ERCOT Securitization Charge

Line Item Charge Explained

In February 2021, Winter Storm Uri resulted in outages at many of the generation resources within the ERCOT region, and the demand for power exceeded supply for several days during the week of the storm which ultimately led to financial instability of the ERCOT market. To address these problems, the Texas Legislature enacted a bill that authorized a financing mechanism to provide funds to help ERCOT and market participants meet their obligations. The bill added subchapters M and N to chapter 39 of PURA and provided authority for a financing mechanism to address the financial problem.

The Legislature found that the use of the financing mechanism authorized in subchapter N will allow wholesale market participants who were assessed extraordinary charges due to consumption during the period of emergency to pay those charges over a longer time frame, alleviating liquidity issues and reducing the risk of additional instability in the wholesale market. The Legislature also found that authorizing financing under subchapter N serves the public purpose of stabilizing the wholesale electricity market in the ERCOT region. All electricity providers billing these securitization charges will pass  collected amounts on to the Electricity Reliability Council of Texas (ERCOT).

As a result, Chariot Energy customers will begin seeing an additional charge on their billing statement labeled “ERCOT Securitization” beginning with bills issued in September 2022.

For more legislation-related information, please refer to these links

PURA

https://statutes.capitol.texas.gov/Docs/UT/htm/UT.39.htm

ERCOT

https://www.ercot.com/about/hb4492securitization

Frequently Asked Questions (FAQs)

How does Chariot determine the charge amounts?

Chariot calculates the securitization charges per customer using the securitization amount billed by ERCOT to Chariot and the usage incurred by customers over the period.

Since each Retail Electricity Provider (REP) has a different share of the ERCOT securitization charges, each REP will have unique rates.

These charges are subject to change based upon actual future ERCOT billings to Chariot for securitization charges.

How long will the securitization charges be added to the monthly bills?

House Bill 4492 authorizes all Texas REPs 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.