Thursday, February 21, 2019

Texas Public Utility Commission Briefs: Feb. 7, 2019

By Tom Kleckner

Regulators Grant Preliminary Approval to Sharyland-LP&L Projects

The Texas Public Utility Commission last week issued preliminary orders approving certificates of convenience and necessity (CCNs) related to integrating a portion of Lubbock Power & Light’s SPP load into the ERCOT system.

The Texas Public Utility Commission meets in open session.

The commission consented to a request by the city of Lubbock and Sharyland Utilities to build a single-circuit 345-kV transmission line and associated facilities, which include an expanded LP&L switchyard. Sharyland will take care of the construction, while LP&L will own and operate the line upon its completion (Docket 48668).

The project has a total estimated cost of $65.3 million to $90.4 million. The 18 proposed routes range between 30 and 50 miles.

During its Feb. 7 open meeting, the commission also conditionally approved LP&L and Sharyland’s joint application to build a 345-kV transmission line and a 115-kV line that will eventually interconnect (Docket 48909).

Sharyland will own the 115-kV line but will share ownership of part of the 345-kV line with LP&L. The former is expected to cost $49.7 million to $61.4 million and has 14 potential routes ranging between 14 and 26 miles. The latter project has an estimated cost of $88.4 million to $103.9 million and 22 possible routes ranging in length from 42 to 53 miles.

In a memo, PUC Chair DeAnn Walker said it was inappropriate for two separate transmission lines to be filed in a single CCN application because “it raises concerns of efficient administrative processing of the cases.”

But Walker said she was willing to make an exception in LP&L’s case because severance might be too difficult at this point and the project is time-sensitive. She recommended the State Office of Administrative Hearings issue separate proposals for decisions for each line and said that future CCN applications should be split apart if more than one transmission line is included.

Sharyland had proposed a $247.5 million, 345-kV project in the Texas Panhandle that overlapped with the facilities needed to integrate LP&L into ERCOT, but predated LP&L’s move. ERCOT was unable to find the project as meeting economic needs.

The PUC must issue a final decision in both dockets by Sept. 20.

LP&L announced in 2015 that it intended to move about 70% of its load, currently provided through two long-term contracts with Southwestern Public Service (one of the contracts expires in 2021). The PUC approved the migration in March 2018. (See “LP&L Welcomed into ERCOT,” Texas PUC OKs Sempra-Oncor Deal, LP&L Transfer.)

PUC Puts off Final Decision on Rayburn Country

The commission debated but put off two decisions related to Rayburn Country Electric Cooperative’s proposal to move 96 MW, or about 12% of its load, from SPP into ERCOT.

At issue is Rayburn’s request that the load being transferred to the Texas grid be included in the co-op’s existing non-opt-in entity load zone (an area without retail choice), and that it be granted a good-cause exception from a four-year notice requirement for ERCOT Board of Directors approval. The commission also expressed concern that congestion revenue rights holders in the area might not have been properly notified (Docket 48400).

Following the open meeting, the PUC filed a briefing order requesting briefs from the settlement’s signatories by Feb. 26. The commission expects to file a completed order at its March 13 meeting.

Rayburn signaled its intentions to transfer the load in 2016, and late last year it reached an unopposed settlement with commission staff, Oncor and the Texas Industrial Energy Consumers that approved the transfer of the load and associated facilities into ERCOT. The agreement denied the sale of transmission facilities and associated CCN rights to Lone Star Transmission.

ERCOT and SPP did not join in the agreement, but they did not oppose it either.

ERCOT General Counsel Chad Seely (center) explains the grid operator’s position while discussing Rayburn Country Electric Cooperative.

Separately, the commission held off on an order approving Rayburn’s sale of a 30-mile, 138-kV line in its territory to NextEra Energy Transmission Southwest (NETS). Southwestern Electric Power Co. owns the substations at both ends of the line, and NETS plans to transfer functional control of the line to SPP when the transaction is completed (Docket 48071).

NETS has applied to become a transmission-owning member of SPP.

“I see a lot of inefficiencies,” Walker said.

Commissioner Arthur D’Andrea supports Walker’s decision, but Commissioner Shelly Botkin said she had not yet formed an opinion on the “broader issues.”

The PUC’s final order is clouded by its 2017 ruling under different commissioners that SPS does not possess an exclusive right to construct and operate transmission facilities, including new regionally funded transmission facilities, within its service area. Former Commissioners Ken Anderson and Brandy Marty Marquez had also determined the commission had the authority to grant a certificate to an entity that will provide only transmission service outside of ERCOT (Docket 46901).

“I don’t believe we have the authority to grant this,” Walker said. “I read everything in 46901. I would not have come down that way.”

“We might need time to think creatively about the best way to do this and change course,” D’Andrea said.

SPS appealed the decision in November 2017 to the 459th District Court (D-1-GN-18-000208).

Staff to Study ERS Load Resources

In other actions, the PUC:

  • Directed staff to open a project on emergency response service (ERS) and the potential for daily offers into the market. Walker noted some load resources are currently excluded from offering ERS because of unavailability for particular contract periods.
  • Delegated authority to Executive Director John Paul Urban to sign joint comments with the Texas Commission on Environmental Quality and the Railroad Commission of Texas in response to EPA’s proposal to eliminate the requirement that new coal-fired generation incorporate carbon-capture technology (EPA-HQ-OAR-2013-0495). The three agencies have joined together before to provide comments on similar legislation. (See EPA Eases Rules for New Coal Generation.)
  • Approved CCNs for Electric Transmission Texas’ 345-kV project in South Texas. The commission found the $44.8 million cost for 5 miles of 345-kV double-circuit line and a substation expansion to be reasonable. The area has incurred overloading since the 524-MW Frontera combined cycle generation facility began exporting its capacity to Mexico in 2016 (Docket 47973).

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