By Tom Kleckner
Texas regulators concluded two days of hearings on Lubbock Power & Light’s proposal to move 70% of its load from SPP to ERCOT last week, still debating whether the migration is in the public interest.
A partial settlement between LP&L and consumer groups resolved several issues before the Public Utility Commission’s hearing began. Yet to be settled is whether SPP and its members will be compensated for the loss of load and who will pay for the transmission facilities necessary to integrate Lubbock into ERCOT (Docket 47576).
“I don’t want anyone to leave here thinking I’ve approved this,” warned PUC Chair DeAnn Walker in drawing the two days to a close Thursday. “I have not made a decision. There are things I’m going to need to have, if we do move forward. Without those things, there’s no moving forward.”
Walker was joined in her uncertainty by Commissioner Brandy Marty Marquez, who agreed the commission has “a lot to do here.”
“I’m not sure where I am on the public-interest finding,” she said. “If we get there, that’s a big hurdle.”
Commissioner Arthur D’Andrea was not as vocal on his position. The PUC will take up the issue again this week during its open meeting, though a final decision is not expected.
The commissioners also asked LP&L and several parties to formalize an agreement in principle reached following a weekend of “diligent” negotiations. The utility announced the agreement during a prehearing conference on Jan. 17.
The utility, Texas Industrial Energy Consumers, the Office of Public Utility Counsel and PUC staff agreed that LP&L’s move to ERCOT is in the public interest, with the utility agreeing to paying $22 million annually to hold harmless the ISO’s transmission customers over five years. LP&L also agreed to cover the costs of an SPP study (about $172,000) to determine the effects losing its load would have on its members.
The agreement would also eliminate the proposed South Plains Project, a $247.5 million, 345-kV initiative that overlaps with the facilities necessary to integrate LP&L. Sharyland Utilities has proposed the transmission line as an economic project, but ERCOT’s analysis has not been able to justify the project.
The ISO has estimated it will cost approximately $360 million to connect the partial Lubbock load to its system.
LP&L is not an SPP member, but its total load of approximately 600 MW is served through a pair of long-term contracts with Southwestern Public Service. The Xcel Energy subsidiary says it is not opposed to LP&L’s efforts to join ERCOT, but it considers the move an economic one.
“Our efforts are focused on protecting the economic interests of our customers, who will bear a greater share of costs for transmission facilities that were built to serve Lubbock,” said SPS spokesman Wes Reeves.
For its part, SPP wants to protect its members from incurring additional financial liabilities. “We hope the SPP footprint is held harmless from any costs associated with Lubbock’s potential move to ERCOT,” General Counsel Paul Suskie said.
LP&L announced in September its intention to integrate 470 MW of its load within ERCOT by June 2021, after its SPS wholesale contract expires. A second SPS deal that expires in 2044 serves the remainder of its load.
The utility is hoping for a decision before March to remain on schedule. City leaders say moving into ERCOT will give most of its citizens access to the ISO’s competitive market and lower rates.
“I’m still struggling with the [megawatts] left behind,” Walker said. “Lubbock, as a city, is going to have citizens treated differently. I’m concerned about not knowing what the impact of that ultimately is going to be, and us making a decision without knowing what that’s going to be.”
The commissioners directed staff to prepare a preliminary order. It will include language designed to prevent LP&L from switching back to SPP or another RTO and likely settle the issue of who will build the transmission facilities connected to ERCOT. LP&L has proposed working with Sharyland on that project.
