Public Utility Commission – January 18, 2024

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The Public Utility Commission met on January 18 to discuss: the most recent winter weather event, a number items on the docket, a reliability standard for the ERCOT market, resiliency plans, battery state of charge standards, among others. An archive of the meeting and the agenda 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.

Opening Comments

Jackson – Will go into closed session at 11:30 – if we do not complete the agenda before then, we will come back after closed session to finish the agenda

The following items were consented upon without discussion: 1, 3, 5, 6, 7, 8, 9, 10, 12, 17, 19, 20, 22, 23, and 25.

Item 49: Discussion and possible action on electric reliability; electric market development; power- to-choose website; ERCOT oversight; transmission planning, construction, and cost recovery; and electric reliability standards and organizations arising under federal law.

Jackson – Thanks to all our partners to everyone who worked to ensure grid reliability during this most recent winter weather event
Reforms that have been put in place have kept our grid secure and functioning
Event ended yesterday; will take several weeks to conduct a complete analysis
Glotfelty and Cobos thank frontline workers and other personnel
Cobos – Were some local outages, but statewide the grid stayed strong; weatherization put in a strong backbone for our grid
Cobos – Firm fuel supply product, the first in the country, has shown tremendous benefits

Woody Rickerson, ERCOT

Do not have all the information yet, will take a while to get all the information in
Issued a number of advisories and warnings starting January 10
The winter weather moved in on Sunday in the panhandle
By noon today expect everywhere in the state to be above freezing
New record peak was set on Sunday at 65k; Monday morning broke that record at 76k, broke record again on Monday night and broke again on Tuesday morning; 78,138k
Wednesday had a high peak of 77k
This was a significant storm; historically, only winter storms Elliot and Uri had a lower load weighted average
Winter storm was longer than 2011, 2018, polar vortex, and Elliot
This was the first winter full weatherization rule was in effect; 1.3k units had weatherization inspections
Net load exceeded 68k three different times over the last week; first time was Monday morning, Tuesday morning, Tuesday evening; thermal units provided 78% of that energy
3k MW of incremental forced outages; totaling 7k, which is half of what we saw during Elliot
Gas pipeline/gas supply; inspection restrictions 1.5k MW net loss
Had issues in San Antonio – were 4 peaks – those issues were resolved
Wind performance – fluctuated from 1.9k to 24k MW; Low wind was most concerning peak Monday morning and peak Tuesday afternoon
- Wind forced outages 7k MW on Monday; only 2.3k were due to icing; will have to pull an RFI to see what the others were about
Solar performance – for the first time solar was at the level that changed the operating day; provided a significant amount in the middle of the day; allowed battery charging, allowed issues for thermals to be corrected
Tuesday set a record of 14,837 MW of solar which was 23% of the load
Significant difference in solar output between the days, some days was 7k
Forced outages for solar units was not significant at around 300 MW
Batteries over peak provided about 1.5% total energy needed at that peak; about 1.2k MW
Average state of charge from 14-17 was about 65% for the fleet; maximum was 76% which was 55 MWh; minimum state of charge was 41% on Tuesday after the evening peak
Peak discharge was 1,280 MW on Tuesday morning; peak charge 1,148 MW; as expected
On Monday system peaked at 400, Tuesday morning and Tuesday evening at 1100; peaks responded with highest net load
Tuesday 1900 day ahead versus 560; Tuesday evening day ahead 300 and real time was higher
Are coming from a place where we under forecasted peak load, like during Elliot and other winter storms due to industrial demand respond and LFL price responses
Are looking for better ways to calculate demand response prices; are starting to incorporate information that is helping ERCOT tune their models
Other things have impact of accuracy of load forecasting like combined effect of conservation calls, holiday schedules, school/offices closures/delays
Can forecast versus actual load, and the put weather back into the model; will begin to see the effects all of these things had
Obvious conservation call had a big effect; people did conserve
Actual weather versus weather forecast; we will improve in this area as well, but will always be weather variance in the forecast
Glotfelty – Pleased with thermal fleet performances, were a lot of outages in the summer, they were ready for this and were the backbone of the system
Glotfelty – Encourage ERCOT to keep working on load forecasting; doing a good job but can always do better
Glotfelty – Have any freeze offs in the gas supply?
- Not aware of any well head issues
Cobos – How many firm fuel resources were deployed?
- Around 1.2k to 1.3k MW
Jackson – In comparison to previous storms, the temperatures were colder and length of time?
- Longer than most, this storm, Heather, is longest we had except for Uri
Jackson – Storm was a good test of the reforms in place; talked to generators in panhandle who held their own, but had high wind later in the event
Jackson – Need to think about continued diligence – in terms of the gird continuing to perform
Jackson – Heard good feedback from generation, transmission, gas supply, pipelines, etc. issues were identified early and had a successful outcome

Item 1. Docket No. 54048 – Application of Tidwell Wastewater Utility, LLC for a Pass Through Rate Change. (Final Order) Austin Spraetz

Consented

Item 2. Docket No. 54206 – Petition of Tellus-Mann, LLC to Amend High Point Water Supply Corporation’s Certificate of Convenience and Necessity in Kaufman and Rockwall Counties by Streamlined Expedited Release. (Final Order) Austin Spraetz

Proposed order was filed; petitioner filed to withdraw its application
Jackson – Move commission find good cause to grant them to withdraw
- Motion passes

Item 3. Docket No. 54210 – Complaint of Joyce Butler Against Holiday Acres Mobile Home Park. (Preliminary Order) Ariadna Garcia

Consented

Item 4. Docket No. 54316; SOAH Docket No. 473-23-22451 – Joint Application of SW Merger Acquisition Corp., Corix Infrastructure (US) Inc., Texas Water Utilities, LP, Corix Utilities (Texas) Inc., SWWC Utilities, Inc., and Midway Water Utilities, Inc. for Approval of Merger Transaction Under Texas Water Code § 13.302. (Final Order) Johann Rupp

Proposed order addresses unanimous agreements; applicants filed corrections
Jackson filed a memo – makes changes to order to clarify reporting requirements and to ensure compliance with regulatory commitments
Cobos – Agree with changes in memo
Motion to approve changes in line with Jackson’s memo
- Motion passes

Item 5. Docket No. 54576 – Petition by Ratepayers Appealing the Water Rates Established by Red River Authority of Texas. (Preliminary Order) Grace Lager

Consented

Item 6. Docket No. 54863 – Alvina Johnson’s Appeal of the Cost of Obtaining Service from Redland Water Supply Corporation. (Final Order) Ariadna Garcia

Consented

Item 7. Docket No. 54958 – Application of Ioni Water Supply and E.H. Bishop d/b/a Ioni Water Supply for Sale, Transfer, or Merger of Facilities and Certificate Rights in Anderson County. (Final Order) Ariadna Garcia

Consented

Item 8. Docket No. 54966 – Petition of Ariza Gosling Owner LLC Appealing the Water Rates Established by Northampton Municipal Utility District. (Preliminary Order) Lori Patrick

Consented

Item 9. Docket No. 55066 – Complaint of Diane Nowakowski Against the Kacey at Kingwood Apartments and CAF Management. (Preliminary Order) Lori Patrick

Consented

Item 10. Docket No. 55157 – Application of Texas Water Utilities, LP and Midway Water Utilities, Inc. for Sale, Transfer, or Merger of Facilities and Certificate Rights in Grayson, Harris, Hill, Johnson, Montgomery, and Palo Pinto Counties. (Preliminary Order) Johann Rupp

Consented

Item 11. Docket No. 55234 – Noe Puga’s Appeal of the Cost of Obtaining Service from East Rio Hondo Water Supply Corporation. (Final Order) Lori Patrick

Proposal for decision; response was filed; granted oral argument for this proceeding

Richard Fryer, East Rio Hondo WSC

Support the ALJs proposal for decision to dismiss the cost of service appeal with prejudice; appeal was filed more then 365 days after pertinent statute which requires a 90-day filing

John Harrison, Commission Staff

Support the proposal for dismissal; agree the appeal needs to be brought within 90 days

Commission moves to adopt the PFD
- Motion passes

Item 12. Docket No. 53195 – Complaint of McKamie Real Estate Services, LLC Against Texas- New Mexico Power Company. (Final Order) Lori Patrick

Consented

Item 13. Docket No. 53931; SOAH Docket No. 473-23-03499 – Application of Southwestern Electric Power Company for Authority to Reconcile Fuel Costs. (Order on Rehearing) David Hrncir

Considered this in November; extending time to act on the motion for rehearing
Move to extend time to act on motion for rehearing
- Motion passes

Item 14. Docket No. 55067; SOAH Docket No. 473-23-21216 – Application of Oncor Electric Delivery LLC to Amend Its Certificate of Convenience and Necessity for the Ramhorn Hill – Dunham 345-kV Transmission Line in Denton and Wise Counties. (Final Order) John Kelly

Exceptions and corrections have been filed; recommend adoption of some of the corrections
Recommend changes to the order and the PFD is before the commission
Cobos – ERCOT has deemed transmission line as critical to its function; past statutory deadline, adopt in part, route 179-C, move to reject alternate 1 and 2 segments
Jackson – Issue is it would reduce habitable structures?
- Cobos – Correct
Glotfelty – Also support route 179-C as modified with changes in commission council memo
Move to approve PFD in part and rejecting in part and consistent with discussion
- Motion passes

Item 15. Docket No. 55114; SOAH Docket No. 473-22-21357 – Application of Texas-New Mexico Power Company to Amend Its Certificate of Convenience and Necessity for the Pilot Point 138-kV Transmission Line Project in Collin, Grayson, and Denton Counties. (Final Order) John Kelly

Filed exceptions/corrections; ALJ recommends some corrections, and memo filed recommending some changes; oral argument was granted

Nick Bizani, Self

Previously testified in July; main concern is the placement of the route for 5E, wraps around my house on two sides
Already have a local power line going through half my property already

David Brown, on Behalf of the Route 11 Interveners

Oppose route 11 and in support of route 4; approval of this would enable an applicant to misrepresent the costs, and hide from interveners
Would be a significant increase of cost for rate payers; would be the highest cost of a route than anyone has seen; experts for route 4 people would say the same thing
PFD recommends the commission not relies on cost analysis
Recommend have confidential original estimate for route 4 was $99m and route 11 was $68m
By the time PFD was issued ALJs saw that route 4 was $33m less; which was not given to the intervenors until later
TNMP expect 57% to 60% of their project to be under condemnation

Shula Netzer, Four Seasons LLC

Utility easements are necessary for development; had no knowledge that route 11 was the chosen route; had a development agreement in place
This route will affect neighboring properties, environmental issues, etc.
This type of situation has never happened before; provides a map that shows the tollway, route 11 would cross the most expensive land in north Texas
Four Seasons property has a MUD and is ready for development; power line would go right through this property

Thomas Bracedo, Represents a Family in this Matter

PFD is well reasoned and is supported by PURA; only one party filed substantive arguments against route 11
Route 11 is favorable in terms of overall route length, overall impacts, etc.
Route 4 does not meet PURA requirements and would affect my clients’ property in a negative way; ALJ found this route is inconsistent with PUC president
Cost estimates for route 11 have not been found to be inconsistent; even if one accepts that route 4 estimates were incorrect, overall cost between both are negligible
In fact, estimates show there would be a $6m in savings if route 11 is selected

Alfred Herrera, Herrera Law & Associates

Urge the commission to adopt either route; evidence shows none of the other routes are anywhere close to the criteria the commission has

Court Thomas, Highpoint Consortium

Support PDF and its recommendation of route 11; urge the commission to make a decision so we can move on

Zack Brady, E Real Estate Group

Agree with testimony of Alfred Herrera; recommend commission pick either option
Oncor’s witness agreed a simple modification of the location of the interconnection that would result in a $6m savings
This is a critical need line, request the commission not reject this PFD altogether

Brad Bayliff, Represent Landowners

Concerned about how the cost estimates were prepared for these routes; unable to verify why the costs for some of the routes were higher than others
TNMP did not present the commission with an accurate picture of this case
Utilities should not be able to manipulate the cost of these lines
No credible evidence that supports approval of anything other than route 11 and route 4

Stephanie Sparks, Texas New Mexico Power Company

This project is necessary and needed; in these cases there are often intervenors
Have been some sensationalized accusations that we have done wrong cost estimations
There is a difference in opinion in how we have done our estimates; Commission has previously discussed cases in which estimates have varied
ALJs have heard the intervenor’s complaints in this case; ALJ has continuously sided with TNMP
ALJ has not found any bad faith manipulation of the cost estimates
Support adoption of the PFD

Commission Discussion

Glotfelty – Support route 11, but not for the reasons recommended; has the lowest number of habitable structures, parallels rights of way, goes over fewer pipeline crossings; has less turning structures
Glotfelty – In the future, all routes need to be estimates using the same methodology, and transmission construction plans need to be submitted according to statutory deadlines
Cobos and Jackson – In support to adopt PFD with the commission council changes and route 11
- Motion passes

Item 16. Docket No. 55151; SOAH Docket No. 473-22-22772 – Joint Application of AEP Texas Inc., Electric Transmission Texas, LLC, and South Texas Electric Cooperative, Inc. to Amend Their Certificates of Convenience and Necessity for the Cruce-to-Del Sol Double- Circuit 345-kV Transmission Line in Brooks, Duval, Jim Hogg, and Starr Counties. (Final Order) Johann Rupp

Proposal from SOAH, ,commission added corrections, ALJ recommends adoptions of all corrections; proposal for decision is before commission
Cobos – ERCOT flagged this as critical as a part of the RGV’s greenfield initiative; inclined to adopt PFD even though it may cost more than other alternative routes as it impacts less habitable structures; open to hear other recommendations
Jackson – Concerned about the cost of the route Cobos refers to, do not think avoidance of 9 habitable structures is worth the greater cost
Glotfelty – Are pros and cons to both; not sold on either
Cobos – Is about $15m more with route H Alt 2; included to go with Jackson’s modification
Move to approve PFD in part to approve H Alt 2 consistent with modifications and Jackson’s comments
- Motion passes

Item 17. Docket No. 55155 – Remand of Docket No. 40443 (Application of Southwestern Electric Power Company for Authority to Change Rates and Reconcile Fuel Costs) (Revised Preliminary Order) Grace Lager

Consented

Item 18. Docket No. 55397; SOAH Docket No. 473-24-00837 – Application of AEP Texas Inc. to Amend Its Certificate of Convenience and Necessity for the Cruce-to-Reforzar Double- Circuit 345-kV Transmission Line in Brooks, Duval, Jim Hogg, Jim Wells, and Kleberg Counties. (Final Order) Johann Rupp

Proposed order and no corrections, exceptions filed
Cobos – Support approval of route J Alt
Glotfelty – Agree
Jackson – Was concerned about the cost, however, I am fine with moving forward
Move to approve the PFD, route J Alt, including commission’s proposed changes
- Motion passes

Item 19. Docket No. 55596 – Settlement Agreement and Report to the Commission Regarding Hempstead Electric Department’s Violations of PURA § 38.102 and 16 TAC § 25.97, Related to Annual Power Line Inspection and Safety Reporting Requirements for Calendar Years 2021 and 2022. (Final Order) Abbey Jones

Consented

Item 20. Docket No. 55629 – Application of Southwestern Electric Power Company to Amend Its Distribution Cost Recovery Factor. (Final Order) Abbey Jones

Consented

Item 21. Docket No. 55661; SOAH Docket No. 473-24-03490 – Petition by Citizens of Livingston for Fair and Equitable Rates, Inc. to Review City of Livingston’s Rate Ordinance No. A- 842. (Order on Interim Appeal) Grace Lager

Cobos – Need clarification on the ALJ’s ruling on this order as they are ambiguous; specifically on which requirements in TAC apply to this petition filed under PURA concerning whether residents must be qualified voters and ratepayers, does failure to comply mean the commission loses jurisdiction over this appeal?
Move to extend time until we get clarification through the ALJ
- Motion passes

Item 22. Docket No. 55690 – Settlement Agreement and Report to the Commission Regarding Harmon Electric Association Inc.’s Violations of PURA § 38.102 and 16 TAC § 25.97, Related to Annual Power Line Inspection and Safety Reporting Requirements for Calendar Year 2022. (Final Order) Abbey Jones

Consented

Item 23. Docket No. 55697 – Settlement Agreement and Report to the Commission Regarding Southwest Rural Electric Association Inc.’s Violations of PURA § 38.102 and 16 TAC § 25.97, Related to Annual Power Line Inspection and Safety Reporting Requirements for Calendar Year 2022. (Final Order) Abbey Jones

Consented

Item 24. Docket No. 55744 – Application of CenterPoint Energy Houston Electric, LLC for an Extension of Rate Filing Requirement Under 16 TAC § 25.247. (Final Order) Ariadna Garcia

Proposed order before the commission
Glotfelty – Proposed we reject application and deny request to extend deadline
Cobos – Could go either way with this, but agree want to set precedent that requires utilities to come in when they need to
Jackson – Sympathetic to the project, but agree with Cobos
Move to reject application and deny request to extend deadline
- Motion passes

Item 25. Docket No. 55867 – Application of LCRA Transmission Services Corporation for Authority to Change Rates. (Preliminary Order) Grace Lager

Consented

Item 26. Docket No. 56119 – Petition of Electric Reliability Council of Texas, Inc. for Expedited Declaratory Order Regarding Public Utility Regulatory Act Chapter 39, Subchapter N. (Discussion and possible action)

Item 27. Docket No. 56122 – Petition of Electric Reliability Council of Texas, Inc. for Expedited Declaratory Order Regarding Public Utility Regulatory Act Chapter 39, Subchapter M. (Discussion and possible action)

Items taken up together; no order before the commission and no specific; thoughts from the commission concerning an expedited schedule and if this would be sent to SOAH; ALJ approved procedural schedule recently
Cobos – Believe this case should stay at the PUC and the schedule by ALJ is necessary; not necessary to present a legal order, paper hearing should be sufficient
Jackson and Glotfelty – Second Cobos’ feedback

Item 28. Public comment for matters under the Commission’s jurisdiction but not specifically posted on this agenda.

Not discussed

Item 29. Project No. 53924 – Water and Sewer Utility Rates After Acquisition. (Discussion and possible action) Rama Rastogi and Patty Garcia

Jackson – Public hearing was cancelled due to include Tuesday January 23 at 9:00 and remote viewing will be available

Item 30. Project No. 54453 – Year-End 2022 Water and Sewer Utility Annual Reports in Accordance with 16 TAC § 24.129. (Discussion and possible action)

Jackson – Comprehensive rate filing will occur in April, support this
Commissioners agree that is appropriate; no action needs to be taken by the Commission

Item 31. Discussion and possible action regarding implementation of state legislation affecting water and sewer companies, current and projected rulemakings and other projects, comments to other state agencies, and Commission priorities.

Not discussed

Item 32. Discussion and possible action regarding implementation of state and federal legislation affecting telecommunications markets, current and projected rulemakings and other projects, comments to other state and federal agencies, and Commission priorities.

Not discussed

Item 33. Project No. 51879 – Information Related to the Western Energy Imbalance Market. (Discussion and possible action)

Not discussed

Item 34. Project No. 52373 – Review of Wholesale Electric Market Design. (Discussion and possible action)

Not discussed

Item 35. Project No. 53298 – Wholesale Electric Market Design Implementation. (Discussion and possible action)

Not discussed

Item 36. Project No. 54444 – CY 2023 Reports of the Electric Reliability Council of Texas. (Discussion and possible action)

Not discussed

Item 37. Project No. 54445 – CY 2023 Review of Rules Adopted by the Independent Organization. (Discussion and possible action) Kim Van Winkle and Harika Basaran

Jackson – PUC staff filed a memo and proposed order
Motion to adopt memo and proposed order
- Motion passes

Item 56. Adjournment for closed session

The commission met for closed session; no formal action was taken as a result

Item 37. Project No. 54445 – CY 2023 Review of Rules Adopted by the Independent Organization. (Discussion and possible action) Kim Van Winkle and Harika Basaran

Glotfelty and Cobos have filed memos; have additional information from ERCOT and additional parties

Dan Woodfin, ERCOT

Have an increasing number of batteries providing ancillary services
Are a few thousand MWs currently in the market; interconnection que shows by 2026 could potentially be over 20 GWs of batteries
Need to get this right for reliability of the system; want the batteries to be added to the system, but need to make sure they have enough energy so they can be on when we need them
Have modified this through the stakeholder process; have gotten to a good spot
Remaining issues are failure to perform/provide; are monitoring this
Failure to perform is to make sure they are preserving enough state of charge to be able to provide ancillary services at any time
Cannot wait until after we have an event to figure out if they are able to perform
Jackson – This is interim until the implementation of RTC correct?
- Correct
Jackson – What is the risk to the grid operations without this NPR?
- Has a lot of things in it including recognition of state of charge in dispatch and reliability commitment process
- Systems do not recognize MWs from batteries being any different between one from a combustion turbine; need to get the differentiation into our system
- If they are selling ancillary services, they need enough charge to restore; could be a risk and result in shedding of load if they do not
Cobos – Filed a memo on this item; some stakeholders filed public comments on ERCOT’s presentation; hard for us as commissioners to make decisions if comments from stakeholders are not submitted into the public record; disappointing those comments were not in the record as some stakeholders had very strong opinions on this
Cobos – Peak demand is increasing and have hit an all-time summer peak of over 85k MW and have hit winter peak recently; state will not slowdown in population/demand for electricity
Cobos – Is thermal planned to be built, but need something now; are operational challenges during ramp times in summer/winter due to solar/wind coming off the system at different times in the day
Cobos – Currently have 19k MW solar capacity in ERCOT; over 24k MW of solar in the horizon according to the interconnection que
Cobos – 2k MW of storage put on the system during the summer event; aided in grid resiliency
Cobos – Need flexible tools to get on the system to continue aiding when there are operational challenges
Cobos – Need to come to a decision on this today; have been discussing this for five months
Glotfelty – If we do not rule on this today, it is not a failure, ERCOT notes discussions between storage providers have been very helpful
Glotfelty – According to the presentation given to us by ERCOT, every resources fails; singling out battery providers, is discriminatory; cannot imagine putting a penalty on batteries specifically
Glotfelty – ERCOT recommends approval of NPR 1186; want to know other possibilities to address reliability problems with this issue
Glotfelty – Maybe those that have ancillary service obligations to contract with more than one resource; if you have one with a single resource, failure to provide alone is the financial risk
Jackson – Could you discuss value you think operational requirements of 1186 would provide?
Glotfelty – Everyone is on a learning curve on how to handle batteries; more batteries on the system the better off we are
Jackson – Was speaking about how things are measured/categorized
Glotfelty – They have that data; operationally, ERCOT has the data they need; the market needs to change and adapt to new resources coming into the market
Cobos – Whatever action we take on this, will not stop learning about this as a whole; the ultimate solution is RTC plus B; put the question is whether there are penalties and a compliance regime
Cobos – ERCOT stated some ESRs were short of their obligations during summer conditions, but need to know how they got there, think that is half of the picture
Cobos – In ERCOTs presentation were holding storage to a different threshold than others; seems like it is not a similar comparison
- The reason for the difference because there is a difference in the protocols; ESRs were having trouble passing the Grid P threshold
Cobos – What does Grid P stand for?
- Generation resource deployment performance
Jackson – Take us through framework in 1186 from an operational standpoint?
- ERCOT does not have a requirement currently for ESRs; defines state of charge
- Systems RUC and dispatch do not consider state of charge
- Battery capacity is included in supply curve with no consideration for duration of charge; need to include that consideration
Glotfelty – How does system deal with a gas system that has an ancillary service that trips
- They set their system to 0 and we purchase ancillary
Glotfelty – What is the difference between a system tripping and a battery running out?
- A unit trip is not preventable, state of charge is preventable
Glotfelty – If one of the resources goes offline, the next picks up the slack; feel that is the appropriate market function
- Had a lot of batteries discharging during the summer event, but the problem is reserve capacity
Glotfelty – What would have happened if they didn’t discharge in the south? Would it have been loadshed? Is it appropriate to put a market participant in a position where they fail the state of charge or they save the system
- They discharged earlier during the summer because prices were high; this is meant to enforce they are reserving the part they sold and defining what that is
Cobos – Have always looked at ancillary services and have a penalty structure on whether they failed to perform; this presentation shows only very few batteries have failed to perform
Cobos – Not sure if I am seeing a case that there has been a prevalent failure to perform; do not know if we need a new noncompliance regime for this
Cobos – Could be potentially not getting the MWs we need to maintain reliability; they need to continue providing telemetry data, and if they are not, we need to deal with that
Cobos – Are there pieces of 1186 worth moving forward with and some that are not; do you feel you currently have the tools to go after those who do not perform?
Mark, Commission Staff – They currently have the ability to; 1186 makes it clearer what standards the grid operator and the commission want those entities to achieve
Mark, Commission Staff – If you do not feel there is enough evidence to support that, then we can move pieces without compliance part; would be better than rejecting 1186 as a whole
Cobos – IMM feedback is the information gathering components; need to provide this data
Glotfelty – ERCOT’s presentation notes on November 30 PUC rule already has state of charge requirements;
- Mark, Commission Staff – Rules are not specific to maintaining a specific state of charge; can be discovery in which a battery did not maintain an appropriate state of charge; which may be more effort
Glotfelty – View violations of ERCOT’s business manual the same as violations of a market protocol?
- Mark, Commission Staff – No; are guidance documents and do not have the force of law
Cobos – Note majority are following those guidance documents; possible batteries are meeting guidelines because they want to be able to perform and be subject to a penalty?
- Is possible, are a few examples of failure to perform; the ones not following the business practices are probably making more money than those who do as they are selling when prices are high and not maintaining a state of charge
Cobos – We have the noncompliance penalty currently of $25k; participants aim to make money within the context of the law
ERCOT Staff – Ask clarifying question
Cobos – If they do not meet their ancillary service obligation, then they are subject to penalties
Glotfelty – What if they could transfer that to another service
Cobos – Cannot currently do that
ERCOT Staff – Is a difference between failure to provide/perform; current protocols do not consider state of charge; is a risk that needs to be on the entity providing the service that says they have a duty to have that resource available; is extending capability concept to state of charge
Glotfelty – Have gone against thermals who have gone out because of a pipeline going out?
- Mark, Commission Staff – Do not have that specific scenario, but have a case against a thermal that failed to nominate gas when they had an ancillary service obligation
Cobos – Is a limited amount of data to show this additional noncompliance penalty regime focused on state of charge is needed right now
Cobos – Reiterates pieces of 1186 are important, recommend removal of the state of charge requirements including the enforcement process
Glotfelty – Supportive of that recommendation; ERCOT needs to continue to look at this and if there is a indeed a problem, then we could come back and fix that
Jackson – Support Cobos’ recommendation
Mark, Commission Staff – Would removal grey box language, eliminating penalty concerns, but maintaining communication flow and establish state of charge expectations in
Glotfelty and Cobos – The expectation is failure to perform
Move to remand 1186 to remove section 8 including state of charge requirements and grey box language that would create a penalty structure
- Motion passes
Cobos – Would provide guidance state of charge requirements ERCOT may consider tabling 1209 as they are tied to 1186
Staff – Draft an order consistent with discussion today 5445
Move to approve the proposed order remanding NPR 1186 with the guidance provided and in the proposed order drafted by staff
- Motion passes

Item 38. Project No. 54584 – Reliability Standard for the ERCOT Market. (Discussion and possible action) Brendan Ok and Werner Roth

ERCOT has a presentation on this item

Woody Rickerson, ERCOT

Is this follow up scenarios that were requested
In the sensitivity analysis did 15 weather years verses 42; would need more capacity if use 15
Loss of load is a winter problem, not a summer; when thinking of the parameters for frequency, magnitude, etc. you should consider a winter event
Cobos – Appreciate the sensitivity analysis; last 15 years have been more extreme from a weather standpoint
Cobos – Duration and magnitude are the main factors in my opinion; UUE on the side as well
Cobos – Request a couple of additional scenario analysis if a certain standard is needed to meet a reliability standard how many MWh of stored energy resources would be needed to meet that number
- Can do that; suggest we provide that as combustion turbines and then provide a conversion to batteries or other resources
- This uses the CDR list from 2023, may not be the best thing to use for the future
Cobos – Seeing a mix of resources coming in, could we do a mix of CT and ESRs
- Can provide that; suggest providing that mix is the endpoint but to get to the standard, just use CTs
Glotfelty – NERC CEO previously said reserve metrics are necessary but insufficient and are moving towards new standards and said Texas is the furthest on the way to getting there
Jackson – Concerning the Net Cost Cap, ERCOT recommending this analysis if further PCM parameters are made; need to work on those parameters

Item 39. Project No. 55250 – Transmission and Distribution System Resiliency Plans. (Proposal for Adoption) David Smeltzer, Chris Roelse, and Rama Rastogi

Don Brown, Self

Spoke previously at the October meeting; many are concerned we do the right job on this
Support rulemaking to gather industry information, but are missing an opportunity if we do not take advantage of physical standards like SIP 14-3
Need to measure physical attacks on our grid; are trackable DOE is producing quarterly reports
Need to look at inventory of Chinese-provided equipment and understand what the mitigation features are around hacking; some large transformers are hackable
Have a number of tracking metrics the commission should consider
Glotfelty – Familiar with EEI’s large transformer program?
- No
Glotfelty – Would be a good resource for you to look into
Need to look at areas of growth and accelerate bringing in new equipment at the same time
Support this, but recommend a timeline on metrics/standards

Commission Discussion

Proposal for adoption is before commission; have been no significant changes since published
Creates a comprehensive assessment to systems; is a top-down risk assessment; will leave them flexibility to address threats to their system
Will be a contested process; robust reporting requirements
Added more clarity and bolstered above features to ensure contested cases to not get in the away of the pragmatic approach to this
Cobos has filed a memo on this item
Jackson – Is a complex rule, appreciate the work done on this
Cobos – HB 2555 88(R) and adoption of this rule will put the state at the forefront of resiliency plans
Cobos – Legislation was passed that creates grants for resiliency
Cobos – Recommend removal of section regarding ability for an electric utility to remove application without prejudice and allowing for modifications after an order; current rules provide an opportunity for an application to withdraw can only be granted after finding of good cause by the commission
Cobos – When you allow alternative modifications after the commission has issued the final order, they could raise new proposals outside of the record
Cobos – Currently if applicant disagrees with commission’s order, they have the right to appeal
Cobos – As rule is written, could create a circular backend process
Cobos – Either remove the section in its entirety, but if want to leave that in there, then request more clarity
Glotfelty – Have not quite understood this yet; agree there should be just cause for removal of an application; kind of indifferent
- Staff – This is not something that the utilities have asked for, do not think anyone is going to feel any certain way if the section is removed
Cobos – Another change to list and make distinction between mandatory statutory factors and discretionary factors
- Staff – Neutral on this recommended change
Glotfelty – Indifferent on this as well
Jackson – Comments on the overall rule?
Glotfelty – This is a moving train, and should not be a blank check for anything considered as resiliency; have not yet created standards for this yet and that is yet to come
Jackson – We believe in a bottom-up process; utilities know their system best; it is four times more expensive to replace something than to preemptively replace something
Glotfelty – Florida Power and Light did not have to make any huge technological changes, just had to put concrete into the ground
Cobos and Glotfelty discuss some systems using AI to identity vulnerable parts of their system
Move to approve the proposal with changes consistent with Cobos’ memo
- Motion passes

Item 40. Project No. 55421 – Texas Advanced Nuclear Reactor Working Group. (Discussion and possible action)

Not discussed

Item 41. Project No. 55837 – Review of Value of Lost Load in the ERCOT Market. (Discussion and possible action) Brendan Ok and Chris Brown

ERCOT filed an overview of the first phase of the VOLL survey and the customer feedback portion of the survey

ERCOT Staff

Stated preference approach, surveys/scenarios, is the best approach
Value of lost load is more for commercial/industrial customers; particularly mining/manufacturing
Correlation with socioeconomic status and willingness to pay
Vary wide range of VOLL estimates in terms of MW per hour impacts; values estimated at $100k MWh and $9k MWh for residential
Are a couple options:
- Weighted average across customer average based on $44k to $99k per MWh depending on duration of outage
- Capping C&I value to median value identified in the literature and then based off weighted average
- Another approach estimates $25k to $50k
- MISO estimates also excluded high C&I numbers
Phase two of the VOLL work plan – proposing launch to be pushed out to mid-March with a plan to file a final report by August
Jackson – Looks like need to decide an interim VOLL value; would like that to be written up by staff by next meeting
Cobos – Have performance measures in ERCOT’s budget to have this completed by end of second quarter
- Are thinking late July/August would be when the deliverable would be completed
Cobos – Recommend granting discretion in this item
Glotfelty – What is the practical effect of capping C&I? Skewing the number in a big way?
- Is a part of the interim consideration, not the long-term; are going to speak with SPP and MISO going forward
- PUC Staff – Staff is going to address that

Item 42. Project No. 55845 – Review of Ancillary Services in the ERCOT Market. (Discussion and possible action) Harika Basaran and Chris Brown

Are still working on timelines and milestones; will file preliminary scope tomorrow
Study to be finalized September 1; will have two open meetings starting February 1 and final scope and time
Between September and January will have workshops for feedback
Final report will be a part of the agency report submitted to the legislature
Cobos – Asks about what is being done in the market now
- ERCOT will discuss ECRS in April

Item 43. Project No. 55948 – Review of Voluntary Mitigation Plan Requirements. (Discussion and possible action) Barksdale English

Item 44. Project No. 55955 – Review of Administrative Penalty Authority Related to Voluntary Mitigation Plans. (Discussion and possible action) Barksdale English

Items 43 and 44 taken up together
Two proposals are implementing HB 1500 Section 1 88(R) and are in two sections off code
Changes market power abuse to be just another factor for the commission to consider in determinations
Commission has expanded authority to $1m per violation per day in failure to appear; needs to coincide with violation of PURA or other commission rule
VMPs need to be updated every two years
Move the proposal be approved
- Motion passes

Item 45. Project No. 55984 – Review of DC Tie Issues in Transmission Planning. (Discussion and possible action) Ramya Ramaswamy and Floyd Walker

Staff filed a memo and laid out proposed questions
Based on discussions at November 30 meeting; put together a list of questions and would appreciate feedback
Glotfelty – Fine with questions, but one thing that would help, if we took challenging dates, what would happen if the Southern Cross DC line was there, what would happen to the system?
Glotfelty – Do not know who would do that modeling, but would be something to explore
Cobos – If ERCOT could do it, fine with additional modeling
Dan Woodfin, ERCOT – Would have to model the economics on the other end of the tie as well; could do a simple analysis
Written comments are due on these questions by February 8; will compile those responses by February 15 commission meeting

Item 46. Project No. 37344 – Information Related to the Entergy Regional State Committee. (Discussion and possible action)

Item 47. Project No. 41211 – Information Related to the Organization of MISO States. (Discussion and possible action)

Items 46 and 47 taken up together
Cobos – November 22 FERC deficiency letter requesting more information on MISO’s RDBC filing
Cobos – Filed a response Arkansas jointly filed concern about MISO’s opt-out proposal and their advanced fixed resource adequacy plan
Cobos – Do not oppose establishment of a Reliability Demand Base Curve; concerned about increased costs
Cobos – Recommend more flexibility for those to meet their reserve requirements
Cobos – Now will wait for FERC to come back to make a decision

Item 48. Project No. 41210 – Information Related to the Southwest Power Pool Regional State Committee. (Discussion and possible action)

Cobos – SPP endured a cold weather event this week; they were prepared and did not experience any issues
Cobos – Peak demand was 46.5k shy of their all-time peak; importing 7k MW from neighbors ERCOT and MISO which, in my opinion, kept them out of emergency operations
Glotfelty – Thermal fleet forced outage rate?
- Might have been high based on their preliminary outlook
Glotfelty – Having ability to lean on neighbors if all part of the same regulatory system is perfect; our DC ties are very small; I don’t think there’s a DC tie from MISO to SPP at all.
Glotfelty and Cobos discussed MISO and SWPP ties

Item 50. Discussion and possible action regarding implementation of state and federal legislation affecting electricity markets including current and projected rulemakings and other projects, comments to other state and federal agencies and Commission priorities.

Not discussed

Item 51. Project No. 55156 – Implementation Activities 88th Legislature (R.S.) (Discussion and possible action)

Not discussed

Item 52. Project No. 56060 – CY 2024 Rulemaking Calendar. (Discussion and possible action).

Not discussed

Item 53. 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.

Thomas Gleeson, ED PUC – At last open meeting we talked about Texas Backup Power Package Advisory Committee
Members: Sens. Johnson and Middleton, Reps. Hernandez and Jay Dean, TDEM Nim Kidd, Knippa HHSC, Alison Silverstein from Silverstein Consulting, Matthew Baum ED Texas Advanced Business Alliance
Next public meeting February 1 at 8 am

Item 54. Discussion and possible action regarding customer service issues, including but not limited to correspondence and complaint issues.

Not discussed

Item 55. Discussion and possible action on infrastructure reliability, emergency management, and homeland security.

Not discussed

Adjourned