Monday, October 23, 2017

Texas PUC Delays Assignment of LP&L Study Costs

By Tom Kleckner

The Public Utility Commission of Texas last week granted Lubbock Power & Light’s request to delay a decision on who will pay for studies related to the municipality’s planned move to the ERCOT grid.

Texas PUC Chair Donna Nelson | © RTO Insider

In a letter to the commission, LP&L asked that the assignment of study costs be held until ERCOT and SPP can finish separate cost-benefit studies on the potential move (Project 45633). The municipality said the two grid operators have not agreed on a common assumption for gas prices, “a key variable,” and said that the studies will indicate “the extent to which the LP&L integration into ERCOT would benefit customers in both systems.”

“Deciding who should pay the cost of the studies now, in the absence of that information, would mean assigning the cost of the studies to LP&L before it is known whether consumers in SPP and ERCOT would benefit from the transition,” LP&L said.

“I’m OK with waiting,” said Chair Donna Nelson during the PUC’s Thursday open meeting, echoing the position of the other two commissioners.

LP&L announced in September 2015 it planned to disconnect 430 MW of its load from SPP and join ERCOT in June 2019. An ERCOT analysis completed last June indicated it will cost $364 million and take 141 miles of new 345-kV rights of way to incorporate LP&L into the Texas grid. Both ERCOT and SPP are currently conducting separate studies on their systems with and without LP&L’s load. (See Texas PUC OKs ERCOT, SPP Studies on Lubbock Move.)

The utility, which plans to conduct its own study, said it “continues to expect that, on a net basis, the system transition that LP&L seeks will present quantifiable benefits to consumers in both the SPP and ERCOT systems.”

In a separate letter to the PUC laying out their respective study scopes, ERCOT and SPP estimated the combined analyses would cost between $225,000 and $255,000. The grid operators said they have assigned internal project codes to track the hours incurred for the studies and promised a final accounting to the commission.

Commissioner Ken Anderson noted SPP planned to perform its production-cost analysis with and without forced generation outages, but ERCOT would do so without taking the outages into account. Asked what the likely variance would be, ERCOT Senior Director of System Planning Warren Lasher said he didn’t think it would be a “game-changer.”

“You will be able to look at the two results and be able to see the difference, but often, it’s not going to change your decision,” Lasher said. “ERCOT doesn’t do this because it is complicated to do. You need to have very accurate data regarding outage rates, which is something we’ve had significant difficulty getting from market participants.”

Lasher said the difference in outage-rate data may also be “a function of the different market designs we have in the SPP region and the ERCOT region.”

The grid operators’ studies are expected to be completed by midyear.

Hand-Held Devices Allowed to Enroll Retail Customers

The commissioners adopted a change to the PUC’s administrative rules that will allow retail electric providers (REPs) to use laptops, tablets, smart phones and other hand-held devices to enroll customers (Project 45625).

The rulemaking came with a warning, however. “I’m going to be watching,” Nelson said.

The PUC chair added language that requires the REPs to “accurately and truthfully answer any questions” when giving customers an opportunity to review the enrollment documents.

“To the extent we get complaints about this, it’s not going to be something we look on favorably,” she said. “We want to make sure the customers get what they need.”

SPS Details Winter Storm Restoration Effort

Southwestern Public Service briefed the PUC on its recovery efforts following January’s winter storm, which left 58,000 of its customers in the Texas Panhandle without service and damaged 7,500 poles and other structures.

ercot texas puc lpl study costs

Transmission lines after the January 2017 Ice Storm | SPS

Evan Evans, SPS’ regional vice president of rates and regulatory affairs, said the company was prepared for the storm and its forecast of one-tenth of an inch of ice. The storm began with rain Jan. 13, transitioning into freezing rain and bitter cold through Jan. 15 that resulted in up to 3 inches of ice in some areas.

“It was a major ice storm … the worst residents said they had seen in over 50 years,” Evans said.

SPS used almost 1,100 employees, contractors and mutual aid partners to restore service to all its customers by Jan. 23. Evans said cellphone communication problems and waiting on electricians to repair damage on the customers’ lines and meters slowed the restoration effort.

Evans said the company upgraded its infrastructure standards in 2014 and will look for ways to improve its communications and further harden its facilities. He pointed out some neighboring utility customers are still waiting for service that may still be a week or two away.

ercot texas puc lpl study costs

Working to restore service after the January 2017 Ice Storm | SPS

“Your team did a tremendous amount of work in very dangerous conditions,” Commissioner Brandy Marty Marquez said.

“I’m amazed that you have people that have been out [of power] for seven days asking us if we were OK,” Evans said. “They see us working around the clock.”

Fines Approved, Cybersecurity Program OK’d

The commission’s consent agenda included approval of fines against Luminant Energy and Oncor Electric Delivery, once sister companies under bankrupt Energy Future Holdings.

Luminant agreed to an administrative penalty of $170,000 for not updating its ancillary service schedules 11 times in 2015 after ERCOT issued instructions to do so (Docket 46724). Oncor agreed to a $288,500 penalty for falling short of benchmarks on the length and frequency of outages for 2015 (Docket 46733).

The PUC also gave Executive Director Brian Lloyd the authority to negotiate and implement a contract to develop “a comprehensive cybersecurity and physical security outreach program” for Texas utilities, cooperatives and municipalities (Docket 46773).

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