City Council, LP&L Electric Utility Board Approve Stipulations for Proposed ERCOT Transition

by: News Release & Posted By Staff | newsweb@everythinglubbock.com

Posted: Feb 8, 2018 / 08:34 PM CST

Updated: Feb 8, 2018 / 08:44 PM CST

The following is a news release from the City of Lubbock:

During the February 8, 2018 meeting, the Lubbock City Council provided approval for Lubbock Power and Light (LP&L) to move forward with stipulations agreed upon by LP&L and stakeholders in the Electric Reliability Council of Texas (ERCOT) and the Southwest Power Pool (SPP) regarding the City’s proposed entry into ERCOT. This will now be provided to the Public Utility Commission of Texas (PUC) for consideration at their open meeting on Thursday, February 15, which is the next step in gaining approval to enter ERCOT.

The Council is pleased with the successful negotiations represented in the agreed upon stipulations. Council members are confident that even with two sets of payments in the stipulations, the transition into ERCOT will result in cost savings for affected LP&L customers.

Council members thank the Electric Utility Board, LP&L staff, and consultants for their quick and positive work. The Council continues to look forward to favorable consideration by the PUC.

(News release from City of Lubbock)

The following is a news release from Lubbock Power & Light:

This week, Lubbock Power & Light (LP&L) continued its efforts to move the majority of its customers from the Southwest Power Pool (SPP) to the Electric Reliability Council of Texas (ERCOT).

This move is a process rather than a single event and this week’s efforts move the process forward. There are both savings and costs associated with this change and LP&L states the near and long-term outlook shows a net savings to Lubbock ratepayers.

At the conclusion of the Public Utility Commission (PUC) Open Hearing in January, the PUC commissioners asked all interested parties in the ERCOT and SPP system to continue working on an agreement that reasonably holds all ratepayers harmless related to this prospective move by LP&L. An agreement has been reached between LP&L and stakeholders in ERCOT and SPP. The LP&L Electric Utility Board and the Lubbock City Council voted unanimously this week to move forward with the agreement. The agreement will now be presented to the PUC at its meeting on February 15 where it is expected to deliberate on Lubbock’s request for integration.

According to the terms of the agreement, upon Lubbock’s integration to ERCOT on June 1, 2021, LP&L will pay $22 million each year for the first five years to mitigate integration costs and that amount will be credited to ERCOT wholesale transmission customers. Upon integration, LP&L will make a one-time payment of $24 million to SPS (Xcel Energy); this payment is for SPS’s Texas retail, wholesale transmission, and New Mexico retail jurisdictions. The anticipated annual savings LP&L expects to achieve by moving the majority of the LP&L system to ERCOT exceeds the agreed-upon payments.

The agreement reached by LP&L, and the interested parties in the ERCOT and SPP system sets Lubbock on the best possible path forward that saves their ratepayers money and opens the door to retail electric competition in Lubbock.

(News release from Lubbock Power & Light)