Parties Reach Unanimous Stipulation Allowing ERCOT to Use Nodal Surcharge Funds for Post Go-Live Nodal Transition Activities

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December 8, 2010

Parties have reached a unanimous stipulation under which the ERCOT would receive approval from the PUCT to use previously approved Nodal Surcharge revenues to pay for expenses associated with the transition to the nodal market that ERCOT will incur after the December 1, 2010 nodal market go-live date (Docket 38840).

Signing the unanimous stipulation were ERCOT, PUCT Staff, Texas Competitive Power Advocates, Texas Industrial Energy Consumers, CenterPoint Energy, Steering Committee of Cities Served by Oncor, Office of Public Utility Counsel, CPS Energy, Austin Energy, Oncor, Chaparral Steel Company, CMC Steel Texas, and Nucor Steel.

Signatories retain their right to present evidence and arguments regarding the reasonableness of ERCOT's expenditures of Nodal Surcharge revenues in subsequent proceedings.

The post go-live charges all directly relate to the nodal market transition, but the Commission's prior orders approving the Nodal Surcharge did not explicitly address using any of the surcharge revenues to fund expenses incurred after December 2010 (10/26).

ERCOT would specifically receive approval to use $25.2 million of the Board Discretionary Fund to fund the post-go-live charges.  The Board Discretionary Fund, or contingency fund, stood at $117.7 million as of October 1, 2010.

Directing the $25.2 million to post go-live expenses is expected to extend the collection period of the nodal surcharge, paid only by QSEs representing generation, by approximately three months, from approximately January 2013 to March 2013.

The use of Nodal Surcharge revenues for post-go-live charges will allow ERCOT to maintain flat fees in 2011 - i.e., the post-go-live charges will be funded without an increase in either the $0.375 per MWh Nodal Surcharge or $0.4171 per MWh System Administration Fee.

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