Today, Xcel Energy filed a request with the Federal Energy Regulatory Commission asking for approval of an interconnection switching fee in the event Lubbock Power & Light disconnects from the Xcel Energy transmission system and Southwest Power Pool regional power grid to interconnect a portion of the city’s system with the Electric Reliability Council of Texas. LP&L has proposed to move approximately 70 percent of its retail electric loads to ERCOT as early as June 2019.
The fee, proposed to be collected either as a one-time payment or by annual payments over a period of up to 10 years, would recover the costs of transmission infrastructure Xcel Energy has planned and constructed since the 1980s to deliver wholesale power to LP&L. The company has invested tens of millions of dollars in high-voltage transmission infrastructure, and will be investing in significant additional transmission infrastructure through 2019, in order to provide reliable transmission service to LP&L, with the reasonable expectation of collecting transmission service revenue from moving power to LP&L. If LP&L leaves the SPP regional grid, the costs of infrastructure installed to serve LP&L would be shifted to Xcel Energy’s remaining retail and wholesale customers, a move that will increase their rates unless the interconnection switching fee is implemented.
Xcel Energy requests that FERC act on the filing by September 2016. The interconnection switching fee is estimated at $88.7 million if paid as a one-time fee, based on 2015 costs. The actual amount Xcel Energy would recover through the interconnection switching fee would be determined at a future date based on costs in the final year before LP&L leaves the SPP regional grid.
(News release from Xcel Energy)
