Nelson Reminds REPs of Prohibition of Nodal Pass-Throughs on Fixed Rate Products

PUCT Commissioner Donna Nelson reminded REPs yesterday that the Commission has previously said that new charges under the nodal market, such as unanticipated congestion costs, may not be passed-through to customers on fixed price contracts.

The Commission first opined on this question in July (7/2), as Commissioners agreed that unexpected nodal costs did not fit the change in law or governance provision of fixed rate products which allows changes in the price.

At that time, the PUCT invited REPs disagreeing with this legal interpretation to seek a declaratory judgment from the Commission. No REP has done so, but Nelson said, in ERCOT nodal workshops, the issue of pass-throughs has come up again (Nelson did not elaborate on such discussions, but they may have been for larger customers for whom contracts may explicitly provide for such pass-throughs).

Aside from mentioning fixed price contracts (which have a strict definition in the Substantive Rules for customers under 50 kW), Nelson was not specific in her comments as to which universe of customers her comments applied (since she may have been using the term fixed price colloquially and not as defined in the Substantive Rules).

PUCT spokesperson Terry Hadley clarified that Nelson's comments were specific to the small volume customers under 50 kW for whom the Substantive Rules' definition of "fixed rate product" applies.