Update #2, 9:05 pm ET, 2/21 - Written Orders Posted
Updated, 7:19 ET pm, 2/21
Texas PUC "Strongly Urges" REPs to Delay Invoices To Customers
Says REP Directives Likely To Be In Place Through End of The Week
Also Directs ERCOT To Use Discretion On Settlement, Invoice Payment Timelines, In Addition To Collateral
Texas PUC Orders Retail Providers Not To Submit Disconnections For Non-Payment (Includes Prepay Plans)
Texas PUC Orders "Strongly Urges" That Invoices Not Be Issued To Customers Until Commission Works Through How To "Financially Manage" The Situation Facing The Market
PUC Directs ERCOT To Give Market Participants More Time Before Issuing Collateral Calls
February 20, 2021 Email This Story Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
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Note: This is a breaking news alert. This story will be updated as the PUC issues public statements and/or orders. Check this page for updates (you may need to refresh the page).
Update #2 9:05 pm ET 2/21
The PUC's written orders have been published
With respect to the DNP prohibition and other rules applicable to retail electric providers, the order states, "The Commission finds that there exists a public emergency and imperative public necessity that constitutes good cause for granting exceptions to the following rules:
• 16 TAC § 25.480(c), which relates to assessment of late fees on customers for delinquent bills.
• 16 TAC § 25.214(d), and Sections 188.8.131.52, 184.108.40.206, and 220.127.116.11 of the Tariff for Retail Delivery Service, which relate to the tariff provisions regarding disconnections for nonpayment.
• 16 TAC § 25.483(c), which relates to disconnection of a customer for nonpayment."
In the ordering paragraphs, the PUC ordered, until otherwise ordered:
• All retail electric providers are prohibited from sending a request to disconnect a customer for nonpayment to transmission and distribution utilities.
• All transmission and distribution utilities are prohibited from disconnecting a customer for nonpayment.
• The prohibition on disconnection also applies to prepaid customers.
• All retail electric providers must continue to offer a deferred payment plan to customers, upon request
• Exceptions are granted to the following electric rules: 16 TAC § 25.480(c), which relates
to assessment of late fees on customers for delinquent bills; 16 TAC § 25.214(d) and
Sections 18.104.22.168, 22.214.171.124, and 126.96.36.199 of the Tariff for Retail Delivery Service, which relate
to the tariff provisions regarding disconnections for nonpayment, and 16 TAC § 25.483(c),
which relates to disconnection of a customer for nonpayment
In the ERCOT order, the PUC said, "In an attempt to protect the overall integrity of the financial electric market in the ERCOT
region, the Commission concludes it is necessary to authorize ERCOT to use its sole discretion in
taking actions under the ERCOT Nodal Protocols to resolve financial obligations between a market
participant and ERCOT."
The PUC said, "It is appropriate that ERCOT’s discretion include, but not be limited to,
ERCOT’s ability to take the following actions:
• Deviate from protocol deadlines and timing related to settlements,
collateral obligations, and invoice payments;
• Utilize available funds, such as undistributed congestion revenue
right auction revenues, to cover short-paying invoice recipients;
• Relax credit requirements and releasing cash or other collateral to
provide short-term market-participant liquidity;
• Deviate from protocol requirements regarding the maximum
amount of default uplift invoices;
• Suspend breach notifications to certain market participants for
failure to make payment or provide financial security; and
• Produce reconciliation settlements following market stabilization."
The PUC's order stressed that, "This order does not relieve market participants of payment or financial security obligations with ERCOT. Moreover, market participants remain liable for all charges associated with any activity related to its relationship with ERCOT and any expenses arising from the consequences of termination of a market participant’s agreements with ERCOT or revocation of the market participant’s rights to conduct activities with ERCOT."
The PUC specifically ordered that:
1. ERCOT must exercise its sole discretion to resolve financial obligations between a market participant and ERCOT as provided by this Order.
2. Any and all provision of the ERCOT Nodal Protocols are waived to the degree necessary to allow ERCOT to take the actions ordered herein.
3. ERCOT must report to the Commission twice each day, beginning February 22, 2021, of the the actions it has taken in response to this Order.
4. ERCOT must direct any questions regarding its obligations under this Order to the Commission’s Deputy Executive Director or her designee.
During the open meeting, PUC Chairman DeAnn Walker had said, in the context of the order, that she did not "want" invoices being issued to customers, but it appears this was not a formal order
Specifically, in a news release issued by the PUC, the PUC stated, "the Commission strongly urged retail electric providers to delay invoicing for residential and small commercial electricity customers, including invoices with estimated meter reads."
The PUC said that the various directives to REPs are intended to be temporary, likely through the end of this week
"Our absolute top priority as a commission and a state is protecting electricity customers from the devastating effects of a storm that already affected their delivery of power," said Chairman DeAnn Walker. "The order and directives are intended to be temporary, likely through the end of this week, to address the potential financial impacts that are especially challenging during this extremely difficult time."
The PUC also provided further details on its direction to the Electric Reliability Council of Texas to use its discretion on certain financial protocols, with the discretion extended to settlements and invoice payments in addition to collateral obligations
Specifically, through an order, the PUC called on ERCOT to exercise the discretion under ERCOT protocols to deviate from protocol deadlines and timing related to settlements, collateral obligations, and invoice payments (which could lead to further market instability) while leaders in the state consider solutions to the financial challenges caused by the grid event.
The PUC also issued a primer concerning its recent actions with respect to wholesale pricing
The document provides various background and an overview of the market.
The primer notes that scarcity prices are paid by wholesale buyers that
have failed to purchase power in advance to hedge risk exposure for their customers.
"They are also paid by generators who do not generate power that they have committed
to provide. This acts as a penalty for generators who fail to show up when needed," the primer notes
Of note with respect to the specific actions from the PUC, the primer states:
PUC Winter Weather Pricing Order on February 15, 2021
In an emergency open meeting on Monday, February 15, the Commission convened to
correct a problem in the midst of unprecedented strain on the ERCOT grid.
ERCOT informed the Commission that a computer glitch was preventing that maximum price
from being applied. Because this penalty was not being applied, the power dispatch
system was actually taking megawatts off of the grid. The Commission ordered ERCOT
to correct that problem manually.
The individual residential consumer is not exposed to wholesale market prices, unless they
are among the very few seen recently in the news with extremely high electricity bills having
chosen a contract that is indexed to those prices.
The Public Utility Commission of Texas at a Feb. 21 emergency meeting issued orders that, among other things, prohibit retail electric providers from submitting requests for disconnections for non-payment, for residential and small commercial customers, effective immediately
The prohibition on DNPs is to last until the PUC gets the, "financial part of this worked out," Texas PUC Chairman DeAnn Walker said, referring to various financial issues in the market, discussed further below
Walker stressed that the prohibition on DNPs applies to prepay plans as well
TDUs were also ordered not to execute any DNPs
The PUC further ordered, effective immediately, that invoices shall not be issued to customers until the Commission works through how to "financially manage" the situation facing the market
Walker again emphasized that TDUs shall not estimate usage in usage data provided to REPs, as such estimates would not accurately reflect customers' zero usage during outages, as noted previously in our story yesterday. Data shall not be sent until actual usage is known
The PUC adopted waivers of applicable rules to implement the provisions noted above
The PUC's order will also include other rule waivers that are similar to the waivers adopted at the start of the COVID-19 pandemic
Although such other waivers were not immediately clear, it is expected the PUC's order will include similar relief to customers concerning late payment fees that had been adopted during the initial period of the COVID-19 pandemic
Additionally, Walker stressed that REPs, under the prior COVID-19 orders and related emergency declarations, are still under a continuing obligation to offer a deferred payment plan to all customers upon request
Walker stressed that there are "efforts ongoing" to address the financial needs of the market.
The PUC specifically expressed its intent with respect to the credit situation in ERCOT
As the PUC said that ERCOT has existing authority to use its discretion with respect to collateral, the PUC strongly urged (and essentially directed) that ERCOT give market participants more time before issuing calls on collateral
Such time is intended for the Governor and PUC to find a solution to the financial issues, and to "get us through this" until such a palatable solution to financial issues can be found, Walker said