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Texas PUC Commissioner Would Deny Retail Providers' Sought Declaration Which Would Allow One-Time Adjustment To Subset Of Fixed Rate Contracts To Account For New Ancillary Service
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Texas PUC Commissioner Lori Cobos would deny a petition from retail electric providers that sought to allow REPs to make a one-time adjustment to certain existing fixed rate contracts to reflect the costs of ERCOT Contingency Reserve Service (ECRS), as REPs sought to designate ECRS as an ancillary service product under which REPs incur charges, "beyond the REP’s control for a customer’s existing contract."
Under the PUC's fixed rate rule, ancillary services are defined as being included in the fixed rate. As such, fixed contracts may not be adjusted due to ECRS, including fixed contracts executed prior to the start of ECRS
However, REPs may seek from the PUC a determination that a new A/S product imposes costs that are beyond the REP's control, with such determination then allowing the price charged by a REP to "vary" from the previously disclosed fixed rate in light of the new A/S product, only for those contracts entered into prior to the new A/S product.
REPs sought such a determination for ECRS
As previously reported, a proposed order from an ALJ would deny the REPs' petition
See more background here
Cobos, in a memo in advance of tomorrow's open meeting, would generally adopt the proposed findings from the ALJ and would deny the REPs' petition
Cobos said that REPs had adequate notice of the creation and implementation of ECRS
Cobos wrote, "Following the Commission's directive to ERCOT in January 2022 to prioritize the
implementation of ECRS, ERCOT engaged with stakeholders to develop a methodology for
the procurement of ECRS. Nearly a year before ERCOT first began procuring ECRS, ERCOT
began communicating to stakeholders that: (1) the targeted date to implement ECRS was
between May 2023 and January 2024, (2) upon the implementation of ECRS, the Non-Spin
requirement would not entirely be substituted by the amount of procured ECRS as was
originally proposed during the discussion of NPRR 863, and (3) hourly ECRS requirements in
2023 could vary between 1,093 MW and 3,039 MW."
"Based on these facts, I recommend that the Commission decline to designate ECRS as an
ancillary service incurring charges beyond a REP's control," Cobos wrote
Cobos proposed to take judicial notice of the relevant ERCOT issuances described above, and to incorporate such judicial notice into the final order
Two Commissioners have recused themselves from the proceeding, Commissioner Courtney Hjaltman and Chairman Thomas Gleeson. Commissioner Jimmy Glotfelty, who recently submitted a resignation from the PUC, has indicated he may not be present at tomorrow's open meeting.
Cobos and Commissioner Kathleen Jackson would thus be the only Commissioners to vote on the case.
While Commissioner Jackson's position is unknown, even a 1-1 tie vote would mean that REPs would not receive their sought relief, and that the petition would effectively be denied, if formally taken up for a vote and disposed of at tomorrow's meeting, since the REPs are the petitioning party, and the current rule (status quo) does not allow a prior fixed rate to vary or be adjusted due to ECRS
Docket 55959
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December 18, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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