PUCT's D'Andrea Would Exclude DC Tie Imports From Vistra Market Share, Approve Dynegy Merger Without Divestitures

Texas PUC Commissioner Arthur C. D'Andrea in a memo in advance of today's open meeting said that he would exclude from the calculation of the market share of Vistra Energy, as a result of its proposed merger with Dynegy, import capacity over the DC ties

A proposed order would include the DC tie capacity in calculating the combined firm's market share, resulting in the firm exceeding 20% market share and thus necessitating divestitures.

"Because the applicants commit not to import power into ERCOT over the DC ties, I would not use their import capacity to calculate market share," D'Andrea wrote

"Our statute is ambiguous on this point. It tells us to include any installed generation 'capable of delivering electricity' into ERCOT, but whether this means physically capable or legally capable, the statute does not say. Both senses of the word 'capable' fall easily within its ordinary meaning," D'Andrea wrote

"Given this ambiguity. I would adopt the meaning that better reflects market realities. The applicants have sworn to this agency that they will not import power over the DC ties. That commitment is legally binding and enforceable through the coercive power of the state. To my eyes, that makes the applicants 'incapable' of importing power. Our federal partners recently have adopted a similar view," D'Andrea wrote

Given that D'Andrea agrees with excluding certain capacity from the market share calculation under the interpretation of a statutory grandfathering provision, D'Andrea's position on the DC ties would mean the combined Vistra would not exceed 20% market share, and no asset sales would be required

Chairman DeAnn Walker said in a separate memo that, "I have not come to a conclusion on all of the substantive issues in this proceeding at this time. I would like the opportunity to have a discussion with you about the two outstanding issues, in particular the issue related to the DC ties."