Texas PUC Issues Order On Appeal Concerning Notice In REP Petition To Designate New ERCOT Contingency Reserve Service As A/S Product Increasing Costs Beyond REPs' Control, Which Would Allow Adjustment To Fixed Rates

May 2, 2024

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Copyright 2010-24 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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The Texas PUC granted a partial appeal, filed by the Texas Energy Association for Marketers (TEAM) and Alliance for Retail Markets (ARM) (collectively, REP Coalition), of an ALJ's order concerning the appropriate notice required for the PUC to address the REPs' petition which requests that the PUC designate the new ERCOT Contingency Reserve Service (ECRS) as an, "ancillary service product as [sic] incurring charges beyond the REP’s control for a customer’s existing contract", which would allow REPs to apply a one-time price adjustment to a fixed rate contract that was executed before the implementation of this new ancillary service

See our prior story for background on the petition

As previously reported, an ALJ had ordered that, among other notice, REPs shall publish notice of their petition in a newspaper in each county in which an affected customer resides, and that REPs post notice on their websites

The REP Coalition appealed those two aspects of the order, calling them, "unprecedented for competitive entities and rate-regulated entities, and ... not consistent with the Commission’s rules."

See more details on the REP Coalition's appeal here

The PUC granted the REPs' appeal and ruled that the REPs are not required to post notice of the petition in newspapers, and are not required to post notice of the petition on their websites

The PUC agreed with a memo from Commissioner Lori Cobos, who noted that the proposed forms of notice that were subject to the appeal were based on requirements for notice of TDU base rate cases

Cobos wrote that the REPs' petition is distinguishable from a TDU rate case because, among other reasons, a rate case includes a change in rates, while the REP petition is addressing an issue of general applicability and guidance, and does not necessarily result in a change in rates for a customer

"A REP may choose not to pass through the charge to its customers on an existing fixed rate contract. Consequently, the additional notice requirements in Order No. 4 would result in unnecessary customer confusion by implying that a customer on an existing fixed rate contract is subject to a price change as a result of the outcome in this proceeding," Cobos wrote [emphasis by Cobos]

Cobos highlighted the process that REPs must follow if the Commission were to ultimately designate ECRS costs as an ancillary service product incurring charges beyond the REP’s control for a customer’s existing contract

"If the REP chooses to pass through the ancillary service charge, the REP must follow the notice framework in the fixed rate product's Electricity Facts Label (EFL) to effect the price change to a customer's existing fixed rate contract. Furthermore, 16 TAC § 25.475(d)(2)(B) requires that a REP's bill for a customer on an existing fixed rate contract must either show the price changes on one or more separate line items, or must include a conspicuous notice stating that the amount billed may include price changes allowed by law or regulatory actions," Cobos wrote

The PUC's action today was limited to addressing the question of notice

The PUC has not yet ruled on the REPs' petition or the question of whether ECRS costs are an ancillary service product incurring charges beyond the REP’s control for a customer’s existing contract

Resolving the notice question, as was done today, allows substantive consideration of the petition to proceed

Docket 55959

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