Southwest Power Pool’s old-wires upgrade charges ‘shock’ Texas regulators
Texas regulators on Thursday expressed “shock” that Southwest Power Pool has requested payment from utilities over 10 months for locally allocated costs of transmission upgrades approved over a period of more than eight years — amounts that could approach $100 million.
Donna Nelson, Public Utility Commission of Texas chairwoman and representative on SPP’s Regional State Committee, told commissioners Ken Anderson and Brandy Marty-Marquez that SPP recently informed its utility members of their “Directly Assigned Upgrade Costs” related to projects for long-term transmission service requests for new or changed designated generation resources.
On Friday, the SPP RSC will consider requests for waiver of these costs, all of which pertain to upgrades approved in 2007 and 2008 regarding the John W. Turk Coal Plant, a baseload 600-MW plant in Fulton, Arkansas, which is in the southwest quadrant of the state.
SPP staff has recommended approving waivers for $56.4 million in costs for American Electric Power, Arkansas Electric Cooperative, Northeast Texas Electric Cooperative and Oklahoma Municipal Power Authority.
But SPP has recommended denying waivers for $42.8 million in costs for American Electric Power; the city of Chanute, Kansas; Golden Spread Electric Cooperative; Kansas Electric Power Cooperative; OMPA; and Westar.
Marty-Marquez said she appreciated Nelson informing the commission of the “very large amount” of money involved.
“I thought it was a little shocking,” Marty-Marquez said. “We are going to be concerned about the impact to ratepayers.”
The billing of these amounts took such a long time, Marty-Marquez said, because of delays in finalizing the tariff language.
In response, Anderson joked, “Welcome to utility time.”
Nelson said she may ask the RSC to direct SPP to obtain Federal Energy Regulatory Commission approval to require payment over 10 months.
Marty-Marquez and Anderson said they would defer to Nelson’s judgment on how to approach the subject in Friday’s RSC meeting.
COMANCHE PEAK FUND TRANSFER REMANDED TO JUDGE
The commissioners also agreed to remand to the PUC’s administrative law judge a request to transfer funds for decommissioning the Comanche Peak Nuclear Power Plant from Luminant to a new limited liability company, TEX CP Company.
Luminant Generation is a subsidiary of Energy Future Holdings, which is in Chapter 11 bankruptcy.
Nelson noted that the request for the transfer in control was made under a reorganization plan approved in December that has since been rendered “null and void” by the expiration of a financing deadline in April.
On May 23, a US Bankruptcy Court judge give EFH permission to seek approval of two separate reorganization plans designed to replace the previously failed reorganization plan.
A representative of EFH said the company is “fine with it being remanded,” and EFH plans to update the application for change in control with a new Chapter 11 reorganization plan, whichever is approved.