The Public Utility Commission of Texas last week approved an ERCOT request to share confidential generator-specific information with Lubbock Power & Light as the municipal utility determines how to integrate its load with the ISO.
LP&L has said it will transition about 430 MW of its load from SPP to ERCOT in June 2019. LP&L and the two grid operators are each conducting studies on how the move will affect their systems and stakeholders. (See Texas PUC OKs ERCOT, SPP Studies on Lubbock Move.)
As part of its study, LP&L asked ERCOT for data the ISO is only authorized to give to transmission or distribution service providers. ERCOT asked the commission to approve a confidentiality agreement so it could provide the information to LP&L (Docket 45633).
“I think the process ERCOT has proposed is not only acceptable, but the right thing to do,” Commissioner Ken Anderson said during an open meeting Thursday.
ERCOT said LP&L’s planned move creates “unique” procedural questions that are not clearly defined in any rule or protocol. It concluded “it would be appropriate to provide generator-unit specific data to certain LP&L representatives in advance of the anticipated contested case because this is data that ERCOT is using in preparing its commission-requested study, and thus would likely be necessary to any similar study conducted by LP&L.”
The Texas ISO’s legal counsel, Chad Seely, told the commissioners that ERCOT will file a market notice informing all resource entities of the discussion before the PUC and asking for their feedback on the draft confidentiality agreement.
The PUC has delayed a decision on who will pay for studies related to the planned move. LP&L requested the delay, saying study costs shouldn’t be assigned until ERCOT and SPP finish their separate cost-benefit studies, which are expected to be finalized by midyear. (See Texas PUC Delays Assignment of LP&L Study Costs.)
An ERCOT analysis completed last June indicated it will cost $364 million and take 141 miles of new 345-kV transmission to incorporate LP&L into the Texas grid.
PUC Chair Donna Nelson referenced the March 23 announcement by LP&L and Xcel Energy subsidiary Southwestern Public Service that they had agreed to a two-year extension of a 400-MW power purchase agreement through May 2021. The contract would have expired May 31, 2019.
“Not that we should slow our process down,” Nelson said pointedly.
The announcement followed months of negotiations and more than a year of research by LP&L management to secure a “seamless transition” beyond the current PPA’s expiration. Utility officials said the extension allows the city more time to evaluate its future options and “not be pressured by the calendar.”
The “transition contract … is an important step in securing affordable and reliable power for our customers as we work toward achieving our long-term power supply goals,” said David McCalla, LP&L’s director of electric utilities, in a statement.
LP&L has been a total requirements customer of SPS since 2004, with 100% of its power purchased from SPS through the West Texas Municipal Power Agency. The utility will replace that contract with capacity and energy through a 170-MW partial-requirements wholesale contract signed with SPS in 2010; a 100-MW wind contract through its membership with the West Texas agency; 114 MW of LP&L-owned generating plants; and the 400-MW transition contract, according to the Lubbock Avalanche Journal.
Lubbock Mayor Dan Pope called the extension an “important milestone” for the city, saying it would provide “a stable and cost-effective source of power for LP&L customers while we work to join the majority of Texas as participants in the ERCOT market.”
LP&L is the third largest municipal utility in Texas, behind Austin Energy and CPS Energy, with a peak load of about 605 MW. It serves more than 104,000 meters and owns and maintains 4,936 miles of power lines and three power plants in and around the city.
Entergy Texas Compliance with MISO Control Order Nearly Complete
The PUC accepted staff’s recommendation to close one docket (Project 40979) and focus on another (Project 46397) related to Entergy Texas’ transfer of operational control of its transmission assets to MISO.
Staff told the commissioners Entergy Texas has met almost all of the commission’s material requirements from a 2012 change-of-control order approving the company’s MISO membership. Staff opened Project No. 40979 to track the utility’s and MISO’s compliance with the order.
Entergy Texas is working on the final requirement, a cost-benefit analysis of the first five years of MISO membership. The PUC’s Margaret Pemberton said a draft study is expected in August, with the final version to be filed in November.
The utility will perform two types of analyses: backward-looking, to assess actual benefits from participation in MISO, and forward-looking, to assess the project benefits of remaining in MISO rather than leaving after the first five years.
Anderson said he hopes staff looks “very carefully” at the study’s assumptions, which include comparisons with membership in SPP.
“We need to test the assumptions … in SPP and what requirements, if any, there are on load-serving entities to maintain a particular reserve margin … and how that’s enforced,” Anderson said.
PUC Approves ERS, RMR Rulemakings
The PUC approved two rulemakings related to emergency response service (Project 45927) and reliability-must-run contracts (Project 46369).
The ERS amendment will allow those resources to participate in must-run alternative (MRA) arrangements, replacing RMR generation resources.
The commission decided not to allow ERS resources to be used in local transmission emergencies. The commissioners asked staff in early March to revise the rulemaking, saying it did not favor expanding the program to prevent local load-shed events. (See Texas PUC Wary of Using ERS to Avoid Local Blackouts.)
The RMR rulemaking adjusts the notice requirements and complaint timeline applicable to suspending a resource’s operation. It also gives ERCOT the discretion to decline to enter into an RMR agreement based on the economic value of lost load, requires ERCOT approval of RMR and MRA agreements and requires refunds in some instances for capital expenditures related to those agreements.
— Tom Kleckner
