The Public Utility Commission held a meeting on March 21 to discuss a number of items including the proposed rules for the Performance Credit Mechanism, the Texas Energy Fund Completion Grant Program, and the Texas Energy Fund In-ERCOT Loan Program. An archive for this 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.
Items to be taken up without discussion: 1, 2, 3, 4, 8, 12, 13, and 15.
Opening Comments
- Chair Gleeson – Is recused from items 1, 2, 4 ,10, 12
Item 1: Docket No. 50788; SOAH Docket No. 473-20-4071.WS – Ratepayers Appeal of the Decision by Windermere Oaks Water Supply Corporation to Change Water and Sewer Rates. (Final Order)
- Consented
Item 2: Docket No. 54430 – Application of SJWTX, Inc. dba The Texas Water Company for System Improvement Charges. (Final Order)
- Consented
Item 3: Docket No. 54773 – Caddo Creek Farms LLC’s Appeal of the Cost of Obtaining Service from Brashear Water Supply Corporation. (Preliminary Order)
- Consented
Item 4: Docket No. 55585 – Application of Texas Water Utilities, LP to Amend Its System Improvement Charges. (Final Order)
- Consented
Item 8: Docket No. 54142; SOAH Docket No. 473-23-03500 – Application of El Paso Electric Company for Authority to Reconcile Fuel Costs. (Final Order)
- Consented
Item 12: Docket No. 55303 – Application of Constellation South Texas LLC for Review of the Cost of Decommissioning Units 1 and 2 of the South Texas Project. (Final Order)
- Consented
Item 13: Docket No. 55573; SOAH Docket No. 473-24-02678 -Joint Application of AEP Texas Inc. and Electric Transmission Texas, LLC to Amend Their Certificates of Convenience and Necessity for the Ajo-to-Reforzar Double-Circuit 345-kV Transmission Line in Brooks, Kenedy and Kleberg Counties. (Final Order)
- Consented
Item 15: Docket No. 56045 – Complaint of Valero Refining-Texas, LP Against Texas-New Mexico Power Company. (Preliminary Order)
- Consented
- Staff filed a petition to appoint a temp manager to the utility; commission considered a meeting of merits on this
The general meeting recessed to hold a separate hearing on this item
Christina Denmark, Administrative Law Judge
- To affirm, modify, or set aside the emergency order which appointed Central States Water Resources-Texas Utility Operating Company, LLC (CSWR) as temporary manager to Blue Cereus
- Had a prehearing conference on this item
PUC Commission Staff
- Request approval of the appointment of CSWR as the temporary manager of Blue Cereus for no longer than 316 days
- Utility did not secure a water purchase contract for either public water system under their CCN despite a TCRQ order to do so
- This has resulted in disputes with this commission and district court; the utility also has delinquent bills
Attorney for Blue Cereus LLC
- Do not need a temporary manager or an emergency temporary manager
- The PUC has failed to prove there was abandonment by the utility
- Wholesaler is the one who is creating this issue; have repudiated their settlement agreement, they are the one saying there is no contract/agreement here
Robert B Ferguson, San Pedro Water Resources Joint Venture Manager – Witness
Dina Robinson Ferguson, Seguro Water Company – Witness
Jimmy Allen Hall, Blue Cereus – Witness
- The following notes were taken as a result from questioning of the witnesses between PUC Commission Staff and Blue Cereus’ Attorney
- Water system serves San Pedro Village; Blue Cereus is the only client; is a joint venture with Seguro Water Company
- No current written contract with Blue Cereus; original contract was 2009-2014
- There is a difference in rates between previous contracts; could not come to agreement in written contract, so it was terminated
- Blue Cereus has not followed through with past due balances; STM was never completed and never submitted a draft STM for review
- After written contract expired, San Pedro continued to provide water for Blue Cereus LLC for the customers under their jurisdiction
- Is a disagreement between parties whether the mediated settlement agreement is void or not
- Chair Gleeson – Any chance of movement on the draft STM?
- Is not agreement among the witnesses
- Ferguson – If a temporary manager is appointed, does this preclude re-negotiation?
- Chair Gleeson – Do not believe so
- Glotfelty – What is the reason for the temporary manager?
- Hall – From the other witnesses threatening to shut off the water, and that is what started this case with the PUC
- Glotfelty – If you are the CCN owner, do you not have the obligation to provide this service?
- Yes, but had an agreement with the San Pedro and Seguro to provide that service
- Closing arguments presented by the PUC Staff and Cereus Counsel
PUC General Meeting Reconvenes
- Cobos – Our focus is on the statutory language in the water code and whether the commission appropriately appointed a manager; believe they did as there was abandonment of service
- Glotfelty and Jackson – Agree
- Glotfelty – A way to ensure duplicate bills to customers do not get sent? Can we not address this in this order?
- PUC Staff – Believe that is covered in our order
- Chair Gleeson – If CSWR is interested
- Motion to approve the emergency order; motion passes
Item 6: Docket No. 50239; SOAH Docket No. 473-20-3261.WS – Application of Blue Cereus, LLC for Authority to Change Rates. (Discussion and possible action)
- Not discussed
Item 7: Docket No. 56252 – Petition to Appoint a Temporary Manager for Marion J. Smith dba Smith Management Services. (Order on Temporary Manager)
- PUC Staff did not have any comment on this item
- Chair Gleeson – Utility has abandoned service; South Plains as temporary manager indefinitely going forward; compensation rate should be set as $12 per connection per month; waive of the temporary manager’s requirement to post financial assurance
- Chair Gleeson – Commission should tell ODPM to draft a motion to the according order
- South Plains appointed as temporary manager indefinitely; motion passes
Item 9: Docket No. 54142; SOAH Docket No. 473-23-03500 – Application of El Paso Electric Company for Authority to Reconcile Fuel Costs. (Final Order)
- SOAH reached the correct decision, believes El Paso should be denied
- Glotfelty – agrees it is not a fuel expense but close, but supportive this is not the right place for this and wants to note there are challenges
- Adopted PFD and approved proposed order and stipulation of parties
- Motion for Final Order to incorporate all decisions in this proceeding; motion passes
Item 11: 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. (Extension of Time for Motion for Rehearing)
- Motion to approve application; motion passes
Item 14: 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. A842. (Final Order)
- Agrees with PFD on jurisdiction issue
- Findings of Fact 25-27 and conclusions of law 7&8 deleted
- Adopted in part and move forward with final; motion passes
Item 10: 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. (Extension of Time for Motion for Rehearing)
- Motion to approve extension of time approved; motion passes
Item 16: Public comment for matters under the Commission’s jurisdiction but not specifically posted on this agenda.
- No public comment
Item 17: Project No. 53924 – Water and Sewer Utility Rates after Acquisition. (Proposal for Adoption)
- At deadline, hoping for resolution so they don’t have to restart process
- Staff attempted to adopt streamline process
- Notes facts and circumstances is not limiting
- Don’t want to see affiliates moving all rates to higher rate without justification so not about extremes but issues in middle
- Provided as much guidance as possible in this docket
- Thanks were offered for everyone’s contributions and feedback
- Staff requested notification of them if a workshop is needed after; motion passes
- Will come back to this to clarify motion
Item 18: 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 19: 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 20: Project No. 55999 – Reports of the Electric Reliability Council of Texas. (Discussion and possible action)
Woody Rickerson, ERCOT
- Update on IRLs
- One for Export from South to North
- Would occur during peak conditions so load shed plan would be system wide, would need to shed load before overload occurs
- Resource adequacy, limit flow out of south and around sunset
- Strong wind conditions on coast and not in West would make it worse
- Summer peak type loads
- Other one is import from Noth to South, into the valley
- Would occur high load and probably during low wind day
- A load shed that would be shared among south
- Short term, midterm and long-term solutions are in the report
- Glotfelty – could limit south generating in North when there is a high load in the North?
- Talking about scarcity, peak conditions
- Under peak conditions, anytime load North of constraint exceeds generation will have this issue
- During day during plenty of solar is not a problem, but when sun goes down will occur
- This is subset of conditions, it’s a resource adequacy issue north of the constraint
- Glotfelty – feels like ERCOT telling generator they can’t sell in north, it’s unfortunate to curb excess generation because they have not planned well
- Glotfelty – did they anticipate this happening in planning process
- Should have seen this in 2018, went back to look at 2018 studies
- Load growth North of constraint exceed growth than they forecasted, and had Frontera Plant switch into the system which has 500 MW south of the constraint
- 6400 MW of dispatchable generation retired
- Somewhere between 4-5 MW that came online in the South rapidly
- All of these things means process in 2018 does not meet needs today
- Three parts to system planning, generation, transmission and load
- Transmission connects generation to load
- Now see plants built in 2-3 years, generation shows up more quickly
- Load also shows up more quickly than before
- But transmission is still a 3-5 year process, so need to address this
- Exploring new tools with vendors
- May need generation hubs, expanding planning guides
- On load side, already bringing in more
- RPT case will have 50% more load in it than last year
- Allowing officers to give letters to say load amounts that should be considered
- Trying to get ahead of load showing up in anticipated locations
- Generation – refers to San Antonio export project, working to put project for next IRL so they don’t find themselves in similar situation in the future
- Glotfelty – cost of GTCs? Is it calculatable?
- Don’t have numbers calculated
- Can look at what happened last summer, but what has changed is load growth
- This summer will have more load in the North than last year
- Glotfelty – are there storage solutions that could happen?
- Export constraint could be more like 1-2 hours
- Anything they can do to add generation in the North or decrease load and increase transfer capability is helpful
- Glotfelty – is charging storage as load, would that be helpful
- Valley exporting South to North example, if batteries North of constraint would discharge would solve the problem so yes it would be helpful
- Cobos – Thinks what is going on in Valley is transmission issue along with load growth
- Sees some things addressing load growth in Valley and implementing HB 1566 will help accelerating transmission
- Thinks legislation will help identify projects more proactively
- CCN process got shortened in bill so that will help PUC speed the issue along
- Thinks load will continue to grow in South Texas, need to say vigilant to identify project
- Cobos – There are many actions that have and will be taken to help accelerate transmission build out and help with resource adequacy measures
- Cobos – would like to see any kind of strategic assistance provided in this process
- Cobos – would like legislative guidance on ERCOTs authority to require Crypto Miners to get off the system during certain times, would also like to see near term solutions to help mitigate this issue
- Jackson – process not only impacts Valley but gives opportunities to look at across the state how overall transmission can be addressed
- Jackson – in notice appreciated process ERCOT went through, including explaining how we got here and what can be done in the short term
- Jackson – ERCOT is obviously doing more work and thoughtful deliberation, appreciates it
Item 21: Project No. 54445 – Review of Protocols Adopted by the Independent Organization. (Discussion and possible action)
- Not discussed
Item 22: Project No. 54584 – Reliability Standard for the ERCOT Market. (Discussion and possible action)
- Not discussed
Item 23: Project No. 55000 – Performance Credit Mechanism (PCM). (Discussion and possible action)
- PUC Staff – summarized, they looked over 37 perimeters and agree with absolute cost cap and how to do net compliance
- PUC Staff – certain design elements that affect modeling should be prioritized
- PUC Staff – on item 37 for market power mitigation, thinks IMM providing input on what they think is valuable concerning market power litigation rules
- Chair Gleeson – should discuss if there are any preliminary thoughts
- Glotfelty – what are outliers they can get rid of, what is high and low that makes sense so do they need to be bound by 12 months or 4 seasons or could there be a PCM done daily
- Chair Gleeson – one billion is net cap
- Cobos – Should four seasons be the baseline? What about two seasons – winter and summer?
- Cobos – Also should not be splitting the year wholly between winter and summer, should be those specific winter/summer months
- Cobos – NEW SOMETHING NEW
- Cobos – Whole point of PCM is to avoid EEA, do not know why we need EEA metrics?
- Cobos – Forced outages based on some metric; peak net load; want to see scenarios run on peak net load especially with solar ramp downs/up
- Cobos – Concerning the options with hours with lower ORDC, not sure if that needs to be evaluated
- Cobos – About the PC generation duration-based cap; not sure what that means, read a footnote about four-hour duration batteries, but would like some clarity on that
- Cobos – PC generation based one loss of load event; impact of the $1b hard cap on this parameter?
- Cobos – Why is net cone determination being done post? Impacts on max annualized price?
- Cobos – Default framework is based on gross peak load, but should be focused on net peak load
- Cobos – PCM model compared to energy only market; modelling the system to 2026, want to be sure; how many MWs removed from the system to meet equilibrium? Will they be factoring in DRS, new generation resources, etc.
- Cobos – Base case of this analysis, want to understand what assumptions are being made; need to start at a point truly reflective of 2026
- Jackson – Want to identify what brings the most value; need to be flexible and simple is better; this will be self-correcting over time
- Jackson – Real time co-optimization is priority number one, and are doing this to meet reliability standard needs
- Chair Gleeson – Good with the prioritizes as presented; would add some additional meetings to get commissioners comments on the April 4 filing
- PUC Staff – Five bullet points at the end of staff’s memo are agreed upon and that IMM file a set of default mitigation measures before next meeting?
- Chair Gleeson – Yes
- Glotfelty – Would like to think about the number of seasons, not just bound by traditional seasons; would like you to run an analysis on this in the future
Item 24: Project No. 55837 – Review of Value of Lost Load in the ERCOT Market. (Discussion and possible action)
Ryan King, ERCOT
- Overviews outreach/work plan; will be a soft launch March 26 of the VOLL study sent out to commercial/residential customers; official launch is April 9 to a larger cohort of customers
- April 16 if needed for another cohort, will be included in another send out
- Survey will be open until May 17
- Chair Gleeson – Would like to be apprised of any complaints
Item 26: Project No. 55826 – Texas Energy Fund In-ERCOT Generation Loan Program. (Proposal for Adoption)
- PUC Staff – Proposed order will establish the TEF Loan Program; made some small changes to the rule and filed a revised adoption order on March 19; made one more small change in the notice of intent
- PUC Staff – Are many who contributed to the creation of this rule: staff and our contractor
- PUC Staff – Recommends adoption of this rule
- Chair Gleeson – File a memo; should change PAF POF percentages concerning performance from 90 to 85 and from 10 to 15
- Jackson, Glotfelty and Cobos – Agree with the changes proposed in the chair’s memo
- Chair Gleeson – Received two letters from Sen. Schwertner and House/Senate members with input on this process
- Chair Gleeson – One issues with this project is senior debt; even though bill says state should be the senior debt, are thoughts on allowing other senior debt
- PUC Staff – sharing co senior status could impair the PUC from recovering funds; state debt needs to remain the senior debt
- Commissioners – Agree with staff
- Chair Gleeson – Concerning new interconnection at existing site; will allow for this type of project?
- PUC Staff – Is an issue with timing of borrower getting deposit back; bill makes a distinction between new debt and upgrades; do not want to exclude them, you will be treated differently if you are required to add a new point of interconnection for reliability purposes
- Chair Gleeson – Rule proposes switchable units are prohibited from participating in this program?
- PUC Staff – Yes; language is not specifically in the bill; want 100% of the capacity dedicated to the ERCOT market; serves the intent of the statute; have been working with the legislature to ensure better outcomes in the future
- PUC Staff – Would be very difficult to set up switchable to succeed in this program/meet the performance standard; would be setting entities up for default
- PUC Staff – The legislation allows for us to consider anything that would be a reasonable consideration
- Chair Gleeson – Thought about valuing switchable lower or giving them lower priority; this needs to be for resources that are going to fully serve ERCOT
- Glotfelty – The same argument goes to the program outside of ERCOT; allowing would erode legislative intent
- Cobos – The early completion bonus rule does not make this inside/outside of ERCOT distinction
- Cobos – Agree need to focus on units available to ERCOT 100% of the time
- Jackson – Agree; there will be programs available for those outside of ERCOT and the Bonus Program
- Glotfelty – Have two statements; facilities generating at industrial facilities would not be eligible for this; optionality is a key for these plants; encourage us to be open about this discussion in the future
- Chair Gleeson – This is more likely to occur; we have had a hard time working this in; agree next session we should talk to the legislature/industrials about this
- Glotfelty – Know there is a nuclear plant that could be built on the coast; have used them as an example
- Glotfelty – Secondly, were comments submitted from USA Compression concerning ADER; if there are aggregated facilities that aggregate 100 MW or more, would they be eligible
- Glotfelty – Could maybe consider that in the future; do not see an option for them in this program
- Chair Gleeson – Agree this could be beneficial, but not right for this program
- Jackson – Performance criteria under this program is a new approach; thanks staff for their work
- Glotfelty – Will need to monitor to see if this is going to be in the timeline the legislature is wanting
- Chair Gleeson – Yes, with the upcoming session, will be able to see if the legislature needs to make changes to address any building lag
- Cobos – Thanks staff for their work
- Motion to approve proposed order as amended by Gleeson’s memo; motion passed
Item 25: Project No. 55812 – Texas Energy Fund Completion Bonus Grant Program. (Discussion and possible action)
- Chair Gleeson – Switchables allowed in this program? Thoughts on participation?
- PUC Staff – Staff is working on recommendation for next meeting; not the same parameters as the Loan Program
- PUC Staff – Are looking at the 100 tightest hours; funds are not given up front; could allow a policy preference for entities like switchable
- Chair Gleeson – Agree with your interpretation
- Jackson and Glotfelty – Agree
- PUC Staff – This rule has been published with idea that switchables be not included; have been approached by switchables who would be interested in this grant
Item 27: Project No. 37344 – Information Related to the Entergy Regional State Committee. (Discussion and possible action)
- Not discussed
Item 28: Project No. 41211 – Information Related to the Organization of MISO States. (Discussion and possible action)
- Not discussed
Item 29: Project No. 41210 – Information Related to the Southwest Power Pool Regional State Committee. (Discussion and possible action)
- Not discussed
Item 30: Project No. 55421 – Texas Advanced Nuclear Reactor Working Group. (Discussion and possible action)
- Not discussed
Item 31: Project No. 51879 – Information Related to the Western Energy Imbalance Market. (Discussion and possible action)
- Not discussed
Item 32: Discussion and possible action on electric reliability; electric market development; powerto-choose website; ERCOT oversight; transmission planning, construction, and cost recovery; and electric reliability standards and organizations arising under federal law.
Woody Rickerson, ERCOT
- Will be a total eclipse on April 8; will occur from 12:10 PM and 3:10 PM
- Overall solar output could be around 7% at peak eclipse
- Will pre-posture the system to meet the down ramp and the up ramp
- 11 days before the eclipse will send out our first market notice
- 1 day before prior to de-RUC; will determine what is needed
- Day of the eclipse two hours before will assess forecast performance
- Do not expect there to be any reliability problems
- Glotfelty – Texas A&M did a model on how the eclipse will affect the system; is a good resource
Item 33: 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 34: Project No. 52761 – Statements Regarding Internal Management of the Public Utility Commission. (Discussion and possible action)
- Not discussed
Item 35: Project No. 55156 – Implementation Activities 88th Legislature (R.S.) (Discussion and possible action)
- Legislative tracker/implementation tracker is live on our website; includes links to relevant projects; will be updated periodically
Item 36: Project No. 56060 – CY 2024 Rulemaking Calendar. (Discussion and possible action).
- Not discussed
Item 37: 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.
Connie Corona, Interim ED PUC
- Have extended our service hours; makes staff announcements
Item 38: Discussion and possible action regarding customer service issues, including but not limited to correspondence and complaint issues.
- Not discussed
Item 39: Discussion and possible action on infrastructure reliability, emergency management, and homeland security.
- Not discussed
Item 40: Adjournment for closed session
- Commissioners did not meet in closed session
Adjourned