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Settlement Would Move Sharyland SPP Load into ERCOT by January 1, 2014, Potentially Allowing Retail Choice
June 14, 2011
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Sharyland Utilities, PUCT Staff, and other parties have filed an unopposed stipulation which would move Sharyland's Stanton and Colorado City load from the Southwest Power Pool to ERCOT, potentially allowing for the introduction of retail choice (39070).
A study of a potential move to ERCOT for the Stanton and Colorado City divisions, formerly owned by Cap Rock Energy, was required as part of the acquisition of Cap Rock Energy by Sharyland (1/14).
The stipulation, signed by all parties in the case except for SPP which does not oppose the settlement, would move all of the Sharyland Stanton and Colorado City assets into ERCOT by January 1, 2014, with the exception of the Borden to Midland transmission line and related facilities.
While the Borden to Midland facilities would remain interconnected with SPP, all retail load associated with the Stanton and Colorado City divisions would move to ERCOT. The settlement also contemplates that the Borden to Midland facilities could eventually be moved into ERCOT should Southwestern Public Service no longer need the line for its SPP load.
Notably, given that another area of Texas currently not in ERCOT is considering its future membership in various RTOs (e.g. Entergy Texas), the stipulation contains a proposed finding of fact that the transfer of Sharyland's Stanton and Colorado City division customers from SPP to ERCOT is expected to lower retail rates paid by residential, commercial, and industrial customers in those divisions. The transfer would also make it possible to provide customer choice to Sharyland's Stanton and Colorado City division customers, "which is not currently feasible in SPP," the stipulation notes.
None of the former Cap Rock areas now owned by Sharyland -- including those currently within ERCOT in addition to the SPP divisions -- offer retail choice.
The stipulation provides that Sharyland's plan regarding whether to move the former Cap Rock customers within ERCOT (including the Stanton and Colorado City divisions should they move to ERCOT) to retail choice shall be filed with the PUCT on or before July 13, 2011. Furthermore, the settlement provides that as part of this retail filing, Sharyland will include as an option a scenario under which all of Sharyland's customers in ERCOT that do not currently have customer choice, including customers in the Stanton and Colorado City divisions that would be transferred to ERCOT as a result of the stipulation, plus the Brady and Celeste divisions that are currently in ERCOT, should be moved to retail competition by January 1, 2014.
The stipulation would accomplish the transfer of the Stanton and Colorado City loads into ERCOT through a novel combination of transmission disconnections from SPP and connections to ERCOT, along with new facilities, which is distinct from any of the options Sharyland originally proposed. The stipulated transfer option reduces costs versus any of the previously proposed options, and also provides flexibility should SPS no longer require that the Borden to Midland line remain connected to SPP, with costs potentially reduced further.
Estimated costs for ERCOT facilities required under the plan are $18.6 million, while the net benefits to SPP under the plan (including avoided transmission construction costs due to the transferred load) are $33.0 million.
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