Texas PUC Commissioners Agree To Require REPs To Pass-Through Oncor TDU Rate Savings To Transitioned Sharyland Customers
September 29, 2017 Email This Story Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • email@example.com
During a discussion concerning a stipulation and proposed order in an Oncor rate case, which is linked to a global stipulation for Oncor to acquire the Sharyland Utilities distribution service areas, Commissioners of the Public Utility Commission of Texas agreed to include a provision which will require retail electric providers to pass-through the savings from the lower Oncor rates (as Sharyland customers will be served under system-wide Oncor rates) to retail customers.
PUC Chair DeAnn Walker, in a memo in advance of yesterday's open meeting, had noted existing questions regarding the PUC's ability to require REPs to pass-through such amounts.
However, after representatives from the Alliance for Retail Markets and the Texas Energy Association for Marketers both confirmed that they agreed with the proposed pass-through language (which was filed as a supplement to a prior stipulated proposed order), which is to require REPs to pass-through the TDU rate savings to customers, Walker had no objection to the proposed language. The other Commissioners did not raise objection to the language either, and the requirement for the pass-through from the REP to the customer is set to be adopted when the Commission takes final action on the proposed order in the rate case. The Commission did not formally vote on the proposed order yesterday, as it will await a revised draft, although no further changes related to retail market issues, compared to the stipulation proposed order as supplemented, are expected.
The proposed language specifically states, "Customers who are served by their REP of Record under a contract term that extends beyond the date of transition of their ESID from SU [Sharyland] to Oncor shall receive a price reduction equivalent to the difference in the TDU charges from SU and Oncor."
The proposed language, as clarified, further states, "A REP may transfer a customer on a contract that is based on SU TDU charges to an equivalent contract based on Oncor TDU charges for the duration of the contract term so long as the other pricing terms are not higher than the other pricing terms in the original contract."
Additionally, the supplemental, non-opposed changes to the proposed order would require that when Oncor reaches an approved regulatory capital structure, Oncor will cease accrual of a regulatory liability and will return the regulatory liability in the form of a bill credit over the period specified in Rider CSR – Capital Structure Refund and Rider WCSR – Wholesale Capital Structure Refund.
"These bill credits will be passed through to REPs, who will pass the credits on to those customers to whom the REP passed on the TDU rates approved in this proceeding," per language to be included in the order
During the discussion at yesterday's open meeting, Stephen Davis, President of the Alliance for Retail Markets, acknowledged that the issue of whether the PUC has authority to require REPs to charge, or not charge, a specific rate is, "sensitive," but said that ARM agreed to the requirement in this particular case because the goal of moving Sharyland customers to the lower Oncor rates was beneficial and worthwhile
Similarly, Catherine Webking, executive director for the Texas Energy Association for Marketers, said that the goal is for the transitioned Sharyland customers to be treated the same as all other Oncor customers as quickly as possible.