The Public Utility Commission of Texas has issued a series of orders since Friday, February 19, 2021 to address the potential of mass transitions of retail electric customers and retail billing issues resulting from the extreme weather event last week.
February 19th PUC Order, Delegation of Authority to the Executive Director and Granting Exception to the Commission’s Rules (Project Nos. 50500 and 51812)
On Friday, February 19, 2021, the Texas PUC held an emergency meeting and voted to approve an order related to the designation of Retail Electric Providers (“REPs”) to serve as Volunteer Retail Electric Provider (“VREP”) because of the potential of mass transitions of retail electric customers to Providers of Last Resort (“POLR”). The Order was not filed until this morning. See attached.
In sum, the Feb. 19th Order:
(1) approved TXU Energy Retail’s request to expand the number of ESI IDs it can serve as a VREP in a mass transition event;
(2) approved Reliant Energy Retail’s request to be designated as a VREP to serve residential and small commercial customers in a mass transition event;
(3) allowed REPs to file by today a request to be designated as a VREP to serve retail customers in a mass transition event; and
(4) delayed any mass transitions until Wednesday, Feb. 24, 2021.
The PUC Chairman said the intent of the Order is to provide time for additional VREPs to be in place and for any potential voluntary acquisitions of retail customers to complete prior to any POLR/VREP mass transition. See the updated list of VREPs for each customer segment attached to the Commission’s Feb. 19th Order.
Background and More Detail
The volunteer POLRs (VREPs) are required to charge a, "market-based, month-to-month product," rather than the higher POLR rate that is based on wholesale clearing prices (the real time settlement point prices, which can be up to $9.00 per kilowatt hour plus an adder).
On Thursday, TXU Energy Retail filed a request to increase the number of customers it is willing to serve as a Volunteer Retail Electric Provider (“VREP”). TXU Energy stated that it would accept as a VREP all of the customers who may be part of a mass transition from REPs as early as today. Also on Thursay, Reliant Energy Retail filed a request to be designated as a VREP for the 2021 through 2022 term for residential and small commercial customers.
POLR Mass Transition Timeline under ERCOT Protocols
ERCOT Protocols set forth the payment deadlines and process for a mass transition of retail customers due to a REP’s failure to make any payment due to ERCOT. Note that Feb. 21st PUC emergency order authorized ERCOT to use its discretion in enforcing these timelines and the PUC’s Feb. 19th Order described above requires that any Mass Transitions will not occur any earlier than Wednesday, Feb. 24th.
February 21, 2021 Orders
On Feb. 19th, the PUC adopted two orders: (1) authorizing ERCOT to use its sole discretion in enforcing the protocols regarding collateral calls and payments of settlement invoices; and (2) prohibiting all disconnection for non-payment in competitive retail areas until further notice and required REPs to offer deferred payment plans to residential and small commercial customers upon request. See attached Orders, as well as a PUC news release and explainer doc posted to the Commission’s website.
In the emergency Feb. 21st Open Meeting, the Commissioners noted that credit issues are impacting market participants in ERCOT, and that the orders are intended to give the PUC, Governor’s office and Legislature time to figure out solutions to the financial issues. The Commission also “strongly urged” REPs to not send any invoices to residential and small commercial customers and for Transmission and Distribution Utilities (“TDUs”) to not send any meter reading data based on estimated usage from last week “until we figure out how to financially manage the situation we are in.”
February 23, 2021 ERCOT Market Notices
This morning, Feburary 23, 2021, ERCOT issued two Market Notices regarding actions it is taking under the ERCOT Protocols to help resolve financial obligations between Market Participants and ERCOT.
Locke Lord’s Texas energy attorneys are closely following the developments at the Texas PUC in the aftermath of last week’s crippling storm. Please contact Carrie Collier-Brown or any of our energy attorneys to discuss the steps your organization should be taking in response to these developments and going forward
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