Meeting Summary – 10/10/2024 Board of Directors Meeting

Published: October 10, 2024

1 – Call General Session to Order – Chair

0 October 10, 2024 Board General Session Agenda

Chair announced reappointments and new positions: Bill Flores as Board Chair, Peggy Heeg as Vice Chair.

Reappointments include directors Aguilar, Swainson, and England for second three-year terms.

Bob Flexen announced he will not seek a second term and will step down after December 1, 2024.

Discussed upcoming transition plans for selecting a new board member post Flexen’s term.

Antitrust admonition and security details included in meeting materials.

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2 – Notice of Public Comment, if Any – Discussion – Chair

2 Notice of Public Comment, if Any

The meeting agenda was publicly posted on October 3, 2024, with instructions for public commenting.

No public interest in commenting has been expressed to date.

A representative from CPS Energy will provide their perspective on ironic resources in item 6.

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3 – Consent Agenda – Vote – Chair

Chad provided information on the budget impacts linked to the revision request.

3.1 – Unopposed Revision Requests Recommended by TAC for Approval – Vote

3.1 Unopposed Revision Requests Recommended by TAC for Approvals

There are eleven revision requests on the consent agenda.

None of the revision requests have an ERCOT staff impact.

Two of the revision requests have an ERCOT budget impact.

3.1.1 – NPRR1188, Implement Nodal Dispatch and Energy Settlement for Controllable Load Resources – Vote

NPRR1188 has a budget impact estimated between 1.8 million and 2.5 million.

Purpose: Change the dispatch and pricing of controllable load resources to settle them at nodal price.

Initiative started at the commission as part of their blueprint and is now on the board’s consent agenda.

No board members commented or requested to remove any items from the consent agenda.

A motion to approve the consent agenda was made and seconded.

Vote Result: All in favor, none opposed, no abstentions.

Consent agenda was approved.

3.1.2 – 3.1.6

Not discussed

3.1.7 – NPRR1244, Related to NOGRR263, Clarification of Controllable Load Resource Primary Frequency Response Responsibilities – Vote

NPRR1244 has a budget impact between 70,000 to 100,000.

Motion to approve the consent agenda as it was presented: consent agenda was approved.

3.1.8 – 3.1.11

Not discussed

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4 – NPRR1188, Implement Nodal Dispatch and Energy Settlement for Controllable Load Resources – Vote

4 August 20, 2024 Board General Session Meeting Minutes

August 20, 2024 general session meeting minutes were discussed.

Motion made to approve the minutes.

Motion was seconded and approved.

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5 – CEO Update – Discussion – Pablo Vegas

5 CEO Update REVISED

Key Discussion Points:

• Real-Time Co-Optimization and Battery Project (RTC+B):
  Targeted go-live date is December 5, 2025, earlier than mid-2026.
  Includes enhancements for battery energy storage resources.
  Market trials begin in May 2025; cutover planned for December 5, 2025.
  Provides flexibility to efficiently procure and deploy ancillary services.

• Permian Basin Reliability Plan:
  Plan approved by the Public Utility Commission.
  Transmissions service providers to prepare certificates for critical import paths.
  Involves potential use of extra-high voltage transmission infrastructure.

• Southern Spirit HVDC Project:
  Awarded $360 million in DoE funding.
  Will interconnect ERCOT with Eastern Interconnect.
  The project does not alter the principles of ERCOT as an isolated grid.

• Ancillary Services Methodology Changes:
  Overall quantities of services are decreasing from 2024 to 2025.
  Improved modeling reduces need for some services.
  Methodology considers better risk management and forecast adjustments.

• New Mobile Application Launch:
  Released on iOS and Android platforms.
  Includes interactive dashboards, customization, and educational content.
  Part of a broader social media expansion strategy.

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6 – Update on CPS Energy Reliability Must-Run RMR and Must-Run Alternative MRA Process – Discussion – Pablo Vegas / Woody Rickerson / Chad V. Seely

6 Update on CPS Energy Reliability Must-Run (RMR) and Must-Run Alternative (MRA) Process

ERCOT has been working collaboratively with CPS Energy on negotiating potential RMR agreements for three resources, targeting a decision by December.

The RFP deadline was extended to October 7, yet only one MRA offer was received, indicating limited industry response.

Discussion about CPS’s revision of the suspension of operations date to March 2, addressing lost opportunity cost policy issues.

Full analysis is being prepared for a December board meeting, with possible extension to a special meeting or February if needed.

All three units have been determined necessary following reliability analysis focusing on transmission system impacts, particularly the interconnection reliability operating limit (IROLs) in South Texas.

Only one MRA proposal was received, for a 1200 MW storage resource, effective summer 2026; no offers covered 2025 needs.

CPS Energy is preparing for potential inspections and outages of the units, facing possible extended lead times for critical parts.

There is uncertainty regarding the availability of these units for summer 2025 and a need for expedited analysis to mitigate potential rotating outages.

ERCOT plans to consider all factors, including potential qualitative and quantitative assessments, in preparation for December decision-making.

Transmission projects are underway to permanently address reliability issues, but they won’t be fully operational until summer 2027.

Discussion about the economic feasibility of accelerating transmission solutions as a long-term strategy.

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7 – Summer 2024 Operational and Market Review – Discussion – Dan Woodfin / Keith Collins

7 Summer 2024 Operational and Market Review

• The summer of 2023 had the 6th hottest average temperature on record for Texas.
• Peak temperatures this year were generally lower than last year but minimum temperatures were higher.
• Demand patterns show minimum demands close to peak demands from five years ago indicating significant load growth.
• Net load tightness is more critical after solar generation decreases in the evening.
• August 20th was the only day all generation resources were fully utilized, compared to multiple such days the previous year.
• More physical responsive capability available this year compared to the previous year’s tightest days.
• Energy storage resources (ESR) played a critical role during peak periods, especially when solar generation decreases.
• Market prices were significantly down (82% year-over-year) due to increased solar and storage capacity.
• Ancillary service costs dramatically decreased from over 800 million last August to 36 million this year.
• Forward price curves have been reducing over the past few months.
• A notable shift in the type of loads—towards both base and load-following—anticipating significant load growth in the future.
• Reduced reliance on RUC during summer months seen as a positive change.

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8 – TAC Report – Discussion – TAC Chair

8 TAC Report

• Eleven revision requests were recommended for approval unanimously, including a recommendation for the 2025 ancillary services methodology.
• Reliability and operations subcommittee focused on transmission planning and related issues such as NPRR1247 and NPRR1180.
• Retail market subcommittee is working on Texas set version five implementation and other issues.
• Wholesale market subcommittee is discussing NPRR1235 and recommendations from the Independent Market Monitor (IMM).
• Concerns discussed regarding implementation of a Dispatchable Reliability Reserve Service (DRRS) and related policy implications.
• Transmission planning and economic tests like NPRR1247 are pressing issues; concerns over language and timeline were raised.
• Credit finance subgroup is reviewing credit implications of revision requests.
• Progress on RTC+B implementation is managed well, with focus on ancillary service demand curves.
• Large flexible load task force is working on large load connection size and NPRR1238.
• Discussion on 2025 ancillary service methodology involved opposing vote concerns focused on reliability and market signals.
• Stakeholder process improvements emphasized the need for written comments and better communication between stakeholders and the board.
• Concerns were raised over implementation timelines and backlog of pending revision requests post-Winter Storm Uri and RTC implementation.
• Chairman Flexen is leaving, and his leadership was appreciated.
• A call for written comments from stakeholders to provide clarity on positions was reiterated.

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9 – Additional Items

9.2.1 – Ratification of Officer

Item Not Discussed

9.2.2 – Appointment of Non-Independent Manager and Officer of Texas Electric Market Stabilization Funding M LLC (TEMSFM)

Item Not Discussed

9.2.3 – Appointment of Non-Independent Manager and Officer of Texas Electric Market Stabilization Funding N LLC (TEMSFN)

Item Not Discussed

9.3.1 – Recommendation regarding 2025 ERCOT Methodologies for Determining Minimum Ancillary Service Requirements – Vote – Chair

Motion for approval initiated by Bob. Seconded by Peggy.
Vote Result: Unanimous approval, no opposition or abstentions.

9.3.2 – NPRR1190, High Dispatch Limit Override Provision for Increased Load Serving Entity Costs – Vote – Chair

R&M committee recommended remanding NPRR1190 back to TAC.
Motion moved and seconded. Vote Result: Unanimous approval, no abstentions.

9.3.3 – Reliability and Markets R&M Committee Report – Discussion – R&M Chair

Committee recommended board approval for two price correction events meeting criteria.

9.3.4 – Real-Time Market Price Corrections – Incorrect Resource Data Impacting the Real-Time Market – Vote – Chair

Motion moved for price corrections for August 9–10, 2024.
Vote Result: Approved unanimously.

ERCOT staff reported drafting ancillary service demand curve white paper.

Independent Market Monitor emphasized no delays to RTC implementation.

9.4 – NPRR1190, High Dispatch Limit Override Provision – Vote – Chair

Committee met with no voting items other than minutes.

Presentation on phasor measurement units (PMUs) by Dr. Jim Fulham.

PMUs measure voltage and phase shift, providing ERCOT real-time instability awareness.

Transmission of PMU data is voluntary; exploring incentives for broader deployment.

Focus on RTC+B implementation set for December 5, 2025.

Future agenda: small modular nuclear reactors in Texas (December meeting).

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10 – Annual Membership Meeting Announcement – Discussion – Chair / Chad V. Seely

Annual membership meeting scheduled for Monday, December 2 at Downtown Marriott.

Agenda will include feedback from members and board, with pre- and post-meeting social events.

Colin Martin (Oncor, TAC Vice Chair) will be a speaker. Two other guest speakers TBD.

Invitations to be sent November 11.

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11 – Other Business – Discussion – Chair

No additional business raised.

Board adjourned general session to move to executive session.
Two voting items anticipated.

11.1 – Break

Meeting adjourned for a break.

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12 – Vote on Matters from Executive Session – Vote – Chair

• ES 2.1.1: Motion approved unanimously.
• ES 2.1.2: Motion approved unanimously.

Announcement: Julie England appointed new R&M Chair.

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13 – Adjournment – Chair

The meeting was officially adjourned.

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