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Texas PUC Does Not Decide "Netting" Question For Uplift Financing Program In Taking Preliminary Actions Today

August 19, 2021

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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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In directing certain preliminary actions with respect to Docket 52322, which is addressing an "uplift" financing program as directed by HB 4492, the Texas PUC at its open meeting today did not rule on the question of whether netting shall be required under the program

HB 4492 creates a program to finance, and provide funds to LSEs, Reliability Deployment Price Adder ("RDPA") charges and Ancillary Service costs above the Commission's system-wide offer cap for the period beginning 12:01 a.m., February 12, 2021, and ending 11:59 p.m., February 20, 2021 (known as "uplift")

As previously reported (see details here), the PUC had sought briefing on whether the bill requires 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, and, if not, does this offset include amounts received by entities affiliated with the entity that made such payments. Key to this question is the phrase in the statute, "exposed to the costs included in the uplift."

While a hearing will occur next week, a briefing order had raised the possibility that the PUC could address the netting question in dealing with preliminary matters.

Specifically, a prior PUC order requesting briefing on issues including netting had noted that, "[t]he Commission will consider and possibly adopt a preliminary order, which may decide these issues [such as netting], at the open meeting currently scheduled for August 18, 2021."

The Commission, however, did not address the question of netting at the open meeting today

Commissioners said that they would benefit from to-be filed rebuttal testimony and live cross examination before addressing substantive issues

In addressing preliminary matters, the PUC did direct that certain issues be addressed in a separate parallel proceeding.

Specifically, a parallel proceeding shall be used as a repository for LSEs to document their exposure to costs eligible for compensation under the program, and to address opt-outs.

Docket 52322, the original proceeding, shall decide issues including: what documentation is needed to be filed by LSEs concerning such costs; the deadline for opt-outs; and how to pro-rate the capped funds of $2.1 billion if LSEs' documented exposure exceeds this cap

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