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Parties In Texas PUC Proceeding On Interpretation Of Fixed Price Rule Reach Consensus, File Proposed Declaratory Order
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"All parties" to a relevant Texas PUC proceeding concerning permissible changes to a REP's fixed prices (Docket 56168) have stated that they are in agreement that the PUC should issue an order finding that, under PURA § 39.112(a) and 16 Texas Administrative Code (TAC) § 25.475(b)(5), retail electric providers, "may not increase the price charged under a fixed rate contract entered on or after August 1, 2022 to reflect fluctuations in securitization charges incurred during the contract term pursuant to PURA §§ 39.605 and 39.653 and the Debt Obligation Orders issued in Docket Nos. 52321 and 52322."
Under an agreed declaratory order proposed by the parties, the PUC would find that, "A REP may not increase the price charged under a fixed rate contract for a residential or small commercial customer entered on or after August 1, 2022 above the charge reflected in the customer’s EFL on enrollment to reflect fluctuations in the amount of securitization charges incurred by the REP over the life of a customer's fixed rate contract that are consistent with the formulas, procedures, and methodologies established under the Debt Obligation Orders issued in Docket Nos. 52321 and 52322."
The agreed declaratory order proposed by the parties remains subject to disposition by the PUC
The only parties to the proceeding are PUC Staff, several Just Energy retail providers, and the Office of Public Utility Counsel
As previously reported, the proceeding grew from a PUC Staff investigation of Just Energy Texas, LP and its affiliates concerning how the securitization charges were applied by Just Energy. See background here
In January 2024, Just Energy had provided a statement which had said: "The amount of Securitization Charges from ERCOT vary daily. Just Energy’s, Amigo Energy’s and Tara Energy’s ERCOT Securitization charges to customers are adjusted periodically to reflect these changes. We believe such adjustments are in the best interests of all customers and we have always been transparent with our customers regarding the ERCOT securitization charges."
The agreed declaratory order supported by all of the above-cited parties would find that, while the securitization charges may vary due to true-ups which may result in an adjustment of ERCOT’s billing requirements, "true-ups do not modify the formulas or methodologies used to allocate securitization charges across obligated market participants."
"The amount of securitization charges incurred by a REP may vary over time due to fluctuations in variable components of the formulas used to allocate charges among market participants," the agreed declaratory order states
The agreed declaratory order would find that changes in a REP's securitization charges do not reflect a change under which a REP may modify a customer's rate under a fixed price contract. In other words, the agreed declaratory order would find that a change in the securitization charge does not amount to, "actual changes in transmission and distribution utility (TDU) charges, changes to the ERCOT or Texas Regional Entity (TRE) administrative fees charges to load, or changes to federal, state, or local laws that impose new or modified fees or costs on a REP that are beyond the REP’s control," which are the limited circumstances under which a fixed rate may change
"In the retail market, customer charges associated with the recovery of securitization charges are 'recurring charges,' which must be included in the price of a fixed rate product," the agreed declaratory order would state
"Securitization charges are not TDU charges or ERCOT or TRE administrative fees charged to load. Therefore, a REP is not permitted to increase the price charged under a fixed rate contract to accommodate fluctuations in the amount of securitization charges incurred unless those fluctuations are the result of changes to federal, state, or local laws that impose new or modified fees or costs that are not within the REP’s control," the agreed declaratory order would state
"ERCOT completed the implementation of all securitization charges on August 1, 2022. Since August 1, 2022, no law governing or affecting the implementation, calculation, or allocation of securitization charges among market participants has changed. Fluctuations in the amount of securitization charges incurred by a REP due to true-up adjustments or changes in REP market activity are consistent with the original design of the charges under the Debt Obligation Orders and the statutes under which they are authorized," the agreed declaratory order would state
"Because the fluctuations in the amount of securitization costs incurred on or after August 1, 2022 are not the result of a change in law, the Commission determines that REPs may not increase the price charged under a fixed rate contract entered on or after August 1, 2022 to recover those fluctuations," the agreed declaratory order would state
The agreed declaratory order would state, "This Order is expressly limited to conduct involving fixed rate contracts entered on or after August 1, 2022, the date on which the final component of securitization charges was implemented, unless it is otherwise stated."
Docket 56168
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July 29, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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