The Texas Public Utility Commission last week threatened Texas-New Mexico Power (TNMP) with a “comprehensive” rate case if the utility didn’t remove proposed Tariff language from a proceeding before the commission.

The PUC in August approved TNMP’s settlement agreement for an annual increase of $14.29 million in its distribution cost recovery factor (DCRF). Two months later, it filed in the same docket revisions to its wholesale Tariff for transmission service to correct errors in it (50731).

On Nov. 6, energy storage developer Broad Reach Power filed for relief from TNMP’s distribution service charges being assessed to wholesale storage entities as a result of the utility’s proposed correction. Broad Reach said the changes tucked into TNMP’s proposed correction were “inconsistent” with commission rules and applicable legal standards and asked the PUC for declaratory and injunctive relief and a rulemaking to address the issues (51501).

The developer found a sympathetic ear in PUC Chair DeAnn Walker.

“DCRF proceedings are meant to provide periodic changes to rates to cover distribution investment. This is not what occurred in this instance,” Walker said during the commission’s open meeting Thursday. “The manner in which TNMP chose to try to address it in filing a new Tariff two months later does not comply with the commission’s order. They should have filed a new case to change the Tariff back to what it should have been.

“Now we have pending this new docket, which sets forth various alternatives, none of which I believe the commission has the legal ability to implement, except maybe the rulemaking. We have two dockets that are spending a lot of the commission’s time that are not our core mission.”

TNMP’s correction added language that would separately meter a storage facility from all other facilities and set the interconnection point at the distribution level.

“The changes proposed to the Tariff for transmission service go well beyond the intent of the statue and the rules allowing a DCRF,” Walker said. She suggested that TNMP and other parties in the Broad Reach proceeding file a petition by Dec. 8 that would remove the troublesome language. If not, she said, she would use the PUC’s Dec. 17 open meeting to require TNMP to file a rate case to address the issue and any others “that may be out there.”

“I want to be clear to all utilities that they are not to abuse the DRCF process or any of these other processes they have gotten through the legislature and through us to give them quick relief,” Walker said.

She also had harsh words for other parties in the proceedings and PUC staff, saying the commission was caught off-guard by the dockets.

“In my view, the system failed the commissioners on this issue. [TNMP] should never have included this request in their application, and the other parties and staff should not have included this change in the Tariff,” Walker said. “I do not believe based on the record of this case that the commissioners were in a position to identify the issue without the input from the parties and the staff. There’s no way the three of us could have ever caught this issue and said, ‘This shouldn’t be in a DCRF.’”

“You can’t sneak it through the way it was sneaked through here,” Commissioner Arthur D’Andrea said. “It embarrasses me that I missed it. It’s still our job. We still signed [the order].”

Hearing on Proposed Entergy Rider

The commission agreed to hold a hearing in December or January on a proposed rider by Entergy Texas for a new gas-fired power plant north of Houston (51381).

Entergy in October filed a request for a generation cost recovery rider to begin recovering a return of and on its capital investment in the Montgomery County Power Station, a 993-MW, combined cycle natural gas plant near Willis. Entergy, which has said the plant’s construction costs will be $937 million, is attempting to collect about $91 million annually from its Texas customers.

The plant was originally expected to be placed in service next June. Entergy now projects the in-service date to be moved up, leading to the PUC’s decision to quickly hold a hearing on the rider.

Walker said she was concerned that in reviewing the case, the utility might have included costs in the rider “more appropriately defined” as operations and maintenance costs.

“I want to be clear to Entergy that they better scrub before the hearing any costs they are requesting,” Walker said. “If they are getting a rider with inappropriate carrying costs, they will have to refund those amounts, and they will have to refund them with carrying costs.”

The plant’s expenses and costs will be part of a future rate case, she said.

Texas Industrial Energy Consumers, the Office of Public Utility Counsel and a coalition of Houston-area cities all requested the PUC hold a hearing on Entergy’s application.

Staff File Enforcement Report

PUC staff filed its annual report on customer complaints and enforcement activities on Nov. 10, listing 6,805 electric complaints during fiscal year 2020. According to the report, staff opened 152 investigations and closed 110, approving orders that resulted in $2.2 million in administrative penalties and $225,000 in refunds.

The commission recently ended Texas Reliability Entity’s reliability monitor contract for the ERCOT market. The PUC pointed to the nearly $1.9 million in penalties in five years for noncompliance with reliability-related regional rules as evidence that it wasn’t getting its money’s worth. (See PUC Cancels Texas RE as ERCOT’s Reliability Monitor.)