Texas PUC Briefs: Dec. 13, 2019

Commission Denies Extension Request in EPE Acquisition

Dec 17, 2019

Texas' PUC denied El Paso’s request for an extension of settlement negotiations, maintaining the agreement deadline in the acquisition of El Paso Electric.

The Texas Public Utility Commission last week denied the city of El Paso’s request for an extension of settlement negotiations, maintaining a Tuesday deadline for a stipulated agreement in the proposed $4.3 billion acquisition of El Paso Electric (49849).

The city asked for a 30-day continuance as it ponders whether to municipalize the utility. The City Council plans to discuss the issue during a Tuesday meeting.

“I welcome the city’s participation, but I hope they focus their minds if they’re really interested in municipalization,” Commissioner Arthur D’Andrea said during the PUC’s Dec. 13 open meeting. “I think it’s important that state and local governments stay shoulder to shoulder. I am very respectful of what the city is asking, but the train is moving.”

Eversheds Sutherland’s Lino Mendiola, who represents J.P. Morgan Investment Management’s Infrastructure Investments Fund (IIF), said he didn’t anticipate any “major issues” in the settlement discussions. He said he is hopeful of an uncontested settlement, “but realistically, one or two parties may not join.” (See Parties near Agreement on El Paso Electric Purchase.)

Texas Public Utility Commission — Lino Mendiola, IIF counsel, updates the commission on the El Paso Electric acquisition.

Mendiola said he may ask for a couple of days’ extension once the city’s direction becomes clearer.

“They do continue to be aligned with us, as far as the settlement agreement,” he said.

IIF and Sun Jupiter Holdings, a limited liability company formed to enter into the merger agreement, announced their proposed purchase of EPE in June.

The PUC has scheduled a hearing on the merits for Jan. 7-8.

Lubbock Asks for Revision to Settlement

The city of Lubbock offered during oral arguments to put up $2.4 million to help cut the cost of its late change it made to an agreed transmission route for one of the projects necessary to integrate Lubbock Power & Light’s load into ERCOT (48909).

Under the terms of a settlement with intervenors, the route would have crossed one of the lakes that provides the city’s drinking water. The revision adds 2 additional miles of 115-kV line at a cost of about $8 million.

The city urged the commission to approve the remainder of the unopposed route when it next considers the issue during its Jan. 16 open meeting.

The project is one of several needed to move 470 MW of Lubbock’s load from SPP to ERCOT. (See “LP&L Lines for ERCOT Integration near Final Approval,” Texas PUC Briefs: Sept. 12, 2019.)

PUC to Intervene in 2 SPP Dockets at FERC

Chairman DeAnn Walker notified her fellow commissioners that the PUC will intervene in a pair of FERC dockets involving SPP.

ER20-453 is SPP’s request to eliminate transmission revenue credits as an option for upgrade sponsors’ compensation under Attachment Z2 of the Tariff.

In docket ER20-418, SPP asked to unbundle the Tariff’s Schedule 1-A rate to change the allocation of services costs to reflect the increased revenue requirements that accompanied the growth of SPP’s Integrated Marketplace. Transmission customers would continue to pay administrative fees based on transmission usage while market participants would also pay administrative fees based on their settled market transactions.

The commissioners recently agreed to delegate the authority to determine FERC interventions to the PUC’s RTO representatives.

Commission Approves Rate Recovery, Admin Fees

In other business, the commissioners:

Approved a voluntary mitigation plan for Luminant Energy. Under state law, adherence to the plan will provide Luminant an “absolute defense” against allegations of market power through economic withholding (49858).
Agreed to a $145,000 administrative fee against retail electric provider XOOM Energy Texas over invalid door-to-door enrollments (50102).
Granted a request by CenterPoint Energy and parties to its rate case to defer regulatory consideration in hopes a settlement can be reached (49421).
Authorized adjusted transmission cost-recovery factors for EPE (49148), Texas-New Mexico Power (49586) and AEP Texas (49592); an additional $6.4 million in under-recovered costs for Oncor’s deployment of its advanced metering system (49721); and a $16.2 million refund by Southwestern Public Service for over-collected fuel costs (49690).