Title
Draft Resolution - Approval to Amend Tariff and Business Rules - Transmission Cost of Service (TCOS) Pass Through Charge - N Mack/D Thompson
Other Info
Submitted By: Audri Nelson on behalf of Markets
Department: Markets
Financial Impact and Cost/Benefit Considerations: Expenditure of Cooperative funds is not anticipated to be impacted; expenditures of staff time is not anticipated to be impacted. Recommended changes to Transmission Cost of Service Charge allows the Cooperative to better align this rate with the Cooperative’s costs to provide service.
Discussion
Transmission access charges are incurred by PEC to access the ERCOT transmission system. These charges that are billed to PEC from all transmission owners in ERCOT are regulated and approved by the Public Utility Commission of Texas (Commission). PEC pays these charges based on the Cooperative’s Four Coincident Peak (4CP) established during the previous summer for each of the months of June, July, August and September at the same time as the greatest ERCOT system 15-minute demand for the months of June, July, August and September.
These transmission access charges have increased significantly over recent years and are forecast to continue to increase. In 2021, PEC’s Members will pay over $90M for transmission access.
PEC recovers these cost from its Members via the Transmission Cost of Service (TCOS) Charge. Each year, during its budget cycle, PEC determines whether the existing TCOS charge per kWh needs to be adjusted to recover the increasing costs for transmission access.
Pursuant to the Cooperative’s Rate Policy and as part of the 2022 Rate Plan approved in November 2021, the following changes are proposed with corresponding amendments to the Tariff and Business Rules:
- Update the Transmission Cost of Service Charge twice a year the first of June and October each year, instead of once a year during the budget cycle
- Change the name to reflect the pass-through nature of the charge
Tariff and Business Rules amendments and effective dates are shown below:
• Section 500.1.9, 500.1.9.1, and 500.1.9.2 - effective March1, 2022
• Corresponding changes throughout Section 500 to reflect name changes
Body
BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE that the Cooperative approves the amendments to the Tariff and Business Rules as attached hereto with such changes, if any, as were approved by the Board, to become effective upon Board approval, unless otherwise specified in the Tariff and Business Rules; and
BE IT FURTHER RESOLVED that the Chief Executive Officer, or designee, is authorized to take all such actions as needed to implement this resolution.