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Sharyland Utilities Files To Change TCRF Allocation Factors To Remove Inter-class Subsidies, Lower Residential Bills

April 7, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

Sharyland Utilities, L.P. has petitioned the Public Utility Commission of Texas to revise its Transmission Cost Recovery Factor (TCRF) class allocation factors, to be effective with the TCRF update to take effect September 1, 2015.

The current TCRF class allocation factors are based on a test year which used load data from 2012, and Sharyland is required to continue to use the allocation factors from its last rate case until otherwise directed by the Commission. Sharyland asked for any necessary waivers to grant its petition.

"Since the end of 2012, Sharyland has experienced significant load growth in its service territory in West Texas, particularly in the Primary Service Rate Class. This extraordinary growth in the Primary Class relative to the size and growth in other rate classes has resulted in TCRF allocation factors that are not representative of each customer class's use of the transmission system, and has the potential to result in a nominal, or perhaps even negative, TCRF rate for Non-IDR metered customers in future TCRF update filings," Sharyland said.

Specifically, the total energy used by customers served in the Primary Class has grown from 448,000 MWh to 958,000 MWh. Similarly, this class's contribution to the ERCOT 4CP load has grown from 56 MW to 126 MW, and now accounts for 42% of Sharyland's total contribution to the ERCOT 4CP demand.

"This extraordinary load growth by the Primary Service class has resulted in substantial inter-class subsidies due to the continued use of the 2012 4CP demand allocator in the TCRF Rider," Sharyland said

"Because of the methodology used in the calculation of TCRF rates for Non-IDR customers in the Primary Service Rate Class, it is likely that these customers will see a negative TCRF charge as a result of future TCRF updates. In other words, it is likely that Non-IDR Primary Service Rate customers will be 'paid' for using the transmission system," Sharyland said of the current class allocation factors

Maintaining the current class allocation factors would result in the Primary Service customer class receiving an annual subsidy of approximately $2.68 million (based on 2015 wholesale transmission costs) if the current TCRF allocation factors are not updated," Sharyland said

"Revising the allocation factors as proposed by Sharyland will result in all customer classes, excluding a portion of the Primary Service Rate Class, seeing a reduction in their TCRF charges," Sharyland said

Sharyland estimated that updating the TCRF allocation factors would result in the following TCRF factors:

                          Test Year           Updated
                          Allocation         Allocation
Residential              $0.016811/kWh     $0.013693/kWh
Secondary ≤10 kW         $0.014202/kWh     $0.010873/kWh
Secondary >10 kW Non-IDR $2.576133/NCP kW  $2.066702/NCP kW
Primary Non-IDR          $0.179405/NCP kW  $1.702224/NCP kW

For a residential customer using 1,000 kWh per month, the customer's monthly bill would be reduced by approximately $3.12 based on an estimate of the next TCRF update filing, Sharyland said.

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