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Texas Sunset Commission staff finds 6 issues with the state’s electric industry regulator

The Sunset staff’s report lists six issues spread across the PUC, ERCOT and the Office of Public Utility Counsel.

AUSTIN, Texas — The Texas Sunset Advisory Commission is a legislative commission tasked with overseeing state agencies.

This week, Sunset staff issued a report showing six issues spread across the Public Utility Commission (PUC), the Electric Reliability Council of Texas (ERCOT) and the Office of Public Utility Counsel (OPUC).

The Sunset staff wrote that it heard concerns about PUC and ERCOT needing to adapt to new technology, extreme weather and population growth. 

“However, in a deregulated environment, the market – and the private businesses that participate in it – largely determines electricity prices, as well as where and what type of generation is built. As such, the state has no single entity comprehensively planning to ensure there is enough electricity to meet future needs or how changing technology, consumer behavior and weather will affect those needs,” the report shows.

The staff wrote its focus was to review PUC’s internal processes.

Issue 1: "Without Additional Resources and Clear Decision-Making Processes in Place, PUC Cannot Truly Fulfill Expectations for Ensuring a Reliable Electric Grid."

Key recommendations:

  • The House Appropriations and Senate Finance committees should consider appropriating PUC its exceptional item requests for funding a data analytics team and additional engineering expertise.
  • Authorize PUC to issue directives to ERCOT outside formal rulemaking and contested cases and authorize stakeholders to formally weigh in on these directives.
  • Authorize ERCOT to restrict commissioners’ presence at executive sessions.
  • Direct PUC to develop, in rule, a state reliability definition.

Issue 2: "To Restore Trust, PUC Needs to Further Improve Its Public Communication Efforts."

Key recommendations:

  • Require PUC to develop and regularly update a strategic communications plan. 5 PUC, ERCOT and OPUC Executive Summary of Sunset Staff Report Sunset Advisory Commission November 2022 
  • Direct PUC and ERCOT to create a guidance document to better coordinate public communications. 
  • Direct PUC to provide up-to-date, easily accessible information as part of its current website redesign efforts.

Issue 3: "PUC Needs Additional Resources and Attention Focused on Its Water and Wastewater Regulation to Avoid Overburdening Utilities and Their Customers."

Key recommendations:

  • The House Appropriations and Senate Finance committees should consider increasing PUC’s appropriation to ensure it can recover its costs to regulate water and wastewater utilities efficiently. 
  • Direct PUC to comprehensively review its water and wastewater rules, processes, and guidance documents to identify and address areas for improvement. 
  • Amend statute to extend the length of an emergency temporary manager appointment.

Issue 4: "PUC’s Poor Data Practices and Lack of Policies and Procedures Limit Its Ability to Best Allocate Resources and Serve the Regulated Community."

Key recommendations:

  • Direct PUC to develop a plan to prioritize improving its case data collection and analysis.
  • Direct PUC’s Legal Division and Office of Policy and Docket Management to develop comprehensive policies and procedures. 
  • Direct PUC to create and maintain a precedent manual, prioritizing rulings related to water and wastewater regulation.

Issue 5: "Texas Has a Continuing Need for PUC."

Key recommendations:

  • Continue PUC for six years and remove the Sunset date of the agency’s enabling statute. 
  • Abolish two and modify four of PUC’s reporting requirements. 
  • Direct PUC to update its policy guiding the agency’s rule review process to ensure identified deficiencies in the rules are addressed

Issue 6: "The State Has a Continuing Need for OPUC, but the Agency Should Strengthen Its Processes for Contracting With Legal Expert Witnesses."

Key recommendations:

  • Continue OPUC for six years and remove the Sunset date of the agency’s enabling statute. 
  • Direct OPUC to formalize and document certain contracting processes for legal expert witnesses.

KVUE reached out to the PUC for comment. Rich Parsons, the PUC's director of communications, wrote that the commission is reviewing the staff report and, “will file written comments in response by the Nov. 30 deadline.” 

This report is one of three from the Sunset staff. The next report will include the first report plus the commission's decision on recommendations to propose to the Texas Legislature and which ones the agency should implement. The third report will include the first two reports plus the Legislature’s final actions.

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