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Texas Senator Requests PUC Delay Consideration Of ERCOT Admin. Fee Increase, Voices Concerns On Budget, Interest Income
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Texas State Sen. Judith Zaffirini has requested that the Texas PUC delay consideration of ERCOT's budget, and attendant increase in the system admin. fee, until various concerns are addressed, including the forecast of interest income to ERCOT
Zaffirini in a letter to the PUC wrote, "As a member of the Senate Business and Commerce Committee and of the Grid Reliability Legislative Oversight Committee, I have significant concerns about the Electric Reliability Council of Texas (ERCOT) 2024-25 Biennial Budget and System Administration Fee Submission (Project Number 38533). Increasing the consumer-paid ERCOT administration fee by 24,3 percent in a single year requires careful consideration and added transparency. Accordingly, I urge the Public Utility Commission to refuse to accept this budget submission and to delay approval until the budget is modified to address concerns. This substantial fee increase is puzzling, given ERCOT's estimates it will generate $104 million in interest income in 2023 -- at a rate of return of five percent on their unrestricted cash balances. What's more, ERCOT's assumptions of unrealistically low assumed rates of return are not justified."
Zaffirini wrote, "Some of the Texas Industrial Electric Consumers' (TIEC) questions regarding interest income were salient, but ERCOT's response was insufficient. ERCOT raised concerns about reinvestment risk and stated that only $9.7 million of the projected $120 million in interest income for 2025-27 was 'locked in,' positing that 'The remaining $110.3 million is at risk of not materializing.' This suggests that ERCOT would be unable to obtain any interest income from 2025-27, which clearly is unreasonable. As historical evidence, ERCOT estimated it would receive $0 in interest income for 2023, but its current budget shows $ 104 million. A conservative budgeting strategy has merits, but assuming zero interest income, especially in the current increasing interest rate environment, is not grounded in reality."
Docket 38533
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October 31, 2023
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Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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