Oncor To Sell McAllen Distribution Service Area To AEP Texas, Transition Retail Customers

Oncor and AEP Texas have filed at the Texas PUC for approval of the proposed transfer of Oncor's distribution assets located in or around the cities of McAllen and Mission from Oncor to AEP Texas

Oncor serves approximately 3,000 electric delivery customers in the McAllen/Mission area

Under the proposal, once the transition is complete, the transitioned retail customers would be served under the existing AEP Texas - Central Division tariff.

"[T]he Joint Applicants' distribution rates are comparable, therefore, resulting charges are expected to have a neutral to positive impact for the affected customers," a witness for AEP Texas said

AEP Texas's witness also said that the customers in the newly acquired service area will not be required to pay transition charges associated with stranded costs or storm restoration costs

"The applicability of stranded generation costs to customers in this region was addressed in Docket No. 20292 and subsequent stranded cost determination and securitization proceedings. Consequently, under PURA § 39.252(b)(1) and orders in Docket No. 20292, the Company will not recover stranded costs from these customers. Similarly, AEP Texas anticipates that the Commission will issue a financing order to recover its storm restoration costs as determined under PURA § 36.405 prior to the closing of this Proposed Transaction, and the resulting charges would not apply to these customers," AEP Texas's witness said

The transition of all such customers is expected to take one to two months to complete after closing

Under the transition process, AEP Texas will establish corresponding new electric service identifiers (ESID) for each existing ESID currently assigned to Oncor in its Rio Grande Valley service area

Following the Closing Date, the transition process provides that retail electric providers ("REPs") will initiate "move-in" transactions for each new ESID with a transition date that corresponds to the scheduled monthly meter reading date. REPs will also submit "move-out" transactions for each Oncor ESID with the same transition date.

"The customer transfer process is designed to occur gradually over the course of one to two months on the normal monthly meter-reading cycle rather than one mass transition," the applicants said

"The transition process is designed to maintain the current billing cycle for the retail electric delivery customers," the applicants said

Docket 49402