|(a) Tariffs. Each transmission service provider (TSP)
shall file a tariff for transmission service to establish its rates
and other terms and conditions and shall apply its tariffs and rates
on a non-discriminatory basis. The tariff shall apply to all distribution
service providers (DSPs) and any entity scheduling the export of power
from the Electric Reliability Council of Texas (ERCOT) region. The
tariff shall not apply to any entity engaging in wholesale storage
as described by §25.501(m) of this title (relating to Wholesale
Market Design for the Electric Reliability Council of Texas) (storage
(b) Charges for transmission service delivered within
ERCOT. DSPs, excluding storage entities, shall incur transmission
service charges pursuant to the tariffs of the TSP.
(1) A TSP's transmission rate shall be calculated as
its commission-approved transmission cost of service divided by the
average of ERCOT coincident peak demand for the months of June, July,
August and September (4CP), excluding the portion of coincident peak
demand attributable to wholesale storage load. A TSP's transmission
rate shall remain in effect until the commission approves a new rate.
The TSP's annual rate shall be converted to a monthly rate. The monthly
transmission service charge to be paid by each DSP is the product
of each TSP's monthly rate as specified in its tariff and the DSP's
previous year's average of the 4CP demand that is coincident with
the ERCOT 4CP.
(2) Payments for transmission services shall be consistent
with commission orders, approved tariffs, and §25.202 of this
title (relating to Commercial Terms for Transmission Service).
(c) Transmission cost of service. The transmission
cost of service for each TSP shall be based on the expenses in Federal
Energy Regulatory Commission (FERC) expense accounts 560-573 (or accounts
with similar contents or amounts functionalized to the transmission
function) plus the depreciation, federal income tax, and other associated
taxes, and the commission-allowed rate of return based on FERC plant
accounts 350-359 (or accounts with similar contents or amounts functionalized
to the transmission function), less accumulated depreciation and accumulated
deferred federal income taxes, as applicable.
(1) The following facilities are deemed to be transmission
(A) power lines, substations, reactive devices, and
associated facilities, operated at 60 kilovolts or above, including
radial lines operated at or above 60 kilovolts, except the step-up
transformers and a protective device associated with the interconnection
from a generating station to the transmission network;
(B) substation facilities on the high side of the transformer,
in a substation where power is transformed from a voltage higher than
60 kilovolts to a voltage lower than 60 kilovolts;
(C) the portion of the direct-current interconnections
with areas outside of the ERCOT region (DC ties) that are owned by
a TSP in the ERCOT region, including those portions of the DC tie
that operate at a voltage lower than 60 kilovolts; and
(D) capacitors and other reactive devices that are
operated at a voltage below 60 kilovolts, if they are located in a
distribution substation, the load at the substation has a power factor
in excess of 0.95 as measured or calculated at the distribution voltage
level without the reactive devices, and the reactive devices are controlled
by an operator or automatically switched in response to transmission
(E) As used in subparagraphs (A) - (D) of this paragraph,
reactive devices do not include generating facilities.
(2) For municipally owned utilities, river authorities,
and electric cooperatives, the commission may permit the use of the
cash flow method or other reasonable alternative methods of determining
the annual transmission revenue requirement, including the return
element of the revenue requirement, consistent with the rate actions
of the rate-setting authority for a municipally owned utility.
(3) For municipally owned utilities, river authorities,
and electric cooperatives, the return may be determined based on the
TSP's actual debt service and a reasonable coverage ratio. In determining
a reasonable coverage ratio, the commission will consider the coverage
ratios required in the TSP's bond indentures or ordinances and the
most recent rate action of the rate setting authority for the TSP.
(4) A municipally owned utility that is required to
apply for a certificate of public convenience and necessity to construct,
install, or extend a transmission facility within ERCOT pursuant to §25.101
of this title (relating to Certification Criteria) is entitled to
recover, through the utility's wholesale transmission rate, reasonable
payments made to a taxing entity in lieu of ad valorem taxes on that
transmission facility, provided that:
(A) The utility enters into a written agreement with
the governing body of the taxing entity related to the payments;
(B) The amount paid is the same as the amount the utility
would have to pay to the taxing entity on that transmission facility
if the facility were subject to ad valorem taxation;
(C) The governing body of the taxing entity is not
the governing body of the utility; and
(D) The utility provides the commission with a copy
of the written agreement and any other information that the commission
considers necessary in relation to the agreement.
(5) The commission may adopt rate-filing requirements
that provide additional details concerning the costs that may be included
in the transmission costs and how such costs should be reported in
a proceeding to establish transmission rates.
(d) Billing units. No later than December 1 of each
year, ERCOT shall determine and file with the commission the current
year's average 4CP demand for each DSP, or the DSP's agent for transmission
service billing purposes, as appropriate, excluding the portion of
coincident peak demand attributable to wholesale storage load. This
demand shall be used to bill transmission service for the next year.
The ERCOT average 4CP demand shall be the sum of the coincident peak
of all of the ERCOT DSPs, excluding the portion of coincident peak
demand attributable to wholesale storage load, for the four intervals
coincident with ERCOT system peak for the months of June, July, August,
and September, divided by four. As used in this section, a DSP's average
4CP demand is determined from the total demand, coincident with the
ERCOT 4CP, of all customers connected to a DSP, including load served
at transmission voltage, but excluding the load of wholesale storage
entities. The measurement of the coincident peak shall be in accordance
with commission-approved ERCOT protocols.
(e) Transmission rates for exports from ERCOT. A transmission
service charge for exports of power from ERCOT must be assessed to
transmission service customers for transmission service within the
boundaries of the ERCOT region, in accordance with this section and
the ERCOT protocols.
(1) A transmission service customer must be assessed
a transmission service charge for the use of the ERCOT transmission
system in exporting power from ERCOT based on scheduled exports and
the rates established under subsections (c) and (d) of this section.
The intervals must consist of one hour.
(2) The hourly transmission rate for exports from ERCOT
will be the TSP's annual rate established under subsections (c) and
(d) of this section divided by 8760.
(3) The entity scheduling the export of power over
a DC tie is solely responsible to the TSP for payment of transmission
service charges under this subsection.
(4) Beginning with the January 2023 reporting month,
ERCOT must file a public report with the commission stating the total
amount of energy imported and the total amount of energy exported
over each DC tie for the calendar month. The report must also include
the total amount of energy exported from the ERCOT region during the
reporting month and each of the preceding 11 calendar months, reported
by scheduling entity. Each report must be filed within 45 days of
the end of the reporting month.
(f) Transmission revenue. Revenue from the transmission
of electric energy out of the ERCOT region over the DC ties that is
recovered under subsection (e) of this section shall be credited to
all transmission service customers as a reduction in the transmission
cost of service for TSPs that receive the revenue.
(g) Revision of transmission rates. Each TSP in the
ERCOT region shall periodically revise its transmission service rates
to reflect changes in the cost of providing such services. Any request
for a change in transmission rates shall comply with the filing requirements
established by the commission under this section.
(h) Interim Update of Transmission rates.
(1) Frequency. Each TSP in the ERCOT region may apply
to update its transmission rates on an interim basis not more than
once per calendar year to reflect changes in its invested capital.
Upon the effective date of an amendment to §25.193 pursuant to
an order in Project Number 37909, Rulemaking Proceeding to Amend P.U.C.
Subst. R. 25.193, Relating to Distribution Service Provider Transmission
Cost Recovery factors (TCRF), that allows a distribution service provider
to recover, through its transmission cost recovery factor, all transmission
costs charged to the distribution service provider by TSPs, each TSP
in the ERCOT region may apply to update its transmission rates on
an interim basis not more than twice per calendar year to reflect
changes in its invested capital. If the TSP elects to update its transmission
rates, the new rates shall reflect the addition and retirement of
transmission facilities and include appropriate depreciation, federal
income tax and other associated taxes, and the commission authorized
rate of return on such facilities as well as changes in loads. If
the TSP does not have a commission-authorized rate of return, an appropriate
rate of return shall be used.
(2) Reconciliation. An update of transmission rates
under paragraph (1) of this subsection shall be subject to reconciliation
at the next complete review of the TSP's transmission cost of service,
at which time the commission shall review the costs of the interim
transmission plant additions to determine if they were reasonable
and necessary. Any amounts resulting from an update that are found
to have been unreasonable or unnecessary, plus the corresponding return
and taxes, shall be refunded with carrying costs determined as follows:
for the time period beginning with the date on which over-recovery
is determined to have begun to the effective date of the TSP's rates
set in that complete review of the TSP's transmission cost of service,
carrying costs shall be calculated using the same rate of return that
was applied to the transmission investments included in the update.
For the time period beginning with the effective date of the TSP's
rates set in that complete review of the TSP's transmission cost of
service, carrying costs shall be calculated using the TSP's rate of
return authorized in that complete review.
(3) Future consideration of effect on TSP's financial
risk and rate of return. For a TSP that has increased its rates pursuant
to paragraph (1) of this subsection, the commission may, in setting
rates in the next complete review of the TSP's transmission cost of
service, expressly consider the effects of reduced regulatory lag
resulting from the interim updates to the TSP's rates and the concomitant
impact on the TSP's financial risk and rate of return.
(4) Commission processing of application. The commission
shall process an application filed pursuant to paragraph (1) of this
subsection in the following manner.
(A) Notice and intervention deadline. The applicant
shall provide notice of its application to all parties in the applicant's
last complete review of the applicant's transmission cost of service
and all of the distribution service providers listed in the last docket
in which the commission set the annual transmission service charges
for the Electric Reliability Council of Texas. The intervention deadline
shall be 21 days from the date service of notice is completed.
(B) Sufficiency of application. A motion to find an
application materially deficient shall be filed no later than 21 days
after an application is filed. The motion shall be served on the applicant
by hand delivery, facsimile transmission, or overnight courier delivery,
or by e-mail if agreed to by the applicant or ordered by the presiding
officer. The motion shall specify the nature of the deficiency and
the relevant portions of the application, and cite the particular
requirement with which the application is alleged not to comply. The
applicant's response to a motion to find an application materially
deficient shall be filed no later than five working days after such
motion is received. If within ten working days after the deadline
for filing a motion to find an application materially deficient, the
presiding officer has not filed a written order concluding that material
deficiencies exist in the application, the application is deemed sufficient.
(C) Review of application. A proceeding initiated pursuant
to paragraph (1) of this subsection is eligible for disposition pursuant
to §22.35(b)(1) of this title (relating to Informal Disposition).
If the requirements of §22.35 of this title are met, the presiding
officer shall issue a notice of approval within 60 days of the date
a materially sufficient application is filed unless good cause exists
to extend this deadline or the presiding officer determines that the
proceeding should be considered by the commission.
(5) Filing Schedule. The commission may prescribe a
schedule for providers of transmission services to file proceedings
to revise the rates for such services.
(6) DSP's right to pass through changes in wholesale
rates. A DSP may expeditiously pass through to its customers changes
in wholesale transmission rates approved by the commission, pursuant
to §25.193 of this title (relating to Distribution Service Provider
Transmission Cost Recovery Factors (TCRF)).
(7) Reporting requirements. TSPs shall file reports
that will permit the commission to monitor their transmission costs
and revenues, in accordance with any filing requirements and schedules
prescribed by the commission.
|Source Note: The provisions of this §25.192 adopted to be effective April 13, 1999, 24 TexReg 2874; amended to be effective September 30, 1999, 24 TexReg 8162; amended to be effective December 29, 1999, 24 TexReg 11722; amended to be effective June 20, 2001, 26 TexReg 4440; amended to be effective August 25, 2010, 35 TexReg 7195; amended to be effective April 18, 2012, 37 TexReg 2613; amended to be effective July 5, 2016, 41 TexReg 4805; amended to be effective December 20, 2022, 47 TexReg8267