Tuesday, January 22, 2019

LP&L Cites Competition as Reason for Migration to ERCOT

By Tom Kleckner

Lubbock Power & Light filed testimony with the Public Utility Commission of Texas in support of its proposal to move about 430 MW of load from SPP into ERCOT.

Lubbock Power & Light LP&L ERCOT PUCT

LP&L power plant | LP&L

The move would make LP&L the first to join ERCOT’s deregulated competitive market since it was created in 2002.

The PUC has scheduled a hearing on LP&L’s migration Jan. 17-18 in Austin.

Meeting Tuesday’s deadline, LP&L filed testimony from former FERC and PUC Chair Pat Wood III, Lubbock Mayor Dan Pope, LP&L Director of Electric Utilities David McCalla and three industry experts.

Wood, who was integral in helping create the ERCOT market and now runs his own energy infrastructure development business, said he felt compelled to speak out on the ISO’s benefits for LP&L’s customers. He said he was concerned “that the focus on selected details of this proposal is obscuring its significance.”

“We have in this proceeding the state’s third largest municipal utility requesting to move three-fourths of its load to ERCOT, and further, evidencing its intent to open its retail franchise to competition — something no other municipal utility has yet elected to do,” Wood said.

Pope said he is frequently asked by Lubbock citizens “to bring back competition for retail electric service.”

“Personally, I believe in the principles of competition, and there is no question in my mind that the citizens of Lubbock desire to be given the right to freely shop the Texas retail electric market for a provider,” Pope said.

The Lubbock City Council is expected to vote Jan. 11 on whether to conduct a study analyzing the effect of opening the retail market.

In his testimony, McCalla said giving customers a choice of retail providers was not a part of LP&L’s original proposal.

Lubbock Power & Light LP&L ERCOT PUCT

| LP&L

“Customer choice is about more than simply economics,” he said. “It is about allowing customers to decide what percentage of renewable energy they purchase, to choose whether they want long- or short-term service, and to select from many other features and options that are available from a multitude of different retail electric providers.”

In September, LP&L filed its intention to integrate 430 MW of load with ERCOT by June 2021. That load is currently served through a wholesale contract with SPP member Southwestern Public Service; the contract expires May 31, 2021. ERCOT, SPP and LP&L have all filed studies in the case (Docket 47576), which began in 2015 when the municipality announced it intended to move 430 MW of its approximately 600 MW of load into ERCOT. LP&L is hoping for a decision before March, which will enable it to maintain its plan to integrate with ERCOT by June 2021, after extending a power purchase agreement with SPS. (See “LP&L Study: Production Costs Increase,” ERCOT BoD Briefs: June 13, 2017.)