Tuesday, March 19, 2019

Texas PUC Briefs: Week of Feb. 25, 2019

PUC, ERCOT Set Real-time Co-optimization Workshops

Saying they want to move forward quickly with real-time co-optimization (RTC), Texas regulators approved a list of issues to be discussed during a summer workshop on the potential market change (Project 48540).

ERCOT staff have said it will take four to five years and about $40 million to implement RTC, under which energy and ancillary services are procured simultaneously every five minutes in the real-time market to find the most cost-effective solutions for both.

“I want real-time co-optimization moving forward, the sooner the better,” Public Utility Commission Chair DeAnn Walker said during the commission’s open meeting Thursday. “We are hearing in my office that the more ERCOT’s operations staff learns about real-time co-optimization, the more excited they’re getting about the tools and benefits, as far as efficiencies not only in the market, but system efficiencies as well.”

PUC commissioners (right) discuss real-time co-optimization with their staff.

The commission is asking stakeholders to file written comments on what value to set as the systemwide offer cap, what value to set for lost load and which ancillary services should be used in developing ancillary service demand curves, among other issues.

The PUC is scheduling the workshop in early June.

PUC Amends Preliminary Sempra-Sharyland Order

The commission adopted an amended preliminary order on proposed transactions involving Sempra Energy, its Oncor subsidiary, Sharyland Utilities and Sharyland Distribution & Transmission Services (Docket 48929).

The order sets aside the prudence of investments in any assets for future rate cases and clears up inconsistencies involving allocation factors.

The applicants are seeking the PUC’s approval for the $1.37 billion worth of transactions, which were announced in October. The deals would result in Sharyland T&D becoming an indirect, wholly owned subsidiary of Oncor, owning transmission and distribution lines in Central, North and West Texas. Sharyland Utilities would remain in South Texas, with Sempra owning an indirect 50% interest. (See Sempra, Oncor Deals Target Texas Transmission.)

A hearing on the merits is scheduled for April 10-12.

The PUC also:

  • approved $369.2 million in AEP Texas system restoration costs stemming from Hurricane Harvey in 2017 (Docket 48577); and
  • levied a $68,000 administrative penalty against Southwestern Public Service for exceeding its system average interruption duration index value (Docket 48826).

Legal counsel Lino Mendiola (left) for Sharyland, Katie Coleman for Texas Industrial Energy Consumers and Matt Henry for Oncor discuss amendments to the PUC’s preliminary order.

PUC, Gas Regulator Call for Coordination

The PUC and the Texas Railroad Commission (TRC) issued a joint statement last week describing their efforts to prepare for the summer months by guiding coordination among natural gas pipelines, gas-fueled power plants, and utilities that service the pipelines, plants and other customers. The TRC has jurisdiction over natural gas utilities.

The agencies urged companies to finalize their coordinated preparations for the summer, maintain clear lines of communication as the summer progresses and participate in ERCOT’s Gas-Electric Working Group. Natural gas fuels about half the generation in ERCOT.

“Texas has more than enough natural gas to fuel power generation,” TRC Chair Christi Craddick said. “We must make sure it can get where it’s needed, when it is needed, and that requires coordination between gas pipelines companies, electric generation facilities and electric utilities.”

PUC spokesman Andy Barlow said the agencies’ goal is to “guide maintenance scheduling to reduce situations in which pipeline maintenance might interrupt the flow of gas to Texas gas-fired plants and/or electricity flow to pipeline facilities.”

Texas Senate Confirms Commissioners

The Texas Senate on Wednesday unanimously confirmed all three commissioners, who were appointed by Gov. Greg Abbott between legislative sessions. The commissioners have been serving between eight and 17 months.

Commissioner Shelly Botkin’s term expires on Sept. 1, with Walker’s expiring in 2021 and Commissioner Arthur D’Andrea’s in 2023.

— Tom Kleckner

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