Sharyland Proposes New Date for Default REP RFP in Transition to Retail Choice

Sharyland Utilities now proposes that it shall issue an RFP to select a default retail electric provider or providers for its four former Cap Rock service areas no later than April 30, 2013, as part of its plan to introduce retail competition to the service areas (39592).

The proposal was made in supplemental direct testimony filed Friday.

See background on proposed choice transition plan

Sharyland's original retail transition plan contemplated that the RFP would be issued in the fourth quarter of 2012; however, that date was proposed prior to it being clear that the retail transition plan would proceed to a contested case rather than settlement. A final order in the matter is now not expected until the early fall of 2012, necessitating the change in the RFP date.

Beginning on April 30, 2013, Sharyland will provide to any interested REP aggregated information concerning Sharyland's customers as necessary to assist the REP in responding to the RFP.

The selection of the default REP(s) will be made no later than August 31, 2013, so that Sharyland can communicate the selection to its customers and so that the default REP can prepare for the transition to retail choice, which is proposed to start January 1, 2014. The information will include rate classifications, monthly kilowatt-hour usage for the most recent 12-month period, and types of meters generally used as well as all aggregated information related to payment history and credit analysis of Sharyland's customer base, if available.

No later than December 31, 2012, Sharyland will mail a notice to each of its customers providing information that (i) explains the transition to retail competition, (ii) directs customers to www.powertochoose.org to research the competitive retail electricity market in Texas and begin the process of comparing REPs, (iii) explains the issuance of Sharyland's customer list to interested REPs consistent with P.U.C. SUBST. R. 25.472, and (iv) provides the customer an opportunity of not being included on the list.

Sharyland said that it plans to consider the following factors in making its selection of a default REP or REPs: available products (type/price), quality of service, terms of service, number or rate of customer complaints, compliance history, standing with ERCOT, and such other metrics as may be appropriate including the amount and timing of a payment per customer to Sharyland. In the event that Sharyland receives a payment per customer from the REP(s) it selects as the default REP(s), Sharyland intends to use the payment to offset costs associated with transferring Sharyland's Southwest Power Pool loads and transmission and distribution assets from SPP to ERCOT and transitioning to retail competition.

While retail competition is proposed to be initiated by January 1, 2014, it will take approximately four to six weeks before all of Sharyland's former Cap Rock customers can be moved to retail competition, Sharyland said. This is because the Stanton and Colorado City divisions cannot be disconnected from SPP and interconnected to ERCOT all at once, and is expected to take three weeks. After this is completed, Sharyland will wait until the start of the customer's next billing cycle to switch the customer to the customer's selected REP, or if no choice has been made, the default REP.

Sharyland noted that this transition will require it to serve some customers with supplemental power supply after January 1, 2014, but did not propose how to source these supplies. Sharyland's current wholesale power contract with Southwestern Public Service Company for its SPP loads terminates December 31, 2013.

Sharyland also proposed to delay the transition to retail competition to the extent unbundled distribution rates are not in place October 1, 2013.

Sharyland proposes that it be required to file its base-rate case, including a proposed transition to system-wide unbundled rates, no later than January 31, 2013. A requirement to file the base-rate case prior to the end of January 2013 would interfere with Sharyland's ability to compile all the necessary information for the rate filing package and potentially impair the quality of the rate filing package. Specifically, Sharyland said that a January 31, 2013 filing date would allow it to collect actual load research data for eight months (such data was not collected by Cap Rock in a manner consistent with the PUCT filing requirements and is thus currently unavailable)

Conversely, a rate case filing after January 31, 2013, could result in unbundled rates being approved too late to implement retail competition on January 1, 2014.

Sharyland's hope is to have a final order in the rate case at least 90 days prior to January 1, 2014 (i.e., by October 1, 2013) so that the retail electric providers will have enough time to prepare for competition. In order to address the possibility that a final order may not be issued by October 1, 2013, Sharyland proposed that the date on which retail competition is implemented shall be the later of January 1, 2014, or 90 days after issuance of a final order in the rate case.