57463

Key events and submissions in this proceeding are as follows:

- December 30, 2024: SPS filed its application for approval of its transmission and distribution system resiliency plan 1, 2.
- January 22, 2025: Alliance of Xcel Municipalities (AXM) filed a motion to intervene 1.
- January 23, 2025: SOAH held a prehearing conference, granted AXM's motion to intervene, and set deadlines 3.
- January 27, 2025: Deadline for intervention 2.
- January 30, 2025: Deadline for discovery on applicant direct; agreed proposed procedural schedule filed 2, 4, 2.
- February 14–28, 2025: Objections, responses, and testimony deadlines for applicant, intervenors, and staff, including settlement conference 2, 2.
- March 4–20, 2025: Rebuttal and cross-rebuttal deadlines, prefiling of hearing exhibits, responses to objections 2, 2.
- March 25–26, 2025: Hearing on the merits scheduled 2, 2.
- April 8, 2025: Initial briefs due 2, 2.
- April 15, 2025: Reply briefs, proposed findings of fact and conclusions of law due 2, 2.

These dates reflect the major procedural steps and deadlines established by agreement and SOAH orders in this docket.

The stakeholders in PUC Docket No. 57463, concerning the Southwestern Public Service Company (SPS) system resiliency plan, include:

- Public Utility Commission of Texas (PUC)
- Southwestern Public Service Company (SPS)
- State Office of Administrative Hearings (SOAH)
- Intervenors, including:
- Office of Public Utility Counsel (OPUC)
- Texas Industrial Energy Consumers (TIEC)
- Golden Spread Electric Cooperative (GSEC)
- International Brotherhood of Electrical Workers (IBEW)
- Alliance of Xcel Municipalities (AXM)
- Walmart
- Other listed participants: Sierra Club, Canadian River Municipal Water Authority, Orion Engineered Carbons, Texas Cotton Ginners' Association, Amarillo Recycling Company, Federal Executive Agencies 1, 2, 3.

Positions regarding proposals:
- SPS: Proposed the system resiliency plan and agreed to modifications through settlement and stipulation with other parties 3.
- Commission Staff: Recommended approval of SPS’s application as modified by agreement; no objections to the adequacy of notice or sufficiency of the application 2.
- OPUC, TIEC, GSEC, IBEW, AXM, Walmart: Granted intervenor status and participated in the proceeding. There is no indication in the excerpts that any of these parties maintained opposition after the settlement agreement.
- Other parties (Sierra Club, etc.): Listed as service recipients/interested parties; their formal positions are not detailed in the available excerpts.
- No party objected to the sufficiency of notice or the application, and the final order indicated that there were no remaining contested issues of fact or law, suggesting that all major parties reached an agreement or did not oppose the final proposal 4, 3.

In summary, all major stakeholders either supported or did not oppose the SPS system resiliency plan as modified by the agreement and final order. No specific stakeholder is recorded as being against the final proposal in the provided excerpts.

The excerpts provided do not directly discuss "areas of growth" in the conventional sense (such as customer growth, load growth, or geographic expansion). However, the docket does identify several areas of strategic investment and system improvement for Southwestern Public Service Company (SPS) as part of its approved transmission and distribution system resiliency plan. These can be considered areas of operational and infrastructure growth, with key considerations for each:

1. Distribution Overhead Hardening:
- Description: Replacing and reinforcing distribution poles, replacing conductors, line transformers, and open-wire secondary in protection zones.
- Key Considerations: The average age of poles is high (38.96 years), and past equipment issues contributed to wildfire ignitions. The measure is expected to be highly cost-effective, with a benefit-cost ratio of 4.7. The goal is to reduce risk from wildfires and improve system reliability and resilience 1, 2.

2. Distribution System Protection Modernization:
- Description: Deployment of mainline automated reclosers and lateral reclosing devices.
- Key Considerations: These upgrades are intended to enhance fault isolation, reduce outage times, and support faster recovery from resiliency events such as extreme weather or wildfires 1, 2.

3. Wildfire Mitigation:
- Description: Programs for wildfire situational awareness and physical mitigation measures.
- Key Considerations: SPS’s service area has experienced increased wildfire risk over the past 50 years. The mitigation measures are designed to prevent, withstand, and recover from wildfire events, improving safety and system reliability 3, 2.

4. Operational Flexibility and Communications Modernization:
- Description: Migration of operational technology communications to a private LTE network and investments in mobile substations and other flexible assets.
- Key Considerations: These investments aim to improve response times, system reliability, and the ability to maintain operations during extreme events or infrastructure failures 4, 5.

5. Compliance with Regulatory and Reliability Requirements:
- Description: Ensuring all new measures comply with Public Utility Commission of Texas rules, Southwest Power Pool (SPP) requirements, and NERC reliability standards.
- Key Considerations: Growth in these areas is contingent on meeting strict regulatory standards and reporting requirements. SPS must report on the effectiveness of these measures and may only amend the resiliency plan after three years unless otherwise approved 6, 7.

In summary, the docket’s areas of growth are focused on infrastructure modernization, risk mitigation (especially related to wildfires), enhanced operational flexibility, and strengthened compliance/reporting, all with the aim of improving system resilience and public safety. Each area is tied to specific cost-benefit analyses and regulatory oversight.

The financial and timeline risks and concerns discussed in this docket include:

Financial Risks and Concerns:
- The benefit-cost ratio (BCR) calculations for resiliency investments depend on assumptions such as a 2.5% escalation rate and a 6.5% discount rate, applied over a 50-year lifecycle. Sensitivity analyses were requested to determine how changes in these parameters could affect the BCRs, indicating concern about the robustness of the financial assumptions and the impact on investment justification 1.
- The actual rate impacts for customers are subject to numerous variables, including total costs of the approved system resiliency plan (SRP), timing of capital investments and O&M activities, amortization of cost deferrals, asset retirements, and changes in cost of capital, future usage, and customer growth. Any changes to these assumptions up to 2028 will affect what customers actually pay, highlighting uncertainty in cost recovery and potential volatility in customer rates 2.
- There are requests for flexibility in amortization periods for recovering costs associated with the SRP, and the commission has previously declined to set fixed amortization periods during initial approvals, reserving those decisions for future proceedings. This introduces uncertainty regarding cost recovery timing and amounts 2.
- The plan requests authority to establish a regulatory asset to capture distribution-related costs and to defer all costs associated with the preparation and defense of the application, indicating recognition of potential additional unplanned expenses 3.

Timeline Risks and Concerns:
- Implementation schedules for resiliency measures may need to be adjusted if approvals (such as outage approvals) from the Southwest Power Pool are delayed or not granted, which could impact timely execution of the SRP 3.
- Regulatory flexibility is requested to allow deviations from approved implementation schedules as necessary, suggesting the timeline is dependent on external regulatory and operational factors that may not be fully controllable by the utility 3.
- The commission requires SPS to file a conforming copy of its SRP within thirty days of the order, and future amendments to the SRP cannot take effect before three years after the most recent approval, introducing a timeline structure but also potential delays if amendments are needed 4.

In summary, the key financial risks involve sensitivity to financial assumptions, uncertain cost recovery timing and amounts, and potential for additional regulatory or operational costs. Timeline risks center on regulatory dependencies, required flexibility for implementation schedules, and mandated waiting periods for amendments.

Docket No. 57463 concerns the application by Southwestern Public Service Company (SPS) for approval of its transmission and distribution system resiliency plan. The plan, filed with the Public Utility Commission of Texas on December 31, 2024, aims to prevent, withstand, mitigate, or promptly recover from risks posed by resiliency events to SPS’s electric transmission and distribution systems. The plan includes specific measures such as mainline and lateral automated reclosing deployment, wildfire mitigation programs, and communication modernization (private LTE network, optical ground wire, and remote terminal unit upgrades). SPS did not coordinate with other government programs for these measures but plans to seek state grant funding for parts of the investment.

The projected cost of the plan is $538.3 million, estimated to increase residential customer bills by $10.94 per month. Comparisons show this cost per customer is higher than similar plans by other utilities. Stakeholders such as the Alliance of Xcel Municipalities, Texas Industrial Energy Consumers, and Golden Spread Electric Cooperative have participated in the proceeding, raising issues about cost allocation, functionalization of certain costs, and budget flexibility. The docket also involves extensive protective order procedures due to the presence of confidential and highly sensitive materials.

The Commission’s order requires SPS to comply with reporting, planning, and implementation requirements, and allows for amendments to the resiliency plan only after three years from the most recent approval. The order does not set precedent for methodologies used in the plan, and all other motions not expressly granted were denied 1, 2, 3, 4.