Bill To Reduce PUC’s M&A Review Burden Passes Senate

April 11, 2019

 

A bill to ease the electricity market-share-review administrative burden of the Public Utility Commission of Texas has passed the Texas Senate.

With an increase in the number of mergers and acquisitions among power generation companies in ERCOT over the past few years, the PUC is getting backed up with reviews required by statute to keep an eye out that companies do not obtain excessive market power (owning “more than 20 percent of the total installed generation capacity in ERCOT” a bill analysis said).

The PUC says few of the reviews approach the 20% threshold of ownership limits, yet the number of reviews have jumped from five in 2015 to 26 in 2018, usually at about the same time at the end of the year, increasing the difficulty of the agency to perform the reviews in a timely manner.

The Utilities Code requires “incremental” reviews targeting transactions that involve more than one percent of the “total electricity for sale” in the state. — but to ease the burden on the PUC, Rep. Kelly Hancock‘s SB 1211 would raise that target from 1% to 10%, greatly lowering the number of transactions that automatically trigger PUC reviews.

SB 1211 passed unanimously from the Senate through the local and uncontested calendar on Thursday.