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Texas PUC staff proposes order letting co-op shift load to ERCOT from Southwest Power Pool

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Texas PUC staff proposes order letting co-op shift load to ERCOT from Southwest Power Pool

Highlights

Transfer of wires segment to be denied

Lower wholesale power costs expected

Houston — The remaining Rayburn Country Electric Cooperative load served by Southwest Power Pool would join the Electric Reliability Council of Texas market in early 2020, under a proposed order to be considered by the Public Utility Commission of Texas at its February 7 meeting.

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The PUC's Office of Policy and Docket Management on Tuesday filed a proposed order that would allow the 96 MW -- about 12% of RCEC load -- that is now served by the SPP grid to cut that tie and instead be served by the ERCOT grid.

In May, RCEC applied for permission to do that as well as transfer ownership of a 10.8-mile segment of 138-kV transmission to Lone Star Transmission (Docket No. 48400).

DENIES TRANSMISSION TRANSFER

The proposed order grants the change from SPP to ERCOT, but would reject the transfer of ownership of the transmission segment to Lone Star Transmission.

Such a denial was a condition of a November settlement agreement between Oncor, Texas Industrial Energy Consumers and PUC staff. Other intervenors who did not oppose the settlement were East Texas Electric Cooperative, ERCOT, SPP and Jim Wise, an area property owner with environmental concerns about the proposed transmission segment transfer.

RCEC is a generation and transmission cooperative serving about 800 MW of load through four member-owned electric distribution cooperatives in North Texas: Fannin County, Farmers Electric, Grayson-Collin and Trinity Valley. Most of the load to be transferred is in the Trinity Valley service area. Tuesday's order proposes integrating the remaining RCEC load into ERCOT in 2020, but ERCOT has "the discretion to postpone the date of integration if ERCOT determines the integration ... will be a risk to the reliability or resource adequacy of the ERCOT system." In such a case, ERCOT would request a new integration date from the PUC.

The proposed order sets an integration date of January 1, 2020, but this is "extended day-for-day by the same number of days after December 31, 2018, that this order is signed."

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COST SAVINGS SEEN

RCEC says its member cooperatives and 180,000 retail end-use customers "will benefit from lower wholesale power costs offered by the ERCOT market," including an estimated $3.8 million a year or about 86 cents/MWh over the period of 2020 to 2025.

The order calls for the construction of facilities estimated to cost about $32 million, which is to be split between RCEC and Oncor Electric Delivery, the state's largest transmission system owner.

The order also calls for RCEC to pay $4.5 million a year for five years to ERCOT's transmission customers as a "hold-harmless" payment to cover any costs associated with the load transfer.

Parties wishing to file corrections or exceptions to the proposed order must do so no later than January 31.

-- Mark Watson, markham.watson@spglobal.com

-- Edited by Keiron Greenhalgh, newsdesk@spglobal.com