By Tom Kleckner
Lubbock’s City Council and Electric Utility Board last week both approved a settlement agreement with all parties involved in Lubbock Power & Light’s effort to move 470 MW of its load from SPP to ERCOT.
The agreement, with intervenors from both systems, was approved unanimously in separate votes. Following the board’s vote, LP&L on Thursday filed the stipulation and proposed order with the Public Utility Commission of Texas for its consideration. The PUC is scheduled to take up the issue during its Feb. 15 open meeting (Docket No. 47576).
Under the agreement’s terms, LP&L will make a $24 million hold-harmless payment to Southwestern Public Service, which serves the utility’s load through a pair of long-term contracts, upon the transition’s effective date (targeted for June 1, 2021). The utility will also make five annual payments of $22 million, credited to ERCOT’s transmission customers in compensation for integration costs, and has committed to opting into the Texas ISO’s competitive market.
LP&L said it expects to achieve annual savings exceeding the two payments.
“The agreement … sets Lubbock on the best possible path forward that saves their ratepayers money and opens the door to retail electric competition in Lubbock,” the utility said in a statement.
The only issue left to decide is what entity will build the transmission facilities linking LP&L with ERCOT. The parties signing on the settlement agreement, which include PUC staff, SPS and several consumer groups, have recommended moving forward with a project already identified by ERCOT. A pair of independent transmission companies, Cross Texas Transmission and Wind Energy Transmission Texas, are urging the PUC to open the construction to competitive bidding.
ERCOT in 2016 said its preferred solution was “Option 4ow,” a $364 million project that would result in 141 miles of new 345-kV lines. Staff last week said a competitive bidding process would “consume time and commission resources” not needed if the PUC simply followed ERCOT protocols, which provide “a suitable guide in this unique situation.” (LP&L is not yet registered in the ISO and therefore not covered by its protocols.)
Cross Texas said it envisions a competitive bidding process, conducted by the PUC, that could be accomplished in about 90 days.
LP&L formally announced in September its intention to move after one of its SPS contracts expires in 2021. A second SPS deal that expires in 2044 serves the remaining 130 MW of its load.
The PUC conducted two days of hearings on the matter in January. (See Texas Regulators Noncommittal After LP&L Hearings.)
