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PUCT Discusses Path for Cities to Act as REPs

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November 11, 2010

The PUCT affirmed the dismissal of the City of Dallas' application for an Option 2 REP certificate, but discussed a path under which the city could still act as a REP (38630).

Commissioner Kenneth Anderson noted that if a city established a profit or non-profit corporation wholly owned or controlled by the city, that city-controlled corporation could seek a REP certificate, and bypass the legal issue raised by Staff which has argued that a municipal corporation itself may not obtain certification as a REP (9/28).

Staff agreed that if a profit or non-profit corporation which met the other requirements for REP certification applied for certification, such certification would be granted.

Although the City of Dallas cited the additional bureaucracy which would be created by establishing a new city-owned corporation merely for the purpose of obtaining a REP certificate, Chairman Barry Smitherman and Commissioner Donna Nelson were not inclined to re-open the Commission's REP certification rule, which excludes a municipal corporation from obtaining a REP certificate, for the third time in two years, despite arguments that the Commission's rule may conflict with PURA in this regard.

Anderson, stating that the Commission's certification rules on the matter were inartfully drafted and seem narrower than PURA, was open to revising the rules to examine the question of whether municipal corporations themselves are inappropriately excluded from certification under the Commission rules.

The City of Houston filed written comments yesterday expressing its support for Dallas' argument that municipal corporations are included in the definition of "persons" eligible for a REP certificate under PURA.

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