Texas' Anderson Warns TDUs to "Tread Carefully" Regarding Affiliates, As Final Rule Adopted

Last week, the Public Utility Commission of Texas adopted an update to its code of conduct rules governing utilities and competitive affiliates which did not contain any major changes to the existing provisions as sought by certain retail electric providers (such as a blanket prohibition on shared use of a name or logo).

Generally, commissioners agreed that enacting more prescriptive rules would be inappropriate given that cross-subsidization issues will be fact-specific.

However, Commissioner Kenneth Anderson warned utilities to "tread carefully," and said that potential cross-subsidization issues should be examined in future rate cases where necessary.

"I would warn the utilities, or the wires and poles companies, that have affiliates, to tread very carefully, because I will be very unsympathetic if there's any, even whiff, of cross-subsidization," Anderson said.

Anderson said that preliminary orders in rate cases should ensure that cross-subsidization issues are within the scope of the rate cases.

"For shared administrative expenses, I'll want affidavits from the CEO of the holding company, or something like that, because this is a big issue. The point is that the regulated utility and the ratepayers, that money may not be used to subsidize any competitive [business]," Anderson said.

"Because we know already that some of the companies have tread probably over the line and then kind of scurried back when it was highlighted," Anderson said.