The Commission met to approve some decisions made by SOAH proceedings. They discussed the role of ORDC price floors in the electric market redesign. Commissioner McAdams gave an update on the actions of the SPP. A video archive of this meeting can be found here.

This report is intended to give you an overview and highlight 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.

Items 3, 5-7, 11, 17, 18, 31, 32 approved

Items 10 and 12 were not taken up


Item 2: Docket No. 48836; SOAH Docket No. 473-19-1422.WS – Petition of Paloma Lake Municipal Utility District No. 1, Paloma Lake Municipal Utility District No. 2, Vista Oaks Municipal Utility District, Williamson County Municipal Utility District No. 10, and Williamson County Municipal Utility District No. 11 Appealing the Wholesale Water and Wastewater Rates Imposed by the City of Round Rock.

  • Cobos- Provided draft order in a memo
  • Motion to approve order in Cobos’s memo carries


Item 4: Docket No. 53109; SOAH Docket No. 473-22-05848.WS – Application of Undine Development, LLC for System Improvement Charges.

  • McAdams- When an area is annexed by a municipality for limited purposes, I think we should look at the specific facts in a specific case; if area is not annexed without purpose of providing water and sewage, it remains under our jurisdiction
  • Cobos- Who would provide us with information to review to determine in the case of limited purpose annexation? Should we just assert jurisdiction and if someone had a problem with it, would they challenge or jurisdiction?
  • McAdams- If disputes arise and clarity is not present; we look at the fact pattern behind the decision for annexation
  • Glotfelty- I am falling on the side of asserting as much jurisdiction as we can and trying to keep this from getting too muddy
  • McAdams- I am fine with a blanket statement if that is clearer
  • Cobos- I don’t want to add more on our end
  • McAdams- For limited purpose annexation the commission would assert our authority based on the principle of the location of the premises
  • Motion for decision to be made consistent with McAdams’s memo and subsequent discussion


Item 8: Docket No. 54532 – Complaint of Rio Bravo Subdivision Property Owners Association

Against Valley Municipal Utility District No. 2. (Final Order) Cheri Hasz

  • Jackson- I agree that the complaint should be dismissed
  • Motion to revise PFD to be consistent with commission counsel memo carries


Item 9: Docket No. 54533 – Complaint of Jyoti Naik Against Guadalupe Blanco River Authority.

(Final Order) Abbey Jones

  • Jackson- Dismissal is appropriate
  • Motion to amend PFD carries


Item 15: Docket No. 53442; SOAH Docket No. 473-22-2353 – Application of CenterPoint Energy

Houston Electric, LLC for Approval to Amend Its Distribution Cost Recovery Factor.

(Order on Rehearing) David Hrncir

  • Motion to deny rehearing carries


Item 16: Docket No. 53719; SOAH Docket No. 473-22-04394 – Application of Entergy Texas,

Inc. for Authority to Change Rates. (Final Order) David Hrncir, Grace Lager, Johann

Rupp, and Alex Scheifler

  • Cobos- I think we should approve the agreement and it is reasonable
  • Cobos- I think we should sever the proceeding because we have new legislation and need to establish new rulemaking
  • McAdams- Lets address this separate rider issue in an adjudicated proceeding; seems prudent to have that relevant discussion in the context of the new bills
  • Motion to sever PFD issues into separate dockets carries
  • Motion to direct OPDM to draft an ordered consistent with the parties’ agreement


Item 21: Wholesale Electric Market Design Implementation. (Discussion and

possible action)

  • Jackson- Board’s resolution recommends an enhancement to the ORDC using a multi-step floor
  • Cobos- We need to use a market-based tool to enhance self-commitment by generators; that is the goal of a near term bridge solution
  • Cobos- ERCOT should track new revenue from ORDC price floor adders and performance standards to see if price floor is reducing RUC
  • Cobos- Commission should evaluate the need for ORDC price floor adders later
  • Cobos- I think we should do this evaluation 6 months or a year out after implementation
  • Cobos- We need to find out if it is meeting its intended purpose
  • Cobos- Once we implement DRRS we should evaluate if we still need to address price floor
  • McAdams- I am in alignment with Commissioner Cobos
  • Glotfelty- It is not clear to me that we are creating a solution to eliminate RUC or if we are trying to get to a reliability capacity issue; I thought this was a question of resource adequacy
  • Glotfelty- I don’t want another out of market solution to solve another out of market problem that we created; I think we should stop trying to fix the market
  • Glotfelty- We should really look at ancillary services; If we realize the ORDC is not working, we will have to look at ancillary services in the future; need to create certainty in this market
  • Glotfelty- I am tentatively supportive of the effort
  • Cobos- What is the goal of this near-term bridge solution? I think the wording was very broad and when it arrived at ERCOT it became a resource adequacy solution; we need to clarify that solution
  • Cobos- I think this is a measure to take the physical pressure off our long duration units through a market-based tool
  • There is a direction correlation between the real time and day-ahead market
  • Glotfelty- I agree that the ORDC was implemented as a market solution, but the modifications we have made it so that it is no longer a market solution
  • McAdams- Is poor clarity of purpose here, which is why we had to make those modifications
  • McAdams- We are not discussing revenues; we are trying to increase market driven behavior to stabilize the system and work toward a long-term solution
  • McAdams- We are trying to implement DRRS
  • McAdams- If it is not working, it should go away; the market should know that and see it coming
  • McAdams- DRRS will take some time to accomplish and evaluate
  • Glotfelty- Do you know how much this floor is tied to the market?
  • Glotfelty- I believe it is $500M; do not believe that that amount of money is sustainable for a long time
  • Glotfelty- I don’t think that generators will go away based on our load growth; we are going to continue to see this issue the more number of renewables we have
  • Glotfelty- The more you have 0 marginal cost resources in the market, the higher we will have for those with high operating costs
  • Glotfelty- Its buying insurance, is what it is
  • Glotfelty- I think it is hard to determine what success will be
  • McAdams- Success is conditions dependent
  • Cobos- We have put money in the market, we can’t make generators invest; this is ultimately trying to get these generators to self-commit; if that doesn’t happen we will have to address that problem another way
  • McAdams- We are obligating that we will check in on this; stakeholders will verify
  • Motion to approve ERCOTs recommendations carries


Item 27: Project No. 41210 – Information Related to the Southwest Power Pool Regional State

Committee. (Discussion and possible action)

  • McAdams- SPP intends to grow into the west and intends to file this plan with FERC by 2024
  • McAdams- We need to settle on cost allocation especially when it comes to interregional capacities
  • McAdams- I mentioned RAMP accreditation; these capabilities are becoming a more acute challenge to achieve
  • McAdams- We need a certain threshold of rampable capacity
  • McAdams- We are starting to prioritize various projects depending on near-term needs of the system
  • McAdams- SPP is approaching fuel security through an accreditation concept
  • McAdams- SPP now has a seasonal capacity obligation; the current problem is that it is very low for the winter; summer is no longer the problem, our systems are not made for winter
  • McAdams- We need to evaluate what the appropriate level of capacity obligation is
  • McAdams- We should proceed eyes wide-open for everything between ERCOT MISO and SPP
  • Cobos- Is SPP conducting a customer survey
    • McAdams- There has been concerns about that, but I think we are planning on conducting a consumer facing VOLL study
    • McAdams- ERCOT may have settled on a framework and Berkley National Labs is conducting regional analysis
    • McAdams- VOLL studies have a ton of good uses
  • Glotfelty- How far does SPP want to push in the west?
    • McAdams- They want to go to the Pacific – depends on what California ISO will do
    • McAdams- The east no matter what will be secure; the west is going to be something to watch

Item 34: Discussion and possible action regarding agency review by Sunset Advisory Commission, operating budget, strategic plan, appropriations request, project assignments, correspondence, staff reports, agency administrative issues, agency organization, fiscal matters and personnel policy.

  • PUC Staff will have a party for a staff member retirement


Item 37: Closed Session

  • Commissioners met in closed session and then adjourned