The Public Utility Commission of Texas on Thursday approved Lubbock’s request to join ERCOT (the Electric Reliability Council of Texas).
The request was described in public records as the “Application of the City of Lubbock Through Lubbock Power and Light for Authority to Connect a Portion of its System with the Electric Reliability Council of Texas.”
During a public meeting of the PUC Thursday morning, a few minor technical changes were made to the application. It was approved with the changes.
LP&L has contractual obligations with Xcel Energy that would not, at this time, allow for a complete move into ERCOT. LP&L is currently in the Southwest Power Pool but most of Texas is with ERCOT.
City officials believe that moving to ERCOT will provide a cost-savings in the long run. LP&L will pay $22 million a year for five years to reimburse ERCOT wholesale customers for “integration costs.”
LP&L will make a one-time payment of $24 million to Xcel Energy.
Related Story: Public Utility Commission Sets Path for Lubbock’s Entry to the ERCOT System
The following is a written statement from Lubbock Power and Light:
PUBLIC UTILITY COMMISSION OF TEXAS APPROVES LUBBOCK’S ENTRY TO THE ERCOT SYSTEM
LUBBOCK (March 08, 2018) – The Public Utility Commission of Texas (PUCT) has approved the entry of Lubbock Power & Light (LP&L) to the Electric Reliability Council of Texas (ERCOT). The approval of Lubbock’s integration to the ERCOT sets the path for Lubbock to be the first major Texas city to integrate to the ERCOT market in nearly twenty-five years.
“Joining our fellow Texans as part of the ERCOT system accomplishes the long-term goals we set forth when we began this process over three years ago. It provides our customers a diversified portfolio of reliable and affordable Texas power for generations to come,” said LP&L Director David McCalla. “Moving to ERCOT constitutes an important milestone for our utility and we appreciate the diligence shown by the commissioners throughout this process.”
LP&L submitted its application to integrate approximately 70 percent of its system into ERCOT on September 1, 2017 and in January the PUCT conducted a Hearing on the Merits to deliberate on whether Lubbock’s integration was in the public interest of all Texas ratepayers. Today’s approval by the commissioners of the PUCT allows Lubbock to begin the next phase of the process which will include the approval and construction of transmission facilities in order to connect Lubbock to the ERCOT grid by June 1, 2021.
“This is an important day for the City of Lubbock. We are securing our future energy needs for our ratepayers and putting our community in a position to continue its economic vitality for years to come,” said Lubbock Mayor Dan Pope. “Joining the ERCOT market means partnering with our fellow Texans in one of the most competitive electric markets in the country. I am excited for the benefits that will be seen by our citizens as a result of the hard work of leadership at LP&L and look forward to moving our citizens closer to the retail competitive environment.”
The transition by Lubbock’s municipal electric utility puts the city on the best possible path forward saving its ratepayers money and opening the door to retail electric competition in Lubbock. Based on third-party studies, the anticipated annual savings achieved by moving the majority of LP&L’s system to ERCOT exceeds any stipulated agreements reached between LP&L and interested parties.
“With the decision today by the Public Utility Commission of Texas, we now enter the next phase of a project,” said LP&L Electric Utility Board Chairman Greg Taylor. “We are looking to the future as we work to interconnect to the ERCOT market and bring to Lubbock ratepayers the diverse energy portfolio and dynamic choice that can only be offered by the electric grid right here in Texas. I am proud of the work of LP&L staff and city leaders in getting us to where we are today and now we charge forward to complete this vital project for our community.”
Further information on the full impact of Lubbock’s integration to the ERCOT market, including stipulated agreements by interested parties in LP&L’s public interest case and an independent cost/benefit analysis, is located at LPandL.com/ERCOT.
