TLSC Seeks Requirement That Texas Retail Providers Be Obligated To Pass Any Savings From Sempra-Oncor Merger To Customers, Or Allocate Funds To REP Payment Assistance Programs

In testimony filed with the Public Utility Commission of Texas opposing a non-unanimous stipulation that sets forth conditions under which Sempra's acquisition of Oncor would be approved, the Texas Legal Services Center said that retail electric providers should be required to directly credit savings provided to REPs as a result of the acquisition to customers or such amounts should be allocated to the REPs' billing assistance programs

As previously reported, the stipulation provides for credits related to Oncor distribution rates. The stipulation does not provide for a specific mechanism for the payment of rate credits to customers, other than creating a duty for Oncor to work with REPs concerning any mechanism. See more details here

"Customers are responsible for assuming all costs and debts of a regulated utility. All of a utility's money, including shareholder dividends come from the utility's customers. When savings are realized they are the customer's savings. Yet, the Stipulation makes no agreement that residential customers will see savings on their bills as a result of this merger," Carol J. Biedrzycki testified on behalf of Texas Legal Services Center

Noting that the stipulation does not set forth any mechanism for the payment of credits, Biedrzycki testified, "The Stipulation delays any decision until a future date to an informal negotiation to determine if and how customers would be credited any savings from the merger on their bills."

"It is my understanding that this provision [for future negotiation] is in the Stipulation because there is disagreement among the parties as to whether or not the law requires the savings to be returned to customers. The order in this proceeding is the appropriate place for the Commission to guide when and how savings will be returned. There is no guarantee that the informal process will work any better than the negotiation of the Stipulation and customers will not receive the protection they deserve from the authority placed in the Commission to protect the public interest. A decision about how savings are distributed should be made now arid included in the Commission's order," Biedrzycki testified

"According to a very brief description on p. 18 of the Stipulation, I assume that Oncor will credit bills to customers on the savings attributable to Oncor when it sends bills to Retail Electric Providers (REPs). The unanswered question is if and how REPs will pass the savings on to their retail customers," Biedrzycki testified

"Under the Stipulation the Commission surrenders its authority to guide and oversee customer refunds by REPs to an informal process. Instead of the Commission taking charge, Sempra and Oncor agree to work in good faith with the parties when the time comes to decide about a refund. Under this arrangement REPs could have no obligation to pass on their savings to customers. This places customers at risk of never receiving any benefit," Biedrzycki testified

Biedrzycki noted that in the proceeding addressing Oncor's change-in-control under the Energy Future Holdings leveraged buyout (Docket No. 34077), a stipulation in that case, "was amended to address the issue of the amount of savings and how the savings would be credited to customers."

In the prior EFH-Oncor case, "A REP was given two options. The REP could decide to return the savings to its customers with a bill credit or the funds could be allocated to the REP's bill payment assistance program along with any unclaimed funds. The unclaimed funds are funds that cannot be credited to a customer because the customer has left the system. It is my recommendation that the Commission clarify that the same actions be taken in this proceeding," Biedrzycki testified

Docket 47675