Meeting Summary – 11/21/24 – Open Meeting

0 – Chairman Gleeson calls meeting to order

0.1 – Commission Counsel Shelah Cisneros lays out Consent Agenda

• Commission voted by individual ballot to place Item 21 on the consent agenda.
• No one signed up to speak on Item 21.
• A motion to approve the consent agenda was approved with unanimous approval.

1 – Public comment for matters that are under the Commission’s jurisdiction, but not specifically posted on this agenda

• No one signed up for public comment on item number one.

2-3

• Not Discussed

4 – Project No. 55999 – Reports of the Electric Reliability Council of Texas

• The main focus was on the ORDC report presented by ERCOT

4 – Agenda Item Name: Ryan King – ERCOT – Update on ORDC Biennial Report

• The ORDC Biennial Report is a statutory requirement, filed every two years to assess ORDC’s efficacy, costs, and grid reliability contribution.
• The report covers the period from October 1, 2022, to September 30, 2024.
• Introduction of the ERCOT Contingency Reserve Service in June 2023 as an ancillary service mainly provided by online resources.
• The grid faced tight conditions, especially during Summer 2023 with 49 days of peak demands exceeding 80 gigawatts.
• November 2023 saw the introduction of multistep online reserve price adder floors for reserves below certain thresholds, aiming to provide consistent price signals.
• During the report period, performance of ORDC aligned with expectations, with stable parameters compared to prior periods.
• Growing demand and tight conditions noted, influenced by factors such as lower natural gas prices, and increased solar and energy storage capacity.
• Change observed in reserve composition towards more online reserves following ECRS introduction.
• Higher levels of reserves observed with ORDC price adders compared to 2022.
• Significant reduction in RUC due to lower fuel costs, online reserves, and strong market signals supporting self-commitment by resources.
• Analysis showed that in applicable intervals, 85% of dispatchable generators supplied output during use of price adders.
• No changes recommended for ORDC presently, though the replacement with individual ancillary service demand curves is under discussion.
• Discussion ongoing at Real Time Co-optimization plus Batteries Task Force regarding ORDC replacement.

4 – Keith Collins – ERCOT – Expectation on ancillary service demand curves

• ERCOT aims to have changes ready for market trials by May 2025.
• The goal is to implement changes after the April board timeframe.
• Discussions are ongoing at a task force about potential implementations and some might occur after RTC implementation.
• There are several proposals on the table, including one from IMM and possible counter-proposals from other market participants.
• ERCOT expects an NPRR to be initially developed by January, but meeting this timeline may be difficult.
• If no movement occurs, implementation could proceed without changes, with enhancements added later.
• Stakeholders are encouraged to have any counter-proposals ready for discussion in December.
• Any changes should have consensus approval among stakeholders.
• If consensus isn’t reached, existing plans will proceed without changes.

4 – Chad Seely – ERCOT – CPS Braunig, RMR

• The next ERCOT board meeting is on December 3rd, where a vote will take place regarding the CPS Braunig Units 1-3.
• Recommendation is to approve an RMR agreement for Unit 3 only, the largest and newest from 1970 with 400+ capacity.
• Unit 3 inspection is crucial for availability starting Summer 2025.
• Units 1 and 2 are older, with lower capacity and more uncertainty; alternative solutions are being explored.
• Currently considering relocating CenterPoint mobile generation units from Houston to the San Antonio area.
• The mobile units offer diverse reliability benefits and quicker start times compared to units 1 and 2.
• Board decision on Units 1 and 2 is deferred till February to explore the feasibility of the mobile generation relocation.
• Feasibility includes technical, cost, and regulatory aspects, with work progressing positively on the technical side.
• Cost is still being evaluated, with considerations on customer impact being discussed.
• Previous RFP received only one ineligible 200 MW battery offer, not suitable per criteria.
• State leadership, including the Lieutenant Governor, is supportive of exploring these reliability solutions for upcoming years.

4 – Barksdale English – Deputy Executive Director – Cost & Regulatory Rate Concerns

• Dave Gordon, Jenna Keller, and Barksdale English are actively participating in discussions about cost and regulatory rate issues.
• The team is monitoring the development of these issues closely and hope to obtain better information soon as the situation progresses.

4 – Chairman Gleeson lays out ERCOT’s filed proposed order

• ERCOT filed a proposed order for a good cause exception to the December 1st deadline related to the max load shed that can be safely rotated.
• ERCOT has requested more time to gather information from transmission operators.
• Staff agreed with the extension request.
• Participants expressed support for the extension, emphasizing the importance of obtaining accurate information for reliability standards.
• The discussion also highlighted the need to work with TSPs to develop a reliable framework.
• A motion to direct staff to draft an order consistent with ERCOT’s memo was proposed.
• Motion was approved with unanimous approval.

5 – Project No. 54445 – Review of Protocols Adopted by the Independent Organization

• Two proposed orders were considered: one on AS methodology and another concerning 12 approved protocol revisions.
• Emphasis on the importance of integrating curtailable load as a valuable tool for ERCOT’s system.
• Discussion is at an early stage, with potential for growth in reliability.
• Decision to proceed with two separate motions for the proposed orders.
• A motion was entertained to approve the proposed order for ERCOT’s revision requests.
• Motion was approved with unanimous approval.
• A motion was introduced to approve 2025 ERCOT methodologies for determining minimum ancillary service requirements.
• Motion was approved with unanimous approval.

6 – Project No. 55845 – Review of Ancillary Services in the ERCOT Market

• Staff is expected to present their recommendations along with one audience member

6 – Cyrus Reed – Lone Star Chapter of Sierra Club – DRRS

• Cyrus Reed from the Lone Star Chapter of Sierra Club expressed support for the Staff recommendation regarding DRRS as an operational ancillary tool.
• Reed urged for clear direction from the Commission on the intent of DRRS but suggested leaving specifics open to ongoing discussions.
• There are still ongoing discussions at ROS, WMS, and SAWG about the nature of the DRRS product, including whether it involves offline, online resources, storage, and co-optimization.
• Reed mentioned that the IMM filed comments recently and emphasized the need to determine the DRRS specifics.
• Commissioner Hjaltman also filed a memo on the matter.
• The goal is to have a discussion and review of topic-related memos by December 12th, with submissions due by December 6th for staff consideration.

6 – Julie Gauldin – Commission Staff – Update on Ancillary Services Study

• Julie Gauldin and colleagues Chris Brown and Floyd Walker provided an update on the Ancillary Services Study conducted by ERCOT, IMM, and Staff over the past year.
• Staff submitted their recommendations on November 15 following the draft study publication on October 1 which included a qualitative and quantitative review and specific recommendations from ERCOT and the IMM.
• The study involved hosting two workshops with stakeholders and collecting formal comments on the draft report.
• Staff recommendations are organized around 7 topics:
  • sufficiency of current ancillary services
  • incentives for dispatchable generation
  • procurement quantity criteria
  • dynamic quantity determination
  • probabilistic modeling of ancillary service quantities
  • Dispatchable Reliability Reserve Service
  • A catch all for other related reliability services
• The team is not requesting a decision at this meeting but plans to bring the recommendations to the next two open meetings for formalization in the agency’s report.

6 – Commissioner Hjaltman lays out her memo

• Commissioner Hjaltman provided a brief overview of her memo 
• There was a concern about the second component of 35.004(g) regarding incentivizing dispatchable resources not being included in recent discussions.
• Ongoing projects such as the reliability standard and RTC+B are still outstanding, and reviewing the market as a whole will be easier once they are concluded.
• Commissioner Hjaltman requested that the 2026 reliability assessment include ancillary services as a part of the review.
• A clear statement regarding the procurement criteria is needed moving forward, as current criteria like loadshed or watches may not be suitable.
• Staff is encouraged to bring forward any new ideas for procurement criteria for discussions in upcoming meetings.

6 – Commissioner Glotfelty’s thoughts on Report

• Consideration of defining ‘dispatchable resource’ in the rules to benefit the market.
• Memo on the battery component of DRRS will be prepared for the next meeting and filed by the 6th.

6 – Commissioner Cobos’ thoughts on Report

• Report is a requirement of SB3 and contains important information.
• Need for regulatory certainty emphasized for power generation and local service companies to plan effectively.
• Concerns raised by stakeholders about potential shifts in ancillary services procurement.
• Importance of deciding on the operational approach (conservative or dynamic) for achieving regulatory certainty.
• Inclusion of demand response component in the report is appreciated.
• Optimization of demand side for reliability highlighted as important.
• Room for improvement in ERS to unlock more load resources.
• Demand Response Service is expected to be a significant topic in the coming months.
• Need for clarity on what ERCOT is solving for when procuring ancillary services (e.g., avoiding load shed or EEA conditions).
• Importance of market transparency and methodology explanation noted.
• Significant market changes and growth in renewables should reflect on the amount of ancillary services procured.
• Emphasis on operational understanding and expectation setting regarding renewables and ancillary services.

6 – Chairman Gleeson’s thoughts on report

• Discussions around DRRS are important, serving as an alternative to implementing PCM and reducing RUCs.
• Ancillary services aren’t meant to address resource adequacy issues, prompting questions on alternatives.
• Need to analyze and discuss how to meet reliability standards if DRRS isn’t sufficient.
• Exploration of ideas like dispatchable energy credit to tackle resource adequacy needs.
• DRRS is used as ancillary service terminology but doesn’t fit NERC-defined services.
• Continued discussions with market participants and Staff are needed on resource adequacy.

6 – Barksdale English – The view of ancillary services & their contribution to revenue sufficiency

• Ancillary services are primarily designed to address the risk they are meant to mitigate, not to generate revenue.
• Revenue from ancillary services is important but considered secondary to risk mitigation.
• Ancillary services are part of multiple revenue streams for resource entities to recover investments and attract future investors.
• The discussion also touched upon DRRS and its intended purpose.
• Continued conversations are valued to ensure correct implementation of DRRS.
• Appreciation was expressed for the work done and anticipation for further discussions at the next meeting.

7 – Project No. 56962 – Virtual Currency Mining Registration

• Introduction of Project No. 56962 concerning virtual currency mining and registration.

7 – Commissioner Hjaltman lays out her memo

• Commissioner Hjaltman filed a memo related to the project.
• The registration process and renewal rules were found to be confusing.
• Commissioner Hjaltman clarified that there are two important dates: the renewal date and a cutoff point identified by Commission Staff.
• Commission Staff agreed with the changes outlined in the Commissioner’s memo.
• Commissioners expressed agreement and appreciation for the memo.
• A question was raised regarding the requirement on page 25 of the rule, Section F, about filing anticipated peak load projections by currency minors.
• Clarification was sought if these projections should be a rolling number for a five-year outlook.

7 – Kim Van Winkle – Commission Staff – Registrants Updating Information Annually

• Registrants are expected to update information annually with their filing.
• At the end of the year, they report actual numbers according to section H.
• The process aids ERCOT and the market in understanding actual growth projections from cryptocurrencies.
• It is important for registrants to look five years out for reliability purposes.
• Support expressed for the current procedures and changes proposed in the memo.

7 – David Smeltzer – Commission Staff – Update of final draft

• A specific line about the initial filing date was identified: originally stated as by February 1st or 60 days after.
• The line with the ‘or 60 days after’ clause was removed and not intended for inclusion.
• The change should not affect applicants in practice.
• A motion to adopt the proposed rule was entertained as discussed in Commissioner Hjaltman’s memo.
• Motion was approved with unanimous approval.

8-10

• Not Discussed

11 – Project No. 57152 – Identifying Transmission Service Providers for Implementing the Permian Basin Reliability Plan

• Identifying transmission service providers for the Permian Basin Reliability Plan.

11 – Commissioner Cobos provides update on Permian Basin Reliability Plan

• Visited Midland on Monday to speak with the Permian Basin Petroleum Association.
• The association is excited about upcoming developments that will enhance oil and gas exploration.

11 – Commissioner Glotfelty’s thoughts on update on plan

• Comment by stakeholders from Texas and New Mexico about substation locations and how it might affect line awards.
• Emphasis on allowing utilities the chance to express their views on substation decisions without slowing down the process.
• Question on whether there is an opportunity for stakeholders to provide feedback.
• Mention of ERCOT or utilities filing designations for who should build lines.
• Suggestion for open meetings to allow stakeholders to voice if changes to plans should be considered.
• Acknowledgment of the challenge in not wanting to reconstruct the plan but also considering stakeholder input.

11 – Barksdale English – Feedback on the update on Permian Basin Reliability Plan

• Stakeholders had a period to contest endpoints and line ownership designations.
• The period for contesting these designations has passed.
• Filings related to contested routes have been made, and these will be severed from the omnibus plan order.
• Discussion about TNMP’s opportunity and action regarding ownership disputes.
• Acknowledgment of disputes between transmission and distribution owners.
• TNMP filed a dispute concerning some projects.
• Disputes may be resolved by corresponding TSPs or through a contested case process.

12 – Project No. 55421 – Texas Advanced Nuclear Reactor Working Group

12 – Commissioner Glotfelty’s Update on Processing the Report

• Acknowledgement of the significant work behind the report and the potential for future discussions about nuclear power expansion in ERCOT.
• Gratitude was directed towards the Commissioners, particularly Kathleen, for her support and belief in nuclear power.
• Glotfelty noted appreciation from the Governor’s office for the positive nature of the report.

13-20 

• Not Discussed

21

• Consented

22-24

• Not discussed

25 – Project No. 56822 – Issues Related to the Disaster Resulting from Hurricane Beryl

• Focus on investigation of emergency preparedness and response by utilities in Houston and surrounding communities.

25 – Luisa Venegoni – Commission Staff – Beryl Investigation Report

• The project involved contributions from about 8 different divisions.
• Involvement from communications and public engagement was highlighted for supporting online public comment and a workshop in Houston.

25 – Commissioner Glotfelty’s thoughts on the report

• Commissioner Glotfelty highlighted the importance of including major contractors and vegetation management companies in the annual hurricane and major storm drills.
• He emphasized that these entities are critical in the process and their timely arrival and understanding are crucial.
• He suggested improving the work order process for mutual assistance crews by making it electronic rather than paper-based.
• Commissioner Glotfelty noted that CenterPoint had challenges with this process during Beryl but is believed to be addressing them.
• Electronic work orders would facilitate more timely and accurate outage updates for consumers.

25 – Chairman’s thoughts on the report

• Chairman shared experiences from a press conference in Houston with the Governor and CenterPoint.
• Complaints from crews about lengthy travel times for paperwork submission and hotel return, adding to their workday.
• Consideration for the Commission to address these issues in future recommendations.
• Proposal to include the discussed report as an addendum to the agency report.
• Permission for staff to make any non-substantive changes to the report for clarity.

25 – Connie Corona – Executive Director – Rule changes on the report

• Recommendation for rule changes in the report was discussed and will be added to the rulemaking list.
• Motion to approve the Beryl Investigation Report and include it as an addendum to the Agency Report.
• Authorization for Staff to make any perfecting or non-substantive changes.
• Motion was approved with unanimous approval

25 – Commissioner Cobos Announces Her Departure from the PUC Commission

• Commissioner Cobos announced her departure from the PUC Commission, effective at the end of the year. She will provide a more detailed statement at the last open meeting on December 19th.
• Commissioner Cobos expressed gratitude to Governor Abbott, fellow Commissioners, Staff, and others for the opportunity to serve.

26-28

• Not Discussed

29 – Closed Session

• The meeting transitioned to a closed session at 9:32 AM on November 21.
• The closed session is held under Chapter 551 of the Texas government code.
• Consultation with attorney is pursuant to Section 551.071.
• Deliberation on personnel matters is pursuant to Section 551.074.
• Deliberation on security matters is pursuant to Section 551.076.
• Closed session concluded at 9:39 am on November 21, 2024.
• No action will be taken by the Commission on the matters discussed in the Closed Session.
• Motion was approved with unanimous approval.

29 – Chairman Gleeson Adjourns Meeting