PowerPoint Presentation by 1UyoiN55

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									    Hearings on PURPA's
      New Standards
A time to be silent and a time to speak
      A presentation to the TPPA Legal Seminar


               Paul Gonzalez
               Senior Counsel
                                         November 3, 2006
             Overview

•Recap of PURPA &
 EPAct 2005
•Implementation
 Issues

                    2
                                   PURPA

• Public Utilities Regulatory Policies
  Act of 1978, 16 USC §1611, et seq.
  (PURPA §101)
  – Purposes:
    •Encourage energy conservation
    •Optimal efficiency of energy resources
    •Equitable retail rates for consumers

                                              3
                                        PURPA
• Standards applicable to retail providers
  with annual sales over 500 million KWh
• State regulatory authority and each
  “nonregulated electric utility”
  consider standards:
  – Public notice and hearing
  – Adopt/modify/reject standards
  – Written determination if rejected

                                            4
                         EPAct 2005
Energy Policy Act of 2005 added
 standards to 16 USC §1621(d)
 (PURPA §111(d)):
 (11) Net metering
 (12) Fuel sources
 (13) Fossil fuel generation efficiency
 (14) Time-based metering and
   communications (aka “smart” or “advanced”
   metering)
 (15) Interconnection                     5
                             EPAct 2005
Requires a determination 1-year from start
 (August 8 to August 8), but starting
 years differ:
• 2006: Smart metering*, interconnection
• 2007: Net metering, fuel sources, fossil fuel
  generation efficiency
Failure to comply
• No statutory monetary penalties
• Enforcement in state court
                                             6
              Implementation

•Texas Actors
 – PUCT (state regulatory authority)
 – 18 Electric Cooperatives
 – According to DOE, 9 MOUs:
   •Austin Energy, Brownsville PUB,
    Bryan, College Station, CPS Energy,
    Denton, Garland, Lubbock, NBU
                                      7
                   Implementation
• Threshold determination
  – A time to speak?
    • PURPA supplements state law
    • Prior State Action trumps need for new
      consideration: rules, contested cases, tariff
      approvals
    • Smart metering – 3 years
  – Document how standard and process of
    determination were comparable
    • “Substantially conformed” – court review
                                                      8
               PUC Docket No. 32854, Consideration of
              Electric Rulemaking Standards Under the
                          Public Utilities Regulatory Act


• Project to consider 3 standards added
  by EPAct 2005:
  – (1) net metering
  – (2) smart metering; and
  – (3) interconnection standards
• Six questions for comment
  – Have we done enough? (1-4)
  – If not, what process should we use? (5)
  – Different approach needed for areas
    where there is no retail choice? (6)              9
                     PUC Docket No. 32854, Consideration of
                    Electric Rulemaking Standards Under the
                                Public Utilities Regulatory Act

• Response to scoping questions (5-6)
  interesting:
   – 5. What process should we use?
     • Most commentators agree with the PUC’s
       position on rulemaking
     • Use of pending dockets encouraged
  – 6. Different approach needed for areas
    where there is no retail choice?
     • Differences between non-ERCOT and ERCOT
       areas noted, e.g., some standards inapplicable
       to TDUs
     • Difference between NOIE areas and competitive
       areas expressly noted:
        – TEC – “We’ll do our own and report back to you”
        – AEP – Supports uniform federal standards          10
                        Net Metering
• Elements: Available upon request
• Potential goals: conserving utility’s
  energy, equitable rates
• Considerations: implementation costs,
  pricing effects on other customers, effect
  on generation planning, experience to-
  date (see Interconnection)
• Docket Nos. 32854, 24365, 23220
  (approving Protocols), 29218; Subst. R.
  25.242, 25.211, 25.212; PUC-approved
  tariffs (outside ERCOT)
                                           11
                   Smart Metering
• Elements: TOU, CPP, RTP, DSM
• Potential goals: decrease peak demand,
  mitigate spikes, increase reliability,
  leverage of capacity, lower customer
  bills, lower emissions
• Considerations: implementation costs,
  uniform application, class demographics,
  potential consequences, education,
  experience to-date
• Docket Nos. 32854, 31418 (report filed
  9/29/06), 32129, 32853; Protocol §18
  and Load Profiling Guides; Subst. R.
  25.131
                                         12
                    Interconnection
• Elements: Available upon request
• Potential goals: defer capacity increases,
  meet standard (IEEE 1547), promote
  alternative resources, increase reliability
• Considerations: safety, comparable
  standards, testing/certification, call for
  uniformity across jurisdictions,
  experience to-date
• Docket Nos. 32854; Subst. R. 25.242,
  25.211, 25.212

                                                13
                       A time to be silent and a
                                time to speak…

• Are one or more hearings needed?
• What sort of hearing and process?
• Evaluation in light of other potential
  changes:
  – Market changes
  – Legislative session (“uniformity”)
• Responses to customers
  –   Differences from previous hearing process
  –   Public counsel
  –   Differences with other utilities
  –   Possible impact on smaller MOUs/Coops
• Opportunity to re-visit other standards?
                                                  14
  A time to be silent and a
           time to speak…




Questions?



                        15
                 Ecclesiastes 3:1-3, 7, 22
                    (New American Bible translation)

There is an appointed time for everything, and
  a time for every purpose under the heavens.
A time to be born, and a time to die; a time to
  plant, and a time to uproot the plant.
A time to kill, and a time to heal; a time to tear
  down, and a time to build.
A time to rend, and a time to sew; a time to be
  silent, and a time to speak.
And I saw that there is nothing better for a
  man than to rejoice in his work; for this is
  his lot. Who will let him see what is to come
  after him?                                   16
     Paul M. Gonzalez
       Senior Counsel
      (210) 353-3169
   (210) 353-6826 (fax)
   (210) 347-9640 (cell)
PMGonzalez@CPSEnergy.com


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