Texas Commissioner Concerned Proposed Change to POLR Rule Does Not Sufficiently Protect Market

Texas Public Utility Commissioner Kenneth Anderson yesterday expressed concern that a draft proposal for adoption that would allow a retail electric provider to assign its responsibility to serve as a Large Service Provider (LSP, aka non-volunteer POLR) to an affiliate does not sufficiently protect the market from uplift in cases where the affiliate of the LSP defaults or otherwise fails to meet its obligations.

See prior story for background on draft proposal for adoption

Anderson noted that the draft preamble make clear that the intent of the revised rule is that, in exchange for allowing an LSP to transfer its POLR obligations to an affiliate, the LSP must still remain responsible for such obligations, regardless of the performance of the affiliate.

However, in implementing this concept, the draft rule's language could be read in a way which limits the responsibility and obligations of the LSP, in the event of the default of its affiliate, to the provision of POLR service to customers (meaning future service, with no assumption of past obligations and any charges resulting therefrom). The rule could be read as excusing the LSP for any costs incurred by its affiliate in the affiliate's provision of POLR service which cannot be recovered from the affiliate due to its default (e.g. energy market and other ERCOT costs, TDU charges, etc.)

If the affiliate cannot pay these charges arising from its provision of POLR service, the LSP should be liable to pay such charges to avoid uplift to the market, Anderson said.

The Commission will further consider the language and the proposal will be brought back at a future open meeting.

Project 41277