Texas PUC Denies Aspire Complaint Seeking Re-pricing Of May 2019 ERCOT Price Spike Caused By QSE Input Error

Commissioners Direct ERCOT To Address Treatment Of Broader Pricing Issues From Input Errors

September 10, 2020

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The Public Utility Commission of Texas has denied a complaint filed by Aspire Commodities, LLC (Aspire) against the Electric Reliability Council of Texas, Inc. (ERCOT), in which Aspire had sought an order directing ERCOT to re-price the published settlement prices for interval 14:50 on May 30, 2019

The PUC adopted without modification a proposal for decision (PFD) in the case

As previously reported, Aspire had alleged that the event which led to the spike, a Qualified Scheduling Entity (Calpine) wrongly setting the HSL and LSL levels for certain generation it represented at 0, did not reflect a valid market solution. The input error led to prices for the interval reaching $9,000 per MWh. ERCOT issued a market notice on May 30, 2019 stating that it would not be performing a price correction for interval 14:50. See more background here

All three Commissioners agreed that ERCOT applied the protocols correctly.

However, the Commissioners agreed that ERCOT should further address the broader issues concerning market participants' inputs to ERCOT which had been raised in the complaint, with Chairman DeAnn T. Walker suggesting an NPRR should better define how such issues will be addressed and explicitly state how outside errors will be addressed

Walker did stress that ERCOT needs to rely on the inputs provided by the market participants -- there's no alternative to that -- and that no system will be perfect.

Commissioner Arthur C. D'Andrea said that the protocols should give express guidance for such situations as well

The three Commissioners did discuss whether the proposal for decision sufficiently addressed every issue raised in the complaint, but noted that there may be a "method to the madness" for the approach taken in the proposal for decision

As previously reported, the now-adopted proposal for decision stated that, "The resolution of this case hinges on the interpretation of ERCOT's nodal protocols, specifically, Nodal Protocols § 6.3(4). Aspire contends the price spike the [sic] for the 14:50 SCED interval constituted an 'invalid market solution' within the meaning of Nodal Protocols § 6.3(4), requiring ERCOT to re-price the interval. ERCOT contends that because the price spike was due an external telemetry error rather than a failure of an ERCOT system, that the circumstances did not rise to the level of an 'invalid market solution.' ERCOT therefore contends that it was not required to re-price the interval. The term 'invalid market solution' is not defined in ERCOT's protocols."

The PFD said, "The ALJ concludes that ERCOT correctly applied § 6.3(4) in failing to require a price correction in this case. ERCOT's interpretation is not inconsistent with the text of the protocol and appears to be consistent with its longstanding practices and a policy of market certainty. Although the impacts of the erroneous telemetry on operating day May 30, 2019 were extreme, given ERCOT's longstanding interpretation, market participants knowingly assume the risk of price fluctuations due to erroneous telemetry. Because the relevant facts are not disputed and the outcome of this case hinges purely on questions of law, summary decision is appropriate in this case under 16 Texas Administrative Code (TAC) § 22.182(a). The ALJ recommends that summary decision be granted in favor of ERCOT and that the relief sought in Aspire's complaint be denied."

"The language of ERCOT Protocol § 6.3(4) does not mandate a price correction when the pricing for an interval is impacted by erroneous telemetry from a QSE," the PFD concluded

In adopting the PFD, the PUC granted ERCOT's motion for summary decision and denied Aspire's complaint.

Docket 49673

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