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Resolving REP Rate Uncertainty, Texas PUC Withdraws Prior Interim Order On New Oncor Rates Charged To REPs On May 1, Accepts Compliance Filing Subject To Refund

April 28, 2023

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Copyright 2010-21
Reporting by Paul Ring •

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The Texas PUC has established the new delivery charges applicable to retail electric providers at Oncor effective May 1, 2023, as the PUC has now accepted rates contained in an Oncor compliance filing, subject to refund or surcharge, after an earlier interim order had directed changes before implementation of the new rates

There have been disputes among parties concerning the compliance tariff rates resulting from Oncor's recent rate case order, with Oncor noting that uncertainty concerning the ultimate rates to be in effect on May 1, 2023 could have resulted in potential disruption to retail electric providers and customers.

In short, in action taken on April 28 which essentially reverses an earlier ruling, a PUC ALJ approved Oncor's new delivery rates as contained in an April 11 compliance tariff, to take effect on May 1, 2023

See the compliance filing with the new delivery rates here. As noted, these rates are subject to refund or surcharge

The new delivery rates are the result of the PUC's previously reported order in Oncor's base rate case.

As noted, Oncor was directed to file a compliance filing consistent with the PUC's decisions in its order

Oncor made such compliance filing, with rates based on the PUC's order and a PUC Staff number run. Rates were proposed to be effective May 1, 2023

However, TIEC filed a pleading arguing that Oncor's compliance filing rates did not reflect the Commission's order with respect to the cost of certain capacitors. TIEC argued that the PUC's final rate case written order determined that the cost of the capacitors installed on Oncor' s distribution lines (also referred to as "FERC Account 368 capacitors" or "A368 capacitors") should not be allocated to the Transmission and Primary Substation customer classes

Oncor and certain other parties argued that the Commissioners, in discussing the final rate case order during the open meeting, agreed that a proposed order should be modified in order to allocate the FERC Account 368 capacitor costs to all customer classes. Oncor argued that the final written order's language, cited by TIEC, with respect to the A368 capacitors reflected a "typographical error" and that the written order failed to reflect the, "clear decisions made by and voted upon by the Commission in Docket No. 53601."

In response, a PUC ALJ issued an interim order (Order No. 2) on April 27

In Order No. 2, the ALJ noted that parties agreed that, with respect to the FERC Account 368 capacitor costs, the compliance tariffs are not consistent with the final written order (parties dispute whether the tariffs may be approved based on the open meeting discussion not consistent with the written order).

In Order No. 2, the ALJ said, "The obligation of the administrative law judge (ALJ) in this compliance proceeding is to determine whether the revised tariffs filed by Oncor are consistent with the final Order, not whether they are consistent with a Commission discussion that preceded issuance of the final Order. Therefore, the ALJ concludes that the tariffs treat the FERC Account 368 capacitor costs in a manner that is inconsistent with the final Order and must be rejected."

In Order No. 2, the ALJ said, "Oncor filed more than 750 pages of tariffs and it is unclear whether the inconsistency taints everything, or whether portions of Oncor's tariffs can be approved while the inconsistent portions are rejected."

In Order No. 2, the ALJ directed parties to identify tariff sheets that must be rejected on the basis of the ALJ's ruling above.

In response, on April 28, Oncor noted backoffice complexities in carrying out the ALJ's directive in Order No. 2

Oncor said, "Substantial work has gone into programming and preparing Oncor's IT and billing systems to begin implementing the newly approved rates on Monday, May 1st, and there is simply no Commission Staff or Oncor number run that has calculated rates that are otherwise consistent with the Commission's decisions in Docket No. 53601 including this typographical error. Because each and every base rate in Oncor's compliance tariff filing would require revision based on Your Honor's existing ruling, it would be more administratively efficient and less confusing to ratepayers for all of the compliance tariffs to be rejected, rather than having portions of the compliance tariff be deemed effective while other portions of the current tariff, including rates, remain in effect instead of those set forth in the compliance tariff."

Oncor noted that its original compliance tariff filing is subject to surcharge or refund and asked that its original compliance rates be allowed to become effective as such. In the alternative, Oncor proposed the issuance of an order rejecting the compliance filing so an appeal of the matter to the Commission could be expedited. Such rejection would have resulted in current Oncor delivery rates continuing

With Oncor confirming its compliance rates would be subject to refund, TIEC withdrew its opposition to the compliance rates taking effect

As such, the ALJ in Order No. 3 issued on April 28 allowed the compliance tariff rates (linked above) to take effect May 1, 2023, subject to refund or surcharge.

"In light of the additional briefing of the parties and because the discrepancy regarding capacitor costs seems to be in the nature of a scrivener' s error rather than a substantive dispute, the ALJ concludes that it is appropriate to allow the rates reflected in the revised tariffs to go into effect on May 1, 2023 as planned," the ALJ said

The approved compliance tariffs mean REPs will be subject to the new delivery rates (linked above) effective May 1, 2023

Docket 54817


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