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July 17, 2020

Texas PUC approves modifications to TDU Rate Filing Package (P-49199)

by Kelso King, Grid Monitor
Source – Grid Monitor
Posted 07/17/2020

On July 9, 2020, Staff filed a proposed order adopting revisions to the cost-of-service rate filing package(RFP) used by investor-owned transmission and distribution utilities.

The revisions require an applicant to provide information on:

  • plant additions for transmission lines, high voltage switching stations, and substations;
  • the costs and loads associated with direct current (DC) interconnections to areas outside the Electric Reliability Council of Texas (ERCOT) region; and
  • the costs to serve wholesale customers who receive service at distribution voltage.

The Commission received comments on the proposed revisions from AEP Texas Inc. and Electric Transmission Texas; CenterPoint Energy Houston Electric, LLC; Office of Public Utility Counsel; Oncor Electric Delivery Company; Sharyland Utilities; Steering Committee of Cities Served by Oncor; and Texas-New Mexico Power Company. The Commission received reply comments from AEP and ETT, CenterPoint, Cities, OPUC, Oncor, and TNMP.

In addition to summaries of parties comments, Staff’s filing included a redlined version of the RFP instructions that reflects their recommended changes to the version approved by the Commission for publication at the October 11, 2019 Open Meeting.

Open Meeting Discussion

PUCT Chairman DeAnn Walker thanked Staff for their work, adding that it was a tremendous job that was done during “a very difficult time for everyone.”

Chairman Walker discussed two proposed changes to Staff’s proposed revisions. First, Chairman proposed that the requirement to provide information on “Costs Initially Approved by Utility Management” be deleted. She believed this requirement could be done away with and the PUCT could still get the information it needs because it is in the ERCOT-approved amount and on their Monthly Construction Reports.

Based on her previous work on transmission projects, Chairman Walker noted that transmission projects that are proposed are not usually what ultimately gets approved. She noted that ERCOT staff usually comes up with an “optimal project” based on their studies, which typically differs from what the utility proposed, adding that ERCOT has “a wider view.”

Second, Chairman Walker discussed her concern with what would happen after the new RFP requirements are approved, adding that utilities may not have the required information because they did not anticipate the need for it prior to these revisions. She suggested that not having this information not be grounds for dismissing an application or disallowing costs but, in their rate filing, the utility should address the reasons for the absence. The Chairman recommended allowing some flexibility, for example, for costs incurred prior to January 2021.

Commissioner D’Andrea added that the proposed revisions reflect Staff’s attempt to pick up on the Commission’s desires over the last three years, which he noted are not always easy to discern from their random thoughts during five-minute discussions at various Open Meetings.

Commissioner D’Andrea supported deleting the cost information identified by Chairman Walker, adding that later estimates, those that ERCOT and the PUCT act upon, mean a lot but early estimates are not as valuable. He also noted that, although inevitable, he did not like how much relevance cost estimates play in the PUCT’s prudence reviews.

Chairman Walker noted that this issue was not raised in comments but only through phone calls.

Commissioner D’Andrea suggested it would be safer not to address an issue that was not raised in the formal record, but rather that this be considered in the future.

Commissioner Botkin agreed on both the issues. She noted that she was reluctant to provide a blanket waiver of unavailable information, suggesting that this be brought up on a case-by-case basis, with utilities providing short explanations of why they do not have the required information. She suggested that intervening parties not focus too heavily on arguments about the RFP being incomplete.

The Commission approved adoption of the revised Rate Filing Package requirements, consistent with the Commission’s discussion, including deleting the proposed requirement for “Costs Initially Approved by Utility Management.”

Background

On October 4, 2019, Staff filed proposed revisions to the Rate Filing Package form used by investor-owned transmission and distribution electric utility companies (TDUs). The RFP for TDUs was last revised in 2014. Staff incorporated into the proposed RFP requirements that are intended to obtain—up-front in the utility’s initial rate application—information about transmission line, high-voltage switching station, and substation plant additions consistent with the Commission’s discussion in Project No. 48251 (regarding certification of substations).

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