HomeNewsTexas grid operator, regulators in show down over financial disclosures

Texas grid operator, regulators in show down over financial disclosures

HOUSTON, Feb. 4 — The Texas grid operator appears to be headed for a show down with electricity market participants, state regulators, and consumer groups over release of its finances.

Austin Energy, the staff of the Public Utility Commission of Texas, the Office of Public Utility Counsel, and consumer groups filed formal requests seeking full disclosure of the Electric Reliability Council of Texas’ finances, including balance sheet and forecasted debt service obligations.

They want the statements to more fully understand why ERCOT wants to raise the mandatory fee charged to all electricity consumers within its market. So far ERCOT has turned down requests to be more forthcoming. ERCOT still has time to respond to the PUC staff’s filing. But sources close to the PUC staff said conversations with ERCOT indicate the documents won’t be released soon.

The mandatory fee charged Texas electricity consumers must be approved by the PUC as part of ERCOT’s budget. The approval process is little more than a vote up or down on a budget with relatively incomplete financial data to explain ERCOT’s financial requirements. Parties objected and the approval process will be a contested hearing. The fee is set at 22à‚¢/Mw-hr and is scheduled to increase to 25à‚¢/Mw-hr in 2004.

A prehearing conference was scheduled for Feb. 4, but the PUC canceled it. The full commission is scheduled to take up the issue at its Feb. 7 open meeting. “The staff is looking for guidance from the PUC on how to proceed,” said PUC spokesman Terry Hadley.

In several filings, ERCOT has said it doesn’t have the documents. The Office of Public Utility Council asked for audited financial statements covering or as of any date in 2001. ERCOT responded, “No documents responsive to the request are identified. Should ERCOT discover the existence of responsive documents in the future, ERCOT reserves the right to make further objection.”

Maxine Buckles, ERCOT chief financial officer, said the grid operator was “closing the 2001 books now. The audit won’t begin until the end of February.” She said the audited 2001 financial statement won’t be ready until April. She did not say if the statement would be made available to state regulators.

The late date for the audit and presentation of 2001 financial statements is the result of “scheduling and timing of the audit,” she said. “We don’t have a deadline like public companies. We are not under strict reporting requirements.”

ERCOT claims it is exempt from reporting requirements because of its status as a nonprofit corporation. Since it is not a state agency, ERCOT also claims it is not subject to open records. ERCOT receives its revenues and funding from “member” utilities and other market participants.

These participants pass the grid operator’s costs to customers who consume electric power transmitted over the ERCOT grid. While technically not a tax, the fee is mandatory, universal, and there are no alternatives.

According to the minutes of the board, Buckles presented a current monthly financial statement and a year-to-date statement at each board meeting during 2001. ERCOT referred the Office of Public Utility Counsel to the web site for the board minutes. But the statements were not included in the minutes posted on ERCOT’s web site.