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The Sunset advisory Commission met on December 7th to hear Sunset recommendations on the Public utility Commission, the Electric Reliability Council of Texas, and the Office of Public Utility Counsel, as well as public comment on those recommendations. A video archive is available here.

 

This report is intended to give you an overview and highlight the various topics taken up. It is not a verbatim transcript of the discussions but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

Opening Comments

  • Schwertner – Sunset will present, then agencies, then public testimony

 

PUC, ERCOT, and OPUC Documents

 

Public Utility Commission of Texas, Electric Reliability Council of Texas, and Public Utility Counsel

Emily Johnson, Sunset Staff

  • Provides brief overview of functions of PUC, ERCOT, and OPUC
  • PUC has been working to implement post-Uri legislation, but many have not yet had time to be implemented
  • Did not analyze design of wholesale electric market, tried to look at operational needs
  • Recommending 6 year continuation so legislature can review all changes, ERCOT to be reviewed at the same time
  • Recommendations support some of PUC’s exceptional item requests for staffing support, but more is needed
  • Sunset recs to fund staff are unusual, but PUC needs more staff to implement legislation and oversee the electric grid; PUC has relatively small staff currently
  • Other recommendations focus on more robust and transparent processes for making decisions, incl. clear processes for directions to ERCOT, development of reliability definition, and ensuring ERCOT has view of grid’s needs?
  • Recommending that PUC develop strategic communications plan and develop website, PUC & ERCOT to review communications to avoid confusion
  • Water regulation takes 60% of the agency’s time, but only <20% of agency’s budget
  • Issues 4 &5 incl. recommendations to improve data collection and processes
  • OPUC to continue for 6 years to align with PUC and ERCOT, but needs to formalize contracting processes
  • Chair Schwertner – Want to cover interaction of PUC & ERCOT as well as the evolution of that, changed over the last session; dynamic between the two seems to be in flux, can you describe what you found about the decision making process and how it is handled?
    • Process is evolving, was evolving even during review
    • ERCOT didn’t have full board until January, part of why recommendations have examples of informal decision-making, focusing on trying to formalize this decision-making process
  • Chair Schwertner – Can you go over the recommendations?
    • Recommendation 1.2 would make it very clear that PUC has authority & can issue directives to ERCOT outside of formal rulemaking & contested cases; PUC would need to create “buckets” of circumstances on how these decisions would be made
    • Would eliminate appeal process for protocol revisions as PUC is making the decision, so strange PUC would be reviewing their own decision
    • Would give PUC clear authority to direct ERCOT in emergency situations, emergency situations to be defined in rule
  • Chair Schwertner – How would that be done?
    • Didn’t set that, so process would go through PUC rulemaking, intent is for these to be imminent emergency situations
  • Chair Schwertner – Goes back to Uri and how pricing determinations were handled
    • Recommendations 1.9 would direct PUC to develop policies in separating commissioner roles & responsibilities
  • Chair Schwertner – 5 members, TxDOT is 5 members as well
    • Not full time though
  • Sen. Springer – On 3.2, speaks to lengthening emergency situations, but legislature has tried to make these go faster; allowing longer is absolutely the wrong way to go, affecting lives & property in smaller water systems
    • Goal was to keep TCEQ from passing these onto PUC to alleviate burden on PUC
  • Sen. Springer – How many FTEs and what is the cost to execute?
    • Don’t have an estimate, on the temporary manager?
  • Sen. Springer – More general, looking at 200+ FTEs recommended; highlights rec want written minutes of meetings, have been online for some time & using taxpayer mone3y to write those minutes
    • Recommendations are supportive of LAR request for water, roughly $1.7m
    • Don’t require minutes on every agency, but considered it important for agency that wants to restore public trust
  • Sen. Springer – On recommendations for more public testimony, meetings are following Open Meetings Act & public can testify?
    • There is a general item for public testimony, but often specified as being for items not on the agenda and often very broad
  • Rep. Holland – On recs related to SB 3, how have PUC & ERCOT done on implementing provisions?
    • Some done, some still in progress; e.g. firm fuel was part of SB 3 and has been done, market redesign is still being implemented
  • Rep. Holland – How about interactions and communications with other agencies? Improved?
    • Coordination has made things make swifter, enhanced coordination is improving but still evolving
  • Chair Schwertner – Highlights portion of rec for more transparent processes and then giving ERCOT informal instructions via verbal memo, directive, etc.; no delineation of what type of decision requires what type of communication
  • Chair Schwertner – Commissioners not being present at ERCOT meetings?
    • PUC chair as ex officio non-voting member sits in, others can so long as there is no violation of the Open Meetings Act
    • Recommendation is that ERCOT needs opportunity to discuss things without ERCOT
  • Chair Schwertner – Has that been happening?
    • Want to formalize this ability, important for ERCOT to be able to discuss grid reliability and possible impact of PUC actions affecting this
    • PUC Commissioners wanted to sit in on all of them but Sunset concerned about Open Meetings Act violations
  • Chair Schwertner – How many did you sit in on?
    • Several
  • Chair Schwertner – Interesting the interaction between PUC & ERCOT
    • And the agencies had different responses to the recommendations
  • Sen. Johnson – Important to preserve independence of agencies, if all things push one way it calls independence into question; important to consider for decision making, legal liability, etc.
  • Sen. Johnson – If PUC is setting out all the rules, what is ERCOT?
    • Struggled with this, tried to strike balance, but SB 3 made it clear that PUC has complete oversight; seemed to be an interest in having PUC oversee
  • Sen. Johnson – Should ERCOT copy the PUC in all internal correspondence? Would hope the answer is no; need to look at where we draw the line
  • Sen. Johnson – In your professional estimation, does the PUC have what it needs in terms of resources & staffing to perform tasks we charged it with?
    • No & said this in the report
  • Sen. Johnson – You did, and world is watching, so we shouldn’t be cheap in making sure PUC has what they need to perform duties, correct?
    • Yes
  • Chair Schwertner – Reliability discussions, did the ERCOT board take the decision and act on it?
    • In June of 2021 there was not a functioning ERCOT board; ultimately no approval at ERCOT of those decisions
  • Chair Schwertner – And your finding are that PUC hasn’t delineated what type of action needs what type of decision making?
    • Correct
  • Sen. Perry – Back to 1.4 on executive session, I think it is important for PUC to be involved in all conversations because ultimately PUC is responsible & ERCOT is an admin feature; do not agree that PUC should be excluded from ERCOT executive sessions
  • Sen. Perry – Water will get more expensive, which means the agency in charge will become more important; water regulation is extremely underfunded & it will get worse as water quality and quantity decreases
  • Sen. Perry – On the grid, dangerously close to not having reserves to run it; political & practical pressures on acting are real
  • Sen. Perry – Overall umbrella is that we will pay more to fix what we need to, until the legislature acknowledges that for electricity and water, all of this is a distraction; need to have conversation about cause and that is that we have people who haven’t been told to go fix it
  • Rep. Clardy – Did Sunset give any thought to separating out agency authority on electricity and water? Don’t want to have situations where emergency situations and regulation aren’t paid attention to because PUC is focusing on the other
  • Rep. Clardy – Would be well served by having staffed agencies focused on each one
    • On water side we did not because it is the first review since transfer from TCEQ
    • Water used to live in one agency, but has been divided up
    • Ultimately felt that ratemaking expertise lives at PUC, didn’t see enough problems on PUC’s water side to justify sending it back to TCEQ or do something different
  • Rep. Clardy – Not saying send it back to TCEQ, would be better to have water separated out into another agencies; not prudent to combine two of the big state responsibilities into one agency
  • Rep. Clardy – Will be a big expense, but creating more FTEs and putting more money into PUC; want to be able to hold agency accountable for the one function they are responsible for
  • Rep. Clardy – On the 1.4 recommendations on PUC members at ERCOT executive sessions, Uri failure was due to no one knowing who was in charge and a breakdown in timely communications; legislature wanted authority with PUC & then PUC would delegate to and watch over ERCOT
  • Rep. Clardy – PUC doesn’t need to be micromanaging ERCOT, but want the commissioners in the room during emergency situations
    • Intent of recommendations isn’t to prohibit or limit communication
  • Jeff Austin, Sunset Commission – PUC/ERCOT authority model has been in place since 2001?
    • Complete authority verbiage has been in statute since 2001
  • Austin – PUC Chair has been ex officio member since that time, not new; want to go over how we got here, what they inherited
  • Austin – Is the reliability standard still a good rule of thumb?
    • There is the industry standard, PUC doesn’t have a current definition of reliability, recommendation is to develop this standard
  • Austin – Concerned about the unreliability of some of the renewables, crypto mining helping to bring generation to the state; where will we be in the coming years with some coal retiring, etc.?
    • Intent of Sunset was to highlight some of these issues and focus importance of getting PUC operations right
  • Rep. Bell – Seeing a lot of functions undefined, disjointed, informal, etc., intent of the body is to direct and make sure this gets fixed; can’t have reliability if these words are present throughout the report; do these words get taken off the bullets in 6 years when we review again?
    • That would be the goal

 

Peter Lake, Public Utility Commission

Thomas Gleeson, Public Utility Commission

  • Appreciate work done by legislature; have been operating at same staff levels but have done 200% more rulemakings in the time since the 87th
  • Overall recommendation from Sunset are fair & necessary, need more resources to implement directive from the legislature
  • Because of reforms we were able to keep lights on over the Summer, but have more people coming into Texas & need is growing
  • Chair Schwertner – Seems to be an evolving process of relationship with ERCOT and involvement of commissioners, can you go over hoe you make decisions like operating grid conservatively, waiving ORDC curve, etc.
    • Lake – Immediately after I took office, only 2 PUC commissioners, couldn’t speak of these issues due to OMA; early decisions were made through discussions with ERCOT staff & interim CEO
    • Have dramatically improved communications and decision making; in terms of grid operations, ERCOT board and CEO have largely put in place protocols and processes needed so there aren’t decisions to make; ORDC, firm fuel, etc. are made at PUC dais, held multiple work sessions open to the public
    • Goal of PUC is that ERCOT have the people necessary and they take clear directives
  • Chair Schwertner – Then would you disagree with report that more clear process is needed?
    • Have improved processes dramatically & in a good spot in how decisions are made, but would welcome further clarification and direction
  • Rep. Holland – Everyone thinks you need more people and staff, seems that we will work together to make sure that happens; will the LAR cover the additional resources mentioned in the Sunset report?
    • Yes, pending any additional responsibilities
  • Rep. Holland – Ability to recruit and retrain staff is difficult, you are authorized for 209 FTEs, so roughly 40-45 people we don’t have in position at PUC: will we be able to fill FTE spots if authorized
    • Yes, can defer to person in charge of personnel
    • Thomas Gleeson, PUC – Operating at between 190-200 FTEs, currently not authorized to offer salaries necessary to retrain, have request in LARs for 50-60 more FTEs
    • Previously authorized for 242 FTEs even without the water functions, cut down to current
  • Rep. Holland – Will go up to 260 FTEs and this is adequate for PUC to perform?
    • Lake – Based on how laws and regulations are written now, might need more to implement additional recommendations
  • Rep. Holland – So you have more than 166?
    • Yes, somewhere between 190-200, request recognizes the headroom available between current number and authorization
  • Rep. Holland – Does it make sense to have more than one commissioner present with ERCOT; should we have a more formal process for executive session
    • Could be very workable
  • Chair Schwertner – Asks after clarity of direction
    • Would have to define it as both chambers giving us directive in terms of law
  • Chair Schwertner – That is the highest form of clarity, also informal like the B&C letter sent to PUC which we haven’t received a response on
    • Agrees, happy to sit down on work on that response, reliability, etc.
  • Sen. Springer – 50-60 more FTEs make sure we do everything in the Sunset report? If we don’t have the FTEs, what takes priority? Want to make sure this math is working
    • Can’t speak to how agency operated before, but can’t sustain pace now
  • Sen. Springer – Agree with this comment, just to maintain what we asked before the Sunset report, how many FTEs were needed?
    • Gleeson – LAR was constructed before the Sunset report, will look at finalized Sunset decisions and look at actual cost
  • Sen. Springer – New recommendations will require additional FTEs?
    • Correct; issue is not just hiring, issue is hiring and retaining
  • Sen. Springer – Implementation of SB 3 and other legislation?
    • Did all the rules with the statutory requirement first, just now getting to everything else
  • Sen. Johnson – Couple things in here regarding precedent manuals and minutes, etc.; if we give you more FTEs can you do this?
    • To the precedent manual, not just about FTEs, need someone with extensive knowledge of orders given and PUC; have one FTE on staff who can but is currently occupied
    • Disagreed with requiring precedent manual as we weren’t sure we could find the talent to be able to do this
    • On minutes, neutral on this, all open meetings are recorded
  • Sen. Johnson – Yes, but it is a pain and if you had minutes it would be quick; would it be worth cost of an FTE?
    • Would defer to you on that, we feel like we’re doing what is required
  • Sen. Johnson – Trying to fix the grid and spending 1000x this on other imperatives; want to make sure the LAR has enough to fix this
    • PUC believes it does, redid the LAR during the crisis, re-analyzed and believe 50-60 FTE plus salary increases will take care of it
  • Sen. Johnson – And you understand you can’t compete directly with private sector
    • Try to look for those interested in public service, but yes sometimes low pay plus overwhelming workload is difficult
  • Sen. Johnson – Is there a concern that if we reduce everything to prescriptive policy it could waste time?
    • Needs to be a balance in allowing PUC to be nimble and providing transparency and certainty
  • Sen. Johnson – Perhaps looser language might provide guidance without overly proscribing thought; independent communications role for ERCOT to play?
    • Lake – Yes, but needs to be overseen by PUC
  • Sen. Johnson – Does this mean controlled by PUC?
    • No, think of it more as division of labor
  • Sen. Johnson – Who makes the conservation call and who talks about it?
    • Dictated in existing protocols, improved but it is all formulaic
  • Sen. Johnson – Some is federally mandated?
    • Some is, call for conservation is formulaic
    • Work closely with ERCOT to communicate duration, cause, etc.; much of the communication has been improved by having 5 commissioners
  • Sen. Johnson – multi-faceted issues due to communication with ERCOT, PUC, legislature, public, etc.; ERCOT has to be an independent entity and if they have an independent communication role that shouldn’t be lost
  • Chair Schwertner – Regarding formulaic conservation notices, public has some confusion; thought these were much more of a soft call, haven’t seen a matrix; Sunset report notes lack of formalized process
    • In the emergency grid operations, would defer to ERCOT to provide details
    • Formula has changed to prepare for reduced demand, EEA 1 has been moved ahead of conservation call, but in practice it is pretty formulaic
  • Austin – Some of the report recommendations you can do now without legislative intervention; can you give history and perspective on problems that were inherited and what has been done?
    • Huge number of changes put in place, ORDC changes, winterization reqs, new ERCOT protocols, ancillary services, etc.
  • Austin – Are you getting to the end of the process or is there more to be done?
    • Majority completed, but there is still work to do
  • Austin – Who are you losing people to and why?
    • Both public and private sector, salaries not competitive for the high-grade legal & technical expertise needed
  • Austin – What about facilities, other needs?
    • Need more space, difficult to recruit without space to place the workers
  • Austin – Place for renewables, but they are unreliable; closing plants are a risk to the grid
    • Have heard from Governor, legislature, etc. that we need more dispatchable power; goal is to figuring out cheapest way to deliver this and keep rates down for ratepayers
  • Austin – See stories saying that grid may fail, will fail, etc., but it didn’t; wanted to thank PUC for keeping grid active
  • Sen. Perry – Do you have a clear understanding of where authority lies in keeping lights on? No confusion, if ERCOT independence causes a problem, who is the authority?
    • PUC
  • Sen. Perry – ERCOT is an admin entity, responsible for taking the legislature’s goals; legislature needs to define what we would expect for a dispatchable, reliable reserve
  • Sen. Perry – What is it that PUC could hear in ERCOT meetings that could create an independence problem?
    • Scope is pretty limited to technically legal issues, anything PUC would need to render an official judgment on, would need to recuse if present for initial conversation
  • Sen. Perry – What would be the issue? Seems very limited
    • Would defer to legal counsel
  • Chair Schwertner calls Pablo Vegas to respond
    • Pablo Vegas, ERCOT – Very limited, one example would be where ERCOT is a party to a contested case where PUC would have to determine how ERCOT performed & ERCOT would need to discuss among themselves how to structure legal argument
  • Sen. Perry – But you would never privately discuss decision that would impact capacity?
    • Lake – Absolutely
  • Sen. Perry – At one point during the chaos there were very few commissioners, decisions needed to be made and without those the grid could have failed; wanted to thank Commissioner Lake for acting during that time
  • Sen. Perry – Fair to say we spend a lot of money on workarounds because we don’t have dispatchable, reliable reserves?
    • Yes
  • Sen. Perry – Told this number is $1.8b/year that we spend on ancillary and other reliability services
    • Yes, spend substantial amount of money
  • Sen. Perry – Is that the best use when we could just use it to increase capacity?
    • Argument to be made
  • Sen. Perry – Do you believe grid is adequate to need and growth of state? Doesn’t need any changes?
    • Grid needs changes to meet growth and needs to be in form of dispatchable resources
  • Sen. Perry – Would you like to see what the legislature thinks the reserve should be?
    • Always welcome more clarification
  • Chair Schwertner – Regarding reserve margin, where is PUC in implementing SB 3 goal?
    • In process of receiving public comment on consultant analysis; have considered multiple options, but no action has been taken
  • Chair Schwertner – DO you have a problem with eh 1 in 10 standard?
    • No, any standard is better than what we have
  • Sen. Perry – Would cost more money; on the concept of rate case precedent, would caution that every case is unique and this wouldn’t be a binding document, but merely a resource
    • Gleeson – Yes, would agree; first threshold is having someone on staff to decide if decisions are precedential
  • Sen. Paxton – On FTEs on turnover, salaries aren’t always the only thing; do you do exit interviews?
    • PUC does conduct exit interviews, top complaints are overwhelming workload and pay
  • Sen. Paxton – Other aspect is right people might not be in the right places
  • Rep. Clardy – Any thoughts or ideas on how better to silo water functions? Independent within PUC? Move it elsewhere?
    • Lake – Depends on larger organizational structure, within context of PUC a lot of the rate functions are the same, but there is a large number of water systems & to some extent simply a battle of numbers, flexibility is important
  • Rep. Clardy – Any way to delegate responsibilities for smaller water systems?
    • Haven’t thought about this from a regional geography standpoint, have tried to standardize processes internally
  • Rep. Clardy – Overwhelming for small water systems
  • Rep. Clardy – Seems to be an understanding on PUC needing to be int eh room with ERCOT
  • Rep. Clardy – On reserves, nuclear is a very important part of this, can you give me some thoughts on this?
    • Very supportive of anything with an on switch, some issues are at the federal level, also involved with investors
  • Rep. Clardy – Need to think outside the box if we’re going to meet future needs of state
  • Rep. Clardy – On the reserve margin, concerned about plants being taken offline; as coal plants are taken offline, is it possible to leave these online as new resources are brought online?
    • Potentially, bottom line is we want to incentivize resources to stay online within the existing marketplace
    • Federal government is trying to shut down 8-10k megawatts via clean air laws
  • Chair Schwertner – IS there anything in PUC documents that delineates powers of Chair?
    • No
  • Chair Schwertner – Do you believe it is an important document to produce?
    • Depends on what it says
  • Chair Schwertner – In terms of RUCing, do you think it’s working well?
    • As far as I know, working well, haven’t heard problems with it and keeping lights on
  • Chair Schwertner – Asks about market redesign
    • Grid operations are on every agenda
  • Chair Schwertner – Legislature put in place 5 commissioners, eventually large decisions need to be discussed in open meetings
    • And they are, have asked each commissioner to focus on specific areas of interest
  • Chair Schwertner – Understand focus & expertise, but Commission needs to take a vote, shouldn’t be a hierarchical top-down delegation
    • And this is what we do, meetings over the summer where extensive to allow for commissioners to discuss, work very hard to ensure this
  • Chair Schwertner – almost 7k RUC hours this year, has PUC discussed?
    • No formal docket has been opened on this item
  • Chair Schwertner – Why not, isn’t a significant issue?
    • Keeping the lights on, ERCOT grid operations is on every agenda of every PUC meeting & happy to discuss, but general sentiment is to keep doing what is keeping the lights on
  • Rep. Bell – Market driven by private actors, need to consider how to attract market actors; unless there is an ROI, no one will build expensive generation projects, will not get investors to spend $1b for a chance to operate 8 times in a year
    • Goal is to ensure market is designed to provide incentive and actions do not need to be taken
  • Sen. Perry – Best incentive to do something is cash, will haver to make sure quasi-regulated market going forward has the incentive
  • Sen. Perry – Takes 4-6 years to get generation installed into the grid, no excuse to run out of electricity or water
    • Yes, and in 4-6 years we will have a capacity deficit
  • Sen. Perry – We have a capacity deficit now; if we’re looking at 6 years to add capacity, are you able to say we’re going to be able to limp through this until then?
    • In the absence of action and market reform we will not have enough capacity
  • Sen. Johnson – Will you need more money to successfully implement Phase II?
    • Depends a lot on what it looks like, some yes but may either be with ERCOT or PUC
  • Sen. Johnson – Where will we be mid-Jan or late May?
    • Gleeson – Taken increased resources need in analysis division into account

 

Pablo Vegas, ERCOT

Chad Seely, ERCOT

  • Pleased that Sunset reached conclusion that ERCOT generally has resources needed to accomplish goals
  • In the process of conducting inspections for this season, implemented new reliability-first approach, operationalized market reforms like ORDC, firm fuel, etc.
  • Litigation to which ERCOT is a party requires substantial resources and distracts from core functions; welcome clarity if ERCOT is subject to civil suit and scope of original jurisdictions
  • Legislature may need to consider cost & benefit of ERCOT vision into distribution in regions
  • ERCOT supports recommendation 1.4 allowing ERCOT board to exclude PUC commissioners during certain board discussions; may be time when PUC chair or commissioner presence could impede decision making on certain non ex parte matters
  • On recommendation 1.5 regarding consolidating ERCOT reports, Long Term System Assessment and Grid Reliability Assessment should be kept separate, but propose to provide industry electric report including summaries of info
  • Sen. Johnson – With the reports, you didn’t just say no, you proposed something more
    • Vegas – Intent of Sunset staff was to provide better clarity on technical information in the reports; can augment the technical report by highlighting key aspects & needs
  • Sen. Johnson – Excellent idea; discussed communications with PUC, there is a certain statutorily assigned time for conservation actions, but not the only time when it is prudent; can you advise us on when it is appropriate?
    • ERCOT would be the best place to make those decisions
    • NERC requirement is 1,750 megawatts or lower for a certain period, roughly corresponds to EEA 2
    • Conservation calls are imprecise due to uncertain response; ERCOT looks at tools available in emergency situations
  • Sen. Johnson – When we’re at the line we need to know exactly how much we will free up
    • We look at precise tools with definable megawatts, call for conservation when even with tools used we would be in emergency situations
    • Do this ahead of time to see what response is to conservation calls and then deploy tools after
  • Sen. Johnson – Should come from ERCOT?
    • ERCOT communicates this, PUC helps make sure we covered all components for a clear message
  • Sen. Johnson – Need to address sovereign immunity
    • Chad Seely, ERCOT – ERCOT has been sued by market participants suing in home courts and avoiding PUC; suits use vague statutory basis
  • Sen. Johnson – Could have some protected actions, but actions outside of ERCOT purpose like fraud should be open?
    • Market participants are suing under common law fraud precedent
  • Sen. Johnson – If ERCOT enriches one sector of the industry without thought to grid reliability, is that
    • ERCOT opinion is any ERCOT action under its official functions should be first evaluated by the PUC
  • Sen. Johnson – Not asking that legislature delineate what that would or wouldn’t be?
    • No, asking for clarity on PUC evaluation
  • Sen. Johnson – Tell us what you mean when ERCOT wants to be more involved in distribution?
    • Vegas – ERCOT has oversight on transmission, power steps down to distribution and ERCOT no longer has visibility
    • As we see things develop like batteries, distributed generation resources, etc. these plug into distribution system and could have benefits to the grid as a whole
    • Could provide business innovations, lower costs, etc.; important for ERCOT & PUC to look at what it would take to have the visibility into distribution
  • Sen. Johnson – Have spoken a lot about capacity, at distribution level we’re also talking about resiliency?
    • Yes, ability to recover from events that strain grid; having resources in distribution could help with resiliency
  • Sen. Johnson – Things like more nimble load shed management could benefit from what you’re talking about?
    • Absolutely could
  • Sen. Perry – Important for you to know what independence factor looks like on the distribution end; shouldn’t be looking at this as a possible solution, state is responsible for delivering electricity and don’t want to remove this
  • Sen. Perry – A long way off from significant number of distribution networks; ERCOT has a lot of functions and limited resources, large task
    • Immediate needs are the priorities of ERCOT
  • Sen. Johnson – Highlights incident of bad actors shooting up transformer in North Carolina; need resiliency in the grid

 

Chris Ekoh, Office of Public utility Counsel

  • Each of the Sunset recommendations have to do with contracting process for testifying experts, not currently formalized; OPUC has committed to formalize all four processes
  • Conflict of interest documentation implemented and effective December 1
  • Formal evaluation of each testifying expert at conclusion of contract has been implemented effective immediately
  • Request for qualifications that Sunset recommended will take a little bit longer, hoping to finish by June of 2023
  • Previously reversed course on using in-house hires instead of outsourcing experts for good reasons
  • Unexpended budgetary authority continues to be very significant to do job at OPUC; lapsed funds are due to retention issues and the nature of contracts signed with outside testifying witnesses being between fiscal years; funds are earmarked
  • Sen. Perry – Something all industries face, cash versus accrual funding

 

Public Testimony

Paul Townsley, Texas Association of Water Companies

  • Provides overview of TAWC, works closely with PUC to maintain highest level of compliance, strong & efficient regulator leads to strong industry
  • TAWC believes thorough Sunset analysis has taken place & supportive of recommendations, including increased resources

 

Douglas Miller, HMW Special Utility District

  • PUC treats CCN decertification of property as a summary proceeding, PUC administration of compensation flawed
  • PUC serves as tool of state for taking of property
  • PUC activities receive little or no oversight, does not communicate with water customers
  • Quasi-judicial decisions should be reviewed

 

Mark Gowen, Texas Medical Equipment Providers Association

  • PUC rule sets forth application requirements for chronic condition and critical care customers; should encompasses wellness check legislation
  • Should request additional recommendations relating to servicing the medically dependent with electricity

 

Julia Harvey, Texas electric Cooperatives

  • Support Sunset recommendations improving effectiveness of PUC by increasing funding
  • Important that process of issuing directives from PUC to ERCOT is clarified and formalized
  • Rep. Holland – Can you tell us how securitization efforts have been carried out?
    • Has been implemented and leveraged by coops in several areas of the state
  • Rep. Holland – Big deal for the coops?
    • Yes, appreciate assistance in getting it implemented
  • Sen. Johnson – Would appreciate written comments on communications
    • Absolutely

 

Texas Rural Water Association

  • Supports increased resources for PUC
  • Should simplify processes for small & rural providers by shifting them to admin processes versus litigative

 

Isabella Peterson, Texas Impact

  • Pleased with recommendations in the staff report, strongly support recommendations under Issue 2

 

Michelle Richmond, Texas Competitive Power Advocates

  • Supports expansion of resources for the PUC
  • Supports establishment of a reliability standard, critical signal to the market indicating what ERCOT wants
  • Have concerns about dilution of stakeholder process at ERCOT
  • Protocol revision and PUC action should include opportunity for written & oral briefing

 

Adrian Shelley, Public Citizen

  • Agree with recommendation in the report
  • More could be done to provide access and meaningful public participation; highlights earlier market redesign with multiple meetings around the state
  • Should be considering demand side strategies in the market redesign process, would have heard more of this if public participation was stronger

 

AARP

  • Reliable utilities are important for AARP members
  • Agree that PUC is under-resourced, support recommendation 1.1 for data analytics
  • Not taking position on recommendations from 1.2-1.9
  • Supports recommendations on improving communications
  • Improving public trust includes actively soliciting public participation & public needs a window into the process

 

John Hubbard, Texas Association of Manufacturers

  • PUC is critically important regulatory agency, participation in rate matters is important; PUC could use additional funds to attract & retain talent
  • TAM supports putting guardrails around how PUC gives direction to ERCOT
  • Reliability target should include economic analyses to ensure it makes sense and does not incorporate unnecessary costs; do not support outdated 1 in 10 standard

 

Craig Nazer, Lone Star Chapter Sierra Club

  • Consulting with climatologist is essential to understanding changing climate and maintain grid reliability
  • PUC has yet to be sufficiently responsive to public comment, needs of power generating industry are being heard above the stories of the people
  • Home weatherization needs to be a part of PUC’s reliability response

 

Carol Biedrzycki, Texas Ratepayers Organization to Save Energy

  • Sunset report doesn’t look at any consumer issues, electricity is becoming unaffordable
  • Should put medically dependence into the emergency operations rules

 

Shelly Botkin, Texas Public Power Association

  • Supports increased resources for PUC, professional staff are key
  • Appreciate discussion on processes, procedures, and transparency & will be submitting written comments

 

Closing Comments

  • Chair Schwertner – Can submit public written comment through December 12th, member modifications accepted through December 19th
  • January 11th, 2023, for decisions and vote to forward recommendations to the 88th Legislature