Texas PUC, In Rule 11 Agreement, Says It Has Not Prejudged Or Made A Final Decision On Whether To Re-price ERCOT Market; Parties May Continue ERCOT ADR Process

The Public Utility Commission of Texas recently entered into a Rule 11 agreement with Luminant Energy Company LLC in which both parties agreed that, among other things, "The PUC has not prejudged or made a final decision on whether to reprice," the ERCOT market during any period of the recent weather event.

The Rule 11 agreement was filed in a proceeding addressing an appeal by Luminant.

Luminant had filed a motion at the Texas Third Court of Appeals seeking a stay of what Luminant termed the PUC's "no-correction rule" -- that is, public statements from the Chairman and then-Commissioner at the March 5 open meeting in which both said there should not be re-pricing, and the Chairman's subsequent testimony before various state legislative committees, as well as remarks on a teleconference with investors, to the same effect. Luminant said that the ERCOT Protocols and PUC Procedural Rules provide an administrative dispute resolution process to challenge improper pricing. Luminant, in its initial motion, had alleged that, "this process has been rendered meaningless because the PUC prejudged the outcome before the process even began by declaring, in the no-correction rule, that the PUC will not correct prices."

Luminant appealed to the court the "no-correction rule" as a PUC competition rule, as provided in section 39.001(e) of the Utilities Code

In its initial response, the PUC sought dismissal, arguing, among other things, that the remarks referenced by Luminant were informal and do not constitute "competition rules" or even agency action

Luminant and the PUC subsequently filed a Rule 11 agreement with the court -- an agreement among the parties which in this case includes what are essentially stipulations

Under the Rule 11 agreement Luminant and the PUC agree as follows:

• The commissioner who made the challenged statements has resigned and is being replaced.

• The PUC has not prejudged or made a final decision on whether to reprice.

• Luminant and others may continue disputing the pricing through the ADR process.

Upon the filing of the Rule 11 agreement, Luminant filed to dismiss its appeal of the no-correction rule, as the Rule 11 agreement provides Luminant all the relief it sought

Case 03-21-00126-CV