Texas Retail Electric Providers Request That Oncor McAllen Service Area Not Be Transitioned To AEP Texas Until Various AEP Rate Proceedings Complete

May 31, 2019

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Reporting by Paul Ring • ring@energychoicematters.com

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The Alliance for Retail Markets has requested at the Public Utility Commission of Texas that any transition of customers in Oncor's current McAllen/Mission service area to AEP Texas not occur until various AEP Texas rate proceedings are complete

As first reported by EnergyChoiceMatters.com, Oncor and AEP Texas have filed for approval of a sale of Oncor's McAllen/Mission service area to AEP Texas. Oncor serves approximately 3,000 electric delivery customers in the McAllen/Mission area, which it acquired in the Sharyland transaction.

ARM noted that AEP Texas currently has pending before the PUCT several rate proceedings.

Currently, AEP Texas is seeking approval of system-wide and other rates for its Central and North Divisions in Docket No. 49494, in which AEP has agreed to extend the jurisdictional deadline in the proceeding to December 20, 2019.

AEP Texas is also currently seeking approval of system restoration charges (SRC) and associated accumulated deferred federal income tax (ADFIT) credits in Docket No. 49308, in which AEP Texas has extended the statutory deadline by which a financing order must be issued to June 17, 2019. The SRCs and associated ADFIT credits will go into effect upon the completion of the bond pricing and issuance process following the Commission's approval of a financing order.

"ARM strongly contends that any transition of customers authorized by the Commission in this proceeding should not occur until the Commission has issued final orders in both of those dockets, Docket No. 49494 in particular. Otherwise, the transitioned customers will be subject to a series of rate changes within a short period of time," ARM said

"For example, if the transition precedes the effective dates of the rates approved in Docket Nos. 49308 and 49494, the transitioned customers will be initially subject to the current rates of the AEP Texas Central Division; then subject to any newly approved SRCs and ADFIT credits, assuming a late summer/early fall effective date for those charges and credits; and finally subject to any system-wide and other rates approved in the general rate case by the end of the year," ARM said

"In contrast, if the customer transition occurs subsequent to the effective dates of the rates approved in Docket Nos. 49308 and 49494, the transitioned customers will experience a change in rates only once. This timing of the customer transition will immensely benefit both the impacted customers and the retail electric providers (REPs) that serve them," ARM said

"In sum, ARM asserts the post-closing Transition Period (and in turn the transition date, effective period of the Transition Services Agreement, and the extension of any limited necessary CCN rights to allow Oncor to continue to provide electric delivery service to the transitioned customers under its tariff until the transitions are finalized) no [sic] commence no sooner than, at a minimum, the effective date of final rates authorized in Docket No. 49308 and the effective date of final rates approved in 49494, whichever is later," ARM said

Docket 49402

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