AEP Texas Central Co. v. Public Utility Comm’n of Texas, et al.

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This appeal challenged a final order of the Public Utility Commission (PUC) in a true-up proceeding under Chapter 39 of the Utilities Code. AEP Texas Central Co. (AEP), a transmission and distribution utility, and CPL Retail Energy, L.P., its affiliated retail electric provider, initiated a proceeding under section 39.262 to finalize stranded costs and other true-up amounts and the state, several municipalities, and several other parties who were consumers of electricity or represent consumer interests (collectively, consumers), intervened in the proceeding. The issues before the court concern market value, net book value (NBV), and the capacity auction true-up. The court held that where, as here, the utility managed to sell its stake in a nuclear plant, the court saw no error in using the sale of assets method, which was, if anything, the preferred method for valuing generation assets. The court also held that it saw no error in PUC's approach where the interest rate AEP received on its stranded costs was grossed up. The court further held that section 39.262 unambiguously specified that the statutory capacity auction price, not some other blended price the PUC found more appropriate, must be used in calculating the capacity auction true-up amount. On remand, the PUC must recalculate the capacity auction true-up in a manner consistent with the court's opinion in State v. PUC, rather than relying on the proxy price it selected in the true-up proceeding. Accordingly, the court granted the petition for review, affirming in part and reversing in part. View "AEP Texas Central Co. v. Public Utility Comm'n of Texas, et al." on Justia Law