By Tom Kleckner

The Public Utility Commission of Texas said it will invite stakeholder comments as it takes a cautious approach to Lubbock Power & Light’s planned integration into the ERCOT grid.

“I think this is an incredibly complicated situation. I’m not sure it’s even clear how … we evaluate it,” PUC Chair Donna Nelson said during the commission’s June 29 open meeting. “I do have concerns about the FERC jurisdiction aspect of it … I’m concerned about [Lubbock] having generation that flows outside of Texas.”

“We need to be mindful of the precedent it sets,” Commissioner Ken Anderson agreed. “I believe there might be other entities in Texas — other regions, groups — that look with envy on ERCOT, and for good reason.”

LP&L announced last September it planned to disconnect from SPP and join ERCOT by 2019. Xcel Energy, whose Southwestern Public Service subsidiary serves LP&L’s load, asked FERC in May for an $88.7 million interconnection switching fee should the municipal utility proceed with its plan. (See Xcel Asks for $88.7M Fee for Lubbock Switch to ERCOT.)

Nelson, Anderson and Commissioner Brandy Marty Marquez all said they would like to see LP&L’s integration turned into two separate cases, one involving the move from SPP’s grid to ERCOT’s, and the other involving a cost-benefit analysis of the transfer on ratepayers. Nelson said she would issue a memo outlining the parameters on further studies before the PUC’s next open meeting July 20 (Docket No. 45633).

An ERCOT study completed in June indicated it would cost $364 million and take 141 miles of new 345-kV right of way to incorporate LP&L into ERCOT. (See “LP&L Integration Could Unlock More Panhandle Wind Energy,” ERCOT Board of Directors Briefs.)

The City of Lubbock has told the PUC it would prepare an impact analysis of the LP&L load that would migrate to ERCOT, using the Texas grid operator’s report as a starting point. It said its report will be “holistically framed around three key areas of study”: the effects on existing ERCOT stakeholders, on existing SPP stakeholders and on Lubbock customers.

“I think it’s appropriate to allow people to file responses to the ERCOT filing and to what Lubbock has filed,” Nelson said. “We have to make sure ERCOT [and] the ratepayers of Texas are treated fairly. I think SPP and the ratepayers in SPP should be treated fairly too.”

Marquez said one of her concerns is “what happens to the communities that are left behind, and what kind of rates do they absorb?”

Anderson said he wants more “clarity” from ERCOT on the available integration options, saying the ISO’s preferred option “seems to be predicated on the assumption that most of what they are recommending will be needed anyway.”

“If two years later we have to go back and approve what ERCOT recommended,” Anderson said, “by then, we may have way overpaid.”

The municipality has said it faces time constraints in meeting its 2019 timeline, but the commissioners said that wasn’t their primary concern.

“I’m not going to take on that responsibility,” Nelson said. “We need to avoid putting ourselves in a position where we’re there to rescue the day if people have put themselves in that position.”

“These are Texans, but these are Texans that didn’t want us,” Marquez said. The SPS region opted out of Texas’ competitive market before it opened in 2002.

Municipal utilities Austin Energy and CPS Energy of San Antonio, both ERCOT members, also opted out of competition.