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The Texas PUC approved a Draft Declaratory Order & Commission Memo that prohibits the variations in certain ERCOT securitization charges related to Winter Storm Uri from being passed through to certain fixed rate Retail Energy Provider (REP) customers.

From Commissioner Dobb’s Memorandum:
{***} “Before the Commission is a proposed declaratory order that addresses Commission Staff’s petition requesting an order declaring whether a Retail Electric Provider (REP) may vary its fixed-rate contracts under Public Utility Regulatory Act (PURA) § 39.112(a) and 16 Texas Administrative Code (TAC) § 25.475(b)(5) to capture fluctuations in securitization charges. I recommend that the Commission approve the proposed declaratory order, determining that a REP may not vary its fixed-rate contracts to capture fluctuations in securitization charges. However, I proposed clarifying changes to the proposed declaratory order for purposes of accuracy and completion. My proposed changes are redlined in the attached draft declaratory order and outlined below. The proposed declaratory order determines that REPs may not vary the price charged under a fixed rate contract entered on or after August 1,2022, to recover fluctuations in securitization charges. An August 1,2022 cutoff date would apply to all fixed-rate contracts that collect securitization uplift charges, which the Electric Reliability Council of Texas, Inc . (ERCOT) implemented on August 1,2022.1 However, it may not apply to all fixed-rate contracts that collect securitization default charges, which ERCOT implemented on January 11 , 2022. 

To address this issue, I recommend that the Commission include two separate determinations in the declaratory order. These two separate determinations would more clearly address the applicability of the Commission’s declaratory order to charges securitized under Subchapter M and Subchapter N of PURA. Accordingly, I recommend that the Commission first determine that

a REP may not vary the price charged under a fixed-rate contract entered on or after January 11, 2022, to recover fluctuations in default charges that were securitized under PURA §§ 39.603 and 39.605 and the Commission’s debt obligation order issued in Docket No. 5232 and incurred by the REP over the life of a customer’s fixed-rate contract. Secondly, I recommend that the Commission determine that a REP may not vary the price charged under a fixed-rate contract entered on or after August 1, 2022, to recover fluctuations in uplift charges that were securitized under PURA §§ 39.653 and 39.656 and the Commission’s debt obligation order issued in Docket No. 52322 and incurred by the REP over the life of a customer’s fixed-rate contract. Finally, I recommend other non-substantive changes to provide additional clarity.” {***}

The TPUC declaratory order does the following:

1. Retail electric providers (REPs) may not vary the price charged under a fixed rate contract entered on or after January 11, 2022, to recover fluctuations in securitization default charges.
2. A REP may not vary the price charged under a fixed rate contract entered on or after August 1, 2022, to recover fluctuations in securitization uplift charges.

Draft Declaratory Order & Commission Memo  (10/03/2024)
56168  (01/31/2024) |
Commission Staff’s Petition For A Declaratory Order Interpreting 16 TAC § 25.475(b)(5).