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The Public Utility Commission met on May 12 to discuss routine business such as the approval of CNNs and to review emergency requests for temporary utility appointments. The commission also reviewed their wholesale electric market plan and offered guidance to ERCOT on their newly proposed rules. A link to the hearing can be found here.

 

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.

 

Agenda items 3-9, 21, and 37 were consented to and items 12, 13, 18, 25, 26, 29, 30, 32, 33, 35, 36, 38 and 40-43 were not discussed.

 

Item 2: Docket No. 48571; SOAH Docket No. 473-21-1203.WS – Application of the City of San Marcos to Amend a Sewer Certificate of Convenience and Necessity in Hays, Guadalupe, Comal, and Caldwell Counties. (Final Order) Ariadna Garcia

  • Staff – PFT was changed in April and staff provided a memo with proposed changes alongside it
  • Glotfelty – San Marcus is overreaching here; land area where they want CCNs have not shown need for them
  • Fearful approving these CCNs we open the door for exhortation; we have been following the precedent that CCN territories must show request for it, and we need to stick with that
  • Cobos – Have filed sufficient evidence to show CCN need in around 9,000 acres; I would adopt the PFT in part by amending the request to only approve the 9,000 acres that show need
  • McAdams – I agree with colleagues; I like what we did with the Dos Aquas case to approve the number of requests that have been spoken to
  • Glotfelty – The capital market plan does not include this; there is no money to support this project for at least the next 5 years
  • Staff – Understand planning these systems is a long process but we need to focus on how these projects will be serving citizens in the near future
  • Motion to adopt PFT in part with Cobos amendment; motion passes

 

Item 10: Docket No. 53356 – Request for an Emergency Order Appointing a Temporary Manager for Villa Utilities, Reed Estates Water System, Vista Utilities, and J & L Terry Lane Without a Hearing. (Order Appointing a Temporary Manager) Cheri Hasz

  • Staff – Purpose to affirm, modify or deny this order; held prehearing conference yesterday and found 11 modifications
  • McAdams – Staff has showed that these cases have been abandoned
  • Think temporary management should be enacted, $12 per water connection, 180-day temporary term
  • Motion made; motion passes

 

 

Item 11: Docket No. 53500 – Request for an Emergency Order Appointing a Temporary Manager for Marion J. Smith DBA Smith Management Services Without a Hearing. (Order Appointing a Temporary Manager) Grace Lager

  • Staff – Purpose to affirm, modify or deny the order on the docket; Admitted 2 exhibits yesterday in prehearing conference
  • Cobos – Affirm the emergency order, $12 per connection per month, 180-day temporary term
  • Motion to approve motion passes

 

Item 14: Docket No. 48745; SOAH Docket No. 473-19-1841 – Compliance Filing of Entergy Texas, Inc. Relating to Participation in Smart Meter Texas and Change to Its Advanced Metering System. (Discussion and possible action) Grace Lager

  • Cobos – Thank Entergy Texas for giving updates in respect to the web portal requirements
  • They are in the middle of a settlement; I cannot set a hard deadline, but I hope they reach agreement which will bring this rule to a close
  • McAdams – What are the outstanding issues?
    • Terms, conditions, and protocols

 

Item 15: Docket No. 51802; SOAH Docket No. 473-21-1892 – Application of Southwestern Public Service Company for Authority to Change Rates. (Final Order) Austin Spraet

  • Staff – Request for a rate change; staff filed memo with proposed changes
  • McAdams – I agree with the settlement; fuel formula under our protocols is a separate proceeding
  • Proposed order should clarify the tariff effective date is that of the final order
  • Staff – Ask the commission to rule that the fuel formula is a rate and therefore eligible for rate changes
    • Commission agrees; rate proceeding procedures will be fleshed out later
  • Motion to adopt; motion passes

 

Item 16: Docket No. 52154 – Complaint of MKRR Investments LLC Against Constellation NewEnergy, Inc. (Final Order) Grace Lager

  • Staff – Think there is a deeper issue that needs to be looked into; should not be discussed today
  • How does our debt obligation issue and recovery might impact this docket?
  • Would like authority to release a briefing order
  • Cobos – Received similar for consumers who filed complaints about overcharging; briefing order will address these issues good while we wait to decide

 

Item 17: Project No. 52266 – Review of Summer 2021 ERCOT Market Performance. (Discussion and possible action)

  • Staff – Asked for extension waiver to allow more transparent process on generator outages
  • Motion to adopt; motion passes

 

 

Item 19: Project No. 52313 – Review of Statutory Definitions. (Proposal for Adoption) David Smeltzer and Iliana De La Fuente

  • Staff – Proposed order to adopt two rules
  • Motion to approve, motion passes

 

Item 20: Docket No. 52656; SOAH Docket No. 473-22-0493 – Application of AEP Texas Inc. to Amend Its Certificate of Convenience and Necessity for the Angstrom to Naismith Double-Circuit 345-kV Transmission Line in San Patricio County. (Final Order) David Hrncir

  • Staff – Recommend using modified line 16M
  • Lake – Always difficult cases but we have a good head start

 

Oral Argument

 

Patrick Resnick, Self

  • As landowners in this area, we know this substantial need; we analyzed crossing pipelines
  • Support 16M which lowered costs by $80,000; only issue will be monopoles on 10 of fewer landowners
  • AEP thinks neighbors might take issue with having a large structure over a monopole compared to neighbors; ask commission to approve select lands to provide landowners with monopoles

 

Scott Roots, Self

  • Speaking against route track 16M; Link AJ goes across 400 acres of my land
  • This will bisect land, affect my farming, and land value; farming around these structures will cause water retention, weeds, and other complications
  • I am asking for the use of monopoles to minimize the damage done to my line; also ask to run the line straight through my land and not perpendicular like proposed

 

Beth Priday, Self

  • Advocate for the use of monopoles; AEP’s route affects my family property and will stop us from feeding out livestock properly
  • AEP can use monopole structures alongside steel latus structures; latus structures are prone to collapse in an area that experiences strong winds and hurricane which is unsafe

 

Carrie McGrath, AEP Texas

  • Chose latus structures because steel is less expensive than monopoles
  • We are concerned that selective monopole use will cause anger among landowners who did not ask for monopoles and have latus structures
  • The switching of this method also raises concerns about switching crews
  • If the commission wants monopoles, we should make it all standard; unfortunately, this is a 42% increase in price
  • McAdams – Is there any building timeline difference in monopole or latus use?
    • Not a difference; any steel is slow right now
  • Glotfelty – Have you looked at the difference in spun-concrete poles opposed to monopoles?
    • Have not
  • Newer in the coastal area that are less expensive than monopoles and resistant to harsh weathers
  • If I drive down the highway, every line I see has a different structure; don’t know why it is hard to collaborate with the landowners who have requested monopoles
  • McAdams – Our job to be responsive to landowners but we need to weigh reliability and cost
  • Cobos – We need this structure for reliability and increase in ERCOT energy use; latus towers are less costly because they use less steel, and we have to understand that with high steel process the cost could be more than $1.2 million increase
  • Lake – What is your interest in spun concrete?
    • Glotfelty – It should be an option; the cost of these structures should not be the only consideration
  • Lake – 42% cost increase causes me large concern especially for a small area
  • Glotfelty – The type of line heavily effects the farmers ability to do their job; need to have a bigger discussion about this
  • Cobos – Concerned about the precedent this sets; we are a growing state, and we cannot make monopole exceptions for every landowner who asks
  • Glotfelty – 42% increase is for the use of all monopoles not for the 3 mile stretch of monopoles
  • Cobos – Would monopoles reduce the right of way costs?
    • No, it will not

 

Kim Barts, Attorney for PUC

  • Reiterate the cost concerns for the use of monopoles, concerns about the difference in landowner treatment, and request that the records include more information about the necessity of monopoles if approved
  • McAdams – Important to have consistency, remain on time, and on budget; would support the consensus of staff and the use of only latus structures
  • Lake – Would welcome a more robust conversation about the use of monopoles and new alternatives to monopoles and latus structures

 

Final Comments

  • This commission has taken oral argument and delayed the vote for commission reflection; I am happy to do this, but I would like to move forward today if possible
    • Commission agrees to move forward today
  • Motion to approve route 16M without the use of monopoles; motion passes

 

Item 22: Docket No. 53267 – Application of AEP Texas Inc. for Approval of a Wholesale Distribution Service Distributed Generation Energy Storage Tariff. (Discussion and possible action) Stephen Journeay

  • McAdams – Will impact a number of projects working through the PUC system right now; stake holders are in conversations about potential compromise right now
  • This rulemaking should be tabled in hopes for compromise; lot to consider that could aide stake holders and provide a firm interest in their non-negotiables for their framework
  • Glotfelty – Also think table it for 60 days
  • Lake – Hearing we want a consistent rule in the long-term but could take time to develop; in the meantime, abating these would give stakeholders time to make agreement
  • Staff – What will this mean for the 2 other cases on docket that we have?
  • Glotfelty – Call them back and abate them
  • McAdams – Might make it too easy to delay the creation of a framework
  • Cobos – Think we should move forward in parallel; abating all cases is too dangerous
  • Lake – I am hearing we rather have storage than uniformity right now; catch up on uniformity later

 

Item 23: Docket No. 52910 – Application of Entergy Texas, Inc. for a Consulting Fee Rider. (Final Order) Cheri Hasz

  • Staff – Filed memo with proposed changes to the order
  • Motion to approve; motion passes

 

Item 24: Project No. 52757 – Review of Chapter 25 – Rules Applicable to Electric Service Providers. (Proposal for Adoption) David Smeltzer and Iliana De La Fuente

  • Staff – Filed a memo that would readopt chapter 25
  • McAdams – Appreciate staff’s work
  • Motion; motion passes

 

Item 27: Project No. 52373 – Review of Wholesale Electric Market Design. (Discussion and possible action)

  • Cobos – Filed a memo, minimum offer cap of 3000 MWs for FFSS.
  • Bivens (IMM) – Was asked about the budget cap, competitive forces impacting the service. Cobos wanted to better understand the value. Because commissioners want a minimum offer level, it will allow you to control the amount and also allow you to procure more.  Offer cap procures more, budget cap allows you to control minimum.
  • McAdams – want a MW budget.  May overshoot but assures 3000 MWs.
  • Staff – Think offer cap ensures no offer is too low and a budget cap allows for a competitive market with opportunity to gain; the combination is the best option and will ensure 3,000 MW
  • Lake – This combination looks great to me; what is the 75%
    • If you wanted 4,000 MW and everyone offers the cap value, you will be able to give them 75% of their offer allowing for flexibility and incentive in the market
  • Bivens – If you want 4000 MWS, equals $72M.  If you cut it to 3000 MWs, you hit your budget number.
  • Lake – All in agreement with the offer and budget cap
  • McAdams – Should not be seen by stake holders as binding when we open this for the next phase and contracts
  • Cobos – I agree; commission is working on a list of standards, and we will be surveying for additional resources
  • Lake – Have to set it right and cannot rush it – a lot of complexity. Absolutely critical we get offsite natural gas transport included in these resources.
  • ERCOT – We believe we can move forward with an RFP and procurement at this time
  • Lake and Cobos clarify who can participate – dual fuel and those generators with owned pipeline and access to firm storage

 

Item 28: Project No. 52934 – Review of Rules Adopted by the Independent Organization. (Discussion and possible action)

  • Staff – Submitted an order that would approve 14 rules
  • Cobos – Speaking on rule 1096: Reliability is paramount and ERCOT’s actions on customers is a consideration. More costly to PUC.
  • ERCOT should be looking at all generation fleet and spread-out RUC evenly to avoid outages and costly consumer payments
  • Asking for an update from ERCOT on how they are trying to limit RUC; we need to understand when they are RUCing and how this affects consumer prices. Should spread out RUCs across generation fleet to reduce cost (not just high-priced old units). Wants a commitment from ERCOT that commission rule won’t create impetus to RUC same units. This is what ERCOT is already considering based on Cobos conversations with ERCOT. Wants to know when generators are incurring very high gas prices.
  • Glotfelty – Re: 1096 (sustained 2-hour capability).  We need these assets to be reliable.  With batteries, my hope is that in the future we can address these things. Important step on reliability; need to understand how ELCC will be calculated and readdress these standards in the future.
  • McAdams – Speaking on NPRR 1108 through the enactment of SB 3; invited EROCT to explain the NPRR. Hotly contesrted at ERCOT.  Extremely important policy enhancement. ERCOT, walk us through NPRR.  A lot of information filed.
  • ERCOT – Woody Rickerson – The cap is the heart of the NPRR and is a forecast of available capacity for the next 5 years; made public so resource owners can use it to schedule outages against that cap.
  • Most market participants think it is a good idea; before we scheduled outages randomly with no communication between the companies.  Were seeing most outages scheduled for April and October. Controversy is: what should the outage cap be?
  • McAdams – Paul Foster encouraged ERCOT staff to engage stakeholders in this topic. We are about to take up a weatherization rule in a mater of weeks that will stress our generators; we are shooting for 60 months but the first year is the main concern to us. Fear of delegating this issue to TAC. Walk me through your vision of the first year?
  • ERCOT – For the first year, the proposed cap has more hours of outages allowed; 15% margin that gives us more space and energy.  More outage allowed than previously taken.  Argument for this is that units are being RUC’d more.
  • We want generators to have time for maintenance; forced outages are the worst scenario, we need them planned
  • Cobos – Want to ensure solution isn’t worse than the problem; concern about if the generation community is nimble enough to handle outages and issues
  • ERCOT – The cap process has two pieces of short and long term; the 50-50 forecast and the wind solar forecast
  • Having a cap set at the right level will ensure there doesn’t need to be more outages
  • Lake – Defended conservative posture because 4 out of 5 times it is too conservative but that one time out of 5 it is not.  Had Sunday night event happened a couple of days earlier, ERCOT would have had a serious problem.
  • Cobos – discussion on MDR POC process. We can’t plan doctors’ appointments 5 years out, so I am concerned about planning that far forward. (2 hrs 37 min into hearing)
  • Glotfelty – How would you take in consideration for requested outages for co-gen facilities
    • They are not subject to ERCOT approval
  • Glotfelty – If you can schedule your outages for 5 years, does that block others from scheduling?  Woody – there’s nothing to prevent that first-in-time methodology.  Generators know their plants and know when to maintain – we will see more forced outages.
  • McAdams – In support of 1108
  • Cobos – I want to see the procedures written out in an OBR for staff, stakeholders and for this commission; need transparency.
    • We have filed the methodology paper; AAN process won’t work if it is overused
  • Important to take a recommendation to the board and the TAC
  • ERCOT – Have everything we need to give update in June
  • Motion to approve proposed order; motion approved

 

Item 31: Project No. 53403 – Review of Chapter 25.101. (Discussion and possible action) David Smeltzer

  • Staff – Filed a memo asking for guidance on this topic
  • Primary purpose is to adopt SB 1281; no statutory deadline but do not want to delay
  • Few items that commissioners wanted to add and need to be reviewed
  • Cobos – ERCOT transmission projects are of vital importance and effect reliability if not pushed forward
  • Would be helpful to have something in our rule that would allow specific criteria of ERCOT’s plans and transmission projects; wondering if ERCOT could just provide us with the 5 main factors that are reviewed, and we can begin asking question
  • Staff – Met with ERCOT and it is less criteria based and timelier and more situational; should bring this idea to them
  • Cobos – ERCOT will have to test and improve the grids resiliency; this language needs to be in our rule and how would reliability be defined in rule.
  • Glotfelty – I agree; transmission is hard to build and ERCOT will not move forward with other projects until we approve this
  • Resiliency component is a big issue for cities close to the Gulf of Mexico; hurricanes destroy the system, and we need to be evaluating how to fortify these projects
  • McAdams – Cobos are you intending to define resiliency in this rule?
    • Yes
  • It has been discussed at ERCOT that congestion might be a way to monitor resiliency, but I agree it should be defined
  • Cobos – I liked Glotfelty’s M-1-1 idea
  • McAdams – If the rule making gets bogged down with language; this path offers us the most flexibility

 

Item 34: Project No. 41210 – Information Related to the Southwest Power Pool Regional State Committee. (Discussion and possible action)

  • McAdams – Texas instructed council at FERC to provide with maximum visibility
  • M1C2 moved forward; cost allowance where small utilities are able to ignore allocated costs on interjected projects
  • Glotfelty – Good to participate in M22
  • McAdams – Interesting condition for DER resources are not counted to overall capacity accreditation
  • Glotfelty – Distribution is normally state power, but these facilities are playing at wholesale markets which is FERC jurisdiction; Grey area

 

Item 39: Project No. 52935 – CY 2022 Rulemaking Calendar. (Discussion and possible action). David Smeltzer

  • Staff – Few months ago we were directed by the commission to flatten out the export tariff rule, so it did not change drastically during the summer moths
  • Glotfelty – Important for investments and resiliency; request we have this discussion at the next open meeting
  • McAdams – Going to use the next two weeks to review it for discussion