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Chair Walker: Texas PUC Must Consider Customers' Best Interests, Their Retail Choice, In Weighing Territory Dispute Between AEP Texas, NOIE Co-op

ALJ Had Found AEP Texas Does Not Have Right To Serve Some Current Customers (Who Are With REPs)

Walker: Case Should Return To PUCT For Second Phase, Determination Of Treatment Of Customers

July 26, 2018

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Copyright 2010-17
Reporting by Paul Ring •

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Update, 10:45 am: The Texas PUC this morning approved the process set forth in Chair Walker's memo, including adopting the interim PFD and its findings regarding the boundaries of the current CCN and that AEP Texas is not authorized to serve some of the customers under the current boundary. The case will be returned to the PUC for phase II, to determine the treatment of customers that AEP Texas was found to not be authorized to serve under the current CCN boundaries (though the Commission will also consider if revocation of the certificate held by Rio Grande for the area in dispute is appropriate as discussed below, which could result in AEP Texas maintaining service to such customers)

Walker urged parties to have discussions on the issue, again stressing that the focus should be the best interests of customers

While Walker would be "happy" to hold a hearing on phase II, she said there should be a better way and encouraged the parties to work things out


In a memo in advance of today's open meeting, DeAnn Walker, Chairman of the Public Utility Commission of Texas, said that the Commission must consider the best interests of affected customers, who could lose their right to choose a retail electric provider, in addressing a proposal for decision which would find that AEP Texas lacks the authority to serve some of the customers that Rio Grande Electric Cooperative (RGEC) has asserted that RGEC has the sole right to serve

As first reported by, Rio Grande Electric Cooperative (RGEC) has sought an order from the Public Utility Commission of Texas requiring AEP Texas to cease serving over 100 residences in the Uvalde Estate Subdivision (outside of Uvalde, TX) that RGEC alleged are located in an area that is singly certificated to RGEC

AEP Texas and its predecessor Central Power and Light have served the entire Uvalde Estates subdivision, including the portion of the subdivision that Rio Grande disputes, for over 40 years. Rio Grande has never served the customers in the Uvalde Estates subdivision. Rio Grande does not offer customer choice

As previously reported (see details here), a Texas ALJ has issued a proposal for decision which would determine that AEP Texas lacks authority to serve some, but not all, of the customers located in the Uvalde Estate Subdivision. Such customers are currently served by competitive retail electric providers as part of the AEP Texas service area

Under the ALJ's proposal for decision, a second phase of the proceeding would be held to address remaining issues, including any customer protection or other transition requirements that the Commission may impose as a result of finding that AEP Texas (and REPs) may not serve such customers

In her memo, Walker wrote, "While I am compelled to affirm that the maps approved by the Commission setting the original service area boundaries are the official boundaries for the service territories of the utilities, the issues raised in this case are not that simple."

"I am also compelled to take actions that are in the best interests of the customers in the Uvalde Estates subdivision. Those customers have taken service for over 40 years from AEP. They are served within a competitive market in which they have a choice of their electric retail providers. Those interests must be considered by the Commission in moving forward with a resolution to this case," Walker wrote

"Therefore, I recommend that the Commission adopt the proposal for decision for phase one of this proceeding that found AEP lacks authority to serve some, but not all, of its customers in the disputed area. However, rather than issuing a supplemental preliminary order for phase two, I recommend requesting that SOAH return the docket to the Commission in order to conduct any remaining proceedings. Because the second phase of the proceeding will present a case of first impression in which the Commission considers revoking portions of the certificate of convenience and necessity of an electric utility, I further recommend that the Commissioners conduct a hearing on those issues. I propose holding the hearing as soon as practicable. The scope of the second phase of the case should be to determine if revocation of the certificate held by Rio Grande for the area in dispute is appropriate under Section 37.059(a) of the Public Utility Regulatory Act, which provides that the Commission may revoke or amend a certificate after notice and hearing if the Commission finds that the certificate holder has never provided or is no longer providing service in all or part of the certificated area," Walker wrote

Walker further wrote that, "This case presents a classic example of a situation in which the utilities should have filed an Application for an Amendment to Certificate of Convenience and Necessity for Service Area Boundary Changes. Such a process would have addressed the application administratively within 45 days instead of expending over a year of the resources of two state agencies -- the Commission and the State Office of Administrative Hearings (SOAH)."

Docket No. 47186

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