Electricity Markets

Texas PUC OKs Lubbock Power & Light shift to ERCOT

The Public Utility Commission of Texas on March 8 approved a plan under which Lubbock Power & Light will move most of its system into the Electric Reliability Council of Texas and away from the Southwest Power Pool.

The approval from the PUCT “sets the path for Lubbock to be the first major Texas city to integrate to the ERCOT market in nearly twenty-five years,” LP&L noted. Its move into ERCOT is part of its plan to provide retail electric choice for its customers.

The transition by Lubbock’s public power utility “puts the city on the best possible path forward, saving its ratepayers money and opening the door to retail electric competition in Lubbock,” LP&L said in a March 8 news release.

Based on third-party studies, the anticipated annual savings achieved by moving the majority of LP&L’s system to ERCOT exceeds any stipulated agreements reached between LP&L and interested parties. 

LP&L has identified several advantages it believes will be provided to Lubbock ratepayers by joining ERCOT.

They include eliminating the need to construct a presumed natural gas-fired power plant costing anywhere from $350 million to $700 million by providing access to 550 generation units and more than 1,100 active market participants that generate, move, buy, sell or use wholesale electricity.

It also gives Lubbock a diversified energy portfolio from Texas-based power plants. For instance, it provides full access to West Texas wind energy and a mix of conventional and renewable electric generation fueled by gas, coal and solar, the utility says. Texas is the leading wind energy state in the US.

In September 2017, the utility submitted its application to integrate approximately 70 percent of its system into ERCOT and in January the PUCT conducted a “Hearing on the Merits” to deliberate on whether the utility’s integration was in the public interest of all Texas ratepayers.

In February, PUCT Commissioners directed commission staff to draft a final order formally endorsing the plan at the commission’s March 8 meeting.

The March 8 approval by the PUCT allows LP&L to begin the next phase of the process, which will include the approval and construction of transmission facilities in order to connect the utility to the ERCOT grid by June 1, 2021. LP&L’s existing wholesale contract with SPP ends on that date.