Texas TDU In ERCOT Withdraws Proposed Tariff Which Would Have Banned Behind-the-Meter Generation By Third Parties

As part of an unopposed rate case settlement at the Texas PUC, Texas-New Mexico Power Company is withdrawing all of its tariff provisions which would have imposed new restrictions on behind-the-meter (BTM) generation.

TNMP in its initial rate filing had proposed to add the following provisions to its tariff:

• "Any behind-the-meter or on-site generation that provides, transmits, or otherwise delivers electric energy to a retail customer other than the owner or lessee of the generation facility shall be considered retail service and is subject to TNMP’s exclusive service rights within its certificated area"

• "No third-party transmission provider, power marketer, or generation may interconnect facilities or deliver electric energy directly to any retail customer within TNMP’s certificated area without TNMP’s consent"

• "Any arrangement that provides electric power across property lines or between separate premises within TNMP’s certificated territory shall be deemed a violation of TNMP’s CCN"

Industrial customers, data centers, and competitive power providers had objected to these proposed BTM tariff provisions, arguing that the proposals would prohibit many of the BTM structures and ownership designs in use by customers today, including those implicitly permitted by statute and/or PUC rule or order

As an example, the Texas Industrial Energy Consumers and Texas Competitive Power Advocates said in testimony that the language proposed by TNMP would "likely" prohibit BTM generation owned by another third-party

The Joint Data Center Group said in testimony that the "sweeping" BTM tariff proposed by TNMP would, "limit the market structures and creativity to build distributed generation (BTM solar, batteries, back-up NG gen, etc.) and handicap the industry[.]" The proposed BTM tariff, the Joint Data Center Group had said, would eliminate an "innumerable number of vehicles to conduct business," and would invalidate current constructs

In RFI responses, TNMP had indicated that the intent of the BTM tariff language was not to broadly prohibit a number of current commercial arrangements, but opponents expressed concern that the tariff language was blunter than the vision expressed by TNMP in seeking the new BTM tariff

In rebuttal testimony, TNMP had said, "TNMP's proposed BTM tariff language is designed to avoid confusion by ensuring that grid-connected BTM retail customers receiving retail delivery service within TNMP's service territory remain under the tariff of the utility that is actually responsible for retail delivery service."

In rebuttal testimony, TNMP took issue with an "ESI ID-only scenario" in which a load in a BTM arrangement is electrically connected to the physical delivery infrastructure of a TSP that does not have the right to serve retail customers in the location of the load, yet seeks the certificated TDSP for that territory to create an ESI ID and treat the load as a retail customer even though the TDSP does not have facilities for actually delivering retail service at the load location. "This effectively attempts to obtain the benefits of retail market participation and settlement without a corresponding physical service relationship, which improperly shifts market and compliance responsibilities onto a utility that is not legally authorized to serve the load," TNMP had said in rebuttal testimony

Under the settlement, TNMP is withdrawing the proposed BTM tariff provisions, "from consideration in this proceeding." Such withdrawal does not prevent consideration in another proceeding to the extent TNMP wishes to again propose the BTM provisions

The stipulation, which is said to be unopposed, was signed by TNMP, PUCT Staff, the Office of Public Utility Counsel, various cities with original jurisdiction, Texas Competitive Power Advocates, TIEC, and various data center intervenors, among other parties. The Texas Energy Association for Marketers is not opposed to the settlement.

In addition to setting new base delivery rates, the settlement would establish three new riders applicable to retail electric providers: a Hurricane Cost Recovery Factor (Rider HCRF), a resumption of the rate case expense rider (RCE), and an Interim Surcharge rider (Rider IS)

Rider IS would essentially grant TNMP the revenues it would receive under interim rates without implementing interim rates at this time prior to a final order

Rider IS would be set to recover the difference in revenue between the new delivery rates established upon PUC approval of the settlement, and those delivery rates in effect on May 22, 2026, for the period of time between May 22 and the final order adopting new rates

As such, the rates under Rider IS would not be known until the date of PUC disposition of the settlement (the settlement sets the Rider IS rates as zero as a placeholder)

New delivery rates and the other new rider charges proposed under the settlement are below for select customer classes:

 TNMP Distribution Rates Current Stipulation Residential Customer Charge per month $1.13 $1.70 Meter Charge per month $6.72 $5.86 Distribution System Charge per kWh $0.025670 $0.046020 Secondary <= 5 kW Customer Charge per month $0.74 $1.75 Meter Charge per month $7.62 $6.40 Distribution System Charge per kWh $0.042580 $0.002980 Rider HCRF New Residential $0.000882 / kWh Secondary <= 5 KW $0.000591 / kWh Secondary > 5 KW $0.191909 / Actual kW Primary $0.153443 / Actual kW Primary Substation $0.002623 / Actual kW Transmission $0.000026 / Actual kW Lighting $0.000913 / kWh Rider RCE New Residential $0.000180 / kWh Secondary <= 5 KW $0.000114 / kWh Secondary > 5 KW $0.034147 / Actual kW Primary $0.025194 / Actual kW Primary Substation $0.023369 / Actual kW Transmission $0.006808 / Actual kW Lighting $0.000439 / kWh 

Under the stipulation, the new delivery rates, if approved, would be effective for electricity bills rendered on and after 45 days from the date of a PUC order approving the rates.

The settlement would also update various Discretionary Service Charges, with decreases for certain services for standard meters, and increases for other services, including for new standard meters, and for standard meters at premium locations. Select proposed changes are noted below (some DSCs which are not being changed are also listed due to interest in there being no change):

TNMP Discretionary Service Charges

 (charges are for existing standard meter, 
non-premium location unless otherwise noted)

                        Current     Proposed

Move-In 
  Existing Standard Meter  1.50      1.00

Move-In 
   New Standard Meter     36.00     54.00


Disconnection For Non-Payment (DNP)
Disconnection at Meter     1.50      1.50

Disconnection at 
  Premium Location       104.00    163.00


Reconnection After DNP
Reconnection at Meter      1.50      1.50

Reconnection at Premium Location
  Standard Reconnect     101.00    145.00
  Same Day Reconnect     236.00    353.00
  Weekend                236.00    353.00
  Holiday                340.00    515.00


Meter Reading for the Purpose of 
       a Self-Selected Switch
                           0.40      0 10

Docket 58964