MANAGER'S MESSAGE by Mike Kezar
As I enter the final six months of my tenure with STEC, one would think that the pace of events would slow. In fact, not only is the pace increasing, but the number of issues we are facing is also increasing.
The hot summer weather and increased electrical demand, coupled with reduced generating capacity, higher natural gas prices, and a conservative ERCOT operating philosophy have led to much tighter re-serve margins and higher energy prices. Staff continues to advocate for sensible market reforms that will help retain existing generation and incent new generation builds. That effort is increasing in scope, and a resolution will likely not be determined until next year.
The Board of Directors and Staff just completed an update to the STEC Strategic Plan. The updated plan will be rolled out in the very near future. Key Initiatives aimed at implementing the strategic priorities identified during the planning process will be developed over the next few months.
Contemporaneous with the strategic planning process, the Board of Directors is actively engaged in a facilitated search for STEC’s next General Manager. The updated Strategic Plan will provide the next GM with a road map of priority issues to be addressed over the next 3-5 years, and it will ensure that the Board and the new manager are on the same page with regard to those priority issues.
Strategic planning has also been taking place with regard to STEC’s Power Supply Portfolio. Several work-shops have been held with the Board and Member Staff to evaluate the current portfolio, projected Member load growth, and options available to serve Member load. Final decisions on the portfolio size and composition will be made once a clearer picture of ERCOT market reforms is available.
On the power transmission front, significant projects are underway and in the planning stage. Second circuits are being added to the Bakersfield to Big Hill and San Miguel to Lobo 345kV lines. Planning for the new 345kV line to be built from San Miguel to the Lower Rio Grande Valley is also a priority. STEC will build the San Miguel to Hebronville portion of that line, and construction will be completed in 2026.
Compliance efforts are also increasing and accelerating. STEC has experienced three Texas RE/NERC au-dits over the past 3 years. Preparing for those audits, participating in the audits, and providing data in response to follow-up questions requires a significant amount of Staff time and resources. We expect that demands on this front will only increase in the future.
Finally, the summer heat has led to increased awareness of the need for employees working in the heat to hydrate. We have also seen an increase in minor incidents involving vehicles. Safety personnel will continue to monitor, train, and implement corrective actions as necessary to protect employees and property.
As my remaining time with STEC is rapidly drawing to a close, I remain confident and optimistic about STEC’s future. That confidence and optimism has its roots in the dedication and capabilities of STEC’s employees, who come to work each day committed to serving the needs of the Members.