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[00:00:04]

ALL RIGHT,

[CALL MEETING TO ORDER]

EVERYBODY, IF YOU WILL GO AHEAD AND TAKE YOUR SEATS.

WE'RE GOING TO GO AHEAD AND BEGIN AS WE HAVE A QUORUM.

ALL RIGHT.

UH, FOR THE RECORD, UH, PRESENT IN PERSON, WE HAVE COMMISSIONER STONE, COMMISSIONER AND GORY COMMISSIONER HARMON, MR. BLACKBURN, COMMISSIONER WHITE AND COMMISSIONER CHEVERIA AND VIRTUALLY WE HAVE COMMISSIONER DAVIS.

UH, SO LET'S, I WILL CALL THE MEETING TO ORDER, UH, FIRST UP CITIZEN

[CITIZEN COMMUNICATION: GENERAL]

COMMUNICATION.

UH, WE HAVE THREE CITIZENS SIGNED UP, UH, TWO OF WHICH HAVE DONATED THEIR TIME TO PAUL ROBBINS.

SO PAUL, YOU HAVE NINE MINUTES AND THE FLOOR IS YOURS COMMISSION.

I'M PAUL ROBBINS.

I'VE BEEN AN ENVIRONMENTAL ACTIVIST AND CONSUMER ADVOCATE SINCE 1977.

I WANT TO THANK MY FRIENDS, GAIL.

BORST A GREEN ARCHITECT AND MELANIE MCAFEE MANAGER OF THE BAR MANSION EVENT CENTER FOR DONATING THEIR TIME TO ME.

SLIDE SLIDE.

UM, W WON'T GET AN ANSWER POLL.

THANK YOU.

I COULD DO HAND PUPPETS.

UM, I'M INDISPOSED.

IF THIS GOES ON ANOTHER COUPLE MINUTES, WE'LL JUST, UM, TRY TO WING IT WITHOUT THE PRESENTATION.

THERE'S A SLIDESHOW OPTION ON THE MENU BAR IN THE MIDDLE.

ARE WE GOOD? JUST A SECOND.

PAUL, LET ME GET THE, GO AHEAD.

[00:05:07]

ALL RIGHT, NATASHA.

WE GOOD? ALRIGHT, GO AHEAD.

OKAY.

I'M HERE REGARDING THE GREENWASHED ENERGY CONSERVATION PROGRAMS RUN BY TEXAS GAS SERVICE.

THE COMPANY IS MISSPENDING AS MUCH AS $1.8 MILLION A YEAR.

THAT SHOULD EITHER BE REIMBURSED TO RATE PAYERS OR SPENT FOR MORE USEFUL PURPOSES, SUCH AS CUSTOMER ASSISTANCE TO THE POOR OR RESEARCH ON RENEWABLE ENERGY SLIDE, THREE CONSERVATION PROGRAMS. IF YOU CAN CALL THEM THAT ARE IN QUESTION HERE, THEY INCLUDE REBATES FOR TANKLESS WATER HEATERS, CENTRAL FURNACES AND CLOTHES DRYERS.

THIS EQUIPMENT WILL NEVER PAY FOR ITSELF IN ENERGY SAVINGS OVER LIFE OF THE APPLIANCES.

UH, THE WASTED MONEY AMOUNTS TO AS MUCH AS $1.8 MILLION A YEAR OR $5.5 MILLION OVER THE COURSE OF THREE YEARS, SLIDE TANKLESS, WATER HEATER REBATES WASTE OVER HALF OF THIS MONEY.

THEIR COMBUSTION IS MORE EFFICIENT AND THEY DO NOT LOSE HEAT THROUGH STORAGE TANK WALLS LIKE CONVENTIONAL UNITS.

DO THESE MIGHT BE A GOOD INVESTMENT IN COMMERCIAL SETTING LIKE A LAUNDROMAT OR AN ALL-NIGHT RESTAURANT IN LOW TRAFFIC, RESIDENTIAL SETTINGS.

THEY ARE A HORRIBLY BAD INVESTMENT CONSULTANTS FOR BOTH TEXAS GAS SERVICE AND THE CITY CLAIM.

THESE UNITS HAVE MINIMAL COSTS, UH, COST PREMIUMS, WHICH ARE LESSENED EVEN FURTHER, UH, BY THEIR SUPPOSEDLY LONGER LIFE.

BUT NEITHER CONSULTANT APPEARS TO HAVE LOOKED AT WHAT THE REAL COSTS ACTUALLY ARE.

I WENT TO EXTRAORDINARY LENGTHS TO REVIEW RECEIPTS SPENDING AT LEAST THREE DAYS OF UNPAID TIME.

I FOUND THAT THE AVERAGE COST OF A RETROFIT UNIT WAS ABOUT $5,000.

ANOTHER THING ABOUT THESE IS THAT THEY REQUIRE PERIODIC SCALE CLEANING, UH, TO MAINTAIN THEIR EFFICIENCY.

THE MOST RECENT ENERGY INFORMATION ADMINISTRATION OR REPORT ON RESIDENTIAL APPLIANCE COSTS ACTUALLY INCLUDES THIS IN ITS ECONOMIC DATA.

A GAS UTILITY RESEARCH GROUP ACTUALLY UNDERTOOK A PROJECT TO ADDRESS THE SCALE PROBLEM SLIDE.

AND THIS EQUIPMENT IS SUSCEPTIBLE TO FREEZE DAMAGE.

IN MY REVIEW, I FOUND 116 UNITS OVER HALF OF THOSE THAT I REVIEWED WERE DAMAGED BY WINTER STORM URI.

THIS PLACES, THE CLAIM OF INCREASED UNIT LIFETIME IN DOUBT, ALSO CONSIDER THAT THESE 116 TANKLESS UNITS ACHIEVE LITTLE OR NO SAVINGS WHILE MINIMAL SAVINGS CAN BE ACHIEVED BY REPLACING A CONVENTIONAL STORAGE TANK UNIT WITH A TANKLESS UNIT, LITTLE OR NO SAVINGS WILL BE ACHIEVED BY REPLACING A TANKLESS UNIT WITH ANOTHER TANKLESS UNIT.

THIS IS SUCH AN EGREGIOUS WASTE OF RATE PAYER MONEY THAT I REQUESTED THE CITY'S REGULATORY OFFICE TO CONDUCT AN IMPRUDENCE INVESTIGATION TO GET $89,000 IN RATE PAYER MONEY REIMBURSED BY THE GAS COMPANY.

THIS INVESTIGATION HAS NOT OCCURRED.

SLIDE NOW MOVING TO GAS, CLOTHES DRYERS.

THIS IS PERHAPS THE MOST CREATIVE USE OF GREENWASHING.

I HAVE EVER SEEN.

TEXAS GAS SERVICE WILL GIVE RATE PAYERS AS MUCH AS $325 TO REPLACE A GAS CLOTHES DRYER WITH ANOTHER GAS CLOTHES DRYER.

THE CONSERVATION DEVICE REQUIRED A MOISTURE SENSOR WILL SAVE ABOUT A DOLLAR 31 CENTS A YEAR.

THIS IS A PAYBACK OF ABOUT 248 YEARS FOR AN APPLIANCE THAT LASTS 13 YEARS SLIDE.

AND THEN THERE ARE CENTRAL FURNACES.

THIS EQUIPMENT IS MORE THAN 92% EFFICIENT COMPARED TO A BASE EFFICIENCY OF ABOUT 80%.

THIS COMES HOWEVER, AT A STEEP PREMIUM, THESE UNITS MIGHT PAY FOR THEMSELVES IN COLD WINTER CLIMATES LIKE MINNEAPOLIS OR THE YUKON

[00:10:01]

MOUNTAIN RANGE, BUT NOT IN THE SOUTHERN UNITED STATES.

I WANT TO ALSO BRIEFLY SPEAK TO THE ISSUE OF RENEWABLE ENERGY SLIDE.

UM, COULD YOU, UH, GO SLIDE FURTHER.

I WANT TO BRIEFLY SPEAK TO THE ISSUE OF RENEWABLE ENERGY, TEXAS GAS SERVICE RELEASED A REPORT IN 2020.

I'M SURE MOST OF YOU HAVE GLANCED AT IT.

UH, AND IT TALKED ABOUT THE POTENTIAL OF RENEWABLE NATURAL GAS.

I HAD THE OPPORTUNITY TO READ THE WHOLE THING AND FOUND IT LACKING IT'S SUBSTANCE.

IT IS LARGELY IMPRACTICAL GIVEN THE LIMITED AVAILABILITY AND EXTREMELY HIGH COSTS OF BIOGENIC GAS AT WORST.

IT IS A DELAYING TACTIC TO AVOID MORE SUBSTANTIAL ACTION SLIDE.

UH, I BELIEVE THAT RESEARCH IN SOLAR FUELS THAT DIRECTLY USE SOLAR ENERGY OR THAT MAKE USE OF HYDROGEN AND METHANE PRODUCED WITH RENEWABLE ENERGY MAY BE A MORE LONG MAY BE OF MORE LONG-TERM VALUE.

UH, NOW, WOULD YOU GO BACK TWO SLIDES PLEASE, NATASHA.

UH, I WANT TO TURN TO HOW YOUR COMMISSION WAS TREATED THIS FALL.

YOU WERE PREVENTED FROM GOING ON RECORD ABOUT THIS RECKLESS SPENDING IN SEPTEMBER THE CONSERVATION ADJUSTMENT CLAUSE, CLEARLY STATES QUOTE, THE COMMISSION WILL REVIEW THE PROGRAM SELECTION IN BUDGET, PROVIDE INPUT AND MAKE A RECOMMENDATION TO THE CITY OF HOWEVER, THE REGULATORY OFFICE OF THE CITY DID NOT POST THIS FOR A VOTE ONLY DISCUSSION.

THIS MANIPULATION IS A VIOLATION OF THE TARIFF.

YOUR COMMISSION AS A BODY CANNOT MAKE A RECOMMENDATION.

IF IT DOES NOT VOTE, IT IS PRETTY CLEAR.

AND THIS WAS NOT JUST AN OVERSIGHT.

I CONTACTED THE REGULATORY OFFICE PERSONALLY, BEFORE THIS MEETING AND INFORMED THEM OF THE ERROR AND NO CORRECTIVE ACTION WAS TAKEN.

UM, WOULD YOU, UH, GO BACK, GO FORWARD AGAIN AND AGAIN AND AGAIN.

THANK YOU.

UH, SO I'M PROPOSING SOMETHING DIFFERENT.

LET'S TAKE THE WASTED CONSERVATION MONEY MEANT FOR GREENWASHED MARKETING AND IMPLEMENT A PLAN TO HELP THE POOR ON THEIR BILL.

LET'S TAKE THE MONEY MEANT FOR THINGS LIKE DRYERS WITH A 248 YEAR PAYBACK AND FUND PRAGMATIC, RENEWABLE RESEARCH.

LET'S TAKE THE WASTED MONEY AND GIVE SOME OF IT BACK TO THE RATE PAYERS WHO ARE ALREADY REELING FROM TEXAS GAS SERVICE RATE INCREASES.

THEY'VE ALREADY GONE UP ABOUT 25% IN THE LAST TWO YEARS.

YOU HAVE TWO RESOLUTIONS ON THIS TONIGHT, THE FIRST, WHICH SPEAKS TO COST EFFECTIVENESS OF ALL THESE CONSERVATION PROGRAMS WILL HOPEFULLY RECTIFY PAST PROBLEMS, SUCH AS BENEFIT COST ANALYSES THAT ARE GAMED AND THREE YEAR TARIFFS, WHICH ARE NOT REVIEWED REGULARLY.

I SUGGEST YOU UPDATE THE LANGUAGE TO READ FOR THE YEAR 2023.

UH, SO WE CAN HOPEFULLY GET CITY COUNCIL TO ACT ON THIS NEXT YEAR, BEFORE EVEN MORE MONEY GETS WASTED.

THE SECOND RESOLUTION SPEAKS TO ESTABLISHMENT OF A COMMUNITY BENEFIT FUND AT THE GAS COMPANY THAT WILL FUND LEGITIMATE ENERGY CONSERVATION PROGRAMS ASSISTANCE TO THE POOR AND RENEWABLE ENERGY RESEARCH.

IT WILL ALLOW WE PURPOSING OF THESE WASTED CONSERVATION FUNDS.

I URGE PASSAGE OF BOTH.

LET'S GET COUNCIL TO STOP THIS GREENWASHING ONCE AND FOR ALL NEXT YEAR AND DO SOMETHING USEFUL WITH THE MONEY.

I APPRECIATE YOUR ATTENTION.

THANK YOU VERY MUCH, PAUL.

ALL RIGHT.

UH, BEFORE WE JUMP INTO THE AGENDA, JUST A QUICK NOTE, I BELIEVE EVERYONE'S HAS SIGNED IN.

REMEMBER, UH, WHEN YOU'RE SPEAKING, EVERYONE HAS A MIC, UH, PRESS THE BUTTON ON THE RIGHT WILL TURN RED, UH, WHICH MEANS THAT YOUR MIC IS LIVE.

ALL RIGHT.

UH, FIRST UP

[APPROVAL OF MINUTES]

ITEMS WANTED TO APPROVE THE MINUTES OF THE AUGUST 17TH MINUTE MEETING, AS WELL AS THE, UH, SEPTEMBER 21ST MEETING, UH, COMMISSIONERS.

YOU SHOULD HAVE RECEIVED, UH, BOTH OF THESE DOCUMENTS IN THE, UH, PACKET THAT WAS SENT OUT PREVIOUSLY.

DID ANYONE HAVE ANY CORRECTIONS TO THOSE?

[00:15:02]

ALL RIGHT.

HEARING NONE.

THE MINUTES ARE APPROVED.

WE WILL MOVE ON

[3. Generation Portfolio Announcement Briefing]

TO ITEM NUMBER THREE GENERATION PORTFOLIO ANNOUNCEMENT BRIEFING.

I BELIEVE WE HAD PAT SWEENEY FROM AUSTIN ENERGY.

UH, I'M SORRY.

I DIDN'T REALIZE WE WERE TAKING A VOTE THERE.

IS THAT WHAT WE'RE DOING ON? UM, IF THERE ARE NO CORRECTIONS, THEN THE MINUTES ARE APPROVED.

UH, THIS PROCEDURE WAS, UH, SO WE HAD A PARLIAMENTARY TRAINING ABOUT A MONTH AGO OF WHICH YOU WERE INVITED TO ATTEND.

RIGHT? SO THIS PROCEDURE WAS, UH, WHAT THE CITY CLERK'S OFFICE HAS NOW GIVEN US FOR ADOPTION OF, UH, ADMINISTRATIVE ITEMS, SUCH AS THE MINUTES.

OKAY.

SO IT'S BASICALLY LIKE A CONSENT AGENDA.

IS THAT, UH, THAT'S CORRECT.

OKAY.

THEN I WOULD LIKE TO BE SHOWN VOTING.

NO REPEAT THAT.

I WANT TO BE SHOWN VOTING.

NO, ON THAT ITEM.

ALL RIGHT.

ALL RIGHT.

UH, PAT, ARE YOU READY? YES.

YOU BET YOU WHERE'S YOURS A GOOD EVENING COMMISSIONERS.

MY NAME IS PAT SWEENEY.

I'M VICE-PRESIDENT FOR POWER PRODUCTION FOR AUSTIN ENERGY.

UM, UH, I'M HERE TO GIVE YOU AN UPDATE, UH, ON AN ANNOUNCEMENT THAT WE MADE BACK ON NOVEMBER 1ST REGARDING OUR GENERATION PORTFOLIO.

UH, THERE WERE THREE THINGS THAT WERE INCLUDED IN THAT ANNOUNCEMENT ARE, ARE THE STATUS OF OUR NEGOTIATIONS REGARDING THE FAYETTE RETIREMENT, THE RETIREMENT OF OUR DECKER TWO STEAM UNIT AND THE NACADOCIOUS BIOMASS PLANT.

UM, WE CAN GO TO GOING ADVANCE TWO SLIDES, I GUESS.

OH, THERE WE GO.

UM, SO RELATIVE TO FAYETTE, UM, UH, AND, AND FOR SOME BACKGROUND, MAKE SURE EVERYONE'S ON THE SAME PAGE.

UH, AUSTIN ENERGY CO OWNS THE FAYETTE POWER PROJECT OR FPP WITH LCRA.

WE, WE OWN 50% OF UNITS, ONE AND TWO.

THERE ARE THREE UNITS.

AUSTRALIA OWNS THE ENTIRETY OF UNIT THREE.

UH, LCRA IS THE PROJECT MANAGER.

SO THEY MANAGE THE FACILITY.

UH, THERE'S A JOINT OWNERSHIP AGREEMENT THAT GOVERNS THE OPERATION OF THE FACILITY.

AND IT DOES NOT SET OUT HOW ONE PARTY CAN RETIRE ONLY ITS SHARE OF THE PROJECT.

SO AS A RESULT, UH, WE ENTERED INTO NEGOTIATIONS WITH LCRA RELATIVE TO OUR GOAL OF EXITING, ACTUALLY RE RETIRING OUR SHARE OF THE FAYETTE POWER PROJECT, UH, AT, AND WE MADE THIS ANNOUNCEMENT BECAUSE WE'VE BEEN UNABLE TO REACH TERMS THAT, UH, WOULD ALLOW US TO SHUT IT DOWN.

AND AT THE END OF THE DAY, THOSE TERMS NEED TO BE MUTUALLY AGREEABLE BECAUSE OF THE PARTNERSHIP.

UH, THE COUNSEL WAS FULLY BRIEFED, UH, THROUGHOUT THIS PROCESS, UH, IT BECAME NECESSARY GIVEN THE TIMEFRAME AND THE IMPASSE.

WE REACHED THAT, UH, WE MAKE THIS ANNOUNCEMENT NOW, UH, IN THAT WE WILL BE PLANNING OUR BUDGET AT THE BEGINNING OF NEXT YEAR.

AND THAT BUDGET FOR THE FOLLOWING YEAR WILL SPAN INTO THAT PERIOD THAT THE UNIT WOULD, THOSE UNITS WOULD HAVE OTHERWISE RETIRED.

SO WE HAVE TO MAKE A BUDGET DECISIONS THAT REFLECT THAT REALITY, UM, GO TO THE NEXT SLIDE.

SO WHAT'S NEXT RELATIVE TO FAYETTE.

UH, WE'RE GOING TO CONTINUE TO RUN OUR PORTION, UH, BUT WE WILL MINIMIZE A SCHEDULED OUTPUT USING OUR REACH, UH, PROGRAM.

AND, UH, THAT PROGRAM, AS YOU KNOW, HAS BEEN UNDERWAY FOR ABOUT A YEAR AND A HALF NOW, IT'S BEEN PRETTY SUCCESSFUL AND WE AIM TO IMPROVE ON THAT SUCCESS, UH, THROUGH ADDITIONAL USE OF REACH THAT STRATEGY CONSIDERS A COST OF CARBON AND THE UTILITIES OFFER TO SELL THE GENERATION FROM FAYETTE.

IN OTHER WORDS, WE PUT A PRICE ADDER THAT REDUCES THE CALLING OF THE UNIT GOING UP OR THE UNITS.

AND, UH, THE THIRD BULLET IS ALSO PARTICULARLY IMPORTANT THAT WE'RE GOING TO CONTINUE TO NEGOTIATE WITH LCRA, UH, REGARDING, UH, RETIREMENT, UH, THE DOORS, THE DOORS OPEN REMAINS OPEN.

WE STILL HAVE OUR GOALS AND WE STILL AIM TO ACHIEVE THOSE GOALS.

UH, BUT AGAIN, WE HAD TO REFLECT REALITY WHERE WE ARE NOW AS WE MOVE INTO A BUDGET SEASON COMING UP HERE IN JUST A FEW MONTHS, THAT WOULD ENCOMPASS THAT, THAT PERIOD THAT THE, UH, WAS PLANNED FOR THE RETIREMENT.

UM, SO, UH, ONE OF THE OTHER THINGS I WOULD POINT OUT IS THESE UNITS ARE, UH, 42 YEARS OLD AND 40, 41 AND 42 YEARS OLD RESPECTABLY.

THEY'RE NOT GETTING ANY YOUNGER LIKE ME.

UH, SO THERE'S A, THERE'S A FUTURE.

UH, THEIR FUTURE OPERATION IS GOING TO ALSO BE HIGHLY DEPENDENT UPON THEIR VIABILITY GOING FORWARD, UH, BOTH ECONOMICALLY AND BY AGE.

UH, SO THAT'S SOMETHING TO KEEP IN MIND.

WE'LL GO TO THE NEXT SLIDE.

UH, SO THE OTHER ONE, THE OTHER ELEMENTS OF OUR ANNOUNCEMENT WAS THE RETIREMENT OF DECKER STEAM UNIT TWO.

THIS HAS BEEN A LONGSTANDING

[00:20:01]

PLAN, UH, TO RETIRE THIS UNIT.

BY THE END OF THIS YEAR, WE RETIRED DECKER STEAM UNIT ONE AT THE END OF LAST YEAR AS PER OUR RESOURCE PLAN, WE OPTED TO EXTEND THE OPERATION OF THAT UNIT FOR THREE MORE MONTHS INTO 2022, SO THAT WE ARE NOW PLANNING TO RETIRE AT, IN MARCH, MARCH 31ST OF NEXT YEAR.

AND THAT'S REFLECTIVE OF THE, WHAT HAPPENED IN FEBRUARY AND THE CURRENT STATE OF AFFAIRS IN THE ERCOT MARKET.

SO WE FELT IT WAS PRUDENT FOR US TO JEANNE TO MAKE THAT UNIT AVAILABLE FOR THOSE THREE MONTHS TO COVER THIS UPCOMING WINTER.

IT WAS A PRETTY EASY EXERCISE TO JUST EXTEND THE OPERATION A BIT.

BUT OVERALL THAT UNIT ALONG WITH IT'S A SISTER UNIT THAT ARE RETIRED REFLECTS MUCH, LIKE I MENTIONED ON FAYETTE, THE AGE OF THE, THESE UNITS ARE ABOUT ROUGHLY ABOUT 10 YEARS OLDER, GENERALLY SPEAKING IN THE FA UNITS, UH, THEY'RE LOWER, EFFICIENT THAN A NEWER MORE MODERN, NATURAL GAS UNITS, LIKE OUR COMBINED CYCLE UNIT AT THE SANDHILL FACILITY.

UH, AND THEY HAVE, UH, AND, AND ULTIMATELY WHEN WE SHUT THEM DOWN, WE WILL HAVE LOWER CARBON EMISSIONS AS A RESULT.

NEXT SLIDE, I'VE COVERED A LITTLE BIT OF THIS, BUT SOME PARTICULARS ABOUT HOW THAT WORKS IN ERCOT.

UH, WHAT WE DID WAS WE SUBMITTED WHAT'S CALLED A NOTICE OF SUSPENSION OF OPERATION OR AN NSO, UH, THAT IS REQUIRED TO BE DONE 150 DAYS BEFORE YOUR INTENDED RETIREMENT DATE OF A GENERATOR AND THAT'S FOR ALL MARKET PARTICIPANTS.

SO WE, EVERYONE HAS TO FOLLOW THE SAME PROCESS.

AGAIN, THE EFFECTIVE DATE THAT WE SUBMITTED IS FOR MARCH 31ST, 2022, UH, AND IN THIS PROCESS, ERCOT DETERMINES WHETHER A UNIT IS NEEDED TO CONTINUE, UH, NEEDS TO CONTINUE OPERATING, TO MAINTAIN RELIABILITY OF THE SYSTEM.

UH, IF IT MAKES THAT DETERMINATION, IT CAN ENGAGE THE ONGOING OPERATION THAT UNIT THROUGH WHAT'S CALLED A RELIABILITY LIABILITY, MUST RUN COMMITMENT OR CONTRACT, UH, WHEREBY THEY COMPENSATE THE GENERATOR OWNER FOR THE ONGOING OPERATION, THAT UNIT, UH, THOSE, THOSE ARE PRETTY FEW AND FAR BETWEEN THEY'VE NOT REALLY BEEN ANY IN RECENT TIMES, UH, AND THAT THOSE ARE INTENDED TO BE, UH, INTERIM AGREEMENTS USUALLY UNTIL THE REQUIRED TRANSMISSION IMPROVEMENTS CAN BE MADE IN THOSE ONCE THOSE IMPROVEMENTS WERE MADE THAN THE UNITS ALLOWED TO BE RETIRED, DON'T HAVE ANY INDICATION THAT THIS WILL BE AN ISSUE, BUT, BUT IT IS SOMETHING THAT WE HAVE TO HAVE THE APPROVAL OF ERCOT AS, AS WHAT ANYONE TO RETIRE UNIT.

AND SO, UH, WE HAVE NOT HEARD YET ON THAT, UH, THAT THEY HAVE UP TO THAT FULL 150 DAYS TO DO THAT.

ALTHOUGH WE WOULD EXPECT SOME TIME MAYBE MIDWAY THROUGH THAT A WINDOW OF TIME TO HEAR, UH, AND CONFIRM THE ABILITY TO CLOSE AS WE INTEND THAT UNIT, UH, BEYOND THAT AT DECKER, UH, THERE ARE FOUR, UH, GAS TURBINES THAT ARE THERE FOR FOUR 50 MEGAWATT TURBINES, THEY'RE PEAKER UNITS, QUICK-START UNITS.

WE ONLY TURN THEM ON AND THEN TURN THEM OFF WHEN THEY'RE NEEDED.

UM, AND SO THEY CAN, THEY CAN BE DISPATCHED QUICKLY, RESPOND QUICKLY TO PRICE, UH, CHANGES IN DEMAND CHANGES RAPIDLY.

SO THEY WILL CONTINUE TO REMAIN AN OPERATION.

THERE'S NOT YET A SHUTDOWN DATA STABLISH FOR THEM.

NEXT, NEXT SLIDE.

UH, THE LAST ITEM WE WANTED TO MENTION WAS THE NACADOCIOUS BIOMASS PLANT, UH, WILL BE AVAILABLE THROUGHOUT THE YEAR, COMING UP HERE PREVIOUSLY.

UH, WE HAD, UH, AS YOU MAY KNOW, THAT'S A WOOD WASTE PLANT, UH, UP IN THE NORTHEAST PART OF TEXAS, UH, HEAVILY, UH, FORCED IT, IF YOU HAVEN'T BEEN IN THAT AREA WITH A LARGE FORCE INDUSTRY, UH, WE PREVIOUSLY HAD IT UNDER WHAT'S CALLED A SEASONAL MOTH BALL, MEANING WAS, UH, MADE AVAILABLE TO RUN DURING THE HIGH ENERGY DEMAND OR HIGHER PRICE MONTHS, NAMELY THE SUMMER.

UH, AND THAT JUST REFLECTED THE ECONOMIC REALITY THAT IT WAS BEST SUITED FROM ITS PRICE POINT TO RUN DURING THOSE PERIODS AND NOT COST US EXTRA MONEY.

UH, YOU MAY RECALL THAT WE PURCHASED THIS PLANT, UH, FROM UNDER A PURCHASE POWER AGREEMENT THAT HAD BEEN OUTSTANDING WITH SOUTHERN COMPANY, UH, THAT PURCHASE, UH, BUYING THAT DOWN, SO TO SPEAK, UH, SAVED US ABOUT 275 MILLION OVER WHAT WOULD HAVE, WOULD HAVE OTHERWISE BEEN THE LIFE OF THAT PPA? UH, ONE OF THE ADVANTAGES OF OWNING THE UNIT IS WE HAVE FULL CONTROL OVER ITS OPERATION, AND WE'RE NOT SUBJECT TO SOME LIMITATIONS THAT WE HAD ON THE PPA.

AND SO, FOR EXAMPLE, WE'VE MADE SOME OPERATIONAL IMPROVEMENTS THAT WE CAN GET THE UNIT ON A BIT QUICKER THAN, THAN WOULD HAVE OTHERWISE BEEN THE CASE IN THE PAST.

PLUS THE MARKET CONDITIONS ARE SUPPORTING ITS ONGOING OPERATIONS.

THAT RE THAT'S A REFLECTION OF THE HIGH, NATURAL GAS PRICES THAT ARE PERSISTING, UH, CURRENTLY AND OUT IN THE NEXT YEAR THAT MAKE THE UNIT VIABLE, HAVE MADE IT VIABLE.

IT'S BEEN ONLINE QUITE A BIT SINCE LAST, UH, LAST SUMMER WHEN IT CAME ON, UM, AND, AND, AND IS EXPECTED TO CONTINUE TO BE ON AND AVAILABLE THROUGHOUT THE NEXT YEAR OF NEXT LINE.

SO AS WE LOOK FORWARD, UH, OUR CURRENT AUSTIN ENERGY GENERATION PORTFOLIO, WE'RE 66% CARBON FREE, UH, VERSUS

[00:25:01]

34%, UM, UH, CONVENTIONAL POWER ON OUR, ON OUR GENERATING CAPACITY.

AND IF YOU LOOK TO THE RIGHT, UH, AFTER MARCH, 2022, ONCE THE DECKER UNIT TO ASSUMING IT'S RETIRED, UM, WE'LL HAVE SEVEN SOLAR FARMS THAT NEARLY A THOUSAND MEGAWATTS, EIGHT WIND PROJECTS, AND ALMOST 1800 1800 MEGAWATTS, THE SOUTH TEXAS NUCLEAR PROJECT FOUR IN 30 MEGAWATTS, OUR SANDHILL ENERGY CENTER, WHICH IS 570 MEGAWATTS.

IT'S A NATURAL GAS FACILITY.

OF COURSE, THE POWER PLANT, UH, WHICH IS 590 MEGAWATTS, OUR SHARE, UH, THE NACADOCIOUS A BIOMASS PLANT, WHICH IS A HUNDRED MEGAWATTS.

AND THEN THE DECKER QUICK START GAS TURBINES, AS I MENTIONED IT, 200 MEGAWATTS.

AND SO AT THAT POINT, UH, AFTER ON THE ASSUMPTION THAT DECKER TWO IS ALLOWED TO RETIRE, THEN THE MARCH, THEN WE WOULD BE AT 71% ON A CAPACITY BASIS.

CARBON-FREE IF WE'LL GO TO THE NEXT SLIDE, THAT'S IT ACTUALLY.

SO I CAN ENTERTAIN QUESTIONS THAT YOU MIGHT HAVE SEEN IN MY SLIDE DECK.

THANK YOU VERY MUCH.

UM, COMMISSIONER DOES QUESTIONS, UH, COMMISSIONER CHEVERIA.

SO WITH RESPECT TO THE FAYETTE POWER PLANT, I WAS CURIOUS ABOUT WHETHER AUSTIN ENERGY'S LOOKED AT ANY OTHER, UM, OPTIONS OTHER THAN REACH IN ORDER TO REDUCE EMISSIONS FROM THE PLANT, FOR EXAMPLE, ANY TECHNOLOGICAL OPTIONS THERE THAT CAN REDUCE EMISSIONS.

UH, THERE THERE'S BEEN CONSIDERATION OF THAT IN THE PAST, LIKE A CARBON CAPTURE, SOMETHING LIKE THAT.

UH, BUT THE ECONOMICS OF THAT ARE VERY TOUGH.

AND AGAIN, GIVEN OUR PARTNERSHIP ARRANGEMENT, WE CAN'T, WE CAN'T IMPLEMENT SOMETHING LIKE THAT ON OUR OWN.

SO EVEN IF YOU CAME UP WITH SOMETHING ELSE HERE, I WOULD NEED TO AGREE TO THAT.

YES, THOSE UNITS ARE, ARE SORTA LIKE TENANTS IN COMMON.

THEY'RE THEY'RE THERE, WE DON'T, WE HAVE A SHARE OF TWO UNITS, NOT ONE OR THE, IS IT BECAUSE ELSEWHERE I WOULD HAVE TO SHARE IN THE COST OF IMPLANTS? WELL, THEY WOULD HAVE TO AGREE WITH US.

SO LET'S, LET'S USE AS AN EXAMPLE, IF WE SAID THAT WE WOULD LIKE TO DO THAT, UH, THEN THEY WOULD HAVE TO AGREE WITH US TO DO THAT.

AND THEN THEY WOULD ULTIMATELY SHARE IN THAT COST.

OKAY.

JUST HYPOTHETICALLY, UM, HYPOTHETICALLY, IF AUSTIN ENERGY WANTED TO IMPLEMENT SOMETHING AND LCRA DIDN'T HAVE TO SHARE IN THE COST, WOULD WE CONTRACTUALLY BE ABLE TO DO THAT? NO, WE COULDN'T.

WE COULDN'T MODIFY THE UNIT, THE OPERATION OR NATURE OF THOSE UNITS ON OUR OWN.

OKAY.

OKAY.

W WHAT DO YOU, UM, PROJECT THE USEFUL LIFE IS LEFT FOR THE FAYETTE? I, YOU KNOW, I DON'T HAVE A HARD PROJECTION OF MOST POWER PLANTS WHEN THEY'RE BUILT, HAVE, HAVE A NOMINAL LIFE OF 30 TO 50 YEARS.

UH, YOU KNOW, THEY'RE LIKE A LOT OF THINGS WHERE YOU CAN KEEP PUTTING MONEY INTO THEM AND YOU CAN MAKE THINGS GO THINK OF ANTIQUE CARS THAT YOU SEE ON THE ROAD FROM TIME TO TIME IT'S POSSIBLE, BUT THAT'S A HOBBY, YOU KNOW, UH, GENERALLY SPEAKING, UH, IT'S NOT THE ECONOMICS, THE WEAR AND TEAR ON THE FACILITIES, UH, DICTATE WHEN THAT END OCCURS.

AND SO, UH, THERE'S BEEN A LOT OF MARKET PRESSURE IN RECENT YEARS, UH, THAT IS MAKING THE OPERATION, THAT FACILITY AND ONES LIKE IT, MORE CHALLENGING.

UH, I SUSPECT THAT'S GOING TO CONTINUE.

AND AGAIN, THOSE UNITS DON'T GET ANY YOUNGER.

AND, UH, WHEN YOU LOOK AT, UH, NEEDS TO POTENTIALLY RE MAKE MAJOR REPAIRS, IF THOSE NUMBERS ARE HIGH ENOUGH, IT WOULD PROBABLY, YOU KNOW, SPELL A SHORTENED, UH, YOU KNOW, SHORTEN LIFE AT THAT POINT.

WELL, THEY ALSO HAVE TO AGREE THAT THE USEFUL LIFE.

SO AGAIN, ULTIMATELY WE'RE, WE ARE PARTNERS AND THERE HAS TO BE AN AGREEMENT AS TO WHENEVER THAT END COMES.

OKAY.

OKAY.

OKAY.

I DON'T, I DON'T HAVE ANY OTHER QUESTIONS.

THANK YOU.

ALL RIGHT.

BUT I THANK YOU FOR BEING HERE.

SURE.

I'M ON A SLIDE SEX TOXIN TALKING ABOUT DECKER STEAM UNIT TOO.

SO WHEN ED RETIRED, UH, ARE THERE ANY ISSUES WITH CAPACITY FOR EAST AUSTIN RESIDENTS OR ANY OTHER BUSINESSES IN THAT AREA? WOW.

NO, WE'RE NOT AWARE OF ANY.

UH, AND, AND SO JUST TO BE CLEAR ON A COUPLE OF POINTS ONE, UH, SO OUR GENERATORS, THIS IS TRUE OF ALL THE FOLKS IN ERCOT.

WE DON'T, OUR GENERATORS DON'T DIRECTLY SERVE OUR DEMANDS OF THE ENERGY FROM, AND THIS IS TRUE OF OUR CONVENTIONAL UNITS THAT ARE LOW LOCAL OR NEARBY, OR ANY OF THE REMOTE ONES, FAYETTE, STP, OR, OR ANY OF THE RENEWABLE UNITS THAT, THAT POWER JUST IS PUSHED IN THE MARKET.

RIGHT.

AND WE SELL IT IN AND WE PAYMENT BACK.

SO THEY'RE NOT MATCHED UP TO JUST THE AUSTIN ENERGY LOAD NOW IN A VERY LOCAL SENSE.

AND THIS IS TRUE AGAIN, OF ANY GENERATOR.

UH, AND THIS IS WHAT THE ERCOT PROCESS IS DESIGNED TO DO.

THERE MIGHT BE, THEY'RE NOT SAYING THERE IS IN THIS CASE, UH, WE DON'T BELIEVE THERE IS, BUT THEY LOOK AT THAT RELATIVE

[00:30:01]

TO A GENERATOR BEING RETIRED AS TO WHETHER IN THAT VERY SPECIFIC AREA, THE TRANSMISSION LINES THAT COME IN AND OUT OF THAT PLANT MIGHT CREATE A, HAVE A BOTTLENECK SITUATION, FOR EXAMPLE, WHERE THERE'S AN INADEQUATE AMOUNT OF, UH, FLOW OF POWER, UH, COMING, YOU KNOW, COMING OUT VERSUS COMING IN.

AND SO, UH, BUT IT WOULD NOT BE, IT WOULD NOT BE ON A NEIGHBORHOOD TYPE BASIS.

IT'S MORE, IT'S A GRID GRID LEVEL BASIS, BUT IN THAT, THAT REGION, AROUND THAT FACILITY.

OKAY.

UH, ONE MORE QUESTION ON, ON A SLIGHT EIGHT, UH, THIS HAS TO DO WITH THAT 71% THAT YOU WERE TALKING ABOUT 66 VERSUS 71, RIGHT? SO IN THE PORTFOLIO, UH, IT STILL TALKS ABOUT FED CALLS.

SO THAT'S MEAN THAT EVEN HAVE 71% CARBON-FREE MINUS THE FAYETTE AND SAN HILL AND DECKER OR SO, SO THIS IS, THIS, THESE NUMBERS ARE BASED ON THE PRODUCTION CAPACITY, THE FACILITIES.

OKAY.

UH, MEANING IT DOESN'T, IT DOESN'T COUNT THE ENERGY OUTPUT THAT COMES FROM THEM.

UH, BUT ON THAT BASIS, THIS WOULD BE AFTER, YOU KNOW, AS A MARCH ON THE ASSUMPTION THAT WE DO RETIRE DECKER, THAT THESE, ALL OF THESE OTHER UNITS ARE STILL THERE AND OPERATING AND, AND ARE AVAILABLE OPERATE ANYWAY.

AND SO ON THAT BASIS, UH, THAT THAT'S WHAT THAT SPLIT WOULD BE ON CARBON EMITTING VERSUS NON-CARBON EMITTING.

OKAY.

ALL RIGHT.

THANKS.

SURE.

THANK YOU.

APPRECIATE THE UPDATE.

UM, COUPLE OF QUESTIONS, UM, ON FAYETTE, I'M WONDERING, YOU MENTIONED THIS ISSUE OF, YOU KNOW, THE PLANT IS AGING, AND YOU'RE GOING TO, AT SOME POINT HAVE TO START MAKING INVESTMENTS IF IT'S EVEN GONNA BE ABLE TO KEEP RUNNING.

IS THAT SOMETHING THAT AUSTIN ENERGY AS A PARTNER HAS TO APPROVE OF, OR DOES LCRA GET TO MAKE THOSE INVESTMENTS AND THEN JUST CHARGE AUSTIN ENERGY? YOU'RE HALF.

SO AUSTIN IS PART OF OUR ROLE.

THERE.

WE, WE PARTICIPATE ON A MANAGEMENT COMMITTEE AND THAT COMMITTEE APPROVES THE BUSINESS PLAN, WHICH INCLUDES THE BUDGET FOR THE FACILITY AND CAPITAL PROJECTS AND THINGS OF THAT SORT.

SO WE DO HAVE A VOICE IN, UH, THE APPROVAL OF SPENDING MONEY ON LIFE, EXTENSION OP YOU KNOW, THINGS OF THAT SORT THAT WOULD, UH, BE INTENDED TO EXTEND THE LIFE OR REPAIR SOMETHING LIKE THAT.

YES.

IS THAT LIKE A 50, 50 VOICE OR SOMETHING LESS? UH, WELL, IT'S, IT'S A PROPORTION.

IT'S OUR OWNERSHIP SHARE VOICE FOR OUR TWO.

RIGHT.

OKAY.

THAT'S HELPFUL.

UM, AND THEN I GUESS MY OTHER QUESTION IS KIND OF AROUND REACH OR ANY OTHER STRATEGY TO NOT RUN THE UNIT OR RUN THE UNIT LESS.

HOW DOES THAT TRANSLATE INTO THE OPERATING COSTS THAT AUSTIN ENERGY HAS TO PAY? DOES IT, IF SAY AUSTIN ENERGY ON A GIVEN DAY IS NOT RUNNING IT'S HALF DO, DOES THE UTILITY STILL HAVE TO PAY HALF OF THE OPERATING EXPENSES OR DOES LCRA HAVE TO COVER THAT? SO YOU CAN IMAGINE, SO FE IT'S LIKE, UM, VIRTUALLY ANY OTHER KIND OF CONVENTIONAL POWER PLANT.

UM, YOU, YOU, YOU HAVE A CERTAIN EXPENSE FOR JUST BEING SITTING THERE RIGHT.

AND AVAILABLE.

SO YOU'VE, YOU'VE BUILT IT, HAVE THE MORTGAGE ON IT, YOU PAY THE FOLKS THAT, THAT ARE THERE TO OPERATE IT AND MAINTAIN IT.

AND SO YOU HAVE SOME CERTAIN LEVEL OF A FIXED EXPENSE THAT THAT EXPENSE WOULD STILL BE THERE.

IT'S WHAT, WHERE THE DIFFERENCE IS, IS JUST THE, THE VARIABLE EXPENSE, WHICH IS IN THIS CASE, IN THIS CASE WILL BE FUEL.

WE, WE WOULD NOT BE BURNING SOME OF THAT FUEL.

OKAY.

OKAY.

AND SO EVEN IF AUSTIN ENERGY SAY WERE TO SAY, WE'RE NOT, WE'RE NOT GOING TO RUN OUR PORTION ALL YEAR, YOU WOULD STILL BE RESPONSIBLE FOR PAIN, HALF OF THOSE FIXED EXPENSES, OR IF IT WAS A MORE KIND OF PERMANENT THING, WOULD THAT CHANGE, RIGHT.

SO WE HAVE, SO THOSE FIXED EXPENSES ARE SPLIT ON, ON OWNERSHIP SHARES.

YES.

YUP.

UM, YEAH.

THANKS FOR, UH, PRESENTING.

UM, I WAS CURIOUS IF THE DECISION TO CONTINUE RUNNING OR, OR TO, TO, UM, EXTEND THE, SORT OF EXTEND THE DECK HERE TO, UM, SORRY.

I'M PROBABLY GETTING TOO FAR AWAY FROM THE MIC.

UM, WAS THAT JUST AN AUSTIN ENERGY AND TONAL DECISION OR WAS THAT A COUNCIL DECISION OR AN IN CONSULTATION WITH THEM? COULD YOU DESCRIBE THAT? SO WE DID BRIEF COUNSEL AHEAD OF TIME ON, ON THAT, THAT PLAN.

YES.

OKAY.

UM, AND LET'S SEE,

[00:35:04]

UM, IS THERE ANY DISCUSSION ON, UM, INCREASING THE PRICE ADDER FOR REACH, UH, GIVEN THAT, YOU KNOW, THE COAL PLANT WON'T BE, UH, YOU KNOW, AT LEAST, UH, IN THEORY WON'T BE AS RETIRED AS QUICKLY.

AND SO IN, IN THAT SENSE, THERE WOULD BE MORE CARBON EMISSIONS.

SO I DON'T HAVE PARTICULARS, BUT, UH, THAT'S WHAT WE'RE GOING TO BE LOOKING AT AS TO HOW TO USE BREACH MORE.

AND SO ONE OF THE WAY, THE BASIC WAY YOU WOULD PROBABLY DO THAT IS TO INCREASE THE PRICE, ADD HER TO DECREASE THE AMOUNT OF OUTPUT MORE THAN IT WOULD OTHERWISE HAVE BEEN.

OKAY.

THANKS YET.

THAT'S WHAT I HOPE TO HEAR.

SO, PAT, SO WHEN YOU IMPLEMENT REACH, WHAT YOU'RE DOING IS YOU'RE ADDING A KIND OF AN ARTIFICIAL AMOUNT TO THE BID PRICE OF THAT UNIT TO MAKE IT RUN LESS CORRECT.

RIGHT.

AND I MEAN, HOW DOES THAT INTERACT WITH LCRA? I MEAN, DO THEY HAVE INPUT INTO THAT AS WELL? NO, WE, WE EACH HAVE, WE HAVE DISPATCH CONTROL OVER OUR SHARE OF, OF THE UNITS.

HOWEVER, NEITHER PARTY CAN SHUT DOWN A UNIT.

THERE'S A MINIMUM BELOW, WHICH WE CAN'T GO AND SAME IS TRUE OF THEM.

BUT ABOVE THAT MINIMUM, UH, UP, UP TO THE TOP OR DOWN TO THAT MINIMUM, IT'S BASED ON THE OFFER THAT WE MAKE FOR THE UNIT TO, INTO ERCOT.

IN OTHER WORDS, WE SAY ERCOT SEES, UH, A SET OF OFFERS FROM MERCK, FROM LCRA, FOR THEIR SHARE.

AND THEY SEE ONE FROM OUR SHARE AND THE SIGNALS COME IN SEPARATELY TO, TO MOVE THE UNIT UP OR DOWN.

BUT, BUT IT'S A SINGLE UNIT, RIGHT? I MEAN, HOW DOES THAT AFFECT THE, THE, THE PHYSICAL DISPATCH OF THE UNIT WHEN YOU'VE GOT TWO DIFFERENT? SO THERE'S, SO THERE'S TWO UNITS, RIGHT? UH, AND, AND THIS IS THE CASE FOR IN ERCOT.

THESE ARE CALLED JOINTLY THEY'RE JOINTLY OWN UNITS.

UH, SOUNDS OBVIOUS, I SUPPOSE, BUT, UH, THEY, IN ERCOT, THOSE UNITS ARE TREATED THROUGH A, A PRESET METERING SCHEME THAT RECOGNIZES THAT.

FOR EXAMPLE, WE OWN HALF OF A UNIT ONE AND TWO AT FAYETTE.

AND SO WHEN WE MAKE AN OFFER TO SELL POWER FROM THAT UNIT, UH, IT ONLY REFLECTS OUR SHARE IN ARCATA KNOWS THAT AHEAD OF TIME.

AND SO WHEN THEY RESPOND TO OUR, OUR OFFER, THE SIGNAL THAT COMES BACK TO GO UP OR DOWN ALSO ONLY AFFECTS OUR SHARE.

NOW AT THE SAME TIME, LCRA ON THEIR SIDE OR ANY OWNER OF A JOINT UNIT IS ALSO RECEIVING A SIGNAL.

RIGHT.

AND SO THE SIGNAL THEN IS INTEGRATED SO THAT THE END RESULT IS THE UNIT MOVING UP OR DOWN BY THE RIGHT AMOUNT, RIGHT? SO YOU GOTTA HAVE ONE GOING UP.

AND ONE GOING DOWN THE, THE COMPUTER SYSTEM DOES THE MATH AND PUTS THE UNIT WHERE, YOU KNOW, WHERE IT NEEDS TO GO ON A NET BASIS.

AND THEN, THEN IT'S A BOOKKEEPING EXERCISE ON THE PART OF, OF ERCOT AND THE METERING.

GOTCHA.

SO THERE, THEY KIND OF USE LIKE A BLENDED RATE WHEN THEY'RE DISPATCHING A SINGLE UNIT THAT'S OWNED BY TWO OWNERS.

NO, THEY ACTUALLY KNOW THAT EACH OWNER OF A, OF A, OF A, UH, JOINTLY OWN UNIT IS ACTUALLY GIVING ERCOT A PRICE JUST FOR THEIR SHARE OF THAT UNIT.

SO AGAIN, THE, THE, THE, THE, THE ERCOT RESPONSE TO THE PRICE FROM THE DIFFERENT, OR SAME PRICES, WHATEVER, THEY MIGHT BE PRICES FROM THE OWNERS, UH, AND SINCE DISPATCH.

SO LET'S SAY THERE'S THREE OWNERS, IT WOULD SEND THREE DIFFERENT DISPATCH INSTRUCTIONS BASED ON THOSE THREE OWNERS PRICES.

RIGHT.

AND SO IT COULD HAVE ONE GOING UP OR ONE GOING DOWN AND TWO GOING UP AND ONE GOING DOWN.

AND WHAT HAPPENS THOUGH, IS THOSE ALL COME BACK TO A CENTRAL CONTROL SYSTEM, SO THAT THEY'RE ALL EFFECTIVELY ADDED TOGETHER.

AND AGAIN, THE NET RESULT OF WHATEVER THE UNIT NEEDS TO DO ON A NET BASIS OF ALL THOSE THREE OWNERS THEN, YOU KNOW, MOVES IT UP OR DOWN.

AND THEN AGAIN, THERE'S A, THERE'S AN ONLINE EFFECTIVELY, AN ONLINE METERING AND ACCOUNTING SYSTEM THAT KEEPS TRACK OF WHO SHARE IS GOING UP OR DOWN OUT OF THAT TOTAL.

GOTCHA.

UM, THANK YOU.

THANK YOU FOR THE EXPLANATION.

AND I'M SORRY TO PING PONG BACK AND FORTH BETWEEN FAYETTE AND DECKER.

UM, BUT WE'D LOVE TO MAYBE EXTEND THAT A BIT MORE, BECAUSE I WAS CURIOUS ABOUT THE ECONOMICS OF THE FOUR TURBINES THAT WILL REMAIN QUICK-START TURBINES.

AND SO, SO REACH WILL BE AFFECTING THE ECONOMICS OF, OF WHEN THOSE TURBINES COME ON.

AND THEN I WOULD ASSUME THAT THE FACT THAT THE, IF, IF, IF DECKER DOES SHUT DOWN, THAT WILL ALSO AFFECT THE ECONOMICS OF THE QUICK START OPERATION.

IS THAT TRUE? SO DOES THAT, DO THOSE UNITS BECOME MORE EXPENSIVE, I GUESS IS KIND OF WHERE I'M GOING? THEY'RE TOTALLY SET.

SO THE G AGAIN, THE GAS TURBANS ARE DECKER, UH, UH, FED

[00:40:01]

IS A FULLY WHOLLY SEPARATE FACILITY.

SO, UH, REACH THE REACH ADDER IS APPLIED TO THE FAYETTE UNITS, THE COAL, NOT, NOT TO GAS AT ALL.

OH, NOT CURRENTLY.

RIGHT.

OKAY.

THANK YOU.

SORRY.

I WAS, I THINK THE RESOURCE PLAN SAID THEY'D BE APPLIED TO, TO NATURAL GAS AFTER COAL WAS, UH, SHUT DOWN.

IS THAT CORRECT? I, I, I CAN'T SAY FOR CERTAIN, I DON'T RECALL SPECIFICALLY, BUT, UH, AT THE MOMENT THAT WOULD BE IT'S RELATIVE TO FAYETTE.

THANK YOU.

UM, JUST WANTED TO FOLLOW UP ON THE QUESTION ABOUT, UM, INCREASE IN THE USE OF REACH.

UM, ARE YOU LOOKING AT INCREASING THAT FOR 2022 OR AFTER 2022 OR BOTH? UH, RIGHT NOW THE PRIMARY FOCUS IS TO CONSIDER WHAT WE WOULD DO AFTER 20.

I'M GOING TO SAY AFTER 2022, JANUARY 1ST, 2023, WHICH WAS OUR TARGET DATE FOR RETIRING, UM, THAT, OKAY.

YEAH, JUST, I I'M ASKING BECAUSE I'M THINKING, WELL, SINCE REACH, CAN'T GET THE SAME RESULT AS RETIRING THE UNIT IN TERMS OF CARBON REDUCTION, ONE WAY TO PARTIALLY MAKE UP FOR THAT WOULD MAYBE BE TO RAMP IT UP QUICKER IN THE COMING YEAR.

UM, JUST A THOUGHT THERE.

UM, I DID ALSO HAVE A, I THINK I'M STILL NOT A HUNDRED UNDERSTANDING THE, UM, THE MINIMUM DOES THAT APPLY.

I KNOW THERE'S LIKE A PHYSICAL MINIMUM THAT THE PLANT CAN'T GO BELOW WITH AND WITHOUT SHUTTING IT OFF, CAN AUSTIN ENERGY BE AT ZERO THOUGH, IF LCRA HAS THEIR SHARE RUNNING ABOVE THAT PHYSICAL MINIMUM? UH, NO, NOT REALLY.

SO, UM, AND FAYETTE IS NOT UNIQUE IN TERMS OF OTHER GENERATORS.

THERE'S A, TYPICALLY THESE BIGGER GENERATORS, THESE PARTICULARLY ONES LIKE DECKER FAYETTE THAT WERE ORIGINALLY DESIGNED TO OPERATE AS BASE-LOAD FACILITIES AROUND THE CLOCK, THEY HAVE A LOW OPERATING LIMIT, AND YOU'LL, YOU'LL HEAR AN ERCOT PAR LANCERS AT WHAT'S CALLED A LSL OR LOW SUSTAINABLE LIMIT.

WHAT THAT MEANS IS FROM THE DESIGN OF THE FACILITY, THAT'S AS LOW AS THEY CAN KIND OF GO.

SO CALL IT SOMETHING AKIN TO IDLE IN A CAR ALMOST, UH, BEFORE THEY WOULD BECOME UNSTABLE AND POTENTIALLY GO OFFLINE.

AND SO, IN, IN FAYETTE'S CASE, IF AS, AS WE EITHER PARTY CAN GO DOWN TO THEIR SHARE OF THAT LSL, BUT THAT'S AS LOW AS YOU CAN GO.

OKAY.

SO EVEN IF, IF THE UNIT WOULD OTHER BI WAS BE RUNNING JUST FINE AT SAY 50%, BECAUSE THEY'LL SYRIA WAS RUNNING THEIR FULL PORTION BECAUSE OF THE CONTRACT, YOU CAN GO DOWN TO ZERO.

WE CAN WRITE, WE STILL CAN'T GO TO ZERO.

WE CAN ONLY GO TO OUR SHARE OF THE MINIMUM.

RIGHT.

AND WHAT IS THAT? 70 ABOUT 75 MEGAWATTS.

OKAY.

THANK YOU.

SORRY, IS THAT A TOTAL OR 70 HALF? THAT'S OUR SHARE PER UNIT PER UNIT.

OKAY.

YEP.

ALL RIGHT, PAT.

UH, NO FURTHER QUESTIONS.

THANK YOU VERY MUCH.

WE APPRECIATE YOU HAVING YOU COME IN TONIGHT.

THANK YOU FOR HAVING ME APPRECIATE IT.

ALL RIGHT.

UM, NEXT UP

[4. Briefing from Arushi Frank of the ERCOT Innovation Caucus on demand response technologies and opportunities. (Sponsors: Blackburn; Chavarria)]

ITEM FOUR BRIEFING FROM ARUSHI, FRANK OF THE ERCOT INNOVATION CAUCUS ON DEMAND, RESPONSE TECHNOLOGIES AND OPPORTUNITIES.

UM, I I'LL KIND OF TEE OFF THIS TOPIC.

UH, THIS IS ONE THAT, UH, I'VE BECOME REALLY INTERESTED IN LATELY.

UM, YOU KNOW, MAYBE IN KIND OF THE AFTERMATH OF THE WINTER STORM, UH, JUST THINKING ABOUT, UM, MYSELF AND PROBABLY A LOT OF FOLKS AROUND THE STATE, UM, AT MY HOUSE, FOR EXAMPLE, I HAVE SOLAR, BUT I DID NOT INSTALL A BATTERY BECAUSE THERE'S NO, THERE'S NO FINANCIAL REASON FOR ME TO DO SO.

I HAVE AN EVIE, BUT THERE'S NO INCENTIVE FOR ME NOT TO PLUG IT IN AT FIVE O'CLOCK IN THE AFTERNOON ON AUGUST.

UH, YOU KNOW, WHEN IT'S HOT AND POWER PRICES ARE VERY HIGH.

UM, I HAVE A CONTROLLABLE LOAD IN THE FORM OF AN HVAC OR, UH, YOU KNOW, WATER HEATER.

AND I THINK I'M PRETTY, THAT'S, THAT'S PRETTY, UM, I WOULD SAY FAIRLY COMMON WITHIN AUSTIN AND IT'S, IT'S, IT'S REALLY AN INTERESTING IDEA OF HOW CAN WE USE THOSE TYPES OF CONTROLLABLE TECHNOLOGIES ON THE DEMAND SIDE, UH, TO HELP REDUCE OUR PEAKS AND ACTUALLY TO BECOME A GRID RESOURCE, UM, RATHER THAN JUST THINKING ABOUT THE GRID AS A ONE-WAY, UH, YOU KNOW, RESOURCE WHERE WE HAVE THESE POWER PLANTS THAT WE DISPATCH WHEN WE NEED POWER, UH, THAT, HOW CAN WE ACTUALLY USE THE DEMAND SIDE TO, TO HELP TO MANAGE THAT AS WELL? UM, SO I'VE, WE'VE INVITED ARUSHI WITH, UH, WHO WAS WITH A COALITION OF, OF

[00:45:01]

COMPANIES, UH, THAT ARE WORKING IN TEXAS AROUND THOSE ISSUES.

AND I'VE ASKED HER TO GIVE US AN OVERVIEW OF WHAT, UH, IS BEING DONE IN TEXAS.

AND WHAT ARE THE THINGS THAT WE CAN BE THINKING ABOUT, UM, AS WE WORK WITH AUSTIN ENERGY TO IMPLEMENT SOME OF THESE PROGRAMS, UH, WITHIN, WITHIN THE AUSTIN TERRITORY AND HOW CAN, HOW CAN WE, UH, YOU KNOW, HELP THE UTILITY BECOME MORE EFFECTIVE AT MANAGING WHAT, WHAT REALLY IS A, IS A NEW SET OF TECHNOLOGIES AND A NEW SET OF POSSIBILITIES.

SO ARUSHI ARE YOU, YOU CAN, CAN YOU HEAR ME ALL RIGHT.

UH, AND WE CAN HEAR YOU, SO, UH, YOUR PRESENTATION IS BEING UPLOADED AND I WILL TURN IT OVER TO YOU.

THANK YOU SO MUCH.

I'M JUST ON BACKGROUND.

I AM A TESLA ENERGY NOW, BUT I'VE ONLY BEEN HERE FOR ABOUT TWO YEARS, AND I HAVE SPENT MY CAREER IN ENERGY POLICY AND LEGAL WORK.

UM, I'VE REPRESENTED SNAFFLE GAS UTILITIES HERE ON CAPITOL HILL, UM, AT THE NATIONAL TRADE ASSOCIATION AND TAKING THEM, UM, THROUGH THE ROPES WITH GREENHOUSE GAS REGULATION, UM, PERMITTING NISA PARK REGULATION OF GAS SHIPPERS.

I'VE BEEN TRANSFERRED OVER TO COMPETITIVE POWERS AND REPRESENTED IPTS, UM, AS LEAD COUNSEL FOR THE ELECTRIC POWER SUPPLY ASSOCIATION IN WASHINGTON, DC AS WELL.

UM, AND THEN FROM THERE, I MOVED INTO EXELON CORPORATION INTO THEIR COMPETITIVE GENERATION SIDE, UM, MANAGING COMPLIANCE WITH RTO ISO REGULATIONS AROUND THE COUNTRY, UM, AND DID THAT FOR ABOUT THREE AND A HALF YEARS.

UM, SO HERE AT TESLA AND MY ROLE IS TO GET INVOLVED IN RTO, I, AS A POLICY ON THE COUNTRY, UM, HEALTH REGULATORS, AS WELL AS STAKEHOLDERS UNDERSTAND THE BURGEONING REGULATORY CONSTRUCT THAT GOES AROUND EVERYTHING THAT WE TALK ABOUT WHEN WE TALKED ABOUT ENERGY POLICY, UM, AND REALLY HELP OUR OWN CUSTOMERS AND THROUGH TESLA, WHAT THEIR BEST OPTIONS ARE AND HELP THEM LEVERAGE THE BEST PROGRAMS AVAILABLE TO DEVASTATE BY STATE, AND THEN WORK WITH THE STATES WITH REGIONAL AND FEDERAL REGULATORS AS WELL TO PUSH FORWARDS PROGRAMS THAT MAKE SENSE AND WE'LL PENCIL ON MECHANICS, SO THAT THEY'RE ACTUALLY ADOPTERS OUT THERE FOR THE PROGRAMS. MY PRESENTATION TODAY IS ON BEHALF OF MYSELF AS AN EXPERT ON BEHALF OF TESLA ENERGY, AS WELL AS ON BEHALF OF THE TESLA INNOVATION OFFICE.

I AM A REPRESENTATIVE FOR TESLA.

I SIT ON THE INDEPENDENT GENERATORS SEGMENT OF HER CAR BECAUSE WE HAVE A A HUNDRED MEGAWATT, 201 MEGAWATT HOUR BATTERY OPERATES AS A CONVENTIONAL RESOURCE AND ENERGY STORAGE RESOURCE ON THAT SYSTEM.

UM, AS YOU ALL MAY ALREADY KNOW THE COVER IMAGE UP THIS SLIDE SHOWS WHAT ELSE TESLA DOES IN THE ENERGY SPACE.

UM, WE SELL BATTERY PRODUCTS, WE SELL SOLAR PRODUCTS.

WE ALSO SELL THE SOFTWARE AS FAR AS THE PROGRAMMING THAT IT'S DESIGNED TO PROVIDE BACKEND SUPPORT, UH, TO THIRD PARTY DEVICES.

SO NOT EVERY TEST TESLA PRODUCT, FOR EXAMPLE, IT GETS INSTALLED WITH A TESLA, SOLAR INVERTER.

WE HAVE OTHER INVERTERS IN STOCK.

WE SOMETIMES HAVE OTHER BATTERIES ON STOCK AS AN INSTALLER.

WE WILL BE PUTTING IN OTHER TECHNOLOGIES WHERE WE HAVE NEITHER IN SUPPLY, OR MAYBE JUST FOR CONTRACT REASONS.

WE HAVE SOMEONE ELSE'S TECHNOLOGY AS PART OF OUR INSTALL PORTFOLIO FOR A SPECIFIC PROJECT OR REGION.

AND SO WITH THAT BACKGROUND, I DO WANT TO EXPRESS THANKS TO THE COMMISSION TODAY FOR HAVING ME.

AND, UM, I WOULD LIKE TO RESERVE SOME TIME FOR QUESTIONS.

I'M GOING TO RUN MY PRESENTATION FOR LITTLE UNDER 20 MINUTES TO SAVE SOME TIME AND TRY TO RESERVE UP TO EIGHT MINUTES FOR QUESTIONS.

UM, IT GIVES ME A WARNING IF I DON'T TRY IT MYSELF AT AROUND SEVEN 40 CENTRAL, AND I'LL DO MY BEST TO WRAP IT UP, BUT OPEN THE FLOOR.

UM, TWO MORE POINTS.

I HAVE SOMEONE WITH ME FROM THE INNOVATION CAUCUS, ACTUALLY TWO FOLKS.

JOHN WHALEY IS THE PRESIDENT OF THE TEXAS CHAPTER OF OAK CONNECT TO MEET MAJOR DEMAND RESPONSE PROVIDER.

UM, HIS COMPANY ON CONNECT IS ALSO A PART OF THE INNOVATION POCKETS AND, UM, OUR CAUCUS LEAD ERIC GOFF, UH, IS CURRENTLY INDEPENDENT CONSULTANT WORKING WITH US AND WITH SEVERAL OTHER COMPANIES IN ERCOT ON, UM, RESILIENCY AND TECHNOLOGY SOLUTIONS FOR THE MARKET IS FULL, IS ALSO HERE.

SO IF I START TO FILL OUT, BUT ANY OF THE QUESTIONS YOU ALL ASKED ME TONIGHT, I WILL TURN IT OVER TO A COUPLE OF EXPERTS WHO ARE DEEPLY VESTED IN ALL THINGS, TEXAS MILKINGS, ENERGY, XYZ REALLY QUICK.

UH, COULD YOU, UH, WE'VE GOT YOU TURNED OFF AS LOUD AS WE CAN, BUT IT'S A LITTLE SOFT ON OUR END.

COULD YOU LEAN A LITTLE BIT, HAVE TO MAKE SURE ALL THAT MEANS IS DRAWING THE LAPTOP CLOSER AND CLOSER IN, AND WE'LL SEE WHAT THAT DOES FOR YOU.

OKAY.

HOW IS THIS? YEAH, MUCH BETTER.

THANK YOU.

FANTASTIC.

OKAY, NEXT SLIDE.

COOL.

THANK YOU.

SO WHAT I'M GOING TO COVER TODAY IS ESSENTIALLY TRYING TO EXPLAIN AT A HIGH LEVEL WHAT DEMAND

[00:50:01]

SIDE RESILIENCY IS.

I JUST SAW ON THE SCREEN, UM, A PRESENTATION THAT SHOWED US WHAT AUSTIN GENERATION SIZE CURRENT RESOURCE MIX LOOKS LIKE.

UM, YOU HAVE ALMOST A THOUSAND MEGAWATTS OF SOLAR COMING ONLINE.

YOU HAVE A COUPLE OF HUNDRED MEGAWATTS AND PLANTS LIKE DECKER, AND YOU HAVE SOMEWHERE BETWEEN A FIVE, 500,500 MICROWATTS AND A THOUSAND MEGAWATTS AND OTHER PLANTS AND TECHNOLOGY COMING ONLINE TO START TO PUSH YOUR GENERATION PORTFOLIO TO WORK A GREENER MIX, YOU KNOW, FOR YOUR 20 OR 2030 TARGETS, THE WHOLE POINT OF DEMAND SIDE RESILIENCY IS TO BE ABLE TO OFFSET THOSE SUPPLY SIDE CONSTRAINTS AND FIGURE OUT WAYS TO ESSENTIALLY BUILD ELECTRIC SYSTEM RESILIENCY, UNSERVED DEMAND FROM TECHNOLOGIES THAT ARE INSTALLED ON THE DISTRIBUTION SIDE OF THE SYSTEM, ESSENTIALLY HAVE WINNING COSTS ASSOCIATED WITH.

AND OF COURSE, ALL THE OTHER FLAVORS OF FINANCIAL EMISSIONS, ENVIRONMENTAL IMPACTS ASSOCIATED WITH HAVING TO FURTHER BUILD OUT YOUR GENERATION FLEET.

UM, SO WE'RE GOING TO COVER ESSENTIALLY WHAT THE DEMAND SIDE RESILIENCY REALLY IS.

I'M GOING TO INTRODUCE SOME OF THE PILLARS OF WHAT AN EFFECTIVE DEMAND SIDE PROGRAM LOOKS LIKE, UM, AND HOW THAT PLAYS INTO ENERGY RESILIENCY POLICY.

AND JUST GONNA RUN THROUGH SOME EXAMPLES OF THINGS THAT ARE ALREADY OUT THERE BEING DEPLOYED BY TESLA AT OTHER COMPANIES AROUND THIS COUNTRY AND AROUND THE WORLD.

UM, SOME THINGS ARE NOT GOING TO MAKE IT TO MY PRESENTATION TODAY, LIKE THE VEHICLE OF THE GRID.

AND THAT'S BECAUSE THOSE ARE STILL NASCENT PROGRAMS. WHAT I WANTED TO DO FOR THIS GROUP TODAY IS SHOW YOU WHAT'S ALREADY HERE ALREADY BEING IMPLEMENTED AND ALREADY EARNING MONEY AND EARNING ENVIRONMENTAL CREDIT, UM, AND EARNING THE RESPECT AND THE ATTENTION OF UTILITIES AND REGULATORS AROUND THE WORLD.

IT'S ALREADY HERE.

IT'S READY TO GO.

AND FRANKLY, I THINK THAT, UM, COOPERATIVE UTILITIES LIKE AUSTIN ENERGY, MUNICIPAL UTILITIES, LIKE AUSTIN ENERGY AND CO-OPS AS WELL BECAUSE THEY HAVE A VERTICAL MODEL.

THEY ARE ACTUALLY BETTER SUITED TO.

AND IN MANY CASES HAVE ALREADY DEMONSTRATED IN SOME OF THESE PROGRAMS. THEY'LL TALK ABOUT THEIR ABILITY TO CAPTURE ALL OF THESE VALUES AND REALLY BUILD OUT SOME OF THESE PROGRAMS. NEXT SLIDE.

OKAY.

SO REALLY QUICKLY, UM, AGAIN, WE JUST SPOKE IN THE PRIOR PRESENTATION ABOUT SUPPLY SIDE CHANGES, DEMAND SIDE.

THE TECHNOLOGY IS SIMPLY ANY TECHNOLOGY THAT ALLOWS AN ELECTRIC CUSTOMER, AN INDIVIDUAL, A COMMERCIAL, OR EVEN THE WHOLE UTILITY NETWORK CUSTOMER TO MODIFY THE MODEL OF ELECTRICITY.

IT MUST DRAW IN REAL TIME FROM THE BULK ELECTRIC SYSTEM TO SERVICE REAL-TIME ENERGY NEEDS, DEMAND SIDE POLICY THEN IS ANY POLICY THAT PROVIDES EITHER ECONOMIC INCENTIVE, A PRICE SIGNAL, OR A NON-ECONOMIC INCENTIVE LIKE A EMERGENCY CALL FROM AUSTIN ENERGY TO SHUT OFF YOUR POWER, UM, WHICH THEN CHANGE IN ELECTRICITY CUSTOMERS BEHAVIOR IN A WAY THAT DIRECTLY IMPACTS THE REALTIME RATE OF ENERGY CONSUMPTION OVER A TIMESCALE, ANYWHERE FROM SECONDS AND MINUTES TO HOURS AND SEASONS.

COUPLE OF GOOD EXAMPLES.

IF YOU ARE A PART OF A PROGRAM WHERE DURING THE WINTER MONTHS, YOUR UTILITY INCENTIVIZES YOU TO SAVE ON YOUR POWER BILLS THERE, THAT IS A SEASONAL PROGRAM FOR DEMAND RESPONSE REDUCTION.

IT'S A DEMAND SIDE PROGRAM DESIGNED TO BENEFIT THE UTILITIES OVERALL PEAK OVER A SEASON.

WHAT HAPPENED DURING THE STORM WITH CUSTOMERS BEING CALLED TO SUPPORT THE ROLLING OUTAGE PLAN FOR AUSTIN ENERGY IS AN EXAMPLE OF A TIMESCALE OF MINUTES AND HOURS OVER JUST A COUPLE OF DAYS, A PROGRAM THAT DID NOT HAVE A PRIVATE PRICE SIGNAL TO CUSTOMERS.

THERE'S NO OTHER ECONOMIC INCENTIVES DRIVING, HOW CUSTOMER BEHAVIOR SHOULD OCCUR IN THE MOMENTS LEADING UP TO A SEVERE GRID CONSTRAINT, ENROLLING OUTAGES.

SO THAT'S JUST TO EXPLAIN TO YOU THAT BROADLY SPEAKING, ANYTHING CAN BE A DEMAND SIDE POLICY.

THE REAL QUESTION IS HOW DO YOU GET TO THE POLICIES THAT SET UP AN ENHANCE A FRAMEWORK FOR CUSTOMERS TO RESPOND BY THEMSELVES AND EITHER EARN CREDITS OR SAVINGS ON THEIR FILL IN SCENT, THEIR INVESTMENTS IN DEMAND SIDE TECHNOLOGY LIKE STORAGE, SOLAR BACKUP, POWER, AND SHIPPED CONSUMPTION ON A NORMAL DAY, NOT JUST WHEN IT'S GOING TO BE A STORM OUTSIDE SO THAT YOU HAVE DAILY MANAGEMENT OF SYSTEM PEAKS AND RESILIENCY BUILDING, AS WELL AS ENERGY PLANT BUILDING THROUGH THE CHANGE BEHAVIOR OF YOUR CUSTOMERS ON EVERY DAILY PEAK OF EVERY DAY ON THE SYSTEM.

NEXT SLIDE.

OKAY.

SO BEFORE I PREFER TO PROCEED ANY FURTHER, I JUST WANT TO MAKE ONE SHOUT OUT TO, UM, MY COLLEAGUE CYRUS REED AT THE SIERRA CLUB, WHO OFTEN COMES TO YOUR PUC OR COTTON MEETINGS WITH A LOT OF GREAT DATA.

UM, AFTER THIS PRESENTATION, I'LL SEND YOU TO JONATHAN BLACKBURN A LINK TO CYRUS, HIS PRESENTATION TO THE PUC IN SEPTEMBER, AS PART OF THE BEGINNING OF THEIR MARKET DESIGN PROCEEDINGS, IN WHICH HE POINTED

[00:55:01]

OUT THAT RIGHT NOW ON THE SYSTEM ON THE ERCOT SYSTEM, THERE ARE ALREADY A THOUSAND MEGAWATTS OF DISTRIBUTED GENERATION SIZE UNDER ONE MEGAWATT, WHICH ERCOT DOES NOT HAVE ANY VISIBILITY TO AND DOES NOT HAVE PROGRAMS TO VALUE THE CONTRIBUTIONS OF THIS SMALL RESOURCES IN AGGREGATE IN THE ERCOT MARKET.

WITH THAT BEING SAID, AS FAR AS DEMAND SIDE PROG, UH, PROGRAMS AND TECHNOLOGY GOES, THERE'S A BIG JOB THERE.

AND IT REALLY, THE QUESTION BECOMES THAT WITHOUT HAVING OUR CUT INVOLVED, WHAT ARE THE THINGS THAT VERTICAL UTILITIES, MEANING UTILITIES, CO-OP UTILITIES AND OTHERS CAN DO TO LEVERAGE REALLY SMALL DEMAND SIDE TECHNOLOGY CONTRIBUTIONS OF INDIVIDUAL CUSTOMERS AND DEVELOP THE SAME AMOUNT OF EFFECTIVE DEMAND RESPONSE AS ONE MIGHT GET FROM A MAJOR PROGRAM INVOLVING A LARGE DATA CENTER OR INVOLVING MAJOR COMMERCIAL OR INDUSTRIAL CUSTOMERS.

I JUST WANTED TO POINT THAT OUT AND I WILL SEND THAT AROUND I'M AFTER THE MEETING GOING TO HERE TO THIS SLIDE, UM, I WANT TO SET UP SOME OF THE EXAMPLES GOING TO TALK TODAY IN TERMS OF THESE PILLARS OF WHAT MAKES FOR GOOD RESILIENCY PROGRAMS. WE'VE JUST DISCUSSED WHAT A ECONOMIC PRICE SIGNAL IS.

IT'S A SIGNAL THAT INCENSE CUSTOMER BEHAVIOR PROVIDES A CLEAR BASIS FOR CUSTOMERS TO SET UP THE ENERGY CONSUMPTION BEHAVIORS IN CERTAIN WAYS THAT SUPPORT THE SYSTEM AND COMPENSATE THE CUSTOMER.

ANOTHER CRITICAL PILLAR IS THAT UTILITIES AND SYSTEM OPERATORS HAVE TO APPROVE THE TECHNOLOGY THAT MAKES THESE SOLUTIONS POSSIBLE.

THIRD IS THAT UTILITIES NEED TO FOCUS ON SOMETHING THAT YOU ALL OVERSEE VERY CLOSELY, WHICH IS RATE DESIGN AND PROGRAM VALUE.

ALL OF THOSE PROGRAMS, VALUE BENEFITS, BUT THE REAL QUESTION IS, ARE YOU VALUING ALL THE BENEFITS OF THE DEMAND SIDE OF YOUR SYSTEM? THE FOURTH PILLAR IS DESIGNED FOR CUSTOMER EXPERIENCE.

EXPERIENCE HAS DIFFERENT FLAVORS, JUST AS MUCH AS ACCESSIBILITY DOES, UM, EXPERIENCE AND ACCESSIBILITY GO HAND IN HAND BECAUSE PART OF BEING ABLE TO ACCESS THESE PROGRAMS MEANS A THEY NEED TO BE OFFERED TO ALL CUSTOMERS OR TO AS MANY CUSTOMERS AS POSSIBLE.

YOU MIGHT NEED TO ITERATE ON WHAT YOU OFFER TO A CUSTOMER, DEPENDING ON THE INCOME LEVEL AND THEIR ABILITY TO AFFORD A SPECIFIC TECHNOLOGY.

AND YOU WANT TO DESIGN SO THAT THE CUSTOMERS KNOW WHAT THEY'RE GOING TO GET.

YOU CERTAINLY DON'T WANT A CUSTOMER TO SIGN UP FOR SOMETHING AND THEN BE CONFUSED FIVE MONTHS LATER ABOUT WHY THEY SIGNED UP FOR IT AND WHY THEY'RE BUILT DOESN'T LOOK ANY DIFFERENT THAN IT WAS FIVE MONTHS PAST NEXT SLIDE.

OKAY.

SO I'M GOING TO SORT OF THE BENEFITS THAT WE'RE GOING TO TALK ABOUT IN THESE EXAMPLES.

I'M NOT GOING TO READ THEM ALL HERE, BUT JUST AGAIN, BREAKING DOWN THAT THERE IS A TREMENDOUS AMOUNT OF VALUE TO ALL PARTIES, UM, AND DEMAND SIDE PROGRAMS, UTILITY COSTS TO SERVE, ESPECIALLY FOR OUR VERTICAL UTILITY, LIKE AUSTIN ENERGY, WHERE YOU HAVE A DEMAND SIDE GENERATION PORTFOLIO SUPPORTING THE, UH, SUPPLY SIDE PORTFOLIO, SUPPORTING THE DEMAND SIDE OF THE SYSTEM.

UM, IT IS INCREDIBLY IMPORTANT TO THINK ABOUT HOW THE UTILITY IS PASSING COST TO ITS CUSTOMERS AND WHAT CHANGES CAN BE MADE OVER TIME TO JUST CHANGE THE OVERALL COST OF SERVE LOAD.

I HEAR A LOT OF MISCONCEPTION ABOUT WHY RENEWABLE PROGRAMS ARE, AND AREN'T BENEFICIAL FOR ALL RATE PAIRS.

AND ONE OF THE THINGS I WANT TO POINT OUT TODAY, ESPECIALLY WITH THE INTRODUCTION OF STORAGE, UM, THE ABILITY TO DO YOUR VIRTUAL POWER PLANTS, THE ABILITY TO DO T AND D TRANSMISSION AND DISTRIBUTION COSTS REFER A DEFERRAL WITH RENEWABLE MICROGRIDS.

I JUST WANT TO BE ABLE TO POINT OUT THAT THESE ARE THE MOMENTS IN WHICH WE START TO SEE IN POLICY MAJOR SHIFTS IN OVERALL SAVINGS FOR HOW UTILITY SERVES ITS OWN CUSTOMERS, HOW IT HEDGES HIS EXPOSURE TO THE WHOLESALE MARKET BY HAVING DEMAND SIDE SOLUTIONS ON ITS SYSTEM AND HOW CUSTOMERS CAN NOT ONLY SAVE ON THEIR ENERGY BILLS, BUT THEY CAN BE PART OF A SOLUTION THEMSELVES BY GETTING MORE, MORE PATCHED, IF YOU WILL, FOR EXPORTING THEIR POWER BACK TO THE SYSTEM.

THESE ARE NOT JUST THEORETICAL MODELS.

THESE ARE PROGRAMS THAT ARE BEING RUN AROUND THE WORLD AND THERE SOME REALLY GOOD ONES BEING RUN RIGHT NOW, UM, ALONG THE EAST COAST AND THE WEST COAST THAT I WILL REFER TO TODAY.

NEXT SLIDE.

OKAY.

UM, DEMAND, RESPONSE, UM, VALUE PROPOSITION FOR DEMAND RESPONSE.

I THINK IT'S PRETTY WELL KNOWN.

THE THING I WANTED TO MENTION HERE IS THAT IN TERMS OF HOW YOU BUILD A PROGRAM, NOT EVERY CUSTOMER NEEDS TO HAVE A THOUSANDS OF DOLLARS OF SYSTEMS ON THEIR PROPERTY TO PARTICIPATE.

YOU CAN BUILD A DEMAND RESPONSE PROGRAM THAT REWARDS MICRO BEHAVIORAL RESPONSE TO MY THERMOSTAT, UM, ALL THE WAY UP TO REWARDING A CUSTOMER FOR STORAGE AND THEIR CALLED.

THE REAL QUESTION IS, DOES THE UTILITY HAVE THE TOOLS IT NEEDS TO ACTUALLY ADMINISTER ITS OWN VR PROGRAM OR TO WORK WITH ANOTHER AGGREGATOR TO CREATE THAT PROGRAM, AND THEN PERHAPS BE ABLE TO VALUE

[01:00:01]

THIS PROGRAM BENEFITS IN A WAY THAT ACTUALLY OFFSETS THE CAPACITY COSTS THAT UTILITY HAS FOR OTHERWISE SERVING THOSE SAME DEMAND NEEDS.

THOSE PEAK NEEDS FROM THE ENERGY SYSTEM.

IN THIS CASE, IT WILL BE FROM OUR COD NEXT SLIDE.

THIS IS AN EXAMPLE.

I'M NOT GOING TO GO THROUGH IT IN ANY DETAIL, BUT GO RIGHT BACK TO THE POINT THAT DEMAND RESPONSE PROGRAMS ARE HEDGES FOR UTILITIES.

IF YOU'RE ABLE TO HEDGE THE COST OF PROCURING POWER EMERGENCY, UM, BY CONTRACTING WITH A DEMAND RESPONSE PROVIDER, THAT IS A MODEL THAT IS ALREADY OUT THERE AND BEING PURSUED OR CONNECTED STUDENTS IN CALIFORNIA WITH A LOCAL COMMUNITY UTILITY.

AND I WOULD DEFINITELY ENCOURAGE YOU TO TAKE A LOOK AT THE STRUCTURE OF THAT PROGRAM AS A WAY OF FORMING RECOMMENDATIONS THAT COULD HELP AUSTIN ENERGY WITH ITS OWN NEEDS.

NEXT SLIDE.

HERE'S SOMETHING JONATHAN WAS TALKING ABOUT IN TERMS OF PROGRAMS, UM, THAT AUSTIN ENERGY COULD HAVE STORAGE.

I ALSO HEAR BEING SPOKEN ABOUT AS ADVANTAGE DEVICE, WHICH IS AN INTERESTING AND AN UNFORTUNATE WAY TO THINK ABOUT IT BECAUSE IT MEANS THAT THERE ISN'T A PROGRAM, BUT ACTUALLY VALUE STORAGE.

WHAT IT CAN DO IF YOU DON'T HAVE THESE PROGRAMS, THE STORAGE IS A VERY EXPENSIVE DEVICE TO HAVE ON YOUR HOME ENERGY SYSTEM.

BUT IF YOU HAVE THE PROGRAMS, THESE ARE SOME OF THE VALUES YOU ARE GETTING.

YOU'RE GETTING, OF COURSE THE INSURANCE VALUE.

EVERYONE TALKS ABOUT EVERYONE.

ELSE'S LIGHTS ARE OUT IN THE NEIGHBORHOOD DURING THE STORM.

YOURS ARE NOT, THAT'S GREAT, BUT THAT'S ALSO JUST ONE VALUE.

THE DAILY VALUE OF STORAGE IS TO DO WHAT, EVERYTHING, WHAT, EVERYTHING, UM, WHAT EVERY, WHATEVER SOLAR WAS DOING FOR HEALTH, EXCEPT THAT YOU WERE NOW ALSO GETTING THE TIME VALUE OF STORING YOUR SOLAR ENERGY FOR CONSUMPTION AT A LATER TIME.

IN ADDITION TO THAT, BECAUSE STORAGE IS DYNAMIC, YOU'RE ABLE TO ADD PAYMENTS TO A UTILITY PROGRAM THAT REWARDS YOU FOR SHIFTING YOUR CONSUMPTION TO YOUR BATTERY POWER.

UM, DURING CRITICAL PEAK MOMENTS.

IN OTHER WORDS, UTILITIES CAN DESIGN RATE PROGRAMS THAT SAY, WE'LL CHARGE YOU 5 CENTS MORE FOR CRITICAL PEAKS, BUT THEN WE'LL PAY YOU A TON MORE MONEY.

UM, WHEN WE ARE IN AN OFF PEAK MODE AND YOU'RE REDUCING YOUR POWER.

AND FINALLY, ANOTHER IMPORTANT PART OF THESE PROGRAMS IS ACTUALLY BEING ABLE TO EXPORT ENERGY FROM YOUR STORAGE SYSTEMS TO THE GRID.

UM, ANOTHER MISCONCEPTION IS THAT HOW CAN I STORAGE FOR MYSELF FOR A BACKUP NEED IF I'M SENDING IT ALL BACK TO MARKET.

AND THE ANSWER THERE IS THAT BATTERIES ARE NOT BUILT JUST FOR YOUR TWO KILOWATTS OF CONSUMPTION.

AN AVERAGE HOME USUALLY HAS 10 KILOWATTS OR 13.5 KILOWATT HOURS OF BATTERIES ON THE SYSTEM, UM, ON THE HOME SYSTEM.

AND OUT OF THAT, YOU ARE GOING TO BE USING ANYWHERE BETWEEN 20 AND 30%, AND THEN YOU STILL HAVE THE REST OF THE BATTERY CAPACITY AND POWER CAPACITY AVAILABLE TO EXPORT TO PROVIDE SHORT TERM SERVICES, SR SERVICES AND LONGER TERM SERVICES LIKE ENERGY, NEXT SLIDE.

SO I'M RUNNING CLOSE TO THE TIME WHERE I SAID, I CHECKED MY OWN TIME, SO I WILL NOT BE SUPER FAST, BUT I DO WANT TO BE QUICK ABOUT, UM, JUST EXPLAINING SOME OF THESE EXAMPLES.

UM, SACRAMENTO MUNICIPAL UTILITY DISTRICT IS A PHENOMENAL EXAMPLE OF A EVOLVING AND INCREASINGLY VALUABLE SOLAR AND STORAGE PROGRAM.

SMART HAS GONE THROUGH A PRETTY GRAY, PRETTY GRAND EXERCISE OF TRYING TO MOVE ITSELF AWAY FROM NET ENERGY METERING, TO LOOK MORE CAREFULLY AT HOW THEY VALUE EVERY KILOWATT THAT COMES BACK FROM THE DEMAND SIDE OF THE SYSTEM AND COMPENSATED FAIRLY FOR ITS FULL VALUE.

THAT PROGRAM HAS RESULTED IN SOMETHING THAT'S BEEN PRETTY INCREDIBLE FOR THE INDUSTRY.

AND IT'S JUST CUTTING UP, UM, ENERGY THAT IS EXPORTED BACK FROM A HOME BATTERY, RECEIVES A CREDIT THAT DEVELOPED THAT REPRESENTS THE VALUE