MINUTES SENATE COMMITTEE ON BUSINESS & COMMERCE Friday, August 13, 2004 10:00 a.m. Senate Chamber ***** Pursuant to a notice posted in accordance with Senate Rule 11.18, a joint public hearing of the Senate Committee on Business & Commerce and the Senate Infrastructure Development and Security Committee was held on Friday, August 13, 2004, in the Senate Chamber at Austin, Texas. ***** MEMBERS PRESENT: MEMBERS ABSENT: Senator Troy Fraser, Chairman Senator Kim Brimer Senator Kip Averitt, Vice Chairman Senator Craig Estes Senator Kenneth Armbrister Senator Eddie Lucio, Jr. Senator John Carona Senator Mike Jackson Senator Leticia Van de Putte ***** A joint hearing of the Senate Business and Commerce Committee and Senate Infrastructure Development and Security Committee was held. Chairman Fraser and Chairman Staples shared presiding duties. Chairman Fraser called the Senate Business and Commerce Committee to order at 10:20 a.m. Chairman Staples called the Senate Infrastructure Development and Security Committee to order at 10:20 a.m. The following business was transacted: Chairman Staples laid out joint committee interim charge #1 relating to the security and stability of the Texas electric system and whether a system failure in Texas could occur in a manner similar to the blackout that occurred in the northeastern United States. Lieutenant Governor David Dewhurst addressed the Committee regarding the joint interim charge. He asked the Committee and all lawmakers to look over current security plans, find shortfalls in the system, and make legislative recommendations for change. Upon completion of Lieutenant Governor David Dewhurst's remarks, at 10:40 a.m. Senator Averitt moved that both committees stand at ease until 11:00 a.m. At 11:14 a.m. Chairman Fraser called both committees back to order. Chairman Staples then called the first invited witness, Paul Hudson, Chairman, Public Utility Commission (PUC). Chairman Hudson testified on electric system reliability; Electric Reliability Council of Texas (ERCOT) reliability advantages and challenges; PUC's role; and lessons from the Northeast blackout. During Chairman Hudson's testimony, Chairman Staples also called Robert Manning, Vice Chairman, ERCOT and Sam Jones, Chief Operating Officer and Executive Vice President, ERCOT, to respond to members' questions. Mr. Manning advised that all board members understand that the most critical functions at ERCOT are grid security and reliability. Mr. Jones testified concerning the back-up plan in place at ERCOT in the event of a system failure. Upon completion of the above witnesses' testimony, Chairman Fraser then called John Fainter, President, Association of Electric Companies of Texas, to testify and respond to members' inquiries. Following Mr. Fainter's testimony, Chairman Fraser opened public testimony and asked if anyone present wished to testify; none being heard, public testimony was closed. There being no further business, at 1:14 p.m. Senator Averitt moved that the Senate Business and Commerce Committee stand recessed subject to the call of the Chairman. Without objection, it was so ordered. There being no further business, at 1:14 p.m. Senator Wentworth moved that the Senate Infrastructure Development and Security Committee stand recessed subject to the call of the Chairman. Without objection, it was so ordered. _______________________________ Senator Troy Fraser, Chairman _______________________________ Tatum Baker, Clerk