Texas Regulatory Update
Update on AEP Texas’ Application for Approval of its Advanced Meter Deployment Plan
AEP Texas has requested approval of its proposed Advanced Metering System (AMS) Deployment Plan and Request for AMS Surcharge. AEP has also opened a proceeding to address the reallocation of energy trading margins from the AEP East to the AEP West Companies, and the terms around sharing a portion of these reallocated energy trading margins with ratepayers.
Settlement Agreements in both proceedings were approved by the Texas Public Utility Commission (PUCT) at its December 2 Open Meeting. As a result, AEP Texas now has the go-ahead to deploy one million advanced meters throughout their service territories from 2010 though 2013 and recover the costs for the project through an advanced metering surcharge. This surcharge will be effective for 11 years starting with the January 2010 billing period (Dec. 30, 2009) and running through the December 2020 billing period.
In conjunction with the settlement regarding the reallocation of energy trading margins, AEP Texas will refund the excess margins to customers. A majority of the refund amount is being used to offset the AMS surcharge and is already reflected in the riders shown above.
IDR-metered and unmetered customers who are not receiving an advanced meter and who are not subject to the surcharge, will receive credits (passed through from AEP to the retail electric providers) for their share of the refunds. Direct Energy Business has agreed to provide all of the credited amounts in full for each of the meters for which the credits are received from AEP Texas Central Company or AEP Texas North Company. Eligible transmission-level, IDR-metered customers will receive a one-time refund in January 2010. All other IDR-metered and unmetered classes will receive their refunds over the two-month period of January through February 2010.
Deployment of Advanced Meters
An initial 5,000 advanced meters will be deployed in the City of Portland this year to provide the opportunity to identify and resolve any problems or issues with hardware, software, or processes before beginning full-scale commercial deployment in 2010. Full-scale commercial deployment of advanced meters will begin in Q2-2010 for Texas Central in Corpus Christi and Q2-2010 for Texas North in Abilene.
After completion of the initial full deployment in Corpus Christi and Abilene in 2010, the companies plan to continue full deployment of the meters in a sequence that will enable them to eliminate manual readings in an entire meter reading area.
Texas Central plans to install 5,000 meters in 2009, approximately 131,000 meters in 2010, and an average of 224,000 meters annually in 2011, 2012 and 2013. Texas North plans to install approximately 57,000 meters in 2010, and an average of approximately 45,000 meters annually over the next three years.
PUCT Extends Requirement for REPs to List Fixed Price End Date on Small Commercial Bills
The requirement for retail electric providers (REPs) to list an end date on fixed price bills will now apply to small commercial customers’ bills as well. The Public Utility Commission of Texas (PUCT) adopted revised rules regarding contract expiration notices (project 37214, Subst. R. 25.475) and common billing terms (project 37070, Subst. R. 25.479), in response to HB 1822.
The PUCT adopted most of the proposed language and provisions that were previously filed by Commissioner Donna Nelson, while making decisions on two major outstanding issues: applicability to small commercial customers, and the effective date of implementation. Because most other consumer protection rules in Subchapter R apply to customers under 50 kW, the Commission elected to apply the same requirement for listing end dates on small commercial customers’ bills.
Under Nelson's proposal, REPs will have the choice of two methods for calculating the end date of contracts for the purposes of listing it on the monthly bill, and for listing it on required contract expiration notices.
Under the first method, REPs will provide customers with a specific end date. REPs choosing to list a specific end date must only waive any termination fee for a period of 14 days prior to contract expiration, and not the entire length of time from when the REP sends a renewal notice, as was in an earlier proposal. The renewal notice, to be sent out 30 to 60 days prior to the residential contract expiration date, is required to clearly state that there is a 14-day waiver of termination fees and it must also include a description of the termination fees that will be charged before the waiver period begins.
Under this first option, an REP is permitted to keep charging the current contract rate until the next meter read on or after the listed contract end date. This addresses concerns that the meter read (and thus contract end date) could be delayed from what the REP lists on the bill due to the fluid nature of meter reading schedules.
As a second option, REPs may choose to estimate the contract end date by referencing the first meter read on or after a specific calendar date. Under this option, the termination fee waiver period still only applies for 14 days prior to expiration, regardless of when the expiration notice is sent (for small commercial customers).
Nelson clearly stated that the termination fee waiver period for small commercial customers is to be 14 days, regardless of whether their end date is estimated, since such customers have more savvy in the electric market than residential customers.
Even though REPs requested more time for implementation, the Commission ordered that REPs implement the changes by April 1, 2010. In addition, REPs will be required to use the term "base charge" for any charge assessed on a monthly basis without regard to the customer's demand or energy consumption (excluding TDU fees, taxes, etc.). Originally, Nelson had proposed giving REPs the option of using “base charge” or "customer charge" for this fee, but Commissioners agreed that using only one term would facilitate comparisons of different Electricity Facts Labels.
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