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As reported previously, ARM and TEAM asked the Texas Public Utility Commission (TPUC) to designate ERCOT Contingency Reserve Service (ECRS) ECRS as an “ancillary service product as incurring charges beyond the REP’s control for a customer’s existing contract”.  

Subsequentially, an ALJ in this matter recommended that REPs be required to mail to potentially affected customers notice of the petition before the PUC but sought comment from parties before establishing such notice procedures.

In addition, the ALJ suggested that the most analogous notice appropriate for the petition would be those used in utility rate proceedings. Such utility notice procedures include a requirement for notice to be published in various newspapers.

In response to the ALJ request for comment, Staff, OPUC and TEAM and ARM filed comments generally supporting the requirement that retail electric providers (REPs), who would avail themselves of the ability to pass-through to fixed-price customers new ECRS costs, to mail notice of the PUC petition to allow for such a pass-through, to any customers which would be affected by the grant of the petition.

Excerpts From PUC Staff Comments:
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“because each individual REP can identify its affected customers, since they will be the same customers the REP would bill the ECRS recovery costs if the petition is successful, it would not be burdensome for each REP seeking to pass through ECRS charges to send the approved notice via U.S. mail as directed by 16 TAC § 22.51(a)(2). Accordingly, Commission Staff recommends that each REP seeking to pass through ECRS charges publish the approved notice of the filing to each affected customer by mail, as well as through all their normal methods of customer communications for contractual and billing issues such as email and any other communications platforms.”

“any REP that is not a member of the REP Coalition but would like to avail itself of the potential relief sought by the petitioners should similarly be required to self-identify,” whether the REP would utilize the pass-through. Staff said that such REPs should also be subject to any notice requirements adopted in the proceeding.”

OPUC generally favored a mailed notice requirement as well. OPUC also addressed the merits of the REPs’ petition itself (not just notice) and said that the petition for pass-through authority impermissibly seeks to re-litigate the “fixed means fixed” rule.

TEAM and ARM opposed a mailed notice requirement highlighting the following points:

“(1) the [utility mailing] notice requirements in 16 TAC § 22.51(a)(1) and (2) do not apply to REPs; (2) this proceeding cannot be analogous to an electric utility rate increase because REPs do not have a captive customer base and the Commission lacks jurisdiction over a REP’s competitive prices; (3) this proceeding will not determine any rate adjustment for any individual customer; (4) this proceeding seeks a legal determination of general applicability as a corollary to the Commission’s rulemaking in Project No. 51830 that will apply to all REPs; and (5) individual REPs that are members of TEAM and ARM are not parties to this proceeding and should not be required to give notice by publication and mail as required by 16 TAC § 22.51(a)(1) and (2).”

Excerpts From TEAM and ARM Comments:
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1. Notice requirements for traditional cost of service rate cases for public utility rates that are set by the Commission are not appropriate in this instance. The REP Coalition supports the original recommendation for notice filed by the Commission Staff and stands ready to comply with that notice as described herein. As noted by Commission Staff in that recommendation, this case is more analogous to the Commission’s proceedings to consider ERCOT’s application for approval of a Debt Obligation Order that ultimately led to securitization charges that were adjusted into the fixed rate products for existing customer contracts. The REP Coalition provides the following input to demonstrate that this case is not analogous to a rate case brought by a regulated public utility, and therefore, why notice provided under 16 TAC § 22.51(a)(1) and (2) should not apply and is not reasonable. First, the notice provisions found in 16 TAC § 22.51(a)(1) and (2) do not directly apply to this proceeding. Those rules only apply to proceedings initiated by an “electric utility” under PURA5 Chapter 36, Subchapters C through E; and to proceedings initiated by a “telecommunications utility” under PURA Chapter 51, § 51.009, and Chapter 53, Subchapters C through E. The definition of “electric utility” explicitly excludes retail electric providers (REps).6 ” Moreover, the Commission is expressly prohibited from mak[ingl rules or issu[ingl orders regulating competitive electric services , prices , or competitors or restricting or conditioning competition except as authorized in this title. „7 Therefore, the Commission’ s procedural rules governing proceedings involving an electric utility’s proposed change in rates are not directly applicable to the instant petition. 
2. The REP Coalition also disagrees with the suggestion that the relief requested in the petition is analogous to a rate increase for fixed rate customers. No customer charges or rate adjustments will be determined in this proceeding. This proceeding is an extension of the rulemaking completed in Project No. 51830 where the Commission amended the definition of “price” found in 16 TAC § 25.475(b)(8) in a manner that necessitated an express designation for ancillary services.8 Stated another way, notice that the price of a fixed price product can change if the Commission makes the designation required under 16 TAC § 25.475(b)(5) has already been provided to all retail customers because this statement of general applicability was adopted pursuant to the notice and comment provisions of the Administrative Procedures Act. The determination that is required by the Commission rule and requested by the REP Coalition is a statement of general applicability regarding the legal classification of a new ancillary service. No particular rate adjustment will be approved in this proceeding. Whether or not a REP applies a one-time price adjustment to residential and/or small commercial contracts after this designation will vary by REP, and by individual customer contract. If an individual customer
3. Notice from individual REPs to individual customers is not appropriate. 

First, while TEAM and ARM are parties to this proceeding, they are separate legal entities from their members. These associations are appropriate parties to this proceeding because the legal determination to be made under 16 TAC § 25.475(b)(5) will be one of general applicability. Consequently, a Commission decision that ECRS is an ancillary service incurring a cost beyond a REP’s control will not be limited to only those REPs who are members of TEAM and ARM. The applicable language in 16 TAC § 25.475 does not, and should not, require individual REPs to apply for this legal designation. During the open meeting where this language was adopted, the discussion surrounding this designation for ancillary services indicated that it would coincide with the Commission’s approval of the new ancillary service. As in the securitization cases noted in PUC Staff’ s notice recommendation, notice to individual customers is not required every time the Commission approves a change that results in a new cost or fee beyond the REP’ s control.12.
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TEAM’ and Alliance for Retail Markets’ Response to Order No. 3  (01/22/2023)
OPUC’S Recommendations On Notice  (01/22/2023)
Commission Staff’s Response To Order No. 3   (01/22/2024)
55959  (12/08/2023)