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Texas ALJ Suspends Oncor DCRF Change Beyond Customary September 1 Effective Date, Retail Providers Seek Reconsideration

April 23, 2019

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Copyright 2010-19
Reporting by Paul Ring •

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A Texas State Office of Administrative Hearings Administrative Law Judge suspended the effective date of Oncor's requested update to its Distribution Cost Recovery Factor (DCRF), a charge applicable to retail electric providers taking delivery service, from September 1, 2019, until November 1, 2019

The ALJ said such extended suspension was ordered, "to allow sufficient time for a final determination."

See the proposed amounts of the new Oncor DCRF rates which would be charged to REPs here

The Alliance for Retail Markets filed a motion for reconsideration of the November 1 suspension date

ARM noted that Oncor's proposed effective date of September 1, 2019 for the DCRF rate adjustments was consistent with 16 Texas Administrative Code ("TAC") § 25.243(e)(6)(C).

The DCRF rule, specifically, 16 TAC § 25.243(e)(6)(C), designates September 1 as the effective date of a TDU's DCRF rates, unless good cause exists for a later date.

ARM noted that a September 1, 2019 effective date furthers the goal of PURA §36.210 to simultaneously implement all non-fuel rates adjusted in a 12-month period that are charged to retail electric providers (REPs), including DCRF rates.

PURA §36.210(b)(1) requires an ERCOT TDU (such as Oncor) requesting approval of a DCRF rate pursuant to the section to simultaneously implement all non-fuel rates adjusted on a 12-month period and charged to retail electric providers ("REPs"), to the extent an alignment of effective dates is possible. The September 1 effective date designated in 16 TAC § 25.243(e)(6)(C) facilitates the simultaneous implementation of two categories of such Oncor rates, consistent with PURA §36.210(b)(1), ARM said

"Prior to the adoption of the DCRF rule in 2011, the Commission established March 1 and September 1 of each year as the effective dates for the biannually updated transmission cost recovery factor ('TCRF') rates an investor-owned ERCOT distribution service provider ('DSP') charges REPs for the provision of distribution service pursuant to 16 TAC § 25.193 (Distribution Service Provider Transmission Cost Recovery Factor). Oncor is a 'distribution service provider' under the definition of the term in 16 TAC § 25.5(33). Although an ERCOT TDU chooses whether to seek the DCRF rate relief authorized by PURA §36.210, subject to certain limitations, 16 TAC § 25.193(b)(1) requires a DSP to update its TCRF rates twice a year to recover changes in wholesale transmission costs billed by transmission service providers. Given the objective of simultaneous implementation of annual TDU non-fuel rate adjustments in PURA §36.210(b)(1), the Commission purposely aligned the effective date for TDU DCRF rates in 16 TAC § 25.243(e)(6)(C)) with one of the two already established effective dates for TDU TCRF rates in 16 TAC § 25.193(b)(1). In other words, the Commission did not randomly choose the September 1 effective date for TDU DCRF rates when it adopted the DCRF rule," ARM said

ARM said that the September 1 alignment of TDU DCRF and TCRF rates facilitates a REP's efficient and timely compliance with a pricing disclosure requirement under the Electricity Facts Label (EFL)

"The alignment of the effective dates of TDU rates facilitates a REP's ability to efficiently and timely update the total average prices shown on the EFL for each of the retail electric products it currently offers in a TDU's service territory. If Oncor's DCRF and TCRF rate adjustments simultaneously become effective on September 1 of this year, a REP providing retail electric service in Oncor's service territory must update its EFLs only once to reflect those two TDU rate changes. If the November 1 effective date set by the Order remains in effect, however, the REP must update its EFLs on September 1 to reflect the Oncor TCRF rate adjustments, and then again two months later on November 1 to reflect Oncor's DCRF rate adjustments," ARM said

ARM said that the ALJ's order did not show good cause for the extension of the suspension date

"By extending the designated September 1 effective date in 16 TAC § 25.243(e)(6)(C) for two months at the outset of this proceeding, the Order contradicts the statutory directive to use an expedited procedure for processing and approving TDU DCRF rate applications," ARM said

"While the tight timeline for processing a TDU's DCRF rate application pursuant to 16 TAC § 25.243 is admittedly challenging, PURA §36.210 requires the Commission to adopt an 'expedited procedure' for the review and approval of DCRF rates. Consistent with this statutory mandate, the Commission established detailed deadlines and procedural requirements in 16 TAC § 25.243 to achieve a condensed review and approval process for TDU DCRF rate applications. These rule provisions include a 60-day decision-making deadline for the governing body of a municipality with original jurisdiction over the TDU's rates; an eight-day filing window for the TDU's DCRF application; a standardized intervention deadline; deadlines relating to motions requesting a finding of material deficiency in the TDU's application; limitations on the amount of discovery and deadlines relating to such discovery; the scheduling of technical conferences; the designated effective date of September 1; the 45-days notice period of approved TDU DCRF rates prior to their effective date; and the direct notice of those approved rates and their effective date to REPs one business day following final rate approval." In extending the rule's designated September 1 effective date for two months based on the sufficiency of time for a final determination, the Order fails to recognize the DCRF rule's implementation of a statutorily required expedited procedure for processing and approving TDU DCRF rate applications," ARM said

ARM requested that the ALJ to reconsider the decision to suspend the effective date until November 1, 2019, and to adopt Oncor's proposed effective date of September 1, 2019

Docket 49427

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