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House State Affairs met on December 5 to hear invited and public testimony concerning updates on the proposed changes to the ERCOT market design. A video archive of the hearing can be found here.

 

This report is intended to give you an overview and highlight of the various topics taken up. It is not a verbatim transcript of the discussions but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

Item 2: Update on the proposed changes to the ERCOT market design

Panel 1

Peter Lake, PUC

  • Update on implementation of SB 3; Phase II of market design working with E3; performance credit mechanism is early favorite of commissioners; misinformation about analysis
  • False that analysis didn’t include extreme weather conditions; included both extreme heat and cold, didn’t include outages due to Uri because of reforms
  • Loss of 11,000 MW may be more or less, losing dispatchable reliable MW now and a threat
  • Would deliver a 10X improvement in reliability for a fractional increase in cost; need this change; also have blue sky problem and less dispatchable generation with more people and businesses
  • Analysis for PCM uses test year of 2026, would have more wind and solar and less dispatchable power; 11,000 MW driven by more wind and solar being on the grid; harder for dispatchable to stay in service because not online all the time
  • If don’t implement can expect 1.25 days of blackouts each year; .1 days would be implemented with these designs for improvement in reliability; 10X improvement in reliability can be delivered at the same price we expect to pay to ERCOT without changes
  • Have crisis-based business model now, need more reform, $22 B average but volatile system means some years can be $60-70 B; reduce number of days price does up by making the grid more reliable and eliminate crisis scarcity pricing
  • Limiting payment of performance to dispatchable services can reduce cost; anyone who sells power to a house or business would be required to guarantee they are buying equivalent power from a reliable source and would be required to ensure they can deliver energy
  • ERCOT would set up an exchange to trade credits between generators and companies that provide power; generators would have to commit that they will be available when grid needs them most; reliability credits would have to be earned
  • Would keep day ahead and real time market but need to move supply and demand away from physical requirement to go to crisis before pricing goes up
  • Report calls for annual 30 hours a year, but PUC would prefer a more precise timeline something like 4 hours each month
  • To avoid forecasting error, PCM looks at only what was actually used; generators will be held accountable for if they are online and available; have to buy credits equivalent to tightest four hours
  • Asking public and marketplace for feedback; PCM would deliver reliability we need at lower price possible
  • Hunter- PUC supporting PCM? And you?
    • Three of us including me are offering support but need to hear more from market participants and public
  • Hunter- Does plan guarantee new generation?
    • Yes
  • Hunter- Asks what reliability means; 2026 is the farthest start date?
    • Should expect lights go out maybe once a decade; don’t have a reliability standard today but this would set a standard; as soon as possible will start
  • Hunter- House can rely on executive summary and report?
    • Pending market feedback and public comment PCM is right way to go
  • Hunter- How soon can plan be fully implemented?
    • Pablo best can answer; consultants estimated 3-4 years based on our old way of doing things; with new CEO and independent board can do a lot quicker than that
  • Hunter- How soon can we seen generation?
    • Depends on regulatory certainty; hope we could adopt specific version and offer to legislature
  • Hunter- January 12th will be PUC meeting; is PUC going to act?
    • Plan on it
  • Hunter- Taking action two days after we are sworn in?
    • Based on what we see as best offer based on SB 3; would be a resolution or identify which version we think is best one to ensure standard
  • Hunter- Will you meet and vote and the legislature has authority to change anything?
    • Will take vote and don’t plan on actual implementation other than identifying which is best and will come to you with guidance
  • Hunter- Is gas desk gone?
    • No, working with RRC to solve problems without gas deck and hope to be able to give clearer answers soon that gas desk is gone
  • Hunter- Report include demand for electric vehicles and batteries?
    • Based on ERCOTs current CDR; could be more
  • Hunter- Will be more than current CDR; should work on with consultants; make sure generators talk with house and senate committees; make sure public knows exactly what the cost is; and that public is aware of PUC plan
  • Shaheen- From a generation perspective looks like could help increase dispatchable generation; want to understand retail piece; can you walk us through performance credits and retail?
    • Expect some volatility in prices because it is a market-based solution; if have enough dispatchable supply then the prices would be low; if we don’t need this product then the PCM is no harm no foul and won’t cost consumers anything
    • No forward requirement as an option; each retailer can manage when and what price they want to buy those credits ats
    • Would provide retailers ability to match price they are offering customer in advance; reliable grid would reduce days that prices blow out which is benefit to retailers
  • Shaheen- What is the mechanism, should I look at as a future market?
    • Very similar, ERCOT would house exchange and set rules; goal is to set policy directions
  • Howard- Appears E3 is recommending the FRM and you are choosing PC; why is that the case?
    • Think PCM because instead of forward procurement requirement it’s a more market friendly product
  • Howard- But one of the reasons they don’t recommend it is because it is novel?
    • Yes, FRM and LSE are standard versions; PCM is the Texas version
  • Howard- Hard time getting my head around this; still have questions about this and lots of uncertainty
    • We have to provide the reliability and nothing is straightforward about any electric grid; homes and small businesses are the ones that lose power so companies that sell power to homes should be required to make sure that power is coming from a reliable source
  • Howard- Looking at making it seasonal rather than annually?
    • Yes
  • Howard- Rather than being performance based have heard that it is availability based; even if you don’t perform you would still get the credit when there is an ERCOT outage?
    • No, online and available is standard of performing; as opposed to capacity market, don’t have to do anything other than take money and sit on sidelines
  • Howard- What about including renewables for credits?
    • Whoever is online during tightest hours; trying to stay away from existing ERCOT market and not interfering with federal incentives for wind and solar; wouldn’t expect to have any negative impact on wind or solar
  • Howard- Credit for performing when needed?
    • Want to pay for performance for generators that are online and available when we really need it; designed to incentivize reliable and dispatchable power; want companies to compete to deliver and procure cheapest and most reliable energy
  • Howard- Not planning to operationalize until after legislature speaks on it? With urgency how do we make this work?
    • Look to you all on guidance for that
  • Howard- Uri not part of consideration because things have been fixed on outages; still have relationship with RRC and don’t have assurances that weatherization has occurred
    • Quite certain on weatherization of generators
  • Howard- Problem that we don’t have RRC and PUC talking together in front of u; said extremes of past 40 years included but outages of winter storm were not because they have been fixed from your end; question not including potential for something like that because it was all the things regarding supply not getting where it need that was the problem
  • Howard- Don’t know that what you are giving us today assures that situation won’t happen again
    • Can always get better, continuing to work with the RRC and included some degree of outages in study
  • Howard- Think PCM would give us assurance that outages we have would not be-
    • Reforms from last session solved outage problem; have blue sky problem as well where there is no wind or machinery breaks so need to have on demand reliable power in the back up
    • Ensures rate money doesn’t just go to whoever happens to show up; key part of PCM is that generators are required to commit in year in advance that they will be available when we need the most
  • Howard- Demand response could be used by companies as they are trying to figure out their risk and lower demand; feel like what you presented allows us to look at potential policies to bring in efficient energy?
    • PCM has demand response built in; getting to fewer MW would be left to private center
  • Smithee- Have you seen letter from 9 senators addressed to you and other commissioners and have you responded?
    • Have seen, going to continue process with Representative Hunter; won’t operationalize anything before getting guidance from house and senate
  • Smithee- How would you respond to criticism about dispatch of power?
    • Need reliability service and however we can do that is what we suggest; welcome guidance on best way to do that
  • Slawson- If renewables are not included does that disincentivize them from coming to Texas?
    • No
  • Patterson- How does a generator get online?
    • Done through ERCOT; make sure it can be brought online without harming reliability
  • Patterson- Power to determine if retailers are reliable or not?
    • Based on current design offer, whatever services are cheapest at the time; PUC asked ERCOT to prioritize dispatchable resources getting on grid before wind and solar
  • Patterson- Has ERCOT ever denied a generator being added to grid; why is energy market not working?
    • I’m sure but not that I know of; Not enough incentives for dispatchable reliable resources
  • Patterson- Why are renewables low cost in energy market?
    • Federal subsidies
  • Patterson- So this has forced other people out of the market?
    • Yes
  • Patterson- If federal govt. not involved in market would we have more dispatchable available?
    • Haven’t done analysis but most likely yes
  • Patterson- Would you start rulemaking after legislative session?
    • Welcome guidance at any point in time sooner is better
  • Patterson- How long would this take?
    • 18-24 months
  • Patterson- Not entering into ODRC as quickly or as much would be less risk on them?
    • Cost of more reliable less volatile market is because when ORDC prices go through the roof money is dumped on whoever is there
    • Profit they make would be redirected to only reliable generators who can promise in advance they can be there; tremendous cost reduction by not going into scarcity pricing
  • Patterson- How are you determining how many credits are available?
    • The marketplace; want generators to earn it not assign it; generators can offer in however many credits they are willing to earn and validate with operational and financial risk on that company
    • Removes forecasting risk and lets retailers match the credits they have to buy with timing and price of customer contracts in future
    • Want to make sure all credits are bought and sold on central ERCOT exchange to ensure market has integrity
  • Patterson- Reliability standard not effected by credits available?
    • Would still be a reserve that is driven by reliability standard and ensures a more reliable grid
  • Slawson- When modeling is talking about 30 hours is that contemplating an annualized look back?
    • That was their suggestion; think a much more precise period would be better and more efficient, monthly or season
  • Slawson- So 48 is considering 4 hours a month?
    • Don’t know who offered that; need to figure out in technical implementation; goal is to have commission adopt policy recommendation in January
  • Slawson- Not anticipating steel in ground until before late last year?
    • Driven by regulatory certainty so would welcome sooner rather than later
  • Howard- Can you explain the model?
    • Analysis and model doesn’t easily account externalities; smaller and smaller revenue remaining for dispatchable generators; model looks at how much revenue is remaining
    • By removing payments to renewables model reflects you would lose more renewables because it can’t account for federal subsidies
    • No fear that anything in the PCM would disrupt or obstruct any additional wind and solar; this version of technology neutral is based on consultants’ recommendation that whoever happens to be there during lowest reserve hours they would earn the credits
    • I think is unnecessary because we have real time market to offer incentives
    • Would incentivize new business models for batteries interacting with wind and solar

Pablo Vegas, ERCOT

  • Need to meet demand when renewable resources come in under forecast; ramps as renewables come up and down makes larger misses in anticipating load
  • Firm demand outpacing dispatchable energy in the state; dispatchable generation remaining stagnant; issues of thermal plants largely addressed with weatherization and firm fuel supply options; still see gap in more extreme scenarios in SARA Report
  • Need to incentivize development of generation with on off switch; driver of this design was to create efficient market that would lower cost and incentivize energy solutions
  • Investors mentioned that having certainty allows them to figure out what works; ERCOT committed to working with all stakeholders
  • Hunter- Has ERCOT reviewed PCM plan?
    • Yes
  • Hunter- Do you agree with PCM concept?
    • Yes, will drive towards reliability standard and address both issues I addressed
  • Hunter- New generation from the plan?
    • Yes
  • Hunter- What does reliability mean?
    • Has to be defined measure with standard that everyone understands and that ERCOT can then model; reliability margin needs to be able to adjust and grow with market
    • Need facilities that can respond during extreme events; reliability is a measurable and quantifiable standard
  • Hunter- Getting info that cost of PCM implemented is $480 M per year?
    • Number intended to be increased revenue that would come into energy market to incentivize dispatchable generation and total market would move up by that amount; not cost to develop ERCOT solutions
  • Hunter- Who pays that?
    • Passed onto customers
  • Hunter- Want you to get out to public what the cost would be; don’t want to see bills going out to the public with general terms like “delivery charge”
  • Hunter- Electric vehicles and lithium batteries demand will increase and need to make sure those variables are in planning process
  • Raymond- Utility rates matter; seems our number one should be reliability and sustainability; more people coming into state and more businesses
  • Raymond- Give us guidance on what we need to do legislatively about meeting demand; important that we educate public and ask for their input
  • Raymond- Need to inform public about how we compare with rest of country with rates; appreciate senate saying don’t do anything but I don’t get that; hope we pass something that can have an immediate effect
    • On cost side, it’s very important to understand the different ways that cost flows through the market; need to think about longer term view and energy innovation and technologies
  • Harless- Concern about need to make sure fuel supply for generation stays available when we need it
    • Implemented firm fuel supply product; evaluating next iteration of that and will require fuel to be onsite and with a firm transportation contract; continue to ensure reliability improves
  • Hernandez- Criticism has been accountability piece; sufficient penalties for non-performance?
    • Could be lack of revenue all the way to administrative penalties; can be worked through during technical design process
  • Hernandez- Constituents don’t want to hear its just loss of revenue when their power is off
  • Patterson- If they have to confirm firm power to cover load how does that work?
    • If they do in advance, would be looking at expected load during point they are purchasing for and have reserve margin of reliability to make sure they cover
    • Will be seller making commitment to provide them those generation credit points and would happen openly
    • Would look back and determine if seller performed and if they were then they would retain what they had sold; if not they would have to forgo and give revenue back and potentially administrative penalty; true up for credits too
  • Patterson- Optional to buy firm load in advance?
    • Yes, can take settlement post operating month too
  • Patterson- So if they hedge any load at all has to be in firm load?
    • Can hedge energy in real time, reliability margin components, etc.
  • Patterson- Who pays wind if that specific day is very windy?
    • Dispatch lowest cost energy and will continue to operate as it does today; PCM is exchange between those that can say in advance they can offer energy; wind would not be able to do that because they don’t have on off switch
  • Patterson- Paying extra for credits?
    • New revenue for generators able to offer energy during peak times
    • Reason cost is less is because generator seeking to earn PC must commit to operate and offer their units in; will have more dispatchable operating in real time market
  • Patterson- Do generators like or dislike rucking?
    • Dislike; We look ahead 12-18 hours and when we don’t have enough committed generators we have to make choice to have unit come online
    • Forcing them online in a situation where price would not incentivize them to do so; do to ensure reliability
  • Patterson- Wave rucked more plants in the last year more than any time in history; can be on scheduled maintenance and delay that
    • Try very hard to ensure maintenance cycles happen; nearly half generating plants are 30-50 years or older; asking older units to come online
  • Patterson- Believe report of 11,000 MW would not retire if this plan went through but would some retire anyway simply because of age of units and stress put on them?
    • Physical reality of units eventually outweighs impacts of economics

Carrie Bivens, Potamic Economics

  • Selected by PUC to act as wholesale market monitor; ERCOT adjusted operational posture and procurement of additional non-spin reserves has cost $800 M- 1 B
  • Data to support conclusion that commission has taken significant steps in redesign that hasn’t had time to rise; report overstates resource retirements and loss of load
  • Report shows that there is no planning reserve margin shortage, could be interpreted that need to retain half of retiring procedures and could continue with current model
  • Recommend adopting 2-4 hour uncertainty product to address operational changes; would be market based and produce market benefits
  • Hunter- Asks clarifying questions; asks if she agrees with PCM
    • We prefer PCM over backstop reserve service, need to still understand many details about PCM; has not made determination if she is for the PCM; will be commenting in commissions docket on December 15
  • Hunter- What is your biggest concern?
    • Need to meet difference between solar going down for the night and wind not picking up; can lead to gaps in timeframe; operational flexibility problem not a capacity problem
  • Hunter- Does PCM guarantee new generation?
    • Don’t think any proposal guarantees new generations; not possible to guarantee
    • Study showed energy market only number in 2026 wouldn’t produce .1 standard because of 11,000 megawatt of generation retirements; assumptions around retirements are highly sensitive to assumptions in study
  • Hunter – Asks for definition of reliability
    • How long to lose load over a decade (planning), in the immediate time do you have enough to meet load (operational), believes operational needs to be enhanced
  • Hunter – Wants to know how long before seeing regeneration and will plan work, market question
    • Market will continue to response to price signals, assumes she reports to legislature as well
  • Hunter – Between now and Jan 12, would like her to inform the committee on thoughts and progress or any changes
    • Recommends new operational product to meet operational needs, does not believe a new product is needed
  • Howard – Assumptions are important, ask to repeat early statements
  • Howard- Why are you saying there will be less retirements?
    • Can change overtime based on inputs; hour ahead uncertainty can increase the amount you can make and will provide market signals to add flexible generation
    • Study assumed static curve and didn’t take into account dynamic nature of that curve and will understate equilibrium
    • Suggesting current market can meet needs by adding 2-4 hour uncertainty product and can procure resources to turn on to meet uncertainty
  • Howard- Would give market-based approach to what rucking was trying to accomplish?
    • Yes
  • Howard- You are an independent monitor?
    • Yes, don’t represent generators or anyone with interest in this
  • Howard- Looking to get the best product and best price?
    • Looking at effectiveness and efficiency of market
  • Lake- Any model or forecast is a best approximation; also going to have new ancillary service that is designed to respond to when we lose solar quickly, already in process to address that
  • Lake- uncertainty product already done, expanded nonskin reserve we procure and put in place system to add 15 MW for uncertain weather
  • Lake- Still have days where we ask people to stop consuming power, nobody likes rucking expect for people who have been able to keep their lights on
  • Lake- 11,000 MW for analysis is from revenue and how many generators that can be supported, 3300 MW of bankruptcy this summer, 500 MW pulled out of operation last week
  • Lake- Difference between economic theory and real-world operations
  • Lake- Real world operations that can be accounted for; anything short of comprehensive reliability standard and service is just a band aid; deliberate in way PCM has been built out so that cost will be diminished because its base on supply and demand
  • Howard- Must look at economic models
  • Vegas- SARA Report says that this winter there are multiple scenarios that would have us without enough supply or very close; includes high load days where every emergency reserve service would have to be available; if something goes worse then it would be a load shed scenario without the assumed retirement of 11,000 MW
  • Vegas- Do think we have a capacity issue and need to do something to deal with this issue; Under 2,000 MW of thermal generation expected to come online in the next year; 9,000 MW of solar expected to come online in the next year
  • Vegas- Can’t lean on intermittent resources when not available
  • Patterson- You said capacity problem?
    • Vegas- When using everything available to respond during a winter storm a lot of resources didn’t show up during Uri, capacity issues potentially this summer
  • Patterson- Not realty a capacity issue; lots doesn’t work
    • Vegas- Effective load capacity is a better term

Panel 2

Katie Coleman, Texas Association of Manufacturers

  • System issues impact our facilities and reliability is number one goal; should be most reliability you can get at a reasonable cost
  • Concern at raising consumer cost without guaranteed reliability
  • New model of capacity market and these markets have not worked across the country
  • Capacity construct doesn’t guarantee new generation; all mechanisms simply increase consumer costs with hope that competitors will build new generation
  • Cost of capacity constructs is $5.7 B; costs some members millions of dollars a year
  • Not a capacity issue instead an operational issue; this problem needs to be solved
  • Asking customers to make fixed government determined payments; continue to voice concerns
  • E3 reports on pg. 7 that there is no capacity issue now and on pg. 46 states there is no capacity issue unless 11,000 MW pulled off
  • Risk that regulatory uncertainty will occur; afraid it does more harm than good; bankrupts mentioned are not issue with market design
  • Idea that we have a crisis-based model is untrue; instead prices rise and power becomes more scare, believe that this creates the best market incentives; most of market is not hedged forward; revenue exchanging hands behind the scenes
  • Gives explanation of how a market works; have serious concerns about implementing at this time
  • Construct that values supply creates incentives
  • Market helps balance supply and demand and why our design is successful
  • Prefer to move to IMS and have concern about implementing new capacity product

Tim Morstad, AARP

  • 147 Texans who died were 65 years and older; loss of power is devastating; Texans are shouldering considerable electricity cost burdens
  • PCM may cost consumers over $460M a year, no guarantee the generation will be built timely and, in a cost, effective manner
  • Recommends investing in energy efficiency, need to invest in buildings and this area
  • Energy efficiency may not be enough but should be considered
  • Urge committee to be sensitive to add additional cost on consumers, be aware of untested proposals, expand serac to include energy efficiency

Michele Richmond, Texas Competitive Power Advocates

  • Includes publicly traded and privately held companies among others; own 82% of natural gas capacity in ERCOT
  • Legislature made clear the market needed to change, appreciate direction from Legislature
  • Uncertainty is no longer acceptable in Texas
  • If proposal adopted by PUC has reasonable parameters and right framework committed to bringing online projects from 2024 through 2026 but tack on time as they wait for certainty
  • Investors need certainty, both regulatory and legislative
  • Fuel cost increasing to run plants, it is not sustainable
  • Elements of PCM that are not foreign, load ratio share, lookback and demand curve
  • Have capacity elements today (i.e. response service)
  • Industrial consumers making money at cost to residential consumers, wealth transfers going on now
  • Older generation of plants disproportionately affected
  • Goal is to have generation now and 20 years into the future

Robert Helton, Engie North American

  • Renewables do supply a reliability product; get federal subsidies
  • Not seeing companies coming into Texas asking to sign long term agreements
  • Storage and modular reactors coming in eventually
  • No one benefits from an unreliable grid
  • Support incentives for right amount of generation for right amount of money
  • Problems today are operational issues like ramping
  • Concerned thermal generations could be started up at times they are not necessary and other times when they don’t start, dynamics there that create concern
  • Need to consider more targeted product
  • Chair – Ms. Coleman how active are your companies?
    • Coleman – Want to dispel they are unjustly profiting
    • Coleman – If they didn’t provide megawatts would still have to be provided, they can just provide them at a low cost
    • Coleman – Describes more details on how they operate, nothing nefarious and many members are just pure load on grid as they don’t participate in price, etc.
  • Richmond – 4.6 MWs will add, not nefarious but claims actions are disingenuous
  • Hunter – Wants to stress communication, needs to hear from generators
  • Hunter – Will be reaching out to Coleman, particularly on coastal side
  • Slawson – Wants to know about hedge and amount of 80% comprised of industrial vs real time; how many members and MW
    • Coleman – It’s not individual customers, industrials might be like 30% of the market
    • Coleman – Represent hundreds of companies, have about 50 members in ERCOT but don’t have MW total
    • Coleman – Steel mills examples of industry that can curtail load quickly, but it depends on industry
  • Raymond – Asked Helton if they do wind and solar?
    • Helton – Yes, wind, solar and storage
    • Helton – Have tax credits and investment tax credit as two programs they access
    • Helton – Need to find companies that have a tax appetite and go from there, does reduce the cost of development and overhead production
  • Raymond – What is amount of production? Wants to understand what subsidy will be likely 10 or 20 years from now? How are subsidies helping?
    • Helton – Depends on year and what is produced
    • Helton – Subsidies help with reliability and put additional resources into the ground
    • Helton – If you took away production credit, will not create additional thermal generation
    • Helton – Need to incent for reliability
  • Raymond – Can you continue putting into the grid if there is no longer a production tax change?
    • Helton – They do eventually ratchet down and go away, will no longer be needed
    • Renewables competing against renewables for production tax credits; marginal cost of thermal is going to be in $20 range so taking production tax credit away won’t compete; need to do something to incentivize reliability

 

Panel 3

Julia Harvey, Texas Electric Cooperatives

  • Supporting system reliability and addressing operational challenges are issues that need to be addressed; need to improve market design to incentivize reliable generation
  • Award of PCs is based on subset of critical hours during the lowest margin operative reserve hours, determined on a retrospective basis; could be challenging for co-ops; will have to develop new tools and techniques to forecast; hours could occur based on unpredictable factors
  • Design is not best approach for investment in type of generation we need in extreme events because doesn’t recognize ability of generators to operate during extreme events
  • Noted that E3 doesn’t recommend PCM because of risk of unintended consequences
  • PCM explicitly assigns all cost to consumer but could assign cost to generators based on contribution to uncertainty we are trying to manage

 

Cathy Webking, Texas Energy Association for Marketers

  • Competitive retail market not part of E3 study but critical to analyze how it would affect our customers
  • Cost in E3 report for PCM is a net cost in wholesale market, doesn’t equate how cost will get charged to retail customers; price volatility in real time market not seen by end use customers because of fixed priced contracts
  • Would take 25% of theoretical economic cost and put in a capacity cost, leads to uncertainty; obligation for those costs is uncertain because it is disconnected from customers usage pattern
  • In favor of revenues targeted to dispatchable generation to meet needs; believe we should focus on operating hours
  • SB 3 didn’t speak about a reliability standard; discussion from IMM much closer to being compatible with what SB 3 was meant to mean
  • PCM implementation years away and price signals can’t be understood yet; need real time co-optimization that will also take years to get into place, concern this uncertainty would freeze investment

 

Mark Bell, Association of Electric Companies of Texas

  • Electricity demand growing, no capacity problem, have a dispatchability problem; need to build market that sends signal to keep existing dispatchable generation and grow with demand in future
  • Need to enhance current energy only market; must ensure reliability, minimize consumer cost, and enable robust competition; need reliability standard and ensure resources are paid for performance
  • Ancillary market can respond to short term needs; wholesale market can respond to long term needs; must take action

 

Shelly Botkin, Texas Public Power Association

  • Need to encourage fair market outcomes that maintain diversity of state fuel mix, balances customer cost with incentives, take position that PUC should consider robust analysis with proposals on table
  • Disagreement about direction of Phase II proposals, may not align with SB 3
  • Discussing and analyzing other proposal brought forward by stakeholders
  • Raymond- Should send comments to all members of the legislature
  • Raymond- Appreciate comments of Mr. Bell
  • Howard- Is real time co-optimization related to what we are talking about
    • Webking- Critical to understanding overall concepts because indicating credits would be earned determined on real time energy, don’t measure individual providers on ancillary services without real-time co-optimization

 

Public Testimony

Cyrus Reed, Lonestar Chapter of Sierra Club

  • Not yet taken position on PCM; have concerns regarding cost and if the analysis was done correctly; regardless there are 8 other things that can be done to make system reliable:
    • Co-optimization, uncertainty product modeling, energy efficiency goals are low and should be updated (PUC said they would look at rulemaking next year), demand response, transmission congestion, take advantage of federal money, building codes, look at helping those who are least able to afford energy and help with payment assistance

 

Kenneth Flippin, US Green Building Council, Texas Chapter

  • Texas is behind in energy efficiency; encourage updates to building codes and energy standards; weatherized homes increases survivability in homes during extreme weather events
  • Need Lege to give direction to PUC and ERCOT to do the right thing

 

Larry Linenschmidt, Self

  • Discusses climate change and need for clean energy, asks for support for renewable energy in Lege.
  • Should initiate pollution fee on oil and coal energy; should create loan pool for older homes for weatherization; look into small modular nuclear reactors

 

Adjourned