Since deregulation of the Texas power industry in 1999, consumers have the opportunity to choose which Retail Electricity Provider (REP) best suits their needs. In a highly competitive marketplace, two factors continue to impact consumer choices – pricing and customer service.
Alliance Power Company is dedicated to delivering the lowest pricing possible for the longest period of time and one-on-one customer care. Come join Alliance Power’s family of customers. You’ll be glad you did!
ERCOT Securitization Bill Line Items
In the aftermath of the February 2021 Winter Storm Uri, the Texas legislature has enacted laws and authorized financial mechanisms that provide needed funds to stabilize the Texas electricity market. House Bill 4492 authorizes all Texas electricity providers to bill customers securitization charges for the next 30 years. Securitization measures are effective after a catastrophe because they spread the cost over many years and minimize the impact on customers. All electricity providers billing these securitization charges will pass the funds to the Electricity Reliability Council of Texas (ERCOT).
As a result, Alliance Power Company, LLC (APC) customers can expect to see two new line items on their monthly bills. These line items are “Securitization Default Charge” and “Securitization Uplift Charge”.
Securitization Default Charge: The Subchapter M debt obligation order, approved by PUCT in 2021, authorized ERCOT to finance a “default balance” amount not greater than $800 million.
Securitization Uplift Charge: The Subchapter N uplift order, approved by PUCT in 2021, authorized ERCOT to finance an “uplift balance” amount not greater than $2.1 billion.
We realize that many of our customers will not be familiar with House Bill (HB) 4492 or securitization, so we have put together some useful resources to help our customers get a better understanding.
Frequently Asked Questions & Links
What is the purpose of the securitization charges? One of the financial mechanisms created under House Bill 4492 is a bond that provides funds to cover the cost of the electricity scheduled for customers during the Texas Winter Storm Uri. All electricity providers billing these securitization charges will pass them on to the Electricity Reliability Council of Texas (ERCOT) as a mechanism to repay the bonds.
How does APC determine the charge amounts? APC calculates the securitization charges using the amount of prior months bond repayment due to ERCOT relative to the kWh. This factor will be applied to the current kWh period. Therefore, APC customers can expect the rate to change accordingly.
Since each Retail Electricity Provider (REP) has a different bond repayment amount, each REP will have a unique rate. The current Securitization Default Charge is $.0000356 per kWh and the Securitization Uplift Charge is $0.000588 per kWh. These amounts are subject to change during a contract term. The total charge calculation will be rounded up or down to the nearest cent before it is reflected on your bill.
Is APC the only electricity company billing the securitization charges? All electricity companies participating in the legislature-approved bond will repay the funds through the securitization charges.
How long will the securitization charges be added to the monthly bills? House Bill 4492 authorizes all Texas electricity providers to bill customers securitization charges for the next 30 years. This extended timeframe allows minimal impact on the customer’s overall bill.
Is it possible to opt-out of this charge or get a credit? Because Texas Winter Storm Uri was a natural event, no opt-out mechanisms or credits are available for customers for this legislature-approved regulatory pass-through charge. Commercial premises with a transmission voltage meter during the time of the winter storm were notified by their provider and given the opportunity to opt-out of securitization charges. Premises that opted out should provide notice to APC at the time of signing a contract so that their billing can be properly set up.
If you have any additional questions, please contact our Customer Service Department.