Texas PUC Seeks Briefing On Offsets, Affiliates In Determining Whether Entities Eligible For Compensation Under Reimbursement Financing Program For Costs Above ERCOT Price Cap
July 21, 2021 Email This Story Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
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The Texas PUC has issued a request seeking briefing on the treatment of offsets and affiliates in determining an entity's eligibility to seek compensation under the financing program established to compensate entities for costs above the system-wide offer cap during the relevant period of the winter weather event.
The PUC noted that any debt obligation order for such "uplift" financing program must provide the process for remitting the proceeds of the financing to load-serving entities who were "exposed to the costs included in the uplift balance," including a requirement for the load-serving entities to submit documentation of their exposure.
The PUC noted that some load-serving entities only made payments that included amounts in excess of the commission's system-wide offer cap. Other entities that made such payment may have also received payments -- or an affiliated entity may have received payments-that included amounts in excess of the commission's system-wide offer cap. "Some entities may be part of large, complex business structures where the entity that made such payments and the affiliated entities are separated by multiple levels of corporations and partnerships," the PUC noted
To assist the Commission in developing the required debt-financing mechanism, the Commission requested briefing on the following issues.
1. Does the phrase "exposed to the costs included in the uplift" contemplate offsetting the amounts paid in excess of the commission's system-wide offer cap by amounts received in excess of the commission's system-wide offer cap? If so, does this offset include amounts received by entities affiliated with the entity that made such payments?
2. What is the appropriate definition for entities affiliated with the entity that made such payments? If the entity that made such payments is part of a larger business structure, what is the highest level of the business structure (up to the ultimate parent of the larger business structure) that should be used to identify the affiliated entities whose amounts received should be used as an offset when determining the exposure of the entity that made such payment?