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Texas Judge Would Find That AEP Texas Lacks Authority To Serve Some Customers In Service Area Disputed By Co-op; Such Customers Currently Served By REPs

Adoption Of Proposal Would Require Second Phase To Determine How To Transition Customers To Co-op Service, Cease Taking Service From REP

June 19, 2018

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

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A Texas ALJ has issued a proposal for decision which would determine that AEP Texas lacks authority to serve certain customers located in the Uvalde Estate Subdivision, a residential subdivision in Uvalde County, Texas, which is the subject of a service area dispute filed by Rio Grande Electric Cooperative, Inc.

AEP Texas currently provides electric delivery service for more than 100 residential customers in the Disputed Area, with retail service to customers provided by retail electric providers.

In the Proposal for Decision (PFD), the Administrative Law Judge (ALJ) would find that AEP lacks authority to serve some, but not all, of its customers in the disputed area. Specifically, the ALJ would find that:

• The certificated service area granted to CPL in Docket No. 51 includes only the part of the Disputed Area that lies beneath the thick pink highlighter line used on Staff Exhibit 91 in Docket No. 51 to draw the boundary of CPL’s certificated service area.

• AEP Texas also has grandfathered rights to serve any consuming facility in the Disputed Area that is within 200 feet of any point on any CPL distribution line depicted in a green marker line on CPL’s Amended CCN Filing Map, which CPL submitted in Docket No. 51. The evidence shows those distribution lines were in place as of September 1, 1975.

• Under PURA and Commission rules, AEP also has grandfathered rights to serve any consuming facility in the Disputed Area that is within 200 feet of any point on any distribution line in the Disputed Area that is depicted, but not highlighted in yellow, on the Deposition Map of AEP’s Post-September 1, 1975 Facilities. The evidence shows that, except for the highlighted lines, those distribution lines were in place or CPL was actively engaged in constructing, installing, extending, improving, or adding to them as of September 1, 1975.

• AEP does not have authority to serve any consuming facility located in a part of the Disputed Area that does not fit any of the above descriptions. "AEP is unlawfully serving customers whose consuming facilities are in [disputed] areas," that do not fit any of the above descriptions, the PFD would find

The specific total number of customers that AEP Texas does not have authority to serve under the ALJ's proposal for decision was not listed; however, there are indeed some customers that would no longer be able to take distribution service from AEP Texas (and retail service from a retail electric provider) under the ALJ's proposal (in other words, the ALJ's findings concerning AEP Texas's lack of authority do impact current customers and not just areas where no consuming facilities have yet been built). Rio Grande Electric Cooperative does not currently offer customer choice.

The ALJ would conclude that, "Because AEP is unlawfully serving some customers in the Disputed Area as described in the findings of fact and conclusions of law in this Order, a second phase of this proceeding will be held to address remaining issues, including any customer protection or other transition requirements the Commission may impose."

The proposal for decision would provide that AEP Texas shall not discontinue service as a result of the PFD to any consuming facility it currently serves in the disputed area unless the Commission issues an order authorizing AEP Texas to do so. As noted above, treatment of such customers would be addressed in a second phase of the proceeding

While no decision would be reached on treatment of the customers under the PFD, the PFD does note that, "if the Commission finds AEP is unlawfully serving any customers in the Disputed Area and orders that such service cease, after the transfer those customers could receive retail electric service only from Rio Grande."

Issues to be addressed in Phase 2, if the PUC accepts the ALJ's proposed conclusion that AEP Texas lacks authority to serve certain customers, would include:

• Should additional notice, such as to the customers or REPs, be required?

• What transition period and plan should be established to protect the customers, who currently receive retail electric service through a contract with a REP?

• Will AEP Texas ask the Commission to revoke Rio Grande’s CCN to serve the area pursuant to PURA § 37.059(a)? AEP Texas has agreed that early in Phase 2, after any necessary discovery, AEP Texas would decide whether to pursue that request and promptly file a document notifying the other parties and the ALJ of its decision.

Docket 47186

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