Lubbock Power & Light and Southwestern Public Service Reach Agreement in Principle for LP&L to Exit SPP and Join ERCOT
Thursday morning, at a meeting of the Public Utility Commission of Texas, Lubbock Power & Light officials updated Public Utility Commission (PUC) commissioners on the status of proposed settlement agreements for LP&L to move a large portion of its electrical grid from the Southwest Power Pool (SPP) to ERCOT (Electric Reliability Council of Texas) in 2021.
Chris Brewster with LP&L says proposed terms have now been agreed to with Southwestern Public Service (SPS), aka Xcel Energy. "I'm also pleased to report that an agreement in principle has been reached on the SPP side of this transaction," Brewster said during the hearing.
He continued, "Just as of yesterday (Wednesday, Jan. 24), as between SPS and LP&L, it [the settlement agreement] involves an upfront payment as well as some kind of ancillary terms. My understanding is that the rest of the parties, at least TIEC [Texas Industrial Energy Consumers], and staff [ERCOT], and OPUC [Office of Public Utility Counsel], I believe, are supportive of that agreement. I believe they met this (Thursday) morning, just right before this meeting, to discuss some issues related to how that payment from Lubbock [Power & Light] would be reflected in rates or flow back to customers." No monetary figures were revealed by Brewster for the potential SPS agreement.
Last week, LP&L announced a settlement agreement with TIEC and OPUC for $110 million dollars over five years, and terms to that agreement may be modified before final PUC approval. Also, other Southwest Power Pool (SPP) stakeholders may provide input to the PUC, or even the FERC (Federal Energy Regulatory Commission), concerning LP&L's settlement with SPS. It is possible LP&L may have to make additional settlement agreements with other affected parties in the SPP.
Lubbock Power & Light will provide another update to the PUC, concerning settlement agreements, at their February 15th open meeting. No word on when the PUC would rule on LP&L's application to join ERCOT.
If LP&L's application to join ERCOT is accepted, 470 MW (mega watts) of electricity would transition to ERCOT on June 1, 2021, since SPS' wholesale contract to sell that amount of power to LP&L expires on May 31, 2021. A second SPS wholesale contract with LP&L for 170 MW of electricity expires in 2044, and that could be switched over to ERCOT at any time between 2021 and 2044.