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Texas PUC Staff Oppose NextEra Acquisition Of Rayburn Line

August 10,2018



Staff of the Public Utility Commission of Texas have filed testimony recommending that the PUC deny the application of NextEra Energy Transmission Southwest, LLC (NEET SW) to acquire, from Rayburn Country Electric Cooperative, Inc. (Rayburn), the Certificate of Convenience and Necessity (CCN) rights for the approximately 30-mile long Jacksonville to Overton 138 kilovolt (kV) transmission line in Cherokee, Smith and Rusk Counties.

Staff said in testimony that under the proposed transaction:

• Restoration times associated with outages of the Jacksonville to Overton line will increase and, therefore, cause a reduction in reliability.

• While the burden of the O&M expenses associated with the Jacksonville-Overton line will be removed from Rayburn’s customers, they will not disappear. Other ratepayers will absorb these O&M costs.

• The O&M expenses associated with the Jacksonville to Overton line will increase as a result of the proposed transaction.

Staff recommended that the application, as proposed, be denied

If the proposed transaction is approved, Staff recommended that the Commission:

1. require that NEET SW provide a service center in proximity to the Jacksonville to Overton line such that the response times to outages will be comparable to response times currently received by that line;

2. prohibit the costs for the establishment of the additional service center recommended in (1) above from being recouped from customers in order to minimize the increase in costs to ratepayers from this transaction.

Staff noted that under the change in ownership, the distance from the closest service center for the line (a Lonestar (NextEra) facility) is 7 times farther from the Jacksonville to Overton line than Rayburn’s closest service center -- over 110 miles away versus 16 miles away.

On average, Lonestar’s service centers are more than 3 times farther away.

Staff noted that the PUC's rules require "adequately trained and experienced personnel" throughout a utility’s service area, and said that, "NEET SW will not have any personnel located within the area of the Jacksonville to Overton line."

"[O]wnership of this line by NEET SW will result in a decrease in reliability as compared to the reliability of service that the line provides today," Staff said in testimony, citing restoration times given the service facilities' locations

Docket 48071

Tags:
Texas   M&A   Transmission  

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