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Texas Gov. Narrowly Suspends Statutes Requiring Unbundling, Retail Service Via REP To Allow AEP Texas To Directly Supply Generation To Community Impacted By Hurricane

August 31, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

In accordance with section 418.016 of the Texas Government Code, the Office of the Governor of Texas granted a request from the Public Utility Commission of Texas to suspend several provisions of the Texas Administrative Code in order to allow AEP Texas to provide electric generation service to the community of Holiday Beach and surrounding areas served off the Tatton Substation, until such time that the electric transmission, substation, transformers, and other associated equipment is rebuilt.

Specifically, the following provisions of the Texas Administrative Code were suspended for the purposes of powering the area of Holiday Beach: Title II, Utilities Code, Public Utility Regulatory Act Sections 32.101, 36.004, 37.051, 39.051, 39.105, 39.157, 39.203, 39.351, 39.352, and any PUCT regulations promulgated under those sections

The suspensions are effective only to the extent necessary for AEP Texas to provide electric generation service to the community of Holiday Beach and surrounding areas served off the Tatton Substation until such time that the electric transmission, substation, transformers, and other associated equipment is rebuilt.

The PUCT had informed the Office of the Governor that the above sections of the code could prevent, hinder, or delay restoration of utility service to the area.

Included among the suspended statutes are the requirement that only a certificated retail electric provider may provide retail service, the requirement for utilities to unbundle their service, and the prohibition on a TDU offering generation to the market

The specific provisions that were suspended are as follows:

• PURA Section 32.101 - provides a requirement that utilities have to file tariffs showing rates for each service. AEP Texas will be providing a non-tariffed service through the provision of generation service.

• PURA Section 36.004 - provides a restriction that utilities can't provide service at lesser compensation than their tariffed rate. "Presumably, AEP Texas will not be billing anyone for transmission and distribution service until they are reconnected to the ERCOT grid," the PUCT's Executive Director said in the PUCT's request

• PURA Section 37.051 - has a requirement for the Commission to issue a Certificate of Convenience and Necessity (CCN) in order to provide service. Normally, a utility would need a CCN to add a new generation facility.

• PURA Section 39.051 - requires utilities to unbundle and operate as separate power generation companies, transmission and distribution utilities, and retail electric providers. AEP Texas will in essence be operating as a bundled utility until the transmission is rebuilt.

• PURA Section 39.105 - Prohibits a transmission and distribution utility from selling power or otherwise participating in the market except for buying power for its own needs. AEP Texas will be providing power to these customers.

• PURA Section 39.157 - Provides certain restrictions on how a transmission and distribution utility can interact with affiliated companies. These requirements could potentially restrict affiliates of AEP Texas from providing and operating the generation unit

• PURA Section 39.203 - Provides a requirement that utilities provide open access to the grid on the same terms as affiliates. "This should not apply here because we do not want other companies bringing in additional large generation sets," the PUCT's Executive Director said in the PUCT's request

• PURA Section 39.351 - requires a power generation company to be registered with the Commission in order to operate

• PURA Section. 39.352 - requires certification as a retail electric provider to provide or sell power at retail in the competitive marketplace

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