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Texas PUC Issues Clarification On Eligibility Of Certain Costs For REP Fixed Rate Pass-Throughs
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The Texas PUC today approved a declaratory order which prohibits the variations in certain ERCOT securitization charges related to Winter Storm Uri from being passed-through to certain fixed rate customers by a retail electric provider, as Commissioner Jimmy Glotfelty urged the PUC to be cautious moving forward as the PUC is presented with other costs which REPs may seek relief to pass-through
The PUC issued a declaratory order which holds as follows:
(1) Retail electric providers
may not vary the price charged under a fixed rate contract entered on or after January 11,
2022, to recover fluctuations in securitization default charges.
(2) A REP may not vary
the price charged under a fixed rate contract entered on or after August 1, 2022, to recover
fluctuations in securitization uplift charges.
While the various securitization charges became effective on the dates noted above, the specific securitization charges to a REP each month vary due to reconciliations and variations in the REP's load-share ratio. Certain Just Energy REPs had previously adjusted fixed rates (including downward when securitization charges assigned to Just Energy declined) to reflect this variation. Just Energy later agreed that the securitization variations are not eligible for pass-through, in its support for a proposed order in the proceeding. (see background here
The PUC's declaratory order finds that the variations in the above-described monthly securitization charges assessed to REPs reflect the lawfully established design of the securitization programs, and do not reflect a change in law which triggers a REP's ability to change a fixed rate
No party filed opposition to a proposed declaratory order which had set forth a similar proposed finding, and Commissioners described REPs are generally in support of the finding
The final order adopted by the PUC (which is reflected in the language cited above) did depart from the proposed order to clarify that securitization default charges and securitization uplift charges are distinct charges from ERCOT, with different effective dates, which impact the customer contract date after which a pass-through is not permitted by a REP for a fixed price customer
The final order declares that securitization charges are recurring charges and that fluctuations in the
amount of securitization charges incurred by a REP are not the result of a change in federal, state or local laws, and thus a pass-through for fixed contracts after the effective date of the charges is not permissible, for those customers to whom the fixed rate rule applies (generally, mass market customers)
Glotfelty, in supporting the declaratory order specific to the Uri securitization charges, spoke more broadly at today's PUC open meeting in stating, "I'm still a little nervous; we continue to make changes up here that have an impact on retail electric providers."
"I don't know a business out there that doesn't pass-through costs that are provided by a government or required by the government," Glotfelty said
"We just need to continue to be cautious ... in how we allow and what we allow," regarding REP fixed-price pass-throughs, Glotfelty said
Docket 56168
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Commissioner Urges Caution On Issue As More Services Developed By PUC
October 3, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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