PUCT approves CCN mods to enable Lubbock integration into ERCOT

Chairman Walker expressed concern about the demarcation point between LP&L’s portion of the line and Oncor's and was uncomfortable issuing an order modifying the CCNs without more specific information. One of the lines will be used to true up the allocation of costs between the two utilities, Being unaware of the total cost at this time, the utilities were unable to specify the demarcation point. LP&L ultimately requested granting LP&L the line from Wadsworth to New Oliver, with the line from New Oliver to Farmland assigned to Oncor.

Chairman Walker’s Memo

Prior to the Open Meeting, Chairman Walker filed a memo recommending various changes to the proposed order. She also noted two issues might require further modifications to the proposed orders.

Open Meeting Discussion

Chairman Walker noted that her memo addressed several issues the Commission had discussed at its last meeting and wanted to get input from the other commissioners. The first issue that concerned Chairman Walker was the adjustment to Route A2M-5 or A2M-6.

Route 18 Proponents reported that that this issue had become moot because counsel had been unable to get consent from any neighbors for A2M-5, leaving A2M-6 as the only option.

Chairman Walker was "fascinated" by this choice over Route A2, suggesting that A2M seemed to be less disruptive to that parcel of land than the others.

Staff noted that the designation of route A2M was currently contained in the order so no modifications would be necessary.

The other issue for Chairman Walker concerned the designation of specific termination points. Although she understood the designation would be based on cost sharing, she noted that in the past she had been “really uncomfortable” issuing a CCN order that was not specific. Chairman Walker noted that she was not comfortable with a compliance docket so asked the parties to work out where the division would occur.

Lambeth Townsend, representing Lubbock Power & Light (LP&L), informed the Commission that this would be premature at this time because they do not have enough cost specificity to designate the endpoint Mr. Townsend informed the PUCT that in another case they had filed the designation after the completion of construction and had anticipated doing that here as well, designating the division when it is known.

Chairman Walker replied that, under these circumstances, she felt it would be premature for her to issue an order telling the parties what their certificates were being modified to cover.

Mr. Townsend noted that, although it was being divided based on dollars spent, it would end at a certain place.

Commissioner D'Andrea believed the parties had a statutory right to divide the line 50/50, which he suggested “makes this harder.”

Chairman Walker asked 50/50 of what?

Mr. Taylor, representing Oncor, replied that the statute was “not that specific” but allows parties to reach an alternative arrangement. In this case, he noted there is a participation agreement that was previously entered into between Sharyland and LP&L that provides for how these projects are to be divided.

Chairman Walker asked whether the division is based on cost estimates or the actual cost at the end the project.

Oncor replied that it is based on the cost at the end of the project, adding that it is designed to be a true up at the end of the project. LP&L agreed.

Chairman Walker suggested that this would not allow for the cost to be known until June 2021.

Mr. Townsend stated that the costs would be completed before June 2021. He informed the Commission that a compliance docket would be the best solution for LP&L, was what they had envisioned, and would allow LP&L to designate a specific end point. LP&L informed the Commission that responsibility for each of the other lines was clear and this was the only line where a final adjustment would occur.

Commissioner D'Andrea noted that, before there was a statutory right, the Commission could just say “pick a spot” and pick wherever you like. He added that, although these particular parties have been very accommodating, this might not always be the case, suggesting that there might need to be a procedure for the future in case someone says “I have a right to 50/50 and I insist on it.”

The parties reported back later in the meeting. LP&L requested granting LP&L the line from Wadsworth to New Oliver and to Oncor the line from New Oliver to Farmland, adding that in the future the parties could amend or transfer certificate rights to shore up their agreement. LP&L clarified that it would have the 115-kV lines and the 345-kV line from Wadsworth to New Oliver and Oncor would have the others.

Background

On December 19, 2018, Sharyland Utilities, L.P. (Sharyland) and the City of Lubbock, acting by and through Lubbock Power & Light (LP&L) filed an application with the PUCT to amend its Certificate of Convenience and Necessity (CCN) for the proposed Wadsworth to New Oliver to Farmland 345-kilovolt (kV) transmission line in Lubbock and Lynn Counties (the WNF Line) and the proposed Southeast to New Oliver to Oliver 115-kV transmission line in Lubbock County, Texas (the SNO Line, and together with the WNF Line, the Projects). The projects will be routed through one of two locations for the proposed New Oliver Station, which will connect the WNF Line to the SNO Line.

The projects are necessary to implement the final order issued by the Commission in Docket No. 47576. On March 15, 2018, the Commission approved LP&L's proposal to transition a large portion of its system and load from the Southwest Power Pool (SPP) grid to the ERCOT grid under a transmission interconnection plan ERCOT developed, known as Option 4ow.

The SNO Line

The CCN Application proposed 14 alternative routes for the Southeast to New Oliver (SNO) Line. The SNO Line's alternative routes range in length from 14 miles to 26 miles and range in cost from approximately $18.5 million to $30.2 million, excluding station costs.

After reviewing the evidentiary record, the considerations set forth in PURA and the issues identified in the Commission's Preliminary Order, the Administrative Law Judges recommended approval of the SNO Modified 9 route.

The WNF Line

The CCN Application proposed 22 alternative routes for the Wadsworth to New Oliver to Farmland (WNF) Line. The WNF Line's alternative routes range in length from 42 miles to 53 miles and range in cost from $68.8 million to $84 million, excluding station costs.

After reviewing the evidentiary record, the considerations set forth in PURA, and the issues identified in the Commission's Preliminary Order, the Administrative Law Judges recommended approval of the Unopposed WNF Hearing Route.

The Unopposed WNF Hearing Route is wholly comprised of properly noticed and pre-filed segments contained in the CCN Application with the exception of a mutually agreed modification to segment A2 wholly within John Huffaker's property (Modification A2M-6). Modification A2M-6 does not require any additional landowner notices or consents.