The Public Utility Commission of Texas last week gave preliminary approval to Oncor’s and Sharyland Utilities’ proposed swap of $400 million in assets.
The order lists a set of 27 issues to be discussed before the PUC renders a decision, which is due by Feb. 1, 2018 (Docket 47469).
Oncor and Sharyland filed a settlement agreement early last month, asking the PUC to expedite the case by deciding it without referring it to the State Office of Administrative Hearings (SOAH). The companies said Sharyland’s current retail customers will receive “substantial rate relief” under the transaction, in which Sharyland will take over 258 miles of 345-kV transmission from Oncor in exchange for Sharyland’s distribution network and retail delivery customers.
“The hard work that’s gone into this is going to significantly change people’s lives,” said Commissioner Brandy Marty Marquez. “I’m happy this is all proceeding.”
Among those signing on to the settlement agreement are commission staff, the Office of Public Utility Counsel (OPUC), the Steering Committee of Cities Served by Oncor, the Alliance of Oncor Cities, numerous other Texas cities and various electric retailers. The Texas Industrial Energy Consumers (TIEC), the Targa Pipeline Mid-Continent WestTex and Golden Spread Electric Cooperative chose not to oppose the settlement.
An administrative law judge set Tuesday as the deadline to request a hearing in the docket.
The settlement would also resolve Sharyland’s separate applications to deploy an advanced metering system (Docket 44361) and requests for rate relief and a certificate of convenience and necessity (Docket 45414), and Oncor’s application to change its rates (Docket 46957).
“This will ultimately solve a lot of problems for a lot of folks,” said Commissioner Ken Anderson.
Commissioners Undecided on LP&L’s Contested-Rate Case Request
The PUC postponed a decision on how to process Lubbock Power & Light’s request to move 430 MW of its load from SPP into ERCOT. The commission is considering whether to treat the request as a contested case or refer it to SOAH, where it would be heard before an ALJ.
The commissioners will announce their decision during their Sept. 28 meeting, after reviewing a draft preliminary order (Docket 45633).
“I’m fine going to SOAH,” Anderson said. “The other tradeoff, in terms of time, is SOAH may be able to handle getting the facts. It handles much of discovery anyway.”
“If we send it to SOAH, the judge won’t do much of anything until the preliminary order comes out,” Marquez said.
LP&L is hoping for a decision before March 2018, which will enable it to maintain its plan to integrate with ERCOT by June 2021. The municipality announced its intention in 2015 to disconnect its load from SPP and join ERCOT in June 2019. That that date has since slipped, but LP&L extended a power purchase agreement with Southwestern Public Service through May 2021.
The preliminary order will allow the PUC to decide policy questions over load migrations “by putting a framework around what needs to be decided,” Anderson said.
“A ‘Hotel California’ clause in the order might be appropriate,” he said, referring to the Eagles’ lyric, “You can check out any time you like, but you can never leave!”
“Going back and forth between ERCOT and other regions is, at best, disruptive, not to mention expensive,” Anderson said.
ERCOT, SPP Agree to Rayburn Country Migration Studies
Rayburn Country Electric Cooperative representatives told the commissioners they are comfortable with ERCOT’s and SPP’s proposed scope and timeline for their studies of the East Texas co-op’s proposed transfer of much of its SPP transmission facilities and load into ERCOT (Docket 47342).
The grid operators said they would conduct individual studies using a common scope and assumptions, including an analysis of system impacts, expected changes in production costs and avoided projects. ERCOT and SPP also plan to conduct a reliability review of the transfer using power flow and system contingency analysis.
ERCOT and SPP said they expect to complete their studies on the move by February.
“It’s time to get started,” Marquez said.
Rayburn Country is an SPP member, but only about 150 MW (less than 20% of its load) and 160 miles of its transmission sit in the Eastern Interconnection. ERCOT has said it will cost $38 million to connect the SPP load with the Texas grid.
SWEPCO Seeks to Reduce Wind Catcher Costs
The commissioners consented to a list of 36 issues to be contested before an ALJ related to Southwestern Electric Power Co.’s costs associated with parent American Electric Power’s massive Wind Catcher project. (See AEP to Spend $4.5B on Largest Wind Farm in US.)
SWEPCO has filed a request with the PUC (Docket 47461) that its costs associated with the Oklahoma wind farm and EHV transmission line — $2 billion and $1.1 billion, respectively — be treated as an eligible fuel expense, and that the federal production tax credit be treated as a credit against it. The utility has estimated $1.1 billion is jurisdictional, and it wants to credit the PTC’s value against its fuel expenses, until the project can be included in base rates.
SWEPCO also wants to defer for ratemaking purposes a portion of the PTC into a regulatory liability that would be credited back to ratepayers 11 years after Wind Catcher’s planned 2020 in-service date. This would avoid a large increase in rates once the PTC expires, the company said.
The PUC referred SWEPCO’s request to SOAH early last month. OPUC, TIEC and Golden Spread have filed motions to intervene and contributed to the list of issues. That list includes accounting and cost allocation questions and whether SWEPCO needs the additional capacity.
AEP plans to build 350 miles of 765-kV lines to connect the 2,000-MW wind farm in the Oklahoma Panhandle to its SWEPCO and Public Service Company of Oklahoma subsidiaries. SWEPCO services northeastern Texas. The wind farm would be the largest in the nation.
— Tom Kleckner
