Category Archives: Transmission & Distribution

HB 1926: Support Fraser on the Senate Floor

 

HB 1926 by Kacal (Sp: Fraser) – Relating to the governance of certain municipal power agencies.

 

Proposal

  • HB 1926 requires all municipally-owned utilities, if building transmission outside of their traditional service territory, to seek a certificate of convenience & necessity (CCN) through the PUC and follow the same routing process as any other electric utility.
  • The bill also continues the Texas Municipal Power Agency (TMPA), a collective of municipally-owned utilities that includes Bryan, Denton, Garland and Greenville.

 

Discussion

  • AECT supports HB 1926, as the bill ensures a level playing field for all utilities building transmission in Texas.

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Click here to download a PDF of this issue paper.

 

CSSB 513 and CSHB 2187: Support Adopting Key Measures to Reduce Metal Theft

 

CSSB 513 by Taylor – Relating to the regulation of metal recycling entities; imposing an administrative penalty

CSHB 2187 by Smith – Relating to the regulation of metal recycling entities; imposing an administrative penalty; amending provisions subject to a criminal penalty

 

Key Proposals

  • Under CSSB 513/CSHB 2187, payment for regulated metals would be made by check, money order, direct deposit, or by cash when using an approved “cash transaction card.”
  • The “cash transaction card” would initially be mailed to the seller, establishing the seller’s address and other identifying information. Once the seller has received the “cash transaction card,” they may receive cash fo r sales of regulated metals.
  • CSSB 513/CSHB 2187 adds lead batteries and power inverters to the list of regulated metals.
  • The bill also adds two Sheriffs to the metal recycling advisory committee.

 

AECT Strongly Supports Efforts to Curb Metal Theft

  • Metal theft has become a major problem for many Texas communities.
  • The cost of repairing and replacing the stolen property is far greater than just the nominal value of the metal itself.
  • If a metal theft causes a power outage, the loss is multiplied by the lost business of all of the affected customers.
  • Injuries or fatalities caused by the unsafe conditions created by the theft add additional costs from medical treatment and civil lawsuits. Moreover, the unsafe conditions create a public safety hazard and dangerous working conditions for utility employees due to the extreme hazard of ungrounded high voltage equipment.
  • Cash transactions related to metal theft may also create a loss of income for the state because unregistered businesses are not documenting the transactions.

Click here to download a PDF of this issue paper

HB 1101: Support Ensuring Remaining System Benefit Fund Balance is Disbursed to Eligible Customers

 

HB 1101 by Sylvester Turner – Relating to extending the period over which the balance of the system benefit fund is to be eliminated

AECT Position: Support

 

Proposal

HB 1101 would allow the PUC to use the remaining balance of the System Benefit Fund (SBF) for its intended purpose by extending funding for a low-income discount for eligible customers in the competitive electric market through August 2017.

  • In September 2015 and May through August 2016, low-income customers would receive up to a 33 percent discount off their electric bills.
  • For the months of September 2016 and May through August 2017, the low-income discount rate will be set by the PUC at a level to fully use the remaining SBF balance.

 

AECT Supports the Use of the SBF Balance for a Low-Income Discount

AECT has long supported the use of the SBF for its primary purpose: to provide assistance to low-income electric customers

  • The SBF initially provided funding for a year-round rate discount of 10-20 percent, as well as for energy efficiency and customer education. The discount was suspended in 2005. Beginning 2007, the discount was reinstated for the months of May-September only at a rate set by the PUC.
  • The fees that funded the SBF were typically greater than the annual expenditures on the low-income discount. The 83rd Legislature decided to discontinue collection of the SBF fees, and sunset the low-income discount using the SBF’s accumulated balance to fund it through August 2016.
  • Below-average summer temperatures and lower-than-expected enrollments resulted in significantly lower SBF expenditures and concern that the low-income discount may not fully utilize the remaining SBF funds before sunsetting in August 2016.
  • The SBF balance is currently projected to be about $247 million when the program expires in September 2016. HB 1101 would intend to use the entirety of the fund, concluding the SBF program.

Click here to download a PDF of this issue paper

Legislation to Enact Recommendations Included in the PUC’s “2015 Scope of Competition in Electric Markets in Texas”

 

SB 734 by Fraser – Relating to the setting of annual interest rates for utility deposits by the PUC (PUC Recommendation H.3)
AECT Position: Support

  •  SB 734 allows the PUC to set the rate of interest for the next calendar year on electric company deposits “on or before each December 1,” rather than specifically on December 1 or the next regular workday following December 1. SB 734 simply provides the PUC additional flexibility for when it sets annual interest rates for utility deposits.

SB 774 by Fraser – Relating to a study on periodic rate adjustment by electric utilities (PUC Recommendation H.2)
AECT Position: Support as Amended

  • As amended, SB 774 will reauthorize the 2011 Periodic Rate Adjustment (PRA) bill. The 2011 PRA bill is set to expire in January 2017. Under SB 774, the bill will expire on September 1, 2019. This ensures that the PRA mechanism will be available for use through the next two legislative sessions.
  • The bill revises the scope of a PUC report included in the 2011 PRA bill to more broadly study formula rate plans and other modernized ratemaking mechanisms. The report must be sent to the legislature on January 31, 2017.

SB 775 by Fraser- Relating to the repeal of the goal for natural gas use (PUC Recommendation E.1)
AECT Position: Support

  • Sec. 39.9044 of the Utilities Code requires at least 50 percent of non-renewable electric generation in Texas be fueled by natural gas. SB 775 removes this section.
  • The vast majority of non-renewable electric generation installed since Sec. 39.9044 was adopted in 1999 has been natural gas-fired, rendering Sec. 39.9044 unnecessary.

SB 776 by Fraser – Relating to the authority of the PUC to approve certain transmission facilities constructed by a municipally owned utility (PUC Recommendation B.3)
AECT Position: Amend

  • SB 776 requires a municipally-owned utility to obtain a certificate of convenience and necessity (CCN) before building transmission facilities outside its certificated service area.
  • SB 776 includes a standard for municipally-owned utilities that’s different from the standard for investor-owned utilities. AECT supports amending the legislation to ensure a level playing field for all utilities.

SB 777 by Fraser – Relating to the authority of the Public Utility Commission of Texas to restrict participation in the retail electric market for significant violations (PUC Recommendation A)
AECT Position: Support as Amended

  • AECT supports the concept of SB 777. The bill should be amended to clarify that the ban is on the individual who the PUC has sought action against. As filed, the text could be interpreted as creating an administrative burden on (and risk to) well-behaved REPs to ensure that a blacklisted individual is not in their employ. The filed language also implicitly allows employment of the blacklisted individual by other customer-impacting market participants.

SB 931 by Fraser – Relating to the goal for renewable energy and competitive renewable energy zones (PUC Recommendations B.1 and E.2)
AECT Position: Neutral

  • The Competitive Renewable Energy Zone (CREZ) project was completed in 2013. SB 931 would clarify that future proposed transmission projects, even those located in the CREZ, must meet the same adequacy and need criteria as non-CREZ transmission lines.
  • Texas’ renewable portfolio standard (RPS) set a mandate that at least 5,880 MW of renewable generation should be installed in Texas by 2025. The state currently has over 12,000 MW of renewable generation online, making the mandate unnecessary. SB 931 removes the goal from statute; it retains the renewable energy credit (REC) trading program.

SB 932 by Fraser – Relating to the authority of the PUC to retain assistance for federal proceedings affecting certain electric utilities and consumers (PUC Recommendation C)
AECT Position: Support

  • SB 932 would allow the PUC to hire assistance for federal proceedings in areas located outside the ERCOT grid. These utilities are regulated by FERC, in addition to the PUC.
  • It is appropriate for the PUC to have resources available to participate in these cases, which often require specialized knowledge of FERC.

 SB 933 by Fraser – Relating to Relating to the authority of the PUC to review transmission interconnections that enable imports or exports from the ERCOT power grid (PUC Recommendation B.2)
AECT Position: No Position 

  • SB 933 would require any interconnection between the ERCOT transmission grid and a neighboring grid to be approved by the PUC and found in the public interest.
  • This ensures the PUC can formally assess the impact of an interconnection between power markets.

Click here to download a PDF of this issue paper.

SB 774 by Fraser: Reauthorization of the Periodic Rate Adjustment Mechanism

AECT Position: Support as Amended

Proposal

  • SB 774 will reauthorize the 2011 Periodic Rate Adjustment (PRA) bill, continuing the PUC’s current authority to create a fair, appropriate and timely process for recovery of distribution investments in ERCOT.
  • The 2011 PRA bill is set to expire in January 2017. Under SB 774, the bill will expire on September 1, 2019. This ensures that the PRA mechanism will be available for use through the next two legislative sessions.
  • As amended, SB 774 revises the scope of a PUC report included in the 2011 PRA bill to more broadly study formula rate plans and other modernized ratemaking mechanisms. The report must be sent to the legislature on January 15, 2017.

AECT Discussion

  • The existing PRA statute, which included input from all stakeholders and would remain substantively unchanged by the 2015 PRA bill, received overwhelming support. The bill was passed in the 2011 legislative session by a vote of 143 – 5 in the House of Representatives and 30-1 in the Senate.
  • The concept behind the PRA mechanism is not new. It applies a conceptually similar rate adjustment mechanism to distribution investment that has successfully worked for electric transmission for more than a decade.
  • SB 774 encourages investments that will modernize existing distribution grids in ERCOT, make them more resilient and better able to support new products and technologies.

Questions & Answers on SB 774

Has the PRA been used?
After the statute became effective in 2011, stakeholders fully participated in two projects at the PUC to further develop a rule and administrative processes to implement the statute. The first PRA proceeding was initiated in 2014, and additional PRA proceedings are expected in 2015.

Why was the PRA set to sunset in 2017?
The purpose of placing a 2017 sunset date on the PRA statute was for the PUC to gain material experience with the mechanism, advise the legislature on that experience and allow the legislature to determine what next steps are appropriate. Extending the PRA this session will allow the PUC to gain the required experience. This extension should occur now, as the PRA would otherwise expire in January 2017.

Does the PRA reduce regulatory oversight or stakeholder processes?
No. The PRA balances the benefits of timely recovery of these typically non-controversial utility investments with the need to review the appropriateness of these investments It also expressly leaves unchanged the rights of cities with original jurisdiction to examine proposed rate adjustments.

Click here to download a PDF of this issue paper.

Latest information for Consumers Opting Out of the Advanced Metering Program

 

The PUC’s rule allowing customers to opt-out of advanced metering service was adopted on September 1, 2013. The affected transmission and distribution utilities (TDUs) have filed compliance tariffs outlining proposed costs for the Non-Standard Metering Service (NSMS). The TDUs include: AEP Texas Central Company, AEP Texas North Company, CenterPoint Energy, Oncor and Texas-New Mexico Power Co.

RECENT ACTIVITIES

Notice to the Retail Electric Providers (REPs): REPs were provided 45 days’ notice of the approved costs and when TDUs will begin offering NSMS. At that point, customers who did not receive an advanced meter during deployment and asked to be placed on a “do not install” list received an Acknowledgement Form that provides information regarding NSMS and associated fees.

Sixty day decision window for those with non-standard meters: Customers who did not already have an advanced meter had 60 days to decide if they would like to opt-out; if the signed Acknowledgement Form and payment was not received by the TDU in that timeframe, an advanced meter was installed.

Timeline for future replacements: Customers who choose to replace their advanced meter in the future will have to return a signed Acknowledgement Form and payment of the initial fee. They will then have their meter replaced within 30 days.

UPDATE

As of February 9, 2015, out of approximately 6 million customers served by AECT member companies in ERCOT with advanced meters, only 439, or 0.007%, have elected to opt-out of the AMS program.

For more information, including charges for opting out, click here.