Texas regulators last week approved a settlement that clears the way for Lubbock Power & Light to complete its migration from SPP to ERCOT and begin offering retail choice to its customers.

The Public Utility Commission on March 9 approved an agreement between the utility and Southwestern Public Service (SPS) over the termination of a power contract that was to end in 2044. As part of the settlement, LP&L agreed to pay $77.5 million for the contract’s early termination (53529).

Golden Spread Electric Cooperative threw a late wrench into the proceeding in December when it filed opposition to the allocation of the termination payment between transmission and production functions. The co-op, which is connected to the SPS system, said the commission did not need to approve the allocation to green light the utility’s integration into ERCOT and that the issue should be adjudicated by FERC instead.

“The allocation of that payment is kind of a poison pill on the rest of the agreement,” PUC Chair Peter Lake said, pointing to LP&L’s plans to give its customers access to retail choice.

Golden Spread counsel James Guy agreed that the settlement’s proposed allocation wasn’t necessary for LP&L’s move into ERCOT. After a sidebar discussion with the other parties, the cooperative agreed to drop its opposition at the PUC. However, it reserved the right to take up the issue at FERC.

“Given the timing constraints we have … it has really never been our intent to slow the move of a group of consumers that are willing to go to ERCOT,” Guy told the commission. “We don’t intend and promise to not collaterally attack the commission’s order or make any argument of a lack of evidence for the order or anything along those lines.”

“Welcome to ERCOT,” Commissioner Will McAdams told LP&L and Lubbock city representatives.

The settlement applies to a little more than 25% of LP&L’s load, or about 170 MW. The bulk of LP&L’s load, about 470 MW, was smoothly migrated from SPP to ERCOT in 2021, the largest single transfer of customers in the latter’s history. That culminated a six-year engineering and regulatory effort that began in 2015. (See Six Years in the Making: LP&L Migrates Load to ERCOT.)

Reliant Energy Retail Services, TXU Energy and Octopus Energy have agreed to serve as safety net providers for LP&L customers. The utility will then become a transmission and distribution utility.

$1.75M Fine Recommended for TNMP

The PUC’s enforcement staff has recommended an administrative penalty of $1.75 million for Texas-New Mexico Power Company (TNMP) over its violation of metering and billing practices.

In a report, the commission’s Division of Compliance and Enforcement said the utility violated accurate meter-reading rules because it failed to make necessary changes to its advanced metering system.

A staff investigation found the utility had three-years’ notice that the system’s communication backbone was going to be discontinued but did not make replacement plans until halfway through the timeframe. They also said TNMP could have developed a back-up mitigation plan in case its vendor was unable to provide more than 170,000 new meters in time to avoid the “foreseeable” communications failures.

The results were prolonged, inaccurate estimates of power consumption for thousands of the utility’s customers.

TNMP has until March 28 to either accept the penalty or request a hearing. The recommended penalty will go into effect without a timely response.