Meeting Summary - 04/10/2025 Senate Business & Commerce

▶️0 - Update on Long-Term Load Forecast by ERCOT CEO Pablo Vegas / Questions

Long-Term-Load-Forecast-Update-2025-2031-and-Methodology-Changes.pdf

• ERCOT CEO Pablo Vegas began with an update on ERCOT's load forecast.
• Vegas discussed the unadjusted and adjusted load forecasts.
• The unadjusted forecast is provided by transmission service providers, including contracted customer plans.
• The forecast of 148 gigawatts by 2030 has increased to 208 gigawatts in the new TSP full unadjusted forecast.
• Officer letters contribute to the forecast, ensuring projected loads are likely to materialize.
• Significant growth is anticipated from data centers, with projections reaching approximately 78 gigawatts by 2030.
• Adjustments were made to forecasts based on historical performance.
• A 180-day delay was applied to large load in-service dates, accounting for a historical delay trend.
• Load forecasts for data centers were adjusted to 49.8% of their original values.
• Officer letters were adjusted to 55.4% of the projected loads.
• The adjusted forecast shows about 22 gigawatts from data centers by 2030.
• Accurate load forecasts are crucial for ERCOT's operational planning, capacity demand and reserve reports, and scheduling maintenance outages.
• Schedule and supply scenarios rely heavily on precise forecasting to prevent potential crises.
• Questions were invited from Senators Menendez and Kolkhorst.

▶️Senator Menendez to Pablo Vegas, Outage Frequency

• Thanked for the updated forecast and the importance of accurate numbers for planning.
• Expressed concern that not all data centers or large users planning to come to Texas actually get built.
• Current total outages are around 38,000 megawatts, including thermal and renewables.
• ERCOT currently has about 11,000 megawatts in reserves, indicating a good supply situation for now.
• Discussed future growth: adjusted load forecast indicates a 75% increase in the total grid in the next five years.
• Inquired about realistic generation numbers to match future demand, emphasizing the need for reliable generation.
• Slide 12 illustrates historical ERCOT grid developments, including gas, solar, wind, and battery developments.
• Noted recent challenges in the gas supply chain, with the US not building gas plants in the last five years.
• In search of independent sources for timelines on building new reliable and clean generation infrastructure.
• Mentioned legislation related to demand response and flexibility as approaches to manage demand and increase efficiency.

▶️Senator Kolkhorst to Pablo Vegas, SB6

• Discussion on the demand from data centers and implications if SB6 doesn't pass.
• SB6 provides a mechanism for data centers to engage in grid responsiveness during emergencies.
• Without SB6, data centers are modeled as firm loads, potentially causing local transmission constraints.
• SB6 allows data centers to be flexible, promoting growth and grid reliability.
• Current strategy involves studying each data center's impact on transmission and curtailing growth if risks are detected.
• Historical data on resource capacity additions show shifts in energy sources, highlighting intermittency issues with solar and wind.
• The effective load carrying capacity is lower, especially in winter peaks due to battery limitations and lack of solar support.
• There is a noted decline in incentive for gas generation, with hopes for change via the Texas Energy Fund.
• Discussion on shifting supply lines for energy sources back to domestic production in the U.S.

▶️Senator Campbell to Pablo Vegas, Accurate Forecasts

• The focus is on achieving a more accurate load forecast to avoid significant adjustments.
• Currently, forecasts may be altered based on historical data to maintain practical expectations.
• Senator Campbell questions the measures beyond signed contracts for improving forecast accuracy.
• Vegas mentions utilizing recent historical data and actual system developments for adjustments.
• The existing forecast shows significant growth predictions, such as data center loads within ERCOT reaching 80 gigawatts.
• There is a reliance on signed contracts as key evidence due to their financial commitments.
• The discussion mentions potential legislative actions like SB6 to aid in standardizing incoming data.
• Vegas acknowledged this adjustment is a temporary measure while gaining further track record data.

▶️Senator Nichols to Pablo Vegas, Colocation and Transmission

• Senator Nichols focused on the forecast for data centers and their power requirements.
• He questioned how data centers bringing their own power or connecting to the grid affects the demand forecast displayed in the gray band.
• Clarification was sought on whether the data centers' self-generated power impacts the forecast numbers, which showed the full gross demand regardless of self-generation.
• Senator Nichols expressed concern that the benefit of data centers bringing their own power is not reflected in the current forecasts.
• He suggested that a separate chart should depict new power generation associated with data centers.
• There was an emphasis on the need to look forward and plan for potential capacity shortfalls.
• The suggestion was made to directly contact data centers to understand their plans regarding power generation and grid reliance.
• By gathering firm data on these plans, ERCOT can better forecast power capacity needs and reduce uncertainty.

▶️Senator Zaffirini to Pablo Vegas, Approval of NPRR1190 and PGRR107

• NPRR1180 and PGRR107 were posted in May 2023 but not approved until January 2025 due to undisclosed reasons.
• Concerns were raised and expressed about transparency and load values. These concerns were not addressed in the previous forecast but were addressed in the current forecast.
• The TAC approved NPRR1180 with four abstentions due to concerns about high load numbers and the risk of overdevelopment.
• Updates in the report do not impact data centers or their customers directly but provide tools for better modeling and forecasting.
• Nothing in the forecast limits data centers from moving forward with development projects.
• Senator Campbell emphasized the importance of accurate forecasts and recommended verifying project developments by reaching out to parties.
• There are concerns over the vast amount of generation projects proposed (400 gigawatts) and the importance of verifying these projects to ensure accurate forecasts.

▶️5 - *SB1495 Schwertner

• Introduced SB1495 and recognized Senator Schwertner to explain the bill.
• SB1495 establishes an electric vehicle supply equipment advisory board.
• The board aims to enable TDLR to collaborate with industry stakeholders on standards for the electric vehicle industry.
• The board will consist of nine voting members and two ex officio members from various perspectives.
• The board will be abolished on December 1, 2030.
• Electric vehicle charging stations must comply with SB1001 by the time the board is abolished.
• Public testimony on SB1495 was opened, but no one opted to testify.
• A resource witness from TDLR was present for questions.
• Public testimony was closed, and SB1495 was held pending.

▶️11 - *SB2211 Sparks

• SB2211 aims to address issues by leveraging Texas' natural resources, such as abundant natural gas and produced water from the Permian Basin.
• Proposal to attract data centers due to Texas' favorable business climate, aiming to solve energy and water cooling needs.
• Plan to use desalinated produced water as an alternative freshwater resource for industrial purposes.
• Incentives offered through SB2211 include recognizing digital products and desalinated water as industrial products, allowing cogeneration facilities flexibility.
• Integration of power generation, water desalination, and data centers could reduce strain on the electric grid and freshwater demand.
• Acknowledgement of concerns from co-ops, with efforts to address these concerns, possibly by removing co-ops involvement in specific projects.
• Senator Kolkhorst clarifies that Senator Sparks is looking to remove co-ops from certain areas to fit the project scenario.

▶️Tom Glass - Public Testimony SB2211

• Tom Glass represents Lee County Conservatives.
• Concerns were raised about water being drained from under ranches in Lee County.
• Seeking solutions through alternative sources of fresh water and desalination.
• Supporting measures to make desalination more affordable in Texas.
• Expresses support for Senator Perry's bill, SB2211.
• Public testimony on the bill was closed and SB2211 remains pending.

▶️12 - *SB2268 Schwertner

• The chair introduced SB2268 and Senator Schwertner explained the bill.
• The Texas Energy Fund (TEF) was previously passed to incentivize new energy generation.
• Market influences, such as supply chain disruptions and permitting delays, are affecting the TEF application process.
• SB2268 aims to address these challenges by allowing the Public Utility Commission (PUC) to extend the ERCOT loan program deadline beyond 12/31/2025 on a case-by-case basis.
• The bill provides flexibility in the administration of the TEF loan program, helping qualified applicants impacted by uncontrollable market forces.
• No questions were posed to Senator Schwertner following the explanation.
• Public testimony on SB2268 was opened but no one testified.
• Public testimony was closed and the bill was left pending.