Current through Reg. 50, No. 13; March 28, 2025
(a) Tariffs. Each transmission service
provider (TSP) shall file a tariff for transmission service to establish its
rates and other terms and conditions and shall apply its tariffs and rates on a
non-discriminatory basis. The tariff shall apply to all distribution service
providers (DSPs) and any entity scheduling the export of power from the
Electric Reliability Council of Texas (ERCOT) region. The tariff shall not
apply to any entity engaging in wholesale storage as described by §
25.501(m) of
this title (relating to Wholesale Market Design for the Electric Reliability
Council of Texas) (storage entity).
(b) Charges for transmission service
delivered within ERCOT. DSPs, excluding storage entities, shall incur
transmission service charges pursuant to the tariffs of the TSP.
(1) A TSP's transmission rate shall be
calculated as its commission-approved transmission cost of service divided by
the average of ERCOT coincident peak demand for the months of June, July,
August and September (4CP), excluding the portion of coincident peak demand
attributable to wholesale storage load. A TSP's transmission rate shall remain
in effect until the commission approves a new rate. The TSP's annual rate shall
be converted to a monthly rate. The monthly transmission service charge to be
paid by each DSP is the product of each TSP's monthly rate as specified in its
tariff and the DSP's previous year's average of the 4CP demand that is
coincident with the ERCOT 4CP.
(2)
Payments for transmission services shall be consistent with commission orders,
approved tariffs, and §
25.202 of this title (relating to
Commercial Terms for Transmission Service).
(c) Transmission cost of service. The
transmission cost of service for each TSP shall be based on the expenses in
Federal Energy Regulatory Commission (FERC) expense accounts 560-573 (or
accounts with similar contents or amounts functionalized to the transmission
function) plus the depreciation, federal income tax, and other associated
taxes, and the commission-allowed rate of return based on FERC plant accounts
350-359 (or accounts with similar contents or amounts functionalized to the
transmission function), less accumulated depreciation and accumulated deferred
federal income taxes, as applicable.
(1) The
following facilities are deemed to be transmission facilities:
(A) power lines, substations, reactive
devices, and associated facilities, operated at 60 kilovolts or above,
including radial lines operated at or above 60 kilovolts, except the step-up
transformers and a protective device associated with the interconnection from a
generating station to the transmission network;
(B) substation facilities on the high side of
the transformer, in a substation where power is transformed from a voltage
higher than 60 kilovolts to a voltage lower than 60 kilovolts;
(C) the portion of the direct-current
interconnections with areas outside of the ERCOT region (DC ties) that are
owned by a TSP in the ERCOT region, including those portions of the DC tie that
operate at a voltage lower than 60 kilovolts; and
(D) capacitors and other reactive devices
that are operated at a voltage below 60 kilovolts, if they are located in a
distribution substation, the load at the substation has a power factor in
excess of 0.95 as measured or calculated at the distribution voltage level
without the reactive devices, and the reactive devices are controlled by an
operator or automatically switched in response to transmission
voltage.
(E) As used in
subparagraphs (A) - (D) of this paragraph, reactive devices do not include
generating facilities.
(2) For municipally owned utilities, river
authorities, and electric cooperatives, the commission may permit the use of
the cash flow method or other reasonable alternative methods of determining the
annual transmission revenue requirement, including the return element of the
revenue requirement, consistent with the rate actions of the rate-setting
authority for a municipally owned utility.
(3) For municipally owned utilities, river
authorities, and electric cooperatives, the return may be determined based on
the TSP's actual debt service and a reasonable coverage ratio. In determining a
reasonable coverage ratio, the commission will consider the coverage ratios
required in the TSP's bond indentures or ordinances and the most recent rate
action of the rate setting authority for the TSP.
(4) A municipally owned utility that is
required to apply for a certificate of public convenience and necessity to
construct, install, or extend a transmission facility within ERCOT pursuant to
§
25.101 of this title (relating to
Certification Criteria) is entitled to recover, through the utility's wholesale
transmission rate, reasonable payments made to a taxing entity in lieu of ad
valorem taxes on that transmission facility, provided that:
(A) The utility enters into a written
agreement with the governing body of the taxing entity related to the
payments;
(B) The amount paid is
the same as the amount the utility would have to pay to the taxing entity on
that transmission facility if the facility were subject to ad valorem
taxation;
(C) The governing body of
the taxing entity is not the governing body of the utility; and
(D) The utility provides the commission with
a copy of the written agreement and any other information that the commission
considers necessary in relation to the agreement.
(5) The commission may adopt rate-filing
requirements that provide additional details concerning the costs that may be
included in the transmission costs and how such costs should be reported in a
proceeding to establish transmission rates.
(d) Billing units. No later than December 1
of each year, ERCOT shall determine and file with the commission the current
year's average 4CP demand for each DSP, or the DSP's agent for transmission
service billing purposes, as appropriate, excluding the portion of coincident
peak demand attributable to wholesale storage load. This demand shall be used
to bill transmission service for the next year. The ERCOT average 4CP demand
shall be the sum of the coincident peak of all of the ERCOT DSPs, excluding the
portion of coincident peak demand attributable to wholesale storage load, for
the four intervals coincident with ERCOT system peak for the months of June,
July, August, and September, divided by four. As used in this section, a DSP's
average 4CP demand is determined from the total demand, coincident with the
ERCOT 4CP, of all customers connected to a DSP, including load served at
transmission voltage, but excluding the load of wholesale storage entities. The
measurement of the coincident peak shall be in accordance with
commission-approved ERCOT protocols.
(e) Transmission rates for exports from
ERCOT. A transmission service charge for exports of power from ERCOT must be
assessed to transmission service customers for transmission service within the
boundaries of the ERCOT region, in accordance with this section and the ERCOT
protocols.
(1) A transmission service customer
must be assessed a transmission service charge for the use of the ERCOT
transmission system in exporting power from ERCOT based on scheduled exports
and the rates established under subsections (c) and (d) of this section. The
intervals must consist of one hour.
(2) The hourly transmission rate for exports
from ERCOT will be the TSP's annual rate established under subsections (c) and
(d) of this section divided by 8760.
(3) The entity scheduling the export of power
over a DC tie is solely responsible to the TSP for payment of transmission
service charges under this subsection.
(4) Beginning with the January 2023 reporting
month, ERCOT must file a public report with the commission stating the total
amount of energy imported and the total amount of energy exported over each DC
tie for the calendar month. The report must also include the total amount of
energy exported from the ERCOT region during the reporting month and each of
the preceding 11 calendar months, reported by scheduling entity. Each report
must be filed within 45 days of the end of the reporting month.
(f) Transmission revenue. Revenue
from the transmission of electric energy out of the ERCOT region over the DC
ties that is recovered under subsection (e) of this section shall be credited
to all transmission service customers as a reduction in the transmission cost
of service for TSPs that receive the revenue.
(g) Revision of transmission rates. Each TSP
in the ERCOT region shall periodically revise its transmission service rates to
reflect changes in the cost of providing such services. Any request for a
change in transmission rates shall comply with the filing requirements
established by the commission under this section.
(h) Interim Update of Transmission rates.
(1) Frequency. Each TSP in the ERCOT region
may apply to update its transmission rates on an interim basis not more than
once per calendar year to reflect changes in its invested capital. Upon the
effective date of an amendment to §25.193 pursuant to an order in Project
Number 37909, Rulemaking Proceeding to Amend P.U.C. Subst. R. 25.193, Relating
to Distribution Service Provider Transmission Cost Recovery factors (TCRF),
that allows a distribution service provider to recover, through its
transmission cost recovery factor, all transmission costs charged to the
distribution service provider by TSPs, each TSP in the ERCOT region may apply
to update its transmission rates on an interim basis not more than twice per
calendar year to reflect changes in its invested capital. If the TSP elects to
update its transmission rates, the new rates shall reflect the addition and
retirement of transmission facilities and include appropriate depreciation,
federal income tax and other associated taxes, and the commission authorized
rate of return on such facilities as well as changes in loads. If the TSP does
not have a commission-authorized rate of return, an appropriate rate of return
shall be used.
(2) Reconciliation.
An update of transmission rates under paragraph (1) of this subsection shall be
subject to reconciliation at the next complete review of the TSP's transmission
cost of service, at which time the commission shall review the costs of the
interim transmission plant additions to determine if they were reasonable and
necessary. Any amounts resulting from an update that are found to have been
unreasonable or unnecessary, plus the corresponding return and taxes, shall be
refunded with carrying costs determined as follows: for the time period
beginning with the date on which over-recovery is determined to have begun to
the effective date of the TSP's rates set in that complete review of the TSP's
transmission cost of service, carrying costs shall be calculated using the same
rate of return that was applied to the transmission investments included in the
update. For the time period beginning with the effective date of the TSP's
rates set in that complete review of the TSP's transmission cost of service,
carrying costs shall be calculated using the TSP's rate of return authorized in
that complete review.
(3) Future
consideration of effect on TSP's financial risk and rate of return. For a TSP
that has increased its rates pursuant to paragraph (1) of this subsection, the
commission may, in setting rates in the next complete review of the TSP's
transmission cost of service, expressly consider the effects of reduced
regulatory lag resulting from the interim updates to the TSP's rates and the
concomitant impact on the TSP's financial risk and rate of return.
(4) Commission processing of application. The
commission shall process an application filed pursuant to paragraph (1) of this
subsection in the following manner.
(A) Notice
and intervention deadline. The applicant shall provide notice of its
application to all parties in the applicant's last complete review of the
applicant's transmission cost of service and all of the distribution service
providers listed in the last docket in which the commission set the annual
transmission service charges for the Electric Reliability Council of Texas. The
intervention deadline shall be 21 days from the date service of notice is
completed.
(B) Sufficiency of
application. A motion to find an application materially deficient shall be
filed no later than 21 days after an application is filed. The motion shall be
served on the applicant by hand delivery, facsimile transmission, or overnight
courier delivery, or by e-mail if agreed to by the applicant or ordered by the
presiding officer. The motion shall specify the nature of the deficiency and
the relevant portions of the application, and cite the particular requirement
with which the application is alleged not to comply. The applicant's response
to a motion to find an application materially deficient shall be filed no later
than five working days after such motion is received. If within ten working
days after the deadline for filing a motion to find an application materially
deficient, the presiding officer has not filed a written order concluding that
material deficiencies exist in the application, the application is deemed
sufficient.
(C) Review of
application. A proceeding initiated pursuant to paragraph (1) of this
subsection is eligible for disposition pursuant to §
22.35(b)(1) of
this title (relating to Informal Disposition). If the requirements of §
22.35 of this title are met, the
presiding officer shall issue a notice of approval within 60 days of the date a
materially sufficient application is filed unless good cause exists to extend
this deadline or the presiding officer determines that the proceeding should be
considered by the commission.
(5) Filing Schedule. The commission may
prescribe a schedule for providers of transmission services to file proceedings
to revise the rates for such services.
(6) DSP's right to pass through changes in
wholesale rates. A DSP may expeditiously pass through to its customers changes
in wholesale transmission rates approved by the commission, pursuant to §
25.193 of this title (relating to
Distribution Service Provider Transmission Cost Recovery Factors
(TCRF)).
(7) Reporting
requirements. TSPs shall file reports that will permit the commission to
monitor their transmission costs and revenues, in accordance with any filing
requirements and schedules prescribed by the commission.
