Resolution - Lubbock Power & Light: Consider a resolution authorizing the attorneys for the City of Lubbock, acting by and through Lubbock Power & Light, in the event a Stipulation and/or Settlement Agreement, whether unanimous or non-unanimous, is reached in the future, to execute a Stipulation and/or Settlement, whether unanimous or non-unanimous, within the parameters set forth in the resolution, resolving all issues related to and regarding the contested case styled Application of City of Lubbock, acting by and through Lubbock Power & Light, for Authority to Connect the Remaining Portion of its Load with the Electric Reliability Council of Texas and for Approval of Settlement Agreement, PUC Docket No. 53529, proceeding before the Public Utility Commission of Texas. |
Currently, approximately 30% of the City of Lubbock and its municipally owned electric utility, Lubbock Power & Light (“LP&L”) is served with wholesale power delivered through the Southwest Power Pool Regional Transmission Organization (“SPP”). The other 70% of LP&L’s load has been integrated into the Electric Reliability Council of Texas (“ERCOT”). On or about May 27, 2021, the Electric Utility Board, by resolution No. EUB 2021-R0038, determined that the customers of LP&L would be best served by a migration of LP&L’s remaining load (the “Remaining Load”) from SPP to ERCOT and authorized the Director of Electric Utilities to execute or cause to be executed, any and all pleadings and other filings to cause the migration of the Remaining Load from SPP to ERCOT. Further, on or about May 27, 2021, the Electric Utility Board and the City Council of the City of Lubbock, by resolutions No. EUB 2021-R0039 and 2021-R0201, respectively, approved that certain Settlement Agreement (“Settlement Agreement”) by and between Southwestern Public Service Company and LP&L, which stated that the Settlement Agreement would not become effective unless and until it is approved by the Public Utility Commission of Texas (“PUC”), and the parties agreed to request approval of the Settlement Agreement as part of the migration of the Remaining Load to ERCOT. On April 27, 2022, LP&L filed its Application of the City of Lubbock, acting by and through Lubbock Power & Light, for Authority to Connect the Remaining Portion of its Load with the Electric Reliability Council of Texas and for approval of Settlement Agreement with the PUC to address both the Remaining Load and the Settlement Agreement, which is proceeding under PUC Docket No. 53529 (the “PUC Proceeding”). Multiple parties have intervened in the PUC Proceeding, including Southwestern Public Service, the Office of Public Utility Counsel, Texas Industrial Energy Consumers, the Electric Reliability Council of Texas, Golden Spread Electric Cooperative, Inc., and the Alliance for Retail Markets (collectively, “Intervenors”). The PUC Staff is also participating in the PUC Proceeding. Currently, settlement negotiations are ongoing between Intervenors, LP&L, and PUC Staff. This resolution authorizes LP&L’s outside counsel to enter into a Stipulation and/or Settlement Agreement regarding this matter, whether unanimous or non-unanimous, so long as certain conditions are met. Those conditions are as follows:
- The Stipulation and/or Settlement permits the Remaining Load to migrate to ERCOT no later than June 15, 2023, and no further payments or hold harmless provisions are required of LP&L for this transition.
- The Stipulation and/or Settlement states that the migration of the Remaining Load into ERCOT is in the public interest.
- The Stipulation and/or Settlement does not change, alter, or otherwise modify the Settlement Agreement by and between Southwestern Public Service Company and LP&L, dated May 27, 2021.
- The Stipulation and/or Settlement states that the Settlement Agreement by and between Southwestern Public Service Company and LP&L dated May 27, 2021, is reasonable and in the public interest.
- The Stipulation and/or Settlement is approved in substance by the Director of Electric Utilities and in form by the General Counsel of LP&L.
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In anticipation of the full integration to ERCOT, LP&L and SPS agreed to terminate the Purchased Power Agreement (PPA) and the Transmission Letter Agreement. Under the terms of the Settlement Agreement, LP&L intends to pay a lump sum, totaling $77.5 million in accordance with the agreement, to SPS as negotiated compensation for power and transmission-related shifted costs under the PPA. |