Texas Co-ops Allege Storage Developer's Metering "Scheme" Unlawful, Seek Dismissal Of Emergency Petition -- EnergyChoiceMatters.com

Texas Co-ops Allege Storage Developer's Metering "Scheme" Unlawful, Seek Dismissal Of Emergency Petition

July 13, 2023

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Reporting by Paul Ring • ring@energychoicematters.com

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South Texas Electric Cooperative, Inc. ("STEC") and Medina Electric Cooperative, Inc. ("Medina") filed a reply to the previously reported Request for Emergency Relief filed at the Texas PUC by Wolf Tank Storage LLC ("Wolf Tank") on July 12, 2023, with the co-ops alleging that the metering "scheme" sought by Wolf Tank, an energy storage developer, is unlawful, as the co-ops sought dismissal of Wolf Tank's emergency petition

See background on Wolf Tank's petition here

The co-ops alleged, "The conduct of which Wolf Tank complains is the failure to submit an Electric Service Identifier ("ESI ID"). However, an ESI ID was submitted to ERCOT before Wolf Tank made its Request for Emergency Relief, making Wolf Tank's allegations in its pleading moot. However, as set forth below, STEC and Medina, having recognized in August of 2022 that the metering scheme proposed by Wolf Tank in the original agreement with Medina was unlawful, because it conflicts with both the Public Utility Regulatory Act ('PURA') and the Substantive Rules of the Public Utility Commission of Texas ('PUCT' or 'Commission'), offered multiple metering alternatives to Wolf Tank to connect Wolf Tank in a manner that comports with Texas law. These issues were raised with Wolf Tank and their counsel was contacted about them in August of 2022, roughly one year ago."

The co-ops alleged, "When STEC and Medina sought to correct the metering situation, they were unable to get responses from Wolf Tank for months. Medina and STEC personnel attempted outreach to Wolf Tank and Wolf Tank refused to engage. STEC and Medina enlisted ERCOT's help to have conversations with Wolf Tank STEC also reached out to the Division of Compliance and Enforcement ('DICE') because STEC's and Medina's primary concern was that the facilities arrangement itself was unlawful and neither STEC nor Medina were willing to take actions that would allow an entity to unlawfully connect to the system without a plan to transition to compliance that was coordinated with the Commission. STEC and Medina let DICE and ERCOT know that they had made offers to temporarily connect Wolf Tank, recognizing that the initial connection was not compliant with Texas law, while a permanent solution was put in place to serve Wolf Tank that was in compliance with Texas law, but Wolf Tank refused. What is missing from the entirety of Wolf Tank's pleading is the fact that Wolf Tank's facilities scheme is unlawful and the reasons why it is unlawful."

The co-ops alleged, "The Wolf Tank storage project is located within the single certificated service territory of Medina. As part of its proposed metering arrangement, Wolf Tank has shown that the ERCOT-Polled Settlement ("EPS") meters and Wholesale Storage Load ("WSL") meters will be installed by Electric Transmission Texas, LLC ("ETT"). Wolf Tank has executed a Standard Generation Interconnection Agreement ("SGIA") with ETT. The point of disagreement that has arisen between STEC, Medina, and Wolf Tank is related to the provision of power for Wolf Tank's auxiliary load. Wolf Tank would own the step-up transformer and, presumably, the associated transmission sectionalizing equipment, distribution voltage switchgear, and other non~transmission interconnection facilities. Wolf Tank proposed to supply its auxiliary load through the 138/34.5 kV step-up transformer. The auxiliary load would draw power at 34.5 kV through a connection ahead of the WSL metering and no Medina-owned physical equipment would be used at the Wolf Tank site. Wolf Tank has proposed that Medina take readings from both the EPS and WSL meters and net the two meter readings to calculate Wolf Tank's retail charges when its auxiliary load is being supplied with power from the grid. When it is not being supplied from the grid, Wolf Tank contemplates that it would self-supply its auxiliary load as the ESR discharges."

The co-ops alleged, "Wolf Tank has fashioned its metering arrangement in a manner that nets its auxiliary load to calculate its charges by having Wolf Tank facilities embedded in the utility facilities that provide retail service rather than having the auxiliary load separately metered through utility facilities."

The co-ops alleged, "In subsequent discussions with Wolf Tank, Wolf Tank has repeatedly confirmed that it wants to measure and calculate its retail charges for its auxiliary load by using the difference between ETT's EPS and WSL meters. Despite the fact that Medina is the retail electricity utility certificated to serve the auxiliary load, Wolf Tank confirms that no physical retail meter from Medina will be used, and instead, Medina will be obligated to obtain meter data from ETT."

The co-ops alleged, "These positions confirm that Wolf Tank is aware that its auxiliary facilities are subject to retail rates and must be served by the retail electric utility certificated to serve the area in which the auxiliary load is located. In the instant matter, Medina has the right and the obligation to serve the auxiliary load because the auxiliary load is a retail customer, and Medina is the retail electric utility certificated to serve the area in which the auxiliary load is located. Alternative proposals to calculate retail rates by netting metering data, and proposals to serve a retail auxiliary load from the grid using private, non-utility owned infrastructure are not permitted."

The co-ops alleged, "STEC and Medina ask the Commission to dismiss Wolf Tank's petition as moot. STEC and Medina also ask the Commission to (i) open an investigation to separately examine Wolf Tank's facilities design, despite Wolf Tank having been allowed to interconnect, to bring Wolf Tank into compliance such that residential and small commercial distribution customers who are required to pay their retail rates are not discriminated against in favor of Wolf Tank, which is avoiding payment for distribution charges for its retail auxiliary load whenever the battery is discharging, and (ii) to ensure that Wolf Tank does not meet the definition of a retail electric utility in violation of PURA."

The co-ops said, "retail residential and small commercial distribution customers should not be discriminated against in favor of battery facilities that fail to pay distribution charges for all retail auxiliary load."

The co-ops alleged, "In the Wolf Tank metering arrangement, the auxiliary load served when the battery is being charged is metered, however when the battery discharges its Wholesale Storage Load to return to the grid, Wolf Tank uses that Wholesale Storage Load energy to serve its retail auxiliary load. In so doing, Wolf Tank is favored over other distribution customers during all of the times it is discharging by avoiding distribution charges it is required to pay, in violation of the PUCT's rules. This situation places Wolf Tank at a competitive advantage to other battery storage facilities that comply with the Commission's rules."

The co-ops alleged, "Wolf Tank's metering arrangement also places privately-owned Wolf Tank facilities within the facilities of utilities, and uses those facilities to serve retail load. Wolf Tank's proposed metering arrangement is inconsistent with PURA because it would result in Wolf Tank providing retail electric utility service through non-utility, privately-owned facilities. Retail electric service cannot be provided through facilities owned by a non-utility; that is not permitted by PURA. There are no exceptions to this requirement."

Docket 55224

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