LP&L: FERC Order Will Delay Transition To Retail Electric Choice

May 5, 2023

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

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Lubbock Power & Light and ERCOT filed a joint update with the Texas PUC stating that LP&L and ERCOT anticipate that a recent FERC order, "will result in a delay of both the integration of the remaining [LP&L] load [into ERCOT] and LP&L's transition to retail competition."

Lubbock Power & Light said that it and ERCOT are currently unable to provide a definitive estimate of the magnitude of the delay due to the uncertainty surrounding the timing of the settlement and hearing procedures recently ordered at FERC

Lubbock Power & Light noted that integration of its remaining load into ERCOT is contingent on Federal Energy Regulatory Commission (FERC) approval of the May 27, 2021 agreement between LP&L and Southwestern Public Service Company (SPS), which reflects a settlement between LP&L and SPS concerning issues surrounding LP&L's full integration into ERCOT.

LP&L said that SPS submitted the agreement for approval in FERC Docket No. ER23-1144, and FERC issued an order on April 21, 2023, accepting and suspending SPS's request, and establishing hearing and settlement judge procedures to address positions advanced by intervenors in the proceeding (noted further below)

"LP&L is currently working with ERCOT and Market Participants to assess the impact of the FERC order on the timing of the integration of the remaining load into ERCOT and LP&L's subsequent transition to retail competition. LP&L and ERCOT anticipate that the FERC order will result in a delay of both the integration of the remaining load and LP&L's transition to retail competition but are currently unable to provide a definitive estimate of the magnitude of the delay due to the uncertainty surrounding the timing of the settlement and hearing procedures at FERC," LP&L said

"LP&L and ERCOT will continue working with Market Participants to complete necessary preparations to ensure that integration of the remaining load into ERCOT and LP&L's subsequent transition to retail competition can occur as expeditiously as possible once all required regulatory approvals are obtained," LP&L said

FERC is addressing filed revisions to SPS Electric Rate Schedule 138 which is the Partial Requirements Agreement (the PRA) between SPS and LP&L

The revisions implement a settlement agreement between SPS and LP&L which will permit LP&L to complete its transition from the Eastern Interconnection into ERCOT

Certain cooperatives have filed protests at FERC concerning the allocation of receipts from SPS under the settlement. Cooperatives are also seeking certain hold harmless provisions

LP&L has said in response to such protests, "Notwithstanding protests which essentially assert some right as a third-party beneficiary to the PRA, the PRA was a strictly bilateral agreement between SPS and LP&L. Protestors have no authority to dictate the terms by which SPS and LP&L may terminate the PRA. Accordingly, LP&L urges the Commission to unconditionally accept the SPS Filing and to act with all possible speed in order for LP&L to complete all necessary steps to complete its integration into ERCOT."

However, FERC in its suspension order said, "Our preliminary analysis indicates that SPS's proposed revisions to the PR Agreement have not been shown to be just and reasonable and may be unjust, unreasonable, unduly discriminatory or preferential, or otherwise unlawful. SPS's proposed revisions to the PR Agreement raise issues of material fact that cannot be resolved based on the record before us and are more appropriately addressed in the hearing and settlement judge procedures ordered below."

As noted, FERC set the matter for hearing and initiated settlement judge procedures

FERC Docket Docket No. ER23-1144-000

PUCT Docket 54553

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