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Texas REPs Press For Consolidation of Oncor, Sharyland Service Areas if Hunt Acquisition of Oncor Approved

January 5, 2016

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Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

The Texas Energy Association for Marketers filed a statement of position in the Public Utility Commission of Texas' proceeding considering an application by various Hunt Consolidated companies (which are affiliates of Sharyland Utilities) to acquire Oncor in which TEAM generally takes no position on whether the application to restructure and transfer ownership of Oncor should be approved, but in which TEAM says that if any such approval is granted, such approval should be conditioned on the consolidation of the Oncor and Sharyland service areas

"Approval of the Application in this case will present a unique opportunity to consolidate service areas as Oncor and Sharyland will become affiliate companies with some dually certified service areas," TEAM said

"Given the recent inefficiencies that have become apparent in Sharyland's rate levels, the benefit of consolidating these entities seems apparent. Not only would this consolidation directly benefit the current customers of Sharyland, it would bring about efficiencies in the market for all market participants. In particular, REPs would not have to maintain separate products, services, and processes based on the difference in TDU pricing and ERCOT processes for the separate Sharyland service areas. This streamlining would be of benefit to all customers," TEAM said

"Sharyland's service territory covers approximately 8,500 square miles, fully 34% of which (2,900 square miles) is dually certified with Oncor. Further, it would not be consistent with public policy to have affiliated monopoly utilities in a dually certified area. This scenario creates a potential for duplication of facilities and inefficient use of public utility rate base. Consolidation of the utilities or some form of joint services agreement that takes advantage of the system-wide efficiencies without burdening the Sharyland system with additional TDU charges would be in the public interest," TEAM said

"For these reasons, if the Application in this case is approved, the Commission should direct consolidation of the Sharyland and Oncor service territory, either by consolidating the utilities or by performing an affiliate transaction with any good cause exceptions approved as necessary," TEAM said

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