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Excerpts from the REP Coalition’s Motion For Rehearing:

{***} “ The Texas Energy Association for Marketers (TEAM) and Alliance for Retail Markets (ARM) (collectively, the REP Coalition) respectfully submit this Motion for Rehearing and request a modification to the Declaratory Order issued in this proceeding on December 19,2024.1 

The REP Coalition respectfully requests that the Public Utility Commission of Texas (Commission) reconsider the Declaratory Order and make one of two suggested changes. On the eve of the consideration of that Declaratory Order, the Commission presented additional evidence in the case, which was comprised of over 600 pages.2 The REP Coalition did not and does not object to this information being made part of the record in this proceeding. However, this Motion for Rehearing provides an opportunity to respond to that information and its relevance to the Commission’ s ultimate Declaratory Order in this proceeding. Accordingly, the REP Coalition appreciates due and careful consideration of this Motion for Rehearing as it is necessary to assure residential and small commercial customers the appropriate opportunities for long-term fixed price products.” {***}

From the Executive Summary:

{***} “The REP Coalition has filed this petition to have the Commission determine whether the newly adopted Electric Reliability Council of Texas (ERCOT) Contingency Reserve Service (ECRS) ancillary service is a new cost or fee beyond a retail electric provider’s (REP’s) control for purposes of 16 Texas Administrative Code (TAC) § 25.475(b)(5). The Declaratory Order focuses extensively on the date by which REPs could have reasonably anticipated the quantity of ECRS services for which the REPs would be responsible. The Declaratory Order appears to turn on the following statement:

On December 20,2022, the quantity of ECRS that ERCOT would procure was established, based on the ERCOT Board of Directors’ approval of the 2023 Ancillary Service Methodology (six months before the initial procurement of ECRS). 3 

Even assuming arguendo that knowledge of the quantities of a new ancillary service that would be procured equates to a determination that those costs were then within the REPs control, the REPs were not able to control the costs reflected in residential and small commercial contracts executed prior to the date of approval of the Ancillary Service Methodology referenced in the order. Accordingly, the real factual issue in dispute is the date upon which existing customer contracts should have reflected a price that included the cost of ECRS. 

The REP Coalition requests that, at a minimum, the Declaratory Order be modified to establish the date on which existing residential and small commercial fixed price product contracts should have reflected that cost. Based on the discussion in the Declaratory Order and the evidence that was admitted on the day that order was issued, that date would be as follows: 

Accordingly, the Commission deeliaes-4e designates ECRS as an ancillary service incurring charges beyond a REP’ s control for a customer’s existing contract (i.e., a fixed-rate product) that was executed on or before June 9,2023 December 20,2022. 

In addition to the sworn facts that are part of the record in this case as presented by the REP Coalition, the additional information admitted as evidence at the Open Meeting supports a determination that awareness of the 2023 Ancillary Service Methodology, which provides only the minimum quantity of ECRS to be procured by ERCOT, does not equate to the ability to reasonably anticipate the costs that would be associated with those charges. The pool of supply that would be eligible to provide that service were not known at this same time. Accordingly, the date on which ECRS presented a new cost or fee beyond the REPs control is June 10, 2023. The Declaratory Order reflects a public policy determination that fixed price products for residential and small commercial customers should include an estimated cost of future, not yet fully designed services, prior to the cost of those services actually being incurred in the marketplace. 

The Commission has already determined by a previous order in this case: 

First, the outcome of this proceeding will not necessarily result in a price charge for customers. Rather, the Commission’ s ultimate determination in this proceeding is one of general applicability and will provide the competitive retail market with guidance on whether a REP can pass through a charge to its customer on an existing fixed rate contract under 16 TAC §25.475(b)(5).4 

It is critically important for customers that REPs understand how the rule language in 16 TAC § 25.475(b)(5) will impact the ability of REPs to adjust existing fixed priced products for regulatory changes implementing new ancillary services or costs approved by the Commission that create costs that are beyond the REP’s control after the existing contract was established.” {***}

TEAM & ARM Motion for Rehearing  (01/13/2024)
Declaratory Order (12/19/2024)
55959 (12/08/2023)
Joint Petition Of Texas Energy Association For Marketers And Alliance For Retail Markets For Designation Under 16 TAC § 25.475(b)(5)