Thursday, February 21, 2019

Texas PUC Briefs: Jan. 17, 2019

By Tom Kleckner

Commission Welcomes Legislative Input on Energy Storage

Texas regulators last week agreed to let state lawmakers help them determine who will own energy storage devices in the ERCOT market.

DeAnn Walker, chair of the Texas Public Utility Commission, said during the commission’s Jan. 17 open meeting that she prefers to hear from legislators before developing rules, reiterating a position expressed in a recent report to the 86th Texas Legislature. (See “PUC Asks Legislators for Clarity on Battery Storage Ownership,” ERCOT Briefs: Week of Jan. 7, 2019.)


Texas PUC’s Jan. 17 open meeting

“If they don’t, we can circle back in June … because we or the legislature need to address this,” Walker said. “I’d like to give them the opportunity, because we asked them to weigh in.”

The PUC has already opened a rulemaking on energy storage ownership (Project 48023) after last year rejecting AEP Texas’ request to connect two West Texas battery storage facilities to the ERCOT grid. Transmission and distribution providers have squared off against generators over the devices’ ownership.


PUC Chair DeAnn Walker

Walker said in the meantime she wants to start a discussion on electric vehicles and asked staff to open a project on the subject. She has suggested the PUC work with the Texas Commission on Environmental Quality in planning how the distribution system will support the charging stations’ infrastructure.

“There’s going to have to be a charging station in Marfa, Texas,” Walker said, referring to the artistic community of about 2,000 people in the West Texas desert. “No one’s going to be able to get from El Paso to [Austin] without one.”

Walker hopes to have recommendations ready for the next legislative session in 2021.

Prelim Order Sets Issues in Oncor-Sharyland-Sempra Deal

The PUC issued a preliminary order identifying issues to be addressed in proposed transactions involving Sempra Energy, its Oncor subsidiary, Sharyland Utilities and Sharyland Distribution & Transmission Services — but not before first chiding the parties for clouding the issue of who will own what and where (Docket 48929).

The companies in October announced deals worth $1.37 billion, with Sempra buying a 50% stake in Sharyland D&T and Oncor acquiring transmission owner InfraREIT. (See Sempra, Oncor Deals Target Texas Transmission.)

“It would be helpful if you could file a table” listing the assets, Walker said. “Not a chart, because your charts make no sense.”


Sharyland attorney Lino Mendiola explains the Oncor-Sharyland-Sempra transactions.

“We could have done a better job in our application setting forth exactly what we’re asking for,” said an apologetic Lino Mendiola, legal counsel for the Sharyland companies. “It’s a complicated transaction. We recognize that.”

Of specific concern to Walker is who will own the transmission assets necessary to integrate Lubbock Power & Light into ERCOT. The PUC last year approved Lubbock’s transfer of 70% of its load from SPP into ERCOT. Coincidentally, it came during the same meeting that Sempra’s acquisition of Oncor was approved. (See Texas PUC OKs Sempra-Oncor Deal, LP&L Transfer.)

The transactions 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.

Mendiola said the geographic split between Oncor and Sharyland complicates the situation, but that the parties had worked out an 86-14 split of assets. Most of the transmission infrastructure would reside in the north with Oncor.

“Our group wants to ensure there are not things in the transmission rates that shouldn’t be in the transmission rates,” said legal counsel Phillip Oldham, representing Texas Industrial Energy Consumers, the lead intervenor in the proceeding.

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

ERCOT Governance Changes Approved

The PUC approved by consent amendments to ERCOT’s Articles of Incorporation and bylaws (Docket No. 48677). The changes were approved by more than the necessary two-thirds of the grid operator’s corporate membership in September.

The commission also removed from future agendas a proceeding involving AEP Texas and Rio Grande Electric Cooperative (Docket 47186). The two have settled their dispute over which utility will serve certain customers in a Uvalde subdivision. (See “Rio Grande Electric, AEP Texas Reach Agreement,” PUCT Urges 2nd Look at Freeport Project Costs.)

Leave a Comment