NOTICE DATE:  July 19, 2021

NOTICE TYPE:  W-B071921-01 Legal

SHORT DESCRIPTION:  Notice of Application for Uplift Balance Financing

INTENDED AUDIENCE:  All Market Participants

DAY AFFECTED:  July 16, 2021 forward

LONG DESCRIPTION: On July 16, 2021, Electric Reliability Council of Texas, Inc. (ERCOT) filed with the Public Utility Commission of Texas (Commission) an application for a debt obligation order to finance the Uplift Balance, as that term is defined in Subchapter N of Chapter 39 of the Public Utility Regulatory Act (PURA).  ERCOT’s request for approval of a debt financing mechanism to finance the Uplift Balance is intended to mitigate the effect of Winter Storm Uri on load serving entities (LSEs) within the ERCOT power region.

In PURA § 39.652(4), the Legislature defined the Uplift Balance to mean an amount of money of not more than $2.1 billion that was uplifted to LSEs on a load ratio share basis due to energy consumption during the period of emergency for reliability deployment price adder charges and ancillary services costs in excess of the Commission’s system-wide offer cap, excluding amounts securitized under Subchapter D of PURA Chapter 41.  The term does not include amounts that were part of the prevailing settlement point price during the period of emergency.  PURA § 39.652(3) defines the period of emergency as the period beginning 12:01 a.m., February 12, 2021, and ending 11:59 p.m., February 20, 2021.

If approved by the Commission, the debt obligation order sought by ERCOT will authorize ERCOT to:

• establish a debt financing mechanism for the payment of the Uplift Balance;
• establish a process to distribute proceeds to qualified scheduling entities (QSEs) that represent LSEs that demonstrate Eligible Costs;
• impose nonbypassable uplift charges on LSEs through their QSEs, except for those that opt out of the uplift charges in accordance with PURA § 39.653(d); and
• remit the uplift charge proceeds to pay the debt obligations.

If approved, ERCOT’s application will affect all QSEs that represent LSEs in the ERCOT power region except those LSEs eligible to opt out of the uplift charges by the QSE paying in full all invoices owed for LSE usage during the period of emergency.  Entities eligible to opt out of uplift charges are municipally owned utilities, electric cooperatives, river authorities, a retail electric provider (REP) that has the same corporate parent as each of the REP’s customers, a REP that is an affiliate of each of the REP’s customers, and transmission-voltage customers served by a REP.  LSEs and transmission-voltage customers that opt out of uplift charges cannot receive any proceeds from the uplift financing.

ERCOT has requested authority to recover the amount financed by imposing uplift charges to QSEs based on the load ratio share of their eligible LSEs, as required by PURA § 39.653(c).  An LSE’s load ratio share will change on a daily basis based on actual load. In calculating an LSE’s load ratio share, ERCOT will exclude the load of those entities that opt out under PURA § 39.653(d). While the load ratio share used to assess uplift charges will be updated on a daily basis, the uplift charges will be charged to QSEs on a monthly basis. Uplift charges will be allocated among all eligible LSEs, including LSEs that enter the ERCOT wholesale market after the Commission issues its order.

A complete copy of the application is available at PUC Docket No. 52322, Application of ERCOT for a Debt Obligation Order to Finance Uplift Balances under PURA Chapter 39, Subchapter N, for an Order Initiating Parallel Docket, and for a Good Cause Exception.  

PURA § 39.653(f) requires the Commission to issue an order in this proceeding no later than 90 days after the filing of the application.  Persons who wish to intervene in or comment on these proceedings should contact the Public Utility Commission of Texas at P.O. Box 12236, Austin, Texas 78711-3326.  Further information may also be obtained by calling the Public Utility Commission at (512) 936-7120 or (888) 782-8477.  Hearing- and speech-impaired individuals with text telephone (TTY) may contact the Commission at (512) 936-7136.  A request for intervention or a request for further information should refer to PUC Docket No. 52322.  ERCOT has proposed the intervention deadline to be July 27, 2021, which is the eleventh day after the filing of the application.

CONTACT: If you have any questions, please contact your ERCOT Account Manager. You may also call the general ERCOT Client Services phone number at (512) 248-3900 or contact ERCOT Client Services via email at ClientServices@ercot.com.

If you are receiving email from a public ERCOT distribution list that you no longer wish to receive, please follow this link in order to unsubscribe from this list: http://lists.ercot.com.

 

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