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 Southwestern Electric Power
Company service area in Texas (SWEPCO) and in the Southwest Power Pool portion
of the AEP Texas North Company service area in Texas (Texas
North-SPP).
(b) Application. This
section shall apply to SWEPCO and Texas North-SPP (collectively referred to as
"the utilities"). In the event that the customers, facilities, and the service
area of Texas North-SPP are transferred to SWEPCO, the requirements of this
section shall apply to the combined company.
(c) Readiness for retail competition. The
commission determines that the power region in which SWEPCO and Texas North-SPP
are located will be unable to offer fair competition and reliable service to
all retail customer classes in Texas until January 1, 2011, at the earliest.
Therefore, pursuant to Public Utility Regulatory Act (PURA) §39.103, the
introduction of full retail competition for these portions of the power region
in Texas shall be further delayed until this region can offer fair competition
and reliable service to all retail customer classes, subject to the terms and
conditions established in this section.
(d) Cost-of-service regulation. Until the
date authorized by the commission for the implementation of full retail
competition in SWEPCO and Texas North-SPP pursuant to this section, the rates
of the utilities are subject to regulation under PURA Chapter 36. Until full
retail competition begins, the utilities shall file Annual Earnings Reports as
required by §
25.73 of this title (relating to
Financial and Operations Reports) in lieu of the Annual Report required by PURA
§39.257.
(e) Transition to
competition. Full retail competition shall not be introduced in the utilities'
service areas before January 1, 2011. In addition, the introduction of retail
competition in the utilities' service areas shall be conditioned on successful
fulfillment of the sequence of events and activities set forth in paragraphs
(1) - (5) of this subsection. All the listed items in each stage must be
completed before the next stage is initiated. Unless stated otherwise in this
section, each of the activities will be conducted by the commission in
conjunction with SWEPCO and Texas North-SPP and other interested parties. Full
retail competition will not begin in SWEPCO and Texas North-SPP until
completion of the fourth stage.
(1) Completed
Activities. The stages outlined below assume that the following activities have
been completed, by SWEPCO and Texas North-SPP:
(A) The initiation of a pilot program,
including the establishment of rates for the pilot program.
(B) The filing of a business separation plan
and unbundled cost of service.
(C)
The separation of competitive energy services.
(D) Approval by the Federal Energy Regulatory
Commission (FERC) of a regional transmission organization for the power region
containing the utilities' service areas and the commencement of independent
operation of the transmission network that ensures non-discriminatory access,
by the approved regional transmission organization.
(2) Stage one. The first stage consists of
the following activities:
(A) The utilities
will continue the operation of the pilot projects to a point that competitive
retail electric providers are providing service to a reasonable number of
customers for all major customer classes in the pilot program offered in the
utilities' service areas;
(B) The
utilities will file a plan for the development of retail market protocols to
facilitate retail competition;
(C)
The utilities will file a plan for the development of 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; and
(D) A seams agreement will be implemented
with adjacent power regions to reduce barriers to entry and facilitate
competition.
(3) Stage
two. The second stage consists of the following activities:
(A) The utilities shall file a transition to
competition plan identifying how they intend to achieve full customer choice,
including:
(i) certification of a qualified
power region under PURA §39.152;
(ii) auctioning rights to generating
capacity;
(iii) the establishment
of a price to beat for eligible residential and commercial customers, including
all necessary information for the derivation of the price to beat;
(iv) the retail market protocols that will be
applicable in the utilities' service areas;
(v) a plan, developed with the regional
transmission organization, the statewide registration agent, and market
participants, for testing 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;
(vi) any necessary amendments to the
previously filed business separation plan; and
(vii) an unbundled cost of service rate
filing package.
(B) The
activities to be completed by the commission in the second stage are to:
(i) Approve, modify, or reject the transition
to competition plan within 180 days after the date of filing unless a hearing
is requested. If a hearing is requested, the 180-day deadline shall be extended
one day for each day of hearing;
(ii) Approve a business separation plan or
amendments to the business separation plan;
(iii) Set unbundled transmission and
distribution rates;
(iv) Certify a
qualified power region for an area that includes the utilities, pursuant to
PURA §39.152; and
(v) Set
price-to-beat rates for the utilities' service areas.
(4) Stage three. The third stage
consists of the following activities:
(A) The
commission shall evaluate the results of the pilot projects pursuant to §
25.431 of this title (relating to
Retail Competition Pilot Projects), including whether the pilot project has
progressed to a point that competitive retail electric providers are providing
service to a reasonable number of customers for all major customer classes in
the pilot programs offered in the utilities' service areas and whether the
retail and wholesale systems have been tested and are performing
adequately.
(B) The utilities 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, and consistent
with the transition to competition plan.
(5) Stage four. The fourth stage consists of
the following activities:
(A) The utilities
shall file a request for approval to commence competition, consistent with the
procedures and standards developed in the previous stages. This filing should
be made at least 180 days before the anticipated date of the commencement of
competition.
(B) The commission
shall evaluate whether the power region can offer fair competition and reliable
service to all retail customer classes, and whether there are any outstanding
items in the competition plan that must be completed prior to the commencement
of full competition. 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 consistent with the approved
transition to competition plan.
(f) Annual Report. If full retail competition
has not been implemented by January 1, 2011, the utilities shall file a report
with the commission by January 31, 2011, identifying the items required by this
section that have not yet been completed and an estimate of when completion of
each item is anticipated. The utilities shall make a similar filing each year
on January 31 until full retail competition in their service areas is
authorized by the commission or the commission rules that no further reports
are necessary.
(g) Pilot Project
Continuation. Notwithstanding the provisions of subsection (e) of this section,
the pilot projects in the utilities' service areas shall continue. However, so
long as the utilities can effectively administer customer registrations and
convey information relating to a customer's choice of retail electric provider
and meter information to persons who need such information, they may continue
to perform these functions, subject to the codes of conduct.
(h) Protection of Contractual Rights. The
transition to competition plan in the utilities' service areas shall not
adversely affect the rights or obligations of an electric cooperative under a
wholesale generation or transmission agreement.
(i) Energy efficiency and renewable energy
requirements. Effective January 1, 2007, SWEPCO and Texas North-SPP shall:
(1) Be subject to requirements of PURA §
39.905 and §
25.181 of this title (relating to
Energy Efficiency Goal) and shall continue to participate in the required
energy efficiency programs.
(2) Be
subject to the requirements of PURA § 39.904 and §
25.173 of this title (relating to
Goal for Renewable Energy) and shall continue to participate in the renewable
energy credits program.
(j) Applicability of other sections. This
section governs the implementation of PURA Chapter 39 requirements as applied
to SWEPCO and Texas North-SPP. If there is an inconsistency or conflict between
this section and other sections in this Chapter (relating to Substantive Rules
Applicable to Electric Service Providers), the provisions of this section shall
control.
(k) 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.
