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Default Retail Electric Provider at Sharyland's Cap Rock Territories Would be Limited to 15 Largest REPs Under Stipulation

March 22, 2012

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Copyright 2010-12 Energy Choice Matters

A non-unanimous stipulation concerning the transition of Sharyland Utilities' former Cap Rock service areas to retail competition would randomly assign customers not making an affirmative selection to a default REP, and would limit eligibility to serve in the default REP role to the 15 largest REPs in ERCOT, by market share (Docket 39592).

As first reported by Matters, the proposed opening of Sharyland's former Cap Rock territories would expand customer choice to over 44,000 customers

The non-unanimous stipulation was signed by all parties to the case except for Pioneer Natural Resources USA. Signatories included Sharyland, PUCT Staff, Texas Energy Association for Marketers, Reliant Energy, and TXU Energy.

Under the stipulation, implementation of retail competition for Sharyland's Stanton, Colorado City, Brady, and Celeste divisions would commence on May 1, 2014, or 90 days after Sharyland files its tariffs to implement the final Commission order approving unbundled delivery rates for those divisions, whichever is later.

Prior to the transition, customers will be able to select a REP to provide them with service when they are transitioned to competition. A deadline for when this selection must be made, in order to avoid assignment to the default REP, would be established by a transition working group.

A customer not making an affirmative selection would be assigned to a Default REP, who shall serve such customers at a market-based, month-to-month product. Customers of the Default REP would be permitted to select another REP and switch away from the Default REP without penalty.

The stipulation provides that the only REPs eligible to be selected as a Default REP will be the 15 largest REPs in ERCOT, by market share, for a particular customer class, borrowing from the eligibly criteria to serve as a Large Service Provider (POLR). The customer class designations for default REP selection would be the same as those used in the POLR process.

Default REPs must affirmatively agree to serve as a Default REP, and as part of that agreement, must also agree to serve as a Large Service Provider (POLR) for the territories until the 2015-16 POLR cycle.

Specifically, the settlement provides that no later than September 1, 2013, Staff will confidentially provide to Sharyland a list of no more than fifteen REPs by customer class qualified to serve as Large Service Providers (LSPs) in accordance with P.U.C. SUBST. R. 25.43, treating all Provider of Last Resort (POLR) areas in ERCOT as a single POLR area (hereafter, Single POLR Area). If there are less than 15 REPs qualified to serve, then the list shall only include those REPs, otherwise the list shall include the 15 largest REPs qualified to serve.

The eligible REPs included on this list shall be the REPs with the largest market share based upon retail sales in megawatt-hours, by customer class, in the Single POLR Area. The data used for these determinations will be March 31, 2012 data provided by REPs to the Commission in Project No. 40158.

No later than October 1, 2013, Sharyland will determine which of the LSP POLR REPs identified by Staff are flight-tested with Sharyland and will contact each such REP to determine whether the REP desires to opt-in as a Default REP.

No later than October 15, 2013, any LSP POLR REP that has been contacted by Sharyland that desires to opt-in as a Default REP must notify Sharyland in writing of its intent to opt-in and its agreement to serve as POLR in the Sharyland divisions that will be transitioned to competition until the next POLR selection cycle for 2015-2016.

No later than November 1, 2013, Sharyland will finalize for each customer class a list of Default REPs that includes up to the 15 largest qualifying LSP POLR REPs by market share in the Single POLR Area based on the criteria set forth above.

Per the stipulation, customer ESI IDs that have not affirmatively selected a REP will be assigned to each Default REP consistent with the following criteria:

(i) Each customer with multiple ESI IDs will be assigned to a single Default REP for all of the customer's ESI IDs;

(ii) ESI IDs for a customer class shall be assigned to Default REPs in proportion to the market share, based on retail sales in megawatt-hours as determined in the March 31, 2012 data provided by REPs to the Commission in Project No. 40158, each Default REP serves for that customer class in the Single POLR Area; and

(iii) ESI IDs shall be assigned in a non-discriminatory manner.

No later than September 1, 2013, Sharyland is to mail a notice to each of its customers providing information that (i) explains the transition to retail competition, (ii) directs customers to www.powertochoose.org to research the competitive retail electricity market in Texas and begin the process of learning about the competitive retail electricity market in Texas, (iii) explains the issuance of Sharyland's customer list to interested competitive REPs and provides a toll-free telephone number and an Internet website address to notify Sharyland of the customer's desire to be excluded from the list; and (iv) informs the customer of the availability of the no-call lists pursuant to P.U.C. SUBST. R. 25.484 and 26.37 and provides the customer with information on how to request placement on the list.

Upon request, pursuant to P.U.C. SUBST. R. 25.472, Sharyland will provide a mass customer list to any interested REP no later than December 31, 2013.

Between November 1, 2013, and March 31, 2014, Sharyland will host at least one informational meeting in each of the four divisions that will be transitioned to retail competition (the Stanton, Colorado City, Brady, and Celeste divisions).

Under the stipulation, Sharyland will file its application to establish retail delivery rates no later than May 31, 2013. Sharyland will utilize the 12 months ending December 31, 2012, as its test year in its May 2013 Application.

Sharyland's May 2013 Application will propose rates for the Stanton, Colorado City, Brady, and Celeste divisions on a combined basis, but will not include the McAllen division.

While retail competition would not begin until May 1, 2014 at the earliest, Sharyland will transfer all loads and assets of Sharyland's Stanton and Colorado City divisions from SPP to ERCOT by December 31, 2013, except for those facilities identified in the ERCOT Study Order in Docket No. 39070. It is expected this transfer will occur over the course of three weeks.

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