Current through Reg. 50, No. 13; March 28, 2025
(a) Purpose.
The purpose of this section is to address the process and the sequence of
events for the introduction of retail competition in the portions of Texas
served by El Paso Electric Company (EPE).
(b) Application. This section shall apply to
an electric utility that is subject to Public Utility Regulatory Act (PURA)
§39.102(c), namely EPE.
(c)
Readiness for retail competition. The commission determines that the power
region in which EPE is located will be unable to offer fair competition and
reliable service to all retail customer classes in Texas upon the expiration of
its system-wide rate freeze period in August 2005. Therefore, pursuant to PURA
§39.103, the introduction of retail competition for the portions of the
power region in Texas is delayed until this region can offer fair competition
and reliable service to all retail customer classes.
(d) Cost-of-service regulation. Until the
date on which EPE is authorized by the commission to implement retail
competition pursuant to this section, its rates are subject to regulation under
Chapter 36 of PURA.
(e) Transition
to competition. The sequence of events set forth in paragraphs (1) through (5)
of this subsection shall be followed to introduce retail competition in EPE's
service territory. All the listed items in each stage must be completed before
the next stage is initiated. Unless stated otherwise in the rule, each of the
activities will be conducted by the commission in conjunction with EPE and
other interested parties. Full retail competition will not begin in EPE's
service territory until completion of the fifth stage.
(1) The first stage consists of the following
activities:
(A) Develop and obtain approval
of a regional transmission organization for the EPE region by the Federal
Energy Regulatory Commission and commence independent operation of the
transmission network under the approved regional transmission
organization.
(B) Develop retail
market protocols to facilitate retail competition.
(C) Complete an expedited proceeding to
develop non-bypassable delivery rates for the customer choice pilot project to
be implemented under paragraph (2)(A) of this subsection.
(2) The second stage consists of the
following activities:
(A) Initiate the
customer choice pilot project pursuant to PURA § 39.104 and §
25.431 of this title (relating to
Retail Competition Pilot Projects).
(B) Develop a balancing energy market, market
for ancillary services, and market-based congestion management system for the
wholesale market in the region in which the regional transmission organization
operates.
(C) Implement a seams
agreement with adjacent power regions to reduce barriers to entry and
facilitate competition.
(3) The third stage consists of the following
activities:
(A) EPE shall:
(i) Prepare and file with the commission an
application for business separation pursuant to PURA § 39.051 and §
25.342 of this title (relating to
Electric Business Separation);
(ii)
Prepare and file with the commission an application for unbundled transmission
and distribution rates pursuant to PURA § 39.201 and §
25.344 of this title (relating to
Cost Separation Proceedings);
(iii)
Prepare and file with the commission an application for certification of a
qualified power region pursuant to PURA §39.152; and
(iv) Prepare and file with the commission an
application for price-to-beat rates pursuant to PURA § 39.202 and §
25.41 of this title (relating to
Price to Beat).
(B) The
activities to be completed by the commission in the third stage are to:
(i) Approve a business separation
plan;
(ii) Set unbundled
transmission and distribution rates;
(iii) Certify a qualified power region, which
includes conducting a formal evaluation of wholesale market power in the
region, pursuant to PURA §39.152;
(iv) Set price-to-beat rates for EPE;
and
(v) Determine which competitive
energy services must be separated from regulated utility activities pursuant to
PURA § 39.051 and §
25.343 of this title (relating to
Competitive Energy Services).
(C) The activity to be completed by the
regional transmission organization, the statewide registration agent and market
participants in the third stage is testing of retail and wholesale systems,
including those systems necessary for switching customers to the retail
electric provider of their choice and for settlement of wholesale market
transactions.
(4) The
fourth stage consists of the following activities:
(A) The commission shall evaluate the results
of the pilot project pursuant to §
25.431 of this title.
(B) EPE shall initiate capacity auctions
pursuant to PURA § 39.153 and §
25.381 of this title (relating to
Capacity Auctions) at a time to be determined by the commission.
(C) EPE shall separate competitive energy
services from its regulated utility activities, in accordance with the
commission order approving the separation of competitive energy
services.
(5) The fifth
stage consists of the commission evaluating whether the power region can offer
fair competition and reliable service to all retail customer classes. If the
commission concludes that the power region can offer fair competition and
reliable service to all retail customer classes, it shall issue an order
initiating retail competition and directing EPE to complete the business
separation and unbundling.
(f) Applicability of energy efficiency and
renewable energy requirements. Beginning January 1, 2006, EPE shall be subject
to the energy efficiency requirements under PURA § 39.905 and §
25.181 of this title (relating to
Energy Efficiency Goal) and the renewable energy credit requirements under PURA
§ 39.904 and §
25.173 of this title (relating to
Goal for Renewable Energy).
(1) EPE shall
begin administering the energy efficiency programs prescribed in §
25.181 of this title by January 1,
2006. EPE shall meet, at a minimum, 5.0% of its growth in demand through energy
efficiency savings resulting from these programs by January 1, 2007 and 10% of
its growth in demand by January 1, 2008, and each year thereafter.
(2) EPE shall obtain, at a minimum, renewable
energy credits in an amount sufficient to meet the requirements for the
compliance period beginning January 1, 2006, and for each compliance period
thereafter.
(g)
Applicability of other rules. This section governs the implementation of PURA
Chapter 39 requirements as applied to EPE. If there is an inconsistency or
conflict between this section and other rules in this Chapter (relating to
Substantive Rules Applicable to Electric Service Providers), the provisions of
this section shall control.
(h)
Good cause. Upon a finding of good cause, as determined by the commission, the
sequence for retail competition set forth in subsection (e) of this section may
be modified by commission order.