965
agen infrastructure llc membership for membership

406
00:29:55,555 --> 00:29:59,465
year 2026. Samuel branton with infrastructure

407
00:30:00,525 --> 00:30:03,985
llc is with us via webex. If the board has any questions for agtech,

408
00:30:04,825 --> 00:30:08,805
uh, chad sealey will present this item. Chad. Alright, thank you chairman.

409
00:30:09,105 --> 00:30:12,985
up on the screen as a short decision template that explains the

410
00:30:13,205 --> 00:30:16,605
background and rationale for agtech infrastructure.

411
00:30:17,255 --> 00:30:20,655
being an adjunct member for 2026, uh, consistent

412
00:30:21,325 --> 00:30:24,915
with the bylaws, adjunct membership requires board approval. Adjunct

413
00:30:25,405 --> 00:30:29,405
membership does not have any other voting rights except for

414
00:30:29,965 --> 00:30:33,835
participating at the protocol revision subcommittee in which they can vote. Uh, gentech

415
00:30:34,325 --> 00:30:37,765
infrastructure is going to align itself with the independent generator segment

416
00:30:38,505 --> 00:30:41,965
for 2026. And so we need board approval to approve their application.

417
00:30:44,515 --> 00:30:48,485
does anyone wish to make a motion in this regard? So moved. Thank you bill.

418
00:30:48,785 --> 00:30:52,665
second. So from chris, thank you. All in favor? Aye.

419
00:30:53,225 --> 00:30:57,185
aye. Any opposed? Any abstentions? Okay. Gentech membership is

420
00:30:57,645 --> 00:31:01,445
approved for 2026. Next is agenda item 13.2,

421
00:31:02,085 --> 00:31:05,965
which is a non opt-in entity load. Jo load zone change.

422
00:31:06,945 --> 00:31:10,895
uh, this is a request of lamar electric cooperative, uh, brian story,

423
00:31:11,265 --> 00:31:15,165
the ceo with lamar electric co cooperative along with ramsey crisp

424
00:31:15,545 --> 00:31:19,445
of se energy, which is part of snyder engineering. Are with us

425
00:31:19,605 --> 00:31:23,585
in person today. If the board has any questions for lamar electric cooperative, kim

426
00:31:23,805 --> 00:31:25,505
rainwater present this item. Kim?

427
00:31:29,635 --> 00:31:33,045
nope. Okay. Good morning. Uh, kim rainwater

428
00:31:33,665 --> 00:31:37,645
for ercot legal. Uh, we have a request from lamar electric

429
00:31:37,815 --> 00:31:41,635
co-op, as you can see, to move about 60 megawatts of peak

430
00:31:41,995 --> 00:31:45,115
load from the rayburn electric co-op load zone

431
00:31:46,105 --> 00:31:49,725
to the competitive north load zone. Uh, lamar is present,

432
00:31:50,625 --> 00:31:54,625
uh, with schneider engineering for any questions about the reason for

433
00:31:54,845 --> 00:31:58,725
the change, but, uh, the protocols do require board approval.

434
00:31:59,345 --> 00:32:02,925
so for our part, ercot does recommend approval,

435
00:32:03,385 --> 00:32:07,365
um, mainly for three reasons. You can see there on the

436
00:32:07,485 --> 00:32:10,905
cover slide that the lead time is 48 months. So

437
00:32:11,575 --> 00:32:13,835
these changes wouldn't go into effect until january 1st, 2030,

438
00:32:15,735 --> 00:32:19,705
which built into the process is sufficient time to

439
00:32:19,925 --> 00:32:23,365
make ready the market, um, including regarding congestion,

440
00:32:24,005 --> 00:32:27,785
revenue rights, auctions. And, um, we did

441
00:32:28,045 --> 00:32:31,965
a little bit of research. Uh, we've, we've identified two prior

442
00:32:32,565 --> 00:32:36,185
occasions at least when the board approved similar requests. Um,

443
00:32:36,745 --> 00:32:40,565
one from guadalupe valley electric cooperative cooperative move from

444
00:32:41,045 --> 00:32:44,045
lcra to a competitive load zone in 2014.

445
00:32:45,505 --> 00:32:49,265
and then we had one more recently in 2023 when, um,

446
00:32:49,545 --> 00:32:53,485
the hamilton load moved from competitive to lcra and that was

447
00:32:53,605 --> 00:32:57,425
after the brazos uh, bankruptcy. So,

448
00:32:58,145 --> 00:33:01,795
um, for, uh, from our review, ercot smes

449
00:33:02,155 --> 00:33:05,805
have reviewed and identified no reason not to approve

450
00:33:06,635 --> 00:33:10,625
lamar's request. Um, with that we would request the

451
00:33:10,845 --> 00:33:13,985
board's approval. If you have any questions for

452
00:33:15,175 --> 00:33:16,985
brian or, uh, ramsey,

453
00:33:19,635 --> 00:33:23,325
are there any questions for brian or ramsey the principals

454
00:33:23,945 --> 00:33:26,245
or for kim who's presenting this?

455
00:33:28,365 --> 00:33:32,345
I don't hear any, no comments. So for that, I'll entertain a motion to

456
00:33:32,675 --> 00:33:36,565
approve this change. I'll moved. Okay. Thank you. Julie, do I have a second?

457
00:33:37,385 --> 00:33:41,205
second. Uh, kathleen. Peggy? Uh, all in favor?

458
00:33:41,945 --> 00:33:45,605
aye. Aye. Any opposed? Okay, the motion is carried.

459
00:33:46,825 --> 00:33:50,305
uh, the next thank you kim. Uh, the next is, um,

460
00:33:51,195 --> 00:33:54,925
this is a mouthful. Here we've got a request from bher, power

461
00:33:55,565 --> 00:33:59,365
resources and agenda item 13.3, uh, with an application

462
00:33:59,905 --> 00:34:03,565
for permanent site specific exemption from compliance with paragraphs

463
00:34:04,155 --> 00:34:07,575
five and six, a protocol section 10.3, 0.2

464
00:34:08,205 --> 00:34:12,165
0.3, which is generation netting for ercot poll settlement

465
00:34:12,825 --> 00:34:16,325
meters. Uh, neil connor with bher power

466
00:34:16,885 --> 00:34:20,245
resources is with us via webex. If the board had any questions for bher

467
00:34:21,305 --> 00:34:25,285
and brent del will present this item. Brent, thank you chair. You want

468
00:34:25,365 --> 00:34:29,315
us say this in a simple format? I'm brent riddell, deputy general counsel

469
00:34:30,025 --> 00:34:33,285
for ercot. Um, I'm here to discuss a-b-h-e-r

470
00:34:34,085 --> 00:34:38,075
power resources exemption request, which was previewed yesterday by tac chair kaitlyn

471
00:34:38,565 --> 00:34:42,515
smith during her report. The decision at hand

472
00:34:42,805 --> 00:34:46,485
before the board is whether to approve a permanent exemption for bher power

473
00:34:47,285 --> 00:34:51,085
resources from an ercot protocol provision. Our rule state that

474
00:34:51,325 --> 00:34:54,925
facilities must connect to the grid only through designated metering points.

475
00:34:56,015 --> 00:34:59,875
there is an exception that exists for auxiliary loads up to 500 kilowatts.

476
00:35:01,345 --> 00:35:04,925
the bher facility located in big spring has been operating for 35

477
00:35:05,375 --> 00:35:09,325
years. It exceeds that 500 kilowatt auxiliary load

478
00:35:09,525 --> 00:35:13,385
limit, um, and reconfiguration to meet the

479
00:35:13,625 --> 00:35:17,045
cap is not practical. In october,

480
00:35:17,965 --> 00:35:21,525
ercot received bhe r's exemption request. At the november tech meeting,

481
00:35:22,065 --> 00:35:25,725
encore supported the request and tac voted to approve it.

482
00:35:26,705 --> 00:35:30,115
uh, tag noted that the facilities configuration predates the current rule.

483
00:35:31,065 --> 00:35:34,805
so the recommendation before you today from our staff is that the board approve

484
00:35:35,385 --> 00:35:39,365
the permanent exemption. And as the chair mentioned, neil connor, general manager

485
00:35:39,705 --> 00:35:43,705
of bhe renewables is presumably joining us from big spring via

486
00:35:43,925 --> 00:35:47,745
webex. If you have any questions, any

487
00:35:48,125 --> 00:35:52,115
questions for brand or for the company representative, with

488
00:35:52,405 --> 00:35:56,285
that, I will entertain this motion, which would be that the board accept the

489
00:35:56,445 --> 00:36:00,355
application for permanent site specific exemption from compliance with paragraphs five

490
00:36:00,665 --> 00:36:04,615
and six of protocol section 10.33 generation

491
00:36:05,285 --> 00:36:09,245
netting for ercot poll settlement meters, which is a request from bher

492
00:36:09,805 --> 00:36:13,715
power resources. Do I have that motion? So moved. Okay,

493
00:36:14,045 --> 00:36:17,625
peggy. Thank you a second, julie. All in favor? A aye.

494
00:36:18,425 --> 00:36:22,255
any opposed? Any abstentions? Okay, that is approved. Thank

495
00:36:22,605 --> 00:36:26,265
you. Alright, the next is, uh, agenda item is

496
00:36:26,725 --> 00:36:29,465
14. There are sub items under this one, uh,

497
00:36:30,765 --> 00:36:34,525
regional planning group projects, which includes three voting items that christie hops

498
00:36:34,945 --> 00:36:38,685
can pres present. The first one that she will present is the agenda item

499
00:36:39,245 --> 00:36:42,875
14.1, which is 25 rpg 0 2 5

500
00:36:43,925 --> 00:36:47,415
a ep, texas cps energy, encore, and cmp texas 7 65

501
00:36:48,625 --> 00:36:52,445
kv step eastern backbone project. We know that

502
00:36:52,665 --> 00:36:56,585
two no votes and two abstentions were cast attack, but tax still has

503
00:36:56,805 --> 00:37:00,605
recommended the project for approval. Christie, please walk us through the project

504
00:37:00,985 --> 00:37:04,775
and then we'll have an opportunity for any further comments. All right. Good morning board

505
00:37:05,125 --> 00:37:09,045
members and bill, I'm glad you had to read that name of that project instead of I

506
00:37:09,405 --> 00:37:13,325
, not me. What a, a great year

507
00:37:13,595 --> 00:37:17,555
it's been to be a part of system planning and watch how we really have

508
00:37:18,205 --> 00:37:22,165
involved here in the ercot market from the landmark decisions

509
00:37:22,515 --> 00:37:25,765
that our regulators made at the puc earlier this spring,

510
00:37:27,025 --> 00:37:30,805
uh, that led forth for reliability plan into the permian

511
00:37:31,245 --> 00:37:34,525
basin and then building off of the work that we started last year.

512
00:37:35,785 --> 00:37:39,305
the board has before you quite an opportunity to

513
00:37:40,005 --> 00:37:43,965
consider a project, um, that I believe will be a big reliability benefit

514
00:37:45,105 --> 00:37:48,445
for continuing to power the state of texas

515
00:37:49,275 --> 00:37:53,105
both reliably and efficiently. So

516
00:37:53,465 --> 00:37:57,125
if you'll indulge me, we've added a few extra slides. Just knowing

517
00:37:57,705 --> 00:38:01,575
the magnitude of this project would like to give some of our newer board

518
00:38:01,925 --> 00:38:05,765
members some history on how we got here. Um, the study

519
00:38:06,005 --> 00:38:09,905
process that we went through and how we came to our decisions and

520
00:38:10,125 --> 00:38:12,605
our recommendations that we have before you today

521
00:38:21,075 --> 00:38:24,695
in 2024, as we were not only looking at the permian

522
00:38:25,135 --> 00:38:29,045
basin reliability plan and how to most efficiently

523
00:38:29,735 --> 00:38:32,685
and reliably serve the needs in the permian basin area,

524
00:38:33,955 --> 00:38:37,745
we also started to observe in our planning forecast the

525
00:38:37,965 --> 00:38:41,865
need out in the future for more transmission to reliably serve the

526
00:38:42,085 --> 00:38:45,845
growing state. And what we saw in that 2030

527
00:38:46,845 --> 00:38:50,755
forecast was a growing demand to near 150 gigawatts

528
00:38:52,365 --> 00:38:56,245
compared to the previous years when we had studied in about the 120 gigawatt

529
00:38:56,805 --> 00:39:00,765
range. So at that time we realized we could not keep planning

530
00:39:00,945 --> 00:39:04,925
the system the way we always had, meaning 3 45 voltage

531
00:39:05,415 --> 00:39:07,485
being the highest level to serve the customers.

532
00:39:09,905 --> 00:39:11,605
at that time, our team embarked

533
00:39:14,585 --> 00:39:18,445
on a process to look not only at planning the system the way we always had, but we

534
00:39:18,605 --> 00:39:21,125
also looked at using 7 65 voltage

535
00:39:22,745 --> 00:39:26,685
in fact building what I would call a super highway. You think about building the interstate system,

536
00:39:27,135 --> 00:39:31,025
connecting your generation in your large load centers. And

537
00:39:31,245 --> 00:39:33,765
we looked at how that might work with our current network.

538
00:39:35,385 --> 00:39:39,265
and we provided two plans throughout 2024 and

539
00:39:39,495 --> 00:39:43,405
filed some comparison documents of the commission that looked at the pros and cons of using

540
00:39:43,755 --> 00:39:47,645
vote. That was back in january.

541
00:39:48,505 --> 00:39:52,365
in april. As I mentioned, the commission made the decision for the permian basin

542
00:39:53,225 --> 00:39:56,615
to use the import path capability at the 7 65 level.

543
00:39:58,395 --> 00:40:02,225
this would allow ercot to start using that in our planning process. As

544
00:40:02,445 --> 00:40:04,565
we looked at the reliability needs for the rest of the state

545
00:40:08,585 --> 00:40:12,525
in the summer, we had a joint project that was submitted through our

546
00:40:12,685 --> 00:40:16,465
normal regional planning group process from encore,

547
00:40:17,285 --> 00:40:20,805
a ep center point and cps that would

548
00:40:21,675 --> 00:40:25,605
have us continue to study the eastern backbone of the 7 65

549
00:40:26,445 --> 00:40:30,445
network. So throughout the summer and this fall, ercot

550
00:40:30,725 --> 00:40:34,685
completed additional sensitivity studies, economic analysis

551
00:40:35,185 --> 00:40:38,725
as well as stability, uh, analysis in coordination

552
00:40:39,285 --> 00:40:42,255
with the stakeholders, reviewing stakeholder comment and input.

553
00:40:43,505 --> 00:40:47,285
and we delivered our final recommendation to the regional

554
00:40:47,685 --> 00:40:51,045
planning group and tac considered in november of this year.

555
00:40:51,835 --> 00:40:54,335
thus it's before you for board endorsement today.

556
00:40:57,225 --> 00:41:00,485
so again, just a little bit of the detail as we went back and looked,

557
00:41:01,555 --> 00:41:04,645
what was the best option to be able to serve the needs of the state?

558
00:41:07,175 --> 00:41:11,005
there are several reliability benefits that I wanna highlight that really

559
00:41:11,465 --> 00:41:14,645
led to our recommendation that's before you today.

560
00:41:16,105 --> 00:41:19,985
the first is if you think about these 7 65 lines, while yes,

561
00:41:20,855 --> 00:41:24,675
7 65 is new to texas, it's not new technology, it's

562
00:41:24,965 --> 00:41:28,885
been in use since the 1960s in the us so it's tried and

563
00:41:29,085 --> 00:41:32,085
true by using this higher voltage

564
00:41:33,095 --> 00:41:37,045
greenfield new right of ways, new build

565
00:41:37,325 --> 00:41:41,125
out of the system that allows us the flexibility we need

566
00:41:41,465 --> 00:41:45,205
to continue taking maintenance outages on the current system. We have,

567
00:41:46,265 --> 00:41:49,675
as we've continued to grow, it becomes more and more difficult each day for utilities

568
00:41:50,785 --> 00:41:53,975
to be able to take the outages they need to maintain lines

569
00:41:54,865 --> 00:41:58,645
to cut in new lines for additions of generation or additions

570
00:41:58,885 --> 00:42:02,725
of loads to the system. So this gave us more flexibility from that

571
00:42:02,925 --> 00:42:06,895
perspective. You'll see in the comparison chart

572
00:42:07,315 --> 00:42:10,885
through the economic analysis, by utilizing the 7 65

573
00:42:11,685 --> 00:42:15,605
network, there are reduced congestion cost on the system.

574
00:42:16,425 --> 00:42:20,245
so yes, while that's an economic benefit, it also provides an underlying

575
00:42:20,845 --> 00:42:24,845
reliability benefit. So if you think about if you

576
00:42:24,925 --> 00:42:28,805
have a system where, uh, power can flow freely without

577
00:42:29,205 --> 00:42:32,235
congestion where it has to be rerouted, that gives us more flexibility

578
00:42:33,625 --> 00:42:37,605
not only where generation is sided, but once it's sided there, being able to get it

579
00:42:37,765 --> 00:42:39,365
to where the consumers need it. The most

580
00:42:42,145 --> 00:42:45,925
impact to customers. I know when you say 7 65,

581
00:42:47,385 --> 00:42:51,325
you think 3 45 it must be twice as big. While, while it

582
00:42:51,485 --> 00:42:55,325
can carry much more power across those lines, it takes a lot less

583
00:42:55,575 --> 00:42:59,165
right of way to move the same amount of power. A 7 65

584
00:42:59,975 --> 00:43:03,835
right of way is needed about 200 feet compared to five

585
00:43:04,185 --> 00:43:07,685
and half, 3 45 ride aways to carry the same amount of power.

586
00:43:09,345 --> 00:43:13,325
so just 1 7 65 line could be built instead of five

587
00:43:13,565 --> 00:43:17,405
and a half, 3 45 lines less impact to the

588
00:43:17,725 --> 00:43:20,405
consumers of texas as bride aways are needed to be built.

589
00:43:23,265 --> 00:43:27,125
and then last but not least as we did our research, uh, in talking with

590
00:43:27,405 --> 00:43:30,605
others systems that utilize higher voltage,

591
00:43:31,875 --> 00:43:35,765
they seem to find that they have fewer forced outage rates on those

592
00:43:35,925 --> 00:43:38,965
higher voltage lines because of the setup in their configurations.

593
00:43:44,225 --> 00:43:48,005
so jumping in, uh, to the particular project in front of you, as I studied,

594
00:43:48,985 --> 00:43:52,625
uh, the utilities brought this to us this summer. We

595
00:43:53,325 --> 00:43:56,805
utilized, uh, during our normal processes, uh, the opportunity

596
00:43:57,585 --> 00:44:01,465
to build off of the work that we had done in 2024 is

597
00:44:01,685 --> 00:44:05,165
our base case to do additional analysis and sensitivity studies.

598
00:44:06,665 --> 00:44:09,685
one of the things that we focused on, and we get a lot of questions is the concern

599
00:44:11,395 --> 00:44:15,165
this plan was developed for load increases in the state, substantial

600
00:44:15,845 --> 00:44:18,725
load increases. What if those loads don't materialize?

601
00:44:20,185 --> 00:44:23,765
so we ran sensitivity studies to take a step back and look

602
00:44:24,795 --> 00:44:28,745
what if those large loads don't materialize. So we ran the

603
00:44:28,965 --> 00:44:32,445
reliability need based off of lower levels of load

604
00:44:33,105 --> 00:44:37,045
and we still still saw the need demonstrated for this 7 65

605
00:44:37,925 --> 00:44:37,925
system.

606
00:44:43,705 --> 00:44:46,805
so over basically a two year process timeline,

607
00:44:47,825 --> 00:44:51,565
we continue to review, do additional analysis, take in stakeholder

608
00:44:52,605 --> 00:44:55,885
feedback and comments. Our project summary,

609
00:44:56,825 --> 00:45:00,665
uh, this is a list of the recommendations that would be needed for new

610
00:45:01,165 --> 00:45:03,715
additions to the system to build out that plan.

611
00:45:06,105 --> 00:45:10,105
and so I stand before you now to, uh, bring you ercot recommendation

612
00:45:11,005 --> 00:45:14,955
to move forward and request your endorsement of moving forward with

613
00:45:15,245 --> 00:45:19,245
this project as well. I'll pause there 'cause I know

614
00:45:19,365 --> 00:45:22,905
you probably have some questions. Okay, any

615
00:45:24,405 --> 00:45:28,345
questions for christie for this incredibly important project? So

616
00:45:28,845 --> 00:45:32,645
christie, what you're saying, even in our, our low load case, this is still

617
00:45:33,205 --> 00:45:37,075
required for reliability. So throughout all three scenarios, low base,

618
00:45:37,435 --> 00:45:40,885
high load, this is required for reliability and the best alternative.

619
00:45:42,145 --> 00:45:46,045
yes, I that is correct. Um, one thing that I failed to also

620
00:45:46,325 --> 00:45:50,155
point out is a part of that two year study process. Not only did we study it looking

621
00:45:50,665 --> 00:45:54,665
out to 2030 during our 2024 review cycle, but

622
00:45:54,885 --> 00:45:58,605
we've been undergoing with, you know, additional new loads

623
00:45:58,925 --> 00:46:02,645
that have come in as we're studying 2025 looking out to 2031.

624
00:46:04,305 --> 00:46:08,245
and as we've gone through this year's annual regional transmission planning process,

625
00:46:09,505 --> 00:46:13,245
we also see the need for this infrastructure to be able to reliably

626
00:46:13,855 --> 00:46:17,265
serve the future demand on the system. So

627
00:46:18,745 --> 00:46:22,745
low, medium, high as well as we've seen that now two

628
00:46:22,965 --> 00:46:26,765
years in a row in our studies that it is needed. And what's

629
00:46:27,005 --> 00:46:30,605
the approximate time to construct? So what the utilities

630
00:46:31,125 --> 00:46:34,865
have told us, and I know they're here if they want to jump in and correct, um,

631
00:46:36,145 --> 00:46:39,435
it would be in the 2030, probably 2031 timeframe.

632
00:46:40,835 --> 00:46:44,725
okay. It's all contingent upon, I know they, they've been moving

633
00:46:44,925 --> 00:46:48,235
forward, um, as they have been with the permian working,

634
00:46:49,225 --> 00:46:53,125
uh, to get the equipment they need. Um, but also, uh, what

635
00:46:53,365 --> 00:46:57,245
would be next steps if the board endorses this, then the utilities, then it moves over

636
00:46:57,505 --> 00:47:01,175
to, to the commission process or the utilities would

637
00:47:01,545 --> 00:47:05,365
do, um, customer notifications for potential right

638
00:47:05,685 --> 00:47:09,525
of way decisions. Um, and that would take, you know, probably

639
00:47:09,755 --> 00:47:13,365
most of next year to work through that process at the commission before they can actually start

640
00:47:13,805 --> 00:47:17,805
building. Okay. Thank you. Christie, when did, when did

641
00:47:18,205 --> 00:47:22,085
you sort of freeze the load analysis? Uh, did you, is it,

642
00:47:22,345 --> 00:47:26,155
is it sort of july timeframe that you were using data from

643
00:47:26,545 --> 00:47:29,765
or, or more recently than that? So this particular

644
00:47:30,745 --> 00:47:34,195
review on this case was done, um, they submitted

645
00:47:34,805 --> 00:47:38,725
it based off of the need that we saw in our 2024 analysis.

646
00:47:39,025 --> 00:47:42,345
mm-hmm . So that load was froze, um,

647
00:47:43,305 --> 00:47:46,825
in late probably april, may of

648
00:47:47,355 --> 00:47:51,225
last year. And that was that study process. Now

649
00:47:51,515 --> 00:47:55,085
fast forward we're, we're doing a similar study where we also see the need

650
00:47:55,905 --> 00:47:59,885
during 2025 and that load, uh, wasn't finalized. If you

651
00:48:00,005 --> 00:48:03,885
recall, we went through, uh, a forecast, um, discussion with the commission

652
00:48:04,205 --> 00:48:08,025
and that was locked in in june. So, so june timeframe and

653
00:48:08,245 --> 00:48:11,685
since then there's been more load added to the queue, right? That's correct.

654
00:48:14,545 --> 00:48:18,405
kristy, uh, can you comment on our confidence level around

655
00:48:18,765 --> 00:48:22,255
the cost of the project? So the costs,

656
00:48:22,985 --> 00:48:26,915
uh, that are in this were based off of estimates that

657
00:48:27,205 --> 00:48:31,085
were provi or generic type estimates that were provided based on the information

658
00:48:31,875 --> 00:48:35,615
from last year. Um, I would probably defer

659
00:48:35,985 --> 00:48:39,955
to the tsb counterparts, um, that have been doing negotiations with,

660
00:48:40,985 --> 00:48:44,785
um, vendors for securing supply chain. Um,

661
00:48:45,105 --> 00:48:48,965
one thing I would note, um, I know there was debate in the

662
00:48:49,165 --> 00:48:53,015
past, um, from some previous larger transmission projects about

663
00:48:53,385 --> 00:48:57,245
how the cost went up in time. And what we found is we implemented a new

664
00:48:57,645 --> 00:49:01,565
practice this time around. So when we estimated the mileage that would

665
00:49:01,725 --> 00:49:05,525
be needed for these, we added a 20% adder to the mileage

666
00:49:05,925 --> 00:49:09,915
because we recognize when you go in and try to cite

667
00:49:10,335 --> 00:49:14,205
where that line is actually gonna be placed, it's probably not gonna be a straight

668
00:49:14,395 --> 00:49:17,835
line from point a to point b. And so, uh, we do add increased

669
00:49:18,445 --> 00:49:21,855
mileage to account for that. Um, because every

670
00:49:23,035 --> 00:49:27,005
turn on the, on the build of the system does add, you know, additional equipment that

671
00:49:27,125 --> 00:49:30,815
needs to be accounted for. Thank you.

672
00:49:31,165 --> 00:49:34,995
okay. Benjamin, do you have a comment? Uh, just a couple of questions. Why 20% for

673
00:49:35,215 --> 00:49:38,895
the cost out from, we went back,

674
00:49:39,435 --> 00:49:43,325
um, historically when we were doing it just a straight line

675
00:49:43,855 --> 00:49:47,765
approach, what we saw on the average it was about 18% when

676
00:49:48,055 --> 00:49:51,735
they would actually then come back to the commission. And so that's why we chose 20%.

677
00:49:52,355 --> 00:49:55,605
it was based off of historical, uh, information.

678
00:49:57,835 --> 00:50:01,335
so it didn't factor anything into like the geography of the area of this going through.

679
00:50:02,235 --> 00:50:06,055
no. Uh, so this is about the same size as the permian

680
00:50:06,495 --> 00:50:10,415
basin plan, which had a monitor. Is there any consideration for having a monitor or some sort of

681
00:50:10,565 --> 00:50:14,515
cost reporting requirement for this plan? For this? So my recollection, um, how

682
00:50:14,735 --> 00:50:18,335
the permian basin monitor was established was during the commission

683
00:50:18,855 --> 00:50:22,665
deliberation process where they added that into their final

684
00:50:23,065 --> 00:50:27,005
order for the permian plan to keep, um, overview

685
00:50:27,265 --> 00:50:31,025
of schedule and cost, um, because of the importance of the timely

686
00:50:31,445 --> 00:50:35,125
build out for the consumers in the permian. And that is actually being

687
00:50:35,585 --> 00:50:39,535
run by and overseen by the commission. So I would defer

688
00:50:40,025 --> 00:50:43,835
to, to commissioners, uh, whether that's something they would want

689
00:50:44,125 --> 00:50:47,785
to entertain or a consideration of, of some version of that for

690
00:50:48,195 --> 00:50:51,865
this project. Yeah, I'm happy to weigh on, on, in on that ben.

691
00:50:52,705 --> 00:50:56,495
so I've talked to pc executive staff, um, about

692
00:50:56,845 --> 00:51:00,445
this. I think at minimum we will take the construction reports

693
00:51:01,275 --> 00:51:05,125
that will be filed by the tsps and compare those to the cost

694
00:51:05,645 --> 00:51:09,465
estimates that, um, are in this approval if it gets approved so

695
00:51:09,685 --> 00:51:13,645
that we have a benchmark that we can compare against. I'll continue to talk to

696
00:51:13,805 --> 00:51:17,365
connie and barksdale about, you know, the portal that we've set up and if we have money

697
00:51:18,145 --> 00:51:21,585
to expand the data that we put into that. Um,

698
00:51:22,385 --> 00:51:26,085
but I think at minimum we will take the construction reports and do a comparison

699
00:51:26,425 --> 00:51:30,425
and we can post that information online. 'cause I too, you know, uh, cor was

700
00:51:30,645 --> 00:51:33,965
one of the first projects I was, I was involved with when I came to the commission

701
00:51:34,985 --> 00:51:38,715
and so I'm, I'm very aware of, uh, the public's desire to know

702
00:51:40,075 --> 00:51:43,525
cost overruns if schedule slips. And so I think it's important

703
00:51:44,095 --> 00:51:48,095
given the, the magnitude of this and the cost that we are transparent about

704
00:51:48,745 --> 00:51:52,645
any cost overruns and slips in schedules. So we will, we will do everything we can at the commission

705
00:51:53,025 --> 00:51:56,845
to, uh, to make sure that that information's public so that everyone from the governor to the

706
00:51:57,075 --> 00:52:01,005
legislature to, uh, the public at large knows, knows what's going on with this

707
00:52:01,165 --> 00:52:03,485
project. I I appreciate that. Thank you

708
00:52:13,725 --> 00:52:17,045
christie. My question has to do with the, uh, execution of the project.

709
00:52:17,785 --> 00:52:21,165
can it be phased in and let's say

710
00:52:22,515 --> 00:52:25,975
to match load expectations because that is

711
00:52:26,555 --> 00:52:30,335
the load forecast seems to be so dynamic at this point. What, what was

712
00:52:30,645 --> 00:52:33,875
deliberated about in terms of basing

713
00:52:34,715 --> 00:52:38,655
the project? So I, I like to think about what's before you, if you

714
00:52:38,735 --> 00:52:41,815
think about it. It's, it's a loop. So there were three set points

715
00:52:43,245 --> 00:52:47,215
that were decided they're already established by the commission as a

716
00:52:47,335 --> 00:52:50,335
part of the permian basin plan and then this completed the loop.

717
00:52:51,635 --> 00:52:55,615
um, if you think about what we're recommending here, again, it's the super highway

718
00:52:57,635 --> 00:53:01,615
and what it's giving us the opportunity, the points that we chose when we were preparing

719
00:53:02,095 --> 00:53:06,015
this were strategically chosen, whether they're already large load centers

720
00:53:07,595 --> 00:53:11,455
or they're generation pockets where we see a lot of generation on the system

721
00:53:11,665 --> 00:53:15,445
today. So those are knowns and that helps us more efficiently move

722
00:53:15,935 --> 00:53:19,725
power around. But as that load materializes over time,

723
00:53:20,875 --> 00:53:24,575
we know it's important to know where they're gonna be located so that you can build transmission

724
00:53:25,265 --> 00:53:28,805
to them. I would foresee this as being your interstate

725
00:53:29,665 --> 00:53:33,515
as we, and it's needed based off our sensitivity, whether that

726
00:53:33,805 --> 00:53:37,605
large load materializes it or not. But what this provides

727
00:53:38,085 --> 00:53:42,055
you is when those new large loads or new generation comes to the system, where

728
00:53:42,405 --> 00:53:46,325
do you build the exit ramps? And we have the flexibility to be able to do that

729
00:53:46,445 --> 00:53:46,965
with a lower voltage.

730
00:53:51,205 --> 00:53:55,175
this is a little bit off of normal protocol, but given the scope

731
00:53:55,555 --> 00:53:59,475
and size of this project, if, uh, representatives from a ep encore

732
00:53:59,895 --> 00:54:03,695
or cps or uh, uh, cnp would like

733
00:54:03,935 --> 00:54:06,855
to comment, we're willing to listen.

734
00:54:10,225 --> 00:54:12,345
okay. I don't see anybody jumping up. Alright,

735
00:54:15,235 --> 00:54:17,235
carpenter. Okay. Okay. We do have a commenter. Okay.

736
00:54:34,035 --> 00:54:38,015
uh, yes, this is mark carpenter, senior vice president with encore electric delivery.

737
00:54:40,595 --> 00:54:44,575
um, the cost estimates we have in this we think are prudent costs

738
00:54:44,865 --> 00:54:48,735
given the information we have at the time, things like tariffs and

739
00:54:48,935 --> 00:54:52,775
right away costs. And some of those things are variables that, uh, uh, we've

740
00:54:53,095 --> 00:54:57,095
taken our best guess and, but we're very comfortable with the, with the

741
00:54:57,215 --> 00:55:01,015
cost estimates and I believe the other two tsps would say the same thing.

742
00:55:04,045 --> 00:55:07,295
okay. Thank you. That's helpful. Anybody else?

743
00:55:10,815 --> 00:55:14,615
christie, any closing comments? No, I, I would,

744
00:55:14,875 --> 00:55:18,875
uh, thank you for your consideration. As I said, it's been, uh,

745
00:55:19,335 --> 00:55:22,975
a very long process to get to here, um, a lot of

746
00:55:23,395 --> 00:55:27,375
review and and consultation. Um, so I'm excited to see what your

747
00:55:27,775 --> 00:55:31,655
decision is. Okay. With that, I'll entertain a motion

748
00:55:31,915 --> 00:55:35,045
to approve the 25 rpg 0 2 5

749
00:55:36,215 --> 00:55:40,055
a ep texas cps energy encore and cnp texas

750
00:55:40,345 --> 00:55:44,155
7 65 kv step eastern backbone project. So

751
00:55:44,375 --> 00:55:47,695
moved. Okay. Thank that was bill. Yeah. Okay. Uh, second?

752
00:55:48,395 --> 00:55:52,015
yes. Second. Okay. Got two of me, linda and kathleen. All in favor?

753
00:55:52,435 --> 00:55:55,935
aye. Aye. Any opposed? Any abstentions?

754
00:55:57,685 --> 00:56:01,485
okay. That project is approved. Christie, would you proceed with

755
00:56:01,775 --> 00:56:05,255
the next agenda item? Sorry. And lemme go ahead and read it. It's agenda item 14.225

756
00:56:07,995 --> 00:56:11,935
rpg 0 2 2 encore, and a psc drill hole to sand lake

757
00:56:12,195 --> 00:56:15,735
to solstice 7 65 kv line project.

758
00:56:17,595 --> 00:56:21,175
all right, so we've, we've talked about from the 7 65 perspective,

759
00:56:21,805 --> 00:56:25,625
when we looked at the strategic transmission expansion plan to

760
00:56:25,965 --> 00:56:29,925
reliably meet the needs of consumers into the future, we had the permian

761
00:56:30,405 --> 00:56:34,205
portions, we have had the eastern portions you just considered. If you think about

762
00:56:34,465 --> 00:56:38,295
out in far west texas and the permian basin area, there

763
00:56:38,665 --> 00:56:41,525
are three import lines that were approved by the commission.

764
00:56:42,955 --> 00:56:46,805
they all end there and this project was brought forward at the same time

765
00:56:47,215 --> 00:56:51,165
based off of the, the same analysis we discussed, uh, on the other project

766
00:56:52,145 --> 00:56:55,605
to close in those three endpoints so that we would have a fully

767
00:56:56,155 --> 00:56:59,365
networked 7 65 backbone on the system. 'em,

768
00:57:01,625 --> 00:57:05,445
we went through that same review process in, in considering, um, looking

769
00:57:05,825 --> 00:57:09,765
at what we had analyzed in 2024, what we had analyzed in our

770
00:57:09,965 --> 00:57:13,085
2025 planning process working with the regional planning group.

771
00:57:14,305 --> 00:57:18,205
and we still saw, um, the reliability need. And I think from this

772
00:57:18,365 --> 00:57:21,885
perspective, I look at it not only as reliability but resiliency.

773
00:57:22,375 --> 00:57:26,315
it'll give us more flexibility in the future as we're looking at outages

774
00:57:26,805 --> 00:57:30,735
that may need be needed for, for maintenance to be able to have that system fully

775
00:57:31,115 --> 00:57:35,025
networked. So the request before you, um,

776
00:57:35,505 --> 00:57:39,415
is to endorse the need for this project based

777
00:57:39,765 --> 00:57:43,585
on our reliability planning criteria. And

778
00:57:43,805 --> 00:57:47,345
would you replete the estimated cost again? Sure, it is,

779
00:57:48,105 --> 00:57:49,295
um, I believe it's $742 million.

780
00:57:53,315 --> 00:57:57,195
okay. This is just for line cost. Uh, the substation costs were

781
00:57:57,485 --> 00:58:00,555
already a part of the permian plan approval. Okay.

782
00:58:01,665 --> 00:58:05,665
any questions for christie on this? No

783
00:58:06,045 --> 00:58:09,645
questions, no comments. Uh, hearing none I will entertain

784
00:58:10,325 --> 00:58:14,165
a motion to, um, approve the 25

785
00:58:15,045 --> 00:58:18,885
rpg 0 2 2 encore and a psc drill hole to sand

786
00:58:19,125 --> 00:58:23,125
hole to sand lake. So to solstice, excuse me, drill hole

787
00:58:23,425 --> 00:58:26,805
to sand lake to solstice. 7 65 kv line project.

788
00:58:27,665 --> 00:58:31,345
so moved. Thank you. Chris. Do I hear a second? Second,

789
00:58:32,055 --> 00:58:35,325
peggy? All in favor? Aye. Any opposed?

790
00:58:36,865 --> 00:58:40,165
any abstentions? Okay, that project is unanimously

791
00:58:41,085 --> 00:58:45,025
approved. Bill, before we go on to the next one, I'd like to just take an opportunity to

792
00:58:45,875 --> 00:58:49,185
send a thank you to our teams that are probably watching. Um,

793
00:58:49,995 --> 00:58:53,925
they've spent a lot of time and analysis not only in the planning

794
00:58:54,045 --> 00:58:57,975
department, uh, coordination, working with dan's folks, the the markets folks

795
00:58:58,385 --> 00:59:02,205
to look at some of the economic analysis. So it was a, a large effort

796
00:59:02,625 --> 00:59:06,495
by a lot of folks at ercot to bring this forward. Um, I think woody

797
00:59:06,845 --> 00:59:10,785
likes to joke, if you were a planning engineer in another iso, you

798
00:59:11,005 --> 00:59:14,785
may get to work on one u line in your career. And, um,

799
00:59:15,425 --> 00:59:18,765
the planning engineers on our team have had quite the past two years.

800
00:59:19,465 --> 00:59:22,005
so, uh, thank you chris.

801
00:59:24,155 --> 00:59:28,125
with that, we're gonna proceed to the third voting item, which is agenda item 14.324

802
00:59:30,505 --> 00:59:33,765
rrg, r pg 0 2 0, encore connell

803
00:59:34,535 --> 00:59:38,365
3 45 slash 1 38 kv switch and connell to

804
00:59:38,555 --> 00:59:42,105
rockham 3 45 kv double circuit line project option

805
00:59:42,825 --> 00:59:46,685
one. Christie, would you present that to us please? You bet. So this is

806
00:59:46,845 --> 00:59:50,705
$110 million, uh, project that was brought forward by

807
00:59:51,065 --> 00:59:54,485
encore. If you recall the last couple of board meetings, dan's been

808
00:59:55,115 --> 00:59:59,045
providing information in the far west texas area. We know that's an

809
00:59:59,165 --> 01:00:02,885
area that is growing. Um, while there are a lot of projects

810
01:00:03,325 --> 01:00:07,205
that have already been endorsed that are being built in the area, as we continue

811
01:00:07,365 --> 01:00:11,245
to see additional demands on the system in far west texas, you're gonna need

812
01:00:11,485 --> 01:00:15,465
additional infrastructure to continue supporting them. And so this project was

813
01:00:15,685 --> 01:00:19,245
brought forward by encore, went through our, uh, review process

814
01:00:20,665 --> 01:00:24,655
and we saw reliability need in that far west as additional loads

815
01:00:25,005 --> 01:00:28,945
would be continued to be added to, um, do

816
01:00:29,405 --> 01:00:33,075
upgrades, um, to the system in the region to eliminate

817
01:00:33,825 --> 01:00:37,805
or, um, thermal and voltage violations in that far west

818
01:00:38,045 --> 01:00:41,885
texas area. This project was unanimously endorsed by

819
01:00:42,085 --> 01:00:46,045
attack. Um, and so with that, I would

820
01:00:46,235 --> 01:00:49,945
request the board's endorsement of this, uh, encore

821
01:00:50,365 --> 01:00:53,365
project in the far west area, uh, which totaled about $110 million.

822
01:00:56,925 --> 01:01:00,445
any questions for christie? One question is yes

823
01:01:01,005 --> 01:01:04,815
for this project, christie, how, how fast can this be done and what, what

824
01:01:05,105 --> 01:01:08,805
will the timeline look like? Um, lemme let me take a quick look at our report

825
01:01:09,295 --> 01:01:13,225
here. Um, what the expected timeline? Um, I think I

826
01:01:13,345 --> 01:01:16,845
know one disclaimer while I'm looking up that, that timeline, um,

827
01:01:17,415 --> 01:01:21,245
it's, it's needed for in-service in 2026. So

828
01:01:21,465 --> 01:01:25,425
this is looking at a project that would be next year. There is 13 miles

829
01:01:25,805 --> 01:01:29,665
of right of way that are required. So they will have to go through, uh, the commission

830
01:01:30,585 --> 01:01:34,165
ccn process to establish that need and

831
01:01:34,725 --> 01:01:38,595
get approval for the siding of that new right of way. Um, and I know one disclaimer

832
01:01:39,295 --> 01:01:43,225
that the utilities typically put in when they give us timelines on how quickly

833
01:01:43,615 --> 01:01:46,975
they think they can build the project, um, is that it's

834
01:01:47,825 --> 01:01:51,505
dependent upon, um, outages. So when we talked about approving

835
01:01:52,025 --> 01:01:55,855
the 7 65 plan and how our system is utilizing

836
01:01:56,565 --> 01:02:00,385
its full transmission capability today, it becomes harder and harder to take those

837
01:02:00,615 --> 01:02:04,095
outages. So it's also dependent upon weather and being able to take those outages

838
01:02:04,885 --> 01:02:08,755
needed to, to upgrade the systems. Thank

839
01:02:09,105 --> 01:02:13,025
you. Sorry. If, if you don't mind, encore, representative

840
01:02:13,925 --> 01:02:17,805
kin to speak to that. Yes, liz jones on behalf of encore.

841
01:02:18,325 --> 01:02:22,125
um, I, I do have some updated information in response to your question.

842
01:02:22,475 --> 01:02:25,685
because of the delay in processing this rpg submittal

843
01:02:26,705 --> 01:02:29,855
and because of customer needs, encore went ahead and filed

844
01:02:30,745 --> 01:02:34,715
the ccn proceeding with the puc and that

845
01:02:35,145 --> 01:02:38,845
is nearing its end. And so there will be some time savings

846
01:02:39,985 --> 01:02:43,885
as we move forward to build and operate the

847
01:02:44,085 --> 01:02:47,845
facilities. So don't leave liz, any questions for liz while she's

848
01:02:48,165 --> 01:02:51,235
up there? Okay. Alright, thank you.

849
01:02:52,505 --> 01:02:55,555
that was helpful. Any other questions or comments?

850
01:02:57,535 --> 01:03:00,795
I'm not hearing any, so I'll entertain a motion to approve the two four

851
01:03:01,655 --> 01:03:05,405
rpg 0 2 0 encore con connell 3 45, 1 35, 1 38

852
01:03:08,695 --> 01:03:12,475
kv switch and connell to rock hand. 3 45 kv double

853
01:03:12,755 --> 01:03:16,395
circuit line project option one. Do I hear a motion?

854
01:03:16,935 --> 01:03:20,825
so moved. Thank you julie. I have a second. Second. Okay. Who is that? Bill.

855
01:03:21,425 --> 01:03:24,795
okay, thank you. All in favor? Aye. Any opposed?

856
01:03:26,415 --> 01:03:30,355
any abstentions? Okay. Uh, ercot board has endorsed this project

857
01:03:30,775 --> 01:03:34,595
for approval. Next, we'll move to agenda item 15, commercial

858
01:03:35,115 --> 01:03:37,435
markets. The first agenda item is 15.1

859
01:03:39,215 --> 01:03:42,895
market price correction, incorrect generation to be dispatched, values

860
01:03:43,465 --> 01:03:46,535
used in scad gordon drake is gonna present this item. Gordon.

861
01:03:53,455 --> 01:03:57,385
thank you chairman flores and members of the board. It's my pleasure to be here, uh,

862
01:03:57,705 --> 01:04:01,465
to present this potential price correction for your consideration, uh,

863
01:04:01,745 --> 01:04:05,085
to talk about the events that that led to the issue in our market systems

864
01:04:05,785 --> 01:04:08,795
and request board approval to correct prices for operating day october 14th.

865
01:04:12,525 --> 01:04:16,195
on october 14th, um, we had, uh, an input

866
01:04:16,695 --> 01:04:20,665
into our generation to be dispatched value in our market systems.

867
01:04:21,495 --> 01:04:25,105
that is a, a parameter in our market system that determines how much, uh, generation

868
01:04:25,685 --> 01:04:29,485
do we need to, uh, instruct to, to generate in order to meet the, the

869
01:04:29,705 --> 01:04:33,705
load. Um, and a key input into determining that generation two

870
01:04:34,065 --> 01:04:38,025
b dispatched value is the, the load forecast that they, that the controller

871
01:04:38,505 --> 01:04:42,345
is using and our market systems observe. And we had been,

872
01:04:42,685 --> 01:04:46,505
uh, using our external short term load forecast as an input to our market

873
01:04:46,825 --> 01:04:50,525
systems when we noticed an abnormal spike in the, um,

874
01:04:51,045 --> 01:04:54,705
in, in that load forecast. And the control room has the ability

875
01:04:55,205 --> 01:04:59,125
to switch to another load forecast that more accurately reflects the

876
01:04:59,665 --> 01:05:03,565
expected load pattern. Uh, as they were executing that switch, uh,

877
01:05:03,785 --> 01:05:07,385
because of the, uh, the observed spike, unfortunately, there was a,

878
01:05:07,865 --> 01:05:11,055
a software bug that prevented that from, uh, appropriately executing.

879
01:05:11,885 --> 01:05:15,465
and so that, that that price spike, so that load spike was reflected

880
01:05:16,085 --> 01:05:19,645
in the calculations for the, the generation to be dispatched parameters

881
01:05:20,625 --> 01:05:24,045
as a result that the, the generation to be dispatched parameter,

882
01:05:24,785 --> 01:05:28,245
um, impacted prices between, uh, eight 10 and 9:15 pm

883
01:05:29,395 --> 01:05:33,145
resulting in high system-wide prices, uh, in between, uh, eight 10

884
01:05:33,425 --> 01:05:37,225
and 8:15 pm so all the prices were impacted within that window, but

885
01:05:37,445 --> 01:05:41,385
we, we noticed, uh, particularly high prices in that eight 10

886
01:05:41,605 --> 01:05:45,345
to 8:15 pm window. We identified this as

887
01:05:45,725 --> 01:05:49,545
a software issue, uh, on october 23rd. Um, and

888
01:05:49,985 --> 01:05:53,845
as thus could not meet the, the two business day timeline in the protocols

889
01:05:54,245 --> 01:05:58,045
in order to correct prices before they went final. And that is why we are

890
01:05:58,275 --> 01:06:02,205
here today requesting your approval. The, the cause of that software

891
01:06:02,425 --> 01:06:06,345
bug that prevented the effective switch between the load forecast was identified and

892
01:06:06,725 --> 01:06:10,585
affix was deployed near the end of october. We communicated the,

893
01:06:11,025 --> 01:06:15,025
uh, event in our investigation to the market through two market notices, uh,

894
01:06:15,345 --> 01:06:19,085
the first on october 24th, uh, providing the same details that

895
01:06:19,365 --> 01:06:23,025
we are sharing here today. And on nover november 17th. Uh,

896
01:06:23,715 --> 01:06:27,685
upon concluding our analysis, uh, and informing the market of our, uh, intention to,

897
01:06:28,185 --> 01:06:31,005
uh, present it to the board of directors for approval at this meeting,

898
01:06:33,745 --> 01:06:37,445
we determined that the impact of prices met the significance criteria

899
01:06:37,825 --> 01:06:41,765
in our, in our, uh, nodal protocols, um, exceeding the thresholds

900
01:06:42,105 --> 01:06:45,205
of, uh, an impact of 2% and also greater than $20,000

901
01:06:46,345 --> 01:06:50,045
or 20%, and also greater than $2,000 to a single counterparty.

902
01:06:51,025 --> 01:06:54,805
we had 18 counterparties that met the first criterion and three counterparties

903
01:06:55,555 --> 01:06:59,175
that met the second criterion. And the absolute value

904
01:06:59,585 --> 01:07:03,485
to counterparties, uh, to a single counterparty was a maximum

905
01:07:03,845 --> 01:07:07,845
of $140,000. Um, which, and the maximum percentage

906
01:07:08,725 --> 01:07:12,425
criteria of nearly 22% and nearly 150% for

907
01:07:12,825 --> 01:07:16,515
the second criterion. Overall,

908
01:07:17,005 --> 01:07:20,365
the impact to ercot settlements was just more than $800,000,

909
01:07:21,825 --> 01:07:25,765
um, representing the shisha of 4% of the total market settlements for that

910
01:07:25,885 --> 01:07:29,505
day. Um, in summation, we had, uh,

911
01:07:30,065 --> 01:07:34,025
an issue in our software that led to, uh, an impact to an

912
01:07:34,245 --> 01:07:37,945
inappropriate impact to prices for operating day october 14th, which met

913
01:07:38,265 --> 01:07:41,605
the significance criteria in our protocols, and we are requesting

914
01:07:42,335 --> 01:07:46,245
board approval to correct the prices, uh, for the real time market for operating

915
01:07:46,605 --> 01:07:50,455
day october 14th. I'm happy to answer any questions. Okay, chris,

916
01:07:51,505 --> 01:07:55,325
uh, just to comment, uh, gordon, I would say good job on describing

917
01:07:56,325 --> 01:07:59,665
a tough and complex issue. Um,

918
01:08:00,605 --> 01:08:04,325
I, I, I appreciate it. This isn't, it's not easy to describe and explain.

919
01:08:04,815 --> 01:08:06,885
thank you. What has happened here, and I'm glad there's a fix.

920
01:08:09,385 --> 01:08:13,105
any other questions for gordon or comments? And

921
01:08:14,065 --> 01:08:18,065
you provided your assurance that that particular issue has been fixed, so yes,

922
01:08:18,285 --> 01:08:21,965
sir. Shouldn't have a repeat occurrence. Okay, thank you. I don't hear any other

923
01:08:22,325 --> 01:08:26,005
comments or questions, so recognizing that, uh, I'll entertain a motion

924
01:08:26,345 --> 01:08:30,205
to approve the price correction as presented. So moved. Okay. Thank you, chris.

925
01:08:31,345 --> 01:08:35,205
any second, sir? Okay, peggy, thank you. All in favor?

926
01:08:36,265 --> 01:08:40,165
aye. Any opposed? Any abstentions? Okay. The price

927
01:08:40,445 --> 01:08:44,125
correction has been approved. Next, we're gonna move to agenda item 15.2.

928
01:08:45,175 --> 01:08:48,785
keith collins is gonna give us a commercial up, uh, markets update.

929
01:08:56,705 --> 01:09:00,405
all right, good morning. This is an informational discussion

930
01:09:01,385 --> 01:09:05,105
and we'll cover some of the key initiatives we're working on,

931
01:09:05,585 --> 01:09:07,925
uh, over the last several months, but also moving forward as well.

932
01:09:10,625 --> 01:09:14,025
and we'll cover, uh, our current credit situation in terms of,

933
01:09:14,665 --> 01:09:18,405
uh, the, uh, we haven't seen any significant market credit or settlements

934
01:09:18,805 --> 01:09:22,665
related items, and we'll cover that in a second. So, uh,

935
01:09:23,165 --> 01:09:27,125
starting off, we've, we've discussed a couple of these, uh, a few times, but I think it's important to

936
01:09:27,285 --> 01:09:31,245
highlight again that, uh, the first key initiative we're working

937
01:09:31,365 --> 01:09:35,285
on is dispatchable reliability reserve service. We did cover this a bit more yesterday,

938
01:09:36,065 --> 01:09:39,575
but just to give a few more highlights, we did have a study,

939
01:09:40,385 --> 01:09:43,985
uh, from a more aurora energy research that showed the,

940
01:09:44,705 --> 01:09:48,325
uh, the potential benefits of, of the, the various

941
01:09:48,765 --> 01:09:52,405
permutations of, of drrs. We'll talk about that in a few minutes.

942
01:09:53,665 --> 01:09:57,515
we did post the two nprs, uh, our drs an ancillary

943
01:09:58,125 --> 01:10:02,045
service version under 1309 and drs ancillary service

944
01:10:02,315 --> 01:10:06,085
plus under 1310. And we will be hosting

945
01:10:06,525 --> 01:10:10,445
a stakeholder workshop here, uh, a week from, uh, a

946
01:10:10,565 --> 01:10:13,865
week from tomorrow, uh, at the met center to with aurora

947
01:10:14,705 --> 01:10:18,365
to discuss the report with stakeholders. Uh, secondly,

948
01:10:19,025 --> 01:10:22,645
uh, our residential demand response program. We had a,

949
01:10:23,505 --> 01:10:27,125
uh, we had a, uh, had good discussion with stakeholders

950
01:10:27,865 --> 01:10:31,765
at the wms on november 5th. There was a lot of good feedback that

951
01:10:31,965 --> 01:10:35,605
we received at that. Uh, during that discussion. We are taking that feedback,

952
01:10:36,265 --> 01:10:40,085
uh, and, and the points raised during there and working on revising

953
01:10:41,225 --> 01:10:45,025
the proposal based on some of the key points that we, we, we

954
01:10:45,245 --> 01:10:49,085
learned during that discussion. We expect to have, uh, some, uh, a modified

955
01:10:49,405 --> 01:10:53,305
npr, uh, early next year. And then the

956
01:10:53,525 --> 01:10:57,315
final point is the energy attribute certificate program. This

957
01:10:57,605 --> 01:11:01,325
was something that we discussed in june at the june board under npr

958
01:11:01,945 --> 01:11:05,425
1264. We have been making significant, uh,

959
01:11:05,965 --> 01:11:09,765
progress on that. Uh, I, I will note that we are have been working with stakeholders

960
01:11:10,305 --> 01:11:13,925
on a sort of a lightweight option that had been discussed at the board.

961
01:11:15,425 --> 01:11:19,425
and, uh, ultimately we have, uh, provided some updates to

962
01:11:19,785 --> 01:11:23,685
the prs and the wms on a request for a quote for a

963
01:11:23,805 --> 01:11:27,605
vendor. Uh, ultimately part of the next steps will be to select a vendor, but we have

964
01:11:28,145 --> 01:11:31,805
at least have, uh, uh, a draft version of, of that request.

965
01:11:32,705 --> 01:11:36,395
and we've made some draft comments to, uh, the stakeholders regarding

966
01:11:37,005 --> 01:11:40,245
1264 to better define the processes, roles and responsibilities.

967
01:11:41,345 --> 01:11:45,205
and sort of the final point that I wanna make as, as part of our key takeaway, obviously, rtc,

968
01:11:45,705 --> 01:11:49,125
all of this has been going on while we've also simultaneously been working on rtc

969
01:11:49,765 --> 01:11:53,765
plus b, but I do want to sort of note that there are some stabilization efforts

970
01:11:54,175 --> 01:11:58,125
going on over the, over the course of the next few months. We mentioned some of those yesterday.

971
01:11:59,005 --> 01:12:02,805
I, uh, thankfully that it, it, it has been, uh, a relatively smooth,

972
01:12:03,145 --> 01:12:06,885
but, but again, there are some cleanup items that we want to just not ignore as we move forward.

973
01:12:10,825 --> 01:12:14,585
and then talking about market credit update, there have been no significant issues,

974
01:12:15,745 --> 01:12:19,505
uh, in either the settlement or credit related defaults. Uh,

975
01:12:19,835 --> 01:12:23,805
when we, we view our total exposure, there's generally a seasonal pattern, and we saw

976
01:12:24,125 --> 01:12:28,085
a summer peak, uh, 1.84 billion, and that's come down,

977
01:12:28,545 --> 01:12:32,465
uh, to about 1.57 in october. Just a update

978
01:12:32,985 --> 01:12:36,905
on npr 1277. This is something that we

979
01:12:37,125 --> 01:12:40,925
discussed, uh, starting at the end of last year, beginning of of this year,

980
01:12:41,585 --> 01:12:45,345
we did have an npr, uh, that went through the process to

981
01:12:45,685 --> 01:12:49,525
help improve the collateralization requirements and the impacts of high

982
01:12:49,725 --> 01:12:52,925
volatility that passed the commission in november.

983
01:12:53,905 --> 01:12:56,925
and we do anticipate implementing that in early 2026.

984
01:12:58,785 --> 01:13:02,075
the other item that I want to highlight is that we have been, uh, working

985
01:13:02,945 --> 01:13:06,505
on a credit, uh, our credit staff is working on an

986
01:13:07,045 --> 01:13:10,965
analysis that evaluates and measures market stress scenarios. And we do look

987
01:13:11,085 --> 01:13:14,565
forward to bringing that through the stakeholder process, uh, in 2026.

988
01:13:18,105 --> 01:13:21,865
uh, that concludes my update, and I'm happy to answer any questions that, uh,

989
01:13:22,705 --> 01:13:25,565
the board may have. Any questions for keith?

990
01:13:27,805 --> 01:13:31,795
okay. John, do you have a question? Yes. Keith, as you look out over time, um,

991
01:13:32,475 --> 01:13:36,335
be beyond the immediate things that you're working on, are there any

992
01:13:36,495 --> 01:13:40,375
things on, on your roadmap that would continue to send better price

993
01:13:40,695 --> 01:13:44,575
signals to the marketplace about the need for dispatchable generation?

994
01:13:45,635 --> 01:13:49,415
and if so, can you give us a bit of an idea of what kinds of things you're thinking about?

995
01:13:50,295 --> 01:13:53,875
I, I think the, the most immediate thing that we're, we're looking at is our,

996
01:13:54,435 --> 01:13:58,255
our dispatchable reliability reserve service. That's, that's really our focus. We think that

997
01:13:58,475 --> 01:14:02,435
has the ability to do precisely what you're hitting on is you,

998
01:14:02,915 --> 01:14:06,555
uh, incentivize dispatchable resources, uh, within

999
01:14:07,035 --> 01:14:10,455
the market in, in order to address the, the reliability concerns,

1000
01:14:11,120 --> 01:14:14,725
the growing relian concerns we're seeing, is it enough

1001
01:14:15,145 --> 01:14:19,125
by itself? Uh, what, what we see, and we'll talk about this in just a

1002
01:14:19,245 --> 01:14:23,185
few minutes, is that, uh, the combination of, uh,

1003
01:14:23,435 --> 01:14:27,105
what we saw in senate bill six and the drs ansley

1004
01:14:27,525 --> 01:14:31,165
service plus version in combination should be enough

1005
01:14:31,625 --> 01:14:35,445
to, to address the majority, if not all the issues, uh, that, that we've

1006
01:14:35,765 --> 01:14:37,925
studied. Okay. Thank you.

1007
01:14:39,915 --> 01:14:41,315
okay. Thank you, john.

1008
01:14:43,945 --> 01:14:47,325
I'd like to, I mean, there's also the, uh, the reliability standard

1009
01:14:48,255 --> 01:14:51,085
study next year. That'll be a good indicator too.

1010
01:14:54,355 --> 01:14:58,235
okay. Any other questions for keith? Alright,

1011
01:14:59,095 --> 01:15:02,155
keith, I think you have the next agenda item, which is, uh, 15.3

1012
01:15:03,565 --> 01:15:06,925
dispatchable reliability reserve service, or as we call it, drrs.

1013
01:15:08,045 --> 01:15:11,605
drs. Yes. Thank you. Thank you, mr. Chairman. Uh, I'm here to present,

1014
01:15:12,305 --> 01:15:16,165
uh, on the study that was done by aurora. We have representatives from aurora here

1015
01:15:16,405 --> 01:15:20,285
as well, aurora energy research in the event that there may be some questions from

1016
01:15:20,485 --> 01:15:24,285
the board, uh, they're here with us today. Uh, I'm here to

1017
01:15:24,705 --> 01:15:28,385
not present the full report, but to give the highlights, uh, that we, and key

1018
01:15:28,845 --> 01:15:32,485
takeaways of, of that, of that report. Uh, this was presented

1019
01:15:32,985 --> 01:15:36,805
to the commission a few weeks ago, and we, we plan to

1020
01:15:37,005 --> 01:15:41,005
have, uh, some dialogue with stakeholders, as I said earlier, in a couple weeks, to, to go

1021
01:15:41,125 --> 01:15:42,805
through the, the specifics of the report.

1022
01:15:45,385 --> 01:15:49,335
and so, um, starting with the

1023
01:15:49,495 --> 01:15:53,415
conclusions, and I think this was, was, was kind of key, was that

1024
01:15:53,945 --> 01:15:57,895
there is no silver bullet, uh, market design solution, uh, either

1025
01:15:58,475 --> 01:16:02,355
on the load side, uh, with, with potential load curtailment or,

1026
01:16:03,155 --> 01:16:06,245
uh, on the generation side market design. However,

1027
01:16:07,475 --> 01:16:11,455
and this gets to the question that, that, uh, I just just responded to,

1028
01:16:11,675 --> 01:16:15,535
is that when you, when you do look at, uh, the impacts of these

1029
01:16:15,815 --> 01:16:19,055
different, uh, tools, they do have significant effects individually

1030
01:16:20,035 --> 01:16:23,835
on improving, uh, the resource adequacy and the potential for,

1031
01:16:24,075 --> 01:16:27,755
for outages in the future. And in particular, the,

1032
01:16:28,395 --> 01:16:32,395
the drs ancillary service plus case, as opposed to

1033
01:16:32,685 --> 01:16:36,615
some other analyses we looked at. And we compared different alternative scenarios. And

1034
01:16:36,815 --> 01:16:40,775
that included, um, the dispatchable reliability, reser

1035
01:16:41,015 --> 01:16:44,955
reserve service that was presented in 1309. We looked at that as

1036
01:16:45,175 --> 01:16:48,995
just an ancillary ser as a, as primarily as an ancillary service design. And

1037
01:16:49,215 --> 01:16:53,175
we did look at the ordc, um slash adcs as they

1038
01:16:53,295 --> 01:16:57,275
are now, uh, in, in the market. And we looked at modifications there and said, well, would those be

1039
01:16:57,495 --> 01:17:01,255
significant enough? And what we found was that the, the drs

1040
01:17:01,775 --> 01:17:05,175
ancillary service plus scenario adds more dispatchable

1041
01:17:05,815 --> 01:17:09,405
capacity at lower costs and provides greater resource adequacy

1042
01:17:09,925 --> 01:17:13,805
benefits under, uh, different load and, and extreme weather conditions.

1043
01:17:14,405 --> 01:17:18,365
and so it, it did provide the, the most benefits at, at the

1044
01:17:18,485 --> 01:17:22,385
lowest value, at the lowest cost. And so, uh, uh,

1045
01:17:22,705 --> 01:17:26,345
so the study did a good job of, of evaluating that, that universe. And,

1046
01:17:27,025 --> 01:17:30,905
and so when we look at the combination of that drs an

1047
01:17:31,125 --> 01:17:34,485
service plus in combination with the senate bill six programs

1048
01:17:35,145 --> 01:17:39,045
to, for large load and, and large load curtailment, you can end

1049
01:17:39,205 --> 01:17:43,165
up in a scenario where you'll cover a range of potential outcomes that

1050
01:17:43,445 --> 01:17:44,175
that could potentially exist.

1051
01:17:47,855 --> 01:17:51,835
all right? And so the, the first slide here is essentially an

1052
01:17:52,035 --> 01:17:55,405
evaluation of, of the status quo market design, uh, under,

1053
01:17:56,335 --> 01:18:00,125
um, under, under stress conditions, either a winter storm

1054
01:18:00,575 --> 01:18:04,315
or a summer heat wave. And the winter storm, uh, this is, is the equivalent

1055
01:18:04,735 --> 01:18:08,505
of winter storm elliot, not necessarily winter storm yuri,

1056
01:18:08,795 --> 01:18:12,595
winter storm. Elliot was, uh, uh, essentially a christmas

1057
01:18:13,225 --> 01:18:17,035
time, uh, winter storm in, in 2022. The summer

1058
01:18:17,235 --> 01:18:20,995
heat wave that we looked at was just, uh, the summer we experienced a few years ago in 2023.

1059
01:18:22,135 --> 01:18:25,895
so these are, are, uh, relatively recent events. And

1060
01:18:26,255 --> 01:18:29,075
if we apply the same conditions under the load conditions,

1061
01:18:30,335 --> 01:18:33,655
uh, and by load conditions, we looked at the ercot 2025

1062
01:18:34,635 --> 01:18:38,475
long-term load forecast and an aurora, uh, what

1063
01:18:38,715 --> 01:18:42,235
they call the aurora central case, which is, is a more moderate demand scenario.

1064
01:18:43,055 --> 01:18:46,855
uh, that what we find in both scenarios that we see, uh, the,

1065
01:18:47,175 --> 01:18:50,835
the duration, uh, the magnitude, which you see here

1066
01:18:51,315 --> 01:18:55,115
represented in the bars in terms of the outages, the duration, uh, in terms of hours,

1067
01:18:55,775 --> 01:18:59,695
uh, you see around that, uh, 15, 11 to 15 hour range. And

1068
01:18:59,915 --> 01:19:03,675
the total amount of, of load shed, you see are in the gray boxes under the chart

1069
01:19:04,455 --> 01:19:08,395
of, uh, in, in, of about 60 to over a hundred gigawatt

1070
01:19:08,955 --> 01:19:12,915
hours of, of load shed. And then the costs are represented in the

1071
01:19:13,115 --> 01:19:16,975
bottom chart in terms of how much cost at the, at

1072
01:19:17,195 --> 01:19:21,055
the value of lost load would we expect, uh, to

1073
01:19:21,275 --> 01:19:25,215
occur during those events. And you'll see that being, uh, ranging for about 2 billion to,

1074
01:19:25,895 --> 01:19:29,635
to just, just under $4 billion. So this is under the status

1075
01:19:30,055 --> 01:19:33,795
quo in 2030 in the event that we had, uh, an event,

1076
01:19:34,815 --> 01:19:38,625
uh, like, uh, like winter storm elliot, or like,

1077
01:19:39,295 --> 01:19:43,075
uh, uh, a summer event like 2023. So it is, it is a reasonable

1078
01:19:43,855 --> 01:19:47,755
to assume that those could potentially occur in the future, and this is the outcomes that we

1079
01:19:47,875 --> 01:19:49,355
would anticipate based on their analysis.

1080
01:19:52,505 --> 01:19:56,355
alright, so we asked, we asked the aurora staff to look

1081
01:19:56,535 --> 01:20:00,395
at, uh, the senate bill six. Uh, we knew that that had

1082
01:20:00,595 --> 01:20:04,435
the potential to improve the scenarios. And, and what

1083
01:20:04,635 --> 01:20:08,365
we see is, is essentially mixed, uh, that under some scenarios it has significant

1084
01:20:09,125 --> 01:20:12,885
benefits under other scenarios. It, it, uh, has some benefit, but, but limited

1085
01:20:13,155 --> 01:20:16,525
effects. And, and so we'll start with the charts on the, on the left,

1086
01:20:17,215 --> 01:20:20,885
which show under high load growth scenario, this, this being equivalent to

1087
01:20:21,285 --> 01:20:24,465
a significant amount of large load, uh, inter interconnection

1088
01:20:25,545 --> 01:20:29,355
by 2030. Uh, and what we see under those scenarios that, that

1089
01:20:29,755 --> 01:20:33,515
flexibility afforded to you under those scenarios under emergency

1090
01:20:34,125 --> 01:20:37,985
conditions. And that's, that's important that a lot of that, uh, the

1091
01:20:38,225 --> 01:20:42,045
access to that capability occurs, uh, not necessarily under market conditions, but potentially

1092
01:20:42,525 --> 01:20:45,955
under emergency conditions. You can, you can, uh, potentially

1093
01:20:46,645 --> 01:20:50,545
address the, both the summer and winter events and

1094
01:20:50,765 --> 01:20:54,245
that, that you see there by the elimination of those bars and elimination

1095
01:20:54,805 --> 01:20:58,565
of the costs on the right hand side. If you end up with a moderate

1096
01:20:58,875 --> 01:21:02,785
load growth scenario where you do have, uh, data centers coming, but

1097
01:21:03,005 --> 01:21:06,885
maybe perhaps not at that, that high level that is envisioned in a long-term

1098
01:21:07,235 --> 01:21:11,235
load forecast, then what we see is that there's a more

1099
01:21:11,525 --> 01:21:15,045
limited effect that those large loads can have on on outcomes

1100
01:21:15,705 --> 01:21:19,565
and that can lead to significant, still, still have significant outages

1101
01:21:20,145 --> 01:21:23,935
remain and significant costs as well. So, uh, again,

1102
01:21:24,285 --> 01:21:28,145
this is a scenario where the, the senate bill six large load, uh, uh,

1103
01:21:28,365 --> 01:21:32,325
curtailments under emergencies can have positive effects. But again, it's not a

1104
01:21:32,445 --> 01:21:36,265
silver bullet. All

1105
01:21:36,485 --> 01:21:39,925
right? And then concentrating on the drs

1106
01:21:40,525 --> 01:21:44,305
ancillary service plus scenario, we find that, again, it

1107
01:21:44,705 --> 01:21:48,525
has the potential to help alleviate both under the high and the

1108
01:21:48,845 --> 01:21:52,045
moderate load growth scenarios, but it doesn't eliminate the scenario.

1109
01:21:52,985 --> 01:21:56,725
uh, what we do also look at is, uh, uh, the storage

1110
01:21:57,485 --> 01:22:01,375
included and not included. And so that does add another wrinkle. The, the khaki

1111
01:22:01,725 --> 01:22:05,565
color that you see here is has the storage excluded the yellow color, has it

1112
01:22:05,765 --> 01:22:09,725
storage included. And what we find is that it's, it's mixed in some

1113
01:22:10,205 --> 01:22:14,115
scenarios, the storage can help in some scenarios. The storage doesn't

1114
01:22:14,605 --> 01:22:18,305
have the same benefits as, as excluding them. Uh,

1115
01:22:18,665 --> 01:22:22,165
and again, I think that's primarily related to duration. When you're, when you're

1116
01:22:22,725 --> 01:22:26,365
evaluate, we evaluated this with four hour storage and four hour storage,

1117
01:22:27,545 --> 01:22:31,275
uh, under, under summer conditions tends to be, uh, uh, more

1118
01:22:31,565 --> 01:22:35,325
effective under the longer winter term scenarios. It, it, it tends to be a little less effective

1119
01:22:36,435 --> 01:22:40,285
than dispatchable thermal capability. And so really

1120
01:22:40,605 --> 01:22:43,955
what we see is a reduction, uh, when we have ansi service, plus

1121
01:22:44,745 --> 01:22:48,505
we see a reduction in the magnitude, the reduction in frequency, the

1122
01:22:48,925 --> 01:22:52,925
reduction in the number of hours that we see impacted in a reduction in the costs. But again, it

1123
01:22:53,125 --> 01:22:56,805
is not a silver bullet and, and we're cognizant of that, but it does have a significant

1124
01:22:57,225 --> 01:23:01,045
impact on the outcomes that we see. And interestingly enough too, is that

1125
01:23:01,695 --> 01:23:05,695
where the, under the high growth scenario, the large loads

1126
01:23:06,045 --> 01:23:09,965
tend to to be more effective. We see under the moderate load growth scenario

1127
01:23:10,195 --> 01:23:13,645
that the, uh, drs ansley service plus, uh, tends to be,

1128
01:23:14,225 --> 01:23:18,205
um, a bit more effective in addressing concerns. And that, that, that shows they're a bit

1129
01:23:18,285 --> 01:23:19,245
complimentary, if you will.

1130
01:23:22,975 --> 01:23:26,385
okay. And then comparing the drs ansi service plus to alternatives,

1131
01:23:27,765 --> 01:23:31,745
we looked at the cost, we looked at the amount of, uh, dispatchable

1132
01:23:32,185 --> 01:23:36,145
generation that we see added, and that's sort of a proxy in their, in their report, they

1133
01:23:36,425 --> 01:23:40,255
show that ultimately the, the drs ancillary service plus

1134
01:23:40,825 --> 01:23:44,825
scenario does have a greater level of reliability benefits

1135
01:23:45,205 --> 01:23:49,185
as compared to the others. And so, um, but, but in this chart, we're covering

1136
01:23:49,265 --> 01:23:52,915
the costs and, and the quantities. And what we see on the far left chart

1137
01:23:53,485 --> 01:23:57,345
is this is the all in system costs under the different scenarios,

1138
01:23:57,625 --> 01:24:01,025
including the status quo. The chart in the middle,

1139
01:24:01,805 --> 01:24:05,455
uh, effectively does the, the comparison for you. It's comparing each

1140
01:24:06,065 --> 01:24:09,385
scenario, the ansi service scenario, the ansi service plus scenario,

1141
01:24:10,205 --> 01:24:14,185
and the ordc scenarios. And it's comparing it. And, and we

1142
01:24:14,305 --> 01:24:18,175
see in the middle chart that ultimately the cost associated with

1143
01:24:18,705 --> 01:24:22,605
drs ans answer service, ansley service case, uh, uh,

1144
01:24:22,845 --> 01:24:26,705
we see a net net cost of about 700 million in the

1145
01:24:26,945 --> 01:24:30,585
drs anser service. Plus case, we see a net cost of 400 million.

1146
01:24:31,925 --> 01:24:34,505
and we see on the rdc case a cost of about 2.2 billion.

1147
01:24:35,965 --> 01:24:39,905
and so very different cost profiles depending on which scenario

1148
01:24:40,045 --> 01:24:43,845
you take. But, um, what we see in the final chart is

1149
01:24:44,065 --> 01:24:47,905
how much dispatchable capacity relative to the status quo do we see,

1150
01:24:48,645 --> 01:24:52,585
uh, under the ancillary service scenario. Uh, we see 900 megawatts of incremental,

1151
01:24:53,645 --> 01:24:57,485
uh, capacity. Again, it's a very incremental program. Uh, it

1152
01:24:57,705 --> 01:25:01,585
is, it is designed as a, primarily an ancillary service. And so

1153
01:25:01,745 --> 01:25:05,305
it's, it's going to have incremental effects. Uh, whereas the ancillary

1154
01:25:05,825 --> 01:25:09,425
service plus case, we see five gigawatts of additional dispatchable generation,

1155
01:25:10,285 --> 01:25:14,245
and what we see is a reduction in the amount of solar, uh,

1156
01:25:14,645 --> 01:25:18,525
and the short term and, and even some of the four hour storage. And

1157
01:25:18,745 --> 01:25:22,285
then under the ordc, what we see is an increase of,

1158
01:25:22,805 --> 01:25:26,685
uh, 1.7 gigawatts of dispatchable thermal capacity. But

1159
01:25:26,905 --> 01:25:30,305
we also see solar. We also see one hour battery. We also see two hour battery,

1160
01:25:31,125 --> 01:25:34,905
uh, storage as well, uh, in addition. So, uh, in terms

1161
01:25:35,165 --> 01:25:39,125
of additional dispatchable thermal cap capacity, the

1162
01:25:39,465 --> 01:25:43,345
drs ancillary service plus is, uh, we see it's the lower net costs,

1163
01:25:43,845 --> 01:25:47,705
we see it's more dispatchable capacity. And when we translate that into reliability,

1164
01:25:48,185 --> 01:25:52,105
it has, uh, greater reliability benefits compared to the other scenarios as well.

1165
01:25:54,925 --> 01:25:58,865
so in terms of next steps, uh, the two nprs that we've been talking

1166
01:25:59,105 --> 01:26:02,645
about, the 1309 has the urgent status, and the

1167
01:26:03,125 --> 01:26:06,915
1310 will also be brought up in the stakeholder process. It's

1168
01:26:07,205 --> 01:26:10,895
important to note that what we're deeming the release factor, which

1169
01:26:11,245 --> 01:26:15,245
is a part of the ancillary service plus scenario, uh, that's what creates

1170
01:26:15,825 --> 01:26:19,205
the reli. The, the resource adequacy benefit is this release factor.

1171
01:26:20,005 --> 01:26:23,845
ultimately, uh, that is going to be in an off position until approved

1172
01:26:24,105 --> 01:26:27,685
by the, the commission to, to switch it into the on position.

1173
01:26:28,385 --> 01:26:32,205
and then ultimately, the energy storage under thir, uh, npr

1174
01:26:32,925 --> 01:26:36,885
1310 will also be in an off position until approved to turn on

1175
01:26:37,045 --> 01:26:41,045
by the puc. And then, and then finally, as I noted,

1176
01:26:41,325 --> 01:26:44,955
we will be having a stakeholder discussion on december 17th. So again, a week from

1177
01:26:45,805 --> 01:26:49,745
a week from tomorrow, we will be discussing with stakeholders all the various, uh,

1178
01:26:49,965 --> 01:26:53,725
addressing all their various questions. And we've been receiving several of them, uh, but,

1179
01:26:54,065 --> 01:26:58,045
but, uh, mostly pointing to pointing them to the discussion that we have, so we

1180
01:26:58,165 --> 01:27:02,085
can all hear it, and, and I'll have, uh, uh, a common set of understanding of what the findings

1181
01:27:02,405 --> 01:27:06,405
of the report were. So, uh, I'm happy to answer any questions. I also have, like I

1182
01:27:06,525 --> 01:27:10,325
said, the, the representatives from aurora to answer any questions that you may have. Uh, keith,

1183
01:27:10,675 --> 01:27:14,205
I'll start with the questions. Let's go back to, uh, slide six, if you would.

1184
01:27:15,145 --> 01:27:19,075
yes. Looking at the right hand column. So we saw a decrease in battery

1185
01:27:19,625 --> 01:27:23,525
and storage, right? Uh, so what we have in that, that right

1186
01:27:23,805 --> 01:27:27,565
hand chart, what you see in that middle scenario right, is a, a decline

1187
01:27:28,225 --> 01:27:32,165
in, and this is relative to this status quo case, correct? Right. So you're

1188
01:27:32,365 --> 01:27:36,065
not, you're not, you're not retiring those resources, you're just adding

1189
01:27:36,595 --> 01:27:40,085
less, you're not adding them. So the, my question is, are they not being added because

1190
01:27:40,625 --> 01:27:44,465
of a policy consideration or an economic consideration? It is

1191
01:27:44,835 --> 01:27:48,675
primarily because of the economics of the drrs ansi

1192
01:27:48,965 --> 01:27:52,925
service scenario. So the as plus, as plus scenario correct, uh, creates a

1193
01:27:53,045 --> 01:27:57,045
lower economic incentive for capital deployment for storage companies.

1194
01:27:57,205 --> 01:28:00,825
is that correct? For the, for storage and for the, um,

1195
01:28:01,465 --> 01:28:05,445
for the solar as well. And, and just to point out, this whole, all of the modeling

1196
01:28:05,705 --> 01:28:09,635
on this page is done with the batteries ineligible to participate,

1197
01:28:10,325 --> 01:28:13,995
correct? Correct. As the prior slides, that's right. We did see scenarios with eligibility

1198
01:28:14,685 --> 01:28:18,365
inclusive and non and non-inclusive. So this one,

1199
01:28:18,825 --> 01:28:22,765
all of these scenarios show without batteries being eligible. Correct. But that's why I was trying to dis grade

1200
01:28:23,105 --> 01:28:27,005
is how much of it's because batteries are ineligible versus economics that were causing that

1201
01:28:27,285 --> 01:28:30,975
capital and not be deployed. And, and, and there isn't. There

1202
01:28:31,325 --> 01:28:35,205
is a chart where, where pablo is, is noted. We have a comparable chart that

1203
01:28:35,485 --> 01:28:39,405
shows the battery's eligible, but those batteries eligible are the four

1204
01:28:39,605 --> 01:28:43,605
hour batteries, right? So what we'll see there in that chart is an increase.

1205
01:28:44,385 --> 01:28:48,265
um, so the increase in the dispatchable capacity will won't be as high. So

1206
01:28:48,485 --> 01:28:52,085
it's five gigawatts in this, it'll be a little bit less, and then you'll have

1207
01:28:52,565 --> 01:28:56,545
a, a value for the, um, the four hour storage, but

1208
01:28:56,765 --> 01:29:00,685
then you'll, you'll have reductions in the short hour, the short duration

1209
01:29:00,965 --> 01:29:04,685
storage, as well as the solar. Okay. Any other questions? There's

1210
01:29:05,005 --> 01:29:08,925
lots to digest. Okay, chairman, thank you, mr. Chairman. Uh, keith, I

1211
01:29:09,045 --> 01:29:12,785
think it would be probably beneficial for the board members to hear, uh,

1212
01:29:13,105 --> 01:29:16,985
to hear you respond to a question I asked at our last open meeting. Um, you

1213
01:29:17,205 --> 01:29:20,885
know, some of the, the critique I've heard of this has been around

1214
01:29:21,365 --> 01:29:25,365
a lot of these charts, and a lot of the discussion sounds similar to the discussion around the pcm.

1215
01:29:26,305 --> 01:29:30,085
so can you kind of compare and contrast this to the pcm

1216
01:29:30,605 --> 01:29:34,005
market design that we had, uh, so many discussions about previously?

1217
01:29:35,565 --> 01:29:39,365
absolutely. And, and if you just bear with me with a moment, I'll sort of start with

1218
01:29:40,705 --> 01:29:44,515
an analogy and then we'll get into the specifics of how it can differ from

1219
01:29:44,945 --> 01:29:48,925
the, the, the pcm. So I think there, what we've heard

1220
01:29:49,085 --> 01:29:53,075
from folks is, is potentially some, um, some

1221
01:29:53,645 --> 01:29:57,445
reactions that are, well, this looks like pcm or this is a capacity market.

1222
01:29:57,905 --> 01:30:01,245
and, and I think part of that is that when you're seeing something that you're,

1223
01:30:02,115 --> 01:30:06,045
that you, you've never seen before or is new to you, um, and we see this with

1224
01:30:06,355 --> 01:30:10,245
lots of innovations and things that you're, you're gonna describe it like something, you know,

1225
01:30:11,345 --> 01:30:15,245
and for example, if, if you're, you're going to the ocean for the

1226
01:30:15,365 --> 01:30:18,885
first time with, with, with a child and saying that you see a,

1227
01:30:19,645 --> 01:30:23,565
a, a big creature jump out of the water and, and the child says, hey, look at the big

1228
01:30:23,685 --> 01:30:27,305
fish. Well, um, a whale is not a fish. Um,

1229
01:30:27,705 --> 01:30:31,325
but you can forgive them for, for mistaking the difference between the two.

1230
01:30:32,105 --> 01:30:35,845
and so I, I sort of look at these reactions the same way, because

1231
01:30:37,025 --> 01:30:40,995
the, the primary difference between the drs ancillary service plus

1232
01:30:41,355 --> 01:30:45,225
case and the pcm is, uh,

1233
01:30:45,905 --> 01:30:49,765
we talk about, uh, our market as an energy only, but that's

1234
01:30:49,965 --> 01:30:53,565
not entirely true because we have ansley service markets.

1235
01:30:54,305 --> 01:30:58,285
we have a crr market, we have an ers process, so we have

1236
01:30:58,525 --> 01:31:02,525
things that compliment the energy only market, and one of them is ansley services,

1237
01:31:03,175 --> 01:31:07,165
which is, which is what drs, uh, is designed

1238
01:31:07,245 --> 01:31:11,005
to be an ansley service. And so what we have done in this release

1239
01:31:11,365 --> 01:31:14,715
factor process is to use that ancillary service mechanism

1240
01:31:16,505 --> 01:31:19,885
and to allow it to enhance resource adequacy.

1241
01:31:20,825 --> 01:31:24,525
and so it will be paid like an ancillary service. It'll be settled like an ancillary service.

1242
01:31:25,225 --> 01:31:29,165
and, and so it's using that mechanism. And so we don't

1243
01:31:29,605 --> 01:31:33,605
have a mechanism like that today. Um, and it's my understanding that no

1244
01:31:33,805 --> 01:31:37,465
market has a mechanism quite like that. And so it is

1245
01:31:37,945 --> 01:31:41,845
not a separate mechanism like you would see with the

1246
01:31:42,205 --> 01:31:46,065
capacity market, like you would see with the pcm that sits outside of

1247
01:31:46,285 --> 01:31:49,965
that existing structure. And so really, we're using

1248
01:31:50,385 --> 01:31:54,385
ansley services to promote resource adequacy. And I think that's

1249
01:31:54,805 --> 01:31:58,685
very different. And, and, and I think one of the things that I think of is

1250
01:31:58,885 --> 01:32:02,765
there, there are, there are different ways you can achieve resource adequacy. Um, just

1251
01:32:03,045 --> 01:32:06,785
like you have many creatures swimming in the sea, but not all of them are

1252
01:32:07,245 --> 01:32:11,205
capacity markets. And not all of them are pcm in this case. It is in fact an ancillary service,

1253
01:32:12,025 --> 01:32:14,285
um, um, to promote resource adequacy.

1254
01:32:16,365 --> 01:32:20,115
it's kind of a fishy analogy. Uh, anyway,

1255
01:32:20,635 --> 01:32:24,455
any other questions or comments on this particular subject? There's

1256
01:32:24,895 --> 01:32:28,755
a lot to digest here. Thanks for this analysis. And all

1257
01:32:28,975 --> 01:32:32,195
of us are still digesting the very thorough aurora report.

1258
01:32:33,595 --> 01:32:37,415
um, was any analysis done looking at like a

1259
01:32:37,645 --> 01:32:40,805
$0 price floor and $0,

1260
01:32:43,835 --> 01:32:47,635
um, any price floor at all? No. We,

1261
01:32:47,955 --> 01:32:51,695
we did not look at, uh, price floors as, as part of the analysis.

1262
01:32:52,045 --> 01:32:55,875
okay. Okay. Public, did you want to, I, I was just gonna add

1263
01:32:56,115 --> 01:32:59,835
on to chair thomas's, uh, chairman gleason's question. And

1264
01:33:00,415 --> 01:33:04,215
I, I think I, the important question that, that I also hear

1265
01:33:04,785 --> 01:33:08,575
often time and as we discussed this, is why does this question

1266
01:33:08,805 --> 01:33:12,405
keep coming up? Why, why are we continuously trying to find

1267
01:33:13,015 --> 01:33:16,965
something to address what is either a perceived

1268
01:33:17,575 --> 01:33:21,275
or real gap in the energy market? And

1269
01:33:21,675 --> 01:33:25,575
as you look back historically over the last 10 years, you see a

1270
01:33:25,745 --> 01:33:29,735
trend of resource additions onto the grid that has been fairly consistent

1271
01:33:30,295 --> 01:33:34,295
and steady defined by the market construct that we're operating today.

1272
01:33:35,195 --> 01:33:38,795
and its primary focus on economic signals being the,

1273
01:33:39,395 --> 01:33:43,015
um, what drives favorability and for success in the market.

1274
01:33:44,235 --> 01:33:47,795
what's, I think not fully considered in our current market design,

1275
01:33:48,315 --> 01:33:51,775
and, and I alluded a little this a bit to this in my comments last night at the annual meeting,

1276
01:33:52,715 --> 01:33:56,655
is that, you know, the market design was fundamentally put in place at a

1277
01:33:56,775 --> 01:34:00,695
time when all of the resources that were

1278
01:34:01,005 --> 01:34:05,005
operating with that, uh, construct were fairly homogenous. They

1279
01:34:05,295 --> 01:34:09,295
were thermal resources, long duration. There were coal, there were nuclear, they were in

1280
01:34:09,415 --> 01:34:13,355
actual gas. And so what the market design, which was intended to

1281
01:34:13,575 --> 01:34:17,265
drive efficiency did, is it drove, it was driving efficiency among

1282
01:34:17,615 --> 01:34:21,015
a resource set that had the same operating and reliability characteristics

1283
01:34:21,795 --> 01:34:25,245
or very similar ones. And it would replace less efficient thermal

1284
01:34:26,175 --> 01:34:29,975
resources with more efficient thermal resources, with the introduction

1285
01:34:30,515 --> 01:34:34,375
of a completely different set of resources that have

1286
01:34:34,535 --> 01:34:38,325
different operating characteristics and different reliability characteristics like

1287
01:34:38,765 --> 01:34:42,535
wind, solar, and short duration resources. The same market

1288
01:34:43,335 --> 01:34:46,525
construct, which is designed to bring efficiencies only

1289
01:34:47,355 --> 01:34:51,205
is now doing so with resources that have very different reliability

1290
01:34:51,895 --> 01:34:55,835
characteristics. And, and that's the reason why this issue exists, is

1291
01:34:56,055 --> 01:34:59,485
because the original intent, which was always assuming to deliver reliability,

1292
01:35:00,125 --> 01:35:03,885
because the reliability characteristics were the same in the, in the

1293
01:35:04,285 --> 01:35:08,265
construct and in the resources that they were going to, it was gonna be supporting. But

1294
01:35:08,485 --> 01:35:12,315
because those characteristics have changed so meaningfully, we now have, uh, over

1295
01:35:12,915 --> 01:35:16,745
70 gigawatts, 70 gigawatts of renew of, of

1296
01:35:17,075 --> 01:35:21,005
wind and solar installed on, on the ercot grid. We reach periods of

1297
01:35:21,085 --> 01:35:25,045
time where 75% of the energy delivered in the ercot

1298
01:35:25,285 --> 01:35:28,925
system is coming from just wind and solar. We have a completely different

1299
01:35:29,525 --> 01:35:33,245
resource mix. And so the economic incentives have remained fundamentally

1300
01:35:34,145 --> 01:35:38,045
the same. The operating characteristics are radically different than what

1301
01:35:38,245 --> 01:35:42,005
they were 25 years ago. So that's the reason this

1302
01:35:42,405 --> 01:35:46,245
question keeps coming up. We are trying to find a way to continue to sustain this market for the next 25

1303
01:35:46,685 --> 01:35:50,685
years, and now we're facing a large high growth environment ahead of

1304
01:35:50,805 --> 01:35:54,805
us. And so we're trying to figure out how do we keep up with that growth? How do we

1305
01:35:54,925 --> 01:35:58,635
make sure that we can be ahead of that growth so that the bedrock

1306
01:35:59,125 --> 01:36:02,855
of this organizational's mission, which is reliability, never falls

1307
01:36:03,225 --> 01:36:07,165
behind the needs and the expectations of texans on a business

1308
01:36:07,305 --> 01:36:11,245
or on a residential front. And so I think that's really the important question, is to acknowledge

1309
01:36:11,795 --> 01:36:15,785
that we've got this issue fundamentally, and that the underlying system has

1310
01:36:16,005 --> 01:36:19,735
changed. And so we have to find a way to continue to support those

1311
01:36:20,525 --> 01:36:24,275
original goals of this energy only market. Those original goals were

1312
01:36:24,925 --> 01:36:28,405
presumed reliability and improved efficiency with subsequent

1313
01:36:29,045 --> 01:36:33,025
investment in subsequent refreshments. Those original goals are not

1314
01:36:33,245 --> 01:36:36,605
being met in the same way today because of the very different characteristics

1315
01:36:37,665 --> 01:36:41,365
of that resource mix on the grill resource mix on the grill on the grid.

1316
01:36:43,415 --> 01:36:47,295
thank you. That's helpful. Any other comments or questions?

1317
01:36:48,885 --> 01:36:52,715
okay, so I'm sorry, real quick, sorry. Um,

1318
01:36:53,745 --> 01:36:57,735
pablo, you said one comment about building for the next 25 years. So do you think

1319
01:36:57,975 --> 01:37:01,735
drs if used correctly, can be what is solving

1320
01:37:02,235 --> 01:37:05,855
the problem for the next 20 to 25 years? I, I think it has the potential

1321
01:37:06,375 --> 01:37:09,875
to, because it's, it's, it's tied directly to

1322
01:37:10,435 --> 01:37:13,485
the, um, to the shortfall

1323
01:37:14,795 --> 01:37:18,295
of a balanced resource mix. Looking forward using that reliability

1324
01:37:19,095 --> 01:37:22,895
standard, the intention would be use the reliability standard analysis to

1325
01:37:23,335 --> 01:37:27,215
identify if in the future we're gonna lack the appropriate mix to meet reliability,

1326
01:37:28,235 --> 01:37:32,015
and then find the most cost effective way to get there, to get the, that

1327
01:37:32,255 --> 01:37:36,085
answer. And so if it's constantly providing real

1328
01:37:36,375 --> 01:37:40,175
time in injects into the market, looking ahead at a need to

1329
01:37:40,745 --> 01:37:44,455
anticipate the needs of the market a few years down the road, which that reliability standard

1330
01:37:44,815 --> 01:37:48,775
analysis will do, I think it has the potential to keep up with what is needed.

1331
01:37:49,075 --> 01:37:52,935
and this is based on, you know, a set of assumptions. It's looking at 2030, it's looking at the assumptions

1332
01:37:53,335 --> 01:37:57,325
we've put forth, which was the high load case, the assumptions that aurora put forth, which were the

1333
01:37:57,565 --> 01:38:01,125
moderate load case. And it says, okay, based on those assumptions, here's the numbers.

1334
01:38:01,865 --> 01:38:05,655
but as that changes, which changes every week, it'll be able to adapt

1335
01:38:06,265 --> 01:38:10,245
to those needs by constantly having that view of looking forward and trying to

1336
01:38:10,365 --> 01:38:13,795
fill in that gap. So I do think it has the potential to be a sustainable part

1337
01:38:14,385 --> 01:38:18,345
of that solution set. And, and frankly, I think it's a, it's a relatively low

1338
01:38:18,595 --> 01:38:22,545
risk way to put something into the toolbox that as

1339
01:38:22,825 --> 01:38:26,405
the commission and the stakeholders in the market look at that growth being

1340
01:38:26,965 --> 01:38:30,865
realized, we start to see is the economic growth actually materializing to

1341
01:38:31,085 --> 01:38:34,985
the degree and to the speed that, uh, that we anticipated? May we

1342
01:38:35,205 --> 01:38:38,045
now have a tool that we can, you know, put in place and, and see how that works.

1343
01:38:40,955 --> 01:38:44,925
okay. Any other questions? So keith, update us on one

1344
01:38:45,125 --> 01:38:48,965
last issue. So this is under consideration now, and what, what are the next steps? When

1345
01:38:49,245 --> 01:38:52,665
does the board see this again? So, so, um,

1346
01:38:53,795 --> 01:38:57,685
with regards to the drs ancillary service scenario

1347
01:38:58,595 --> 01:39:02,485
that you'll see in june. Okay, my understanding and discussions

1348
01:39:03,085 --> 01:39:06,405
with, with, uh, ta leadership is they're, they will

1349
01:39:07,335 --> 01:39:11,325
bring both, but if they can't do both at the same time,

1350
01:39:11,925 --> 01:39:15,845
1310 will go slower. 1309 would go faster. Okay. As we discussed

1351
01:39:16,285 --> 01:39:20,205
yesterday. As discussed yesterday. Okay. I just wanted the board to recognize

1352
01:39:20,365 --> 01:39:24,205
this is coming back. Any other questions, comments?

1353
01:39:24,705 --> 01:39:28,495
uh, do we need aurora to comment or we good at this stage?

1354
01:39:29,995 --> 01:39:33,805
okay. Looks like we're good. Thank you, keith. Thank you. Uh, the next is agenda item

1355
01:39:34,155 --> 01:39:38,085
16, system planning operations. There are two sub items. The first

1356
01:39:38,345 --> 01:39:42,165
is agenda item 16.1, system operations and winter

1357
01:39:42,405 --> 01:39:44,545
weather update presented by dan woodfin. Dan,

1358
01:39:48,595 --> 01:39:52,485
good morning. Got, uh, three items I wanna talk to you about this morning. Uh, the first

1359
01:39:52,665 --> 01:39:56,175
is kind of a preview of, um, winter, maybe

1360
01:40:06,025 --> 01:40:06,715
not moving. Okay.

1361
01:40:11,755 --> 01:40:15,005
okay. Um, so, um, our meteorologists are expecting

1362
01:40:15,965 --> 01:40:19,755
a cooler winter over average

1363
01:40:20,465 --> 01:40:24,195
across the entire winter this year than what we've seen say the last four

1364
01:40:24,485 --> 01:40:28,365
years, but that still would be above average

1365
01:40:29,205 --> 01:40:33,115
temperatures over the course of that winter. We've just seen such hot winters,

1366
01:40:33,865 --> 01:40:37,845
uh, the last, uh, four years that we could still be

1367
01:40:37,965 --> 01:40:41,805
cooler than those. And on average, high, hotter and all. They're

1368
01:40:42,125 --> 01:40:45,645
also expecting that we'd see, uh, from a precipitation perspective,

1369
01:40:46,245 --> 01:40:49,885
that we'd see drier than normal conditions over the course of the winter.

1370
01:40:51,065 --> 01:40:54,595
now, as, as we talk about every year, even in an above average

1371
01:40:55,315 --> 01:40:59,035
temperature, uh, period over the course of the whole winter, that

1372
01:40:59,325 --> 01:41:03,185
doesn't mean that we will not see significant coal spell during

1373
01:41:03,705 --> 01:41:06,845
or one or more significant coal spells during that winter.

1374
01:41:08,145 --> 01:41:11,895
and I think there, there may be more potential than that this year, since we've

1375
01:41:12,245 --> 01:41:15,895
already started to see some disruption of the polar

1376
01:41:16,425 --> 01:41:20,245
region. Uh, and it's caused really the northeast quadrant

1377
01:41:20,805 --> 01:41:24,645
of the us to see pretty cold weather already this, uh, so there's

1378
01:41:24,925 --> 01:41:28,755
always the potential for that. And that means we've, uh, collectively as an industry need

1379
01:41:29,045 --> 01:41:33,045
to be prepared for it. And, um, pablo talked

1380
01:41:33,245 --> 01:41:37,145
about this morning, some of the, the preparation work that we're, we're doing, uh,

1381
01:41:37,365 --> 01:41:38,405
through our weatherization program.

1382
01:41:41,715 --> 01:41:45,485
the next thing I wanted to talk about was we, we've talked about the last several meetings that

1383
01:41:45,785 --> 01:41:49,755
we're doing various studies related to ride through characteristics

1384
01:41:51,235 --> 01:41:54,975
of these new large electronic loads. And jeff talked about

1385
01:41:55,285 --> 01:41:59,135
yesterday that we're proposing, and the board has now made that a

1386
01:41:59,455 --> 01:42:03,035
priority revision, uh, to put in place, uh,

1387
01:42:03,805 --> 01:42:07,455
ride through standards for on a going forward

1388
01:42:07,985 --> 01:42:11,935
basis for these large electronic loads. But these studies

1389
01:42:12,315 --> 01:42:16,175
are really studying what's, what's already on the ground or what's already been approved to energize.

1390
01:42:17,195 --> 01:42:20,495
and so before we got too far into those studies, we wanted to give the opportunity

1391
01:42:21,315 --> 01:42:25,245
for the large electronic loads to provide updated

1392
01:42:25,965 --> 01:42:29,935
information so that we're not as having to assume kind of the most

1393
01:42:30,295 --> 01:42:34,135
conservative ride through characteristics, but if they have the

1394
01:42:34,335 --> 01:42:38,175
capability to do better than that, they can. They, we issued an rfi

1395
01:42:38,615 --> 01:42:42,595
that would allow them to provide better information to us. And

1396
01:42:42,815 --> 01:42:46,815
of course we had to ask for that through the tsps 'cause we don't have a

1397
01:42:46,935 --> 01:42:50,735
direct relationship with these large electronic loads. And we also put out a market notice.

1398
01:42:51,715 --> 01:42:54,935
and when we got back, uh, we got responses from nine of 24

1399
01:42:56,325 --> 01:43:00,175
rfis that we sent out. Um, only two of them showed that

1400
01:43:00,455 --> 01:43:04,315
they had better than the kind of the, what we call the iic

1401
01:43:05,225 --> 01:43:09,205
curve, the, um, um, that, that, that

1402
01:43:09,495 --> 01:43:13,415
kind of more, um, conservative, uh, assumption that we've been making

1403
01:43:13,675 --> 01:43:17,415
in these studies. So the studies going forward that we'll be bringing at forward to the stakeholder

1404
01:43:17,775 --> 01:43:21,375
groups, and probably here as well over the next couple of months

1405
01:43:21,845 --> 01:43:25,655
will be, um, uh, including the id curve for all, but those

1406
01:43:26,045 --> 01:43:29,815
that that show, um, that provided responses

1407
01:43:30,175 --> 01:43:34,145
that they can do better than that. Um, now there

1408
01:43:34,835 --> 01:43:38,445
is an ongoing opportunity for those guys to, uh, provide

1409
01:43:39,395 --> 01:43:42,695
better data, update their models, go through that process.

1410
01:43:43,755 --> 01:43:47,485
so there's, there's still that opening, uh, as, as we, uh, work

1411
01:43:47,775 --> 01:43:51,725
forward. So it, it highlights the need that,

1412
01:43:52,075 --> 01:43:55,685
that we may need a more direct relationship somehow

1413
01:43:56,195 --> 01:44:00,085
with these, uh, the large loads so that we can communicate with

1414
01:44:00,325 --> 01:44:04,205
them more directly and request information and then get information back from

1415
01:44:04,485 --> 01:44:07,285
them, is what we've, we've kind of the point of that.

1416
01:44:10,305 --> 01:44:14,125
and then finally, uh, we do a, a black start training every year. And of course,

1417
01:44:14,465 --> 01:44:18,075
we don't want to ever have a system black start type

1418
01:44:18,495 --> 01:44:22,465
event, but that doesn't mean we shouldn't plan for it. And so we have a plan in

1419
01:44:22,685 --> 01:44:26,465
place for restarting the grid if that were to ever happen. And, uh,

1420
01:44:26,945 --> 01:44:30,725
not only do we have a plan, but we train on it every year. This year we,

1421
01:44:30,985 --> 01:44:34,645
we did that through a six week cycle. So there's a different group of people

1422
01:44:34,995 --> 01:44:38,885
that go through the training on our simulator, including people

1423
01:44:39,275 --> 01:44:42,925
from ercot, my staff and ercot operations, but also people

1424
01:44:43,285 --> 01:44:46,995
from qsc and people from that own generation or that operate

1425
01:44:47,485 --> 01:44:50,685
generation and also transmission owners. And we go through a simulation

1426
01:44:51,505 --> 01:44:55,385
to say, what if it, what if we had to restart the grid? How would that work? And

1427
01:44:55,605 --> 01:44:59,285
so we had a really successful one this year, uh, but about 750

1428
01:45:00,285 --> 01:45:03,925
market participants that were involved in that. And I just wanted to highlight that because

1429
01:45:04,395 --> 01:45:07,845
it's not something you hear about every day, but it's, it's really a important

1430
01:45:08,845 --> 01:45:12,195
function, um, and involves a lot of people, obviously.

1431
01:45:13,905 --> 01:45:17,865
and that's it. I'm happy to answer any questions. So

1432
01:45:18,085 --> 01:45:20,945
is it appropriate, appropriate to, uh,

1433
01:45:22,905 --> 01:45:26,845
ask what the, uh, longest and shortest black

1434
01:45:27,045 --> 01:45:30,905
start scenarios look like? It's, uh, we

1435
01:45:31,125 --> 01:45:35,005
don't want to do it. And in fact, because it would take longer than anybody would be

1436
01:45:35,165 --> 01:45:39,045
comfortable with. Okay. And, you know, in fact, one of the things people always ask, well,

1437
01:45:39,285 --> 01:45:43,165
what could get us into that kind of situation? And I ha

1438
01:45:43,325 --> 01:45:47,175
always answer that, well, if we figure out something that might

1439
01:45:47,585 --> 01:45:51,565
get us in that situation, you'll see an nprr or some rule change

1440
01:45:52,145 --> 01:45:55,725
or some operating procedure change that will eliminate that risk

1441
01:45:56,185 --> 01:45:59,645
as quickly as possible. Yes, sir. That's, that's the appropriate response. Okay. Good.

1442
01:46:00,985 --> 01:46:04,885
any questions? Okay, jury, I

1443
01:46:05,005 --> 01:46:08,565
have a generic question. Um, now that we've implemented

1444
01:46:09,585 --> 01:46:13,585
rtc plus b, congratulations in our decks are the

1445
01:46:13,805 --> 01:46:16,425
typical operating metrics, are you projecting any

1446
01:46:18,565 --> 01:46:22,445
moderate changes in what the trend lines we're seeing as a result of rt c? I think that's

1447
01:46:22,645 --> 01:46:26,075
something we've been looking at very closely the last several days.

1448
01:46:26,665 --> 01:46:30,325
um, we've actually, I sent a note this morning, what about this?

1449
01:46:30,905 --> 01:46:34,805
and so we're, we're definitely looking at this. I think we, when we have more of a trend line

1450
01:46:35,045 --> 01:46:38,925
than having three points on it, we'll, we can come back and, and make kind

1451
01:46:39,205 --> 01:46:42,965
of more of a here's the, what we've seen both between me and keith, I think.

1452
01:46:44,635 --> 01:46:47,995
okay. Anything else for dan? Dan, do you have anything else? Okay,

1453
01:46:49,495 --> 01:46:53,375
peggy? Yeah. Hey, dan, I remember you presented to us after

1454
01:46:53,985 --> 01:46:57,625
the event over in europe mm-hmm . About, uh, looking at

1455
01:46:57,995 --> 01:47:01,885
lessons learned from that and ways to improve to get back

1456
01:47:02,085 --> 01:47:05,765
online quickly if we have an event. Are you guys still evaluating that?

1457
01:47:06,345 --> 01:47:09,165
and, uh, um, can you provide us an update?

1458
01:47:10,505 --> 01:47:14,245
um, we, we've done some things. One of the things that we're looking

1459
01:47:14,545 --> 01:47:18,385
at is, uh, the potential for, um, um,

1460
01:47:20,325 --> 01:47:24,285
temporary ac ties that we could use to, to make the island kind of the restoration

1461
01:47:24,845 --> 01:47:28,845
happen faster. I think that was one of the lessons learned that that could happen.

1462
01:47:29,345 --> 01:47:33,045
um, the, they were able to get that grid back. Blake started very quickly,

1463
01:47:34,435 --> 01:47:38,285
amazingly fast, in fact, uh, because of that, I actually hosted a group from

1464
01:47:38,485 --> 01:47:42,445
portugal recently, and, uh, that was one of the things that we talked about with

1465
01:47:42,645 --> 01:47:46,325
them. And so I think we're, we're looking at that. We've got a couple of different

1466
01:47:47,235 --> 01:47:51,105
kind of low level initiatives going on to look at that. Uh,

1467
01:47:51,385 --> 01:47:55,365
but that's, that's our intent to still learn from that. We don't have anything

1468
01:47:55,445 --> 01:47:56,825
ready to bring for you yet.

1469
01:48:00,435 --> 01:48:04,165
okay. Dan, I think that's it for you. I'm gonna say anybody else raise their hands.

1470
01:48:04,465 --> 01:48:08,405
so we're gonna pr uh, move to agenda item 16.2, system

1471
01:48:09,005 --> 01:48:12,905
planning and weatherization update. And, uh, christie's gonna be back at the podium for

1472
01:48:13,125 --> 01:48:13,285
this presentation.

1473
01:48:17,785 --> 01:48:21,365
all right, so we talked about the infrastructure needs from a transmission perspective.

1474
01:48:22,065 --> 01:48:25,795
and so I think as you look at some of the updates that we're seeing on the system, both

1475
01:48:26,085 --> 01:48:30,045
from the large load and the generation kind of completes that

1476
01:48:30,205 --> 01:48:34,045
picture. So I wanna share where we're at on those stats as well as work

1477
01:48:34,285 --> 01:48:37,985
that we're doing and the resource adequacy, the weatherization. Um,

1478
01:48:38,745 --> 01:48:42,355
and then finally some updates on where we are on reviewing

1479
01:48:42,965 --> 01:48:45,725
the information received from stakeholders from ger 2 45,

1480
01:48:50,175 --> 01:48:53,445
large load interconnection request. Um, a lot of press

1481
01:48:54,535 --> 01:48:58,265
being given to how this queue has, and

1482
01:48:58,645 --> 01:49:02,405
I should say queue because there is not a queue of a first in, first

1483
01:49:02,705 --> 01:49:06,445
out, but how this group of large load request has really

1484
01:49:06,725 --> 01:49:10,665
grown over time. As you can see on this slide, we

1485
01:49:10,885 --> 01:49:14,595
are tracking over 226 gigawatts of large load

1486
01:49:14,965 --> 01:49:18,945
requests as of november 18th. But

1487
01:49:19,165 --> 01:49:22,645
to show you how quickly things are changing, I asked the team on friday,

1488
01:49:23,465 --> 01:49:25,795
so what have we seen in the, in the next several days

1489
01:49:28,385 --> 01:49:32,115
as of this past friday, that number is now up to 233 gigawatts.

1490
01:49:33,945 --> 01:49:37,745
so we continue week after week to see more interest in

1491
01:49:37,965 --> 01:49:41,825
connecting to the ercot grid. Over 75 or

1492
01:49:42,045 --> 01:49:45,995
70% of those requests are data center request

1493
01:49:46,705 --> 01:49:50,445
across the system. And recognizing,

1494
01:49:51,225 --> 01:49:55,165
um, you know, we, we hear the developers loud and clear

1495
01:49:55,505 --> 01:49:59,325
the need for certainty, and we agree there's need for certainty, and we also

1496
01:49:59,845 --> 01:50:03,725
recognize there's need for improvements to the process. If you look at what's

1497
01:50:04,325 --> 01:50:07,345
happened just since the beginning of this year, so when we met

1498
01:50:08,355 --> 01:50:11,765
last year at this time, we were tracking about 83,000

1499
01:50:12,955 --> 01:50:16,805
megawatts worth of requests over the course of 2025.

1500
01:50:17,705 --> 01:50:20,765
that's grown. Now, as I just stated, we're up to 233

1501
01:50:22,035 --> 01:50:26,005
gigawatts. That's almost a 300% increase

1502
01:50:26,785 --> 01:50:30,125
in the amount of megawatts that are wanting to connect to the ercot system.

1503
01:50:33,265 --> 01:50:36,925
we have outgrown the process that was established for reviewing these large

1504
01:50:37,335 --> 01:50:40,625
loads. It was originally set up for,

1505
01:50:41,545 --> 01:50:45,485
we were thinking about 40 to 50 loads back in the

1506
01:50:45,605 --> 01:50:48,545
2022 timeframe. And as you can see now,

1507
01:50:50,055 --> 01:50:52,585
we're tracking, just this year we received 225

1508
01:50:54,225 --> 01:50:57,445
new requests. So this,

1509
01:50:58,465 --> 01:51:02,245
the amount of loads in how we study them, we can no longer be looking

1510
01:51:02,505 --> 01:51:06,325
at them individually because we have to look at their impact to each other as well.

1511
01:51:07,345 --> 01:51:10,965
um, again, on this one, these stats were pulled on november 18th,

1512
01:51:12,705 --> 01:51:16,535
as of last friday, we had had an additional five new requests come in in that short

1513
01:51:16,885 --> 01:51:20,325
period of time over the thanksgiving holiday and last week.

1514
01:51:23,045 --> 01:51:27,025
I guess one thing I would note, um, when you look at the request on

1515
01:51:27,245 --> 01:51:31,075
the large load slide and the amount of megawatts, you know, over 200 gigawatts

1516
01:51:31,685 --> 01:51:35,595
of request, we recognize the importance of working with

1517
01:51:35,905 --> 01:51:38,905
the commission to implement the sb six

1518
01:51:40,045 --> 01:51:43,735
statutes that were put forward to be able to get better information about

1519
01:51:44,085 --> 01:51:47,445
the certainty of which of those loads move forwards. Just like the large

1520
01:51:48,335 --> 01:51:51,505
generation interconnection queue that we'll see in a couple slides,

1521
01:51:52,785 --> 01:51:56,445
we don't expect that all of those will materialized. So again, it's very important to

1522
01:51:56,925 --> 01:52:00,865
get those low forecasting and standardization rules in

1523
01:52:01,085 --> 01:52:04,805
place so that we have better information as we're studying and making recommendations

1524
01:52:05,745 --> 01:52:06,445
on how to move forward.

1525
01:52:11,675 --> 01:52:14,975
here's the slide that I was looking for, 2000 generation requests,

1526
01:52:16,315 --> 01:52:20,255
and this was as of october. And again, those things are changing as well. I had the

1527
01:52:20,375 --> 01:52:24,135
team take a look at what we had as the end of november, and we've

1528
01:52:24,615 --> 01:52:28,455
actually gotten additional, uh, megawatts in from those requests as

1529
01:52:28,655 --> 01:52:32,575
well. Tracking over 432 gigawatts. That's now up to 435.

1530
01:52:34,835 --> 01:52:38,775
but what I would say is the most notable, you know, we've seen the trend

1531
01:52:39,465 --> 01:52:43,415
month after month that the majority well over, almost 80%

1532
01:52:44,195 --> 01:52:48,105
is coming from solar and battery energy storage request. We

1533
01:52:48,325 --> 01:52:52,145
are still, we're starting to see an uptick in the natural gas, uh,

1534
01:52:52,395 --> 01:52:56,245
request as well. When we were here in december of last year,

1535
01:52:56,945 --> 01:53:00,565
we were tracking 26 gigawatts of gas as of november 30th,

1536
01:53:01,555 --> 01:53:04,195
that number is now up to almost 53 gigawatts.

1537
01:53:09,025 --> 01:53:12,865
always like to keep you updated on how the texas energy fund projects are

1538
01:53:13,085 --> 01:53:17,045
moving through the process of those seven gigawatts or 18

1539
01:53:17,205 --> 01:53:20,085
projects that are moving forward. We actually had our first project

1540
01:53:21,225 --> 01:53:25,165
pen peaking, um, receive its part one approval to energize. So

1541
01:53:25,365 --> 01:53:29,275
it's actually connected to the system going through testing and enabled

1542
01:53:29,865 --> 01:53:31,945
to, um, to produce energy.

1543
01:53:36,385 --> 01:53:39,755
just another snapshot of looking at how the generation is materialized

1544
01:53:40,615 --> 01:53:44,255
in 20 24, 25 in 2025. Across

1545
01:53:44,675 --> 01:53:48,595
those years, we saw about 23 gigawatts of generation resources synchronized

1546
01:53:48,915 --> 01:53:52,905
to the grid. Um, but you can tell the majority of those are coming from

1547
01:53:53,205 --> 01:53:57,125
these blue lines, battery energy storage or the green lines, which

1548
01:53:57,575 --> 01:54:01,195
are solar. As we look ahead, those resources

1549
01:54:01,595 --> 01:54:05,595
that have already gone through our qualification process and are planning to energize,

1550
01:54:06,695 --> 01:54:10,555
uh, q1 of next year, we're looking at almost another 10 gigawatts coming

1551
01:54:10,735 --> 01:54:14,565
to the system. Again, those are mainly comprised of solar

1552
01:54:15,135 --> 01:54:16,275
and battery energy storage.

1553
01:54:19,745 --> 01:54:23,695
from a transmission planning perspective, um, the team has been really

1554
01:54:24,115 --> 01:54:27,995
busy. So not only looking at ways that we can improve the planning

1555
01:54:28,305 --> 01:54:31,715
processes, looking at, um, the potential, uh, implementation

1556
01:54:32,555 --> 01:54:36,415
of 7 65, but just the sheer volume of projects. In

1557
01:54:36,715 --> 01:54:40,615
fact, in 2025 alone, um, we've more than doubled the amount of

1558
01:54:40,915 --> 01:54:44,615
projects that the team has reviewed and brought forward to you. Um,

1559
01:54:45,105 --> 01:54:48,545
this year we got in study or have already brought forward

1560
01:54:49,285 --> 01:54:53,075
48 various projects last year. That number was 22.

1561
01:54:55,355 --> 01:54:59,305
I think that trend will continue, uh, as we start to look at receiving

1562
01:54:59,915 --> 01:55:02,955
projects from the utilities to implement both our 2024

1563
01:55:03,955 --> 01:55:06,515
rtp and 2025 rtp roadmaps

1564
01:55:09,235 --> 01:55:13,155
from a resource adequacy reporting perspective. Um, the graphic in the middle just

1565
01:55:13,645 --> 01:55:17,445
gives you a quick snapshot of our monthly outlook on resource adequacy

1566
01:55:18,305 --> 01:55:22,285
at the time we put these slides together. Both december and januarys were available

1567
01:55:23,155 --> 01:55:27,065
this past friday. We also published the february more and we see

1568
01:55:27,325 --> 01:55:31,005
a consistent trend, um, this year compared to last year,

1569
01:55:32,215 --> 01:55:36,065
lower chances of going into emergency operations or

1570
01:55:36,285 --> 01:55:39,565
even load shed given our probabilistic analysis.

1571
01:55:40,345 --> 01:55:44,125
and the main reasons for that is, you know, you think back to the previous slides, the amount

1572
01:55:44,365 --> 01:55:48,305
of generation that has been added to the system since then, um, is

1573
01:55:48,525 --> 01:55:52,355
playing a key factor. One other note,

1574
01:55:52,825 --> 01:55:56,205
uh, wanted to or two other notes from the resource adequacy reporting perspective,

1575
01:55:57,315 --> 01:56:00,925
each may in december, we come out with our capacity, demand and reserve

1576
01:56:01,505 --> 01:56:05,345
report. This is really, um, a log of all of the

1577
01:56:05,775 --> 01:56:09,755
generation that has met certain requirements for coming onto the system into

1578
01:56:10,045 --> 01:56:13,725
the future years, as well as our forecasted demand that we

1579
01:56:14,165 --> 01:56:17,555
received from input from the utilities. And that release is planned

1580
01:56:18,225 --> 01:56:20,965
for the third week of december. Per protocol requirements

1581
01:56:22,345 --> 01:56:25,805
did wanna highlight, we will be pushing out a market notice to make all participants

1582
01:56:26,495 --> 01:56:30,285
aware, but one thing we're doing differently this year is we're actually going

1583
01:56:30,585 --> 01:56:34,325
to have a draft version of the capacity, demand and reserve report

1584
01:56:34,955 --> 01:56:38,715
available to the supply analysis working group page.

1585
01:56:39,185 --> 01:56:42,985
so it, it will be available to anyone, um, that would like to review it as

1586
01:56:43,245 --> 01:56:46,965
a draft form. Um, as we found, um, getting input from the stakeholders

1587
01:56:47,405 --> 01:56:51,385
throughout the process has been beneficial and making sure that final report

1588
01:56:51,805 --> 01:56:55,705
that we put out, um, is meeting, um,

1589
01:56:56,185 --> 01:57:00,125
our requirements. We will have our protocol required

1590
01:57:00,285 --> 01:57:04,275
requirements, and then we've also added in some additional scenarios that look

1591
01:57:04,665 --> 01:57:08,275
at the impacts of our assumptions

1592
01:57:09,335 --> 01:57:12,845
based off of the senate bill six large load curtailment and the

1593
01:57:13,415 --> 01:57:16,815
texas energy fund assumptions. So for example, generation

1594
01:57:17,485 --> 01:57:21,365
that is in the texas energy fund hadn't met the protocol requirement for

1595
01:57:21,565 --> 01:57:25,245
being included in our ledger of generation that's available. Those are some

1596
01:57:25,605 --> 01:57:29,205
scenarios that we'll look at as a part of that report just to give people different perspectives,

1597
01:57:30,185 --> 01:57:34,175
um, on different scenarios that could play out. Pablo

1598
01:57:34,595 --> 01:57:38,535
also mentioned the reliability standard analysis. So we've

1599
01:57:38,885 --> 01:57:42,865
been working with commission staff, uh, as well as our

1600
01:57:43,215 --> 01:57:46,765
staff to prepare for next year's work that will be undertaken

1601
01:57:47,325 --> 01:57:51,205
as the first reliability standard assessment for puc rules.

1602
01:57:52,305 --> 01:57:56,245
uh, earlier this month, uh, we filed in in coordination

1603
01:57:56,885 --> 01:58:00,035
with the, from input from the tsps, um, information

1604
01:58:01,105 --> 01:58:04,645
as to the magnitude. So if you think about the reliability

1605
01:58:05,405 --> 01:58:09,005
standard has three legs, it's frequency, magnitude, and duration.

1606
01:58:10,025 --> 01:58:13,525
and the reason for the magnitude piece is we recognize

1607
01:58:15,405 --> 01:58:18,915
from lessons learned from winter storm uri, the utilities can only safely

1608
01:58:19,675 --> 01:58:23,015
rotate through a set amount of megawatts on their system

1609
01:58:24,345 --> 01:58:28,155
until they get to a point where they can no longer rotate through customers. So

1610
01:58:28,375 --> 01:58:32,375
we take input from the tsps on their capabilities, compile that

1611
01:58:32,535 --> 01:58:36,455
information, and we've provided that to the commission, which will be one of the

1612
01:58:36,635 --> 01:58:39,015
inputs going into next year's reliability assessment.

1613
01:58:41,135 --> 01:58:44,775
we're also working on what our assumptions will be for our model

1614
01:58:45,515 --> 01:58:49,485
that we'll run next year for the assessment. We'll be filing those with the

1615
01:58:49,645 --> 01:58:53,165
commission in mid-january. It will open up an opportunity for stakeholder

1616
01:58:53,685 --> 01:58:57,125
comment on the assumptions that will go in, and then

1617
01:58:57,735 --> 01:59:01,545
based off of commission decision, that'll be finalized. And

1618
01:59:01,765 --> 01:59:05,725
then we'll run throughout the summer, be running our model analysis and we'll keep you updated

1619
01:59:06,105 --> 01:59:08,125
on that as we move through next year.

1620
01:59:10,385 --> 01:59:14,345
weatherization perspective, you know, this group was

1621
01:59:14,565 --> 01:59:15,865
established in 2021

1622
01:59:19,105 --> 01:59:22,085
we have going into, um, this winter season.

1623
01:59:23,905 --> 01:59:27,645
and you can see the trend is we've been doing more and more resources

1624
01:59:28,505 --> 01:59:32,265
and more transmission facilities over time. That's

1625
01:59:32,685 --> 01:59:36,645
as we've added additional staff, but more importantly because there are

1626
01:59:36,805 --> 01:59:40,765
more resources and more transmission elements on the system. So in advance

1627
01:59:41,085 --> 01:59:45,045
of winter to help, uh, work with stakeholders, we really tried to make this,

1628
01:59:45,345 --> 01:59:48,825
uh, a collaborative program where we

1629
01:59:49,585 --> 01:59:53,355
are providing input, sharing best practices. So we've had workshops with,

1630
01:59:54,105 --> 01:59:57,765
uh, the utilities, with the resources. Um, we've held additional,

1631
01:59:58,705 --> 02:00:02,645
um, sessions for those new resources coming to the system to help

1632
02:00:02,805 --> 02:00:06,725
them prepare their documentation and answer their

1633
02:00:07,165 --> 02:00:10,965
questions about the, the rule and preparations. We started our weatherization

1634
02:00:11,605 --> 02:00:15,365
and inspections last week, um, and we've completed

1635
02:00:16,485 --> 02:00:20,335
13 transmission and 21 resource inspections. Uh, we've

1636
02:00:20,685 --> 02:00:24,685
got a target of doing at least 430, uh, throughout the

1637
02:00:24,805 --> 02:00:28,685
winter season. And we really use a risk-based approach on how we choose

1638
02:00:29,175 --> 02:00:33,165
which, uh, resources and utility, uh, equipment that we go

1639
02:00:33,365 --> 02:00:36,805
in and research. So for example, um, from a resource perspective,

1640
02:00:37,735 --> 02:00:41,605
we're looking, there's a rule requirement that we must see 'em at least once every three years.

1641
02:00:42,345 --> 02:00:45,925
so have we seen them yet in that three year period? Have we seen them in a weather,

1642
02:00:46,585 --> 02:00:50,465
um, season? Have they had previous issues and

1643
02:00:50,685 --> 02:00:54,415
we need to go back to make sure they have corrected, um, and cured those, those

1644
02:00:54,765 --> 02:00:58,765
problems. And then most importantly, newly commissioned resources,

1645
02:00:59,545 --> 02:01:01,965
making sure they understand the rules and are prepared

1646
02:01:04,465 --> 02:01:08,085
in the off seasons. Um, one thing I did want to highlight, one of the things that the weatherization

1647
02:01:08,725 --> 02:01:12,245
inspection team does, because they are um, across the state,

1648
02:01:13,025 --> 02:01:16,665
is we are able to utilize them to go out and inspect the,

1649
02:01:17,145 --> 02:01:21,045
the facilities, um, that have been awarded the firm fuel supply service

1650
02:01:21,865 --> 02:01:25,745
to make sure, um, they are prepared as well for going into the, the

1651
02:01:25,965 --> 02:01:29,165
winter season in case that service has to be called upon

1652
02:01:32,435 --> 02:01:35,925
noer 2 45. Um, so this is based on inverter

1653
02:01:36,485 --> 02:01:40,475
based resources and requirements that they meet, uh, voltage ride

1654
02:01:40,765 --> 02:01:44,425
through requirements. We continue going through the

1655
02:01:45,405 --> 02:01:49,245
analysis of the information that we received from the resources

1656
02:01:49,995 --> 02:01:53,825
back in september. We are looking at

1657
02:01:54,335 --> 02:01:58,085
their three categories of request. They can request

1658
02:01:58,665 --> 02:02:02,445
an extension so they believe they can meet the requirements,

1659
02:02:03,185 --> 02:02:06,845
but they need additional time maybe to work and make changes in the field.

1660
02:02:07,935 --> 02:02:11,805
there are entities that are requesting an exemption. They do not feel that they

1661
02:02:12,065 --> 02:02:16,045
can meet those and um, there's no changes. Maybe they're an

1662
02:02:16,165 --> 02:02:20,165
older type turbine, for example, and they can't make changes to their configurations

1663
02:02:20,745 --> 02:02:24,445
to be able to meet the ride through requirements. And then we have some

1664
02:02:24,925 --> 02:02:28,805
entities that have requested both because they're still maybe working with their vendors

1665
02:02:29,465 --> 02:02:33,065
and they don't know whether they can make it. They think maybe they can,

1666
02:02:33,785 --> 02:02:37,435
but then they might not be able to. So they've requested both to be on the safe side.

1667
02:02:38,695 --> 02:02:42,075
we're right now prioritizing our review of the extension request.

1668
02:02:43,345 --> 02:02:47,185
um, and updated stat, this says 130, but

1669
02:02:47,585 --> 02:02:51,505
out of as of um, earlier, uh,

1670
02:02:51,725 --> 02:02:55,565
this or late last week as of friday, we'd sent out

1671
02:02:55,845 --> 02:02:59,805
141 notices of missing information to resources.

1672
02:03:00,225 --> 02:03:04,085
so looking at those extension requests, we found that additional information

1673
02:03:04,705 --> 02:03:06,715
is needed or wasn't provided correctly

1674
02:03:11,485 --> 02:03:15,375
from an exemptions perspective. Um, a key part

1675
02:03:15,655 --> 02:03:19,165
of that is providing models to show

1676
02:03:19,885 --> 02:03:23,135
what their, their capabilities are so that we can review that.

1677
02:03:23,955 --> 02:03:27,855
um, there are 72 resources that were seeking an exemption that

1678
02:03:28,055 --> 02:03:32,015
still have not provided their models, which were to have already

1679
02:03:32,255 --> 02:03:35,815
been provided to us. So we continue to try to obtain those

1680
02:03:36,645 --> 02:03:40,575
from the resource entities to be able to run the reliability

1681
02:03:41,175 --> 02:03:45,015
assessment next year. It's important that we have good dynamic

1682
02:03:45,425 --> 02:03:49,245
model information, so when we run

1683
02:03:49,885 --> 02:03:53,345
to see whether or not we can grant an exemption, we need to know

1684
02:03:54,165 --> 02:03:57,545
what's currently on the system and how it's gonna interact and whether

1685
02:03:58,245 --> 02:04:02,105
we can take, um, except it's a minimal level of risk

1686
02:04:02,805 --> 02:04:04,785
for that particular entity that's asking for an exemption.

1687
02:04:07,285 --> 02:04:11,055
as of the time of pulling these slides, we had over 400 resources that

1688
02:04:11,345 --> 02:04:15,225
still had not provided their updated models to their capabilities.

1689
02:04:16,845 --> 02:04:20,465
and so this, once we receive those models, we have to go through a model quality

1690
02:04:21,015 --> 02:04:24,465
test. It requires, you know, additional review by ercot.

1691
02:04:25,645 --> 02:04:29,625
so it's very important that we get that information from the

1692
02:04:29,985 --> 02:04:33,425
resources to be able to then do the reliability

1693
02:04:34,105 --> 02:04:38,005
assessment next year. So, christie,

1694
02:04:38,165 --> 02:04:42,145
what's their obligation to provide it? I mean, is that a mandatory obligation or

1695
02:04:42,365 --> 02:04:45,855
voluntary obligation? It's a mandatory, um, obligation

1696
02:04:47,185 --> 02:04:51,045
via the nodal operating guide rules that were passed and approved by the

1697
02:04:51,285 --> 02:04:55,145
puc and what are the consequences that they don't by

1698
02:04:55,365 --> 02:04:59,245
a certain date. So if they don't, this would be something then we could turn

1699
02:04:59,525 --> 02:05:03,085
over to, um, our erm that would review

1700
02:05:03,625 --> 02:05:07,225
for, you know, non-compliance with the protocols and guides

1701
02:05:07,705 --> 02:05:11,205
and then turn that over to the commission for enforcement. That's a substantial

1702
02:05:11,845 --> 02:05:14,185
portion that you're still waiting for. Yes.

1703
02:05:16,725 --> 02:05:20,565
I just wanna follow up. Did you wanna say something? Go ahead. Okay. I just wanted

1704
02:05:20,765 --> 02:05:24,725
to follow up on that line of questioning. Christie. I know we've made a little bit

1705
02:05:24,885 --> 02:05:28,405
of progress in this area, but it is quite frustrating,

1706
02:05:29,325 --> 02:05:33,325
a lack of responsiveness, especially given how long it took us

1707
02:05:33,625 --> 02:05:37,265
to get this passed in the first place. And, uh,

1708
02:05:39,035 --> 02:05:42,845
when you come back and report on this the next time,

1709
02:05:43,085 --> 02:05:46,645
if we're not not making significant progress, I think we need to have a more

1710
02:05:47,325 --> 02:05:51,205
fulsome discussion about what our options are. And maybe the commission needs

1711
02:05:51,405 --> 02:05:54,215
to be thinking about that too, because it's a serious issue.

1712
02:05:55,895 --> 02:05:59,545
thank you. Well, can I add onto that, uh, what's

1713
02:06:00,055 --> 02:06:03,805
tax's role once they pass something to help encourage

1714
02:06:04,815 --> 02:06:08,755
compliance to a new role? Should we ask tax to also

1715
02:06:09,795 --> 02:06:10,605
address this matter?

1716
02:06:14,445 --> 02:06:18,285
I mean, tech leadership is listening. They can, um, I, I don't

1717
02:06:18,485 --> 02:06:22,485
think there's a lot of value on what tech can do. You're talking about individual companies now that have

1718
02:06:22,805 --> 02:06:26,805
a compliance obligation on the roles and that we've interacted with for quite

1719
02:06:27,155 --> 02:06:30,805
some time. So I think we have the ball as we're

1720
02:06:31,405 --> 02:06:35,005
managing to understand where we're going with the reliability assessments.

1721
02:06:35,785 --> 02:06:39,745
as christie indicated, there are mechanisms to move this over to the

1722
02:06:39,965 --> 02:06:43,805
enforcement side. And so we're kind of balancing out all that as we look at a tremendous

1723
02:06:44,325 --> 02:06:48,075
amount of data that still has quality issues associated it with

1724
02:06:48,365 --> 02:06:52,185
it, and a lack of models that have come in. So

1725
02:06:52,465 --> 02:06:56,465
we will continue to manage it with, as pablo has indicated, and christie's indicated at

1726
02:06:56,685 --> 02:07:00,485
some point, we will move forward and do the reliability assessments based upon the information we have.

1727
02:07:00,745 --> 02:07:04,285
and those outcomes will, will, we'll move forward with either granting

1728
02:07:05,185 --> 02:07:08,645
or not a, granting the exemptions or the extensions.

1729
02:07:09,505 --> 02:07:13,475
and, and then from there, it it is a compliance regulatory process that

1730
02:07:13,765 --> 02:07:17,665
falls within the commission to ultimately handle at the end of the day. And

1731
02:07:18,445 --> 02:07:21,795
I think what might be needed, chad, at some point, is a plain english

1732
02:07:23,325 --> 02:07:26,765
language communication to all the affected parties,

1733
02:07:27,555 --> 02:07:31,165
reminding them of their obligations and the consequences of not fulfilling

1734
02:07:31,765 --> 02:07:34,445
them. Those communications have happened

1735
02:07:36,105 --> 02:07:38,055
in plain english or in lawyers speak.

1736
02:07:40,415 --> 02:07:43,355
plain english. Okay. Not, not misunderstood.

1737
02:07:44,955 --> 02:07:48,905
yeah. Things that engineers can understand. This is what happens if

1738
02:07:49,125 --> 02:07:53,065
you don't do it. Uh, to go back to julie's, uh,

1739
02:07:53,285 --> 02:07:57,205
comment, I don't know that we wanna put tac in an enforcement position. That's not really their role.

1740
02:07:57,835 --> 02:08:01,675
well, and I think they'd be uncomfortable with that. Let me, let me give a little background. This

1741
02:08:01,965 --> 02:08:05,765
is a member organization, uh, wasn't asking so much

1742
02:08:06,145 --> 02:08:10,085
tax enforcement so much as what are they seeing

1743
02:08:10,365 --> 02:08:14,165
causing resistance and delays in the membership that agreed to do this?

1744
02:08:15,635 --> 02:08:19,495
yeah. Feedback. Yeah, I think would always welcome their feedback. Chair

1745
02:08:19,845 --> 02:08:23,725
gleason. Yeah. Mr. Chairman, since um, compliance and enforcement got brought up,

1746
02:08:23,885 --> 02:08:27,525
maybe I'd ask our deputy executive director barksdale english to speak to

1747
02:08:28,275 --> 02:08:32,265
staff's role in enforcing, uh, these provisions. Thanks,

1748
02:08:32,885 --> 02:08:36,825
chairman. Um, so as chad mentioned, the, um, the

1749
02:08:37,205 --> 02:08:40,925
erm process, uh, is, is gonna be ercot

1750
02:08:41,235 --> 02:08:44,995
staff's primary way for referring any outstanding

1751
02:08:45,745 --> 02:08:49,725
issues to the commission to seek enforcement over. Um, my staff

1752
02:08:49,925 --> 02:08:53,905
works very closely with the, the reliability monitor here. And,

1753
02:08:54,345 --> 02:08:57,835
um, we are constantly juggling the myriad issues that,

1754
02:08:58,385 --> 02:09:02,205
um, that face the stakeholders here and trying to prioritize

1755
02:09:02,765 --> 02:09:06,445
which, um, which efforts need to be, um, escalated

1756
02:09:07,145 --> 02:09:11,105
and move forward more quickly. Um, this is certainly a, an

1757
02:09:11,325 --> 02:09:15,235
important one. Um, and we also wanna recognize that

1758
02:09:15,705 --> 02:09:19,055
the exemption process that christie was talking about is, is novel,

1759
02:09:19,905 --> 02:09:23,685
uh, for this market. And so I think, uh, in my opinion, ercot

1760
02:09:23,925 --> 02:09:27,865
staff is doing a good job of trying to provide a little bit of grace to allow the member companies to

1761
02:09:28,225 --> 02:09:32,025
figure out how to get through that process. Um, but

1762
02:09:32,405 --> 02:09:36,365
I would agree with the members', uh, concerns here that at a

1763
02:09:36,485 --> 02:09:40,445
certain point we need to, you know, call time and, and start moving forward

1764
02:09:40,725 --> 02:09:44,605
with something more serious and in an enforcement investigation. Uh, and

1765
02:09:44,805 --> 02:09:48,685
just so the members are aware, uh, failure to comply with ercot

1766
02:09:49,245 --> 02:09:52,565
protocols, uh, could result in a daily fine of up to $25,000

1767
02:09:53,945 --> 02:09:57,865
per violation or potentially being kicked off

1768
02:09:58,305 --> 02:10:02,285
the, the grid. That could be a resulting action as well, sir?

1769
02:10:02,585 --> 02:10:06,005
yes. Okay. Uh, so those 416

1770
02:10:07,485 --> 02:10:11,325
noncompliant members need to get their information in 130 that have missing

1771
02:10:11,565 --> 02:10:15,485
information, need to get that in. So for those that are listing in kristy, keep going.

1772
02:10:17,755 --> 02:10:21,045
that completes my update. Any questions? Okay. Any questions?

1773
02:10:22,185 --> 02:10:25,765
all right, very good. Uh, if there are no other

1774
02:10:26,285 --> 02:10:29,725
questions for christie, uh, we'll move to agenda item 17,

1775
02:10:30,415 --> 02:10:34,415
other business. Is there any other business that any other board member would like to raise?

1776
02:10:36,275 --> 02:10:40,225
hearing none, the board will recess and convene an executive session. Follow the

1777
02:10:40,445 --> 02:10:44,085
executive session. We anticipate several voting items, so general session

1778
02:10:44,515 --> 02:10:48,245
will reconvene at the conclusion of the executive session. The general session

1779
02:10:48,525 --> 02:10:52,205
of ercot board of directors meeting is now recessed and the webcast will be suspended.

1780
02:10:52,645 --> 02:10:56,645
chair gleason. Thank you. Thank you mr. Chairman. This meeting,

1781
02:10:56,805 --> 02:10:58,885
the public utility commission of texas will stand in recess.

1782
02:11:03,925 --> 02:11:07,895
okay. Good afternoon. I'm bill flores ercot, board chair. I hereby reconvene this meeting

1783
02:11:08,035 --> 02:11:12,015
of ercot board of directors. I've confirmed that a quorum is present in person.

1784
02:11:12,525 --> 02:11:15,565
this meeting is being webcast live to the public on our cop's website.

1785
02:11:16,875 --> 02:11:20,695
uh, we have three voting items, uh, carried over from

1786
02:11:20,935 --> 02:11:24,815
executive session, uh, for, uh, this is agenda item

1787
02:11:25,415 --> 02:11:29,295
18. Uh, first I'm gonna entertain a motion for board approval of the two

1788
02:11:29,575 --> 02:11:33,175
personnel matters discussed during executive session. Under agenda items

1789
02:11:34,335 --> 02:11:37,415
es 2.4 and two point.

1790
02:11:41,035 --> 02:11:44,575
so moved. Uh, thank you, peggy. Is there a second? Second.

1791
02:11:45,225 --> 02:11:48,575
okay. Second for chris. Thank you. All in favor a. Aye.

1792
02:11:49,375 --> 02:11:53,355
any opposed? Any abstentions? The personnel matters are approved

1793
02:11:53,815 --> 02:11:57,635
as, uh, as presented. Next, I'll entertain

1794
02:11:57,995 --> 02:12:01,955
a motion for board approval of the contract matter discussed during executive session under

1795
02:12:02,275 --> 02:12:04,045
agenda item es 2.7 0.1.

1796
02:12:07,305 --> 02:12:11,095
john, thank you. Second, julie. All in favor? Aye. Aye.

1797
02:12:11,455 --> 02:12:15,315
aye. Any opposed? Any abstentions? The contract matter has been

1798
02:12:15,795 --> 02:12:19,035
approved. And then lastly, I'll entertain, I'll make the motion,

1799
02:12:19,935 --> 02:12:23,195
uh, to approve the selection of weaver and tidball lp as a 2026

1800
02:12:23,985 --> 02:12:27,075
independent system and organization control auditor

1801
02:12:28,055 --> 02:12:30,415
for the soc audit for 2025. 2026.

1802
02:12:32,455 --> 02:12:35,235
second. Thank you, peggy. All in favor?

1803
02:12:36,495 --> 02:12:40,275
aye. Any opposed? Any abstentions that has been approved? Thank you.

1804
02:12:40,775 --> 02:12:44,755
the meeting of the ercot board of directors is now adjourned and the webcast will be concluded.