Texas Law Judge Dismisses Mobile Generation Costs From Inclusion In CenterPoint TDU DCRF Proceeding -- EnergyChoiceMatters.com

Texas Law Judge Dismisses Mobile Generation Costs From Inclusion In CenterPoint TDU DCRF Proceeding

May 9, 2022

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Reporting by Paul Ring • ring@energychoicematters.com

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A Texas SOAH ALJ has dismissed from CenterPoint Energy Houston Electric's (CEHE or CenterPoint) distribution cost recovery factor proceeding CEHE's request for recovery of "mobile generation" costs through the DCRF proceeding

As a part of the DCRF application, CEHE included approximately $200 million for temporary emergency electric energy (mobile generation) under PURA section 39.918.

REPs favored excluding the mobile generation costs from the DCRF proceeding

The ALJ disagreed with certain intervenors that, generally, the mobile generation is prohibited from inclusion in a DCRF proceeding since such costs were claimed by intervenors to not relate to wholesale or retail distribution

However, the ALJ said that while the mobile generation statute allows for recovery through a proceeding under PURA Section 36.210 (DCRF) or in another ratemaking proceeding, the ALJ said that Section 36.210 requires the rate adjustment to, "be consistent with the manner in which costs for invested capital described by this subsection were allocated to each rate class, as approved by the commission, in an electric utility's most recent base rate statement of intent proceeding."

"CenterPoint's last base rate case did not include, and the Commission did not approve, the allocation of section 39.918-facility costs [mobile generation]. CenterPoint's argument that it can co-opt the allocation factors established in its last case rate case and address their appropriateness through testimony is not persuasive, and misses the point of adjusting an established cost for invested capital. A DCRF proceeding is not the appropriate venue for litigating factual disputes regarding the appropriate baseline allocators and whether the mobile generation at issue meets the criteria of section 39.918. The costs for section 39.918-facility invested capital must be allocated to each rate class, and approved by the Commission, in a base rate proceeding. CenterPoint has failed to state a claim for which relief can be granted," the ALJ said

As such, the ALJ dismissed the mobile generation component of CEHE's DCRF application

Docket 53442

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