Texas PUC Staff Provides Direction To Retail Providers Concerning Pass-Through Of ERCOT Uri Securitization Charges To Customers

Staff of the Public Utility Commission of Texas issued a memo concerning the line-term that should be used to the extent a retail electric provider, if permissible, passes through ERCOT nonbypassable uplift charges related to the winter storm Uri securitization

Staff noted that, on October 13, 2021, Commission issued a debt obligation order under PURA § 39.653 (Subchapter N) that authorized the assessment of nonbypassable "uplift charges" upon Qualified Scheduling Entities (QSEs) representing obligated Load-Serving Entities (LSEs).

"To the extent permissible, the term to be used by a REP that chooses to include the recurring uplift charges as a separate line item on retail customer bills is '"Market Securitization (Debt) Financing'," Staff said

To the extent the separate recurring nonbypassable "default charges" separately authorized under PURA § 39.603 (Subchapter M) are also passed-through by a REP, Staff said that the Subchapter N and Subchapter M charges should be combined into a single line item

Staff said, "If applicable to a retail customer's bill, the recurring default charges authorized by the Commission under PURA § 39.603 should be combined with the uplift charges as a single line item using the term, 'Market Securitization (Debt) Financing'."

Staff also offered further clarification of its recent memo on how REPs must treat and distribute proceeds that they receive from the securitization (see details here)

On page 3 of Staff's June 14 memorandum, Staff had stated that Load-Serving Entities (LSEs) must "maintain debt obligation bond proceeds in a segregated account" during the distribution process.

Staff clarified that, "A segregated account does not have to be a segregated bank account. At a minimum, the segregated account must be a separate account in an accounting system where all transactions can be easily tracked, monitored and reconciled with a robust audit trail. The purpose of this requirement is to enable Commission Staff to properly monitor the funds-not create an undue administrative burden."

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