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Sharyland Proposes Expanding Choice to 44,000 Customers in Four New Regions of Texas
July 14, 2011
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Sharyland Utilities, L.P. has proposed expanding retail choice to all of its service areas in Texas effective January 1, 2014, which would expand customer choice to over 44,000 customers who currently buy electric supply from Sharyland (Docket 39592).
Under the proposal, Sharyland would expand choice to its Brady and Celeste divisions, which are currently within ERCOT, and its Stanton and Colorado City divisions, which are to be moved to ERCOT by January 1, 2014 under an order issued last week (7/11).
Those four divisions include 25,671 residential customers, 11,251 small commercial customers, 768 large commercial customers, 2,233 irrigation customers, and 4,082 non-metered premises (streetlighting, etc.). The accounts total to about 44,000 ESI IDs.
If Sharyland's proposal is approved, it would represent the first new investor-owned utility area opened to choice in Texas since the launch of the retail market in January 2002 (The Nueces Electric Cooperative opened its service area to choice starting with a pilot 2004, but as a cooperative it did not have to establish a price to beat or undergo other mechanisms in the same manner as the formerly integrated IOUs).
Any special legislative provisions regarding the now-Sharyland service areas, which had originally delayed choice for a period early last decade, have expired, and the transition to competition may be directed by the PUCT under the "standard" provisions in PURA governing such transitions.
Sharyland's McAllen division has offered customer choice since the opening of the ERCOT market on January 1, 2002.
Default REP and Delivery Tariff
Sharyland does not currently own generation or a REP, and customers in the four non-choice service areas are served via power purchase agreements. The utility is not seeking to serve as the affiliated or default REP as part of the transition to choice.
Rather, Sharyland Utilities proposes to select one more default REPs to serve customers that have not otherwise designated a REP on or before the fourth quarter of 2013.
Additionally, customers would be given an opportunity to choose a REP prior to this assignment of customers to the default REP. Sharyland said that it would inform customers via bill insert of the deadline to affirmatively select a REP prior to the assignment (as well as through customer meetings and other outreach), but it does not appear that there would be any "balloting" or check-off provided to customers to facilitate this process.
After the initial assignment of non-choosing customers to the default REP, new service accounts would not be assigned to the default REP; rather, as is the case for new accounts elsewhere in ERCOT, the customer would be required to affirmatively select a REP to initiate service.
Based on the silence in Sharyland's proposal regarding this issue, there would apparently be no price to beat for the default REPs, and default REPs would be free to charge competitive pricing as they saw fit. After being assigned to the default REP, customers could freely choose another REP at any time according to the switching timeline in the ERCOT market, with no penalty or minimum stay.
Sharyland said that, "a key objective of the RFP would be to ensure that the selection of a Default REP will provide reasonable service to Sharyland's customers based on available products, quality of service, terms of service, possibly a financial payment and such other metrics as may be appropriate."
The RFP will likely be issued during the fourth quarter of 2012. Sharyland will evaluate the responses and designate one or more Default REPs during the first quarter of 2013. The RFP will allow REPs to bid on individual customer classes, but will not allow REPs to select individuals or groups of customers, Sharyland proposed.
As noted above, Sharyland will hold a series of public meetings to educate customers about the transition to choice, and would provide information on its website and in bill inserts.
For delivery service provided and charged to REPs, Sharyland proposed to modify its existing McAllen division Tariff for Retail Delivery Service to apply it to all of Sharyland's divisions. Chapter 6 of the tariff would be revised to add new rate schedules that will apply to the Brady, Celeste, Stanton and Colorado City divisions. "Those new rate schedules would be consistent with the Commission's retail delivery tariffs for ERCOT transmission and distribution utilities as set forth in P.U.C. SUBST. R. 25.214 and with Sharyland's existing rate schedules," Sharyland said.
As a transitional matter until Sharyland files its next base rate case, the rates for the four new choice divisions would be derived from the existing tariffs applicable to those four divisions. Specifically, Sharyland would utilize the existing rate classes and rates now applicable to the Stanton, Colorado City, Brady and Celeste divisions, except that all power supply costs would be removed.
Sharyland plans to file with the PUCT a proposed retail delivery tariff applicable to the Stanton, Colorado City, Brady, and Celeste divisions during the first quarter of 2013.
Operational and Billing Issues
REPs currently tested and qualified to serve Sharyland's McAllen division would be able to serve customers in the four new choice divisions without additional testing. For REPs not yet qualified on the Sharyland system, Sharyland will need to perform routine testing, in conjunction with ERCOT, to ensure that billing and other systems are properly integrated. Such testing will occur on an ongoing basis according to the normal ERCOT schedule (three time per year, six to eight weeks per test flight).
Sharyland will develop Electric Service Identifiers (ESI IDs) for each service delivery point in the four divisions to be moved to retail competition, according to ERCOT Nodal Protocols Section 15.4. The transition of the four divisions to retail competition will require Sharyland to create approximately 44,000 ESI IDs.
Consistent with ERCOT Protocols, Sharyland will also incorporate historical data, if available, to create a historical profile of each ESI ID to facilitate customer interaction with REPs and ERCOT.
Additionally, because the ERCOT retail market requires a 15-minute settlement interval, but most customers in the four Sharyland divisions do not have meters capable of measuring such intervals, Sharyland will utilize load profiling to estimate 15-minute loads for such customers. Load profiles will be created and updated in accordance with Section 18 of the Nodal Protocols.
As part of the transition to competition, Sharyland will need to coordinate billings for pre-January 1, 2014, bundled service with billing for REP service from January 1, 2014, forward. That will require that each meter be read so that a base meter reading for REP service can be established.
Because it will be impossible to physically read all meters in one day, Sharyland will coordinate with its power provider(s) and REPs to determine the best arrangement for all parties to ensure a final meter read prior to the retail competition implementation date. Given the nature of Sharyland's service areas, the meter reading and billing transition process likely will be coordinated by substation to ensure an efficient and accurate result as well as continuity of service and bill accuracy for all customers.
Sharyland further said that it already has all systems and procedures needed to support retail competition in place due to the offering of choice in the McAllen division, and that the additional transactions from expanding choice can be handled by the existing backoffice system.
"Sharyland believes that its customers would benefit from a move to retail competition. That would occur both because the customers would benefit from competitive prices and product offerings as well as from the inherent efficiencies associated with Sharyland utilizing the same systems and procedures for all of its customers," Sharyland said.
"The likelihood that customers will benefit from retail competition is confirmed by the fact that various customers have encouraged Sharyland to implement retail competition," Sharyland added. Prior to its acquisition by Sharyland, several customers at the then-Cap Rock Energy petitioned the PUCT in 2008 to introduce choice to the utility (9/12/08)
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