The Public Utility Commission of Texas last week gave its final blessing to a $1.37 billion transaction involving Oncor, Sharyland Utilities and Sempra Energy (Docket 48929).
The commission signed off on the order during its Thursday open meeting, after first requesting clarification to language on certificates of convenience and necessity (CCNs) that it found confusing.
PUC Chair DeAnn Walker filed a memo before the meeting that said “having multiple CCNs can be confusing” and asked the parties to ensure the final order would not lead to unintended consequences before approving a transaction that has spent months before the commission.
“We have no concern with the brilliant memo you wrote,” Oncor General Counsel Matt Henry said.
Not to be one-upped, Lino Mendiola, legal counsel for Sharyland Utilities, said, “Matt stole my words.”
The series of transactions will result in Sempra, which acquired Oncor last year, gaining a 50% stake in Sharyland Distribution & Transmission Services and Oncor taking ownership of Sharyland’s transmission-owning InfraREIT. The asset exchange will extend Oncor’s footprint in West Texas and “de-REIT” the Sharyland utility in South Texas. (See Oncor-Sharyland-Sempra Deals Inch Toward Approval.)
The parties agreed to regulatory commitments that include a promise to provide $17 million in merger-savings rate credits and to implement a ringfence at Sharyland Utilities. Oncor and Sharyland also agreed not to seek recovery of nearly $39 million of outstanding regulatory assets.
PUC Amends Resource Adequacy Rules
The commission amended a portion of its agency rules related to resource adequacy in ERCOT and also repealed outdated language that referred to a high systemwide offer cap of $4,500/MWh (now $9,000/MWh).
The amended language will update reporting requirements “consistent with current practices” and ERCOT protocols and clarifies that the gird operator will still be able to administer pricing mechanisms, such as the operating reserve demand curve, after the peaker net margin threshold is reached and the low systemwide offer cap is applied (Project 48721). (See “Reduction in Peaker Net Margin Threshold Tabled,” ERCOT Technical Advisory Committee Briefs: March 27, 2019.)
Commission Assesses $136K in Penalties
The commission also approved three settlement agreements representing more than $136,205 in administrative penalties.
Real estate investment firm The Connor Group was fined $96,205 and ordered to provide refunds totaling $88,794 to current and former tenants related to billing of common-area electric charges (Docket 48925).
Oncor agreed to pay $25,000 for inaccurate disconnect switch telemetry that may have contributed to higher-than-normal market prices (Docket 48926).
Ector County Energy Center was docked $15,000 for a non-spinning reserve service failure (Docket 48927).
— Tom Kleckner
