Texas regulators decide not to refer SPS, SPP matter to State Office of Administrative Hearings

The Public Utility Commission (PUC) of Texas, at a May 4 open meeting, considered a docket involving Xcel Energy’s (NYSE:XEL) Southwestern Public Service (SPS) and the Southwest Power Pool (SPP), and decided not to refer the matter to the State Office of Administrative Hearings, according to a May 11 draft briefing order by the PUC’s Commission Advising and Docket Management Division.

As TransmissionHub reported, SPS and SPP, in a joint petition filed on Feb. 28 with the PUC, requested that the PUC resolve as a matter of law the issue involving whether SPS has the exclusive right to build and operate new regionally funded transmission facilities in areas of Texas that lie within the company’s service area.

SPS contends that the Public Utility Regulatory Act (PURA) grants an incumbent electric utility operating in areas outside of ERCOT a right of first refusal to build new transmission facilities located in the service area prescribed for that utility by the PUC.

In contrast, the petition added, SPP avers that there is no clear statement in Texas law that incumbent utilities have such a right of first refusal, and therefore SPP is proceeding as if there is no right of first refusal under Texas law and abiding by the portion of its Open Access Transmission Tariff (OATT) that requires the competitive solicitation and designation of transmission owners, including non-incumbents, to build and operate new transmission facilities in areas of Texas within the SPP footprint.

Because a regionally funded transmission project located in SPS’ service territory – the new 345-kV Potter to Tolk line – is scheduled to be considered by the SPP Board of Directors within the next two months, SPS last month filed a lawsuit in state district court in Potter County, Texas, seeking a declaration that it has the right to build the project, the petition said.

In light of the PUC’s familiarity with PURA and its statutory duty to oversee the electric industry in Texas, SPS and SPP have agreed to abate the lawsuit and to seek a declaration from the PUC regarding whether Texas law grants SPS a right of first refusal to build the regionally funded transmission project or whether SPP must follow the competitive bid process in the absence of such right of first refusal under Texas law, the petition said.

In a May 1 filing, PUC staff noted that SPP and SPS on April 27 filed a joint letter indicating that SPP’s board has ordered additional study on the Potter-Tolk line that served as the impetus for the filing of the petition in the docket (Docket No. 46901). As a result, it appears that SPP’s board would not decide whether to approve the line until April 2018, at the earliest, staff said.

The deferral of the line means that the question raised in the current joint petition is no longer ripe for consideration, and as a result, a PUC order on the merits would be an advisory opinion, staff said.

Staff requested that the PUC find that the issues in the proceeding “are not ripe for decision,” and SPS and SPP responded on May 2, requesting that the PUC deny staff’s motion.

As noted in a May 4 PUC order, the PUC decided during the May 4 open meeting to suspend the procedural schedule in the docket. In a separate May 4 order, the PUC said that as soon as possible following the issuance of a preliminary order, the parties in the proceeding are to jointly file a revised procedural schedule for further processing.

According to the May 11 draft briefing order, the parties’ filings to date indicate that the docket can be decided based on the submission of written briefs.

“This briefing order sets forth the issues that parties must address in their briefs as well as an issue that” is to not be addressed, the draft briefing order said. “After the issuance of this order, Docket Management shall reset the procedural schedule.”

The issues to be addressed are:

  • May an electric utility as defined in PURA § 37.001 or other person build transmission facilities in Texas to provide service to the public without first obtaining from the PUC a certificate of convenience and necessity under chapter 37 of PURA?
  • Does the PUC have authority under chapter 37 of PURA to grant a certificate of convenience and necessity to an electric utility as defined in PURA § 37.001 or other person that will provide only transmission service of ERCOT? In answering this question, those responding were asked to address the conclusion of the court in Public Utility Commission of Texas v. Cities of Harlingen that “[t]he PURA authorizes the commission to grant a CCN to an electric utility that provides only transmission services and does not have a certificated area in which such services will be provided.”
  • Does SPS have the exclusive right to build transmission facilities within its certificated service area and, if so, may it decline to exercise that right?

The PUC takes the position that this issue need not be address in this proceeding: any issue relating to the interpretation of a FERC order or tariff, as any such issue is not within the PUC’s jurisdiction.

Commission Advising noted that the PUC will consider the draft briefing order at the May 18 open meeting.

About Corina Rivera-Linares 3058 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.