Texas PUC Adopts Final Order Repealing Rule Governing GLO Retail Power Program, Due To Statutory Changes

The Texas PUC issued a final order to repeal 16 TAC §25.227 to implement HB 2263, which, as previously reported, removed provisions in PURA that authorized the Commissioner of the General Land Office to make electricity sales directly to public retail customers.

While no new customers may be served by the GLO, HB 2263 allows the GLO, or an entity operating under a contract with the General Land Office, to continue to provide retail electric service under the terms of an agreement with a customer entered into before the effective date of HB 2263, but only until the date the agreement expires, except that, any such agreement may be extended to a date not later than January 1, 2024.

Currently, the Texas General Land Office offers retail electricity under the State Power Program via a contracted REP, which is Cavallo Energy Texas, a wholly-owned subsidiary of Calpine

Prior 16 TAC §25.227, which was repealed in the final order, had the following purpose: "The purpose of this section is to establish the terms under which the General Land Office may take utility service, including transmission, distribution, and customer services, in order to convey power to public retail customers purchased under the Public Utility Regulatory Act (PURA) §35.102. This section also allows public retail customers the option to purchase power from the General Land Office. This section requires electric utilities, and municipally owned utilities and electric cooperatives that have adopted customer choice, to file tariffs to specify the terms and conditions under which the General Land Office may take utility service from an affected utility pursuant to PURA §35.103(b). These tariffs must include any stranded costs associated with providing the service."

As noted, the GLO implemented the State Power Program by contracting with a REP (which takes service under the standard delivery tariff), rather than the GLO taking delivery service as contemplated by §25.227

Project 50293