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Proposed Decision In Oncor Rate Case Addresses Inadvertent Gain Charge Applicable To Retail Providers

PFD Would Raise Flat Monthly Charges For Residential Customers Of REPs By 50¢

December 28, 2022

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Copyright 2010-21
Reporting by Paul Ring •

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Four ALJs from the Texas State Office of Administrative Hearings have issued a proposal for decision in Oncor's rate case that addresses retail electric providers' recommendation to eliminate Charge No. DD24 Inadvertent Gain (IAG) from Oncor’s Tariff for Retail Delivery Service

The ALJs recommend approving Oncor’s proposal to continue charging an inadvertent gain (IAG) charge to retail electric providers (REPs), but said that the amount of the charge should not increase. Oncor had initially proposed to increase Charge No. DD24 from the current amount of $35.65 to $36.15.

Concerning the IAG, the ALJs said that, "While the gaining REP may not be the initial source of the erroneous information, it is ultimately responsible for submitting the error to the ERCOT portal. As such, it is not unreasonably discriminatory for the gaining REP to be responsible for the cost."

"[T]he IAG charge provides an incentive to the gaining REP to validate the data," the ALJs said

"For the same reason, Oncor’s method of cost recovery [discretionary charge on REPs] better reflects cost causation than imposing the cost on all Oncor’s customers [through base rates]," the ALJs said

"The ALJs also find that the Commission’s rules do not mandate that these [IAG] costs be treated as a system service, rather than a discretionary service. The Commission’s rules do not directly address how to treat IAGs, and the rule cited by TEAM/ARM refers to TDU standard metering and billing services, and therefore, the ALJs agree with Oncor witness Hall that it applies to Oncor’s own administrative activities and error investigations for its own billing system. Accordingly, Oncor is not prohibited from treating IAGs as a discretionary service." the ALJs said

"The ALJs agree, however, with TEAM/ARM that Oncor did not provide sufficient evidence to support the proposed amount of the IAG charge, particularly given the discrepancy between the amount of revenues collected through the charge and [TEAM/ARM witness] Mr. Hendrix’s calculation of the amount it would cost for Oncor’s employees to perform the work. While Oncor provided very specific employee time allocations (0.38 and 0.45 hours, respectively, for its Revenue Management Specialist and Market Solutions Specialist positions), it did not provide any details about how those allocations were determined beyond talking with the relevant employees. Oncor did not provide any time studies or supporting documentation. Nevertheless, the ALJs also find that TEAM/ARM did not present sufficient evidence to support their proposed reduction to the IAG charge. Their proposal involves several assumptions that are not supported by record evidence," the ALJs said

"Accordingly, the ALJs conclude that it is appropriate to deny Oncor’s request for an increase in the IAG charge and to instead retain the existing charge in the amount of $35.65," the ALJs said

"Additionally, Oncor should be required to submit a time study or similar documentation in its next base-rate case detailing the calculation of the IAG charge," the ALJs said

Under the rate case PFD, the ALJs propose to set the residential service base rate charges as follows:

Customer Charge - $1.37 per customer

Metering Charge - $2.54 per customer

Distribution System Charge - $0.022979 per kWh

This reflects about a 50 cent increase in flat monthly charges for residential customers, though that's about half of the increase in flat monthly charges that Oncor had sought for this class.

Oncor had proposed to set the residential service base rate charges as follows:

Customer Charge - $1.46 per customer

Metering Charge - $2.86 per customer

Distribution System Charge - $0.026218 per kWh

The current residential service base rate charges are as follows:

Customer Charge - $0.90 per customer

Metering Charge - $2.52 per customer

Distribution System Charge - $0.019841 per kWh

Note that the charges above are for base rates, and do not include any riders.

Docket 53601


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