Staff of the Texas PUC have filed a motion for clarification concerning a recent PUCT order approving a generator acquisition transaction in which Commissioners discussed, during the open meeting, the proper calculation of the capacity owned by a generator

As reported by EnergyChoiceMatters.com, in two memos in advance of a June open meeting, Texas PUC Chairman DeAnn Walker recommended that a rulemaking be opened to address how a generator's capacity is counted for purposes of compliance with various market share thresholds and limitations under PURA

In response to one of the final orders at issue (Docket 48162), Staff sought clarification regarding the proper methodology for determining the percentage share of installed generation capacity owned and controlled by a power generation company and its affiliates after the completion of a proposed transaction under PURA § 39.158.

Staff noted that Staff uses the discounted nameplate capacity for non-dispatchable renewable generating units (inclusive of CDR capacity credits) to estimate the total installed generation capacity within ERCOT.

Based upon the discussion at the open meeting and the orders adopted by the Commission, Staff said that it understands that it should not rely on the discounted nameplate capacity for non-dispatchable renewable generating units to calculate the generation capacity owned and controlled by an applicant and its affiliates unless the record contains data supporting the conclusion that the discounted nameplate capacity is the actual capacity during the most recent peak season. Instead, Staff understands that Staff should use the nameplate capacity or the actual capacity for the most recent peak season if supported by data.

However, changing the capacity to nameplate for all non-dispatchable renewable generation may have unintended consequences, Staff said

"Using nameplate capacity for the denominator has the effect of increasing the amount of total installed capacity for the power region. A larger total means a larger denominator in the share-of-installed-capacity calculation, which could allow a generator to own more generation than previously possible under the 20% limitation in PURA § 39.154. This could also result in approval of an application under PURA § 39.158 that would have been denied for failure to comply with the 20% limitation. For example, if the total installed generation in ERCOT without applying CDR capacity credits is 108,000 MW, and an applicant owned 20,000 MW (without applying CDR capacity credits), its percentage share of installed generation would be 18.5%. However, if the total installed generation capacity in ERCOT with CDR capacity credits applied is 87,000 MW, and the applicant owned 20,000 MW (applying CDR capacity credits), its percentage share of installed generation capacity would be 23%," Staff said

"Due to these possible results, Staff requests clarification to ensure that percentage share of installed generation capacity is calculated in a consistent manner across all applications submitted pursuant to PURA § 39.158," Staff said

Tags:
Texas   ERCOT   M&A  

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