Texas REPs Seek Elimination Of Oncor Inadvertent Gain Fee Charged To REPs

In joint testimony in Oncor's rate case, the Texas Energy Association for Marketers (TEAM) and the Alliance for Retail Markets (ARM) sought the elimination of Charge No. DD24 Inadvertent Gain (IAG) from Oncor’s Tariff for Retail Delivery Service, and an order allowing Oncor to recover the actual costs as an operations and maintenance expense.

Oncor is proposing to increase Charge No. DD24 from the current amount of $35.65 to $36.15.

TEAM/ARM said, "The IAG process is a system service, the cost of which should be recovered in base rates, rather than though a discretionary service charge to the gaining REP."

"This charge is poor policy because it: (a) unduly discriminates against the gaining REP by burdening them with the charge absent cost causation; and (b) is not a customer-specific charge that is recoverable from the customer. The whole point of the IAG process is to return the customer to the losing REP, which leaves the gaining REP with no one to collect the IAG charge from," TEAM/ARM said

"Charging the gaining REP for an IAG transaction is discriminatory because once the transaction is unwound, the gaining REP is no longer serving the customer that was affected by the IAG. In other words, the REP who must pay the charge cannot pass it through to the customer who experienced the unauthorized change in REP that necessitated the use of the IAG process or to any third party person or entity who may have provided the incorrect information," TEAM/ARM said

"Further, none of the other ERCOT TDUs (i.e., AEP Texas Inc., CenterPoint Energy Houston Electric, LLC, and Texas-New Mexico Power Company) assess a discretionary service charge for processing IAGs," TEAM/ARM said

"A service offered by a TDSP must be classified as either a discretionary service or a system service. A system service is defined to include TDU standard metering and billing services. TDU billing system services include 'administrative activities necessary to maintain REP billing accounts and records' and 'error investigation and resolution.' According to Oncor’s discovery responses, the IAG process provided in the RMG [ERCOT’s Retail Market Guide] checks both of these boxes. Therefore, the work qualifies as a TDU standard metering and billing service," TEAM/ARM said

"In addition, 16 TAC § 25.342(f)(1)(B) states that the cost of a discretionary service should be borne only by the REP that is serving the customer who purchases the discretionary service. This requirement suggests that a discretionary service is initiated by a customer request or some other customer action that triggers the need for the service. Here, the customer did not actually purchase a service; there was an error. This is not analogous to charges appropriately categorized as discretionary services. For example, a customer’s request for temporary facilities during construction, or a customer’s clearance request to de-energize electrical facilities for work near the facilities, are appropriate uses of discretionary service charges. An IAG is not always initiated by a customer request or the customer of the subject premises’ action or inaction in a situation—it is a process that is required by Commission rules to remedy a situation whether a customer requests it or not. The cost to process an IAG is not customer-specific because the process used to unwind an IAG is not customer-specific. Accordingly, the processing of an IAG more closely resembles a system service," TEAM/ARM said

"Imposing Charge No. DD24 on the gaining REP falsely presumes that the gaining REP’s actions are always the root cause of the IAG, and this presumption is echoed in the description of the charge included in Oncor’s tariff. This is simply not the case. The unintentional error in the transaction information that triggers the MarkeTrak IAG process can originate from a source other than a REP’s selection of an incorrect premise for a switch or move-in transaction for the reasons discussed earlier in this testimony," TEAM/ARM said

Citing data responses from Oncor, TEAM/ARM said, "Oncor cannot demonstrate how often an IAG is or is not caused by incorrect information provided by an entity other than the gaining REP. Therefore, Oncor’s IAG charge is contrary to cost causation principles."

TEAM/ARM recommended that Oncor recover the actual costs proven to be associated with processing IAGs as an operations and maintenance (O&M) expense to be included in the revenue requirement that will be used to set rates in the current rate case

Turning to another issue, TEAM/ARM recommended the denial of Oncor’s request to recover costs incurred to lease and operate mobile generation facilities under PURA § 39.918, "unless Oncor develops a plan that demonstrates how it will meet the statutory requirements and any corresponding Commission rule addressing these facilities."

Docket 53601