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The Public Utility Commission met on March 10 to take up a standard agenda and also discuss RUC policies with the Electric Reliability Council of Texas (ERCOT) and the ERCOT Independent Market Monitor. A link to the video and agenda can be found here.

Items 3, 5, 17, 18, 20, 21, 23, 24, and 27 were consented to without discussion and items 6, 7, 8, 9, 10, 11, 12, 13, 14, 16, 22, 25, 28, 30, and 31 were not discussed.

 

This report is intended to give you an overview and highlight of the discussions on 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 1 – Docket No. 47775 – Notice of Violation by the City of Bartlett of PURA §§ 39.151(d) and (j), Related to Market Structure; 16 TAC § 25.503(f)(2), Related to Oversight of Wholesale Participants, and ERCOT Nodal Operating Guide § 1.4, Relating to Transmission Operator. (Final Order) David Hrncir

  • Staff – Proposal filed in January; staff offers memoranda for the proposal for decision
  • McAdams – Clear cut application of infraction on ERCOT protocols; PFD is a bridge action of the committee
  • Looking at a $25,000 daily violation after notice is distributed; city should see this as a reason to get right with the law especially after winter storm Uri
  • Glotfelty – In agreement with McAdams; this case has been a problem for a while, and it is not just an oversight
  • Cobos – This case has been on the books for 9 years; I agree with the penalty of $25,000
  • Glotfelty – Is the 12-month statute in place for a company to come fully into compliance; is there a way to make it sooner since it has been so long
    • Staff – If you wanted to make it sooner you would have to change the PFD
  • Glotfelty – Not comfortable with the 12-month policy; I would change the PFD to 6 months
  • Cobos – Would be comfortable with 90 days
  • Lake – Need to be mindful of the other side; in the spirt of meeting in the middle because we don’t want to abandon the municipal utilities
  • McAdams – Would like to see collaborations with our organizations; I see your point Glotfelty, and I would be comfortable with 6 months and prepare for load shedding practices
  • Glotfelty – Propose a 6-month timeline with and interim at 3 months to receive an update; if they decide to become a TO, we can extend this timeline
  • Motion to adopt Glotfelty and Staff amendments
  • Motion passes

 

 

 Item 2 – Docket No. 51912 – Application of AEP Texas Inc. to Amend its Certificate of Convenience and Necessity for the Angstrom-to-Grissom Double-Circuit 345-kV Transmission Line in Bee, Refugio, and San Patricio Counties. (Final Order) David Hrncir

  • Staff – PFD corrections were filed; commission has grated oral argument on this
  • Lake – Oral argument is granted because line G was proposed, and stakeholders have not had a chance to comment; given this time but need to make a critical decision today
  • 2 commissioners favor line L and Glotfelty favors line G; Any oral arguments are limited to discussion of line G
  • Glotfelty – Have seen error in my ways; line G will create a reliability problem and I withdraw my support for route G
  • McAdams – Propose the removal of line G to look at the original map; commission agrees
  • Lake – Because route G is out of consideration there is no need for oral argument
  • Attorney for Property Owner affected by route L- L has not been discussed and has harsh effects on property owners
    • McAdams – Your testimony last time was very impactful to me; I was looking at L as the most cost-effective solution, but I now see how much bifurcation it causes
  • McAdams – Would like to point out that route N is a viable option; it is $1.4 million more than route L but it avoids the bifurcation of a lot of properties
  • Cobos – Was in a similar situation to McAdams last meeting but I went back and reviewed the map; I support M because it crosses into 1 property and is cheaper than N that crosses into 2 properties
  • Glotfelty – I tend to favor M; This is a hard decision, but some bifurcation is inevitable
  • Lake – Motion for a good cause exception, and a modification to the PFD for facilities to be established across route M
  • Motion passes

 

Item 4 – Docket No. 52397 – Application of Southwestern Electric Power Company to Implement a Net Interim Fuel Surcharge. (Final Order) David Hrncir

  • Staff – Client made no changes to PFD except for changes to rate cases
  • Lake – Have had conversations about interest rates; what an average cost of capital is not the right way to approach this because there is no equity involved
  • Mirroring the interest rates for the $5 million bond they received last year; I believe it was 1.65% interest
  • Glotfelty – We discussed a 1.2% interest, but I would support a 1.65% interest rate for 5 years; mitigates the impact on consumers
  • McAdams – I think this builds good consistency and I support interest rate
  • Lake – Motion to adopt PFD with changes to a 1.6% interest rate on a 5-year period
  • Motion passes

 

Item 15 – Discussion and possible action on electric reliability; electric market development; power-to-choose website; ERCOT oversight; transmission planning, construction, and cost recovery in areas outside of ERCOT; and electric reliability standards and organizations arising under federal law.

  • McAdams – Want ERCOT, IMM and PUC to discuss RUC policy consistent with changes that have occurred during the phase I reliability; this was a discussion yesterday at the legislature
  • Invites Carrie Bivens from IMM and Kenan Ogelman from ERCOT to discuss policy framework on RUCs, ancillary services, and ORDC
  • Carrie Bivens, IMM – ERCOT is procuring additional ancillary services; 6500 MW on the daily and high-risk days an additional 1000 MW
  • Bringing on more generation earlier in the timeline by RUC decisions being made earlier in the day; normally 6 hours prior (now notice them 12 hrs in advance)
  • More conservative forecasting; instead of choosing the most accurate predictions looking at the high loads and low wind situations just in case. Using 6500-7500 as a benchmark for whether more will be needed in the future.
  • Lake – Would we have 6500 MW of dispatchable in reserve, but the formula used to calculate the reserves would show 5000 MW because the non-controllable loads are not in the question
    • Bivens – Yes that is correct
  • Kenan – ERCOT isn’t waiting until EEAs declared to deploy these resources.
  • Bivens – problems with RUC pricing which went very high 2 weeks ago when there wasn’t much scarcity; IMM has filed an NPRR to address RUC problems
  • McAdams – If load recourses are accounted for in the 6500 MW, then there would be a need to RUC so much
  • Cobos – If ERCOT gets the NPRR through then the ancillary services would increase and mitigate the need for RUC
    • Bivens – It will not go away completely but yes
  • Cobos – Concern about conservative forecasts on market prices. Modified the ORDC changes in January; we need this to play out. Point of changes was operational reliability and reduction of RUCs.
  • Lake – I agree with the conservative planning but what happened in the end of February was not accurate and not conservative enough (colder than expected) and that’s why there was scarcity
  • Cobos – ORDC needed to function for intended purpose. That is why we raised the MCL from $2,000 to $3,000 and lowered price cap from $9,000 to 5,000; have a stronger price signal earier; we are in a conservative place with market reforms and need to evaluate a good minimum
  • Bivens – lowest Physical Responsive Capability was 3700MW and prices were $4000/MWh. Is that what (the Commission) wants
  • Glotfelty – Is there responsibility on the load side – that they aren’t more actively involved in market? Just asking
    • Kenan Ogelman, ERCOT – load pursuing incentives before them. Comparing early vs late Feb event, load doesn’t know how it will play out; intermittent production can be low, and it can be colder than expected but I think they are responding logically
  • Glotfelty – Load may react differently now that $4000 price incurred. Generation and load have a responsibility for their customers, and they are both involved in this issue; We also need to discuss when renewables go offline like low wind and high thermal unplanned outages. Impact both day ahead and real time market.
  • McAdams – Agrees with Glotfelty; Our job is risk management. Legislature was happy with our work yesterday, calming the public. What I would like to know is what resources we can harness and sync up.
  • Lake – Would like to see you dig into the demand response locked into EEA; on deployment and access to those 1500 MW
  • Cobos – request update from Jeff Billow of ERCOT about survey results (filed), what numbers really mean
  • 500MW of those are black start units so not available; cannot double-dip between black start and backup fuel service (McAdams – Black start has other requirements)
  • Commission discusses how MW could be split between firm fuel and black start storage; don’t want to pay for 1500 MW for both. Cobos – not all generation owners will bid into the program
  • Billow – Info separated into 3 buckets;
    • Resources that have dual fuel capability (switch to fuel oil), question about whether tanks are full but have ability to fill (ERCOT cannot tell), 4400MW of generation that could run for 72 hours with dual fuel, 3900MW for 96 hours. He says most of those have had fuel onsite this past winter
    • Infrastructure that was in place but was in disrepair (18 resources at 6 plant sites), some thought the infrastructure could be brought back up, would not count on any of it, and
    • Resources with stored natural gas onsite (2 facilities for 2 QSEs) – or own the pipe and contract for offsite storage, cannot run both plant sites at full output – one full and one zero of two partial. Total of 550 MWs.
  • Glotfelty and Lake – need to be careful that generator doesn’t own a small share in a pipeline or storage facility and qualifies – or sells off its capacity but owns the entire thing.

 

Item 19 – Docket No. 51091; SOAH Docket No. 473-21-0246.WS – Complaint of Certain Members of Rio Ancho Homeowners Association and David and Doreen Myers Against Aqua Texas, Inc. (Final Order) Lorenzo Garcia

  • Staff – Rio Ancho HOA complaint against Aqua Texas
  • Lake – Presents a unique water usage issue not addressed by us or TCEQ yet; want time to consider this fully and think it should be postponed to next meeting
  • McAdams – would like to create a solid doctrine; commission all agrees they would appreciate extra time
  • Item tabled

 

Item 29 – 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

  • Staff – Rachel Robles, director of legal division, has resigned; want to take time to publicly recognize her for service
  • Lake – Last 12 months have ben tumultuous and Rachel’s leadership was essential to our success; commission agrees and shares appreciation
  • Staff – Construction update with a new dais that will accommodate 5 commissioners without having to turn heads; will be done by the end of this month

 

Item 32: Commission enters closed executive session

  • No action taken from discussion in closed session