During yesterday's Texas PUC open meeting, PUC Chair Donna Nelson discussed a rehearing request filed by Southern Cross Transmission concerning the PUC's order conditioning the energizing of a DC tie between the line and ERCOT on various protections for ERCOT customers.

At a high level, the PUC prohibited the energization of a Garland project associated with the DC tie until ERCOT: (a) evaluates what additional ancillary services, if any, are necessary for the reliable interconnection of the Southern Cross DC tie; and (b) implements any necessary modifications to ancillary service procurement practices or procedures.

Among other protections, the PUC had ordered that any additional associated costs that may arise because of the Garland project or the Southern Cross DC tie that would otherwise be borne by ERCOT ratepayers shall instead be borne by Southern Cross Transmission or Rusk Interconnection.

In its rehearing request, Southern Cross alleged that the PUC's order, among other things, violated the dormant commerce clause of the U.S. Constitution

Discussing the case at the open meeting, Nelson said, "I continue to be disappointed in Southern Cross's posture in this docket."

"Southern Cross started a dialogue with me and my fellow Commissioners about this proposal several years ago. They made broad representations about the benefit it would have to Texans," Nelson said

"From the very first conversation I had with them, I reminded them that customers within ERCOT have paid and are continuing to pay for the cost of the over $7 billion CREZ lines. It was clear to me then and is clear to me now, and to everyone, that without the building of these CREZ lines, Southern Cross's proposed DC tie would not happen," Nelson said

Nelson noted that Southern Cross's DC tie is located on the eastern side of ERCOT, while it is seeking to export wind power from West Texas and the Panhandle, and such export would not be possible without the CREZ lines paid by ERCOT customers

"I find it unconscionable for our ratepayers to pay for those CREZ lines and for someone who's using those lines not to pay their fair share," Nelson said

The Commission indicated it would not grant rehearing in terms of substantively modifying its order. Commissioners rejected Southern Cross's commerce clause arguments

The Commission indicated it will make non-substantive changes to the order, concerning various language.

Nelson, however, stressed that the cost causation principles set forth in the order will not change.

While cost allocation may vary in the future, based on changes in underlying data, Nelson said that cost causers will bear costs associated with their activity.