In New Petition, Texas Industrial Customer Seeks "Renewal" Of Retail Choice Pilot At SWEPCO

July 7, 2021

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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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East Texas Salt Water Disposal Company ("ETSWD") has filed a new petition with the Texas PUC in which ETSWD requests that the PUC initiate a project to "renew" the retail competition pilot project associated with the Southwestern Electric Power Company ("SWEPCO") service territory.

As first reported by EnergyChoiceMatters.com, the PUC recently denied ETSWD's request for a declaratory order that an unbundled tariff under a prior pilot remained available for customers

ETSWD therefore sought, "prompt implementation of a renewed pilot tariff" which ETSWD said would significantly mitigate the need for parties to pursue the right to utilize the old pilot tariff in Docket No. 51257.

ETSWD said, "As the Commission noted in its Declaratory Order in Docket No. 51257, the Commission found that '[i]n 2009 the Texas Legislature enacted an amendment to PURA chapter 39 that directly addresses SWEPCO's transition to competition. This amendment expressly grants the Commission authority to initiate a new customer-choice pilot project in SWEPCO's service area.' ETSWD asks the Commission to exercise this authority to enable electricity consumers in the SWEPCO service territory, such as ETSWD, to lower their electric bills through competition."

ETSWD said, "The Declaratory Order correctly noted that, at the time of the 2009 amendment, 'the pilot-project was not successful.' The lack of headroom limited financial incentives for customers to switch and for retailers to conduct business. At that time, SWEPCO continued to use a retail tariff approved by the Commission in the mid-1980s, about twenty-five years prior, whereas other Texas utilities initiated a pilot using far more current retail rates. Because SWEPCO's rates had not materially changed in about twenty-five years, there existed little headroom to allow a pilot program to flourish. The retail rate environment in SWEPCO's service territory today in no way resembles that during the 2000s."

ETSWD said, "While SWEPCO did not file a rate case in the years between 1984 and 2009, it has filed with the Commission and received from the Commission several significant rate increases since 2009. This string of compounding rate increases has altered headroom in the SWEPCO territory fundamentally. Three years ago in Docket No. 46449, the Commission approved $50,001,133 in new Texas retail revenues for SWEPCO, causing a net increase in Oilfield Service non-fuel rates of 42.55%. In its pending rate case (Docket No. 51415), SWEPCO now asks for an additional net increase of approximately $90,199,736 or 26.04% over its current non-fuel revenue requirement. The cumulative impact of these two rate filings would increase Oilfield Service non-fuel rates by more than 69.85% in three years without even considering the increases resulting from the 2009 rate case. The decade of rate increases have created retail headroom that did not exist in the SWEPCO service territory in the 2000s. The lack of pilot participation twenty years ago does not speak to the level of participation that will likely occur in the current rate environment."

ETSWD said, "Electricity is ETSWD's single largest cost input in its operations, making lower electricity prices vital to its ongoing operation and contribution to the East Texas economy. Because of the fundamental role that electricity prices play, ETSWD has communicated with various competitive retailers on an informal basis about providing service in a pilot. Based on these informal conversations, ETSWD believes that competitive retailers will be available for customers who wish to participate in the pilot."

Docket 52308

Separately, ETSWD also filed a motion for reconsideration of the PUC's rejection of its earlier request for a declaratory order on the prior pilot tariff

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